1 

UNITED STATES DEPARTMENT OF ENERGY 

PUBLIC MEETING ON PROPOSED ENERGY CONSERVATION 

STANDARDS FOR PACKAGED TERMINAL AIR CONDITIONERS AND 

HEAT PUMPS
 

U.S. Department of Energy

 Room 1E-245 

1000 Independence Avenue, Southwest

 Washington, D.C. 

Thursday, May 1, 2008

9:00 a.m. 

Participants

 DOUG BROOKMAN, Facilitator 

 RON LEWIS 

 Department of Energy 

 WES ANDERSON 

 Department of Energy 

 ASHLEY ARMSTRONG 

 Navigant Consulting, Inc. 

 Constantin von Wentzel 

 Navigant Consulting, Inc. 

 Matt O’hare 

 Navigant Consulting, Inc. 

 BING LIU 

Pacific Northwest National Laboratory 

 MICHAEL SCOTT 

Pacific Northwest National Laboratory 

 SRIRAM SOMASUNDARAM 

Pacific Northwest National Laboratory 

 Marylynn Placet 

Pacific Northwest National Laboratory 

 JIM BENZ 

GE 

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Participants (Continued) 

 SCOTT TOUKATLY 

 ECR International 

 HARVEY SACHS 

American Council for an Energy Efficient

Economy 

 KARIM AMRANE 

The Air Conditioning, Heating, and

 Refrigeration Institute 

 FRANCINE PINTO 

 Department of Energy 

 ERIC STAS 

 Department of Energy 

 MICHAEL KIDO 

 Department of Energy 

 DAVE MARKUSZ 

Carrier 

 TOM GUFFEY 

 Goodman - Amana 

 MARY ANN STOJKOVSKI 

 McQuay International 

 Patrick Schoof 

 McQuay International 

 Lane Burt 

Natural Resources Defense Council 

 JOE MATTINGLY 

The Air Conditioning, Heating, and

 Refrigeration Institute 

 TED KINGSBURY 

 Goodman – Amana 

 Dan Vo 

Friedrich Air Conditioning Company 

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Participants (Continued) 

 JIM RABA 

 Department of Energy 

 MICHAEL MCCABE 

 Department of Energy 

 MICHAEL RAYMOND 

 Department of Energy 

 MAUREEN MURPHY 

 Public Participant 

 Tatiana Delorm 

 Public Participant 

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A G E N D A 

AGENDA ITEM: PAGE: 

Welcome 6 

 Wes Anderson 

Introductions and Agenda Review 8 

 Doug Brookman 

Rulemaking Overview 10 

 Wes Anderson 

Brief Opening Remarks from Interested Parties 

Jim Benz 14 

 General Electric 

Scott Toukatly 19 

 ECR International 

Harvey Sachs 21 

American Council for an Energy Efficient

Economy 

Karim Amrane 21 

The Air Conditioning, Heating, and

 Refrigeration Institute 

Market and Technology Assessment, Screening 24 

Analysis, and Engineering Analysis 

 Ashley Armstrong 

Energy Use Analysis and Life-Cycle Cost Analysis 

Bing Liu 76 

Michael Scott 85 

Afternoon Session 

National Impact Analysis 120 

 Michael Scott 

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A G E N D A 

AGENDA ITEM: PAGE: 

Trial Standard Level Development and 157 

Manufacturing Impact Analysis 

 Ashley Armstrong 

Utility Impact Analysis, Employment Impact 188 

Analysis, Environmental Assessment, and

Regulatory Impact Analysis 

 Bing Liu 

Discussion of Issues 199 

 Doug Brookman 

Closing Remarks 211 

 Wes Anderson 

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

2 9:06 a.m. 

3 MR. BROOKMAN: Good morning. Welcome to the 

4 Department of Energy's Public Meeting on Proposed 

Energy Conservation Standards for Packaged Terminal Air 

6 Conditioners and Heat Pumps. Welcome. Glad you could 

7 be here. 

8 As a way of starting us off this morning, 

9 we're pleased to have Ron Lewis from the Department of 

Energy joining us. Ron Lewis. 

11 Welcome 

12 Ron Lewis 

13 MR. LEWIS: Good morning, everyone. I'm just 

14 interested in knowing, since PTACs is not one of the 

rulemakings that we've had a lot of meetings on before, 

16 how many people are new to the rulemaking process, have 

17 not been involved in one of these before? 

18 (Show of hands.) 

19 MR. LEWIS: Okay. Well, welcome. One of the 

things I want to encourage you early on in the day is 

21 this process of presenting the information that we've 

22 got in the Notice of Proposed Rulemaking and getting 

23 feedback from you, comments from you, on the approach 

24 and the data that we've got in here and proposed 

levels, now is the time to speak up. 

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1 We have a very, very aggressive schedule with 

2 a lot of rulemakings going on simultaneously, and we 

3 don't have a lot of time to go backwards or redo 

4 things. So it's really important that if you've got 

something that you've got a concern with, you've got 

6 some data to submit, you've got something that you need 

7 us to know, we need to know it now and we need to know 

8 it by the end of the comment period. I want to 

9 encourage you to be quick with that, and to take part 

in the discussions if there's something that you want 

11 to contribute today, because we need to keep moving 

12 forward with this and bring this to the final rule. 

13 So, I don't want anybody that hasn't been 

14 involved in these to think that this is just a 

presentation, a monologue or something that you don't 

16 participate in. If there are things that you want to 

17 contribute, please feel free to do that. 

18 And, welcome again. Appreciate you taking 

19 the time out of your schedules to be here. We hope 

it's a productive day for you. We do this to get your 

21 input and to make sure that you understand the contents 

22 and discuss that with you, and we're real pleased that 

23 you're here. So, thank you very much. 

24 Wes Anderson is the lead person on this 

project for DOE, and he'll be moderating or be the 

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1 person in charge of the day here. So, thanks again. 

2 Introductions and Agenda Review 

3 Doug Brookman 

4 MR. BROOKMAN: Okay. Thank you, Ron. It's 

our tradition to provide everyone a chance to introduce 

6 him- or herself. Please say your name and 

7 organizational affiliation. I'm going to work my way 

8 around the room this way and start with you, please. 

9 (Introductions.) 

MR. BROOKMAN: Again, let me welcome you. 

11 Thank you for being here on time so we can get going. 

12 We have a full agenda for you today. All of you, when 

13 you registered at the door, received a packet of 

14 information. In there, there is an agenda. There's 

also a packet full of colorful slides. I'm going to 

16 review the agenda here in just a moment. 

17 The general format for today, as Ron 

18 mentioned, is that there is a lot of detailed meeting 

19 content in these slides. They're going to be shown one 

by one up here on the screen. There's plenty of 

21 opportunity for you to ask questions, get answers, and 

22 provide comment. This is your opportunity to do that. 

23 The Department seriously wants you to provide all 

24 kinds of useful comment to them so they can proceed. 

So that's the general format. 

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1 Questions about that? 

2 (No response.) 

3 MR. BROOKMAN: I'm going to review the agenda 

4 briefly. We're doing the first element here, which is 

Introductions and Agenda Review. Following that, Wes 

6 Anderson, the lead on this project, is going to provide 

7 a rulemaking overview. Following the overview, there's 

8 an opportunity for any of you that wish to do so to 

9 make brief opening remarks. That is, anything that you 

wish to call attention to here at the outset, that's an 

11 opportunity for you to do that. 

12 Following that, Market Technology Assessment, 

13 Screening Analysis, and Engineering Analysis. All of 

14 the slides will be in your packet. We'll take a break 

mid-morning, round about 11:15 or so. At 11:30, when 

16 we return, Energy Use Analysis and Life-Cycle Cost 

17 Analysis. Lunch today on your own, and we'll talk 

18 about, for those of you that are not familiar with this 

19 building, where you can get lunch and how to navigate 

here in the Forrestal Building when we break. 

21 Following lunch, we'll have a review of the 

22 National Impact Analysis and, following that, Trial 

23 Standard Level Development and Manufacturing Impact 

24 Analysis. Round about 2:30 or so, Utility Impact 

Analysis, Employment Impact Analysis, Environmental 

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1 Impact Analysis, Regulatory Impact Analysis, detailed, 

2 analytical frameworks for you to take a look at and 

3 comment on. We'll take a break mid-afternoon. 

4 There's a final opportunity following the 

afternoon break, round about 3:15 or so, for anybody 

6 here present that wishes to raise any other issues or 

7 say anything else that hasn't been said yet. And then 

8 we'll have closing remarks somewhere around 4:15 or so, 

9 and then we intend to adjourn today by 4:30. That's 

our plan. 

11 Questions, comments here at the outset? And 

12 particularly, are there any issues that people wish to 

13 raise that you don't feel will fit their way into this 

14 agenda? 

 (No response.) 

16 MR. BROOKMAN: Okay. I see none. Then, 

17 let's proceed. Wes Anderson. 

18 Rulemaking Overview 

19 Wes Anderson 

 (PowerPoint presentation.) 

21 MR. ANDERSON: Good morning, everyone. 

22 Again, my name is Wes Anderson. I'm with DOE. We're 

23 here today to present the Department of Energy's 

24 thinking behind the choosing of a particular set of 

trial standard levels for packaged terminal air 

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1 conditioners and packaged terminal heat pumps. We will 

2 discuss our particular issues and give our perspective 

3 on the relevance of these issues. We will also ask for 

4 your input. This is a conversation. We'll ask for 

your input on our perspectives, on our methodologies, 

6 assumptions, and data. 

7 DOE will also present our results based on 

8 these methodologies, assumptions and data, and also ask 

9 for your input on that as well. 

At the end of the presentation, I will come 

11 back and tell you what the next steps will be. One big 

12 thing I want to point out on this slide; May 31st is 

13 the close of the comment period. 

14 Can everyone see this picture? This slide 

just basically explains our statutory authority behind 

16 why we have to do what we're going to do today. Once 

17 ASHRAE raises the efficiency level on PTACs and PTHPs, 

18 DOE is required to review that change and do one of two 

19 things. We can accept ASHRAE's levels or DOE will 

determine, through clear, convincing evidence, that 

21 there needs to be a higher standard and this standard 

22 would result in a significant additional conservation 

23 of energy and is technologically feasible and 

24 economically justified. Then DOE will take a higher 

level. 

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1 This is basically a history of what's 

2 happened with packaged terminal air conditioners and 

3 heat pumps. The big thing to take away here is the 

4 final rule will be published in September 2008. 

Everyone is familiar with this, but for the 

6 new people, this is -- on the left are the seven 

7 factors that EPCA has required DOE to consider in our 

8 rulemakings. On the right is a list of the analyses 

9 that will be presented today. 

This is our proposed amended energy 

11 conservation standard, and it's TSL4. Here it is 

12 broken down by 12 equipment classes, which is -- large 

13 group with the PTACs and PTHPs, packaged terminal air 

14 conditioners and packaged terminal heat pumps. Then 

they're further broken down by category standard, which 

16 is a function of sleeve size, standard size and 

17 nonstandard, and within those groups there are three 

18 cooling capacities for each category. 

19 We will get to the hows and whys throughout 

this conversation, and I want to reiterate this is a 

21 conversation, and to ask for your input and guidance on 

22 our methodologies, analyses, and results. 

23 At this time, I would like to turn it over to 

24 Doug to go through the opening remarks. 

MR. BROOKMAN: Great. So this is the 

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1 opportunity I referenced earlier where any of you can 

2 make opening remarks briefly to emphasize a point or 

3 two, or perhaps several. And also, it's probably 

4 useful to note, for those of you that are new, that we 

have accepted norms here for these meetings. I think 

6 they're not much more than common courtesy. I'd ask 

7 simply that you speak one at a time. Please say your 

8 name for the record. These microphones are very old. 

9 You need to stick your face right in them in order to 

be heard. 

11 Also, there is a court reporter over here. 

12 There's an actual recording. There'll be a record of 

13 this meeting, a complete transcript available to 

14 anybody that wishes to get it. 

But please keep the focus here. If you'd 

16 turn off your cell phones or put them on silent. And 

17 if you need to have a conversation with someone that's 

18 going to last for more than about 20 seconds, it's okay 

19 to take it out of the room. We'll understand. 

Also, I would emphasize what the Department 

21 said earlier. This is your opportunity to comment, so 

22 I do hope that you'll seize the day, that you'll really 

23 make this opportunity work for you today. Okay? 

24 So, how many of you would like to make 

opening remarks? Please raise your hands. 

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1 (Show of hands.) 

2 MR. BROOKMAN: A few might. Yeah, okay. So 

3 let's start over here. And please say -- get us 

4 started. Get close to the microphone and say your name 

for the record. 

6 Brief Opening Remarks from Interested Parties 

7 Jim Benz, GE 

8 MR. BENZ: Typically in a room this size I 

9 don't need a microphone. Jim Benz. I'm with GE 

Consumer and Industrial Products. And, just consistent 

11 with the prepared statement we put forth, GE is pleased 

12 to submit the following comments concerning the energy 

13 conservation standards for packaged terminal air 

14 conditioners. 

GE is a strong supporter of defining energy 

16 standards for appliance products that provide energy 

17 savings and economic benefit to customers and also 

18 benefit the nation as a whole. We believe that the 

19 appliance products should perform the function for 

which they are designed and that appliance standards 

21 should be defined so as not to negatively impact that 

22 performance. 

23 GE first introduced the Zone Line packaged 

24 terminal air conditioner 47 years ago and has been an 

active participant in the market ever since. I'm 

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1 especially proud of the fact that we recently replaced 

2 a number of 42-year-old Zone Lines that were still 

3 working. Unfortunately, the lack of replacement parts 

4 finally resulted in the customer having to replace the 

units with current product. The good news is, the Zone 

6 Lines recently delivered to the customer are 

7 significantly more efficient than the 1960 products 

8 being replaced. 

9 I do not recommend the DOE change their cost 

benefit analysis to reflect a 40-year life-cycle, but 

11 it does give one pause to reflect on the total impact 

12 the decisions you make can have on our nation's long13 term energy consumption and environment. 

14 Consistent with GE's overall commitment to 

improve the efficiency of our products, as evidenced by 

16 our Ecoimagination initiative, we agree with the DOE's 

17 proposed energy conservation standards for PTACs and 

18 heat pumps. Although the higher efficiency using 410A 

19 provides a challenge, GE foresees no significant 

problem in meeting the new standards. 

21 Currently, 70 percent of the AHRI registered 

22 active PTACs meet the proposed standard, and 45 percent 

23 of them exceed the standard by 3 percent. 410A has 

24 been in use for years, and even though switching to it 

will have a negative impact on efficiency, the 

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1 difference can be made up with a combination of higher2 efficiency compressors, motors, as well as increased 

3 heat exchange. 

4 With respect to the particular issues about 

which you requested input, Addendum T, which proposes 

6 changes to nonstandard delineations in ASHRAE's 90.1, 

7 we do not believe it is the intent of this change to 

8 encourage the use of less efficient, nonstandard PTACs. 

9 The wording of the change, however, may encourage the 

design of new products that are only slightly smaller 

11 than the 42-by-16 in size. For example, somebody could 

12 come out with a 41 3/4-by-15 3/4-inch product in order 

13 to circumvent the intent. 

14 We recommend the definition of the 

nonstandard unit be set significantly below that which 

16 is proposed, consistent with the product that is 

17 currently available on the market. 

18 Number two, we agree that DOE -- with DOE 

19 that extrapolating engineering analysis to cooling 

capacities for which complete analysis was not 

21 performed is reasonable. We agree with the EER and COP 

22 pairings for PTHPs based on current ARI directory 

23 information. We expect no rebound effect for the PTAC 

24 and PTHP industry. We do not expect any increase in 

the installation or maintenance cost of 410A product. 

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1 We do, however, expect repair costs to increase in 

2 order to recoup the cost of new equipment to hand 410A. 

3 We would expect there to be some increase in 

4 efficiency over the next 30 years even without the new 

regulation. However, the extent of the savings would 

6 be significantly less and the relative economic impact 

7 on manufacturing and life-cycle cost would be the same. 

8 Without the proposed standard, we would 

9 expect the overall industry efficiency of PTACs and 

PTHPs to be significantly lower and improvements to be 

11 implemented later. 

12 We agree with the NES forecasted base case 

13 distribution of efficiencies after the introduction of 

14 410A and implementation of proposed energy conservation 

standards. We do not expect PTAC and PTHP customers 

16 switching to other, less efficient equipment if the 

17 proposed standard is implemented. 

18 GE agrees with the proposed standard level 

19 TSL4 for standard-size PTACs and PTHPs. We are 

confident the higher efficiency levels can be obtained 

21 with 410A. We agree that TCL4 is the most appropriate 

22 energy standard for 2012 implementation. 

23 Although we do recognize the potential for 

24 customers to switch to PTACs because of the higher 

proposed PTHP standards, we do not expect this will be 

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1 significant. Contrary to what DOE concluded from their 

2 research, we have found our customers to be very 

3 concerned about the efficiency of their PTACs and PTHPs 

4 because the energy costs of these products comprise 

such a large percentage of their operating expenses. 

6 For the vast majority of customers, the 

7 savings realized by using heat pumps is significantly 

8 greater than projected savings from the proposed 

9 standard alone. Increasing the premium on a PTHP 

versus a PTAC because of a higher standard would not 

11 significantly change the cost benefit analysis to the 

12 customer. 

13 GE is not in the nonstandard-size PTAC and 

14 PTHP market. We do caution that nothing be done to 

encourage the use of nonstandard-size, less efficient 

16 product in new construction. We would support the 

17 implementation of energy guides similar to the ones 

18 currently used on window air conditioners, and GE 

19 continues to be a strong supporter of the Department's 

efforts to improve the efficiency of the nation's 

21 appliances. 

22 We believe that the standard revisions should 

23 be appropriate for the product, practical, and of real 

24 value to the American consumer. We urge the Department 

of Energy to adopt TSL4 for packaged terminal air 

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1 conditioners. 

2 MR. BROOKMAN: Thank you. Thanks, Jim. 

3 Other comments here at the outset? Please. Is it 

4 Scott? 

Comments by Scott Toukatly 

6 ECR International 

7 MR. TOUKATLY: Yes. I guess I'm not sure if 

8 I agree with --

9 MR. BROOKMAN: Scott, please say your name 

for the record, and get real close to that mic. 

11 MR. TOUKATLY: Scott Toukatly. 

12 MR. BROOKMAN: Thank you. Keep close. 

13 MR. TOUKATLY: I'm not sure if I agree. I 

14 know we went through that very quickly, but I'm not 

sure, coming from the nonstandard PTAC industry, if I 

16 agree with much or all of that that the gentleman from 

17 General Electric went through. I know we've got these 

18 14 comments here, and that was going to be my next 

19 question, was whether or not we were going to go 

through those one by one or that was just something 

21 that had to be given to the DOE by May 31st, or if we 

22 were actually on the agenda today to go through each 

23 one of those questions that the DOE was seeking comment 

24 for. 

MR. BROOKMAN: Yeah, it's on the agenda to be 

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1 covered today, and it's going to be -- they will be 

2 covered in sequence in the slide presentations. So 

3 there will be opportunity to comment one by one. 

4 MR. TOUKATLY: I would just say this. I 

don't believe that nonstandard PTACs and new 

6 construction PTACs cross paths hardly at all. So 

7 talking about more stringent and less stringent, as a 

8 matter of fact the DOE is proposing more stringent 

9 standard increases on nonstandard than they are on 

standard. 

11 So I don't believe that people have the 

12 ability to go from a standard PTAC to a nonstandard 

13 just because it meets a lesser efficiency. That's not 

14 what generates the need to buy a nonstandard. It's the 

given hole in the wall, if you will, that's already 

16 there. So people don't buy nonstandard PTACs in new 

17 construction applications, so they don't cross paths. 

18 Again, I would just say that the proposed 

19 increases that the DOE is proposing are much more 

stringent on nonstandard, so we have concerns. 

21 MR. BROOKMAN: Okay. Thank you. And you'll 

22 get a chance to say much more about that as the day 

23 progresses. 

24 Other opening remarks here? Harvey Sachs. 

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1 Comments by Harvey Sachs 

2 American Council for an Energy Efficiency Economy 

3 MR. SACHS: I think this is on. This is 

4 Harvey Sachs, ACEEE. Just as follow-up on the 

nonstandard, one of the issue that sort of surprised us 

6 that we did not see treated as a possibility is a 

7 phase-out of this equipment class, perhaps in 10 years, 

8 that we handle the problems that have been brought out 

9 by simply sunsetting that equipment category and its 

availability 10 years from now, or 10 years from the 

11 adoption of the standard. It seems to be an item worth 

12 discussing. 

13 MR. BROOKMAN: Okay. 

14 MR. SACHS: Let me just finish with that. 

The present market is very small. I believe DOE 

16 estimates 40,000 units a year total, spread among 

17 several manufacturers. We believe that there will be 

18 substitutes available with comparable or better 

19 efficiency. 

MR. BROOKMAN: Karim. 

21 Comments by Karim Amrane 

22 The Air Conditioning, Heating, and Refrigeration 

23 Institute 

24 MR. AMRANE: I was not planning to make a 

statement, but since we are now going to the 

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1 discussion, I believe --

2 MR. BROOKMAN: Thank you. 

3 MR. AMRANE: We got into the replacement 

4 market PTAC -- this is not new. I mean, some people 

are coming up with a statement that we're just seeing 

6 that part of that. It has been around in ASHRAE -- for 

7 almost 10 years, so this is not new. And there is a 

8 need for it. As Scott just mentioned, it's not a 

9 question of phasing out the product, it's a question of 

providing a need to customers who don't have in their 

11 wall a standard-size slot. So you have to provide this 

12 product just to provide it for customers who have 

13 certain situations and that don't really -- can be met 

14 by the standard-size PTACs. So that's the point on 

replacements. 

16 MR. BROOKMAN: Okay. Thank you. Please, 

17 Scott. 

18 MR. TOUKATLY: Just one more issue on that. 

19 I'm a little concerned that the DOE actually has 

accurate shipment data for non-standard PTACs and 

21 PTHPs. There's only two companies that even 

22 participate with ARI. There's certainly one large 

23 company that doesn't report numbers, and there are many 

24 others -- I shouldn't say "many." There are some 

small, other companies that are out there. 

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1 So I guess I'm not quite clear, and I don't 

2 know if that will come out, where ARI is getting -- or, 

3 I'm sorry, the DOE is getting their shipment 

4 information from and if it's accurate. 

MR. BROOKMAN: Can you suggest how the 

6 Department would obtain that shipment information? 

7 MR. TOUKATLY: Well, I guess I'm thinking 

8 back to the manufacturer's interviews. I'm not quite 

9 clear if Navigant visited all of these manufacturers, 

especially one that is a major player that is not 

11 affiliated with ARI but is probably the leader in the 

12 industry. So they account for many PTAC and PTHP 

13 shipments. I don't know if they were visited, if they 

14 shared shipment information, if that information was 

good information. 

16 So I guess I would just say that I'm 

17 concerned about shipment data. 

18 MR. BROOKMAN: Do you want to do that now or 

19 do you want to do it in the course of the presentation? 

MS. ARMSTRONG: It doesn't matter. 

21 MR. BROOKMAN: The shipments forecast will be 

22 covered in detail as we go along here, so that will be 

23 the time to discuss that. 

24 Other questions or particularly comments here 

at the outset? 

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1 (No response.) 

2 MR. BROOKMAN: Okay. Then let's proceed, 

3 then, with the slide presentation, followed by question 

4 and comment. And first up is Ashley Armstrong. 

Market and Technology Assessment, Screening Analysis, 

6 and Engineering Analysis 

7 Ashley Armstrong 

8 (PowerPoint presentation.) 

9 MS. ARMSTRONG: Okay. Good morning, 

everyone. My name is Ashley Armstrong, and I will be 

11 discussing the market impact, the screening, and the 

12 engineering analysis efforts. These three analyses 

13 represent the foundation of all subsequent analyses DOE 

14 has conducted for this rulemaking. We'll cover the 

rest of the rulemaking analyses throughout the day. I 

16 invite you to comment on anything that's presented 

17 today. 

18 There's additional information found in the 

19 Notice of Proposed Rulemaking, as well as the Technical 

Support Document. Both can be found on DOE's website. 

21 Chapter 3 corresponds to the MTA, Chapter 4 

22 corresponds to the screening, and Chapter 5 corresponds 

23 to the engineering. 

24 Okay. So let's begin with the market and 

tech assessment, as I call it, the MTA. The purpose of 

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1 the MTA is to characterize the PTAC and PTHP markets, 

2 to determine available equipment efficiencies and 

3 shipments by equipment class. Some of the topics that 

4 are covered in the MTA include equipment definitions, 

equipment classes, manufacturers, unit shipments, 

6 market shares, regulatory and non-regulatory incentives 

7 and initiatives, as well as technologies that can be 

8 used to reduce energy consumption. 

9 Next is the screening analysis. The purpose 

of the screening analysis is to identify technology 

11 options which can increase the efficiency and to apply 

12 the screening criteria established by DOE to determine 

13 which design options to evaluate and which of those to 

14 screen out. 

Once the screening analysis is complete, DOE 

16 takes the remaining technologies and calls those design 

17 options. DOE then reviews these design options in the 

18 engineering analysis. 

19 The engineering analysis is conducted to 

characterize the relationships between manufacturing 

21 costs and energy efficiency. For PTACs and PTHPs, 

22 we've evaluated the design options that improve the 

23 efficiency of the equipment relative to the baseline 

24 unit. 

So let's start off with the market 

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1 characteristics. As part of the market and tech 

2 assessment, as I just said, we address different 

3 topics, such as the industry characteristics, 

4 manufacturers, market shares, equipment classes, units 

shipped. 

6 DOE found that the standard size industry is 

7 comprised primarily of five major manufacturers which 

8 account for approximately 90 percent of the market 

9 share. There are approximately 380,000 units shipped 

per year, and most of the standard-size equipment is 

11 made overseas. There is only one major manufacturer 

12 manufacturing in the U.S. 

13 DOE found that there are three major 

14 manufacturers of nonstandard size equipment. The 

nonstandard-size market is much smaller, and DOE 

16 estimated that there's about 70,000 units per year. 

17 DOE obtained their shipment information from 

18 AHRI, and the way it's broken down between standard 

19 size and nonstandard size, just to answer your 

question, Scott; we assume that 85 percent of the total 

21 shipments is standard size and 15 percent of that, or 

22 the rest of the shipments, is nonstandard. So, 15 

23 percent equals around 70,000 units per year. 

24 MR. TOUKATLY: So it's just an estimation? 

MS. ARMSTRONG: We got total shipment data 

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1 from three, and we worked out what the rates are. 

2 MR. BROOKMAN: Karim, do you want to just 

3 qualify that? 

4 MR. AMRANE: Yes. You got shipment data from 

us, but we made it clear that the shipment data 

6 contained some of the replacement market, not all of 

7 it. 

8 MS. ARMSTRONG: Yeah, yeah. So it's 15 

9 percent. 

MR. TOUKATLY: And I would say that if it's 

11 missing a major manufacturer, it's missing quite a bit. 

12 MS. ARMSTRONG: I can't tell you which ones 

13 it is and which ones we talked to as far as, you know, 

14 interviews to get this information. But if you have a 

better idea of what it should be or a difference, we 

16 welcome your comment. 

17 MR. BROOKMAN: Ashley, did you have the 

18 chance to interview all of the manufacturers? 

19 MS. ARMSTRONG: I can say that I contacted --

I tried to contact everyone. I can't say who I exactly 

21 talked to. 

22 MR. BROOKMAN: Ron Lewis. 

23 MR. LEWIS: Okay. You might have just 

24 noticed the court reporter strolling down the room. 

You need to say your name and your affiliation so she 

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1 can get it on the transcript, please, before you talk. 

2 MR. BROOKMAN: Okay, okay. We'll do that 

3 again. That was Scott who last spoke. 

4 So, Ashley, will you answer that question 

again? 

6 MS. ARMSTRONG: Sure. I'm Ashley from 

7 Navigant. 

8 (Laughter.) 

9 MS. ARMSTRONG: Scott, I can't tell you 

exactly who I talked to. But I can tell you that I 

11 tried to contact everyone in the industry. 

12 MR. BROOKMAN: I see. Okay. 

13 MS. ARMSTRONG: Major and minor. 

14 MR. BROOKMAN: Just to be clear, Wendy, 

usually when I call someone by name, then they -- you 

16 know that that's the acknowledgment of who's going to 

17 speak next. And then they'll say their name, and 

18 that's all I need to do, I think, okay? Okay. 

19 Okay. Does that answer that question? 

Scott. 

21 MR. TOUKATLY: Scott Toukatly. If those --

22 if there are particular manufacturers that weren't 

23 contacted, did you estimate numbers for them or did you 

24 not take it into account? 

MS. ARMSTRONG: We estimated that that 70,000 

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1 unit number is for the entire industry, across the 

2 board. 

3 MR. TOUKATLY: I'll just go on record as 

4 saying I don't know what the number is. 

MS. ARMSTRONG: Okay. 

6 MR. TOUKATLY: I'm just concerned that it's 

7 all taken into account. That's all. 

