‐‐‐‐‐ Original Message

‐‐‐‐‐

From: John Rossetti [mailto:JRossetti@mlgw.org]

Sent: Wednesday, November 16, 2011 10:38 AM

To: Robert Berman; Wes Patterson

Cc: Steve Nadel; Eric.Petersen@aksteel.com; jerry.schoen@aksteel.com; Maxine

(EMAB) Savitz; mhyland@appanet.org; Raymond.Polinski@ATImetals.com;

maheshsampat@bellsouth.net; Bruce R Hirsch; tpetrosino@carolina.rr.com;

dbrender@cda.copper.org; James.Lass@cleco.com; chris.brown@cogentpowerinc.com;

frank.guilbault@cogentpowerinc.com; ted.johnstone@cogentpowerinc.com;

AaronMeyers; Antonio Trujillo; Jack C Moore; Jerry L Corkran;

tballo@earthjustice.org; carlosgsiqueiros@eaton.com; eduardorobles@eaton.com;

Emily (CONTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John Cymbalsky;

srosenstock@eei.org; DYoung@energy

‐ solution.com; rick.anderson@faypwc.com;

bsmith@federalpacific.com; rgreeson@federalpacific.com; carlos.gaytan@ge.com;

artrosenfeld@gmail.com; greg.coulter405@gmail.com; ned.efbrush@gmail.com; Richard

Parker; Paul.Ryan@hitmet.com; jhodge@howard.com; Daniel Cohen; Phil Hopkinson;

cabolduc@lbl.gov; gjrosenquist@lbl.gov; kcoughlin@lbl.gov; ScottB@LVMetals.com;

dave.millure@metglas.com; kwinder@mleainc.com; Brian Coffey; Caitlin Johnson;

Matthew Nardotti; Michael Rivest; Zhimei Luo; Jim Creevy; John Caskey;

mwaltner@nrdc.org; rroy@nrdc.org; robert.saint@nreca.coop; Teckman@nwcouncil.org;

vijay.tendulkar@onyxpower.com; gbf1@pge.com; chuck.simmons@pgnmail.com;

ahofmann@publicpower.org; pkumar@publicpower.org; adelaski@standardsASAP.org;

jmauer@standardsasap.org; chad.kennedy@us.schneider

‐ electric.com;

thomas.patzner@us.schneider

‐ electric.com; charlied@uus.org

Subject: Re: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

FYI

To all,

The following lists 5 items copied from MLGW's 5 year distribution transformer

bid received December 2009.

The items are single

‐ phase pad

‐ mounted transformers rated 22 860

GrdY/13 200 volts 125 kV BIL to 240/120 volts.

UNIT

BID LOSS EVALUATED QUOTED LOSSES

(WATTS)

kVA PRICE EVALUATION COST CORE WINDING

TOTAL EFFICIENCY

25 $1,139.00 $636.43 $1,775.43

61 309 370 98.91%

50 $1,575.00 $1,073.10 $2,648.10

100 530 630 99.08%

75 $1,834.00 $1,459.29

$3,293.29 134 727 861 99.17%

100 $2,276.00 $1,793.98 $4,069.98

171 874 1045 99.23%

Note: "A" "B"$4.00 $1.27

John Rossetti

Systems Engineer

Memphis Light Gas and Water Division (MLGW)

>>> Robert Berman <bermaneconomics@gmail.com> 11/16/2011 9:12 AM >>>

Hi Wes,

Are you saying that the base price of a 50 kVA, for example, is twice the $2150

that DOE shows (I;m seeing $1250 on open bid) or are you saying that the factor

of 2 kicks in further up the line, due to the "bow"? If the latter, where are you

seeing it?

I'm certain that the open bid public power data are not representative of the

market. They were all TOC, all public power, all very small quantities, appeared

to have A factors of around $8+, and the prices were higher than what utilities

that I spot

‐ checked them against said that they were paying. I'm interpreting it

as, at best, an upper bound on market prices, and some indication of what PPUs

may find manageable in terms of efficiencies (e.g., an efficiency resulting from

TOC design to an $8 A factor does not appear to be unreasonable).

Thank you for the most recent data dump and very useful reflections. I plan to

get back to you when I've had a chance to really go through it.

I feel a bit like a kid in a candy store with everything you've provided. As a

long

‐ time modeler, I know that under the best of circumstances a model is an

abstraction of reality, so it's important to tie to reality whenever we can.

Transformers are sold in a market, not in a computer. This is especially true of

forecasts. President Kennedy's Chief Economist, Walter Heller, is reputed to have

advised on forecasting "give the date OR the event, not both".

Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.com

On Nov 16, 2011, at 8:56 AM, Wes Patterson wrote:

Hi Robert

I find these discussions most informative and thank you for your

insights.But I disagree with your last comments regarding the DOE cost curves

My data indicates that the DOE cost curves are greatly understated

‐ perhaps as much as a factor of 2. Also note that these are power

relations and not linear.

Perhaps the open

‐ bid public power data represents a distorted sample of

the total market.

Please reference my concerns expressed at the bottom of my last email.

I would like to understand what impact a much steeper cost curve will

have on the LCC and PBP results.

You thoughts would be most appreciated.

