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Neal R. Gross and Co., Inc.

 U.S. DEPARTMENT OF ENERGY

 + + + + +

 CENTRAL AIR CONDITIONER REGIONAL STANDARDS

 ENFORCEMENT WORKING GROUP

 + + + + +

 PUBLIC MEETING

 + + + + +

 WEDNESDAY

 AUGUST 27, 2014

 + + + + +

 The Public Meeting met in Suite 600,

National Press Building, 529 14th Street,

N.W., Washington, D.C., at 9:00 a.m., Neil

Eisner, Meeting Facilitator, presiding.

PRESENT

NEIL EISNER, Meeting Facilitator

TIMOTHY BALLO, Earthjustice

GARY CLARK, Goodman Global 

JORDAN DORIA, Ingersoll Rand

RAY ELLIS, Lincoln Electric Cooperative 

GARY FERNSTROM, California Investor Owned 

 Utilities 

JOHN GIBBONS, Carrier Corporation 

MATTHEW LATTANZI, NORDYNE Inc. 

CHARLES McCRUDDEN, Air Conditioning 

 Contractors of America 

JON MELCHI, HARDI

KAREN MEYERS, Rheem Manufacturing Company

ELIZABETH NOLL, Natural Resources Defense 

 Council 

STEVE PORTER, Johnstone Supply

DOUG RAWALD, DOE General Counsel 
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Neal R. Gross and Co., Inc.

PRESENT: (cont'd)

BRYAN ROCKY, Johnson Controls 

HARVEY SACHS, American Council for an 

 Energy-Efficient Economy 

AMY SHEPHERD, Air-Conditioning, Heating and 

 Refrigeration Institute

CHARLES WHITE, Plumbing-Heating-Cooling 

 Contractors - National Association 

DAVID WINNINGHAM, Allied Air Enterprises

ALSO PRESENT

ERIC CHEN, Air-Conditioning, Heating, and 

 Refrigeration Institute

LAURA DEGITZ, Navigant Consulting

JOHN HURST, Lennox International 

EMILY MARCHETTI, U.S. Department of Energy 

CRAIG MESSMER, Unico*

ALEX KROWKA, U.S. Department of Energy 

CHRIS NELSON, Carrier Corporation 

DON SURRENA, National Association of Home 

 Builders

 *via teleconference 
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 CONTENTS

Introduction and Welcoming Remarks

 Neil Eisner.................. 4

Discussion of Use of DOE and AHRI

Certification Database 

 Eric Chen.................... 10

 Chris Nelson................. 74

Distributor's Presentation Re:

Role, Records Retention, Market

or Pressures

 Steve Porter................. 147

General Discussion of Topic 

Categorization

 Neil Eisner, Moderator....... 302
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1 P-R-O-C-E-E-D-I-N-G-S

2 (9:18 a.m.)

3 MR. EISNER: If could have your

4 attention. As you may know, we have some

5 problems with people getting online and being

6 able to hear them when they want to talk to

7 us, they can follow us but they are trying to

8 fix that. But before we get going, a couple

9 of key pointers. We will start with some

10 basics while they are working on the phones.

11 We have a different kind of a

12 system. It is going to be a little harder for

13 the court reporter today. She is going to try

14 to do it off of a recording to create the

15 record. That means we really have to stop

16 having sidebar conversations because that is

17 going to be on the tape recording. She is

18 going to have a hard time trying to figure it

19 out. So, if we need to take even a five20 minute break because you want to have some

21 side conversations, let me know. We will go

22 off the record and do that, take care of that
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1 in that way.

2 The other thing, Harvey wants to

3 give us some background about it, is where to

4 eat, where to go to the bathroom.

5 MR. SACHS: Thanks. Thanks for

6 coming to ACEEE. We are all delighted to have

7 you here. The first thing I want to do is

8 introduce ACEEE contact Suzanne Watson, who is

9 our Policy Director and our Industrial Ally

10 Program. A number of the manufacturing firms

11 is here as well as AHRI, our members of the

12 Ally Program. So, we are going to define this

13 as being an ACEEE Ally meeting that you don't

14 have to know about and, consequently, please

15 enjoy the coffee and tea in the kitchen. We

16 can't do that for outside groups. Suzanne

17 said she would cover our back.

18 Bathrooms: At the reception desk in

19 front, there are keys to the bathrooms. The

20 bathrooms are out the door, turn left, keep

21 going. When you can't go any further, you

22 will see the men's room and on your right is
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1 the women's. The keys for the men's and

2 women's are said to differ. I have not

3 checked.

4 In case of earthquake, shelter in

5 place. We had one a couple years' ago. In

6 case of fire, there are staircases outside

7 that door to your left and left. And outside

8 the back door, which is actually through the

9 kitchen and keep going straight and there is

10 one again immediately on the left. We have

11 never had a fire.

12 In case of Wi-Fi, the password is up

13 there and feel free to use that. 

14 And I am glad you all are here and

15 hope the room doesn't get overheated. We have

16 had a new fan coil put in, I think, but I am

17 not sure if it is in or commissioned. It is

18 just to cool this room. Last year, we had a

19 bad experience. 

20 Thank you, Neil.

21 MR. EISNER: Okay, anybody have any

22 questions?
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1 (Simultaneous speaking.)

2 MR. RAWALD: What is the rating of

3 the air conditioners?

4 MR. SACHS: Oh, this building dates

5 through the 1920s. It has extensive retrofit

6 of the chilled water system.

7 MR. WINNINGHAM: It sound like a

8 deal.

9 MR. SACHS: For anyone who wants to

10 get geeky, there are magnetic chillers

11 downstairs. I believe they have been upgraded

12 with an ordinary change out. The building met

13 90.1 when we moved in seven years or so ago

14 but nobody told me which version.

15 Our fit out of this building would

16 meet LEED criteria. We did not apply for

17 certification. The only notable feature that

18 you might enjoy at all is you will see glass

19 on a lot of the interior walls to try to bring

20 light in to the entire space and common

21 facilities, such as this conference room and

22 the kitchen, are set interior, rather than
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1 trying to showcase the view you can get from

2 this building.

3 This is the National Press Club

4 Building. Traditionally, all the major news

5 organization had their office suites here. We

6 still have Canadian Broadcasting, Al Jazeera

7 U.S. and I'm not sure what all else.

8 Thank you.

9 MR. FENSTROM: So Harvey, this is

10 Gary. Am I to appreciate that this building

11 is very efficient and it does not have that

12 annoying buzz that we have in the conference

13 room at the Forrestal Building, that the

14 cooling does not work very well in this

15 conference room?

16 MR. SACHS: Take off your shirt.

17 MR. RAWALD: Please don't.

18 MR. SACHS: If it gets bad, we will

19 bring in fans but this is an issue we have

20 worked on. Damn it, there is no such thing as

21 good comfort control. Please, let me stop. 

22 Save me from myself.
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1 MR. EISNER: All right, let's check

2 and see how we are doing with the phones.

3 All right, we are going with modern

4 technology. We are going to use the cell

5 phone conference phone when somebody wants to

6 speak from outside this building and join us

7 on that.

8 MR. RAWALD: Well, it's the only way

9 they can hear us, too. So, they can't hear us

10 except over the phone. So, we have to be loud

11 ourselves, so they can hear us. That is the

12 only way the sound is being transmitted to the

13 caller as well.

14 COURT REPORTER: May I make a

15 request? If they can -- with a person who

16 wants to speak to us from the phone, could we

17 just put it between Mr. Rocky and Mr.

18 McCrudden? I believe my microphone should be

19 able to pick it up very well there. If

20 something else is more convenient for all of

21 you, let me know.

22 MR. RAWALD: Emily, did you hear
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1 that? If you could put the phone over there,

2 that would be great.

3 MS. MARCHETTI: Yes.

4 COURT REPORTER: Thank you very

5 much. I appreciate it.

6 MR. EISNER: Okay, we are going to,

7 because of the time constraints and all for

8 some of the people, we are going to start with

9 what was on the agenda for this afternoon, the

10 discussion of AHRI DOE certification

11 databases. And then, depending on time, we

12 will get back into the issues that we were

13 talking about at the end of the day yesterday.

14 Amy, do you mind introducing?

15 MS. SHEPHERD: Oh, sure. This is

16 Eric Chen. He is the manager of our

17 certification programs at AHRI. So, Eric, if

18 you want to just kind of just briefly say sort

19 of what your role is and then given an

20 overview of what you are going to do, that

21 would be great.

22 MR. CHEN: Yes, good morning
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1 everyone and thank you for this opportunity to

2 discuss a little bit about our certification

3 program and share with you how our director

4 works. And we are going to run through some

5 sample examples.

6 My name is Eric Chen and I am the

7 Manager for the Unitary Small Equipment

8 Certification Program at AHRI. So, I am the

9 engineer responsible for auditing the

10 manufacturers for all their equipment listings

11 at AHRI.

12 And so with that, I guess I will

13 begin. So, will people on the phone be able

14 to hear me?

15 MR. EISNER: Would it be easier for

16 you to come up here or do you want to stay

17 there?

18 (Simultaneous speaking.)

19 MR. RAWALD: And if you want, we can

20 do the slides for you.

21 MS. MARCHETTI: Yes, I can do it. 

22 I'm right here. Tell me when.
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1 MR. CHEN: Okay. Yes, so today I

2 will just briefly discuss about our

3 certification program specific to Unitary

4 Small. We have many other programs at AHRI as

5 well but I think we are interested in this

6 today. And also I will run through a quick

7 download of our director and highlight a

8 couple key points about a director for you

9 guys. Next slide

10 All right, just some quick

11 statistics about our program. We have about

12 38 certification programs with over 400

13 participants. It is important to note that we

14 do some rigorous testing on our products and

15 the manufacturers' products with more than

16 2500 tests conducted annually for the

17 programs. In Unitary Small Equipment alone,

18 we have over 500 tests that we do every year. 

19 One of the key features of our program is that

20 we have an online real-time directory that

21 gets updated with current listings, current

22 ratings from all the manufacturers and
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1 participants in our program. And our

2 equipment is specified around the world.

3 Our program has been a stats program

4 for 50 years. It signifies credibility,

5 reliability, and trust. And we are also

6 credited and audited by the SEC. Next slide.

7 So, here I will go into a little bit

8 more in-depth of the Unitary Small Program. 

9 And I will start with the program scope for

10 the unitary small air conditioners. This

11 includes mixed-match coils from independent

12 coil manufacturers. And basically, it applies

13 to production models at 50, 60 hertz air

14 conditioners but the limit is 65,000 BTUs. 

15 Anything over that is qualified under the

16 Unitary Large Equipment Program. And the

17 products list on screen are what is covered by

18 the Unitary Small Air Conditioner Program. 

19 Next slide.

20 MR. SACHS: Eric?

21 MR. CHEN: Yes?

22 MR. SACHS: Excuse me. This is
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1 Harvey. Just as a very minor detail, does

2 this program include the three-phase

3 commercial units that are rated residential?

4 MR. CHEN: That is a really good

5 question and it does include the light

6 commercial three-phase products.

7 MR. SACHS: Thank you.

8 MR. CHEN: The unitary small key

9 pump scope is very similar but it is for air10 source unitary heat pumps. And again, it

11 still has a cut-off point of 65,000 BTUs as

12 the scope of the program and the parts listed

13 there are what is certified. Next slide.

14 So, what do we certify in these two

15 programs? And it is basically what is listed

16 as certified metrics under the AHRI 210/240

17 standard. And those metrics are shown below

18 as cooling capacity, Energy Efficiency Ratio,

19 EER, SEER, heating capacity and Heating

20 Seasonal Performance Factors. Next slide.

21 Okay and I am just going to go into

22 a brief overview of kind of our certification
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1 process with you guys. Manufacturers, when

2 they are planned to join or manufacturers who

3 are existing in our program, we organize their

4 models into basic model groups. Right here,

5 this is the way we classify a split system BMG

6 that consists of product with the same outdoor

7 unit with several indoor unit combinations. 

8 And the same outdoor unit refers to the three

9 things listed on the screen. The same or

10 comparable compressor used with the same

11 outdoor surface area and the same outdoor air

12 quality. Now, that is for a split system BMG. 

13 For independent coil manufacturer BMGs, they

14 have some additional criteria which I don't

15 want to go through that today but you can

16 refer to the operations manual in our program

17 to find out more details on that. Next slide.

18 As I mentioned before, we do annual

19 testing of all the participants, BMGs. The

20 way we conduct it is 20 percent of the BMG is

21 per year. It is tested at each manufacturer. 

22 And those selections of their models consist
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1 of HSVTC models, for cause models and just

2 random samples that we decide to test. And

3 for cause could be anything from the 13

4 federal minimum level or ENERGY STAR targeted

5 units. Those could be acted as for cause

6 units.

7 The units for this program --

8 MR. RAWALD: Eric, sorry to

9 interrupt. So, just to be clear, so the

10 HSVTC, that is the highest sales volume tested

11 combination?

12 MR. CHEN: Correct. The units for

13 this program are tested at an ISO-17025

14 accredited third-party lab, which is Intertek

15 in Cortland, New York. And we also do some

16 ductless testing in Intertek Plano in Texas. 

17 And then the rules of the program

18 are basically that all the ratings that the

19 manufacturer claims has to meet 95 percent of

20 their claimed ratings, when comparing the

21 tested results.

22 I also want to make a note that we
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1 do test active and discontinued products on

2 the directory and discontinued meaning that

3 the manufacturer no longer produces it but may

4 still be in the marketplace to do so. Next

5 slide, please.

6 So, after units get tested, we

7 review the results and if they meet the

8 claimed rating by the 95 percent rule, then

9 the test passes and no further action is

10 needed.

11 If the test fails, however, and it

12 comes in at less than 95 percent of the

13 manufacturer's claimed ratings, then AHRI

14 considers it a test failure and we would issue

15 that participant a manufacturer's decision

16 form. They have seven days to respond to that

17 decision form, otherwise, their Base Model

18 Group and everything that falls within there

19 would be re-rated proportionately to that

20 particular failed result.

21 Some of their manufacturer decision

22 options would include re-rating of the
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1 product, perhaps a defective claim or testing

2 additional samples to try to prove that rate. 

3 Next slide, please.

4 I do want to quickly touch upon the

5 qualification procedures. What I just spoke

6 to you about was for existing participants. 

7 But for qualifying participants, we have quite

8 a rigorous program. Again, it is based on the

9 applicant's BMGs but instead of 20 percent of

10 testing, we do 30 percent of their testing. 

11 And one of the biggest differences is that for

12 a qualification participant, all their tests

13 have to pass for them to be qualified into the

14 program. If there is a test that fails, then

15 they either have to re-rate all the rest of

16 the models or re-rate that particular model

17 and submit additional units for testing. Next

18 slide, please.

19 And I also want to mention that

20 federal agencies such as EPA, they do rely on

21 AHRI for some of their testing. AHRI is a

22 certification body to EPA. So, we do do
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1 additional ENERGY STAR testing for them.

2 We have an annual requirement of

3 testing at least ten percent of their ENERGY

4 STAR listed BMGs. And EPA have given us some

5 guidelines in terms of how to respond to test

6 failures. For example, we have to respond --

7 we have to notify EPA when there is a failure

8 within 48 hours. And then I just have the

9 metrics there below.

10 They also do things a little bit

11 differently. They are more concerned with the

12 ENERGY STAR specifications that are shown. 

13 So, the test results have to meet or exceed

14 the ENERGY STAR specifications shown there.

15 MR. EISNER: Eric, in order for you

16 to do the certification for EPA, does EPA do

17 any auditing or spot testing of your results?

18 MR. CHEN: EPA actually -- so the

19 ten percent of units that we have to test

20 every year for them, we actually give them

21 liberty to select up to five percent of those

22 units. So, we will send them a list of all
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1 the ENERGY STAR models, which they have

2 anyway. And they may get back to us and say

3 oh, we want to target some of these units. 

4 And they do also audit our process. Next

5 slide, please.

6 So, that was just a brief overview

7 of our program. And I think really what we

8 are here to discuss is the AHRI directory and

9 how to benefit everyone. Next slide.

10 Again, I went over this. So, we can

11 jump to the one after this.

12 All right, so how do you verify that

13 a product is AHRI certified? You can go to

14 our AHRI directory website, which again is

15 showing real-time data of all the

16 participants' ratings and system combinations. 

17 Anyone can access the directory. It is

18 completely free to use. So, homeowners,

19 contractors, distributors, manufacturers,

20 everyone can go to look at it. And it is

21 really the single locations to conduct

22 comparisons of similar models.
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1 Again, I mentioned those real-time

2 but one of the key factors here on the

3 directory is a certified match. For split

4 systems, it shows both the outdoor and indoor

5 combinations, as well as the ducted air mover,

6 which is listed as a furnace on the directory. 

7 It will show all those combinations. And you

8 have to have all those combinations to have it

9 qualified as a certified match. And then for

10 each combination that exists, there is an

11 equivalent AHRI certificate that can be

12 downloaded from our website. And I will go

13 into some examples of that in a moment.

14 Also recently we provide now the

15 Energy Guide labels as well for the Base Model

16 Groups, the Highest Sales Volume Tested

17 Combinations for each Base Model Group.

18 MR. SACHS: Eric?

19 MR. CHEN: Yes?

20 MR. SACHS: This is Harvey. Before

21 you move on, I just want to emphasize the

22 point from our first day that it is the
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1 combination of performance of the condensing

2 unit, which has been our major focus, the

3 indoor coil and the air handler, that gives

4 you the certified match with that SEER rating.

5 MR. CHEN: That is correct.

6 MS. MEYERS: Well, what did you say,

7 Harvey? Could you repeat that?

8 MR. SACHS: Not while I'm chewing. 

9 It is the combination, when you flip back, the

10 certified match is a certification of the

11 compliance or ratings of the combination of

12 the specific condensing unit, specific indoor

13 coil, and specific air handling system. Did

14 I miss something?

15 MS. MEYERS: Well, outdoor unit coil

16 and/or indoor size. You need an or in there.

17 MR. SACHS: I need an or in there. 

18 Thank you.

19 MR. EISNER: Okay, Bruce Helft has a

20 question.

21 MR. KROWKA: A question from Bruce

22 Helft. Are you stating there is a five
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1 percent testing tolerance from target

2 certified efficiency for testing on all BMG

3 HVAC setups? Are the mixed-match coils

4 SEER/EER certificates derived from actual

5 testing or estimated? If an HVAC is tested

6 under a routine enforcement testing program as

7 the CEC and DOE do and the mix-matched setup

8 is over five percent for a unit that was

9 derived statistically, what is DOE's position

10 on enforcement action?

11 MR. RAWALD: So, I will answer the

12 last question. This is Doug Rawald. This is

13 pretty off the scope of what we are talking

14 about here. So, we said before that

15 compliance is compliance. There is no five

16 percent tolerance with compliance with Energy

17 Efficiency Standards. So, AHRI, in their spot

18 testing has a five percent tolerance built in

19 for the ratings. That is different than any

20 sort of understanding by or statement by the

21 Department of Energy that we would tolerate a

22 five percent performance below the rated value
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1 required for a piece of equipment or a product

2 for the standard.

3 So, but the question is really kind

4 of outside the scope of what we are focused

5 on. We are really focused on the use of the

6 directory. So, perhaps Bruce can email those

7 questions directly to me, Doug Rawald, and we

8 can discuss them with AHRI offline. I think

9 it is a little outside the scope of what we

10 are doing here.

11 So, Dave, do you have a point you

12 want to make?

13 MR. WINNINGHAM: Yes, just to kind

14 of publicly, there are steps if there is a

15 failure at five percent, where it goes into

16 additional samples that ultimately if there

17 are continued issues, it goes into a process

18 that looks very much like the DOE statistical

19 approach.

20 MR. CHEN: So, here I am just

21 talking about some different users of the

22 directory. We have HVAC design firms,
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1 manufacturers, again I mentioned earlier,

2 federal agencies rely on our directory to list

3 their ENERGY STAR for EPA -- to list their

4 ENERGY STAR qualified models, utility

5 companies, contractors, technicians,

6 installers, architect building engineers. 

7 There is quite an assortment of users of the

8 directory and they all use them for different

9 reasons but utility companies for rebates,

10 manufacturers to show their customers that

11 view what their ratings are. The directory is

12 really the one-stop shop to get all the

13 information that a consumer or architect or

14 contractor may need to design their equipment.

15 MR. RAWALD: Eric, if I could stop

16 you here. This is Doug Rawald. Chuck, I have

17 a question for you. He is talking about your

18 folks here, when it says contractors,

19 technicians and installers. Do you find folks

20 actually provide this? I mean do people do

21 this by and large?

22 MR. WHITE: Well, they do. Not
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1 always, but they do particularly if there are

2 incentive programs involved, rebates from

3 utilities or governmental units. Sometimes

4 you do it just to assure the customers that

5 indeed what you put in is what you put in. 

6 But if you are putting in base model

7 equipment, SEER 13 equipment, it is going to

8 revise SEER 13. 

9 Typically, if you are selling higher

10 level, you are going to give them the

11 certificate so they know if you told them it

12 is a 16, it is going to be a 16.

13 MR. RAWALD: Right. So, it is

14 really for people who are buying more

15 efficient equipment so they can know I am

16 really getting this better with all the bells

17 and whistles piece of equipment than the other

18 folks might be getting.

19 MR. WHITE: But again, it depends on

20 the contractor. Some people put together a

21 packet, a dossier of all the information

22 related to the installation. So, you give
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1 them the manual and all the paperwork and

2 everything in one package. Others, if you are

3 doing an apartment complex with a thousand

4 apartments, you are not going to give that to

5 anybody.

6 MR. RAWALD: Right. For folks who

7 aren't giving it out, do you think there is a

8 lack of knowledge, or they just don't have

9 time to download a certificate, or a lack of

10 interest, or a mixture of all of those things

11 possibly?

12 MR. WHITE: Probably a mixture.

13 MR. RAWALD: So, we could possibly

14 get more folks to do it if we educated them on 

15 the process?

16 MR. WHITE: I think there is a big

17 education component in really all the stuff we

18 are talking about to consumers particularly. 

19 Contractors as well but like a lot of things,

20 I said previously, contractors are

21 reactionary. So, if a consumer says I want

22 this, contractors are going to be in the habit
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1 of providing that and pretty soon it is just

2 going to be a normal occurrence. 

3 But if you meet with consumers and

4 you hand them a pile of paperwork and they say

5 well, that is nice and they drop it in the

6 circular file, you lose motivation.

7 MR. CLARK: This is Gary Clark from 

8 Goodman. I can say that in my experience, and

9 I have only been doing it for 30 years now, in

10 the olden days, AHRI used to print a directory 

11 twice a year and the common term for it was 

12 "The Bible." It is kind of the way people

13 think of it. It is kind of at that level.

14 And then from a communications

15 standpoint, we have webinar training two or

16 three times a year on how to use the directory

17 because we consider it to be so important that

18 contractors understand how to get these

19 certificates and ensure that the homeowner

20 understands what the efficiency of the product

21 is that they are ultimately buying.

22 So, we consider it very important to
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1 the point where we have ongoing training. You

2 know I could download the webinar right now

3 for you if you would like to see what we go

4 through because we consider it so important. 

5 And I am sure the other guys do the same kind

6 of thing.

7 MR. GIBBONS: John with Carrier. 

8 One of the other thing to add on to what Chuck

9 said is most of the national home builders

10 region by region require an AHRI certificate

11 per system.

12 MR. RAWALD: And who do they get

13 that from?

14 MR. GIBBONS: That get it from the

15 contractor who does the work for them, a

16 subcontractor usually.

17 MR. WINNINGHAM: This is Doug

18 Winningham from Allied. In many other areas

19 where a program gets pulled, this, in some

20 instances is required, or if there is a code

21 inspection, the inspector will look for the

22 certificate or ensure even at minimum
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1 efficiency that there is a valid rating on the

2 bottom. 

3 MR. RAWALD: And I would note that

4 Don Surrena, who is our code guy is nodding

5 his head in agreement with us.

6 MR. PORTER: Steve Porter, Johnstone

7 Supply. We get this for our number one

8 requested item. We kind of redo the

9 certification in an easier form for people to

10 understand and match up. That is what we get

11 requests on. I would say our number one

12 request is --

13 MR. RAWALD: From your customer, not

14 your contractors?

15 MR. PORTER: Not for the

16 contractors.

17 MR. RAWALD: And that was going to

18 be my follow-up question. Chuck, from your

19 point of view, would it be more useful for a

20 contractor or more well-used if they just got

21 it from distributors as a matter of course

22 certificate, rather than having to get it
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1 themselves?

2 MR. WHITE: This is Chuck White. I

3 don't know one way or the other. I suppose if

4 they hand it to you, what happens at the

5 wholesaler, if it happens at the transaction,

6 it is usually going to the technician or

7 possibly the delivery guy. And that may not

8 be in the right bin in the organization. And

9 I will say, at least in my geographic area, I

10 have never had a building inspector ask me for

11 any of this. And I have four different

12 jurisdictions that we have worked in over the

13 years.

14 MR. LATTANZI: This is Matt Lattanzi

15 at NORDYNE. And John and Steve may want to

16 elaborate on this further but I have seen a

17 lot of materials, more specifically, price

18 sheets to contractors from distribution. And

19 on the price sheet for specifically net

20 system, many of them reference the AHRI

21 certification reference number. So, you have

22 the reference number indoor and outdoor unit
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1 for that match. So, the contractor has that

2 number and can easily print a certificate.

3 MR. EISNER: Harvey?

4 MR. SACHS: This is Harvey. And on

5 the outside as an advocate looking in, but

6 noting the very large financial investment

7 that is made in this program and the self8 enforcement that comes from everyone's

9 interest from a level playing field, and we

10 have accorded great respect to the effort that

11 leads to this directory.

12 MR. EISNER: Okay, we have two

13 questions from John Stooks. He is online. 

14 The first one: Is the rating really

15 representative of field performance?

16 MR. SACHS: No.

17 MR. RAWALD: And that was Harvey, in

18 case anybody was wondering.

19 MR. EISNER: Okay, he's got a second

20 question. Is that the answer? Anybody else

21 want to speak on that?

22 MR. CHEN: I mean the rating is
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1 based on the performance testing that is

2 dictated by the standard and the actual method

3 of test. 

4 MR. CLARK: Well, another way of

5 thinking -- this is Gary Clark from Goodman. 

6 Another way of thinking about it is it is

7 absolutely correct, given the parameters of

8 the test. 

9 If your house happened to have the

10 exact same parameters as what we use in the

11 testing, then yes, in all likelihood, it would

12 be very, very, very similar. The fact of the

13 matter is is a house in Houston is going to

14 operate probably a little different than a

15 house in Chicago, different from a house in

16 California, a house in New York. And so when

17 you say a house, you know everybody's house is

18 different and that is why we have this test

19 standard that we test.

20 So the answer to the question is if

21 your house is operated at the same outdoor

22 temperature, the same indoor temperatures that
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1 we do in our testing then, yes, it would be

2 the exact same.

3 MR. RAWALD: This is Doug and I feel

4 comfortable giving a Department answer because

5 this is important to the Department. The

6 ratings are obtained pursuant to the DOE test

7 procedure, which is meant to represent in the

8 best way possible what the actual performance

9 of the product is going to be.

10 So, now there are constraints

11 because a laboratory test, as Gary has

12 described, but is the best method currently

13 for the Department to achieve a representative

14 rating of the performance. And I think that

15 is the answer.

16 MR. SACHS: Well, this Harvey. I

17 think I should amplify my blurt to say that

18 the test conditions are extremely unlikely to

19 be representative of installation in all but

20 the smallest fraction of houses. 

21 As a specific example, the very low

22 external static pressure assumes a ductwork
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1 system. Since the conditions were set a

2 quarter century ago, there has been an

3 enormous amount of field research and actual

4 conditions in houses that was not available

5 when this test was established. We have had

6 extensive discussions with industry in the

7 process of looking at standards. And I think

8 at this point we have all licked our wounds

9 and agreed that it probably gives reasonable

10 comparisons of relative efficiency but it is

11 highly unlikely in the context of the specific

12 question asked to be representative of

13 expected performance in the field and actual

14 houses.

15 MR. RAWALD: Okay. And so, I guess

16 once again, we are kind of going down a rabbit

17 hole that is outside of the scope this because

18 we are really not going to deal with testing 

19 at all, unfortunately, with this particular

20 negotiation. So, there are obvious concerns

21 people have but the Department's position is

22 the test procedure is how you get the ratings
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1 and that is what the test procedure is for,

2 with the caveats that everyone has their

3 concerns, as Harvey articulated them.

4 MR. EISNER: But he does have a

5 second question, I think is not outside the

6 scope. It may have been completely answer. 

7 How were test procedure air flows and static

8 pressure determined? Do they represent

9 typical field conditions?

10 MR. RAWALD: Right. So, I think the

11 best answer to that is to refer to the test

12 procedure as promulgated by the Department of

13 Energy for the answer to those questions. 

14 They are really not in the scope of what we

15 are doing here. We are just focused on how to

16 enforce regional standards and under the

17 certification directory of the AHRI, can

18 provide a tool for us in that enforcement

19 process.

20 MS. NOLL: This is Elizabeth, NRDC. 

21 I have a question about the appliance are AHRI

22 certified. And that is on the appliance
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1 sticker, label, whatever. What additional

2 value does the certificate provide? Is that

3 just an additional signal to the customer or

4 they one in the same?

5 MR. CLARK: I guess when I think

6 about it -- this is Gary from Goodman -- is

7 when you look at a split system air

8 conditioner for just like one basic model

9 group, you can literally have hundreds and

10 hundreds and hundreds of ratings. And so if

11 you are a consumer, which one is mine is very

12 difficult to find. 

13 So, when you get a certificate like

14 this, it specifies the one that you have in

15 your house. And so I think it provides some

16 clarity and some confidence that you are going

17 to get this performance.

18 MR. RAWALD: Right. This is Doug. 

19 It goes to the fact there is a combination of

20 two independent or possibly three parts and it

21 dictates how those perform together.

22 So, I think in a single package
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1 instance, it would be less valuable because a

2 single package is what it is labeled. So,

3 when we are talking about the split system, it

4 can be valuable and not show that these

5 performing parts together have this value.

6 MS. NOLL: It is your unit.

7 MR. RAWALD: Great. Eric?

8 MR. CHEN: The last thing I want to

9 mention about the different users of the

10 directory is that we do provide subscribers

11 with all this information. We have currently

12 38 subscribers, not including manufacturers

13 who also subscribe to the data. And what that

14 basically means is that every week we send

15 them a link directly to download all of the

16 current information on the directory.

17 And utilities, software developers,

18 nonprofits, they consist of users of these

19 subscribers.

20 Okay, so at this point, I would like

21 to kind of go into a live demo and maybe give

22 some examples. And if you guys want to see
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1 anything in particular, I would be happy to

2 show you that.

3 MR. GIBBONS: This is John from

4 Carrier. Before you do that, just on

5 Elizabeth's question there which I think we

6 already addressed, yesterday we looked at the

7 hang tags on the units. So, bear with me here

8 for a minute.

9 So, if you are a homeowner, you want

10 to know what your unit gets. You are not

11 going to find it out from the hang tag, the

12 way it is laid out, but you will from that

13 certificate.

14 MR. RAWALD: And for those on the

15 phone, this is Doug, John use of hang tags

16 means the FTC label that we discussed

17 yesterday.

18 MR. GIBBONS: With the split system

19 central air conditioner.

20 MR. CHEN: Yes, there is a note on

21 the directory that there is a disclaimer

22 saying because the label right now lists the
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1 rating of the HSVTC combination, but the

2 disclaimer on the website will say to find out

3 your particular system combinations rating,

4 you will need to refer to the certificate.

5 So, I will just walk through a

6 simple example. And again, if you guys want

7 to see anything specific, please let me know.

8 So, I will start with this is the

9 main page of the directory. And you can

10 scroll through the various product categories

11 that we have. In this case, I will look at

12 air conditioners and air conditioner coils.

13 So, here is the search screen. So

14 any user of the directory can go in here. If

15 you already know the AHRI reference number,

16 you can input that here and just go straight 

17 to that listing and print out the certificate. 

18 If you are trying to compare models, you can

19 search for a particular manufacturer's

20 products, type in some min and max values for

21 different rating metrics. There is various

22 categories and it is pretty robust in terms of
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1 letting you search for different kind of

2 listings.

3 MS. MEYERS: So, Eric, let me just

4 add. As Matt pointed out, lots of times price

5 sheets or whatever for certain combinations of

6 units will have a reference number on them

7 provided by the manufacturer. And that is

8 what you can put in that first box. You can

9 go and then just put in that reference number

10 and the certificates can automatically pop up

11 so you don't have to search. I think a lot of

12 OEMs use that and probably distributors, I

13 don't know, you could use that a lot.

14 So yes, we just give them what the

15 reference number is and then they can go and

16 pull it for the job.

17 MR. RAWALD: So, this is Doug. And

18 so just looking at the search page, what I

19 think is interesting is that an informed user

20 could enter into the minimum EER value they

21 have in the southwest or the minimum SEER

22 value in the southwest and the southeast and
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1 at least limit their returns to the legally

2 installable in their area.

3 What might be helpful would be if

4 there some sort of way for someone to hit a

5 button that says what would be legal in

6 Maryland.

7 MS. NOLL: Or it could be say zip

8 code sorted.

9 MR. RAWALD: Or something. And I'm

10 not asking AHRI, I am just thinking out loud

11 about different ideas for us to talk about in

12 a group.

13 MR. WINNINGHAM: This is Dave and

14 Eric can chime in. There has been discussions 

15 around that.

16 MR. RAWALD: Functionality.

17 MS. MEYERS: Once we know what 14

18 SEER means -- 

19 (Laughter.)

20 MS. MEYERS: -- to make changes to

21 the AHRI database. And until you give us that

22 answer --
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1 MR. PORTER: So, I haven't missed

2 anything.

3 MR. CHEN: No, no problem. Just as

4 kind of Dave mentioned, you know AHRI has

5 taken some initiative in thinking about ways

6 that this could address regional standards,

7 maybe adding a search criteria for region. I

8 will show you the search result. And I'm just

9 not sure to one extent just because it was the

10 first one I thought about.

11 But also don't forget to enter this

12 code here because sometimes people forget to

13 do that and then you can't get any results. 

14 Hopefully, people online can see

15 this and people here, I know it is a little

16 bit tiny but this kind of displays an overview

17 of each product's listings and the different 

18 purported metrics and features. And what I

19 was just going to say is we have discussed

20 internally possibly adding a column that would

21 say regions to be sold in or something on

22 that, which could list the different regions.
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1 But again here, I will just go

2 through the columns real quick. Many of them

3 are similar to a different theory, CCMS

4 submissions that we submit. But we have

5 obviously the AHRI certificate certified

6 reference number. That is one of the main

7 criteria. And again, as Karen mentioned, most

8 people just enter that in if they already know

9 it to print out the certificate.

10 The directory is again real-time so,

11 will show whether a unit is active or

12 discontinued or obsolete.

13 So, in this particular instance,

14 this Lennox example, they are a system

15 manufacturer, so they make split system units. 

16 And it goes over the trade name, brand name,

17 series names. Again, Lennox is listed as the

18 manufacturer. And what is important to note

19 here is that here is an example of split

20 system and it is really clearly laid out that

21 there is an outdoor column and then the model

22 there. So, that is the model number of the 
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1 outdoor unit. Then the next few columns is

2 for the indoor unit and it lists the indoor

3 model number there as well. So, this is the

4 system combination, the system match for that

5 reference number.

