U.S. DEPARTMENT OF ENERGY 

### -CIZ-y/-q/

OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY

PUBLIC HEARING REGARDING ENERGY EFFICIENCY STANDARDS FOR CENTRAL AIR CONDITIONERS AND HEAT PUMPS

TUESDAY, OCTOBER 2, 2001 ."-JJ + ++++ The Public Hearing met in Room 1E245 in the Forrestal Building, 1000 Independence Avenue, S.W., Washington, D.C., at 9:00 a.m., Michael McCabe, Presiding Officer, Office of Energy Efficiency and Renewable Energy, presiding. PRESENT: MICHAEL McCABE DEPARTMENT OF ENERGY DOUGLAS BROOKMAN FACILITATOR



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

### u.s. DEPARTMENT OF ENERGY

+ + + + + 

### OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY

+ + + + + 

### PUBLIC HEARING REGARDING ENERGY EFFICIENCY STANDARDS FOR CENTRAL AIR CONDITIONERS AND HEAT PUMPS

+ + + + + 

### TUESDAY, OCTOBER 2, 2001

+ + + + + 

### The Public Hearing met in Room 1E245 in the Forrestal Building, 1000 Independence Avenue, S.W., Washington, D.C., at 9:00 a.m., Michael McCabe, Presiding Officer, Office of Energy Efficiency and Renewable Energy, presiding. PRESENT: MICHAEL McCABE DOUGLAS BROOKMAN DEPARTMENT OF ENERGY FACILITATOR

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## } -2q .W IN EE-RM/STD-98-440, Opening Remarks . . '. . . .' . . . . . . 3 Agenda Review and Introduction ......... 9 Participants' General Remarks .. ...... . 19 Legal Issues . . . . . . ........ 106 Proposed Standards .. . . ....... 135 Other Issues . . . . . . . . . . . . . . . . . 165



## NEALR.GROSS COURTREPORTERS ANDTRANSCRIBERS 1323RHODEISLANDAVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 

### C-O-N-T-E-N-T-S**').~** 

### Opening Remarks . Agenda Review and Introduction Participants' General Remarks Legal Issues Proposed Standards Other Issues

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### 19 106 135 165

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### EE-RM/STD-984402q 

## WW (9:38 a.m.) 3 MR. McCABE: Okay, I'd like to start the 4 meeting and apologize for this delay but I think we've 5 all recovered and we're ready to start. Goodmorning. 6 I'm Michael E. McCabe, Team Leader for the Central Air 7 Conditioner Rulemaking here at the Department of 8 Energy. I am the presiding officer for this public 9 hearing and Doug Brookman here will facilitate and set 10 the guidelines for conducting the hearing. 11 This hearing had been scheduled for 12 September 13th and we know that many of you were here 13 in Washington on that fateful day when the terrorists 14 struck. We appreciate the efforts of all who are 15 either present here today or who are participating by 16 conference call. Our Assistant Secretary, David 17 Garman, unfortunately had a scheduling conflict and 18 will not be able to join us today as previously 19 planned. 20 The others joining me today are Ed 21 Pollock, Jr., Director of the Office of Building 22 Research and Standards; Michael Raymond, a member of 23 Mr. Pollock's staff; Mike Bowers, from the 24 Department's Office of General Counsel; Mark 25 Fredricks, from the Department's Office of Policy and 

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### P-R-O-C-E-E-D-I-N-G-S , " .**'~** " .**"'~**...". .,'.**I'~'-!t'!'**;:1, ..'. " .";"",," 2 

### EE-RM/STD-98-440.-

## 241

# Ww. (9:38 a.m.) 3 

### 4 meetingandapologize forthisdelaybut I thinkwe've 5 

### allrecoveredandwe'rereadyto start. Goodmorning. 6 

### I'mMichaelE. McCabe, TeamLeaderforthe CentralAir 7 Conditioner Rulemaking here at the Department of 8 

### Energy. I am the presiding officer for this public 9 hearingandDougBrookmanherewillfacilitateandset 10 the guidelines for conducting the hearing. 11 This hearing had been scheduled for 12 September 13thandwe know that many of you were here 13 inWashingtonon that fateful daywhen the terrorists 14 

### struck. We appreciate the efforts of all who are 15 eitherpresent here todayorwho areparticipatingby 16 

### conference call. Our Assistant Secretary, David 17 Garman, unfortunately had a scheduling conflict and 18 will not be able to join us today as previously 19 planned. 20 The others joining me today are Ed 21 Pollock, Jr., Director of the Office of Building 22 Research and Standards; Michael Raymond, a member of 23 Mr. Pollock's staff; Mike Bowers, from· the 24 

### Department's Office of General Counsel; Mark 25 Fredricks, from the Department'sOffice of Policyand

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 www.nealrgross.com4 1 International Affairs. EE.RMSTD8 

## EE-RM/STD-98-440.JI W'%% 2 Providing technical support for today's 3 public hearing are Mark Kendall and Mike Revest from 4 Arthur D. Little and Greg Rosenquist from Lawrence 5 Berkeley National Lab. Providing administrative 6 support for today's public hearing are Maurene Murphy, 7 Brenda Edwards Jones, Sandy Bell and Deborah Ford, all 8 from the Office of Building Research and Standards. 9 On behalf of the Department, I would like 10 to thank you all for taking the time to participate in 11 this public hearing. In response to a petition for 12 reconsideration and as a result of review under 13 President Bush's regulatory review plan, the 14 Department of Energy is proposing to withdraw its 15 January 22nd, 2001 final rule setting forth energy 16 conservation standards for residential central air 17 conditioners and central air conditioning heat pumps. 18 Instead DOE proposes to amend the currently 19 enforceable standards by raising the minimum 20 efficiency levels by 20 percent. 21 We have chosen the format for today's 22 public hearing to allow interested parties to present 23 oral views, data and arguments on the specific topics 24 described in the supplemental notice of proposed 25 rulemaking for central air conditioners and heat 

### NEALR.GROSS COURT REPORTERS ANDTRANSCRIBERS 1323RHODE ISLANDAVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 4 1 

### International Affairs. 

### EE

..

## RM/STD.98-44~)..

# 'I'W

# W 2 ProvidingtSchnical support for t6day's 3 public hearing are Mark Kendall and Mike Revest from 4 Arthur D. Little and Greg Rosenquist from Lawrence 5 

### Berkeley National Lab. Providing administrative 6 supportfortoday's publichearingareMaureneMurphy, 7 BrendaEdwardsJones, SandyBellandDeborahFord, all 8 from the Office of Building Research and Standards. 9 

### On behalf of the Department, I would like 10 tothankyou all for takingthe time toparticipate in 11 this public hearing. In response to a petition for 12 reconsideration and as a result of review under 13 President Bush's regulatory review plan, the 14 Department of Energy is proposing to'withdraw its 15 January 22nd, 2001 final rule setting forth energy 16 conservation standards· for residential central air 17 conditioners andcentral airconditioningheatpumps. 18 

### Instead DOE proposes to amend the currently 19 

### enforceable standards by raising the minimum 20 efficiency levels by 20 percent. 21 We have chosen the format for today's 22 publichearingto allowinterestedparties topresent 23 oralviews, data and arguments on the specific topics 24 described in the supplemental notice of proposed 25 rulemaking for central air conditioners and heat

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### EE-RM/STD-98-440-J- W 

### 1 5 

### 1 pumps. The supplementproposed-rules waspublished in 2 the Federal Register on July 21st -- July 25th, 2001. 

### 3 A notice published in the Federal Register on 4 September 27th announced today's rescheduled public 5 hearing and the extension of the commentaryperiod to 6 October the 19th. 7 The Department also sent announcementsby 8 e-mail and by conventional mail to organizations and 9 individuals who might have an interest in this 10 rulemaking. As stated in theFederal Registernotice, 11 we invited any persons who have an interest in the 12 supplemental proposed rule or who is arepresentative 13 of agroup or class of persons that has an interest in 14 these issues to request an opportunity to make an oral 15 presentation. 16 We also requested each person wishing to 17 be heard to submit an advanced copy of his or her 18 statement. Those statements we received in time, we 19 are providing attendees with copies. The Department 20 seeks comments today on the two specific topics that 21 are identified in the supplemental proposed rule any 22 other issues considered pertinent by the interested 23 parties. 24 The agenda for today's hearing is 25 structured to alloweachparticipant tomake ageneral 

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### EE-RM/STO-9S-440-'Z-41

# WW5 

### 1 pumps. Thesupplementproposed·ruleswaspublishedin 2 the FederalRegister onJuly21st

-- July 25th, 2001. 3 A notice published in the Federal Register on 4 September 27th announced today's rescheduled public 5 hearing andthe extensionof the commentaryperiodto 6 October the 19th. 7 TheDepartment also sent announcementsby 8 e-mail and by conventional mail to organizations and 9 individuals who might have an interest in this 10 rulemaking. As statedintheFederalRegisternotice, 11 we invited any persons who have an interest in the 12 supplementalproposedrule orwho is a representative 13 of a grouporclassofpersons thathas aninterest in 14 these issuestorequest anopportunitytomake anoral 15 presentation. 16 We also requested eachperson wishing to 17 be heard to submit an advanced copy of his or her 18 statement. Those statements we received in time, we 19 are providing attendees with copies. The Department 20 seeks comments today on the two specific topics that 21 are identified in the supplemental proposed rule any 22 other issues considered pertinent by the interested 23 parties. 24 The agenda for today's hearing is 25 structuredtoalloweachparticipanttomakea general

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com6 1 statement limited to five minutes prior to the 2 discussion of the specific topics. A general 3 statement need not address the specific topic but may 4 cover any other issues pertinent to this rulemaking. 5 The Department will permit other participants to 6 comment on any of the general statements. We will 7 then divide the remainder of the hearing into segments 8 with each segment consisting of one of the specific 9 topics announced in the July 25th Federal Register 10 Notice. 11 We will introduce each topic and then 12 invite discussion on that topic. Participants should 13 be prepared to answer questions by us and by other 14 participants concerning these issues. We will review 15 the agenda shortly and there will be an opportunity to 16 insert other issues at the appropriate time. The 17 comments received here today, along with comments 18 submitted in writing, will assist the Department in 19 developing its final rule. Anyone attending this 20 workshop or submitting written comments will be added 21 to our list for future mailings. We post new items to 22 our website and we announce this by sending e-mail 23 messages to our list of attendees from previous 24 hearings. 25 For those of you without e-mail, it is 

### NEALR.GROSS COURTREPORTERS ANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com6 

### 1 statement limited to five minutes prior to the 2 

### discussion of the specific topics. A general 3 statement neednot address the specific topicbut may 4 cover any other issues pertinent to this rulemaking. 5 The Department will permit other participants to 6 

### comment on any of the general statements. We will 7 thendividetheremainderofthehearingintosegments 8 with each segment consisting of one of the specific 9 topics announced in the July 25th Federal Register 10 Notice. 11 We will introduce each topic and then 12 invite discussiononthat topic. Participants should 13 be prepared to answer questions by us and by other 14 participants concerningthese issues. We will review 15 theagenda shortlyandtherewillbeanopportunityto 16 

### insert other issues at the appropriate time. The 17 comments received here today, along with comments 18 submitted in writing, will assist the Department in 19 

### developing its final rule. Anyone attending this 20 workshop or sUbmittingwrittencomments willbe added 21 toourlist for future mailings. We postnew items to 22 our website and we announce this by sending e-mail 23 messages to our list of attendees from previous 24 hearings. 25

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### For those of you without e-mail.itis NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com7 1 important that you inform us and we will mail the 2 announcements to you. All materials relating to this 3 rulemaking have been posted on our website. Anyone 4 wishing these materials who does not have access to 5 the internet should let us know andwe will make other 6 arrangements to provide them with electronic versions 7 of the web materials. Before turning the meeting over 8 to our facilitator, Doug Brookman, I would like to 9 describe the materials in your handout package. 10 On the top of that package in a small 11 white box is a compact disk that contains the Federal 12 Register notices, a revised technical support document 13 and the four Excel spread sheets that were used in the 14 analysis. The first yellow page is the agenda. The 15 second yellow page is entitled "General Information", 16 and-this page contains three items of importance. The 17 first item is the URL for the Central Air Conditioner 18 Website. This site has downloadable copies of all 19 materials used in the rulemaking. 20 The second is the name, address, e-mail 21 and telephone number of the person to send your 22 comments along with docket number, which is EE-RM/STD23 98-440. Comments must be received by us on or before 24 October 19th, 2001. Please note that because of the 25 rescheduling of this hearing, we have extended the 

### NEALR.GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 7 

### 1 important that you inform us and we will mail the 2 announcements toyou. All materials relatingto this 3 rulemaking have been posted on our website. Anyone 4 wishing these materials who does not have access to 5 the internet shouldletus knowandwe willmake other 6 arrangements toprovide themwithelectronicversions 7 ofthewebmaterials. Beforeturningthemeetingover 8 to our facilitator, Doug Brookman, I would like to 9 describe the materials in your handout package. 10 On the top of that package in a small 11 white box is a compact disk that contains the Federal 12 Registernotices, a revisedtechnicalsupportdocument 13 andthe fourExcel spreadsheetsthatwereusedinthe 14 analysis. The first yellow page is the agenda. The 15 secondyellowpage is entitled "General Information", 16 and·thispagecontainsthree itemsof importance. The 17 first itemis the URL for the CentralAir Conditioner 18 Website. This site has downloadable copies of all 19 materials used in the rulemaking. 20 The second is the name, address, e-mail 21 and telephone number of the person to send your 22 commentsalongwithdocketnumber, whichisEE-RM/STD23 98-440. Comments must be receivedbyus on orbefore 24 October 19th, 2001. Please note that because of the 25 rescheduling of this hearing, we have extended the

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com8 1 date for the comments. DOE is requesting a signed 2 original, a computer diskette in Word Perfect 8 and 10 3 copies of the written comments. If you are submitting 4 data, please use Microsoft Excel. 5 No fax comments will be accepted. DOE 6 will accept e-mail comments but youmust send a signed 7 original. All written comments and data submissions 8 will be available for public inspection at the DOE 9 Freedom of Information reading room. The telephone 10 number is 202-586-6020. Any person submitting 11 information which he or she believes to be 12 confidential and exempt by law frompublic disclosure, 13 should submit one complete signed copy plus 10 copies 14 and a copy on a disk from which the information 15 claimed to be confidential has been deleted. In 16 accordance with the procedures established at 10 CRF 17 Part 1004.11, the Department of Energy will determine 18 whether the information shall be exempt from public 19 disclosure. 20 The third itemon that second yellow sheet 21 is the contact person if you wish to purchase a copy 22 of a transcript of today's hearing. In approximately 23 two weeks a copy will be available for inspection and 24 copying at the Department of Energy's Freedom of 25 Information reading room located down the hall in 1E

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### date for the comments. DOE is requesting a signed 2 original, a computerdiskette inWordPerfect 8 and 10 3 

### copiesof thewrittencomments. Ifyouare submitting 4 

### data, pleaSe use Microsoft Excel. 5 

### No fax comments will be accepted. DOE 6 

### willaccept e-mailcommentsbutyoumust senda signed 7 

### original. All written comments and data submissions 8 

### will be available for public inspection at the DOE 9 

### Freedom of Information reading room. The telephone 10 number is 202-586-6020. Any person submitting 11 

### information which he or she believes to be 12 confidentialandexemptbylawfrompublicdisclosure, 13 should submit one complete signedcopyplus 10 copies 14 and· a copy on a disk from which the information 15 claimed to be confidential has been deleted. In 16 accordance with the procedures established at 10 CRF 17 Part 1004.11, theDepartment of Energywill determine 18 whether the information shall be exempt from public 19 disclosure. 20 Thethirditemonthat secondyellowsheet 21 is the contact person if you wish to purchase a copy 22 of a transcript of today's hearing. Inapproximately 23 two weeks a copywillbe available for inspection and 24 copying at the Department of Energy's Freedom of 25 Informationreadingroom locateddown the hall in lE-

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com9 1 190. Following the yellow pages is a copy of the 2 Federal Register notice announcement of this 3 rescheduled public hearing and the extension of the 4 comment period. 5 Next in your handout package is a list of 6 organizations in alphabetic order from which we 7 received comments and statements or presentation at 8 today's hearing. Following the list is a copy of each 9 statement. Organizations that did not provide us with 10 statement in time for copying were responsible for 11 making their own copies as a handout. On the table, 12 we have a limited number of copies of the Federal 13 Register proposed rule and the correction notice. 14 Theworkshop is scheduledto adjourntoday 15 at 5:00 p.m. unless, of course, we finish early. 16 Topics which have not been completely discussed by 17 that time can be addressed in additional written 18 comments which are due on October 19th. Again, we 19 appreciate the time and the effort you have in 20 preparing for this public hearing and we are pleased 21 to receive your comments and opinions. Our purpose 22 today is it listen to your views. I'd like now to 23 turn the meeting over to our facilitator, Doug 24 Brookman, who will review the agenda, provide some 25 housekeeping details and describe how we will conduct 

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### 190. Following the yellow pages is a copy of the 2 

### Federal Register notice announcement of this 3 rescheduled public hearing and the extension of the 4 comment period. 5 Next inyourhandout package is a list of 6 organizations in alphabetic order from which we 7 received comments and statements or presentation at 8 today'shearing. Followingthe list isa copyofeach 9 

### statement. Organizationsthatdidnotprovideuswith 10 statement in time for copying were responsible for 11 making their own copies as a handout. On the table, 12 we have a limited number of copies of the Federal 13 Registerproposed rule and the correction notice. 14 Theworkshopisscheduledtoadjourntoday 15 at 5:00 p.m. unless, of course, we finish early. 16 Topics which have not been completely discussed by 17 that time can be addressed in additional written 18 

### comments which are due on October 19th. Again, we 19 

### appreciate the time and the effort you have in 20 preparing for this public hearing and we are pleased 21 to receive your comments and opinions. Our purpose 22 

### today is it listen to your views. I'd like now to 23 turn the meeting over to our facilitator, Doug 24 Brookman, who will review the agenda, provide some 25 housekeepingdetails anddescribehowwe will conduct

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com10 1 the meeting. Doug? 2 MR. BROOKMAN: Thank you. Good morning, 3 everybody. 4 (Goodmorning) 5 MR. BROOKMAN: Am I on? I think so. 6 Thank you for being here and thanks for hanging in 7 despite the disruption. For the record, we had a 8 power outage this morning in the Forrestal Building 9 and we delayed our start by about 35 or 40 minutes, so 10 we're going to have to find a way to make up that 11 time. 12 Thanks to all of you again for being here. 13 I'd like to start off by giving every person in the 14 room a chance to introduce him or herself. If you'd 15 say your name, please and your organizational 16 affiliation. Most of this will not end up being on 17 the record, but as a matter of courtesy, I'd ask that 18 everybody do that. May I start with you? 19 MS. MEYERS: Karen Meyers, Rheem 20 Manufacturing. 21 MR. PRINDLE: Bill Prindle, Alliance to 22 Save Energy. 23 MS. KENNEDY: Kit Kennedy, from NRDC and 24 I believe we have David Goldstein from NRDC on the 25 phone. David, are you there? 

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### 1 the meeting. Doug? 2 MR. BROOKMAN: Thank you. Good morning, 3 

### everybody. 4 

### (Good morning) 5 

### MR. BROOKMAN: Am Ion? I think so. 6 

### Thank you for being here and thanks for hanging in 7 

### despite the disruption. For the record, we had a 8 

### power outage this morning in the Forrestal Building 9 

### andwe delayedour startbyabout 35 

### or 40 

### minutes, so lOwe're going to have to find a way to make up that 11 

### time. 12 

### Thankstoallofyouagainforbeinghere. 13 

### I'd like to start off by giving every person in the 14 

### room a chance to introduce him or herself. If you'd 15 

### say your name, please and your organizational 16 

### affiliation. Most of this will not end up being on 17 

### the record, but as a matter of courtesy, I'd ask that 18 

### everybody do that. May I 

### start with you? 19 

### MS. MEYERS: Karen Meyers, Rheem 20 Manufacturing. 21 

### MR. PRINDLE: Bill Prindle, Alliance to 22 Save Energy. 23 

### MS. KENNEDY: Kit Kennedy, from NRDC and 24 I believe we have David Goldstein from NRDC on the 25 phone. David, are you there?

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com11 1 MR. GOLDSTEIN: Yes. 2 MR. BROOKMAN: Iwill ask everybody on the 3 phone to introduce him or herself in just a moment, 4 when we conclude. Yes. 5 MR. HUNT: Marshall Hunt, Pacific Gas and 6 Electric Company. 7 MS. HALL-CRAWFORD: Mel Hall-Crawford, 8 Consumer Federation of America. 9 MR. ROSENSTOCK: Steve Rosenstock, Edison 10 Electric Institute. 11 MR. SACHS: Harvey Sachs, American Council 12 for an Energy Efficient Economy. 13 MR. deLASKI: Andrew deLaski of the 14 Applied Standards Awareness Project. 15 MS. BIEDRZYCKI: Carol Biedrzycki, Excess 16 Rates Organization to Save Energy. 17 MR. MARTY: Doug Marty, Goodman Global 18 Holding. 19 MS. MUSANTE: Ramola Musante, Goodman 20 Global Holding. 21 MR. STEPHENS: Charlie Stephens, Oregon 22 Office of Energy. 23 MR. ECKMAN: Tom Eckman, Northwest Power 24 Planning Council. 25 MR. CRAWFORD: Jim Crawford, the Trane 

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### MR. GOLDSTEIN: Yes. 2 MR. BROOKMAN: I willaskeverybodyonthe 3 phone to introduce him or herself in just a moment, 4 when we conclude. Yes. 5 

### MR. HUNT: Marshall Hunt, PacificGas and 6 Electric Company. 7 

### MS. HALL-CRAWFORD: Mel Hall-Crawford, 8 Consumer Federation of America. 9 

### MR. ROSENSTOCK: SteveRosenstock, Edison 10 Electric Institute. 11 

### MR. SACHS: HarveySachs, AmericanCouncil 12 for an Energy Efficient Economy. 13 

### MR. deLASKI: Andrew deLaski of the 14 Applied Standards Awareness Project. 15 

### MS. BIEDRZYCKI: CarolBiedrzycki, Excess 16 Rates Organization to Save Energy. 17 

### MR. MARTY: Doug Marty, Goodman Global 18 Holding. 19 

### MS. MUSANTE: Ramola Musante, Goodman 20 Global Holding. 21 MR. STEPHENS: Charlie Stephens, Oregon 22 Office of Energy. 23 

### MR. ECKMAN: Tom Eckman, Northwest Power 24 Planning Council. 25

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### MR. CRAWFORD: Jim Crawford, the Trane NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com12 1 Company. 2 MR. MARTIN: Michael Martin, California 3 Energy Commission. 4 MR.AMRANE: KarimAmrane,Air Conditioning 5 and Refrigeration Institute. 6 MR. HODGES: John Hodges, Air Conditioning 7 and Refrigeration Institute. 8 MS. MILLER: Deborah Miller, Air 9 Conditioning and Refrigeration Institute. 10 MR. POLLOCK: Ed Pollock, Department of 11 Energy. 12 MR.McCABE: Michael McCabe, Department of 13 Energy. 14 MR. BOWERS: Mike Bowers, the Office of 15 General Counsel for the Department of Energy. 16 MR. BROOKMAN: And may I go to you, sir? 17 MR. JACOBSON: Morrie Jacobson, State of 18 Florida, I represent a series of energy organizations 19 down there. 20 MR. BROOKMAN: Thank you. Yes, sir. 21 MR. BRAY: (phonetic) Mike Bray with 22 Trane Company. 23 MR. MULLINS: Jim Mullins, Lennox 24 International. 25 MR. BROOKMAN: Is Brenda Ewards-Jones back 

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### 1 Company. 2 

### MR. MARTIN: Michael Martin, California 3 

### Energy Commission. 4 

### MR. AMRANE: KarimAmrane, AirConditioning 5 

### and Refrigeration Institute. 6 

### MR. HODGES: JohnHodges, AirConditioning 7 

### and Refrigeration Institute. 8 

### MS. MILLER: Deborah Miller, Air 9 

### Conditioning and Refrigeration Institute. 10 

### MR. POLLOCK: Ed Pollock, Department of 11 

### Energy. 12 

### MR. McCABE: MichaelMcCabe, Departmentof 13 

### Energy. 14 

### MR. BOWERS: Mike Bowers, the Office of 15 

### General Counsel for the Department of Energy. 16 

### MR. BROOKMAN: And may I go to you, sir? 17 

### MR. JACOBSON: Morrie Jacobson, State of 18 

### Florida, I represent a series of energyorganizations 19 

### down there. 20 

### MR. BROOKMAN: Thank you. Yes, sir. 21 

### MR. BRAY: (phonetic) Mike Bray with 22 

### Trane Company. 23 

### MR. MULLINS: Jim Mullins, Lennox 24 International. 25

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### MR. BROOKMAN: IsBrendaEwards-Jonesback 

### NEAL.R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com13 1 there, I can't see, also behind the post? Brian, will 2 you keep us going here? 3 MR. BENNINGER: Brian Benninger, 4 Department of Energy. 5 MR. MEYERS: Ed Meyers, Commissioner on 6 the DC Public Service Commission. 7 MR. HARAK: Charles Harak. 8 MR. RENIE: Ed Renie. 9 MR. LINN: John Linn with Northeast 10 Commission on Efficiency Partnership. 11 MR. PAMPLIN: Chris Pamplin,American Geo12 thermal. 13 MR. LOOMIS: Ralph Loomis. 14 MR. DOYLE: Ed Doyle, Mestek, Inc. 15 MR. GRAVES: Ron Graves, Mestek, Inc. 16 MR. HALL: John Hall, National Rural 17 Electric Cooperative. 18 MR. GARNIGAN: Ron Garnigan, Pacific 19 Northwest National Laboratories. 20 MR.'BUSH: John Bush, Lawrence Berkeley 21 National Laboratories. 22 MR. STOOPS: John Stoops, Lawrence 23 Berkeley National Lab. 24 MR.ROSENQUIST: GregRosenquist, Lawrence 25 Berkeley National Lab. 

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### 1 there, I can't see, alsobehindthepost? Brian, will 2 you keep us going here? 3 

### MR. BENNINGER: Brian Benninger, 4 

### Department of Energy. 5 

### MR. MEYERS: Ed Meyers, Commissioner on 6 

### the DC Public Service Commission. 7 

### MR. HARAK: 

### Charles Harak. 8 

### MR. RENIE: Ed Renie. 9 

### MR. LINN: John Linn with Northeast 10 

### Commission on Efficiency Partnership. 11 

### MR. PAMPLIN: ChrisPamplin, AmericanGeo12 

### thermal. 13 

### MR. LOOMIS: Ralph Loomis. 14 

### MR. DOYLE: Ed Doyle, Mestek, Inc. 15 

### MR. GRAVES: Ron Graves, Mestek, Inc. 16 

### MR.' HALL: John Hall, National Rural 17 

### Electric Cooperative. 18 

### MR. GARNIGAN: Ron Garnigan, Pacific 19 

### Northwest National Laboratories. 20 

### MR.'BUSH: John Bush, Lawrence Berkeley 21 

### National Laboratories. 22 MR. STOOPS: John Stoops, Lawrence 23 BerkeleyNational Lab. 24 MR. ROSENQUIST: GregRosenquist, Lawrence 25 BerkeleyNational Lab.

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com14 1 MR. RAVEN: Mike Raven, Department of 2 Energy. 3 MR. DOUGHTERY: Brian Doughtery, National 4 Institute of Standards and Technology. 5 MR. LYLES: Carl Lyles, Department of 6 Energy. 7 MR. KENDALL: Mark Kendall, Arthur D. 8 Little. 9 MR. FOSTER: Chuck Foster, Edison Electric 10 Institute. 11 MR. GRUNDAGE: Don Grundage, Southern 12 Company. 13 MR. BROOKMAN: Thank you. Did everyone 14 get a chance to introduce him or herself that's not on 15 the conference call? Okay, let's go to the conference 16 call then. I'd like to start on the East Coast, 17 anybody calling in from the East Coast? 18 (Noresponse) 19 Then I'm moving to the Midwest, anybody 20 from the Midwest on the telephone call? 21 MR. FANN: Yes, Hunt Fann from Copeland 22 Corporation. 23 MR. BROOKMAN: And you're located? 24 MR. FANN: Ohio. 25 MR. BROOKMAN: Thank you for calling in 

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### 14 1 

### MR. RAVEN: Mike Raven, Department of 2 Energy. 3 

### MR. DOUGHTERY: BrianDoughtery, National 4 Institute of Standards and Technology. 5 

### MR. LYLES: Carl Lyles, Department of 6 Energy. 7 

### MR. KENDALL: Mark Kendall, Arthur D. 8 Little. 9 

### MR. FOSTER: ChuckFoster, EdisonElectric· 10 Institute. 11 MR. GRUNDAGE: Don Grundage, Southern 12 Company. 13 

### MR. BROOKMAN: Thank you. Did everyone 14 get a chancetointroducehimorherself that'snot on 15 theconferencecall? Okay, let'sgototheconference 16 

### call then. I'd like to start on the East Coast, 17 

### anybody calling in from the East Coast? 18 

### (No response) 19 

### Then I'm moving to the Midwest, anybody 20 

### from the Midwest on the telephone call? 21 MR. FANN: Yes, Hunt Fann from Copeland 22 Corporation. 23 24 25

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### MR. BROOKMAN: And you're located? MR. FANN: Ohio. MR. BROOKMAN: Thank you for calling in NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com15 1 and anybody else in the Midwest? How about the 2 Mountain States? Then I'm moving to the West Coast. 3 MR. GOLDSTEIN: David Goldstein, NRDC, San 4 Francisco. 5 MR. BROOKMAN: Thanks to both of you for 6 joining us on the conference call. Anybody else out 7 there in the West. Okay, having people on the 8 conference call makes this a little bit awkward. You 9 can't see what's going on although you can hear. I'm 10 just going to ask the two of you be assertive and kind 11 of wedge your way in and try and go with the protocol 12 that's being established here. I'll rely on your 13 judgment about how to do that. 14 And if it's not working, we'll talk to 15 through, okay? 16 MR. GOLDSTEIN: Okay, we understand. 17 MR. BROOKMAN: Okay. The format for 18 today's workshop is slightly different from any of the 19 workshop formats that you've observed in the past. 20 Does everybody have a copy of the agenda, the yellow 21 sheet? We're going to start off this morning with 22 general and hopefully summary comments, summary 23 comments, not complete written statements read into 24 the record if we're lucky, about the significant 25 issues that you would like to call to the Department 

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### 15 1 

### and anybody else ln the Midwest? How about the 2 Mountain States? Then I'm moving to the West Coast. 3 MR. GOLDSTEIN: DavidGoldstein, NRDC, San 4 Francisco. 5 

### MR. BROOKMAN: Thanks to both of you for 6 joining us on the conference call. Anybody else out 7 

### there in the West. Okay, having people on the 8 conference callmakes this a littlebit awkward. You 9 can't see what's going on althoughyou canhear. I'm 10 justgoingto askthe twoofyoube assertive andkind 11 of wedge yourway in and tryandgo with theprotocol 12 

### that's being established here. I'll rely on your 13 judgment about how to do that. 14 

### And if it's not working, we'll talk to 15 through, okay? 16 

### MR. GOLDSTEIN: Okay, we understand. 17 

### MR. BROOKMAN: Okay. The format for 18 today'sworkshopisslightlydifferentfromanyofthe 19 workshop formats that you've observed in the past. 20 Does everybody have a copy of the agenda, the yellow 21 

### sheet? We're going to start off this morning with 22 general and hopefully summary comments, summary 23 comments, not complete written statements read into 24 the record if we're lucky, about the significant 25 issues that you would like to call to the Department

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com16 1 of Energy's attention. 2 And so I'd ask for your indulgence and 3 consideration to try and keep it to five minutes. I'm 4 not going to police this second by second but as a 5 matter of courtesy, there are over 50 of you here in 6 this room. If everybody speaks for more than five 7 minutes or 10 minutes, we're going to be here a long, 8 long time today. And I would say not only will we be 9 a long time here but you will lose your audience 10 entirely. 11 So the purpose of the discussion and 12 exchange will not be fulfilled. I would ask for your 13 consideration, five minutes only this morning. We're 14 going to give everybody a chance to speak who wishes 15 to speak. The Department has asked for those to 16 identify themselves in advance and supply advanced 17 copy. For those that have not done so, and there's a 18 listing in my packet about the people that have done 19 that and I was going to go by the order of the listing 20 here to start this morning and then I thought we'd 21 hear from anybody else that wished to speak for five 22 minutes. That's my plan, I hope that works for 23 people. 24 From there -- we'll probably take a break 25 mid-morning somewhere but from there we will

-- 

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### 16 1 of Energy's attention. 2 And so I'd ask for your indulgence and 3 considerationtotryandkeep itto five minutes. I'm 4 not going to police this second by second but as a 5 matter of courtesy, there are over 50 of you here in 6 

### this room. If everybody speaks for more than five 7 minutes or 10 minutes, we're going tobe here a long, 8 long time today. And I would saynot onlywill we be 9 a long time here but you will lose your audience 10 entirely. 11 So the purpose of the discussion and 12 exchange will not be fulfilled. I would ask for your 13 consideration, five minutes onlythismorning. We're 14 going to give everybody a chance to speak who wishes 15 

### to speak. The Department has asked for those to 16 identify themselves in advance and supply advanced 17 copy. For those that have not done so, and there's a 18 listing in my packet about the people that have done 19 that and I was goingtogobythe orderof the listing 20 here to start this morning and then I thought we'd 21 hear from anybody else that wished to speak for five 22 minutes. That's my plan, I hope that works for 23 people. 24 Fromthere

-- we'llprobablytake a break 25 mid-morning somewhere but from there we will

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com17 1 there's a block of time in the agenda, it says 10:30 2 till noon, I'm not quite sure.what time we'll get 3 there, we'll go to a discussion of legal issues. I 4 know the Department has a brief statement that they 5 would like to make and then they hope to hear from 6 different individuals their comments. 7 We'll break for lunch midday and then 8 we'll talk about the proposed standards in perhaps 9 greater detail.' We'll take a break mid-afternoon and 10 then the end of the day, there's a segment set out for 11 any other issues that any person wishes to raise. 12 That's the time to raise issues that aren't either 13 legal issues or don't relate to the proposed 14 standards. We intend to adjourn today by 5:00. I'll 15 do everything in my power to make it possible for 16 people to get done at that time. Okay? Questions, 17 comments about the agenda before we proceed? Steve 18 Rosenstock? 19 MR. ROSENSTOCK: Just a quick one, Steve 20 Rosenstock, EEI. You say an hour and 15 minutes for 21 lunch, do you want to cut that back just to an hour to 22 23 MR. BROOKMAN: Leave that to me, okay? I 24 suspect we'll go an hour for lunch. It's a challenge 25 to do lunch here in much less than an hour, but we'll 

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### 17 1 there's a block of time in the agenda, it says 10:30 2 till noon, I'm not quite sure what time we'll get 3 

### there, we'll go to a discussion of legal issues. I 

### 4 know the Department has a brief statement that they 5 would like to make and then they hope to hear from 6 different individuals their comments. 7 

### We'll break for lunch midday and then 8 we'll talk about the proposed standards in perhaps 9 greaterdetail.· We'll take a breakmid-afternoon and 10 thenthe endof the day, there's a segment setout for 11 any other issues that any person wishes to raise. 12 That's the time to raise issues that aren't either 13 legal issues or don't relate to the proposed 14 standards. We intend to adjourn todayby 5:00. I'll 15 do everything in my power to make it possible for 16 

### people to get done at that time. Okay? Questions, 17 comments about the agenda before we proceed? Steve 18 Rosenstock? 19 

### MR. ROSENSTOCK: Just a quick one, Steve 20 Rosenstock, EEl. You sayan hour and 15 minutes for 21 lunch, doyouwant tocut thatbackjust to anhourto 22 23 

### MR. BROOKMAN: Leave that tome, okay? I 24 suspect we'll go an hour for lunch. It's a challenge 25 to do lunchhere inmuch less than anhour, but we'll

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com18 1 probably go an hour for lunch. May I ask everybody 2 here at the table here to turn your table tent toward 3 me so that I can read it. Thank you. 4 Over the span of these years when we've 5 been conducting appliance standards relatedworkshops, 6 some norms have emerged and I would ask also for your 7 consideration to observe these norms. I'm simply going 8 to ask that you speak one at a time, say your name for 9 the record. I'll be queuing people to speak and I'll 10 also be allowing some limited follow-on comments, but 11 please say your name for the record. 12 I'd ask as you go along here, listen as an 13 ally. The quality of the discussion hinges entirely 14 on the quality of the listening and sometimes the 15 listening isn't go great in some of these rooms. So 16 we'll see if we can set a new standard today. I'd 17 also ask for you to keep the focus here. Please turn 18 off your cell phones, please turn off your pagers. If 19 you have to have a sidebar conversation with someone, 20 please take it out of the room. It's very distracting 21 and we're trying to do some actual business here. 22 So if you would agree to adhere to those 23 ground rules, I'd greatly appreciate it. Other 24 questions or comments before we begin? I'm sorry. 25 Did anybody just joining us for the conference call? 

