1 | Building Technologies Programeere.energy.govThe Parker Ranch installation in HawaiiBuilding Technologies ProgramDistribution Transformers Negotiation ProceedingsBriefing to ERACDistribution Transformers UpdateDepartment of EnergyEnergy Efficiency & Renewable EnergyBuildings Technology ProgramAppliance StandardsProgramJanuary 12, 2012Presentation Overview•Purpose of Today’s Meeting•Appliance Standards Subcommittee Formation (A refresher)•Distribution Transformer Negotiated Rulemaking (The “Test Case”)•Negotiated Rulemaking Process & Outcomes•Seek Approval from ERAC Regarding Submitting to DOE consensusachieved2 | Building Technologies Programeere.energy.govPurpose of Today’s Meeting1.To understand the negotiated rulemaking process used bythe Appliance Standards Working Groups and DOE inregards to forming energy efficiency standards for distributiontransformers.2.To formally transmit the Working Groups’ results to EERE forits rulemaking efforts (to meet court ordered deadline ofNotice of Proposed Rule in Federal Register by February 1,2012).3 | Building Technologies Programeere.energy.govAppliance Standards Subcommittee•DOE’s Appliance Standards Program is responsible for settingappliance energy and environmental performance standards for adiverse range of products.•The Department has taken steps to improve its internal managementand efficiency of the rulemaking process. (DOE Announces Change tothe Energy Conservation Standards Process, November 16, 2010).1.Notice of Proposed Rule;2.Moving Analytical Information to a Technical Support Document;and3.Establish a Standing Negotiated Rulemaking CommitteeDetermined to form the Appliance Standards Subcommittee underERAC, as a pilot process, to providecritical input to streamline theappliance standards process, enablea team approach, and lead tobetter outcomes.4 | Building Technologies Programeere.energy.govThe Test Case - Background•Title III, Part C of the Energy Policy and ConservationAct of 1975 (EPCA) (PublicLaw 94-163) establishedthe “Energy Conservation Program for CertainIndustrial Equipment,” including distributiontransformers.•Energy Policy Act (EPACT) of 1992 (Public Law 102­486) directed DOE to establish energy conservationstandards for distribution transformers.•EPACT 2005 set standards for low-voltage dry-type(LVDT) distribution transformers at the NEMA TP 1­2002 level.5 | Building Technologies Programeere.energy.govThe Test Case – Background (cont.)•October 2007 – DOE issued a Final Rule establishing energyconservation standards for liquid-immersed and medium-voltage drytype (MVDT) distribution transformers. (72 FR 58190). DOE was suedon the 2007 Final Rule.•As a result of a settlement agreement in that lawsuit, DOE has anexpedited timeline to determine whether to amend standards for liquidimmersed and MVDT distribution transformers.•Originally, DOE was required to publish by October 1st, 2011 either:–A determination that the standards do not need to be amended, or–A Notice of Proposed Rulemaking (NOPR) including any proposedstandards.•Parties to the lawsuit agreed toextend NOPR timeline to February 1st,2012 to permit negotiated rulemaking activitiesunder the ApplianceStandards Subcommittee.•If DOE publishes a NOPR, it must publish a Final Rule by October 1,2012.6 | Building Technologies Programeere.energy.govWorking Group Formation•DOE received a number of nominations in response to the FederalRegister notices, and selected twenty-five members for the mediumvoltage working group and fifteen for the low-voltage working group.–Twelve were members of both groups.–Represented were manufacturers of distribution transformers andcomponent materials, consumers (chiefly electrical utilities),advocacy groups, umbrella organizations (e.g. National ElectricalManufacturers Association and National Rural Electric CooperativeAssociation), ERAC (Arthur Rosenfeld and Maxine Savitz), andBuilding Technologies (John Cymbalsky).•DOE held four meetings per committee between September 15thandDecember 2nd, with one conference call (per) scheduled in comingweeks.–The meetings were open to the public and several, nonvotinginterested parties attended and spoke at all meetings.7 | Building Technologies Programeere.energy.govTODAYDistribution TransformerNegotiated Rulemaking Process FlowAppliance StandardsSubcommittee• Formed (March 2011) toprovide critical input toDOE’s process of settingappliance energy andenvironmentalperformance standardsInitial Outreach to KeyStakeholders –DistributionTransformers• July 2011• Reach out to identify keystakeholders to provideupdate on recentdevelopments inrulemaking and discussnegotiated rulemakingprocessFormation of WorkingGroups• August 2011• Federal Register noticeof intent to form twoWorking Groups(requested nominations)• Member selectionWorking GroupDeliberations• September – December2011•4open meetingsperworking group (1 1⁄2 daymeetings)• Attempts at consensusWorking GroupResults Presented toSubcommittee• January 9, 2012• Discussion of processand outcomesDOE/SubcommitteePresent