8 MS. ARMSTRONG: Okay. Thank you. 

9 MR. BROOKMAN: Okay. 

MS. ARMSTRONG: So, additional information 

11 that's not presented on the slide is also found in 

12 Chapter 3 of the TSD as well as the Notice of Proposed 

13 Rulemaking. 

14 When evaluating and establishing energy 

conservation standards, DOE generally divides covered 

16 equipment into equipment classes by the type of energy 

17 used, the capacity or other performance-related 

18 features that affect the energy efficiency of the 

19 equipment. 

So for PTACs, DOE proposed 12 equipment 

21 classes in the NOPR. These equipment classes are 

22 differentiated by equipment type -- that is, air 

23 conditioner or heat pump -- as well as the wall space 

24 dimensions, which DOE is referring to as standard and 

nonstandard, and then the cooling capacity. 

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1 For differentiating nonstandard equipment, 

2 DOE proposed two alternative methods in the NOPR. The 

3 first is to make the equipment classes consistent with 

4 the ASHRAE Standard 90.1 (1999), their definitions of 

new construction and replacement. And then the second 

6 is -- the alternative one is to make the equipment 

7 class definition consistent with Addendum T to ASHRAE 

8 Standard 90.1 (2007). 

9 DOE stated specifically in the NOPR that DOE 

understands that Addendum T to ASHRAE Standard 90.1 

11 (2007) is out for public review and comments are being 

12 addressed currently by ASHRAE. If ASHRAE is able to 

13 adopt Addendum T by -- prior to September 2008, the 

14 final rule date, DOE proposes to incorporate the 

definitions within Addendum T in the final rule. 

16 At this time I'm going to pass the 

17 presentation to Doug to facilitate a discussion on 

18 DOE's selected equipment classes. In particular, we'd 

19 like to seek your comment on the delineations within 

ASHRAE Standard 90.1 (1999) and Addendum T to ASHRAE 

21 Standard 90.1 (2007) for nonstandard size equipment. 

22 MR. BROOKMAN: Okay. Thank you. Ashley, 

23 Slide 7, is it a complete picture of the way the 

24 product classes have been --

MS. ARMSTRONG: That's only one method. 

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1 That's only ASHRAE 90.1 (1999). 

2 MR. BROOKMAN: I see. Okay. So then, 

3 comments related to how these equipment classes are 

4 organized? Karim. Scott. 

MR. TOUKATLY: I was just going to say --

6 Scott Toukatly -- I don't have further comment other 

7 than I think it was a couple of the ARI companies that 

8 helped address that language. So obviously, I'm all 

9 for it. 

MR. BROOKMAN: Okay. Thank you. Yes, Mary 

11 Ann. 

12 MS. STOJKOVSKI: Mary Ann Stojkovski, McQuay. 

13 We are definitely in agreement with ECR on the new --

14 on the definition and believe strongly we need to adopt 

it. 

16 MS. ARMSTRONG: And just to clarify, that's 

17 the Addendum T definition. 

18 MS. STOJKOVSKI: That's correct. 

19 MR. BROOKMAN: Okay. Thank you. 

MR. AMRANE: Karim Amrane with AHRI. We were 

21 the main proponent of this addendum, and it went 

22 through public review. There were a couple of comments 

23 received which have certainly nothing to do with the 

24 addendum itself. Those were addressed by the 

committee. 

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1 So I guess -- I mean, I'm kind of surprised 

2 to hear the comment made by GE on that product class --

3 on the replacement product class, but I have to remind 

4 GE and others that ASHRAE had these product classes 

established in 1999. And I've never heard of GE 

6 complaining about it until today. 

7 So what we've done as far as Addendum T is 

8 really to clarify the designation. Before, ASHRAE used 

9 to call product classes as new construction versus 

replacement, and it was confusing to the marketplace. 

11 So we came back to the committee with the name -- with 

12 standard size and nonstandard size to clarify that. 

13 We also made a slight change in definition to 

14 basically qualify nonstandard size PTACs as being less 

than 16 inches wide and that's -- and all less than 42, 

16 and that's about it. So we -- it's not a major change 

17 that we made to ASHRAE 40.1. As I said, this has been 

18 around for 10 years almost. 

19 MR. BROOKMAN: Other comments related to 

this, these equipment size issues? And also, the 

21 entire equipment class organization scheme that's 

22 presented. 

23 MR. BENZ: Jim Benz from GE. 

24 MR. BROOKMAN: Get close, Jim. 

MR. BENZ: We see no evidence of any current 

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1 problem with the definitions. Our only concern is 

2 writing it into a regulation that has the force of law 

3 for efficiency allows a potential loophole for somebody 

4 to come in at a later date and come in with a product 

that would, by definition, be nonstandard but in fact 

6 be used in more standard installations and for that 

7 purpose. 

8 Our only suggestion would be that the non9 standard size PTACs are a known entity in the market 

today. We should be able to determine that the largest 

11 nonstandard size PTACs is X, and our recommendation 

12 would be to use that dimension as opposed to 42-by-16. 

13 We do see no current problems today and, if people act 

14 rationally, would not necessarily see problems in the 

future. 

16 The issue we have is the potential for 

17 somebody to act less rationally and come out with a 

18 product that would be 41 3/4 inches wide by 15 3/4 

19 inches wide, would in fact work in a standard sleeve, 

and although we have a sticker that says "Not for new 

21 construction," in some applications a product like that 

22 could even be used in existing properties. 

23 So, would somebody doing that be 

24 circumventing the intention of the regulations? 

Absolutely. So we are recommending that we look at a 

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1 standard that would prevent anybody from circumventing 

2 the intent of the regulation and the intent of the 

3 classification. 

4 MR. BROOKMAN: By modifying the definition. 

MR. BENZ: By modifying the dimensional 

6 definition to -- the nonstandard size is a known 

7 entity. So we know. And forgive me that I don't, we 

8 don't participate in that standard. But if the largest 

9 nonstandard size in the market is 36 inches or 38 

inches or whatever it is, you could avoid a potential 

11 loophole by defining or differentiating the two 

12 categories by the largest nonstandard PTAC available in 

13 the marketplace today. That would further encourage 

14 people to only use that in a situation where it's 

absolutely necessary and it's cost prohibitive to do 

16 something else. 

17 I think the end result would be essentially 

18 the same. I think operationally today the end result 

19 is the same. But our only concern is somebody coming 

out with a product with the intent of circumventing 

21 both the DOE regulations and what ASHRAE is trying to 

22 define. 

23 MR. BROOKMAN: Karim. 

24 MR. AMRANE: Karim. I'm on AHRI. I think we 

took care of your concern by putting a limit on the 

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1 square footage area as well. So it's not just the 

2 dimensions but it's also the cross-sectional area. So 

3 I believe that your concern is being addressed there. 

4 MR. BROOKMAN: Okay. Thank you. Other 

comments on equipment class organization? Harvey 

6 Sachs. 

7 MS. PINTO: Excuse me. I have a question. 

8 MR. BROOKMAN: Yes, Francine Pinto. 

9 MS. PINTO: Francine Pinto, DOE. Karim, 

could you tell me the status of Addendum T? 

11 MR. AMRANE: As I mentioned -- Karim Amrane 

12 with AHRI. As I mentioned before, it went out for 

13 public review. The public review has closed. And as I 

14 said, there were a couple of comments that were 

submitted which had absolutely nothing to do with the 

16 addendum. It was from a gentleman who had more issues 

17 with the process than anything else. 

18 Those comments were rejected by the committee 

19 because they were not addressing the addendum itself. 

So this is it. I mean, as far as ASHRAE, ASHRAE went 

21 through the process, solicited comments from the 

22 public, and nothing came to the committee, so. 

23 MS. PINTO: Is there a formal adoption 

24 process where you then publish that it's done? 

MR. AMRANE: Yes. Yes, there is. And that 

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1 will be, I believe, in the June meeting of ASHRAE. 

2 MS. PINTO: Thank you. 

3 MR. BROOKMAN: So that was Francine followed 

4 by Karim one more time. 

Okay. So, additional comments, then? Yes, 

6 Harvey Sachs. 

7 MR. SACHS: Harvey Sachs, ACEEE. Several 

8 years ago we had the question arise of the small 

9 diameter, high velocity residential central air 

conditioning. And we were able to convince our 

11 colleagues in the environmental community that allowing 

12 a lower efficiency standard for that equipment class 

13 was acceptable because of two factors. 

14 One, sales were low, so the national energy 

impact was small, and two, there was language 

16 constructed, and it was modified through this DOE 

17 process, to give us the best possible assurances that 

18 there would not be a loophole through which the 

19 standard process, for let's call it standard equipment, 

was not subverted. 

21 I think it's important for DOE to assure the 

22 broad community and the stakeholders in this room that 

23 the exceptions for nonstandard equipment meet those 

24 tests. Although I have not looked at this issue in 

depth, I don't think it makes sense to proceed without 

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1 answering GE's questions. What is the largest 

2 nonstandard sleeve that is now sold that is now used in 

3 older buildings. And, to consider setting the limit at 

4 that rather than the loophole-enabling 42 by 16. 

MR. BROOKMAN: Thank you. Scott? 

6 MR. TOUKATLY: I believe that's been done, 

7 Harvey. As a matter of fact, he's mentioned what the 

8 maximum limit is in square inches of face area in that 

9 definition. So that's been done. 

I don't know -- it doesn't come to mind what 

11 the largest one is right now. There's obviously many 

12 of them. I didn't come prepared with the answer to 

13 that question what the largest one is and what it 

14 measures. 

But I can also tell you this, that even this 

16 definition -- I can't speak for other companies, but 

17 we're prepared that that probably eliminates a couple 

18 of our offerings now. So we tried to come up with a 

19 fair definition that was fair to new construction and 

fair to the industry. And also, actually in that 

21 definition, it probably eliminates some of our present 

22 offer right now. 

23 MR. BROOKMAN: Mary Ann, I don't want to put 

24 you on the spot, but I see you nodding your head. Do 

you wish to comment here? 

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1 MS. STOJKOVSKI: Yes. He's absolutely 

2 correct that there are some that would fall into the 

3 standard that I would consider nonstandard equipment. 

4 But we tried to make it fair and I think the definition 

is very reasonable. The need is there. This equipment 

6 is out there. We cannot put a standard piece of 

7 equipment in these buildings. These buildings are 

8 going to be there. So we really have to think about 

9 the market and consumers' needs. What are they going 

to do. 

11 I mean, you could make it very stringent on 

12 us and chase, you know, I'd say the reputable 

13 manufacturers out of this market, but you're not going 

14 to make this business go away. You're going to see 

somewhat of a black market turn up, and people are 

16 going to find this equipment. And it's going to be a 

17 lot less efficient than what you even think. 

18 MR. BROOKMAN: And Mary Ann, you represent 

19 who? 

MS. STOJKOVSKI: McQuay International. 

21 MR. BROOKMAN: Thank you very much. Thank 

22 you. Harvey Sachs. 

23 MR. SACHS: Please, it's not my goal to be 

24 obstructionist but to ask the Department for some 

additional information. For example, not having 

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1 reviewed Addendum T, I don't know the cross-sectional 

2 areas. Karim, do you remember that? 

3 MR. BROOKMAN: Karim? 

4 MR. AMRANE: Six hundred or so. 

MR. SACHS: Six-seventy square inches? Thank 

6 you. That in itself is helpful, but I do think that if 

7 we're going to go forward with this we need the 

8 assurance that this is not loophole-inducing. That's 

9 all. 

MR. BROOKMAN: Okay. 

11 MS. ARMSTRONG: Just to note --

12 MR. BROOKMAN: Ashley. 

13 MS. ARMSTRONG: -- their exact wording are 

14 presented in the NOPR. So both the addenda, the exact 

wording from them and everything, like the square 

16 inches and how they're different, are discussed in the 

17 NOPR in this section. So you can also refer to that. 

18 MR. BROOKMAN: Thank you. 

19 MS. ARMSTRONG: Sure. 

MR. BROOKMAN: Thank you. Other comments on 

21 Slide 15, Equipment Class Organization? 

22 (No response.) 

23 MR. BROOKMAN: Okay. 

24 MS. ARMSTRONG: Okay. Next I'll be speaking 

about the screening analysis. The purpose of the 

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1 screening analysis is to evaluate options to improve 

2 the energy efficiency and to determine what 

3 technologies to consider further and which to screen 

4 out. 

DOE identified a range of technology options 

6 in the market and tech assessments for further 

7 consideration. DOE will now review these technologies 

8 with the screening criteria that are presented on this 

9 slide. The screening criteria include technological 

feasibility, practicability to manufacture and sell and 

11 service, adverse impacts on product utility or product 

12 availability, and adverse impacts on health and safety. 

13 The technology we consider for further 

14 consideration in the engineering include higher 

efficiency compressors, increased heat exchanger area, 

16 and -- heat exchanger coils, all of which manufacturers 

17 use today. 

18 Next I'll be speaking about the engineering 

19 analysis. The purpose of the engineering analysis is 

to take a baseline model and improve the efficiency to 

21 derive a cost efficiency relationship. The cost 

22 efficiency relationship developed as part of the 

23 engineering analysis is very critical input of the 

24 life-cycle cost and payback period analysis, the 

national impact analysis, as well as the manufacturer 

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1 impact analysis. 

2 For the engineering analysis, DOE reviewed 

3 all 12 equipment classes that we presented earlier. 

4 DOE examined standard size and nonstandard size PTACs 

and PTHPs separately. For standard size equipment, DOE 

6 examined two specific -- which include 9,000 Btu/h and 

7 12,000 Btu/h -- capacity is at the highest shipment 

8 volume. 

9 For nonstandard size equipment, DOE only 

looked at one cooling capacity in the middle range, 

11 which was 11,000 Btu/h. 

12 For this analysis DOE used a design option 

13 approach which involved consultation with outside 

14 experts, review of publicly available data, performance 

information, as well as physical teardowns and modeling 

16 of manufacturing costs. 

17 Lastly, DOE performed an alternative 

18 refrigerant analysis to characterize the performance 

19 implications of the R410A. Currently, DOE recognizes 

there are no commercially available PTAP and PTHP 

21 equipment that utilize R410A. The engineering analysis 

22 estimated system degradation based on studies in 

23 similar market transformations, and we're going to 

24 speak more about the R22 data in a couple of slides. 

So for standard size equipment, the energy 

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1 efficiency equation, EER, is a function of cooling 

2 capacity. Therefore, for these equipment classes DOE 

3 explicitly analyzed two cooling capacities, 9,000 and 

4 12,000 Btu/h, to further investigate the slope of the 

energy efficiency equation. 

6 To derive the energy efficiency equation for 

7 all cooling capacities within the range, the 7,000 to 

8 15,000 range, DOE used the results from the 9,000 and 

9 12,000 and then extended those results to the other 

cooling capacities. In other words, we did not use the 

11 same equation -- the same slope of the equation as in 

12 ASHRAE Standard 90.1 (1999). 

13 DOE invites comments on the extension of the 

14 energy conservation standards on the two cooling 

capacities with the highest number of shipments to the 

16 full cooling capacity range. 

17 MR. BROOKMAN: Comments on that issue? 

18 MR. SACHS: Harvey Sachs. I guess I'm a 

19 little confused why the axes aren't labeled. We have a 

purely conceptual pair of slides. 

21 MS. ARMSTRONG: You mean with numbers? 

22 MR. SACHS: Yeah. 

23 MS. ARMSTRONG: Because for each TSL, which 

24 I'll show you later, there's a different equation. But 

basically what we're showing you is that the slopes 

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1 aren't parallel. In other words, we've looked at --

2 for 9,000 and 12,000, we've plotted the results and 

3 then we found a new equation altogether. So for this 

4 equation, it's actually -- it's a little steeper than 

the ASHRAE slope. The proposed standard is. 

6 MR. BROOKMAN: Karim. 

7 MR. AMRANE: Karim Amrane, AHRI. I guess, 

8 when you -- when we looked at this issue of efficiency 

9 versus capacity, in particular with the R410A 

refrigeration, we noticed that there was more 

11 degradation at the larger capacity than at the lower 

12 capacity. How does one take into account --

13 MS. ARMSTRONG: That's why we did the 

14 analysis on two different capacities, the 9,000 and 

12,000. We changed the slope such that for 12,000 the 

16 EER requirements -- 12,000 and above the EER 

17 requirements would be lower. In other words, it would 

18 more meet, like, the ASHRAE and they would start to 

19 converge. 

MR. BROOKMAN: Other questions on Slide 17? 

21 Or comments. Please. 

22 MR. MARKUSZ: I've got a question. 

23 MR. BROOKMAN: Just say your name, David. 

24 MR. MARKUSZ: My name is David Markusz. I 

guess the question is, the slope is based on the 

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1 degradation from the R410A or is it based on what you 

2 saw in the actual units that you analyzed? 

3 MS. ARMSTRONG: It's based on the analysis, 

4 the full analysis, which was done on R410A. So, right 

from the engineering, we assumed a certain degradation, 

6 and I'll get to those percentages in a minute. But 

7 it's like -- and then we built the full analysis off --

8 on that. 

9 MR. MARKUSZ: Okay. Thank you. 

MS. ARMSTRONG: Okay? Now for nonstandard 

11 size equipment. For nonstandard size equipment, we 

12 only fully examined one cooling capacity within range, 

13 and that was in the middle of the range, 11,000. We 

14 proposed to streamline the analysis by maintaining the 

ASHRAE slope and then just finding a new equation with 

16 the results based on the 11,000 analysis. 

17 So DOE now invites comments on the extension 

18 of energy conservation standards from one cooling 

19 capacity to other cooling capacities maintaining the 

ASHRAE slopes for nonstandard equipment. 

21 MR. BROOKMAN: You can see the same sort of 

22 diagram with the slope compared to the ASHRAE Standard 

23 90.1 slope. 

24 MR. TOUKATLY: Scott Toukatly. I guess I 

would just reiterate the same concern for nonstandard. 

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1 Once -- I mean, we've seen it in calculations. We've 

2 also seen it in reality. Certainly once you get up to 

3 the upper range of that 7- to 15,000, we feel that's a 

4 little too stringent once you get up into a 15,000 

nominal and then certainly an 18,000 nominal unit with 

6 the technology that there's today. It falls off 

7 considerably. Maybe that's a strong word. It falls 

8 off more rapidly once you get up into 15- and 18,000 

9 Btu nominal. We're seeing that in reality. 

MR. BROOKMAN: Can you say what it should be? 

11 MR. TOUKATLY: As far as degradation? 

12 MR. BROOKMAN: Yeah. 

13 MR. TOUKATLY: I think we're seeing the same 

14 degradations in reality as -- you know, I was reading 

the information that we supplied to this process as an 

16 industry about two years ago, and we're seeing very 

17 similar degradations from nominal capacity on down as 

18 was in the letter that we submitted from ARI in this 

19 process two years ago. 

MR. BROOKMAN: I thought you were suggesting 

21 at the upper end of the range it was more. 

22 MS. ARMSTRONG: I think he's talking about 

23 the R410A degradation --

24 MR. TOUKATLY: R410A degradation. 

MS. ARMSTRONG: That's on the next couple of 

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1 slides. We'll get to it. 

2 MR. TOUKATLY: Specifically, just R410A 

3 degradation as you go up in Btu nominal capacity, the 

4 efficiency drops off at a more considerable rate than 

in this range that was evaluated here. 

6 MR. BROOKMAN: Okay. So, additional or 

7 perhaps final comments on Slide 18? 

8 (No response.) 

9 MS. ARMSTRONG: Okay. 

MR. KINGSBURY: I've got a question. 

11 MR. BROOKMAN: Yes. Question, please. 

12 Please say your name for the record, Ted. Ted, say 

13 your name for the record, please. 

14 MR. KINGSBURY: Ted Kingsbury. 

MR. BROOKMAN: Thank you. 

16 MR. KINGSBURY: I have a question, but I'm 

17 not sure it's the appropriate spot. 

18 MS. ARMSTRONG: That's okay. 

19 MR. KINGSBURY: In the detailed summary, 10 

CFR Part 431, page 13, it talks about a 2 percent 

21 increase. Is that R22 or is that 410A? 

22 MS. ARMSTRONG: I'm not sure exactly what 

23 you're going -- you're speaking of, so maybe when we 

24 take a break you could show it to me and I could try to 

answer your question, then? 

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1 MR. BROOKMAN: Would you cite where it is 

2 again? 

3 MS. ARMSTRONG: And just, without the CFR in 

4 front of me, I'm not exactly sure what you're --

MR. BROOKMAN: Let's do -- let's show it at 

6 the break. 

7 MR. KINGSBURY: DOE expects the price of the 

8 high efficiency PTAC and PTHP equipment to be 

9 approximately 2 percent higher than the average price 

of this equipment to date. And I think they're talking 

11 about the cost added. The energy efficiency gains will 

12 result in lower energy costs. We just have a concern, 

13 I guess, that the cost model truly reflects what the 

14 new energy standard will require as far as --

MR. BROOKMAN: Ted, will you say again what 

16 the cite is? 

17 MS. ARMSTRONG: I got it. 

18 MR. BROOKMAN: You got it? 

19 MS. ARMSTRONG: Yeah. 

MR. BROOKMAN: Okay. Yeah, Ashley's got it. 

21 MS. ARMSTRONG: I would encourage you to look 

22 at the manufacturer and cost estimates that are broken 

23 down by -- equipment by energy efficiency level. 

24 They're presented in Chapter 5 of the TSD. Those are 

the actual manufacturing costs the cost model 

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1 estimates. As far as like the capital costs and the 

2 conversion costs that you would have to make to your 

3 plants and facilities and stuff like that, that's 

4 estimated in Chapter 13 of the TSD. So you can look at 

those and comment on those as well. 

6 MR. BROOKMAN: Do we have a copy of the TSD 

7 here today? 

8 MS. ARMSTRONG: I do have one over there that 

9 I can show you at the next break if you'd like to see 

it. 

11 MR. KINGSBURY: I guess at 10,000 the concern 

12 is making sure that the life-cycle payback energy 

13 savings includes the appropriate cost addition based on 

14 the technology options. 

MS. ARMSTRONG: Okay. 

16 MR. KINGSBURY: So, maybe there's a better 

17 time to, I guess, drill down on that a little bit. 

18 MS. ARMSTRONG: Sure. 

19 MR. KINGSBURY: But if the 2 percent really 

references 410A, then I guess I think it's wrong. 

21 MS. ARMSTRONG: Okay. Great. Okay. Well, 

22 that will segue right into our next slide. 

23 MR. BROOKMAN: Do you have an additional 

24 comment? Harvey Sachs. 

MR. SACHS: Harvey Sachs just with a 

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1 question. It seems as though this section includes the 

2 screening analysis, but I've seen those slides. Am I 

3 missing something? 

4 MS. ARMSTRONG: No. There's only one slide 

on the screening analysis, and we talked about the four 

6 criteria and then the three technology options -- there 

7 are three design options to be considered further. 

8 Slide -- I went through it. Slide 14, I 

9 believe. 

MR. BROOKMAN: Did you expect some -- that 

11 kind of information? 

12 MR. SACHS: I'm sorry. I had a call and I 

13 must have been out at that time. 

14 MS. ARMSTRONG: Sure. 

MR. SACHS: I would like to make a comment on 

16 that. I'm not sure if this is the right time. 

17 MR. BROOKMAN: Go right ahead. Now would be 

18 the time. 

19 MR. SACHS: This is Harvey Sachs, ACEEE. In 

light of Mr. Lewis's comments earlier on the other 

21 product class about my style, I'm trying to temper my 

22 tone. But I guess I'm very much concerned about the 

23 rather superficial treatment of the technologies that 

24 were screened out. 

We'll address this in greater detail in our 

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1 comments, but 4.3.1 is referred to as "scroll 

2 compressors." It makes no mention at all of the wide3 scale availability of small-capacity compressors of 

4 rather high efficiency in other product classes. I 

would refer as two examples to East Asian mini splits, 

6 which don't have quite the same volumetric constraints, 

7 but I'd also suggest the availability of the inherently 

8 variable speed linear compressors used by OG and I 

9 believe others by now in refrigerators with roughly the 

same Btu capacity for the compressors. 

11 So we're concerned at the very narrow 

12 approach taken to the question of availability of 

13 compressors. We think it's quite unfair to the 

14 potential for improvement. 

In terms of higher efficiency fan motors, 

16 again we think there have been neglected some of the 

17 opportunities. One of the simplest of these might 

18 simply be, for single-motor PTHPs, the -- clutch that 

19 would -- for PTACs, the -- clutch that would disengage 

the condenser fan when it's in heating cycle using heat 

21 from other sources. That may not be a terribly 

22 expensive thing. 

23 We're concerned that micro channel heat 

24 exchangers were simply written off. This is a very 

mature technology in automotive -- the dominant 

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1 technology I believe, in automotive air conditioning, 

2 and has achieved wide market share for residential 

3 split systems, where it has two singular 

4 characteristics that are worthy of mention because of 

their potential importance. We're not the engineers. 

6 The first of these is that it leads to 

7 substantial reduction, in the range of 30 percent, in 

8 the amount of expensive refrigerant required. The 

9 second of these is that volumetric reduction is quite 

large, again in the range of 30 percent, which is a 

11 concern that we've repeatedly heard this morning from 

12 manufacturers and read earlier in the analysis. 

13 Incidentally, the fact that these are 

14 essentially 100 percent aluminum instead of copper has 

implications for the translation of product cost, since 

16 copper is substantially more expensive today than 

17 aluminum. 

18 So we're very much concerned about the call 

19 it level of sophistication that's gone into the 

analysis in terms of the screened-out options. We will 

21 try to treat these in somewhat greater detail in our 

22 comments. But we don't think that we're reflecting the 

23 potential of improvements using existing technologies 

24 that are widely applied in other product classes and 

important market issues and equivalent competitive 

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1 pressures. Thank you. 

2 MR. BROOKMAN: Thank you. Of course, the 

3 Department would appreciate your very specific comments 

4 on these matters. 

MS. ARMSTRONG: Okay? 

6 MR. BROOKMAN: Yeah. So now we're --

7 MS. ARMSTRONG: One more comment. 

8 MR. BROOKMAN: Oh, yes. Please. Ted. 

9 MR. KINGSBURY: Ted Kingsbury, Goodman. I'd 

just like to comment on the last comment. It's kind of 

11 a question I have, I guess, as far as technology, 

12 feasibility, and using design concepts versus keeping 

13 them out of the analysis picture. 

14 These technologies definitely do exist: ECM 

motors, variable speed compressors, just as expressed 

16 and said. However, basically, those tend to be much 

17 more expensive. I'm not going to quote any numbers, 

18 but yes, they're available. But I think it would 

19 totally change the payback and the cost structure as 

far as that whole analysis goes. 

21 And then the other issue is typically with 

22 variable speed you have a different standard per rating 

23 of product. What you're doing is you're basically 

24 unloading the compressor during -- based on the load 

that you -- so there are probably -- we would probably 

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1 have to generate a new ARI 310 or 380 standard for 

2 actually rating these products. So I'm not saying it's 

3 out there, but I think there's a major, significant 

4 cost impact and any implication would be that the 

rating standards for the product as well would have to 

6 change. 

7 MR. BROOKMAN: Thank you. Thank you. 

8 Harvey? 

9 MR. SACHS: This is Harvey Sachs again. 

Thank you very much. We certainly understand these 

11 concerns. I guess one of the gorillas that's not 

12 present but staying in the corner is exactly the one 

13 you raised, that EER is an appropriate measure of the 

14 peak demand impact, which leads to questions of the 

synchroneity (sic) or lack of synchroneity of the PTAC 

16 market demand with that of the commercial sector or the 

17 utilities in general. 

18 We certainly would be pleased to support 

19 participating in efforts to revise the rating method. 

We've found it unfortunate that potentially important 

21 energy-saving technologies that you mentioned, 

22 including variable capacity unloading and variable 

23 speed fans, are essentially screened out at the 

24 beginning because we're only looking at -- we're not 

looking at all the part load energy ratings. Most 

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1 equipment is operated most of the time as part load. 

2 So we're really very close together there in 

3 trying to deal -- play the hand of cards we've been 

4 dealt. 

MR. BROOKMAN: Thank you. Any other comments 

6 on this subject? 

7 MR. MARKUSZ: I've got one more comment. 

8 MR. BROOKMAN: Yes, David. 

9 MR. MARKUSZ: David Markusz. I think there's 

a fundamental difference, too, between the way the 

11 commercial equipment is rated or residential equipment 

12 is rated under SEER and the way that PTAC is rated 

13 under EER and the way things are run. But it's also 

14 the way the buildings are and the building loads are 

set up. If you, you know, look at an analysis of a 

16 home versus a commercial hotel, there's going to be 

17 different load patterns and load calculations. So you 

18 really can't have a comparable setup. I guess that was 

19 my comment. 

MR. SACHS: Harvey Sachs again. David, thank 

21 you very much. I certainly am very sensitive to that 

22 myself, which is what led to the comments on the main 

23 displacement relative to utility piece. 

24 I would say I recently, with colleagues, 

published a paper on our perception of the problems 

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1 with the residential method as well. So we're equal 

2 opportunity critics. 

3 (Laughter.) 