6 Going further down the line, we

7 recently added the air flow that was used to

8 determine that rating. Okay and then the next

9 couple items are the certified criteria that

10 AHRI certifies in this program. And as

11 mentioned earlier, for ACs, that is cooling

12 capacity, EER and SEER but we also IER for

13 water-cooled and evaporatively cooled

14 products.

15 MR. RAWALD: So, Eric, on those, you

16 guys are already collecting EER. Everyone has

17 that?

18 MR. CHEN: That is correct. It is a

19 certified metric at AHRI. We do certify EER

20 and again, that is a certified metric at AHRI. 

21 So, if a participant were to fail that metric,

22 they would still have to answer the same way
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1 they have answered any SEER failure or heating

2 and cooling capacity failure.

3 And then someone mentioned earlier

4 that was asking about three-phase products. 

5 So, we do have a column that lists the phase

6 for that particular match. So, both single

7 phase and three-phase are listed in our

8 directory.

9 Next we go into the AHRI types. And

10 the one that would be listed there would be

11 like split system type, coil only,

12 coil/blower, single package units, space

13 constrained units, those kinds of things would

14 be listed there.

15 What is important to note here is

16 that we also display what the HSVTC model is. 

17 So, in this particular instance, all these

18 listings are the Highest Sales Volume Tested

19 Combination.

20 The next column is hard to see but

21 it is listing if the model is exclusively for

22 export. So, these models here are not
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1 exclusively for export. And then we go into

2 cost estimates, whether it is eligible for tax

3 credits. And at the very end there, you can

4 double click on that icon to get the energy

5 guide label for that system combination.

6 So, let me first show you the AHRI

7 certificate and it is fairly simple to use. 

8 Again, just double click on any listing and

9 then it will pop up a window to download it. 

10 And here it is pulled up on the screen. A

11 user could print out their certificate or just

12 use it to get the reference number or anything

13 like that.

14 MR. RAWALD: If can ask, Steve, you

15 mentioned before you do a more user friendly

16 form of information. What do you folks do

17 differently with packaging this information?

18 MR. PORTER: Usually we set it up as

19 a match up with coils and units, make the

20 efficiency ratings so they can easily match up

21 the system as well as a reference number and

22 price sheets that customers request how they
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1 want that information displayed. So, it

2 varies per customer and per store group. But

3 pretty much usually there is a standard way

4 each distributor would want that material

5 presented to their customers.

6 MR. RAWALD: Would that be something 

7 you would be willing to share with the group,

8 an example of what that would look like?

9 MR. PORTER: Yes, I think so, a

10 typical one.

11 MR. ROCKY: This is Bryan Rocky. 

12 So, what Steve ends up doing is putting

13 together more of a price offering book. 

14 Because in this case, when they sell some of

15 our product or some of Gary's product, there

16 are literally 50,000 combinations and Steve

17 doesn't sell all those or his group doesn't

18 sell all those. So, they take the data from

19 the AHRI database in an Excel spreadsheet form

20 that they can manipulate to what they sell by

21 location to their customers and make it easier

22 to select a system, rather than having someone
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1 go through 200 of these certificates or

2 listings. We can build more usable. But it

3 is all the AHRI data reference back to the

4 certificate numbers, et cetera.

5 MR. RAWALD: Well, as I think about

6 this, I am always trying to think of ways of

7 minimizing duplicating. So, if there are

8 things that are already being done,

9 information is already being prepared and

10 passed on, is there a way to take advantage of

11 that.

12 So, it would be helpful if we could

13 see that information is being passed so we

14 could say okay, there is something here we can

15 use possibly in this regional enforcement

16 effort. 

17 MR. PORTER: This is Steve Porter. 

18 Each distributor is going to do that maybe a

19 little differently and they are going to

20 present a little differently. And it depends

21 on who their primary equipment supplier is and

22 how they even stock for preferences in their
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1 market, contractor preferences, whether the

2 coil, based on the height of the ceiling in

3 the basement or those match ups are not --

4 there is some regionality product types. And

5 so, accordingly, they will match that up

6 correctly and then put it in a tighter, as

7 Bryan was saying, that they don't have to go

8 through all the iterations of that particular

9 model.

10 MR. WINNINGHAM: They have covered

11 it. I was just going to point out for this

12 particular search, there are 60,349 matches. 

13 And that is why they condense it down to

14 something that is more presentable.

15 MR. SACHS: This is Harvey. 

16 Unstated but clearly important is the

17 distributor's effort to add value with the

18 pricing information in ways that are useful to

19 the contractor in, I assume, ways that lead

20 directly to the bid form for the customer's

21 sake.

22 MR. CHEN: So, again, as I was
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1 previously saying, internal discussions among

2 the members in our committee meetings, we have

3 considered perhaps even adding regions

4 eligible to be sold and then just listing all

5 the regions that this particular combination

6 would be sold. That would help.

7 MS. MARCHETTI: To the certificate.

8 MR. CHEN: Yes.

9 MS. MARCHETTI: Yes.

10 MR. ROCKY: Very quickly, could you

11 just scroll down to the bottom of that page

12 where you are at? Not the certificate, the

13 actual --

14 MR. CHEN: Oh, I'm sorry.

15 MR. ROCKY: -- the listings. There

16 you go. Just scroll down on that page to the

17 bottom. So you can see there at the very

18 bottom is where Dave was talking about, now

19 displaying records 1 through 20 of 60,348.

20 MR. RAWALD: Right. This is Doug. 

21 I can see how that number would belong both to

22 consumers and to installer contractors. So,
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1 I mean knowing you have 60,000 combinations to

2 weed through could be somewhat onerous.

3 MR. ROCKY: And the other thing,

4 again, with this particular listing you do

5 have some products now with the independent

6 coil manufacturers listed and you can identify

7 that by the fact there is a different

8 manufacturer name in the sixth column. And if

9 Eric can pull that in either the certificate

10 for one of those coil mix-matches, again, it

11 will pull up the rating provided by the ICM

12 with that outdoor unit, which is different

13 than what the OEM would have -- potentially

14 different.

15 MR. RAWALD: This is Doug. And so

16 on a certificate, what is displayed if it is

17 discontinued or obsolete?

18 MR. CHEN: It should say the status

19 of the unit but it does say it on the

20 directory main page, going back to here. On

21 one of the left-most columns.

22 You know one of the things about the
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1 vast number of results is that in this example

2 we only just searched for Lennox. We didn't

3 put any additional criteria in. So, it is

4 going to show basically all the models that

5 they certify with us.

6 Once you start putting in some

7 levels like SEER minimums and maximums, then

8 that will whittle down a little bit.

9 MR. RAWALD: This is Doug. And so a

10 follow-up question for Steve. When you folks

11 see something that says discontinued or

12 obsolete, do you handle it differently than

13 you would an active model? 

14 MR. PORTER: Do you see that it is

15 obsolete?

16 MR. RAWALD: If would be obsolete on 

17 the database. So, would you kind of update

18 for me, as far as information?

19 MR. PORTER: Yes, if something

20 becomes obsolete, pretty much you have got a

21 figure a way that you are going to have to

22 move it I mean because there is a new model
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1 following. And then those units become very

2 difficult to sell as-is.

3 MR. WHITE: This is Chuck White. It

4 may be obsolete but as long as it is

5 compliant, as long as it meets the required

6 SEER rating, it is certainly not -- there is

7 no problem with selling it. It just may be

8 last year's model. 

9 MR. PORTER: Well, I wish that were

10 true. I mean there is no problem with selling

11 it and doing those things but immediately, it

12 is last year's model.

13 MR. WHITE: Right. Correct, that is

14 true. I mean from a technical operations

15 point of view.

16 MR. PORTER: No. 

17 MR. WHITE: In your inventory chain

18 --

19 MR. PORTER: Yes, it just gets in

20 from the distributor's point of view, as I may

21 not, again, I may only sell the unit for that

22 particular contractor and he may go somewhere
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1 else to decode that. So, I am trying to

2 manage inventory to make sure I can move that

3 unit or have the match ups to move it. So,

4 there is kind of a balancing act and it makes

5 it a little more difficult to sell something. 

6 But that is what we live every day and every

7 year on every model change.

8 MR. MELCHI: This is Jon from HARDI. 

9 I think that maybe to answer your question, it

10 is my understanding if Steve is printing up a

11 certificate for his customer or one of the

12 stores, I don't believe you would put

13 discontinued or obsolete on that certificate.

14 Does that answer your question a

15 little?

16 MR. RAWALD: It is. And the reason

17 why this becomes significant in the regional 

18 context where it is not right now is the

19 Department says hey, manufacturer, you can't

20 sell this anymore if it is not compliant. But

21 that doesn't stop the distributor with stock

22 to sell it out of the warehouse because we
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1 have already been dealt -- been sold out. So,

2 we are stuck at the manufacturer level. We

3 are not stopping it at the distributor level. 

4 Whereas, in this case, we are stopping at the

5 installation level. So, suddenly, if we, upon

6 testing see a 14 product, find out that it is

7 actually functioning at SEER 12.8, so it is

8 not the federal standard or the regional

9 standard, the manufacturer can't make it

10 anymore but the installer can't install it for

11 the buyer in the region because it wouldn't be

12 compliant.

13 So, is there a righter to this

14 problem that exists in the regional context

15 that doesn't exist in the national standard

16 context? Does everyone follow on with what I

17 am saying? I'm just picking out what I am

18 concerned with this information but I think it

19 something for us to consider as a group how do

20 we make sure that gets taken care of?

21 MR. CLARK: Yes, I think in the

22 example -- this is Gary. In the example that
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1 you described where it fell below federal

2 minimum efficiency standards, there is a whole

3 different process that we get into from an

4 inventory standpoint, where it is not

5 saleable. I think maybe the bigger issue may

6 be if you have a unit rated at 14 SEER and it

7 tests out at 13.1 SEER. So, it is still legal

8 to be sold in part of the country but fails in

9 another part of the country.

10 MR. RAWALD: Well, at least then, it

11 would be stranded because hopefully, Steve

12 could trade it with somebody else and a

13 northern vender who might could dispense of it

14 in some way. Whereas, it if is --

15 MR. CLARK: We get it back, a

16 manufacturer.

17 MS. NOLL: This is Elizabeth. Does

18 the directory then reflect that re-rating? 

19 So, you would then hold different numbers.

20 MR. RAWALD: This is Doug. So, in

21 referring to Eric's screen, it defines

22 obsolete as something that has failed the
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1 program. Correct?

2 MR. CHEN: Let me clarify that. For

3 obsolete models those are models that got

4 tested and rerated below the federal minimums. 

5 So, it was kind of like marking that unit as

6 it is below the federal minimum. And it is

7 displayed for a certain period of time before

8 it is taken out of the directory in complete.

9 Johanna?

10 MS. HARIHARAH: So, I just have a

11 question. So, if you do get a model that

12 points to the 12.8 range, what does the

13 distributor or the manufacturer do at that

14 point?

15 MR. CLARK: The first thing that

16 happens is a bunch of lawyers get together. 

17 But I can only -- never having had the

18 situation, this would be speculation on my

19 part. But we would pull the inventory back

20 because it is, obviously, illegal to sell in

21 the United States. And at that point, we

22 would probably look at alternatives to try to
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1 sell the product in other parts of the world,

2 where if there aren't these type of efficiency

3 standards in place.

4 MS. HARIHARAH: Is that feasible? 

5 Do people sell them nationally?

6 MR. CLARK: Yes.

7 MR. WINNINGHAM: The other component

8 of that is there is the inventory but you

9 would first stop production. You would stop

10 production and then look at what inventory you

11 may have.

12 MR. ROCKY: So, Bryan Rocky from

13 JCI. So, there is a defined process. We have

14 to follow notification from -- when AHRI has

15 a failure there is a process we work through

16 with DOE. You have opportunity for multiple

17 samples. But once it is defined as

18 noncompliant, there is a very straightforward

19 letter that is sent from the Department that

20 outlines what we as manufacturers have to do

21 and that includes stopping production,

22 inventory concerns, notifying customers and
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1 going forward. So, obsolete, involuntary

2 ratings or failures are taken very seriously

3 by every manufacturer.

4 MR. PORTER: Steve Porter, HARDI. 

5 The strain on inventory for us is a big issue. 

6 Re-handling any equipment, we like to handle

7 it once. That is, ship to a spot, track then,

8 somebody picked up. Because the damage in re9 handling it a third time just continues to

10 escalate. Each time you touch that equipment,

11 you have more opportunity for a leaky coil,

12 problems with the equipment. It is damaged. 

13 Somebody doesn't want to buy it that way

14 because there is a dent in it. These things

15 are not built to be re-handled very much, very

16 often.

17 MR. RAWALD: Okay.

18 MR. GIBBONS: John from Carrier. I

19 have one other thing to add on to what Bryan

20 said. It is a very rare occurrence that all

21 this would happen because the process and

22 procedures are very tight. So, again, it is
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1 very rare.

2 MR. RAWALD: Right but, I mean from

3 the Department's point of view I do have to

4 acknowledge it does happen. We do have cases

5 they are publicly advertised. So, we do

6 investigate and enforce these things.

7 I just want to make sure we are

8 thinking about all the unique variables that

9 are in play. And we need more context that

10 are not in play with other national standards

11 because really want to show -- eventually the

12 surprising thing is that we dig deeper into

13 this and eventually we got everything figured

14 out.

15 So, Elizabeth, did you have a

16 question?

17 MR. CHEN: Okay, so what I did just

18 now was I pulled up a random energy guide

19 label for one of those Lennox listings. So,

20 here we see a label. And anyone can go and

21 access it and download it. Again, it lists

22 the manufacturer in the upper right corner,
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1 the model number, mainly the rating here.

2 I'll just run through a quick heat

3 pump example.

4 MR. RAWALD: That's not necessary

5 because that is not the scope of this regional

6 standard.

7 MR. CHEN: Okay.

8 MR. RAWALD: So, but if you can put

9 a single package, that would be helpful.

10 MR. CHEN: Okay, sure. I will do a

11 single package.

12 Here's a single package example,

13 very similar to the split system but instead

14 of the model number, the model number listed

15 in the indoor is just blank and it will just

16 only list the outdoor model. And again, you

17 can tell a single package because of the code

18 here, the AHRI tag here, single package.

19 It works the same way. You can

20 double click the listing, pull up the AHRI

21 certificate or you could download the energy

22 guide label.
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1 So, that's really my demo. If you

2 guys want to see anything additional, I would

3 be happy to show that to you.

4 But I just want to go over some more

5 statistics briefly with you guys. So, we have

6 about almost two million listings total across

7 all of the programs on the directory. But

8 with specific to unitary small equipment, it

9 is shown on the screen here. The numbers here

10 don't include -- I'm sorry. The numbers here

11 include system manufacturers, independent coil

12 manufacturers, OEM and PBM counterparts but it

13 doesn't include the exclusively for export or

14 three phase listings. But as you can see, it

15 takes the majority of our directory listings

16 as unitary small coil.

17 And here is just some statistics on

18 how many visitors we get to this site. And

19 each of the products, ACHP and then the VSM is

20 Variable Speed Mini-Split/Multi-Split. Each

21 of those pages are separate pairs on the

22 directory. So, this is showing you how many
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1 visitors are visiting each product type. And

2 this is just the number of visitors in the

3 last five months.

4 It also shows that people are

5 downloading the energy guide labels as well. 

6 We have had about 21,000 downloads of energy

7 guide labels within the past five months.

8 And again, I just want to reiterate

9 that EPA is relying on our directory and we do

10 have about 35,000 listings with ENERGY STAR

11 and just recently added in 2014 is 1300 models

12 and I am still getting requests every day to

13 add more listings for ENERGY STAR.

14 Any questions?

15 MR. RAWALD: This is Doug. I do

16 want to note, I note a number of wild cards in

17 the model numbers. So, for users who are at

18 home, they won't see that star star. They

19 will see a number or something else in that

20 place. There is actually more possible model

21 numbers than merely the one million

22 combination. There is actually many more
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1 because the wild cards are in that group of

2 models that have a similar number but that

3 number changed in certain instances.

4 MR. CHEN: That's correct. The wild

5 numbers -- actually I have a couple of backup

6 slides here on how to kind of walk through

7 that process because it can get kind of

8 confusing. But these wild card numbers really

9 don't reflect the performance of the unit. 

10 They just represent maybe, I don't know, a

11 color change or a paint color that could be

12 associated with that particular specific

13 number.

14 So, to reduce the number of

15 redundant listings on the directory, we have

16 created the wild card feature. But it does

17 make it a little bit difficult to search. And

18 you know, we do have training to help guide

19 people to go through that process.

20 MR. RAWALD: Right. This is Doug. 

21 And so what I want to know is for my own use

22 of the directory is that as the uninformed
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1 user typing in a model number, you may get no

2 results because there is no -- that model

3 number as entered wouldn't be actually

4 truncated in some way, that is what people

5 typically do and then search for one that

6 might contain your wild card. So, there is

7 that limitation to the consumer searching for

8 their exact model number as it is installed in

9 their house. They wouldn't necessarily find

10 it immediately. They would have to do a

11 little bit of thinking about a search for it.

12 MR. CHEN: That is correct. And one

13 of the things we always try to advise people

14 is that the less information is better. Maybe

15 just start with a few characters of the indoor

16 and the outdoor model and then see if we can

17 get any results. And you want to use the

18 export feature of the directory, too, which

19 can export listings. And that could help you

20 narrow down your search when you are trying to

21 identify the specific combination you are

22 looking for.
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1 MR. CLARK: This is Gary from

2 Goodman. And also, homeowners have issues. 

3 Once again, the contractors for the most part,

4 many of them have experienced training, as

5 Eric has talked about, that wherever they have

6 gotten it, can usually help the homeowner kind

7 of through the process if they questions or

8 they call us. It's not unusual.

9 MS. MEYERS: But Eric, if you have

10 the exact model number already, you can type

11 that in there, right?

12 MR. CHEN: If it is the exact model

13 number that is listed in the directory, yes.

14 MR. EISNER: Any other questions?

15 MR. WHITE: This is Chuck. Just a

16 comment on the screen of visits, there were

17 well over 400,000 visits and 20,000

18 certificates printed.

19 MS. MEYERS: That is energy guide

20 labels.

21 MR. WHITE: Energy guide labels,

22 five percent. Less than five percent.
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1 MS. MEYERS: Energy guide labels. 

2 Do you know how many certificates were

3 printed?

4 MR. CHEN: I don't have that

5 statistic in front of me but we can provide

6 that to you guys. But that is correct. Karen

7 is right. That was just for the energy guide

8 labels.

9 MR. LATTANZI: And that was only in

10 the last five months.

11 MS. MEYERS: And we just added it,

12 what -- what did we add the energy guide? 

13 Yes, I think in March -- May. May, that is

14 when it became, whenever we had to start

15 making that available.

16 MR. RAWALD: Neil, if I can jump in

17 here. So, I received at least one email from

18 someone on the phone, knowing that it is very

19 difficult to hear. I know the IT folks have

20 been working to get that fixed. So, for those

21 of you listening on the phone, we have been on

22 a cell phone, which is why it has been so
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1 terrible to listen. But Eric did a great job

2 presenting, in my opinion, so that has been

3 very helpful.

4 Maybe we can take a break now and

5 see if it is all working and then get back on.

6 MR. EISNER: All right. Do we have

7 any more questions? All right, thank you,

8 Eric for the great job.

9 Why don't we take a 15-minute break,

10 come back at 20 of 11:00.

11 (Whereupon, the above-entitled

12 matter went off the record at 10:24

13 a.m. and resumed at 10:40 a.m.)

14 MR. EISNER: We have one last

15 question we were talking to Eric about that we

16 want to talk about and then we are going to

17 get off to the Carrier presentation. And that

18 was about how many people, how many products

19 they have that they put on there online and

20 how many companies and numbers.

21 So, could you explain the program

22 and what we were talking about?
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1 MR. CHEN: Well, I don't have the

2 specific numbers but right now we have about

3 400 participants total in our directory. And

4 what is specific, I think to your questions,

5 you are asking me about the difference between

6 like participant and AHRI members and stuff. 

7 Let me just go into a little bit of detail

8 there.

9 So, there is like two sides of AHRI.

10 There is AHRI membership and there is AHRI

11 certification participants. And AHRI

12 membership, those members would be involved

13 with the different committees that are being

14 run through AHRI. For example, these

15 committees would work on updating the

16 standards or writing new standards and

17 updating the program rules.

18 And then we have separately AHRI

19 certification participants who are the ones

20 that you see listed on our AHRI directory. 

21 And again, you don't have to be a member to be

22 a participant. You don't have to be a
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1 participant to be a member. You can be one or

2 the other or both. Most of the manufacturers

3 here in this room I think are both members of

4 AHRI and certification participants. But that

5 is not always going to be the case.

6 And everything that is listed on our

7 directory is pretty much everything that is

8 sold in the -- there is about 99 percent of

9 all the -- for unitary equipment, all the

10 unitary equipment that is being sold in the

11 U.S. For that other one percent,

12 manufacturers --

13 COURT REPORTER: I'm sorry, Mr.

14 Chen. Can you pause? I'm not picking you up.

15 MR. CHEN: I'm sorry.

16 COURT REPORTER: Thank you.

17 MR. CHEN: Again, our directory with

18 regards to unitary equipment, it pretty much

19 houses 99 percent of all the equipment that is

20 being sold in the U.S. And then for that one

21 percent, there is many factories who are not

22 AHRI participants would have to go through
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1 maybe DOE certification. They would have to

2 certify their models directly with DOE to sell

3 those products.

4 MR. EISNER: Okay, any questions on

5 that issue from anyone? As I understand it,

6 there is the issue of being able to get

7 representation of the information concerning

8 that one percent or whatever it might be, how

9 to do that in an effective way, rather than in

10 two different programs.

11 Okay, if there are no questions,

12 thank you, Eric.

13 MS. MEYERS: Nice job, Eric. 

14 Thanks, Eric.

15 (Applause.)

16 MR. CHEN: Thank you.

17 MR. EISNER: Okay, we are now ready

18 to go into the presentation from Carrier.

19 MR. NELSON: Where is the best place

20 for me to stand?

21 COURT REPORTER: Right where Eric

22 was standing.
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1 MR. NELSON: All right. That wasn't

2 random.

3 All right, first my name is Chris

4 Nelson. I am the President of the heating and

5 air conditioning business through United

6 Technologies in North America, of which

7 Carrier is one.

8 Before I started, I wanted to

9 provide a little bit of background and context

10 as to why I am here and what the comments are

11 regarding. And that is, is we, being Carrier

12 working with AHRI, we are having conversations

13 with the DOE, AHRI specifically, about the

14 necessity to keep the process moving along

15 rapidly with a sense of urgency to get

16 resolution on guidance as well as rulemaking. 

17 They offered the opportunity for all

18 manufacturers to come in and give comments on

19 the draft guidance and points that they

20 thought would require some form of

21 clarification for help. And they recommended

22 that given that this process was active right
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1 now, that the manufacturers do so as a part of

2 this committee. That is why I am here. That

3 is what I am setting out to do. And

4 hopefully, it will be brief and to the point.

5 So with that, first I would like to

6 thank everybody for allowing me this time and,

7 specifically, the DOE for having moved so

8 rapidly to provide the draft guidance that was

9 released I believe on August 20th.

10 As I noted earlier, the sense of

11 urgency is high, that we have some level of

12 clarification and guidance that allows to go

13 into next season with a very legitimate and

14 strong and clear set of rules, regulations,

15 and guideposts that allow us to enact the

16 regional standards.

17 We were a part or I was a part of a

18 similar group that sat down nearly eight

19 years' ago when we started this whole thing

20 with regional standards, not the same group,

21 and probably lacking a few key members as has

22 been pointed out. I think we can rectify it
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1 with this group coming together.

2 Our goal at that point was to put

3 forth standards in higher efficiency that

4 would allow us to achieve real energy savings

5 for consumers in a timely manner. That was

6 kind of the motivation behind everything that

7 we sat down to do. We arrived through hours

8 of conversation at a regional standard

9 proposal that was accepted and we knew at that

10 time, beyond a shadow of a doubt that all of

11 the issues and the complexity would come in

12 compliance. It was known then, it is known

13 now, and the time is now and it is upon us. 

14 And it is actually to the point where we are

15 kind of up against a little bit of a deadline

16 to make sure that we have the guidelines on

17 the compliance and the enforcement set out.

18 So, I just want to say it is our

19 view that the guidance that was issued on

20 August 20th by the DOE goes a long, long way

21 to providing a roadmap for proper compliance

22 and enforcement of this rule. I think that it
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1 sets a path in motion that can be expounded

2 upon by this group for a rulemaking but the

3 issues that are clarified are vital. And I

4 would like to make sure that I highlight those

5 and thank the DOE for doing so. One is the

6 fact that we clarified that the single speed

7 condensing unit need to be rated with coil

8 only is key; clarified that the national

9 testing protocol is how the efficiency will be

10 measured for both regional and national

11 efficiency standards, per existing regulations

12 is key. Weighing the roadmap to indicate that

13 HSVTC or the Highest Sales Volume Tested

14 Combination will be determined on a regional

15 basis is key. I will come back to that in a

16 moment.

17 And then finally, clarifying the

18 rules or the guidance on individual condensing

19 units or coils that are installed as part of

20 a replacement job and how those should be

21 treated also very key. And it is our belief

22 as a side note that this portion of the
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1 guidance has the potential to help once and

2 for all clarify and put a roadmap in for

3 universal understanding of compliance and

4 enforcement of the ongoing dry R-22 issue.

5 So, wonderful job. The timeliness

6 it got out was, I haven't seen anything like

7 it before. And now I think we are at a

8 crossroads that says we need to make sure and

9 clarify a few key things, which I will go

10 through, and we would then urge the DOE to

11 move towards, after they get the comments, the

12 clarification, put out and finalize this

13 guidance within as reasonable a time frame as

14 possible, hopefully by the end of September. 

15 The reason being is that no matter what comes

16 out of this group, it is our opinion that with

17 a proposed rule, the time that it will go to

18 a final rule, there is going to be some gap

19 in-between. And finalized guidance by the

20 Department of Energy would certainly serve as

21 a very, very strong, valid, enforceable

22 mechanism, to make sure that the transition
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1 goes smoothly and in accordance with what we

2 talked about eight years ago that we delivered

3 the energy savings that we said we were going

4 to deliver, when we said we were going to

5 deliver it. So, we think that is very

6 important.

7 Now, specifically on the things that

8 we would like to see clarification on,

9 explicit guidance that the HSVTC is to be

10 determined on a regional basis. It is alluded

11 to. It is kind of understood a little bit in

12 the conversation but I think in order to make

13 it really black and white, we have to

14 explicitly say that not only with the national

15 test protocol be what determines efficiency on

16 a regional basis but the HSVTC is determined

17 on a regional basis as well and has to be

18 tested that way by manufacturers.

19 Secondly, explicit mention that the

20 replacement guidance issues applies to both

21 charged and uncharged units. And to really

22 just put it on the table, say that it applies
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1 to the dry R-22 issue, get it out there, make

2 it something that is easily understandable,

3 readable, and I think then we have come a long

4 way to closing that. Because basically, as we

5 read it, it says it has to meet minimum

6 efficiencies. It has to be still subject to

7 the HSVTC type conversation. And regardless

8 of whether it is matched, what it is matched

9 with in the field, it has to be able to get a

10 coil only range that meets that minimum

11 efficiency.

12 We think that is vital and it has

13 been an ongoing issue we have been wrestling

14 with. And I commend the DOE on coming up with

15 that solution.

16 The last thing I will wrap up, I

17 would just once again reiterate the need to

18 quickly close the guidance in order to take in

19 the request for clarification of the comments,

20 get it finalized and published potentially

21 and, hopefully, by the end of September. I

22 would then, I guess, recommend or petition
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1 this group sitting here to closely look at

2 that guidance as a roadmap towards how we

3 should be thinking about compliance and

4 enforcement and the rules that we have put in

5 place that then will become the actual

6 rulemaking. I think there has been a very

7 nice roadmap set forth.

8 And we are essentially out of time. 

9 That is really where we are right now. We are

10 all making decisions and we are talking about,

11 and I think the comment was very astute that

12 says we can do a lot of things to make this a

13 much more useable database or a more

14 understandable implementation, once we decide

15 what we are trying to implement. And that is

16 of the most paramount importance for everybody

17 that we can change the directory to be a lot

18 more user friendly, once we know, as Karen

19 pointed out, what 14 SEER is. I think we are

20 very close to it, based on the draft guidance

21 that was published. And I just, I wanted to

22 make those comments, thank the DOE for the
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1 steps we have taken so far, encourage the

2 closure to be quick and that this group then

3 takes this as the roadmap to go forth and

4 implement so that we can all get on with life

5 and serve our consumers very well in the

6 future.

7 So, that is all I had. I don't know

8 what the form is. I don't know if we want

9 question and answer. I don't really

10 necessarily want to.

11 MR. RAWALD: This is Doug from DOE. 

12 I need to make something very clear. The

13 guidance does not intimate nor have we

14 expounded upon the idea that the Highest Sales

15 Volume Tested Combination would be regionally

16 based. The Highest Sales Volume Tested

17 Combination is a factor of the sampling plan,

18 in combination with the test procedure, to

19 arrive at a rating based upon testing, which

20 then can be used with an ARM, if you don't

21 want to do further testing.

22 But we have not said and I will go
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1 back and ask the question for you guys, as

2 asked, but we have not said so far anything

3 regarding making the Highest Sales Volume

4 Tested Combination a regionally-based

5 criteria. That would, in fact, seemingly to

6 me sitting here right now, be a suggestion

7 that we expand the testing burden by requiring

8 testing based upon region; whereas, we don't

9 currently do that because you would be varying

10 what the Highest Sales Volume Tested

11 Combination is, which is the bedrock for then

12 using your ARM, as I understand it from the

13 manufacturers. Is that correct, that everyone

14 has to test the Highest Sales Volume Tested

15 Combination?

16 Karen, you are shaking your head no.

17 MR. CLARK: This is Gary from

18 Goodman. What you said about the Highest

19 Sales Volume Tested Combination being the one

20 we test, that is correct. But what you said

21 prior to that I think is what Karen is shaking

22 her head about and I think there is a couple
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1 of us that are probably a little confused

2 because the guidance seems to be kind of

3 different from what you have just said.

4 MR. RAWALD: Okay, so tell me how it

5 is different because I definitely want to make

6 sure we get this clear.

7 MR. CLARK: Can we put it up on the

8 screen maybe and kind of work through that,

9 rather than work off of our poor memories?

10 MR. RAWALD: Right. And I gave my

11 copy to Karen yesterday, which makes me --

12 MS. MEYERS: Oh, I have it. I'm

13 sorry. I did mean to give it back.

14 MR. MELCHI: She already marked

15 suggested changes for you.

16 MS. MEYERS: Yes, I just about have

17 it all fixed. 

18 (Simultaneous speaking.)

19 MR. EISNER: We have to stop having

20 side panel discussions for the court reporter,

21 please.

22 Did you have something you wanted
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1 to say while you are putting it up on the

2 screen?

3 MR. RAWALD: Dave.

4 MR. WINNINGHAM: This is Dave with

5 Allied Air.

6 Doug, I think, and Karen is probably

7 going to bring it up, the crux of the issue,

8 you know HSVTC is a component of it but it is

9 the definition of the basic model. And I

10 don't know that that is something that we are

11 going to be able tackle within this in the

12 time frame needed. But it is two very

13 different scenarios with different

14 ramifications. Because under the DOE

15 guidance, as I see it, anytime we change an

16 efficiency metric, it is a different basic

17 model. And that would force an extreme amount

18 of additional testing that the industry, I

19 don't think, could support, even if it wanted

20 to.

21 MR. RAWALD: And this is Doug. I do

22 want to provide some clarity here, if I can,
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1 without muddying the waters. If I do, then

2 that is a problem and Karen will tell me, I am

3 certain.

4 So, the issue is a basic model has

5 one rating. So, everything within a basic

6 model, all the models within that must have

7 that rating. So, an individual model can be

8 grouped with individual models as part of the

9 basic model and they perform better than other

10 individual models but they can only be rated

11 at that value of that basic model. That is

12 the premise.

13 Now, if you want to take advantage

14 of having a higher rating for that individual

15 model, then it has to be a different basic

16 model because basic models, by virtue of what

17 they are defined as, share a rating.

18 MR. CLARK: This is Gary Clark. 

19 That is a much different interpretation than

20 what has been used for the past, since 1982 or

21 1983 when this process was started.

22 MR. RAWALD: Okay. That is what the
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1 guidance says, though. You understand that. 

2 The guidance makes that clear, that their

3 rating for basic model, when it gives the

4 examples of rating, A1, B1, A2, B2, A3, B3,

5 they are discussing how if you are going to

6 make them all the same basic model, they have

7 to have the same rated performance value.

8 So, and Gary told me it is

9 different. So, tell me how it is different.

10 MR. CLARK: Well, I'll just kind of

11 reflect on like the FTC tag that we discussed

12 yesterday. And one of the things as a

13 discussion between industry and the Federal

14 Trade Commission was we wanted to show a range

15 of performance, which ultimately the FTC has

16 made those changes to them. Based on your

17 definition of a basic model group, you would

18 never have that range. It would always be one

19 efficiency level for a given product.

20 And so, I guess it is confusing to

21 me, maybe others have a better idea, but the

22 Department participated in all those
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1 discussions with the Federal Trade Commission,

2 as did industry participants and we came to

3 that conclusion that that was a good idea. 

4 And so, if basic model groups were going to be

5 defined the way you have described it, we

6 would have never had those discussions with

7 the FTC because if we had the Highest Sales

8 Volume Tested Combination at 14 SEER, that is

9 the only rating that would be shown on that

10 tag.

11 MR. RAWALD: I guess what I want to

12 push back on is the label is on the condensing

13 unit. The condensing unit can be paired with

14 many different coils and many different

15 blowers, as Karen reminds me every time I

16 mention it, to have a different rated

17 performance value of that combination. And

18 that combination is what DOE would deem to be

19 the basic model. And so, the condensing unit,

20 which has the hang tag of the range, can

21 perform a variety of performance values,

22 depending on what basic model is part of. So,
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1 the condensing unit itself is not a basic

2 model. The condensing unit with the coil and

3 the blower is the basic model that performs

4 the rated value. So, the condensing unit

5 alone falls anywhere from 13 to 14.2 as the

6 FTC label shows, depending on what is paired

7 with it.

8 But there shouldn't be or can't be a

9 different label for potentially the same model

10 number.

11 MR. CLARK: Okay. So, once again, I

12 apologize for being confused. So, in the --

13 MR. RAWALD: You shouldn't. I

14 apologize if I am confusing because you have

15 been here longer than I have.

16 MR. CLARK: In the example that we

17 were looking at yesterday, where it listed a

18 product from 13.0 to 14.2, let's say that the

19 HSVTC model was at 13 SEER, just presumptively

20 in that situation. The question that I would

21 have is at 14.2, let's say that there is a

22 rating in the directory, at 14.2, could you
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1 use an ARM to get that 14.2 or would you have

2 to use a test to get -- to justify the 14.2?

3 MR. RAWALD: Right. My

4 understanding of the regulations is that you

5 only have to test to get the highest sales

6 volume tested combination and then you use the

7 ARM to achieve the other rating, as long as

8 you are in the group by DOE, to get all the

9 other ratings.

10 MR. CLARK: Okay.

11 MR. RAWALD: And that is what I

12 heard from Dave yesterday was, most people

13 doing a blower at all ratings are doing it

14 based upon the ARM not upon the highest

15 tested. Is that correct, Dave?

16 MR. WINNINGHAM: Yes, this is Dave

17 from Allied.