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### 18 1 

### probably go an hour for lunch. May I ask everybody 2 here at the table here to turnyour table tent toward 3 me so that I can read it. Thank you. 4 Over the span of these years when we've 5 beenconductingappliancestandardsrelatedworkshops, 6 some norms have emergedand I would ask also for your 7 considerationtoobservethesenorms. I'msimplygoing 8 to askthatyou speakone at a time, sayyourname for 9 the record. I'llbe queuingpeople to speak and I'll 10 alsobe allowing some limited follow-on comments, but 11 please sayyour name for the record. 12 I'daskasyougo alonghere, listenas an 13 ally. The quality of the discussion hinges entirely 14 on the quality of the listening and sometimes the 15 listening isn't go great in some of these rooms. So 16 we'll see if we can set a new standard today. I'd 17 also ask for you tokeep the focus here. Please turn 18 offyourcellphones, pleaseturnoffyourpagers. If 19 you have tohave a sidebarconversationwith someone, 20 pleasetake itout oftheroom. It'sverydistracting 21 and we're trying to do some actual business here. 22 So if you would agree to adhere to those 23 

### ground rules, I'd greatly appreciate it. Other 24 

### questions or comments before we begin? I'm sorry. 25 Did anybodyjust joining us for the conference call?

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### R. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com19 1 Okay, so far as I know we have two people on the 2 conference call and we'll just find a way to get those 3 comments in as we go. Okay, let's start. 4 The copy that I have, I think most of you 5 have it in your packet, has an order listed here and 6 it's alphabetical for the comments that have been 7 received by the Department of Energy and the Alliance 8 to Save Energy is the first person on my list, if you 9 would, please, five minutes, Bill Prindle. 10 MR. PRINDLE: Thanks, Bill Prindle, 11 Alliance to Save Energy. 12 MR. BROOKMAN: Excuse me, I misspoke. 13 Michael McCabe has opening remarks. I didn't know 14 that, I'm sorry. 15 MR. McCABE: Just to set the stage for 16 this part of the public hearing, I'd like to restate 17 some of the ground rules that we've tried to establish 18 for this part of the session. So please limit the 19 statements to five minutes. We have about 18 or more 20 persons who requested to speak. That's 90 minutes and 21 we want to have those statements uninterrupted and 22 allow time after all of those prepared statements have 23 been made for participants' questioning of each other 24 and further adding to the comments. 25 Those submitting -- the sequence of 

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### 19 1 Okay, so far as I know we have two people on the 2 conferencecallandwe'lljust finda waytoget those 3 comments in as we go. Okay, let's start. 4 The copythat I have, I thinkmost of you 5 have it inyour packet, has an order listed here and 6 it's alphabetical for the comments that have been 7 receivedbythe Department of Energyand theAlliance 8 to Save Energy is the first person onmy list, ifyou 9 would, please, five minutes, Bill Prindle. 10 

### MR. PRINDLE: Thanks, Bill Prindle, 11 Alliance to Save Energy. 12 MR. BROOKMAN: Excuse me, I misspoke. 13 

### Michael McCabe has opening remarks. I didn't know 14 that, I'm sorry. 15 

### MR.·McCABE: Just to set the stage for 16 this part of the public hearing, I'd like to restate 17 someofthegroundrules thatwe'vetriedtoestablish 18 for this part of the session. So please limit the 19 statements to five minutes. We have about 18 ormore 20 personswho requestedtospeak. That's 90 minutesand 21 we want to have those statements uninterrupted and 22 allowtimeafterallofthosepreparedstatementshave 23 beenmade forparticipants' questioningof eachother 24 and further adding to the comments. 25

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### Those submitting the sequence of NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com20 1 speakers is arranged in this order. Those submitting 2 an advanced copy of general statements which -- and 3 this includes conference call participants, and 4 they're in alphabetic order by organization. The 5 second group of speakers is those requesting to speak 6 but those that did not provide the comments in time 7 for us to copy and then the third group is any other 8 speakers. 9 And after these formal statements are 10 read, we'd like to have a general discussion by the 11 participants. 12 MR. BROOKMAN: Thank you. Thanks, 13 Michael. Let's start. Bill Prindle. 14 MR. PRINDLE: Thanks. Bill Prindle, 15 Alliance to Save Energy. I just briefly wanted to 16 note for the record that concurrent litigation may 17 render this whole proceeding moot but we nonetheless 18 appreciate the opportunity to comment on the 19 substantive issues. I'd just really like to focus on 20 the policy context in which this proceeding is taking 21 place. 22 On October 5th, 2000, the Department 23 issued its previous notice of proposed rule on this 24 issue and I just want to take off some of the things 25 that have happened in the last 12 months. We've seen 

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### 20 1 speakers is arranged inthis order. Those submitting 2 an advanced copy of general statements which

-- and 3 this includes conference call participants, and 4 

### they're in alphabetic order by organization. The. 5 secondgroupof speakers is those requesting to speak 6 but those that did not provide the comments in time 7 for us to copy and then the third group is any other 8 speakers. 9 

### And· after these formal statements are 10 read, we'd like to have a general discussion by the 11 participants. 12 MR. BROOKMAN: Thank you. Thanks, 13 Michael. Let's start. Bill Prindle. 14 MR. PRINDLE: Thanks. Bill Prindle, 15 Alliance to Save Energy. I just briefly wanted to 16 note for the record that concurrent litigation may 17 render this whole proceeding moot but we nonetheless 18 

### appreciate the opportunity to comment on the 19 substantive issues. I'djustreally like to focus on 20 the'policycontext inwhich thisproceeding is taking 21 place. 22 On October 5th, 2000, the Department 23 issued its previous notice of proposed rule on this 24 issue and I just want to take off some of the things 25 that have happened inthe last 12 months. We've seen

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NoW. WASHINGTON, D.C. 20005-3701 www.nealrgross.com21 1 the highest electricity and natural gas prices ever 2 experienced in the North American market. We've seen 3 unprecedented FERC action to stabilize prices in 4 wholesale markets. We've seen the gravest reliability 5 problems the U.S. has faced for many years. We've 6 seen the Secretary of Energy force to invoke the 7 Federal Power Act to force power sellers to continue 8 selling power into the western markets. 9 We've seen emergency electricity 10 legislation introduced on Congress. We've seen the 11 Senate Foreign Relations Committee, including Jesse 12 Helms, for the record, vote unanimously to urge the 13 Administration to develop new substantive proposals to 14 reduce greenhouse gas emissions and we've seen the 15 President's own energy plan call for appliance 16 standards as a way to moderate growth in electricity 17 demand. And as many of us who where sitting in this 18 room on September 11th found to our shock and horror, 19 we've now got a wholly new and unprecedented challenge 20 facing our country. 21 While we're still recovering from the 22 emotional and other effects of that attack, one thing 23 that is sure is that the cost of energy will increase 24 to secure our energy infra-structure and under these 25 conditions, we think that at the very least, the 

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### 21 1 the highest electricity and natural gas prices ever 2 experienced intheNorthAmericanmarket. We've seen 3 unprecedented FERC action to stabilize prices in 4 wholesalemarkets. We've seenthegravestreliability 5 

### problems the U.S. has faced for many years. We've 6 seen the Secretary of Energy force to invoke the 7 Federal Power Act to force power sellers to continue 8 sellingpower into the western markets. 9 

### We've seen emergency electricity 10 legislation introduced on Congress. We've seen the 11 Senate Foreign Relations Committee, including Jesse 12 Helms, for the record, vote unanimously to urge the 13 Administrationtodevelopnewsubstantiveproposalsto 14 reduce greenhouse gas emissions and we've seen the 15 President's own energy plan call for appliance 16 standards as a way to moderate growth in electricity 17 demand. And as many of us who where sitting in this 18 room on September 11thfound to our shock and horror, 19 we'venowgota whollynewandunprecedentedchallenge 20 facing our country. 21 While we're still recovering from the 22 emotional andothereffects of that attack, one thing 23 that is sure is that the cost of energywill increase 24 to secure our energy infra-structure and under these 25 conditions, we think that at the very least, the

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 www.nealrgross.com22 1 Department has to re-open the analysis of this rule, 2 re-evaluate at least the future cost of electricity 3 and otherwise re-evaluate its actions in this policy 4 context. And as I look at the conditions we are now 5 facing in October 2001 compared to the conditions we 6 faced in October 2000, I think the appropriate action 7 for the Department would simply -- would be to 8 withdraw this proposed rule. Thank you. 9 MR. BROOKMAN: Thank you. The American 10 Council for an Energy Efficient Economy. 11 MR. SACHS: I'm Harvey Sachs from the 12 American Council for an Energy Efficient Economy. I 13 am new to this proceeding. Our organization has been 14 involved over the last 20 years. I, myself, am 15 delighted to see many of my colleagues I've worked 16 with in ARI matters and elsewhere. 17 We believe that this NOPR is inconsistent 18 with the clear words of the Bush-Cheney National 19 Energy Policy. We believe that the cost projections 20 are wrong. I'm going to depart from my prepared text 21 and just go to the summary, one or two other points. 22 One, we have been advised by legal experts 23 that the Department's efforts to overturn the final 24 rule are unlikely to withstand legal challenge. Trial 25 Standard 4, your 14, is technologically feasible and 

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### 22 1 Department has to re-open the analysis of this rule, 2 re-evaluate at least the future cost of electricity 3 and otherwise re-evaluate its actions in this policy 4 context. And as I look at the conditions we are now 5 facing in October 2001 compared to the conditions we 6 faced inOctober 2000, I think the appropriate action 7 

### for the Department would simply would be to 8 withdraw this proposed rule. Thank you. 9 

### MR. BROOKMAN: Thank you. The American 10 Council for an Energy Efficient Economy. 11 MR. SACHS: I'm Harvey Sachs from the 12 American Council for an Energy Efficient Economy. I 

### 13 am new to thisproceeding. Our organizationhas been 14 involved over the last 20 years. I, myself, am 15 delighted to see many of my colleagues I've worked 16 with inARI matters and elsewhere. 17 We believethat thisNOPR is inconsistent l8 

### with the clear words of the Bush-Cheney National 19 Energy Policy. We believe that the cost projections 20 are wrong. I'mgoing to depart from my prepared text 21 and just go to the summary, one or two other points. 22 One, we havebeenadvisedbylegalexperts 23 that the Department's efforts to overturn the final 24 ruleareunlikelytowithstandlegalchallenge. Trial 25 Standard 4, your 14, is technologically feasible and

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### NEALR GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW WASHINGTON, D.C. 20005-3701 www.nealrgross.com 

# r23 1 cost effective. The retreating to the much lower 2 savings of Trial Standard 2 violates the clear meaning 3 of the law. The sacrifice is enormous consumer 4 benefits, at least a billion dollars and has 5 manufacturer impacts equivalent to those in SEER 12. 6 I think it's important to stress that the existence of 7 large numbers of markets -- of models on the market 8 today and their construction demonstrates that SEER 13 9 is not rocket science. It is readily achievable with 10 conventional technologies the same as those utilized 11 for SEER 12. 12 We believe the Department's equipment 13 price projection methods are defective. They're not 14 tested or calibrated by the record of price changes 15 following standards improvements in this industry and 16 its siblings. The result is that we are quite 17 convinced that the Department's predictions are too 18 high. The Department's electricity cost projections 19 fail to recognize significant cooling season consumer 20 price increases that are accompanying restructuring of 21 the electrical utility industry. Mr. Eckman will 22 address this point a little bit later. 23 The Department's treatment of issues for 24 the industry has many defects, including those 25 concerning consolidation, firms leaving the market, 

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### cost effective. The retreating to the much lower 2 savingsofTrialStandard2violatestheclearmeaning 3 

### of the law. The sacrifice is enormous consumer 4 

### benefits, at least a billion dollars and has 5 manufacturer impacts equivalent to those in SEER 12. 6 I think it'simportantto stressthattheexistenceof 7 large numbers of markets

-- of models on the market 8 todayandtheirconstructiondemonstratesthatSEER 13 9 is not rocket science. It is readilyachievable with 10 conventional technologies the same as those utilized 11 for SEER 12. 12 We believe the Department's equipment 13 price projection methods are defective. They're not 14 tested or calibrated by the record of price changes 15 following standards improvements inthis industryand 16 

### its siblings. The result is that we are quite 17 convinced that the Department's predictions are too 18 high. The Department's electricity cost projections 19 fail torecognize significant cooling seasonconsumer 20 priceincreasesthatareaccompanyingrestructuringof 21 the electrical utility industry. Mr. Eckman will 22 address this point a llttle bit later. 23 The Department's treatment of issues for 24 

### the industry has many defects, including those 25 concerning consolidation, firms leaving the market,

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com24 1 cumulative regulatory burden, options available for 2 higher operating cost firms and impacts on low volume 3 manufacturers. We will see today the Department's 4 assertions differential impact on low income consumers 5 ignores the fact that the majority of these people are 6 tenants whose only hope from relief from high bills 7 comes from better equipment which happens to mean 8 better standards. 9 The Department's argument that higher 10 standards would lead to switching from heat pumps to 11 resistance heating follows from its other errors in 12 economic analysis. If anything, this issue argues for 13 adequate building codes, state regulations that 14 minimize resistive heat. The Department's January 15 22nd, final rule represented a reasonable solution for 16 the country and all stakeholders. If there is to be 17 any re-opening, any opportunity for change, we should 18 add a minimum requirement for high temperature 19 performance, EER at 95 degrees, and we should add a 20 requirement for adaptive control. Both are cost 21 effective. 22 I believe we understand the politics of 23 this NOPR. However, we're gravely disappointed in the 24 action. It appears to be illegal. It's based on 25 severely flawed technical assumptions, bad policy and 

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### 1 cumulative regulatory burden, options available for 2 higher operatingcost·firms and impacts on lowvolume 3 

### manufacturers. We will see today the Department's 4 assertionsdifferentialimpactonlowincomeconsumers 5 ignoresthe fact thatthemajorityofthesepeopleare 6 

### tenants whose only hope from relief from high bills 7 comes from better equipment which happens to mean 8 better standards. 9 

### The Department's argument that higher 10 standards would lead to switching from heat pumps to 11**res~stance** 

### heating follows from its other errors in 12 economicanalysis. Ifanything, this issueargues for 13 adequate building codes, state regulations that 14 

### minimize resistive heat. The Department's January 15 22nd, finalrulerepresenteda reasonable solutionfor 16 

### the country and all stakeholders. If there is to be 17 anyre-opening, anyopportunityfor change, we should 18 add a minimum requirement for high temperature 19 performance, EER 

### at 95 degrees, and we should add a 20 requirement for adaptive control. Both are cost 21 effective. 22 I believe we understand the politics of 23 thisNOPR. However, we'regravelydisappointedinthe 24 

### action. It appears to be illegal. It's based on 25 severelyflawedtechnical assumptions, badpolicyand

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com25 1 sends a strong signal that the Administration is not 2 taking the energy crisis as a serious problem. For 3 whatever reason, the Administration has attempted to 4 walk away from 30 percent of the extremely cost 5 effective capacity and energy savings at the SEER 13 6 level. We're saddened by this action by our 7 Government at this time and trust it will be abandoned 8 before it causes further harm. 9 MR. BROOKMAN: Thank you. I'd like to 10 thank both of the lead speakers or that is both of the 11 first two speakers for the discipline they exhibited. 12 Let's proceed with the American Geothermal DX. Your 13 name, please. 14 MR. PAMPLIN: Good morning, I'm Chris 15 Pamplin, sales manager with American Geothermal DX in 16 Murphysborough, Tennessee. We manufacture direct 17 exchange systems which are actually twice as efficient 18 as most of the air conditioning systems which go in 19 homes today. However, I'm here to share with you my 20 views relative to the need for the 13 SEER standard 21 based on my 17 years as an HVAC contractor. 22 In the aftermath of the September 11th 23 terrorist attack, there are many uncertainties 24 relative to the economy and the cost of energy. 12 25 versus 13 SEERdebate is an important, albeit relative 

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### 25 1 sends a strong signal that the Administration is not 2 

### taking the energy crisis as a serious problem. For 3 whatever reason, the Administration has attempted to 4 walk away from 30 percent of the extremely cost 5 effective capacity and energy savings at the SEER 13 6 

### level. We're saddened by this action by our 7 Government at thistimeandtrust itwillbe abandoned 8 before it causes further harm. 9 

### MR. BROOKMAN: Thank you. I'd like to 10 thankbothof the lead speakersorthat isbothof the 11 first two speakers for the discipline theyexhibited. 12 Let's proceed with the American Geothermal DX. Your 13 name, please. 14 

### MR. PAMPLIN: Good morning, I'm Chris 15 Pamplin, salesmanagerwithAmericanGeothermal DX in 16 

### Murphysborough, Tennessee. We manufacture direct 17 exchange systemswhichareactuallytwiceasefficient 18 as most of the air conditioning systems which go in 19 homes today. However, I'm here to share with you my 20 views relative to the need for the 13 SEER standard 21 based on my 17 years as an HVAC contractor. 22 In the aftermath of the September 11th 23 terrorist attack, there are many uncertainties 24 

### relative to the economy and the cost of energy. 12 25 versus 13 SEERdebate isanimportant, albeitrelative

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 www.nealrgross.com26 1 small part of a comprehensive energy plan which will 2 be forged in the near future. Many representatives 3 have been quoted today and previously relative to the 4 impact on the consumer and subsequent employment if 5 this 13 SEER standard is implemented. 6 Let's look at what we do know fromvarious 7 sources and why certain manufacturers might be 8 favoring a 12 SEER standard. A 13 SEER air 9 conditioner or heat pump is produced today by the vast 10 majority of manufacturers certifying their equipment 11 to ARI standards. According to the DOE the average 12 difference in cost between a 13 and 12 SEER unit will 13 be approximately $122.00 and according to the DOE this 14 additional cost will take only 1.2 years longer to 15 recoup. 16 Industry sources have indicated that the 17 13 SEER standard would equate to 138 less power plants 18 being built over the ensuing 20 to 30 years. Ted 19 Rees, president of ARI, has said that the dynamics of 20 the marketplace will actually create greater savings 21 with the 12 SEER standard. He believes that this will 22 be a result of deferred replacement of older, less 23 efficient systems. Based on my experience as a 24 contractor, when the government implemented the 10 25 SEER standard in 1992, we rarely experienced such 

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### 26 1 

### small part of a comprehensive energy plan which will 2 

### be forged in the near future. Many representatives 3 have beenquoted todayandpreviouslyrelative to the 4 

### impact on the consumer and subsequent employment if 5 this 13 SEER standard is implemented. 6 

### Let'slookatwhatwe doknowfromvarious 7 

### sources and why certain manufacturers might be 8 

### favoring a 12 SEER standard. A 13 SEER air 9 

### conditionerorheatpumpisproducedtodaybythevast 10 majority of manufacturers certifying their equipment 11 

### to ARI standards. According to the DOE 

### the average 12 difference in cost between a 13 and 12 SEER unit will 13 beapproximately$122.00 andaccordingtotheDOE 

### this 14 additional cost will take only 1.2 years longer to 15 recoup. 16 

### Industry sources have indicated that the 17 13 SEER standardwouldequateto 138 lesspowerplants 18 being built over the ensuing 20 to 30 years. Ted 19 Rees, president of ARI, has said that the dynamics of 20 the marketplace will actually create greater savings 21 withthe 12 SEER standard. He believes that thiswill 22 be a result of deferred replacement of older, less 23 efficient systems. Based on my experience as a 24 contractor, when the government implemented the 10 25 SEER standard in 1992, we rarely experienced such

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com27 1 deferred replacement decisions. 2 Critics of the 13 SEER standard have 3 routinely expressed that it would unfairly punish 4 working families and the elderly. We're all punished 5 when utility costs skyrocket 20 to 120 percent in less 6 than a year. When a low income family sees their 7 heating bill go from 150 to 300 per month, the last 8 thing on their mind is whether a replacement unit will 9 cost $122.00 more in 2006 and beyond. 10 Based on Government data, most low income 11 families with central air conditioners or heat pumps 12 rent their homes. Thus, their landlord will bear the 13 expense of a 13 SEER standard while they would reap 14 the benefit of lower operating cost. Some critics 15 have indicated that the 13 SEER equipment will have a 16 somewhat larger footprint than a 12 SEER condensing 17 unit or evaporator coil and that would present 18 substantial additional cost for a contractor. My 19 experience as a contractor has been that any cost 20 difference would be minimal. 21 There's much room for improvement of 22 efficiency of existing central air conditioners and 23 heat pumps. Numerous industry studies have documented 24 that upwards of 74 percent of such systems are 25 improperly charged costing consumers 17 percent plus 

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### 27 1 deferred replacement decisions. 2 

### Critics of the 13 SEER standard have 3 routinely expressed that it would unfairly punish 4 working families andthe elderly. We're all punished 5 whenutilitycosts skyrocket 20 to 120percent inless 6 

### than a year. When a low income family sees their 7 

### heating bill go from 150 to 300 per month, the last 8 thingontheirmindiswhethera replacementunitwill 9 cost $122.00 more in 2006 and beyond. 10 BasedonGovernment data, most low income 11 families with central air conditioners or heat pumps 12 rent theirhomes. Thus, their landlordwill bear the 13 expense of a 13 SEER standard while they would reap 14 

### the benefit of'lower operating cost. Some critics 15 have indicatedthat the 13 SEER equipment will have a 16 somewhat larger footprint than a 12 SEER condensing 17 unit or evaporator coil and that would present 18 

### substantial additional cost for a contractor. My 

### 19 experience as a contractor has been that any cost 20 difference would be minimal. 21 There's much room for improvement of 22 efficiency of existing central air conditioners and 23 heatpumps. Numerousindustrystudieshavedocumented 24 that upwards of 74 percent of such systems are 25 improperly charged costing consumers 17 percent plus

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 www.nealrgross.com28 1 in higher utility bills. Also over 93 percent of 2 existing homes have substantial duct leakage and 3 improper air flow resulting in 25 percent plus higher 4 energy costs, poor indoor air quality and possible 5 health hazards. 6 Lower income owners of central systems 7 tend to be the recipients of more than their share of 8 these problems. Now, why would many of our larger air 9 conditioning manufacturers be in favor of the 12 SEER 10 standard? The high end market is presently dominated 11 by the likes of Carrier, Trane, Lennox and York. If 12 their high efficiency unit becomes the builder grade 13 unit of 2006, they could possibly lose substantial 14 market share and gross margin in a shift to 15 manufacturers that enjoy a greater share of the low 16 end market. 17 John Malloy, Carrier's president of 18 residential and light commercial systems in his speech 19 at Comfortech 2001 in Nashville on September 5th, 20 showed slides reflecting the 13 SEER standards 21 projected impact on their profit margin and lower 22 number of units manufactured. I personally believe 23 they are selling their marketing department short. As 24 in 1992, the high end segment of our business will 25 rachet up. These manufacturers will continue to 

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### 28 1 

### in higher utility bills. Also over 93 percent of 2 existing homes have substantial duct leakage and 3 improper air flow resultingin 25 percentplus higher 4 energy costs, poor indoor air quality and possible 5 health hazards. 6 

### Lower income owners of central systems 7 

### tend tobe the recipients of more than their share of 8 theseproblems. Now, whywouldmanyofourlargerair 9 conditioningmanufacturersbe in favor of the 12 SEER 10 standard? The highendmarket ispresentlydominated 11 by the likes of Carrier, Trane, Lennox and York. If 

### 12 their high efficiencyunit becomes the builder grade 13 unit of 2006, they could possibly lose substantial 14 market share and gross margin in a shift to 15 manufacturers that enjoy a greater share of the low 16 end market. 17 

### John Malloy, Carrier's president of 18 residentialandlightcommercial systemsinhis speech 19 at Comfortech 2001 in Nashville on September 5th, 20 showed slides reflecting the 13 SEER standards 21 projected impact on their profit margin and lower 22 number of units manufactured. I 

### personally believe 23 theyare sellingtheirmarketingdepartment short. As 24 in 1992, the high end segment of our business will 25 rachet up.

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### These manufacturers will continue to NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com29 1 dominate the high end market, both in terms of 2 consumer awareness and dealer training relative to 3 value added sales professionalism. 4 We can't conserve our way out of needing 5 to find more energy resources or producing more power 6 plants. I have confidence that an energy plan as 7 presented will have provisions for lower income 8 families to cope with higher costs of utilities and at 9 a cost to upgrade or replace their present central 10 systems. I'm also hopeful that such a plan will 11 include tax incentives for the greater utilization of 12 renewable energy sources such as geothermal heat pump 13 systems. 14 There is no energy fairness to rolling 15 black-outs or skyrocketing utility costs. What if 16 California and other areas knew five years ago that 17 they would experience the energy crisis of the last 18 year? Would they have pushed then for greater 19 conservation? You have the decision before you now to 20 decide efficiency standards for 2006 and beyond. I 21 hope that you'll see the long-range benefits of the 13 22 SEER standard. Thank you for the opportunity to 23 present my views. 24 MR. BROOKMAN: Thank you. That was five 25 minutes. The Consumer Federation of America is next. 

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### 1 dominate the high end market, both in terms of 2 consumer awareness and dealer training relative to 3 value added sales professionalism. 4 We can't conserve our way out of needing 5 to findmore energyresources orproducingmorepower 6 

### plants. I have confidence that an energy plan as 7 presented will have provisions for lower income 8 families tocopewithhighercostsofutilitiesandat 9 a cost to upgrade or replace their present central 10 systems. I'm also hopeful that such a plan will 11 include tax incentives for the greaterutilizationof 12 renewable energysources suchas geothermalheatpump 13 systems. 14 

### There is no energy fairness to rolling 15 

### black-outs or skyrocketing utility costs. What if 16 California and other areas knew five years ago that 17 they would experience the energy crisis of the last 18 

### year? Would they have pushed then for greater 19 conservation? Youhavethedecisionbeforeyounowto 20 decide efficiency standards for 2006 and beyond. I 

### 21 hopethatyou'll seethe long-rangebenefitsofthe 13 22 

### SEER standard. Thank you for the opportunity to 23 present my views. 24 

### MR. BROOKMAN: Thank you. That was five 25 minutes. The ConsumerFederationofAmerica is next.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com30 1 MS. HALL-CRAWFORD: Good morning. My name 2 is Mel Hall-Crawford. Can you hear me? Sorry. I'm 3 pleased to be here on behalf of Consumer Federation of 4 America. CFA is a non-profit association of some 285 5 pro-consumer groups that was founding in 1968 to 6 advance the consumer interest through advocacy and 7 education. We appreciate the opportunity to be here, 8 to comment on the Department's action to issue a 9 supplemental proposed rule and on its withdrawal of 10 the final rule issued on January 22nd. 11 CFA has long supported increased energy 12 efficiency standards as a means to help lower 13 consumers' energy bills and to benefit the 14 environment. We were disappointed with DOE's decision 15 to roll back the January 22nd rule and reopen the 16 issue. As indicated inprior communications with DOE, 17 we support the higher SEER 13 standard for residential 18 central air conditioners. Such a standard would seem 19 consistent with the Administration's goal of reducing 20 energy consumption. 21 CFA is sensitive to the issue of the 22 increase in the purchase price or first cost of the 23 central air conditioner, the payback period and the 24 impact on low to moderate income household. We 25 understand that DOE has to project conservative cost 

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### 30 1 

### MS. HALL-CRAWFORD: Goodmorning. Myname 2 

### is Mel Hall-Crawford. Can you hear me? Sorry. I'm 

### 3 pleasedtobehereonbehalfofConsumerFederationof 4 America. CFA is a non-profit associationof some 285 5 pro-consumer groups that was founding in 1968 to 6 advance the consumer interest through advocacy and 7 education. We appreciate the opportunitytobe here, 8 to comment on the Department's action to issue a 9 supplemental proposed rule and on its withdrawal of 10 the final rule issued on January 22nd. 11 CFA has long supported increased energy 12 efficiency standards as a means to help lower 13 consumers' energy bills and to benefit the 14 environment. WeweredisappointedwithDOE'sdecision 15 to roll back the January 22nd rule and reopen the 16 issue. As indicatedinpriorcommunicationswithDOE, 17 we support thehigherSEER 13 standardforresidential 18 central air conditioners. Such a standardwould seem 19 consistentwiththeAdministration's goal of reducing 20 energy consumption. 21 CFA is sensitive to the issue of the 22 increase in the purchase price'or first cost of the 23 central air conditioner, the payback period and the 24 impact on low to moderate income household. We 25 understand that DOE has to project conservative cost

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com31 1 estimates. However, we are very encouraged by the 2 American Council for an Energy Efficient Economy's 3 projection that the average model under a SEER 13 4 standard would only increase by $170.00. Based on 5 current national average electricity prices, average 6 cooling season savings from the improved standard 7 would be about $50.00 a year so the increased cost 8 would be paid back in about three and a half years. 9 As with past standards, we are optimistic 10 that economies of scale andproduction and competitive 11 forces will result in lower cost of the more efficient 12 equipment as compared to three implementation 13 estimates. Research has shown that in the case of new 14 efficiency standards for refrigerators in 1990 and 15 1993, the significant cost increases that were feared 16 did not materialize. It has also been noted that 17 after 1992 when the SEER 10 standard for central air 18 conditioners went into effect, similar concerns about 19 substantial cost increases were not borne out by 20 actual experience. 21 We believe the market will respond 22 similarly in this case. We are encouraged that one 23 major air conditioning manufacturer has come out 24 strongly in favor of SEER 13 and is confident that 25 quote, "the market will drive prices down and make the 

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### 31 1 

### estimates. However, we are very encouraged by the 2 American Council for an Energy Efficient Economy's 3 projection that the average model under a SEER 13 4 

### standard would only increase by $170.00. Based on 5 current national average electricityprices, average 6 

### cooling season savings from the improved standard 7 would be about $50.00 a year so the increased cost 8 

### wouldbe paidback in about three and a half years. 9 

### As withpast standards, we are optimistic 10 thateconomiesof scaleandproductionandcompetitive 11 

### forceswillresult inlowercostofthemoreefficient 12 equipment as compared to three implementation 13 estimates. Researchhas shownthat inthe caseofnew 14 efficiency standards for refrigerators in 1990 and 15 1993, the significant cost increases that were feared 16 

### did not materialize. It has also been noted that 17 after 1992 when the SEER 10 standard for central air 18 conditionerswent intoeffect, similarconcerns about 19 substantial cost increases were not borne out by 20 actual experience. 21 We believe the market will respond 22 similarly in this case. We are encouraged that one 23 major air conditioning manufacturer has come out 24 strongly in favor of SEER 13 and is confident that 25 quote, "themarketwilldrivepricesdownandmakethe

