### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 1 DEPARTMENT OF ENERGY

ENERGY CONSERVATION STANDARD FRAMEWORK PUBLIC MEETING REFRIGERATED BEVERAGE VENDING MACHINES

U.S. Department of Energy 1000 Independence Avenue, S.W. Room 8E-089 Washington, D.C. 20585

Thursday, June 20, 2013 9:00 a.m.

Reported by: Christine Allen, Capital Reporting Company

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 2 1 A P P E A R A N C E S 2 FACILITATOR 3 Douglas Brookman, Public Solutions 4 5 PARTICIPANTS 6 Ari Altman, DOE, Office of the General Counsel 7 Steven Bouyelas 8 Satish Bapanapalli, PhD, Pacific Northwest National 9 Laboratory 10 Jim Collins, Automated Merchandising Systems, Inc. 11 (AMS) 12 Sean Gouw, Southern California Edison 13 James Jenkins 14 Christopher Lau 15 Erick Layseca-Flores, Wellington Drive Technologies 16 Charles Llenza, DOE, Project Manager 17 Emily Marchetti, DOE 18 Jim Mathis, Crane Merchandising Systems 19 Mike Mau, Royal Vendors 20 Mark Menzer, Intertek 21 Scott Morris, Pacific Northwest National Laboratory 22 Dipak Negandhi, Royal Vendors

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 3 1 A P P E A R A N C E S 2 Laura Nicholson 3 Elaina Present, Navigant 4 Patrick Powell, Underwriters Laboratories 5 Harvey Sachs, American Council For An 6 Energy Efficient Economy (ACEEE) 7 Susan Sieben, Wellington Drive Technologies 8 Meg Waltner 9 Collin Weber, Navigant 10 Linda Wilson, NYS Office of the Attorney General 11 Arshak Zakarian, Energy Solutions 12 Erick Zehr, Underwriters Laboratories 13 14 15 16 17 18 19 20 21 22

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 4 1 C O N T E N T S 2 Welcome - Douglas Brookman, Facilitator 5 3 Opening Remarks, Introductions, and Agenda 5 4 Review - Douglas Brookman 5 Rulemaking Process Overview - Charles Llenza 11 6 Authority and Definitions - Charles Llenza 20 7 Test Procedures and Test Metrics - Elaina 24 8 Present, Navigant Consulting, Inc. 9 Market and Technology Assessment and Screening 36 10 Analysis - Elaina Present 11 Engineering Analysis - Elaina Present 68 12 Markup and Energy Use Analysis - Scott Morris, 84 13 Pacific Northwest National Laboratory 14 Life-Cycle Cost and Payback Period Analysis - 96 15 Scott Morris 16 Shipments Analysis and National Impacts 111 17 Analysis - Scott Morris 18 Preliminary Manufacturer Impact Analysis - 121 19 Elaina Present 20 NOPR Analyses - Scott Morris 134 21 Other Issues and Comments - Douglas Brookman 145 22 Closing Remarks 147

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 5 1 P R O C E E D I N G S 2 MR. BROOKMAN: Good morning, everyone, and 3 welcome. This is -- are you all set, Christine? Are 4 you all set? This is the U.S. Department of Energy's 5 energy conservation standard framework public meeting, 6 refrigerated beverage vending machines. Today is 7 Thursday, June 20th, 2013, here in the Forrestal 8 Building in Washington, D.C. My name is Doug Brookman 9 from Public Solutions in Washington. 10 We are going to start off with welcoming 11 remarks from Charles Llenza. 12 MR. LLENZA: Welcome to the beverage vending 13 machine framework public meeting. And, on behalf of 14 the Department of Energy, I welcome you to the meeting, 15 all five of us plus the technical staff. And we hope 16 to have a good meeting today. And on behalf of my 17 boss, John Cymbalski, I also welcome you to the 18 Department. 19 MR. BROOKMAN: Thank you. 20 We will start off with introductions. Please 21 say your name and organizational affiliation. Start to 22 my immediate left. You can get used to turning the

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 6 1 microphone on and off. 2 MR. SACHS: Harvey Sachs, American Council 3 for an Energy Efficient Economy. 4 MR. BROOKMAN: Please? 5 MR. COLLINS: Jim Collins, Automated 6 Merchandising Systems. 7 MR. MATHIS: Jim Mathis with Crane 8 Merchandising Systems. 9 MR. MAU: Mike Mau, Royal Vendors. 10 MR. NEGANDHI: Dipak Negandhi, Royal Vendors. 11 MR. WEBER: Collin Weber, Navigant 12 Consulting. 13 MR. MORRIS: Scott Morris, Pacific Northwest 14 National Laboratory. 15 DR. BAPANAPALLI: Satish Bapanapalli, Pacific 16 Northwest National Laboratory. 17 MS. PRESENT: Elaina Present, Navigant 18 Consulting. 19 MR. BROOKMAN: And folks joining us online, 20 welcome. We're glad to have you joining us via the 21 web. How many do we have joining us, Emily? 22 MS. MARCHETTI: Four.

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 7 1 MR. BROOKMAN: Four? Okay. So light 2 attendance today. Maybe we will have more as we go 3 along. 4 Yes, Harvey? 5 MR. SACHS: Is there a chance that our 6 meeting might condense? 7 MR. BROOKMAN: As you know, we will be as 8 efficient and expeditious as we can. 9 MR. SACHS: I will try to be quiet and -- 10 MR. BROOKMAN: As a further inducement. I'll 11 try hard not to waste anyone's time here. 12 All of you received a packet of information 13 when you came in this morning. I am going to do a very 14 brief agenda review. You can see we have already done 15 the welcomes. Immediately following this agenda 16 review, there is an opportunity for anyone who wishes 17 to to make opening remarks, brief statements at the 18 outset about what matters to you. Following that, we 19 are going to have a rulemaking process overview and 20 then authority and definitions from Charles Llenza. We 21 will take a break midmorning, around about 10:30, 22 whenever the content in the meeting causes us to get to

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 8 1 it around about 10:30. In sequence, we will continue 2 test procedures and test metrics, following that market 3 and technology assessment and screening analysis, then 4 engineering analysis. We will break for lunch around 5 about 12:00 or 12:30 or so and, following that, markup 6 and energy use analysis, life-cycle cost, and payback 7 period analysis. We will take a break mid-afternoon 8 and then, quickly moving on, shipments analysis, and 9 national impacts analysis, preliminary manufacturer 10 impact analysis, NOPR analyses. And, then, finally, at 11 the end of the day today, whenever we get there, 12 whenever we are finished with this context, there is 13 another opportunity for public comment. Anybody who 14 wishes to make additional comments about issues that 15 haven't been fully covered, sufficiently covered, that 16 would be another time to do that. Okay? 17 And so yes? 18 MR. LLENZA: Can we introduce legal? 19 MR. BROOKMAN: Yes. Yes. Ari, please 20 introduce yourself. 21 MR. ALTMAN: Ari Altman from the General 22 Counsel's Office here.

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 9 1 MR. BROOKMAN: Thank you. 2 MR. LLENZA: Also, can we also get a reading 3 on who is on the web? 4 MR. BROOKMAN: Yes. Let's do that as soon as 5 Emily returns to her seat. 6 MR. LLENZA: Okay. 7 MR. BROOKMAN: So I would ask your 8 consideration as I have written up here on this chart. 9 If you would please speak one at a time? You are 10 already used to turning the microphones on and off. 11 Please say your name for the record each time you 12 speak. There will be a complete transcript of this 13 meeting made available. And we will describe where you 14 can find that. I will be cuing individuals by name to 15 speak. I also wish to encourage follow-on comments by 16 individual. Sometimes the back and forth is very 17 useful for the Department. Please keep the focus here. 18 Turn your machines on silent mode. And if you can keep 19 the focus here as well? Be precise. Share the air 20 time. And, webinar participants, if you would keep 21 your telephones on mute? And if you can raise your 22 hand, and our web mistress will cue me. And then we

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 10 1 will cue you to speak. And you ought to be able to be 2 heard via the a/v system here in the Forrestal 3 Building. 4 MS. MARCHETTI: Here's a list. 5 MR. BROOKMAN: And these individuals Emily 6 tells me have joined us via the web. Arshak Zakarian, 7 Linda Wilson, Patrick Powell, and Susan Sieben. 8 Are there questions here at the outset before 9 we begin? This gentleman just joined us. Do you want 10 to introduce yourself, please? Say your name for the 11 record. 12 MR. MENZER: My name is Mark Menzer. I'm 13 with Intertek Labs. 14 MR. BROOKMAN: Thank you very much. 15 So it's then to Charles Llenza. 16 MR. LLENZA: Okay. 17 MR. SACHS: Can anything be done about the 18 hum on the audio system? 19 COURT REPORTER: I think it's there. 20 MR. LLENZA: I think so, too. It sounds like 21 it's the a/c. 22 MR. BROOKMAN: It was worse earlier. It was

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 11 1 big feedback. 2 MR. SACHS: Always blame the air conditioner 3 people. 4 MS. MARCHETTI: Yes, it is the a/c. It's 5 above us. 6 MR. BROOKMAN: Okay. 7 MR. LLENZA: Okay. 8 MR. BROOKMAN: Charles Llenza? 9 MR. LLENZA: Okay. We have gone over the 10 agenda and a couple of the ground rules. So I will 11 start. The purpose of today's meeting, public meeting, 12 is to present DOE's analytical approaches to be used to 13 evaluate the energy conservation standards for the 14 beverage vending machine rulemaking. This process is 15 part of the process that we use to inform the 16 stakeholders and other parties, manufacturers, et 17 cetera, parties of interest, in terms of the rulemaking 18 process and also provides a forum for discussion in 19 terms of issues that may arise that we may have at this 20 point in time in terms of the equipment. And I 21 encourage all interested parties to please submit data, 22 information, written comments, et cetera, as we go

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 12 1 through this process. 2 You will see these little blue boxes, where 3 we have a request for information. And they're 4 structured in such a way that there is an item number. 5 And we'll make specific question. And throughout the 6 presentation, these issues will be highlighted. We are 7 very interested in having responses from all parties. 8 They're in the framework document, and they're all 9 pretty much codified. So if at any time you refer to 10 any of the questions, please use the numbering system. 11 Okay. So any instructions for submitting 12 comments, as you can see here, we have set up an 13 electronic email box. Please make sure you put the 14 docket number and/or the RIN number as a reference. 15 You can send things in via mail, although we don't 16 encourage that, to Ms. Brenda Edwards. And the address 17 in the information is there. You could send something 18 via courier. And we don't really take phone messages. 19 But any problems that you may have or any issues or 20 concerns or questions, please call. Feel free to call 21 Brenda at the number that is addressed here. 22 The comment period ends July 19, 2013.

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 13 1 That's important. It's a target date in order for us 2 to execute the rulemaking within the schedule. We have 3 limits. It's 45 days from the issuance of the framework 4 document, which has already been issued, June 4th, I 5 believe. 6 MR. BROOKMAN: Maybe you can pause right 7 there -- 8 MR. LLENZA: Okay. 9 MR. BROOKMAN: -- and, as we promised at the 10 outset, entertain opening remarks. Any summary 11 statements here at the outset, should there be any at 12 this point? 13 I see none. So proceed. 14 MR. LLENZA: Okay. So I'm going to talk 15 about a little bit of an overview on the rulemaking 16 process here. 17 The Energy Policy Conservation Act of 1975, 18 EPCA, as we refer to it, as amended, directs DOE to 19 prescribe energy conservation standards for these 20 particular types of equipment: beverage vending 21 machines. It also directs DOE to develop or amend 22 standards designed to achieve the maximum improved

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 14 1 energy efficiency that is technologically feasible and 2 economically justified. That's a very critical 3 statement because that's what we strive through 4 throughout the rulemaking process here. And we end up 5 in standards that are meeting those objectives. We do 6 this through the rulemaking process here at DOE and 7 through a schedule and the analyses. As we go through 8 the schedule, the analysis becomes more robust. It 9 also will be disclosed on the website and provided in 10 the Federal Register for the public record. 11 So under 42 U.S.C. 6295(m)(1), we have a 12 requirement that within six years to issue a final rule 13 establishing or amending standards. So basically what 14 this says is that we are required by law to reissue 15 standards on the beverage vending machines every six 16 years. So, basically, within that time frame, we will 17 go again through this rulemaking process and set new 18 standards if that is what we determine here at the 19 Department. 20 Okay. EPCA also directs the Department of 21 Energy to consider seven factors for analysis when 22 setting technologically feasible and economically

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 15 1 justified standards. So in the left-hand column, you 2 see the EPCA requirements. There are seven. And then 3 you see the corresponding DOE analysis that will set up 4 answering those seven requirements that EPCA 5 establishes. And the source of that is quoted on the 6 bottom of the table there. 7 Rulemaking process. The test procedure and 8 the standard rulemakings have specific timelines. In 9 the energy conservation standard, we usually follow 10 four steps. We have a framework document, a 11 preliminary analysis, NOPR, and final rule. Notice of 12 proposed rulemaking is the NOPR, by the way. 13 In the test procedure, you have two steps, 14 which you have a notice of proposed rulemaking and a 15 final rule. Now, these two processes, while separate, 16 still are integrated. And they are integrated 17 timeline-wise because since we are doing background 18 research and analyses for the energy conservation 19 standard, that is a good opportunity to amend the test 20 procedure standards in order to be able to execute the 21 energy conservation standard at the end of the time 22 frame.

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 16 1 In terms of process, the energy conservation 2 standard takes about three years. And the test 3 procedure, while it is a year and a half, that test 4 procedure can slide within the time frame of the energy 5 conservation standard timeline in order to accommodate 6 adjustments as we go through the process since it takes 7 three years. And there is a link at the bottom for 8 additional information on the rulemaking process if you 9 are interested. 10 Okay. So I am going to talk again about the 11 energy conservation standard process and just go 12 through the steps briefly. Today we are doing the 13 framework document. Basically, it provides an overview 14 of the rulemaking process. And it sets the ground 15 rules for everybody to understand what it is that the 16 Department is trying to do. It provides information 17 that we have available at this moment in time. It 18 invites for comments on the proposed approach on the 19 issues. And it was issued -- the framework was issued 20 on June 4th, 2013. 21 Okay. So the most important issue of the 22 framework document I think is we have a list of

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 17 1 questions. And I think that that is one of the things 2 that we encourage everybody, to go through the list of 3 questions. And if you have contributions to the 4 rulemaking process, to please provide us information or 5 comment, questions, or even your opinions in terms of 6 which direction the rulemaking should take in terms of 7 the technical analysis and/or standards. 8 Okay. So the next step in the process, which 9 will be the next six months to eight months, will be 10 the preliminary analysis. So after this meeting, we 11 will go back. And the teams will continue to do work. 12 We will have some information that was maybe released 13 at this time, but certainly by the time that the 14 comment period closes, we will go back and take all of 15 that information, go review our analysis, go review our 16 data, and then come back again with additional 17 recommendations, adjustments, et cetera, and more of 18 our analysis in terms of a preliminary analysis. And 19 we will have a meeting for that. 20 So the different analyses that you see listed 21 here are the ones that we start developing in more 22 detail. We will publish all of this stuff, information

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 18 1 on the website, on the web page that we have for this 2 rulemaking so that people have access to it. And that 3 information will be public, for public consumption. 4 In addition to that, any comments that are 5 made throughout this process would also be placed in 6 the docket. And the docket also will be available for 7 the public to look at, to see other people can compare 8 comments that are made or just people that are 9 interested in seeing what other parties say. 10 The next step would be putting together a 11 notice of proposed rulemaking. That's a draft rule if 12 you want to call it that. We will have received by 13 then hopefully a robust amount of comments and 14 responses to the preliminary analysis, TSD, which is 15 the technical support document. And at this point, we 16 will be proposing potential standards for consumer 17 manufacturers and also the impacts. And we will be 18 providing the analysis that supports that. We expect 19 to do that by the third quarter in 2015. 20 Okay. One of the things I want to make 21 comment to is that each one of these steps, preliminary 22 analysis and the NOPR, will have public meetings also

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 19 1 and a 60-day comment period. So there will be plenty 2 of time to provide input to the Department as we go 3 through the rulemaking process. And after the 60-day 4 comment period closes for the notice of proposed 5 rulemaking, which is the proposed rule, the Department 6 will go back, take the comments from all the 7 manufacturers and stakeholders and interested parties. 8 And we will finalize a rule. And we are expecting to 9 accomplish that in the third quarter of 10 2016. 11 So what does that look like? Here is a 12 little bit of a timeline to show how this process works 13 and the different planned meetings that we have. 14 Again, today is the framework, is the first public 15 meeting that we will have. And then we will issue a TP 16 NOPR. And then we will have a public meeting, which is 17 a test procedure NOPR. We will have a public meeting 18 on the test procedure NOPR. And then we will have a 19 preliminary analysis TSD and then followed by a public 20 meeting. We will take all of the information that we 21 have gathered. And we will finalize the test procedure 22 because without a test procedure, we can't necessarily

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 20 1 do an energy conservation standard. We have to have 2 all these test metrics for establishing that energy 3 conservation standard. And we will then go back and 4 provide a notice of proposed rulemaking, which is the 5 draft rule. We will have a public meeting. And then 6 at the end, we will issue a final rule. 7 And, as you can see, the compliance date, 8 which is the effective date that the standard becomes 9 effective, is three years after the publication of the 10 final rule. So one thing to keep in mind is that it 11 takes three years to get there and another three years 12 for the standard to become effective. So we're not 13 talking about an overnight process here. We're talking 14 about six years. It gives I think plenty of time for 15 everybody to get geared up for that new standard. 16 Okay. 17 We will talk a little bit about authority and 18 definitions in terms of what we have in place now in 19 terms of the rulemakings. Title III of EPCA sets forth 20 a variety of provisions designed to improve various 21 products and equipment. Of course, Title III also 22 establishes our energy conservation program here at the

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 21 1 Department of Energy. So as part of that, we are 2 allowed to prescribe standards for beverage vending 3 machines. That is our authority here based on the EPCA 4 standards. The background. DOE conducted a rulemaking 5 in 2006 for 2009. And we set standards in 2009 and a 6 final rule August 2009. 7 So, again, within the six years, it is what 8 they call a look back provision. We are supposed to 9 come up again and review those standards to make sure 10 that either they are sufficient or if there is other 11 energy to be gained, energy savings to be gained, from 12 these products. And this is all done under the EPCA 13 provisions again. 14 Test procedure authority and background. In 15 December of 2006 the test procedures were issued in an 16 en masse rule, which meant basically that we bundled 17 the test procedures with other test procedures that 18 were incorporated by reference, by law, that we had 19 available to start the rulemaking process here at the 20 Department. And there is a look back provision on the 21 test procedures, also that seven years. And so that 22 coincides with the rulemaking process for the energy

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 22 1 conservation standards and the look back provisions for 2 the energy conservation standard. So we are doing this 3 under EPCA and also under the authority of the look 4 back provisions for both the test procedure and the 5 energy conservation standard. 6 Okay. Definitions. The definition we used 7 for beverage bottled and canned beverage vending 8 machines comes out of EPCA. And the reference is here: 9 42 U.S.C. 6291(40). The definitions added in 10 CFR 10 431.292 in the 2009 BVM final rule were amended to 11 include bottled or canned beverage. And it means 12 beverage in a sealed container; Class A type of 13 equipment, which means refrigerated bottled or canned 14 beverage vending machines that are fully cooled and is 15 not a combination vending machine. Class B machines 16 means any refrigerated bottle or canned beverage 17 vending machine not considered to be Class A and is not 18 a combination vending machine. We determined that 19 there is a combination vending machine category, which 20 means refrigerated bottled and canned beverage vending 21 machines that also has non-refrigerated volumes for the 22 purpose of vending other non-sealed beverage vending

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 23 1 merchandise. So the volume means the refrigerated 2 volume -- and it is in cubic feet -- of the 3 refrigerated bottle or canned beverage vending machine 4 as measured by ANSI/AHAM HRF-1-2004. Okay. It is 5 pretty specific. And all of this is available either 6 through the website or in the rules specifically. 7 Okay. The coverage. We cover all of the 8 equipment that meets the definition. And that is 9 important to understand. If it doesn't fall within the 10 definition, it is not covered. And active standards 11 exist for Class A and Class B vending machines. The 12 effective date was August 31st, 2012. That was last 13 year. So the thing to remember, the 2009 BVM final 14 rule included a placeholder for reserving standards for 15 combination beverage vending machines. That means 16 basically that that does not have a standard currently. 17 And that's also important to know. 18 Okay. That pretty much covers my section. 19 So I am going to turn this over to my colleague, 20 Elaina. And she is going to talk about test procedure 21 and test metrics. 22 MS. PRESENT: Good morning. I am Elaina

