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**202-234-4433 Neal R. Gross and Co., Inc.**  **U.S. DEPARTMENT OF ENERGY + + + + +**  **ENERGY CONSERVATION STANDARDS FOR COMMERCIAL CLOTHES WASHERS** 

**+ + + + + PUBLIC MEETING** 

**+ + + + + MONDAY**  **APRIL 21, 2014 + + + + +** **The Public Meeting met in Room 8E 089, 1000 Independence Avenue, S.W.,**  **Washington, D.C., at 9:00 a.m., Doug Brookman, Meeting Facilitator, presiding.**  **PRESENT DOUG BROOKMAN, Meeting Facilitator, Public**  **Solutions, Inc. NICOLE BUCCITELLI, Navigant Consulting**  **JENNIFER CLEARY, Association of Home Appliance Manufacturers**  **RACHEL CLUETT, American Council for an Energy Efficient Economy**  **JOHN CYMBALSKY, Department of Energy AMANDA GONZALEZ, Energy Solutions**  **JOHANNA HARIHARAN, Department of Energy MAITHILI IYER, Lawrence Berkeley National**  **Laboratory JOANNA MAUER, Appliance Standard Awareness**  **Project CHUN CHUN NI, Lawrence Berkeley National**  **Laboratory EDWARD OSANN, National Resources Defense**  **Counsel TIMOTHY SUTHERLAND, Navigant Consulting** 

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**202-234-4433 Neal R. Gross and Co., Inc.**  **TABLE OF CONTENTS Welcome, Introductions, Agenda Review . . 3**  **Opening Remarks . . . . . . . . . . . . .. 3 Regulatory History, Rulemaking Process**  **Overview . . . . . . . . . . . . . . 11 Market and Technology Assessment,**  **Screening Analysis, Engineering Analysis . . . . . . . . . . . . . . 18**  **Markups for Equipment Price Determination, Energy and Water**  **Use Analysis . . . . . . . . . . . . 62 Life-Cycle Cost and Payback**  **Period Analysis . . . . . . . . . . . 68 Shipments Analysis, National**  **Impact Analysis . . . . . . . . . . . 78 Manufacturer Impact Analysis . . . . . . . 102**  **Consumer Subgroup Analysis, Emissions Analysis, Utility**  **Impact Analysis, Employment Impact Analysis, Regulatory**  **Impact Analysis . . . . . . . . . . .124 Next Steps and Closing Remarks . . . . . . 130**  **Adjournment . . . . . . . . . . . . . . . .134**

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**202-234-4433 Neal R. Gross and Co., Inc.**  **1** 

### P-R-O-C-E-E-D-I-N-G-S **2** 

### 9:03 a.m. **3** 

### MR. BROOKMAN: Okay. Let's begin. **4** 

### Good morning, everyone. Welcome. This is the **5** 

### Energy Conservation Standards Notice of **6** 

### Proposed Rulemaking for Commercial Clothes **7** 

### Washers. Today is April 21st, 2014 here in **8** 

### the Forrestal Building in Washington, D.C. **9** 

### My name is Doug Brookman. I'm **10** 

### from Public Solutions in Baltimore. We're **11** 

### going to start with a few welcoming remarks **12** 

### from John Cymbalsky. **13** 

### MR. CYMBALSKY: Thanks, Doug. **14** 

### This is John Cymbalsky. I am a program **15** 

### manager for appliance standards here at DOE. **16** 

### I want to apologize for picking **17** 

### the Monday after a major religious holiday. **18** 

### I did not realize it when I did that. The **19** 

### government calendar doesn't show those types **20** 

### of holidays, and I apologize for those who **21** 

### couldn't travel yesterday. I can understand **22** 

### that. Hopefully, you've made it on the

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**202-234-4433 Neal R. Gross and Co., Inc.**  **1** 

### webinar and can participate fully in this **2** 

### public meeting. And then welcome to the rest **3** 

### of you who are in the room. Thank you. **4** 

### MR. BROOKMAN: Let's start by **5** 

### doing introductions around the room. You can **6** 

### get used to turning these on and off. Please **7** 

### say your name and organizational affiliation. **8** 

### MS. GONZALEZ: Hi. My name is **9** 

### Amanda Gonzalez. I am here with Energy **10** 

### Solutions on behalf of the California IOUs. **11** 

### MS. CLUETT: Hi. My name is **12** 

### Rachel Cluett, and I'm from the American **13** 

### Council for an Energy Efficient Economy. **14** 

### MS. IYER: I'm Maithili Iyer. I'm **15** 

### with Lawrence Berkeley National Laboratories. **16** 

### MS. BUCCITELLI: Hi. I'm Nicole **17** 

### Buccitelli, and I'm with Navigant Consulting. **18** 

### MS. NI: My name is Chun Chun Ni **19** 

### with the National Laboratory. **20** 

### MS. CLEARY: Jen Cleary with the **21** 

### Association of Home Appliance Manufacturers. **22** 

### MR. SUTHERLAND: Hi. I'm Timothy

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**202-234-4433 Neal R. Gross and Co., Inc.**  **1** 

### Sutherland with Navigant Consulting. **2** 

### MS. HARIHARAN: Hi. I'm Johanna **3** 

### Hariharan with the general counsel here at **4** 

### Department of Energy. **5** 

### MR. BROOKMAN: John introduced **6** 

### himself already. Okay. Well, welcome. Glad **7** 

### to see you here this morning. All of you have **8** 

### seen the packet of information as you came in **9** 

### the door this morning. We do a very brief **10** 

### agenda review here. **11** 

### Immediately following this agenda **12** 

### review, there's an opportunity for anyone that **13** 

### wishes to to make opening remarks, brief **14** 

### summary remarks about issues that matter to **15** 

### you or issues that you'd like to bring to the **16** 

### floor. Following that, we'll have **17** 

### presentation and comment opportunities for **18** 

### regulatory history, rulemaking process **19** 

### overview. **20** 

### And then moving directly from **21** 

### there, market and technology assessment, **22** 

### screening analysis, and engineering analysis,

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**202-234-4433 Neal R. Gross and Co., Inc.**  **1** 

### and then, directly, markups for equipment **2** 

### price determination, energy, and water use **3** 

### analysis. We'll take a break mid-morning, **4** 

### around about 10:45 or so. **5** 

### Returning from break, life-cycle **6** 

### cost and payback period analysis, shipments **7** 

### analysis, national impact analysis, **8** 

### manufacturing impact analysis. We'll take **9** 

### lunch mid-day. Well, we'll see how that works **10** 

### actually. We'll see how the schedule **11** 

### progresses. If it looks as though we're going **12** 

### to adjourn more like 1:00, as it's suggested **13** 

### in this agenda, maybe we'll just press on **14** 

### ahead and not take lunch. **15** 

### But you can see, following the **16** 

### manufacture impact analysis, we go straight to **17** 

### consumer subgroup, emissions, utility impact, **18** 

### employment impact, regulatory impact analyses. **19** 

### At the end of the day is yet **20** 

### another opportunity for anyone that wishes to **21** 

### make closing remarks. Anything additional **22** 

### that you wish to cover that hasn't been

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**202-234-4433 Neal R. Gross and Co., Inc.**  **1** 

### covered sufficiently, we'll do it at that **2** 

### point. **3** 

### This agenda reflects that we're **4** 

### going to adjourn today at 1:00. We'll see how **5** 

### that goes. We're not going to waste anyone's **6** 

### time here today. **7** 

### Questions and comments about the **8** 

### agenda? **9** 

### Seeing none, I'd ask for your **10** 

### consideration, on the front page you can see **11** 

### some very simple ground rules. If you could **12** 

### speak one at a time, please, it would be **13** 

### helpful. Say your name for the record each **14** 

### time you speak. There will be a complete **15** 

### transcript of this meeting. Please be concise **16** 

### and share the air time. Keep the focus here. **17** 

### If you haven't got your cell phone in off mode **18** 

### or silent, please do so at this point. **19** 

### And webinar participants, as John **20** 

### Cymbalsky said, we welcome you and glad you **21** 

### could join us via the web. If you could keep **22** 

### your telephone on mute, and you can raise your

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**202-234-4433 Neal R. Gross and Co., Inc.**  **1** 

### hand with the software that you're in if you **2** 

### wish to speak. And most of the time, that's **3** 

### been working here in the room. We can hear **4** 

### you speaking directly into the conversation **5** 

### here. So we'll see if it works today. And **6** 

### welcome. We're glad to have you here. **7** 

### And I think that's the bulk of **8** 

### what I wanted to cover. At this point, John, **9** 

### do you want to do the opening slides. **10** 

### MR. CYMBALSKY: Sure. Thanks, **11** 

### Doug. This is John Cymbalsky again from DOE. **12** 

### I'll take you through a few more introductory **13** 

### slides. Again, this just reinforces that we **14** 

### have the webinar going on and we encourage **15** 

### you, as always, and including the people in **16** 

### the room, to submit their comments in written **17** 

### format. That really helps the technical team **18** 

### draft the next rulemaking document. **19** 

### And the purpose of the public **20** 

### meeting is basically to provide public comment **21** 

### on the Notice of Proposed Rulemaking that we **22** 

### have issued for commercial clothes washers.

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**202-234-4433 Neal R. Gross and Co., Inc.**  **1 You can see where the docket is, and we will 2 discuss all the analytical issues that are**  **3 presented in the NOPR. 4 As we go through this document,**  **5 you'll see these comment boxes. Here, we 6 would point out some of the things that we**  **7 feel are extra special in terms of needing 8 public comment on an issue that either we**  **9 think warrants more comment or we find maybe 10 controversial. So you'll see these scattered**  **11 throughout today's presentation. 12 And then, finally, how to submit**  **13 written comments. We have the email box for 14 this docket. You could also do regular post**  **15 mail, if you'd like, or by courier. But, 16 again, we'd encourage everyone to do an**  **17 electronic submission. It's the quickest. 18 You can also copy me on your email because I**  **19 know we've recently had some issues where 20 those email addresses sometimes are hard to**  **21 type and people who type one character 22 incorrectly will not get their submission in** 

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**202-234-4433 Neal R. Gross and Co., Inc.**  **1** 

### and you will not get a bounce-back. So feel **2** 

### free to copy Brenda or me in that **3** 

### transmission. **4** 

### Comment period closes May 5th, **5** 

### 2014 at midnight. So at this point, we're **6** 

### going to open it up for any opening remarks **7** 

### from folks in the room. **8** 

### MR. BROOKMAN: Yes, Amanda, **9** 

### please. **10** 

### MS. GONZALEZ: Hi. This is Amanda **11** 

### Gonzalez on behalf of the California IOUs. I **12** 

### just would like to thank the Department of **13** 

### Energy for hosting this public meeting and for **14** 

### their time and consideration of the different **15** 

### standard levels within the rulemaking for **16** 

### commercial clothes washers. **17** 

### We're highly supportive of this **18** 

### rulemaking and have been impressed by the **19** 

### analysis for front-loaders and have concerns **20** 

### and questions about the currently-proposed **21** 

### level for top-loaders, as well as some **22** 

### questions about the analysis for industry net

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### present value for top-loaders and look forward **2** 

### to the discussion today. **3** 

### MR. BROOKMAN: Thank you. **4** 

### Additional comments here at the outset? Okay. **5** 

### Nothing additional. **6** 

### MR. CYMBALSKY: Okay. John **7** 

### Cymbalsky again from DOE. I will take us **8** 

### through agenda item number one, which is the **9** 

### history and the rulemaking process overview. **10** 

### And then you'll probably hear from me in and **11** 

### out throughout the morning, and I will also **12** 

### present agenda item eight. And in the middle, **13** 

### we'll have our team, who are much more **14** 

### intimate with the details of this analysis, **15** 

### present the different parts of it. **16** 

### Okay. So the regulatory history. **17** 

### EPCA 1975 is our statutory authority for the **18** 

### program. It's been amended several times **19** 

### throughout the recent past. In particular, **20** 

### EPACT 2005 amended EPCA to add coverage for **21** 

### commercial clothes washers. It established **22** 

### definitions, test procedures, and standards

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### for commercial clothes washers, and it also **2** 

### required DOE to look at two different **3** 

### rulemakings for commercial clothes washers. **4** 

### The first one we issued on December 18th, **5** 

### 2009. And then this process now is the second **6** 

### requirement of that legislation. **7** 

### And the final rule is required **8** 

### January 1st of 2015, so we're looking very **9** 

### hard to meet that deadline. And I think, as **10** 

### far as I can tell, everything is on time at **11** 

### this point, so that's good news. **12** 

### Okay. So what's the definition of **13** 

### commercial clothes washer? It means a soft**14** 

### mount front-loading or a soft-mount top**15** 

### loading clothes washer that has a clothes **16** 

### compartment that for horizontal-access clothes **17** 

### washers is not more than 3.5 cubic feet and **18** 

### for vertical-access clothes washer is not more **19** 

### than 4.0 cubic feet. And it's designed for **20** 

### use in applications in which the occupants of **21** 

### more than one household will be using the **22** 

### clothes washer, so the main ones here are

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### multi-family housing; coin ops or laundry **2** 

### mats, as people might call them; and then **3** 

### other commercial applications. And you can **4** 

### see the cite to the U.S. Code 6311, Section **5** 

### 21. **6** 

### A little history here. So as I **7** 

### mentioned earlier, EPACT established the first **8** 

### set of standards. And so on January 1st, **9** 

### 2007, it set a Modified Energy Factor of 1.26 **10** 

### and a Water Factor of 9.5. **11** 

### DOE then amended these with the **12** 

### rulemaking effective January 8th of last year. **13** 

### Top-loaders have a 1.6 MEF with a maximum **14** 

### Water Factor of 8.5 Front-loaders, 2.0 MEF, **15** 

### and 5.5 for the Water Factor. And, again, **16** 

### this rulemaking will amend those standards at **17** 

### the bottom of this table. **18** 

### MS. GONZALEZ: John, I have a **19** 

### question. **20** 

### MR. BROOKMAN: Amanda? **21** 

### MS. GONZALEZ: This is Amanda **22** 

### Gonzalez with the California IOUs. I would

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**202-234-4433 Neal R. Gross and Co., Inc.**  **1** 

### just like to state for the record that we are **2** 

### still highly supportive of seeing one product **3** 

### class, as opposed to two, for top-loaders and **4** 

### front-loaders. **5** 

### We conducted some research during **6** 

### the last rulemaking phase which suggested that **7** 

### the cycle time between the two products **8** 

### classes was almost negligible. I think there **9** 

### was about a four-minute difference, on **10** 

### average, between top-loaders and front**11** 

### loaders. **12** 

### And if you account for the fact **13** 

### that front-loaders, which tend to be four **14** 

### minutes longer in cycle time, have the **15** 

### ability, generally, to take more water out of **16** 

### the clothes and, thereby, reduce the dryer **17** 

### time, the overall cycle times between front**18** 

### loaders and top-loaders when you account for **19** 

### drying would be less than the four-minute **20** 

### difference we hypothesize. So we would **21** 

### encourage DOE to reconsider combining product **22** 

### classes.

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### MS. HARIHARAN: This is Johanna **2** 

### Hariharan, general counsel, Department of **3** 

### Energy. With regard to top-loading and front**4** 

### loading and product classes, under EPCA we **5** 

### cannot combine those product classes because **6** 

### the location of the door is a feature, **7** 

### according to EPCA, 42 US Code 6295(q). So at **8** 

### this point, we do not have the legal authority **9** 

### to do that. **10** 

### MR. BROOKMAN: Amanda? **11** 

### MS. GONZALEZ: I just have a **12** 

### follow-up question. When -- was that recently **13** 

### revised in EPCA, the fact that it's a feature **14** 

### now? **15** 

### MS. HARIHARAN: It was not, but we **16** 

### have determined by the factors listed in EPCA, **17** 

### among other things, the utility of the **18** 

### consumer, that it is a feature. **19** 

### MR. BROOKMAN: Thank you, Johanna. **20** 

### You all set? Yes? Thank you. **21** 

### MR. CYMBALSKY: That's a good **22** 

### segue. For a couple of slides from now, we'll

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### get into the EPCA seven factors. **2** 

### Here's just the time line for this **3** 

### rulemaking. You can see the NOPR document **4** 

### came out March 4th, 2014. Here we are today **5** 

### at our public meeting. The comment period **6** 

### will end May 5th, and then we project that we **7** 

### will issue a final rule by January 1st, 2015. **8** 

### I can pretty much assure you it won't be **9** 

### issued on that day because we won't be working **10** 

### that day, so, hopefully, we beat that date by **11** 

### at least one day. **12** 

### Okay. So the language in EPCA is **13** 

### pretty clear about what we do when we go **14** 

### through our rulemaking process. But the new **15** 

### or amended standards must be designed to **16** 

### achieve the maximum improvement in energy or **17** 

### water efficiency that is technologically**18** 

### feasible and economically justified. So **19** 

### that's the phrase we work off of. **20** 

### There are some constraints that **21** 

### the rulemaking is subject to, and we're going **22** 

### to go through a few of them on the next slide.

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### To determine the technical **2** 