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com32 1 more efficient equipment affordable for all *2 consumers". CFA believes that low income households 3 will benefit more from a SEER 13 standard because 4 those that have central air are more likely to live in 5 very warm summer climates where air conditioning is 6 virtually a necessity and they are probably paying 7 higher electricity prices to run their units. 8 A greater number of low income families 9 rent their homes as compared to the national average. 10 In the case of rental housing, it is likely that 11 landlords will under-invest when installing a new air 12 conditioner and choose the least expensive and less 13 efficient model. This means higher energy bills for 14 low income renters. Conversely a more efficient air 15 conditioner means lower energy bills for a segment of 16 the population that pays a disproportionate share of 17 its income on energy cost and for whom the savings 18 makes a bigger difference. 19 As for low income families who own their 20 home, the payback period for a more efficient air 21 conditioner will be faster since such families are 22 likely to live in an area with very warm summer 23 climate and higher energy prices in the summer due to 24 increases in peak demand. Again, we are confident 25 that the purchase price of a SEER 13 central air 

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### 32 1 more efficient equipment affordable for all ·2 consumers". CFA believes that low income households / 

### 3 will benefit more from a SEER 13 standard because 4 thosethathavecentral airaremore likelytolive in 5 very warm summer climates where air conditioning is 6 virtually a necessity and they are probably paying 7 higher electricityprices to run their units. 8 A greater number of low income families 9 rent theirhomes as comparedto the national average. 10 In the case of rental housing, it is likely that 11 landlords will under-invest when installinga newair 12 conditioner and choose the least expensive and less 13 efficient model. This means higher energy bills for 14 

### lowincome renters. Conversely a more efficient air 15 conditionermeans lower energybills for a segment of 16 the population that pays a disproportionate share of 17 its income on energy cost and for whom the savings 18 makes a bigger difference. 19 As for low income families who own their 20 home, the payback period for a more efficient air 21 conditioner will be faster since such families are 22 likely to live in an area with very warm summer 23 climate andhigher energyprices inthe summerdue to 24 

### increases ln peak demand. Again, we are confident 25 that the purchase price of a SEER 13 central air

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW WASHINGTON, D.C. 20005·3701 www.nealrgross.com33 1 conditioning unit will be lower than expected and 2 therefore, the energy savings will be realized even 3 faster by all homeowners who purchase the central air 4 conditioner post-2006. 5 In closing, CFA wishes to reiterate its 6 strong support for a SEER 13 standard for central air 7 conditioners. We believe that based on historical 8 experience when new standards for appliances were 9 implemented and the confidence of a major air 10 conditioning manufacturer that concerns about 11 substantial price increases will be unfounded. We 12 also believe that low income households with central 13 air conditioning are in very warm climates and 14 necessitate central air and the majority of them are 15 renters and, therefore, are unlikely to be paying for 16 the new equipment. These consumers pay a larger 17 proportion of their income on energy costs, will 18 benefit even more through reduced energy bills. 19 Rising energy prices and threats of energy 20 shortages point to the overwhelming need for strong 21 efficiency standards for air conditioners so that peak 22 demand is reduced. Overall this will lower electric 23 bills for consumers, avert energy shortages during 24 extremely warm weather and displace the need for new 25 power generation units. With a SEER 13 both consumers 

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### 33 1 conditioning unit will be lower than expected and 2 therefore, the energy savings will be realized even 3 fasterbyall homeowners who purchase the central air 4 conditionerpost-2006. 5 

### In closing, CFA wishes to reiterate its 6 strong support for a SEER 13 standard for central air 7 

### conditioners. We believe that based on historical 8 experience when new standards for appliances were 9 implemented and the confidence of a major air 10 conditioning manufacturer that concerns about 11 substantial price increases will be unfounded. We 12 also believe that low income households with central 13 air conditioning are in very warm climates and 14 necessitate central air and the majority of them are 15 renters and, therefore, areunlikelytobepaying for 16 the new equipment. These consumers pay a larger 17 proportion of their income on energy costs, will 18 benefit even more through reduced energybills. 19 Risingenergypricesandthreatsofenergy 20 shortages point to the overwhelming need for strong 21 efficiencystandardsforairconditionerssothatpeak 22 demand is reduced. Overall this will lower electric 23 bills for consumers, avert energy shortages during 24 extremelywarm weather and displace the need for new 25 powergenerationunits. Witha SEER 13 bothconsumers

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com34 1 and environment will benefit more over the long run. 2 Thank you for considering our views. 3 MR. BROOKMAN: Thank you. The Council of 4 State Governments. 5 MR. McCABE: This is Mike E. McCabe. The 6 Council of State Governments' statement is in the 7 package from Kyle Rabin. Mr. Rabin called me 8 yesterday informing me that he wasn't going to be able 9 to attend the meeting. Mr. Rabin works at Five World 10 Trade Center and his building collapsed along with the 11 others and so he is living -- working out of his 12 house, I believe. 13 MR. BROOKMAN: Okay, thank you. Let's 14 press on then with the Edison Electric Institute. 15 MR. ROSENSTOCK: You're not going to go in 16 order of the alphabetical order? Okay, never mind, 17 I'll wake up. 18 MR. BROOKMAN: Good morning to you if 19 you're not ready. 20 MR. ROSENSTOCK: I'm ready. I'm sorry. 21 I'd better go very quickly now. The Edison Electric 22 Institute appreciates the opportunity to provide a 23 statement at this workshop for residential central air 24 conditioners and heat pump energy efficiency 25 standards. EEI is the association of the United 

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### 1 and environment will benefit more over the long run. 2 Thank you for considering our views. 3 

### MR. BROOKMAN: Thankyou. The Council of 4 State Governments. 5 

### MR. McCABE: This isMike E. McCabe. The 6 Council of State Governments' statement is in the 7 

### package from Kyle Rabin. Mr. Rabin called me 8 yesterdayinformingme thathewasn't goingtobeable 9 to attendthe meeting. Mr. Rabinworks at FiveWorld 10 TradeCenterandhisbuildingcollapsedalongwiththe 11 others and so he is living

- - working out of his 12 house, I believe. 13 

### MR. BROOKMAN: Okay, thank you. Let's 14 press on then with the Edison Electric Institute. 15 

### MR. ROSENSTOCK: You'renotgoingtogoin 16 order of the alphabetical order? Okay, never mind, 17 I'll wake up. 18 

### MR. BROOKMAN: Good morning to you if 19 you're not ready. 20 

### MR. ROSENSTOCK: I'm ready. I'm sorry. 21 I'dbetter go very quickly now. The Edison Electric 22 Institute appreciates the opportunity to provide a 23 statementatthisworkshopforresidentialcentralair 24 

### conditioners 25 

### standards.

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### and heat pump energy efficiency EEl is the association of the United NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com35 1 States investor owned electric utilities, combination 2 gas and electric utilities, industry affiliates and 3 associates worldwide. 4 EEI supports a life-cycle based cost 5 effective increase in the SEER level. Based on the 6 data and the analysis that we've seen, the 12 SEER 7 level is more likely to be cost effective for a larger 8 number of consumers than the 13 SEER level. Based on 9 the controversy caused by the previous 10 administration's decision and the relatively low 11 percentage of consumers for which it was cost 12 effective, EEI agrees that it was appropriate to re13 evaluate the SEER level in this rulemaking. 14 Comment 1, whatever happened to industry 15 supplied values? EEI is very concerned about the 16 trend of DOE moving from the use of industry values, 17 then industry values and reverse engineering to 18 finally DOE is showing a preference for non-industry 19 reverse engineering values. EEI finds this trend very 20 disturbing and is very concerned about its implication 21 regarding the cost data to be used for future 22 appliance energy efficiency standard rulemakings. 23 Comment 2, a 20 percent increase in the 24 minimum SEER value is a 20 increase, not a roll-back. 25 Even if DOE decided not to increase the SEER value, 

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### 1 States investorownedelectricutilities, combination 2 gas and electric utilities, industry affiliates and 3 associates worldwide. 4 

### EEl supports a life-cycle based cost 5 

### effective increase in the SEER level. Based on the 6 

### data and the analysis that we've seen, the 12 SEER 7 

### level ismore likelytobe costeffectivefor a larger 8 

### number of consumers than the 13 

### SEER level. Basedon 9 

### the controversy caused by the previous 10 administration's decision and the relatively low 11 percentage of consumers for which it was cost 12 effective, EEl agrees that it was appropriate to re13 

### evaluate the SEER level in this rulemaking. 14 Comment I, whatever happened to industry 15 

### supplied values? EEl is very concerned about the 16 trend of DOE moving from the use of industry values, 17 then industry values and reverse engineering to 18 finally DOE is showing a preference for non-industry 19 reverseengineeringvalues. EEl finds thistrendvery 20 disturbingandisveryconcernedabout itsimplication 21 regarding the cost data to be used for future 22 appliance energy efficiency standard rulemakings. 23 

### Comment 2, a 20 percent increase in the 24 minimum SEERvalue is a 20 increase, not a roll-back. 25 Even if DOE decided not to increase the SEER value,

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com36 1 the level would still be 10 SEER. As a result the 2 only way that DOE's proposed action could be a quote, 3 "roll-back", unquote, is if DOE was proposing a SEER 4 value that was lower than 10 SEER which DOE is not 5 proposing. EEI would suggest that to allow this 6 workshop to be productive that stakeholders refrain 7 from using the term "roll-back". 8 Comment 3, a SEER higher than 12 can lead 9 to lower peak demand savings. EEI and its members 10 have made numerous comments about the SEER and EER 11 values and their impact on the electric industry. 12 Based on ARI data and charts created by DOE and other 13 stakeholders, there appears to be a linear correlation 14 between SEER and EER when it's rated between 10 and 12 15 SEER. Basically, as SEER goes up, EER values go up, 16 up to 12 SEER. This correlation helps to save energy 17 and to reduce peak demand by residential systems 18 during the summer season, especially those units 19 located in hotter climates that have more hours closer 20 to the higher -- closer to or higher than EER test 21 conditions. However for units rated at 13 SEER or 22 higher, there appears to be no correlation. 23 From the data that we've examined, EER 24 values vary significantly due to advances such as 25 variable speed drives and twin single compressor 

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### 1 the level would still be 10 SEER. As a result the 2 onlywaythat DOE's proposedaction couldbe a quote, 3 "roll-back", unquote, is if DOE was proposing a SEER 4 value that was lower than 10 SEER which DOE is not 5 

### proposing. EEl would suggest that to allow this 6 workshop to be productive that stakeholders refrain 7 from using the term "roll-back". 8 Comment 3, a SEER higher than 12 can lead 9 

### to lower peak demand savings. EEl and its members 10 have made numerous comments about the SEER and EER 11 values and their impact on the electric industry. 12 BasedonARl data and charts createdbyDOE and other 13 stakeholders, thereappearstobea linearcorrelation 14 betweenSEERandEERwhenit'sratedbetween 10 and 12 15 SEER. Basically, as SEER goes up, EER values go up, 16 up to 12 SEER. This correlationhelps to save energy 17 and to reduce peak demand by residential systems 18 during the summer season, especially those units 19 locatedinhotterclimatesthathavemorehourscloser 20 to the higher**~-** 

### closer to or higher than EER test 21 conditions. However for units rated at 13 SEER or 22 higher, there appears to be no correlation. 23 

### From the data that we've examined, EER 24 values vary significantly due to advances such as 25 variable speed drives and twin single compressor

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com37 1 configuration. If the standard was raised to 13 SEER, 2 it is likely that the manufacturers would use 3 technology to raise SEER values and lower EER values 4 if it would lower their unit cost as a response to the 5 marketplace. There are units on the market today with 6 very high SEER values, eg, higher than 14, and EER 7 values that are lower than those associated with 10 8 and 11 CR units. Therefore, higher SEER values could 9 very easily lead to lower EER values which would 10 reduce energy savings in warmer climates, increase 11 peak demands associated with residential systems in 12 all climates and increase the need for peaking power 13 plants. 14 Based on this concern, a standard in the 15 range of 12 SEER is an excellent technical compromise 16 that will insure energy and peak demand savings. 17 Comment number 4, re-establish the 18 Appliance Energy Efficiency Standards Advisory 19 Committee. CEI was a participant in this advisory 20 committee and in our opinion it was vital in improving 21 the DOE analytical and rulemaking process. The 22 advisory committee provided a platform for interested 23 stakeholders toprovide key input for important issues 24 that would relate to all rulemakings such as the 25 economic analysis use and the impact of voluntary 

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### 1 configuration. Ifthe standardwasraisedto 13 SEER, 2 it is likely that the manufacturers would use 3 technology to raise SEER values and lower EER values 4 if itwouldlowertheirunit cost as a response tothe 5 marketplace. There areunitsonthemarket todaywith 6 very high SEER values, eg, higher than 14, and EER 7 values that are lower than those associated with 10 8 and 11 CR units. Therefore, higher SEER values could 9 very easily lead to lower EER values which would 10 reduce energy savings in warmer climates, increase 11 peak demands associated with residential systems in 12 all climates and increase the need for peaking power 13 plants. 14 Based on this concern, a standard in the 15 range of 12 SEER is an excellent technical compromise 16 that will insure energy and peak demand savings. 17 

### Comment number 4, 

### re-establish the 18 

### Appliance Energy Efficiency Standards Advisory 19 

### Committee. CEI was a participant in this advisory 20 committeeandinouropinionitwasvital inimproving 21 the DOE analytical and rulemaking process. The 22 advisorycommitteep'rovideda platformfor interested 23 stakeholderstoprovidekeyinput forimportantissues 24 that would relate to all rulemakings such as the 25 economic analysis use and the impact of voluntary

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com38 1 programs. 2 EEI strongly recommends that DOE re3 establish this advisory committee to help improve the 4 process and hopefully reduce the chances for 5 controversy and lawsuits and other rulemakings. Thank 6 you very much for your time. We look forward to 7 participating in this workshop. 8 MR. BROOKMAN: Thank you, Steve. That 9 good some discipline, thank you. Our next speaker is 10 Energy Market and Policy Analysis, Inc. No? If that 11 person is not here, then we will return to him or her 12 when they come back in. Goodman Global Holding 13 Company. 14 MR. MARTY: Goodmorning. My name is Doug 15 Marty. I'm with Goodman Global Holding. I would like 16 to thank -- again, my name is Doug Marty. I'm 17 ExecutiveVice President of Goodman Global Holdings in 18 Houston, Texas. Let me start by giving you a brief 19 background of our company. Goodman is the second 20 largest residential air conditioning and heating 21 manufacturer in the United States. Founded in 1975 by 22 the late Harold Goodman, Goodman remains entirely 23 family owned. 24 We produce a complete line of residential 25 and light commercial air conditioning and heating 

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### programs. 2 EEl strongly recommends that DOE re3 establishthis advisorycommittee tohelp improve the 4 

### process and hopefully reduce the chances for 5 

### controversyandlawsuitsandotherrulemakings. Thank 6 

### you very much for your time. We look forward to 7 

### participating in this workshop. 8 

### MR. BROOKMAN: Thank you, Steve. That 9 

### good some discipline, thankyou. Ournext speaker is 10 

### EnergyMarket and PolicyAnalysis, Inc. No? If that 11 

### person is not here, thenwe will return to himorher 12 when they come back in. Goodman Global Holding 13 

### Company. 14 

### MR. MARTY: Goodmorning. Myname isDoug 15 Marty. I'mwithGoodmanGlobalHolding. I wouldlike 16 

### to thank again, my name is Doug Marty. I'm 17 ExecutiveVicePresidentofGoodmanGlobalHoldingsin 18 

### Houston, Texas. Let me start by giving you a brief 19 background of our company. Goodman is the second 20 largest residential air conditioning and heating 21 manufacturerintheUnitedStates. Foundedin 1975by 22 the late Harold Goodman, Goodman remains entirely 23 family owned. 24 We produce a complete lineof residential 25 and light commercial air conditioning and heating

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com39 1 equipmentwith facilities in Houston, Texas as well as 2 Dayton and Fayetteville, Tennessee. Name brands sold 3 under the Goodman label include Amana, Goodman, GMC 4 and Janitrol. As the nation's second largest 5 manufacturer, my goal here today is to provide you 6 with accurate information regarding the continuing 7 debate to roll back the energy standard for air 8 conditioners and heat pumps from a level of 13 SEER to 9 12 SEER. 10 This debate has been fueled by 11 inaccuracies and in some cases outright wrong 12 information. Stronger energy efficiency standards do 13 not place a major burden on manufacturers or limit 14 consumer choice. They do not cause erroneous 15 increases in the size of the equipment. Finally, they 16 do not pose unreasonable costs on consumers or hurt 17 the elderly and low income families. Let me explain. 18 Given the recent events for purposes of 19 national security, we now face a time when it is 20 imperative to explore alternatives that help to 21 improve the efficiency of our energy use and build our 22 domestic energy infra-structure. As we seek 23 alternatives, it is important to consider options that 24 strike abalance betweenboth environmental and energy 25 needs. One simple option is energy efficiency and 

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### equipmentwithfacilities inHouston, Texas aswell as 2 

### Dayton andFayetteville, Tennessee. Name brands sold 3 under the Goodman label include Amana, Goodman, GMC 4 

### and Janitrol. As the nation's second largest 5 

### manufacturer, my goal here today is to provide you 6 

### with accurate information regarding the continuing 7 

### debate to roll back the energy standard for air 8 

### conditioners andheatpumps froma levelof 13 

### SEER to 9 12 

### SEER. 10 

### This debate has been fueled by 11 

### inaccuracies and in some cases outright wrong 12 

### information. Strongerenergyefficiency standards do 13 

### not place a major burden on manufacturers or limit 14 

### consumer choice. They do not cause erroneous 15 

### increases inthe sizeof theequipment. Finally, they 16 

### do not pose unreasonable costs on consumers or hurt 17 

### the elderlyand low income families. Let me explain. 18 

### Given the recent events for purposes of 19 

### national security, we now face a time when it is 20 

### imperative to explore alternatives that help to 21 

### improvethe efficiencyofourenergyuse andbuildour 22 

### domestic energy infra-structure. As we seek 23 alternatives, itisimportanttoconsideroptionsthat 24 strikea balance'betweenbothenvironmentalandenergy 25 

### needs.

(202)234-4433 

### One simple option is energy efficiency and NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS .1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com40 1 conservation, specificallyenergyefficiencystandards 2 for air conditioners should be strengthened to a level 3 that provides consumers the most efficient technology 4 available today at an affordable price and help 5 strengthen our domestic resources. That level is 13 6 SEER. 7 Many opponents of the 13 SEER standard 8 have argued that moving to a higher level would be a 9 hardship on small manufacturers and that not all 10 manufacturers have the capability to produce the more 11 efficient equipment, thus limiting consumer choice. 12 In fact, the 13 SEER technology has been available to 13 both large and small manufacturers for approximately 14 15 years. The Air Conditioning and Refrigeration 15 Institute's own data shows that virtually all 16 manufacturers produce 13 SEER equipment today. In 17 reality the only difference between a 10 SEER unit, a 18 12 SEER unit and a 13 SEER unit is a little more 19 copper and aluminum used in the manufacturing of 20 different size coils. 21 Given the fact that these units have 22 equivalent technologies, at Goodman we run all our 23 equipment through the same facilities and assembly 24 line. Since Goodman and most other manufacturers 25 currently produce the 13 SEER air conditioner, moving 

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### conservation, specificallyenergyefficiencystandards 2 forairconditionersshouldbe strengthenedtoa level 3 

### thatprovides consumers themost efficient technology 4 

### available today at an affordable price and help 5 

### strengthen our domestic resources. That level is 13 6 

### SEER. 7 

### Many opponents of the 13 SEER standard 8 

### have argued that moving to a higher level would be a 9 

### hardship on small manufacturers and that not all 10 

### manufacturers have the capabilitytoproduce themore 11 

### efficient equipment, thus limiting consumer choice. 12 In fact, the 13 SEER technologyhas been available to 13 both large and small manufacturers for approximately 14 15 

### years. The Air Conditioning and Refrigeration 15 

### Institute's own data shows that virtually all 16 

### manufacturers produce 13 SEER equipment today. In 17 

### realitythe onlydifference betweena 10 

### SEERunit, a 18 12 SEER unit and a 13 SEER unit is a little more 19 copper and aluminum used in the manufacturing of 20 different size coils. 21 Given the fact that these units have 22 equivalent technologies, at Goodman we run all our 23 equipment through the same facilities and assembly 24 

### line. Since Goodman and most other manufacturers 25 currentlyproduce the 13 SEER airconditioner, moving

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com41 1 to the higher SEER will simplymean producing a higher 2 volume. This will also mean more jobs at the industry 3 level, thus improving the economy. 4 There has also been some confusion about 5 the size of the 13 SEER equipment versus the 12 SEER 6 equipment. It has been said that there is an enormous 7 difference in the size of the units and with that a 8 tremendously higher related cost for installation. It 9 is clear that an increased efficiency standard would 10 be established at at least the 12 SEER over the 11 current 10 SEER standard. If the decision is made to 12 adopt the 12 SEER standard, the unit size will be 13 slightly bigger and require some structural 14 modification to install the end door portion of the 15 system, including duct-workduring installationof the 16 unit. 17 Once we have acknowledge that there will 18 be a standard that will likely require some structural 19 modification, one must compare the 12 SEER unit to the 20 13 SEER unit. The difference between our 13 SEER and 21 12 SEER external equipment is only three to five 22 inches in height. The internal equipment size for the 23 12 and 13 are similar and there is almost no 24 difference in the installation cost associated with a 25 13 SEER unit and a 12 SEER unit. 

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### 41 1 

### tothehigherSEERwill simplymeanproducinga higher 2 volume. Thiswill alsomeanmorejobsat the industry 3 level, thus improving the economy. 4 There has also been some confusion about 5 the size of the 13 SEER equipment versus the 12 SEER 6 equipment. Ithasbeensaidthat there isanenormous 7 difference in the size of the units and with that a 8 tremendouslyhigherrelatedcostforinstallation. It 9 is clear that an increased efficiency standard would 10 be established at at least the 12 SEER over the 11 current 10 SEER standard. If the decision ismade to 12 adopt the 12 SEER standard, the unit size will be 13 slightly bigger and require some structural 14 modification to install the end door portion of the 15 system, includingduct-workduringinstallationofthe 16 unit. 17 Once we have acknowledge that there will 18 bea standardthatwilllikelyrequire some structural 19 modification, onemust comparethe 12 SEERunit tothe 20 13 SEER unit. The difference between our 13 SEER and 21 12 SEER external equipment is only three to five 22 inches inheight. The internalequipment size forthe 23 12 and 13 are similar and there is almost no 24 difference inthe installationcost associatedwitha 25 13 SEER unit and a 12 SEER unit.

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com42 1 There have also been some claims that the 2 13 standardwould cost the consumer substantially more 3 money than the proposed roll-back to a 12 SEER 4 standard. According to DOE, the average difference in 5 cost between a 13 SEER and a 12 SEER unit today is 6 approximately $122.00. This different in cost for 7 Goodman units is comparable to this estimate. Since 8 a 13 SEER unit is eight percent more efficient than a 9 12 SEER, consumers will save more on their electric 10 bills each and every month for the life of the unit. 11 Thus, over an average life of a home cooling unit, the 12 savings will easily cover the cost -- the increase in 13 cost between the 12 SEER unit and the 13 SEER unit. 14 Moreover, industry has shown us time and 15 time again that once a standard is implemented, the 16 market will drive prices down and make the more 17 efficient equipment even more affordable for all 18 consumers. How do we know this? From experience. In 19 1992 when the government implemented the efficiency 20 standard at 10 SEER, the cost of the 10 SEER air 21 conditioning unit dropped dramatically across the 22 nation. The reason for the change in price is simple. 23 Once the standard is set, more sales of that type unit 24 will occur and more volume is manufactured, thereby 25 allowing the manufacturers to run their plant more 

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### 42 1 Therehave alsobeen some claims that the 2 13 standardwouldcosttheconsumersubstantiallymore 3 money than the proposed roll-back to a 12 SEER 4 standard. AccordingtoDOE, the averagedifferencein 5 cost between a 13 SEER and a 12 SEER unit today is 6 

### approximately $122.00. This different in cost for 7 

### Goodman units is comparable to this estimate. Since 8 a 13 SEER unit is eight percent more efficient than a 9 12 SEER, consumers will save more on their electric 10 bills each and every month for the life of the unit. 11 Thus, overanaverage lifeofa home coolingunit, the 12 savings will easilycover the cost -- the increase in 13 cost between the 12 SEER unit and the 13 SEER unit. 14 

### Moreover, industry has shown us time and 15 time again that once a standard is implemented, the 16 market will drive prices down and make the more 17 efficient equipment even more affordable for all 

### 18 consumers. How dowe knowthis? Fromexperience. In 19 1992 when the government implemented the efficiency 20 standard at 10 SEER, the cost of the 10 SEER air 21 conditioning unit dropped dramatically across the 22 nation. The reasonfor the change inprice is simple. 23 Once the standardis set, more salesofthat typeunit 24 will occur and more volume is manufactured, thereby 25 allowing the manufacturers to run their plant more

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com43 1 efficiently and pass the savings onto the consumer. 2 Since most consumers purchase units that 3 perform at the minimum standard, it makes it that much 4 more important that we establish the standard at the 5 correct level, 13 SEER. Finally, in our opinion, 6 Goodman has a marketing philosophy of selling in 7 volume. The incremental cost to the manufacturer to 8 produce a 13-year unit is only about $100.00 and we 9 feel the most efficient technology should be available 10 to people of all income levels at an affordable price. 11 Unfortunately, all manufacturers may not have the same 12 marketing philosophy. Instead some manufacturers may 13 be seeking protection of higher profit margins on 14 their more efficient equipment. 15 The 13 SEER standard will force all 16 manufacturers to be truly competitive and provide all 17 consumers with the most affordable energy efficient 18 technology for air conditioners that is available 19 today. Just as the Administration has been supportive 20 of our energy efficiency and conservation measures, 21 Goodman, too, supports the use of more energy 22 efficient appliances, specifically air conditioners 23 and heat pumps. 24 The 13 SEER standard is achievable today 25 and will certainly be achievable in 2006. The 13 SEER 

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### 43 1 efficientlyandpass the savings onto the consumer. 2 Since most consumers purchase units that 3 performat theminimumstandard, itmakes itthatmuch 4 more important that we establish the standard at the 5 

### correct level, 13 SEER. Finally, in our opinion, 6 Goodman has a marketing philosophy of selling in 7 volume. The incremental cost to the manufacturer to 8 produce a 13-year unit is only about $100.00 and we 9 feelthemostefficienttechnologyshouldbeavailable 10 topeopleofall income levelsat anaffordableprice. 11 Unfortunately, allmanufacturersmaynothavethesame 12 marketingphilosophy. Insteadsomemanufacturersmay 13 be seeking protection of higher profit margins on 14 their more efficient equipment. 15 The 13 SEER standard will force all 16 manufacturers tobe trulycompetitive andprovide all 17 consumers with the most affordable energy efficient 18 technology for air conditioners that is available 19 today. JustastheAdministrationhasbeensupportive 20 of our energy efficiency and conservation measures, 21 Goodman, too, supports the use of more energy 22 efficient appliances, specifically air conditioners 23 and heat pumps. 24 The 13 SEER standard is achievable today 25 andwill certainlybe achievable in2006. The 13 SEER

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 www.nealrgross.com44 1 standardwill significantlyreduce energyconsumption, 2 cut utility costs for consumers and improve air 3 quality by reducing the amount of air pollutants and 4 greenhouse gases emitted from fossil-fueled electric 5 power generating facilities. 6 In closing, Goodman strongly urges you 7 consider establishing a 13 SEER standard for 8 residential air conditioners and heat pumps beginning 9 in 2006. Again, it is the right thing to do for both 10 the consumer and the environment. Thank you. 11 MR. BROOKMAN: Thank you. The next 12 speaker will be the National Consumer Law Center. 13 MR. HARAK: Thank you. Myname is Charles 14 Harak. I promise I won't read this whole statement 15 but I do want to note this is a different statement 16 than you have in the packet and I did bring a signed 17 original and 10 copies today. 18 MR. BROOKMAN: Thank you and you will

-- 19 you will give a copy to Brenda Jones. 20 MR. HARAK: Yes, I did. 21 MR. BROOKMAN: Thank you. 22 MR. HARAK: Yes, so that's in the record 23 and that's the statement I'll summarize for you this 24 morning. I'm with the National Consumer Law Center. 25 I'm here representing the Massachusetts Union of 

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### 44 1 standardwillsignificantlyreduceenergyconsumption, 2 cut utility costs for consumers and improve air 3 qualityby reducing the amount of air pollutants and 4 greenhouse gases emitted from fossil-fueled electric 5 power generating facilities. 6 

### In closing, Goodman strongly urges you 7 

### consider establishing a 13 SEER standard for 8 residential airconditioners andheatpumpsbeginning 9 in 2006. Again, it is the right thing to do for both 10 the consumer and the environment. Thank you. 11 MR. BROOKMAN: Thank you. The next 12 speaker will be the National Consumer Law Center. 13 MR. HARAK: Thankyou. Myname isCharles 14 

### Harak. I promise I won't read this whole statement 15 but I do want to note this is a different statement 16 than you have in the packet and I did bring a signed 17 original and 10 copies today. 18 

### MR. BROOKMAN: Thank you and you will

-- 19 you will give a copy to Brenda Jones. 20 MR. HARAK: Yes, I did. 21 MR. BROOKMAN: Thank you. 22 MR. HARAK: Yes, so that's in the record 23 and that's the statement I'll summarize for you this 24 morning. I'm with the National Consumer Law Center. 25 I'm here representing the Massachusetts Union of

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW WASHINGTON, D.C. 20005-3701 www.nealrgross.com45 1 Public Housing Tenants, which is the oldest 2 association of public housing tenants in the country 3 and I speak from the perspective of low income 4 tenants. 5 I have a few points that are made in the 6 testimony I'll summarize them. First, the DOE should 7 not retreat from the final rule setting a SEER of 13 8 for central air conditioners and heat pumps. Low 9 income people will benefit more than other households 10 from DOE's standing by the SEER 13 standard and my 11 main point today is to rebut the notion that low 12 income people would benefit by rolling it back to 12. 13 As many speakers have noted, low income 14 people own homes at a much lower rate than others. 15 Nationally about 67 percent of people own their homes. 16 Amongst the non-white minority community it's about 45 17 percent. In Massachusetts where we have good income 18 stratified data, 59 percent of all households own 19 their homes. If you look at people between zero and 20 30 percent of median income, only 28 percent own their 21 homes. I have to say I've been doing this work of 22 low income energy work in Massachusetts for 25 years. 23 I've never come across a low income family that has 24 bought a central air conditioning unit. I thought, of 

# 0 25 course, I live in a cold state so I called some 

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### 45 1 Public Housing Tenants, which is the oldest 2 

### association of public housing tenants in the country 3 

### and I speak from the perspective of low income 4 

### tenants. 5 

### I have a few points**th~t** 

### are made in the 6 

### testimony I'll summarize them. First, the DOE should 7 

### not retreat from the final rule setting a SEER of 13 8 

### for central air conditioners and heat pumps. Low 9 incomepeoplewillbenefitmore thanotherhouseholds 10 from DOE's standing by the SEER 13 standard and my 11 main point today is to rebut the notion that low 12 income peoplewouldbenefit byrolling itbackto 12. 13 As many speakers have noted, low income 14 people own homes at a much lower rate than others. 15 Nationallyabout 67percentofpeopleowntheirhomes. 16 Amongstthenon-whiteminoritycommunityit'sabout45 17 

### percent. In Massachusetts where we have good income 18 stratified data, 59 percent of all households own 19 

### their homes. If you look at people between zero and 20 30percentofmedianincome, only28percentown their 21 homes. I have to say I've been doing this work of 22 low income energywork inMassachusetts for 25 years. 23 I've never come across a low income family that has 24 boughta centralairconditioningunit. I thought, of 25 course, I live in a cold state so I called some

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com46 1 colleagues in Texas and they say it happens rarely. 2 So I think low income homeowners get the 3 benefit of the energy savings and very rarely incur 4 the cost. They may buy a home that has it there 5 already and let me then turn to the tenants. Tenants, 6 of course, would never incur directly the cost of 7 installing central air conditioningbecause theydon't 8 install it, so the question arises would their rents 9 be effected. I live in Massachusetts, many of you 10 live in states where rents have gone up phenomenally 11 over the last decade. They go up because of three 12 words; location, location, location. People pay rents 13 because of supply and demand. We all know that. I've 14 cited some economic text in my testimony but I've also 15 spoken to an experienced long-term appraiser, 16 specifically in the market of low income housing in 17 Massachusetts who agrees and I will try to introduce 18 more documentation into the record before October 19 19th. 20 Just to make that point one more way, the 21 Department of Housing and Urban Development, which, I 22 guess is about a block from here, has something called 23 fair market rents. If you look at the trend over time 24 and fair market rents over the last actually more than 25 10 years, they went up 20 to 30 percent in states from 

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### colleagues in Texas and they say it happens rarely. 2 So I think low income homeowners get the 3 benefit of the energy savings and very rarely incur 4 

### the cost. They may buy a home that has it there 5 

### alreadyandletme thenturntothe tenants. Tenants, 6 

### of course, would never incur directly the cost of 7 

### installingcentralairconditioningbecausetheydon't 8 

### install it, so the question arises would their rents 9 

### be effected. 

### I live in Massachusetts, many of you 10 live in states where rents have gone up phenomenally 11 

### over the last decade. They go up because of three 12 wordsi 

### location, location, location. Peoplepayrents 13 becauseof supplyanddemand. We allknowthat. I've 14 

### citedsomeeconomictext inmy testimonybut I'vealso 15 

### spoken to an experienced long-term appraiser, 16 specifically in the market of low income housing in 17 Massachusetts who agrees and I will try to introduce 18 more documentation into the record before October 19 19th. 