18 And forgive me, Doug, but I am

19 hearing you say is -- because we base the

20 Highest Sales Volume Tested model, that is our

21 tested model and that is the basis for our

22 basic model grouping. And then ARMs are used 
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1 to generate everything from that and different

2 ratings will be developed associated. But

3 they are all associated to that basic model

4 outward.

5 But what you are saying is that

6 anytime you change the rating, it is a

7 different basic model. But you are not saying

8 that all basic models have to be based on test

9 data, they can be based upon ARMs.

10 MR. RAWALD: Right. So, this is a

11 place where the regulations on the air

12 condition is unique. Because the wording on

13 the sampling plan -- and maybe we should pull

14 out the CFR. I prefer to be careful with

15 language rather than spit balling. So, if

16 possible, can you pull up, Emily, 10 CFR

17 429.16?

18 MS. MARCHETTI: Yes.

19 MR. RAWALD: There is a reason why

20 Tim Ballo is so useful.

21 MR. BALLO: Well, the rest of us

22 can't read the fine print.
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1 MR. RAWALD: And we are getting

2 dangerously close to where I may be speaking

3 outside my lane. So, I want to make sure that

4 I am giving you the best viewpoint but if we

5 need to, when I actually come back next week,

6 or come back in and talk about this, that we

7 can do that. I just want to make sure that we

8 are clear on what the guidance said and didn't

9 say. And it sounds like not everyone

10 understood that. And I want to make sure we

11 are all clear.

12 MR. BALLO: I think you're right

13 because in contrast to most CFR sections for

14 products, they don't talk about the sampling

15 plan for a basic model. It talks about just

16 a sampling plan for the condensing unit, for

17 the air conditioning unit.

18 MR. RAWALD: Right. So, what we are

19 bringing up here is 10 CFR 429.16.

20 MR. EISNER: Can you enlarge the

21 type at all?

22 MR. RAWALD: I want to read out
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1 here. At the very bottom, (c)(ii).

2 So, there is an express

3 acknowledgment here that something different

4 is going on. Right? So, what we said is, for

5 multi split-systems, each model of condensing

6 unit shall be tested with -- sorry.

7 MS. MEYERS: They are not multi

8 splits.

9 MR. RAWALD: Yes, right. That won't

10 be there. You are exactly right.

11 (Simultaneous speaking.)

12 MR. RAWALD: For split-system air

13 conditioners and heat pumps, the condenser14 evaporator coil combination for the tests of

15 this section shall include the evaporator coil

16 that is likely to have the largest volume of

17 retail sales with a particular model of

18 condensing unit.

19 So, that is not the word basic model

20 there. Right? There is a reason for that. 

21 There has to be a reason. So, as I understood

22 the regulations, we understand there is one
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1 model condensing unit that can operate with

2 many different coils. And as I explained, as

3 I understood it, so if you arrive at different

4 basic models because you are going to have all

5 the different combinations that you want to

6 rate differently.

7 But the model of the condensing unit

8 must be tested, the model, not the basic

9 model, but the condensing model itself must be

10 tested at the Highest Sales Volume Tested

11 Combination of the coil, as we see here.

12 So, you arrive at it the high

13 testing. And your other basic models can be

14 rated based upon the use of an ARM but they

15 are different basic models, as the Department

16 of Energy would define them.

17 MR. CLARK: That's fine. Yes,

18 understood.

19 MR. RAWALD: Okay, does that make

20 sense?

21 MR. CLARK: Understood.

22 MR. RAWALD: Am I adding clarity or
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1 am I adding mud?

2 MR. CLARK: No, it's fine.

3 MR. RAWALD: Well, it's fine but am

4 I making things clear or am I making things

5 going into a lack of clarity?

6 MS. MEYERS: So, this is Karen. I

7 think we understand what you are saying but I

8 also think that our interpretation of the

9 guidance is correct, based upon what you just

10 said.

11 So, I don't understand why you are

12 disagreeing that, with that explanation, that

13 each region's Highest Sales Volume Tested

14 Combination -- that you have to have regional

15 Highest Sales Volume Tested Combinations. 

16 Because you have to meet the minimum in that

17 region with your Highest Sales Volume Tested

18 Combination. Just leave basic model out. I

19 think that just confuses it all together.

20 MR. RAWALD: Okay.

21 MS. MEYERS: That is what the

22 guidance says. What I am having trouble
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1 understanding is why you don't think it says

2 that.

3 MR. CLARK: Why don't we go back to

4 that?

5 MR. LATTANZI: Go back to the

6 guidance and look at the very -- this is Matt

7 Lattanzi. Look at the very first sentence in

8 the last paragraph.

9 The last paragraph of the guidance. 

10 Continue to scroll down, please.

11 MR. RAWALD: So, starting on page

12 three, Matt?

13 MR. LATTANZI: Yes, it is the bottom

14 of page three, that very first sentence.

15 MR. RAWALD: Right, any new

16 condensing unit or coil must meet the current

17 federal standards for national or region and 

18 pair with the appropriate part to make a

19 system when tested in accordance with the DOE

20 test procedure and sampling plan.

21 Okay. So, in this context, to be

22 clear, we are not talking about systems here. 
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1 This it the replacement issue. This is the

2 issue of hey, I have something I want to sell

3 into the region. I want to be using an

4 existing system that already is out there. 

5 What does it have to be? And we are saying

6 hey, that particular piece of the puzzle, as

7 it currently says, which we talked about

8 yesterday, it says currently condensing unit

9 or coil, that piece of the puzzle has to be a

10 certified combination somehow someway that is

11 at least 14 to be in a region where it is 14.

12 Now, it sounds like folks are

13 focusing on the word tested here to get to the

14 Highest Sales Volume Tested Combination. Is

15 that right? Because of the word tested there,

16 versus being a rated?

17 So, when applied, it couldn't be

18 done in accordance with an ARM. Is that what

19 -- if it said rated, then that would imply

20 that it could be used for testing or for

21 rating? I am trying to understand where the

22 idea this relates to Highest Sales Volume
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1 Tested Combination. So, is that where?

2 MR. CLARK: Yes.

3 MR. RAWALD: Okay. So, I will go

4 back and deliver because I don't have an

5 answer for you but I want to get technically

6 answered questions. I want to make sure I

7 understand where the source of my different

8 reading from your folks' reading.

9 I don't view the guidance as

10 requiring different tests for models going to

11 the southeast and the southwest and the north. 

12 The guidance cannot, by implication, add more

13 testing burden. We can't do that through

14 guidance.

15 And so if that is what you folks are

16 viewing this as, I will have to go back and

17 talk to them because that is not guidance.

18 MR. CLARK: Yes, I think that --

19 this is Gary is from Goodman again. It is not

20 necessarily the Highest Sales Volume

21 Combination but what it implies, and just

22 looking for clarification here, is that it
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1 says in accordance with the test procedures

2 and sampling plans, which will tell you that

3 it has to be a coil-only rating.

4 And so maybe in our simplistic way

5 of thinking about it, because we task,

6 typically, the Highest Sales Volume Tested

7 Combination, that is the one we --

8 MS. MEYERS: Because you other

9 guidance said that we had to.

10 MR. CLARK: Yes.

11 MS. MEYERS: So, when you read those

12 together. You have to kind of read those two

13 documents together. Because the other

14 document says it has to be the highest, that

15 is what you have to test.

16 MR. RAWALD: The CFR says that. 

17 Right?

18 MS. MEYERS: Yes.

19 MR. RAWALD: The regulation says

20 that as a baseline for testing all

21 manufacturers must test the Highest Sales

22 Volume Tested Combination and then you use ARM
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1 for anything else.

2 But if you are not using the ARM,

3 you have to test everything. So, let's make

4 that clear. So, those two things that work on

5 concert always.

6 MS. MEYERS: So, how could it not be

7 a regional rated -- I mean when you look at

8 how it is actually done, what those two

9 documents say, you would have to have a

10 highest sales volume coil-only rating at 14

11 SEER to sell a product in the south. Because

12 that is what the CFR says. It has to be based

13 upon a coil-only rating and that coil-only

14 rating has to be a minimum of 14.

15 You almost have to look at this

16 backwards. I mean 14 should be your base. 

17 That should be your national standard but 13

18 is the exception. Right? Because anything

19 you test in the south can also be in rate and

20 certified in the south can also be sold in the

21 north. 

22 So, this really applies more to 13
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1 SEER coil-only rated units.

2 MR. RAWALD: Okay.

3 MS. MEYERS: So, I don't know.

4 MR. CLARK: That's a great way to

5 look at it.

6 MR. RAWALD: Yes, and now I

7 understand the question. I understand where

8 the confusion and where I may be entirely

9 wrong. But as I have been told and I have

10 discussed this issue so far, we have not been

11 meaning to, as far as I know, state that there

12 is a Highest Sales Volume Tested Combination

13 program meeting. But I will take that as one

14 that seems to think that that doesn't make

15 sense. And I will come back with you with an

16 informed answer or possibly someone who is

17 more technically oriented who can answer the

18 questions better than I can.

19 Yes?

20 MR. CLARK: This is Gary again. 

21 There seems to be a concern about testing

22 burden.
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1 MR. RAWALD: And just to point out,

2 I think the Department -- now I am speaking as

3 a person sitting here before you now, I'm

4 saying it seems to me that you are asking to

5 add a testing burden because Highest Sales

6 Volume Tested Combination is a testing issue. 

7 It is a testing issue. You have to test that

8 one thing, at least.

9 MR. CLARK: It is no more testing

10 than what we do today.

11 MR. RAWALD: Okay.

12 MR. CLARK: For a given condensing

13 unit, we are going to do a test to certify the

14 value. It just happens that this one will be

15 the 14 SEER test. So, it is no more burden to

16 us. I think we all agree on that, that is no

17 ore burden than what we do today.

18 MR. RAWALD: What would be the

19 advantage to manufacturers of having variable

20 Highest Sales Volume Tested Combinations by

21 region?

22 MR. CLARK: I'm not saying that is
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1 by region. Today --

2 MR. RAWALD: That is what I heard

3 earlier that it was a regional Highest Sales

4 Volume Tested Combination.

5 MR. NELSON: I think, Gary, you are

6 saying it is not that way today.

7 MR. CLARK: Well, what I would say

8 today is that it is not unusual as a

9 manufacturer, let's say that we would have a

10 line of equipment at 13 SEER and let's just

11 hypothetically say 14 SEER, 15 SEER, 16 SEER. 

12 At each one of those efficiency levels,

13 regardless of the minimum efficiency

14 requirements, but just today, when we have a

15 13 SEER minimum, we will have a Highest Sales

16 Volume Tested Combination for each one of

17 those product lines.

18 And so it just so happens that we

19 are going to insert this national or southern

20 standard at 14 SEER. Well, in the example

21 that I used, we would have tested those 14

22 SEER units anyway because that is what we do
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1 today. So, it is no change in what we would

2 do.

3 MR. NELSON: Even if it is not

4 required at that level, currently, it has to

5 --

6 COURT REPORTER: I'm sorry, sir. 

7 Can you repeat that?

8 MR. CLARK: Yes, for a single stage

9 air conditioner, you are.

10 MR. RAWALD: Just stop. Before

11 Chris jumps into the conversation, if you can

12 come to the mike.

13 MR. EISNER: She's not getting your

14 question.

15 While we have a second, Craig

16 Messmer has a question. Craig, are you still

17 on line?

18 MR. MESSMER: Yes, I'm here. Can

19 you hear me?

20 MR. EISNER: Yes, we can.

21 MR. MESSMER: Okay, we have a lot of

22 question on system manufacturers who make this
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1 model but it only seems to get lost in there

2 that there are a number of companies that

3 produce coil-only and match up to someone

4 else's outdoor unit. And could you tell us

5 how that fits in to this discussion on basic

6 models? Because all of our ratings are based

7 on an ARM and we use the data for the Highest

8 Sales Volume Tested Combination of each

9 outdoor unit. 

10 If we start having basic models now

11 with the same outdoor units but different

12 models, basic models at different efficiency

13 levels, that is really going to be confusing

14 for us.

15 MR. WINNINGHAM: This is Dave at

16 Allied. And Gary and Karen, please chime in

17 here. But I think from the discussion

18 previously, the AHRI definition of a basic

19 model is different than the DOE definition of

20 the basic model.

21 And I don't know that we have to

22 bring those two together. Because from your
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1 explanation, Doug, from using the Highest

2 Sales Volume model as the base, that is, in

3 effect, what AHRI calls a basic model. You

4 are kind of getting the same outcome.

5 I think where we have been a little

6 hung up is trying to merge those two

7 definitions and maybe unnecessarily.

8 MR. CLARK: Yes, I think maybe in my

9 simplistic way of thinking about it -- this is

10 Gary from Goodman again -- is that as a

11 company, what we would like to be able to do

12 is very quickly and easily communicate what is

13 okay to be sold in the south. And so, if you

14 can talk to a contractor or distributor and

15 say if the Highest Sales Volume Tested

16 Combination rating that is in the AHRI

17 directory, which once again we have spent

18 years and years training people to use the

19 directory and we denote this stuff in all of

20 our literature, as I am sure many of the

21 competitors do, that if we can just point to

22 that rating, if it is at or above 14 SEER, it
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1 simplifies a lot of the conversation.

2 MR. RAWALD: Right and this goes

3 right back to Karen's question, which has been

4 repeated now several times is that we need to

5 know from the Department the opinion on what

6 is 14 SEER.

7 MS. MEYERS: And quite frankly, we

8 thought the guidance was giving us that answer

9 until yesterday, when you said it was not. 

10 So, you kind of -- you know.

11 MR. RAWALD: What I will say and

12 this is only because it is government

13 rulemaking in all its form, so we have to be

14 at least a little patient, the question that

15 I don't -- I want to make sure that everyone

16 understands that we have not definitively

17 spoken on at this point is if a condensing

18 unit can perform both above and below the

19 regional standard, depending on what coil or

20 blower it is matched with, we have not stated

21 whether or not it can be sold in the region.

22 Assuming that it is being sold and
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1 installed with that coil and blower, they

2 could perform above that level. Because I

3 think that we all agree that it couldn't be

4 sold if it was below the level with the coils

5 being installed with. We all agree with that

6 premise.

7 The question really is, if I have a

8 condensing unit that performs at 13.2, 13.6,

9 and 14.2, and I am throwing out numbers, and

10 I have it matched up with a coil that does

11 14.2, can it be installed, when we know that

12 condensing unit can also perform below that 14

13 level with a different coil.

14 That is the question that Karen has

15 been driving at, the question that we have not

16 spoken on and the question which I am

17 demanding that we give you clear guidance on. 

18 I think it is very important.

19 So, that seems to wrap back around

20 to the question that Gary has intimated and it

21 seems to me to be a very central one.

22 MR. EISNER: Chris?
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1 MR. NELSON: Chris again. The

2 question, Doug, you asked, what is the

3 advantage and I just wanted to make sure I

4 jumped on it. 

5 Gary stated it. It is simple. It

6 is easy to communicate. It is a common set of

7 rules and it is something that everyone will

8 understand, abide by, test to, and design

9 around, period.

10 Going back to the very beginning and

11 saying what do we want to do? Do we want to

12 deliver what we said we were going to deliver

13 when we said we were going to deliver it? 

14 This would do that because it is a common

15 language that manufacturers, contractors,

16 distributors speak and then what means very,

17 very specific things about what those designs

18 would be.

19 MR. RAWALD: John Hurst.

20 MR. HURST: John Hurst with Lennox. 

21 I would just like to add what Chris said. 

22 Chris is talking kind of hypothetical this is
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1 what it would be. I just want to -- we have

2 already designed to that standard. And I

3 think my competitors have already designed to

4 that standard. I don't know that for a fact

5 but I have worked for Carrier. I have a

6 relationship with Trane. I have worked with

7 the Home Depot. And we all think kind of the

8 same way.

9 So, this isn't what we are going to

10 do. This is what we have already done and

11 there have been millions of dollars invested

12 in design, cost optimization. I would imagine

13 some of us are probably already buying the

14 parts, compressors, the tooling, the dyes,

15 whatever it takes to get to the standard that

16 we think is about to happen. That work is

17 done and this is a sunk cost.

18 So, I just want everybody to

19 understand that the money is spent and this is

20 what we think is going to happen in January. 

21 It is very important that we solve this

22 quickly.
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1 MR. RAWALD: John, if I could --

2 because you used a lot of pronouns for what

3 that thing was. What do you think -- what is

4 that thing that you think it is?

5 MR. HURST: You mean the regulation?

6 MR. RAWALD: Yes.

7 MR. HURST: Well, I am going to go

8 back to what Karen said because I can't say

9 this eloquently but the scenario described at

10 14.0 and above in the south and 13.0 and above

11 in the north. And does that --

12 MR. RAWALD: Well, that is the

13 number. But I guess what I am hearing from

14 the room is everyone in accord that what base

15 model means is the Highest Sales Volume Tested

16 Combination has to be 14?

17 MS. MEYERS: It has to be the

18 minimum, yes.

19 MR. HURST: Yes.

20 MS. MEYERS: So, today for 13, we

21 cannot sell anything less than 13.

22 MR. RAWALD: Right.
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1 MR. HURST: That is what we thought

2 we knew.

3 MS. MEYERS: In the south, we should

4 not be able to sell any unit that can get less

5 than a 14. That is the issue. Because if we

6 -- and I hold this up as my condensing unit --

7 this is a condensing unit. So, if the

8 condensing unit can get less than 14, why is

9 it okay to -- I mean I could design a 12 SEER

10 condensing unit that could get 13 when it is

11 paired correctly but DOE regulations say you

12 can't do that.

13 And so we all, I think, to John's

14 point, went down the same path of how we rated

15 units forever in that the minimum that that

16 would get --

17 MR. RAWALD: We have to cut the side

18 talk because it is going to be recorded.

19 MS. MEYERS: So, we shouldn't be

20 able to sell a condensing unit in the south if

21 it can get less than a 13.

22 MR. RAWALD: A 14.
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1 MS. MEYERS: Less than a 14. I'm

2 sorry.

3 MR. EISNER: John?

4 MR. HURST: Yes, so a couple of

5 points. Just one is this is what we thought

6 we negotiated. When I say we, I am speaking

7 for the manufacturers, I think also the

8 advocates would potentially agree. I won't

9 speak for you but we would lose a lot of the

10 savings, I think, if you take the other

11 interpretation, meaning you match a coil and

12 a condenser and you get there somehow.

13 The other thing is we are here for

14 enforcement, which we have been at this for

15 three, almost three and a half days and we

16 haven't gotten to that yet. But I think from

17 an enforcement standpoint, it is exponentially

18 more simplistic to enforce a simple standard

19 versus one that is left open to

20 interpretation, meaning I can get to 14 SEER

21 with a coil and condenser match that just

22 gives me the 14.1 through some manner.
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1 So, I am driving towards simplicity

2 also. Not only is it what we developed for,

3 it is what we thought it was. It is more

4 simple to enforce and you get more energy

5 savings for the country.

6 MR. RAWALD: Right. This is Doug. 

7 And as I sit here thinking about the issue

8 before me, a we framed it, and listing of the

9 directory and thinking from an enforcement

10 point of view, it is what you folks seem to be

11 saying you think it is. Now, I just look at

12 the label and say oh, it goes below 14. It is

13 in the south, it can't be sold.

14 Whereas, if it is allowed to be

15 below 14 but maximum coil it is going to be

16 above 14, so it is okay, I now have to go to

17 a directory of like AHRIs, pull the

18 certificate and say okay, there is the match

19 I have. Yes, that was okay.

20 So, there is another step to the

21 enforcement process that I would avoid

22 ostensibly, possibly, by regulating at the
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1 condenser unit level what the minimum

2 efficiency of that level is going to be,

3 which, in Karen's mind, seems to be the

4 minimum efficiency is going to be equal to the

5 Highest Sales Volume Tested Combination for

6 her products. I don't know if that is true

7 for everyone. And I don't know -- I haven't

8 heard that from everyone. If everyone else

9 believes their Highest Sales Volume Tested

10 Combination is their least efficient

11 combination as well. Is that you folks seem

12 to be thinking?

13 MS. MEYERS: Federal minimum

14 efficiency units, yes.

15 MR. HURST: I would just add in most

16 cases, because the least efficient in that

17 range is typically the most or the cheapest,

18 the most cost-effective for the consumer.

19 MR. RAWALD: So, logically, you sell

20 what is cheapest instead of Highest Sales

21 Volume.

22 MR. HURST: Yes.
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1 MR. RAWALD: Okay, thank you.

2 MS. HARIHARAH: This is Johanna

3 Hariharah from DOE. So, I just want to

4 clarify that everybody actually wants possibly

5 the most efficient solution. Is that correct?

6 MS. MEYERS: Whoa.

7 MS. HARIHARAH: So you want 14 SEER 

8 it can never go below 14 SEER no matter what

9 coil if you want that to be the standard for

10 this year.

11 MR. HURST: That is what we thought 

12 we negotiated.

13 MS. HARIHARAH: That is what you

14 thought it was.

15 MR. HURST: Within a region.

16 MS. HARIHARAH: Within a region. 

17 Okay.

18 MR. EISNER: Harvey.

19 MR. SACHS: This is Harvey and for

20 me, and I guess for some others in this room

21 that worked on comparable issues for basic

22 models and stiff last year, there is a bit of
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1 a sense of deja vu. In particular, my concern

2 is that I go back to people I am supposedly

3 representing and they want to make sure that

4 this is enforceable. They want to make sure

5 that it is not giving away a lot.

6 And I think it was John who said

7 something that was very comforting, that the

8 Highest Sales Volume Tested Combination is

9 going to be pretty close to the least

10 efficient, because that is where the customer

11 demand is.

12 It would be very reassuring to me to

13 have some way of establishing that, of showing

14 that, of representing that because I am always

15 subject to this question from other people who

16 interrogate me when I come back. How do I

17 know that this combo really is representative

18 of the ones that are going to be out there in

19 the market as low efficiency, even when that

20 tested combo is rated at 14.0, 14.1?

21 And that is plausible that I hadn't

22 thought about it that way but I need some
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1 reassurance.

2 MR. HURST: I'm not sure what you

3 are asking. Maybe restate it, maybe. I'm

4 sorry. Can you restate the question? I'm not 

5 sure I can reassure when I'm not clear what

6 you are talking about.

7 MR. SACHS: Sure. If I think

8 conceptually it is some sort of a bell that

9 might be strongly skewed with a long tale of

10 very few products sold that are way above 14

11 but part of the same basic model or basic

12 model or whatever we are calling it. The

13 assertion that is being made is that almost

14 all of the product is at or above the

15 efficiency of the Highest Sales Volume Tested

16 Combination. That that distribution, we

17 already have almost all the sales, we are

18 close to that. Very few of them are below

19 that. And it is that that I would like to be

20 able to graphically show or otherwise simply

21 explain as justification. I'm sure it is a

22 common understanding from the data you guys
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1 seek every week that they sort of the logical

2 basis is not something goes for outside this

3 room in my community or utility communities

4 are likely to be familiar with. 

5 Does that help?

6 MR. HURST: Yes.

7 MR. WINNINGHAM: I think what Karen

8 and others are proposing is that DOE give us

9 guidance that basically sets the bottom of the

10 scale at 14 and that we don't have matches of

11 the southern products that fell below. We

12 just don't have or offer that product match.

13 MR. SACHS: That is what I need to

14 have the ability to explain in elevator

15 speech.

16 MS. NOLL: And this is Elizabeth,

17 NRDC. If there is something that falls below

18 it that is not the Highest Sales Volume Tested

19 Combination, are you ensuring that it is that?

20 MR. WINNINGHAM: Again, this is Dave

21 with Allied. I think we could have that same

22 unit but under our kind of rules through AHRI
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1 we would call that a different unit.

2 MR. CLARK: It would be listed

3 differently.

4 MR. SACHS: There is an awful lot of

5 culture and experience. And what I am hearing

6 is almost unwritten practices that are

7 embedded here. And I certainly don't think

8 that at this late date in the game DOE can

9 codify all of that stuff. But I am looking

10 for something that helps me carry the message

11 back that says ain't nothing less than 14 that

12 is going to go south.

13 MR. CLARK: I guess what we are

14 trying to do, I guess in my head, is we have

15 had the 10 SEER minimum efficiency standard,

16 the 13 SEER efficiency standard and we are

17 trying to treat the 14 SEER in the south

18 standard the same way that we have treated

19 those standards.

20 MR. SACHS: All right, I would like

21 to try to form a -- that's very helpful, Gary. 

22 And I would like to just try before tomorrow
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1 morning to formulate a little bit of what I

2 think I am hearing in lay terms because it

3 will help me and it might help you.

4 MR. RAWALD: Harvey, I find

5 everything you do to be helpful to me. So,

6 yes, I think that would be helpful.

7 So, again, Harvey is volunteering to

8 think about this tonight, come back tomorrow

9 and say here is what I hear you guys saying

10 and have your own report. 

11 What I guess I want to make sure is

12 is there any dissenting opinion? I am hearing

13 from only half the manufacturers. Is there

14 any manufacturer saying heck no, Doug, we are

15 operating under the belief that if I have this

16 model that has been performing in combination

17 at 13.8 and 14.2, that it should be able to go

18 to the south? And the solution I have been

19 hearing from manufacturers, we will just give

20 you the model number. So, it might be the

21 same actual working parts but a different

22 model number, so it would be a different
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1 thing. 

2 Is that the same -- are all

3 manufacturers on the same page that they do

4 want the minimum to be the 14 and that that

5 particular component couldn't have an FTC

6 label that would stretch both above and below

7 14 and be sold in the south, as an example?

8 MR. DORIA: This is Jordan with

9 Ingersoll Rand. Yes, that is exactly what we

10 want.

11 MR. RAWALD: Yes, Dave, we haven't

12 heard from you at all on this.

13 MR. ROCKY: Bryan Rocky from Johnson

14 Controls. So, again, the discussions focus on

15 what you can easily explain to our customers

16 in the southern states and having a 14 SEER

17 minimum rating for that provides that easiest

18 explanation. It does not prevent us from

19 listing or rating units that would go to the

20 south under ARM for sale in the northern

21 states, under the same model numbers.

22 It is not an HSVTC anymore. Right? 
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1 We are not talking loose coil. We are talking

2 blower/coil applications or something. 

3 Smaller coil sizes, other things.

4 MS. MEYERS: Under the same model

5 number?

6 MR. ROCKY: A basic model group, a

7 14 SEER unit has the ability to be rated one

8 way for an HSVTC. Right? So, it is a 14 SEER

9 now and it is still going to be a 14 loose

10 coil rating. Okay?

11 Is there anybody with an ICM or a

12 smaller coil that you can still have a rating

13 that is legitimate for a 13 SEER? I just

14 looked one up. I have got in the York

15 listings right now, I have 45 listings with a

16 14.5 SEER model number that are listed at 13

17 SEER with a separate ICM. That is still legal

18 in the northern states.

19 MS. MEYERS: In the northern, yes.

20 MR. ROCKY: Not in the southern,

21 right?

22 MS. MEYERS: Right.
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1 MR. ROCKY: We are not talking about

2 them. So, the ICM is going to have to change

3 their specification of a coil to get a

4 legitimate 14 SEER rating for the south. It

5 is a different coil.

6 I think I am fine with this. It

7 doesn't prevent it from selling this coil

8 combination with that 14 SEER unit in the

9 north but a 14 SEER minimum on the tag as a

10 system matched eliminates these 45 models from

11 being sold in the southern states, which is

12 what I want to do. I don't want to sell

13 these. So, I'm good with this.

14 It doesn't prevent me from doing

15 something. None of these ratings are my

16 ratings. They are the ICMs.

17 MR. RAWALD: This is Doug. So, I

18 want to understand the parameters here. So,

19 because I understand the independent coil

20 manufacturers who rightly points out, we don't

21 want to forget these folks. 

22 So, is an independent coil
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1 manufacturer's performance with the condensing

2 unit reflected on the FTC label? Or does the

3 FTC label only reflect those things that are

4 offered by the manufacturer as a system that

5 they are building? I see everyone nodding

6 their head yes to the second point.

7 So, the consumer will get on a label

8 the advice or the information on performance

9 range as currently designed, based upon what

10 the manufacturer would issue as a system. But

11 what the performance of the condensing unit

12 would be with independent coil is not counted

13 for on the label and the manufacturer, of

14 course, probably feel they shouldn't be

15 responsible because they are not making that

16 combination.

17 And so the question becomes from a

18 system level, what we will say is we want to

19 be able to say the minimum thing on that FTC

20 label would be 14 and it wouldn't go below

21 that. But we understand that there may be an

22 independent coil that when matched to that
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1 same model could make it below 14 but it

2 couldn't be sold in the south to go in that

3 system. But we understand the condensing unit 

4 could perform below 14 when matched for that

5 coil but we are not taking responsibility for

6 it. What we are saying is the 14 will be the

7 minimum performance of the combination that we

8 would be willing to offer.

9 Am I covering all the bases or am I

10 missing a nuance? I really want to be sure,

11 being an uneducated lawyer in the room, that

12 I understand exactly what you guys are saying.

13 I see some nods, some smiles.

14 MS. MEYERS: So, you know the FTC

15 label has the model number on it.

16 MR. RAWALD: Oh, okay. So now, I

17 understand exactly what you folks are saying,

18 I think. And I will deliver that mail back

19 and I will come back with an answer,

20 hopefully, soon, as we had done in the past. 

21 I think it is very clear what we are saying. 

22 From an enforcement point of view, I have to
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1 say that it seems to be easier but it doesn't

2 eliminate all of my problems because I still

3 have the question of the ICM, which is now

4 implied with this section. So, I have to make

5 sure that the ICMs are matched with the

6 condenser is going to perform at that level.

7 MR. SACHS: Doug, we have -- this is

8 Harvey and I just want to point out that in my

9 opinion we have two different things, quite

10 different, lumped in with the ICMs in this

11 discussion. One of them is third-party

12 manufacturers who make a substitutable coil

13 for conventional forced air systems. Craig

14 represents a specialized niche called small

15 diameter and high velocity products, which

16 make a specialized blower coil unit that has

17 very high external static pressure and blows

18 air through very small insulated ducts. So,

19 it lines up working with waivers or a special

20 class in this very complex regulatory history

21 here.

22 And I don't know how Craig's units
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1 are labeled but they buy condensing units off

2 the street, some arrangements and there are

3 several of these manufacturers, but it is not

4 a substitutable ICM product.

5 MR. RAWALD: Okay.

6 MR. SACHS: Somebody who has worked

7 with them much more than I have probably has

8 an understanding of where they get their

9 labels from.

10 MR. RAWALD: Did you have a second

11 issue?

12 MR. SACHS: No. It is just that I

13 wanted to make sure we had on the record that

14 they are, the genus ICM has at least two

15 species that don't have common interests.

16 MR. EISNER: Craig Messmer online,

17 do you have a question or a comment?

18 MR. MESSMER: Okay, well, I feel a

19 little bit like that guy on Saturday Night

20 Live who is always ten minutes' behind the

21 conversation.

22 But on the testing requirements for
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1 this, you know if the basic model, if you have

2 a unit that is rated at 14 with a coil and you

3 rated it 14.5 or 15 with a blower coil, does

4 that mean you have got two base models and you

5 have to do two tests? 

6 That is the basic question I had

7 there because I think that would really

8 increase testing requirements.

9 MR. EISNER: Dave?

10 MR. WINNINGHAM: And Doug, I am

11 looking to you. And Craig, I am looking at

12 Doug. I think this goes back to the AHRI

13 definition of a basic model, which if we

14 declare a different basic model within AHRI,

15 we have to have the data to support that. I

16 mean, that is what we do. I mean, that is

17 what our process has been, where really the

18 DOE process is to test that Highest Sales

19 Volume model with a particular condenser.

20 So, even though there is a different

21 definition of basic model by DOE versus AHRI,

22 I don't believe, as it has been explained
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1 today, that that would increase the testing

2 that we do.

3 MR. RAWALD: That's correct, Dave. 

4 Nothing about this should be increasing test

5 burden. The testing that is required for -- 

6 as long as you are using an approved ARM, I

7 always have to make sure of that caveat,

8 because if you are not using ARM, you have to

9 test every basic model. But if you have the

10 ARM, then the model of the condensing unit

11 must be tested with the coil that it is most

12 likely going to be sold for and that is going

13 to be the rating and then the ARM could be

14 used off of that.

15 So, how that works in the

16 independent coil manufacturer context, I don't

17 understand enough about that piece to offer a

18 technical explanation about what you folks do

19 next. So, I want to be careful about what

20 advice I give you, Craig. And perhaps you

21 could send an email to us offline kind of

22 explaining your concerns and make sure I can
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1 address them appropriately. I think I can

2 handle now the folks that are doing all

3 things. I want to be sure that I am not

4 leaving out the ICMs is what I am saying.

5 Dave.

6 MR. WINNINGHAM: Again, this is Dave

7 with Allied. And all third-party ratings are

8 generated with an ARM. And I believe the

9 requirements --

10 MR. RAWALD: Assuming they have an

11 approved ARM.

12 MR. WINNINGHAM: Yes.

13 MR. RAWALD: So, it could actually

14 be an independent coil manufacturer without an

15 ARM. And so they would not be able to rate

16 using an ARM.

17 MR. WINNINGHAM: Correct.

18 MR. EISNER: John.

19 MR. HURST: John Hurst from Lennox. 

20 We also own an independent coil manufacturer,

21 ADP, so full disclosure, but we are

22 comfortable with the approach that has been
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1 adopted.

2 MR. RAWALD: Okay.

3 MR. DORIA: This is Jordan with

4 Ingersoll Rand. I want to maybe circle back

5 with the discussion on regionality and what

6 exactly it is that might need to be clarified

7 by the Department.

8 I think what we are saying, if I

9 understand it correctly, is that really, we

10 end up effectively having classes of

11 condensing units that are effectively regional

12 in nature. Right? Isn't that actually what

13 we are saying, that 13 SEER condensing

14 products are effectively northern condensing

15 units and 14 SEER and above are effectively

16 southern condensing units?

17 MR. HURST: No.

18 MR. DORIA: No?

19 MR. HURST: Well, with the caveat

20 that if there is a utility rebate in the north

21 at 14, that we would sell a 14 SEER product in

22 the north.
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1 MR. DORIA: Yes.

2 MR. HURST: But I generally

3 understand your concept.

4 MR. DORIA: I guess really what I am

5 trying to drive at you say you need clarity

6 from the Department on this. I am not sure

7 there is sufficient understanding in the room

8 or the Department necessarily, to know what it

9 is they need to clarify. What is it we are

10 really asking? They are like can we point to

11 the specific change in the guidance that needs

12 to be made?

13 MR. LATTANZI: This is Matt

14 Lattanzi. I think I can help with that. I

15 spent a lot of time with the guidance. As I

16 read it, I agree with a lot of what you said,

17 Doug, as to what it says. I feel it is a bit

18 contradictory. And there is two places in the

19 guidance document where I can point to that I

20 would recommend the DOE take a look at.

21 Could I ask if you just scroll up

22 slightly and I will illustrate what I am
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1 talking about.

2 MR. RAWALD: And this is Doug, I

3 need to interrupt you real quick. I do want

4 to hear what you want to say. But I do want

5 to say also capturing this in the written

6 comments will be the most way -- the best way

7 to help us. Because as much as I will deliver

8 information, telephone is a bad thing to do. 

9 And the transcript will come out eventually,

10 having that will make it very helpful for us

11 in trying to figure out what is going on.

12 MR. EISNER: I think what Matt is

13 suggesting is look at this. I think you want

14 to suggest some wording changes. If everybody

15 in the room agrees to some wording changes, I

16 would assume that would be helpful for you.