### feasibility, we have several analyses to show **3** 

### that the products and the equipment that we **4** 

### looked at are technically-feasible. So we **5** 

### have the market and tech assessment. We do a **6** 

### screening analysis and then the engineering **7** 

### analysis. And we'll go through all those **8** 

### steps here in the presentation this morning. **9** 

### So here's the EPCA factors. We **10** 

### had a little preview with Amanda's question **11** 

### regarding utility, and you could see number **12** 

### four on the EPCA factor is impact on utility **13** 

### or performance. And so, you know, the statute **14** 

### doesn't say top or front, in those words, in **15** 

### EPCA. However, one could readily posit **16** 

### reasons why a top-loader would provide people **17** 

### utility. **18** 

### I think we had a rule for cooking **19** 

### products where a glass door, for example, **20** 

### gives people utility because you don't have to **21** 

### open the door to look at your food while it's **22** 

### cooking. You can hit the light and look in

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### and you can see that it's not caught on fire **2** 

### or something like that. **3** 

### So the term "utility" probably **4** 

### means different things for different people. **5** 

### But I could say that, in lots of cases, the **6** 

### features that exist on these products are **7** 

### taken in a very broad sense here at DOE and **8** 

### have been in lots of rulemakings. **9** 

### Anyway, we can go through these a **10** 

### little bit, but we will be going through these **11** 

### in more detail. But you can see that the **12** 

### seven factors here, energy conservation is **13** 

### probably one of the biggest ones. **14** 

### But, also, we have to look at the **15** 

### impact on manufacturers and what it does to **16** 

### the marketplace. Does it lessen competition? **17** 

### Does it create monopolies, things of that **18** 

### nature? And as you go down the list, you can **19** 

### see the different analysis that matches up **20** 

### with each of the seven factors in EPCA. **21** 

### So at this point, unless there are **22** 

### any questions, we're going to move to the more

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### technical part of the presentation. You can **2** 

### sit or whatever you prefer. **3** 

### MR. SUTHERLAND: Okay. So the **4** 

### first slide will sort of guide us through this **5** 

### whole process. The first topic we'll go **6** 

### through is the market and tech assessment. **7** 

### The purpose of the market and tech **8** 

### assessment is shown in this slide. Initially, **9** 

### we defined the product classes. We **10** 

### characterized the overall commercial clothes **11** 

### washer industry and the market. During this **12** 

### process, we will gather historical shipments **13** 

### and other relevant data that characterized the **14** 

### market. And we use all this information to **15** 

### identify technology options for improving **16** 

### efficiency on these products. **17** 

### So the first slide here is about **18** 

### the product classes. As we just discussed a **19** 

### minute ago, the proposed standards maintain **20** 

### two product classes based on the location of **21** 

### access: top-loading and front-loading. **22** 

### A look here at the different

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### manufacturers and market share. DOE estimates **2** 

### that there are two major manufacturers that **3** 

### hold the large majority of the market, and you **4** 

### can see those listed. And then there are a **5** 

### number of other more minor manufacturers in **6** 

### this market listed in the right column. And **7** 

### DOE believes that the split is, roughly 90-10 **8** 

### between those two groups. **9** 

### On this slide, we'd like to go **10** 

### through the distribution channel for these **11** 

### products because it's different than for a lot **12** 

### of the other products that we deal with on **13** 

### these residential -- I'm sorry. It's **14** 

### different than the residential clothes washer **15** 

### markets, so I think it's important to **16** 

### highlight some of the differences here. **17** 

### So after leaving the manufacturer, **18** 

### a commercial clothes washer product will go to **19** 

### one of two places, and we'll talk about the **20** 

### boxes on the top first. If it's going to a **21** 

### multi-family housing destination, initially **22** 

### the product will be sold to a route operator.

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### And, typically, a route operator will lease **2** 

### laundry room space in the building. **3** 

### Typically, the route operator themselves will **4** 

### own and operate the machines. They may also **5** 

### maintain the facility itself, handling **6** 

### maintenance, cleaning, repairs, that type of **7** 

### thing. And they'll also typically take a **8** 

### portion of the revenue that comes in from **9** 

### usage of those machines. **10** 

### The building manager, on the other **11** 

### hand, they lease the space to the route **12** 

### operator. Most typically, the building **13** 

### manager pays the utility bill, so the electric **14** 

### and the gas bills. They may also take a share **15** 

### of the revenue that comes in from usage of the **16** 

### products. **17** 

### And in some cases, it's not as **18** 

### common, but in some cases the building **19** 

### managers may actually purchase machines and **20** 

### operate them directly themselves. But using **21** 

### a route operator is sort of the most common **22** 

### method.

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### And the boxes along the bottom **2** 

### pertain to coin-operated laundries or **3** 

### laundromats. And there, typically, the **4** 

### machines will first be sold to a distributor **5** 

### and that distributor will then turn around and **6** 

### sell the products directly to the laundromat. **7** 

### The laundromat owner purchases the machines, **8** 

### pays the utility bills. And in both cases, at **9** 

### the end, you have the end user, and that is **10** 

### the customer, the customer who comes in and **11** 

### pays to use the machine. **12** 

### By the way, feel free to stop me **13** 

### if there are any questions, even if there are **14** 

### no comment boxes listed here. **15** 

### So - looking at the sales **16** 

### breakdown between multi-family housing and **17** 

### coin laundries - DOE estimates that multi**18** 

### family represents the large majority, around **19** 

### 85 percent, of total annual sales. And the **20** 

### remaining 15 percent are for the coin **21** 

### laundries. **22** 

### And taking a look now at the

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### trends in shipments, historically, because **2** 

### such a large portion of the sales are to **3** 

### multi-family housing facilities, historically, **4** 

### the trends in annual shipments of commercial **5** 

### clothes washers have closely tracked trends in **6** 

### new multi-family housing construction. And so **7** 

### this chart shows a ten-year look-back. And **8** 

### aside from sort of the two years, 2009 and **9** 

### 2010, you can see that trend holds pretty **10** 

### closely. **11** 

### One of the things to note on this **12** 

### slide is DOE only has sales data up until 2011 **13** 

### on commercial clothes washers. So that **14** 

### actually brings us to our first request for **15** 

### comment, which is DOE requests information on **16** 

### historical product shipments and market share **17** 

### efficiency data disaggregated by product class **18** 

### for 2012 and 2013, as those data become **19** 

### available. **20** 

### MS. CLEARY: Jen Cleary of AHAM. **21** 

### AHAM will be glad to provide that data if we **22** 

### can, and usually we get the request from

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### Navigant, so we'll work with you for that. **2** 

### MR. SUTHERLAND: Great, thank you. **3** 

### MR. BROOKMAN: The submission **4** 

### dates will work for you? **5** 

### MS. CLEARY: When it becomes **6** 

### available works for us. **7** 

### MR. BROOKMAN: Thanks, Jen. **8** 

### MR. SUTHERLAND: So here on this **9** 

### slide, we're taking a look at the efficiency **10** 

### trends over the past ten years. And this **11** 

### shows that there has been a modest increase in **12** 

### efficiency over the past decade from an **13** 

### average of around 1.3 MEF in 2002 to, as of **14** 

### 2011, somewhere around just above 1.6 MEF, the **15** 

### shipment-weighted average. **16** 

### MS. GONZALEZ: I have a question. **17** 

### This is Amanda with the California IOUs. **18** 

### Which test procedure are you using for these **19** 

### MEFs? **20** 

### MR. SUTHERLAND: Yes, that's a **21** 

### great question and something that we should be **22** 

### sure to clarify any time we're showing these

### Page 25

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### slides. So this would be based on Appendix **2** 

### J1. All of these MEFs are rated values **3** 

### according to Appendix J1. **4** 

### And this slide here shows the **5** 

### efficiency distribution for top-loading, which **6** 

### are the blue columns on the left, and front**7** 

### loading, the orange columns on the right. And **8** 

### the thing to note here is that there is no **9** 

### overlap in efficiency levels between top**10** 

### loaders and front-loaders. **11** 

### Okay. So that takes care of the **12** 

### slides on the market assessment. Let's talk **13** 

### a little bit about the technology assessment. **14** 

### At the beginning of the technology **15** 

### assessment, DOE identified these initial **16** 

### options that could be used to improve energy **17** 

### efficiency in commercial clothes washers. I **18** 

### don't think I'll go through reading off each **19** 

### of these, but you can see them in the table **20** 

### there. **21** 

### MR. BROOKMAN: I have a question. **22** 

### MR. SUTHERLAND: Sure.

### Page 26

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### MR. BROOKMAN: Edward Osann **2** 

### writes, "What is the basis for this split in **3** 

### sales between coin laundry and multi-family? **4** 

### When was this 15-85 ratio established or re**5** 

### verified?" **6** 

### MR. SUTHERLAND: DOE re-verified **7** 

### that split during this current rulemaking and **8** 

### did so through data that we received from AHAM **9** 

### on shipments and also through discussions with **10** 

### manufacturers. **11** 

### MR. BROOKMAN: Thank you. **12** 

### MR. SUTHERLAND: Okay. So after **13** 

### looking at that table of initial technology **14** 

### options, the next analysis is the screening **15** 

### analysis. And the purpose of the screening **16** 

### analysis is to identify any technologies that, **17** 

### for a variety of reasons, would be eliminated **18** 

### from further consideration throughout the **19** 

### rulemaking. **20** 

### And so from that initial list, DOE **21** 

### screened out three of the technology options. **22** 

### The first two listed here, ozone laundry and

### Page 27

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### polymer bead cleaning, DOE ruled those out on **2** 

### the basis of technological feasibility and the **3** 

### practicability to manufacture and install and **4** 

### service that technology within the time lines **5** 

### associated with this rulemaking. **6** 

### And the third technology option, **7** 

### temperature-differentiated pricing controls, **8** 

### DOE ultimately screened that out, as well, **9** 

### because the potential energy savings of that **10** 

### technology option really depend on changes to **11** 

### consumer behavior, which, of course, occur **12** 

### after the point of manufacture. So DOE does **13** 

### not have any data on how consumer behavior **14** 

### might change accordingly if that feature is **15** 

### present on the machines. And so for those **16** 

### reasons, that technology option was screened **17** 

### out. **18** 

### So the table that's shown here **19** 

### shows the final list of technology options **20** 

### that DOE considered to be valid options for **21** 

### improving efficiency of commercial clothes **22** 

### washers.

### Page 28

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### Any questions on any of that? **2** 

### Okay. Let's head into the engineering **3** 

### analysis. **4** 

### So the purpose of the engineering **5** 

### analysis is to evaluate various design options **6** 

### that are used to improve efficiency. **7** 

### Ultimately, the output of the engineering **8** 

### analysis is a characterization of the **9** 

### manufacturer production costs, which you'll **10** 

### see abbreviated throughout as MPC, as a **11** 

### function of efficiency level. So that sort of **12** 

### graph in the lower left shows a typical cost **13** 

### efficiency curve that might be developed. **14** 

### These cost efficiency curves are **15** 

### developed individually for each product class. **16** 

### And they feed into the downstream analyses **17** 

### that are listed in that box on the right. **18** 

### So, first, just a quick note on **19** 

### test procedure notation here. The proposed **20** 

### standards are based on the new metrics **21** 

### contained in the Appendix J2 test procedure. **22** 

### And, specifically, it's the MEF and the IWF

### Page 29

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### metrics within the test procedure. So to **2** 

### distinguish between MEF from J1 and MEF of J2, **3** 

### DOE has added the J2 notation on MEF. **4** 

### And in the green box, you can see **5** 

### a summary of some of the major differences **6** 

### between MEF J1 and MEF J2. J2 incorporates, **7** 

### for top-loaders, a revised description of the **8** 

### capacity measurement level. And there's also **9** 

### a revised drying energy calculation, and that **10** 

### pertains to both top-loading and front**11** 

### loading. And those things affect the MEF **12** 

### value. **13** 

### The IWF is Integrated Water **14** 

### Factor, and the difference between IWF and WF, **15** 

### Water Factor, is that IWF incorporates water **16** 

### consumption from all the wash temperatures **17** 

### that are tested as part of the energy test **18** 

### cycle, rather than, with Water Factor it just **19** 

### looks at the cold wash/cold rinse cycle. **20** 

### So all of the products on the **21** 

### market are currently rated according to MEF **22** 

### and Water Factor as measured using Appendix

### Page 30

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### J1. So part of what we'll go through here is **2** 

### to talk about what DOE did to sort of convert **3** 

### that all over to equivalent Appendix J2 **4** 

### values. **5** 

### And so we'll go through these five **6** 

### topics here. Well, I won't talk through them **7** 

### specifically here. We'll go through these in **8** 

### order. **9** 

### So the first thing that DOE did **10** 

### was to choose a representative set of units **11** 

### for analysis. And to do this, DOE selected **12** 

### five representative products from each product **13** 

### class, and these products span the entire **14** 

### range of efficiencies available on the market. **15** 

### I should also note that they represent the **16** 

### widest range of manufacturers that we could **17** 

### find, as well. **18** 

### So this chart here shows the **19** 

### distribution, in terms of MEF on the X-axis **20** 

### and Water Factor on the Y-axis, of the units **21** 

### that DOE selected. And these are J1 ratings **22** 

### in this chart here.

### Page 31

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### MS. GONZALEZ: And this is Amanda **2** 

### with the California IOUs. In looking at this **3** 

### chart for top-loaders, the blue data point **4** 

### farthest to the right, is that supposed to be **5** 

### representative of the second or level two **6** 

### efficiency level? **7** 

### MR. SUTHERLAND: That little blue **8** 

### data point all the way on the right would **9** 

### actually be the max tech level. **10** 

### MS. GONZALEZ: Okay. **11** 

### MR. SUTHERLAND: I should say **12** 

### maximum available level, which corresponds to **13** 

### the max tech level. **14** 

### So the first thing DOE did was to **15** 

### establish the different efficiency levels **16** 

### based on the Appendix J1 ratings. So for top**17** 

### loading, the baseline was defined as the **18** 

### current minimum standard: 1.6 MEF, 8.5 Water **19** 

### Factor. DOE defined a gap fill level of 1.7 **20** 

### MEF, and then level two corresponds with the **21** 

### maximum available on the market, which is 1.85 **22** 

### MEF, 6.9 Water Factor.

### Page 32

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### And on the front-loading side, **2** 

### again, the baseline defined as the current DOE **3** 

### standard of 2.0 MEF, 5.5 Water Factor. Level **4** 

### one and level two correspond to the former CEE **5** 

### tiers, tier 2 and tier 3, 2.2 MEF, 2.4 MEF. **6** 

### And then level three corresponds to the **7** 

### maximum available on the market, which is 2.6 **8** 

### MEF, 3.7 Water Factor. **9** 

### So to start understanding how this **10** 

### all looks when we're looking at Appendix J2, **11** 

### DOE tested each of these units first according **12** 

### to Appendix J1, then second according to **13** 

### Appendix J2. And based on these test **14** 

### results, DOE determined equivalent Appendix J2 **15** 

### values for each of the efficiency levels that **16** 

### we just showed, which were based on Appendix **17** 

### J1. **18** 

### Just a note here. In the **19** 

### following slides, we'll highlight the MEF **20** 

### translations just for the sake of time, but **21** 

### DOE also used the same methodology for the **22** 

### Water Factor translations, as well. And those

### Page 33

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### details are described in full in chapter five **2** 

### of the technical support document. **3** 

### So first here, taking a look at **4** 

### the top-loading test results, these plots show **5** 

### Appendix J1 ratings on the X-axis and the Y**6** 

### axis shows the tested Appendix J2 values. **7** 

### So let me go to the next slide. **8** 

### This little diagram will show up in the right **9** 

### corner there. So based on these test results, **10** 

### DOE translated the three levels that we talked **11** 

### about before, translated those into Appendix **12** 

### J2 values, which are 1.15 MEF, 1.35 MEF, and **13** 

### 1.55 MEF. **14** 

### MS. CLEARY: I just want to **15** 

### clarify from slide 39. So you compared the **16** 

### tested values to the rated values, not tested **17** 

### to tested? **18** 

### MR. SUTHERLAND: DOE looked at **19** 

### both tested to tested and tested to rated. **20** 

### This plot here shows tested to rated. **21** 

### MS. CLEARY: And which one was **22** 

### ultimately used to develop the crosswalk?

### Page 34

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### MR. SUTHERLAND: Ultimately -- let **2** 

