From: Kenneth Winder [mailto:kwinder@mleainc.com]

Sent: Wednesday, November 16, 2011 12:17 PM

To: Jerry Hodge

Cc: Richard Parker; Corkran, Jerry L; Caitlin Johnson; rick.anderson@faypwc.com; tballo@earthjustice.org; ScottB@lvmetals.com; john.caskey@nema.org; jo hn.cymbalsky@ee.doe.gov; adelaski@standardsasap.org; Teckman@nwcouncil.org; gbf1@pge.com; carlos.gaytan@ge.com; rgreeson@federalpacific.com; bruce.r. hirsch@bge.com; mhyland@appanet.org; dave.millure@metglas.com; Nadel, Steve; wes.patte rson@us.abb.com; Eric.Petersen@aksteel.com; Raymond.Polinski@atimetals.com; rroy@ nrdc.org; robert.saint@nreca.coop; chuck.simmons@pgnmail.com; mark.stoering@xcelener gy.com; cabolduc@lbl.gov; kcoughlin@lbl.gov; Brian Coffey; gjrosenquist@lbl.gov; Rosenstock , Steven; Michael Rivest; jrossetti@mlgw.org; Jim.creevy@nema.org; Meyers, Aaron; Daniel.C ohen@hq.doe.gov; jmau er@standardsasap.org; greg.coulter405@gmail.com; bsmith@federalpacific.c om; pkumar@publicpower.org; Trujillo, Antonio; Phil Hopkinson; ahofmann@publicpower.org; Berman Economics@gmail.com; Paul.Ryan@hitmet.com; jerry.schoen@aksteel.com; mwaltner@nrdc.org; chad.kennedy@us.schneider-electric.com; Kampa,
Michael; Marusinec, Richard M Subject: Re: Used Distribution Transformer market and prices

Jerry and Everyone:

Re-manufactured or Rebuilt distribution tran sformers are not subject to any minimum or other efficiency requirements imposed by DOE. It is my understanding that DOE's legal counsel eliminated any regulation of this used transf ormer market during the last Rule Making. The company that gave me the information a bout the used transformer market said that they improve the efficiency of transformers that they rewind in the cases where the original transformer had aluminum windings because they replace those with copper windings. They may rewind a unit that had copper original windi ngs with new copper windings that may have lower losses since they use advanced insulation that is improved and thinner than that commonly found in the original windings, and that situatio n could allow more copper in the same space and

that should decrease winding losses slightly. Of course, they can measure losses of units being sold, but it is my opinion, from the conversation, that these transformers are not so ld based upon low losses. Units are sold on the basis of first cost only, and there wo uld not be any eval uation of losses.

Ken

On 11/16/2011 9:42 AM, Jerry Hodge wrote:
Ken an All:

Your information on the used transformer market is very interesting and enlightening. It

sounds like the rebuilders are doing a booming business.

In your discussion with this rebuilding fi rm, did they say anything about transformer efficiency? When they rebuild a unit, is it upgraded to meet the DOE Efficiencies? Do they say that they need to meet the DOE ef ficiencies or do they just not worry about efficiency?It's not clear to me if DOE r equires any efficiency levels from a rebuilt transformer. I am trying to find out if there are any DOE efficiency requirem ents on rebuilt transformers. Navigant is trying to find out, what if any, are the efficiency requirements for a rebuilder.

It's also interesting to note t hat their prices are close to our new units that do require meeting DOE efficiencies.

Thanks for the informati on, I appreciate it.

Jerry

Jerry Hodge Consulting Engineer, E.E., M.S., P.E.
Retired V.P. & G.M. of Pole Type Transformer & Regulator Div.

