1

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

UNITED STATES DEPARTMENT OF ENERGY

+ + + + +

PUBLIC MEETING ON ENERGY CONSERVATION STANDARDS

FOR

COMMERCIAL REFRIGERATION EQUIPMENT

+ + + + +

TUESDAY

MAY 16, 2006

+ + + + +

The meeting was convened at 9:00 a.m. in

room 1E-245 at US Department of Energy Headquarters,

1000 Independence Avenue, SW Washington, DC, Bryan

Berringer, moderating.

PRESENT:

BRYAN BERRINGER

MIKE CHRISTOPHER

THOMAS DePRIEST

BILL GOETZLER

RONALD LEWIS

CHARLES LLENZA

CHRIS MACMINN

ARIS MARANTAN

FRANCINE PINTO

JIM RABA

MIKE RIVEST

SRIRAM SOMASUNDARUM

DAVE WINIARSKI

EE-2006-STD-0126 COMMENT 03.4
2

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

MEMBERS OF PUBLIC PRESENT:

KARIM AMRANE, Air Conditioning & Refrigeration

Institute

CHRIS BALESTRINI, Food Processors Association

RICHARD BIENVENU, Ingersoll Rand/Climate Control

Technologies

DONALD BRUNDAGE, Southern Company Services

ANDREW DELASKI, Appliance Standards Awareness Project

THOMAS ECKMAN, Northwest Power and Conservation

Council

BRUCE HIERLMEIER, Zero Zone, Inc.

LARRY HOWINGTON, Hill Phoenix

MARSHALL HUNT, Pacific Gas & Electric

WILLIAM KISTNER, Carrier Corp.

SCOTT MITCHELL, Refrigeration and Thermal Test Center

STEVEN NADEL, American Council for an Energy Efficient

Economy

BILL PAYNE, Johnstone Supply

MARY SAROKA, Carrier Corp.

ROBERT TANNER, Hill Phoenix

BILL TRITSIS, Air Conditioning & Refrigeration

Institute

EE-2006-STD-0126 COMMENT 03.4
3

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

I-N-D-E-X

Welcome..................... 3

Opening Remarks, Introductions, and Agenda 

Review .................. 4

Introduction and Analytical Methodology . . . . . 13

Market and Technology Assessment . . . . . . . . 18

Screening Analysis and Engineering Analysis . . 100

Markups for Equipment Price Determinations, . . 134

Energy Use and End-Use Load Characterization

and Life-Cycle Cost and Payback Period

Analysis.

Shipments Analysis and National . . . . . . . . 184

Impact Analysis

Revisions to ANOPR Analyses and LCC . . . . . . 195

Subgroup Analysis

Manufacturer Impact Analysis . . . . . . . . . 197

Utility Impact Analysis, Employment Impact . . 205 

Analysis, Environmental Assessment, and

Regulatory Impact Analysis

Other Issues and Comments/Closing Remarks . . . 208

Adjourn

EE-2006-STD-0126 COMMENT 03.4
4

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 P-R-O-C-E-E-D-I-N-G-S

2 9:06 A.M.

3 MODERATOR BERRINGER: Good morning and

4 welcome. Can everybody hear me okay? Court reporter,

5 are you picking up all right? Great.

6 Good morning. This is the Energy

7 Conservation Standards for Commercial Refrigeration

8 Equipment Workshop today. I'd just like to welcome

9 everybody here. I will be facilitating today. My

10 name is Bryan Berringer. And I'll ask if you sit at

11 the table, if you have your company name, if you

12 haven't written your name on your little sign out

13 front, it will help the court reporter to record that.

14 Also, as you're speaking, we're going to

15 do informal introductions a little bit later on, but

16 make sure you speak into the microphone and state your

17 name before you speak, name and company name. That

18 will help the court reporter.

19 And then just this morning we're going to

20 have -- we'll introduce Ron Lewis, the supervisor of

21 the Regulatory Group. He's going to have some

22 opening remarks, along with Jim Raba, the team lead

23 for the Commercial Refrigeration. 

24 So Ron?

25 MR. LEWIS: Good morning. I want to

EE-2006-STD-0126 COMMENT 03.4
5

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 welcome you all today on behalf of the Building

2 Technologies Program. I'm very hopeful for today as

3 we share with you our approach and thoughts on

4 developing the energy efficiency standards for the

5 commercial refrigeration equipment, that it's not a

6 monologue or a one-way street, that you'll grace us

7 with your thoughts and insights so that it's a

8 productive day for all of us.

9 In addition to this individual rulemaking

10 activity, how many of you have gone to the website and

11 have seen the report to Congress that's posted on our

12 website? Could I just see a show of hands, how many

13 of you?

14 (Pause.)

15 There are many activities under way, all

16 at the same time here. Some of them underway, some of

17 them soon to be started and it would be, I'm sure,

18 interesting reading for several of you to see the

19 kinds of things that we're working on these days with

20 energy being as popular of a topic as it is these

21 days, and we all have an opportunity to do something

22 about it and play a role in it. 

23 I think you'll be impressed by the breadth

24 of the activities that are underway and the aggressive

25 schedule that we've posted for the next five years.

EE-2006-STD-0126 COMMENT 03.4
6

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 So we're hopeful that as we go through this day and

2 over the next many months to develop these standards,

3 everybody will consider the significant role that we

4 can play in helping the energy situation and helping

5 citizens of the country to save energy, and looking at

6 doing it in a logical, reasonable, and informed way.

7 So again I want to thank you on behalf of

8 the Building Technologies Program, and I'll turn it

9 back over to Bryan.

10 MODERATOR BERRINGER: Go ahead Jim, for

11 your welcoming remarks.

12 MR. RABA: Good morning and welcome to the

13 Department of Energy rulemaking on commercial

14 refrigeration equipment. Thank you, Bryan. Again, my

15 name is Jim Raba. I'm the team lead and joining me

16 today is team co-lead Charles Llenza. Also to

17 introduce to you some of the other teammates from the

18 Department of Energy: Ron Lewis, our supervisor from

19 Building Technologies. Francine Pinto, and Tom

20 DePriest will be here to join us later. Office of

21 General Counsel, Mark Friedrichs, Office of Policy

22 International, again part of the DOE staff.

23 And we're very pleased that we have such

24 a good team backing us up from both Pacific Northwest

25 National Laboratories and Navigant Consulting

EE-2006-STD-0126 COMMENT 03.4
7

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 Incorporated, expert engineers all. I'll introduce

2 them in a moment. But indeed, thank you again so

3 much, because this rulemaking is really something

4 we're going to share together. We have to do this

5 together to make it work for the manufacturers, for

6 the efficiency interests of our country, and we look

7 forward to with you as our shall we say teammates as

8 well in that regard.

9 Today's primary presenters will be Mike

10 Christopher and Aris Marantan from Navigant Consulting

11 Incorporated, and Dave Winiarski from Pacific

12 Northwest National Laboratory. Bryan Berringer, our

13 facilitator, will kind of be our conscience and our

14 guide to make sure we're on track, on time throughout.

15 And everybody gets a chance to speak and be heard. 

16 So Bryan, I'll turn it back over to you

17 for some of the housekeeping things. 

18 MODERATOR BERRINGER: Okay, everybody

19 should have gotten a handout package that has the

20 agenda. It should have the website where most of the

21 information is, it has the website at the bottom of

22 your package. It should have the slide presentations

23 today. Also in that package you'll a Federal Register

24 notice from today's which will also give you

25 information on how to send comments to the Department,

EE-2006-STD-0126 COMMENT 03.4
8

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 and we'll go over this a little bit more. 

2 We also have a survey in the package. If

3 for any reason you have to leave early today, or

4 somebody comes in late, go ahead and fill that in and

5 leave it with Sheila in the back before you leave. 

6 Again, what we'll do now at this time is

7 go around and we'll do some informal introductions.

8 This will not be on the record. Just as a courtesy,

9 I'll ask the people that came in, Steve, if you could

10 just put your name on, here's a marker. if you could

11 just put your names on those, I will be queuing people

12 throughout the day but it will help the court reporter

13 to record your name. Again, when you're speaking

14 please state your name and your company when making

15 remarks. I'll start with Karim, we'll go around the

16 table and then we'll go to the people in the audience.

17 (Off the record.)

18 MODERATOR BERRINGER: Okay, right now I'd

19 like to go over, everybody should have. Yes, this is

20 back on the record. Thank you. We just had

21 introductions. Again, hopefully in your package you

22 have an agenda and the presentation slides. 

23 What I'd like to do is just sort of go

24 over that agenda, if there's any additions that need

25 to be put on there or if anyone has questions about

EE-2006-STD-0126 COMMENT 03.4
9

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 the agenda, now would be the time to bring that up.

2 So, we've had our introductions. We're

3 currently going over the agenda. After this, we'll

4 have opening remarks. If nobody has requested opening

5 remarks at this time, but we will give if people want

6 to have some, we'll give a couple of minutes to give

7 opening remarks if anybody wants to have opening

8 statements, then we'll have the introduction. 

9 Jim Raba will be doing the introduction

10 and analytical methodology, talking about the process

11 and what type of analysis we're going to talk about

12 today, and the rulemaking process itself.

13 Then we'll have a presentation on market

14 and technology assessment. We'll have a morning break

15 at about 10:30, followed by screening analysis and

16 engineering analysis. Then a lunch break about noon.

17 Then we'll precede with the mark-ups for equipment

18 price determination, energy and use end-load use

19 characterization, life cycle cost and payback

20 analysis. Then at about 2:15, we'll talk about

21 shipments and national impact analysis, have a break

22 about 2:45. Continue on with a brief discussion about

23 revisions to the ANOPR analysis and life-cycle cost

24 subgroup analysis, followed by manufacturing impact

25 analysis at 3:15. At 3:30 we'll have utility impact

EE-2006-STD-0126 COMMENT 03.4
10

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 analysis, employment impacts, environmental

2 assessment, regulatory impact analysis. Then at about

3 4 o'clock, we'll have time if we have other issues, if

4 anything comes up on the parking lot, and then closing

5 remarks. And then we plan on adjourning at about

6 4:45. 

7 Is there anything that anybody sees needs

8 to be added or changed on the agenda? Okay.

9 Next point on the slide is the objective

10 and expectations. Again, we're here, this is sort of

11 the kickoff for this commercial refrigeration

12 workshop. We're going to talk about the process that

13 we use in the rulemaking and talk about the analysis

14 that we use. How many people, by a show of hands, is

15 this the first time you've been in a workshop at the

16 Department of Energy of this type, talking about

17 efficiency standards? Okay. Probably about half. 

18 So welcome, and if you have as we go

19 along, if you have any questions, again my role here

20 is to just be neutral, focus on the process and task

21 at hand, and ensure that everybody has a chance to

22 participate. So we don't want anybody dominating, so

23 that sort of leads us to our ground rules. I put them

24 up here too if we need to come back to them during the

25 day, but they're also in your slides.

EE-2006-STD-0126 COMMENT 03.4
11

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 One is listen as an ally. We need to be

2 short and concise as far as our statements. Get to

3 the point, and give other people, we want people to

4 share the air time, so we want to make sure that

5 everybody has an opportunity to speak. We ask that if

6 you have sidebar conversations, you need to take them

7 to the back of the room or outside the room if need

8 be. 

9 Again, we need to focus on the issues at

10 hand and not personalities. We also ask everybody, we

11 speak one at a time for the court reporter. Again,

12 state your name and your company each time you speak.

13 If you have your cell phones on, if you could put

14 those to vibrate or turn those off at this time. And

15 then again, I've added to here, I'll be queuing and

16 we'll do follow-ups. If you raise your hand, I will

17 acknowledge you and if for some reason I don't -- give

18 me a little wave there . And again, we want everybody

19 to enjoy, to have fun today. We have to have open

20 communication back and forth. That's one of the

21 things we're trying to get out of this workshop is to

22 be a little less, a little bit more informal in the

23 process.

24 Just some housekeeping issues, we're going

25 to have, as we discussed in the agenda, we're going to

EE-2006-STD-0126 COMMENT 03.4
12

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 have a morning and afternoon break; lunch break, if we

2 seem to be ahead of time, we can readjust that

3 schedule. Again, the cafeteria for those who have not

4 been here before, basically we're on the E corridor.

5 If you go down one level, go to your left. There's a

6 snack bar. Down on your right hand side, there's also

7 some vending machines down -- again, it's down one

8 level. You can either take the elevators here, just

9 down the hall, down one floor to your left, vending

10 machines, coffee at the snack bar.

11 At lunch time, if you want to go to the

12 cafeteria, you'll do the same thing. Go down one

13 level, follow the main corridor, go to your right.

14 You'll see escalators. Go up two escalators and that

15 will be the cafeteria. There are some signs on the

16 walls for that or if not, you can follow the crowd.

17 There's usually people going there.

18 So restrooms, if you go out the door, if

19 you go left or right at the end of the hallways,

20 there's restrooms. Public phones, if you need to use

21 public phones, right where the elevator bay is, you

22 passed it when you came in. There's a lobby area,

23 there's two pay phones there. There's also a house

24 phone there if you need to talk to anybody internal.

25 Again, there's no smoking in the building and again,

EE-2006-STD-0126 COMMENT 03.4
13

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 everything that is going on today is being recorded

2 for the transcripts. If you need to get a copy of the

3 transcripts, you can see the court reporter during the

4 breaks or at the end of the meeting if you are

5 interested in purchasing a copy of the transcripts.

6 All right, at this time, I'm going to turn

7 it back to Jim Raba to -- I'm sorry about that.

8 At this time, what I'd like to do is does

9 anybody have any opening remarks that anybody would

10 like to do at this time, about three to five minutes?

11 No. Seeing none, now I'll turn it over to

12 Jim Raba to talk about the introduction and analytical

13 methodology.

14 MR. RABA: For some, this will be

15 familiar. For others, this is an introduction to the

16 rulemaking process we go through, through all the

17 rulemaking here at the Department of Energy. So I'll

18 do an overview of that process for you so you'll be

19 familiar with a roadmap of what's to come over the

20 next three years.

21 Indeed, the letters in Item 3, ANOPR means

22 Advanced Notice of Proposed Rulemaking, and the NOPR

23 in Item 4 refers to Notice of Proposed Rulemaking. 

24 Today's framework of the public meeting

25 and the framework document mark the beginning of the

EE-2006-STD-0126 COMMENT 03.4
14

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 energy conservation standards rulemaking process in

2 the development of these efficiency standards for

3 commercial refrigeration equipment. In particular,

4 we're going to be evaluating ice cream freezers, self5 contained refrigeration equipment and remote6 condensing equipment.

7 Today's public meeting is an informal way

8 to present the assumptions, methodologies and analyses

9 that the Department intends to use throughout this

10 rulemaking. Neither the public meeting today, nor the

11 framework document that you read, are intended to be

12 definitive statements with respect to any issue that

13 is yet to be determined. So moreover, we are inviting

14 your comments, any information, data, written comment

15 and especially your participation to guide our

16 analyses.

17 In general, the Energy Policy Act of 2005,

18 EPACT 2005, directed the DOE to issue by rule no later

19 than January 1, 2009, energy conservation standards

20 for ice cream freezers, self-contained equipment and

21 remote-condensing equipment. The Department of Energy

22 is holding a separate, but parallel, rulemaking for

23 the test procedures aspect of commercial refrigeration

24 equipment.

25 Now very important, how to submit your

EE-2006-STD-0126 COMMENT 03.4
15

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 comments. They could be today in oral statement or

2 discussion. They could be written comments for sure

3 on different methods to get them to us, please note

4 that we'd like to have the docket number or

5 identification number with each and the comment cutoff

6 period is May 30th. Congress has placed upon us a

7 very tight deadline, so we appreciate your cooperation

8 with that.

9 Now an overview of the rulemaking process.

10 There are typically five major stages in any DOE

11 standards rulemaking. Each includes a Federal

12 Register notice to place information in the public

13 view. The Department invites both oral and written

14 comments and also we may consult with stakeholders

15 individually, experts to clarify and issue or request

16 additional information on the subject. So today's

17 public meeting is that indeed. We're looking for your

18 comments to be part of the rulemaking. So we're

19 requesting from you that data information.

20 We encourage you to participate at every

21 stage of the five stages of the rulemaking process. 

22 Now today, we're going to address the

23 efficiency standards development process and the

24 framework document. The next stage will be the

25 Advanced Notice of Proposed Rulemaking where the

EE-2006-STD-0126 COMMENT 03.4
16

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 Department will present an array of the analyses and

2 again invite your comments.

3 On market and technology assessment,

4 screening analysis, engineering analysis, markups,

5 energy use and use load characterization, lifecycle

6 cost and payback analysis, shipments analysis, all

7 leading to national impact analysis. 

8 Good information and hard data are hard to

9 come by. This is important. 

10 The Notice of Proposed Rulemaking stage

11 will address any comments received at the ANOPR stage

12 and then refine the analysis from the ANOPR to the

13 NOPR stage, make adjustments, course corrections and

14 go from there. 

15 In addition, the Notice of Proposed

16 Rulemaking, NOPR, will contain analyses for lifecycle

17 subgroups, potential impacts on manufacturers and

18 electric and gas utilities, impacts on employment, the

19 environment and any undue burden that would result

20 both in the energy conservation standards rulemaking

21 and the accumulation of other regulations

22 manufacturers may face.

23 Last, we've all worked so hard for the

24 final rule, it will surely be a happy day. However,

25 please note that the Federal Government will be closed

EE-2006-STD-0126 COMMENT 03.4
17

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 January 1, 2009, so we're observing a federal holiday

2 that day.

3 (Laughter.)

4 So therefore, a realistic date for the

5 final rule will be sometime before December 31, 2008.

6 So it will be about three years from the final rule,

7 once it becomes a final rule by January 1st that the

8 energy conservation standards will take effect so this

9 will give manufacturers time to adjust in your

10 manufacturing practices. Also, please note that the

11 standard levels are effective for commercial

12 refrigeration equipment that is manufactured on or

13 after January 1, 2012. It will have no effect on

14 equipment manufactured before that date or distributed

15 in commerce after that date.

16 Now as we said before, the test procedures

17 for commercial refrigeration equipment are being

18 addressed in a separate rulemaking that we refer to as

19 the en masse test procedure rulemaking where

20 commercial refrigeration equipment is one of many

21 products and types of equipment that are covered under

22 EPACT 2005. We expect to see that finalized later

23 this year. 

24 So here's how EPACT 2005 defines the term

25 commercial refrigerator-freezer and refrigeratorEE-2006-STD-0126 COMMENT 03.4
18

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 freezer which we will collectively refer to as

2 commercial refrigeration equipment. It's not a

3 consumer product. It's not designed -- it's marketed

4 exclusively for medical, scientific or research

5 purposes. Operates in chilled, frozen and combination

6 frozen-chill variable temperatures, displays or stores

7 merchandise for the collection of materials

8 horizontally or semi-vertically and vertically. Has

9 transparent or solid doors, hinged doors or a

10 combination of those doors or no doors. It's designed

11 with pull-down temperature applications and connected

12 to a self-contained condensing unit or to a remote

13 condensing unit.

14 Item 7, is one we look at more thoroughly,

15 momentarily. I'm going to hand over to Mike

16 Christopher to discuss further these definitions and

17 the market and technology assessment.

18 Mike?

19 MR. CHRISTOPHER: Thanks, Jim. Again, I'm

20 Mike Christopher. I work with Navigant Consulting.

21 And I'm going to be talking about some definitions and

22 the market and tech assessment.

23 So as Jim mentioned, can everybody hear me

24 okay?

25 MODERATOR BERRINGER: Do you want to use

EE-2006-STD-0126 COMMENT 03.4
19

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 the cordless?

2 MR. CHRISTOPHER: Yes. Can you all hear

3 me now? Okay.

4 Jim pointed out this Item 7 right here.

5 The language says it's connected to a self-contained

6 condensing unit or remote condensing unit. And we

7 construe this language to mean that so-called

8 secondary cooling systems are not included in this

9 definition. 

10 And this is also consistent with the ARI

11 standard that's under consideration, the ARI 1200,

12 which specifically excludes these systems. We have

13 Item 11 here, if anyone has comments on whether or not

14 these systems should be excluded.

15 Bryan?

16 MODERATOR BERRINGER: Yes, at this time,

17 if -- one of the things we've done in the framework,

18 if you've looked at that, we have these particular

19 comments. As we go along through the presentation,

20 there will be some other comments. We'll take time to

21 ask that question and see if anybody has the responses

22 to give for the public record and move on. And we'll

23 also give a time at the end of each presentation to

24 sort of follow up with additional questions.

25 So at this time we're just seeing whether

EE-2006-STD-0126 COMMENT 03.4
20

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 secondary cooling applications should be covered under

2 this rulemaking. I see Andrew Delaski. Please speak

3 into the mic.

4 MR. DELASKI: Andrew Delaski, Appliance

5 Standards Awareness Project. I have two questions.

6 One of the test procedures. Is this not an

7 appropriate time for that?

8 MODERATOR BERRINGER: Yes, why don't we do

9 that. Why don't we stop right here and ask if there's

10 -- if you want to do that, we'll go on Jim's

11 presentation, if there's questions on that and then

12 we'll proceed with -- I think if you have a question

13 about the test procedure for Jim.

14 MR. DELASKI: I'm interested in what the

15 Department's plans are for process for adoption of the

16 test procedure. You mentioned it as being considered

17 in terms of the en masse test procedure proceeding.

18 What opportunities are envisioned for public comment,

19 public input to test procedure selection for this

20 rulemaking, for the commercial refrigeration product

21 rulemaking?

22 MR. RABA: Jim Raba, Department of Energy.

23 The en masse test procedure rulemaking is a

24 traditional rulemaking the Department is undertaking

25 for the many test procedures that EPACT 2005 directs

EE-2006-STD-0126 COMMENT 03.4
21

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 us to undertake. Some are already prescribed for us

2 and so we are kind of developing along the way. In

3 any event, for the commercial refrigeration and I

4 don't remember the exact procedure, but there will be

5 ample time in the regular rulemaking process where the

6 Notice of Proposed Rulemaking will be published in

7 ample time for comments and the like.

8 So that's in parallel at this time. We're

9 really following the directives of the energy policy

10 for 2005 on that test procedure at this time. We'll

11 be soliciting comments along the way, shortly,

12 actually.

13 MR. DELASKI: So just to be clear, Andrew

14 Delaski, Appliance Standards Awareness Project. The

15 procedure is the Department will issue a proposed

16 rule, a NOPR --

17 MR. RABA: Yes.

18 MR. DELASKI: And that will be a two-step

19 public process?

20 MR. RABA: Yes, it will.

21 MR. DELASKI: And just to follow up, do

22 you have an anticipation for what sort of target you

23 have for a final rule in that proceeding?

24 MR. RABA: I understood the final rule, we

25 intend to publish that in November of this year.

EE-2006-STD-0126 COMMENT 03.4
22

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MR. DELASKI: Okay. And then to come back

2 to the question, I have another question on this

3 current presentation, if it's appropriate.

4 MODERATOR BERRINGER: Let me ask if your

5 question is pertaining to Jim Raba's presentation?

6 MR. DELASKI: Yes.

7 MODERATOR BERRINGER: Okay, yes.

8 MR. NADEL: I just wanted to note here --

9 MODERATOR BERRINGER: Please identify

10 yourself.

11 MR. NADEL: I'm sorry, Steve Nadel, ACEEE.

12 I understand there will be a separate test procedure

13 rulemaking, but because it will affect the analysis,

14 I wanted to point out that there's been quite a bit of

15 debate about the test temperatures to use to

16 particularly test refrigerators. The ARI test

17 procedure uses one temperature and CSA, EnergyStar,

18 CEC, everybody else uses another temperature and

19 obviously, you need to -- the test temperature will

20 affect the results and to the extent that you're doing

21 an analysis, I guess you may have to kind of make it

22 flexible so you can work with either temperature and

23 let that play out over the rest of the year. I just

24 wanted to point out that.

25 MR. RABA: Jim Raba, DOE. This is one

EE-2006-STD-0126 COMMENT 03.4
23

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 area where we need your comments back in writing. We

2 welcome them from those gathered today. We'd like to

3 hear back from you.

4 MR. AMRANE: Karim Amrane, ARI. I guess

5 for Steve, the ARI 1200 has been modified to account

6 for that, so I think with the temperature, hopefully

7 it's resolved once and for all.

8 (Laughter.)

9 MODERATOR BERRINGER: Okay, we have a

10 comment from Chris.

11 MR. BALESTRINI: Chris Balestrini, Food

12 Products Association. 

13 One of the questions that comes to mind

14 right away is an actual definition of commercial. I

15 believe what you're getting at here is point of sale

16 type of equipment, correct? Like refrigerators in

17 grocery stores, things like that. Whereas, in the

18 food industry, when you start talking refrigeration,

19 a lot of times we are seeing our freezers,

20 refrigerators, things like that in our manufacturing

21 facilities and probably you're thinking of it as an

22 industrial application. But the equipment that's

23 installed is commercially available. So there's been

24 some confusion in the food industry regarding what

25 this rulemaking session really is about. 

EE-2006-STD-0126 COMMENT 03.4
24

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 Okay, that's one of the reasons I was sent

2 here today was to ask this question for a little

3 clarity on when you talk about commercial equipment,

4 what you're really after.

5 From what I've gathered, talking to some

6 of the individuals here, I believe you're more point

7 of sale type of refrigeration type equipment and not

8 so much the industrial side in the manufacturing

9 facilities, correct?

10 MR. RABA: We'd like your comments in

11 writing on that. Jim Raba, DOE.

12 That's a good question, certainly. I

13 think a perception, at least now before this public

14 meeting today is that residential is like in your

15 home; commercial is in the supermarket, be it display

16 or storage, for example, or a food vendor of some

17 sort. So you may want to then in your written

18 comments, give us perhaps your understanding further

19 of what commercial means and give us some guidance on

20 that. We had not really approached that. The Energy

21 Policy Act itself divides up products and equipment

22 either residential or commercial/industrial, so in

23 that regard, we may want to find out more what your

24 thoughts are from your association as well.

25 Good question, thank you.

EE-2006-STD-0126 COMMENT 03.4
25

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MODERATOR BERRINGER: Any other comments

2 pertaining to Jim's presentation as far as the

3 process? Again, we saw about 50 percent of the people

4 have not been involved in the process. Any other

5 questions for Jim on his presentation?

6 Okay, seeing none, Andrew, I think you had

7 a question pertaining the current slide, is that

8 correct?

9 MR. DELASKI: Yes. Andrew Delaski of

10 Appliance Standards Awareness Project.

11 I'm interested in the Department's

12 rationale for excluding secondary cooling applications

13 beyond simply the test method.

14 MR. CHRISTOPHER: I don't know that I have

15 a specific answer for that. Is there an answer you

16 all have?

17 I appreciate the question, but we'll take

18 that under consideration. I don't have a specific

19 answer.

20 MR. WINIARSKI: Dave Winiarski, Pacific

21 Northwest National Lab. I believe that part of that

22 rationale is basically trying to look at the

23 definition for -- which I think talks about being

24 connected to a self-contained condensing unit or to a

25 remote condensing unit. A connection basically, so

EE-2006-STD-0126 COMMENT 03.4
26

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 we're talking primarily a direct expansion type

2 system, a secondary coolant loop provides this

3 intermediate loop and so it wasn't clear that that fit

4 in that definition.

5 MODERATOR BERRINGER: Steve.

6 MR. NADEL: Steve Nadel, ICEEE. I guess

7 I would say if there's a heat exchanger they are

8 connected. It's not like there's no relationship

9 between the two. My tendency would be to look broader

10 and include everything. I think one of the intents of

11 this provision in EPACT was to say these should be

12 federally-regulated products and not state-regulated

13 products. And if DOE narrowly construes what's

14 federally regulated, it could create a bit of a mess.

15 The other question I have is, I'm not

16 clear to what extent supermarkets tend to use direct

17 versus secondary coolant. Is this a small niche

18 product or is it most of the class and that could very

19 much affect the energy savings and whether in a

20 practical sense it makes sense to regulate this in

21 addition to the legal sense.

22 MR. AMRANE: Karim Amrane, ARI. I think,

23 of course, if we're looking at the test procedures

24 here, the test procedures specifically exclude

25 secondary coolant so we have an issue here. I mean

EE-2006-STD-0126 COMMENT 03.4
27

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 there's going to be an issue in response to the test

2 procedures. So I think the intent when this language

3 was drafted was to exclude secondary coolant from the

4 process.

5 MR. BRUNDAGE: Don Brundage, Southern

6 Company. I have a concern, seeing as how the ARI

7 standards which will probably be the basis for the

8 test procedures excludes secondary that to include it

9 in this rulemaking under a tight schedule will make it

10 more difficult to achieve the deadlines. It may be

11 appropriate to do a separate rulemaking or effort to

12 cover those systems, but I would not want to do

13 anything to delay or hinder this current rulemaking.

14 MR. RABA: Jim Raba, DOE. On this,

15 clearly, there's some difference here. I would invite

16 your comments both in the en masse test procedures

17 when this is addressed there and certainly in the

18 standards rulemaking today as well.

19 MODERATOR BERRINGER: Yes, Andrew.

20 MR. DELASKI: Just a follow on. Andrew

21 Delaski, Appliance Standards Awareness Project. I

22 think it's important, as we go forward with this

23 rulemaking that the existing -- we don't have an

24 existing test method at all for ice cream freezers, I

25 believe. We can't allow the test methods, existing,

EE-2006-STD-0126 COMMENT 03.4
28

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 pre-existing ARI test methods to determine the scope

2 of the rulemaking. 

3 If that's where the equipment is and the

4 equipment not covered by the ARI test method, that's

5 where the bulk of the equipment installed and sold is,

6 then in any given class, then the Department needs to

7 consider what appropriate standards are in those

8 equipment classes, with or without an existing ARI

9 test method.

10 The Department has many options to set

11 standards: existing test method, expanding that test

12 method to cover additional equipment types based on

13 Department revisions, developing a new test method,

14 but also has the option of setting prescriptive

15 standards that require Department setting prescription

16 standards in the past. 