### 20 Just tomake that point onemoreway, the 21 Department ofHousing andUrbanDevelopment, which, I 22 guessisabout a blockfromhere, has somethingcalled 23 fairmarket rents. Ifyou lookat the trendovertime 24 andfairmarketrentsoverthe last actuallymorethan 25 10years, theywentup 20 to 30percent in states from

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com47 1 the East Coast to the West Coast to North to South. 2 In other states all over the country, rents when down 3 as much as three percent or up as little as two or 4 three percent. Obviously, rents are not tied to 5 anything as relatively as inconsequential as a 6 marginal change in the cost of central air 7 conditioning and again, I want to rebut the notion 8 that rollingback to 12 will help low income people at 9 all. 10 They're not going to incur the cost and 11 they're going to get all of the benefits. That's the 12 thrust of my testimony. There's two other brief 13 points I would like to make while I have the 14 opportunity. If DOE insists on reconsidering the 15 final rule promulgated after years of analysis and 16 discussion, it should reconsider that changes in 17 electricity prices that make investments in energy 18 efficiency much more attractive in terms of cost 19 benefit analysis than even ayear ago. This point has 20 been raised previously. 21 In California, when San Diego price caps 22 came up, people's electric bills doubled and tripled 23 and the benefit of having more efficient air 24 conditioning is obviously much higher than it was a 25 year ago. But even in Massachusetts, let's not look 

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### 1 the East Coast to the West Coast to North to South. 2 In other states alloverthe country, rents when down 3 as much as three percent or up as little as two or 4 

### three percent.. Obviously, rents are not tied to 5 

### anything as relatively as inconsequential as a 6 

### marginal change in the cost of central air 7 

### conditioning and again, I want to rebut the notion 8 that rollingbackto 12 willhelp lowincomepeople at 9 all. 10 They're not going to incur the cost and 11 they're going to get all of the benefits. That's the 12 thrust of my testimony. There's two other brief 13 points I would like to make while I have the 14 

### opportunity. If DOE insists on reconsidering the 15 final rule promulgated after years of analysis and 16 discussion, it should reconsider that changes in 17 electricity prices that make investments in energy 18 efficiency much more attractive in terms of cost 19 benefit analysis thanevena yearago. Thispointhas 20 been raisedpreviously. 21 In California, when San Diego price caps 22 came up, people's electric bills doubled and tripled 23 and the benefit of having more efficient air 24 conditioning is obviously much higher than it was a 25 year ago. But even inMassachusetts, let's not look

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 www.nealrgross.com48 1 at California, everyone thinks it's unique. In 2 Massachusetts, prices have gone up as much as 50 to 60 3 percent in the last year, so even in a cooler state 4 far from the crisis on the other cost, we have a much 5 higher benefit from central air conditioning. 6 My last point is that DOE should consider 7 the unique effect that air conditioners have on summer 8 peak loads and therefore on systems costs borne by all 9 customers. Summer peak lead to black-outs but even 10 when they don't lead to black-outs they lead to dirty 11 air and increased system costs for everybody as you 12 bring on the most expensive unit, you bring the peak 13 load -- to meet the peak load. 14 As President Bush'snational energypolicy 15 notes, quote, "Greater energy efficiency helps us make 16 the most of U.S. resources, reduces energy shortages, 17 lowers our reliance on energy imports, mitigates the 18 impact of high energy prices and reduces pollution. 19 Improvements in efficiency can be particularly 20 effective in reducing energy demand when energy is 21 most expensive". We encourage DOE to stick by the 13 22 SEER standard and we hope that you will not go with 23 this notion that going back to 12 will benefit low 24 income people. Thank you very much. 25 MR. BROOKMAN: Thank you. And thank you 

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### at California, everyone thinks it's unique. 

### In 2 Massachusetts, priceshavegoneup asmuchas 50 to 60 3 percent in the last year, so even in a cooler state 4 far from the crisis on the other cost, we have a much 5 higher benefit from central air conditioning. 6 My lastpoint is that DOE shouldconsider 7 theuniqueeffectthat airconditionershaveonsummer 8 peakloads andthereforeon systemscostsbornebyall 9 

### customers. Summer peak lead to black-outs but even 10 when theydon't lead toblack-outs they lead to dirty 11 air and increased system costs for everybody as you 12 bring on the most expensive unit, you bring the peak 13 load

-- to meet the peak load. 14 AsPresidentBush'snationalenergypolicy 15 notes, quote, IIGreaterenergyefficiencyhelpsusmake 16 the most of U.S. resources, reduces energy shortages, 17 lowers our reliance on energy imports, mitigates the 18 impact of high energy prices and reduces pollution. 19 Improvements in efficiency can be particularly 20 effective in reducing energy demand when energy is 21 most expensiveII. We encourage DOE to stickby the 13 22 SEER standard and we hope that you will not go with 23 this notion that going back to 12 will benefit low 24 income people. Thank you very much. 25

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### MR. BROOKMAN: Thank you. And thank you NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com49 1 for your consideration in summarizing your written 2 remarks. The next speaker -- 3 MR. HARAK: I made it in five minutes. 4 MR. BROOKMAN: Thank you. The next 5 speaker will be the National Grid. 6 MR. LOOMIS: Yes, good morning. My name 7 is Ralph Loomis. I've Vice President of Federal 8 Affairs for National Grid, USA. National Grid, whose 9 subsidiaries include Massachusetts Electric, 10 Narragansett Electric, Granite State Electric has been 11 a leader in energy efficiency since at least the 12 1980's. Since that time, over 60 percent of our 1.7 13 million customers have participate in our energy 14 efficient programs saving almost 1800 gigawatt hours 15 a year and reducing peak demand by close to 370 16 megawatts. 17 Given the obvious need for increased 18 energy efficiency both nationally and in our region, 19 we would urge the DOE to approve a standard of 13 SEER 20 for residential central air and heat pumps. We 21 encourage the DOE to re-examine the analysis that led 22 DOE to find that such a standard would be a burden to 23 consumers. In our service territory, as eluded to by 24 the previous speaker, it is rare for low income * 25 consumers to have either central air conditioning or 

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

### 49 1 for your consideration in summarizing your written 2 

### remarks. The next speaker

-- 3 

### MR. HARAK: I made it in five minutes. 4 

### MR. BROOKMAN: Thank you. The next 5 speaker will be the National Grid. 6 

### MR. LOOMIS: Yes, good morning. My name 7 

### is Ralph Loomis. I've Vice President of Federal 8 Affairs forNational Grid, USA. National Grid, whose 9 

### subsidiaries include Massachusetts Electric, 10 NarragansettElectric, GraniteStateElectrichasbeen 11 a leader in energy efficiency since at least the 12 1980's. Since that time, over 60 percent of our 1.7 13 million customers have participate in our energy 14 efficient programs saving almost 1800 gigawatt hours 15 a year and reducing peak demand by close to 370 16 megawatts. 17 Given the obvious need for increased 18 energy efficiencyboth nationally and in our region, 19 we wouldurge theDOE to approve a standardof 13 SEER 20 for residential central air and heat pumps. We 21 encourage the DOE to re-examine the analysis that led 22 DOE to find that such a standardwouldbe a burdento 23 consumers. Inour service territory, as eludedtoby 24 the previous speaker, it is rare for low income 25 consumers to have either central air conditioning or

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com50 1 heat pump systems. Most low income customers use room 2 air conditioners or cooling and other heating 3 equipment. From that perspective, in New England, we 4 do not believe that the higher standard will burden 5 low income customers. 6 Similarly, we find no evidence of any 7 potential increase in installation cost from adopting 8 -- any material increase in installation costs from 9 adopting the higher standards. Consumers in New 10 England are either installing air conditioning in new 11 construction or in retrofits but in neither case do we 12 find that the slightly larger equipment will have any 13 significant effect on cost. National Grid is a strong 14 supporter of the DOE, EPA Energy Star programs. We 15 believe that Energy Star leads the way for consumer 16 acceptance of high efficiency products such as high 17 energy clothes washers. 18 We believe the same thing can happen with 19 central air conditioning. The EPA has suggested the 20 Energy Star program raise the central air conditioning 21 energy star standard to 13 SEER by April 1 of 2002. 22 We think that is a good step towards increasing energy 23 efficiency. Finally, in the wake of California 24 consumers in all parts of the country are concerned 25 about having adequate power available during times of 

### NEALR.GROSS COURT REPORTERS ANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 50 1 

### heatpump systems. Most lowincomecustomersuseroom 2 air conditioners or cooling and other heating 3 equipment. Fromthatperspective, inNew England, we 4 

### do not believe that the higher standard will burden 5 

### low income customers. 6 

### Similarly, we find no evidence of any 7 

### potential increase ininstallationcost from adopting 8

-- 

### any material increase in installation costs from 9 

### adopting the higher standards. Consumers in New 10 Englandare eitherinstallingair conditioninginnew 11 

### constructionorinretrofitsbut inneithercasedowe 12 find that the slightlylargerequipment will have any 13 significanteffectoncost. NationalGridisa strong 14 

### supporter of the DOE, EPA Energy Star programs. We 15 believe that Energy Star leads the way for consumer 16 acceptance of high efficiency products such as high 17 energy clothes washers. 18 We believe the same thing canhappenwith 19 central air conditioning. The EPA has suggested the 20 EnergyStarprogramraisethecentralairconditioning 21 energy star standard to 13 SEER by April 1 of 2002. 22 We thinkthat isa goodsteptowards increasingenergy 23 efficiency. Finally, in the wake of California 24 consumers in all parts of the country are concerned 25 about havingadequatepower available during times of

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com51 1 peak consumption. 2 In our area alone, it is the use of summer 3 air conditioning that has led to five new peak

-- 4 systems peaks on our system during the months of June 5 and July of this year and culminating in an all time 6 high peak of over 24,000 megawatt hours on July 25th. 7 It does not appear to us that DOE has properly 8 considered the impact of the higher efficiency 9 equipment on summer peak days. We think that the 10 savings possible for consumers and power systems on 11 those days will outweigh the slightly higher cost of 12 13 SEER equipment. 13 We, therefore, urge the DOE to adopt the 14 13 SEER standard for residential air conditioning and 15 heat pumps. Thank you. 16 MR. BROOKMAN: Thank you very much. The 17 next speaker will be the Natural Resources Defense 18 Council. 19 MS. KENNEDY: Thanks. I'll summarize our 20 written comments briefly. 21 MR. BROOKMAN: Your name for the record. 22 MS. KENNEDY: My name is Kit Kennedy. I'm 23 a senior attorney with the Natural Resources Defense 24 Council and our basic message this morning is that 25 DOE's continued attempts to roll back the SEER 13 air 

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

### 51 1 peak consumption. 2 Inourareaalone, it istheuseof summer 3 air conditioning that has led to five new peak

-- 4 systems peaks on our systemduring the months of June 5 and July of this year and culminating in an all time 6 highpeakof over 24,000 megawatt hours onJuly 25th. 7 It does not appear to us that DOE has properly 8 considered the impact of the higher efficiency 9 

### equipment on summer peak days. We think that the 10 savings possible for consumers and power systems on 11 those days will outweigh the slightly higher cost of 12 13 SEER**eq~ipment.** 

### 13 We,**t~erefore,** 

### urge the DOE to adopt the 14 13 SEER standardfor residential airconditioningand 15 heat pumps. Thank you. 16 

### MR. BROOKMAN: Thank you very much. The 17 next speaker will be the Natural Resources Defense 18 Council. 19 

### MS. KENNEDY: Thanks. I'll summarize our 20 

### written comments briefly. 21 MR. BROOKMAN: Your name for the record. 22 MS. KENNEDY: Myname isKit Kennedy. I'm 23 a senior attorney with the Natural Resources Defense 24 Council and our basic message this morning is that 25 DOE's continuedattempts to roll back the SEER 13 air

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com52 1 conditioner standard is a grave mistake. This action 2 and the roll-backwould be harmful to the environment, 3 harmful to consumers, particularly the low income 4 consumers, and damaging to the nation's electric 5 system reliability. 6 We urge you not to take this action which 7 is so harmful to our country and so decisive at this 8 time. NRDC, as you know, has a long history of 9 working on appliance standards. For some 20 years 10 we've worked with the Department of Energy and with 11 manufacturers to develop cost effective appliance 12 energy efficiency standards. We helped to draft the 13 applicable statutes here including NAECA which gives 14 us a unique sense of what those statutes mean and we 15 think how to interpret them. 16 Our preferred mode is to work with the 17 Department of Energy and with manufacturers. We 18 resort to litigation only when absolutely necessary 19 andunfortunately for us, the roll-back of the 13 SEER 20 standard was important enough and serious enough for 21 us to initiate litigation against the Department. My 22 main comment on the lawsuit is this; the legal issues 23 will play themselves out but Iwant to comment on the 24 diversity of the parties that have joined us in the 25 litigation. 

### NEALR.GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 52 1 

### conditioner standard is a grave mistake. This action 2 andtheroll-backwouldbeharmful totheenvironment, 3 

### harmful to consumers, particularly the low income 4 

### consumers, and damaging to the nation's electric 5 

### system reliability. 6 

### We urgeyounot to take this actionwhich 7 

### is so harmful to our country and so decisive at this 8 

### time. NRDC, as you know, has a long history of 9 

### working on appliance standards. For some 20 years 10 

### we've worked with the Department of Energy and with 11 

### manufacturers to develop cost effective appliance 12 

### energy efficiency standards. We helped to draft the 13 

### applicable statutes here including NAECA which gives 14 

### us a unique sense of what those statutes mean and we 15 

### think how to interpret them. 16 

### Our preferred mode is to work with the 17 

### Department of Energy and with manufacturers. We 18 

### resort to litigation only when absolutely necessary 19 

### andunfortunatelyforus, the roll-backofthe 13 

### SEER 20 standard was important enough and serious enough for 21 

### us to initiate litigationagainst the Department. My 22 main comment on the lawsuit is this; the legal issues 23 will playthemselves out but I want to comment on the 24 diversity of the parties that have joined us in the 25 litigation.

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com53 1 On the non-profit side, we'reverypleased 2 that the Consumer Federation ofAmerica and the Public 3 Utility Law Project, which is a low income energy 4 organization in New York, have joined us in 5 challenging the roll-back and we're very pleased that 6 the states of New York, Connecticut and California now 7 joinedby the states of Vermont, Maine and New Jersey, 8 have also joined us in the case. And I think this 9 shows the gravity of the issue, how much these states 10 care. These states represent tens of millions of 11 people and they're a diverse group of states from the 12 perspective of air conditioning as well as everything 13 else. 14 They include states like California,which 15 have fairly intensive air conditioning use and states 16 as far north as Maine where air conditioning use are 17 limited. And I think this is significant because, of 18 course, the Department has identified low income 19 people and states with low air conditioning needs as 20 groups of people that would be harmed by the SEER 13 21 rule and instead these entities and their 22 representatives are tellingyou, "Please rethink this, 23 stay with SEER 13. Don't decrease it to 12". 24 Outside the realm of the lawsuit, of 25 course, there are many other allies in the -- in the 

### NEAL R.GROSS COURTREPORTERS ANDTRANSCRIBERS 1323RHODE ISLANDAVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 53 

### 1 Onthenon-profitside, we'reverypleased 2 thattheConsumerFederationofAmericaandthe Public 3 Utility Law Project, which is a low income energy 4 

### organization in New York, have joined us in 5 challengingtheroll-back andwe'reverypleasedthat 6 the statesofNewYork, ConnecticutandCalifornianow 7 joinedbythe statesofVermont, Maine andNewJersey, 8 

### have also joined us in the case. And I think this 9 shows the gravityof the issue, howmuchthese states' 10 

### care. These states represent tens of millions of 11 people andthey're a diverse group of states from the 12 perspectiveof airconditioning as well as everything 13 else. 14 TheyincludestateslikeCalifornia, which 15 have fairly intensive airconditioninguse and states 16 as far north as Maine where air conditioning use are 17 limited. And I think this is significantbecause, of 18 course, the Department has identified low income 19 people and states with low air conditioning needs as 20 groups of people that would be harmed by the SEER 13 21 rule and instead these entities and their 22 representativesaretellingyou, II

### Pleaserethinkthis, 23 staywith SEER 13. Don't decrease it to 12". 24 

### Outside the realm of the lawsuit, of 25 course, there are many other allies in the

-- in the

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 www.nealrgross.com54 1 effort to keep SEER 13. Just to mention a few, we're 2 so pleased that Goodman and Goettel and Addison have 3 had the foresight to recognize that protecting the 4 environment and protecting consumers is also good for 5 business. We've very pleased that utilities including 6 National Grid and PG&E are joining us today and that 7 they recognize that stricter energy efficiency 8 standards that are still cost effective are going to 9 help them protect their consumers from black-outs of 10 the type the California has experienced and that are 11 threatened in other areas. 12 And in terms of consumer groups also, of 13 course, we're -- it's great to have NCLC and Texas 14 Rose here today as well as the Council of State 15 Governments. I know that they care very deeply about 16 this issue and we're pleased that Kyle Rabin, you 17 know, lived to tell his tale and this diverse group of 18 allies; I hope tells the Department a strong message 19 that this should not happen and that this group of 20 allies, unlikely allies in some cases, is going to 21 continue to work together for the SEER 13 standard or 22 for a stronger standard in the future. 23 The last point I'd like to make is that 24 fromNRDC's perspective the SEER 13 standard itself is 25 a form of compromise. We believe that the record 

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### 1 effort tokeep SEER 13. Just tomention a few, we're 2 so pleased that Goodman and Goettel and Addison have 3 had the foresight to recognize that protecting the 4 environment andprotectingconsumers is alsogood for 5 business. We'veverypleasedthatutilitiesincluding 6 National Grid and PG&E are joiningus today and that 7 they recognize that stricter energy efficiency 8 standards that are still cost effective are going to 9 help them protect their consumers from black-outs of 10 the type the California has experienced and that are 11 threatened in other areas. 12 And in terms of consumer groups also, of 13 course, we're

-- it's great to have NCLC and Texas 14 Rose here today as well as the Council of State 15 Governments. I know that they care verydeeply about 16 this issue and we're pleased that Kyle Rabin, you 17 know, livedtotellhis taleandthisdiversegroupof 18 

### allies; I hope tells the Department a strong message 19 that this should not happen and that this group of 20 allies, unlikely allies in some cases, is going to 21 continue towork together for the SEER 13 standardor 22 for a stronger standard in the future. 23 The last point I'd like to make is that 24 fromNRDC's perspectivetheSEER 13 standarditself is 25 

### a form of compromise. We believe that the record

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### NEAL

### R. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com55 1 would have supported a higher standard as well as 2 imposition of an EER standard and thermal expansion 3 valve requirements and this is particularly true if we 4 look at the last year of data that was not part of the 5 SEER 13 rulemaking. Yet we have 13. That's the rule 6 that was issued in January and we hope that the 7 Department and manufacturers can join with us in 8 unifying on a SEER 13 standard. 9 We're happy to work out any issues that 10 other stakeholders have around how you get to 13. But 11 this is a time for unity. It's not a time for 12 decisive battles. We will continue to press for 13 in 13 court and in any other forum we have including state 14 legislatures to try to get -- encourage states to come 15 up with their own state standards if we have to. So 16 we are absolutely committed to the SEER 13 standard 17 and we hope that we can get there through consensus 18 rather than through protracted litigation. 19 David, do-you want to add anything in our 20 remaining 30 seconds? 21 MR. GOLDSTEIN: No, I think that covers it 22 all. 23 MR. BROOKMAN: Thank you, David. 24 MS. KENNEDY: Thank you. 25 MR. BROOKMAN: And thank you. Our next 

### NEALR.GROSS COURT REPORTERS ANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 

### 55 1 would have supported a higher standard as well as 2 imposition of an EER standard and thermal expansion 3 valverequirementsandthis isparticularlytrue ifwe 4 look at the lastyearof datathatwas notpart of the 5 SEER 13 rulemaking. Yet we have 13. That's the rule 6 that was issued in January and we hope that the 7 Department and manufacturers can join with us in 8 unifying on a SEER 13 standard. 9 We're happy to work out any issues that 10 otherstakeholdershave aroundhowyouget to 13. But 11 this is a time for unity. It's not a time for 12 decisivebattles. We will continue topress for 13 in 13 court and in any other forum we have including state 14 legislaturestotrytoget - - encourage states tocome 15 up with their own state standards if we have to. So 16 we are absolutely committed to the SEER 13 standard 17 and we hope that we can get there through consensus 18 rather than through protracted litigation. 19 David, doyouwant to add anything inour 20**rem~ining** 

### 30 seconds? 21 22 all. 23 24 25

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### MR. GOLDSTEIN: No, I thinkthatcovers it

MR. BROOKMAN: Thank you, David. MS. KENNEDY: Thank you. MR. BROOKMAN: And thank you. NEAL

### R.GROSS

.COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 

### Our next

www.nealrgross.com56 1 speaker will be the Northeast Energy Efficiency 2 Partnerships. 3 MR. LINN: Hi, I'm John Linn from 4 Northeast Energy Efficiency Partnerships, NEEP. NEEP 5 is a non-profit organization that promotes energy 6 efficiency -- energy and resource efficiency in the 7 Northeast states. We have prepared remarks. I won't 8 belabor reading them but the major points are three. 9 NEEP supports the standard of SEER 13 for 10 central air conditioners. Second, NEEP strongly 11 opposes DOE's proposed roll-back of that standard. 12 MR. BROOKMAN: Could you speak into the 13 microphone, please? 14 MR. LINN: Oh, sorry. NEEP opposes DOE's 15 proposed roll-back of the standard to SEER 12 and 16 third, if we must revisit the issues, NEEP supports 17 the requirement of thermal expansion valves, TXV's as 18 a component of air conditioning systems. 19 Briefly, our reasons for opposing the 20 roll-back of SEER to 12 are that DOE's analysis that 21 led to this we consider flawed. First, the equipment 22 costs are overstated. DOE's analysis is based on ARI 23 data, which has historically been overstated. Is 24 should be based on independent data using street 25 prices rather than catalogue prices. 

### NEALR.GROSS COURT REPORTERS ANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 56 1 

### speaker will be the Northeast Energy Efficiency 2 

### Partnerships. 3 

### MR. LINN: Hi, 

### I'm John Linn from 4 NortheastEnergyEfficiencyPartnerships, NEEP. NEEP 5 

### is a non-profit organization that promotes energy 6 

### efficiency

-- energy and resource efficiency in the 7 

### Northeast states. We havepreparedremarks. I won't 8 

### belabor reading thembut the majorpoints are three. 9 

### NEEP**su~p6rts** 

### the standardof SEER 13 

### for 10 central air conditioners. Second, NEEP strongly 11 

### opposes DOE's proposed roll-back of that standard. 12 MR. BROOKMAN: Could you speak into the 13 

### microphone, please? 14 

### MR. LINN: Oh, sorry. NEEP opposes DOE's 15 proposed roll-back of the standard to SEER 12 and 16 

### third, if we must revisit the issues, NEEP supports 17 

### the requirement of thermal expansionvalves, TXV's as 18 

### a component of air conditioning systems. 19 

### Briefly, our reasons for opposing the 20 roll-back of SEER to 12 are that DOE's analysis that 21 ledto this we consider flawed. First, the equipment 22 

### costs are overstated. DOE's analysis is basedonARI 23 

### data, which has historically been overstated. Is 24 should be based on independent data using street 25 prices rather than catalogue prices.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 www.nealrgross.com57 1 Second, retail electric costs were 2 understated. As people have noted already, prices 3 have gone up but also they are based on average retail 4 prices. Air conditioning is a peak setting load and 5 that causes an increase in the average and marginal 6 costs. So as people have stated also, this effects 7 everyone's rates, both with and without air 8 conditioning. 9 Further we support the requirement of 10 adding a TXV, thermal expansion valve, to central air 11 conditioning systems. First the TXV's are 12 instrumental in achieving a SEER 13 and also improving 13 the EER of systems but secondly, adding a TXV makes 14 the systems much more forgiving in maintaining their 15 efficiency than capillary tube systems. If your 16 clumsy about installing and charge the refrigerant

-- 17 installing the refrigerant charge, TXV systems will 18 maintain their efficiency. 19 So in summary enact the SEER 13 standard, 20 don't roll back to 12 and require TXV's for central 21 systems. Thank you. 22 MR. BROOKMAN: Thankyou verymuch. Thank 23 you. The next speaker will be Pacific Gas and 24 Electric. 25 MR. HUNT: I'm Marshall Hunt with Pacific 

### NEALR.GROSS COURT REPORTERS ANDTRANSCRIBERS 1323RHODE ISLANDAVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 57 1 

### Second, retail electric costs were 2 

### understated. As people have noted already, prices 3 havegoneupbut alsotheyarebasedonaverageretail 4 prices. Air conditioning is a peak setting load and. 5 that causes an increase in the average and marginal 6 

### costs. So as people have stated also, this effects 7 

### everyone's rates, both with and without air 8 conditioning. 9 

### Further we support the requirement of 10 adding a TXV, thermal expansionvalve, to central air 11 

### conditioning systems. First the TXV's are 12 instrumentalinachievinga SEER 13 andalsoimproving 13 the EER of systems but secondly, adding a TXV makes 14 the systems much more forgiving in maintaining their 15 

### efficiency than capillary tube systems. If your 16 clumsyabout installingandcharge the refrigerant

-- 17 installing the refrigerant charge, TXV systems will 18 maintain their efficiency. 19 So insummaryenact the SEER 13 standard, 20 don't roll back to 12 and require TXV's for central 21 systems. Thank you. 22 

### MR. BROOKMAN: Thankyouverymuch. Thank 23 you. The next speaker will be Pacific Gas and 24 Electric. 25

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### MR..HUNT: I'mMarshall Hunt withPacific NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 www.nealrgross.com58 1 Gas and Electric Company. We serve about one in ever 2 20 electric customers in the United States. I will 3 truncate my written comments which are in the package 4 for you. Pacific Gas and Electric Company urges the 5 U.S. Department of Energy to reconsider its proposal 6 to retreat from the SEER standard set through due 7 process. Supporting the SEER 13 standard with its 8 industry friendly effective date that is years away 9 demonstrates balanced energy efficiency leadership. 10 The last hearing on these standards was 11 held in November 2000 when the California energy 12 crisis was fast-breaking news. The good news is the 13 aggressive consumer energy conservation we've 14 witnessed has avoided the forecast rolling blackouts 15 in California this past summer. And in fact, with 16 weather adjusted calculations consumers have reduced 17 their peak demand by 10 percent. 18 The bad news is that the lasting effect of 19 the crisis will be the consumer's energy rates will 20 increase by 40 percent or higher and this will last 21 for years. In the chart below and if you have my 22 comments, you can turn the page and see it, this

-- 23 you'll see what happened to the rates and we call them 24 a surcharge but beware this is really a utility rate 25 increase passed by the State Utility Commission. This 

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### 1 Gas andElectric Company. We serve about one inever 2 

### 20**~lectric** 

### customers in the United States. I will 3 truncatemy writtencommentswhich are inthepackage 4 for you. Pacific Gas and Electric Company urges the 5 U.S. Department of Energy to reconsider its proposal 6 to retreat from the SEER standard set through due 7 

### process. Supporting the SEER 13 standard with its 8 industry friendly effective date that is years away 9 demonstrates balanced energy efficiency leadership. 10 The last hearing on these standards was 11 held in November 2000 when the California energy 12 crisis was fast-breaking news. The good news is the 13 aggressive consumer energy conservation we've 14 witnessed has avoided the forecast rolling blackouts 15 

### in California this past summer. And in fact, with 16 weather adjusted calculations consumers have reduced 17 their peak demand by 10 percent. 18 Thebadnews isthatthe lastingeffectof 19 the crisis will be the consumer's energy rates will 20 increase by 40 percent or higher and this will last 21 for years. In the chart below and if you have my 22 comments, you can turn the page and see it, this 23 you'll seewhathappenedtotherates andwe callthem 24 a surcharge but beware this is really a utility rate 25 increasepassedbytheStateUtilityCommission. This

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com59 1 gives new meaning to what a blocked tail rate will be 2 in cost to consumers and it's quite possible for 3 consumers in the Central Valley to be the medium 4 income, poor households or higher to be in the third, 5 fourth and fifth tier. This means that during the 6 summer you'll be paying 18 to 24 cents a kilowatt hour 7 for your air conditioning and this is far and away 8 much higher than any of us would have thought about 9 being possible. 10 And also I might have you all think about 11 what just happened to us with the inconvenient 12 blackout. Well, that was only about one-fourth of what 13 we get as our rolling blackouts and we get a bit more 14 warning in California but it only takes as little as 15 100 megawatts to push us over this edge. And we 16 avoided it this summer. We had some help from the 17 weather and we had some help from our friends in the 18 Northwest, which we appreciate, and we had some help 19 from Federal Government action, but still we keep 20 growing and part of the growth and the load is air 21 conditioning which we would like to have help from. 22 So the sooner we get these standards in place, the 23 better. 24 So, again, we urge the Department to stay 25 the course, stick with what the final rule was in 

### NEALR.GROSS COURT REPORTERSANDTRANSCRIBERS 1323RHODE ISLANDAVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 59 1 

### gives newmeaning to what a blocked tail rate will be 2 in cost to consumers and it's quite possible for 3 consumers in the Central Valley to be the medium 4 

### income, poorhouseholds orhigher tobe in the third, 5 

### fourth and fifth tier. This means that during the 6 

### summeryou'llbepaying 18 

### to 24 

### centsa kilowatt hour 7 

### for your air conditioning and this is far and away 8 

### much higher than any of us would have thought about 9 

### being possible. 10 

### And also I 

### might have you all think about 11 

### what just happened to us with the inconvenient 12 

### blackout. Well, thatwasonlyaboutone-fourthofwhat 13 

### we get as our rolling blackouts andwe get a bit more 14 

### warning in California but it only takes as little as 15 100 

### megawatts to push us over this edge. And 

### we 16 

### avoided it this summer. We had some help from the 17 weather and we had some help from our friends in the 18 

### Northwest, which we appreciate, and we had some help 19 from Federal Government action, but still we keep 20 growing and part of the growth and the load is air 21 

### conditioning which we would like to have help from. 22 So the sooner we get these standards in place, the 23 better. 24 

### So, again, we urge the Department to stay 25 the course, stick with what the final rule was in

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com60 1 January and essentially drop the proposed revision of 2 it. Thank you. 3 MR. BROOKMAN: Thank you very much. The 4 next speaker will be the Texas Ratepayers' 5 Organization to Save Energy. 6 MS. BIEDRZYCKI: Good morning, my name is 7 Carol Biedrzycki. Is this on? 8 MR. BROOKMAN: Yeah, you need to get close 9 to it. 10 MS. BIEDRZYCKI: I'm with Texas 11 Ratepayers' Organization to Save Energy. We're a 12 membership organization in Texas that represents 13 residential consumers before the Public Utility 14 Commission of Texas and in other forums and our 15 mission is affordable electricity and a healthy 16 environment. 17 I didn't realize until this morning that 18 the comments that I filed in this proceeding are 19 longer than anybody else's so, of course, I will not 20 try and go over them with you in any kind of detail 21 and I'm going to work very hard here right now to make 22 sure that I don't have the longest oral comments this 23 morning. 24 I think that I'm here for an important 25 reason and one of them is to convey a couple of 

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### 1 Januaryandessentiallydrop theproposedrevisionof 2 it. Thank you. 3 

### MR. BROOKMAN: Thank you very much. The 4 

### next speaker will be the Texas Ratepayers' 5 Organization to Save Energy. 6 

### MS. BIEDRZYCKI: Goodmorning, my name is 7 

### Carol Biedrzycki. Is this on? 8 

### MR. BROOKMAN: Yeah, youneedtoget close 9 

### to it. 10 

### MS. BIEDRZYCKI: I'm with Texas 11 Ratepayers' Organization to Save Energy. We're a 12 membership organization in Texas that represents 13 residential consumers before the Public Utility 14 Commission of Texas and in other forums and our 15 mission is affordable electricity and a healthy 16 environment. 17 I didn't realize until this morning that 18 the comments that I filed in this proceeding are 19 longer than anybody else's so, of course, I will not 20 try and go over them with you in any kind of detail 21 and I'mgoingtoworkveryhardhereright nowtomake 22 sure that I don't have the longest oral comments this 23 morning. 24 I think that I'm here for an important 25 reason and one of them is to convey a couple of

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com61 1 thoughts to you people and a few facts that are not in 2 my comments. Now, first of all, consumers don't talk 3 about their electric bills. In fact, in Texas people 4 talk about their light bills and then say things like, 5 "I opened my light bill and I almost had a stroke". 6 And I think that that's what we're maybe losing track 7 of here. There's lots of information to support the 8 fact that higher efficiencies are better. I think 9 that you need to think of this rule as a way of 10 providing consumers benefits and a protection that 11 they need and it is the responsibility of our 12 government agencies to live up to standards that 13 consumers expect from them. 14 And the best example that I can think of 15 are our vehicle safety standards. There was a time 16 when cars didn't have seat belts in them. There was 17 a time when cars didn't have air bags. Today when 18 consumers go to buy a new vehicle, they expect it to 19 be safer than the vehicle was that they bought 10 20 years ago or 15 years ago. This standard is about 21 energy efficiency but it's also about providing 22 consumers with a minimum standard of performance that 23 they can count on in the marketplace without having to 24 think about it any further. 25 The increase to SEER 10 was one of the 

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### 61 1 thoughts toyoupeople anda few facts that arenot in 2 my comments. Now, first of all, consumers don't talk 3 about theirelectricbills. In fact, inTexas people 4 talkabout theirlightbillsandthensaythings like, 5 "I opened my light bill and I almost had a stroke". 6 And I think that that'swhat we'remaybe losing track 7 of here. There's lots of information to support the 8 

### fact that higher efficiencies are better. I think 9 that you need to think of this rule as a way of 10 providing consumers benefits and a protection that 11 they need and it is the responsibility of our 12 government agencies to live up to standards that 13 consumers expect from them. 14 And the'best example that I can think of 15 are.our vehicle safety standards. There was a time 16 when cars didn't have seat belts in them. There was 17 a time when cars didn't have air bags. Today when 18 consumers go to buy a new vehicle, they expect it to 19 be safer than the vehicle was that they bought 10 20 

### years ago or 15 years ago. This standard is about 21 energy efficiency but it's also about providing 22 consumerswitha minimum standardofperformance that 23 theycancountoninthemarketplacewithouthavingto 24 think about it any further. 25 The increase to SEER 10 was one of the

