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 U.S. DEPARTMENT OF ENERGY

 OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY

 APPLIANCE STANDARDS AND RULEMAKING

 FEDERAL ADVISORY COMMITTEE

 COMMERCIAL AND INDUSTRIAL PUMPS WORKING GROUP

 U.S. Department of Energy

 Forrestal Building

 1000 Independence Avenue, S.W.

 Washington, D.C. 20585

 Tuesday, April 29, 2014

 9:11 a.m.

 Reported by: Chaz Bennett,

 Capital Reporting Company
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1 A P P E A R A N C E S

2 FACILITATOR:

3 DOUG BROOKMAN

 Public Solutions

4

PARTICIPANTS:

5

 LUCAS ADIN

6 DOE

7 JEFF ALASCIO

 ABB

8

 ROBERT BARBOUR

9 TACO

10 ALEX BOSENBERG

 NEMA

11

 ROB BOTELER

12 Nidec Motor Company

13 CHARLES CAPPELLINO

 ITT Corporation

14

 BRIAN CARLSON

15 Eaton Corporation

16 GREG CASE

 Hydraulic Institute

17

 KATIE COUGHLIN

18 Lawrence Berkeley National Laboratory

19 DAN DELANEY

 Regal Beloit

20

 TOM ECKMAN

21 Northwest Power and Conservation Council

22
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1 A P P E A R A N C E S (Cont.)

2 PARTICIPANTS (Cont.):

3 GARY FERNSTROM

 representing California investor-owned

4 utilities

5 MARK HANDZEL

 Xylem

6

 JIANGANG HU

7 Rockwell Automation

8 ALBERT HUBER

 Patterson Pump

9

 BETSY KOHL

10 DOE General Counsel

11 CHRISTOPHER LAU

 Navigant

12

 EMILY MARCHETTI

13 Energetics Incorporated

14 HARRY MASSIE

 NEMA

15

 JOANNA MAUER

16 Appliance Standards Awareness Project

17 BRENT McMANIS

 Baldor Electric

18

 LAURA PETRILLO-GROH

19 AHRI

20 DOUGLAS POTTS

 American Water

21

 CHARLES POWERS

22 Flowserve Corporation
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1 A P P E A R A N C E S (Cont.)

2 PARTICIPANTS (Cont.):

3 CALLIE REIS

 Navigant

4

 ARNIE SDANO

5 Pentair

6 LOUIS STARR

 Northwest Energy Efficiency Alliance (NEEA)

7

 STEVE THOMPSON

8 TACO

9 GREG TOWSLEY

 Grundfos USA

10

 MEG WALTNER

11 Natural Resources Defense Council

12 DAN WEINTRAUB

 Navigant

13

 SARAH WIDDER

14 Pacific Northwest National Laboratory

15 ALISON WILLIAMS

 Lawrence Berkeley National Laboratory

16

 * * * * *

17

18

19

20

21

22
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1 P R O C E E D I N G S

2 MR. BROOKMAN: Good morning, everyone.

3 Welcome. This is the fifth meeting of the

4 commercial and Industrial Pumps Negotiated

5 Rulemaking Working Group. Today is April 29th,

6 2014, here in Washington, D.C., in the Forrestal

7 Building. My name is Doug Brookman from Public

8 Solutions of Baltimore.

9 So nice to see you here this morning.

10 We're eager to launch straight into it. A few

11 members are going to be late based on weather and

12 other kind of travel delays, but we expect them to

13 be joining us here shortly.

14 Maybe we'll just start with doing

15 introductions around the room. To my immediate

16 left?

17 MR. ECKMAN: Tom Eckman, Northwest Power

18 and Conservation Council.

19 MR. FERNSTROM: Gary Fernstrom

20 representing the California investor-owned

21 utilities, which are Pacific Gas and Electric,

22 Southern California Edison, San Diego Gas and
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1 Electric, and the Southern California Gas Company.

2 MR. CAPPELLINO: Charlie Cappellino, ITT

3 Corporation.

4 MR. CASE: Greg Case, Hydraulic

5 Institute.

6 MR. HANDZEL: Mark Handzel from Xylem.

7 MR. HUBER: Al Huber, Patterson Pump.

8 MR. BARBOUR: Bob Barbour, TACO.

9 MR. DELANEY: Dan Delaney. I'm sitting

10 in for Howard Richardson and Paul Lin from Regal

11 Beloit.

12 MR. BROOKMAN: Dan, this is the first

13 time you've joined us, I believe.

14 MR. DELANEY: Yes, first time, first

15 time joining you, yes.

16 MR. BROOKMAN: Give us a 20-second bio?

17 MR. DELANEY: Sure. So I sit on the

18 NEMA MG1, both the section and the TC groups. Just

19 recently I'm part of the working group that is

20 sitting on the extended product approach, the IEC

21 version, very similar to this, that is dealing

22 with drives and motors and, of course, the motor-
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1 driven extended product.

2 MR. BROOKMAN: Thank you. Glad you

3 could join us.

4 MR. DELANEY: Thank you.

5 MR. STARR: Louis Starr, Northwest

6 Energy Efficiency Alliance.

7 MS. MAUER: Joanna Mauer, Appliance

8 Standards Awareness Project.

9 MS. WALTNER: Meg Waltner, Natural

10 Resources Defense Council.

11 MS. KOHL: Betsy Kohl, DOE general

12 counsel.

13 MR. ADIN: Lucas Adin, DOE.

14 MR. BROOKMAN: Please stand up.

15 MR. LAU: Christopher Lau with Navigant

16 Consulting.

17 MS. COUGHLIN: Katie Coughlin, Lawrence

18 Berkeley Laboratory.

19 MS. WIDDER: Sarah Widder, Pacific

20 Northwest National Laboratory.

21 MR. WEINTRAUB: Dan Weintraub, Navigant.

22 MS. WILLIAMS: Alison Williams, Lawrence
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1 Berkeley National Laboratory.

2 MR. BROOKMAN: Please stand up, Arnie.

3 These won't all be on the mike. We'll just --

4 MR. SDANO: Arnie Sdano, Pentair.

5 MR. BROOKMAN: Thank you.

6 MR. CARLSON: Brian Carlson, Eaton

7 Corporation.

8 MR. ALASCIO: Jeff Alascio, ABB.

9 MR. McMANIS: Brent McManis, Baldor

10 Electric.

11 MR. BOTELER: Rob Boteler, Nidec Motor

12 Company.

13 MS. PETRILLO-GROH: Laura Petrillo-Groh,

14 AHRI.

15 MR. HU: Jiangang Hu from Rockwell

16 Automation.

17 MR. BOSENBERG: Alex Bosenberg, NEMA.

18 MR. MASSIE: Harry Massie with NEMA.

19 MS. REIS: Callie Reis, Navigant

20 Consulting.

21 MR. THOMPSON: Steve Thompson with TACO.

22 MR. BROOKMAN: Again, welcome, all of
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1 you. Thanks so much for being here so we can get

2 an early start on the meeting today. We didn't

3 prepare in advance sort of a written-up formal

4 agenda, but I've got a list of items that I know

5 we are going to cover or need to cover. And I'm

6 just going to read through these. And then Lucas

7 Adin is going to start us off with some overview

8 comments and maybe some more detailed ideas about

9 the workload that is ahead, scheduling, a variety

10 of things like that.

11 So we made really good progress at our

12 last meeting.

13 Alex Bosenberg?

14 MR. BOSENBERG: I'm sorry. Could we get

15 the volume raised a little on the AV?

16 MR. BROOKMAN: Okay.

17 MR. BOSENBERG: It's hard to hear you

18 guys in the back.

19 MR. BROOKMAN: Is that better?

20 MR. BOSENBERG: Everybody was pretty

21 quiet.

22 MR. BROOKMAN: Wow. Okay. Thanks,
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1 Alex.

2 MR. BOSENBERG: Not as loud as usual.

3 MR. BROOKMAN: Okay. We made really

4 good progress at our last meeting, a lot of back

5 and forth on metrics that I think yielded a lot

6 more understanding, a lot more recognition about

7 the way that might go. I've had a few

8 conversations this morning with folks. I continue

9 to hope we'll make big progress on that in the

10 next two days. We clearly established scope. And

11 that was a big, big step for the Working Group.

12 And so I think we're well-positioned, but,

13 consulting with Lucas, we have a lot to do in the

14 remaining meetings. And -- what?

15 MR. HANDZEL: I don't think your mike is

16 on.

17 MR. BROOKMAN: I think I'm talking right

18 into it.

19 A lot to do in the next several

20 meetings. So I would like to encourage all of us

21 to see if we could stay really focused and

22 productive in these two days.
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1 On my list, based on consultations with

2 Lucas, here are the beginnings of what

3 we would try and cover in the next two days: an

4 overview of the items to cover; the pathway to

5 finalizing the term sheet; an overview on progress

6 to date; and potentially a report, an interim

7 report, to ASRAC; the process for establishing a

8 test procedure; and related to the schedule, any

9 additional things that we might do to meet the

10 schedule and to succeed in finishing this work;

11 the process to establish and set the energy

12 efficiency levels and a variety of analyses, which

13 can be quite detailed and complicated - market and

14 technology, a screening analysis, engineering

15 analysis, and the like. And we'll have

16 presentations on those elements today.

17 And then if we get through all of that

18 today, which would be quite a lot, there are more

19 items for us to take up tomorrow but just try and

20 finish on these items as well. But that's all I

21 wanted to say here at the outset.

22 Before I turn it over to Lucas, any
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1 other member of the Working Group that wishes to

2 make an opening remark?

3 (No response.)

4 MR. BROOKMAN: Okay. Seeing none, Lucas

5 Adin?

6 MR. ADIN: Thanks, Doug. So --

7 MR. BROOKMAN: One more thing. We would

8 welcome, we want to welcome, everyone who has

9 joined us via the web. We have individuals who

10 have done that. And also I would remind everyone,

11 please turn your devices on silent mode, if you

12 would, if you haven't done that already.

13 Lucas?

14 MR. ADIN: Alright. Thanks again, Doug,

15 for getting us started off.

16 I just wanted to briefly go over what we

17 are planning to cover today. And what we had in

18 mind is the general pathway from here towards a

19 prospective term sheet.

20 As I think we are all acutely aware,

21 there are only two in-person meetings left after

22 this one. So there is still a lot of ground to
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1 cover. And we have done a lot since the last

2 meeting. We have performed a lot of analysis. And

3 we're going to present that today and explain

4 everything that we have managed to find out as far

5 as the potential energy savings related to these

6 pumps and some preliminary estimates and those

7 kinds of things. And we'll explain that all

8 coming up in a little bit. But, you know,

9 obviously we still have to figure out things like

10 test procedure and metric and that kind of stuff.

11 So there's still a lot of ground to cover. And I

12 think, really, what I wanted to do in bringing all

13 of these up at the outset was to make sure that

14 the way that we're going to present this today

15 makes logical sense, that it will be in an order

16 that is useful to everyone here and that we can

17 make sure that we're making some progress towards

18 answering some of these big questions that we have

19 been moving towards answering over the last

20 several meetings. Maybe in some cases, the

21 context has been a little bit unclear. It is just

22 hard because there isn't really concrete
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1 information yet to make a decision upon.

2 So what we were planning to do was start

3 out with some slides that discuss in more

4 specificity the process for setting standards for

5 these pumps that we're considering standards for.

6 And in a more precise way than we have in the

7 past, we have given some general overview of how

8 the standard-setting process works for a typical

9 DOE standard for any type of product. And maybe

10 that was useful. Maybe it wasn't. I don't know.

11 It was very general.

12 But we're going to talk a little more in

13 terms that I think should be familiar to the

14 people in this room, so things like MEIs and C15 values and that kind of thing. And so hopefully

16 that will kind of put all of this in context and

17 we can step away from the complex issues

18 associated with measurement and metric and those

19 kinds of things because they're obviously

20 important and they'll become vital to making this

21 all work once we have decided on standard levels,

22 but we can explain how the standard setting itself
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1 would work outside of this discussion about

2 metric. And our hope was that that would provide

3 some better context for the meaning of the metric

4 and where that will come into play a little bit

5 later on.

6 So we are planning to revisit the whole

7 metric thing. We were just figuring we would do

8 it tomorrow after we have had some more time to

9 present information about the standard, how it

10 will be set, and some of the work that we have

11 done since the last meeting related to the

12 standard.

13 So that is kind of the up-front stuff.

14 We have done a substantial amount of work on some

15 of the general area that we refer to as the

16 engineering analysis. So this is our market and

17 technology assessment. What the market looks like

18 now, the kinds of technologies that are out there,

19 we do a screening analysis. So we'll look at the

20 technologies that have been screened in or out

21 from improving the efficiency of a pump. And then

22 we'll talk about basically how we arrived at what
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1 we call the efficiency cost curve, so how much it

2 costs to get each additional increment of

3 efficiency improvement for a given pump.

4 So that alone is actually quite a lot of

5 material. I am hoping we can cover all of it

6 today. Assuming that we do, we might get into or

7 cover as much as we can of the preliminary

8 lifecycle cost analysis. We have had an

9 opportunity to do that for most of the pump

10 classes that we have established scope for for

11 this rulemaking. There are a couple that we don't

12 have enough data on yet to go that far in the

13 analysis with yet. We're hoping to be able to do

14 that pretty soon once we get a little bit more

15 data.

16 And I'll emphasize up front that these

17 are preliminary numbers. They still need some

18 refinement. In all likelihood, there are things

19 that may be adjusted in the engineering analysis

20 based on your input or other things that we

21 learned in the coming months that will affect the

22 lifecycle cost and some of these other downstream
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1 things.

2 So just keep in mind that, you know,

3 this is all very preliminary, but we want to start

4 getting feedback as soon as possible. It's very

5 important that we know which assumptions are

6 correct; which data could be better; which

7 calculations, if any, could be improved, that kind

8 of thing. So we are looking for and are very

9 interested in your responses to these as we go

10 through them.

11 So to the extent you have questions or

12 feedback as we go along, I really, of course,

13 encourage you to let us know. And then, you know,

14 of course, after this meeting and the meeting

15 tomorrow, continue to provide us with feedback.

16 There is a lot, as I mentioned before, a

17 lot of information. So it may take a little while

18 to kind of digest it all. So, you know, I don't

19 necessarily expect that we're going to have

20 everything we need to know today.

21 So that kind of gets into the next item

22 I wanted to cover, which was our general sense of
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1 how things will proceed from here towards our term

2 sheet. And it's kind of hard for us to know

3 exactly since it obviously depends a lot on what

4 we decide in the next couple of days. We still

5 have to decide a metric. I didn't really talk

6 about that again, but that's what we're planning

7 to do tomorrow, is to revisit the whole metric

8 discussions. Hopefully we can come to some

9 agreement on what we're going to do there. We do

10 have some more slides to show. It will really

11 just be kind of a rehash of what we talked about

12 last time with some additional points. So

13 hopefully we can get that wrapped up in the next

14 couple of days.

15 So, going from there, I mean, once we

16 have that established, I mean, we still do need to

17 formalize all of these things in a test procedure.

18 And as of right now, that's more on DOE's side.

19 I'll talk about that in a little bit. But we do

20 have a lot of analysis to do still for the

21 standard. So we'll present a lot today. It is

22 preliminary. There will be refinements to that.
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1 But there are several stages that go beyond that.

2 There's manufacturer impact analysis and national

3 impact analysis and a number of other things that

4 are important to deciding whether a particular

5 standard level is economically justified.

6 So there's still more to go. And we're

7 going to start presenting things as we're done

8 with them and as we're ready to receive feedback

9 from you all on them. So that may happen between

10 meetings. And things will probably start

11 happening at a more rapid pace. And so it's

12 possible we might need to think about having some

13 kind of -- I don't know whether it's an actual

14 face-to-face meeting in between our scheduled

15 meetings. I'm not sure whether logistically that

16 will be feasible, but, at the very least, we might

17 consider doing webinars or something that allows

18 everyone to see what we have, provide input, that

19 kind of thing.

20 It's been done before for some of our

21 other negotiated rules. And given how much we

22 have to cover in the next couple of months, in all
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1 likelihood, that is going to be probably the best

2 way for us to bring in some of that feedback and

3 to present information to you all. But we don't

4 necessarily have to talk about that now. We can

5 talk about that towards the end of the meeting

6 when we're thinking about, you know, some of the

7 downstream logistics.

8 So the only other item I had up front

9 was regarding -- oh, I'm sorry. I'll go back to

10 one other item Doug had mentioned earlier, which

11 was the possibility of doing an interim progress

12 report to the ASRAC. This is something that some

13 of the other negotiated rulemaking working groups

14 have done. And basically all it is is a summary

15 report of what the group has done so far and what

16 we think we need to do to get to the term sheet

17 that we have agreed to do through our ground rules

18 and essentially just giving the ASRAC an update

19 and an opportunity for them to comment on what we

20 have done and provide us with any comments or

21 feedback, as I understand it.

22 Tom, I don't know if you have any
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1 thoughts on that.

2 MR. ECKMAN: That's it.

3 MR. ADIN: That's it? Okay. So that

4 might be helpful. Doug has agreed to prepare one

5 of those for us. So it might be something that --

6 I don't know what -- we haven't really talked

7 specifically about what kind of timeline in which

8 we do that, but I guess that depends somewhat on

9 when the ASRAC is planning to meet next.

10 MR. ECKMAN: Right.

11 MR. BROOKMAN: Tom Eckman, please?

12 MR. ECKMAN: So, as far as I know, that

13 hasn't been tied down yet.

14 MR. ADIN: Okay.

15 MR. ECKMAN: We've made several attempts

16 at getting a date, but --

17 MR. ADIN: Right.

18 MR. ECKMAN: -- none of those worked

19 out.

20 MR. BROOKMAN: But just to clarify one

21 thing, Tom, you said previously that ASRAC has the

22 capacity to meet informally. Maybe that's the
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1 wrong word but to find ways to consider issues as

2 they need to.

3 MR. ECKMAN: Yes.

4 MR. BROOKMAN: Yes. So as needed, then,

5 we know we can get to ASRAC?

6 MR. ECKMAN: Right. They can arrange

7 for a webinar teleconference. They just need a

8 quorum, which is what has been difficult to

9 process.

10 MR. BROOKMAN: Okay. Got it.

11 MR. ADIN: Okay. Thanks.

12 So the other item related to that is

13 actually getting back to the test procedure. And

14 so, as I understand it, the authorization given to

15 us by the ASRAC is related really more to

16 standards. And so, I mean, obviously there are

17 certain elements of the test procedure, like the

18 metric that we have to talk about and agree upon

19 in the course of getting to an agreed-upon

20 standard.

21 But we don't necessarily negotiate the

22 test procedure itself. Really, I mean, I guess it
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1 depends on how you look at it. The metric is

2 inherent to the test procedure. But the way that

3 that otherwise would have worked is DOE would have

4 -- at least as it is right now, DOE will write up

5 a proposed rule. And certainly it will

6 incorporate the decisions made by this working

7 group, but it's not specifically in the term sheet

8 that the test procedure will be this or that.

9 So I don't know that that's something

10 that the ASRAC could give us authorization for, if

11 it would be worthwhile to consider that.

12 MR. ECKMAN: If that's something the

13 Workgroup thinks would benefit the negotiations,

14 I'm sure ASRAC would consider it. If that's a

15 point of contention or needs consensus, then

16 certainly ASRAC would consider that to move the

17 process forward.

18 MR. ADIN: Yes. So just another item to

19 mention, I'm sure we could mention in our progress

20 report that that is something that if the Working

21 Group thought that was worthwhile of asking of the

22 ASRAC, we could put that in there as well.
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1 So those are the main items. I mean, I

2 guess before we start into actual substance here,

3 the only thing I wanted to ask one more time is

4 whether anyone had any particular items that they

5 wanted to see from us today, questions they wanted

6 answered. I mean, I'm sure a lot of it after the

7 last few meetings is probably more related to the

8 metrics since that is the last thing we talked

9 about. And, you know, we do have stuff to cover

10 for that, probably tomorrow. But, I mean, at

11 least as far as general items or sequence of

12 things we're going to cover, if that all sounds

13 reasonable, I mean, I'm open to any further

14 comments or, otherwise, we'll get right into it.

15 (No response.)

16 MR. ADIN: Okay. All right. So if the

17 team is ready, I guess we can start with our

18 material.

19 MR. BROOKMAN: Dan Weintraub is going to

20 present.

21 MS. WALTNER: Just a question.

22 MR. BROOKMAN: Meg Waltner, please?
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1 MS. WALTNER: Do we have printed copies

2 of the slides today?

3 MR. ADIN: They're coming.

4 MS. WALTNER: Okay.

5 MR. ADIN: Yes. I'm sorry.

6 MS. WALTNER: That's okay.

7 MR. ADIN: A little bit of a logistical

8 issue this morning, but they should be here soon,

9 within the hour. Yes.

10 MR. BROOKMAN: Let me welcome Chuck

11 Powers. Glad you could join us, Chuck.

12 MR. ADIN: Right. So we are having

13 copies of these slides printed, and they should be

14 here soon. Yes. We don't have copies of all of

15 the slides today because not all of them were

16 ready as of this morning. But we do have these,

17 and they are on their way.

18 MR. WEINTRAUB: All right. Thank you,

19 Lucas. With that, I think we'll get started. So

20 Dan Weintraub, Navigant, here.

21 So, as Lucas said, we're going to start

22 by talking about the general process of how we set
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1 efficiency levels. So I'll remind you. So we're

2 going to be going through a lot of information.

3 And, as Lucas said, this is the time to ask

4 questions. We're going to go through slow. We

5 want to make sure everyone understands the

6 process, how it relates to the equipment that

7 we're dealing with so that we can move forward

8 after this into the analyses and see how that all

9 plays out. So questions are welcome. If I'm

10 going too fast, let me know. We'll slow down.

11 MR. BROOKMAN: Say it again.

12 MR. HANDZEL: Is there anybody on the

13 webinar?

14 MR. BROOKMAN: There were five

15 individuals when we started.

16 MS. MARCHETTI: Still five.

17 MR. BROOKMAN: It's still five.

18 MS. MARCHETTI: Yes.

19 MR. WEINTRAUB: All right. All right.

20 So first we'll talk about efficiency levels. So,

21 as an introduction, so efficiency levels can be

22 described as a possible standard level. And these
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1 are levels that can be evaluated and analyzed to

2 determine if they're economically justified.

3 That's what we're looking at right now.

4 In a typical rulemaking, DOE establishes

5 and evaluates multiple efficiency levels for each

6 equipment class under consideration. In this

7 case, it's a little different. The Working Group

8 may participate in establishing these levels. And

9 the Working Group will eventually give

10 recommendations on what levels we should be

11 setting. And that will be so we will review the

12 economic analysis and the energy savings. And

13 that's where you will be able to make your

14 decision off of.

15 All right. So, to get started, to use

16 concrete examples and set a baseline, we're going

17 to go through the EU methodology, so what was done

18 under Lot 11 in the EU. And we'll show the

19 parallels between that and our process because

20 these are things that have been done before,

21 levels that have been set, should put things in

22 perspective.
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1 Just so you know, this is not what we're

2 pursuing right now per se, but this will serve as

3 an example. So the metric that they are using, so

4 they use the MEI. And, to make sure everyone is

5 clear on it, so it's a market-based index that

6 simply represents how well a pump's efficiency

7 compares to the marketplace as a whole. For

8 example, MEI-10 indicates that a pump is better

9 than the bottom 10 percent of the market. Forty

10 indicates that you're better than the bottom 40

11 percent of the market. So, in other words, a

12 standard set at MEI-10 cuts off 10 percent of the

13 pumps. Forty cuts off 40 percent of the pumps in

14 any given equipment class. So the question is,

15 for one, how do we determine how a given pump

16 compares to the market using this method?

17 So here we get into some of the more

18 complicated material. So step one of this

19 process, defining the efficiency surface. So due

20 to the size and geometry differences, every pump

21 in the marketplace has a different maximum

22 attainable efficiency. So based on extensive
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1 research, the EU concluded that attainable

2 efficiency is a strong function of flow and

3 specific speed. The research defined an

4 efficiency surface by the average efficiency seen

5 in the EU marketplace for all pumps within the

6 scope. And this was set as a function of flow and

7 specific speed because those were the factors that

8 were defined.

9 So all pumps falling on this MEI surface

10 are, therefore, of equal relative efficiency.

11 They're on the surface. They all compare

12 similarly in the marketplace. So this allows

13 pumps of varying flows and specific speeds to be

14 compared on an even playing field.

15 So the next step -- here we're going to

16 get a little more complicated.

17 Yes, Gary?

18 MR. FERNSTROM: This is Gary. So could

19 you go back to the --

20 MR. WEINTRAUB: Sure.

21 MR. FERNSTROM: -- prior slide for a

22 moment? You're saying, thus, all pumps following
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1 on the surface are of equal relative efficiency.

2 Do you mean they're capable of equal relative

3 efficiency and, therefore, small differences in

4 performance can be identified or do you mean that

5 they are of equal relative efficiency precisely?

6 I'm just a little confused with that.

7 MR. WEINTRAUB: So it's equal relative

8 to the marketplace. So let's say a very large

9 pump, physically large, has a higher attainable

10 efficiency than a very small pump because of

11 factors that come from its geometry. That very

12 large pump will have an efficient -- there is an

13 efficiency out there that is the middle of the

14 market for that very large pump. And there is an

15 efficiency out there that is middle of the market

16 for very small pumps. Those levels are -- one may

17 be at 80 percent efficiency. The other one might

18 be at 50 percent.

19 MR. FERNSTROM: Okay. So, just so I am

20 clear, the surface, then, would be different for

21 different types of pumps.

22 MR. WEINTRAUB: No. The surface itself
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1 -- we'll get in -- yes. So they only use ones --

2 Gary, we'll get there. They only use one surface,

3 but they varied a factor called the C-factor,

4 which we'll get to, to move the surface to a level

5 that represented each individual equipment class.

6 MR. FERNSTROM: Thank you. I'll hold my

7 questions until you finish.

8 MR. WEINTRAUB: Yes. When we get to C9 values, hopefully I will be able to answer it. If

10 not -- hopefully it will answer itself. If not,

11 we'll talk about it some more. Okay. All right.

12 So the next step -- and this is where we

13 are going to introduce the C-values. So using the

14 surface to define MEI levels, so you can translate

15 the efficiency surface up and down to create

16 efficiency levels that remove or cut off pumps

17 from the marketplace. So you have the surface.

18 You move it up. You cut off more pumps. You move

19 it down. You cut off less pumps. The equation

20 that we have right there, that is the equation for

21 minimum efficiency. That's the equation of that

22 surface. And on the end, almost covered by the
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1 toolbar but thankfully not, we have a red C.

2 That's C-value. That just allows you to translate

3 that surface up and down. And in the EU, that's

4 what they used. I'll get into this in a little

5 more detail.

6 MR. BROOKMAN: I want you to slow down.

7 MR. WEINTRAUB: Sure. Thank you, Doug.

8 So trying to visualize this because it

9 is complex, so we have our graphics down at the

10 bottom. And on the left, we have the surface. And

11 I have drawn what would be an intersecting plane

12 to try and move this into the 2-D. So on this

13 graph on the bottom, on the left, we have two x14 axes, I guess. On the left, you have your Q,

15 which is flow. On the right, you have Ns, which

16 is specific speed. So the plane that I have drawn

17 there, that represents one specific speed. So

18 there the data that I pulled over is specific

19 speed of 1,500. To represent that visually, I

20 pulled data from a specific speed of 1,300 to

21 1,700 within a close range to try and put it up

22 there.
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1 So now we take that over to the chart on

2 the right. And now on your x-axis, you're

3 plotting flow, which was Q over there, and gpm.

4 And on the left, on the y-axis, we have pump

5 efficiency, which was the y-axis on that chart.

6 And the blue dots you have there are pumps within

7 the population. And here we're using end suction

8 close-couple and frame-mounted pumps at 1,800 rpm.

9 They have been combined just so we can get a lot

10 of data points. They are very similar in the

11 marketplace.

12 And what you see is if you -- each one

13 of those colored lines is the surface shifted up

14 and down. And you see that at MEI-10, that green

15 line, you're cutting off very few of those blue

16 dots. You move up. You're cutting off more of

17 those dots. You move up again. You're cutting

18 off even more of those dots, up to MEI-85.

19 To answer Gary's question before about

20 how this works for different product classes, if

21 we were to switch over to an inline pump, these

22 dots would be skewed in a different direction, but
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1 you would have a similar shape. You would then

2 draw your lines so that you were cutting off the

3 proper amount of pumps for each one using that

4 same surface. And that's how the EU only used one

5 surface, different levels.

6 Any questions on this? Yes?

7 MR. BROOKMAN: Charlie Cappellino?

8 MR. CAPPELLINO: Charlie Cappellino,

9 ITT. I think just a comment. My opinion is that

10 I think the surface works well as a single surface

11 you raise up and down for clean water pumps. If

12 you start getting into other odd-type product, --

13 MR. WEINTRAUB: Yes.

14 MR. CAPPELLINO: -- you may actually

15 have to come up with a new surface, but that is

16 kind of immaterial to the discussion here because

17 we're focused on clean water pumps. I don't know

18 if that helps --

19 MR. WEINTRAUB: Yes.

20 MR. CAPPELLINO: -- me enlighten your

21 questions, like a slurry pump with very think

22 heavy vanes that's completely designed differently
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1 might have a different shape.

2 MR. WEINTRAUB: Correct, yes. That is,

3 yes. And the EU study that was done was focused

4 on water pumps, clean water pumps.

5 MR. BROOKMAN: Thanks, Charlie.

6 MS. WALTNER: Yes. This is sort of

7 another question really --

8 MR. BROOKMAN: Meg Waltner?

9 MS. WALTNER: Sorry. Meg Waltner from

10 NRDC.

11 MR. BROOKMAN: Get close. Get that.

12 Thanks. Yes.

13 MS. WALTNER: -- related to Gary's

14 question. So am I understanding correctly? So

15 the surface stays the same, but sort of the

16 population of data underneath the surface changes

17 depending on what product of pump you're looking

18 at?

19 MR. WEINTRAUB: Correct, yes.

20 MS. WALTNER: Okay.

21 MR. WEINTRAUB: So yes. The shape of

22 the surface is the key. And then the population
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1 will sit in relation to that surface. The surface

2 is then moved up and down with that C-value so

3 that you're cutting off as many pumps as you are

4 targeting to cut off.

5 Okay. Any other questions?

6 MR. BROOKMAN: Louis Starr?

7 MR. STARR: So Louis Starr with NEEA. So

8 the specific efficiency here is actually from or

9 specific speed is 1,500 to 1,700. Is that right?

10 MR. WEINTRAUB: Yes, yes.

11 MR. STARR: So that is so you could have

12 enough population --

13 MR. WEINTRAUB: Yes, yes.

14 MR. STARR: Ideally, it would just be

15 right at 1,500 or a given speed?

16 MR. WEINTRAUB: Yes. Ideally, when the

17 analysis is done, it's done on the 3-D surface.

18 MR. STARR: Okay.

19 MR. WEINTRAUB: And it's just

20 continuous, and they plot it. But yes, I wanted

21 to visualize the data.

22 MR. STARR: Okay.
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1 MR. WEINTRAUB: The slope between there

2 is very little.

3 MR. STARR: So you're just doing this so

4 that it provides enough dots that we could see it

5 and kind of make sense of it.

6 MR. WEINTRAUB: Yes.

7 MR. STARR: Okay.

8 MR. FERNSTROM: So this is Gary. The

9 dots that you have extracted from the graph on the

10 left, do they lie on the surface or are they below

11 or above the surface?

12 MR. WEINTRAUB: So the surface itself

13 does not have a location until you define a C14 value. That's the key to it. So those colored

15 lines that we have on the right, green, red, blue,

16 that is the surface. So you set it with a level.

17 The key to the EU's analysis was that you set the

18 shape of the attainable, and then you move it up

19 and down.

20 MR. FERNSTROM: Well, the way I'm

21 understanding it, the shape of the curve is fixed.

22 Its level on a vertical axis is variable depending
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1 upon the C-factor.

2 MR. WEINTRAUB: That's correct, yes.

3 MR. FERNSTROM: So, as we vary the

4 level, then, is each one of those blue dots on the

5 curve? Just depending upon what level we set it

6 at? I don't understand where the blue dots

7 emanate from in the graph on the left.

8 MR. WEINTRAUB: Oh. So yes. So there

9 are no blue dots on the graph on the left. The

10 graph on the left is just the surface. You

11 wouldn't be able to visualize anything with those

12 dots on that left surface because it's a 3-D plot.

13 MR. ADIN: Well --

14 MR. WEINTRAUB: Yes.

15 MR. ADIN: Just to clarify, --

16 MR. WEINTRAUB: Yes.

17 MR. ADIN: -- there would be dots all

18 over that.

19 MR. WEINTRAUB: Yes. They would be all

20 over. It would be a cloud.

21 MR. ADIN: Above, below.

22 MR. WEINTRAUB: Yes.
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1 MR. ADIN: All over the whole thing.

2 MR. FERNSTROM: Okay. That answers my

3 question. I was feeling it as a membrane, rather

4 than a cloud.

5 MR. WEINTRAUB: Okay.

6 MR. FERNSTROM: Thank you.

7 MR. WEINTRAUB: Okay. Anyone else?

8 MR. BROOKMAN: And say it again, Dan,

9 simply. The C-value is what?

10 MR. WEINTRAUB: C-value is a translation

11 factor that allows you to move up and down the y12 axis, allows that surface to move up and down the

13 y-axis, and determine how many pumps you want to

14 cut off at a given efficiency level.

15 Any other questions?

16 (No response.)

17 MR. WEINTRAUB: Okay. We'll move

18 forward. Okay. So now looking at the EU Lot 11

19 efficiency level results, so this is how the EU

20 did what we were just explaining. So each

21 efficiency level in the EU targeted a constant

22 failure rate for each equipment class. So that
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1 meant they looked in their analysis. Eventually

2 they set levels in their original analysis. Down

3 at the bottom, you see they targeted 5 percent of

4 the pumps cut off, 10 percent, 15, and so on. And

5 for each one of those in each equipment class,

6 they found the C-value that would cut off the

7 appropriate number of pumps. And that C-value is

8 different for each equipment class and each speed

9 because they looked at them as being independent

10 and having their own kind of properties as a pump.

11 Okay. So this is how the EU did it. And

12 you can see if we were to mimic our process, I

13 drew in EL-1, EL-2, EL-3 above those. That's how

14 it would be done, we would say. We have all of

15 these levels. Now we know we're going to

16 determine what the cost is to get there. And then

17 we're going to see whether it's economically

18 feasible and so on.

19 Any questions here?

20 (No response.)

21 MR. WEINTRAUB: All right.

22 MR. BROOKMAN: Meg Waltner?
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1 MR. WEINTRAUB: Oh, sorry.

2 MS. WALTNER: These are the EU C-values

3 here?

4 MR. WEINTRAUB: Yes.

5 MS. WALTNER: Okay.

6 MR. WEINTRAUB: This is.

7 MS. WALTNER: Thank you.

8 MR. WEINTRAUB: So these were.

9 Specifically, this is what was published in their

10 analysis document that supported their findings.

11 They only published in the regulation MEI-10 and

12 MEI-40, I believe, is what the standards that were

13 set were. Okay.

14 So now, now that we have our baseline

15 for what the EU did --

16 MR. BROOKMAN: Wait a second.

17 MR. WEINTRAUB: Yes?

18 MR. BROOKMAN: Please go back one.

19 MR. WEINTRAUB: Sure.

20 MR. BROOKMAN: So maybe I missed it.

21 What are all the values on the left-hand side of

22 this matrix?
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1 MR. WEINTRAUB: Where it says, in

2 yellow, where it says, "See ESOB"?

3 MR. BROOKMAN: Yes.

4 MR. WEINTRAUB: Yes. Those are the

5 equipment classes.

6 MR. BROOKMAN: Okay.

7 MR. WEINTRAUB: So those are the EU's

8 equipment classes.

9 MR. BROOKMAN: And these are all the

10 ones they established standards for?

11 MR. WEINTRAUB: Correct, yes.

12 MR. BROOKMAN: Okay.

13 MR. WEINTRAUB: And speed, yes,

14 equipment class and speed.

15 MR. BROOKMAN: Al Huber?

16 MR. HUBER: Al Huber, Patterson. Did I

17 understand you correctly that you're not proposing

18 to use the MEI, the European method? Is that

19 right?

20 MR. WEINTRAUB: This is not what we're

21 proposing right now. Yes. We are just going

22 through this as a reference point to understand
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1 how efficiency levels can be established. In the

2 next slides, we're going to move on to the methods

3 that we have discussed so far and what we're

4 proposing.

5 MR. HUBER: And I suppose you're going

6 to enlighten us as to why you didn't use it.

7 MR. WEINTRAUB: Based on the discussions

8 on metric that were done last meeting, I believe.

9 Lucas?

10 MR. ADIN: Well, I think there are kind

11 of two different issues related to that question.

12 One is, how do you get to a particular standard

13 level outside of the metric, --

14 MR. WEINTRAUB: Yes.

15 MR. ADIN: -- which is the whole C-value

16 part of it, which we'll talk about, which is not

17 really all that different from this and then the

18 metric, which is really just kind of that

19 translated into a number that would be measured

20 value for that pump. But we'll explain that. I

21 mean, obviously to the extent -- that's not the

22 way that you're seeing it, you know, we can --
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1 MR. HUBER: Well, you know, I'm curious.

2 Is there something inherently flawed with this

3 system that you would want to change it or --

4 MS. WILLIAMS: So, this is Alison;

5 right? I mean, this all stems back from the

6 discussion that this Working Group is so far

7 trying to do a metric that covers pumps along with

8 motors and controls. This scheme only covers

9 pumps, bare pumps. And so what Dan is going to

10 talk about next -- and so I think maybe if he goes

11 through that, it will clarify these things -- will

12 just be about trends, how we are proposing to use

13 the EU's method but include motors and controls

14 also.

15 So I think if he goes through it, it

16 will be more clear. And then ask questions along

17 the way maybe. We'll see.

18 MR. HUBER: Well, it's Al Huber,

19 Patterson again. You know, I'm not sure that at

20 least our side of the table agrees with you that

21 you can use one metric for both cases. In fact,

22 we don't. We don't agree with it. And we think
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1 it's a problem. We think it will be confusing in

2 the marketplace, and we don't think it will yield

3 what you are looking for.

4 So I realize we're going to talk about

5 metric later. That's why we didn't bring up our

6 idea about it earlier in this discussion but wait

7 until tomorrow. But, you know, I am at a loss as

8 to why you are going through this if you don't

9 intend to use it anyway.

10 MR. ADIN: Well, I mean, what we're

11 planning to do with respect to standards

12 ultimately is based on this. So it's really how

13 you get to -- and I think we had talked about this

14 in previous meetings in a more abstract way, but

15 ultimately what we're proposing to do is set the

16 actual efficiency level for all the pumps we are

17 considering, whether it's bare pump all the way to

18 pump plus a VSD, really, just based on the bare

19 pump. So we're not including design improvements

20 in the motor and all of that other stuff. It's

21 based on design improvements to the bare pump. And

22 so you have to start with this. Right?
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1 MS. WIDDER: This is Sarah. I think,

2 actually, when Dan goes through the slides, the

3 methodology that he's going to present is actually

4 very similar and based off of what was done in the

5 EU. So it's not that we're trying to do something

6 completely different. Just as Alison discussed

7 and, you know, as the metric we have been

8 discussing has some different characteristics, in

9 addition to the whole drive motor thing, we're

10 weighting all of the load points, as opposed to

11 having the three separate ones. So there are a

12 few things that we had to change to adapt to sort

13 of the constructs that we have been discussing

14 over the past couple of meetings. We're not

15 trying to change things unnecessarily.

16 MR. BROOKMAN: Let's do this. Let's let

17 Dan proceed. Take a few more slides. And let's

18 agree also, though, if at the end of this

19 presentation pack, if it seems as though the

20 proposal is totally contrary to any caucus' view

21 on how we might proceed, let's begin that

22 discussion before we go to lunch, just see where
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1 we end up.

2 MR. ADIN: I'll just point, Doug, before

3 we start again, I mean, these slides were intended

4 to explain exactly the issue that Al brought up.

5 So hopefully it will be a little clearer. I

6 understand that this is a major point of

7 contention potentially, but we want to try and get

8 to some resolution on that. And so that is what

9 this discussion is for.

10 MR. BROOKMAN: And, just to continue on

11 -- thank you, Lucas.

12 I had a few conversations with folks

13 this morning before we started. I know we made

14 big progress on the issue of metrics last time. I

15 think, at least the manufacturers' caucus has

16 clarified where they are coming from on the

17 metrics. And so I think we should begin to

18 discuss that sooner, rather than later. Okay.

19 So let's proceed, Dan.

20 MR. WEINTRAUB: Okay. So we'll proceed.

21 Yes. So looking at it high level, there are going

22 to be two parts to this. So there's how do you
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1 choose an efficiency level, what are the

2 efficiency levels we're targeting, and then how do

3 you define that with a metric. So the metric part

4 is what we're in contention with, but how are we

5 going to choose them? That's a little more

6 straightforward.

7 Okay. So potential efficiency levels.

8 So, similar to the EU, we're going to do what they

9 did. And we're targeting failure rates at each

10 equipment class, just like they targeted -- in

11 their analysis, they looked at 5, 10, 25, and so

12 on.

13 So we discussed this at the end of last

14 meeting. It was a quick discussion, but we said

15 we're going to look at 10 percent, 25 percent, 40

16 percent, 55 percent, 70 percent, and 85 percent of

17 pumps failing at each individual equipment class.

18 So that's what our efficiency levels are right now

19 for each equipment class, there will be a

20 different -- depending on the metric we choose or

21 regardless of the metric we choose, there will be

22 an independent level for each equipment class. But
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1 the key is next we must determine the C-values for

2 each equipment class at each efficiency level. So

3 this is where we are going to get into this

4 metric. And we'll take it slow.

5 So we're looking at the PER metric that

6 was discussed last meeting and the one that we

7 decided we are going to go forward for analysis

8 with and come back and discuss further at this

9 meeting. So the PER. So to determine C-values

10 using this metric, we're going to need to do some

11 equation work here. So bear with me. I'm going

12 to try and go slow. So the PER up top equals --

13 your omega there is your weighting value. So we

14 have omega 75, omega BEP and 1.1. What that means

15 is right now we decided we are going to equally

16 weight for the analysis so far. So that can be

17 changed later, but right now we're equally

18 weighting. So each one of those is one-third.

19 Inside of the parentheses, at each load

20 point, you have your hydraulic power of the pump

21 divided by the pump's efficiency times the motor

22 efficiency, which gets you the input power to the
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1 pump.

2 Hydraulic power, that's a function of

3 flow and head. That's it. So for each pump,

4 there is a hydraulic power that is defined because

5 each pump is going to have a different attainable

6 efficiency. So that goes in there. So hydraulic

7 power is fixed for each pump.

8 Motor efficiency for each pump is also

9 fixed because it is going to be a function of what

10 we choose as the minimum motor efficiency

11 allowable in this metric. And that was discussed

12 last meeting.

13 So when we look at this, the only

14 variable in this equation when you're looking to

15 set an efficiency level is the pump efficiency at

16 each level, the pump efficiency at 75 percent,

17 BEP, and 110 percent. And that's highlighted in

18 red.

19 Are there any questions on that?

20 (No response.)

21 MR. WEINTRAUB: Okay. So, moving down,

22 so now we're looking at how would you define that
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1 pump efficiency in red? So I've changed the

2 nomenclature to make it a little clearer. And we

3 go to minimum required pump efficiency at BEP. And

4 we come back to this surface equation, which we

5 just went over before.

6 So the minimum required pump efficiency

7 equals this function of flow and specific speed

8 minus C. So for a given pump, flow and specific

9 speed are fixed. Those are not variables in that

10 equation. Over to the right, C-value is the only

11 thing you can change to change the minimum

12 required pump efficiency. So minimum required

13 pump efficiency is purely a function of C in this

14 instance.

15 Now, also looking at how the EU

16 regulation works -- we didn't go through this in

17 detail before, but the EU used the house of

18 efficiency. They said you had to meet efficiency

19 at 100 percent of BEP and you had to meet a

20 requirement also at 75 percent of BEP and 110

21 percent of BEP. Those did not have their own

22 independent surfaces. It just said you looked up
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1 your value for efficiency at BEP. You multiplied

2 it by .947. And you had to be better than that at

3 75 percent flow. And then the same for 110

4 percent. You had to be better than .985. So it's

5 just a function of that original surface.

6 Gary?

7 MR. BROOKMAN: Gary?

8 MR. FERNSTROM: Dan, this is Gary. Where

9 did the .947 and .985 come from?

10 MR. WEINTRAUB: Great question. So that

11 was part of the EU's research. And they took the

12 population of -- I believe they ended up using all

13 pumps in the marketplace. And they looked at what

14 the efficiency of those pumps was at 75 percent as

15 a percentage of BEP. And they plotted it out. And

16 they looked at the mean. And it did vary from

17 equipment type to equipment type. But they

18 concluded that we're going to take the median. I

19 don't remember if it was the median or the mean,

20 but they're going to take one of those. And

21 that's what those values represent.

22 And I can tell you. So we did the
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1 research on our own database that we have right

2 now. And in the U.S. market, looking at end

3 suction pumps and inline pumps, they are extremely

4 close to this. Within, we'll say, .002 or so,

5 they vary. So pumps pretty much function the same

6 way here as they do there.

7 But those values are values that are up

8 for discussion eventually for it to go this way.

9 We can shift them if we wanted to to the U.S.

10 market. I can tell you that it's not

11 going to be a big change, but we could. So for

12 now, we'll go forward with those into the

13 analysis.

14 So, looking at it with the value set, so

15 now we're going to do some substitution into the

16 equation down at the bottom. So when you put it

17 all together -- sorry it's so small -- the PER

18 efficiency level and you substitute in, you have

19 your omega. You have P hydraulic. Now you

20 substitute in .947 times minimum required

21 efficiency, where you had your minimum required

22 efficiency at .75. Now here we have in this PER
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1 equation the only variable left is minimum

2 required efficiency at BEP, which is a function of

3 C. So the PER relies directly on the C-value that

4 you want to set, the PER that you have to meet.

5 Okay. So here we have that equation,

6 same equation up at the top, because we're going

7 to continue to talk about it, as I just mentioned.

8 So now we have this equation. Varying the C-value

9 will output a PER value that can be compared

10 against the calculated PER value of the pumps. So

11 that's the metric discussion that we had last

12 meeting and we will continue to have.

13 You can calculate how your pump

14 performs. You set a C-value. You plug it into

15 this equation. And it will tell you how your

16 performance compares against an efficiency level

17 and whether you meet that efficiency level or you

18 do not meet that efficiency level. And that

19 single C-value will set an equivalent standard for

20 all pumps out there, sets that level. And you can

21 look at how many pump models will pass or fail

22 within the industry.
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1 Questions on here?

2 (No response.)

3 MR. WEINTRAUB: Okay. We're still in

4 the weeds here. We're not out yet. We're going

5 to go through some more equations because this is

6 another way. This will lead us to a visual

7 representation, which I think will be useful to

8 see how this works.

9 So here we're continuing on with these

10 same equations. So now determining C-values, so

11 we can also rearrange that equation that we

12 started with to determine the C-value at which any

13 given pump model would actually fail. So that's

14 what is its C-value for failure. So, starting

15 with the premise that a pump model approaches

16 failure when the PER of the efficiency level that

17 we're trying to set equals the PER of the pump,

18 how the pump performed. Right now, again, this is

19 all open for interpretation with the metric later

20 on, but right now, a higher value is worse. So if

21 the pump exceeds that efficiency level, it fails.

22 So we substitute in our PER pump into
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1 this equation. So that's the PER calculated for

2 the pump on the left. And we rearrange. And we

3 move efficiency, which is a function of BEP, which

4 is a function of C, over to the left, where

5 efficiency as a function of C is this equation,

6 the surface equation that we have gone through

7 before. You substitute that in and rearrange. And

8 you get that you can calculate the C-value of a

9 failing pump with this equation on the right.

10 What this does for us, we can then look

11 at the population of all the pumps in the

12 marketplace. Right now we have a database

13 representing approximately 50 percent of shipments

14 in the marketplace based on confidential research

15 that we can show aggregated.

16 We can plot the histogram of what the C17 values are for all the pumps in the marketplace.

18 And now we don't need to look at a 3-D surface or

19 flow versus specific speed. It's just the

20 efficiency performance of a pump represented by

21 its C-value.

22 On the x-axis, you have failing C, C-
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1 value. On the y-axis, you have the percentage of

2 models failing. Here we're looking at, for

3 example, end suction close-couple pumps at 1,800

4 rpm. And you can find that C-value that's going

5 to cut off 10 percent of the pumps, 40 percent of

6 the pumps, 70 percent of the pumps, and any number

7 in between. So this is the method that we used to

8 find these efficiency levels using this metric. We

9 can find any other numbers in between.

10 But are there any questions on this

11 before I go on? Yes?

12 MR. HUBER: You have 1,800 up there. Are

13 you using the data that was provided to you by the

14 Hydraulic Institute or are you using the European

15 data?

16 MR. WEINTRAUB: This is data that was

17 collected under confidentiality agreements through

18 the manufacturers to be presented in aggregate. So

19 we have our own data set. It represents the U.S.

20 market. Right now, based on what HI had given us,

21 what you have given us at the last meeting, this

22 represents about 50 percent of shipments in the
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1 market.

2 MR. BROOKMAN: It includes the HI data?

3 MR. WEINTRAUB: No, no. We can just use

4 the HI data as a baseline for what was given to us

5 to analyze directly. So the HI data, if the HI

6 data said that there were 100,000 shipments, we

7 have 50,000 shipments. And that's not real. Those

8 are not real numbers, just an example.

9 Yes?

10 MR. BROOKMAN: Charlie Cappellino?

11 MR. CAPPELLINO: Charlie Cappellino,

12 ITT. Are you going to compare the C-values that

13 you have developed here to the values that the EU

14 uses?

15 MR. WEINTRAUB: Yes. So we have those.

16 These are PER C-values. So they are different

17 than an MEI C-value. So the difference there, to

18 step back for a second, so MEI C-values versus PER

19 C-values. Really, the only effective difference

20 here, for an MEI, your failing C-value is the

21 worst of the three, the one that you fail at,

22 because you have to pass independently at 75
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1 percent flow, 100 percent, and 110. So the worst

2 value you have is the one that fails.

3 With the PER, it's effectively right now

4 a weighted average. Three points. Take your

5 weighted average. That's what you're going to

6 compare against the metric. So all pumps are then

7 shifted. All pumps are affected the same way. But

8 the end effect is that the C-values under a PER

9 are going to show themselves to be a little more

10 efficient, a little better-performing but a little

11 better-performing all across the board because

12 you're taking a weighted average, rather than

13 taking the worst performing number.

14 MR. CAPPELLINO: Charlie Cappellino,

15 ITT. So if a manufacturer is selling product into

16 the U.S. and also selling product into the EU, the

17 way it's set up right now, you basically have to

18 run two separate analyses to determine whether or

19 not the product is sellable in each market?

20 MR. WEINTRAUB: That's correct. These

21 are two separate metrics. And that's the basis of

22 the metric discussions that we went into last
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1 time. Now, just --

2 MR. CAPPELLINO: So --

3 MR. WEINTRAUB: Yes?

4 MR. CAPPELLINO: So, even for bare pump,

5 set aside motor efficiency and everything else,

6 because the averaging is different, you still have

7 different C-values. Is that correct?

8 MR. WEINTRAUB: Yes, yes. And based on

9 the way that we were looking at it earlier, from

10 the start based on HI's proposal, we were looking

11 at different C-values to start because HI had

12 proposed that the C-values be changed to represent

13 the U.S. market and cutting off ten percent of the

14 U.S. market is a different C-value than cutting

15 off ten percent of the European market. So we

16 were always dealing with a different cutoff level,

17 but this is dealing with a different cutoff level

18 plus a different calculation but based on

19 effectively the same load points.

20 MR. BROOKMAN: Louis Starr?

21 MR. STARR: This is Louis Starr with

22 NEEA. So would there be a way to actually
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1 translate from the PER with an MEI version? Would

2 you be able to translate it if I had a European

3 pump and now a U.S. pump and I just want to know

4 how do these things actually perform based on an

5 MEI. Would there be an easy way to do that? Would

6 I be able to have a crosswalk between those two so

7 that I can take a pump that was manufactured for

8 the European market and U.S.

9 market and just know in straight-out

10 performance how these things are going to do on an

11 MEI basis that, you know, it's --

12 MR. WEINTRAUB: Yes.

13 MR. STARR: It's difficult for people

14 that make pumps in both markets. They know if

15 they have to sell to multiple markets, they have

16 to be able to translate that information across.

17 And so I'm wondering, is there going to be an easy

18 way to do that or not?

19 MR. WEINTRAUB: So there would be no

20 mathematical crosswalk. And the reason being is

21 because under the MEI, you could have one bad load

22 point that fails, and everything else could be
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1 really good and you fail or it skews your number,

2 really skews your number. Under the PER, your

3 number is not skewed as far. So it depends on

4 each pump's curve.

5 MR. BROOKMAN: Al Huber?

6 MR. HUBER: The reason that the house of

7 efficiency was built the way it was is so that we

8 know as manufacturers in the usage out in the

9 field that they're just as likely not to be at

10 BEP. They may operate over to the left,

11 over to the right, which is why the Europeans went

12 with a pass/fail on each individual point: 75,

13 100, and 110. If you average it, then you're

14 favoring those who try to get a higher BEP level.

15 And maybe they're not as good out here in 75, but

16 that may be where you're operating the equipment.

17 MR. WEINTRAUB: So, Al, we definitely

18 understand that. And that has been known from the

19 start. And one thing I can tell you, we did do

20 some analyses along the way of the data we have in

21 hand right now. And the ranked ordering of which

22 pumps fail and which pumps don't, it doesn't
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1 change very much going from MEI to PER. There are

2 changes. Some pumps on the borderline switch

3 sides. A pump that was failing turns to passing.

4 A pump that was passing turns to failing. But

5 there's no wholesale change in how the pumps are

6 performing by using a weighted average versus

7 using a yes/no criteria.

8 MR. BROOKMAN: Al Huber?

9 MR. HUBER: Al Huber, Patterson. Well,

10 the problem is whoever has to redesign again,

11 depending on where we fall here, knowing that,

12 they're going to redesign. They're not going to

13 be as concerned because it's weighted a third, a

14 third, a third. And they don't have to pass out

15 here. They'll design in a different way. They'll

16 look at it in a different method. And in the end,

17 you may get more falling out or you would have

18 gotten more falling out. Do you understand what

19 I'm trying to say?

20 MR. WEINTRAUB: I'm not sure what you

21 mean by more pumps "falling out."