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 24 1 Present with Navigant Consulting. And I am going over 2 the test procedure/test metrics. This is the section 3 where we will start getting into some of the DOE 4 requests for comment. 5 As was mentioned, the current DOE test 6 procedure for refrigerated beverage vending machines 7 was published in December 2006. ANSI/ASHRAE 32.1-2004 8 was adopted as the DOE test procedure, with a 9 modification to test equipment with dual nameplate 10 voltages at the lower of the two voltages only. 11 Additionally, section 5.2 of AHAM HRF-1-2004 was 12 referenced for measuring refrigerator volume. And the 13 metric for refrigerated beverage vending machines is 14 daily energy consumption, which is DEC from 15 32.1. 16 In the framework, DOE outlines seven BVM test 17 procedure updates, clarifications, or modifications 18 that it is considering. I have requests for comment on 19 all seven in a few slides. 20 The first of these potential changes is 21 updating the reference method of test. Since the 22 publication of the DOE test procedure, ANSI/ASHRAE

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 25 1 32.1-2010 was issued to supersede ANSI/ASHRAE 32.1- 2 2004. 3 The second of these is clarifying the next4 to- vend beverage temperature test condition with an 5 explicit instruction not to perform any time averaging 6 of temperature data as part of testing using the DOE 7 test procedure. 8 The third is regarding testing at a 90-degree 9 Fahrenheit ambient test condition. DOE is considering 10 elimination of the 90-degree Fahrenheit ambient test 11 condition from the DOE test procedure. 12 The fourth change to the BVM test procedure 13 that DOE is considering is the inclusion of lowest 14 application product temperature. This would 15 accommodate beverage vending machines that dispense 16 product at a temperature other than 36 degrees 17 Fahrenheit. 18 The fifth change under consideration is with 19 regards to product temperature measurements. DOE is 20 considering requiring beverage temperature measurements 21 other than in the next-to-vend position. These 22 additional measurements could assist in identifying the

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 26 1 product class of the equipment being tested. 2 The sixth modification that DOE is 3 considering is an expanded range of lighting and 4 control settings. The current DOE test procedures 5 requires operation with normal lighting and control 6 settings, using only those energy management controls 7 that are permanently operational and not capable of 8 being adjusted by a machine operator. There is no 9 specification for testing machines with permanently 10 operational controls that can be adjusted. DOE is 11 considering the addition of such a specification. 12 Finally, the seventh modification that DOE is 13 considering is the creation of a provision to measure 14 the impact of low-power modes of operation. This would 15 account for energy savings from controls, including 16 those that can be disabled. 17 Now we're getting into the first set of 18 requests for comment. I am going to go ahead and read 19 these aloud. "Item 1-1: DOE requests comment 20 regarding adoption of updated test procedure for the 21 beverage vending machines covered this rulemaking. 22 "Item 1-2: DOE requests comment on the

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 27 1 possible elimination of the requirement to test units 2 at 90 degrees Fahrenheit. 3 "Item 1-3: DOE requests comment regarding a 4 requirement of measurement of product temperature at 5 other than the next-to-vend positions. 6 "Item 1-4: DOE requests comment on the 7 current utilization of low-power modes in certification 8 testing." We are interested in whether "any current 9 models meet the requirements of the current test 10 procedure regarding energy management controls and 11 utilize a low-power mode during the test." 12 MR. BROOKMAN: If you could just pause there? 13 MS. PRESENT: Sure. 14 MR. BROOKMAN: Yes. So you see the requests 15 for comments there on slide 30. Let's just start with 16 those before we proceed to the next bunch. Comments on 17 these four? Harvey Sachs? 18 MR. SACHS: Harvey Sachs. With respect to 19 item 1-2, does DOE have any information, from surveys 20 or elsewhere, on the relative fraction of Class A 21 machines which are installed outdoors? My own down 22 home impression of beverage vendors is that they are

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 28 1 always facing south, just outside the entrance to the 2 service station. 3 MS. PRESENT: While that would probably be 4 useful for the rulemaking itself, the issue at hand 5 here is that currently certification is based entirely 6 on the test result at 75 degrees Fahrenheit, which 7 means that the 90-degree Fahrenheit test is required 8 but not used. If we were to require certification using 9 90 degrees Fahrenheit for, for example, machines that 10 are UL-listed for outdoor use, is that what you are 11 suggesting? 12 MR. SACHS: I am suggesting that I am not 13 particularly knowledgeable in this area, but it 14 certainly seems to me that, whether it is through UL or 15 otherwise, the differentiation of what in the HVAC side 16 would be called weatherized products, products designed 17 to operate outdoors, would be important for this class 18 of equipment. 19 Now, I don't know if that is a subclass of A 20 or something else, but whoever is at the other end of 21 the distribution chain putting this thing in place 22 certainly would seem to have a right to know whether it

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 29 1 is designed for that service. 2 MS. PRESENT: Thank you. 3 MR. BROOKMAN: Charles Llenza? 4 MR. LLENZA: Yes. And we would welcome any 5 additional information that people at the meeting and 6 on the webinar or stakeholders in general may have on 7 this particular topic. I think we just don't have a 8 lot of detailed information in terms of that. I mean, 9 that would probably come better from the manufacturers 10 or people that sell these machines; right? 11 MR. BROOKMAN: Any additional comments? Yes, 12 Jim? 13 MR. MATHIS: Jim Mathis with Crane 14 Merchandising Systems. What we would look to -- and I 15 am certainly not trying to speak for the other 16 manufacturers, but we would look to NAMA to provide 17 that information from an industry perspective as to 18 what volume of Class A machines versus Class B machines 19 are used in a possible outdoor application. Speaking 20 for Crane Merchandising Systems, we currently do not 21 produce a Class A machine that is for use outdoors. 22 All of our equipment that classifies as a Class A piece

### Capital Reporting Company

Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 30 1 of equipment is for indoor use only. 2 MR. BROOKMAN: Thank you. 3 MR. SACHS: This is Harvey. Thank you, Jim. 4 MR. BROOKMAN: Is NAMA represented here 5 today? 6 No. Okay. 7 MR. MATHIS: Jim Mathis, Crane. Eric Dell 8 was going to participate. He let us know earlier in 9 the week that his wife was expecting any day -- 10 MR. BROOKMAN: Okay. 11 MR. MATHIS: -- and that he may or may not be 12 here. 13 MR. BROOKMAN: Okay. Well, sometimes an 14 individual manufacturer can speak on behalf of the 15 association. That's the reason I was asking. Okay. 16 Thank you. 17 Well, let's keep going. Any additional 18 comments on 1-1 through 1-4 before we move on? Yes? 19 MR. NEGANDHI: Dipak Negandhi at Royal 20 Vendors. One general comment I would like to make, some 21 of these comments that any rulemaking change to the 22 test procedure should be within the confines of the

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 31 1 ASHRAE standards, because then that is a standard that 2 has been established based on a consensus process. I 3 mean, when rules are made that are outside the standard 4 that are not specified in the standard, it becomes very 5 confusing because the test methods vary so much. 6 MR. BROOKMAN: Okay. Thank you. Okay. 7 We'll move on. 8 MS. PRESENT: Okay. 9 MR. BROOKMAN: Harvey Sachs? We won't move 10 on. 11 MS. PRESENT: Whenever you are ready. 12 MR. SACHS: Harvey Sachs. I have a question, 13 really, just for the manufacturers. The non-covered 14 products are those which mix refrigerated and non15 refrigerated vending. And our groups would be 16 concerned about the possibility of this being used as a 17 loophole that I had a stack of nominally non18 refrigerated and call it a non-classified. And that is 19 not even insulated from the rest of the machine. So it 20 winds up being cooled. So the question I am asking is, 21 is there a need for additional temperature measurements 22 or some other provision to prevent the non-regulated

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 32 1 mixed units from becoming a huge loophole through which 2 an unscrupulous manufacturer might market products that 3 do not conform? 4 MS. PRESENT: Shall I go back to the 5 definition slide while we have this discussion? 6 MR. BROOKMAN: Sounds good. 7 MR. SACHS: So I'm sorry. Combination 8 vending machine is clearly what I am talking about. 9 MR. WEBER: This is Collin Weber from 10 Navigant. I just want to clarify your point. They are 11 not considered non-covered products. They are products 12 for which standards were reserved. And as we get later 13 into today's meeting, I think it will be quite clear 14 that those are in the potential for standards being 15 applied to this rulemaking. 16 MR. BROOKMAN: Okay. 17 MR. SACHS: Thank you, Collin. How does that 18 impact the test method? 19 MR. WEBER: How does that impact -- 20 MR. SACHS: Is that going to be discussed 21 also? 22 MR. WEBER: Certainly open for discussion.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 33 1 MR. SACHS: Thank you. 2 MR. LLENZA: It's open. This is Charles 3 Llenza, the Department of Energy. We won't get into 4 great detail, but obviously that will be part of our 5 test methodology proposal because we don't currently 6 have good, established test methodologies for that type 7 of equipment right now. So that is important to keep 8 in mind. We may not be able to solve it today, but we 9 certainly appreciate lots of comments on that from the 10 manufacturers, by the way -- that would be great -- and 11 the stakeholders, of course. 12 MR. BROOKMAN: Mike? 13 MS. PRESENT: Oh, sorry. 14 MR. MAU: This is Mike Mau from Royal 15 Vendors. This combination vending machine, that's not 16 at all anything that we as a manufacturer produce. So, 17 you know, I don't know about anyone else here, but 18 that's got to be pretty unique, I think, in terms of 19 what is out there. 20 MR. BROOKMAN: Okay. Thank you. 21 So let's move ahead. 22 MS. PRESENT: Okay. This is the second set

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 34 1 of comments under test procedure and test metrics. We 2 have "Item 1-5: DOE requests comment on the testing of 3 low- power modes in a revised test procedure. What are 4 the typical functions of low-power mode in beverage 5 vending machines? Are these low-power modes triggered 6 by scheduled timers, activity, motion sensors, or other 7 environment or state changes? What lengths of time 8 should DOE consider for the full-power mode and low9 power mode?" 10 We have "Item 1-6: DOE requests comment on 11 the applicability of the current test procedure, and 12 all test procedure modifications under consideration, 13 to combination vending machines." 14 And "Item 1-7: DOE requests comment on its 15 proposal to consider modifications to the test 16 procedure to account for energy management systems." 17 MR. BROOKMAN: Harvey Sachs? 18 MR. SACHS: Harvey Sachs. Just a 19 clarification on 1-7. Do you mean energy management 20 systems that are part of the beverage vendor or are you 21 referring to interconnection with building energy 22 management systems or both?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 35 1 MS. PRESENT: So we can only test the 2 equipment as it is sold or shipped. So this would be 3 when -- in the case energy management controls are 4 integrated into the equipment, that would be what we 5 are discussing. 6 MR. SACHS: Thank you. 7 MR. BROOKMAN: Comments, especially on 1-5 to 8 start, lengths of time DOE should consider for full9 power mode or low-power mode? Thoughts on that? 10 And 1-6? Just scan through the questions 11 there and see if we can get any responses. 12 Okay. I see no additional comments. 13 MS. PRESENT: All right. If you do have 14 comments later on on these items, we can certainly come 15 back. 16 MR. BROOKMAN: Yes. 17 MS. PRESENT: At this point, we are going to 18 move into the rulemaking analyses, beginning with the 19 content of the preliminary analysis, which, as Charlie 20 mentioned, is the next step in this process. We will 21 go through each chapter. And I will start with the 22 market and technology assessment.

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 36 1 The purpose of the market and technology 2 assessment is to characterize the BVM market and the 3 measures available to improve efficiency. The method 4 that DOE uses is to identify and characterize 5 manufacturers of beverage vending machines, estimate 6 shipments and trends in the market, identify 7 technologies that could improve efficiency, and 8 identify regulatory and non-regulatory initiatives 9 intended to improve the efficiency of the equipment 10 covered under this rulemaking. 11 Market and technology assessment has quite a 12 lot of requests for comments. So here is the first 13 slide of them. "Item 3-1: DOE seeks information that 14 would contribute to the market assessment; for example, 15 the manufacturers of this equipment in the United 16 States and the equipment they sell, by equipment class. 17 It is particularly important that DOE be aware of the 18 major and the small or niche manufacturers. 19 "Item 3-2: DOE seeks information on 20 historical annual equipment shipments, both domestic 21 and imports, by equipment class and the corresponding 22 efficiency distributions of these" systems.

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 37 1 "Item 3-3: DOE seeks information on the 2 proportion of equipment shipped annually that replaces 3 existing equipment for each equipment class." 4 MR. BROOKMAN: So it may be that NAMA would 5 be the one that would respond to that kind of a 6 question. Do you know from your association with NAMA, 7 do they collect that kind of data, Jim? 8 MR. MATHIS: Jim Mathis with Crane. NAMA 9 carries that information annually. They would 10 definitely be the clearinghouse for this and any 11 additional information that they did not have because 12 we are limited within the industry related to the 13 number of manufacturers that participate in the 14 program. Crane would feel more comfortable using NAMA 15 as a clearinghouse -- 16 MR. BROOKMAN: Sure. 17 MR. MATHIS: -- related to the data. 18 MR. BROOKMAN: Sure. Are there a bunch of 19 manufacturers that don't belong to NAMA? 20 MR. MATHIS: Typically, there are a few. The 21 majority of them that are represented within this 22 portion of our industry that build beverage vending

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 38 1 machines are represented. 2 MR. BROOKMAN: I see. Okay. Good. That's 3 good to know. So, once again, the comment period will 4 be relevant here. And the Department would really very 5 much like to elicit the participation of NAMA and the 6 member companies to get that data in. 7 Okay. So we're going to move on. 8 MS. PRESENT: All right. Equipment 9 characteristics that the DOE has recognized of beverage 10 vending machines include the cooling mechanism, whether 11 the machine is fully cooled or not; the door type, 12 whether it's transparent or opaque; the storage type, 13 whether it's stack or shelf storage; the machine-use 14 designation, which would be the UL-categorized 15 indoor/outdoor or indoor only; the presence of a 16 separate, non-refrigerated volume; and the type of 17 products dispensed. 18 "Item 3-4: DOE requests comment on whether 19 all transparent-front beverage vending machines 20 currently available on the market are fully cooled. 21 "Item 3-5: DOE requests comment on whether 22 all opaque-front beverage vending machines currently

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 39 1 available on the market are zone-cooled. 2 "Item 3-6: DOE requests information on 3 perishable items in beverage vending machines. Do 4 machines that sell perishable items, in addition to or 5 including beverages, ship with different software or 6 controls than machines that sell only non-perishable 7 items? Are they rated differently, such as to food 8 safety specifications? What portion of the BVM market 9 is composed of machines that sell perishable items?" 10 MR. BROOKMAN: So a lot of data potentially 11 there. 12 Dipak? 13 MR. NEGANDHI: Dipak Negandhi, Royal Vendors. 14 The units that are manufactured by Royal Vendors follow 15 categories 3 and 4. Really, there's not a question. 16 Essentially, yes. That's the answer. 17 MS. PRESENT: You're saying all opaque fronts 18 are zone-cooled? 19 MR. NEGANDHI: Right, are zone-cooled -- 20 MS. PRESENT: And all -- 21 MR. NEGANDHI: -- that we manufacture; right. 22 MS. PRESENT: Right. And all --

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 40 1 MR. NEGANDHI: Glass fronts are fully cooled. 2 MS. PRESENT: Okay. 3 MR. BROOKMAN: Thank you. 4 MR. NEGANDHI: It has been the industry norm 5 and -- 6 MR. BROOKMAN: Dipak, maybe you could move 7 that microphone a little closer to you. Thank you. 8 MR. NEGANDHI: That has been the industry 9 norm for some time. 10 MR. BROOKMAN: Okay. 11 MR. NEGANDHI: So that is the current 12 classification of Class A and Class B that DOE follows. 13 And that is how it has been established, I guess. 14 MR. BROOKMAN: Okay. And can you comment on 15 3-6? Do you know? Are there different -- 16 MR. NEGANDHI: 3-6, we are not involved in 17 that type of market's products. So we cannot comment 18 on that. 19 MR. BROOKMAN: Okay. Thank you. Jim? 20 MR. COLLINS: Jim Collins, AMS. On 3-4, the 21 answer is many front, transparent-front, machines are 22 combination machines. So they have non-refrigerated

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 41 1 zones and refrigerated zones. So that's kind of a 2 split bag from our industry. 3 Item 3-6, from the food side, yes, if you are 4 vending perishable foods, you need other control 5 software to protect the safety of the food, although in 6 this case if you are reducing your energy, it just ends 7 up being, you know, out-of-service conditions when the 8 food becomes unsafe. And typically of these systems 9 with high efficiency, it is very difficult to pull down 10 a load of food from a higher temperature in time as 11 specified. So it becomes more of a nuisance for the 12 operators when they do so. So they certainly want to 13 have high energy- consuming machines in order to get 14 that pull-down time where they need it to be. 15 MS. PRESENT: I'm going to ask a follow-up 16 question. DOE is aware that there are vending machines 17 that sell things such as, for instance, milk that would 18 be considered perishable. Do these meet different 19 codes or standard requirements in order to vend 20 perishable items? 21 MR. COLLINS: Yes. The basics of the law are 22 established by the FDA. And they are enforced through

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 42 1 our NAMA committee that publishes rules and inspect the 2 manufacturers on an annual basis to be sure that those 3 rules are being followed to ensure food safety. 4 Certainly, yes, milk is a beverage and milk is a food. 5 So we're in the middle on that one. 6 MR. BROOKMAN: Okay. 7 MS. PRESENT: Is there a particular test 8 standard? 9 MR. COLLINS: The standard is written, again, 10 in cooperation with members of the food safety 11 community around the country, actually. And the 12 standard is written and maintained by NAMA. 13 MS. PRESENT: Okay. Thank you. 14 MR. WEBER: This is Collin Weber from 15 Navigant. Just a follow-on. You don't have to meet NSF 16 7 or anything like that? 17 MR. COLLINS: I'm not familiar with NSF 7. 18 It may be part of the standard, but I am not sure. 19 MR. WEBER: Okay. That would be the food 20 safety standard, for example, about refrigerated 21 display merchandise. So I didn't know if there was 22 overlap to vending as well.

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 43 1 MR. NEGANDHI: Dipak Negandhi, Royal Vendors. 2 MR. BROOKMAN: Excuse me. Dipak? Go ahead. 3 MR. NEGANDHI: Dipak Negandhi at Royal 4 Vendors. Jim, there is a NAMA standard for vending 5 equipment and refrigerated equipment. And there is 6 also an NSF standard, 7, for refrigerated 7 merchandisers. And there is an NSF standard also for 8 vending machines in general, not beverage but just 9 vending machines, which is different than the NSF 7. I 10 don't recall the number of the vending machine 11 standard. 12 MR. BROOKMAN: Okay. And Jim? 13 MR. MATHIS: Jim Mathis with Crane. The 14 standard that Jim Collins is referring to is the 15 standard for the sanitary design and construction of 16 beverage vending machines. And, to his point, it is 17 something that NAMA has developed and has represented 18 is from. The FDA participates as well as other 19 organizations throughout the industry and throughout 20 the country as well. And that is the standard that the 21 majority of the vending industry focuses on when we are 22 looking to design a machine that is going to vend

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 44 1 perishable or food items. It does pull from NSF as well 2 as other standards. 3 MS. PRESENT: Thank you very much. That was 4 very helpful. 5 MR. BROOKMAN: Do you have follow-on 6 questions or is that it? 7 MS. PRESENT: I think I'm good. Collin, do 8 you have anything else you want to ask? 9 MR. BROOKMAN: Okay. Great. Thanks very 10 much. 11 MR. SACHS: I have one. 12 MR. BROOKMAN: Harvey? 13 MR. SACHS: Harvey Sachs with a follow-on. 14 What I am hearing is that the issue is that you need a 15 much larger refrigeration system for pull-down than for 16 maintaining temperatures in the unit. And the question 17 is whether either the DOE has authority or it would be 18 wise to treat separately machines which might 19 inherently be more capable of energy-efficient 20 operation by using, for example, variable, variable21 speed compressors so you get both the rapid pull-down 22 and the efficiency associated with part load operation

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 45 1 with the larger heat exchangers. And the question, 2 again, is whether there is either authority or 3 interest. It would seem that that might have some 4 benefits for the regulated industry in allowing some 5 innovation and saving some energy. 6 MR. BROOKMAN: Thank you. 7 Comments from industry? Jim? 8 MR. COLLINS: We had experience with 9 variable- speed compressors and actually produced and 10 shipped several of them until they went obsolete. The 11 general problem that we have in this industry is that 12 our refrigeration capacity, the size of our compressor 13 system, is so small and the volume shipments are so 14 small that the manufacturers of those products are 15 really not interested. 16 MR. BROOKMAN: Thank you. 17 Let's move on. 18 MS. PRESENT: All right. We're on to DOE 19 equipment classes. I don't have the definitions up 20 here, which maybe I should have, but -- well, I'll go 21 ahead. "DOE divides covered equipment into classes 22 based on performance-related features that justify

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 46 1 different standard levels, such as features affecting 2 consumer utility. DOE establishes separate energy 3 conservation standards for each equipment class. For 4 BVMs, the equipment classes were established in the 5 2009 final rule," where DOE established three equipment 6 classes, which are, as we have said, the Class A, Class 7 B, and the combination vending machine. "As part of 8 this rulemaking, DOE could further subdivide existing 9 classes were it warranted due to inherent differences 10 within equipment currently covered by a class. 11 "Equipment class distinctions set in the 2009 12 BVM final rule were based on cooling 13 mechanism, meaning whether a unit is fully cooled or 14 not, and the presence of a separate, non-refrigerated 15 volume. However, fully cooled has no statutory 16 definition. DOE is considering the following 17 definition: fully-cooled beverage vending machine: a 18 refrigerated bottled or canned beverage vending machine 19 within which each item in the beverage vending machine 20 is brought to and stored at temperatures that fall 21 within plus or minus 2 degrees Fahrenheit of the 22 average beverage temperature, which is the average of

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 47 1 the temperatures of all items in the next-to-be-vended 2 position for each selection. 3 "Item 3-7: DOE seeks comment on the 4 equipment classes for beverage vending machines, and on 5 the criteria used in creating the classes. Are the 6 equipment classes appropriate? Are there other factors 7 that should be considered in equipment class 8 distinctions and definitions?" 9 And "Item 3-8: DOE seeks comment regarding 10 the possible use of alternative equipment classes in 11 this rulemaking. Specifically, are there other 12 equipment characteristics that should be considered for 13 equipment class distinctions and definitions?" 14 I'm going to go ahead and read 3-9 and 3-10 15 as well. 16 "Item 3-9: DOE seeks comment on the 17 considered definition of fully cooled vending machine. 18 Does the current language reflect what is used in 19 industry? 20 And "Item 3-10: DOE requests comment on the 21 creation of a new equipment class for machines that are 22 manufactured and sold to vend perishable items,

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 48 1 including or in addition to beverages. How should DOE 2 define equipment sold to vend perishable items? Does 3 this equipment," as we have discussed, "obtain other 4 certifications for vending perishable items? Is it 5 common for beverage vending machines to vend both 6 perishable and non-perishable items? Is the same 7 beverage vending machine offered to vend both 8 perishable and non- perishable items," as in "the 9 equipment is not currently differentiated" in "the 10 marketplace?" So we have got four requests for 11 comment. 12 MR. BROOKMAN: Okay. Let's start with 3-7 13 and 3-8, criteria creating classes, are the equipment 14 classes appropriate, and other factors that should be 15 considered. Mike? 16 MR. MAU: As for the classes, it is 17 acceptable for Royal Vendors. 18 MR. BROOKMAN: The existing classes? Okay. 19 MR. MAU: Yes. 20 MR. BROOKMAN: Additional comments on this 21 point? 22 MR. SACHS: Yes.

