DEPARTMENT OF JUSTICE

Antitrust Division

Main Justice Building

950 Pennsylvania Avenue, N.W.

Washington, D.C. 2053 0-0001

(202) 514-2401 / (202) 616-2645 (Fax)

E-mail: antitrust@usdoj.gov

Web site: http://www.usdoj.gov/atr

September 6, 2007

FACSIMILE TRANSMITTAL AND FIRST CLASS MAIL

Warren Belmar, Esq.

Deputy General Counsel for Energy Policy

U.S. Department of Energy

Washington, D.C. 20585

Dear Deputy General Counsel Belmar:

I am responding to your August 7, 2007 letter seeking the views of the Attorney General

about the potential impact on competition of the proposed final rule regarding energy

conservation standards for liquid-immersed and medium-voltage, dry-type distribution

transformers ("distribution transformers"). The Energy Policy and Conservation Act ("EPCA")

authorizes the Department of Energy ("DOE") to establish energy conservation standards for a

number of appliances where DOE determines that those standards would be technologically

feasible, economically justified, and result in significant energy savings.

Your request was submitted pursuant to Section 325(o)(2)(B)(I) of the Energy Policy and

Conservation Act, 42 U.S.C. § 6291, 6295 ("EPCA"), which states that, before the Secretary of

Energy may prescribe a new or amended energy conservation standard, the Secretary shall ask the

Attorney General to make a determination of "the impact of any lessening of competition ... that

is likely to result from the imposition of the standard." The Attorney General's responsibility for

responding to requests from other departments about the effect of a program on competition has

been delegated to the Assistant Attorney General for the Antitrust Division in 28 CFR § 0.40(g).

In conducting its analysis the Antitrust Division examines whether a standard may lessen

competition, for example, by placing certain manufacturers of a product at an unjustified

competitive disadvantage compared to other manufacturers, or by inducing avoidable

inefficiencies in production or distribution of particular products. In addition to harming

consumers directly through higher prices, these effects could undercut the ultimate goals of the

legislation.

Along with your request, you sent us the draft final rule and a number of other documents

relating to distribution transformers, including the comments that had been submitted to DOE in

response to the Notice of Proposed Rulemaking ("NOPR"), the Notice of Data Availability

 EE-RM/STD-00-550 COMMENT 192

DEPARTMENT OF JUSTICE 

Antitrust Division 

Main Justice Building 

950 Pennsylvania Avenue, N.W. 

Washington, D.C. 20530-0001 

(202) 514-24011 (202) 616-2645 (Fax) 

E-mail: antitrust@usdoj.gov 

Web site: http://www.usdoj.gov/atr 

September 6, 2007 

FACSIMILE TRANSMITTAL AND FIRST CLASS MAIL " 

Warren Belmar, Esq. 

Deputy General Counsel for Energy Policy 

U.S. Department of Energy 

Washington, D.C. 20585 

Dear Deputy General Counsel Belmru': 

I am responding to yOl.n- August 7, 2007 letter seeking the views of the Attorney General 

about the potential impact on competition of the proposed final rule regarding energy 

conservation standards for liquid-immersed and medium-voltage, dry-type distribution 

transformers ("distribution transformers"). The Energy Policy and Conservation Act ("EPCA") 

authorizes the Department of Energy ("DOE") to establish energy conservation standards for a 

number of appliances where DOE determines that those standards would be technologically 

feasible, economically justified, and result in significant energy savings. 

Your request was submitted pursuant to Section 325(0)(2)(B)(I) of the Energy Policy and 

Conservation Act, 42 U.S.C. § 6291,6295 ("EPCA"), which states that, before the Secretary of 

Energy may prescribe a new or amended energy conservation standard, the Secretary shall ask the 

Attorney General to make a determination of "the impact of any lessening of competition ... that 

is likely to result from the imposition of the standard." The Attorney General's responsibility for 

responding to requests from other departments about the effect of a program on competition has 

been delegated to the Assistant Attorney General for the Antitrust Division in 28 CFR § 0.40(g). 

In conducting its analysis the Antitrust Division examines whether a standard may lessen 

competition, for example, by placing certain manufacturers of a product at an unjustified 

competitive disadvantage compared to other mrumfacturers, or by inducing avoidable 

inefficiencies in production or distribution of particular products. In addition to harming 

consumers directly through higher prices, these effects could undercut the ultimate goals of the 

legislation. 

