UNITED STATES DEPARTMENT OF ENERGY.'

OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY

PUBLIC MEETING

CONSUMER PRODUCTSAND COMMERCIAL AND INDUSTRIAL EQUIPMENT

PRIORITY WORKSHOP

ROOM 13-245 FORRESTAL BUILDING 1000 INDEPENDENCE AVENUE, S.W. WASHINGTON, D.C.

TUESDAY, SEPTEMBER 11, 2001

+++++ PANEL: BRYAN BERRINGER Facilitator ED POLLOCK, DOE BEN LIEBERMAN, CEI DR.WENDY LEE GRAMM,Mercatus Center,G.M.University DEBORAH MILLER, ARI STEVE BADEKM ACEEE TED WILLIAMS, AGA BOB WISBEY, NEMA JOSEPH MATTINGLY, 

### GAMA CHARLES SAMUELS

### , AHAM MIKE THOMPSON,Whirlpool Corp. EARL JONES, GE DAVUD GOLDSTEIN,NRDC CHARLES STEPHENS, Oregon DOE 

### NEALR.GROSS COURTREPORTERSAND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202) 234-4433 WASHINGTON,D.C. 20005-3701 www.nealrgross.comPANEL: (CONT.) WILLIAM PRINDLE,ASE THOMAS FARKAS, EEI R. MICHAEL MARTIN, California Energy Commission FRANCINE PINTO, DOE, OGC WAYNE LAUGHLIN,NSE MICHAEL RIVEST,Arthur D. Little STEVE NADEL, ACEEE



### NEALR.GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON,D.C. 20005-3701 w.nealrgross.comI-N-D-E-X 

### PAGE



### ..... Opening Remarks and Introductions 4



### ............... Agenda Review 9 Introduction



## ........... A. NEP Action Items 10 Priorities for Existing Program A. Criteria for Prioritization Potential New Products A. Criteria for Selection B. Brainstorming Next Steps A. Follow-upAction Items B. Continuing Communication

NEAL

### R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLAND AVE.. N.W.(9:05a.m.) MR. GARMAN: Good morning. My name is Dave Garman, I'm the Assistant Secretary for Energy Efficiency and Renewable Energy. Welcome, and thank you very much for coming this morning. I'm glad to

see you here. We will begin actually by explaining why we're here, and thenwhat I'd like to do is go around the table and the room and have people introduce themselves. That will take amoment,but I think it's worth doing. The purpose here thismorning is to -- you know, we are thinking about updating the status -- well, we are updating the status of our priority rulemakings and discussing with you, many of our stakeholders, the factors that we should use in that prioritization, and we're also aiming to discuss the criteria and process for expanding the scope of the program. As many of you know, the President's National Energy Policy had as an action item and 

### a recommendationthatwe support the appliance standards program forcoveredproducts, setting higher standards where technologically feasible and economically NEALR.GROSS COURTREPORTERS ANDTRANSCRIBERS 1323 RHODEISLAND AVE., N.W. (202) 234-4433 WASHINGTON,D.C. 20005-3701 www.nealrgross.com5 justified, and expand the scope of the appliance standards program, setting standards for additional appliances where technologically feasible and economically justified. Of course, there's a range of products that one could discuss if one were expanding the scope, and we want to get into some of those issues. I'm not going to lead that discussion,but I'm going to be here and participate in it this morning with you, and there's a variety of criteria, test procedures that have to be understood, an understanding of the potential savings, where the benefit lies, where we should be using our limited

resource to set appliance standards. The way that we'll go about analyzing this information and all of this pointed toward an eventual recommendation to the Secretary for implementation. What I'd like to do now isgo ahead and go around the room and have each person at the table and in the audiencebriefly introducethemselvesand their affiliation, please. Let's start with Bryan. MR. BERRINGER: Bryan Berringer, Department of Energy, and I'll be facilitating the meeting today. MR. AMME: Karim Amrane, Air

### NEALR.GROSS COURTREPORTERS ANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. (202)234-4433 WASHINGTON,D.C. 20005-3701 www.nealrgross.comConditioning & Refrigeration Institute. MR. GARMAN: Speak loudly, please. MS. MILLER: Deborah Miller, ARI. MR. WILLIAMS: Ted Williams, American 

### Gas Association. MR.WISBEY: BobWoodsby,representing the National Electrical Manufacturers Association. MR. MATTINGLY: Joe Mattingly, with 

### Gas Appliance Manufacturers Association. MR. SAMUELS: Chuck Samuels,Association of Home Appliance Manufacturers. MR. THOMPSON: Mike Thompson, with Whirlpool Corporation. MR. JONES: Earl Jones,with GE. MR. GOLDSTEIN: David Goldstein,NRDC. MR. STEPHENS: Charlie Stephens, Oregon Department of Energy. MR. PRINDLE: Bill Prindle, Alliance to Save Energy. MR. FARKAS: Tom Farkas, Edison Electric Institute. MS. PINTO: Francine Pinto,Department 

### of Energy, General Counsel's Office. MR. LAUGHLIN: Wayne Laughlin, NSE (phonetic). NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com7 MR. POLLOCK: Ed Pollock, Department of Energy. MR. RIVEST: Mike Rivest, Arthur D. Little. MR. NADEL: Steve Nadel, ACEEE. MR. GARMAN: Thank you. At this point, what I'd like to do is go ahead and pass off the meeting to Bryan. Again, welcome, thank you all for coming,and I look forward to the good discussion that we're going to have. MR. BERRINGER: Good morning, everybody, and welcome. I just want to thank you all for coming out today. Again,my name is Bryan Berringer, I'11be facilitating the meeting today. 

