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UNITED STATES OF AMERICA

DEPARTMENT OF ENERGY

**MEETING of the**  **LV WORKING GROUP** 

Volume I I

American Public Power Association

1875 Connecticut Ave., NW 12 th Washington, D.C. 20009 Floor

Thurs day
Dec em ber 1 , 201 1

**Facilitator :** 

Richard Parker University of Connecticut Law School

**Host :** 

American Public Power Association 1875 Connecticut Ave., NW 12 th Washington, D.C. 20009 FloorExecutive Court Reporters (301) 565

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**Participants Identified:**

Tim Ballo Earth Justice 1625 Massachusett s Avenue Suite 702 Washington, DC 20036

S cott Beck Lakeview Metals

Chris Brown Cogent Power

Ned Brush Consultant

John Caskey National Electrical Manufacturers Association

Scott Choinski National Electrical Manufacturers Association 1300 North 17 th Suite 1752 S treet

Rosslyn, VA 22209

Jim Creevy National Electrical Manufacturers Association 1300 North 17 th Suite 1752 Street

Rosslyn, VA 22209

Andrew deLaski
ASAP 20 Belgrade Ave, Suite 1 Boston, MA 02131

Tom Eckman Northwest Power and Conservation Co uncil

Gary Fernstrom Pacific Gas & Electric Company 13055 Parkhurst Dr Oakland, CA 94619Executive Court Reporters (301) 565

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Robert Greeson Federal Pacific Company

Don Lewis Alconex

Dave Millure Metglas Incorporated 440 Allied Drive Conway, SC 29526

Wes Patterson ABB, Inc.

Thomas Patzn er Schneider Electric

Eric Petersen AK Steel

Eduardo Robles Eaton Corporation

Mahesh P. Sampat EMS Consulting 1180 Brookview Dr Athens, GA 30606

Jerry Schoen AK Steel Corporation 705 Curtis Street Middletown, OH 45043

Vijay Tendulkar Onyx Power

**Pa rticipants from DOE:** 

John Cymbalsky

Jim RabaExecutive Court Reporters (301) 565

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**Participants from Navigant**  **/LBL :** 

Brian Coffey Navigant

Mike Rivest Navigant

Matt Nardotti Navigant Consulting

Chris Bolduc Lawrence Berkley National Laboratory Berkeley, CA 94720

Katie Coughlin
Lawrence Berkley National Laboratory

Luo Zhimei (webinar) Navigant Consulting

**Webinar Attendees**

Jerry Allen Metglas, Inc.

Jay Ballard Schneider Electric

Kenneth Harden Schneider Electric

Brian Kaja General Electric

Chad Kennedy Schneider Electric

Philip L ing Powersmiths International Corp

Richard Lyke AK SteelExecutive Court Reporters (301) 565

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Dhiru Patel Hammond Power Solutions Inc.

John Rosetti Memphis Light Gas and Water

Bob Smith Federal PacificExecutive Court Reporters (301) 565

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**AGENDA**

**ITEM PAGE** 

Welcome, Mr. Parker 89

Self

- Introdu ctions 89

Proposals

Advocates: Mr. Delaski 95

Discussion of Data Center Transformers Mr. Tendulkar 145Executive Court Reporters (301) 565

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9:24 a .m. 1

MR. PARKER: Okay. Welcome everyone f o r 3

day two for some of us, and day three for others of 4

us. It’s been a long run, but I think it’s been 5

very productive discussion, all three days, and I 6

hope we can make good progress today. Today’s going 7

to be about discussing proposals. I think from 8

talking to various parties, there is a lot of 9

interes t in getting to yes all around the table, and 10

I’m optimistic that we can do that, if not at this 11

meeting, soon thereafter. Let’s go around the table 12

and introduce ourselves, then we’ll go around the 13

back and we’ll have the people on the wall introduce 14

the mselves, and then we’re going to get started.

. 15 P R O C E E D I N G S

2

**Self**

**- introductions**  16

MR. PARKER: I’m Richard Parker
, 17

facilitator , University of Connecticut Law School

. 18

MR. BALLO: Tim Ballo, Earth Justice. 19

MR. ROY: Robin Roy, Natural Resources 20

Defense Council. 21

MR. FERNSTROM: Gary Fernstrom, PG&E 22

representing PG&E, the Southern California Edison 23

Company and Semper Utilities , and our 30 million 24

customers

. 25Executive Court Reporters (301) 565

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MR. DeLASKI: Andrew DeLaski, Appliance 1

Standards Awareness Project. 2

MR. BECK: Scott Beck, Lakevie w Metals. 3

MR. MILLURE: Dave Millure, Metglas. 4

MR. PETERSEN: Eric Petersen, AK Steel. 5

MR. GREESON: Rob ert Greeson, Federal 6

Pacific Transformer. 7

MR. CASKEY: John Caskey, NEMA. 8

MR. TENDULKAR: Vijay Tendulkar, Onyx 9

Power. 10

MR. ROBLES: Edu ardo Robles, Eaton 11

Corporation. 12

MR. PATZNER: Thomas Patzner, Schneider 13

Electric. 14

MR. CYMBALSKY: John Cymbalsky, DOE. 15

MR. RIVEST: Mike Rivest, Navigant 16

Consulting. 17

MR. PATTERSON: Wes Patterson, ABB. 18

MR. SAMPAT: Mahesh Sampat, EMS 19

Consulti ng. 20

MR. BRUSH: Ned Brush, consultant. 21

MR. BROWN: Chris Brown, Cogent Power. 22

MR. LEWIS: Don Lewis, Alconex. 23

MR. SCHOEN: Jerry Schoen, AK Steel. 24

MR. LYKE: Rick Lyke, AK Steel. (phone) 25Executive Court Reporters (301) 565

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MR. CHOINSKI: Scott Choinski, with NEMA. 1

MR. N ARDOTTI: Matt Nardotti, Navigant. 2

MR. BOLDUC: Chris Bolduc, Lawrence 3

Berkley National Labs. 4

MS. COUGHLIN: Katie Coughlin, Lawrence 5

Berkley National Labs. 6
MR. CREEVY: Jim Creevy, NEMA. 7

MR. COFFEY: Brian Coffey, Navigant. 8

MR. RABA: Jim Ra ba, Department of Energy. 9

MR. PARKER: Okay, on the phone? 10

MR. LING: Philip Ling from Powersmiths

. 11

MR. ALLEN: Jerry Allen, Metglas. 12

MR. LYKE: Ric hard Lyke, AK Steel. 13

MR. PARKER: Anyo ne else on the phone? 14

MR. LING: I just want to check. Phil 15

Ling from Powersmiths, can you hear us? 16

MR. PARKER: Yes, we can hear you. 17

MR. LING: Okay, Richard, thanks. 18

MR. PARKER: Everything else okay? 19

MR. LING: Some of the people are more 20

soft

- spoken that others, but if everybody speaks up, 21

it sou nds great. 22

MR. PARKER: Okay. Good. Thank you. 23

Anybody else on the phone ? Okay. Welcome. 24

25Executive Court Reporters (301) 565

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**Proposed Agenda** 1

MR. PARKER: So the agenda for today is to 2

discuss proposals and see how far we can get in 3

arriving at an agreement on standard levels, 4

pa rticularly for design lines seven and eight, I 5

believe, which are the bulk of the market. 6

I understand from the advocates that 7

they’d like to caucus and discuss their proposal

-- 8

Excuse me, if you’re on the phone, could 9

you please mute your phones unt il you wish to speak. 10

T hank you. 11

And in general I think today will be not a 12

plenary gab

- fest as we’ve had in previous meetings. 13

I think the most productive way to use the day would 14

be for people to put forward proposals, take a 15

break, let people disc uss the different groups 16

discuss their response and then reconvene. So 17

there’ll be a lot of breaks today. If one group has 18

settled and we’re still on a break, people can feel 19

free to do whatever you’d like. That’s just the way 20

things are at this stage o f the game. 21

Again, we’re getting a lot of noise from 22

people on the phones. Please mute your phones if 23

you’re on the phone. Thank you. 24

And we’ll see how it goes. There is one 25Executive Court Reporters (301) 565

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breakout right at the end of this hall here, people 1

can also, I think, conv ene in the corner. There’s a 2

not too elegant, but yet serviceable space back here 3

behind me. Sorry we don’t have very good 4

facilities, but they should be quite serviceable for 5

people to go and caucus and talk among their groups. 6

I’ll try, for the benef it of people on the 7

phone to at least roughly estimate how long we will 8

be so if you’re requesting time to caucus, please 9

give me a

-- give us all sort of a rough time frame. 10

I think that the advocates were saying about 15 11

minutes, 20 minutes? Would that be enough? 12

MR. DeLASKI: I think that would be 13

adequate. 14

MR. PARKER: Okay, why don’t we say people 15

on the phone, it’s now about 9:30

-- yes, sorry, 16

excuse me, John? Go ahead. 17

MR. CASKEY: John Caskey, NEMA. Are you 18

saying that they’re going to g o caucus now? Okay. 19

How does that relate to at the end of yesterday, we 20

were going to talk a little bit about data centers, 21

and VJ was going to offer some information there. 22

Are you going to wait until that group actually gets 23

together and has some pro posal to come back with? 24

MR. DeLASKI: We want to react to your

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we’d like to react to your propos al. You made a 1

proposal yesterday, so we want to react to that. 2

MR. PARKER: The new major items are 3

proposals and data centers. I thought while they’ re 4

caucusing I could talk a little bit with Vijay and 5

with Tom about the data center issue and we might 6

make progress at the same time. 7

MR. CASKEY: Great. Thanks. 8

MR. PARKER: So let’s take a break and 9

reconvene here at 9:45. 10

(Whereupon, at 9:31 a. m., the meet ing was 11

off the record to allow for a 30

- minute caucus 12

period.) 13

MR. PARKER: Okay. Shall we get started? 14

Sorry about the delay in reconvening, but we had 15

some good conversations. Let’s

-- 16

MR. SMITH: Richard, if I say Hello, can 17

you hea r me? 18

MR. PARKER: Yes. We can hear you. 19

MR. SMITH: Okay. Thank you very much. 20

MR. PARKER: Okay. We’re back, everybody 21

on the phone, we are reconvening. The advocates 22

have caucused and are back at the table, and will 23

share with us their revised proposal. Okay, Andrew, 24

go ahead. 25Executive Court Reporters (301) 565

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**Proposal** 1

MR. DeLASKI: Thanks. And thanks. I 2

think we had a really constructive conversation 3

yesterday, thanks to NEMA for putting a proposal on 4

the table and that was clearly explained and I think 5

helped us to advan ce the discussions yesterday. So 6

we really appreciate that. I think it helps us to

- 7

- has been a very constructive step forward. 8

And we want to present a revised proposal. 9

We weren’t able to focus on every aspect of your 10

proposal in the time that we’v e had. We focused on 11

the levels, primarily, but I want to comment on two 12

of the things that Thomas explained yesterday that 13

are

-- before I get to the levels conversation. 14

One is the issue of scaling. So, as I 15

said yesterday, we are comfortable in pr inciple with 16

the scaling concepts that you outlined yesterday 17

with respect to the transformers at the edges, and 18

it was raised in the very first meeting, I think, 19

and we’ve been comfortable all along with that. 20

We’re comfortable in principle, we haven’t h ad time 21

to analyze the specific numbers. We will. Our 22

capacity to consider them I think will be, in part, 23

dependent on the judgment of the consulting team, 24

frankly, and doesn’t seem like the right factors

-- 25Executive Court Reporters (301) 565

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that’s something we can probably reach agreeme nt on. 1

If we can get agreement on the main 2

levels, we can get agreement on the scaling, I 3

believe. 4

On timing, you suggested a three year lead 5

time. We’re comfortable with that for you lead 6

time, I think that’s the default in the law. 7

I appreciate yo ur comments about learning, 8

about what you can do today isn't what you can do in 9

five years or ten years, and that you

-- as you 10

prepare for a standard you get smarter about how you 11

can comply with that standard as you work with your 12

designs and you work w ith your manufacturing, and 13

that isn't achieved overnight. So I think

-- three 14

years I understand is what you expressed as the 15

lower limit for what Schneider can do, and that 16

smaller companies need more time, is what I heard 17

you saying. And that

-- three year we think is the 18

default in the law, the question came up, would more 19

time help. And I think the answer you came back 20

was, not so sure it would actually help because it’s 21

still the same problem, no matter when the timing 22

is. So the timing

-- I think I see a convergence on 23

sort of the three year lead time and longer really 24

isn’t that helpful is what I heard. 25Executive Court Reporters (301) 565

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So then to shift to the question of 1

levels. We began, in our phone call a couple of 2

weeks ago by proposing EL

- 5. Your current proposal 3

was EL

- 2. We proposed EL

- 5 using the wound core 4

exclusion scenario, because that is the maximum 5

cost

- effective level as shown in the wound core 6

exclusion scenario. 7

We are prepared to change our proposal to 8

EL

- 4 for both design line seven and design line 9

eig ht. We did not focus on design line six. We 10

agree it has a small portion of the overall market. 11

We haven’t focused on it. 12

Four

-- what really brings us to four is 13

reviewing the Navigant MIA prepared for DOE. When 14

we look at five, the conclusion from the draft MIA 15

is that five you’ve got to use high grade steel. 16

Whereas at four, we see that the criteria of having 17

multiple steel options is in the mix. So at four, 18

just to quote from the manufacturer impact analysis, 19

“CSL

- 4 offers manufacturers more fle xibility than 20

CSL

- 5, as mitered M3 and M4 options are also near 21

minimum cost designs, depending on the price of HO 22

relative to those grain

- oriented grades .” 23

So we see that at four, with M3 and M4 an 24

option in the market along with the IV grades, that 25Executive Court Reporters (301) 565