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 49 1 MR. BROOKMAN: Harvey? 2 MR. SACHS: Harvey Sachs. With respect to 3 item 3-9, the question, "Does the current language 4 reflect what is used in industry?" I just want to 5 commend the Department. I haven't seen that kind of 6 language in prior rulemakings, but I may have missed 7 it, the effort to align DOE's product classifications 8 with the way the terms are used in the industry. My 9 hat is off. 10 MR. BROOKMAN: Thank you. 11 MS. PRESENT: So, following on that, if 12 someone could tell us if that is what is used in the 13 industry? 14 MR. NEGANDHI: Dipak Negandhi, Royal Vendors. 15 Yes, Elaina, it is used because that is -- again, this 16 all rolls back to the ASHRAE standard, the way ASHRAE 17 32 defines Class A and Class B as fully cooled versus 18 zone. 19 MR. MAU: Well, they are saying everything 20 plus or minus two degrees. 21 MR. NEGANDHI: Do you mean the average 22 temperatures? Is that what you're --

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 50 1 MS. PRESENT: So we are interested in all 2 parts of the definition. 3 MR. NEGANDHI: Right. But, in general, 4 that's what -- 5 MR. BROOKMAN: Dipak, do you have your 6 microphone on? 7 MR. NEGANDHI: Yes. 8 MR. BROOKMAN: Okay. Good. 9 MR. NEGANDHI: It's on. So the plus or two, 10 that is the detailed definition. That portion is not 11 in the ASHRAE standard. 12 MS. PRESENT: Right. 13 MR. NEGANDHI: But as far as how it is 14 defined as Class A versus Class B is part of the ASHRAE 15 standards. 16 MS. PRESENT: Right. DOE is interested in 17 finding a line where we can determine if you are on one 18 side, it's Class A and the other, it's Class B. 19 MR. NEGANDHI: Again, I think that DOE should 20 stay within established and approved standards for 21 definition purposes, rather than trying to define new 22 standards and classifications.

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 51 1 MS. PRESENT: Okay. Thank you. 2 MR. BROOKMAN: Of course, DOE is interested 3 if the machines out there are morphing, they want to be 4 able to -- right? 5 MR. NEGANDHI: I agree, yes. If the machines 6 are changing, then it should be right. 7 MR. BROOKMAN: Yes. 8 MR. NEGANDHI: As far as Royal Vendors is 9 concerned, what we manufacture and what we offer our 10 customers are within these classifications. 11 MR. BROOKMAN: Collin, do you want to follow 12 on? 13 Okay. Jim? 14 MR. COLLINS: Jim Collins, AMS. I would just 15 say that, you know, the definition as it stands is 16 probably all right until you get into the technical 17 part. And that, plus or minus two degrees, that is not 18 what is used in industry. I don't know which item 19 number this comment is really directed at, but plus or 20 minus two degrees, very, very difficult to do that. 21 And I know our machines do not do that today. And I 22 don't know if it can be economically feasible to do

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 52 1 that. That's a very tight range. 2 MR. BROOKMAN: What's a sensible, practical 3 range? 4 MR. COLLINS: Maybe plus and minus six. 5 MR. BROOKMAN: Oh. 6 MS. PRESENT: That's something we would 7 definitely be interested in hearing, what you think a 8 reasonable range is. And if you can include that in 9 the written comments as well, that would be very 10 helpful. 11 MR. BROOKMAN: Harvey Sachs? 12 MR. SACHS: Harvey Sachs. A couple of 13 comments. My experience with the ASHRAE standards 14 process is mostly on the HVAC side. And there, there 15 has been a firm line that ASHRAE was doing the method 16 of test and the AHRI was doing the test conditions. So 17 that ASHRAE standards in my experience rarely would set 18 things like the precision or the test temperature. And 19 so it may just be a cultural thing, particularly the 36 20 degrees. 21 With respect to the temperature band, I would 22 ask a question that is an amplification of your item.

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 53 1 And that is, in the ASRAC working group, on certain 2 commercial products, there has been an acceptance of a 3 shift from a two-sided band to a one-sided band. Would 4 that be helpful to the industry, that as far as the 5 government is concerned, if it is 36 or lower, you guys 6 have an implicit lower bound of not wanting it to 7 freeze. Would an approach like that be helpful? 8 MR. BROOKMAN: Dipak? 9 MR. NEGANDHI: Dipak Negandhi. Yes, 10 certainly. That would broaden the allowable ranges. 11 The thing is, going to a tighter or a time-based 12 averaging, when you do that, it does not necessarily 13 reduce your energy compressor run time. It could very 14 well. So what the current method does is provides the 15 plus/minus one degree. That is adequate. But, having 16 a broader range to say, "not to exceed" temperatures, 17 which is more practical, it would allow for more design 18 freedom for the purpose of manufacturing the equipment. 19 MR. BROOKMAN: Charles Llenza? 20 MR. LLENZA: This is Charles Llenza. I think 21 we would be very interested in the opinions of the 22 experts here that work with these machines in terms of

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 54 1 efficiency ratios based on those tolerances also 2 because part of the problem is we try to set standards 3 that save us energy. So the greater the tolerance, the 4 less we are going to lose some of that. So we could 5 theoretically set a higher standard, but, you know, 6 that is not necessarily what we want to do. We want to 7 do something that is more practical and that makes 8 sense with what is available outside, out in the 9 industry. I suppose that if you had an opinion of the 10 ratios or any relationships in terms of testing, in 11 terms of the actual energy savings, relations, that 12 would be of interest to the Department. 13 MR. BROOKMAN: Collin, do you have a follow14 on? 15 MR. WEBER: Yes. This is Collin Weber from 16 Navigant. I just want to take this opportunity because 17 it seemed like a couple of issues were brought up. And 18 it's fair given the fact that there are a number of 19 requests for comments. But I wanted to clarify a 20 couple of things. 21 Jim, Jim Collins, if you could clarify your 22 statement and, you know, just taking away any temporal

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 55 1 variation, just assuming that we know the absolute 2 temperatures within a machine and that's just a 3 function of geometry? Aside from this within two 4 degrees that was suggested in the slides here by the 5 Department, what do you think? You mentioned six, and 6 I would just like to confirm that for a fully cooled, 7 coveredglass-front machine where everything is cooled 8 to the temperature at which it could be vended or 9 approaches by the consumer, you would say that from 10 bottom selection to top selection, six would be a valid 11 range? 12 MR. COLLINS: This is Jim Collins, AMS. I 13 don't want to state an exact number, but if you wanted 14 a typical remark, I think six is probably a viable 15 number based on our machines. And, frankly, it is the 16 top that is the coldest and the bottom that is the 17 warmest. And near the refrigeration output is colder 18 than farther away. So there is a lot of gradient 19 across a machine. The test method today, the ASHRAE 20 test, allows you to average those next-to-vend numbers 21 to come out with the 36 degrees. And that we can 22 handle, but to say that each of those next-to-vend is

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 56 1 within plus or minus, that is difficult. And I also 2 question whether that type of a statement belongs in an 3 equipment definition. That is more of a test 4 procedure, isn't it? 5 MR. BROOKMAN: Okay. Thank you. 6 Yes, Jim? 7 MR. MATHIS: Jim Mathis with Crane 8 Merchandising Systems. The one thing I would like to 9 bring up and remind the Department to consider is the 10 main purchasers of these machines and the operators of 11 this equipment are not here today. And they typically 12 provide us with quality standards and product metrics 13 and product scope design requirements that we as 14 manufacturers drive to obtain. That standard and those 15 requests based on product acceptance on their behalf is 16 what drives a lot of what our products do at the end of 17 the day. So, with regards to temperature bandwidths 18 within the machines, those types of things, Coca-Cola 19 and PepsiCo as the main operators within the industry 20 provide a lot of input towards that, that design. 21 MR. WEBER: Collin Weber with Navigant. So, 22 just back to Jim, so as it's stated here, fully cooled

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 57 1 currently has no statutory definition. So things are, 2 you know, wide open. DOE wants to clarify that. DOE 3 wants to make that, you know, more quantitative. So 4 would a definition based on an average of next-to-vend 5 in the case of a fully cooled machine across the entire 6 face be more acceptable than a temperature band? 7 MR. BROOKMAN: Jim? 8 MR. COLLINS: Yes. 9 MR. WEBER: Thank you. 10 MR. BROOKMAN: Thank you. 11 Okay. Anything else you want to pursue? 12 MS. PRESENT: I think I am good to move on. 13 MR. BROOKMAN: Okay. 14 MS. PRESENT: All right. Another part of the 15 market and technology assessment is to identify the 16 technology options to improve efficiency. Here we have 17 listed the technology options that are listed in the 18 framework document. This is a very wide range. And we 19 won't be using all of these, but we wanted to make sure 20 nothing escaped the net. I am going to come back and 21 put these up again after I have read the request for 22 comment in this section.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 58 1 "Item 3-11: DOE requests comment on whether 2 any technologies or designs should be added to or 3 removed from the above list. For example, do any of 4 the technologies above raise issues with proprietary 5 designs or issues where testing pursuant to the DOE 6 test procedure does not reflect a change in measured 7 energy efficiency? 8 "Item 3-12: DOE requests comments, 9 recommendations, and data on max-tech levels for Class 10 A equipment, Class B equipment, and combination vending 11 machines. 12 "Item 3-13: DOE requests comment on whether 13 max-tech levels can only be achieved using proprietary 14 designs or whether there are alternative design paths 15 available that can achieve the same energy use level. 16 "Item 3-14: DOE requests comment on whether 17 any technologies or designs should be treated 18 individually, or be incorporated into a few standard 19 'design packages.' If 'design packages' are possible, 20 how should the packages be assembled? DOE would 21 develop potential standard levels based on these 22 packages, but manufacturers could meet any established

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 59 1 standards through the use of any design options. 2 "Item 3-15: DOE requests comment on low3 power modes. What types of low-power modes are 4 currently used in the BVM market? Are there other 5 types of energy management systems about which DOE 6 should be aware that are applicable to beverage vending 7 machines? 8 And "Item 3-16: DOE requests comment on 9 whether transparent-front machines could be designed 10 with zone cooling." 11 MR. BROOKMAN: Yes, Mike? 12 MR. MAU: Mike, Royal Vendors. I have 13 trouble understanding item 3-14. I don't really 14 understand the design packages. Is DOE saying that if 15 we use really high efficient glass pack and a variable16 speed compressor, then we would have a different level 17 of standard that the vending machines would have to 18 meet. 19 MS. PRESENT: Okay. Go ahead. 20 MR. WEBER: This is Collin Weber with 21 Navigant. What we're asking here, it's nothing to do 22 with the regulatory side. It's the engineering side.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 60 1 We're asking if there are things that have synergistic 2 effects. For example, a variable-speed compressor, you 3 know, might warrant variable-speed fan motors. And 4 those would work better together than if you have a 5 variable-speed compressor but couldn't vary the 6 condenser fan speed. So that's the kind of thing we're 7 asking, is on the engineering side, if there are 8 synergistic things that are always packaged together. 9 MR. MAU: Thank you. 10 MR. BROOKMAN: Let's start with 3-11 through 11 3- 13. Harvey Sachs? 12 MR. SACHS: I said I would try to be quiet. 13 MR. BROOKMAN: It's okay. 14 MR. SACHS: Harvey Sachs, ACEEE. With 15 respect to item 3-11, to us, one critical question is 16 the universe which you are sampling to see what 17 technologies are out there. I am very much taken with 18 Jim's comment from Automated Measuring that compressor 19 sourcing for small variable-speed compressors has been 20 a challenge. I think it is obligatory for DOE to do a 21 little bit of a survey to find out what is in use in 22 comparable capacity products globally. This is now a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 61 1 global market, compressor side. I can't say the 2 beverage vendor side is. But across these 3 technologies, to us, it is a key question, what is used 4 internationally and can be soured for domestic 5 products. Thank you. 6 MR. BROOKMAN: Okay. Thank you. 7 3-11 through 3-13? And if you could -- good 8 job. That's the slide I want. Yes. 9 MS. PRESENT: Once in a while. 10 MR. BROOKMAN: If you could take a peek at 11 the screen and also, then, look down in your handout to 12 slide 43 and look at these possible technologies? 13 MR. LLENZA: This is Charles Llenza. I just 14 also wanted to make comments. I mean, if there is 15 anything else to add to that list, please also feel 16 free to make comment to that nature. 17 MR. SACHS: Just a note that we certainly are 18 seeing ECM-type, permanent magnet-type fan motors down 19 to the sizes used for the heat exchangers in 20 residential refrigerators, at relatively competitive 21 prices according to one of the manufacturers. 22 MR. BROOKMAN: Thank you.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 62 1 So if there is no comment on 3-11, how about 2 3- 12, "max-tech levels for Class A and B equipment and 3 combination"? 4 Then, moving on to 3-13, "Max-tech levels can 5 only be achieved using proprietary designs." It would 6 be useful to know early on if proprietary designs were 7 getting in the way of stopping manufacturers from 8 adopting certain options. 9 Yes, Mike? 10 MR. MAU: Mike, Royal Vendors. Something to 11 keep in mind -- and it was mentioned before -- is the 12 customers. There are only a couple. You know, there 13 are not a lot. So when it comes to max-tech levels, it 14 is kind of driven by them. You know, it's -- and then 15 to 3- 13 for can they only be achieved with proprietary 16 designs, well, there are a lot of things that aren't 17 proprietary, like foam wall thickness and efficient 18 compressors, glass packs, you know, actual things that 19 are purchased on the market or manufactured. So I 20 would say that it is not proprietary only. 21 MR. BROOKMAN: Ari? 22 MR. ALTMAN: Hi. This is Ari Altman from GC.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 63 1 Would you then say that on that list -- it's a pretty 2 long list on slide 42. Would you say any of these must 3 be proprietary, are only proprietary, or are all of 4 those items potentially sourced on the market? 5 MR. MAU: Give me a minute. 6 MR. WEBER: Collin Weber, Navigant. I think 7 one thing that also might clarify, we traditionally -- 8 in slides like this, we always use the word 9 "proprietary." But I think what we really mean is 10 protected intellectual property or patented that you 11 could not all go out and obtain and things were really 12 getting -- 13 MR. BROOKMAN: Thanks for that clarification. 14 Yes? Go ahead, Harvey. Here. 15 MR. SACHS: This is Harvey again. I think 16 there is a nuance there for this industry, which buys 17 so many of its components outside, as many others do. 18 The question is not whether it is proprietary motor 19 from Regal Beloit or whoever or proprietary compressor 20 but the level at which there is a competitive market, 21 even though the individual components might be 22 protected, in one way or another, by IP. So if there

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 64 1 are multiple compressor manufacturers who are equipped 2 to source their own proprietary solutions at a 3 particular efficiency level, my understanding is that 4 that is important to DOE, not the fact that the basic 5 compressor or motor has some intellectual property 6 around it. 7 Collin is shaking his head yes. Thank you. 8 MR. MAU: I don't recall your name. I'm 9 sorry. 10 MR. ALTMAN: Yes. Ari Altman from GC. 11 MR. MAU: To answer your question, I can't. 12 I can't go through. Without further review, I am 13 unable to make a generalized comment of if they are all 14 one way or another. 15 MR. ALTMAN: Okay. Thank you. 16 MR. BROOKMAN: Thanks. 17 Let's move on to item 3-14 through 16, design 18 packages, low-power modes, and transparent-front 19 machines designed with zone cooling. No comments at 20 this time? 21 Okay. 22 MS. PRESENT: All right. I'll move on, then.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 65 1 The market and technology assessment includes the 2 identification of baseline models. These represent 3 equipment with the lowest efficiency that's currently 4 available on the market. DOE selects one baseline 5 model per equipment class and, where available, 6 typically selects models that just meet current energy 7 conservation standards. 8 The request for comment, "Item 3-17: DOE 9 seeks comment on how to select baseline efficiency 10 levels for equipment classes without a previous energy 11 conservation standard; for example, combination 12 machines. 13 "Item 3-18: What machine sizes and 14 capacities," in "cubic feet" or "vendible capacity, 15 should be used as analysis points for each equipment 16 class?" I have another question on that later. 17 "Item 3-19: DOE seeks information on what 18 particular components and features characterize the 19 baseline model in each equipment class." And there are 20 some examples of features. 21 MR. BROOKMAN: No comments here? 22 I guess not.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 66 1 MS. PRESENT: All right. The next analysis 2 that 3 I will be covering is the screening analysis. 4 In the screening analysis, DOE will take the technology 5 options that are identified in the market and 6 technology assessment and screen them using the four 7 following criteria: technological feasibility; 8 practicability to manufacture, install, and service; 9 impacts on product utility or impacts to consumers; and 10 impacts on health and safety. The remaining technology 11 options are referred to as design options and are then 12 fed into the engineering analysis. 13 Request for comment, "Item 4-1: DOE welcomes 14 comment on how the above four screening criteria might 15 apply to any additional technology options that an 16 interested party recommends to DOE. 17 "Item 4-2: DOE welcomes comments on the 18 applicability of the four screening criteria to the 19 technologies listed in the market and technology 20 assessment section." 21 MR. BROOKMAN: Mike? 22 MR. MAU: For 4-2, for the market and

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 67 1 technology assessment, it will be complex when you do 2 that. You need to keep in mind the different 3 refrigerants that are coming to market between 4 (inaudible), CO2, and their different technology levels 5 available in those markets. 6 MR. BROOKMAN: Okay. Thank you. Additional 7 thoughts on these two? 8 MS. PRESENT: All right. And that was the 9 screening analysis. Now -- 10 MR. SACHS: I'm slow off -- 11 MR. BROOKMAN: Harvey Sachs. Yes? 12 MR. SACHS: Harvey. One of the things in the 13 screening analysis should be to survey what 14 refrigerants are in commercial use in other markets. 15 Are hydrocarbons being used? And are the quantities 16 allowed under the recent SNAP quantities, which would 17 be within the range of requirements for beverage 18 vendors? So that kind of question seems to be an 19 important one for regulations that will come into place 20 in six years and last for a long time. 21 MR. BROOKMAN: Thank you. 22 On to preliminary analysis?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 68 1 MR. MAU: This is Mike Mau, Royal Vendors. 2 That SNAP ruling I do not believe applies to beverage 3 vending machine. 4 MR. SACHS: I certainly defer to you on that. 5 On the other hand, it does represent a precedent for 6 indoor installations; for example, domestic 7 refrigerators. And I think it is starting to be 8 thought about in some other commercial classes as well. 9 So it seems to be an important part of the baseline is 10 what EPA considers to be acceptable in terms of its 11 safety and other characteristics. Thanks for the 12 clarification. 13 MS. PRESENT: All right. The market and 14 technology assessment and screening analysis both feed 15 into the engineering analysis. The purpose of the 16 engineering analysis is to characterize the 17 relationship between manufacturer selling price and 18 improvements in energy efficiency. The outcome will be 19 cost-efficiency curves for each equipment class similar 20 to the ones seem on the left there, though do make a 21 note that this is a stylized version that is not based 22 on any data. It is just to show what the trend would