### I just want to thank David forbeing here and openingup themeeting today. By show of hands, how many people is it your first time being at a DOE-sponsoredmeeting like this. 

### I know a lot of the people I've seen before at the workshops. (Showof hands.) We have a few. Okay. Well, thank you all for being here. One of the first things 

### I want to do is,we typicallyhave some ground rules and norms,and I just want to go through those so everybody is on the page here. 

### NEALR.GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODEISLANDAVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com8 We just ask that everybody speak one at a time,thatyou speak into themike, andyou stateyour name for the record. We are recording this. We have

a Court Reporter. So, if you are in the audience, please come to the two mikes in the back. Again, anytime you begin speaking, state your name. Listen as an ally. We are here to get input from everybody. We want to hear everybody's views, and pleased be recognized by the Facilitator. I will try to -- I don't know everybody's name,but 

### I will try to point you out. I will allow follow-up comments, if you have follow-up comments, and we'11

move in a queuing situation. Respect one another, again. We are all professionals here. We are here, again, to listen. We are looking foryour input, and we want to hear as many views as possible in this meeting. Avoid side conversations. If you need to have a discussion with your colleagues, if you could go ahead and step outside in the hallway. We ask you turn off cell phones and pagers, or if you have your cell phone, if you could put it on vibrate so we don't distract the meeting. If you could be concise, we want to be concise. Keep to the point and try not to be 

## NEALR.

### GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.comrepetitive in your comments. Be positive, most of all, and share the air time. Again, we've got a short period of time today, about three hours, and we want to give everybody a chance to talk andhave their views heard,

so if we could just share the air time there. Does anybody have any questions about the

norms or the ground rules? (Noresponse.) Seeingnone,great. Okay. We'11go ahead and go into the brief agenda review. Everybody should have a copy of your agenda in your package. I wrote a rough outline of that here. David has already talked about the purpose of the meeting. Again, we are here to discuss the existing priorities,how the criteria we've used. We want to then go into what criteria we should apply. There's been a lot of talk about potential new products. We want to get your input on the process and criteria to be used for those

new products. We've had in the past a priority rulemaking that set some criteria that we have on existing products. We just want to make sure that that's appropriate for any new products in moving forward. Again,David also did opening remarks and 

### NEALR.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

### we did introductions. I'm currently doing the agenda review. From there on,Ed Pollock is going topresent for the Department, the presentations today. We're going to look at the existingproducts, howwe've used the priority setting for those products, what they are, and talk about what are some possible of potentialnew products,and discuss andget input from you what criteria we should use, what process 

### we should use for these new products, and how to handle that, how to move forward, and then we'll talk about next steps,if we want to have a follow-upmeeting, if that's necessary, and get into how we proceed from there. So, with that, I'll turn it over to Ed Pollock for his presentation. MR. POLLOCK: 

### Good morning. Thankyou all for being here. We look forward to a good lively discussion today. One of the things Bryan didn't mention was some of the housekeeping issues. There

are restrooms at either end of the hall, and one of the problems that we're still trying to address is the issue of if you brought computers in, you will need a property pass to get out. Unfortunately, both of the people in our office who can sign those passes are out of the office today. So 

### you may have to leave them NEALR.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.comhere and come back next week to get them, but wet 11 try to get someone here. And you will need to stop by. We'll let you knowwho that is and what you will need to stopby and get aproperty pass soyou can get your -- VOICE: Is that true for cellphones, too? MR. POLLOCK: Cell phones have not been something that they've been checking, but computers

are. (Simultaneous discussion.) MR. POLLOCK: The history of theprogram, many of youhave been connectedwithus long enough to know the origins of this. Back in 1972, when the first legislated mandated the Departmentbegin and set mandatory standards fora selectivegroup ofproducts, the Department was a littlebit slow in getting those standards set, and so Congress came back in 1987 and set the first level of standards for products and set

a schedule for us to go back and revise and update those standards usually on a five-yearcycle. In 1998, they added fluorescent lamp ballasts, which was really the first commercial product to be covered,because it only applies to the fluorescent lamp ballasts in commercial applications, not residential product, and then in 1999 with the 

### NEALR. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE.,N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.comEPACTAct,otherheating, cooling,spaceconditioning, distribution transformers, other commercial equipment was added. I'm not going to spend a lot more time on that, but that sort of gives you a background. In 1996, there was a question about the methodology that we were using for the development of standard entrust procedures, but mostly on the standards area, and so we developed a process rule which laid out procedure that was a more open dialogue, encouraging consensus and encouraging more direct involvement of stakeholders in the rulemaking process. And one of the things that came out of that was, of course, the prioritization of the work that we do. We realized that we did not have either the staff or the resources,the funding resources from Congress, to allowus to do all the rules that were on the docket, and we began a prioritization process. This is a list of the priorities that we set last year for the products and, as you know, we came up with avery intensive cycle of rulemaking last yearwhenwe finishedup a number of final rules. So, this year, we're just beginning the rulemakings. 