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tha t gives us the diversity of supply that would 1

provide for the competition that would give options 2

for steel makers and options for manufacturers and 3

create sustained competition in the market. 4

In terms of construction techniques, we 5

recognized this is ei ther mitered course, that 6

you’re not going to butt lap at four. We recognize 7

that entails investments. We think manufacturers 8

have multiple options for how to comply, either by 9

making those investments in mitering equipment or in 10

sourcing their cores acr oss the range of 11

manufacturer sizes. We also think that 12

manufacturers have another option which is not 13

explained in the manufacturing impact analysis, 14

which is for the small

-- the small KVA size 15

transformers or the large volume transformers, which 16

would be the shift to wound cores. The wound cores 17

are a viable engineering option for high volume 18

sales transformers, and that’s another option, in 19

fact may be a less expensive capital investment than 20

going to mitering. So we think there’s multiple 21

options ou t there. This is not a single path for 22

how one could comply at CSL

-- I guess we’re calling 23

them ELs, EL

- 4. 24

So you can make the investments, you can 25Executive Court Reporters (301) 565

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buy the cuts, you’ve got a few different ways that 1

you can comply. 2

So those are the main results. So we then 3

turn back to the LCC analysis, with the wound core 4

exclusion scenario, again, and we see that EL

- 4 for 5

design line seven turns out that that’s the level 6

that yields the greatest electrical cost savings of 7

any option analyzed. It’s actually more co st

8

effective than our previous proposal. 98 percent

-- 9

sorry, 97 percent of customers are estimated to be 10

better off under that standard than without that 11

standard. The mean payback is 5.7 years on a 12

product that will last more than 30 years. So 13

that’s really, from our perspective, a slam

- dunk 14

from a cost

- effectiveness analysis point of view. 15

A DL

- 8, which is the larger transformer
, 16

the mean LCC savings are again

-- it’s the minimum 17

LCC point, it’s the level that yields the largest 18

cost

- effective

-- la rgest mean electrical cost 19

savings of any of the options, so it’s more cost

20

effective than our previous proposal. 85 percent of 21

customers are better off than without any standard 22

at all. And the mean payback is 12.6 years, again, 23

on a product that lasts more than 30 years. So 24

again, a slam

- dunk from our perspective. And I’m 25Executive Court Reporters (301) 565

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just quoting from the wound core exclusion scenario. 1

So we see that as a standard level that 2

has powerful arguments for it, one that has a lot of 3

legs behind it, and one that would be, frankly, very 4

supportable, and one that we think is a

-- we 5

understand

-- doesn’t tell significant changes for 6

parts of the industry, but the benefits are large, 7

and that they would be easily cost

- justified. 8

We also want to address the point that yo u 9

raised in your comment yesterday about well, geez, 10

you don’t get that much more for this relative to 11

what you would have gotten if you just stuck with 12

two. So Robin’s going to address that. 13

MR. ROY: Robin Roy, NRDC. We were 14

mindful of this small inc remental benefit going from 15

the efficiency levels from two to three to four. We 16

tried to figure out why that might be happening this 17

way and what it really meant. And I think Katie’s 18

e

- mail last night was very helpful, at 10:20, that 19

shows the number of transformers that are selected 20

at each efficiency level. If you take a look at 21

that, you see that in

-- for design line seven, for 22

example, in EL

- 1, something like 96 percent of the 23

transformers are ones which meet an EL

- 4 level 24

anyway. So that means the manufacturers would have 25Executive Court Reporters (301) 565

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to be going through this adjustment to achieve these 1

benefits. So it looks like what’s coming up in EL

- 1 2

is largely what would be required to come up with 3

EL

- 4. 4

The same thing is in EL

- 2, we’re again 5

picking most of the same transformers at a 98.8 6

percent efficiency, same thing at EL

- 3. So for each 7

of these efficiency levels, we’re relying on 8

manufacturers making adjustment to an EL

- 4 level of 9

performance in any case. That made us think, okay, 10

so we wouldn’t really see that small increment 11

necessarily, if the manufacturers weren’t able to 12

make this adjustment, so there was already going to 13

be that imposition

-- that challenge. 14

The other question that came up is much 15

more sort of a pricing question. If you were able 16

to make a transformer that was minimally compliant 17

and do that, even at the same cost or slightly 18

higher, you’d probably price a premium product 19

higher, just as market practice. It seems like it’s 20

a reasonable way to operate. You see that in many 21

industries, th ere’s a differentiation between 22

different levels of that was minimally compliant 23

and do that, even at the same cost or slightly 24

higher, you’d probably price a premium product 25Executive Court Reporters (301) 565

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higher, just as market practice. It seems like it’s 1

a reasonable way to operate . You see that in many 2

industries, there’s a differentiation between 3

different levels of performance. Whatever the cost 4

is, you try to price it in a way that differentiates 5

higher performance from lower performance. So 6

that’s why we didn’t feel that com fortable that the 7

efficiency level two benefits that are shown here 8

would actually be achieved, wouldn’t have those 9

manufacturing challenges, and you’d probably see 10

some smart pricing behavior. So that’s why we’re 11

much more comfortable with DL

- 4. 12

MR. CA SKEY: This is John Caskey, NEMA. 13

Can you explain one more time what you’re saying 14

about the premium idea and about selling high versus 15

sort of lower efficiency? 16

MR. ROY: Sure. There is

-- it’s possible 17

to make a higher and a lower efficiency transfor mer 18

as the LCC has gone about it, it shows in the lowest 19

cost transformer, and that turned out to be a very 20

high efficiency transformer. It turns out you can 21

spend a little bit more in the way they’ve selected 22

their transformers from that population of 23

en gineering designs that they have, spend more and 24

make a less efficient transformer. And you wouldn’t 25Executive Court Reporters (301) 565

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necessarily want to do that. But you’d like to have 1

a differentiation in price between lower and higher 2

performance. So one of these things that it’s ni ce 3

to have a value added if you’re selling a premium 4

product. 5

We would expect that the manufacturers 6

would like to have a range of products that are 7

available and be able to differentiate their pricing 8

across them. We also expect that manufacturers 9

wo uld find a way to optimize in a way that this 10

engineering design space that’s being represented 11

here doesn’t incorporate yet. We expect 12

manufacturers to find a way to minimally comply that 13

might actually be at the same cost or lower cost, 14

which then is as suggested here. So we sort of see 15

some sort of falling back towards lower cost at the 16

minimum efficiency level that’s allowed in the EL. 17

MR. RIVEST: This is Mike Rivest. Just to 18

bring in some

-- some insight as to the construction 19

of these cost curve s. The

-- for design line seven, 20

the information that we had, and the corroboration 21

with the OPS designs was very good at the baseline, 22

and at EL

- 3. I think the data you’re seeing there 23

shown as representing two, three, and four is 24

representative of thre e. I think that the cost to 25Executive Court Reporters (301) 565

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EL

- 2 is overstated and the cost to EL

- 4 is 1

understated. Just consistent to what logic would 2

dictate, and I think that your sales are going to be 3

converging to the minimum requirement over time. 4

MR. DeLASKI: Mike, say again. The cost 5

of EL

- 2 are overstated, and the cost of EL

- 4 are 6

understated? Is that what you said? 7

MR. RIVEST: I believe so. Because 8

they’re

-- I know that they’re representative of EL

9

3. And that applies to DL

- 7. 10

MR. DeLASKI: So the cost in the 11

engi neering? 12

MR. RIVEST: Yes. 13

MR. DeLASKI: Okay. 14

MR. PARKER: What about for DL

- 8? 15

MR. RIVEST: DL

- 8, again, there was good 16

corroboration at the baseline and at the NEMA level, 17

which I believe is EL

- 2. Overall the cost 18

efficiency curve of EL

- 8 is more consistent with 19

expectation of an exponential. 20

MR. DeLASKI: And DL

- 7, as I understand 21

it, is something on the order of three

- quarters of 22

the MVA sales, so DL

- 7 is going to drive the 23

national impact analysis. It’s going to be the 24

stronger driver

- - 25Executive Court Reporters (301) 565

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MR. RIVEST: Right. 1

MR. DeLASKI:

-- on the NIA. We were also 2

conscious that, you know, in this market, as we’ve 3

talked about it over the last few meetings, that the 4

first cost driver is a very powerful first cost 5

driver. Your customers, the manufa cturers’ 6

customers are very focused on first cost, and we 7

understand that. You made it clear again yesterday 8

in describing the challenges in meeting the needs of 9

a changing market, in a changing regulatory 10

environment. So we thing that that first cost 11

dr iver will drive manufacturers to find cost options 12

that are truly the lowest cost option to comply at 13

that minimally compliant level. 14

And then we also understand that, you 15

know, change is sticky. You know, that there’s a 16

long term approach and your sh ort term approach, and 17

that the long term approach involves investments, 18

significant investments

-- you’re not going to go 19

there immediately. So there’s the

-- so even if it 20

were to be cheaper, even if it were cheaper in the 21

long term to be using your

-- there’s some 22

investments entailed there. It’s not going to 23

happen immediately, or even necessarily ever, 24

because of these factors driving you to sort of keep 25Executive Court Reporters (301) 565

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t hings cheap

-- low cost for your customers, given 1

their market preference for low cost first pro ducts. 2

MR. LING: This is Peter Ling
, 3

Powersmiths. Can I speak for a couple seconds? 4

MR. PARKER: Yes, go ahead. 5

MR. LING: I’m not subject

-- at 6

Powersmiths, we’ve been exclusively in that high 7

efficiency DL

- 7, DL

- 8 business since 2002 and we’ve 8

sh ipped thousands of transformers in that category

- 9

- two categories at EL

- 3 and EL

- 4. Now, what we’re 10

finding, and we had to reoptimize our product, is 11

that

-- and it was brought up a bit yesterday a 12

couple of times

-- was that 35 percent, a very small 13

per centage transformer loading that we’re actually 14

measuring in the field

-- and we’re doing a lot of 15

retrofits in the field in performance contracts. 16

The data is, as was discussed yesterday, 15 to 20 17

percent is the true loading out there. The problem 18

with driving up the efficiency at 35 percent load, 19

it’s the wrong place to optimize. And so 20

compromises that you’ll make in terms of

-- as you 21

know, in terms of building the lowest cost would be 22

EL

- 4 at 35 percent, that’s a disadvantage 23

performance in real wor ld at 20 percent. 24

Now it’s really the long optimization

-- I 25Executive Court Reporters (301) 565

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mean we had to go back because getting paid on 1

dollars per watts saved, doesn’t matter what the 35 2

percent load point is, it matters when you’re 3

swapping out in the field, what the load is in the 4

field, delivering the savings at that load. And 5

again, and again, and again, the statistics are 6

biased towards the 15 to 20 percent loading. And so 7

we redesigned our products, optimized to that level, 8

and it’s a very different optimization. And I t hink 9

the time and investment and machinery and resources 10

to optimize at 35 percent will actually not deliver 11

the quads savings that you’re looking at and you 12

will experience in the grid. 13

MR. DeLASKI: This is Andrew. I 14

understand the point, and I apprec iate it, but just 15

to question back to the analysts, which is that I 16

believe that the modeling and the NIA results we’re 17

looking at do assume field loading of 15 to 20 18

percent, is that correct? I see the LBL analysts 19

nodding for those of you on the phone a nd can’t see 20

them nodding. 21

MR. LING: Okay. The problem with that, 22

though, is that, as Tom Patzner of Schneider said 23

yesterday, the design focus and the focus on 24

optimization will still be on meeting the legal 25Executive Court Reporters (301) 565

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requirement which is a 35 percent load. Wh en I go 1

to my engineers and say, okay, if I’ve got to 2

deliver the maximum watts savings, it’s a very 3

different optimization process to optimize losses at 4

20 percent, instead of optimize losses at 35 5

percent. Completely different balance of materials 6

happe n as a function of that. 7

MR. PARKER: This is

-- 8

MR. DeLASKI: Can I just comment? 9

MR. PARKER: Yes. 10

MR. DeLASKI: I’m sympathetic, and I 11

understand, and I agree. I would like to have a 12

test method that measures at a level of loading that 13

is con sistent with what consumers experience in the 14

field. That is a shared objective that I would have 15

with you. I don’t think we can address it right 16

now. I would be very open to discussions on how we 17

can address it and how we can get there. 18

MR. LING: A big challenge. I look 19

forward to that because I think it would be a very 20

productive process. I think it can be as simple as 21

specifying another loss limit, either in absolute 22

terms on a KVA basis or as a percentage of losses at 23

the 35 percent loading loss es. That way you’d not 24

be optimizing to a single point, you’re optimizing 25Executive Court Reporters (301) 565

