1 | Building Technologies Program 

Building Technologies Program 

Distribution Transformers Negotiation Proc

Briefing to ERAC

Distribution Transformers Update Department of Ene

Energy Efficiency Buildings TechnoloAppliance Standar

January 12, 2012 
Presentation Overview 

• Purpose of Today’s Meeting • Appliance Standards Subcommittee Formation (A refresh

• Distribution Transformer Negotiated Rulemaking (The “Te• Negotiated Rulemaking Process & Outcomes • Seek Approval from ERAC Regarding Submitting to DOE 

achieved 

2 | Building Technologies Program 
Purpose of Today’s Meeting 

1. To understand the negotiated rulemaking process u

the Appliance Standards Working Groups and DOE regards to forming energy efficiency standards for dtransformers. 

2. To formally transmit the Working Groups’ results to 

its rulemaking efforts (to meet court ordered deadlinNotice of Proposed Rule in Federal Register by Feb2012). 

3 | Building Technologies Program 
Appliance Standards Subcommittee 

• DOE’s Appliance Standards Program is responsible for settin

appliance energy and environmental performance standards diverse range of products. 

• The Department has taken steps to improve its internal man

and efficiency of the rulemaking process. (DOE Announces C

the Energy Conservation Standards Process, November 16, 

1. Notice of Proposed Rule; 

2. Moving Analytical Information to a Technical Support Do

and 

3. Establish a Standing Negotiated Rulemaking Committee 

Determined to form the Appliance Standards SubcommitteERAC, as a pilot process, to provide critical input to streamappliance standards process, enable a team approach, and better outcomes. 

4 | Building Technologies Program 
The Test Case - Background 

• Title III, Part C of the Energy Policy and Conservation 

Act of 1975 (EPCA) (Public Law 94-163) established 

the “Energy Conservation Program for Certain Industrial Equipment,” including distribution transformers. 

• Energy Policy Act (EPACT) of 1992 (Public Law 102­

486) directed DOE to establish energy conservation standards for distribution transformers. 

• EPACT 2005 set standards for low-voltage dry-type 

(LVDT) distribution transformers at the NEMA TP 1­2002 level. 

5 | Building Technologies Program 
The Test Case – Background (cont.) 

• October 2007 – DOE issued a Final Rule establishing energy 

conservation standards for liquid-immersed and medium-volttype (MVDT) distribution transformers. (72 FR 58190). DOE 

on the 2007 Final Rule. 

• As a result of a settlement agreement in that lawsuit, DOE ha

expedited timeline to determine whether to amend standards 

immersed and MVDT distribution transformers. 

• Originally, DOE was required to publish by October 1st, 2011 

– A determination that the standards do not need to be am– A Notice of Proposed Rulemaking (NOPR) including any 

standards. 

• Parties to the lawsuit agreed to extend NOPR timeline to Feb

2012 to permit negotiated rulemaking activities under the ApStandards Subcommittee. 

• If DOE publishes a NOPR, it must publish a Final Rule by Oc

2012. 

6 | Building Technologies Program 
Working Group Formation 

• DOE received a number of nominations in response to the Fe

Register notices, and selected twenty-five members for the mvoltage working group and fifteen for the low-voltage working 

– Twelve were members of both groups. – Represented were manufacturers of distribution transform

component materials, consumers (chiefly electrical utilitieadvocacy groups, umbrella organizations (e.g. National E

Manufacturers Association and National Rural Electric Co

Association), ERAC (Arthur Rosenfeld and Maxine SavitzBuilding Technologies (John Cymbalsky). 

• DOE held four meetings per committee between September 

December 2nd, with one conference call (per) scheduled in co

weeks. 

– The meetings were open to the public and several, nonvo

interested parties attended and spoke at all meetings. 

7 | Building Technologies Program 
TODAY 

Distribution Transformer Negotiated Rulemaking Process Flow 

Appliance Standards

Subcommittee 

• Formed (March 2011) to 

provide critical input toDOE’s process of setting appliance energy and environmental performance standards 

Initial Outreach to Key

Stakeholders – 

Distribution 

Transformers 

• July 2011 • Reach out to identify key 

stakeholders to provide update on recentdevelopments inrulemaking and discussnegotiated rulemaking process 

Formation of Working 

Groups 

• August 2011 • Federal Register notice 

of intent to form two Working Groups (requested nominations) 

• Member selection 

• Se

20

•4 o

wome

• Att

Working Group 

Results Presented to 

Subcommittee 

• January 9, 2012 • Discussion of process 

and outcomes 

DOE/Subcommittee 

Present to full 

Committee 

• January 12, 2012 • Discussion of process 

and outcomes 

Full Committee 

Discussion and 

Consensus on 

Process 

• January 12, 2012 • Committee to assert (by 

consensus vote) whether a competent negotiatedrulemaking process was followed 

DOE 

• Feb• DO

and rule

* Orange boxes indicate times within the process that members of the public have/ will have chances to provide input. 