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com62 1 most important energy efficiency activities or -- ever 2 and this is even more important because as we move 3 forward, our gas supplies are becoming more uncertain. 4 Electricity prices are rising and as far as consumers 5 are concerned this is the most important thing that 6 can be done to lower consumer energy use and energy 7 prices. 8 And to go back to that car, when we talk 9 about low income customers, low income customers 10 generally buy second-hand and when we look at the 11 safety standards, a person who can't afford to buy a 12 new car, goes to a used car lot. When they go to a 13 used car lot, those used cars still have the seat 14 belts in them and they still have the air bags in 15 them, and they are safer as a result of it. The same 16 principle applies to this standard. 17 If we build new buildings with higher 18 efficiency equipment when that property turns over to 19 another owner, that owner or renter is also going to 20 benefit from the higher efficiency of the air 21 conditioners and other appliances. I know that people 22 in Texas are concerned about energy efficiency. I 23 know they think it's something that we should all be 24 working toward. You'll note in my comments that the 25 13 standard is also supported by the Public Utility 

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### 1 most importantenergyefficiencyactivitiesor -- ever 2 and this is even more important because as we move 3 forward, ourgas suppliesarebecomingmoreuncertain. 4 Electricityprices are risingand as far as consumers 5 are concerned this is the most important thing that 6 can be done to lower consumer energy use and energy 7 prices. 8 And to go back to that car, when we talk 9 about low income customers, low income customers 10 generally buy second-hand and when we look at the 11 safety standards, a person who can't afford to buy a 12 new car, goes to a used car lot. When they go to a 13 used car lot, those used cars still have the seat 14 belts in them and they still have the air bags in 15 them, and they are safer as a result of it. The same 16 principle applies to this standard. 17 

### If we build new buildings with higher 18 

### efficiencyequipment when thatpropertyturns overto 19 another owner, that owner or renter is also going to 20 benefit from the higher efficiency of the air 21 conditionersandotherappliances. I knowthatpeople 22 

### in Texas are concerned about energy efficiency. I 

### 23 know they think it's something that we should all be 24 working toward. You'll note in my comments that the 25 13 standard is also supported by the Public Utility

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com63 1 Commission of Texas and the Texas Natural Resources 2 Conservation Commission. 3 I think that it's a big mistake to even 4 think about rolling the standard back to 12 from 13 5 and since I decided to file comments on this 6 rulemaking, I've talked to so many people, number one, 7 who were unaware of the fact that this type of 8 proceeding was even taking place and said to me, 9 "Well" -- they would all say to me, "Well, Carol, I'm 10 so glad that you're going to be there and I want you 11 to tell them don't roll it back to a 12. Nobody sees 12 the value". I believe it's the job of this agency to 13 serve consumers andwe have to remember that consumers 14 -- the bottom line is, the consumers pay for 15 everything and everything happens because of small 16 consumers. And we can't lose sight of their 17 priorities and their needs in this proceeding and I 18 think it is appropriate for DOE to serve the needs of 19 consumers and also challenge the industry to provide 20 them with better products. 21 And I think that I'd better conclude my 22 remarks because I think I'm getting very close to five 23 minutes. 24 MR. BROOKMAN: Thank you. Thank you so 25 much for summarizing your written comments. The next 

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### 63 

### 1 Commission of Texas and the Texas Natural Resources 2 Conservation Commission. 3 I think that it's a big mistake to even 4 think about rolling the standard back to 12 from 13 5 and since I decided to file comments on this 6 rulemaking, I'vetalkedtosomanypeople, numberone, 7 who were unaware of the fact that this type of 8 proceeding was even taking place and said to me, 9 "Well"

- - theywould all saytome, "Well, Carol, I'm 10 so glad that you're going to be there and I want you 11 to tell themdon't roll it back to a 12. Nobody sees 12 the value". I believe it's the jobof this agency to 13 serveconsumersandwe havetorememberthat consumers 14 

### the bottom line is, the consumers pay for 15 everything and everything happens because of small 16 

### consumers. And we can't lose sight of their 17 priorities and their needs in this proceeding and I 18 think it is appropriate for DOE to serve the needs of 19 consumers and also challenge the industry to provide 20 them with betterproducts. 21 And I think that I'd better conclude my 22 remarksbecause I thinkI'mgettingveryclosetofive 23 minutes. 24 

### MR. BROOKMAN: 

### Thank you. Thank you so 25 much for summarizingyourwrittencomments. The next

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com64 1 speaker will be York International. 2 MR. AMRANE: I'm Dan Arnold of York 3 International couldn't be here today has asked me to 4 present our comments. 5 MR. BROOKMAN: Sure, please state your 6 name for the record. 7 MR. AMRANE: My name is Karim Amrane and 8 as I said, I will be reading York's comments. York 9 International Corporation is a full global 10 manufacturerof heating,ventilating,air conditioning 11 and refrigerationproducts. York's products are sold 12 in more than 100 countries and York has approximately 13 25,000 employees worldwide. York believes that the 14 Department of Energy has taken the right approach in 15 the current proposal to raise the minimum efficiency 16 of residential central air conditioners and heat pumps 17 by 20 percent. We believe this will correct many of 18 the problems that 13 SEER standard would have on the 19 industry and consumers and is in the best interest of 20 the nation. 21 We feel the 12 SEER standard is 22 economically justified where the 13 is not based on 23 the following key points. First, DOE's reverse 24 engineering analysis failed to take into account 25 several issues with the 13 SEER equipment. Second, 

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### speaker will be York International. 2 MR. AMRANE: I'm Dan Arnold of York 3 International couldn't be here today has asked me to 4 

### present our comments. 5 

### MR. BROOKMAN: Sure, please state your 6 

### name for the record. 7 

### MR. AMRANE: My name is Karim Amrane and 8 

### as I said, I will be reading York's comments. York 9 

### International Corporation is a 

### full global 10 

### manufacturerofheating, ventilating, airconditioning 11 

### andrefrigerationproducts. York's products are sold 12 inmore than 100 

### countries andYorkhas approximately 13 25,000 

### employees worldwide. York believes that the 14 

### Department of Energy has taken the right approach in 15 

### the current proposal to raise the minimum efficiency 16 

### ofresidentialcentralairconditionersandheatpumps 17 

### by 20 

### percent. We believe this will correct many of 18 the problems that 13 SEER standard would have'on the 19 

### industryandconsumers and is inthe best interest of 20 

### the nation. 21 We feel the 12 SEER standard is 22 economically justified where the 13 is not based on 23 

### the following key points. First, DOE's reverse 24 engineering analysis failed to take into account 25 

### several issues with the 13 

### SEER equipment. Second,

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com65 1 there is a lack of 13 SEER equipment for many space2 constrained and smaller nicheproducts for the reasons 3 that they are either not technologically feasible or 4 economically viable. 5 Finally, most consumers would not see 6 payback from the 13 SEER standard and the cost burden 7 on low income consumers is significant. With regard 8 to the reverse engineering analysis, our mainproblems 9 have to do with the cost not included in the analysis. 10 Business costs which has increased inventory, 11 warehousing and the conversion to alternative 12 refrigerants,plus increaseddealer or contractor cost 13 for such items as large line sets, mounting pads and 14 ductwork. 15 Additionally, the analysis focused on one 16 size of equipment which was a three-ton unit. We feel 17 the whole range of equipment should have been analyzed 18 as the size issue becomes much more problematic and 19 this more costly in the larger capacities. 20 Relative to space constraint and niche 21 products, we've previously expressed our concernabout 22 our manufactured housing market, particularly with 23 regard to heat pumps. There are very few, if any, 13 24 SEER heat pump models that fit the crowded space 25 constraint of a typical manufactured home. Packaged 

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### 1 there is a lack of 13 SEER equipment for many space2 constrainedandsmallernicheproductsforthereasons 3 that they are either not technologically feasible or 4 

### economicallyviable. 5 

### Finally, most consumers would not see 6 

### payback from the 13 SEER standard and the cost burden 7 

### on low income consumers is significant. With regard 8 

### tothereverseengineeringanalysis, ourmainproblems 9 

### have todowiththe costnot includedinthe analysis. 10 

### Business costs which has increased inventory, 11 warehousing and the conversion to alternative 12 refrigerants, plusincreaseddealerorcontractorcost 13 for such items as large line sets, mounting pads and 14 ductwork. 15 Additionally, the analysis focusedonone 16 sizeofequipmentwhichwas a three-tonunit. We feel 17 thewholerangeofequipment shouldhavebeenanalyzed 18 

### as the size issue becomes much more problematic and 19 this more costly in the larger capacities. 20 

### Relative to space constraint and niche 21 products, we'vepreviouslyexpressedourconcernabout 22 our manufactured housing market, particularly with 23 regard toheat pumps. There are very few, if any, 13 24 SEER heat pump models that fit the crowded space 25 

### constraint of a typical manufactured home. Packaged

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com66 1 units are also a space constraint problem for 2 manufactures at those levels. When ARI states that 84 3 percent of the current products would go away under a 4 13 SEER standard, the net effect is that many 5 manufacturers would have to re-tool or re-engineer 6 many products to re-complete their product lines or 7 exit those markets. We believe this is a violation of 8 both the spirit and the law of NAECA. 9 Finally, a 12 SEER standard is much more 10 economically justified based on ARI cost curve. 11 Additionally, the installed fist cost of air 12 conditioning is a real and tangible issue for low 13 income consumers. For those that say air conditioning 14 is a luxury, or that may low income consumers rent or 15 use fans, I invite you to come to Kansas, Oklahoma, or 16 Texas next summer to tour some non-air conditioned 17 manufactured homes. Very few of these homeowners go 18 without air conditioning for none other than the 19 simple reason that they cannot afford the up-front 20 cost. We support voluntary market transformation 21 programs such as utility rebates in those areas where 22 the higher costs are justified and can reduce the up23 front consumer costs. 24 In addition, we applaud DOE's wisdom in 25 both the current and previous proposal not to impose 

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### 66 1 units are also a space constraint problem for 2 manufactures atthose levels. WhenARI statesthat 84 3 

### percent of the curre.nt products wouldgo awayunder a 4 13 

### SEER standard, the net effect is that many 5 

### manufacturers would have to re-tool or re-engineer 6 many products to re-complete their product lines or 7 

### exit thosemarkets. We believethis isa violationof 8 

### both the spirit and the law of NAECA. 9 

### Finally, a 12 SEER standard is much more 10 

### economically justified based on ARI cost curve. 11 Additionally, the installed fist cost of air 12 conditioning is a real and tangible issue for low 13 

### incomeconsumers. Forthosethat sayairconditioning 14 is a luxury, or that may low income consumers rent or 15 use fans, I inviteyoutocome toKansas, Oklahoma, or 16 Texas next summer to tour some non-air conditioned 17 manufactured homes. Very few of these homeowners go 18 

### without air conditioning for none other than the 19 simple reason that they cannot afford the up-front 20 

### cost. We support voluntary market transformation 21 programs suchas utilityrebates inthose areaswhere 22 the higher costs are justifiedand canreduce the up23 front consumer costs. 24 In addition, we applaud DOE's wisdom in 25 both the current and previous proposal not to impose

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com67 1 a minimum EER or the expansion valve. We agree with 2 DOE's assessment that the EER standard would be 3 counter-productive by discouraging variable speed and 4 modulating equipment which could save consumers 5 substantial amounts of money over the cooling season 6 along with other benefits. We also agree with DOE's 7 decision not to circumvent the test procedure by 8 imposing a TXV requirement and their assessment that 9 key data has not been thoroughly reviewed by all 10 interested parties. 11 We once again appreciate the opportunity 12 to speak. 13 MR. BROOKMAN: Thank you. Several groups 14 asked in advance to speak at this hearing and -- but 15 did not provide advanced copy of their comments. So 16 I don't know whether the copy of these comments exist 17 now or they brought them today. So we're going to 18 take in alphabetical order those groups, those 19 organizations that requested to speak but did not 20 provide advanced copy and the first one is ARI. 21 MS. MILLER: I do want to make a 22 correction. Our advance copy was not here at 1:00 23 o'clock yesterday obviously too late for the 24 Department of Energy. 25 MR. BROOKMAN: Thank you for that 

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### a minimum EER or the expansion valve. We agree with 2 

### DOE's assessment that the EER standard would be 3 counter-productivebydiscouragingvariable speedand 4 

### modulating equipment which could save consumers 5 

### substantial amounts of money over the cooling season 6 

### along with other benefits. We also agree with DOE's 7 

### decision not to circumvent the test procedure by 8 

### imposing a TXV requirement and their assessment that 9 

### key data has not been thoroughly reviewed by all 10 

### interestedparties. 11 

### We once again appreciate the opportunity 12 

### to speak. 13 

### MR. BROOKMAN: Thankyou. Several groups 14 

### asked in advance to speak at this hearing and but 15 

### did not provide advanced copy of their comments. So 16 

### I don't know whether the copyof these comments exist 17 

### now or they brought them today. So we're going to 18 

### take in alphabetical order those groups, those 19 

### organizations that requested to speak but did not 20 

### provide advanced copy and the first one is ARI. 21 

### MS. MILLER: I do want to make a 22 

### correction. Our advance copy was not here at 1:00 23 

### o'clock yesterday obviously too late for the 24 

### Department of Energy. 25

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### MR. BROOKMAN: Thank you for that NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com68 1 correction. 2 MS. MILLER: So everyone should have it 3 although I would warn you based upon Doug's 4 instructions, I'm going to be jumping around and 5 editing trying to stay to my five minutes. 6 MR. BROOKMAN: Thank you so much. 7 MS. MILLER: Hello, my name is Deborah 8 Miller. It's always a pleasure to be here with my 9 friends at DOE and the Energy Efficiency Groups. As 10 many of you know, I'm Vice President of Government 11 Affairs for the Air Conditioning and Refrigeration 12 Institute. I appreciate the opportunity to appear 13 before the Department today. 14 ARI hasworked diligently over the last 20 15 years to improve energy efficiency of residential air 16 conditioners and heat pumps. Yet industry has kept 17 its equipment affordable for consumers. Time 18 constraints requireme to abbreviate my comments about 19 the procedures leading up to this hearing but briefly 20 let me say this; this is a rulemaking begun eight 21 years ago on September 8th, 1993 as part of a 22 seriously flawed eight product notice of proposed 23 rulemaking. As a result of that rulemaking two years 24 later Congress suspended the appliance standards 25 program in order to improveprocedures and protect the 

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### 1 correction. 2 MS. MILLER: So everyone should have it 3 although I would warn you based upon Doug's 4 instructions, I'm going to be jumping around and 5 editing trying to stay to my five minutes. 6 

### MR. BROOKMAN: Thank you so much. 7 

### MS. MILLER: Hello, my name is Deborah 8 

### Miller. It's always a pleasure to be here with my 9 friends at DOE and the Energy Efficiency Groups. As 10 many of you know, I'm Vice President of Government 11 Affairs for the Air Conditioning and Refrigeration 12 Institute. I appreciate the opportunity to appear 13 before the Department today. 14 ARI hasworkeddiligentlyoverthelast20 15 years to improve energyefficiencyof residential air 16 

### conditioners and heat pumps. Yet industry has kept 17 

### its equipment affordable for consumers. Time 18 constraintsrequireme toabbreviatemycommentsabout 19 theprocedures leadingup to this hearingbut briefly 20 let me say thisi 

### this is a rulemaking begun eight 21 years ago on September 8th, 1993 as part of a 22 seriously flawed eight product notice of proposed 23 rulemaking. As a result of that rulemaking two years 24 later Congress suspended the appliance standards 25 programinordertoimproveproceduresandprotectthe

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com69 1 public's and industry's input into the rulemaking 2 process. 3 As many of you know, during my seven-year 4 tenure at the Department of Energy as senior policy 5 advisor to the Assistant Secretary for Energy 6 Efficiency, I led the regulatory reform effort that 7 fixed a broken process by codifying the DOE Process 8 Improvement Rule. Once implemented, however, those 9 procedures were ignored by DOE when in the final 10 weeks, the prior Administration, DOE in its own words, 11 quote, "Rushed" to publish a proposed rule of 12 SEER 12 on October 5, 2000. Then the DOE proceeded contrary 13 to the PIR, to cut short the comment period, injected 14 new analysis into the record with only nine days left 15 in an already abbreviated comment period, refused to 16 extend the comment period, ignored its statutory 17 mandate to balance economic interests in the 18 rulemaking, failed to consult the Department of 19 Justice about the impact that a 13 SEER standardwould 20 have on competition and published a rule of 13 SEER 21 literally in the final minutes of the last 22 Administration with neither nor the staff at DOE nor 23 many participants in the process had ever supported. 24 If ever a rulemaking were tailor-made for 25 reconsideration, review and correction, it is this one 

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### 1 public's and industry's input into the rulemaking 2 

### process. 3 

### As manyofyouknow, duringmy seven-year 4 

### tenure at the Department of Energy as senior policy 5 

### advisor to the Assistant Secretary for Energy 6 

### Efficiency, I led the regulatory reform effort that 7 

### fixed a broken process by codifying the DOE Process 8 

### Improvement Rule. Once implemented, however, those 9 

### procedures were ignored by DOE when in the final 10 weeks, thepriorAdministration, DOE initsownwords, 11 quote, "Rushed'" topublish a proposedrule of 12 SEER 12 on October 5, 

### 2000. Then the DOE proceeded contrary 13 

### to the PIR, to cut short the comment period, injected 14 

### new analysis into the recordwithonlynine days left 15 

### in an already abbreviated comment period, refused to 16 

### extend the comment period, ignored its statutory 17 

### mandate to balance economic interests in the 18 

### rulemaking, failed to consult the Department of 19 

### Justiceabout the impact that a 13 

### SEER standardwould 20 have on competition and published a rule of 13 

### SEER 21 literally in the final minutes of the last 22 Administration with neither nor the staff at DOE nor 23 many participants in the process had ever supported. 24 Ifevera rulemakingwere tailor-made for 25 reconsideration, reviewandcorrection, itisthisone

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW. WASHINGTON, D.C. 20005·3701 www.nealrgross.com70 1 and those of us in the industry most effected by this 2 rule express our appreciation that DOE has had the 3 institutional integrity to step up to the task and 4 conduct a fair review of the record knowing that there 5 would be politically motivated criticism when it did 6 so. To fail to correct errors of the magnitude made 7 here, however, or to argue as some apparently do that 8 the rushed last minute DOE publication on January 9 22nd, 2001 was final, unreviewable and irreversible 10 wouldpave the way for enormous regulatory mischief in 11 the waning days of an Administration, distort the 12 purpose of the Energy Policy and Conservation Act and 13 eradicate proper administrative discretion to correct 14 errors. 15 I am not here today to tell you that a 13 16 SEER minimum standard could not be implemented by the 17 industry. Obviously, air conditioners with 13 SEER 18 are manufactured and sold today. So are 14's, 15's 19 and 16's. We like those products but they are more 20 expensive and for good reason. They cost a lot more 21 to make. Yet they are made and sold today to the 22 fortunate few who can afford them and to those who 23 believe they will recoup the added cost through energy 24 savings. This latter group lives predominantly in the 25 Southern Tier States primarily in Florida, Texas, 

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### 1 and those of us inthe industrymost effectedby this 2 rule express our appreciation that DOE has had the 3 institutional integrity to step up to the task and 4 conducta fairreviewoftherecordknowingthatthere· 5 would be politicallymotivated criticismwhen it did 6 so. To fail to correct errors of the magnitude made 7 here, however, or to argue as some apparentlydo that 8 

### the rushed last minute DOE publication on January 9 

### 22nd, 2001 was final, unreviewable and irreversible 10 wouldpavethewayforenormousregulatorymischief in 11 the waning days of an Administration, distort the 12 purpose of the EnergyPolicy and ConservationAct and 13 eradicateproperadministrativediscretiontocorrect 14 errors. 15 I 

### am not here today to tell you that a 13 16 SEER minimum standardcouldnot be implementedbythe 17 

### industry. Obviously, air conditioners with 13 SEER 18 

### are manufactured and sold today. So are 14's, 15's 19 

### and 16's. We like those products but they are more 20 expensive and for good reason. They cost a lot more 21 to make. Yet they are made and sold today to the 22 fortunate few who can afford them and to those who 23 believetheywillrecouptheaddedcostthroughenergy 24 savings. Thislattergrouplivespredominantlyinthe 25 Southern Tier States primarily in Florida, Texas,

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com71 1 Arizona and Southern California. 2 Frankly, if the industry had only its 3 immediate self-interest in mind, it would rally behind 4 a 13 SEER standard and take the money and run but the 5 short term monetary boom to industry from a 13 SEER 6 standard would be outweighed by the impact on 7 consumers, jobs and ultimately in the long term the 8 industry. As a map of the United States clearly 9 demonstrates, there will be no meaningful economic 10 payback for the overwhelming majority of the country. 11 Seventy-five percent of consumers 12 purchasing a 13 SEER will incur a net cost. The 13 situation is even worse for low income consumers. 14 Eighty-three percent will not benefit from a 13 SEER 15 standard. By contrast, here is what a 12 SEER 16 standard achieves; a 20 percent increase over current 17 energy efficiency standards, affordable air 18 conditioning for more Americans, preservation of jobs 19 in the United States and preservation of competition 20 in the industry. 21 In conclusion ARI continues to support a 22 20 percent increase in energy efficiency standards, 12 23 SEER standards would be stringent, would save a 24 substantial amount of energy and at the same time 25 would not have nearly the adverse effects of the 13 

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### 1 Arizona and Southern California. 2 

### Frankiy, if the industry had only its 3 

### immediate self-interestinmind, itwouldrallybehind 4 

### a 13 SEER standard and take the money and runbut the 5 

### short term monetary boom to industry from a 13 SEER 6 

### standard would be outweighed by the impact on 7 

### consumers, jobs and ultimately in the long term the 8 

### industry. As a map of the United States clearly 9 

### demonstrates, there will be no meaningful economic 10 payback for the overwhelmingmajorityof the country. 11 

### Seventy-five percent of consumers 12 purchasing a 13 SEER will incur a net cost. The 13 situation is even worse for low income consumers. 14 Eighty-three percent will not benefit from a 13 SEER 15 

### standard. By contrast, here is what a 12 SEER 16 standardachieves; a 20 percent increaseover current 17 

### energy efficiency standards, affordable air 18 conditioningformoreAmericans, preservationofjobs 19 in the United States and preservation of competition 20 in the industry. 21 In conclusionARI continues to support a 22 20percentincreaseinenergyefficiencystandards, 12 23 SEER standards would be stringent, would save a 24 substantial amount of energy and at the same time 25 would not have nearly the adverse effects of the 13

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com72 1 SEER. Thank you for the opportunity to express ARI's 2 support for a 20 percent increase in efficiency in a 3 12 SEER standard. 4 ; MR. BROOKMAN: Thank you. The next 5 speaker is the Appliance Standards Awareness Project. 6 MR. deLASKI: Thanks. I'll just make a 7 couple of brief comments and then we'll submit written 8 comments for the record by the 19th. I'm Andrew 9 deLaski, the Director of the Appliance Standards 10 Awareness Project. We're a coalition effort of some 11 of the organizations here supporting SEER 13. And I 12 want to make just three points. First of all, people 13 are counting on the Department to get this standard 14 right. People count on the Department to set energy 15 efficiency standards that are cost effective. 16 I want to cite a couple of pieces of 17 evidence to support that. One is that in CNN, USA 18 Today, Gallop Poll just conducted last spring, 87 19 percent who responded favored increased energy 20 efficiency in appliances. There was a very specific 21 question on appliances and it wasn't about air 22 conditioners but it was about the role of the 23 government in addressing energy efficiency, and it 24 specifically called out this program as an area which 25 people across the country are counting on action. 

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### 72 1 SEER. Thankyou for the opportunityto express ARI's 2 support for a 20 percent increase in efficiency in a 3 12 SEER standard. 4 

### MR. BROOKMAN: Thank you. The next 5 speakeris theAppliance StandardsAwareness Project. 6 

### MR. deLASKI: Thanks. I'll just make a 7 coupleofbriefcomments andthenwe'll submitwritten 8 

### comments for the record by the 19th. I'm Andrew 9 deLaski, the Director of the Appliance Standards 10 Awareness Project. We're a coalition effort of some 11 of the organizations here supporting SEER 13. And I 12 want tomake just three points. First of all, people 13 are counting on the Department to get this standard 14 right. People count on the Department to set energy 15 efficiency standards that are cost effective. 16 

### I want to cite a couple of pieces of 17 evidence to support that. One is that in CNN, USA 18 Today, Gallop Poll just conducted last spring, 87 19 percent who responded favored increased energy 20 efficiency in appliances. There was a very specific 21 question on appliances and it wasn't about air 22 conditioners but it was about the role of the 23 government in addressing energy efficiency, and it 24 specificallycalledout thisprogram as an areawhich 25 people across the country are counting on action.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com73 1 In this work over the past couple of 2 years, I've talked to a lot of people about this 3 issue, especially over the past several months. I 4 know that more than -- in addition to the groups that 5 are here today, it's not easy for many groups like 6 Carol's or others to come to a meeting like this in 7 Washington. More than 100 organizations are on the 8 record supporting keeping the SEER 13 standard; 9 utilities, consumer groups, environmental groups, 10 small business and, of course, some of the air 11 conditioner manufacturers and agencies also. 12 I'd also note that in just the past few 13 weeks, more than 10,000 ordinary citizens have written 14 Secretary Abraham to ask him to keep the SEER 13 15 standard. As we talk to people about this issue, it's 16 very apparent that people want to see the Department 17 push efficiency and that SEER 13 is a reasonable 18 level, compromised level. There's very strong support 19 to keeping the standard at the level set last winter. 20 While we support this standard program in 21 general, I want to emphasize that this standard is 22 particularly important for two reasons. First, the 23 market does relatively little to encourage efficiency 24 in air conditioners. You've heard today energy -- the 25 SEER 13 unit is a premium product and it goes to a 

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### 73 1 In this work over the past couple of 2 years, I've talked to a lot of people about this 3 

### issue, especially over the past several months. I 4 

### know thatmore than-- in additionto the groups that 5 are here today, it's not easy for many groups like 6 Carol's or others to come to a meeting like this in 7 

### Washington. More than 100 organizations are on the 8 record supporting keeping the SEER 13 standard; 9 utilities, consumer groups, environmental groups, 10 small business and, of course, some of the air 11 conditioner manufacturers and agencies also. 12 I'd also note that in just the past few 13 weeks, morethan10,000ordinarycitizenshavewritten 14 Secretary Abraham to ask him to keep the SEER 13 15 standard. As we talktopeopleabout this issue, it's 16 very apparent that people want to see the Department 17 push efficiency and that SEER 13 is a reasonable 18 level, compromisedlevel. There'sverystrongsupport 19 to keepingthe standard at the level set last winter. 20 Whilewe support this standardprogramin 21 general, I want to emphasize that this standard is 22 particularly important for two reasons. First, the 23 market does relativelylittletoencourage efficiency 24 inairconditioners. You'veheardtodayenergy - - the 25 SEER 13 unit is a premium product and it goes to a

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 www.nealrgross.com74 1 relatively small portion of the market. In new home 2 construction, builders have every incentive to keep 3 building costs down but little incentive to control 4 operating costs. Few -- there are some builders who 5 are using energy efficient air conditions but for the 6 most part, they put the least efficient in the home. 7 In the replacement market, as has been 8 discussed, one of the main ways that most 9 manufacturers distinguish the premium products is 10 through efficiency. These premium products carry 11 steeper mark-ups and the standard efficiency of the 12 basic units. Second, this particular standard has 13 tremendous impact on our energy systems. Air 14 conditioners are just about synonymous with peak 15 demand. By making them more efficient, we reduce the 16 need to build new power plants and the associated 17 transmissionanddistribution systems infra-structured 18 to support them. 19 According to the most recent ACEEE 20 analysis, the DOE data, the SEER 13 standard avoids 21 the need to build 190 power plants by the year 2030. 22 ACEEE estimates that rolling the standard back to the 23 weaker level as has been proposed by the Department, 24 would force the nation to build dozens of additional 25 power plants, increase the electricity use by 

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### 1 relatively small portion of the market. In new home 2 construction, builders have every incentive to keep 3 building costs down but little incentive to control 4 

### operating costs. Few

-- there are some builders who 5 

### are usingenergyefficient air conditionsbut for the 6 

### most part, they put the least efficient in the home. 7 

### In the replacement market, as has been 8 

### discussed, one of the main ways that most 9 manufacturers distinguish the premium products is 10 through efficiency. These premium products carry 11 steeper mark-ups and the standard efficiency of the 12 basic units. Second, this particular standard has 13 tremendous impact on our energy systems. Air 14 conditioners are just about synonymous with peak 15 demand. Bymaking themmore efficient, we reduce the 16 need to build new power plants and the associated 17 transmissionanddistributionsystemsinfra-structured 18 to support them. 19 According to the most recent ACEEE 20 analysis, the DOE data, the SEER 13 standard avoids 21 the need to build 190 power plants by the year 2030. 22 ACEEE estimates that rollingthe standardbackto the 23 weaker level as has been proposed by the Department, 24 would force the nation to build dozens of additional 25 

### power plants,

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### increase the electricity use by NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com75 1 approximately 15 billion kilowatt hours per year and 2 increase consumer expenditures by more than a billion 3 dollars per year. 4 Finally, I want to suggest that today we 5 face a very different world than when we held a 6 hearing -- the Department held hearings on this issue 7 a year ago. In the coming months there will 8 discussion over how to make our energy systems more 9 secure. It's an important discussion to have. And 10 there's no energy resource that's more secure than 11 energy efficiency. I want to quote from a letter 12 being delivered today signedby about 40 organizations 13 to Secretary Abraham supporting the SEER 13 standard. 14 This is a quote. 15 "As the nation strives to improve our 16 energy security, increased support for improved 17 efficiency must be part of a balanced policy for 18 reducing our dependence on volatile fossil fuel 19 markets and vulnerable electricity supply systems. 20 Improved efficiency is an inherent way to meet the 21 energy needs of a growing economy that is unaffected 22 by supplier price disruptions". 23 In closing, the SEER 13 standard is more 24 important than ever and I want to urge the Department 25 to keep the standard as it was issued last winter. 

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### 1 approximately 15 billion kilowatt hours per year and 2 increase consumerexpendituresbymore thana billion 3 dollars per year. 4 Finally, I want to suggest that today we 5 face a very different world than when we held a 6 hearing

-- the Department heldhearings on this issue 7 

### a year ago. In the coming months there will 8 discussion over how to make our energy systems more 9 

### secure. It's an important discussion to have. And 

### 10 there's no energy resource that's more secure than 11 energy efficiency. I want to quote from a letter 12 beingdeliveredtodaysignedbyabout40organizations 13 to SecretaryAbraham supportingthe SEER 13 standard. 14 This is a quote. 15 liAs the nation strives to improve our 16 

### energy security, increased support for improved 17 efficiency must be part of a balanced policy for 18 reducing our dependence on volatile fossil fuel 19 markets and vulnerable electricity supply systems. 20 Improved efficiency is an inherent way to meet the 21 energy needs of a growing economy that is unaffected 22 by supplier price disruptions". 23 In closing, the SEER 13 standard is more 24 important thanever and I want to urge the Department 25 to keep the standard as it was issued last winter.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com76 1 Thanks for the opportunity to comment. 2 MR. BROOKMAN: Thank you very much. The 3 next speaker will be the District of Columbia Public 4 Service Commission. As I understand it, we have one 5 of the Commissioners with us. 6 MR. MEYERS: Yes, good morning. I'm Ed 7 Meyers and I am a commissioner on the DC Public 8 Service Commission. And actually, I'm testifying on 9 behalf of the National Association of Regulatory 10 Utility Commissioners, NARUC. I'm also a member of 11 the Energy Resource and the Environment Committee and 12 I chair the Energy Efficiency Subcommittee of NARUC. 13 Attached to my statement, I gave about 10 14 copies of so this morning, I don't know if you have 15 them. Some are resolutions in support of energy 16 efficiency standards. The one I would really like to 17 call your attention to is the one dated July of 2000 18 where we specifically came out for the standard, the 19 SEER standard of 13. Now NARUC doesn't often get real 20 specific in our standards, very general. We have 21 Republicans, we have Democrats. We're all across the 22 south and west and everywhere so our resolutions tend 23 to be on the general side. 24 This one was very specific. It came out 25 for 13. We had debate on it. We have some 230 of us 

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### 1 Thanks for the opportunity to comment. 2 MR. BROOKMAN: Thank you 

### very much. The 3 next speaker will be the District of Columbia Public 4 Service Commission. As I understand it, we have one 5 of the Commissioners with us. 6 

### MR. MEYERS: Yes, good morning. I'm Ed 7 Meyers and I am a commissioner on the DC P).1blic 8 Service Commission. And actually, I'm testifying on 9 behalf of the National Association of Regulatory 10 Utility Commissioners, NARUC. I'm also a member of 11 the EnergyResource andtheEnvironment Committee and 12 I chair the Energy Efficiency Subcommittee of NARUC. 13 Attachedtomy statement, I gave about 10 14 copies of so this morning, I don't know if you 

### have 15 them. Some are resolutions J.n support of energy 16 efficiencystandards. The one I would reallylike to 17 call your attention to is the one dated July of 2000 18 where we specifically came out for the standard, the 19 SEER standardof 13. NowNARUC doesn't oftenget real 20 specific in our standards, very general. We have 21 Republicans, we haveDemocrats. We'reall acrossthe 22 south andwest andeverywhere soourresolutions tend 23 to be on the general side. 24 

### This one was very specific. It came out 25 for 13. We haddebate on it. We have some 230 of us

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com77 1 regulatory utility commissioners appointed by 2 governors around America and it was unanimous, we all 3 supported the SEER standard of 13. And we had a lot 4 of discussion on that in our committee. Andrew was 5 there, others were there. And it's out jobs to 6 balance the interests of the industry and the 7 consumers. That's what we do for a living. 8 And so we had unanimous support of that 9 standard of SEER 13. Let me give you some data here. 10 The standards on appliances have already saved 11 something like $33 billion in net benefits for 12 consumers or that's a figure from 1990 actually going 13 out a little bit to 2010. And there's a benefit cost 14 ratio for these of 3.5. So every dollar it costs and 15 we've heard people speak of the cost of it, who 16 provide for increased efficiency, you get $3.5 back. 17 Bill Prindle and others have spoken to the after18 shocks of September 11th. I'd like to associate my 19 remarks with his. 20 We have a continuing crisis in the supply 21 of energy ongoing in the West Coast in particular but 22 other places in America. Increased worries over 23 dependence on foreign oil and we took all of these 24 into account in developing our resolution. Now is not 25 the time to retreat or compromise and we feel very 

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### 77 1 

### regulatory utility commissioners appointed by 2 governors aroundAmerica and itwas unanimous, we all 3 supported the SEER standard of 13. And we had a lot 4 

### of discussion on that in our committee. Andrew was 5 

### there, others were there. And it's out jobs to 6 balance the interests of the industry and the 7 consumers. That's what we do for a living. 8 

### And so we had unanimous support of that 9 standardof SEER 13. Let me giveyou some data here. 10 The standards on appliances have already saved 11 something like $33 billion in net benefits for 12 consumers orthat's a figure from 1990 actuallygoing 13 out a littlebit to 2010. And there's a benefit cost 14 ratio for these of 3.5. So everydollar it costs and 15 we've heard people speak of the cost of it, who 16 provide for increased efficiency, you get $3.5 back. 17 Bill Prindle and others have spoken to the after18 

### shocks of September 11th. I'd like to associate my 19 remarks with his. 20 We have a continuingcrisis inthe supply 21 of energyongoing in theWest Coast inparticularbut 22 other places in America. Increased worries over 23 dependence on foreign oil and we took all of these 24 intoaccount indevelopingourresolution. Now isnot 25 the time to retreat or compromise and we feel very

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com78 1 strongly about this. 2 Finally, we've given some data there on 3 what you get from a 13 standard relative to a 12. 4 Consumers would save a billion dollars a year on their 5 electricity bills, use 15 billion kilowatt hours per 6 year less and peak demand would be 18,000 megawatts 7 lower with the 13 standard than it would be with a 12 8 standard and those 190 plants that Andrew deLaski 9 referenced. So as you see, we strongly support the 10 standard of 13. Thank you very much. 11 MR. BROOKMAN: Thank you very much. The 12 Northwest Power Planning Council will be the next 13 speaker. 14 MR. ECKMAN: Thank you. I'm Tom Eckman 15 with the Northwest Power Planning Council. I'd like 16 to summarize the written comments that we have 17 submitted but haven't been reproduced yet. Actually, 18 I'd like to bring you greetings from the great desert 19 Northwest. Last year was the driest water year on 20 record going back 92 years. The Northwest made it 21 through that summer, this last summer without black22 outs because one-half of the industrial electric 23 capacity was shut down. That's who we helped 24 California meet their needs. It's not because that's 25 a preferred alternative. 