22 MR. HUBER: Well, you said that there
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1 wasn't a lot of difference between the two,

2 although we have not seen that analysis. What I

3 am suggesting to you is that whatever you invent

4 as a system, somebody is going to design to that.

5 Okay?

6 MR. WEINTRAUB: Yes.

7 MR. HUBER: So you might not get as good

8 performance at 75 and 110, but they still may have

9 a pump that's passing.

10 MR. WEINTRAUB: Yes.

11 MR. HUBER: And they will design that

12 way because they know that's how it's going to be

13 judged. Do you understand what I'm trying to say?

14 MR. WEINTRAUB: Yes, I do understand.

15 Yes.

16 MR. HUBER: Okay.

17 MR. BROOKMAN: So --

18 MR. WEINTRAUB: Charlie?

19 MR. BROOKMAN: Let's let Lucas --

20 MR. ADIN: Lucas, DOE. The way I

21 understand your comment, Al, you're basically

22 talking about the way the market would respond to
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1 an arrangement like this. And it sounds like it

2 would be advantageous for certain manufacturers to

3 design their pump focused on a particular point in

4 the curve or --

5 MR. HUBER: You have to be careful how

6 you set parameters or in this case goals, for

7 instance, or regulations because people will

8 design to that. And the results might not be what

9 you expect or what you want. That's all I'm

10 saying.

11 We know the market doesn't operate

12 generally at BEP. We wish they did. You know, we

13 want them to. You know, we ask them to. But it

14 doesn't necessarily happen. And the reason that

15 the EU weighted all those three is so that you get

16 a higher overall curve so that when the pump is

17 not operating there at BEP, at least it's

18 operating more efficiently than it might have. So

19 if you design it as an average, you might not get

20 what you're looking for. That's all I'm trying to

21 point out here.

22 MR. BROOKMAN: Charlie Cappellino?
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1 MR. CAPPELLINO: Charlie Cappellino,

2 ITT. So, Dan, I think what you said is whether

3 you use the EU method for the three points or the

4 proposed method here for the three points, it

5 really didn't make a lot of difference in terms of

6 the number of pumps dropping out or not.

7 MR. WEINTRAUB: Yes.

8 MR. CAPPELLINO: I guess my question is,

9 as somebody who is representing a company that

10 manufactures and sells internationally -- and a

11 lot of people do -- is it worth the additional

12 administrative overhead of having two different

13 methods that have to be dealt with on a global

14 basis if there really isn't that much of a

15 difference in terms of the pass/fail rate?

16 So, I mean, when you step back as a

17 company that sells product around the world and

18 trying to wrap your head around all of this stuff,

19 the more we can keep it simple as long as there

20 isn't a huge either benefit or disbenefit, one way

21 or the other, I think having consistency would be

22 a preferred way to go, just throw that on the
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1 table.

2 MR. WEINTRAUB: Thank you, Charlie. So

3 I think from that comment, that is definitely

4 addressed towards the test procedure and the

5 metric discussion that we are going to have at a

6 later time, but this was meant to evoke those

7 questions, put this all together. So keep those

8 questions in mind when we get back to metric

9 specifically. They've got their points.

10 MR. BROOKMAN: Louis Starr?

11 MR. STARR: So this is a question. Is

12 there a way to kind of mimic what they're doing?

13 Is there a way to have a failure point at just

14 basically copying the same thing over? I mean, I

15 understand why you're doing the average. I think

16 part of the problem is the reason that none of it

17 -- it didn't change the market when you looked.

18 You basically did a sensitivity analysis to see

19 how your new metric would match up with existing

20 market, but one of the things with the current

21 market is adhering to the EU practice.

22 And that might change. When you change
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1 the new rules to the U.S. market, you may have

2 people cherry-picking to the top, getting really

3 great efficiency at the 100 percent. And it may

4 not drop off much. So, in other words, you won't

5 see that until you change the market.

6 So it would be better, it seems to me,

7 if you could keep some kind of version of kicking

8 stuff out. And it looks like you're basically

9 held to some kind of mathematical thing. But is

10 there a way to just mimic the same thing that is

11 happening in the European market or did you think

12 about that?

13 MR. WEINTRAUB: So Louis, I think I have

14 two things to respond to there. First, again,

15 it's a metric. That's a metric question. But, as

16 you remember from last month's discussion, the

17 idea of the metric as it has been set up right now

18 is to allow us to look at controlled pumps and

19 uncontrolled pumps under the same metric. And

20 that's where the weighted average comes in. That's

21 why it was necessary.

22 Sarah, do you have something to say?
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1 MS. WIDDER: And I won't add too much

2 because I think we will talk about this at length

3 at another time, but the other thing to keep in

4 mind is we can address that a little bit in the

5 weighting, how we weight the different load

6 points, whether or not you give equal weighting to

7 all the points, which is what we're assuming now

8 based on our discussions from last meeting, or you

9 more heavily weight different points.

10 So we can account for -- it's difficult

11 to account for all the things that we had wanted

12 to account for in our scope discussion, which

13 include pumps and motors and drives with the three

14 load points and one metric. So that's why we got

15 here. And we're weighting them. And they could

16 be weighted differently. If we wanted to maybe

17 ensure a broader curve, you could weight the 100

18 percent point less, something like that.

19 MR. BROOKMAN: Let me welcome Doug

20 Potts. Glad you could join us, Doug.

21 MR. POTTS: Thank you.

22 MS. WILLIAMS: Can I just recommend that
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1 -- I mean, sort of the point of these slides is

2 just to talk about setting efficiency levels and

3 what we're going to do with them after, in the

4 analyses. So I think, again, let's try to finish

5 it. And we will certainly go through all of these

6 concerns later, but I think this will help just to

7 set up how the standards process works, no matter

8 what the metric is, actually.

9 MR. WEINTRAUB: Yes. Thank you, Alison.

10 And, Louis, one other, the second point

11 I wanted to make, so your thoughts on the current

12 data representing what the EU had regulated, so

13 based on our research and our discussions and what

14 we found, so there are many pumps that are sold in

15 both markets, but there are also many pumps that

16 are not sold in the EU market, significant enough

17 that the U.S. market is an independent market

18 data-wise. I mean, you are not just representing

19 what is done in the EU. It is a mix of both U.S.

20 only and sold in the EU.

21 Okay. So this pretty much concludes the

22 discussion on setting efficiency levels. So if we
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1 were to go through with this metric and this

2 process in setting these target levels, here we

3 have what the C-values come out to, what the C4 values come out to for each equipment class.

5 And, as you'll notice, -- this will be a

6 theme throughout the rest of the day -- we're only

7 presenting data on end suction close-couple, end

8 suction frame-mounted, and inline pumps. Radial

9 split vertical, and vertical turbine submersible,

10 we do not have adequate data at this time. We're

11 still waiting on data from the HI and NEMA biz

12 survey to complete our data set. And we're hoping

13 that will come in shortly and we can present the

14 same type of results for those additional two

15 equipment classes. So there will be nothing on

16 those going forward.

17 Yes?

18 MR. HUBER: Al Huber, Patterson Pump. If

19 I'm not mistaken, that was sent to you last night

20 about 5:00 o'clock. I realize that it's -- I was

21 notified by HI that they sent it.

22 MR. WEINTRAUB: So, Al, I did not -- I
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1 don't know if anyone in this room did.

2 MR. HUBER: You did not receive --

3 MR. WEINTRAUB: No, we did not.

4 MR. HUBER: You didn't? Nobody got it?

5 MR. WEINTRAUB: No.

6 MR. HUBER: I don't know what happened

7 --

8 MR. WEINTRAUB: Okay.

9 MR. HUBER: -- because I got a notice

10 that you got it.

11 MR. WEINTRAUB: Well, that's great to

12 hear that it will be coming, though.

13 MR. ADIN: I'm not aware that we

14 received anything new last night.

15 MR. WEINTRAUB: Yes.

16 MS. WILLIAMS: And, just to be clear,

17 even if we do, we're going to proceed the rest of

18 this meeting with the data we currently have.

19 MR. HUBER: I understand it.

20 MS. WILLIAMS: And we'll update it. Yes,

21 but we'll --

22 MR. HUBER: It worries me --
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1 MS. WILLIAMS: Let's check on that.

2 MR. HUBER: -- that you don't have it.

3 MS. WILLIAMS: Yes. We'll follow up on

4 that.

5 MR. HUBER: Okay? I understand that. I

6 understand that. As soon as we have a break, we

7 will call HI and find out what happened and make

8 sure that you get it. You want it sent to you,

9 Lucas?

10 MR. ADIN: That's fine. I can certainly

11 --

12 MR. HUBER: Distribute it.

13 MR. ADIN: -- distribute it as

14 necessary. So that would be good. Thank you.

15 MR. BROOKMAN: Okay. Let's keep going.

16 MR. WEINTRAUB: Yes. So just a couple

17 of things to note, to keep in mind on --

18 MR. BROOKMAN: Let me also -- pardon me

19 for jumping in -- welcome Greg Towsley.

20 MR. WEINTRAUB: Thanks, Doug.

21 So, just to continue, just a few things

22 to point out because we're going to be looking at
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1 these equipment classes all day. And I think we

2 have a laser around here somewhere. There it is.

3 No, not making it. All right. End suction close4 couple and end suction frame-mounted. If you look

5 at their respective speed classes, you can see

6 that their C-values are very similar all the way

7 down. So a lot of the analysis these groups have

8 been -- have been grouped together for analysis.

9 And we can decide later on what we're going to do

10 with actually setting standards and efficiency

11 levels, but the C-values and what their

12 efficiencies are, attainable efficiencies, for

13 frame-mounted and close-couple are very similar

14 within their respective speeds, nominal speeds. So

15 just keep that in mind as we go through because

16 you will see them grouped together for analysis

17 purposes.

18 Okay. So, wrapping this all up, so

19 selecting a standard level, so now we have shown

20 how the efficiency levels are going to be set, how

21 if we were to use this metric, which C-values

22 would be used. So now for each efficiency level
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1 going forward, regardless of what metric would be

2 used, we would perform an average lifecycle cost

3 savings. And we would look at incremental

4 equipment costs and operational cost savings that

5 gets you. Yes.

6 MR. BROOKMAN: So just pause for --

7 MR. WEINTRAUB: I think we should, yes.

8 MR. BROOKMAN: Yes.

9 MR. WEINTRAUB: Take a little pause.

10 MR. BROOKMAN: Yes.

11 MS. WILLIAMS: Can we just finish these

12 last two slides maybe?

13 MR. BROOKMAN: Alison, it's not

14 happening yet. Hang on. Sorry.

15 Let me note that we have had virtually

16 all of our members join us. And some were delayed

17 via the weather. I guess Amtrak was

18 malfunctioning this morning, for one. But I'm so

19 glad that you all made it. So far I guess

20 virtually all but one of our meetings has been

21 affected by adverse weather. So hopefully that

22 will get better going forward.
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1 This next slide that Dan is about to

2 present, I think that trying to describe the

3 European system and kind of compare it to what is

4 being proposed here has been a little bit of a

5 distraction. This next slide, beginning on 15, is

6 really quite important because it really builds

7 off that, what was previously presented. So I'm

8 just going to check with a few of the members who

9 left the room. And I'll be right back.

10 MR. HANDZEL: I'll go check.

11 MR. BROOKMAN: Yes. Do that. Let's get

12 them back in here.

13 Do we have additional questions or

14 comments at this point? Are you able to follow

15 what we're doing, Doug and Greg? You're kind of

16 behind on the presentation side of this. Do you

17 have questions, Greg?

18 MR. TOWSLEY: Greg Towsley, Grundfos. I

19 don't think I had any questions on this part or

20 any comments on this part of the presentation.

21 MR. HANDZEL: Five minutes.

22 MR. BROOKMAN: How many slides do you
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1 have left?

2 MR. WEINTRAUB: We have two more on this

3 topic and then --

4 MR. BROOKMAN: I don't want to go any

5 further --

6 MR. WEINTRAUB: Yes.

7 MR. BROOKMAN: -- without these other

8 folks in the room.

9 MR. WEINTRAUB: Yes. These are

10 important.

11 MR. BROOKMAN: I'll be right back.

12 (Pause.)

13 MR. BROOKMAN: Okay. Dan, let's

14 proceed. Okay. So let me note for the record

15 that we have had a little bit of productive

16 consultation here. And Dan is going to proceed.

17 And we're going to take a break in about ten

18 minutes.

19 MR. WEINTRAUB: Yes.

20 MR. BROOKMAN: So then we can proceed

21 with caucuses meeting and further clarification,

22 that sort of thing. And I would welcome when Dan
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1 is finished any sort of interpretive comments from

2 individuals in this room who have a lot more

3 familiarity with what he is describing here, the

4 rulemaking process. Go ahead. The efficiency5 setting process.

6 MR. WEINTRAUB: Thank you, Doug.

7 So yes. This is wrapping up this

8 section. And so now we're looking at, regardless

9 of what metric we choose or how we do it, for each

10 efficiency level, we're going to perform a set of

11 analyses to determine whether those efficiency

12 levels are something that you would like to go

13 forward with. So the analyses that we're going to

14 look at, average lifecycle cost savings, so that

15 takes into account incremental equipment costs,

16 operational savings, define the lifecycle costs,

17 percent of population with net cost, net benefit,

18 and no impact, national energy savings, national

19 net present value, change in industry net present

20 value. So that's where we focus on the impact to

21 the manufacturers and additional downstream

22 analyses, such as emissions, monetization, and a
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1 few others.

2 So after all these analyses are

3 complete, the team will review these analyses or

4 the Working Group will review these analyses. And

5 you'll be able to propose the standard levels that

6 the group sees fit going forward. And that's what

7 will be presented and recommended to ASRAC. So

8 that's this whole high-level process. Now we're

9 out of the weeds here.

10 So are there any questions on this high11 level process?

12 (No response.)

13 MR. WEINTRAUB: Okay. So, finally, here

14 we're back into just a little bit more detail and

15 when we're talking about comparing your pump to

16 the standard levels. So I have given you a table

17 on the previous slides that had C-values. And you

18 have been given the PER calculator. You can

19 calculate how your pump performs.

20 So this is going to go through the

21 methodology that you can put those two things

22 together and see whether your pump would pass or
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1 fail at an efficiency level.

2 So the steps in detail. All right. So

3 you calculate your PER pump according to the

4 methodology described in the test procedure. Right

5 now you have a calculator spreadsheet that you can

6 use. Then use the energy conservation standard

7 formula to determine the PER standard specific to

8 the pump model's hydraulic characteristics at a

9 given efficiency level.

10 So what we have here in this equation,

11 we're using an example here: end suction close12 couple, 1,800 rpm. And the example, EL, is three,

13 so EL-3, off of the table that we had before. So

14 that C-value is 126.86. So this equation we have

15 here, PER standard equals, this big bracket right

16 here is one over BEP pump, required BEP pump

17 efficiency. And that can be pulled out because we

18 knew that that was the only variable. You

19 multiply that times all of these factors, which

20 are static and determined by the pump itself, your

21 hydraulic power, the factor of .947 or .985, and

22 the motor efficiencies, which would be pulled off
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1 a table, as we have discussed thus far. You

2 calculate that out, and you find out what the

3 standard is for your pump. And then you compare

4 what you have calculated for your pump itself

5 versus the standard, and you see whether you pass

6 or fail.

7 In the end, it's a spreadsheet

8 calculation, even fairly simpler than the PER

9 calculator, because there is only one equation

10 that varies. So each pump, you can look at

11 efficiency level 1, 2, 3, 4, 5, 6 and see where

12 you pass and see where you fail for every pump.

13 Okay. Are there questions on this?

14 (No response.)

15 MR. WEINTRAUB: Okay. So that's the end

16 of this section. We've gone through a lot. I

17 think we're ready for a break.

18 MR. BROOKMAN: Yes. Let's take a break.

19 And is 15 minutes going to be sufficient? Is that

20 going to work? Okay. So it's 25 minutes after

21 10:00. We'll resume at 10:40 here in this room.

22 Please make sure and wear your badge. The
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1 restrooms are on both ends of the hall. You know

2 where the coffee shop is. We'll resume at 10:40.

3 (Off the record.)

4 (On the record.)

5 MR. BROOKMAN: Let's resume. Please

6 take your seats. Alison is getting impatient. So

7 during that break, several members had a chance to

8 consult with their colleagues. Before we proceed

9 and move on, does anybody want to say anything

10 about the slide deck that we just reviewed with

11 Dan?

12 (No response.)

13 MR. BROOKMAN: Okay. So now we're going

14 to move to the engineering analysis.

15 MR. WEINTRAUB: Correct, yes.

16 MR. BROOKMAN: Okay. Dan's going to

17 proceed, talking about engineering analysis.

18 Please go ahead.

19 MR. WEINTRAUB: All right. Thank you,

20 Doug.

21 So now we're moving on to a new topic.

22 We're going to be taking you through the steps of
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1 the analyses. And this is the market and tech

2 screening and engineering analysis.

3 And, again -- so this is not in the

4 slides that you have right now. Those next slides

5 on max tech we're going to come back to after we

6 discuss the metric. So we're shifting gears.

7 Again, this is going to be very detailed

8 and very process-oriented.

9 And I think we have a sidebar that -- we

10 are going to take a break until they have

11 concluded.

12 MR. BROOKMAN: Let's focus up here.

13 Okay. Now we're starting.

14 MR. WEINTRAUB: All right. So, just

15 like before, very process-oriented. We are going

16 to get to some results here, preliminary results.

17 But there's a lot of analysis, a lot of process,

18 and I want to go slow and make sure everyone

19 understands it. And we are soliciting feedback

20 throughout this whole thing on the assumptions and

21 the data that we have used and any questions you

22 have along the way. So we'll be going slow.
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1 All right. So, to get started, so we're

2 starting with the flowchart here.

3 MR. BOTELER: Full screen.

4 MR. WEINTRAUB: I'm sorry. Thank you.

5 All right. So we're starting with a

6 flowchart of everything we're going to move

7 through today in this slide, so, again, market and

8 tech screening and engineering analysis.

9 So, starting at the top, this all starts

10 with the research that was performed by Navigant

11 and LBNL. So we performed manufacturer

12 interviews. We also did independent industry

13 research. This was the main source of all of our

14 data going through these analyses.

15 The next step through, we will select

16 design options, which is the market and tech and

17 screening analysis. And we'll walk through that

18 in detail.

19 MR. BROOKMAN: We do not have these

20 slides printed off.

21 MR. WEINTRAUB: No. I'm sorry. You do

22 not have those slides.
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1 From there, it splits. And we look at

2 two separate factors. We determine the available

3 efficiency improvements. And we also determine

4 the cost of applying these available efficiency

5 improvements or design options, as we call them.

6 From there, we model industry-wide implementation

7 of these design options. So how would these

8 design options be used in the marketplace? From

9 there, we will find the average incremental MPC,

10 so manufacturer's production cost, per unit sold.

11 So how much more would a unit cost?

12 Thank you, Doug.

13 And on the right side there, alongside

14 it, we'll find the aggregate conversion cost to

15 industry, so how much is the industry going to be

16 having to pay to implement these changes.

17 Off to the right in a parallel path, we

18 will also be modeling the MPC, manufacturer's

19 production cost, and the baseline markup. So

20 we'll get to those in detail. So I'll just leave

21 it at the high level now. You take those three

22 factors, and you put them together. And we model
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1 industry market pricing and economics, which then

2 allows us to find the average incremental MSP,

3 which is manufacturer's selling price. So how

4 much would a product go up in price to the first

5 purchaser at a given efficiency level? And that's

6 the key inputs going forward.

7 So are there questions on this high

8 level? Doug? Charlie? Sorry.

9 MR. POWERS: Chuck at Flowserve.

10 MR. BROOKMAN: Chuck, you're not coming

11 through. Sorry. Please.

12 MR. POWERS: Hello? One, two, three.

13 MR. BROOKMAN: Okay. Yes?

14 MR. POWERS: Test. I haven't paid my

15 taxes yet. Maybe that's why.

16 MR. BROOKMAN: Thank you.

17 MR. POWERS: Okay. So a question I have

18 is I think we spoke about this in detail that one

19 day we were talking about manufacturing costs and

20 all. I think it's a good chart, but it isn't so

21 succinct; right? There are a lot of variables

22 that go into each one of these; right, by
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1 different manufacturers. And larger companies

2 look at, you know, MSPs different than others;

3 right? So we just have to make sure we balance

4 those. In other words, it's not, you know, the

5 dictation of what we think it's going to be. It's

6 each company is going to -- you know, their

7 markups and all are going to be different; right?

8 MR. WEINTRAUB: Yes. So thank you,

9 Chuck. I definitely understand that. And we have

10 done our best to -- when looking at the factors

11 and the inputs into the model to take into account

12 both the large manufacturers and the small

13 manufacturers. But, as you'll see, the way we go

14 through, we do an industry-wide analysis. And we

15 try to choose our factors that were our inputs

16 based on blending both how the large manufacturers

17 and the small manufacturers would respond.

18 MR. POWERS: That's good. And I think

19 it's important also to know that if we're trying

20 to achieve a lower cost due to this development

21 for a manufacturer and that lower cost is

22 offshore, then that further decays any foundry
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1 work here in the States and development work here

2 in the States. It may take that work offshore. We

3 have to make sure we look at that factor and the

4 type of technology and where it's located.

5 MR. WEINTRAUB: And things like that are

6 taken into account. Chris, I believe that's not

7 in the MIA, manufacturer impact analysis, which

8 comes downstream. So we don't be dealing with

9 those discussions right now.

10 MR. POWERS: Right.

11 MR. WEINTRAUB: But they will be

12 factored into the decision-making analyses --

13 MR. POWERS: Right.

14 MR. WEINTRAUB: -- that you guys will

15 then be able to consider. Okay? All right.

16 Any other questions on the high-level

17 flowchart? We're going to walk through each box

18 in painstaking detail.

19 (No response.)

20 MR. WEINTRAUB: All right. Okay. So

21 we're starting with selecting design options,

22 market and tech and screening analysis.
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1 So the way this works, we start with an

2 initial list of technology options to improve

3 efficiency. These are basically we're reposting

4 what was posted in the framework because this is

5 what was first discussed. These have not been

6 screened yet. We're going to get to the screening

7 very shortly, but it's the process. So we started

8 with improved surface finish, improved hydraulic

9 design, reducing running clearances, reduced

10 mechanical friction and seal, and reduced

11 volumetric losses. So these were investigated

12 throughout the analysis. And we'll get to the

13 conclusions.

14 So the details on each of the design

15 options. So we'll start with improved surface

16 finish. So to improve your surface finish, you

17 can improve your casting techniques moving from a

18 sand casting to an investment casting, a die

19 casting, a lost foam-type casting, and other

20 processes. You could hand polish or machine

21 polish to come to a smoother surface or you could

22 coat or plate.
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1 Next, improved hydraulic design. So the

2 impeller and/or volute may be redesigned to a

3 higher efficiency using modern design and analysis

4 methods.

5 Reducing running clearances, reducing

6 clearances may reduce the backflow.

7 Mechanical friction and seals. So seal

8 friction is a parasitic load. Reducing it could

9 theoretically improve efficiency.

10 Reducing volumetric losses. Here this

11 was narrowed down to removal of thrust balance

12 holes. Thrust balance holes are used to ensure

13 that the pump is dynamically balanced. But

14 reducing the losses from these holes could

15 theoretically improve efficiency. So we'll get to

16 how these are screened out next.

17 Okay. So the screening analysis. And

18 here the purpose: to screen out technology

19 options that DOE will not consider in the

20 engineering analysis for commercial and industrial

21 pumps. So the method here, DOE evaluates the

22 technology options presented based on the
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1 following criteria. So we have technological

2 feasibility; practicability to manufacture,

3 install, and service on a commercial scale at the

4 time of compliance with any final standard would

5 be required; impact on product utility or

6 availability to the consumer; or impact on health

7 and safety.

8 So what we have screened out, so reduced

9 running clearances. So any significant reduction

10 in running clearances will directly reduce the

11 reliability of the pump. We found that the market

12 as a whole is running at the clearances that are

13 tightest, the tightest clearances possible, for

14 the reliability demanded by the consumer. So we

15 don't see that as a viable option.

16 Reducing mechanical friction in seals.

17 So friction is required for the seals to work

18 properly. Reducing friction in seals can result

19 in impaired seal performance or leaks. And

20 higher-end lower-friction material combinations

21 are available, but the potential gains are not

22 significant on the scale with the other design
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1 options.

2 Reducing volumetric losses. Thrust

3 balance holes are used to reduce wear on rub

4 surfaces and bearings. Removal of these holes

5 would require the pump to be redesigned in a less

6 reliable form. So they would incur redesign

7 anyway to do that.

8 Finally, surface coating and plating.

9 The industry has voiced concerns over the

10 reliability and durability of coatings when used

11 in clean water applications. So yes, they do have

12 uses in industry to protect the impellers, but

13 they have some issues on clean water. And there

14 are other options available.

15 MR. POTTS: Doug Potts, American Water.

16 I have a question about the seals. Did your

17 analysis include a comparison of packing to

18 mechanical seals and if there is a difference in

19 efficiency with going with one or the other?

20 MR. WEINTRAUB: So we asked these along

21 the way throughout our manufacturer interviews,

22 discussing if there are improvements available.
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1 The general consensus was that it was below the

2 order of magnitude that you would get from even a

3 polish on a pump that could take a polish or going

4 to hydraulic redesign. But I'll let them -- Mark,

5 do you have something to say?

6 MR. HANDZEL: No. Mark Handzel from

7 Xylem. Doug, I mean, the biggest problem is just

8 we waste a lot of water if we're using packing.

9 You know, that's why you just don't see us doing

10 that in the marketplace because most, you know,

11 mechanical rooms, other applications, they don't

12 want to be leaking fluid all over, which is what

13 happens with packing. So, you know, that's why

14 it's just not commonly used anymore. You know,

15 Chuck, Charlie, you guys can comment on --

16 MR. BROOKMAN: Mark, thank you. And now

17 to Chuck.

18 MR. POWERS: Yes, I would agree. And in

19 today's world, containment is everything, whether

20 it's pumping water or not, because you never know

21 what could be in there, chlorines or others and

22 chemicals. It's leakage. You know, things get on
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1 the floor, people slip, safety and all.

2 I think it's also important, too, Doug,

3 to make sure that the sustainability, which is

4 what you're leaning to, which is you so far are

5 doing the right thing. It's one thing for us to

6 come up with a rule, spend a lot of time in the

7 MEIs and all of that. And another thing, the MEI

8 goes out the door a week later once clearance has

9 opened up, once the seal does. So I think it's

10 important to look at what polishing does and how

11 long will that last. Right. And some of these

12 other things, we're not back to the roughness

13 coefficient that you originally had before you

14 polished it; right?

15 MR. WEINTRAUB: Yes.

16 MR. POWERS: Because I think the users

17 in the world don't want something that is only

18 going to be there for a week at that higher level.

19 And then we're right back to where we were because

20 we made some inappropriate decisions. So I think

21 the sustainability definition needs to come into

22 this as you're trying; right?
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1 MR. WEINTRAUB: Yes. Thank you.

2 MR. POWERS: And then the efficiency

3 gain, it's important when we look at different

4 products that if the overall efficiency gain we

5 already know in bare pumps is very small variance,

6 that what is that when you save potential

7 efficiency gains on seals is not significant.

8 Well, if the insignificance of the overall pump is

9 only X, you know, very small, and then that's only

10 Y, we have to look at that overall potential;

11 right?

12 MR. WEINTRAUB: Yes. And we do. And

13 the ones that are screened in, --

14 MR. POWERS: Yes.

15 MR. WEINTRAUB: -- we'll be going

16 through those in detail.

17 MR. POWERS: And then the other one is

18 safety. There are new rules on NSF. There are

19 rules on a lot of other factors coming out. We

20 may not be able to use certain kinds of materials

21 and other things that may be very viable for

22 manufacturability and others.
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1 And then a last point is if we have

2 thousands of a certain pump going out the door,

3 versus the engineered, which is not part of this

4 study at this point, thousands of pumps are being

5 polished and every one can be significantly -- you

6 know, in other words, --

7 MR. WEINTRAUB: Yes.

8 MR. POWERS: -- simple fixes may not be

9 economically feasible to be in the market.

10 MR. WEINTRAUB: Yes. We understand.

11 MR. BROOKMAN: That will be accounted

12 for.

13 MR. WEINTRAUB: Yes. It will be.

14 MR. BROOKMAN: Dan, keep presenting.

15 MR. WEINTRAUB: Thank you. All right.

16 So now we're moving into the design

17 options that have been screened in. So the

18 remaining design options --

19 MR. BROOKMAN: You said, "screened in."

20 MR. WEINTRAUB: Screened in.

21 MR. BROOKMAN: Thank you.

22 MR. WEINTRAUB: Remaining design options
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1 that we're going to go forward with and we're

2 going to go into detailed analysis on.

3 So hydraulic design, redesign options.

4 So you have your hydraulic redesign as a base. And

5 then there will also be hydraulic redesigns with a

6 change to advanced casting techniques. And we'll

7 get to the applicability of this. Obviously if

8 you're there, you can't switch to it already. And

9 that would be changes to investment die or lost

10 foam, et cetera. And then surface finish

11 improvement options, so surface polishing of the

12 impeller and/or volute. And we'll get to the

13 applicability of these.

14 So we're going to go through them in

15 detail again. And here we're highlighting the

16 applicability restrictions. So where do these

17 design options apply to in the marketplace?

18 Because not every design option applies to every

19 pump in the marketplace.

20 So hydraulic redesign. So here again

21 the impeller and/or volute geometry may be

22 redesigned to a higher efficiency. Any pump can
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1 be redesigned. So that's a design option that's

2 open to any pump in the market. Hydraulic

3 redesign would change to advanced casting

4 techniques. So here we would redesign, but the

5 impeller could also be cast using advanced

6 techniques, which would give it an improved

7 surface finish. We'll get to this more in the

8 future, but a lot of pumps are already there

9 already. They're using these improved techniques.

10 So the applicability restrictions are

11 the pump must be currently sand cast. So it must

12 be at the lower casting level, quality level, to

13 be brought up. And only bronze and stainless

14 steel impellers can be investment or die cast. You

15 can't bring a cast iron impeller into that

16 technology.

17 So, finally, surface finish improvement

18 options. So surface polishing of impellers or

19 volutes. So here they would be hand or machine20 polished to a smooth finish, which would reduce

21 friction. So there are more applicability

22 restrictions on this design option. So, first,
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1 cast bronze or stainless steel only. We have seen

2 if you're going -- polishing cast iron just is not

3 an effective solution. In the long run, it is

4 going to be pursuing any of that.

5 And since it's likely to only be used

6 for small efficiency gaps -- and we'll get into

7 what types of efficiency gains you can get -- this

8 is only an option for pumps that can get to an

9 efficiency level by using polishing. If a pump is

10 failing by a large amount, it would need to use a

11 hydraulic redesign to get there. There's just no

12 way that polishing can get you there.

13 And we'll go through the applicability

14 in detail on how it falls out in the marketplace,

15 what percentage of pumps could actually benefit

16 from these design options.

17 Are there any questions before we go

18 forward?

19 MR. BROOKMAN: Chuck Powers? And get

20 close, real close, Chuck.

21 MR. POWERS: The composite materials

22 will be addressed?
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1 MR. WEINTRAUB: We have not focused on

2 composite materials. The main focus of the types

3 of models that we have been analyzing has been

4 stainless steel and bronze impellers because we

5 have seen that as making up the vast majority of

6 the covered products in the marketplace. We know

7 that a hydraulic redesign would apply to any other

8 type of pump that's out there.

9 So additional considerations: models

10 dropped from the market. So we're going to get

11 into this in more detail later, too, but

12 manufacturers have indicated that many low13 performing, low sales volume pumps may be dropped

14 from the marketplace if they do not pass. And

15 some may be replaced with existing models that are

16 already owned by the manufacturer or some may just

17 be dropped altogether. We'll get into where this

18 may apply later on.

19 Okay. So that was the market and tech

20 and screening. And now we're looking at what

21 we'll call the engineering analysis. So here the

22 purpose is to determine the incremental changes in
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1 manufacturer selling price at each proposed

2 efficiency level, so those efficiency levels that

3 we looked at earlier.

4 The cost-efficiency relationship, it's a

5 key input to the downstream rulemaking analyses

6 that we've discussed before, such as lifecycle

7 costs and payback period, the manufacturer impact

8 analysis -- this will be a direct input there that

9 we'll go through later -- and employment impact

10 analyses. So this helps set up these downstream

11 analyses.

12 Okay. So here we're going to move on to

13 determining available efficiency improvements. So

14 hydraulic redesign. So we have a lot of text

15 here. I'll walk you through it slow. So

16 hydraulic redesign is the main driver in the

17 marketplace when it comes to determining a pump's

18 efficiency. Differing hydraulic redesigns are

19 what differentiate the most efficient products on

20 the marketplace from their low-efficiency

21 counterparts.

22 Theoretically, given enough time and
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1 money, which we'll discuss in the next section,

2 any pump can be brought to the max tech. If there

3 is a pump on the market that is the same flow and

4 specific speed and is at a very high efficiency,

5 then we can assume that any other pump in the

6 market, you spend enough money, you can get there.

7 For the analysis, the industry consensus

8 is that manufacturers would target an efficiency

9 level of MEI or PER-40. We haven't chosen where.

10 From now on, we're just going to keep those, dual

11 nomenclature but they will target an efficiency

12 level of MEI/PER-40 for any proposed standard that

13 is less to or equal to MEI or PER-40. And what

14 that means is that if we are looking at an

15 efficiency level of PER-25, then the manufacturers

16 are going to just do their redesigns up to PER-40.

17 The resulting product would be as good as PER-40.

18 And that has to do with the cost structure of

19 doing a redesign, which we'll get into, but it's a

20 large fixed cost you have to put in. So you're

21 not going to just take a baby step. You're going

22 to target higher.
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1 For standard levels above that baseline,

2 40, we believe they would target the actual

3 standard level. You wouldn't per se overshoot,

4 but you would go for -- if you're at a PER of 55,

5 you would target PER-55. You'd try to meet that

6 standard and not spend more money than you need

7 to.

8 Doug?

9 MR. POTTS: Doug Potts. I just have a

10 quick question. Could you define max tech? Is

11 that max, the currently available in the market or

12 --

13 MR. WEINTRAUB: Yes.

14 MR. POTTS: -- max that's physically

15 possible?

16 MR. WEINTRAUB: So that was a set of

17 slides that we had before. We decided to forego

18 for a bit, but I'll give you a little bit of an

19 explanation. So max tech is max available right

20 now -- sorry -- is the highest level of efficiency

21 that could be attained. It doesn't have to be in

22 the marketplace right now. It could be a product
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1 or component that could be added to your current

2 product to make it more efficient but isn't

3 necessarily in any products on the marketplace.

4 Max available is the highest efficiency

5 in the marketplace right now. And we do analyze

6 max tech and max available. And sometimes max

7 tech just will not be available in the

8 marketplace. You can't bring it in cost9 effectively. Sometimes it will. In this case --

10 and this is on the slides that we did not go

11 through -- max tech equals max available. The

12 consensus in the marketplace is these are mature

13 products. Any technology that is out there that

14 could be used to improve the bare pump efficiency

15 has been done already. And there are no new

16 technologies in the pipeline to improve the

17 efficiency. So basically we're saying your

18 highest target is what is out there right now. You

19 can reach for what is out there, but there is

20 nothing beyond what is out there efficiency-wise.

21 MR. POTTS: So, just to clarify, so in

22 general, you're saying for most pumps, max tech is
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1 max available?

2 MR. WEINTRAUB: That's correct, yes.

3 MR. POTTS: Okay.

4 MR. WEINTRAUB: Okay. All right. We're

5 going to move forward. Okay. So surface finish

6 improvement. So here we're looking at a chart

7 from HI 20.3, which discusses efficiency gains.

8 And so this chart provides guidance on the

9 efficiency that can be gained by improving surface

10 finish. And these improvements are defined as a

11 function of a pump's specific speed. So this

12 chart here, we have specific speed in U.S. units.

13 And we have points of efficiency improvement. And

14 you see that these high specific speed pumps

15 cannot -- they're gained from an improvement in

16 surface finish from 500 RA to 200 RA, which

17 equivalently would be approximately a sand cast

18 pump, so a fairly rough pump, versus an investment

19 cast smooth finish pump or a hand-polished pump.

20 The gain in efficiency points that you would get

21 is very small up at these high specific speeds.

22 You see here less than one percent of efficiency
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1 points improvements when you're over 1,500

2 specific speed. And that's because high specific

3 speed generally has wider passages, higher flow

4 pump, and the relationship of flow to the boundary

5 area or to the walls of the pump there's high.

6 There's more flow. And you're getting less

7 friction per unit of flow. It's going through. So

8 it doesn't have that much of an effect.

9 MR. BROOKMAN: Charlie Cappellino?

10 MR. CAPPELLINO: Charlie Cappellino with

11 ITT. Dan, could you just comment on the

12 population of pumps that you have surveyed, where

13 they kind of fall as far as specific speed?

14 MR. WEINTRAUB: Oh, yes.

15 MR. CAPPELLINO: In other words, the

16 majority of the population is --

17 MR. WEINTRAUB: Yes.

18 MR. CAPPELLINO: -- I'm guessing

19 somewhere between 1,500 and 2,500, maybe 1,000 to

20 2,500?

21 MR. WEINTRAUB: Actually, so I don't

22 have it offhand, but we can check later. But it's
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1 actually probably around 1,500 is the median for

2 end suction and for inline pumps that we were

3 looking at in our database. So the median is

4 where, somewhere around this range, so a small

5 improvement, very few pumps up here. This is not

6 common. Even 1,000 is still pretty low. But most

7 of the pumps are around here, very few all the way

8 here, very few all the way here.

9 MR. POWERS: And, Dan, this is Chuck

10 again, too. I think it's also important when you

11 -- you probably have it. We agreed on a certain

12 amount of head for analysis; right?

13 MR. WEINTRAUB: Yes.

14 MR. POWERS: You know, of head for stage

15 or, I should say, total head.

16 MR. WEINTRAUB: Yes.

17 MR. POWERS: And if you drew a line on

18 that, the specific speed can almost be a

19 correlation. So I think you'll find anything

20 below a certain value on what we've given data on

21 --

22 MR. WEINTRAUB: Yes.
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1 MR. POWERS: -- for that size pumps

2 would also be in that further out; right?

3 MR. WEINTRAUB: Yes. Thank you, Chuck.

4 That's correct. And in the analysis coming up, we

5 actually applied it to the real population of

6 pumps. So we looked at what the real population

7 of pumps had to gain. So we'll get there.

8 Okay. So I think we've -- are there any

9 other questions on this chart? Yes?

10 MR. POWERS: Yes. The chart doesn't do

11 a good job of it, but, actually, when you get out

12 around four and you go to five and seven thousand

13 specific speed, that chart goes the other way.

14 MR. WEINTRAUB: Okay. Yes. We just

15 don't have -- there are no pumps in the population

16 there. And the HI data doesn't address it. So

17 this is HI data out of their document. It's based

18 on tests.

19 So all right. So for those design

20 options, those are the efficiency improvements you

21 can get. It's pretty straightforward.

22 Now to the costs. So costs are going to
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1 get a little more complicated. So I'll try to go

2 slow. Okay. I'm going to walk through this

3 slowly. Costs of hydraulically redesigning up to

4 MEI or PER-40. So this is at the first level that

5 we're talking about. So HI conducted a survey on

6 the all-inclusive conversion costs required to

7 redesign a pump to meet a standard level of MEI8 40. Costs were specified for generic 150 and 200

9 horsepower pumps as generic size classes. And

10 costs were applicable to end suction close-couple,

11 end suction frame-mounted, inline, radial split

12 vertical, and vertical turbine submersible

13 equipment classes.

14 And just a quick look. This was the

15 survey provided by HI. And they looked at

16 redesign and prototype costs and initial tests,

17 pattern in tooling, testing, working capital, and

18 marketing costs, split them out, gave costs for

19 different horsepower groupings, and surveyed a

20 large number of manufacturers. I believe it was

21 17 and was aggregated.

22 So we worked with HI. We tried to
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1 understand these costs as best we could. And so

2 we're trying to use these costs, use that data, to

3 understand what the actual costs in the

4 marketplace would be.

5 So what we're seeing here on this chart,

6 so hydraulic, cost of hydraulically redesigning

7 one model. This is the aggregate cost. So these

8 are this cost, this cost, and this cost. So you

9 can see visually how it trends with horsepower.

10 Down here we have shaft horsepower at

11 BEP. Here we have average model cost to redesign.

12 And you see so we're starting at 160,000, ending

13 at 280,000. There's not a huge difference here.

14 It does go up, but, you see, you go from 188,752

15 to 268,203. We fit it to a polynomial.

16 When you look at all of the pumps in our

17 database -- we, as I said, we have 50 percent of

18 the shipments in the market right now, pumps. And

19 we have the performance of all of those pump

20 models. We correlate. For each pump, we look on

21 this curve. And we find how much it is going to

22 cost to redesign at a given horsepower. If it's a
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1 100-horsepower pump, it costs around $260,000 to

2 redesign. Each pump gets that.

3 Then we take the average for those

4 pumps, those pumps over the whole market for each

5 equipment class, to find out, what does that

6 average unit cost to redesign? And it's pretty

7 well-related to what the average horsepower is. So

8 the average end suction, close-couple and end

9 suction frame-mounted pump cost $209,000 to

10 redesign. You multiply that times all the models

11 in the marketplace, and you can kind of make your

12 way up. Inline, $206,000 or almost $207,000.

13 So that gives you an idea of the average

14 horsepower, also where these pumps are on average.

15 So, on average, they're smaller than this whole

16 range. And the costs are right over there.

17 So are there questions on this?

18 MR. POWERS: Yes. Dan, two questions.

19 Good points, by the way. First -- it's Chuck

20 Powers, by the way -- on the second bullet of the

21 first major category, --

22 MR. WEINTRAUB: Yes.
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1 MR. POWERS: -- you say costs are

2 applicable to all of the different sizes. I would

3 say there might be a minor change to that.

4 MR. WEINTRAUB: Okay.

5 MR. POWERS: On verticals, the bowl

6 assembly; --

7 MR. WEINTRAUB: Yes.

8 MR. POWERS: -- right, is the working

9 element, --

10 MR. WEINTRAUB: Yes.

11 MR. POWERS: -- similar to horizontal.

12 So your horizontal picture up there before, --

13 MR. WEINTRAUB: Yes.

14 MR. POWERS: -- that's the working

15 hydraulic element. The difference is on

16 verticals, based on customers, they'll sometimes

17 say wire to water. And then that really is a bowl

18 assembly performance. But if they say at the

19 discharge head, --

20 MR. WEINTRAUB: Yes.

21 MR. POWERS: -- the columns and the

22 heads can have a big factor in their design on the
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1 efficiency of the product and the costs associated

2 with that. So that statement where you say costs

3 are applicable to all, when you get over to the

4 verticals and all, it may not be the case. Okay?

5 Just for your awareness.

6 MR. WEINTRAUB: Yes. And I think so.

7 What we are trying to represent with these costs

8 is before you are getting to customer, specific

9 customer, specifications, we're talking about when

10 you are redesigning your catalog of pumps, to get

11 them to the catalog that the customer can pick

12 out. We need these bowls. And we're going to

13 need these columns. Those column costs that are

14 specific to their application don't come into play

15 here because they would have costs for you to

16 treat that column anyway.

17 MR. POWERS: But they go hand in hand --

18 MR. WEINTRAUB: Yes.

19 MR. POWERS: -- when somebody is looking

20 at it on the shaft timer or the friction of the

21 bearing, losses, and things like that. Shaft, I

22 mean, the vertical thrust load, because it's
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1 carried by the motor and that pump and all. So it

2 could be a factor, where the thrust bearing is, et

3 cetera.

4 The second one, can you explain the

5 second green bullet?

6 MR. WEINTRAUB: Sure.

7 MR. POWERS: Hydraulic redesign is not

8 expected to impact what you call the MPC, the

9 manufacturer production cost?

10 MR. WEINTRAUB: Yes. So I was going to

11 get to that.

12 MR. POWERS: Yes.

13 MR. WEINTRAUB: That's an important

14 point.

15 MR. POWERS: Yes. Explain that one.

16 MR. WEINTRAUB: So MPC is the cost of

17 your materials and labor, how much it costs to put

18 that pump together before you mark it up. And the

19 idea is for most of these pumps, from what we have

20 learned through our research and through our

21 discussions, is that if you have a pump at MEI-20

22 and you redesign it and you go through the cost to
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1 redesign it, that bronze is going to cost about

2 the same, that bronze impeller is going to cost

3 you about the same, per piece after as it is

4 before. Sometimes they could cost less. Sometimes

5 they could cost more. You can make design

6 improvements that reduce your cost. You can make

7 design improvements that increase your cost. But

8 the general consensus was that you are not going

9 to see a significant increase in your parts price.

10 Okay. Going to move forward. All

11 right. We looked through this. Okay. So the

12 next step, we just discussed hydraulic redesign

13 below an MEI or PER-40. Now we're going to look

14 at what happens when you need to go beyond there

15 to a higher efficiency level.

16 So sorry the text is so small. I'll

17 read through it slowly. Due to increases in

18 design and test labor costs, redesigns beyond MEI19 40 level will cost the manufacturers more to

20 complete. We're expecting it to cost more.

21 Manufacturers were surveyed on those costs of

22 redesigns, but we did not receive sufficient data
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1 to aggregate or just sufficient data to

2 characterize the market. But, instead, we did

3 some other research.

4 We looked in the EU Lot 11 preparatory

5 study on the cost of redesign to manufacturers.

6 And they provided costs by those manufacturers to

7 go beyond MEI-40. So the EU manufacturers

8 submitted data indicating that it would cost 1.6X

9 more to design a model to MEI-80 versus MEI-50.

10 Those were the increments that they provided their

11 data in. So per model, if you're going to go

12 there, go to 80 from 50, it is going to cost you

13 1.6 times more.

14 We spoke with HI. And we discussed

15 these numbers. And we understood, took into

16 account the ideas of small manufacturers in the

17 marketplace and the U.S. marketplace, and came to

18 a consensus on 1.8X to account for the increased

19 cost that the many small manufacturers in the U.S.

20 marketplace may face.

21 Yes?

22 MS. MAUER: Joanna Mauer. Can you just
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1 give a little more information about kind of what

2 is driving the higher costs to meet the higher

3 levels?

4 MR. WEINTRAUB: Yes. As far as I

5 understand -- and manufacturers may be able to

6 speak to it also -- when you are designing a

7 product, it is generally an iterative process. And

8 it takes time to get to where you want to be.

9 Getting to MEI-40 takes a certain amount of time

10 and will likely take on average a certain amount

11 of iterations to get there. To continue down the

12 line, to get even better and better takes more

13 time and labor, more work to get there. So just

14 the design labor of the design engineers working

15 to design this product, the test labor of the

16 people testing each iteration of the product and

17 all of that continues to build up as you try to

18 basically perfect your pump because right now

19 according to what we are seeing in the

20 marketplace, getting up towards MEI-70 or 85,

21 that's a perfect pump. That's as good as it's

22 going to get right now given current technology.
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1 It just takes more labor to get there.

2 MR. BROOKMAN: Meg Waltner, follow-on?

3 Okay. Charlie, go ahead.

4 MR. CAPPELLINO: I agree with everything

5 you said, Dan. I think there is another factor

6 there. And that is as the MEI gets higher, the

7 efficiency gets higher, the path to get there gets

8 less and less clear.

9 MR. WEINTRAUB: Yes, yes.

10 MR. CAPPELLINO: And that's the reason

11 there are iterations. It's not like we know how

12 to get there.

13 MR. WEINTRAUB: Yes.

14 MR. CAPPELLINO: In some cases, you are

15 redesigning. And you don't know what you are

16 going to get. And you fail. And you try again.

17 And you fail. And you try again. So the risk

18 gets higher as you raise the bar; right?

19 MR. WEINTRAUB: Yes.

20 MR. CAPPELLINO: So it will be more

21 uncertain.

22 MR. BROOKMAN: Thank you, Charlie.
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1 Meg?

2 MS. WALTNER: Yes. I have an additional

3 question. Would you talk in more detail about the

4 differences between the U.S. and the EU markets

5 and why the multiplier is higher in the U.S. for

6 40 to 70 versus 50 to 80?

7 MR. WEINTRAUB: So this basically came

8 about through discussions with Greg Case at HI. We

9 don't have a lot of data on this. We just have

10 what the EU said. We didn't have the U.S.

11 manufacturers. But we know that there

12 is a significant number of small manufacturers

13 here. And I really can't speak to the EU small

14 manufacturer, what there is there, but we know

15 that there is a significant amount of small

16 manufacturers. And those are not represented at

17 this table. And we know that they're going to

18 face a burden. So we know that their redesign

19 costs will be higher than the larger manufacturers

20 because they'll likely have to hire outside

21 consultants to redesign these for them versus

22 larger companies have internal resources to do so.
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1 This was our best estimate. And that's

2 what it is. It's an estimate. So yes.

3 Yes?

4 MR. POWERS: I think what you are trying

5 to show here is --

6 MR. BROOKMAN: Chuck Powers?

7 MR. POWERS: -- is very good, but there

8 are other factors like we recently -- and I think

9 the other manufacturers say the same. If you take

10 a standard sand casting; right, from the way you

11 make the pattern and the cope and the drag and all

12 the processes in the green sand and then you go to

13 lost foam, the cost of the variances of those

14 patterns will be a lot higher. In order to get

15 the lost foam, you might need to use that to get

16 to these better efficiencies; right?

17 MR. WEINTRAUB: Yes. So, Chuck, we

18 actually will go through that in detail.

19 MR. POWERS: Good. Good.

20 MR. WEINTRAUB: Yes.

21 MR. BROOKMAN: Keep going, Dan.

22 MR. WEINTRAUB: Yes. Okay. We're going
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1 to move. So we will go through that in detail:

2 the cost of those new technologies. All

3 right.

4 So are there any other questions on

5 these, these factors here?

6 (No response.)

7 MR. WEINTRAUB: Okay. All right. So

8 this is the next section that Chuck was alluding

9 to. Hydraulic redesign with change to advanced

10 casting. And here we're going to quantify how

11 much more it costs when you have to incorporate an

12 advanced casting technique to get to where you

13 need to be. So I'll go through this slow again

14 because it's so small.

15 So the HI redesign survey specifically

16 categorized costs related to pattern and tooling.

17 That was one of the categories we looked at

18 earlier. And that was at 150 and 200 horsepower.

19 The costs represented a blend of all the casting

20 methods used in the marketplace because it was the

21 costs of the manufacturers that were surveyed.

22 Industry research -- this was the
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1 research that Navigant and LBNL did -- indicates

2 that advanced casting tooling costs 2.4 times more

3 than sand casting tooling and advanced casting

4 methods currently make up 60 percent of the

5 market. And this is based on our research. This

6 is based on our discussions with various

7 manufacturers. And the costs come from talking

8 with manufacturers and talking with industry

9 resources in the casting industry. It varies. The

10 different methods vary. But we average to a 2.4

11 times more factor for those advanced methods.

12 So we had to do a little math on the

13 data that we had. So this is what HI gave us:

14 $44,000 for one-horsepower, $51,000 for 50

15 horsepower, $72,000 for 200 horsepower. Knowing

16 that advanced casting makes up 60 percent of that

17 cost and costs 2.4 times more and sand casting is

18 40 percent of the market and costs less, you can

19 do some math and figure out what the cost of a

20 sand cast, the average cost of a sand cast,

21 tooling in that population is. You can figure out

22 the average cost of sand cast here and advanced
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1 casting here. Basically what you have is if this

2 is the number, 50,800, that is 60 percent of the

3 market and this is 40 percent of the market, you

4 take a weighted average. And you'd get the number

5 that HI gave us. We just backed it out.

6 MR. BROOKMAN: Gary Fernstrom?

7 MR. FERNSTROM: This is Gary. So it

8 seems reasonable that the cost of advanced casting

9 tooling would be higher than sand casting, but

10 would the labor cost not be lower with advanced

11 casting than it would be with what I believe would

12 be more labor-intensive sand casting?

13 MR. WEINTRAUB: So that's a very good

14 question, Gary. Currently the vast majority of

15 the industry purchases their castings out of house

16 from suppliers. So there are no direct labor

17 costs involved. There is only the material cost

18 as they buy it from their manufacturers at a cost.

19 MR. FERNSTROM: Well, if most of the

20 manufacturers buy their castings, the costs are

21 reflected in the price they pay their supplier.

22 MR. WEINTRAUB: Yes.
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1 MR. FERNSTROM: And included in the

2 supplier price would be the cost of tooling and

3 the cost of labor. So I would just like to

4 understand how the cost of labor may or may not

5 have been --

6 MR. WEINTRAUB: That's a very good

7 question. Al, let me address first. And then if

8 I'm wrong, you can follow.

9 So the tooling aspect, Gary, of casting,

10 the manufacturers actually own their tooling. They

11 pay for it. So when they come up with a new

12 design, they pay the casting house to develop this

13 tooling. And they own that tooling. If they want

14 to pull it from them, they can. It's their own

15 property. So they're not paying for the tooling.

16 They are paying for the labor at the casting

17 house.

18 But that labor, our research has also

19 shown us that it is a wash between sand casting

20 and advanced casting. The costs are about the

21 same. You have to pay a lot up front to get into

22 these other technologies. But once you are, these
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1 costs are about the same per piece.

2 MR. BROOKMAN: Charlie Cappellino?

3 MR. CAPPELLINO: Charlie Cappellino,

4 ITT. I'm not sure that's my experience that an

5 investment cast component generally tends to be

6 more expensive than a sand cast component on a

7 price per pound basis. So I don't know if you

8 guys have any data where you have gone to

9 foundries and said, "Quote this part in investment

10 cast," "Quote this part in sand cast" because many

11 of the investment casting processes can be fairly

12 labor-intensive because there are lots of steps

13 involved and depending on how much automation they

14 have.

15 So my reflection is cost per pound or

16 cost per the same casting would be higher for

17 investment than sand in all cases. I mean, I

18 think --

19 MR. WEINTRAUB: Yes. So, Charlie, we

20 asked this question across the board to many

21 manufacturers. And the overall average that came

22 back, the numbers came out very close to the same.
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1 Some specified --

2 MR. POWERS: It just doesn't make any

3 sense.