Best regards

Wes

Robert Berman <bermaneconomics@gmail.com>

11/16/2011 08:28 AM

To

"Hirsch, Bruce R" <Bruce.R.Hirsch@bge.com>

cc

'Robert Berman' <bermaneconomics@gmail.com>, Phil Hopkinson

<phopkinson@hvolt.com>, Steve Nadel <snadel@aceee.org>, John Caskey

<Joh_Caskey@Nema.org>, "Eric.Petersen@aksteel.com"

<Eric.Petersen@aksteel.com>, "jerry.schoen@aksteel.com"

<jerry.schoen@aksteel.com>, "Maxine (EMAB) Savitz"

<maxinesavitz@aol.com>, "mhyland@appanet.org" <mhyland@appanet.org>,

"Raymond.Polinski@ATImetals.com" <Raymond.Polinski@atimetals.com>,

"maheshsampat@bellsouth.net" <maheshsampat@bellsouth.net>,

"tpetrosino@carolina.rr.com" <tpetrosino@carolina.rr.com>,

"dbrender@cda.copper.org" <dbrender@cda.copper.org>,

"James.Lass@cleco.com" <James.Lass@cleco.com>,

"chris.brown@cogentpowerinc.com" <chris.brown@cogentpowerinc.com>,

"frank.guilbault@cogentpowerinc.com"

<frank.guilbault@cogentpowerinc.com>,

"ted.johnstone@cogentpowerinc.com"

<ted.johnstone@cogentpowerinc.com>, AaronMeyers

<Aaron.Meyers@CooperIndustries.com>, Antonio Trujillo

<Antonio.Trujillo@CooperIndustries.com>, Jack C Moore

<Jack.Moore@CooperIndustries.com>, Jerry L Corkran

<Jerry.Corkran@CooperIndustries.com>, "tballo@earthjustice.org"

<tballo@earthjustice.org>, "carlosgsiqueiros@eaton.com"

<carlosgsiqueiros@eaton.com>, "eduardorobles@eaton.com"

<eduardorobles@eaton.com>, "Emily (CONTR) Marchetti"<Emily.Marchetti@ee.doe.gov>, "Jeremiah (CONTR) Freeman"

<Jeremiah.Freeman@ee.doe.gov>, Jim Raba <Jim.Raba@ee.doe.gov>, John

Cymbalsky <John.Cymbalsky@ee.doe.gov>, "srosenstock@eei.org"

<srosenstock@eei.org>, "DYoung@energy

‐ solution.com"

<DYoung@energy

‐ solution.com>, "rick.anderson@faypwc.com"

<rick.anderson@faypwc.com>, "bsmith@federalpacific.com"

<bsmith@federalpacific.com>, "rgreeson@federalpacific.com"

<rgreeson@federalpacific.com>, "carlos.gaytan@ge.com"

<carlos.gaytan@ge.com>, "artrosenfeld@gmail.com"

<artrosenfeld@gmail.com>, "greg.coulter405@gmail.com"

<greg.coulter405@gmail.com>, "ned.efbrush@gmail.com"

<ned.efbrush@gmail.com>, Richard Parker <richardparkerdc@gmail.com>,

"Paul.Ryan@hitmet.com" <Paul.Ryan@hitmet.com>, "jhodge@howard.com"

<jhodge@howard.com>, Daniel Cohen <Daniel.Cohen@hq.doe.gov>,

"cabolduc@lbl.gov" <cabolduc@lbl.gov>, "gjrosenquist@lbl.gov"

<gjrosenquist@lbl.gov>, "kcoughlin@lbl.gov" <kcoughlin@lbl.gov>,

"ScottB@LVMetals.com" <ScottB@lvmetals.com>,

"dave.millure@metglas.com" <dave.millure@metglas.com>,

"kwinder@mleainc.com" <kwinder@mleainc.com>, "jrossetti@mlgw.org"

<jrossetti@mlgw.org>, "brian.coffey@navigant.com"

<brian.coffey@navigant.com>, "caitlin.johnson@navigant.com"

<caitlin.johnson@navigant.com>, "matthew.nardotti@navigant.com"

<matthew.nardotti@navigant.com>, "mrivest@navigant.com"

<mrivest@navigant.com>, "zhimei.luo@navigant.com"

<zhimei.luo@navigant.com>, Jim Creevy <Jim.Creevy@Nema.org>,

"mwaltner@nrdc.org" <mwaltner@nrdc.org>, "rroy@nrdc.org"

<rroy@nrdc.org>, "robert.saint@nreca.coop" <robert.saint@nreca.coop>,

"Teckman@nwcouncil.org" <Teckman@nwcouncil.org>,

"vijay.tendulkar@onyxpower.com" <vijay.tendulkar@onyxpower.com>,

"gbf1@pge.com" <gbf1@pge.com>, "chuck.simmons@pgnmail.com"

<chuck.simmons@pgnmail.com>, "ahofmann@publicpower.org"

<ahofmann@publicpower.org>, "pkumar@publicpower.org"

<pkumar@publicpower.org>, "adelaski@standardsASAP.org"

<adelaski@standardsasap.org>, "jmauer@standardsasap.org"

<jmauer@standardsasap.org>, Wes Patterson/SouthBoston/USTRA/ABB@ABB,

"chad.kennedy@us.schneider

‐ electric.com"

<chad.kennedy@us.schneider

‐ electric.com>,

"thomas.patzner@us.schneider

‐ electric.com"

<thomas.patzner@us.schneider

‐ electric.com>, "charlied@uus.org"

<charlied@uus.org>

Subject

Re: Negotiated Rulemaking

‐ Distribution Transformers Teleconference

Bruce,

I understand; but at any given point in time, a Watt saved is a Watt

saved. It does nat matter where in the transformer it is saved or if it

is saved by a consumer turning off a light. It is one less Watt.Regardless of where the Watt is saved from it has the same value. That

value is the cost of the last Watt produced (not the first, middle or

average). If you save enough Watts to take down a generating unit, you

save the money that would have been spent on that unit. The unit you

take down is the highest cost unit (unless it's a must run). That's the

last unit you dispatched. If you don't save that Watt, you charge your

customer for it or, if a loss, you charge it off to losses for

ratemaking purposes. If BGE is willing to bill its TOD customers taking

power at peak at the cost of generating from a baseload unit because

it's for power that they take 24x7 I'll concede your point. If BGE, in

it's next rate case, values it's losses at peak differently depending

upon whether they are coil or core losses, I'll concede your point. But

has long as you charge TOD customers and peak load losses based on

marginal costs, your argument is not consistent.

I agree 100% with you position on correcting the DOE cost curves. They

need to be lowered and flattened.They are predicting costs that are

higher than small quantity open

‐ bid public power sales reported on the

internet.

Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.com

On Nov 16, 2011, at 7:58 AM, Hirsch, Bruce R wrote:

Robert,

This happens all the time in “time of day” rates. The fact is that

it is cheaper to produce electricity at a core generating station than

at the peaking plants. It also is cost effective to keep core stations

running. With that said, I think the issue is that you and Phil are

looking at this from a different point of view. Phil is looking at the

cost to generate and he is correct. You are looking at the value of

avoiding generation altogether and you are also correct.

It is important to understand that our (or DOE’s) decision cannot be

made on any one factor. All of the issues put on the table are important

issues that must be factored into the final decision. My main concern at

this time is that the Advocate’s case is based on the DOE calculated

pay back periods that utilize a projected cost that is much less than

that seen by the only manufacturer who has experience building higher

efficiency units with M3 steel. Robert, you have pushed us to considerhistorical experience over models. Thus, I believe we need to step back

and look at what the ABB data is really telling us and correct the DOE

calculations as appropriate.

Bruce

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

Sent: Tuesday, November 15, 2011 7:57 PM

To: Phil Hopkinson

Cc: Robert Berman; Steve Nadel; Hirsch, Bruce R; John Caskey;

Eric.Petersen@aksteel.com; jerry.schoen@aksteel.com; Maxine (EMAB)

Savitz; mhyland@appanet.org;

Raymond.Polinski@ATImetals.com;maheshsampat@bellsouth.net;

tpetrosino@carolina.rr.com; dbrender@cda.copper.org;

James.Lass@cleco.com; chris.brown@cogentpowerinc.com;

frank.guilbault@cogentpowerinc.com;ted.johnstone@cogentpowerinc.com;

AaronMeyers; Antonio Trujillo; Jack C Moore; Jerry L Corkran;

tballo@earthjustice.org; carlosgsiqueiros@eaton.com;

eduardorobles@eaton.com; Emily (CONTR) Marchetti; Jeremiah (CONTR)

Freeman; Jim Raba; John Cymbalsky; srosenstock@eei.org;

DYoung@energy

‐ solution.com; rick.anderson@faypwc.com;

bsmith@federalpacific.com; rgreeson@federalpacific.com;

carlos.gaytan@ge.com;artrosenfeld@gmail.com;

greg.coulter405@gmail.com; ned.efbrush@gmail.com; Richard Parker;

Paul.Ryan@hitmet.com; jhodge@howard.com; Daniel Cohen;

cabolduc@lbl.gov; gjrosenquist@lbl.gov;

kcoughlin@lbl.gov;ScottB@LVMetals.com; dave.millure@metglas.com;

kwinder@mleainc.com; jrossetti@mlgw.org; brian.coffey@navigant.com;

caitlin.johnson@navigant.com; matthew.nardotti@navigant.com;

mrivest@navigant.com;zhimei.luo@navigant.com; Jim Creevy;

mwaltner@nrdc.org; rroy@nrdc.org; robert.saint@nreca.coop;

Teckman@nwcouncil.org; vijay.tendulkar@onyxpower.com; gbf1@pge.com;

chuck.simmons@pgnmail.com;ahofmann@publicpower.org;

pkumar@publicpower.org; adelaski@standardsASAP.org;

jmauer@standardsasap.org; wes.patterson@us.abb.com;

chad.kennedy@us.schneider

‐ electric.com;

thomas.patzner@us.schneider

‐ electric.com; charlied@uus.org

Subject: Re: Negotiated Rulemaking

‐ Distribution Transformers

Teleconference

Sorry that you disagree. A loss is a loss no matter where it comes

from. It's the VALUE that changes. The core loss still exists at peak.

Why in the world would you put a lower value on the core loss at peak

just because it ALSO exists at off

‐ peak times as well?

Regards,

Robert A. Berman, Principal

Berman Economics

1915 Grand CourtVienna, VA 22182

703.281.0490

703.655.8398 (cell)

Berman.Economics@gmail.com

www.BermanEconomics.com

Sent from my iPhone

On Nov 15, 2011, at 5:30 PM, Phil Hopkinson <phopkinson@hvolt.com>

wrote:

Good afternoon Robert and all:

I must disagree fundamentally with the way you have characterized the

loss values. At night when the load is light everywhere then the energy

cost is also low and those who have time of day metering can attest to

it. If the load is as low as 10% then what is left is largely core loss

and the generation is only base generation at very low cost per kWH.

During the day when the load is high the peak generators are all fired

up and that is expensive energy. There the winding losses are the big

contribution to total transformer losses. Unfortunately when one has an

amorphous transformer that meets the same efficiency as an M3

transformer it has higher winding losses than the M3. In the modeling

that Jerry Corkran and I did we found that the amorphous transformer had

higher day time losses than the M3 which looks like it takes away from

the enthusiasm for amorphous cores as a National standard.

The bottom line is that core loss is not as valuable as winding loss on

a watt for watt tradeoff.

Best regards,

Phil

Philip J Hopkinson, PE

President & CEO HVOLT Inc.

3704 High Ridge Rd.

Charlotte, NC 28270

phopkinson@hvolt.com

Ph 704

‐ 846

‐ 3290

Fx 704

‐ 845

‐ 2520

Cell 704

‐ 236

‐ 3320

www.hvolt.com

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

Sent: Tuesday, November 15, 2011 1:23 PM

To: Steve Nadel

Cc: Bruce R Hirsch; Robert Berman; John Caskey;

Eric.Petersen@aksteel.com; jerry.schoen@aksteel.com; Maxine (EMAB)

Savitz; mhyland@appanet.org;

Raymond.Polinski@ATImetals.com;maheshsampat@bellsouth.net;

tpetrosino@carolina.rr.com; dbrender@cda.copper.org;James.Lass@cleco.com; chris.brown@cogentpowerinc.com;

frank.guilbault@cogentpowerinc.com;ted.johnstone@cogentpowerinc.com;