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to do a point where losses are measured, calculated 1

and all of that stuff. So there’s not an additional 2

burden in terms of ... 3

MR. PARKER: Right. The problem, I think 4

that Andrew alluded to, is that this group doesn’t 5

really have jurisdiction to change or even recommend 6

-- recommend in the same way that we can recommend a 7

standard

-- we don’t really have jurisdiction on 8

test methods. That’s a different rule. My 9

understanding was that also is that if there is 10

consensus around the table, and in the industry, and 11

with the experts that the test method as it stands 12

now is flawed and ought to be changed, certainly it 13

would be feasible for this group to recommend a 14

change to the test me thod, and it should be possible 15

to do something like a direct final rule or an 16

expedited rulemaking as a separate process that 17

would flow out of this process, that would address 18

those

-- that test process

-- test method to make it 19

more realistic. If it’s as clear as I’m hearing, 20

that should be a relatively non

- controversial and 21

relatively easy fix. But I think it would be a win

22

win

-- 23

MR. DeLASKI: No, no. Let’s not kid 24

ourselves. It’s not going to be easy. It would not 25Executive Court Reporters (301) 565

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be easy. It’s not

-- this is not

-- would not be 1

easy at all. I don’t want to soft

- sell this. 2

PARTICIPANT: It’s like standard levels, 3

you rewrite everything. 4

MR. DeLASKI: We like to write test 5

methods before we write standards, but we don’t 6

always get that choice. 7

MR. PARKER : Okay. 8

MR. DeLASKI: Okay. And the

-- we don’t 9

have that choice sitting here. So it’s just not a 10

choice that we have. It doesn’t mean that we can’t, 11

in good faith, after we develop the standard levels, 12

work together to develop

-- I mean it would ha ve to 13

come from NEMA. It would have to come out of the 14

industry, because it’s an industry test method. So 15

the industry would have to work to develop a change 16

in test method and then we would

-- the Department 17

has mechanisms by which it can adjust standar ds 18

after a standard is issued, with a test method 19

change. But that is going to be a multi

- year 20

process, because again, it has to start with the 21

industry to develop alternate

-- to modify the test 22

method. It’s a NEMA test method. 23

So I’m looking at som ething that would be 24

a commitment to work in good faith to address this, 25Executive Court Reporters (301) 565

- 0064 111

and I haven’t even heard

-- I think people would 1

agree, but I’m not sure this is a universally held 2

view, and that’s part of what the NEMA process, test 3

method writing process is all about. John, I’m 4

talking about your process, so I don’t want to go 5

too far out on the limb here. 6

MR. PARKER: Well, I see this through the 7

lens of administrative law, and as a matter of 8

administrative law, if something is non

9

controversial, which the pr edicate, there are 10

reasonably simple procedures for making those kind 11

of changes in rules. If it’s not straightforward, 12

technically, and if it becomes controversial, well, 13

that’s of course, a whole other issue. I think it’s 14

clear, but it’s not something that this group can 15

address around the table now. 16

MR. LING: But it’s not necessarily a 17

change in the test method, it would just be setting 18

a no load loss maximum, without changing the test 19

method itself. 20

MR. PARKER: Can you

-- 21

MR. CYMBALSKY: It’s off the table. 22

MR. PARKER: Okay. It’s off the table. 23

MR. CYMBALSKY: Or table it. 24

MR. LING: The idea is just that

-- 25Executive Court Reporters (301) 565

- 0064 112

MR. PARKER: We got it. 1

MR. LING:

-- optimizing and going through 2

all those having it ... by 35 percent is the problem. 3

How to deal with getting down to delivering real 4

quads of savings which I think is what this goal is 5

all about

-- 6

MR. PARKER: Right. 7

MR. LING:

-- has to be achieved, 8

obviously, in the simplest way possible. 9

MR. PARKER: Right. Good point. Okay. 10

Yes, Rob, did you want to comment? 11

MR. GREESON: Rob Greeson, Federal 12

Pacific. We came forth yesterday with level two

-- 13

let me just kind of share with you my

-- kind of a 14

viewpoint on that as far as technology goes with the 15

cores. You guys just recommende d EL

- 4, and I 16

appreciate the fact that you guys acknowledge the 17

fact that there was going to be a lot of investment, 18

and I was going to mention that, and you took the 19

words right out of my mouth. What’s nice about a 20

little lower than that is the fact that you could 21

design transformers that are much higher in 22

efficiency than what we have now, but you have a 23

diversity of manufacturers that I think we need to 24

be considerate of. 25Executive Court Reporters (301) 565

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You’ve got manufacturers like Federal 1

Pacific, relatively low volume compared to say, a 2

manufacturer such as Schneider, and perhaps even 3

Cutler

- Hammer. But if you pick the standard 4

efficiency right, what you’ll end up with is the 5

niche

-- the small players and the niche players, 6

you know, they have more options. They can

-- you 7

can still design a very high efficiency

-- and 20 8

percent lower losses, or 24 percent at EL

- 2 is 9

pretty significant

-- they can design the 10

transformer in a number of ways. They can use butt 11

lap technology with higher grades of steels. They 12

can outsource, as you said. But depending on their 13

market and the lead times available and the types of 14

equipment that they have, they’ve got those options 15

available to them. 16

Now, let’s move to the more

-- the larger 17

manufacturers who might have more investment 18

capabili ty. They’re going to begin to build these 19

higher efficiency transformers. Perhaps initially 20

they may even do the butt lap. And then they’re 21

going to start working at the wound cores, and 22

they’re going to start looking at their options with 23

miter cores, and eventually, over time, there’ll be 24

some capital investment, I think, to improve that, 25Executive Court Reporters (301) 565

- 0064 114

because you’re talking about more volume of product 1

and you can get your investment dollars back more 2

quickly. Which kind of sets you up for the next 3

step up in effi ciency, because you start to slowly 4

improve your capabilities over time. 5

And it seems to me that when you try to 6

make the stair

- step too much, you’re almost pushing 7

-- you’re kind of pushing industry pretty hard, when 8

a 25

-- 20 and 30 percent decrease i n losses is 9

really, really good, and at the same time you’re 10

taking a moderate approach as far as pushing the 11

industry with capital investment. Also, for 12

compliance reasons, you’re getting an extra five 13

percent anyway. 14

So, even at EL

- 2 with 25 percent, in 15

reality, you’re getting an extra five percent 16

savings that doesn’t show up because the compliance 17

is really at NEMA premium 30. 18

MR. DeLASKI: Rob, .. on that, just on 19

that point, want to make sure

-- we’re getting the 20

extra percent in the base case too, aren’t we? 21

MR. GREESON: Yes. 22

MR. DeLASKI: So it’s not

-- it’s not on 23

top of the savings that we’re seeing in the model

-- 24

that compliance need is there in every scenario. 25Executive Court Reporters (301) 565

- 0064 115

MR. GREESON: It’s there, but it’s not in 1

the analysis here. It’s assum ing you’re right at 2

the

-- what we’re looking at here is not taking into 3

consideration you’ve got five percent lower losses 4

on average. 5

MR. DeLASKI: In the base case or in the 6

standards case? 7

MR. GREESON: That’s right. 8

MR. DeLASKI: Okay. So I thi nk the 9

increment savings are the same

-- we can take it 10

off line, but I think

-- 11

MR. GREESON: Oh, I see what you’re 12

saying, right. Okay. 13

MR. DeLASKI: Right. 14

MR. GREESON: Nonetheless, I guess my 15

point is that

-- my way of thinking is that that 16

gradual approach helps industry to adjust to it. 17

The EL

- 4 is a much more abrupt change and it’s going 18

to be difficult for industry to react and I think if 19

we break together

-- break out again and discuss 20

this, it’ll be interesting what happens when we com e 21

back, I guess we’ll probably have some response to 22

it. Thank you. 23

MR. SCHOEN: Jerry Schoen, AK Steel. I 24

guess one of the questions I have, and it’s 25Executive Court Reporters (301) 565

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following up on what Rob is saying. Right now, 1

given that the economy is in not the best of 2

condit ion, would these companies, these smaller 3

manufacturers, a number of them we sell to, would 4

they actually be able to get the capital to do this 5

investment, or would this be something that if we 6

did it in like two steps, three years, and then 7

another step i n three more years, would give them a 8

chance to get through this rough patch right now and 9

survive? 10

MR. TENDULKAR: This is Vijay Tendulkar, 11

Onyx Power. What we are talking about is there are 12

two kinds of the miter core units. One is a half 13

miter, and another is a stapler miter. If you want 14

to take the full advantage of the grain

- oriented 15

steel core steel and reduce the losses, you have to 16

have a stapler miter, and that machine, as we said 17

in the past , the cost of a million and a half 18

dollars, and ther e are but two manufacturers in the 19

world we can get it. 20

If we are looking for a half

- miter, 21

smaller companies are using it today. Either they 22

are doing

-- have a facility in their own base or 23

they are getting from other places. I have a 24

picture here, I don’t know if everybody can see it. 25Executive Court Reporters (301) 565

- 0064 117

This is called half

- miter. But that doesn’t 1

completely give the advantages of a miter core 2

cutting. And that is the problem we are facing. 3

Plus, the stapler miter, the full miter, is also

-- 4

takes lots more room t o put in the factory, and also 5

how much we are going to make off of that unit? 6

Certain transformers you cannot use the miter cut 7

designs at all. 8

MR. DeLASKI: We’ve heard some

-- I mean 9

some different numbers about the cost of the 10

machine. Vijay, you just put out $1.5 million 11

dollars for the cost of a mitering machine. I heard 12

$750,000 in some earlier meetings, so we’re kind of 13

hearing numbers all over the place. I don’t know 14

what the number is, but I assume it’s something that 15

people can figure out. 16

MR. TENDULKAR: Maybe

-- maybe the costs 17

have gone down, but a couple of years ago we looked 18

into that. 19

MR. DeLASKI: Yeah, I don’t know whether 20

that’s

-- 21

MR. TENDULKAR: But the cost normally goes 22

up, not goes down, but I don’t know. 23

MR. GREESON: This is Rob Greeson, Federal 24

Pacific. I think maybe some of the

-- you can get 25Executive Court Reporters (301) 565

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bells and whistles on these things, the auto

- stacker 1

part of it adds some, and if you get the bare bones, 2

the quote I got most recently was about three

3

quarters of a million dollars. That was bare bones. 4

It didn’t have some of the convenient auto

- stacking 5

capability

-- 6

MR. PARKER: That’s for a full miter? 7

MR. GREESON: Yes, step

- lap miter. 8

MR. DeLASKI: And the other option, I 9

understand it’s not an option for low volume, but 10

for higher volume products is to go to wound cores, 11

and that’s an investment as well, I understand. 12

MR. GREESON: Rob Greeson, Federal 13

Pacific. There are issues with trying to use a 14

miter core cap with these smaller KVAs, but 15

personally, the miter core technology is more cost

16

beneficial in the larger ones, and

-- well, let me 17

back up a second, because there are different

-- 18

I’ve seen some other companies that have some miter 19

core cutting technology that I think is probably 20

faster. I’m not ex actly sure how they do it, but 21

I’ve seen one or two instances where it almost 22

looked like the lamination was kind of stamped. But 23

nonetheless, I know that’s probably an expensive 24

investment too. 25Executive Court Reporters (301) 565

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But it sort of depends

-- a lot of 1

manufacturers would p robably choose to go wound on 2

the smaller cores, but there might be some that 3

might actually develop some of their own core 4

cutting technology and come up with a

-- sort of a 5

miter core cutter that operates at a high enough 6

speed so that you can get the p roper yield to get 7

your product out. But the miter core cutting 8

machines we have, we could never cut the small cores 9

and keep up with the production. There’s no way. 10

We’d have to

-- we just couldn’t do it. 11

And if you try to

-- I’m not an expert on 12

t he miter core cutters. Maybe there’s some out 13

there that are a lot faster than ours with the 14

smaller ones, but you’d have to find something like 15

that. And if they’re anything like the ones we 16

have, you wouldn’t be able to cut miters with

-- in 17

the smalle r KVAs effectively and fast enough. So 18

there’s just a lot of issues using

-- there’s 19

probably technology out there that I don’t know 20

about, but it’s kind of complicated to say exactly 21

for sure where they’d go. But certainly the miter 22

cores are great and cost

- effective, but you’ve got 23

the time, the capacity issues to deal with as well. 24

MR. PARKER: Rob, a couple of clarifying 25Executive Court Reporters (301) 565

- 0064 120

questions. When you said smaller KVAs, you’re 1

talking 15 to 30? 2

MR. GREESON: I’m sorry, really, when I 3

say

-- for us with mite r cores, for us right now, 4

with our miter core cutting equipment, it’s like 300 5

and above is where we like to use that technology, 6

because the machines cut efficiently at that point. 7

Try to do anything smaller, it just takes too long 8

and the sorting of th e steel and things of that 9

nature. That’s why we support the EL

- 2, because you 10

still have the butt lap options in that efficiency 11

range, and yet, you also still get a 25 percent 12

reduction in losses

-- and I think that’s really 13

good. And that kind of goes back to what I said 14

earlier that a more gradual step approach to 15

industry to kind of adjust to the technology in a 16

more gradual way. 17

MR. DeLASKI: The numbers I’ve heard for 18

the machinery investment for wound cores, I’ve heard 19

numbers on the order of $1 50,000. 20

MR. PARKER: That’s different from what I 21

have. 22

MR. BROWN: Chris Brown with Cogent Power. 23

We’re a core maker. So all this stuff is pretty 24

familiar to us. We make large cores, stock cores, 25Executive Court Reporters (301) 565

