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NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com UNITED STATES DEPARTMENT OF ENERGY

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PUBLIC MEETING ON ENERGY CONSERVATION STANDARDS FOR COMMERCIAL REFRIGERATION EQUIPMENT

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TUESDAY MAY 16, 2006

+ + + + + The meeting was convened at 9:00 a.m. in room 1E-245 at US Department of Energy Headquarters, 1000 Independence Avenue, SW Washington, DC, Bryan Berringer, moderating.

PRESENT:
BRYAN BERRINGER MIKE CHRISTOPHER THOMAS DePRIEST BILL GOETZLER RONALD LEWIS CHARLES LLENZA CHRIS MACMINN ARIS MARANTAN FRANCINE PINTO JIM RABA MIKE RIVEST SRIRAM SOMASUNDARUM DAVE WINIARSKI2

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MEMBERS OF PUBLIC PRESENT: KARIM AMRANE, Air Conditioning & Refrigeration Institute CHRIS BALESTRINI, Food Processors Association RICHARD BIENVENU, Ingersoll Rand/Climate Control Technologies DONALD BRUNDAGE, Southern Company Services ANDREW DELASKI, Appliance Standards Awareness Project THOMAS ECKMAN, Northwest Power and Conservation Council BRUCE HIERLMEIER, Zero Zone, Inc. LARRY HOWINGTON, Hill Phoenix MARSHALL HUNT, Pacific Gas & Electric WILLIAM KISTNER, Carrier Corp. SCOTT MITCHELL, Refrigeration and Thermal Test Center STEVEN NADEL, American Council for an Energy Efficient Economy BILL PAYNE, Johnstone Supply MARY SAROKA, Carrier Corp. ROBERT TANNER, Hill Phoenix BILL TRITSIS, Air Conditioning & Refrigeration Institute3

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com I-N-D-E-X Welcome..................... 3 Opening Remarks, Introductions, and Agenda Review .................. 4 Introduction and Analytical Methodology . . . . . 13 Market and Technology Assessment . . . . . . . . 18 Screening Analysis and Engineering Analysis . . 100 Markups for Equipment Price Determinations, . . 134 Energy Use and End-Use Load Characterization and Life-Cycle Cost and Payback Period Analysis. Shipments Analysis and National . . . . . . . . 184 Impact Analysis Revisions to ANOPR Analyses and LCC . . . . . . 195 Subgroup Analysis Manufacturer Impact Analysis . . . . . . . . . 197 Utility Impact Analysis, Employment Impact . . 205 Analysis, Environmental Assessment, and Regulatory Impact Analysis Other Issues and Comments/Closing Remarks . . . 208 Adjourn4

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com P-R-O-C-E-E-D-I-N-G-S 1 9:06 A.M. 2 MODERATOR BERRINGER: Good morning and 3 welcome. Can everybody hear me okay? Court reporter, 4 are you picking up all right? Great. 5 Good morning. This is the Energy 6 Conservation Standards for Commercial Refrigeration 7 Equipment Workshop today. I'd just like to welcome 8 everybody here. I will be facilitating today. My 9 name is Bryan Berringer. And I'll ask if you sit at 10 the table, if you have your company name, if you 11 haven't written your name on your little sign out 12 front, it will help the court reporter to record that. 13 Also, as you're speaking, we're going to 14 do informal introductions a little bit later on, but 15 make sure you speak into the microphone and state your 16 name before you speak, name and company name. That 17 will help the court reporter. 18 And then just this morning we're going to 19 have -- we'll introduce Ron Lewis, the supervisor of 20 the Regulatory Group. He's going to have some 21 opening remarks, along with Jim Raba, the team lead 22 for the Commercial Refrigeration. 23
So Ron? 24 MR. LEWIS: Good morning. I want to 255

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com welcome you all today on behalf of the Building 1 Technologies Program. I'm very hopeful for today as 2 we share with you our approach and thoughts on 3 developing the energy efficiency standards for the 4 commercial refrigeration equipment, that it's not a 5 monologue or a one-way street, that you'll grace us 6 with your thoughts and insights so that it's a 7 productive day for all of us. 8 In addition to this individual rulemaking 9 activity, how many of you have gone to the website and 10 have seen the report to Congress that's posted on our 11 website? Could I just see a show of hands, how many 12 of you? 13 (Pause.) 14 There are many activities under way, all 15 at the same time here. Some of them underway, some of 16 them soon to be started and it would be, I'm sure, 17 interesting reading for several of you to see the 18 kinds of things that we're working on these days with 19 energy being as popular of a topic as it is these 20 days, and we all have an opportunity to do something 21 about it and play a role in it. 22 I think you'll be impressed by the breadth 23 of the activities that are underway and the aggressive 24 schedule that we've posted for the next five years. 256

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com So we're hopeful that as we go through this day and 1 over the next many months to develop these standards, 2 everybody will consider the significant role that we 3 can play in helping the energy situation and helping 4 citizens of the country to save energy, and looking at 5 doing it in a logical, reasonable, and informed way. 6 So again I want to thank you on behalf of 7 the Building Technologies Program, and I'll turn it 8 back over to Bryan. 9 MODERATOR BERRINGER: Go ahead Jim, for 10 your welcoming remarks. 11 MR. RABA: Good morning and welcome to the 12 Department of Energy rulemaking on commercial 13 refrigeration equipment. Thank you, Bryan. Again, my 14 name is Jim Raba. I'm the team lead and joining me 15 today is team co-lead Charles Llenza. Also to 16 introduce to you some of the other teammates from the 17 Department of Energy: Ron Lewis, our supervisor from 18 Building Technologies. Francine Pinto, and Tom 19 DePriest will be here to join us later. Office of 20 General Counsel, Mark Friedrichs, Office of Policy 21 International, again part of the DOE staff. 22 And we're very pleased that we have such 23 a good team backing us up from both Pacific Northwest 24 National Laboratories and Navigant Consulting 257

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com Incorporated, expert engineers all. I'll introduce 1 them in a moment. But indeed, thank you again so 2 much, because this rulemaking is really something 3 we're going to share together. We have to do this 4 together to make it work for the manufacturers, for 5 the efficiency interests of our country, and we look 6 forward to with you as our shall we say teammates as 7 well in that regard. 8 Today's primary presenters will be Mike 9 Christopher and Aris Marantan from Navigant Consulting 10 Incorporated, and Dave Winiarski from Pacific 11 Northwest National Laboratory. Bryan Berringer, our 12 facilitator, will kind of be our conscience and our 13 guide to make sure we're on track, on time throughout. 14 And everybody gets a chance to speak and be heard. 15 So Bryan, I'll turn it back over to you 16 for some of the housekeeping things. 17 MODERATOR BERRINGER: Okay, everybody 18 should have gotten a handout package that has the 19 agenda. It should have the website where most of the 20 information is, it has the website at the bottom of 21 your package. It should have the slide presentations 22 today. Also in that package you'll a Federal Register 23 notice from today's which will also give you 24 information on how to send comments to the Department, 258

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com and we'll go over this a little bit more. 1 We also have a survey in the package. If 2 for any reason you have to leave early today, or 3 somebody comes in late, go ahead and fill that in and 4 leave it with Sheila in the back before you leave. 5 Again, what we'll do now at this time is 6 go around and we'll do some informal introductions. 7 This will not be on the record. Just as a courtesy, 8 I'll ask the people that came in, Steve, if you could 9 just put your name on, here's a marker. if you could 10 just put your names on those, I will be queuing people 11 throughout the day but it will help the court reporter 12 to record your name. Again, when you're speaking 13 please state your name and your company when making 14 remarks. I'll start with Karim, we'll go around the 15 table and then we'll go to the people in the audience. 16 (Off the record.) 17 MODERATOR BERRINGER: Okay, right now I'd 18 like to go over, everybody should have. Yes, this is 19 back on the record. Thank you. We just had 20 introductions. Again, hopefully in your package you 21 have an agenda and the presentation slides. 22 What I'd like to do is just sort of go 23 over that agenda, if there's any additions that need 24 to be put on there or if anyone has questions about 259

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com the agenda, now would be the time to bring that up. 1 So, we've had our introductions. We're 2 currently going over the agenda. After this, we'll 3 have opening remarks. If nobody has requested opening 4 remarks at this time, but we will give if people want 5 to have some, we'll give a couple of minutes to give 6 opening remarks if anybody wants to have opening 7 statements, then we'll have the introduction. 8 Jim Raba will be doing the introduction 9 and analytical methodology, talking about the process 10 and what type of analysis we're going to talk about 11 today, and the rulemaking process itself. 12 Then we'll have a presentation on market 13 and technology assessment. We'll have a morning break 14 at about 10:30, followed by screening analysis and 15 engineering analysis. Then a lunch break about noon. 16 Then we'll precede with the mark-ups for equipment 17 price determination, energy and use end-load use 18 characterization, life cycle cost and payback 19 analysis. Then at about 2:15, we'll talk about 20 shipments and national impact analysis, have a break 21 about 2:45. Continue on with a brief discussion about 22 revisions to the ANOPR analysis and life-cycle cost 23 subgroup analysis, followed by manufacturing impact 24 analysis at 3:15. At 3:30 we'll have utility impact 2510

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com analysis, employment impacts, environmental 1 assessment, regulatory impact analysis. Then at about 2 4 o'clock, we'll have time if we have other issues, if 3 anything comes up on the parking lot, and then closing 4 remarks. And then we plan on adjourning at about 5 4:45. 6 Is there anything that anybody sees needs 7 to be added or changed on the agenda? Okay. 8 Next point on the slide is the objective 9 and expectations. Again, we're here, this is sort of 10 the kickoff for this commercial refrigeration 11 workshop. We're going to talk about the process that 12 we use in the rulemaking and talk about the analysis 13 that we use. How many people, by a show of hands, is 14 this the first time you've been in a workshop at the 15 Department of Energy of this type, talking about 16 efficiency standards? Okay. Probably about half. 17 So welcome, and if you have as we go 18 along, if you have any questions, again my role here 19 is to just be neutral, focus on the process and task 20 at hand, and ensure that everybody has a chance to 21 participate. So we don't want anybody dominating, so 22 that sort of leads us to our ground rules. I put them 23 up here too if we need to come back to them during the 24 day, but they're also in your slides. 2511

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com One is listen as an ally. We need to be 1 short and concise as far as our statements. Get to 2 the point, and give other people, we want people to 3 share the air time, so we want to make sure that 4 everybody has an opportunity to speak. We ask that if 5 you have sidebar conversations, you need to take them 6 to the back of the room or outside the room if need 7 be. 8 Again, we need to focus on the issues at 9 hand and not personalities. We also ask everybody, we 10 speak one at a time for the court reporter. Again, 11 state your name and your company each time you speak. 12 If you have your cell phones on, if you could put 13 those to vibrate or turn those off at this time. And 14 then again, I've added to here, I'll be queuing and 15 we'll do follow-ups. If you raise your hand, I will 16 acknowledge you and if for some reason I don't -- give 17 me a little wave there . And again, we want everybody 18 to enjoy, to have fun today. We have to have open 19 communication back and forth. That's one of the 20 things we're trying to get out of this workshop is to 21 be a little less, a little bit more informal in the 22

process. 23 Just some housekeeping issues, we're going 24 to have, as we discussed in the agenda, we're going to 2512

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com have a morning and afternoon break; lunch break, if we 1 seem to be ahead of time, we can readjust that 2 schedule. Again, the cafeteria for those who have not 3 been here before, basically we're on the E corridor. 4 If you go down one level, go to your left. There's a 5 snack bar. Down on your right hand side, there's also 6 some vending machines down -- again, it's down one 7 level. You can either take the elevators here, just 8 down the hall, down one floor to your left, vending 9 machines, coffee at the snack bar. 10 At lunch time, if you want to go to the 11 cafeteria, you'll do the same thing. Go down one 12 level, follow the main corridor, go to your right. 13 You'll see escalators. Go up two escalators and that 14 will be the cafeteria. There are some signs on the 15 walls for that or if not, you can follow the crowd. 16 There's usually people going there. 17 So restrooms, if you go out the door, if 18 you go left or right at the end of the hallways, 19 there's restrooms. Public phones, if you need to use 20 public phones, right where the elevator bay is, you 21 passed it when you came in. There's a lobby area, 22 there's two pay phones there. There's also a house 23 phone there if you need to talk to anybody internal. 24 Again, there's no smoking in the building and again, 2513

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com everything that is going on today is being recorded 1 for the transcripts. If you need to get a copy of the 2 transcripts, you can see the court reporter during the 3 breaks or at the end of the meeting if you are 4 interested in purchasing a copy of the transcripts. 5 All right, at this time, I'm going to turn 6 it back to Jim Raba to -- I'm sorry about that. 7 At this time, what I'd like to do is does 8 anybody have any opening remarks that anybody would 9 like to do at this time, about three to five minutes? 10 No. Seeing none, now I'll turn it over to 11 Jim Raba to talk about the introduction and analytical 12 methodology. 13 MR. RABA: For some, this will be 14 familiar. For others, this is an introduction to the 15 rulemaking process we go through, through all the 16 rulemaking here at the Department of Energy. So I'll 17 do an overview of that process for you so you'll be 18 familiar with a roadmap of what's to come over the 19 next three years. 20 Indeed, the letters in Item 3, ANOPR means 21 Advanced Notice of Proposed Rulemaking, and the NOPR 22 in Item 4 refers to Notice of Proposed Rulemaking. 23 Today's framework of the public meeting 24 and the framework document mark the beginning of the 2514

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com energy conservation standards rulemaking process in 1 the development of these efficiency standards for 2 commercial refrigeration equipment. In particular, 3 we're going to be evaluating ice cream freezers, self4 contained refrigeration equipment and remote5 condensing equipment. 6 Today's public meeting is an informal way 7 to present the assumptions, methodologies and analyses 8 that the Department intends to use throughout this 9 rulemaking. Neither the public meeting today, nor the 10 framework document that you read, are intended to be 11 definitive statements with respect to any issue that 12 is yet to be determined. So moreover, we are inviting 13 your comments, any information, data, written comment 14 and especially your participation to guide our 15 analyses. 16 In general, the Energy Policy Act of 2005, 17 EPACT 2005, directed the DOE to issue by rule no later 18 than January 1, 2009, energy conservation standards 19 for ice cream freezers, self-contained equipment and 20 remote-condensing equipment. The Department of Energy 21 is holding a separate, but parallel, rulemaking for 22 the test procedures aspect of commercial refrigeration 23 equipment. 24 Now very important, how to submit your 2515

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com comments. They could be today in oral statement or 1 discussion. They could be written comments for sure 2 on different methods to get them to us, please note 3 that we'd like to have the docket number or 4 identification number with each and the comment cutoff 5 period is May 30th. Congress has placed upon us a 6 very tight deadline, so we appreciate your cooperation 7 with that. 8 Now an overview of the rulemaking process. 9 There are typically five major stages in any DOE 10 standards rulemaking. Each includes a Federal 11 Registernotice to place information in the public 12 view. The Department invites both oral and written 13 comments and also we may consult with stakeholders 14 individually, experts to clarify and issue or request 15 additional information on the subject. So today's 16 public meeting is that indeed. We're looking for your 17 comments to be part of the rulemaking. So we're 18 requesting from you that data information. 19 We encourage you to participate at every 20 stage of the five stages of the rulemaking process. 21 Now today, we're going to address the 22 efficiency standards development process and the 23 framework document. The next stage will be the 24 Advanced Notice of Proposed Rulemaking where the 2516

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com Department will present an array of the analyses and 1 again invite your comments. 2 On market and technology assessment, 3 screening analysis, engineering analysis, markups, 4 energy use and use load characterization, lifecycle 5 cost and payback analysis, shipments analysis, all 6 leading to national impact analysis. 7 Good information and hard data are hard to 8 come by. This is important. 9 The Notice of Proposed Rulemaking stage 10 will address any comments received at the ANOPR stage 11 and then refine the analysis from the ANOPR to the 12 NOPR stage, make adjustments, course corrections and 13 go from there. 14 In addition, the Notice of Proposed 15 Rulemaking, NOPR, will contain analyses for lifecycle 16 subgroups, potential impacts on manufacturers and 17 electric and gas utilities, impacts on employment, the 18 environment and any undue burden that would result 19 both in the energy conservation standards rulemaking 20 and the accumulation of other regulations 21 manufacturers may face. 22 Last, we've all worked so hard for the 23 final rule, it will surely be a happy day. However, 24 please note that the Federal Government will be closed 2517

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com January 1, 2009, so we're observing a federal holiday 1 that day. 2 (Laughter.) 3 So therefore, a realistic date for the 4 final rule will be sometime before December 31, 2008. 5 So it will be about three years from the final rule, 6 once it becomes a final rule by January 1st that the 7 energy conservation standards will take effect so this 8 will give manufacturers time to adjust in your 9 manufacturing practices. Also, please note that the 10 standard levels are effective for commercial 11 refrigeration equipment that is manufactured on or 12 after January 1, 2012. It will have no effect on 13 equipment manufactured before that date or distributed 14 in commerce after that date. 15 Now as we said before, the test procedures 16 for commercial refrigeration equipment are being 17 addressed in a separate rulemaking that we refer to as 18 the en masse test procedure rulemaking where 19 commercial refrigeration equipment is one of many 20 products and types of equipment that are covered under 21 EPACT 2005. We expect to see that finalized later 22 this year. 23 So here's how EPACT 2005 defines the term 24 commercial refrigerator-freezer and refrigerator2518

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com freezer which we will collectivelyrefer to as 1 commercial refrigeration equipment. It's not a 2 consumer product. It's not designed -- it's marketed 3 exclusively for medical, scientific or research 4 purposes. Operates in chilled, frozen and combination 5 frozen-chill variable temperatures, displays or stores 6 merchandise for the collection of materials 7 horizontally or semi-vertically and vertically. Has 8 transparent or solid doors, hinged doors or a 9 combination of those doors or no doors. It's designed 10 with pull-down temperature applications and connected 11 to a self-contained condensing unit or to a remote 12 condensing unit. 13 Item 7, is one we look at more thoroughly, 14 momentarily. I'm going to hand over to Mike 15 Christopher to discuss further these definitions and 16 the market and technology assessment. 17 Mike? 18 MR. CHRISTOPHER: Thanks, Jim. Again, I'm 19 Mike Christopher. I work with Navigant Consulting. 20 And I'm going to be talking about some definitions and 21 the market and tech assessment. 22 So as Jim mentioned, can everybody hear me 23 okay? 24 MODERATOR BERRINGER: Do you want to use 2519

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com the cordless? 1 MR. CHRISTOPHER: Yes. Can you all hear 2 me now? Okay. 3 Jim pointed out this Item 7 right here. 4 The language says it's connected to a self-contained 5 condensing unit or remote condensing unit. And we 6 construe this language to mean that so-called 7 secondary cooling systems are not included in this 8 definition. 9 And this is also consistent with the ARI 10 standard that's under consideration, the ARI 1200, 11 which specifically excludes these systems. We have 12 Item 11 here, if anyone has comments on whether or not 13 these systems should be excluded. 14 Bryan? 15 MODERATOR BERRINGER: Yes, at this time, 16 if -- one of the things we've done in the framework, 17 if you've looked at that, we have these particular 18 comments. As we go along through the presentation, 19 there will be some other comments. We'll take time to 20 ask that question and see if anybody has the responses 21 to give for the public record and move on. And we'll 22 also give a time at the end of each presentation to 23 sort of follow up with additional questions. 24 So at this time we're just seeing whether 2520

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com secondary cooling applications should be covered under 1 this rulemaking. I see Andrew Delaski. Please speak 2 into the mic. 3 MR. DELASKI: Andrew Delaski, Appliance 4 Standards Awareness Project. I have two questions. 5 One of the test procedures. Is this not an 6 appropriate time for that? 7 MODERATOR BERRINGER: Yes, why don't we do 8 that. Why don't we stop right here and ask if there's 9 -- if you want to do that, we'll go on Jim's 10 presentation, if there's questions on that and then 11 we'll proceed with -- I think if you have a question 12 about the test procedure for Jim. 13 MR. DELASKI: I'm interested in what the 14 Department's plans are for process for adoption of the 15 test procedure. You mentioned it as being considered 16 in terms of the en masse test procedure proceeding. 17 What opportunities are envisioned for public comment, 18 public input to test procedure selection for this 19 rulemaking, for the commercial refrigeration product 20 rulemaking? 21 MR. RABA: Jim Raba, Department of Energy. 22 The en masse test procedure rulemaking is a 23 traditional rulemaking the Department is undertaking 24 for the many test procedures that EPACT 2005 directs 2521

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com us to undertake. Some are already prescribed for us 1 and so we are kind of developing along the way. In 2 any event, for the commercial refrigeration and I 3 don't remember the exact procedure, but there will be 4 ample time in the regular rulemaking process where the 5 Notice of Proposed Rulemaking will be published in 6 ample time for comments and the like. 7 So that's in parallel at this time. We're 8 really following the directives of the energy policy 9 for 2005 on that test procedure at this time. We'll 10 be soliciting comments along the way, shortly, 11 actually. 12 MR. DELASKI: So just to be clear, Andrew 13 Delaski, Appliance Standards Awareness Project. The 14 procedure is the Department will issue a proposed 15 rule, a NOPR -- 16

MR. RABA: Yes. 17 MR. DELASKI: And that will be a two-step 18 public process? 19 MR. RABA: Yes, it will. 20 MR. DELASKI: And just to follow up, do 21 you have an anticipation for what sort of target you 22 have for a final rule in that proceeding? 23 MR. RABA: I understood the final rule, we 24 intend to publish that in November of this year. 2522

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MR. DELASKI: Okay. And then to come back 1 to the question, I have another question on this 2 current presentation, if it's appropriate. 3 MODERATOR BERRINGER: Let me ask if your 4 question is pertaining to Jim Raba's presentation? 5
MR. DELASKI: Yes. 6 MODERATOR BERRINGER: Okay, yes. 7 MR. NADEL: I just wanted to note here -- 8 MODERATOR BERRINGER: Please identify 9 yourself. 10 MR. NADEL: I'm sorry, Steve Nadel, ACEEE. 11 I understand there will be a separate test procedure 12 rulemaking, but because it will affect the analysis, 13 I wanted to point out that there's been quite a bit of 14 debate about the test temperatures to use to 15 particularly test refrigerators. The ARI test 16 procedure uses one temperature and CSA, EnergyStar, 17 CEC, everybody else uses another temperature and 18 obviously, you need to -- the test temperature will 19 affect the results and to the extent that you're doing 20 an analysis, I guess you may have to kind of make it 21 flexible so you can work with either temperature and 22 let that play out over the rest of the year. I just 23 wanted to point out that. 24 MR. RABA: Jim Raba, DOE. This is one 2523

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com area where we need your comments back in writing. We 1 welcome them from those gathered today. We'd like to 2 hear back from you. 3 MR. AMRANE: Karim Amrane, ARI. I guess 4 for Steve, the ARI 1200 has been modified to account 5 for that, so I think with the temperature, hopefully 6 it's resolved once and for all. 7 (Laughter.) 8 MODERATOR BERRINGER: Okay, we have a 9 comment from Chris. 10 MR. BALESTRINI: Chris Balestrini, Food 11 Products Association. 12 One of the questions that comes to mind 13 right away is an actual definition of commercial. I 14 believe what you're getting at here is point of sale 15 type of equipment, correct? Like refrigerators in 16 grocery stores, things like that. Whereas, in the 17 food industry, when you start talking refrigeration, 18 a lot of times we are seeing our freezers, 19 refrigerators, things like that in our manufacturing 20 facilities and probably you're thinking of it as an 21 industrial application. But the equipment that's 22 installed is commercially available. So there's been 23 some confusion in the food industry regarding what 24 this rulemaking session really is about. 2524

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com Okay, that's one of the reasons I was sent 1 here today was to ask this question for a little 2 clarity on when you talk about commercial equipment, 3 what you're really after. 4 From what I've gathered, talking to some 5 of the individuals here, I believe you're more point 6 of sale type of refrigeration type equipment and not 7 so much the industrial side in the manufacturing 8 facilities, correct? 9 MR. RABA: We'd like your comments in 10 writing on that. Jim Raba, DOE. 11 That's a good question, certainly. I 12 think a perception, at least now before this public 13 meeting today is that residential is like in your 14 home; commercial is in the supermarket, be it display 15 or storage, for example, or a food vendor of some 16 sort. So you may want to then in your written 17 comments, give us perhaps your understanding further 18 of what commercial means and give us some guidance on 19 that. We had not really approached that. The Energy 20 Policy Act itself divides up products and equipment 21 either residential or commercial/industrial, so in 22 that regard, we may want to find out more what your 23 thoughts are from your association as well. 24 Good question, thank you. 2525

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MODERATOR BERRINGER: Any other comments 1 pertaining to Jim's presentation as far as the 2 process? Again, we saw about 50 percent of the people 3 have not been involved in the process. Any other 4 questions for Jim on his presentation? 5 Okay, seeing none, Andrew, I think you had 6 a question pertaining the current slide, is that 7

correct? 8 MR. DELASKI: Yes. Andrew Delaski of 9 Appliance Standards Awareness Project. 10 I'm interested in the Department's 11 rationale for excluding secondary cooling applications 12 beyond simply the test method. 13 MR. CHRISTOPHER: I don't know that I have 14 a specific answer for that. Is there an answer you 15 all have? 16 I appreciate the question, but we'll take 17 that under consideration. I don't have a specific 18

answer. 19 MR. WINIARSKI: Dave Winiarski, Pacific 20 Northwest National Lab. I believe that part of that 21 rationale is basically trying to look at the 22 definition for -- which I think talks about being 23 connected to a self-contained condensing unit or to a 24 remote condensing unit. A connection basically, so 2526

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com we're talking primarily a direct expansion type 1 system, a secondary coolant loop provides this 2 intermediate loop and so it wasn't clear that that fit 3 in that definition. 4
MODERATOR BERRINGER: Steve. 5 MR. NADEL: Steve Nadel, ICEEE. I guess 6 I would say if there's a heat exchanger they are 7 connected. It's not like there's no relationship 8 between the two. My tendency would be to look broader 9 and include everything. I think one of the intents of 10 this provision in EPACT was to say these should be 11 federally-regulated products and not state-regulated 12 products. And if DOE narrowly construes what's 13 federally regulated, it could create a bit of a mess. 14 The other question I have is, I'm not 15 clear to what extent supermarkets tend to use direct 16 versus secondary coolant. Is this a small niche 17 product or is it most of the class and that could very 18 much affect the energy savings and whether in a 19 practical sense it makes sense to regulate this in 20 addition to the legal sense. 21 MR. AMRANE: Karim Amrane, ARI. I think, 22 of course, if we're looking at the test procedures 23 here, the test procedures specifically exclude 24 secondary coolant so we have an issue here. I mean 2527

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com there's going to be an issue in response to the test 1 procedures. So I think the intent when this language 2 was drafted was to exclude secondary coolant from the 3

process. 4 MR. BRUNDAGE: Don Brundage, Southern 5 Company. I have a concern, seeing as how the ARI 6 standards which will probably be the basis for the 7 test procedures excludes secondary that to include it 8 in this rulemaking under a tight schedule will make it 9 more difficult to achieve the deadlines. It may be 10 appropriate to do a separate rulemaking or effort to 11 cover those systems, but I would not want to do 12 anything to delay or hinder this current rulemaking. 13 MR. RABA: Jim Raba, DOE. On this, 14 clearly, there's some difference here. I would invite 15 your comments both in the en masse test procedures 16 when this is addressed there and certainly in the 17 standards rulemaking today as well. 18 MODERATOR BERRINGER: Yes, Andrew. 19 MR. DELASKI: Just a follow on. Andrew 20 Delaski, Appliance Standards Awareness Project. I 21 think it's important, as we go forward with this 22 rulemaking that the existing -- we don't have an 23 existing test method at all for ice cream freezers, I 24 believe. We can't allow the test methods, existing, 2528

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com pre-existing ARI test methods to determine the scope 1 of the rulemaking. 2 If that's where the equipment is and the 3 equipment not covered by the ARI test method, that's 4 where the bulk of the equipment installed and sold is, 5 then in any given class, then the Department needs to 6 consider what appropriate standards are in those 7 equipment classes, with or without an existing ARI 8 test method. 9 The Department has many options to set 10 standards: existing test method, expanding that test 11 method to cover additional equipment types based on 12 Department revisions, developing a new test method, 13 but also has the option of setting prescriptive 14 standards that require Department setting prescription 15 standards in the past. 16 I think there's a general preference for 17 performance standard; we should be heading in that 18 direction, but as an initial standard for products, 19 the Department has quite often in the past has set a 20 prescriptive standard initially. So let's not the 21 ARI, the existing ARI test method in our view should 22 not determine the scope of the rulemaking. 23 MODERATOR BERRINGER: Yes, Karim. 24 MR. AMRANE: Karim Amrane, ARI. Again, 2529