Aaron Meyers; Antonio Trujillo; Jack C Moore; Jerry L Corkran;

tballo@earthjustice.org; carlosgsiqueiros@eaton.com;

eduardorobles@eaton.com; Emily (CONTR) Marchetti; Jeremiah (CONTR)

Freeman; Jim Raba; John Cymbalsky; srosenstock@eei.org;

DYoung@energy

‐ solution.com; rick.anderson@faypwc.com;

bsmith@federalpacific.com;rgreeson@federalpacific.com;

carlos.gaytan@ge.com; artrosenfeld@gmail.com;

greg.coulter405@gmail.com; ned.efbrush@gmail.com; Richard Parker;

Paul.Ryan@hitmet.com; jhodge@howard.com; Daniel Cohen; Phil

Hopkinson; cabolduc@lbl.gov; gjrosenquist@lbl.gov; kcoughlin@lbl.gov;

ScottB@LVMetals.com; dave.millure@metglas.com; kwinder@mleainc.com;

jrossetti@mlgw.org;brian.coffey@navigant.com;

caitlin.johnson@navigant.com; matthew.nardotti@navigant.com;

mrivest@navigant.com; zhimei.luo@navigant.com; Jim Creevy;

mwaltner@nrdc.org; rroy@nrdc.org;robert.saint@nreca.coop;

Teckman@nwcouncil.org; vijay.tendulkar@onyxpower.com; gbf1@pge.com;

chuck.simmons@pgnmail.com; ahofmann@publicpower.org;

pkumar@publicpower.org;adelaski@standardsASAP.org;

jmauer@standardsasap.org; wes.patterson@us.abb.com;

chad.kennedy@us.schneider

‐ electric.com;

thomas.patzner@us.schneider

‐ electric.com; charlied@uus.org

Subject: Re: Negotiated Rulemaking

‐ Distribution Transformers

Teleconference

Steve,

The statement that "reducing transformer losses primarily affects

baseload, not peak" is a bit of an over simplification. Reducing

transformer losses affects both base and peak. The value of the loss at

any point in time is then marginal cost or system lambda. That is, the

value of reducing transformer losses is the greater of the cost of the

next unit that would have been dispatched, but for the reduced load

attributable to the transformer, or the cost of generation from the last

unit actually dispatched, but used less due to the more efficient

transformer. Because generation is brought on line least

‐ cost first,

losses are evaluated in reverse order

‐‐ highest cost first. As Katie

Coughlin explained at the last meeting, this is the way LBNL evaluates

benefits. Thus in the early years, the more efficient transformer may

actually save substantially more money than in later years, when the

older, higher cost units have been retired. I don't believe this benefit

is picked up by the LBNL modeling, as it requires more detailed

information

‐‐ at least hourly marginal costs for each power pool.

Regards,

Bob

Robert A. Berman, PrincipalBerman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.com

On Nov 15, 2011, at 8:57 AM, Steve Nadel wrote:

Two comments. First, some comments have focused on just the market for

M3 and amorphous steel. The two markets are linked

‐‐ we need

competition between the two to keep the price of both in check. We

don't want a standard that strongly favors one over the other. The

revised DOE analysis on the mix between M3 and amorphous at different

standard levels should help us to address this. Second, reducing

transformer losses primarily affects baseload, not peak. So talking

about cost per kW is misleading. An efficient transformer is energized

for more than 8000 hours per year. The average DSM measure saves for

about 3000 hours per year (although there is wide variation). If you

want to compare, you'd need to compare levelized cost per kWh saved over

the measure lifetime.

Steve

>>> "Hirsch, Bruce R" <Bruce.R.Hirsch@bge.com> 11/15/2011 7:37 AM >>>

John’s points are well taken. Keep in mind that the DOE numbers

indicate a payback at EL4 only if amorphous steel is used. Thus, to

assume that because it can be built using M3 steel, all is well, is

totally untrue. In John’s auto analogy, at least the customer has a

choice of spending the extra money. In our case, the customer will have

no choice.

We all also need to understand that there is not an infinite supply of

money to spend on efficiency improvements. By forcing utilities to spend

money on improving transformer efficiencies, we may very well be taking

money out of other efficiency programs which have a much higher payback

than what is being proposed here. In BGE’s case our package of

efficiency programs cost us approximately $139 per kilowatt saved. What

is being proposed here is up to 100 times more costly. If BGE pulls back

funds from other efficiency programs to pay the high costs for

transformer efficiencies, we would see a significant decline in

efficiency improvements overall.

BruceFrom: Caskey, John [mailto:Joh_Caskey@nema.org]

Sent: Monday, November 14, 2011 3:14 PM

To: Robert Berman; Hirsch, Bruce R

Cc: 'Steve Nadel'; Phil Hopkinson; Eric.Petersen@aksteel.com;

jerry.schoen@aksteel.com; Maxine (EMAB) Savitz; mhyland@appanet.org;

Raymond.Polinski@ATImetals.com;

maheshsampat@bellsouth.net;tpetrosino@carolina.rr.com;

dbrender@cda.copper.org; James.Lass@cleco.com;

chris.brown@cogentpowerinc.com; frank.guilbault@cogentpowerinc.com;

ted.johnstone@cogentpowerinc.com; Aaron Meyers; Antonio Trujillo;

Jack C Moore; Jerry L Corkran; tballo@earthjustice.org;

carlosgsiqueiros@eaton.com; eduardorobles@eaton.com; Emily (CONTR)

Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John

Cymbalsky;srosenstock@eei.org; DYoung@energy

‐ solution.com;

rick.anderson@faypwc.com; bsmith@federalpacific.com;

rgreeson@federalpacific.com; carlos.gaytan@ge.com;

artrosenfeld@gmail.com;

greg.coulter405@gmail.com;ned.efbrush@gmail.com; Richard Parker;

Paul.Ryan@hitmet.com; jhodge@howard.com; Daniel Cohen;

cabolduc@lbl.gov; gjrosenquist@lbl.gov; kcoughlin@lbl.gov;