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wound cores, we make them all. We buy all the 1

equ ipment all day long, and we’ve got various 2

investments coming in at the moment. 3

Costs. Wound core, put a wound core, a 4

simple wound core, you’re probably looking at 5

$250,000. That said, wound cores, to perform 6

effectively and to make the best use of the 7

material, the wound cores require annealing as well, 8

and so you’re looking at added annealing costs for 9

wound cores. 10

MR. PARKER: How much? 11

MR. BROWN: For what

-- let’s just say 12

we’re trying to put a simple operation in, you could 13

probably be in t he wound core business for something 14

to the tune of a half a million to $750,000, and 15

then you’re appropriately making wound cores. 16

Stack cores. Stack cores , to do what Rob 17

was saying, there is a certain effectiveness of 18

stack cores. It just doesn’t re ally make a whole 19

lot of economic sense to put narrow bits of material 20

through stack core lines, and so when you get down 21

into very small

-- you get miter mites (ph) so when 22

you get down into very small transformer cores, I’d 23

struggle with the actual KVA r atings, but Rob, you 24

can jump in if you’d like, but when you get down 25Executive Court Reporters (301) 565

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into smaller cores and putting the very narrow strip 1

steel through, you don’t want to be doing it. It 2

just doesn’t make any economical sense and 3

therefore, you don’t really see that kin d of 4

technology, certainly in the North American market, 5

because one, you’ve got a butt lap design, and two, 6

you’ve got a wound core option. If you

-- you can 7

see some of this technology vis

- à

- vis narrow, 8

mitered cores, but you’ll typically see it in othe r 9

markets like Europe, where they’re not akin to using 10

wound cores in any way, shape, or form because it’s 11

-- the wound core is really an American invention 12

and it’s really pretty much stuck, for large part, 13

in North America. It’s in other markets around the 14

world, but it’s certainly not in Europe. So you 15

have a tendency, if you want to make a small dry 16

type KVA, if you want to make an efficiency, there 17

is some of that technology over there. 18

So I hope that helps to

-- some of the

-- 19

MR. PARKER: So, Chris, what is your 20

threshold of small where you face these 21

difficulties? 22

MR. BROWN: Well, we’ve got

-- we opt for 23

a good, medium

- sized step

- lapped fully capable core

24

cutting line at our facility, and we’ve got two more 25Executive Court Reporters (301) 565

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coming in in the next few months, and this market 1

does not demand, at this moment in time, cores that 2

-- again, help me, I mean strip widths down in below 3

three, four inches start to make a real nonsense out 4

of cutting a miter core. What KVA rating that would 5

be

-- 6

MR. GREESON: One tw elve and a half KVA 7

would be either four and a half or five inch. One

8

fifty would be probably a five or a five and a half. 9

And 75s, you’re going to be four, four and a half. 10

MR. BROWN: These lines are

-- they’re 11

highly sophisticated lines and it’s not just the 12

strip width, but it’s also the length of the

-- it’s 13

the height of the core. And because the shearing 14

lines need space from one distance to another, if 15

the core is too short, you just simply can’t get it 16

done. And so our sort of take on it is t hat we stay 17

up in strip widths that are probably wider than four 18

inches, which would be a KVA rating of rough

-- 19

MR. GREESON: Seventy

- five. 20

MR. BROWN: Yeah. 21

MR. GREESON: If you stay above four 22

inches, at four inches you’re easily in the 75 KVA 23

ra nge. 24

MR. BROWN: So then and below that our 25Executive Court Reporters (301) 565

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solution to market is to provide a wound core if the 1

customer is looking for an efficient product, and 2

you can certainly take that down. But again, you 3

get smaller, there’s a certain point where you just 4

flat, butt lap steel is the most effective way to go 5

and it’s going to be for a long time. 6

MR. PARKER: Do we have data on the volume 7

of shipments at the various KVAs? Do we know what 8

the MVA shipment volumes would be for, say, 75 KVA 9

and below? 10

MR. PATZNE R: Tom Patzner from Schneider 11

Electric. The KVA data is in the portal in one of 12

the 24 chapters of documents that

-- I think it’s 13

Chapter five, but it is broken down by KVA. If we 14

did a breakout, I don’t have an index

-- oh, wait, I 15

have the documents o n my hard drive. I’ll try to 16

find it, but it is done by KVA size. 17

Thomas Patzner, Schneider Electric. With 18

regards to this, I don’t believe the 15 KVAs and 30 19

KVAs will be switched at all. I made this point 20

multiple times. The industry is going to bu y 21

resident encapsulated. So we can discuss what we 22

need to do on the 15s and 30s. The industry today 23

is readily available today of resident encapsulated. 24

The large number of the small manufacturers, for the 25Executive Court Reporters (301) 565

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points that were brought up, already only buil d them 1

as resident encapsulated. 2

So that being the case, I guess from my 3

perspective, the industry, on those two KVA sizes, 4

will definitely switch and they’ll be buying wall

5

mounted devices instead of the floor

- mounted 6

devices. 7

MR. DeLASKI: Thomas, at what point does 8

that happen? Does it happen at EL

- 1? Does it 9

happen at EL

- 2? What’s the trigger that puts you

-- 10

maybe they’re already happening today, I guess is 11

the question. 12

MR. PATZNER: Thomas Patzner, Schneider 13

Electric. I’m not seeing the s hift today. With the 14

NEMA tracking data, we have requested the breakouts 15

so that it will be easily tracked as total market, 16

so we’ll be able to track it moving forward. That’s 17

going to start next year. We could

-- NEMA probably 18

could break it out today, compared to 2005, 2006, 19

but it would take some work with their analysis. 20

But the way we

-- the NEMA membership voted on how 21

to track the market, and we just have set it up, so 22

we’ll be able to track that movement forward. So 23

that information will be ava ilable through NEMA to 24

DOE and how they’ve done it in the past. 25Executive Court Reporters (301) 565

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MR. DeLASKI: Right. We’ve heard you on 1

this concern before, and we share it, and we’ve been 2

looking a little bit into sort of what we think the 3

options are from a legal perspective on how this 4

problem could potentially be mitigated. Tim, you 5

want to comment now, or something we can look at and 6

maybe comment on later, but we’ve been looking into 7

it. 8

MR. BALLO: Tim Ballo, Earth Justice. One 9

of the things we’re thinking about

-- well, 10

obv iously, this is a regulatory definition for 11

sealed and non

- ventilating transformers and so it 12

can be changed. Is there sort of a threshold now 13

where they’re not made

-- the sealed units are not 14

made above 30 KVA where we can sort of keep them 15

from at leas t spreading into the 30 KVA ratings? 16

MR. PATZNER: Thomas Patzner, Schneider 17

Electric. If you look at the EL

- listed product, 18

it’s UL listed through 75 KVA in the marketplace. 19

However, the 45s and the 75s, because of their, as 20

we stated many times, the price sensitivity of this 21

market, become more expensive to build as resident 22

encapsulated. So only customers that need the 23

device completely protected from the environment are 24

buying them today. And those two markets would be 25Executive Court Reporters (301) 565

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Petrochem and Wastewater. S o there’s basically two 1

marketplaces today that are buying them today, but 2

they are UL listed through 75 KVA. 3

Based on the target sub

- prices we’re 4

seeing, which you could just

-- you can see the 5

graph, because it’s price sensitive, so you can see 6

when it crosses

-- when each KVA’s potential target 7

price crosses where you can buy it as an 8

encapsulated is where it’s going to switch, to 9

answer that question, Andrew. 10

MR. DeLASKI: You can see the price, we 11

can’t. I totally agree, this is an issue that we 12

n eed to continue to wrestle with, at these small

-- 13

at the smallest KVAs, and thanks for finding that 14

data because I’ve been looking or the data on the 15

KVA by unit and I haven’t been able to lay my hands 16

on it yet, so hopefully you can pull it up at the 17

bre ak. I had a follow up question

-- 18

MR. PARKER: Tom, if it’s on your hard 19

drive , if you can, maybe at the next break, if you 20

could send it around, I think that would be actually 21

very helpful for us today. I appreciate that. 22

MR. GREESON: Rob Greeson, Federal 23

Pacific. At the present energy efficient levels, on 24

the 15 and the 30, would it make sense to just leave 25Executive Court Reporters (301) 565

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those alone for now on the basis that if they did

-- 1

in other words, if they switched over to the 2

encapsulated, you’re going to lose those sav ings, 3

but you’re already getting pretty good savings now 4

compared to

-- well, especially compared to where 5

they were in 2006. Or at least radically

-- I think 6

we had suggested yesterday we kind of adjusted the 7

curve some, but maybe we adjust it a bit more to 8

mitigate the possibility of that happening, since 9

you still get the savings off those two KVAs. Maybe 10

we sort of relax it even more than we discussed, to 11

make sure that doesn’t happen, but that’s just an 12

idea. Thanks. 13

MR. DeLASKI: Just to respond. I think 14

it’s certainly an idea worth exploring. And again, 15

we come back to what we care about the energy 16

savings, so come back to that, so it’s an idea worth 17

exploring. I appreciate that we got at it

-- 18

perhaps we got at it partially with the scaling 19

f actors that you all shared, I just don’t know. 20

I had a follow

- up question for Chris, 21

which is, I’m still

-- this has all been fantastic 22

learning. I’m learning a lot, continuing about the 23

industry’s structure. So as a core supplier, can 24

you

-- is it Chr is, do I have the right

-- 25Executive Court Reporters (301) 565

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MR. BROWN: Yes, Chris. 1

MR. DeLASKI: Okay. The market that you 2

supply, would you characterize it as primarily 3

smaller manufacturers, primarily larger 4

manufacturers

-- because that’s one of the options. 5

One of the options f or folks is to make the 6

investment, the other option is to buy from a 7

company like yours. And I assume there’s more. 8

You’re sitting here and I don’t know whether there’s 9

a dozen or two dozen, I’m learning about market 10

structure here and what their option s are for 11

companies. 12

MR. BROWN: Okay. I mean, roughly, we 13

have a pretty good sense of the overall transformer 14

market in North America, and

-- because we’re steel 15

guys. We count in tons and pounds and things like 16

that. And we supply from our facility, about ten 17

percent of the market on the grain

- oriented business 18

-- and that’s the market between say, Canada, US and 19

Mexico. And if there is

-- every company in the 20

transformer industry sits inside our order book. 21

All the large

-- most of the large, mult inationals, 22

a good number of the national customers

-- 23

MR. DeLASKI: Big? Small? 24

MR. BROWN: Big, small, medium, yep, we’re 25Executive Court Reporters (301) 565

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supplying all of them to some degree. In some cases 1

holistic, full 100 percent supply, and some 2

partials, some augmenting, th e whole market. 3

MR. DeLASKI: And I see Scott nodding his 4

head indicating a similar

-- do you all have a trade 5

association of companies that do what you guys do? 6

No. Okay. 7

MR. PARKER: Can I just ask one clarifying 8

question and if this is in any wa y proprietary and 9

people don’t feel comfortable sharing it, just let 10

me know. But is there a sense generally in the 11

transformer manufacturing business, of the sort of 12

breakdown of markup between the manufacturing of the 13

core and making the rest of the tra nsformer? Is it 14

possible to generalize at all about how much of your 15

overall markup you lose if you decide to outsource 16

your core as opposed to making it in house? I just 17

don’t get a sense

-- in other words, how much of the 18

value added

-- how much additi onal value added there 19

is once you get the core in proportion to the value 20

added of making the core itself, I guess is what I’m 21

trying to get at? Wes, did you have a comment? 22

MR. PATTERSON: Wes Patterson, ABB. 23

General numbers, at least in the medium v oltage 24

space, the material cost as we’ve always said, as 25Executive Court Reporters (301) 565

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arbitrary numbers is 50 percent of selling price. 1