17 MR. RAWALD: It will be but I need

18 in the written comments the content.

19 MR. LATTANZI: We will work together

20 AHRI to put together the written comments. 

21 There is two places -- and I have some

22 additional comments on a question you asked
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1 earlier, as well. I'm sorry but if I could

2 get you to scroll up again. There at the very

3 top. Okay, then please scroll down. Yes, the

4 other up.

5 MS. MARCHETTI: What page are you

6 on?

7 MR. LATTANZI: I am on page three,

8 the section under basic model and

9 certification. Okay, right there.

10 I think the difference in our

11 interpretation of the definition of basic

12 model group is part of what is causing what I

13 feel is contradictory. And it is the sentence

14 where it is all combinations, i.e., all models

15 within the basic model must share the same

16 certified rating and that rating must be

17 representative of the least efficient

18 combination in the basic model. I think that

19 right there is driven by the difference

20 between what we feel is the definition and

21 that needs to be looked at.

22 MR. EISNER: And then going to page
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1 two, can we have some quick discussions? Does

2 everybody agree that this is one of the

3 problems, that this language is what is

4 causing your problem?

5 MR. LATTANZI: We are talking about

6 this sentence here.

7 MR. RAWALD: All combinations, i.e.,

8 individual models within a basic model must

9 share the same certified rating and that

10 rating must be representative of the least

11 efficient combination in the basic model.

12 I will say, this is a statement we

13 have said before. It comes directly from the

14 Federal Register notice is how we treat basic 

15 models across all products.

16 And so the basic model concept, you

17 must understand, is not just unique to air

18 conditioning or split systems, it is used in

19 every product we currently rate. So, we want

20 to think just to ourselves about regulation

21 how we deal with it. And I can't explain how

22 they AHRI definition are different from the
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1 definition we have but I think David has

2 pointed out the fact that they are different.

3 So, this is what we have said. This

4 is exactly what we have said the position the

5 Department takes. I don't think we would

6 change that but if we had to make clarity for

7 you in some way, I would like to about how we

8 can make that more clear. But this has been

9 the Department's consistent position across

10 all products.

11 MR. EISNER: So, are you saying that

12 as long as thing stays the same, you could add

13 a second sentence that says this means in the

14 context of regional standard and then put

15 something into there?

16 MR. RAWALD: I don't want to say

17 that we could or that we will. I want to say

18 the Department will consider any

19 recommendation to make the guidance more

20 clear. But this is a statement that we have

21 said over time in which we have steadfastly

22 believed in.
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1 So, if that needs to be clarified in

2 some way to make it fit this situation here,

3 we can do that or we can at least discuss that

4 internally, based upon your comments. But I

5 want to make sure that everyone understands

6 that that is what we have always said about

7 this.

8 MR. EISNER: Let's give Craig a

9 chance to get in early this time. Craig, you

10 have got a comment?

11 MR. MESSMER: Yes. I know what we

12 do and I think we do the same as everybody

13 else. It is my understanding that all the

14 ICMs use an ARM based on data from the Highest

15 Sales Volume Tested Combination and the issue

16 is somebody just clarified or just pointed out

17 that in the clarification the issues that

18 everything within a basic model group has to

19 have the same rating. And that would apply to

20 -- would that apply to the ICMs? Because when

21 we rate a product, it is either the same,

22 higher, or lower. And so, what is allowed?
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1 And in some cases with the 13/14, it

2 may be optimal, I'm not saying we can do it

3 with our small ducts, but I think other people

4 can, where they can take a 13 SEER unit and

5 put either a larger coil or a blower coil on

6 there and gain a 14 SEER. Is that allowed to

7 be sold in the south? Anyway, that is the

8 brunt of it.

9 MR. RAWALD: And Craig, this is Doug

10 and I want to get back to Matt. I think Matt

11 had more to say. 

12 So, the second question seems to be

13 the one that Karen was driving at immediately,

14 which is if the condensing unit performed

15 below the 14, it shouldn't be installed in the

16 south, even if you could take an independent

17 coil and bump it up to the 14. The

18 manufacturer of the condensing units don't

19 want that to be out there as a possibility. 

20 They want the condensing to have a minimum

21 floor of 14. And the independent coil

22 manufacturer would then be obligated to make
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1 sure that his coil that goes with that thing

2 is going to make it so it is still plumbed to

3 14. So, understanding that that is going on

4 the ICM to make sure therefore it does that.

5 Everyone is kind of nodding their

6 head in their room so, it seems there is

7 general agreement with that premise.

8 And the first question you asked was

9 regarding the basic model grouping. I want to

10 make sure everyone is clear is the basic model

11 for the Department has to be rated with one

12 rating. So, that is not particularly in the

13 basic model group as filed by AHRI. And so,

14 if your business model is based on something

15 that is from the AHRI, that is how you do your

16 business model. But understand that for

17 rating your coil is performance in combination

18 with the condensing unit. If it is going to

19 be rated with different values, that is a

20 different basic model. But we would

21 ostensibly allow it to be achieved through an

22 ARM, as long as it is based on the Highest
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1 Sales Volume Tested Combination, which sounds

2 like you are doing.

3 So, speaking off the cuff and I want

4 to make sure we entertain this exactly the way

5 it is being, I want to have a technical person

6 answer your question, Craig, the right way, it

7 sounds to me that we are all on the same page

8 but I just want to verify that with the other 

9 folks that are smarter than me.

10 MS. MEYERS: That's exactly right. 

11 So, in the HVAC world, the basic model is your

12 Highest Sales Volume Combination. The range

13 is achieved, and the DOE wants to call those

14 new basic models, you know a basic model group

15 is how we group them and that is the range of

16 ratings that that condensing unit can get.

17 So, an HVAC --

18 MR. LATTANZI: And the ARM is the

19 ratings -- I'm sorry -- is the ratings after

20 that.

21 MS. MEYERS: Right.

22 MR. LATTANZI: It is used for those
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1 other ratings.

2 MS. MEYERS: Right.

3 MR. RAWALD: This is Doug. 

4 Something that Harvey said, there is some deja

5 vu here. I think this in some way goes back

6 to last summer with the discussion of a base

7 model versus basic model with a base or the

8 platform --

9 MS. MEYERS: Correct.

10 MR. RAWALD: -- would be the product

11 which you build. And the base being the least

12 efficient, no bells and whistles thing. That

13 is going to be your Highest Sales Volume

14 Tested Combination for most people, it sounds

15 like, and that building upon that would be

16 more efficient. But it will still be part of

17 the same basic model grouping for purposes of

18 AHRI. But from DOE perspective, that will be

19 a different basic model, which is going to be

20 issued ratings by ARM.

21 MR. LATTANZI: Right. And that is

22 what that sentence essentially says. That is
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1 the DOE interpretation, saying it is a

2 different basic model.

3 MR. RAWALD: Absolutely correct.

4 MR. LATTANZI: And I had two other

5 points. Is that okay?

6 MR. RAWALD: The floor is yours.

7 MR. LATTANZI: If you go to page two

8 now, it is essentially saying the same thing

9 in the third paragraph from the bottom, right

10 here. That's perfect. All right, the

11 sentence is in this case, since the company

12 intends to claim the ratings for each

13 combination and distribute all possible model

14 combinations as separate basic models. I

15 think that sentence right there is basically

16 saying the same thing. And that is that

17 difference in interpretation of basic models,

18 in my mind, that is creating some of the

19 conflict that we are all struggling with here.

20 MR. RAWALD: All right but

21 understanding that we are not going to change

22 the basic model definition for DOE because it
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1 is what it is and we haven't for a lot of

2 other reasons besides air conditioning. That

3 is what we mean. That is what we mean by

4 that. And I think hopefully, the Department

5 will be clear on the meaning. Gary gave me a

6 lot of thumbs up, saying you are belaboring

7 the point, which is good.

8 MR. LATTANZI: One other thing and

9 this is a little difficult. You asked a

10 moment ago were there any dissenting opinions

11 in the room. And I know everybody is all of

12 a sudden real nervous. 

13 Let me say that for lack of a better

14 word, I am going to use the word abstention. 

15 But I will further comment that my company

16 does see pros and cons both ways. And at the

17 same time, I understand where everybody's head

18 is and I don't see us as getting in the way of

19 what we are discussing here. I just want to

20 get it on the record that as you described it,

21 I mean I think we do see certain benefit for

22 that as well.
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1 MR. RAWALD: And so I am clear,

2 Matt, so you are saying that from NORDYNE's

3 point of view, there are some benefits to

4 having the ability to sell in the south a

5 condensing unit that could be rated both above

6 and below 14 SEER, depending on what coil and

7 blower it is matched with.

8 MR. LATTANZI: Yes. Yes, and in the

9 interest of time I am not going to -- I could

10 spend some time elaborating on it but I think

11 we have had all those discussions in the past. 

12 I think many people in the room have heard our

13 position so I won't bog the meeting down with

14 that commentary. 

15 MR. RAWALD: Okay.

16 MR. LATTANZI: But again, I think

17 since you asked the question, the best word I

18 can come up with right now is abstention.

19 MR. RAWALD: No, it's good to know.

20 MR. LATTANZI: Okay.

21 MR. MELCHI: Jim Melchi with HARDI. 

22 I would just like to go on the record as well
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1 that we would be supportive, as distributors,

2 of the approach discussed by the manufacturers

3 as well. We think the more simple the

4 approach is for them, the easier it is going

5 to make the distributor to communicate the

6 changes that are coming towards their

7 customers.

8 MR. EISNER: Craig Messmer says

9 okay, I'm good with limiting 13 SEER outdoor

10 units to be sold just in the north.

11 MR. RAWALD: Okay.

12 MS. HARIHARAH: I wanted to say one

13 thing before -- this is Johanna Hariharah for

14 DOE. I know this is a very belabored point

15 but I just want to get this on the record.

16 You know your Highest Tested Sales

17 Volume Combination is 14.2 and your ARM goes

18 down to 14. You are saying that you are going

19 to be okay with that. That's it. You can't

20 sell anything that your Highest Tested Sales

21 Volume Combination, if it is 14 but the ARM

22 can go down to 13.8, you are okay with that
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1 not being sold in the south.

2 MS. MEYERS: You got it.

3 MR. RAWALD: Is this a good time to

4 take lunch?

5 MR. MELCHI: It's always a good time

6 to eat.

7 MR. EISNER: All right, let's take

8 lunch and be back at one o'clock.

9 (Whereupon, the above-entitled

10 matter went off the record at 11:54

11 a.m. and resumed at 1:04 p.m.)

12 MR. EISNER: Why don't we get

13 started again? We were supposed to have a

14 panel discussion this morning on the

15 distributor's records retention, market

16 pressures, that sort of thing. So, we put

17 them off and it is time for that.

18 Who is going to start this off?

19 MR. PORTER: You want me to start it

20 off?

21 Steve Porter Johnstone Supply.

22 MR. RAWALD: Let me just check,
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1 everybody online okay with this? 

2 MR. PORTER: Are we good, Doug?

3 MR. RAWALD: Yes.

4 MR. PORTER: I wasn't here

5 yesterday. I apologize I don't know if you

6 touched on some things or didn't touch on them

7 although, I did get a brief update.

8 Excuse me if I am a little

9 confusing, too, at times. I have been up for

10 36 hours, probably but I have been drinking

11 coffee to overcome.

12 I really like the direction we are

13 going in the last conversation, just if I can

14 make that statement as well is that it makes

15 it very clear for us if that hanger tag is 14. 

16 It just cleans everything up for us. And so

17 as Jon stated, that is HARDI's position would

18 be to support that.

19 I will speak only for independent

20 distribution. I cannot really speak to issues

21 related to manufacturers and their

22 distribution. So, I'll kind of keep this
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1 focused on independent distribution.

2 And right now, obviously, we do

3 warranty for new equipment that we have that

4 we sell or even if we don't sell that

5 equipment and somebody comes in and needs us

6 to handle that warranty, if we haven't sold

7 the same brand, we would process, or some

8 distributors do and some distributors don't

9 process that warranty. So, I think it is

10 different for each distributor.

11 And to speak to the different kinds

12 of distributors that handle equipment, too. 

13 Those that are focused in more of a commercial

14 distribution, light commercial, and then you

15 sell some residential, there are distributors

16 that are focused on refrigeration but may also

17 sell residential equipment. There are

18 distributors that are focused strictly on

19 residential distribution and supporting

20 supplies. There are distributors that focused

21 on parts and also sell equipment. So, there

22 is a range of different types of distributors
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1 with a little different kind of profiles that

2 are out there. 

3 My company has four different types

4 in its own organization that sell those or

5 that manage in that same way. Within those

6 organizations, warranty can be handled and

7 even within my company are handled in all

8 kinds of different ways. So, record keeping

9 processes could have a number of touches

10 within that organization and people that

11 handle warranty or keep track of the equipment

12 sales either in a myriad of different ways on

13 a number of different ERP systems.

14 And then typically what happens,

15 there will be one person, I won't say this is

16 for all, but usually there is one person

17 within that distributor that is kind of a

18 warranty guru and basically they become ad hoc

19 guru because nobody wants to do warranty. It

20 is something that you wish you wouldn't have

21 to do but it is the cost of doing business. 

22 But it is one of those things that typically
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1 can build up with an organization. It takes

2 a lot of management and time and there is a

3 lot of paperwork to it and processes. And

4 typically, whoever wants to do it will get it

5 or the newest person in the organization will

6 be given that job to do when they come in

7 because nobody wants to manage that particular

8 issue.

9 So, the record keeping on that could

10 vary from independent to independent because

11 nobody is going to -- nobody wants to get

12 involved in it because once you get involved

13 in it, then you are going to end up doing it. 

14 So, if you have a process. So, it can vary at

15 different ones. I have seen all different

16 kinds of processes with independent

17 distributors on how they handle their warranty

18 and their record keeping and how much is paper

19 and how much is put into the computer and

20 process or whether they have redundant backup

21 systems for that process or they don't.

22 MR. FENSTROM: So this is Gary for
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1 the California IOUs. Why is it nobody likes

2 this job just because it is a tedious

3 paperwork job or is there other reasons?

4 MR. PORTER: No, I mean doing

5 warranty involves a return and the paperwork

6 process and the filing back to the

7 manufacturer and a touch of the equipment and

8 then a return. It is usually a problem is

9 involved and sometimes an unhappy customer or

10 whatever. But as far as on the process side,

11 yes, it is heavily involved in a lot of

12 paperwork and backup and return and proving

13 back to the manufacturer that it is done

14 correctly and that the serial numbers match

15 and they sold it and it was registered as

16 under warranty as well by the homeowner.

17 And I can't speak to all the

18 different manufacturers' warranty processes

19 either.

20 MR. CLARK: This is Gary from

21 Goodman. The other thing is is this person

22 typically does warranty for all the products
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1 that a distributor sells.

2 MR. PORTER: Right.

3 MR. CLARK: And everybody's process

4 is a little bit different. And so it is

5 tedious enough when it is just one warranty. 

6 But when you have 60 different -- 

7 MR. PORTER: Four hundred.

8 MR. CLARK: -- yes, 400 okay, 400

9 different lines of equipment, it can be --

10 MR. PORTER: And suppliers.

11 MS. MEYERS: Yes, it is not just

12 equipment.

13 MR. PORTER: It is not just

14 equipment. So you have a thermostat, you

15 handle every product.

16 MR. LATTANZI: This is Matt Lattanzi

17 again. I have a little bit of experience with

18 this. One of the other hats I wear is

19 warranty. And I think Gary hit it right on

20 the head. It is a very complex job, due to

21 the magnitude of the OEMs the distributor has

22 to deal with when doing factory warranty. I
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1 hear that all the time.

2 MR. SACHS: This is Harvey. And I

3 really want to test what I keep hearing from 

4 folks in the industry that part of the issue

5 of warranty at the distributor level is you

6 are caught between the manufacturer is

7 skeptical that equipment is dead on arrival or

8 fails soon after and the contractor who is

9 sure it wasn't his fault. It is a really hard

10 place to be with consumers or the end user is

11 really unhappy and feels that everybody in

12 that process is pointing fingers at each other

13 instead of trying to fix his problem.

14 MR. PORTER: Yes, I mean, again, DOE

15 is an exception to the rule, I would say. I

16 mean, that is --

17 MR. SACHS: DOA.

18 MR. PORTER: DOA. I'm sorry, DOE. 

19 No offense, Doug. I think you are doing a

20 great job.

21 (Laughter.)

22 MR. RAWALD: Glad to hear I'm not
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1 DOA.

2 MR. PORTER: The DOE is not DOA.

3 The DOA issue is not a -- I mean

4 yes, it happens and those are complicated

5 situations and get done but usually it is

6 negotiated through and most wholesalers try to

7 do a pretty good job of keeping track of

8 contractors that are repeatedly returning the

9 same type of issue. You know, they keep

10 bringing in motors that are bad. We identify

11 them as maybe more parts changers. I will say

12 that most of what comes back in, there is not

13 anything wrong with it, a high percentage. 

14 And that is just poor practices or maybe they

15 weren't trained correctly or they are in a

16 hurry or whatever happens. But that does

17 occur.

18 MR. WHITE: This is Chuck White from

19 PHCC. I have a couple things to add. First,

20 the first day of contractor school they teach

21 you it is never your fault. But I agree, I am

22 involved with the NATE program, which is a
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1 technician certification program and one of

2 the impetus for creating NATE was just the

3 parts come back that there is nothing wrong

4 with and really all up and down the chain we

5 are not happy with it. The manufacturer is

6 not happy; he gets good parts back. The

7 wholesaler has to deal with it. And frankly,

8 as a contractor, I am really not happy with it

9 either because all up and down the chain there

10 is no compensation going on for this,

11 basically. It is a problem that has happened

12 related to the sale. I have to make the

13 customer happy. And I am your customer, so

14 Steve doesn't make me happy and Jon here has

15 to make him happy. But none of us are getting

16 paid for this happiness, essentially.

17 Yes, so there is no way around it.

18 MR. PORTER: Different manufacturers

19 track a run rate of warranty and it is with an

20 acceptable region and whether we have gotten

21 -- there are problems that come up, too, that

22 are legitimate on parts that fail in a series
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1 or there is a recall on a product. I mean but

2 it is somewhat monitored. It just the cost of

3 doing business. It is an expensive cost of

4 doing business, which is why we were concerned

5 about our record keeping side of this issue

6 when it first came up on the enforcement side

7 was because what basically we would be doing

8 would be similar kind of paperwork for every

9 piece of equipment you sold. And right now,

10 the cost of warranty takes up a lot of the

11 organization's times. And to now have it done

12 on every single piece of equipment would be

13 really, really expensive.

14 MR. MELCHI: This is Jon Melchi from

15 HARDI. And to add to Steve's point and the

16 burden he is talking about the distributors

17 currently face is only for those warranties

18 that are brought back by the contractor. And

19 there is a significant portion or significant

20 amount of times where Steve's organization may

21 not even see that warranty information or

22 anything to do with it. The contractor would
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1 deliver it, you know, send it in directly or

2 if at all.

3 MR. PORTER: And also we may be

4 warranty for another. The equipment may have

5 been sold at a different distributor but

6 because the contractor is a good customer of

7 ours, we are going to facilitate processing

8 the warranty and vice-versa with other

9 independent distributors. They may take it to

10 the one that they know is going to get it done

11 faster.

12 MR. WHITE: Well and this is Chuck

13 White again. Warranty is not on every piece

14 of equipment that you sold. It is only on

15 some percentage. Probably a small percentage

16 and I don't know what that is but speaking

17 from the business that I own, it is pretty

18 low.

19 MR. RAWALD: This is Doug. So, I

20 want to explore the relationship between

21 contractors and dealers, that has been

22 mentioned a couple of times.
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1 So, talk to me from a distributor

2 point of view. What is the relationship with

3 the contractors and how do you view that? How

4 do you cultivate that?

5 MR. PORTER: Well, hopefully we

6 cultivate it with good customer service;

7 having the inventory at the time that they

8 need the inventory; training and that training

9 could be on business training, as well as or

10 flat rate pricing classes that are held at the

11 facilities, training on the product, hands-on

12 training on product done at the facility as

13 well, as well as online training that is

14 provided.

15 So, we cultivate a relationship

16 based on great customer service, providing

17 access to financing companies and putting that

18 marriage together between them; dispatch

19 software, software programs; inventory

20 planning and tools that may help them reduce

21 how much inventory they carry or however they

22 want to do it, actually is how we want to do
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1 it.

2 So, if you want the product

3 delivered in a cab, picked up at the store,

4 dropped on a roof, you tell us how you want us

5 to get it there and that is what we will try

6 to figure out how to do for you.

7 MR. RAWALD: And I guess what is

8 kind of swirling around in my mind is the idea

9 from the contractor point of view of education

10 costs or overhead. You are not making money

11 on people learning. And so, is there some

12 sort of juxtaposition with the distributor

13 role in educating the contractor that can

14 somehow assist in this ability for

15 distributors to ensure that people downstream

16 are doing the right thing and not installing

17 the wrong product?

18 So, we have the question of do you

19 guys proposed two weeks' ago about hey, we

20 don't like to get it in the hands of the guys

21 in the first place but if it does, give them

22 the education so they know to return it back
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1 or to not use it. So, just some sort of way

2 to cultivate that.

3 MR. PORTER: I think we do that now. 

4 I mean we have the education when you want

5 from 10 to 13 and when we are going from --

6 you know, as we go to 14 in these regions. 

7 That is why it is so critical to have the

8 hanger tag correct. And it is easy to

9 communicate. That is an easy thing to

10 communicate. And for the most part, I would

11 say 99 percent of the time, people are going

12 to do the right thing. I don't want to create

13 rules around the exceptions because that is

14 very expensive to do, very costly for

15 everybody to do and not really that

16 enforceable. Those that are going to do that

17 are going to do that. But if we have an easy

18 enforceable hanger tag that we can communicate

19 to the marketplace posted in our stores, let

20 them know that this is what is -- and the

21 match ups are certified so when we print out

22 our price sheets and we match up the
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1 certifications to the models of the coils,

2 they go out to the contractor, they can see

3 what they can buy and what matches up. It is

4 no different than what we have been doing all

5 along with all the other changes in the

6 industry over the years. It is just getting

7 clarity around this would take it light-years

8 forward on making sure that people do the

9 right thing. And for the most part, I think

10 everybody wants to do the right thing.

11 You know our burden is when we get

12 the different -- and for ourselves, when we go

13 and pick that product out of those

14 distribution centers, we have to have a clear

15 way to send somebody that doesn't install

16 equipment, doesn't think about it that way but

17 is just working in a warehouse to go out and

18 pull that product and ship it because they may

19 be on a border state region. And I have a

20 Vegas warehouse. Johnstone Supply has a Vegas

21 warehouse that ships to three other regions. 

22 So, we have to be able to have that clarity in
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1 the labeling would go a long ways to make it

2 easier for everybody to understand. And I

3 think that takes care of 99 percent of what we

4 are trying to do here.

5 MR. McCRUDDEN: So, this is Charlie

6 McCrudden with the Air Conditioning Contractor

7 of America. Speaking on behalf of my

8 contractors, I will say that there is, as

9 Steve described it, the relationship is very

10 much a customer service style relationship. 

11 They have a limited number of customers, only

12 HVAC contractors. You are not going to reach

13 out to homeowners as a distributor. So, they

14 will do everything they can to keep them

15 happy.

16 And I say that because I grew up in

17 a distributor household. My grandfather

18 started McCrudden Heating Supply in Ohio and

19 I worked there in the summertime for years. 

20 I used to work the counter. We had, at my

21 dad's warehouse, this room devoted to

22 training. And manufacturers, some of them
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1 that are sitting next to me, would send reps

2 to come in and train the contractors on the

3 new product, new models, things like that.

4 Financing was a big thing.

5 Now, my father's company was small

6 in the scheme of distributors but he did a lot

7 of banking, so to speak, with contractors. He

8 was their bank in many ways. And that is

9 another service. And that is not really sort

10 of DOE and what we are talking about today but

11 this is about their relationship.

12 But anyway, my dad's company and I

13 think others are like this, he had, and he

14 sold two years' ago so I have to say he had, 

15 he had two engineers on staff, so to speak,

16 who helped contractors with difficult jobs,

17 helping them with the designing and the

18 selection of equipment. So, if it is a unique

19 situation, you know not your typical

20 installation, they had someone they could go

21 to because they were small, if they weren't a

22 large contracting company.
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1 So, now I will take my McCrudden

2 Supply hat off again and I will go back to

3 being an ACCA person.

4 MR. RAWALD: Well, so you mentioned,

5 I am curious about that, the training

6 sponsored by the manufacturers at the

7 distributor's warehouse attended by folks from

8 the contractor. So, where was the cost?

9 MR. McCRUDDEN: Well, obviously, the

10 training facility --

11 MR. RAWALD: Who bore it, I guess is

12 my question.

13 MR. McCRUDDEN: The training

14 facility is borne by the manufacturer -- I'm

15 sorry, the distributor because that is floor

16 space that is not being used to hold

17 inventory.

18 MR. WHITE: Again, it varies,

19 depending on the program and depending on what

20 is being taught. There are some places that

21 will charge $50, some kind of fee. There are

22 classes that --
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1 MR. RAWALD: To the contractor.

2 MR. WHITE: -- are charged to the

3 contractor. There are other classes that may

4 be shorter in duration, an hour or two-hour

5 class that is free. And you know, they may

6 serve hotdogs or something. There is a

7 variety of these methods.

8 Really any in-depth that has

9 significant training materials or has any kind

10 of testing with it, most contractors are going

11 to be expecting there is going to be some fee

12 attached to that.

13 MR. PORTER: This is Steve Porter

14 with Johnstone Supply. So, we have NATE

15 training that is hosted at stores. You have

16 the business ones and they may have an

17 independent instructor. So, there may be a

18 fee associated with to bring that up and then

19 you sign those folks up, they would come in

20 and get trained. Manufacturers and

21 distributors bear the cost, typically, when it

22 comes in and we are going to teach the class
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1 on the equipment, the installation of the

2 equipment, sometimes there is a fee put on

3 that just because sometimes a fee makes people

4 show up and free doesn't always work so well

5 as much. As it sounds like a great deal, the

6 motivation gets lost to show up for a meeting. 

7 So, sometimes a fee is put on there.

8 But we do incur the cost, as was

9 mentioned, for the facilities that we have and

10 the hosting of the food and all the things

11 that go along with it, and employees that stay

12 after hours because this is typically done in

13 the evening or maybe Saturday. Once and a

14 while it will be lunch and learn but this is

15 all done sometimes during business hours that

16 we do it and usually in shoulder seasons but

17 we can't get that done during the peak of the

18 year.

19 MR. WHITE: And this is Chuck White

20 again. Additionally, with respect to

21 training, and now ACCA, PHCC both have

22 training programs for our members. And in
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1 some localities, our organizations may have

2 some facilities where we do train at our

3 offices but many times it is in conjunction

4 with one of the wholesalers who has a big room

5 and said oh, sure, on Friday afternoon, sure,

6 you can have the room.

7 So, we will either maybe a local

8 PHCC or ACCA person who has some training

9 ability or you get someone in nationally. It

10 might be a business operation. It might be

11 changes in rules. It could be a number of

12 training opportunities. But our associations

13 provide training as well to our members or to

14 non-members, sometimes free, sometimes for a

15 fee but those kind of programs also kind of

16 helps the association recognition and helps

17 drive the membership for the association. So,

18 that is another avenue for training for folks.

19 MR. RAWALD: And I find this all to

20 be of interest for the public outreach point

21 that we are talking about that we will talk

22 more about tomorrow. But I think it is
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1 interesting to kind of see that I want to

2 think about a little bit if there is some

3 opportunity here we can build upon.

4 But I also, I was really interested

5 you folks in the warranty and the records

6 there, but how about sales records? And Gary

7 has hopped on this a couple of times that

8 sales seem to at least indicate something

9 about where things are going, possibly. 

10 Right? So, can we tell anything from that and

11 what kind of records do distributors keep on

12 sales, on the sale side?

13 MR. PORTER: Again, it will be very

14 similar, depending on their ERP system on how

15 they track those. Each one is different. We

16 aren't that many years' removed from getting

17 some consolidated sales records, even ones in

18 our own organization because of all the

19 different ERP systems that they have.

20 So, it will be manual to get them

21 but, obviously, they keep sales records on

22 customers when they sell them a piece of
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1 equipment that goes out on a particular sale.

2 But they could be they can also sell

3 between wholesalers. They can sell -- you

4 know whoever has the equipment and may buy

5 back from a contractor, vice-versa. Depending

6 on how it goes, the sales can go out to a

7 contractor in North Dakota may want to keep a

8 certain number on hand. So, you wouldn't know

9 when those particular units are actually

10 installed.

11 MR. RAWALD: What would that record

12 of sale, as a general rule, consist of? What

13 information would we have from that, as far as

14 about the product? How much detail would we

15 have on the product that is going out? Model

16 number, serial number, SEER value, what would

17 we have, do you think, in the numbers?

18 MR. PORTER: You usually have the

19 associated part number and model number, as a

20 minimum.

21 MR. RAWALD: Okay.

22 MR. PORTER: But again, I can't
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1 speak to everybody's ERP system. I don't know

2 them all. So, we cleaned up over double digit

3 in our organization. We have that many.

4 MR. RAWALD: Well, besides if DOE

5 were to say hey, retain your records of sale

6 for some purpose, is there a business purpose

7 that is already being served on retaining

8 records, so distributors have a reason why

9 they want to retain these records?

10 MR. PORTER: I mean, obviously, to

11 service that customer and to prove that they

12 have a purchase record, just like any other

13 business would.

14 MR. CLARK: This is Gary from

15 Goodman. How long do you think that the DOE

16 would request that the distributor hold on to

17 the information?

18 MR. RAWALD: That is an interesting

19 question -- this is Doug -- and one I

20 certainly haven't thought of. So, in our

21 current practice for models that are

22 manufactured and sold by a manufacturer, we
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1 require the manufacturer to keep those records

2 for two years post-discontinuance. So, if the

3 model is in circulation for 10 years, that is

4 12 years total. So, that is what we do.

5 I would be interested to hear from

6 the distributors what they think longevity of

7 record would be reasonable for them.

8 MR. MELCHI: To circle back to a

9 point earlier, our distributors are selling

10 hundreds of products. And you would

11 essentially be telling them to keep one set of

12 processes for one product that they are

13 selling and another set of systems for

14 everything else, you know, the way they have

15 continued to do it.

16 MR. PORTER: This is Steve Porter, I

17 just want to interrupt. So, hundreds of

18 products means hundreds of suppliers. We

19 price ourselves over a million products. So,

20 just to give you a scope.

21 MR. RAWALD: Right.

22 MR. EISNER: At the distributor
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1 level, are the records all digital or are some

2 of them hard copy?

3 MR. PORTER: Some are hard copy. 

4 Some are digital. Go ahead.

5 MR. WINNINGHAM: This is Dave with

6 Allied. Also, at the distributor level, not

7 all these products line up as a system. You

8 will sell condensers, evaporators, air

9 handlers, furnaces and they are not all lined

10 up one for one because a system --

11 MR. RAWALD: This is Doug, but if we

12 are ostensibly operating under the assumption

13 the condenser has to be at least 14 to be in

14 the region, regardless of what it is paired up

15 with, that would be simpler for us from an

16 enforcement point of view because we could see

17 the condensing unit shouldn't have gotten

18 there in the first place. So, that is

19 something, at least.

20 And so you mentioned that the things

21 you sold. So, I remember Chuck saying a lot

22 of contractors have them delivered to their
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1 address, as opposed to the installation

2 address, from his point of view. Is that a

3 practice you folks see a lot in the

4 distribution world?

5 MR. MELCHI: I would say that and

6 Chuck, you correct me if I am wrong, at least

7 from the distributors that I have talked to,

8 it is very, very rare in a residential setting

9 that a distributor would deliver a product to

10 a home. I think that is probably something

11 you see more in the commercial industry.

12 Steve would have more knowledge.

13 MR. PORTER: Well, I think it isn't

14 a common practice but it happens and it is

15 done by the relationship. If that is the

16 service agreement that they enter in with the

17 contractor, drop it off at this address, I

18 need it dropped off by noon. It is going to

19 be there. So, it is done. I wouldn't say it

20 is common, necessarily, but it happens

21 frequently.

22 MR. WHITE: This is Chuck White with 
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1 PHCC.

2 A lot of it is a scheduling issue

3 because this is a valuable thing, both in

4 terms of a brand new product and it is also

5 valuable in the scrap market for the guy who

6 sees it sitting there and carries to off. And

7 you can smile but it happens a lot.

8 MR. RAWALD: And Chuck, I was

9 smiling in disbelief.

10 MR. WHITE: No, it's true. A chunk

11 of business these days is somebody calls up

12 and says my air conditioning is not working,

13 you go out and there is a hacksaw mark. And

14 I mean it is business but it is sad because a

15 very expensive piece of equipment got sold for

16 $18 in scrap metal.

17 But controlling that and controlling

18 your schedule, no offense to wholesalers love

19 them a lot but I can't always predict when

20 they are going to arrive. And I can't have a

21 technician go to somebody's house and stand

22 around twiddling their thumbs, gee, I wonder
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1 when that unit is going to get here.

2 So, most people arrange it so it

3 gets delivered to your shop, unless you have 

4 track housing or you have got an apartment

5 complex or you have got people there all the

6 time in a secure location, you can unload

7 them.

8 Sometimes, the driver is not

9 physically able to handle the thing by

10 himself. If it is big enough, he may need

11 additional equipment to be able to handle

12 that.

13 So, I am sure there are occasions

14 where I have an arrangement with my ABC

15 wholesaler. I am going to call you and you

16 promise me that you will have it out there

17 within 20 minutes or a half an hour. I am

18 sure there are arrangements like that but I

19 don't think they are very common because that

20 presents a different burden to Mr. Wholesaler. 

21 Most of the time they are going to either get

22 delivered to the shop or the contractor is
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1 going to physically come pick it up. I am on

2 the way to the house and your place is, I am

3 driving right by it, I stop, throw it in the

4 truck and keep going.

5 MR. PORTER: Steve Porter from

6 Johnstone Supply. He is correct. In the

7 morning typically you are going to load up or

8 they have their orders and then the truck will

9 go out and drop those off to the various

10 contractors.

11 MR. WHITE: Well, we like coming to

12 your place because you got all those donuts.

13 MR. PORTER: But there is more of a

14 trending, especially with larger groups that

15 represent a large part of the industry to not

16 come into the shop. They don't want their

17 technicians in. They want them out working.

18 So, like I said earlier, anyway they

19 want us to deliver it, is typically how we get

20 it there. In the rural areas, sometimes where

21 you can drop it off, more secure, not as much

22 crime that exists in different regions of the
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1 country. Some it would be impossible to do. 

2 You would never do it.

3 MR. RAWALD: This is Doug, I have

4 seen a lot more uncertainty on the ones that

5 are picked up versus those that are delivered,

6 just as a pure logistical matter. Right? 

7 So, what is the percentage of things

8 that are picked up from the supplier as

9 opposed to delivered to the contractor or the

10 place where they are going to be installed? 

11 Just a ballpark figure. If you have no idea,

12 you have no idea but I am just kind of curious

13 if we are talking about most things are

14 delivered or most things are picked up or you

15 kind have no idea at all.

16 MR. PORTER: Steve Porter, Johnstone

17 Supply. That can range dramatically from the

18 type of wholesaler that they are and the

19 services they provide and the particular

20 contractors that they service. So, I mean it

21 could be 30 percent, walk up traffic, as we

22 call it, counter traffic could be 30 percent
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1 of your business. It could be 70 or 80

2 percent of your business if the wholesaler

3 doesn't even provide delivery or do some of

4 those things, which can still exist today

5 where they don't even do delivery or even have

6 an outside sales force, they may be closer to

7 100 percent.