4 MR. WEINTRAUB: -- higher. Some

5 specified lower.

6 MR. POWERS: It doesn't make any sense

7 to me either. And I'll tell you one avenue that's

8 a proof. Al runs a plant. So he sees all

9 aspects; right? I'll ask him to verify it. Sand

10 castings, the scrap rate is X. Whether it's lost

11 foam precision, it's Y. So, in other words, if Al

12 were to get in 100 sand castings, my guess is when

13 he starts machining them, flanges, different

14 pieces, he starts to find porosities and issues

15 that are inherent into sand casting, and the scrap

16 rate, so to speak, is more. Right? And he has to

17 account for that in his whole form of the cost;

18 right; whereas, like with Charlie, -- and I agree

19 with Charlie -- the investment in cost into the

20 precision, lost foam, all these things, is much

21 higher. But the scrap rate in a general sense

22 because you're going to a little bit better
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1 technology and all of that is much less. You

2 don't find let's call it the porosities; right?

3 MR. BROOKMAN: Lucas wishes to comment

4 here. No? Not now. Okay. Yes, Gary?

5 MR. FERNSTROM: So this is Gary.

6 Speaking from having done casting myself, I would

7 agree with the industry that generally investment

8 cast products are more expensive. However,

9 generally when you buy the investment cast

10 product, you are not supplying the tooling to the

11 casting house.

12 MR. WEINTRAUB: No. They are.

13 MR. FERNSTROM: I understand in this

14 case. Sand casting is more labor-intensive on

15 account of the fact it's less precise and you have

16 a greater waste as a result of the process.

17 Anyway, I would just ask you to reevaluate your

18 findings with regard to this one particular issue.

19 MR. WEINTRAUB: So as a resolution to

20 this issue, to move forward, I would like to see

21 if we could enlist HI's help or just the group out

22 there. Let's put together, let's get together,
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1 some information that the group, that the

2 individual manufacturers, can submit to LBNL and

3 Navigant under NDA. And we can see how those

4 compare to the answers that we have received

5 previously under NDA.

6 MR. BROOKMAN: This kind of feedback is

7 very helpful. Al Huber?

8 MR. HUBER: I think that one reason the

9 manufacturers said it was almost a wash, Gary is

10 right. You have to spend more time cleaning the

11 sand casting in-house, that you don't have to do

12 with the vacuum die cast or investment cast. So

13 if you look at the costs you're having to put into

14 the sand casting -- and I'm talking about

15 impellers here. I'm not talking about casings

16 now, --

17 MR. WEINTRAUB: Yes.

18 MR. HUBER: -- talking about impellers.

19 What we find is that when you combine those two,

20 it's almost a wash. But you do -- you don't have

21 the scrap rate with die cast or investment cast

22 that you have with sand cast either. However, we
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1 do charge back the foundry for the bad casting.

2 So, I mean, we're not necessarily eating it, but,

3 I mean, we have wasted some labor which we can't

4 recover from them. We don't lose that.

5 MR. WEINTRAUB: Yes.

6 MR. HUBER: But I think you are correct.

7 And I think that is probably why the industry told

8 you that.

9 MR. WEINTRAUB: Yes. And if anyone who

10 has not responded to me in the past wants to

11 submit information, we can work it into our

12 aggregated data. And we can see how that pans out

13 for the analysis.

14 MR. BROOKMAN: Lucas Adin?

15 MR. ADIN: This is actually just a

16 clarifying question related to the points that

17 have been just brought up. These costs are

18 related only to the production of the casting or

19 do they include the downstream -- once you receive

20 the casting, machining, cleaning, or whatever is

21 done on the manufacturing side --

22 MR. WEINTRAUB: Okay.
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1 MR. ADIN: -- that's something that we

2 should try to resolve.

3 MR. WEINTRAUB: Yes. We've moved away

4 from the original topic.

5 MR. ADIN: Right.

6 MR. WEINTRAUB: What we have up here on

7 the screen is tooling costs, which is a one-time

8 investment to the manufacturer. What we have just

9 been discussing is incremental MPC, how much more

10 do those pieces cost after the redesign. Our

11 initial assertion was that incremental MPC was

12 zero, the cost did not go up per unit.

13 Now, we have heard some opinions in the

14 opposite direction. And I think if we can get

15 input from people who have not provided input thus

16 far, we would love to and we can incorporate into

17 the analysis and move forward.

18 MR. ADIN: Well, and I think my point

19 was we just want to make sure it's clear that, you

20 know, exactly which costs we're asking for.

21 MR. WEINTRAUB: Yes. So it is the -- it

22 would be the cost change to your product based on
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1 going from a sand cast impeller to an advanced

2 casting. And that would be the impact on to get -

3 - I'm sorry; let me start again -- to get to the

4 finished part, get to the finished impeller. Does

5 it cost more to go to an investment casting than a

6 sand casting?

7 MR. POWERS: Dan?

8 MR. BROOKMAN: Chuck Powers?

9 MR. POWERS: Sorry. Chuck Powers. Sorry

10 about that. And I asked before. The reason --

11 well, let me back up. The product range we talked

12 about that we already voted on all involves a lot

13 of smaller pumps; right, and all of that?

14 MR. WEINTRAUB: Yes.

15 MR. POWERS: Are any of those pumps at

16 all composite materials? I mean, wear rings,

17 bearings I get. You know, they're given. But

18 casings, impellers, are any of those composite

19 materials?

20 MR. WEINTRAUB: I can't tell you an

21 answer right now. We can look into our database.

22 But I know it's not common for the ranges that we
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1 have.

2 MR. POWERS: Okay. The reason I said

3 it, because the other option if some of these

4 manufacturers go that way -- and some of them may

5 do it. Some of the ones we haven't talked to may

6 not be represented here. If they are in composite

7 materials, those costs, you know, the first cost

8 impact to those molds and that kind of stuff, it's

9 pretty high.

10 MR. WEINTRAUB: Yes.

11 MR. POWERS: Then the actual finished

12 product after those parts is lower.

13 MR. WEINTRAUB: Yes.

14 MR. POWERS: So and there are efficiency

15 gains and all that stuff. I just didn't know if

16 that's an option we'll ever touch. That's all.

17 MR. WEINTRAUB: Yes. So that is a good

18 point, but we're not addressing it in the analysis

19 because we're trying to represent the greater

20 industry. And small segments of that that may

21 choose to go their own way doing that, it's not

22 going to impact the overall cost to the industry
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1 significantly because we're dealing with such a

2 large volume of the industry is bronze, cast iron,

3 and stainless steel. So their percentage would

4 not have an impact, would not have a large impact.

5 Now, later on down the line,

6 manufacturing impact analysis, if we did conclude

7 that there is a specific subset of pumps in the

8 marketplace that are using a specific method and

9 that we need to take into account their

10 disproportionate burden, we can look at that down

11 the line.

12 Okay. So I am going to hit the

13 conclusion on this, and we are going to move

14 forward. Here our conclusion is advanced casting

15 tooling is 130 percent of what was quoted in the

16 HI survey. So the HI survey was a composite of

17 both advanced casting and sand casting. If you

18 want to just identify what advanced casting

19 tooling costs, it's 30 percent higher than each

20 one of these numbers.

21 So more numbers. How does this play

22 out? If we're going to say that some percentage
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1 of the population will need to go to advanced

2 casting and a hydraulic redesign, rather than just

3 a hydraulic redesign, to get where they need to go

4 -- let's walk through these charts. So hydraulic

5 redesign costs, which I have abbreviated as HRD,

6 this is the survey cost. So this is the HI cost

7 all in. This is the additional 30 percent, so the

8 difference between here and here that a pump would

9 incur to go to advanced tooling. So you add those

10 two up and --

11 PARTICIPANT: Dan, we can't see. Do you

12 have a darker color or --

13 MR. WEINTRAUB: No. This is all we've

14 got.

15 MR. HUBER: Dan, this is Al Huber.

16 MR. WEINTRAUB: Yes?

17 MR. HUBER: How do you get 30 percent?

18 MR. WEINTRAUB: Yes. So I will go back

19 here again.

20 MR. HUBER: Yes. Go back --

21 MR. WEINTRAUB: Yes.

22 MR. HUBER: -- because that doesn't look
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1 like 30 percent.

2 MR. WEINTRAUB: Okay. So we had to back

3 it out, so 30 percent of the tooling cost. It is

4 a bit confusing, but let me walk it through now.

5 Okay. This is what HI's survey was. It

6 represents 60 percent advanced casting and 40

7 percent sand casting. I had to back these numbers

8 out using an equation x/y.

9 MR. HUBER: So yes. So you're not

10 putting that whole additional cost difference --

11 MR. WEINTRAUB: Yes.

12 MR. HUBER: -- in there because it's

13 already in, some of it is already in the --

14 MR. WEINTRAUB: Yes. This is the

15 median.

16 MR. HUBER: Yes. Gotcha.

17 MR. WEINTRAUB: So got it. Okay?

18 MR. HUBER: Okay.

19 MR. WEINTRAUB: And so that's 30 percent

20 of tooling. When you move up the line and you

21 say, "Well, 30 percent of tooling," that ends up

22 only being 7 percent of total redesign cost. It's
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1 only a 7 percent increase of all those costs that

2 HI gave us, the marketing, the testing, and all of

3 that.

4 And we're really worried about the total

5 redesign cost. So here you have -- that's that

6 extra cost from tooling. You add that to your

7 baseline cost, and you get your new cost. And up

8 here we have the chart. This was the chart that

9 we looked at originally, the HI, HI's survey. And

10 this is the chart with the additional costs due to

11 advanced tooling, advanced casting tooling. And,

12 again, we see where the end suction and inline

13 product classes lie. Their average unit cost is

14 here around 25 horsepower pump.

15 Down here, we have it broken out by

16 equipment class just so you can see what these

17 costs were. The average cost for the end suction

18 pump is $223,000. The average cost for the inline

19 pump is $221,000.

20 Questions on this?

21 (No response.)

22 MR. WEINTRAUB: Okay. Now we're going
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1 to move a little more straightforward, moving on

2 to surface polishing. All right. So through our

3 manufacturer interviews and research, surface

4 polishing was determined to cost approximately 45

5 percent on average of the finished impeller cost

6 for the end suction and inline pumps. So it would

7 add 45 percent to the cost of the impeller if you

8 were to hand polish or machine polish or whichever

9 method manufacturers would choose to use.

10 These would either be purchased part

11 costs if they were to do that polishing out-of12 house at the foundry or it could be labor costs if

13 they were to do it in-house. But they would

14 affect the MPC. The cost of the impeller itself

15 would go up.

16 So we found finished -- yes? Yes. You

17 want to go back? All right.

18 MR. BROOKMAN: Greg Case?

19 MR. CASE: Greg Case, HI. I think it's

20 interesting that the inline costs are less than

21 the end suction costs. Is that from the HI data

22 that they were less?
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1 MR. WEINTRAUB: Yes. This is average

2 pump in the marketplace. This is purely a product

3 of the average horsepower model in the

4 marketplace.

5 MR. CASE: I mean, they're very close.

6 MR. WEINTRAUB: Yes.

7 MR. CASE: But I would have thought

8 those two would have been reversed.

9 MR. WEINTRAUB: Yes. There ended up

10 being because -- Greg, as we discussed, we used

11 BEP horsepower.

12 MR. CASE: Yes.

13 MR. WEINTRAUB: And the average BEP

14 horsepower of a pump in the marketplace for an

15 inline pump ended up being --

16 MR. CASE: Is lower.

17 MR. WEINTRAUB: -- a few decimals lower.

18 MR. CASE: Okay.

19 MR. WEINTRAUB: Yes.

20 MR. CASE: I get it.

21 MR. WEINTRAUB: But the costs are just

22 applied to every pump individually.
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1 MR. CASE: Thank you.

2 MR. WEINTRAUB: Yes.

3 MR. BROOKMAN: Joanna Mauer?

4 MS. MAUER: I just want to make sure I

5 understand what the chart is showing. So that's

6 the average cost to redesign a pump to meet an MEI

7 of 40?

8 MR. WEINTRAUB: Correct, yes. Yes. This

9 is the cost for all of the pumps in the

10 marketplace right now. On average, if you pick

11 the average pump, it is going to cost you this

12 much to redesign to MEI-40.

13 MS. MAUER: And you're saying a pump

14 that you produce with an advanced casting costs

15 more to redesign to meet an MEI-40 than the

16 average pump?

17 MR. WEINTRAUB: So if a pump needs to go

18 from sand-casting to investment casting or advance

19 casting, it is going to incur a higher level of

20 conversion costs to get there because they have to

21 invest in the better tooling.

22 MS. MAUER: Okay. So the blue line is
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1 what the cost is to redesign, for the hydraulic

2 redesign, without considering going to advanced

3 casting.

4 MR. WEINTRAUB: Yes.

5 MS. MAUER: And then the green is the

6 hydraulic redesign plus the advanced casting.

7 MR. WEINTRAUB: Yes.

8 MS. MAUER: Okay.

9 MR. WEINTRAUB: All right.

10 MR. BROOKMAN: Meg?

11 MR. WEINTRAUB: Excuse me. No. Alison,

12 both equipment classes --

13 MS. WILLIAMS: Okay. Sorry.

14 MR. WEINTRAUB: -- end up falling on the

15 same point because they are so close.

16 MS. WALTNER: This is Meg Waltner. The

17 60/40 number you used, that's based on what the

18 castings put is in the market today?

19 MR. WEINTRAUB: Yes. Yes. So yes.

20 Sixty/40 split based on our research and

21 interviews with manufacturers and then looking at

22 the database that we had for how many pumps each
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1 manufacturer has and such and looking at what

2 small manufacturers might do also, we came up with

3 60 percent of the market having advanced casts,

4 using currently employing advanced casting

5 techniques. They've gone there on their own, 40

6 percent not employing advanced casting.

7 MS. WALTNER: Okay. I guess I'm a

8 little confused as to why that number is

9 applicable to the HI costs because you would think

10 that that number already --

11 MR. WEINTRAUB: So the reason --

12 MS. WALTNER: Why is the split the same?

13 MR. WEINTRAUB: The reason it's

14 applicable, so the HI data that they gave us, the

15 HI data that they gave us, is this. So we have

16 cost at each horsepower. And that represents the

17 weighted average. It's just it's what the

18 industry is doing.

19 MS. WALTNER: I thought that was their

20 weighted average to move to MEI-40.

21 MR. WEINTRAUB: So yes. It's the

22 weighted average to move to an MEI-40, but,
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1 regardless of what their efficiency is now, you

2 can have a low-efficiency pump that's investment

3 cast. You can have a high-efficiency pump that's

4 investment cast. So the investment casting, yes,

5 it does give you a benefit, but it's out there in

6 the marketplace at all efficiency levels right

7 now.

8 MR. BROOKMAN: We have a question from

9 someone who is joining us online. I believe it's

10 Al Iseppon. I don't think it's Hal. I think it's

11 Al writes, "Has anyone considered the fact that

12 the advanced casting methods tend to be labor13 intensive and is only cost-effective if sourced

14 from low-cost countries?"

15 MR. WEINTRAUB: So those are discussions

16 we've had. Actually, based on our research, the

17 majority of the investment casting is done onshore

18 because the quality offshore is not there yet.

19 That's what we've found so far.

20 MR. BROOKMAN: Okay.

21 MR. WEINTRAUB: But yes, it is labor22 intensive. And I am sure that if manufacturers
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1 could find low-cost suppliers overseas that could

2 provide them their quality, they would go that

3 way. But, based on what we have seen, it's

4 onshore investment casting right now.

5 MR. BROOKMAN: Chuck?

6 MR. POWERS: Dan, there are too, the

7 lost foam processes, that are not licensed in the

8 United States.

9 MR. WEINTRAUB: Okay.

10 MR. POWERS: They only are offshore,

11 just for your note.

12 MR. WEINTRAUB: Okay. Yes.

13 MR. POWERS: So there's a mix there. But

14 be careful because there's --

15 MR. WEINTRAUB: Yes.

16 MR. BROOKMAN: Okay.

17 MR. POWERS: You know, we can't get it

18 domestically. We can only get it offshore.

19 MR. BROOKMAN: Thanks, Chuck.

20 MR. WEINTRAUB: Okay. Yes. And these

21 are things that will be considered.

22 MS. WIDDER: I just wanted to revisit
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1 the --

2 MR. WEINTRAUB: Yes.

3 MS. WIDDER: -- 60/40 split again. And

4 correct me if I am saying this wrong, Dan, but

5 just clarifying one thing. Really, the relevance

6 of that is only establishing the cost of advanced

7 casting versus sand casting. And there weren't

8 exact direct costs of that. And so using the HI

9 aggregate tooling cost and then knowing how much

10 advanced casting and sand casting is in the market

11 today, both of those represent what is occurring

12 today. And so the only -- those are just used to

13 establish a cost for each of the relative

14 technologies and then carry that forward. The

15 60/40 split is not carried forward.

16 So in the future, to get to 40 percent,

17 hypothetically, you might see more advanced

18 casting. And so the percentage advanced casting

19 would increase. And, actually, probably the HI

20 tooling costs would then increase commensurately.

21 MR. BROOKMAN: That was Sarah.

22 MS. WIDDER: Was that helpful or that
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1 seemed unhelpful?

2 MS. WALTNER: So I guess my question --

3 MR. BROOKMAN: Meg Waltner?

4 MS. WALTNER: Meg Waltner. Sorry. So

5 the HI survey data --

6 MR. BROOKMAN: Just a second. Hey,

7 Sarah, that seems to be a dead spot. Step out of

8 there. Find a --

9 MS. WIDDER: A dead spot?

10 MR. BROOKMAN: Yes. The mike never

11 works there.

12 MS. WIDDER: Oh, okay.

13 MR. BROOKMAN: Meg, keep going. Meg

14 Waltner?

15 MS. WALTNER: Meg Waltner. So the HI

16 tooling data, does that not represent a different

17 split than 60/40 since that is the tooling cost to

18 move to an MEI of 40? Would the tooling for MEI19 40 not be different than the current split of

20 tooling?

21 MR. WEINTRAUB: We believe it represents

22 -- and so there are no details, consensus on where
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1 it is, but we believe through discussions with

2 Greg that that represents manufacturers sticking

3 with the methods that they're using. That is the

4 assumption we're making. That is a very good

5 question.

6 MS. WALTNER: Okay.

7 MR. WEINTRAUB: We believe the HI costs

8 represent manufacturers staying with those methods

9 that they were already using. If they're using

10 sand, they were quoting cost to redesign using

11 their sand tooling. If they're using investment,

12 it's the cost to redesign using their investment

13 tooling. That is a very good question.

14 MS. WALTNER: Okay.

15 MR. WEINTRAUB: That's an assumption

16 that we had to make.

17 MS. WALTNER: Okay.

18 MR. BROOKMAN: Okay? Yes? Okay.

19 MR. WEINTRAUB: Okay.

20 MR. BROOKMAN: Okay. We're about to

21 move on here. Okay. Keep going.

22 MR. WEINTRAUB: Going forward, so we're
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1 going to move back to polishing. So with

2 polishing, just to recap, we found a cost. We

3 found based on surveys that cost to polish is

4 about 45 percent of the impeller cost, the cost

5 that for the manufacturer a finished impeller

6 would go up 45 percent if they had to polish.

7 We were able to trend out impeller costs

8 based on data we collected from manufacturers in

9 our interviews. And we were able to trend those

10 out. We're using a factor down here, which I'll

11 get into more detail later, but it's based on the

12 specifics being divided by the flow, normalized to

13 the physical speed. We'll get into that in more

14 detail, but it's a good trending factor for these

15 types, for the impellers.

16 It ends up being, over the range of the

17 pumps that we're looking at, the cost could be

18 lower than $30 per product up to $230 per product.

19 But, on average, the shipment-weighted cost of the

20 average pump out the door, its impeller would go

21 up $46 for an end suction or $50 for an inline

22 pump.
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1 Yes, Charlie?

2 MR. CAPPELLINO: Charlie Cappellino,

3 ITT. So the cost for polishing, is that assuming

4 that work is done domestically?

5 MR. WEINTRAUB: It's based on what each

6 -- so it's based on our surveys of the

7 manufacturer. So it's based on whatever each

8 manufacturer said that they would do. Some would

9 do it out-of-house. Some would do it in-house.

10 Some would do it overseas. Some would have the

11 foundries do it.

12 MR. CAPPELLINO: So it's just kind of an

13 overall average?

14 MR. WEINTRAUB: It's a representative

15 average of what would take place in the industry.

16 Okay. And these costs would apply to the

17 manufacturer's production costs. It's a cost of

18 labor or material. Okay.

19 If there are no other questions, we'll

20 move forward.

21 (No response.)

22 MR. WEINTRAUB: So this just summarizes
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1 the costs. There's nothing new here. On the

2 right, we have the polishing costs that we just

3 discussed. Over here, we have costs below MEI-40,

4 hydraulic redesign costs that we went through

5 first, hydraulic redesign costs with that added

6 advanced casting. Then we have the hydraulic

7 redesign -- this should say, "above." I'm sorry.

8 This is at MEI-70 as a reference. So these two

9 columns are just these two columns multiplied by

10 the 1.8 factor that we discussed earlier, to put

11 it in perspective. Okay.

12 Yes?

13 MR. BROOKMAN: Hey, Mark, thank you.

14 MR. HANDZEL: Mark Handzel from Xylem.

15 Just for reference for people looking at that

16 outside of the meeting, you really should explain

17 --

18 MR. WEINTRAUB: Yes.

19 MR. HANDZEL: -- what you expect would

20 have to be done to get to 70, what would have to

21 be done to get to 40, like, you know, if you are

22 using advanced casting and polishing to get to 70.
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1 You know, just explain it on the slide, just

2 because people are going to look at this outside

3 of the meeting.

4 MR. WEINTRAUB: That's a good point.

5 Part of the premise that we're going through here

6 is that at 70, some pumps don't need to go to

7 advanced casting. It's up to the manufacturer how

8 they're going to get there, especially the higher

9 specific speed pumps that aren't going to benefit

10 from the smoother surface finish.

11 And the way we looked at it was you're

12 only -- we'll get to how we choose kind of what

13 percentage of the populations might benefit from

14 something. We're not going to assign a cost of

15 hydraulic redesign with investment casting to a

16 1,000 specific speed pump that wouldn't really

17 benefit from that because that's an added cost

18 that you economically wouldn't choose to do

19 because you could get there with a design.

20 MR. HANDZEL: Mark Handzel again. That's

21 kind of the problem with this, is you're trying to

22 make it black or white and it's never black or
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1 white until --

2 MR. WEINTRAUB: Well, we know it's not

3 black or white, but we do -- in the following

4 slides going forward, we are going to go through

5 the distribution of the industry because we have

6 this pump database. And we try to make decisions

7 of what is going to happen based on the database,

8 the distribution of flows, head, specific speeds,

9 and all of that is. Okay.

10 MR. BROOKMAN: Louis Starr?

11 MR. STARR: So Louis Starr with NEEA.

12 Just kind of to frame some of these things, so the

13 efficiency increase in general of the weighted

14 average increase in efficiency of going from MEI15 40 to 70, how much of a percent is that?

16 MR. WEINTRAUB: How many points?

17 MR. STARR: It's less than one; right?

18 MR. WEINTRAUB: No. It's more than one.

19 Does anyone have the C-value charts? I can

20 probably pull them up. Yes. There's a C-value

21 chart in your slides from earlier. Thank you,

22 Doug. Let's see. Those C-values are actually
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1 efficiency points, three percent, so three

2 efficiency points. Okay. So that would be 3

3 efficiency points going from 40 to 70.

4 Louis, does that answer your question?

5 MR. BROOKMAN: Just hang on a second.

6 MR. STARR: I was just trying to

7 understand. Normally a pump efficiency is about

8 60 percent. And so with these new levels, what

9 would be the new efficiency level? Sixty-one

10 percent?

11 MR. WEINTRAUB: So, unfortunately, there

12 is no normal pump efficiency, which is the result

13 of why we're using the MEI curve. And that's why

14 we're keeping things in terms of C-values because

15 C-values are the incremental gain. They're not an

16 absolute gain. And I think we're going to move

17 forward.

18 MR. BROOKMAN: Yes.

19 MR. WEINTRAUB: Okay. New section. Now

20 we're going to move on to modeling the industry21 wide implementation of design options at each

22 efficiency level. So this is what I have been
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1 alluding to. We are going to look at how the

2 industry breaks down and how these design options

3 could be applied and what the cost of them would

4 be across the industry. All right.

5 So I'm going to walk you through the

6 methodology. For each equipment class, the

7 engineering analysis will attempt to model the

8 redesign choices that will be made by the industry

9 when faced with various efficiency levels. A cost

10 model will start with the total number of pumps

11 failing at a given level. That's what we have

12 here. And then we'll assign design options to

13 each failure based on market data and direct

14 industry research. So here we have our database

15 with all models and an equipment class.

16 You choose an efficiency level. So we

17 analyze all the efficiency levels, but you choose

18 one at a time. And at each efficiency level, you

19 have pumps that are failing and pumps that are

20 passing.

21 We're going to get into this: direct

22 industry research and model distribution. That's
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1 what we're going through next. And you output the

2 number of models that are -- estimate the number

3 of models that are going to be dropped and not

4 redesigned, the number of models that would be

5 hydraulically redesigned, the number that would be

6 hydraulically redesigned and changed to investment

7 casting, the number of models that would be

8 polished. We're going to go through how we get

9 there.

10 Are there questions on the high level

11 here? This is what we're going to focus on. Okay.

12 Al?

13 MR. BROOKMAN: Al Huber?

14 MR. HUBER: Al Huber, Patterson. How

15 did you determine which one you would use? In

16 other words, I guess if it's close, you would use

17 polishing, but, I mean, if you had to do redesign

18 --

19 MR. WEINTRAUB: Al?

20 MR. HUBER: -- where you had to change

21 to advanced design tooling, unless you know what

22 the manufacturer already has, how do you decide --
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1 MR. WEINTRAUB: We're going to go

2 through that assumption right now, Al. Thank you.

3 MR. HUBER: All right. Go.

4 MR. WEINTRAUB: Good question. That is

5 exactly what we're going to walk through.

6 Okay. So this is another high-level

7 chart. Well, it's more detailed than before. I'm

8 going to walk you through it. Okay. Number of

9 failing models. That's the top of that circle

10 that we were just at from the survey. Right now

11 we're using Navigant and LBNL's database. We hope

12 to be using data from the HI-NEMA BIS database to

13 update this after this meeting.

14 You take out your models that are

15 dropped and not redesigned. We're going to get

16 into that detail also. From there, you get models

17 requiring redesign, number of models. Based on

18 our research, we looked at the breakdown in the

19 industry of number of pumps that are investment

20 cast, so advanced casting, percentage. We applied

21 them, sand cast and the percentage that are other

22 type, fabricated stainless steel models.
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1 Then you look at them and say, "Well,

2 what can happen to each one of these?" So a

3 fabricated stainless steel model can only be

4 hydraulically redesigned. It's the only option.

5 Investment cast and die cast models can only be

6 hydraulically redesigned because you can't polish

7 it to get it any smoother. It's not worth that.

8 And you can't change your casting process because

9 you're already at the better casting process.

10 The only models that had any variability

11 in them were the ones that were sand cast. So we

12 got the percentage of the market that is sand

13 cast. So we have the number of models that are

14 sand cast.

15 Of these pumps, not all pumps are even

16 eligible to be polished. If you're failing and

17 you're really failing, you can't be polished. It's

18 not going to happen or you can do it, but it's not

19 going to get you anywhere. So it's not worth the

20 cost.

21 The definition of eligible down here,

22 you need to be sand cast. So we got that. We
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1 determined a specific speed under 1,200. Through

2 discussions with Greg Case, we came up with a

3 cutoff saying beyond there, if your specific speed

4 is above there, you're probably not going to do

5 this anyway because your benefits just aren't

6 there. And you need to be able to meet the given

7 efficiency level just by being polished. So

8 you've got to be close to it. And we have those.

9 We have those distributions because we have a

10 database.

11 So from there, you get a small chunk,

12 you know, that are even eligible to be polished.

13 Then of those ones that are eligible to be

14 polished, not every manufacturer is going to

15 choose to take that path. They may just redesign

16 it anyway. So we made the assumption here that of

17 the ones that could even could be polished, 50

18 percent would be polished, 50 percent would be

19 hydraulically redesigned. That's that split. And

20 that was an assumption. The ones not eligible to

21 be polished, they could either be hydraulically

22 redesigned or hydraulically redesigned with a
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1 change to investment casting.

2 The way we determined how many would be

3 changed to investment casting, this is an

4 assumption of the level. We talked with Greg Case

5 of HI, talked about where the market is right now

6 -- 60 percent is what we have -- thinking that

7 maybe 10 percent would go there over time, that

8 it's never going to be 100 percent of the market

9 investment casting. And, you know, that is open

10 for discussion. That is the way we get this

11 percentage. So saying 60 percent are advanced

12 cast right now; after, maybe 70 percent will be

13 advanced cast.

14 Okay. So are there questions on how we

15 slow this down?

16 MR. BROOKMAN: Chuck Powers?

17 MR. POWERS: Hi, Dan.

18 MR. WEINTRAUB: Yes?

19 MR. POWERS: Chuck Powers, Flowserve. So

20 somehow in this equation in a high level, you did

21 a nice job laying that out, you and Greg and the

22 world, to pumps. But I think what we have to
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1 consider is my view and the people I've spoken to

2 and corporate level, if they're going to spend the

3 200,000 or 300,000 per pump -- okay? -- and just

4 going by the numbers and let's say a particular

5 product line on one of those end suctions that our

6 consumers buy is, you know, 50 to 100 models.

7 We're talking a huge investment; right, which is

8 good.

9 MR. WEINTRAUB: Yes.

10 MR. POWERS: Right? And you're moving

11 the needle. But for them to get done with all of

12 that and still have to deliver to the customer

13 base a lead time of X, which is for some of these

14 products same day or less and in some cases a

15 little bit longer, the polishing won't come into

16 play.

17 They're not going to spend that kind of

18 money is my take to then put a lot of people on

19 the shop floor polishing impellers because -- I'm

20 assuming. You don't give enough detail here.

21 You've got volutes versus impellers. And certain

22 things you'll be doing on either one of them. And
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1 probably the volutes will be more of the iron and

2 the impellers would be more the stainless or

3 bronzes, so to speak, but there are other things

4 being done. I think we have to just get a little

5 more realistic as we can in getting close to that.

6 I don't know the right answer; right?

7 MR. WEINTRAUB: Yes. So --

8 MR. POWERS: We have to be careful with

9 this because my guess is there is

10 manufacturability. There's what the market --

11 it's not just efficiency; right?

12 MR. WEINTRAUB: Yes.

13 MR. POWERS: It's lead times. It's a

14 lot of other factors; right?

15 MR. WEINTRAUB: Yes.

16 MR. POWERS: And the other thing is,

17 just to help you on this thing, as best I can

18 tell, -- you talk to Charlie and others -- when

19 you go from 40 to 70, efficiency is not the only

20 answer because, all of a sudden, if Doug says,

21 "Chuck, I need on certain products a range from X

22 of BEP to Y beyond that," when you start pushing
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1 efficiency, you can get the efficiency you need.

2 But the NPSH range on the curve, --

3 MR. WEINTRAUB: Yes.

4 MR. POWERS: -- other factors, having a

5 healthy pump, rather than what we call a peaking

6 pump will come into play big time.

7 MR. WEINTRAUB: Yes.

8 MR. POWERS: So you may make your 70-80

9 percent MEI, as you want to play it, or however,

10 but you're going to lose out on other factors;

11 right?

12 MR. WEINTRAUB: Yes. But, Chuck -- yes.

13 MR. POWERS: Do you know what I mean? So

14 I'm just saying --

15 MR. WEINTRAUB: Yes. Yes.

16 MR. POWERS: I threw a lot out there.

17 I'm not trying --

18 MR. WEINTRAUB: Yes. Chuck --

19 MR. POWERS: There's a lot here that we

20 don't walk down a path and just make some high21 level assumptions thinking things are going to be

22 a certain way. Like when you say 50/50 on that
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1 polished versus hydro, I think when you've got a

2 million pumps going to the field, having -- I

3 know, you know, people like to employ people, but

4 having a bunch of guys in the shop polishing

5 impellers is not the answer.

6 MR. WEINTRAUB: Yes. So, Chuck, let me

7 first address the polishing comment that you made.

8 So the first comment that you made was incurring a

9 redesign cost and then spending time and money

10 polishing. So, first of all, we're going to see

11 that the polishing percentage is very small. But

12 the idea is that if we're choosing the design

13 option of polishing, that pump is not incurring

14 the cost of a redesign. Someone has chosen that

15 they have decided to use their resources to

16 hydraulically redesign a large chunk of their

17 pumps. And this one or two pumps that are left

18 they decided to polish because it is going to save

19 them money this year and next year.

20 MR. POWERS: Well, then just I'm going

21 to interrupt.

22 MR. WEINTRAUB: Yes.
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1 MR. POWERS: Your chart doesn't seem to

2 lean there because you start at the top "Models

3 requiring redesign."

4 MR. WEINTRAUB: Okay.

5 MR. POWERS: From there --

6 MR. WEINTRAUB: That is a good point.

7 Yes.

8 MR. POWERS: From there, you lead to

9 polishing.

10 MR. WEINTRAUB: So that's the

11 difference.

12 MR. POWERS: So I assumed they're being

13 redesigned.

14 MR. WEINTRAUB: That is a good point.

15 And that is a wording issue.

16 MR. POWERS: No problem. No problem.

17 MR. WEINTRAUB: And I agree. The word

18 "redesign" means it needs something done to it to

19 pass. And that is a good point. It does not mean

20 the same as hydraulically redesigned.

21 MR. POWERS: Okay.

22 MR. WEINTRAUB: And that is a good
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1 point.

2 MR. POWERS: And there is one more

3 factor that the world out there deals with, not

4 what we're theoretically putting together here.

5 MR. WEINTRAUB: Yes.

6 MR. POWERS: A customer is going to say,

7 "Chuck, I need to replace that impeller" -- just

8 bear with me -- five years down the road, two

9 years down the road, whatever. When you polish,

10 it's not an exact science. Joe in the shop

11 polished it the day it was built. You know, he

12 had a good day, and he did a good job. Right?

13 Five years later, Doug calls up and said, "Man,

14 that pump is worn out, Chuck. I'm going to go to

15 your distributor and buy a replacement." It won't

16 be the same. Then they buy the building material,

17 then identify it and the degree in polishing and

18 where it's trimmed and all of that.

19 MR. WEINTRAUB: Yes.

20 MR. POWERS: But my point is polishing

21 leads to complications; right? It's a good thing,

22 but it's not sustainable.
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1 MR. WEINTRAUB: Yes.

2 MR. POWERS: That's my take. I mean, if

3 you guys want to speak up? I can tell you it's a

4 nightmare.

5 MR. BROOKMAN: Mark Handzel?

6 MR. HANDZEL: Yes. Mark Handzel from

7 Xylem. I would fully agree with Chuck. I mean,

8 you know, the polishing is a thing that the

9 manufacturer keeps in his back pocket. If

10 somebody asks us to certify performance of tests

11 and we're not reading published efficiency, we can

12 go in and do some polishing to get to the number.

13 So, you know, patterns change over time. Patterns

14 wear over time. So it's kind of used as a safety

15 factor that the manufacturer uses.

16 MR. POWERS: And I think, Dan, the buy17 in from -- forget the manufacturer for a minute.

18 The buy-in from the public, from the users is

19 sustainability. Polishing is way over. It's not

20 even the same game; right?

21 MR. BROOKMAN: Okay. So that would --

22 MR. POWERS: And sand castings is not
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1 sustainability. It's a life, but it's not there.

2 MR. BROOKMAN: Chuck Powers. Now to

3 Greg Case.

4 MR. CASE: Dan, one of the things that

5 we discussed --

6 MR. POWERS: Yes.

7 MR. CASE: -- when we were talking about

8 this is that polishing is probably a short-term

9 answer for people as they are trying to hit this

10 new target efficiency. And maybe they'll do that

11 for a short period of time until they get the

12 redesign they wanted.

13 MR. WEINTRAUB: Yes, yes. So let me

14 fast-forward a little bit. That's where it gets

15 --

16 MR. BROOKMAN: Lucas has a point here,

17 Dan. Lucas?

18 MR. WEINTRAUB: And when we get to the

19 results, you're going to see what we have modeled

20 here: less than three percent of failing pumps to

21 be polished. And we're trying to model the

22 industry. And we know that not everybody is at
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1 this table. And we know that there are small

2 companies that do not have the resources to invest

3 right now in a hydraulic redesign all around. But

4 if they can get away with polishing to get over

5 that hump as long as they can, it may happen. It's

6 supposed to be representative of a small portion

7 of the industry.

8 MR. ADIN: Right. So I just had --

9 MR. WEINTRAUB: Yes.

10 MR. ADIN: -- a kind of a higher-level

11 point along the lines of what Dan has been

12 alluding to. I mean, all of this is leading up to

13 something; right? We came up with some estimates.

14 And we had to make some assumptions along the way.

15 So we certainly don't expect to be able to make

16 decisions based upon what we are going to present

17 today. It would be great if we could.

18 I mean, we are right. And you guys all

19 agree with everything we have done. But we

20 understand that some of the assumptions probably

21 aren't exactly right. And to the extent we have

22 shown something up there that you don't -- I mean,
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1 the feedback you provide so far is great. I mean,

2 this is exactly what presenting this information

3 does, is gives you a chance to react. But

4 obviously to the extent you have more specific

5 ideas about what numbers like this could be,

6 that's, you know, what we need to know as soon as

7 we can so that we can give you refined analysis

8 that makes more sense. So just to kind of --

9 MR. WEINTRAUB: All right. So thank you

10 guys for the input on that. So we'll move

11 forward.

12 MR. BROOKMAN: Forging ahead, yes.

13 MR. WEINTRAUB: Yes. So now we're going

14 to get into some other assumptions that we will

15 definitely like to hear your input on. So removed

16 models that are dropped and not redesigned, so

17 we're making the assumption that not every pump is

18 redesigned. Okay. So I am going to walk through

19 this slow, and then we're going to talk about it.

20 For many failing models in our database,

21 manufacturers may choose not to redesign the pump

22 and drop that model from the market. Common
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1 reasons that we have encountered through our

2 discussions would be low sales leading to a poor

3 business decision for a redesign. Many pumps in

4 our database actually have zero sales. We know

5 they exist, but no one is buying them currently or

6 at least in 2012.

7 A company may already have a

8 hydraulically overlapping passing model that it

9 can leverage. Oftentimes with the large

10 manufacturers, there are multiple brands. They

11 can pull that brand in and use that pump to cover

12 the space that the failing pump was covering and

13 not incur costs.

14 Based on our direct industry research,

15 this was the research we performed when we

16 interviewed manufacturers and discussed what would

17 happen at different MEI levels. We estimate that

18 at the lowest level of a PER-10, 60 percent of the

19 failing models would be dropped and not

20 redesigned. These are a lot of pumps that have

21 zero sales. These are a lot of pumps that have

22 overlapping models in other brands. We can
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1 discuss this assumption in a second.

2 Going up the line, we also discussed

3 MEI-40 and what would happen at MEI-40. There we

4 saw on average 40 percent of those pumps would not

5 be redesigned. And that level we saw going

6 forward up to 70. I will give you our reasoning

7 behind this first, and then you can discuss.

8 At the lower levels, we are looking at

9 what the market is doing right now. And we saw

10 that many manufacturers have overlapping brands

11 and indicated -- this is not every individual

12 manufacturer. This is the industry as a whole.

13 Certain manufacturers have overlapping brands that

14 make up a large percentage of pumps that would

15 fail. You can look at the data and see what

16 people have indicated would happen. And on

17 aggregate, 60 percent of those models would not be

18 redesigned. It doesn't mean that you as a

19 manufacturer wouldn't do that, but we are modeling

20 the industry as a whole.

21 So I'll open it up for questions on

22 this.
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1 MR. BROOKMAN: Al Huber?

2 MR. HUBER: Al Huber, Patterson. One of

3 the reasons that they may have low sales is

4 because it's not competitive. So, I mean, they

5 would have to make a -- you would have to go to

6 the market and see if in every case -- I mean, I

7 would agree with you if there were no sales for

8 the 60 percent of those models, but I don't think

9 that's the case.

10 MR. WEINTRAUB: No, that's not the case.

11 It's not the case.

12 MR. HUBER: And I don't know that

13 because of overlapping brands -- it depends on how

14 they want to do their business. I mean, I really

15 don't -- I can't say. I don't have any

16 overlapping brands. So I wouldn't know.

17 MR. WEINTRAUB: Yes. So we're trying to

18 represent the ones that make a decision not to and

19 the ones that don't. That's what we're trying to

20 --

21 MR. BROOKMAN: Chuck Powers?

22 MR. HUBER: It just seems extremely high
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1 to us, Dan, --

2 MR. POWERS: Yes.

3 MR. HUBER: -- extremely high. We just

4 --

5 MR. POWERS: Yes, it does seem high,

6 but, Dan, I --

7 MR. BROOKMAN: Chuck Powers?

8 MR. POWERS: I guess the question --

9 Chuck Powers, Flowserve. The question I'd like to

10 ask is -- how should I say it? A model versus a

11 product line. In other words, if somebody had a

12 two-inch up to a ten-inch -- I'm just picking

13 something here. Okay? And they say that was 40

14 products. If you were to say to me, "Chuck,

15 they're going to drop 60 percent of that range of

16 that product," I highly doubt that. Now, if

17 somebody were to say to me that they're going to

18 drop a product line because it's a loss leader,

19 you know, it could be. But there are

20 manufacturers out there that have loss leaders but

21 they supply it because it's a part of a bigger

22 chain of product lines, like, you know, the
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1 chemical industry, standard end suctions and

2 other. They'll have loss leaders, but they have

3 to have them so that they can keep that in the

4 envelope for all the rest; right?

5 MR. WEINTRAUB: Yes.

6 MR. POWERS: So you have to be careful.

7 MR. WEINTRAUB: Yes.

8 MR. POWERS: The other factor on the

9 second major green box up there is you've got to

10 consider they may drop it because they'll just

11 take everything offshore now that they know

12 they've got to redo the line, manufacture

13 offshore, and forget about the U.S.; right? So

14 there are going to be product lines that are going

15 to go offshore or they'll find a company that

16 they're going to do inorganic activity with and

17 they're not going to worry about the U.S.

18 MR. WEINTRAUB: Yes.

19 MR. POWERS: So that there are factors

20 here beyond just those two smaller bullets you

21 have up there; right?

22 MR. WEINTRAUB: And, Chuck, to address
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1 your first question, so the idea of low sales does

2 not indicate that they'll just drop. That's

3 correct. So we didn't use that as the deciding

4 factor.

5 MR. POWERS: Yes.

6 MR. WEINTRAUB: We used our research

7 data --

8 MR. POWERS: Sure.

9 MR. WEINTRAUB: -- that said what

10 manufacturers were saying would happen, how many

11 they would redesign versus how many they wouldn't

12 even touch and say --

13 MR. POWERS: But it was clear on the

14 product range versus a product type?

15 MR. WEINTRAUB: Okay. And so that is

16 based on as submitted to our original survey by

17 manufacturers and by the current form of the

18 survey that we have, a model was a single line in

19 the NEMA, in the HI survey.

20 MR. POWERS: Yes. I think the first

21 survey had questions on the depth of those

22 questions.
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1 MR. WEINTRAUB: Yes, yes.

2 MR. POWERS: But, you know, you have

3 your survey. I'm not arguing.

4 MR. WEINTRAUB: Yes. So the current

5 survey --

6 MR. POWERS: It just seems strange.

7 MR. WEINTRAUB: The current survey is a

8 single line in that survey is a model. However,

9 each manufacturer wants to define their breakup of

10 their sales, their shipments, and their

11 performance. Those are models.

12 MR. BROOKMAN: Tom Eckman?

13 MR. ECKMAN: So that's 60 percent of the

14 failing models. What fraction of the total sales

15 volume is that?

16 MR. WEINTRAUB: Yes, exactly. Yes.

17 We'll get there. Actually, at the lower level,

18 PER-10 -- I think it's for end suction -- you're

19 below 7 percent of sales, but I think since we

20 never went through the max tech slides -- everyone

21 has their packet from earlier? If we flip, I just

22 want to give an example here so you can see what
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1 we're talking about this low end. Flip to slide -

2 - let's see, yes, 19. There we go. Here -- all

3 right. I'm just going to describe it to you. On

4 your y-axis, you have the failing C-value. Pumps

5 at the top, blue dots, those are more efficient.

6 Pumps at the bottom, blue dots, those are less

7 efficient.

8 Your red line there is PER-10. That's

9 anything below there fails at PER-10. You can see

10 where those pumps are sitting in the marketplace

11 compared to everything else. There are a lot of

12 pumps better than them in the marketplace. And

13 these are not representative of the massive

14 marketplace. And it kind of follows that these

15 are the stragglers down there at the very below

16 PER-10. They're not part of the bulk. So if you

17 want to look at it that way, it makes sense that

18 these guys could possibly be dropped. As you move

19 further down the line, that 40 percent, I

20 understand that could be for contention. But

21 you're still going to be losing those models at

22 the low end. They're carrying over. It's
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1 cumulative. But they're not a large percentage of

2 sales, and they're not a large percentage of

3 models overall. We'll actually look at the

4 numbers of models failing.

5 MR. POWERS: Dan?

6 MR. WEINTRAUB: Yes?

7 MR. POWERS: And it's a good chart, and

8 it shows the specific speed has a big play in this

9 thing; right?

10 MR. WEINTRAUB: Yes. That's a

11 discussion for another time, yes.

12 MR. POWERS: Which we had talked about

13 earlier.

14 MR. WEINTRAUB: Yes.

15 MR. POWERS: But the question is, when I

16 go out to the field, I ask a customer, what is the

17 application? And what do you need it for? And

18 Gary might say, "Hey, Chuck, I'm okay with that" -

19 - it doesn't mean he is, but "I'm okay with that

20 because that pump is designed a certain way with

21 the nozzle location and, you know, a little bit

22 higher head and this factor and that factor." Do
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1 you follow what I'm saying?

2 MR. WEINTRAUB: Yes, yes.

3 MR. POWERS: So there are loss leaders

4 in every product line. But the loss leaders are

5 needed because of the pumping applications the

6 customers had and what they need to use them for;

7 right?

8 MR. WEINTRAUB: Yes.

9 MR. POWERS: Some are what we call, you

10 know, peaking pumps, where they just run them once

11 a day.

12 MR. WEINTRAUB: Yes.

13 MR. POWERS: And sometimes they're run

14 24/7. It depends on the application. So there

15 may be some loss leaders that are only going to

16 run for an hour, but it's doing a certain role for

17 a certain factor. I think manufacturers, you

18 know, when you say it won't meet this, there's a

19 big issue here as far as what gets taken off the

20 marketplace and not. When you say there's a bunch

21 more up above that meet it, you've got to be

22 careful what that really says. You know, flow-
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1 wise isn't the only answer.

2 MR. WEINTRAUB: Right. And so what you

3 are saying is completely correct. I keep

4 reiterating on this. That is not, the idea that

5 they're loss leaders or there are low sales is not

6 driving our estimates of 60 percent. Our estimate

7 of 60 percent comers from what we have been told

8 from the industry under NDA interviews of what

9 percentage of pumps would be dropped of their

10 lines. It's an aggregate.

11 MR. BROOKMAN: Dan, as a process

12 point,

13 --

14 MR. WEINTRAUB: Yes.

15 MR. BROOKMAN: -- I'm thinking before

16 too much longer, we should break for lunch.

17 MR. WEINTRAUB: Okay.

18 MR. BROOKMAN: So you should be looking

19 for a natural break point.

20 MR. WEINTRAUB: Yes. We'll look for a

21 place to break here.

22 MR. BROOKMAN: Okay.
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1 MR. WEINTRAUB: But we can continue to

2 discuss this point --

3 MR. BROOKMAN: Yes.

4 MR. WEINTRAUB: -- as needed if anyone

5 has any other thoughts. I think this can be a

6 point for discussion in between meetings, too, of

7 trying to come up with a number that everyone is

8 happy with. This is what our data tells us, and

9 we can work off it. All we can do is work off

10 data.

11 MR. BROOKMAN: Tom Eckman?

12 MR. ECKMAN: Tom Eckman. I mean, it

13 just seems not out of the question that if Europe

14 went to 40 percent of the market standard that a

15 fair fraction of the existing market would fail.

16 If we're trying to cut out 40 percent of the least

17 efficient, it seems to me that just is a function

18 of where we decide to cut the standard at. The

19 higher efficiency, the more get removed.

20 MR. POWERS: Right.

21 MR. ECKMAN: So it shouldn't be a

22 surprise. It will be some that don't make it.
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1 MR. POWERS: Yes. We all agree. I

2 think we all agree.

3 MR. HUBER: They won't be redesigned.

4 MR. ECKMAN: Yes. It's just like it's

5 not worth doing it.

6 MR. POWERS: Or if the costs are

7 offshore, manufacturers go offshore for

8 manufacturing. There are other factors.

9 MR. ECKMAN: Whatever the solution is,

10 --

11 MR. POWERS: Yes.

12 MR. ECKMAN: -- they won't be in the

13 market anymore because they don't cut the mustard.

14 MR. BROOKMAN: So, Dan, keep going.

15 MR. WEINTRAUB: Yes. So I want to put

16 this in perspective of actual numbers now. So

17 we're talking about 60 percent. So what does the

18 60 percent mean? What does the 40 percent mean?

19 Right now we're looking at end suction close20 couple and end suction frame-mounted pumps

21 together. I must have had another slide with the

22 total number, but the total number of models that
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1 we have currently, 2,050. I think that's going to

2 go up when we get the HI data, but we had to base

3 it on what we have right now. So we're saying

4 industry has 2,050 pumps, saying at PER-10, 250 of

5 those fail by definition. It's 250 models over

6 those 2 equipment classes. Now, if we're saying

7 60 percent of the models are dropped, that's 123

8 dropped. That's 82 models requiring redesign.

9 That's the breakdown.

10 So, to put this into perspective, to let

11 you guys -- so you can think about what those

12 numbers mean for models across the industry. And

13 it goes up from there. You can just see the math.

14 So 25, 40. And we're going down. So we say 60.

15 We go down linearly to 50 percent being dropped at

16 PER-25, where it settles at 40 percent being

17 dropped at PER-40, where it goes out.

18 Again, I think this is a discussion

19 topic to have that we can work through and you

20 guys can put forward recommendations for where you

21 think and with justification and the advocates,

22 the manufacturers, can kind of try and settle on
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1 something. This is we presented the data we have.

2 That's the best we can do.

3 MR. POWERS: Dan, this is Chuck Powers.

4 It's a great chart. It's also a nightmare. That's

5 a scary chart up there.

6 MR. WEINTRAUB: Yes.

7 MR. POWERS: You're talking a number of

8 models dropped as a correlation to number of

9 manufacturers, you know, on their percentages.

10 What is unique here is if my company were to lose

11 328 out of the 820 there, -- okay? -- I might

12 survive. But if you've got a manufacturer that

13 that's 90 percent of this product, that 328

14 number; right -- and, you know, you're showing

15 total numbers; right?

16 MR. WEINTRAUB: Yes. So, Chuck --

17 MR. POWERS: He's in trouble.

18 MR. WEINTRAUB: We're not trying to

19 represent individual manufacturers.

20 MR. POWERS: No. I know you aren't, but

21 I'm saying it's --

22 MR. WEINTRAUB: Some manufacturers may
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1 decide that the status of their manufacturing and

2 their brand, say, we're just getting rid of this.

3 We don't need them. And then there are some that

4 are not going to get rid of any because they say

5 all of these are making money for us or we want to

6 be in the game on all of them. They're going to

7 stay there. We're trying to come up with a number

8 that represents the industry. It can't be applied

9 to an individual manufacturer because it won't

10 make sense that way. But we have to model the

11 industry as a whole.

12 And, regardless of what that number is,

13 whether that's 60, 40, 50, 30, it's going to be a

14 number. We know it is going to happen. And we

15 have to come up with a number that makes sense.

16 MR. POWERS: So the question would be

17 for the standards -- Chuck Powers, Flowserve --

18 standard product that we're talking about here,

19 then having products offshore for the standard

20 stuff because the cost would be -- you know,

21 possibly would not be part of it and brought into

22 the states, that might be the final answer here.
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1 MR. WEINTRAUB: Could you explain what

2 you mean by that?

3 MR. POWERS: If the costs are not --

4 diminishing returns do not pay; right, and a lot

5 of issues, sand castings, you name it. You know,

6 we start listing a lot. You had some great slides

7 there. We may say to ourselves for these standard

8 smaller products, it may behoove us just to -- you

9 know, we may start to recognize some of the

10 manufacturers say, "Look, it's better and more

11 efficient and less costly to go offshore to

12 manufacture this." They'll ship everything in.

13 MR. WEINTRAUB: so if you're saying

14 you're going offshore to manufacturer but then

15 selling them in the U.S. or not selling them?

16 MR. POWERS: Sure, to meet the standard.

17 Sure.

18 MR. WEINTRAUB: Those costs are still

19 costs to you. We're going to account for those

20 costs.

21 MR. POWERS: Yes, but less cost; right,

22 to go offshore.
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1 MR. WEINTRAUB: Yes. But, again, in our

2 analysis, the costs that we're using are the costs

3 supplied by the manufacturers. And that's

4 assuming that some people have already factored in

5 those going offshore costs because they know that

6 getting to MEI-40 is going to cost money. And

7 they want to try and save money by going offshore.

8 MR. ADIN: Can I try and just resolve --

9 MR. BROOKMAN: Yes. Lucas Adin?

10 MR. ADIN: Lucas Adin, DOE. I don't

11 want to speak for you, Chuck, but I think it seems

12 like the crux of your question is more about the

13 job impacts aspect of this. And that is part of

14 the analysis. It's not part of this analysis. But

15 there is a separate part in which we consider all

16 of that and will look at which manufacturers will

17 be likely to move jobs overseas and that kind of

18 stuff.

19 MR. POWERS: No. He's doing a good job

20 with this; right? It's good mind thought and good

21 process information. But earlier on, he did talk

22 about the impact of all of these things, the
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1 costs. So it is impacting that indirectly; right?

2 MR. BROOKMAN: Alex Bosenberg?

3 MR. BOSENBERG: I want a follow-on

4 question for Chuck. So what's your point of your

5 last statement? In every rulemaking I have been

6 in, there has been a loss of U.S. manufacturing

7 jobs. It's a given.