### As you can see,the ones in the high priority is the ones that we have either started or had planned to start 

### NEAL R.GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202) 234-4433 WASHINGTON,D.C. 20005-3701 www.nealrgross.com13 

### earlier. Because of some carryover housekeeping for the residential central air and some other items, we've only started work on the distribution transformerswhichwas done a littlebit earlier,and then furnaces and boilers -- 

### residential furnaces and boilers -- 

### and commercial central air conditioners in the 65-240

### k

### Btu are rules thatwe are already working

on. The plan was forus to completeor goback and revise work thatwe had started on a determination to decide whether we should consider mandatory standards for smallelectricmotors, those below 1

### hp, and we also planned to start work onpackage terminal air conditioning and heat pumps. Medium priority indicates those that we, as we have resources, those we take off the cycle of high priority that we would probably develop next. And then the low priority indicates ones that we've either recently finished, worked on, or where the energy savingspotential was very small. These are the ones that you probably see in the reg agenda that's published in the fall. The reg agenda is revised and published twice ayear. The inputs for this comingup,which is usually published in the October-Novembertime frame,weye sent over to NEALR.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com14 OMB for review just recently. It's not clear whether if we were to decide from the discussions here and follow-up discussions to change our priorities, whetherwe would be able tomake a changehere,but we

can always adjust those and publish them at a later date. The type of thing that we want your input on today is the question of if we extend the program, do

we blend this new program with the new products, we finish these first, those are some of the things we

are looking for in the discussion. In the process of prioritization, for the existing covered products, this is the criteria that

we looked at in setting those priorities. The most importantone,because thatr swhat we're all about, is the issue of the energy savings potential. Up until now, it's been pretty clear there were these products that were high, big jump, and then there was sort 

### of

a gap, and then there were the products that had lesser energy savings. The other issues were the economics of potential benefits both to the nation and the impacts

on consumers and on manufacturers, the issue of the environmentalbenefits,energy security, going back to the energy savingspotential, the deadlines that were statutory requirements that were placed on us, the 

### NEALR.

### GROSS COURT REPORTERSANDTFWNSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON,D.C.20005-3701 www.neairgross.comresources that were available,and to some extent the

resources that were required in order to do 

### a rulemaking. Some of those rules earlier, when we startedback in 1996,we had already done an extensive amount of work, so the expense to proceed with those rulemakings. And, also,we had committed to looking at the cumulative burden on manufacturers, and so we were concerned about other regulatory actions, both things that we were doing in DOE as well as 

### EPA actions which is the issue of changes in refrigerant

or cooling agent, or insulation materials. And then the other factors at the bottom there I'm not going to go through one-by-one,were also considered of lesser impact. So the discussion today is being responsive to the new National Energy Policy, and we have begun a study to identify products -- and I'm going to show two slides,you have them inyour folder there -- which is a list of products that we've identified that we think perhaps shouldbe considered for some sort of action by the Department of Energy. And the question -- the reason for putting these up is not to indicate that we've already made a decision. What we did,we went through a whole variety of lists from the ACEEE, from the California Energy Commission 

### NEALR. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.comlist, and other actions that groups were doing, and compiled this list. And we've begun to gather data on these different products in terms of the energy savings potential,the total energyused, some of that type of information. We will be putting a report together which eventually will lead to a recommendation to the Secretary of actions that we believe the Department should take. The reason for putting this list up today is to help stimulateyour thinking about the types of issues that we should consider both in deciding whether these should or should not be considered, or some sort of action in considering how we would prioritize the work that we're doing. And as we'll talk later, the issue here is not necessarily for mandatory standards,but there are other issueswhich

we might want to consider,other actions that wemight want to consider, rather than -just going straight to

a mandatory standard. This completes the list of products that we're looking at, and you can see it's quite a range,

a variety of different things, some very small products through some of the ones that -- the office equipment and things, which are a fairly extensive market and are large users of energy. 