And of that 50 percent, more than 20 percent of it 2

is sitting in the core steel. And this is 3

purchasing the steel, then you have to put your 4

labor and stuff in it. 5

I’d like to come back with a comment from 6

Chris. Chris, clarifying comment. When you 7

reported ten percent, this included power 8

transformers? 9

MR. BROWN: Yes. 10

MR. PATTERSON: Distribution? 11

MR. BROWN: Right. 12

MR. PATTERSON: D ry type, the whole 13

market, right? 14

MR. BROWN: Right. 15

MR. PATTERSON: Another clarifying 16

statement. Chris is a supplier to ABB, right? 17

MR. BROWN: Yeah. 18

MR. PATTERSON: He doesn’t just supply 19

finished cores. He supplies cut steel, and then the 20

ste el is then fabricated back in the factory back 21

into the core, isn't that correct? 22

MR. BROWN: Yeah. 23

MR. PATTERSON: So

-- and just so

-- it’s 24

not the concept of a wound core going into a 25Executive Court Reporters (301) 565

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factory, complete ready to use. It’s in various 1

stages along tha t production cycle. 2

MR. BROWN: Right 3

MR. DeLASKI: And I think that’s

-- thank 4

you for that clarification. I think that’s part of 5

the challenge, Richard, in answering the question 6

you were posing, which is that businesses have a 7

variety of choices an d you can’t simply break it 8

down into this sort of simple, you buy the core or 9

you don’t. There’s a range of choices that they 10

have and that that is going to depend on their 11

business circumstances. I also think that the thing 12

that’s difficult for us to, as a non

- manufacturer, 13

to understand is that the manufacturers are often in 14

-- they each have a different business, right. ABB 15

is quite different than any of the other companies. 16

And each

-- not even in the way we’re talking about 17

today, and to

-- a part icular transformer line may 18

or may not be a big part of their business. Their 19

overall business. So I think it’s difficult for us 20

to answer your question in a sort of cut and dried 21

manner. 22

MR. PATTERSON: But Andrew, it is the 23

largest single component o f our production costs. 24

There is no other component in our entire production 25Executive Court Reporters (301) 565

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cycle that is the magnitude of core. 1

MR. DeLASKI: To your business. I got it. 2

MR. PATTERSON: In all transformers. It’s 3

the nature of the transformer. 4

MR. DeLASKI: Righ t, and then some of the 5

small businesses, I think that we’re talking about, 6

are, you know, suppliers of electrical

-- we talked 7

about the power, we talk about

-- where is Vijay

-- 8

we’re going to talk about

-- later today we’re going 9

to talk about his busin ess, which I think is a very 10

different business

-- it’s a very different business 11

than ABB in a lot of different ways. We have to be 12

able to sort of think about those separately. 13

MR. PARKER: Yes, Wes, I just wanted to 14

follow up on this. What I hear yo u saying is that 15

when you’re making the core, the vast majority of 16

the cost is the material. 17

MR. PATTERSON: This is correct. 18

MR. PARKER: And the additional mark

- up 19

from shaping that material into the actual core is a 20

relatively small additional mark

- up, on the order of 21

ten to 20 percent, is that

-- 22

MR. PATTERSON: Relative to the cost of 23

the material, correct. 24

MR. PARKER: Right. So if the company 25Executive Court Reporters (301) 565

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were to outsource the core, on the one hand, they 1

would be making a major purchase, but as I 2

unders tand it what you’re saying is a lot of that 3

cost they would have incurred anyway for just buying 4

the steel. What they would be foregoing in terms of 5

markup would

-- that’s what I’m trying to get at. 6

What would they be foregoing in terms of profit and 7

mar kup if they were outsourcing the cores. 8

MR. PATTERSON: I don’t understand your 9

question from a manufacturing perspective. When we 10

look at any part of our supply chain, any part, we 11

look at it both from an insourcing and an 12

oursourcing perspective. So we have a price that 13

we’re trying to get to the customer, right. And we 14

have internal costs. And we have to make a margin 15

on our cost, be those internal costs or purchase 16

costs from Cogent. Okay. So what we’re trying to 17

do is minimize our cost structur e so we can minimize 18

our price to the market and be more competitive. 19

So having a markup change really is not 20

the driver. What the driver is is what kind of 21

margin can I make on my cost structure? I have an 22

investment that I’m making and I want to get a 23

return on my investment, and I have multiple ways of 24

making the investment. One is I can build up the 25Executive Court Reporters (301) 565

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infrastructure in house to make the investment, or I 1

can go to Cogent and buy it. So it’s not a matter 2

of how many profit dollars do I lose because I build 3

in house or buy, that’s not the issue. 4

MR. PARKER: I didn’t frame the question 5

well. Rob, go ahead. 6

MR. GREESON: Rob Greeson, Federal 7

Pacific. As far as percentages, if you look at a 8

percentage of the core cost of material as our 9

efficiency levels increase, for 600 volt it becomes 10

a higher percentage of the material cost, I 11

understand, looking at the designs, I’ve got a 12

variety of different efficiencies, and different 13

steels and different types of cores. Not looking at 14

the labor it takes to construct the core, just 15

looking at the material, it’s between 60 and 70 16

percent

-- it’s quite a bit larger for the ... product 17

because on the medium voltage side you’ve got the 18

costly installation. Cores are bigger too, but on 19

the 600 volt side, you’re goi ng to see the core 20

being an even greater component of the overall cost. 21

So it’s true in both cases, but even more so with 22

the 600 volt. 23

MR. PATTERSON: And I agree with Rob, as I 24

stated, my 20 percent was coming from medium 25Executive Court Reporters (301) 565

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voltage, which has lots of in sulation and other 1

stuff around it. When I get into a 600 volt class 2

product, essentially you just have a

-- the basic 3

coil itself, and the copper, the steel I mean, the 4

core steel. The coil and the steel. And the steel 5

that is becoming a much bigger pr oportion of the 6

total material cost. 7

MR. PARKER: I was just trying to see if 8

there’s any way to get at sort of

-- in the 9

hypothetical world, where certain manufacturers 10

decide that it’s not worth investing in capital 11

equipment to miter and so forth, and they decide to 12

outsource their cores instead of producing them in 13

house, I’m just trying to get a sense of whether the 14

impact on that profitability would be large or 15

small. Because the cost of the steel is the cost to 16

them if they make it in house, so wh at really 17

matters is the value added after that. I was just 18

trying to get a sense

-- 19

MR. MILLURE: Dave Millure, Metglas. I 20

think the cost of the steel would probably be less 21

because these guys buy a lot of steel, and we’ve 22

heard before that the small er guys pay more for 23

steel So these guys will have a lower cost base to 24

start. 25Executive Court Reporters (301) 565

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MR. PARKER: I’m just trying to see if 1

there’s any way that we could sort of get a handle 2

on the loss of profitability fo r these companies as 3

opposed to, you know, for when t hey decide to 4

outsource. But let me not belabor that point. 5

MR. DeLASKI: One of the things that I’m 6

struck by in this conversation, I come back to the 7

point that I think Jerry Schoen made, is that there 8

is, you know, we acknowledge that there are 9

inves tments that are needed, there are changes that 10

are needed to comply with new standards. And making 11

those decisions and the choices that manufacturers 12

face in a way to help them to maintain their 13

business and to grow their business and to figure 14

out how yo u work. And regulatory change means 15

change. I mean we’re not soft

- pedaling that there’s 16

change involved in complying with new standards. 17

But one of the ways to mitigate that is to address 18

the issue of timing, and again, I come back to what 19

I’m hearing h ere is that is there

-- does timing 20

help to address the issue of giving manufacturers 21

what they need to

-- giving them more flexibility to 22

meet the compliance date while making the best 23

choices for their business, given this range of 24

choices. 25Executive Court Reporters (301) 565

- 0064 138

That point to a potential to a two

- step 1

standard? We discussed a couple of times. Jerry 2

referenced today, or looking at compliance dates as 3

a way to give people more flexibility. 4

MR. SCHOEN: Jerry Schoen, AK Steel. We 5

had a discussion

-- somebody mentioned it, and I’m 6

not sure if it was Thomas or if it was Robert, or 7

maybe it was Russ

-- about the time it took from 8

when TP

- 1 was put into effect in 2007. The 9

manufacturers first kind of struggled with it then 10

they got astride, it took some couple of years

-- 11

whic hever one of you made that comment, could you 12

repeat it, because I think it bears on this. 13

MR. PATZNER: Thomas Patzner, Schneider 14

Electric. The transition

-- we are just finally at 15

the point of having our most optimal designs. And 16

some of that was du e to the fact that the federal 17

registry 429 was not finalized until this year. So 18

some of the things that came out in that registry 19

caused us to make some changes to how we were 20

building the product because we now need to be more 21

strict on what we’re putt ing out, because the rules 22

are now 100 defined where they were

-- hate to say 23

this word, but they were lax before that, because 24

they weren’t defined. So you met the efficiencies, 25Executive Court Reporters (301) 565

- 0064 139

you didn’t have to register your product and so 1

forth. 2

The date that

-- fr om 2007

-- we’ll remove 3

2008 because of the volatility of the steel market

- 4

- so we really didn’t start reducing our cost until 5

2009. Also what occurred is the market dropped out 6

below us, so we also had the ability that there was 7

now price pressure on us to actually do that as 8

well. So 2009, 2010, 2011 and I always look at it 9

based on tracking the actual purchase price by the 10

end user. The purchase price for the end user 11

spiked in January 2007. It went up again in 2008, 12

mostly because of the ability to obtain steel, it 13

just was a natural aggression to go up. It came 14

down a little bit in 2009. It did not really start 15

coming down until 2010 and 11. 16

So to answer your question, the market 17

really didn’t see us getting to the cost competitive 18

designs un til four years after the law went into 19

effect. 20

MR. DeLASKI: An observation, and frankly, 21

the one that we see time and time again was the 22

standards, right, whatever the product is, which is 23

it takes time for manufacturers to truly optimize. 24

You see a co st

-- typically what happens is the cost 25Executive Court Reporters (301) 565

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increases that are predicted materialize initially, 1

and then over time they erode. 2

MR. PARKER: Yeah. I think we need to

-- 3

let’s take a break and think about the proposal that 4

we’ve heard and that we’ve had a di scussion about, 5

and reconvene in about 15 or 20 minutes. Okay. 6

Thanks. 7

(Whereupon, at 11:04 a .m., the meeting was 8

off the record for a 44

- minute period.) 9

MR. PARKER: Okay. If we can reconvene. 10

First, I apologize, that was sort of a Bill Clinton 11

1 5 minutes, but w e

-- we had a number of very good 12

conversations on the side during the break, and I 13

think what would be the most prudent way forward at 14

this point, since I understand that NEMA and perhaps 15

others need to caucus with their members more 16

exten sively before taking any firm positions, I 17

think it would

-- my sense is that there’s agreement 18

that it would not necessarily be beneficial to try 19

to go forward with proposing and counter

- proposing 20

standard levels at this point today. 21

But that it would be useful to gather some 22

more information that would help us make more 23

enlightened decisions. And in particular, some 24

information that will need to be gathered in any 25Executive Court Reporters (301) 565

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case as part of the rulemaking, whether or not we 1

come to an agreement, which is the im pact on small 2

manufacturers. That’s a part of the agency’s 3

standard analysis and I think our manufacturing 4

impact analysis has gotten a very good start to that 5

but I think there’s a sense all around that we can 6

refine that analysis by going back to the re lative 7

handful of small manufacturers who are operating in 8

this space to pose a combination of purely factual 9

questions. What is their volume of sales of covered 10

products compared to exempt products on a company 11

basis? As well as some not so obvious ques tions, 12

and perhaps somewhat speculative questions that go 13

to the question of what would be the impact on their 14

company’s profitability from moving to one level or 15

another level. 16

I pose these as categories of questions. 17

I’m certainly not expert at form ing these questions, 18

and I think that is something that Mike Rivest and 19

Navigant and Rob Carmichael and his team who are 20

very adept at this kind of analysis can refine. I 21

did suggest that since, due to the shortness of time 22

and the importance of the issue that they take a 23

stab at drafting up a set of questions that they 24

think would be useful in informing this process, and 25Executive Court Reporters (301) 565

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circulate it to a working group of this plenary, 1

just for their general review just to make sure that 2

everybody’s comfortable that these are the sorts of 3

questions that would be most helpful to us before 4

they then pass those along to the manufacturers. 5

My guess is that these questions would be 6

asked in phone calls. It’s not going to be some 7

sort of formal questionnaire that’s going to g o out 8

backed by subpoena power or anything like that. So 9

that would be the approach

-- we’ll try to have that 10

process done next week, with the goal of being able 11

to report back something to the group the week after 12

that. Is that reasonable? 13

And then I think what we should do is set 14

up a conference call

-- I’m not

-- I’m open to 15

setting up a time now if people feel that that would 16

be beneficial. We have conference call for the 17

medium voltage on December 14 th at 11, so from our 18

perspective, that’s the only time that is not 19

available, but I’m open to suggestions for

-- for a 20

time after that. Does anybody want to propose a 21

time? How about 11 on the

-- I guess my own 22

preference would be to give this time since we’ve 23

had such a track record of last minute

-- I think 24

Navigant has been put through its paces by our group 25Executive Court Reporters (301) 565