### me think about that for a minute. Ultimately, **3** 

### the rated values are what DOE placed the most **4** 

### weight on because there's a recognition that **5** 

### when DOE samples just one unit, you know, for **6** 

### statistical reasons, there may be some **7** 

### variation there. So, ultimately, the **8** 

### translations are done on the rated value **9** 

### basis. **10** 

### MS. CLEARY: Thank you. **11** 

### MR. BROOKMAN: Edward Osann has **12** 

### another question -- **13** 

### MR. SUTHERLAND: Sure. **14** 

### MR. BROOKMAN: -- where he writes, **15** 

### "Please elaborate on the conclusion that **16** 

### access of loading represent a distinct **17** 

### consumer utility-related feature when the **18** 

### consumer of commercial washers are the **19** 

### purchasers of commercial laundry equipment. **20** 

### What data has DOE relied upon to reach this **21** 

### conclusion?" **22** 

### MR. SUTHERLAND: Can I pass that

### Page 35

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### back to Johanna or John maybe? **2** 

### MR. BROOKMAN: Right. John **3** 

### Cymbalsky? **4** 

### MR. CYMBALSKY: So I guess the **5** 

### question is, if I heard it right, that **6** 

### consumers aren't purchasing the equipment, but **7** 

### they are the users of the equipment. And in **8** 

### my mind, I could easily and readily, someone **9** 

### like me who has a herniated disk in their **10** 

### back, can say that bending over and putting **11** 

### laundry in at that angle doesn't necessarily **12** 

### feel so good when that occurrence happens. **13** 

### So it's not so much the **14** 

### engineering that you referred to in your **15** 

### question as much as the application of that **16** 

### access in practical terms to the consumer. So **17** 

### that would be my answer. **18** 

### MR. BROOKMAN: Okay, thank you. **19** 

### MR. SUTHERLAND: Okay. **20** 

### MS. GONZALEZ: This is Amanda with **21** 

### the California IOUs. With respect to the plot **22** 

### on slide 39, can you comment on any observed

### Page 36

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### differences between rated and tested values? **2** 

### MR. SUTHERLAND: No, I don't think **3** 

### it would be appropriate to comment on any **4** 

### observed differences there. As I mentioned **5** 

### because of the statistical nature of how **6** 

### manufacturers develop the rated values, any **7** 

### one particular unit that sort of, that may **8** 

### test differently than its rated value would **9** 

### not be appropriate to draw conclusions on **10** 

### that. So . . . **11** 

### MS. GONZALEZ: Okay. And just for **12** 

### clarification, you're using the rated values **13** 

### for the basis of the standard? **14** 

### MR. SUTHERLAND: That's correct. **15** 

### Okay. Just one other thing to know, and, **16** 

### actually, it's easier to look at in this plot. **17** 

### For top-loaders, we saw that the translation **18** 

### can be different whether your machine has a **19** 

### manual fill system or whether you have an **20** 

### adaptive fill system, so that the efficiency **21** 

### level that you're at, so whether you're at **22** 

### baseline, level one, level two, under J1 may

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### not correspond to the same level you would be **2** 

### at under J2. **3** 

### Okay. And so we'll look at the **4** 

### same set of plots here for front-loading. **5** 

### This plot here shows the J1/J2 results for **6** 

### front-loaders. You'll see that the point in **7** 

### gray is labeled as a virtual model, and what **8** 

### does that mean? So in DOE's market sample, **9** 

### the lowest efficiency product that the DOE **10** 

### could find available on the market was 2.2 **11** 

### MEF. And, of course, the standard is **12** 

### currently 2.0 MEF. So the virtual model **13** 

### represents an extrapolation of the results **14** 

### down to the 2.0 level. **15** 

### So based on this curve, DOE, in a **16** 

### similar fashion, translated the results for **17** 

### each of the four efficiency levels so that the **18** 

### baseline becomes 1.65 MEF J2 and level one, **19** 

### level two, level three are 1.8, 2.0, and 2.2 **20** 

### MEF. **21** 

### Any other questions on those **22** 

### translations before we move along? Okay.

### Page 38

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### So after performing the J1, J2, **2** 

### and other tests, DOE then performed tear**3** 

### downs, which is a complete disassembly or **4** 

### reverse engineering of the products, to **5** 

### develop the manufacture or production costs **6** 

### relationships as a function of efficiencies. **7** 

### And from those tear-downs, DOE creates a **8** 

### detailed bill of materials for each individual **9** 

### product. These bill of materials describe in **10** 

### great detail the individual product components **11** 

### that are used to create the machine, but they **12** 

### also include estimates of materials, labor, **13** 

### capital equipment, and overhead costs **14** 

### associated with producing the equipment. **15** 

### So we won't go into the tear-downs **16** 

### in much detail here. Chapter five of the TSD **17** 

### provides full details on DOE's methodology for **18** 

### tear-downs, as well as the results from this **19** 

### analysis. **20** 

### MS. GONZALEZ: Yes, hi. This is **21** 

### Amanda with the California IOUS. I just have **22** 

### a question about this analysis. Can you

### Page 39

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### explain how or to what extent this feeds **2** 

### directly into product conversion costs? Is **3** 

### this, like, 90 percent of what goes into **4** 

### product conversation costs? I guess I'm **5** 

### trying to figure out how much the manufacturer **6** 

### interview gets accounted for. **7** 

### MR. SUTHERLAND: Nicole, is that **8** 

### actually something you can . . . **9** 

### MS. BUCCITELLI: The product **10** 

### conversion cost and capital conversion cost **11** 

### used in the manufacturing impact analysis, for **12** 

### the most part, reflect the input from **13** 

### manufacturer interviews more than anything **14** 

### else. **15** 

### MR. BROOKMAN: Okay. Thank you, **16** 

### Nicole. **17** 

### MR. SUTHERLAND: Thanks, Nicole. **18** 

### MS. GONZALEZ: And did you -- this **19** 

### is Amanda with the California IOUs. Were you **20** 

### able to compare those qualitative inputs to **21** 

### the bill of materials and overhead costs **22** 

### associated with these tear-downs just as a

### Page 40

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### sound check to see if they were in the same **2** 

### order of magnitude? **3** 

### MR. BROOKMAN: Back to Nicole. **4** 

### Yes? **5** 

### MS. BUCCITELLI: Yes, sorry. This **6** 

### is Nicole. First of all, the inputs from **7** 

### manufacturers on their estimated conversion **8** 

### costs were quantitative estimates. And we did **9** 

### make sure that they were consistent with what **10** 

### Tim found in the engineering analysis in terms **11** 

### of what design options corresponded to each **12** 

### TSL, and they were consistent. **13** 

### MS. GONZALEZ: Okay. Are we going **14** 

### to discuss product conversion cost again, or **15** 

### should we talk about that now? **16** 

### MS. BUCCITELLI: Yes, we'll **17** 

### discuss it during the manufacturing impact **18** 

### analysis. **19** 

### MS. GONZALEZ: Okay, thank you. **20** 

### MR. BROOKMAN: John Cymbalsky? **21** 

### MR. CYMBALSKY: Maybe I can give a **22** 

### little context here. So I think we're

### Page 41

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### confusing -- the tear-downs, what they do is **2** 

### they basically rip it all apart and price out **3** 

### the components and reverse engineer it back to **4** 

### what the product would cost to manufacture. **5** 

### Conversion costs are the impact to the **6** 

### manufacturer if we set a different standard **7** 

### for that product, what they would have to do **8** 

### their product lines to convert it to build **9** 

### that new machine. **10** 

### So I don't -- it sounds to me **11** 

### you're comparing two things here that are **12** 

### related but not a one-for-one input there. **13** 

### But I don't see these surveys they do with the **14** 

### manufacturers because it's NDA stuff. But, **15** 

### generally speaking, the way I understand it is **16** 

### these guys create a bill of materials from **17** 

### their tear-down, and when they go on their **18** 

### interview they actually discuss that bill of **19** 

### materials with the manufacturer and get **20** 

### feedback from them on whether or not these **21** 

### costs are reasonable. So unless I mis**22** 

### characterized it, that's what I think a major

### Page 42

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### part of the MIA is. **2** 

### MR. BROOKMAN: Nicole, do you wish **3** 

### to comment? **4** 

### MS. BUCCITELLI: Yes. Just to **5** 

### comment on, follow-up on what you just said, **6** 

### I agree with what John said. The creation of **7** 

### the MPC values, based on the different design **8** 

### options, is related to what manufacturers will **9** 

### see as their capital conversion costs for the **10** 

### corresponding design options. So, you know, **11** 

### in the case here, as you'll see, there's very **12** 

### little conversion costs related to TSL 1 and **13** 

### 2 and that's consistent with the MPC **14** 

### incremental costs for those two TSLs. **15** 

### MS. GONZALEZ: Yes. And this is **16** 

### Amanda with the California IOUs. I'm sure **17** 

### we'll come back to this, but, if you would, at **18** 

### least for top-loaders, if you compare the **19** 

### design options between level one and level **20** 

### two, they overlap pretty significantly. I **21** 

### mean, of course, for level two, there are **22** 

### additional design options, but it seems like

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### the conversion costs associated with those **2** 

### additional design options, it's -- **3** 

### MS. BUCCITELLI: Are you talking **4** 

### about efficiency level or TSL? **5** 

### MS. GONZALEZ: I'm talking about **6** 

### efficiency level just for -- I'm focused on **7** 

### top-loaders. **8** 

### MS. BUCCITELLI: Okay. **9** 

### MS. GONZALEZ: But we can come **10** 

### back to -- **11** 

### MS. BUCCITELLI: All right. Are **12** 

### you going to talk about the design options for **13** 

### the different efficiency -- **14** 

### MR. SUTHERLAND: No, we don't have **15** 

### any slides that speak to that specifically. **16** 

### So let's -- **17** 

### MR. BROOKMAN: So, Nicole, do you **18** 

### want to elaborate on that? **19** 

### MR. SUTHERLAND: Well, actually, **20** 

### maybe -- **21** 

### MS. GONZALEZ: I can read them out **22** 

### loud for the public record, if that would be

### Page 44

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### helpful. **2** 

### MR. SUTHERLAND: Yes, we do, we **3** 

### have -- a couple slides down, we'll show the **4** 

### cost efficiency curve for top-loaders. Let's **5** 

### pause when we get to that chart and we can go **6** 

### into a little more detail there. **7** 

### MS. GONZALEZ: Okay, thank you. **8** 

### MR. SUTHERLAND: Okay. So just at **9** 

### a sort of high level, what DOE does when we **10** 

### create these cost efficiency curves, in this **11** 

### case we essentially created unique curves for **12** 

### each major manufacturer, and then we combine **13** 

### these curves into one using estimates of **14** 

### weighted market share. So for each product **15** 

### class, we come out with one cost efficiency **16** 

### curve, which represents the industry-weighted **17** 

### average. **18** 

### Let's see if -- so let me just **19** 

### show this plot real quick. This is the top**20** 

### loading cost efficiency curve. As always, the **21** 

### baseline is defined as zero. For top-loaders, **22** 

### level one also has a zero incremental cost and

### Page 45

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### level two has $38.89 incremental cost over the **2** 

### baseline. And to sort of explain that in a **3** 

### more general sense, DOE's testing and tear**4** 

### downs showed that, at level one, manufacturers **5** 

### use primarily software-related control **6** 

### strategies to achieve that efficiency level **7** 

### over the baseline. So there's no increase in **8** 

### hardware that would result in a higher MPC. **9** 

### To achieve level two, there's a **10** 

### much larger jump. There's a major platform **11** 

### overhaul that's required to achieve that with **12** 

### associated physical hardware components, and **13** 

### so that explains the higher cost to get up to **14** 

### level two. **15** 

### So I think this would be a good **16** 

### chance now if you have more detailed **17** 

### questions. **18** 

### MR. BROOKMAN: Amanda, please. **19** 

### MS. GONZALEZ: Yes. So it sounds **20** 

### like the -- this is Amanda with the California **21** 

### IOUs. It sounds like the hardware components **22** 

### that you're referring to for level two for

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### top-loaders would be a spray-rinse, increased **2** 

### capacity to the tub, a low-profile agitator **3** 

### design, and improved motor efficiency. It **4** 

### seems like, with the motor efficiency, that's **5** 

### probably just a selection of a different **6** 

### motor, unless these manufacturers built the **7** 

### motors in-house. And then the low-profile **8** 

### agitator design seems more like an up-front **9** 

### cost because you're going to have an agitator **10** 

### no matter what. So that doesn't seem like **11** 

### that would really change in terms of the **12** 

### production. **13** 

### And I guess if you could comment **14** 

### on how spray-rinse and increased capacity and **15** 

### to the extent agitator design really changed **16** 

### the production, that would be great. **17** 

### MR. SUTHERLAND: Sure. So from a **18** 

### general sense, if I understand your question **19** 

### correctly, it's sort of along the lines of the **20** 

### options that we observed to get to level two, **21** 

### they don't sound like options that would add **22** 

### up to $39 in additional hardware cost. Is

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### that sort of the gist of the question? **2** 

### MS. GONZALEZ: Yes. More, I guess **3** 

### -- I guess I'm more focused on these **4** 

### conversion costs. I'm referring to Table **5** 

### 12.4.11 in the TSD where at efficiency level **6** 

### one it's about $10 million in conversion **7** 

### costs, and that, presumably, is for the **8** 

### software components. And then level two is **9** 

### $50 million. So I guess I just want to know **10** 

### how we got $40 million from improving the **11** 

### agitator and increasing the capacity, as well **12** 

### as spray-rinse. **13** 

### MR. SUTHERLAND: Sure. So the **14** 

### changes that are required to be made, DOE **15** 

### describes it as sort of a major platform **16** 

### overhaul. So when you're looking at things, **17** 

### such as the motor, in this case, you know, it **18** 

### may not be as simple as just swapping out one **19** 

### motor for another. The way the motor is **20** 

### integrated with the whole agitator assembly, **21** 

### the way the motor itself is integrated with **22** 

### the tub itself can be highly specific to the

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### type of motor that's chosen. **2** 

### So in this case, we saw, from the **3** 

### motor standpoint, there's a lot of other **4** 

### changes hardware-wise that occur. You can't **5** 

### just swap out one motor for another. There's **6** 

### a lot of these interfaces that have to change **7** 

### and different components that also are related **8** 

### to that. **9** 

### Similarly, regardless of the **10** 

### technology, the machines itself are just **11** 

### constructed in a fundamentally different way **12** 

### that requires different material selection, **13** 

### which then means different types of machinery **14** 

### required to make the product, different **15** 

### assembly processes, that type of thing. **16** 

### So does that answer your question? **17** 

### MS. GONZALEZ: Yes. This is **18** 

### Amanda with the California IOUs. I guess I **19** 

### would like if you could identify, I guess, the **20** 

### top two most expensive design considerations **21** 

### and conduct sensitivity on that to remove them **22** 

### and evaluate a level without those high-cost

### Page 49

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### design options, taking one or two out to see **2** 

### what the new INPV would be, that would be **3** 

### something we would like to see. Because with **4** 

### level two, it seems like a slam dunk for the **5** 

### consumer and it also seems like a slam dunk **6** 

### for at least the impacts on the small **7** 

### businesses, like the route operators and the **8** 

### distributors. It seems to be pretty small for **9** 

### those, and it seems like the major barrier of **10** 

### this impact on manufacturers. And since we're **11** 

### leaving a lot of water savings and energy **12** 

### savings on the table, I think it would be **13** 

### worthwhile to conduct sensitivity by **14** 

### potentially removing one of these design **15** 

### options, recalculating what the efficiency **16** 

### level would be, as well as what the impact on **17** 

### the manufacturer would be. **18** 

### MR. SUTHERLAND: That's something **19** 

### DOE can look at. One other thing I would just **20** 

### say is that, in some cases, you actually, from **21** 

### a technical standpoint, can't remove just one **22** 

### design option because some of these design

### Page 50

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### options are required to work together in order **2** 

### for the machine to work properly. For **3** 

### example, on machines that have the low-profile **4** 

### agitator, you may be required to also have **5** 

### spray-rinse with that because the low-profile **6** 

### agitator requires there to be a much lower **7** 

### quantity of water in the tub in order for the **8** 

### agitator to be able to catch the clothing so **9** 

### that the clothing is not suspended in water **10** 

### and the agitator has nothing to catch. So it **11** 

### may not be possible to separate out some of **12** 

### these individual components. **13** 

### MS. HARIHARAN: This is Johanna **14** 

### Hariharan. I was just wondering do you have **15** 

### anything specifically in mind that you're **16** 

### asking about? **17** 

### MS. GONZALEZ: In terms of a **18** 

### sensitivity analysis? **19** 

### MS. HARIHARAN: Yes, anything **20** 

### that's detrimental or very expensive. **21** 

### MS. GONZALEZ: So I don't know **22** 

### which of -- there are six design

### Page 51

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### considerations for level two for top-loaders, **2** 