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 69 1 look like. 2 These cost-efficiency curves are then used in 3 downstream analyses, like the LCC and payback period 4 analysis, the national impact analysis, the 5 manufacturer impact analysis, and the employment impact 6 analysis. 7 This slide outlines the methodology of the 8 engineering analysis. Starting from the baseline units 9 identified in the market and technology assessment, DOE 10 defines baseline specifications for each equipment 11 class. Both the manufacturer production cost, or MPC, 12 and energy consumption of the baseline units are 13 modeled. The manufacturer production cost is evaluated 14 from sources including public information, such as 15 manufacturer and component manufacturer catalogues, 16 equipment teardowns, manufacturer interviews, and 17 internal research. The energy consumption modeling I 18 will explain a little bit more about on the next slide. 19 Once the baselines are modeled, design options are 20 implemented one by one in the order of shortest payback 21 to longest payback. Both the MPC and energy use models 22 are rerun as the design options are implemented.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 70 1 Finally, a manufacturer markup is applied to the MPC to 2 calculate manufacturer selling price. 3 Here is a diagram of the components of our 4 energy consumption model. The model we use is a first 5 principles analytical model simulated under the 6 conditions of the DOE test procedure. There are two 7 types of energy consumption in a BVM: a compressor 8 energy consumption due to the heat load and component 9 energy consumption from components, including lights 10 and fan motors. As I mentioned, we used this model for 11 the baseline and then substitute energy-saving 12 components to simulate increasingly efficient models up 13 to max-tech. 14 "Item 5-1: Within each equipment class, for 15 energy consumption levels below the baseline, DOE seeks 16 information on daily energy consumption and on 17 incremental manufacturing costs and components. 18 "Item 5-2: DOE is also interested in any 19 equipment test data that stakeholders can provide, 20 including equipment parameters, test results, and in 21 the case that a test procedure other than the DOE test 22 procedure was used, the test procedures used, and

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 71 1 rating conditions. Test data for the baseline model in 2 each equipment class is particularly important. 3 "Item 5-3: DOE requests feedback on the use 4 of the design option approach to determine the 5 relationship between manufacturer selling price and 6 energy efficiency for beverage vending machines." 7 MR. BROOKMAN: Harvey Sachs? 8 MR. SACHS: Harvey Sachs. For about a 9 decade, ACEEE and others have challenged the simplistic 10 cartoon in slide 51. This is a static picture, not a 11 dynamic picture, and repeatedly, almost without 12 exception, our group has published on this. The 13 dynamics are that the adoption of a standard leads to 14 improvements in design, in sourcing, in component 15 availability, and other factors that lead to decreases 16 in energy consumption, rather than at constant cost. 17 If DOE is to apply a static model in this proceeding, 18 it is incumbent upon DOE to show why it is valid here 19 when that would be an exception to the trend that DOE 20 has accepted. One example of a way it might be 21 appropriate is if this market is so small that it has 22 no leverage at all on the suppliers of its key

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 72 1 components if these are not assembled, rather than 2 being mass-produced. Frankly, it is of concern that 3 DOE's conceptual model continues to be framed on this 4 cartoon without accounting for any of the dynamic 5 effects that have been documented so often. End of 6 rant. 7 MS. PRESENT: Thank you. 8 MR. BROOKMAN: Okay. Thank you. 9 MS. PRESENT: Okay. 10 MR. WEBER: This is -- 11 MR. BROOKMAN: We have a request for 12 comments. Yes, Collin? 13 MR. WEBER: May I make one response to 14 Harvey, just from a very general perspective? This is 15 actually going back to one of the very first slides. I 16 just want to point out that some of the dynamic effects 17 and market- shifting effects that you had mentioned 18 would be captured in the fact that DOE is compelled by 19 statute to review these standards every six years. 20 MR. SACHS: I'm sorry, Collin. We can take 21 this offline, but this is irrelevant when the next 22 review is over a decade away.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 73 1 MR. BROOKMAN: It sounds like a lunchtime 2 conversation. 3 MR. SACHS: Yes. 4 MR. BROOKMAN: Okay. Yes, over lunch. Okay. 5 So we haven't yet addressed item 5-1 through 6 5- 3. Comments on any of these? 7 MR. SACHS: I was addressing 5-1. 8 MR. BROOKMAN: Noting, I mean, the specifics, 9 that is, Harvey. Any additional thoughts on these 10 three? 11 Okay. We're moving on. 12 MS. PRESENT: As I have mentioned, DOE will 13 also develop estimates for manufacturer selling price. 14 This is essentially applying a markup to manufacturer 15 production costs to account for nonproduction costs, 16 such as maintenance, depreciation, R&D, et cetera. 17 "Item 5-4: DOE seeks comment on the markup 18 approach proposed for developing estimates of 19 manufacturer selling prices." 20 MR. BROOKMAN: Charlie? Brenda? So any 21 additional thoughts on manufacturer selling price and 22 the markup approach?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 74 1 No comments here. 2 MS. PRESENT: All right. A note about 3 proprietary designs. DOE considers in its engineering 4 and economic analyses all design options that have not 5 been screened out, which can include proprietary 6 designs. However, DOE will consider proprietary designs 7 in the subsequent analyses only if they are not part of 8 a unique path to a given efficiency level. 9 "Item 5-5: Are there proprietary designs 10 that DOE should consider for any of the equipment under 11 consideration by this rulemaking? If so, how should 12 DOE acquire the cost data necessary for evaluating 13 these designs? 14 "Item 5-6: Are there alternative design 15 paths that can achieve the same level of max-tech 16 energy use as those that may use proprietary designs?" 17 MR. BROOKMAN: And I thought Collin's 18 clarification was useful. So are there patent19 protected or other mechanisms that would constrain 20 manufacturers from deploying, utilizing new technology 21 options? Dipak? 22 MR. NEGANDHI: Dipak Negandhi. In general,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 75 1 the patent-protected designs for refrigeration system 2 will always be more cost. And this is where that graph 3 that was shown does show up. It is true that for 4 manufacturers to increase the efficiencies, there is an 5 increased cost to it. It has not happened otherwise. 6 Thank you. 7 MR. BROOKMAN: Okay. Thank you. 8 Yes, Jim? 9 MR. COLLINS: Jim Collins, AMS. Just to say 10 in this very short time, it is difficult to make sure 11 all of the IP is analyzed because that changes, of 12 course, every day. And if we don't go and do searches 13 on that kind of a basis, it's hard to respond this 14 quickly to a question like that. 15 MR. BROOKMAN: Thank you. And I think the 16 Department understands that. Does NAMA undertake that 17 kind of cataloguing scrutiny? 18 MR. COLLINS: No. 19 MR. BROOKMAN: No. I was just curious. 20 Okay. 21 Collin? 22 MR. WEBER: Sure. Collin Weber from

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 76 1 Navigant. If the time frame that you are referring to 2 is in the context of this public meeting, then 3 obviously we understand. And that's the reason why the 4 Department provides the comment period until July 19th, 5 I think. So we would definitely welcome as thorough of 6 comments on that matter as you would be willing to 7 provide given the time to do that due diligence. 8 MR. BROOKMAN: Thanks. Okay. We're moving 9 on. 10 MS. PRESENT: All right. As part of the 11 engineering analysis, DOE selects representative unit 12 sizes within each equipment class. These 13 representative size beverage vending machines are in 14 sizes that represent typical units of the equipment 15 class. The representative unit sizes analyzed for the 16 2009 BVM final rule are shown in the table below. 17 There are small, medium, and large sizes for both Class 18 A and Class B beverage vending machines, represented 19 both in terms of vendible capacity and in refrigerated 20 volume. 21 "Item 5-7: DOE requests feedback on 22 representative sizes. Are the representative sizes

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 77 1 used for the 2009 BVM final rule adequate? Should they 2 be retained or modified?" 3 MR. BROOKMAN: So go back to 58, please. 4 MS. PRESENT: Okay. 5 MR. BROOKMAN: So we ought to be able to get 6 some comments on these; right? You are familiar with 7 what is out there in terms of capacity and in the 8 various classes. Will these work going ahead? Yes, 9 Jim? 10 MR. MATHIS: Jim Mathis with Crane. This 11 table is very representative of the equipment we still 12 produce today. 13 MR. BROOKMAN: Okay. 14 MR. MATHIS: We haven't seen a major shift in 15 market size related to equipment. 16 MR. BROOKMAN: Or demands from your 17 customers. 18 MR. MATHIS: No, we have not. 19 MR. BROOKMAN: Okay. Thank you. That's 20 helpful. 21 Additional comments on this? Let me see. 22 And specifically 5-8 about combination equipment class.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 78 1 MS. PRESENT: Right. I haven't read that 2 one. 3 MR. BROOKMAN: Go right ahead. 4 MS. PRESENT: "Item 5-8: If DOE were to 5 analyze a combination equipment class, perishables, 6 including or in addition to beverages, equipment class 7 or other new equipment class, what should be the 8 relevant representative sizes for that class?" 9 MR. BROOKMAN: Yes, Jim? 10 MR. COLLINS: Jim Collins, AMS. That is an 11 extremely difficult definition to make, I would think, 12 particularly with vendible capacity. If you're talking 13 about non-beverage items, you know, you can get a lot 14 of Hershey Bars in a machine but, you know, not too 15 many Honey Buns. So that -- 16 MS. PRESENT: Well, in volume, perhaps. 17 MR. COLLINS: -- is rather wide open. 18 Pardon me? 19 MS. PRESENT: In volume, perhaps. 20 MR. COLLINS: I'll just make one comment 21 about volume. That AHAM standard is extremely 22 difficult to interpolate into refrigerated volume of

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 79 1 our type of equipment. I mean, I did my calculations. 2 I went to my astute third party, which happens to be 3 Intertek, and he came up with totally different 4 numbers. And we had to try to reconcile our 5 calculations. And we did. But that standard is not in 6 any way directly applicable to our type of equipment. 7 MR. BROOKMAN: Okay. Thank you. I guess one 8 thing that would be useful here is if -- to me, 5-8 9 speaks to things like trend line. If it is headed in a 10 direction that DOE would spot from knowing about it, as 11 you look at 58 again and what is there in terms of 12 class and size. 13 MS. PRESENT: I will also say in reference to 14 the comment you just made, if there are other standards 15 or methods that would be more amenable to beverage 16 vending machines, we are very open to hearing about 17 them. 18 MR. BROOKMAN: In your written comments. 19 Okay. Okay. 20 So final comments on 5-7 to 5-8? 21 MS. PRESENT: The engineering analysis 22 continues from the baseline all the way through max-

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 80 1 tech. DOE is required to analyze the max-tech level, 2 which is the maximum technologically feasible 3 efficiency level. DOE will seek interested party input 4 on the appropriate max- tech levels. In the outside 5 regulatory changes portion of the engineering analysis, 6 DOE will consider the effects of other DOE energy 7 conservation standards and regulatory changes outside 8 DOE's rulemaking process that can impact manufacturers 9 of covered equipment. 10 Some regulatory changes can also affect the 11 efficiency, energy consumption, and/or engineering 12 costs of the beverage vending machines covered under 13 this rulemaking. 14 DOE will attempt to identify any outside 15 engineering issues that could impact the engineering 16 analysis. 17 "Item 5-9: DOE requests information on the 18 use of alternative refrigerants in beverage vending 19 machines, including shipment, cost, and energy 20 consumption information." 21 And "Item 5-10: Are there additional 22 regulatory issues that DOE should consider in its

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 81 1 analysis of beverage vending machines? Do the issues 2 discussed in this section affect shipments, cost, or 3 energy efficiency?"; "this section" referring to the 4 framework document. 5 MR. BROOKMAN: We mentioned refrigerants 6 earlier today. Additional thoughts, comments on that? 7 Dipak? 8 MR. NEGANDHI: Yes. Dipak Negandhi, Royal 9 Vendors. With respect to 5-10, using alternative 10 refrigerants will impact energy efficiency. I think we 11 had earlier discussions on the SNAP setup. For 12 beverage vending machines, the SNAP has approved carbon 13 dioxide as an alternate hydrocarbon refrigerant only. 14 And typical indications are that that type of 15 refrigerant causes a higher energy penalty, actually, 16 going towards the lower, zero, GWP refrigerant. 17 The propane portion, which is the other 18 hydrocarbon being considered, is not yet approved by 19 SNAP for beverage vending machines. 20 MR. BROOKMAN: Okay. Harvey? 21 MR. SACHS: Thank you very much. I may have 22 missed something. We are certainly seeing some

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 82 1 manufacturers suggesting that they are getting 2 efficiency improvements in relatively large charged 3 propane machines, that are in the range of 20 to 25, 30 4 percent. So I am sure you are right that no one has yet 5 submitted a SNAP application for beverage vendors, but 6 that doesn't mean it should not be considered. To me, 7 it doesn't mean it should not be considered in this 8 proceeding as a potential technology that could be 9 applicable in the time scale of interest before a 10 standard goes into effect. 11 MR. NEGANDHI: Dipak Negandhi, Royal Vendors. 12 I agree with Harvey that the potential may be there, 13 but there are two paths. And there are other consumer14 related instances where our customers have to find 15 acceptance of the refrigerants. And, as it was 16 mentioned earlier in this proceeding, there are 17 basically two major users of the equipment that 18 literally dictate this market. And then that's where 19 we will need input from them for alternative 20 refrigerants. 21 MR. SACHS: Thank you. 22 MR. NEGANDHI: Thank you.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 83 1 MR. BROOKMAN: Additional and perhaps final 2 comments on 5-9 and 5-10? Nothing additional? 3 Okay. Let's take a break. We covered a lot 4 of ground. We are ahead of schedule. It is now 20 5 minutes until 11:00. Let's take a 15-minute break, 6 which means we will resume at 5 minutes to 11:00. 7 As you walk around the building here, the 8 Forrestal Building, you must wear this badge and 9 visible. There are restrooms on both ends of the hall. 10 There is a coffee shop on the ground floor, almost 11 directly beneath us on the other side of the hallway. 12 So if you go back to the elevators and get off the 13 elevators to the ground floor and hang a left, there is 14 a coffee shop, Dunkin' Donuts, that sort of a thing, 15 there. What else should I say? Let's go quickly to 16 get coffee. Sometimes they are stacked up. And we 17 will start back here at 5 minutes to 11:00. Thanks for 18 a good start. We will be back then. 19 (Whereupon, there was a brief recess.) 20 MR. BROOKMAN: Let's resume. For those 21 jointing us via the web, we are happy to have you 22 joining us. The Department of Energy is trying hard to

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 84 1 make these meetings accessible to all. So please feel 2 free to participate as you wish as we go along. We are 3 now going to proceed, pick up where we left off. And 4 we are going to hear from Scott Morris. 5 MR. MORRIS: Thank you. 6 I am Scott Morris from Pacific Northwest 7 National Laboratory, or PNNL. I will start, basically 8 expounding the wonders of the economic analyses that 9 the Department will be performing. 10 First of all, the markups analysis and energy 11 use analysis, shown just below, are important bridges 12 between the engineering analysis and the detailed 13 economic and energy analyses to come. 14 So, in practical terms, the markups analysis 15 translates to manufacturer selling prices, or MSPs, 16 produced in the engineering analysis into final 17 equipment purchase prices. There are three primary 18 steps taken to, or in, developing the markup values, 19 first of which is to identify the individual markup 20 levels in a given distribution channel. And the next 21 slide will show some distribution channels. Second, 22 actual markup values for each level within a

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 85 1 distribution channel need to be determined. And, 2 finally, a determination regarding the percentage of 3 equipment passing through each distribution channel 4 needs to be made. 5 So DOE has initially developed the following 6 four distribution channels for BVMs, or beverage 7 vending machines, and requests comment, officially 8 coming in two more slides, regarding these channels and 9 the relative fractions of equipment passing or expected 10 to pass through each of these distribution channels. 11 There are two main types of markups: 12 baseline and incremental. Combining these markups 13 appropriately with sales tax yields overall markups. 14 So baseline markups convert MSPs to final purchase 15 prices for baseline efficiency equipment. 16 Incremental markups only deal with varying 17 costs, such as insurance and appreciation and profit, 18 just to name a few examples. Incremental markups are 19 applied to the differential in MSPs between baseline 20 and higher efficiency equipment. 21 And, finally, the last major step in the 22 markups analysis is to determine the overall markups,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 86 1 which is done by combining distribution channel 2 information, baseline and incremental markups, and 3 sales tax. Put those things together to get the 4 overall markups for a given piece of equipment. 5 This brings us to the first request for 6 comment slide. "7-1: DOE requests information on the 7 distribution channels described above for the beverage 8 vending machines covered under this rulemaking. The 9 Department also requests information on the relative 10 fractions of shipments expected for each distribution 11 channel. Do distribution channels vary by equipment 12 class? 13 "7-2: DOE requests information on how the 14 overall markups for the beverage vending machines 15 covered under this rulemaking may vary for each 16 distribution channel. 17 "7-3: DOE requests feedback on its proposal 18 to use baseline and incremental markups." 19 And "7-4: DOE requests comment on sources of 20 relevant data that could be used to calculate markups 21 for each distribution channel." 22 MR. BROOKMAN: Can we do this? Can you go

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 87 1 back to slide 65 for these distribution channels? Can 2 you give an estimate of the fraction of product that 3 flows through each? Jim? 4 MR. MATHIS: Jim Mathis with Crane 5 Merchandising Systems. This is an area where Crane 6 would specifically look to NAMA to provide the 7 distribution through these. And the reason why I say 8 that is because from an industry perspective, we are a 9 small industry. And when we start talking about what 10 our personal quantities are -- 11 MR. BROOKMAN: Okay. Yes. 12 MR. MATHIS: -- to each distribution channel, 13 we start, you know, -- 14 MR. BROOKMAN: Right. 15 MR. MATHIS: -- kind of just throwing out 16 competing information there. So we would look for NAMA 17 to provide this information through them being the 18 clearinghouse. 19 MR. BROOKMAN: Gotcha. Okay. 20 MR. MATHIS: And, of course, if they need 21 information from each of the manufacturers, we are more 22 than happy to support that.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 88 1 MR. BROOKMAN: Does the Association do that 2 on a regular basis? 3 MR. MATHIS: They do. 4 MR. BROOKMAN: Okay. 5 MR. MATHIS: They provide that information 6 annually and track that throughout the industry. 7 MR. BROOKMAN: I am just interested to know 8 their capacity or to confirm their capacity, more 9 particularly. Great. It's good to know. Okay. 10 So, then, I don't guess, then -- no one here 11 wishes to comment on overall markups either or baseline 12 or incremental markups? Can you comment on the 13 proposal to use both baseline and incremental markups? 14 Does that make sense to you? Yes, Jim? 15 MR. COLLINS: Jim Collins, AMS. Can I ask 16 why that is important? 17 MR. MORRIS: Baseline versus incremental 18 markups? 19 MR. COLLINS: Right. 20 MR. BROOKMAN: Yes. 21 MR. MORRIS: Baseline markups -- so one thing 22 I had to keep reminding myself is that these markups

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 89 1 are referring to markups from a manufacturer to 2 essentially the end user. And the reason it is 3 different, I guess, is baseline markups are typically 4 used to -- they incorporate the profit margins and 5 daily operating expenses that wholesalers and 6 distributors have. And the reason -- well, maybe 7 everybody here can specify why there is a good reason 8 not to use incremental markups, but incremental markups 9 capture the idea that just because a piece of equipment 10 is more expensive to a wholesaler to purchase from a 11 manufacturer does not necessarily imply that other 12 costs rise besides the initial expense from the 13 manufacturer. It implies that other costs are not 14 going to be elevated between the manufacturer and the 15 end user; so, for example, insurance costs to cover the 16 stock that a wholesaler has in their warehouse. They 17 might go up a little bit due to having more expensive 18 stock on hand, but at the same time, incremental 19 markups are -- I guess they are designed to not be 20 marking up everything as much between baseline and more 21 efficient equipment. 22 MR. BROOKMAN: Yes, please, Satish?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 90 1 DR. BAPANAPALLI: This is Satish Bapanapalli 2 with PNNL. Just to clarify, we are trying to 3 differentiate between fixed costs and variable costs. 4 And by "variable costs," I mean the costs that vary 5 with the price of the equipment; whereas, things like 6 rent, location expenses, and things like that don't 7 change just because the equipment is more expensive. 8 So that is what we are trying to differentiate between, 9 fixed costs and variable costs, "variable" being with 10 the price of the equipment. 11 MR. BROOKMAN: Thank you. 12 So additional comments, any comments on 7-3 13 or 7-4? 14 Okay. 15 MR. MORRIS: The energy use analysis we will 16 talk about now simply calculates how much energy a 17 given piece of equipment uses. It is a relatively 18 straightforward, yet crucial input to the life-cycle 19 costs and payback period analysis and the other 20 national- level analyses that we will be discussing. 21 So, as Elaina talked about earlier, daily 22 operating hours contributes to daily energy use or