ScottB@LVMetals.com; dave.millure@metglas.com;kwinder@mleainc.com;

jrossetti@mlgw.org; brian.coffey@navigant.com;

caitlin.johnson@navigant.com; matthew.nardotti@navigant.com;

mrivest@navigant.com; zhimei.luo@navigant.com; Creevy,

Jim;mwaltner@nrdc.org; rroy@nrdc.org; robert.saint@nreca.coop;

Teckman@nwcouncil.org; vijay.tendulkar@onyxpower.com; gbf1@pge.com;

chuck.simmons@pgnmail.com;

ahofmann@publicpower.org;pkumar@publicpower.org;

adelaski@standardsASAP.org; jmauer@standardsasap.org;

wes.patterson@us.abb.com; chad.kennedy@us.schneider

‐ electric.com;

thomas.patzner@us.schneider

‐ electric.com; charlied@uus.org

Subject: RE: Negotiated Rulemaking

‐ Distribution Transformers

Teleconference

Robert

You continue to reference the ABB data presented by Wes Patterson as

indicating that since a transformer was sold at the EL3 or EL4

efficiency level that this level is cost effective. Specifically, you

state “Market sales data, however, is quite real. In this case it

unambiguously says that the transformers at EL4 are an economically

reasonable choice

‐‐ the market has, in fact, selected that choice on

multiple occasions”. This is simply NOT TRUE.

Just because a person buys as Jaguar for $100k that gets 25 mpg in

place of a $40k Cadillac that gets 20 mpg; does NOT mean that the $60k

delta will ever be “economically reasonable” for the extra 5 mpg.You seem to be assuming that all of the transformers purchased from ABB

that meet the efficiency levels were purchased for efficiency reasons.

This is simply not fact. The fact is that one large transformer

manufacturer was able to produce distribution transformers at EL3 and

EL4 using M3 steel. To my knowledge, Wes did not state the price for

these transformers. In addition, just because one company can produce

this product doesn’t mean that all transformer manufacturers can make

this product at this level using M3 steel.

My hope is that we can all understand the facts and the analysis

results better over the next few weeks so that we can negotiate a

solution that benefits the consumers, the ratepayers, the manufacturers,

the environment, etc. I plan to stay at the table till the end of the

negotiation process.

Regards,

John

John F. Caskey, CEM

Assistant Vice President, Industry Operations

National Electrical Manufacturers Assoc. (NEMA)

1300 North 17th Street

‐ Suite 1752

Rosslyn, VA 22209

john.caskey@nema.org

703

‐ 841

‐ 3233 Voice

703

‐ 841

‐ 3333 FAX

703

‐ 350

‐ 6886 Cell

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

Sent: Monday, November 14, 2011 1:19 PM

To: Hirsch, Bruce R

Cc: 'Steve Nadel'; Robert Berman; Phil Hopkinson;

Eric.Petersen@aksteel.com; jerry.schoen@aksteel.com; Maxine (EMAB)

Savitz; mhyland@appanet.org;

Raymond.Polinski@ATImetals.com;maheshsampat@bellsouth.net;

tpetrosino@carolina.rr.com; dbrender@cda.copper.org;

James.Lass@cleco.com; chris.brown@cogentpowerinc.com;

frank.guilbault@cogentpowerinc.com;ted.johnstone@cogentpowerinc.com;

Aaron Meyers; Antonio Trujillo; Jack C Moore; Jerry L Corkran;

tballo@earthjustice.org; carlosgsiqueiros@eaton.com;

eduardorobles@eaton.com; Emily (CONTR) Marchetti; Jeremiah (CONTR)

Freeman; Jim Raba; John Cymbalsky; srosenstock@eei.org;

DYoung@energy

‐ solution.com; rick.anderson@faypwc.com;

bsmith@federalpacific.com; rgreeson@federalpacific.com;

carlos.gaytan@ge.com;artrosenfeld@gmail.com;

greg.coulter405@gmail.com; ned.efbrush@gmail.com; Richard Parker;

Paul.Ryan@hitmet.com; jhodge@howard.com; Daniel Cohen;

cabolduc@lbl.gov; gjrosenquist@lbl.gov;

kcoughlin@lbl.gov;ScottB@LVMetals.com; dave.millure@metglas.com;

kwinder@mleainc.com; jrossetti@mlgw.org; brian.coffey@navigant.com;

caitlin.johnson@navigant.com; matthew.nardotti@navigant.com;

mrivest@navigant.com;zhimei.luo@navigant.com; Creevy, Jim; Caskey,John; mwaltner@nrdc.org; rroy@nrdc.org; robert.saint@nreca.coop;

Teckman@nwcouncil.org; vijay.tendulkar@onyxpower.com;

gbf1@pge.com;chuck.simmons@pgnmail.com; ahofmann@publicpower.org;

pkumar@publicpower.org; adelaski@standardsASAP.org;

jmauer@standardsasap.org; wes.patterson@us.abb.com;

chad.kennedy@us.schneider

‐ electric.com;thomas.patzner@us.schneider

‐ electric.com;

charlied@uus.org

Subject: Re: Negotiated Rulemaking

‐ Distribution Transformers

Teleconference

Bruce,

Those upfront transformer costs are compared to the fuel cost savings

in the LCC approach. The discounting process values fuel cost saving in

the future at less than the costs incurred today. The positive LCC means

that that the efficiency advocates are not ignoring costs, but comparing

them with benefits and finding that the consumer is better off and will

be paying less. One does not, however, need to rely on the LBL analysis

to see this. The ABB sales data shows M3 transformers being delivered at

EL4 efficiency. As a modeler, I am always skeptical of model results

‐‐ people do not live in computers and certainly not on in some of the

back

‐ of

‐ the

‐ envelope calculations that we have seen from others. Market

sales data, however, is quite real. In this case it unambiguously says

that the transformers at EL4 are an economically reasonable choice

‐‐

the market has, in fact, selected that choice on multiple occasions.