17 I think there's a general preference for

18 performance standard; we should be heading in that

19 direction, but as an initial standard for products,

20 the Department has quite often in the past has set a

21 prescriptive standard initially. So let's not the

22 ARI, the existing ARI test method in our view should

23 not determine the scope of the rulemaking.

24 MODERATOR BERRINGER: Yes, Karim.

25 MR. AMRANE: Karim Amrane, ARI. Again,

EE-2006-STD-0126 COMMENT 03.4
29

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 the test procedures, DOE test procedures cover ice

2 cream freezers, so it's covered in the test

3 procedures. 

4 Now the secondary coolant are not and for

5 the purpose of making sure that the Department of

6 Energy completes its rulemaking on time, I guess I

7 would suggest that let's focus on the bulk of the

8 equipment which is direct expansion devices and then

9 see whether the Department can -- after this

10 rulemaking is complete, the Department can go ahead

11 and look at those secondary coolant systems. But I

12 think the focus, if you want to make sure that we

13 respect the deadline of January 1, 2009, I think we

14 need to focus on what we have today and the bulk of

15 the coolant that's been impacted here which is direct

16 expansion devices.

17 MODERATOR BERRINGER: Andrew.

18 MR. DELASKI: Just a quick follow-on.

19 Andrew Delaski, Appliance Standards Awareness Project.

20 So Karim, if ARI can provide data on the

21 market share, the market is split between this

22 equipment and the rest of the market, that would be

23 really helpful in being able to determine if this is

24 an important question or not.

25 MODERATOR BERRINGER: I saw Steve Nadel,

EE-2006-STD-0126 COMMENT 03.4
30

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 did you have a follow-up?

2 MR. NADEL: Yes, in a similar vein, I was

3 wondering if someone in the industry could comment on

4 that in supermarkets. Roughly, are we talking -- is

5 the secondary 10 percent of the market, 40 percent of

6 the market? How big is it?

7 MODERATOR BERRINGER: Yes, Larry?

8 MR. HOWINGTON: Larry Howington, Hill

9 Phoenix. Based on our experience, it would be less

10 than 5 percent from our standpoint of what we sell. I

11 think that's probably true for the market in general.

12 MODERATOR BERRINGER: Yes, Chris.

13 MR. BALESTRINI: Chris Balestrini, Food

14 Products Association.

15 One quick thing about the test methods.

16 As far as temperatures for testing and all, I

17 recommend talking to Food and Drug Administration or

18 to USDA and ask them what their guidance is for

19 refrigeration temperatures and freezing temperatures.

20 Since most of this stuff is food products and all, it

21 makes a lot of sense to go to the regulatory agencies

22 there because they can give you the science that

23 they've done and the background at certain

24 temperatures and tell you where these units should be

25 operated.

EE-2006-STD-0126 COMMENT 03.4
31

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MODERATOR BERRINGER: Great, thanks.

2 There's been a lot of discussion on the secondary

3 systems. Are there any other comments before we move

4 on?

5 Okay, Mike?

6 MR. CHRISTOPHER: Thanks, Bryan. Thank

7 you all for your comments. Certainly any decision

8 that will be made will be based on substantive data

9 that we get. We want to base it on the hard data. 

10 So moving on, we want to talk about the

11 definition of ice cream freezer and we're mandated to

12 cover these products, but we're not given a specific

13 definition. So we propose the following, that the

14 term ice cream freezer means a commercial freezer that

15 is designed to operate at or below -5 Fahrenheit and

16 that the manufacturer designs, markets or intends for

17 the storing, displaying or dispensing of ice cream. 

18 We'd like to get your feedback on this

19 definition. We want to point out that the

20 finalization of this definition will be handled in

21 that en masse test procedures rulemaking that's on22 going. So any comments that you submit certainly we'd

23 like to hear, but they will be forwarded on to that

24 rulemaking. I think it's still worthwhile to see what

25 comments we have on this definition.

EE-2006-STD-0126 COMMENT 03.4
32

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 At this time we're just going to step

2 through these, we'll step through these five questions

3 one at a time, if people have responses for them. The

4 first one, 1.2, it says the Department is not aware of

5 any industry standard test method of ice cream dipping

6 cabinets and softserve ice cream extruders. The

7 Department requests information on what, if any, test

8 method exists for these type of equipment. The

9 Department seeks comment on how it should address

10 these types of equipment and rulemaking. Should

11 softserve extruders and ice cream dipping cabinets be

12 considered as ice cream freezers?

13 Any comments or responses to that?

14 Karim?

15 MR. AMRANE: Karim Amrane, ARI. I think

16 this kind of question is going to pop up along this

17 process today many times. What you're going to find

18 out with this type of equipment is that a lot of the

19 equipment today, made today is really some kind of

20 custom made. So we're going to find different ice

21 cream freezers. Minus 5 degrees is one temperature,

22 but ice cream freezers are -30 degrees as well. So I

23 guess for the Department the question is going to be

24 what should we do here? Should we cover everything?

25 Or should we cover the bulk? 

EE-2006-STD-0126 COMMENT 03.4
33

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 And I think ARI's position is that the

2 Department should look at what's available in the

3 market and then decide to focus on the majority, the

4 80 percent and forget about the 20 percent, because

5 otherwise, the Department is going to be getting into

6 things that are going to make very difficult for you

7 guys to finish the rule on time.

8 So I would suggest that this kind of issue

9 be addressed when you get market assessment and you

10 know what's going on as far as ice cream freezers and

11 focus on the majority of them which are going to be

12 mostly at -5 or zero degrees.

13 MODERATOR BERRINGER: Any response or any

14 other comments as far as Item 1.2 at this time?

15 Okay, Item 1.3, Karim sort of touched on

16 it a little bit. The Department seeks comment on the

17 definition of ice cream freezers. You can see on the

18 slide we've proposed something for ice cream freezers.

19 Do we have any comments on that at this time?

20 Andrew?

21 MR. DELASKI: Andrew Delaski, Appliance

22 Standards Awareness Project. 

23 I wonder if the Department can tell us

24 where they took this definition from?

25 MR. CHRISTOPHER: I think this was a

EE-2006-STD-0126 COMMENT 03.4
34

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 conglomerate of definitions from other rulemakings

2 from State Standards Canada. I believe that's where

3 it came from, based on -- yeah, Aris?

4 MR. MARANTAN: Aris Marantan, Navigant

5 Consulting.

6 To answer your question, it was largely

7 based on the definition provided by the Environmental

8 Protection Agency and their EnergyStar Program for

9 solid door commercial refrigerators. They have one

10 specifically for ice cream freezers.

11 MR. DELASKI: So I have one concern which

12 I'll raise and perhaps folks from the industry can

13 address it or from the Department or its consultants

14 which is is this definition comprehensive enough, that

15 is, a definition which sets an upper limit at -5

16 degrees, is there potential -- there could be some

17 risk that if one were to design and market one at -4

18 degrees that you could gain your definition and you

19 don't have a level playing field.

20 So the question I would propose back to

21 the industry and to the Department is is this a high

22 enough set point that we're not creating the potential

23 for a loophole.

24 MODERATOR BERRINGER: That was Andrew

25 Delaski.

EE-2006-STD-0126 COMMENT 03.4
35

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 Aris?

2 MR. MARANTAN: I might be able to comment

3 on that. Just one thought, we have put a lot of

4 thinking behind the definition to address specifically

5 that point. And one thing that I would note is that

6 even without the definition of an ice cream freezer

7 specifically, any product that meets that definition

8 would automatically fall under the definition of a

9 commercial freezer. So it's partially addressed.

10 MODERATOR BERRINGER: Yes, Bruce?

11 MR. HIERLMEIER: Bruce Hierlmeier, Zero

12 Zone. Just in doing research for this it looked like

13 California's definition and Canada's definition for

14 ice cream freezer is more along the lines of a dipping

15 cabinet. They had things specifically with doors and

16 things much different than a display-type freezer or

17 a storage cabinet or perhaps a hardening cabinet, so

18 there are many different definitions just applied to

19 ice cream cases.

20 MODERATOR BERRINGER: Yes, Don?

21 MR. BRUNDAGE: Don Brundage, Southern

22 Company. I have a concern in the other direction

23 towards industrial, because having that "or" in there,

24 if it's used in storing or displaying or dispensing,

25 without some clarification, some industrial thing the

EE-2006-STD-0126 COMMENT 03.4
36

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 size of a tractor trailer compartment would qualify.

2 So there needs to be something to define that it's at

3 retail a little better.

4 MODERATOR BERRINGER: Okay, any additional

5 comments on Item 13?

6 Steve?

7 MR. NADEL: Steve Nadel. To address Don's

8 comments perhaps a size restriction. As I recall,

9 there is some size restriction for a commercial

10 freezer in EPACT and maybe that could be used.

11 MODERATOR BERRINGER: Yes, Chris?

12 MR. BALESTRINI: Chris Balestrini, FPA.

13 Why is ice cream being singled out? I realize

14 they've done it in other agencies that they've singled

15 it out for specific reasons, but for the purpose of

16 this rule, does it necessarily have to be singled out

17 or can it be redirected in a guidance document that

18 would subsidize the actual rule?

19 Just a question. I mean --

20 MR. MARANTAN: Aris Marantan, Navigant

21 Consulting. 

22 To answer the question of why we're

23 addressing ice cream freezers specifically, it was

24 required in EPACT 05. Beyond that, the Department

25 just follows the directives in EPACT 05.

EE-2006-STD-0126 COMMENT 03.4
37

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MODERATOR BERRINGER: Karim and then

2 Bruce.

3 MR. AMRANE: Karim Amrane, ARI. I mean

4 the main reason why ice cream freezers are listed is

5 because states started to set efficiency standards for

6 ice cream freezers so there was a need to fill up the

7 gap and have a federal standard for ice cream

8 freezers.

9 MR. BALESTRINI: Chris Balestrini again.

10 But that was -- I shouldn't say probably -- there's a

11 very good reason that that was done because ice cream

12 was put in the dairy standards and part of the PMO and

13 things like that and you know, you start getting into

14 a situation where are you going to list rulemaking for

15 every exception, you know? What I'm getting at is

16 trying to back up and broaden it a little bit to cover

17 more and then provide guidance documents for the rule

18 down the road. 

19 It started happening in the food industry

20 where we started getting too specific with things and

21 we painted ourselves in the corner in some of our

22 rulemaking by not being broad enough up front to take

23 into account what some of the exceptions may be that

24 -- they may not be exceptions today, but 5 years, 10

25 years down the road, there may be new technologies and

EE-2006-STD-0126 COMMENT 03.4
38

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 new exceptions that come into play.

2 So if you start focusing it too tightly on

3 the front side, you end up having to go through the

4 revision of the rulemaking and all that stuff down the

5 road that makes it very difficult to be nimble as new

6 technology advances. That's the only reason why I'm

7 bringing up the focus on the ice cream.

8 MODERATOR BERRINGER: Bruce was next, and

9 then Larry.

10 MR. HIERLMEIER: Bruce Hierlmeier, Zero

11 Zone. We're manufacturers of display-type equipment,

12 primarily freezers used in grocery stores for

13 displaying frozen food products, as well as ice cream

14 products which typically need a colder temperature.

15 In our industry, customers look to buy

16 equipment and they want to know how much energy to use

17 for a frozen product and they want to know how much

18 energy to use for a colder application, an ice cream

19 freezer. So in our industry, you have two ratings

20 typically. 

21 In getting a little bit toward number 4,

22 our case is the same case. We sold a customer a

23 number of cases, we don't know how many they're going

24 to put ice cream in and turn the thermostat a little

25 lower an dhow many they're going to put frozen food in

EE-2006-STD-0126 COMMENT 03.4
39

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 and run it a little warmer. So it's very similar in

2 the display area. The cases do basically the same

3 thing. It's just an operating temperature to preserve

4 the product so it doesn't melt on them.

5 Other ice cream cases where they're making

6 hardening cabinets and doing things like that, those

7 have very specific functions in the processing or

8 storage of ice cream compared to display. So number

9 4, we're not any different. It's the same cabinet and

10 maybe the ice cream cabinet is something that's gotten

11 out of control in its description and if we look at

12 the volume of true ice cream cabinets versus display

13 cabinets running 5 degrees colder, we'll find that

14 there aren't a lot of true ice cream cabinets out

15 there.

16 MODERATOR BERRINGER: Larry?

17 MR. HOWINGTON: Larry Howington, Hill

18 Phoenix. 

19 I'm really paralleling what Bruce said.

20 We're in the same situation. In cases that we sell

21 for frozen food and we sell for ice cream actually

22 there's no distinction whatsoever in terms of the

23 product that we sell. It's just how the customer

24 actually uses it.

25 And we rate them for two loads for

EE-2006-STD-0126 COMMENT 03.4
40

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 convenience for the customer because they're sizing

2 their compressor route based on that, based on how

3 they're going to use it. 

4 The reality is we can have a single rating

5 for the cases, you know, it doesn't really matter

6 which one it is as long as there's a temperature to

7 find. And that rating would tell you how well the

8 case worked at the zero degree or the five degree

9 because it's pretty linear between the two. And

10 really there's an opportunity there to have a single

11 rating point for that kind of product, I think, as

12 opposed to two because you run two tests, but you

13 don't gain a lot of extra information from it in

14 reality. 

15 MODERATOR BERRINGER: Okay, Dave.

16 MR. WINIARSKI: I was just going to --

17 this is Dave Winiarski, Pacific Northwest Laboratory.

18 I was just going to ask a clarification, maybe two

19 clarifications. 

20 The first is I wasn't clear from your

21 discussion if you were talking about both remote

22 condensing-type cases and self-contained cases where

23 the compressor would be built directly into the

24 refrigeration cabinet. If those would also be

25 designed both for freezer and ice cream applications?

EE-2006-STD-0126 COMMENT 03.4
41

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MODERATOR BERRINGER: Yes, Larry?

2 MR. HOWINGTON: Larry Howington, Hill

3 Phoenix. 

4 The bulk of what we sell is remote. We

5 occasionally self-contain for the convenience of the

6 customer. Generally, it wouldn't make really any

7 difference with the two temperatures we're talking

8 about. 

9 We have other folks in the industry that

10 makes make different types of cabinets for ice cream

11 storage, and they really go into like the small shops

12 where the environmentals may not be as good and they

13 will run them colder, because they need to because of

14 those kinds of, that would be like in a small ice

15 cream shop, where you have ice cream cakes for sale.

16 That's where you may see a -15 or even a -30 on some

17 of the kind of holding cabinets. That gets into a

18 different category. But in general, for the display,

19 you wouldn't use a different one.

20 MR. WINIARSKI: Right, and someone asked

21 this because when we were first trying to look at

22 interpreting the language that's in the Energy Policy

23 Act, we were trying to understand for ourselves why

24 ice cream freezers were broken as a separate category.

25 And one part of that was that they had actually

EE-2006-STD-0126 COMMENT 03.4
42

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 defined standards for self-contained freezers, with

2 and without doors, and it may have been that it was

3 just a decision was made that the ice cream freezer

4 category was somehow separate in terms of self5 contained products.

6 MODERATOR BERRINGER: That was Dave

7 Winiarski. Any follow on to those?

8 MR. CHRISTOPHER: I think the implication

9 and impact is that ice cream pertains, I think as you

10 were saying, only to the self-contained. As you'll

11 see a little further, the breakdown of the products is

12 such that our initial breakdown of products is such

13 that ice cream freezers are only on the self-contained

14 side of things. 

15 MODERATOR BERRINGER: Okay, follow-ons to

16 that? I think we started to touch on Item 1.4, a

17 little bit. In what way are ice cream freezers

18 different from commercial freezers. The Department

19 requests feedback on whether they should establish

20 energy conservation for ice cream freezers that are

21 different or apart from other commercial freezers. I

22 see none. 

23 I know that we kind of combined that there

24 was some discussion. And the last one, item 1.5. The

25 Department seeks comment on whether to extend energy

EE-2006-STD-0126 COMMENT 03.4
43

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 conservation standards for self-contained commercial

2 freezers with doors and without doors to ice cream

3 freezers with doors and without doors respectively.

4 Yes, Bruce?

5 MR. HIERLMEIER: Bruce Hierlmeier, Zero

6 Zone. 

7 I guess I didn't understand what that

8 meant if they're going to apply it, but provide it to

9 allow to use more energy because it's going to operate

10 at a colder temperature, so it would follow the same

11 format but say okay, but you get another kilowatt per

12 day or something because it's operating colder. What

13 was the intent of that statement? 

14 MR. MARANTAN: Aris Marantan, Navigant

15 Consulting. 

16 Bruce, that's exactly what we had in mind.

17 You know, the standards were prescribed in EPACT for

18 those self-contained units, and so one of the easier

19 things to do, if its possible and realistic, is to

20 extend those just as you described.

21 MODERATOR BERRINGER: Okay, any other

22 comments or questions on Item 1.5? Okay? 

23 Seeing none, I'm going to turn it back to

24 Mike for his presentation.

25 MR. CHRISTOPHER: Okay, thanks Bryan. I'd

EE-2006-STD-0126 COMMENT 03.4
44

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 like to go over the next major equipment category, and

2 that's self-contained equipment without doors. As you

3 know, EPACT covered self-contained refrigerators,

4 freezers, and refrigerator-freezers with doors and

5 left this rulemaking to cover those products without

6 doors. 

7 So as we understand, this type of

8 equipment you'd probably find in convenience stores,

9 smaller grocery stores, maybe some restaurants where

10 you wouldn't expect to find a remote condensing

11 system.

12 In EPACT, we don't have a specific

13 definition for the term refrigerator-freezer. So

14 we're seeking input on using a definition here, taken

15 from CFR for a cabinet that's two or more

16 compartments, one of which is a freezer and one of

17 which is a refrigerator. 

18 So we'd like to get comments. I'd like to

19 point out Item 1.6 applies to the first part of the

20 slide here, the definition for the self-contained

21 equipment without doors. And item 1.7 applies more to

22 that proposal of using the refrigerator-freezer

23 definition. 

24 Bryan?

25 MODERATOR BERRINGER: So again, comments

EE-2006-STD-0126 COMMENT 03.4
45

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 or questions about 1.6? What if any self-contained

2 commercial refrigeration equipment without doors does

3 not meet the EPACT 2005 definition? 

4 That was the first part of the slide that

5 Mike just showed us. 

6 (Pause.)

7 Bruce, yes.

8 MR. HIERLMEIER: That's not the definition

9 they have up there, is it? 

10 MODERATOR BERRINGER: The definition is,

11 it's basically a refrigerator, a commercial

12 refrigerator-freezer or refrigerator-freezer without

13 doors that's connected to a self-contained condenser.

14 That's the definition.

15 MR. HIERLMEIER: Because in that

16 definition, we make commercial equipment, we make

17 freezers that operate above -8, but below -32. So I

18 mean that's where you have this broad range, if you

19 try to narrow it in. Somebody will probably make up

20 a piece of equipment that operates at a different

21 temperature for a unique set of circumstances. That's

22 what would be odd about the definition as shown for,

23 I guess --

24 MR. CHRISTOPHER: The second definition

25 there?

EE-2006-STD-0126 COMMENT 03.4
46

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MR. HIERLMEIER: Yes.

2 MR. CHRISTOPHER: Yes.

3 MR. WINIARSKI: I was going to comment.

4 That second definition, if I'm understanding the

5 comment here was for residential products.

6 MR. HIERLMEIER: Again, you wouldn't want

7 to start sucking that into the commercial area at all.

8 MR. WINIARSKI: Gotcha, okay.

9 MODERATOR BERRINGER: That was Dave

10 Winiarksi.

11 MR. AMRANE: Karim Amrane, ARI. I think

12 as Dave pointed out, this is a definition for

13 residential refrigerators and not appropriate. We

14 will get you some feedback on this.

15 MODERATOR BERRINGER: Great, any other

16 follow-on comments?

17 We'll move on to question or Item 1.7.

18 How could this definition be modified to the

19 application of self-contained commercial

20 refrigerations without doors?

21 Karim?

22 MR. AMRANE: Karim Amrane, ARI. Again, we

23 will give you some feedback on that.

24 MR. CHRISTOPHER: Okay, great, thank you.

25 Finally, we have the definition for remote

EE-2006-STD-0126 COMMENT 03.4
47

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 condensing products. These are refrigerators,

2 freezers and refrigerator-freezers with and without

3 doors and these are the things that you find in your

4 supermarkets that have remote condensing racks. We

5 think we also, you might find them in some commercial

6 locations where you serve or store food. And again,

7 we're looking for comments here.

8 The first item we're really looking for

9 comments on whether or not it's appropriate to

10 regulate just the case here and exclude the remote

11 condensing rack from this rulemaking.

12 And the other two are the same questions

13 from the previous slide. One is, is there any

14 equipment that does not meet this definition and 1.10,

15 in that previous definition from the residential

16 electric refrigerator-freezers be adapted?

17 MODERATOR BERRINGER: Again, just to

18 reiterate on Item 1.8, the Department seeks comment on

19 regulating the energy consumption of refrigerated

20 equipment, but not the associated remote condensing

21 unit for remote condensing commercial refrigeration

22 freezers and refrigerator freezers.

23 Any comments or issues on that?

24 Karim?

25 MR. AMRANE: Karim Amrane, ARI. I guess

EE-2006-STD-0126 COMMENT 03.4
48

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 it's the intent of EPACT. The intent of EPACT was to

2 cover just the display case, not the compressor rack,

3 so we agree with the interpretation that you have.

4 MODERATOR BERRINGER: Steve, you have some

5 follow-on?

6 MR. NADEL: Steve Nadel, ACEEE. I guess

7 I would think that it may be worth trying to cover

8 them for two reasons. One, as those of us who have

9 been at many of these workshops know a common refrain

10 is why regulate part of a system and not the whole

11 system as a major component here that wouldn't be

12 regulated and there may be some opportunities and

13 trade offs, but regulating the wider system that would

14 take more energy or allow a lower cost solution.

15 Second, there is the question about

16 federal versus state regulation. If we're only

17 regulating part of the system federally, does that

18 mean the states start looking at the other, does not

19 make sense to put this all together.

20 MODERATOR BERRINGER: Okay, thank you.

21 Any other comments?

22 Yes, Bruce?

23 MR. HIERLMEIER: Bruce Hierlmeier, Zero

24 Zone. When you start looking at racks, you open a

25 very wide opportunity of design and differences in

EE-2006-STD-0126 COMMENT 03.4
49

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 design, compressors, condensing units, how they're

2 operated and that would be very challenging to put any

3 type of rules together in a number of years. Just as

4 you start getting different manufacturers together to

5 understand those systems and what is available, what

6 isn't available; it's technically feasible. It

7 doesn't work very well.

8 So we would recommend to not try to bring

9 those in at this point in time.

10 MODERATOR BERRINGER: Karim?

11 MR. AMRANE: Karim Amrane, ARI.

12 I would like to second what Bruce just

13 said. I think here and I'm going to speak here for

14 myself and I think we have some responsibilities with

15 respect to ARI to put in orders. We're responsible

16 for the language that went into EPACT 2005. And we

17 are responsible as well for the deadline that's in

18 EPACT 2005.

19 We're giving DOE three years to complete

20 this rulemaking. It we start including compressor

21 racks and other things, it's going to take 10 years

22 for DOE for this rule and that's not appropriate.

23 So I think the intent here was to cover

24 the disparate cases and we need to stick to what we

25 agreed to do.

EE-2006-STD-0126 COMMENT 03.4
50

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MODERATOR BERRINGER: Okay, thank you.

2 Any other follow-on questions, comments?

3 Okay, and Item 1.9, is similar to the

4 earlier questions. What, if any, remote condenser

5 commercial refrigeration equipment does not meet the

6 EPACT 2005 definition? Any comments on that? Okay?

7 Seeing none, Item 1.10, how can the above definition

8 for electric refrigerator-freezers be modified to be

9 equitable to remote condensing commercial

10 refrigeration, refrigerator-freezers. 

11 Any comments or questions on that? 

12 Yes, Larry?

13 MR. HOWINGTON: Larry Howington with Hill

14 Phoenix. 

15 In general, we address two units combined

16 into one, one medium temperature and one frozen. In

17 tests, we treat them as two separate units when we do

18 the test. So we do the test as prescribed, but we

19 test the medium as one and we test the frozen as one.

20 MR. CHRISTOPHER: I have a comment. I

21 think in rulemaking we have to consider anything in a

22 case as a single product, so I don't know, I'm not

23 exactly clear on it, but it may be that you can't,

24 that may be an issue to consider. If it's in the

25 case.

EE-2006-STD-0126 COMMENT 03.4
51

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MR. HOWINGTON: Larry Howington with Hill

2 Phoenix. 

3 It typically is a very small percentage of

4 the product that goes out. However, if you look at it

5 as one unit, and you test the two and add them

6 together, you will get the total energy for the unit.

7 So there is, you can use the same test standard and

8 determine the total energy consumption for that box,

9 if you will. 

10 It's a very straightforward process to do

11 that, but it is also a very small percentage of any

12 product that you see on the market. 

13 MODERATOR BERRINGER: Dave Winiarski.

14 MR. WINIARSKI: Just another, I guess, a

15 point of clarification. So you test both, you test a

16 single cabinet that has both components, a

17 refrigerator and a freezer and you operate only the

18 freezer section, only the freezer evaporator when you

19 do the test?

20 MR. HOWINGTON: If I can clarify, it's

21 done different ways. If it has an internal pressure

22 regulator, it could be operating at the frozen

23 temperature and to operate both units, in which case

24 you could test it by simply looking at it as one

25 cabinet. Or it actually could have separate lines

EE-2006-STD-0126 COMMENT 03.4
52

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 running out. 

2 In some cases, that's the way it works

3 also. So whichever way its done, you can actually use

4 the same ASRAE type test procedure, either testing as

5 if it were two and adding it or testing as if it were

6 one, depending on how its actually designed.

7 MR. WINIARSKI: So we can come up with an

8 operational energy consumption for that piece of

9 equipment per foot of display area or something like

10 that. Okay.

11 MODERATOR BERRINGER: I'm sorry. Bob?

12 MR. TANNER: Bob Tanner with Hill Phoenix.

13 I'd just like to add that that type of equipment is

14 very customized and is very low volume, and spending

15 all that time looking at test procedures for such a

16 small thing is not keeping in with what Karim has

17 mentioned and focusing on the bulk of what we have to

18 regulate here.

19 MODERATOR BERRINGER: Okay, any other

20 follow-on comments? 

21 Andrew.

22 MR. DELASKI: Andrew Delaski of Appliance

23 Standards Awareness Project. A question of

24 clarification for the Department, which applies to

25 both your item, question 1.10 and back to the previous

EE-2006-STD-0126 COMMENT 03.4
53

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 section, 1.7, which is you've asked for a more

2 clarified, a more detailed definition for commercial

3 refrigerator freezers, than is offered by the EPACT

4 language. But yet you've not asked for more specific

5 definition for refrigerators and for freezers. I'm

6 wondering why you've focused in on this particular

7 product, the refrigerator freezer product for more

8 specific definition and not the other two as well? 

9 MODERATOR BERRINGER: We look to Jim or?

10 (Pause.)

11 Aris?

12 MR. MARANTAN: Aris Marantan, Navigant

13 Consulting. 

14 We thought about the definition of

15 refrigerator and freezer and we saw a large variety of

16 definitions in the industry. We thought that it was

17 a little intuitive to figure out what that may be, and

18 if we need to define it, we're open to doing that.

19 MR. DELASKI: Okay, Andrew Delaski, to

20 follow up. 

21 There is the definition, you do have some

22 definition, quite a detailed definition in EPACT, so

23 that gives you quite a -- more than intuition to go

24 on, I would say. You have a statute. 

25 MODERATOR BERRINGER: Okay, thank you for

EE-2006-STD-0126 COMMENT 03.4
54

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 your comments. 

2 Any other additional comments on this

3 before we move on? 

4 Mike? 

5 MR. CHRISTOPHER: Okay, thank you. So

6 concluding that, we can move onto the ANOPR analyses,

7 the first of which is the market and technology

8 assessment. This is a very important analysis because

9 it provides some background information and foundation

10 for subsequent analyses. So the main outputs here, we

11 just got a flow chart that shows how it interrelates

12 with the preceding, sorry, the following two analyses.

13 The main outputs of the market and technology

14 assessment are product classes, baseline models, and

15 technology options, which are basically just a list of

16 any technologies that could conceivably be used to

17 approve the energy efficiency of these projects. 

18 However, not all of those are going to be

19 practical. So we run a screening analysis, and the

20 ones that make it through we call design options. And

21 those feed into the engineering analysis along with

22 the product classes and the baseline models. 

23 So the purpose of the market and

24 technology assessment really is to characterize the

25 market and the industry for this equipment. So as

EE-2006-STD-0126 COMMENT 03.4
55

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 I've said before, we identify baseline models, product

2 classes, and we also identify manufacturers for this

3 industry. We estimate market shares and trends, and

4 we identify regulatory and other initiatives that may

5 have an impact on this equipment.

6 Now since this equipment has never been

7 the object of standards at the federal level, we're

8 making a general request for data for feedback for the

9 market and tech. assessment. So we're encouraging you

10 to submit any data that you have, any applicable data,

11 and we do have two specific requests here, Item 3.1

12 and 3.2. The first one, looking for information for

13 the market and tech. assessment about manufacturers,

14 what products you sell, what product class, and it's

15 very important that we know about the major

16 manufacturers as well as the smaller, the smaller

17 manufacturers.

18 And Item 3.2 is asking for input on

19 product shipments. We've had some discussion on, you

20 know, basing our analysis on these major product

21 classes, these major players, so getting shipment

22 information is going to be critical to determining

23 where the analysis goes forward.

24 So Bryan, if you'd like to address these

25 two?

EE-2006-STD-0126 COMMENT 03.4
56

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MODERATOR BERRINGER: Yes, at this time,

2 we'd like to seek comments on Item 3.1 which is

3 information attributed to market assessment and in

4 particular, as Mike said, if there's any major or

5 small niche manufacturers pertaining to this -- the

6 market.