### and it's hard for me to say which one of those **3** 

### six is potentially the largest contributor to **4** 

### making the jump from a $10 million conversion **5** 

### cost from EL 1, level one, to $50 million **6** 

### conversion cost for level two. And I think **7** 

### that that data is probably something that **8** 

### stakeholders are not privy to. So I would ask **9** 

### DOE to evaluate the possibility of removing **10** 

### one of those six design options and **11** 

### recalculating what the MEF would be, as well **12** 

### as the impact on manufacturers and savings **13** 

### potential. **14** 

### MR. BROOKMAN: Okay. Edward Osann **15** 

### has a question, and we will unmute him. **16** 

### Edward, unmute your phone and speak clearly. **17** 

### MR. OSANN: Yes. Do we have a **18** 

### live connection? **19** 

### MR. BROOKMAN: You sound good. **20** 

### MR. OSANN: Okay. Apologies for **21** 

### the lag time here. It's a bit hard for those **22** 

### who aren't in the room to get questions in as

### Page 52

**202-234-4433 Neal R. Gross and Co., Inc.**  **1 the presentation is moving forward. I wanted 2 to confirm in a follow-up to my previous**  **3 question that DOE has no data upon which to 4 base its conclusion about distinct consumer**  **5 utility for separate product classes of 6 commercial clothes washers, other than cycle**  **7 time. Is there any data for any factor other 8 than cycle time?**  **9 MR. SUTHERLAND: Well, the issue 10 of top-loading, the issue of axis of loading**  **11 being a feature just by definition is not 12 something that there would be any data**  **13 associated with. It's just that, you know, 14 it's determined, GC has determined that that**  **15 is a feature by definition. 16 MR. OSANN: Of consumer utility?**  **17 MS. HARIHARAN: This is Johanna 18 Hariharan. So based on our past analyses of**  **19 other products, as a matter of practice we 20 look at the consumer, the end user, rather**  **21 than the person who's selling it or possibly 22 purchasing it. In this case, it would be a** 

### Page 53

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### laundromat. We look at the person who is **2** 

### actually going to be using it, and it's a **3** 

### matter of established practice here in GC. **4** 

### MR. BROOKMAN: Thank you, Johanna. **5** 

### Ed, did that, does that get to your question? **6** 

### MR. OSANN: Yes, I think the **7** 

### answer was there is no data. **8** 

### MR. BROOKMAN: Okay, thank you. **9** 

### MR. SUTHERLAND: Okay. So DOE **10** 

### will take under consideration all of the **11** 

### comments that have been presented here. Thank **12** 

### you. **13** 

### So now, similarly, we'll look at **14** 

### the front-loading curves. Again, baseline is **15** 

### defined as zero. In this case, level one also **16** 

### is zero. Level two is a small cost, $0.31. **17** 

### And level three, a jump up to $19.55. **18** 

### As some sort of discussion around **19** 

### this, so, as I mentioned before, DOE could not **20** 

### find any products available on the market at **21** 

### the baseline level of 1.6. So efficiency **22** 

### level one represents basically an effective

### Page 54

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### baseline on the market, so that explains the **2** 

### zero dollar incremental cost there. **3** 

### At efficiency level two, DOE **4** 

### observed that manufacturers, for the most **5** 

### part, use software-related changes to bump the **6** 

### efficiency up from efficiency level one to **7** 

### efficiency level two. And then at efficiency **8** 

### level three, there's a much more significant **9** 

### platform change that's required, including **10** 

### motor upgrades, larger tub size, that sort of **11** 

### thing. And so that explains why the jump is **12** 

### a bit more there for efficiency level three. **13** 

### Any questions on the front-loading **14** 

### curves? Okay. **15** 

### So this comment box is numbered **16** 

### issue nine. I should mention these issue **17** 

### boxes are not in numerical order. They **18** 

### correspond to how they're numbered in the NOPR **19** 

### document. So, in general, DOE requests **20** 

### comment on the assumptions applied in the **21** 

### engineering analysis regarding the baseline **22** 

### efficiency levels and the technology cost

### Page 55

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### assessment. Although it's not listed here, **2** 

### DOE also invites comment on the higher **3** 

### efficiency levels and the max tech levels, as **4** 

### well. **5** 

### MR. BROOKMAN: Edward Osann has **6** 

### another question. Edward, you are unmuted. **7** 

### Speak. **8** 

### MR. OSANN: Yes. In the case of **9** 

### both the front-loaders and top-loaders where **10** 

### increased tub size is identified as a design **11** 

### option, are those, is it clear that those **12** 

### increases are to sizes that remain within the **13** 

### size thresholds for the respective product **14** 

### categories? **15** 

### MR. SUTHERLAND: Yes, that's **16** 

### correct. The increase in size remains within **17** 

### the statutory definition of what's considered **18** 

### a covered product. **19** 

### MR. BROOKMAN: Amanda? **20** 

### MS. GONZALEZ: With respect to the **21** 

### increase in size, if manufacturers are already **22** 

### producing those units with increased sizes or

### Page 56

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### just if the sizes range across commercially**2** 

### available products, then would you agree that **3** 

### there's zero product conversion costs **4** 

### associated with the increased tub size? **5** 

### MR. SUTHERLAND: If a manufacturer **6** 

### is not producing a product at the increased **7** 

### tub size, then there will be conversion costs **8** 

### because they'll have to change their equipment **9** 

### to get there. If a manufacturer produces **10** 

### across the whole spectrum let's say, and so **11** 

### then they have a product at the max tech level **12** 

### and other efficiency levels, typically there **13** 

### will also be some product conversion costs **14** 

### associated with bringing the lower efficiency **15** 

### products up to whatever new level you're **16** 

### looking because there will be changes required **17** 

### to the assembly line or, you know, things like **18** 

### that. So there typically will still be **19** 

### conversion costs associated with that type of **20** 

### transition. **21** 

### MS. GONZALEZ: This is Amanda with **22** 

### the California IOUs. I guess I'd like to

### Page 57

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### clarify my statement and question. It seems **2** 

### that manufacturers probably create different **3** 

### products with different tub sizes to sell to **4** 

### the market, and so if we're only talking about **5** 

### products within a given tub size threshold and **6** 

### they're already making tubs of varying sizes **7** 

### for the market, the higher efficiency products **8** 

### would tend to just shift towards the larger **9** 

### tub sizes that are already being produced for **10** 

### products. **11** 

### MR. CYMBALSKY: So volume, right? **12** 

### So they wouldn't be able to produce at the **13** 

### volume that's necessary at the standard level. **14** 

### I mean, it's not a free cost. I mean, if you **15** 

### told Coke, all right, you produce 3-liter **16** 

### bottles and 2-liter bottles but the **17** 

### relationship is one-third/two-third, they just **18** 

### can't go produce 3-liter Coke bottles at no **19** 

### cost. **20** 

### MR. SUTHERLAND: The other thing I **21** 

### would mention is that, while capacity in this **22** 

### example may be one route that a manufacturer

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### chooses to go down to achieve higher **2** 

### efficiency levels, different manufacturers may **3** 

### choose different paths to get there. So it **4** 

### really depends on the manufacturer, depends on **5** 

### sort of the current mix of products that that **6** 

### manufacturer develops. A lot of factors go **7** 

### into that, and that's a lot of what we **8** 

### discussed with the manufacturers under, you **9** 

### know, NDA agreement and all of that **10** 

### information sort of gets rolled into the INPV **11** 

### calculations. **12** 

### MS. GONZALEZ: This is Amanda with **13** 

### the California IOUs. I just have a follow-up **14** 

### question to that remark. For the different **15** 

### efficiency levels, there's different design **16** 

### considerations. Are you saying that, in order **17** 

### to meet that efficiency level, you don't **18** 

### necessarily have to have each of those design **19** 

### considerations? You could pick and choose **20** 

### however you've crafted those design **21** 

### considerations that would meet -- **22** 

### MR. SUTHERLAND: That's correct.

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### When DOE, in the technical support document, **2** 

### lays out sort of the design considerations at **3** 

### each efficiency level, that represents kind of **4** 

### an industry average of what we've observed **5** 

### based on the product samples that we've tested **6** 

### and torn down. So you can think of that as **7** 

### sort of the industry average of what it takes **8** 

### to get from level one to level two to level **9** 

### three. But an individual manufacturer may **10** 

### decide to do something slightly differently. **11** 

### And with clothes washers, because **12** 

### there are a number of different strategies **13** 

### that you can use to get higher efficiency, **14** 

### some manufacturers may prefer to go down one **15** 

### route, other manufacturers may prefer other **16** 

### strategies. So it can differ by manufacturer **17** 

### how they choose, how they decide they want to **18** 

### get there. **19** 

### MS. GONZALEZ: This is Amanda with **20** 

### the California IOUs. Thank you. I guess I **21** 

### still have questions about how that would **22** 

### impact conversion costs. But if, Nicole, you

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### think it makes sense for me just to wait on **2** 

### those questions until we get to that section, **3** 

### that's fine. **4** 

### MS. BUCCITELLI: Yes, I mean, I'd **5** 

### just comment that we assume that manufacturers **6** 

### are factoring, you know, the choices that they **7** 

### are thinking about making in order to comply **8** 

### with standards in the estimates that they give **9** 

### us. So, you know, we work with those **10** 

### estimates. **11** 

### MR. BROOKMAN: Yes, Johanna? **12** 

### MS. HARIHARAN: This is Johanna **13** 

### Hariharan. We have a comment from a webinar **14** 

### from Joanna Mauer, and she says, "In the 2010 **15** 

### final rule, DOE said that access without **16** 

### stooping is not a consumer utility that would **17** 

### warrant the definition of separate equipment **18** 

### classes. Has DOE changed their view on this?" **19** 

### and I believe Joanna is referring to John's **20** 

### previous example, illustrative example about **21** 

### stooping. He did not mean that this is the **22** 

### only thing we considered, and what we meant to

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### say was that if this was the only issue, **2** 

### stooping or not, then that wouldn't warrant a **3** 

### different product class. **4** 

### So this is just one issue. There **5** 

### are other things, like cycle times and many **6** 

### other things. And we don't even look at only **7** 

### utility to the consumer. We look at other **8** 

### things. So thanks for your comment, but this **9** 

### is not the only thing that we considered. **10** 

### MR. BROOKMAN: Okay. Thank you, **11** 

### Johanna. **12** 

### MR. SUTHERLAND: Okay. **13** 

### MS. GONZALEZ: This is Amanda with **14** 

### the California IOUs. Do you mind expanding on **15** 

### the other things that you did consider for **16** 

### commercial clothes washers? I know the **17** 

### advocates on the line would appreciate that. **18** 

### MS. HARIHARAN: So as I mentioned, **19** 

### we did look at cycle time in addition. And I **20** 

### would have to get back to you on other things **21** 

### that we did consider, which I'd be happy to do **22** 

### so after the break.

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### MS. GONZALEZ: This is Amanda with **2** 

### the California IOUs. With respect to cycle **3** 

### time, did DOE factor in the fact that with the **4** 

### front-loaders, if it's able to get more water **5** 

### out of the clothing, that the dryer time would **6** 

### actually be shorter and, thus, the overall **7** 

### cycle time associated with the consumer **8** 

### waiting at a laundry mat would either be the **9** 

### same or less? **10** 

### MS. HARIHARAN: I would have to **11** 

### get back to you on that. I am not sure. **12** 

### MS. GONZALEZ: Okay, thanks. **13** 

### MR. SUTHERLAND: Okay. This is **14** 

### the last slide on the engineering analysis. **15** 

### So from people in the room or people on the **16** 

### line, are there any further questions related **17** 

### to market and tech, engineering analysis? **18** 

### Okay. If not, we will turn it **19** 

### over to Maithili Iyer, and she will talk **20** 

### through the next phase of the analysis. **21** 

### MS. IYER: Thank you, Tim. My **22** 

### name is Maithili Iyer. I'm with the Lawrence

### Page 63

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### Berkeley National Laboratory. In the next **2** 

### hour or so, I'll be covering analysis that **3** 

### sort of follows the engineering analysis and **4** 

### looks at the economics, the consumer economics **5** 

### and economics at the national level. **6** 

### As part of the consumer economics, **7** 

### we'll be looking at life-cycle cost analysis **8** 

### and payback period calculations. I will begin **9** 

### with two of the key inputs into the life-cycle **10** 

### cost analysis. Those two are markups analysis **11** 

### and the energy and water use characterization. **12** 

### So we will begin with markups. **13** 

### The purpose of the markups is to convert the **14** 

### manufacturer price to the final consumer **15** 

### retail price. So for doing that, DOE first **16** 

### establishes the distribution channels that the **17** 

### products go through. I think Tim spent some **18** 

### time going over the distribution channels. **19** 

### This particular view graph that **20** 

### you see on top was developed by the Consortium **21** 

### for Energy Efficiency, and they determined **22** 

### that about 93 percent of the products go

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### through distributors to laundromats and **2** 

### through route operators to multi-family **3** 

### housing. So laundromats and multi-family **4** 

### housing were sort of the two main applications **5** 

### that DOE was looking at since most of the **6** 

### units are used in these two locations. **7** 

### And since distributors and route **8** 

### operators are the two entities between the **9** 

### manufacturer and the final consumer, DOE **10** 

### developed the markups for distributors and **11** 

### assumed that the route operators would **12** 

### probably experience the same kind of profits **13** 

### and markups. So for developing the markups, **14** 

### DOE looked at two components: the baseline **15** 

### markup and an incremental markup. **16** 

### Baseline markups typically include **17** 

### pretty much everything that a product goes **18** 

### through, from the manufacturer to the final **19** 

### user, whatever the distributor has to go **20** 

### through in terms of expenses or profits, any **21** 

### kind of overheads, for a product that sort of **22** 

### meets the minimum efficiency standard, a

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### product that's the baseline product. So that **2** 

### sort of constitutes the baseline markup. **3** 

### The incremental markup, on the **4** 

### other hand, has costs that are specific to **5** 

### selling a more efficient product. So these **6** 

### tend to be smaller typically. In our case, we **7** 

### actually came up with a baseline markup of **8** 

### 1.96 and an incremental markup of 1.62. These **9** 

### are the overall markups, which includes the **10** 

### manufacturer markups. **11** 

### That sort of concludes the markups **12** 

### analysis. If there are any questions, I'll be **13** 

### happy to take. **14** 

### Okay. So we move on to energy and **15** 

### water use characterization. This is the **16** 

### second key input into the LCC and the payback **17** 

### period analysis. **18** 

### Energy and water use sort of **19** 

### determine how much operating cost the consumer **20** 

### experiences over the life of the equipment. **21** 

### For determining energy and water use, DOE **22** 

### looked at the per-cycle energy use and

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### multiplied that by the number of cycles that **2** 

### any application will experience during the **3** 

### year. **4** 

### Since we're looking at two key **5** 

### application areas, the laundromats and the **6** 

### multi-family housing, DOE looked at studies, **7** 

### and did a very comprehensive literature review **8** 

### to find studies that look at the number of **9** 

### cycles that these applications or application **10** 

### areas face. DOE found about eight studies **11** 

### that look at multi-family housing and about **12** 

### six studies that look at laundromats. **13** 

### Based on that -- I'm sorry I **14** 

### didn't move the slide. Based on that, DOE **15** 

### found that, on average, multi-family housing, **16** 

### the common-area laundry in multi-family **17** 

### housing has an average of three cycles per **18** 

### day, which ranges between 1.5 to 4.3. And in **19** 

### the case of laundromats, the average was **20** 

### around 4.1 and it ranges between 2.8 to 6.0. **21** 

### The ranges are kind of important because they **22** 

### sort of set the variability that we experience

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### when we consider different uses. **2** 

### This is a view graph that just **3** 

### explains the methodology that we followed for **4** 

### calculating the energy and water use. One of **5** 

### the things that is to be noted here is that **6** 

### the test procedure sets the number of cycles **7** 

### based on residential usage. And because we're **8** 

### looking at commercial clothes washers, we **9** 

### needed to actually come up with a usage factor **10** 

### that represented commercial clothes washers in **11** 

### the field, and that's sort of why we actually **12** 

### established the number of cycles per day **13** 

### pertaining to multi-family and the laundromat **14** 

### applications. **15** 

### The equation on the right is taken **16** 

### out of the test procedure, and there are three **17** 

### components to energy use here: the water**18** 

### heating energy, the machine energy, and the **19** 

### dryer energy. The machine energy is, of **20** 

### course, typically, the motor energy to rotate **21** 

### the agitator or the wash basket. We take the **22** 

### per-cycle energy use and multiply that by the

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### number of cycles to get, for any application **2** 