8 So, it is a pretty big range.

9 MR. CLARK: This is Gary from

10 Goodman. We have branches. So, we have a

11 fair bit of business in this area also. And

12 it really varies, depending on the time of the

13 year. You know if it is in the spring and

14 dealers aren't that busy yet, you will see a

15 lot more of them coming to see you.

16 When it gets real busy in the

17 summertime, as Chuck mentioned, dealers have

18 long backlogs. You want them on the job. You

19 don't want them away from the job. And so

20 delivery becomes a bigger part of the

21 equation, at least for us. So it really

22 varies depending on the time of year.
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1 MR. RAWALD: So, are there records

2 kept of deliveries that are from sales

3 records?

4 MR. PORTER: I can tell you that we

5 know if we delivered it or not.

6 MR. RAWALD: And you know where it

7 was delivered and you keep track of that?

8 MR. PORTER: Yes, in most cases.

9 MR. RAWALD: I guess what I am

10 driving at is, so in order to investigate

11 things properly, I need to be able to know

12 what I can find out. So, I am just kind of

13 curious of what is out there already from the

14 distributor point of view that if I were to go

15 to the distributor and say I need something

16 from you, you would be able to say oh, I can

17 help you in this way.

18 So, if there are some things that we

19 might have already, then it is already out

20 there at some point or another. Whether they

21 are helpful or not, it is debatable. I mean,

22 some things are more helpful than others, at
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1 least something that we can grab on to. It is

2 a question of whether we want to create new

3 burdens or whether the existing burdens that 

4 or listing things that are already being done

5 that can be taken advantage of.

6 MR. GIBBONS: This is John from

7 Carrier and I spent 12 years working in

8 distribution. All of our invoices, all three

9 of the branches I worked in had bill to and

10 ship to identifiers on it. And if it was pick

11 up, in the ship to box, it said pick up. And

12 I assume that just about everybody is in the

13 same boat. Part of that is a transportation

14 tracker.

15 MR. RAWALD: Well, for all the folks

16 that have raised their hand so far, how long

17 are those records typically kept?

18 MR. CLARK: I'll be honest. I don't

19 know. This is Gary from Goodman. I don't

20 know how long records are kept.

21 MR. HURST. My guess is if the

22 records were retained we would be able to
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1 actually find them. I have walked through

2 enough branches and seen file cabinets. I

3 think the change would have to be if there was

4 a retention policy, then you would have to

5 file it in a manner that you could put your

6 hands on it in a relatively short amount of

7 time. But my guess is a lot of those records

8 are out there but it probably varies from

9 location to location.

10 MR. GIBBONS: Just for example, we

11 had three-part invoices and four-part

12 invoices. The original you had a copy filed

13 by date, by number, and by customer. So, that

14 was 12 years ago, 18 years ago. And to John's

15 point, it depended on how long you kept them

16 at each branch. Some was a year, some was six

17 months, some was until they paid their

18 statement. So, it is all over the place. 

19 Now, it is probably a little bit more clear. 

20 Assuming it is electronic, there may be some

21 that are -- I don't think anybody is in the

22 same boat.
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1 MR. MELCHI: This is Jon from HARDI. 

2 I think that at least from my experience,

3 there is two -- what you are talking about are

4 two distinctly different sets of records. In

5 one hand, we are talking about stuff that may

6 be accessible in an EERP system but there

7 would be nothing really, depending on your

8 EERP, it would have to be pretty sophisticated

9 to be able to tell you where a delivery would

10 have occurred. Most of our guys will have, if

11 they do have trucks, a driver will show up in

12 the morning with the truck may already be

13 loaded, oftentimes. And here is what you are

14 dropping off to this address, this address,

15 and this address. And that may not be,

16 oftentimes likely not any sort of hard or

17 electronic records of the route that those

18 guys took that particular day.

19 I don't know that you would be able

20 to pull up Charlie on X day did this route. 

21 Some sophisticated guys may have it but my

22 experience is you are probably not going to
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1 get anything like that.

2 MR. PORTER: This is Steve Porter

3 from Johnstone Supply. I think that yes, to

4 speak to how every one of them do it and each 

5 EERP system is out there, some could pull up

6 and search on a serial number, some can't. 

7 Some would have to go by you would only be

8 able to pull up records based on the name of

9 the contracting company and then you may have

10 to go in as a manual process to look and see

11 what they actually bought which would be

12 really laborious to do.

13 So, I mean it depends on that EERP

14 system, if they have one, on how you get to

15 that, access that information and then I could

16 speak to all the variations.

17 MR. MELCHI: And I would say that 

18 one of the things that most commonly -- this

19 is Jon from HARDI. Distributors hate and

20 detest EERP changes and changes to that

21 system. It is one of the most time-intensive

22 and expenses processes that a distributor can
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1 undertake. 

2 And as Steve described doing it, I

3 am sure that they caught a lot of flak for all

4 of those changes. 

5 MR. PORTER: Yes.

6 MR. LATTANZI: It's no fun for

7 manufacturers either.

8 MR. HURST: John from Lennox. I

9 just want to point out, this is probably

10 obvious, but the distributors represented are

11 the folks that have spoken on behalf of

12 distributors, with the exception of Charlie,

13 most of them are big distributors. Some

14 distributors have hundreds of branches. Some

15 have one or two. And so, some don't even have

16 really ERP systems, so that needs to be taken

17 into consideration. I think the other point

18 is you mentioned going back to the time that

19 I think the term 12 years was discussed. Is

20 there a statute of limitations on civil

21 penalties? And would that guide the amount of

22 time you needed to retain the records or if
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1 you could comment on that from a legal

2 perspective.

3 MR. RAWALD: Right. So, the general 

4 statute of limitations that may not apply, I

5 need to talk to the lawyer folks here and make

6 sure we are all on the same page before I give

7 an answer off the top. So, generally, we

8 outbreak kind of on a five-year rule, I think

9 by and large. But I don't want to say that

10 that is the bar here.

11 So, I could see some technicality in

12 limiting it in how long you will keep records. 

13 The reason why we have record retention so

14 long in the manufacturer context is because

15 what we are typically looking for is test

16 data, which may be from the time you built the

17 unit the first time. And so, if you built it

18 15 years ago, I still want to be able to get

19 that test data now and look at it.

20 So, from a sales and investigation

21 point of view, I can see why there would be a

22 totally different tap list as far as how long
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1 back I would want to go if I were

2 investigating this. I probably wouldn't want

3 to know about a sale or a delivery ten years'

4 ago. I would want to know about the sales in

5 the last three or four years and kind of look

6 at the pattern and what is going on, I think,

7 thinking just as I am talking to you.

8 So, I think there is a lot of belief

9 or at least inertia towards having a shorter

10 window but I would think a window of some sort

11 of years would be probably the most likely, if

12 we were to adopt to a record retention policy.

13 MR. HURST: And I was referring to

14 sales-based, so thank you.

15 MR. RAWALD: Yes. And just as an

16 aside, John, when we typically ask for sales

17 data, we typically only go back five years. 

18 So, we don't typically go beyond that.

19 The program is still relatively new. 

20 So, I don't know if they are going to do it 15

21 years from now but that is where we kind of

22 keep ourselves standard.
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1 MR. CLARK: This is Gary from

2 Goodman. I'm just trying to link up things. 

3 I mean because of sales data, you know are

4 there any IRS rules that are in place already? 

5 I mean it is just something to look at.

6 MR. RAWALD: No. I only laugh

7 because I have no idea.

8 MR. CLARK: No, I don't either.

9 MR. RAWALD: And I don't practice

10 tax law, so I really would be just opining. 

11 And I guess we could go back in the Department 

12 and talk about that.

13 MR. CLARK: It is just a suggestion. 

14 If it is equivalent to what the IRS already

15 requires, it is probably not an undue burden

16 at that point, is my only point.

17 MR. RAWALD: Right. If the IRS is

18 already requiring the company to keep those

19 records, us asking you to keep it would be no

20 duplicative with you simply saying we already

21 do it. I am very hip to that. So, if you are

22 already keeping it, I think we should support
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1 that.

2 MR. WHITE: This is Chuck White with 

3 a personal note. They have a three-year look

4 back when they come to your business.

5 MR. MELCHI: This is Jon with HARDI. 

6 Another trend that I think we have seen, at

7 least since we have reached new standards when

8 it first exploded, we have just seen a lot of

9 consolidation in our industry in distribution,

10 small distributors may be closing doors or

11 being purchased. New distributors moving in,

12 maybe a plumbing house moving into some sort

13 of HVAC. But just thinking off the top of my

14 head of what happens to the challenges of

15 trying to ascertain records for companies that

16 are no longer in existence.

17 MR. RAWALD: Well that is their own

18 challenges in who is taking all the records

19 and do they exist.

20 Can you give me a ballpark estimate

21 of how many HVAC distributors are out there? 

22 We have heard a number of contractors,
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1 anywhere from 40 to 200,000.

2 MR. PORTER: How many independent

3 distributors?

4 MR. RAWALD: That focus on central

5 air conditioning or have that as one of their

6 characteristics.

7 MR. PORTER: That would be -- I mean

8 we can talk about membership.

9 MR. MELCHI: We have just under 500M

10 wholesale members, but that is also inclusive

11 of Canada, I would have to strike out our fine

12 friends north of the border. But that is not 

13 inclusive of factory and distribution and --

14 MR. PORTER: It is also not

15 inclusive of some major wholesalers. Even in

16 the U.S., there is a lot more and there is --

17 there may be a hardware store out there that

18 sells an air conditioner.

19 MR. McCRUDDEN: And this is Karen. 

20 That number should not mean locations.

21 MR. MELCHI: Yes, right. And

22 probably upwards of tens of thousands.
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1 MR. RAWALD: I am just trying to

2 assess how many companies we are talking

3 about. Not how many locations but how many

4 companies we would affecting with this kind of

5 thing. And my first impression would be also

6 would we want to develop rules that would be

7 different for those companies that are

8 operating in the region, as opposed to outside

9 the region. I mean, so if you are in the

10 north and you only operate in the north, would

11 you have a record retention requirement under

12 the regional standards if you never sell in

13 the region.

14 MR. PORTER: So, Doug, right now you

15 enforce. Right? So, why would you need

16 distributor sales records to enforce? Or are

17 you just seeing what you would need? I am

18 confused about --

19 MR. RAWALD: I'm thinking about

20 investigations. So, from the point of view of

21 -- well, you missed the discussion yesterday

22 of the routine violator. We are trying to
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1 figure out who is doing what and is the

2 contractor who is doing the wrong thing. I

3 have a downstream commerce issue now. I have

4 to see where things went and where they are

5 installed I don't have in the current context.

6 So, now all I care about is

7 something is built by a manufacturer and sold. 

8 So, I want to hear from the manufacturer what 

9 they sold and I want to hear from the

10 distributor what they bought. And that is

11 pretty much the end of the story as far as

12 what the transaction is from there, when I

13 investigate records.

14 But I could see having a need for

15 not only what the distributor buys but who

16 they sold it to so see well, what is going to

17 that guy downstream so I can kind of build a

18 better picture of what is going on here.

19 MR. FENSTROM: So, Doug, this is

20 Gary from the California IOUs. It sounds like

21 at distribution there is a wide variety of the

22 type of records kept and the way they are
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1 kept, depending upon the particular

2 distributor location, et cetera.

3 I realize it is a burden but I

4 suggested yesterday that there might be an

5 opportunity for a tag to go along with the

6 unit that somebody would throw out and send

7 in. And it probably takes a couple of minutes

8 to fill out a tag and send it in.

9 It might have to be done

10 repetitively by different individuals. The

11 manufacturer might need to send in a tag, the

12 distributor, the contractor.

13 MR. HURST: Can you conventionalize

14 further what the tag does, who it goes to, how

15 the information is captured, and where it is

16 going?

17 MR. FENSTROM: In my mind, since

18 this information is probably, to some extent,

19 confidential, this tag would need to go an

20 independent administrator who would keep track

21 of it for the Department of Energy and

22 maintain its confidentiality. But it would
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1 form a database from which some small amount

2 of auditing might be done to satisfy the

3 Department of Energy that a high level of

4 compliance has been achieved.

5 MR. PORTER: So, Gary, this is Steve

6 Porter, Johnstone Supply. So, much like the

7 homeowner fills out today when they fill out

8 warranty?

9 MR. FENSTROM: Except that the

10 contractor would be obligated to fill it out,

11 not the homeowner. The contractor would have

12 to show the address at which a certain serial

13 numbered unit was installed.

14 MR. RAWALD: And Steve, you weren't

15 here yesterday when Gary floated the idea but

16 he actually envisioned three tags, right, one

17 of the manufacturer, one for the distributor,

18 and one for the -- each kind of pull away on

19 the label on the box. So, track the packaged

20 progress.

21 Though, he did admittedly say it is

22 probably one of the most onerous and most
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1 draconian measure he can imagine, but it was

2 something he would forward as an idea for

3 tracking.

4 MR. FENSTROM: So, I would follow up

5 by saying I did say it was probably the most

6 onerous and dreadful outcome. On the other

7 hand, it is uniform, consistent, I might

8 suggest easily done and least time consuming,

9 given the variety of the way things are done

10 in the business.

11 MR. RAWALD: Yes, this is --

12 MR. PORTER: This is Steve Porter

13 from Johnstone Supply. I would just, my

14 caution there is let's not burden people that

15 do it right for the people that do it wrong,

16 for the small percentage.

17 I agree with your comment of onerous

18 to keep three tracks of pieces of paper on a

19 transaction but more to get a contractor to

20 ask for confidential homeowner information and

21 have them do that, versus the homeowner that

22 is buying the equipment to fill out
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1 necessarily warranty and provide the

2 information, should they choose, under their

3 willingness to give up that information, I

4 guess. That is their right.

5 I mean not build processes and

6 create burdens in this already difficult

7 situation that has more costs to consumers and

8 more costs in the process.

9 MR. FENSTROM: This is Gary again. 

10 The homeowner is not responsible for buying a

11 compliant unit. Whoever sells that product to

12 the homeowner and probably also installs it is

13 responsible for making sure the unit is

14 compliant. 

15 And we talk about the burden and the

16 cost. And I would submit to all of you that

17 the burden and cost of filling out a postcard

18 with a serial number and address is not that

19 great.

20 MR. MELCHI: This is Jon with HARDI. 

21 Any such request, though, would undoubtedly

22 have to go through an additional rulemaking
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1 process. And the cost would have to be scoped

2 out by the Office of Management and Budget and

3 would likely take, my guess today, upwards of

4 two or three years to even come to completion.

5 MR. FENSTROM: Well, I don't know

6 that I would agree with that. I think we

7 would have to ask the Department of Energy for

8 its opinion about how this may or may not

9 work. But right at this early point in our

10 discussion and negotiation, I am failing to

11 see an alternative that would be as easy and

12 that we would have a high level of confidence

13 in.

14 MR. MELCHI: This is Jon Melchi with

15 HARDI. I think we are running -- the

16 Department's goal, as I understand it and Doug

17 correct me if I am wrong, is to improve an

18 enforcement scheme deemed effective by you

19 guys. Correct?

20 That does not -- I think my

21 definition of effective may differ from yours. 

22 And I think that there is things that the
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1 industry will be able to do within itself and

2 with the Department's help through public

3 outreach. I thought we made significant

4 progress this morning on the hang tag label

5 that will, in our mind, ensure effective

6 compliance with very minimal changes to what

7 we are currently doing. That alternative

8 described by Gary is a complete change of

9 practice throughout the entire industry; would

10 add significant cost throughout the supply

11 chain; would undoubtedly burden, first and

12 foremost, small businesses across the country

13 and it would not have our support.

14 MR. FENSTROM: Well, this is Gary

15 again. Let me respond to that. The hang tag

16 that we discussed this morning, I feel very

17 good about because it would, indeed, give us

18 a definitive measure of what is complying and

19 what is not. And that is a significant great

20 step forward for our group. 

21 However, it gives us no guarantee of

22 compliance or enforcement whatsoever. The
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1 unit goes out with this tag on it that allows

2 you to determine whether it is compliant. But

3 who then is making that determination and

4 assuring that compliance has been achieved?

5 MR. HURST: This is John Hurst from

6 Lennox. I will represent the cheater. I just

7 ripped off my tag. I go on Google. I look

8 for an address in Minnesota and mail it in. 

9 And it is not a big burden for me to fill that

10 out. It took me about a minute. And it goes

11 in the database. And there are, if the

12 manufacturer does a card, the distributor does

13 a card, and the dealer does a card with the

14 contractor, somebody at the DOE then has to

15 scan in or type in 18 to 21 million records. 

16 So, it is a burden on somebody to do that. 

17 And if I am a cheater, it is pretty easy.

18 So, I don't like the approach

19 because I can see an easy way to beat it.

20 MR. FENSTROM: This is Gary again. 

21 Let me ask two questions. How did we get to

22 18 or 20 million?
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1 MR. HURST: So there is three times

2 each condensing unit and our industry, I

3 believe, sells --

4 MR. PORTER: Seven million.

5 MR. HURST: -- seven million

6 condensing units.

7 MR. FENSTROM: Okay.

8 MR. CLARK: You have to align each

9 component. So, that is more than that.

10 MR. FENSTROM: And I understand

11 that, indeed, there could and probably would

12 be cheaters that would put in false

13 information but when the DOE then audits this

14 on a limited basis to the extent that there is

15 erroneous information, they would find it

16 through audit and could take the appropriate

17 remedial action.

18 MR. PORTER: This is Steve Porter

19 from Johnstone Supply. That record could be

20 as easily audited as the one that the

21 homeowner fills out as a warranty.

22 MR. FENSTROM: That again, it is not
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1 the homeowner's obligation.

2 MR. PORTER: Steve Porter, Johnstone

3 Supply. I realize that it is not the

4 homeowner's responsibility but the records can

5 be checked to see if there is any cheating

6 going on. I'm not saying it is the

7 homeowner's responsibility. I am saying those

8 are records available today that exist that

9 you can see what particular piece of equipment

10 they may have purchased. And that is

11 confidential, the homeowner's information, not

12 mine. That is not the contractor's

13 information either.

14 And I think I encourage you to go

15 work for somebody that we have a fair amount

16 of paper. I can tell you you can look at what

17 it costs to just handle a PO. You can

18 probably Google that and see that it is not a

19 cheap venture every time you touch a piece of

20 paper. There is storage costs. There is

21 hammering through the system. It doesn't

22 touch just one person dropping it in the mail. 
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1 It is a lot more difficult than that.

2 I mean if it is was so inexpensive,

3 I know we would be a lot more profitable.

4 MR. RAWALD: If I could jump in real

5 quick with that. I don't want to get into a

6 full tilt spat over a possible concept and get

7 delayed because it seems like Gary reported an

8 idea that he admits is somewhat on the end

9 spectrum but may have some benefits. And he

10 is correct it may have some benefits and all

11 us folks have a lot of costs.

12 I guess from the Department point of

13 view that I really have to think about what

14 other reason that we can even effectively

15 manage or execute given the amount of

16 information it would be. There is always an

17 opinion that too much information can be

18 immobilizing for us. And I want to make sure

19 that we are being smart and directed.

20 So, I think that from the

21 Department's point of view -- well, we will

22 come back to that. But I think that we have
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1 heard, kind of everyone is silent. So, I

2 don't think we need to debate the value or the

3 efficacy of the tag or the downside of what it

4 would be. So, I certainly think that would be

5 an idea.

6 And Neil had a question about

7 warranties and how often warranties are

8 returned. So, I think that is always

9 eliminating to know if that information could

10 give us some insight into how often things are

11 turned that are required or should be

12 returned. I don't know if you folks have a

13 number on that or --

14 MR. LATTANZI: I don't have a number

15 but I can comment. I think from a warranty

16 perspective, we would have a difficult time

17 discussing our warranty registration rates. 

18 I don't know if that is antitrust but it feels

19 borderline.

20 MR. CLARK: It is specifically

21 spelled out in the anti-trust.

22 MR. LATTANZI: Okay, thank you,
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1 Gary. This is an anti-trust issue. We would

2 have difficulties doing that.

3 MR. RAWALD: No, that is a fair

4 point. I don't want anyone to do anything

5 illegal.

6 MR. CLARK: I figured it was.

7 MR. DORIA: But like a lot of other

8 things that you couldn't share individually,

9 if this is a particularly important piece of

10 information, it might be possible for AHRI to

11 collect it and aggregating a non-hot sale.

12 MR. RAWALD: Right. And I don't

13 mean how many items are returned by warranty. 

14 I meant how many warranty cards are put in the

15 mail and returned you folks.

16 MR. LATTANZI: This is Matt. That is

17 what I understood the question to be. You

18 were intimating what is our registration rate.

19 MR. EISNER: You have to understand

20 that just as you are preparing your

21 regulations, you need to have numbers. Let's

22 just throw out a number. Ten percent or
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1 twenty percent fill out a warranty card. That

2 means you don't have eighty percent of the

3 information.

4 So, is it a good, effective system

5 and is it worth, as a lot of you pointed out,

6 getting the good actors to submit the warranty

7 and not getting the bad guys to submit the

8 warranties.

9 I think you get valuable

10 information. You said 21 million transactions

11 a year. What is the postage alone to send

12 that in? This is something, as somebody has

13 pointed out, you have got paperwork burdens

14 you are going to have explain to the Office of

15 Management and Budget why it is worth the

16 postage alone to get this. Is it going to be

17 an effective tool?

18 So, this kind of data is what is

19 necessary, I think, for you guys to determine

20 whether or not this is an effective program.

21 MR. RAWALD: I think it also kind

22 of, this question really focuses on where to
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1 attack the apple, like where to start biting

2 because it is the point of view of do we want

3 to focus in on the 13 SEER units and where

4 they are being sold because the 14 SEER units

5 can be sold anywhere? So, that now is a

6 scope. And so we don't care about sales in

7 the north because frankly, they are okay in

8 the north. So, we are going to keep looking

9 at these things from that point of view.

10 I guess Elizabeth has had that point

11 for a while.

12 MS. NOLL: I have a clarifying

13 question. Earlier in the warranty

14 conversation, I think it was stated that not

15 all units require warranties. Did I

16 misunderstand?

17 MR. ROCKY: Yes.

18 MS. NOLL: So, all condensing units

19 require a warranty.

20 MR. ROCKY: So, the discussion ends

21 up being that all manufacturers provide

22 standard warranties that do not require
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1 registrations to take effect. Basically,

2 almost all manufacturers have extended

3 warranties to try to help sell policies and

4 things to homeowners that usually require

5 registration to have extended terms or

6 benefits to the consumer so we pay for

7 collecting that information that we keep and

8 use for our own purposes. But there are

9 certain states and locales that do not require 

10 or do not, even the extended warranties, you

11 do not have to have registration. So, all

12 manufacturers have, basically, the same thing,

13 a standard warranty as a legal contract does

14 not require registration as a product.

15 MS. NOLL: Thank you.

16 MR. WHITE: Could I? This is Chuck

17 White. And this is kind of stepping aside

18 here, a little bit of a philosophical moment. 

19 To come here, I went to Chicago to

20 get here. I got in my car and I drove to

21 Chicago. A long the way, the speed limit was

22 60 miles an hour, it is 55 miles an hour, it
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1 was 70 miles an hour, and I chose to go at or

2 near that speed. I didn't have a little booth

3 along the way that I had to validate how much

4 time it took me to give five miles. And if

5 the Indiana State Police or the Illinois State

6 Police chose to audit me and give or not give

7 me a ticket, that is their issue. We have

8 sort of the same thing here. We are trying to

9 help with an enforcement of a rule and we seem

10 to be all caught up with trying to determine

11 what it is we are looking for by making lists

12 of what we are not looking for. And I find

13 that frustrating.

14 We are not looking for all the

15 contractors that are working or all the

16 distributors that are working and performing

17 and doing the right thing. What we are

18 looking for is the wrong thing. And I think

19 the discussion needs, philosophically to me,

20 how do we find the wrong thing and finding the

21 wrong thing isn't by sorting out everything

22 that is right. Because even if I make a list
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1 of everything that is right, I still don't

2 know who is wrong because I didn't put him on

3 the list.

4 MR. FENSTROM: So Chuck raised --

5 this is Gary. Chuck raises an excellent

6 point. To follow on with his highway

7 ideology, all the cars on the highway are

8 observable. And to the extent that the

9 highway patrol may or may not be looking or

10 may or may not catch everybody, that is an

11 open question. But these air conditioning

12 units, many of them, unless we can find a way

13 in this room, many of them will not be

14 observable, period.

15 MR. DORIA: This is Jordan, if I

16 could jump in. I mean I disagree that it is

17 not questionable. We know the majority of

18 stealers don't get caught. That is actually

19 a reality. So, that would be the first point. 

20 But more generally, I mean I think that the

21 notion is what information streams do we need

22 to have access to to provide some level of due
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1 diligence that could support an investigation

2 and on what basis. I think investigating a

3 number of people where there is no sort of

4 indication of wrong-doing in an audit approach

5 that is not well targeted, potentially,

6 through information streams that are very

7 difficult to sift through without being

8 particularly effective.

9 As Doug mentioned yesterday, the IRS

10 has a very sophisticated approach and I am

11 sure all kinds of algorithms that they use to 

12 flag returns that they think they should

13 investigate further. 

14 One of the things that we talked

15 about yesterday was various industry actors,

16 at a minimum, perhaps others, but certainly

17 industry actors, providing some kind of

18 notification about some perceived potential

19 wrong-doing, perceived potential violation

20 that could, in turn, go to some party likely

21 the Department to further investigation. To

22 me, that seems like some way to bridge the gap
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1 here, where there is some sort of indication

2 by parties acknowledging that there may be

3 something going on and an indication to the

4 parties that are actually capable of doing

5 investigation that an investigation is, in

6 fact, warranted. And I think that is less

7 likely to catch a lot of good actors in the

8 net, than an approach that is far less

9 targeted.

10 MR. MELCHI: This is Jon Melchi with

11 HARDI. And I know I wore you out yesterday,

12 Doug, but for me, we continue to talk about

13 providing new tools to or providing DOE tools

14 to verify a bad actor in the field but we have

15 not heard from DOE how you would even do so. 

16 The violation here is an illegal installation

17 of a non-compliant product. And we have not

18 heard from DOE exactly what authority they

19 have to verify that that has been done, who

20 does the verification, and until we know those

21 things, this is a really challenging -- you

22 are asking us to decide what information to
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1 provide you when we are not exactly sure how

2 you are going to be verifying these things in

3 the first place and can, thus, relate what

4 information would be most helpful to you.

5 I mean, and this goes to you know

6 reporting bad actors but if Charlie illegally

7 installs a 13 SEER product in Virginia, how is

8 that verified by DOE? Who does that?

9 MS. NOLL: I think that is what we

10 are all here to work on.

11 MR. MELCHI: Well, I get that,

12 except I asked it yesterday and we still don't

13 know.

14 MR. BALLO: This is Tim with

15 Earthjustice. I guess I have been thinking

16 about this and there seems to be three

17 possibilities. One is a code official. That

18 seems like a pretty remote possibility because

19 the value solutions aren't going help on this

20 and no one is ever going to know about it.

21 The second possibility is a

22 subsequent contractor or subcontractor comes
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1 into that building and sees that there is a

2 unit installed there that doesn't belong

3 there. That seems like a high likelihood that

4 if the person takes a look at it, they are

5 going to know what to look for and they are

6 going to find out about it. The third

7 possibility -- but there is a small universe

8 of people where that is going to happen

9 because you may not get another contractor.

10 The third possibility is the

11 homeowner looks at their information at some

12 point and says wait a minute, this isn't what

13 I thought I got. Now, that seems to me to be

14 the one that we have really got to maximize

15 because that is the one where there is a whole

16 lot of room for improvement. And that is, I

17 think, where this process starts. From there,

18 it has got to go, though, to the installers

19 act is very clear. Did you install the right

20 product or not? But for everyone up the

21 chain, it is what did you know, just a totally

22 different question. I think that is where
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1 this information has to come from.

2 MR. MELCHI: This is Jon with HARDI.

3 Okay, so your first two scenarios,

4 building code or another contractor. Does the

5 DOE have the authority? So, Contractor B

6 reports and says there is an illegal

7 installation by XYZ and Sons and I want to

8 report it. Does the Department of Energy have

9 the authority to go to that person's house and

10 verify that that is an illegal installation? 

11 And I would argue that you would have a tough

12 time saying it does.

13 And if you cannot do that, then we

14 have got a problem. It is just a question. 

15 Do you have that authority?

16 MR. RAWALD: I'm having a hard time

17 envisioning what you are saying in that you

18 seem like you are asking me whether the

19 Department has some sort of criminal search

20 and seizure authority to go in someone's house

21 and examine their air conditioning unit.

22 MR. MELCHI: Right. How do you
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1 prove it?

2 MR. RAWALD: Right. And I think you

3 are coming from the position of an unwilling

4 homeowner that won't let me in. That is what

5 you are presuming here. You are presuming

6 that the person will not want to cooperate

7 with somebody --

8 MR. MELCHI: Well, I --

9 MR. RAWALD: Jon, let me talk,

10 please. Okay? I've been very respectful.

11 So, I think that what we need to

12 look at here is the fact that we are not going

13 to presume that the homeowner is now

14 cooperative. I am going to presume that if I

15 go to someone and say hey, we have suspicion

16 that you may have an air conditioner that is

17 not compliant, can I take a look at it, they

18 are going to say yes, I want to know if I got

19 taken advantage by a contractor, please let me

20 in. That is how I approach this matter.

21 So, I understand your repeated

22 question. I gave you the answer yesterday
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1 which is I don't know the answer but I think

2 as Elizabeth pointed out, this group is

3 working very hard to come up with a way for us

4 to approach the thing and I want to be

5 constructive in that manner.

6 MR. PORTER: Doug, Steve Porter from

7 Johnstone Supply. I appreciate that. I think

8 we also want to come from a perspective that

9 if we get the right information out there,

10 that we are going to get 99 percent of the way

11 there. I think you need to only look to the

12 R-22 units that nobody wanted to do as an

13 industry anyway on the dry side. And we

14 really didn't want -- and that is getting in

15 the single digit on sales for the nation now. 

16 And it is probably done in large part in

17 coastal areas still. And you know everybody

18 wants to do the right thing in this.

19 And I think the give on even the

20 hang tag discussions we have had really shows

21 that. It is really making a communication

22 correctly. And I think we take care of 99
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1 percent of our issues here. 

2 There is no way you are going to

3 just bill everything for the exception and

4 then not have something yes, that is somebody

5 going to cheat out there and how big is really

6 the problem. Right? And I think you see

7 where the shipping and the manufacturing

8 numbers are now. I don't see where it is any

9 different than what you had today when you

10 went from 10 or 13 SEER that you were able to

11 see that people are doing 13 SEER units.

12 MR. EISNER: Would everybody around

13 the table agree that this problem area is

14 relatively small, a limited number of

15 products, as you pointed out, in a limited

16 area of the country?

17 If it is, is that an area to focus

18 on? Does anybody disagree with that?

19 MR. FENSTROM: This is Gary for the

20 California IOUs. It is a limited part of the

21 country and the problem, provided we all do

22 the good things that we have talked about to
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1 assure easy identification, is probably going

2 to be small. But that doesn't relieve the

3 Department of Energy of its obligation to do

4 something to determine compliance and take

5 enforcement action where it sees

6 noncompliance.

7 So, for other products that the

8 Department regulates, water heaters, you know

9 you can go down to Sears, Home Depot, the

10 plumbing supply wholesaler and you can see

11 whether or not a product sitting there is

12 compliant. You go to the manufacturer's

13 facility and see whether what they are

14 building is compliant or not. 

15 But with this regional standards

16 residential air conditioning issue, you can't

17 do it that simply. You have to go to the

18 house and find out whether the house in

19 California or Georgia has the compliant

20 equipment. 

21 It isn't sufficient to go to the

22 distributor or the manufacturer because for a
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1 lot of reasons the manufacturer doesn't know

2 where the product is going. The distributor

3 may or may not keep records, probably largely

4 in all different ways. I don't believe we can

5 do it definitively and with confidence.

6 MR. SURRENA: I guess what I am

7 going to tell you is that is the far end of

8 all we are talking about. If the homeowner

9 says I don't want to let you in, would you be

10 able to get a search warrant to get into their

11 house? That is the only way you can get in is

12 with a search warrant. 

13 I have had search warrants issued

14 for me, not against me. I am the one who had

15 to go to a judge and explain why I needed a

16 search warrant to go into someone's house who

17 wouldn't let me in. And the last thing the

18 Department of Energy needs is PR on the six

19 o'clock news that they have gotten search

20 warrants to go into Mr. Smith's house to look

21 at his air conditioning unit.

22 I understand that it is at the end
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1 of the spectrum but if the homeowner is the

2 one who sends you a complaint, he is glad to

3 see you. If it is the contractor turning in

4 his fellow contractor, somebody who was at the

5 sales counter and did that, they are probably

6 afraid of that homeowner and they don't want

7 you in their house.

8 We are chasing the tail of the dog

9 here for something for one thing and it is not

10 very many in the scheme of things that would

11 be a violation. Their general compliance

12 would be able to give them to you from the

13 distributors and the manufacturers on well

14 over 90 percent of the products that are

15 installed.

16 But you keep going to this

17 infinitesimal thing to the point where you are

18 going to have to go into someone's house? 

19 Where are you going? I'd being retiring at

20 that point because I wouldn't want to be the

21 first one to have to knock on your door or go

22 tell a judge why I want a search warrant.
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1 MR. HURST: So, commenting on that,

2 I would like us to develop an approach that

3 doesn't require us to ever have to go to a

4 judge to get a search warrant.

5 MR. SURRENA: Here, here.

6 MR. HURST: That is sort of, you

7 know I want to comment on what Gary said

8 because Gary, I don't think you have a bad

9 idea. I just don't think that the non10 compliers are going to comply. I think we

11 could use the repository of information from

12 the people that did the right thing. And

13 maybe the gaps in that are where you go

14 fishing for your problem children.

15 I also want to comment on what Tim

16 said because there are a couple of other

17 opportunities to identify cheating. I think

18 as a manufacturer and as a distributor as

19 well, we will start to see things. And if we

20 see anomalies, then we have to figure out, do

21 we report those or what is our process for

22 dealing with those? And I think as a
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1 manufacturer and as a distributor, we are

2 willing to help enforce the policy because we

3 think that is the right thing to do. It is

4 the law of the land.

5 There are a couple of other

6 opportunities to spot malfeasance and that is

7 at the dining room table when you are looking

8 at the quote that the dealer just gave you or

9 the contractor and the homeowner slides across

10 two competing offers. And one of those

11 doesn't look like the others because it is

12 cheaper and it is the wrong equipment. So, I

13 think that is an opportunity.

14 And also, having moved a number of

15 times in my lifetime, I think you will also

16 see it through home inspections. And if the

17 home inspector, which they are paid to look

18 for issues, if a home inspector comes in and

19 I am trying to transact the sale of my house

20 and I have equipment that was put in six

21 months' ago because I am getting ready to sell

22 the house and it is not compliant with
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1 regional standard, I think it is another

2 opportunity where the homeowner would be

3 informed of having noncompliant product.

4 MR. EISNER: Is your hand up, Karen?

5 MS. MEYERS: Yes. This is Karen

6 with Rheem. And I think we should maybe kind

7 of shift the conversation a little bit. And

8 I think an effective enforcement plan is going

9 to be a plan where it is going to be fairly

10 easy for someone to report someone suspected

11 of installing illegal systems. 