### NEALR.GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.comTo frame the discussion then, and then open the floorup to discussing some of these topics, the question is how do we proceed from here? Most important is what are the criteria that we should be using for deciding which of that big list and others that we might identify later on should be considered for some sort of action? And the otherpoint which we want you to keep in mind as we begin this discussion is the question of what actions should we be thinking about here, besides prioritizing them, what do we do with these products that we've identified? Should there be a mandatory standard? Should we be looking for negotiated agreement of some type, some sort 

### of legislative action, is a voluntary program, Energy Star, tax credits, there's a whole mix of things on the table as far as process that the Government could do in order to encourage energy-efficient use of different products. I'm going to open it up to discussion now

as far as the first point,what are the criteria that we should use? Is the list of criteria that we've had, that we've used in the past for the prioritization process for new products? Is that a good place to start, or are there things on there that are not -- I saw a hand over here first. 

### NEALR.GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202) 234-4433 WASHINGTON,D.C. 20005-3701 www.nealrgross.comMR. FARKAS: Tom Farkas, EEI. 

### A quick question,was there any criteria used to generate the two lists of potential new products? MR. POLLOCK: Not at this point, no. We just -- we started off by saying, okay, we looked at everybody else's list and we compiled those into one single list. We did not attempt to do any prioritization with them. MR. FARKAS: Maybe more just a "wishlist" than anything else. MR. POLLOCK: It wasn't even a wish list as much as just saying these are products which you identifiedof others,maybe some on there thatwe knew about that had fairly high energy use. That does not conclude that there's a savings potential, they may already be as efficient as you can build them. MR. SAMUELS: Chuck Samuels, AHAM. 

### I thinkyou're askingnow about the criteria rather than about specific products, isn't that right? MR. POLLOCK: That's exactly right. We need to talk about, first, the criteria, and then. we'll talk later on about how we apply the process. We just define the criteria, then we can get -- at this meeting, I don't expect to get any further than that. I mean, we'll need to go back and collect NEALR.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.neaIrgross.com19 information about these criteria to share with everyone, to work with you to make sure that information is correct. Thenwe'll have to apply that criteria to decide which products -- 

### MR. SAMUELS: With respectto the criteria that were developed, I think, fairly carefully over the last five or six years, I think they were good criteria. I think they've been wisely used and, in general, Iwould think that youwould want tomaintain all of them, and probably not make radical shifts in them one way or another. I mean, the fact of the matter is that you need to apply limited resources to areas where it makes the most sense to do regulation and where you have statutory authority 

### as well 

### as requirements,and I think, in general, the Department has done that over the last five or six years. So, 

### I don't think that things have to change all that dramatically. That doesn't mean the regulatory program is not going to change somewhat, it is inevitable that it will, but 

### I think that you've got

a good balance of criteria, energy, economic, practical reality, and I think they still make a lot of sense, to all be considered in combination. MR. GOLDSTEIN: David Goldstein, NRDC. 

### I think, in general, I agree with Chuck, the criteria 

### NEALR.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.commake pretty much sense, with maybe a little bit of elaboration on the first two that you have up there, to look at areas where there's perspective growth -- you know, something like electronic equipment where there's a doubling of the market share every couple of years,obviously has abig potential,orwhere there's some feature that might be developed that could be very energy-intensive if you do it one way, and much less so if you do it another way, and the decisions haven't yet been made. So, rather than asking industry to change something they are already doing, you are kind of guiding them to do it the right way the first time. But there's one kind of new criterion that's sort of related to the bottom one you've got there,which is on status of required changes to test procedures. A lot of areas where there's an opportunity, there aren't test procedures, or there aren't good ones, and we need them. Televisions, computer monitors, PCs -- you don't have a test procedure. You can't even have themarket work if you don't have a test procedure because the consumer doesn't know whether a given product is energyintensive or not. 

### I mean, look at computers. We've had a lot of misunderstanding over the past year about 

### NEALR.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.neaIrgross.comhow much energy computers use because people look at the nameplate and say, IfWell, it says 200 watts, so it must be using 200watts times 1,000hours,orwhatever it is on a yearIf,and they are getting numbers that

are five-fold too high. But we don't know what the right numbers are for any piece of equipment. So,if youhave the testprocedure, that's the first step. And that's a first step to an Energy Star program, it's a first step to tax incentives, it's a first step to mandatory standards. We don't have to decide what it's the first step to,but we do need to take that step because nothing else can work until it's done. 

### MR. SCHLEEDE: Glenn Schleede, citizen

consumer and taxpayer. To saveyour time, I've put a bunch of comments in a letter addressed to Secretary Garman, and he has a copy, and there are about 50 copies back here if anybody else has insomnia and needs something to help tonight. What I suggest in here is three or four things that ought to be done before you get too far down the road looking at new criteria, and that is to go back and look at this whole scheme or evaluation, first. Second, to do something about the terrible quality of the data that's been used by DOE in doing 

### NEALR.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.comthe evaluations. And, third,add somebetter consumer representation,and here I am encouraged to see that we finally have a couple of consumerpeople's cards at the table at least in the form of Competitive Enterprise Institute and Mercatus Center, who really do represent consumers. I'd like to add one thing to your criteria,and that is suggest that you look at what's out there now that is misleading consumers. One example I'd use is your dishwasher test procedure. DOE has known for over two years that you've grossly overstated the use of dishwashers. The practical effect for consumers is that thoseyellow tagshanging

on every dishwasher in every retail store across the country overstates potential energy conservation by about double. Yet, DOE has never corrected that, and you are busily misleading consumers. So,why not put that on the list as something to fix? Thank you. MR.LIEBERMAN: Ben Lieberman, Competitive Enterprise Institute. I just have one general comment. I'd like to step back and see where we are with the National Appliance Energy Conservation Act. It's now almost a decade and a half old and,as we can

see from the attachment of existing standards, it's a fairly aggressive 15 years in terms of regulations. 