### type, the annual energy use. **3** 

### At this point, here's a comment. **4** 

### And we actually would request any comment that **5** 

### you may have on usage specifically about on**6** 

### premise laundry. In the last meeting, there **7** 

### were requests that we actually characterize **8** 

### this usage, and DOE did not find any studies **9** 

### that actually looked into that. Even though **10** 

### this is a very small market, extremely small, **11** 

### we assumed that the usage is kind of similar. **12** 

### So any new information that anybody could **13** 

### provide would be useful. **14** 

### That sort of concludes the markups **15** 

### and energy use for now. Should I continue, or **16** 

### shall we break? Continue? **17** 

### MS. GONZALEZ: I have a question I **18** 

### meant to ask. This is Amanda with the **19** 

### California IOUs. The studies that you used **20** 

### for the basis of the number of cycles per day **21** 

### -- **22** 

### MS. IYER: Yes.

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### MS. GONZALEZ: -- how old are **2** 

### those studies? **3** 

### MS. IYER: I think the most recent **4** 

### one is from 2009. **5** 

### MS. GONZALEZ: Okay, thanks. **6** 

### MS. IYER: Sure. Okay. So moving **7** 

### on to life-cycle cost and payback period **8** 

### analysis. The purpose of the life-cycle cost **9** 

### analysis calculation is to determine how much **10** 

### a user would have to spend in terms of **11** 

### purchasing and operating the equipment over **12** 

### the life of the equipment and how would that **13** 

### compare at a different efficiency level **14** 

### compared to the baseline product. **15** 

### So basically, it includes the **16** 

### purchase expense, which we call is the first **17** 

### cost, and the operating cost over the life, **18** 

### over the entire life of the equipment. DOE **19** 

### discounts the future operating costs to the **20** 

### time of purchase and adds it up over the **21** 

### lifetime to come up with the life-cycle cost. **22** 

### The life-cycle cost calculations

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### are implemented in Excel spreadsheet. The **2** 

### same spreadsheet also calculates the payback **3** 

### period. Payback period is typically the **4** 

### amount of time it takes for a user to recover **5** 

### any increase in expense they would incur from **6** 

### moving to a higher-efficiency product through **7** 

### a reduction in operating cost. **8** 

### So recognizing that there are, you **9** 

### know, we're trying to represent pretty much **10** 

### all the consumers, and there are a lot of **11** 

### uncertainties and variability associated with **12** 

### the inputs that go into the life-cycle cost **13** 

### calculation, DOE used the Monte Carlo **14** 

### simulation approach to calculate the life**15** 

### cycle costs and used probability distributions **16** 

### to characterize variability and uncertainty. **17** 

### The life-cycle costs that are calculated are **18** 

### actually performed for every single efficiency **19** 

### level for each product category or product **20** 

### class that is considered in the analysis. **21** 

### One of the things that is critical **22** 

### in the analysis is to sort of take into

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### account the percentage of consumers that are **2** 

### already buying equipment that are at a higher **3** 

### efficiency level so that we do not **4** 

### overestimate the benefits of moving to a **5** 

### higher-efficiency level. So DOE utilized the **6** 

### base case efficiency distribution, which was **7** 

### developed on the basis of data submitted by **8** 

### AHAM, to characterize the life-cycle cost **9** 

### savings in comparison to the base case that **10** 

### was there. **11** 

### Among the other inputs that go **12** 

### into the LCC analysis, we have energy and **13** 

### water prices. These, along with energy and **14** 

### water consumption, complete the operating **15** 

### expense. **16** 

### The electricity prices were taken **17** 

### from EIA's Form 861. EIA's Form 861 publishes **18** 

### data on revenues and sales for all electric **19** 

### utilities in the country. DOE weighted the **20** 

### population across the different states that **21** 

### these utilities have to come up with weighted **22** 

### average prices for the 27 states and group of

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### states for the country, and this is consistent **2** 

### with the 2009 RECS in terms of regional **3** 

### variability. And this is how DOE established **4** 

### regional variability across consumers. **5** 

### For natural gas, we used EIA's **6** 

### Natural Gas Monthly. This, again, publishes **7** 

### prices for all the states, and we used the **8** 

### population to come up with a weighted average **9** 

### for 27 states and group of states. **10** 

### For water and wastewater prices, **11** 

### DOE utilized the Water and Wastewater Rate **12** 

### Survey published by Raftelis Consultants and **13** 

### the American Water Works Association. This **14** 

### survey covers about 216 water and about 153 **15** 

### wastewater utilities. And since these number **16** 

### of utilities were not large enough for us to **17** 

### characterize or come up with a large regional **18** 

### set of prices, we came up with average prices **19** 

### for the four census regions to establish **20** 

### regional variability for water prices. **21** 

### For forecasting the water and **22** 

### energy prices into the future, DOE used the

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### 2013 AEO for energy prices. And the Bureau of **2** 

### Labor Statistics' CPI Index for water and **3** 

### sewerage for forecasting the water prices. **4** 

### Okay. The other set of inputs to **5** 

### the LCC analysis include installation costs, **6** 

### repair and maintenance costs, discount rates, **7** 

### and equipment lifetime. **8** 

### DOE set the base cost at $223. **9** 

### This is based on the RS Means mechanical cost **10** 

### data from 2013. For repair and maintenance, **11** 

### DOE assumed it to be sort of related to the **12** 

### retail price. It was taken as one-half of the **13** 

### equipment price divided by its lifetime. So **14** 

### there was some correlation with what happens **15** 

### when the price goes up with an increase in **16** 

### efficiency. **17** 

### For discount rates, which are, **18** 

### again, used to bring the operating cost **19** 

### expenses to present value, DOE basically **20** 

### looked at finance costs or the financing **21** 

### method that consumers may choose while buying **22** 

### the equipment, whether it is through debt that

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### is incurred while purchasing the equipment or **2** 

### the opportunity cost of using equity to **3** 

### purchase the equipment. So we basically used **4** 

### the weighted average capital cost that the **5** 

### firms experience to establish the interest **6** 

### rate that can be used as discount rate. The **7** 

### weighted average real discount rate was found **8** 

### to be around 5.7 percent. **9** 

### MS. GONZALEZ: I have a question. **10** 

### This is Amanda with the California IOUs. Can **11** 

### you explain the basis for the repair and **12** 

### maintenance costs not specific to commercial **13** 

### clothes washers or -- **14** 

### MS. IYER: This is not specific to **15** 

### commercial clothes washers. This is something **16** 

### that has been used in other rulemakings, and **17** 

### DOE has found there to be a basis for this. **18** 

### In the last rulemaking, manufacturers talked **19** 

### about this being, you know, something that **20** 

### could be considered, and it was developed **21** 

### during that time. And we did not get any **22** 

### feedback from anybody saying that this wasn't

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### the case, so we continued to use that. **2** 

### MS. GONZALEZ: Okay. This is **3** 

### Amanda with the California IOUs. The repair **4** 

### and maintenance cost is applied to each of **5** 

### the, to the baseline in addition to each of **6** 

### the efficiency levels? **7** 

### MS. IYER: Yes, yes. **8** 

### MS. GONZALEZ: And then I had an **9** 

### additional question about the installation **10** 

### cost. **11** 

### MS. IYER: Yes? **12** 

### MS. GONZALEZ: That's $223 for **13** 

### front and top-loaders because it's just cost **14** 

### to install? **15** 

### MS. IYER: Yes. **16** 

### MS. GONZALEZ: Okay. And what was **17** 

### that based on? **18** 

### MS. IYER: RS Means mechanical **19** 

### cost data. So regarding equipment lifetime, **20** 

### we looked at, you know, several sources for **21** 

### this, including the Appliance Magazine and the **22** 

### past technical support documents, and came up

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### with an average of 11.3 for multi-family, the **2** 

### common laundry and multi-family buildings, and **3** 

### 7.1 for laundromats. And we used the lower **4** 

### and the upper bound that we found on the **5** 

### lifetimes to characterize the distribution **6** 

### using a Weibull function. **7** 

### I talked about the importance of **8** 

### the base case efficiency distribution in **9** 

### ensuring that DOE does not overstate the **10** 

### benefits, nor understate the benefits that can **11** 

### be experienced moving to a higher efficiency **12** 

### level. So the table here actually represents **13** 

### what we got in terms of data from AHAM. The **14** 

### left side is the top-loading, and the right **15** 

### side of the table presents the front-loading. **16** 

### The horizontal rows are the different levels, **17** 

### and the market share sort of shows you that, **18** 

### in the case of top-loading, most of the market **19** 

### is currently at baseline. There is hardly any **20** 

### market at levels one and two, while for front**21** 

### loading it's more evenly distributed with **22** 

### pretty much no market share at the max tech

### Page 77

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### level. So, again, this is the basis for us to **2** 

### evaluate any new standard. **3** 

### Here is a table that sort of **4** 

### presents the analysis for a particular **5** 

### scenario. We're looking at efficiency level **6** 

### one for top-loaders and level two for front**7** 

### loaders. The column, the net benefits **8** 

### compares well with the market share efficiency **9** 

### distribution that I showed you a while ago. **10** 

### You'll see that, for both applications for **11** 

### top-loading, about 99 percent of the consumers **12** 

### benefit from moving to level one, while about **13** 

### 61 percent of front-loading market, or the **14** 

### consumers benefit from moving to level two. **15** 

### And, you know, the payback period, of course, **16** 

### is zero since you'll hardly have any cost **17** 

### increase at this level. **18** 

### So we're coming up for comments **19** 

### here. This one is pertaining to any new **20** 

### information that we can get on the lifetime **21** 

### for both applications. And this one is **22** 

### specifically for repair and maintenance, so if

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### you have any data or any information that sort **2** 

### of suggests that what we are assuming is not **3** 

### the right thing to do, please feel free to do **4** 

### so. **5** 

### MS. GONZALEZ: This is Amanda with **6** 

### the California IOUs. I just wanted to comment **7** 

### that, under the life-cycle cost analysis and **8** 

### the payback period analysis, that the results **9** 

### for the analysis for level two for top-loaders **10** 

### as presented in the technical support document **11** 

### were overwhelmingly favorable to consumers, as **12** 

### well. **13** 

### MR. BROOKMAN: Thank you. **14** 

### MS. IYER: Okay. So moving on. **15** 

### Okay. So we now get into shipments analysis **16** 

### and the national impact analysis. **17** 

### MR. CYMBALSKY: And then we'll **18** 

### take a break just so that one can have the **19** 

### right frame of mind. We'll gear up for the **20** 

### MIA because I think that's where -- **21** 

### MS. IYER: All the questions are **22** 

### going to be. Well, the purpose of the

### Page 79

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### shipments analysis is pretty straightforward. **2** 

### It is to actually forecast shipments during **3** 

### the analysis period, which becomes an integral **4** 

### input into the MIA, and it also becomes an **5** 

### integral input into the national impact **6** 

### analysis. The shipments analysis actually **7** 

### produces not just the shipments data, but it **8** 

### maintains the stock of the entire commercial **9** 

### clothes washer population and looks at the **10** 

### different vintages so that we are able to **11** 

### attribute the relevant energy and water use **12** 

### factors to the stock while considering the **13** 

### total energy consumption. **14** 

### The national impact analysis **15** 

### actually tells us how much energy can be saved **16** 

### by moving to a higher-efficiency level at the **17** 

### national level. And we also look at the **18** 

### economic impact at the national level, which **19** 

### is determined by the NPV of the operating cost **20** 

### savings. **21** 

### MR. CYMBALSKY: If we could pause **22** 

### there, Joanna Mauer has a question. Joanna,

### Page 80

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### you are unmuted. **2** 

### MS. MAUER: Can you hear me? **3** 

### MR. CYMBALSKY: Yes, you sound **4** 

### good. **5** 

### MS. MAUER: Great. So I had a **6** 

### question about the energy and water use **7** 

### analysis. It looks like for front-loaders at **8** 

### efficiency levels three that total water use **9** 

### and especially hot water use are significantly **10** 

### higher than at level two, and I was just **11** 

### wondering if you could explain why we see that **12** 

### result? **13** 

### MS. IYER: Is that something, Tim, **14** 

### you want to take? **15** 

### MR. SUTHERLAND: Yes, sure. The **16** 

### result -- this is Tim Sutherland from Navigant **17** 

### Consulting. Part of that result may be that **18** 

### manufacturers choose different strategies to **19** 

### reach one efficiency level over another. So, **20** 

### for example, one manufacturer may decide, to **21** 

### get to the next tech level, I'm going to just **22** 

### increase my spin speeds or another

### Page 81

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### manufacturer may decide I'm going to adjust my **2** 

### water levels, that type of thing. **3** 

### So it's possible, for the sample **4** 

### that DOE looked at, that differences like that **5** 

### that occur in the relative amounts of hot **6** 

### water energy versus machine electrical energy **7** 

### versus drying energy, that may explain some of **8** 

### that. The other thing that factors in here at **9** 

### that level is the issue of the capacity. The **10** 

### larger machine at that level, there's a **11** 

### presumption that that machine will have larger **12** 

### load sizes that go into it. And so as used by **13** 

### consumers, that machine, from sort of a **14** 

### nominal energy perspective, not normalized for **15** 

### capacity or normalized for load size, on a **16** 

### per-cycle basis, that machine may also use **17** 

### more energy than the level just below it. **18** 

### Now, DOE did do some correcting **19** 

### for that, which Maithili will be able to **20** 

### describe in more detail. But probably I would **21** 

### say those two factors together would explain **22** 

### most of what we're seeing there.

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### MR. BROOKMAN: Thank you. **2** 

### MS. MAUER: Thank you. Yes, I'm **3** 

### interested in hearing a little bit more about **4** 

### the correction for the increase in capacity. **5** 

### MS. IYER: Sure, sure. So we **6** 

### wanted to make sure that, when we were **7** 

### conducting the LCC analysis, we were comparing **8** 

### apples to apples. So we normalized the **9** 

### increased tub volume with the baseline model. **10** 

### Now, in order to do that there's a **11** 

### question here about whether or not, just **12** 

### because the consumer sees an increase in **13** 

### volume, they're going to completely stuff it **14** 

### in or they're not going to. It's not clear **15** 

### that we can actually say that 100 percent of **16** 

### all the consumers are going to fill it **17** 

### completely. **18** 

### So because we did not have the **19** 

### data to know what percentage the consumers **20** 

### actually will make use of the increased tub **21** 

### size, we gave a 50-percent probability for **22** 

### them filling it completely and a 50-percent

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### probability for them not filling it **2** 

### completely, and we sort of adjusted it that **3** 

### way. Does that answer your question? **4** 

### MS. MAUER: So does that mean that **5** 

### the analysis is implicitly assuming that more **6** 

### total laundry is being washed at this **7** 

### efficiency level? **8** 

### MS. IYER: No. So to tell you -- **9** 

### so when I say they will fill it completely, **10** 

### we're changing the total number of cycles per **11** 

### year. So depending on how many, you know, how **12** 

### you're talking about the loading, the number **13** 

### of cycles will drop down, you know, in **14** 

### response to, you know, greater filling of the **15** 

### tub. **16** 

### MS. MAUER: Oh, so you have, when **17** 

### you've assumed that in 50 percent of cases **18** 

### consumers will fill the machine so they're **19** 

### washing more laundry with the higher-capacity **20** 

### machine, you are reducing the number of cycles **21** 

### per year? **22** 

### MS. IYER: Right, right. I mean,

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### in response to this, you know, the total load **2** 

### that is actually going through these washes **3** 

### remains the same, but, yes, the number of **4** 

### cycles drops. You're right. **5** 

### MS. MAUER: So you have taken into **6** 

### account fewer cycles -- **7** 

### MS. IYER: Yes. **8** 

### MS. MAUER: -- in that case in the **9** 

### analysis? **10** 

### MS. IYER: That's right. **11** 

### MS. MAUER: Okay, thank you. **12** 

### MR. BROOKMAN: Amanda? **13** 

### MS. GONZALEZ: This is Amanda with **14** 

### the California IOUs. I have questions about **15** 

### the assumption of the consumers, 50 percent of **16** 

### consumers filling the tub to capacity. Are **17** 

### you saying that, well, with that assumption, **18** 

### that if you don't fill it to capacity that **19** 

### you're using more energy for like a smaller **20** 

### amount of load? I guess I don't really **21** 

### understand the use of the 50 percent. **22** 

### MS. IYER: Yes. The 50 percent

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### is, basically, when you actually have no data, **2** 