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### 1 strongly about this. 2 Finally, we've given some data there on 3 what you get from a 13 standard relative to a 12. 4 Consumerswould savea billiondollarsa yearontheir 5 electricitybills, use 15 billion kilowatt hours per 6 year less and peak demand would be 18,000 megawatts 7 lowerwith the 13 standardthan itwouldbe with a 12 8 standard and those 190 plants that Andrew deLaski 9 

### referenced. So as you see, we strongly support the 10 standard of 13. Thank you very much. 11 MR. BROOKMAN: Thank you very much. The 12 Northwest Power Planning Council will be the next 13 speaker. 14 

### MR. ECKMAN: Thank you. I'm Tom Eckman 15 with the Northwest Power Planning Council. I'd like 16 to summarize the written comments that we have 17 submittedbut haven'tbeenreproducedyet. Actually, 18 I'd like tobringyou greetings from the great desert 19 Northwest. Last year was the driest water year on 20 record going back 92 years. The Northwest made it 21 through that summer, this last summer without black22 outs because one-half of the industrial electric 23 capacity was shut down. That's who we helped 24 Californiameet theirneeds. It'snot because that's 25 a preferred alternative.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com79 1 I'd like to read something like a rather 2 litany of -- a villainous litany of the events that 3 has changed the way we perceive electric power in the 4 Northwest from the perspective of the consumer. I 5 have a survey that we did of rate increases that have 6 taken place since 1999, most of them in the last 7 year. I will start; Montana Power 29 percent, 8 Snohomish PD, 59 percent, Vista Power, 65 percent, 9 Puget Sound Power and Electric, 18 percent, Portland 10 General Electric, 26 percent, Eugene Power, 36 11 percent, Springfield Utility Board, 29 percent, Carte 12 Public Utilities, 48 percent, Emerald PUD, 35 percent, 13 Tacoma Power 37 percent, Idaho Power 62 percent, 14 Seattle City Light 29 percent. 15 These utilities represent 80 percent of 16 the residential customers in the Northwest. Their 17 rates went up on average 31 percent. That data is new 18 data. If we want to reconsider a SEER 13 this data 19 needs to be entered in for consideration of whether, 20 indeed, the Northwest which is probably represented in 21 a fair fraction of the 39 percent of the consumers who 22 would be economically disadvantaged by the old record, 23 I think that number would be reduced significantly. 24 Without any new rate increases with the 25 calculations based on the DOE's own analysis, the HSPF 

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### 79 1 I'd like to read something like a rather 2 litany of

-- a villainous litany of the events that 3 has changedthe waywe perceive electric power in the 4 

### Northwest from the perspective of the consumer. I 

### 5 have a survey that we did of rate increases that have 6 taken place since 1999, most of them in the last 7 

### year. I will starti 

### Montana Power 29 percent, 8 Snohomish PD, 59 percent, Vista Power, 65 percent, 9 Puget Sound Power and Electric, 18 percent, Portland 10 

### General Electric, 26 percent, Eugene Power, 36 

### 11 percent, SpringfieldUtilityBoard, 29 percent, Carte 12 PublicUtilities, 48percent, EmeraldPUD, 35percent, 13 Tacoma Power 37 percent, Idaho Power 62 percent, 14 Seattle City Light 29 percent. 15 These utilities represent 80 percent of 16 

### the residential customers in the Northwest. Their 17 rateswent uponaverage 31percent. That data isnew 18 data. If we want to reconsider a SEER 13 this data 19 needs to be entered in for consideration of whether, 20 indeed, theNorthwestwhichisprobablyrepresentedin 21 a fair fraction of the 39percentof the consumerswho 22 wouldbeeconomicallydisadvantagedbytheoldrecord, 23 I think that number would be reduced significantly. 24 Without any new rate increases with the 25 calculationsbasedontheDOE'sown analysis, theHSPF

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com80 1 7.7 and SEER 13 split system heat pump already passes 2 the rebuttal presumption of a three-year payback or 3 less by the data that's on the record today. If we 4 re-open the record for reconsideration of new policy, 5 input and new analytical input, this rate increase

-- 6 these rate increases will certainly bring in other 7 systems probably passing the rebuttal presumption. 8 I won't say any more. Thank you. 9 MR. BROOKMAN: Thank you, Tom. I have 10 reached the bottom of my list for those people that 11 requested in advance of this hearing the opportunity 12 to speak. Let me just have a show of hands. How many 13 additional people would like to speak on the record? 14 We have one, two, three, only three. Here's what I'm 15 going to suggest; that we hear these last three 16 speakers and then if you really are desperate, we 17 could take a break. If you're not, I'm going to 18 suggest we plug on and stop at noon for lunch and just 19 keep pressing on with the work here and we'll take it 20 from there. 21 So let's do it that way. Is that okay 22 with everybody? Okay, let's proceed with that then. 23 I saw Michael Martin first. I also saw Charlie 24 Stephens and there was a third person, yes, if you 25 would, you'll come third. Michael Martin, please. 

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### 1 7.7 and SEER 13 split systemheat pump alreadypasses 2 the rebuttal presumption of a three-year payback or 3 

### less by the data that's on the record today. If we 4 re-open the record for reconsiderationof newpolicy, 5 input andnew analytical input, this rate increase

-- 6 these rate increases will certainly bring in other 7 systems probablypassing the rebuttal presumption. 8 

### I won't say any more. Thank you. 9 

### MR. BROOKMAN: Thank you, Tom. I have 10 reached the bottom of my list for those people that 11 requested in advance of this hearing the opportunity 12 to speak. Let me justhave a showofhands. How many 13 additional people would like to speak on the record? 14 We have one, two, three, onlythree. Here's what I'm 15 going to suggesti 

### that we hear these last three 16 speakers and then if you really are desperate, we 17 

### could take a break. I f you're not, I'm going to 18 suggestwe plugonand stopatnoonfor lunchandjust 19 keeppressingonwith the work here andwe'll take it 20 from there. 21 So let's do it that way. Is that okay 22 with everybody? Okay, let's proceed with that then. 23 

### I saw Michael Martin first. I also saw Charlie 24 Stephens and there was a third person, yes, if you 25 would, you'll come third. Michael Martin, please.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com81 1 MR. MARTIN: I'm Michael Martin with the 2 California Energy Commission. I did send something in 3 but whether I goofed up or what happened, I'm not 4 quite sure. I would like to bring a personal note to 5 the staff and the Under-Secretary, who is 6 unfortunately not with us here, from one public 7 servant to a number of other public servants. My 8 first -- I've been working with these people here for 9 a very long time. My first air conditioning hearing 10 that I attended at DOE was 26 years ago. The air 11 conditioning didn't work then. Now we've got ahead of 12 that; the air conditioning works, but the lights went 13 out. 14 I have suffered through changes of 15 administration from Democrat to Republican and 16 Republican to Democrat on the state basis and you are 17 suffering through this change of administration now. 18 And what tends to happen when you get a change of 19 administration is somebody wants to do something in a 20 big hurry and they do something and then they learn 21 more about it and they regret what they've done, but 22 the folks on your level and my level get stuck in the 23 middle and that's where you are now and I want to 24 transmit my sympathies from us in California to you 25 folks here. 

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### 81 1 

### MR. MARTIN: I'mMichael Martin with the 2 CaliforniaEnergyCommission. I didsendsomethingin 3 but whether I goofed up or what happened, I'm not 4 

### quite sure. I would like tobring a personal note to 5 

### the staff and the Under-Secretary, who is 6 

### unfortunately not with us here, from one public 7 

### servant to a number of other public servants. My 8 first

-- I've beenworkingwith these people here for 9 a very long time. My first air conditioning hearing 10 

### that I attended at DOE was 26 years ago. The air 11 conditioningdidn'tworkthen. Nowwe'vegot aheadof 12 that; the airconditioningworks, but the lightswent 13 out. 14 

### I have suffered through changes of 15 administration from Democrat to Republican and 16 Republican toDemocrat on the statebasis andyou are 17 suffering through this change of administration now. 18 And what tends to happen when you get a change of 19 administration is somebodywants to do something ina 20 big hurry and they do something and then they learn 21 more about it and they regret what they've done, but 22 the folks onyour level andmy level get stuck inthe 23 middle and that's where you are now and I want to 24 transmit my sympathies from us in California to you 25 folks here.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com82 1 And what you're proposing is contrary to 2 the national policy as expressed by both President 3 Clinton and President Bush. In his first week in 4 office, President Bushwas naturally suspicious of the 5 many final rules published in January 2001 and decided 6 to look at them again carefully. One of the things I 7 have noticed is when there's a change of 8 administration, the outgoing administration never 9 briefs the incoming administration they just lost the 10 election to and action was taken there that is no 11 longer in the public interest. 12 What has happened since then is President 13 Bush came to California to talk about energy and he 14 encouraged us to conserve more energy. He then showed 15 that he really meant it by issuing and Executive Order 16 telling you folks to do something about television 17 sets and other similar products. The National Energy 18 Policy that you have quoted in each of these meetings 19 I've been to the last two, three weeks here, is 20 telling you to do this energy conservation activity 21 and I sense that if it happened today that press 22 release that came out of the White House indicating 23 that they wanted to hold everything and to roll back 24 would not have come out today. 25 As I look at the predicament that you're 

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### 82 1 And what you're proposing is contrary to 2 the national policy as expressed by both President 3 

### Clinton and President Bush. In his first week in 4 

### office, PresidentBushwasnaturallysuspiciousofthe 5 

### manyfinal rulespublishedinJanuary2001 anddecided 

### 6 to look at them again carefully. One of the things 

### I 7 

### have noticed is when there's a 

### change of 8 administration, the outgoing administration never 9 briefs the incoming administrationtheyjust lost the 10 election to and action was taken there that is no 11 longer in the public interest. 12 What has happened since then is President 13 Bush came to California to talk about energy and he 14 encouragedus toconservemore energy. He thenshowed 15 thathe reallymeant itbyissuingandExecutiveOrder 16 telling you folks to do something about television 17 sets andother similarproducts. The National Energy 18 Policythatyou have quoted ineachof these meetings 19 I've been to the last two, three weeks here, is 20 telling you to do this energy conservation activity 21 and I sense that if it happened today that press 22 release that came out of the White House indicating 23 that they wanted to hold everything and to roll back 24 would not have come out today. 25 As I look at the predicament that you're

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com83 1 in and I've been in it, too, we are telling you, we 2 will tell you now at this meeting and we'll tell you 3 in writing, that you are breaking the law. It's 4 extremely difficult for you to come out with a notice 5 in the public record saying, "Yes, we broke the law 6 and we're going to go back". However, you have got an 7 awful lot of information that's being given to you 8 today indicating that the change that you are 9 proposing is mad policy. 10 I'm most encouraged to hear that we 11 haven't been arguing about the legalities in the 12 comments that I've heard so far but the question that 13 -- the proposal that you're making is not in the 14 public interest and I urge you to abandon this before 15 we get into court and you get told by a court that you 16 have broken the law. And I think you have the ability 17 probably to beat the courts to it, but we are at the 18 same time friends and have sued you as well because we 19 feel very strongly about it. We do, incidentally, we 20 have adopted the 13 SEER standard for California

-- 21 MR. BROOKMAN: Thank you. 22 MR. MARTIN: -- with additional EER 23 requirements which you chose not to take, which backs 24 up what Kit was saying, what you actually did, you're 25 trying to roll back was a compromise in itself. 

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### 1 in and I've been in it, too, we are telling you, we 2 will tell you now at this meeting and we'll tell you 3 

### in writing, that you are breaking the law. It's 4 extremelydifficult for you to come out witha notice 5 in the public record saying, "Yes, we broke the law 6 andwe'regoingtogobackII. 

### However, youhavegot an 7 awful lot of information that's being given to you 8 today indicating that the change that you are 9 proposing is mad policy. 10 

### I'm most encouraged to hear that we 11 haven't been arguing about the legalities in the 12 comments that I've heard so farbut the question that 13 the proposal that you're making is not in the 14 public interest and I urge you to abandon this before 15 we get intocourt andyouget toldbya court thatyou 16 havebrokenthe law. And I thinkyouhave the ability 17 probably to beat the courts to it, but we are at the 18 same time friends andhave suedyouaswellbecausewe 19 feel very stronglyabout it. We do, incidentally, we 20 have adopted the 13 SEER standard for California

-- 21 MR. BROOKMAN: Thank you. 22 MR. MARTIN: with additional EER 23 requirements whichyou chose not to take, whichbacks 24 up what Kit was saying, what you actuallydid, you're 25 trying to roll back was a compromise in itself.

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 www.nealrgross.com84 1 MR. BROOKMAN: Thank you. Our next 2 speaker will be the Oregon Department of Energy. 3 MR. STEPHENS: Most of you will know

-- 4 most of the people I know here in the room. I'm 5 Charlie Stephens with the Oregon Office of Energy and 6 those of you who know me will know that I don't mean 7 this personally but I'm not at all happy to have to be 8 here this morning. 9 I originally decided not to be here this 10 morning and to be frank, the reason I'm here is your 11 grandchildren or rathermore specifically the quality 12 of life that your grandchildren may enjoywhen they're 13 your age. It's my job in Oregon to be an expert in 14 residential energy efficiency for the citizens of 15 Oregon. In that capacity, pretty much every day I'll 16 talk to a dozen or more stakeholders in that effort. 17 They range from manufacturers to distributors and 18 wholesalers, to contractors and installers to the 19 citizens who buy an operate the kinds of systems that 20 are subject here today. 21 I've learned some things in that capacity. 22 I'll be brief. I learned that the costs that are in 23 the record today for achieving a SEER 13 performance 24 level and an HSPS 7.7 or 7.9 level that are in the 25 record are too high. I've also learned that the 

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### 1 MR. BROOKMAN: Thank you. Our next 2 speaker will be the Oregon Department of Energy. 3 

### MR. STEPHENS: Most of you will know 4 

### most of the people I know here in the room. I'm 5 Charlie Stephenswiththe OregonOffice of Energyand 6 those of you who know me will know that I don't mean 7 thispersonallybut I'mnot at all happytohave tobe 8 here this morning. 9 I originally decided not to be here this 10 morning and to be frank, the reason I'm here is your 11 grandchildrenorrathermore specificallythe quality 12 oflifethatyourgrandchildrenmayenjoywhenthey're 13 your age. It's my job in Oregon to be an expert in 14 residential energy efficiency for the citizens of 15 Oregon. In that capacity, prettymuch everyday I'll 16 talk to a dozen or more stakeholders in that effort. 17 They range from manufacturers to distributors and 18 wholesalers, to contractors and installers to the 19 citizenswho buyan operate the kinds of systems that 20 are subject here today. 21 I'velearnedsomethingsinthatcapacity. 22 I'll be brief. I learned that the costs that are in 23 the record today for achieving a SEER 13 performance 24 level and an HSPS 7.7 or 7.9 level that are in the 25 

### record are too high. I've also learned that the

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 www.nealrgross.com85 1 savings, financial savings here are too low. I know 2 Tom Eckman has gone into the details, so I won't 3 bother you about those but it's part of my job to look 4 at the future of energy prices and energy supplies and 5 make some judgments about what we have to do to 6 compensate for those and I'm not very happy by the 7 picture I see. 8 I also know that the low income consumers 9 that are going to benefit the most from this standard 10 are not the people who have air conditioning. They're 11 the people whose bills are going up as chronicalled by 12 Tom because of the relatively dismal efficiency of 13 some of our peak electric system loads, substantially 14 air conditioning systems. We need to address that. 15 In fact, the American economy in the next 16 20 to 25 years, well within the analysis period of 17 this rulemaking and within the lifetime of many of the 18 systems that are subject to this rulemaking. The 19 American economy needs to shed 75 percent of its 20 resources through-put including energy and I would 21 urge the Department to nudge the nearsighted down that 22 path by reiterating the January 2001 rule that they 23 originally published. Some of us would rather work on 24 the other 45 percent than pursue that other 30 percent 25 but we'll pursue it if we have to. Thank you. 

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### 1 savings, financial savings here are too low. I know 2 Tom Eckman has gone into the details, so I won't 3 botheryou about those but it'spart of my jobto look 4 at the future of energyprices andenergy supplies and 5 make some judgments about what we have to do to 6 compensate for those and I'm not very happy by the 7 picture I see. 8 I also know that the low income consumers 9 that are going to benefit the most from this standard 10 are not thepeoplewho have airconditioning. They're 11 thepeoplewhosebills are goingup as chronicalledby 12 Tom because of the relatively dismal efficiency of 13 some of ourpeak electric system loads, substantially 14 alr conditioning systems. We need to address that. 15 In fact, the American economy in the next 16 20 to 25 years, well within the analysis period of 17 this rulemakingandwithinthe lifetimeofmanyof the 18 

### systems that are subject to this rulemaking. The 19 American economy needs to shed 75 percent of its 20 resources through-put including energy and I would 21 urge the Departmenttonudgethenearsighteddown that 22 path by reiterating the January 2001 rule that they 23 originallypublished. Some ofus wouldratherworkon 24 the other45 percent thanpursue that other 30percent 25 but we'll pursue it if we have to. Thank you.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com86 1 MR. BROOKMAN: Thank you. And, sir, would 2 you go to the microphone, please? 3 MR. JACOBSON: Good morning and thank you 4 ever so much for affording me this opportunity. My 5 name is Morey J. Jacobson. I'm from the State of 6 Florida and I in my lifetime in the State of Florida 7 have gone through the winds of change many, many 8 times, particularly as it relates to the questions of 9 energy and its consumption as it effects the people of 10 Florida. As many of you probably know or should know, 11 if it wasn't for air conditioning, the State of 12 Florida would be a wasteland today and that is a fact. 13 And we treasure it very much, we need it 14 very much. Regardless of your income level, you 15 require this method of comfort and of good health. So 16 I have been involved in this thing from some time. 17 Allow me to tell you this; I'm a former HVAC contract, 18 in some cases as long as many of your people's age in 19 this room right here. A colleague of mine, as a 20 matter of fact, some years ago actually worked 21 together with John Carrier. So you can see, I'm a 22 vintage human being and I do want to bring you 23 greetings from the Land of Chad. 24 We were accused of many things andwe were 25 the.genesis of really wakening people to the problems 

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### 1 MR. BROOKMAN: Thankyou. And, sir, would 2 you go to the microphone, please? 3 

### MR. JACOBSON: Goodmorning andthankyou 4 

### ever so much for affording me this opportunity. My 5 

### name is Morey J. Jacobson. I'm from the State of 6 Florida and I in my lifetime in the State of Florida 7 have gone through the winds of change many, many 8 times, particularlyas it relates to the questions of 9 energyanditsconsumptionas iteffectsthepeopleof 10 Florida. As manyofyouprobablyknowor shouldknow, 11 if it wasn't for air conditioning, the State of 12 Floridawouldbea wastelandtodayandthat is a fact. 13 And we treasure it very much, we need it 14 

### very much. Regardless of your income level, you 15 require thismethodof comfort andofgoodhealth. So 16 I have been involved in this thing from some time. 17 Allowme totellyouthisiI'

### m a formerHVAC contract, 18 in some cases as long as manyof yourpeople's age in 19 

### this room right here. A colleague of mine, as a 20 matter of fact, some years ago actually worked 21 together with John Carrier. So you can see, I'm a 22 vintage human being and I do want to bring you 23 greetings from the Land of Chad. 24 Wewere accusedofmanythings andwe were 25 the genesis of reallywakeningpeople to the problems

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com87 1 we have in the elective process not only in the State 2 of Florida in Palm Beach County where I reside but 3 through so many other areas throughout the country so 4 I hope you would look up to that point in a positive 5 fashion. 6 But when it comes to energy, we were one 7 of the earliest states in the union. I believe 8 California and ourselves if mymemory serves me right, 9 were in the forefront of attempting to establish a 10 building energy efficiency code and Iwas part of that 11 troop. Another chap and I were -- testified in 12 Tallahassee on behalf of 90-75 which is the ASHRE 13 standard for building efficiency. It was a privilege 14 for me to be part of that and Iworked together in the 15 formulation of the codes and the paperwork that's 16 involved. But I'd like to bring to you some of the 17 lessons that we went through, particularly as it 18 relates to increasing the performance not only of the 19 air conditioning but other elements of a building. 20 People don't necessarily love change. 21 Change is something we have to fight for. Change is 22 something that we strive for. Change is something 23 that we should reallyput our sights on, not lower the 24 bars but raise the bars. raise the bars of 25 performance. And sometimes whenyou raise the bars of 

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### 1 we have in the electiveprocess not only in the State 2 of Florida in Palm Beach County where I reside but 3 through somanyother areas throughout the country so 4 I hope you would look up to that point in a positive 5 fashion. 6 

### But when it comes to energy, we were one 7 

### of the earliest states in the union. I believe 8 Californiaandourselvesifmymemoryservesme right, 9 were in the forefront of attempting to establish a 10 buildingenergyefficiencycodeand I waspartofthat 11 troop. Another chap and I were testified in 12 Tallahassee on behalf of 90-75 which is the ASHRE 13 standard forbuildingefficiency. It was a privilege 14 forme tobepartof that and I workedtogether inthe 15 formulation of the codes and the paperwork that's 16 

### involved. But I'd like to bring to you some of the 17 lessons that we went through, particularly as it 18 relates to increasingtheperformance not onlyof the 19 air conditioning but other elements of a building. 20 

### People don't necessarily love change. 21 Change is something we have to fight for. Change is 22 something that we strive for. Change is something 23 thatwe shouldreallyputour sightson, not lowerthe 24 

### bars but raise the bars. ralse the bars of 25 performance. And sometimeswhenyouraisethebarsof

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com88 1 performance you run into other problems as we have and 2 are having in the State of Florida. 3 We've made our buildings so tight that we 4 are going to have to introduce outside air to make 5 sure that we have good air quality within the 6 condition structures. The other item that I'd love to 7 bring to your attention is that we at first had about 8 a 5.6 and a 4.8, we referred to it then as EER's. We 9 went up into a 7 -- I think we went up into a 7.5 or 10 a 7.8 and boy, did we get responses, all negative, all 11 negative. We're going to put people out of business. 12 We're going to make it financially impossible for the 13 consuming public to be able to purchase air 14 conditioning or'to replace their air conditioning and 15 you know, it's an interesting thing. Once it was 16 established as a minimum level of performance in the 17 State of Florida, first of all, all these great 18 manufacturers couldn't come in and dump all their 19 equipment on us, which they were doing for a long 20 time. 21 We performed and as these things came into 22 being and as the minimum level of performance took 23 place, and as you all know all codes are minimum level 24 of performance, they're not the maximum, it was 25 interesting how the price structure of that leveled 

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### 88 1 performanceyourunintootherproblems aswe have and 2 are having in the State of Florida. 3 We'vemade ourbuildings so tight that we 4 are going to have to introduce outside air to make 5 sure that we have good air quality within the 6 conditionstructures. Theotheritemthat I'dloveto 7 bring toyour attention is that we at first had about 8 a 5.6 and a 4.8, we referred to it then as EER's. We 9 went up into a 7

-- I think we went up into a 7.S or 10 a 7.8 andboy, didwe get responses, allnegative, all 11 negative. We're going to put people out of business. 12 We're goingtomake it financially impossible for the 13**con~uming** 

### public to be able to purchase air 14 conditioningor·toreplace their air conditioningand 15 

### you know, it's an interesting thing. Once it was 16 established as a minimum level of performance in the 17 State of Florida, first of all, all these great 18 manufacturers couldn't come in and dump all their 19 equipment on us, which they were doing for a long 20 time. 21 Weperformedandasthesethingscameinto 22 being and as the minimum level of performance took 23 place, andasyou allknowall codes areminimumlevel 24 of performance, they're not the maximum, it was 25 interesting how the price structure of that leveled

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com89 1 out and we found out that we could buy that equipment 2 at really no difference in the cost of what we were 3 paying for it prior. Then we went from -- we went up 4 to an 8.5 and then we went up to a 9 and again, that 5 same attitude. And these were various disciplines 6 involved in thebusiness, the developing, andbuilding 7 and constructing residences. I'm talking about 8 residential application now. And again, we met that. 9 We started installing that and we found out that after 10 awhile, the price structure of that equipment leveled 11 out based upon the amount of units that were being 12 installed, the fact that there was a competitive 13 factor and I'm a strong believer in the free 14 enterprise system and the right of people to charge 15 whatever they want for a price. But they'd better 16 justify it to the consuming public. 17 And ourpeople bought it and it's amazing. 18 We were able to flatten out all this price structure. 19 To give you an idea of the company I was with and I 20 was a partner. It was like I grandfathered this 21 company. We'll discuss that some other time, I've 22 grandfathered many companies, including here in the 23 District of Columbia by the way. We installed between 24 six and 7,000 split systems a year. There are 25 manufacturers who would love to have distributors 

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### 1 out andwe found out that we couldbuy that equipment 2 at really no difference in the cost of what we were 3 paying for itprior. Thenwe went from

-- we went up 4 to an 8.5 and then we went up to a 9 and again, that 5 

### same attitude. And these were various disciplines 6 involvedinthebusiness, thedeveloping, andbuilding 7 

### and constructing residences. I'm talking about 8 residential applicationnow. And again, we met that. 9 We startedinstallingthatandwe foundout that after 10 awhile, theprice structure of that equipment leveled 11 out based upon the amount of units that were being 12 installed, the fact that there was a competitive 13 factor and I'm a strong believer in the free 14 enterprise system and the right of people to charge 15 

### whatever they want for a price. But they'd better 16 justify it to the consuming pUblic. 17 Andourpeopleboughtitandit'samazing. 18 We were able to flatten out all thisprice structure. 19 To give you an idea of the company I was with and I 20 

### was a partner. It was like I grandfathered this 21 company. We'll discuss that some other time, I've 22 grandfathered many companies, including here in the 23 Districtof Columbiabytheway. We installedbetween 24 

### six and 7,000 split systems a year. There are 25 manufacturers who would love to have distributors

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com90 1 distribute that much equipment. So I'm not speaking 2 from the point of view of a very narrow point because 3 we did the broad range of housing. 4 We did those in Palm Beach and we did them 5 out in the General Home building deal where they were 6 very low economy homes and what is low economy then is 7 no longer low economy today. They've raised the 8 level. My point in saying all of this thing is that 9 I would hope -- and by the way, I am in the former 10 national president and that's agreat pride of mine of 11 the Air Conditioning Contractors of America. 12 I'mnot here talking on their behalf. I'm 13 talking about as a contractor who represents many 14 contractors in the State of Florida,who feel strongly 15 about this issue. And I am also an elected person in 16 the State of Florida and Ialso belong to the Treasure 17 Coast Regional Planning Council and their committee 18 and I'm also -- worked on the state level with the 19 statewide building code that we have today. So that's 20 the way a person my age looks so young. I hope you 21 agree, Idon't know, but Iwant you to know that to me 22 I want to thank you all for this opportunity but 23 please don't lower the bar, raise the bar because we 24 want it in every level of our community and every 25 level of our life. We're always trying to raise the 

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### 1 distribute that much equipment. So I'm not speaking 2 from thepoint of viewof a verynarrowpoint because 3 we did the broad range of housing. 4 We didthose inPalmBeachandwe didthem 5 out inthe General Home buildingdeal where theywere 6 veryloweconomyhomes andwhat is loweconomythenis 7 

### no longer low economy today. They've raised the 8 level. My point in saying all of this thing is that 9 I would hope

-- and by the way, I am in the former 10 nationalpresident andthat'sa greatprideofmineof 11 the Air Conditioning Contractors of America. 12 I'mnotheretalkingontheirbehalf. I'm 13 talking about as a contractor who represents many 14 contractorsintheStateofFlorida, who feel strongly 15 about this issue. And I am also an electedperson in 16 the StateofFloridaandI alsobelongtotheTreasure 17 Coast Regional Planning Council and their committee 18 and I'm also

-- worked on the state level with the 19 statewidebuildingcodethatwe havetoday. Sothat's 20 the way a person my age looks so young. I hope you 21 agree, I don't know, but I wantyoutoknowthat tome 22 I want to thank you all for this opportunity but 23 please don't lower the bar, raise the bar because we 24 want it in every level of our community and every 25 level of our life. We're always trying to raise the

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com91 1 bar and the same way that we want our children to have 2 more than we did, and I'm speaking about my generation 3 particularly. I'm sure that's true of all of you. 4 We're always raising the level of life, of our 5 education system andeverything else that we have. So 6 let's keep this land free and let's keep it going. 7 Thank you much. 8 MR. BROOKMAN: Thank you. I'd like to 9 extend mypersonal thanks to every single speaker for 10 their consideration. Many of you came with lengthy 11 prepared remarks. All of you, virtually all of you 12 summarized them. Thank you for that and I think 13 you've advanced the cause of this hearing. 14 I would like to open now to anybody that 15 wishes to speak, comments on what we've hear so far 16 briefly before we go as the agenda directs us to, take 17 up the legal issues. Anybody that wishes to speak on 18 what has been said now before this morning. We'll 19 just have an open discussion period briefly. Yes, 20 sir, please use the microphone and say your name for 21 the record. 22 MR. HOLT: I'm John Holt. I'm with the 23 National Rural Electric Cooperative Association. It 24 makes my heart feel warm to know that everybody in 25 here represents the poor no matter what your position 

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### 1 bar andthe samewaythat we want ourchildrentohave 2 

### more thanwe did, and I'mspeakingabout mygeneration 3 

### particularly. I'm sure that's true of all of you. 4 

### We're always raising ·the level of life, of our 5 

### educationsystemandeverythingelsethatwe have. So 6 

### let's keep this land free and let's keep it going. 7 

### Thank you much. 8 

### MR. BROOKMAN: Thank you. I'd like to 9 

### extendmy personal thanks to every single speaker for 10 

### their consideration. Many of you came with lengthy 11 

### prepared remarks. All of you, virtually all of you 12 

### summarized them. Thank you for that and I think 13 

### you've advanced the cause of this hearing. 14 

### I would like to open now to anybody that 15 

### wishes to speak, comments on what we've hear so far 16 

### brieflybeforewe go as the agendadirectsus to, take 17 

### up the legal issues. Anybody that wishes to speak on 18 

### what has been said now before this morning. We'll 19 

### just have an open discussion period briefly. Yes, 20 

### sir, please use the microphone and say your name for 21 

### the record. 22 

### MR. HOLT: I'm John Holt. I'm with the 23 

### National Rural Electric Cooperative Association. It 24 makes my heart feel warm to know that everybody in 25 here represents the poorno matterwhat yourposition

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com92 1 is. NRECA supported DOE in the efforts of rulemaking 2 when they came out with the SEER 12. We did this on 3 the basis of the studies that we had seen, the work we 4 had done with DOE that said a SEER of 12 was the most 5 cost effective. 6 We would have supported 13 if in our 7 opinion, the 13 was cost effective and from the 8 studies we had seen, it was not true. My 9 recommendation is we look at the 13, we look at the 12 10 and we update the figures to see which is the way to 11 go. Everybody in here is in favor of efficiency. Our 12 resolution from our 35 million members say that we 13 should support the, you know, better efficiency and we 14 are for that. 15 We also support the poor also but we did 16 not come out on the 13 based on the cost benefit 17 ratio. So we would recommend that this be updated and 18 hopefully, the attendees here can agree on what we 19 come up with, the DOE comes up with and then make an 20 informed decision on that basis. 21 MR. BROOKMAN: Thank you. Other persons 22 that would wish to comment on what's been heard so 23 far? 24 MR. BRUNDAGE: Don Brundage, Southern 25 Company. I would just -- I didn't come prepared to do 

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### 92 1 is. NRECA supportedDOE inthe efforts of rulemaking 2 when they came out with the SEER 12. We did this on 3 thebasisof the studies thatwe had seen, theworkwe 4 