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### Most of the major household appliances, the major energy using household appliances, by now have been subject to two,or even three,rounds of successively tighter standards. And as you know with the wave of

new standards that were promulgated in the final weeks of the Clinton Administration, we1 11 still see that fairly aggressive regulatory pace for years to come. And at this point, I think it's worth asking do we really need to regulate at this pace for the next 15 

### years? I 

### think, quite arguably, the things that make themost sense to dounder theNAECA have already been done, and I 

### would caution against blindly just picking new products, products that quite wisely 

### DOE didn't bother with until fairly recently. We certainly don't need tomeasure ourwork product just by the number of standards promulgated, and I 

### think there's a very strong argument at this point for a standard setting pace slower than we've seenup until

now. MR. BRUNDAGE: Don Brundage, Southern Company. You sort of cover this,but not explicitly, in your priorities on potential for energy savings. I'd like you to take care that in choosing which products you go after, that you look at interactions NEALR.GROSS COURTREPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202) 234-4433 WASHINGTON,D.C. 20005-3701 www.nealrgross.com24 and substitution effects -- for example, groundcoupled heat pumps. Almost every ground-coupledheat pump ismore efficient than almost any air sourceheat pump. So,I think it would probably counterproductive to try to set an efficiency standard because all you're going to do is push people towards less efficient products. I'm sure you're going to include that, but 

### I wanted to make sure you include it. The other comment is -- 

### I think you've also got it covered --on evidence of efficiencygains absent new standards. Some of these on this list, like traffic signals, will probably go to high efficiency anyway, just for low maintenance and other factors. Thank you. 

### MR. WILLIAMS: Ted Williams,American Gas Association. 

### I want to second what Don just said about substitution effects. I think that's really critical, and the Department, up to this point as the products we're concerned with, hasnf t really done a good job on looking at those. But, more importantly, on the criteria, which we really want to focus on here, I think the criteria are good. I think they are set, in part, by the process rule, but I notice in looking at the priority list, the typical thing the Department 

### NEALR.GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. (202) 234-4433 WASHINGTON,D.C. 20005-3701 www.nealrgross.comdoesn't provide informationon lotsof these criteria. Look, for example, at a product that doesn't really pertain to our industry, but distribution transformers. It sayspotential economicbenefitsnot available, yet it's a high priority. Idon't know how you can have high priority, but not have any information on these criteria. So, it's up to the Department to decide, inpart,based on resources and its requirementsunder the law,what it can or cannot analyze in advance in the setting of priorities. Iwould push for including these criteria, but certainly having documented numbers that satisfy this criteria. MR. MARTIN: Michael Martin, California Energy Commission. I would like to emphasize what David mentioned, that the test methods are very important,much more important than the emphasis that DOE has put on them in the past because they are used for a great number of purposes other than setting minimum performance standards. There's been 

### a staggering amount of incentives being for various kinds of high efficiency equipment in my State,and 

### I think a good test method is absolutely vital, and I'm

a little worried that we are still waiting for the test method for the Energy Policy Act units that 

### -- NEAL

### R.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202)234-4433 WASHINGTON,D.C. 20005-3701 www.nealrgross.com26 requirements that we had a rulemaking for a proposed rule. And I think one of the things on your criteria is how close you are to finishing up. There's a number of things that need to be finished up, and that's why this is very important. MR. POLLOCK: I'm going to ask for a little clarification on this because I think it's an important point. Are youproposing that we apply the criteria for test procedures separate from standards,

or blended with standards, or how do you see that working? MR. MARTIN: I thought you were going to be discussing test methods, but it seems to be taking

a second place to standards. MR. POLLOCK: For clarification, the discussion that we'll have later is once we've talked about the criteria,and maybe we need to clarify this, is that we will need to talk about the actions thatwe will do. Certainly, one action could be to decide that mandatory standards are not merited because of the high cost or other implications, but that an education of the consumer, which would mean proper measurement and labeling of the product, would then enable the consumer to buy intelligently, and some 

### NEALR.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com27 other action, whether it's Energy Star or informational sheets or informationalTV --you know, there are a number of things we might do that would make sense,sort of what'shappeningwith the vampires

on the standby power right now, where -- MR. FOLEY: Could we not use that word? MR. POLLOCK: -- all right -- standby power. Even referring to that is not to imply that that is something that I'm setting at a high level of priority. The point is that there is a public awareness about standby power now that didn't exist a few months ago. So, there are other things that we can do like that where it make sense,but of course it

means that the product needs to be labeled properly, and that means test procedures. So, my question, going back to you, Michael, was howdoyou seeusprioritizing activities that we might do like that,which gets us to a point of labeling versus mandatory standards, and 