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pretty heavily. I’d rather err on the side of 1

giving them plenty of time, and perhaps

-- at the 2

same time we get into the Christmas season so it’s 3

complicated situation, but you want to mak e a 4

proposal? 5

MR. DeLASKI: Well, I still have 6

constraints like I did yesterday, on the 15 th and 7

16 th , I’m not available those two days because of 8

all

- day meetings or hearings. And so the 14 th

MR. PARKER: Wha t about the following 11

week, does that

-- 12 , I’m

9

available in the afternoon, after

-- 10

PARTICIPANT: How about Tuesday? 13

MR. PARKER: What’s that? I’m free on the 14

20 th

PARTICIPANT: That’s good. 16 . 15

MR. PARKER: Is everybody doing egg nog? 17

How about December 20 th

PARTICIPANT: Let ’s do it. 19 at 11 a.m.? 18

MR. FERNSTROM: That would be 8 a.m. 20

Pacific, right? 21

MR. PARKER: It’s eleven minus three is 22

eight. 23

MR. DeLASKI: Does that work for you, or 24

do you want to go to one p.m.? 25Executive Court Reporters (301) 565

- 0064 144

MR. PARKER: Is that okay with you

-- 1

MR. DeLASKI: West

- coaster s? 2

MR. FERNSTROM: It doesn’t matter to me, I 3

just wanted to clarify what time it was. 4

MR. PARKER: What time zone. 5

PARTICIPANT: How long would it go, an 6

hour? 7

MR. DeLASKI: Allow two. 8

MR. PARKER: I would allow two hours. 9

MR. FERNSTROM: So that’s great, 11 10

eastern? 11

MR. PARKER: Yes. And if we could aim to 12

have

-- 13

PARTICIPANT: Eleven to one? 14

MR. PARKER: Eleven to one eastern. 15

MR. FERNSTROM: Okay. Eleven to one 16

eastern. 17

MR. PARKER: Okay. So the last item of 18

business today

- t hat gives us

-- puts us ahead of 19

schedule in terms of getting out of here for the 20

afternoon on a beautiful day. What we do need to do 21

in our last item is to discuss the issue of data 22

centers. I don’t

-- we have a working group formed 23

on that and Vijay h as kindly agreed to head that 24

group and I know Tom Patzner’s been working on that. 25Executive Court Reporters (301) 565

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I understand they don’t have a firm proposal at this 1

point, but I think it would be helpful to all of us 2

to hear what Vijay and Tom have to say. Can we do 3

this in about 20 to 30 minutes? Is that enough time 4

for your proposal? 5

MR. TENDULKAR: I think so. 6

MR. PARKER: Okay. Let’s aim for that, 7

and then we’ll have a short discussion, mostly for 8

clarifying questions at that point, and then we’ll 9

adjourn for lunch. Go ahe ad Vijay. 10

**Data Center Transformers:** 11

**Preliminary Analysis from Working Group** 12

MR. TENDULKAR: This is Vijay Tendulkar 13

from Onyx Power. We are talking about the data 14

center transformers. And one of the things we have 15

is the data center transformers have very special 16

requirements. Currently data center transformers 17

are included in the DOE’s definition of the 18

distribution transformers and therefore they had to 19

meet the current efficiency requirements. The data 20

center transformers are normally use to use t o 21

supply the power to the servers, computers, 22

printers, in the big data center buildings. Power 23

normally comes from the UPSs and the utilities and 24

maybe another UPSs, and power is transferred from 25Executive Court Reporters (301) 565

- 0064 1 46

the once source to another source in a very rapid 1

successi on within less than a cycle. That is a lot 2

of inrush current on a transformer and it can trip 3

the breakers and drop the data center down. 4

Therefore, a lot of these data center 5

transformers are designed to have minimum inrush 6

current in the normal spec ifications of about 300 to 7

400 hundred percent of the inrush current. That 8

puts them in a very difficult position to be 9

designed with the grain

- oriented steel, with the 10

wound cores or even with the miter core 11

constructions. 12

We normally use butt lap and the non

13

oriented steel, because the butt lap

-- the non

14

oriented steel and the oriented steel has a slightly 15

different characteristics as far as the remaining 16

flux density in the core. What I mean by that, when 17

you ... the transformer and you switch the tra nsformer 18

off, there is a flux density remaining in the core, 19

and that flux density has quite a bit of effect on 20

what the inrush current piece is going to be. The 21

higher the flux density, you will have a higher 22

inrush current. 23

The oriented core M6 and ab ove have a VH 24

curve is a very slender and almost ... tangular (ph) 25Executive Court Reporters (301) 565

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configuration. There is on the non

- oriented core 1

the VH curve is fatter, that is that it has like 2

more losses, but it has got the curve on the both 3

sides of

-- positive and negative side

-- and the 4

minimum flux density is lower. And that’s one of 5

the reasons why we tried to use non

- oriented cores 6

to design this transformer so the minimum flux 7

density is lower and the inrush currents are lower. 8

Of course we use at a very low flux density, al so in 9

the cores. 10

Using the very low flux density in the 11

core also increases the windings size, core size, 12

and the transformer size. These data center 13

transformers are also have to supply the loads with 14

a lot of harmonics. And the data center 15

transforme rs normally form a buffer between the high 16

harmonic loads and the UPSs and the utility, and do 17

not allow all the harmonics to pass to the utility. 18

The harmonics is the bad news in any kind 19

of installations. These harmonics are

-- either 20

flow in the se condary transformer, not necessarily 21

in the primary, or if they are in the primary, they 22

are reduced. Because of that, the data center 23

transformers need to have a high K factor 24

characteristics. Normally the K factors on the 300 25Executive Court Reporters (301) 565

- 0064 148

KVA and below are about 20 , and about 300 KVA is 1

about 13, and then 750 and 1000 KVA, it is lower 2

than that. This is at 150 degrees rise. If you 3

have a rise lower than 150 degrees, the K factor 4

reduces. 5

What does exactly that mean? If you take 6

a 750 KVA transformer for example , and you load it 7

at a load with a K

- 13 load, the winding losses at 8

the K

- 1 to the winding losses at the K

- 13 load, they 9

are 300 time higher than the normal losses. That 10

means we have to cool this transformer quite a bit, 11

and that makes a lot of differenc es in the core 12

construction also. 13

As we were talking a little this morning, 14

what would be the width of the core for the smaller 15

transformers and we were talking about three inches, 16

four inches, but in the data center transformers we 17

had to go much wider width than that from the same 18

KVA because it increases the cooling area in the 19

ducts, and because of that, the core weight goes up, 20

also the core losses go up. And because of that we 21

have a difficulty meeting even today the TP

- 1 22

efficiency requirements. 23

If we go to the higher efficiency 24

requirements than TP

- 1, we may not be able to 25Executive Court Reporters (301) 565

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provide the transformers to the industry with the 1

performance requirement they are asking for. 2

The data center transformers are normally 3

put in the enclosure called PDU, a nd I’ve got some 4

pictures and I’ve got some prints that are here, and 5

there’s some pictures on the

-- Mr. Parker has on 6

his e

- mail

-- we can look at that if we want to. 7

But that will tell us how these transformers are 8

constructed. Normally, there is one transformer in 9

the data center, but sometimes we have two 10

transformers in the same cabinet. And one

-- you 11

can see here, one on the top and one at the bottom, 12

they’re in the same cabinet. 13

And if you look at the next picture, you 14

will find out there are two transformers side by 15

side that makes cooling a little difficult. I’m 16

sorry

-- okay? If you look at those two in that 17

picture, you can see the transformer at the bottom, 18

and a transformer at the top, and this is looking 19

from the back side of the unit, and the cooling is 20

only on the back side of the unit. There is no 21

cooling on the sides and there is no cooling in the 22

front. 23

The front, if you look at the next picture 24

-- I think they went in the other direction

-- yes. 25Executive Court Reporters (301) 565

- 0064 150

You see there are two transfo rmers again, side by 1

side in this one. And if you look on the top, there 2

are breakers and breakers need to be isolated from 3

the heat coming out from the transformers, otherwise 4

they will prematurely trip. We can go to the next 5

picture. 6

This is the fron t of one of the PDU units 7

and you can see that a panel was one on the top and 8

one on the bottom, and there is a metering, and 9

there is another panel board below the metering 10

also. And there is no way we can cool the 11

transformer from the front. There is a barrier 12

between the panel boards and the transformers. 13

Next. 14

We are going to a little different

-- this 15

is to tell you how the small manufacturing look, a 16

typical one. This is our core cutting area. What 17

you are facing is there are coils of the core 18

material and next to that there is the yellow 19

screens are the core cutting machines. Next. 20

This is our assembly area looking from one 21

end to another end. There is a gentleman standing 22

there with a white shirt assembly the core, the core 23

legs, and they go down there and further down he’s 24

assembling the yoke and the core legs together and 25Executive Court Reporters (301) 565

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that is miter cut core on that one he’s assembling. 1

Next picture. 2

Here is the winding machines. We use a 3

very sophisticated winding machines for winding the 4

foil (ph ) windings. A lot of this data center 5

transformers have a foil winding at the low voltage 6

as well as the high voltage to have a better cooling 7

and reduce the ... and the stray losses. 8

This is the area showing our fabrication 9

shop. We do enclosures there and also the punching 10

machine

-- automatic punching machine, brakes and 11

all those kind of things. 12

Here is the assembly of our data center 13

units, the PDUs, and you can see there’s hardly any 14

room to work over there. Next. 15

And here again we are going back to the 16

core cutting machines that are another view of that. 17

Here is again data center unit assembly area, and 18

there are different units. 19

Here is our test department. On the 20

transformers you are seeing in the test area are not 21

varnished. They ar e tested with all the test 22

required for UV requirement as well as the NC and UL 23

requirement and there after they’re varnished and 24

final tested again when they are put in the 25Executive Court Reporters (301) 565

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enclosure. The reason for testing those 1

transformers in this condition, before va rnish, if 2

something is wrong with the transformer we can 3

always open and repair it. The transformer you see 4

with the big transformer there on the right hand 5

side is actually a UPS transformer used in the UPS 6

cabinet for rectifier. It’s a 12 volt rectifie r 7

transformer. Next picture. 8

And again, this is another view of the 9

test area. This is a coil winding area. This is 10

just a view of the shop with the test area in front. 11

Here is the data center transformer 12

assembled, and you see looking at the back s ide of 13

it, and the transformer BUS box primary and 14

secondary are welded to the BUSes going to the 15

breakers and the panel boards. The reason for that, 16

there is no access to the back of the unit, and we 17

do not want any voltage joints in that area to be 18

main tained. So all of the things are welded and you 19

cannot take that transformer out, you have to take 20

the whole PDU out to replace it. And because of 21

that, we have to make sure the transformer is very 22

reliable. All the data center transformers have at 23

leas t minimum of two shields between the secondary 24

and the core and also between the secondary and the 25Executive Court Reporters (301) 565

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primary, that increases the insulation required 1

because there is insulation between the shield and 2

the secondary, and insulation between the shield and 3

the c ore, as well as the insulation between 4

secondary and the shield on the high voltage side 5

and also the insulation from the shield to the high 6

voltage winding. That’s one of the reasons this 7

transformer also become very costly. 8

This is area

-- you will se e this is all 9

the metering, monitoring of the equipment and the 10

controls of the breakers on the panel boards, and 11

the remote monitoring of the loads on the breakers 12

and all those kind of things. Next please. 13

This is data center transformer, another 14

one, which does not have a panel board, but if you 15

look at the very bottom, there is an input breaker. 16

Above that is a main secondary output breaker, and 17

there are eight breakers on the top which is going 18

to the panel boards at the remote locations in the 19

dat a center. 20

This is another view of the different 21

transformer, and you can see all the BUSes are 22

welded there. 23

This is what is the data center 24

transformers normally do, and let me see

-- we have 25Executive Court Reporters (301) 565

- 0064 154

put down some kind of stake for this thing as to how 1

we def ine the data center transformers, and in that 2

we said, up to K13 for transformers of the 300 KVA. 3

K

- 9 for 750 KVAs, and K

- 4 for a transformer over 750 4

KVA. 5

This is the minimum requirement and that 6

has to be verified by a third party like a UL or 7

anybo dy

-- an RTL kind of thing. You can’t just put 8

a label like that, we have to be verified. 9

Transformers to have minimum of two or more shields, 10

and item number three, we are talking about we had 11

to put an instruction plate which is not requirement 12

but we are thinking that it should be put an 13

instruction plate that this transformer is designed 14

for the IT kind of thing, and it’s unlawful to use 15

for any other purposes. 16

We normally put on our transformers, 17

although it is not required, on the TP

- 1 transform er 18

that this is a distribution transformer and this 19

meets the requirements of DOE. Other transformers 20

which are not under the current DOE regulation, we 21

put a nameplate telling this is a transformer to be 22

used with the UPSs and everything, and it is 23

unlaw ful to use for any other purposes. So we put 24

that on all although it is not a legal requirement. 25Executive Court Reporters (301) 565