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com the test procedures, DOE test procedures cover ice 1 cream freezers, so it's covered in the test 2 procedures. 3 Now the secondary coolant are not and for 4 the purpose of making sure that the Department of 5 Energy completes its rulemaking on time, I guess I 6 would suggest that let's focus on the bulk of the 7 equipment which is direct expansion devices and then 8 see whether the Department can -- after this 9 rulemaking is complete, the Department can go ahead 10 and look at those secondary coolant systems. But I 11 think the focus, if you want to make sure that we 12 respect the deadline of January 1, 2009, I think we 13 need to focus on what we have today and the bulk of 14 the coolant that's been impacted here which is direct 15 expansion devices. 16 MODERATOR BERRINGER: Andrew. 17 MR. DELASKI: Just a quick follow-on. 18 Andrew Delaski, Appliance Standards Awareness Project. 19 So Karim, if ARI can provide data on the 20 market share, the market is split between this 21 equipment and the rest of the market, that would be 22 really helpful in being able to determine if this is 23 an important question or not. 24 MODERATOR BERRINGER: I saw Steve Nadel, 2530

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com did you have a follow-up? 1 MR. NADEL: Yes, in a similar vein, I was 2 wondering if someone in the industry could comment on 3 that in supermarkets. Roughly, are we talking -- is 4 the secondary 10 percent of the market, 40 percent of 5 the market? How big is it? 6 MODERATOR BERRINGER: Yes, Larry? 7 MR. HOWINGTON: Larry Howington, Hill 8 Phoenix. Based on our experience, it would be less 9 than 5 percent from our standpoint of what we sell. I 10 think that's probably true for the market in general. 11 MODERATOR BERRINGER: Yes, Chris. 12 MR. BALESTRINI: Chris Balestrini, Food 13 Products Association. 14 One quick thing about the test methods. 15 As far as temperatures for testing and all, I 16 recommend talking to Food and Drug Administration or 17 to USDA and ask them what their guidance is for 18 refrigeration temperatures and freezing temperatures. 19 Since most of this stuff is food products and all, it 20 makes a lot of sense to go to the regulatory agencies 21 there because they can give you the science that 22 they've done and the background at certain 23 temperatures and tell you where these units should be 24 operated. 2531

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MODERATOR BERRINGER: Great, thanks. 1 There's been a lot of discussion on the secondary 2 systems. Are there any other comments before we move 3

on? 4 Okay, Mike? 5 MR. CHRISTOPHER: Thanks, Bryan. Thank 6 you all for your comments. Certainly any decision 7 that will be made will be based on substantive data 8 that we get. We want to base it on the hard data. 9 So moving on, we want to talk about the 10 definition of ice cream freezer and we're mandated to 11 cover these products, but we're not given a specific 12 definition. So we propose the following, that the 13 term ice cream freezer means a commercial freezer that 14 is designed to operate at or below -5 Fahrenheit and 15 that the manufacturer designs, markets or intends for 16 the storing, displaying or dispensing of ice cream. 17 We'd like to get your feedback on this 18 definition. We want to point out that the 19 finalization of this definition will be handled in 20 that en masse test procedures rulemaking that's on21 going. So any comments that you submit certainly we'd 22 like to hear, but they will be forwarded on to that 23 rulemaking. I think it's still worthwhile to see what 24 comments we have on this definition. 2532

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com At this time we're just going to step 1 through these, we'll step through these five questions 2 one at a time, if people have responses for them. The 3 first one, 1.2, it says the Department is not aware of 4 any industry standard test method of ice cream dipping 5 cabinets and softserve ice cream extruders. The 6 Department requests information on what, if any, test 7 method exists for these type of equipment. The 8 Department seeks comment on how it should address 9 these types of equipment and rulemaking. Should 10 softserve extruders and ice cream dipping cabinets be 11 considered as ice cream freezers? 12 Any comments or responses to that? 13 Karim? 14 MR. AMRANE: Karim Amrane, ARI. I think 15 this kind of question is going to pop up along this 16 process today many times. What you're going to find 17 out with this type of equipment is that a lot of the 18 equipment today, made today is really some kind of 19 custom made. So we're going to find different ice 20 cream freezers. Minus 5 degrees is one temperature, 21 but ice cream freezers are -30 degrees as well. So I 22 guess for the Department the question is going to be 23 what should we do here? Should we cover everything? 24 Or should we cover the bulk? 2533

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com And I think ARI's position is that the 1 Department should look at what's available in the 2 market and then decide to focus on the majority, the 3 80 percent and forget about the 20 percent, because 4 otherwise, the Department is going to be getting into 5 things that are going to make very difficult for you 6 guys to finish the rule on time. 7 So I would suggest that this kind of issue 8 be addressed when you get market assessment and you 9 know what's going on as far as ice cream freezers and 10 focus on the majority of them which are going to be 11 mostly at -5 or zero degrees. 12 MODERATOR BERRINGER: Any response or any 13 other comments as far as Item 1.2 at this time? 14 Okay, Item 1.3, Karim sort of touched on 15 it a little bit. The Department seeks comment on the 16 definition of ice cream freezers. You can see on the 17 slide we've proposed something for ice cream freezers. 18 Do we have any comments on that at this time? 19 Andrew? 20 MR. DELASKI: Andrew Delaski, Appliance 21 Standards Awareness Project. 22 I wonder if the Department can tell us 23 where they took this definition from? 24 MR. CHRISTOPHER: I think this was a 2534

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com conglomerate of definitions from other rulemakings 1 from State Standards Canada. I believe that's where 2 it came from, based on -- yeah, Aris? 3 MR. MARANTAN: Aris Marantan, Navigant 4 Consulting. 5 To answer your question, it was largely 6 based on the definition provided by the Environmental 7 Protection Agency and their EnergyStar Program for 8 solid door commercial refrigerators. They have one 9 specifically for ice cream freezers. 10 MR. DELASKI: So I have one concern which 11 I'll raise and perhaps folks from the industry can 12 address it or from the Department or its consultants 13 which is is this definition comprehensive enough, that 14 is, a definition which sets an upper limit at -5 15 degrees, is there potential -- there could be some 16 risk that if one were to design and market one at -4 17 degrees that you could gain your definition and you 18 don't have a level playing field. 19 So the question I would propose back to 20 the industry and to the Department is is this a high 21 enough set point that we're not creating the potential 22 for a loophole. 23 MODERATOR BERRINGER: That was Andrew 24 Delaski. 2535

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com Aris? 1 MR. MARANTAN: I might be able to comment 2 on that. Just one thought, we have put a lot of 3 thinking behind the definition to address specifically 4 that point. And one thing that I would note is that 5 even without the definition of an ice cream freezer 6 specifically, any product that meets that definition 7 would automatically fall under the definition of a 8 commercial freezer. So it's partially addressed. 9 MODERATOR BERRINGER: Yes, Bruce? 10 MR. HIERLMEIER: Bruce Hierlmeier, Zero 11 Zone. Just in doing research for this it looked like 12 California's definition and Canada's definition for 13 ice cream freezer is more along the lines of a dipping 14 cabinet. They had things specifically with doors and 15 things much different than a display-type freezer or 16 a storage cabinet or perhaps a hardening cabinet, so 17 there are many different definitions just applied to 18 ice cream cases. 19 MODERATOR BERRINGER: Yes, Don? 20 MR. BRUNDAGE: Don Brundage, Southern 21 Company. I have a concern in the other direction 22 towards industrial, because having that "or" in there, 23 if it's used in storing or displaying or dispensing, 24 without some clarification, some industrial thing the 2536

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com size of a tractor trailer compartment would qualify. 1 So there needs to be something to define that it's at 2 retail a little better. 3 MODERATOR BERRINGER: Okay, any additional 4 comments on Item 13? 5
Steve? 6 MR. NADEL: Steve Nadel. To address Don's 7 comments perhaps a size restriction. As I recall, 8 there is some size restriction for a commercial 9 freezer in EPACT and maybe that could be used. 10 MODERATOR BERRINGER: Yes, Chris? 11 MR. BALESTRINI: Chris Balestrini, FPA. 12 Why is ice cream being singled out? I realize 13 they've done it in other agencies that they've singled 14 it out for specific reasons, but for the purpose of 15 this rule, does it necessarily have to be singled out 16 or can it be redirected in a guidance document that 17 would subsidize the actual rule? 18 Just a question. I mean -- 19 MR. MARANTAN: Aris Marantan, Navigant 20 Consulting. 21 To answer the question of why we're 22 addressing ice cream freezers specifically, it was 23 required in EPACT 05. Beyond that, the Department 24 just follows the directives in EPACT 05. 2537

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MODERATOR BERRINGER: Karim and then 1

Bruce. 2 MR. AMRANE: Karim Amrane, ARI. I mean 3 the main reason why ice cream freezers are listed is 4 because states started to set efficiency standards for 5 ice cream freezers so there was a need to fill up the 6 gap and have a federal standard for ice cream 7 freezers. 8 MR. BALESTRINI: Chris Balestrini again. 9 But that was -- I shouldn't say probably -- there's a 10 very good reason that that was done because ice cream 11 was put in the dairy standards and part of the PMO and 12 things like that and you know, you start getting into 13 a situation where are you going to list rulemaking for 14 every exception, you know? What I'm getting at is 15 trying to back up and broaden it a little bit to cover 16 more and then provide guidance documents for the rule 17 down the road. 18 It started happening in the food industry 19 where we started getting too specific with things and 20 we painted ourselves in the corner in some of our 21 rulemaking by not being broad enough up front to take 22 into account what some of the exceptions may be that 23 -- they may not be exceptions today, but 5 years, 10 24 years down the road, there may be new technologies and 2538

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com new exceptions that come into play. 1 So if you start focusing it too tightly on 2 the front side, you end up having to go through the 3 revision of the rulemaking and all that stuff down the 4 road that makes it very difficult to be nimble as new 5 technology advances. That's the only reason why I'm 6 bringing up the focus on the ice cream. 7 MODERATOR BERRINGER: Bruce was next, and 8 then Larry. 9 MR. HIERLMEIER: Bruce Hierlmeier, Zero 10 Zone. We're manufacturers of display-type equipment, 11 primarily freezers used in grocery stores for 12 displaying frozen food products, as well as ice cream 13 products which typically need a colder temperature. 14 In our industry, customers look to buy 15 equipment and they want to know how much energy to use 16 for a frozen product and they want to know how much 17 energy to use for a colder application, an ice cream 18 freezer. So in our industry, you have two ratings 19 typically. 20 In getting a little bit toward number 4, 21 our case is the same case. We sold a customer a 22 number of cases, we don't know how many they're going 23 to put ice cream in and turn the thermostat a little 24 lower an dhow many they're going to put frozen food in 2539

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com and run it a little warmer. So it's very similar in 1 the display area. The cases do basically the same 2 thing. It's just an operating temperature to preserve 3 the product so it doesn't melt on them. 4 Other ice cream cases where they're making 5 hardening cabinets and doing things like that, those 6 have very specific functions in the processing or 7 storage of ice cream compared to display. So number 8 4, we're not any different. It's the same cabinet and 9 maybe the ice cream cabinet is something that's gotten 10 out of control in its description and if we look at 11 the volume of true ice cream cabinets versus display 12 cabinets running 5 degrees colder, we'll find that 13 there aren't a lot of true ice cream cabinets out 14 there. 15 MODERATOR BERRINGER: Larry? 16 MR. HOWINGTON: Larry Howington, Hill 17 Phoenix. 18 I'm really paralleling what Bruce said. 19 We're in the same situation. In cases that we sell 20 for frozen food and we sell for ice cream actually 21 there's no distinction whatsoever in terms of the 22 product that we sell. It's just how the customer 23 actually uses it. 24 And we rate them for two loads for 2540

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com convenience for the customer because they're sizing 1 their compressor route based on that, based on how 2 they're going to use it. 3 The reality is we can have a single rating 4 for the cases, you know, it doesn't really matter 5 which one it is as long as there's a temperature to 6 find. And that rating would tell you how well the 7 case worked at the zero degree or the five degree 8 because it's pretty linear between the two. And 9 really there's an opportunity there to have a single 10 rating point for that kind of product, I think, as 11 opposed to two because you run two tests, but you 12 don't gain a lot of extra information from it in 13 reality. 14 MODERATOR BERRINGER: Okay, Dave. 15 MR. WINIARSKI: I was just going to -- 16 this is Dave Winiarski, Pacific Northwest Laboratory. 17 I was just going to ask a clarification, maybe two 18 clarifications. 19 The first is I wasn't clear from your 20 discussion if you were talking about both remote 21 condensing-type cases and self-contained cases where 22 the compressor would be built directly into the 23 refrigeration cabinet. If those would also be 24 designed both for freezer and ice cream applications? 2541

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MODERATOR BERRINGER: Yes, Larry? 1 MR. HOWINGTON: Larry Howington, Hill 2 Phoenix. 3 The bulk of what we sell is remote. We 4 occasionally self-contain for the convenience of the 5 customer. Generally, it wouldn't make really any 6 difference with the two temperatures we're talking 7 about. 8 We have other folks in the industry that 9 makes make different types of cabinets for ice cream 10 storage, and they really go into like the small shops 11 where the environmentals may not be as good and they 12 will run them colder, because they need to because of 13 those kinds of, that would be like in a small ice 14 cream shop, where you have ice cream cakes for sale. 15 That's where you may see a -15 or even a -30 on some 16 of the kind of holding cabinets. That gets into a 17 different category. But in general, for the display, 18 you wouldn't use a different one. 19 MR. WINIARSKI: Right, and someone asked 20 this because when we were first trying to look at 21 interpreting the language that's in the Energy Policy 22 Act, we were trying to understand for ourselves why 23 ice cream freezers were broken as a separate category. 24 And one part of that was that they had actually 2542

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com defined standards for self-contained freezers, with 1 and without doors, and it may have been that it was 2 just a decision was made that the ice cream freezer 3 category was somehow separate in terms of self4 contained products. 5 MODERATOR BERRINGER: That was Dave 6 Winiarski. Any follow on to those? 7 MR. CHRISTOPHER: I think the implication 8 and impact is that ice cream pertains, I think as you 9 were saying, only to the self-contained. As you'll 10 see a little further, the breakdown of the products is 11 such that our initial breakdown of products is such 12 that ice cream freezers are only on the self-contained 13 side of things. 14 MODERATOR BERRINGER: Okay, follow-ons to 15 that? I think we started to touch on Item 1.4, a 16 little bit. In what way are ice cream freezers 17 different from commercial freezers. The Department 18 requests feedback on whether they should establish 19 energy conservation for ice cream freezers that are 20 different or apart from other commercial freezers. I 21

see none. 22 I know that we kind of combined that there 23 was some discussion. And the last one, item 1.5. The 24 Department seeks comment on whether to extend energy 2543

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com conservation standards for self-contained commercial 1 freezers with doors and without doors to ice cream 2 freezers with doors and without doors respectively. 3 Yes, Bruce? 4 MR. HIERLMEIER: Bruce Hierlmeier, Zero 5

Zone. 6 I guess I didn't understand what that 7 meant if they're going to apply it, but provide it to 8 allow to use more energy because it's going to operate 9 at a colder temperature, so it would follow the same 10 format but say okay, but you get another kilowatt per 11 day or something because it's operating colder. What 12 was the intent of that statement? 13 MR. MARANTAN: Aris Marantan, Navigant 14 Consulting. 15 Bruce, that's exactly what we had in mind. 16 You know, the standards were prescribed in EPACT for 17 those self-contained units, and so one of the easier 18 things to do, if its possible and realistic, is to 19 extend those just as you described. 20 MODERATOR BERRINGER: Okay, any other 21 comments or questions on Item 1.5? Okay? 22 Seeing none, I'm going to turn it back to 23 Mike for his presentation. 24 MR. CHRISTOPHER: Okay, thanks Bryan. I'd 2544

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com like to go over the next major equipment category, and 1 that's self-contained equipment without doors. As you 2 know, EPACT covered self-contained refrigerators, 3 freezers, and refrigerator-freezers with doors and 4 left this rulemaking to cover those products without 5 doors. 6 So as we understand, this type of 7 equipment you'd probably find in convenience stores, 8 smaller grocery stores, maybe some restaurants where 9 you wouldn't expect to find a remote condensing 10 system. 11 In EPACT, we don't have a specific 12 definition for the term refrigerator-freezer. So 13 we're seeking input on using a definition here, taken 14 from CFR for a cabinet that's two or more 15 compartments, one of which is a freezer and one of 16 which is a refrigerator. 17 So we'd like to get comments. I'd like to 18 point out Item 1.6 applies to the first part of the 19 slide here, the definition for the self-contained 20 equipment without doors. And item 1.7 applies more to 21 that proposal of using the refrigerator-freezer 22 definition. 23 Bryan? 24 MODERATOR BERRINGER: So again, comments 2545

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com or questions about 1.6? What if any self-contained 1 commercial refrigeration equipment without doors does 2 not meet the EPACT 2005 definition? 3 That was the first part of the slide that 4 Mike just showed us. 5 (Pause.) 6 Bruce, yes. 7 MR. HIERLMEIER: That's not the definition 8 they have up there, is it? 9 MODERATOR BERRINGER: The definition is, 10 it's basically a refrigerator, a commercial 11 refrigerator-freezer or refrigerator-freezer without 12 doors that's connected to a self-contained condenser. 13 That's the definition. 14 MR. HIERLMEIER: Because in that 15 definition, we make commercial equipment, we make 16 freezers that operate above -8, but below -32. So I 17 mean that's where you have this broad range, if you 18 try to narrow it in. Somebody will probably make up 19 a piece of equipment that operates at a different 20 temperature for a unique set of circumstances. That's 21 what would be odd about the definition as shown for, 22 I guess -- 23 MR. CHRISTOPHER: The second definition 24 there? 2546

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MR. HIERLMEIER: Yes. 1
MR. CHRISTOPHER: Yes. 2 MR. WINIARSKI: I was going to comment. 3 That second definition, if I'm understanding the 4 comment here was for residential products. 5 MR. HIERLMEIER: Again, you wouldn't want 6 to start sucking that into the commercial area at all. 7 MR. WINIARSKI: Gotcha, okay. 8 MODERATOR BERRINGER: That was Dave 9 Winiarksi. 10 MR. AMRANE: Karim Amrane, ARI. I think 11 as Dave pointed out, this is a definition for 12 residential refrigerators and not appropriate. We 13 will get you some feedback on this. 14 MODERATOR BERRINGER: Great, any other 15 follow-on comments? 16 We'll move on to question or Item 1.7. 17 How could this definition be modified to the 18 application of self-contained commercial 19 refrigerations without doors? 20 Karim? 21 MR. AMRANE: Karim Amrane, ARI. Again, we 22 will give you some feedback on that. 23 MR. CHRISTOPHER: Okay, great, thank you. 24 Finally, we have the definition for remote 2547

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com condensing products. These are refrigerators, 1 freezers and refrigerator-freezers with and without 2 doors and these are the things that you find in your 3 supermarkets that have remote condensing racks. We 4 think we also, you might find them in some commercial 5 locations where you serve or store food. And again, 6 we're looking for comments here. 7 The first item we're really looking for 8

comments on whether or not it's appropriate to 9 regulate just the case here and exclude the remote 10 condensing rack from this rulemaking. 11 And the other two are the same questions 12 from the previous slide. One is, is there any 13 equipment that does not meet this definition and 1.10, 14 in that previous definition from the residential 15 electric refrigerator-freezers be adapted? 16 MODERATOR BERRINGER: Again, just to 17 reiterate on Item 1.8, the Department seeks comment on 18 regulating the energy consumption of refrigerated 19 equipment, but not the associated remote condensing 20 unit for remote condensing commercial refrigeration 21 freezers and refrigerator freezers. 22 Any comments or issues on that? 23 Karim? 24 MR. AMRANE: Karim Amrane, ARI. I guess 2548

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com it's the intent of EPACT. The intent of EPACT was to 1 cover just the display case, not the compressor rack, 2 so we agree with the interpretation that you have. 3 MODERATOR BERRINGER: Steve, you have some 4 follow-on? 5 MR. NADEL: Steve Nadel, ACEEE. I guess 6 I would think that it may be worth trying to cover 7 them for two reasons. One, as those of us who have 8 been at many of these workshops know a common refrain 9 is why regulate part of a system and not the whole 10 system as a major component here that wouldn't be 11 regulated and there may be some opportunities and 12 trade offs, but regulating the wider system that would 13 take more energy or allow a lower cost solution. 14 Second, there is the question about 15 federal versus state regulation. If we're only 16 regulating part of the system federally, does that 17 mean the states start looking at the other, does not 18 make sense to put this all together. 19 MODERATOR BERRINGER: Okay, thank you. 20 Any other comments? 21 Yes, Bruce? 22 MR. HIERLMEIER: Bruce Hierlmeier, Zero 23 Zone. When you start looking at racks, you open a 24 very wide opportunity of design and differences in 2549

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com design, compressors, condensing units, how they're 1 operated and that would be very challenging to put any 2 type of rules together in a number of years. Just as 3 you start getting different manufacturers together to 4 understand those systems and what is available, what 5 isn't available; it's technically feasible. It 6 doesn't work very well. 7 So we would recommend to not try to bring 8 those in at this point in time. 9 MODERATOR BERRINGER: Karim? 10 MR. AMRANE: Karim Amrane, ARI. 11 I would like to second what Bruce just 12 said. I think here and I'm going to speak here for 13 myself and I think we have some responsibilities with 14 respect to ARI to put in orders. We're responsible 15 for the language that went into EPACT 2005. And we 16 are responsible as well for the deadline that's in 17 EPACT 2005. 18 We're giving DOE three years to complete 19 this rulemaking. It we start including compressor 20 racks and other things, it's going to take 10 years 21 for DOE for this rule and that's not appropriate. 22 So I think the intent here was to cover 23 the disparate cases and we need to stick to what we 24 agreed to do. 2550

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MODERATOR BERRINGER: Okay, thank you. 1 Any other follow-on questions, comments? 2 Okay, and Item 1.9, is similar to the 3 earlier questions. What, if any, remote condenser 4 commercial refrigeration equipment does not meet the 5 EPACT 2005 definition? Any comments on that? Okay? 6 Seeing none, Item 1.10, how can the above definition 7 for electric refrigerator-freezers be modified to be 8 equitable to remote condensing commercial 9 refrigeration, refrigerator-freezers. 10 Any comments or questions on that? 11 Yes, Larry? 12 MR. HOWINGTON: Larry Howington with Hill 13 Phoenix. 14 In general, we address two units combined 15 into one, one medium temperature and one frozen. In 16 tests, we treat them as two separate units when we do 17 the test. So we do the test as prescribed, but we 18 test the medium as one and we test the frozen as one. 19 MR. CHRISTOPHER: I have a comment. I 20 think in rulemaking we have to consider anything in a 21 case as a single product, so I don't know, I'm not 22 exactly clear on it, but it may be that you can't, 23 that may be an issue to consider. If it's in the 24

case. 2551

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MR. HOWINGTON: Larry Howington with Hill 1 Phoenix. 2 It typically is a very small percentage of 3 the product that goes out. However, if you look at it 4 as one unit, and you test the two and add them 5 together, you will get the total energy for the unit. 6 So there is, you can use the same test standard and 7 determine the total energy consumption for that box, 8 if you will. 9 It's a very straightforward process to do 10 that, but it is also a very small percentage of any 11 product that you see on the market. 12 MODERATOR BERRINGER: Dave Winiarski. 13 MR. WINIARSKI: Just another, I guess, a 14 point of clarification. So you test both, you test a 15 single cabinet that has both components, a 16 refrigerator and a freezer and you operate only the 17 freezer section, only the freezer evaporator when you 18 do the test? 19 MR. HOWINGTON: If I can clarify, it's 20 done different ways. If it has an internal pressure 21 regulator, it could be operating at the frozen 22 temperature and to operate both units, in which case 23 you could test it by simply looking at it as one 24 cabinet. Or it actually could have separate lines 2552

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com running out. 1 In some cases, that's the way it works 2 also. So whichever way its done, you can actually use 3 the same ASRAE type test procedure, either testing as 4 if it were two and adding it or testing as if it were 5 one, depending on how its actually designed. 6 MR. WINIARSKI: So we can come up with an 7 operational energy consumption for that piece of 8 equipment per foot of display area or something like 9 that. Okay. 10 MODERATOR BERRINGER: I'm sorry. Bob? 11 MR. TANNER: Bob Tanner with Hill Phoenix. 12 I'd just like to add that that type of equipment is 13 very customized and is very low volume, and spending 14 all that time looking at test procedures for such a 15 small thing is not keeping in with what Karim has 16 mentioned and focusing on the bulk of what we have to 17 regulate here. 18 MODERATOR BERRINGER: Okay, any other 19 follow-on comments? 20 Andrew. 21 MR. DELASKI: Andrew Delaski of Appliance 22 Standards Awareness Project. A question of 23 clarification for the Department, which applies to 24 both your item, question 1.10 and back to the previous 2553

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com section, 1.7, which is you've asked for a more 1 clarified, a more detailed definition for commercial 2 refrigerator freezers, than is offered by the EPACT 3 language. But yet you've not asked for more specific 4 definition for refrigerators and for freezers. I'm 5 wondering why you've focused in on this particular 6 product, the refrigerator freezer product for more 7 specific definition and not the other two as well? 8 MODERATOR BERRINGER: We look to Jim or? 9 (Pause.) 10 Aris? 11 MR. MARANTAN: Aris Marantan, Navigant 12 Consulting. 13 We thought about the definition of 14 refrigerator and freezer and we saw a large variety of 15 definitions in the industry. We thought that it was 16 a little intuitive to figure out what that may be, and 17 if we need to define it, we're open to doing that. 18 MR. DELASKI: Okay, Andrew Delaski, to 19 follow up. 20 There is the definition, you do have some 21 definition, quite a detailed definition in EPACT, so 22 that gives you quite a -- more than intuition to go 23 on, I would say. You have a statute. 24 MODERATOR BERRINGER: Okay, thank you for 2554

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com your comments. 1 Any other additional comments on this 2 before we move on? 3 Mike? 4 MR. CHRISTOPHER: Okay, thank you. So 5 concluding that, we can move onto the ANOPR analyses, 6 the first of which is the market and technology 7 assessment. This is a very important analysis because 8 it provides some background information and foundation 9 for subsequent analyses. So the main outputs here, we 10 just got a flow chart that shows how it interrelates 11 with the preceding, sorry, the following two analyses. 12 The main outputs of the market and technology 13 assessment are product classes, baseline models, and 14 technology options, which are basically just a list of 15 any technologies that could conceivably be used to 16 approve the energy efficiency of these projects. 17 However, not all of those are going to be 18 practical. So we run a screening analysis, and the 19 ones that make it through we call design options. And 20 those feed into the engineering analysis along with 21 the product classes and the baseline models. 22 So the purpose of the market and 23 technology assessment really is to characterize the 24 market and the industry for this equipment. So as 2555

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com I've said before, we identify baseline models, product 1 classes, and we also identify manufacturers for this 2 industry. We estimate market shares and trends, and 3 we identify regulatory and other initiatives that may 4 have an impact on this equipment. 5 Now since this equipment has never been 6 the object of standards at the federal level, we're 7 making a general request for data for feedback for the 8 market and tech. assessment. So we're encouraging you 9 to submit any data that you have, any applicable data, 10 and we do have two specific requests here, Item 3.1 11 and 3.2. The first one, looking for information for 12 the market and tech. assessment about manufacturers, 13 what products you sell, what product class, and it's 14 very important that we know about the major 15 manufacturers as well as the smaller, the smaller 16 manufacturers. 17 And Item 3.2 is asking for input on 18 product shipments. We've had some discussion on, you 19 know, basing our analysis on these major product 20 classes, these major players, so getting shipment 21 information is going to be critical to determining 22 where the analysis goes forward. 23 So Bryan, if you'd like to address these 24

two? 2556

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MODERATOR BERRINGER: Yes, at this time, 1 we'd like to seek comments on Item 3.1 which is 2 information attributed to market assessment and in 3 particular, as Mike said, if there's any major or 4 small niche manufacturers pertaining to this -- the 5 market. 6 Comments here on this? 7 Karim? 8 MR. AMRANE: Karim Amrane, ARI. As ARI, 9 we will provide you some feedback as well. We will 10 comment. We do represent the majority of the remote 11 cases of manufacturers. For the self-contained, we 12 have some, but we don't recommend the Department to 13 reach out to those -- the manufacturers that are not 14 in the room today. 15 MODERATOR BERRINGER: Any other follow-up 16 on 3.1? 17 And 3.2 is talking about -- we're seeking 18 information as far as annual product shipments from 19 1990 to 2005, both domestic and end port corresponding 20 to weighted average efficiency for these shipments. 21 Is there any -- Karim? 22 MR. AMRANE: Karim Amrane, ARI. To the 23 extent that we have the information we will provide 24 you some information. However, I precaution you, we're 2557