7 Comments here on this?

8 Karim?

9 MR. AMRANE: Karim Amrane, ARI. As ARI,

10 we will provide you some feedback as well. We will

11 comment. We do represent the majority of the remote

12 cases of manufacturers. For the self-contained, we

13 have some, but we don't recommend the Department to

14 reach out to those -- the manufacturers that are not

15 in the room today.

16 MODERATOR BERRINGER: Any other follow-up

17 on 3.1?

18 And 3.2 is talking about -- we're seeking

19 information as far as annual product shipments from

20 1990 to 2005, both domestic and end port corresponding

21 to weighted average efficiency for these shipments.

22 Is there any -- Karim?

23 MR. AMRANE: Karim Amrane, ARI. To the

24 extent that we have the information we will provide

25 you some information. However, I precaution you, we're

EE-2006-STD-0126 COMMENT 03.4
57

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 talking about average efficiency. The ARI standard

2 was just published this year, so it can be very

3 limited information on efficiency, but the shipments,

4 we will get you what we have, which will probably not

5 go as far as 1990. But we'll get it to you.

6 MODERATOR BERRINGER: Thank you. Any

7 additional comments on these questions?

8 All right, seeing none. Mike?

9 MR. CHRISTOPHER: Thanks, Bryan. This

10 figure is a breakdown on equipment that's being

11 covered. So under the general heading here of

12 commercial refrigeration, we've got self-contained

13 equipment that's refrigerators, freezers and

14 refrigerator freezers, with and without doors and some

15 of these obviously are already covered by EPACT.

16 Those are shaded in this gray hache. So these are

17 refrigerators with doors, non-ice cream freezers with

18 doors, and refrigerator freezers with doors.

19 So the self-contained products that we're

20 covering are refrigerators without doors, ice cream

21 freezers with and without doors, and refrigerator

22 freezers without doors. And the remote condensing

23 products are the refrigerators, the freezers and the

24 refrigerator freezers with and without doors.

25 And we've just identified kind of a

EE-2006-STD-0126 COMMENT 03.4
58

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 numbering scheme down here that will correspond to the

2 following -- I'm sorry, the upcoming slide, just to

3 keep things clear.

4 So the first major category, ice cream

5 freezers with and without doors, we can further break

6 those down into solid doors and transparent doors and

7 ice cream freezers without doors we can break down by

8 orientation, horizontal, vertical, semi-vertical.

9 Self-contained equipment without doors --

10 refrigerators, freezers and refrigerator freezers.

11 Now we break all those down without doors as well into

12 orientation of horizontal, semi-vertical and vertical.

13 And remote condensing equipment with and

14 without doors, refrigerators, freezers and

15 refrigerator freezers were the ones with doors, again,

16 broken down, transparent and solid and the ones

17 without doors broken down by orientation.

18 So really this breakdown is our initial

19 thinking, the Department's initial thinking on how we

20 could break these products down and it's also really

21 kind of an all possibilities. We've got everything

22 broken down as far as you can go in terms of door type

23 limitation. And we understand that based on shipment

24 data or other analysis we may be able to combine or

25 eliminate some of these classes.

EE-2006-STD-0126 COMMENT 03.4
59

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 We actually want to take this opportunity

2 to present ARI's proposed product classes as well and

3 they've taken a little bit different approach. We

4 want to contrast their approach with ours. And we've

5 prepared a back-up transparency here. 

6 (Pause.)

7 It's that legible to everyone? No? 

8 (Laughter.)

9 That's good? All right, I'll take you

10 through it here. So we've got these product classes

11 from ARI. They've got a draft operations manual and

12 where we break down first by condensing type, either

13 self-contained or remote, ARI is breaking down

14 initially by orientation and whether it's with or

15 without doors. 

16 So they've got six million product

17 families, vertical with doors, vertical without doors,

18 semi-vertical without doors, service over-counter

19 which is not a product class that we proposed and then

20 horizontal with and without doors.

21 From there, they break it down by

22 condensing type, self-contained, or remote condensing

23 and then each of those are broken down into a

24 temperature category, medium, low, ice cream and

25 application.

EE-2006-STD-0126 COMMENT 03.4
60

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 So that being said, we've got a request

2 for feedback and I'm going to try to bring this back

3 up.

4 (Pause.)

5 The intent here is to use this to foster

6 a discussion on these items. We want your feedback on

7 product classes. This is one of the huge problems we

8 have right now is defining these product classes.

9 MR. LEWIS: Mike, everybody has a copy of

10 the handout. It has the questions in there.

11 Why don't you project on the screen and

12 let them follow along?

13 MODERATOR BERRINGER: Are you ready to

14 discuss feedback now?

15 MR. CHRISTOPHER: Yes, let's do that. All

16 right, then we'll go ahead and go to item on your

17 slide, 28, item 3.3, the Department requests feedback

18 on the proposed classes for the commercial

19 refrigeration equipment covered under this rulemaking

20 and the criteria used for creating the classes. So

21 this is referring to classes.

22 So we have sort of two proposals on the

23 board. Any comments on the classes?

24 Larry?

25 MR. HOWINGTON: Larry Howington with Hill

EE-2006-STD-0126 COMMENT 03.4
61

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 Phoenix. Just so that you understand kind of where we

2 came from and how we defined the classes, by looking

3 at the structure of the product version, the real

4 reason in doing that is that more closely related, we

5 felt to energy consumption by product family. The

6 structure of the case has to do with how much energy

7 consumption you're going to have and then you have

8 doors or you don't have doors, that will affect it

9 also, but really energy consumption is really kind of

10 a function of how the case is actually built and

11 that's what we use as our first breakdown.

12 And then we felt after that it was just a

13 matter of what temperature you're applying and how

14 you're operating it, self contained or remote.

15 MODERATOR BERRINGER: Any other comments?

16 I see Bruce and then Aris.

17 MR. HIERLMEIER: Bruce Hierlmeier, Zero

18 Zone. Just to reiterate what we talked about before,

19 we have the low temperature in the ice cream primarily

20 for our customers to be able to size their equipment

21 when they're running a little bit colder. That was

22 the intent here and then also so customers could

23 compare ratings amongst manufacturers so that they

24 would have some ability to determine who uses more or

25 less energy if they're going to store ice cream. So

EE-2006-STD-0126 COMMENT 03.4
62

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 it wasn't necessarily to try and develop a different

2 product class as much as aid our customer base.

3 MODERATOR BERRINGER: Aris?

4 MR. MARANTAN: Aris Marantan, Navigant

5 Consulting. One of the things that we wanted to do in

6 our initial attempt to define product classes was to

7 put down on paper exactly what we thought was being

8 described to us in EPACT. And so we tried to include

9 every possible combination that we could envision and

10 when we did that, we saw a lot of different product

11 classes and we were really happy to see actually the

12 work that ARI has put together for the product

13 families.

14 As you'll see from the handout on slide

15 26, most of the product classes are in pretty good

16 agreement. We thought of the same things, the

17 operating temperature levels, the operating mode. One

18 of the things we didn't think about was, of course,

19 the service over-counters as Mike mentioned earlier.

20 We also in looking through the two

21 different ways of describing product classes, we also

22 noticed that there were a couple of things that we had

23 that didn't show up here. Do you remember which one

24 that was specifically?

25 MR. CHRISTOPHER: Yes, I think one of the

EE-2006-STD-0126 COMMENT 03.4
63

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 major ones was we thought there maybe should be a

2 semi-vertical with doors.

3 MR. MARANTAN: The possibility of having

4 a semi-vertical with doors.

5 MR. CHRISTOPHER: Yes.

6 MR. MARANTAN: So as I've heard just now,

7 a lot of thought has been put into this in describing

8 the energy consumption of these things and what's a

9 large portion of the market and maybe what's not. So

10 we're happy to see this.

11 MODERATOR BERRINGER: Bob?

12 MR. TANNER: Bob Tanner with Hill Phoenix.

13 In developing this, none of our members could identify

14 anyone that manufactured that type of product in semi15 vertical with doors, so we just eliminated it from the

16 mix.

17 MODERATOR BERRINGER: Thank you. Any

18 other comments?

19 Yes, Scott?

20 MR. SMITH: Scott Mitchell, Southern

21 California Edison. 

22 The first question I had is why the

23 refrigerators with doors and refrigerators-freezers

24 with doors are not included? Is that because they're

25 covered by another standard?

EE-2006-STD-0126 COMMENT 03.4
64

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MR. CHRISTOPHER: The refrigerators?

2 MR. SMITH: The ones that were graded out?

3 MR. CHRISTOPHER: Yes, sorry. I have a

4 little key up here. Those are the ones that are

5 covered by EPACT.

6 MR. SMITH: Okay, I just wanted to clarify

7 that.

8 MR. CHRISTOPHER: Those are the self9 contained with doors.

10 MR. SMITH: Okay. And then secondly,

11 we've done a lot of work on open display cases. I

12 worked in the Refrigeration and Thermal Test Center.

13 Many of you are probably aware of that organization.

14 We do a lot of testing on refrigeration equipment.

15 And one of the things we've learned is that about 85

16 percent of the energy consumption of open cases comes

17 from entrainment of ambient air into the cases. And

18 I know that we're looking at regulating the actual

19 equipment that's being used to make sure that it's the

20 most efficient equipment, but who is going to look at

21 whether stores choose a doored case over an open case?

22 If we can reduce the energy consumption 85

23 percent by using a different type of case, is that

24 going to be part of the standard?

25 MR. CHRISTOPHER: I mean we're mandated to

EE-2006-STD-0126 COMMENT 03.4
65

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 regulate the products that are sold. It's not our --

2 Karim?

3 MR. AMRANE: Karim Amrane, ARI. I don't

4 think it's DOE's role to ban or to restrict products.

5 It's up to the store to decide which products makes

6 sense for the store. It's not for DOE to decide which

7 equipment should be sold, open door, closed door.

8 MR. LEWIS: Ron Lewis, DOE. The

9 empowerment and authority that we have is to regulate

10 the manufacture of products. We can't regulate the

11 application where they're used. We don't around to

12 buildings and we don't have people that go out in the

13 field and check to see what's being used. What we do

14 is make it legal to manufacture products that meet a

15 certain minimum efficiency to be manufactured and then

16 distributed, but it has nothing to do with what people

17 choose as a final product in an application.

18 So we're trying to with the statutes that

19 require us to cover certain products, eliminate the

20 least efficient products, but the choices that are

21 there, as far as products and applications that go in

22 that matrix and the complexity of all the different

23 selections would become so complex that we'd never be

24 able to enforce that.

25 MR. RIVEST: Mike Rivest, Navigant

EE-2006-STD-0126 COMMENT 03.4
66

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 Consulting. This goes to the basic understanding of

2 what a product class is. A product class is a

3 grouping that represents a different utility to the

4 consumer. And that utility has a consequence on it,

5 energy consumption. So yes, we could save more energy

6 by banning open cases, that would reduce the utility

7 to the supermarket to sell certain products. So

8 that's why it's done that way. 

9 It might consume less electricity to be

10 completely vertical as opposed to semi-vertical.

11 MODERATOR BERRINGER: Scott, did you have

12 any follow up to that?

13 MR. MITCHELL: Scott Mitchell, Southern

14 California Edison.

15 To the manufacturers, as far as open

16 freezer cases, is that a big portion of sales?

17 MR. HOWINGTON: Larry Howington, Hill

18 Phoenix. It is not a big portion of sales. If you

19 want to put it in the final, we'd be glad to quick

20 producing them. 

21 (Laughter.)

22 I'm just kidding.

23 (Laughter.)

24 It's something that a few folks believe it

25 really sells certain types of products, aids them in

EE-2006-STD-0126 COMMENT 03.4
67

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 selling product in stores. So we still provide them

2 because of that, but it is a very low percent.

3 MR. MITCHELL: Okay, thank you.

4 MODERATOR BERRINGER: Andrew, did I see

5 your hand?

6 MR. DELASKI: Andrew Delaski, Appliance

7 Standards Awareness Project. And this is for whoever

8 can answer it, but Larry, you mentioned that the semi9 vertical with door, if you eliminated that class from

10 the ARI product of classes, in comparison to what the

11 Department has suggested in this slide, are there any

12 other product classes or is that the only one that was

13 eliminated?

14 MR. HOWINGTON: Larry Howington. That is

15 the only one that I'm aware that was eliminated. And

16 as you can see, when you put a door on, the nature of

17 the air curtain becomes less relevant, so that's

18 really why -- we couldn't determine any one that

19 actually made a product like this.

20 MR. DELASKI: Thank you.

21 MODERATOR BERRINGER: Chris?

22 MR. BALESTRINI: Chris Balestrini, Food

23 Products Association. 

24 Am I to understand that what you're doing

25 here is you're saying to the manufacturers these are

EE-2006-STD-0126 COMMENT 03.4
68

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 what you have to manufacture your equipment to as far

2 as efficiencies and stuff like that, but then once it

3 gets into the hands of the person that buys the

4 equipment, they have no culpability to maintain the

5 efficiency of the equipment?

6 You know, it's basically all going to be

7 put on the manufacturers and there's going to be no

8 way to monitor that people are taking care of their

9 compressors properly and everything like that? You

10 know, there's a whole piece there, if you're really

11 trying to save energy, there's got to be some kind of

12 guidance or policing of it, you know, to make sure

13 that the energy efficiency is being maintained.

14 I pity the manufacturers in this situation

15 because they're the only ones that have the gun

16 pointed to their head and nobody else is culpable.

17 And it's probably not my place to defend them, but --

18 (Laughter.)

19 I can understand their frustration with

20 the way this is coming down because it's all pointed

21 at them and there's nobody else that is being held

22 culpable in this whole thing.

23 Is there any plan to try and have any kind

24 of monitoring, any part of -- like -- maybe an EPA

25 piece to it? Somebody that gets out into these

EE-2006-STD-0126 COMMENT 03.4
69

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 grocery stores that audits them and stuff like that,

2 asking for refrigeration efficiency records be

3 maintained.

4 You know, you can take advantage of other

5 agencies that are in there inspecting grocery stores

6 and stuff like that. Then maybe there be somewhat of

7 an enforcement piece to this somehow.

8 MR. LEWIS: Ron Lewis, DOE. Chris, those

9 are all excellent comments and we appreciate that,

10 because that's what we're here for is looking for the

11 opportunities to save energy. We have certain

12 authority and we're charged by statutes to do certain

13 things and the limit of those statutes is to limit the

14 manufacture of products that are sold is not to dilute

15 or dismiss those things that you're talking about as

16 being very important.

17 There are a couple of bright spots out

18 there, hopefully, that help to influence those. One

19 is the cost of energy itself that people are more

20 motivated as energy costs go up, to look at getting

21 the max energy efficiency that they can. I guess from

22 the food products side of things, there is the point

23 of spoilage and functionality, that if things become

24 very inefficiency, that there's the point of its

25 impact on its function, its functionality of keeping

EE-2006-STD-0126 COMMENT 03.4
70

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 things cool and safe and those types of things. 

2 The other point is there are many, many

3 parts of the energy industry. There are ESCos out

4 there. There are a lot of companies that make their

5 living by trying to help people to reduce energy.

6 There are a lot of utility companies that have

7 programs and have expertise. There are a lot of

8 universities that have extension services. There are

9 lot of people out there that can help if somebody is

10 motivated and wants to save energy, but we just are

11 not equipped or are we empowered to go out and inspect

12 and say you need to vacuum your coils, or you need to

13 tune something up. That's just not within our role

14 and responsibility here. But we do respect and

15 appreciate very much your passion for things being

16 maintained, not just being purchased that are

17 efficient. 

18 Thank you for those comments.

19 MR. BALESTRINI: Can I offer one other

20 thing?

21 Chris Balestrini again. Would it be

22 within everybody's best interest to request and

23 starting with manufacturers, request some kind of

24 sticker or notification be attached to the machinery

25 that -- of a maintenance schedule for maintaining your

EE-2006-STD-0126 COMMENT 03.4
71

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 efficiencies and some kind of recommendation about

2 this unit should be serviced every 6 to 12 months,

3 whatever, to maintain the efficiencies that -- I don't

4 know you guys necessarily have that kind of

5 information. 

6 You need to do studies as you get new

7 equipment, but I mean recommending a maintenance

8 schedule may be in everybody's best interest as a

9 piece of this, you know, like should include something

10 in the rulemaking saying should include a maintenance

11 schedule for maintaining efficiencies or something

12 like -- some kind of direction that way.

13 MR. LEWIS: Again, we're limited on what

14 we're empowered to do legally and what we can direct

15 manufacturers to do. There are a lot of voluntary

16 programs that are out there. There are a lot of

17 market -- organizations like CEE -- market

18 transformation, energy efficiency advocacy groups that

19 -- a couple of them right here that have a lot of

20 guidance on their sites and have a lot of outreach.

21 There are a lot of ways to help to educate people and

22 help to make them aware of the significance of things,

23 but unfortunately DOE's empowerment and role is not

24 that.

25 FTC has labeling responsibilities for some

EE-2006-STD-0126 COMMENT 03.4
72

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 things. We set the standards of test procedures

2 and that's really enough of a charge to us right now,

3 but again, not to dismiss or take away from the good

4 comments that you have and the desire for everybody to

5 be aware and save energy where they can.

6 MODERATOR BERRINGER: That was Ron Lewis.

7 And now we'll go to Steve Nadel.

8 MR. NADEL: Just briefly on this last

9 topic, there's also the EPA has the EnergyStar grocery

10 store program that recognizes those stores and

11 encourages them to have the best overall performance,

12 so that's one other aspect.

13 We're turning to this classification, I'm

14 kind of comparing what's on the slide to what the

15 consultants have prepared earlier. As I see it, there

16 are four differences, two of which I think we've

17 discussed already. We've already discussed the semi18 vertical without doors. I believe we've also

19 discussed the ice cream temperature. That's more for

20 application. That's not designed, if I understand

21 correctly, as a separate product class.

22 That leaves two other differences and I

23 was curious that ARI could correspond a little bit

24 about that, how they see them being used. One is the

25 service over-counter. I'm assuming that's for very

EE-2006-STD-0126 COMMENT 03.4
73

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 small equipment, that would be on a counter where it's

2 a straight line, based on volume may not be

3 appropriate, if they could clarify that, that would be

4 good. 

5 And I was curious what they are suggesting

6 regarding this quote application temperature. Is that

7 another just how equipment may be sold, but you will

8 always test equipment either at the medium or the low,

9 as appropriate for standard purposes and then have a

10 separate application temperature for certain sales, so

11 maybe ARI could respond.

12 MR. AMRANE: Karim Amrane, ARI. I will

13 defer your first question to the manufacturers. I

14 think they can answer that.

15 MR. HOWINGTON: I will take a crack at

16 service over-counter. This is Larry Howington, Hill

17 Phoenix.

18 The service over-counter is really the

19 cases that you see in the deli department and service

20 meat department where you have open meats and food

21 product in the cases. They're glass cases. And they

22 are probably the highest dollar value product that our

23 customer is selling. And so those cases then to be

24 very open in terms of visually which means needing a

25 lot of glass. And they're open on both -- there's

EE-2006-STD-0126 COMMENT 03.4
74

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 glass in the front and they have glass in the back

2 too. They have doors in the back as well. Many times

3 you can open the front which means they're a little

4 different than your typical door case where you only

5 have doors on the front. So we felt that the energy

6 used and criteria might need to be a little different

7 there just because of the way those cases are used and

8 they have a very open look from a marketing

9 standpoint.

10 In a store overall, there are not a lot of

11 these cases. Only in the service area, deli service

12 area. So that's what we meant by service over. We

13 generally take -- people are taking the product out,

14 packaging it for the customer and handing it over to

15 them there. You don't serve yourself.

16 Open means seafood, those types of things.

17 Does that make sense?

18 The second question was -- what was the

19 second question?

20 MR. NADEL: About this application

21 temperature and whether that's to be used for product

22 classes or more for marketing and will it affect the

23 product classes?

24 MR. HOWINGTON: It does affect the product

25 classes somewhat. We had kind of a problem with that

EE-2006-STD-0126 COMMENT 03.4
75

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 because customers sometimes want to use cases and I'll

2 give an example. They may have an open case that

3 they're using -- a medium or small open case where

4 they're using a medium temperature. At certain times

5 of the year they may want to run it at low

6 temperatures or they may want to run it at a frozen

7 temperature, but it's not capable of running at zero

8 degrees for product. It might only be able to run at

9 say 20 degrees. 

10 And an example of what you might use would

11 be turkeys or hams or something like that around the

12 holidays. So that's an application kind of case where

13 the target temperature is 20 degrees or 10 degrees and

14 it's not capable of running at 0 degrees, although it

15 is frozen.

16 And we had that conundrum of how to

17 classify it, so we put this application -- it's

18 usually not a lot of cases, however, sometimes with

19 our product another example is ice. A customer wants

20 to run ice in a case frozen and ice doesn't need to be

21 0 degrees. So it may be running at 10 degrees. And

22 it's bags of ice. And they'll want the case to run at

23 that.

24 And if you self-contain the case, you may

25 be running it at 10 or 15 degrees, but you may not be

EE-2006-STD-0126 COMMENT 03.4
76

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 able to run it down to 0 degrees. That's why we put

2 the category for application where it's a temperature

3 that may not be able to hit one of our mainstream

4 product temperatures, but at least you could have a

5 test temperature and you could label it as such.

6 MODERATOR BERRINGER: Mike Rivest.

7 MR. RIVEST: Mike Rivest, Navigant

8 Consulting. I guess thinking ahead a little bit in

9 terms of how we're going to structure the analysis,

10 are the products under -- which there are a series of

11 products, the 12 major product categories and then

12 they're further broken down by temperature, are those

13 physically the same, incorporating the same

14 technologies and then they are delivering different

15 services, if you will, by just a setting or are they

16 specifically built for those temperatures, but with

17 the same mechanical components?

18 The reason I'm saying that is if we were

19 to try and develop a standard, are we going to

20 essentially be doing an engineering analysis on the

21 row of 12 boxes or do we have to get into the further

22 applications and say okay, we can't just test at one

23 temperature and then have it apply, have the standard

24 be developed for one temperature and then the system

25 operated where it's needed by the customer. I'm not

EE-2006-STD-0126 COMMENT 03.4
77

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 sure I made sense there.

2 MR. HOWINGTON: Larry Howington, Hill

3 Phoenix.

4 I'll try to answer your question. One

5 thing that we're doing is and what we agreed to do is

6 we put down all of the common applications interest

7 that we could determine within our user community and

8 we are getting sales -- shipping information on all of

9 those to provide to you so you can get an idea of how

10 -- what the volume is that we're talking about to see

11 what ones might be relevant.

12 Specifically, relative to the

13 construction, unfortunately that kind of depends.

14 Like we told you with zero and -5 or -10 on our ice

15 cream versus frozen, our product doesn't really

16 change, especially for remote cases if they're

17 identical. However, when you're doing other products

18 like I mentioned where you have a medium temp case

19 that's going to run at a lower temperature, you might

20 actually have to do things like change the fan speed,

21 fan motor speed. 

22 When you go to the lower temperature, you

23 may have to lower the air flow speed. So there may be

24 specific things that you do and add to the case that

25 cause it to be constructed somewhat differently, if

EE-2006-STD-0126 COMMENT 03.4
78

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 it's going to run at a medium and low temperature mode

2 that you wouldn't have to worry about it if you're

3 running it at maybe too low a temperature or a higher

4 medium temperature say. That may have a similar

5 construct or it may not.

6 So sometimes it is, and sometimes it

7 isn't. Unfortunately, I can't tell you, they're

8 always different or not different.

9 MR. RIVEST: Thank you.

10 MODERATOR BERRINGER: I see Steve Nadel.

11 MR. NADEL: Yes, just trying to clarify

12 this application temperature and how we apply it, what

13 it sounds to me like and tell me if this would work is

14 that if equipment can operate at one of the standard

15 temperatures, it would be rated at that temperature

16 and that would constitute the minimum standard. There

17 may be some very small number of products that is not

18 capable of operating at either 0 or 38 and that would

19 be just a very small niche category you're suggesting

20 that would somehow have some separate standard.

21 MR. HOWINGTON: Larry Howington again. I

22 think that's true, Steve, and I think by looking at

23 the shipment data, we could get an idea and maybe

24 there will need to be another category, if it's deemed

25 enough volume in that there may be a category like a

EE-2006-STD-0126 COMMENT 03.4
79

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 wine cooler or something which really is just a medium

2 temp. case that runs at a higher temperature. If

3 enough people are producing that, it might be

4 worthwhile to have an application for that possibly.

5 I don't know.

6 MODERATOR BERRINGER: Karim.

7 MR. AMRANE: Karim Amrane, ARI. To follow

8 up on Steve's question, I think what we'll have to do

9 -- what you will have to do is look at the shipping

10 information we will be providing to the Department and

11 then see whether it's worth the time and effort to

12 regulate an application temperature with a very

13 limited amount probably being sold, so there might be

14 cases where application temperature would be relevant.

15 It might be product cases that would be irrelevant.

16 So you have to look at that.

17 MODERATOR BERRINGER: Dave Winiarksi.

18 MR. WINIARSKI: This topic about

19 essentially small volume products brings up an issue

20 that I think is somewhat unique and if Ron doesn't

21 kill me here for mentioning it, that the language that

22 was, I believe, negotiated for the Energy Policy Act,

23 basically says the Department has authority to cover

24 certain products. It then sets a deadline for the

25 Department to develop standards for products and

EE-2006-STD-0126 COMMENT 03.4
80

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 products for which the Department does not develop

2 standards are -- it's then possible that states could

3 come along and individually set standards for it.

4 So we just want to make everyone aware

5 that when we decide that a product is a small niche

6 product and we think the Federal Government may not be

7 or in this rulemaking may not want to cover it. That

8 does open that opportunity for states to decide

9 whether they want to address it. 

10 So one thing that I think I would

11 encourage is if we can think of a way to get certain

12 categories covered within the rulemaking without the

13 extensive amount of effort, that might be beneficial.

14 MR. AMRANE: Karim Amrane, ARI. I guess

15 I have a different interpretation of what EPACT says.

16 And here DOE is given the authority to do rulemaking,

17 but it might well be that when DOE is going through

18 the process, DOE might decide for certain product

19 categories or application temperatures or whatever

20 that it would be exempted. So it will be like an

21 exemption within the scope of the rulemaking. So I'm

22 not saying it that way. I'm saying it more like it's

23 a covered product for which DOE will exempt the

24 product from meeting minimum efficiency standards. 

25 MODERATOR BERRINGER: Andrew.

EE-2006-STD-0126 COMMENT 03.4
81

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MR. DELASKI: Andrew Delaski of Appliance

2 Standards Awareness Project. I'm not sure how far you

3 want to go down this path, but there's a history of

4 the Department in the past having said set a no

5 standard standard, saying that we're determining that

6 no standard makes sense for this product, and we're

7 preempting the states. And that was overturned by the

8 Courts in the '80s. The notion of setting a no

9 standards standard is a big problem in our view. 

10 If a product is not covered, then it is in

11 our view something that is not preempted in the states

12 and it's something we need to be really careful about

13 and think about as we go forward. And that said, I

14 think we want to be, but there's also the question of

15 having a level playing field for the manufacturers.

16 That we don't want to as we go forward, and I agree

17 with Karim's basic concept that we want to address

18 here opportunities for energy savings, not

19 opportunities to cover every single last little thing

20 in the marketplace. That's not the objective.

21 The objective is to save energy in a cost22 effective way. And whether it's the 80-20 rule or the

23 90-10 rule, the 90-10 rule there is, I agree with the

24 basic concept that's been discussed today, but we

25 should be focusing on where the opportunity is. So I

EE-2006-STD-0126 COMMENT 03.4
82

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 think that's where we should be. And if there are

2 products that are left out that create the opportunity

3 for loopholes, that's a concern of ours, that

4 something is left out and some manufacturer sees that

5 as an opportunity to increase the market share because

6 they can then sell into this market and undersell

7 their competition, and that increases energy

8 consumption, that's a big concern of ours, too. 

9 So we want to go after where the energy

10 savings is, but not create loophole, have a level

11 playing field. These are all important concepts.

12 MODERATOR BERRINGER: Steve Nadel.

13 MR. NADEL: Steve Nadel. I was just going

14 to add to that. Before we get all too bent out of

15 shape about what states might do, if it's truly a

16 niche product, a state is not going to bother. States

17 have far less resources than DOE does, so I wouldn't

18 worry too much about, you know, some small product

19 that, you know, a hundred gets sold in a year. No

20 state is going to bother. 

21 MODERATOR BERRINGER: Ron?

22 MR. LEWIS: Ron Lewis, DOE. I think to

23 the point that Andrew just mentioned, our mission is

24 to save energy, to increase energy efficiency and

25 we've had a history of not getting things out very

EE-2006-STD-0126 COMMENT 03.4
83

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 quickly. And trying to get this rulemaking done on

2 the time allotted along with a lot of other

3 rulemakings that we're being asked to do, we need to

4 get creative here in not looking under every single

5 rock and looking for every single little item that's

6 out there and trying to be exhaustive in our efforts.

7 But we want to save energy and we want to impact

8 things and we want to avoid blatant errors and

9 oversights.

10 So in looking at this, if there are

11 insights by people, for instance, when you're talking,

12 Chris, about perhaps changing fan speed or something,

13 if there is a standardized case, and I think I had

14 heard that there's a lot of customization. People for

15 different applications and different store

16 configurations and different store designs, whatever,

17 there's not a great deal of standardization out there

18 right now, so even noting that. 

19 But if there are things that are primary,

20 that are the indicator of the major opportunity to

21 capture energy efficiency and energy savings, if it's

22 testing a case configuration for a certain setting,

23 and even if there's a variable such as a air flow or

24 something else that may be a nuance, an adjustment, a

25 reconfiguration. If there's a way for us to capture

EE-2006-STD-0126 COMMENT 03.4
84

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 things without getting ridiculous in looking to

2 capture everything that's even less than a niche,

3 let's look for those opportunities. Let's look for

4 those commonalities, wherever they're possible. 

5 And if anybody has insights, if there are

6 standardized sizes by application that makes sense, as

7 opposed to individual applications, if there's a sort

8 of base model that people tweak and tune to get to

9 these others, let's look at how we can categorize

10 things to make sense and get the best results without

11 getting down to such fine detail that we never get

12 this accomplished.