12 So, the only people who are really

13 going to know that is the contractor in the

14 area. If he is losing business to Joe's

15 Heating and Air constantly, he is probably

16 going to figure out that you know I have lost

17 this bid three times in a row to this guy. I

18 suspect that this guy. And then he goes and

19 you know, because contractors want to know

20 whether they are going to win the bid or not.

21 So, I think we develop a system and

22 I don't think serial numbers are the answer. 
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1 I think you say if DOE, if you get two reports

2 on Joe's Heating and Air in Birmingham,

3 Alabama, two reports on him perhaps installing

4 illegal systems, then you can pick up the

5 phone and call the guy and say hey, I have

6 gotten a couple of reports that you are

7 selling illegal systems or installing illegal

8 systems in that area. And that is when you

9 start the conversation and that is when you

10 start he has either got to produce documents,

11 he has got to do that, he has got to send in

12 the model numbers and serial numbers of what

13 he installed in that location or in his last

14 15 locations. And then you can decide whether

15 that was, you know, is there cause to take

16 action against this guy or not.

17 But the marketplace is going to

18 enforce this. I mean a contractor in the

19 south is not going to let somebody start

20 taking all his business.

21 So, I mean that is how manufacturers

22 do it. If I have got a fellow manufacturer
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1 who is constantly undercutting my price and I

2 bring his equipment in. I test my

3 competitor's equipment all the time. Now,

4 they are all pretty good actors, but in other

5 industries that Rheem is involved in other

6 than HVAC, it is not always that case. So,

7 there is an area, whether it is an AHRI

8 program or not, sometimes it is not an AHRI

9 program, then we would take action to inform

10 the DOE, if it is a regulated product, that we

11 suspect that this person is selling

12 noncompliant equipment.

13 So, I think if we get this issue so

14 only the right equipment can get sold in the

15 area and then we make it easy for Bob's

16 Heating and Air to call and say Joe's Heating

17 and Air is not playing by the rules and there

18 is a form they fill out, it is not even model 

19 number and serial number specific. It is you

20 know I have got undercut four times on this

21 guy. I have been by his jobs. I have looked

22 at the hang tag. I think there is a problem. 
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1 DOE, you need to give this guy a call and ask

2 for his records for the last three months.

3 MR. FENSTROM: So, Doug, this is

4 Gary for the California IOUs again. We have

5 had a number of approaches suggested by

6 different parties. And I think it would help

7 us in a process sense to kind of write down

8 what these approaches are. 

9 One suggested approach is basically

10 let's make it real, real clear what qualifies

11 and what doesn't through a hang tag. And

12 largely, contractors are going to be compliant

13 and there won't be a problem and self14 reporting or peer reporting is one avenue to

15 assure a degree of compliance, ranging all the

16 way to my suggestion, which others have

17 pointed out is taking out a sledge hammer to

18 kill the ant. And it might helpful for the

19 group to write down this range of approaches,

20 what may or may not be done at the

21 manufacturer level that may or may not be done

22 at the distributor level, what may or may not
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1 be done at the contractor level, all the way

2 down to what may or may not be done at the

3 homeowner's residence or by the homeowner.

4 MR. RAWALD: I agree that is a sound

5 idea.

6 MR. SACHS: This is Harvey and I

7 would like to test that with one slight

8 modification. I think I have heard consensus

9 in our sense, there might be abstention or

10 two, but general acceptance on how to identify

11 SEER 14 and what labeling requirements we need

12 for that.

13 So the question really evolves down

14 to what additional requirements we have to

15 give everyone assurance that the field is

16 level and largely effective.

17 MR. DORIA: This is Jordan Doria,

18 Ingersoll Rand. To build on that point, I

19 think that is a fair characterization of the

20 90 percent. Maybe the counsel that our

21 thinking, at least as a company, and I will

22 let the other OEMs chime in, the 14 SEER is at
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1 the low end of the hang tag, supports a

2 particular compliance approach that we think

3 could be enhanced with some of these other

4 methods that we have talked about.

5 The method Gary described, you don't

6 need to have 14 SEER at the low end of the

7 hang tag. If you have that granular

8 information, you would not need that.

9 So, I would say for us, as a

10 company, at least, our willingness to go down

11 that road is definitely predicated on the

12 overall burden associated with the compliance

13 regime we are talking about.

14 So, the low end of the hang tag

15 approach I think really only fits in with a

16 certain set of enforcement frameworks that we

17 are talking about but does not fit in with the

18 one that Gary had described.

19 MR. FENSTROM: I'm not sure I

20 completely agree but I really want to get

21 myself out of the whir by standing on whatever

22 foundation, whatever rocks are in there. And
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1 I certainly feel agreement, with abstentions

2 as noted, that this could be the labeling

3 approach could be important and that we all

4 have work to do to get FTC onboard with that.

5 MR. RAWALD: This is Doug. I just

6 want to back to this hang tag issue and with

7 FTC. It seems to me that if the Department

8 announces, which is has not, that the low end

9 of the label is the 14 SEER and that should be

10 the low end of the spectrum, the hang tag, as

11 currently designed, would still be effective

12 because it was the rating was at 14. So,

13 people would still be able to look at it and

14 say it is wrong. So, we could deal with what

15 we have now.

16 Now, we could ask FTC to change it

17 but it wouldn't be necessary to change it for

18 us to rely upon the evidence of the label as

19 drafted. Because we would all know if the

20 label has below 14 on it, it shouldn't be in

21 the south.

22 MR. EISNER: Harvey.
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1 MR. SACHS: I, personally, would be

2 uncomfortable having associates who deal with

3 labels and human factors and things, and

4 recognizing how little we know, as opposed to

5 marketers in the industry. I would not be

6 comfortable, unless that were coupled with a

7 commitment to seek early change to clarify

8 that.

9 MR. RAWALD: I don't think anyone

10 here disagrees that they would like the label

11 changed. I don't think it would need to be

12 changed for the effectiveness of the

13 enforcement program to kick in.

14 MR. SACHS: I think it is trying to

15 sharpen the knife.

16 MR. RAWALD: I agree.

17 MR. LATTANZI: Can I comment on

18 that, Doug? This is Matt from NORDYNE.

19 I understand exactly what Harvey is

20 saying and I do agree that the label can be

21 used as is and be effective, pending DOE

22 clarification of the guidance. But I would
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1 point out FTC is going to have to go into a

2 rulemaking anyway and adjust what they have

3 that is out there because it is incorrect on

4 the furnaces. So, anything that we come up

5 with, if we have a recommendation for them to

6 change it, that may not happen as fast as we

7 like but it is going to happen because they

8 have to adjust it anyway.

9 MR. EISNER: I think there was a

10 suggestion, I think, from Gary that we talk

11 about the range of things people have been

12 talking about. And there is another way we

13 can use a range of things like this and it

14 doesn't have to be all of them. It can be

15 just some of them. And that is for DOE to say

16 here is what we are going to do to increase

17 compliance. Not so much to take more

18 enforcement action but to increase compliance. 

19 One would be if we found out that we could

20 improve the label in a way that would make it

21 less likely that some people would put their

22 own equipment in.
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1 Another thing might be, and I was

2 impressed with this idea from Tim about people

3 going, government officials, local government

4 officials going into a house because of a

5 permit issue, whatever it might be. I know in

6 Fairfax County I have been told that if they

7 go into your house to inspect an installation

8 of a gas furnace, they might also note that

9 you don't have smoke detectors where you

10 should have smoke detectors under new code

11 requirements and they will strongly suggest

12 you put them in. If the limited states that

13 you are worried about that the people who do

14 this would be willing to have some kind of

15 communication with DOE on the extent that the

16 problem you are noticing, you get two things. 

17 One, you get some data that may or may not be

18 useable by DOE in terms of going into the

19 house but it will start to tell you whether or

20 not the problem is there in the first place. 

21 All right, so some county in LA says

22 we did 500 permit inspections this year where
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1 new furnaces that have been put in and we

2 found two that were incorrect. And the owner

3 didn't know about it and is willing to work

4 with you to address the person that put it in. 

5 They can then say whether over a period of

6 time the situation is improving. And if it is

7 improving, they need not do anything else. 

8 But if it is not and they don't comply with

9 the statute, it would be agreed in the rule

10 that they would have to start upping the ante. 

11 They would have to start tightening some of

12 the requirements. And that is when they can

13 go to a second stage. It may be, as some of

14 you suggest that there is almost no problem

15 here. It may be that the problem is so bad

16 DOE wouldn't have the resources to enforce it

17 anyway. They wouldn't be able to go knock on

18 all the homeowners' doors. They would only be

19 able to go to a percentage of them.

20 Part of an effective enforcement

21 program is that when you do find the violator,

22 you do go into the house and you find that it
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1 was wrong, and you do get the person who put

2 it in there knowingly, you get a lot of

3 publicity for the action taken against that

4 person. That, itself, can be more effective

5 than taking another 50 enforcement actions,

6 getting the word out that they mean it and you

7 are going to be penalized.

8 So, it is time for a break. Let's

9 come back and talk about different approaches

10 and what we want to start putting up on the

11 board.

12 MR. FENSTROM: So Neil, this is

13 Gary. Before the break, I would just like to

14 add one thing. My concern is that DOE have

15 the capacity to determine whether compliance 

16 and any individual inspiration has been

17 achieved or not.

18 I am not addressing what may or may

19 not be done with penalties or enforcement or

20 otherwise. I don't think the objective here

21 is to be highly punitive. The objective is to

22 assure compliance and take corrective action. 
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1 But at a minimum, there has to be the capacity

2 to determine whether or not compliance has

3 been achieved.

4 MR. EISNER: But that is, number

5 one, there may be no way to ever do that

6 perfectly. And it may be that the most

7 effective way, for example, is to have a

8 variety of techniques that get people to

9 report what they know.

10 A report from a government official

11 who has the authority to grant or deny

12 completion of a permit requirement that there

13 is an illegal air conditioning unit in the

14 house is probably more valuable than getting

15 an anonymous letter saying I think John Jones

16 installed an illegal air conditioning system.

17 MR. SACHS: The problem with that is

18 the area of concern is the southeast, which

19 for many people, I grew up in Georgia, would

20 be regarded as the area of the country for

21 which building codes are least likely to be

22 enforced. This is the attraction for the
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1 mechanism of house inspectors and things like

2 that. I don't think anyone in this room would

3 be prepared to jump up and say that building

4 inspectors for that region are going to be in

5 significant compliance.

6 MR. EISNER: And that is a very

7 important point by building inspectors, you

8 mean the person who is going out to check on

9 the permit.

10 MR. SACHS: Yes.

11 MR. EISNER: Okay, that is an

12 important point then. If the area where the

13 problem we think is the greatest, it is not

14 going to work, then we have got to think of

15 other ideas.

16 MR. SURRENA: Code enforcement, if

17 the codes official is in the house for another

18 reason, he needs probable cause to go and look

19 for serial numbers on an air conditioning

20 unit. If it is something that the smoke 

21 alarm is missing, whether we do, a huge

22 building specifically open up and take the
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1 cover off of the air conditioning unit, that

2 is against the law. That is information he

3 will not directly be able to see. He is going

4 to not record it.

5 But the main thing is that if

6 someone is getting a permit to put in this air

7 conditioning system, the plan had to be

8 reviewed before they put it in. The codes

9 official is aware, which we all are, now that

10 the 2009, 2012, 2015 ECC of what the

11 requirements are, they are going to look at

12 that plan review and you can't put that coil

13 with that unit. You have got to come back

14 with something better until it complies.

15 Once it gets compliance when he goes

16 into inspect it, if it is not what was on the

17 drawings, he is going to make them change it 

18 right then and there.

19 So, those are the people who are

20 trying to do it right who get the permits. It

21 is the ones who on Saturday afternoon, they

22 are the ones that you are going to try and
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1 find. You won't get them through a permit

2 process or through a visual walkthrough

3 inspection in the house. We have property

4 maintenance inspections. I could look at

5 general things for life safety but I couldn't

6 go beyond that. And air conditioning, it is

7 questionable. It is not considered a life

8 safety issue at this point.

9 MR. EISNER: Okay and if it doesn't

10 work, it doesn't work. I'm not saying --

11 MR. SURRENA: But the health

12 inspector who does it before a sale or a

13 transaction, they can look at anything and

14 everything they want.

15 MR. EISNER: But what I am saying

16 then is what will work, starting with the

17 easiest and the hardest.

18 MR. SURRENA: I agree with that.

19 MR. EISNER: And if that doesn't

20 work, we have to maintain equipment. That

21 doesn't mean you have to hire a technical

22 contractor to do it. But if a credible
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1 contractor walks in there and knows,

2 especially if he knows he can be penalized for

3 working on an illegal system, that may be a

4 source of information. Again, they may have

5 to be anonymous. They may not want to have

6 problems with customers. This is what we

7 ought to start talking about, which will work,

8 which won't work, which is easy, which is

9 hard.

10 MR. LATTANZI: Neil, Mat Lattanzi

11 with NORDYNE. Just to expand on your comment

12 relative to when a violation is found and

13 going public with it and it is a big message,

14 this is the August 11th, this month's copy of

15 the news. I will show you guys the headline, 

16 "Naming and Shaming." There is a prime

17 example of what can happen. And you have got

18 to wonder how big of a deterrent is something

19 like that in the news?

20 MR. SACHS: Well, I would have to

21 inquire of AHRI.

22 MR. EISNER: All right, let's get
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1 back to it. Thanks, Matt.

2 (Whereupon, the above-entitled

3 matter went off the record at 2:37

4 a.m. and resumed at 2:57 a.m.)

5 MR. EISNER: Doug has got something

6 to talk about.

7 MR. RAWALD: Pending issuance of an

8 official guidance document of some sort, what

9 I can say is that DOE interprets the regional

10 standard to require the least efficient rating

11 combination for a specified model of

12 condensing unit must be 14 in the regions

13 where those minimum standard is 14. Any model 

14 that has a certified combination of below the

15 regional standard cannot be installed in the

16 region.

17 MR. BALLO: John, I have a question. 

18 What about EDR? Does the same go for ER?

19 MR. RAWALD: Right, so the

20 translated would be the ER standard is the

21 same story. But the question really was, I

22 asked only about CR but the analysis would be
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1 the same.

2 MS. MEYERS: So, are you going to

3 put that in writing, just so that I can share

4 it with my sales team?

5 MR. RAWALD: We will put something

6 out in writing and it will be in draft and we

7 will comment on it. But what I said was DOE

8 interprets the regional standard to require

9 that the least efficient rating combination

10 for a specific specified model condensing unit

11 must be 14 in the regions where the 14 SEER

12 minimum applies. Any model that has a

13 certified combination that is below the

14 regional standard cannot be installed in the

15 region.

16 Does that answer your question?

17 MR. PORTER: This a good time to

18 drink.

19 (Simultaneous speaking.)

20 MR. EISNER: Okay, we have a list

21 here that some of NYLAND's people put up on

22 the screen, Laura and Doug were doing this, of
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1 all the different ideas they have heard, even

2 one that I mumbled through about putting chips

3 in the computer that be read by roadside car,

4 like gas meters. And it would automatically

5 tell you as you drove down the street this

6 house has an illegal system in it.

7 Is it doable?

8 MR. MELCHI: Say what?

9 (Simultaneous speaking.)

10 MR. RAWALD: Less side talk. She is

11 not getting any of this.

12 MR. SACHS: I hope you will have

13 better luck with that than I had in just

14 trying to get a standard protocol for

15 interactive water heaters.

16 MR. EISNER: But we can get to that

17 in time. I want to start at the top and just

18 go through the list slowly. And raise your

19 hand if you see something that you think --

20 why don't you go through it once slowly, and

21 then let's talk about if anything is missing.

22 Okay, anybody saw -- are there
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1 things that should added or things that are

2 absolutely impossible to work that should be

3 taken off?

4 MR. SACHS: Now, these are not

5 exclusive alternatives.

6 MR. EISNER: No, and again, you

7 could suggest that the enforcement rules say

8 that you can use all of these and any others

9 they find appropriate, or something like that,

10 if you wanted.

11 MR. RAWALD: Yes, I guess -- this is

12 Doug. Just from my point of view, having the

13 list on the board, it is not exclusive nor

14 exhaustive. I mean we can certainly add more. 

15 This is just kind of the front poll of things

16 that Laura and I heard banded about in

17 different context of the last four and a half

18 days.

19 MR. EISNER: And let's say you can

20 do different things with these. Let's assume

21 all of these are good. You can say let's take

22 what we think are the five best. And if they
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1 don't lower the numbers, then we keep

2 ratcheting it up and more and more

3 requirements get imposed on the process.

4 MR. HURST: Just, and Karen is going

5 to kill me for even saying this, but in the

6 spirit of crazy ideas, during the break I made

7 a joke and I said why don't we just put a

8 luminescent 14 on the condensing unit. 

9 However, the DOE label could potentially be

10 luminescent for a 14 SEER product or a 13 SEER

11 product so you can physically drive down the

12 street, shine a flashlight on it at night and

13 tell whether a unit is compliant or not. The

14 FTC label, I'm sorry.

15 MS. MEYERS: Just make it a

16 different color.

17 MR. MELCHI: This is Jon with HARDI. 

18 I get where you are going with that but what

19 if I had the unit installed December 31st of

20 this year and it didn't have the label on it?

21 MR. HURST: It's compliant.

22 MR. MELCHI: Okay, so only 13s
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1 manufactured after --

2 MR. HURST: I haven't thought it

3 through. I know it is a crazy idea but if

4 there is a way to identify the unit easily out

5 of the box, it could be a relatively easy

6 solution.

7 MR. RAWALD: And this is Doug. Just

8 thinking from a criminal background, there are

9 some issues about whether we would actually be

10 searching someone's house by doing something

11 like that, if it were a homeowner.

12 MR. CLARK: I find it difficult,

13 from my experience, of crawling out of my

14 bedroom window when I was a kid and stepping

15 on the air conditioner. It was in the back of

16 the house. 

17 MR. HURST: You're not going to

18 catch everybody.

19 (Simultaneous speaking.)

20 MR. EISNER: Any others?

21 MR. ELLIS: This is Ray from Lincoln

22 Electric. On the bottom -- sorry Neil, the
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1 tracking chip on the units. I don't know if

2 you mean that they give off RF or not but you

3 can ask the colleague from California,

4 anything treated with RF is really sensitive

5 and people will fight that like crazy. You

6 will have lawsuits that will not quit. If we

7 had anything like that that you could read

8 from a mobile device.

9 MR. EISNER: That obviously is a

10 problem.

11 MR. ELLIS: It is a problem.

12 MR. EISNER: And I will point out

13 that car owners have console units have a

14 device in their engine that can do not

15 necessarily remotely but you can have an

16 accident, somebody could pull it and read it.

17 MR. FENSTROM: So, this is Gary for

18 the California IOUs. These chips we are

19 talking about are RFID chips. So, they

20 respond to a radio transmitter such as to

21 provide some feedback but they are not

22 continuously transmitting like a smart meter
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1 might be and those other kinds of products

2 that often raise consumer concerns.

3 MR. EISNER: So, you are saying

4 there might not be a problem in California if

5 you were reading them with a piece of

6 equipment.

7 MR. FENSTROM: If people thoroughly

8 understood how RFID chips work, they respond. 

9 They don't transmit all the time.

10 We have FasTrak in our cars. They

11 are RFID response devices. And they are not

12 continuously transmitting. They respond when

13 they go underneath the sensor on the highway.

14 MR. EISNER: And does anybody have

15 the kind of chip that you could put in? Does

16 anybody have any idea of what the cost would

17 be?

18 MR. SACHS: Fifty cents.

19 MR. EISNER: Fifty cents? 

20 MR. FENSTROM: Well, that might be

21 the manufacturing cost of the product of the

22 chip but by the time it got into an air
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1 conditioner, I would have to believe that it

2 would be more expensive than that.

3 MR. CLARK: Well, this is Gary from

4 Goodman Global.

5 Having worked with these chips a

6 little bit, one of the issues that you run

7 into is you have to put it outside the unit. 

8 You can't put it inside the unit because a

9 sheet metal box would certainly block the

10 interrogation. Once you start having to put

11 it on the outside of the box, then it has to

12 be waterproof and it is not fifty cents. And

13 if you want it to last for any period of time,

14 that is going to be significantly more than

15 fifty cents.

16 MR. SACHS: This is Harvey. I

17 certainly didn't mean to endorse the idea of

18 RFID chips. I think they are coming up on a

19 lot of other ways that people will find useful

20 for identifying their products, less

21 expensive.

22 MR. CLARK: This Gary again. Back
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1 to John Hurst's idea of a different color

2 label. Is that something that we want to not

3 think about at all?

4 MR. McCRUDDEN: This is Charlie. 

5 Can you change the color of the energy guide

6 label?

7 MR. CLARK: There would be a

8 rulemaking and all that.

9 MR. BALLO: In general, FTC has been 

10 nervous, I would say about making the labels

11 different from each other because they want

12 that sort of grand identity to the energy

13 guide label. So, I think they would have

14 something to say about that. 

15 MR. RAWALD: This is Doug, to

16 follow-up on Tim's point. Colors cost money.

17 So, there is that. So, I think part of

18 concern with the current label is that it does

19 have varying shades of color on a map to

20 indicate what regions. And that is going to

21 end up being more expensive than a label

22 without a map. And so that is another
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1 consideration and another reason why I think

2 FTC would probably be more willing to remove

3 the map if we were to come back and say just

4 to have the possibility that it winds up

5 saving them some cost. But I do know that

6 color costs money.

7 MR. MELCHI: Jon with HRDI. As

8 Matt, at the end of the last session held up

9 his copy of "Enquirer," as Harvey called it,

10 what it does show is that EPA has had some

11 success with stings of purchasing a still pre12 charged R-22 equipment. That is not supposed

13 to be sold into commerce. This is something

14 that the DOE hypothetically could set up shop 

15 and use to conduct a sting to see if somebody

16 would, indeed, if you have gotten reports via

17 the contractor line if that is implemented. 

18 Is that something DOE can even do is set up a

19 sting to find a violator?

20 MR. RAWALD: No, Jon. I think that

21 we could do it and I think that is something

22 that we would want to consider doing. Whether
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1 or not it could be purchased and installed, I

2 think that is something that we could consider

3 doing.

4 MR. EISNER: And --

5 MS. NOLL: So, this is Elizabeth --

6 I'm sorry.

7 MR. EISNER: I was going to say, it

8 probably doesn't have to be as complicated as

9 a lot of people think a sting operation would

10 be. I think Doug sees frequently we will

11 call, for example, a supplier of some sort to

12 say I live at such and such an address. I

13 would like to buy this unit from you. Let's

14 see whether they say sure.

15 MR. RAWALD: From my point of view,

16 I don't think we need regulation authorizing

17 us to do that. We would just go out and do

18 it. And then if we got it, we would have some

19 proof in our hand. That is proof. Because we

20 are allowed to buy things as consumers.

21 MR. McCRUDDEN: But buying is not

22 the illegal act.
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1 MR. RAWALD: No, that's right.

2 MR. McCRUDDEN: I mean the sting

3 would have to be from a job site. You have to

4 get someone to purchase and then install the

5 piece of equipment. That would be harder.

6 MS. SHEPHERD: Well, I mean you

7 don't have probable cause. I mean like if you

8 had complaints from a consumer or others and 

9 then you call and that person said sure, I can

10 sell you that. I mean, you have the authority

11 to seek records from that company.

12 MR. RAWALD: Right. I think that

13 Amy's hypothetical -- this is Doug -- is

14 actually really helpful. Because what I will

15 get is complaints when they actually have

16 installed something than help me prove that

17 they are the kind of person that would install

18 it. If I could sort of buy it from somebody

19 who will want to do it, so we have that actual

20 piece of tape that I could bring before the

21 judge and say by the way we tried to buy it

22 from this guy. Now understanding that this is
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1 a civil action. So, civil actions are

2 preponderance of the evidence that are

3 typically somewhat of a higher standard.

4 MS. NOLL: So, this is Elizabeth

5 with NRDC. A couple of things that are not on

6 the list but along those lines that I think we

7 have discussed, one, requirements either on

8 the manufacturer to sell to certain regions or

9 certain distributors in certain states,

10 distributors to selling to certain areas,

11 again, just things that I heard also maybe

12 requirements on distributors to disclose

13 information to contractors upon sale and then

14 warranties are not up there either as a means

15 of tracking. So, just to joining it up on the

16 list to try to be more exhaustive, before I

17 get browbeaten for having --

18 MR. MELCHI: This is Jon with HARDI. 

19 Per the FTC labeling requirement, distributors

20 are required to inform contractors after the

21 first of the year of the energy efficiency of

22 a product. That is already an FTC
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1 requirement.

2 MR. EISNER: Other suggestions?

3 MR. WHITE: So, just a thought and I

4 am not a manufacturer, so sorry. Is it

5 possible that if a SEER 13 piece of equipment

6 is installed in the wrong area, its warranty

7 could be void? Just a question.

8 MR. DORIA: I think it is really

9 limited. What I have been told internally is

10 that those laws more tend to vary state by

11 state. But because of that, there are

12 absolutely states where you could not do that,

13 which makes it, effectively, a nonstarter

14 here.

15 MR. HURST: John Hurst from Lennox. 

16 I think the challenge with that you are now

17 punishing the consumer.

18 MR. EISNER: Other thoughts or

19 ideas?

20 MR. CLARK: The question about

21 warranty information, this is Gary, is kind of

22 falls back into the privacy concerns of a
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1 homeowner.

2 MR. EISNER: What was the purpose?

3 MR. CLARK: They filled out a

4 warranty card not because they thought they

5 were supplying information to the Department

6 of Energy. Right? And so for Goodman

7 manufacturing, we require that the homeowner

8 register their products online. And as part

9 of that, we have a privacy statement that goes

10 along with that. And right now, that privacy

11 statement, to the best of my recollection, I

12 haven't memorized it, would say basically that

13 we are not going to share that information

14 with anybody else. And so I am not sure what

15 we would have to do to make that full caddy.

16 MR. HURST: Doug, we spoke earlier

17 -- John Hurst from Lennox. We spoke earlier

18 today about do you have instances where

19 product is found to be noncompliant. What do

20 you do? And manufacturers, I think all said

21 that we go out and we rectify the situation.

22 Is there something in the law that
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1 says that if a noncompliant piece of equipment

2 is installed that the contractor has to

3 rectify that and bring that up to the

4 standard? I think that would be a very

5 effective stake, if you will, that not only do

6 they have to take a $200 penalty but they had

7 to eat the cost of the new installation as

8 well.

9 MR. RAWALD: And John, so there is

10 nothing currently like that. There is not

11 even a requirement on the manufacturers to

12 have to go out and make good to the consumer

13 that got the product that was not compliant. 

14 So, consumers can complain and I guess they

15 could sue the company but there is no

16 regulatory requirement that the manufacturer

17 go out and replace or refit --

18 MR. HURST: I'm not advocating the

19 manufacturer --

20 (Simultaneous speaking.)

21 MR. RAWALD: I'm saying that what we

22 currently have is totally unique. So, I mean
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1 people keep their noncompliant product. They

2 keep using the noncompliant product. They

3 just suffer the consequences of it costing

4 them more money and wasting more emissions.

5 So, we don't have anything that

6 currently -- we can certainly discuss the idea

7 and the lawyers and I can go back and discuss

8 about whether we have the authority to make

9 such an idea happen, if we thought it was an

10 effective idea.

11 MS. SHEPHERD: This is Amy Shepherd

12 from AHRI. The other way that you can think

13 about that is like for example the SEC has

14 guidance on remedial actions that a company

15 can take once it is found to be in violation

16 of a law. They take that into consideration

17 when they are doing their enforcement

18 analysis.

19 So, you could have something that

20 said okay, well if you self-identify and take

21 these remedial actions, then DOE may consider

22 that in the severity of the punishment or its
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1 enforcement action.

2 MR. RAWALD: Right. This is Doug,

3 following up on Amy. So we do, as an

4 enforcement matter and policy matter, consider

5 remedial actions in deciding what would be the

6 appropriate penalty for a transaction.

7 MR. EISNER: Craig, you had a

8 question online? Craig Mesmer?

9 MR. KROWKA: Just open the line.

10 MR. MESSMER: I just wanted to point

11 out that it gets more complicated when you

12 have the ICM. There is no separate database

13 anywhere. And coming up with all these ideas

14 is all well and good and kind of burdensome. 

15 But I am just throwing it out there. I don't

16 have a solution.

17 MR. RAWALD: Craig, could you

18 elaborate some more on that point?

19 MR. MESSMER: Okay. Well, we know

20 that if you have an ICM, that means that the

21 indoor unit and the outdoor unit are

22 manufactured by different manufacturers,
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1 sometimes sold by different distributors. 

2 We are talking about databases and

3 restrictions on selling and distributors and

4 things like that. Who is going to -- how can

5 you police something made by two different

6 people? There is no one company that is

7 responsible for that.

8 MR. SACHS: Craig, this is Harvey

9 and I would like to ask a question. Did you

10 all ever get your separated class or are you

11 still operating under waivers?

12 MR. MESSMER: No, no, no. We don't

13 have a waiver anymore, Harvey. It is a

14 separate product class.

15 MR. SACHS: So you are not even

16 subject to this thing. And as long as the

17 condensing unit you are matched with is SEER

18 14 if it is sold in the south, it may not even

19 apply, even that may not apply.

20 MR. MESSMER: Well, I am actually

21 thinking more for all the ICMs, not just Unico

22 units.
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1 MR. SACHS: Did you catch Doug's

2 announcement just after our break?

3 MR. MESSMER: No, I guess I didn't. 

4 I missed that one. It is hard to hear

5 everything on the computer here.

6 MR. SACHS: Sure. I think Karen's

7 interpretation might be that you are off the

8 hook.

9 MR. RAWALD: This is Doug. I'm

10 going to say that is not the message I am

11 trying to convey. That is definitely not the

12 --

13 MR. MESSMER: I'll take Harvey's

14 take on it.

15 (Simultaneous speaking.)

16 MR. RAWALD: So, as we discussed,

17 any unit, the coil has to be capable of

18 performing at the 14 SEER level made current

19 in the current guidance. The current guidance

20 as written, that was raised by Bryan Rocky

21 yesterday, the guidance that you got yesterday

22 was that the coil sold as a component to put
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1 into a system must be able to, when paired,

2 achieve that 14 SEER level.

3 MR. MESSMER: Yes, that is a given. 

4 We all agree on that. It is the enforcement

5 that I am kind of concerned about.

6 MR. RAWALD: I understand.

7 MR. WINNINGHAM: And this is Dave

8 with Allied. It is not just the replacement

9 situation that Bryan was referring to

10 yesterday. You could have a new system and

11 have those components come in from different

12 distributors from different manufacturers.

13 MR. RAWALD: This is Doug. And I

14 get that. I guess I consider to be the

15 matching of two separate parts sort of similar

16 in analysis to a system that exists where you

17 are adding that component into it.

18 MR. PORTER: This is Steve Porter,

19 Johnstone Supply. I like Karen's idea on the

20 hotline to call in and letting contractors

21 police themselves. I think that moves

22 everything forward quite a bit. I think our
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1 labeling, which she just announced coming out

2 of the break, moves it that much further o. 

3 Our communication with contractors

4 about the law that we have to communicate and

5 if we can communicate a hotline number and in

6 the fact a homeowner reach out program which

7 they don't have much understanding of this

8 existence of regional standards at all and

9 won't by the DOE. I mean we have done more

10 there communicating than we did on the 10 to

11 13, in a way.

12 So, I think that is quite a bit to

13 get done, even and get it done quickly. But

14 that allows us the best opportunity without

15 thinking about all these other processes that

16 could take months or years to implement. To

17 me, that seems like a pretty doable plan that

18 could be accomplished within go live of

19 January. And it would be effective for the

20 DOE to show enforcement and everybody kind of

21 has a piece in that.

22 MR. WHITE: This is Chuck White.
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1 That ties in with what Neil said earlier that 

2 as we go forward, things can be added. If we

3 think compliance is lacking, you could enhance

4 the program. Is that correct?

5 I mean Neil posed the question

6 earlier how many do we think are problems and

7 that is a difficult question because it is not

8 in effect. So, we don't have problems because

9 it is not illegal at the moment. 

10 And I have one other separate, which

11 is just kind of a clarification question to

12 you, Doug, related to what Gary said earlier. 

13 By the mandate for the reason that we are

14 here, this overall process, is DOE's mandate

15 to determine compliance or is it to enforce

16 compliance, or do you think there is not a

17 difference or do you think it is both?

18 MR. RAWALD: So, this is Doug. So,

19 the statute requires us to develop an

20 effective enforcement plan. That is the work

21 of the statute. So, I think as part of

22 enforcement, what we do currently is we
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1 determine compliance as part of what we do for

2 enforcement. So, in the context of we do

3 testing and we determine of the product is

4 compliant with the standard, then if it is not

5 compliant, then we take further enforcement

6 action. Though I would contribute or tell a

7 group that the actual determination of

8 compliance is considered an enforcement action

9 as well because we are doing things in an

10 enforcement context.

11 So, I think it is all wrapped up

12 together in some way there.

13 MR. WHITE: There is kind of a fine

14 point there, too. If you have a problem

15 situation, obviously, you would have to

16 determine compliance of that problem

17 situation. But would that expand out to you

18 have to determine compliance in the industry

19 coast to coast? Do you see how that can be

20 different? I mean, are you determining

21 compliance of the problem that you have before

22 you so you can pass enforcement or are we
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1 trying to determine the major --

2 MR. RAWALD: Well, I think what I

3 see as the Department's desire, and what I

4 have to bring back to those that I work for

5 for them to be satisfied with our

6 contributions of process and to adopt a rule

7 would be a framework by which most people are

8 going to be assured to be compliant, which we

9 presume most people will be, but also a way

10 that when a violation is reported, we can

11 investigate and deal with it so that the

12 playing field is kept level. Because I think

13 those people who are playing along are going

14 to be upset that we are not investigating and

15 dealing with those guys who are violating.

16 So, that is all part of what I think

17 we have to do.

18 Now, we take every case as a case. 

19 So, if there is a complaint against one

20 individual, I am going to investigate that

21 individual and I am going to look at that

22 individual. I am not going to look the entire
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1 industry unless it -- there has to be a reason

2 to do so.

3 MR. EISNER: Okay. 

4 MR. SACHS: John, do you want to --

5 MR. MELCHI: No, go first, please.

6 MR. SACHS: If I could try to

7 summarize and build on this, we have got three

8 components that look like they can be bundled

9 that are pretty acceptable: the label, the

10 outreach, the hobnob reporting. Some of us

11 might want nuances like reward.

12 We then have another question which

13 goes to back to the suggestion from Elizabeth

14 and that is that we reconvene in a year and

15 evaluate how it is going and whether

16 additional measures need to be added. That

17 would satisfy or helpful to your mandate for

18 an effective enforcement program because it is

19 a formal way of getting the feedback on

20 whether it has bene effective.

21 MR. EISNER: And how would you

22 measure whether it has been a factor, based on
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1 what you put into the rule?

2 MR. SACHS: We would measure that by

3 what has been reported in these three

4 mechanisms and what the stakeholders herein

5 assembled have also learned on their own from

6 their years on the ground listening to the

7 rumbling of the elephants.

8 MR. RAWALD: I think -- Harvey, this

9 is Doug -- a couple things. One, if you are

10 going to run the risk then I am going to fill

11 the gap. Because when a reported violation

12 occurs, I am going to do something. 