4 MR. BROOKMAN: Okay. Moving on, then. 

MS. ARMSTRONG: All right. Next I'll be 

6 speaking on the EPA mandated refrigerant phase-out of 

7 R22. As I said earlier, DOE -- PTAC and PTHP equipment 

8 using R410A that is currently commercially available. 

9 Based on research and studies, discussions with 

manufacturers of both compressors and this equipment, 

11 DOE believes that R410A compressors, at least when they 

12 first begin to come on the market, will be less 

13 efficient than R22 compressors, which will thus 

14 translate into overall system efficiency degradation of 

PTACs and PTHPs. 

16 Therefore, for the engineering analysis, and 

17 this is carried through the rest of the analyses, DOE 

18 is using an overall lower system performance for PTAC 

19 and PTHP equipment with R410A. For standard size PTACs 

and PTHPs with a 9,000 Btu cooling capacity, we use a 

21 6.3 percent degradation. For standard size PTACs and 

22 PTHPs with a 12,000 cooling capacity, we use a 7.6 

23 percent degradation. For nonstandard size PTACs and 

24 PTHPs of all cooling capacities we use a 6.8 percent. 

Some additional concerns that DOE received 

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1 and noted throughout its research for the engineering 

2 analysis were compressor availability in the full range 

3 of capacities, the increase in component costs, the 

4 increase in heat exchanger and compressor costs, and 

the timing of the phase-out with the timing of the 

6 imminent energy conservation standards. 

7 So at this time I'm going to pass the 

8 discussion to Doug and get all of you to comment on the 

9 potential impact of the refrigerant phase-out on PTAC 

and PTHP equipment, the industry, and the availability 

11 of components that are used in PTAC and PTHP equipment. 

12 MR. BROOKMAN: And also the specifics that 

13 are in this slide. Please, Scott. 

14 MR. TOUKATLY: How much time do you have? 

(Laughter.) 

16 MR. BROOKMAN: We've got time. 

17 MR. TOUKATLY: This will be the rest of the 

18 day. 

19 MR. BROOKMAN: Let's just try and be concise 

in our comments here. 

21 MR. TOUKATLY: Speaking from the nonstandard 

22 side, I'm not sure if I agree with the degradation for 

23 nonstandard being different than standard. I've got to 

24 admit I haven't read through the 228 pages, so I'm sure 

it's there. So I'll just say I'm not sure if I agree 

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1 why it would be different. 

2 MS. ARMSTRONG: Okay. 

3 MR. TOUKATLY: And I would say from before, 

4 it's very small picture of the whole PTAC offering. 

Like I said, once you get up into 15 nominal and 18 

6 nominal, I think we're seeing more degradation than 

7 that. So it is a concern on the way that the DOE has 

8 locked in that 7- to 15- all in the same equation. 

9 MR. BROOKMAN: Ashley, can you say why it's 

different? 

11 MS. ARMSTRONG: I can kind of say why it's 

12 different. Well -- our data that we received, and it's 

13 consistent with -- ASHRAE when they were talking about 

14 -- when ASHRAE was considering the continuous 

maintenance proposal for PTACs and PTHPs. 

16 I would say because -- that 6 percent -- 6.8 

17 percent is representative of 11,000 Btu/h whereas the 

18 6.3 is 9,000 and the 7.6 is 12,000. That could be one 

19 reason you're seeing a difference. They are different 

cooling capacities. 

21 MR. BROOKMAN: Karim. 

22 MR. AMRANE: Karim Amrane, AHRI. Just to 

23 respond to Ashley here, our data from ASHRAE did not 

24 specifically single out replacement -- nonstandard 

versus standard. It was for both. 

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1 MS. ARMSTRONG: It's the capacity. 

2 MR. AMRANE: Right. So it's -- degradation. 

3 MS. ARMSTRONG: The capacity. 

4 MR. BROOKMAN: Okay. Thank you. Scott? 

MR. TOUKATLY: Scott Toukatly. The only 

6 other comment I would make is, I was reading that, and 

7 I'm probably jumping probably way ahead, is -- speaking 

8 for our company, I think the biggest concern of all the 

9 concerns that we're seeing is the issue of raising the 

bar we think too high for the PTHP. I mean, if you're 

11 seeing this kind of degradation, I'm missing the --

12 well, I shouldn't say I'm missing the logic. I 

13 understand where the DOE was going with the -- PTHPs 

14 over PTACs. 

But this is just one more issue that plays 

16 into a real concern that a PTHP proposed number can 

17 even be reached with any feasible technology to keep 

18 costs in line, let alone technology that is out there 

19 that may not even meet that proposal in that box size 

ever. 

21 MR. BROOKMAN: So, Scott, if you can be 

22 specific. That is, if you can say what you think is 

23 achievable or in your written comments provide that 

24 kind of detail, that's what they're looking for. 

Harvey. 

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1 MR. SACHS: Harvey Sachs, ACEEE. I've just 

2 got a small question technically because I'm having a 

3 little trouble visualizing a 15- to 18,000 Btu 

4 nonstandard PTAC or PTHP. Each time I try, it reminds 

me of the image of a NASCAR race vehicle trying to 

6 breathe through his choke plate. Fundamentally, in 

7 these very large sizes developing any kind of air flow 

8 across the heat exchangers is an extraordinarily 

9 challenging task. 

So the challenge that I'm inferring is making 

11 a 15,000 or 18,000 small choke PTAC at any efficiency 

12 level. That's a question. 

13 (Laughter.) 

14 MR. BROOKMAN: Scott. 

MR. TOUKATLY: It's probably a good analysis. 

16 Certainly, you -- I don't know if you'll want to put 

17 this on record -- 10 pounds of you know what in a nine18 pound bag as you get bigger. But I will say that it 

19 doesn't help, you know -- and I'm sure this issue is 

going to be touched on many times. It doesn't help 

21 with the single-speed rotary technology that's out 

22 there today, either. As you go up in nominal capacity 

23 we're seeing more of a drop-off in rated EER of those 

24 compressors. So that doesn't help. 

But yeah, I mean, it's the same box, if you 

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1 will, that you have a seven- and a nine- or a 12- in. 

2 If you're starting to put in bigger coil surfaces, you 

3 have to weigh that with the air flow issue. It can 

4 also be a consumer problem for sound level and things 

like that. So you have to balance. You know, is a 

6 consumer even going to be happy with a product even if 

7 it meets an efficiency. What does it sound like if you 

8 have to raise the air and you're breathing through that 

9 small opening. 

MR. SACHS: I'm speaking as a hotel occupant 

11 who is trying to sleep through some PTACs. 

12 MR. BROOKMAN: That was Harvey Sachs, yes. 

13 MR. SACHS: I want to --

14 MR. BROOKMAN: Continuing, Harvey Sachs. 

MR. SACHS: Harvey Sachs, ACEEE. I just want 

16 to read a statement -- it's very short -- from page 5-

17 42 of the TSD. "DOE also found that residential 

18 central air conditioning manufacturers were able to 

19 develop technologies and redesign their equipment so 

that the R22 phase-out has little effect in system 

21 efficiency when the equipment eventually came into the 

22 market." 

23 Now, to me, the logical implication of this 

24 statement is that you may want to set an initial 

reduced stringency standard for the first few years to 

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1 allow that learning to happen. And we've made a fairly 

2 large point of available technologies that are -- just 

3 happen not to be used in this class of equipment. 

4 But what I miss from this is a stepped 

standard that would simply say three years after we are 

6 increasing the stringency; that is, removing the 

7 degradated efficiency that was allowed for as part of 

8 this refrigerant change-out. That of course is a 

9 market and design challenge for each of the firms. Do 

they want to do a single redesign or two redesigns. 

11 I don't have an answer, but I am struck by 

12 the lack of that option in this analysis. 

13 MR. BROOKMAN: Okay. Thank you. Other 

14 comments? Yes, Karim. 

MR. AMRANE: Karim Amrane, AHRI. I think 

16 what Harvey is suggesting is a good idea. I mean, what 

17 we have heard of within the ASHRAE 90.1 committee when 

18 Steve Nadel came to the committee with the proposal on 

19 PTACs was to wait and see, to go with the ASHRAE 90.1 

levels as we have them today, and then to reevaluate 

21 the situation after the phase-out of R22 because there 

22 are a great deal of unknowns for -- treatment. 

23 Contrary to what you did with central air 

24 where you had R410A units on the market since 1995 or 

1996, five, six years, seven years before the final 

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1 rule was even published, we are here two years before 

2 the phase-out date of R22 and there is not a single 

3 R410A PTAC on the market. 

4 I guess I have a fundamental issue with that 

because of how DOE has approached this rulemaking with 

6 respect to what's technologically feasible here. You 

7 are basically basing all this analysis on a theoretical 

8 analysis and saying, well, you know, we -- with R22, we 

9 know the -- is going to be phased out by 2012 when the 

standard will become effective, but we're going to use 

11 a degradation factor and base our max tech on that, 

12 base our technology feasibility on that. 

13 I have a fundamental problem with that. I 

14 think legally DOE, in my opinion, cannot go forward 

with a rulemaking without making sure there are 

16 products available that can meet that efficiency level. 

17 Today all of us around this table cannot say yes. The 

18 gentleman from GE was supporting this rulemaking, and 

19 my understanding is -- manufacturer of PTACs. 

So again, I have a fundamental problem with 

21 that. And I'm not sure -- our proposal has been, and 

22 always has been, adopt ASHRAE 90.l, move along. At 

23 least you would have -- we could -- a big improvement 

24 over what we have currently in the federal regulation. 

Then come back two or three years after the phase-out 

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1 happens and -- new product. 

2 ASHRAE 90.1 is already documented. It's 

3 being -- on a daily basis -- not a daily basis but all 

4 the time. We've committed an industry to revisit the 

issue after the three years are up and we will have 

6 more data to understand the situation of 410A. 

7 And again, to our surprise -- direction, we 

8 are basically guessing. We believe -- but show us that 

9 we can meet that level today. I don't think we have 

the answer. Nobody knows. 

11 MR. BROOKMAN: Thank you. 

12 MR. TOUKATLY: Scott Toukatly. 

13 MR. BROOKMAN: Yes. Go ahead. 

14 MR. RAVA: -- raise the level with the 

technology right now, it's -- not saying that we have a 

16 problem with R410A --

17 MR. BROOKMAN: Thank you. Scott. 

18 MR. TOUKATLY: I was just going to piggyback 

19 on one of the other things that Harvey mentioned, is 

this -- right now if we go forward -- so, obviously we 

21 agree with Karim's statements. Going forward right now 

22 has been a two steps forward, one step back approach. 

23 At our company, we're not quite sure how to skin the 

24 cat because of this issue of the technology that's 

there and these proposed numbers. 

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1 The problem that we're having is, do all we 

2 do is change the refrigerant in complying for 2010 and 

3 hope and pray that technology gets better -- reasonable 

4 cost technology I should qualify -- for the 2012 

implementation, or do we try to bite the bullet now and 

6 go all the way to try to move the NOPR numbers, and 

7 it's just that. They're NOPR numbers. For the next 

8 four or five months that's all they are. 

9 So we're in a tough spot right now because we 

don't know if these numbers are going to stick. We 

11 have a big problems -- we have problems with the 

12 numbers again, especially the PTHP level. So I think 

13 we're in a bind where if this goes forward all we can 

14 do is meet the refrigerant compliance issue of 2010 and 

then hope for reasonable cost technology to come on 

16 board in the following two and a half years. 

17 MR. BROOKMAN: Thanks for that description. 

18 Harvey Sachs. 

19 MR. SACHS: Thanks, Scott. I certainly 

appreciate the shoes you're wearing and I'm not. But 

21 the colloquy between Karim and Jim reminded me of 

22 another option that has not entered the screening and 

23 surprised me. As I was getting ready for this meeting, 

24 I happened to grab a cut sheet from one manufacturer in 

the room, and the cut sheet suggested very strongly, at 

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1 least -- unit, which is capped to the expansion -- from 

2 that element of a cut sheet I inferred that some people 

3 are using feedback-controlled metering devices such as 

4 TXVs. 

Now, the reason I bring that up now is that 

6 it actually costs money. But it's my understanding, as 

7 a non-designer of this equipment, that a TXV also 

8 allows you much better control of your metering at your 

9 hottest conditions. So you don't have to oversize the 

evaporator as much to preclude the possibility of 

11 liquid slugging. 

12 So given that a TXV would seem to be on the 

13 market, from the language in that cut sheet -- I don't 

14 know that for a fact -- and given that this is a 

technology that offers some tradeoffs lead to greater 

16 compactness and to some saving of money in the heat 

17 exchanger, it's really surprising that it wasn't even 

18 screened out and just wasn't considered. 

19 I bring that to the attention of the group 

because it seems to be an example of why we use the 

21 technology. One, it's widely used in the 410A and it 

22 works well, to the best of my understanding, and this 

23 is something that would have reasonably expected to 

24 have been included in the analysis. 

MR. BROOKMAN: Okay. Thank you, thank you. 

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1 MR. BENZ: Jim Benz from GE. Two points. 

2 One, it's actually my understanding that a 410A product 

3 is on the market in the United States right now in a 

4 PTAC. So that's something people might want to take a 

look at. 

6 Second, with respect to whether we are 

7 dealing with theory, General Electric doesn't make 

8 commitments that they don't have certainty that will be 

9 met. We are far enough on the design phase, and most 

of the people in this room should be far enough on the 

11 design phase, of a 410 product to know what the 

12 capabilities are. Although we haven't completed design 

13 phase of every single model, we have completed the 

14 design phase on the vast majority of models and we will 

be able to meet the standard recommended by the DOE. 

16 MR. BROOKMAN: Thank you for that comment. 

17 Additional comments on the issues associated with Slide 

18 19? 

19 (No response.) 

MR. BROOKMAN: Okay. 

21 MS. ARMSTRONG: All right. Last but not 

22 least for engineering, DOE also performed an analysis 

23 to determine the heating efficiency COP as it 

24 corresponds to the cooling efficiency EER analyzed. 

DOE reviewed the AHRI Product Directory. Basically, 

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1 DOE graphed each EER versus COP and calculated the 

2 minimum, maximum, and average COPs. The tables on the 

3 slide show the EER and COP pairing that DOE is using 

4 for this analysis. These represent average pairings 

for the given EER ranges in the cooling capacities that 

6 we analyzed. 

7 Now DOE invites comments on these EER and COP 

8 pairings for PTHPs based on the current AHRI Product 

9 Directory information. 

MR. BROOKMAN: So you can see all kinds of 

11 specific information in that table. DOE would really 

12 appreciate your comments on the specifics. Scott? 

13 MR. TOUKATLY: I'm sorry. 

14 MR. BROOKMAN: Not at all. Francine Pinto. 

MS. PINTO: Francine Pinto, DOE. I just want 

16 a clarification. Jim, the last statement you made, was 

17 that referring just to standard size? 

18 MR. BENZ: Yes. 

19 MS. PINTO: Okay. I just wanted to make sure 

that the record was really clear. 

21 MR. BENZ: We're not in the nonstandard 

22 business, and I have few comments other than the one I 

23 made. 

24 MS. PINTO: And Karim, just as a 

clarification to your point about the hypothetical 

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1 nature of being able to meet the standard, could you 

2 just address Jim's comment on that? Are you saying 

3 that for both standard and nonstandard, with the 

4 transition to 410A, you don't know --

MR. AMRANE: Again, let me make clear here --

6 Karim Amrane with AHRI. GE is not a member of AHRI, so 

7 I'm not speaking for GE here. I'm speaking for some of 

8 the manufacturers at this table who make both standard 

9 and nonstandard equipment. And the feedback I'm 

getting from the manufacturers is that they don't --

11 they're not sure right now whether those levels can be 

12 met with the 410A. 

13 MR. BROOKMAN: For both. 

14 MR. AMRANE: For both, yes. 

MS. PINTO: Okay. I just wanted to be clear. 

16 MR. TOUKATLY: Scott Toukatly. Certainly, 

17 the comment that Jim made is -- you know, he's right. 

18 I mean, manufacturers have seen this coming and we need 

19 to be along in the process of not talking theoretical. 

We're not through the whole process of evaluating our 

21 products, but we have been and we are generating our 

22 own data. Two years ago, yeah, it was theoretical. 

23 We're gathering our own data now. 

24 That doesn't mean we don't have concerns 

meeting these numbers now that we're actually seeing it 

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1 in real life in our own labs. 

2 So, yes, we as manufacturers need to be 

3 responsible. We saw this coming. We were tight a 

4 little bit, at least our company, because we're not as 

vertically integrated as some, on waiting for 

6 compressors to be available, let alone efficient, just 

7 to be available. So, for the North American market, I 

8 guess I should say. 410A 60 hertz for the North 

9 American market for a product like this. 

I had my head turned. I don't know if the 

11 question was on this slide or not and what our thoughts 

12 were. 

13 MR. BROOKMAN: Yes. 

14 MR. TOUKATLY: Was that --

MR. BROOKMAN: That's -- we're looking at 

16 Slide 20 and particularly comments on EER and COP 

17 pairings ratings. 

18 MR. TOUKATLY: I was speaking here. We were 

19 a little curious. Neither one of our companies on the 

nonstandard side have any equipment that's listed at 

21 those numbers at the higher end, the 10.7 EER and 11.4 

22 EER. We're pretty sure where they're coming from, and 

23 leave it to say we have serious concerns that those are 

24 real numbers or just printed numbers. Real concern 

because we feel we know where they came from. 

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1 MR. BROOKMAN: I see. Okay. 

2 MR. TOUKATLY: So, all I want to say is it's 

3 easy to print numbers. 

4 MR. BROOKMAN: Karim. 

MR. AMRANE: Karim Amrane, AHRI. Actually, 

6 there's nothing wrong, but actually, I would like to 

7 make sure. She's stating on this slide that the data 

8 is coming from the AHRI Directory. I'm not so sure on 

9 the nonstandard size that they're really coming from 

the AHRI Directory. 

11 MR. BROOKMAN: Okay, okay. I'm wondering if 

12 any --

13 MR. AMRANE: They're probably not coming from 

14 the AHRI Directory. So that's why we need to confirm 

that. 

16 MR. BROOKMAN: And particularly the same ones 

17 that Scott noted? 

18 MR. TOUKATLY: Yeah, I can -- Scott Toukatly. 

19 I can only speak for our company. If McQuay would 

like to speak to theirselves (sic.) I know that we do 

21 have products listed. It's not in the AHRI Directory 

22 because we don't participate in the cert program. But 

23 we do list product and we stand behind it at 10 EER for 

24 existing R22 product. 

MR. BROOKMAN: But not 10.7 or 11.4. 

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1 MR. TOUKATLY: Not at all, not at all. 

2 MR. BROOKMAN: Okay. 

3 MR. TOUKATLY: We don't see it achievable 

4 even in R22 and nonstandard. 

MR. BROOKMAN: 

6 MS. ARMSTRONG: 

7 MR. BROOKMAN: 

8 briefly --

9 MS. ARMSTRONG: 

MR. BROOKMAN: 

11 (Laughter.) 

So, Ashley? 

Yes? 

While you were out of the room 

Okay. 

Come back up here. 

12 MR. SACHS: Your character was assassinated. 

13 MS. ARMSTRONG: Oh, no, that's not very nice. 

14 MR. BROOKMAN: Scott raises the question, and 

so does Karim, about the lower two cells on the right16 hand side of your matrix, the EER 10.7 and EER 11.4, 

17 whether those were -- how you got that information, 

18 whether those were numbers that you obtained or whether 

19 there was actual data for them, or something like that. 

MS. ARMSTRONG: They're all numbers from the 

21 product directory. All of these. 

22 MR. BROOKMAN: Karim. 

23 MR. AMRANE: Again, Karim Amrane. Again, we 

24 don't identify in our directory which is replacement 

versus -- nonstandard versus standard. 

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1 MS. ARMSTRONG: So it would be our --

2 MR. AMRANE: So we saw it coming from --

3 probably not from the directory. So, I'm not sure. 

4 MS. ARMSTRONG: Let's say DOE's 

interpretation of the directory, based on what we 

6 considered to fall within nonstandard and standard size 

7 classes. 

8 MR. BROOKMAN: And then Scott's comment while 

9 you were gone was that he has a unit at 10.0 but he 

really questions 10.7 or 11.4, the feasibility of that. 

11 MS. ARMSTRONG: Okay. 

12 MR. BROOKMAN: Is that fair? 

13 MR. TOUKATLY: Definitely. 

14 MR. BROOKMAN: Anybody else wish to comment 

on this issue? We're trying to -- it's very useful for 

16 the Department, if you think it's not possible, if it's 

17 not viable, to suggest these levels, 10.7 and 11.4. 

18 They'd really like to know it now. 

19 (No response.) 

MR. BROOKMAN: No additional comment? Okay. 

21 Okay. So then, now we're moving from -- yes, 

22 please. Ted. 

23 MR. KINGSBURY: Probably at the risk of being 

24 repetitive, just, I guess, agreeing with Karim's 

comment. I mean, like Scott, we have data, test data, 

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1 and yes, the technology exists to get there in 2010, 

2 but 2012 is more of a question mark. Once again, it's 

3 whether the cost payback analysis being done today is 

4 going to make sense for 2010 also and then 2012. 

2010 is here, so basically what the industry 

6 has to utilize is pretty much current technologies. 

7 And once again, going to more efficient rotaries, 

8 basically I think we're already using more efficient 

9 rotaries. Then the options become the other two or 

three, which is more surface, maybe more air, which 

11 would be detrimental to the sound, but that's all got 

12 to be factored into the equation. 

13 But I just want to, maybe, reemphasize a 

14 point that's already been emphasized and we need to 

move on, but I support, I guess, a two-stage approach. 

16 And --

17 MR. BROOKMAN: Two-stage being that one stage 

18 for a certain amount of time and then another one 

19 phases in? 

MR. KINGSBURY: A couple issues here. Once 

21 again, some of these points have been made. The larger 

22 you get, the less options you have because basically, 

23 with a fixed sampling, your larger sizes are already 

24 using larger heat exchangers, not necessarily in face 

area but -- and for things like that. 

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1 So some of the -- part of the technology 

2 assessment talked about going from one row to two rows. 

3 Most of the product line already has gone two-row in 

4 R22. So, not to get into that detail. Once again, 

it's understanding what the technology options are and 

6 making sure that the right cost factors have been 

7 applied in generating whatever that -- if that 2 

8 percent was a cost added or system cost added. 

9 MR. BROOKMAN: There's going to be much more 

detailed information on the cost side here as we move 

11 along during the day. 

12 MR. KINGSBURY: Okay. 

13 MR. BROOKMAN: Okay. Francine Pinto. 

14 MS. PINTO: Yeah, Francine Pinto again. I 

just want to make a comment off of your comment about 

16 we want specific information now. This is primarily 

17 for the new people. Once DOE sets a standard, there is 

18 a legal provision that says we cannot reduce the 

19 standard in the future, and that is discussed in the 

NOPR. It's called anti-backsliding. 

21 So that's why it's very important that you 

22 give us the correct information during the comment 

23 period, that you clearly distinguish between standard 

24 and nonstandard so we know exactly what you're saying, 

and so we can take all those comments into account. 

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1 Thank you. 

2 MR. BROOKMAN: Thank you. Okay. So then, no 

3 additional comments on this matrix on Slide 20, EER and 

4 COP? 

 (No response.) 

6 MR. BROOKMAN: We started at nine. It's now 

7 10:40. Do you want to take a break now? Let's take a 

8 short break now. Let's take a 15-minute break. So 

9 that means we will resume at 10:55. And thanks for a 

good start on the day. 

11 (Brief recess.) 

12 MR. BROOKMAN: Sometimes at the break 

13 discussion in the hallway causes some additional issues 

14 to be raised that were -- so that people might wish to 

make an additional statement when they return. I 

16 wanted to provide that opportunity now in case anybody 

17 wishes to double back before we proceed. 

18 MS. PINTO: That would include clarifications 

19 that people came to. That would be nice to have on the 

record. 

21 MR. BROOKMAN: So, Francine, thank you. We 

22 also seek clarifications, if any of them are 

23 forthcoming at this time. 

24 MR. SACHS: I volunteer Karim and me not to 

comment again. 

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1 (Laughter.) 

2 MR. BROOKMAN: I thought the two of you 

3 covered it adequately. 

4 (Laughter.) 

MR. BROOKMAN: Okay. So then, seeing no 

6 additional comments at this time based on what we've 

7 covered already then, yes? Okay. Then we're fortunate 

8 to have with us Bing Liu. 

9 Energy Use Analysis and Life-Cycle Cost Analysis 

Bing Liu 

11 (PowerPoint presentation.) 

12 MS. LIU: Welcome back, everyone. Can you 

13 hear me clearly? Okay. My name is Bing Liu from 

14 Pacific Northwest National Laboratory. In conjunction 

with my colleague Mike Scott, we're presenting the 

16 Life-Cycle Cost Analysis section, which we provided for 

17 this rulemaking analysis. 

18 As you can see, it looks that in this chart 

19 we're going to cover three different analyses. We're 

going to talk about markups. These are distribution 

21 channel markups to determine equipment price to the 

22 customer. And we're going to be talking about the 

23 energy use analysis. 

24 And to bring all this together, we're going 

to be discussing the life-cycle cost analysis, 

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1 including the life-cycle cost savings and the payback 

2 period. 

3 To start off, DOE conducted an energy yield 

4 analysis. The purpose of this analysis is to assess 

the energy saving potential of PTAC and PTHP equipment 

6 at different efficiency levels. 

7 DOE understands the equipment price of the 

8 PTACs and the PTHPs depends on the distribution channel 

9 and the customer use who purchases the equipment. So 

DOE used the markup analysis to determine the equipment 

11 price to a customer. In this particular analysis, DOE 

12 first identified the typical supply chains for PTACs 

13 and PTHPs. Then DOE further determines the customer's 

14 price by applying multipliers to the manufacturer 

selling prices. DOE developed the multipliers for both 

16 their baseline and the higher efficiency equipment. 

17 DOE conducted the life-cycle and the payback 

18 period analysis to estimate the economic impact of 

19 potential standards on individual customers of PTACs 

and PTHPs. The purpose of the life-cycle cost analysis 

21 is to calculate the change in customer life-cycle cost 

22 likely to result from higher efficiency levels as 

23 compared with the baseline efficiency levels. DOE also 

24 calculates the payback period. 

In the next two slides I will present the 

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1 approach and the summaries as part of the energy use 

2 analysis. PTACs and the PTHP units generally are used 

3 in hotel/motel rooms, assisted living homes, small 

4 offices, and other applications that require individual 

room or zone heating/cooling control. Actually, we're 

6 looking at -- Worldwide Analysis report. This report 

7 indicates the majority of the PTAC and the PTHP 

8 equipment is actually used in the hotel/motel building 

9 types. Therefore, based on this study report, DOE 

decided to take the hotel/motel as their representative 

11 building types to conduct their energy use analysis. 

12 DOE used a whole building simulation tool 

13 named as DOE-2.1E to estimate the energy use of PTACs 

14 and PTHPs. The whole building energy simulation model 

took into account the effect of local weather 

16 envelopes, lighting, occupancy, load, et cetera, on the 

17 impact of the space heating and cooling. The energy 

18 simulations provided hourly energy end use in the hotel 

19 prototype buildings, including lighting, load, fan, 

space cooling, and heating. 

21 DOE focused on the energy use analysis for 

22 six representative equipment classes as the proposed 

23 baseline efficiency levels and the five higher 

24 efficiency levels in the different climate locations 

within the United States. 

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1 Finally, DOE calculated the weighted average 

2 energy use of PTAC and PTHP units within each state. 

3 We further aggregated the energy use at a state level 

4 to national average energy use using the U.S. census 

population data. 

6 These slides provide a summary of the energy 

7 use analysis results. As mentioned in the previous 

8 slides, DOE calculated the energy consumption for 

9 representative hotel buildings in diverse climate 

locations. DOE further validated this energy use 

11 estimate by comparing it with the data from the Energy 

12 Information Administration's Commercial Building Energy 

13 Consumption Survey in 2003. 

14 The validation showed the estimated data from 

the simulation were very close to the real survey data 

16 for the energy use in the hotel/motel buildings. 

17 In the next two paragraphs, as you look at 

18 it, are very brief summaries of the range of the energy 

19 savings compared between the baseline efficiency levels 

with the maximum efficiency levels. We call that "max 

21 tech." For this comparison, for packaged terminal air 

22 conditioning units, the energy we're looking at is 

23 including the cooling energy and the fan energy. But 

24 for the packaged terminal heat pumps, the energy we're 

looking at is including cooling, heating, and fan 

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1 energy uses. 

2 For the PTAC units, the range of the energy 

3 savings between the baseline and the maximum efficiency 

4 levels is from 7.9 percent for standard size, 9,000 

Btu/h to 12.2 percent for nonstandard size equipment. 

6 For the PTHP, the range of the savings is 

7 from 8.4 percent for 9,000 Btu/h standard size 

8 equipment to 10.8 percent for nonstandard size heat 

9 pump units. 

That's going to end the brief presentation on 

11 energy use analysis. All the detailed methodologies 

12 and analysis actually can be found in the NOPR notice 

13 and the Technical Support Document, Number 7. 