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com talking about average efficiency. The ARI standard 1 was just published this year, so it can be very 2 limited information on efficiency, but the shipments, 3 we will get you what we have, which will probably not 4 go as far as 1990. But we'll get it to you. 5 MODERATOR BERRINGER: Thank you. Any 6 additional comments on these questions? 7 All right, seeing none. Mike? 8 MR. CHRISTOPHER: Thanks, Bryan. This 9 figure is a breakdown on equipment that's being 10 covered. So under the general heading here of 11 commercial refrigeration, we've got self-contained 12 equipment that's refrigerators, freezers and 13 refrigerator freezers, with and without doors and some 14 of these obviously are already covered by EPACT. 15 Those are shaded in this gray hache. So these are 16 refrigerators with doors, non-ice cream freezers with 17 doors, and refrigerator freezers with doors. 18 So the self-contained products that we're 19 covering are refrigerators without doors, ice cream 20 freezers with and without doors, and refrigerator 21 freezers without doors. And the remote condensing 22 products are the refrigerators, the freezers and the 23 refrigerator freezers with and without doors. 24 And we've just identified kind of a 2558

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com numbering scheme down here that will correspond to the 1 following -- I'm sorry, the upcoming slide, just to 2 keep things clear. 3 So the first major category, ice cream 4 freezers with and without doors, we can further break 5 those down into solid doors and transparent doors and 6 ice cream freezers without doors we can break down by 7 orientation, horizontal, vertical, semi-vertical. 8 Self-contained equipment without doors -- 9 refrigerators, freezers and refrigerator freezers. 10 Now we break all those down without doors as well into 11 orientation of horizontal, semi-vertical and vertical. 12 And remote condensing equipment with and 13 without doors, refrigerators, freezers and 14 refrigerator freezers were the ones with doors, again, 15 broken down, transparent and solid and the ones 16 without doors broken down by orientation. 17 So really this breakdown is our initial 18 thinking, the Department's initial thinking on how we 19 could break these products down and it's also really 20 kind of an all possibilities. We've got everything 21 broken down as far as you can go in terms of door type 22 limitation. And we understand that based on shipment 23 data or other analysis we may be able to combine or 24 eliminate some of these classes. 2559

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com We actually want to take this opportunity 1 to present ARI's proposed product classes as well and 2 they've taken a little bit different approach. We 3 want to contrast their approach with ours. And we've 4 prepared a back-up transparency here. 5 (Pause.) 6 It's that legible to everyone? No? 7 (Laughter.) 8 That's good? All right, I'll take you 9 through it here. So we've got these product classes 10 from ARI. They've got a draft operations manual and 11 where we break down first by condensing type, either 12 self-contained or remote, ARI is breaking down 13 initially by orientation and whether it's with or 14 without doors. 15 So they've got six million product 16 families, vertical with doors, vertical without doors, 17 semi-vertical without doors, service over-counter 18 which is not a product class that we proposed and then 19 horizontal with and without doors. 20 From there, they break it down by 21 condensing type, self-contained, or remote condensing 22 and then each of those are broken down into a 23 temperature category, medium, low, ice cream and 24 application. 2560

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com So that being said, we've got a request 1 for feedback and I'm going to try to bring this back 2

up. 3 (Pause.) 4 The intent here is to use this to foster 5 a discussion on these items. We want your feedback on 6 product classes. This is one of the huge problems we 7 have right now is defining these product classes. 8 MR. LEWIS: Mike, everybody has a copy of 9 the handout. It has the questions in there. 10 Why don't you project on the screen and 11 let them follow along? 12 MODERATOR BERRINGER: Are you ready to 13 discuss feedback now? 14 MR. CHRISTOPHER: Yes, let's do that. All 15 right, then we'll go ahead and go to item on your 16 slide, 28, item 3.3, the Department requests feedback 17 on the proposed classes for the commercial 18 refrigeration equipment covered under this rulemaking 19 and the criteria used for creating the classes. So 20 this is referring to classes. 21 So we have sort of two proposals on the 22 board. Any comments on the classes? 23 Larry? 24 MR. HOWINGTON: Larry Howington with Hill 2561

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com Phoenix. Just so that you understand kind of where we 1 came from and how we defined the classes, by looking 2 at the structure of the product version, the real 3 reason in doing that is that more closely related, we 4 felt to energy consumption by product family. The 5 structure of the case has to do with how much energy 6 consumption you're going to have and then you have 7 doors or you don't have doors, that will affect it 8 also, but really energy consumption is really kind of 9 a function of how the case is actually built and 10 that's what we use as our first breakdown. 11 And then we felt after that it was just a 12 matter of what temperature you're applying and how 13 you're operating it, self contained or remote. 14 MODERATOR BERRINGER: Any other comments? 15 I see Bruce and then Aris. 16 MR. HIERLMEIER: Bruce Hierlmeier, Zero 17 Zone. Just to reiterate what we talked about before, 18 we have the low temperature in the ice cream primarily 19 for our customers to be able to size their equipment 20 when they're running a little bit colder. That was 21 the intent here and then also so customers could 22 compare ratings amongst manufacturers so that they 23 would have some ability to determine who uses more or 24 less energy if they're going to store ice cream. So 2562

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com it wasn't necessarily to try and develop a different 1 product class as much as aid our customer base. 2 MODERATOR BERRINGER: Aris? 3 MR. MARANTAN: Aris Marantan, Navigant 4 Consulting. One of the things that we wanted to do in 5 our initial attempt to define product classes was to 6 put down on paper exactly what we thought was being 7 described to us in EPACT. And so we tried to include 8 every possible combination that we could envision and 9 when we did that, we saw a lot of different product 10 classes and we were really happy to see actually the 11 work that ARI has put together for the product 12 families. 13 As you'll see from the handout on slide 14 26, most of the product c lasses are in pretty good 15 agreement. We thought of the same things, the 16 operating temperature levels, the operating mode. One 17 of the things we didn't think about was, of course, 18 the service over-counters as Mike mentioned earlier. 19 We also in looking through the two 20 different ways of describing product classes, we also 21 noticed that there were a couple of things that we had 22 that didn't show up here. Do you remember which one 23 that was specifically? 24 MR. CHRISTOPHER: Yes, I think one of the 2563

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com major ones was we thought there maybe should be a 1 semi-vertical with doors. 2 MR. MARANTAN: The possibility of having 3 a semi-vertical with doors. 4
MR. CHRISTOPHER: Yes. 5 MR. MARANTAN: So as I've heard just now, 6 a lot of thought has been put into this in describing 7 the energy consumption of these things and what's a 8 large portion of the market and maybe what's not. So 9 we're happy to see this. 10 MODERATOR BERRINGER: Bob? 11 MR. TANNER: Bob Tanner with Hill Phoenix. 12 In developing this, none of our members could identify 13 anyone that manufactured that type of product in semi14 vertical with doors, so we just eliminated it from the 15 mix. 16 MODERATOR BERRINGER: Thank you. Any 17 other comments? 18 Yes, Scott? 19 MR. SMITH: Scott Mitchell, Southern 20 California Edison. 21 The first question I had is why the 22 refrigerators with doors and refrigerators-freezers 23 with doors are not included? Is that because they're 24 covered by another standard? 2564

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MR. CHRISTOPHER: The refrigerators? 1 MR. SMITH: The ones that were graded out? 2 MR. CHRISTOPHER: Yes, sorry. I have a 3 little key up here. Those are the ones that are 4 covered by EPACT. 5 MR. SMITH: Okay, I just wanted to clarify 6 that. 7 MR. CHRISTOPHER: Those are the self8 contained with doors. 9 MR. SMITH: Okay. And then secondly, 10 we've done a lot of work on open display cases. I 11 worked in the Refrigeration and Thermal Test Center. 12 Many of you are probably aware of that organization. 13 We do a lot of testing on refrigeration equipment. 14 And one of the things we've learned is that about 85 15 percent of the energy consumption of open cases comes 16 from entrainment of ambient air into the cases. And 17 I know that we're looking at regulating the actual 18 equipment that's being used to make sure that it's the 19 most efficient equipment, but who is going to look at 20 whether stores choose a doored case over an open case? 21 If we can reduce the energy consumption 85 22 percent by using a different type of case, is that 23 going to be part of the standard? 24 MR. CHRISTOPHER: I mean we're mandated to 2565

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com regulate the products that are sold. It's not our -- 1 Karim? 2 MR. AMRANE: Karim Amrane, ARI. I don't 3 think it's DOE's role to ban or to restrict products. 4 It's up to the store to decide which products makes 5 sense for the store. It's not for DOE to decide which 6 equipment should be sold, open door, closed door. 7 MR. LEWIS: Ron Lewis, DOE. The 8 empowerment and authority that we have is to regulate 9 the manufacture of products. We can't regulate the 10 application where they're used. We don't around to 11 buildings and we don't have people that go out in the 12 field and check to see what's being used. What we do 13 is make it legal to manufacture products that meet a 14 certain minimum efficiency to be manufactured and then 15 distributed, but it has nothing to do with what people 16 choose as a final product in an application. 17 So we're trying to with the statutes that 18 require us to cover certain products, eliminate the 19 least efficient products, but the choices that are 20 there, as far as products and applications that go in 21 that matrix and the complexity of all the different 22 selections would become so complex that we'd never be 23 able to enforce that. 24 MR. RIVEST: Mike Rivest, Navigant 2566

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com Consulting. This goes to the basic understanding of 1 what a product class is. A product class is a 2 grouping that represents a different utility to the 3 consumer. And that utility has a consequence on it, 4 energy consumption. So yes, we could save more energy 5 by banning open cases, that would reduce the utility 6 to the supermarket to sell certain products. So 7 that's why it's done that way. 8 It might consume less electricity to be 9 completely vertical as opposed to semi-vertical. 10 MODERATOR BERRINGER: Scott, did you have 11 any follow up to that? 12 MR. MITCHELL: Scott Mitchell, Southern 13 California Edison. 14 To the manufacturers, as far as open 15 freezer cases, is that a big portion of sales? 16 MR. HOWINGTON: Larry Howington, Hill 17 Phoenix. It is not a big portion of sales. If you 18 want to put it in the final, we'd be glad to quick 19 producing them. 20 (Laughter.) 21 I'm just kidding. 22 (Laughter.) 23 It's something that a few folks believe it 24 really sells certain types of products, aids them in 2567

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com selling product in stores. So we still provide them 1 because of that, but it is a very low percent. 2 MR. MITCHELL: Okay, thank you. 3 MODERATOR BERRINGER: Andrew, did I see 4 your hand? 5 MR. DELASKI: Andrew Delaski, Appliance 6 Standards Awareness Project. And this is for whoever 7 can answer it, but Larry, you mentioned that the semi8 vertical with door, if you eliminated that class from 9 the ARI product of classes, in comparison to what the 10 Department has suggested in this slide, are there any 11 other product classes or is that the only one that was 12 eliminated? 13 MR. HOWINGTON: Larry Howington. That is 14 the only one that I'm aware that was eliminated. And 15 as you can see, when you put a door on, the nature of 16 the air curtain becomes less relevant, so that's 17 really why -- we couldn't determine any one that 18 actually made a product like this. 19 MR. DELASKI: Thank you. 20 MODERATOR BERRINGER: Chris? 21 MR. BALESTRINI: Chris Balestrini, Food 22 Products Association. 23 Am I to understand that what you're doing 24 here is you're saying to the manufacturers these are 2568

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com what you have to manufacture your equipment to as far 1 as efficiencies and stuff like that, but then once it 2 gets into the hands of the person that buys the 3 equipment, they have no culpability to maintain the 4 efficiency of the equipment? 5 You know, it's basically all going to be 6 put on the manufacturers and there's going to be no 7 way to monitor that people are taking care of their 8 compressors properly and everything like that? You 9 know, there's a whole piece there, if you're really 10 trying to save energy, there's got to be some kind of 11 guidance or policing of it, you know, to make sure 12 that the energy efficiency is being maintained. 13 I pity the manufacturers in this situation 14 because they're the only ones that have the gun 15 pointed to their head and nobody else is culpable. 16 And it's probably not my place to defend them, but -- 17 (Laughter.) 18 I can understand their frustration with 19 the way this is coming down because it's all pointed 20 at them and there 's nobody else that is being held 21 culpable in this whole thing. 22 Is there any plan to try and have any kind 23 of monitoring, any part of -- like -- maybe an EPA 24 piece to it? Somebody that gets out into these 2569

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com grocery stores that audits them and stuff like that, 1 asking for refrigeration efficiency records be 2 maintained. 3 You know, you can take advantage of other 4 agencies that are in there inspecting grocery stores 5 and stuff like that. Then maybe there be somewhat of 6 an enforcement piece to this somehow. 7 MR. LEWIS: Ron Lewis, DOE. Chris, those 8 are all excellent comments and we appreciate that, 9 because that's what we're here for is looking for the 10 opportunities to save energy. We have certain 11 authority and we're charged by statutes to do certain 12 things and the limit of those statutes is to limit the 13 manufacture of products that are sold is not to dilute 14 or dismiss those things that you're talking about as 15 being very important. 16 There are a couple of bright spots out 17 there, hopefully, that help to influence those. One 18 is the cost of energy itself that people are more 19 motivated as energy costs go up, to look at getting 20 the max energy efficiency that they can. I guess from 21 the food products side of things, there is the point 22 of spoilage and functionality, that if things become 23 very inefficiency, that there's the point of its 24 impact on its function, its functionality of keeping 2570

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com things cool and safe and those types of things. 1 The other point is there are many, many 2 parts of the energy industry. There are ESCos out 3 there. There are a lot of companies that make their 4 living by trying to help people to reduce energy. 5 There are a lot of utility companies that have 6 programs and have expertise. There are a lot of 7 universities that have extension services. There are 8 lot of people out there that can help if somebody is 9 motivated and wants to save energy, but we just are 10 not equipped or are we empowered to go out and inspect 11 and say you need to vacuum your coils, or you need to 12 tune something up. That's just not within our role 13 and responsibility here. But we do respect and 14 appreciate very much your passion for things being 15 maintained, not just being purchased that are 16 efficient. 17 Thank you for those comments. 18 MR. BALESTRINI: Can I offer one other 19 thing? 20 Chris Balestrini again. Would it be 21 within everybody's best interest to request and 22 starting with manufacturers, request some kind of 23 sticker or notification be attached to the machinery 24 that -- of a maintenance schedule for maintaining your 2571

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com efficiencies and some kind of recommendation about 1 this unit should be serviced every 6 to 12 months, 2 whatever, to maintain the efficiencies that -- I don't 3 know you guys necessarily have that kind of 4 information. 5 You need to do studies as you get new 6 equipment, but I mean recommending a maintenance 7 schedule may be in everybody's best interest as a 8 piece of this, you know, like should include something 9 in the rulemaking saying should include a maintenance 10 schedule for maintaining efficiencies or something 11 like -- some kind of direction that way. 12 MR. LEWIS: Again, we're limited on what 13 we're empowered to do legally and what we can direct 14 manufacturers to do. There are a lot of voluntary 15 programs that are out there. There are a lot of 16 market -- organizations like CEE -- market 17 transformation, energy efficiency advocacy groups that 18 -- a couple of them right here that have a lot of 19 guidance on their sites and have a lot of outreach. 20 There are a lot of ways to help to educate people and 21 help to make them aware of the significance of things, 22 but unfortunately DOE's empowerment and role is not 23 that. 24 FTC has labeling responsibilities for some 2572

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com things. We set the standards of test procedures 1 and that's really enough of a charge to us right now, 2 but again, not to dismiss or take away from the good 3 comments that you have and the desire for everybody to 4 be aware and save energy where they can. 5 MODERATOR BERRINGER: That was Ron Lewis. 6 And now we'll go to Steve Nadel. 7 MR. NADEL: Just briefly on this last 8 topic, there's also the EPA has the EnergyStar grocery 9 store program that recognizes those stores and 10 encourages them to have the best overall performance, 11 so that's one other aspect. 12 We're turning to this classification, I'm 13 kind of comparing what's on the slide to what the 14 consultants have prepared earlier. As I see it, there 15 are four differences, two of which I think we've 16 discussed already. We've already discussed the semi17 vertical without doors. I believe we've also 18 discussed the ice cream temperature. That's more for 19 application. That's not designed, if I understand 20 correctly, as a separate product class. 21 That leaves two other differences and I 22 was curious that ARI could correspond a little bit 23 about that, how they see them being used. One is the 24 service over-counter. I'm assuming that's for very 2573

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com small equipment, that would be on a counter where it's 1 a straight line, based on volume may not be 2 appropriate, if they could clarify that, that would be 3 good. 4 And I was curious what they are suggesting 5 regarding this quote application temperature. Is that 6 another just how equipment may be sold, but you will 7 always test equipment either at the medium or the low, 8 as appropriate for standard purposes and then have a 9 separate application temperature for certain sales, so 10 maybe ARI could respond. 11 MR. AMRANE: Karim Amrane, ARI. I will 12 defer your first question to the manufacturers. I 13 think they can answer that. 14 MR. HOWINGTON: I will take a crack at 15 service over-counter. This is Larry Howington, Hill 16 Phoenix. 17 The service over-counter is really the 18 cases that you see in the deli department and service 19 meat department where you have open meats and food 20 product in the cases. They're glass cases. And they 21 are probably the highest dollar value product that our 22 customer is selling. And so those cases then to be 23 very open in terms of visually which means needing a 24 lot of glass. And they're open on both -- there's 2574

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com glass in the front and they have glass in the back 1 too. They have doors in the back as well. Many times 2 you can open the front which means they're a little 3 different than your typical door case where you only 4 have doors on the front. So we felt that the energy 5 used and criteria might need to be a little different 6 there just because of the way those cases are used and 7 they have a very open look from a marketing 8 standpoint. 9 In a store overall, there are not a lot of 10 these cases. Only in the service area, deli service 11 area. So that's what we meant by service over. We 12 generally take -- people are taking the product out, 13 packaging it for the customer and handing it over to 14 them there. You don't serve yourself. 15 Open means seafood, those types of things. 16 Does that make sense? 17 The second question was -- what was the 18 second question? 19 MR. NADEL: About this application 20 temperature and whether that's to be used for product 21 classes or more for marketing and will it affect the 22 product classes? 23 MR. HOWINGTON: It does affect the product 24 classes somewhat. We had kind of a problem with that 2575

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com because customers sometimes want to use cases and I'll 1 give an example. They may have an open case that 2 they're using -- a medium or small open case where 3 they're using a medium temperature. At certain times 4 of the year they may want to run it at low 5 temperatures or they may want to run it at a frozen 6 temperature, but it's not capable of running at zero 7 degrees for product. It might only be able to run at 8 say 20 degrees. 9 And an example of what you might use would 10 be turkeys or hams or something like that around the 11 holidays. So that's an application kind of case where 12 the target temperature is 20 degrees or 10 degrees and 13 it's not capable of running at 0 degrees, although it 14 is frozen. 15 And we had that conundrum of how to 16 classify it, so we put this application -- it's 17 usually not a lot of cases, however, sometimes with 18 our product another example is ice. A customer wants 19 to run ice in a case frozen and ice doesn't need to be 20 0 degrees. So it may be running at 10 degrees. And 21 it's bags of ice. And they'll want the case to run at 22 that. 23 And if you self-contain the case, you may 24 be running it at 10 or 15 degrees, but you may not be 2576

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com able to run it down to 0 degrees. That's why we put 1 the category for application where it's a temperature 2 that may not be able to hit one of our mainstream 3 product temperatures, but at least you could have a 4 test temperature and you could label it as such. 5 MODERATOR BERRINGER: Mike Rivest. 6 MR. RIVEST: Mike Rivest, Navigant 7 Consulting. I guess thinking ahead a little bit in 8 terms of how we're going to structure the analysis, 9 are the products under -- which there are a series of 10 products, the 12 major product categories and then 11 they're further broken down by temperature, are those 12 physically the same, incorporating the same 13 technologies and then they are delivering different 14 services, if you will, by just a setting or are they 15 specifically built for those temperatures, but with 16 the same mechanical components? 17 The reason I'm saying that is if we were 18 to try and develop a standard, are we going to 19 essentially be doing an engineering analysis on the 20 row of 12 boxes or do we have to get into the further 21 applications and say okay, we can't just test at one 22 temperature and then have it apply, have the standard 23 be developed for one temperature and then the system 24 operated where it's needed by the customer. I'm not 2577

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com sure I made sense there. 1 MR. HOWINGTON: Larry Howington, Hill 2 Phoenix. 3 I'll try to answer your question. One 4 thing that we're doing is and what we agreed to do is 5 we put down all of the common applications interest 6 that we could determine within our user community and 7 we are getting sales -- shipping information on all of 8 those to provide to you so you can get an idea of how 9 -- what the volume is that we're talking about to see 10 what ones might be relevant. 11 Specifically, relative to the 12 construction, unfortunately that kind of depends. 13 Like we told you with zero and -5 or -10 on our ice 14 cream versus frozen, our product doesn't really 15 change, especially for remote cases if they're 16 identical. However, when you're doing other products 17 like I mentioned where you have a medium temp case 18 that's going to run at a lower temperature, you might 19 actually have to do things like change the fan speed, 20 fan motor speed. 21 When you go to the lower temperature, you 22 may have to lower the air flow speed. So there may be 23 specific things that you do and add to the case that 24 cause it to be constructed somewhat differently, if 2578

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com it's going to run at a medium and low temperature mode 1 that you wouldn't have to worry about it if you're 2 running it at maybe too low a temperature or a higher 3 medium temperature say. That may have a similar 4 construct or it may not. 5 So sometimes it is, and sometimes it 6 isn't. Unfortunately, I can't tell you, they're 7 always different or not different. 8 MR. RIVEST: Thank you. 9 MODERATOR BERRINGER: I see Steve Nadel. 10 MR. NADEL: Yes, just trying to clarify 11 this application temperature and how we apply it, what 12 it sounds to me like and tell me if this would work is 13 that if equipment can operate at one of the standard 14 temperatures, it would be rated at that temperature 15 and that would constitute the minimum standard. There 16 may be some very small number of products that is not 17 capable of operating at either 0 or 38 and that would 18 be just a very small niche category you're suggesting 19 that would somehow have some separate standard. 20 MR. HOWINGTON: Larry Howington again. I 21 think that's true, Steve, and I think by looking at 22 the shipment data, we could get an idea and maybe 23 there will need to be another category, if it's deemed 24 enough volume in that there may be a category like a 2579

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com wine cooler or something which really is just a medium 1 temp. case that runs at a higher temperature. If 2 enough people are producing that, it might be 3 worthwhile to have an application for that possibly. 4 I don't know. 5 MODERATOR BERRINGER: Karim. 6 MR. AMRANE: Karim Amrane, ARI. To follow 7 up on Steve's question, I think what we'll have to do 8 -- what you will have to do is look at the shipping 9 information we will be providing to the Department and 10 then see whether it's worth the time and effort to 11 regulate an application temperature with a very 12 limited amount probably being sold, so there might be 13 cases where application temperature would be relevant. 14 It might be product cases that would be irrelevant. 15 So you have to look at that. 16 MODERATOR BERRINGER: Dave Winiarksi. 17 MR. WINIARSKI: This topic about 18 essentially small volume products brings up an issue 19 that I think is somewhat unique and if Ron doesn't 20 kill me here for mentioning it, that the language that 21 was, I believe, negotiated for the Energy Policy Act, 22 basically says the Department has authority to cover 23 certain products. It then sets a deadline for the 24 Department to develop standards for products and 2580

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com products for which the Department does not develop 1 standards are -- it's then possible that states could 2 come along and individually set standards for it. 3 So we just want to make everyone aware 4 that when we decide that a product is a small niche 5 product and we think the Federal Government may not be 6 or in this rulemaking may not want to cover it. That 7 does open that opportunity for states to decide 8 whether they want to address it. 9 So one thing that I think I would 10 encourage is if we can think of a way to get certain 11 categories covered within the rulemaking without the 12 extensive amount of effort, that might be beneficial. 13 MR. AMRANE: Karim Amrane, ARI. I guess 14 I have a different interpretation of what EPACT says. 15 And here DOE is given the authority to do rulemaking, 16 but it might well be that when DOE is going through 17 the process, DOE might decide for certain product 18 categories or application temperatures or whatever 19 that it would be exempted. So it will be like an 20 exemption within the scope of the rulemaking. So I'm 21 not saying it that way. I'm saying it more like it's 22 a covered product for which DOE will exempt the 23 product from meeting minimum efficiency standards. 24 MODERATOR BERRINGER: Andrew. 2581

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MR. DELASKI: Andrew Delaski of Appliance 1 Standards Awareness Project. I'm not sure how far you 2 want to go down this path, but there's a history of 3 the Department in the past having said set a no 4 standard standard, saying that we're determining that 5 no standard makes sense for this product, and we're 6 preempting the states. And that was overturned by the 7 Courts in the '80s. The notion of setting a no 8 standards standard is a big problem in our view. 9 If a product is not covered, then it is in 10 our view something that is not preempted in the states 11 and it's something we need to be really careful about 12 and think about as we go forward. And that said, I 13 think we want to be, but there's also the question of 14 having a level playing field for the manufacturers. 15 That we don't want to as we go forward, and I agree 16 with Karim's basic concept that we want to address 17 here opportunities for energy savings, not 18 opportunities to cover every single last little thing 19 in the marketplace. That's not the objective. 20 The objective is to save energy in a cost21 effective way. And whether it's the 80-20 rule or the 22 90-10 rule, the 90-10 rule there is, I agree with the 23 basic concept that's been discussed today, but we 24 should be focusing on where the opportunity is. So I 2582

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com think that's where we should be. And if there are 1 products that are left out that create the opportunity 2 for loopholes, that's a concern of ours, that 3 something is left out and some manufacturer sees that 4 as an opportunity to increase the market share because 5 they can then sell into this market and undersell 6 their competition, and that increases energy 7 consumption, that's a big concern of ours, too. 8 So we want to go after where the energy 9 savings is, but not create loophole, have a level 10 playing field. These are all important concepts. 11 MODERATOR BERRINGER: Steve Nadel. 12 MR. NADEL: Steve Nadel. I was just going 13 to add to that. Before we get all too bent out of 14 shape about what states might do, if it's truly a 15 niche product, a state is not going to bother. States 16 have far less resources than DOE does, so I wouldn't 17 worry too much about, you know, some small product 18 that, you know, a hundred gets sold in a year. No 19 state is going to bother. 20
MODERATOR BERRINGER: Ron? 21 MR. LEWIS: Ron Lewis, DOE. I think to 22 the point that Andrew just mentioned, our mission is 23 to save energy, to increase energy efficiency and 24 we've had a history of not getting things out very 2583

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com quickly. And trying to get this rulemaking done on 1 the time allotted along with a lot of other 2 rulemakings that we're being asked to do, we need to 3 get creative here in not looking under every single 4 rock and looking for every single little item that's 5 out there and trying to be exhaustive in our efforts. 6 But we want to save energy and we want to impact 7 things and we want to avoid blatant errors and 8 oversights. 9 So in looking at this, if there are 10 insights by people, for instance, when you're talking, 11 Chris, about perhaps changing fan speed or something, 12 if there is a standardized case, and I think I had 13 heard that there's a lot of customization. People for 14 different applications and different store 15 configurations and different store designs, whatever, 16 there's not a great deal of standardization out there 17 right now, so even noting that. 18 But if there are things that are primary, 19 that are the indicator of the major opportunity to 20 capture energy efficiency and energy savings, if it's 21 testing a case configuration for a certain setting, 22 and even if there's a variable such as a air flow or 23 something else that may be a nuance, an adjustment, a 24 reconfiguration. If there's a way for us to capture 2584