### I think 

### I heard what you're saying. MR. 

### MARTIN: Iwasn't really getting into labeling, I was just getting into test methods, and there are some -- David mentioned one -- a television test method, the entire industry, the Energy Star program didn't use. Water heater test methods, you 

### NEALR.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.comhave a scope which is less than your standard, which for people who will have to be revising State standards, drives them out of their minds because their attorneys say it has to say what it means and nobody knows what it means. Third one that is a concern to me is the Energy PolicyAct product that 

### I assumedwe would have had a final rule on by now. Maybe we have, and I missed it. And there's another one that's rather similar to it isyouhad something aboutwine chillers that had a proposed rule that never came to fruition. And things that are so close to finishing, it seems like finishing should be a high priority. Someof the testmethods,as 

### I look across to BobWisbey here,NEMA has come up with test methods

on these transformers, for instance. Itwould be nice for you to say this is the official Federal test method, but it wouldn't make a hill of beans of difference in that particular case. In fact, televisionand choosing theseEPACTproducts does make a difference. MR. POLLOCK: 

### I didn't put the slide up, but Bryan gaveyou the sheet,those of youwho got our mail-outon theprioritization for thisyear know that 

### NEALR.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com29 we have been prioritizing test procedures. We have right now the dishwasherswhich are hanging out there to be finalized,and that was the issue of what we do with the smart machines. We are just in the last stages of finishing up the revisions which is just a bunch of housekeeping and making the test procedure easier to use,which we will be coming back to revisit

on the issue of how many cycles as well as how do 

### we deal with smart machines which use a lot less energy. The test procedure right now does not do a good job of measuring that energy use, and we are working with AHAM to revise and address those issues. The other EPACT rules which you referred to, Michael, the transformer test procedure, we gave

a draft of our rule and proposed changes to the rule that NEMA has developed, met with them a couple of weeks ago, and we're bringing that to conclusion shortly. We also are finalizing the activities for the commercial heating/cooling and water heating products. We are moving forward on that, and will fill out this list because we did expect by the end of this fiscal year to have finished them. We'll be close to that. MR. MARTIN: 

### I look forward to seeing that. 

### NEALR.GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.comMS. MILLER: Deborah Miller, fromARI. 

### I want to stress twopoints,one that was made by Chuck, which is that Ido think this is a good, comprehensive list, and I think that it has worked. 

### I will question, though,one of the points which is relevant regulatory actions affecting products, and want to make clear aswell that that should include cumulative burden of industries that have several products that are being regulated by the Department of Energy. On a secondpoint, Iwanted to also agree with what Ted Williams said about important information that you must have before deciding to go forward with these products because, in our case,

### we have several niche products aswell as some industries that are not niche but have a very complex product offering. It really needs to be evaluated before you move ahead with the standard. MR. PRINDLE: Bill Prindle, Alliance to Save Energy. I agree that the list of criteria is a good list and a lot of the methods have been pretty well developed. However, Iwould suggest that there's always room for a little improvement in some of the analytical methods used under these criteria, and 

### I would offer a couple of comments of that nature. In the area of energy savings,we've seen NEAL

### R.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODEISWNDAVE., N.W. (202)234-4433 WASHINGTON,D.C. 20005-3701 www.nealrgross.comin the last year or two that the time at which energy savings occur can be critical for security of electricity systems and so forth. So, going forward just encourage the Department to make sure that time differentiation is included in the analysis of energy savings. Iknow that in California, they are actually developing some methodologies in the codes and standards programs to begin to quantify the timedifferentiated value of energy savings. That also spills over into the economic benefits. 

### I know the Brookview Lab and others have done heroic efforts to try and determine what the marginal prices of electricity are going to be when the standards become effective, and this is always 

### a difficult task. Going forward again, 

### I think we need to continue to look formore data,more accuracy onwhat kindsof pricing practices are going tobe evolving in the marketplace, and use those as much as possible. And,thirdly,a commentwas mentioned that NAECA has been around for almost 15yearsnow. One 

### of the benefits of that is that we're beginning to get

some data from the market on what the impact 

### of standards are on product prices. Right now, the Department is kind of limited to using best estimates 

### NEALR. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.combased on reverse engineering or industry data. We do have some data now as to what the market tells us about what some of these products cost as a result 

### of the standards action. So, to the extent that data is available from Census or other sources, we really encourage the Department to take that into account 

### in trying to modify whatever limited estimates it's got from engineering or from industry sources. Thanks. MR. ISAACS: David Isaacs, with Hewlett Packard. Someone had mentioned earlier the need to consider the growth in the market of the products. 