14 At this point I will turn over the 

presentation to my colleague, Mike Scott, who will 

16 discuss the markups and the life-cycle cost analysis. 

17 MR. SACHS: Can we have questions now? 

18 MR. BROOKMAN: Well, I guess, yes. Let's do 

19 that. Questions or comments on these first two 

bulleted points before Mike takes over at the podium? 

21 Harvey Sachs. 

22 MR. SACHS: Harvey Sachs, ACEEE. With 

23 respect to Slide 24, Bullet 2, how did we treat the 

24 heating energy that would be required in association 

with a PTAC? Was it assumed that this should be 

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1 ignored? Were you using the fan energy that would be 

2 required during heating cycle, whether that was 

3 provided by resistive hot water loop or other? How 

4 were you treating the heating side on a PTAC and, for 

that matter, the resistive energy that might be 

6 required in PTHP during very cold outdoor conditions? 

7 MS. LIU: Bing Liu. I think I can answer 

8 your questions. For PTACs, we also, through other 

9 related research and the data and the status, it's 

showing a majority of the PTACs for the heating part 

11 using electrical resistance for heating. 

12 So the technology of design options has been 

13 evaluated in order to look at the different efficiency 

14 levels and have nothing to do on the heating part of 

the PTAC. That's why the annual energy savings for a 

16 PTAC is only impacted on the cooling energy. But for 

17 the heat pumps, because we know the heat pumps are both 

18 running at a cooling mode and a heating mode, and if 

19 you have higher efficiency levels in EER or COP, that 

impacts on both on your cooling and heating energy use. 

21 That's why for PTHP we included the annual energy use 

22 and the savings for both cooling and heating. 

23 MR. SACHS: Thank you. I think we'll have to 

24 go offline. 

MR. BROOKMAN: Okay. Thank you, Harvey. 

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1 MS. LIU: Sure. 

2 MR. BROOKMAN: Thank you. Additional 

3 questions on the first two bulleted points on Slide 24? 

4 MR. MARKUSZ: Could we go back to questions 

on the approach? 

6 MR. BROOKMAN: Sure. Yes. David. 

7 MR. MARKUSZ: David Markusz. I had two 

8 questions. One is, when you looked at the approach did 

9 you look at standard sleeves versus nonstandard 

installations, or was it just one approach overall? 

11 MS. LIU: Bing Liu, PNNL. I'll wait for two 

12 questions. Dave, you mentioned you have two questions. 

13 MR. MARKUSZ: Okay. The second question. 

14 For the building, you said you used energy simulation 

on a hotel/motel type building, right? And then you 

16 set up some envelope assumptions, right? 

17 MS. LIU: Yes. 

18 MR. MARKUSZ: And that's based on some type 

19 of standard or documentation? 

MS. LIU: Bing Liu, PNNL. I can address your 

21 question. Your first question is about the -- oh, 

22 maybe I'll address your second question first. 

23 MR. MARKUSZ: Okay. 

24 MS. LIU: Your second question is where are 

the assumptions coming from because we all know the 

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1 annual load of lighting or plaque load all have an 

2 impact on your load of the equipment itself. So the 

3 assumptions are really coming from the CBECS data 

4 survey for the hotels and motels. They clearly tell 

you for the hotel/motel buildings served across the 

6 country what is the most dominant construction type, 

7 what is the window-to-wall ratio, very detailed. We 

8 actually document each of the key input assumptions for 

9 modeling in TSD Chapter Number 7. 

So if you have a special question or comment, 

11 you are welcome to comment on that for us to improve 

12 our -- update our analysis when we proceed. 

13 MR. MARKUSZ: Okay. 

14 MR. BROOKMAN: That's the CBECS data. 

MS. LIU: Yes. 

16 MR. BROOKMAN: Okay. 

17 MR. MARKUSZ: Right. Okay. 

18 MR. BROOKMAN: Okay. 

19 MS. LIU: I apologize. I forgot your first 

question. 

21 MR. MARKUSZ: And for the analysis, because 

22 we don't -- Carrier doesn't work in nonstandard, but 

23 there could be different applications for each, and I 

24 didn't know if there was any --

MS. LIU: Yes. Actually, for the whole -- in 

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1 order to gather the potential energy savings estimates, 

2 we actually looked at both the standards and the 

3 nonstandards. For standard size equipment, we're 

4 looking at 9,000 and 12,000 Btu/h capacities at PTAP 

and PTHP. For nonstandard size equipment, we're 

6 looking at both air conditioners and heat pumps but 

7 only at 11,000 Btu/h. So it's really in line with what 

8 has been done for the engineering analysis for all 

9 these representative equipment classes. 

MR. BROOKMAN: Karim, go ahead. 

11 MR. AMRANE: Karim Amrane, AHRI. I guess, to 

12 follow what Dave was just saying, some of the 

13 nonstandard size equipment is not used in motels or 

14 hotels. I guess, did you look at that segment of the 

industry that's not typically used in motel 

16 applications? 

17 MS. LIU: No. Bing Liu, PNNL. The only 

18 building type we were looking at is the hotel/motel 

19 buildings. But what we found unique of this product is 

because it serves individual rooms, with the only 

21 exception of if your room is operating totally 

22 different -- it's more like a residential space, right, 

23 for -- even you're looking at a nursing home, you know, 

24 it's the same load pattern as we see. So if you have 

some other suggestions for nonstandard equipment, we 

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1 can take that into consideration. 

2 MR. AMRANE: Okay. 

3 MR. BROOKMAN: Okay. Thank you, David. 

4 Thank you, Karim. 

Okay. Other questions on the approach slide 

6 and also the results, the first two bullets on 24, 

7 before we turn it over to Mike? 

8 (No response.) 

9 MR. BROOKMAN: Okay. Michael. 

Presentation by Michael Scott 

11 (PowerPoint presentation.) 

12 MR. SCOTT: Good morning. I'm Mike Scott. I 

13 worked on a couple of items that we're going to be 

14 talking about here. I'll be talking both about the 

markups, which are found in Chapter 6 in the TSD and 

16 described briefly in the NOPR, and also the life-cycle 

17 cost analysis in Chapter 8. 

18 So, first, to the markups, I have two slides 

19 on that. One describes the distribution channels and 

one describes the basis for the markups. We had some 

21 information on the distribution channels on the pattern 

22 of distribution of the equipment that we're dealing 

23 with in this rulemaking. There was, in particular, a 

24 market study that was done in 2001 by Drucker 

Industrial Standards. It describes the market and 

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1 provides information on what the distribution channels 

2 actually are. 

3 From that information we were able to develop 

4 four primary channels. One is the equipment that's 

sold directly from manufacturer to a customer, usually 

6 a very large one, on a national account. The second 

7 channel goes through a wholesaler distributor. Some of 

8 that equipment is sold directly to the customer. Some 

9 of the equipment passes either through a mechanical 

contractor and then to the ultimate customer, and some 

11 of it actually passes through the mechanical contractor 

12 but that mechanical contractor is working with a 

13 general contractor. 

14 The information that we had suggested that 

there really was a separate set of patterns in the 

16 replacement market as opposed to the new construction 

17 market. When we say "replacement," we mean both 

18 standard and nonstandard equipment, not the old ASHRAE 

19 definition. 

But all of the nonstandard equipment goes, in 

21 our analysis, to the replacement market only, okay? 

22 Are we clear on that? So the percentages, then, for 

23 the replacement market are about 15 percent national 

24 account, 25 percent wholesaler directly, 60 percent 

mechanical contractor directly, and actually, nothing 

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1 going to a general contractor. 

2 For new construction, 30 percent national 

3 account, nothing directly from wholesaler, 38 percent 

4 mechanical contractor, and 32 percent through a general 

contractor. So those are the patterns that we believe 

6 best describe the market. 

7 The markups themselves came from a number of 

8 sources. We were able to find firm balance sheet 

9 averages from the Heating, Air Conditioning, and 

Refrigeration Distributors International. They had a 

11 2005 Profit Planning Report that gave us information on 

12 the balance sheets of the wholesaler distributors. 

13 For the mechanical contractors we used two 

14 sources: the U.S. Census Bureau financial data on 

plumbing, heating, and air conditioning contractors 

16 from the 2002 census, and then we also had information 

17 from the Air Conditioning Contractors of America 

18 financial analysis data for 2005. We used those two 

19 together because some of the equipment we only had 

partial data from one source or the other, so we 

21 blended them. All that detail is in Chapter 6. 

22 For the general contractors, we used 

23 financial data for commercial and institutional 

24 building contractors from the 2002 census. In each 

case, that's the most recent information available. 

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1 There was about a 20 percent to 80 percent 

2 split of equipment between new construction and the 

3 replacement market for the standard size equipment. Of 

4 course the nonstandard size equipment all goes to the 

replacement market. 

6 The outputs that we got were weighted average 

7 baseline markups, and replacement markups separately, 

8 for baseline efficiency equipment and then also, 

9 because some of the components of cost don't scale with 

efficiency -- that is, they're the same regardless of 

11 the efficiency of the equipment -- we also provided 

12 incremental markups. Those are baseline -- both 

13 baseline and the incremental markups are weighted 

14 averages based on the distribution channels that I just 

described. 

16 If there are questions or clarification, that 

17 might be a good place to stop. Then I'll go to the 

18 life-cycle cost analysis. 

19 MR. BROOKMAN: Okay. Questions on 

distribution channels and the markups to determine 

21 price? 

22 (No response.) 

23 MR. BROOKMAN: Comments on those two slides 

24 before he moves on? 

 (No response.) 

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1 MR. BROOKMAN: I see none on those. 

2 MR. SCOTT: All right. We'll move on. 

3 Okay. For the life-cycle cost analysis, I 

4 have a summary slide here that I'll go through briefly. 

I've got one on the process, two on the inputs, and 

6 then one that describes some of the outputs. All of 

7 this is in Chapter 8, and there's a related appendix as 

8 well. So there's a great deal of detail provided 

9 there. We don't have time to go through it all this 

morning, but I'll give you a 10,000-foot view of the 

11 whole thing. 

12 All right. Life-cycle cost in this analysis 

13 equals the customer price, which is the manufacturer's 

14 cost -- manufacturer's price rather, plus the markups 

that I just described, plus the installation cost, and 

16 I'll be going over that in a moment. And then, besides 

17 the initial price, the initial customer price, we have 

18 the sum of annual operating costs appropriately 

19 discounted to the present, which in this case we 

consider to be the first year in which the equipment 

21 would be in the marketplace, 2012. 

22 We do the economic evaluation from the 

23 customer perspective. We did the analysis in an Excel 

24 spreadsheet model. Because we were asked to do 

uncertainty analysis with that spreadsheet model, we 

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1 have -- we do it inside of -- and you'll see this in 

2 Chapter 8 -- we do it inside of a package called 

3 Cristal Ball, which is a commercial add-on to the Excel 

4 spreadsheet. 

The spreadsheet itself is available out on 

6 the website for this rulemaking, and you can exercise 

7 it yourself. We don't provide Cristal Ball out there, 

8 but the Excel spreadsheet works perfectly well without 

9 it. You can do any sensitivity analysis you wish with 

that spreadsheet. 

11 The results from the analysis are expressed 

12 as life-cycle cost savings, which would be the 

13 difference in life-cycle cost between the baseline 

14 level and the presumably lower, if it's a savings, cost 

associated with a standard level. We also calculated a 

16 simple payback period because some people like to look 

17 at that as a figure of merit. 

18 Briefly, this is the way the life-cycle cost 

19 calculation works. There are essentially two elements: 

the calculation of the total installed cost and the 

21 calculation of the lifetime operating cost. In the 

22 upper left-hand corner there, you'll see that we take 

23 the baseline manufacturer's price and the 

24 manufacturer's prices at each of the standard levels 

basically as calculated in the analysis that was 

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1 presented this morning by Ashley. 

2 From that we -- to that we add the markups 

3 for the equipment price, the distributor markup if 

4 appropriate -- and it usually is -- the mechanical 

contractor markup, and I would add the general 

6 contractor markup, and also sales taxes. Of course, 

7 those sales taxes vary by state, so the analysis, when 

8 we did the full analysis, was actually done at the 

9 state level. 

Those two things together are the customer 

11 price. To that we add an installation cost, which we 

12 were able to obtain, and I'll discuss that in a moment. 

13 That gives us a total installed cost. 

14 Down below, we take energy consumption from 

the energy use analysis, which Bing just described, and 

16 against that energy uses or that electricity use we 

17 apply electricity prices, and I'll discuss those in a 

18 moment. Together that's an annual energy expense. To 

19 that we add repair cost estimate and an estimate of 

maintenance cost, and that gives us annual operating 

21 expense. 

22 We spread the annual operating expense, or 

23 rather halve the annual operating expense for each year 

24 in the lifetime of the equipment. The equipment 

lifetime we calculated as an average of 10 years, but 

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1 we actually have a distribution for that. The minimum 

2 is about three years, the maximum about 20 years. 

3 We apply a discount rate to each of the 

4 future values, bring it back to 2012. Each of those 

years with the electricity prices changing, we apply an 

6 electricity price trend over time to take that into 

7 account. And the present value of all that is the 

8 lifetime operating expense. 

9 The total installed cost plus the lifetime 

operating expense are the life-cycle costs of that 

11 equipment. The ratio between the total installed cost 

12 and the annual operating expense is the payback period. 

13 Okay. Now to some of the inputs. The life14 cycle cost analysis, as I just described it, was based 

on a state-by-state average electricity price for the 

16 commercial sector paid by, as we calculated, four 

17 business types that use PTAC and PTHP equipment. 

18 That's large hotel/motel chains, independent 

19 hotel/motels, nursing homes and assisted care 

facilities, and small offices, which you can think of 

21 as things like dentists' offices and physicians' 

22 offices, mostly in the healthcare sector. 

23 The electricity prices by business types were 

24 developed by taking the commercial prices and 

developing a ratio of the average price to each of 

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1 those four building types as it appears in the 2003 

2 Commercial Building Energy Conservation Survey by the 

3 business type. We applied those ratios then against 

4 the state-by-state average commercial sector prices to 

obtain the appropriate price by business type. 

6 We calculated those average commercial 

7 electricity prices, obtained the data on that from the 

8 Energy Information Administration for 2006, which was 

9 the most recent data available, to obtain state-bystate electricity prices by business type. The state11 by-state prices by business type were projected then to 

12 2012 using the EIA Annual Energy Outlook 2007 National 

13 Commercial Electricity Price Trends. 

14 Now, all of those price data have since been 

updated, so in the final rule analysis we'll use the 

16 latest EIA data and the AEO 2008 forecast. I haven't 

17 actually checked this morning, but allegedly that was 

18 available by the end of April. 

19 MR. BROOKMAN: Harvey Sachs. 

MR. SCOTT: Question? 

21 MR. SACHS: Harvey Sachs, ACEEE. I did some 

22 word searches through the chapter and thereby admit 

23 that I haven't read it in detail as some of my 

24 colleagues. 

MR. SCOTT: Okay. 

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1 MR. SACHS: What I don't get is any sense 

2 that you actually looked at demand charges as opposed 

3 to energy charges or simply used a rolled-in average of 

4 demand in energy in the average energy cost. 

MR. SCOTT: We used the rolled-in average. 

6 MR. SACHS: I would respectfully suggest that 

7 for many states recent information suggests that the 

8 decoupling of demand in energy is proceeding, that 

9 demand is an increasingly large fraction of cost, and 

that trend will continue. Most recently, we have 

11 information from Tennessee Valley Authority of an 

12 extraordinary capacity shortfall projected within a few 

13 years. 

14 For these reasons and the fact that EIA's own 

forecasts have changed by typically 20 percent each 

16 year, we're very concerned about the way that you're 

17 treating demand. I don't have a fix for you, but I 

18 think it's important for all of us to remember that if 

19 the cost of a kilowatt demand reduction is X, the cost 

of a kilowatt demand of supply, however few hours it is 

21 utilized, is in the range of $1,000 now and frequently 

22 much more, even CTs, by the time you consider 

23 reinforcement. 

24 It is absolutely imperative for rational grid 

planning that we come to grips with these attributes 

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1 and with the increasing willingness of utilities to pay 

2 to avoid those demand increments. 

3 MR. BROOKMAN: Thank you. Yes, Karim. 

4 MR. AMRANE: Karim Amrane, AHRI. I guess I 

just want to caution here not to make this analysis 

6 more complicated than it already is. I remember a few 

7 years ago when DOE was doing one of the rulemakings on 

8 commercial air conditioners an extensive analysis on 

9 hourly cost of electricity and so on that, at the end -

- and I don't know how many millions of dollars DOE 

11 spent on this -- at the end, that analysis was showing 

12 not much difference between an average cost, you know. 

13 So what I'm saying here, let's not complicate 

14 the matter because at the end of the day I'm not sure 

it will make a big difference in the outcome of this. 

16 MR. BROOKMAN: Okay. Thank you. 

17 MR. SACHS: Harvey Sachs. Let me just 

18 elaborate a little bit. I'm not sure that this 

19 analysis would favor my case. But in particular, 

you're doing the hourly simulations of load. So what 

21 we're asking for is to lay these against the utility 

22 load profiles. It may be that in your predominant 

23 billing type the peak load is early evening, after the 

24 commercial building load. I don't know. 

But nonetheless, the increasing importance of 

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1 demand, and we could cite lots of examples, would 

2 suggest that a small amount of additional information 

3 to get a sense of this is likely to be important. 

4 Thank you. 

MR. BROOKMAN: Thank you. Okay. Additional 

6 comments on this? I think you should just proceed. 

7 MR. SCOTT: Just proceed. Okay. Some other 

8 inputs that I mentioned on the earlier slide. We have 

9 installation costs on PTAC and PTHP equipment. There 

is a commercial source called RS Means CostWorks, and 

11 we used their data on that. 

12 For discount rates, we used the weighted 

13 average cost of capital approach that's described in 

14 the TSD. The data on individual firms actually comes 

from a website that's maintained by a finance professor 

16 at New York University by the last name of Damodaran. 

17 I think I pronounced the name correctly. That's 

18 available online. 

19 The equipment lifetime, as I alluded to 

before, is a statistical distribution based on a 

21 commonly used statistical construct called the Wible 

22 Distribution. And it begins a very slow decline. It's 

23 used in engineering failure analyses and has, in this 

24 case, a lifetime average of 10 years, and then the 

longest-lived equipment is about 20 years. 

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1 The repair costs were an annualized value 

2 based on warranty contracts. Finally, we did an 

3 estimate of maintenance costs ourselves. 

4 So DOE is interested in how installation, 

maintenance, and repair costs may change with the 

6 implementation of 410A refrigerant in 2010 because at 

7 least the current information is based on DOE -- is 

8 based on data from the field for equipment that's R22. 

9 I would remark that the escalation of the 

cost by efficiency level does reflect a difference in 

11 cost of the R410A equipment, but there might be a 

12 question about the baseline. 

13 MR. BROOKMAN: So, we've already had some 

14 comment on this. Karim. 

MR. AMRANE: Karim Amrane, AHRI. Did you 

16 assume that the maintenance cost was zero, basically? 

17 MR. SCOTT: No. We assumed for the 

18 maintenance cost, which is basically keeping them 

19 oiled, keeping them clean, and so on, not repairs. We 

assumed $50 a year per unit. 

21 MR. AMRANE: Per unit. Irrespective of 

22 efficiency, right? 

23 MR. SCOTT: Irrespective of efficiency, yes. 

24 MR. AMRANE: Okay. I think there's a belief 

among manufacturers that as you will go higher in 

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1 efficiency, as equipment will get more surface area for 

2 the heat exchangers that there will be more maintenance 

3 to clean the equipment than you currently have, for 

4 example. So it's something that needs to be -- we 

think needs to be --

6 MR. SCOTT: We'd be happy to have data. 

7 MR. AMRANE: Right. 

8 MR. BROOKMAN: Okay. Thank you. Harvey 

9 Sachs. 

MR. SACHS: Harvey Sachs, ACEEE. There's 

11 abiding faith in our organization that as equipment 

12 redesigns are undertaken that we will actually have 

13 increased reliability because manufacturers do learn, 

14 and it's something we celebrate. So that, we are 

likely to have greater reliability that may offset the 

16 possible increase in maintenance, and we'd suggest that 

17 repairs are in a different labor category than 

18 maintenance in these environments. We don't have an 

19 answer, an analytical answer, but we would guess these 

would be offsetting and a credit to the industry. 

21 MR. BROOKMAN: Okay. Ron Lewis. 

22 MR. LEWIS: Earlier this morning when you 

23 made your remarks for General Electric I believe you 

24 noted that you took issue with the maintenance cost, 

that that was one area where you thought we were -- we 

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1 needed to take another look. Can you elaborate on that 

2 in this section? 

3 MR. BROOKMAN: Jim. 

4 MR. BENZ: Jim Benz. Actually, I didn't make 

the comment with respect to maintenance costs. I made 

6 the comment with respect to repairs. 

7 MR. LEWIS: Repairs? 

8 MR. BENZ: Our experience, which is 

9 extensive, with customers would suggest that the 

maintenance on units is typically charged on a per-unit 

11 basis, and I'm talking primarily cleaning. It's done 

12 one of two ways. It's either done contracted out to a 

13 local company at a fixed cost. I have never once seen 

14 a variable cost for various efficiencies. The 

efficiencies over the last five years have changed on 

16 our product on the order of close to 10 percent. 

17 The other way a property will typically 

18 handle the maintenance is with their in-house 

19 maintenance, and on a per-unit cost that is suggested, 

that would be variable as a function of efficiency, we 

21 don't see that. 

22 The one area where we do expect to see some 

23 cost impact is with respect to service and primarily 

24 potential for a slightly more expensive service call as 

a function of parts. Nothing significant. But we do 

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1 expect service call costs to go up as a result of 

2 having to buy new equipment. We have 2,000 techs 

3 around the United States, and every single one of those 

4 trucks will have to be equipped with 410 equipment. It 

is not a capital expense, so it's an actual expense. 

6 But that's a one-time charge. It's a one7 time hit, and it's going to have to happen. We have to 

8 do it for window air conditioners. We have to do it 

9 for all of our other air conditioning products, and 

this just ends up being one of the products that we 

11 have to have that equipment to service. 

12 MR. BROOKMAN: Scott. 

13 MR. TOUKATLY: Scott Toukatly. I think like 

14 for like. I don't really see -- I'm speaking for me, 

my company -- that I don't think we see a big 

16 difference like for like in maintenance cost, probably. 

17 But when you get into repair costs, I guess I would 

18 turn the question around. 

19 I'm a little bit more concerned -- I think 

we're a little bit more concerned -- and I don't know 

21 if I'm speaking for the industry, the PTAC 

22 manufacturers -- of the opposite effect of the expense 

23 of -- that may be taken on by the maintenance and 

24 repair, maybe more specifically the repair of the R22 

systems that may remain in place if the standards are 

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1 set too high and they can't be met and it causes -- or 

2 the expense of meeting those standards is more than 

3 customers are willing to pay. They may be sitting on 

4 older equipment longer and less efficient equipment 

that is also generating more cost for repair and 

6 maintenance. 

7 MR. BROOKMAN: Okay. Thank you. Yes, 

8 please. 

9 MR. GUFFEY: Tom Guffey, Goodman. In your 

analysis on the life-cycle of the PTAC, you stated the 

11 10-year average, 20 years. Was that strictly done with 

12 rotaries or were there some reciprocation? How far 

13 back did you go in your analysis? 

14 MR. SCOTT: Actually, we had some information 

from -- I believe this was from industry statements 

16 that 10 years was pretty good for an average. There 

17 was some average that somewhat longer -- some people 

18 kept their machines a lot longer than that. I'm 

19 presuming that's the current equipment, but I don't 

know the details of the technologies involved. 

21 MR. GUFFEY: Tom Guffey again. The industry 

22 switched from reciprocating back in the mid to late 

23 '80s to rotaries. We've seen quite a degradation in 

24 the overall life expectancy of the units with that 

change, the rotary being much more susceptible to heat 

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1 damage. 

2 And with the heat exchange coil surface 

3 probably having to go to a denser fin pack to get to --

4 since we're in the 42-by-16-inch constraints, and 

adding coil depth as well, going to possibly three- or 

6 even four-reel coil. 

7 And also, the fact that a PTAC -- the 

8 condenser side certainly doesn't have a filter and 

9 you're also using a slinger ring to throw water onto 

that coil, which is going to catch the dirt more 

11 frequently, I have general concerns over maintenance 

12 both inside of the warranty and outside of the warranty 

13 to customers and manufacturers and dramatically 

14 shortened life of the compressor. 

MR. SCOTT: I'm sure that the Department 

16 would be glad to have any data that you can provide on 

17 that, or any opinions that would suggest that we use 

18 different numbers than what we're using. 

19 MR. BROOKMAN: Thanks for that detailed 

description. That's helpful. 

21 

22 

23 

24 McQuay. 

MR. SCOTT: The explanation is very helpful. 

MR. BROOKMAN: Very, very helpful. Mary Ann. 

MS. STOJKOVSKI: Yes, Mary Ann Stojkovski, 

MR. BROOKMAN: Mary Ann, get close to the 

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1 mic, please. 

2 MS. STOJKOVSKI: Yes, sorry. 

3 MR. BROOKMAN: Thank you. 

4 MS. STOJKOVSKI: Can you hear me? 

MR. BROOKMAN: Yes. 

6 MS. STOJKOVSKI: I just have a question on 

7 your analysis and how the installed cost was 

8 determined. I'm wondering if you made a distinction 

9 regarding replacement equipment versus standard 

equipment as far as the customer price is concerned as 

11 there is a very big difference between replacement 

12 equipment and standard equipment in terms of price to 

13 customers because of the nature of the type of 

14 equipment it is. 

MR. SCOTT: Okay. What we did do was to look 

16 at the 2002 census of the construction industry. So 

17 this is primarily -- this installation, then, is 

18 primarily based on mechanical contractors in each 

19 state. And we had the costs in each of those cases 

that we could apply a ratio against -- I'm sorry. This 

21 is installation cost. We had the data that I just 

22 described. We had it by state, and we used that by 

23 state. 

24 Now, as to the difference between -- I 

recognize that there would be a difference between the 

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1 installation -- essentially, a replacement drop-in and 

2 maybe building from the beginning. My understanding of 

3 what that data reflect, however, is that it's the cost 

4 of sliding in the equipment and setting it up after the 

hole is available. 

6 MS. STOJKOVSKI: Mary Ann from McQuay. Yes. 

7 To install it, yes. But I think initially part of 

8 your analysis takes into account the customer price. 

9 And --

MR. SCOTT: Right. 

11 MS. STOJKOVSKI: I just want to say that 

12 there is definitely a difference with someone coming in 

13 to replace a unit in a nonstandard configuration that 

14 one usually is something that the manufacturer has to 

build to order. It's not something that's going to 

16 come off the shelf. 

17 MR. SCOTT: Okay. Understood. 

18 MS. STOJKOVSKI: It is going to be vastly 

19 more expensive to the manufacturer and will cost much 

more to the consumer when they get into the replacement 

21 market. It should be considered. That is -- that will 

22 affect your life-cycle cost amount. 

23 MR. SCOTT: All right. I think I understand 

24 the comment now. Again, we'd be very pleased to have 

anything quantitative that you can tell us about that. 

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1 MS. STOJKOVSKI: Okay. 

2 MR. BROOKMAN: Karim first. 

3 MR. AMRANE: Karim Amrane. Just to follow 

4 up. To answer the question did you assume the same 

installation cost for replacement for nonstandard 

6 versus standard? 

7 MR. SCOTT: Yes. 

8 MR. AMRANE: Okay. Thank you. 

9 MR. BROOKMAN: Okay. Harvey Sachs. 

MR. SACHS: Harvey Sachs. The installed cost 

11 numbers were sort of fascinating. One question is sort 

12 of a sanity check. I read it twice, but I still wound 

13 up seeing a $50 lower installed price, or was that 

14 manufactured price, for the heat pump version than for 

the PTAC. Did I read that correctly as what the 

16 standard says? 

17 MR. SCOTT: That doesn't sound right to me, 

18 but I'm not sure. 

19 MR. SACHS: It should be the opposite. I 

would have expected --

21 MR. BROOKMAN: Ashley, come to the 

22 microphone. 

23 MR. SACHS: I hope so. 

24 MR. BROOKMAN: Wait. Let's give Ashley a 

chance and then we'll return. 

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1 MS. ARMSTRONG: I think you have them 

2 switched. I didn't look at the total installed cost 

3 numbers, but I can speak from a manufacturing cost 

4 point that the heat pumps are higher than the ACs. The 

difference you're talking about is pretty close to what 

6 is estimated in our analysis, so. 

7 MR. SACHS: Well, I hope I was wrong because 

8 it didn't make sense. 

9 MS. ARMSTRONG: Yes. 

MR. SACHS: What I didn't find, Ashley --

11 again, this is Harvey Sachs -- was the difference in 

12 installed cost estimate, or even in manufactured cost 

13 estimate, between the nonstandard and the standard in 

14 the same capacity. 

MS. ARMSTRONG: That's because we looked at 

16 different capacities for nonstandard versus standard. 