### you have to assign a probability of its **3** 

### occurrence. And there are two possibilities, **4** 

### so we assigned equal weight to both the **5** 

### occurrences. That's all it means. **6** 

### MS. GONZALEZ: I guess I can only **7** 

### provide anecdotal experience, but if you walk **8** 

### into a laundromat, there are different tub **9** 

### sizes, and, typically, you have to pay more **10** 

### for the larger tub size. So it's to **11** 

### consumers' advantage to actually just choose **12** 

### the machine that would fit their load, as **13** 

### opposed to choosing a large machine and **14** 

### filling it 50 percent of the way. And in **15** 

### multi-use cases, there's typically a couple, **16** 

### maybe not as many units as in a laundromat, **17** 

### but I think you still have some variety. And **18** 

### so you would suspect some similar behavior. **19** 

### So -- **20** 

### MS. IYER: Right. No, you're **21** 

### right about that. Laundromats are a smaller **22** 

### market than the multi-family. And if we had

### Page 86

**202-234-4433 Neal R. Gross and Co., Inc.**  **1 data, we would actually very accurately 2 characterize exactly what that percentage**  **3 would be, but, you know, since we don't have 4 the data, this is the best we can do. So we**  **5 had to sort of stick with something. It's an 6 assumption, and we would welcome any new data**  **7 that will make the assumption better. 8 MR. CYMBALSKY: So I have a**  **9 comment. So if you walk into the laundromat 10 and all the smaller capacities are taken, do**  **11 you sit and wait or do you just use the one 12 available? I don't do this. You have an**  **13 anecdote, so I'll ask you. Would you wait 14 around, or would you just use the bigger --**  **15 MS. GONZALEZ: Great question. 16 This is Amanda with the California IOUs. I**  **17 don't have a great answer for that. In my 18 experience, I've never had that issue so . .**  **19 . 20 MR. CYMBALSKY: I just think it**  **21 may be a random event that we're trying to 22 characterize here. I'd just be careful about** 

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### putting too much -- or trying to get data **2** 

### around this. It would be great if we had it **3** 

### and, obviously, we'll accept it. But I think **4** 

### the circumstances around this are a little **5** 

### random. **6** 

### MR. BROOKMAN: Thank you, John. **7** 

### MS. IYER: Okay. So we're moving **8** 

### on. So the focus period for this analysis is **9** 

### when the standard kicks in, which is 2018, to **10** 

### 30 years out, which is 2047. And DOE **11** 

### developed its shipments model to forecast **12** 

### shipments for this period. We took into **13** 

### account two market segments while developing **14** 

### the model: the new construction which **15** 

### basically is triggered by multi-housing starts **16** 

### and replacements which is basically driven by **17** 

### retirement of older equipment. **18** 

### In order to calibrate our **19** 

### shipments model, we used historical data, **20** 

### basically developed a backcast through our **21** 

### shipments model, and used the historical data **22** 

### to calibrate it. And the discrepancy that we

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### found was used as the calibration point, and **2** 

### this sort of gave rise to a small segment, **3** 

### what we call as non-replacements, which is **4** 

### basically those units that are retired but not **5** 

### replaced. **6** 

### We found evidence that these were **7** 

### probably coming from conversions of rental **8** 

### properties into condominiums and townhomes. **9** 

### And we found data that kind of supported that **10** 

### assumption, so, you know, we have that as a **11** 

### calibration point in the model. **12** 

### Once we forecast the base case **13** 

### shipments, we calculate the shipments for the **14** 

### standards case. And in this scenario, we try **15** 

### to capture any price impact that we may have **16** 

### on the shipments. So DOE looked at past sales **17** 

### and price data to see if we could actually **18** 

### estimate a price elasticity to the shipments, **19** 

### and we found that the two, the prices and the **20** 

### shipments for commercial clothes washer **21** 

### shipments, are very weakly correlated. We **22** 

### could not find any evidence to support that

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### there was actually going to be an impact in **2** 

### the overall shipments. And so our default **3** 

### case was to keep the shipments the same as the **4** 

### base case shipments. **5** 

### However, while looking at the **6** 

### market share of front-loading and top-loading **7** 

### units, we implemented a cross-price **8** 

### elasticity. This particular view graph shows **9** 

### you what's happening with the market share of **10** 

### front-loaders and top-loaders. The red line **11** 

### is the top-loading, and the blue line is the **12** 

### front-loading. And you see that from a 40- **13** 

### percent market share today, front-loading is **14** 

### moving up to about 48 percent during the **15** 

### analysis period. **16** 

### The triangles and the square boxes **17** 

### that you see is the data that we got from **18** 

### AHAM, and we basically based our forecast on **19** 

### that. And we looked at product movement of **20** 

### the two, in order to establish the cross-price **21** 

### elasticity. We did not have enough data from **22** 

### commercial clothes washer units, so we had to

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### resort to using the residential clothes washer **2** 

### data for this. And DOE set the cross-price **3** 

### elasticity at 1.07, which basically means, for **4** 

### a 10-percent increase in the price of front**5** 

### loading washers, you'll see a 10.7 percent **6** 

### increase in the top-loading market share or **7** 

### vice versa. **8** 

### This particular graph is actually **9** 

### for top-loaders at efficiency level one and **10** 

### front-loaders at efficiency level two. And **11** 

### you don't see a difference in the standards **12** 

### case because there is really not price **13** 

### differential and, therefore, no impact in the **14** 

### market share. **15** 

### Here we have the results for the **16** 

### two product categories. The left one presents **17** 

### the top-loading washers and the right one the **18** 

### front-loading washers. You will see that the **19** 

### base case and two other, the yellow and the **20** 

### green lines, are sort of overlapping. These **21** 

### are actually the -- there's really no change **22** 

### between the base case and those two because

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### that's the level where you don't see a price **2** 

### difference. It is the orange line, which is **3** 

### basically the max tech level, that you see a **4** 

### shift in the market share between the two. **5** 

### MS. GONZALEZ: This is Amanda with **6** 

### the California IOUs. I apologize. Do you **7** 

### mind going back to slide 71 for a second? I'm **8** 

### just trying to understand this figure here. **9** 

### So it looks like, over time, we see an **10** 

### increase in the market share for front-loaders **11** 

### and a decrease in the market share for top**12** 

### loaders. **13** 

### MS. IYER: That's right. **14** 

### MS. GONZALEZ: They are **15** 

### approximately -- **16** 

### MS. IYER: It goes from 40 to 48, **17** 

### yes. **18** 

### MS. GONZALEZ: Can you comment on **19** 

### sort of that trend? Because it would sort of **20** 

### seem to imply that the market becomes, at some **21** 

### point, indifferent between a front-loader and **22** 

### a top-loader, which suggests that the

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### potential utility between the two is **2** 

### negligible in the market size. **3** 

### MS. IYER: This is basically based **4** 

### primarily on the data that we got from AHAM. **5** 

### And, you know, this is based on a fit, and we **6** 

### have seen the market moving in this direction. **7** 

### So that's pretty much what it is based on. **8** 

### MS. GONZALEZ: Okay. I guess I **9** 

### have a question then for DOE. If at some **10** 

### point, if not in this rulemaking, in a future **11** 

### rulemaking, if you would at some point **12** 

### reconsider combining product classes on the **13** 

### basis that the market doesn't seem to have a **14** 

### preference between the two? **15** 

### MS. HARIHARAN: This is Johanna **16** 

### Hariharan, DOE. We will take your comment **17** 

### into consideration. However, we cannot **18** 

### violate the statute at this point. **19** 

### MS. IYER: Okay. Moving on to **20** 

### national impacts analysis, so DOE calculates **21** 

### the national energy savings accruing from the **22** 

### new shipments that occur during the analysis

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### period of 2018 to 2047 and takes into account **2** 

### all the energy savings that can be had until **3** 

### the last unit shipped in that period dies out. **4** 

### The NPV is actually based on, is calculated **5** 

### both at 3 and 7 percent discount rates and is **6** 

### based on the operating cost savings. **7 8**  

### We talked about the base case **9** 

### efficiency distribution earlier, and I would **10** 

### come back to that because DOE wants to make **11** 

### sure that we accurately represent whatever is **12** 

### happening currently in the market. So there **13** 

### is a base case efficiency distribution. This **14** 

### table shows that for front-loading washers. **15** 

### Where we see base case, you'll see that we see **16** 

### the same market share that we showed a few **17** 

### slides ago and at each of the efficiency **18** 

### levels. This sort of helps us determine the **19** 

### shipment weighted efficiency factor, which is **20** 

### at 1.83 for front-loaders in the base case. **21** 

### And in the standards case, DOE implemented a **22** 

### roll-up scenario, which basically means when

### Page 94

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### you have efficiency levels, if the baseline is **2** 

### here and the DOE sets the standard over here, **3** 

### all of the levels below that roll up to that **4** 

### level at which the standard is set, but the **5** 

### rest of the market remains the same. And the **6** 

### other scenarios of where the standard might be **7** 

### set sort of gives you the shipment weighted **8** 

### efficiency for those levels. This is **9** 

### important because it kind of determines what **10** 

### energy and water use is attributed to the **11** 

### stock efficiency when you move forward in the **12** 

### calculations. **13** 

### We've come up for a comment here. **14** 

### This is basically to request any new data on **15** 

### base case efficiency distribution and shipment **16** 

### weighted data. Yes? **17** 

### MS. CLEARY: Jennifer Cleary with **18** 

### AHAM. I just want to go back to Amanda's **19** 

### comment about the slide 71. I'm not sure if **20** 

### I'm understanding your comment correctly, but **21** 

### it seems like what you were suggesting is that **22** 

### if the market were to get to 50/50 in terms of

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### market share for each type of product that **2** 

### that would demonstrate no market preference. **3** 

### Is that what you were suggesting? **4** 

### MS. GONZALEZ: It doesn't **5** 

### necessarily demonstrate no market preference, **6** 

### but it does seem to indicate that -- it **7** 

### sounded like previously that there might be **8** 

### negative utility associated with the front**9** 

### loaders, which one would then suspect that you **10** 

### would see less of them on the market. But **11** 

### given that there's increasing market **12** 

### penetration of it, it seems to indicate that **13** 

### there's either consumer or route operator **14** 

### distributor increasing preference for them. **15** 

### MS. CLEARY: Okay. So I can see **16** 

### that, but I think what you seem to be **17** 

### suggesting in your question to DOE was that if **18** 

### it reached 50/50 then that would mean one **19** 

### product class, and I think I disagree with **20** 

### that because if there's still both types of **21** 

### products on the market, especially in equal **22** 

### amounts, then that still demonstrates that

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### there's consumer utility in each one and that **2** 

### the differences between the two product **3** 

### classes still would exist. **4** 

### So I think that the premises upon **5** 

### which DOE has made its decision for product **6** 

### classes would still exist in that scenario, **7** 

### and so I would agree with DOE that they should **8** 

### maintain the two product classes in that **9** 

### instance and that they don't have the **10** 

### authority to violate the statute in any case. **11** 

### So, overall, AHAM is supportive of the two **12** 

### product classes now, as well as in the future. **13** 

### MR. BROOKMAN: Thank you, Jen. **14** 

### John Cymbalsky? **15** 

### MR. CYMBALSKY: I was just doing a **16** 

### little web searching here. So it appears that **17** 

### in Europe they actually sell horizontal access **18** 

### machines with top-loading capability. Not **19** 

### capability. It's a top-loader with a **20** 

### horizontal axis drum in it. To me, that means **21** 

### something. I'm not going to say what it **22** 

### means, but, apparently, they make these, they

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### sell them, and there must be a reason why they **2** 

### do that. Thank you. **3** 

### MS. IYER: Okay. Two more **4** 

### comments. Anything on rebound effect and any **5** 

### new data to better characterize cross-price **6** 

### elasticity or elasticity. **7** 

### So should we cover Trial Standard **8** 

### Levels now and then break? **9** 

### MR. CYMBALSKY: Let's go right up **10** 

### until -- **11** 

### MS. IYER: Okay, all right. So **12** 

### this is going to be, basically, a discussion **13** 

### of how DOE constructed the Trial Standard **14** 

### Levels. As we know, DOE likes to set **15** 

### standards for a particular Trial Standard **16** 

### Level, as opposed to a product class. **17** 

### So DOE picked Trial Standard Level **18** 

### to -- **19** 

### MR. BROOKMAN: Let's pause just **20** 

### for a moment. Ed, you have a question, and I **21** 

### think this relates to what we were discussing **22** 

### previously. Ed, please go ahead.

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### MR. OSANN: Yes. I was trying to **2** 

### get a question in while we were still on the **3** 

### shipments discussion. **4** 

### MR. BROOKMAN: Yes. Please **5** 

### proceed. **6** 

### MR. OSANN: Earlier, there was a **7** 

### depiction of market share of major **8** 

### manufacturers, and major manufacturers held an **9** 

### estimated 90 percent of the total market and **10** 

### smaller manufacturers in the remaining 10 **11** 

### percent. Does DOE have information on the **12** 

### market share of the two separate product **13** 

### categories that are proposed to be maintained? **14** 

### MR. BROOKMAN: Tim? **15** 

### MR. SUTHERLAND: This is Tim **16** 

### Sutherland from Navigant. And if I understand **17** 

### your question correctly, are you asking does **18** 

### DOE have sort of a breakdown of the market **19** 

### share but by product class? **20** 

### MR. OSANN: Yes. **21** 

### MR. SUTHERLAND: We have estimates **22** 

### of that through our discussions with

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### manufacturers, but, since that information is **2** 

### proprietary, DOE is not able to publish that. **3** 

### But that would be information that DOE would **4** 

### seek from AHAM, as well, in a more public **5** 

### fashion. **6** 

### MR. OSANN: Right. Can you find a **7** 

### way to get estimates of that into the record? **8** 

### MR. SUTHERLAND: I'm looking at **9** 

### Jennifer Cleary from AHAM. I think we would **10** 

### need to either -- DOE would need to find a **11** 

### published source of that information or one of **12** 

### the stakeholders, be it AHAM or an individual **13** 

### manufacturer, would need to submit that for **14** 

### the record, I think, in order for DOE to sort **15** 

### of get that information into the rulemaking **16** 

### record for this rulemaking. **17** 

### MR. BROOKMAN: Okay, thank you. **18** 

### MS. IYER: Okay. So to assemble **19** 

### the Trial Standard Levels, DOE picked TSL 1 as **20** 

### the level that sort of represents the least **21** 

### amount of change in design from both the **22** 

### product classes. TSL level two is set as an

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### intermediate level between levels one and **2** 

### three. And TSL level three is set at max **3** 

### tech. I think this table will describe it **4** 

### more fully. **5** 

### So we are characterizing the **6** 

### baseline for front-loaders and top-loaders **7** 

### both at efficiency level zero. TSL 1 actually **8** 

### has efficiency levels one for both front**9** 

### loaders and top-loaders. TSL 2 has efficiency **10** 

### level two for front-loaders and level one for **11** 

### top-loaders. And TSL 3 has levels three for **12** 

### front-loaders and level two for top-loaders. **13** 

### MS. GONZALEZ: This is Amanda with **14** 

### the California IOUs. I was wondering if DOE **15** 

### would be open to evaluating a new TSL level, **16** 

### which would be level two for top-loaders and **17** 

### level two for front-loaders. **18** 

### MR. BROOKMAN: Johanna? **19** 

### MS. GONZALEZ: I guess I can add **20** 

### justification. The -- **21** 

### MR. SUTHERLAND: I think, at this **22** 

### point, we could just take that comment into

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### consideration. **2** 

### MS. GONZALEZ: Okay. The reason **3** 

### that I ask for that additional analysis is **4** 

### that the level two for top-loaders yielded **5** 

### significantly larger national energy savings **6** 

### and national water savings while maintaining **7** 

### positive net present value for consumers and **8** 

### lower impact on small businesses. **9** 

### MR. BROOKMAN: Okay. Thank you, **10** 

### Amanda. **11** 

### MS. IYER: I think that sort of **12** 

### concludes -- okay. I have just one more slide **13** 

### which sort of provides the summary of NIA **14** 

### results. You would see that the savings in **15** 

### quads based on the 30-year shipments varies **16** 

### from 0.1 to 0.12, going from TSL 1 to 3. And **17** 

### the NPV at 7 percent discount rate goes from **18** 

### 310 million to 850 million. And you'll see **19** 

### that the shipments forecast sort of shows you **20** 

### how there is a slight shift in the market **21** 

### share between front and top at the level **22** 

### three.

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### MR. BROOKMAN: Questions here? **2** 