8 MR. POWERS: But I think those kind of

9 numbers, if you say 50 percent -- if it's 10

10 percent, 20 percent, yes, but 50 percent products

11 dropped, that's pretty significant.

12 MR. BOSENBERG: I've seen much worse.

13 MR. BROOKMAN: Okay.

14 MR. WEINTRAUB: Fifty percent of the

15 failing.

16 MR. POWERS: Which industry are you

17 with?

18 MR. BOSENBERG: Lighting.

19 MR. BROOKMAN: Louis Starr?

20 MR. STARR: So I think we're making a

21 point it is 50 percent of the failed models or 40

22 percent of the failed models. The other part,
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1 too, is that, you know, if you drop 328 models, it

2 doesn't mean -- you could still make those models

3 and sell them outside of the U.S. You just

4 couldn't sell them inside of the U.S. So you

5 could continue to sell them wherever you wanted

6 to, just not into the U.S. market.

7 MR. WEINTRAUB: That's a valid point.

8 MR. BROOKMAN: Al Huber?

9 MR. WEINTRAUB: Outside of our scope.

10 MR. HUBER: This assumption on model,

11 percentage of model, drops is going to have a

12 significant impact on any decisions on what we

13 finally decide on is the appropriate level --

14 MR. BROOKMAN: Efficiency level.

15 MR. HUBER: -- of efficiency.

16 MR. WEINTRAUB: Yes, yes.

17 MR. HUBER: And, therefore, we've got to

18 have a better handle on this because I can tell

19 you the industry believes nowhere near that

20 number, at least the folks sitting here. I don't

21 know who you talked to or who said what. And

22 somebody may have been trying to impress you that
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1 they were just going to drop it all and go. I

2 don't know if anybody was thinking about what they

3 were saying, but I can tell you the industry does

4 not believe that 60 percent of the models would be

5 dropped. You know, we just don't.

6 MR. WEINTRAUB: Well, Al, like I said,

7 we've gone off of our data. And we --

8 MR. HUBER: I understand that.

9 MR. WEINTRAUB: This was worked out

10 fast.

11 MR. HUBER: We just don't believe it.

12 And, therefore --

13 MR. WEINTRAUB: You guys need to caucus,

14 put forward something.

15 MR. HUBER: Well, I don't think our

16 caucus is going to do it. I think we're going to

17 have to come up with some data.

18 MR. ADIN: Al?

19 MR. HUBER: It's such a huge impact on

20 the overall analysis. To make these assumptions

21 that high that you're not getting -- that 60

22 percent of the product would not be redesigned is
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1 kind of mindboggling to this group.

2 MR. BROOKMAN: Tom, follow-on?

3 MS. WILLIAMS: Wait.

4 MR. ECKMAN: Yes. Wait. I just want to

5 make sure, Al, that we're talking about start to

6 top line, total number of models failing at a PER7 10 --

8 MR. HUBER: Yes. I understand.

9 MR. ECKMAN: There's 205 models, so 60

10 percent of those, not --

11 MR. HUBER: Yes. I know exactly what

12 he's saying. I'm still telling you it has a huge

13 impact on the end analysis --

14 MR. ECKMAN: I agree with that.

15 MR. HUBER: -- for something that I

16 think there is not much data for.

17 MR. BROOKMAN: Charlie Cappellino?

18 MR. CAPPELLINO: Charlie Cappellino,

19 ITT. I just want to make a point to support Al's

20 position here. If you are in a business and

21 you've got two products and those products are

22 overlapping and one of those products is lower
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1 efficiency, it doesn't make any sense to me that

2 anybody would maintain those to begin with in the

3 marketplace today. So it's kind of

4 counterintuitive that that actually would be the

5 state of industry today because everybody is

6 always trying to reduce inventory, reduce the

7 number of model lines, and everything else. So,

8 you know, unless there was a really good reason

9 for somebody to have both of those lines, it just

10 seems odd that you would be able to eliminate that

11 high of a percentage of something that is already

12 in the marketplace that is being pressured by

13 market forces that tend to kind of create a

14 certain level of efficiency and product offerings

15 today anyway. So it just seems kind of odd.

16 MR. POWERS: And Dan, this is Chuck.

17 It's interesting. And, again, good data. This is

18 where we have to take this and understand it and

19 help you, give you feedback like you're asking;

20 right? But if you take the 492, if I'm reading

21 this right, number of models of redesign, just

22 that number there in the middle at the 40 PER;
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1 right, that's on just a quick calculation, it

2 would be average 200,000 a model.

3 MR. WEINTRAUB: Yes.

4 MR. POWERS: That's $100 million.

5 MR. WEINTRAUB: Yes. Yes. And we're

6 going to get there. We're going to sum it all up.

7 MR. POWERS: Well --

8 MR. BROOKMAN: It's now 12:27. What do

9 you think --

10 MR. WEINTRAUB: So, Doug, this

11 discussion of models, that's a breaking point.

12 MR. BROOKMAN: Okay.

13 MR. WEINTRAUB: We don't need to go

14 beyond this right now.

15 MR. BROOKMAN: Okay. Let's take final

16 questions on this slide. We've already noted that

17 many in the manufacturers' caucus really question

18 the number of models that would fall off based on

19 this analysis. Dan has said he built this off the

20 data he has. The manufacturer said earlier today

21 the new data coming from NEMA BIS apparently now

22 has been sent? Greg, I'm looking at you.
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1 MR. WEINTRAUB: That's not going to give

2 us any more insight.

3 MR. CASE: We'll find out shortly.

4 MR. BROOKMAN: It's not going to be --

5 but I think the analysis we haven't had is what

6 we're going to use today, of course; right?

7 MS. WILLIAMS: It's not relevant.

8 MR. HANDZEL: Just to qualify it,

9 though, I mean, it's not going to have --

10 MR. BROOKMAN: Mark Handzel?

11 MR. HANDZEL: -- information --

12 MR. WEINTRAUB: No.

13 MR. HANDZEL: -- like this --

14 MR. WEINTRAUB: No.

15 MR. HANDZEL: -- because this came from

16 the manufacturers' survey that Navigant did last

17 summer. So, I mean, the stuff we're sending is

18 nothing along these lines.

19 MR. BROOKMAN: Okay.

20 MR. HANDZEL: It's more the performance

21 data update.

22 MR. WEINTRAUB: Yes.
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1 MR. BROOKMAN: Lucas?

2 MR. WEINTRAUB: The stuff we're getting

3 does not apply to this.

4 MR. BROOKMAN: Lucas Adin?

5 MR. ADIN: And I'll reiterate the point

6 I made earlier. We are giving you this now to

7 give you a chance to react to it.

8 MR. WEINTRAUB: Yes.

9 MR. ADIN: So, I mean, we do ask,

10 especially where you think things are clearly

11 wrong, give us whatever you can that helps us

12 justify a different assumption.

13 MR. BROOKMAN: Mark Handzel?

14 MR. HANDZEL: And Mark Handzel from

15 Xylem again. I think, you know, we have all said

16 we need to talk.

17 MR. BROOKMAN: Yes.

18 MR. ADIN: Yes.

19 MR. HANDZEL: You know, we're going

20 through our head who was interviewed, who would

21 have impacts where they might be selling multiple

22 families, serving, you know, multiple end suction
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1 frame-mount pumps, for example. Would they get

2 rid of one and just redesign into one platform,

3 things like that? So we just need to do some

4 talking and compare those notes and see if we can

5 come up with something.

6 MR. BROOKMAN: Maybe when we return from

7 lunch, we can have more detail from you all. But

8 Greg Case?

9 MR. CASE: Greg Case, HI. We're going

10 to get these slides at some point?

11 MR. WEINTRAUB: Yes, a copy of them.

12 MR. CASE: Okay. I mean, that will just

13 kind of push this. We'll be able to send this out

14 to market and see.

15 MR. ADIN: Yes. I would have sent them

16 earlier if I could. We just didn't have

17 everything quite ready to go until just before the

18 meeting, but --

19 MR. CASE: I completely understand.

20 MR. ADIN: -- yes, we'll provide them

21 very, very soon.

22 MR. BROOKMAN: Gary Fernstrom?
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1 MR. FERNSTROM: Dan, this is Gary. I

2 just would like to make the observation that

3 you're presenting one of the most complicated and

4 broad-ranging, if not the most complicated and

5 broad-ranging, presentations I've ever seen.

6 (Laughter.)

7 MR. FERNSTROM: And I think you have

8 done an excellent job. We may not agree with

9 everything you have shown, but you have been

10 totally clear about what you did, why you did it,

11 and how you did it. So I really appreciate how

12 thorough and well-prepared you are.

13 MR. BROOKMAN: Mark Handzel?

14 MR. HANDZEL: Mark Handzel from Xylem.

15 Dan, I was going to make the same observation. You

16 have done a great job summarizing this data that

17 was provided to you guys. I mean, obviously it

18 raises questions for us. So we're not personally

19 challenging anything you did.

20 MR. WEINTRAUB: Yes.

21 MR. HANDZEL: You explained it well. You

22 obviously know it. So I just want to compliment
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1 you on a great presentation. And, you know, it

2 gives us a lot to talk about and follow up on.

3 MR. WEINTRAUB: Okay. Thank you.

4 MR. BROOKMAN: Do you all think that

5 when we return from lunch or tomorrow morning or

6 sometime you can comment more thoroughly on this

7 in the span of this two-day meeting?

8 MR. HANDZEL: This is Mark. I don't

9 think so. We can try, but I don't think we'll be

10 able to give you -- you know, we don't want to

11 just make comments without having data behind it.

12 MR. BROOKMAN: Yes.

13 MR. HANDZEL: So I think we have got to

14 pull some data together.

15 MR. WEINTRAUB: Yes. Doug, I think this

16 may also be Navigant-LBNL reaching out

17 individually --

18 MR. BROOKMAN: Okay.

19 MR. WEINTRAUB: -- under confidentiality

20 agreements --

21 MR. HANDZEL: Yes. Because I think you

22 know --
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1 MR. WEINTRAUB: -- to kind of freshen up

2 our data and --

3 MR. HANDZEL: Right.

4 MR. WEINTRAUB: -- see what people are

5 thinking right now.

6 MR. HANDZEL: Right. Because I think

7 you have the data on the models dropped, which

8 obviously we all -- we know what we reported. We

9 can all go look at our surveys.

10 MR. WEINTRAUB: Yes.

11 MR. HANDZEL: But I think you are going

12 to have to go to those guys and question them

13 harder exactly on that information.

14 MR. BROOKMAN: Louis Starr?

15 MR. STARR: I just kind of wondered. In

16 the EU, since they are moving up this MEI-40, what

17 was the -- can you use that as a comparison to

18 sort of give you a prediction of what might happen

19 here?

20 MR. WEINTRAUB: That would be a very

21 good thing to do. We don't have that data, but we

22 could see if it exists.
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1 MR. BROOKMAN: Okay. Al Huber?

2 MR. HUBER: I think one of the things

3 that you -- you know, the problem with the models

4 dropped is it really depends on which level you

5 end up going to. In other words, if you go to a

6 higher level -- and I've got so many that I have

7 got to redesign. And then I've got to make a

8 decision, what can I do to stay in the market?

9 Okay? So, you know, it's a tough question.

10 The person making the final decision has

11 to have a lot of data. And one of them is, how

12 are my pumps performing? And what is the

13 government going to ask me to do? If they're only

14 going to ask me ten, then, you know, I've only got

15 a couple of pumps I've got to do. It's no big

16 deal. I'll just go ahead and do them. You may

17 think they're not selling many now. And they may

18 not be, but they may not be because it's a poor

19 product. And they may not, but they may have to

20 keep them in their line because a lot of these

21 jobs that we go to and that we sell to are 20 or

22 30-pump jobs. And if you don't have one pump,
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1 then you don't get to play. And it's a problem.

2 And that's one we all manufacturers have to face.

3 So yes, we probably end up redesigning it because

4 if our line gets so poor, then we can't go attract

5 distribution because --

6 MS. WILLIAMS: Sorry. We totally agree

7 with you. I would just like to make one point,

8 which is that some manufacturers, even at ten

9 percent, will have a much larger percentage of

10 their models failing. And so their decision

11 points at ten might be different from what you're

12 thinking about your own product. So it's hard. I

13 realize --

14 MR. POWERS: I think it's --

15 MR. HUBER: I'm looking. That's a fair

16 statement.

17 MS. WILLIAMS: Yes.

18 MR. HUBER: But I'm looking at the

19 industry as a whole --

20 MS. WILLIAMS: It's hard to like see it

21 all.

22 MR. POWERS: Yes.
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1 MR. HUBER: -- because I know how the

2 market works.

3 MS. WILLIAMS: Yes.

4 MR. HUBER: And if you don't have a full

5 complement --

6 MR. POWERS: Yes.

7 MR. HUBER: -- you're done for.

8 MR. POWERS: And I think it's good, I

9 mean --

10 MR. BROOKMAN: That was Alison --

11 MR. POWERS: Yes.

12 MR. BROOKMAN: -- and then Al. And now

13 back to Chuck.

14 MR. POWERS: I think it's good, Alison,

15 because I think it's case by case by manufacturer;

16 right? You're right on. What else is compelling

17 here, though, is whether you're at 10 percent, 25,

18 40, 55, the number of models dropped is almost 50

19 percent on all of them. So, even the first one,

20 10 percent, it says, "Total failing is 205," but

21 123, about half; right?

22 MR. WEINTRAUB: Yes. This is --
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1 MR. POWERS: 512 to 256. You keep going

2 down. It's almost 50 percent. That's just --

3 MR. WEINTRAUB: So, Chuck, those were

4 the numbers that we discussed, the 60 to 50 to 40,

5 40, 40. And those are the numbers at discussion

6 right now.

7 MR. BROOKMAN: Mark Handzel?

8 MR. HANDZEL: So this is Mark. So,

9 Alison, the only thing I would challenge you with

10 on that is that, you know, you guys -- I mean, the

11 people here at the table, we're the industry

12 leaders. You know, I mean, that's why we're here.

13 There are a lot of small companies. I don't think

14 you guys interviewed them. And so their data

15 wouldn't be reflected here in terms of the models

16 dropped. And I think that's what you were saying

17 is a lot of those companies could be the guys

18 dropping. So --

19 MS. WILLIAMS: We, I mean --

20 MR. HANDZEL: And we don't know who you

21 interviewed, but --

22 MS. WILLIAMS: We interviewed a range of
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1 manufacturers; right, but --

2 MR. HANDZEL: Okay.

3 MS. WILLIAMS: -- not everybody is in

4 the same place. Are you suggesting that smaller

5 manufacturers would be likely to drop fewer or

6 more models?

7 MR. HANDZEL: I would think they're

8 going to have to drop more --

9 MS. WILLIAMS: Yes. Okay.

10 MR. HANDZEL: -- because they typically

11 have not invested in their product lines. You

12 know, so they are going to be way off where the

13 rest of the industry is.

14 MS. WILLIAMS: So you are thinking that

15 the models --

16 MR. HANDZEL: Yes. That's right.

17 MS. WILLIAMS: -- are too high for you

18 guys but low for people who are maybe not at this

19 table?

20 MR. HANDZEL: Correct.

21 MS. WILLIAMS: So perhaps it would --

22 MR. HANDZEL: And, again, not knowing
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1 who you interviewed, I mean, I am just surmising.

2 Okay?

3 MR. POWERS: So, Doug, this is Chuck

4 again, just to summarize this. So let me get my

5 head around this. So a year ago, you did the

6 first survey; right? And it was somewhat limited.

7 We talked about that already. I mean, it was a

8 little more ambiguous with some of the questions,

9 but you fine-tuned that. You did a good job. You

10 had another survey; right? And that was later on.

11 We have a set of formulas that Sarah and your team

12 and others and Callie in the back and others have

13 spent a lot of good time on and good stuff. You've

14 gotten some feedback on that. And that's still in

15 flux trying to look at the formulas, how you're

16 going to evaluate it to spread across even, you

17 know, et cetera.

18 We have data that Greg is threatening

19 people to get to you today which might give you

20 more and better information; right? So I think

21 the compilation and all of that, you know, we've

22 got to try to make sure we have a little more
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1 solidity before we start jumping to conclusions

2 because if the MEI formulas and all of that good

3 stuff are still in flux and this is still in flux

4 and there's data that Greg's, you know, spent a

5 lifetime on trying to get people to send to you,

6 you know, -- you know what I mean?

7 MR. WEINTRAUB: Yes.

8 MR. POWERS: This is a good first pass.

9 MR. WEINTRAUB: Yes.

10 MR. POWERS: And I think everybody

11 already said it, Dan. It's great. It's just that

12 we need to make sure that we don't, you know, send

13 the wrong --

14 MR. BROOKMAN: Lucas? Lucas Adin?

15 MR. ADIN: So, as I've alluded to

16 previously, there's still a lot more to come today

17 and a lot of it which isn't necessarily this

18 overall aggregate view that requires us to think

19 about how any given manufacturer might be

20 different. It's like on a per-model basis. So

21 how a particular manufacturer be impacted on its

22 costs to get to a given efficiency level? I mean,
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1 we're going to go down that whole pathway.

2 MR. POWERS: Yes.

3 MR. ADIN: So there's still a lot more

4 to come that will help put this in other -- help

5 you view it through other perspectives that might

6 be useful.

7 MR. BROOKMAN: Chuck, were you asking

8 about --

9 MR. POWERS: We received the other

10 handouts --

11 MR. BROOKMAN: Yes.

12 MR. POWERS: -- this morning, which is

13 excellent.

14 MR. BROOKMAN: Yes.

15 MR. POWERS: And it was actually beyond

16 page 16, which was only up to an email. And

17 today's handout went past, which is great, but,

18 again, talking about and reading it at the same

19 time, you need more time to digest.

20 MR. BROOKMAN: Yes.

21 MR. POWERS: Will we be able to get a

22 copy of this today, hard copies, so we could study
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1 it better tonight or do you want to email it to us

2 or --

3 MR. ADIN: At the very least, we'll

4 email it to you.

5 MR. POWERS: Okay.

6 MR. ADIN: And we'll see if we can

7 provide hard copies.

8 MR. BROOKMAN: That would be great if we

9 could.

10 Alison?

11 MS. WILLIAMS: I just wanted to sort of

12 complete this discussion and say that, I mean, I

13 think Dan and I will look at the manufacturer data

14 that we have under NDA, review it again. If any

15 of you review your own data that you provided to

16 us and think, "Oh, maybe since I learned more

17 about this, like maybe we underestimated the first

18 point," like, you know, let us know and we

19 certainly -- point taken that we'll review this

20 number. I don't think we're going to resolve

21 anything more on it today, though.

22 MR. BROOKMAN: Gary?
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1 MS. WILLIAMS: Thank you.

2 MR. FERNSTROM: This is Gary. I'd like

3 to make another observation. I've been doing this

4 kind of standards work for 20 years now. I'm sure

5 there are others around the table that have more

6 experience than I do. But a common theme

7 throughout all that time has been we don't have

8 enough current data. So, you know, no sooner do

9 you get something than there is probably some

10 better, more current data that could be utilized.

11 And I'm anxious about where we are now relative to

12 our schedule. So at some point, we're going to

13 have to recognize within the group that we'll have

14 to lock down the data and do the best we can with

15 what we have. We can't continually be looking for

16 newer and better data.

17 MR. BROOKMAN: Okay. And scheduling,

18 and looking ahead, thinking about scheduling, is

19 perhaps another issue that we might take up during

20 this two-day span.

21 I'm going to suggest we break for lunch.

22 It's now 12:40.
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1 Dan, I was told you have in the range of

2 60 slides.

3 MR. WEINTRAUB: Yes.

4 MR. BROOKMAN: So we're now at slide 33.

5 MR. WEINTRAUB: Yes.

6 MR. BROOKMAN: Slide 33. So there is a

7 lot of presentation --

8 MR. WEINTRAUB: A lot more.

9 MR. BROOKMAN: -- material in this

10 cluster. And then there's more to follow from

11 there. We have a lot of -- get some carbohydrates

12 over lunch. And we'll resume here at 1:40. And

13 thanks for all the good discussion. Make sure to

14 wear this badge. You might need an ID to get

15 through the security portal. This room will be

16 secure.

17 (Off the record.)

18 (On the record.)

19 MR. BROOKMAN: Prior to lunch, Dan was

20 presenting a lot of rather detailed information. I

21 thought the last slide was useful because it gives

22 you a sense of the sort of detailed analysis that
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1 the Department would be doing based on your

2 comments, based on the data that is available, and

3 how that would begin to translate to provide

4 insight into how that you all would try and set an

5 efficiency level.

6 So we are going to continue with what

7 Dan has started. And there is quite a bit of

8 content here. So, as best we can, let's let him

9 present and only punctuate with questions. We'll

10 try and let him carry the stream of this content.

11 MR. WEINTRAUB: All right. So I'm going

12 to recap where we are so we get our footing again.

13 So we're looking at numbers of failing models from

14 our survey. The point of discussion was how many

15 were dropped, and we're going to move on from that

16 for now. And we're saying we're going to get into

17 the assumptions. Next we're just going to go

18 through the assumptions that were made to get us

19 to these flowcharts, how we broke up the

20 percentages. So we'll move past dropped. And I'm

21 going to go through the inputs and what they were

22 to the model that got us to where we are.
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1 So I broke out the inputs to statistical

2 and general industry research. Our statistical

3 inputs are inputs based on primary data sources,

4 such as the Navigant-LBNL survey and what will

5 soon be the HI-NEMA BIS survey. And these were

6 numbers that we pulled out statistically, you

7 know, looking at the distribution of those pumps.

8 So total number of models, total number

9 of shipments, number of shipments failing,

10 statistical distributions of horsepower, flow,

11 specific speed, and other pump parameters. Those

12 represent the market as we know it right now.

13 General industry research inputs. Those

14 come from inputs based on manufacturer interviews,

15 market data, independent discussions with

16 manufacturers, estimates provided by HI and other

17 industry experts. So we have gathered data and

18 synthesized an input from that data. And those

19 types of inputs that are of that category would be

20 percent of models dropped and not redesigned, as

21 we just discussed; current breakdown of sand cast

22 impellers versus advanced cast impellers-- we went
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1 through that already; number of models that are

2 fabricated stainless steel -- I discussed that

3 briefly before; percent of market that would

4 switch from sand casting to investment in die

5 casting -- we touched on that; and percent of

6 eligible pumps that would be polished, rather than

7 redesigned. We touched on those earlier.

8 I'm going to go through and show you.

9 These are the assumptions that we made for these

10 markets that will lead to our conclusions. So

11 total models. Right here we have 2,050 for end

12 suction close-couple and end suction frame-mount.

13 That is based on we had our survey and our data.

14 And then we had HI's survey, which all we had

15 released to us at this time were total shipments,

16 total revenues. We looked at our total shipments

17 and their total shipments. We scaled up our

18 models by the same scale as our total shipment. So

19 if we had approximately 100,000 shipments, that's

20 approximately 2 times more shipments than what our

21 data represented. Then we scaled up the number of

22 models in our database by two. We're going to get
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1 clarity on this from the survey data that we just

2 got back. And we will be able to match this.

3 This number will change based on the data that

4 we're getting from HI.

5 MR. BROOKMAN: Which number will change?

6 MR. WEINTRAUB: The total models.

7 MR. BROOKMAN: Yes.

8 MR. WEINTRAUB: Total shipments. That

9 is from the HI survey, which we have already. So

10 that represents what they believe the industry

11 total shipments are.

12 Going down the line, models dropped.

13 We've discussed this. Percent cast, casting using

14 investment, or die cast or advanced casting.

15 Sorry. I wasn't consistent on that. That we

16 discussed earlier. So 60 percent and 50 percent

17 of the industry using sand casting.

18 Percent that would switch. We discussed

19 this also a little bit. And we're saying ten

20 percent of the remaining pumps would be eligible

21 to switch over to a new casting method.

22 Models fabricated stainless steel. This
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1 was based on market estimates, 7.4 percent in the

2 end suction category; we put it at zero for inline

3 because we haven't come across many there.

4 Percent of pumps eligible to be

5 polished. That's not right. That should be 6.0.

6 I apologize. We'll correct that before we send

7 these out. 6.0 in end suction close-couple and

8 6.5 in inline. So we discussed this earlier. They

9 need to be sand cast to begin with. They had to

10 be of a low specific speed. And they had to be

11 able to even meet an efficiency level by just

12 being polished. They had to be really close to

13 the line to begin with. So it's a small

14 percentage.

15 This is the assumption we brought up a

16 little bit earlier. So of that six and a half or

17 six percent, how many of those would actually be

18 polished? So we said 50 percent. And that was a

19 rough estimation. We can change that, too. But

20 you'll see this ends up being a very small

21 percentage of pumps that show themselves to be

22 polished.
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1 Okay. So the results that we were

2 looking through before, we talked about the top

3 part. So we start with number of models failing.

4 And we said of those models that are failing, we

5 talked about dropped. So we'll go with what we

6 have now. Now, of those that will be redesigned,

7 so the ones that are not dropped, what is going to

8 happen to them based on that flowchart model that

9 we worked out?

10 PER-10. It has two models being

11 polished. That's the small percentage of the

12 market that we are talking about. It's not going

13 to be a common theme, but it's something that

14 could happen. You move up. You get 8, 15, 20.

15 It's still a very small amount. The bulk of the

16 actions that would be taken would be hydraulic

17 redesign only and some additional ones would be

18 hydraulically redesigned with changes to advanced

19 casting. So the general conclusion here is that

20 hydraulic redesign of some sort is what is going

21 to happen to the pumps to meet a standard level at

22 all efficiency levels. But there are some pumps
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1 that we believe will be polished based on the

2 data.

3 Are there questions here?

4 MR. POWERS: Chuck. Yes, Dan.

5 MR. BROOKMAN: Hey, Chuck, we had the AV

6 guy in here at lunch. And he's advising all of us

7 we need to get these things close to our face.

8 Okay?

9 MR. POWERS: Okay. Can you hear me now?

10 MR. BROOKMAN: Yes.

11 MR. POWERS: All right. Is that how it

12 goes? Can you hear me now? Verizon.

13 Question, Dan. We're just kicking

14 around. The PER you're representing there, ten,

15 is not the same as the MEI-10, MEI. So I'm just

16 trying to scale.

17 MR. WEINTRAUB: Yes. So --

18 MR. POWERS: If we go on an MEI-type

19 relationship to compare the EUs we're talking, we

20 probably want to have some because you know what I

21 mean? We're looking --

22 MR. WEINTRAUB: Yes. So, actually, put
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1 this in perspective. This analysis is independent

2 of the metric that is used. And that is because

3 each efficiency level represents a percentage of

4 the market failing. So whatever metric you use,

5 we're still going to target. You get that metric

6 to cause 10 percent of the market to fail, 25

7 percent, 40 percent. It's the same way that the

8 EU did it. They chose their levels where we're

9 going to look at what happens when five percent

10 fails, look at what happens when ten percent fail.

11 So it actually is independent. And so this is

12 independent of what happens later on.

13 And some of the other assumptions that

14 are made that the data backs up are that the

15 distribution of those failing pumps, you know,

16 those ten percent pumps that fail, they represent

17 the distribution of the industry as a whole. It's

18 spread out among, you know, spread out amongst

19 flow and spread out amongst head. They're fairly

20 representative. So you change the metric. It

21 doesn't change the analysis, this analysis.

22 MR. POWERS: Okay.
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1 MR. WEINTRAUB: Okay. Continue on. Same

2 story for inline pumps. We'll just go through it

3 quick. But there are less models of inline pumps

4 overall. We looked at those earlier. And you see

5 it's the same, similar percentages. You know, very

6 few models are actually polished. The bulk of them

7 are hydraulically redesigned. Okay.

8 Now we're looking at results that have

9 to do with polishing, so shipments-weighted

10 results. So I'll walk you through these charts.

11 On the top, we have end suction pumps. On the

12 bottom we have inline pumps. And so the first row

13 here, at each efficiency level, I have the number

14 of shipments failing and what that represents of

15 total shipments. So here we're saying, at PER-10,

16 7 percent for end suction pumps. Ten percent of

17 the models, of the bottom models, represent seven

18 percent of the shipments according to our data. So

19 there are pumps that are not selling as well

20 there. It's actually the converse is true down on

21 inline. And it's a function of the data. That's

22 just what's happening in the marketplace.
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1 So this gives you the idea of what

2 percentage of shipments each PER level cuts off.

3 When we look at the percent of failing shipments

4 polished, so if we said earlier three percent of

5 models would be polished, we made the assumption

6 that that meant three percent of the failing

7 shipments would be polished. You end up with at

8 the lower levels fairly low levels of units being

9 polished, so 465 across the whole industry. That's

10 unit shipments out the door.

11 Yes, Al?

12 MR. HUBER: How much gain did you use?

13 MR. WEINTRAUB: For polishing?

14 MR. HUBER: Yes.

15 MR. WEINTRAUB: We used --

16 MR. HUBER: Did you use the chart?

17 MR. WEINTRAUB: -- the HI 20.3 chart,

18 yes.

19 MR. HUBER: So it's about a percent?

20 MR. WEINTRAUB: About a percent on

21 average, yes.

22 MR. HUBER: Yes.
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1 MR. WEINTRAUB: And that's why there's

2 so few of them, because a percent doesn't get you

3 anywhere for most pumps. It's only the pumps that

4 are on the line. So you have so very few; for

5 inline, similar, 3.2 percent versus 3 percent. So

6 we'll move forward.

7 Okay. So now we're into the next

8 section. Here we're going to talk about average

9 incremental MPC per unit sold. So this is

10 effectively what is the change in cost due to

11 polishing across the industry. And we saw very

12 few units are polished. So, as you can imagine,

13 the costs are not going to be large.

14 So for each equipment class and

15 efficiency level, the industry shipments-weighted

16 average cost to polish, to polish an impeller, is

17 multiplied by the number of shipments that will

18 feature a polished impeller. This creates the

19 aggregate incremental cost.

20 So we talked about the cost to do it

21 earlier. That was about $45 on average. We

22 talked about the number of models that would need
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1 it. So when you multiply those, what we get -- so

2 we talked about with $45 per unit, we had 400

3 units or 600 units that would need polishing.

4 The aggregate that was up -- so you do

5 your -- you do the cost per unit times total

6 units, multiply it. If we want to spread it

7 across the industry to find out what it is on

8 average per unit, you take that. You divide it by

9 the number of failing shipments that we looked at

10 at the previous slide. And it comes out to be on

11 average less than two dollars per pump if you're

12 spreading it across. And, again, the pump that's

13 polished isn't less than $2, but if you're looking

14 on the industry-weighted average, it ends up being

15 an average increase of less than a half of a

16 percent, so .2, .3.

17 So I know this isn't completely

18 straightforward. So if you have questions, we can

19 talk about it. All right.

20 So the conclusion is a small cost across

21 the industry from polishing because very few units

22 would be polished. Now we get into the larger
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1 costs, aggregate conversion costs to industry. So

2 this is what we were building up to before. This

3 is what would be impacted by the number of pumps

4 dropped: all these numbers that we were talking

5 about earlier.

6 So to flowchart it out again, for each

7 equipment class and efficiency level, the adjusted

8 industry average redesign costs are multiplied by

9 the number of models requiring each redesign. This

10 creates an aggregate conversion cost. So we have

11 costs per model to hydraulically redesign. We

12 talked about this. We're going to talk about cost

13 sharing between models. And I'm sure this will

14 not be a short discussion.

15 You end up getting an adjusted cost per

16 model to hydraulically redesign. You multiply

17 that times the number of models that are going to

18 be hydraulically redesigned. And you get an

19 aggregate cost for the industry. It's a bottoms20 up approach to see how much it is going to cost

21 the industry as a whole to meet an efficiency

22 level. Okay.
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1 So now we're going to talk about this

2 specific feature here: accounting for cost

3 sharing between shared model platforms. Okay. So,

4 to preface it, because end suction close- couple

5 and frame-mounted pumps and two-pole and four-pole

6 models share significant hydraulics and hardware,

7 we don't expect every model in the database that

8 we have to incur the cost of a full hydraulic

9 redesign. They will incur costs, but we don't

10 expect them to incur the full cost that was given

11 to us by HI.

12 So, to account for these shared costs,

13 we quantified the statistics on shared platforms.

14 So we have our database again. And we looked at

15 the number of hydraulically identical end suction

16 close-couple and end suction frame-mounted models.

17 We had this data. We looked at flow, head power,

18 at BEP. And you can find how many pumps have the

19 exact same numbers.

20 We also looked at the number of two- and

21 four-pole pumps sharing the same model name, which

22 would indicate that they are the same or a similar
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1 model run at a low speed and a high speed. They

2 may have different structures associated with

3 them, different features, but in the end, they

4 have very similar hydraulics.

5 We then looked at allocation of shared

6 redesign costs. And that's what we are going to

7 get into the details on also. And I worked

8 through that with HI, through Greg Case, trying to

9 come up with estimates that make sense for the

10 industry. Okay.

11 So here we want to go through the

12 statistics that we found in the database. And I

13 used some terminology because I couldn't think of

14 anything better. We're going to have to get

15 accustomed to it. So left side here, end suction

16 and frame-mounted combined; and the right side,

17 inline. A unique model is defined as the model,

18 so is a model of a given hydraulic performance.

19 The duplicate is let's say you have -- in my

20 database, we have end suction pump with the unique

21 hydraulics. You have 46 percent of the total

22 models match up to some other model and have
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1 shared hydraulics. So if we're talking about

2 costs, this would be the unique one. And then 54

3 percent of the pumps are unique. Forty-six

4 percent of them match up to one of those, to those

5 54 percent. So that's kind of hard to visualize.

6 So do people get this? I can kind of try and walk

7 through it. Okay.

8 The same thing for two-pole and four9 pole, it ends up being there are more independent

10 pumps for two-pole and four-pole. So there's less

11 overlap. Seventy-seven percent are unique, and 23

12 percent overlap or are duplicates.

13 So these are the statistics out of our

14 database. Now we talk about allocation for shared

15 redesign costs. So this is where we went through

16 and we discussed with HI about where we thought

17 these costs would be shared and where we thought

18 they might be independent.

19 So, to be clear, the unique model is

20 always going to have 100 percent of the cost.

21 That's the full redesign. It's this duplicate

22 model that would have a percentage of the original
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1 cost.

2 So redesign prototype and initial test.

3 We said 50 percent of the costs would be incurred

4 by that duplicate model for -- over here. I'm

5 sorry. On the left, we have type. So close6 coupled versus frame-mounted. On the right, we

7 have two-pole versus four-pole. Both of them, we

8 said 50 percent for redesigned prototype and

9 initial test, mostly because hydraulics would be

10 very similar much of the time and it would be

11 other features in the prototypes that would need

12 to be different.

13 Pattern and tooling. For the most part,

14 we said for a close-couple and frame-mounted,

15 they're going to share an impeller. For the most

16 part, they are going to share a volute, the main

17 volute structure. Other structures added on there

18 are going to add additional cost: your base

19 plates, your mounts, all of that. That's what

20 we're accounting for in this extra 34 percent.

21 Two-pole, four-pole, we said there's a

22 significant portion of the market where those
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1 models, although they have the same number

2 designation, they may actually have different

3 hydraulics. And that's why we're accounting for

4 higher costs on that end.

5 Testing, we said 75 percent of that cost

6 because they're going to need to go on the test

7 stand themselves. In the end, we're assuming that

8 the close-couple pump is going to need to be put

9 on the test stand and run and the frame-mounted

10 pump is going to need to be put on the test stand

11 and run independently, regardless of similar

12 hydraulics, to prove --

13 MR. CAPPELLINO: Charlie Cappellino. Why

14 wouldn't that be 100 percent, then?

15 MR. WEINTRAUB: Because we were assuming

16 that some of the initial testing, done earlier on

17 in the game, would be shared. It would be once

18 the design is coming to a finalization and a final

19 point.

20 Yes, Al?

21 MR. BROOKMAN: Al, turn your microphone

22 on, please.
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1 MR. HUBER: You already have the initial

2 testing, which is the one you say they would

3 share, in the first line. And then the next line

4 down is pattern/tooling. And then you have

5 testing again, which is the testing that we're

6 going to, the other testing we're going to, have

7 to do. And that would be 100 percent, not 75.

8 MR. WEINTRAUB: Yes. That's actually a

9 very good point. I think when Greg and I were

10 discussing, we did not take into account that

11 initial test was up there. So I think I would

12 make the recommendation that I would go forward

13 and bring that up to 100 because our discussions

14 were based along those lines.

15 MR. HUBER: And I have another question.

16 If you have got pattern and tooling at 34 percent

17 under common end suction close-couple and end

18 suction frame mount and then you've got 2-pole/4-

19 pole, how are you going to reconcile that? Because

20 you've got to have -- both of them are two21 pole/four-pole.

22 MR. WEINTRAUB: Oh, I know. Yes, yes.
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1 So --

2 MR. HUBER: So you're going to have to

3 go with a larger percentage, aren't you?

4 MR. WEINTRAUB: We're going to get on

5 the next slide how --

6 MR. HUBER: I'm sorry.

7 MR. WEINTRAUB: No. And that's a bit

8 complicated how to reconcile that, but we're going

9 to try and see what we can do there. I have a

10 method. And we can talk about which way we want

11 to go with it. So I'm going to take a note to up

12 testing to 100 percent. Okay.

13 Marketing. We came to the conclusion of

14 independent costs. So then we have our total.

15 This is not an average of these numbers. If you

16 remember, in the survey sheet, in the cost of

17 redesign survey that I showed earlier, each one of

18 these categories had a different dollar value, did

19 a weighted average on that dollar value. And it

20 comes up to here. I just didn't want to include

21 them because we're already cluttered enough.

22 So it ends up being for close-couple
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1 versus frame-mounted, the duplicate pump is at 59

2 percent. That will jump a little bit with

3 testing. And we up that. And then 68 percent of

4 the costs, and that will jump a little bit with

5 testing increased. Okay.

6 So bear with me here. We've got a lot

7 of boxes. So this is where we are trying to deal

8 with that overlap between pumps are end suction

9 close-couple two-pole and four-pole. So there's a

10 lot of overlap. So on top, I have population

11 statistics, and on the bottom, I have cost

12 sharing, trying to drill down here. We'll start

13 with number of failing models at each efficiency

14 level.

15 You can split that off by close-couple

16 versus frame-mounted. How many are unique in

17 that? How many are the unique models that have a

18 full cost, and how many are those duplicate

19 models? That's the 54 percent, 46 percent.

20 Then we're assuming that when you drill

21 down again, of these unique models that you're

22 paying your full cost for, how many of those have
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1 unique two/four-pole designs? And how many of

2 them are a duplicate to a two-pole/four-pole

3 design? You're applying percentages down. And

4 here you multiply 54 percent by 77 percent. You

5 get that 42 percent of the population falls into

6 this level of having the cost of a unique close7 couple/frame-mounted design and a unique speed

8 design. Some of those pumps are duplicate models

9 within the speed realm. So that's 12 percent of

10 the population.

11 Same thing over here. You drill down

12 46and seventy-seven gets you to 35 percent of the

13 population has started with a duplicate cost of

14 end suction close-couple versus frame-mounted and

15 had a unique cost associated with it on 2-pole/4-

16 pole.

17 Same thing over here. Now you have a

18 duplicate and a duplicate, and it's 23 percent of

19 the population represents those pumps that are

20 technically already represented somewhere else.

21 So you take these. So you have a

22 population of the pumps that fall into each
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1 category. We have the costs for each one of these

2 categories, cost sharing. So your first bucket is

3 unique model costs, unique models, 100 percent. So

4 they get 100 percent of the cost. Your next

5 bucket is models that have duplicate speed only.

6 That's 68 percent of the cost. The next one is

7 duplicate type only. It's 59 percent of the cost.

8 And then you get to the pumps that are double

9 duplicates. And here I simply multiplied 68

10 percent by 59 percent to get 40 percent and

11 applied those to a small percentage that are

12 representing duplicates on both speed and type.

13 You take the sum of the product, so multiply this,

14 multiply this, multiply this. You add them up.

15 You get a weighted average. And right now it's 75

16 percent. That will go up a little bit with the

17 adjustments. But what that 75 percent means is

18 that you can say that of all the models that are

19 going to be redesigned, you apply 75 percent of

20 the cost that we had discussed earlier or you

21 could take 75 percent of the models times a full

22 cost. It will get you the same thing. But it's
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1 to account for the sharing in costs between

2 similar architectures.

3 I know that was a lot. Questions? Okay.

4 All right.

5 MR. POTTS: I have a question.

6 MR. WEINTRAUB: Yes?

7 MR. POTTS: Doug Potts, American Water.

8 Just for the math, could you explain the weighting

9 of the bottom, how you got from the --

10 MR. WEINTRAUB: These?

11 MR. POTTS: -- the second to bottom row

12 to the 75 percent?

13 MR. WEINTRAUB: Sure. Sum of the

14 product of each category. So 42 percent of the

15 population incurs, we'll say, $100; 12 percent of

16 the population incurs $68; 35 percent of the

17 population incurs $59; 11 percent of the

18 population incurs 40. So you just add those

19 numbers up. I'm sorry. That was not a good

20 example. Start again.

21 If you multiply this times this, you get

22 a number. We're basically creating a weighted
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1 average. Okay. Oh, you can't see that? Okay.

2 Multiply this times this, you get a number.

3 Multiply this times this, you get a number. You

4 multiply this times this, you get a number. You

5 sum it up. And it's a weighted average because

6 this equals 100 percent of the population. And so

7 you are taking a weighted average of cost per

8 model in the industry. And that gets you to the

9 75.

10 MR. POTTS: Thank you.

11 MR. WEINTRAUB: All right. Any other

12 questions?

13 MR. POWERS: Yes, Dan.

14 MR. WEINTRAUB: Yes?

15 MR. POWERS: This is Chuck Powers. So

16 in the consideration, Charlie and I were kicking

17 it around at lunch, trying to get through this in

18 our heads. In the consideration of the

19 efficiency; right, the ones we want to redesign,

20 --

21 MR. WEINTRAUB: Yes.

22 MR. POWERS: -- we may do a redesign
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1 also that you may not be aware of that has nothing

2 to do with efficiency but because of other

3 factors, like NPSH or other things, --

4 MR. WEINTRAUB: Yes.

5 MR. POWERS: -- like Doug -- and I keep

6 using Doug as an example, but if he's a customer,

7 end user, he may have a specific need on a low8 NPSH impeller application; right, --

9 MR. WEINTRAUB: Yes.

10 MR. POWERS: -- that we need to meet

11 this efficiency, but we have to do other design

12 work in opening up the eye of the impeller, doing

13 other things to the volute; right, to make sure

14 that the -- because, again, it isn't just

15 efficiency. There are other factors.

16 MR. WEINTRAUB: Yes.

17 MR. POWERS: So I think there may be

18 another factor here that says there are other

19 pumps that we would have to do some work on, you

20 know, that isn't just related to efficiency that

21 adds to the redesign.

22 MR. WEINTRAUB: So just to put that in
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1 perspective --

2 MR. POWERS: I don't know what that

3 number is.

4 MR. WEINTRAUB: Yes.

5 MR. POWERS: But there's probably a

6 range; right?

7 MR. WEINTRAUB: So put our numbers in

8 perspective, Chuck. The costs that we're using,

9 the HI costs, are meant to represent from the

10 industry what it would take to bring you back to

11 the place that you were. You had a competitive

12 product before the regulation. Now you need to

13 redesign it to the same level of competitiveness

14 that you're at after the regulation. So to meet

15 all of those other factors, that is that cost.

16 It's not just to get the efficiency. It's that if

17 you had to bring up your efficiency, but now

18 because you had to bring up your efficiency, you

19 have to adjust your inlet, that is the whole

20 redesign. So our cost that HI had given to us is

21 meant to represent all in, everything you need to

22 do to get there.
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1 MR. POWERS: Really?

2 MR. WEINTRAUB: That's --

3 MR. POWERS: You think it's that simple?

4 MR. WEINTRAUB: Well, that's what we

5 were given by the industry.

6 MR. POWERS: Really?

7 MR. BROOKMAN: Just say your name for

8 the record.

9 MR. CARLSON: Yes. Brian Carlson, Eaton

10 Corporation.

11 MR. WEINTRAUB: Yes?

12 MR. CARLSON: So just a level up, the

13 distribution you're using for this model is based

14 on the original makeup of the pump product lines

15 prior to saying you are going to consolidate,

16 bring them down to do redesign?

17 MR. WEINTRAUB: The distribution where

18 this comes from is the industry as it stands in

19 2012, all the models, or we have approximately 50

20 percent of the models that are out there. So it

21 just represents the industry as it stands.

22 MR. CARLSON: I guess where my question
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1 goes, if you were going to -- this would be

2 basically a product line rationalization effort by

3 the industry; right? So just as you do your

4 split, it seems to me like you're basing it on the

5 prior distribution of models versus if you were to

6 redesign, you might not use that distribution in

7 terms of cost sharing. I don't know, but --

8 MR. WEINTRAUB: Yes.

9 MR. CARLSON: -- in exercises like this

10 that we have done, typically we would look at it

11 different if we had to do a redesign. So we might

12 choose different portions to share.

13 MR. WEINTRAUB: Okay. I see what you're

14 saying. Yes, that --

15 MR. CARLSON: Right. Because you're

16 kind of looking at --

17 MR. WEINTRAUB: -- the shared product

18 lines might be different.

19 MR. CARLSON: -- it the way it was;

20 right? I've got a redesign. Now how do I go at

21 that; right?

22 MR. WEINTRAUB: Yes. And, to put it in
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1 perspective, I get exactly what you're saying. So

2 we're saying that those overlapping pumps end up

3 costing 75 percent on average --

4 MR. CARLSON: Yes.

5 MR. WEINTRAUB: -- or sorry -- every

6 model. There's small room to grow there. There

7 still would be cost sharing. I understand that

8 the distributions might change in the new market.

9 MR. CARLSON: Right.

10 MR. WEINTRAUB: But we can't predict how

11 that is going to change, but we can see that it's

12 not -- we're already saying they're taking up a

13 lot of costs. We're not discounting it too much.

14 So we could look at different scenarios, but

15 there's not that much more room up to go aside

16 from saying that every pump would incur the full

17 cost.

18 MR. CARLSON: Yes.

19 MR. BROOKMAN: Chuck?

20 MR. POWERS: Yes. So I have a question,

21 Dan, and really for Lucas. This is supposed to be

22 a negotiating or/and discussion back and forth.
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1 When I ask questions of Dan, you know, he's saying

2 it's from the industry and it's pretty much this

3 is the way it's going to be. So just bear with

4 me. That's the way I am hearing it. Right? And

5 I get that. No problem. And today is the first

6 time we have seen this. So it doesn't sound like

7 you want feedback. It's like this is what we're

8 getting. This is the way we're leaving it. And

9 I'm just wondering, is there going to be a chance

10 for communication and potential improvement and

11 change or other views or is survey number one a

12 year ago going to be it and we're going to live

13 with it?

14 MR. ADIN: No. This is Lucas. I think

15 that the -- I mean, the reason we are presenting

16 all of this is exactly because we want feedback.

17 We want all assumptions that we're using and all

18 methodology that lies behind the numbers that

19 we're going to present for the lifecycle costs and

20 all the engineering costs and all of that to be

21 known to you as soon as possible in the process

22 exactly so that you can provide us with feedback
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1 on whether you think things seem reasonable or

2 not. I mean, we do want to know if these things

3 are wrong. And if you think they're wrong, just

4 tell us and tell us why. I mean, it isn't

5 intended to be a one-way communication.

6 So, I mean -- and we have heard some

7 feedback already, which is just great. And we

8 made some notes to ourselves that things need to

9 be adjusted.

10 And so procedurally, I mean,

11 understanding that you're just seeing this for the

12 first time and maybe you might not be able to

13 provide a specific response on any one thing or

14 another, I mean, we're not going to march forward

15 with this whole thing. I mean, we won't be able

16 to come to an agreement if there are fundamental

17 disagreements about the methodology underlying the

18 analysis, I would expect. So if you have issues

19 with how it is done, you need to tell us. And we

20 hope you would. I mean, you can do it either at

21 these meetings or in the periods in between. It

22 doesn't matter as long as we are getting feedback
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1 on how this is being done.

2 Does that answer your question at all or

3 -- okay.

4 MR. BROOKMAN: This seems one-sided to

5 you?

6 MR. POWERS: No. What I'm trying to get

7 to is what Dan has put together is very good, no

8 argument; right, a lot of good data, a lot of

9 stuff. I think it needs to be validated.

10 The only thing I can do is stick it in

11 my throat. Can you hear me now? Okay. No.

12 Good data. My point is when I hear

13 others and I ask the questions myself, the answer

14 that I'm hearing from Dan -- and I understand it -

15 - is this was what the industry told us, this is

16 it. I don't get the feeling that if there is an

17 idea from somebody or if there are some views and

18 other perspectives, like he mentioned 60 percent

19 failure; right? -- I forget. It's on the other

20 sheets and all. You know, we're struggling with

21 some of this data; right? And, you know, I just

22 want to make sure, you know, that we are looking
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1 at this as, you know, trying to get the right

2 feedback.

3 And I appreciate it's shown one day, we

4 don't have it in advance. And I get all of that.

5 We'll look at this. But I'm just concerned that

6 we stick to one path and then, all of a sudden,

7 you know, we start running into issues. Right?

8 MR. ADIN: Right. I understand your

9 point. And in making statements like "This came

10 from industry," all we're trying to do is point

11 out the origin of the data that we're using. And

12 we had to start somewhere.

13 MR. POWERS: Sure, sure.

14 MR. ADIN: And we were provided with

15 data. And maybe it's outdated. You know, maybe

16 there was something about the original data that

17 was provided to us. Maybe it was the way that we

18 interpreted it. I don't know. I mean, we are

19 looking for feedback on that. We're not saying

20 this is definitive, we know for certain that this

21 is the way it is because this is what you told us.

22 I mean, certainly there is room for adjustment
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1 here based on what you think reality is. And we

2 want to know what you think it is.

3 So it helps us a lot more if we have

4 something to base that off of. I mean, we can't

5 make changes necessarily based purely on, you

6 know, a rough idea of what you think it might be,

7 but we do want to make it better if we can.

8 So does that help a little more?

9 MR. BROOKMAN: Alison?

10 MS. WILLIAMS: Yes. So Lucas said some

11 of what I was going to say, but, I mean, I think

12 to some extent to make changes, we would like more

13 -- and we appreciate your initial feedback. And I

14 think we need to follow up more specific feedback

15 in order to make changes. And it is a little

16 difficult because this is industry average and not

17 specific to a manufacturer. Getting feedback from

18 one manufacturer is a little hard to make changes

19 because we would have to compare it to other

20 things we have. So I think that's what makes it a

21 little difficult to here and now. But I agree. I

22 mean, I think if you guys want to follow up with -
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1 - you know, we're interested. We just can't make

2 the changes right now. So anything you can follow

3 up with specific data we can pursue.

4 MR. BROOKMAN: Mark Handzel?

5 MR. HANDZEL: Mark Handzel from Xylem.

6 You know, I was just going to say that, you know,

7 I hate to call our products complex, but clearly

8 we share parts and components. And, you know,

9 when I look at this, I am going to say, "Yes." You

10 know, I can kind of see this kind of analysis

11 coming together based on the way our product lines

12 are structured and the way we answer some of the

13 questions that were asked. So, you know, I get

14 it. I don't think it's perfect, but it's not

15 going to be perfect because we are all different

16 and we all do things a little bit differently.

17 But, you know, I think in the sense of

18 some of the sharing, I know Greg talked to some of

19 our guys as he was helping Dan put this

20 information together. And it does kind of reflect

21 the way that we are structured.

22 MR. BROOKMAN: Okay. That's helpful.
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1 Thank you.

2 MR. WEINTRAUB: Okay. I'll continue on.

3 Okay. It's a lot simpler for inlines,

4 same theory except for there is only overlapping

5 on speeds:

6 two-pole/four-pole. And there are a lot

7 less products that overlap on speed identically.

8 So only 20 percent of the products are duplicate.

9 So you end up getting a factor of 94 percent. So

10 much of the costs are not shared across the inline

11 product lines according to the data, same theory.

12 Move forward.

13 Okay. So now this is to remind us of

14 where we are before we look at the aggregates. So

15 we had our cost per model to hydraulically

16 redesign. We just came up with our cost-sharing

17 factors. So, then, that will give us the adjusted

18 costs. So for end suction, it's 75 percent of the

19 original. For inline, it's 94 percent. We have

20 number of models hydraulically redesigned. You

21 multiply those out. You get your aggregate

22 conversion costs. We're going to get there. Okay.
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1 So here we go.

2 From left to right, PERs, top chart,

3 total conversion costs. These numbers are in

4 millions. Bottom chart since you're going to look

5 there, too, we have percentage of revenues. And

6 these are pump-only revenues. We backed out motor

7 costs from the survey. So end suction, you're

8 seeing at a PER-10, a $12.6 million conversion

9 cost aggregate. That's your hydraulic redesign

10 and hydraulic redesign with change to investment

11 casting; inline, 5.6. Total for these 2 product

12 classes, 8.2 million. And, see, you move up the

13 line quicker when you get away from PER-10, 56

14 million, 109 million, and so on. This is, again,

15 building up from the bottoms up.

16 Down here, we look at percent of

17 revenues. Inline grows a little faster, but

18 overall end suction and inline are not too far off

19 in what those conversion costs are as percentage

20 of revenues.

21 You look at the -- down here, we're

22 taking -- this isn't just an average. It's total.
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1 So you take the total costs divided by the total

2 revenues for those product classes. You divide it

3 out. So you're looking at for these 2 product

4 classes 10 percent of revenues, 1-year revenues,

5 2012 revenues, 30 percent of revenues at PER-25,

6 58 percent at PER-40, 112 percent at PER-55, 184

7 percent at PER-70, and so on. So this is where

8 this rolls up to right now. And this is exactly

9 where you would see if we change our percentage of

10 dropped models, these numbers go up; you change it

11 one way, they go down. It's a linear

12 relationship. All this work that we just worked

13 through, this is where it kind of falls to.

14 MR. BROOKMAN: Charlie Cappellino?

15 MR. CAPPELLINO: Charlie Cappellino.

16 Dan, could you just explain the bottom table

17 again?

18 MR. WEINTRAUB: Sure.

19 MR. CAPPELLINO: I think I get it, but

20 I'm not exactly sure.

21 MR. WEINTRAUB: Okay. So this is $12.6

22 million worth of conversion costs. I took the
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1 total industry revenues minus motors because this

2 whole analysis is not taking into account motors

3 as a design option. We're not taking it into

4 account as a revenue stream either. And that's a

5 discussion -- yes. It was in the surveys, but we

6 backed it out because we have data on motor costs.