17 But there is a difference in manufacturing costs 

18 respectively for nonstandard and standard size 

19 equipment. The tables by efficiency level are in 

Chapter 5. I can't speak to the total installed cost, 

21 but I can --

22 MR. SACHS: I'm sorry. Mary Ann has raised a 

23 very important question. It would be very helpful to 

24 have the analysis indicate whether there is a 

significant up charge for -- at the manufacturing level 

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1 or at the installed level for the nonstandard 

2 equipment. 

3 MS. ARMSTRONG: I can show you the tables at 

4 the next break. 

MR. BROOKMAN: Ron, please. I also see that 

6 Bing is able to comment. 

7 MR. LEWIS: This is really healthy to have 

8 all these questions come out. What will be even more 

9 helpful is having data or any specifics to support the 

concerns. One of the things as far as the differences; 

11 I've heard this morning -- there were some discussions 

12 that almost made it sound like characterizing 

13 nonstandard size units that were somewhat standardized. 

14 There were some implications of that some places, and 

then other people have said no, that's not the case. 

16 I think I just heard you say that for the 

17 replacement market and the nonstandard sizes it's --

18 you're characterizing it as custom. 

19 MS. STOJKOVSKI: That's absolutely correct. 

This is Mary Ann from McQuay. 

21 MR. BROOKMAN: That's Mary Ann speaking. 

22 MS. STOJKOVSKI: In a lot of instances we 

23 don't keep that on shelf. It's not like the 16-by-42 

24 standard market. It's very unique. We get the orders. 

We have to schedule them into production, and 

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1 sometimes they're small run orders, sometimes they're 

2 larger. It's a completely different process than the 

3 standard side. 

4 We sell both. We sell standard equipment and 

nonstandard. I can tell you the nonstandards are 

6 vastly more complicated to build, and it is built to 

7 order. It's small volume orders, and it's provided as 

8 needed out there. 

9 MR. LEWIS: Okay. So, just to carry on with 

the installed cost issue, then if that's the case then 

11 it would be very important to get any kind of 

12 multiplier or any kind of guidance that you could give 

13 as far as what you're seeing from the manufacturing 

14 side since that directly translates into installed 

cost. 

16 MR. BROOKMAN: Thank you. Thank you, Mary 

17 Ann. I appreciate that. Bing. 

18 MS. LIU: I have a clarification here. I 

19 heard we're actually using the same term maybe talking 

about different things. We're using the term 

21 "installed cost," and we're using the term 

22 "installation cost." I want to differentiate between 

23 these two. 

24 The installed cost we're using is the final, 

final cost paid out of the pocket from the customer who 

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1 purchased the PTAC or PTHP. 

2 To answer your question, Mary Ann, for 

3 installed cost, we see actually a quite significant 

4 difference between standard and nonstandard equipment. 

One of the reasons is, as you said, it costs more to 

6 build nonstandard equipment. And also, because the 

7 distribution channel is different. You have a much 

8 smaller market, leading to you charged more a little 

9 bit because for nonstandard equipment. 

So we have a multiplier we call markup that 

11 is quite different between standard and nonstandard. 

12 So that makes the first cost between standard and 

13 nonstandard quite different. 

14 But, on the other side, if you're talking 

about installation cost, after you've already purchased 

16 the equipment and you just want to hire somebody to pop 

17 in that unit, my understanding assumption is we didn't 

18 differentiate. We're just saying that's the same. So 

19 that's kind of the clarification here. Thank you. 

MR. BROOKMAN: Thanks for that. 

21 MR. SCOTT: May I add to that? This is Mike 

22 again up front. So, if I did misunderstood -- if 

23 that's a correct characterization and you still believe 

24 that the installation cost is different, then we really 

do need some additional information. 

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1 MR. BROOKMAN: Mary Ann. 

2 MS. STOJKOVSKI: Mary Ann from McQuay. The 

3 process of installing the equipment would not vary. 

4 MR. SCOTT: Okay. 

MS. STOJKOVSKI: It should be a drop-in. 

6 MR. SCOTT: Okay. Thank you. 

7 MS. STOJKOVSKI: But to get the equipment and 

8 the final cost to the customer, when you add it all 

9 together --

MR. SCOTT: Right. 

11 MS. STOJKOVSKI: -- is vastly different. 

12 MR. SCOTT: Right. Okay. Thank you. 

13 MR. BROOKMAN: Thank you. Thank you. That 

14 was helpful. Okay. Additional comments on this series 

of issues before we proceed? 

16 MR. SCOTT: One in back. 

17 MR. BROOKMAN: Yes, please. Your name for 

18 the record. 

19 MR. BURT: Lane Burt, NRDC. I'd like to 

bring up the issue of the monetization of carbon, which 

21 is in the NOPR but not in the life-cycle cost analysis. 

22 The issue is, should it be input into the life-cycle 

23 cost analysis and the net present value analysis. 

24 Secondarily, we should get the price right. 

The new EIA report was mentioned earlier, and that has 

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1 the most up-to-date value for carbon in it, including a 

2 forecast of future prices. So that would be the data 

3 that we would point to as this is what you should use. 

4 MR. BROOKMAN: Does NRDC have a perspective 

on this? Are you going to be an advocate? 

6 MR. LEWIS: It's on the agenda later. 

7 MR. BROOKMAN: Oh, it's on the agenda later 

8 I'm told. Okay. Great. Ron, you had other things to 

9 say about this? 

MR. LEWIS: No. 

11 MR. BROOKMAN: No, that's it? Thank you. I 

12 didn't realize. On the agenda later. Okay. 

13 Okay. Other comments, then, on this segment? 

14 Yes, Tom. 

MR. GUFFEY: Tom Guffey, Goodman. Just one 

16 more comment on the maintenance cost of PTAC units 

17 going forward. We as manufacturers can guess at what 

18 that might be. I know the question was brought up 

19 about supplying data on some of these issues. I think 

that going to servicers -- I know GE runs their own 

21 trucks. Some other third party servicers are out in 

22 the industry, as well as hoteliers themselves, might be 

23 able to give you better data than the manufacturer. We 

24 design to pristine conditions based on certain 

standards on AHRI test standards, and we're talking 

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1 about laboratory versus what's real world once they're 

2 installed. 

3 Again, let me reiterate that fins per inch. 

4 I'm concerned about a quicker fouling of the condenser 

specifically and how that relates to compressor 

6 degradation. I do have concerns on maintenance from a 

7 perspective of hoteliers and other types of customers. 

8 How do they know when a unit is dirty. I think the 

9 answer is after we've already had compressor 

degradation that can't be reinstated once the unit is 

11 cleaned at that point. 

12 So I do have some major concerns about that 

13 and how that relates with the viability and longevity 

14 of the rotary compressor in general. 

MR. BROOKMAN: Okay. Thank you. Ron Lewis. 

16 MR. LEWIS: Karim, you were earlier talking 

17 about the ASHRAE standards and all and the committees. 

18 Have any of these issues been brought up in the 

19 committees? Is there anything that shows any study on 

the change to the rotary compressors or impacts from 

21 that change? 

22 MR. AMRANE: Well, when Steve Nadel submitted 

23 the proposal to 90.1, we had a discussion at the 90.1 

24 committee about moving forward, the decision about 

moving forward with a more stringent 90.1 standard. 

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1 And we expressed the concern that we have expressed to 

2 this group as well in terms of what can be achieved, 

3 the concerns we had about the non-availability of 

4 compressors, and so on. 

The committee, hearing both sides, decided 

6 not to act because of the concerns that we raised. And 

7 there was some discussion about maybe, you know, 

8 inquiring about compressor technology and so on. 

9 The 90.1 committee did not do anything 

further. I know that Steve Nadel was supposed to 

11 research further this compressor technology, but we 

12 haven't heard from him, either. Again, I mean, this 

13 issue stopped. Of course, DOE was doing the rulemaking 

14 as well and people were waiting for DOE. 

MR. BROOKMAN: Okay. Thanks. 

16 MR. SCOTT: All right. Just to give you kind 

17 of a rough idea of what some of the analysis results 

18 look like, this is just a single set of curves for a 

19 single piece of equipment running with R410A under the 

conditions that we heard about this morning and the 

21 average life-cycle cost savings versus efficiency level 

22 for standard size PTACs, PTHPs at 9,000 Btu/h and 

23 12,000 Btu/h. 

24 The two positive curves with life-cycle cost 

savings as efficiency increases are both for PTHPs, and 

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1 the two life-cycle costs -- two places where life-cycle 

2 cost actually increases, therefore there are negative 

3 savings, are for PTACs. The difference between the two 

4 is largely because you get credit for the heating cycle 

on the PTHP side. 

6 If you go to the TSP and to the NOPR, you'll 

7 see the distribution of results for all of the 

8 equipment. 

9 MR. BROOKMAN: Karim. 

MR. AMRANE: Karim Amrane, AHRI. I guess I 

11 have a couple of questions. The chart for the 410A 

12 PTHP at 9,000, that doesn't seem to be right to me 

13 anyway. I don't know; maybe it's something -- I would 

14 have expected the chart to go through maximum and then 

go down, but then coming up again, I'm not quite sure I 

16 understand that. 

17 But then I have another question on the PTAC. 

18 If I read those charts correctly, we don't have any 

19 savings here. I mean, customers would be losing money 

by -- at any level except maybe -- you'd be losing 

21 money. 

22 I guess I have a more fundamental question to 

23 DOE. I mean, if that's the case, I mean, how can DOE 

24 justify the standard if the outcome is that the 

customers would be losing money by buying more 

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1 efficient product? 

2 MR. SCOTT: Do you want to deal with that at 

3 this point or do you want to do it at the TSL 

4 description? 

MR. LEWIS: We're interested in perspectives. 

6 MR. SCOTT: All right. This happens -- as I 

7 tried to point out, though, this -- keep in mind that 

8 this is one set of conditions. This is average price, 

9 average energy use, and you actually have quite a bit 

of difference across the country. So what you really 

11 have to look at is the distribution of gainers and 

12 losers in each case. 

13 There were also some decisions made that we 

14 can maybe go into later about how the TSLs were 

actually put together based on those efficiency levels. 

16 MR. BROOKMAN: So this is the national 

17 average. 

18 MR. SCOTT: This is national average 

19 conditions. 

MR. BROOKMAN: All prices, all climate zones. 

21 MR. SCOTT: Yeah. 

22 MR. BROOKMAN: Okay. Harvey. 

23 MR. SACHS: Harvey Sachs, ACEEE. At the risk 

24 of wearing out my welcome by singing the same one note 

many times, these numbers are in the range of less than 

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1 2 percent, even at the extremes, of the total life2 cycle cost. I think it remains to be established that 

3 such small deltas in a very, very large number are even 

4 meaningful, that they're even -- even the trends say 

anything that we have much confidence in, that these 

6 are -- Karim and I vary enormously in our 

7 interpretation of the meaning of these two graphs. 

8 (Laughter.) 

9 MR. BROOKMAN: It's useful for the Department 

to hear that variation. 

11 MR. SACHS: Well, the question of sensitivity 

12 comes up over and over that we have admitted that we've 

13 been a little bit arbitrary in our assumption of 

14 lifetime, for example, and that's a number which is 

influential in determination for the life-cycle cost 

16 analysis. We've certainly had input that we haven't 

17 fully understood some of the changes in cost. 

18 Well, LCC is reasonably sensitive to the 

19 question of whether we're using five-year, 10-year, 15-

year life for the equipment. 

21 One of the things I'm missing, and I 

22 appreciate the efforts the Department has made, is a 

23 general sense of the size of the difference that's 

24 required before you have any willingness to jump to 

that trapeze. Thank you. 

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1 MR. BROOKMAN: Yes, Tom. 

2 MR. GUFFEY: Tom Guffey, Goodman. I 

3 apologize; I haven't read all of the material. But one 

4 question comes to mind on increased heat pump usage. 

As part of life-cycle cost analysis and the fact that 

6 drain systems are required for buildings on heat pumps 

7 under most codes, was that part of the cost impact 

8 where that typically is not something for PTAC but it 

9 is required for PTHP installs for most of the country? 

Drain systems are fairly expensive. 

11 MR. SCOTT: For the installation price 

12 itself? 

13 MR. GUFFEY: Correct. 

14 MR. SCOTT: We didn't vary it by PTACs or 

PTHPs. I'm presuming that as a result it's probably a 

16 mix of the two in the statistics. 

17 MR. GUFFEY: Okay. I guess, further, to 

18 state that most cooling-only electric heat PTACs 

19 typically don't have drain systems. 

MR. SCOTT: Right. 

21 MR. GUFFEY: Where heat pumps do. That's 

22 fairly expensive in the construction phase and almost 

23 impossible to do on a retrofit basis. 

24 MR. SCOTT: I see. Going forward, 

particularly. 

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1 MR. GUFFEY: If a building has been designed 

2 for no drain system and you have a straight-cool 

3 product, the odds of somebody putting a heat pump in 

4 because of the water coming outside without a drain 

system is pretty low. 

6 MR. SCOTT: Okay. Thanks for that 

7 perspective. 

8 MR. BROOKMAN: Thank you. Other comments 

9 surrounding this chart, 31? 

 (No response.) 

11 MR. BROOKMAN: Okay. 

12 MR. SCOTT: I'm done. 

13 MR. BROOKMAN: You're done? 

14 MR. SCOTT: Yeah. 

MR. BROOKMAN: Yeah, I thought so. It's just 

16 about noon. It's a couple minutes before noon. I 

17 think we should pause for lunch. It typically takes at 

18 least an hour to eat lunch and get back here. That's 

19 provided you don't go off campus, for those of you that 

are new. 

21 While you're in the building, please make 

22 sure to wear your security badge because someone will 

23 stop you and escort you if you don't wear one. I 

24 promise you they will. 

We will lock this room, so you can leave your 

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1 materials here, and no one will be able to get in. 

2 It's now noon. We'll resume at one. 

3 (Whereupon, at 11:58 a.m., the proceedings 

4 were adjourned for lunch, to reconvene at 1:05 p.m., 

5 the same day.) 

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1 A F T E R N O O N S E S S I O N 

2 (1:05 p.m.) 

3 MR. BROOKMAN: Let's resume. We left off 

4 with Slide 31 and now we're on Slide 32, not 

surprisingly. Mike Scott is going to take us through 

6 these. 

7 National Impact Analysis 

8 Michael Scott 

9 (PowerPoint presentation.) 

MR. SCOTT: Okay. I'm still up here, I 

11 guess. I'll be talking about the shipments analysis, 

12 which goes with the life-cycle cost and payback period 

13 analysis and a little bit of other information to do 

14 the national impact analysis, national economic impact 

analysis. 

16 The details of the shipments analysis can be 

17 found in Chapter 10 of the TSD and are summarized in 

18 the NOPR, and also the national impact analysis, which 

19 includes the national energy savings, are found in 

Chapter 11 and related appendices. Again, on the 

21 national impact analysis, the model is posted on the 

22 DOE website. 

23 Okay. For shipments analysis I've got four 

24 slides. I'm going to talk a little bit about the 

approach, a little bit about the process, and then I'll 

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1 have two slides on results. 

2 So the purpose of the shipments analysis is 

3 to estimate standard size and nonstandard size PTAC and 

4 PTHP shipments over time. The national impact analysis 

is to -- the purpose of that is to estimate the 

6 national energy savings from standard and nonstandard 

7 PTAC efficiency standards at different efficiency 

8 levels and then to estimate the national economic 

9 impact on the nation, the net present value of the 

savings from equipment energy conservation standards 

11 again at different efficiency levels. 

12 The approach on shipments analysis considers 

13 all the customer choices, including energy-saving and 

14 non-energy-saving substitutes. We do the shipments 

analysis for the period 2012 through 2042. By 

16 guidance, we're supposed to look at 30 years for energy 

17 savings, and the shipment forecasts -- and the 

18 shipments associated with that. The basis for that 

19 material -- for that forecast includes some historical 

shipments data. Some information on equipment 

21 lifetimes is used again to estimate the number of 

22 replacements required. 

23 New installations of equipment are based on 

24 projected floor space construction estimates published 

in the National Energy Outlook, and we used the 2006 

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1 forecast for that. And estimates of equipment mix of 

2 baseline and higher efficiency technologies in the 

3 stock and in the shipments. 

4 Ultimately, the shipments and the stocks of 

equipment are tracked by what we call vintage, which 

6 are a year class. So there's a 2012 class, 2013, 2014, 

7 and 2015, all of which we track in detail. It's 

8 tracked by what market it's in, new or replacement 

9 market, and by equipment class. 

This is a diagram of the shipments model. 

11 It's a pretty busy slide, so let me give you sort of 

12 some of the major elements of it. On the left-hand 

13 side there you see that we had some shipments estimates 

14 from AHRI, not ARI, from 2005. It's, I believe, 1998 

to at least partial year 2006 was covered. We had some 

16 estimates of initial shipments to new construction for 

17 the year 2000 from the earlier market study that I had 

18 talked about. And we had some estimates of initial 

19 replacement shipments for the same year. 

Putting the initial shipments together with 

21 the initial replacement shipments and the ARI estimate 

22 of total shipments, we were able to estimate shipments 

23 to new construction for the period up through 2012, and 

24 then we -- sorry, 2006, and then we took the NEMS, 

National Energy Modeling System, Building Construction 

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1 Forecast for hotels, lodging, for healthcare 

2 facilities, and for small offices to basically do an 

3 index of future construction through the building 

4 stocks for which this equipment would be used. 

We also did an estimate of the initial 

6 building stock -- sorry, the initial equipment stock, 

7 working backwards from the number of shipments to 

8 replacement markets and the estimated lifetime of the 

9 equipment stock. 

We estimated percentage shipments by 

11 equipment class on the right-hand side for 2005, and 

12 then that gave us, together with the shipments of new 

13 construction, total shipments initially by equipment 

14 class and capacity. 

We did the same thing with the replacement 

16 stock in shipments, and then thereafter we simply 

17 integrated forward. As long as we had new buildings 

18 being built, the new buildings had to have equipment 

19 put in it. The equipment wore out according to our 

depreciation model, was replaced, and gradually the 

21 stock built up from those shipments. That was all, as 

22 I said, tracked by year. 

23 What that gives us is some shipments by some 

24 classes here. The new sales on this graph are the 

sales to new construction. Those would all be standard 

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1 size PTACs and PTHPs. The red wedge there reflects the 

2 total replacements for the light blue shipments. The 

3 reason that keeps growing over time is that the light 

4 blue shipments produces an ever-expanding stock. 

The yellow is nonstandard sales. That's all 

6 legacy equipment. So there was a bulge in the 

7 shipments to nonstandard sales in the early 2000 

8 period, but long-term we expect that to gradually go 

9 away as the stock of buildings that employ that 

equipment eventually leave the inventory. 

11 Similarly, for the existing standard stock in 

12 the year 2000, those buildings and that equipment will 

13 not have to be -- the buildings go away and the 

14 equipment will not have to be replaced. 

So those are the shipments. The stock looks 

16 a little different. What you have here, going from the 

17 top, is cumulative new standard units, including the 

18 replacement. So what we're seeing there is that --

19 remember the red wedge. That wedge is sales, but it 

only -- it doesn't change the amount of stock in each 

21 year. It just simply replaces stock that's wearing 

22 out. 

23 Nevertheless, that little blue bar at the top 

24 of the shipments page keeps going -- keeps expanding 

the stock. So what you're seeing there is growth 

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1 beginning in essentially 2000, beginning the period of 

2 analysis, and then 2012, and then increasing up to the 

3 year 2042. 

4 Similarly for nonstandard units, we have an 

existing stock in 2000, and the required stock slowly 

6 depreciates to 2042. And then the standard units 

7 existing in 2000 do the same thing. 

8 What starts happening in 2042 is that we've 

9 essentially stopped the shipments analysis. We've 

stopped the energy analysis, but we're required by 

11 guidance again to look at the national economic impact 

12 of the -- all of the equipment that was present as a 

13 result of this rule in the year 2042. So that goes 

14 away gradually. That's the way we've chosen to show 

this. It probably still is replaced, maybe by other 

16 equipment, but it's not affected by this rulemaking, is 

17 the point. So it goes away, and so that's the time 

18 pattern of shipments that we show. 

19 MR. SACHS: I'm sorry. If I might, this is 

Harvey Sachs. 

21 MR. SCOTT: Sure. 

22 MR. SACHS: I think I must misunderstand this 

23 slide. 

24 MR. SCOTT: All right. 

MR. SACHS: Because it looks to me, in the 

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1 purplish or bluish, that we're showing a reasonable 

2 stock of 50-year-old units in 2052. 

3 MR. SCOTT: There is still a stock in --

4 2052? In 2062? 

MR. SACHS: Both. And I laud you for already 

6 incorporating what Jim said this morning about some 40-

7 year-old units. 

8 MR. SCOTT: Yeah. 

9 MR. SACHS: But, am I really understanding 

this correctly? 

11 MR. SCOTT: No, these are not 40-year-old 

12 units. At most they're 20-year-old units. What's 

13 happening there is --

14 MR. SACHS: But it says standard units 

existing in 2000. 

16 MR. SCOTT: Including replacements for them. 

17 MR. SACHS: Well, I'm sorry. That's just --

18 that was not clear. 

19 MR. SCOTT: I'm sorry because I should have 

said that. No, there are no units in the system older 

21 than 20 years. 

22 MR. SACHS: Well, I take back the nice things 

23 I said about incorporating Jim's feedback from this 

24 morning. 

MR. SCOTT: Okay. Let me go -- I'm actually 

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1 kind of through with that right now. So the issues for 

2 which DOE seeks comments on this are, we have the NES 

3 shipment forecast of total shipments for standard and 

4 nonstandard size equipment. We have a distribution of 

equipment being placed into new buildings and replacing 

6 existing units. And we're interested in any comments 

7 that you have on any of that. 

8 MR. BROOKMAN: So they've laid out -- Mike's 

9 laid out the approach and the shipments model, and you 

can see what they forecast, both shipment and stock. 

11 So, comments on those. 

12 I thought he wowed you with his graphics. 

13 Harvey Sachs. 

14 MR. SACHS: Harvey Sachs again. I think it's 

fair to point out that all of us in the room, including 

16 the analysts, are doing a little bit of suspension of 

17 disbelief that this frozen technology model, which also 

18 reflects today's assumptions about the shape of the 

19 hospitality industry, is going to be applicable for 50 

years. It's an extrapolation that the procedure 

21 requires, but I don't think any of us takes the results 

22 as being likely to be closely applicable to the reality 

23 even our grandchildren will be facing. 

24 MR. BROOKMAN: Would you care to comment 

about how you expect they might be different? Is there 

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1 another plausible way to consider it than this? 

2 MR. SACHS: I think the answer there is my 

3 own preference is to proceed with a certain humility 

4 and not try to extrapolate beyond a time horizon where 

I think it looks similar to today. That might be 2030. 

6 With all due respect to my colleagues at NRDC 

7 and elsewhere who are doing carbon, I don't think I 

8 know what our building stock is going to look like in 

9 2050, much less 2060. 

This is not a critique of Navigant's careful 

11 implementation of the procedure, but it is expressing a 

12 certain amount of skepticism. 

13 MR. BROOKMAN: And of course, the purpose of 

14 these workshops is to get the best ideas from anybody 

that's got them about how the future might look. 

16 MR. SACHS: I've well learned humility about 

17 that. 

18 (Laughter.) 

19 MR. BROOKMAN: As we all have. 

Okay. Additional comments regarding the 

21 approach, the model, and the actual predictions? 

22 (No response.) 

23 MR. BROOKMAN: None? I see none. Okay. 

24 MR. SCOTT: All right. Moving on. Okay. 

Now I'm going to talk a little bit about the national 

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1 impact analysis. I've sort of stolen some of my own 

2 thunder to begin with because I already mentioned to 

3 you that the national energy savings are calculated by 

4 guidance from 2012 through 2042. The result of 

guidance on using the depreciated out equipment for the 

6 national present value analysis puts us out at 2012 

7 through 2062. We already have comments on the record 

8 about that. 

9 The base case that I'm -- that we use in this 

analysis is a market base case. That is, there is a 

11 distribution of efficiency levels assumed to be present 

12 in the marketplace if we had R410A equipment, and we've 

13 talked about that and the costs associated with that, 

14 with the savings associated with those pieces of 

equipment, which we've covered in the LCC analysis. 

16 So, as an example, with no amended standard 

17 -- we actually have a standard -- the 9,000 Btu/h 

18 standard size PTHP we've looked at. We did the 

19 analysis for different efficiency levels. A note on 

this morning's slide on LCC. There was some discussion 

21 around costs associated with efficiency levels. Those 

22 are not costs associated with trial standard levels, 

23 which we talk about later, because what we have is 

24 actually some mixed efficiency levels, compared 

efficiency levels, that I hope we'll talk about a 

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1 little later. 

2 In any case, the percentage of sales here by 

3 efficiency level in the base case is -- there's some 

4 larger in numbers toward the small end, but really 

fairly evenly distributed across the distribution. 

6 What the standards do in this analysis is 

7 actually cut off the availability of the -- in this 

8 case, since we're talking about a standard with an 

9 efficiency -- an EER of 11.3, the lowest three 

categories, which are 10.4, 10.9, and 11.1. Those all 

11 roll up into the lowest available piece of -- the 

12 lowest efficiency available piece of equipment, so that 

13 rather than 16.5 percent it becomes 70 percent. 

14 But notice that the two highest efficiency 

levels are unaffected because even without the standard 

16 those two pieces of equipment, or those two types of 

17 equipment, are already available in the marketplace so 

18 that the standard would not be binding on them. 

19 So, once the amended standard is in place, 

then the old equipment -- see the top table there --

21 will go out of the inventory as it depreciates out. 

22 The efficiency of that equipment is the same as the 

23 base case. The new equipment that replaces it comes in 

24 at the efficiency mix of the new case with the standard 

and new equipment is sold and replaced according to the 

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1 new efficiency mix. So what we have is a less 

2 efficient stock slowly going out of the inventory, a 

3 more efficient stock replacing it. All of that, again, 

4 is tracked by year and market segment. 

So, once an amended standard is -- oh, sorry. 

6 So the appropriate installed costs, electricity use, 

7 electricity prices, maintenance, and repair costs are 

8 assigned to all of the equipment and tracked through 

9 time, calculated, and discounted to the present. 

MR. BROOKMAN: Karim. 

11 MR. AMRANE: Karim Amrane, AHRI. Could you 

12 tell us how you come up with the distribution 

13 percentages? 

14 MR. SCOTT: Sure. 

MR. BROOKMAN: You're referring to percentage 

16 of sales on 39? 

17 MR. SCOTT: Percentage of sales by efficiency 

18 levels, sure. The procedure that was used is an 

19 economics-based one. It's in the National Energy 

Modeling System. It's also in the Canadian model. It 

21 assigns equipment -- well, first of all, we have 

22 information on installed costs and annual operating 

23 costs for the individual efficiency levels. 

24 The way the procedure works is that there are 

a series of market segments with different discount 

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1 rates associated with higher appetites for risk and 

2 lower appetites for risk. Most of the market has a 

3 relatively low appetite for risk, meaning that they 

4 have relatively high discount rates. In other words, 

they want a pretty fast payback. 

6 Okay. So, assigning the equipment, then, 

7 according to those segments, which are percentages of 

8 the marketplace, we then get an idea of what 

9 distribution each -- of efficiency levels each of those 

market segments prefers. That -- and the roll-up of 

11 all of that is what's reflected in these efficiency 

12 levels. 

13 MR. BROOKMAN: Harvey Sachs. 

14 MR. SACHS: I begin to think that Karim and I 

are sharing a perspective, and I'd like to ask a 

16 similar question. The upper table in that slide 

17 suggests that today, in a market which I had thought 

18 was highly first cost sensitive, 45 percent of the 

19 customers are choosing product at 11.3 or above. I 

just wonder if there's any empirical evidence that we 

21 have such a high fraction of sales at what are premium 

22 efficiency levels today. 

23 MR. SCOTT: We would actually like to see 

24 some empirical evidence against which to check these 

numbers. 

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1 MR. SACHS: Well, the one thing we do know, 

2 thanks to AHRI, is the shipment-weighted SEERs over the 

3 transitional period from SEER 10 to SEER 13. The 

4 shipment-weighted SEERs never got, if I recall the 

data, above 11.1 when base equipment was 10. That was 

6 a residential market, not a commercial market, but it 

7 was a market where there were large-scale incentives 

8 out there and other things that are largely lacking 

9 from this market. 

So that, my assumption would be that the 

11 default model would be a relatively small fraction at 

12 premium levels. And this matters because it will 

13 impact --

14 MR. SCOTT: Sure. 

MR. SACHS: -- the national energy savings. 

16 MR. SCOTT: Sure it will. 

17 MR. SACHS: I think it's indefensible to use 

18 this distribution which we can't link to anything in 

19 the real world. 

MR. BROOKMAN: Do you want to go to Ashley? 

21 Ashley. 

22 MS. ARMSTRONG: Can I follow up on that? 

23 This is Ashley from Navigant. I see two ways you can 

24 link it to real world. One is, you can look at the 

distribution of models and approximate that with the 

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1 number of models offered at the higher efficiency 

2 level, the percentage of models distributed at that 

3 level, and you can see that while it might not match 

4 exactly, it's fairly heavily weighted also towards the 

higher end. 