13 And so unless this group comes up

14 with a method by which we think is the

15 appropriate way to follow-up on those

16 complaints, there is going to be that gap.

17 MR. SACHS: I'm sorry. You are

18 right and my nuance was certainly wrong. I

19 should have said in addition to whatever

20 stumbling through the jungle DOE would

21 ordinarily do, we would have -- I am teasing

22 you -- we would have the label, the outreach,
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1 and the hobnobbing and see how that is doing

2 before we commit to something that is -- Lord

3 knows I am throwing this out as an idea. I

4 haven't vetted it with our management, much

5 less my attorney.

6 MR. EISNER: Elizabeth.

7 MS. NOLL: So, what we were

8 commiserating at the break and one of the ways 

9 we have been visualizing this was because

10 there is varying degrees of hard and easy and 

11 varying degrees of effective and non12 effective. And you could visualize it in a

13 chart that goes up and down, hard-easy, right

14 to left non-effective to effective. And we

15 can start plotting these and we are going to

16 have a lot of opinions as to where upon that

17 chart it might fall.

18 But if a lot of things end up

19 bundled in the easy-effective quadrant, that

20 might package into a nice -- and then we can

21 see what we are missing is that the -- I'll

22 stop.
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1 MR. HURST: And this is John Hurst

2 with Lennox. Building on what Harvey said and

3 what Elizabeth said, you could actually take

4 that diagram and if it is effective and easy, 

5 there is no need to do hard and effective. 

6 Or, if it is easy and ineffective, over time,

7 you could come back and there is nothing I

8 would rather do than to be here with Harvey. 

9 But you could come back and the

10 burden of the various options that we have,

11 the burden increases if it is ineffective. 

12 And I would be willing to sign up for that

13 because I don't want ineffective but I do want

14 easy or great gaining sales meaning.

15 MR. EISNER: Let's have some comment

16 on the suggestion and see if we want to

17 proceed that way.

18 MR. DORIA: Well if I could just ask

19 a question. So what would need to be done by

20 the Department in order to provide for some

21 sort of look back? Would a new rulemaking

22 have to commence?
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1 MR. EISNER: Well, probably it is

2 required by law to do that periodically.

3 (Simultaneous speaking.)

4 MS. NOLL: Could we add it to the

5 list of things if a look back is -- it is

6 there. Thank you.

7 MR. DORIA: Well, I guess what I am

8 just asking for a little bit of guidance on,

9 I could imagine we could all, in theory, agree

10 to get back together to talk but if we want to

11 make some actual changes to the CFR, if that

12 were to be the outcome, then I don't know how

13 you could do the absentee formal rulemaking. 

14 I guess that is my question.

15 MR. SACHS: Could I just ask a

16 follow-up to Jordan's? Could we, as part of

17 our term sheet, include that and ask for a

18 review?

19 MR. ROCKY: So, I am going to jump

20 in.

21 MR. SACHS: Please.

22 MR. ROCKY: So, I think we have a
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1 point in time defined that will already allow

2 for a review. And that is the end of the

3 inventory sell-through period July 25th, 2016. 

4 But we are giving up, in essence, two

5 procedures for units today installed that was

6 built before January 1 and a procedure for

7 units built after January 1. And then at one

8 point in time, 18 months from now, we are

9 going to have one procedure. That is the way

10 the negotiated agreement comes out.

11 So, I think by definition we have a

12 point for a review of the effectiveness of the

13 two-pronged approach.

14 MR. BALLO: That would also allow

15 FTC time to make any regulatory changes they

16 would need to make to the label, which they

17 might not be able to do by next summer.

18 MR. EISNER: Again, the date was

19 2015 did you say?

20 MR. ROCKY: July of 2016.

21 MR. EISNER: Sixteen. Thank you.

22 MR. RAWALD: This is Doug from DOE. 
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1 So, Johanna and I will go back and consult

2 with the lawyers that are the lawyers on

3 administrative matters and make sure that they

4 would be okay with including in a rulemaking

5 a reply and a look back at something.

6 And we will also have to check with

7 the policymakers because there is an expense

8 in time and energy and money for rulemaking as

9 an activity. So see if they would be willing

10 to engage. But that wanted to be a term that

11 we were coming out with, they both should go

12 on a term sheet and go from there.

13 But what I have to make clear is

14 that from the Department's point of view, my

15 mandate coming into this is I can't leave

16 without some sort of tools for what we are

17 going to do when the violations get reported. 

18 So, I can't leave that on the table for a year

19 and a half from now. I need to have some sort

20 of tools on the table.

21 MR. EISNER: Well, Doug, what I was

22 hearing is there are tools that are going to
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1 be on the table to use. They will increase if

2 the program is not being effective.

3 Because we are first agreeing we

4 think this will be effective but if it is not

5 in 2016, we will have enough data to determine

6 that and we will decide whether to tighten the

7 screws.

8 MR. ROCKY: So, this is Bryan. Just

9 to clarify, I am not proposing we don't do

10 anything until July of 2016. I think it is a

11 point in time that the Department can gauge

12 the impact because of the way that the

13 negotiated settlement and the inventory sales

14 for a period comes through.

15 I absolutely agree with what

16 Elizabeth and John were talking about as far

17 as ranking methods and coming up with more

18 ideas. We have to give you an idea of an

19 enforcement policy for July 1, 2015 for units

20 produced on July 2, 2015.

21 MR. RAWALD: I knew what your

22 positions were. What I am concerned about is
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1 I don't want there to be a coalescing about an

2 idea. If a package can be a 1-800 number of

3 public outreach and the label, and then we are

4 good, DOE would not be able to vote yea to

5 that.

6 MR. EISNER: And what I am hearing

7 is a suggestion that we rate them in terms of

8 ease of implementation and effectiveness and

9 look at what it tells us and then make some

10 decisions.

11 MS. SHEPHERD: This is Amy Shepherd

12 from AHRI. I mean that is basically what you

13 have to do in a company when you have a new

14 rule. You have to say okay, here is what we

15 do now. Here is the new rule. Lay them on

16 top of each other and see where are the gaps.

17 So, I think that in terms of ranking

18 these, in terms of ease, we could do that and

19 then we can see where we are and identify

20 where that gap is that DOE needs in terms of

21 those additional tools. 

22 We do have to do that. And a look
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1 back could be part of that.

2 MR. PORTER: Well, this is Steve

3 Porter, Johnstone Supply. So I believe that

4 that wouldn't be enough because one of the

5 things we also do in business is look, when I

6 got to get inventory and I have got to get a

7 bill rate of 99 percent to get 100 costs me

8 this to do it, it is not worth it.

9 You know if we are looking to get to

10 100 percent here, that is going to be tough. 

11 And I don't see any of those as what we just,

12 what I just discussed earlier is not getting

13 us pretty close to 99.

14 I think the label gets us a long way

15 there. That was clean and it communicates

16 clearly. An 800 number and self-policing and

17 those things, I see that as a big tool to me. 

18 It doesn't sound like you think that is a big

19 tool.

20 MR. RAWALD: And Steve, so I do

21 think those are all valuable tools. I

22 absolutely agree. What I am worried about is
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1 once the phone call is made, what do I do?

2 MR. PORTER: Yes, well that is --

3 yes.

4 MR. RAWALD: And I think that we

5 need to make that clear out of fairness to all 

6 the participants in the industry or else I am

7 going to be left filling the gap, which nobody

8 would want.

9 MR. PORTER: Okay, that is fair. I

10 agree with that.

11 MR. RAWALD: Okay. And I think that

12 it would have to at least get there.

13 MR. PORTER: Okay, that's fair

14 enough.

15 MS. SHEPHERD: Well similarly, I

16 mean what do you do now? Because you

17 mentioned that is a part of your enforcement

18 program. Right?

19 MR. RAWALD: Right, so I have

20 definitely been trying to bring things up that

21 we do now so that you can understand what we

22 are doing.
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1 So, what we do when we get a report

2 violation now is that we typically subpoena

3 records from both manufacturer and

4 distributors who want to kind of see what is

5 going on out there. We ask for information

6 from manufacturers about test data. We want

7 to know whether the product was tested. And

8 we purchase product or we require a

9 manufacturer to buy this product and we test

10 it ourselves. So, the area and the things

11 that we need to investigate and we have the

12 authority to depose witnesses and ask

13 questions of the witnesses if we want to about

14 the product.

15 So, we could do all those things and

16 to build a case -- well, first of all decide

17 whether or not there actually was a problem or

18 not. And if there is a problem, to then build

19 a sufficient case that we could then bring an

20 action against the company both finding them

21 not complaint, that is the first step we would

22 take, finding them noncompliant, and then
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1 assessing a civil penalty as appropriate for

2 the noncompliance.

3 So those are kind of the steps that

4 we go through from an enforcement point of

5 view. So, I think that we need some sort of

6 translatable steps here in this process to at

7 least lay out what the playing field is going

8 to be.

9 MR. PORTER: So, Doug, Steve Porter,

10 Johnstone Supply.

11 So, we also talked about within that

12 enforcement or however DOE plans to do that,

13 the methodology to enforce, I saw in notes, I

14 think, that you guys discuss routinely

15 violates and that type of thing.

16 So, is there going to be -- do we

17 have to also have consideration for the

18 uninformed? I didn't know. I had one

19 technician. I've got ten guys running and one

20 guy who did it by mistake and we pulled the

21 wrong product, we shipped the wrong product. 

22 You know, are we going to define that piece as
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1 well?

2 MR. RAWALD: Right, and this is

3 Doug. And that was the concept that we left

4 off on yesterday and that we have to circle

5 back on, I think, to complete what we are

6 doing here. Because there is a statutory

7 prohibited act that Congress has given me to

8 assess civil penalties against manufacturers

9 who knowingly sell to distributors, dealers,

10 and contractors who routinely violate the law.

11 So, the question was, well what

12 would that process be of kind of fulfilling

13 that statutory prohibited act? And if you

14 folks will give me a solution that I am going

15 to go out and do with, which may not be what

16 everyone wants.

17 And so I think that I want to tell

18 you folks need to coalesce around something.

19 MR. PORTER: That is another that I

20 think is almost as contractors looking to

21 self-police as manufacturers are not going to

22 want to continually sell to a distributor and
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1 then we are not going to have the relationship

2 if there is a continued violator, I would

3 imagine.

4 MR. RAWALD: Well, I think that is

5 essentially what we all came to yesterday that

6 nobody wants to play with someone that is

7 going to get their hands dirty.

8 MR. PORTER: Right.

9 MR. RAWALD: So, I think we all

10 agree on that. So the question is what do we

11 even do to make sure that we have these steps

12 in place so people that the process if fair or

13 that it is executed equitably across the

14 industry so everyone knows what they are

15 dealing with.

16 I mean we have also bantered about a

17 couple times of assessing fines against

18 individuals who are not manufacturers or

19 private labelers because the specified

20 prohibited acts are not for manufacturer and

21 private labelers. And the question to me

22 comes back to one of could the effective
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1 public shaming and business expense of being

2 found to be a routine violator outweighing

3 sort of actual need to develop a prohibited

4 act for charging money to the individual

5 contractor. So, that is me balancing it and

6 I think it is worthy of discussion as well.

7 So, these are the things I was

8 thinking about yesterday after we left.

9 MR. DORIA: So, if I could just

10 reiterate and then try to put it in context. 

11 Jordan Doria from Ingersoll Rand.

12 You said that the three steps today,

13 as I understand it subpoena records from both

14 manufacturer and distributors, ask for test

15 data, request for or in some way obtain a

16 product for testing. And that, as I

17 understood it, upon completion of those steps,

18 there would be a determination of compliance

19 or noncompliance. Right?

20 MR. RAWALD: And Jordan, yes, that

21 is correct. We don't have to do all of those

22 things in every case. 
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1 So, there are some cases where, and

2 I will give a very common example, DOE will go

3 out and buy a product. We typically try to

4 target products that we think will be on the

5 borderline because those are the ones that are

6 more likely to have problems, so you look at

7 things and you try to be judicious about how

8 get the money, so you look at the parts. 

9 Okay, this one, we think it has some sort of

10 reason why it is going to fail. We are going

11 to buy it. So you do an audit products as

12 well, as we discussed.

13 And then you then test that product. 

14 If that product fails, I then go to the

15 manufacturer and say hey, I tested one unit. 

16 That is not enough to know that your whole

17 pipeline is the problem but you need to

18 provide me with three more.

19 And now if I test all four of them

20 and they all fail, I know with statistical

21 certainty that this product is not a compliant

22 product. And then I will make a finding of
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1 noncompliance.

2 Now, I haven't subpoenaed any of

3 your records. I haven't done any sort of

4 actual discussion with anybody at the company 

5 short of deposing them. But I have made a

6 finding based upon what I think are pretty

7 telling pieces of information, scientific

8 data. So, that is how we will do it in a

9 typical case.

10 Other cases, I may get data from the

11 company. And the company has reams of data

12 showing the product is not compliant but they

13 are still selling it. Well, I will make a

14 finding based upon that data. I will say oh,

15 look at this. There is enough data here to

16 support the fact that this is not compliant. 

17 And you totally knew it and you ignored it. 

18 You sold the product.

19 So, I will make a finding of

20 noncompliance and we will assess civil

21 penalties against the individual. So, they

22 are different methodologies.
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1 MR. DORIA: Right. So, I guess

2 where I was trying to go with that is that

3 what we have here in some ways, we have

4 actually a good degree of clarity on what is

5 in fact the violation. The violation is the

6 installation of the noncompliant product.

7 What we need to then do is back up

8 through those other steps you have outlined

9 and determine what you need to get there to

10 create some kind of analogous process and give

11 you investigative tools necessary to sync up

12 with what is the clearly prohibited act. 

13 Right? So, that is the practice.

14 So then we could start by looking at

15 this and trying to couple that together,

16 understanding what you currently do.

17 MR. EISNER: Yes?

18 MR. McCRUDDEN: Charlie McCrudden

19 with ACCA. On periodic review of enforcement

20 program and like John, I like being with all

21 of you today and the last few days and the

22 next two weeks, one thing I am concerned about
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1 is creating just another rulemaking, which

2 creates more uncertainty for the future

3 because we don't know what this new rulemaking

4 will do. I mean we are all here because we

5 wanted to see what happens but we are all

6 because there is so much uncertainty.

7 I got an email today -- somebody

8 made a comment about you don't know what is

9 going on with regional standards and you have

10 been living under a rock. I got an email this

11 morning from a contractor saying can you

12 explain to me what is going on with regional

13 standards.

14 So, I just don't want to create a

15 situation -- I guess one way to do it is

16 periodic review without mandating any changes

17 in the same way that right now under what is

18 it six or seven years you look at efficiency 

19 standards and you can move them up or leave

20 them the same. You can't backslide.

21 So, maybe there is no, something

22 implies that maybe it is great and we need the
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1 same to sort of build in that certainty

2 because oh, boy, 18 months from January first

3 we all think oh, something new is coming down

4 the pike, we are all going to tense up again.

5 MR. EISNER: If I could, again, you,

6 this group has the ability to decide whatever

7 you want the review to be. The normal process

8 is you regularly review a rule to see if it is

9 doing what it doing what it is supposed to be

10 doing. That includes looking at whether it

11 costs more than you thought it was going to

12 cost or cost less; whether it is more

13 effective or less effective. Then, you decide

14 whether you need to do another rulemaking. 

15 If you were to ask for a review,

16 that doesn't mean you have to write a new

17 rule. It means you look at whether the rule

18 is working and needs to be modified.

19 You could write a rule here today

20 that would not require a new rulemaking by

21 simply saying if we are not being effective,

22 if this number doesn't exceed this number,
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1 then on this date, the next set will take

2 effect in the rule.

3 Or you could say you go through a

4 rulemaking to implement the next step. 

5 Whatever you want.

6 MR. McCRUDDEN: If we said nothing

7 about periodic review, would the periodic

8 review still occur under your rules?

9 MR. EISNER: There are statutory

10 requirements. There are executive order

11 requirements for agencies to review rules. 

12 They are generally implemented the way they

13 are supposed to be.

14 So, you have no certainty the review

15 will be done but there are reviews that are

16 done, in some agencies more often than others. 

17 But you could say that the earliest a review

18 would be required to do would be ten years'

19 after the rule went into effect. If you want

20 something to happen in two years or three

21 years, you just say that. We think that the

22 rules should be reviewed in three years to
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1 determine whether it is being effective as

2 defined by the following or just leaving

3 general authority to do it.

4 There is a lot of flexibility. You

5 could go to the extreme that some agencies

6 would have trouble with. That is why I think

7 Doug doesn't want to make a commitment here.

8 Agencies will write rules that say

9 this rule will go out of effect in five years

10 or three years, unless I do a study to

11 determine that it should stay in effect or

12 should be improved or whatever. And I have to

13 do that before the rule goes out of effect.

14 And then agencies are falling all

15 over themselves because they have got to go

16 through rulemakings to extend the effective

17 date because you wrote in an earlier rule it

18 goes out of effect in three years unless I do

19 something.

20 So again, you can do anything. The

21 more you put in the latter kind of

22 requirements, the more likely it is you are
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1 going to have a problem because you might not

2 be able to bring the review in effect.

3 MR. RAWALD: And this is Doug. So,

4 the current, the statute that we currently

5 have that requires to additional rulemaking

6 does not have a provision requiring looking

7 back on the effectiveness of it over time,

8 unlike in EPCA where there are places for test

9 procedures and standards where we are all

10 required to look back over a certain period of

11 time.

12 So, this particular statute does not

13 have a requirement.

14 MR. LATTANZI: I just have a

15 question for Doug. This is Matt with NORDYNE. 

16 I just want to make sure I heard something

17 correctly that you said a moment ago and I

18 understand it. Does this group, and I think

19 I know the answer, have the ability to

20 recommend and put forth an additional

21 prohibitive act? I think you said that we do.

22 MR. RAWALD: Right. So, our
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1 position coming into the negotiations is that

2 DOE has the authority to interpret our

3 regulations such that can create a prohibited

4 act, if necessary.

5 MR. LATTANZI: Okay, thank you. So,

6 we can recommend an additional prohibited act,

7 yes.

8 MR. RAWALD: And it will be, of

9 course, subject to a legal analysis. But I

10 think that we could definitely, that that is

11 our authority coming in here.

12 MR. EISNER: All right, then I

13 assume that means you could also require

14 something. You could prohibit something and

15 you could require something, such as

16 collecting a piece of data.

17 MR. RAWALD: The webinar has turned

18 off. So, if we could just go off the record

19 for a few minutes.

20 (Whereupon, the above-entitled

21 matter went off the record at 3:44

22 p.m. and resumed at 3:45 p.m.)
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1 MR. SACHS: This is Harvey and just

2 with respect to the very legitimate uncertain

3 concern of the review, one of the gratifying

4 things we saw last year with the commercial

5 products was once we turned in the term sheet,

6 DOE real quick like turned that into proposed

7 regulations, used the minimum public comment

8 periods, and I think that it was within 90

9 days that we had those rules finalized.

10 So, it was not -- to me, one of the

11 benefits of the negotiated rulemakings is that

12 the rules got --

13 MR. McCRUDDEN: Well, my concern is

14 not the outcome and the speed at which this

15 working group product comes out. It is if we

16 are baking into this a review with another

17 potential change, because that is what none of

18 us like is potential change.

19 MR. RAWALD: No, I hear it -- this 

20 is Doug. I hear that there is a lack of

21 finality when you know it is going to be

22 reviewed very soon. So, at least the standard
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1 for test review, okay we have five or seven

2 years to live with this. But with one and a

3 half years you will be saying well how long

4 before I have to be uncertain again. So, do

5 we want to feel that way?

6 MR. SACHS: I understand that but I

7 think all of us have a strong interest in some

8 sort of review to assure that it is working

9 for good contractors and everyone else.

10 If there is a better way to get

11 that, I would love for that to turn out to be

12 a one-morning meeting at which we sing

13 Kumbaya, it is working.

14 MR. RAWALD: Well, this is Doug. 

15 So, I have put to you that under the statute

16 what is allowed. Anyone can petition the

17 Department for a rulemaking at any time. So,

18 if anyone were to feel, hey, we have seen it

19 in action for a year and we want there to be

20 a look back to see if it is effective, they

21 could ask the Department and we could consider

22 it. It is just a question whether we want to
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1 mandate such a look back over such a short

2 period of time or whether we want to at least

3 in the preamble possibly insert language

4 saying hey folks, if you feel there is a

5 problem with the effectiveness of this, please

6 feel free to come up and bring the answer to

7 that question.

8 MR. SACHS: My response to that on a 

9 process level is wanting to have that left

10 where there is awareness in the ASRAC process

11 not to call for a formal rulemaking. And I am

12 not sure if I am able to do that. But I think

13 the potential was processed if we make that a

14 lower threshold and more likely beneficial.

15 MR. EISNER: Other comments or

16 general thoughts?

17 MS. SHEPHERD: This is Amy Shepherd

18 with AHRI. I think we should proceed as if we

19 are burning our bridge right here. And let us

20 try to make the movie and then we can decide 

21 whether we want to review it. 

22 I am really concerned that if we
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1 start assuming that there is this built-in

2 safety net to this, that we are going to defer

3 some hard decisions. We are not going to have

4 the conversations. I think we should try and

5 make this beautiful so we don't have to come

6 back here.

7 But we can still have that

8 conversation once we have this firmed up a

9 little bit as to whether okay, here is a more

10 final package. Do we think we need to have

11 this review? Should we have it?

12 So, I would just think that maybe we

13 table this and defer, you know, keep it on the

14 list but just put it on the bottom and then we

15 --

16 MR. PORTER: Steve Porter with

17 Johnstone Supply. I agree with Amy only

18 because I think we are making a mountain out

19 of a molehill here anyway and that we are

20 going to find out that we are going to get --

21 MR. EISNER: Okay, does anybody

22 object, then, with our proceeding?
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1 (No audible response.)

2 Then I suggest we do two things. We

3 may have to discuss these things. People may

4 say well, what does this mean but we shouldn't

5 spend too much time on each one of them.

6 We are basically looking at a rough

7 estimate of where we would put them on a

8 chart. I would suggest something simple, a

9 scale of one to ten, one being the most

10 difficult versus ten being the easiest.

11 And then another scale from one to

12 ten for effectiveness, one being the weakest,

13 ten being the most effective. In other words,

14 ten is a high score or one is a low score for

15 both of those categories.

16 And then we will try to put them on

17 a chart overnight, having our trusty

18 contractor work at home tonight all night,

19 figuring how to do this.

20 Everybody okay with that?

21 MR. PORTER: Steve Porter Johnstone

22 Supply. 
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1 Would it be better to take that away

2 and do that and then bring it and throw it up

3 tomorrow or are we going to rank them right

4 now?

5 MR. EISNER: Well, we want to get a

6 consensus of the group. You want to take them

7 home at night and put numbers on them and then

8 come back tomorrow?

9 MR. PORTER: Go ahead, Karen.

10 MS. MEYERS: So, this is Karen with

11 Rheem.

12 I don't think if we could take those

13 things and number them instead of having the

14 hash mark, then we have got what? The FTC

15 label, whistleblower. I mean it is not going

16 to take long for me. I could write these in

17 two minutes, from my perspective.

18 MR. EISNER: So you are saying do it

19 now?

20 MS. MEYERS: Isn't that what we are

21 here to do?

22 MR. EISNER: Yes.
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1 MR. PORTER: I could do mine now.

2 (Simultaneous speaking.)

3 MR. EISNER: Well, the problem is

4 going to be doing the that because everybody

5 will be choosing numbers from one to ten. But

6 we can get a rough idea of what we are talking

7 about and see whether we agree. But I suspect

8 there will be some people who will want a

9 little explanation.

10 Let's start. We will put two

11 numbers down, so we get them in order. One or

12 the first number will be ease. The second

13 number will be effectiveness.

14 MS. NOLL: So, I do think, though,

15 there might be a little bit of value of kind

16 of the quartile and maybe in rough. But I

17 think because then you really are getting the

18 sense of full effective and hard together, as

19 opposed to ten over her and one over here.

20 MR. PORTER: You can visually see

21 it.

22 MS. NOLL: Visually see it. So, I
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1 am going to draw on the board.

2 MS. DEGITZ: If you can give me a

3 minute, I can do this on a chart. I just need

4 a minute to organize this in Excel.

5 MS. NOLL: We can just number. 

6 MR. PORTER: Put the numbers on the

7 big chart.

8 (Simultaneous speaking.)

9 MR. EISNER: Doug, we are having

10 conversations right now. Let's go off the

11 record.

12 (Whereupon, the above-entitled

13 matter went off the record at 3:52

14 p.m. and resumed at 3:52 p.m.

15 MR. SACHS: I believe if this is the

16 list. We can just number those --

17 MS. NOLL: Right. So, --

18 MR. SACHS: -- and vote on them

19 where people put each of those.

20 MR. EISNER: Yes, it is just

21 assigning whether we would vote to put them in

22 the upper left or the lower left.
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1 MR. SACHS: I think it is the sense

2 of people, if I am not hijacking.

3 MS. MEYERS: So, for instance, I

4 would put -- this is Karen with Rheem. I

5 would put FTC label under easy effective.

6 MR. PORTER: Are we going to vote on

7 these all at one time?

8 MR. McCRUDDEN: I mean just as an

9 example of what we are trying to do here.

10 MR. SACHS: How many people would

11 vote for FTC label that is easy and effective?

12 MR. PORTER: This doesn't include

13 the luminescent stuff. 

14 (Simultaneous speaking.)

15 MR. EISNER: Well, we can make these

16 two different things. So, I certainly there

17 is an FTC label, it is easy and effective.

18 One area, the FTC label, everybody

19 seems to agree, easy and effective.

20 MS. MEYERS: Yes.

21 MR. EISNER: FTC label, increased

22 visibility and luminescence.
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1 MR. SACHS: So, what happens if we

2 just go down the major numbers?

3 MR. EISNER: Well because they are

4 saying they don't know if they want to vote on

5 this. So, I am saying let's just give this a

6 separate number and see what happens with the

7 others.

8 So, increased visibility. Nobody

9 agrees it is easy and effective?

10 MR. WHITE: I think it is effective. 

11 It is not -- it's hard. There is no B. So,

12 if we are calling it A --

13 MR. PORTER: So, is that 1A? Okay.

14 MR. EISNER: No, this should be, we

15 will call it 1A and the other one is 1.

16 MR. PORTER: So 1A is hard and --

17 MR. EISNER: This is 1A we are

18 voting on right now.

19 MR. PORTER: Okay.

20 MR. EISNER: So, it is suggested

21 that we are hearing are hard and effective. 

22 Lower left, upper right. Anybody disagree?
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1 MS. MEYERS: So this is Karen with

2 Rheem again. I want to just stop. I think

3 what we need to do is kind of get the

4 structure. 

5 Once we figure out what we think

6 needs to be make up the major components of a

7 program, then we can come back and add the

8 details of what that means.

9 So, if we say, for instance, that

10 FTC label 1-800 number public outreach and we

11 say one other thing, four things and it is

12 going to be our straw man approach, there is

13 a lot of details that are still going to have

14 to go under that.

15 And I think then, if FTC ever makes

16 a list, we decide okay, what are we going to

17 do with FTC? We want to petition them for a

18 new rulemaking. We want to change the color. 

19 I mean there is always other discussions that

20 we can have about that component of the

21 enforcement program because --

22 MR. PORTER: So we can make it hard
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1 later.

2 MS. MEYERS: So, yes. I mean we

3 have got lots more discussion, once we figure

4 out what the straw man approach is to the

5 enforcement program.

6 There is still lots of discussions

7 because, for instance, if the 1-800 number

8 makes it up there, then what does Doug do with

9 that, with the information he gathers on the

10 1-800 number?

11 MS. NOLL: And this is Elizabeth

12 Noll. See, I also don't think that it is all

13 going to be easy and effective. It is going

14 to be efficient but that is going to give us

15 a really good starting point. Right?

16 MR. EISNER: Well, what we are

17 saying is in order to decide, we can go back

18 up to the one. And if this is easy and

19 effective, you can't ignore what is in A. So

20 these A, and B, and Cs down here.

21 If you are just looking at the FTC

22 label, without deciding all the details, it
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1 should be easy and effective.

2 Again, Steve is going to include the

3 luminescence.

4 MR. ROCKY: So, Neil, at this point

5 -- Bryan Rocky.

6 So, I think Doug has already given

7 us the topics, the areas to consider that each

8 of these has different things. So one is

9 something on the labeling of the products, as

10 Karen just said. The second topic is the

11 outreach or communication through the

12 distribution chain to the end customer. Some

13 of these will fall into that. The third is

14 reporting violations discussion and a process

15 for that. Fourth is investigation process. 

16 And the fifth is assessment of penalties.

17 You have got five topics that some

18 of these do not apply at all to those topics

19 but FTC label might be the absolute best for

20 labeling product by manufacturers through to

21 the customer. And then the 800 number might

22 be the best way.
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1 And manufacturers, we going to all

2 communicate the hell to the distribution chain

3 on this discussion. The distribution chain is

4 going to go to contractors. Ideas of tear-off

5 labels talks about that outreach and that

6 communication.

7 I think we have got the five big

8 topics and we put it in the buckets and then

9 we can assign these into those bucket and then

10 discuss does it apply in that area.

11 MS. MEYERS: That's a different

12 approach.

13 MR. EISNER: Thoughts on this?

14 MR. SACHS: Bryan, will you please

15 repeat the five buckets?

16 MR. ROCKY: Now, let's go again with

17 what Doug said before. We have the discussion

18 on how are we going to label the products. 

19 And that is from -- sort of goes from the

20 manufacturer to distribution channels to

21 contractors to homeowners. Two is how are we

22 going to communicate or have the outreach
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1 through the whole chain on what this process

2 is. Three is the discussion of how does

3 anyone report a violation to the appropriate

4 authority, which is DOE. The fourth is the

5 DOE investigation process, which may or may

6 not need further definition. And then the

7 fifth is the definition of the process for

8 assessing penalties.

9 MR. RAWALD: This is Doug. And I

10 like Bryan's list except for I would broaden

11 the last one to consequences, not just

12 penalties.

13 MR. ROCKY: Consequences, yes.

14 MR. RAWALD: Yes, consequences are

15 better.

16 MR. ROCKY: Yes, that is a better

17 word. 

18 MR. DORIA: I think there is another 

19 step there, which is determination that

20 violations occur. Maybe that is a potential

21 --

22 MR. RAWALD: I would put that with
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1 investigation. I think the investigations,

2 you know we do that. So, I would ask that we

3 handle that as part of that discussion.

4 So, the other thing is somewhere in

5 here we did discuss yesterday the possibility

6 of a good boy, a good guy, a good person list,

7 hey you are doing the right thing, kind of

8 contractor list. So, I think that would have

9 to go in somewhere under there as well in

10 discussion of that item.

11 MR. WHITE: So is that part of

12 communications and outreach?

13 MR. RAWALD: I think that might be

14 the right place to put that.

15 MS. NOLL: And my number three --

16 this is Elizabeth -- how violations are

17 reported. It sounds like to me that people

18 are assuming that that is the 1-800 number. 

19 But what about data or tracking or maybe a

20 little bit more than just violations?

21 That is under the assumption of the 

22 government path.
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1 MR. FENSTROM: This is Gary for the

2 California IOUs. So, we have used the term

3 how are violations or information reported. 

4 I suggest maybe we ought to say determined. 

5 Because that presumes that somehow reports are

6 going to be coming back from the field that

7 there is a violation here. And I want DOE to

8 have the capacity to identify violations, not

9 just respond to potential reports of

10 violations.

11 MR. DORIA: I would agree but I just

12 -- this is Jordan with Ingersoll Rand. One

13 thing I want to make clear from my

14 perspective, even if we, as a manufacturer,

15 got a letter, affirmative, the most clear

16 evidence ever that a violation has occurred,

17 we are still not the arbiters of a violation

18 under the law. It is still up to the

19 Department to make that determination, no

20 matter how sure we are.

21 It is like if somebody got a signed

22 confession from someone else that they
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1 committed a crime today, it is still not up to

2 me. It is still under the criminal justice

3 system. I don't think this is any different.

4 So, no matter how true the evidence

5 is that we get, DOE has to make the

6 determination that a violation has occurred.

7 MR. RAWALD: This is Doug. I guess

8 what I am hearing Gary saying is he wants us

9 to both discuss a system by which complaints

10 are reported but also that DOE has a sort of

11 auditing or sort of mechanism that we are

12 going out and observing violations on our own,

13 proactively rather than reactively. Is that

14 right Gary?

15 MR. FENSTROM: This is Gary. Thank

16 you, yes, that is correct.

17 Because DOE currently has the

18 capacity to go out and identify violations by

19 simply going to the store or the manufacturer

20 to see whether or not compliant products are

21 being produced.

22 MR. MELCHI: Doug, this is Jon from
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1 HARDI. So, we have talked a lot about how

2 industry may report a violation. Do you

3 envision collaborating with other agencies in

4 the government, such as the FTC or EPA to help

5 determine if there is a violation? As I think

6 about consequences, if a contractor installs

7 a 13 SEER air condition system in Virginia,

8 yes, they would be violating DOE's regional

9 standard but they would also be violating the

10 FTC requirements and committing consumer fraud

11 because they are required to provide, to

12 verify that what they are installing is a

13 legal product that meets the federal

14 requirements.

15 Do you envision the agencies

16 interacting on these or should we assume that

17 if a contractor violates the law, and this is

18 just a question for DOE, do we need to set the

19 consequences as if DOE was going to be the

20 only actor or do we take into consideration

21 that FTC may also be taking action on this as

22 well?
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1 MR. RAWALD: Right. So, I guess

2 what I am hearing your question is if we just

3 come along a violation that may be within

4 someone else's orbit, should we talk about

5 that? As a government agent, as a government

6 official, I am required to tell that other

7 agency about that activity.

8 So, I think that we can assume it is

9 a baseline and not regulated activity because

10 it has to happen or else I am not happy then,

11 so I have a concern there.

12 MR. MELCHI: So, that leads to my

13 follow-up question. Am I correct, and I guess

14 I will ask Charlie and Chuck to assume that

15 the violation of an illegal installation

16 clearly is against the law. That is why we

17 are here. But each of those violations would

18 also be guilty of violation FTC. Correct? 

19 FTC law or standards?

20 MR. RAWALD: So, --

21 MR. MELCHI: If the requirement on

22 January 1 is the contractor requirement to
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1 communicate, they are required to communicate

2 to the homeowner the efficiency of the

3 standard. And if they install the product

4 that was not compliant, they would, therefore,

5 be misrepresenting that energy guide label. 

6 Correct?

7 MR. McCRUDDEN: So, I don't know. 

8 Are those requirements -- I'm a contractor so 

9 I don't know the penalties, the penalty of a

10 crime.

11 MR. MELCHI: Okay and I guess that

12 was my question. Is there a penalty for

13 failure to comply with that?

14 I'm just trying to get my head

15 wrapped around if somebody, if you found a

16 habitual violator, would they be subject to

17 multiple agencies and multiple actions?

18 MR. RAWALD: I guess the answer is

19 it depends, which is a very common answer in

20 this room, unfortunately.

21 So, if I don't know an FTC rule but

22 what I would say is that we shouldn't regulate
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1 around any -- so, we should focus in on the

2 things that DOE has jurisdiction over, which

3 is the installation of a noncompliant product

4 and focus the violation around how we deal

5 with those, in my opinion.

6 MR. DORIA: This is Jordan with

7 Ingersoll Rand. I would like to propose just

8 a slight edit to number three. I think it

9 should be suspected violations, at that stage.