- 0064 155

In addition to the clear requirements we 1

put up front, on the top, fourth one is one of the 2

following requirements has to be there to qualify as 3

a data cent er transformer. And that is ... inrush 4

current four times or less of the full load current. 5

Temperature rise 130 degrees Centigrade or less. 6

Primary winding and a secondary winding

-- both 7

windings having interwinding connections other than 8

delta are Y. We are normally getting lot of 9

requests of

-- and we are selling the transformers 10

which has got two secondary windings and they’re 11

face

- shifted 30 degrees apart from each other so 12

that the harmonics are reduced, reflected to the 13

primary and to the utility. 14

MR. PATZNER: Thomas Patzner, Schneider 15

Electric. This is the

-- Point C is the potential 16

point to differentiate them from distribution 17

transformers. Vijay is outputting two voltages, but 18

they’re equal so that’s why we couldn’t use the 20 19

percent TAP exception that exists today, because 20

both voltages will be equal, even though there’s two 21

separate windings. Normally when we have two 22

separate outputs on the transformer, the voltages 23

are different, which is part of that 20 percent, 24

exception for TAPs wh ere when we would add a 25Executive Court Reporters (301) 565

- 0064 156

completely separate winding it’s almost always for a 1

second voltage. In this case, Vijay’s adding the 2

entire second voltage output and face

- shifting it 3

for the data center, so it’s different, but because 4

it’s at the same voltage it doesn’t fall into one of 5

the existing exclusions, but it has losses and so 6

forth. 7

MR. TENDULKAR: Losses and costs, both. 8

MR. PARKER: Rob has a question. 9

MR. GREESON: Rob Greeson, Federal 10

Pacific. The definition of a distribution 11

transformer says , a secondary. You’re talking two 12

secondaries? 13

MR. TENDULKAR: Yes. 14

MR. GREESON: It’s exempt. That’s the way 15

I interpret it. 16

MR. TENDULKAR: Well, one of the

-- 17

MR. GREESON: So if it’s got two 18

secondaries is it not already exempt

-- that 19

partic ular type? 20

MR. TENDULKAR: It was not very clear when 21

I looked at it. We’re looking at a word “a” only 22

and then say yes, only one secondary. But there is 23

no clear assumption written down that with more than 24

one secondary in the one ... 25Executive Court Reporters (301) 565

- 0064 157

Anyway, coming b ack

-- go ahead. 1

MR. FERNSTROM: Vijay, Gary Fernstrom, 2

PG&E. I have a question too. You were making the 3

point that these transformers need to deal with a 4

lot of harmonics on this secondary, and they 5

consequently dissipate some energy. Can’t harmonic 6

filters be used and if not, why not, to reduce the 7

harmonics actually needing to be dissipated in the 8

secondary? 9

MR. TENDULKAR: Harmonic filters can be 10

used and they

-- many are more and more equipments. 11

You need more and more space, and again, they ha ve 12

more and more losses kind of things. Harmonics 13

filters a lot of losses too. And harmonic filters 14

are not as reliable as the transformer is. We make 15

inductors for the harmonic filters for the UPS 16

industry, and as you know, the harmonic filters have 17

a capacitance and the inductors. And normally these 18

are series connected devices, filters, and the 19

capacitor starts failing. If one capacitor fails it 20

tunes the frequency to higher frequency, and 21

eventually even the reactor fails. This has 22

happened quite often. And that’s the reason we try 23

normally not to use the filters in this kind of 24

area. The reliable power requirement, we don’t want 25Executive Court Reporters (301) 565

- 0064 158

to use the filters. 1

MR. FERNSTROM: Okay. Thank you. 2

MR. TENDULKAR: Item D is there are two

-- 3

MR. PARKER: If I could just recap for a 4

second. In response to Rob’s question about whether 5

these data center transformers may be already 6

exempt, your response was? 7

MR. TENDULKAR: We did not take any 8

exemption b ecause there was no clear cut wording to 9

that effect. 10

MR. PARKER: Rob, did you want to come 11

back? 12

MR. GREESON: Rob Greeson, Federal 13

Pacific. Let me understand this. The two 14

secondaries

-- are you then tying those two 15

secondaries in parallel with one another? 16

MR. TENDULKAR: No. 17

MR. GREESON: Or a re they going to 18

separate circuits? 19

MR. TENDULKAR: The two secondaries are 20

going to two separate loads. They are face

- shifted 21

so they cannot be parallel. It’s something like a 22

delta and Y connection kind of situation, but both 23

of them are Y connected, but they are not exactly 24

simple Y, it is a dog

- leg Y kind of thing. 25Executive Court Reporters (301) 565

- 0064 159

MR. GREESON: Well we’ve not run into

-- 1

Rob Greeson, Federal Pacific

-- this exact 2

particular thing, but we’ve always interpreted the 3

definition of a distribution transformers, when 4

yo u’re talking about the single

- phase where you have 5

the reconnectable windings, the 120/240, you’re 6

connecting both those windings together for one 7

secondary, so it’s not really the same thing as this 8

is truly more than one secondary. The test 9

standards ar en’t set up to cover it. The definition 10

says “a secondary.” I would

-- if that transformer 11

came across my desk I would have said it was 12

exempted based on the fact that it had the two 13

secondaries on it. 14

MR. TENDULKAR: Thank you. 15

MR. GREESON: That wo uld have been my 16

interpretation, based on what we know now from the 17

definition, and

-- but that’s what I would say about 18

that, thanks. 19

MR. PARKER: Tim Ballo. 20

MR. BALLO: Tim Ballo, Earth Justice. 21

Just to be clear, the definition of distribution 22

trans former, both in the statute and in DOE 23

regulations, refers to an output voltage, I’m not 24

sure where you derive the word secondary from. Or 25Executive Court Reporters (301) 565

- 0064 160

the limitation to a single secondary. 1

MR. GREESON: I’m going to bring that up 2

and look at that. You may be

-- i f it’s an output 3

voltage, that’s still singular. 4

MR. PATZNER: But the voltage is the same 5

on this device

-- Thomas Patzner, Schneider Electric 6

-- so I would interpret that a 2

- way Y and a 30 7

degree face

- shift 2

- way Y is a output voltage. So I 8

would hav e interpreted that it had to comply, 9

because the voltage is equal, so it’s

-- you’re 10

selling the device to feed two 208 distribution 11

panels, 30 degrees apart. But if

-- if the current 12

law allows us to allow the 30 degree face

- shift 13

device to already be ex cluded, it makes this data 14

center discussion a lot easier, because our major 15

concern is that it would not substitute a 16

transformer feeding a distribution panel. If the 17

data

-- when the data centers are feeding two 18

distribution panels, the marketplace has not 19

embraced that and don’t know how to substitute it. 20

MR. PARKER: So could

-- could Vijay, Rob, 21

Tim and Tom converse off line after this meeting and 22

kind of work this out and report to us as soon as 23

they have an answer, that would be very helpful. 24

Th ank you. 25Executive Court Reporters (301) 565

- 0064 161

MR. TENDULKAR: Sure do. 1

MR. SMITH: Vijay, Bob Smith. Could this 2

transformer

-- 3

MR. PARKER: Excuse me just a second, Bob. 4

It might have gone without saying, but should not go 5

without saying, that Dan Cohen at the Department has 6

a very c apable legal staff and may be able to help 7

with this discussion as well. So you should bring 8

him into the loop, and I’m sure you will. Go ahead, 9

Bob. 10

MR. SMITH: Vijay, could this transformer 11

be considered a rectifier transformer? 12

MR. TENDULKAR: It is constructed like a 13

rectifier transformer. It could be used as a 14

rectifier transformer, but it has got standard 15

distribution voltage of 208 volt or something like 16

that, and that is

-- normally, the rectifier 17

transformers have a voltages which are normal ly not 18

standard voltages. For example, we have got a UPS 19

transformer, rectifier transformer, primary voltage 20

is 480 and there are two secondary voltages of 465, 21

30 degrees face

- shifted, to get something like an 22

800 volt DC. So the rectifier secondary vol tages 23

are based on what the DC BUS voltages are. But yes, 24

it can be used as a rectifier transformer. 25Executive Court Reporters (301) 565

- 0064 162

MR. SMITH: As you know, rectifier 1

transformers are exempt. 2

MR. TENDULKAR: Exactly. You’re 3

absolutely right. The rectifier transformers are 4

exempt, but these transformers are not supplying 5

rectifier

-- if you go in a strict legal definition, 6

they are supplying the panel boards and supplying 7

the loads which are normal distribution loads in the 8

data center. So as far as I’m concerned, I’m in a 9

dilemma how to interpret this. You know, you are 10

absolutely correct, it is a rectifier transformer 11

because most of these servers have rectifiers inside 12

them, but the servers are not considered rectifiers. 13

(Two speaking on phone at same time.) 14

MR. PARKER: E xcuse me, we have two people 15

talking at once. We had two people talking at once, 16

I couldn’t even make out who is talking. 17

MR. GREESON: Phil Ling and Bob. 18

MR. PARKER: Bob

-- why don’t we have Bob 19

Smith talk first. 20

MR. SMITH: Bob Smith, Federal Pac ific. 21

The harmonics in the load chart are coming from 22

somewhere, namely some sort of a rectifying device, 23

whether it’s a variable stage drive or just a plain 24

rectifier. It seems like you ought to be able to 25Executive Court Reporters (301) 565

- 0064 163

get your transformer exempt on the basis of the type 1

of load that it’s serving. 2

MR. PARKER: Okay. So we have a group 3

formed to explore that issue. Anybody who has an 4

interest in this or who has expertise in this, even 5

if they don’t have an economic interest in it, and 6

is willing to share it, pleas e communicate with 7

Vijay, Tim Ballo, and Tom Patzner and Rob Greeson, 8

and let’s see if we can get a handle on that as 9

quickly as possible. 10

Meanwhile, in the event that these are not 11

exempt, perhaps

-- already

-- perhaps we can just 12

spend a few minutes discussing what distinguishing 13

characteristics of the product might be focused on 14

to provide a basis for a carve out, assuming that 15

they are not

-- in the event it turns out that they 16

are not already exempt. Remember, a nameplate that 17

says it is unlawful to use, don’t help. Discussions 18

about applications don’t help. There needs to be, 19

as I understand it, and I’m a lawyer, but not in 20

this area, but as I understand it, there has to be 21

something

-- a physical distinction in the product 22

itself that one can point to and one can put into 23

the standard, and that distinction has to insure 24

that these units are not used for non

- data centers, 25Executive Court Reporters (301) 565

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thereby circumventing the purpose of the standard. 1

So if you could just spend a few minutes 2

addressing that issue, I think it would be very 3

helpful, and perhaps these A through D do that, but 4

do they actually prevent circumvention, I guess that 5

is the question. 6

MR. FERNSTROM: Richard, quick comment. 7

Gary Fernstrom, from PG&E. I don’t know that 8

exemption is necessarily the answer. I think we 9

ought to investigate the extent to which this 10

special category of transformer can have its 11

efficiency improved or not. Because, let’s face it, 12

there’s a lot of load associated with data centers. 13

It’s increasing. And I’m interested in , you know, 14

where we are with the efficiency of that product now 15

and where we could be. 16

MR. PARKER: Fair enough. Even if data 17

centers might have a higher standard than today, but 18

not as high a standard as other transformers, that 19

still raises the quest ion of circumvention, though, 20

so of course

-- 21

MR. TENDULKAR: Let me answer that 22

question to comment one moment. You’re absolutely 23

right about that. The

-- one other thing is we do 24

not want the harmonics to be reflected to the 25Executive Court Reporters (301) 565

- 0064 165

utility, that is one of the things we are interested 1

in because utilities don’t like harmonics. That’s 2

one thing. The second part is the data center 3

transformer which I was going to come back later on, 4

but I will mention it now, are not typically 5

cyclically loaded during the d aytime. They are 6

continuously loaded, 24/7, 365 days a year for ten 7

years, whatever the life of the data center is. And 8

I was, after I wrote my things, I had given to our 9

general manager who has designed the data centers 10

and one of our sister companies, is designing the 11

data centers, to put in the container

-- shipping 12

containers kind of things. So we know some of those 13

things. 14

According to him, they are loaded around 15

80 percent of the full load capacity. And the trend 16

is to go towards 100 percent l oad. I don’t think 17

they will go to 100 percent load. Now if we deign 18

the transformer to meet the current efficiency 19

requirement at the high efficiency of 35 percent 20

load, that makes the core losses lower and the 21

winding losses higher, and the winding los ses 22

higher, if you increase the core loss by one watt, 23

you can increase the winding losses by three watts

. 24

And that has got a big advantage in shifting our 35 25Executive Court Reporters (301) 565