6 You can also match that with major 

7 manufacturers, which products they offer as far as the 

8 exact efficiency level and their market share, how they 

9 apply it. 

MR. SACHS: How do those two approaches 

11 differ? 

12 MS. ARMSTRONG: How do they differ? The 

13 first one is you would just approximate it by the 

14 number of models. So you would not know the actual 

shipments associated with each model, right? It could 

16 be -- that can be sometimes be --

17 MR. SACHS: I've been guilty of that approach 

18 myself. 

19 (Laughter.) 

MS. ARMSTRONG: You can also -- you would see 

21 a similar trend. You can also do it by knowing that 

22 certain manufacturers offer certain efficiency levels, 

23 and you can know their market share, and you would get 

24 a similar trend. 

MR. SACHS: But those two approaches, if I'm 

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1 hearing correctly -- this is Harvey Sachs again -- are 

2 functionally equivalent and I think need to be balanced 

3 against some known effects of trying to offer a full 

4 line, trying to offer some trophy models, a variety of 

other things. 

6 MS. ARMSTRONG: Of course. 

7 MR. SACHS: And it would seem to me that the 

8 default hypothesis might not be the distribution of 

9 models but where we do have some shipment-weighted 

averages, which would be residential splits. 

11 MS. ARMSTRONG: Right. 

12 MR. SACHS: I'm not saying that that's the 

13 right model, but it would seem to me to be the default 

14 as being the highest quality information we have. 

MS. ARMSTRONG: One thing that might be 

16 helpful for the Department as they review this is --

17 Karim, if you want to look and give us a shipment18 weighted average efficiency for the base case. 

19 MR. AMRANE: (Off mic.) 

MS. ARMSTRONG: Yeah. So I mean, it's just 

21 one of those things that if anyone had that type of 

22 information, that would be very helpful. 

23 MR. BROOKMAN: That was, that last exchange, 

24 between Ashley and Karim. Thank you, Karim and Ashley. 

MR. SACHS: So, to summarize --

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1 MR. BROOKMAN: So, Harvey again, yes. 

2 MR. SACHS: -- we're talking about a beauty 

3 contest and Ashley's proposing one set of judging rules 

4 and I'm suggesting another. But this is about beauty, 

it's not about data. Thank you. 

6 MR. BROOKMAN: I'm certain the Department, if 

7 there were any data available, would love to have it. 

8 MR. SACHS: The Department -- oh, well, I'm 

9 all --

(Laughter.) 

11 MR. BROOKMAN: Okay. So then, other 

12 comments, then, on the approach listed on Slide 39? 

13 Did you have anything to add at this point on this 

14 slide, Mike? 

MR. SCOTT: No. 

16 MR. BROOKMAN: Okay. 

17 MR. SCOTT: I'm moving on. 

18 MR. BROOKMAN: Further comments on this, the 

19 approach portrayed here on 39? 

MR. BENZ: Jim Benz from GE. 

21 MR. BROOKMAN: Yes. 

22 MR. BENZ: On what you would expect the 

23 impact to be, essentially what you propose -- what you 

24 calculated at the end of the day as a worst case 

scenario, you're going to have 100 percent. I would 

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1 suggest it would be significantly different than the 

2 worst case scenario. 

3 MR. SCOTT: And it's worst case because? 

4 MR. BENZ: It's worst case because all of 

your -- essentially, what you're saying is all of your 

6 lower-level performance units will shift into the 

7 lowest level category. 

8 MR. SCOTT: No, into the lowest of the 

9 remaining levels. 

MR. BENZ: I understand. 

11 MR. SCOTT: Yeah. Okay, okay. 

12 MR. BENZ: What I'm saying is --

13 MR. SCOTT: They would be higher still. 

14 MR. BENZ: -- my expectation would be that 

that 50 percent of the market might be skewed towards 

16 the lower end, but to suggest it will be 100 percent at 

17 the minimal efficiency levels I think is not realistic. 

18 My expectation would be it would be much more normally 

19 distributed than what you're representing. 

MR. BROOKMAN: Okay. Thank you. That's a 

21 useful comment. 

22 Okay. Other comments about this approach and 

23 the details? 

24 (No response.) 

MR. BROOKMAN: Okay. 

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1 MR. SCOTT: All right. Okay. Now a little 

2 bit about some of the key inputs. The discount rates 

3 that we use in the national impact analysis are given 

4 to us. They are OMB's Regulatory Analysis Circular A-4 

rates from 2003. They are 3 percent and 7 percent 

6 real. That means adjusted for inflation. 

7 The electricity prices and trends. We used, 

8 actually, a combination of the Energy Information 

9 Administration 2006 data on commercial prices across 

the country, because 2006 was the last year that we had 

11 full data, and Annual Energy Outlook 2007 forecasts 

12 looking forward. Of course, we're going to update all 

13 of that for the final rule. 

14 Finally, an observation about the rebound 

effect. That is, do operating savings in equipment, as 

16 they are alleged to do for some pieces of equipment, 

17 result in increasing equipment use and therefore reduce 

18 energy savings potential. We think that's not going to 

19 happen because the customer who is renting the 

hotel/motel room, and that's the vast majority of these 

21 folks who have this piece of equipment, don't pay the 

22 utility bill. The hotel does. 

23 So there's very, very indirect linkage at all 

24 between the customer's usage of the equipment and its 

efficiency. So we don't think we will see much of a 

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1 rebound effect, if any. 

2 So, DOE is inviting comments on the rebound 

3 effect for PTAC and PTHP. 

4 MR. BROOKMAN: I think we had one comment 

already today about rebound. Other comments about the 

6 rebound effect potentially? Scott. 

7 MR. TOUKATLY: Scott Toukatly. I would just 

8 reiterate that we don't believe there would be a 

9 rebound effect either in that case. 

MR. BROOKMAN: Okay. Thank you. 

11 MR. SCOTT: Okay. And then there are three 

12 other general issues on which DOE is seeking comments, 

13 and they're on the screen there. The first is, can we 

14 better characterize any increases of efficiency that 

would occur over the 30-year analysis period in the 

16 absence of the rule. In other words, what's the market 

17 look like. 

18 Also, the -- are we correctly characterizing 

19 forecast base case distribution of efficiencies after 

the refrigerant phase-out and how the standards would 

21 impact the distribution of efficiencies. So that was 

22 something that Harvey has already alluded to, and other 

23 people may have other observations on it. 

24 And then, finally, whether the amended energy 

conservation standards will result in -- or, do any of 

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1 you think that those standards would result in PTAC and 

2 PTHP customers shifting to other, less efficient 

3 equipment types from equipment that is more efficient. 

4 Comments? 

MR. BROOKMAN: Harvey Sachs. 

6 MR. SACHS: You've laid out an important 

7 option. I haven't run into resistance cooling 

8 equipment, and I'm trying to think of the equipment 

9 classes that come to mind with respect to Question 8 

that would be less efficient than the space-constrained 

11 PTACs and PTHPs in ways that would affect the analysis. 

12 That's the question. 

13 I can think of some alternatives and 

14 substitutions that might be cost effective even though 

at higher cost for higher efficiency, but I'm thinking 

16 of equipment classes that would be lower efficiency. 

17 MR. SCOTT: I'm going to go out here on a 

18 limb a little bit. I believe that the way this came up 

19 -- the context of this question was that there is a 

somewhat higher efficiency standard in these mixed TSL 

21 levels that apply to PTHPs as compared with PTACs. So 

22 the question is, would we see shifting from that more -

23 - that higher efficiency equipment into something that 

24 is lower efficiency. I believe that's the context in 

which this arose. 

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1 MR. SACHS: So the internal shift from PTHP 

2 to PTAC. Thank you. 

3 MR. BENZ: Jim Benz from GE. I think you 

4 actually covered that in another area. To answer your 

question, there would be an opportunity, although I do 

6 not think it would be experienced, for PTAC customers 

7 to switch to through-the-wall air conditioners that are 

8 significantly less efficient than PTACs and at a lower 

9 cost and heat-cool built-in air conditioners, which 

typically do not offer heat pumps, that would be 

11 significantly less efficient and at a lower cost. 

12 So there are products out there that would 

13 fall under that definition. However, I think the 

14 probability of that happening is remote. 

MR. BROOKMAN: Okay. Thank you. Thanks, 

16 Jim. Yes. Scott and then back to Tom. 

17 MR. TOUKATLY: Yeah. This is Scott Toukatly. 

18 I would agree with Jim that I definitely think that 

19 there is a potential to go to products like throughthe-wall, I mean, window air conditioners. Although 

21 speaking with Navigant at lunch, apparently they're 

22 going to go through a rulemaking right now. So maybe 

23 they won't stay less efficient or at their efficiency 

24 levels for long. 

But I think this also ties to the other 

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1 question of -- and I don't know if you want to get into 

2 it now -- this whole issue of PTHPs being set at a 

3 higher level than PTACs. That could be one internal 

4 way of going to a lower efficient product right there 

which would have the tendency to backfire. I mean, if 

6 people are forced by cost or by lack of manufacturers 

7 offering PTHPs and are forced to go to PTACs with 

8 electric heat as their only form of providing heat, 

9 it's effectively doing the same thing. It's forcing 

people into a less efficient product. 

11 So my personal opinion is that setting a much 

12 higher level for PTHPs is -- I believe it'll backfire. 

13 MR. BROOKMAN: Tom. 

14 MR. GUFFEY: Basically, I agree with that 

statement. The industry today on the nonstandard --

16 excuse me, on the standard size is somewhere around 55 

17 percent electric heat versus 45 percent heat pump 

18 today. That's with virtually the same efficiencies. 

19 If you raise the bar on heat pumps, yes, there is a 

potential for people because of first cost, 

21 particularly people who build and turn properties, to 

22 put electric heat in and not put heat pumps in. So, 

23 yes, that could definitely backfire. 

24 MR. BROOKMAN: Okay. Thank you. Other 

comments? Yes, please. David. 

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1 MR. MARKUSZ: David Markusz. I think that 

2 there's going to be a certain value segment or a 

3 segment of the motel market which is small end user and 

4 single owner, mom and pop type thing, or something like 

that where there's a good chance that they may go to 

6 something that's lower efficiency like a window unit or 

7 a solid side, based on some of the things that I've 

8 seen done through the years, including seeing a 

9 standard size sleeve blocked off to put a solid side 

in. 

11 So I think it's something that I've seen 

12 before, and I wouldn't put it past that smaller end 

13 where they don't necessarily have a big capital budget 

14 to renovate. It's the mother and father trying to 

support the family with a row of 10 rooms and the only 

16 thing they can do is get this. Well, it's much easier 

17 to go to Wal-Mart or Lowe's or Home Depot and pick up 

18 something there than it is going to be to try to 

19 replace something that's now much more expensive, or 

more expensive. 

21 MR. BROOKMAN: Do you know how much of the 

22 market that would represent? 

23 MR. MARKUSZ: I don't. 

24 MR. BROOKMAN: Pretty slim? 

MR. MARKUSZ: I would say it's smaller, yes, 

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1 but there is the possibility there, I think. 

2 MR. BROOKMAN: Karim. 

3 MR. AMRANE: Karim Amrane, AHRI. In addition 

4 to product switching, I think a separate issue might 

happen as well. People are going to keep their old 

6 equipment longer. That's a real possibility. As an 

7 example, let me tell you that the central air 

8 conditioning rulemaking that became effective in 2006, 

9 we've been seeing since then a decline in shipments of 

about around 25 percent. But what we've been seeing at 

11 the same time is an increase in parts. 

12 So it's happening. I mean, the 13 SEER 

13 standard had the effect of people keeping their old 

14 units and fixing them. So that's a reality. 

MR. BROOKMAN: Thank you. 

16 MR. SCOTT: Can I ask a follow-up question? 

17 MR. BROOKMAN: Please do. 

18 MR. SCOTT: From the stand up here. Is there 

19 any kind of an outer limit on that, on simply replacing 

parts? I mean, you can obviously extend the time over 

21 which that piece of equipment would run if you kept 

22 replacing parts, but is there an outer limit of any 

23 kind? 

24 MR. BENZ: Jim Benz from GE. I think the 

dynamic in packaged terminal equipment is significantly 

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1 different from central air conditioning in that the 

2 acquisition cost is 20 percent of what a central air 

3 conditioner would be. The cost of servicing an old 

4 unit is significant and, with the elimination of R22, 

will become much more significant. 

6 So I think the possibility of people making a 

7 decision to hold onto product -- the people that will 

8 hold onto the product will hold onto the product 

9 regardless. They just are people that will do that. 

Summarily, I think to the extent -- and I 

11 would consider it a minute part of the market. To the 

12 extent that people on a 10-room property that are 

13 throwing a window air conditioner into a sleeve, the 

14 rule or the proposed standard isn't going to change the 

degree that that happens. That happens today. It will 

16 happen tomorrow. Those people will choose to do that, 

17 as foolish as it may be. 

18 I do think there is a dynamic with respect to 

19 mix between PTACs and heat pumps. I do think that the 

cost benefit analysis for a property, and our customer 

21 base is, from our experience, very concerned about 

22 operating costs and efficiencies, and they tend to be 

23 very astute and good businesspeople. The cost benefit 

24 analysis on the heat pump is still extremely compelling 

regardless of whether -- I mean, the cost differential 

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1 today based on the research is $50. If that premium 

2 goes up for that property, in most cases their payback 

3 will be less than a year, almost in all cases will be 

4 less than a year. In many cases it will be three or 

four months. 

6 So, an additional premium on the heat pump 

7 for the higher efficiency does not fundamentally change 

8 the cost benefit analysis for that property. 

9 MR. BROOKMAN: Thank you. Thanks a lot. 

Karim. 

11 MR. AMRANE: If that's the case, then why is 

12 it that the market share is, what, 45 or 55? Why is it 

13 that the market has not switched to heat pumps 

14 entirely? If the payback is that good, I mean, why is 

it that we still have 45 percent of the market on 

16 PTACs? 

17 MR. BENZ: Jim Benz again. I mean, it's a 

18 good question. It's a function of people's awareness. 

19 MR. LEWIS: Ron Lewis, DOE. There was an 

article in the Wall Street Journal this week about one 

21 of the business inertias that's been underway in recent 

22 years of the separation of the building owner from the 

23 building operator in commercial hotels, especially 

24 large hotels. As a business strategy, they have 

separated those two functions much more dramatically. 

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1 The number of hotels that the chains own and operate 

2 has gone way down. 

3 That separation between owner -- that's first 

4 cost -- versus operator with a different business model 

and cash flow and profit model, what kind of impact is 

6 that going to have? They were representing it's, in 

7 the last couple years, gone absolutely crazy. It's 

8 reversed and the impacts on commercial building rates 

9 and other things all come into play. If that's the 

trend and that's where everything has gone, making that 

11 decision point separating owner and operator on large 

12 properties that are buying a lot of these things, will 

13 that have an influence on this? 

14 MR. SACHS: We're supposed to ask you the 

questions. 

16 (Laughter.) 

17 MR. LEWIS: I'm asking for input. 

18 MR. BROOKMAN: Scott. 

19 MR. TOUKATLY: Scott Toukatly. I'm probably 

not responding to that question. I more want to make a 

21 statement to the earlier comments. I haven't spent a 

22 lot of time going through the cost benefit analysis, 

23 but I just wanted to make the comment that that in 

24 itself doesn't justify setting a higher PTHP standard. 

I think we can all agree that if somebody 

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1 puts in a PTHP and operates it in the mechanical 

2 heating mode, they're going to save money over electric 

3 heat. That in itself isn't a justification for setting 

4 a higher standard. 

I haven't seen any compelling evidence that 

6 could tell me that a PTHP can obtain such a 

7 significantly higher efficiency than a PTAC. As a 

8 matter of fact, it's typically been the other way 

9 around. 

MR. LEWIS: That is good. Anybody that's got 

11 analysis or data that supports anything is really 

12 helpful. 

13 MR. BROOKMAN: Yeah. Thank you, Ron. So, 

14 Ron with another question on the table, should anybody 

wish to bite on that one. 

16 MR. BENZ: Jim Benz with GE. The only input 

17 I could give; we haven't seen a significant difference 

18 yet in that the companies that are managing the 

19 properties at least currently are still intimately 

involved in what goes in those properties. So the 

21 owners of the properties do not have an active interest 

22 in what goes into the properties as in other economic 

23 systems. Those management people are still making most 

24 of those decisions. 

MR. BROOKMAN: Okay. Final comments? You 

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1 can see three different questions there on Slide 41 in 

2 your packet. Additional and perhaps final comments on 

3 those? 

4 (No response.) 

MR. BROOKMAN: Okay. 

6 MR. SCOTT: One last thing here. We did do 

7 an LCC subgroup analysis. We couldn't quite figure out 

8 where to stick it, so here's where we stuck it. I have 

9 only one slide on it. 

The purpose was to evaluate the economic 

11 impacts of standards on consumer subgroups, emphasis 

12 "consumer" subgroups, who may be disproportionately 

13 impacted compared to the general user population. The 

14 manufacturing subgroups are handled in the 

manufacturing impact analysis that we'll be talking 

16 about in a few moments. 

17 The method we used was to identify -- we 

18 identified small businesses as a PTAC and PTHP customer 

19 subgroup that could be disproportionately affected and 

examined the impact of the proposed standards on that 

21 group. So what we did was we did the LCC analysis just 

22 for the small businessmen, basically. 

23 We found that the LCC savings and simple 

24 payback were -- we calculated all of those and found 

out they just weren't dramatically different than for 

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1 the larger group of people. 

2 All that analysis is available in I believe 

3 it's Chapter 12 of the TSD. 

4 MR. BROOKMAN: So then, comments on the LCC 

subgroup analysis, should there be any? 

6 (No response.) 

7 MR. SCOTT: Hearing none, I think I'm done. 

8 I'll pass this over to Ashley. 

9 MR. AMRANE: Yes, I -- sorry. 

MR. BROOKMAN: Yes. 

11 MR. AMRANE: I just have a question. 

12 MR. BROOKMAN: Karim. 

13 MR. AMRANE: Karim Amrane with AHRI. Are we 

14 going to be talking about how DOE ended up picking 

those levels based on LCC and other things later on, or 

16 is it time to talk about it? 

17 MR. BROOKMAN: I'm not sure where that's on 

18 the agenda. Get near the microphone, please. 

19 MR. LEWIS: I guess we just talked about LCC, 

so it would be an appropriate place, right? 

21 MS. ARMSTRONG: Sure. I'm getting ready to 

22 talk about the trial standard levels as far as how we 

23 grouped efficiency levels across equipment classes. 

24 That might segue back into it. That way you can see 

the different models that DOE considered, at least from 

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1 an analysis perspective. 

2 MR. BROOKMAN: Thanks for raising it. Yeah, 

3 sure. Tom, please. 

4 MR. GUFFEY: Going out on a little bit of a 

limb here, Tom Guffey, Goodman. In general, to get the 

6 higher efficiencies, we're going to smaller, more 

7 efficient compressors, putting more coil in the unit, 

8 which we believe is going to change the sensible latent 

9 ratio on the product. Was there an impact analysis 

done on moisture removal in the motel rooms as how that 

11 impacts not only the air conditioner and the run time 

12 but also the FF & E package, added wear and tear, and 

13 the four-letter word, mold? 

14 MR. BROOKMAN: Can you comment on that, 

Ashley? 

16 MS. ARMSTRONG: Bing, do you want to answer 

17 that? Since you guys did the energy use analysis? I 

18 think the answer is no, but I will let her comment. 

19 MR. BROOKMAN: I see Bing. Yes, please. 

Bing. 

21 MS. LIU: The answer is no. We actually, 

22 when we do the whole building energy analysis, we're 

23 looking at all the different equipment classes and for 

24 applications survey space heating and cooling in the 

hotel buildings. But we do look at changing efficiency 

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1 levels for the same equipment, changing the efficiency 

2 levels at the same building types. 

3 What you're looking at, make sure the same 

4 building maintains the same level of their temperature 

and humidity ratio. But the model itself and the 

6 intent of the whole building analysis is not to address 

7 the mold issue. We fully recognize that's -- life as a 

8 designer, we know the issues. But the purpose for this 

9 analysis is really to try to estimate the energy-saving 

potential through the higher efficiency equipment. 

11 MR. BROOKMAN: So if I understand you, you 

12 hold the moisture level constant. 

13 MS. LIU: We change the efficiency levels. 

14 We double check what's in the room, each of the rooms 

in the model, make sure it's within the ASHRAE 

16 definition of the comfort levels, yeah. 

17 MR. BROOKMAN: Yeah. Right. Karim. 

18 MR. AMRANE: Karim Amrane, AHRI. Let me 

19 follow up on this. I don't believe that your 

simulation model accounts for the fact that the heat 

21 exchangers are going to be different, that the sensible 

22 heat ratio of the equipment itself might be different, 

23 and that's what the question was all about. I mean, it 

24 might change that, which might end up having more 

moisture in the room. 

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1 You're assuming basically that whatever --

2 when you increase the efficiency the equipment will 

3 still perform as before in terms of sensible heat 

4 ratio. 

MS. LIU: Yeah. Bing Liu, PNNL again. 

6 Karim, you're right. In the model we assume the 

7 equipment has the same performance curves. So if you 

8 have different curves caused by the higher efficiency 

9 equipment, we definitely can put that -- can take your 

input and further modify and improve the model when we 

11 proceed. 

12 MR. BROOKMAN: Tom, thanks for the question. 

13 Harvey Sachs, and then I'm coming back to you, Ted. 

14 MR. KINGSBURY: Just on the same subject, and 

maybe it's --

16 MR. BROOKMAN: Okay. Go ahead. Yeah. 

17 MR. KINGSBURY: -- obvious. But, if that's 

18 the case, then basically it's going to run longer also 

19 to remove that moisture. 

MR. BROOKMAN: Okay. Thank you. Harvey. 

21 MR. SACHS: Harvey Sachs, ACEEE. I hope I'm 

22 not being too bold in translating what Ted and Tom have 

23 said as being a call for -- look again at the rating 

24 method to assure that is fair to the importance of --

it's not at all clear. I haven't reviewed this with 

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1 the care that I expect Karim has, but it's not at all 

2 clear that we're giving adequate credit to -- removal 

3 that's an important design constraint in some regions 

4 and some applications. 

MR. BROOKMAN: Okay. Thank you. 

6 MR. LEWIS: Ron Lewis, DOE. If there are any 

7 recommendations of how to go about that, if there are 

8 any techniques that you've seen, if there are any 

9 bodies of knowledge that we can tap into --

MR. BROOKMAN: Ratios, proportions, anything. 

11 MR. LEWIS: -- it would be helpful. Opinions 

12 and concerns are of interest to us but not as helpful 

13 as having something that gives us guidance and helps us 

14 to do it correctly. 

It's one thing to notice that maybe we've got 

16 room for improvement. It's something else to try to 

17 get it correct. All the help we can get from people 

18 who've got that concern to look for the solution, we're 

19 open for input. 

MR. SACHS: We will send you -- Harvey Sachs 

21 again. We will send you a copy of the recent paper on 

22 splits that addressed this in the context of regional 

23 rating methods. Again, we're not asking for regional 

24 rating methods here, but I am suggesting that our 

grandfathers' quarter-century-old rating method may not 

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1 meet our needs with higher efficiency equipment. 

2 MR. BROOKMAN: Scott, please. 

3 MR. TOUKATLY: Scott Toukatly. Can we get an 

4 extension on our deadline? 

(Laughter.) 

6 MR. TOUKATLY: May 31st may not be enough to 

7 give all the information that you need. 

8 MR. LEWIS: We'll give you the same extension 

9 we are getting from the court that's overseeing our 

work, which is zero. 

11 (Laughter.) 

12 MR. LEWIS: And that's not because we want to 

13 operate that way, but we are under such tight 

14 schedules. 

MR. TOUKATLY: You took a week away. It was 

16 June 6th. 

17 MR. BROOKMAN: You all feel pressed, I 

18 promise you. 

19 MR. AMRANE: Karim Amrane speaking. 

MR. BROOKMAN: Okay. Karim, yes. 

21 MR. AMRANE: Actually, talking about the 

22 date, the Federal Register says June 6th, not May 31st. 

23 So we need to make sure --

24 MR. LEWIS: It does say June 6th? 

MS. ARMSTRONG: Yeah. 

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1 MR. AMRANE: So let's all agree on the date 

2 because --

3 MS. ARMSTRONG: June 6th was the date. 

4 MR. LEWIS: Okay. That's what's in the 

Federal Register? 

6 MS. ARMSTRONG: Yeah. 

7 MR. LEWIS: Okay. 

8 MR. BROOKMAN: Which means you're bound, 

9 right? Yeah. 

MS. ARMSTRONG: -- being the Federal Register 

11 date. 

12 MR. BROOKMAN: So, wasn't that generous of 

13 him? 

14 (Laughter.) 

MR. BROOKMAN: Karim, thank you. Generosity 

16 abounds here at DOE. 

17 MR. LEWIS: You can send your thank-you notes 

18 to the Federal Register. 

19 (Laughter.) 

MR. BROOKMAN: I suggest you send them 

21 straight to the Secretary or the court. Okay. 

22 

23 

24 

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1 Trial Standard Level Development and Manufacturing 

2 Impact Analysis 

3 Ashley Armstrong 

4 (PowerPoint presentation.) 

MS. ARMSTRONG: All right. Next, trial 

6 standard levels. Okay. So, the purpose of selecting 

7 trial standard levels and developing a list of possible 

8 amended energy conservation standards from which DOE 

9 can weigh the benefits and the burdens and finally 

select a proposed standard level. 

11 Each trial standard level consists of a set 

12 of potential minimum efficiency levels across all 

13 equipment classes covered by the rulemaking. 

14 So, here is a summary table of the trial 

standard levels DOE looked at for this PTAC and PTHP 

16 rulemaking. The baseline level was chosen to be the 

17 efficiency levels within ASHRAE Standard 90.1 (1999) 

18 for each corresponding equipment class. 

19 TSL 1, 3, 5, and 6 are what we call matched 

pairs. In other words, the efficiency levels for the 

21 PTACs are the same as the efficiency levels for PTHPs. 

22 TSL 7 is the max tech. That's the max 

23 commercially available unit. 

24 And then TSL 2 and 4 are what we call mixed 

TSLs. They're combination efficiency levels. There 

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1 are different efficiency levels for PTACs and PTHPs. 

2 And that's that. So I'm guessing I should 

3 open the floor to comments on DOE's trial standard 

4 levels before I proceed with the manufacturing impact 

analysis summary. 

6 MR. BROOKMAN: Karim, does this --

7 MS. ARMSTRONG: Maybe, to answer your 

8 question from earlier, in the presentation there's not 

9 an exact description of how DOE weighed the benefits 

and the burdens for each TSL. That description is a 

11 multi-linked -- or, many pages in the Federal Register 

12 notice. You're more than welcome to comment on what's 

13 in the Federal Register notice at this time or at the 

14 end when we open it up for stakeholder comments. 

MR. BROOKMAN: Karim. 

16 MR. AMRANE: Karim Amrane. Maybe we can 

17 start a discussion and see how it goes. But I guess 

18 when I was looking into the life-cycle cost and the 

19 average -- the mean life-cycle cost savings, what I 

notice is that for PTACs that there is no positive 

21 life-cycle cost savings. I mean, it's basically a cost 

22 to the consumer. 

23 And if you look at the payback, it's over 11 

24 years for most -- for all of the TSL, which is greater 

than the lifetime of the equipment. 

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1 So again, it tells me that --

2 MR. SACHS: Forty-two years, right? Forty3 two years? 

4 MR. AMRANE: Well, 42 years, but the average 

is about 10 years, and that's what -- you know, of 

6 course there will be exceptions. 

7 But again, that tells me -- I mean, I'm not -

8 - I can't -- I don't understand how then DOE ended up 

9 saying, well, that's the right level, we should be 

moving with that. It tells me that whoever is going to 

11 be buying this equipment will not be saving anything. 

12 At least according to what we have in the notice. 

13 So I just wanted to have some feedback as to 

14 how you guys went through the process and how you 

decided to say, well, this is the right thing to do. 

16 MR. SACHS: Ron, this is Harvey Sachs. I 

17 think you misinterpreted the duration of service life 

18 discussion. I think we had a consensus that for AHRI 

19 member companies it's 10 years or less depending on 

compressor type. And for AHRI non-member companies, 

21 it's 42 years. That's the empirical results I've been 

22 hearing. 

23 MR. BROOKMAN: Ron Lewis. 

24 (Laughter.) 

MR. LEWIS: I'm not sure how the court 

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1 reporter will ever indicate how to present that. 

2 MR. BROOKMAN: Let's make sure we identify 

3 it. That was Harvey Sachs with that earlier comment. 

4 MR. LEWIS: I guess all we can do is note 

that in the transcript there are opinions and there are 

6 facts and there are a lot of words. 

7 (Laughter.) 

8 MR. LEWIS: Anyways, it's good to keep up 

9 this tradition, though. 