### Let's take a break. It's 11:00. Let's break **3** 

### for 15 minutes. This means we will not be **4** 

### taking a lunch break. We're already through **5** 

### slides 78, so we'll just press on until we're **6** 

### finished, which is not that many more slides **7** 

### altogether. Eleven o'clock now. We'll resume **8** 

### at 11:15. **9** 

### Please make sure and wear this **10** 

### badge visible in the building. There are **11** 

### restrooms on both ends of the halls, and **12** 

### there's a coffee shop down on the ground **13** 

### floor. Go down to the ground floor and go **14** 

### that way and that's where it is. **15** 

### Thanks. And we'll see you back **16** 

### here in 15 minutes. **17** 

### (Whereupon, the foregoing matter **18** 

### went off the record at 11:05 a.m. and went **19** 

### back on the record at 11:20 a.m.) **20** 

### MR. BROOKMAN: Let's resume. **21** 

### Nicole? **22** 

### MS. BUCCITELLI: All right. My

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### name is Nicole Buccitelli, and I'm going to **2** 

### present the manufacturer impact analysis. **3** 

### All right. As mentioned in the **4** 

### beginning of the presentation today, EPCA **5** 

### specifies that DOE must consider seven factors **6** 

### in determining whether new or amended **7** 

### standards are economically justified. The MIA **8** 

### assesses the economic impact of new or amended **9** 

### standards on manufacturers and the impact on **10** 

### competition within the industry, both of which **11** 

### are among the specific factors DOE must **12** 

### consider in determining whether a proposed **13** 

### standard is economically justified or not. **14** 

### Additionally, in the MIA, DOE **15** 

### identifies and estimates impacts on **16** 

### manufacturer subgroups that may be **17** 

### disproportionately affected by proposed **18** 

### standards. DOE also assesses impacts on **19** 

### direct employment, manufacturing capacity, and **20** 

### cumulative regulatory burdens. **21** 

### In terms of the methodology used **22** 

### in MIA, DOE employs both quantitative and

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### qualitative analysis methods. The cornerstone **2** 

### of the MIA is the government regulatory impact **3** 

### model, which is also known as the GRIM, which **4** 

### is used to analyze industry cash flows and **5** 

### industry net present value. Information **6** 

### gathered during manufacturer interviews is **7** 

### used to refine inputs to the GRIM and to **8** 

### inform subgroup analyses and qualitative **9** 

### topics. **10** 

### In a bit more detail, the MIA can **11** 

### be broken down into three phases of analysis. **12** 

### In phase one, DOE builds from the information **13** 

### developed in the market and tech assessment, **14** 

### chapter three of the TSD, supplementing this **15** 

### information with additional market research in **16** 

### order to create an industry profile. During **17** 

### this phase, DOE develops a set of industry**18** 

### weighted average financial parameters, which **19** 

### are later used as inputs to the GRIM. DOE **20** 

### also identifies important issues that require **21** 

### further investigation. **22** 

### In phase two, DOE develops a

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### preliminary industry cash flow model using the **2** 

### information compiled in phase one and initial **3** 

### inputs from engineering and shipments analyses **4** 

### and prepares an interview questionnaire which **5** 

### will form the basis of discussions with **6** 

### manufacturers. **7** 

### In phase three, DOE interviews **8** 

### manufacturers and uses information obtained **9** 

### from these interviews to refine the GRIM and **10** 

### to qualitatively assess impacts on employment, **11** 

### competition, manufacturing capacity and **12** 

### regulatory burden. **13** 

### During manufacturer interviews, **14** 

### DOE tries to get a feel for what manufacturers **15** 

### see as key issues related to this rulemaking **16** 

### for their business and for the industry as a **17** 

### whole. The following are the primary issues **18** 

### brought up by manufacturers. Manufacturers **19** 

### emphasize that the profit structure of the **20** 

### commercial clothes washer market, which **21** 

### emphasizes maximizing the number of turns per **22** 

### day, may conflict with increased levels of

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### product efficiency if efficiency increases **2** 

### lead to higher-capacity tub volumes or longer **3** 

### cycle times, both of which would reduce the **4** 

### total number of turns per day. Thus, **5** 

### manufacturers are constrained by a capacity **6** 

### and cycle time limits in any effort to **7** 

### increase the efficiency of their machines. **8** 

### Manufacturers express concern that **9** 

### energy efficiency efforts are inherently less **10** 

### effective in the commercial clothes washer **11** 

### market. They believe that the benefits of **12** 

### higher-efficiency machines are and will **13** 

### continue to be negated by consumer behavior **14** 

### patterns in this market, which reflect a lack **15** 

### of knowledge or caring about how to properly **16** 

### use the machines. **17** 

### Manufacturers stress that future **18** 

### energy conservation standards would have an **19** 

### adverse impact on cleaning performance and **20** 

### reliability and would thus compromise consumer **21** 

### utility. **22** 

### Some manufacturers emphasize that

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### technology has not changed since the last **2** 

### commercial clothes washer standard came into **3** 

### effect in January 2013 and that products **4** 

### currently at the max tech level are not truly **5** 

### commercial products. Finally, manufacturers **6** 

### expressed concerns relating to the **7** 

### disproportionate competitive impacts on **8** 

### manufacturer subgroups resulting from an **9** 

### amended standard. **10** 

### In order to estimate a lower and **11** 

### upper bound of profitability for the **12** 

### commercial clothes washer industry as a result **13** 

### of standards, DOE modeled two markup **14** 

### scenarios. The lower-bound profitability **15** 

### scenario which reflects the most severe **16** 

### manufacturer impacts is represented by the **17** 

### preservation of operating profit markup **18** 

### scenario. The upper bound profitability **19** 

### scenario corresponding to the least impact is **20** 

### represented by the preservation of gross **21** 

### margin percentage or flat markup scenario. **22** 

### MS. GONZALEZ: This is Amanda with

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### the California IOUs. Do you know off the top **2** 

### of your head what those two scenarios were, **3** 

### the markups? **4** 

### MS. BUCCITELLI: You mean the **5** 

### numbers? **6** 

### MS. GONZALEZ: Yes. **7** 

### MS. BUCCITELLI: For TSLs 1 and 2, **8** 

### the markups ended up being the same for those **9** 

### two different scenarios. And that was because **10** 

### there was very little difference in **11** 

### manufacturing production costs and I think **12** 

### only a slight difference in manufacturing **13** 

### production costs at TSL 2 for front-loaders, **14** 

### but that was sort of offset by the presence of **15** 

### the cross-price elasticity at TSL 2 between **16** 

### front-loaders and top-loaders. **17** 

### So they ended up being just the **18** 

### flat markup for TSL 1 and 2, which was 1.285. **19** 

### And for TSL 3, for the preservation of **20** 

### operating profit markup scenario, it was **21** 

### something, it was reduced slightly to 1.279, **22** 

### something like that.

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### The results of the GRIM DCF **2** 

### analysis are displayed here. As you can see, **3** 

### the industry net present values at TSL 1 and **4** 

### TSL 2 are very similar, around 118 million. **5** 

### And, accordingly, the changes from the base **6** 

### case INPV at TSLs 1 and 2 are very similar, a **7** 

### decrease of approximately six million or five **8** 

### percent from the base case. **9** 

### DOE estimated total conversion **10** 

### costs around 10 million at both TSL 1 and 2. **11** 

### At TSL 3, there's a substantial decrease in **12** 

### industry net present value to somewhere in the **13** 

### range of 28.8 to 33 million dollars, **14** 

### corresponding to a decrease of INPV between **15** 

### 91.2 and 95.4 million, and that's about 74- to **16** 

### 77-percent decrease from the base case INPV. **17** 

### At TSL 3, DOE estimated total conversion costs **18** 

### of 126 million. **19** 

### To summarize the GRIM results at **20** 

### the chosen TSL, which is TSL 2, INPV is **21** 

### expected to decrease by about 5 percent to 118 **22** 

### million from the base case. Because the

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### design options associated with TSL 2 relate to **2** 

### software-related control strategies, rather **3** 

### than changes to platforms, nearly all of the **4** 

### impacts on INPV at TSL 2 are attributed to the **5** 

### 10.2 million in product conversion costs **6** 

### associated with that TSL. **7** 

### MR. BROOKMAN: Amanda? **8** 

### MS. GONZALEZ: Yes, thank you. **9** 

### This is Amanda Gonzalez with the California **10** 

### IOUs. So product conversion costs as defined **11** 

### in the TSD are investments in research, **12** 

### development, testing, marketing, and other **13** 

### non-capitalized costs focused on making **14** 

### equipment designs that comply with the amended **15** 

### energy conservation standard. These are **16** 

### different than capital conversion costs which **17** 

### refer to investments in property, plant, and **18** 

### equipment needed to adapt or change existing **19** 

### production facilities. **20** 

### When we spoke about this **21** 

### previously, I think the focus was on capital **22** 

### conversion costs and in changing the

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### manufacturing setup. So my questions have to **2** 

### do with the top-loaders. The capital **3** 

### conversion costs are actually about $20 **4** 

### million, no, excuse me, about $12 million **5** 

### lower than the product conversion costs. So **6** 

### the product conversion costs for top-loaders **7** 

### for efficiency level two, which would almost **8** 

### double net energy savings and increase water **9** 

### savings significantly, the conversion costs **10** 

### for EL 2 looks to be about 51 million, as **11** 

### opposed to EL 1, which is 10 million. **12** 

### Can you explain what kind of **13** 

### research development, testing, marketing, and **14** 

### other non-capitalized costs would add up to 40 **15** 

### million additional dollars for the four **16** 

### additional design considerations associated **17** 

### with efficiency level two? **18** 

### MS. BUCCITELLI: I would like to **19** 

### look at the actual conversion cost numbers. **20** 

### I think I have them here. **21** 

### MS. GONZALEZ: Okay. It's Table **22** 

### 12.4.11 in the TSD.

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### MS. BUCCITELLI: So you're asking **2** 

### about the difference in product conversion **3** 

### costs between -- **4** 

### MS. GONZALEZ: Yes. So to **5** 

### clarify, for top-loaders, the difference in **6** 

### conversion costs between efficiency level one, **7** 

### which is what was proposed in the NOPR, and **8** 

### efficiency level two, which still has positive **9** 

### net present value and great benefits to the **10** 

### consumer, the difference between those two is **11** 

### $40 million. And I guess I just want to **12** 

### understand what kind of marketing design **13** 

### development is needed for the four additional **14** 

### design considerations, which are not software **15** 

### based. **16** 

### MR. SUTHERLAND: Yes, this is Tim **17** 

### Sutherland from Navigant. Without getting **18** 

### into the details of talking about individual **19** 

### manufacturers, one of the things when we're **20** 

### looking at this for the max tech levels for **21** 

### either product category, top-loading or front**22** 

### loading, is not all manufacturers produce

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### products at those levels. **2** 

### So in order to, if the standard **3** 

### were to be set at that level, for a **4** 

### manufacturer that doesn't currently have **5** 

### something offered at that level, if that is a **6** 

### level that would require a major platform **7** 

### overhaul, you would be talking about basically **8** 

### designing a new product from scratch. So **9** 

### there would be the years of engineering and **10** 

### testing and analysis and all of that that goes **11** 

### into designing a brand new product from **12** 

### scratch. **13** 

### MS. GONZALEZ: Do you mind if I **14** 

### interject? **15** 

### MR. SUTHERLAND: Sure. **16** 

### MS. GONZALEZ: This is Amanda with **17** 

### the California IOUs. So for top-loaders, ESL **18** 

### 1, efficiency level one, the one that was **19** 

### proposed, was actually a gap fill level. **20** 

### MR. SUTHERLAND: That's right. **21** 

### MS. GONZALEZ: There actually, **22** 

### there's -- 99 percent of the market is

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### comprised of the baseline for top-loaders. So **2** 

### whether or not DOE ends up adopting efficiency **3** 

### level one or efficiency level two, there's **4** 

### going to be complete market transformation on **5** 

### the manufacturer. **6** 

### So my question is why is there **7** 

### such a large difference between level one and **8** 

### level two when you're effectively going to **9** 

### have complete market transformation, and level **10** 

### one might as well, could conceivably be **11** 

### perceived as, like, a max tech since the **12** 

### market share between level one and level two **13** 

### are the same. **14** 

### MR. SUTHERLAND: Well, the **15** 

### differences that are there reflect the **16** 

### differences in what the manufacturers that we **17** 

### spoke with would need to do to achieve those **18** 

### levels. So to achieve -- so going from the **19** 

### current baseline to go up to level one, based **20** 

### on DOE's testing, we observed that **21** 

### manufacturers are most likely to achieve that **22** 

### through minor changes, software-related

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### changes. So the relatively lower $9.9 million **2** 

### product conversion cost is sort of reflective **3** 

### of that. **4** 

### To get up to level two requires a **5** 

### major platform change, major platform **6** 

### overhaul. **7** 

### MS. GONZALEZ: Right. So that **8** 

### would be part of the capital conversion cost, **9** 

### not the production conversion cost, correct? **10** 

### MR. SUTHERLAND: Well, because, on **11** 

### the capital side, you're going to have all new **12** 

### equipment, new drum machines, new plastics **13** 

### equipment, you know, new product line. But **14** 

### under what's covered under conversion costs, **15** 

### you're also going to have the R&D effort, the **16** 

### engineering, the testing, all of that that has **17** 

### to occur to design that max tech product. And **18** 

### I believe that that's considered conversion **19** 

### costs. So there will be both. **20** 

### MS. GONZALEZ: Right. I guess I'm **21** 

### just saying that the market right now has very **22** 

### limited options for efficiency level one and

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### efficiency level two. They're comparable in **2** 

### market share. So the manufacturer, regardless **3** 

### of whether or not DOE ends up adopting one or **4** 

### two, the manufacturer is going to have those **5** 

### complete product conversion costs. And I **6** 

### guess I'm just skeptical that the other few **7** 

### design items would add up to 40 million **8** 

### additional dollars in product conversion costs **9** 

### when you think about the categories under **10** 

### product conversion costs, which is R&D and **11** 

### testing. Like, you're going to have to test **12** 

### the product no matter what, whether or not **13** 

### it's EL 1 and EL 2. **14** 

### So I guess I just urge DOE to **15** 

### reconsider its analysis and maybe that those **16** 

### numbers, by comparing it to the residential **17** 

### clothes washer rulemaking or -- I apologize **18** 

### that I don't have great data for you. I just **19** 

### am surprised to see these numbers. **20** 

### MR. SUTHERLAND: No, thank you. **21** 

### And DOE does, you know, we get this **22** 

### information from the manufacturers during

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### discussion, but we pair that with what we've **2** 

### observed through testing and tear-downs as a **3** 

### reality check. So, you know, DOE is confident **4** 

### that the numbers that are presented here **5** 

### accurately reflect what we've acquired. So, **6** 

### you know, of course, DOE can take sort of a **7** 

### closer look at the details of that. **8** 

### MR. BROOKMAN: Amanda, just as a **9** 

### reminder, you seem like you've got a **10** 

### rationale. I presume you're going to put it **11** 

### all in detailed writing to the Department **12** 

### because that will allow them to examine your **13** 

### thoughts more closely. **14** 

### MS. GONZALEZ: Yes, we'll **15** 

### definitely be submitting comments. **16** 

### MR. BROOKMAN: Thank you. We're **17** 

### working on the webinar here, for those that **18** 

### are following us via web. Jen? **19** 

### MS. CLEARY: This is Jennifer **20** 

### Cleary. I just want to comment that I don't **21** 

### think we should underestimate testing costs, **22** 

### R&D, engineering. I mean, those are all

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### significant costs, and I think that, you know, **2** 

### without commenting on the accurateness of **3** 

### DOE's analysis, I think that what they're **4** 

### looking at, I can see how you might think that **5** 

### maybe the physical changes to the product or **6** 

### whatever are the only things that are going to **7** 

### add costs. But those other costs are very **8** 

### significant, and so I'm not sure we should be **9** 

### so surprised to see those numbers. **10** 

### MR. BROOKMAN: Okay. Let's **11** 

### proceed with the presentation. **12** 

### MS. BUCCITELLI: Okay. So at this **13** 

### point, DOE requests comment on the estimated **14** 

### magnitude of capital and product conversion **15** 

### costs. **16** 

### MR. BROOKMAN: Perhaps we've **17** 

### covered it. **18** 

### MS. BUCCITELLI: Yes. **19** 

### MR. BROOKMAN: Okay. Jennifer has **20** 

### another comment. **21** 

### MS. CLEARY: I just want to **22** 

### clarify, too. First of all, I shouldn't have

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### said accurateness, I should have said **2** 