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 91 1 energy consumption. So operating hours are important 2 factors in determining how much energy equipment uses. 3 And, again, how much energy the equipment uses is kind 4 of, I guess, the whole point of us being here today. 5 This brings us to a slightly different request for 6 comment, "6-1: How should DOE treat energy use in 7 heating mode for outdoor machines in cold climates?" 8 MR. BROOKMAN: Jim? 9 MR. MATHIS: Jim Mathis with Crane 10 Merchandising. From an industry standpoint -- and this 11 is something that I am not sure if the other 12 manufacturers are interested in commenting on, but from 13 an overall standpoint, this is a small quantity of 14 machines that are produced that actually have heating 15 elements tied to them that are put into the field for 16 use in colder climates. There is a portion of them, 17 but historically the machines that are produced by the 18 manufacturers that actually have elements tied to them 19 is very small. 20 MR. BROOKMAN: Could you quantify it? 21 MR. MATHIS: I really can't, honestly, Doug. 22 MR. BROOKMAN: One percent? Five percent?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 92 1 MR. MATHIS: Typically for us right now, we 2 are not producing any equipment that has heating 3 elements tied to it. 4 MR. BROOKMAN: Okay. 5 MR. MATHIS: So from an industry standpoint, 6 I really couldn't quantify it. 7 MR. BROOKMAN: Okay. Thanks. 8 Yes, Dipak? 9 MR. NEGANDHI: I agree with Jim. None of the 10 vending machines for outdoor applications either have 11 heaters or gas defrost mode. So they are designed to 12 withstand the cold climate without having any heaters 13 installed in them. Heaters that are being installed 14 are probably an after-market component or an optional 15 accessory. So it is not a standard component of the 16 vending equipment market. 17 MR. BROOKMAN: Okay. Yes, Jim? 18 MR. COLLINS: Jim Collins, AMS. I will say 19 we do ship machines with heaters. Particularly the 20 fresh bait vending industry needs that kind of thing 21 for outdoor machines in the cold. But on the technical 22 side of that, I would just say I think it could be

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 93 1 ignored and the reason being if you are efficient, if 2 you are at high efficiency on the cooling side, then, 3 almost by definition, you are equally at high 4 efficiency on the heating side. Since most of these 5 heating systems are based on electricity, which is 6 essentially 100 percent efficient on heating, then I 7 think you could just ignore this as adding to the 8 energy consumption of the machine as a whole. 9 MR. BROOKMAN: Thank you. 10 MR. SACHS: What does a fresh bait beverage 11 vending machine look like? 12 MR. COLLINS: The thing is, you know, again, 13 I'm just going to take this opportunity to say I feel 14 like the small fish in the ponds here being our 15 machines aren't really like their machines. We can 16 vend a beverage, but we really vend everything. And 17 so, you know, I hate to even say this, but we shouldn't 18 be in this category, although we would fall under the 19 definition for sure. But it is the same machines. And 20 I can't tell you that a machine that is going out next 21 to the river in Wisconsin, where we do have a lot of 22 machines, isn't next month going to be moved indoors

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 94 1 and they're going to load it up with beverages or food 2 or snacks. 3 MR. SACHS: That's really very helpful. I 4 appreciate that. 5 MR. BROOKMAN: Harvey, microphone, please. 6 Thank you. 7 MR. SACHS: Thank you, Jim. The question was 8 in jest, and you have given me some real things to 9 think about. I very much appreciate it. And I will 10 not think about a machine that is liquefying worms for 11 you to drink. 12 MR. BROOKMAN: Okay. Final comments on this 13 one because we are going to move -- yes, Mike? 14 MR. MAU: I'd like to just follow up to Jim's 15 comment. This is Mike Mau from Royal Vendors. With 16 that style of equipment, that is not the typical 17 equipment that has been part of the ASHRAE standard. 18 So, you know, with what DOE is trying to look into, it 19 is trying to bridge this gap that there isn't any 20 bridge there currently, you know, like beverage vending 21 equipment is beverage vending equipment. There is not 22 really the perishable or bait vending equipment. It is

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 95 1 pretty unique. 2 MR. BROOKMAN: Okay. Thank you. 3 We're moving on. 4 MR. MORRIS: Energy use and economics. Ari, 5 did you have a -- 6 MR. BROOKMAN: Yes. Ari has a question. 7 MR. ALTMAN: Yes. This is Ari Altman from 8 the General Counsel's Office. Following up on the 9 point you made about vending machines that aren't 10 specifically for beverages, are there any vending 11 machines made that cannot be used for beverages, that 12 cannot be used for cross purposes but are only for 13 either non-beverage or non-food items entirely? 14 MR. COLLINS: Jim Collins from AMS. Yes, 15 there are. Ambient temperature machines are commonly 16 shipped, but they don't have refrigeration. An in17 between class, for which we were granted an exemption 18 in the present rule, is a machine that is basically an 19 ambient temperature machine with a small refrigeration 20 unit that can keep the chocolates from melting. Okay. 21 So a very small compressor, uses very little energy, 22 but you could throw a beverage in it. So yes, there

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 96 1 are almost no machines built today on the market that 2 couldn't vend a beverage. 3 MR. BROOKMAN: Ari? 4 MR. ALTMAN: Great to know. That's what I 5 wanted to know. Thank you. 6 MR. BROOKMAN: Okay. Great. 7 MR. MORRIS: So, again, energy use and 8 economics and the analysis from the markups analysis 9 come together in the LCC, or life-cycle costs, and 10 payback period analysis. So in a few minutes, we will 11 discuss the national impact analysis, which assesses 12 the overall energy and economic impacts of different 13 efficiency levels on the nation as a whole. But the 14 life-cycle cost and payback period analysis looks at 15 these impacts for individual customers. So life-cycle 16 cost is the sum of purchase installation and operating 17 costs of equipment for its entire lifetime discounted 18 to some base year. 19 We will further discuss the operating costs 20 and break them out a little bit more on the next slide. 21 And LCC results are expressed as the difference in 22 total cost, in total cost during its lifetime, between

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 97 1 baseline efficiency and higher efficiency equipment. 2 A payback period is the number of years it 3 takes a customer to recover the typically higher 4 initial cost of more efficient equipment through 5 decreased operating expenses. 6 There are two main types of cost associated 7 with calculating the LCC, life-cycle cost, of 8 equipment. The first type, shown here as equipment 9 purchase price and installation costs, encompasses the 10 capital up-front costs of new equipment. The second 11 general type, shown here as maintenance, repair, and 12 energy costs, is expenses incurred during the lifetime 13 of the equipment after the initial purchase and 14 installation. Some other important inputs to the LCC 15 analysis include discount rates, base case 16 distributions, and equipment lifetime. We're going to 17 talk about a couple of these in a bit, but I would like 18 to focus specifically on the base case distribution of 19 efficiency-level shares bullet. 20 Elaina had already alluded to this earlier. 21 This is more of a shipments issue that has LCC 22 ramifications. For example, if there are differences

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 98 1 in maintenance or repair costs between more efficient 2 and less efficient equipment in the current stock or in 3 the projected future stock of installed machines, this 4 would be useful information to incorporate into the LCC 5 analysis. We will have a specific request in a few 6 slides. 7 So as nice as it would be to pinpoint every 8 LCC input with perfect precision, obviously it can't be 9 done. There is variability in many inputs, which vary 10 by region, by time, and in other ways. So the Monte 11 Carlo approach, shown in this slide, will be formally 12 carried out in the NOPR phase of this rulemaking, but 13 in the preliminary analysis, average values for 14 variables, such as electricity prices, sales tax, and 15 others, will be used, which brings us to several more 16 requests for comment. "8-1: DOE seeks comment on the 17 proposed approaches for estimating current and 18 forecasted energy prices. 19 "8-2: DOE seeks comment on the proposed 20 approaches for estimating discount rates for customers 21 using the equipment covered under this rulemaking. 22 "8-3: DOE recognizes that a large fraction

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 99 1 of the customers of beverage vending machines are 2 beverage bottlers. Which commercial sectors besides 3 the bottlers should be considered in the evaluation of 4 discount rates? In addition, do stakeholders believe 5 that government direct purchases of this equipment are 6 large enough to require that they be included in the 7 evaluation of discount rates?" 8 MR. BROOKMAN: So there you see those. Let's 9 pause, and let's address those three. Comments on 8-1, 10 8-2, and 8-3? Dipak? 11 MR. NEGANDHI: Dipak Negandhi, Royal Vendors. 12 Scott, in general terms, one thing I'm missing here on 13 the life-cycle cost analysis is what is the life of the 14 equipment that you put in because that is the biggest 15 factor for the life-cycle cost? 16 MR. MORRIS: What is the lifetime? 17 MR. NEGANDHI: Yes. 18 MR. MORRIS: That is a good question. And I 19 am hoping you can tell me the answer. 20 MR. NEGANDHI: So here is the thing. The 21 trend has been in the last few years we have observed a 22 lot of users, instead of scrapping the equipment, are

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 100 1 remanufacturing them to extend the life span. And in 2 the process, Royal offers the process of upgrading the 3 energy efficiency to current ENERGY STAR standards 4 also. Now, I shouldn't say that 100 percent of the 5 equipment when it is refurbished is upgraded on the 6 efficiency side, but a number of them are. And I don't 7 know how that is going to be accounted for in this 8 model. 9 MR. MORRIS: Charlie? 10 MR. BROOKMAN: Charles Llenza? 11 MR. LLENZA: This rulemaking does not 12 preclude refurbished equipment. So we don't account 13 for it. 14 MR. NEGANDHI: So that is outside the scope 15 if I may understand. 16 MR. LLENZA: Yes, that's outside the scope. 17 And I don't think we have authority, really, to do 18 remanufactured equipment. 19 MR. NEGANDHI: Yes. But that's my concern, 20 is that the life number of span of years may be 21 misrepresented in that. 22 MR. BROOKMAN: Gotcha. Okay.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 101 1 MR. NEGANDHI: That is all at this point. 2 MR. BROOKMAN: Yes. That would be useful 3 data to have. And, of course, the Department of Energy 4 is serious data-hungry folks. So any kind of 5 information along those lines would be tremendously 6 helpful to them. 7 So you see there current and forecasted 8 energy prices, discount rates. Let's start with those 9 two. Thoughts on those two? Yes, Jim? 10 MR. MATHIS: Jim Mathis with Crane 11 Merchandising Systems. One of the things that the 12 Department needs to keep into consideration as it is 13 reviewing this particular industry is the purchasers of 14 this equipment typically aren't the ones who are using 15 the equipment and paying the bills at the end of the 16 day with regards to the energy usage of the equipment. 17 It is very different than your typical consumer going 18 to a big box store, picking out which piece of 19 equipment they want to put in their home, and taking 20 the hit on the energy consumption themselves. 21 Typically, the users are the ones who are paying the 22 energy prices and the fees associated with using that

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 102 1 energy, and the purchaser of the equipment never see 2 any impact to that. So from an overall standpoint, 3 just keep that in mind as you are doing your research 4 for your LCC analysis. 5 MR. BROOKMAN: Okay. 6 MR. MORRIS: Thank you. 7 MR. BROOKMAN: Thank you. 8 Any thought on discount rates? Harvey? 9 MR. SACHS: Harvey Sachs, ACEEE. With 10 respect to items 8-1 and 8-2, it seems to me that the 11 least risky approach is to go ahead and use the same 12 OMB discount rates and the same EIA energy forecasts, 13 as are used in almost all the other equipment 14 rulemakings, rather than having this become a very big 15 deal as an exception. We always find the EIA 16 projections to be wrong. And so does everyone else, 17 but there's nothing less bad or nothing widely accepted 18 that is less bad. 19 MR. BROOKMAN: 8-3? Any additional comments 20 on 8-3 from anyone? 21 MR. SACHS: Harvey again. There's a question 22 on 8-3. And I really don't know the answer. I have

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 103 1 had the impression that some of the refrigerant 2 alternatives that are being considered are driven by 3 the purchasers; that is, the bottling companies, 4 interested in projecting green. And the question is 5 really to what extent that is true and to what extent 6 that carries over to giving the end user some options 7 in terms of his contract or some desire to market that, 8 gee, this is the lowest-energy cost, greenest unit on 9 the market. I mean, that is why the standard itself is 10 a benchmark or comparison stand. 11 Now, I don't know the answers, but it seems 12 to me that given this very unusual market structure, it 13 is a relevant question, soliciting comments from the 14 bottlers on what it is what their criteria are. 15 MR. BROOKMAN: Yes. Okay. Let's move on to 16 8- 4, 5, 6, and 7. 17 MR. MORRIS: "8-4: DOE seeks feedback on 18 what fraction of the installation, maintenance, and 19 repairs involve efficiency improvements and what are 20 the typical practices during the life cycle of an 21 originally manufactured beverage vending machine; for 22 example, changing lamps but not the compressor.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 104 1 "8-5: What is a typical time period between 2 the sale of a new BVM unit and the first maintenance or 3 repairs? What are the typical cycles of maintenance 4 and repairs? 5 "8-6: DOE seeks feedback on whether and how 6 routine maintenance, repair, and installation costs 7 will change for more efficient equipment. 8 "8-7: DOE seeks feedback on appropriate 9 methodologies for assessing changes to maintenance, 10 repair, and installation costs." 11 MR. BROOKMAN: Dipak? 12 MR. NEGANDHI: Dipak Negandhi, Royal Vendors. 13 The only comment, again, I have to make is with 14 relation to the maintenance costs. As the 15 manufacturers -- and we have discussed this before 16 earlier about using hydrocarbon refrigerants. As we 17 move to the hydrocarbon refrigerants, this being a new 18 technology, we expect the maintenance costs to go up, 19 actually, rather than lower. 20 MR. MORRIS: Do you anticipate the actual 21 cost at the time of service to go up or the maintenance 22 schedule to be more frequent or both?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 105 1 MR. NEGANDHI: Right, right, just the overall 2 maintenance and repair expenses. 3 MR. BROOKMAN: For both the schedule and the 4 actual expense of the visit? 5 MR. NEGANDHI: Of the visit, right. 6 MR. MORRIS: Okay. Thank you. 7 MR. NEGANDHI: Until this technology kind of 8 settles down. 9 MR. BROOKMAN: But 8-4 goes to your earlier 10 comment, Dipak. What fraction of your installation, 11 maintenance, and repairs involve efficiency 12 improvements would you say? Can you say? Can you 13 answer the question in 8-4, "What fraction of the 14 installation, maintenance, and repairs involve 15 efficiency improvements?" I guess you were talking 16 about a wholesale reworking of the equipment or 17 something. 18 MR. NEGANDHI: That's correct, yes. 19 MR. BROOKMAN: Refurbishment? 20 MR. NEGANDHI: Refurbishment or 21 remanufacturing, right. 22 MR. BROOKMAN: Yes. Okay. That's different.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 106 1 MR. NEGANDHI: Yes. 2 MR. BROOKMAN: Thank you. 3 MR. MORRIS: What about -- 4 MR. SACHS: I have a question for the 5 manufacturers. 6 MR. BROOKMAN: Yes? Go ahead, Harvey. 7 MR. SACHS: Harvey Sachs again. During the 8 last rulemaking round, there was a fair amount of 9 discussion, if I recall correctly, about a possible 10 trend toward pallet-mounted refrigeration systems that 11 could be slid out and serviced back at the shop, rather 12 than worked on in the field. And it may be relevant to 13 understand that, for the Department to understand that, 14 better and whether these are likely to be repaired, 15 replaced, and if replaced, whether replaced with more 16 advanced systems or with exactly the same as they were. 17 Again, I am asking because I don't know if this is a 18 significant trend. 19 MR. BROOKMAN: Yes, Jim? 20 MR. MATHIS: Jim Mathis with Crane 21 Merchandising Systems. In response to Harvey's 22 question, it depends on within industry which bottling

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 107 1 company you are actually referring to and which user of 2 the equipment as to what their standard methods are of 3 dealing with repairs in the field. There has been a 4 shift recently -- when I say "recently," within the 5 past 2 to 3 years -- and more of a trend toward 6 actually picking up a defective piece of equipment 7 completely, as opposed to repairing it in the field, 8 and replacing it with a refurbished or a reworked piece 9 of equipment or a known good piece of equipment and 10 then taking the suspect back to the shop and working on 11 it there, as opposed to previous 2 or 3 years ago, the 12 trend was to have equipment that was easily accessible, 13 to your point, where a refrigeration system could be 14 swapped within 10 to 15 minutes and the machine 15 returned to service and then the old deck replaced or 16 worked on back at the shop. So, from an overall 17 standpoint, there has been more of a trend of relieving 18 equipment from the field that is suspect at the time. 19 With an overall standpoint, the newer designs 20 of the equipment, although very modular in 21 construction, still take a significant amount of work 22 to disassemble. A lot of the newer customers that these

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 108 1 companies are dealing with placing equipment don't want 2 someone dragging the torque set out and brazing a leak 3 in the middle of their lobby, which is what has driven 4 the companies to actually pick the equipment up and 5 take it back to the facility and rework it there. 6 MR. SACHS: Harvey Sachs again. Belaboring, 7 that sounds like it will have impact on some of the 8 questions that Dipak raised about field servicing of 9 hydrocarbon units. 10 MR. MATHIS: Yes. And this is Jim Mathis 11 again with Crane Merchandising. The technology he 12 specifically is referring to of transitioning to non13 HFC refrigerant- type systems is going to require work 14 to be done back at the shop and not in the field. So 15 he's exactly right with the comment he makes about fuel 16 services being involved with newer technologies at this 17 point in time. 18 MR. BROOKMAN: Scan through these. We didn't 19 answer all of them. We started. 8-4, 8-5, 8-6, 8-7. 20 MR. MORRIS: Oops. I forget this. This 21 keeps going. This is the third and final one here. 22 "8-8: DOE seeks feedback on appropriate equipment

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 109 1 lifetimes for the beverage vending machines covered 2 under this rulemaking," keeping in mind what Charlie 3 mentioned, that these are for new equipment only. 4 "8-9: DOE seeks comment on whether energy 5 conservation standards will have an impact on lifetimes 6 of beverage vending machines. 7 "8-10: Is there a suitable inventory model 8 that could be used to estimate the fraction of new 9 versus rebuilt/refurbished machines in the market? If 10 no inventory model exists, what is the impact of 11 refurbishment on the equipment lifetime? DOE also 12 seeks feedback on the number of refurbishment cycles in 13 the typical lifetime of the beverage vending machines. 14 DOE also seeks information on the effect of 15 refurbishments on equipment utility and energy 16 consumption. In a typical refurbishment, for example, 17 are features added to the beverage vending machine that 18 affect its utility and/or are changes made that affect 19 the energy consumption of the equipment?" 20 MR. BROOKMAN: Maybe we could start with 21 lifetimes. Typical lifetimes for new equipment? What 22 would they be? Jim?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 110 1 MR. MATHIS: Jim Mathis, Crane Merchandising 2 Systems. I think items 8-8, 8-9, and 8-10 are all 3 items that need to be addressed through the users of 4 the equipment. From a manufacturing standpoint, we 5 have scopes and design criteria that we design around 6 for the expected life cycle of a piece of equipment, 7 but the majority of these decisions are made based on 8 the individual piece of equipment, its use, its 9 history, where it has been used as to what its life 10 expectancy really looks like, as well as the return on 11 investment as how that asset is depreciated over time 12 through those particular companies that own that asset 13 and operate that asset. 14 MR. BROOKMAN: Okay. Thank you. 15 Patrick Powell has a comment from online. 16 Patrick says, "I will unmute him." 17 MS. MARCHETTI: I will unmute him. 18 MR. BROOKMAN: Oh. Patrick, you should be 19 unmuted. Speak. Maybe your own phone is muted. We 20 can't hear you. Patrick, are you there? Not yet. No? 21 Okay. Well, we'll try later. 22 Do we have any additional thoughts, comments

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 111 1 on 8-8, 8-9, 8-10? 2 Patrick, I'll give you one more chance here. 3 No luck, Emily? 4 Okay. Well, Patrick, when we get you on 5 line, we will bring you back into the conversation. 6 Let's proceed. 7 MR. MORRIS: Okay. Now, the LCC and payback 8 period analysis concerns the economic costs to 9 individual customers. The national impact analysis, on 10 the far right here, quantifies the energy savings and 11 economic costs, or savings, to the nation as a whole. 12 The shipments analysis, circled here, is essentially 13 the glue, and, I should say, very important glue, that 14 binds the life-cycle costs and national impact analysis 15 together. 16 So the shipments analysis ultimately dictates 17 the current and future shipments and stock of equipment 18 nationwide. The most important component of the 19 shipments analysis is correctly estimating the overall 20 volume of equipment shipped for the 30-year period 21 mentioned in this first sub-bullet. DOE will use as 22 many relevant data sources as possible to estimate