There are some reasonable questions being 

11 asked, and that's part of this process, is what's being 

12 presented to you under the direction of DOE and the 

13 senior management in looking at analyses of 

14 technologies that are available. In our mission to 

save energy, we're laying out there what it looks like 

16 to us right now. 

17 And your question is a good question, and I 

18 think that part of the purpose of today and the comment 

19 period is to see your response to what we've put out 

there. 

21 So one of the things that has been displayed 

22 here, and I look forward to on every one of these, is a 

23 different perspective from many different parties and 

24 getting into the discussions of what's the substance 

behind it. That's our job right now, is to flesh all 

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1 of that out. 

2 We have got a number of factors that we have 

3 to balance and consider, and we welcome comments and 

4 the things that you just said. Make sure and put them 

in your written comments as well. We're not ignoring 

6 them, but what we're putting out for you to look at as 

7 the proposed levels. 

8 MR. BROOKMAN: Karim. 

9 MR. AMRANE: Karim again. And that's fine. 

I was just curious because I've been involved in 

11 rulemaking for, I don't know, maybe 10 years. This is 

12 the first time I've come across analyses that tell me 

13 that there is no payback, there is nothing but DOE 

14 wanting to hold with a standard that apparently does 

not make sense. So that's why. I mean, it's just a 

16 question. I was wondering whether there was a change 

17 in directions or we were working under different 

18 assumptions. I don't know. But it's news to me. This 

19 is the first time. I'm surprised. 

MR. BROOKMAN: Joe Mattingly. 

21 MR. MATTINGLY: Joe Mattingly from AHRI. 

22 Yeah, just be honest. I mean, if you have a positive 

23 national net present value savings or something that is 

24 not reflected just in the cost payback to consumers, 

then say so. I mean, we just want to know what the 

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1 rationale is. 

2 MR. BROOKMAN: Mike Scott, please. 

3 MR. SCOTT: Maybe I can help a little bit. 

4 We've had several comments on that kind of spaghetti 

figure that I put up earlier. 

6 MR. BROOKMAN: Yeah. 

7 MR. SCOTT: Those are efficiency levels, so 

8 they're not TSL levels. What you have to do is map 

9 back from the TSL levels to see what efficiency levels 

on those curves are actually in play. And for PTACs, 

11 it's Level 1, basically. 

12 MS. ARMSTRONG: Right. 

13 MR. SCOTT: So your observation about the 

14 declining -- or, the negative savings on the higher 

efficiency levels is actually not what's being 

16 recommended. 

17 MR. LEWIS: Do you have anything in the TSD 

18 or a chart that we can show or point them to that shows 

19 --

MR. SCOTT: Yeah. There's actually a whole 

21 chapter on the mapping, Chapter 9. 

22 MR. BROOKMAN: I notice that Ashley has got 

23 in her hands the TSD. So maybe she's got something. 

24 MR. AMRANE: This is Karim with AHRI. I'm 

referring again with Table 5-point-whatever, 5.12 on 

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1 the Federal Register. It has all the TSL levels. It 

2 shows, at least for PTACs, that all the life-cycle 

3 costs are negative and paybacks is above 11 years. So 

4 I --

MS. ARMSTRONG: So I would refer -- if you 

6 really want to know --

7 MR. BROOKMAN: Hey, Ashley, hold that --

8 someone hold that microphone. 

9 MR. LEWIS: Here. We've got a handheld right 

here. 

11 MS. ARMSTRONG: I'm coming around. So I 

12 would point -- this is Table -- this is Ashley. I 

13 would point you to Table V.28 in the notice. It's 

14 basically a summary from -- of information from all the 

analyses from TSL 1 to 7. You can see the primary 

16 energy savings, you can see the net present value, you 

17 can see the LCC, you can see the industry impacts. 

18 It's basically a summary of results, kind of like a 

19 cross-section, a culmination of all the analyses that 

DOE has done. And then, you know, DOE can look at this 

21 table and weigh the benefits and the burdens. 

22 And then following that table is a complete 

23 discussion of how DOE weighed the benefits and the 

24 burdens by TSL. So we first considered TSL 7, and then 

they considered TSL 6. And it will walk you through 

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1 each of their thought processes in making their 

2 decision until they got to the proposed standard level. 

3 That's really the best place to -- and I 

4 would encourage you to read that and, you know, if you 

have comments on that, submit them in writing 

6 afterwards. 

7 You can see where it might be a negative LCC, 

8 it might be a positive NPV for the nation because of 

9 the distribution. Okay? Does that help? 

(Laughter.) 

11 MR. BROOKMAN: Thank you, Ashley. Thank you. 

12 So we parted when we were on Slide 45, which 

13 shows these trial standard levels. And Ashley provided 

14 a brief overview. Do you wish to say anything more 

about 45, Ashley? 

16 MS. ARMSTRONG: No. I think I'm ready for 

17 46. 

18 MR. BROOKMAN: Additional -- Scott. 

19 MR. TOUKATLY: Scott Toukatly. I just wanted 

to -- maybe I'm dense on this, but going back to that 

21 frame there, am I to understand, since TSL 4 was used 

22 for the rulemaking? 

23 MS. ARMSTRONG: You mean the proposed 

24 standard? 

MR. TOUKATLY: The proposed standard. 

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1 MS. ARMSTRONG: It is TSL 4. 

2 MR. TOUKATLY: So, any energy efficiency 

3 levels that are shown in 5, 6, or 7 were disregarded 

4 for the rulemaking? 

MS. ARMSTRONG: The TSL as a whole was -- by 

6 DOE. Now, for specific energy levels -- so if you look 

7 at the efficiency level for heat pumps in 5 and you 

8 look at the efficiency level for heat pumps in 4, 

9 they're the same, right? Because it's a mixed pair. 

So you can't say that the efficiency levels are 

11 disregarded. 

12 But the TSL as a whole and its, you know, 

13 different -- the results from all the analyses was 

14 rejected, 7, 6, and 5. And then DOE, you know, 

proposed TSL 4. 

16 MR. BROOKMAN: The combination of benefits 

17 and burdens caused the Department to select TSL 4. 

18 Propose. 

19 MS. ARMSTRONG: Yeah. 

MR. TOUKATLY: Scott Toukatly. However, from 

21 setting the efficiency levels that are in the NOPR, the 

22 -- I don't know how to word this. The -- it was taken 

23 into account what the maximum technology is in R22 

24 product out there today? So those numbers were taken 

into account in the notice? Okay. 

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1 MS. ARMSTRONG: 

2 MR. TOUKATLY: 

3 MS. ARMSTRONG: 

4 MR. TOUKATLY: 

6 MS. ARMSTRONG: 

7 commercial --

8 MR. TOUKATLY: 

You're asking were they? 

Yes. 

Correct. 

I'm asking they were for that 

TSL 7 is the max tech 

Right, right. So that comes 

9 back to my concern that I showed before. If those 

values, I don't believe, hold any significance, then 

11 that's a serious point. 

12 MS. ARMSTRONG: So if you believe that the 

13 max tech value would change -- the efficiency levels 

14 would change under R410A. Would it be more than -- you 

know, how do you get your comments about which 

16 efficiency level you think you could not obtain with 

17 R410A. 

18 MR. BROOKMAN: Okay. Ron Lewis. 

19 MR. LEWIS: One thing that you may not be 

aware of is, along with the seven factors that were 

21 shown on Slide 6 that we have to consider in analysis, 

22 we're also directed to start at the highest, at the max 

23 tech, and start there and go down through the logic and 

24 stop at the highest level that can be supported. 

In going through that, we're required to 

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1 consider the max tech and look there. So it's not an 

2 option for us to do that. 

3 To your comment of concern about whether the 

4 max tech is valid or not, whether it exists, if we've 

got a misunderstanding from data that we've looked at 

6 from whether it's the directory or other things, then 

7 please do correct us if there's an error there. But we 

8 do not have an option to exclude considering those. 

9 MR. BROOKMAN: Let's let Scott follow on, 

Karim. Go ahead. 

11 MR. TOUKATLY: This is Scott Toukatly. I was 

12 just going to say that, again, probably in the short 

13 period of time we have that's going to be a difficult 

14 thing to do. You know, other than pulling set 

equipment and testing it and having it reconfirmed, 

16 that's a difficult thing to do. 

17 So other than going back and making sure that 

18 that data didn't correctly come out of the ARI 

19 Directory, I don't know what else we can do in this 

short period of time other than to seriously question 

21 that data being good. 

22 MR. BROOKMAN: Karim. 

23 MR. AMRANE: Karim Amrane with AHRI. I guess 

24 I would like to go further than that. Whatever is in 

the directory or whatever is available to DOE is not 

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1 based on 410A. So this max tech is fictitious as far 

2 as 410A. There is not such a product that meets the 

3 level with 410A today. 

4 So we are, as I said before, and I would like 

to repeat myself again, I think we are putting a number 

6 here. We're saying we can achieve that number, but we 

7 don't know for a fact if we can. 

8 So that's why I'm saying this rule in 

9 particular is very different from other rules because 

we are in the middle of a phase-out of R22. There are 

11 no products today with 410A. Maybe there's one unit. 

12 I don't know; I've heard that this morning. But we 

13 don't know what it is and what level it is at. 

14 But there is nothing out there today. So to 

say that we can reach that level, it's a max tech, it 

16 might be true for R22 but it's not true for 410A. So 

17 that's why this rule is very different. That's why I 

18 would caution DOE, when you make a determination to 

19 say, well, there are products out there. We are sure 

that you're going to be able to reach that level. 

21 Because I don't think that we know today. 

22 As Francine mentioned this morning, there is 

23 no rollback. Once you establish the standard, 

24 manufacturers will have to meet it. There's no way we 

can come back two years later and say, well, we 

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1 couldn't make it. What are we going to do? There is 

2 nothing else. 

3 That's why I'm saying that this is something 

4 that, as an industry, we feel very uncomfortable with. 

That's why we've suggested another way to go through 

6 this process by adopting ASHRAE now and maybe looking 

7 at it later on. Maybe have a two-step efficiency 

8 standard. But that's my comment, and I hope that DOE 

9 will take this into consideration. 

MR. BROOKMAN: Thank you. Thank you. Harvey 

11 Sachs. 

12 MR. SACHS: I have a question, really, for 

13 Scott and an observation I'd like to make. Scott --

14 MR. BROOKMAN: Mike Scott. 

MR. SACHS: I'm sorry. To this Scott. 

16 MR. BROOKMAN: Okay. 

17 MR. SACHS: I've forgotten your last name. 

18 MR. TOUKATLY: Toukatly. 

19 MR. SACHS: Toukatly. My sense from your 

comments today is that the particular concerns are that 

21 for the nonstandard size category in the largest 

22 capacity classes the proposed levels are too stringent, 

23 that you're looking for relief in that particular set 

24 of -- principally, that particular set of 

circumstances. 

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1 MR. TOUKATLY: Based on what I'm seeing 

2 today, yes. I think the higher capacities are not 

3 capable. I'm concerned about the lower capacities, but 

4 certainly as you go up in capacity it appears that the 

efficiency levels fall off at a higher percentage. 

6 MR. SACHS: That sharpening I think is very 

7 helpful to me, maybe to DOE as well. 

8 MR. BROOKMAN: Ron Lewis. 

9 MR. LEWIS: With that being the case, on the 

nonstandard sizes we only analyzed the one size, the 

11 11,000 Btu. Is there data -- are there size points 

12 where there's enough data to analyze this at multiple 

13 points to see that trend or that concern? 

14 MR. TOUKATLY: Scott Toukatly. For 

nonstandard specifically? 

16 MR. LEWIS: Yes. 

17 MR. TOUKATLY: I can do my best to share any 

18 calculations that we have and any actual test data we 

19 have to back up what I'm saying. So I mean, that is 

information that I can certainly make available. 

21 MR. LEWIS: Thank you. 

22 MR. SACHS: Again, from our perspective --

23 this is Harvey Sachs -- the 12,000 and above 

24 nonstandard sleeve is a very small part of national 

energy savings at risk. It's a very tightly 

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1 constrained product. 

2 While we're on this question of --

3 MR. BROOKMAN: May I hold you for just a 

4 moment? Mary Ann was going to follow onto Scott's 

comment. 

6 MR. SACHS: I'm sorry. 

7 MS. STOJKOVSKI: Yes, Mary Ann from McQuay. 

8 I was just going to say that we will try and do the 

9 same for the nonstandard from McQuay's perspective. 

MR. BROOKMAN: Thank you. Thank you. 

11 Harvey, you're next. 

12 MR. SACHS: I believe that we're really in 

13 the midst of LCC now. If that's the case, Doug, I'm 

14 concerned about Figure 8.4.1 in the NOPR -- I'm sorry, 

in the TSD, which is a plot of life-cycle cost against 

16 efficiency level with trial standards apparently being 

17 surrogates for efficiency level. 

18 The point I want to make is that the total 

19 variation in life-cycle cost from Trial Standard 0 

through 5 is $12 on a life-cycle cost of $2,300. It is 

21 slightly less than one-half of 1 percent. 

22 From where I sit on the stratospheric level 

23 as far as a scientist type rather than an accountant 

24 type, I can't tell the difference between $2,330 and 

$2,341 over a 20-year life-cycle cost or even a 10-year 

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1 life-cycle cost. 

2 I think the most important thing about this 

3 figure is that within any reasonable reach of the 

4 concept of reliability of our analysis these numbers 

are equivalent. They cannot be distinguished from each 

6 other. Consequently, we'd fall back upon the burden of 

7 the law, which gives primacy to the maximum that's 

8 technically feasible and economically justified. And 

9 that should push us toward max tech rather than away 

from it, again with specific exceptions such as Scott 

11 and I have been discussing. 

12 I really want to press upon the Department 

13 our belief that I don't think I could make a business 

14 case in any of these firms based on a half percent 

difference in life-cycle cost. It's a trivial 

16 difference and a hurdle rate or any of the other 

17 indicators that might be used. This is not decision 

18 support quality. 

19 That's not a criticism of your analysis. 

It's saying that you've revealed that there is not a 

21 significant life-cycle cost difference. 

22 MR. BROOKMAN: Joe Mattingly. 

23 MR. MATTINGLY: Well, when you talk about all 

24 the economics, like I say, if you're not going to pay -

- if life-cycle cost analysis is not going to drive the 

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1 issue, then something else must be. I mean, if you 

2 talk about total economic burdens, I do notice in the 

3 NOPR here that for Trial Standard Level 4 it talks 

4 about a significant reduction in industry net present 

value. That's part of the economics. There's burden 

6 right there. 

7 So, what is it that keeps us Trial Standard 

8 Level 4 for PTACs if it's a burden on industry, it 

9 means nothing to the consumer? What is it that 

commands us to go Trial Standard Level 4, then? I'm 

11 just looking for honesty. Is there some other factor? 

12 MR. BROOKMAN: Of course, it's still a 

13 proposal, so your comments are especially welcome. 

14 MR. MATTINGLY: The next thing we're going to 

see is the final rule, so --

16 (Laughter.) 

17 MR. MATTINGLY: -- if we can't discuss it 

18 now, there's not going to be another time for 

19 discussion. 

MR. BROOKMAN: Yes, Scott. 

21 MR. TOUKATLY: Scott Toukatly. I would only 

22 reiterate what Joe said specifically in that comment 

23 because it, for us specifically, according to the 

24 evaluation, hits nonstandards very hard. 

MR. BROOKMAN: Okay. Tom. 

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1 MR. GUFFEY: Tom Guffey, Goodman. I think we 

2 have similar issues, particularly on heat pumps and 

3 particularly on larger size, in standard equipment as 

4 well. We're basing a 2012 proposed standard on 

prototype compressors, R410A, that -- I'll just call 

6 them prototype compressors. Nobody is manufacturing 

7 the compressors at this point that I'm aware of that 

8 work in 60 hertz PTAC, 230 volt and 265 volt. We don't 

9 even have prototype 265 volt compressors to test. 

MR. BROOKMAN: Okay. Just one brief moment 

11 for consultation here. 

12 (Pause.) 

13 MR. BROOKMAN: I guess, yes, final comments 

14 on this issue, this Slide 45? 

MR. MARKUSZ: This is David Markusz. I have 

16 one question. 

17 MR. BROOKMAN: Yes. 

18 MR. MARKUSZ: Is there any opportunity to 

19 couple the efficiency levels with other DOE programs, 

like Energy Star or something like that, and to maybe 

21 set the efficiency level for the base models a little 

22 bit lower but assume the distribution is going to be 

23 skewed a little bit more towards higher efficiency? 

24 And, could the coupling of those programs help the 

discussion? No? 

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1 MR. BROOKMAN: Ron Lewis. 

2 MR. LEWIS: Separate entities. We're setting 

3 the floor where there's supposed to be a stretch. They 

4 complement each other, but they're distinctively 

different. Many times the Energy Star program has 

6 different criteria that couldn't be supported in a 

7 regulation at a minimum where it's the distinction 

8 between the lesser performing and the higher performing 

9 units. 

So we really -- this is a self-supporting 

11 kind of issue that -- because it will be a regulation, 

12 it has to stand on its own. The voluntary program, 

13 because people have the choice to include it or not 

14 include, the variation and variability there, we can't 

use that as part of the justification for regulation. 

16 MR. MARKUSZ: Okay. David Markusz again. 

17 The concern that I have is that there was some 

18 discussion that there was going to be Energy Star --

19 they were looking at a possible Energy Star program for 

PTACs. There's a lot of customers who are looking for 

21 that program as well for rebates and for other things. 

22 But if you look at the variation between the 

23 levels and the -- what is considered max tech, it's 

24 going to make it very difficult to make an Energy Star 

program. So it's going to kind of eliminate that 

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1 ability to get that voluntary increase. 

2 MR. LEWIS: That's good input. We appreciate 

3 that. 

4 MR. BROOKMAN: Okay. So then, moving on. 

MS. ARMSTRONG: Okay. The next thing I'm 

6 going to talk about is the manufacturer impact 

7 analysis. 

8 DOE performed the manufacturer impact 

9 analysis, or MIA, to estimate the financial impact of 

higher energy conservation standards on both 

11 manufacturers of standard size PTACs and PTHPs as well 

12 as manufacturers of nonstandard size PTACs and PTHPs. 

13 DOE developed a separate manufacturer impact analysis 

14 for standard size versus nonstandard size industries, 

recognizing that the manufacturers and the industry 

16 dynamics are very different. 

17 DOE also calculated the impact of such 

18 standards on employment and manufacturing capacity. 

19 The MIA has both quantitative and qualitative aspects. 

The quantitative part is an industry cash flow 

21 analysis. The qualitative part is going out and 

22 interviewing with manufacturers and trying to capture 

23 their concerns as far as different levels of amended 

24 energy conservation standards for the Department. 

So the manufacturer impact analysis consists 

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1 of three different phases. The first phase is the 

2 industry profile. This includes preparing an industry 

3 characterization, including market sales, volume, 

4 trends, pricing, employment levels, financial 

structures. Phase two is the industry cash flow 

6 analysis and developing the interview guides to send 

7 out to manufacturers. 

8 Phase three is the actual conducting of 

9 interviews, revising the cash flow analysis based on 

input we receive during our manufacturer interviews, 

11 and then assessing the direct employment, competition, 

12 and cumulative regulatory burden of the industry. 

13 Some of the data DOE received from the MIA 

14 interviews is covered under confidentiality agreements. 

It has been aggregated to an industry level to mask 

16 that data. 

17 So DOE discussed with manufacturers impacts 

18 on a variety of different issues in the industry as a 

19 whole at each TSL. DOE assessed the impacts of 

standard size and nonstandard size separately. 

21 The output of the manufacturer impact 

22 analysis is basically the industry net present value 

23 impact at each TSL and under different scenarios. 

24 While I haven't presented them on this slide, all the 

different scenarios and the results for each TSL for 

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1 nonstandard and standard size equipment manufacturers 

2 are presented in Chapter 13 of the TSD and an overview 

3 is given in the NOPR as well as the summarized impact 

4 of their capital and product conversion costs and 

estimates, and things that are really driving the cash 

6 flow analysis. 

7 In addition, some qualitative concerns were 

8 captured during the MIA. These include, obviously, the 

9 refrigerant phase-out, including compressor 

availability, increase in product cost, capital and 

11 conversion expenses that are associated with the 

12 refrigerant phase-out. 

13 The next would be the product conversion and 

14 capital costs associated with any major redesigns of 

equipment to meet the amended efficiency standards. 

16 Third is the timing of the phase-out as well 

17 as the timing of the impact of the energy conservation 

18 standards. Do you redesign once, do you redesign 

19 twice. That's a question manufacturers are going to 

have to consider. The definition of nonstandard 

21 equipment as far as any reductions in product lines or 

22 the availability of nonstandard products. 

23 And, the ability to recover increases in 

24 production costs from the consumer. In other words, 

any increases you see due to the refrigerant phase-out 

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1 or amended energy conservation standards, can you pass 

2 on that cost 100 percent to the consumer. I think DOE 

3 models two different scenarios in the notice. 

4 So the next thing that DOE looks at is the 

small business impacts. By small business impacts I 

6 mean a manufacturing facility and its parent company 

7 with 750 employees or less. That's defined by the 

8 Small Business Administration. For this industry, 

9 standard and nonstandard, we identified two small 

businesses. 

11 So at this time I'd like to open up the 

12 floor. DOE would like comments on the MIA results and 

13 the qualitative descriptions I just said, as well as 

14 DOE particularly invites comment on the unique impacts 

on the nonstandard size industry. Because their 

16 industry is different, it is a made-to-order industry, 

17 it is a smaller industry, DOE would like any 

18 considerations you may have. 

19 MR. BROOKMAN: Mary Ann. 

MS. STOJKOVSKI: Yes. This is Mary Ann from 

21 McQuay. Obviously, there is a difference between the 

22 nonstandard versus the standard equipment. I think I 

23 tried to, as best that I could, describe that before. 

24 There is a need out there. A lot of this equipment is 

older equipment, older designs. The equipment we 

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1 support, we're the original manufacturer of a lot of 

2 that equipment. 

3 So we do what we can and do maintain minimum 

4 standards today to the efficiencies, and we are 

reputable. We try to maintain that. We're not trying 

6 to get out there and sell space, our equipment does one 

7 thing when it actually does something else. 

8 At the same time, it's a market that's going 

9 to eventually go away. New construction is going to be 

standard equipment. Eventually, the shipments for that 

11 equipment will go down over time. 

12 There isn't going to be, other than trying to 

13 change refrigerants, there isn't going to be a large 

14 cash-in by our industry to try and redesign this 30-

year-old equipment to make it really efficient. It's 

16 just not going to happen. You could take that money 

17 and you could spend it elsewhere. 

18 If that happens, I can tell you that there 

19 will be manufacturers that will come into the market 

that will find the business and will put equipment out 

21 there that they will say -- they will claim certain 

22 efficiencies. It happens all day long, every day. It 

23 is nowhere near the efficiencies you think they are. 

24 We've done some testing on our own, independently, and 

I think a lot more of that is going to go on. 

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1 So I encourage you to think about the impact 

2 to our industry, the replacement industry, the 

3 nonstandard industry, and try and understand that we 

4 are somewhat limited to what we can do with that type 

of equipment. 

6 I'm a little bit nervous about what is going 

7 on and what will continue to go on even more later on 

8 should we decide not to continue or maybe other 

9 companies decide not to continue and not to support 

that market because there is no policing of some of the 

11 equipment that's out there. A lot of claims are made, 

12 and I don't believe a lot of that stuff that's out 

13 there is true. You might be getting worse than what 

14 you thought. 

MR. BROOKMAN: Scott. 

16 MR. TOUKATLY: Scott Toukatly. Yeah, I would 

17 just reiterate that the nonstandard business is 

18 probably a little bit more, I don't know, different. 

19 It's definitely different than the standard business as 

far as -- it just appears to me anyway that the 

21 standard PTAC manufacturers are all certainly well 

22 known, reputable manufacturers. There are many not 

23 well known manufacturers in the nonstandard business 

24 that shy away from regulatory issues. 

I even commented at lunch that just by not 

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1 having more of them here just tells me that it doesn't 

2 matter to them. Whatever happens here, it doesn't 

3 affect them in any way. They're just going to look the 

4 other way and do what they do. Like Mary Ann said, 

nobody regulates them other than, I guess, us. We 

6 regulate each other. 

7 I would answer the questions here that Ashley 

8 posed. Certainly, the second portion of this comment 

9 would be a resounding yes as far as the classification. 

If we don't get the ASHRAE addendum in the 

11 classification, it will definitely create a major gap 

12 in the product offering that would hurt us. But it 

13 would also hurt the consumer as far as eliminating a 

14 very wide range of products that we offer today being 

classified -- having to fall into the new construction 

16 category -- standard category. 

17 As far as the unique impacts portion, going 

18 back to the first, I'm not understanding and I guess I 

19 would just ask for just a brief summary -- I'm sure in 

it's in here somewhere -- of why the DOE has chosen to 

21 tax the nonstandard PTAC at such a much higher 

22 percentage proposals over ASHRAE 90.1 (1999) versus 

23 standard. Is there -- I guess, what is the reason for 

24 that in a quick summary? 

MS. ARMSTRONG: I don't think I could answer 

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1 that question wholesale as far as how -- why DOE made 

2 their decision. As far as why we call the nonstandard 

3 size equipment unique, there are multiple paragraphs 

4 kind of explaining just how your industry works, or at 

least from the risk factors I would be able to gather 

6 during the MIA, how your industry works differently. 

7 The amount of capital you guys have to play 

8 with is smaller. Product conversion costs. The number 

9 is skews that you offer. It's such a wide range. It's 

not a standardized product. It's not built by volume. 

11 It's a made-to-order kind of thing. People come and 

12 see you when they need this equipment. You guys tend 

13 to accommodate them and change things. 

14 So it's not like -- you have -- I don't know 

if I would say you have a lot more things to redesign, 

16 but you also don't -- from my perspective, you don't 

17 redesign things often. Like Mary Ann said earlier, 

18 things have been around and you continue making them 

19 for a really long time. 

I can't speak for you guys, but that was kind 

21 of the opinion that I was able to gather from doing the 

22 manufacturer impact analysis as far as the industry was 

23 concerned. 

24 MR. BROOKMAN: Mary Ann. 

MS. STOJKOVSKI: The other point that I'd 

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1 like to make as far as manufacturer impact; what's 

2 unique about us is we do build, engineer, support this 

3 equipment in a U.S.-based facility. Everything is 

4 built by our people in Auburn, New York by a union 

shop. So that's different. Most standard size 

6 equipment tends to be built overseas. So there is --

7 certainly, loss of that business for us would be an 

8 economic impact. 

9 MR. BROOKMAN: Ron Lewis. 

MR. LEWIS: When Scott, I think, asked the 

11 question as far as why the disproportionate impact, I'm 

12 trying to recall. It's been a long day and there's 

13 been a lot of good input here by everybody. But I 

14 think when we presented some data earlier today and 

said we got it from the directory, somebody was saying 

16 that it's not correct for the nonstandard size, that 

17 they thought that we had some incorrect -- is that --

18 is my remembrance correct? 

19 MR. TOUKATLY: Scott Toukatly. Sure, that 

would certainly be a -- I mean, if that's a major 

21 portion of why, for instance, they felt that ASHRAE was 

22 underestimating the ability of efficiencies for 

23 nonstandard PTACs, because of the data that's out 

24 there, that's major. 

MR. LEWIS: We have to start at the max tech 

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1 and look at what's out there as available technology. 

2 If that's wrong, what we've seen, if we've 

3 misinterpreted or the information is too vague, 

4 correction of that would be very helpful. It is one of 

the elements that goes into this. 

6 MR. BROOKMAN: Ron, I think Bing maybe has 

7 some information. 

8 MS. LIU: Bing Liu from PNNL. Scott, I'm 

9 trying to address your question why you say for 

nonstandard equipment we raised the bar higher compared 

11 to the standard size. Raise the bar higher, you were 

12 looking for the data, but let's go back to what's their 

13 baseline efficiency. 

14 For the baseline efficiency, what is said in 

here is 90.1 (1999) ASHRAE standard no matter for 

16 standard size or nonstandard size. But if you're 

17 looking at ASHRAE Standard 90.1 (1999) standards for 

18 standard-sized equipment, it has fairly higher 

19 efficiency levels compared to EPCA standards, which is 

the current federal minimum standards. 

21 But for the nonstandard equipment, ASHRAE 

22 didn't increase the bar when they published the '99 

23 standard. It still stayed at the EPCA level. 

24 So the starting point between these two 

equipment is really different. So we're raising higher 

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1 if you compare -- compared back to EPCA level, not 

2 compared to 90.1. The data is actually equivalent. I 

3 mean, relatively equivalent. Hopefully I can address 

4 your question. 

MR. TOUKATLY: That was helpful because 

6 that's kind of what I presumed and I hadn't heard 

7 anybody say it until just now, is that the feeling was 

8 that maybe the bar was too low before and now it's 

9 catch-up. I don't have to agree with it, but at least 

it's an answer. 