to fullCommittee• January 12, 2012• Discussion of processand outcomesFull CommitteeDiscussion andConsensus onProcess• January 12, 2012• Committee to assert (byconsensus vote) whethera competent negotiatedrulemaking process wasfollowedDOE Publish Notice ofProposed Rule• February 1, 2012• DOE publishes NOPRand continues withrulemaking actions*Orange boxes indicate times within the process that members of the public have/ will have chances to provide input.8 | Building Technologies Programeere.energy.gov-Distribution TransformerNegotiated Rulemaking ResultsSuperclassSuperclassfraction oftotalshipmentsEquipmentClassDesign Line (DL) DescriptionMvAshipped(2009)% of total shipmentsby MvAIndustry final offer(% loss reduction)Advocatesfinaldemand(% lossreduction)CumulativeSource SavingsBased onMemberPositions(quads 2016-2045)MediumVoltageLiquidImmersed69.0%11,2,3Medium-voltage, liquid-immersed single phase21,994 30.1%8.8% for DL 1; 0% forDL 2; 10.4 % for DL 3EL 3(bottomline of20%)0.18 to 1.4224,5Medium-voltage, liquid-immersed three phase28,372 38.9%8.8% for DL 4; 10.4%for DL 5EL 3(bottomline of 20%)Low VoltageDry-Type22.5%36Low-voltage dry typesingle-phase6470.9%Not discussed due tovery low volume ofshipments1.0 to 1.2547,8Low-voltage, dry-type,three-phase15,778 21.6%23% for DL 730% for DL 840%MediumVoltage DryType8.5%59*,10*Medium-voltage drytype single phase, lowBIL230.0%Agreement to scale offDL 12 in EC 80.13 (negotiated)69,10Medium-voltage drytype three phase, lowBIL2570.4%Agreement on scalingoff DL 12 in EC 8711*,12*Medium-voltage drytype single- phase,medium-BIL230.0%Agreement on scalingoff DL 12 in EC 8811,12Medium-voltage drytype three- phase,medium-BIL3,655 5.0%20 % (Consensusagreement)Agreement913*Medium-voltage drytype single- phase, highBIL90.0%Agreement to scale offDL 12 in EC 81013a, 13bMedium-voltage drytype three- phase, highBIL2,206 3.0%Agreement to scale offDL 12 in EC 8AgreementTotal72,964 100.0%9 | Building Technologies Programeere.energy.govERAC Approval on ProcessERAC must formally transmit the Working Groups’ results toEERE for its rulemaking efforts (to meet court ordered deadlineof Notice of Proposed Rule in Federal Register by February 1,2012).10 | Building Technologies Programeere.energy.govAdditional Slides11 | Building Technologies Programeere.energy.govNegotiation Background•At request of industry and advocacy groups, DOE announcednegotiation process on July 29th, 2011 with aNotice of Intent toNegotiate.•Decision made to form two negotiating groups, medium-voltage (“MV”)and low-voltage (“LV”) to reflect two different transformer markets,technologies, and interested parties.•DOE subsequently announced the creation of a LV working group in anAugust 12th, 2011 notice.12 | Building Technologies Programeere.energy.govCommittee Membership (MV)bolddenotes dual MV/LV membershipMemberAffiliationMemberAffiliationAnderson,RichardFayettevillePWCHodge,GeraldHowardIndustriesBallo,TimEarthjusticeHyland,MichaelAPPABeck,ScottLakeviewMetalsMillure,DavidMetglasCaskey,JohnNEMANadel,SteveACEEECorkran,JerryCooperPowerSystemsPatterson,WesABBCymbalsky,JohnDOEPetersen,EricAKSteelDeLaski,AndrewASAPPolinski,RayAlleghenyLudlumEckman,TomNWPowerandConservationCouncilRosenfeld,ArthurSavitz,MaxineERACFernstrom,GaryPG&ERosenstock,SteveEdisonElectricInstituteGaytan,CarlosGEProlecRoy,RobinNRDCGreeson,RobertFederalPacificSaint,RobertNRECAHirsch,BruceBaltimoreGasandElectricSimmons,ChuckProgressEnergy13 | Building Technologies Programeere.energy.govCommittee Membership (LV)bolddenotes dual MV/LV membershipMemberAffiliationMemberAffiliationBallo,TimothyEarthjusticeMillure,DavidMetglasBeck,ScottLakeviewMetalsNadel,SteveACEEECaskey,JohnNEMAPetersen,EricAKSteelCymbalsky,JohnDOERobles,EduardoEatonRosenfeld,ArthurDeLaski,AndrewASAPSavitz,MaxineERACFernstrom,GaryPG&ERoy,RobinNRDCGreeson,RobertFederalPacificTendulkar,VijayONYXPowerKennedy,ChadSchneider14 | Building Technologies Programeere.energy.govMarket Segments & Critical Issues•Transformer market has three broad market segments with differentmanufacturers, customers/applications, and technological concerns–Liquid-immersed medium voltage–Medium-voltage dry-type–Low-voltage dry-type•Critical Issues–Electrical steel availability and pricing–Design flexibility from multiple options of steel types–Space constraints–Capital investments15 | Building Technologies Programeere.energy.govSteel Availability - Amorphous•Amorphous steels offer radically lower core losses but havedrawbacks•Available in the United States solely through Metglas, a subsidiary ofthe Japanese Corporation Hitachi and participant in the negotiation–Chinese government producingfor internal consumption•Certain efficiency levels practically require the use of amorphoussteel and would confer considerable market power to Metglas•Questions of ability of a single source to supply high volumes ofamorphous in the short term•Fabrication of amorphous transformers requires investment inspecialized, high-volume equipment and would require