7 So we backed it out. You get a number. You get a

8 total revenues that doesn't include motors. And

9 so this number, 12.6, is 9 percent of that total

10 revenues.

11 I could have shown that number. I

12 apologize. I have it somewhere for end suction.

13 It's 11 percent for inline. It's ten percent

14 total when you add it together. Does that answer

15 that?

16 MR. CAPPELLINO: This is Charlie

17 Cappellino again. My question was, where do the 9

18 percent and the 11 percent come from?

19 MR. WEINTRAUB: Yes. So 9 percent is

20 12.6 divided by the total industry revenues.

21 MR. CAPPELLINO: Okay.

22 MR. WEINTRAUB: And that will get you --
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1 and this is to put it and the whole reason is to

2 put it into perspective because we need to know.

3 We can just talk about costs and say they're big,

4 but we need to know how those compare to how much

5 the industry is taking in annually, how much cash

6 is coming in. All right?

7 MR. POWERS: So, Dan, Chuck Powers. So

8 if I am trying to understand the math, so 58

9 percent for the PER-40 --

10 MR. WEINTRAUB: Yes.

11 MR. POWERS: -- is revenue.

12 MR. WEINTRAUB: Yes.

13 MR. POWERS: And if you think about how

14 some companies look, like Al's and others,

15 Charlie's and others, it's the payback; right?

16 MR. WEINTRAUB: Yes.

17 MR. POWERS: So the payback would be

18 operating income. And sometimes that's not the

19 whole.

20 MR. WEINTRAUB: Yes.

21 MR. POWERS: They want a portion of it.

22 So some of these could be ten or greater years of
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1 payback.

2 MR. WEINTRAUB: Yes. We're going to

3 discuss that. That comes up next on how this

4 impacts. So there are going to be a few parts to

5 that. The key part is that is what the

6 manufacturer impact analysis looks at. It is

7 going to look at what is it going to do, what is

8 this cost going to do, to the industry. How long

9 will it take for that money to come back? What

10 are the impacts? Yes.

11 MR. CAPPELLINO: Charlie again. I think

12 where it says, "aggregate conversion," --

13 MR. WEINTRAUB: Yes.

14 MR. CAPPELLINO: -- if you just put in

15 the word "cost" in there, "aggregate conversion

16 cost," up top --

17 MR. WEINTRAUB: Oh, I see. Yes. I

18 apologize.

19 MR. CAPPELLINO: -- I think it would be

20 clearer --

21 MR. WEINTRAUB: Yes.

22 MR. CAPPELLINO: -- going forward.
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1 That's kind of a piece I missed there.

2 MR. WEINTRAUB: Oh, the bottom part

3 here?

4 MR. CAPPELLINO: Yes, right there.

5 MR. WEINTRAUB: Yes. You're right.

6 Thank you. Yes. Sorry about that. Yes. That

7 was just a missing word. I apologize. Okay. All

8 right. Yes. So we'll get into what you do with

9 these numbers. That will be in a little bit.

10 Okay.

11 So I'm going to summarize this so we're

12 through this section. So the proceeding analysis

13 clearly indicated that the conversion costs, they

14 significantly outweigh any of those costs

15 associated with polishing. As such, those

16 polishing costs, they're not going to impact the

17 analysis as it stands. So we're not going to be

18 passing those off to the LCC. It's added

19 computational complexity for no gain because the

20 conversion costs are going to run the show. So

21 just these conversion costs are moving down the

22 line.
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1 And we have another section first, but

2 then later on, Chris is going to talk about how

3 these may impact pricing. And then much later on,

4 at another meeting, we'll talk about the MIA and

5 what that means to the industry. So before we get

6 there, there's a whole other section we get to go

7 through. And that's where we're going to discuss

8 the baseline MPC, so manufacturer's production

9 costs, so how we derived what the average unit

10 coming out your door costs so that we can work

11 that into the LCC analysis. So we'll work through

12 that. And we'll also look at the markups

13 associated with that.

14 So, moving on, model MPC and baseline

15 markups.

16 MR. BROOKMAN: Hang on a second.

17 MR. WEINTRAUB: Yes.

18 MR. BROOKMAN: Anybody that wishes to

19 stand may do so. I'm serious. Just don't make

20 any noise.

21 MR. WEINTRAUB: All right.

22 MR. BROOKMAN: We need to keep going
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1 here.

2 MR. WEINTRAUB: Yes. Okay. So the

3 introduction. So this section of the efficiency

4 analysis takes a market-based approach. So we're

5 using market data to model the base case. So it's

6 as it stands right now. That's what base case

7 means. The manufacturer's production price,

8 that's the cost to make your product.

9 Manufacturer's selling price, that's what you sell

10 it to your first customer at and the cost

11 efficiency relationship in the marketplace.

12 This market-based approach relies on

13 data, on detailed manufacturer-supplied sales and

14 performance data. That was provided to us. It's

15 very similar to the data that went to the HI

16 survey. And this data represents approximately

17 half of the end suction and inline market by

18 shipments. We've talked about that. And the data

19 was collected under nondisclosure confidentiality

20 agreements. So we're only sharing it in aggregate

21 in the forms presented in this analysis. Okay.

22 So the source data, this is the type of
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1 stuff we're going to be looking at. I'll go

2 through it quick, but model name and number is

3 what we received. So we're not sharing that with

4 anyone. But we have DOE pump type. We have ANSI

5 HI pump type. We have number of stages. We have

6 motor speed. We have net sales, revenues. We

7 have unit volumes. We have flow, head, and shaft

8 horsepower at a variety of load points. We have

9 motor costs. We have markups. We have percentage

10 of shipments sold with motors. We have a lot of

11 data on this data set. Okay.

12 The first thing I am going to discuss,

13 so to talk about what is the cost of a pump across

14 an equipment class, there are a lot of different

15 sizes of pumps across the equipment class. Just

16 like the efficiency surface worked out specific

17 speed and flow, you have to look at these things

18 over multiple parameters.

19 So the efficiency surface worked with

20 flow and specific speed. We were looking for a

21 single parameter, a normalized parameter, that may

22 describe how cost trends well. And we wanted --
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1 our first place to start was to work with the

2 parameters that we're using to describe

3 efficiency. And that's specific speed and flow.

4 It turns out that if you divide specific

5 speed by flow, the cost trend is very strong. They

6 go together. The parameter is very similar to

7 looking at one over horsepower, actually, except

8 for that we wanted to -- and it works very similar

9 to that, but we wanted to look at this. This was

10 the parameter we chose to use. I'll show you

11 illustrations of how it works.

12 To normalize, we bring every pump back

13 down to its 1,800 rpm equivalent because when

14 we're talking about costs, we know that cost to

15 make a pump -- we're not talking about motor --

16 really has to do with the cost of the material

17 sitting there, the metal that you had to buy, and

18 the labor you had to put into it to assemble it.

19 So we need to bring all of those pumps down to the

20 equivalent at one selected rpm speed. So

21 everything is normalized to the 1,800 rpm pump

22 when we're talking about a factor that describes
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1 the physical size of the pump.

2 For analysis purposes, so this factor,

3 we took the log of it, and we added one. It

4 allows for better regressions. It's just the log

5 allows the power series to fit it better. The

6 plus one allows the power series to fit it better.

7 You're just scrunching the data and moving it. But

8 it doesn't change the data. We'll get into what

9 it looks like.

10 The first thing to show you here is the

11 relationship between horsepower and this factor

12 that we're using. So we have log of Ns/Q. And

13 this is the normalization factor to 1,800 rpm plus

14 one. It's a strong relationship to shaft

15 horsepower. So you can pretty much say if you

16 have a pump that's here at 1.5 of this factor,

17 it's going to equal 18 horsepower approximately.

18 But the model, you can't model it using

19 traditional regressions. If we try to put

20 horsepower at the bottom, we're never going to get

21 trends that work out because we'd have to get into

22 really complex regressions.
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1 You use this factor, which is factor of

2 the terms that we're using in our efficiency

3 surface. And everything works a little better.

4 And you'll get to see some graphs on this.

5 Okay. So this is the data, some of the

6 data, to give you a picture, per unit cost versus

7 the log Ns/Q. And this is vertical inline pumps.

8 This is the manufacturer selling price with motor

9 cost included. So this is the data we got from

10 manufacturers, 1,800 rpm pumps. And you can see

11 that they turned out pretty well. You're going to

12 get a lot of variability. And I expect there to

13 be a lot of variability in the market because of

14 the motor costs and markups that the different

15 manufacturers have and pricing strategies and just

16 other features that are out there. But it trends

17 very strongly.

18 You can see down here. This will be

19 carried through. To give you an idea of what this

20 term means, I have the equivalent horsepower at

21 1,800 rpm as a secondary axis down here when

22 you're looking at this data and trying to see what
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1 a pump costs. So here we see a 1.5. The average

2 pump costs about $2,000 at MSP with a motor.

3 That's a 13-horsepower pump approximately. That's

4 what that means. So it is going to be presented

5 with the dual x-axes the whole way through. So

6 this is to get you familiar. All right.

7 So now the first step, modeling pump

8 costs without the motor. So the data that HI

9 survey, our survey, collected, revenues with

10 motors, we have to back out the motor cost. Walk

11 through how we did that. So first you calculate

12 the per-unit manufacturer's selling price, which

13 is simply for each model, divide total revenues by

14 total units. Then for each model, we estimate the

15 actual motor cost for each model in the database.

16 And so that's estimated.

17 We're assuming the motor horsepower for

18 this analysis was 120 percent of BEP required

19 shaft horsepower on average. So obviously they

20 would go to specific increments, but on average,

21 it should wash out.

22 Then we use manufacturer-specific motor
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1 cost curves for each to estimate the actual motor

2 cost. So when we went through our manufacturer

3 interviews, we collected data on motors from each

4 manufacturer. And we have an idea of what each

5 manufacturer is paying. We can apply those costs

6 to each pump because we know where the pumps in

7 the database are attributed. Okay.

8 Next, here we start having to make some

9 assumptions, but we create the adjusted motor cost

10 here by taking into account the markup and the

11 percent of pumps not sold with a motor. So for

12 this analysis, we start with inline pumps which

13 are -- according to the data we have, over 93

14 percent of the pumps are sold with motors, which

15 makes this a lot easier to deal with. So we have

16 over 93 percent of the models being sold with

17 motors. So for each pump, you have your motor

18 cost according to what the manufacturer's cost

19 curves were. You multiply that by their markups,

20 specific markup, to get what the customer is

21 paying for that motor. Then, to account for the

22 fact that not every pump was sold with a motor,
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1 you multiply the marked-up motor costs by the

2 manufacturer's specific percent of shipment sold

3 with a motor. So if the manufacturer was selling

4 95 percent of their shipments with a motor, then

5 that cost that we calculated, it's only 95 percent

6 of that cost that you have on the aggregate. And

7 that outputs what we believe would be a

8 representation of pump-only cost per unit without

9 the motor.

10 And yes, some will be overstated. Some

11 will be understated because one model may have

12 been sold 100 percent with motors and another

13 model may have been sold 70 percent with motors.

14 But in the end, we're looking at a lot of data

15 points. And we're trying to look at the

16 regression and see how a lot of data points act.

17 We know that there are going to be errors in

18 individual ones.

19 So we have pump-only MSP. Then we take

20 that. So now for every pump in our database, we

21 have the pump-only cost. We can now start looking

22 at this over discrete ranges or, say, buckets,
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1 just like a histogram of scaling parameter Ns/Q.

2 And we regressed these averages for pump-only

3 costs. And we'll show you how we do that.

4 Model results. So inline MSP model

5 results, two and four-pole were evaluated together

6 in one population because we needed to keep the

7 population of data points larger. They should be

8 fairly similar in their costs. And the scaling

9 factor corrects to represent physical size. Okay?

10 So here are the numbers that are going

11 to be on the next chart. But on the left, we have

12 the factor, which obviously doesn't mean that much

13 yet, but we'll have a chart on the next page on

14 the left. On the right, we have MSP per model

15 with no motor. And the population average for all

16 pumps was $1,383.

17 Now here is the chart. So pump-only

18 MSP, average cost per model, vertical inline. Here

19 you have your scaling factor, your secondary axis,

20 .5 horsepower, 2.2 horsepower, 13 horsepower, 75

21 horsepower, 180 horsepower. This 75 horsepower is

22 about $2,000 before a motor. This 2.2 is about
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1 $900 before a motor. You can see the curve. You

2 can fit regression to it pretty strongly.

3 So we put these in the buckets and took

4 the average because you would see a big spread

5 like you did before. And you can't regress a big

6 spread like that. If we tried to regress that

7 whole scatter chart of data, we have a lot more

8 pumps here than we do out there. And you wouldn't

9 get -- the regression would be influenced by

10 those. And you wouldn't get a representative

11 regression. So that's why we did it this way.

12 Are there any questions here?

13 (No response.)

14 MR. WEINTRAUB: Okay. So how well did

15 we do? All right. So obviously we're fitting a

16 regression. We're looking at R squared value to

17 see how well we did. Well, what does it mean? So

18 obviously a lot of pumps do better than others

19 compared to the regression. Some are high. Some

20 are low. On average, the trend that you just

21 looked at on the last page, the average percent

22 error for all the models is .5 percent. So, on
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1 average, we're representing the models.

2 The average error is $12 from the actual

3 average cost. So it's pretty close; right? You're

4 still going to have your variability because it's

5 a regression. Pumps move in and out. But as far

6 as fitting a curve to the data, it fits pretty

7 well.

8 Are there questions on this? I know

9 it's a lot.

10 (No response.)

11 MR. WEINTRAUB: Okay. So, I mean, this

12 is the kind of stuff that you take back. And if

13 you're reading through it in detail when we get

14 you the slides, come back with questions. And

15 we'll work on them.

16 Oh, and just for reference, 287 models

17 in this cost model. That's how many pumps we had,

18 pumps that actually had shipment. So obviously we

19 couldn't cost out a pump that didn't have

20 shipments because it had zero revenues.

21 Okay. So now let's look at how the

22 model re-creates the sample. So here we're
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1 looking at MSP with motors. So I added the motor

2 cost back so we could look at the original data in

3 red. So red is actual cost per unit with motor.

4 Divide the manufacturer's revenues by the

5 manufacturer's units sold. Blue is what the model

6 predicted. You see you get a lot of spread. A

7 lot of that is coming from the motor. Otherwise,

8 we would have a straight line without motor costs,

9 but different manufacturers have different average

10 motor costs.

11 Charlie?

12 MR. CAPPELLINO: Charlie Cappellino,

13 ITT. Dan, did you just say revenue divided by

14 units shipped?

15 MR. WEINTRAUB: Yes.

16 MR. CAPPELLINO: So that would be more

17 like sale price.

18 MR. WEINTRAUB: Yes.

19 MR. CAPPELLINO: So is this sale price

20 or is this manufacturing cost?

21 MR. WEINTRAUB: You're right. That is a

22 bad -- it's MSP. So I did not represent that
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1 well. Manufacturer's selling price.

2 MR. CAPPELLINO: These are all selling

3 prices --

4 MR. WEINTRAUB: Selling price, yes.

5 MR. CAPPELLINO: -- as opposed to cost.

6 MR. WEINTRAUB: I apologize. That is

7 not correct.

8 MR. CAPPELLINO: All right.

9 MR. WEINTRAUB: Yes. I apologize.

10 Manufacturer's selling price, what the first

11 customer is purchasing.

12 MR. CAPPELLINO: We should fix those

13 slides so it's clear.

14 MR. WEINTRAUB: Yes. I can't. These

15 are pasted in. But we'll update. Actually, I'll

16 change that text up at the top for you there. Per

17 unit MSP. Okay. All right. So you see we catch

18 a lot of this spread. We can re-create the cost

19 pretty well. And most of the variability comes

20 from those different motor costs that each

21 manufacturer has.

22 So this line, what's interesting is
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1 you'll see two kind of trends here. There's a

2 trend here and a trend here. These are the 3,600

3 2-pole pumps, and these are the 4-pole pumps. So

4 the model takes into account that.

5 Brief review. So we did the same thing

6 for end suction pumps. I'll run through these. So

7 we did one population again. Obviously, it looks

8 very similar to before with the inline.

9 This is the data spread. We have a lot

10 more data points. There are just more end suction

11 models that exist in the marketplace. Yes. So

12 it's a similar idea. All right. It's very clear

13 that there are outliers. Those are things that,

14 you know, they're in the model: really high-cost

15 pumps, really low-cost pumps. My guess is that

16 they're probably, you know, specialized for

17 certain reasons, but we don't know why given the

18 data that we have. All we know is the power and

19 efficiency of them, but someone probably wanted a

20 specialized pump that cost a lot more. But it's

21 in the regression.

22 Okay. So now we have established kind
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1 of the baseline cost. Now we're going to talk

2 about the baseline cost-efficiency relationship.

3 And here we're going to get into even more math.

4 All right. Baseline cost-efficiency relationship.

5 So based on industry research -- we have talked

6 about this before. MPC, so manufacturer's

7 production cost, really does not change

8 appreciably with efficiency is what we have seen

9 based on talking with the industry, that the very

10 efficient pump or the medium efficient pump or the

11 low-efficiency pump have the same components

12 inside of them. It's just a matter of the

13 engineering design. How well was this thing

14 designed? And what effort was put in? There are

15 some levels, certain factors that may break from

16 that, but on average, there is a weak

17 relationship.

18 So we're saying, as we discussed through

19 the previous section on design options, hydraulic

20 design is the prime factor in determining a pump's

21 efficiency. Hydraulic design does not appreciably

22 affect the material and labor. We talked about
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1 this earlier. And if we do want to address those

2 questions -- I know we have people who talked

3 about that -- those are things that can be brought

4 up by the group to discuss. Okay.

5 So we have also found that for

6 individual manufacturers, MSP does not change with

7 efficiency. So we have not seen individual

8 manufacturers carrying tiered product lines,

9 carrying a high-efficiency pump and a low10 efficiency pump. There's just one product line

11 that serves a purpose. Nor do they target any

12 higher markups for the more efficient products. So

13 they're not targeting the higher markup for a

14 premium product. There's just the products that

15 are offered. And they're targeting a markup on

16 that.

17 Many other design factors significantly

18 influence MPC and MSP. These are things that are

19 not taken into account in our analysis:

20 durability and reliability and all of

21 the other design factors that we have not been

22 able to look at because we are looking at just
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1 efficiency.

2 So when you put this all together, a

3 cost-efficiency relationship may exist in the

4 overall market between manufacturers where one

5 manufacturer's pricing correlates to their

6 relative efficiency in the market compared to

7 another manufacturing pricing, where there is a

8 premium manufacturer and a lower efficiency

9 manufacturer, creating a cost-efficiency

10 relationship. So we tried to investigate this.

11 But if we looked at it on a per-manufacturer

12 basis, there's no correlation between MSP and

13 efficiency.

14 Okay. So how do we find this?

15 MR. POTTS: Dan, I have a question.

16 MR. WEINTRAUB: Sure.

17 MR. POTTS: Doug Potts, American Water.

18 Yes. Could you just back up again?

19 MR. WEINTRAUB: Where are we? This one?

20 MR. POTTS: Yes. I'm just trying to

21 understand. MPC does not change appreciably with

22 efficiency. So I guess you're saying exclusive of
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1 polishing because we know that polishing adds

2 extra cost. But you're saying for a standard pump

3 construction and design, 82 percent pump or 60

4 percent pump or a 70 percent efficiency pump, the

5 production cost is very similar.

6 MR. WEINTRAUB: Yes. Yes.

7 MR. POTTS: But if you get into

8 polishing, it will be more expensive, you're

9 saying?

10 MR. WEINTRAUB: Yes.

11 MR. POTTS: Okay.

12 MR. WEINTRAUB: Yes. That's what we're

13 getting at.

14 MR. POTTS: Thank you.

15 MR. BROOKMAN: Charlie Cappellino?

16 MR. WEINTRAUB: Yes.

17 MR. CAPPELLINO: I think the other thing

18 that it actually says is a market, given the

19 current state of the market, it may not value a

20 difference between an 82 percent pump and an 84

21 percent pump in certain applications.

22 MR. WEINTRAUB: Yes. That is exactly
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1 what the market is.

2 MR. CAPPELLINO: Either way, the cost --

3 MR. WEINTRAUB: Yes.

4 MR. CAPPELLINO: -- isn't significantly

5 different and/or the market doesn't value --

6 MR. WEINTRAUB: Yes. Yes. There are

7 other features defining what the customer wants

8 beyond a certain point.

9 MR. CAPPELLINO: Right.

10 MR. WEINTRAUB: Right, yes. Yes. That's

11 what we're seeing.

12 MR. CAPPELLINO: Okay. So now we're

13 going to try and find that relationship if it

14 exists. So the cost model developed on the

15 previous slide represents an average per model MSP

16 of a pump at a given log Ns/Q, as we're calling

17 it. So the model that I showed you, that

18 regression, that was independent of efficiency. So

19 any pump in the market, the average cost is this

20 curve. That can actually be translated to MPC,

21 the production cost, by backing out the industry

22 average markup that we're using, which is for end
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1 suction pumps, 1.34. You back that out. You get

2 the average cost for a manufacturer to produce the

3 pump.

4 In this cost model, we'll evaluate how

5 each pump -- so we have all of these individual

6 pumps -- how each one of the pumps see how much

7 more or less than the average at cost and then

8 compare that to what its efficiency is, so see how

9 each pump is to the average and then see if there

10 is a correlation between its efficiency. Yes.

11 MR. STARR: So this is Louis Starr.

12 I think you had shown earlier you had the two

13 graphs. One was the manufacturer's production

14 cost. And you had the ones, the manufacturer's

15 selling price. So what you're saying across all

16 of those size horsepower pumps, it was 1. What

17 was it? Was it 74 you said or what was the last

18 --

19 MR. WEINTRAUB: Oh, the -- no. I'm not

20 sure what you're --

21 MR. STARR: Well, just --

22 MR. WEINTRAUB: Yes.
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1 MR. STARR: -- the difference between

2 the markup, as opposed to production.

3 MR. WEINTRAUB: Oh. Yes, yes. The

4 markup -- no. The markup I just mentioned was --

5 I haven't shown MPC, a chart of MPC. I only

6 showed -- this is MSP. So that's MSP, selling

7 price. If you were to draw MPC, -- this is end

8 suction pumps -- the markup is 1.34. So you just

9 draw a curve. That's this number divided by 1.34,

10 just merit coming down.

11 MR. STARR: So it does seem across the

12 horsepower range, it's a constant markup all the

13 way.

14 MR. WEINTRAUB: Yes, yes. And that was

15 the point we were making earlier on, is that

16 according to what we have learned from industry,

17 they target a markup across the product line. A

18 big pump doesn't get significantly different than

19 a smaller pump. It's the target. Okay. Where

20 were we? Okay. All right.

21 So, continuing on, we had that curve of

22 the average cost. And we know what each pump is,
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1 individual pump is. So we can see how far each

2 individual pump is from the average. We also know

3 what the efficiency of each individual pump is. So

4 we can try and see if there is a correlation.

5 Let's see. So for this analysis, as we

6 have done before, efficiency is represented by the

7 C-value because that equates all pumps. All

8 right. So we can group shipments by C-value and

9 see how their price premium varies. Okay.

10 So baseline cost-efficiency

11 relationship, inline results. Okay. Let me walk

12 us through here. Two charts here that are fairly

13 equivalent but showing different things. C-value

14 down here, this is for inline pumps. We have cost

15 premium. So you see it goes from 10 percent down

16 to -30. That is how far from that median line the

17 average pump was. Cost premium here means the

18 same thing, but here we have percentage of models

19 failing, so basically translated C-values into

20 PERs or MEIs, whatever you want to call them.

21 What we have on the table is showing the

22 data. So percentage of pumps failing, the C-value
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1 under the PER metrics, the C-value that would

2 cause that number of pumps failing. And,

3 remember, that incremental PERs from here to here,

4 those are efficiency points. So this is three

5 efficiency points. This is three points, three

6 efficiencies. Then the average per model cost

7 premiums.

8 So, again, we group them into buckets,

9 just like a histogram, took all your data points

10 within this range here, centered around a C-value

11 of 139, and saw how much more expensive or cheaper

12 they are than that regression line. Where do they

13 sit? You see that for the really inefficient

14 pumps down here, they were all -- their cost was

15 much lower than the median. Once you start to

16 move up, things kind of flattened out. And there

17 wasn't much of a premium at the higher prices.

18 This puts it into perspective because C-values can

19 string out, saying this is ten percent of the

20 models right here. So the bottom ten percent of

21 the models, there's a steep drop off in price,

22 saying the bottom ten percent of the models in the
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1 marketplace, those tails we were looking at on

2 that chart earlier, those are pretty cheap to

3 purchase. They, for whatever reason, make sense,

4 lower efficiency. They're probably going to be

5 lower durability, lower reliability. There's

6 probably a lot going into that cost, but they're

7 cheaper.

8 Once you get up there, costs are pretty

9 flat, say above 20 percent, that, like we talked

10 about earlier, the market is not valuing that

11 efficiency. They're valuing other things. There

12 are cheap pumps out there, but after that, the

13 market is not valuing efficiency.

14 So this is the conclusion from the data.

15 The next chart, the overlaps we have here are for

16 analysis. So we tried to come up with a smooth

17 result to make the analyses make sense and be a

18 little less strange, honestly, because if you

19 start putting in the wavy lines, we're going to

20 get strange results in the LCC.

21 It is fairly arbitrary. The way that it

22 was developed was we wanted these data points, the
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1 average of this, to equal this, and then get

2 ourselves up there. That's the best way that we

3 can come up with coming up with a smoothed-out

4 curve that would represent what we think the data

5 is saying. This is the best way that we can come

6 up with to try and explain what we are seeing in

7 the marketplace. It's definitely open for

8 discussion, but the general conclusion is that

9 there is a very weak cost-efficiency relationship

10 or none at these higher efficiencies than there is

11 down at the very low efficiencies.

12 So does anyone have comments, thoughts?

13 MR. BROOKMAN: Tom Eckman?

14 MR. ECKMAN: So this is a question for

15 the manufacturers as much as anything, but it

16 looks sort of like we've got a fixed cost of

17 conversion to get the higher levels. And once

18 that's done, there's not a huge difference in

19 product cost. But when you look at the economics

20 of making those, I'm assuming that the

21 amortization of that conversion cost is going to

22 be on the remaining product. So if there is some
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1 incremental cost, it has to be covered or --

2 MR. WEINTRAUB: Yes. So --

3 MR. ECKMAN: -- isn't so that this

4 relationship doesn't reflect the cost of

5 conversion. It's just what the products are.

6 MR. WEINTRAUB: Yes. You are way ahead

7 of us here; right, Tom. So this is going to be a

8 major point that we are going to discuss. This is

9 the market now. The market later may not

10 represent this; right? Costs have to come into

11 play. And we're going to get there.

12 MR. BROOKMAN: But maybe we could just

13 confirm the basic finding that you're not getting

14 much of a price premium that goes with increased

15 efficiency in these markets. Right? That's one

16 of the principal conclusions here.

17 Al Huber?

18 MR. HUBER: Yes. I want to make sure

19 that I understood what Tom was trying to say about

20 cost and once you pass that cost, it doesn't cost

21 anymore. I don't think that's what this is

22 telling us. What this is telling us, I think, is
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1 that the market does not value efficiency. And

2 that's pretty much what we -- to a certain extent,

3 if you hit a minimum level within two or three

4 points or four points, the market says I've got to

5 have so many people bidding this job, everybody's

6 efficiency is not the same. It's going to be, you

7 know, a range. I'm willing to live with it. And

8 that's what happens. And what's what you see.

9 MR. BROOKMAN: You might also interpret,

10 if I understood this correctly, that part of your

11 business model might be since you're selling into

12 a market where you've got a variety of pump types,

13 models, that your markups are fairly consistent

14 across a range of product you're selling into the

15 market, then that's part of your business model.

16 MR. HUBER: Well, I can't discuss how we

17 mark up.

18 (Laughter.)

19 MR. HUBER: We're not allowed to do

20 that. There's another department called Justice

21 that would come and see us.

22 MR. BROOKMAN: Sorry.
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1 MR. POWERS: Here. Do you want to write

2 it down and I'll --

3 MR. HUBER: But I want to make sure I

4 understood what Tom was saying because I don't see

5 -- I mean, after you pass a certain point --

6 MR. ECKMAN: What I was trying to get at

7 is that given the prior portion of this

8 presentation on the cost of conversion to bring

9 noncompliant pumps into some level of compliance

10 at MEIs or whatever tiers, ELs we want to pick up,

11 that you've got to, you know, say the 40 percent

12 failed mark was 58 percent of annual revenues have

13 got to be dedicated to conversion costs. That's a

14 fairly significant piece of cash.

15 MR. HUBER: That's huge.

16 MR. ECKMAN: And I presume that if you

17 want to stay in business, somehow you've got to

18 recover that in the price of the pumps. That will

19 change --

20 MR. HUBER: And if you look at this

21 chart --

22 MR. ECKMAN: That will change this line.
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1 MR. HUBER: Well, I don't know. If you

2 look at this chart, what it's telling you is that

3 all I've got to do is hit the minimum. Getting

4 any more than the minimum is going to be a

5 problem, is not going to gain me much market

6 share. That's what that's telling you. And I

7 don't know that we're going to be able to get

8 price.

9 MR. ECKMAN: That's part of the

10 analysis, to see how much --

11 MR. HUBER: Part of the issue in this

12 industry or our --

13 MR. ECKMAN: Trade-off.

14 MR. HUBER: -- industry, which is still

15 consolidating, which has consolidated a lot, is

16 there are a lot of manufacturers. Granted, a lot

17 of them are small, but there are a lot of

18 manufacturers out there. And, therefore -- and

19 getting pricing in this market is extremely

20 difficult. Okay?

21 MR. POWERS: Tom, this is Chuck. All of

22 our companies have done a series of studies,
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1 analysis, and whether it's consultants or

2 internal; right? And, you know, Dan is starting

3 to hit on the edge of some of this. We also are

4 not sure, but we don't think we're going to get

5 any price advantage; right, increase in price. The

6 Europeans so far -- some of their legislation is

7 already in place. There's nothing showing up on

8 any price increases to the marketplace that they

9 have seen; right?

10 Now, one risk we run, not you, not the

11 consultants, and not the government, is that when

12 you have some falloff of manufacturers, which we

13 agree there might be some -- we don't know what.

14 There will be some. What we do know and has

15 happened in the chemical industry, it has happened

16 in the power industry, and a few others, when that

17 starts to happen, the bated breath -- I'll use

18 that term loosely -- of competition offshore,

19 they're going to look at this now and say, "Wow.

20 Our designs aren't 40-50 years old," which some of

21 this is. "Now we can break in and hit this one

22 little niche, that these other two guys have
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1 fallen to the wayside or they're falling behind or

2 because of the ruling, within five years, they may

3 not be ready if it's" -- you know, Lucas was

4 saying, I think, five years is when you are ready

5 to do this. And then policy change may be, you

6 know, five years again before you make a change.

7 We're going to see offshore competition.

8 And now what that will do will make it

9 tougher for us. Right? That influx will be a lot

10 bigger than you may think. And that's okay.

11 Right? Because it makes it more competitive. But

12 it will become a problem.

13 MR. BROOKMAN: Charlie Cappellino?

14 MR. CAPPELLINO: Charlie Cappellino,

15 ITT. I don't want to beat a dead horse here, but,

16 again, the chart here should say, "Price premium";

17 right --

18 MR. WEINTRAUB: Yes, correct.

19 MR. CAPPELLINO: -- as opposed to "Cost

20 premium."

21 MR. WEINTRAUB: Yes. You are correct.

22 MR. CAPPELLINO: I'm not trying to make
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1 a fine point, but --

2 MR. WEINTRAUB: You're not. No.

3 Charlie, you are 100 percent correct. And we'll

4 go through and --

5 MR. CAPPELLINO: We're kind of

6 interchanging "cost" and "price." And we've got

7 to be careful that we keep those two separated

8 because to some of the discussion here, you know,

9 price in a lot of cases is dictated by the market

10 --

11 MR. WEINTRAUB: Yes.

12 MR. CAPPELLINO: -- where cost kind of

13 gets back to Tom's comment. That's dictated by

14 your cost of doing business. So capital

15 investment does get amortized over a period of

16 time depending on the nature of the capital

17 investment. That gets cost built into your cost

18 of doing business. So you've got to figure out

19 how to, you know, make that up. So whether

20 companies go in and can raise prices to address

21 that or not, it's a market question that, frankly,

22 only the market can answer at some point in time.
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1 We can conjecture, but it's a tough one to

2 forecast.

3 MR. BROOKMAN: Tim Eckman?

4 MR. WEINTRAUB: Yes?

5 MR. BROOKMAN: Follow-on?

6 MR. ECKMAN: Well, in all the other

7 proceedings, DOE -- and I assume they will in this

8 one -- does look at whether you can maintain your

9 margins or whether you can or don't. So that's

10 part of the manufacturer impact analysis to see

11 whether you can recapture that conversion cost in

12 the marketplace. So I think it will be of

13 interest to all of us about how those things turn

14 out because it's a fairly sizeable piece of cash

15 once you get above even the ten percent level.

16 MR. BROOKMAN: Al Huber?

17 MR. HUBER: Al Huber, Patterson. Having

18 experienced the motor regulations that were

19 produced, they increased their price. But, unlike

20 capital costs that we're having to spend, rather

21 than putting it in the machine because there's

22 nothing much we can do to it, they could always
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1 say, "Well, we're having to put more copper in.

2 We're having to do this. We're having to do

3 that." And there were only three or four of them

4 anyway. So it was real odd. They all came out.

5 Their pricing was pretty similar. I'm not saying

6 they colluded. I'm just saying it was pretty

7 similar, which you will not -- all I'm trying to

8 caution DOE on is you will not see that happening

9 in this industry. That will not happen.

10 MR. POWERS: And I think also -- this is

11 Chuck, Tom. I'm just telling you you're bringing

12 up some good points. We're all concerned; right,

13 in how would we go about this. And taking the

14 stuff that Dan's done and look at it, there's tons

15 of people that do marketing analysis in our own

16 companies; right, but on a global basis. But so

17 the line would be "Okay. Mr. Customer, you're

18 going to get some erg of" -- you know what an erg

19 is, about as much power as a fly to do a pushup;

20 right? "So you're going to get some erg to

21 improve pump efficiency." And I hear three

22 percent, but maybe it's a half. It's going to
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1 vary on the range of products. Right? And it's

2 not going to be much over time. And then you say,

3 "Well, you can buy a more efficient motor at a

4 higher cost."

5 He's going to look at that and say,

6 "Okay. Well, it's important I get the motor

7 because I have to have a motor. And the

8 regulations are they have to buy more efficiency.

9 So I'm going to take that out of the pump maybe"

10 because the pump is the dog, the motor tail

11 sometimes, even though it isn't; right?

12 Then we're going to come up with a wild

13 idea of ten percent industry is going to be

14 interested in a VFD. And in a VFD; right, costs

15 are a lot more if they haven't got one at all or

16 they haven't been proven.

17 But what I think companies are going to

18 do is they are going to look at that cost. We saw

19 58 percent revenue; right? So you just configure

20 Wall Street. What does Wall Street expect? When

21 you listen to the analysts and you go through all

22 of this stuff, they talk every day of if you say
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1 anything more than two years of payback, you might

2 as well go dig a hole and go away. You're done;

3 right?

4 So we're seeing numbers here a lot --

5 again, it's Dan's summary; I'm not saying he's

6 right -- seen numbers a lot bigger than that.

7 We're talking some of these more than ten years on

8 that payback; right, not revenue but the operating

9 income from the gross margin, however you want to

10 play it; right? You do the math; right?

11 So this is a challenge. So if it's flat

12 on market; right, and they're not getting any gain

13 or the marketplace, contractors and all, say, "Hit

14 the pump guy," you know, he's got the bigger share

15 and he takes it out of this pocket and we've got

16 to pay more in these other things; right, which is

17 what happens sometimes; right, and then the

18 payback, this -- you know, this is a serious

19 consideration we've got to think about; right?

20 They're pump guys.

21 MR. BROOKMAN: Lucas Adin?

22 MR. ADIN: No. I think just the general
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1 point I was going to make -- and, I mean, this is

2 related to, I think, Tom's point, but

3 understanding that there are significant

4 conversion costs with any one of these particular

5 levels we're going to pick and they have to be

6 recovered somehow, we need as much information as

7 we can reasonably get about how that might happen

8 and what manufacturers are likely to be able to

9 cover what price could be sustained by the market

10 because the other thing to think about is that

11 there are a lot of pumps -- I mean, all this data

12 comes from pumps that are already out there on the

13 market that are at these higher efficiency levels.

14 They're already out there. And, realistically,

15 with some of these higher levels of conversion

16 costs, those costs will be distributed to models

17 that are already meeting efficiency levels higher

18 than the standard that this group might pick. So

19 people who are paying for, you know, a higher

20 efficiency level are also going to pay more in the

21 cost. And so that it will become more of it when

22 we get to the lifecycle cost and all of that, what
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1 it is justified for the individual consumers, but

2 those things matter a lot when we talk about what

3 is a justifiable level for consumers, for

4 manufacturers, for all those things. These

5 assumptions are really important. So that's why

6 we're presenting this stuff. And we need to know

7 what you guys think.

8 MR. BROOKMAN: Gary Fernstrom?

9 MR. FERNSTROM: This is Gary. The

10 things we're discussing here go to the root of the

11 very reason why we do standards. So we have

12 learned that customers probably won't pay extra

13 and aren't interested in a few additional points

14 of efficiency. Manufacturers because of the

15 investment required probably aren't going to

16 voluntarily change their product lines to get a

17 few additional points of efficiency. Yet, there's

18 a public good associated with the energy savings

19 that would result from that improvement. Yes,

20 recovering the cost of this conversion is subject

21 to competitive forces, but if everybody in the

22 industry has to incur those costs, then it seems
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1 reasonable that competition would support the

2 commensurate increase because everyone is faced

3 with the same circumstance.

4 Again, I empathize with you because, you

5 know, if you are looking at a cost that you're not

6 absolutely certain you are going to recover,

7 that's pretty scary.

8 MR. BROOKMAN: Dan tells me he's got a

9 couple of more slides. Let's do those. And then

10 we're going to take a break.

11 MR. WEINTRAUB: Yes, same topic and

12 nothing new and groundbreaking. And then we can

13 take a break.

14 So this is just showing that same chart

15 we saw before with the cost-efficiency

16 relationship applied to it. We don't need to look

17 at this too long. These charts were the key.

18 Okay. The one last thing to talk about:

19 end suction close-couple/end suction

20 frame-mounted costs versus efficiency. So the

21 data we have on these pumps, it's not suitable to

22 regress one of those analyses that we just did for
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1 the inline. That's because the inline pumps, 95

2 percent of the market were sold with motors. So

3 we had fairly good certainty that the majority of

4 the costs included a motor. End suction close5 couple, 70 percent include a motor. So when you

6 start to try and back out motor costs off of the

7 individual models, you are going to get some

8 models that end up -- if they were never sold with

9 a motor, they end up coming with a negative cost.

10 And things just don't work out that way. It works

11 out on the average, but it doesn't work out on the

12 individual pump basis.

13 So we couldn't do the same analysis, but

14 what we decided to do was map that same

15 relationship onto the inline pumps, taking the

16 idea that the curve shape should be the same. But

17 it's going to start at a different efficiency

18 location because inline and end suction pumps have

19 different attainable efficiencies.

20 What we did, so here we're looking at

21 the same shape curve. Here the baseline inline

22 pumps, the lower inline pumps, so here it's three
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1 percent of the pumps failing. Was that a C-value

2 of 134.5. And inline pumps were around 139, which

3 is significantly less efficient. So it shows that

4 end suction pumps on average are more efficient,

5 which we understand already because they don't

6 have the additional piping attached to them, which

7 caused losses and additional complication of

8 design that come with that. So it was a matter of

9 where we are going to start this curve.

10 We started the curve here at an

11 equivalent -- what we would call an equivalent C12 value. And you see it get flat. Translating it

13 to MEI or percentage of models failing, you see

14 the curve is a little less sharp because of the

15 distribution of C-values in the marketplace. So

16 it happened to be that before for the inline

17 pumps, this whole slope was contained within ten

18 percent of the marketplace. Now this whole slope

19 is contained within 30 to 40 percent of the

20 marketplace. This is the best we could do to

21 translate that analysis over because the data we

22 have will not work for end suction pumps, the same
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1 general relationship.

2 Any questions?

3 MR. BROOKMAN: Maybe we would just take

4 very brief general comments on this detailed

5 presentation before we go to break?

6 MR. WEINTRAUB: Yes. That's what we've

7 got.

8 MR. BROOKMAN: Nothing additional?

9 (No response.)

10 MR. BROOKMAN: Let's go to break.

11 Lucas?

12 MR. ADIN: Just one quick question. So,

13 as I stated earlier, we are going to email these

14 slides out to everyone after today's presentation.

15 Do I hear that it would be useful to have them

16 printed as well? Yes? It's big. So if we want

17 to do that, I have to get the print order in now

18 so that we'll it by the end of the day.

19 MR. HUBER: We would appreciate it if

20 possible.

21 MR. ADIN: I'll check, but I think we

22 can probably do it.
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1 MR. BROOKMAN: That would be great.

2 MR. ADIN: Yes. We will definitely

3 email it out, no matter what.

4 MR. BROOKMAN: Yes. So it's now almost

5 a quarter after 3:00. Let's resume at 3:30. We're

6 going today until 5:00 o'clock. There's a Coke

7 machine on the ground floor. I think the coffee

8 shop is now closed.

9 (Off the record.)

10 (On the record.)

11 MR. BROOKMAN: We are going to proceed

12 with this presentation content. And next we're

13 going to hear from Chris. Chris, it's all yours.

14 MR. LAU: Thank you, Doug.

15 Hi. My name is Chris Lau. I am also

16 with Navigant. Dan is a tough act to follow, but

17 I will do my best. You have to excuse me. I have

18 got a cough drop in my mouth because I am

19 recovering from a cold. So if I'm not being clear

20 enunciating enough, please let me know.

21 My goal here today -- well, generally

22 when I'm up here at one of these pump meetings,
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1 I'm talking about the impact, manufacturer impact,

2 analysis, which is an analysis that DOE performs

3 to help industry and stakeholders to understand

4 the impact of various standard levels on the

5 industry as a whole. Today we're going to scale

6 back the discussions, just pricing and markups.

7 The reason for that is we're actually trying to

8 get to a conversation about consumer impacts.

9 Hopefully by the next negotiating meeting, we'll

10 have a more robust manufacturer impact analysis

11 available.

12 Let's see here. So before the break,

13 Dan had walked us through a really robust

14 discussion of what I would call base case MPCs and

15 MSPs. Okay. So Dan has taken us through a very

16 robust discussion of where DOE believes

17 manufacturer production costs and manufacturer

18 selling prices are today. I think we believe that

19 it's likely that after standards go into place,

20 those manufacturer selling prices will change,

21 what we call standards case pricing.

22 So that new MSP will likely depend on
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1 two things: one, the conversion costs that Dan

2 walked us through; and, two, manufacturer's

3 ability to pass on costs through their sales

4 chain.

5 Just to be clear, MSP, manufacturer

6 sales price, in our world, we call it MPC times

7 the manufacturer markup. So you have your

8 manufacturer production costs. And then the

9 markup covers any nonproduction costs as well as

10 what you need to make a profit.

11 Now, that markup, what we're going to do

12 is it's very difficult to forecast market forces.

13 But what we do is we consider a range of markups.

14 We try to establish our lower bounds and our upper

15 bound scenario.

16 A few other ground rules, sort of side

17 note items. So markup is MSP divided by MPC.

18 Typically sometimes we get confused with gross

19 margin. Gross margin is a little bit different.

20 It's actually your sales price minus your

21 production costs divided by your sales price. And

22 if you'd like to, want to do the math, there's the
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1 conversion from gross margin to markup formula,

2 for example. Okay.

3 So, as I said before, we're going to

4 model multiple markup scenarios to reflect varying

5 manufacturer ability to pass on their, well, in

6 this case not price increases but recover

7 conversion costs.

8 We're going to establish two scenarios.

9 And I'm going to walk you through what they are in

10 a moment, what we're thinking. At a lower bound,

11 it would be something that is a minimal cost

12 recovery. It will reflect a manufacturer's

13 inability to raise prices due to market factors.

14 And it would result in sort of minimal change in

15 end user pricing. At the upper bound, what we

16 would like to see is something that actually

17 represents high cost recovery, reflects an

18 increasing ability for manufacturers to pass on

19 costs and increase their selling price. And it

20 would likely be whatever represents the highest

21 change in end user pricing.

22 So today for the lower bound, at this
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1 point, what we're thinking about is what we

2 generally call minimum cost recovery or flat

3 markup. In other words, -- and this is very low -

4 - it would be whatever you are selling it today,

5 that's what you sell at after the standard. Right?

6 That indicates you have no ability to pass on

7 costs to your customers.

8 At the upper bound, I think there was a

9 question. We don't know where we're going to go

10 yet. We have heard two possible options to date.

11 One is that manufacturers when they upgrade

12 equipment, when they upgrade designs, when they do

13 these redesigns, they spread out the costs over

14 all of their existing models so that no single

15 model increases dramatically in price. We don't

16 know if that is realistic. We would love to hear

17 feedback on it. The other option is the

18 conversion costs recovered over just the

19 redesigned units. So if you have 20 models out of

20 50 that get redesigned, then those 20 models would

21 see some sort of increase in markup and a

22 resultant increase in selling price.
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1 I see some nods. I see some heads

2 shaking.

3 MR. HUBER: Are you looking for

4 feedback?

5 MR. LAU: I am. I am.

6 MR. BROOKMAN: Al Huber?

7 MR. HUBER: The marketplace is not going

8 to let you do that. I mean, if you try to recover

9 all that cost on that model, then you won't sell

10 any because your competitor is just not going to

11 let you do that.

12 MR. LAU: Right. You won't sell a

13 marginal unit.

14 MR. HUBER: They're just not going to

15 let you do that. I think if you want our opinion,

16 we're going to be lucky to hit your lower bound

17 that we don't end up having to eat some of this.

18 MR. LAU: Well, the lower bound would

19 mean that you don't recover any conversion costs.

20 MR. HUBER: Not any. Well, we might

21 not. We very well may not.

22 MR. POWERS: What if we said -- Chuck
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1 Powers -- offshore competition, one? Number two,

2 how do you go to market? You seem to have a

3 conviction with this. And it's okay. I'm going

4 to finish listening, but is it a bare pump to a

5 distributor? Is it three bids and the best

6 winner? Right? There's a competition. I mean,

7 the customers out there say, "I have to get three

8 bids to check the most"; right, if you're on an

9 acceptable bidders' list? And as soon as they

10 throw theirs in, what is the net advantage

11 customers are looking for, features and stuff like

12 that? Yeah, efficiency in argument can be one, no

13 argument, because there are jobs where they will

14 have efficiency evaluations. I don't see it on

15 the little stuff. I just don't see it on the

16 little stuff.

17 If you look at Doug, I mean, over 1,000

18 horsepower, some of the bigger stuff, fine, but I

19 don't see it on the little stuff; right? And at

20 the end of the day, is it being sold as a package?

21 Is it being sold? You know, when I say,

22 "package," I'm talking the base plate and a motor
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1 and a coupling and all of that or is it a bare

2 pump?

3 We ship. And I'm talking about Charlie

4 and I. We ship a lot of bare pumps. I heard Dan

5 brought up -- and it was a good point -- that he

6 felt that survey way back when, the 70 percent, I

7 think it was -- it was a pump and motor

8 combination. We don't see that conversion. We

9 are lucky to see 30 percent. So we ship a lot of

10 bare pumps. So our bare unit is going to a

11 package that somebody else is putting the market

12 price on. Right?

13 And then there's one other problem, that

14 in the efficiency evaluations, they'll state, "You

15 must have a minimum wire to water of" X. If

16 you're over that, nobody cares. So maybe you take

17 one of these lines of C's and draw a line there

18 and say, "What do we see across the board on the

19 marketplace as a minimum efficiency for that site

20 or that plant to be effective?" And once you get

21 to that point, it doesn't matter if you're two

22 points better than that or half a point better.
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1 They don't care.

2 MR. BROOKMAN: Gary Fernstrom?

3 MR. FERNSTROM: This is Gary. So I have

4 a response back to Al. Your suggestion was that

5 your competitor was not going to let you raise the

6 price. Well, if your competitor already has a

7 compliant pump that passes, he's probably not

8 seeing any investment needed. He's probably not

9 going to raise his price. And you're in a bind.

10 On the other hand, if he's faced with

11 the same challenge, too, and maybe not on a

12 product-specific basis but on a fleet average

13 basis, needs to make some investment, he'll be

14 needing to improve products, make some

15 investments. And he'll be needing to recover some

16 investment cost as well. So, you know, it doesn't

17 seem to me that we can assume that competition is

18 going to allow no price increase at all.

19 MR. BROOKMAN: Louis?

20 MR. STARR: This is Louis Starr, NEEA.

21 There's another thing to consider, too, that based

22 upon how we're defining extended product and how
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1 it might be tested, some of this stuff that is

2 going out past the manufacturer might be coming

3 back for the manufacturer when they have to start

4 meeting efficiency requirements and stuff. It may

5 make more sense, rather than just sending out or

6 taking a bare pump and sticking at the motor. The

7 person that's maybe doing that now may be shipping

8 that work back downstream or I guess upstream

9 depending on how you look at it. So there may be

10 market share increase in extended products that

11 you're making now. I mean, we don't know because

12 we haven't done it before, but there is that

13 potential.

14 MR. BROOKMAN: Okay. Keep going, Chris.

15 MR. LAU: So I'm just extending opinion.

16 And this is exactly why we tried to establish a

17 lower bound as well as an upper bound. And

18 neither scenario tends to be the most realistic

19 with the attempt that the realistics are a decimal

20 somewhere in between them. All right.

21 So we're trying to get to what are those

22 markups going to be so that we understand what the
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1 new MSPs will be. And so the key drivers here

2 are, what are the MPCs, you know, where are we

3 starting at, what are the conversion cost levels -

4 - you know, we have covered that -- where are the

5 markups today, and where is MSP today, markup MSP

6 for MPC.

7 So here is what we do. We say this is

8 the conversion cost industry basis. What is the

9 annual payment? What is the annual amount the

10 industry will have -- what is the additional

11 revenue the industry will have to make per year

12 over the analysis period to recover that

13 conversion cost? In other words, how much would

14 the manufacturer need to make per year to make the

15 industry whole after conversion costs? We treat

16 this as annuity payments. We figure out what that

17 annual amount is. We divide that by annual

18 shipments to figure out how much they're going to

19 have to increase the cost per unit per year. And

20 we add that additional cost to the base case MSP.

21 So baseline MSP plus the increased cost divided by

22 MPC is your revised markup. These are to say, how
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1 much more are you going to have to charge your

2 customers to make your conversion costs back?

3 This is where our MSP is today. I think

4 it's a little bit different. It's pretty close to

5 what you -- actually, no. This is what you showed

6 before. I just have TBDs for a couple of

7 equipment classes.

8 This is the markup we believe is the

9 industry average today. It was initially based

10 off of as much public information as we could

11 find. We came up with some estimates that were

12 somewhat in the ballpark. And then we adjust

13 those estimates based on feedback from industry.

14 So where does that take us after the

15 standard occurs? As I said before, we had

16 considered two different upper bound markup

17 scenarios. One is where you do cost recovery over

18 redesign shipments. The other is where you do

19 cost recovery over all shipments. You could see

20 for the two equipment classes or -- sorry -- for

21 end suction close-couple and ESFM up at the top

22 and Inline down at the bottom, the standards
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1 markup, not surprisingly, increases as PER

2 increases because conversion costs are going up.

3 And you can see the new MSP as well as what we

4 think the percent MSP increase will be.

5 MR. CAPPELLINO: Charlie Cappellino,

6 ITT. To perform this math, did you have to assume

7 a number of years?

8 MR. LAU: We did.

9 MR. CAPPELLINO: What number did you use

10 for the number of years?

11 MR. LAU: And so for us, what we assumed

12 was that we wanted to make what would make

13 industry whole over the analysis period. So the

14 analysis period was 30 years.

15 MR. BROOKMAN: Al Huber?

16 MR. HUBER: I've been in this business

17 for now 40 years. And I have never -- and I've

18 been through the Carter years. I have never seen

19 a 12 percent price increase in my lifetime, ever,

20 ever.

21 MR. BROOKMAN: In the span of 40 years.

22 MR. HUBER: In the span of 40 years, in
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1 this industry. I've seen it in other industries,

2 but in this industry, I have never seen it. And I

3 don't think anybody else here is expecting to see

4 anywhere near 12 percent.

5 MR. BROOKMAN: Thanks, Al. That's

6 helpful.

7 MR. CAPPELLINO: And this is --

8 MR. BROOKMAN: Charlie Cappellino?

9 MR. CAPPELLINO: Charlie Cappellino,

10 ITT. I just want to make sure I understood the 30

11 years. So that's assuming that the investment

12 that's made is going to basically be spread over a

13 30-year time period?

14 MR. LAU: No.

15 MR. CAPPELLINO: No?

16 MR. LAU: So typically what we do, when

17 we do the full MIA, we'll assume that

18 manufacturers are making that investment ahead of

19 the standard, so over a five-year time period.

20 MR. CAPPELLINO: Okay.

21 MR. LAU: And that's recovered over the

22 full analysis period, over --
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1 MR. CAPPELLINO: But what I'm trying to

2 understand is the tooling that you're investing in

3 here --

4 MR. LAU: That's up front.

5 MR. CAPPELLINO: -- has some limited

6 lifetime; ten years, for example. So in order to

7 make the conversion, there would be a ten-year

8 lifecycle for that tooling. I'm trying to figure

9 out how that --

10 MR. LAU: So I guess the way I would

11 look at it is today your tooling lasts seven to

12 ten years. Let's say ten years. And so that ten13 year periodic replacement is sort of what's in the

14 baseline. However, to get from where you are

15 today to where the standard will be will be this

16 one-time investment. That's necessitated by the

17 regulation.

18 MR. BROOKMAN: Chuck?

19 MR. POWERS: I've been at it 38 years.

20 I'm not as good looking as Al. A couple of years

21 he's got over me.

22 (Laughter.)
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1 MR. POWERS: I'm trying to put my head

2 to math that you and Dan have shown. And, again,

3 I give you a lot of credit for getting up and, you

4 know, trying to help and trying a perspective, no

5 argument; right? So if I do the math, it's a $100

6 million cost from what I remember, Dan, 109, 104,

7 whatever it was. He indicated -- what was the

8 percentage of that? It wouldn't be all of it.