13 MODERATOR BERRINGER: Andrew.

14 MR. DELASKI: Andrew Delaski, of Appliance

15 Standards Awareness Project. I just want to request

16 that the Department can make a photocopy of this

17 available. That would help in preparing comments. 

18 MR. LEWIS: The slide right there?

19 MR. DELASKI: Yes.

20 MODERATOR BERRINGER: We can do that. Any

21 other comments on this issue right here? I see people

22 looking at their watch. We're running behind

23 schedule, but I think this is an opportune time to

24 take a break. We'll do a 15-minute break. Be back

25 here promptly at 11:15. We'll start then and then we

EE-2006-STD-0126 COMMENT 03.4
85

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 will finish up these questions and hopefully get back

2 on track. But thank you for all the great discussion

3 this morning.

4 (Off the Record.)

5 MODERATOR BERRINGER: Can we have

6 everybody take their seats? We'll get started up

7 again. I think almost everybody is back. If you'd

8 like to sit at the table and join us.

9 Let's go ahead and see if we can get back

10 on schedule here and get through some of these

11 questions. We're at Slide 28. We're on 3.4 now. It

12 says can the terms horizontal, semi-vertical and

13 vertical be used to describe equipment orientation?

14 If so, how should these be defined based on the angle

15 of the air-curtain, the load-line with the vertical,

16 with the 0 to 30 degree being the vertical; 30 to 60

17 being the semi-vertical and 60 to 90 percent being the

18 horizontal? 

19 So this again is talking about classes.

20 Any comments on the classes? 

21 Larry?

22 MR. HOWINGTON: Larry Howington, Hill

23 Phoenix. We have a definition to put forward to ARI,

24 based upon kind of a composite of all the members.

25 MODERATOR BERRINGER: Okay.

EE-2006-STD-0126 COMMENT 03.4
86

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MR. HOWINGTON: And basically the 0 to 10

2 is horizontal; 10 to 80 is the semi-vertical; and the

3 80 to 90 would be vertical. And that seemed to

4 represent fairly well the kind of classes that are

5 around here.

6 MODERATOR BERRINGER: Okay, great. Thank

7 you.

8 MR. HOWINGTON: So we'll put it forward in

9 writing.

10 MODERATOR BERRINGER: Great, thanks.

11 Mike?

12 MR. RIVEST: Mike Rivest. Larry, it seems

13 like 10 to 80 degrees is very broad. If one were to

14 set a standard based on one of those angles, say

15 halfway, would it be reasonable for the other products

16 to meet that same energy efficiency minimum

17 requirement?

18 MR. HOWINGTON: Again, this is Larry

19 Howington. I can show you product that we make that

20 I think that you would say is clearly semi-vertical,

21 that fall into that fairly narrow category.

22 If you look at the obvious construction of

23 it, it's designed so the shelves start very short at

24 the top and get broader as they go down and if you

25 look at it, you'll see that it obviously is a semiEE-2006-STD-0126 COMMENT 03.4
87

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 vertical. 

2 When you start defining -- if something

3 doesn't convey the visual aspect until you see on very

4 tall ones, they actually can get out pretty far and

5 still have a fairly shallow angle from vertical.

6 It would be a cascade-type case as opposed

7 to a vertical air-curtain case.

8 MR. RIVEST: But what I was saying is is

9 it possible that there might be some products which

10 have say an 80 degree or a 79 degree and would have to

11 meet the same standard as an 11 degree, and would that

12 be acceptable?

13 MR. HOWINGTON: Yes, it should be.

14 MR. RIVEST: Okay.

15 MR. HOWINGTON: Yes. It should be

16 acceptable. I wouldn't think anyone would complain

17 from having to meet the standard. In general, the

18 further you go off the vertical or the horizontal, you

19 start getting into the less efficiency area as you

20 start rolling air across shelves.

21 MR. RIVEST: Okay, thanks.

22 MODERATOR BERRINGER: Okay, any others?

23 So thank you, Larry. You're going to give us some

24 comment on it. Any other input on this 3.4?

25 Okay, 3.5. What product class, if any,

EE-2006-STD-0126 COMMENT 03.4
88

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 can be combined with the standard setting purposes

2 because of their similarities? Can we combine any

3 classes in any areas?

4 Seeing no comments, we'll move on.

5 Hopefully, you will see something you can give us,

6 Larry, in your written comments will be great.

7 3.6. Can analysis for any one of these

8 product classes be applied or extrapolated to another

9 product class?

10 Sounds like a similar type of question.

11 Okay, seeing none. 3.7. Should all these

12 product classes be considered, e.g., do any of these

13 product classes have few or no shipments? 

14 Larry?

15 MR. HOWINGTON: ARI will be forwarding

16 composite shipment to you and I think that should help

17 clarify for you rather than us speculate. We will try

18 to provide you the composite shipment data that's

19 available for all of the suppliers to the members.

20 MODERATOR BERRINGER: Great. All right,

21 then we'll move on to 3.8. Would it be appropriate to

22 extend the standards proscribed for self-contained

23 commercial refrigeration equipment with doors that

24 meet 2005 to similar remote condensing equipment with

25 doors and ice cream freezers with doors covered in

EE-2006-STD-0126 COMMENT 03.4
89

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 this rulemaking? If so, what methodology would be

2 appropriate?

3 Karim?

4 MR. AMRANE: Karim Amrane, ARI. I will

5 defer a little bit to the manufacturers, but I don't

6 think it would be appropriate to extend. I mean

7 remote cases are, I guess, actually in self-contained

8 cases are correlated with respect to volume. The

9 remote cases industry is using total display area or

10 something else. It looks like it's going to be

11 difficult to extend the same methodology that was

12 developed in 17 to the remote cases. But together, I

13 would like to have the industry give us additional

14 comments on that.

15 MODERATOR BERRINGER: Yes, Bruce.

16 MR. HIERLMEIER: Bruce Hierlmeier, Zero

17 Zone. One other item in the self-contained cases the

18 internal volume they use was a gross internal volume

19 which in our study in looking at it as an industry,

20 for remote cases, we're looking at more of a net or

21 usable volume so you don't get to take advantage of

22 some of the distance between shelves and doors and

23 that type of thing. So that wouldn't work well to

24 just assume all those numbers would start working and

25 applicable to our equipment.

EE-2006-STD-0126 COMMENT 03.4
90

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MR. WINIARSKI: Dave Winiarksi for Pacific

2 Northwest Laboratory. Part of the reason this

3 question came up in perusing some of the

4 manufacturers' literature, we saw products that were

5 essentially looked like the same product, but

6 available in both the self-contained and a remote

7 configuration and we were not -- we didn't know

8 whether that was a common approach within the industry

9 or sort of that one manufacturer's products.

10 MODERATOR BERRINGER: Yes, Bruce.

11 MR. HIERLMEIER: Bruce Hierlmeier, Zero

12 Zone. I guess I can't speak for a number of

13 manufacturers, but I will. A number of our

14 manufacturers will make those perhaps as niche

15 products, so if a customer says I want to have this

16 nice, big piece of remote equipment, but can you

17 provide a condenser unit to go along with it, they

18 will apply that unit for that, but it's not a high

19 volume sale. If they're doing self-contains, they're

20 really in that marketplace, much like people that make

21 a lot of self-contains, if the customer wants to have

22 it remote, they'll make that a remote for them, but

23 again, it's probably not the rule. It's an abnormal

24 product form.

25 MODERATOR BERRINGER: Okay, any other

EE-2006-STD-0126 COMMENT 03.4
91

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 follow-on comments. Any other manufacturers? Larry?

2 MR. HOWINGTON: Larry Howington, Hill

3 Phoenix. 

4 As you have the opportunity to start

5 looking at energy data, I think that you'll probably

6 be happy to see that on the remote cases, in general,

7 that energy consumption will be lower in the self8 contained cases. Some of the issue has been trying to

9 make the direct comparison. I don't know how you make

10 the jump exactly or if there would be a good way to do

11 it. But in general, I think that we'll find the

12 remote cases will be more energy efficient.

13 MODERATOR BERRINGER: Yes, Chris?

14 MR. BALESTRINI: Chris Balestrini, FPA.

15 I'm just wondering if the classes and everything like

16 that that you're talking about, I'm wondering if there

17 isn't a volumetric effect that as you get bigger, the

18 behavior of the machinery will change as your volume

19 increases in your units and you may end up running

20 into like size constraints that you have to specify

21 within certain classes to be able to generate the

22 efficiencies and the rating and things like that that

23 you want to try and control here.

24 I don't know if any of the guys doing the

25 studies are breaking it down into volumetric

EE-2006-STD-0126 COMMENT 03.4
92

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 comparisons as well as the efficiency comparisons.

2 MR. CHRISTOPHER: I think we are going to

3 get into that a little bit in the next slide.

4 MODERATOR BERRINGER: Well, why don't we

5 go ahead, if there's no other comments, we'll go ahead

6 and move on to the next slide.

7 MR. CHRISTOPHER: Yes, Karim touched on

8 this too, the idea of a normalizing factor or a

9 normalizing metric. And the ones that we're looking

10 at, of course, are volume which is historically have

11 been with the closed cases, the self-contained; total

12 display area which defined in the ASRAE 72 and the ARI

13 1200 and length. And our initial thinking really is

14 that length isn't going to be adequate to capture all

15 the effects and what we're proposing is to use this

16 total display area for the open cases and volume for

17 the closed cases. And we've done some looking into

18 this for manufactured data and the next slide actually

19 -- maybe we can come back to this item.

20 We looked at the -- this is just a sample

21 of some of the background research we've been doing to

22 compare energy consumption to total display area. So

23 this is for the remote condensing, basically a multi24 deck meat or dairy case and this is a survey of

25 publicly available manufacturer literature.

EE-2006-STD-0126 COMMENT 03.4
93

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 And so really what we're looking at is for

2 medium temp, the variation in energy consumption with

3 TDA and we're starting to explore what these ranges

4 are, what some of the upper and lower limits are on

5 these. 

6 Does that begin to address the question

7 that you have?

8 MR. BALESTRINI: Yes.

9 MR. CHRISTOPHER: Okay.

10 MR. BALESTRINI: Yes, that's what I was

11 wondering about is is your air getting bigger as your

12 volume gets bigger?

13 MR. CHRISTOPHER: Yes.

14 MR. BALESTRINI: Basically, you're

15 demonstrating that right there.

16 MR. CHRISTOPHER: We've got the same kind

17 of approach for length and volume as well. And we've

18 got backup slides if you want to take those out and

19 have a look. That's something --

20 MODERATOR BERRINGER: Yes, Karim?

21 MR. AMRANE: Karim Amrane, ARI. Just a

22 quick question. It says here that the energy

23 consumption is based on ARI 1200 2006?

24 MR. CHRISTOPHER: Yes.

25 MR. AMRANE: All the data you have here is

EE-2006-STD-0126 COMMENT 03.4
94

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 based on the ARI 1200 2006?

2 MR. CHRISTOPHER: We took manufacturers'

3 specifications and calculated CDEC through the ARI

4 1200 calculation method. So that being said, maybe we

5 can come back to this and address this, if there are

6 any specific comments.

7 MODERATOR BERRINGER: Steve, did you have

8 a question or comment?

9 MR. NADEL: Steve Nadel, ACEEE. And this

10 will pick on some of the things that Scott Mitchell

11 was saying before. I think for the open cases which

12 metric you use could very much affect whether this

13 equipment increases the marketshare, decreases, how

14 much of it is sold.

15 If you do total display area, that will

16 penalize equipment that is deeper, that has more

17 storage area because there is heat loss associated

18 with that, so you may get more volume and it makes it

19 easier to sell the equipment, just based on display

20 area.

21 Likewise, if you do display area, it

22 encourages higher heights as opposed to trying to

23 narrow the height compared to say the length.

24 So our preference is, if possible, to do

25 something more toward refrigerated volume and in order

EE-2006-STD-0126 COMMENT 03.4
95

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 to really try to keep this as efficient as possible.

2 The one compromise I can think of is you may have to

3 go to a multi -- some type of progression equation

4 that would have both volume and either length or

5 display area, but to just do display area, I think

6 would needlessly increase energy use.

7 MR. CHRISTOPHER: Is a multi-metric like

8 that problematic since you might be counting, say if

9 you do volume and display area, are you counting

10 certain dimensions twice?

11 MR. NADEL: I was thinking it would be a

12 regression equation though, the current standard for

13 say self-contained refrigerator was based on a

14 regression equation based on volume, so you just have

15 two variables. One is volume. One might be display

16 area. Just a slightly more complicated equation, but

17 based on actual data for the base cases and so on.

18 MODERATOR BERRINGER: Karim, do you have

19 a follow-on?

20 MR. AMRANE: Karim Amrane, ARI. Again,

21 going back to the question of whether to use total

22 display or volume, again, I will defer to the

23 manufacturers, but it seems to me that in the remote

24 cases, the trend has been to use total display area,

25 not only in the U.S., but as well in Europe. So I

EE-2006-STD-0126 COMMENT 03.4
96

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 think we are trying here to align ourselves with out

2 standards like the ISO standard that uses total

3 display area.

4 So we want to be consistent. Our

5 certification program will be based on total display

6 area, so that's how the data is going to be listed in

7 our directory.

8 MODERATOR BERRINGER: Yes, Don?

9 MR. BRUNDAGE: Don Brundage, Southern

10 Company. From a practical point of view, I don't know

11 that you're going to get people building cases that

12 are taller because then consumers will not be able to

13 reach them. I think there's some normal, common sense

14 limits to these things.

15 MODERATOR BERRINGER: Thank you. We may

16 -- we have some questions from the audience. Please

17 come to the mic and identify yourself.

18 MR. MACMINN: I'm Chris MacMinn from

19 Navigant Consulting and I just actually had a quick

20 question for Karim and I think maybe Larry. I think

21 I heard you guys mention that you use total display

22 area for all remote cases? We had actually be

23 thinking that total display area was relevant to cases

24 without doors as opposed to maybe volume for cases

25 with doors. But you're saying that you think that

EE-2006-STD-0126 COMMENT 03.4
97

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 total display area is relevant to remote cases whether

2 or not they have doors?

3 MR. HOWINGTON: This is Larry Howington

4 with Hill Phoenix. Truthfully, we're collecting the

5 data to look at it both ways to see which we get a

6 more reasonable fit because -- and I think what you

7 said may be right. For door cases and we want to --

8 a lot of regulation has been put out on door cases

9 already. We didn't want to be looking like we were

10 terribly inconsistent with that. So we felt like we

11 might kind of leave that alone and then looking at the

12 open cases, because the ISO standard went with total

13 display area, we wanted to look at the data that we

14 generate and graph it and kind of see, look at it both

15 ways and see what made sense. If the fit seemed to be

16 better one way or the other relative to representing

17 energy per what the customer was buying.

18 In an open case, the customer is buying

19 display area. How well they display the product. As

20 we close the case up, as far as they're concerned, it

21 has less value to them. So that's kind of, I think

22 what drove ISO and sort of was in our mind and we're

23 in the process of pulling all that data together which

24 we'll share so that maybe we can look at it and see

25 what makes the most sense.

EE-2006-STD-0126 COMMENT 03.4
98

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MODERATOR BERRINGER: Okay, so I think we

2 pretty much touched on the question of Item 3.9 then

3 as far as feedback on it, the test metric.

4 Are there any other comments on that item?

5 MR. CHRISTOPHER: Well, then the last

6 issue here in the market and technology assessment is

7 baseline units. So once these classes have been

8 established, whatever they may be, we just select the

9 baseline in each class.

10 And so this is the starting point for

11 these standards, so we measured standards against the

12 baseline. And typically, previous standards are used

13 as to set the minimum baseline, but we don't have

14 standards in this case to go by. So we're looking to

15 do background information to get this data. Take a

16 look how to establish these baseline models and we'd

17 like to get manufacturers' data to supplement that

18 and your ideas about how to select these baseline

19 models.

20 So in fostering some discussion about this

21 issue, I want to hold off on the questions for a

22 second and go to this next slide here which -- so the

23 gray data points here are that previous graph that we

24 showed. CDED daily energy consumption versus TDA for

25 a standard level of lighting which we've defined as a

EE-2006-STD-0126 COMMENT 03.4
99

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 single row of lights in an open display case.

2 The other data set here, the black points,

3 represents the same set of cases, but this time the

4 CDEC was calculated with a maximum level of lighting

5 which we've defined as one can't be row, one sill row

6 and one row of lighting per shelf. And really what we

7 want to get at here is that we need to be careful

8 about what assumptions we make in defining a baseline

9 model and we want to get your input on things like

10 lighting, for example, is a big one, that have an

11 impact on the utility of the case and a great impact

12 on the energy efficiency of the case.

13 So that being said I want to go back to

14 these two items and see what comments, questions we

15 have about how to select baseline models.

16 MODERATOR BERRINGER: Okay, so at this

17 point we'll look at item 3.11. It says the

18 Department's feedback on how to select baseline models

19 for each product class. 

20 Comments on that? This is a very

21 important issue as far as where you start looking at

22 your analysis, especially your engineering analysis.

23 Karim?

24 MR. AMRANE: Karim Amrane, ARI. You will

25 get feedback from us on what the baseline is. We are

EE-2006-STD-0126 COMMENT 03.4
100

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 putting together a document that will define it,

2 hopefully, at least from our point of view and you

3 will get probably a baseline as far as on consumption

4 too.

5 MODERATOR BERRINGER: Great, thank you.

6 And then it says moving on to item 3.12, the

7 Department seeks information on what particular

8 components and features characterize the baseline

9 models for each product class. There's a number of

10 examples there. 

11 All right. Baseline information that you

12 submit to us will -- that will help us out. Thank

13 you.

14 MR. CHRISTOPHER: Thanks, Bryan. That

15 does it for the market and tech. Now we're going to

16 hand it off to Aris Marantan, who is going to discuss

17 the analysis and the engineering analysis.

18 MR. MARANTAN: Okay, thank you Mike. Can

19 everybody hear me okay? The next analysis performed

20 as part of the ANOPR is the screening analysis which

21 I'll describe here. Okay, the purpose of the

22 screening analysis is to screen out technology options

23 that will not be considered any further in the

24 analyses. The Department applies four screening

25 criteria which are listed here. Two of the list of

EE-2006-STD-0126 COMMENT 03.4
101

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 technology options determine what the applicable

2 design options shall be for use in the remaining

3 analyses.

4 These four criteria were developed as part

5 of the process rule by the Department of Energy, and

6 they include first of all the technological

7 feasibility, which is any technologies that are not

8 incorporated in commercial products currently or any

9 working prototypes will not be considered any further.

10 So it has to be demonstrated for us to be examining

11 that technology.

12 The second one is practicability to

13 manufacture, install, and service. If mass production

14 of a technology and reliable installation and

15 servicing of any technology cannot be achieved by the

16 time the standard comes into effect on a scale

17 necessary to serve the market, then it will not be

18 considered any further as well.

19 The third one is adverse impacts on

20 utility or availability to customers. So for this

21 criteria, if a technology is determined to have

22 significant adverse impact on utility or utility of

23 the product to significant subgroups of consumers, or

24 results in unavailability of product types with

25 performance characteristics, features, sizes,

EE-2006-STD-0126 COMMENT 03.4
102

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 capacities, that sort of thing, the volumes that are

2 substantially the same as products that are generally

3 available in the U.S., then they will not be

4 considered any further.

5 And the last one is adverse impacts on

6 health or safety. That's pretty self-explanatory. So

7 what I want to emphasize here is that we'll be looking

8 for comments on which technology options the

9 Department should screen out in order to have a

10 remaining set of limited design options which will be

11 considered further in the analyses, particularly the

12 engineering part of it.

13 Okay, what you see here is an initial list

14 of technology choices. This one happens to be

15 applicable to all equipment types that we're examining

16 here in this rulemaking. The technology choices are

17 typically developed using past technology options that

18 have been used or prototype designs, as I've

19 mentioned. And initially, this list of technology

20 choices includes technologies that are technologically

21 feasible from our understanding of the industry

22 currently.

23 However, in consultation with stakeholders

24 and using this screening criteria that I've just

25 described, we will filter this list down to a usable

EE-2006-STD-0126 COMMENT 03.4
103

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 set of design options. The list continues on the next

2 slide, for equipment without doors only and also for

3 self-contained equipment. And then at this point

4 before I turn it over to Bryan to lead the discussion

5 on each of these, I want to make clear that the

6 Department is interested in specific information using

7 the screening criteria to screen out these technology

8 options. We want to make sure that any comments we

9 receive are explicit and relate to the full-screening

10 criteria if possible.

11 MODERATOR BERRINGER: Okay, yet again

12 3.10, it says what technologies or designs if any

13 should be added or removed from this list above. So

14 I'm not going to go to each technology. I don't think

15 you guys can see that, if you think something is here

16 or we've missed something that needs to be added, a

17 technology that you think should be on here, we need

18 to add it the list if, as Aris said, that if the four

19 criteria would apply to something that is on the list,

20 and you feel it should be screened out because of

21 safety issues or other issues, then please let us

22 know. 

23 Let me start with, does anybody feel that

24 there's something that's missing from this list that

25 needs to be added on technology? Seeing none,

EE-2006-STD-0126 COMMENT 03.4
104

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 anything that needs to be removed from this list that

2 does meet the four criteria for screening out? The

3 purpose of screening out is that we don't spend a lot

4 of time and effort on analyses, engineering analyses,

5 so we don't, something that's a viable technology.

6 Bruce.

7 MR. HIERLMEIER: Bruce Hierlmeier, Zero

8 Zone. I guess I'd be cautious on the demand defrost.

9 hat was popular in the trade journals and topics a few

10 years ago. I think it didn't work all that well if

11 you have one failure in a case, you could lose a

12 thousand dollars worth of product. It doesn't pay for

13 the savings you have. There may be very little

14 interest in that. People are interested in doing it,

15 but no viable technology to make it happen right now.

16 MODERATOR BERRINGER: Thank you. Any

17 other comments from any of the other manufactures?

18 Okay, seeing none.

19 MR. MARANTAN: Okay, after conducting the

20 screening analysis, the Department performs an

21 engineering analysis based on the remaining design

22 options. So the engineering analysis consists of

23 estimating the cost of equipment at various levels of

24 reduced energy consumption. Okay, the purpose of

25 engineering analysis is to characterize the

EE-2006-STD-0126 COMMENT 03.4
105

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 relationship between manufacturer costs and energy

2 efficiency, or in this case energy consumption.

3 In general, as energy consumption

4 decreases, manufacturing costs increases, and that's

5 represented here in the graph. In determining the

6 relationship, the Department will estimate the

7 increase in manufacturer costs associated with

8 technological changes that decrease energy

9 consumption. So as you can see, the output of the

10 beginning analysis is a curve, which you see here.

11 And that is used further downstream in the analysis,

12 in the life-cycle cost and payback period, the

13 manufacturer impact and the employment impact

14 analysis.

15 Okay, this next graph shows a little bit

16 more on the method that we envision for the

17 engineering. This is broken down into several

18 discrete steps. The first step in the process is

19 defining a baseline, which was covered in the previous

20 section. So here baseline units for each product

21 class are defined, and data is gathered for baseline

22 performance. And then we also include mark-up

23 assumptions, which convert manufacturer production

24 costs to manufacturer selling prices. 

25 The next step is the development of the

EE-2006-STD-0126 COMMENT 03.4
106

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 cost versus energy consumption curve. Here the

2 Department will obtain cost estimates for engineering

3 analysis from detailed incremental cost data, which is

4 desegregated into the cost of material, labor, and

5 overhead. And then an industry-wide analysis is

6 created based primarily on manufacturer's supplied

7 data. 

8 The next step is pretty important as well.

9 We don't just rely on the cost energy consumption

10 curve. We have to also do qualification. So in this

11 step, the Department plans to qualify the aggregated

12 cost versus energy consumption data received from

13 stakeholders. By identifying applicable design

14 options and using the test procedure to determine

15 performance improvements, and you saw a little bit of

16 that in the previous section.

17 Now we also do, we also collect

18 manufacturer selling price data as well in order to

19 create these qualification points. In addition, the

20 Department plans to consult with outside technical

21 experts as needed. And then finally, the Department

22 will finalize the analyses based on stakeholder

23 feedback received during the comment period. 

24 So the next few slides describe a little

25 more about each of these steps. Okay, here is the

EE-2006-STD-0126 COMMENT 03.4
107

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 cost versus energy consumption curve development. The

2 first part of that development is for each product

3 class, the Department will select the baseline as a

4 reference point, against which it can measure changes

5 resulting from energy standards.

6 Typically the baseline model is a model

7 that just meets current energy efficiency standards.

8 However, in this case we don't have that luxury. So

9 the Department proposes to use information provided

10 by stakeholders in addition to information that we

11 will collect from publicly available data in selecting

12 the appropriate. 

13 The next step, the Department collects

14 incremental cost data which is intended to represent

15 the average incremental production cost to improve

16 that baseline model to a specific energy consumption

17 level. So this describes really an energy -- an

18 efficiency level approach for the engineering because

19 the Department will examine aggregated incremental

20 increases in manufactured selling price at reduced

21 energy consumption levels. This approach allows

22 representation of the entire range of efficiency

23 levels. 

24 And then the last step which I mentioned

25 earlier is qualification. Here, the Department

EE-2006-STD-0126 COMMENT 03.4
108

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 intends to qualify the cost versus energy consumption

2 relationship supplied by stakeholders through

3 engineering expertise in consultation with

4 stakeholders.

5 Specifically, the Department will

6 supplement the aggregated data with information

7 collected through a follow-up interview process.

8 These interviews are confidential and provides a

9 deeper understanding of the various combinations of

10 technologies used to reduce energy consumption. 

11 Okay, so here we have two questions

12 related to the approach. I'll return it back to

13 Bryan.

14 MODERATOR BERRINGER: Then on to Item 5.1.

15 For each product class,the Department seeks

16 information on incremental manufacturing cost of

17 components. It says see Items 3.12. For energy

18 consumption levels above the baseline. Then e.g.,

19 daily energy consumption, what components are

20 different from the baseline, material cost, labor

21 cost, overhead costs, excluding depreciation, building

22 conversion, capital expenditures, tooling, equipment,

23 conversion of capital expenditures, R&D expenses,

24 marketing expenses, etcetera. So again, we're looking

25 at incremental manufacturing costs of components, in

EE-2006-STD-0126 COMMENT 03.4
109

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 components.

2 Any comments on that?

3 Karim?

4 MR. AMRANE: Karim Amrane, ARI. ARI will

5 be providing those cost efficiency curves to DOE, as

6 an aggregate curve. It will be presented to the

7 industry, not individual manufacturers.

8 MODERATOR BERRINGER: Okay, thank you.

9 Yes, is it Marshall?

10 MR. HUNT: Yes, Marshall, PG&E. I think

11 we need to remember that these are mature market or at

12 production level cost because you might think of

13 widget A, put it in 5 percent of your existing product

14 and it will be a niche very specialized, very

15 expensive item, whereas if it was required by the

16 standards, all of your product had that widget A, then

17 the cost would be much, much different. In past

18 proceedings, that's been a big issue.

19 MODERATOR BERRINGER: Okay, any other

20 comments? 

21 Okay, we'll move on to Item 5.2. The

22 Department is also interested in any equipment test

23 data that stakeholders could provide, e.g., test

24 procedures used, rating conditions, refrigerated

25 volumes, display, total display areas, case length,

EE-2006-STD-0126 COMMENT 03.4
110

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 voltage, integrated average product temperature, daily

2 energy consumption, etcetera. Test data for the

3 baseline model in each product class is particularly

4 important. Again, we were trying to get a baseline

5 from which we're establishing standards. So it's very

6 important, the baseline. Any comments or -- does

7 anybody know any other data sources out there to sort

8 of obtain this information?

9 MR. AMRANE: Karim Amrane, ARI. Again, as

10 ARI, we will provide you the curves, the individual

11 test reports that you're asking, I guess, you can

12 request them from the manufacturers directly. As ARI,

13 will provide you just aggregate numbers.

14 MODERATOR BERRINGER: Okay, great. Thank

15 you. Any other comments? All right, thank you.

16 Aris?

17 MR. AMRANE: Karim Amrane again. I'd like

18 to make a general comment here. I guess it's

19 important that all stakeholders on the table agree on

20 the process that DOE intends to follow here. It's

21 going to be very difficult for DOE to change course

22 along the way because of the time frame we're talking

23 about. So I guess our position to what DOE is trying

24 to do I think we need to hear it today because it's

25 going to be too late six months from now.

EE-2006-STD-0126 COMMENT 03.4
111

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MODERATOR BERRINGER: Thank you.

2 MR. MARANTAN: Okay, this next slide shows

3 cost efficient -- cost energy consumption curve as an

4 example for a specific product. What you see here is

5 energy consumption, also the manufacturing costs. The

6 baseline is right there in the middle. It's the

7 baseline efficiency level that will be determined. 

8 The cost versus energy consumption curve . This one

9 here is on here as well and the last items are the

10 qualification points. These are -- this is an example

11 of the kind of output that we will expect from the

12 engineering analysis and so a little bit on the

13 qualification. 

14 What we intend to do is derive the

15 qualification points from various sources. One of

16 them, first of all, is publicly available information

17 that you might see form the manufacturer websites and

18 specification sheets. Also, the design options that

19 were not screened out in the previous analysis. We'll

20 be using those along with the test procedure. In this

21 case, it's ARI 1200 which we've done some work with

22 already. And also interaction with stakeholders and

23 other technical experts. So that's really what we're

24 getting at here when we say we're putting together

25 qualification points to check the cost efficiency

EE-2006-STD-0126 COMMENT 03.4
112

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 curve.

2 With that, I'll turn it over to Bryan for

3 feedback.

4 MODERATOR BERRINGER: Yes. Item 5.3.

5 Does the Department request feedback on the use of

6 efficiency level approach for determining the

7 relationship between manufacturer's selling price and

8 energy consumption for commercial refrigeration

9 equipment, supported as needed by the design option

10 approach. So we are talking about the approach we're

11 using here. We're going to use an efficiency level

12 approach which is aggregated information from ARI

13 versus a design option approach.