Howard Industries Inc.
P.O.Box 1588 Laurel, Ms, 39440

601 422-1539 Bus.
484 226-6190 Cell

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-----Original Message-----

From: Kenneth Winder [ mailto:kwinder@mleainc.com ]

Sent: Tuesday, November 15, 2011 5:31 PM

To: Richard Parker

Cc: Corkran, Jerry L; Caitlin Johnson; rick.anderson@faypwc.com ; tballo@earthjustice.org ; ScottB@lvmetals.com ; john.caskey@nema.org ; john.cymbalsky@ee.doe.gov ; adelaski@standardsasap.org ; Teckman@nwcouncil.org ; gbf1@pge.com ; carlos.gaytan@ge.com ; rgreeson@federalpacific.com ; bruce.r.hirsch@bge.com ; mhyland@appanet.org ; dave.millure@metglas.com ; Nadel, Steve; wes.patterson@us.abb.com ; Eric.Petersen@aksteel.com ; Raymond.Polinski@atimetals.com ; rroy@nrdc.org ; robert.saint@nreca.coop ; chuck.simmons@pgnmail.com ; mark.stoering@xcelenergy.com ; cabolduc@lbl.gov ; kcoughlin@lbl.gov ; Brian Coffey; gjrosenquist@lbl.gov ; Rosenstock, Steven; Michael Rivest; Jerry Hodge; jrossetti@mlgw.org ; Jim.creevy@nema.org ; Meyers, Aaron; Daniel.Cohen@hq.doe.gov ; jmauer@standardsasap.org ; greg.coulter405@gmail.com ; bsmith@federalpacific.com ; pkumar@publicpower.org ; Trujillo, Antonio; Phil Hopkinson; ahofmann@publicpower.org ; BermanEconomics@gmail.com ; Paul.Ryan@hitmet.com ; jerry.schoen@aksteel.com ; mwaltner@nrdc.org ; chad.kennedy@us.schneider-electric.com ; Kampa, Michael; Marusinec, Richard M Subject: Re: Used Distribution Transformer market and prices

Richard and Colleagues:

Discussion with a national firm involved w ith the used-distribution transformer market has provided a look into what is pres ently happening there. Accordi ng to them, the used transformermarket has certainly been impacted by the Ru le making on efficiency effective on January 1, 2010. The demand for used transformers has escalated rapidly.

There are basically three (3) categories for used distributio n transformers described as follows per discussion with them: Category I: Distribution transformers that have been purchased as used equipment from industry and utilities that have cores in operating condition. The original primary and secondary windings are both removed and are replaced with new windings of copper. Insulating fluid is replaced, original tank is re-use d but is re-painted, bushings ar e replaced, new gaskets installed,

etc. This rebuilt transformer is tested and sold at approximately the same cost (maybe slightly higher) than newly manufactured tr ansformer prices available at large-quantity purchases at the present minimum efficiency standards. Category II: Distribution transformers that have been purchase d as used equipment from industry and utilities that are wo rking properly and do not require un-tanking. Insulating fluid is replaced, re-gasketed, original ta nk used but is re-painted, bush ings are replaced, etc. This

rebuilt transformer is tested and sold at be tween 60 and 75% of new transformer cost. Category III: Owners of distribu tion transformers send their used transformers to maintenance shops for minor repairs, fluid repl acement, re-painting, replacement of bushings, gaskets, etc. Cost for such repairs and transpor tation costs to and from shop are acceptable up to a set level (not to exceed 50% of new cost as an example). If transformer maintenance and improvements are estimated to ex ceed that value, the maintenan ce shop buys the unit and it may end up in Category I above or be scrapped and salvaged depending upon its condition.

The owner's of this nation-wide business expressed their excitement about the prospective business that will be created for them as pri ces increase for newly manufactured distribution

transformers.

Ken

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### Kenneth A. Winder, P.E.

Manager-Engineering

Moon Lake Electric Association 800 W Hwy 40

PO Box 278

Roosevelt UT 84066

435.722.5406 Office435.724.1539 Cell

435.722.5466 Fax

E-Mail: kwinder@mleainc.com

Web Site: www.mleainc.com