9 Seventy-five percent? Is that the number? Oh,

10 100 million. Okay. Okay. So you take 100

11 million. And most companies are looking at two12 year payback for investment on things. But we

13 understand it's for the better, better

14 efficiencies, technologies, and all of that. So

15 maybe we can convince the people longer than that.

16 But if you take 100 million and divide it into 5

17 years and you take 677 to 782, the 15 percent,

18 which is your -- well, actually, you would have to

19 go higher than that, to 16 percent, which is your

20 PER-40, which is not the same as MEI-40; right?

21 But it's $100 a unit roughly. That's a lot of

22 units. I don't know if we ship that many a year
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1 to make even that up. You know, I'm trying to put

2 the relative to the --

3 MR. LAU: I understand. And part of the

4 reason why we present the information like this is

5 not only to inform the stakeholders but also

6 inform the Department; right, because there's got

7 to be a discussion about what levels make sense --

8 MR. POWERS: Right

9 MR. LAU: -- and what investments make

10 sense.

11 MR. POWERS: Right. Now, what will help

12 you that's not part of this right now is a few

13 things. One is if you consider cast iron bronze14 fitted, which is what we have been kicking around,

15 but you go to stainless, the price of stainless is

16 more; right? So there is some help there, not a

17 lot. So the different materials will help it, but

18 I think the majority of this grouping of pumps is

19 pretty basic materials, not probably. I don't

20 remember if I saw Dan's breakdown of irons versus

21 stainless. I don't remember. But if you looked

22 at that, the stainless will help you a little bit
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1 because there is more money for those. And the

2 hydraulics are similar when you do it other than

3 the fact the patterns will be different because of

4 the shrinkage rates. And then the other factor

5 that you have to consider is the amount of time

6 that goes into the work and how long is it going

7 to take until you get it done. So it may not be

8 the full 30 years; right? And then the other

9 factor is rationalization goes on every ten years

10 probably; right, consolidation of companies,

11 combination of lines, improvement of technologies,

12 changes in customers' requirements on pressures,

13 and things like that. So 30 years is not even

14 reasonable because the life of the product,

15 lifecycle, as we call it, you know, the obsolete

16 products to the active, and all is much, much

17 shorter than that; right?

18 And then the only other thing is you

19 need to look at the applications and the lifecycle

20 of an application. How long -- I keep using Doug,

21 but how long is the life of a pump that we sell

22 Doug going to be in that plant? Is it five years?
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1 It four years based on the application? So you're

2 going to be replacing that pump. So that impacts

3 the payback; right?

4 MR. POTTS: Your pumps had better last

5 more than five years.

6 (Laughter.)

7 MR. POWERS: Al, I'll give you his phone

8 number. Okay?

9 MR. BROOKMAN: I want to make sure we

10 captured that for the record.

11 Okay. Well, keep going, Chris.

12 MR. LAU: That's it. That sets up our

13 standards case selling price for the next

14 discussion.

15 MR. HUBER: Are we going to get copies

16 of those, Chris?

17 MR. LAU: Yes.

18 MR. ADIN: Of which?

19 MR. HUBER: These slides.

20 MR. ADIN: You're getting copies of this

21 entire --

22 MR. HUBER: Oh, the entire presentation?
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1 MR. ADIN: All the stuff you've just

2 seen.

3 MR. HUBER: Great.

4 MR. ADIN: Yes. That's coming.

5 MR. HUBER: Okay.

6 MR. POWERS: This is Chuck again. So,

7 Lucas, help me out here. Let's go on the

8 assumption we don't get a price increase; right,

9 because we're trying to be realists. Let's go on

10 the assumption we can get a price increase. How

11 is the government going to manage that? Because

12 we're not allowed to talk numbers and costs

13 amongst ourselves.

14 MR. ADIN: I'm not sure if I understand

15 your question.

16 MR. POWERS: How do we go about

17 precipitating that we will get a price increase?

18 MR. HANDZEL: Lucas said that we can --

19 MR. ADIN: That's not usually how this

20 works, not that kind of negotiation. Yes. So, I

21 mean, this is one of the terms on which we're

22 negotiating and one of the dimensions that has to
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1 be considered, obviously. Certainly it's probably

2 the one of most interest from your side, is what

3 this will cost. And so if you have decided --

4 now, understanding that what's up there might be

5 wrong, I mean, you have a much better sense

6 probably of what that number should be than us

7 perhaps. We don't know. That's what we're trying

8 to get feedback on. But coming into this

9 negotiation, I mean, I think it was our

10 expectation that, a reasonable expectation that,

11 somewhere in there there's a level that your side

12 of the table is comfortable with. And that has

13 certain costs that are associated with it. And,

14 you know, at some point, we have to try and figure

15 out how to compare that to what that savings are

16 on the other side because the other number that

17 matters here is what all of these consumers are

18 going to get energy savings, what all that amounts

19 to. But, in any case --

20 MR. POWERS: I used the word "maybe."

21 I'm not trying to be facetious.

22 MR. ADIN: Right.
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1 MR. POWERS: Can we convince them to use

2 a high efficiency motor in a VFD? Maybe. Can we

3 say to them, "This pump is going to be a little

4 more efficient"? Sure. We can say we will tout

5 that. And every one of these gentlemen and ladies

6 in the room will promote, you know, our products

7 and do our normal marketing thing and all of that.

8 But we can't dictate to a customer. We can't tell

9 them what to do. We can't tell them what to buy,

10 can't tell them to go to Wal-Mart, instead of K11 mart."

12 MR. ADIN: Right. Understood.

13 MR. BROOKMAN: Tom Eckman?

14 MR. ECKMAN: But we will tell them that

15 they can't buy some things they used to buy, much

16 less efficient. That's what the standard does. It

17 cuts off --

18 MR. POWERS: I don't think you're going

19 to regulate them. I think --

20 MR. ECKMAN: We're not regulating them,

21 but --

22 MR. POWERS: I think what you're going
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1 to say is to --

2 MR. ECKMAN: -- if they were going to

3 misapply it before --

4 MR. POWERS: -- the pump guys, we can't

5 --

6 MR. ECKMAN: -- they'll misapply it now.

7 MR. POWERS: Yes. We can't ship a pump

8 out of our facility unless it meets a certain

9 efficiency.

10 MR. ECKMAN: Right. That's what I'm

11 saying.

12 MR. POWERS: That's who you're

13 regulating --

14 MR. ECKMAN: Yes.

15 MR. POWERS: -- not the consumer.

16 MR. ECKMAN: I understand that. And to

17 the extent that they misapply them today, they

18 will misapply them tomorrow except they will have

19 a higher pump efficiency to start with.

20 MR. BROOKMAN: Gary?

21 MR. FERNSTROM: Well, this is Gary. What

22 we're saying, Chuck, is the less efficient pump
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1 may no longer be offered for sale. So if nobody

2 can sell it in the United States, it's the same

3 thing as saying the customer can't buy that

4 product anymore. So they're going to have to buy

5 a slightly better product.

6 MR. BROOKMAN: Chuck?

7 MR. POWERS: That's okay except for the

8 self-insured or the companies that it doesn't

9 apply to.

10 MR. FERNSTROM: What?

11 MR. POWERS: If they control a site or a

12 location, an offshore facility, things like that,

13 it won't be the same.

14 MR. FERNSTROM: Well, if it's not sold

15 for use in this country, then it isn't subject to

16 the regulation.

17 MR. BROOKMAN: We have received a

18 comment from Al Iseppon. Again, I hope, Al, I am

19 pronouncing your name correctly. His comment is

20 "This is not realistic that we can achieve these

21 increases, let alone sustain for 30 years.

22 Competition will drive us down. The only hope is
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1 to incentivize the buyers to pay premiums to save

2 energy."

3 MR. BROOKMAN: Is someone presenting

4 next?

5 MR. LAU: Yes.

6 MR. BROOKMAN: Who is presenting next?

7 MS. WILLIAMS: This is Alison. I just

8 wanted to comment on that real quick. I mean, I

9 think a lot of the things you're talking about are

10 why DOE is interested in setting standards; right,

11 because it does force buyers to buy higher

12 efficient pumps. The pricing is another story.

13 MR. FERNSTROM: Go this is Gary. Let me

14 respond to the comment that we received over the

15 web. Many utilities through various energy

16 efficiency programs do offer incentives and ways

17 to subsidize the cost of higher efficiency

18 products. The problem is that not everyone in the

19 market is interested in participating in those

20 programs. So there's a segment of buyers in the

21 market that, regardless of whether there may be an

22 incentive or not, won't buy the more efficient
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1 product. And that is the very reason for

2 standards.

3 So, in my view, having worked on both

4 sides of this fence, both standards and incentives

5 are an important element of trying to realize the

6 best efficiency improvements we can get.

7 MR. BROOKMAN: Okay. Alison, I propped

8 that mike up because the --

9 MS. WILLIAMS: Yes. So I'm just going

10 to do a couple of slides real quick. I know there

11 is a lot of concern over these issues of pricing

12 and that kind of thing. But I'm just going to

13 sort of lead into the lifecycle cost analysis.

14 So, basically, the analysis that Chris

15 is going to look at in the manufacturer markups

16 and the manufacturer impact analyses, we haven't

17 had time to fully incorporate those into the

18 downstream analyses yet because we're a little bit

19 behind. So we looked at a specific scenario in

20 the LCC just so we could have some results right

21 now. It's based on the 30 year amortization

22 period with the discount rate of 10 percent that's
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1 -- and then those conversion costs are distributed

2 among failing pumps only. So I know there are

3 concerns with that scenario. I'm just setting it

4 up.

5 This is what we're doing for this

6 iteration. And so what I want to focus on when

7 Katie presents the LCC is more the methodology of

8 the LCC and all the assumptions that go into the

9 energy use and that kind of thing in the LCC. And

10 as discussions are made going further about the

11 engineering and the manufacturer impact analysis,

12 there will be changes to the kind of assumptions

13 we make about what kind of costs are being passed

14 on to the consumer or not.

15 So I just want to set it up that we want

16 to focus on the methodology. All the results we

17 present and the LCC are going to be sort of draft

18 illustrative results, more to just like get you

19 guys familiar with how the LCC works and that kind

20 of thing.

21 Since we only have an hour left, the

22 only things we'll probably have time to present if
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1 we start are distributor markups and energy use

2 analysis. And we won't have time to fully do the

3 LCC today. So is that okay that it will be sort

4 of broken up and we'll just finish it tomorrow or

5 we just wanted to --

6 MR. BROOKMAN: I would like to preserve

7 5, 10, 15 minutes at the end of the day for us to

8 evaluate where we are and be clear on what we are

9 going to try and accomplish tomorrow. So at 4:45,

10 we're going to take a hard break.

11 MS. WILLIAMS: Okay. So my colleague

12 Katie Coughlin is going to do the LCC. You guys

13 can still direct your hate mail to me, as per

14 usual. Thank you.

15 MS. COUGHLIN: Sorry. I need to get

16 this loaded up.

17 Okay. So today, first of all, I'm going

18 to show this diagram. I'm not sure that you have

19 seen it before. Have you guys seen this before?

20 So this is the larger context of all these

21 different analyses that go into the rulemaking

22 process.
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1 So, again, we just want to emphasize

2 there are many pieces of the puzzle that we try to

3 assemble in some reasonably finite amount of time.

4 And most of these are either -- we realize these

5 are just calculations. They are just for

6 information purposes. They are not predictions

7 about the future. But they are meant to create

8 the awareness of potential impacts of the standard

9 on different aspects of the economy and various

10 users.

11 So my work is focused on these middle

12 pieces. So we're going to start with talking

13 about markups, which is a relatively

14 straightforward subject. And then I will move on

15 to the energy use analysis. And I think tomorrow

16 is when we will get into the lifecycle cost.

17 The markups analysis is to look at what

18 happens to the pump when it leaves the

19 manufacturer on its way to the user. So we're

20 looking for the markup on the manufacturer selling

21 price. And we introduce a complication into the

22 analysis because we have a baseline markup and an
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1 incremental markup. And the baseline markup is

2 the markup on the baseline unit full price. And

3 then the incremental markup is the markup on the

4 change in price that is due to the standard.

5 So think of it as something like if you

6 go buy a cup of coffee at Starbucks for $3 or

7 something. If the price of coffee doubles, you're

8 not going to be paying $6 for a cup of coffee

9 because that component of the price is only a

10 small piece of it. So it's that piece that we're

11 trying to find with the incremental markup.

12 Other than that, the analysis is

13 straightforward. We try to identify the

14 distribution channels, figure out how the various

15 parties make their profit in that business, and

16 assemble that incremental markup.

17 So these are our estimates of the four

18 primary distribution channels for pumps. We have

19 from the OEM to the distributor and then to the

20 end user, which is the bulk of the shipments; and

21 OEM to OEM to end user. I guess there's an

22 intermediary manufacturing step where the pump
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1 goes into something that someone sells. Direct to

2 end user is only a couple of percent or OEM to

3 contractors is also a relatively small part of the

4 market.

5 So this data is based on the

6 manufacturer interviews, I think. Yes. And,

7 again, I mean, these numbers are easy to change if

8 we get better data. So, again, this is mostly to

9 inform you about what our current assumptions are.

10 And if you'd like to provide comment on that, that

11 would be great.

12 So one of the things is, are we missing

13 any of a major channel for distribution of these

14 products? Another thing that we can consider is a

15 shift in the distribution chain due to the

16 standard if something very different would happen

17 under a high standard and that sort of thing. And

18 then if you have any way to try to validate these

19 shares?

20 MR. BROOKMAN: Mark Handzel?

21 MR. HANDZEL: Mark Handzel from Xylem.

22 This is complicated again. You know, like in the
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1 first one, I would just say, you know, you're kind

2 of missing the contractor portion. A lot of -- I

3 won't say all, but a lot of end users don't

4 install their own pumps. They hire a contractor

5 to do it.

6 MS. COUGHLIN: So we have an OEM to

7 contractor. So you're saying we should have OEM

8 to distributor to contractor? Is that the --

9 MR. HANDZEL: So typically most of us

10 sell to either what you would call either a

11 representative who earns a commission or a

12 distributor who buys and resells our product. And

13 then they sell it to a contractor, --

14 MS. COUGHLIN: Okay.

15 MR. HANDZEL: -- who may sell it to

16 another contractor who does business with the end

17 -- you know, I mean, like in the construction,

18 like building construction, you know, we sell it

19 to our distributor. He sells it to a mechanical

20 contractor. The mechanical contractor is paid by

21 a general contractor, --

22 MS. COUGHLIN: Okay.
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1 MR. HANDZEL: -- who typically is

2 working for the owner.

3 MS. COUGHLIN: Okay. Now, I mean, we do

4 handle that type of situation with a lot of

5 equipment. So we can introduce those distribution

6 channels. We need some sense maybe of what those

7 fractions are so that we can bound these things.

8 MS. WILLIAMS: Yes. This is Alison. So,

9 just to follow up on that, most manufacturers

10 didn't report to us the split from distributor to

11 end user/distributor to contractor/end user. And

12 so that's why we have up there that we thought

13 that was another channel. So if you guys, yes, as

14 Katie said, have any estimates of like we should

15 just split this in half and like, you know, half

16 of the 87 percent goes to their contractor and

17 half doesn't or something --

18 MS. COUGHLIN: Right.

19 MS. WILLIAMS: -- some estimate like

20 that --

21 MS. COUGHLIN: Or goes through both or -

22 - so, yes. Like I said, this is easy to deal with
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1 relative to what we have already been talking

2 about. So we're quite happy to take your input

3 and just run it through.

4 MR. BROOKMAN: Doug Potts?

5 MR. POTTS: Doug Potts, American Water.

6 Just speaking for the water industry,

7 for any new facility, the channel that you have in

8 the first bullet point would be the most common

9 one from, let's see, OEM to distributor to

10 contractor to us:

11 the end user. That would be the most

12 common one for us.

13 Actually, there would be two scenarios

14 for us. There would be that one for a new

15 facility. If it's an existing facility where

16 we're replacing a pump, I would say the most

17 common channel is OEM to distributor to end user.

18 MS. COUGHLIN: Okay.

19 MR. POTTS: Yes.

20 MR. BROOKMAN: Louis?

21 MR. STARR: So one thought is you might

22 look at your split between new pumps and
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1 replacement pumps and use that, then, to shape

2 your distribution channels, which then will change

3 that percentage.

4 MR. BROOKMAN: Okay. Thanks.

5 Chuck?

6 MR. POWERS: Yes. This is Chuck. We

7 also look at when we analyze a new product or a

8 rationalization, is the after-market piece. So,

9 you know, the after-market is a P&L line item that

10 can help. In other words, the loss leader is the

11 OE side of the business, original equipment, but

12 you might make more money because you get the

13 after-market in the parts business from it; right?

14 So you've got to look at that and how that is

15 approached. And those channels will vary from

16 this also.

17 And on top of that, I know it's kind of

18 goofy, but -- and I believe some of the

19 manufacturers do it. We have what is called kit

20 programs. So you will have a manufacturer out

21 there, like Doug, that will have the wet end, the

22 casing, the bulk of it, which generally doesn't
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1 wear out and is heavy duty and bolted to and the

2 whole back end is a kit. It's sold as a kit.

3 Now, those channels will still follow

4 through some of these, but there's also depending

5 upon the industry a specialized group of kit, go

6 out, you know, and replace and repair and put --

7 MR. BROOKMAN: How is that distribution

8 model different, Chuck?

9 MR. POWERS: It's very similar to the

10 top one.

11 MR. BROOKMAN: Okay.

12 MR. POWERS: But my point is it is not a

13 complete pump. It's the kit in the after-market

14 how they trade it; right?

15 MR. BROOKMAN: Okay.

16 MS. COUGHLIN: Again, we do have a very

17 limited need for the markups because we are really

18 in the end only looking for the incremental markup

19 on the efficiency, the additional costs due to

20 efficiency. So some of these complications may

21 not affect that incremental markup. And they

22 wouldn't actually affect the analysis, but --
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1 okay.

2 So this is just to give you an idea of

3 what we started with for the markups themselves.

4 So we have census data. We have business

5 expenditures. We have the RS means electrical

6 cost data. So all of these things are source

7 books on data for different types of costs

8 associated with distribution businesses and

9 contracting businesses and then sales tax rates.

10 And, as I said, the output is two

11 numbers: the markup on the baseline product and

12 the markup on the incremental cost of efficiency.

13 So the baseline markups would cover

14 everything associated with running, say, a

15 distribution business, including your rent and

16 paying your accountant and all that kind of stuff.

17 And a lot of those things have nothing to do with

18 the products you purchase and resell.

19 So, essentially, going through the

20 detail of how we define those costs which are

21 incremental and those costs which are not is not

22 going to be in these slides. That information is
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1 available. And we can give it to you if you are

2 interested. But ultimately the two numbers that

3 we come up with at the end are 1.5 for the

4 baseline markup and 1.24 for the incremental

5 markup.

6 So if a baseline pump costs $1,000, $500

7 gets added between the manufacturer and the user,

8 but if that price increases by $100 due to the

9 standard, then the price increase that would go to

10 the final user is only $124. That's how these two

11 numbers enter into the calculation.

12 MR. BROOKMAN: Why don't you repeat that

13 again?

14 MS. COUGHLIN: So the 1.5 is the markup

15 on the whole unit. So if the manufacturer's

16 selling price is $1,000, then the distributor

17 would sell it for, say, 1,500. Then the

18 incremental markup is only applied to the price

19 increase that results from a higher standard,

20 which is an unknown quantity at this point, but

21 say that that price increase was $100. So the

22 pump that used to cost $1,000 now costs $1,100 to
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1 the distributor. Well, they would mark up the

2 $1,000 by 50 percent as before, and they mark up

3 the additional $100 by 24 percent.

4 MR. BROOKMAN: That was well-said, I

5 think.

6 Gary Fernstrom?

7 MR. FERNSTROM: This is Gary. So my

8 question is, why would they do it that way? It

9 seems to me if the price of the product they're

10 buying increases, they would want to keep the same

11 markups.

12 MS. COUGHLIN: I think, again, it's a

13 balance between increasing your revenues and

14 remaining competitive. So the assumption --

15 again, DOE makes simplifying assumptions because

16 it doesn't want to get too involved in all of the

17 things that people do in the market. So this

18 simply represents recovering your cost of doing

19 business without losing any profitability. You

20 could think of it that way.

21 MR. BROOKMAN: Okay.

22 MS. COUGHLIN: And that is essentially
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1 all there is to the markup analysis. So we'll

2 move on to the energy use. And I guess I'll try

3 to get through this by 4:45. I don't think that

4 will be a problem.

5 So, essentially, the energy use

6 calculation is an attempt to understand the way

7 the products are used in the field to try to get a

8 good estimate of what the actual value of the

9 energy savings might be to the pump user. So,

10 essentially, the task is to try to characterize

11 the operating conditions and represent the actual

12 energy use, again in a somewhat simplified manner

13 so that we can come up with a reasonable estimate

14 of the benefit side of the standard.

15 So the actual energy use calculation,

16 once you have fully specified the details of an

17 installation, is not complicated. You take the

18 pump shaft power. So we're not concerning

19 ourselves with what happens with the motor in this

20 rule. So we take the pump shaft power

21 theoretically at each hour and just calculate the

22 energy input, multiply by hours per year, and then
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1 that gives us an annual energy consumption.

2 So we are including motor losses in the

3 energy calculation because this is to be

4 consistent with the consumer perspective. They're

5 paying electricity for the whole setup. And we're

6 using in this calculation the methodology outlined

7 in the test procedure. And in general, as the

8 test procedure evolves, the energy use calculation

9 is very likely to continue to try to be consistent

10 with the test procedure.

11 MR. BROOKMAN: Please, Charlie?

12 MR. CAPPELLINO: Charlie Cappellino. So

13 what is piece of --

14 MS. COUGHLIN: Yes. So what we have

15 done, since we have very limited information on

16 load profiles, we have created a kind of average

17 annual load profile based on percentiles. So the

18 fraction of time while the unit is running that it

19 expends at a given load point. And we're only

20 using 4 load points currently: 50 percent, 75

21 percent, 100 percent, and 110 percent of the

22 nominal duty point. So we have an hours per year
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1 at each load point. The power is the pump power

2 at that load point. And then we are adding in the

3 motor losses into the overall energy consumption.

4 We're not considering at this point that

5 variable loads would be met with a drive, with a

6 variable speed drive. We're just looking at

7 throttling. So everything is calculated on the

8 pump curve. And we will do a subgroup analysis

9 for those consumers that are using variable speed

10 drives to see if that would severely impact their

11 energy savings.

12 MR. HUBER: Al Huber, Patterson. There

13 are pumps that are out there operating without

14 being throttled and without variable speed drives.

15 Are you going to consider that?

16 MS. COUGHLIN: You mean just operating a

17 flat load?

18 MR. HUBER: Yes.

19 MS. COUGHLIN: Yes. That's essentially

20 one load profile with just -- you're just at one

21 point 100 percent all the time. So I'll get to

22 that. Yes.
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1 MR. BROOKMAN: Louis Starr?

2 MR. STARR: So let me see if I got this.

3 So it looks like you figure out the pump shaft

4 power. And then you figure out what the motor

5 loss is. And that determines how much energy is

6 being used. And then you just add that up over

7 the course of a year. Is that what you are doing?

8 MS. COUGHLIN: That's right.

9 MR. STARR: And so there is one other

10 thing. And maybe you can't allow for it. But a

11 lot of times the pumps are miss-sized because they

12 overestimated it. But it ends up, and the motor

13 is operating more inefficiently. And the best

14 efficiency point, they're even further off of it.

15 So it almost seems like there should be another

16 scaler --

17 MS. COUGHLIN: Yes.

18 MR. STARR: -- in there to bump up those

19 numbers as well.

20 MS. COUGHLIN: Yes. Yes. So we have

21 tried to account for that. So there we are.

22 Energy use variability. So the annual energy use
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1 depends on a number of factors, as people have

2 said, that depend on how the pump is installed and

3 used. So there's the actual duty point, which is

4 essentially what the user is thinking about when

5 they buy the pump. And then there's a load

6 profile, which gives you the fraction of time the

7 pump spends operating at different load point.

8 Then we have separated the load profile into two

9 pieces. One, it's just a shape parameter. And

10 the other is the annual hours of operation.

11 And, finally, there is a sizing issue.

12 So what we have done -- and hopefully this will

13 become clearer as I go through the detail, but,

14 essentially, on the pump side, we have the best

15 efficiency point. And on the user side, we have a

16 duty point. And so when we match the user and the

17 pump, we assume that those two numbers are

18 relatively close but not perfectly coincident. So

19 we're using what we call a BEP offset, which says

20 the duty point flow is sort of one plus X times

21 the BEP flow. And X for now is just chosen from a

22 flat distribution within these 2 limits -.25 to
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1 +.1. And this just represents, again, sort of

2 hearsay that says users typically operate in the

3 range of 75 to 110 percent of BEP.

4 So, once again, we are not wedded to any

5 of these assumptions. They were all put into

6 place just to allow us to crunch through the

7 numbers and get an answer to begin with. And we

8 can very easily modify this assumption if we need

9 to. Now, I'm mentioning that we're sort of

10 ignoring for the moment the whole question of

11 impeller trimming. So there is a limit to how far

12 away from BEP you'll go before you'll do something

13 besides run the pump at low power.

14 So it may be reasonable to think that

15 you would operate within this range and otherwise

16 you would trim the impeller. And when we get into

17 the next stage of the analysis, where we talk

18 about the national impacts, we'll try to come up

19 in a kind of -- we'll address impeller trimming in

20 a more kind of high-level way, but for now we're

21 just ignoring it, essentially.

22 MR. BROOKMAN: Gary Fernstrom?
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1 MR. FERNSTROM: This is Gary. So,

2 Katie, in the prior slide, you showed us making an

3 adjustment for the motor efficiency. And, sure

4 enough, that accurately reflects the energy that

5 would be used. However, the quality of the motor

6 determines the power factor. And that, in turn,

7 results in building distribution and utility

8 distribution system losses.

9 So the way our rate structure works is

10 there is a tenth a percent penalty for each

11 percent the power factor is below 85 and a tenth a

12 percent credit for each percent the power factor

13 is above 85. So I would suggest when you look at

14 the motor efficiency and make that conversion, you

15 give some consideration to the power factor and

16 how that relates to the character of what the

17 customer is paying for.

18 They pay for real power and oftentimes

19 in cases where these motors are used, they pay for

20 reactive power as well. And that's another -- or

21 reactive energy. And that's another form of

22 energy that contributes to energy use.
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1 MS. COUGHLIN: Okay.

2 MR. BROOKMAN: Louis?

3 MR. STARR: So Louis Starr with NEEA. So

4 it looks like you adjust the flow for people who

5 may have undersized the pump or people who may

6 have oversized the pump. But that doesn't seem

7 like it accounts for the change in efficiency

8 necessarily.

9 MS. COUGHLIN: Yes. So we have the pump

10 curve and the efficiency curve in the database.

11 MR. STARR: Okay.

12 MS. COUGHLIN: So if we're operating

13 away from BEP, we just sort of shift the power

14 calculation down the efficiency curve.

15 MR. STARR: And change the efficiency

16 number; right?

17 MS. COUGHLIN: That's right, yes.

18 MR. STARR: Okay.

19 MS. COUGHLIN: Head and efficiency.

20 MR. STARR: So your equation from your

21 last slide, it does include efficiency in there

22 somewhere if you switch back to the previous page?
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1 MS. COUGHLIN: Yes. P is the power;

2 right?

3 MR. STARR: Okay.

4 MS. COUGHLIN: Everything goes into

5 that. We just sort of -- yes.

6 MR. STARR: Okay. So it does efficiency

7 in that number? Okay.

8 MS. COUGHLIN: It does include

9 efficiency, yes.

10 MR. BROOKMAN: Chuck Powers?

11 MR. POWERS: Yes. I think this is

12 excellent. What I would love to see come out of

13 this -- it sounds like you are on the right path -

14 - to help us is to put together some kind of

15 message that we can share in our instruction

16 manuals or something that the government, you

17 know, could generate to say, "By the way, you

18 know, we're going to do it, but if you all were to

19 do it" -- if you go buy a refrigerator, you have

20 that yellow stamp on there. And everybody gets up

21 real close and takes their glasses off and reads

22 the small print on running a refrigerator and how
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1 efficient it is. I'm saying some type of a

2 program that would educate and communicate, you

3 know, running a pump and its sweet spot, which

4 means a lot, VFD drives. If this is what this is

5 getting to, that's fantastic because it will help

6 us all get there. Right?

7 MR. BROOKMAN: Lucas?

8 MR. ADIN: So that's kind of a real9 world use of the product. The point of this

10 exercise, really, is just to come up with an

11 estimate of what's the difference between a

12 standards case and a non-standards case for the

13 standards that we're looking to set for the

14 typical consumers. We're trying to come up with

15 some across-the-board way of looking at what is

16 the typical consumer likely to save based on a

17 pump that achieves the energy efficiency

18 improvements that we might look at at these

19 different standard levels.

20 So I completely understand what you're

21 talking about. And there's value in that, I'm

22 sure. That's just a different part of this whole
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1 effort.

2 MR. BROOKMAN: Louis?

3 MR. STARR: There was one other thing. I

4 understand why they didn't consider trying to

5 figure out the efficiency of the pump by trimming

6 the impellers, but most of the time to meet a duty

7 point, you trim the impeller to get to the

8 customer's desired flow point and duty point. So

9 what your equation doesn't have in there is the

10 fact that probably half of the pumps are trimmed.

11 So, actually, your energy use --

12 MS. COUGHLIN: Right.

13 MR. STARR: -- is going to go up because

14 of that. So that sort of needs to be included in

15 there as well or do you have a place for it?

16 MR. BROOKMAN: Al Huber?

17 MS. COUGHLIN: We'll be doing that in --

18 yes. So, as I said, we have to include that in

19 the national impacts analysis. And you can kind

20 of put it in in a rough way at the end of the LCC

21 by just saying, you know, on the operating cost

22 side, you know, if your power was down 20 percent,
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1 everything would just go down 20 percent. So it's

2 not explicitly included in the LCC. It's not

3 really needed in the LCC, but it's fairly easy to

4 figure out at the end how that would factor in.

5 MR. BROOKMAN: Al, do you want to

6 comment?

7 MR. HUBER: I think Louis understood

8 what we were signaling. If you trim it, the

9 power, the horsepower, is going down.

10 MS. COUGHLIN: Yes. Yes.

11 MR. HUBER: So the power usage is going

12 down.

13 MS. COUGHLIN: That's right.

14 MR. HUBER: So if you believe that 50

15 percent of them are trimmed, then you certainly

16 need to reflect that in this formula. And it's

17 probably not reflected.

18 MS. COUGHLIN: Right. As I said, when

19 we get to the end, we can revisit this issue and

20 bring it in.

21 MR. BROOKMAN: Gary has a brief comment.

22 MR. FERNSTROM: This is Gary again. So
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1 I'd like to ask a follow-up question because I

2 think my comment may have gone under the table so

3 far as some of the participants are concerned. My

4 question is, would you in DOE be interested in

5 considering or open to considering all the forms

6 of energy utilized by the motor, which would

7 include kilowatt hours and reactive kilovolt

8 ampere hours because both of these are forms of

9 energy which are significant in terms of

10 understanding the total energy use?

11 MS. COUGHLIN: Well, for this rule,

12 motors are not in the design options. So,

13 essentially, we're using the motors rule to

14 determine what type of motor would be matched with

15 a pump. So I think that we can't really introduce

16 things that are not in the current motors rule.

17 MR. ADIN: Gary, can I ask a clarifying

18 question? Are you really just asking about how

19 we're going to account for that element of the

20 quality of the motor in the cost aspect of the

21 electricity, like with respect to the reactive

22 power element?
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1 MR. FERNSTROM: It doesn't matter to me

2 whether it's considered in the cost of the

3 electricity or whether it's considered in the

4 characterization of energy used by the motor. But

5 I think that it ought to be in one place or the

6 other.

7 MR. ADIN: Okay. I understand your

8 comment.

9 MR. BROOKMAN: Okay. Thank you.

10 MR. ADIN: We'll definitely think about

11 that.

12 MR. BROOKMAN: Thank you.

13 Katie?

14 MS. COUGHLIN: Okay. So the other

15 important factor for understanding the actual

16 energy consumption of the stock of pumps in the

17 field is the duty points. What's the actual

18 distribution of duty points?

19 So here I'm just going to give you an

20 overview of the data sources that we have access

21 to. There are essentially three databases that

22 we're working with apart from the shipments data
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1 that was turned in by the manufacturer. One is

2 there's a farm and ranch irrigation survey

3 conducted by the Department of Agriculture, which

4 gives, actually, quite highly resolved information

5 on irrigation pumps, although that is a fairly

6 small share of the market.

7 The second one is there is a database

8 compiled by Washington State University for motors

9 that contains energy audit data, but many of those

10 motors are attached to pumps. So we ended up with

11 about several thousand motors that are used with

12 pumps that we could use to understand a little bit

13 more about things like hours of operation and

14 applications.

15 We are aware that this data may be

16 biased towards motors that are operated heavily

17 because it's people doing energy audits. So

18 they're already concerned somewhat about

19 efficiency.

20 And then the third source currently that

21 we have is a pump test data set that came from

22 PG&E, which again gives us some distributions of
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1 duty points for different types of users.

2 Now, the problem with the second two is

3 that they are not statistical samples. So it's

4 not like they went out and they decided they want

5 to sample the population and find out how big

6 people's pumps are. So, to get around that

7 problem, we use the manufacturer shipment data to

8 determine the actual distribution of pump sizes in

9 the field.

10 And, for load data, we essentially don't

11 have any information on load profiles. We had a

12 little bit of commercial building simulation done,

13 but we're not really convinced that it's a

14 noncircular process. You sort of make some

15 assumptions, and you get them back out again at

16 the end.

17 So, to get around this problem, we have

18 just defined four load shapes. And we're using

19 them. You can think of this as more of a

20 sensitivity or a scenario-type analysis. Let me

21 skip that for now.

22 So these are our four canonical load
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1 profiles. And, again, this is all very easy to

2 change if it's complete crackpot. So we have a

3 flat load, which is 100 percent of the time you're

4 at the duty point. That's the blue bar. And then

5 we have kind of flat, slightly oversized, meaning

6 you split between operating at 100 percent, 75

7 percent. We have what we call variable load,

8 oversized, meaning the load profile never goes

9 above 100 percent, but there is also a significant

10 amount of time at 75 and 50. So that's the green

11 bars in the chart. And then, finally, the

12 variable load undersized is similar. You have

13 some weighted at all four points, but you're also

14 spending in this case 20 percent of time at 110

15 percent.

16 And currently we simply distribute these

17 load profiles randomly across all the pumps

18 without paying any attention to application or

19 anything else. So, again, that's something that

20 if we have information that we can use to make

21 that more systematic, we would be very happy to

22 use it.
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1 The other big component of this is

2 annual operating hours.

3 MR. ECKMAN: On that last point, I think

4 random distribution probably isn't what you want

5 to do because you've got different rate schedules

6 between the commercial and industrial sectors. And

7 they will probably have -- in one case, you've got

8 an HVAC load profile. In the other case, you

9 probably have process loads for the pump. So that

10 they may have different --

11 MS. COUGHLIN: Yes.

12 MR. ECKMAN: -- different revenue per

13 kilowatt hour associated with a load profile. So

14 I think there probably is some correlation between

15 load profile and retail prices of electricity.

16 MS. COUGHLIN: Right.

17 MR. ECKMAN: So probably not random.

18 MS. COUGHLIN: One of the things that

19 we're not clear on, though, is if you're using

20 multiple pumps to meet an end use, then you may

21 have very different load profiles, even on the

22 pumps that are all serving that end use. So
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1 that's another piece of the puzzle that we don't

2 have information on at the moment.

3 MR. BROOKMAN: Any comments from --

4 MS. COUGHLIN: I'll just mention, too,

5 though, that if you look at the output of the

6 analysis, generally things are not very sensitive

7 to these differences. They're far more sensitive

8 to just overall hours per year, which is probably

9 obvious.

10 MR. BROOKMAN: Rob?

11 MR. BOTELER: Yes. I would just mention

12 that you should talk to Sanaee because we have

13 done hours of operation and usage for pumps. She

14 did that for the motor TSD.

15 MS. COUGHLIN: Right. We have looked at

16 the hours for the motors, yes.

17 MR. BOTELER: Just to be consistent.

18 MS. COUGHLIN: Yes, yes.

19 MR. BROOKMAN: Thank you.

20 MS. COUGHLIN: So, moving on to

21 operating hours, we have a consultant report that

22 we requested. And he provided a distribution of
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1 operating hours by application. And these are

2 essentially five point values. There's 20 percent

3 of the time. And then we've got several

4 applications. Again, these are sort of aggregated

5 over many different sub applications.

6 So, for example, the first row, the

7 application is cooling water, so for buildings.

8 Twenty percent of the time, it is 2,500. Twenty

9 percent of the time, it is 3,500 and on up.

10 And so, again, this is just for

11 information. If there is some reason why you

12 think these are inappropriate, we can very easily

13 change them.

14 So, to address the comment that was just

15 made, we did compare the averages that you get

16 from the consultant report with the averages that

17 come out of the motors database. And here are the

18 comparisons. They're reasonable. Again, the

19 motors database may be overstating the average

20 because it's people who go get energy audits. The

21 one difficulty here with the last two is that we

22 are finding that these buckets that contain a lot
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1 of random applications are not -- our consultant

2 report suggested that they don't have a lot of

3 operating hours; whereas, the motors database

4 suggests that they do.

5 Okay. So that is actually it for the

6 energy use. So, essentially, once you've got

7 operating hours, you have got a duty point, you

8 have got a pump curve, and you have got this

9 offset that tells you how far away you are from

10 BEP, you just plug in this equation for energy use

11 for the pump, which I guess I could have put up

12 here, but I didn't, flow times head divided by

13 efficiency. And that gives you the annual energy

14 consumption. So I think we'll leave until

15 tomorrow the discussion of how this then goes into

16 the lifecycle costs.

17 MR. BROOKMAN: Charlie?

18 MR. CAPPELLINO: Charlie Cappellino,

19 ITT. So as far as where the equipment tends to

20 operate relative to duty point, I think it's

21 fairly well-known that pumps generally operate to

22 the left of the BEP point, the duty point, as
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1 opposed to beyond the BEP point --

2 MS. COUGHLIN: Right.

3 MR. CAPPELLINO: -- or duty point.

4 MS. COUGHLIN: Right. So --

5 MR. CAPPELLINO: So if you're going to

6 weight it, I would weight more towards the fact

7 that they would operate at a lower duty point than

8 the higher one.

9 MS. COUGHLIN: Yes. We have kind of

10 done that already. So there's only one out of the

11 four profiles that has any weight at 110, which

12 means that would be 25 percent of pumps have any

13 weight at all above 100 percent.

14 MR. CAPPELLINO: Even 25 percent above

15 the load point seems high to me.

16 MS. COUGHLIN: Okay.

17 MR. BROOKMAN: Tom?

18 MR. ECKMAN: There may be some data on

19 motor loading. I know the DOE's industrial

20 assessment centers that are all across the

21 country. There's one at OSU in Oregon. There are

22 a variety of them across. They all do audits,
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1 student audits, but that's much more focused on

2 small and medium-sized industrial facilities,

3 rather than the large ones that WSU did. So there

4 may be more diversity there that could be --

5 MS. WILLIAMS: This is Alison. On that

6 note, we do have some data on motor loading, but

7 there are two assumptions to get from duty point

8 to motor loading because you have to know how you

9 sized your pump off the duty point --

10 MR. ECKMAN: Right.

11 MS. WILLIAMS: -- and then how you sized

12 your motor. And so it's actually pretty difficult

13 to use motor load data without having other

14 assumptions nailed down. But we have looked at

15 some of that data. We can look back at it.

16 MR. ECKMAN: Yes. I don't know whether

17 there's anything there. I just note that we have

18 used quite a bit of that data in the Northwest to

19 just get a sense on what the small and medium20 sized industrial loads look like.

21 MR. BROOKMAN: Okay.

22 MS. COUGHLIN: All right. That's it.
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1 MR. BROOKMAN: You're finished with this

2 segment. Is this where you think we should pause?

3 MS. COUGHLIN: Yes.

4 MR. BROOKMAN: Okay. Let's move to --

5 we're a little ahead of our 4:45 hard stop. Well,

6 let's move to that. I'm interested in us as a

7 negotiating working group talking about what we

8 feel we need to accomplish tomorrow and how to

9 queue up a productive discussion on metrics, which

10 will be one of the main things to discuss

11 tomorrow, and maybe talk a little bit about

12 workload, scheduling, looking ahead for the next

13 several meetings.

14 I've spoken with Lucas about this

15 briefly. I've spoken about this with a few of the

16 other members on the Working Group. I just

17 thought I would queue Lucas to get this going.

18 MR. ADIN: Okay. Thanks, Doug.

19 So we presented a lot today. So I

20 imagine you guys have a lot to think about before

21 tomorrow. We did send the slides. We are having

22 them printed. We will provide those before we
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1 leave today hopefully. So I think coming in

2 tomorrow, there are a couple of main items that we

3 would like to try and address.

4 One, as Doug mentioned, is the metric

5 since we really still haven't gotten too much

6 resolution on that. And, as we have shown, I

7 mean, we can do a lot of analysis without having

8 that completely nailed down. You know, we do

9 still yet have to figure that out. And so one

10 thing we were hoping for is since it does sound

11 like the manufacturers might have an idea of what

12 they think might work, to the extent there's

13 something that, you think there is something that

14 would work better than what we have proposed, I

15 mean, that might be useful for us to hear about

16 that. I don't know if there is something specific

17 that you wanted to talk about or --

18 MR. BROOKMAN: Yes. Well, and, Al, just

19 --

20 MR. HUBER: I can if you want. Do you

21 want to wait until tomorrow? Do you want me to

22 briefly speak about it now?
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1 MR. BROOKMAN: We may have time now, but

2 my expectation since I have talked this over with

3 Lucas and some of the analytic team is that you

4 might in describing your proposal and describing

5 what you think would be beneficial from a

6 manufacturers' caucus point of view, to go into

7 some detail, to provide some -- I think you have

8 generally described what you would like to see

9 happen. We had a brief conversation this morning.

10 But maybe you could do some whys and wherefores

11 and all that sort of thing in a more complete

12 fashion because there is a proposal from DOE that

13 is on the table with a considerable amount of

14 support, backup. And the more rationale that you

15 had for your proposal, I think the better it would

16 be.

17 MR. ADIN: Just to be a little more

18 specific, Doug --

19 MR. BROOKMAN: I was trying to be

20 general there.

21 MR. ADIN: So I'll be a little more

22 specific.
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1 MR. BROOKMAN: I was.

2 MR. ADIN: You covered the general part.

3 I'll get the specific part.

4 We had put up, I think, in the last time

5 we talked about metrics a slide that had some

6 criteria that DOE uses to assess whether a

7 particular metric is appropriate, you know, the

8 things that we try and accomplish through the use

9 of a metric. We can put those up again. And I

10 think we're going to be talking essentially in

11 those terms. So, essentially, the question will

12 be, you know, how does either our proposal or

13 yours accomplish those things better or what might

14 we be missing or what about our metric doesn't

15 necessarily achieve what it is that we're hoping

16 to achieve based on your understanding of the

17 market, like, you know, accurately representing

18 the energy use of these products or providing a

19 reasonable and representative measurement that

20 consumers can use to make a good purchasing

21 decision, things like that? I mean, those are the

22 kinds of things that we're thinking about. You
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1 know, so how does one necessarily work better than

2 the other? And I think we're trying to get to a

3 better understanding of if ours isn't the best

4 one, why that might be. So I think that's kind of

5 the gist of it.

6 MR. HUBER: Well, you had several

7 options, I think, or you nailed it down to one?

8 MS. WIDDER: You mean several options

9 for how to calculate? This is Sarah from PNNL. Is

10 it working? Oh, I have to move apparently. I'm

11 like in a black hole. Oh, keep it close? Anyways,

12 do you mean several options about how we might

13 calculate the PER?

14 MR. HUBER: What we would like to see is

15 if you want us to go back and compare what we are

16 thinking with what you're doing, then why don't

17 you give us the formulas that you want to use and

18 the metric you want. And they're behind the

19 metric and what you think it is going to achieve.

20 And then we'll analyze ours in the same basis and

21 bring it back to you. I don't know that we'll --

22 you know, we'll try to do it tonight, but this is
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1 not -- I'm getting -- well, my engineering

2 consultant is telling me no, but --

3 MS. WIDDER: Okay.

4 MR. BROOKMAN: I thought what we were

5 describing wasn't that level of detail. I thought

6 we were talking about your idea for a metric, your

7 --

8 MR. HUBER: Well, ours is more --

9 MR. BROOKMAN: Conceptually.

10 MR. HUBER: Conceptually?

11 MR. BROOKMAN: Well-described.

12 MR. HUBER: I could do that in a few

13 minutes if you'd like.

14 MS. WIDDER: And I think we can also. I

15 mean, essentially, I think there are two main

16 issues. Do we capture the performance of motors

17 and controls or do we just stick to the pump, bare

18 shaft pump, and do we weight the load points or do

19 we analyze them and compare them individually

20 against some standard? Those are the two main

21 issues I see.

22 MR. HUBER: Yes. I think what we need
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1 to understand is, do you have to have one metric?

2 MS. WIDDER: Betsy just left.

3 MR. HUBER: Well, apparently she did.

4 But, you know, our reasoning is to try -- and I

5 believe some of the NGOs feel the same way -- to

6 try to move the marketplace. Since we can't

7 control the marketplace, we need a metric that the

8 marketplace is going to understand and is going to

9 want to utilize to not drive them. I don't like

10 to use that word but try to incentivize them to

11 move more to the variable speed applications.

12 So what we had in mind is one metric for

13 the pump, which is basically the MEI/PER, whatever

14 you what to call it. I mean, we're very close on

15 that, whether you average the three or whether you

16 do the other. I mean, we're very --

17 MS. WIDDER: Right.

18 MR. HUBER: They call that fixed load.

19 MS. WIDDER: Fixed load.

20 MR. HUBER: Or whatever you want to come

21 up with, but --

22 MS. WIDDER: Uncontrolled.
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1 MR. HUBER: -- that's what it is. It's

2 fixed load or uncontrolled, however you want to

3 put it. And then you have variable load. And

4 under variable load, on the numerator, you would

5 have the load profile broken across using the BEP

6 of the pump all the way across --

7 MS. WIDDER: Yes.

8 MR. HUBER: -- because you are trying to

9 keep it at BEP. So you understand what I am

10 trying to get at.

11 MS. WIDDER: Yes. I've got you.

12 MR. HUBER: And then your motor, the

13 same way across; and then your control. We're

14 suggesting you ought to use .98, instead of 1, on

15 the control because we know the control is not 100

16 percent efficient.

17 MS. WIDDER: Okay.

18 MR. HUBER: And generally .98 is

19 probably pretty close at full load.

20 MS. WIDDER: Yes.

21 MR. HUBER: Yes. And --

22 MS. WIDDER: We redid it, and we assumed
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1 .96. But we could do --

2 MR. HUBER: And you vary the efficiency

3 of the motor with a load because we know the motor

4 will go down. We know the motor efficiency will

5 go down.

6 MS. WIDDER: Yes, yes. And we have been

7 -- yes. Okay.

8 MR. HUBER: So that's the numerator. The

9 denominator, then, becomes in our opinion whatever

10 MEI -- and this is based on an MEI that you pick;

11 right? I mean, if it's a 40 or a 10 or whatever

12 it happens to be, you go in there. And you pick

13 out the pump as a denominator.

14 MS. WIDDER: The uncontrolled pump.

15 MR. HUBER: The uncontrolled pump at all

16 those flows, its efficiency at all those flows,

17 the motor loads at all those flows. And that's it

18 because there is no control. It's like being

19 throttled.

20 MS. WIDDER: Yes.

21 MR. HUBER: And that is your

22 denominator. And when you divide that in there,
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1 you're going to get something like 1.2, 1.3, or

2 whatever you get. And as you improve the top by

3 adding a more efficient motor, a more efficient

4 control, or more efficient pump, that number will

5 rise.

6 MS. WIDDER: Rise.

7 MR. HUBER: Well, your numerator is

8 going to get larger.

9 MS. WIDDER: Okay. Yes.

10 MR. HUBER: And your denominator is

11 staying fixed.

12 MS. WIDDER: Okay. Yes.

13 MR. HUBER: So it's going to go up. So

14 I look at my pump under variable load.

15 MS. WIDDER: Yes. No. I'm with you.

16 And, actually, I think we are very close together.

17 I think that proposal and something that -- one of

18 the options --

19 MR. HUBER: Well, let's --

20 MS. WIDDER: -- that we were discussing

21 --

22 MR. HUBER: You've got one option. It's
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1 close.

2 MS. WIDDER: -- are very, very, very

3 similar. Yes.

4 MR. HUBER: It's close. It's similar.

5 But ours lets you compare. You're basically using

6 a throttle condition, which is what exists in the

7 field today at a lot of places, to a controlled

8 condition --

9 MS. WIDDER: Yes.

10 MR. HUBER: -- and allows you to get an

11 index, --

12 MS. WIDDER: Right.

13 MR. HUBER: -- for lack of a better

14 phrase.

15 MS. WIDDER: Right.

16 MR. HUBER: And as you improve that

17 efficiency at the top line or at the numerator,

18 your point or your scale is going to go up. So

19 the consumer can look and say, "If I have a fixed

20 load, I can compare all fixed loads of all pumps

21 with this number. And if I have a variable load,

22 I can compare all of those with this." We can't
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1 help the consumer decide which load he has. I

2 mean, we would like to in many cases, but, you

3 know, really, he has to decide that.

4 MS. WIDDER: Right.

5 MR. HUBER: But he will have a method of

6 judging that and a method of, I think a real

7 practical method of, he can look down and see what

8 the efficiency is on a throttle one if you show it

9 to him. And then he looks at his control. And

10 he's going to see right away that he's much better

11 off using controlled.

12 MS. WIDDER: So I have a question for

13 you just to follow up on that. And I think we are

14 agreeing on 99 percent of the things. Is it

15 important -- and this is for everyone, actually.

16 Is it important that for the fixed-load case or

17 the uncontrolled case and the controlled case or

18 the variable speed case, that the metric be

19 different? So just let me like add onto that just

20 to flush out the discussion because that's what we

21 were discussing last meeting with the PER. It was

22 only one metric, but we had different load points
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1 for the fixed case and the controlled case. And

2 you saw the singular metric greatly improved in

3 the controlled case. And so you're demonstrating

4 that better performance.

5 MR. HUBER: You did. But I think by

6 trying to put it into one metric, you're going to

7 confuse the consumer --

8 MS. WIDDER: Okay.

9 MR. HUBER: -- because he's going to

10 look at efficiency for a fixed pump and maybe --

11 he's got to know which application he has. Okay?

12 But we're afraid he's going to get confused

13 looking at the same metric for a fixed pump

14 application when he really needs a variable speed

15 application or he needs -- you understand what I'm

16 saying? How is he going to decide that from what

17 we're giving him?

18 MS. WIDDER: Yes, yes. I see what

19 you're saying.

20 MR. HUBER: I mean, if I'm trying to

21 give him something, all right. Well, there are

22 two metrics. I need to go figure out which one
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1 I've got. If I have one metric, I may not go

2 figure that out. I may go look at the highest

3 number. And it may not be the right one.

4 MS. WIDDER: Right.

5 MR. HUBER: It may not be the right one

6 for my application. And I may go use it.

7 MS. WIDDER: Okay. That makes sense. So

8 along those lines at that high level -- I mean,

9 that was a really good discussion. Thank you for

10 those comments, Al. I think that is the exact

11 kind of discussion we want to start off with

12 tomorrow reviewing the goals of the metric and

13 then maybe see what the rest of the Working Group

14 feels with regards to the way the metric is

15 calculated or constructed for a fixed versus a

16 variable load case. And if we could reach a

17 consensus among the Working Group, whatever it is,

18 similarly to the discussion we heard, either we're

19 not especially wedded to the proposal we have been

20 presenting. It's just the best thing we could

21 come up with to try and accomplish all of the

22 metrics. And then to the extent that the Working
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1 Group has other suggestions, hopefully we can get

2 somewhere tomorrow.

3 MR. BROOKMAN: I thought this was

4 illuminating. That's very useful. Since they

5 have put their proposal on the table here

6 conceptually, is there more information you would

7 request they give or is that sufficient for now?

8 MS. WIDDER: I think the one other thing

9 that would be useful to consider for tomorrow --

10 and we can talk about what I'll present to start

11 with tomorrow. I think we might change the way we

12 have been talking about the PER to only present

13 the example that's most similar to what, Al, you

14 just discussed because I think that makes sense to

15 use. That makes sense to you. So we might as

16 well just take the other options off the table. So

17 we'll do that. But also just consider the issue

18 of weighting the load points versus accounting for

19 the efficiency or the PER at each load point.

20 MR. ADIN: I think you mean the house of

21 efficiency compared to the --

22 MS. WIDDER: The house of efficiency
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1 approach compared to the weighting.

2 MR. HUBER: You're talking about using

3 an average, --

4 MS. WIDDER: Yes.

5 MR. HUBER: -- rather than using each

6 point.

7 MS. WIDDER: Yes.

8 MR. HUBER: You know, other than we

9 would like to keep it the same as Europe, you

10 know, it's not going to make a lot of difference.

11 I think that you may get some consequences from

12 that that you don't realize yet. And we might not

13 know either, but I don't think we're so hard and

14 fast on that.

15 MS. WIDDER: Okay.

16 MR. HUBER: But we honestly believe that

17 we need a metrics out there that will inform the

18 consumer that he had two options or he has two

19 things he had to consider and will lead him in the

20 right direction because we can't regulate the

21 market.

22 MS. WIDDER: Okay.
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1 MR. HUBER: We've got to try to find a

2 way to do that. And that's the reason we thought

3 this was a better way.

4 MR. ADIN: Right.

5 MS. WIDDER: Right.

6 MR. ADIN: And I think that's exactly

7 the kind of feedback we're interested in.

8 MS. WIDDER: Yes. That was very

9 constructive.

10 MR. ADIN: Right. What information are

11 we providing to the consumer? How are they going

12 to use it?

13 MR. HUBER: Yes.

14 MR. ADIN: And we want to know

15 realistically what your expectations are.