### I think that, in conjunction with that, it's also appropriate to consider the dynamic nature of the products or technology and the potential impact that standards might have on the development of that technology and future product innovation. MR. THOMPSON: Mike Thompson, with Whirlpool Corporation. I can't emphasize enough what Deb just mentioned a fewminutes ago about cumulative burden. I would very much like to see that as explicitly written as far as priorities for existing programs. This industryhas justgone through - - and particularly Whirlpool -- has just gone through a complete revisionof every singleroomair conditioner 

### NEALR.GROSS COURT REPORTERS ANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. (202) 234-4433 WASHINGTON,D.C. 20005-3701 www.nealrgross.com33 that we make, at our Laverne Division, as of October lst, 2000, some at substantial cost to increase 

### our efficiency by about 20 percent. Effective July 1 of thisyear, you are all very much aware that the entire industry, including all three divisions of Whirlpool's refrigeration manufacturing, had to improve the efficiency of every refrigerator we make by 22 to 30 percent, at no insignificant cost. We are lookingat clothes washer standards effective 2004 and 2007, at no insignificant cost. When I look at microwave ovens, I have a hard time understanding why they are on the list. Theyuse onequarter thepower 

### af a range and, asyou all know, the DOE determined that no standards were necessary for those products and they are not listed here. So, I'm having trouble seeing why that's on the list. Lookingatdehumidifiersandcoffeemakers, 

### I will not disagree that they use energy, I will disagree that they use significant amounts of energy, particularly when you put in the context of the fact that you have about 105 percent penetration rate on refrigerators,very high penetration rates on clothes washers, and the other product categories recently regulated. Iwould love to see those eliminated from 

### NEALR.GROSS COURTREPORTERS ANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com34 the list. And 

### I encourage you to add explicitly cumulative burden to your list of criteria. MR. POLLOCK: You made reference to some points that I will touch on, that is, is there some way that we could come up with a threshold of total energy use of those products and still take prioritization process. We're going to look at what the national energy use is for those particular products and draw a line there (inaudible) 

### , or does it make sense to try to -- now, obviously, we can't deal with all these products. This list is a compilation and we -- MR. THOMPSON: I couldn't agree more. MR. BERRINGER: One moment, please. We're not picking you up, Ed. You might use the hand-held

one. MR. THOMPSON: I couldn't agreemore, Ed, particularly when you're looking at the total penetration of some of these other products. Certainly, microwaves have a high degree of penetration, but not everybodyf s got a coffeemaker, necessarily. Not everybody's got a dehumidifier. There are parts of the country that don1 t even know what a dehumidifier is because they don't need them. And certainly you have to look at total national 

### NEALR.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com35 energy consumption as one of the criteria,without -- absolutely, you have to see that as part of your criteria. But 

### Iwould also add thatyouhave to look at it in the context of what would happen to these products if you did regulate it. What kind of innovation would you stifle? What kind of future consumer features would be eliminated from the marketplace. And that's all part of the makeup, but it needs to be high on your priority list. 

### MR. NADEL: In terms of the current priorities, Iagree it's generally a pretty good list, I think it's a pretty complete list. The one thing 

### I think 

### I might add to 

### it for some products is peak demand savings, or some products that are used disproportionately at peak, and for those products standardsmight be more important than just the energy savings alone. It only applies to a limited number of products, but it can be an important criteria given

some of the problems we've had over thepast year that illustrates it. However, ingeneral,this is a fairly long list, and I think it's very difficult to start balancing --you know, trying to analyze every single

one of these criteria for every single one of the products, and do a careful balancing, you're talking 

### NEALR.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202) 234-4433 WASHINGTON,D.C. 20005-3701 www.nea1rgross.comavery long analysis procedure. You are going to have to -- this is just for an initial screening -- do the best you can,but don't expect perfection. Also, 

### I think you are going to need to have sort of some guidelines or a way to boil it down in terms of, you know, sort of an initial prioritization, and then you can bring the other factors in rather than analyzing everything in excruciating detail. What we tend to do -- and it might be something you'd want to consider doing -- is we look at products for likely energy saving from technically feasible and cost-effectivestandards. That captures the economics, it captureswhat is likely to be done 

### -

- not the range of anywhere from zero to some trophy model that is extremely expensive to produce 

### -- concentrate on what the likely standard should be, factor in what is likely to happen in the market anyway,and you can get an approximate energy saving, plus orminus 30percent, 

### I agree. We then tend to do

a ranking of those. And then we go to the top of the list and say is there some factor that would then cause this first one to go up or down in criteria -- that's where the other criteria come in -- and it would be a way to hone in on the key questionswithout 

### NEALR.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.comhaving to do an exhaustive analysis. 

### I mean, as it is, DOE often errs, I think, into the range of paralysis by analysis, and we want to be careful and do the analysis where it's helpful in and of itself, and add a year to any type of priority-setting process. One or two other comments. I think at least one person talked about, gee, we've been doing this for 15years,maybe we should slow down. 