To the extent that there are dug

‐ in positions, again the evidence does

not support that it is the efficiency advocates that are dug

‐ in.

Although EL4 is achievable and beneficial based both on market data and

LBL analyses, the proponents of greater efficiency indicated a

willingness to compromise. It is certain representatives of the

industry who have consistently said either no change, or a fractional

change. It is those industry representatives who appear to be advancing

the "my position or nothing" attitude. Although I happen to agree that

substantial movement towards more efficient distribution systems, I also

note that these are incredibly expensive meetings. We have a large

number of very senior people devoting substantial time to the meetings,

their preparation and non

‐ trivial travel costs. These people have other

things competing for their time. If you and others honestly believe that

you cannot agree to a higher standard, and place no value on regulatory

certainty, then let's not waste additional time and money. Let's just

say that we gave it a good shot, cut our losses here, and make our

respective cases to DOE outside the negotiation process and let DOE make

it's own decision. I believe that they certainly have sufficient

information to support their position in a February NOPR. I can't

imagine what else they would need.

Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.com

On Nov 14, 2011, at 11:49 AM, Hirsch, Bruce R wrote:

Steve,

I am disappointed with your approach to this assignment.

It appears that negotiation to you is defined as agreeing with your

position

‐‐‐ or calling it off. It is unfortunate that you believe the

American public, especially in these trying economic times, should be

expected to foot the (very large) bill for more efficient transformers

when it is still not certain that there is value in doing so. You have

clung to one suspect calculation that indicates there may be a payback

‐‐‐ in the distant future

‐‐‐ and only if all the assumptions being made

pan out. You choose to ignore the costs, not yet factored in, on US

jobs, US businesses and the reliability of supply of an item so

desperately needed for our economy to expand.

This is not a “cut and dried” economic decision but is one that

needs to be taken seriously for the major impact it could have on the

electric supply of the US and the financial position of the American

public. If DOE makes the final decision on this, I would expect them to

do “due diligence” in considering all the effects there decision

would have on US businesses and the US economy.

Let it be known that the Utility Industry has not pulled out of the

negotiation process and will continue to work with DOE to reach the

right decision.

Bruce.

From: Steve Nadel [mailto:snadel@aceee.org]

Sent: Friday, November 11, 2011 2:16 PM

To: Robert Berman; Phil Hopkinson

Cc: Eric.Petersen@aksteel.com; jerry.schoen@aksteel.com; Maxine (EMAB)

Savitz; mhyland@appanet.org; Raymond.Polinski@ATImetals.com;

maheshsampat@bellsouth.net; Hirsch, Bruce R;

tpetrosino@carolina.rr.com;dbrender@cda.copper.org;

James.Lass@cleco.com; chris.brown@cogentpowerinc.com;

frank.guilbault@cogentpowerinc.com; ted.johnstone@cogentpowerinc.com;

Aaron Meyers; Antonio Trujillo; Jack C Moore; Jerry L Corkran;

tballo@earthjustice.org; carlosgsiqueiros@eaton.com;

eduardorobles@eaton.com; Emily (CONTR) Marchetti; Jeremiah (CONTR)Freeman; Jim Raba; John Cymbalsky; srosenstock@eei.org;

DYoung@energy

‐ solution.com; rick.anderson@faypwc.com;

bsmith@federalpacific.com; rgreeson@federalpacific.com;

carlos.gaytan@ge.com; artrosenfeld@gmail.com;

greg.coulter405@gmail.com; ned.efbrush@gmail.com; Richard Parker;

Paul.Ryan@hitmet.com; jhodge@howard.com; Daniel Cohen;

cabolduc@lbl.gov; gjrosenquist@lbl.gov; kcoughlin@lbl.gov;

ScottB@LVMetals.com; dave.millure@metglas.com;

kwinder@mleainc.com;jrossetti@mlgw.org; brian.coffey@navigant.com;

caitlin.johnson@navigant.com; matthew.nardotti@navigant.com;

mrivest@navigant.com; zhimei.luo@navigant.com; Jim.creevy@nema.org;

john.caskey@nema.org;mwaltner@nrdc.org; rroy@nrdc.org;

robert.saint@nreca.coop; Teckman@nwcouncil.org;

vijay.tendulkar@onyxpower.com; gbf1@pge.com;

chuck.simmons@pgnmail.com;

ahofmann@publicpower.org;pkumar@publicpower.org;

adelaski@standardsASAP.org; jmauer@standardsasap.org;

wes.patterson@us.abb.com; chad.kennedy@us.schneider

‐ electric.com;

thomas.patzner@us.schneider

‐ electric.com; charlied@uus.org

Subject: RE: Negotiated Rulemaking

‐ Distribution Transformers

Teleconference

Phil,

We're in the middle of negotiations and some of us have made clear that

no or little change to the standard is not acceptable as the DOE

analysis justifies higher standards (higher levels are technically

feasible and cost

‐ effective on a life

‐ cycle cost basis). The efficiency

groups would rather leave the decision to DOE than agree to subpar

standards. If you and other participants want to veto any significant

change in the standard, then we might as well save some time, break off

negotiations and just make our respective arguments to DOE. Is that

what you want to do? If the answer is no, then let's start talking

about how to make higher standards acceptable rather than continue to

make arguments about why low standards are needed. We're all busy and

if we're going to make progress we need to break new ground and not

rehash old ground.

Steve

>>> Phil Hopkinson <phopkinson@hvolt.com> 11/11/2011 1:16 PM >>>

Hello Robert and all:

You must not have looked at Jerry Corkran’s message because he found

the cost to be $17/watt, which is pretty close to my number, where both

Jerry and I have used M3 core steel to derive the cost curve. The fact

is that the cost curve is very steep with M3 and quickly hits the brick

wall.

1. I have checked Carlos Gaytan’s cost curves as well and he

is finding about the same relationship with M3.