14 So any comments on this approach?

15 Steve Nadel?

16 MR. NADEL: Steve Nadel, ACEEE. It will

17 probably be no surprise because we've made this

18 comment in a variety of other rulemakings. We are

19 somewhat troubled by the design option, I'm sorry, the

20 efficiency level approach because it effectively

21 creates a black box. You have a baseline equipment

22 that manufacturers provide data on how much more it

23 costs. There's no way for anybody to do some

24 independent analysis on that. We prefer the design

25 options approach because it shows how much will be

EE-2006-STD-0126 COMMENT 03.4
113

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 saved, how much will it cost and things can be

2 independently verified.

3 One approach the Department has often done

4 in recent rulemakings is do both. So the Department

5 seems to like the efficiency level approach. We

6 prefer the design options. By doing them both you can

7 calibrate one against another, have data that is

8 publicly available so all parties can comment and not

9 have a black box.

10 So as Karim said, yes, it's going to be

11 critical to get this right up front which is why we're

12 bringing this up now.

13 MODERATOR BERRINGER: Mike Rivest.

14 MR. RIVEST: The subtle difference, I

15 think, between what you are asking for, Steve, versus

16 what we're proposing to do is you seem to envision two

17 complete and separate analyses and we envision an

18 analysis, a primary analysis and a quote secondary and

19 more limited analysis. And we believe, particularly

20 for this product, that the test procedure gives us a

21 wonderful construct to look at the energy savings

22 potential of discrete design options because that's

23 how really the test procedures have been set up. And

24 we can get costs on those design features

25 independently. 

EE-2006-STD-0126 COMMENT 03.4
114

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 So without -- when you saw earlier, there

2 are probably over 30 product classes. They would be

3 a tremendous amount of work to do design option

4 approach on 30 product classes. But we certainly can

5 do a product approach, the design option approach on

6 those product classes that have the greatest energy

7 consumption. And we've already started doing that.

8 You saw earlier the graphic of the product offerings

9 in the market today and that's the type of analysis we

10 can provide for those product classes that have the

11 greatest amount of energy savings.

12 So that's what we're proposing to do.

13 We're confidence that the limited design option

14 approach curves that we'll develop will be consistent

15 with the industry data. We're going to make sure of

16 that through our interview process, so there's no

17 misunderstanding. Because design option approach is

18 not a miracle. It's not the miracle solution either

19 because it assumes a lot, particularly in other

20 products, but I think if we have an understanding of

21 what's truly being done, we'll be able to reconcile

22 our validation with the curves that are being

23 supplied. If not, we'll know very early on through

24 our limited sample. 

25 So anyway, I just wanted to qualify that

EE-2006-STD-0126 COMMENT 03.4
115

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 4and maybe get further reaction from what I just said.

2 MODERATOR BERRINGER: I see a follow-on

3 comment.

4 Chris.

5 MR. BALESTRINI: Chris Balestrini, FPA.

6 I have a question about the curve that you have up on

7 the screen. When you say incremental manufacturing

8 costs, at what point in the manufacturing system are

9 you considering the costs? Is it at the time the unit

10 is completed being built? Because like say, for

11 instance, you have a piece of machinery that you do

12 some options on and you change the weight of it, well,

13 to ship that you're going to incur an upcharge on the

14 transportation side, so you really need to identify

15 exactly where you're looking for the cost, if you

16 already haven't and I don't know if you've already

17 defined that stuff.

18 And the other question I had was the

19 energy consumption, is that like kilowatt hours per

20 cubic foot of volume inside the unit or you know,

21 what's the units that you're using for the energy

22 consumption?

23 MR. MARANTAN: I will answer your second

24 one first. What we've been using in our analysis up

25 until now is kilowatt hours per day per some

EE-2006-STD-0126 COMMENT 03.4
116

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 normalizing factor which has yet to be determined and

2 you know, in a lot of cases we've been using total

3 display area, as you saw in the previous section. So

4 does that answer your question? Kilowatt hours per

5 day per a normalizing factor.

6 MR. BALESTRINI: For an open unit. Now

7 what about the closed one? So that's like per square

8 foot of the display area, correct?

9 MR. MARANTAN: Yes. For the closed ones,

10 we haven't determined that either, but we have similar

11 choices. It can be kilowatt hours per day per cubic

12 feet of volume or some other metric which hasn't been

13 determined yet.

14 MR. BALESTRINI: Does it make sense though

15 to go with one unit so you can compare apples with

16 apples that if a person that wants to buy a unit can

17 compare costs on a relative basis, you know, stick

18 with one unit between both closed and open?

19 MR. MARANTAN: I'd like to have as little

20 difference as possible. It makes sense to do it that

21 way.

22 To answer your first question you actually

23 read our mind. We're going to get to that in the next

24 slide.

25 MR. BALESTRINI: Okay. I'm not reading

EE-2006-STD-0126 COMMENT 03.4
117

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 ahead.

2 (Laughter.)

3 MODERATOR BERRINGER: Andrew.

4 MR. DELASKI: Andrew Delaski of Appliance

5 Standards Awareness Project. 

6 Can the Department take a moment just to

7 describe a bit more how you anticipate collecting the

8 manufacturer data? Is this data going to be collected

9 by ARI, handed over to you in one piece? How are you

10 going to weight manufacturers' data? How is that --

11 or is it going to be collected by your consultants?

12 What's the process envisioned?

13 MR. RIVEST: That hasn't all been worked

14 out. Mike Rivest. Really that hasn't all been worked

15 out yet. I envision that ARI in their comments would

16 address how they propose to display that data to DOE

17 in the past. What we're looking for not just a curve,

18 but a curve supplemented with detailed breakdowns of

19 cost, of variable cost and tooling and investment

20 numbers that we can then use in manufacturing impact

21 analysis. I know that's more of a burden, but it also

22 helps us both in the validation and then in the

23 manufacturing impact analysis further on down. 

24 In terms of the aggregation, I can only

25 speak to what's been done in the past. I don't know

EE-2006-STD-0126 COMMENT 03.4
118

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 what ARI envisions, but typically the data comes in

2 from individual manufacturers and their costs are

3 aggregated based on shipment weighting of their

4 responses.

5 MR. AMRANE: Karim Amrane, ARI. And we

6 intend to follow the same process, so that's going to

7 be done the way it's been done in the past.

8 MR. RIVEST: Right, and what's a little

9 bit different and what's been done in the past is that

10 we would follow up with those manufacturers to ask

11 questions that would help us understand how that, why

12 the curve looks the way it does. And to first of all,

13 make sure that they feel that that curve is also

14 representative of their costs and give us an

15 understanding as we move down the curve of what design

16 options have been implemented. And that gives us

17 information we can then compare with our database of

18 design options and design option costs, so we can see

19 if the efficiency improvement that we believe are

20 going on are in line and also the costs that we have

21 so we'll have costs for fan motors, for example, going

22 to an ECM technology and we can compare that with what

23 they're implementing.

24 Here we have the benefit of a test

25 procedure that already allows us to calculate and to

EE-2006-STD-0126 COMMENT 03.4
119

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 agree on what the energy savings of a certain design

2 implementation is. It is built with that flexibility,

3 which is wonderful. So I don't expect big

4 disagreements about what the efficiency improvement of

5 an upgraded motor would be here.

6 We might defer about the cost of that

7 motor. We have to understand where those cost

8 estimates come from and why they might be or not be

9 different.

10 MR. DELASKI: So a couple of follow-up

11 comments. Andrew Delaski of Appliance Standards

12 Awareness Project.

13 I'm glad to hear that Karim, ARI envisions

14 providing for detailed data to the Department that

15 they've provided in the past. However, back on

16 Steve's earlier point about the need for design

17 options to work for -- by providing that detailed data

18 to the Department it perhaps is a black box to the

19 Department and to its consultants, but to non20 manufacturer stakeholders, the data remains very

21 difficult to understand the components of it.

22 Therefore, the design option were done to validate

23 that data and show the benefits of different technical

24 options. It remains very important.

25 So -- and a second comment. In other

EE-2006-STD-0126 COMMENT 03.4
120

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 rulemakings, other proceedings, the Department has

2 typically, my understanding, typically taken

3 manufacturer cost data and developed a market weighted

4 average to determine the cost to reach particular

5 efficiency levels, in essence, giving more weight to

6 the costs of a big manufacturer than say to the cost

7 of a small manufacturer, to come up with an average

8 figure. It's been a troubling approach to me to use

9 this sort of market weighted average cost numbers. It

10 may be that the manufacturers in this rulemaking that

11 are affected, come forward to you with a set of costs

12 that are very similar. However, in past rulemakings,

13 the costs, I believe, had been quite a distribution.

14 The distribution of costs in an energy

15 efficiency level are very important to understand what

16 the ultimate costs will be. I'll give an example of

17 why this is so important. It's getting to be summer

18 barbecue system. I'm going to put a new deck on the

19 back of my house. Okay? So to get this work done,

20 I'm a good consumer. I'm going to go out and I'm

21 going to get three bids. Maybe I'll get five bids to

22 get this work done if I'm really diligent. 

23 I've lived in my house for 10 years. I've

24 had a lot of work done. I've done the kitchen, I did

25 the bathroom. I've done the attic, and I've always

EE-2006-STD-0126 COMMENT 03.4
121

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 gotten lots of bids. And these bids come in all over

2 the map. The difference between my low bid and high

3 bid has been as much as 2.5 to 3 times for the same

4 job, where we really specifically spec out the job at

5 one time. 

6 We're a cost careful family, so we're

7 focused on low cost. We often take the low bid and

8 that affects the second lowest bid. But I'm not

9 picking the guys 2.5, 3 times the highest cost because

10 that guy doesn't want the job, really. But if I pay

11 three times as much as the low cost, he'll gladly do

12 it for the higher price. 

13 What the Department does in its

14 methodology, it goes out and it gets five bids and it

15 takes the average of those five bids based upon a

16 market weighted average. But when I do my job in my

17 backyard, I'm not going to pay the guy that gets the

18 job the market weighted average. I'm going to pay him

19 what he bid. 

20 To bring this home to this situation, I

21 think what the Department should be looking at is not

22 the market weighted average, but rather what are the

23 costs coming in at the low end of the estimates.

24 Because those low ends tell you where the market is

25 going to go. The manufacturer who can make it at the

EE-2006-STD-0126 COMMENT 03.4
122

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 lower end of that range is the manufacturer who is

2 going to define where the prices are going to happen

3 in that marketplace.

4 Because the other manufacturers will

5 quickly adjust and find ways to sharpen their pencils

6 to meet those costs. If they don't, then their market

7 shares will erode and market shares are the name of

8 the game in most market places. So they're going to

9 find ways to meet those lower costs.

10 The Department doesn't recognize that

11 market share can shift and that the market adjusts to

12 those adjustments, to those cost pressures. So I

13 think this weighted average taking of manufacturer

14 costs, if we re-examined, we looked at how we can take

15 into account how the manufacturer must compete in a

16 marketplace to look at the lower end of those

17 manufacturer ranges. So you need those distributions.

18 The distributions need to be there. But where are the

19 costs coming from for different manufacturers?

20 MR. RIVEST: That's not incompatible --

21 (Laughter.)

22 Somehow I thought he was talking about me.

23 Mike Rivest, Navigant Consulting. That's not

24 incompatible with what we've proposed to do, which is

25 to have a range around that central tendency. It

EE-2006-STD-0126 COMMENT 03.4
123

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 think we'll have to work with ARI to see exactly what

2 that might mean in this case. If it's, I mean, they

3 could supply an entire distribution. That would be

4 complex. It could be more something like high, low,

5 and medium or at least straight average versus

6 weighted average, something that would give a little

7 more understanding publicly to the underlying data.

8 MR. AMRANE: Karim Amrane, ARI. And yes,

9 we've done it in the past and we could do that high,

10 low, and medium, for example. But I'm a little bit

11 concerned with the comments that Andrew made because

12 basically you're trying to get the small manufacturers

13 out of business by proposing what you're trying to

14 propose here. Small manufacturers are going to have a

15 higher cost than larger manufacturers, and those need

16 to be taken into account in the analysis. Otherwise,

17 you'll be skewing the data by just considering the

18 larger manufacturers in the analysis, and that's not

19 how ARI provided data. I'm telling you right now.

20 MR. DELASKI: Andrew Delaski of Appliance

21 Standards Awareness Project. I'm not at all

22 suggesting that the manufacturer impact analysis

23 should be put aside and certainly impacts on small

24 manufacturers should be addressed through the

25 manufacturing impact analysis. And I also, I don't

EE-2006-STD-0126 COMMENT 03.4
124

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 know who is going to have the high cost, who is going

2 to have the low cost. You know, you hypothesized that

3 the small manufacturers will have the higher cost. I

4 don't know that a priori, that that's going to be the

5 case.

6 In fact, I'm concerned that the

7 Department's historical approach by using a market

8 weighted average of cost, it does in fact, what the

9 Department will do in this case or has in the past,

10 correct me if I'm wrong, that that actually

11 disadvantages small manufacturers because their costs

12 are given less weight. So this is not about size of

13 manufacturer, it's about what the market can support

14 in terms of cost. 

15 MODERATOR BERRINGER: Mike Rivest.

16 MR. RIVEST: To the extent, I can say for

17 a fact that there's a very strong correlation between

18 the size and the costs and its inverse, and it's

19 mostly because of fixed costs and R&D investments and

20 things like that. So market weighing tends to bring

21 down the cost compared to the straight average, but

22 you know, if ARI would provide both, we would get some

23 insight into that. If they were to provide a high and

24 low with an average, or maybe something short of the

25 lowest, but percentile, like a 25th percent. When you

EE-2006-STD-0126 COMMENT 03.4
125

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 get low, then you're identifying someone's absolute

2 data submission which is problematic. So I mean, I

3 think we can work on giving a range of data without

4 divulging anyone's particular data point.

5 MR. DELASKI: Thank you.

6 MODERATOR BERRINGER: Any other follow on

7 comments? 

8 Steve Nadel.

9 MR. NADEL: Okay, excuse me. Steve Nadel.

10 Mike Rivest made some comments and asked for further

11 feedback. I guess my initial reactions is that could

12 work provided that the data is provided in the TSD so

13 people can look at it. It's not just DOE reassures

14 itself that data is published to show what the

15 assumptions were and how this correlates.

16 You probably need to do it for the most

17 common classes but also for classes that are

18 technologically very different from the most common

19 classes, because it's hard to generalize. And that

20 based on the costs that come in, probably in the

21 ANOPR, there needs to be some provision that if some

22 costs look way out of line, that you may do additional

23 design option analysis between the ANOPR and the NOPR

24 to help address those issues. So I'm just trying to

25 explore ways to reassure us, and not have a black box,

EE-2006-STD-0126 COMMENT 03.4
126

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 but I understand your desire to simplify the analysis

2 and not try to be working two streams for all 30

3 product classes.

4 MR. RIVEST: Mike Rivest, Navigant

5 Consulting. The process you described, that's exactly

6 what we envision which would be to have very publicly

7 available results of our validation, comparison of our

8 assumptions about cost efficiency versus the submitted

9 data. So it wouldn't be just a matter of putting the

10 dots on that graph, but in fact saying what the

11 generalities are and what are costs, assumed costs

12 were.

13 MODERATOR BERRINGER: Okay, Aris.

14 MR. MARANTAN: Okay, this next slide

15 really talks about the assumptions and the analysis

16 that we're going to put together for the markups. But

17 it sort of gets back to the question that Chris asked

18 earlier about the costs. 

19 As you can see here, the costs that we're

20 talking about, or the price actually, is the

21 manufacturer's selling price. That's what we're going

22 to be including the output of the engineering

23 analysis. 

24 That's derived from two things: full

25 production cost as well as the markups. The full

EE-2006-STD-0126 COMMENT 03.4
127

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 production costs includes direct material, direct

2 labor, factory overhead, and depreciation. The

3 markups include sales and marketing, research and

4 development, interest and profit. 

5 Since we don't have that kind of

6 information readily available, we have to use publicly

7 available information, and that's a matter of

8 collecting that information from sources such as the

9 SEC, from 10K reports, company annual reports, Dunne

10 and Bradstreet reports, Value Line, Standard and

11 Poors, and Ibbotson Associates. So that's the kind of

12 price that we're trying to establish here. Does that

13 answer a question?

14 MR. RIVEST: Mike Rivest, Navigant

15 Consulting. To answer your question specifically,

16 which was transportation costs, those are factored

17 into the lifecycle cost analysis, which you know, what

18 we're deriving here is just manufacturing price, FOB.

19 What does FOB stand for? Freight on Board. 

20 Which means that loading dock of the

21 manufacturer. So the life cycle cost analysis, which

22 includes the installation, any changes in installation

23 costs or maintenance costs for example, are rolled up

24 into the next analysis we'll describe this afternoon

25 which is the consumer life cycle cost analysis. 

EE-2006-STD-0126 COMMENT 03.4
128

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MR. BALESTRINI: Chris Balestrini, FPA. I

2 realize then that you're going to have a situation

3 where your numbers, as far as costs, are going to be

4 extremely variable depending on region of

5 manufacturer, you know, what prevailing wage rates are

6 in certain parts of the country and stuff like that.

7 And are you going to back it down to try

8 to assign a cost per certain size to try to even it

9 out? You know, say manufacturer A provides a

10 refrigeration unit that's 100 square feet display

11 area, and B does one that's 75 square feet. Are you

12 going to try and break it back to a comparative

13 measure so that you can talk about the cost on a per

14 unit basis? 

15 MR. RIVEST: Mike Rivest, Navigant

16 Consulting. What we do is in establishing the

17 baseline for the data gathering, we are declaring in

18 advance that the case we're looking at will be this

19 many total displayed area inches.

20 MR. MARANTAN: So you do define it.

21 MR. RIVEST: So we define that going in.

22 MR. MARANTAN: Okay.

23 MR. RIVEST: Then the problem becomes when

24 we set the standard, we have to set the standard for

25 a broader range of a total display area. So as we saw

EE-2006-STD-0126 COMMENT 03.4
129

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 earlier, if there is a need to adjust the standard to

2 account for the total display area, we do that in a

3 second step, which might be a regression analysis, for

4 example.

5 MODERATOR BERRINGER: At this time, let's

6 look at Item 5.4, the Department seeks comment on the

7 market approach proposed developing estimates for

8 manufacturer's selling price, as Aris mentioned, the

9 different sources that we're looking at, if there's

10 any additional sources that you think would be used or

11 any additional information, now would be the time to

12 let us know.

13 MarshalL?

14 MR. HUNT: Marshall Hunt, PG&E. I just am

15 concerned that is it always true that its manufacturer

16 direct sales or is there one or two or even three-step

17 to market process? Is that allowed for in the

18 analysis? It would be nice if it was so simple that

19 the manufacturers always sold directly, but I doubt

20 that's not really the case.

21 MR. MARANTAN: Yes. To answer that,

22 that's actually covered in an LCC analysis which we'll

23 hear about after lunch. It is accounted for, not just

24 direct sales.

25 MR. HUNT: Thank you.

EE-2006-STD-0126 COMMENT 03.4
130

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MODERATOR BERRINGER: Any other comments

2 on markup? Okay, we'll continue with the next slide.

3 MR. MARANTAN: This slide is the last one

4 for engineering. We have two topics here. The first

5 one is proprietary designs. Here, the Department will

6 consider in its engineering analysis all of the design

7 options that haven't been screened out previously in

8 the screening analysis, including proprietary designs.

9 So the Department will consider these designs in

10 subsequent analyses only if it's not a unique path to

11 a given efficiency level. 

12 If the proprietary design is the only

13 approach available to achieve a given efficiency level

14 than the Department will reject that efficiency level.

15 So there's an item here for that

16 particular topic. I'll just go on to the next one and

17 cover both at the same time.

18 The second one is outside regulatory

19 changes. Here, the Department must also consider the

20 effects of other regulatory changes that can impact

21 manufacturers of these equipment. For example, in the

22 refrigeration industry, due to the phaseout of CFCs

23 and HCFCs, the industry must convert over to HFC-based

24 refrigerants. So that's one of those outside

25 regulatory things that the Department must consider.

EE-2006-STD-0126 COMMENT 03.4
131

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 So the item we request feedback on if

2 there are any other outside regulatory changes. So

3 with that, Bryan?

4 MODERATOR BERRINGER: So we are looking at

5 Item 5.5, are there proprietary designs that the

6 Department should consider for any of the products

7 under consideration by this rulemaking? If so, how

8 should the Department acquire cost data necessary for

9 evaluating these designs?

10 So again, are there any designs -- we know

11 they're proprietary that would be at issue for -- that

12 other manufacturers could not produce these, a similar

13 unit or technology.

14 Not seeing any. Item 5.6. Are there

15 additional outside issues that the Department should

16 consider in its analysis for commercial refrigeration

17 as Aris talked about there, might be other regulatory

18 areas or other issues that we need to consider that we

19 are not.

20 I see Dave Winiarski.

21 MR. WINIARSKI: I just wanted to make a

22 comment here related to remote equipment and the issue

23 that struck me when we were talking about this was

24 that in the use of the ARI 1200 test procedure, the

25 COP of the remote condensing system is described in

EE-2006-STD-0126 COMMENT 03.4
132

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 the test procedure and specified. And I guess one of

2 the things that if we decide to go the route of using

3 that test procedure is that's listed COP as a function

4 of suction temperature going to be consistent with the

5 use of newer refrigerants.

6 MODERATOR BERRINGER: Yes?

7 MR. TANNER: Bob Tanner, Hill Phoenix.

8 That chart that's in ARI 1200, we just picked a

9 standard compressor that's offered. I can't remember

10 the exact model, but it was one that was frequently

11 used in parallel rack systems as a normalizing which

12 is picked as a standard compressor to -- once again,

13 the standard was developed to compare data not

14 necessary to give specific -- it's very close. It's

15 a pretty off-the-shelf technology compressor, but

16 you're right, it would not take into account any more

17 efficient options that have come down that road.

18 MODERATOR BERRINGER: Larry?

19 MR. HOWINGTON: This is Larry Howington,

20 Hill Phoenix.

21 However, from the standpoint of rating and

22 getting a comparison I don't think there will be

23 inverse relationships by not using all the

24 refrigerants and so on. So that table can certainly

25 be revised if it were needed to if some refrigerant

EE-2006-STD-0126 COMMENT 03.4
133

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 were to come out later, but for relative comparison,

2 it should serve very well, actually, as you go

3 forward. 

4 Certainly, you'd be welcome to analyze

5 other refrigerants and see how much difference it

6 would make, but relatively speaking, I think it would

7 make very little difference.

8 MODERATOR BERRINGER: Any other comments?

9 All right, we're at that point as far as

10 lunch here. If we can have everybody back here at

11 1:30. We're about a half hour behind schedule and if

12 you need directions, actually to the cafeteria, Brenda

13 has some maps. 

14 MR. NADEL: Would you want to consider a

15 45-minute lunch break? No.

16 MODERATOR BERRINGER: General Counsel says

17 no.

18 (Laughter.)

19 It's very difficult to get lunch and get

20 back here in 45 minutes. We'll probably start at

21 1:30. Thank you.

22 (Whereupon, at 12:28 p.m., the meeting was

23 recessed, to reconvene at 1:30 p.m.)

24 MODERATOR BERRINGER: Without further ado,

25 I'm going to give it to David Winiarski, who is going

EE-2006-STD-0126 COMMENT 03.4
134

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 to discuss the last couple of sections on markup,

2 energy use and end use load characteristics, life

3 cycle cost, and payback analysis.

4 MR. WINIARSKI: Again, my name is David

5 Winiarski. I'm a Research Engineer with Pacific

6 Northwest Laboratory, and I'll be presenting for the

7 Department. 

8 A number of the analysis steps here for

9 the remainder of the afternoon, starting with the

10 markups for equipment price determination, energy use

11 and energy use load characterization, life cycle cost,

12 and payback period analyses, shipments analysis, and

13 national impact analysis. And that will lead us all

14 the way through to the ANOPR phase of the rulemaking.

15 So to start off with, we'll talk a little

16 bit about markups here. The purpose of the markup

17 analysis is to, one, develop overall price markups for

18 the distribution change from the manufacturer price to

19 the consumer end user. And then, once we've developed

20 those markups, we try to use them to establish

21 consumer prices for both baseline equipment and for

22 equipment at various higher standard levels that are

23 going to be considered.

24 The starting of that process is really to

25 try to identify the distribution channels for the

EE-2006-STD-0126 COMMENT 03.4
135

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 equipment and all the categories of equipment that

2 were going to be covered under this rulemaking. The

3 Department has essentially identified three sort of

4 prototypical distribution channels for the equipment.

5 Distribution channel 1, shown off to the

6 left, is basically going from a manufacturer who sells

7 the product to a distributor or a wholesaler. The

8 distributor or wholesaler then resells the product to

9 a mechanical contractor. The mechanical contractor

10 would then resell the product and the product's

11 installation to a consumer. For instance, in this

12 case a good example might be an independent or a small

13 grocery store.

14 Distribution channel 2 is a slight

15 variation on that, and in this case the manufacturer

16 sells to a distributor, but the distributor then sells

17 directly to the end consumer of the product. It

18 doesn't go through a mechanical contractor firm.

19 The Department envisions this to be

20 characteristic of perhaps self-contained equipment,

21 where a mechanical contractor may not actually be

22 necessary to install the equipment and put it in

23 service. Okay? But there certainly may be other

24 categories of equipment for which this distribution

25 channel might be appropriate.

EE-2006-STD-0126 COMMENT 03.4
136

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 Distribution channel 3 is what's commonly

2 referred to as national accounts. In this

3 distribution channel, basically the manufacturer sells

4 directly to the end user or consumer. Distribution

5 channel 3 may be very important for this rulemaking,

6 dependent on sort of the volume of product that's

7 basically purchased into large national supermarket

8 chains, who may be making that purchase directly from

9 the manufacturer. And as some of us talked during the

10 break, specifying exactly what they want from the

11 manufacturer when they purchase that equipment.

12 Once the Department has identified

13 distribution channels, it's going to go through the

14 process of trying to identify markups for product as

15 basically going from a manufacturer price for the

16 product to a price essentially paid by the end user.

17 Markups relate the consumer's price to the cost of

18 goods sold. That will include the -- if we're looking

19 at the entire distribution chain, that's basically

20 going from, again, the manufacturer's selling price

21 for the product to its eventual shipment to the -- and

22 placement on site.

23 The markups -- the two types of markups

24 that we're going to talk about here -- and the

25 Department has used in previous rulemakings -- we

EE-2006-STD-0126 COMMENT 03.4
137

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 describe here as sort of baseline markups as well as

2 incremental markups. Baseline markups are used to

3 describe basically what's the current markup in the

4 case of a fixed sort of a baseline standard until it

5 gets installed in the field.

6 Baseline markups provide a consumer price

7 that basically represents all of the costs in the

8 distribution chain, plus any additional profit that's

9 made by the members of the distribution chain. The

10 Department recognizes that when the product is -- or

11 when the product manufacturer price may increase, for

12 example in the case of standards due to a change in

13 efficiency, that some of those costs in the

14 distribution chain will increase perhaps

15 proportionately.

16 However, other costs in the distribution

17 chain, in a relatively competitive market, are

18 expected to remain fixed. So what we refer to as

19 incremental markups are markups that are used to

20 assess an incremental change in the manufacturer's

21 price and a corresponding incremental change in the

22 consumer's price for the product.

23 Incremental markups cover only those

24 expenses that vary with the costs of goods sold. In

25 this case, again, expenses that increase due directly

EE-2006-STD-0126 COMMENT 03.4
138

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 to an increase in efficiency. For example, insurance

2 on product shipments might be an example of something

3 that would be fairly proportional to an increase in

4 the original cost for the product.

5 However, other costs, in particular things

6 like direct labor costs, salaries, payroll, and

7 occupancy expenses, may not increase. And those would

8 be held fixed in the calculation of incremental

9 markups.

10 With that little introduction, I'd like to

11 point out that we have four requests for feedback from

12 the stakeholders here regarding the development of

13 markups. In the first case, two of those questions

14 basically make reference to a very recent standard and

15 recent technical support materials that were developed

16 for commercial unitary air conditioners. That's the

17 CUAC you see up there.

18 And one of the things that we're

19 interested in is looking at what similarities

20 stakeholders expect to see between the distribution

21 chains and the relative markups on each point in that

22 distribution chain in refrigeration equipment as

23 compared to the similar -- the markups that were

24 developed for the commercial unitary air equipment.

25 So, Bryan?

EE-2006-STD-0126 COMMENT 03.4
139

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MODERATOR BERRINGER: So Item 7.1, as Dave

2 mentioned, if you go back a couple slides, you'll see

3 the distribution change is the question here. The

4 Department requests information from stakeholders on

5 whether the distribution pass of the commercial

6 refrigeration equipment covered under this rulemaking

7 would be similar to those, to the commercial unitary

8 AC, and, if not, how the two might differ.

9 The Department also requests information

10 on the relative fraction of shipments expected for

11 each path in the appropriate distribution chain for

12 the commercial refrigeration equipment covered under

13 this rule. So it's -- is there any unique situations

14 as far as distribution change, as far as this type of

15 equipment? Or are there -- in this case, are their

16 national accounts is one of the third bars, as you now

17 have the slide up on there.

18 No comments? Are people just sort of

19 absorbing that?

20 (Laughter.)

21 Thumbs up? Thumbs down? Halfway?

22 MR. WINIARSKI: I guess I would ask if

23 that's -- if it's -- if there's information that could

24 be used, or if there's data sources that could be used

25 to characterize relative shipments here.

EE-2006-STD-0126 COMMENT 03.4
140

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MR. AMRANE: Karim Amrane, ARI. I think

2 that we need to go back -- we need to go back and

3 assess. You're asking for what's the percentage

4 eventually, what kind of distribution will be used,

5 the percentage of those being shown to channel 1 and

6 channel 2. And we don't have the information right

7 now, but we can certainly go back and ask for that.

8 MR. WINIARSKI: Right. And, certainly,

9 the corollary to that is: are these the correct

10 distribution chains, or is there something we're

11 missing?