11 MR. AMRANE: Karim Amrane with AHRI. I guess 

12 as far as the impact on nonstandard size manufacturers, 

13 I think you have it in your analysis. When you say 

14 that almost, what, 44 percent of -- between 34 percent 

or 44 percent of -- the collective industry values of 

16 nonstandard size manufacturers will decrease by 34 

17 percent to 44 percent. So I think it's significant, 

18 meaning that the impact on those manufacturers will be 

19 much higher than others. 

I'm not sure how -- what those percentages 

21 translate into dollars. It's not there. But I'm 

22 pretty sure that it's high, too. 

23 MR. BROOKMAN: Okay. So, other comments on 

24 this section, particularly the manufacturer impact 

analysis? Harvey Sachs. 

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1 MR. SACHS: Harvey Sachs at ACEEE. It's 

2 getting to be late. That's partly my fault. I'd like 

3 to summarize where we are on nonstandard size 

4 equipment. 

First of all, the national energy savings at 

6 stake are very, very small. Secondly, the 

7 manufacturing jobs at risk are relatively small. 

8 Therefore, the value of stringency is relatively small, 

9 given the first considerations. 

What is important is that there be a leak11 proof barrier so that products nominally nonstandard 

12 size are not sold into the higher efficiency standard 

13 size market. 

14 Toward that end, I will admit that I'm 

uncomfortable with the cross-sectional area requirement 

16 in -- is it Appendix T? Addendum T. Thank you, Karim 

17 -- because that's essentially the same as 16-by-42. I 

18 would ask that the Department, perhaps working with the 

19 manufacturers, look at the distribution of nonstandard 

sleeve sizes and come up with some criterion that could 

21 be used as an effective selector. This might even be a 

22 size-dependent criterion. It might be 20 percent under 

23 the cross-sectional area of 670 square inches, 

24 equivalent to a 16-by-42. 

But let's try to proceed in a rational way so 

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1 that we prevent the outflow of this product class where 

2 it would really impact energy savings and not worry 

3 about the small losses associated with product class 

4 that, as Mary Ann has pointed out, is gradually going 

away. Fair enough? 

6 MR. BROOKMAN: Additional comments? Karim? 

7 MR. AMRANE: Again, I mean, I think we've 

8 done our homework. As I said, this product class has 

9 been in place for almost 10 years. I don't think it 

was abused. I think we believe that we have the right 

11 definition, but we are more than willing to entertain 

12 discussion on tightening up the definition if need be. 

13 MR. BROOKMAN: Thank you, thank you. So, 

14 Ashley, are you finished with this section? 

MS. ARMSTRONG: I am. I'm handing it off now 

16 to Bing, who's going to talk through the rest of the 

17 analyses. 

18 MR. BROOKMAN: Okay. Please, Bing. 

19 Utility Impact Analysis, Employment Impact Analysis, 

Environmental Assessment, and Regulatory Impact 

21 Analysis 

22 Bing Liu 

23 (PowerPoint presentation.) 

24 MS. LIU: I apologize. There will not be a 

break. Hopefully, we may have some break after this. 

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1 So just hang in with me here. Let me go through the 

2 remainder of the NOPR analyses. Let me start with the 

3 utility impact analysis. 

4 The primary purpose of the utility impact 

analysis is to investigate and to estimate the effect 

6 of the reduced energy sales and the peak load demand on 

7 utility industry due to the improved equipment 

8 efficiency. The approach that DOE used for this 

9 rulemaking is really to use the EIA's National Energy 

Modeling System, in short terms NEMS, to tailor for 

11 DOE's building technology programs. 

12 Output for this analysis include the change, 

13 you can see on the screen, in their electricity sales 

14 and price by region, in the relative mix of the 

electricity generation, and also in their -- out 

16 capacity and the generation by field types as a result 

17 from the different trial standard levels. 

18 The details of analysis and the results as 

19 part of this utility impact analysis are presented in 

the TSD, Chapter Number 14. Also, the summaries you 

21 can find in the NOPR analysis. 

22 The next part is the employment impact 

23 analysis. Employment impact is one of the factors that 

24 DOE considered in selecting their standards. The 

purpose of the employment impact analysis is to report 

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1 the net job change in the national economy as a 

2 consequence of amended energy conservation standards. 

3 Employment impact analysis includes direct employment 

4 impact and indirect employment impact. 

The direct employment impact is any change in 

6 the number of the employees for PTAC and the PTHP 

7 manufacturers which has been addressed in the 

8 manufacturing impact analysis. Indirect impacts are 

9 those changes of employment on the customer side in 

their large economy skills. So that's included in this 

11 part of the analysis. 

12 DOE used a tool called the Impact of Sector 

13 Energy Technology, in short named the ImSET model, to 

14 assess the indirect employment impact. What's coming 

from this tool is a change of the jobs of the 

16 employment and the industry output and the wage income 

17 in the broader skills of the economy in the United 

18 States as the result of the change of their 

19 expenditures and operations of basically running the 

PTACs and PTHPs for higher efficiency levels. 

21 Together their expenditures you put into the 

22 ImSET models. The input is coming from the result of 

23 the national energy saving spreadsheet tools. 

24 As I mentioned, the output for this whole 

analysis is the job change, either increase or 

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1 decrease, as a result of the amended energy 

2 conservation standards. Again, the result and the 

3 detailed methodologies you can find in the Federal 

4 Register notice and also the TSD chapter. This one is 

going to be Chapter Number 15. 

6 MR. BROOKMAN: Maybe we'll just pause right 

7 here for just a moment. Comments on employment impact 

8 analysis? 

9 MS. LIU: Sure. 

 (No response.) 

11 MR. BROOKMAN: Okay. 

12 MS. LIU: Okay. I will proceed. The next 

13 part is -- the next slide is showing the environment 

14 impact analysis. DOE conducted environmental 

assessments to report environmental impact also as a 

16 consequence of these amended energy conservation 

17 standards, including the change in power plant 

18 emissions. DOE used the National Energy Modeling 

19 System to calculate the power plant emissions, 

including carbon dioxide, oxide of nitrogen, and the 

21 mercury rate. 

22 One thing I want to point out is for sulfur 

23 dioxide emission, you can gather results from the NEMS 

24 model but it's not included and DOE does not report the 

result as the change of the emissions due to the fact 

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1 the emission cap set by the Clean Air Act amendment of 

2 1990. 

3 Lastly, DOE, in the NOPR notice, also reports 

4 the monetized value of carbon dioxide reduction. 

I will stay here then to see in case you have 

6 any comments. 

7 MR. BROOKMAN: Please. Your name for the 

8 record. 

9 MR. BURT: Lane Burt, NRDC. I would just 

like to talk about the monetized value of carbon 

11 dioxide. It's nice to see it discussed, but it's not 

12 put into any of the analyses. It does have an economic 

13 impact. It's a financial issue. So we would like to 

14 see that put into the life-cycle cost analysis and net 

present value. 

16 Secondarily, it says in the NOPR that there's 

17 a range from $0 to $14. There's no discussion on why 

18 there's a range. If the number then that's used is 

19 $14, that's fine, but why is it $0 to $14? There's no 

discussion of that. 

21 As a recommendation of what the number should 

22 be, the EIA new report will have a price for carbon and 

23 a forecast for how to change that in the future. So we 

24 would recommend that be used. 

MR. BROOKMAN: Okay. Thank you. 

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1 MS. LIU: Thank you for your comments. 

2 MR. BROOKMAN: Karim. 

3 MR. AMRANE: Karim Amrane, AHRI. I think 

4 including the price of carbon in the analysis now is 

premature. The price of carbon is speculative. We 

6 don't know what it is. We don't know what it will be. 

7 I think DOE is doing the right thing for this 

8 rulemaking. 

9 If we want to get into speculation, then 

maybe DOE needs to look into the cost of refrigerant 

11 that we believe is going to be multiplied by 500 

12 percent if there is a climate change bill that passes 

13 this year or next year. But we don't know what's going 

14 to happen there, either, so we're not advocating for 

that. 

16 So I think right now we need to wait and see 

17 how this carbon issue plays out, and when we have a 

18 better control on prices, maybe that will be something 

19 that DOE should consider. 

MR. BROOKMAN: Yes, Lance. 

21 MR. BURT: Lane Burt, NRDC. 

22 MR. BROOKMAN: Lane. Pardon me. 

23 MR. BURT: It's all right. It's certainly 

24 true that we're not sure what's going to happen with 

the price of carbon, with all three presidential 

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1 candidates supporting cap and trade legislation. By 

2 assuming -- we're speculating that the price is zero, 

3 which we know is not going to be correct, by not 

4 including it in the life-cycle cost analysis. So, why 

would we do that when we could speculate and at least 

6 get closer to what is going to be the current answer --

7 the correct answer, excuse me. 

8 MR. BROOKMAN: Okay. Thank you. Karim. 

9 MR. AMRANE: Karim Amrane again. I mean, 

then if we speculate, then we need to speculate on 

11 other things as well. Like the price of refrigerant, 

12 which might be, as I said, 500 percent more than what 

13 it is today. That's going to change the entire 

14 analysis. 

So again, we need to be consistent here. 

16 Let's not speculate. Let's use what we know. 

17 MR. BROOKMAN: Okay. Thank you. Harvey 

18 Sachs. 

19 MR. SACHS: Harvey Sachs, ACEEE. I think 

there's not a necessity for it being an either/or. 

21 Longstanding tradition of doing scenario analysis: 

22 what if the cost of carbon were $18, or to use the 

23 McKenzie analysis of last year, it were $50? What if 

24 it were $0? How does it change the outcomes? These 

are reasonable things to bring to the decision-makers. 

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1 These are likely to be much larger effects than the 

2 life-cycle cost analysis we've done, and they may be 

3 informative, if not definitive. They're going to be 

4 important added to this analysis. 

MR. BROOKMAN: Okay. Thank you. Other 

6 comments with respect to environmental assessment and 

7 the analysis that's been provided here? 

8 (No response.) 

9 MR. BROOKMAN: Okay. 

MS. LIU: The last part of this section of 

11 analysis is the regulatory impact analysis. The 

12 primary goal of this analysis is to investigate the 

13 national impact due to non-regulatory alternatives 

14 compared to these mandatory energy conservation 

standards. 

16 DOE analyzed the following four alternatives, 

17 as shown in the screens. The method DOE used for their 

18 analysis is using the National Energy Savings 

19 spreadsheet models and then modifying the input of the 

models to take into account the above four scenarios. 

21 The output of this analysis included the 

22 national energy savings and the net present values of 

23 these non-regulatory alternatives, and how those might 

24 influence the net purchase of the higher efficiency 

equipment. 

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1 Again, this analysis result is presented in 

2 the NOPR analysis and also regulatory impact analysis 

3 report. 

4 Any comments? 

MR. BROOKMAN: Yes, Karim. 

6 MR. AMRANE: Karim Amrane, AHRI. I guess, 

7 since there is no Energy Star program for PTACs, that 

8 was not considered in the analysis, right? 

9 MS. LIU: Well, the --

MR. AMRANE: The voluntary program Energy 

11 Star was not part of the voluntary programs that you 

12 looked at. 

13 I guess my question is, to follow up on what 

14 Dave said before, you're setting the level so high, 

proposing a level so high that it probably will be 

16 impossible for Energy Star to set a program in future. 

17 So I think it's something DOE needs to consider 

18 because we believe, and I'm sure that many of you 

19 believe, that Energy Star played a big role in trying 

to push high efficiency product into the marketplace on 

21 a voluntary basis. I think we would like a program 

22 like that to exist for PTAC in the future. 

23 So in doing so, in setting those efficiency 

24 levels, we need to make sure there is enough room for 

an Energy Star program, which right now it doesn't look 

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1 that there will be. 

2 MR. BROOKMAN: Okay. Thank you. Additional 

3 comments on regulatory impact analysis? You can see on 

4 Slide 59 the Department lists a summary of issues on 

which DOE seeks comment. There were other issues that 

6 were raised today as well. But this is certainly a 

7 great outline for you to use as you construct your 

8 comments that will be due by June 6th, right? 

9 I think that's all the material that was 

gathered by the Department for presentation. I see two 

11 additional issues on Slide 60. I didn't know who 

12 raised those and how they -- but whoever did, we should 

13 try and address those now. 

14 Equipment switching -- yes. Harvey. 

MR. SACHS: You're a little faster than I am, 

16 but going back to Karim -- Harvey Sachs, ACEEE. Going 

17 back to Karim's comment on -- which effectively is the 

18 head room required for an Energy Star program, that's 

19 typically been formulated with savings of 10 percent 

for the Energy Star threshold. But the new water 

21 heating proposal is at less than 5 percent. 

22 So it's not at all clear that under DOE 

23 leadership the Energy Star program would be precluded 

24 in the standards that are proposed. 

MR. BROOKMAN: Okay. Thank you. So now I'm 

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1 looking at Slide 60, having noted 59, calling that to 

2 your attention for your comments to DOE. What I see 

3 here, this is issues raised by interested parties as of 

4 4/28/08. 

Equipment switching will be very likely in 

6 the nonstandard size industry because the industry is 

7 very competitive and most, if not all, equipment is 

8 sold based on price only. Have we addressed that 

9 sufficiently? 

MR. ANDERSON: If anyone would like to --

11 MR. BROOKMAN: That's Wes Anderson. 

12 MR. ANDERSON: This is Wes Anderson, DOE. If 

13 anybody would like to speak on this topic, please do so 

14 at this time. After we finish this this week and carry 

on with any other open issues that you want to talk 

16 about, this is the time. We need to address that and 

17 finish off. 

18 MR. BROOKMAN: That's what follows this 

19 segment. Yes, Scott. 

MR. TOUKATLY: Scott Toukatly. Yeah, Doug, 

21 those are my comments. Those were my initial comments 

22 from reading the NOPR the first pass. So yeah, I've 

23 already talked about those and actually, obviously, 

24 expanded on them as I've had more time to think about 

them. So that was pretty much a preliminary comment 

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1 that I wanted to get off from my original pass. But in 

2 thinking and reading about it more, obviously we've 

3 talked about them today and I've already expanded on 

4 them anyway. 

MR. BROOKMAN: Thank you. Anybody else that 

6 wishes to comment on these two that are listed there 

7 before we move on? 

8 (No response.) 

9 MR. BROOKMAN: So this segment of the agenda 

is where there's an opportunity for anybody that wishes 

11 to make closing remarks. In particular, if you wish to 

12 draw emphasis to something you said earlier and you 

13 think wasn't sufficiently covered or if there's 

14 something you think needs to be covered that hasn't 

been covered so far, now is the opportunity to do so. 

16 Discussion of Issues 

17 Doug Brookman 

18 MR. KINGSBURY: Question. 

19 MR. BROOKMAN: Yes, please. Ted. 

MR. KINGSBURY: Ted Kingsbury, Goodman. I 

21 guess, going back into the section on technical 

22 assessment and the cost data for 410A, generic or raw 

23 material pricing is there. They look low compared to 

24 where we are today. Plastic resin, I guess, wasn't 

that far off. It's certainly comparable. How is that 

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1 being addressed, I guess, based on where we are and 

2 where we're going to be? 

3 MS. ARMSTRONG: Now it's my turn again. 

4 MR. BROOKMAN: Ashley. 

MS. ARMSTRONG: Okay. So, for the cost model 

6 specifically, DOE uses a five-year average cost for 

7 metal prices. So if you're comparing today's prices to 

8 those, they will look -- your prices today will be 

9 higher than our prices, our five-year average. 

For the final rule DOE will update that to a 

11 2004 to 2008 average of metal prices. But that's --

12 DOE does that across the rules. 

13 MR. KINGSBURY: When the final energy ruling 

14 is issued, it will -- the cost model will actually 

reflect better what the true cost data would be for a 

16 410A system. 

17 MS. ARMSTRONG: I would say that for metals 

18 pricing it will incorporate the latest five years. As 

19 far as our 410A price assumptions as far as refrigerant 

and compressor pricing, stuff like that, those 

21 assumptions are in the Technical Support Document. If 

22 you think our assumptions are different from what you 

23 will experience, I encourage you to submit data. If 

24 it's not something you can submit on the record, you're 

more than welcome to submit it under confidentiality 

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1 agreements with us. 

2 MR. KINGSBURY: I think we intended to do 

3 that. 

4 MS. ARMSTRONG: Okay. That's great. 

MR. KINGSBURY: I wanted to ask a specific 

6 question on the material commodities. 

7 MS. ARMSTRONG: Okay. So it's the five-year 

8 average. 

9 MR. BROOKMAN: Okay. Karim, one point before 

you -- so, just the point that Ashley just made. It 

11 may not be obvious to everyone. If you've got 

12 information that you think should be confidential, it 

13 can be submitted directly to Navigant, correct? So 

14 that you're assured of that kind of confidentiality. 

Karim. 

16 MR. AMRANE: Karim Amrane with AHRI. I 

17 guess, Ashley, a follow-up question on what Ted talked 

18 about. Do you attempt in your analysis to project the 

19 cost of commodities like aluminum, copper, things like 

that? 

21 MS. ARMSTRONG: Like, future prices of 

22 materials? No. We use the previous five-year averages 

23 to reflect our pricing. And we do a sensitivity with 

24 current prices and we show how the results would change 

as far as the engineering curves in the TSD. But it's 

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1 just the past five years. 

2 MR. AMRANE: Okay. Because we've noticed in 

3 the last central air rulemaking that whatever estimates 

4 were made by DOE at the time ended up being wrong in 

2006 when the standard became effective. So I know 

6 it's difficult. I'm not saying -- I'm just trying to 

7 understand whether you at least try to account for 

8 variation in prices. 

9 MS. ARMSTRONG: That's why we do an average, 

a five-year average. I mean, it's a historic five-year 

11 average, but it's to try to get rid of fluctuations 

12 that might happen in a single year. 

13 MR. BROOKMAN: Okay. Dave. 

14 MR. MARKUSZ: It was just a comment -- David 

Markusz. It was just a comment on what Ashley had said 

16 about information and confidentiality. More along the 

17 lines to make sure that it's marked as confidential, 

18 because I don't know if you would release it if it 

19 wasn't. Would you release any specific information 

from a manufacturer if it wasn't marked? 

21 MS. ARMSTRONG: If you send me information 

22 directly, I'm going to treat it as confidential. If 

23 you want information released to the record, send it to 

24 DOE. 

MR. MARKUSZ: Okay. 

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1 MS. ARMSTRONG: Is that fair? 

2 MR. MARKUSZ: I just wanted to make sure that 

3 everybody knew that. 

4 MS. ARMSTRONG: Yeah. 

MR. BROOKMAN: Okay. Clear? So, going --

6 Ron Lewis. Going to Ron Lewis. 

7 MR. LEWIS: Just to clarify, the information, 

8 I believe, that we collect from multiple parties -- if 

9 it's something that's going to help us to be more 

accurate and get our arms around things, it may be 

11 aggregated and released in an aggregated form with 

12 others. The confidentiality is just we would not 

13 expose a single company with a submission. But the 

14 data may be -- you wouldn't be submitting it to us if 

you didn't want us to use it. It may be put out in 

16 some form but not identified by the company. 

17 MR. MARKUSZ: Right. 

18 MR. BROOKMAN: Okay. So now, as we were just 

19 a moment ago, additional remarks, closing remarks from 

anybody? Anything that anybody else wishes to say at 

21 this time? 

22 MR. BENZ: Jim Benz from GE. I'm sorry to 

23 beat the horse one more time. In entering this, we had 

24 a concern on Addendum T. After sitting through this 

meeting I have a greater concern on Addendum T. Just 

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1 as a point of reference, through-the-wall air 

2 conditioning industry in the United States is probably 

3 pretty close to the size of the PTAC industry. 

4 Probably half of the through-the-wall air 

conditioners being purchased today do not fit the 

6 sleeve that they're installed in. It's not a small 

7 minority. They are less width and less height to the 

8 tune of about an inch on each side. And again, our 

9 concern is that a 41 3/4-inch by 15 3/4-inch product 

would meet Addendum T on the square inches as well as 

11 the dimensions. 

12 In a regulatory scheme, I think it's 

13 important to think through what people could do as 

14 opposed to what people are doing. With some of the 

concerns that Mary Ann brought up with respect to 

16 people putting product out there that doesn't meet 

17 specs today, leaving that loophole in the regulation I 

18 think is very risky when another alternative would 

19 solve the problem. Thank you. 

MR. BROOKMAN: Thank you. Additional 

21 comments? Scott. 

22 MR. TOUKATLY: Scott Toukatly. I think the 

23 only comment I would make on that is I believe it's now 

24 an ASHRAE issue. I got the impression that the DOE 

would just adopt what ASHRAE adopts for language. So I 

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1 think it's an ASHRAE issue. Am I correct, Karim? 

2 MR. AMRANE: I guess it is. But I'm sure 

3 that DOE can always amend whatever DOE wants to do. 

4 MR. TOUKATLY: That's true. 

MR. AMRANE: I guess if there are concerns 

6 about this, I think, as an industry, we can resubmit 

7 another addendum to ASHRAE to tighten up the definition 

8 a little bit more, or DOE can do it on its own. I 

9 don't know. But I think if there are concerns -- I'm 

not sure whether I understand the concerns from GE, and 

11 maybe as an industry we need to think about this. 

12 MR. BROOKMAN: Okay. Thank you. Scott. 

13 MR. TOUKATLY: I guess I just need to 

14 understand the process. I mean, we're under a very 

tight timeline right now. The DOE's NOPR seemed to 

16 indicate that they were waiting to see what ASHRAE did. 

17 If ASHRAE gets held up on this definition and doesn't 

18 adopt it, what is the DOE's plan to do? I would 

19 imagine to fall back on the existing definition, which 

will cause even a bigger uproar. 

21 MR. BROOKMAN: Ron Lewis? 

22 MR. LEWIS: We are on a fast track and we 

23 can't wait for ASHRAE if there's a new discussion and a 

24 study underway. We have to come to closure. So I 

can't tell you exactly what the outcome of that's going 

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1 to be, but I can tell you that we can't wait for some 

2 other process that may take considerable time. 

3 MR. TOUKATLY: So it's essentially one or the 

4 other. It's either today's definition or the adopted 

definition. It isn't one that if the DOE sees what 

6 ASHRAE does this summer and doesn't adopt anything, 

7 they're -- not in the last few months are they going to 

8 adopt different language or propose different language. 

9 I mean, it's going to be one or the other. It's 

either today's language or whatever language that 

11 ASHRAE may adopt between now and June. But I would 

12 imagine it would be getting very late for ASHRAE to 

13 change. 

14 MR. AMRANE: This is Karim. I think as far 

as ASHRAE is concerned this is it. I mean, there's no 

16 time frame to change the addendum. So it's done. 

17 So if the option that DOE has today is either 

18 what we have currently in the 1999 standard versus the 

19 addendum, I believe that the addendum is much better. 

It has a much better definition than what we currently 

21 have. So I think as far as DOE adopting language, I 

22 think I would recommend that DOE adopt Addendum T. 

23 Now, if there is a need to further improve 

24 the definition, I think we are willing as an industry 

to discuss it and to resubmit a new addendum for ASHRAE 

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1 to consider and then to change the definition in the 

2 future. But at least for the time frame we're talking 

3 about, there are not too many choices. 

4 MR. LEWIS: I believe you said that was in 

June that you expect that to be --

6 MR. AMRANE: That's it. I mean, the review 

7 process, we went through it. That's it. It's going to 

8 be adopted in June. 

9 MR. BROOKMAN: Okay. That was Karim 

speaking, followed by Ron Lewis. Now Harvey. 

11 MR. SACHS: Factual question. How many 

12 nonstandard models are available on the market, to the 

13 nearest hundred? 

14 MS. ARMSTRONG: Could you repeat that? 

MR. SACHS: How many nonstandard PTAC and 

16 PTHP models are available today in the United States? 

17 MS. ARMSTRONG: Models? 

18 MR. SACHS: What's the number of models? 

19 MR. AMRANE: Shipments, or are you talking 

models? 

21 MR. SACHS: Number of models. 

22 MS. ARMSTRONG: Hundreds. 

23 MR. SACHS: A hundred? 

24 MS. ARMSTRONG: No, hundreds. There's a lot 

of them available. 

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1 MR. SACHS: Okay. That's not a formidable 

2 number for reviewing the cut sheets to get the sleeve 

3 size distribution. With the sleeve size distribution 

4 of the cross-sectional area, we can consider a size cut 

smaller than 670 square inches, significantly smaller 

6 with reference to GE's concerns, that would minimize 

7 the likelihood of leak-out of nonstandard product into 

8 the standard category. 

9 I would request that DOE go through the darn 

cut sheets that are on the Web and give us a sense of 

11 where that cut should be. So I'm asking, really, if 

12 our only two options are the present size cut or 

13 Addendum T or if we can look at a third path that is a 

14 DOE adoption of a cross-sectional area or dimensional 

standard that would minimize the likelihood of leak16 out. 

17 MR. BROOKMAN: Francine? 

18 MS. PINTO: Yeah, this is Francine Pinto from 

19 the General Counsel's Office. I can't give you a legal 

answer of what we will -- you know, if it's just 

21 Addendum T or the ASHRAE definition at this moment. 

22 Certainly, we're going to elevate this issue because 

23 it's an issue on the table. 

24 We will do a rule by the end of September. 

That's absolute. So there is no negotiation there. 

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1 My feeling is, to the extent that in the 

2 comment period people have suggestions they would want 

3 us to consider on the definition that are really 

4 specific, it's probably better for us to have them. I 

can't tell you what we'll do because we have to go 

6 through a process to decide what we can legally do. 

7 But certainly, since we have a short time frame to 

8 finish this up, submit whatever detailed comments you 

9 can that you think would be workable. Then we'll see 

what we can do legally or not. 

11 MR. BROOKMAN: Harvey Sachs. Ron Lewis. 

12 MR. LEWIS: Ashley and I have to join in a 

13 conference call. I'm going to go get on the call and 

14 she can stay a couple more minutes to be in this. But 

there are people on a conference call waiting for us 

16 right now. So, I apologize and I have to run. If you 

17 want to stay to just finish, I'll get on the call and 

18 tell them you'll be there. 

19 MR. BROOKMAN: Okay. Thank you. 

MR. LEWIS: Thanks, everybody, for being 

21 here. We really appreciate the input. I think it was 

22 a very productive day getting everything on the table. 

23 I'm very satisfied that everybody's had a chance to 

24 express their opinion and did so. So, thanks very 

much. 

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1 MR. SACHS: Francine, with all due respect, 

2 DOE has not always found the law read in quite the same 

3 way as the trade associations and the environmental 

4 advocates together read the law. So, I appreciate the 

remark, but I'm not completely comforted. 

6 But that not withstanding, I think we have 

7 not heard anyone today from either manufacturers of 

8 nonstandard or standard equipment who want to see 

9 substantial market perturbation or distortion by the 

sales of nonstandard equipment into standard 

11 applications. So I am specifically asking for the 

12 Department's help in assuring that the rule does not 

13 create a loophole where there is not one now. Thank 

14 you. 

MR. BROOKMAN: Thank you. Thanks very much. 

16 So, any additional final comments at this time? 

17 (No response.) 

18 MR. BROOKMAN: Then, before I turn it back to 

19 Wes for closing remarks, I would ask you -- there's an 

evaluation form in your packet. Please take 30 seconds 

21 or a minute to mark it. The Department reads these 

22 things carefully. They're always looking for ways to 

23 improve these proceedings. 

24 And for my part, I just thank you. I thought 

this was a very constructive dialogue today. We 

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1 covered a lot of ground. 

2 And then to Wes Anderson for closing remarks. 

3 Closing Remarks 

4 Wes Anderson 

 (PowerPoint presentation.) 

6 MR. ANDERSON: Basically, I'm going to talk 

7 to you about how to submit your comments. The address 

8 is in your handout as well as up here. Send it to 

9 Brenda Edwards. She's standing out at the corner in 

the back right there. 

11 I would like to make a change. Even though 

12 we published the NOPR on the Web May 31st, the Federal 

13 Register put June 6th. So we will allow the comment 

14 period to last up 'til June 6th. However, the sooner 

the better. 

16 (Laughter.) 

17 MR. ANDERSON: I'd like to thank you guys for 

18 coming out and voicing your opinion. It's very 

19 important to get that perspective. It's been a while 

since it's been available for public comment. We're 

21 going to take your comments, rationalize them, and then 

22 move forward for a final rule in September. Thank you, 

23 and that's all I have. We're done. 

24 (Whereupon, at 3:10 p.m., the meeting was 

concluded.) 

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1 REPORTER'S CERTIFICATE 

2 

3 This is to certify that the attached proceedings 

4 before: 

5 UNITED STATES DEPARTMENT OF ENERGY 

6 In the Matter of: 

PUBLIC MEETING ON PROPOSED ENERGY CONSERVATION 

STANDARDS FOR PACKAGED TERMINAL AIR CONDITIONERS AND 

HEAT PUMPS
 

7 Were held as herein appears and that this is the 

8 original transcript thereof for the file of the 

9 Department, Commission, Board, Administrative Law Judge 

10 or the Agency. 

11 Further, I am neither counsel for or related to any 

12 party to the above proceedings. 

13 

14 

15 Wendy Greene

16 Official Reporter 

17 Dated: May 6, 2008 

18 

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