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com things without getting ridiculous in looking to 1 capture everything that's even less than a niche, 2 let's look for those opportunities. Let's look for 3 those commonalities, wherever they're possible. 4 And if anybody has insights, if there are 5 standardized sizes by application that makes sense, as 6 opposed to individual applications, if there's a sort 7 of base model that people tweak and tune to get to 8 these others, let's look at how we can categorize 9 things to make sense and get the best results without 10 getting down to such fine detail that we never get 11 this accomplished. 12 MODERATOR BERRINGER: Andrew. 13 MR. DELASKI: Andrew Delaski, of Appliance 14 Standards Awareness Project. I just want to request 15 that the Department can make a photocopy of this 16 available. That would help in preparing comments. 17 MR. LEWIS: The slide right there? 18
MR. DELASKI: Yes. 19 MODERATOR BERRINGER: We can do that. Any 20 other comments on this issue right here? I see people 21 looking at their watch. We're running behind 22 schedule, but I think this is an opportune time to 23 take a break. We 'll do a 15-minute break. Be back 24 here promptly at 11:15. We'll start then and then we 2585

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com will finish up these questions and hopefully get back 1 on track. But thank you for all the great discussion 2 this morning. 3 (Off the Record.) 4 MODERATOR BERRINGER: Can we have 5 everybody take their seats? We'll get started up 6 again. I think almost everybody is back. If you'd 7 like to sit at the table and join us. 8 Let's go ahead and see if we can get back 9 on schedule here and get through some of these 10 questions. We're at Slide 28. We're on 3.4 now. It 11 says can the terms horizontal, semi-vertical and 12 vertical be used to describe equipment orientation? 13 If so, how should these be defined based on the angle 14 of the air-curtain, the load-line with the vertical, 15 with the 0 to 30 degree being the vertical; 30 to 60 16 being the semi-vertical and 60 to 90 percent being the 17 horizontal? 18 So this again is talking about classes. 19 Any comments on the classes? 20 Larry? 21 MR. HOWINGTON: Larry Howington, Hill 22 Phoenix. We have a definition to put forward to ARI, 23 based upon kind of a composite of all the members. 24 MODERATOR BERRINGER: Okay. 2586

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MR. HOWINGTON: And basically the 0 to 10 1 is horizontal; 10 to 80 is the semi-vertical; and the 2 80 to 90 would be vertical. And that seemed to 3 represent fairly well the kind of classes that are 4 around here. 5 MODERATOR BERRINGER: Okay, great. Thank 6

you. 7 MR. HOWINGTON: So we'll put it forward in 8 writing. 9 MODERATOR BERRINGER: Great, thanks. 10 Mike? 11 MR. RIVEST: Mike Rivest. Larry, it seems 12 like 10 to 80 degrees is very broad. If one were to 13 set a standard based on one of those angles, say 14 halfway, would it be reasonable for the other products 15 to meet that same energy efficiency minimum 16 requirement? 17 MR. HOWINGTON: Again, this is Larry 18 Howington. I can show you product that we make that 19 I think that you would say is clearly semi-vertical, 20 that fall into that fairly narrow category. 21 If you look at the obvious construction of 22 it, it's designed so the shelves start very short at 23 the top and get broader as they go down and if you 24 look at it, you'll see that it obviously is a semi2587

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com vertical. 1 When you start defining -- if something 2 doesn't convey the visual aspect until you see on very 3 tall ones, they actually can get out pretty far and 4 still have a fairly shallow angle from vertical. 5 It would be a cascade-type case as opposed 6 to a vertical air-curtain case. 7 MR. RIVEST: But what I was saying is is 8 it possible that there might be some products which 9 have say an 80 degree or a 79 degree and would have to 10 meet the same standard as an 11 degree, and would that 11 be acceptable? 12 MR. HOWINGTON: Yes, it should be. 13 MR. RIVEST: Okay. 14 MR. HOWINGTON: Yes. It should be 15 acceptable. I wouldn't think anyone would complain 16 from having to meet the standard. In general, the 17 further you go off the vertical or the horizontal, you 18 start getting into the less efficiency area as you 19 start rolling air across shelves. 20 MR. RIVEST: Okay, thanks. 21 MODERATOR BERRINGER: Okay, any others? 22 So thank you, Larry. You're going to give us some 23 comment on it. Any other input on this 3.4? 24 Okay, 3.5. What product class, if any, 2588

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com can be combined with the standard setting purposes 1 because of their similarities? Can we combine any 2 classes in any areas? 3 Seeing no comments, we'll move on. 4 Hopefully, you will see something you can give us, 5 Larry, in your written comments will be great. 6 3.6. Can analysis for any one of these 7 product classes be applied or extrapolated to another 8 product class? 9 Sounds like a similar type of question. 10 Okay, seeing none. 3.7. Should all these 11 product classes be considered, e.g., do any of these 12 product classes have few or no shipments? 13 Larry? 14 MR. HOWINGTON: ARI will be forwarding 15 composite shipment to you and I think that should help 16 clarify for you rather than us speculate. We will try 17 to provide you the composite shipment data that's 18 available for all of the suppliers to the members. 19 MODERATOR BERRINGER: Great. All right, 20 then we'll move on to 3.8. Would it be appropriate to 21 extend the standards proscribed for self-contained 22 commercial refrigeration equipment with doors that 23 meet 2005 to similar remote condensing equipment with 24 doors and ice cream freezers with doors covered in 2589

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com this rulemaking? If so, what methodology would be 1 appropriate? 2 Karim? 3 MR. AMRANE: Karim Amrane, ARI. I will 4 defer a little bit to the manufacturers, but I don't 5 think it would be appropriate to extend. I mean 6 remote cases are, I guess, actually in self-contained 7 cases are correlated with respect to volume. The 8 remote cases industry is using total display area or 9 something else. It looks like it's going to be 10 difficult to extend the same methodology that was 11 developed in 17 to the remote cases. But together, I 12 would like to have the industry give us additional 13 comments on that. 14 MODERATOR BERRINGER: Yes, Bruce. 15 MR. HIERLMEIER: Bruce Hierlmeier, Zero 16 Zone. One other item in the self-contained cases the 17 internal volume they use was a gross internal volume 18 which in our study in looking at it as an industry, 19 for remote cases, we're looking at more of a net or 20 usable volume so you don't get to take advantage of 21 some of the distance between shelves and doors and 22 that type of thing. So that wouldn't work well to 23 just assume all those numbers would start working and 24 applicable to our equipment. 2590

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MR. WINIARSKI: Dave Winiarksi for Pacific 1 Northwest Laboratory. Part of the reason this 2 question came up in perusing some of the 3 manufacturers' literature, we saw products that were 4 essentially looked like the same product, but 5 available in both the self-contained and a remote 6 configuration and we were not -- we didn't know 7 whether that was a common approach within the industry 8 or sort of that one manufacturer's products. 9 MODERATOR BERRINGER: Yes, Bruce. 10 MR. HIERLMEIER: Bruce Hierlmeier, Zero 11 Zone. I guess I can't speak for a number of 12 manufacturers, but I will. A number of our 13 manufacturers will make those perhaps as niche 14 products, so if a customer says I want to have this 15 nice, big piece of remote equipment, but can you 16 provide a condenser unit to go along with it, they 17 will apply that unit for that, but it's not a high 18 volume sale. If they're doing self-contains, they're 19 really in that marketplace, much like people that make 20 a lot of self-contains, if the customer wants to have 21 it remote, they'll make that a remote for them, but 22 again, it's probably not the rule. It's an abnormal 23 product form. 24 MODERATOR BERRINGER: Okay, any other 2591

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com follow-on comments. Any other manufacturers? Larry? 1 MR. HOWINGTON: Larry Howington, Hill 2 Phoenix. 3 As you have the opportunity to start 4 looking at energy data, I think that you'll probably 5 be happy to see that on the remote cases, in general, 6 that energy consumption will be lower in the self7 contained cases. Some of the issue has been trying to 8 make the direct comparison. I don't know how you make 9 the jump exactly or if there would be a good way to do 10 it. But in general, I think that we'll find the 11 remote cases will be more energy efficient. 12 MODERATOR BERRINGER: Yes, Chris? 13 MR. BALESTRINI: Chris Balestrini, FPA. 14 I'm just wondering if the classes and everything like 15 that that you're talking about, I'm wondering if there 16 isn't a volumetric effect that as you get bigger, the 17 behavior of the machinery will change as your volume 18 increases in your units and you may end up running 19 into like size constraints that you have to specify 20 within certain classes to be able to generate the 21 efficiencies and the rating and things like that that 22 you want to try and control here. 23 I don't know if any of the guys doing the 24 studies are breaking it down into volumetric 2592

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com comparisons as well as the efficiency comparisons. 1 MR. CHRISTOPHER: I think we are going to 2 get into that a little bit in the next slide. 3 MODERATOR BERRINGER: Well, why don't we 4 go ahead, if there's no other comments, we'll go ahead 5 and move on to the next slide. 6 MR. CHRISTOPHER: Yes, Karim touched on 7 this too, the idea of a normalizing factor or a 8 normalizing metric. And the ones that we're looking 9 at, of course, are volume which is historically have 10 been with the closed cases, the self-contained; total 11 display area which defined in the ASRAE 72 and the ARI 12 1200 and length. And our initial thinking really is 13 that length isn't going to be adequate to capture all 14 the effects and what we're proposing is to use this 15 total display area for the open cases and volume for 16 the closed cases. And we've done some looking into 17 this for manufactured data and the next slide actually 18 -- maybe we can come back to this item. 19 We looked at the -- this is just a sample 20 of some of the background research we've been doing to 21 compare energy consumption to total display area. So 22 this is for the remote condensing, basically a multi23 deck meat or dairy case and this is a survey of 24 publicly available manufacturer literature. 2593

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com And so really what we're looking at is for 1 medium temp, the variation in energy consumption with 2 TDA and we're starting to explore what these ranges 3 are, what some of the upper and lower limits are on 4 these. 5 Does that begin to address the question 6 that you have? 7
MR. BALESTRINI: Yes. 8 MR. CHRISTOPHER: Okay. 9 MR. BALESTRINI: Yes, that's what I was 10 wondering about is is your air getting bigger as your 11 volume gets bigger? 12
MR. CHRISTOPHER: Yes. 13 MR. BALESTRINI: Basically, you're 14 demonstrating that right there. 15 MR. CHRISTOPHER: We've got the same kind 16 of approach for length and volume as well. And we've 17 got backup slides if you want to take those out and 18 have a look. That's something -- 19 MODERATOR BERRINGER: Yes, Karim? 20 MR. AMRANE: Karim Amrane, ARI. Just a 21 quick question. It says here that the energy 22 consumption is based on ARI 1200 2006? 23
MR. CHRISTOPHER: Yes. 24 MR. AMRANE: All the data you have here is 2594

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com based on the ARI 1200 2006? 1 MR. CHRISTOPHER: We took manufacturers' 2 specifications and calculated CDEC through the ARI 3 1200 calculation method. So that being said, maybe we 4 can come back to this and address this, if there are 5 any specific comments. 6 MODERATOR BERRINGER: Steve, did you have 7 a question or comment? 8 MR. NADEL: Steve Nadel, ACEEE. And this 9 will pick on some of the things that Scott Mitchell 10 was saying before. I think for the open cases which 11 metric you use could very much affect whether this 12 equipment increases the marketshare, decreases, how 13 much of it is sold. 14 If you do total display area, that will 15 penalize equipment that is deeper, that has more 16 storage area because there is heat loss associated 17 with that, so you may get more volume and it makes it 18 easier to sell the equipment, just based on display 19

area. 20 Likewise, if you do display area, it 21 encourages higher heights as opposed to trying to 22 narrow the height compared to say the length. 23 So our preference is, if possible, to do 24 something more toward refrigerated volume and in order 2595

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com to really try to keep this as efficient as possible. 1 The one compromise I can think of is you may have to 2 go to a multi -- some type of progression equation 3 that would have both volume and either length or 4 display area, but to just do display area, I think 5 would needlessly increase energy use. 6 MR. CHRISTOPHER: Is a multi-metric like 7 that problematic since you might be counting, say if 8 you do volume and display area, are you counting 9 certain dimensions twice? 10 MR. NADEL: I was thinking it would be a 11 regression equation though, the current standard for 12 say self-contained refrigerator was based on a 13 regression equation based on volume, so you just have 14 two variables. One is volume. One might be display 15 area. Just a slightly more complicated equation, but 16 based on actual data for the base cases and so on. 17 MODERATOR BERRINGER: Karim, do you have 18 a follow-on? 19 MR. AMRANE: Karim Amrane, ARI. Again, 20 going back to the question of whether to use total 21 display or volume, again, I will defer to the 22 manufacturers, but it seems to me that in the remote 23 cases, the trend has been to use total display area, 24 not only in the U.S., but as well in Europe. So I 2596

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com think we are trying here to align ourselves with out 1 standards like the ISO standard that uses total 2 display area. 3 So we want to be consistent. Our 4 certification program will be based on total display 5 area, so that's how the data is going to be listed in 6 our directory. 7 MODERATOR BERRINGER: Yes, Don? 8 MR. BRUNDAGE: Don Brundage, Southern 9 Company. From a practical point of view, I don't know 10 that you're going to get people building cases that 11 are taller because then consumers will not be able to 12 reach them. I think there's some normal, common sense 13 limits to these things. 14 MODERATOR BERRINGER: Thank you. We may 15 -- we have some questions from the audience. Please 16 come to the mic and identify yourself. 17 MR. MACMINN: I'm Chris MacMinn from 18 Navigant Consulting and I just actually had a quick 19 question for Karim and I think maybe Larry. I think 20 I heard you guys mention that you use total display 21 area for all remote cases? We had actually be 22 thinking that total display area was relevant to cases 23 without doors as opposed to maybe volume for cases 24 with doors. But you're saying that you think that 2597

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com total display area is relevant to remote cases whether 1 or not they have doors? 2 MR. HOWINGTON: This is Larry Howington 3 with Hill Phoenix. Truthfully, we're collecting the 4 data to look at it both ways to see which we get a 5 more reasonable fit because -- and I think what you 6 said may be right. For door cases and we want to -- 7 a lot of regulation has been put out on door cases 8 already. We didn't want to be looking like we were 9 terribly inconsistent with that. So we felt like we 10 might kind of leave that alone and then looking at the 11 open cases, because the ISO standard went with total 12 display area, we wanted to look at the data that we 13 generate and graph it and kind of see, look at it both 14 ways and see what made sense. If the fit seemed to be 15 better one way or the other relative to representing 16 energy per what the customer was buying. 17 In an open case, the customer is buying 18 display area. How well they display the product. As 19 we close the case up, as far as they're concerned, it 20 has less value to them. So that's kind of, I think 21 what drove ISO and sort of was in our mind and we're 22 in the process of pulling all that data together which 23 we'll share so that maybe we can look at it and see 24 what makes the most sense. 2598

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MODERATOR BERRINGER: Okay, so I think we 1 pretty much touched on the question of Item 3.9 then 2 as far as feedback on it, the test metric. 3 Are there any other comments on that item? 4 MR. CHRISTOPHER: Well, then the last 5 issue here in the market and technology assessment is 6 baseline units. So once these classes have been 7 established, whatever they may be, we just select the 8 baseline in each class. 9 And so this is the starting point for 10 these standards, so we measured standards against the 11 baseline. And typically, previous standards are used 12 as to set the minimum baseline, but we don't have 13 standards in this case to go by. So we're looking to 14 do background information to get this data. Take a 15 look how to establish these baseline models and we'd 16 like to get manufacturers' data to supplement that 17 and your ideas about how to select these baseline 18 models. 19 So in fostering some discussion about this 20 issue, I want to hold off on the questions for a 21 second and go to this next slide here which -- so the 22 gray data points here are that previous graph that we 23 showed. CDED daily energy consumption versus TDA for 24 a standard level of lighting which we've defined as a 2599

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com single row of lights in an open display case. 1 The other data set here, the black points, 2 represents the same set of cases, but this time the 3 CDEC was calculated with a maximum level of lighting 4 which we've defined as one can't be row, one sill row 5 and one row of lighting per shelf. And really what we 6 want to get at here is that we need to be careful 7 about what assumptions we make in defining a baseline 8 model and we want to get your input on things like 9 lighting, for example, is a big one, that have an 10 impact on the utility of the case and a great impact 11 on the energy efficiency of the case. 12 So that being said I want to go back to 13 these two items and see what comments, questions we 14 have about how to select baseline models. 15 MODERATOR BERRINGER: Okay, so at this 16 point we'll look at item 3.11. It says the 17 Department's feedback on how to select baseline models 18 for each product class. 19 Comments on that? This is a very 20 important issue as far as where you start looking at 21 your analysis, especially your engineering analysis. 22 Karim? 23 MR. AMRANE: Karim Amrane, ARI. You will 24 get feedback from us on what the baseline is. We are 25100

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com putting together a document that will define it, 1 hopefully, at least from our point of view and you 2 will get probably a baseline as far as on consumption 3

too. 4 MODERATOR BERRINGER: Great, thank you. 5 And then it says moving on to item 3.12, the 6 Department seeks information on what particular 7 components and features characterize the baseline 8 models for each product class. There's a number of 9 examples there. 10 All right. Baseline information that you 11 submit to us will -- that will help us out. Thank 12

you. 13 MR. CHRISTOPHER: Thanks, Bryan. That 14 does it for the market and tech. Now we're going to 15 hand it off to Aris Marantan, who is going to discuss 16 the analysis and the engineering analysis. 17 MR. MARANTAN: Okay, thank you Mike. Can 18 everybody hear me okay? The next analysis performed 19 as part of the ANOPR is the screening analysis which 20 I'll describe here. Okay, the purpose of the 21 screening analysis is to screen out technology options 22 that will not be considered any further in the 23 analyses. The Department applies four screening 24 criteria which are listed here. Two of the list of 25101

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com technology options determine what the applicable 1 design options shall be for use in the remaining 2 analyses. 3 These four criteria were developed as part 4 of the process rule by the Department of Energy, and 5 they include first of all the technological 6 feasibility, which is any technologies that are not 7 incorporated in commercial products currently or any 8 working prototypes will not be considered any further. 9 So it has to be demonstrated for us to be examining 10 that technology. 11 The second one is practicability to 12 manufacture, install, and service. If mass production 13 of a technology and reliable installation and 14 servicing of any technology cannot be achieved by the 15 time the standard comes into effect on a scale 16 necessary to serve the market, then it will not be 17 considered any further as well. 18 The third one is adverse impacts on 19 utility or availability to customers. So for this 20 criteria, if a technology is determined to have 21 significant adverse impact on utility or utility of 22 the product to significant subgroups of consumers, or 23 results in unavailability of product types with 24 performance characteristics, features, sizes, 25102

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com capacities, that sort of thing, the volumes that are 1 substantially the same as products that are generally 2 available in the U.S., then they will not be 3 considered any further. 4 And the last one is adverse impacts on 5 health or safety. That's pretty self-explanatory. So 6 what I want to emphasize here is that we'll be looking 7 for comments on which technology options the 8 Department should screen out in order to have a 9 remaining set of limited design options which will be 10 considered further in the analyses, particularly the 11 engineering part of it. 12 Okay, what you see here is an initial list 13 of technology choices. This one happens to be 14 applicable to all equipment types that we're examining 15 here in this rulemaking. The technology choices are 16 typically developed using past technology options that 17 have been used or prototype designs, as I've 18 mentioned. And initially, this list of technology 19 choices includes technologies that are technologically 20 feasible from our understanding of the industry 21 currently. 22 However, in consultation with stakeholders 23 and using this screening criteria that I've just 24 described, we will filter this list down to a usable 25103

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com set of design options. The list continues on the next 1 slide, for equipment without doors only and also for 2 self-contained equipment. And then at this point 3 before I turn it over to Bryan to lead the discussion 4 on each of these, I want to make clear that the 5 Department is interested in specific information using 6 the screening criteria to screen out these technology 7 options. We want to make sure that any comments we 8 receive are explicit and relate to the full-screening 9 criteria if possible. 10 MODERATOR BERRINGER: Okay, yet again 11 3.10, it says what technologies or designs if any 12 should be added or removed from this list above. So 13 I'm not going to go to each technology. I don't think 14 you guys can see that, if you think something is here 15 or we've missed something that needs to be added, a 16 technology that you think should be on here, we need 17 to add it the list if, as Aris said, that if the four 18 criteria would apply to something that is on the list, 19 and you feel it should be screened out because of 20 safety issues or other issues, then please let us 21 know. 22 Let me start with, does anybody feel that 23 there's something that's missing from this list that 24 needs to be added on technology? Seeing none, 25104

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com anything that needs to be removed from this list that 1 does meet the four criteria for screening out? The 2 purpose of screening out is that we don't spend a lot 3 of time and effort on analyses, engineering analyses, 4 so we don't, something that's a viable technology. 5

Bruce. 6 MR. HIERLMEIER: Bruce Hierlmeier, Zero 7 Zone. I guess I'd be cautious on the demand defrost. 8 hat was popular in the trade journals and topics a few 9 years ago. I think it didn't work all that well if 10 you have one failure in a case, you could lose a 11 thousand dollars worth of product. It doesn't pay for 12 the savings you have. There may be very little 13 interest in that. People are interested in doing it, 14 but no viable technology to make it happen right now. 15 MODERATOR BERRINGER: Thank you. Any 16 other comments from any of the other manufactures? 17 Okay, seeing none. 18 MR. MARANTAN: Okay, after conducting the 19 screening analysis, the Department performs an 20 engineering analysis based on the remaining design 21 options. So the engineering analysis consists of 22 estimating the cost of equipment at various levels of 23 reduced energy consumption. Okay, the purpose of 24 engineering analysis is to characterize the 25105

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com relationship between manufacturer costs and energy 1 efficiency, or in this case energy consumption. 2 In general, as energy consumption 3 decreases, manufacturing costs increases, and that's 4 represented here in the graph. In determining the 5 relationship, the Department will estimate the 6 increase in manufacturer costs associated with 7 technological changes that decrease energy 8 consumption. So as you can see, the output of the 9 beginning analysis is a curve, which you see here. 10 And that is used further downstream in the analysis, 11 in the life-cycle cost and payback period, the 12 manufacturer impact and the employment impact 13 analysis. 14 Okay, this next graph shows a little bit 15 more on the method that we envision for the 16 engineering. This is broken down into several 17 discrete steps. The first step in the process is 18 defining a baseline, which was covered in the previous 19 section. So here baseline units for each product 20 class are defined, and data is gathered for baseline 21 performance. And then we also include mark-up 22 assumptions, which convert manufacturer production 23 costs to manufacturer selling prices. 24 The next step is the development of the 25106

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com cost versus energy consumption curve. Here the 1 Department will obtain cost estimates for engineering 2 analysis from detailed incremental cost data, which is 3 desegregated into the cost of material, labor, and 4 overhead. And then an industry-wide analysis is 5 created based primarily on manufacturer's supplied 6 data. 7 The next step is pretty important as well. 8 We don't just rely on the cost energy consumption 9 curve. We have to also do qualification. So in this 10 step, the Department plans to qualify the aggregated 11 cost versus energy consumption data received from 12 stakeholders. By identifying applicable design 13 options and using the test procedure to determine 14 performance improvements, and you saw a little bit of 15 that in the previous section. 16 Now we also do, we also collect 17 manufacturer selling price data as well in order to 18 create these qualification points. In addition, the 19 Department plans to consult with outside technical 20 experts as needed. And then finally, the Department 21 will finalize the analyses based on stakeholder 22 feedback received during the comment period. 23 So the next few slides describe a little 24 more about each of these steps. Okay, here is the 25107

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com cost versus energy consumption curve development. The 1 first part of that development is for each product 2 class, the Department will select the baseline as a 3 reference point, against which it can measure changes 4 resulting from energy standards. 5 Typically the baseline model is a model 6 that just meets current energy efficiency standards. 7 However, in this case we don't have that luxury. So 8 the Department proposes to use information provided 9 by stakeholders in addition to information that we 10 will collect from publicly available data in selecting 11 the appropriate. 12 The next step, the Department collects 13 incremental cost data which is intended to represent 14 the average incremental production cost to improve 15 that baseline model to a specific energy consumption 16 level. So this describes really an energy -- an 17 efficiency level approach for the engineering because 18 the Department will examine aggregated incremental 19 increases in manufactured selling price at reduced 20 energy consumption levels. This approach allows 21 representation of the entire range of efficiency 22 levels. 23 And then the last step which I mentioned 24 earlier is qualification. Here, the Department 25108

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com intends to qualify the cost versus energy consumption 1 relationship supplied by stakeholders through 2 engineering expertise in consultation with 3 stakeholders. 4 Specifically, the Department will 5 supplement the aggregated data with information 6 collected through a follow-up interview process. 7 These interviews are confidential and provides a 8 deeper understanding of the various combinations of 9 technologies used to reduce energy consumption. 10 Okay, so here we have two questions 11 related to the approach. I'll return it back to 12 Bryan. 13 MODERATOR BERRINGER: Then on to Item 5.1. 14 For each product class,the Department seeks 15 information on incremental manufacturing cost of 16 components. It says see Items 3.12. For energy 17 consumption levels above the baseline. Then e.g., 18 daily energy consumption, what components are 19 different from the baseline, material cost, labor 20 cost, overhead costs, excluding depreciation, building 21 conversion, capital expenditures, tooling, equipment, 22 conversion of capital expenditures, R&D expenses, 23 marketing expenses, etcetera. So again, we're looking 24 at incremental manufacturing costs of components, in 25109

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com components. 1 Any comments on that? 2 Karim? 3 MR. AMRANE: Karim Amrane, ARI. ARI will 4 be providing those cost efficiency curves to DOE, as 5 an aggregate curve. It will be presented to the 6 industry, not individual manufacturers. 7 MODERATOR BERRINGER: Okay, thank you. 8 Yes, is it Marshall? 9 MR. HUNT: Yes, Marshall, PG&E. I think 10 we need to remember that these are mature market or at 11 production level cost because you might think of 12 widget A, put it in 5 percent of your existing product 13 and it will be a niche very specialized, very 14 expensive item, whereas if it was required by the 15 standards, all of your product had that widget A, then 16 the cost would be much, much different. In past 17 proceedings, that's been a big issue. 18 MODERATOR BERRINGER: Okay, any other 19

comments? 20 Okay, we'll move on to Item 5.2. The 21 Department is also interested in any equipment test 22 data that stakeholders could provide, e.g., test 23 procedures used, rating conditions, refrigerated 24 volumes, display, total display areas, case length, 25110

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com voltage, integrated average product temperature, daily 1 energy consumption, etcetera. Test data for the 2 baseline model in each product class is particularly 3 important. Again, we were trying to get a baseline 4 from which we're establishing standards. So it's very 5 important, the baseline. Any comments or -- does 6 anybody know any other data sources out there to sort 7 of obtain this information? 8 MR. AMRANE: Karim Amrane, ARI. Again, as 9 ARI, we will provide you the curves, the individual 10 test reports that you're asking, I guess, you can 11 request them from the manufacturers directly. As ARI, 12 will provide you just aggregate numbers. 13 MODERATOR BERRINGER: Okay, great. Thank 14 you. Any other comments? All right, thank you. 15 Aris? 16 MR. AMRANE: Karim Amrane again. I'd like 17 to make a general comment here. I guess it's 18 important that all stakeholders on the table agree on 19 the process that DOE intends to follow here. It's 20 going to be very difficult for DOE to change course 21 along the way because of the time frame we're talking 22 about. So I guess our position to what DOE is trying 23 to do I think we need to hear it today because it's 24 going to be too late six months from now. 25111

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MODERATOR BERRINGER: Thank you. 1 MR. MARANTAN: Okay, this next slide shows 2 cost efficient -- cost energy consumption curve as an 3 example for a specific product. What you see here is 4 energy consumption, also the manufacturing costs. The 5 baseline is right there in the middle. It's the 6 baseline efficiency level that will be determined. 7 The cost versus energy consumption curve . This one 8 here is on here as well and the last items are the 9 qualification points. These are -- this is an example 10 of the kind of output that we will expect from the 11 engineering analysis and so a little bit on the 12 qualification. 13 What we intend to do is derive the 14 qualification points from various sources. One of 15 them, first of all, is publicly available information 16 that you might see form the manufacturer websites and 17 specification sheets. Also, the design options that 18 were not screened out in the previous analysis. We'll 19 be using those along with the test procedure. In this 20 case, it's ARI 1200 which we've done some work with 21 already. And also interaction with stakeholders and 22 other technical experts. So that's really what we're 23 getting at here when we say we're putting together 24 qualification points to check the cost efficiency 25112