16 MR. HUBER: If you give him one, we

17 don't know that he's going to pick the right

18 choice. He doesn't know he needs to. He might

19 not even realize he needs to.

20 MR. ADIN: Yes.

21 MR. HUBER: That's the point here.

22 MR. ADIN: Yes.
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1 MR. HUBER: The other thing from our

2 side quickly -- I know Doug is trying to get us

3 out of there, but --

4 MR. BROOKMAN: No. I'm fine with this.

5 We're doing well.

6 MR. HUBER: But we would like to know as

7 our group, what are you thinking about or what MEI

8 level or PER level are you guys -- you have run

9 all the analysis and you've done this. Where are

10 you coming down? Where are you close so we can go

11 take a look at that?

12 MR. ADIN: So it's simplest to say

13 that's not something that we predetermined. I

14 mean, we have done analysis. And we have come up

15 with some numbers. Literally we have just

16 finished this in the last week or so. I mean,

17 it's --

18 MR. HUBER: We understand.

19 MR. ADIN: Right.

20 MR. HUBER: We would just like to know

21 where it looks to you like it's coming down.

22 MR. ADIN: I think that's going to start
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1 coming into focus in the next day or so. And

2 we're going to put up the LCC numbers, which are a

3 very important element in understanding where the

4 cost-justified level might be. I mean, some of

5 what we have shown today gives you a sense of how

6 things look.

7 Now, understanding that a lot of the

8 assumptions might need to be adjusted --

9 MR. HUBER: They do.

10 MR. ADIN: Yes. So --

11 MR. HUBER: I agree with that.

12 MR. ADIN: It's hard for us to say --

13 MR. HUBER: Well, what I'm saying is,

14 Lucas, --

15 MR. ADIN: Right.

16 MR. HUBER: -- you don't need the hold

17 this to yourself. If you know what it is, tell

18 us. If you know what you believe it is --

19 MR. ADIN: We don't.

20 MS. WILLIAMS: We don't. We don't know

21 the answer yet.

22 MR. HUBER: So you don't know?
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1 MS. WILLIAMS: We can show some

2 preliminary results, but it's a very tiny part of

3 the picture. Right? It's just all we have right

4 now is LCC impacts to the consumer. It's based on

5 engineering costs that aren't finalized yet. It

6 doesn't address manufacturer impact analysis. It

7 doesn't address a whole bunch of things. So we'll

8 go through the LCC tomorrow, and we'll show it,

9 but it's probably not at a point where you want to

10 start like making decisions on it yet.

11 MS. WIDDER: And the other thing I'll

12 add to that just to sort of get us ready for

13 tomorrow is that, as has been presented earlier,

14 the construct of the metric actually has very

15 little impact on what standard is set and how you

16 compare to it. It's just the relative magnitude.

17 So if we could get that, sort of try to constrain

18 our metric discussion to just the metric when we

19 get there tomorrow and get some things settled on

20 that, I think that would be really helpful.

21 MR. BROOKMAN: Okay. So that was very

22 constructive. We gained ground in that exchange,
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1 very, very helpful. Maybe we should applaud right

2 now.

3 (Applause.)

4 MR. BROOKMAN: So queuing other things

5 for tomorrow, LCC analysis presentation, which

6 always adds some significant information. Lucas,

7 do you want to follow on? And then I would like

8 for us as a working group to have a sense of the

9 several things, the many things that lie ahead for

10 us to try and accomplish in the meetings we have

11 left because, as Lucas said at the outset, it may

12 be that we're going to need to have a webinar

13 every two weeks or a conference call in the

14 interim or maybe we need to establish backup dates

15 in August and September. I'm not sure where we're

16 going, but we need to realistically look. We have

17 been keeping our nose right at this grindstone, I

18 think. And right now I'm not envisioning how

19 we're going to get this done by the middle of

20 July. And maybe I'm wrong or maybe we can pick up

21 the pace.

22 But, Lucas, it seems like you want to
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1 say something.

2 MR. ADIN: Well, I was going to say --

3 MR. BROOKMAN: So rescue me here.

4 MR. ADIN: I'll try. No promises. But

5 it's maybe depending a little on how much progress

6 we make tomorrow, but, I mean, there is still a

7 lot of analysis to do.

8 And we have just got a bunch of new

9 data. We did get it. So thank you for that,

10 which we'll put to good use very soon. And we are

11 going to start distributing analysis to everyone

12 here on a more frequent basis, as Doug said. So

13 at each meeting from here on out, you know, we're

14 going to have a lot of substantive stuff to talk

15 about.

16 MR. BROOKMAN: And I think looking

17 ahead, in the consultation between a few of us

18 that are trying to structure this, I think we can

19 do a better job of making sure we come to each

20 meeting with a set of "Here is what we want to

21 accomplish."

22 MR. ADIN: Well --
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1 MR. BROOKMAN: We have mentioned that

2 previously.

3 MR. ADIN: And honestly what would help

4 us a lot is between meeting periods, if we could

5 get your feedback on what you think will be

6 helpful to you? I mean, you have heard a lot of

7 stuff. I mean, especially after today and

8 tomorrow's meeting after we present a lot of

9 substantive things that are relevant to making

10 decisions about the standard, I mean, you know, we

11 hope we will get feedback from you on what we have

12 presented, but we also are interested in feedback

13 on what you think should be next, I mean, what is

14 going to help, what you think will help us get

15 towards that goal.

16 MR. BROOKMAN: Yes. And I am curious

17 about the form of that because I think that you

18 told me, Lucas, that you sent out a query. You

19 invited comments. And, basically, you received

20 nothing back. So I'm wondering whether the form

21 of that worked or how -- I'm wondering how to

22 improve that.
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1 MR. ADIN: I mean, it was a pretty

2 general question. Maybe it was hard for those

3 here at the table to say for sure what would be

4 most helpful to them since --

5 MR. BROOKMAN: Tom Eckman?

6 MR. ADIN: -- we have only talked about

7 things like metric and scope so far.

8 MR. BROOKMAN: Yes.

9 MR. ECKMAN: Yes. I think from

10 experience in prior negotiations, if we have a

11 good sense of the lifecycle cost analysis results

12 laid side by side with the manufacturer impact,

13 then it's time for us to get together and talk

14 because no amount of analysis is going to figure

15 out what the actual forecast of either of those is

16 going to be long-term. We just have to figure out

17 the timeframe and where we can land. And until we

18 see what -- here is as far as the analysis can go,

19 but the rest is just theoretical because we have

20 no idea. There is no data about the future. It's

21 all forecast. So we will have data, but it will

22 not be a forecast of the future. It will be our
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1 assumptions.

2 MR. ADIN: Right. So we'll have some of

3 that tomorrow. We'll have some of the LCCs for

4 some of the product classes we're going to talk

5 about, preliminary, though, understanding that we

6 still need time to refine these based on whatever

7 input we're going to get.

8 MR. ECKMAN: But once you have a sense

9 of what those are, we've got to get our heads

10 together and talk about what the tolerance is and

11 the tradeoff between benefits and cost. And until

12 we know what the individual benefits to the

13 consumer are and what the costs of transition are

14 for the manufacturers, it's hard to get across the

15 table and look steely eyed at each other and say,

16 "Where are we going to land?"

17 MR. BROOKMAN: Yes?

18 MS. WILLIAMS: So this is Alison. Just

19 to follow up on that, our plan analytically is to

20 revise engineering and LCC following this meeting.

21 Hopefully we can have something interim for you

22 depending on how soon we get constructive feedback
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1 on revising those. Of course, we'll upload the

2 new data.

3 We're also hoping to have done for the

4 May 28th-29th meeting shipments, national impact

5 analysis, and MIA, so like none of the downstream

6 stuff, but probably most of the stuff that you

7 need to start thinking about the different levels.

8 So that is our goal for the May meeting.

9 PARTICIPANT: MIA?

10 MS. WILLIAMS: I'm sorry. Manufacturer

11 impact analysis. And, again, those will all be

12 preliminary. And we'll want feedback on those.

13 And maybe those will be revised before you want to

14 actually talk more about the levels. But we are

15 hoping to have the main set of preliminary results

16 ready for the next meeting.

17 MR. BROOKMAN: So, then, if all that

18 analysis is sent out prior to the next meeting, as

19 we hope, then maybe we could schedule something

20 that's organized to receive feedback.

21 MS. WILLIAMS: Yes. So, on that note, I

22 mean, we can hopefully do revised engineering and
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1 LCC at interim meetings. Honestly I have not

2 started NIA yet. So that is not going to happen

3 until the May meeting.

4 MR. BROOKMAN: Okay.

5 MS. WILLIAMS: Yes.

6 MR. BROOKMAN: So I guess maybe what

7 you're saying is we have additional time to

8 organize this. But I am thinking that if we have

9 good analysis and it's available, then what's to

10 stop us from getting on the telephone for an hour

11 or so and listening to a presentation on what is

12 there. And then individuals, members of the

13 Working Group, can respond, make their comments as

14 they wish, or caucuses can even meet to describe

15 what they found there.

16 Al, it seems like you want to say

17 something?

18 MR. HUBER: Well, I think one of the

19 things we could do tomorrow after you finish the

20 metric is go back through these assumptions that

21 we have been presented today, which we totally

22 disagree with and that also have a huge impact on
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1 what the outcome is. And if we could get

2 agreement on those, then she can go forward and do

3 her analysis. And we can move on. Otherwise,

4 we're going to be back in here. I'm telling you.

5 We're going to be back in here arguing with you

6 about this analysis because of the assumptions you

7 are making. So if we can get an agreement on

8 those elements that you have heard today that we

9 disagree with and try to get that worked out

10 tomorrow after we hopefully get our metric solved,

11 then I think you can move on a lot faster than

12 wait and have us argue about it after you have

13 done all of your work.

14 MR. ADIN: So let me revisit the whole

15 question about priorities for a moment. I mean,

16 metric is important. We have established that.

17 But, contrary to what I might have thought a week

18 ago or so, it sounds like getting questions like

19 those resolved regarding this analysis and the

20 assumptions are actually more important to the

21 outcome of this than getting the metric resolved

22 because we didn't do this analysis independently
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1 of the metric. We have already done a lot of it.

2 So we would really much prefer, I think, to get

3 some resolution on what these underlying

4 assumptions should be, even if that means we don't

5 get metric completely solved tomorrow.

6 MR. HUBER: Well, Al Huber, Patterson. I

7 honestly believe that as close as I think we are,

8 you could probably have the metric done in an hour

9 or so in the morning.

10 MR. BROOKMAN: That would be my hope and

11 expectation.

12 MR. HUBER: I mean, I really do, Lucas.

13 MR. BROOKMAN: I'd extend it to a full

14 hour and a half.

15 MR. HUBER: And I think to a formal

16 resolution. There weren't that many assumptions

17 up there that we disagreed with. And, again, I

18 think they've done an excellent job with this

19 presentation. I mean, really, there are just a

20 few assumptions we just don't agree with. And I

21 think we need to get agreement on them. And

22 there's no use having your consultant, you know,
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1 go through all of the calculations and all the

2 work and then have us come back and disagree and

3 then come up with something else so they can go

4 all the way back through it again.

5 MR. ADIN: Right.

6 MR. HUBER: I think we could do that

7 tomorrow also.

8 MR. ADIN: Okay. And that's all I

9 meant, is, you know, to ensure that we're making

10 productive use of the time --

11 MR. HUBER: Yes.

12 MR. ADIN: -- that we're together so

13 that the time when we're not at a meeting and

14 they're doing analysis, they're doing it on the

15 basis of things that you think are reasonable.

16 MR. HUBER: Yes. Yes. Okay.

17 MR. BROOKMAN: So, then, for tomorrow,

18 we'll start with metrics and hope to move through

19 that rapidly. And each caucus, to the extent that

20 it is beneficial, tonight can do a consultation

21 with your members, among your members. And then

22 we'll proceed. Well, we'll assess first thing in
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1 the morning the additional elements, but I like

2 going back to the assumptions part, as Al just

3 referenced.

4 It's now 5:00 o'clock. We covered a lot

5 of ground today, a lot of presentation again. I

6 think all of you are getting a pretty good sense

7 of the detailed analysis that lies ahead before

8 everybody has got the information they need to

9 actually negotiate surrounding the standard

10 levels.

11 Let's call it a day. We're going to

12 reconvene tomorrow at 8:00 a.m., not 9:00 a.m.,

13 8:00 a.m., I believe here in this room. Have a

14 nice evening. We accomplished a lot today,

15 looking forward to seeing you tomorrow.

16 (Whereupon, at 4:58 p.m.,

17 the Commercial and Industrial

18 Pumps Working Group was

19 recessed.)

20

21

22
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1 CERTIFICATE OF COURT REPORTER 

2 

3 I, CHAZ BENNETT, the reporter before whom the 

4 foregoing hearing was taken, do hereby certify 

5 that the witness whose testimony appears in the 

6 foregoing deposition was duly sworn by me; that 

7 the testimony of said witness was recorded by me 

8 and thereafter reduced to typewriting under my 

9 direction; that said deposition is a true record 

10 of the testimony given by said witness; that I am 

11 neither counsel for, related to, nor employed by 

12 any of the parties to the action in which this 

13 deposition was taken; and, further, that I am not 

--rzi: a re lat.l.ve o r empl oyee of a ny c b u nse! or at or ey 

15 employed by the parties hereto, nor financially or 

16 otherwise interested in the outcome of this 

17 action. 

18 

19 

20 

21 

22 

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1 CERTIFICATE OF TRANSCRIBER 

2 

3 I, SARAH VEACH, do hereby certify that this 

4 transcript was prepared from audio to the best of 

5 my ability. 

6 I am neither counsel for, nor party to this 

7 

8 

9 

10 

11 

12 

13 

I4 

15 

16 

17 

18 

19 

20 

21 

22 

action nor 

action. 

am I interested in the outcome of this 

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390 
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$

$1,000 333:6,16,22

334:2

$1,100 333:22

$1,383 262:16

$100 192:4 233:15

311:5,21

333:8,21 334:3

$12 264:2

$12.6 247:8 248:21

$124 333:10

$2 221:13

$2,000 259:2

262:22

$206,000 111:12

$207,000 111:12

$209,000 111:9

$221,000 136:19

$223,000 136:18

$230 147:18

$260,000 111:1

$3 325:6

$30 147:18

$44,000 122:14

$45 220:21 221:2

$46 147:21

$50 147:21

$500 333:6

$51,000 122:14

$59 233:17

$6 325:8

$68 233:16

$72,000 122:15

$900 263:1

+

+.1 340:1

0

002 53:4

1

1 81:11 273:16

365:14

1,000 106:19 107:6

150:16 302:17

1,200 157:1

1,300 32:20

1,500 32:19

36:9,15 106:1,19

107:1 333:17

1,700 32:21 36:9

1,800 33:8 57:3,12

80:12 256:13,21

257:13

258:10,21

1.1 49:14

1.2 367:1

1.24 333:4

1.3 367:1

1.34 273:1 274:8,9

1.5 257:16 259:1

333:3,14

1.6 116:13

1.6X 116:8

1.8 149:10

1.8X 116:18

1:40 209:12

10 28:9,12 40:4

48:11,15 57:5

158:7 187:9

190:7 201:17,20

217:6 248:4

275:15 321:22

323:7 366:11

10:00 81:21

10:40 81:21 82:2

100 51:19 59:1

62:13 68:3 69:17

126:12 158:8

159:6 225:20

227:14 228:7,13

229:12 232:3,4

234:6 261:12

285:3 311:10,16

336:21 337:21

351:3,6,9 356:13

365:15

100,000 58:6

212:19

1000 1:12

100-horsepower

111:1

104 311:6

109 247:14 311:6

11 27:18 39:18

116:4 233:17

249:13,18

110 50:17 51:20

52:3 59:1 62:13

64:8 336:21

340:3 351:14

356:11

112 248:6

12 231:9 233:15

308:19 309:4

12.6 249:9,20

12:27 192:8

12:40 208:22

120 259:18

123 182:7 201:21

126.86 80:14

13 262:20

130 133:15

134.5 294:2

139 276:11 294:2

13-horsepower

259:3

15 40:4 76:5 81:19

215:14 311:17

323:7

150 109:8 121:18

16 206:16 311:19

160,000 110:12

17 109:21

18 257:17

180 262:21

184 248:6

188,752 110:14

19 176:2

1-year 248:4

2

2 81:11 182:6

212:20 221:16

247:11 248:3

339:22

2,050 182:1,4

212:11

2,500 106:19,20

354:8

2.2 262:20,22

2.4 122:2,10,17

20 187:10 199:21

208:4 215:14

246:8 277:9

300:19,20
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345:22 346:1

351:14 354:2

20.3 105:7 219:17

200 105:16 109:8

121:18 122:15

200,000 159:3

192:2

2012 169:6 237:19

248:5

2014 1:15 5:6

205 190:9 201:20

20585 1:13

20-second 6:16

23 225:11 231:18

24 334:3

24/7 178:14

25 48:11,15 81:20

136:14 182:14

201:17 217:6

339:22

356:12,14

250 182:4,5

256 202:1

268,203 110:15

280,000 110:13

287 264:16

28th-29th 383:4

29 1:15

29th 5:5

2-D 32:12

2-pole 267:3

2-pole/4 228:18

231:15

3

3 81:11 152:2

220:5 221:16

3,500 354:9

3,600 267:2

3.2 220:5

3:00 296:5

3:30 296:5

30 133:19 134:7,17

135:1,3,19,21

184:13 248:5

275:16 294:19

303:9 308:14

309:10 313:8,13

319:21 321:21

300,000 159:3

30-pump 199:22

30-year 309:13

328 183:11,13

188:1

33 209:4,6

34 226:20 228:16

35 231:12 233:16

38 310:19

3-D 36:17 38:12

56:18

4

4 81:11 336:20

4:45 323:9 335:3

358:5

4:58 388:16

40 28:10,13 48:15

57:5 103:2 109:8

115:19 119:6

122:18 123:3

135:6 139:7

141:5 144:16

145:18,19

149:21 151:15

152:3 160:19

170:4 172:13

176:19

180:14,16

181:18

182:14,16

184:13 187:21

191:22 201:18

202:4,5 217:7

232:10 233:18

281:11 294:19

308:17,21,22

366:11

400 221:2

40-50 283:20

42 231:5 233:14

45 137:4,7 147:4,6

46 224:21 230:19

465 219:9

46and 231:12

492 191:20

4-pole 267:3

5

5 40:3 48:11 81:11

262:20 263:22

311:16 323:7

5.6 247:11

5:00 71:20 296:6

388:4

50 30:18 56:13

57:22 110:17

116:12 119:6

122:14

157:17,18 159:6

182:15 184:13

187:9,10,21

201:18 202:2,4

213:16 214:18

226:3,8 237:19

300:20 334:2

336:20 346:14

351:10

50,000 58:7

50,800 123:2

50/50 161:22

500 105:16

512 202:1

54 225:2,5 230:19

231:4

55 48:16 103:4

201:18

56 247:13

58 248:6 250:8

281:12 288:19

59 230:1 232:7,10

6

6 81:11

6.0 214:5,7

6.5 214:8

60 122:4,16 123:2

135:6 141:3

152:8 158:6,11

169:18 170:17

171:8 172:15

175:13 179:6,7

181:17,18

182:7,14 184:13

189:4,21 190:9

202:4 209:2

213:16 242:18

271:3

60/40 140:17

144:3,15 145:17

600 221:3

677 311:17

68 230:3 232:6,9
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7

7 135:22 136:1

175:19 218:16

7.4 214:1

70 48:16 57:6

119:6 149:20,22

150:6 151:15

152:3 158:12

160:19 170:6

261:13 271:4

293:5 303:6

70-80 161:8

74 273:17

75 49:14 50:16

51:20 52:3,14

53:22 58:22

62:12,15 64:8

227:5 228:7

232:15,17,19,21

233:12 234:9

239:3 246:18

262:20,21

336:20 340:3

351:6,10

77 231:4

782 311:17

8

8 215:14

8.2 247:12

8:00 388:12,13

80 30:17 116:12

119:6

82 182:8 271:3,20

820 183:11

84 271:20

85 48:16 117:20

341:11,13

87 328:16

9

9 249:9,17,19

9:00 388:12

9:11 1:16

90 183:13

93 260:13,16

94 246:9,19

947 52:2,9 53:20

80:21

95 261:4,5 293:1

96 366:1

98 365:14,18

985 52:4,9 80:21

99 369:14

A

a.m 1:16

388:12,13

ABB 2:7 8:8

abbreviated 134:5

ability 298:3

299:5,18 300:6

390:5

able 16:13 27:13

31:9 38:11

61:2,6,16 76:14

79:5 88:15 95:20

117:5 147:7,9

157:6 167:15

191:10 195:13

197:10 206:21

213:2 214:11

241:12,15

269:22 282:7

290:8

absolute 152:16

absolutely 292:6

abstract 45:14

acceptable 302:9

access 348:20

accomplish 323:9

358:8 361:8,13

371:21 378:10

379:21

accomplished

388:14

according 80:3

117:19 218:18

246:11

260:13,18

274:16

account

69:10,11,12

78:15 87:11 88:6

116:16,18

126:17 127:15

133:9 185:19

223:12 228:10

233:1 249:2,4

260:10,21 267:4

269:19 338:21

347:19

accountant 332:16

accounted 96:11

accounting 223:2

226:20 227:3

372:18

accounts 342:7

accurately 341:4

361:17

accustomed

224:15

achieve 87:20

319:20

361:15,16

362:19

achieves 344:17

across 59:11 61:16

125:20 153:4

182:12 204:16

214:3 219:9

220:11

221:7,12,20

246:10

255:13,15

273:15

274:11,17

280:14 303:18

351:17

356:20,22

365:5,6,13

382:14

across-the-board

344:15

act 261:16 296:16

action 389:12,17

390:7,8

actions 215:16

active 313:16

activity 173:16

actual 19:13 24:2

45:16 103:2

110:3 132:11

181:16 259:15

260:1 264:2

265:3

335:8,11,15

339:3 348:15,17

350:8 381:15

actually 16:4

22:13 34:14 36:8

46:2,3 55:13

60:22 61:4 70:8

74:10 99:15

106:21 107:1

108:5,11 120:18
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124:10 129:15

142:16 144:19

151:22 169:4

175:17 177:3

191:4 206:15

214:17 216:22

217:11 218:6,20

227:2 228:8

256:7 264:18

266:15 271:18

272:20 297:7

298:20 299:16

307:5 311:18

329:13 331:22

345:11 349:4

355:5 357:12

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244:9 245:4,22

248:14

253:16,18,22

271:15 278:13

279:12 280:9,22

284:13

286:3,5,16

289:21 291:8

292:8 295:3,8,10

296:1,4,11 301:6

304:2,19 305:14

308:15,21

309:5,8 310:18

314:9 317:13

318:20 319:6,17

320:3,6 321:7

323:6 326:20

329:4,20 330:4

331:7,11,15

333:12 334:4,21

336:11 338:1

340:22 342:2

343:10 344:7

345:2,16

346:5,21

348:9,12

353:3,10,19

355:17 356:17

357:21 358:1,4

359:18 360:1,19

361:1 363:4,9,11

372:3 375:4

377:21 378:4

379:3,16

380:1,16 381:5,8

382:17 383:17

384:4,6

386:10,13

387:17

brought 47:4

98:13 102:2

129:17 184:21

214:15 269:3

303:5

bucket 232:2,5

buckets 261:22

263:3 276:8

354:22

build 117:17

building 1:11 5:7

164:16 222:2

247:15 327:18

341:7 350:12

buildings 354:7

builds 76:6

built 62:7 164:11

192:19 285:17

bulk 176:16

215:15 218:6

325:20 330:22

bullet 111:20

114:5 329:8

bullets 173:20

bump 338:18

bunch 162:4

178:20 377:7

379:8

burden 119:18

133:10

business 169:3

171:14 190:20

280:11,15

281:17

285:14,18

308:16 325:15

327:16

330:11,13

332:4,15 334:19

businesses 332:8,9

buy 123:18,20

127:9 159:6

164:15,16

165:16 256:17

288:3,8 317:9,15

319:3,4

320:11,22 325:6

339:5 343:19

buyers

320:1,11,20

buy-in 165:18

buying 169:5

334:10

buys 327:12

C

calculate 54:13

56:8 79:19 80:3

81:2 259:11

335:21 362:9,13

calculated 54:10

56:1 81:4 261:5

337:7 371:15

calculation 60:18

81:8 192:1

333:11 335:6,15

336:3,6,8 342:14

calculations 17:7

324:5 387:1

calculator 79:18

80:5 81:9

California 3:3

5:20,22 6:1

Callie 4:3 8:19

204:12

canonical 350:22

capable 30:2

capacity 21:22

capital 1:20

109:17

285:14,16

286:20

Cappellino 2:13

6:2 34:7,8,14,20

58:10,11 59:14

60:2,4 65:22

66:1,8

106:9,10,15,18

118:4,10,14,20

125:2,3 148:2,12

190:17,18
Capital Reporting Company

Commercal and Industrial Pumps Working Group 04-29-2014

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248:14,15,19

249:16,17,21

251:11,14,19,22

252:4

265:12,16,19

266:2,5,8,12

271:15,17

272:2,4,9,12

284:13,14,19,22

285:5,12 308:5,9

309:7,8,9,15,20

310:1,5 336:12

355:18

356:3,5,14

capture 363:16

captured 314:10

carbohydrates

209:11

care 304:1

careful 65:5

143:14 160:8

173:6 178:22

285:7

cares 303:16

Carlson 2:14 8:6

237:9,12,22

238:9,15,19

239:4,9,18

carried 114:1

144:15 258:19

carry 144:14

210:10

carrying 176:22

269:8,9

Carter 308:18

case 2:16 6:4 27:7

65:6 104:9 113:4

119:8 127:14

137:18,19

138:5,7,12,16,18

,20 139:1 157:2

158:4 166:3,4,7

171:6,9,10,11

193:3

195:8,9,12,19

201:15 224:8

254:5,6

297:14,21 299:6

306:20 314:13

316:19 344:12

351:14 352:7,8

369:16,17,18

370:1,3 371:16

cases 13:20 44:21

118:14 125:17

159:14 285:9

341:19 369:2

cash 250:5 281:14

286:14

casing 330:22

casings 128:15

131:18

cast 98:5,11,14,15

99:1,2 105:17,19

122:20,22

125:5,6,10

127:8,9

128:12,21,22

131:1 133:2

142:3,4

155:20,21

156:5,11,13,14,2

2 158:12,13

211:21,22

213:13,14 214:9

312:13

casting

89:17,18,19 97:6

98:3,12 120:10

121:10,12,19

122:2,3,9,16,17

123:1,8,9,11,12

124:9,12,16,19,2

0 125:11,16

126:15

127:6,11,14

128:11,14

129:1,18,20

131:2,5,6

133:14,17,18

134:2 135:6,7

136:11

139:14,18,19

140:3,6 141:4,6

142:4,12,17

143:4

144:7,10,18

149:6,22

150:7,15 154:7

155:20 156:8,9

158:1,3,9

212:4,5

213:13,14,17,21

215:19 247:11

castings 123:15,20

126:10,12

140:18 165:22

185:5

casts 141:3

catalog 113:10,11

catch 266:17

categories 121:17

229:18 232:2

categorized

121:16

category 111:21

211:19 214:2

232:1 233:14

caucus 46:20

47:15 189:13,16

192:17 360:6

387:19

caucuses 77:21

384:14

cause 217:6 276:2

caused 294:7

caution 287:8

census 332:4

centered 276:10

centers 356:20

certain 22:17 65:2

95:20 96:2

107:11,20

117:9,10 159:21

160:21 161:22

170:13 177:20

178:16,17

191:14 243:20

267:17 268:15

271:21 272:8

280:2 281:5

292:6 316:13

318:8

certainly 23:5,16

70:5 73:10

167:15 207:19

243:22 316:1

346:15

certainty 293:3

CERTIFICATE

389:1 390:1

certify 165:10

389:4 390:3

cetera 97:10 114:3

204:17

C-factor 31:3 38:1

chain 172:22

298:4 326:15

challenge 202:9

289:11 304:11

challenging

196:19
Capital Reporting Company

Commercal and Industrial Pumps Working Group 04-29-2014

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chance 82:7 168:3

194:7 240:9

change 44:3

46:12,15 51:11

53:11 63:1,5

67:17,22 68:5

78:19 97:6 98:3

112:3 121:9

130:22 154:20

156:8 158:1

165:13 213:3,5

214:19

217:20,21

220:10 239:8,11

240:11 247:10

248:9,10 257:8

266:16 268:7

269:6 270:21

281:19,22

284:5,6 291:16

297:20

299:14,21 325:4

326:7 330:2

342:7,15 351:2

354:13 372:11

changed 49:17

51:1 60:12 154:6

158:3

changes 35:16

63:2 85:16 97:9

100:22 215:18

244:5,12,15,18

245:2 313:12

322:12

channel 326:13

328:13 329:7,17

channels

325:14,18 328:6

330:2,15 331:3

character 341:16

characteristics

46:8 80:8

characterization

348:4

characterize 116:2

335:10

charge 129:1

307:1

CHARLES 2:13

3:21

Charlie 6:2 34:7,8

35:5 58:10,11

59:14 64:18

65:22 66:1 67:2

86:8 93:15

106:9,10

118:3,22

125:2,3,19

126:18,19

148:1,2 160:18

190:17,18

227:13 234:16

248:14,15

249:16 251:11

265:11,12

271:15

284:13,14 285:3

303:3 308:5

309:8,9

336:11,12

355:17,18

Charlie's 250:15

chart 33:1,5 86:20

105:6,8,12

108:9,10,13

110:5 136:8,10

139:5 151:21

155:7 163:1

177:7 183:4,5

219:16,17

247:2,4

262:11,13,17

263:7 274:5

277:2,15 281:21

282:2 284:16

292:14 351:11

charts 134:4

151:19 218:10

275:12 292:17

Chaz 1:19

389:3,20

cheap 277:2,12

cheaper 276:11

277:7

check 73:1 76:8,10

106:22 295:21

302:8

chemical 173:1

283:15

chemicals 93:22

cherry-picking

68:2

chlorines 93:21

choice 374:18

choices 153:8

choose

48:1,5,20,21

50:10 78:9 87:15

132:21 137:9

150:12,18

153:16,17

157:15 168:21

238:12

choosing 162:12

chose 217:8

256:10

chosen 102:9

162:14 339:21

Chris 88:6 253:2

296:13,15

305:14

314:11,16

321:14

Christopher 3:11

7:15

Chuck 25:10,11

86:9,10 87:9

93:15,17

99:19,20 107:9

108:3 111:19

120:6,17 121:8

131:8,9 143:5,19

158:16,19

160:21

161:12,18 162:6

164:7,14 165:7

166:2 171:21

172:7,9,14

173:22 177:18

183:3,16 184:17

186:11 187:4

191:16 201:13

202:3 204:3

206:7 216:4,5

234:15 236:8

239:19 250:7

282:21 287:11

301:22 310:18

315:6 318:22

319:6 330:5,6

331:8 343:10

chunk 157:11

162:16

circle 155:9

circumstance

292:3

clarification 77:21

clarified 47:16

clarify 21:20 38:15

44:11 104:21

clarifying 129:16

144:5 347:17

clarity 213:1

class 27:6 28:14

31:5 39:22
Capital Reporting Company

Commercal and Industrial Pumps Working Group 04-29-2014

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40:5,8 42:14

48:10,17,19,22

49:2 71:4 111:5

136:16 153:6,15

220:14 222:7

255:14,15

classes 16:10

33:20 42:5,8

71:15 74:1,5

109:9,13 136:13

140:12 182:6

247:12 248:2,4

307:7,20 382:4

clean 34:11,17

35:4 92:11,13

cleaning 128:10

129:20

clear 28:5 30:20

44:16 72:16

118:8 130:19

174:13 196:10

225:19 266:13

267:12 296:19

298:5 323:8

352:19

clearance 94:8

clearances 89:9

90:5,6

91:9,10,12,13

clearer 47:5 51:2

251:20 339:13

clearly 10:10

194:10 245:7

252:13

close 32:21 35:11

53:4 74:3 80:11

99:20 125:22

138:5 140:15

154:16 157:8

160:5 181:19

214:12 216:7

223:4 226:5

231:6 264:3

293:4 307:4

339:18 343:21

362:11 364:14

365:19 367:16

368:1,4 375:10

386:7

close-couple 33:8

57:3 71:7 74:13

109:10 111:8

212:12 214:7

223:16 226:14

227:8 228:17

229:22 230:9,15

231:14 307:21

close-couple/end

292:19

closed 296:8

cloud 38:20 39:4

cluster 209:10

cluttered 229:21

coat 89:22

coating 92:8

coatings 92:10

coefficient 94:13

coffee 82:2 296:7

325:6,7,8

coincident 339:18

Coke 296:6

cold 296:19

colleague 323:11

colleagues 82:8

collected 57:17

147:8 254:19

259:9 260:3

colluded 287:6

color 134:12

colored 33:13

37:14

column 113:13,16

columns 112:21

113:13 149:9

combination 303:8

313:11

combinations

91:20

combine 128:19

combined 33:9

224:16

comers 179:7

comes 68:20 88:8

101:17 221:10

229:20 237:18

251:3 266:19

290:12

comfortable

316:12

coming 13:8 16:21

25:3 47:16 72:12

86:10 95:19

108:4 192:21

227:18 245:11

250:6 253:10

265:7 274:10

278:3 293:9

305:2 315:4

316:8 359:1

375:10,21 376:1

commensurate

292:2

commensurately

144:20

comment 20:19

34:9 64:21 67:3

93:15 106:11

127:3 162:7,8

197:6 285:13

319:18,19

320:8,14 326:10

346:6,21 347:2

348:8 354:14

comments 9:8

20:20 24:14

76:14,20 78:1

197:11 210:2

278:12 295:4

353:3 371:10

380:19 384:13

commercial 1:7

5:4 90:20 91:3

350:12 352:6

388:17

commission

327:11

COMMITTEE

1:6

common 107:6

131:22 168:22

208:6 215:13

228:17

329:8,12,17

commonly 93:14

communicate

344:2

communication

240:10 241:5

companies 87:1

119:22 167:2

202:13,17

250:14 282:22

285:20 287:16

288:17 311:11

313:10 319:8

company 1:20

2:12 6:1 8:12

66:9,17 87:6

169:7 173:15

183:10

compare 29:11
Capital Reporting Company

Commercal and Industrial Pumps Working Group 04-29-2014

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www.CapitalReportingCompany.com © 2014

58:12 59:6 76:3

81:3 128:4 195:4

216:19 244:19

250:4 273:8

316:15 354:15

362:15 363:19

368:5,20,22

377:16

compared 29:14

54:9 176:11

263:19 270:6

372:21 373:1

compares 28:7,16

54:16

comparing 79:15

comparison 92:17

198:17

comparisons

354:18

compelling 201:16

competition

283:18 284:7

292:1 302:1,6

304:17 319:22

competitive 171:4

236:11 284:11

291:21 334:14

competitiveness

236:13

competitor 301:10

304:5,6

compilation

204:21

compiled 349:8

complement 201:5

complete 71:12

79:3 115:20

207:12 331:13

351:2 360:11

completely 34:22

46:6 179:3

195:19 221:17

344:20 359:8

386:5

complex 14:17

32:9 245:7

257:22

complexity 252:19

compliance 91:4

281:9

compliant 304:7

complicated 11:13

28:18 29:16

109:1 196:3,4

229:8 326:22

335:17

complication

294:7 324:21

complications

164:21 331:20

compliment

196:22

component 104:1

125:5,6 325:9

352:1

components 245:8

268:11

composite 99:21

100:2 131:16,18

132:6 133:16

computational

252:19

conceptually

363:9,10 372:6

concern 321:11

concerned 63:13

243:5 287:12

347:3 349:18

concerning 335:18

concerns 70:6 92:9

322:3

conclude 133:6

concluded 29:1

52:18 83:11

concludes 70:21

conclusion

133:13,14

215:19 221:20

229:13 277:14

278:8

conclusions 89:13

205:1 212:10

279:16

concrete 13:22

27:16

condition 368:6,8

conditions 335:11

conducted 109:5

349:3

conference 378:13

confidential 56:14

confidentiality

57:17 197:19

254:19

configure 288:19

confirm 279:13

confuse 370:7

confused 30:6

141:8 298:18

370:12

confusing 45:1

135:4

conjecture 286:1

consensus 23:15

93:1 102:7

104:12 115:8

116:18 145:22

371:17

consequences

373:11

conservation 2:21

5:18 80:6

consider 19:17

22:1 23:11,14,16

88:15 90:19

159:1 173:10

186:15 298:13

304:21 312:13

313:5 326:14

337:15 345:4

372:9,17 373:19

considerable

360:13

consideration 27:6

234:16,18

289:19 341:15

considerations

100:9

considered 142:11

143:21 307:16

316:1 348:2,3

considering 14:5

45:17 140:2

337:4 347:5

consistency 66:21

consistent 213:15

280:13 336:4,9

353:17

consolidate 237:15

consolidated

282:15

consolidating

282:15

consolidation

313:10
Capital Reporting Company

Commercal and Industrial Pumps Working Group 04-29-2014

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constant 39:21

274:12

constrain 377:17

construct 377:14

constructed

371:15

construction 271:3

327:17,18

constructive 374:9

377:22 382:22

constructs 46:13

consult 82:8

consultant 353:21

354:16 355:1

363:2 386:22

consultants

119:21 283:1,11

consultation 77:16

379:17 387:20

consultations 11:1

consulting 7:16

8:20 10:13

consumer 91:6,14

297:8 318:15

322:14 336:4

344:16 368:19

369:1 370:7

373:18 374:11

377:4 382:13

consumers 159:6

291:1,3 316:17

337:9 344:14

361:20

consumption

336:1 337:3

348:16 355:14

Cont 3:1,2 4:1,2

contain 354:22

contained

294:17,19

containment 93:19

contains 349:9

content 210:8,10

296:12

contention 23:15

47:7 48:4 176:20

context 13:21

14:16 15:3

323:20

continually 208:15

continue 10:8

17:15 47:10

54:7,12 73:21

117:11 180:1

188:5 210:6

218:1 246:2

336:9

continues 117:17

continuing 55:9

274:21

continuous 36:20

contracting 332:9

contractor

327:2,4,7,8,13,1

6,20,21 328:16

329:10

contractor/end

328:11

contractors

289:13 326:3

contrary 46:20

385:17

contributes 341:22

control 319:11

364:7 365:13,15

366:18 367:4

369:9

controlled 68:18

368:7 369:11,17

370:1,3

controls 44:8,13

363:17

conversation

297:8 360:9

conversations 10:8

47:12

converse 218:20

conversion 85:14

109:6 139:20

222:1,10 246:22

247:3,8,19

248:22

251:12,15

252:13,20,21

278:17,21 279:5

281:8,13 286:11

290:4,15 291:20

298:1 299:1,7

300:18 301:19

303:8

306:3,8,13,15

307:2 308:2

310:7 322:1

341:14

conviction 302:3

convince 311:15

317:1

convinced 350:13

cooling 354:7

cope 120:11

copies 25:1,13,14

206:22 207:7

314:15,20

copper 287:1

copy 195:11

206:22

copying 67:14

corporate 159:2

Corporation

2:13,15 3:22 6:3

8:7 237:10

correct 17:6

35:2,19 38:2

42:11 59:20 60:7

82:15 105:2

108:4 129:6

139:8 144:4

174:3 179:3

203:20 214:6

266:7 284:18,21

285:3

correctly 35:14

42:17 280:10

319:19

corrects 262:9

correlate 110:20

correlates 270:5

correlation 107:19

183:8 270:12

273:10 275:4

352:14

cost 16:1,8,22

40:16 75:2,4

78:14,17

85:4,10,11,14,19

87:20,21

102:18,20 104:8

110:6,7,8,11,22

111:6,9

114:9,16,22

115:1,2,4,5,6,7,1

9,20

116:5,8,12,19

120:13 121:2

122:17,19,20,22

123:8,10,17,18
Capital Reporting Company

Commercal and Industrial Pumps Working Group 04-29-2014

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124:2,3,4

125:15,16

126:17,19

130:10,12,22

131:5 132:7,22

134:6

135:3,10,22

136:5,6,7,13,17,

18 137:4,5,7,14

139:6,9,11 140:1

141:16

144:6,9,13

145:17

146:10,12

147:2,3,4,17,19

148:3,17

150:14,17

153:3,9 156:20

162:9,14 184:20

185:21 186:6

220:10,16,19,20

221:5,20

222:10,12,15,19,

20 223:2,8,10

225:20 226:1,18

227:5 229:16

230:11,18,22

231:6,13,15

232:2,4,6,7,20,2

2 234:7

236:15,20 238:7

239:7,17 246:15

247:9

251:8,15,16

254:8,10

255:13,22

256:5,14,16

258:6,9

259:10,15

260:1,2,9,18

261:5,6,8,21

262:18

264:3,17,19

265:2,3,20

266:5,18 267:20

268:1,7 271:2,5

272:2,14,19,21

273:2,4,7,14

274:22

275:14,17

276:6,14 277:6

278:16,19,21

279:1,4,20 281:8

284:19

285:6,12,14,17

286:11 288:4,18

290:21,22

291:20 292:5

293:9 299:11,17

300:2 301:9

304:16

306:3,8,13,19,20

,21 307:17,19

311:6 316:3

320:17 321:13

324:16 332:6,12

333:22 334:18

345:21 347:20

348:2 381:11

382:11

cost-effective

142:13

cost-efficiency

101:4 268:2,4

270:3,9 275:10

278:9 292:15

costing 239:3

cost-justified

376:4

costly 185:11

costs 16:2 75:4

78:15,16 86:19

101:7 108:22

109:3,6,8,10,16,

18 110:1,2,3

111:1,16 112:1

113:1,2,7,13,15

114:17

115:18,21 116:6

117:2 119:19

121:11,16,19,21

122:2,7,17,18

123:17,20

124:20 125:1

128:13 129:17

130:7,20 132:7

133:19 134:5

136:1,10,17

137:11,12,20,21

138:21

139:14,20 141:9

144:8,20 146:7

147:7 148:16,17

149:1,2,3,4,5

169:13 181:6

185:3,18,19,20

186:2,5 187:1

205:22 220:13

222:1,8,11

223:9,12 224:6

225:2,15,17

226:3 227:4

229:14 230:4

232:1,3 233:1

236:8,9 239:13

240:19,20

246:10,18,22

247:3,7,19

248:1,22 249:6

250:3

252:13,14,16,20,

21 253:9,10

255:9 256:14

258:14 259:1,2,8

260:5 261:1

262:3,8 265:8,10

266:20 277:8

279:10 281:13

286:20 288:14

290:4,16 291:22

292:20 293:4,6

297:17

298:1,3,8,9,21

299:7,19

300:7,13,18

301:19 306:15

307:2 308:2

315:12 316:13

322:1,13 331:19

332:7,20,21

333:6,22 355:16

377:5 382:13

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246:16

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7:17 323:12,15

327:6,14,22

328:3,18,21

329:18 331:16

333:14

334:12,22

336:14

337:16,19

338:8,17,20

342:1,9,12,17,19

343:1,4,8

345:12,17

346:10,13,18

347:11 348:14

352:11,16,18

353:4,15,18,20

356:2,4,9,16

357:22 358:3

Council 2:21 4:11

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389:11,14 390:6

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191:4

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101:21

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292:9 293:5

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70:11 104:1

117:22 145:19

174:17 175:4,7

208:8,10 211:21

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98:11 103:11

122:4 123:14

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65:4,16 69:17

110:21 152:13

161:2 263:1

264:6 272:20

274:9,21 278:4

293:16,21

294:9,10,14

337:8 342:10,14

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113:8,9,11

159:12 164:6

177:16 235:6

254:10 260:20

266:11 272:7

287:17 317:8

319:3 341:17

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178:6 291:12

300:7 302:7,11

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36:4 39:14

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33:15,16,17 34:2

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39:9,10 40:6,7

43:15 51:10

54:3,8,14,19

55:12,14 56:8,21

57:4 58:17,20

60:14 80:14

151:19,20 176:4

275:7,8,13,22

276:1,10 294:1

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41:2 49:1,9

55:10

58:12,16,18,19

59:8 60:7,11,12

71:3 74:6,11,21

79:17 151:22

152:14,15

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D.C 1:13 5:6

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6:9,12 7:21

24:19 25:20 39:8

44:9 46:2,17

47:19 52:8 66:2

76:1 77:13,16,22

82:11 96:14

106:11 107:9

111:18 118:5

120:21 131:7

134:11,15 143:6

144:4 158:17

165:16 166:4,17

167:11 172:1,6

177:5 179:11

181:14 183:3

191:16 192:19

196:1,15 205:11

207:13 209:1,19

210:7 216:4,13

234:13 239:21

240:1 242:7,14

245:19 248:16

250:7 265:13

270:15 283:2

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297:13,15 298:1

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287:14 289:5

312:20

darker 134:12

data 16:12,15 17:6

32:18,20 33:10

35:16 36:21

57:13,15,16,19

58:2,4,5,6 62:20

70:12
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72:18 83:21

84:14 107:20

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190:16 191:17

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193:21 196:16

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243:11,15,16

245:3 246:11

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258:5,6,9,22

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261:14,16 262:7

263:7 264:6

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275:22 276:9

277:14,22 278:4

290:11 292:21

294:21 326:5,8

332:4,6,7

348:20,22

349:9,15,21

350:7,10 356:18

357:6,13,15,18

379:9 381:20,21

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database 53:1

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110:17 131:21

140:22 151:6,7

153:14

155:11,12

157:10 168:20

169:4 212:22

223:7,14

224:12,20

225:14 259:15

260:7 261:20

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300:10

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day 71:6 74:1

86:19 159:14

164:11,12

178:11 243:3

288:22 295:18

302:20 323:7

376:1 388:11

days 10:10,22 11:3

18:4,14

dead 145:7,9

284:15

deal 199:16 230:7

260:15 328:22

dealing 6:21 26:7

60:16,17 88:8

133:1

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dealt 66:13

decays 87:22

decide 18:4,5 74:9

154:22 180:18

184:1 188:13

369:1,3 370:16

decided 14:21

49:7,15 103:17

162:15,18

293:14 316:3

350:4

deciding 19:4

174:3

decimal 305:19

decimals 138:17

decision 14:1

27:14 169:3

171:18 199:8,10

200:10 361:21

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88:12

decisions 23:6

94:20 151:6

167:16 188:12

377:10 380:10

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dedicated 281:13

Defense 4:11 7:10

define 31:14 37:13

48:3 50:22 78:16

103:10 175:9

332:20

defined 29:3,8

50:4 105:10

224:17 350:18

defining 28:19

272:7 304:22

definitely 62:17

67:3 87:9 168:15

278:7 296:2

348:10

definition 94:21

156:21 182:5

definitive 243:20

degree 164:17

Delaney 2:19

6:9,14,17 7:4

delayed 75:16

delays 5:12

deliver 159:12

demanded 91:14

demonstrating

370:3

denominator

366:9,13,22

367:10

department 1:2,10

210:1 280:20

312:6 349:3

depend 297:22

339:2

depending 35:17

37:22 38:5 48:20

63:11 125:13

285:16 305:9

331:4 379:5

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depends 18:3 21:8

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deposition

389:6,9,13
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derived 253:9

describe 76:2

176:3 255:22

256:2 384:14

described 26:22

80:4 360:8

describes 256:22

describing 78:3

360:4 363:5

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65:3,8,19 84:16

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89:9,14 90:1,3

91:22

96:16,18,22

97:3,17,18

98:1,22 99:16

108:19 112:22

115:5,7,18 116:9

117:14,15

124:12 150:19

152:21 153:2,12

154:21 162:12

227:18 231:3,7,8

235:11 249:3

268:13,19,20,21

269:17,21 271:3

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designation 227:2

designed 34:22

177:20 268:14

designing 117:6

designs 231:1

283:20 300:12

desired 345:8

detail 32:5 51:17

79:14 80:2 84:18

85:20 86:18

88:18 95:16

97:15 99:14

100:11 119:3

120:18 121:1

147:11,14

155:16 159:20

195:7 264:13

332:20 339:13

360:7 363:5

detailed 9:8 11:13

83:7 97:2 155:7

209:20,22

254:13 295:4

388:7

details 89:14

145:22 224:7

335:16

determine 27:2

28:15 39:13

40:16 49:1,9

55:12 59:18

78:11 80:7

85:2,3 100:22

154:15 347:14

350:8

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137:4 157:1

158:2

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341:6

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101:13,17

268:20

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272:14 277:22

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87:20 88:1

devices 12:11

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dictate 317:8

dictated 285:9,13

dictation 87:5

die 89:18 97:9

98:14 128:12,21

156:5 212:4

213:14

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difference

58:17,19 64:1

66:5,15 92:18

110:13 112:15

134:8 135:10

163:11 271:20

274:1 278:18

344:11 373:10

differences 28:20

30:3 119:4 353:7

different 27:7

28:21 30:20,21

33:20,22 34:5

35:1 40:8

43:11,17 46:6,8

48:20 50:5 58:16

60:6,7,11,14,16,

17,18 63:15,16

66:12 69:5,9

87:1,2,7 95:3

109:19 112:2

122:10 126:13

145:16,19

169:17 194:12

200:11 205:20

224:2,3 226:12

227:2 229:18

238:11,12,18

239:14 245:15

255:14 258:14

265:9 266:20

272:5 274:18

275:13

293:17,19

298:19 307:4,16

312:17 313:3

323:21 324:9

326:16 331:8

332:7 339:7

344:19,22 350:1

352:5,10,12,21

354:5 369:19,22

383:7

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101:19

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69:16 245:16

Differing 101:18

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61:13 69:10

244:16,21

282:20 298:12

357:12

difficulty 354:21

dig 289:2

digest 17:18

206:19

dimensions 315:22

diminishing 185:4

direct 101:8

123:16 144:8

153:13,21

169:14 323:13

326:1

direction 33:22

130:14 373:20

389:9

directly 54:3 58:5

91:10

disagree 384:22

385:9 387:2

disagreed 386:17

disagreements
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discharge 112:19

discount 321:22

discounting

239:13

discrete 261:22

discuss 14:3 47:18

49:8 83:6 102:1

170:1,7 180:2

251:3 253:7

255:12 269:4

279:8 280:16

358:10

discussed 43:3

46:6 48:13 49:6

50:11 81:1 89:5

101:6 115:12

116:14 138:10

149:3,10 166:5

169:16 170:2

202:4 211:21

212:2

213:13,16,18

214:8 225:16

232:20 268:18

372:14

discusses 105:7

discussing 46:8,13

92:22 130:9

228:10 291:10

367:20 369:21

discussion 15:1

34:16 44:6 45:6

46:22 47:9 48:14

53:8 54:11 67:5

68:16 69:12

70:22 158:10

177:11 180:6

182:18 192:11

202:5 207:12

209:13 210:14

222:14 239:22

249:5 278:8

285:8 297:14,16

312:7 314:14

355:15 358:9

369:20

371:9,11,18

377:18

discussions 18:8

43:7 59:22 69:8

70:13 88:9

114:21 119:8

122:6 142:15

146:1 157:2

169:2 211:15

228:13 297:6

322:10

disproportionate

133:10

distraction 76:5

distribute

73:12,13 351:16

distributed 290:16

322:1

distributing

379:11

distribution

151:5,8 153:22

200:5 211:7

217:15,17

237:13,17

238:5,6 294:15

325:14,18

326:13,15 328:5

330:2 331:7

332:8,15 339:22

341:7,8 348:18

350:8 352:4

353:22

distributions

157:9 211:10

239:8 349:22

distributor 164:15

302:5 323:1

325:19

327:8,12,19

328:10 329:9,17

333:16 334:1

diversity 357:4

divide 221:8 248:2

256:4 259:13

265:4 306:17

311:16 366:22

divided 49:21

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249:20 265:13

274:9 298:17,21

306:21 355:12

document 41:10

108:17

DOE 2:6 3:10

7:11,13 14:9

23:3,4 27:4

64:20 90:19,21

186:10 255:4

286:7 287:8

297:2,16 320:10

334:15 347:4

360:12 361:6

DOE's 18:18

356:19

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dollar 229:18,19

dollars 221:11

domestically

143:18 148:4

done 12:10,12

13:1 15:11,14

19:7,20

20:14,15,20

27:17,20 35:3

36:17 40:14 43:8

46:4 70:19 87:10

104:15 127:6

129:21 142:17

148:4 149:20,21

159:11 160:4

163:18 167:19

196:8,16 201:7

227:16 238:10

241:19 242:1

275:6 278:18

282:22 287:14

289:2 305:12

313:7 336:15

339:12 350:12

353:13 356:10

375:9,14 378:19

383:3 385:13

386:1,8,18

door 94:8 96:2

147:20 219:10

253:10

dots

33:6,16,17,18,22

37:4,9

38:4,6,9,12,17

176:5,6

double 232:8

doubles 325:7

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21:4 32:7 47:2

69:19,20 73:20

76:15 78:6 82:20

85:12 86:8 92:15

93:7 94:2

103:8,9 151:22

160:20 164:13

192:10 197:15

204:3 233:7

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300:15

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231:11

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337:5,6 364:9

driven 7:1

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drivers 306:1

drives 6:22 69:13

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179:6

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172:15,18

173:10 174:2

188:1 189:1

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dropped

100:10,13,17

154:3 155:15

168:16 169:19

176:18 179:9

182:7,8,15,17

183:8 187:11

189:5 198:7

199:4 201:18

202:16

210:15,20

211:20 213:12

215:5,7 222:4

248:10

dropping 66:6

202:18

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dual 102:10 259:5

due 28:19 87:20

115:17 136:10

220:10 299:13

325:4 326:15

331:19 333:8

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duplicate 224:19

225:21 226:4

230:1,18

231:2,8,13,18

232:5,7 246:8

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232:9,12

durability 92:10

269:20 277:5

during 82:7

208:19

duty 331:1 336:22

339:3,16,20

345:6,8

348:17,18 350:1

351:4

355:7,20,22

356:3,7 357:7,9

dynamically 90:13

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eager 5:10

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60:9 101:3

121:18 149:10

151:21 175:21

177:13 186:21

192:20 194:6

195:16 212:7

213:16 214:8,16

218:4 219:4

220:21 222:5

227:16 229:17

232:20 269:1

273:12 274:15

277:2,10 295:13

377:13

early 9:2

earns 327:11

easier 260:15

easily 340:8

354:12

easy 61:5,17 326:7

328:22 346:3

351:1

eat 301:17

eating 129:2

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237:9

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21:2,10,11,12,15

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175:12,13

180:11,12,21

181:4,9,12

190:4,9,14

278:13,14 279:3

281:6,16,22

282:9,13 286:3,6

317:13,14,20

318:2,6,10,14,16

352:3,12,17

356:18

357:10,16

381:5,9 382:8

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economically 19:5

27:2 40:17 96:9

150:18

economics 86:1

278:19

economy 324:9

edge 283:3

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effect 59:8 106:8

effective 58:19

99:3 303:20

effectively 59:3

60:19 104:9

220:10

efficiencies 74:12

80:22 120:16

276:6 278:10,11

293:19 311:14

efficiency 1:3 4:6

7:6 11:12 15:21

16:1,3

26:1,20,21 27:5

28:6,19,22

29:2,4,10

30:1,3,5,10,13,1

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33:5 36:8

39:14,19,21 43:1

45:16

48:1,2,7,18

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85:3,4 86:5 89:3

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105:7,9,13,20,22

108:20 113:1

115:15 118:7

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22

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210:5 214:11

215:22 217:3

218:13 220:15

222:7,21 230:13

234:19

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236:16,17,18

254:3,11

255:16,19 256:3

258:2 267:19

268:8,21

269:7,10

270:1,6,8,13,22

271:4 272:18

273:8,10 275:3,6

276:4,5

277:4,11,13

279:15 280:1,6

287:21 288:8

290:13,17,20

291:14,17

292:20 293:17

302:12,14

303:14,19 305:4

317:2 318:9,19

320:16,17 321:6

331:19,20

332:12 338:14

339:15 341:3,14

342:7,10,14,15,1

9,21 343:6,9

344:17 345:5

349:19 355:13

366:2,4,16

368:17 369:8

370:10

372:19,21,22

efficiency-wise

104:20

efficient 30:12

59:10 101:19

104:2 176:5,7

180:17 185:11

268:10 269:12

288:3 294:3,4

317:4,16 318:22

320:12,22 344:1

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305:12 321:16

359:5

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128:13 141:3

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380:6 385:8

hearing 240:4

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142:3 269:9

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62:14 65:16 90:3

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139:19 150:8

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167:10

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112:11,12

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109:9,19

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352:13 384:10

386:8,14
Capital Reporting Company

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hours 335:22

336:22 339:10

347:7,8 349:13

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22 228:1,15

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314:15,19,22

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281:15 384:22

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101:14,16,18

110:6 112:15

114:7 115:12

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109:3 110:6

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218:7

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340:10,21

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266:15 267:6

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335:2 337:21

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256:11

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23:14,19 24:6,13

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155:7 159:19

161:14,17

162:20 164:14

172:12 175:3

176:3 177:18,19

178:1 179:15

183:21 190:12

191:20 192:22

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210:11,20 212:8

216:15 222:13

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273:19 278:20

280:7 284:22

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288:9 289:5

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299:9 302:3,22

303:3 305:15

310:1,8,20 311:1

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316:21 318:10

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376:13

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380:20,21

383:10 385:4

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186:22 188:12

189:19 190:13

251:6 252:16

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222:3

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97:12,21 98:5,15

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226:15 235:8,12

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98:14,18 100:4

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85:6 152:21

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77:10 87:19

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89:2,16,17

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380:22

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45:19,21 85:3,5

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94:20 354:12

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321:4

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289:9

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304:18 305:10

306:19 308:4,19

315:8,10,17

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286:19 306:21

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283:8 299:6

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319:21 333:8

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334:13
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increment 16:2

incremental 75:3

78:15 85:9 86:2

100:22 130:9,11

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331:18,21

332:12,21

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259:20

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58:22 227:11

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223:22

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individually

138:22 197:17

363:19

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356:19 357:2,20

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78:19 84:12

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123:15 127:7

129:7 132:20,22

133:2 141:18

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167:7 169:14

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188:19 189:3

191:5 200:19

202:11 203:13

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213:10,17

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221:7,21

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272:21 274:16

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283:15,16 287:9

288:13 291:22

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307:9,13 308:13

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221:14

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85:6 87:14

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338:13

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193:11 198:13

204:20 209:20

245:20 290:6

307:10 312:4

324:6 332:22

336:15 349:4

350:11 351:20

353:2 354:11

372:6 374:10

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126:15

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130:11 226:2,9

227:16 228:1,11

244:13

initially 307:9

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220:5 224:17

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2 294:2,16

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input 16:20 19:18

49:22 101:5,8
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130:15

168:10,15

211:18 329:2

335:22 382:7

inputs 86:6

87:11,15 210:21

211:1,3,13,14,19

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142:13,22

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285:6

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325:22

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66:10

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55:19

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169:16 194:20

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26:21 254:3

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97:9 98:14

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304:15 312:9

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3:3 5:20

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issue 25:8 47:4,14

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59:3,17 61:11,13
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63:13 64:12