12 MODERATOR BERRINGER: Right. Okay. We'll

13 go on to Item 7.2. "The Department requests feedback

14 on, at the overall markups for the commercial

15 refrigeration equipment covered under this rulemaking

16 for each path in the distribution chain are likely to

17 be similar to those developed under commercial unitary

18 AC for the same distribution facts."

19 So we're certainly doing a similar

20 analysis. Some people -- most people probably weren't

21 involved in that rulemaking there in this room, other

22 than ARI. So, you know, I would -- yes, Bruce.

23 MR. HIERLMEIER: Bruce Hierlmeier, Zero

24 Zone. I mean, are you going to tell us what that is?

25 You're asking us to compare -- are similar to

EE-2006-STD-0126 COMMENT 03.4
141

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 something? I don't know what it is.

2 MODERATOR BERRINGER: Well, I think what's

3 in the slide is the distribution chain, is what we did

4 in the commercial AC. It's a similar process. So I

5 don't know if you have to go back to that rulemaking,

6 but does that look right, or, again, are there any

7 unique situations? 

8 I see Bob, and I'll come back to Bruce.

9 MR. TANNER: Bob Tanner, Hill Phoenix.

10 Just like what Bruce said, we have no idea what the

11 markup is for that market. We can't even compare it.

12 MODERATOR BERRINGER: Can you go back to

13 the slide?

14 MR. AMRANE: I thinking not about the

15 market itself, but I'm thinking about the distribution

16 channels. Is it okay? Is it right? Or --

17 MR. TANNER: That's not what the second

18 question said. The second question said, "Are the

19 markups the same?" and we have no idea.

20 MR. WINIARSKI: Let me first talk, because

21 I'm not sure who -- I know some of the companies are

22 organizations who were actually involved in that

23 rulemaking. Basically, in terms of the structure of

24 the distribution channels -- and I'll see if I can get

25 this right. One of the key differences is in those --

EE-2006-STD-0126 COMMENT 03.4
142

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 in that rulemaking there was a national accounts

2 channel, which is very similar to this one.

3 There was also a -- for the other

4 distribution channels, there was a general contractor

5 involved. And some markups as the -- basically, the

6 general contractor oversaw and added additional

7 markups to the mechanical contractor. In addition,

8 there were few -- there were essentially no

9 distribution channels where you went directly from a

10 distributor to a consumer. A contractor was always

11 involved in the installation.

12 MODERATOR BERRINGER: Okay. If I may get

13 Bob's question, he's asking for the comparison on this

14 question, do you know -- do you recall what the

15 percentages were for the commercial AC, what the

16 markups were for those particular distribution

17 channels? I think that's the -- that's sort of what

18 I think Bob was asking.

19 MR. AMRANE: We have the information.

20 MODERATOR BERRINGER: Okay. Karim says he

21 does have information.

22 MR. AMRANE: Yes. We have the

23 information, and we can share it with you guys.

24 MODERATOR BERRINGER: Okay. I have -- let

25 me go to Jim Raba and then --

EE-2006-STD-0126 COMMENT 03.4
143

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MR. RABA: Jim Raba, DOE. On the front

2 page of your handout for the slides and throughout,

3 there is a website here for the Department, which

4 points you to the compliance standards page. And on

5 that page of our website are many rulemakings, both

6 residential and commercial.

7 This rulemaking for commercial

8 refrigeration appears. But also, the commercial

9 unitary air conditioning rulemaking is there also.

10 The technical support document, TSD -- if you're

11 curious it's a good question. You know, I was

12 thinking, "Gee, are they going to ask that question?"

13 It's true. If you want more information as to what

14 these are all about, how we arrived at them, and the

15 other markups data, the technical support document,

16 it's really available to the public under the

17 commercial unitary air conditioning title or subtitle

18 on that same website.

19 So that may be something to look at

20 afterwards offline. You can come back with comments

21 later, or at least understanding later on, too.

22 Does that help? Of course it does.

23 MR. WINIARSKI: I think it does. The

24 other thing, although I don't have the markups for

25 each channel here -- we didn't present that in there

EE-2006-STD-0126 COMMENT 03.4
144

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 -- the overall markups that were calculated, when you

2 considered all channels and the relative fraction of

3 shipments that went to each channel, was I think on

4 the baseline product about 2.3, 2.31. 

5 So that's basically a multiplication

6 factor you would add to the -- or not add to, you

7 would basically multiply the manufacturer's price by

8 that to get the end cost as it's brought into the

9 building where it's going to be used.

10 An incremental price, which held certain

11 of the costs constant, was approximately I think 1.56.

12 So that's the order of the markups.

13 MODERATOR BERRINGER: All right. Are

14 there any other comments? We could definitely get the

15 information to you as far as what those actually were

16 for the commercial unitary AC, and Karim says he also

17 has that information. 

18 MR. AMRANE: Karim Amrane, ARI. I recall,

19 Dave, also the markups were a function of the

20 equipment, site of the equipment. Was it --

21 MR. WINIARSKI: The markups weren't. The

22 installation costs were.

23 MR. AMRANE: Oh, they were.

24 MR. WINIARSKI: Right. The markups

25 weren't. However, one thing that's broached in the

EE-2006-STD-0126 COMMENT 03.4
145

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 rulemaking is in that particular rulemaking markups

2 were calculated differentially for products going into

3 new construction versus products going as

4 replacements. And the reason for that is, again,

5 because the general contractor was expected not to be

6 involved in typically a retrofit situation and marking

7 it up.

8 In this case, again, it's not clear. We

9 don't have a general contractor shown in our

10 distribution channel, so that didn't appear to be an

11 issue. But we certainly welcome any comments you have

12 on that.

13 MODERATOR BERRINGER: Okay. Any further

14 comments on 7.2? Okay. Why don't we move on to 7.3?

15 "The Department requests feedback on its proposal to

16 use incremental distribution chain markups for the LCC

17 analysis." Any comments on that? Marshall?

18 MR. HUNT: Yes. Marshall Hunt, PG&E. As

19 I remember it, those markups could be pretty

20 substantial. And if we by weighted average could

21 figure out the different stream, I'd want to at least

22 consider that. In other words, I would hate to box us

23 in to the highest markup. 

24 So do you remember -- you got up to 2.31,

25 right? And if we find out this kind of product has a

EE-2006-STD-0126 COMMENT 03.4
146

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 more market -- more of a market process that's

2 cheaper, we should look at that.

3 MR. WINIARSKI: You're speaking in terms

4 of -- typically, what was done in that rulemaking and

5 what we expect to do here would be develop sort of

6 weighted average markups --

7 MR. HUNT: That's fine.

8 MR. WINIARSKI: -- for each distribution

9 channel, you know, for all of the distribution

10 channels put together.

11 MR. HUNT: Yes. Rather than take exactly

12 one.

13 MR. WINIARSKI: Yes, exactly. We

14 typically wouldn't take one and not necessarily the

15 highest every day. 

16 MODERATOR BERRINGER: Any other feedback

17 or comments on 7.3, then? Okay.

18 Item 7.4, "The Department seeks comment on

19 the sources of relevant data that could be used to

20 characterize markups for commercial refrigeration

21 industry." Okay. Seeing -- Karim?

22 MR. AMRANE: Karim Amrane, ARI. I guess

23 a question to you would be: are you reaching out to

24 the distributors? Are you reaching out to the

25 technicians, to contractors, to find out what the

EE-2006-STD-0126 COMMENT 03.4
147

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 market pays in that particular industry?

2 MR. WINIARSKI: That's the plan, and how

3 much will depend, again, on -- how much we reach out

4 depends on sort of the amount of product that goes

5 through each channel, obviously. We want to

6 concentrate our efforts.

7 I think one of the -- famous man,

8 Einstein, said, you know, we want things to be as

9 simple as possible, but no simpler. And I think

10 that's basically the process by which we're going, so

11 we're looking to get information, but we don't want to

12 go down blind alleys if we can.

13 One -- I was going to comment, Karim,

14 because you mentioned that -- that one source of

15 information is the HARDI, Heating/Air conditioning

16 Refrigeration Distributors International. That will

17 give us some good information on the wholesale market

18 price. 

19 MODERATOR BERRINGER: Okay. Any other

20 follow-up on 7.4, then? All right. So now we'll go

21 to the next slide.

22 MR. WINIARSKI: Okay. Once we move from

23 the markets here, in order to characterize the life24 cycle cost of the different standard levels, we need

25 to have some assessment of the energy impact of moving

EE-2006-STD-0126 COMMENT 03.4
148

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 between standard levels. That's done in this bullet

2 here, or chevron here, the energy use and end use load

3 characterization analysis.

4 The Department is going to propose

5 something here. We want to get a lot of feedback on

6 whether this is the right direction to go. 

7 The purpose of the analysis is eventually

8 to come up with the energy savings to go from higher

9 standard levels. And to do that, we have to define a

10 process. The process that was proposed here is to

11 develop energy use and peak electricity demand

12 characteristics for buildings that use commercial

13 refrigeration equipment, and then use the energy use

14 figures from the buildings to sort of characterize the

15 unit energy consumption for different standard levels.

16 The question jumps to mind, why -- why are

17 we interested in looking at building-level analysis?

18 The concern here was that for most of the types of

19 buildings into which these products go the energy use

20 from the commercial refrigeration equipment has both

21 a direct electrical consumption associated with it and

22 its subsequent compressor, but it also has a

23 significant impact on the HVAC use in the building,

24 heating and ventilating in the building, air

25 conditioning in the building.

EE-2006-STD-0126 COMMENT 03.4
149

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 So the idea was to use the building-level

2 analysis to try to assess the net energy impact of the

3 change in standards. The graphic shown here basically

4 describes one particular concern. A large fraction of

5 these products are remote display products. The

6 compressor -- or the condenser system is basically

7 outside the building. The evaporators are inside the

8 building. And essentially what's happening is you are

9 refrigerating that building when you remove heat from

10 it.

11 Now, what that does is, basically, if you

12 didn't do that, you'd be air conditioning the building

13 likely So there is a net differential because the

14 efficiencies between the air conditioner and the

15 refrigeration equipment aren't quite the same. There

16 is a net differential in the impact on the actual

17 energy costs or energy consumption of the building.

18 In order to go down this path, the

19 Department proposed to use some whole building

20 simulation tools. These tools -- there are certain

21 tools that basically have been designed and

22 incorporate commercial refrigeration equipment models

23 within the overall building simulation tool. And we

24 could use those to assess this net energy impact.

25 In order to do that, we need to actually

EE-2006-STD-0126 COMMENT 03.4
150

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 construct buildings. And so the Department's proposal

2 here was to basically build up prototypical buildings

3 -- in this case, a supermarket and a smaller building,

4 for instance a grocery or convenience store, and then

5 basically try to assess the impacts of changes in the

6 energy utilization of the commercial refrigeration

7 equipment on the actual energy use of the building.

8 We would do this by doing these

9 simulations across the country, in different regions,

10 and then use appropriate weights based on things like

11 building construction levels to assess or to weight

12 the impact across these different regions of the

13 country.

14 Now, that is not necessarily as simple as

15 it could be done, but it's trying to assess or address

16 a particular issue that we know is out there. So one

17 of the questions is whether that's an appropriate

18 methodology, or do we do something similar or

19 something simpler. For instance, just using the

20 results directly from the test procedure would be an

21 example of a simpler approach.

22 So, Bryan?

23 MODERATOR BERRINGER: Okay. So that leads

24 us to Item 6.1. "The Department seeks stakeholder

25 input on whether the impact of higher efficiency

EE-2006-STD-0126 COMMENT 03.4
151

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 refrigeration equipment on the building space

2 conditioning loads is significant enough to warrant

3 taking them into account in the energy analysis. And,

4 if so, what methods could be used to estimate the net

5 energy consumption and the load impacts of higher

6 efficiency commercial refrigeration equipment in

7 buildings using this equipment?"

8 I see Don Brundage.

9 MR. BRUNDAGE: Don Brundage, Southern

10 Company. Really, the only way you can do it is on a

11 whole building basis, because there's so many

12 interactions between the refrigeration equipment and

13 the HVAC in the building. I would agree that the

14 whole building approach is the correct one.

15 MODERATOR BERRINGER: Okay. Karim.

16 MR. AMRANE: Karim Amrane, ARI. I would

17 agree as well. I think this is the right way to go.

18 But I would like to get more input from David on what

19 kind of models are we going to use to simulate the

20 buildings, and whether those simulation tools are

21 appropriate in simulating commercial refrigeration

22 products.

23 MR. WINIARSKI: At this point, we have not

24 selected the tool necessarily to use. There are three

25 tools that I know that are out there and readily

EE-2006-STD-0126 COMMENT 03.4
152

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 available. Probably the furthest along in terms of

2 how well it can simulate buildings is the DOE 2.2 tool

3 that has been developed by J.J. Hairsch and has

4 largely been -- the development of this refrigeration

5 model has been funded through the State of California

6 and a number of its exercises. So that was a likely

7 choice.

8 Another possible option is the

9 Department's Energy Plus tool, but that has probably

10 gotten much less review. 

11 MODERATOR BERRINGER: Tom Eckman?

12 MR. ECKMAN: Tom Eckman, Northwest Power

13 and Conservation Council. The issue of significance

14 raises the question of whether or not how significant

15 it is would actually turn the standard levels to be

16 different by climate zone, and whether the Department

17 is prepared to deal with that by setting different

18 standards for different parts of the country based on

19 climate. If it's indeed significant, it might turn

20 the analysis.

21 MR. WINIARSKI: If I could speak to that,

22 there's a couple ways in which it may be significant,

23 and one of them is actually the variability across the

24 continent. Another area it may be significant is this

25 area of sort of tradeoffs between whether you're

EE-2006-STD-0126 COMMENT 03.4
153

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 cooling the building with the commercial AC equipment

2 or the refrigeration equipment.

3 MR. ECKMAN: I'm not arguing whether it is

4 or isn't. I'm saying that if it's so significant that

5 it makes the economics change across the country, are

6 you prepared to promulgate standards that are climate7 specific?

8 MR. LEWIS: Ron Lewis, DOE. We can't do

9 that. We can't promulgate separate standards for

10 different parts of the country.

11 MR. ECKMAN: Is there a legal prohibition

12 against it?

13 MR. LEWIS: Yes.

14 MODERATOR BERRINGER: I see Karim has a

15 follow-up.

16 MR. DePRIEST: Tom DePriest, General

17 Counsel. Congress directed us to establish national

18 standards.

19 MODERATOR BERRINGER: Karim, did you have

20 a follow-up?

21 MR. AMRANE: Just to -- I mean, that's a

22 federal standard. It's one standard for the entire

23 country, and that's true for other parts as well.

24 MR. LEWIS: Right. Ron Lewis again. The

25 significance you're talking about where the

EE-2006-STD-0126 COMMENT 03.4
154

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 differential -- there may be ways we can consider it

2 or review it. We just can't have different outcomes

3 for different places. So inputs as far as elements

4 and things that we need to take note of will be

5 appreciated, but the actual outcomes we can't do. We

6 can do sensitivity analysis. We can do various

7 different things.

8 But we set a national standard, and

9 especially as we're regulating the manufacture of

10 products that may be distributed anywhere and a

11 national chain may buy equipment that they further

12 distribute to construction sites, it would be very,

13 very tough to monitor and enforce as well. So the

14 statutes require us to have a single statute or a

15 single regulation.

16 MR. ECKMAN: Tom Eckman again.

17 Acknowledging that or accepting that as it is, then it

18 seems to me as we collect the sales weighted

19 information about where these go we need to associate

20 those with the climate effects, so that we have the

21 data that certain refrigeration systems are sold in

22 certain climates. 

23 And, you know, to the extent that there's

24 an economic impact associated with that, the weighting

25 needs to be representative, weighted by the climate

EE-2006-STD-0126 COMMENT 03.4
155

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 effects that actually are where the products are sold.

2 So the -- you know, if indeed this is significant, I

3 don't -- I'm not convinced yet that it is, but it

4 might be enough. And if it is, because there are

5 places where there are no cooling loads, or very

6 little, and so this doesn't turn out to be much. And

7 there are places where there are large cooling loads

8 and you've got to make it up. 

9 So I think it complicates the analysis,

10 but I think it's the right way to do it. I just think

11 it complicates the analysis.

12 MODERATOR BERRINGER: I see Andrew, and

13 then I see Chris, and then I see Marshall.

14 MR. DELASKI: Andrew Delaski, Appliance

15 Standards Awareness Project. Two comments. One, to

16 follow up on Tom's, there's been a lot of discussion

17 about the departments that can do a schedule on this

18 on its rulemaking. And I think you put it well when

19 you said let's keep the analysis as simple as possible

20 without becoming -- but still accurate. 

21 And that's what we're after here --

22 something that accurately represents what's happening,

23 but yet doesn't add a level of complexity that bogs

24 down the -- bogs down your work. So we want to

25 represent what's happening, but let's not -- let's

EE-2006-STD-0126 COMMENT 03.4
156

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 not lose the forest -- lose the trees from the forest.

2 In response to this question of: can the

3 Department set two standards? Clearly, you've come to

4 a conclusion as to what you can do, and that has

5 happened in the course of another proceeding.

6 Attorneys that we've consulted with have a different

7 conclusion as to what your authority is, and I don't

8 want to -- we don't need to debate this right here.

9 But just for the record that we don't agree with your

10 conclusion that you can't set two standards.

11 MODERATOR BERRINGER: Okay. I saw Chris

12 and then Marshall.

13 MR. BALESTRINI: Chris Balestrini, FPA.

14 There is other things that can come into this

15 variation, too, though. You know, climatology is part

16 of it, but the other thing is consumer traffic, you

17 know, things like that. 

18 There are so many things that go into it

19 that I think for the purpose of rulemaking you should

20 probably not even consider some of this stuff for the

21 simple fact that providing the information on how your

22 equipment works to the consumer, which is the grocery

23 stores or whatever, let them judge for themselves how

24 and where they want to -- they want to use the

25 equipment that you've made.

EE-2006-STD-0126 COMMENT 03.4
157

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 I mean, and if you really want to get into

2 the nuts and bolts of it, call for feedback from those

3 people, because they have engineers on their staffs.

4 They're calculating energy usage. You know, I can't

5 expect them -- I -- if I'm sitting where the

6 Department of Energy is, I can't expect a manufacturer

7 to be able to know the energy consumption of a

8 Wal-Mart store around the corner, you know.

9 And you've got a good partnership here

10 between -- you know, between the Department of Energy

11 and the manufacturers. But to close the loop you

12 really need to get involvement from the end user as

13 well. And that's the one piece I see that's glaringly

14 missing here today is any kind of input, especially

15 when it comes to the life-cycle costs. They're the

16 ones that are going to give you the best information,

17 I would believe, you know.

18 And maybe one of the things coming out of

19 this meeting is to have some kind of game plan to get

20 some involvement from those folks, too.

21 MODERATOR BERRINGER: Okay. Thank you.

22 Marshall?

23 MR. HUNT: Marshall Hunt, PG&E. Just as

24 a devil's advocate, if we really cannot have climate25 adjusted standards, then why go through this exercise?

EE-2006-STD-0126 COMMENT 03.4
158

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 Let's just get the most efficient equipment we can and

2 go from there, because like you said, Chris, the

3 mechanical engineer, which I am one, would -- is

4 looking at a project. If you have certain kinds of

5 cases, you're going to have a certain amount of

6 cooling capacity there -- it's open more -- than if

7 you had closed cases, and you've got to design the

8 store that way.

9 So, yes, I would prefer to have this

10 analysis, but only because I think there is climate

11 distinctions that need to be drawn.

12 MR. BALESTRINI: One thing I want -- this

13 is Chris Balestrini again. One thing I wanted to

14 throw in here, too, is if you want to make the

15 climatology piece go away, put it in your test design

16 for your efficiencies and stuff like that, that you're

17 going to put these refrigeration units in a room

18 temperature such and so. 

19 Specify the range for the conditions that

20 you're looking to do your efficiency testing for the

21 outside environment outside of your coolers and

22 freezers and stuff, too, and that way you can make the

23 whole climatology -- climatological piece just go

24 away, because you've set up that control in your

25 testing protocol to basically say, you know, most

EE-2006-STD-0126 COMMENT 03.4
159

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 grocery stores across the country operate in a 65- to

2 70-degree window or whatever. So you make sure all

3 your testing for efficiency is done there.

4 MODERATOR BERRINGER: Okay. I saw Steve,

5 and then Don.

6 MR. NADEL: This is Steve Nadel. In terms

7 of this question about how to analyze things, I think

8 I agree with you that for large systems you do need to

9 look at the directions with the building, the heating

10 and cooling load. 

11 However, I wonder for small, self12 contained equipment whether it's just going to be the

13 tail wagging the dog, and the information will be so

14 dominated by the building effects that you won't

15 correctly get at the individual equipment effects.

16 And I wonder for the smaller self17 contained equipment, you know, an eight cubic foot ice

18 cream freezer, whether working up from more of a

19 residential refrigerator freezer model -- I know DOE

20 was doing some work a couple of years ago adapting

21 those models for self-contained commercial products,

22 you know.

23 It may not be one size fits all, as

24 opposed to larger systems, whether it's a supermarket

25 system or, you know, a whole wall system in a

EE-2006-STD-0126 COMMENT 03.4
160

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 convenience store, that you need the building

2 approach. But for self-contained small systems I'm

3 not sure the whole building analysis is most

4 appropriate, and certainly whether it's the simplest.

5 MODERATOR BERRINGER: Don?

6 MR. BRUNDAGE: Don Brundage, Southern

7 Company. Just a quick comment on Chris Balestrini's

8 comment. If you get into some of your products like

9 open cases in a cooling dominated climate, doing the

10 whole building approach means you take credit for the

11 cooling losses into the store against the air

12 conditioning.

13 So it has some significant impacts on what

14 efficiency level you'd come up with. So I think it's

15 to your advantage to include a whole building

16 approach, especially on open cases.

17 MODERATOR BERRINGER: Okay. Any

18 additional comments? Seeing none, we'll go to

19 Item 6.2. "The Department specifically requests input

20 on the variability of defining a limited set of

21 building prototypes for all equipment classes in order

22 to characterize energy use. If a limited set of

23 building prototypes is acceptable, the Department

24 seeks stakeholder input on how to properly

25 characterize the building prototypes." 

EE-2006-STD-0126 COMMENT 03.4
161

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 Any comments on that? I see Tom Eckman.

2 MR. ECKMAN: Tom Eckman again. Certainly,

3 picking a grocery and a small deli, or what have you,

4 from a physical configuration may be pretty

5 straightforward, but you've got different HVAC

6 systems. Some are packaged depending on the size of

7 the unit; some are not. 

8 I suspect you'll have to -- that even if

9 you pick the same building configuration you're going

10 to have to deal with gradations from the Wal-Mart to

11 the Kroger to the superstore/non-superstore. Those

12 probably have different space cooling/space heating

13 interactions. Again, this all makes the analysis more

14 complex. It's -- as Marshall said, if we're not going

15 to make it different by climate, it may be overkill.

16 It would be nice to look at the

17 sensitivities to see whether it would, but in the end

18 getting the rulemaking done on schedule -- I may bite

19 my tongue for saying this, but, you know, less

20 complexity might be better. On the other hand, if

21 it's significant, it probably -- as Andrew said, some

22 of us don't necessarily agree that one rule fits the

23 entire country. It would certainly provide us with

24 information to discuss that point further.

25 MODERATOR BERRINGER: Okay. Thank you.

EE-2006-STD-0126 COMMENT 03.4
162

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 any other comments?

2 Okay. We'll go on to Item 6.3, then.

3 "The Department seeks data or data sources that could

4 be used to characterize the energy use in a loading of

5 commercial refrigeration equipment." So are there any

6 data or data sources out there? Scott?

7 MR. MITCHELL: Scott Mitchell, Southern

8 California Edison. I just wanted some clarification

9 on what you meant by "loading." Is that product

10 loading or load on the grid?

11 MR. WINIARSKI: We basically aren't -- the

12 term "loading" there may have come across a generic.

13 Basically, what we're trying to do is to get

14 information primarily with regard to kilowatt hour

15 type consumption. But it may be that in some cases

16 what we're actually going to get is information with

17 regard to refrigerant load from the display case

18 itself on the compressor. So either type of

19 information would be useful.

20 MODERATOR BERRINGER: State your name for

21 the record, please.

22 MR. RIVEST: This is Mike Rivest. I think

23 we're struggling a little bit with finding out what

24 the value of the whole building modeling really might

25 be, recognizing that it could be important because of

EE-2006-STD-0126 COMMENT 03.4
163

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 the interactions of the HVAC system, but not really

2 knowing the magnitude of that.

3 Now, I happen to have looked over an EPRI

4 study on this topic where they modeled refrigeration

5 -- more efficient systems in various parts of the

6 country. And the conclusions, from what I can make,

7 was that it really didn't impact the economics -- you

8 know, recognizing that people's systems will be

9 adapted to their climate anyway, their HVAC systems,

10 and you have to make a lot of assumptions in your

11 modeling as to how well you recuperate the

12 refrigeration in one side of the store to the whole

13 store.

14 So one possible avenue is to do a little

15 bit of research on case studies and to -- where this

16 very issue has been studied and to quickly come back

17 to you maybe with findings about the magnitude of this

18 issue, to see if it's worth the effort of the

19 modeling.

20 MODERATOR BERRINGER: Bob Tanner?

21 MR. TANNER: Bob Tanner, Hill Phoenix. To

22 answer Item 6.3, most of that data is available on the

23 manufacturer's website --

24 MR. WINIARSKI: In terms of --

25 MR. TANNER: -- and talking about the BTU

EE-2006-STD-0126 COMMENT 03.4
164

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 load of a refrigerated display case.

2 MR. WINIARSKI: Oh, yes. Right.

3 MR. TANNER: Our website has all that

4 information right on it. I think everybody else's

5 does, too.

6 MR. WINIARSKI: Okay.

7 MODERATOR BERRINGER: Larry?

8 MR. HOWINGTON: Larry Howington, Hill

9 Phoenix. We also could give you some guidance in

10 terms of how we provide customers information to do

11 calculations for air conditioning credit, because a

12 lot of times, you know, they want that and they use

13 that information in sizing their air conditioning

14 systems. And we kind of -- you know, we give them

15 some guidelines that kind of help them.

16 MR. WINIARSKI: Right. If I could jump in

17 here, that is the type of alternative that we might be

18 looking for. And, again, I'd like to reiterate, there

19 is really maybe three different issues here that have

20 to be dealt with. One is I think what Don referred to

21 here. Basically, you're talking about that air

22 conditioning credit, right? 

23 You know, you're trading off air

24 conditioning in this large store with lots of

25 lighting. So there's value to that, and

EE-2006-STD-0126 COMMENT 03.4
165

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 manufacturer's may have an interest in taking that

2 into account. A second issue is variation between the

3 climate, and that may or may not be significant. And

4 that will depend somewhat on the case loading. 

5 That could be a function of climate, as

6 well as, for instance, if in certain climates they use

7 different condensers' strategies. The outside

8 condenser efficiency is a function of the outside air

9 temperature, so --

10 MODERATOR BERRINGER: I see Sriram or --

11 Mike Rivest, did you have a comment or question.

12 Okay. Then, Andrew Delaski.

13 MR. DELASKI: Andrew Delaski, Appliance

14 Standards Awareness Project. I want to pick up on

15 Mike's suggestion, Mike's concept of looking at some

16 of the field work that has been done out there, the

17 EPRI study or others. I think that's an excellent

18 suggestion.

19 I think the Department, in its plan for

20 the rulemakings over the next three years, next five

21 years, published in January described its desire to

22 reduce complexity. And I'm just concerned that as

23 noted here that we're adding complexity without

24 necessarily adding any benefit. It could be very

25 interesting but not yet help us answer the question

EE-2006-STD-0126 COMMENT 03.4
166

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 for this rulemaking. So let's make sure we spend our

2 resources wisely.

3 MR. RIVEST: My comment -- Mike Rivest --

4 was from the perspective of a guy born in Montreal.

5 It's not just the air conditioning credit. It's the

6 heating penalty.

7 MODERATOR BERRINGER: Thank you. So do we

8 have any more comments on Item 6.3, then? 

9 All right. Moving on to Item 6.4, "The

10 Department seeks feedback on this approach to energy

11 use and end use load characterization." I think we've

12 got quite a bit of comments sort of in the background

13 as far as the complexity that might be added to this.

14 Any additional comments? Seeing none, we'll go on to

15 the next slide.

16 MR. WINIARSKI: Okay. So now, once we've

17 basically used the markups to come up with a consumer

18 price, and we have some assessment of the energy use

19 of products at different efficiency levels when placed

20 in the field, we're going to use that information in

21 terms of generating life-cycle costs, and, in

22 addition, simple paybacks for the different efficiency

23 levels that we're going to be examining.

24 Again, the purpose here is to assess the

25 net life-cycle cost impacts of these different

EE-2006-STD-0126 COMMENT 03.4
167

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 efficiency standards on the consumer. Life-cycle

2 costing can be done at different levels. In

3 particular, the Department's approach is to look at

4 this based on the consumer or the customer for the

5 equipment.

6 As a quick background, the life-cycle

7 cost, LCC here, is described as the consumer's price

8 for purchasing a product plus the sum of -- and

9 installing the product, plus the sum of all his annual

10 costs associated with maintaining and operating that

11 equipment over its life brought back to a present

12 value cost. And this is shown in the lower graphic.

13 Again, the economic evaluation that the

14 Department proposes will be from the perspective of

15 the consumer. The analysis will, as has been done for

16 previous rulemakings, be implemented in an Excel

17 spreadsheet. So the analysis will then be available

18 and posted on DOE's website for the review of various

19 stakeholders. That provides this level of

20 transparency that the Department seeks in its

21 rulemakings.

22 MR. BRUNDAGE: Don Brundage, Southern

23 Company. How do you -- what do you foresee using as

24 a source for electricity costs for this rulemaking?

25 MR. WINIARSKI: Can I hold that to a

EE-2006-STD-0126 COMMENT 03.4
168

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 follow-up slide?