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com curve. 1 With that, I'll turn it over to Bryan for 2 feedback. 3 MODERATOR BERRINGER: Yes. Item 5.3. 4 Does the Department request feedback on the use of 5 efficiency level approach for determining the 6 relationship between manufacturer's selling price and 7 energy consumption for commercial refrigeration 8 equipment, supported as needed by the design option 9 approach. So we are talking about the approach we're 10 using here. We're going to use an efficiency level 11 approach which is aggregated information from ARI 12 versus a design option approach. 13 So any comments on this approach? 14 Steve Nadel? 15 MR. NADEL: Steve Nadel, ACEEE. It will 16 probably be no surprise because we've made this 17 comment in a variety of other rulemakings. We are 18 somewhat troubled by the design option, I'm sorry, the 19 efficiency level approach because it effectively 20 creates a black box. You have a baseline equipment 21 that manufacturers provide data on how much more it 22 costs. There's no way for anybody to do some 23 independent analysis on that. We prefer the design 24 options approach because it shows how much will be 25113

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com saved, how much will it cost and things can be 1 independently verified. 2 One approach the Department has often done 3 in recent rulemakings is do both. So the Department 4 seems to like the efficiency level approach. We 5 prefer the design options. By doing them both you can 6 calibrate one against another, have data that is 7 publicly available so all parties can comment and not 8 have a black box. 9 So as Karim said, yes, it's going to be 10 critical to get this right up front which is why we're 11 bringing this up now. 12 MODERATOR BERRINGER: Mike Rivest. 13 MR. RIVEST: The subtle difference, I 14 think, between what you are asking for, Steve, versus 15 what we're proposing to do is you seem to envision two 16 complete and separate analyses and we envision an 17 analysis, a primary analysis and a quote secondary and 18 more limited analysis. And we believe, particularly 19 for this product, that the test procedure gives us a 20 wonderful construct to look at the energy savings 21 potential of discrete design options because that's 22 how really the test procedures have been set up. And 23 we can get costs on those design features 24 independently. 25114

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com So without -- when you saw earlier, there 1 are probably over 30 product classes. They would be 2 a tremendous amount of work to do design option 3 approach on 30 product classes. But we certainly can 4 do a product approach, the design option approach on 5 those product classes that have the greatest energy 6 consumption. And we've already started doing that. 7 You saw earlier the graphic of the product offerings 8 in the market today and that's the type of analysis we 9 can provide for those product classes that have the 10 greatest amount of energy savings. 11 So that's what we're proposing to do. 12 We're confidence that the limited design option 13 approach curves that we'll develop will be consistent 14 with the industry data. We're going to make sure of 15 that through our interview process, so there's no 16 misunderstanding. Because design option approach is 17 not a miracle. It's not the miracle solution either 18 because it assumes a lot, particularly in other 19 products, but I think if we have an understanding of 20 what's truly being done, we'll be able to reconcile 21 our validation with the curves that are being 22 supplied. If not, we'll know very early on through 23 our limited sample. 24 So anyway, I just wanted to qualify that 25115

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 4and maybe get further reaction from what I just said. 1 MODERATOR BERRINGER: I see a follow-on 2

comment. 3 Chris. 4 MR. BALESTRINI: Chris Balestrini, FPA. 5 I have a question about the curve that you have up on 6 the screen. When you say incremental manufacturing 7 costs, at what point in the manufacturing system are 8 you considering the costs? Is it at the time the unit 9 is completed being built? Because like say, for 10 instance, you have a piece of machinery that you do 11 some options on and you change the weight of it, well, 12 to ship that you're going to incur an upcharge on the 13 transportation side, so you really need to identify 14 exactly where you're looking for the cost, if you 15 already haven't and I don't know if you've already 16 defined that stuff. 17 And the other question I had was the 18 energy consumption, is that like kilowatt hours per 19 cubic foot of volume inside the unit or you know, 20 what's the units that you're using for the energy 21 consumption? 22 MR. MARANTAN: I will answer your second 23 one first. What we've been using in our analysis up 24 until now is kilowatt hours per day per some 25116

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com normalizing factor which has yet to be determined and 1 you know, in a lot of cases we've been using total 2 display area, as you saw in the previous section. So 3 does that answer your question? Kilowatt hours per 4 day per a normalizing factor. 5 MR. BALESTRINI: For an open unit. Now 6 what about the closed one? So that's like per square 7 foot of the display area, correct? 8 MR. MARANTAN: Yes. For the closed ones, 9 we haven't determined that either, but we have similar 10 choices. It can be kilowatt hours per day per cubic 11 feet of volume or some other metric which hasn't been 12 determined yet. 13 MR. BALESTRINI: Does it make sense though 14 to go with one unit so you can compare apples with 15 apples that if a person that wants to buy a unit can 16 compare costs on a relative basis, you know, stick 17 with one unit between both closed and open? 18 MR. MARANTAN: I'd like to have as little 19 difference as possible. It makes sense to do it that 20

way. 21 To answer your first question you actually 22 read our mind. We're going to get to that in the next 23 slide. 24 MR. BALESTRINI: Okay. I'm not reading 25117

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com ahead. 1 (Laughter.) 2 MODERATOR BERRINGER: Andrew. 3 MR. DELASKI: Andrew Delaski of Appliance 4 Standards Awareness Project. 5 Can the Department take a moment just to 6 describe a bit more how you anticipate collecting the 7 manufacturer data? Is this data going to be collected 8 by ARI, handed over to you in one piece? How are you 9 going to weight manufacturers' data? How is that -- 10 or is it going to be collected by your consultants? 11 What's the process envisioned? 12 MR. RIVEST: That hasn't all been worked 13 out. Mike Rivest. Really that hasn't all been worked 14 out yet. I envision that ARI in their comments would 15 address how they propose to display that data to DOE 16 in the past. What we're looking for not just a curve, 17 but a curve supplemented with detailed breakdowns of 18 cost, of variable cost and tooling and investment 19 numbers that we can then use in manufacturing impact 20 analysis. I know that's more of a burden, but it also 21 helps us both in the validation and then in the 22 manufacturing impact analysis further on down. 23 In terms of the aggregation, I can only 24 speak to what's been done in the past. I don't know 25118

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com what ARI envisions, but typically the data comes in 1 from individual manufacturers and their costs are 2 aggregated based on shipment weighting of their 3

responses. 4 MR. AMRANE: Karim Amrane, ARI. And we 5 intend to follow the same process, so that's going to 6 be done the way it's been done in the past. 7 MR. RIVEST: Right, and what's a little 8 bit different and what's been done in the past is that 9 we would follow up with those manufacturers to ask 10 questions that would help us understand how that, why 11 the curve looks the way it does. And to first of all, 12 make sure that they feel that that curve is also 13 representative of their costs and give us an 14 understanding as we move down the curve of what design 15 options have been implemented. And that gives us 16 information we can then compare with our database of 17 design options and design option costs, so we can see 18 if the efficiency improvement that we believe are 19 going on are in line and also the costs that we have 20 so we'll have costs for fan motors, for example, going 21 to an ECM technology and we can compare that with what 22 they're implementing. 23 Here we have the benefit of a test 24 procedure that already allows us to calculate and to 25119

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com agree on what the energy savings of a certain design 1 implementation is. It is built with that flexibility, 2 which is wonderful. So I don't expect big 3 disagreements about what the efficiency improvement of 4 an upgraded motor would be here. 5 We might defer about the cost of that 6 motor. We have to understand where those cost 7 estimates come from and why they might be or not be 8 different. 9 MR. DELASKI: So a couple of follow-up 10 comments. Andrew Delaski of Appliance Standards 11 Awareness Project. 12 I'm glad to hear that Karim, ARI envisions 13 providing for detailed data to the Department that 14 they've provided in the past. However, back on 15 Steve's earlier point about the need for design 16 options to work for -- by providing that detailed data 17 to the Department it perhaps is a black box to the 18 Department and to its consultants, but to non19 manufacturer stakeholders, the data remains very 20 difficult to understand the components of it. 21 Therefore, the design option were done to validate 22 that data and show the benefits of different technical 23 options. It remains very important. 24 So -- and a second comment. In other 25120

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com rulemakings, other proceedings, the Department has 1 typically, my understanding, typically taken 2 manufacturer cost data and developed a market weighted 3 average to determine the cost to reach particular 4 efficiency levels, in essence, giving more weight to 5 the costs of a big manufacturer than say to the cost 6 of a small manufacturer, to come up with an average 7 figure. It's been a troubling approach to me to use 8 this sort of market weighted average cost numbers. It 9 may be that the manufacturers in this rulemaking that 10 are affected, come forward to you with a set of costs 11 that are very similar. However, in past rulemakings, 12 the costs, I believe, had been quite a distribution. 13 The distribution of costs in an energy 14 efficiency level are very important to understand what 15 the ultimate costs will be. I'll give an example of 16 why this is so important. It's getting to be summer 17 barbecue system. I'm going to put a new deck on the 18 back of my house. Okay? So to get this work done, 19 I'm a good consumer. I'm going to go out and I'm 20 going to get three bids. Maybe I'll get five bids to 21 get this work done if I'm really diligent. 22 I've lived in my house for 10 years. I've 23 had a lot of work done. I've done the kitchen, I did 24 the bathroom. I've done the attic, and I've always 25121

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com gotten lots of bids. And these bids come in all over 1 the map. The difference between my low bid and high 2 bid has been as much as 2.5 to 3 times for the same 3 job, where we really specifically spec out the job at 4 one time. 5 We're a cost careful family, so we're 6 focused on low cost. We often take the low bid and 7 that affects the second lowest bid. But I'm not 8 picking the guys 2.5, 3 times the highest cost because 9 that guy doesn't want the job, really. But if I pay 10 three times as much as the low cost, he'll gladly do 11 it for the higher price. 12 What the Department does in its 13 methodology, it goes out and it gets five bids and it 14 takes the average of those five bids based upon a 15 market weighted average. But when I do my job in my 16 backyard, I'm not going to pay the guy that gets the 17 job the market weighted average. I'm going to pay him 18 what he bid. 19 To bring this home to this situation, I 20 think what the Department should be looking at is not 21 the market weighted average, but rather what are the 22 costs coming in at the low end of the estimates. 23 Because those low ends tell you where the market is 24 going to go. The manufacturer who can make it at the 25122

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com lower end of that range is the manufacturer who is 1 going to define where the prices are going to happen 2 in that marketplace. 3 Because the other manufacturers will 4 quickly adjust and find ways to sharpen their pencils 5 to meet those costs. If they don't, then their market 6 shares will erode and market shares are the name of 7 the game in most market places. So they're going to 8 find ways to meet those lower costs. 9 The Department doesn't recognize that 10 market share can shift and that the market adjusts to 11 those adjustments, to those cost pressures. So I 12 think this weighted average taking of manufacturer 13 costs, if we re-examined, we looked at how we can take 14 into account how the manufacturer must compete in a 15 marketplace to look at the lower end of those 16 manufacturer ranges. So you need those distributions. 17 The distributions need to be there. But where are the 18 costs coming from for different manufacturers? 19 MR. RIVEST: That's not incompatible -- 20 (Laughter.) 21 Somehow I thought he was talking about me. 22 Mike Rivest, Navigant Consulting. That's not 23 incompatible with what we've proposed to do, which is 24 to have a range around that central tendency. It 25123

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com think we'll have to work with ARI to see exactly what 1 that might mean in this case. If it's, I mean, they 2 could supply an entire distribution. That would be 3 complex. It could be more something like high, low, 4 and medium or at least straight average versus 5 weighted average, something that would give a little 6 more understanding publicly to the underlying data. 7 MR. AMRANE: Karim Amrane, ARI. And yes, 8 we've done it in the past and we could do that high, 9 low, and medium, for example. But I'm a little bit 10 concerned with the comments that Andrew made because 11 basically you're trying to get the small manufacturers 12 out of business by proposing what you're trying to 13 propose here. Small manufacturers are going to have a 14 higher cost than larger manufacturers, and those need 15 to be taken into account in the analysis. Otherwise, 16 you'll be skewing the data by just considering the 17 larger manufacturers in the analysis, and that's not 18 how ARI provided data. I'm telling you right now. 19 MR. DELASKI: Andrew Delaski of Appliance 20 Standards Awareness Project. I'm not at all 21 suggesting that the manufacturer impact analysis 22 should be put aside and certainly impacts on small 23 manufacturers should be addressed through the 24 manufacturing impact analysis. And I also, I don't 25124

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com know who is going to have the high cost, who is going 1 to have the low cost. You know, you hypothesized that 2 the small manufacturers will have the higher cost. I 3 don't know that a priori, that that's going to be the 4

case. 5 In fact, I'm concerned that the 6 Department's historical approach by using a market 7 weighted average of cost, it does in fact, what the 8 Department will do in this case or has in the past, 9 correct me if I'm wrong, that that actually 10 disadvantages small manufacturers because their costs 11 are given less weight. So this is not about size of 12 manufacturer, it's about what the market can support 13 in terms of cost. 14 MODERATOR BERRINGER: Mike Rivest. 15 MR. RIVEST: To the extent, I can say for 16 a fact that there's a very strong correlation between 17 the size and the costs and its inverse, and it's 18 mostly because of fixed costs and R&D investments and 19 things like that. So market weighing tends to bring 20 down the cost compared to the straight average, but 21 you know, if ARI would provide both, we would get some 22 insight into that. If they were to provide a high and 23 low with an average, or maybe something short of the 24 lowest, but percentile, like a 25th percent. When you 25125

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com get low, then you're identifying someone's absolute 1 data submission which is problematic. So I mean, I 2 think we can work on giving a range of data without 3 divulging anyone's particular data point. 4 MR. DELASKI: Thank you. 5 MODERATOR BERRINGER: Any other follow on 6

comments? 7 Steve Nadel. 8 MR. NADEL: Okay, excuse me. Steve Nadel. 9 Mike Rivest made some comments and asked for further 10 feedback. I guess my initial reactions is that could 11 work provided that the data is provided in the TSD so 12 people can look at it. It's not just DOE reassures 13 itself that data is published to show what the 14 assumptions were and how this correlates. 15 You probably need to do it for the most 16 common classes but also for classes that are 17 technologically very different from the most common 18 classes, because it's hard to generalize. And that 19 based on the costs that come in, probably in the 20 ANOPR, there needs to be some provision that if some 21 costs look way out of line, that you may do additional 22 design option analysis between the ANOPR and the NOPR 23 to help address those issues. So I'm just trying to 24 explore ways to reassure us, and not have a black box, 25126

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com but I understand your desire to simplify the analysis 1 and not try to be working two streams for all 30 2 product classes. 3 MR. RIVEST: Mike Rivest, Navigant 4 Consulting. The process you described, that's exactly 5 what we envision which would be to have very publicly 6 available results of our validation, comparison of our 7 assumptions about cost efficiency versus the submitted 8 data. So it wouldn't be just a matter of putting the 9 dots on that graph, but in fact saying what the 10 generalities are and what are costs, assumed costs 11

were. 12 MODERATOR BERRINGER: Okay, Aris. 13 MR. MARANTAN: Okay, this next slide 14 really talks about the assumptions and the analysis 15 that we're going to put together for the markups. But 16 it sort of gets back to the question that Chris asked 17 earlier about the costs. 18 As you can see here, the costs that we're 19 talking about, or the price actually, is the 20 manufacturer's selling price. That's what we're going 21 to be including the output of the engineering 22 analysis. 23 That's derived from two things: full 24 production cost as well as the markups. The full 25127

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com production costs includes direct material, direct 1 labor, factory overhead, and depreciation. The 2 markups include sales and marketing, research and 3 development, interest and profit. 4 Since we don't have that kind of 5 information readily available, we have to use publicly 6 available information, and that's a matter of 7 collecting that information from sources such as the 8 SEC, from 10K reports, company annual reports, Dunne 9 and Bradstreet reports, Value Line, Standard and 10 Poors, and Ibbotson Associates. So that's the kind of 11 price that we're trying to establish here. Does that 12 answer a question? 13 MR. RIVEST: Mike Rivest, Navigant 14 Consulting. To answer your question specifically, 15 which was transportation costs, those are factored 16 into the lifecycle cost analysis, which you know, what 17 we're deriving here is just manufacturing price, FOB. 18 What does FOB stand for? Freight on Board. 19 Which means that loading dock of the 20 manufacturer. So the life cycle cost analysis, which 21 includes the installation, any changes in installation 22 costs or maintenance costs for example, are rolled up 23 into the next analysis we'll describe this afternoon 24 which is the consumer life cycle cost analysis. 25128

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MR. BALESTRINI: Chris Balestrini, FPA. I 1 realize then that you're going to have a situation 2 where your numbers, as far as costs, are going to be 3 extremely variable depending on region of 4 manufacturer, you know, what prevailing wage rates are 5 in certain parts of the country and stuff like that. 6 And are you going to back it down to try 7 to assign a cost per certain size to try to even it 8 out? You know, say manufacturer A provides a 9 refrigeration unit that's 100 square feet display 10 area, and B does one that's 75 square feet. Are you 11 going to try and break it back to a comparative 12 measure so that you can talk about the cost on a per 13 unit basis? 14 MR. RIVEST: Mike Rivest, Navigant 15 Consulting. What we do is in establishing the 16 baseline for the data gathering, we are declaring in 17 advance that the case we're looking at will be this 18 many total displayed area inches. 19 MR. MARANTAN: So you do define it. 20 MR. RIVEST: So we define that going in. 21 MR. MARANTAN: Okay. 22 MR. RIVEST: Then the problem becomes when 23 we set the standard, we have to set the standard for 24 a broader range of a total display area. So as we saw 25129

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com earlier, if there is a need to adjust the standard to 1 account for the total display area, we do that in a 2 second step, which might be a regression analysis, for 3 example. 4 MODERATOR BERRINGER: At this time, let's 5 look at Item 5.4, the Department seeks comment on the 6 market approach proposed developing estimates for 7 manufacturer's selling price, as Aris mentioned, the 8 different sources that we're looking at, if there's 9 any additional sources that you think would be used or 10 any additional information, now would be the time to 11 let us know. 12 MarshalL? 13 MR. HUNT: Marshall Hunt, PG&E. I just am 14 concerned that is it always true that its manufacturer 15 direct sales or is there one or two or even three-step 16 to market process? Is that allowed for in the 17 analysis? It would be nice if it was so simple that 18 the manufacturers always sold directly, but I doubt 19 that's not really the case. 20 MR. MARANTAN: Yes. To answer that, 21 that's actually covered in an LCC analysis which we'll 22 hear about after lunch. It is accounted for, not just 23 direct sales. 24 MR. HUNT: Thank you. 25130

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MODERATOR BERRINGER: Any other comments 1 on markup? Okay, we'll continue with the next slide. 2 MR. MARANTAN: This slide is the last one 3 for engineering. We have two topics here. The first 4 one is proprietary designs. Here, the Department will 5 consider in its engineering analysis all of the design 6 options that haven't been screened out previously in 7 the screening analysis, including proprietary designs. 8 So the Department will consider these designs in 9 subsequent analyses only if it's not a unique path to 10 a given efficiency level. 11 If the proprietary design is the only 12 approach available to achieve a given efficiency level 13 than the Department will reject that efficiency level. 14 So there's an item here for that 15 particular topic. I'll just go on to the next one and 16 cover both at the same time. 17 The second one is outside regulatory 18 changes. Here, the Department must also consider the 19 effects of other regulatory changes that can impact 20 manufacturers of these equipment. For example, in the 21 refrigeration industry, due to the phaseout of CFCs 22 and HCFCs, the industry must convert over to HFC-based 23 refrigerants. So that's one of those outside 24 regulatory things that the Department must consider. 25131

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com So the item we request feedback on if 1 there are any other outside regulatory changes. So 2 with that, Bryan? 3 MODERATOR BERRINGER: So we are looking at 4 Item 5.5, are there proprietary designs that the 5 Department should consider for any of the products 6 under consideration by this rulemaking? If so, how 7 should the Department acquire cost data necessary for 8 evaluating these designs? 9 So again, are there any designs -- we know 10 they're proprietary that would be at issue for -- that 11 other manufacturers could not produce these, a similar 12 unit or technology. 13 Not seeing any. Item 5.6. Are there 14 additional outside issues that the Department should 15 consider in its analysis for commercial refrigeration 16 as Aris talked about there, might be other regulatory 17 areas or other issues that we need to consider that we 18

are not. 19 I see Dave Winiarski. 20 MR. WINIARSKI: I just wanted to make a 21 comment here related to remote equipment and the issue 22 that struck me when we were talking about this was 23 that in the use of the ARI 1200 test procedure, the 24 COP of the remote condensing system is described in 25132

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com the test procedure and specified. And I guess one of 1 the things that if we decide to go the route of using 2 that test procedure is that's listed COP as a function 3 of suction temperature going to be consistent with the 4 use of newer refrigerants. 5
MODERATOR BERRINGER: Yes? 6 MR. TANNER: Bob Tanner, Hill Phoenix. 7 That chart that's in ARI 1200, we just picked a 8 standard compressor that's offered. I can't remember 9 the exact model, but it was one that was frequently 10 used in parallel rack systems as a normalizing which 11 is picked as a standard compressor to -- once again, 12 the standard was developed to compare data not 13 necessary to give specific -- it's very close. It's 14 a pretty off-the-shelf technology compressor, but 15 you're right, it would not take into account any more 16 efficient options that have come down that road. 17 MODERATOR BERRINGER: Larry? 18 MR. HOWINGTON: This is Larry Howington, 19 Hill Phoenix. 20 However, from the standpoint of rating and 21 getting a comparison I don't think there will be 22 inverse relationships by not using all the 23 refrigerants and so on. So that table can certainly 24 be revised if it were needed to if some refrigerant 25133

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com were to come out later, but for relative comparison, 1 it should serve very well, actually, as you go 2 forward. 3 Certainly, you'd be welcome to analyze 4 other refrigerants and see how much difference it 5 would make, but relatively speaking, I think it would 6 make very little difference. 7 MODERATOR BERRINGER: Any other comments? 8 All right, we're at that point as far as 9 lunch here. If we can have everybody back here at 10 1:30. We're about a half hour behind schedule and if 11 you need directions, actually to the cafeteria, Brenda 12 has some maps. 13 MR. NADEL: Would you want to consider a 14 45-minute lunch break? No. 15 MODERATOR BERRINGER: General Counsel says 16

no. 17 (Laughter.) 18 It's very difficult to get lunch and get 19 back here in 45 minutes. We'll probably start at 20 1:30. Thank you. 21 (Whereupon, at 12:28 p.m., the meeting was 22 recessed, to reconvene at 1:30 p.m.) 23 MODERATOR BERRINGER: Without further ado, 24 I'm going to give it to David Winiarski, who is going 25134

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com to discuss the last couple of sections on markup, 1 energy use and end use load characteristics, life 2 cycle cost, and payback analysis. 3 MR. WINIARSKI: Again, my name is David 4 Winiarski. I'm a Research Engineer with Pacific 5 Northwest Laboratory, and I'll be presenting for the 6 Department. 7 A number of the analysis steps here for 8 the remainder of the afternoon, starting with the 9 markups for equipment price determination, energy use 10 and energy use load characterization, life cycle cost, 11 and payback period analyses, shipments analysis, and 12 national impact analysis. And that will lead us all 13 the way through to the ANOPR phase of the rulemaking. 14 So to start off with, we'll talk a little 15 bit about markups here. The purpose of the markup 16 analysis is to, one, develop overall price markups for 17 the distribution change from the manufacturer price to 18 the consumer end user. And then, once we've developed 19 those markups, we try to use them to establish 20 consumer prices for both baseline equipment and for 21 equipment at various higher standard levels that are 22 going to be considered. 23 The starting of that process is really to 24 try to identify the distribution channels for the 25135

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com equipment and all the categories of equipment that 1 were going to be covered under this rulemaking. The 2 Department has essentially identified three sort of 3 prototypical distribution channels for the equipment. 4 Distribution channel 1, shown off to the 5 left, is basically going from a manufacturer who sells 6 the product to a distributor or a wholesaler. The 7 distributor or wholesaler then resells the product to 8 a mechanical contractor. The mechanical contractor 9 would then resell the product and the product's 10 installation to a consumer. For instance, in this 11 case a good example might be an independent or a small 12 grocery store. 13 Distribution channel 2 is a slight 14 variation on that, and in this case the manufacturer 15 sells to a distributor, but the distributor then sells 16 directly to the end consumer of the product. It 17 doesn't go through a mechanical contractor firm. 18 The Department envisions this to be 19 characteristic of perhaps self-contained equipment, 20 where a mechanical contractor may not actually be 21 necessary to install the equipment and put it in 22 service. Okay? But there certainly may be other 23 categories of equipment for which this distribution 24 channel might be appropriate. 25136

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com Distribution channel 3 is what's commonly 1 referred to as national accounts. In this 2 distribution channel, basically the manufacturer sells 3 directly to the end user or consumer. Distribution 4 channel 3 may be very important for this rulemaking, 5 dependent on sort of the volume of product that's 6 basically purchased into large national supermarket 7 chains, who may be making that purchase directly from 8 the manufacturer. And as some of us talked during the 9 break, specifying exactly what they want from the 10 manufacturer when they purchase that equipment. 11 Once the Department has identified 12 distribution channels, it's going to go through the 13 process of trying to identify markups for product as 14 basically going from a manufacturer price for the 15 product to a price essentially paid by the end user. 16 Markups relate the consumer's price to the cost of 17 goods sold. That will include the -- if we're looking 18 at the entire distribution chain, that's basically 19 going from, again, the manufacturer's selling price 20 for the product to its eventual shipment to the -- and 21 placement on site. 22 The markups -- the two types of markups 23 that we're going to talk about here -- and the 24 Department has used in previous rulemakings -- we 25137

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com describe here as sort of baseline markups as well as 1 incremental markups. Baseline markups are used to 2 describe basically what's the current markup in the 3 case of a fixed sort of a baseline standard until it 4 gets installed in the field. 5 Baseline markups provide a consumer price 6 that basically represents all of the costs in the 7 distribution chain, plus any additional profit that's 8 made by the members of the distribution chain. The 9 Department recognizes that when the product is -- or 10 when the product manufacturer price may increase, for 11 example in the case of standards due to a change in 12 efficiency, that some of those costs in the 13 distribution chain will increase perhaps 14 proportionately. 15 However, other costs in the distribution 16 chain, in a relatively competitive market, are 17 expected to remain fixed. So what we refer to as 18 incremental markups are markups that are used to 19 assess an incremental change in the manufacturer's 20 price and a corresponding incremental change in the 21 consumer's price for the product. 22 Incremental markups cover only those 23 expenses that vary with the costs of goods sold. In 24 this case, again, expenses that increase due directly 25138

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com to an increase in efficiency. For example, insurance 1 on product shipments might be an example of something 2 that would be fairly proportional to an increase in 3 the original cost for the product. 4 However, other costs, in particular things 5 like direct labor costs, salaries, payroll, and 6 occupancy expenses, may not increase. And those would 7 be held fixed in the calculation of incremental 8 markups. 9 With that little introduction, I'd like to 10 point out that we have four requests for feedback from 11 the stakeholders here regarding the development of 12 markups. In the first case, two of those questions 13 basically make reference to a very recent standard and 14 recent technical support materials that were developed 15 for commercial unitary air conditioners. That's the 16 CUAC you see up there. 17 And one of the things that we're 18 interested in is looking at what similarities 19 stakeholders expect to see between the distribution 20 chains and the relative markups on each point in that 21 distribution chain in refrigeration equipment as 22 compared to the similar -- the markups that were 23 developed for the commercial unitary air equipment. 24 So, Bryan? 25139

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MODERATOR BERRINGER: So Item 7.1, as Dave 1 mentioned, if you go back a couple slides, you'll see 2 the distribution change is the question here. The 3 Department requests information from stakeholders on 4 whether the distribution pass of the commercial 5 refrigeration equipment covered under this rulemaking 6 would be similar to those, to the commercial unitary 7 AC, and, if not, how the two might differ. 8 The Department also requests information 9 on the relative fraction of shipments expected for 10 each path in the appropriate distribution chain for 11 the commercial refrigeration equipment covered under 12 this rule. So it's -- is there any unique situations 13 as far as distribution change, as far as this type of 14 equipment? Or are there -- in this case, are their 15 national accounts is one of the third bars, as you now 16 have the slide up on there. 17 No comments? Are people just sort of 18 absorbing that? 19 (Laughter.) 20 Thumbs up? Thumbs down? Halfway? 21 MR. WINIARSKI: I guess I would ask if 22 that's -- if it's -- if there's information that could 23 be used, or if there's data sources that could be used 24 to characterize relative shipments here. 25140