2. I have checked Wes Patterson’s data as well and he isfinding an M3 cost curve about the same as mine.

3. I have checked the OPS data with M3 as well and it too is

very close to $20/watt.

a. For example, for design line 1 they show an efficiency at 50%

load of 99.08% which translates to 232 watts of loss and sells for

$1,960.73.

b. They show another M3 design with an efficiency of 99.26% which

translates to 186 watts of loss and sells for $2962.11.

c. The change in selling price is $2,962.11

‐ $1,906.11 or

+$1,001.38

d. The change in watts is 232

‐ 186 or ‐ 46 watts.

e. The OPS $/watt is therefore, $1,001.38/46 watts or $21.77

f. Hence we see that all data sources are pointing to cost per

watt of ~$20 /watt saved to go from the current mandatory standard to

EL1. I get $30/watt to go to EL2 and $53/watt to go to EL3

4. The fact is that M3 is about out of gas and the DOE did a good

job in the last rule making.

5. The fact also is that a push to anything beyond present does

not show economic value and I do not support it.

6. The fact also is that a push to higher efficiencies will kill

the new transformer market and open up the rebuild market, destroying

jobs at the new transformer manufacturers and resulting in transformers

of lower efficiency which will cost energy and not save it.

Best regards,

Phil

Philip J Hopkinson, PE

President & CEO HVOLT Inc.

3704 High Ridge Rd.

Charlotte, NC 28270

phopkinson@hvolt.com

Ph 704

‐ 846

‐ 3290

Fx 704

‐ 845

‐ 2520

Cell 704

‐ 236

‐ 3320

www.hvolt.com

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

Sent: Friday, November 11, 2011 11:16 AM

To: Phil Hopkinson

Cc: Corkran, Jerry L; Richard Parker; Freeman, Jeremiah (CONTR);

rick.anderson@faypwc.com; tballo@earthjustice.org;

ScottB@LVMetals.com; john.caskey@nema.org; Cymbalsky, John;

adelaski@standardsASAP.org;Teckman@nwcouncil.org; gbf1@pge.com;

carlos.gaytan@ge.com; rgreeson@federalpacific.com;

bruce.r.hirsch@bge.com; jhodge@howard.com; mhyland@appanet.org;

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

Eric.Petersen@aksteel.com; Raymond.Polinski@ATImetals.com;

artrosenfeld@gmail.com; srosenstock@eei.org; rroy@nrdc.org;

robert.saint@nreca.coop;

chuck.simmons@pgnmail.com;kwinder@mleainc.com; mwaltner@nrdc.org;jerry.schoen@aksteel.com; Paul.Ryan@hitmet.com;

ahofmann@publicpower.org; pkumar@publicpower.org;

bsmith@federalpacific.com;

greg.coulter405@gmail.com;jmauer@standardsasap.org; Cohen, Daniel;

Meyers, Aaron; Jim.creevy@nema.org; jrossetti@mlgw.org;

cabolduc@lbl.gov; kcoughlin@lbl.gov; brian.coffey@navigant.com;

mrivest@navigant.com;

gjrosenquist@lbl.gov;caitlin.johnson@navigant.com;

zhimei.luo@navigant.com; Marchetti, Emily (CONTR); charlied@uus.org;

DYoung@energy

‐ solution.com; James.Lass@cleco.com;

maheshsampat@bellsouth.net;matthew.nardotti@navigant.com; Raba, Jim;

Savitz, Maxine (EMAB); tpetrosino@carolina.rr.com;

chris.brown@cogentpowerinc.com; ted.johnstone@cogentpowerinc.com;

frank.guilbault@cogentpowerinc.com;ned.efbrush@gmail.com;

dbrender@cda.copper.org; chad.kennedy@us.schneider

‐ electric.com;

eduardorobles@eaton.com; vijay.tendulkar@onyxpower.com;

thomas.patzner@us.schneider

‐ electric.com;carlosgsiqueiros@eaton.com;

Robert Berman; Trujillo, Antonio; Moore, Jack C

Subject: Re: Negotiated Rulemaking

‐ Distribution Transformers

Teleconference

Even if it were that high (and Mr. Hopkinson is the only one I've seen

who has put the number anywhere near that), the efficiency objective is

saving Watt

‐ hours (energy) not Watts (the capacity to save energy)

. One

Watt saved for 8,760 hours per year for 30 years is 262.8 kWh (not

counting leap years). Even at Mr. Hutchinson's $20, that's just over 7¢

/ kWh. If Mr. Hutchinson will examine his electric bill, as he has

reported, he will see that even as high as 7¢ it's a good buy, and that

assumes we put a ZERO value on any environmental benefits (which is why

DOE agreed to reconsider its 2007 MEPS in the first place.

Indeed, the cost of losses per Watt (roughly the A factors that OPS has

been using) are no where near the $20 claimed here. Moreover, as ABB and

others have pointed out, the proper approach would have been to minimize

cost subject to efficiency, not A & B, which would have resulted in a

lower, flatter curve to the asymptote. ABB's actual market data

‐‐ physical transformers produced and delivered

‐‐ shows a competitive

market for M3 transformers even at EL4 efficiency. You can make all the

hypothetical claims you want to, gentlemen, the market is the real

world.

Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.comOn Nov 10, 2011, at 6:53 PM, Phil Hopkinson wrote:

Well stated Jerry

That is also what my analysis and report said. If you restrict to M3

then the cost of EL1 rises to about $20/watt.

Phil

Phil Hopkinson,P.E.

HVolt Inc.

704

‐ 846

‐ 3290

F: 704

‐ 845

‐ 2520

C: 704

‐ 236

‐ 3320

phopkinson@hvolt.com

On Nov 10, 2011, at 18:04, "Corkran, Jerry L"

<Jerry.Corkran@CooperIndustries.com> wrote:

To Mr. Parker and the DOE working group,

The reason for the request for the incremental cost of the losses is

that the current DOE efficiency levels can be obtained if the design is

optimized at about $4 per core watt and $1 per winding watt at full

load. At the DOE 50% kVA rating, this is the same as evaluating the

losses or optimizing the design at about $4 per total watts loss.