### accuracy. That was embarrassing. Second of **3** 

### all, I also want to clarify that my comment **4** 

### was not intended to reflect on what you, you **5** 

### know, what you were saying, Amanda or Tim, on **6** 

### which one is correct. I'm just simply **7** 

### stating, from a general perspective, that **8** 

### those costs are real costs that are **9** 

### significant and, you know, I think it's **10** 

### important to make sure they're not **11** 

### undervalued. So I just want to be clear about **12** 

### the scope of my comment because we'll follow **13** 

### up in written comments as to, you know, how we **14** 

### think, you know, our comments on the analysis. **15** 

### MR. BROOKMAN: Okay, thank you. **16** 

### MS. BUCCITELLI: All right. In **17** 

### general, the primary manufacturer subgroup **18** 

### that DOE investigates in the MIA is the **19** 

### domestic small businesses subgroup. In order **20** 

### to identify small businesses in the commercial **21** 

### clothes washer industry, DOE used the size **22** 

### threshold established by the Small Business

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### Administration for the industry group **2** 

### containing commercial clothes washers. And **3** 

### this group is called the "Other Commercial and **4** 

### Service Industry Machinery Manufacturing **5** 

### group." For this category, the SBA has set an **6** 

### employee count threshold of a thousand or **7** 

### less. **8** 

### DOE searched several publically**9** 

### available databases in order to identify any **10** 

### domestic small business manufacturers. These **11** 

### databases included the SBA's own database of **12** 

### small businesses, DOE's Compliance **13** 

### Certification Management System, and various **14** 

### trade association lists, as well as Dun & **15** 

### Bradstreet. DOE did not identify any domestic **16** 

### small business manufacturers. **17** 

### DOE did, however, identify a **18** 

### different manufacturer subgroup. Although not **19** 

### a small business per the SBA definition, one **20** 

### manufacturer was identified as having **21** 

### significant commercial clothes washer market **22** 

### share but much lower revenues than its

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### diversified competitors. This manufacturer's **2** 

### business is highly concentrated in the **3** 

### production of commercial laundry products. **4** 

### DOE assigned this manufacturer its **5** 

### own subcategory, the "low-volume **6** 

### manufacturer(LVM)," to evaluate the **7** 

### disproportionate impacts of amended standards **8** 

### for commercial clothes washers on this **9** 

### manufacturer. Depending on the standard level **10** 

### chosen, DOE believes the LVM could be impacted **11** 

### more severely than its larger competitors due **12** 

### to its lower total production volumes and **13** 

### relative focus on the commercial laundry **14** 

### market, its ability to access capital, and, **15** 

### finally, pricing for key components, which **16** 

### relates to its lower production volume. **17** 

### DOE seeks comment on the number of **18** 

### small manufacturers of commercial clothes **19** 

### washers and on the potential impacts of **20** 

### amended standards on those small businesses **21** 

### and on the LVM. **22** 

### MR. BROOKMAN: No comments.

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### MS. BUCCITELLI: As part of the **2** 

### MIA, DOE analyzed the impacts of -- sorry -- **3** 

### impacts of amended standards on production **4** 

### workers within the commercial clothes washer **5** 

### industry. In the base case, DOE estimated the **6** 

### industry will employ 334 production workers in **7** 

### the standard year, which is 2018. **8** 

### At TSLs 1 and 2, the vast majority **9** 

### of design options consist of component swaps. **10** 

### Thus, DOE does not expect any changes in **11** 

### employment if total industry shipments remain **12** 

### stable relative to the base case, which they **13** 

### are forecasted to do. However, at TSL 3, DOE **14** 

### estimates a potential growth in employment of **15** 

### 30 workers due to an increase in the industry**16** 

### average labor content of equipment. **17** 

### DOE does model the scenario where **18** 

### manufacturers move production to foreign **19** 

### locations as a lower bound to the change in **20** 

### employment for the industry. Under this **21** 

### scenario, the commercial clothes washer **22** 

### industry would witness a decrease in domestic

### Page 123

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### employment of 334 workers. However, based on **2** 

### interviews, this does not appear to be a **3** 

### likely scenario for most manufacturers at TSL **4** 

### 2. **5** 

### DOE requests comments on expected **6** 

### changes to direct employment in the commercial **7** 

### clothes washer industry as a result of amended **8** 

### standards. **9** 

### DOE conducted an analysis of **10** 

### cumulative regulatory burdens impacting **11** 

### commercial clothes washer manufacturers in **12** 

### which it looks at other significant product**13** 

### specific regulations that will take effect **14** 

### three years before or after the 2018 **15** 

### compliance date of the amended energy **16** 

### conservation standards for commercial clothes **17** 

### washers. DOE also notes that amended **18** 

### standards for commercial clothes washers **19** 

### became effective on January 8th, 2013. **20** 

### Chapter 12 of the TSD provides a full **21** 

### description of cumulative regulatory burdens. **22** 

### Finally, DOE seeks input on the

### Page 124

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### cumulative regulatory burden that may be **2** 

### imposed on the industry either from recently**3** 

### implemented rulemakings for these products or **4** 

### other rulemakings that affect the same **5** 

### industry. **6** 

### All right. That concludes the **7** 

### manufacturer impact analysis section. **8** 

### MR. BROOKMAN: Those of you **9** 

### listening in, I guess we're having some **10** 

### technical difficulty, so we're trying to fix **11** 

### that right now. Hopefully, those of you **12** 

### joining us via the web, hopefully you now can **13** 

### see the slides and you can continue **14** 

### participating. **15** 

### Now we're going to proceed, and **16** 

### we're going to hear miscellaneous NOPR **17** 

### analyses. **18** 

### MS. IYER: Hello again. This **19** 

### Maithili Iyer with LBNL back to talk about the **20** 

### miscellaneous NOPR analyses. These are a set **21** 

### of standard analyses that we go through for **22** 

### any NOPR stage of the rulemaking.

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### I'll start with the consumer **2** 

### subgroup analysis. The purpose of the **3** 

### consumer subgroup analysis is to analyze the **4** 

### economic impact to certain groups who may be **5** 

### disproportionately impacted compared with the **6** 

### general user population when we conduct the **7** 

### LCC analysis. **8** 

### DOE identified small businesses as **9** 

### a subgroup which could potentially be impacted **10** 

### disproportionately. And by small businesses, **11** 

### you know, we mean groups such as small **12** 

### laundromats, you know, that could be included **13** 

### in this group. **14** 

### The method DOE adopted for **15** 

### analyzing impacts on this subgroup was to **16** 

### modify the LCC spreadsheet, specifically the **17** 

### discount rates that these businesses might **18** 

### experience. So we used a different discount **19** 

### rate that was applicable to this group to **20** 

### analyze the life-cycle cost and payback period **21** 

### for the group. We found that the subgroup was **22** 

### not disproportionately impacted by the

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### standard. **2** 

### Next on my list is emissions **3** 

### analysis. Given that we have electricity and **4** 

### gas savings from a proposed standard, DOE **5** 

### estimates emissions accruing from these **6** 

### savings through reductions in power sector **7** 

### emissions. There are four pollutants that DOE **8** 

### considers under this: carbon dioxide, sulfur **9** 

### dioxide, nitrogen oxides, and mercury. **10** 

### DOE also considers the upstream **11** 

### emissions or the emissions from the full fuel **12** 

### cycle that actually comes from production **13** 

### activities and fuel transportation to the **14** 

### power plants. And nitrous oxide and methane **15** 

### are the two emissions that are considered **16** 

### under this. The table over here basically **17** 

### tabulates the emissions reductions that we see **18** 

### for different Trial Standard Levels. **19** 

### DOE also monetizes the carbon **20** 

### dioxide emissions and nitrogen oxides, the NOx **21** 

### emissions. Basically, this is intended to be **22** 

### a measure to sort of see what kind of damage

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### is avoided through reduction in carbon dioxide **2** 

### and to monetize that value. For this, DOE **3** 

### used the most recent estimates, the SCC, or **4** 

### the social cost of carbon estimates that was **5** 

### developed by the U.S. government's Interagency **6** 

### subgroup, or task force I think it is called. **7** 

### And we actually consider four rates for which **8** 

### the social cost of carbon is evaluated. We **9** 

### also monetize NOx emissions. **10** 

### The table here provides the **11** 

### values, the monetized values in millions of **12** 

### dollars for all three levels for the four **13** 

### rates that are considered. You would see **14** 

### going from TSL level one to level three, for **15** 

### any of the rates considered we kind of double **16** 

### the savings. One thing to note over here is **17** 

### that these values do not make part of, are not **18** 

### included in the NPV that is calculated. **19** 

### Coming up for a comment, we **20** 

### request comments on the SCC values that are **21** 

### used. **22** 

### MR. BROOKMAN: Comments here?

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### MS. IYER: Moving on to utility **2** 

### impact analysis. The purpose of the utility **3** 

### impact analysis is to estimate water **4** 

### generation or capacity that would result from **5** 

### the savings that we experience from an amended **6** 

### standard. **7** 

### The method adopted for evaluating **8** 

### this is to take the national energy savings **9** 

### that comes out of the NIA, or the national **10** 

### impact analysis, and use a model which is **11** 

### modified to represent the impact of the **12** 

### current DOE standards. We take the savings **13** 

### and compare that to the AEO baseline scenario **14** 

### using the NEMS-BT model to calculate the **15** 

### potential savings. We find that we get about **16** 

### 55 megawatts of saved capacity from the **17** 

### proposed standard level two. **18** 

### Moving on to employment impact **19** 

### analysis. This is another thing I think -- **20** 

### MIA looks at direct employment impacts. There **21** 

### are also indirect employment impacts that sort **22** 

### of result from any dollars that are sort of

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### freed up because you're not using them on **2** 

### washing clothes, I guess. **3** 

### So DOE uses an input/output model **4** 

### called ImSET, or Impact of Sector Energy **5** 

### Technologies, to look at what sort of impacts **6** 

### we would see on employment. Basically, **7** 

### savings are, again, an input into this model, **8** 

### and what we found was there is very minor job **9** 

### creation, but it's not significant to make it **10** 

### into the labor statistics. **11** 

### We're coming up to the last piece **12** 

### of the analysis, which is the regulatory **13** 

### impact analysis. DOE performs the regulatory **14** 

### impact analysis as an alternative to a **15** 

### standard, or a mandatory standard. Since **16** 

### there are several efficiency programs in place **17** 

### that sort of try to achieve the same thing **18** 

### that an amended standard does, the idea is to **19** 

### see how well the non-regulatory options do **20** 

### vis-a-vis a proposed standard. **21** 

### For this analysis, DOE looked at **22** 

### consumer rebates, commercial customer tax

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### credits, voluntary energy efficiency targets **2** 

### like ENERGY STAR, manufacturer tax credits, **3** 

### early replacements, and bulk government **4** 

### purchases. The method adopted for evaluating **5** 

### all of these policy measures are basically **6** 

### taking the NIA spreadsheet and developing a **7** 

### market impact estimate from these policies **8** 

### based on the data that is available from **9** 

### several programs that the utilities or others **10** 

### may offer and to generate the national energy **11** 

### savings and the NPV through these **12** 

### alternatives. DOE found that none of these **13** 

### alternatives come anywhere close to a proposed **14** 

### standard of TSL 2. **15** 

### I think that brings us to the **16** 

### closing remarks. **17** 

### MR. BROOKMAN: Thank you. You **18** 

### have another opportunity for closing remarks. **19** 

### Jennifer? **20** 

### MS. CLEARY: This isn't a closing **21** 

### remark. This is Jennifer Cleary with a **22** 

### question. Actually, I should have asked

### Page 131

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### earlier. I think it would probably go to, **2** 

### which is can you just clarify for me, and I'm **3** 

### sure I should be able to get this from reading **4** 

### the rulemaking, but were experience curves **5** 

### used in the analysis? It was a little unclear **6** 

### to me in the discussion. **7** 

### MS. IYER: Yes, they were used. **8** 

### MS. CLEARY: Okay, thank you. **9** 

### MR. BROOKMAN: Additional comments, **10** 

### closing remarks before I turn it back to John **11** 

### for the how to submit written comments slide? **12** 

### MS. GONZALEZ: This is Amanda **13** 

### Gonzalez with the California IOUs. I just **14** 

### want to thank DOE and Navigant and AHAM and **15** 

### everyone else that participated. I know I had **16** 

### a lot of questions, so thank you for being **17** 

### patient as we walked through them. We will be **18** 

### submitting comments, so we'll be able to **19** 

### delineate our thinking and try to provide **20** 

### something that's useful and helpful to the **21** 

### Department. **22** 

### MR. BROOKMAN: Thank you. John

### Page 132

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### Cymbalsky? **2** 

### MR. CYMBALSKY: Okay. So thank **3** 

### you for everyone for joining in today. Thanks **4** 

### for the comments. We look forward to **5** 

### receiving in written form all the comments **6** 

### that were talked about today so that we can **7** 

### sharpen our pencils on the final rule. **8** 

### Here you'll see again the docket, **9** 

### and comment period will close on May 5th, **10** 

### 2014. So please get your comments in as soon **11** 

### as possible so that we can move forward with **12** 

### the rulemaking. **13** 

### Thanks again for coming, and get **14** 

### home safe. **15** 

### MR. BROOKMAN: Ed. Okay. We're **16** 

### still, we're still open for business, I guess, **17** 

### so what are your questions, Ed? **18** 

### MR. OSANN: Well, okay. I had **19** 

### thought that after the break the staff was **20** 

### going to be coming back with an enumeration of **21** 

### factors that were considered in the product **22** 

### class determination.

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### MS. HARIHARAN: This is Johanna **2** 

### Hariharan. Unfortunately, because there were **3** 

### a number of factors considered, we did not, we **4** 

### were not able to get that list over the break. **5** 

### However, we will be providing this list to you **6** 

### if you want to contact us directly. **7** 

### MR. OSANN: Okay. I have an **8** 

### additional question. The NOPR refers to the **9** 

### cycle-time assessments that are listed in the **10** 

### TSD chapter five. There are portrayals of **11** 

### these cycle times in graphic form, but there **12** 

### aren't the actual integers listed. These are **13** 

### relatively small numbers, and I'd like to ask **14** 

### if DOE can make available the actual integers **15** 

### that were the result of a cycle-time test. **16** 

### MS. HARIHARAN: This is Johanna **17** 

### Hariharan again. We will discuss this and get **18** 

### back with you. At this point, we don't have **19** 

### an answer for you. **20** 

### MR. BROOKMAN: Okay. Thank you, **21** 

### Johanna. Do you have any additional **22** 

### questions, Ed?

### Page 134

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### MR. OSANN: Yes. The NOPR notes **2** 

### that there was an exclusion of one outlier in **3** 

### the top-loading compilation of average cycle **4** 

### time. And I note that this particular model **5** 

### is a baseline model that -- and, as we've seen **6** 

### from other data, 99 percent of the products **7** 

### are in the baseline. Can DOE elaborate at all **8** 

### on why this particular unit was viewed as an **9** 

### outlier? **10** 

### MS. HARIHARAN: This is Johanna **11** 

### Hariharan. We do not have that data at this **12** 

### time, but we will look into this and get back **13** 

### to you. **14** 

### MR. BROOKMAN: Additional **15** 

### questions, Ed? **16** 

### MR. OSANN: Not at the moment. **17** 

### Thank you. **18** 

### MR. BROOKMAN: Thank you very **19** 

### much. So now this meeting is concluded. **20** 

### Thanks to all of you. **21** 

### (Whereupon, the foregoing matter **22** 

### was concluded at 12:01 p.m.)

### 202-234-4433 **Neal R. Gross and Co., Inc. Page 135**  A $0.31 53:16 $1047:6 51:4 $12 111:4 $19.55 53:17 $20 111:3 $22373:8 75:12 $38.8945:1 $3946:22 $4047:10 112:11 $5047:9 51:5 $9.9 115:1 a.m 1:11 3:2 102:18,19 abbreviated 28:10 ability 14:15 121:14 able 39:20 50:8

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82:22 50/50 94:22 95:18 51 111:10 55 128:16 5th 10:4 16:6 132:9 6 6.0 66:20 6.9 31:22 61 77:13 622:8 6295(q) 15:7 6311 13:4 68 2:10 7 7 93:5 101:17 7.1 76:3 71 91:7 94:19 74 109:15 77-percent 109:16 78 2:11 102:5 8 8.5 13:14 31:18 85 22:19 850 101:18 861 71:17,17 8E 1:10 8th 13:12 123:19 9NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com C E R T I F I C A T E

This is to certify that the foregoing transcript

In the matter of:

Before:

Date:

Place:

was duly recorded and accurately transcribed under my direction; further, that said transcript is a true and accurate record of the proceedings.

----------------------- Court Reporter 154

Energy Conservation Standards for Commercial Clothes Washers

US DOE

04-21-14

Washington, DC