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MR. AMRANE: Karim Amrane, ARI. I think 1 that we need to go back -- we need to go back and 2 assess. You're asking for what's the percentage 3 eventually, what kind of distribution will be used, 4 the percentage of those being shown to channel 1 and 5 channel 2. And we don't have the information right 6 now, but we can certainly go back and ask for that. 7 MR. WINIARSKI: Right. And, certainly, 8 the corollary to that is: are these the correct 9 distribution chains, or is there something we're 10 missing? 11 MODERATOR BERRINGER: Right. Okay. We'll 12 go on to Item 7.2. "The Department requests feedback 13 on, at the overall markups for the commercial 14 refrigeration equipment covered under this rulemaking 15 for each path in the distribution chain are likely to 16 be similar to those developed under commercial unitary 17 AC for the same distribution facts." 18 So we're certainly doing a similar 19 analysis. Some people -- most people probably weren't 20 involved in that rulemaking there in this room, other 21 than ARI. So, you know, I would -- yes, Bruce. 22 MR. HIERLMEIER: Bruce Hierlmeier, Zero 23 Zone. I mean, are you going to tell us what that is? 24 You're asking us to compare -- are similar to 25141

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com something? I don't know what it is. 1 MODERATOR BERRINGER: Well, I think what's 2 in the slide is the distribution chain, is what we did 3 in the commercial AC. It's a similar process. So I 4 don't know if you have to go back to that rulemaking, 5 but does that look right, or, again, are there any 6 unique situations? 7 I see Bob, and I'll come back to Bruce. 8 MR. TANNER: Bob Tanner, Hill Phoenix. 9 Just like what Bruce said, we have no idea what the 10 markup is for that market. We can't even compare it. 11 MODERATOR BERRINGER: Can you go back to 12 the slide? 13 MR. AMRANE: I thinking not about the 14 market itself, but I'm thinking about the distribution 15 channels. Is it okay? Is it right? Or -- 16 MR. TANNER: That's not what the second 17 question said. The second question said, "Are the 18 markups the same?" and we have no idea. 19 MR. WINIARSKI: Let me first talk, because 20 I'm not sure who -- I know some of the companies are 21 organizations who were actually involved in that 22 rulemaking. Basically, in terms of the structure of 23 the distribution channels -- and I'll see if I can get 24 this right. One of the key differences is in those -- 25142

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com in that rulemaking there was a national accounts 1 channel, which is very similar to this one. 2 There was also a -- for the other 3 distribution channels, there was a general contractor 4 involved. And some markups as the -- basically, the 5 general contractor oversaw and added additional 6 markups to the mechanical contractor. In addition, 7 there were few -- there were essentially no 8 distribution channels where you went directly from a 9 distributor to a consumer. A contractor was always 10 involved in the installation. 11 MODERATOR BERRINGER: Okay. If I may get 12 Bob's question, he's asking for the comparison on this 13 question, do you know -- do you recall what the 14 percentages were for the commercial AC, what the 15 markups were for those particular distribution 16 channels? I think that's the -- that's sort of what 17 I think Bob was asking. 18 MR. AMRANE: We have the information. 19 MODERATOR BERRINGER: Okay. Karim says he 20 does have information. 21 MR. AMRANE: Yes. We have the 22 information, and we can share it with you guys. 23 MODERATOR BERRINGER: Okay. I have -- let 24 me go to Jim Raba and then -- 25143

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MR. RABA: Jim Raba, DOE. On the front 1 page of your handout for the slides and throughout, 2 there is a website here for the Department, which 3 points you to the compliance standards page. And on 4 that page of our website are many rulemakings, both 5 residential and commercial. 6 This rulemaking for commercial 7 refrigeration appears. But also, the commercial 8 unitary air conditioning rulemaking is there also. 9 The technical support document, TSD -- if you're 10 curious it's a good question. You know, I was 11 thinking, "Gee, are they going to ask that question?" 12 It's true. If you want more information as to what 13 these are all about, how we arrived at them, and the 14 other markups data, the technical support document, 15 it's really available to the public under the 16 commercial unitary air conditioning title or subtitle 17 on that same website. 18 So that may be something to look at 19 afterwards offline. You can come back with comments 20 later, or at least understanding later on, too. 21 Does that help? Of course it does. 22 MR. WINIARSKI: I think it does. The 23 other thing, although I don't have the markups for 24 each channel here -- we didn't present that in there 25144

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com -- the overall markups that were calculated, when you 1 considered all channels and the relative fraction of 2 shipments that went to each channel, was I think on 3 the baseline product about 2.3, 2.31. 4 So that's basically a multiplication 5 factor you would add to the -- or not add to, you 6 would basically multiply the manufacturer's price by 7 that to get the end cost as it's brought into the 8 building where it's going to be used. 9 An incremental price, which held certain 10 of the costs constant, was approximately I think 1.56. 11 So that's the order of the markups. 12 MODERATOR BERRINGER: All right. Are 13 there any other comments? We could definitely get the 14 information to you as far as what those actually were 15 for the commercial unitary AC, and Karim says he also 16 has that information. 17 MR. AMRANE: Karim Amrane, ARI. I recall, 18 Dave, also the markups were a function of the 19 equipment, site of the equipment. Was it -- 20 MR. WINIARSKI: The markups weren't. The 21 installation costs were. 22 MR. AMRANE: Oh, they were. 23 MR. WINIARSKI: Right. The markups 24 weren't. However, one thing that's broached in the 25145

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com rulemaking is in that particular rulemaking markups 1 were calculated differentially for products going into 2 new construction versus products going as 3 replacements. And the reason for that is, again, 4 because the general contractor was expected not to be 5 involved in typically a retrofit situation and marking 6 it up. 7 In this case, again, it's not clear. We 8 don't have a general contractor shown in our 9 distribution channel, so that didn't appear to be an 10 issue. But we certainly welcome any comments you have 11 on that. 12 MODERATOR BERRINGER: Okay. Any further 13 comments on 7.2? Okay. Why don't we move on to 7.3? 14 "The Department requests feedback on its proposal to 15 use incremental distribution chain markups for the LCC 16 analysis." Any comments on that? Marshall? 17 MR. HUNT: Yes. Marshall Hunt, PG&E. As 18 I remember it, those markups could be pretty 19 substantial. And if we by weighted average could 20 figure out the different stream, I'd want to at least 21 consider that. In other words, I would hate to box us 22 in to the highest markup. 23 So do you remember -- you got up to 2.31, 24 right? And if we find out this kind of product has a 25146

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com more market -- more of a market process that's 1 cheaper, we should look at that. 2 MR. WINIARSKI: You're speaking in terms 3 of -- typically, what was done in that rulemaking and 4 what we expect to do here would be develop sort of 5 weighted average markups -- 6 MR. HUNT: That's fine. 7 MR. WINIARSKI: -- for each distribution 8 channel, you know, for all of the distribution 9 channels put together. 10 MR. HUNT: Yes. Rather than take exactly 11

one. 12 MR. WINIARSKI: Yes, exactly. We 13 typically wouldn't take one and not necessarily the 14 highest every day. 15 MODERATOR BERRINGER: Any other feedback 16 or comments on 7.3, then? Okay. 17 Item 7.4, "The Department seeks comment on 18 the sources of relevant data that could be used to 19 characterize markups for commercial refrigeration 20 industry." Okay. Seeing -- Karim? 21 MR. AMRANE: Karim Amrane, ARI. I guess 22 a question to you would be: are you reaching out to 23 the distributors? Are you reaching out to the 24 technicians, to contractors, to find out what the 25147

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com market pays in that particular industry? 1 MR. WINIARSKI: That's the plan, and how 2 much will depend, again, on -- how much we reach out 3 depends on sort of the amount of product that goes 4 through each channel, obviously. We want to 5 concentrate our efforts. 6 I think one of the -- famous man, 7 Einstein, said, you know, we want things to be as 8 simple as possible, but no simpler. And I think 9 that's basically the process by which we're going, so 10 we're looking to get information, but we don't want to 11 go down blind alleys if we can. 12 One -- I was going to comment, Karim, 13 because you mentioned that -- that one source of 14 information is the HARDI, Heating/Air conditioning 15 Refrigeration Distributors International. That will 16 give us some good information on the wholesale market 17 price. 18 MODERATOR BERRINGER: Okay. Any other 19 follow-up on 7.4, then? All right. So now we'll go 20 to the next slide. 21 MR. WINIARSKI: Okay. Once we move from 22 the markets here, in order to characterize the life23 cycle cost of the different standard levels, we need 24 to have some assessment of the energy impact of moving 25148

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com between standard levels. That's done in this bullet 1 here, or chevron here, the energy use and end use load 2 characterization analysis. 3 The Department is going to propose 4 something here. We want to get a lot of feedback on 5 whether this is the right direction to go. 6 The purpose of the analysis is eventually 7 to come up with the energy savings to go from higher 8 standard levels. And to do that, we have to define a 9 process. The process that was proposed here is to 10 develop energy use and peak electricity demand 11 characteristics for buildings that use commercial 12 refrigeration equipment, and then use the energy use 13 figures from the buildings to sort of characterize the 14 unit energy consumption for different standard levels. 15 The question jumps to mind, why -- why are 16 we interested in looking at building-level analysis? 17 The concern here was that for most of the types of 18 buildings into which these products go the energy use 19 from the commercial refrigeration equipment has both 20 a direct electrical consumption associated with it and 21 its subsequent compressor, but it also has a 22 significant impact on the HVAC use in the building, 23 heating and ventilating in the building, air 24 conditioning in the building. 25149

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com So the idea was to use the building-level 1 analysis to try to assess the net energy impact of the 2 change in standards. The graphic shown here basically 3 describes one particular concern. A large fraction of 4 these products are remote display products. The 5 compressor -- or the condenser system is basically 6 outside the building. The evaporators are inside the 7 building. And essentially what's happening is you are 8 refrigerating that building when you remove heat from 9 it. 10 Now, what that does is, basically, if you 11 didn't do that, you'd be air conditioning the building 12 likely So there is a net differential because the 13 efficiencies between the air conditioner and the 14 refrigeration equipment aren't quite the same. There 15 is a net differential in the impact on the actual 16 energy costs or energy consumption of the building. 17 In order to go down this path, the 18 Department proposed to use some whole building 19 simulation tools. These tools -- there are certain 20 tools that basically have been designed and 21 incorporate commercial refrigeration equipment models 22 within the overall building simulation tool. And we 23 could use those to assess this net energy impact. 24 In order to do that, we need to actually 25150

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com construct buildings. And so the Department's proposal 1 here was to basically build up prototypical buildings 2 -- in this case, a supermarket and a smaller building, 3 for instance a grocery or convenience store, and then 4 basically try to assess the impacts of changes in the 5 energy utilization of the commercial refrigeration 6 equipment on the actual energy use of the building. 7 We would do this by doing these 8 simulations across the country, in different regions, 9 and then use appropriate weights based on things like 10 building construction levels to assess or to weight 11 the impact across these different regions of the 12 country. 13 Now, that is not necessarily as simple as 14 it could be done, but it's trying to assess or address 15 a particular issue that we know is out there. So one 16 of the questions is whether that's an appropriate 17 methodology, or do we do something similar or 18 something simpler. For instance, just using the 19 results directly from the test procedure would be an 20 example of a simpler approach. 21 So, Bryan? 22 MODERATOR BERRINGER: Okay. So that leads 23 us to Item 6.1. "The Department seeks stakeholder 24 input on whether the impact of higher efficiency 25151

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com refrigeration equipment on the building space 1 conditioning loads is significant enough to warrant 2 taking them into account in the energy analysis. And, 3 if so, what methods could be used to estimate the net 4 energy consumption and the load impacts of higher 5 efficiency commercial refrigeration equipment in 6 buildings using this equipment?" 7 I see Don Brundage. 8 MR. BRUNDAGE: Don Brundage, Southern 9 Company. Really, the only way you can do it is on a 10 whole building basis, because there's so many 11 interactions between the refrigeration equipment and 12 the HVAC in the building. I would agree that the 13 whole building approach is the correct one. 14 MODERATOR BERRINGER: Okay. Karim. 15 MR. AMRANE: Karim Amrane, ARI. I would 16 agree as well. I think this is the right way to go. 17 But I would like to get more input from David on what 18 kind of models are we going to use to simulate the 19 buildings, and whether those simulation tools are 20 appropriate in simulating commercial refrigeration 21 products. 22 MR. WINIARSKI: At this point, we have not 23 selected the tool necessarily to use. There are three 24 tools that I know that are out there and readily 25152

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com available. Probably the furthest along in terms of 1 how well it can simulate buildings is the DOE 2.2 tool 2 that has been developed by J.J. Hairsch and has 3 largely been -- the development of this refrigeration 4 model has been funded through the State of California 5 and a number of its exercises. So that was a likely 6 choice. 7 Another possible option is the 8 Department's Energy Plus tool, but that has probably 9 gotten much less review. 10 MODERATOR BERRINGER: Tom Eckman? 11 MR. ECKMAN: Tom Eckman, Northwest Power 12 and Conservation Council. The issue of significance 13 raises the question of whether or not how significant 14 it is would actually turn the standard levels to be 15 different by climate zone, and whether the Department 16 is prepared to deal with that by setting different 17 standards for different parts of the country based on 18 climate. If it's indeed significant, it might turn 19 the analysis. 20 MR. WINIARSKI: If I could speak to that, 21 there's a couple ways in which it may be significant, 22 and one of them is actually the variability across the 23 continent. Another area it may be significant is this 24 area of sort of tradeoffs between whether you're 25153

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com cooling the building with the commercial AC equipment 1 or the refrigeration equipment. 2 MR. ECKMAN: I'm not arguing whether it is 3 or isn't. I'm saying that if it's so significant that 4 it makes the economics change across the country, are 5 you prepared to promulgate standards that are climate6 specific? 7 MR. LEWIS: Ron Lewis, DOE. We can't do 8 that. We can't promulgate separate standards for 9 different parts of the country. 10 MR. ECKMAN: Is there a legal prohibition 11 against it? 12
MR. LEWIS: Yes. 13 MODERATOR BERRINGER: I see Karim has a 14 follow-up. 15 MR. DePRIEST: Tom DePriest, General 16 Counsel. Congress directed us to establish national 17 standards. 18 MODERATOR BERRINGER: Karim, did you have 19 a follow-up? 20 MR. AMRANE: Just to -- I mean, that's a 21 federal standard. It's one standard for the entire 22 country, and that's true for other parts as well. 23 MR. LEWIS: Right. Ron Lewis again. The 24 significance you're talking about where the 25154

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com differential -- there may be ways we can consider it 1 or review it. We just can't have different outcomes 2 for different places. So inputs as far as elements 3 and things that we need to take note of will be 4 appreciated, but the actual outcomes we can't do. We 5 can do sensitivity analysis. We can do various 6 different things. 7 But we set a national standard, and 8 especially as we're regulating the manufacture of 9 products that may be distributed anywhere and a 10 national chain may buy equipment that they further 11 distribute to construction sites, it would be very, 12 very tough to monitor and enforce as well. So the 13 statutes require us to have a single statute or a 14 single regulation. 15 MR. ECKMAN: Tom Eckman again. 16 Acknowledging that or accepting that as it is, then it 17 seems to me as we collect the sales weighted 18 information about where these go we need to associate 19 those with the climate effects, so that we have the 20 data that certain refrigeration systems are sold in 21 certain climates. 22 And, you know, to the extent that there's 23 an economic impact associated with that, the weighting 24 needs to be representative, weighted by the climate 25155

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com effects that actually are where the products are sold. 1 So the -- you know, if indeed this is significant, I 2 don't -- I'm not convinced yet that it is, but it 3 might be enough. And if it is, because there are 4 places where there are no cooling loads, or very 5 little, and so this doesn't turn out to be much. And 6 there are places where there are large cooling loads 7 and you've got to make it up. 8 So I think it complicates the analysis, 9 but I think it's the right way to do it. I just think 10 it complicates the analysis. 11 MODERATOR BERRINGER: I see Andrew, and 12 then I see Chris, and then I see Marshall. 13 MR. DELASKI: Andrew Delaski, Appliance 14 Standards Awareness Project. Two comments. One, to 15 follow up on Tom's, there's been a lot of discussion 16 about the departments that can do a schedule on this 17 on its rulemaking. And I think you put it well when 18 you said let's keep the analysis as simple as possible 19 without becoming -- but still accurate. 20 And that's what we're after here -- 21 something that accurately represents what's happening, 22 but yet doesn't add a level of complexity that bogs 23 down the -- bogs down your work. So we want to 24 represent what's happening, but let's not -- let's 25156

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com not lose the forest -- lose the trees from the forest. 1 In response to this question of: can the 2 Department set two standards? Clearly, you've come to 3 a conclusion as to what you can do, and that has 4 happened in the course of another proceeding. 5 Attorneys that we've consulted with have a different 6 conclusion as to what your authority is, and I don't 7 want to -- we don't need to debate this right here. 8 But just for the record that we don't agree with your 9 conclusion that you can't set two standards. 10 MODERATOR BERRINGER: Okay. I saw Chris 11 and then Marshall. 12 MR. BALESTRINI: Chris Balestrini, FPA. 13 There is other things that can come into this 14 variation, too, though. You know, climatology is part 15 of it, but the other thing is consumer traffic, you 16 know, things like that. 17 There are so many things that go into it 18 that I think for the purpose of rulemaking you should 19 probably not even consider some of this stuff for the 20 simple fact that providing the information on how your 21 equipment works to the consumer, which is the grocery 22 stores or whatever, let them judge for themselves how 23 and where they want to -- they want to use the 24 equipment that you've made. 25157

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com I mean, and if you really want to get into 1 the nuts and bolts of it, call for feedback from those 2 people, because they have engineers on their staffs. 3 They're calculating energy usage. You know, I can't 4 expect them -- I -- if I'm sitting where the 5 Department of Energy is, I can't expect a manufacturer 6 to be able to know the energy consumption of a 7 Wal-Mart store around the corner, you know. 8 And you've got a good partnership here 9 between -- you know, between the Department of Energy 10 and the manufacturers. But to close the loop you 11 really need to get involvement from the end user as 12 well. And that's the one piece I see that's glaringly 13 missing here today is any kind of input, especially 14 when it comes to the life-cycle costs. They're the 15 ones that are going to give you the best information, 16 I would believe, you know. 17 And maybe one of the things coming out of 18 this meeting is to have some kind of game plan to get 19 some involvement from those folks, too. 20 MODERATOR BERRINGER: Okay. Thank you. 21 Marshall? 22 MR. HUNT: Marshall Hunt, PG&E. Just as 23 a devil's advocate, if we really cannot have climate24 adjusted standards, then why go through this exercise? 25158

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com Let's just get the most efficient equipment we can and 1 go from there, because like you said, Chris, the 2 mechanical engineer, which I am one, would -- is 3 looking at a project. If you have certain kinds of 4 cases, you're going to have a certain amount of 5 cooling capacity there -- it's open more -- than if 6 you had closed cases, and you've got to design the 7 store that way. 8 So, yes, I would prefer to have this 9 analysis, but only because I think there is climate 10 distinctions that need to be drawn. 11 MR. BALESTRINI: One thing I want -- this 12 is Chris Balestrini again. One thing I wanted to 13 throw in here, too, is if you want to make the 14 climatology piece go away, put it in your test design 15 for your efficiencies and stuff like that, that you're 16 going to put these refrigeration units in a room 17 temperature such and so. 18 Specify the range for the conditions that 19 you're looking to do your efficiency testing for the 20 outside environment outside of your coolers and 21 freezers and stuff, too, and that way you can make the 22 whole climatology -- climatological piece just go 23 away, because you've set up that control in your 24 testing protocol to basically say, you know, most 25159

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com grocery stores across the country operate in a 65- to 1 70-degree window or whatever. So you make sure all 2 your testing for efficiency is done there. 3 MODERATOR BERRINGER: Okay. I saw Steve, 4 and then Don. 5 MR. NADEL: This is Steve Nadel. In terms 6 of this question about how to analyze things, I think 7 I agree with you that for large systems you do need to 8 look at the directions with the building, the heating 9 and cooling load. 10 However, I wonder for small, self11 contained equipment whether it's just going to be the 12 tail wagging the dog, and the information will be so 13 dominated by the building effects that you won't 14 correctly get at the individual equipment effects. 15 And I wonder for the smaller self16 contained equipment, you know, an eight cubic foot ice 17 cream freezer, whether working up from more of a 18 residential refrigerator freezer model -- I know DOE 19 was doing some work a couple of years ago adapting 20 those models for self-contained commercial products, 21 you know. 22 It may not be one size fits all, as 23 opposed to larger systems, whether it's a supermarket 24 system or, you know, a whole wall system in a 25160

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com convenience store, that you need the building 1 approach. But for self-contained small systems I'm 2 not sure the whole building analysis is most 3 appropriate, and certainly whether it's the simplest. 4
MODERATOR BERRINGER: Don? 5 MR. BRUNDAGE: Don Brundage, Southern 6 Company. Just a quick comment on Chris Balestrini's 7 comment. If you get into some of your products like 8 open cases in a cooling dominated climate, doing the 9 whole building approach means you take credit for the 10 cooling losses into the store against the air 11 conditioning. 12 So it has some significant impacts on what 13 efficiency level you'd come up with. So I think it's 14 to your advantage to include a whole building 15 approach, especially on open cases. 16 MODERATOR BERRINGER: Okay. Any 17 additional comments? Seeing none, we'll go to 18 Item 6.2. "The Department specifically requests input 19 on the variability of defining a limited set of 20 building prototypes for all equipment classes in order 21 to characterize energy use. If a limited set of 22 building prototypes is acceptable, the Department 23 seeks stakeholder input on how to properly 24 characterize the building prototypes." 25161

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com Any comments on that? I see Tom Eckman. 1 MR. ECKMAN: Tom Eckman again. Certainly, 2 picking a grocery and a small deli, or what have you, 3 from a physical configuration may be pretty 4 straightforward, but you've got different HVAC 5 systems. Some are packaged depending on the size of 6 the unit; some are not. 7 I suspect you'll have to -- that even if 8 you pick the same building configuration you're going 9 to have to deal with gradations from the Wal-Mart to 10 the Kroger to the superstore/non-superstore. Those 11 probably have different space cooling/space heating 12 interactions. Again, this all makes the analysis more 13 complex. It's -- as Marshall said, if we're not going 14 to make it different by climate, it may be overkill. 15 It would be nice to look at the 16 sensitivities to see whether it would, but in the end 17 getting the rulemaking done on schedule -- I may bite 18 my tongue for saying this, but, you know, less 19 complexity might be better. On the other hand, if 20 it's significant, it probably -- as Andrew said, some 21 of us don't necessarily agree that one rule fits the 22 entire country. It would certainly provide us with 23 information to discuss that point further. 24 MODERATOR BERRINGER: Okay. Thank you. 25162

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com any other comments? 1 Okay. We'll go on to Item 6.3, then. 2 "The Department seeks data or data sources that could 3 be used to characterize the energy use in a loading of 4 commercial refrigeration equipment." So are there any 5 data or data sources out there? Scott? 6 MR. MITCHELL: Scott Mitchell, Southern 7 California Edison. I just wanted some clarification 8 on what you meant by "loading." Is that product 9 loading or load on the grid? 10 MR. WINIARSKI: We basically aren't -- the 11 term "loading" there may have come across a generic. 12 Basically, what we're trying to do is to get 13 information primarily with regard to kilowatt hour 14 type consumption. But it may be that in some cases 15 what we're actually going to get is information with 16 regard to refrigerant load from the display case 17 itself on the compressor. So either type of 18 information would be useful. 19 MODERATOR BERRINGER: State your name for 20 the record, please. 21 MR. RIVEST: This is Mike Rivest. I think 22 we're struggling a little bit with finding out what 23 the value of the whole building modeling really might 24 be, recognizing that it could be important because of 25163

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com the interactions of the HVAC system, but not really 1 knowing the magnitude of that. 2 Now, I happen to have looked over an EPRI 3 study on this topic where they modeled refrigeration 4 -- more efficient systems in various parts of the 5 country. And the conclusions, from what I can make, 6 was that it really didn't impact the economics -- you 7 know, recognizing that people's systems will be 8 adapted to their climate anyway, their HVAC systems, 9 and you have to make a lot of assumptions in your 10 modeling as to how well you recuperate the 11 refrigeration in one side of the store to the whole 12

store. 13 So one possible avenue is to do a little 14 bit of research on case studies and to -- where this 15 very issue has been studied and to quickly come back 16 to you maybe with findings about the magnitude of this 17 issue, to see if it's worth the effort of the 18 modeling. 19 MODERATOR BERRINGER: Bob Tanner? 20 MR. TANNER: Bob Tanner, Hill Phoenix. To 21 answer Item 6.3, most of that data is available on the 22 manufacturer's website -- 23 MR. WINIARSKI: In terms of -- 24 MR. TANNER: -- and talking about the BTU 25164

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com load of a refrigerated display case. 1 MR. WINIARSKI: Oh, yes. Right. 2 MR. TANNER: Our website has all that 3 information right on it. I think everybody else's 4 does, too. 5 MR. WINIARSKI: Okay. 6 MODERATOR BERRINGER: Larry? 7 MR. HOWINGTON: Larry Howington, Hill 8 Phoenix. We also could give you some guidance in 9 terms of how we provide customers information to do 10 calculations for air conditioning credit, because a 11 lot of times, you know, they want that and they use 12 that information in sizing their air conditioning 13 systems. And we kind of -- you know, we give them 14 some guidelines that kind of help them. 15 MR. WINIARSKI: Right. If I could jump in 16 here, that is the type of alternative that we might be 17 looking for. And, again, I'd like to reiterate, there 18 is really maybe three different issues here that have 19 to be dealt with. One is I think what Don referred to 20 here. Basically, you're talking about that air 21 conditioning credit, right? 22 You know, you're trading off air 23 conditioning in this large store with lots of 24 lighting. So there's value to that, and 25165

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com manufacturer's may have an interest in taking that 1 into account. A second issue is variation between the 2 climate, and that may or may not be significant. And 3 that will depend somewhat on the case loading. 4 That could be a function of climate, as 5 well as, for instance, if in certain climates they use 6 different condensers' strategies. The outside 7 condenser efficiency is a function of the outside air 8 temperature, so -- 9 MODERATOR BERRINGER: I see Sriram or -- 10 Mike Rivest, did you have a comment or question. 11 Okay. Then, Andrew Delaski. 12 MR. DELASKI: Andrew Delaski, Appliance 13 Standards Awareness Project. I want to pick up on 14 Mike's suggestion, Mike's concept of looking at some 15 of the field work that has been done out there, the 16 EPRI study or others. I think that's an excellent 17 suggestion. 18 I think the Department, in its plan for 19 the rulemakings over the next three years, next five 20 years, published in January described its desire to 21 reduce complexity. And I'm just concerned that as 22 noted here that we're adding complexity without 23 necessarily adding any benefit. It could be very 24 interesting but not yet help us answer the question 25166

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com for this rulemaking. So let's make sure we spend our 1 resources wisely. 2 MR. RIVEST: My comment -- Mike Rivest -- 3 was from the perspective of a guy born in Montreal. 4 It's not just the air conditioning credit. It's the 5 heating penalty. 6 MODERATOR BERRINGER: Thank you. So do we 7 have any more comments on Item 6.3, then? 8 All right. Moving on to Item 6.4, "The 9 Department seeks feedback on this approach to energy 10 use and end use load characterization." I think we've 11 got quite a bit of comments sort of in the background 12 as far as the complexity that might be added to this. 13 Any additional comments? Seeing none, we'll go on to 14 the next slide. 15 MR. WINIARSKI: Okay. So now, once we've 16 basically used the markups to come up with a consumer 17 price, and we have some assessment of the energy use 18 of products at different efficiency levels when placed 19 in the field, we're going to use that information in 20 terms of generating life-cycle costs, and, in 21 addition, simple paybacks for the different efficiency 22 levels that we're going to be examining. 23 Again, the purpose here is to assess the 24 net life-cycle cost impacts of these different 25167

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com efficiency standards on the consumer. Life-cycle 1 costing can be done at different levels. In 2 particular, the Department's approach is to look at 3 this based on the consumer or the customer for the 4 equipment. 5 As a quick background, the life-cycle 6 cost, LCC here, is described as the consumer's price 7 for purchasing a product plus the sum of -- and 8 installing the product, plus the sum of all his annual 9 costs associated with maintaining and operating that 10 equipment over its life brought back to a present 11 value cost. And this is shown in the lower graphic. 12 Again, the economic evaluation that the 13 Department proposes will be from the perspective of 14 the consumer. The analysis will, as has been done for 15 previous rulemakings, be implemented in an Excel 16 spreadsheet. So the analysis will then be available 17 and posted on DOE's website for the review of various 18 stakeholders. That provides this level of 19 transparency that the Department seeks in its 20 rulemakings. 21 MR. BRUNDAGE: Don Brundage, Southern 22 Company. How do you -- what do you foresee using as 23 a source for electricity costs for this rulemaking? 24 MR. WINIARSKI: Can I hold that to a 25168