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 112 1 future shipments. The Department also appreciates 2 input from manufacturers and other knowledgeable 3 parties. 4 Another important component of the shipments 5 analysis, as mentioned several slides ago, regards the 6 mix of efficiencies within the national stock of 7 equipment; that is, in the absence of a standard, of a 8 new standard or amended standard, what is the mix of 9 efficiencies by equipment class installed in the 10 country, both now and in the future? 11 That brings us to some more comments, 12 requests for comment. "9-1: DOE requests data on, 13 sources of data related to, or any information 14 pertaining to historical shipments and the market 15 shares of the different efficiency levels offered in 16 each equipment class. 17 "9-2: DOE seeks information on 18 representative saturation rates for each equipment 19 class covered under this rulemaking, as well as 20 industry-trend data regarding relative stock and growth 21 in each equipment class. 22 "Item 9-3: DOE seeks input on methods of

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 113 1 projecting the markets for each equipment class and 2 access to models or methods that could be used to 3 estimate shipments." 4 And "9-4: DOE seeks input on likely impacts 5 on the shipments due to new or amended standards for 6 beverage vending machines. Please comment on what the 7 possible scenarios are and the estimated quantitative 8 impacts or "impact" of each scenario on the shipments 9 numbers." 10 MR. BROOKMAN: So it seems based on our 11 previous conversation that 9-1 and 9-2, you would 12 expect NAMA to answer those two. What about 9-3 and 9- 13 4, particularly 9-4, possible scenarios, estimated 14 quantitative impact of scenarios on shipment numbers? 15 Any thoughts on that? Yes, Jim? 16 MR. MATHIS: Jim Mathis with Crane 17 Merchandising Systems. The only thing I would like to 18 add to this is the vending industry has been a 19 declining industry over the past several years. We 20 have been very stagnant. And the number of machines in 21 the field has actually been declining. That goes back 22 to some of the comments Dipak made earlier about the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 114 1 refurbishment and remanufacture of existing assets to 2 prolong the life. So with regards to the placement of 3 new equipment, it has been very stagnant. 4 MR. BROOKMAN: Okay. Thank you. 5 MR. MORRIS: Can I ask -- go ahead. Sorry. 6 MR. COLLINS: Jim Collins with AMS. One of 7 the areas that would make this a bigger issue would be 8 if there were any type of recognition for compliance to 9 these standards. And the example I use is our 10 customers that will pay the extra money for efficient 11 equipment typically are doing so because they are 12 taking bids in LEED-certified buildings. And they 13 require ENERGY STAR. They don't know a darn thing about 14 these DOE things. If this program could be treated as 15 that program, you would have a higher impact and this 16 question would make a lot more sense. 17 MR. BROOKMAN: Okay. 18 Charles Llenza? 19 MR. LLENZA: This is Charles Llenza, 20 Department of Energy. They are separate programs, and 21 ENERGY STAR is voluntary. And the Department when they 22 establish energy conservation standards, they are

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 115 1 mandatory across all product lines. So it is a little 2 bit of a different program. What I can say is that 3 there is more integration now with what we do and 4 energy does, ENERGY STAR does. So, at least from that 5 perspective, the baseline will come out of DOE and 6 ENERGY STAR will build on that baseline. 7 MR. BROOKMAN: Yes, Jim? 8 MR. MATHIS: Jim Mathis, Crane Merchandising 9 Systems. From an historical standpoint, what we have 10 experienced throughout our industry is, although ENERGY 11 STAR is driven to be the top 20-25 percent of the 12 products produced in the market, we have ended up being 13 almost 100 percent ENERGY STAR because the parent 14 companies driving this industry only want to buy ENERGY 15 STAR pieces of equipment because they don't want to be 16 limited as to what assets can go into what locations. 17 That is kind of where this is a unique situation for 18 us. You know, we are cognizant of the DOE standards. 19 And, of course, every piece of equipment we produce 20 meets those standards. 21 But, to Jim Collins' point, the majority of 22 the demand on our products is for that extra five to

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 116 1 ten percent, whatever ENERGY STAR sets above the DOE 2 threshold. So we are driving towards that threshold as 3 our minimum basis for our criteria. 4 MR. BROOKMAN: Okay. Final comments on 9-3 5 and 9-4? 6 MR. MORRIS: Can I ask a follow-up question 7 to Jim Mathis? You mentioned new shipments of machines 8 have been declining in the last several years. Can you 9 make any general statements about the overall stock of 10 equipment? Is that increasing over time still? Is 11 that remaining stable or going down? 12 MR. MATHIS: Jim Mathis, Crane Merchandising. 13 With regards to the install base of equipment that is 14 in the field, the operators of this equipment have 15 continued to rationalize whether a location and an 16 asset is producing money. And the majority of that is 17 based around the rising cost of fuel, servicing the 18 equipment, and driving profits down. 19 With regards to the number of machines that 20 are in the industry today, there has been a surplus of 21 equipment and not enough locations to cover that 22 equipment. So the users of the equipment have been

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 117 1 maintaining a high level of used stock and not 2 purchasing a significant amount of new stock. The new 3 stock purchases have been fairly consistent, although 4 turbulent at times given the state of the economy, but 5 they have had an excess that they are just now starting 6 to get past some of that. 7 And, you know, we made the comment earlier 8 about refurbishment and remanufacture. They are 9 continuing to look to those options to prolong the life 10 of the equipment because it is a large purchased piece 11 of equipment that does have a high cost associated with 12 it. 13 MR. MORRIS: Thank you very much. 14 MR. BROOKMAN: Harvey? 15 MR. SACHS: Again, this is sort of -- Harvey 16 Sachs -- a trend question, but am I hearing that we are 17 seeing some sort of a shift in the market from the 18 service station with the beverage vendor outside toward 19 the integrated service station/convenience store, which 20 is using commercial refrigeration equipment, rather 21 than the freestanding beverage vendors? 22 MR. BROOKMAN: Jim?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 118 1 MR. MATHIS: Jim Mathis, Crane Merchandising. 2 You are exactly right, Harvey. What we have 3 experienced is the traditional service station no 4 longer really exists within the United States. What 5 you find now is your integrated c-store, convenience 6 store, that has all of the opportunities for all the 7 food service items within the store. And the other 8 thing that you are seeing, too, is the expansion of 9 what we refer to in our industry as micro markets, that 10 aren't vending machine- based but, from an overall 11 standpoint, they are unattended like a vending machine 12 would be but it is an unattended self-service kiosk. 13 You know, there is this drive to self-service within 14 our nation. 15 MR. BROOKMAN: Thank you. 16 Okay. We will move on. 17 MR. MORRIS: So I just mentioned the life18 cycle costs and shipments analyses come together to 19 inform the national impact analysis. So all of the 20 bullet points in this slide can be boiled down into two 21 main points. First of all, the national impact 22 analysis, or NIA, assesses national energy savings, or

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 119 1 NES, resulting from a standard; and, second, it 2 determines national economic impacts, which is net 3 present value, or NPV, of a newer amended standard. 4 The shipments and life-cycle cost analyses are used 5 together to develop the energy savings, capital costs, 6 and operating expenditures of the national stock for 7 every year during the analysis period. The value of 8 money over time is accounted for using defined discount 9 rates, Harvey, that you had mentioned earlier, at three 10 and seven percent. 11 So, again, there are two main purposes of the 12 NIA, which is to calculate NES and NPV. So national 13 energy savings, or NES, inputs include national energy 14 consumption at each efficiency level by equipment 15 class; projected shipments; stock, which is based on 16 historical and projected shipments; and site-to-source 17 conversion factors, which convert energy use at the 18 site of the equipment, into source or primary energy. 19 And, to calculate NPV, the total installed cost 20 increase and operating cost savings are calculated for 21 each year of the analysis period and effectively summed 22 to determine the economic benefit (or detriment in some

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 120 1 cases) to the nation. 2 This brings us to a request for comments 3 slide, "10-1: DOE seeks comment on the share of the 4 market that is met by refurbished or rebuilt machines 5 and whether there are a substantial number of machines 6 in stock that are not in active use. In particular, 7 DOE seeks comment on the impact of refurbishment or 8 rebuilding on the energy consumption and lifetime of 9 the existing fleet in the absence of standards, and the 10 impact of new standards on refurbishment kits, the 11 subsequent cost, and performance of the stock of 12 existing equipment. 13 "10-2: DOE seeks comment on its plan to 14 develop NIA spreadsheet models for estimating national 15 impacts of amended energy conservation standards." 16 MR. BROOKMAN: It seems like NAMA again would 17 be the one to answer 10-1. Any thoughts on 10-2, plan 18 to develop NIA spreadsheet models for estimating 19 national impacts? 20 (No response.) 21 Nothing there. Okay. 22 MR. MORRIS: Okay. Thank you.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 121 1 I will turn the time back over to Elaina for 2 a few minutes to talk about the preliminary 3 manufacturer impact analysis. 4 MS. PRESENT: As mentioned earlier, DOE also 5 conducts a manufacturer impacts analysis. The 6 activities for the manufacturer impact analysis are 7 greatly expanded in the NOPR phase, but DOE does take 8 advantage of the preliminary analysis by conducting a 9 preliminary manufacturer impact analysis. 10 The primary purpose of this analysis is to 11 assess the potential impacts of energy conservation 12 standards on the manufacturers of BVMs. 13 The method that DOE uses is to conduct 14 interviews with manufacturers and to analyze public 15 data, including SEC 10k filings. During these 16 interviews for the preliminary manufacturer impact 17 analysis, a lot of the discussion is focused on the 18 engineering side. However, they are also used to 19 identify major issues and concerns for manufacturers. 20 Afterwards, DOE will collate the interview responses, 21 prepare a summary of these major issues and outcomes, 22 and start to conduct a straw man industry cash flow

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 122 1 analysis based on the interview responses and publicly 2 available financial information. 3 One of the major goals of the preliminary 4 manufacturer impact analysis is to identify 5 manufacturer subgroups. By "subgroups," what I mean is 6 niche manufacturers and any manufacturers that might be 7 disproportionately affected by the efficiency 8 standards. 9 One subgroup that DOE is always concerned 10 with is small businesses. DOE identifies small 11 businesses and conducts a Regulatory Flexibility Act 12 analysis to determine the impacts of the standards on 13 these small manufacturers. 14 Another major goal is to assess the 15 cumulative regulatory burden. This is about 16 identifying and considering the impact of multiple 17 product-specific regulations on the manufacturers, 18 whether the regulations are part of the DOE's defined 19 standards program or outside regulations. 20 And then the request for comment, "Item 12-1: 21 DOE seeks comment on appropriate manufacturer 22 subgroups, if any, that DOE should consider in the

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 123 1 manufacturer subgroup analysis for beverage vending 2 machines. 3 "Item 12-2: DOE seeks comment from small 4 businesses that could be impacted by amended energy 5 conservation standards for beverage vending machines 6 and what those impacts might entail. 7 "Item 12-3: DOE welcomes comments on other 8 existing or pending regulations it should consider in 9 its examination of cumulative regulatory burden." 10 MR. BROOKMAN: Thank you. 11 Dipak? 12 MR. NEGANDHI: Dipak Negandhi, Royal Vendors. 13 The only comment I have is I want to reemphasize what 14 Jim had said earlier, that within this industry, ENERGY 15 STAR and DOE literally drive the standard because the 16 penetration of ENERGY STAR equipment is so high. And 17 that should be part of the consideration. I mean, that 18 is one of the specific questions about cumulative 19 regulatory impacts. The other, of course, is the SNAP 20 regulations that affect the refrigeration industry, but 21 there is a special category for refrigerated beverage 22 machines.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 124 1 MR. BROOKMAN: Okay. Thank you. 2 MR. NEGANDHI: Thank you. 3 MR. SACHS: This is Harvey. And if I could 4 comment on the ENERGY STAR versus DOE, you all have 5 convinced me that this is a different industry. And 6 the very criteria for ENERGY STAR of supposedly being 7 the upper 25 percent of available models are irrelevant 8 if essentially all customers are asking for essentially 9 all product to be ENERGY STAR. Now, that would argue 10 for collapsing the two together, but the issue then is 11 be careful what you're asking for because at that 12 point, there are no longer any LEED credits if the 13 maximum and the minimum in the market are the same, 14 that people will no longer ask for the LEED for the 15 ENERGY STAR equipment because they can't get anything 16 less efficient. So I don't know how to work on that, 17 but certainly the ENERGY STAR definition is bad for 18 BVM. And that is something that needs to be brought to 19 ENERGY STAR's attention. 20 MR. LLENZA: This is Charles Llenza, the 21 Department of Energy. I am not sure if people 22 understand the relationship between ENERGY STAR and our

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 125 1 standards. So we establish standards. And then ENERGY 2 STAR looks for ways of increasing the metric so that 3 there is a marked value added in energy efficiency. 4 And so one of the things that we look at to establish 5 our baselines are those ENERGY STAR levels. So we are 6 constantly interchanging our efficiency levels with 7 ENERGY STAR. So what is considered an ENERGY STAR 8 level in the past now becomes our baseline. And they 9 look for new higher levels of efficiency in their 10 equipment to establish the ENERGY STAR levels. 11 So we did BVM, the first BVM rulemaking. So 12 one of the complaints from ENERGY STAR was we didn't 13 give them much room for Class A equipment. I said, 14 "Well, that's your job. Your job is to go find that 15 level so that you can set ENERGY STAR levels for Class 16 A type of equipment." 17 We worked with them with the test procedure 18 and other discussions in terms of how to get to that 19 level. And then they reestablished ENERGY STAR levels 20 for Class A kind of equipment. So now in this 21 rulemaking, we look at that ENERGY STAR level within 22 our rulemaking to see what is the next step.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 126 1 So I think both programs have separate 2 purposes, but they are intertwined in pushing each 3 other to the next level as the cycle goes. ENERGY STAR 4 has the advantage of not having a three-year process. 5 And it is voluntary because the purpose of ENERGY STAR 6 is to set levels beyond the baseline, which we are 7 regulated by legislation in terms of setting those 8 baselines. 9 So I am not seeing a real problem. I am just 10 saying things are happening at different paces, but 11 ENERGY STAR helps us set the baseline for this 12 rulemaking, for example. And we will move that 13 baseline up. ENERGY STAR then will take that baseline 14 and set another level. 15 So your label, the idea is for them to push 16 us by pushing the market and changing the baselines. 17 And then once we set that in legislation and then have 18 that enacted in terms of what the new baseline is in 19 law, they then will set another level for that. So in 20 terms of energy efficiency, that works very well. 21 I clearly understand what the manufacturers 22 and other parties are telling me here, that you want

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 127 1 the label. And the good news is in obtaining that 2 label, you have to produce more efficient equipment 3 because the ENERGY STAR level is always going to be 4 higher than a DOE level. So if we are doing our job, 5 we are pushing them and they are pushing us, they are 6 pushing by that nature the entire market to higher 7 efficiency levels on the equipment. 8 MS. PRESENT: I do want to clarify one thing 9 quickly. For the first beverage vending machine 10 rulemaking, we did use the ENERGY STAR level as the 11 baseline unit because the entire market was meeting it. 12 For this proposed modification, we are not suggesting 13 at this point to use the current ENERGY STAR level as 14 the baseline. We would be using the current DOE level 15 as the baseline. 16 MR. BROOKMAN: Yes, Jim? 17 MR. COLLINS: Jim Collins, AMS. I guess the 18 one big problem that we faced back last August, when 19 the current ruling went into effect, was the questions 20 from our customers of "Why did you just increase my 21 price hundreds of dollars?" There is nothing to show 22 for that. We didn't have anything to point to, any real

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 128 1 public splash, any label, anything that we could 2 justify that cost that was very public. We had to send 3 them into, you know, federal rules. And our customers 4 don't want that. But they did want an explanation as to 5 "Why did our prices go up like that?" 6 MR. BROOKMAN: Yes. 7 MR. COLLINS: And any assistance you could 8 give us along those lines would certainly be 9 appreciated. 10 ENERGY STAR, again, it's self-evident. It's 11 widely recognized. Everybody can see the label. 12 Everybody says, "Oh, it's ENERGY STAR. I'll pay the 13 extra bucks." But for these mandatory rules, and not 14 to argue that they are good and of benefit to the 15 nation, are hidden from the public. 16 MR. LLENZA: The only thing I could add to 17 that is if you didn't have a baseline, you wouldn't 18 have an ENERGY STAR program. So it's a Catch-22 in 19 that sense, you know, what comes first. But when we 20 set the baseline, then ENERGY STAR highers a target 21 level to be able to set beyond the baseline. 22 And, you know, we are not doing these rules

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 129 1 overnight. They take quite a bit of time. The first 2 rule was done in 2009. The standards became effective 3 in 2012. We're starting that process one more time. 4 They won't be in effect until 2019. So we're not 5 talking overnight. And, I mean, in the overall mission 6 that the Department has to conserve energy, this is 7 part of the process which we use. 8 So you could think of ENERGY STAR as the 9 tiered process in between, the setting/resetting of the 10 baseline to the current technology levels. And, you 11 know, I would think that six years, though, gives 12 plenty of time for the industry overall to catch up 13 with that. 14 MR. BROOKMAN: Ari? 15 MR. ALTMAN: Ari Altman from the General 16 Counsel's Office. I just wanted to follow up on kind 17 of two issues that have come up, the one being that in 18 some cases, 100 percent of products being sold are 19 ENERGY STAR, which seems to call into question the 20 value of ENERGY STAR. We're not setting ENERGY STAR 21 standards here today. This is not an ENERGY STAR 22 rulemaking. But I will say that there is some

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 130 1 precedent for that occurring with other appliances and 2 other products and that in a sense is a sign that 3 people are paying attention to ENERGY STAR. But, 4 again, this is not an ENERGY STAR rulemaking, but there 5 is precedent for that. And then ENERGY STAR needs to 6 take a look at that and do a new rulemaking. 7 On this other issue that you mentioned about 8 getting the word out about mandatory standards and the 9 lack of publicity, I think we should take that under 10 advisement. And perhaps the Department should do more 11 to publicize its efforts in this regard. We do send 12 out press releases, but these are not necessarily to 13 your customers. They would not necessarily receive 14 them. And perhaps we need to do a bit more on the 15 marketing side. Again, that is outside of this 16 rulemaking, but it is a good point to be considered. 17 But do consider also that ENERGY STAR is a 18 voluntary program. And you do get a star. You get 19 kind of a reward for complying. And so it has a built20 in incentive. And people like that. Our program is 21 mandatory. And so we don't award any kind of symbol or 22 emblem because you have to comply. That doesn't mean

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 131 1 that we couldn't do a better job getting the word out 2 as to why we're doing it and what the benefits are to 3 the nation as a whole. And we do calculate that. It's 4 obviously part of our rulemaking. And the benefits as 5 to each particular customer, there may be a net 6 positive or perhaps a negative, which is what you are 7 referring to. 8 But your comment is definitely worth 9 considering broadly at the Department. So thank you. 10 MR. BROOKMAN: Yes, Harvey? 11 MR. SACHS: This is Harvey Sachs. And this 12 is really a question to Charles. My memory is that DOE 13 since the prior rulemaking on BVMs has moved to doing a 14 press release, which for standards at time of 15 implementation, that basically says, "Hey, there's a 16 new standard. It's more stringent. And here is why it 17 is good for everybody." And if you all aren't doing 18 that, that would certainly seem to be an easy thing to 19 do to give a one-pager that you guys can link to that 20 would answer some of the customer questions or at least 21 take you all off the hook. You have to do it. 22 MR. LLENZA: This is Charles Llenza. Well,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 132 1 we did one back in 2009, but, you know, it is 2013. So 2 there is a little bit of loss in translation here over 3 time. And I think people sort of forget what we are 4 doing because, you know, it is a new time frame and we 5 are doing the rulemaking. 6 On the web page, there is some quick 7 capturing of the benefits. Okay? You could see how 8 many quads we are saving with the first rulemaking. We 9 could see some dollar benefits to the nation. So that 10 is the quick information. 11 In terms of the consumer, you get a better 12 product that is more efficient. That should lower the 13 cost of operating that product from the energy 14 standpoint of view. The first cost is more expensive. 15 The long- term energy cost of that product is less. 16 The problem is that that is a more sophisticated way of 17 looking at a product because most people are concerned 18 with the first cost is what you are telling me right 19 now. 20 So I think, to complement what Ari says, 21 maybe the Department should take better time, more time 22 to explain the cost of money over time and how that is

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 133 1 benefitting everybody, not just, you know, setting new 2 standards for the beverage vending machine industry. 3 MR. BROOKMAN: So have we addressed 12-1, 12- 4 2, and 12-3 sufficiently? I haven't heard anything 5 about pending regulations, cumulative regulatory burden 6 yet. 7 MS. PRESENT: We did some on 12-3. 8 MR. BROOKMAN: Just for example. Did you 9 read these? 10 MS. PRESENT: Yes. So a lot of this 11 discussion of E-STAR I think was centered around 12-3 - 12

- 13 MR. BROOKMAN: Yes. 14 MS. PRESENT: -- but certainly the small 15 business aspect. 16 MR. BROOKMAN: Any other additional comments 17 on these? 18 Okay. We're moving on. 19 MS. PRESENT: All right. Thank you. 20 MR. MORRIS: I have the privilege of talking 21 about what happens a year from now. As Charlie 22 mentioned this morning in his opening slides, we're