8 | Building Technologies Program 
-

Distribution Transformer Negotiated Rulemaking Results 

Superclass 

Superclass 

fraction of 

total 

shipments 

Equipment 

Class Design Line (DL) Description 

MvA 

shipped 

(2009) 

% of total shipments 

by MvA 

Industry final offe

(% loss reduction

MediumVoltage LiquidImmersed 69.0% 

1 1,2,3 Medium-voltage, liquid- immersed single phase 21,994 30.1% 8.8% for DL 1; 0% fo

DL 2; 10.4 % for DL 

2 4,5 Medium-voltage, liquid- immersed three phase 28,372 38.9% 8.8% for DL 4; 10.4% for DL 5 

Low Voltage Dry-Type 22.5% 

3 6 Low-voltage dry type single-phase 647 0.9% Not discussed due to very low volume of shipments 4 7,8 Low-voltage, dry-type, three-phase 15,778 21.6% 23% for DL 7 30% for DL 8 

MediumVoltage DryType 8.5% 

5 9*,10* 

Medium-voltage drytype single phase, lowBIL 23 0.0% Agreement to scale o

DL 12 in EC 8 

6 9,10 

Medium-voltage drytype three phase, lowBIL 257 0.4% Agreement on scalin

off DL 12 in EC 8 

7 11*,12* 

Medium-voltage drytype single- phase, medium-BIL 

23 0.0% Agreement on scalin

off DL 12 in EC 8 

8 11,12 

Medium-voltage dry type three- phase, medium-BIL 

3,655 5.0% 20 % (Consensus agreement) 

9 13* 

Medium-voltage drytype single- phase, highBIL 9 0.0% Agreement to scale 

DL 12 in EC 8 

10 13a, 13b 

Medium-voltage drytype three- phase, highBIL 2,206 3.0% Agreement to scale 

DL 12 in EC 8 

Total 72,964 100.0% 

9 | Building Technologies Program 
ERAC Approval on Process 

ERAC must formally transmit the Working Groups’ resuEERE for its rulemaking efforts (to meet court ordered of Notice of Proposed Rule in Federal Register by Febr2012). 

10 | Building Technologies Program 
Additional Slides

11 | Building Technologies Program 
Negotiation Background 

• At request of industry and advocacy groups, DOE announce

negotiation process on July 29th, 2011 with a Notice of Intent 

Negotiate. 

• Decision made to form two negotiating groups, medium-volta

and low-voltage (“LV”) to reflect two different transformer matechnologies, and interested parties. 

• DOE subsequently announced the creation of a LV working g

August 12th, 2011 notice. 

12 | Building Technologies Program 
Committee Membership (MV) 

bold denotes dual MV/LV membership

Member Affiliation Member A

Anderson, Richard Fayetteville PWC Hodge, Gerald Howard 

Ballo, Tim Earthjustice Hyland, Michael APPA

Beck, Scott Lakeview Metals Millure, David Metglas

Caskey, John NEMA Nadel, Steve ACEEE

Corkran, Jerry Cooper Power Systems Patterson, Wes ABBCymbalsky, John DOE Petersen, Eric AK Steel

DeLaski, Andrew ASAP Polinski, Ray Alleghen

Eckman, Tom NWPower and Conservation Council Rosenfeld, Arthur Savitz, Maxine ERAC

Fernstrom, Gary PG&E Rosenstock, Steve Edison E

Gaytan, Carlos GE Prolec Roy, Robin NRDC

Greeson, Robert Federal Pacific Saint, Robert NRECA

Hirsch, Bruce Baltimore Gas and Electric Simmons, Chuck Progress 

13 | Building Technologies Program 
Committee Membership (LV) 

bold denotes dual MV/LV membership

Member Affiliation Member A

Ballo, Timothy Earthjustice Millure, David Metglas

Beck, Scott Lakeview Metals Nadel, Steve ACEEE

Caskey, John NEMA Petersen, Eric AK Steel

Cymbalsky, John DOE Robles, Eduardo Eaton

Rosenfeld, Arthur

DeLaski, Andrew ASAP Savitz, Maxine ERAC

Fernstrom, Gary PG&E Roy, Robin NRDC

Greeson, Robert Federal Pacific Tendulkar, Vijay ONYX Po

Kennedy, Chad Schneider

14 | Building Technologies Program 
Market Segments & Critical Issues 

• Transformer market has three broad market segments with d

manufacturers, customers/applications, and technological con

– 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 investments 

15 | Building Technologies Program 
Steel Availability - Amorphous 

• Amorphous steels offer radically lower core losses but hav

drawbacks 

• Available in the United States solely through Metglas, a su

the Japanese Corporation Hitachi and participant in the ne

– Chinese government producing for internal consumption 

• Certain efficiency levels practically require the use of amo

steel and would confer considerable market power to Metg

• Questions of ability of a single source to supply high volum

amorphous in the short term 

• Fabrication of amorphous transformers requires investmen

specialized, high-volume equipment and would require tramanufacturers to re-tool their core fabrication processes 