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88:4 89:7

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186:13,19

196:8,16 204:9

280:5 379:19

386:18

jobs 186:17 187:7

199:21,22

302:13

Joe 164:10

join 7:3 25:11

69:20 75:16

joined 6:13 12:9

joining 5:13 6:15

142:9

judged 64:13

judging 369:6

July 378:20

jump 230:2,4

jumping 73:19

205:1

Justice 280:20

justifiable 291:3

justification

182:21

justified 19:5 27:2

291:1

justify 194:12

K

Katie 2:17 7:17

322:7 323:12

328:14 341:2

348:13

key 35:22 37:14,17

49:1 86:6 101:5

251:5 292:17

306:1

kicking 68:7

216:13 234:16

312:14

kilovolt 347:7

kilowatt 347:7

352:13
Capital Reporting Company

Commercal and Industrial Pumps Working Group 04-29-2014

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www.CapitalReportingCompany.com © 2014

kinds 13:7 14:19

15:18 95:20

361:22

kit 330:19

331:2,5,13

knew 80:18

known 62:18

240:21

Kohl 3:9 7:11

L

labor 114:17

115:18

117:13,14,15

118:1 123:10,16

124:3,4,16,18

129:3 137:12

142:12,21

148:18 256:18

268:22

Laboratory 2:18

4:14,15 7:18,20

8:1

labor-intensive

123:12 125:12

127:14

lack 368:13

ladies 317:5

laid 381:12

land 381:17

382:16

large 30:8,9,12,14

87:12,16 99:10

102:20 109:20

133:2,4 162:16

169:9 170:14

177:1,2 220:13

357:3

larger 87:1

119:19,22 200:9

221:22 229:3

262:7 323:20

367:8

laser 74:2

last 9:12 10:4

13:1,19 15:11

18:12 24:7,8

43:8 47:14 48:13

49:6 50:12 54:11

57:21 59:22

68:16 69:8 71:19

72:14 75:12

94:11 96:1 187:5

193:16 209:21

263:21 273:17

292:18 314:4

342:21 352:3

354:21 361:4

369:21 375:16

lasts 310:11

late 5:11

later 15:5 45:5

47:18 49:17

55:19 67:6 70:6

74:9 94:8

100:11,18 101:9

106:22 133:5

147:11 164:13

204:10 217:12

253:2,3 279:9

Lau 3:11 7:15

296:14,15

301:5,12,18

305:15 308:8,11

309:14,16,21

310:4,10 312:3,9

314:12,17 320:5

Laughter 196:6

280:18 310:22

314:6

launch 5:10

Laura 3:18 8:13

Lawrence 2:18

4:15 7:17,22

laying 158:21

LBNL 84:11 122:1

128:2

LBNL's 155:11

LCC 252:18

253:11 277:20

321:20

322:7,8,9,17,19

323:3,12 345:20

346:2,3 376:2

377:4,8 378:5

382:20 384:1

LCCs 382:3

lead 55:6 159:13

160:13 163:8

212:10 321:13

373:19

leader 172:18

330:10

leaders 172:20

173:2 178:3,4,15

179:5 202:12

leading 167:12

169:2

leads 164:21

leakage 93:22

leaking 93:12

leaks 91:19

lean 163:2

leaning 94:4

learned 16:21

114:20 207:16

274:16 291:12

least 19:16 23:4

24:11 44:20

47:15 65:17

169:6 180:16

188:20 207:3

leave 85:20 355:14

359:1

leaves 324:18

leaving 240:8

left-hand 41:21

legislation 283:6

length 69:2

less 31:19 69:18

92:5 102:13

105:22 106:6

115:4 118:8

122:18 127:1,15

137:20,22

151:17 159:14

166:20 176:6

185:11,21 218:3

221:11,13,15

225:10 246:7

273:7 277:18

294:3,14 317:16

318:22

lets 368:5

let's 30:8

46:16,17,21

47:19 64:19 70:4

73:1,15 76:11

77:13 81:18 82:5

83:12 127:2,22

134:4 151:22

159:4 176:2

192:15 210:8

224:19 264:21

275:5 292:9

295:10 296:5

297:12 310:12

315:7,9 329:9

358:4,6 367:19

388:11
Capital Reporting Company

Commercal and Industrial Pumps Working Group 04-29-2014

Page 36

(866) 448 - DEPO

www.CapitalReportingCompany.com © 2014

level 19:5 26:22

31:4 37:16,22

38:4,5

39:14,19,21

43:13 45:16

47:21 48:1,22

49:2 50:15,16

53:18

54:16,17,18,20

55:16,21

60:16,17 62:14

74:19,22 78:10

79:11 80:1,9

81:11 85:21

86:5,8 94:18

98:12 99:9 101:2

102:9,12,15

103:3,20 109:4,7

115:15,19

139:19 152:9,22

153:11,16,18

154:10 157:7

158:4,20 159:2

161:21 169:18

170:5 175:17

188:13,14

191:14 199:4,6

205:22 210:5

214:11 215:21

217:3 218:13

219:2 220:15

222:7,22 230:14

231:6 236:13

237:12 280:3

281:9 286:15

290:20 291:3

316:11 363:5

371:8 375:8

376:4

levels 11:12 14:21

26:1,20,21

27:1,5,8,10,21

30:16 31:14,16

34:5 40:2,15

43:1 48:2,7,18

57:8 70:2,22

71:2 74:11,20

78:12 79:5,16

101:2 103:1

117:3 142:6

152:8 153:9,17

169:17 170:8

215:22 217:8

219:8 268:15

278:17

290:5,13,15,17

297:4 306:3

312:7 344:19

383:7,14 388:10

leverage 169:9

licensed 143:7

lie 37:10 136:13

378:9

lies 240:18 388:7

life 166:1

313:14,21

lifecycle 16:8,22

75:2 78:14,16

101:6 240:19

290:22 310:8

313:15,19

321:13 324:16

355:16 381:11

lifetime 205:5

308:19 310:6

Lighting 187:18

likelihood 16:18

20:1

likely 62:9 99:5

117:10 119:20

186:17 203:5

290:8 297:19,22

299:20 336:9

344:16

limit 340:11

limited 204:6

310:5 331:17

336:15

limits 339:22

Lin 6:10

line 33:15 107:17

117:12 133:5,11

135:20 139:22

159:5 170:2

172:11,18

173:12 174:18

175:8 176:8,19

178:4 190:6

199:20 200:4

213:12 214:13

220:4 228:3

238:2 247:13

252:22 265:8

266:22 269:10

274:17 275:16

276:12 281:22

287:17 303:17

330:9 368:17

linear 248:11

linearly 182:15

lines 33:13 34:2

37:15 167:11

172:22 173:14

179:10 191:7,9

193:18 203:11

228:14 237:14

238:18 245:11

246:11 269:8

277:19 291:16

303:17 313:11

371:8

list 9:4 11:1 89:2

302:9

listen 288:21

listening 302:4

384:11

listing 185:6

Literally 375:15

little 9:15 13:8,21

14:12 15:4 16:14

17:17 18:19 25:7

27:7 29:16 30:6

32:4 37:2 47:5

48:5 51:2

59:9,10 69:4

75:9 76:4 77:15

79:14 103:18

109:1 117:1

122:12 126:22

137:1 141:8

159:15 160:4

166:14 177:21

204:8,22 213:19

214:16 230:2,4

232:16

244:8,15,18,21

245:16 247:17

252:9 258:3

277:18 283:22

294:14 298:19

302:15,16,19

307:4 312:22

317:3 321:18

349:12 350:12

358:5,11

360:17,21

377:15 379:5

live 240:12 280:7

load 46:10 49:19

60:19 61:21

69:5,14 90:8

113:22 255:8

336:16,17,19,20

337:1,2,17,20

339:5,7,8

350:10,11,18,22

351:3,7,8,12,17

352:8,13,15,21
Capital Reporting Company

Commercal and Industrial Pumps Working Group 04-29-2014

Page 37

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www.CapitalReportingCompany.com © 2014

356:15 357:13

363:18

364:18,19

365:2,3,4,5,19

366:3 367:14

368:20,21

369:1,22 371:16

372:18,19

loaded 323:16

loading 356:19

357:6,8

loads 337:5 352:9

357:20 366:17

368:20

located 88:4

location 37:13

177:21 293:18

319:12

lock 208:14

log 257:3,4,12

258:7 272:16

logical 13:15

logistical 25:7

logistically 19:15

logistics 20:7

long 66:19 94:11

99:3 167:5

241:22 251:8

292:17

313:6,20,21

longer 159:15

179:16 311:15

319:1

long-term 381:16

loosely 283:18

lose 129:4 161:10

183:10

losing 176:21

334:19

loss 45:7

172:18,20 173:2

178:3,4,15 179:5

187:6 330:10

338:5

losses 89:11

90:10,14 92:2

113:21 294:7

336:2 337:3

341:8

lost 89:19 97:9

120:13,15

126:10,20 143:7

lot 10:4,5,6,13,19

11:18 12:22

13:1,2,11 16:4

17:16,17

18:3,20,21 24:6

26:2 27:18 33:9

39:18 64:1

66:5,11 74:7

78:2 81:16 83:17

86:21 93:8 94:6

95:19 98:8

101:14 116:4

119:9 120:14

124:21 131:12

159:18 160:14

161:16,19

169:20,21

176:11 185:4,6

197:2 199:11,20

202:13,17

204:13

205:16,17 206:3

209:7,8,11,20

230:6,10 233:3

239:13 242:8

244:3 246:3,6

255:10,14

258:12,13

260:15

261:14,16

263:7,18 264:9

265:6,7 266:18

267:9,20 277:6

282:15,16,17

284:9 285:9

288:15 289:4,6

290:11 291:2

303:4,9 311:3,21

312:17 320:9

321:11 327:2,3

328:4 332:17

338:11 344:4

354:22 355:2

358:19,20 359:7

368:7 373:10

376:7 379:7,14

380:4,6,8 385:11

386:1 388:4,5,14

lots 125:12

loud 10:2

Louis 4:6 7:5

36:6,7 60:20,21

67:10 68:13

70:10 151:10,11

152:4 187:19

198:14 273:11

304:19,20

329:20 338:1

342:2,3 345:2

346:7

love 130:16 300:16

343:12

low 100:12,13

107:6 169:2

171:3 174:1

176:1,22 179:5

203:18 214:10

219:8 224:1

235:7 263:20

269:9 278:11

300:3 340:13

low-cost 142:14

143:1 267:15

low-efficiency

101:20 142:2

268:11

lower 87:20,21

98:12 123:10

126:5 132:12

138:16,17

147:18 170:8

175:17 190:22

219:8 270:8

276:15 277:4,5

293:22 298:14

299:10,22

301:16,18

305:17 356:7

lower-friction

91:20

lowest 169:18

Lucas 2:5 7:13 9:6

10:13 11:2,22

12:4,13 25:19,21

26:3 43:9 47:11

64:19,20 73:9

127:3 129:14

166:16,17

186:9,10 194:1,4

205:14 239:21

240:14 244:10

284:3 289:21

295:11 315:7,18

344:7 358:14,17

360:3 376:14

378:6,11,22

380:18 386:12

lucky 301:16

303:9

lunch 46:22

179:16 195:7

197:5 208:21

209:12,19 216:6

234:17
Capital Reporting Company

Commercal and Industrial Pumps Working Group 04-29-2014

Page 38

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www.CapitalReportingCompany.com © 2014

M

machine 89:20

98:19 137:8

286:21 296:7

machining 126:13

129:20

magnitude 93:2

377:16

mail 323:13

main 24:1 84:13

100:2 101:16

226:16 358:10

359:2 363:15,20

383:15

maintain 191:2

286:8

major 47:6 111:21

173:9 279:8

326:13

majority 100:5

106:16 123:14

142:17 293:3

312:18

makeup 237:14

malfunctioning

75:18

Man 164:13

manage 315:11

managed 13:4

manner 335:12

manuals 343:16

manufacturability

95:22 160:10

manufacture 91:2

173:12 185:12

manufactured

61:7

manufacturer

19:2 59:15 84:11

87:21 88:7 92:21

100:16 101:1,7

114:9 119:14

130:8 137:3

141:1 147:5

148:7,8 150:7

154:22 157:14

165:9,15,17

170:12,19 175:9

183:12 184:9

185:14 192:20

201:15

205:19,21

207:13 211:14

244:17,18 251:6

258:8 260:2,4,5

261:3 266:21

270:8,9 273:2

286:10

297:1,10,17,20

298:5,7,8 299:5

305:2,3 306:14

321:15,16

322:11

324:19,20 326:6

330:20 333:7

349:1 350:7

377:6 381:12

383:10

manufacturers

47:15 57:18 62:8

65:2 78:21

87:1,12,13,16,17

100:12 102:8,15

109:20 115:19

116:5,6,7,16,19

117:5

119:11,12,16,19

120:9 121:21

122:7,8

123:18,20

124:10 125:21

128:2,9 132:4

137:9 140:21

141:2 142:22

146:2,8 147:8

168:21

169:10,16

170:10,13

172:20

174:10,17

178:17 181:7

182:22

183:9,19,22

185:10 186:3,16

192:17 193:16

200:2,8 203:1,5

211:16

258:10,15 265:9

269:6,8 270:4

278:15

282:16,18

283:12 290:8

291:4 299:18

300:11 309:18

328:9 330:19

359:11 360:6

382:14

manufacturer's

85:10,18 86:3

148:17 253:8

254:7 259:12

260:18 261:2

265:4,5 268:6

270:5 273:13,14

298:2 299:12

333:15

Manufacturers

115:21 291:14

Manufacturer's

254:9 266:1,10

manufacturerspecific 259:22

manufacturersupplied 254:13

manufactures

66:10

manufacturing

86:19 129:21

133:6 181:8

184:1 187:6

265:20 270:7

325:22

map 293:14

march 241:14

MARCHETTI

3:12 26:16,18

margin 289:9

298:19 299:1

marginal 301:13

margins 286:9

mark 3:5 6:6

93:4,6,16 114:18

149:13,14

150:20 165:5,6

193:10

194:13,14

196:13,14 197:8

202:7,8 245:4,5

280:17 281:12

326:20,21

334:1,2

marked-up 261:1

market 11:13

15:16,17

28:9,11,16

30:14,15 53:2,10

57:20 58:1 59:19

60:13,14,15

61:8,9 64:22

65:11

67:17,20,21

68:1,5,11

70:16,17 83:1

84:7,16 86:1

88:22 91:11 96:9
Capital Reporting Company

Commercal and Industrial Pumps Working Group 04-29-2014

Page 39

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98:2 100:10,19

102:3,6 103:11

110:18 111:4

116:2 122:5,18

123:3 140:18

141:3 144:10

153:13 156:12

158:5,8 160:10

168:22 170:9

171:6 180:14,15

181:13 188:6

191:13 195:14

199:8 201:2

211:12,15 212:3

214:1 215:12

217:4,6 226:22

239:8 254:5,17

258:13 270:4,6

271:18,19

272:1,5,19

277:10,13 279:9

280:1,4,12,15

282:5,19

285:9,21,22

289:12 290:9,13

293:2 298:12

299:13 302:2

303:11 305:10

320:19,21 326:4

334:17 349:6

361:17 373:21

market-based

28:5 254:4,12

marketing 109:18

136:2 229:13

287:15 317:7

marketplace

28:7,21 29:5,12

30:8 31:17 33:11

45:2 52:13

56:12,14,17 85:8

93:10 97:17,19

99:14 100:6,14

101:17,20

103:22

104:3,5,8,12

110:4 111:11

116:17,20

117:20 121:20

133:8 138:2,4,14

139:10 142:6

176:10,12,14

178:20 191:3,12

218:22 254:11

267:11 277:1

278:7 283:8

286:12 289:13

294:15,18,20

301:7 303:19

364:6,7,8

markets 61:14,15

70:15 119:4

212:10 279:15

markup 85:19

260:10,20

269:13,15

272:22

274:2,4,8,12,17

298:7,9,11,17

299:1,4 300:3,21

306:5,22

307:8,16 308:1

324:20,22

325:1,2,3,11,16

331:18,21

332:11,12

333:4,5,14,18

335:1

markups 87:7

253:12,15 255:9

258:14 260:19

269:12 280:13

297:6 298:13

305:22 306:5

321:15 323:1

324:13,17

331:17 332:3,13

334:11

mart 317:11

Massie 3:14 8:18

massive 176:13

match 67:19 213:2

224:22 225:4

339:16

matched 347:14

material 16:5

24:18 28:18

91:20 123:17

148:18 164:16

209:9 256:16

268:22

materials 95:20

99:21 100:2

114:17

131:16,19 132:7

312:17,19

math 122:12,19

182:13 233:8

250:8 268:3

289:10 298:22

308:6 311:2,5

mathematical

61:20 68:9

matrix 41:22

matter 70:7

241:22 268:12

291:2 294:8

296:3 303:21

348:1

matters 316:17

mature 104:12

Mauer 3:15 7:7

116:22

139:3,4,13,22

140:5,8

max 83:5 102:2

103:10,11,14,19

104:4,6,11,22

105:1 175:20

maximum 28:21

may 16:19 17:17

19:9 27:8 30:16

34:14 62:10,16

63:17 64:8

68:1,3 88:2

90:2,6 95:20,21

96:8 97:21

100:13,15,16,18

113:4 116:20

117:5 124:4

132:4,5,20

157:15 161:8

167:5 168:21

169:7 171:3

173:10 178:15

183:22 185:7,8,9

188:22 196:8

197:16

199:16,17,18,19

224:2 227:2

234:22

235:1,7,17

253:3,19 255:21

261:11,13

268:15 270:3

271:19 279:9

284:2,5,10

301:21 305:4,7,9

313:7 319:1

320:21 327:15

331:20 340:14

342:5 347:2

349:15

352:10,20

354:19 356:18

357:4 360:1

371:1,2,3,5,6

373:11 378:11

383:4,8 384:3

maybe 5:14 9:8
Capital Reporting Company

Commercal and Industrial Pumps Working Group 04-29-2014

Page 40

(866) 448 - DEPO

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13:20 14:9,10

21:22 41:20

44:10,17 62:15

69:16 75:12

86:15 106:19

158:7,12 166:10

195:6 203:18

207:16,17

241:12

243:15,17

279:12 287:22

288:9 295:3

303:16 304:11

305:7 311:15

316:20 317:2

328:6 338:10

358:11 360:10

370:10 371:13

378:1,14,20

379:5 381:2

383:13,19 384:6

mcmanis 3:17 8:9

McManis 8:9

mean 18:15,16

22:16,22

24:1,6,10,13

30:2,4 43:21

44:5 45:10 47:3

52:16,19 63:21

66:16 67:14

70:1,18 93:7

113:22 125:17

129:2,3 131:16

138:5 154:17

161:13 163:19

165:2,7

167:12,18,22

168:1 170:18

171:4,6,14

177:19 180:12

181:18 182:12

185:2 188:2

193:9,17 194:9

195:12 196:17

201:9

202:10,12,19

204:1,7 205:6,22

207:12 216:21

240:15

241:2,4,6,10,14,

15,20 243:18,22

244:4,11,22

262:12 263:17

264:11 281:5

290:1,11

301:8,19

302:6,17 305:11

315:21 316:5,9

320:8 326:7

327:17 328:3

337:16 359:7,15

361:21 362:8,12

363:15

364:14,16

366:11 369:2

370:20 371:8

372:20

375:14,16 376:4

379:6

380:6,7,10,13

381:1 383:22

385:15

386:12,19

meaning 15:3

351:5,8

means 49:14

102:14 163:18

232:17 253:5

254:7 258:20

259:4 275:17

332:5 344:4

356:12 386:4

meant 40:1 67:6

219:6 236:9,21

324:7 387:9

measured 43:19

measurement

14:18 361:19

mechanical 89:10

90:7 91:16 92:18

93:11 327:19,20

median 52:18,19

107:1,3 135:15

275:16 276:15

medium 268:10

357:19

medium-sized

357:2

meet 11:9 21:9,22

51:18,19

54:4,17,18 103:5

109:7 117:2

139:6,15 157:6

178:18,21

185:16 214:11

215:21 222:21

235:10 236:14

345:6 352:20

384:14

meeting 5:3 9:2,12

10:4 13:2 15:11

17:14 19:14 20:5

43:8 48:14

49:6,9 50:12

54:12 57:21 69:8

72:18 77:21

149:16 150:3

155:13 195:18

197:7 253:4

290:17 297:9

305:4 369:21

379:13,20

380:4,8 382:20

383:4,8,16,18

384:3 387:13

meetings 10:14,20

12:21 13:20

19:10,15 24:7

45:14 46:14

75:20 180:6

241:21 296:22

358:13 378:10

384:1

meets 318:8

Meg 4:10 7:9

24:22 35:8,9

40:22 118:2

119:1 140:10,16

145:3,4,13,15

MEI 28:4 29:9

31:14 42:18

58:17,18,20

61:1,5,11,21

63:1 94:7

102:9,13 109:4,7

115:13,18 118:6

139:6 145:18

151:14 152:13

161:9 169:17

205:2 216:15

294:13 366:10

375:7

MEI/PER 364:13

MEI/PER-40

102:12

MEI-10 28:8,12

33:14 41:11

216:15

MEI-20 114:21

MEI-40 41:12

116:7 117:9

139:12,15

141:20,22 149:3

170:3 186:6

198:16 311:20

MEI-50 116:9

MEI-70 117:20

149:8

MEI-80 116:9
Capital Reporting Company

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MEI-85 33:18

MEIs 14:14 94:7

275:20 281:10

MEI-type 216:18

member 12:1

members 5:11

75:16 76:8 82:7

358:16 384:12

387:21

membrane 39:3

mention 23:19

353:4,11

mentioned 17:16

20:10 54:7

242:18 274:4

359:4 380:1

mentioning 340:9

merit 274:10

message 343:15

met 337:5

metal 256:17

method 28:16

42:18 44:13 57:7

63:16 66:3,4

90:21 133:8

137:9 213:21

229:10 369:5,6,7

methodology

27:17 46:3 79:21

80:4 153:6

240:18 241:17

322:7,16 336:6

methods 43:2

66:13 90:4

121:20

122:4,10,11

142:12 146:3,8

metric 13:10 14:18

15:2,3,7 18:5,7

22:18 23:1 28:3

43:8,13,18

44:7,21 45:5

46:7 48:3,20,21

49:4,5,10 50:11

54:11 55:19 57:8

59:6,22

67:5,8,19

68:15,17,19

69:14 70:8 71:1

74:21 75:1 78:9

83:6

217:2,4,5,20

359:4 361:7,9,14

362:18,19 363:6

364:1,7,12

369:18,22

370:2,6,13

371:1,12,14

377:14,18 381:7

384:20

385:10,16,21

386:1,5,8

metrics 10:5 24:8

47:14,17 59:21

276:1 358:9

361:5 370:22

371:22 373:17

387:18

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MIA 88:7 253:4

309:17 383:5,9

microphone

227:21

middle 30:13,15

191:22 324:11

378:19

mike 8:3 10:15

145:10 321:8

million 162:2

192:4

247:8,12,14

248:22

311:6,10,11,16

millions 247:4

mimic 40:12 67:12

68:10

mind 12:18 17:2

67:8 69:4 73:17

74:15 186:20

364:12

mindboggling

190:1

minimal 299:11,14

minimum 31:21

50:10

51:3,6,11,12

53:20,21 54:1

280:3 282:3,4

300:2 303:15,19

minor 112:3

minus 51:8 249:1

298:20

minute 165:17

minutes 76:21

77:18 81:19,20

323:7 363:13

misapply

318:3,6,17,18

missed 41:20

252:1

missing 252:7

326:12 327:2

361:14

miss-sized 338:11

mistaken 71:19

mix 70:19 143:13

mode 12:11

model 55:13,15

85:6,22 87:11

110:7,11

116:9,11 138:3

153:7,10,22

156:3 166:21

168:22 169:8

172:10 174:18

175:8 184:10

188:10,11 191:7

192:2 210:22

215:8 222:11,16

223:3,7,21

224:1,17,18,22

225:19,22 226:4

232:3 234:8

237:13 239:6

246:15 253:14

254:5 255:2

257:18

259:13,14,15

261:11,13

262:4,14,18

264:17,22 265:5

267:4,14

272:14,15,17

273:4 276:6

280:11,15 299:4

300:15 301:9

331:8

modeled 166:19

modeling 85:18

152:20 170:19

259:7

models 54:21 57:2

100:3,9,15

110:20 111:10

153:15

154:2,3,4,7

155:9,14,16,17,2

2 156:5,10,13

159:6 168:16,20

169:19,22

170:17 171:8

175:11,14

176:21 177:3,4
Capital Reporting Company

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181:22

182:5,7,8,12

183:8 187:21,22

188:1,2 189:4

190:6,9 191:21

192:11,18 198:7

199:3 200:10

201:18 202:15

203:6,15 210:13

211:8,20

212:1,11,18,22

213:6,12

215:3,4,10

218:3,6,17 219:5

220:22

222:9,13,17

223:6,16 224:22

227:1

230:13,17,19,21

231:8

232:3,5,18,21

237:19,20 238:5

246:20 248:10

260:16 263:22

264:1,16 267:11

275:18

276:20,21,22

280:13 290:16

293:7,8 294:13

300:14,19,20

model's 80:8

Models 163:2

213:22

modern 90:3

modify 340:8

molds 132:8

moment 29:22

299:10 340:10

353:2 385:15

monetization

78:22

money 102:1,6

103:6 159:18

162:9,19 184:5

186:6,7 251:9

313:1 330:12

months 16:21

19:22

month's 68:16

morning 5:2,9

10:8 25:8,16

47:13 75:18

197:5 206:12

360:9 386:9

388:1

mostly 226:9

326:8

motor 2:12 6:22

8:11 45:20 46:9

49:21 50:8,10

60:5 80:22 114:1

247:6 249:6

255:6,9 256:15

258:8,14

259:2,8,10,15,17

,22

260:1,9,11,17,21

,22 261:1,3,4,9

262:15,22 263:1

265:1,3,7,8,10

266:20 286:18

288:3,6,7,10

293:4,5,6,9

302:22 303:7

305:6 317:2

335:19 336:2

337:3 338:4,12

341:3,5,14

347:6,14,20

348:4 353:14

356:19

357:6,8,12,13

365:12

366:3,4,17 367:3

motors 6:22

44:8,13 69:13

249:1,2,8 255:10

259:10

260:3,14,17

261:12,13 265:1

293:2 341:19

347:12,13,16

349:8,10,11,16

353:16

354:17,19 355:3

363:16

mount 228:18

mounts 226:19

mouth 296:18

move 23:16 26:7

31:4,18 32:12

33:16,17 37:18

39:11,12,17 43:2

56:3 82:9,14

84:6 101:12

105:5 115:10

121:1 127:20

130:17 133:13

135:20 137:1

141:20,22

145:18 146:21

147:1 148:20

152:16,20

168:10 176:18

186:17

210:15,20

215:14 220:6

246:12 247:12

264:5 276:16

324:14 335:2

358:4,6 362:10

364:6,11

385:3,11 387:18

moved 36:2 130:3

moving 13:19

50:21 82:21

89:17 96:16

137:1 159:10

198:16 252:21

253:14 257:7

353:20

MPC 85:9,18

114:8,16

130:9,11 137:14

220:9 253:8,14

268:6 269:18

270:21 272:20

274:5,7 298:6,17

306:6,22

MPCs 297:14

306:2

MSP 86:2 259:2

261:19

262:4,14,18

265:1,22 266:17

269:6,18 270:12

272:15 274:6

297:22 298:5,17

306:5,20,21

307:3 308:3,4

MSPs 87:2 297:15

306:1

multiple 27:5

61:15 169:10

194:21,22

255:18 299:4

352:20

multiplied 52:1

149:9 220:17

222:8 232:9

multiplier 119:5

multiply 80:19

111:10 221:1,6

222:16 231:4

232:13,14

233:21 234:2,3,4

246:21 260:19

261:1 335:22

mustard 181:13
Capital Reporting Company

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myself 127:6

242:13

N

nailed 357:14

359:8 362:7

narrowed 90:11

national 2:18

4:14,15 7:20 8:1

19:2 78:18

340:18 345:19

383:4

natural 4:11 7:9

179:19

nature 285:16

Navigant 3:11

4:3,12 7:15,21

8:19 25:20 84:10

122:1 128:3

155:11 193:16

296:16

Navigant-LBNL

197:16 211:4

NDA 128:3,5

179:8 207:14

necessarily 17:19

20:4 22:21 65:14

104:3 129:2

205:17 244:5

342:8 361:15

362:1

necessary 68:21

73:14

necessitated

310:16

NEEA 4:6 36:7

60:22 151:11

304:20 342:3

needle 159:11

negative 293:9

negotiate 22:21

388:9

negotiated 5:4

19:21 20:13

negotiating 239:22

297:9 315:22

358:7

negotiation 315:20

316:9

negotiations 23:13

381:10

neither 305:18

389:11 390:6

NEMA 2:10 3:14

6:18 8:17,18

71:11 174:19

192:21

net 78:17,19 255:6

302:10

newer 208:16

NGOs 364:5

NIA 384:2

nice 5:9 158:21

388:14

niche 283:22

Nidec 2:12 8:11

night 71:19 72:14

nightmare 165:4

183:4

nobody 72:4

303:16 319:1

nods 301:1

noise 253:20

nomenclature

51:2 102:11

nominal 74:14

336:22

noncircular

350:14

noncompliant

281:9

nondisclosure

254:19

none 12:4 21:18

67:16 278:10

383:5

nonproduction

298:9

non-standards

344:12

nor 269:11

389:11,15

390:6,7

normal 152:12

317:7

normalization

257:13

normalize 256:12

normalized 147:12

255:21 256:21

Normally 152:7

Northwest 2:21

4:6,14 5:17

7:5,20 357:18

nose 378:17

note 73:17 75:15

77:14 143:11

229:11 298:17

357:6,17 383:21

noted 192:16

notes 195:4 241:8

nothing 71:15

104:20 149:1

193:18 235:1

283:7 286:22

292:12 295:8

332:17 380:20

notice 71:5 72:9

notified 71:21

nowhere 188:19

nozzle 177:21

NPSH 161:2

235:3,8

NRDC 35:10

Ns 32:15

Ns/Q 257:12 258:7

262:1 272:16

NSF 95:18

numerator 365:4

366:8 367:7

368:17

O

observation

196:2,15 208:3

obsolete 313:15

obvious 353:9

obviously 13:9

14:19 18:3 22:16

43:21 97:7 168:4

196:17,22 198:8

259:19 262:12

263:15,18

264:18 267:7

316:1

occurring 144:11

occurs 307:15

o'clock 71:20

296:6 388:4

odd 191:10,15

287:4

odd-type 34:12
Capital Reporting Company

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OE 330:11

OEM 325:19,21

326:2 327:6,7

329:9,17

offer 320:16

offered 269:15

319:1

offerings 191:14

offhand 106:22

OFFICE 1:3

offset 339:19

355:9

offshore 87:22

88:2 142:18

143:10,18

173:11,13,15

181:7 184:19

185:11,14,22

186:5,7 283:18

284:7 302:1

319:12

oftentimes 169:9

341:18

oh 20:9 38:8 41:1

106:14 145:12

207:16 228:22

234:1 251:17

252:2 264:16

273:19 274:3

311:9 314:22

362:10,11

okay 9:16,22 10:3

12:4 21:3,14

22:10,11 24:16

25:4,6 30:19

31:11 35:20

36:5,18,22 37:7

39:2,5,7,17,18

40:11 41:5,13

42:6,12 47:18,20

48:7 50:21 54:5

55:3 64:5,16

70:21 72:8

73:5,15 74:18

77:13,14 79:13

81:13,15,20

82:13,16 83:13

86:13,17

88:15,20 90:17

100:19 101:12

105:3,4,5

108:8,14 109:2

112:4 113:4

115:10,11 118:3

120:22 121:7

127:4 129:22

132:2 133:12

135:2,5,17,18

136:22 138:18

139:22 140:8,13

141:7 142:20

143:9,12,16,20

145:12

146:6,14,17,18,1

9,20,21

148:16,18

149:11 151:9

152:2,19 154:11

155:6,8 158:14

159:3 163:4,21

165:21 168:18

172:13 174:15

177:18,19

179:17,22

183:11 187:13

192:12,15

193:19 195:12

197:3,18 199:1,9

203:2,9 204:2

207:5 208:17

215:1 216:8,9

217:22 218:1,7

220:7 222:22

223:3 224:10

225:7 229:12

230:5 233:3

234:1 238:13

242:3,11 245:22

246:2,3,13,22

248:21 249:21

252:7,10

254:2,21 255:11

258:5 260:7

262:9 263:14

264:11,21

266:17 267:22

269:4 270:14

271:11 272:12

274:19,20

275:9,11 282:20

284:10 287:17

288:6 292:18

297:15 299:2

302:3 305:14

309:20 311:10

314:8,11 315:5

319:7 321:7

323:3,11,17

327:14,22 328:3

329:18 330:4

331:11,15 332:1

334:21

342:1,11,18

343:3,6,7

348:7,9,14 355:5

356:16 357:21

358:4,18 363:3

365:17 366:7

367:9,12

370:8,11 371:7

373:15,22

377:21 384:4

387:8,16

old 283:20

omega 49:13,14

53:19

one-horsepower

122:14

ones 31:1 42:10

46:11 95:13

132:5 156:11

157:13,17,20

171:18,19

215:7,17 234:19

261:18 273:14

357:3

one-sided 242:4

one-third 49:18

one-time 130:7

310:16

one-way 241:5

online 142:9

onshore 142:17

143:4

onto 293:15

369:19

open 24:13 55:19

98:2 158:9

170:21 278:7

347:5

opened 94:9

opening 12:2

235:12

operate 62:10

65:11 340:2,15

355:20,21 356:7

operated 349:16

operating 62:16

65:17,18 250:18

289:8 335:11

337:13,16

338:13 339:7

342:12 345:21

351:6 352:2

353:21 354:1

355:3,7

operation 339:10

349:13 353:13
Capital Reporting Company

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operational 75:4

78:16

opinion 34:9

301:15 305:15

366:9

opinions 130:13

opportunity 16:9

20:19

opposed 46:10

266:5 274:2

284:19 356:1

opposite 130:14

option 91:15 97:18

98:1,22 99:8

132:3,16 156:4

162:13 249:3

300:17 367:22

options 84:16

85:5,7,8 88:21

89:2,15 90:19,22

92:1,14

96:17,18,22

97:3,11,17 98:18

99:16 108:20

152:21 153:2,12

268:19 300:10

347:12

362:7,8,12

367:18 372:16

373:18

or/and 239:22

order 13:15 93:2

120:14 244:15

295:17 310:6

ordering 62:21

Oregon 356:21

organize 384:8

organized 383:20

origin 243:11

original 40:2 52:5

130:4 174:16

225:22 237:14

243:16 246:19

265:2 330:11

originally 94:13

136:9

OSU 356:21

others 79:1 87:2

93:21 95:22

160:18 204:12

208:5 242:13

250:14,15

263:18 283:16

otherwise 23:3

24:14 265:7

340:15 385:3

389:16

ought 348:5

365:14

ours 362:3,20

363:8 368:5

ourselves 185:7

241:8 278:2

315:13 335:19

outcome 385:1,21

389:16 390:7

outdated 243:15

outliers 267:13

outlined 336:6

out-of 137:11

out-of-house

148:9

output 54:9 154:1

332:10 353:5

outputs 261:7

outset 11:21 13:13

378:11

outside 15:1 43:13

119:20 149:16

150:2 188:3,9

outweigh 252:14

overall 65:16

95:4,8,10 125:21

132:22 148:13

177:3 189:20

205:18 218:4

247:18 270:4

337:3 353:8

overestimated

338:12

overhead 66:12

overlap 225:11,12

230:8,10 246:7

overlapping

169:8,22

170:10,13

171:13,16

190:22 239:2

246:4

overlaps 277:15

overseas 143:1

148:10 186:17

overshoot 103:3

oversized 342:6

351:5,8

overstated 261:10

overstating 354:19

overview 9:7

11:4,5 14:7

348:20

owned 100:16

owner 328:2

P

P&L 330:9

p.m 388:16

pace 19:11 378:21

Pacific 4:14 5:21

7:19

pack 46:19

package 302:20,22

303:11

packet 175:21

packing 92:17

93:8,13

page 206:16

262:13 263:21

342:22

paid 86:14 327:20

painstaking 88:18

pans 129:12

parallel 85:17

parallels 27:19

parameter 255:21

256:6,10 262:1

339:9

parameters 65:6

211:11 255:18

256:2

parasitic 90:8

pardon 73:18

parentheses 49:19

PARTICIPANT

134:11 383:9

participants 2:4

3:2 4:2 347:3

participate 27:8

participating

320:19

particular 19:4

24:4 43:12 65:3

127:18 159:4

205:21 290:4
Capital Reporting Company

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361:7

parties 325:15

389:12,15

party 390:6

pass 54:21 58:22

63:14 79:22

81:5,12 100:14

163:19 205:8

279:20 281:5

298:3 299:5,18

300:6

pass/fail 62:12

66:15

passages 106:3

passed 322:13

passes 304:7

passing 63:3,4

64:9 153:20

169:8 252:18

past 14:7 46:14

129:10 206:17

210:20 305:2

pasted 266:15

path 85:17 118:7

157:15 161:20

243:6 343:13

pathway 11:4

12:18 206:1

pattern 109:17

120:11 121:16

226:13 228:16

pattern/tooling

228:4

patterns 120:14

165:13 313:3

Patterson 3:8 6:7

42:16 44:19 63:9

71:18 154:14

171:2 286:17

337:12 386:6

Paul 6:10

pause 75:6,9 77:12

358:2

pay 85:16 123:21

124:11,12,21

185:4 289:16

290:20 291:12

320:1 341:18,19

payback 101:7

250:15,17 251:1

289:1,8,18

311:12 314:3

paying 124:15,16

230:22 260:5,21

290:19 325:8

332:16 336:5

341:17 351:18

payment 306:9

payments 306:16

peaking 161:5

178:10

penalty 341:10

Pentair 4:5 8:4

people 14:14 61:13

65:7 66:11 68:2

94:1 117:16

130:15 149:15

150:2 159:1,18

162:3 166:9

170:16 186:4

198:4 202:11

203:18 204:19

205:5 225:6

269:2 280:5

287:15 290:19

311:15 334:17

339:1 342:4,5

349:17 354:20

people's 350:6

per 28:2 49:5,9,12

53:17,22

54:3,4,9,10

55:16,17,22 56:1

58:16,18 59:3,8

61:1 62:2 63:1

79:18 80:3,7,15

81:8 85:10

103:3,4 106:7

115:3 116:11

125:1,7,15,16

130:12 147:18

159:3 190:6

191:22 216:14

219:2 220:9

221:2,5,8,11

222:11,15 234:7

246:15 258:6

261:8 262:14,18

265:3 266:16

272:15 276:1,6

306:11,14,19

308:1 323:13

335:22 336:22

352:12 353:8

362:13 369:21

372:12,19 375:8

PER-10 169:18

175:18

176:8,9,16 182:4

215:10 218:15

247:8,13

PER-25 102:15

182:16 248:5

PER-40

102:9,13,16,17

109:4 115:13

182:17 248:6

250:9 311:20

PER-55 103:5

248:6

PER-70 248:7

percent

28:9,11,12,13

30:17,18 40:3,4

48:15,16

50:16,17

51:19,20,21

52:3,4,14 56:13

57:5,6,22 59:1

60:13,15 68:3

69:18 78:17

105:22 110:17

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133:15,19

134:7,17

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1,22 136:1

137:5,7 141:3,6

144:16 147:4,6

151:15

152:1,8,10

157:18

158:6,7,8,11,12

161:9 166:20

169:18 170:4,17

171:8 172:15

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181:17,18

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183:13

187:9,10,14,21,2

2 189:4,22

190:10 200:9

201:17,19,20

202:2 211:20

212:3,5

213:13,16,18,20

214:1,4,17,18

217:6,7,9,10,16

218:16,18

219:3,4,6,19,20

220:2,5 221:16

224:21

225:3,4,5,11,12,
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17 234:6 237:20

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337:21 340:3

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345:22 346:1,15

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5 354:2,8,9

356:12,13,14

365:16 369:14

percentage 52:15

57:1 99:15

133:3,22 144:18

150:13

155:20,21

156:12 158:11

162:11 170:14

177:1,2 179:9

188:11 191:11

200:9 214:14,21

215:11 217:3

219:2 225:22

229:3 232:11

247:5,19 248:9

255:9 275:18,22

294:13 311:8

330:3

percentages 183:9

210:20 218:5

231:3

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perfect 117:18,21

245:14,15

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perform 61:4 75:2

78:10 308:6

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54:16 56:20

61:10 64:8 91:19

110:19 112:18

165:10 175:11

193:20 224:18

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169:15

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166:11 285:15

306:12

308:13,14

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periods 241:21

380:4

per-manufacturer

270:11

per-model 205:20

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275:20 276:3

person 199:10

305:7

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perspective 27:22

149:11 181:16

182:10 217:1

236:1,8 239:1

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311:4 336:4

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242:18

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8:13

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phrase 368:14

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257:1 262:9

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103:14

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139:10 281:10

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picture 112:12

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piece 115:3 125:1

252:1 281:14

286:14 325:10

330:8 336:13

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pipeline 104:16

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places 368:7

plan 382:19

plane 32:11,16

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313:22

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164:1,20 166:16

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188:7 190:19

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208:12 210:14

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344:9 345:7,8

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368:18 372:19

373:6 374:21

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points 18:12 33:10

46:10 59:4 60:19

66:3,4 67:9

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105:13,20 106:1

111:19 129:16

151:16 152:1,2,3

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261:15,16 262:7

267:10 276:4,5,9

277:22 280:4

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291:13,17

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351:13 363:18

369:22 372:18

pole 225:9 228:19

231:16

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228:21

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polish 89:20,21

93:3 137:8

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164:11 166:21

212:6

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218:6

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159:15,19

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163:9 164:17,20

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166:8 167:4

218:9 219:13

220:11 221:3,21

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230:10

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2

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234:6 262:6,7,15

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150:13

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portion 167:6

226:22 250:21

281:7 327:2

portions 238:12

position 190:20

possibility 20:11

possible 17:4

19:12 26:22

91:13 103:15

240:21 295:20

300:10

possibly 176:18

184:21

posted 89:4

potential 13:5 48:7

91:21 95:6,10

240:10 305:13

324:8

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103:9,14 104:21

105:3 233:5,7,11

234:10

270:15,17,20

271:7,11,14

314:4 329:4,5,19

pound 125:7,15

power 2:21 5:17

49:20,22

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223:17 257:5,6

267:18 283:16

287:19

335:18,20 337:1

338:4 340:13

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180:20

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183:3,7,17,20

184:16,17

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186:19 187:8,16

191:16 192:4,7

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202:1 204:3

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207:5

216:4,9,11,18

217:22

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236:2,5

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1 281:1 282:21

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314:7 315:6,16

316:20

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318:4,7,12,15

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331:9,12

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practicability 91:2

practical 369:7

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315:17

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127:15

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126:11,20

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375:13

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preface 223:4

prefer 386:2

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preliminary 13:6

16:7,17 17:3

18:22 83:16

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premise 55:15

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premium 269:14

270:8

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276:17 279:14

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15:9 18:21 20:3

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314:22 378:5

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196:3 209:20

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108:21 111:6

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264:3,6 266:19

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381:1 388:6

previous 45:14

79:17 221:10

268:19 272:15

342:22

previously 21:21

76:7 128:5

205:16 380:2

price 86:3,4 101:1

115:9 123:21

124:2 125:7

254:7,9 258:8

259:12

265:17,19

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273:15 274:7

275:9 276:21

279:14 281:18
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problem 45:1

63:10 67:16 93:7

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procedurally

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23:17 25:22 26:6

27:19 28:19

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83:17 89:7 117:7

127:16 156:8,9

179:11 186:21

240:21 323:22

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processes 89:20

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process-oriented

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66:17 86:4 91:5

102:17 103:22

104:2 113:1

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131:11 132:12

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173:14 174:14

178:4 183:13

184:18 189:22

191:14 199:19

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232:13 233:14

236:12 237:14

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246:11 247:11

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280:14 291:16

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319:4,5 321:1

327:12 330:7

332:11 334:9

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production

85:10,19 114:9

129:18 148:17

253:8 254:7

268:7 271:5

272:21 273:13

274:2 297:17

298:8,21

productive 10:22

77:15 358:9

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products 95:4

100:6 101:19

104:3,13 127:8

159:14 160:21

172:14 184:19

185:8 187:10

190:21,22 245:7

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305:10 313:16

317:6 320:18

326:14 332:18

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product-specific

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profiles 336:16

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352:21 356:11

profit 298:10
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profitability

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13:17 20:11

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promises 379:4

promote 317:6

pronouncing

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proof 126:8

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properties 40:10

property 124:15

proposal 46:20

60:10

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propose 79:5

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proposing

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propped 321:7

prospective 12:19

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provide 15:2 17:15

19:18 20:20

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241:13 326:10

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provided 57:13

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130:15 196:17

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provides 37:4

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public 2:3 5:7

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published 41:9,11

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pull 124:14 151:20

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pulled 32:18,20

80:17,22 211:6

pump 3:8 6:7

15:21 16:3,9

28:8,15,20

30:9,10,12,14

33:4,21 34:21

35:17 40:10

43:20

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49:20

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6

51:1,3,6,8,12,13

54:13,21

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269:9,10

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313:21 314:2

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324:18 325:22

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355:8,11 357:9

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364:13 365:6

366:13,14,15

367:4,14

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pumping 93:20

178:5

pump-only 247:6

261:8,19,21

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pumps 13:6 14:5

28:13

29:5,9,13,22

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215:21,22

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262:16 263:8,18

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276:2,14 277:12

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Pumps 1:7 5:4

176:4,6 264:5

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punctuate 210:9

purchase 277:3

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purchased 137:10

purchaser 86:5

purchases 123:15

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purely 51:13 138:2

244:5

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push 195:13

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54:17 59:18 66:2

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81:5 93:19

126:10 184:13

201:17 241:1

283:1 285:19

286:8,9,11

320:21 348:2,3

357:16 361:6

364:15 380:20

whichever 137:8

white 150:22

151:1,3

whoever 63:10

whole 15:6 18:7

28:7 39:1 43:15

46:9 79:8 83:20

91:12 111:4,15

126:17 135:10

170:12,20

184:11 200:19

206:1 217:17

219:9 222:21

236:19 241:15

249:2 250:1,19

253:6 259:5

263:7 294:17,18

297:5 306:15

308:13 331:2

333:15 336:5

340:10 344:22

377:7 385:14

wholesale 63:5

whom 389:3

whose 389:5

whys 360:10

Widder 4:13 7:19

46:1 69:1 143:22

144:3,22

145:9,12 362:8

363:3,14

364:2,17,19,22

365:7,11,17,20,2

2 366:6,14,20

367:6,9,12,15,20

368:2,9,12,15

369:4,12

370:8,18 371:4,7

372:8,22

373:4,7,15,22

374:5,8 377:11

wide 152:21

wider 106:3

wild 288:12

Williams 4:15

7:22 44:4 69:22

72:16,20 73:1,3

75:11 140:13

190:3 193:7

200:6,17,20

201:3 202:19,22

203:3,9,14,17,21

207:11 208:1

244:10 320:7

321:9 323:11

328:8,19

357:5,11 376:20

377:1 382:18

383:10,21 384:5

willing 280:7

winner 302:6

wire 112:17

303:15

wise 179:1

wish 65:12 384:14

wishes 12:1 127:3

253:18

witness 389:5,7,10

wondered 198:15

wondering 61:17

240:9 380:20,21

wording 163:15

work 11:10 14:21

15:1,10,14 49:11

81:20 88:1,2

91:17 117:13

129:11 148:4

180:9 182:19

208:4 235:12,19

248:12

253:10,11 256:1

257:21 264:15

293:10,11

294:22 305:8

313:6 324:11

359:12,14 362:1

385:13 387:2

worked 21:18 23:3

109:22 189:9

215:9 224:7

248:12

255:16,19 321:3

380:21 385:9

Workgroup 23:13

working 1:7 5:5

6:19 10:11 12:1

20:13 23:6,20

27:7,9 44:6 79:4

109:17 112:8,14

117:14 328:2

348:22 358:7,16

362:10

371:13,17,22

378:8 384:13

388:18

workload 9:9

358:12

works 14:8 33:20

34:10 51:16 55:8

70:7 89:1 145:11

201:2 256:8,11

258:3 293:10

315:20 322:19

341:9

world 66:17 93:19

94:17 158:22

164:3 298:6

344:9

worn 164:14

worried 136:4

worries 72:22

worry 173:17

worse 55:20

187:12

worst 58:21

59:1,13

worth 66:11

156:7,19 181:5

248:22

worthwhile

23:11,21

Wow 9:22 283:19

wrap 66:18

wrapped 18:13

wrapping 74:18

78:7

write 23:4 281:1

writes 142:11

written-up 9:3

wrong 22:1 124:8

144:4 194:11

205:13 241:3

316:5 378:20

WSU 357:3

X

x/y 135:8

x-axes 259:5

x-axis 33:2 56:22

Xylem 3:5 6:6 93:7
Capital Reporting Company

Commercal and Industrial Pumps Working Group 04-29-2014

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(866) 448 - DEPO

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194:15 196:14

245:5 326:21

Y

y-axis 33:4,5 39:13

57:1 176:4

yellow 42:2 343:20

yes/no 63:7

yet 14:1 16:12,13

21:13 55:4 75:14

86:15 89:6

142:18 262:13

291:17 300:10

321:18 359:9

373:12 376:21

377:5,10 384:2

yield 45:2

yielded 10:5

you'll 71:5 79:5

87:13 107:19

159:22 214:20

258:4 267:1

340:12

yours 296:13

361:13

yourself 376:17

you've 6:13 157:8

159:21 162:1

173:9 178:21

183:12 190:21

204:13

228:18,20

280:12

281:11,17

285:18 315:1

330:14 352:5,7

355:6 367:22

375:9

Z

zero 130:12

169:4,21 214:2

264:20