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com follow-up slide? 1
MR. BRUNDAGE: Sure. 2 MR. WINIARSKI: Okay. Again, for this 3 analysis, the results will be expressed from the 4 spreadsheet in terms of the life-cycle cost difference 5 between a baseline subsequent standard level that is 6 analyzed. In addition, we will report simple payback 7 in the analysis. 8 The next slide is a quick overview of how 9 that is actually done using the information and data 10 sources that will be collected in the rulemaking so 11 far. First, up in the upper left-hand corner in 12 yellow -- and if you're looking at black and white I 13 think that's a light shaded color, we take -- the 14 engineering analysis generates a baseline manufacturer 15 price and a standard-level manufacturer price for 16 different efficiencies for any given class of product. 17 To that we apply the markups that are 18 calculated in the markup for equipment price 19 determination analysis, and use those to generate an 20 eventual price to the consumer. And the markups, 21 again, would include distributor markups, mechanical 22 contractor markups. We also tend to include sales tax 23 in there. 24 To address something that was brought up 25169

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com earlier, I think the Department has often not 1 separately tried to include a freight to different 2 portions of the country. And I think that may have 3 been brought up in a previous rulemaking event that 4 was here. 5 Since we're looking at differences between 6 a different standard level, the importance of that 7 only occurs if the freight is expected to increase the 8 eventual price to the user. For instance, if the 9 product got heavier, as you pointed out earlier. 10 We take the markups and the engineering 11 price and we -- and the engineering price, 12 manufacturer price levels, and generate a consumer 13 price. We then develop data to characterize the 14 installation cost for the product, and those are used 15 to develop a total installed cost shown in green here 16 as an intermediate analysis step. 17 On the bottom part of the graph you'll see 18 that we use the energy consumption information that's 19 calculated from the energy analysis, and, if 20 necessary, we would include power demand impacts, if 21 that's important. We adjoin those with electricity 22 prices to come up with an annual energy expense. The 23 annual energy expense is then added to data for repair 24 costs and maintenance costs for the equipment, and 25170

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com those are used to generate an annual operating 1 expense, again, for each class of equipment. 2 The annual operating expense is then 3 applied over the life of the equipment, and then the 4 total expenses are -- over the life of the equipment 5 are then discounted backwards to a present value -- 6 present value being the -- when the equipment was 7 initially purchased. To do that, we have to use a 8 discount rate for the consumer. We also have to use 9 a price trend for the fuels -- electricity, and, if 10 necessary, gas. That was important to take into 11 consideration. 12 Once we've got those, we have a lifetime 13 operating expense. The lifetime operating expense can 14 be added to the total installed cost to give a life15 cycle cost. In addition, we can take the annual 16 operating expense directly and the total installed 17 cost directly for the different standard levels and 18 use the differentials between those to generate simple 19 paybacks for improvements in efficiency. And so both 20 of those are done and reported in the life-cycle cost 21 analysis. 22
MODERATOR BERRINGER: Don? 23 MR. BRUNDAGE: Yes. My question again -- 24 I guess my question is, and you may not have reached 25171

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com the point of considering this, so I'll make it a 1 comment. If you were -- it would be very tempting in 2 that analysis to use the commercial price as the price 3 for this equipment. But compared to the average of 4 the commercial class, this equipment is going to be 5 used in locations with higher load factor and probably 6 larger size than your average commercial. 7 Therefore, the price of electricity is 8 probably going to be somewhat lower than the average 9 commercial price out of Annual Energy Outlook 2006. 10 So some sort of consideration of that, an adjustment 11 of price, to what -- where the customers that are 12 actually using this equipment would be useful, because 13 I think --- I think there would be a tendency in doing 14 this to overstate the price that these customers are 15 paying for electricity. 16 MODERATOR BERRINGER: Okay. Marshall. 17 MR. HUNT: Marshall Hunt, Pacific Gas & 18 Electric. Speaking for California consumers, I think 19 there will be a lot of times where you'd be 20 understating the cost. We have a heavy ratcheting 21 from KW charges. We are going to see the advanced 22 metering initiative throughout California, which will 23 convert more and more people to time of use, with 24 significant penalties for time of use. 25172

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com Coincident demand is very, very high with 1 these units. They tend to really add up to the demand 2 of a store. So I see it entirely differently, and I 3 guess we're talking about a sensitivity analysis here. 4 But you've got to think of this as a regional economy, 5 and it seems to me the marginal cost of doing business 6 would be that if these appliances would save energy, 7 say, in Nevada and Arizona or Oregon, and allow them 8 to sell power at a nice, high cost to California, it 9 seems that's the value of the energy. 10 So you have to think of societal also. 11 But certainly, the customer comes first. What is that 12 real charge? And the rate structures are changing 13 dramatically in some parts of the country in response 14 to the natural gas issues and other peak constraints. 15 MR. BRUNDAGE: Don Brundage. I don't 16 necessarily disagree with you. My point was that you 17 need to not just use a straight commercial class 18 average. You need to look at what these types of 19 customers are actually paying. 20 MODERATOR BERRINGER: Marshall? 21 MR. HUNT: Marshall Hunt. Thank you. 22 That would be good. And do the sensitivity, because 23 there is tremendous differences for parts of the 24 country. 25173

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MR. WINIARSKI: We talked about most of 1 the slide -- 2 (Laughter.) 3 -- before I got started. A couple of 4 things that we didn't talk about is the Department's 5 original proposal, which starts to address that, is -- 6 was at least to initiate discussion -- the use of 7 commercial average prices. And I think it obviously 8 did that. 9 The next portion of that is the Department 10 is interested in -- or has proposed here to look at 11 the regional variation of those as part of its 12 sensitivity analysis, although the eventual analysis 13 gets a weighted sort of national average figure for 14 that. 15 As we're talking about that, the second 16 issue here is sort of this impact in terms of the fact 17 that these are very high load factor and larger 18 buildings. And any information that can be provided 19 from stakeholders would be useful here in terms of 20 characterizing that. 21 With regard to the escalation prices, the 22 Department's intention here is to use the Energy 23 Information Administration's Annual Energy Outlook, as 24 it has done in previous rulemakings, to project energy 25174

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com prices on into the future, over the life span of the 1 equipment in this case for the LCC. 2 MODERATOR BERRINGER: Yes. Let's go ahead 3 and -- just go ahead and hit -- I know we've had some 4 of the discussion on 8.1 already, but Item 8.1 says, 5 "The Department seeks comment on the proposed 6 approaches for estimating current and forecast energy 7 prices." Was that what you were -- 8

MR. NADEL: Two comments. 9 MODERATOR BERRINGER: Steve Nadel? 10 MR. NADEL: Steve Nadel, ACEEE. Don 11 pointed out that the supermarket-type systems may be 12 used in larger buildings, but some of the self13 contained equipment may actually be used in smaller 14 buildings. So you have to decide, is it worth trying 15 to differentiate and use higher prices for some and 16 lower prices for another, or is this more trouble than 17 it's worth? But it goes both ways, the different 18 types of pieces of equipment. That's one. 19 Two, you're going to be using the AEO 20 forecasts, and those forecasts at this point are 21 causing a lot of head-scratching. When we talked to 22 economists for commercial, the forecast says it's -- 23 the average price is 8.2 cents per kilowatt hour, but 24 somehow it's going to decline to 7.4 cents by 2015, 25175

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com despite the fact that people are -- gas has gone up, 1 coal has gone up, and people are building more 2 expensive powerplants. 3 Just like EIA had to revise its oil price 4 forecast substantially in the AEO 2006, I'm hearing 5 from people I've talked to that there's an excellent 6 chance that the -- some problems with the model and 7 these prices are going to go up significantly the next 8 few iterations. So you should plan on that. 9 As I understand, you'll be starting with 10 these prices, but don't be surprised if they go up and 11 don't eliminate options that all of a sudden might 12 become cost effective when they start revising their 13 forecasts. Instead of assuming declines in prices, at 14 least start assuming level if not some type of 15 increase. 16 MODERATOR BERRINGER: Yes, Chris. 17 MR. BALESTRINI: Chris Balestrini, FPA. 18 Back on slide 55, I was look at the flowchart, and 19 where you have -- was it total operating expenses? 20 MR. WINIARSKI: Annual operating expenses. 21 MR. BALESTRINI: Annual operating 22 expenses, if you're going to take repair costs and 23 maintenance costs, don't you also have to take 24 depreciation costs into account there as well? I 25176

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com don't see anything there about depreciating the 1 equipment. That will add into the true cost in the 2 life cycle. 3 And then, but that's for the overall for 4 the unit. Does it make sense to do a flowchart like 5 this just on -- just for the energy piece by itself as 6 well? Because right now you have the total for the 7 equipment with the energy worked in. Does it make 8 sense to do the equipment piece by itself and the 9 energy piece as separate? Because that would give you 10 the flexibility to look at different scenarios on the 11 energy, then. 12 MR. WINIARSKI: Basically the -- I think 13 if -- if I'm catching what you're saying here, you're 14 asking -- basically, this type of flowchart 15 illustrates that we're going to have a spreadsheet 16 that takes all of this information into account, and 17 then comes up with a life-cycle cost analysis. And 18 are you thinking about basically showing and maybe 19 implementing the same process for the energy? 20
MR. BALESTRINI: Yes. 21 MR. WINIARSKI: Okay. 22 MR. BALESTRINI: Yes, because the thing 23 is, you're going to look at this total cost to the end 24 user, correct? That's the whole point for this, to 25177

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com show that whatever your regulations are that you end 1 up coming up with, what the cost is going to be to the 2 end user basically is what you're trying to 3 demonstrate. It will be nice to show them what the 4 end is overall, and what the end is energy-wise, where 5 you can show, you know, the energy savings 6 potentially. 7 Even though you may have to pay a little 8 bit more on the front side, here is what you're going 9 to save on the energy down the road. And then, the 10 life cycle is going to be a variable. And it may be 11 four years, it may be 10 years. So the longer you run 12 it out, the more savings you're going to generate on 13 the energy side. And you might need to demonstrate 14 that to get the buy-in from everybody. 15 MODERATOR BERRINGER: Any other comments? 16 Okay. Next slide? 17 MR. WINIARSKI: Okay. Discount rates. 18 Obviously -- and this gets a little bit -- ties in 19 with maybe the discussion of depreciation here. I'm 20 not prepared to go into that right now, but 21 essentially the Department's approach involves the use 22 of calculated discount rates basically for the end 23 user, how he discounts the time value of money in 24 order to make his choices in the -- between equipment 25178

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com or between spending his money on new equipment or 1 something else. 2 The Department's approach to the use of 3 discount rates in order to discount those streams of 4 operating expenses is to develop what's called the 5 weighted average cost of capital for stores and 6 companies that are expected to be the prime users of 7 commercial refrigeration equipment. 8 In the third bullet there, basically the 9 point that we're trying to say here is that we want -- 10 we believe we can go out and get information again 11 from those consumers that you spoke with -- or spoke 12 about with regards to sort of how they value the time 13 value of money in their businesses, and use that to 14 implement our life-cycle cost analysis. 15 With that, Bryan, I think that you can go 16 into the two items there. 17 MODERATOR BERRINGER: All right. Two 18 items. Item 8.2, "The Department seeks comment on the 19 proposed approaches for estimating discount rates for 20 consumers using the equipment covered under this 21 rulemaking." Any comments on discount rates being 22 used? 23 All right. Seeing none, I'm going to move 24 on to 8.3. "Given the relatively narrow commercial 25179

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com application for most of the equipment covered under 1 this rulemaking, which, if any, commercial sectors 2 beyond grocery stores should be considered in the 3 evaluation of discount rates? In addition, do 4 stakeholders feel the government purchases of this 5 equipment are large enough to require that they be 6 included in the evaluation of the discount rates?" 7 Not seeing a whole lot of -- Chris? 8 MR. BALESTRINI: Chris Balestrini, FPA. 9 I can tell you from what our members' feedback has 10 been, one of the fastest-growing sectors of food 11 distribution is the convenience store. Okay? So I 12 would think you might want to be looking at the 13 C-stores as well as the traditional grocery stores. 14 MODERATOR BERRINGER: Okay. Okay. Thank 15 you. Any additional comments? 16 Okay. Next slide? 17 MR. WINIARSKI: If I can, I'd like to add 18 a thought with regard to that one, which is another 19 fast-growing segment I believe are these -- what they 20 call a supercenter, like a Wal-Mart, that does lots of 21 other things in addition. And any information that 22 you can give us on whether that would be an important 23 group to take into account in developing discount 24 rates would be useful. 25180

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MR. BALESTRINI: Actually, the superstore 1 type concept is a morphing of the traditional grocery 2 store. So we kind of consider those together. 3 MR. WINIARSKI: You consider them 4 together. 5 MR. BALESTRINI: In our association, we 6 consider them to be pretty much the same pot. 7 MR. WINIARSKI: Okay. 8 MR. BALESTRINI: The C-stores are another 9 offshoot, because they're not traditional -- they're 10 not a traditional grocery store type of setup. 11 MR. WINIARSKI: Okay. Karim? 12 MR. AMRANE: Karim Amrane, ARI. I guess 13 the feedback from us is that you should consider that 14 source as well. 15 MR. WINIARSKI: Okay. In order to 16 complete the life-cycle cost analysis there is another 17 couple of pieces of information that the Department 18 needs. The first is -- I show the four issues here. 19 First is the installation cost of the equipment. 20 Primarily here, again because we're doing differential 21 life-cycle cost, it's most important to get this 22 accurate if, indeed, we expect the installation cost 23 to change as a function of the efficiency of the 24 equipment. 25181

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com An example here, not to go into this in 1 detail, might be that if the market or if the analysis 2 suggested that we were going to look at hot gas 3 defrost, and putting equipment in stores that don't 4 currently have hot gas defrost, that could be a 5 significant installation cost issue. So any 6 information that's available would be useful. 7 The Department seeks data on equipment 8 lifetime in the field, and sources of information that 9 might refer to that. Also, on repair costs and on 10 maintenance costs for the equipment in the field. 11 MODERATOR BERRINGER: So Item 8.4, "The 12 Department seeks feedback on whether it is correct to 13 assume that the changes in maintenance, repair, and 14 installation costs will be negligible for equipment 15 with lower energy consumption." Is that -- does that 16 make sense? Does that assumption -- Steve Nadel. 17 MR. NADEL: Steve Nadel. I guess it will 18 depend on the measures being employed. If you're 19 talking, you know, heat exchange area, yes, that's a 20 reasonable assumption. Sometimes, you know, a more 21 efficient motor may have a longer life. Sometimes the 22 controls may have a -- you know, a shorter life, 23 require more maintenance. You need to probably at 24 least look at what is being assumed here before making 25182

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com a blanket assumption. 1 MODERATOR BERRINGER: Any other comments? 2 Karim? 3 MR. AMRANE: Karim Amrane, ARI. I guess 4 it's more like a question for Dave. Are you also 5 looking into finding out the installation costs with 6 respect to different product classes? Or are you 7 going to assume that's going to be flat or -- 8 MR. WINIARSKI: We will probably -- in 9 terms of different product classes, we will probably 10 try to develop typical installation costs. Again, 11 going back to the "as simple as needed," in terms of 12 calculating a differential life-cycle cost, this 13 really doesn't come into play. It doesn't impact the 14 economics unless there is a significant differential. 15 MODERATOR BERRINGER: Additional comments? 16 Okay. Go on to Item 8.5. "If it is not 17 appropriate to assume that the changes in maintenance, 18 repair, or installation costs would be negligible for 19 the equipment with lower energy consumption, the 20 Department seeks comment on appropriate methodologies 21 for assessing changes to each of those costs." So a 22 similar sort of question. Steve Nadel? 23 MR. NADEL: I guess as you're doing the 24 design option analysis, you can consider this and see, 25183

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com are there particular measures thatwill have a 1 significant impact? If the impact is not significant, 2 it's not worth including. But I would tend to add it 3 to the design option analysis as a way to incorporate 4 this relatively straightforwardly. 5 MODERATOR BERRINGER: All right. Then, 6 we'll go on to question -- Item 8.6. "The Department 7 seeks comment on the appropriate equipment lifetimes 8 for the equipment covered under this rulemaking." 9 Again, the lifetime, are the assumptions correct? 10 Karim? 11 MR. AMRANE: Karim Amrane, ARI. I think 12 this sort of -- in this particular case, it's 13 important to get other stakeholders involved, you 14 know, FMI, I don't know. I mean, they have 15 information about how often those types of products 16 are being, you know, changed over and things like 17 that. 18 So, yes, you're going to get some feedback 19 from us as to what the lifetime is, but the reality is 20 really more with those products and how often, you 21 know, stores are being renovated and things like that. 22 MODERATOR BERRINGER: Additional comments 23 on lifetime? Steve. 24 MR. NADEL: Can I give a couple of things? 25184

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com One, I believe ASHRAE, in their handbook series, has 1 some estimates of lifetime for different pieces of 2 equipment. The Department has used that for some of 3 the other rulemakings, so if you haven't already you 4 should look at that. 5 Two, I know there is a number of measure 6 life studies done in the northwest. Tom Eckman may be 7 able to comment. But they may have some information, 8 some stuff done in past years, for the Bonneville 9 Power Administration. 10 Third, I noticed in the framework document 11 where you refer to Appliance Magazine. I'm not sure 12 if they cover any of these products, but in general we 13 found their measure life estimates to be quite low, 14 lower than any of the other sources, so I would be 15 very careful about using them. 16 MODERATOR BERRINGER: Additional comments 17 on lifetime? Seeing none, next slide? 18 MR. WINIARSKI: Once -- let's see. I 19 guess we continue here. Once we've look at life-cycle 20 costs, the next step is to try to assess the shipments 21 of the different classes of air conditioning or -- 22 different classes of refrigerating equipment as they 23 go into the field, that we do that in the shipment 24 analysis, and the combination of both of those will 25185

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com lead for a national impacts analysis. 1 So, again, the purpose of the shipments 2 analysis is to try to project the rate of new 3 equipment shipments under a proposed standard. In 4 that process, one of the things we do is we track the 5 stock of equipment that's out there in the field by 6 vintage over the timeframe characterized by the 7 standard. 8 The methodology is basically that 9 equipment is sold, purchased, shipped to a building, 10 it's installed, it operates for a number of years, and 11 then in some cases it will be retired and replaced. 12 In other cases, the building may actually be torn down 13 or moved to a different type of operation, and it's 14 simply removed from service. And so the shipments 15 analysis tries to take that into account. 16 Data sources that are used include things 17 like product lifetimes, estimates of the commercial 18 floor space that's out there currently, and saturation 19 rates -- how many pieces of equipment do we expect to 20 be in existing square feet of a given building type, 21 like a grocery store. 22 We then develop a model that tries to take 23 into account all of this information, and then 24 calibrate that model backwards, looking at historical 25186

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com shipments and historical market saturation data. 1 MODERATOR BERRINGER: Okay. That leads us 2 to Item 9.1. "The Department seeks information on 3 representative saturation rates for each product class 4 covered under this rulemaking, as well as industry 5 trend data regarding relative growth in each product 6 class." Is there information out there? Is that 7 something that ARI will -- 8 MR. AMRANE: Karim Amrane, ARI. As we 9 mentioned before, we will be providing you with some 10 shipment data that we've collected. As far as trends, 11 we don't project trends, so we'll leave that to you 12 guys. But we'll give you -- we'll give you what we 13 have as far as historical data to date. 14 MODERATOR BERRINGER: Okay. Thank you, 15 Karim. Any other comments on that issue? 16 Okay. Item 9.2. "As part of its 17 preliminary manufacturing impact analysis, the 18 Department will seek input from manufacture of the 19 potential impact of new energy conservation standards 20 on product shipments. Other stakeholders are also 21 welcome to provide input. The Department also seeks 22 -- also requests input on any market pull programs 23 that currently exist to promote adoption of more 24 efficient products." 25187

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com The second part -- are there any other 1 areas, market pull, other programs, that are sort of 2 out there for these particular products? Steve Nadel. 3 MR. NADEL: The only thing -- you have an 4 Energy Star program for the ice cream freezers. You 5 have California Energy Commission, the standards for 6 the ice cream freezers. You have the Energy Star 7 grocery store program, recognizing the most efficient 8 equipment. 9 And then, some utilities also do 10 incentives for supermarket refrigeration, but not that 11 many at this point. Those are a few of the things. 12

It's an area where there's not as much activity as 13 many of the other products the Department is 14 investigating. 15 MODERATOR BERRINGER: Let me go as far as 16 the manufacturers are concerned here. We -- sort of 17 the first part of that on the preliminary 18 manufacturing, the Department seeks input from 19 manufacturers on potential impacts of the new energy 20 conservation standards on shipments. Is there any 21 preliminary comments you have at this point? The 22 impact of standards? I know this is a new area 23 that's, you know, under EPACT 2005. 24 Okay. All right. We'll move on to the 25188

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com next slide. 1 MR. WINIARSKI: And as I said, once we've 2 done the life-cycle cost and we have shipments, we 3 actually try to expend that into doing national 4 impacts of the adoption of higher efficiency standards 5 for this product. 6 The methodology that the Department has 7 adopted and used in previous rulemakings involves 8 using a spreadsheet-based tool that implements this 9 analysis in, and provides for stakeholders to review 10 it -- the ANOPR. 11 And the analysis in particular is looking 12 at two different things. It's going to try to develop 13 estimates of national energy savings for the adoption 14 of higher efficiency standards. It also looks at 15 what's called the national net present value. 16 Basically, what's the impact of the economics of 17 having to adopt higher efficiency standard levels on 18 the consumers over the nation, as well as some other 19 corollary impacts? 20 The process by which the Department does 21 this is they develop essentially from the life-cycle 22 cost analysis as a starting point the energy impacts 23 and economic impacts. It then over -- does this over 24 a defined analysis period. That period has not yet 25189

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com been defined by the Department, but typically in the 1 past it has tried to look at these impacts over about 2 a 30-year time period. 3 We estimate the cost and energy use in the 4 analysis for a given unit of a given product class in 5 each year over that time period at a given efficiency 6 level, starting with the baseline efficiency level and 7 subsequent higher standard levels. 8 We then aggregate all of those costs and 9 all of that energy backwards by vintage for all the 10 years in the analysis period, and we report those 11 estimates back to the stakeholders. Those estimates 12 in terms of energy, will be done looking at what's 13 called source energy. Source energy basically takes 14 into account all of the energy losses in its 15 transformation down from its original fossil fuel 16 source or other source down to the eventual 17 distribution to the customer. 18 The economic impact will be reported in 19 dollars, and typically it will be in constant year 20 dollars, like Dollars 2003, for example. 21 The reports estimate the -- or the 22 reports, pardon me, account for the time value of 23 money, just like the LCC did, using a discount rate. 24 However, one difference is the Department is, I 25190

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com believe, mandated to use specific discount rates by 1 the Office of Management and Budget for this 2 particular set of studies. So it will use those. 3 They may be slightly different from what is actually 4 used in their life-cycle cost analysis. 5 MODERATOR BERRINGER: Okay. Which leads 6 us to Item 10.1. "The Department seeks comments on 7 its plan to develop national energy savings 8 spreadsheet models for estimating national impacts of 9 amended energy conservation standards." So, again, 10 we're looking at using spreadsheet models. Are there 11 any other tools out there that we should consider or 12 look at? I see Marshall. 13 MR. HUNT: Marshall Hunt, PG&E. How are 14 you handling the time value of energy in your 15 calculations? 16 MR. WINIARSKI: I'm not sure I understand 17 the question. The energy -- the EIA escalation rates 18 are used to establish the energy prices for each year 19 in the study. In calculating the national economic -- 20 or the NPV analysis, that's taken into account. Those 21 costs are then incorporated as dollar values and taken 22 back to a present value. So it's discounted that way. 23 In terms of the national energy savings 24 analysis, we're just adding up BTU for BTU, or quads 25191

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com in this case, of energy. 1 MR. HUNT: But the demand -- Marshall Hunt 2 again. The demand at 3:00 in the afternoon on a hot 3 day is a lot harder to meet, a lot more expensive. 4 You're using peaking equipment, and it's much more 5 valuable, and this is an example of a use that you 6 cannot curtail without damage -- huge damages to the 7 industry. It seems to me that this time value of the 8 electricity should be thought of. 9 MODERATOR BERRINGER: Karim. 10 MR. AMRANE: Karim Amrane, ARI. I guess 11 I fail to understand how this concept can be applied 12 to the national level. I mean, yes, California is 13 doing it, and maybe that's the way that you guys are 14 used to. But on a national level, I don't see how 15 this concept can be applied. 16 MODERATOR BERRINGER: I see Don Brundage. 17 MR. BRUNDAGE: Don Brundage, Southern 18 Company. I'm not quite sure what the difference 19 between this and using actual costs for -- actual 20 electricity costs for customers as opposed to averages 21 would be. 22 MODERATOR BERRINGER: Marshall, do you -- 23 MR. HUNT: Marshall Hunt, PG&E. The time24 dependent valuation that we use looks at both the 25192

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com absolute source energy but also the economic value of 1 that energy. And it could be -- the multiple could be 2 way up there, just not a simple three times. 3 So we'll get back to you on that, but it 4 just is something that is coming up hard and fast. 5 Usually most public utilities commissions would 6 regulate IOUs of others -- will not expose the 7 customer to the true societal cost of that peak power. 8 We're all protected from that, thank goodness, because 9 if you were to look at the extreme excursions from 10 cost, the value the last KW brought into the 11 marketplace, it would be astounding. And yet this is 12 a national impact, and we're looking at powerplants 13 worth of constructions here and demand. 14 So it seems to me we've got to figure out 15 some way to at least consider this, because it's not 16 adequately reflected in rates. But it is a load on 17 society. And I think the life-cycle cost is getting 18 -- there is a societal impact here. Correct? Is this 19 where we consider societal impacts? 20 MR. WINIARSKI: This is part. Basically, 21 the Department I think historically has set it about 22 as these two separate analyses. But this is where 23 those sort of national impacts are taken into account. 24
MODERATOR BERRINGER: Don? 25193

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MR. BRUNDAGE: Don Brundage again. I 1 think what you're getting into is sort of the 2 regulated versus deregulated market on whether 3 everyone is paying margin, or whether you're dealing 4 with average costs. In my area, not all customers are 5 exposed to the marginal costs, because we have cost6 based rates. 7 And for a national study, if that's the 8 actual cost that customers in California are paying, 9 it certainly needs to get included within the totals 10 and in the sensitivity analysis. But not all 11 customers are paying the marginal cost. 12 MODERATOR BERRINGER: Any additional 13 comments? Steve Nadel. 14 MR. NADEL: The one other thing that 15 affects this is the load shape of commercial 16 refrigeration equipment. For something like air 17 conditioning, where there is a significant load, it's 18 very important to look at time of use, because that 19 has a major impact. 20 For this equipment, I'm less clear. I can 21 think of some things that increase peak use, some 22 factors that decrease it. If I recall correctly, PG&E 23 may actually have some load shape data on this type of 24 equipment, or at least on grocery stores. It would be 25194

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com interesting to look at that, see whether it differs 1 significantly from the average load shape, and, 2 therefore, time of use will be an important factor in 3 this. 4 MR. HUNT: Thank you, Steve. That's a 5 good idea. Marshall Hunt. 6 MODERATOR BERRINGER: Okay. Thank you. 7 Any other comments? 8 Dave, go ahead and proceed with the next 9 section. 10 MR. WINIARSKI: Okay. So once the impacts 11 analyses are done, that basically takes us up through 12 the ANOPR phase of the analyses. And at that point, 13 the Department of Energy has a -- or typically has a 14 public meeting. They provide the information on the 15 analyses that's been presented so far, and they look 16 to get stakeholder feedback to -- on those analyses 17 and what improvements might be necessary. 18 And then, the next phase of the rulemaking 19 we refer to as the NOPR analysis phase. The first 20 phase of the NOPR analyses is to take into account 21 whatever comments were received on the ANOPR. And, if 22 necessary, we will then revise the ANOPR analyses to 23 take into account those comments. 24 Once any revisions have been made to the 25195

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com ANOPR analyses, the next step is to begin the path for 1 the analyses that will be new to stakeholders when the 2 NOPR -- Notice of Public Rulemaking -- is actually 3 presented. The first of those -- although these are 4 not necessarily sequential, they are shown here -- 5 many of them can actually be done in parallel. But 6 the first of them that we show here is the life-cycle 7 cost subgroup analysis. 8 And, basically, the life-cycle cost 9 subgroup analysis is supposed to essentially try to 10 analyze the economic impacts on specific subgroups of 11 consumers. We try to identify groups that might be 12 disproportionately impacted compared to the general 13 user population. And that's -- the information that 14 comes out of this then can be used in order to set 15 policy or to describe policy issues with the 16 implementation of higher standards. 17 The methodology that the Department would 18 like to do is to basically extend the life-cycle cost 19 analysis that was presented earlier to examine 20 particular -- and to develop inputs to that analysis 21 that would be reflective of certain elements of the 22 overall user population. And maybe that's a good 23 reason for expressing it in terms of that flowchart, 24 because you can see how those inputs might change. 25196