### had done withDOE that said a SEER of 12 was the most 5 

### cost effective. 6 

### We would have supported 13 if in our 7 

### opinion, the 13 was cost effective and from the 8 

### studies we had seen, it was not true. My 9 recommendationiswe look at the 13, we look at the 12 10 and we update the figures to see which is the way to 11 go. Everybodyinhere is infavor of efficiency. Our 12 resolution from our 35 million members say that we 13 shouldsupportthe, youknow, betterefficiencyandwe 14 are for that. 15 We also support the poor also but we did 16 not come out on the 13 based on the cost benefit 17 ratio. Sowe wouldrecommendthat thisbeupdatedand 18 hopefully, the attendees here can agree on what we 19 come up with, the DOE comes up with and then make an 20 informed decision on that basis. 21 MR. BROOKMAN: Thank you. Other persons 22 that would wish to comment on what's been heard so 23 far? 24 

### MR. BRUNDAGE: Don Brundage, Southern 25 Company. I wouldjust - - I didn't comepreparedtodo

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com93 1 a statement this morning but I would like to say I 2 support ARI and EEI in the maintaining level 12. A 3 couple of comments on the things said this morning; 4 I've heard speaker after speaker talk about renters 5 don't pay, landlords do, if you inflict extra capital 6 costs on landlords. That's interesting from a macro 7 economic point of view. I suppose you could require 8 them all to have marble tubs in their units, too, and 9 the tenants wouldn't pay for that either. 10 There's an awful lot of technical detail 11 that was done in the NOPR and there was a lot of 12 strange changes the last couple of months coming up 13 with the October and the January rulings by DOE. And 14 I would just like to say that there -- with the 15 abundance of technical information, that SEER 12 is 16 supported and I just hope DOE looks at the evidence in 17 the case and not that higher efficiency is always good 18 regardless of what the fact say. Thank you. 19 MR. BROOKMAN: Thank you. Does anyone 20 else wish to comment at this time? I'm going to 21 suggest we move to the next item on the agenda which

- 22 - oh, I'm sorry, Mike, I missed you. 23 MR. MARTIN: A little slow. Karim read a 24 statement from York and it referred to space 25 constrained units and I think we ought to bear in mind 

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### 1 a statement this morning but I would like to say I 2 support ARI and EEl in the maintaining level 12. A 

### 3 couple of comments on the things said this morning; 4 I've heard speaker after speaker talk about renters 5 don't pay, landlords do, ifyou inflict extra capital 6 costs on landlords. That's interesting from a macro 7 economic point of view. I suppose you could require 8 them all to have marble tubs in theirunits, too, and 9 the tenants wouldn't pay for that either. 10 There's an awful lot of technical detail 11 that was done in the NOPR and there was a lot of 12 strange changes the last couple of months coming up 13 with the October and the Januaryrulings byDOE. And 14 

### I would just like to say that there with the 15 abundance of technical information, that SEER 12 is 16 supportedandI justhopeDOE looks at the evidence in 17 thecaseandnotthathigherefficiencyis alwaysgood 18 regardless of what the fact say. Thank you. 19 

### MR. BROOKMAN: Thank you. Does anyone 20 

### else wish to comment at this time? I'm going to 21 suggestwe move tothenext itemonthe agendawhich

- 22

- oh, I'm sorry, Mike, I missed you. 23 

### MR. MARTIN: Alittle slow. Karimreada 

## 14 statement from York and it referred to space 25 constrainedunits andI thinkwe oughttobearinmind

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com94 1 that they were excluded from the 13 SEER. There is

-- 2 okay, it was reserved. Oh, so you're referring to 3 something else. 4 MS. MILLER: No, we're referring to the 5 size that was, in fact, exempted is smaller sizes. In 6 fact, these units are now two and three units wide and 7 they use a larger piece of equipment which was not 8 exempt. 9 MR. ·BROOKMAN: That was Deborah Miller 10 responding on behalf of ARI. Thank you, Deborah. 11 Thank you. Do you wish to continue, Michael? 12 MR. MILLER: No, just to say thank you, 13 Deborah. 14 MR. BROOKMAN: Okay, thank you. And your 15 name, please. 16 MS. BIEDRZYCKI: Carol Biedrzycki, Texas 17 Ratepayers Organization to Save Energy. On the 18 subject of low income customers, Iwould just like to, 19 you know, add a few comments here. First of all, 20 let's really think about what we're talkingabout when 21 we talk about low income customers. Now, where I come 22 from there are a lot of people that consider a job 23 that pays $7.00 an hour a good job. It's above 24 minimum wage. If you work 2,000 hours ayear at $7.00 25 an hour, you make $14,000.00 a year. That's over the 

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### 1 that theywereexcludedfromthe 13 SEER. There is 2 okay, it was reserved. Oh, so you're referring to 3 something else. 4 

### MS. MILLER: No, we're referring to the 5 sizethatwas, infact, exemptedis smaller sizes. In 6 fact, theseunits arenowtwoandthreeunitswide and 7 they use a larger piece of equipment which was not 8 exempt. 9 

### MR.· BROOKMAN: That was Deborah Miller 10 responding on behalf of ARI. Thank you, Deborah. 11 Thank you. Do you wish to continue, Michael? 12 MR. MILLER: No, just to say thank you, 13 Deborah. 14 MR. BROOKMAN: Okay, thankyou. Andyour 15 name, please. 16 

### MS. BIEDRZYCKI: Carol Biedrzycki, Texas 17 Ratepayers Organization to Save Energy. On the 18 subjectof lowincomecustomers, I wouldjust liketo, 19 

### you know, add a few comments here. First of all, 20 let'sreallythinkaboutwhatwe'retalkingaboutwhen 21 we talkabout lowincome customers. Now, where I come 22 from there are a lot of people that consider a job 23 

### that pays $7.00 an hour a good job. It's above 24 minimumwage. Ifyouwork 2,000 hours a yearat $7.00 25 anhour, youmake $14,000.00 a year. That's over the

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 www.nealrgross.com95 1 Federal Poverty Guideline for an individual. 2 Now, how many of you sitting in this room 3 remember living on $14,000.00 a year and when you did, 4 how much money did you have left over to go out and 5 buy anything other than basic necessities? So let's 6 keep that in mind. I want to make the point that this 7 standard should not be held back because of low income 8 people because low income people can't even begin to 9 imagine going out and buying a new air conditioning 10 unit. It's just that simple. 11 Secondly, I will relay to you an 12 experience I had. Recently, I've been doing some 13 training work with low income groups in the 14 Dallas/Fort Worth area and I've met several times with 15 members of Dallas Acorn, which is a membership group 16 which is made up completely of low income customers 17 and they're one of the groups that I asked about this. 18 I said, "What do you think about appliance 19 efficiencies"? And I told them that there were a lot 20 of people who felt as though we shouldn't raise the 21 standards because if we raise the standards, then they 22 may not -- then they won't be able to afford, you 23 know, to have this luxury. And quite frankly, they 24 said to me, "Well, we can't afford to buy those things 25 anyway and why would they stop -- why would they not 

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### Federal Poverty Guideline for an individual. 2 Now, how manyofyou sittinginthis room 3 rememberlivingon$14,000.00a yearandwhenyoudid, 4 

### how much money did you have left over to go out and 5 

### buy anything other than basic necessities? So let's 6 

### keep that inmind. I want tomake thepoint that this 7 

### standardshouldnotbeheldbackbecauseof lowincome 8 

### people because low income people can't even begin to 9 

### imagine going out and buying a new air conditioning 10 unit. It's just that simple. 11 

### Secondly, I 

### will relay to you an 12 

### experience I had. Recently, I've been doing some 13 

### training work with low income groups in the 14 Dallas/FortWorthareaandI'vemet severaltimeswith 15 members of Dallas Acorn, which is a membership group 16 which is made up completely of low income customers 17 andthey'reoneofthegroups that I askedabout this. 18 I said, "Whatdoyouthinkabout appliance 19 efficiencies"? And I toldthem that there were a lot 20 of people who felt as though we shouldn't raise the 21 

### standardsbecause ifwe raisethe standards, thenthey 22 may not - - then they won't be able to afford, you 23 

### know, to have this luxury. And quite frankly, they 24 saidtome, "Well, we canI

### t affordtobuythose things 25 anyway and why would they stop -- why would they not

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com96 1 further this standard because of us? Do they want 2 poor people to use more energy so that it will cost us 3 more"? 4 So I wanted to add that perspective. This 5 is an experience that I have had. I don't know if 6 there are other people in the room that, you know, 7 have had similar experiences and Iwanted to relay it. 8 MR. BROOKMAN: Thank you. Deborah Miller? 9 MS. MILLER: Yeah, I'd like to actually 10 speak to that issue because it seems to be an issue 11 that everyone continues to talk about. First of all, 12 working poor is also here in the Washington area and 13 every major city. We're not just talking about the 14 people that make $12,000.00 a year. We're talking 15 about families with two parents, two children that are 16 also making 25 to $30,000.00 a year, even to 17 $35,000.00 a year and many of them do own homes. 18 People would leave Washington, DC, 19 Independence Avenue and go up Columbia Pike, near 20 where I live in Virginia, you're going to find a lot 21 of the working poor that have these two and three 22 bedroom homes. And let me assure you, they've got 23 every member of the extended family trying to work to 24 keep those homes. 25 Secondly, you're also talking senior 

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### further this standard because of us? Do they want 2 poorpeople tousemore energysothat itwill costus 3 more"? 4 

### SoI wantedtoaddthatperspective. This 5 

### is an experience that I have had. I don't know if 6 

### there are other people in the room that, you know, 7 

### havehad similarexperiencesandI wantedtorelayit. 8 

### MR. BROOKMAN: Thankyou. DeborahMiller? 9 

### MS. MILLER: Yeah, I'd like to actually 10 speak to that issue because it seems to be an issue 11 

### that everyone continues to talk about. First of all, 12 working poor is also here in the Washington area and 13 every major city. We're not just talking about the 14 

### people that make $12,000.00 a year. We're talking 15 about familieswithtwoparents, twochildrenthatare 16 also making 25 to $30,000.00 a year, even to 17 $35,000.00 a year and many of them do own homes. 18 

### People would leave Washington, DC, 19 Independence Avenue and go up Columbia Pike, near 20 where I live inVirginia, you're going to find a lot 21 of the working poor that have these two and three 22 bedroom homes. And let me assure you, they've got 23 everymember of the extended family trying towork to 24 keep those homes. 25

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### Secondly, you're also talking senior NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com97 1 citizens. Senior citizens might have had a 2 significant income when they were working. They don't 3 any more. And nobody is going to tell me that all 4 senior citizens live in homes. They don't, the still 5 live in their homes. And for them to replace a broken 6 piece of air conditioning, what they're going to do is 7 simply try to fix it and if it can't be fixed, they're 8 going to go without if they can't afford it. So let's 9 stop talking about people that make $12,000.00 a year. 10 Any major city, maybe not in Texas, 11 because I know you've got a lot of rural areas, but in 12 any major suburban area, you have a lot of working 13 families and they are the families that we should be 14 caring about. 15 MR. BROOKMAN: Yes, see, go ahead and 16 respond and I'll hear from some others. 17 MS. BIEDRZYCKI: All right, very quickly, 18 I just wanted to say that I think that when we look at 19 all consumers, we need to look at like a total cost 20 picture and not just an operating cost -- you know, an 21 initial capital investment. It's one of the -- it's 22 one of the issues that, like we have dealt with for 23 years and years and years, since I first dealt with 24 energy efficiency issues, first cost versus life cycle 25 cost has just been there. And so as far as I'm 

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### 1 citizens. Senior citizens might have had a 2 significantincomewhentheywereworking. Theydon't 3 

### any more. And nobody is going to tell me that all 4 senior citizens live in homes. They don't, the still 5 live intheirhomes. And for themtoreplace a broken 6 pieceof airconditioning, what they'regoingtodois 7 simplytryto fix it andif itcan'tbe fixed, they're 8 goingtogowithout iftheycan't afford it. So let's 9 stoptalkingaboutpeoplethatmake $12,000.00 a year. 10 

### Any major city, maybe not in Texas, 11 because I knowyou'vegot a lot of rural areas, but in 12 any major suburban area, you have a lot of working 13 families and they are the families that we should be 14 caring about. 15 

### MR. BROOKMAN: Yes, see, go ahead and 16 respond and I'll hear from some others. 17 

### MS. BIEDRZYCKI: All right, veryquickly, 18 I justwantedto saythat I thinkthatwhenwe look at 19 all consumers, we need to look at like a total cost 20 pictureandnotjustanoperatingcost -- youknow, an 21 initial capital investment. It's one of the

-- it's 22 one of the issues that, like we have dealt with for 23 years and years and years, since I first dealt with 24 energyefficiencyissues, first costversus lifecycle 25 cost has just been there. And so as far as I'm

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com98 1 concerned we are looking here at life cycle costs and 2 when we look at life cycle cost, life cycle cost is 3 the best, you know, the 13 is the better way to go for 4 everybody. 5 MR. BROOKMAN: Thank you. Bill Prindle. 6 MR. PRINDLE: A couple of quick comments 7 and a question for the Department staff. On the space 8 constrained products issue, in the past we have 9 supported exemptions or separate product 10 classifications for space constrained and other niche 11 products and we continue to do so. My other comment 12 relates to this whole consumer burden issue. This all 13 turns on what is the actual cost to the consumer of an 14 air conditioning system and I think we've heard some 15 evidence so far today that shows that the actual 16 market data on what it actually cost people in the 17 market is a lot less than anything that industry or 18 DOE has projected and I think we'll get to this issue 19 more this afternoon when we talk about the standards 20 in particular, that's why I don't want to dwell on 21 that. I just wanted to say that all this argument 22 over consumers comes down to what does it really cost 23 and hopefully we'll get to that this afternoon. 24 So my question to the Department is, does 25 the Department still have the purview to increase, 

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### 1 concernedwe are looking here at life cycle costs and 2 when we look at life cycle cost, life cycle cost is 3 thebest, youknow, the 13 is thebetterwaytogo for 4 everybody. 5 

### MR. BROOKMAN: Thank you. Bill Prindle. 6 

### MR. PRINDLE: A 

### couple of quick comments 7 

### anda questionfor theDepartment staff. On the space 8 

### constrained products issue, in the past we have 9 

### supported exemptions or separate product 10 classifications for space constrainedandotherniche 11 products and we continue to do so. My other comment 12 relatestothiswhole consumerburdenissue. This all 13 turns onwhat is the actual cost tothe consumerof an 14 air conditioning system and I think we've heard some 15 evidence so far today that shows that the actual 16 market data on what it actually cost people in the 17 market is a lot less than anything that industry or 18 DOE has projected and I think we'll get to this issue 19 more this afternoon when we talk about the standards 20 in particular, that's why I don't want to dwell on 21 that. I just wanted to say that all this argument 22 over consumers comes down towhat does it really cost 23 and hopefully we'll get to that this afternoon. 24 Somy questionto the Department is, does 25 the Department still have the purview to increase,

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com99 1 modify, create new exemptions or other product 2 classification kinds of changes in this proposed rule 3 should it go forward? 4 MR. McCABE: This is Mike E. McCabe. 5 We're going to specifically address that issue whenwe 6 discussed the proposed rule this afternoon. 7 MS. BIEDRZYCKI: Thanks for raising the 8 question. Other comments or questions briefly. Yes, 9 sir. 10 MR. PAMPLIN: Again, I'm Chris Pamplin. 11 From the space constraints standpoint and from a 12 contractor's point of view, again, going through this 13 in 1992 with the 10 SEER standards, contractors are 14 very innovative individuals. It's not a stretch to 15 replace an elderly air conditioner with a 12 SEER 16 versus 13 SEER unit. There are no line set 17 replacements or modifications save for a 13 SEER unit 18 if it's three-eighths and seven-eighths inch copper, 19 it stays three-eighths and seven-eighths. The pad 20 size is minimal. Ductwork modifications are simply 21 transitions. You don't have to increase the size of 22 the ductwork for a 13 versus a 12 SEER. 23 A little bit of seal-tight conduit and 24 you've wired up to the new condenser. So these 25 considerations of space constraints for the vast 

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### 99 1 modify, create new exemptions or other product 2 classificationkinds of changes inthisproposedrule 3 should it go forward? 4 

### MR. McCABE: This is Mike E. McCabe. 5 We'regoingtospecificallyaddressthat issuewhenwe 6 discussed the proposed rule this afternoon. 7 

### MS. BIEDRZYCKI: Thanks for raising the 8 question. Othercomments orquestionsbriefly. Yes, 9 sir. 10 MR. PAMPLIN: Again, I'm Chris Pamplin. 11 From the space constraints standpoint and from a 12 contractor'spoint of view, again, goingthrough this 13 in 1992 with the 10 SEER standards, contractors are 14 

### very innovative individuals. It's not a stretch to 15 replace an elderly air conditioner with a 12 SEER 16 

### versus 13 SEER unit. There are no line set 17 replacements ormodifications save for a 13 SEERunit 18 if it's three-eighths and seven-eighths inch copper, 19 it stays three-eighths and seven-eighths. The pad 20 size is minimal. Ductwork modifications are simply 21 transitions. You don't have to increase the size of 22 the ductwork for a 13 versus a 12 SEER. 23 A little bit of seal-tight conduit and 24 

### you've wired up to the new condenser. So these 25 considerations of space constraints for the vast

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com100 1 majority of change-outs is very, very minimal from my 2 experience. And then the other is, again, from the 3 lower income and elderly point of view of consumers, 4 Air Conditioning Contractors of America and other 5 groups have been industry leaders in being very 6 sensitive to those individuals on low income and fixed 7 income situations, andutility companies, as evidenced 8 over the last year when utility costs skyrocketed, 9 they were faced with many, many consumers that could 10 not pay their utility bills, and those consumers are 11 concerned about keeping the heat or electricity going 12 the next month and the next month, much more so than 13 $122.00 six years from not or thereafter. 14 So DOE as a consumerprotector, I strongly 15 feel needs to, againmaintain the 13 SEER standard for 16 the consumer. Thank you. 17 MR. BROOKMAN: Thank you. Yes. Kit 18 Kennedy. 19 MS. KENNEDY: Justj a couple brief 20 thoughts; one is, I agree with Bill and the exemption 21 process is a critical part of it here. 22 MS. BIEDRZYCKI: Which we'll cover this 23 afternoon. 24 MS. KENNEDY: Yes, and just to comment 25 that in the January 2001 rulemaking, DOE did indicate 

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### 100 1 

### majorityof change-outs is very, veryminimal frommy 2 

### experience. And then the other is, again, from the 3 lower income and elderlypoint of view of consumers, 4 

### Air Conditioning Contractors of America and other 5 

### groups have been industry leaders in being very 6 

### sensitivetothoseindividualsonlowincomeandfixed 7 

### incomesituations, andutilitycompanies, asevidenced 8 

### over the last year when utility costs skyrocketed, 9 

### they were faced with many, many consumers that could 10 not pay their utility bills, and those consumers are 11 

### concernedabout keeping theheat or electricitygoing 12 the next month and the next month, much more so than 13 $122.00 six years from not or thereafter. 14 

### SoDOE asa consumerprotector, I strongly 15 feel needs to, againmaintainthe 13 SEER standardfor 16 

### the consumer. Thank you. 17 

### MR. BROOKMAN: Thank you. Yes. Kit 18 

### Kennedy. 19 

### MS. KENNEDY: Just) a couple brief 20 thoughts; one is, I agree withBill and the exemption 21 process is a critical part of it here. 22 

### MS. BIEDRZYCKI: Which we'll cover this 23 afternoon. 24 

### MS..KENNEDY: Yes, and just to comment 25 that in the January 2001 rulemaking, DOE did indicate

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com101 1 that that was one way through the exemption process, 2 the hardship process, that it would deal with some of 3 these systems which perhaps weren't exempted from the 4 rule but were slightly larger. I also think it's 5 important to note again, the organizations that are 6 here and who they represent. 7 Texas Consumer Organization is here, the 8 State of California is here, and represented in this 9 process and again in the lawsuit are states which 10 under ARI's map, should be losers under this rule. 11 Under ARI's map, the State of Maine and the State of 12 Vermont have a pay-back of over 20 years, yet they 13 support the SEER 13 rule. So that suggests to me two 14 things; one, that ARI is over-estimating the cost of 15 these units and two, that states and organizations 16 make decisions based on a wide variety of factors, 17 including energy costs and life cycle costs and 18 including the environment and their energy needs. 19 We have a system under NAECA which was 20 part of a negotiated outcome and which Congress 21 adopted, whereby we have one national standard. And 22 when you're hearing from stakeholders not only in the 23 states which use the most air conditioners but states 24 thorough the country that they want the'SEER 13 rule, 25 that's important. And we don't have a system where 

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### 101 1 that that was one way through the exemption process, 2 the hardshipprocess, that itwoulddeal with some of 3 these systems whichperhaps weren't exemptedfrom the 4 

### rule but were slightly larger. I also think it's 5 important to note again, the organizations that are 6 here and who they represent. 7 Texas Consumer Organization is here, the 8 State of California is here, and represented in this 9 process and again in the lawsuit are states which 10 under ARI's map, should be losers under this rule. 11 Under ARI's map, the State of Maine and the State of 12 Vermont have a pay-back of over 20 years, yet they 13 support the SEER 13 rule. So that suggests to me two 14 things; one, that ARI is over-estimating the cost of 15 these units and two, that states and organizations 16 make decisions based on a wide variety of factors, 17 inctuding energy costs and life cycle costs and 18 including the environment and their energy needs. 19 We have a system under NAECA which was 20 part of a negotiated outcome and which Congress 21 adopted, whereby we have one national standard. And 22 whenyou'rehearing from stakeholders not onlyinthe 23 states whichuse themost airconditionersbut states 24 thorough the countrythat theywant the'SEER 13 rule, 25 

### that's important. And we don't have a system where

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com102 1 it's easy for states like California or Texas or 2 Florida to go ahead and get their own standard. 3 And I suspect that if those states go 4 ahead and filed for exemption from national standards 5 that ARI, and I don't want to presuppose your 6 position, might feel negatively about that. And so 7 we've all got to sort of come together on a rule and 8 when you have states way up North supporting the rule 9 that the states down South also want, I think that's 10 significant. 11 MR. BROOKMAN: Thank you. It seems to me 12 as though we're starting to get moving -- the 13 discussion is starting to move towards specific issues 14 that I think we're going to take up as we go on with 15 the agenda. 16 MS. MILLER: I have a comment I would like 17 -- I appreciate your -- 18 MR. BROOKMAN: Deborah, before you do

-- 19 MS. MILLER: -- your moderate tone and 20 your willingness to make what I consider rational 21 statements; however, I do want to point out that this 22 is a national standard -- 23 MR. BROOKMAN: Deborah, Idon't think it's 24 on. 25 MS. MILLER: -- that is supposed to be 

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### 1 it's easy for states like California or Texas or 2 

### Florida to go ahead and get their own standard. 3 

### And I suspect that if those states go 4 

### ahead and filed for exemption from national standards 5 

### that ARI, and I don't want to presuppose your 6 

### position, might feel negatively about that. And so 7 

### we've all got to sort of come together on a rule and 8 

### when you have stateswayup North supporting the rule 9 

### that the states down South also want, I think that's 10 

### significant. 11 

### MR. BROOKMAN: Thank you. It seems tome 12 

### as though we're starting to get moving the 13 

### discussionis startingtomovetowards specificissues 14 

### that I think we're going to take up as we go on with 15 

### the agenda. 16 

### MS. MILLER: I have a comment I would like 17

-- I 

### appreciate your -- 18 

### MR. BROOKMAN: Deborah, before you do

-- 19 

### MS. MILLER:

- - your moderate tone and 20 

### your willingness to make what I 

### consider rational 21 

### statements; however, I do want topoint out that this 22 

### is a national standard

-- 23 24 

### on. 25

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### MR. BROOKMAN: Deborah, I 

### don'tthinkit

### 's

MS. MILLER: that is supposed to be NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com103 1 economically justified and technologically feasible. 2 We may not agree on what the cost of air conditioners 3 are but let's say it's not as cheap as $122.00. I 4 just bought a 13 SEER. It was close to $4,000.00. 5 But I will also tell you that in those states ARI is 6 supportive of tax incentives, so I would simply 7 suggest in those states that believe that their 8 consumers should purchase 13 SEER then they should 9 offer them, whether through utility rebates or tax 10 incentives, the cost differential and we would so be 11 supportive of that. 12 MS. KENNEDY: Has ARI taken a position on 13 Senate Bill 207 which is the Federal Tax Credit for 14 energy efficient products? 15 MS. MILLER: I believe it's 13.5. I 16 haven't looked at that bill in quite awhile, but you 17 have our policy document before you. It was also 18 handed out. And if you look in that document, it does 19 say that we support tax incentives at a 13 SEER and 20 up, not a 13.5 yet, but if the Senate bill is willing 21 to come down to 13, we'll be very happy to support it. 22 MR. BROOKMAN: We are getting into some 23 rather specific information and the two of you can 24 discuss or anybody else that wants to discuss, can 25 talk about thepositions of your organizations that go 

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### 103 1 economicallyjustified and technologically feasible. 2 We maynot agree on what the cost of air conditioners 3 

### are but let's say it's not as cheap as $122.00. I 4 

### just bought a 13 SEER. It was close to $4,000.00. 5 But I will also tell you that in those states ARI is 6 supportive of tax incentives, so I would simply ,7 

### suggest in those states that believe that their 8 consumers should purchase 13 SEER then they should 9 offer them, whether through utility rebates or tax 10 incentives, the cost differential and we would so be 11 supportive of that. 12 MS. KENNEDY: Has ARI taken a positionon 13 Senate Bill 207 which is the Federal Tax Credit for 14 energy efficient products? 15 MS. MILLER: I believe it's 13.5. I 

### 16 haven't looked at that bill in quite awhile, but you 17 have our'policy document before you. It was also 18 handedout. And ifyou look inthat document, itdoes 19 say that we support tax incentives at a 13 SEER and 20 up, not a 13.5yet, but if the Senate bill is willing 21 tocome downto 13, we'llbeveryhappyto support it. 22 MR. BROOKMAN: We are getting into some 23 rather specific information and the two of you can 24 discuss or anybody else that wants to discuss, can 25 talkabout thepositionsofyourorganizationsthatgo

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N,W, WASHINGTON, D,C, 20005-3701 www,nealrgross,com104 1 beyond the content of these proceedings here today 2 which are more narrowly cast than whereyou are going. 3 I'd like to suggest we move towards lunch. I see we 4 have one or two persons that would like to make a 5 comment. Jim Crawford first. 6 MR. CRAWFORD: Jim Crawford of Trane 7 Company and a Texas resident who might take exception 8 with the representativewho wouldprofess to represent 9 all Texans. That's a different matter. I just want 10 to say, you know, we've had a lot of antidotal 11 information thrown out here this morning about the 12 price of equipment, so I have to add an antidote. I 13 was handed here from one of my colleagues behindme an 14 advertisement in Dallas for a three-ton, 10 SEER air 15 conditioner at $2,995.00, a 12 SEER air conditioner 16 for $3,495.00 and to me that figures out to about a 17 $500.00 price differential to go to a 12. He doesn't 18 advertise a 13. 19 These $100.00 figures and $122.00 figures 20 are not representative of what's going on nationally 21 in the market. They may be representative of 22 individual manufacturers. If someone wants to say 23 they can make a 12 and a 13 for the same price, let 24 them say it, but they are not representative of what's 25 happening out there in the national market and all 

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### 104 1 beyond the content of these proceedings here today 2 whicharemorenarrowlycast thanwhereyou aregoing. 3 

### I'd like to suggest we move towards lunch. I see we 4 have one or two persons that would like to make a 5 comment. Jim Crawford first. 6 MR. CRAWFORD: 

### Jim Crawford of Trane 7 Company anda Texas resident who might take exception 8 withtherepresentativewhowouldprofesstorepresent 9 

### all Texans. That's a different matter. I just want 10 to say, you know, we've had a lot of antidotal 11 information thrown out here this morning about the 12 price of equipment, so I have to add an antidote. I 

### 13 washandedhere fromoneofmy colleaguesbehindme an 14 advertisement in Dallas for a three-ton, 10 SEER air 15 conditioner at $2,995.00, a 12 SEER air conditioner 16 for $3,495.00 and to me that figures out to about a 17 $500.00 price differential to go to a 12. He doesn't 18 advertise a 13. 19 These $100.00 figures and $122.00 figures 20 are not representative of what's going on nationally 21 in the market'. They may be representative of 22 individual manufacturers. If someone wants to say 23 they can make a 12 and a 13 for the same price, let 24 themsayit, buttheyarenotrepresentativeofwhat's 25 happening out there in the national market and all

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com105 1 you've got to do is ask the people who've bought them, 2 ask the people who sell them. 3 MR. BROOKMAN: Thank you. 4 A VOICE: Who is the manufacturer of that 5 unit? 6 MR. CRAWFORD: It happens to be a Trane 7 unit. That's somewhat immaterial. 8 (Laughter) 9 MR. CRAWFORD: The ad was presented to me 10 by someone from another company. 11 MR. BROOKMAN: Okay, let's -- I'm going to 12 suggest -- first of all, I want to thank all of you 13 forbeing so focused this morning and listening to the 14 comments as you did and the people that did speak on 15 the record, thank you for keeping your remarks brief. 16 I'm going to reward all of you for that, since we 17 didn't even have a break this morning. We're going to 18 break now for lunch. I'll give you an entire five 19 extra minutes for lunch. So we'll resume at 1:00 20 o'clock and the first thing we'll take up is legal 21 issues and then we'll move to discussing the issues 22 related to proposed standards. We're starting again 23 at 1:00. 24 (Whereupon, at 11:53 a.m., a luncheon 25 recess was taken.) 