transformermanufacturers to re-tool their core fabrication processes16 | Building Technologies Programeere.energy.govSteel Availability - Conventional•Compliance was required in 2010 for DOE’s 2007 standards for liquidimmersed and medium-voltage dry-type transformers•The 2007 standard targeted the limits of conventional materials whilestill maintaining a diversity of available steels•Conventional steel supply larger and more nimble than amorphoussupply–Two domestic producers (AK Steel and ATI Allegheny)–A number of others worldwide•High permeability, high performance conventional steels are offered byAK Steel and a handful of international producers, but not at volumesneeded to supply complete transformation to these steels17 | Building Technologies Programeere.energy.govSpace Constraints•Certain transformer applicationshave constraints on size and weight•Because size and weight rises with efficiency, these constraints couldlimit standards if separate equipment classes are not established•Examples of such applications are transformers mounted on woodenpoles and transformers mounted inunderground concrete vaults(typical in dense urban areas)•DOE is considering new classesfor space-constrained applications18 | Building Technologies Programeere.energy.govCapital Investments and Implications•Certain transformer manufacturingtechniques are only accessible withexpensive, high-volume equipment•Amorphous transformer core fabrication requires large upfrontinvestments•In general, smaller low-voltage dry-type manufacturers may not be ableto pursue advanced manufacturing techniques because large capitaloutlays are required.–Such companies may be able to outsource pre-fabricated coresfrom third parties, although doing somay sacrifice a degree of costcompetitiveness19 | Building Technologies Programeere.energy.govParties Negotiating•Consensus has been reached for MediumVoltage Dry-Type. Low VoltageDry-Type close•Negotiating parties broadly divided into five groups–Transformer Manufacturers (Federal Pacific, ABB, Prolec-GE)oThe diversity of capital structures and technology portfolios results insome manufacturers supporting higher standards than others–Electrical Steel ManufacturersoAK Steel is a full-line conventional producer; ATI Allegheny does notmake any high permeability (highest performance) conventionalsteelsoMetglas is the only amorphous producerserving United States market–Efficiency Advocacy Groups (ACEEE, ASAP, NRDC)–UtilitiesoDifferent cost and regulatory structures exist among utilitiesrepresented–Umbrella OrganizationsoNEMA (represents many manufacturers), EEI (represents manyutilities)20 | Building Technologies Programeere.energy.govStakeholder Positions•Parties agree in principle on the importance of maintaining a diversity ofsteel options and debate over where in each equipment class that pointlies•Liquid-Immersed–Conventional steel makers extremely concerned about harmingmarket for their products and support lower efficiency increases–Advocates seeking 19-26%reduction in energy losses–Negotiated Standard not likely21 | Building Technologies Programeere.energy.govStakeholder Positions (cont.)•Medium-Voltage Dry–Final agreement reached – an energyloss reduction of 21-31% forhigh-volume equipment classes and related reductions for smaller,specialized classes–ERAC needs to decide if this is agreeable to adopt in NOPR•Low-Voltage Dry–Standards set in the Energy Policy Act of 2005 at NEMA’s voluntaryTP-1 level; no DOE standards currently in effect.–There has been some movement in the negotiations toward astandard level corresponding to the NEMA voluntary program(“Premium”) representing a 30% reduction in losses22 | Building Technologies Programeere.energy.govSummary•3 distinct distribution transformer types included in this rulemaking•Liquid-immersed poses the area of most disagreement amongcommittee members•Medium-voltage dry type has consensus•Low-voltage close to consensus– major hurdle is impact on smallmanufacturers23 | Building Technologies Programeere.energy.govLiquid Immersed – Stakeholder PositionsDesign Line#BaselineEL 1EL 2EL 3EL 4EL 5EL 6Liquid-Immersed,50kVA, single-phaseDL1Liquid-Immersed,25kVA, single-phaseDL2Liquid-Immersed,500kVA, single-phaseDL3Liquid-Immersed,150kVA, three-phaseDL4Liquid-Immersed,1500kVA, three-phaseDL524 | Building Technologies Programeere.energy.govMedium Voltage Dry Type – StakeholderPositionsDesign Line#BaselineEL 1EL 2EL 3EL 4EL 5EL 6MVDT, 300kVA,three-phase, 95kV BILDL11MVDT, 1500kVA,three-phase, 95kV BILDL1225 | Building Technologies Programeere.energy.govLow Voltage Dry Type – StakeholderPositionsDesign Line#BaselineEL 1EL 2EL 3EL 4EL 5EL 6LVDT, 75kVA, threephaseDL7LVDT, 300kVA, threephaseDL81.Only DL7 and DL8 are shown because that is where the committee hasfocused its attention. For DL6 (notshown) , a low volume line, NEMAproposed baseline, while the Advocates have not stated a firm position.2.AK Steel Logo used to represent both steelmakers (AK and ATI).26 | Building Technologies Programeere.energy.gov