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MODERATOR BERRINGER: All right. Just a 1 question. Item Number 11.1, "The Department seeks 2 input on what consumer subgroups the Department should 3 consider in the present rulemaking. Examples of 4 possible subgroups the Department could consider 5 appropriate for commercial refrigeration equipment 6 include independent grocery stores and small 7 convenience stores." That was mentioned earlier, as 8 far as adding that. 9 So any other additional subgroups that we 10 need to consider? Seeing none, just at this time I 11 would like to -- we're about on time. We're scheduled 12 to have a break. Do people want to have a break, 13 press on, what are people -- we have two more sections 14 to go. Everybody need a short break? Do you want to 15 press on? Raise your hand, okay, if you want a break. 16 Press on? Press on. All right. Let's go ahead and 17 press on, then. 18 I think we have -- Aris is up at this 19 point. 20 MR. WINIARSKI: I'll turn this over to 21 Aris. 22 MODERATOR BERRINGER: Great. And, again, 23 while they're making the switch, people do -- I see 24 Marshall had to leave. If you do, if you can fill out 25197

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com your evaluation if you have to leave before the 1 adjournment of the meeting, please do that and turn it 2 in at the back table. Thank you. 3 Okay. Aris. 4 MR. MARANTAN: Okay. The next analysis in 5 the NOPR phase is the manufacturer impact analysis. 6 The purpose of the MIA, the manufacturer impact 7 analysis, is first to assess the impacts of standards 8 on manufacturers; second, to identify and estimate 9 impacts on subgroups of manufacturers that may be more 10 severely impacted than the rest of the industry as a 11 whole; and also to examine impact of cumulative 12 regulatory burden on the industry. 13 And in order to conduct the MIA we really 14 have two tools available to us. First of all, we have 15 the GRIM, which is the Government Regulatory Impact 16 Model. And we also have the interview process. First 17 of all, the GRIM is a discounted cashflow model that 18 calculates the industry net present value before a 19 standard and at several other efficiency levels beyond 20 the baseline of the standard. 21 The second is the interview process, and 22 this is where the Department refines inputs to the 23 GRIM, developed the subgroup analysis, and also 24 addressed qualitative issues. The output of the MIA 25198

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com is the industry net present value impacts, the 1 subgroup net present value impacts, and other impacts 2 which I'll describe next. 3 Okay. This describes some of the 4 legislative requirements that DOE faces. The 5 manufacturer impact analysis fulfills a legislative 6 requirement to determine if a proposed standard is 7 economically justified. In the statute, the Energy 8 Policy and Conservation Act provides factors that DOE 9 must evaluate. Two of those factors are addressed in 10 the MIA. 11 The first one is economic impacts of 12 standards on manufacturers, and the second one is 13 impacts of any lessening of competition in the 14 industry. For the second one, the impacts of any 15 lessening of competition, the Department produces a 16 technical support document that's reviewed by the 17 Department of Justice, so we go to those lengths in 18 addressing that impact. 19 In addition, in 1995, the Department 20 announced a formal effort to further improve the 21 process, and this includes principles for the 22 analysis, which pretty much gave the Department -- it 23 resulted in the development of the GRIM. 24 And, finally, the Department also 25199

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com announced recently this year in a report to Congress 1 that they will also assess manufacturer impacts in the 2 ANOPR phase. They'll be conducting a preliminary 3 manufacturer impact analysis. This is done to 4 understand and quantify and explain the nature of 5 impacts that the industry will face. 6 Okay. This slide describes in a little 7 more detail the three phases that are conducted for 8 the MIA. The first phase is conducted before the 9 ANOPR is published, and that includes an industry 10 profile. For the industry profile, the Department 11 will gather information from publicly available 12

sources. 13 This includes financial statements, 14 filings to the SEC described earlier. This is all to 15 get a baseline of what the industry cost structures 16 are. In this phase, we also conduct the preliminary 17 MIA interviews. 18 After the NOPR is -- the ANOPR is 19 published, we get into phase 2 of the process. That 20 includes development of the strawman GRIM. This is 21 done using all of the collected data and also creating 22 some scenarios within the GRIM. Here in phase 2 we 23 also developed the interview guide for the more 24 comprehensive manufacturer interviews, which is 25200

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com conducted in phase 3. 1 For phase 3, interviews and industry-wide 2 subgroup analyses are conducted. And, again, this is 3 a more detailed interview process which involves site 4 visits for the most part. And also, we assess the 5 direct employment competition and cumulative burden 6 impacts on manufacturers. 7 The next couple of slides describe each of 8 these phases. Okay. Here, for phase 1, this consists 9 of an industry profile and a preliminary manufacturer 10 impact analysis. The industry profile consists of 11 data-gathering from public sources, developing 12 financial inputs to the GRIM, and manufacturer markups 13 for the LCC. Also, the preliminary MIA interviews are 14 conducted, and listed here are some of the topics that 15 are discussed. 16 I'll point to a couple of them. For 17 example, for conversion costs, this is critical for 18 small manufacturers. For product mix and 19 profitability, we want to determine what the 20 relationship is between premium products and the 21 differentiation of those from baseline products. 22 We also take this opportunity to get a 23 sense of manufacturers' impacts on shipments. As an 24 example, we look at product-switching that's not 25201

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com apparent in any price elasticity value, for example. 1 And we discuss that with manufacturers and what their 2 specific impacts are. 3 Phase 2 consists of a strawman GRIM and 4 the interview guide preparation. For the strawman 5 GRIM, we have inputs here listed. We take these 6 inputs from several other analyses. For example, 7 manufacturer prices and manufacturing cost estimates 8 are taken from the engineering analysis. The 9 shipments forecast from the shipments analysis and 10 financial information is derived from the initial 11 industry profile. 12 We also have the interview guide 13 preparation, and I've listed here some of the topics, 14 again, that we include in the interview guide. The 15 interview guide is sent out to manufacturers ahead of 16 the interview itself, so you'll have a chance to 17 review the topics that are included and possibly think 18 about some of the responses. 19 So we have an engineering analysis. We'll 20 be discussing shipments as well, cost structure, 21 conversion costs, cumulative burden, direct 22 employment, import and export issues, consolidation. 23 Again, for this part, the consolidation and 24 competitive impacts -- our analysis is sent to the 25202

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com Department of Justice for review to examine those 1 impacts specifically, replacement parts or 2 refurbishments, and also impacts of the standard's 3 effective date. 4 However, for this rulemaking the effective 5 date is established in EPACT 05. So that's not as 6 much of a concern as other rulemakings. 7 Okay. And the last phase includes the 8 manufacturer interviews, the detailed version this 9 time, and also the assessment of the impacts or the 10 results. 11 One thing to point out is that when we get 12 into the manufacturer interviews it may take some 13 period of time to schedule those interviews, because 14 what typically happens is a manufacturer would want to 15 have representatives from various departments of their 16 firm present to answer the various questions that we 17 will go through. 18 And so, you know, we will be sending out 19 the request for those interviews far in advance, as 20 well as the interview guide itself. 21 Okay. That leads us to the feedback 22 questions. Okay? 23 MODERATOR BERRINGER: Item 12.1, "What 24 procedures should the Department follow when 25203

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com scheduling interview and requesting information?" So 1 this is sort of towards the manufacturers. Karim? 2 MR. AMRANE: Karim Amrane, ARI. I guess 3 the Department has done those interviews in the past, 4 and those have been acceptable to industry. So I see 5 no reason to change the way you've done it. 6 MODERATOR BERRINGER: Okay. Bruce? 7 MR. HIERLMEIER: Bruce Hierlmeier, Zero 8 Zone. Just a longer lead time, so we can get the 9 people organized to be there when you come or set an 10 appropriate date where you have the other people in 11 the company available for you. 12 MODERATOR BERRINGER: I know that has been 13 an issue in other ones. Just scheduling and getting 14 the right people there, so, you know, a long lead time 15 will -- so start planning on it now. We'll -- 16 (Laughter.) 17 Any additional comments on 12.1? Okay. 18 Seeing none, we'll go to 12.2. "The Department seeks 19 comment on the establishment of manufacturer subgroups 20 for commercial refrigeration equipment." So are there 21 any subgroups that are needed here? Manufacturer 22 subgroups. Okay. Karim? 23 MR. AMRANE: Karim Amrane, ARI. I guess 24 in the past, you know, in other rulemakings you have 25204

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com looked at subgroups, compressor manufacturers, and so 1 on. In this case, I think the component manufacturers 2 may be -- might be a subgroup that you need to look 3 at. Motor manufacturers, others, I don't know. 4 MODERATOR BERRINGER: Okay. Thank you. 5 Any additional groups? I see Mike Rivest. 6 MR. RIVEST: Mike Rivest, Navigant 7 Consulting. In terms of the subgroups, we might be 8 interested in understanding, and part of the market 9 characterization -- we'd like to know if there are 10 some manufacturers that are much larger than others, 11 so that we might treat them separately, or there might 12 be manufacturers who only participate in some niche 13 markets that for some reasonmight be impacted 14 differently by standards. So just something to think 15 about. 16 MODERATOR BERRINGER: Okay. Any 17 additional comments? All right. We'll go to 12.3. 18 "What regulations or pending regulations did the 19 Department consider in the analysis of cumulative 20 burden, regulatory burden?" This in the past has been 21 sort of like the phaseout of HCFC, so we have similar 22 type of things. You know, there's EPA, other 23 regulations that may affect or be a cumulative burden 24 on the manufacturers. Karim? 25205

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MR. AMRANE: Karim Amrane, ARI. I guess, 1 as just was mentioned before, in the CFC -- or the 2 HCFC phaseout of 2010 is, of course, one issue that 3 the Department needs to look at carefully. But also, 4 cumulative burdens on certain manufacturers in the 5 room, and particularly in the case of Carrier, for 6 example, it's not only commercial refrigeration. It's 7 also commercial unitary, it's also furnaces, it's also 8 other things. 9 So on certain manufacturers, in particular 10 Carrier in this room, I think the Department has to 11 look at that seriously. 12 MODERATOR BERRINGER: Okay. Any 13 additional comments? Andrew, did I see your hand? 14 Okay. Anybody else? 15 All right. Moving right along. 16 MR. WINIARSKI: Okay. The next stage that 17 we'll talk about here is what's called the utility 18 impact analysis. The utility impact analysis is 19 really designed to address -- again, it's an impact 20 analysis. It addresses the impact on domestic energy 21 supplies and the utilities that basically produce 22 that, in the case of electricity resulting from the 23 imposition of standards for commercial refrigeration 24 equipment. 25206

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com It's a relatively straightforward idea. 1 In terms of implementation, the Department's proposal 2 here is to use essentially a similar tool that it has 3 used in the past called the National Energy Modeling 4 System, or NEMS. In particular, NEMS, which comes 5 from the Department of Energy's Energy Information 6 Administration, is a tool that they use to analyze the 7 national energy use and projected national energy use 8 for electricity and gas and fuel oil on into the 9 future. 10 And the NEMS modeling system was developed 11 primarily for that effort. NEMS-BT is a variant. 12 Basically, any variation away from the actual NEMS 13 modeling system, EIA wants to be very careful to 14 distinguish that from what it uses in its development 15 of the Annual Energy Outlook Report. So we refer to 16 that as NEMS-BT when we do any kind of variation on 17 it. 18 The process that we would like to use here 19 for consistency with the previous analysis is to take 20 the energy savings that are calculated from the 21 national energy savings spreadsheet that we did in the 22 ANOPR stage, and then revised if necessary directly 23 after the presentation of the ANOPR, to take that 24 information and use it to reduce the electrical demand 25207

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com and energy demand that NEMS predicts coming from the 1 commercial sector -- in this case, the commercial 2 sector module and the overall NEMS, national energy 3 modeling system. 4 These energy savings are then translated 5 in the utility portion of that module to a reduction 6 in the electrical demand faced by the system, and that 7 has subsequent impacts in terms of the types of 8 electrical generation being brought online in 9 outyears. 10 So the question there at the bottom -- 11 MODERATOR BERRINGER: Okay. So we're now 12 down here at Item 13.1. "The Department seeks input 13 from stakeholders on its proposed use of NEMS-BT to 14 conduct the utility impact analysis." As Dave said, 15 this is pretty consistent with what we've done in all 16 our rulemakings. Does anybody have objections, or do 17 you think we -- there are some other alternatives that 18 we should use? I see Don Brundage. 19 MR. BRUNDAGE: I think we're down to two 20 utility people in the room. Don Brundage. Doing it 21 the way you've done it in the past using NEMS is fine. 22 The biggest problem I see is the current Annual Energy 23 Outlook in my opinion is hopelessly optimistic on 24 energy prices, but that's not a major factor, because 25208

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com you'll be using a different one by the time you come 1 up with any actual levels. 2 MODERATOR BERRINGER: Okay. Additional 3 comments? Seeing none, we'll move on. 4 MR. WINIARSKI: The next impact analysis 5 that I'll talk about here is what's called the 6 employment impact analysis. The goal of the 7 employment impact analysis is to sort of assess the 8 impact on national employment that may come about from 9 the imposition of efficiency standards. That impact 10 may be positive or negative in terms of the total 11 employment in the nation. 12 The analysis incorporates both direct and 13 indirect employment impacts. Direct employment 14 impacts come directly from the manufacturer impact 15 analysis that Aris spoke about. Indirect employment 16 impacts, however, are those impacts that may occur 17 downstream or as a result of the change in standards, 18 and they come from basically two different types of 19 economic variation that are going to occur with the 20 imposition of standards. 21 The first is what's called the 22 substitution effect, and in the substitution effect a 23 good way to think about this is if the price of a 24 product goes up, maybe instead of buying that product 25209

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com I do an alternative. Right? I change how I shift my 1 expenditures that I have as a consumer to different 2 purchases. 3 The other way that indirect employment 4 impacts come about is from what's called the income 5 effect. Basically, changing standards will result in 6 both changing first costs for equipment as well as 7 changes in expenditures for electricity or other 8 energy possibly. And that results in an overall net 9 change in the income that's out there for the 10 purchasers of the equipment, as well as any downstream 11 impacts as they proceed to use their money for 12 different items. And so the income effect tries to 13 take those into account. 14 The proposal here is to use something 15 that's very consistent with what the Department has 16 done in recent rulemakings. They propose to use a 17 model referred to here as ImSET, or if you look back 18 in historical rulemakings the terminology ImBUILD was 19 used. And basically, ImSET -- impact of sector energy 20 technologies -- is a tool that was developed for BT, 21 not necessarily for this Department, but for BT as a 22 whole to try to come up with what's the overall 23 employment impact of changes in energy technologies. 24 And that tool is -- basically tries to 25210

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com account for all of these downstream impacts on 1 employment. For instance, OEMs that are producing 2 motors would be an example of how that might come 3 about. 4 So, Bryan? 5 MODERATOR BERRINGER: Yes. Item 14.1, 6 "The Department requests feedback on this approach for 7 assessing employment impacts." Again, this is similar 8 to what has been done in the past. We have a newer 9 version software model that's being used, software 10 tool. Is that something that is acceptable, or is 11 there something else out there? 12 Hearing no comment, I assume that it's 13 okay, so we'll move on to the next area. 14 MR. WINIARSKI: The next area to talk 15 about is the Department's environmental assessment. 16 Basically, the Department tries to go and make an 17 estimate of what will be the environmental impacts 18 from the adoption of higher efficiency standards for 19 each class of equipment that it's going to analyze. 20 In terms of the methodology that the 21 Department proposes to use here, the NEMS modeling 22 system at -- when it is run actually outputs various 23 environmental emissions from the utilities and other 24 powerplants that are going to be affected. This could 25211

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com -- these emissions result from perhaps a reduction in 1 actual energy use, but they also result from possible 2 shifts in the number of powerplants that are installed 3 and the type of powerplants that are installed. 4 NEMS estimates that -- those -- both those 5 impacts, and then will report, for instance, 6 quantities of carbon dioxide emissions for each 7 standard level, and nitrogen oxide emissions from 8 powerplants. In addition, it attempts to make an 9 assessment of the impact on sulfur dioxide emissions. 10 But what complicates that is there is a 11 commercial trade in powerplants and between industrial 12 people -- users on sulfur dioxide emissions. And so 13 in that -- where there's this trading going on, a 14 reduction in someplace may be sold so that someone 15 else can go ahead and make an emission. So any 16 measurable impact from NEMS will probably be reported 17 in a reduction in the estimated trading price in the 18 future of sulfur dioxide. 19 In addition, if we're looking at doing 20 building modeling, we may try to make an assessment of 21 the environmental impacts from any reductions of 22 fossil fuel use that occur at the building level. 23 MODERATOR BERRINGER: Item 15.1 again. 24 "The Department requests feedback on the approach to 25212

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com assessing the environmental factors." Again, pretty 1 consistent with what we've done in past rulemakings. 2 We're going to be using NEMS-BT, so -- I see Don 3 Brundage has a comment. 4 MR. BRUNDAGE: I would just -- Don 5 Brundage. I would just want to make sure that NEMS 6 adequately was forward-looking. There is a tremendous 7 amount of investment being done by electric utilities 8 on nitrogen oxide and SO 2reductions and -- at this 9 time. And the historic emission rates are not going 10 to be representative of future emission rates. So 11 make -- just a caution to make certain that it's 12 adequately forward-looking in your modeling on 13 projected emission rates. 14 MODERATOR BERRINGER: Just to follow up, 15 is there information out there that -- you know, that 16 the Department could access to see what these forward 17 trends look like? Data sources? 18 MR. BRUNDAGE: I'm not -- it's not really 19 my area. I just know we're spending an awful lot of 20 money on that. 21 (Laughter.) 22 Other people are, too. 23 MODERATOR BERRINGER: Okay. Any 24 additional comments? Andrew? 25213

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com MR. DELASKI: Andrew Delaski, Appliance 1 Standards Awareness Project. I think one change in 2 the NEMS modeling since it was last used for 3 rulemaking is that I believe it now reports out 4 mercury and particulates as well, or at least one or 5 the other of those. So if mercury particulates is an 6 outcome of the model, I would urge the Department to 7 include that in their report and in their analysis. 8 MODERATOR BERRINGER: Additional comments? 9 Next section? 10 MR. WINIARSKI: The last stage in the NOPR 11 analysis is what's called the regulatory impact 12 analysis. Basically, the regulatory impact analysis 13 is a tool that's used to explore the potential for 14 non-regulatory alternatives that might provide 15 equivalent or close to equivalent energy savings. 16 As Steve Nadel spoke about, it's not clear 17 that there are a lot of these non-regulatory 18 alternatives in place right now. And the Department's 19 sort of obligation is to look at the actual impacts of 20 any such initiatives that have occurred to date in 21 terms of identifying the energy savings from those 22 initiatives. 23 But it will certainly consider any 24 information that can be presented regarding the 25214

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com impacts that any of those initiatives or possibly new 1 initiatives might have in the future if something has 2 come about. 3 One issue that is, again, a slight wrinkle 4 in this particular rulemaking is that if -- where the 5 Department does not set standards that does not 6 preempt other authorities -- in particular, states -- 7 from establishing their own standards for a given 8 piece of equipment. So that's something that needs to 9 be taken into account in this, and it may suggest that 10 -- or when we get to this stage in the analysis we may 11 want to look at that and see if -- how much effort we 12 want to spend on this for particular products. 13 Bryan? 14 MODERATOR BERRINGER: That leads us to 15 Item 16.1. "The Department is unaware of any current 16 non-regulatory programs that specifically target the 17 commercial refrigeration equipment covered under this 18 rulemaking. Are stakeholders aware of any such 19 programs that could be examined as optional or non20 regulatory approaches?" Any programs out there in 21 the -- I see shaking of heads that they're -- nobody 22 is aware of anything. Okay. 23 We'll move on to Item 16.2. "There are 24 specific subgroups of end users whom the Department 25215

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com should consider in its review of potential adverse 1 impacts from standards developed under this 2 rulemaking." Any subgroups would be -- or end users 3 that we should consider? Okay. Seeing none, let's 4

move on. 5 MR. WINIARSKI: Okay. And I think at that 6 stage that finishes the NOPR analysis. I'll turn this 7 over to Jim. 8 MR. RABA: After we've done all the 9 analyses, gone to all the public meetings, heard all 10 the comments, oral and written, we take them all into 11 account, we finally come to a final rule. And the 12 final rule sums up everything you've heard today, but 13 fast-forward three years, and we have a lot to cover 14 between now and then. Once we get there, that final 15 rule will consist of a thorough review of all these 16 analyses taken in total. 17 And the energy efficiency levels, if 18 analyzed at later stages, once we go through some 19 levels to look at. And then, we'll look at the notice 20 of proposed rulemaking analysis, which comes after 21 this analysis, and see what adjustments have to be 22 made there as well and come up with a final rule. So 23 there's a lot more to cover, a lot more opportunity 24 for comment, a lot more opportunity to explore and 25216

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com provide more information and data. 1 And also, by the final rule stage we will 2 have to consider other comments from other 3 departments. The Department of Justice will have to 4 weigh in on the impacts of any standards that we set 5 in the Department and the impacts on levels of 6 competition. 7 So the final rule would not become 8 effective until three years later. We say January 1, 9 2012. So there will be time for manufacturers and 10 other users to adjust. So with all that, the final 11 rule is published. 12 Are there any questions about the analyses 13 we've had today, about today's public meeting? 14 So, again, at the final rule stage, we'll 15 revise the analyses as appropriate, Department of 16 Justice review, and that will be it. Any questions or 17 comments so far at this stage, what we've heard on the 18 analyses? Yes, Bill. 19 MR. KISTNER: Yes, Jim. Bill Kistner, 20 Carrier. Back on that last page or page 10, which was 21 in the early part of the presentation, do you have 22 milestone dates for the end points of those segments 23 already targeted? I mean, we know when the final 24 ruling is. But if you back up to each of those 25217

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com stages, where are the target dates for those 1 milestones? 2 MR. RABA: We have the target dates in3 house. Basically, those are milestones for us to 4 complete. What we typically do is do a timeline, a 5 critical path analysis, really in this case starting 6 from the end and working backwards, knowing we have to 7 meet a statutory deadline. 8 How long it will typically take in a 9 rulemaking to do these analyses -- other requirements 10 that the government puts upon us. For example, 11 Department of Justice, the Office of Management and 12 Budget, others, have requirements of time they have to 13 look at as well. These are often factored in. 14 Ron Lewis, you had some comment about 15 that? 16 MR. LEWIS: Yes. Specific dates that are 17 targets at this point -- and looking at these being 18 dates we want to publish by and not to be exceeded, we 19 have the ANOPR in July of '07, the NOPR in May of '08, 20 and the final rule in January of '09. 21 And if you look at the website, I opened 22 up this morning saying if you hadn't looked at the 23 report to Congress on our website -- I think it's 24 page 52 if I remember correctly. We have a model 25218

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com there that shows the time to do all the analyses, when 1 we're going to do things, when it's in review, 2 etcetera, and there's a three-year time period there 3 that shows exactly what the sequencing is of things. 4 MR. KISTNER: Oh, okay. 5 MR. LEWIS: So those are the approximate 6 dates right now. 7 MR. KISTNER: Okay, good. That gives us 8 the target dates to work towards. Thanks. 9 MODERATOR BERRINGER: And I'd just like to 10 add I think those dates are also published in the 11 regulatory agenda for the Department also. 12 MR. RABA: One other thing, too, that was 13 asked before about where we could find information 14 from the commercial unitary air conditioning 15 rulemaking previous to this about the markups, 16 distribution channels, and the like, and we've 17 mentioned a website. 18 Brenda Edwards-Jones has made some copies 19 of those pages, and if she has not -- if you have not 20 received them already, please stop by the desk over 21 there, the sign-in desk, and pick up a copy from her 22 on the way out. It will give you the exact website to 23 go to, save you some time, and you can see what we're 24 talking about there, give you the comparison you asked 25219

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com for earlier on. 1 MODERATOR BERRINGER: Karim. 2 MR. AMRANE: Karim Amrane, ARI. Would it 3 be possible to get a copy of this presentation in PDF 4 or PowerPoint? 5 MR. RABA: Yes. This presentation today 6 will be available on our website in the next few days. 7 It's now public domain. When we put it on the 8 website, you can download it, and it will be in color. 9 MODERATOR BERRINGER: So at this time, I 10 think we're at closing remarks now. Does anybody have 11 any specific closing remarks from the audience -- 12 manufacturers, stakeholders that are in the room? 13 MR. RABA: Wait, I have one more. 14 MODERATOR BERRINGER: We're almost there. 15 MR. RABA: Thank you very much for your 16 participation today. 17 (Laughter.) 18 Again, the websites are shown up here, for 19 further information. Please submit your written 20 comments thus far for our framework document, and in 21 today's public meeting, not later than May 30th. 22 Short window, but necessary to meet the schedule. 23 Written comments can be submitted directly 24 by e-mail or written on paper as well and delivered 25220

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com both either in person, postal mail, or courier as 1 well. 2 Any questions, you may also contact me. 3 This phone number, e-mail address, is also on the 4 public meeting notice for today. 5 This concludes our public meeting. And if 6 there are any further questions at this time, anything 7 I've covered, or the other information here about 8 website and the like? Yes, sir. Chris. 9 MR. BALESTRINI: This is Chris Balestrini. 10 Do you happen to know if you're planning any kind of 11 further working group sessions before the ANOPR is 12 issued? Like a further discussion where you might 13 have some results and stuff to sit down and go through 14 some of that? Or was this -- 15 MR. RABA: There is nothing planned at 16 this time. 17 MR. BALESTRINI: Nothing planned. 18

MR. RABA: No. 19 MR. BALESTRINI: Okay. 20 MR. RABA: Well, the purpose of today's 21 public meeting was, indeed, to familiarize you with 22 the analytical tools that support the commercial 23 refrigeration rulemaking. And we appreciate your 24 participation today, and the comments, oral that we 25221

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com heard today, and written comments that are to come, 1 and other information and data. 2 We have a long way to go, as you can see. 3 But working together we'll get it done on time and 4 hopefully to the satisfaction of all. 5 Thanks goes -- special thanks to our 6 presenters today -- Mike Christopher and Aris Marantan 7 of Navigant Consulting, and Dave Winiarski, Pacific 8 Northwest National Laboratory, and the others of our 9 consultants and contractors behind the scenes who are 10 really making this possible and doing the analytical 11 work and heavy lifting as well. 12 Special thanks, and I think a round of 13 applause, to our facilitator, Bryan Berringer. 14 (Applause.) 15 And for you who have participated today 16 openly, it's been good discussion, a lot of good 17 things, valuable information, valuable comments have 18 come out, interesting points have been made. We'll 19 take them into consideration. So on your own behalf, 20 give yourselves a round of applause. 21 (Applause.) 22 Well done, ladies and gentlemen. We look 23 forward to your continued interest, and those comments 24 and participating in the public rulemaking process as 25222

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com it goes on. 1 Bryan, any further final comments or 2 thoughts? 3 MODERATOR BERRINGER: Yes. I'd just like 4 to follow up on Chris. At the ANOPR stage, there will 5 be analysis posted on our website at that point -- a 6 notice published, and we will have another public 7 meeting at that time for additional comments. So 8 that will be the next public forum that we will have. 9 And I want to thank everybody for their 10 participation. There was a lot of good information, 11 a lot of good discussion today. So thank you all very 12 much. 13 MR. LEWIS: Just one last note, too. 14 Because this meeting had so many people that have not 15 participated in one of these processes before, if you 16 go to our website there are other appliances and other 17 pieces of equipment that existing regulations are 18 there. It might be good guidance to just take a look 19 at the depth of the analysis and look at some 20 specifics there that -- ahead of time, give you an 21 idea of what we do, the extent that we analyze things. 22 And even though it's not your specific 23 product, it may be informative to you. So by going to 24 the website, there is some information there that may 25223

NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com be helpful in understanding the process. 1 So thank you again for attending. Safe 2 journey home. 3 MR. RABA: And don't forget to turn in 4 your critique sheets as well to Brenda Edwards-Jones 5 in the back of the room. 6 MODERATOR BERRINGER: Okay. At this 7 point, we are adjourned. Thank you again. 8 (Whereupon, at 3:32 p.m., the proceedings 9 in the foregoing matter were adjourned.) 10

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