### Iwould agree we should slow down if the opportunities for significant energy savings from technically feasible and cost-effectivestandardswas low, but, in fact,if you look at things, we keep discovering new opportunities, things -- we didn't realize how much energy we use, or we didn't analyze them in 

### a particular way. From our analysis,we're seeing just

as many opportunities as we did before, off and on interest in different products. We are often talking similar orders of magnitude of savings of some of the original products. So, it's a question of looking what the opportunities are and 

### I think in this case there are some very significant opportunities. Maybe 15 years fromnow, therewon't be, time will tell,but we've been actually surprised at how big the opportunities are. NEALR.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.comOh, one other thing. You asked about should there be some type of criteria for things that youdon't screen. NAECA doesprovide one criteria for consumer products, it talks about 100 kwh per household per year. That's one thing that's actually in the law. MR. FREDRICHS: Mark Fredrichs. Steve actually made my point. I was mainly concerned about the different levels of decisionmaking that I thinkwe all have to anticipate. There are 44products on this list right now. I suspect that before the day is out, some products may be added to that list, and we're going to have to figure out a way of narrowing down that list to even identify products that we can do this kind of analysis for. I'm not sure what that number is, maybe ten or 15, and then once we've identified the high priority products, we're going through even more detailed analysis before we decide exactly what the most appropriate action, whether regulatory or not regulatory, is. So, I think everyoneneeds to keep inmind that we're whittling down a very long list. MR. POLLOCK: Okay. Let's go to the back of the room. MR. JOHNSON: Doug Johnson, Consumer 

### NEALR.GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com39 Electronics Association. I'd like to add two things to that list,one,the impact on smallbusiness, which is often a consideration in other government rulemakings. And then, also,broadband, Iguess,more generally, the impact on other national priorities, such as broadband deployment. We're talking about equipment,and they connect at the end of telecom,and 

### I think that should be a consideration as well. MR. POLLOCK: Thankyou. We've started to

move a little bit intoprocess discussion. Are there

more people who want to talk about and make suggestions on the criteria? Charlie? MR. STEPHENS: Charlie Stephens, Oregon Energy Office. 

### I'm not sure what criteria you're applying to get things on the list,but one item that

was added to the list by legislation years ago, and appears on none of these lists is televisions. Is there some reason why it doesn't appear anywhere? 

### MR. POLLOCK: Televisions were one of those that was in the original NAECA standards. It had a rather strange category,but there is no reason why it should not be consideredwith the mix of things that are being done. MR.MATHAI: BillMathai,Alliance Laundry Systems. What about the number of rulemakings we've 

### NEALR.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com40 had, cases of clothes washers, residential consumer style. We're on the third standard. Is there a maximum number? 

### I mean, are we overharvesting? MR. POLLOCK: Others who want to talk about criteria? MR. WISBEY: Bob Wisbey, with NEMA. The one criteria that we don't see here that we believe should be included when considering new standards is readily commercial availability of themore efficient products. We believe the standards, if they are tobe used in this program, should be used to expedite the market transformation to commercially available products where that market transformation isn't occurring fast enough on a natural basis, and should not be used to force the innovation of more efficient products that aren't already available. MR. POLLOCK: Thank you. You remindedme of one thing I started off with saying. This process in response to the National Energy Policy, we are looking for is to decide what actions the Department should or could take to encourage more efficient use, including mandatory standards, but where there is a good product on the market and the market is moving that way, are there other activities that we could do to encourage consumers to move in that direction. 

### NEALR.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.comMR. JOHNSON: Doug Johnson,CEA. I think with the added focusand emphasis on saving energy, we ought to channel those energies into the Energy Star program itself. I think there's certainly room for improvement within that program,but the program sets

a great example for us to follow. MR. POLLOCK: Thank you. Earl, did I see your hand? MR. JONES: Oh, about 20 people ago, Ed. MR. POLLOCK: Sorry. Did it get covered, or do you have something to add? MR. JONES: It did get covered. MR. GOLDSTEIN: David Goldstein, NRDC. For thepurpose 

### ofAssistant SecretaryGarman's review of this record -- he hasn't heard me saying this in all the previous prioritization proceedings -- I need to reiterate thatwhile all this is commendable,we're talking about DOE'S prioritizing how it's going to fail to comply with the law. NAECA and EPACT have mandatory nondiscretionary requirements for rulemakingsby certain times,and at the policy level

we really ought to be discussing how DOE canmeet all of its mandatory rulemaking requirements, and then prioritizing the discretionary ones. MR. POLLOCK: Thank you, David. 

### Why NEALR.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com42 didn't you wait until he came back? You want to repeat it, he's back in the room now. (Whereupon,at 10:OOa.m.,themeetingwas suspended, to be resumed at a date and time to 

### be determined.)



### NEALR.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.comCERTIFICATE

This is to certify that the foregoing transcript in the matter of: Priority Workshop

Before:

Date: Office of Energy Efficiency and Renewable Energy September 11, 2001

Place: Washington, DC

represents the full and complete proceedings 

### of the a£orementioned matter, as reported and reduced to typewriting.