2 MR. BRUNDAGE: Sure.

3 MR. WINIARSKI: Okay. Again, for this

4 analysis, the results will be expressed from the

5 spreadsheet in terms of the life-cycle cost difference

6 between a baseline subsequent standard level that is

7 analyzed. In addition, we will report simple payback

8 in the analysis.

9 The next slide is a quick overview of how

10 that is actually done using the information and data

11 sources that will be collected in the rulemaking so

12 far. First, up in the upper left-hand corner in

13 yellow -- and if you're looking at black and white I

14 think that's a light shaded color, we take -- the

15 engineering analysis generates a baseline manufacturer

16 price and a standard-level manufacturer price for

17 different efficiencies for any given class of product.

18 To that we apply the markups that are

19 calculated in the markup for equipment price

20 determination analysis, and use those to generate an

21 eventual price to the consumer. And the markups,

22 again, would include distributor markups, mechanical

23 contractor markups. We also tend to include sales tax

24 in there.

25 To address something that was brought up

EE-2006-STD-0126 COMMENT 03.4
169

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 earlier, I think the Department has often not

2 separately tried to include a freight to different

3 portions of the country. And I think that may have

4 been brought up in a previous rulemaking event that

5 was here.

6 Since we're looking at differences between

7 a different standard level, the importance of that

8 only occurs if the freight is expected to increase the

9 eventual price to the user. For instance, if the

10 product got heavier, as you pointed out earlier.

11 We take the markups and the engineering

12 price and we -- and the engineering price,

13 manufacturer price levels, and generate a consumer

14 price. We then develop data to characterize the

15 installation cost for the product, and those are used

16 to develop a total installed cost shown in green here

17 as an intermediate analysis step.

18 On the bottom part of the graph you'll see

19 that we use the energy consumption information that's

20 calculated from the energy analysis, and, if

21 necessary, we would include power demand impacts, if

22 that's important. We adjoin those with electricity

23 prices to come up with an annual energy expense. The

24 annual energy expense is then added to data for repair

25 costs and maintenance costs for the equipment, and

EE-2006-STD-0126 COMMENT 03.4
170

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 those are used to generate an annual operating

2 expense, again, for each class of equipment.

3 The annual operating expense is then

4 applied over the life of the equipment, and then the

5 total expenses are -- over the life of the equipment

6 are then discounted backwards to a present value --

7 present value being the -- when the equipment was

8 initially purchased. To do that, we have to use a

9 discount rate for the consumer. We also have to use

10 a price trend for the fuels -- electricity, and, if

11 necessary, gas. That was important to take into

12 consideration.

13 Once we've got those, we have a lifetime

14 operating expense. The lifetime operating expense can

15 be added to the total installed cost to give a life16 cycle cost. In addition, we can take the annual

17 operating expense directly and the total installed

18 cost directly for the different standard levels and

19 use the differentials between those to generate simple

20 paybacks for improvements in efficiency. And so both

21 of those are done and reported in the life-cycle cost

22 analysis.

23 MODERATOR BERRINGER: Don?

24 MR. BRUNDAGE: Yes. My question again --

25 I guess my question is, and you may not have reached

EE-2006-STD-0126 COMMENT 03.4
171

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 the point of considering this, so I'll make it a

2 comment. If you were -- it would be very tempting in

3 that analysis to use the commercial price as the price

4 for this equipment. But compared to the average of

5 the commercial class, this equipment is going to be

6 used in locations with higher load factor and probably

7 larger size than your average commercial.

8 Therefore, the price of electricity is

9 probably going to be somewhat lower than the average

10 commercial price out of Annual Energy Outlook 2006.

11 So some sort of consideration of that, an adjustment

12 of price, to what -- where the customers that are

13 actually using this equipment would be useful, because

14 I think --- I think there would be a tendency in doing

15 this to overstate the price that these customers are

16 paying for electricity.

17 MODERATOR BERRINGER: Okay. Marshall.

18 MR. HUNT: Marshall Hunt, Pacific Gas &

19 Electric. Speaking for California consumers, I think

20 there will be a lot of times where you'd be

21 understating the cost. We have a heavy ratcheting

22 from KW charges. We are going to see the advanced

23 metering initiative throughout California, which will

24 convert more and more people to time of use, with

25 significant penalties for time of use.

EE-2006-STD-0126 COMMENT 03.4
172

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 Coincident demand is very, very high with

2 these units. They tend to really add up to the demand

3 of a store. So I see it entirely differently, and I

4 guess we're talking about a sensitivity analysis here.

5 But you've got to think of this as a regional economy,

6 and it seems to me the marginal cost of doing business

7 would be that if these appliances would save energy,

8 say, in Nevada and Arizona or Oregon, and allow them

9 to sell power at a nice, high cost to California, it

10 seems that's the value of the energy.

11 So you have to think of societal also.

12 But certainly, the customer comes first. What is that

13 real charge? And the rate structures are changing

14 dramatically in some parts of the country in response

15 to the natural gas issues and other peak constraints.

16 MR. BRUNDAGE: Don Brundage. I don't

17 necessarily disagree with you. My point was that you

18 need to not just use a straight commercial class

19 average. You need to look at what these types of

20 customers are actually paying.

21 MODERATOR BERRINGER: Marshall?

22 MR. HUNT: Marshall Hunt. Thank you.

23 That would be good. And do the sensitivity, because

24 there is tremendous differences for parts of the

25 country.

EE-2006-STD-0126 COMMENT 03.4
173

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MR. WINIARSKI: We talked about most of

2 the slide --

3 (Laughter.)

4 -- before I got started. A couple of

5 things that we didn't talk about is the Department's

6 original proposal, which starts to address that, is --

7 was at least to initiate discussion -- the use of

8 commercial average prices. And I think it obviously

9 did that.

10 The next portion of that is the Department

11 is interested in -- or has proposed here to look at

12 the regional variation of those as part of its

13 sensitivity analysis, although the eventual analysis

14 gets a weighted sort of national average figure for

15 that.

16 As we're talking about that, the second

17 issue here is sort of this impact in terms of the fact

18 that these are very high load factor and larger

19 buildings. And any information that can be provided

20 from stakeholders would be useful here in terms of

21 characterizing that.

22 With regard to the escalation prices, the

23 Department's intention here is to use the Energy

24 Information Administration's Annual Energy Outlook, as

25 it has done in previous rulemakings, to project energy

EE-2006-STD-0126 COMMENT 03.4
174

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 prices on into the future, over the life span of the

2 equipment in this case for the LCC.

3 MODERATOR BERRINGER: Yes. Let's go ahead

4 and -- just go ahead and hit -- I know we've had some

5 of the discussion on 8.1 already, but Item 8.1 says,

6 "The Department seeks comment on the proposed

7 approaches for estimating current and forecast energy

8 prices." Was that what you were --

9 MR. NADEL: Two comments. 

10 MODERATOR BERRINGER: Steve Nadel?

11 MR. NADEL: Steve Nadel, ACEEE. Don

12 pointed out that the supermarket-type systems may be

13 used in larger buildings, but some of the self14 contained equipment may actually be used in smaller

15 buildings. So you have to decide, is it worth trying

16 to differentiate and use higher prices for some and

17 lower prices for another, or is this more trouble than

18 it's worth? But it goes both ways, the different

19 types of pieces of equipment. That's one.

20 Two, you're going to be using the AEO

21 forecasts, and those forecasts at this point are

22 causing a lot of head-scratching. When we talked to

23 economists for commercial, the forecast says it's --

24 the average price is 8.2 cents per kilowatt hour, but

25 somehow it's going to decline to 7.4 cents by 2015,

EE-2006-STD-0126 COMMENT 03.4
175

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 despite the fact that people are -- gas has gone up,

2 coal has gone up, and people are building more

3 expensive powerplants.

4 Just like EIA had to revise its oil price

5 forecast substantially in the AEO 2006, I'm hearing

6 from people I've talked to that there's an excellent

7 chance that the -- some problems with the model and

8 these prices are going to go up significantly the next

9 few iterations. So you should plan on that. 

10 As I understand, you'll be starting with

11 these prices, but don't be surprised if they go up and

12 don't eliminate options that all of a sudden might

13 become cost effective when they start revising their

14 forecasts. Instead of assuming declines in prices, at

15 least start assuming level if not some type of

16 increase.

17 MODERATOR BERRINGER: Yes, Chris.

18 MR. BALESTRINI: Chris Balestrini, FPA.

19 Back on slide 55, I was look at the flowchart, and

20 where you have -- was it total operating expenses?

21 MR. WINIARSKI: Annual operating expenses.

22 MR. BALESTRINI: Annual operating

23 expenses, if you're going to take repair costs and

24 maintenance costs, don't you also have to take

25 depreciation costs into account there as well? I

EE-2006-STD-0126 COMMENT 03.4
176

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 don't see anything there about depreciating the

2 equipment. That will add into the true cost in the

3 life cycle.

4 And then, but that's for the overall for

5 the unit. Does it make sense to do a flowchart like

6 this just on -- just for the energy piece by itself as

7 well? Because right now you have the total for the

8 equipment with the energy worked in. Does it make

9 sense to do the equipment piece by itself and the

10 energy piece as separate? Because that would give you

11 the flexibility to look at different scenarios on the

12 energy, then.

13 MR. WINIARSKI: Basically the -- I think

14 if -- if I'm catching what you're saying here, you're

15 asking -- basically, this type of flowchart

16 illustrates that we're going to have a spreadsheet

17 that takes all of this information into account, and

18 then comes up with a life-cycle cost analysis. And

19 are you thinking about basically showing and maybe

20 implementing the same process for the energy?

21 MR. BALESTRINI: Yes.

22 MR. WINIARSKI: Okay.

23 MR. BALESTRINI: Yes, because the thing

24 is, you're going to look at this total cost to the end

25 user, correct? That's the whole point for this, to

EE-2006-STD-0126 COMMENT 03.4
177

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 show that whatever your regulations are that you end

2 up coming up with, what the cost is going to be to the

3 end user basically is what you're trying to

4 demonstrate. It will be nice to show them what the

5 end is overall, and what the end is energy-wise, where

6 you can show, you know, the energy savings

7 potentially.

8 Even though you may have to pay a little

9 bit more on the front side, here is what you're going

10 to save on the energy down the road. And then, the

11 life cycle is going to be a variable. And it may be

12 four years, it may be 10 years. So the longer you run

13 it out, the more savings you're going to generate on

14 the energy side. And you might need to demonstrate

15 that to get the buy-in from everybody.

16 MODERATOR BERRINGER: Any other comments?

17 Okay. Next slide?

18 MR. WINIARSKI: Okay. Discount rates.

19 Obviously -- and this gets a little bit -- ties in

20 with maybe the discussion of depreciation here. I'm

21 not prepared to go into that right now, but

22 essentially the Department's approach involves the use

23 of calculated discount rates basically for the end

24 user, how he discounts the time value of money in

25 order to make his choices in the -- between equipment

EE-2006-STD-0126 COMMENT 03.4
178

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 or between spending his money on new equipment or

2 something else.

3 The Department's approach to the use of

4 discount rates in order to discount those streams of

5 operating expenses is to develop what's called the

6 weighted average cost of capital for stores and

7 companies that are expected to be the prime users of

8 commercial refrigeration equipment.

9 In the third bullet there, basically the

10 point that we're trying to say here is that we want --

11 we believe we can go out and get information again

12 from those consumers that you spoke with -- or spoke

13 about with regards to sort of how they value the time

14 value of money in their businesses, and use that to

15 implement our life-cycle cost analysis.

16 With that, Bryan, I think that you can go

17 into the two items there.

18 MODERATOR BERRINGER: All right. Two

19 items. Item 8.2, "The Department seeks comment on the

20 proposed approaches for estimating discount rates for

21 consumers using the equipment covered under this

22 rulemaking." Any comments on discount rates being

23 used? 

24 All right. Seeing none, I'm going to move

25 on to 8.3. "Given the relatively narrow commercial

EE-2006-STD-0126 COMMENT 03.4
179

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 application for most of the equipment covered under

2 this rulemaking, which, if any, commercial sectors

3 beyond grocery stores should be considered in the

4 evaluation of discount rates? In addition, do

5 stakeholders feel the government purchases of this

6 equipment are large enough to require that they be

7 included in the evaluation of the discount rates?"

8 Not seeing a whole lot of -- Chris?

9 MR. BALESTRINI: Chris Balestrini, FPA.

10 I can tell you from what our members' feedback has

11 been, one of the fastest-growing sectors of food

12 distribution is the convenience store. Okay? So I

13 would think you might want to be looking at the

14 C-stores as well as the traditional grocery stores.

15 MODERATOR BERRINGER: Okay. Okay. Thank

16 you. Any additional comments?

17 Okay. Next slide?

18 MR. WINIARSKI: If I can, I'd like to add

19 a thought with regard to that one, which is another

20 fast-growing segment I believe are these -- what they

21 call a supercenter, like a Wal-Mart, that does lots of

22 other things in addition. And any information that

23 you can give us on whether that would be an important

24 group to take into account in developing discount

25 rates would be useful.

EE-2006-STD-0126 COMMENT 03.4
180

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MR. BALESTRINI: Actually, the superstore

2 type concept is a morphing of the traditional grocery

3 store. So we kind of consider those together.

4 MR. WINIARSKI: You consider them

5 together.

6 MR. BALESTRINI: In our association, we

7 consider them to be pretty much the same pot.

8 MR. WINIARSKI: Okay.

9 MR. BALESTRINI: The C-stores are another

10 offshoot, because they're not traditional -- they're

11 not a traditional grocery store type of setup.

12 MR. WINIARSKI: Okay. Karim?

13 MR. AMRANE: Karim Amrane, ARI. I guess

14 the feedback from us is that you should consider that

15 source as well.

16 MR. WINIARSKI: Okay. In order to

17 complete the life-cycle cost analysis there is another

18 couple of pieces of information that the Department

19 needs. The first is -- I show the four issues here.

20 First is the installation cost of the equipment.

21 Primarily here, again because we're doing differential

22 life-cycle cost, it's most important to get this

23 accurate if, indeed, we expect the installation cost

24 to change as a function of the efficiency of the

25 equipment.

EE-2006-STD-0126 COMMENT 03.4
181

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 An example here, not to go into this in

2 detail, might be that if the market or if the analysis

3 suggested that we were going to look at hot gas

4 defrost, and putting equipment in stores that don't

5 currently have hot gas defrost, that could be a

6 significant installation cost issue. So any

7 information that's available would be useful.

8 The Department seeks data on equipment

9 lifetime in the field, and sources of information that

10 might refer to that. Also, on repair costs and on

11 maintenance costs for the equipment in the field.

12 MODERATOR BERRINGER: So Item 8.4, "The

13 Department seeks feedback on whether it is correct to

14 assume that the changes in maintenance, repair, and

15 installation costs will be negligible for equipment

16 with lower energy consumption." Is that -- does that

17 make sense? Does that assumption -- Steve Nadel.

18 MR. NADEL: Steve Nadel. I guess it will

19 depend on the measures being employed. If you're

20 talking, you know, heat exchange area, yes, that's a

21 reasonable assumption. Sometimes, you know, a more

22 efficient motor may have a longer life. Sometimes the

23 controls may have a -- you know, a shorter life,

24 require more maintenance. You need to probably at

25 least look at what is being assumed here before making

EE-2006-STD-0126 COMMENT 03.4
182

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 a blanket assumption.

2 MODERATOR BERRINGER: Any other comments?

3 Karim?

4 MR. AMRANE: Karim Amrane, ARI. I guess

5 it's more like a question for Dave. Are you also

6 looking into finding out the installation costs with

7 respect to different product classes? Or are you

8 going to assume that's going to be flat or --

9 MR. WINIARSKI: We will probably -- in

10 terms of different product classes, we will probably

11 try to develop typical installation costs. Again,

12 going back to the "as simple as needed," in terms of

13 calculating a differential life-cycle cost, this

14 really doesn't come into play. It doesn't impact the

15 economics unless there is a significant differential.

16 MODERATOR BERRINGER: Additional comments?

17 Okay. Go on to Item 8.5. "If it is not

18 appropriate to assume that the changes in maintenance,

19 repair, or installation costs would be negligible for

20 the equipment with lower energy consumption, the

21 Department seeks comment on appropriate methodologies

22 for assessing changes to each of those costs." So a

23 similar sort of question. Steve Nadel?

24 MR. NADEL: I guess as you're doing the

25 design option analysis, you can consider this and see,

EE-2006-STD-0126 COMMENT 03.4
183

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 are there particular measures that will have a

2 significant impact? If the impact is not significant,

3 it's not worth including. But I would tend to add it

4 to the design option analysis as a way to incorporate

5 this relatively straightforwardly.

6 MODERATOR BERRINGER: All right. Then,

7 we'll go on to question -- Item 8.6. "The Department

8 seeks comment on the appropriate equipment lifetimes

9 for the equipment covered under this rulemaking."

10 Again, the lifetime, are the assumptions correct?

11 Karim?

12 MR. AMRANE: Karim Amrane, ARI. I think

13 this sort of -- in this particular case, it's

14 important to get other stakeholders involved, you

15 know, FMI, I don't know. I mean, they have

16 information about how often those types of products

17 are being, you know, changed over and things like

18 that. 

19 So, yes, you're going to get some feedback

20 from us as to what the lifetime is, but the reality is

21 really more with those products and how often, you

22 know, stores are being renovated and things like that.

23 MODERATOR BERRINGER: Additional comments

24 on lifetime? Steve.

25 MR. NADEL: Can I give a couple of things?

EE-2006-STD-0126 COMMENT 03.4
184

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 One, I believe ASHRAE, in their handbook series, has

2 some estimates of lifetime for different pieces of

3 equipment. The Department has used that for some of

4 the other rulemakings, so if you haven't already you

5 should look at that.

6 Two, I know there is a number of measure

7 life studies done in the northwest. Tom Eckman may be

8 able to comment. But they may have some information,

9 some stuff done in past years, for the Bonneville

10 Power Administration.

11 Third, I noticed in the framework document

12 where you refer to Appliance Magazine. I'm not sure

13 if they cover any of these products, but in general we

14 found their measure life estimates to be quite low,

15 lower than any of the other sources, so I would be

16 very careful about using them.

17 MODERATOR BERRINGER: Additional comments

18 on lifetime? Seeing none, next slide?

19 MR. WINIARSKI: Once -- let's see. I

20 guess we continue here. Once we've look at life-cycle

21 costs, the next step is to try to assess the shipments

22 of the different classes of air conditioning or --

23 different classes of refrigerating equipment as they

24 go into the field, that we do that in the shipment

25 analysis, and the combination of both of those will

EE-2006-STD-0126 COMMENT 03.4
185

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 lead for a national impacts analysis.

2 So, again, the purpose of the shipments

3 analysis is to try to project the rate of new

4 equipment shipments under a proposed standard. In

5 that process, one of the things we do is we track the

6 stock of equipment that's out there in the field by

7 vintage over the timeframe characterized by the

8 standard.

9 The methodology is basically that

10 equipment is sold, purchased, shipped to a building,

11 it's installed, it operates for a number of years, and

12 then in some cases it will be retired and replaced.

13 In other cases, the building may actually be torn down

14 or moved to a different type of operation, and it's

15 simply removed from service. And so the shipments

16 analysis tries to take that into account.

17 Data sources that are used include things

18 like product lifetimes, estimates of the commercial

19 floor space that's out there currently, and saturation

20 rates -- how many pieces of equipment do we expect to

21 be in existing square feet of a given building type,

22 like a grocery store.

23 We then develop a model that tries to take

24 into account all of this information, and then

25 calibrate that model backwards, looking at historical

EE-2006-STD-0126 COMMENT 03.4
186

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 shipments and historical market saturation data.

2 MODERATOR BERRINGER: Okay. That leads us

3 to Item 9.1. "The Department seeks information on

4 representative saturation rates for each product class

5 covered under this rulemaking, as well as industry

6 trend data regarding relative growth in each product

7 class." Is there information out there? Is that

8 something that ARI will --

9 MR. AMRANE: Karim Amrane, ARI. As we

10 mentioned before, we will be providing you with some

11 shipment data that we've collected. As far as trends,

12 we don't project trends, so we'll leave that to you

13 guys. But we'll give you -- we'll give you what we

14 have as far as historical data to date.

15 MODERATOR BERRINGER: Okay. Thank you,

16 Karim. Any other comments on that issue?

17 Okay. Item 9.2. "As part of its

18 preliminary manufacturing impact analysis, the

19 Department will seek input from manufacture of the

20 potential impact of new energy conservation standards

21 on product shipments. Other stakeholders are also

22 welcome to provide input. The Department also seeks

23 -- also requests input on any market pull programs

24 that currently exist to promote adoption of more

25 efficient products."

EE-2006-STD-0126 COMMENT 03.4
187

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 The second part -- are there any other

2 areas, market pull, other programs, that are sort of

3 out there for these particular products? Steve Nadel.

4 MR. NADEL: The only thing -- you have an

5 Energy Star program for the ice cream freezers. You

6 have California Energy Commission, the standards for

7 the ice cream freezers. You have the Energy Star

8 grocery store program, recognizing the most efficient

9 equipment. 

10 And then, some utilities also do

11 incentives for supermarket refrigeration, but not that

12 many at this point. Those are a few of the things.

13 It's an area where there's not as much activity as

14 many of the other products the Department is

15 investigating.

16 MODERATOR BERRINGER: Let me go as far as

17 the manufacturers are concerned here. We -- sort of

18 the first part of that on the preliminary

19 manufacturing, the Department seeks input from

20 manufacturers on potential impacts of the new energy

21 conservation standards on shipments. Is there any

22 preliminary comments you have at this point? The

23 impact of standards? I know this is a new area

24 that's, you know, under EPACT 2005.

25 Okay. All right. We'll move on to the

EE-2006-STD-0126 COMMENT 03.4
188

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 next slide.

2 MR. WINIARSKI: And as I said, once we've

3 done the life-cycle cost and we have shipments, we

4 actually try to expend that into doing national

5 impacts of the adoption of higher efficiency standards

6 for this product.

7 The methodology that the Department has

8 adopted and used in previous rulemakings involves

9 using a spreadsheet-based tool that implements this

10 analysis in, and provides for stakeholders to review

11 it -- the ANOPR.

12 And the analysis in particular is looking

13 at two different things. It's going to try to develop

14 estimates of national energy savings for the adoption

15 of higher efficiency standards. It also looks at

16 what's called the national net present value.

17 Basically, what's the impact of the economics of

18 having to adopt higher efficiency standard levels on

19 the consumers over the nation, as well as some other

20 corollary impacts?

21 The process by which the Department does

22 this is they develop essentially from the life-cycle

23 cost analysis as a starting point the energy impacts

24 and economic impacts. It then over -- does this over

25 a defined analysis period. That period has not yet

EE-2006-STD-0126 COMMENT 03.4
189

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 been defined by the Department, but typically in the

2 past it has tried to look at these impacts over about

3 a 30-year time period.

4 We estimate the cost and energy use in the

5 analysis for a given unit of a given product class in

6 each year over that time period at a given efficiency

7 level, starting with the baseline efficiency level and

8 subsequent higher standard levels.

9 We then aggregate all of those costs and

10 all of that energy backwards by vintage for all the

11 years in the analysis period, and we report those

12 estimates back to the stakeholders. Those estimates

13 in terms of energy, will be done looking at what's

14 called source energy. Source energy basically takes

15 into account all of the energy losses in its

16 transformation down from its original fossil fuel

17 source or other source down to the eventual

18 distribution to the customer.

19 The economic impact will be reported in

20 dollars, and typically it will be in constant year

21 dollars, like Dollars 2003, for example. 

22 The reports estimate the -- or the

23 reports, pardon me, account for the time value of

24 money, just like the LCC did, using a discount rate.

25 However, one difference is the Department is, I

EE-2006-STD-0126 COMMENT 03.4
190

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 believe, mandated to use specific discount rates by

2 the Office of Management and Budget for this

3 particular set of studies. So it will use those.

4 They may be slightly different from what is actually

5 used in their life-cycle cost analysis.

6 MODERATOR BERRINGER: Okay. Which leads

7 us to Item 10.1. "The Department seeks comments on

8 its plan to develop national energy savings

9 spreadsheet models for estimating national impacts of

10 amended energy conservation standards." So, again,

11 we're looking at using spreadsheet models. Are there

12 any other tools out there that we should consider or

13 look at? I see Marshall.

14 MR. HUNT: Marshall Hunt, PG&E. How are

15 you handling the time value of energy in your

16 calculations?

17 MR. WINIARSKI: I'm not sure I understand

18 the question. The energy -- the EIA escalation rates

19 are used to establish the energy prices for each year

20 in the study. In calculating the national economic --

21 or the NPV analysis, that's taken into account. Those

22 costs are then incorporated as dollar values and taken

23 back to a present value. So it's discounted that way.

24 In terms of the national energy savings

25 analysis, we're just adding up BTU for BTU, or quads

EE-2006-STD-0126 COMMENT 03.4
191

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 in this case, of energy.

2 MR. HUNT: But the demand -- Marshall Hunt

3 again. The demand at 3:00 in the afternoon on a hot

4 day is a lot harder to meet, a lot more expensive.

5 You're using peaking equipment, and it's much more

6 valuable, and this is an example of a use that you

7 cannot curtail without damage -- huge damages to the

8 industry. It seems to me that this time value of the

9 electricity should be thought of.

10 MODERATOR BERRINGER: Karim.

11 MR. AMRANE: Karim Amrane, ARI. I guess

12 I fail to understand how this concept can be applied

13 to the national level. I mean, yes, California is

14 doing it, and maybe that's the way that you guys are

15 used to. But on a national level, I don't see how

16 this concept can be applied.

17 MODERATOR BERRINGER: I see Don Brundage.

18 MR. BRUNDAGE: Don Brundage, Southern

19 Company. I'm not quite sure what the difference

20 between this and using actual costs for -- actual

21 electricity costs for customers as opposed to averages

22 would be. 

23 MODERATOR BERRINGER: Marshall, do you --

24 MR. HUNT: Marshall Hunt, PG&E. The time25 dependent valuation that we use looks at both the

EE-2006-STD-0126 COMMENT 03.4
192

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 absolute source energy but also the economic value of

2 that energy. And it could be -- the multiple could be

3 way up there, just not a simple three times. 

4 So we'll get back to you on that, but it

5 just is something that is coming up hard and fast.

6 Usually most public utilities commissions would

7 regulate IOUs of others -- will not expose the

8 customer to the true societal cost of that peak power.

9 We're all protected from that, thank goodness, because

10 if you were to look at the extreme excursions from

11 cost, the value the last KW brought into the

12 marketplace, it would be astounding. And yet this is

13 a national impact, and we're looking at powerplants

14 worth of constructions here and demand. 

15 So it seems to me we've got to figure out

16 some way to at least consider this, because it's not

17 adequately reflected in rates. But it is a load on

18 society. And I think the life-cycle cost is getting

19 -- there is a societal impact here. Correct? Is this

20 where we consider societal impacts?

21 MR. WINIARSKI: This is part. Basically,

22 the Department I think historically has set it about

23 as these two separate analyses. But this is where

24 those sort of national impacts are taken into account.

25 MODERATOR BERRINGER: Don?

EE-2006-STD-0126 COMMENT 03.4
193

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MR. BRUNDAGE: Don Brundage again. I

2 think what you're getting into is sort of the

3 regulated versus deregulated market on whether

4 everyone is paying margin, or whether you're dealing

5 with average costs. In my area, not all customers are

6 exposed to the marginal costs, because we have cost7 based rates. 

8 And for a national study, if that's the

9 actual cost that customers in California are paying,

10 it certainly needs to get included within the totals

11 and in the sensitivity analysis. But not all

12 customers are paying the marginal cost.

13 MODERATOR BERRINGER: Any additional

14 comments? Steve Nadel.

15 MR. NADEL: The one other thing that

16 affects this is the load shape of commercial

17 refrigeration equipment. For something like air

18 conditioning, where there is a significant load, it's

19 very important to look at time of use, because that

20 has a major impact.

21 For this equipment, I'm less clear. I can

22 think of some things that increase peak use, some

23 factors that decrease it. If I recall correctly, PG&E

24 may actually have some load shape data on this type of

25 equipment, or at least on grocery stores. It would be

EE-2006-STD-0126 COMMENT 03.4
194

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 interesting to look at that, see whether it differs

2 significantly from the average load shape, and,

3 therefore, time of use will be an important factor in

4 this.

5 MR. HUNT: Thank you, Steve. That's a

6 good idea. Marshall Hunt.

7 MODERATOR BERRINGER: Okay. Thank you.

8 Any other comments? 

9 Dave, go ahead and proceed with the next

10 section.

11 MR. WINIARSKI: Okay. So once the impacts

12 analyses are done, that basically takes us up through

13 the ANOPR phase of the analyses. And at that point,

14 the Department of Energy has a -- or typically has a

15 public meeting. They provide the information on the

16 analyses that's been presented so far, and they look

17 to get stakeholder feedback to -- on those analyses

18 and what improvements might be necessary.

19 And then, the next phase of the rulemaking

20 we refer to as the NOPR analysis phase. The first

21 phase of the NOPR analyses is to take into account

22 whatever comments were received on the ANOPR. And, if

23 necessary, we will then revise the ANOPR analyses to

24 take into account those comments.

25 Once any revisions have been made to the

EE-2006-STD-0126 COMMENT 03.4
195

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 ANOPR analyses, the next step is to begin the path for

2 the analyses that will be new to stakeholders when the

3 NOPR -- Notice of Public Rulemaking -- is actually

4 presented. The first of those -- although these are

5 not necessarily sequential, they are shown here --

6 many of them can actually be done in parallel. But

7 the first of them that we show here is the life-cycle

8 cost subgroup analysis.

9 And, basically, the life-cycle cost

10 subgroup analysis is supposed to essentially try to

11 analyze the economic impacts on specific subgroups of

12 consumers. We try to identify groups that might be

13 disproportionately impacted compared to the general

14 user population. And that's -- the information that

15 comes out of this then can be used in order to set

16 policy or to describe policy issues with the

17 implementation of higher standards.