16 | Building Technologies Program 
Steel Availability - Conventional 

• Compliance was required in 2010 for DOE’s 2007 standards 

immersed and medium-voltage dry-type transformers 

• The 2007 standard targeted the limits of conventional materi

still maintaining a diversity of available steels 

• Conventional steel supply larger and more nimble than amor

supply 

– Two domestic producers (AK Steel and ATI Allegheny) – A number of others worldwide 

• High permeability, high performance conventional steels are 

AK Steel and a handful of international producers, but not at needed to supply complete transformation to these steels 

17 | Building Technologies Program 
Space Constraints 

• Certain transformer applications have constraints on size and 

• Because size and weight rises with efficiency, these constrain

limit standards if separate equipment classes are not establis

• Examples of such applications are transformers mounted on 

poles and transformers mounted in underground concrete va(typical in dense urban areas) 

• DOE is considering new classes for space-constrained applic

18 | Building Technologies Program 
Capital Investments and Implications 

• Certain transformer manufacturing techniques are only acces

expensive, high-volume equipment 

• Amorphous transformer core fabrication requires large upfron

investments 

• In general, smaller low-voltage dry-type manufacturers may n

to pursue advanced manufacturing techniques because large outlays are required. 

– Such companies may be able to outsource pre-fabricated 

from third parties, although doing so may sacrifice a degr

competitiveness 

19 | Building Technologies Program 
Parties Negotiating 

• Consensus has been reached for Medium Voltage Dry-Type. Lo

Dry-Type close 

• Negotiating parties broadly divided into five groups 

– Transformer Manufacturers (Federal Pacific, ABB, Prolec-G

o The diversity of capital structures and technology portfol

some manufacturers supporting higher standards than o

– Electrical Steel Manufacturers 

o AK Steel is a full-line conventional producer; ATI Alleghe

make any high permeability (highest performance) convesteels 

o Metglas is the only amorphous producer serving United 

– Efficiency Advocacy Groups (ACEEE, ASAP, NRDC) – Utilities 

o Different cost and regulatory structures exist among utilit

represented 

– Umbrella Organizations 

o NEMA (represents many manufacturers), EEI (represent

utilities) 

20 | Building Technologies Program 
Stakeholder Positions 

• Parties agree in principle on the importance of maintaining a 

steel options and debate over where in each equipment class lies 

• Liquid-Immersed 

– Conventional steel makers extremely concerned about ha

market for their products and support lower efficiency inc

– Advocates seeking 19-26% reduction in energy losses 

– Negotiated Standard not likely 

21 | Building Technologies Program 
Stakeholder Positions (cont.) 

• Medium-Voltage Dry 

– Final agreement reached – an energy loss reduction of 21

high-volume equipment classes and related reductions fospecialized classes 

– ERAC needs to decide if this is agreeable to adopt in NO

• Low-Voltage Dry 

– Standards set in the Energy Policy Act of 2005 at NEMA’s 

TP-1 level; no DOE standards currently in effect. 

– There has been some movement in the negotiations towa

standard level corresponding to the NEMA voluntary prog(“Premium”) representing a 30% reduction in losses 

22 | Building Technologies Program 
Summary 

• 3 distinct distribution transformer types included in this rulema• Liquid-immersed poses the area of most disagreement amon

committee members 

• Medium-voltage dry type has consensus • Low-voltage close to consensus – major hurdle is impact on s

manufacturers 

23 | Building Technologies Program 
Liquid Immersed – Stakeholder Positions 

Design Line # Baseline EL 1 EL 2 EL 3 EL 4 

Liquid-Immersed, 

50kVA, single-phase DL1 

Liquid-Immersed, 

25kVA, single-phase DL2 

Liquid-Immersed, 

500kVA, single-phase DL3 

Liquid-Immersed, 

150kVA, three-phase DL4 

Liquid-Immersed, 

1500kVA, three-phase DL5 

24 | Building Technologies Program 
Medium Voltage Dry Type – Stakeholder 

Positions 

Design Line # Baseline EL 1 EL 2 EL 3 EL 4 

MVDT, 300kVA, 

three-phase, 95kV BIL DL11 

MVDT, 1500kVA, 

three-phase, 95kV BIL DL12 

25 | Building Technologies Program 
Low Voltage Dry Type – Stakeholder 

Positions 

Design Line # Baseline EL 1 EL 2 EL 3 EL 4 

LVDT, 75kVA, threephase DL7 

LVDT, 300kVA, threephase DL8 

1. Only DL7 and DL8 are shown because that is where the committee has 

focused its attention. For DL6 (not shown) , a low volume line, NEMA proposed 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 Program