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 134 1 currently doing the preliminary analysis in the coming 2 months. After that process has gone through, we will 3 be doing the notice of proposed rulemaking. 4 I want to mention really quickly the 5 engineering analysis, LCC costs and payback period 6 analysis, and national impact analysis down below 7 there. As you can probably imagine, once we go through 8 this process of the preliminary analysis, we will have 9 the next public meeting and comment period, receive 10 responses to requests for comment, incorporate changes 11 that need to be made. And, essentially, we will be 12 redoing everything that we are working on now and 13 updating it for the NOPR phase. 14 So the customer subgroup analysis concerns 15 those in the population who may be significantly 16 affected by a new or amended standard. In practice, -- 17 this is probably too much information for now, but the 18 analysis is done by considering alternate inputs to the 19 LCC model, inputs that might be different for a 20 particular subgroup. The identified subgroups are then 21 compared to the general population to determine if they 22 have been disproportionately affected by a standard.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 135 1 So, regarding the customer subgroup analysis, 2 "Item 11-1: DOE seeks input on which customer 3 subgroups DOE should consider in the present 4 rulemaking. Examples of possible subgroups DOE could 5 consider appropriate for beverage vending machines are 6 manufacturing facilities that own their own BVM units, 7 which was the identified subgroup in the 2009 BVM final 8 rule analysis, and site owners that pay the utilities 9 but don't own or stock the equipment." 10 MR. BROOKMAN: 11-1, comments on 11-1? 11 Okay. 12 MR. MORRIS: We'll talk about the employment 13 impact analysis, which, again, all of these analyses 14 that we're talking about are done at the NOPR phase. 15 This differs from the manufacturer impact analysis. 16 Unlike the manufacturer impact analysis, the employment 17 impact analysis only addresses the jobs impact of a 18 standard on the general economy. That is, it 19 quantifies the jobs created or destroyed resulting from 20 the complex interactions of shifting expenditures among 21 goods and services and changing energy and equipment 22 costs. The Department plans to use the ImSET model to

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 136 1 evaluate these indirect employment impacts. 2 "Item 13-1: DOE requests feedback on this 3 approach to assessing employment impacts." Okay. 4 The utility impact analysis assesses the 5 impacts on domestic energy supply as a result of 6 standards. DOE plans to use NEMS, slightly modified 7 for this particular rulemaking, for modeling these 8 impacts, which include electricity sales and price, 9 generation, and capacity. 10 "Item 14-1: DOE seeks input on its proposed 11 use of NEMS-BT to conduct the utility impact analysis. 12 "14-2: Should DOE consider using methods 13 other than NEMS in the utility impact analysis?" 14 MR. BROOKMAN: Any thoughts on other 15 methodologies? 16 No. No comments. 17 MR. MORRIS: Okay. Easy enough. 18 We will talk about the emissions analysis and 19 monetization of emissions. So the emissions analysis 20 estimates the environmental impacts stemming from a 21 standard, including full fuel cycle emissions, carbon 22 and sulfur dioxide. Nitrogen oxide, methane nitrous

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 137 1 oxide, and mercury are all estimated. The savings of 2 those emissions are estimated. 3 The benefits of reduced emissions can be 4 monetized as well. DOE intends to use the most current 5 social cost of carbon values developed by interagency 6 reviews. The analysis will estimate the potential 7 monetary benefit of reduced carbon dioxide and nitrogen 8 oxide emissions resulting from the standard. 9 "Item 15-1: DOE seeks input on its approach 10 to conduct the emissions analysis for the equipment 11 covered by this rulemaking. 12 "Item 16-1: DOE requests comments on the 13 approach it plans to use for estimating monetary values 14 associated with the emissions reductions." 15 MR. BROOKMAN: Yes, Mark? 16 MR. MENZER: Yes. Mark Menzer with Intertek. 17 This is going back, actually, to the utility impact 18 analysis. Is any consideration given to smart grid19 ready equipment that might, you know, be able to react 20 in, say, peak energy from a smart grid signal? 21 MR. MORRIS: I'd have to talk to my NEMS 22 people to give that question justice.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 138 1 MR. BROOKMAN: Satish? 2 DR. BAPANAPALLI: This is Satish Bapanapalli, 3 PNNL. So mostly the utility impact analysis is not at 4 our level. Mostly it is based on some of the 5 interagency guidance. And this encompasses the entire 6 rulemaking process, not just particular to BVM. And so 7 this guidance may change. And, based on that, we will 8 be doing the analysis. So some of the factors that we 9 get from NEMS from some of the inputs that go into NEMS 10 will be determined as a policy matter, not -- and it 11 won't be specific to the rulemaking. So, based on that 12 as the policy changes in a couple of years, one year 13 when we start doing this analysis, we will implement 14 those changes. 15 MR. BROOKMAN: Yes, please, Mark? 16 MR. MENZER: So I take that as a no? It's 17 not considered currently? 18 DR. BAPANAPALLI: Yes, currently not. 19 MR. MENZER: Can it be considered elsewhere 20 in other impact analysis? Is there another appropriate 21 place? 22 MR. BROOKMAN: Charles Llenza?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 139 1 MR. LLENZA: This is Charles Llenza, 2 Department of Energy. Usually a smart grid-type 3 decision would be interagency-type decision, how to 4 treat those in terms of the modeling, et cetera. So 5 the problem that we have right now, there's a lot of 6 stuff that's being talked about, but not necessarily 7 being factored into some of the modeling at the moment. 8 MR. BROOKMAN: Yes? 9 MR. SACHS: Harvey Sachs. Mark, a short 10 answer would be that it's one of the differentiating 11 factors that ENERGY STAR can use. There is already 12 credit for smart grid or grid-ready equipment in some 13 of the consumer products. So if that were a factor 14 that could be of value to the customers of this 15 equipment, ENERGY STAR can incorporate that quickly. 16 MR. LLENZA: And then at some point, we would 17 make it the baseline. 18 MR. SACHS: You've got to put it into the 19 test procedure to do that. 20 MR. LLENZA: Well, that's why we're redoing 21 the test procedure at this moment. And we work with 22 ENERGY STAR when we do the test procedure, by the way.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 140 1 MR. BROOKMAN: Comments back to 15-1 and 16-1 2 on emissions analysis and the monetary values 3 associated with emissions reductions? Yes, Dipak? 4 MR. NEGANDHI: Dipak Negandhi, Royal Vendors. 5 I am not sure the comment I am making is specifically 6 related to emissions from energy use, but the fact is 7 that as the industry moves to non-HFC-based 8 refrigerants, like CO2, that is where the energy use 9 impact comes in. And I think DOE should take into 10 account that the country as a whole is going away from 11 HFCs and HCFCs and as the newer technologies that come 12 into play are not necessarily more energy-efficient. 13 Yes, there are some that are more energy-efficient, and 14 some are not. But there is an overall model that there 15 is a benefit from going to that. And the extra energy 16 that may be required for some refrigerants should be 17 part of the evaluation. 18 MR. MORRIS: Thank you. 19 MR. BROOKMAN: Yes? Okay. Nothing 20 additional. Okay. Thank you for that comment. 21 We are moving on to the next element. 22 MR. MORRIS: The last thing that I will be

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 141 1 discussing is the regulatory impact analysis, which 2 explores the potential for energy and monetary savings 3 for non-regulatory alternatives to a standard. In 4 addition to considering the impacts of any incentive 5 program or initiative to date, the future impact of 6 such programs will be considered. This is likely to be 7 accomplished -- again, this is probably more than you 8 need to know at this point, but likely to be 9 accomplished by modifying impacts or modifying inputs 10 to the LCC and/or NIA models to reflect capital cost 11 changes, market acceptance rates, and other impacts 12 from such programs. 13 It brings us to items 17-1 and 17-2. "17-1: 14 DOE is aware of the existing ENERGY STAR program for 15 the beverage vending machine industry covered under 16 this rulemaking. Are stakeholders aware of any other 17 such programs that should be examined as optional non18 regulatory approaches? 19 "17-2: Are there specific subgroups of end 20 users whom DOE should consider in its review of 21 potential adverse impacts from standards developed 22 under this rulemaking?"

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 142 1 MR. BROOKMAN: Mike? 2 MR. MAU: Yes. Mike Mau, Royal Vendors. I 3 think this goes back to some of what was mentioned 4 before of the purchasers of this equipment being mainly 5 Coca- Cola and PepsiCo. The equipment needs to meet 6 their specifications. Otherwise, it is not going to be 7 purchased. So there is the potential that something 8 gets to an energy efficiency level, but it is not going 9 to be able to meet pull-down requirements, say. Well, 10 that is not good. So maybe they need to be involved 11 for comment on that as well. 12 MR. LLENZA: This is Charles Llenza, the 13 Department of Energy. Well, you also could share those 14 specifications with us. You know, you can be the sort 15 of intermediary if Pepsi -- I'm sure that PepsiCo and 16 Coca- Cola are going to make comments, but I also think 17 that you could be proactive in providing "These are the 18 requirements that" -- you have a list of constant 19 requirements that you are being asked to meet. And 20 that would probably be something good that you could 21 share with the Department that, you know, where if it 22 conflicts with our standards or our test procedures,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 143 1 that that can be harmonized somehow. 2 MR. MAU: Mike Mau from Royal Vendors. I 3 want to be as proactive as possible, but there are 4 things like that that are confidential. It's not up to 5 us to disclose. It's their procedure, not ours. 6 MR. BROOKMAN: Right. Okay. 7 MR. LLENZA: Just to comment on any kind of 8 confidential information, we also can handle that. 9 Information that we could become aware of that we will 10 not disclose to other parties, but we can use that in 11 considering, in setting our analyses up, so just so you 12 guys know that. 13 MR. BROOKMAN: Yes, Ari? 14 MR. ALTMAN: Ari Altman from the General 15 Counsel's Office. This is a good point you are making, 16 and it is a valid concern. Keep in mind that our rules 17 regulate manufacturers, and we do not regulate your 18 customers. To the extent they want to comment, it is 19 voluntary. And I would encourage you to encourage your 20 customers to be involved in this rulemaking. We don't 21 have a lot of pull in terms of bringing them in. 22 Charles mentioned that it is likely they will comment,

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 144 1 but they don't have to and we don't regulate them. 2 But if there is information that you believe 3 is confidential that is their confidential information 4 and you cannot release it, you may want to mention to 5 your customers that you are involved in this rulemaking 6 and that their internal standards, which are not 7 regulatory standards, may be affected. And to the 8 extent we can take into consideration what their 9 particular internal standards are, we will, but we need 10 to know what they are. 11 MR. BROOKMAN: Okay. And, finally, on to 17- 12 2, are there specific subgroups of end users DOE should 13 consider in its review of potential adverse impacts of 14 standards? Any groups that you think come to mind? 15 No comments there. Okay. That is the last 16 of the slides. 17 MR. MORRIS: Yes, sir. 18 MR. BROOKMAN: As we promised this morning, 19 there is an opportunity now for anybody that wants to 20 to raise issues that weren't covered fully. Additional 21 issues that you wish to cover at this time? Yes, 22 Dipak?

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 145 1 MR. NEGANDHI: Dipak Negandhi, Royal Vendors. 2 Really, I want to thank the DOE for inviting us to 3 allow us to make our comments at this early stage, but 4 the comment was made earlier that the time window 5 allocated for responding to this broad range of 6 questions is very small for small manufacturers like 7 us. And I know Eric Dell from NAMA has already sent in 8 a letter requesting an extension of the timeline. And 9 I would as well request the same, if there is any way 10 possible, to get a 90-day extension, which will allow 11 us to more comprehensively respond to the questions 12 that have been asked. 13 MR. BROOKMAN: Rather than 60 days, 90 days? 14 MR. NEGANDHI: I think the letter from NAMA 15 was requesting a 90-day extension. 16 MR. BROOKMAN: In addition? Ninety in 17 addition to the 60? 18 MR. NEGANDHI: Well, I think their -- 19 MR. LLENZA: Forty-five. 20 MR. NEGANDHI: -- current date is 45 days; 21 right? 22 MR. LLENZA: Forty-five, right.

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 146 1 MR. BROOKMAN: Okay. 2 MR. NEGANDHI: Right. 3 MR. BROOKMAN: Gotcha. Thank you. 4 MR. NEGANDHI: So a 90-day extension was 5 requested. 6 MR. LLENZA: It's on top of the 45. 7 MR. BROOKMAN: Okay. 8 MR. LLENZA: Okay. 9 MR. BROOKMAN: Thank you. 10 Additional comments here as we move towards 11 closure? So your last comment, Dipak, causes me to 12 think that NAMA is engaged. They are tracking what is 13 going on here; correct? 14 MR. NEGANDHI: Yes, they are. Unfortunately, 15 as was mentioned, -- 16 MR. BROOKMAN: Yes. 17 MR. NEGANDHI: -- Eric had a personal 18 situation today. 19 MR. BROOKMAN: Right. I just wanted to make 20 sure they were on the same page here. 21 MR. NEGANDHI: Yes. 22 MR. BROOKMAN: Okay. So, then, my thanks to

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 147 1 all of you, a very productive meeting, very beginnings 2 of this process but good start. And back to Charles 3 Llenza. 4 MR. LLENZA: Yes. I want to thank everybody 5 for attending who have. I want to encourage that you 6 get the word out that those parties that could not make 7 it to the meeting or are not on our webinar, that they 8 please provide us comments. 9 We will take your comment on the extension 10 period under advisement. I will bring it up with my 11 management. 12 And I do think that one thing to keep in 13 mind, this is a partnership between us and you people 14 that are attending and parties of interest here. The 15 Department always strives to find an economically 16 justified and technologically feasible solution to 17 provide these standards. So the more the industry and 18 everybody weighs in with their comments in terms of 19 their concerns because that is part of what we tried to 20 deal with here, in addition to information the 21 Department doesn't necessarily have or has not 22 currently displayed through the website or in the

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Energy Conservation Standard Framework Public Meeting 06-20-2013

(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 148 1 technical support documents in the past, et cetera, 2 that would be greatly appreciated because we do strive 3 to get the story right. And we're all in this 4 together. That is the way I see it. 5 So one last comment. This slide is just 6 showing you again how to submit the comments. Docket 7 number and RIN number are key. And then also you could 8 submit things electronically through the email address 9 that is on here. And, then again, there are other 10 methods here. 11 The comment period closes July 19. You 12 should hear back with a certain amount of -- in the 13 next couple of weeks in terms of an extension if that 14 is going to be happening. 15 MR. ALTMAN: This Ari Altman from GC's 16 Office. Charles, can you just clarify for everyone 17 attending how they would hear about an extension? Will 18 it be published in the Federal Register? 19 MR. LLENZA: Right. So what a typical 20 extension and comment period would entail would be a 21 short notice that we would provide that goes in and is 22 published in the Federal Register. We will send out an

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 149 1 email blast to all of the parties in our database, 2 notifying that the comment period has been extended and 3 you will get a new date, whatever time frame it is that 4 we have decided on. Because I have been personally 5 involved with several extensions, I think the 6 Department has been very receptive to that. 7 I know that we do have time constraints in 8 our schedule. That is one thing to keep in mind. I 9 think we are at a point in time in the rulemaking, that 10 it is early enough that we have a little bit of a 11 luxury of convenience to be able to do extensions, but 12 I do want to keep reminding people on time that we do 13 have a deadline. And within that deadline, we will try 14 to accommodate the needs of the parties of interest 15 here. 16 MR. BROOKMAN: Okay. 17 MR. LLENZA: So thank you for coming. 18 (Whereupon, at 12:19 p.m., the Energy 19 Conservation Standard Framework Public 20 Meeting, Refrigerated Beverage Vending 21 Machines was concluded.) 22

### Capital Reporting Company Energy Conservation Standard Framework Public Meeting 06-20-2013

1 CERTIFICATE OF COURT REPORTER 2 I, CHRISTINE ALLEN, the Court Reporter before 3 whom the foregoing proceeding was taken, do hereby 4 certify that the proceeding was recorded by me; that 5 the proceeding was thereafter reduced to typewriting 6 under my direction; that said transcript is a true and 7 accurate record of the proceeding; that I am neither 8 related to nor employed by any of the parties to this 9 proceeding; and, further, that I have no financial 10 interest in this proceeding. 11 12 13 14 15 16 17 18 19 20 21 22 

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### Capital Reporting Company Energy Conservation Standard Framework Public Meeting 06-20-2013

1 CERTIFICATE OF TRANSCRIPTION 2 I, SARAH VEACH, hereby certify that I am not 3 the Court Reporter who reported the following 4 proceeding and that I have typed the transcript of this 5 proceeding using the Court Reporter's notes and 6 recordings. The foregoing/attached transcript is a 7 true, correct and complete transcription of said 8 proceeding. 9 10 11 12 13 Date 14 15 16 17 18 19 20 21 22

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 6 6 103:16 60 145:13,17 60-day19:1,3 6-1 91:6 6291(40 22:9 6295(m)(1 14:11 65 87:1 68 4:11 7 7 42:16,17 43:6,9 103:16 7-1 86:6 7-2 86:13 7-3 86:17 90:12 7-4 86:19 90:13 75 28:6 8 8 103:16 8-1 98:16 99:9 102:10 8-10 109:7 110:2 111:1 8-2 98:19 99:10 102:10 8-3 98:22 99:10 102:19,20,22 84 4:12 8-4 103:17 105:9,13 108:19 8-5 104:1 108:19 8-6 104:5 108:19 8-7 104:8 108:19 8-8 108:22 110:2 111:1 8-9 109:4 110:2 111:1 8E-089 1:9 9 9 113:12 9:00 1:13 90 27:2 28:9 145:13 90-day145:10,15 146:4 90-degree25:8,10 28:7 9-1 112:12 113:11 9-2 112:17 113:11 9-3 112:22 113:12 116:4 9-4 113:4,13 116:5 96 4:14 A a.m1:13 a/c 10:21 11:4 a/v10:2 able 10:1 15:20 33:8 51:4 77:5 128:21 137:19 142:9 149:11 absence 112:7 120:9 absolute 55:1 acceptable 48:17 57:6 68:10 acceptance 53:2 56:15 82:15 141:11

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 adopted 24:8 adopting 62:8 adoption 26:20 71:13 advanced 106:16 advantage 121:8 126:4 adverse 141:21 144:13 advisement130:10 147:10 affect80:10 81:2 109:18 123:20 affected 122:7 134:16,22 144:7 affecting 46:1 affiliation 5:21 after-market 92:14 Afterwards 121:20 agenda 4:3 7:14,15 11:10 ago 107:11 112:5 AHAM24:11 78:21 ahead 26:18 33:21 43:2 45:21 47:14 59:19 63:14 77:8 78:3 83:4 102:11 106:6 114:5 AHRI 52:16 air9:19 11:2 align 49:7 Allen 1:19 150:2,15 allocated 145:5 allow 53:17 145:3,10 allowable 53:10 allowed 21:2 67:16 allowing 45:4 allows 55:20 alluded 97:20 aloud 26:19 already7:14 9:10 13:4 97:20 139:11 145:7 alternate 81:13 134:18 alternative 47:10 58:14 74:14 80:18 81:9 82:19 alternatives 103:2 141:3 Altman 2:6 8:21 62:22 64:10,15 95:7 96:4 129:15 143:14 148:15 am7:13 16:10 23:19,22 24:1 26:18 28:12 29:15 31:20 32:8 42:18 44:14 57:12,20 60:17 64:12 82:4 84:6 88:7 91:11 99:19 106:17 117:16 124:21 126:9 140:5 150:7 151:2 ambient25:9,10 95:15,19 amenable 79:15 amend13:21 15:19 amended 13:18

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 answers 103:11 anticipate 104:20 anybody 8:13 144:19 anyone 7:16 33:17 102:20 anyone's 7:11 anything 10:17 33:16 42:16 44:8 57:11 61:15 124:15 127:22 128:1 133:4 appliances 130:1 applicability 34:11 66:18 applicable 59:6 79:6 82:9 application 25:14 29:19 82:5 applications 92:10 applied 32:15 70:1 85:19 applies 68:2 apply 66:15 71:17 applying73:14 appreciate 33:9 94:4,9 appreciated 128:9 148:2 appreciates 112:1 appreciation 85:17 approach 16:18 53:7 71:4 73:18,22 98:11 102:11 136:3 137:9,13 approaches 11:12 55:9 98:17,20 141:18 appropriate 47:6 48:14 71:21 80:4 104:8 108:22 122:21 135:5 138:20 appropriately 85:13 approved 50:20 81:12,18 area28:13 87:5 areas 114:7 aren't62:16 93:15 95:9 101:14 118:10 131:17 argue 124:9 128:14 Ari2:6 8:19,21 62:21,22 64:10 95:4,6,7 96:3 129:14,15 132:20 143:13,14 148:15 arise 11:19 Arshak3:11 10:6 ASHRAE 31:1 49:16 50:11,14 52:13,15,17 55:19 94:17 Aside 55:3 aspect133:15 ASRAC 53:1 assembled 58:20 72:1 assess 121:11 122:14 assesses 96:11 118:22 136:4 assessing 104:9 136:3 assessment4:9 8:3 35:22 36:2,11,14 57:15 65:1 66:6,20 67:1 68:14 69:9 asset110:11,12,13 116:16 assets 114:1 115:16 assist25:22 assistance 128:7 associated 44:22 97:6 101:22 117:11 137:14 140:3 association 30:15 37:6 88:1 assuming 55:1 astute 79:2 attempt 80:14 attendance 7:2 attending 147:5,14 148:17 attention 124:19 130:3 Attorney3:10 audio 10:18 August21:6 23:12 127:18 authority4:6 7:20 20:17 21:3,14 22:3 44:17 45:2 100:17 Automated2:10 6:5 60:18 availability71:15