- 0064 166

percent load point for efficiency to somewhere 1

higher, something like a 60, 65 percent, where th e 2

efficiency should be higher. So that’s another 3

thing we should be thinking about these transformers 4

in a different light. 5

MR. FERNSTROM: So, Vijay, Gary Fernstrom, 6

PG&E. Our experience corresponds with what you’re 7

saying. Many of these new data ce nters are not 8

fully loaded when they’re built, but after they’re 9

built up to full capacity, they are running 60 to 80 10

percent load. 11

MR. TENDULKAR: The other important thing 12

about these data center transformers and people 13

don’t really understand that som etimes, I can design 14

a distribution transformer as low as about a quarter 15

inch clearance from the windings to the ground on 16

the ends. We are normally providing about five

17

eighth inches to three

- quarter inches clearances to 18

the ground, and also somewhere e lse’s . The reason 19

for that is if the data center transformer fails, 20

you have dire consequences. The data center, if it 21

fails, you have to get an alternate source and you 22

can get it up, even if you have alternative server 23

immediately, it may take six to e ight hours for the 24

data center to come back again on the line. Just 25Executive Court Reporters (301) 565

- 0064 167

imagine I’m leaving this afternoon on American 1

Airlines and their data center goes down. I may not 2

be able to fly home today. So those are the 3

consequences we have to think about when w e talk 4

about the data

-- the reliability is very important 5

on these transformers. 6

PARTICIPANT: You still have Philip on the 7

line. 8

MR. PARKER: Oh, sorry, Philip. 9

MR. LING: Yes, thank you. I guess a 10

couple of things. It seems

-- we do a lot of 11

bus iness in the data center world, and there’s 12

really more than AD to center transformer. Some of 13

the data center designs, a lot of them, an A BUS, B 14

BUS, which inherently will never be loaded more than 15

50 percent, or run more typically around 35 percent. 16

T hat’s obviously a different scenario than the ones 17

that get loaded up for 80, 100 and added in the 18

distribution. 19

The second thing is that

-- I mean we’re 20

shipping

-- we shipped all those configurations, a 21

low end rush, which is obviously a common 22

require ment for a data center; the dual output 23

configurations as well, and we’re typically shipping 24

EL

- 2 level performance 100 KVA and above. So it’s 25Executive Court Reporters (301) 565

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not a problem to do. 1

The other thing is in terms of harmonic 2

profile, there’s a big variance in terms of harmo nic 3

profile in there. A lot of the servers currently 4

being used are less than ten percent current 5

distortion which is about a K1.2 or 1.3. So a lot 6

of legacy requirements or specification like a ... for 7

high K factor transformers, but a lot of the new 8

data centers going in where specification is calling 9

for K

- 4 aluminum. The transformers are outside the 10

data center floor, and they’re acknowledging that a 11

ten percent current load distortion environment. 12

So there’s not one data center, one 13

application, t here’s a variety of situations. 14

What’s in common is we are able to deliver high 15

efficiency across all of those markets, even in the 16

multiple ... transformers. 17

MR. PARKER: Tom, would you like to 18

respond? 19

MR. PATZNER: Thomas Patzner from 20

Schneider Elect ric. I concur that there is multiple 21

designs. I asked for a document from Schneider 22

Electric to be uploaded to the Sharepoint, and in 23

the summary it’s going to say that there’s at least 24

50 different ways data centers choose to use 25Executive Court Reporters (301) 565

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transformers. We, as a company, recommend ten 1

different configurations today, and that document 2

actually goes through all the different potentials. 3

And as a company chooses to do a data center, they 4

choose what is best for their outputs in which way 5

to use the transformers. I think that’s been the 6

biggest issue with trying to break out the data 7

centers to come up with the definition, is the fact 8

that the data center market, depending on if you’re 9

talking to Microsoft, or if you’re talking to a 10

manufacturer, or a company who’s putting in the data 11

center themselves, the way that the transformer 12

needs to be designed is different. 13

The document’s up on the slide right now. 14

If you just go to the very last page, I think it’s 15

the second to the last. So here’s the conclusion 16

and a s you can see, the paper has identified over 50 17

different arrangements of transformers that can be 18

used in a UPS system. Ten are identified as 19

preferred solutions. Now, once again, that’s 20

Schneider Electric’s opinion of those preferred 21

solutions. But i f you go through these 26 pages 22

you’ll see the different ways that transformers can 23

be done, and that’s the biggest concern is some of 24

these ways are using off

- the

- shelf distribution 25Executive Court Reporters (301) 565

- 0064 170

transformers . So from our perspective, when they’re 1

choosing

-- the conf igurations that choose to use 2

off

- the

- shelf distributions need to still be in 3

compliance. It’s when we get into the designs that, 4

like Vijay has, with the dual output, that there is 5

the potential need to address them differently. 6

Thank you. 7

MR. TENDU LKAR: This is Vijay

-- 8

MR. LING: This is Philip at Powersmiths. 9

Just sort of a last comment in there, is I think 10

unlike the commercial environment, the data center 11

environment, because it’s not just that it runs 12

7/24, but pretty much if you look at t he data, it’s 13

a watt of cooling per watt of heat loss. So when 14

you think of exempting or lowering the threshold of 15

requirement in that market, that’s a market with a 16

great pay

- back. The rate interest in squeezing out 17

watts out of their system, because it ’s a one

- for

18

one, or two

- for

- one

-- every watt of reduced 19

transformer loss is two watts, because you get the 20

cooling watt as well. So there’s a whole green grid 21

organization

-- there’s a whole greening of the data 22

centers is moving very quickly, so I wo uldn’t exempt 23

it, and transformers ... 24

MR. TENDULKAR: This is Vijay from Onyx 25Executive Court Reporters (301) 565

- 0064 171

Power. I totally agree with you that the 1

transformer losses have to be taken out, but the 2

cooling system in the transformer has got more 3

losses, and the cooling system has to w ork harder, 4

so you need a bigger cooling system. But, again, 5

each data center is different, and we are dealing 6

with also the people who are asking for the 7

transformers with the high K ratings. At this 8

moment, I’m designing 1000 KVA with K

- 13 load power 9

k ind of thing. Now, if the customer specifies that 10

he wants 1000 KVA K

- 13, we have to provide him with 11

that transformer and that transformer has to be 12

tested to the UL 561 standard to provide those kind 13

of losses and still be cooled at whatever the 14

tempera ture rise we set. It is a 130 degrees rise 15

transformer. 16

Now, that kind of transformer is very 17

difficult to design and still meet the TP

- 1 18

efficiency with the 400 magnetizing current. 19

MR. PARKER: Andrew. 20

MR. DeLASKI: This is Andrew, and I feel 21

like we’re kind of getting at a plenary session here 22

and pretty foreign to the details that are quite 23

important. But what I’m hearing, what I’m taking 24

away from this conversation is that this initial 25Executive Court Reporters (301) 565

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rubric of data center transformer was just too 1

broad. So w hat we need to do is identify what are 2

the engineering characteristics of these products 3

that make them highly specialized, to provide a 4

highly specialized need, and that can be identified 5

in a product. And that’s different than simply the 6

term “it’s a d ata center transformer.” It’s 7

something different. And that’s not saying what 8

that something is right here today, that’s what we 9

have this technical subgroup to work on. 10

MR. PARKER: Yeah. 11

MR. TENDULKAR: Let me answer that again. 12

In the beginning , I put down some conditions, and 13

you had to meet those conditions to qualify the data 14

center transformer. If the load is a K

- 1 or a K

- 2 15

or something, and you’re making a transformer from 16

that, it will not be qualified as a data center 17

transformer, becaus e your K factor of that 18

transformer is less than what is specified in those 19

conditions. It has to be K

- 20 at the

-- below 300 20

KVA, K

- 13 for 300 KVA,

-- I’m sorry, K

- 13 up to 300 21

KVA. If you have less than that, it is not a data 22

center transformer. Those are the minimum 23

requirements we have. 24

MR. PARKER: Well, I think

-- 25Executive Court Reporters (301) 565

- 0064 173

MR. DeLASKI: I’m not a designer. I’m 1

looking to you guys to

-- 2

MR. TENDULKAR: Yeah, I understand that. 3

I understand that. I was just answering the 4

previous question . 5

MR. PARKER: Right. I think we need to

-- 6

I think we’ve gone

-- well, Wes, do you have 7

something very quickly? 8

MR. PATTERSON: Yes, I’d also like to 9

mention that this discussion also plays over on 10

medium voltage dry type. It’s not restricted to low 11

voltage . Everything that he’s talking about also 12

applies to 5 and 15 KVA transformers. So one 13

question that I would have is what is the market 14

size that we are talking about here? I’ve not heard 15

it in the discussion anywhere. 16

MR. TENDULKAR: I do not know t he market 17

size at this moment, but I do not think it is a very 18

big market size, compared to total distribution 19

market. 20

MR. DeLASKI: And again, a little 21

inconsistency on that, because in the last meeting, 22

the number was put forward as some very significa nt 23

percentage of US power use goes to power data 24

centers. Right. So, and one of the industry 25Executive Court Reporters (301) 565

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representatives last time put out quite a large 1

number, and I think that’s consistent with some of 2

the work done on the greening data centers, is that 3

there is a lot of power being used by data centers 4

in the United States. The question is, what portion 5

of that is being used by the distribution 6

transformers

-- or the transformers that are being 7

proposed to be exempted, or to have a lower 8

standard, and what portio n is being used by ones 9

that are proposed to be covered. That’s kind of the 10

thing we have to disaggregate. 11

MR. PATZNER: Thomas Patzner from 12

Schneider Electric. There’s been a lot of work on 13

the amount of power that goes to data center. The

- 14

- if we c an get the same split as we did with the 15

commercial building, where we see how much is going 16

to lighting, how much is going to HVAC, all the rest 17

will be feeding the servers. And the portion that’s 18

feeding the servers is going to 100 percent flow 19

through the transformers. So, if they have the 20

splits, which I think they should because they break 21

up, for commercial buildings they have HVAC, they 22

have lighting, and then they have other, and in data 23

center markets, the other is the servers. They 24

don’t put an y other devices in the building. So it 25Executive Court Reporters (301) 565

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would be easy to get the amount of energy that has 1

to be flowing through the transformers. And then if 2

we assume the transformers are three percent loss, 3

we can determine what the energy impact would be. 4

MR. PARKE R: So, thank you. I think we 5

need to conclude our discussion of data centers with 6

that. And I think the charge for the group is 7

pretty clear, it’s to 8

**•** give us the information that you can get on the 9

size of the market; 10

**•** it’s to provide some technical sp ecifications 11

that distinguish the products that you want a 12

special standard for from off

- the

- shelf 13

products; 14

**•** and a demonstration to the satisfaction of the 15

other experts around the table at least, that 16

this will

-- that these specifications will 17

insure th at these transformers are not used in 18

non

- data center applications. 19

**•** And finally, a proposed differential standard, 20

which may be zero, may be above zero, but what 21

special treatment you would propose. 22

We have a call now set up for December 23

20 th . We would need your report, I think, several 24

days in advance of that call in order to be able to 25Executive Court Reporters (301) 565

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take it on board, so I think we should aim for 1

December 14 th

If we have that and it meets the legal 5

requirements, I think we’re in business and we can 6

attend to that fairly expeditiously on the call. 7

And if we don’t, we can’t. It’s about as simple as 8

that. So with that, I think, unless there’s 9

anythin g else that we urgently need to cover now, we 10

can conclude. John. 11 for receiving your report so that we

2

could have some discussion and so there could be 3

some adjustments to th e report. 4

MR. CASKEY: John Caskey, NEMA. Just a 12

quick question. Is there somebody that’s going to 13

work with this group, mostly manufacturers plus Tim, 14

from Navigant or LBL that can help with the market 15

size? 16

MR. PARKER: Mike? Is there somebody from 17

Navigant that can help with this issue? About the 18

market size? Mike will furnish a resource for the 19

group. 20

MR. RIVEST: LBL might already have the 21

data. 22

MR. PARKER: Great. Thank you. A use ful 23

discussion, thank you everybody for coming, and 24

putting your cards on the table with the last day 25Executive Court Reporters (301) 565

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and a half, or I guess it’s just been a day. But 1

it’s been very helpful, very productive. It’s been 2

great working with you all. I’m not sure if we’ll 3

m eet in person again, but I really enjoyed the 4

chance to meet you all and I hope that we can work 5

out the remaining issues and arrive at a consensus 6

conclusion at the end of the day, hopefully on 7

December 20 th

So thank, ever ybody, have a very enjoyable 9

lunch. Enjoy Washington on a beautiful day if your 10

plane schedules allow it and we’ll see you later. 11

Take care. 12 , or very shortly thereafter.

8

(Whereupon, at 12:40 p.m., the meet ing in 13

the above captioned matter was adjourned .) 14

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**REPORTER'S CERTIFICATE** 

This is to certify that the attached proceedings

before:

**U.S. DEPARTMENT OF ENERGY**

In the Matter of:

**MEETING of the LV WORKING GROUP** 

Were held as herein appears and that this is the

original transcript thereof for the file of the

Department, Commission, Board, Administrative Law

Judge or the Agency.

Further, I am neither counsel for or related to

any party to the above proceedings.

Official Reporter 

### Wendy Greene

Dated: December 9, 2011