18 The methodology that the Department would

19 like to do is to basically extend the life-cycle cost

20 analysis that was presented earlier to examine

21 particular -- and to develop inputs to that analysis

22 that would be reflective of certain elements of the

23 overall user population. And maybe that's a good

24 reason for expressing it in terms of that flowchart,

25 because you can see how those inputs might change.

EE-2006-STD-0126 COMMENT 03.4
196

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MODERATOR BERRINGER: All right. Just a

2 question. Item Number 11.1, "The Department seeks

3 input on what consumer subgroups the Department should

4 consider in the present rulemaking. Examples of

5 possible subgroups the Department could consider

6 appropriate for commercial refrigeration equipment

7 include independent grocery stores and small

8 convenience stores." That was mentioned earlier, as

9 far as adding that.

10 So any other additional subgroups that we

11 need to consider? Seeing none, just at this time I

12 would like to -- we're about on time. We're scheduled

13 to have a break. Do people want to have a break,

14 press on, what are people -- we have two more sections

15 to go. Everybody need a short break? Do you want to

16 press on? Raise your hand, okay, if you want a break.

17 Press on? Press on. All right. Let's go ahead and

18 press on, then.

19 I think we have -- Aris is up at this

20 point. 

21 MR. WINIARSKI: I'll turn this over to

22 Aris.

23 MODERATOR BERRINGER: Great. And, again,

24 while they're making the switch, people do -- I see

25 Marshall had to leave. If you do, if you can fill out

EE-2006-STD-0126 COMMENT 03.4
197

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 your evaluation if you have to leave before the

2 adjournment of the meeting, please do that and turn it

3 in at the back table. Thank you.

4 Okay. Aris.

5 MR. MARANTAN: Okay. The next analysis in

6 the NOPR phase is the manufacturer impact analysis.

7 The purpose of the MIA, the manufacturer impact

8 analysis, is first to assess the impacts of standards

9 on manufacturers; second, to identify and estimate

10 impacts on subgroups of manufacturers that may be more

11 severely impacted than the rest of the industry as a

12 whole; and also to examine impact of cumulative

13 regulatory burden on the industry.

14 And in order to conduct the MIA we really

15 have two tools available to us. First of all, we have

16 the GRIM, which is the Government Regulatory Impact

17 Model. And we also have the interview process. First

18 of all, the GRIM is a discounted cashflow model that

19 calculates the industry net present value before a

20 standard and at several other efficiency levels beyond

21 the baseline of the standard.

22 The second is the interview process, and

23 this is where the Department refines inputs to the

24 GRIM, developed the subgroup analysis, and also

25 addressed qualitative issues. The output of the MIA

EE-2006-STD-0126 COMMENT 03.4
198

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 is the industry net present value impacts, the

2 subgroup net present value impacts, and other impacts

3 which I'll describe next.

4 Okay. This describes some of the

5 legislative requirements that DOE faces. The

6 manufacturer impact analysis fulfills a legislative

7 requirement to determine if a proposed standard is

8 economically justified. In the statute, the Energy

9 Policy and Conservation Act provides factors that DOE

10 must evaluate. Two of those factors are addressed in

11 the MIA.

12 The first one is economic impacts of

13 standards on manufacturers, and the second one is

14 impacts of any lessening of competition in the

15 industry. For the second one, the impacts of any

16 lessening of competition, the Department produces a

17 technical support document that's reviewed by the

18 Department of Justice, so we go to those lengths in

19 addressing that impact.

20 In addition, in 1995, the Department

21 announced a formal effort to further improve the

22 process, and this includes principles for the

23 analysis, which pretty much gave the Department -- it

24 resulted in the development of the GRIM. 

25 And, finally, the Department also

EE-2006-STD-0126 COMMENT 03.4
199

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 announced recently this year in a report to Congress

2 that they will also assess manufacturer impacts in the

3 ANOPR phase. They'll be conducting a preliminary

4 manufacturer impact analysis. This is done to

5 understand and quantify and explain the nature of

6 impacts that the industry will face.

7 Okay. This slide describes in a little

8 more detail the three phases that are conducted for

9 the MIA. The first phase is conducted before the

10 ANOPR is published, and that includes an industry

11 profile. For the industry profile, the Department

12 will gather information from publicly available

13 sources. 

14 This includes financial statements,

15 filings to the SEC described earlier. This is all to

16 get a baseline of what the industry cost structures

17 are. In this phase, we also conduct the preliminary

18 MIA interviews. 

19 After the NOPR is -- the ANOPR is

20 published, we get into phase 2 of the process. That

21 includes development of the strawman GRIM. This is

22 done using all of the collected data and also creating

23 some scenarios within the GRIM. Here in phase 2 we

24 also developed the interview guide for the more

25 comprehensive manufacturer interviews, which is

EE-2006-STD-0126 COMMENT 03.4
200

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 conducted in phase 3.

2 For phase 3, interviews and industry-wide

3 subgroup analyses are conducted. And, again, this is

4 a more detailed interview process which involves site

5 visits for the most part. And also, we assess the

6 direct employment competition and cumulative burden

7 impacts on manufacturers.

8 The next couple of slides describe each of

9 these phases. Okay. Here, for phase 1, this consists

10 of an industry profile and a preliminary manufacturer

11 impact analysis. The industry profile consists of

12 data-gathering from public sources, developing

13 financial inputs to the GRIM, and manufacturer markups

14 for the LCC. Also, the preliminary MIA interviews are

15 conducted, and listed here are some of the topics that

16 are discussed.

17 I'll point to a couple of them. For

18 example, for conversion costs, this is critical for

19 small manufacturers. For product mix and

20 profitability, we want to determine what the

21 relationship is between premium products and the

22 differentiation of those from baseline products. 

23 We also take this opportunity to get a

24 sense of manufacturers' impacts on shipments. As an

25 example, we look at product-switching that's not

EE-2006-STD-0126 COMMENT 03.4
201

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 apparent in any price elasticity value, for example.

2 And we discuss that with manufacturers and what their

3 specific impacts are.

4 Phase 2 consists of a strawman GRIM and

5 the interview guide preparation. For the strawman

6 GRIM, we have inputs here listed. We take these

7 inputs from several other analyses. For example,

8 manufacturer prices and manufacturing cost estimates

9 are taken from the engineering analysis. The

10 shipments forecast from the shipments analysis and

11 financial information is derived from the initial

12 industry profile.

13 We also have the interview guide

14 preparation, and I've listed here some of the topics,

15 again, that we include in the interview guide. The

16 interview guide is sent out to manufacturers ahead of

17 the interview itself, so you'll have a chance to

18 review the topics that are included and possibly think

19 about some of the responses.

20 So we have an engineering analysis. We'll

21 be discussing shipments as well, cost structure,

22 conversion costs, cumulative burden, direct

23 employment, import and export issues, consolidation.

24 Again, for this part, the consolidation and

25 competitive impacts -- our analysis is sent to the

EE-2006-STD-0126 COMMENT 03.4
202

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 Department of Justice for review to examine those

2 impacts specifically, replacement parts or

3 refurbishments, and also impacts of the standard's

4 effective date.

5 However, for this rulemaking the effective

6 date is established in EPACT 05. So that's not as

7 much of a concern as other rulemakings.

8 Okay. And the last phase includes the

9 manufacturer interviews, the detailed version this

10 time, and also the assessment of the impacts or the

11 results. 

12 One thing to point out is that when we get

13 into the manufacturer interviews it may take some

14 period of time to schedule those interviews, because

15 what typically happens is a manufacturer would want to

16 have representatives from various departments of their

17 firm present to answer the various questions that we

18 will go through.

19 And so, you know, we will be sending out

20 the request for those interviews far in advance, as

21 well as the interview guide itself.

22 Okay. That leads us to the feedback

23 questions. Okay? 

24 MODERATOR BERRINGER: Item 12.1, "What

25 procedures should the Department follow when

EE-2006-STD-0126 COMMENT 03.4
203

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 scheduling interview and requesting information?" So

2 this is sort of towards the manufacturers. Karim?

3 MR. AMRANE: Karim Amrane, ARI. I guess

4 the Department has done those interviews in the past,

5 and those have been acceptable to industry. So I see

6 no reason to change the way you've done it.

7 MODERATOR BERRINGER: Okay. Bruce?

8 MR. HIERLMEIER: Bruce Hierlmeier, Zero

9 Zone. Just a longer lead time, so we can get the

10 people organized to be there when you come or set an

11 appropriate date where you have the other people in

12 the company available for you.

13 MODERATOR BERRINGER: I know that has been

14 an issue in other ones. Just scheduling and getting

15 the right people there, so, you know, a long lead time

16 will -- so start planning on it now. We'll --

17 (Laughter.)

18 Any additional comments on 12.1? Okay.

19 Seeing none, we'll go to 12.2. "The Department seeks

20 comment on the establishment of manufacturer subgroups

21 for commercial refrigeration equipment." So are there

22 any subgroups that are needed here? Manufacturer

23 subgroups. Okay. Karim?

24 MR. AMRANE: Karim Amrane, ARI. I guess

25 in the past, you know, in other rulemakings you have

EE-2006-STD-0126 COMMENT 03.4
204

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 looked at subgroups, compressor manufacturers, and so

2 on. In this case, I think the component manufacturers

3 may be -- might be a subgroup that you need to look

4 at. Motor manufacturers, others, I don't know.

5 MODERATOR BERRINGER: Okay. Thank you.

6 Any additional groups? I see Mike Rivest.

7 MR. RIVEST: Mike Rivest, Navigant

8 Consulting. In terms of the subgroups, we might be

9 interested in understanding, and part of the market

10 characterization -- we'd like to know if there are

11 some manufacturers that are much larger than others,

12 so that we might treat them separately, or there might

13 be manufacturers who only participate in some niche

14 markets that for some reason might be impacted

15 differently by standards. So just something to think

16 about.

17 MODERATOR BERRINGER: Okay. Any

18 additional comments? All right. We'll go to 12.3.

19 "What regulations or pending regulations did the

20 Department consider in the analysis of cumulative

21 burden, regulatory burden?" This in the past has been

22 sort of like the phaseout of HCFC, so we have similar

23 type of things. You know, there's EPA, other

24 regulations that may affect or be a cumulative burden

25 on the manufacturers. Karim?

EE-2006-STD-0126 COMMENT 03.4
205

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MR. AMRANE: Karim Amrane, ARI. I guess,

2 as just was mentioned before, in the CFC -- or the

3 HCFC phaseout of 2010 is, of course, one issue that

4 the Department needs to look at carefully. But also,

5 cumulative burdens on certain manufacturers in the

6 room, and particularly in the case of Carrier, for

7 example, it's not only commercial refrigeration. It's

8 also commercial unitary, it's also furnaces, it's also

9 other things.

10 So on certain manufacturers, in particular

11 Carrier in this room, I think the Department has to

12 look at that seriously.

13 MODERATOR BERRINGER: Okay. Any

14 additional comments? Andrew, did I see your hand?

15 Okay. Anybody else?

16 All right. Moving right along.

17 MR. WINIARSKI: Okay. The next stage that

18 we'll talk about here is what's called the utility

19 impact analysis. The utility impact analysis is

20 really designed to address -- again, it's an impact

21 analysis. It addresses the impact on domestic energy

22 supplies and the utilities that basically produce

23 that, in the case of electricity resulting from the

24 imposition of standards for commercial refrigeration

25 equipment.

EE-2006-STD-0126 COMMENT 03.4
206

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 It's a relatively straightforward idea.

2 In terms of implementation, the Department's proposal

3 here is to use essentially a similar tool that it has

4 used in the past called the National Energy Modeling

5 System, or NEMS. In particular, NEMS, which comes

6 from the Department of Energy's Energy Information

7 Administration, is a tool that they use to analyze the

8 national energy use and projected national energy use

9 for electricity and gas and fuel oil on into the

10 future.

11 And the NEMS modeling system was developed

12 primarily for that effort. NEMS-BT is a variant.

13 Basically, any variation away from the actual NEMS

14 modeling system, EIA wants to be very careful to

15 distinguish that from what it uses in its development

16 of the Annual Energy Outlook Report. So we refer to

17 that as NEMS-BT when we do any kind of variation on

18 it.

19 The process that we would like to use here

20 for consistency with the previous analysis is to take

21 the energy savings that are calculated from the

22 national energy savings spreadsheet that we did in the

23 ANOPR stage, and then revised if necessary directly

24 after the presentation of the ANOPR, to take that

25 information and use it to reduce the electrical demand

EE-2006-STD-0126 COMMENT 03.4
207

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 and energy demand that NEMS predicts coming from the

2 commercial sector -- in this case, the commercial

3 sector module and the overall NEMS, national energy

4 modeling system.

5 These energy savings are then translated

6 in the utility portion of that module to a reduction

7 in the electrical demand faced by the system, and that

8 has subsequent impacts in terms of the types of

9 electrical generation being brought online in

10 outyears.

11 So the question there at the bottom --

12 MODERATOR BERRINGER: Okay. So we're now

13 down here at Item 13.1. "The Department seeks input

14 from stakeholders on its proposed use of NEMS-BT to

15 conduct the utility impact analysis." As Dave said,

16 this is pretty consistent with what we've done in all

17 our rulemakings. Does anybody have objections, or do

18 you think we -- there are some other alternatives that

19 we should use? I see Don Brundage.

20 MR. BRUNDAGE: I think we're down to two

21 utility people in the room. Don Brundage. Doing it

22 the way you've done it in the past using NEMS is fine.

23 The biggest problem I see is the current Annual Energy

24 Outlook in my opinion is hopelessly optimistic on

25 energy prices, but that's not a major factor, because

EE-2006-STD-0126 COMMENT 03.4
208

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 you'll be using a different one by the time you come

2 up with any actual levels.

3 MODERATOR BERRINGER: Okay. Additional

4 comments? Seeing none, we'll move on.

5 MR. WINIARSKI: The next impact analysis

6 that I'll talk about here is what's called the

7 employment impact analysis. The goal of the

8 employment impact analysis is to sort of assess the

9 impact on national employment that may come about from

10 the imposition of efficiency standards. That impact

11 may be positive or negative in terms of the total

12 employment in the nation.

13 The analysis incorporates both direct and

14 indirect employment impacts. Direct employment

15 impacts come directly from the manufacturer impact

16 analysis that Aris spoke about. Indirect employment

17 impacts, however, are those impacts that may occur

18 downstream or as a result of the change in standards,

19 and they come from basically two different types of

20 economic variation that are going to occur with the

21 imposition of standards.

22 The first is what's called the

23 substitution effect, and in the substitution effect a

24 good way to think about this is if the price of a

25 product goes up, maybe instead of buying that product

EE-2006-STD-0126 COMMENT 03.4
209

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 I do an alternative. Right? I change how I shift my

2 expenditures that I have as a consumer to different

3 purchases.

4 The other way that indirect employment

5 impacts come about is from what's called the income

6 effect. Basically, changing standards will result in

7 both changing first costs for equipment as well as

8 changes in expenditures for electricity or other

9 energy possibly. And that results in an overall net

10 change in the income that's out there for the

11 purchasers of the equipment, as well as any downstream

12 impacts as they proceed to use their money for

13 different items. And so the income effect tries to

14 take those into account.

15 The proposal here is to use something

16 that's very consistent with what the Department has

17 done in recent rulemakings. They propose to use a

18 model referred to here as ImSET, or if you look back

19 in historical rulemakings the terminology ImBUILD was

20 used. And basically, ImSET -- impact of sector energy

21 technologies -- is a tool that was developed for BT,

22 not necessarily for this Department, but for BT as a

23 whole to try to come up with what's the overall

24 employment impact of changes in energy technologies.

25 And that tool is -- basically tries to

EE-2006-STD-0126 COMMENT 03.4
210

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 account for all of these downstream impacts on

2 employment. For instance, OEMs that are producing

3 motors would be an example of how that might come

4 about.

5 So, Bryan?

6 MODERATOR BERRINGER: Yes. Item 14.1,

7 "The Department requests feedback on this approach for

8 assessing employment impacts." Again, this is similar

9 to what has been done in the past. We have a newer

10 version software model that's being used, software

11 tool. Is that something that is acceptable, or is

12 there something else out there? 

13 Hearing no comment, I assume that it's

14 okay, so we'll move on to the next area.

15 MR. WINIARSKI: The next area to talk

16 about is the Department's environmental assessment.

17 Basically, the Department tries to go and make an

18 estimate of what will be the environmental impacts

19 from the adoption of higher efficiency standards for

20 each class of equipment that it's going to analyze.

21 In terms of the methodology that the

22 Department proposes to use here, the NEMS modeling

23 system at -- when it is run actually outputs various

24 environmental emissions from the utilities and other

25 powerplants that are going to be affected. This could

EE-2006-STD-0126 COMMENT 03.4
211

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 -- these emissions result from perhaps a reduction in

2 actual energy use, but they also result from possible

3 shifts in the number of powerplants that are installed

4 and the type of powerplants that are installed.

5 NEMS estimates that -- those -- both those

6 impacts, and then will report, for instance,

7 quantities of carbon dioxide emissions for each

8 standard level, and nitrogen oxide emissions from

9 powerplants. In addition, it attempts to make an

10 assessment of the impact on sulfur dioxide emissions.

11 But what complicates that is there is a

12 commercial trade in powerplants and between industrial

13 people -- users on sulfur dioxide emissions. And so

14 in that -- where there's this trading going on, a

15 reduction in someplace may be sold so that someone

16 else can go ahead and make an emission. So any

17 measurable impact from NEMS will probably be reported

18 in a reduction in the estimated trading price in the

19 future of sulfur dioxide.

20 In addition, if we're looking at doing

21 building modeling, we may try to make an assessment of

22 the environmental impacts from any reductions of

23 fossil fuel use that occur at the building level.

24 MODERATOR BERRINGER: Item 15.1 again.

25 "The Department requests feedback on the approach to

EE-2006-STD-0126 COMMENT 03.4
212

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 assessing the environmental factors." Again, pretty

2 consistent with what we've done in past rulemakings.

3 We're going to be using NEMS-BT, so -- I see Don

4 Brundage has a comment.

5 MR. BRUNDAGE: I would just -- Don

6 Brundage. I would just want to make sure that NEMS

7 adequately was forward-looking. There is a tremendous

8 amount of investment being done by electric utilities

9 on nitrogen oxide and SO2 reductions and -- at this

10 time. And the historic emission rates are not going

11 to be representative of future emission rates. So

12 make -- just a caution to make certain that it's

13 adequately forward-looking in your modeling on

14 projected emission rates.

15 MODERATOR BERRINGER: Just to follow up,

16 is there information out there that -- you know, that

17 the Department could access to see what these forward

18 trends look like? Data sources?

19 MR. BRUNDAGE: I'm not -- it's not really

20 my area. I just know we're spending an awful lot of

21 money on that.

22 (Laughter.)

23 Other people are, too.

24 MODERATOR BERRINGER: Okay. Any

25 additional comments? Andrew?

EE-2006-STD-0126 COMMENT 03.4
213

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 MR. DELASKI: Andrew Delaski, Appliance

2 Standards Awareness Project. I think one change in

3 the NEMS modeling since it was last used for

4 rulemaking is that I believe it now reports out

5 mercury and particulates as well, or at least one or

6 the other of those. So if mercury particulates is an

7 outcome of the model, I would urge the Department to

8 include that in their report and in their analysis.

9 MODERATOR BERRINGER: Additional comments?

10 Next section?

11 MR. WINIARSKI: The last stage in the NOPR

12 analysis is what's called the regulatory impact

13 analysis. Basically, the regulatory impact analysis

14 is a tool that's used to explore the potential for

15 non-regulatory alternatives that might provide

16 equivalent or close to equivalent energy savings.

17 As Steve Nadel spoke about, it's not clear

18 that there are a lot of these non-regulatory

19 alternatives in place right now. And the Department's

20 sort of obligation is to look at the actual impacts of

21 any such initiatives that have occurred to date in

22 terms of identifying the energy savings from those

23 initiatives.

24 But it will certainly consider any

25 information that can be presented regarding the

EE-2006-STD-0126 COMMENT 03.4
214

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 impacts that any of those initiatives or possibly new

2 initiatives might have in the future if something has

3 come about.

4 One issue that is, again, a slight wrinkle

5 in this particular rulemaking is that if -- where the

6 Department does not set standards that does not

7 preempt other authorities -- in particular, states --

8 from establishing their own standards for a given

9 piece of equipment. So that's something that needs to

10 be taken into account in this, and it may suggest that

11 -- or when we get to this stage in the analysis we may

12 want to look at that and see if -- how much effort we

13 want to spend on this for particular products.

14 Bryan?

15 MODERATOR BERRINGER: That leads us to

16 Item 16.1. "The Department is unaware of any current

17 non-regulatory programs that specifically target the

18 commercial refrigeration equipment covered under this

19 rulemaking. Are stakeholders aware of any such

20 programs that could be examined as optional or non21 regulatory approaches?" Any programs out there in

22 the -- I see shaking of heads that they're -- nobody

23 is aware of anything. Okay.

24 We'll move on to Item 16.2. "There are

25 specific subgroups of end users whom the Department

EE-2006-STD-0126 COMMENT 03.4
215

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 should consider in its review of potential adverse

2 impacts from standards developed under this

3 rulemaking." Any subgroups would be -- or end users

4 that we should consider? Okay. Seeing none, let's

5 move on.

6 MR. WINIARSKI: Okay. And I think at that

7 stage that finishes the NOPR analysis. I'll turn this

8 over to Jim.

9 MR. RABA: After we've done all the

10 analyses, gone to all the public meetings, heard all

11 the comments, oral and written, we take them all into

12 account, we finally come to a final rule. And the

13 final rule sums up everything you've heard today, but

14 fast-forward three years, and we have a lot to cover

15 between now and then. Once we get there, that final

16 rule will consist of a thorough review of all these

17 analyses taken in total.

18 And the energy efficiency levels, if

19 analyzed at later stages, once we go through some

20 levels to look at. And then, we'll look at the notice

21 of proposed rulemaking analysis, which comes after

22 this analysis, and see what adjustments have to be

23 made there as well and come up with a final rule. So

24 there's a lot more to cover, a lot more opportunity

25 for comment, a lot more opportunity to explore and

EE-2006-STD-0126 COMMENT 03.4
216

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 provide more information and data.

2 And also, by the final rule stage we will

3 have to consider other comments from other

4 departments. The Department of Justice will have to

5 weigh in on the impacts of any standards that we set

6 in the Department and the impacts on levels of

7 competition.

8 So the final rule would not become

9 effective until three years later. We say January 1,

10 2012. So there will be time for manufacturers and

11 other users to adjust. So with all that, the final

12 rule is published. 

13 Are there any questions about the analyses

14 we've had today, about today's public meeting? 

15 So, again, at the final rule stage, we'll

16 revise the analyses as appropriate, Department of

17 Justice review, and that will be it. Any questions or

18 comments so far at this stage, what we've heard on the

19 analyses? Yes, Bill.

20 MR. KISTNER: Yes, Jim. Bill Kistner,

21 Carrier. Back on that last page or page 10, which was

22 in the early part of the presentation, do you have

23 milestone dates for the end points of those segments

24 already targeted? I mean, we know when the final

25 ruling is. But if you back up to each of those

EE-2006-STD-0126 COMMENT 03.4
217

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 stages, where are the target dates for those

2 milestones?

3 MR. RABA: We have the target dates in4 house. Basically, those are milestones for us to

5 complete. What we typically do is do a timeline, a

6 critical path analysis, really in this case starting

7 from the end and working backwards, knowing we have to

8 meet a statutory deadline. 

9 How long it will typically take in a

10 rulemaking to do these analyses -- other requirements

11 that the government puts upon us. For example,

12 Department of Justice, the Office of Management and

13 Budget, others, have requirements of time they have to

14 look at as well. These are often factored in.

15 Ron Lewis, you had some comment about

16 that?

17 MR. LEWIS: Yes. Specific dates that are

18 targets at this point -- and looking at these being

19 dates we want to publish by and not to be exceeded, we

20 have the ANOPR in July of '07, the NOPR in May of '08,

21 and the final rule in January of '09. 

22 And if you look at the website, I opened

23 up this morning saying if you hadn't looked at the

24 report to Congress on our website -- I think it's

25 page 52 if I remember correctly. We have a model

EE-2006-STD-0126 COMMENT 03.4
218

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 there that shows the time to do all the analyses, when

2 we're going to do things, when it's in review,

3 etcetera, and there's a three-year time period there

4 that shows exactly what the sequencing is of things.

5 MR. KISTNER: Oh, okay.

6 MR. LEWIS: So those are the approximate

7 dates right now.

8 MR. KISTNER: Okay, good. That gives us

9 the target dates to work towards. Thanks.

10 MODERATOR BERRINGER: And I'd just like to

11 add I think those dates are also published in the

12 regulatory agenda for the Department also.

13 MR. RABA: One other thing, too, that was

14 asked before about where we could find information

15 from the commercial unitary air conditioning

16 rulemaking previous to this about the markups,

17 distribution channels, and the like, and we've

18 mentioned a website. 

19 Brenda Edwards-Jones has made some copies

20 of those pages, and if she has not -- if you have not

21 received them already, please stop by the desk over

22 there, the sign-in desk, and pick up a copy from her

23 on the way out. It will give you the exact website to

24 go to, save you some time, and you can see what we're

25 talking about there, give you the comparison you asked

EE-2006-STD-0126 COMMENT 03.4
219

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 for earlier on.

2 MODERATOR BERRINGER: Karim.

3 MR. AMRANE: Karim Amrane, ARI. Would it

4 be possible to get a copy of this presentation in PDF

5 or PowerPoint?

6 MR. RABA: Yes. This presentation today

7 will be available on our website in the next few days.

8 It's now public domain. When we put it on the

9 website, you can download it, and it will be in color.

10 MODERATOR BERRINGER: So at this time, I

11 think we're at closing remarks now. Does anybody have

12 any specific closing remarks from the audience --

13 manufacturers, stakeholders that are in the room?

14 MR. RABA: Wait, I have one more.

15 MODERATOR BERRINGER: We're almost there.

16 MR. RABA: Thank you very much for your

17 participation today.

18 (Laughter.)

19 Again, the websites are shown up here, for

20 further information. Please submit your written

21 comments thus far for our framework document, and in

22 today's public meeting, not later than May 30th.

23 Short window, but necessary to meet the schedule.

24 Written comments can be submitted directly

25 by e-mail or written on paper as well and delivered

EE-2006-STD-0126 COMMENT 03.4
220

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 both either in person, postal mail, or courier as

2 well. 

3 Any questions, you may also contact me.

4 This phone number, e-mail address, is also on the

5 public meeting notice for today.

6 This concludes our public meeting. And if

7 there are any further questions at this time, anything

8 I've covered, or the other information here about

9 website and the like? Yes, sir. Chris.

10 MR. BALESTRINI: This is Chris Balestrini.

11 Do you happen to know if you're planning any kind of

12 further working group sessions before the ANOPR is

13 issued? Like a further discussion where you might

14 have some results and stuff to sit down and go through

15 some of that? Or was this --

16 MR. RABA: There is nothing planned at

17 this time.

18 MR. BALESTRINI: Nothing planned.

19 MR. RABA: No.

20 MR. BALESTRINI: Okay.

21 MR. RABA: Well, the purpose of today's

22 public meeting was, indeed, to familiarize you with

23 the analytical tools that support the commercial

24 refrigeration rulemaking. And we appreciate your

25 participation today, and the comments, oral that we

EE-2006-STD-0126 COMMENT 03.4
221

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 heard today, and written comments that are to come,

2 and other information and data.

3 We have a long way to go, as you can see.

4 But working together we'll get it done on time and

5 hopefully to the satisfaction of all.

6 Thanks goes -- special thanks to our

7 presenters today -- Mike Christopher and Aris Marantan

8 of Navigant Consulting, and Dave Winiarski, Pacific

9 Northwest National Laboratory, and the others of our

10 consultants and contractors behind the scenes who are

11 really making this possible and doing the analytical

12 work and heavy lifting as well.

13 Special thanks, and I think a round of

14 applause, to our facilitator, Bryan Berringer.

15 (Applause.)

16 And for you who have participated today

17 openly, it's been good discussion, a lot of good

18 things, valuable information, valuable comments have

19 come out, interesting points have been made. We'll

20 take them into consideration. So on your own behalf,

21 give yourselves a round of applause.

22 (Applause.)

23 Well done, ladies and gentlemen. We look

24 forward to your continued interest, and those comments

25 and participating in the public rulemaking process as

EE-2006-STD-0126 COMMENT 03.4
222

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 it goes on.

2 Bryan, any further final comments or

3 thoughts?

4 MODERATOR BERRINGER: Yes. I'd just like

5 to follow up on Chris. At the ANOPR stage, there will

6 be analysis posted on our website at that point -- a

7 notice published, and we will have another public

8 meeting at that time for additional comments. So

9 that will be the next public forum that we will have.

10 And I want to thank everybody for their

11 participation. There was a lot of good information,

12 a lot of good discussion today. So thank you all very

13 much.

14 MR. LEWIS: Just one last note, too.

15 Because this meeting had so many people that have not

16 participated in one of these processes before, if you

17 go to our website there are other appliances and other

18 pieces of equipment that existing regulations are

19 there. It might be good guidance to just take a look

20 at the depth of the analysis and look at some

21 specifics there that -- ahead of time, give you an

22 idea of what we do, the extent that we analyze things.

23 And even though it's not your specific

24 product, it may be informative to you. So by going to

25 the website, there is some information there that may

EE-2006-STD-0126 COMMENT 03.4
223

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W.

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

1 be helpful in understanding the process. 

2 So thank you again for attending. Safe

3 journey home.

4 MR. RABA: And don't forget to turn in

5 your critique sheets as well to Brenda Edwards-Jones

6 in the back of the room.

7 MODERATOR BERRINGER: Okay. At this

8 point, we are adjourned. Thank you again.

9 (Whereupon, at 3:32 p.m., the proceedings

10 in the foregoing matter were adjourned.)

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

EE-2006-STD-0126 COMMENT 03.4
EE-2006-STD-0126 COMMENT 03.4