Along with your request, you sent us the draft final rule and a number of other documents 

relating to distribution transformers, including the comments that had been submitted to DOE in 

response to the Notice of Proposed Rulemaking ("NOPR"), the Notice of Data Availability 

DEPARTMENT OF JUSTICE 

Antitrust Division 

Main Justice Building 

950 Pennsylvania Avenue, N.W. 

Washington, D.C. 20530-0001 

(202) 514-24011 (202) 616-2645 (Fax) 

E-mail: antitrust@usdoj.gov 

Web site: http://www.usdoj.gov/atr 

September 6, 2007 

FACSIMILE TRANSMITTAL AND FIRST CLASS MAIL " 

Warren Belmar, Esq. 

Deputy General Counsel for Energy Policy 

U.S. Department of Energy 

Washington, D.C. 20585 

Dear Deputy General Counsel Belmru': 

I am responding to yOl.n- August 7, 2007 letter seeking the views of the Attorney General 

about the potential impact on competition of the proposed final rule regarding energy 

conservation standards for liquid-immersed and medium-voltage, dry-type distribution 

transformers ("distribution transformers"). The Energy Policy and Conservation Act ("EPCA") 

authorizes the Department of Energy ("DOE") to establish energy conservation standards for a 

number of appliances where DOE determines that those standards would be technologically 

feasible, economically justified, and result in significant energy savings. 

Your request was submitted pursuant to Section 325(0)(2)(B)(I) of the Energy Policy and 

Conservation Act, 42 U.S.C. § 6291,6295 ("EPCA"), which states that, before the Secretary of 

Energy may prescribe a new or amended energy conservation standard, the Secretary shall ask the 

Attorney General to make a determination of "the impact of any lessening of competition ... that 

is likely to result from the imposition of the standard." The Attorney General's responsibility for 

responding to requests from other departments about the effect of a program on competition has 

been delegated to the Assistant Attorney General for the Antitrust Division in 28 CFR § 0.40(g). 

In conducting its analysis the Antitrust Division examines whether a standard may lessen 

competition, for example, by placing certain manufacturers of a product at an unjustified 

competitive disadvantage compared to other mrumfacturers, or by inducing avoidable 

inefficiencies in production or distribution of particular products. In addition to harming 

consumers directly through higher prices, these effects could undercut the ultimate goals of the 

legislation. 

Along with your request, you sent us the draft final rule and a number of other documents 

relating to distribution transformers, including the comments that had been submitted to DOE in 

response to the Notice of Proposed Rulemaking ("NOPR"), the Notice of Data Availability 
("NODA") issued by DOE earlier this year that discussed standards DOE was considering, and

comments DOE received regarding the NODA.

In November of 2006, you requested DOJ's views regarding the NOPR, which proposed

Trial Standard Level 2. By letter dated January 16, 2007, we responded that, based on our

inquiry, we were concerned that the distributor transformer standard might adversely affect

competition with respect to distribution transformers used in industries, such as underground coal

mining, where physical conditions limit the size of equipment that can be effectively utilized.

We urged DOE to consider creating an exception for distribution transformers used in industries

with space constraints.

You have addressed our concern by establishing a separate product class for underground

mining transformers and excluding that class from the proposed final rule. Although our January

16, 2007 letter did not limit our concern to underground mining transformers, we believe DOE's

decision to exclude underground mining transformers from the proposed final rule adequately

addresses our concern.

Our review of the NOPR was limited to the impact of Trial Standard Level 2 on

competition. The proposed final rule would establish a more stringent standard than Trial

Standard Level 2 for certain distribution transformers. Specifically, it establishes Trial Standard

Level 3 as the standard for certain three phase liquid-immersed distribution transformers, with a

commensurate standard for certain single phase liquid-immersed distribution transformers. To

ascertain whether the more stringent standard would adversely impact competition, we have

evaluated the comments DOE received in response to the NODA, which had stated DOE was

contemplating Trial Standard Level 2 or 3 for three phase liquid-immersed distribution

transformers. We have also conducted industry interviews. Based on this review, we have

concluded that the proposed final rule's application of Trial Standard Level 3 to certain three

phase liquid-filled distribution transformers and the comparable standard to certain single phase

liquid-filled distribution transformers would not adversely affect competition.