10 MR. RAWALD: So, this is kind of a

11 laundry list, at this point, of how we want to

12 tackle these issues. We want to move through

13 it logically, the logical way that Bryan

14 presented was very helpful.

15 MR. EISNER: And we started out to

16 evaluate whether all these ideas were worth

17 considering under the to be discussed. Now

18 are we just to divide them up into these

19 categories? Is that going to be difficult and

20 easy and effective to ineffective? 

21 I am not sure what the group wants

22 to do with this list now.
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1 MR. ROCKY: Bryan Rocky. So, just

2 thinking of this process and how I like to do

3 it, we have five buckets. And so we assigned,

4 we just go down without debating the merits of

5 each, deciding which bucket each of the

6 numbered items below fits into. FTC label to

7 me is obviously number one.

8 So, you could say for ease of

9 recording, we agree that FTC label is under

10 bucket one. So, you can color code it, you

11 can make it easy, or we can put a one in front

12 of it or something. Or you can move it, as I

13 think that is what she is doing right now. 

14 But that is what happens automatically.

15 So, I just actually like the idea of

16 color coding, leaving in the data there where

17 you have it and you just change the color

18 code.

19 MR. EISNER: This down here is not

20 in any special order.

21 MR. ROCKY: Right, I understand.

22 MS. NOLL: So, anything that is
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1 labeled --

2 (Simultaneous speaking.)

3 MR. ROCKY: All right. So, make it

4 easy. So, labeling is green. So FTC label,

5 I think is obviously that pertains to

6 labeling. So, just highlight that.

7 And we just go down the list. So,

8 you are processing this we go through the

9 items and just say number two is not labeling. 

10 Number three is not labeling and because she

11 is highlighting, she is wanting to do all of

12 the green items first.

13 MR. EISNER: I understand that. 

14 What I am getting at is then do you want to go

15 through and evaluate these things or do

16 something else with them?

17 MR. ROCKY: Well yes, we sort them

18 first and then we come back and discuss and

19 evaluate or add to the lit.

20 MS. MEYERS: This is Karen with

21 Rheem. Let's get them all color coded first. 

22 Is that what you are saying, Bryan?
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1 MR. ROCKY: Yes.

2 MS. MEYERS: Yes, so let's color

3 code every tool discussed to date.

4 MR. ROCKY: So, identify the ones

5 that apply to Lakeland.

6 (Simultaneous speaking.)

7 MR. EISNER: All right, now number

8 four --

9 MR. ROCKY: All right, sir, I'm

10 sorry. Consecutively, does anybody think

11 number two applies to labeling?

12 MS. MEYERS: No.

13 MR. ROCKY: Does anybody think that

14 number three applies specifically to labeling,

15 as we talked about the buckets above?

16 MS. MEYERS: No.

17 MR. ROCKY: Number four, a view of

18 enforcement is not about labeling to me.

19 MR. EISNER: It is not about

20 labeling but it is about whether your label is

21 effective or it needs to be changed.

22 MR. ROCKY: I think --
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1 MS. MEYERS: No.

2 MR. EISNER: Okay, you're the group.

3 MS. MEYERS: Five no.

4 MR. ROCKY: Five, no. Six, is not

5 about product labeling. Seven is not about

6 product labeling. Eight, definitely is. We

7 are talking about a tear-off label.

8 MR. DORIA: I'm sorry. Could I just

9 say on seven I think when we talk about the

10 labeling chains that we have so often have,

11 aren't we saying that number seven would be

12 significantly enabled by the label as we have

13 now got it constructed, that it would be

14 easier to make that finding?

15 MR. RAWALD: This is Doug. So, I

16 want to get this in the consequences here. I

17 could actually live with that because we are

18 going to have a lot of discussion about that

19 topic from what we already have so far.

20 MS. NOLL: Well, I think, Jordan,

21 maybe we still need to have --

22 MS. SHEPHERD: This is Amy Shepherd
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1 from AHRI. Just one comment on A. I think

2 that, I know it says label in it but really

3 that issue is the collection of information to

4 DOE and that is the obligation of it. So,

5 just query whether that is more the labeling

6 issue or whether that really is information

7 collection.

8 MR. SACHS: I'm comfortable with it

9 either way. This is Harvey. Either in bucket

10 one or bucket three.

11 MR. EISNER: Anybody have an

12 objection to putting green on it?

13 MR. MELCHI: This is Jon with HARDI. 

14 I agree with Amy. I would put it -- place it

15 in bucket three.

16 MR. EISNER: Anybody object to not

17 placing it in labeling?

18 MS. NOLL: This is Elizabeth. I

19 think it is both. It is going to require a

20 label, which is a -- you could even almost say

21 that is also a consumer -- that's not

22 outreach. Never mind.
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1 MR. RAWALD: This is Doug. And so

2 the point of this activity is not really one

3 of any sort of substance specifically to

4 organize how we are going to approach things. 

5 So, we want to put things that are of like

6 mind together so that you talk about them

7 together. So it is more of alike things, so

8 stick it with things that are alike, so we can

9 talk about things in context with one another. 

10 I think that is what we are going to do here.

11 MS. NOLL: So, this is Elizabeth

12 again. I think that it kind of goes back to

13 where we were instead of color coding it, we

14 were putting numbers next to it. So, this is

15 a one and a three.

16 So, when we go back and evaluate

17 well, we need something in all the buckets to

18 kind of have an effective rulemaking, this one

19 captures effectively one and three but fails

20 on --

21 MR. ROCKY: So, from a process

22 standpoint duplicate it. Add a new number
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1 nine that is identical to eight and put one in

2 labeling and one in the other. Again, it is

3 just a matter of moving forward so you can

4 change the color in number nine and report it

5 elsewhere, whatever that other color is going

6 to be.

7 MR. EISNER: Okay, number ten.

8 MR. ROCKY: No, not for labeling.

9 MR. EISNER: Okay, 12, 13?

10 MR. ROCKY: None of the rest look to

11 me like labels.

12 MR. EISNER: Number 15?

13 MR. ROCKY: So, I'm kind of agreeing

14 with Steve, going back to 14. I think 14 is

15 a labeling method, not one we prefer but I

16 think that is for discussion. It is

17 appropriate.

18 MR. EISNER: Number 15, 16, 17, 18. 

19 Okay, how about for communication?

20 MR. DORIA: This is Jordan. For

21 clarity, communication to whom?

22 MR. ROCKY: So this is communication
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1 through the entire chain. So, for

2 manufacturers, distributors, contractors,

3 dealers, and consumers and covers, again,

4 there is going to be a lot of discussion but

5 it is however we are going to get this message

6 out through the multiple different ways we are

7 going to have to do this.

8 MR. SACHS: I can see some PSAs.

9 MR. ROCKY: Yes, all sorts of

10 things.

11 MS. MEYERS: That was Harvey.

12 COURT REPORTER: That was Harvey? 

13 Thank you. If people could say their name,

14 that is a big help for me, just because the

15 table is so wide. Thank you.

16 MR. SACHS: I'm sorry.

17 MR. EISNER: Okay, let's go down

18 here, number two?

19 MR. SACHS: No.

20 MR. EISNER: Number three?

21 MR. SACHS: Yes.

22 MR. EISNER: Number four?
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1 MR. SACHS: No.

2 MR. EISNER: Number five?

3 MR. SACHS: No.

4 MR. EISNER: Six?

5 MR. SACHS: Yes.

6 MR. EISNER: Seven? Six yes?

7 MR. SACHS: Yes.

8 MR. EISNER: Seven?

9 MR. SACHS: No.

10 MR. EISNER: Nine?

11 MR. SACHS: Although seven leads to

12 some communication. Eight and nine are

13 assigned.

14 MS. SHEPHERD: I know, we are going

15 to put it in different colors.

16 MR. EISNER: Yes, we are going to

17 put them in two different buckets. Ten?

18 Now, if you disagree, say so when we

19 go up the chain. Number 11?

20 MS. SHEPHERD: No.

21 MR. EISNER: Twelve?

22 MR. PORTER: Sorry, this is Steve
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1 Porter.

2 MR. EISNER: Thirteen?

3 MR. PORTER: Was she supposed to add

4 nine to communication or not? No?

5 MR. RAWALD: That was going to be

6 part of --

7 MS. SHEPHERD: The information

8 collection. This is the stuff going out. Amy

9 Shepherd. Sorry.

10 MR. EISNER: Thirteen? Fifteen? 

11 Sixteen?

12 MS. NOLL: This is Elizabeth. 

13 Twelve and thirteen, are we conceptualizing

14 that, use of -- is the certificate, right? 

15 That to me, I thought was more on information

16 to the consumer. Is that not true?

17 MR. PORTER: Twelve?

18 MS. NOLL: Twelve and thirteen, I

19 think they are.

20 MR. DORIA: This is Jordan with

21 Ingersoll Rand. I mean I think they probably

22 belong there. I mean ultimately, I think they
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1 there is probably more consequence honestly. 

2 But it seems to me they would fit into some

3 kind of communications approach.

4 MS. SHEPHERD: Okay.

5 MR. EISNER: Fifteen? Sixteen? 

6 Seventeen? Eighteen?

7 Okay, next color. Collection of

8 information. Hurray. Number two.

9 MS. MEYERS: This is Karen, yes.

10 MR. EISNER: Number four, number

11 five.

12 MR. ROCKY: Yes.

13 MR. EISNER: Number seven?

14 MS. NOLL: This is Elizabeth. I was

15 thinking more along the lines of

16 investigation.

17 MR. ROCKY: Yes.

18 MR. EISNER: Does anybody disagree

19 with that?

20 MR. ROCKY: Yes.

21 MS. NOLL: Do you disagree with it?

22 MR. ROCKY: It should not be green.
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1 MR. EISNER: Okay, number seven. 

2 Number nine.

3 MS. MEYERS: This is Karen with

4 Rheem. Number seven is --

5 MR. RAWALD: This is Doug and it is

6 a consequence for sure but it could be another

7 bucket, if folks feel it necessary.

8 MS. MEYERS: This is Karen. I'm

9 okay. I am looking at these buckets. I think

10 you are right. It is a consequence.

11 MR. EISNER: Okay, number nine.

12 MR. RAWALD: All right, number nine

13 we just said wouldn't be in this group. It is

14 already created in the first place.

15 MR. EISNER: Number 11?

16 MR. SACHS: Yes.

17 MR. EISNER: Number 15?

18 MS. DEGITZ: I'm sorry, did I hear

19 yes on number 11?

20 MR. SACHS: Yes.

21 MS. NOLL: This is Elizabeth. 

22 Records retention would be for communication
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1 purposes, average.

2 MR. SACHS: This is for collection.

3 MR. EISNER: We are in collection.

4 MS. NOLL: I'm sorry.

5 MR. RAWALD: It's been a long day.

6 MR. EISNER: Fifteen? Sixteen? 

7 Seventeen?

8 MR. GIBBONS: Wait, can you go back

9 to fifteen? This is John, sorry.

10 So, restrictions on manufacturers,

11 is that a dealer comes to me and says hey, we

12 found a 13 SEER units in Alabama, did you ship

13 those to Alabama?

14 MS. NOLL: So, this is Elizabeth. I

15 think this one was more, as a group, we

16 decided that manufacturers are restricted from

17 selling 13 SEER in Texas. Shipping to -- I

18 apologize. Shipping to Texas. Is that a

19 restriction that we want to put on

20 manufacturers?

21 MS. MEYERS: So this is Karen with

22 Rheem. I think with the DOE guidance, how we
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1 are to rate our products, that this one should

2 probably have been removed from the list

3 because it is not really part of an

4 enforcement plan. It is more about how we

5 rate our products.

6 MR. WHITE: It is unlawful to deal

7 with someone who knowingly routinely violates. 

8 So, they are going to restrict you to ship to

9 distributors who knowingly violate. I think

10 it is a consequence.

11 MR. EISNER: Is this part of adding

12 a rulemaking requirement, imposing a

13 restriction?

14 MR. ROCKY: I think 15 and 16 fall

15 under consequences versus any other.

16 MR. EISNER: Consequences can only

17 be imposed if there is a rule restricting it. 

18 Is there already a rule making these

19 restrictions?

20 So, are we talking about ratings as

21 part of the enforcement program, two new

22 requirements?
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1 MR. DORIA: I mean I think that is

2 the same as all these -- Jordan with Ingersoll

3 Rand. That is the same as all these others. 

4 So, I don't see why. Your point is

5 well taken but ultimately all of this needs to

6 be created.

7 MR. PORTER: Steve Porter, Johnstone

8 Supply. I agree with the consequences piece

9 that Chuck brought up. I mean we have people

10 at our border states that are going to have

11 product that resides in the states that ship

12 across the borders and distribution centers

13 all across America, where we are going to ship

14 to all three regions. So, I mean this should

15 be a consequence, I guess.

16 MS. MEYERS: So, this is Karen with

17 Rheem. I might have misunderstood this. So,

18 does this say that restrictions to

19 manufacturers to ship some products to

20 distributors who have been found to knowingly,

21 routinely violate? Is that what this says?

22 MS. NOLL: This is Elizabeth. I
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1 think that it doesn't say anything and says

2 everything. We can create, if our enforcement

3 plan is such that we say it is unlawful to

4 sell -- I shouldn't say sell -- to ship a

5 noncompliant product to Texas and we believe

6 that that would have a significant impact on

7 our ability to enforce this rule, then that

8 should be part of our role.

9 If we think it is a consequence of

10 bad acting, then that is another way of

11 interpreting it or should be a new number.

12 And again, these are ideas and then

13 we need to evaluate whether they are

14 actionable.

15 MR. GIBBONS: This is John again. I

16 just think it is important we clarify 15 and

17 15 because of that very reason. I am from

18 Texas. To Steve's point, there is going to be

19 stuff in west Texas that is not compliant in

20 those four southwestern states that could

21 creep over the border.

22 But if we find those guys to, you
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1 know they are not being good players, we may

2 choose -- I say that kind of reluctantly. My

3 boss is gone, I will say it -- you may choose

4 not to ship. You know, just base 14 product

5 there. You may say too much is going over the

6 border, we are going to ship you 14 -- you

7 know, the southwest, any kind of southwestern8 compliant product.

9 MS. NOLL: So if I may, really

10 quickly. The word choose I think is striking. 

11 You make a decision, as opposed to us writing

12 a rule that requires you to do one action or

13 another. And that is what we are here to

14 decide.

15 MR. WHITE: This is Chuck White. My

16 lens on those two items is the rule that we

17 had up yesterday that is unlawful for

18 manufacturers to deal with knowing violators. 

19 So, it is not illegal for you to ship a

20 product to someone in Texas and put it in a

21 warehouse. It is illegal for someone to

22 install it in Texas but it is not illegal for
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1 you to ship it there and store it there.

2 So, the restriction you would have

3 would be if you know a distribution center or

4 a distributor that is colluding with a

5 contractor and doing all of this, then you

6 would be restricted from dealing with them

7 because it is unlawful. Otherwise, it is not

8 unlawful to put it in a warehouse in Texas.

9 MS. MEYERS: So, this is Karen with

10 Rheem. Isn't that already covered under the

11 prohibited acts? So, I am trying to

12 understand why we are making it part of an

13 enforcement plan when it is already covered.

14 MR. WHITE: Because it is part of

15 the enforcement.

16 MR. PORTER: So, what did it mean

17 though, Elizabeth, in your mind? Because you

18 are the one that put those up there.

19 MS. NOLL: So, that was Steve.

20 MR. PORTER: This is Steve Porter,

21 Johnstone Supply.

22 MS. NOLL: So, I think it was part
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1 of our discussion yesterday. I put it up

2 there they as a means of conversation. Does

3 it increase effectiveness by restricting

4 shipments to states that you knowingly cannot

5 install there?

6 I mean there are also states where,

7 as I learned yesterday, are for sales to other

8 countries. So, it may not even be a useful

9 tool.

10 MR. PORTER: So, Steve Porter,

11 Johnstone Supply. Neither one of these would

12 fit under the collection of the data or

13 information. Correct?

14 MR. EISNER: The question is whether

15 it fits under --

16 MR. PORTER: Neither one of these,

17 15 or 16 would fit under what we are trying to

18 work our way through. Because I don't want to

19 start a whole new process. I would like to

20 finish this one.

21 Do those two meet what we are trying

22 to classify among the three and whatever color
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1 that it is?

2 MR. RAWALD: And I would say no.

3 MR. PORTER: No. I say no as well.

4 MR. EISNER: Okay. Bryan was on 18.

5 MR. PORTER: Well, right.

6 MR. RAWALD: And this is Doug. What

7 is the consequence of that? I think we will

8 come back around to it.

9 MR. EISNER: Okay. So, we are up to

10 DOE investigation.

11 MR. PORTER: Investigation process.

12 (Simultaneous speaking.)

13 MR. RAWALD: Consequences can be

14 both positive and negative, just as a point of

15 information.

16 MR. EISNER: Four, five.

17 MS. NOLL: I'm sorry. Four was a

18 yes?

19 MR. PORTER: No.

20 MR. RAWALD: No, five yes.

21 MR. EISNER: Seven.

22 MR. RAWALD: Still in the
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1 consequence bucket for that one.

2 MR. DORIA: I'm sorry. This is

3 Jordan. I thought we had said before that the

4 investigative bucket included determination of

5 a violation.

6 MR. RAWALD: No, I --

7 MR. DORIA: No?

8 MR. PORTER: That is not how the

9 violation is determined.

10 MR. RAWALD: So, the method of

11 determination should be a part of the

12 investigation. The actual notice, if there is

13 going to be one, will be a consequence. So,

14 this is two pieces of that. So, we can talk

15 about it in both places.

16 MR. DORIA: No, no, that's fine.

17 MR. EISNER: So we are up to --

18 MS. SHEPHERD: Oh, look where we

19 are!

20 MR. PORTER: Fifteen and Sixteen. 

21 No.

22 MR. SACHS: It would be a
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1 consequence to the context we have been

2 talking about, I think. This is Harvey.

3 MR. PORTER: Well we are not

4 consequences. Let's talk about investigation.

5 MR. EISNER: The last thing is

6 consequences, then?

7 MR. RAWALD: Well let me -- this is

8 Doug Rawald. Let me throw out there that so

9 we put the record retention piece in this

10 earlier bucket but the production of such

11 records would be part of the investigation. 

12 So, either we should create another talking

13 point that is production of records that have

14 been retained or we should acknowledge that

15 that can actually be part of both pieces. 

16 Because the cost of producing records to me

17 that I have asked you to retain would be part

18 of my investigation.

19 MR. WHITE: So, just a sort of point

20 of order question. When this gets written,

21 will this be written in chunks where we talk

22 about putting these pieces or will it be
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1 written all one thing, so that all these

2 things will eventually be discussed? Or will

3 they be discussed in terms of here is a

4 consequences section and it belongs there? I

5 just don't know how it is going to be written

6 eventually.

7 MR. RAWALD: Right, Chuck. This is

8 Doug. So, we will try to take the most

9 logical, clear approach to fashion this rule

10 so that it can be clear. Because there is

11 nothing that has been more clear to me over

12 the course of the last four days that we want

13 clarity and simplicity.

14 So, while I think these buckets will

15 work for our sessions here, I am not going to

16 say that the frame of the rule will be

17 written. We will try to make the most

18 logical, clearly written rule possible. And

19 I am sure by the end of this, we will have an

20 idea of how that should be.

21 MR. WHITE: So, as long as it is

22 involved in the discussion, it will end up
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1 somewhere.

2 MR. RAWALD: It is going to end up

3 somewhere. Or we might dispense with it. We

4 might put it on the cutting room floor here in

5 the room but this is a way of us trying to

6 manage what is now a brainstorm of ideas.

7 MR. EISNER: Okay, so are we going

8 to the last category?

9 MS. NOLL: I'm sorry, this is

10 Elizabeth. Are we duplicating eleven for

11 Doug's purposes like we did eight and nine?

12 MR. EISNER: Do we want to create

13 another 12, duplicating number, and put that

14 in --

15 MR. RAWALD: I think it is -- I'm in

16 favor of some different category called record

17 production. I think that is what we are

18 asking to do.

19 MR. PORTER: So, you are asking for

20 a sixth bucket?

21 MR. RAWALD: No, no. This is part

22 of the investigative process.
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1 MR. PORTER: Investigative, okay.

2 MR. RAWALD: Yes, it would be this

3 records production.

4 MR. EISNER: Okay, consequences,

5 four. What do you want to do with four?

6 MR. RAWALD: Okay, so four is kind

7 of a last down the road thing, after we have

8 discussed everything else. So, let's not

9 categorize it.

10 MR. EISNER: Seven? Four and I

11 guess five. Seven.

12 MR. RAWALD: I mean I absolutely

13 would pick consequence.

14 MR. EISNER: Sixteen. All right,

15 are you imposing a consequence to certain

16 contractors or to contractors in certain

17 states? I thought it was certain contractors.

18 MS. MEYERS: This is Karen with

19 Rheem. I just want to repeat that I think

20 sixteen is already covered by the Prohibited

21 Acts Rule. Seventeen is not because

22 Prohibited Acts Rule only -- already covers
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1 manufacturers.

2 So, I still think that sixteen

3 should be removed from the list.

4 MR. RAWALD: When we go back around

5 the merits, Karen, this is Doug, we will slice

6 it up.

7 MR. EISNER: So again, this is

8 certain states or is it certain distributors?

9 MR. RAWALD: And I think -- this is

10 Doug. I think we can ferret that out more

11 when we discuss them at this point. So, if we

12 can just put it in the bucket for the moment

13 and feel like we have accomplished that.

14 MR. PORTER: The restrictions on the

15 manufacturers would certainly take care of the

16 distributor.

17 MR. EISNER: So, I am not sure we

18 are agreeing on seventeen.

19 MR. ROCKY: So, I think seventeen is 

20 right prior to the consequences and we can

21 discuss what that means later on. And I think

22 eighteen, or nineteen and twenty --
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1 MR. RAWALD: Those are both

2 consequences to me. And then the thing that

3 we have talked about and kind of put on the

4 list is a new prohibited act, especially in

5 civil penalties against non-manufacturers. 

6 So, that should be a consequence that we put

7 on the table as well, for what it is worth.

8 Everyone looks really tired. We

9 were all so happy.

10 MR. EISNER: Do we want to go to the

11 next step on this?

12 MR. GIBBONS: Question.

13 MR. PORTER: No.

14 MR. GIBBONS: Something didn't get

15 highlighted.

16 MR. RAWALD: Yes, that is the look

17 back provision. And we feel that that isn't

18 in the five categories and probably should be

19 something that we deal with at the end of all

20 this because of the concern that it would

21 create an artificial safety blanket and we

22 want to burn our bridges, as Amy said.
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1 MR. BALLO: This is Tim. I have a

2 question about the FTC label. I am not sure

3 what level of detail we really want to get

4 into in terms of making changes on that. My

5 sense is that FTC would value us handing them

6 a label that we all agree to that this is what

7 the label should look like. If others agree,

8 that would be valuable, I am wondering if we

9 want a subgroup to go through and Photoshop or

10 Illustrator or some other software program to

11 come up with what we would want the label to

12 look like and then bring that to the whole

13 group.

14 MR. GIBBONS: I nominate Karim.

15 MR. LECHTER: This is Jordan with

16 Ingersoll Rand. I am not against that. I

17 guess I am not sure that it even with what we

18 now know, I am not sure that it is as high a

19 priority item anymore. I'm not foreclosing it

20 by any means.

21 MR. RAWALD: Right. So this is

22 Doug. So, I guess my position would be that
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1 the label, as it is, we can live with in the

2 short term. So, I would rather not spend a

3 lot of this group's time on discussing how to

4 make the label better, if we can better spend

5 it on things that are more important to me, I

6 would appreciate that. But I don't want to

7 put my priorities before the group.

8 MR. PORTER: This is Steve Porter,

9 Johnstone Supply. Since ACEEE is obviously

10 saving energy by shutting off the air

11 conditioning in this room, I vote we end this

12 meeting.

13 MR. LATTANZI: Second.

14 MS. SHEPHERD: This is Amy from

15 AHRI. Can I just ask if it would be helpful,

16 because it would be for me, so instead -- now,

17 I love that we have the colors. It is very

18 beautiful. But can we now go and do what I

19 think we wanted to do in the beginning, we

20 will still have labeling, and have everything 

21 -- so overnight and have everything under

22 labeling kind of under labeling?
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1 MR. RAWALD: This is Doug. Can I

2 suggest that Laura and I do that after

3 everyone departs?

4 MS. SHEPHERD: Yes, that is what I

5 am suggesting.

6 MR. RAWALD: Yes, so you guys could

7 go ahead and go and then we will do the

8 administrative stuff, make it nice, and then

9 we can pick up the discussion tomorrow.

10 MS. SHEPHERD: Yes.

11 MR. WHITE: I vote we keep Doug on

12 the committee one more day.

13 MR. RAWALD: Like the Ultimate

14 Survivor.

15 (Simultaneous speaking.)

16 MR. SACHS: I have a sense about the

17 air conditioning. It was very cold in the

18 office suite yesterday. So, they called the

19 engineers and had the thermostat reset, not

20 knowing that we had a large group coming in

21 today. So, you can blame me. The air

22 conditioning usually works.
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1 MR. RAWALD: Well, I just want to

2 say from the Department's point of view, a

3 thank you to Harvey for coming up with a room

4 for us, volunteering a room when we had no

5 room or space because we would have been out

6 in the hot sun before that. So, that was

7 really appreciated.

8 Tomorrow, we will be back in

9 Forrestal, where there will be a hum but at

10 least we will have air conditioning.

11 So anything that went wrong today

12 was clearly the Department's fault, not

13 Harvey's, because we are responsible for

14 making sure that this runs smoothly and well

15 for all you folks. And I am sorry for any

16 inconveniences there were for those folks on

17 the webinar but we will do better.

18 (Whereupon, the above-entitled

19 matter went off the record at 4:33

20 p.m.)

21 

22
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come 11:16 69:10

73:18 75:11 76:15

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100:15 103:12

116:16 120:8

125:19 133:9

144:18 150:6

155:3,21 163:2

165:19 176:1,16

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201:22 206:19

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230:4 233:9

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260:11 268:7,9

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148:5 154:12

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221:18 266:13

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279:22 290:15

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commerce 191:3

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commercial 14:3,6

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committees 70:13

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compressor 15:10

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conceptualizing

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condense 50:13

condenser 92:13

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106:17 107:8,12

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124:1,11 125:3

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131:11,13,14,16

138:14,18,20

139:18 140:16

144:5 172:17

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239:12 240:10

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189:18 214:16

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236:1,7 237:6

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conduct 15:20

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conference 7:21

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confidence 37:16

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24:3 25:17 30:18

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288:15 291:22

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67:7,14 69:7 70:4

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311:7 321:21

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114:17 124:9

140:12,15 148:22

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25:12 26:14,16

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resolution 73:16

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216:6 220:12

221:3 224:14

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238:22 239:19

251:1,12 254:6,10

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331:5 334:7

336:14 337:20

339:21

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roadmap 75:21

76:12 77:2 80:2,7

81:3

roadside 241:3

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rock 284:10

rocks 227:22

Rocky 2:2 9:17

48:11,11 51:10,15

52:3 59:12,12

121:13,13 122:6

122:20 123:1

205:17,20 259:20

269:19,22 270:20

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315:4 317:21

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319:9 322:12,17

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110:14 115:20

118:3 125:11

132:7 133:15

139:6 143:11

144:12 162:21

167:4,6 208:13

212:16 221:7

235:2 310:20

335:4,5 340:11

342:3,4,5

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296:16

route 182:17,20

routine 23:6

190:22 280:2

routinely 277:14

278:10 325:7

326:21

row 222:17

rule 17:8 75:22

77:17,18 153:15

169:12 185:8

207:9 232:9 264:6

266:1 273:14,15

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286:2,19 287:9,13

287:17 310:21

325:17,18 327:7

328:12,16 334:9

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336:22

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76:2 80:6 106:13

195:22 230:2

248:8 268:21

269:13 271:4,8

284:1,3 285:14,20

286:4 288:5

291:17 292:11

300:18 317:18

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74:14 76:18 80:4

108:7 118:22

160:13 167:11

187:4 190:6

224:17 242:7

286:8,11,22 287:8

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run 11:4 12:6 62:2

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running 196:15

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rural 176:20

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13:22 14:7 21:18

21:20 22:8,17

32:4,16 34:16

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117:7 118:13

119:4,20 126:7

127:6,12 153:2,17

226:6 229:1,14

234:17 235:10

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173:2 179:14

185:21 190:20

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271:14 277:5

314:17 342:2

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325:9 326:21

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308:17 325:7

violating 264:15

308:8,9

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210:16 219:11

238:12 256:15

264:10 266:11

276:2 283:5,5

304:3 306:7,16,17

307:6 308:2,5

309:3,15,18 311:4

332:5,9

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302:14 304:20

305:16,20 306:3,8

306:10 307:12,18

309:17 311:9

violator 190:22

232:21 249:19

279:2 280:2

310:16

violators 328:18

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308:7

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299:8

visiting 64:1

visitors 63:18 64:1

64:2

visits 67:16,17

visual 237:2

visualize 267:12

visualizing 267:9

visually 296:20,22

vital 76:3 79:12

void 253:7

volume 16:10

21:16 46:18 76:13

81:15,16 82:3,10

82:14,19 87:8

89:6,20 92:16

93:10 94:13,15,17

96:14,22 97:20

98:6,22 99:10

100:12 101:6,20

102:4,16 104:8

105:2,15 110:15

114:5,9,21 116:8

117:15 118:18

128:19 137:15

140:1,12 141:13

145:17,21

volunteering 120:7

342:4

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297:21 298:6,11

299:4 340:11

341:11

voting 299:18

VSM 63:19

vu 116:1 141:5

W

wait 212:12 324:8

waiver 258:13

waivers 126:19

258:11

walk 40:5 65:6

177:21

walked 181:1

walks 238:1

walkthrough 237:2

walls 7:19

want 4:6,20 5:7

10:18 11:16,19

15:15 16:22 18:4

18:19 20:3 21:21

24:12 27:21 31:15

32:21 38:8,22

39:9 40:6 48:1,4

60:13 61:7,11

63:2,4 64:8,16

65:21 66:17 69:16

75:18 81:8,10,21

83:5 84:22 85:13

87:11 91:3,7,10

91:22 93:5 96:2,3

97:5,6 106:15

108:11,11 109:1

109:18 115:3,7,9

116:3,4 120:11

121:4,10 123:12

123:12,18,21

124:18 125:10

126:8 129:19

130:3 131:4 133:3

133:4,4,13 135:19

136:16,17 137:5

138:10,19,20

139:9 140:3,5,8

143:19 145:15

146:19 153:3

157:20 158:22,22

159:2,4 160:4,12

168:1 169:7 170:9

171:17 176:16,17

176:19 178:18,19

180:2 184:9 185:9

185:18 186:1,2,4

190:6 191:8,9

201:5,18 203:4

205:2 213:7 214:6

214:18 215:4,8,14

218:9 219:6,20,22

220:7,15 222:19

227:20 228:6

233:10 237:14

238:5 241:17

247:13 248:2,11

249:22 251:19

265:4,11 268:13

268:13,16 269:10

273:1 275:8 276:4

276:6,13 278:17

278:22 284:14

285:7 286:5,19

287:7 288:16

291:5,19,22 292:2

292:21 295:5,6

296:8 299:4 300:2

300:17,18 306:7

306:13 311:11,12

313:14 315:16

317:5 324:19

330:18 334:12

335:12 336:5,19

338:10,22 339:3,9

339:11 340:6

342:1

wanted 73:8 80:21

83:22 84:19 86:14

108:3 127:13

145:12 215:12

242:10 257:10

271:10 284:5

340:19

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313:11

wants 5:2 7:9 9:5

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149:19 150:4,7,11

161:10 215:18

278:16 279:6

307:8 311:21

warehouse 55:22

161:17,20,21

162:21 164:7

328:21 329:8

warrant 218:10,12

218:16 219:22

220:4

warranted 210:6

warranties 156:17

202:7,7 204:8

205:15,22 206:3

206:10 252:14

warrants 218:13,20

warranty 148:3,6,9

149:6,11,18,19

150:17 151:5,16

151:18,22 152:5

152:19,22 153:5

155:19 156:10,21

157:4,8,13 168:5

193:8 195:1

199:21 202:15,17

203:13,14 204:1,6

205:13,19 206:13

253:6,21 254:4

Washington 1:12

wasn't 73:1 147:4

153:9

wasting 256:4

water 7:6 217:8

241:15

water-cooled 45:13

waterproof 247:12

waters 85:1

Watson 5:8

way 5:1 9:8,12 15:5

15:20 28:12 31:3

33:4,6 34:8 39:12

42:4 45:22 48:3

49:10 53:21 57:14

60:13 62:19 66:4

72:9 75:20 78:18

79:4 87:5 98:4

100:4 102:6 105:9

109:8 116:13,22

117:10 119:18

122:8 133:6,6

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140:6 141:5

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286:19 289:21

297:13 342:11,19

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243:20 252:21

265:14 271:18

290:4 291:19

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28:9 31:13 74:19

78:2 105:18,18

161:6 162:19

163:14 168:16

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286:21,22 287:9

287:10,18 291:2,3

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86:12 88:17 89:12

96:8 106:9 147:5

190:21 192:4

193:15 209:9,15

210:11 211:12

214:22 259:21,21

260:10 278:4

279:5 280:8 305:5

328:17 330:1,7

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10:24 69:12

10:40 69:13

100 178:7 274:7,10

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110:16 111:5,8,22

112:1,20 113:12

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14.5 122:16 128:3

147 3:16

14th 1:11

15 102:11 128:3

185:18 186:20

223:14 318:12,18

323:17 325:14

327:16,17 330:17

15-minute 69:9

16 26:12,12 102:11

318:18 325:14

330:17

17 318:18

18 181:14 198:15

198:22 270:8

285:2 318:18

331:4

1920s 7:5

1982 85:20

1983 85:21

1A 299:13,15,16,17

2

2 272:20

2:37 239:3

2:57 239:4

20 15:20 18:9 51:19

69:10 175:17

198:22

20,000 67:17

200 49:1

200,000 189:1

2009 236:10

2012 236:10

2014 1:8 64:11

2015 236:10 270:19

272:19,20

2016 270:3,20

272:5,10

20th 74:9 75:20

21 198:15 204:10

21,000 64:6

210/240 14:16

2500 12:16

25th 270:3

27 1:8

3

3:44 289:21

3:45 289:22

3:52 297:13,14

30 18:10 28:9

177:21,22

302 3:20

31st 243:19

35,000 64:10

36 147:10

38 12:12 38:12

4

4 3:6

4:33 342:19

40 189:1

400 12:12 70:3

152:8,8

400,000 67:17

429.16 90:17 91:19

45 122:15 123:10

48 19:8

5

50 13:4,13 233:5

50,000 48:16

500 12:18 231:22

500M 189:9

529 1:11

55 206:22

6

60 13:13 152:6

206:22

60,000 52:1

60,348 51:19

60,349 50:12

600 1:11

65,000 13:14 14:11

7

70 178:1 207:1

74 3:11

8

80 178:1

800 274:16 302:21

9
386 

C E R T I F I C A T E 

This is to certify that the foregoing transcript 

In the matter of: Public Meeting 

Before: us DOE 

Date: August 27, 2014 

Place: Washington, D.C. 

was duly recorded and accurately transcribed under 

my direction; further, that said transcript is a 

true and accurate record of the proceedings. 

(202) 234'""33 

Court Reporter 

NEAL R. GROSS 

COURT REPOmRS~TRANSmBERS 

1323 RHODE ISLAND AVC.., N.W. 

WASHINGTON, D.C. 20005-3701