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### Capital Reporting Company

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### Capital Reporting Company

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 34:2,10,14 38:3,18,21 40:14,17 47:3,9,16,20 48:11 51:19 57:22 58:1,12,16 59:2,8 60:18 61:16 62:1 64:13 65:8,9 66:13,14 73:17 76:4 78:20 79:14 85:7 86:6,19 88:11,12 91:6 94:15 98:16,19 104:13 105:10 108:15 109:4 110:15 112:12 113:6 117:7 120:3,7,13 122:20,21 123:3,13 124:4 131:8 134:9,10 140:5,20 142:11 143:7,18,22 145:4 146:11 147:9 148:5,11,20 149:2 commenting 91:12 comments 4:21 8:14 9:15 11:22 12:12 16:18 18:4,8,13 19:6 27:15,16 29:11 30:18,21 33:9 34:1 35:7,12,14 36:12 45:7 48:20 52:9,13 54:19 58:8 61:14 64:19 65:21 66:17 72:12 73:6 74:1 76:6 77:6,21 79:18,20 81:6 83:2 90:12 94:12 99:9 102:19 103:13 110:22 112:11 113:22 116:4 120:2 123:7 133:16 135:10 136:16 137:12 140:1 142:16 144:15 145:3 146:10 147:8,18 148:6 commercial53:2 67:14 68:8 99:2 117:20 committee42:1 common 48:5 commonly 95:15 community 42:11 companies 38:6 103:3 108:1,4 110:12 115:14 company1:20 107:1 comparable 60:22 compare18:7 compared134:21 comparison 103:10 compelled 72:18 competing87:16 competitive61:20 63:20 complaints 125:12 complement 132:20 complete9:12 151:7 completely107:7 complex67:1 135:20 compliance 20:7 114:8 comply130:22 complying 130:19 component69:15 70:8 71:14 92:14,15 111:18 112:4 components 63:17,21 65:18 70:3,9,12,17 72:1 composed39:9 comprehensively 145:11 compressor45:12 53:13 59:16 60:2,5,18 61:1 63:19 64:1,5 70:7 95:21 103:22 compressors 44:21 45:9 60:19 62:18 conceptual 72:3 concern 72:2 100:19 143:16 concerned 31:16 51:9 53:5 122:9 132:17 concerns 12:20 111:8 121:19 134:14 147:19 concluded 149:21 condense 7:6 condenser 60:6 condition 25:4,9,11 conditioner 11:2 conditions 41:7 52:16 70:6 71:1 conduct121:13,22 136:11 137:10 conducted 21:4 conducting 121:8 conducts 121:5 122:11 confidential 143:4,8 144:3 confines 30:22 confirm 55:6 88:8 conflicts 142:22 conform 32:3 confusing 31:5 consensus 31:2 conservation 1:3 5:5 11:13 13:17,19 15:9,18,21 16:1,5,11 20:1,3,22 22:1,2,5 46:3 65:7,11 80:7 109:5 114:22 120:15 121:11 123:5 149:19 conserve 129:6 consider 14:21 34:8,15 35:8 56:9 74:6,10 80:6,22 122:22 123:8 130:17 135:3,5 136:12 141:20 144:13 consideration 9:8 25:18 34:12 74:11 101:12 123:17 137:18

### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 98:16,19,22 103:17 104:5,8 108:22 109:4,11,14 111:21 112:12,17,22 113:4 114:14 115:5,18 116:1 120:3,7,13 121:4,7,13,20 122:9,10,21,22 123:3,7,15 124:4 127:4,14 131:12 135:2,3,4 136:2,6,10,12 137:4,9,12 140:9 141:14,20 144:12 145:2 DOE's 11:12 49:7 72:3 80:8 122:18 dollar 132:9 dollars 127:21 domestic36:20 61:4 68:6 136:5 done 7:14 10:17 21:12 86:1 98:9 108:14 129:2 134:18 135:14 Donuts 83:14 door38:11 Doug 5:8 91:21 Douglas 2:3 4:2,4,21 downstream69:3 DR 6:15 90:1 138:2,18 draft18:11 20:5 dragging 108:2 drink94:11 drive 2:15 3:7 56:14 118:13 123:15 driven 62:14 103:2 108:3 115:11 drives 56:16 driving 115:14 116:2,18 dual 24:9 due 46:9 70:8 76:7 89:17 113:5 Dunkin 83:14 during 27:11 96:22 97:12 103:20 106:7 119:7 121:15 dynamic 71:11 72:4,16 dynamics 71:13 E earlier10:22 30:8 81:6,11 82:16 90:21 97:20 104:16 105:9 113:22 117:7 119:9 121:4 123:14 145:4 early62:6 145:3 149:10 easily107:12 easy131:18 136:17 ECM-type 61:18 economic74:4 84:8,13 96:12 111:8,11 119:2,22 economically 14:2,22 51:22 147:15 economics 95:4 96:8 economy3:6 6:3 117:4 135:18 Edison 2:12 Edwards 12:16 effect82:10 109:14 127:19 129:4 effective 20:8,9,12 23:12 129:2 effectively 119:21 effects 60:2 72:5,16,17 80:6 efficiencies 75:4 112:6,9 efficiency14:1 36:3,7,9,22 41:9 44:22 54:1 57:16 58:7 64:3 65:3,9 68:18 71:6 74:8 80:3,11 81:3,10 82:2 85:15,20 93:2,4 96:13 97:1 100:3,6 103:19 105:11,15 112:15 119:14 122:7 125:3,6,9 126:20 127:7 142:8 efficiency-level 97:19 efficient3:6 6:3 7:8 59:15 62:17 70:12 89:21 93:1,6 97:4 98:1,2 104:7 114:10 124:16 127:2 132:12 effort49:7 efforts 130:11 EIA102:12,15 eight17:9 either21:10 23:5 44:17 45:2 88:11 92:10 95:13 Elaina 3:3 4:7,10,11,19 6:17 23:20,22 49:15 90:21 97:20 121:1 electricity93:5 98:14 136:8 electronic 12:13 electronically 148:8 element 140:21 elements 91:15,18 92:3 elevated 89:14 elevators 83:12,13 elicit38:5 elimination 25:10 27:1 else 28:20 33:17 44:8 57:11 61:15 83:15 102:16 elsewhere 27:20 138:19 email12:13 148:8 149:1 emblem130:22 Emily2:17 6:21 9:5 10:5 111:3

### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 76:21 78:4 80:17,21 112:22 122:20 123:3,7 135:2 136:2,10 137:9,12 items 35:14 39:3,4,7,9 41:20 44:1 47:1,22 48:2,4,6,8 63:4 78:13 95:13 102:10 110:2,3 118:7 141:13 it's 10:15,19,21 11:4 13:1,3 33:2 38:12,13 50:9,18 54:18 56:22 59:21,22 60:13 62:14 63:1 75:13 88:9 128:10,12,18 131:3,16 138:16 139:10 143:4,5 146:6 J James 2:13 Jenkins 2:13 jest94:8 Jim2:10,18 6:5,7 29:12,13 30:3,7 37:7,8 40:19,20 43:4,12,13,14 45:7 51:13,14 54:21 55:12 56:6,7,22 57:7 75:8,9 77:9,10 78:9,10 87:3,4 88:14,15 91:8,9 92:9,17,18 94:7 95:14 101:9,10 106:19,20 108:10 109:22 110:1 113:15,16 114:6 115:7,8,21 116:7,12 117:22 118:1 123:14 127:16,17 Jim's 60:18 94:14 job 61:8 125:14 127:4 131:1 jobs 135:17,19 John 5:17 joined 10:6,9 joining 6:19,20,21 83:22 jointing 83:21 July12:22 76:4 148:11 June 1:12 5:7 13:4 16:20 justice 137:22 justified 14:2 15:1 147:16 justify 45:22 128:2 K key61:3 71:22 148:7 kiosk118:12 kits 120:10 knowledgeable 28:13 112:2 known 107:9 L label126:15 127:1,2 128:1,11 Laboratories 3:4,12 Laboratory2:9,21 4:13 6:14,16 84:7

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### Capital Reporting Company

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 90:18 96:9,14,15 97:7 99:13,15 111:14 119:4 lifetime 96:17,22 97:12,16 99:16 109:11,13 120:8 lifetimes 109:1,5,21 light 7:1 lighting 26:3,5 lights 70:9 likely 106:14 113:4 141:6,8 143:22 limited 37:12 115:16 limits 13:3 Linda 3:10 10:7 line 50:17 52:15 79:9 111:5 lines 101:5 115:1 128:8 link16:7 131:19 liquefying 94:10 list10:4 16:22 17:2 58:3 61:15 63:1,2 142:18 listed 17:20 57:17 66:19 literally82:18 123:15 little 12:2 13:15 19:12 20:17 40:7 60:21 69:18 89:17 95:21 96:20 115:1 132:2 149:10 Llenza 2:16 4:5,6 5:11,12 7:20 8:18 9:2,6 10:15,16,20 11:7,8,9 13:8,14 29:3,4 33:2,3 53:19,20 61:13 100:10,11,16 114:18,19 124:20 128:16 131:22 138:22 139:1,16,20 142:12 143:7 145:19,22 146:6,8 147:3,4 148:19 149:17 load 41:10 44:22 70:8 94:1 lobby 108:3 location 90:6 116:15 locations 115:16 116:21 long 63:2 67:20 132:15 longer118:4 124:12,14 longest69:21 loophole 31:17 32:1 lose 54:4 loss 132:2 lot29:8 36:12 39:10 55:18 56:16,20 62:13,16 78:13 83:3 93:21 99:22 107:22 114:16 121:17 133:10 139:5 143:21 lots 33:9 low 34:3,8 59:2 lower 24:10 53:5,6 81:16 104:19 132:12 lowest 25:13 65:3 lowest-energy 103:8 low-power26:14 27:7,11 34:4,5 35:9 59:3 64:18 luck111:3 lunch 8:4 73:4 lunchtime 73:1 luxury 149:11 M machine 5:13 11:14 22:15,17,18,19 23:3 26:8 29:21 31:19 32:8 33:15 38:11 43:10,22 46:7,17,18,19 47:17 48:7 55:2,7,19 57:5 65:13 68:3 78:14 93:8,11,20 94:10 95:18,19 103:21 107:14 109:17 118:10,11 127:9 133:2 141:15 machines 1:5 5:6 9:18 13:21 14:15 21:3 22:8,14,15,21 23:11,15 24:6,13 25:15 26:9,21 27:21 28:9 29:10,18 34:5,13 36:5 38:1,10,19,22 39:3,4,6,9

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### Capital Reporting Company

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### Capital Reporting Company

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 meeting1:4 5:5,13,14,16 7:6,22 9:13 11:11 14:5 17:10,19 19:15,16,17,20 20:5 29:5 32:13 76:2 127:11 134:9 147:1,7 149:20 meetings 18:22 19:13 84:1 meets23:8 115:20 Meg3:8 melting95:20 member38:6 members 42:10 memory131:12 mention 134:4 144:4 mentioned 24:5 35:20 55:5 62:11 70:10 72:17 73:12 81:5 82:16 109:3 111:21 112:5 116:7 118:17 119:9 121:4 130:7 133:22 142:3 143:22 146:15 Menzer2:20 10:12 137:16 138:16,19 merchandise 23:1 42:21 merchandisers 43:7 Merchandising 2:10,18 6:6,8 29:14,20 56:8 87:5 91:10 101:11 106:21 108:11 110:1 113:17 115:8 116:12 118:1 mercury 137:1 messages 12:18 met 120:4 methane136:22 method24:21 32:18 36:3 52:15 53:14 55:19 121:13 methodologies 33:6 104:9 136:15 methodology33:5 69:7 methods 31:5 79:15 107:2 112:22 113:2 136:12 148:10 metric24:13 125:2 metrics4:7 8:2 20:2 23:21 24:2 34:1 56:12 micro 118:9 microphone 6:1 40:7 50:6 94:5 microphones 9:10 mid-afternoon 8:7 middle 42:5 108:3 midmorning7:21 Mike 2:19 6:9 33:12,14 48:15 59:11,12 62:9,10 66:21 68:1 94:13,15 142:1,2 143:2

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### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 33:16 77:12 115:19 127:2 produced 45:9 84:16 91:14,17 115:12 producing92:2 116:16 product 25:14,16,19 26:1 27:4 49:7 56:12,13,15 66:9 87:2 115:1 124:9 132:12,13,15,17 production 69:11,13 73:15 productive 147:1 products 20:21 21:12 28:16 31:14 32:2,11 38:17 40:17 45:14 53:2 56:16 60:22 61:5 115:12,22 129:18 130:2 139:13 product-specific 122:17 profit 85:17 89:4 profits 116:18 program20:22 37:14 114:14,15 115:2 122:19 128:18 130:18,20 141:5,14 programs 114:20 126:1 141:6,12,17 Project 2:16 projected98:3 119:15,16 projecting 103:4 113:1 projections 102:16 prolong 114:2 117:9 promised 13:9 144:18 propane 81:17 82:3 property63:10 64:5 proportion 37:2 proposal 33:5 34:15 86:17 88:13 proposed 15:12,14 16:18 18:11 19:4,5 20:4 73:18 98:17,19 127:12 134:3 136:10 proposing18:16 proprietary 58:4,13 62:5,6,15,17,20 63:3,9,18,19 64:2 74:3,5,6,9,16 protect41:5 protected63:10,22 74:19 provide 17:4 19:2 20:4 29:16 56:12,20 70:19 76:7 87:6,17 88:5 147:8,17 148:21 provided 14:9 provides 11:18 16:13,16 53:14 76:4 providing18:18 142:17 provision 21:8,20 26:13 31:22 provisions 20:20 21:13 22:1,4 public1:4 2:3 5:5,9,13 8:13 11:11 14:10 18:3,7,22 19:14,16,17,19 20:5 69:14 76:2 121:14 128:1,2,15 134:9 149:19 publication 20:9 24:22 publicity130:9 publicize130:11 publicly122:1 publish 17:22 published 24:7 71:12 148:18,22 publishes 42:1 pull 41:9 44:1 143:21 pull-down 41:14 44:15,21 142:9 purchase 84:17 85:14 89:10 96:16 97:9,13 purchased 62:19 117:10 142:7 purchaser 102:1 purchasers 56:10 101:13 103:3 142:4

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 65:16 67:18 75:14 94:7 95:6 99:18 102:21 103:4,13 105:13 106:4,22 114:16 116:6 117:16 129:19 131:12 137:22 questions 10:8 12:10,20 17:1,3,5 35:10 44:6 108:8 123:18 127:19 131:20 145:6,11 quick132:6,10 quickly8:8 75:14 83:15 127:9 134:4 139:15 quiet7:9 60:12 quite 32:13 36:11 129:1 quoted 15:5 R R&D 73:16 raise 9:21 58:4 144:20 raised 108:8 ramifications 97:22 range 26:3 52:1,3,8 53:16 55:11 57:18 67:17 82:3 145:5 ranges 53:10 rant72:6 rapid 44:21 rarely52:17 rated 39:7 rates 97:15 98:20 99:4,7 101:8 102:8,12 112:18 119:9 141:11 rather50:21 71:16 72:1 78:17 102:14 104:19 106:11 117:20 145:13 rating 71:1 rationalize 116:15 ratios 54:1,10 react137:19 reading 9:2 ready31:11 137:19 real94:8 126:9 127:22 really12:18 31:13 38:4 39:15 45:15 51:19 59:13,15 63:9,11 91:21 92:6 93:15,16 94:3,22 100:17 102:22 103:5 110:10 118:4 131:12 134:4 145:2 reason 30:15 76:3 87:7 89:2,6,7 93:1 reasonable 52:8 rebuilding 120:8 rebuilt 120:4 rebuilt/ refurbished 109:9 recall43:10 64:8 106:9 receive130:13 134:9 received 7:12 18:12 recent67:16 recently107:4 receptive149:6 recess 83:19 recognition 114:8 recognized 38:9 128:11 recognizes 98:22 recommendations 17:17 58:9 recommends 66:16 reconcile 79:4 record9:11 10:11 14:10 150:7 recorded 150:4 recordings 151:6 recover97:3 redoing 134:12 139:20 reduce 53:13 reduced 137:3,7 150:5 reducing 41:6 reductions 137:14 140:3 reemphasize 123:13 reestablished 125:19 refer12:9 13:18 118:9 reference 12:14

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 105:19,20 109:11,12,16 114:1 117:8 120:7,10 refurbishments 109:15 Regal63:19 regard 130:11 regarding 25:8 26:20 27:3,10 47:9 85:2,8 112:20 135:1 regards 25:19 56:17 101:16 112:5 114:2 116:13,19 region 98:10 Register14:10 148:18,22 regular88:2 regulate 143:17 144:1 regulated 45:4 126:7 regulations 67:19 122:17,18,19 123:8,20 133:5 regulatory36:8 59:22 80:5,7,10,22 122:11,15 123:9,19 133:5 141:1,18 144:7 reissue 14:14 related 37:12,17 77:15 82:14 112:13 140:6 150:8 relation 104:14 relations 54:11 relationship 68:17 71:5 124:22 relationships 54:10 relative 27:20 85:9 86:9 112:20 relatively61:20 82:2 90:17 release 131:14 144:4 released 17:12 releases 130:12 relevant38:4 78:8 86:20 103:13 106:12 111:22 relieving 107:17 remaining 66:10 116:11 remanufacture 114:1 117:8 remanufactured 100:18 remanufacturing 100:1 105:21 remark 55:14 remarks 4:3,22 5:11 7:17 13:10 remember23:13 remind56:9 reminding 88:22 149:12 removed58:3 rent90:6 repair97:11 98:1 104:6,10 105:2 repaired 106:14 repairing 107:7 repairs 103:19 104:3,4 105:11,14 107:3 repeatedly71:11 replaced 106:15 107:15 replaces 37:2 replacing 107:8 reported 1:19 151:3 Reporter10:19 150:1,2,15 151:3 Reporter's 151:5 Reporting 1:20 represent65:2 68:5 76:14 representative 76:11,13,15,22 77:11 78:8 112:18 represented 30:4 37:21 38:1 43:17 76:18 request12:3 57:21 65:8 66:13 72:11 86:5 91:5 98:5 120:2 122:20 145:9 requested 146:5 requesting 145:8,15 requests 24:4,18 26:18,19,22 27:3,6,14 34:2,10,14 36:12 38:18,21 39:2 47:20 48:10 54:19 56:15 58:1,8,12,16

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(866) 448 - DEPO www.CapitalReportingCompany.com © 2013 SEC 121:15 second 25:3 33:22 84:21 97:10 119:1 section 23:18 24:2,11 57:22 66:20 81:2,3 sectors 99:2 seeing 18:9 61:18 81:22 117:17 118:8 126:9 seek 80:3 seeks 36:13,19 37:1 47:3,9,16 65:9,17 70:15 73:17 98:16,19 103:17 104:5,8 108:22 109:4,12,14 112:17,22 113:4 120:3,7,13 122:21 123:3 135:2 136:10 137:9 seem28:22 45:3 68:20 131:18 seemed54:17 seems 28:14 67:18 68:9 102:10 103:11 113:10 120:16 129:19 seen 49:5 77:14 select65:9 selection 47:2 55:10 selects 65:4,6 76:11 self-evident 128:10 self-service 118:12,13 sell29:10 36:16 39:4,6,9 41:17 selling 68:17 70:2 71:5 73:13,19,21 84:15 send 12:15,17 128:2 130:11 148:22 sense 54:8 88:14 114:16 128:19 130:2 sensible 52:2 sensors 34:6 sent145:7 separate 15:15 38:16 46:2,14 114:20 126:1 separately44:18 sequence 8:1 serious 101:4 service 28:2 29:1 66:8 104:21 107:15 117:18,19 118:3,7 serviced 106:11 services 108:16 135:21 servicing 108:8 116:17 sets 16:14 20:19 116:1 setting 14:22 126:7 129:20 133:1 143:11 setting/resetting 129:9 settings 26:4,6 settles 105:8 setup 81:11 seven 14:21 15:2,4 21:21 24:16,19 119:10 seventh 26:12 several45:10 98:15 112:5 113:19 116:8 149:5 shaking64:7 share 9:19 120:3 142:13,21 shares 97:19 112:15 shelf 38:13 shift 53:3 77:14 107:4 117:17 shifting72:17 135:20 ship 39:5 92:19 shipment80:19 113:14 shipments 4:16 8:8 36:6,20 45:13 81:2 86:10 97:21 111:12,16,17,19 112:1,4,14 113:3,5,8 116:7 118:18 119:4,15,16 shipped 35:2 37:2 45:10 95:16 111:20 shop 83:10,14 106:11 107:10,16

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### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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### Capital Reporting Company

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