In conclusion, the Antitrust Division does not believe the proposed final rule would

adversely affect competition.

Yours sincerely,

bQ&alA f1,cs^e^

Deborah A. Garza

Acting Assistant Attorney General

Page 2

 EE-RM/STD-00-550 COMMENT 192

("NODA") issued by DOE earlier this year that discussed standards DOE was considering, and 

comments DOE received regarding the NODA. 

In November of2006, you requested DOJ's views regarding the NOPR, which proposed 

Trial Standard Level 2. By letter dated January 16,2007, we responded that, based on our 

inquiry, we were concerned that the distributor transfonner standard might adversely affect 

competition with respect to distribution transformers used in industries, such as underground coal 

mining, where physical conditions limit the size of equipment that can be effectively utilized. 

We urged DOE to consider creating an exception for distribution transformers used in industries 

with space constraints. 

You have addressed our concern by establishing a separate product class for underground 

mining transformers and excluding that class from the proposed final rule. Although our January 

16, 2007 letter did not limit our concern to l.mderground mining transformers, we believe DOE's 

decision to exclude underground mining transfonners from the proposed final rule adequately 

addresses our concern. 

Our review of the NOPR was limited to the impact of Trial Standard Level 2 on 

competition. The proposed final rule would establish a more stringent standard than Trial 

Standard Level 2 for certain distribution transformers. Specifically, it establishes Trial Standard 

Level 3 as the standard for certain three phase liquid-immersed distribution transformers, with a 

commensurate standard for certain single phase liquid-immersed distribution transformers. To 

ascertain whether the more stringent standard would adversely impact competition, we have 

evaluated the comments DOE received in response to the NODA, which had stated DOE was 

contemplating Trial Standard Level 2 or 3 for three phase liquid-immersed distribution 

transformers. We have also conducted industry interviews. Based on this review, we have 

concluded that the proposed final rule's application of Trial Standard Level 3 to certain three 

phase liquid-filled distribution transformers and the comparable standard to certain single phase 

liquid-filled distribution transformers would not adversely affect competition. 

In conclusion, the Antitmst Division does not believe the proposed fmal rule would 

adversely affect competition. 

Yours sincerely, 

~m.\,t A,6aea '<1Uc 

Deborah A. Garza 

Acting Assistant Attorney General 

Page 2 

("NODA") issued by DOE earlier this year that discussed standards DOE was considering, and 

comments DOE received regarding the NODA. 

In November of2006, you requested DOJ's views regarding the NOPR, which proposed 

Trial Standard Level 2. By letter dated January 16,2007, we responded that, based on our 

inquiry, we were concerned that the distributor transfonner standard might adversely affect 

competition with respect to distribution transformers used in industries, such as underground coal 

mining, where physical conditions limit the size of equipment that can be effectively utilized. 

We urged DOE to consider creating an exception for distribution transformers used in industries 

with space constraints. 

You have addressed our concern by establishing a separate product class for underground 

mining transformers and excluding that class from the proposed final rule. Although our January 

16, 2007 letter did not limit our concern to l.mderground mining transformers, we believe DOE's 

decision to exclude underground mining transfonners from the proposed final rule adequately 

addresses our concern. 

Our review of the NOPR was limited to the impact of Trial Standard Level 2 on 

competition. The proposed final rule would establish a more stringent standard than Trial 

Standard Level 2 for certain distribution transformers. Specifically, it establishes Trial Standard 

Level 3 as the standard for certain three phase liquid-immersed distribution transformers, with a 

commensurate standard for certain single phase liquid-immersed distribution transformers. To 

ascertain whether the more stringent standard would adversely impact competition, we have 

evaluated the comments DOE received in response to the NODA, which had stated DOE was 

contemplating Trial Standard Level 2 or 3 for three phase liquid-immersed distribution 

transformers. We have also conducted industry interviews. Based on this review, we have 

concluded that the proposed final rule's application of Trial Standard Level 3 to certain three 

phase liquid-filled distribution transformers and the comparable standard to certain single phase 

liquid-filled distribution transformers would not adversely affect competition. 

In conclusion, the Antitmst Division does not believe the proposed fmal rule would 

adversely affect competition. 

Yours sincerely, 

~m.\,t A,6aea '<1Uc 

Deborah A. Garza 

Acting Assistant Attorney General 

Page 2