The present DOE efficiency loss level results in transformer designs

about like many utilities were purchasing their transformers before

2007. The utilities were purchasing the efficiency levels that were

justified based on the cost of losses. A few utilities were purchasing

higher efficiency that the 2007 efficiency rules because of the

calculated cost of energy being higher than the $4/$1 loss evaluation.

What came up in the discussion last week was even for loss level 1, the

incremental cost of losses was about $17 per watt for the design

checked, between the present DOE losses an efficiency level of DEL1.

The added cost of $17 per watt is so much higher than the typical cost

of the energy for the utilities, that it is very questionable that the

DOE payback estimates are accurate. A 3% interest rate may be a factor

in the payback calculations.

Jerry Corkran

From: Richard Parker [mailto:richardparkerdc@gmail.com]

Sent: Thursday, November 10, 2011 3:23 PM

To: Robert BermanCc: Freeman, Jeremiah (CONTR); rick.anderson@faypwc.com;

tballo@earthjustice.org; ScottB@LVMetals.com; john.caskey@nema.org;

Corkran, Jerry L; Cymbalsky, John;

adelaski@standardsASAP.org;Teckman@nwcouncil.org; gbf1@pge.com;

carlos.gaytan@ge.com; rgreeson@federalpacific.com;

bruce.r.hirsch@bge.com; jhodge@howard.com; mhyland@appanet.org;

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

Eric.Petersen@aksteel.com; Raymond.Polinski@ATImetals.com;

artrosenfeld@gmail.com; srosenstock@eei.org; rroy@nrdc.org;

robert.saint@nreca.coop;chuck.simmons@pgnmail.com;

kwinder@mleainc.com; mwaltner@nrdc.org; jerry.schoen@aksteel.com;

Paul.Ryan@hitmet.com; ahofmann@publicpower.org;

pkumar@publicpower.org;bsmith@federalpacific.com;

greg.coulter405@gmail.com; jmauer@standardsasap.org; Cohen, Daniel;

Meyers, Aaron; Jim.creevy@nema.org; jrossetti@mlgw.org;

cabolduc@lbl.gov; kcoughlin@lbl.gov;brian.coffey@navigant.com;

mrivest@navigant.com; gjrosenquist@lbl.gov;

caitlin.johnson@navigant.com; zhimei.luo@navigant.com; Marchetti,

Emily (CONTR); charlied@uus.org; DYoung@energy

‐ solution.com;

James.Lass@cleco.com; maheshsampat@bellsouth.net;

phopkinson@hvolt.com; matthew.nardotti@navigant.com; Raba, Jim;

Savitz, Maxine (EMAB);

tpetrosino@carolina.rr.com;chris.brown@cogentpowerinc.com;

ted.johnstone@cogentpowerinc.com; frank.guilbault@cogentpowerinc.com;

ned.efbrush@gmail.com; dbrender@cda.copper.org;

chad.kennedy@us.schneider

‐ electric.com; eduardorobles@eaton.com;

vijay.tendulkar@onyxpower.com;

thomas.patzner@us.schneider

‐ electric.com; carlosgsiqueiros@eaton.com

Subject: Re: Negotiated Rulemaking

‐ Distribution Transformers

Teleconference

Robert,

I understand the DOE staff are working on the incremental Watts

calculations and will get that out to group as soon as it's ready.

best wishes,

Richard

On Thu, Nov 10, 2011 at 11:52 AM, Robert Berman

<bermaneconomics@gmail.com> wrote:

Thank you Richard. That clarification is helpful.

In the liquid

‐ filled meeting we were told that we would receive an

analysis of incremental Watts saved by DL for all ELs, as well as the

incremental cost. When will that analysis be available? For many of us,

that analysis is the basis for additional, perhaps extensive analyses,

so it should come with enough lead time before any additional meetings

or teleconferences to that we can give it the required consideration. It

would be most helpful if the incremental cost were provided separately

for transformer and installation, with any pole component of the

installation identified.For the MV Dry and LV Dry meetings, it would be most helpful if you

would also circulate an agenda with objectives, hopefully this week, so

that we are able to prepare for those meetings.

Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703

‐ 281

‐ 0490

703

‐ 655

‐ 8398 (cell)

BermanEconomics@gmail.com

On Nov 10, 2011, at 11:14 AM, Richard Parker wrote:

Dear Colleagues:

The telcon on the 17th is currently planned for medium

‐ voltage dry

‐ type

and the telcon on the 21st is reserved for low

‐ voltage. There will be

revised analysis circulated in advance of both calls per our discussion

yesterday. Each call has substantial chunks of time allocated, though

I hope we won't need all that time.

It may be prudent to schedule a liquid

‐ filled call at some point as

well, but I propose that we hold off on that for day or so, until we can

clarify when revised analysis for liquid

‐ filled will be ready.

Thanks for your very constructive participation in the meetings over

the last two days.

Richard Parker

On Thu, Nov 10, 2011 at 10:05 AM, Freeman, Jeremiah (CONTR)

<Jeremiah.Freeman@ee.doe.gov> wrote:

When: Thursday, November 17, 2011 1:00 PM

‐ 5:00 PM (GMT

‐ 05:00) Eastern

Time (US & Canada).

Where: Webinar and Phone

Note: The GMT offset above does not reflect daylight saving time

adjustments.

*~*~*~*~*~*~*~*~*~*

Dear Colleagues,

This event is to save the time slot on your calendar based on our

discussion at yesterday's meeting. Later today further information willbe sent regarding the registration information for our November 17 and

November 21 webinars. After registering you will get the link for the

webinar and a toll free number.

Please call with questions or concerns.

Very Respectfully,

Jeremiah Freeman

202

‐ 431

‐ 4243 (cell)

202

‐ 586

‐ 1867 (office)

>>> This e

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in this e

‐ mail in any way, delete this e

‐ mail and notify the sender.

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‐ IP2

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