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### 1 you've got todo is askthepeoplewho'vebought them, 2 

### ask the people who sell them. 3 

### MR. BROOKMAN: Thank you. 4 A

### VOICE: who is the manufacturer of that 5 

### unit? 6 

### MR. CRAWFORD: It happens to be a Trane 7 

### unit. That's somewhat immaterial. 8 

### (Laughter) 9 

### MR. CRAWFORD: The adwas presentedtome 10 

### by someone from another company. 11 

### MR. BROOKMAN: Okay, let's

- - I'mgoingto 12 

### suggest -- first of all, I want to thank all of you 13 

### forbeingsofocused thismorningandlisteningtothe 14 

### comments as you did and the people that did speak on 15 

### the record, thankyou for keepingyour remarks brief. 16 

### I'm going to reward all of you for that, since we 17 

### didn't evenhave a breakthismorning. We'regoingto 18 

### break now for lunch. I'll give you an entire five 19 

### extra minutes for lunch. So we'll resume at 1:00 

### 20 

### o'clock and the first thing we'll take up is legal 21 

### issues and then we'll move to discussing the issues 22 

### related to proposed standards. We're starting again 23 

### at 1:00. 

### 24 

### (Whereupon, at 11:53 

### a.m., a luncheon 25 recess was taken.)

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com106 1 A-F-T-E-R-N-O-O-N S-E-S-S-I-O-N 2 (1:03 p.m.) 3 MR. BROOKMAN: Okay, let's get started 4 here, if we can, please. How we're going to proceed 5 next on the agenda is we're going to take up legal 6 issues. Michael McCabe is going to make an 7 introduction and then as the afternoon progresses, 8 we're going to talk about the proposed standards and 9 I would ask as we go forward this afternoon if 10 individuals, as you make your comments if you could 11 try and keep them focused, concentrated, that would be 12 helpful for us to get through all of the comments that 13 people wish to make. 14 Let me check at this point, do we have 15 people on the conference all? 16 MR. WILSON: Yes, you do. 17 MR. BROOKMAN: And your name, please? 18 MR. WILSON: Edward Wilson, State of 19 Texas, TexasNatural Resource Conservation Commission. 20 I was on earlier but there wasn't a roll call for 21 Southern states. 22 (Laughter) 23 MR. BROOKMAN: Thank you for calling that 24 to my attention. The next time I'll be more careful. 25 And is there anybody else joining us from a Southern 

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### 106 1 A-F-T-E-R-N-O-O-N S-E-S-S-I-O-N 2 (1:03 p.m.) 3 

### MR. BROOKMAN: Okay, let's get started 4 here, if we can, please. How we're going to proceed 5 next on the agenda is we're going to take up legal 6 

### issues. Michael McCabe is going to make an 7 introduction and then as the afternoon progresses, 8 we're going to talk about the proposed standards and 9 I would ask as we go forward this afternoon if 10 individuals, as you make your comments if you could 11 tryandkeepthemfocused, concentrated, thatwouldbe 12 helpful forus toget throughall of the comments that 13 people wish to make. 14 

### Let me check at this point, do we have 15 people on the conference all? 16 MR. WILSON: Yes, you do. 17 

### MR. BROOKMAN: And your name, please? 18 

### MR. WILSON: Edward Wilson, State of 19 Texas, TexasNaturalResourceConservationCommission. 20 I was on earlier but there wasn't a roll call for 21 Southern states. 22 (Laughter) 23 

### MR. BROOKMAN: Thankyou for callingthat 24 to my attention. The next time I'llbe more careful. 25 And is there anybody else joining us from a Southern

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com107 1 state? I hear no one. Is there anyone joining us 2 from a Western state. 3 MR. GOLDSTEIN: David Goldstein. 4 MR. BROOKMAN: Hi, David. Okay, anybody 5 else on the call that I haven't acknowledged by 6 region. Okay, so thanks to the both of you for 7 joining us. We're going to proceed now. Any other 8 housekeeping announcements? Michael E. McCabe. 9 MR. McCABE: Thank you, Doug. We're now 10 at the point in the public hearing that was set aside 11 for more in-depth discussion. The first item on that 12 is 'the legal provisions and General Counsel Mike 13 Bowerswill lead that discussion on legal provisions. 14 MR. BOWERS: I'm not really the General 15 Counsel, I'm in the General Counsel's office. 16 MR. BROOKMAN: Speak into the mike. 17 MR. BOWERS: I'd like tomake just a brief 18 statement to sort of set the stage of any oral 19 presentations on legal issues. In the July 25th, 20 Notice of Proposed Rulemaking the Department proposed 21 certain amendments that reflect its interpretation of 22 Section 325(o)(1) of the Energy Policy and 23 ConservationAct. Section 325(o) (1)provides in part 24 that, "The Secretary of Energy may not prescribe any 25 amended standardwhich increases themaximum allowable 

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### 107 1 

### state? I hear·no one. Is there anyone joining us 2 from a Western state. 3 

### MR. GOLDSTEIN: David Goldstein. 4 

### MR. BROOKMAN: Hi, David. Okay, anybody 5 else on the call that I haven't acknowledged by 6 

### region. Okay, so thanks to the both of you for 7 

### joining us. We're going to proceed now. Any other 8 housekeeping announcements? Michael E. McCabe. 9 

### MR. McCABE: Thank you, Doug. We're now 10 at thepoint inthepublic hearing that was set aside 11 for more in-depthdiscussion. The first itemon that 12 is .the legal provisions and General Counsel Mike 13 Bowerswill leadthatdiscussiononlegalprovisions. 14 MR. BOWERS: I'm not really the General 15 Counsel, I'm in the General Counsel's office. 16 

### MR. BROOKMAN: Speak into the mike. 17 MR. BOWERS: I'dlike tomakejusta brief 18 statement to sort of set the stage of any oral 19 

### presentations on legal issues. In the July 25th, 20 Noticeof ProposedRulemakingtheDepartmentproposed 21 certainamendments that reflect its interpretationof 22 Section 325(0) (1) of the Energy Policy and 23 ConservationAct. Section 325(0)(1) provides inpart 24 that, liThe Secretary of Energy may not prescribe any 25 amendedstandardwhichincreasesthemaximumallowable

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com108 1 energy use or decreases the minimum required energy 2 efficiency of a covered product". 3 DOE hasproposed anew section 430.34 that 4 tracks the language of Section 325(o) (1). We've also 5 proposed to add definitions for the terms "minimum 6 required energy efficiency" and "maximum allowable 7 energy use", that are used in 325(o)(1). 8 The impetus for these proposals was ARI'spetition for 9 reconsideration and a statement by energy and 10 environmental advocates who oppose the petition. 11 In this petition for reconsideration, ARI 12 stated that it did not think that Section 325(o) (1) 13 applied to the January 22nd, final rule because new 14 efficiencyminimums would not be requiredby the final 15 rule until the year 2006, the date the new standards 16 would be enforceable. The energy and environmental 17 organizations expressed a contrary view. In their 18 view, the timing of the phase-in of the new standards 19 is irrelevant and they stated that DOE could not adopt 20 efficiency standards less stringent than those in the 21 published final rule even though the final rule never 22 became effective. 23 The Department set forth its 24 interpretation of Section 325(o)(1) in the July 25th 25 notice ofproposed rulemaking. Until this rulemaking, 

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### 108 1 energy use or decreases the minimum required energy 2 efficiency of a coveredproductll

. 3 DOEhasproposeda newsection430.34that 4 tracks the language of Section 325(0)

### (1). We've also 5 proposed to add definitions for the terms IIminimum 6 required energy efficiencyll and IImaximum allowable 7 energyusell, that are used in 325(0)

### (1). 8 Theimpetus fortheseproposalswasARI's petitionfor 9 reconsideration and a statement by energy and 10 environmental advocates who oppose the petition. 11 Inthispetitionforreconsideration, ARI 12 stated that it did not think that Section 325(0)

### (1) 13 applied to the January 22nd, final rule because new 14 efficiencyminimumswouldnotberequiredbythe final 15 rule until the year 2006, the date the new standards 16 would be enforceable. The energy and environmental 17 

### organizations expressed a contrary view. In their 18 view, the timing of thephase-inof the new standards 19 is irrelevantandtheystatedthatDOE couldnot adopt 20 efficiencystandards less stringent than those inthe 21 published final rule eventhough the final rule never 22 became effective. 23 The Department set forth its 24 interpretation of Section 325(0)

### (1) in the July 25th 25 noticeofproposedrulemaking. Untilthisrulemaking,

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com109 1 the Department never had occasion to closely analyze 2 and apply this provision. The key term in Section 3 325(o)(1) is minimum required energy efficiency and 4 the proposed rule would add a definition of this term 5 to Section 430.2. DOE's definition of this term 6 reflects an interpretation of 325(o)(1) that is 7 different from both ARI's and the environmental 8 organizations' interpretations. 9 The proposed rule would define the term 10 "minimum required energy efficiency" to mean, "An 11 energy conservation standard for a covered product 12 expressed in terms of a minimum efficiency quotient 13 which is established by statute or by final rule that 14 has modified Part 430 pursuant to a date DOE has 15 selected consistent with the Congressional ReviewAct 16 and any other applicable law". Similar language has 17 been included in the proposed definition of "maximum 18 allowable energy use". 19 The Department has stated in the July 25th 20 Notice of Proposed Rulemaking that it intends to make 21 the final rule that results from this rulemaking 22 effective 75 days after the date of publication in the 23 Federal Register. Finally, the proposed rule would 24 include a definition of effective date that comports 25 with EPCA's use of that term. EPCA, Energy Policy and 

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### 109 1 the Department never had occasion to closely analyze 2 

### and apply this provision. The key term in Section 3 325(0)(1) is minimum required energy efficiency and 4 theproposedrule would add a definition of this term 5 

### to Section 430.2. DOE's definition of this term 6 reflects an interpretation of 325(0) (1) that is 7 different from both ARI's and the environmental 8 organizations' interpretations. 9 The proposed rule would define the term 10 "minimum required energy efficiency" to mean, "An 

### 11 energy conservation standard for a covered product 12 expressed in terms of a minimum efficiency quotient 13 which is establishedby statute orby final rule that 14 has modified Part 430 pursuant to a date DOE has 15 selectedconsistentwiththe CongressionalReviewAct 16 and any other applicable law". Similar language has 17 been included in the proposed definition of "maximum 18 allowable energyuse". 19 TheDepartmenthas statedintheJuly25th 20 Notice of ProposedRulemaking that it intends tomake 21 the final rule that results from this rulemaking 22 effective75 daysafterthedateofpublicationinthe 23 Federal Register. Finally, the proposed rule would 24 include a definition of effective date that comports 25 withEPCA'suseof that term. EPCA, EnergyPolicyand

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com110 1 Conservation Act, uses the term "effective date" to 2 refer to the date energy conservation standards become 3 enforceable and DOE historically has employed that 4 usage in Part 430. 5 Therefore, the Department proposes to add 6 a definition of effective date in Section 430.2 to 7 clarify that it's used in EPCA in Par 430 that the 8 effective date is the date on which an amended Energy 9 Conservation Standard becomes enforceable. So if 10 you're not confused already, I'll turn it over to 11 others to address the legal issues. 12 MR. BROOKMAN: Thank you. Comments on 13 Mike Bowers' brief presentation. Michael Martin. 14 MR. MARTIN: Yes, as I understand it, the 15 Federal Register notice I find very confusing on this 16 proposed. While the main discussion concerns -- 17 MR. BROOKMAN: Get closer to the mike. 18 MR.MARTIN: -- 325(o) (1) make-up, part of 19 your proposed solution is to add definitions to 20 Section 430 following the words, "for the purpose of 21 this part". This part clearly would be Part 430

-- 22 MR. BOWERS: Right. 23 MR. MARTIN: -- of the Code of Federal 24 Regulations. So I haven't quite understood why

-- 25 first of all, why you need it in that part at all and 

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### 110 1 Conservation Act, uses the term "effective date" to '2 

### refertothedateenergyconservationstandardsbecome 3 enforceable and DOE historically has employed that 4 usage in Part 430. 5 

### Therefore, theDepartmentproposes toadd 6 

### a definition of effective date in section 430.2 to 7 

### clarify that it's used in EPCA in Par 430 that the 8 

### effective date is the date onwhich an amendedEnergy 9 

### Conservation Standard becomes enforceable. So if 10 you're not confused already, I'll turn it over to 11 others to address the legal issues. 12 MR. BROOKMAN: Thank you. Comments on 13 Mike Bowers' brief presentation. Michael Martin. 14 

### MR. MARTIN: Yes, as I understand it, the 15 Federal Registernotice I find veryconfusingon this 16 proposed. While the main discussion concerns -- 17 

### MR. BROOKMAN: Get closer to the mike. 18 

### MR. MARTIN: 325(0)

### (1) make-up, partof 19 your proposed solution is to add definitions to 20 Section 430 following the words, "for the purpose of 21 this part". This part clearly would be Part 430

-- 22 

### MR. BOWERS: Right. 23 MR. MARTIN:

- - of the Code of Federal 24 Regulations. So I haven't quite understood why

-- 25 first of all, why you need it in that part at all and

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com111 1 secondly, how a definition in a regulation can 2 interpret the enabling legislation that it's developed 3 under. 4 MR. BOWERS: Well -- this is Mike Bowers 5 speaking. When the enabling legislation is ambiguous 6 in some respect, then it's common and we elected to do 7 it in this case, to flesh out the meaning of the 8 statutory term in the regulations. So that's what's 9 happening here and we felt it was appropriate to do it 10 as part of the rulemaking and get public comments on 11 our interpretation. 12 MR. MARTIN: So the phrase "for the 13 purpose of this part", is not really what you mean at 14 all. You want to apply it somewhere else. 15 MR. BOWERS: No. 16 MR. MARTIN: It seems that that is 17 limiting what you're trying to apply here. 18 MR. BROOKMAN: That was, of course, 19 Michael Martin. 20 MR. MARTIN: Yes, excuse me. 21 MR. BOWERS: This is Mike Bowers, just 22 responding. This is being flowed from the statute to 23 the regulations. Perhaps I'mnot followingyourpoint, 24 but the scope of the statute and the regulation is the 25 same, will be the same when the regulation becomes 

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### 111 1 secondly, how a definition in a regulation can 2 interprettheenablinglegislationthatit'sdeveloped 3 under. 4 

### MR. BOWERS: Well

-- this is Mike Bowers 5 speaking. When the enabling legislationis ambiguous 6 insomerespect, thenit'scommon andwe electedtodo 7 it in this case, to flesh out the meaning of the 8 statutory term in the regulations. So that's what's 9 happeninghere andwe felt itwas appropriatetodo it 10 as part of the rulemaking and get public comments on 11**ou~** 

### interpretation. 12 

### MR. MARTIN: So the phrase "for the 13 purpose of thispart", is not reallywhat youmean at 14 all. You want to apply it somewhere else. 15 

### MR. BOWERS: No. 16 

### MR. MARTIN: It seems that that is 17 limiting what you're trying to apply here. 18 

### MR. BROOKMAN: That was, of course, 19 Michael Martin. 20 

### MR. MARTIN: Yes, excuse me. 21 

### MR. BOWERS: This is Mike Bowers, just 22 responding. This isbeing flowed from the statute to 23 theregulations. PerhapsI'mnot followingyourpointI 

### 24 but the scopeofthe statuteandtheregulationis the 25 same, will be the same when the regulation becomes

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com112 1 final. If I'm missing your point, I'm probably

-- 2 MR. MARTIN: That's okay. You're missing 3 part of my point and I'm missing part of yours also 4 but let's let it pass. 5 MR. BROOKMAN: Okay, that was a form 6 question there. Other issues that individuals would 7 like to raise about Mike's brief comment? Yes, Kit. 8 MS. KENNEDY: This is Kit Kennedy. I'll 9 just very briefly respond to your comment, but first, 10 I have some questions about the rulemaking that you're 11 undertaking now and the record that supports it which 12 I'd like to ask you and if you can answer, great; if 13 you can't, just let me know. 14 MR. BOWERS: I'll let you know. 15 MS. KENNEDY: Okay. I guess my first 16 question is, I'd like some more clarity on what 17 exactly your asking for comments on in the July 25th 18 Federal Register notice and what you'll accept 19 comments on. You're proposing to withdraw the SEER 13 20 rule and are you asking for public comment on the full 21 range of issues surrounding withdrawal of the SEER 13 22 rule or only on the legal issues surrounding 23 withdrawing that rule? 24 MR. BOWERS: The Notice of Proposed 25 Rulemaking isn't limited to legal issues and it seems 

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### 112 1 

### final. If I'mmissing your point, I'm probably 2 

### MR. MARTIN: That's okay. You're missing 3 part of my point and I'm missing part of yours also 4 but let's let it pass. 5 

### MR. BROOKMAN: Okay, that was a form 6 question there. Other issues that individuals would 7 like to raise about Mike's brief comment? Yes, Kit. 8 

### MS. KENNEDY: This is Kit Kennedy. I'll 9 just verybrieflyrespondtoyour comment, but first, 10 I have somequestionsabouttherulemakingthatyou're 11 undertakingnow andthe record that supports itwhich 12 I'd like to ask you and if you can answer, great; if 13 you can't, just let me know. 14 

### MR. BOWERS: I'll let you know. 15 MS. KENNEDY: Okay. I guess my first 16 question is, I'd like some more clarity on what 17 exactlyyour asking for comments on in the July 25th 18 Federal Register notice and what you'll accept 19 commentson. You'reproposingtowithdrawthe SEER 13 20 ruleandareyouaskingforpubliccomment onthe full 21 range of issues surroundingwithdrawal of the SEER 13 22 rule or only on the legal issues surrounding 23 withdrawing that rule? 24 

### MR. BOWERS: The Notice of Proposed 25 Rulemaking isn't limitedto legal issues and it seems

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com113 1 to me the scope of the rulemaking is fairly clear, 2 that it involves more than legal issues. We're going 3 to discuss the standards later this afternoon. I 4 think comments on all of that is appropriate and 5 invited. 6 MS. KENNEDY: And then clearly you're 7 seeking comments on the proposed

-- 8 MR. BOWERS: Interpretation. 9 MS. KENNEDY: -- 12 SEER rule as well, 10 you're proposal to substitute the SEER 12 rule, right? 11 MR. BOWERS: The proposed standards are 12 open forpublic comment andwe invite comment on them. 13 MS. KENNEDY: And are you asking for 14 comment on the reconsideration of -- on DOE's decision 15 to reconsider the rule based on ARI's petition for 16 reconsideration? 17 MR. BOWERS: Maybe this is an appropriate 18 point, anything that you can comment, the breadth of 19 your comments is really up to you on any legal issues, 20 policy issues related to what we've proposed. We -- 21 a lot of -- there's litigation, asyou're aware inNew 22 York that's going to resolve some legal issues and 23 where you choose -- what you -- so I'm not sure -- ask 24 your question again and I'll respond. 25 What I'm saying is you're free to comment 

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### 113 1 to me the scope of the rulemaking is fairly clear, 2 that it involves more than legal issues. We're going 3 

### to discuss the standards later this afternoon. I 

### 4 think comments·on all of that is appropriate and 5 invited. 6 

### MS. KENNEDY: And then clearly you're 7 seeking comments on the proposed

-- 8 

### MR. BOWERS: Interpretation. 9 

### MS. KENNEDY: - - 12 SEER rule as well, 10 you'reproposaltosubstitutetheSEER 12rule, right? 11 MR. BOWERS: The proposed standards are 12 openforpubliccomment andwe invitecomment onthem. 13 MS. KENNEDY: And are you asking for 14 commentonthereconsiderationof

- - onDOE's decision 15 to reconsider the rule based on ARI's petition for 16 reconsideration? 17 

### MR. BOWERS: Maybe this is an appropriate 18 point, anything that you can comment, the breadth of 19 yourcomments isreallyup toyouonanylegal issues, 20 policy issues related to what we've proposed. We-- 21 a lotof

-- there's litigation, asyou're aware inNew 22 York that's going to resolve some legal issues and 23 whereyou choose

-- whatyou -- so I'mnot sure -- ask 24 your question again and I'll respond. 25 What I'm saying isyou're free to comment

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com114 1 on anything and we're not -- and I think it's fairly 2 clear from the Notice of Proposed Rulemaking what we 3 are proposed, what we've set forth in detail, our 4 rationale and we're inviting comment on it. 5 MS. KENNEDY: I guess I'm just trying to 6 explore what's a proposal and what's been decided. 7 MR. BOWERS: The proposals -- if you want 8 to refer to the Federal Register Notice, the proposed 9 rule begins in the -- on page 38842 of the Federal 10 Register is where the proposed amendments to Part 430 11 commence. And that's the proposed rule upon which we 12 invite comments. 13 MR. HODGES: This is John Hodges. My 14 understanding is that the Federal Register is

-- 15 MR. BROOKMAN: We can't hear. 16 MR. HODGES: This is John Hodges fromARI. 17 My understanding is that this is the whole Federal 18 Register Notice specifically states that they're 19 asking comment with respect to basically the whole 20 ball of wax, that there is a proposal to withdraw the 21 13; there's a proposal with respect to the 12. There 22 is discussion there asking -- inviting comments in 23 relation to legal interpretations. As I understand 24 it, this is to be an open matter which are proposals 25 that the agency is making and the comments are 

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### 114 1 on anything and we're not -- and I think it's fairly 2 

### clear from the Notice of Proposed Rulemaking what we 3 

### are proposed, what we've set forth in detail, our 4 

### rationale and we're inviting comment on it. 5 

### MS. KENNEDY: I guess I'm just trying to 6 

### explore what's a proposal and what's been decided. 7 

### MR. BOWERS: The proposals

-- ifyouwant 8 

### to refer to the Federal RegisterNotice, theproposed 9 

### rule begins in the

-- on page 38842 of the Federal 10 Register iswhere theproposed amendments to Part 430 11 commence. And that's the proposedrule uponwhichwe 12 invite comments. 13 MR. HODGES: This is John Hodges. My 14 understanding is that the Federal Register is

-- 15 

### MR. BROOKMAN: We can't hear. 16 

### MR. HODGES: This isJohnHodges fromARI. 17 My understanding is that this is the whole Federal 18 Register Notice specifically states that they're 19 asking comment with respect to basically the whole 20 ball of wax, that there is a proposal to withdraw the 21 13; there's a proposal withrespect to the 12. There 22 is discussion there' asking

- - inviting comments in 23 relation to legal interpretations. As I understand 24 it, this is to be an open matter which are proposals 25 that the agency is making and the comments are

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com115 1 invited. And that's what my understanding is of DOE's 2 interpretation of this and that certainly is ARI's 3 interpretation andwe intend to take advantage of this 4 opportunity, but nothing is decided. These are 5 proposals. 6 MR. BOWERS: Mike Bowers. I would just 7 say Mr. Hodges said what I just said in a less 8 eloquent manner. 9 MR. HODGES: Thank you. 10 MR. BROOKMAN: Charlie Stephens and then 11 I'll return to Kit. 12 MR. STEPHENS: Charlie Stephens, Oregon 13 Energy Office. I think I'm still not clear. As I 14 understand it, ARI petitioned for reconsideration. 15 DOE decided to meet the request essentially and 16 reconsider and has made a proposal in response but 17 it's not clear at all to me what the public record is 18 at DOE upon which the proposal is being based. 19 I mean, I presume that part of my job is 20 going to be to somehow critique the public record like 21 we did during about seven years of rulemaking. We had 22 the entire public recordbefore us to -- each of us to 23 use in our comments and to interpret. I'm not sure 24 what the public record is right now that I'm supposed 25 to be using to make my comments in this case. 

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### 115 1 invited. Andthat'swhatmyunderstandingisofDOE's 2 interpretation of this and that certainly is ARI's 3 interpretationandwe intendtotake advantageofthis 4 

### opportunity, but nothing is decided. These are 5 

### proposals. 6 

### MR. BOWERS: Mike Bowers. I would just 7 

### say Mr. Hodges said what I just said in a less 8 

### eloquent manner. 9 

### MR. HODGES: Thank you. 10 

### MR. BROOKMAN: Charlie Stephens and then 11 I'll return to Kit. 12 

### MR. STEPHENS: Charlie Stephens, Oregon 13 

### Energy Office. I think I'm still not clear. As I 14 understand it, ARI petitioned for reconsideration. 15 DOE decided to meet the request essentially and 16 reconsider and has made a proposal in response but 17 it's not clear at all to me what the public record is 18 at DOE upon which the proposal is being based. 19 I mean, I presume that part of my job is 20 goingtobetosomehowcritiquethepublicrecordlike 21 

### we didduringabout sevenyearsofrulemaking. We had 22 the entirepublic recordbeforeus to -- eachofus to 23 

### use in our comments and to interpret. I'm not sure 24 what thepublic record is right now that I'm supposed 25 to be using to make my comments in this case.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com116 1 MR. BOWERS: This is Mike Bowers. The 2 public record is in the Freedom of Information Act 3 reading room. The docket number has not change. 4 Michael E. McCabe can give you more specifics as to 5 what's been -- as to what is there but it's a 6 continuing docket. The list of what's in the docket 7 is available to you and if you haven't checked it 8 recently, you can go over to the FOIA reading room and 9 find out what the document -- what the record looks 10 like right now. That's the best I can do to answer 11 your question. 12 MR. BROOKMAN: Yes, Kit Kennedy. 13 MS. KENNEDY: Just I'll follow up on that. 14 I mean, the basic question that we're trying to 15 understand here is that this is a rulemaking that's 16 been going on for eight years or so and counting. Are 17 all the documents and comments from 1994 on considered 18 part of the record for the rulemaking, the proposed 19 rulemaking that's noticed in the July 25th Federal 20 Register. 21 MR. BOWERS: That's correct. 22 MS. KENNEDY: And just going back to the 23 question of sort of what's proposed and what's not, I 24 guess my specific question is in the Federal Register 25 at 38823 DOE states that it's granting ARI's petition 

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### 116 1 

### MR. BOWERS: This is Mike Bowers. The 2 public record is in the Freedom of Information Act 3 

### reading room. The·docket number has not change. 4 Michael E. McCabe can give you more specifics as to 5 

### what's been as to what is there but it's a 6 continuing docket. The list of what's in the docket 7 is available to you and if you haven't checked it 8 recently, youcangoovertotheFOIAreadingroomand 9 find out what.the document

-- what the record looks 10 like right now. That's the best I can do to answer 11 your question. 12 MR. BROOKMAN: Yes, Kit Kennedy. 13 MS. KENNEDY: Just I'llfollowuponthat. 14 I mean, the basic question that we're trying to 15 understand here is that this is a rulemaking that's 16 beengoingon foreightyearsor soandcounting. Are 17 allthedocumentsandcommentsfrom 1994onconsidered 18 part of the record for the rulemaking, the proposed 19 rulemaking that's noticed in the July 25th Federal 20 Register. 21 MR. BOWERS: That's correct. 22 MS. KENNEDY: And just going back to the 23 questionof sort of what'sproposed andwhat's not, I 24**gue~s** 

### my specificquestion is inthe Federal Register 25 at 38823 DOE states that it's grantingARI's petition

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com117 1 for reconsideration. What's the status of that 2 decision? Is that a proposed decision or a decision

- 3 - a determination that's been made? 4 MR. BOWERS: That decision has been made. 5 It's not proposed here because it's a decision that 6 occurred when we reviewed the petition for 7 consideration. The validity of that action is the 8 subject of the lawsuit. It's not the subject of this 9 rulemaking. 10 MR. HODGES: This is John Hodges. As I 11 understand the situation, the agency has -- is 12 reconsidering. That they have granted out request, 13 that they are in the process of reconsidering the 14 matter by proposing a -- to withdraw the 13 and to 15 propose the 12. There has been no decision that has 16 been made to withdraw the 13. That is the subject of 17 the Department of Energy's proposal. It is proposing 18 to withdraw the 13. It is proposing to adopt the 12 19 and those are open to notice and comment. 20 They're granting the request for 21 reconsideration to the extent that they are proposing 22 to take these actions. But my understanding is that 23 no decision has been made with respect to any of those 24 matters and that this is a -- that is what this 25 rulemaking is about, to give everybody an opportunity 

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### 117 1 for reconsideration. What's the status of that 2 decision? Is that a proposeddecisionora decision

- 3 - a determination that's been made? 4 

### MR. BOWERS: That decisionhas beenmade. 5 

### It's not proposed here because it's a decision that 6 

### occurred when we reviewed the petition for 7 

### consideration. The validity of that action is the 8 

### subject of the lawsuit. It's not the subject of this 9 

### rulemaking. 10 

### MR. HODGES: This is John Hodges. As I 11 understand the situation, the agency has is 12 reconsidering. That they have granted out request, 13 that they are in the process of reconsidering the 14 matter by proposing a -- to withdraw the 13 and to 15 propose the 12. There has been no decision that has 16 beenmade to withdraw the 13. That is the subject of 17 the Department of Energy'sproposal. It isproposing 18 

### to withdraw the 13. It is proposing to adopt the 12 19 and those are open to notice and comment. 20 

### They're granting the request for 21 reconsideration to the extent that they areproposing 22 to take these actions. But my understanding is that 23 nodecisionhasbeenmadewithrespect toanyof those 24 

### matters and that this 1S 

### a that is what this 25 rulemaking is about, togive everybodyanopportunity

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com118 1 to have a chance to put in their opportunity for 2 public comment and that's why we have at least 50 3 people here today. And, you know, we don't want to 4 have somebody draw us off base in this regard. These 5 are proposals. They're being considered andyou folks 6 are all here to be able to comment on it. I want to 7 state that very forcefully. 8 MR. BOWERS: This is Mike Bowers. Just to 9 make sure that this is clarified, I said that the 10 decision to reconsider the matter is this rulemaking. 11 So that decision to reconsider this matter has been 12 made, but what the rule is going to look like will be 13 the result of the rulemaking, so just to be clear on 14 it. 15 MS. KENNEDY: And the Federal Register 16 Notice also talks about decisions by DOE to re-weight 17 various factors in the rulemaking. And what's the 18 status of those decisions? Are those decisions to 19 reweight in your view proposed or decisions that the 20 Department has made? 21 MR. HODGES: Reweighing in the decision to 22 propose. My understanding is, again, that this is the 23 -- the reweighing is set forth very clearly in the 24 Federal Register Notice as part of a -- as part of a 25 proposal. These decisions as to how these things are 

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### 118 1 to have a chance to put in their opportunity for 2 public comment and that's why we have at least 50 3 

### people here today. And, you know, we don't want to 4 

### have somebodydrawus off base in this regard. These 5 

### areproposals. They'rebeingconsideredandyoufolks 6 

### are all here to be able to comment on it. I 

### want to 7 

### state that very forcefully. 8 

### MR. BOWERS: This isMikeBowers. Justto 9 

### make sure that·this is clarified, I 

### said that the 10 

### decisionto reconsiderthe matter is this rulemaking. 11 So that decision to reconsider this matter has been 12 

### made, but what the rule is going to look like will be 13 

### the result of the rulemaking, so just to be clear on 14 

### it. 15 

### MS. KENNEDY: And the Federal Register 16 Notice also talks about decisions byDOE to re-weight 17 

### various factors' in the rulemaking. And what's the 18 status of those decisions? Are those decisions to 19 reweight in your view proposed or decisions that the 20 Department has made? 21 

### MR. HODGES: Reweighinginthedecisionto 22 propose. Myunderstandingis, again, that this isthe 23

-- the reweighing is set forth very clearly in the 24 Federal Register Notice as part of a -- as part of a 25 proposal. These decisions as to how these things are

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com119 1 going to be weighed are being put out before the 2 public for the public to be able to participate and 3 again, I think that everybody should feel free to make 4 their statements on -- in this rulemaking as to 5 whether or not the agency's proposal with respect to 6 reweighing should be adopted or not but take your 7 opportunity here to make your public comments, both 8 orally and in writing. 9 This is your chance. There will be a 10 chance further on October 19th and please take 11 advantage of that opportunity. 12 MR. BROOKMAN: That commenter was John 13 Hodges, ARI. Do you wish to follow up, Mike or are 14 you satisfied. 15 MR. BOWERS: No. 16 MR. BROOKMAN: Letme recognize Ed Pollock 17 and then I'll return to the other people that I see 18 there; both Steve and Bill and Kit as well. 19 MR. POLLOCK: This is Ed Pollock, 20 Department of Energy. I think it might be useful to 21 just give an overview of the process that we use for 22 setting or determining a level for proposing a 23 standard. The statute sets eight criteria which we 24 need to consider. Iwon't go through those criteria. 25 They're written and we've talked about them a number 

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### 119 1 going to be weighed are being put out before the 2 public for the public to be able to participate and 3 again, I thinkthat everybodyshouldfeel free tomake 4 

### their statements on in this rulemaking as to 5 

### whether or not the agency's proposal with respect to 6 

### reweighing should be adopted or not but take your 7 opportunity here to make your public comments, both 8 

### orally and in writing. 9 

### This is your chance. There will be a 10 chance further on October 19th and please take 11 advantage of that opportunity. 12 MR. BROOKMAN: That commenter was John 13 

### Hodges, ARI. Do you wish to follow up, Mike or are 14 you satisfied. 15 MR. BOWERS: No. 16 

### MR. BROOKMAN: Letme recognizeEdPollock 17 and then I'll return to the other people that I see 18 there; both Steve and Bill and Kit as well. 19 MR. POLLOCK: This is Ed Pollock, 20 Department of Energy. I think it might be useful to 21 just give an overview of the process that we use for 22 setting or determining a level for proposing a 23 

### standard. The statute sets eight criteria which we 24 need to consider. I won't go through those criteria. 25 They're written and we've talked about them a number

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com120 1 of different times. They are in the notice. The 2 point is that there is no line that's drawn in the way 3 that we weigh those criteria. 4 The law says that we need to determine, 5 using those criteria whether the proposed standard is 6 the maximum that is technology feasible, economically 7 justified, but there is a lot of judgment leeway in 8 applying those criteria and making those 9 determinations. What is being done here as we re-open 10 the record and the process of applying the weights to 11 those criteria and coming up to the decision of what 12 that level should be is what's under discussion now. 13 And what we're looking for comments on is 14 any interpretation of the way that that's been applied 15 in coming to the final conclusion of have we reached 16 the level that's the maximum that economically 17 justified. 18 MR. BROOKMAN: I saw the people in this 19 order that wish to respond; Steve Rosenstock, Bill 20 Prindle, then Kit and then I'll to Charlie Stephens. 21 If we could be concise, that would be helpful. 22 MR. ROSENSTOCK: Steve Rosenstock, EEI. 23 Just as another matter, in the July 25th, 2001 issue, 24 there are values shown for the through the wall air 25 conditioners and heat pumps. As I recall in the 

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### 120 1 

### of different times. They are in the notice. The 2 point is that there isno line that'sdrawn intheway 3 that we weigh those criteria. 4 The law says that we need to determine, 5 usingthose criteriawhether the proposed standard is 6 themaximumthat is technologyfeasible, economically 7 justified, but there is a lot of judgment leeway in 8 

### applying those criteria and making those 9 determinations. What isbeingdonehereaswe re-open 10 the recordand theprocess of applying the weights to 11 those criteria and coming up to the decision of what 12 that level should be is what's under discussion now. 13 Andwhat we're looking for comments on is 14 anyinterpretationofthewaythatthat'sbeenapplied 15 in coming to the final conclusion of have we reached 16 the level that's the maximum that economically 17 justified. 18 

### MR. BROOKMAN: I saw the people in this 19 order that wish to respond; Steve Rosenstock, Bill 20 Prindle, then Kit and then I'll to Charlie Stephens. 21 If we couldbe concise, that would be helpful. 22 MR. ROSENSTOCK: Steve Rosenstock, EEl. 23 Just as anothermatter, inthe July 25th, 2001 issue, 24 there are values shown for the through the wall air 25 conditioners and heat pumps. As I recall in the

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com121 1 January 22nd issue of the Federal Register, those 2 values were left blank to say that DOE was going to 3 install them at a later date. Is that -- well, first 4 of all I want. to follow up actually. Is that a 5 correct recollection? Is -- 6 MR. POLLOCK: This is Ed Pollock. You're 7 moving ahead with the agenda. We will talk about that 8 later this afternoon. 9 MR. ROSENSTOCK: Well, I want to get back 10 to a legal issue because in terms of there would have 11 been some sort of addition to that January rule anyway 12 to take care of the through the wall units. 13 MR. POLLOCK: Okay, let's just address 14 that concern. In looking at the criteria, one of the 15 factors that we have to consider is that we not set a 16 standard to the point where we remove a product from 17 the market that has certain value to the consumers. 18 Through the wall, the high velocity systems and some 19 of those others were basically constrained, we use as 20 a term were products which we felt had certain 21 restrictions on themwhich made it unlikely they would 22 be able to meet 13 SEER cost effectively. 23 In the 13 SEER those criteria change and 24 that's why you see a different mix of those specialty 25 products in the two different proposed levels. 

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### 121 1 January 22nd issue of the Federal Register, those 2 values were left blank to say that DOE was going to 3 install them at a laterdate. Is that

-- well, first 4 

### of all I want.to follow up actually. Is that a 5 correct recollection? Is 6 

### MR. POLLOCK: This is Ed Pollock. You're 7 movingaheadwiththe agenda. We will talkabout that 8 later this afternoon. 9 

### MR. ROSENSTOCK: Well, I want to get back 10 to a legal issuebecause in terms of there wouldhave 11 beensome sortofadditiontothatJanuaryruleanyway 12 to take care of the through the wall units. 13 MR. POLLOCK: Okay, let's just address 14 that concern. In looking at the criteria, one of the 15 factors that we have to consider is that we not set a 16 standard to the point where we remove a product from 17 the market that has certain value to the consumers. 18 Through the wall, the high velocity systems and some 19 of those otherswere basicallyconstrained, we use as 20 a term were products which we felt had certain 21 restrictionsonthemwhichmadeitunlikelytheywould 22 be able to meet 13 SEER cost effectively. 23 In the 13 SEER those criteria change and 24 that's whyyou see a different mix of those specialty 25 products in the two different proposed levels.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW WASHINGTON, D.C. 20005-3701 www.nealrgross.com122 1 MR. ROSENSTOCK: Okay. 2 MR. POLLOCK: And we'll talk about that 3 more later on this afternoon but that's why at one 4 level more than -- at the 12 more than can meet the 5 standard in our review of the data and capabilities. 6 MR. ROSENSTOCK: But I guess I'm getting 7 back to the fact that even --- there would have been

- 8 - the January rule has no values for the through the 9 wall units and now the July issue does have. The July 10 version does have values. Therefore, the January 11 version would have had to be changed or updated anyway 12 to include the through the wall unit now, right? 13 MR. POLLOCK: We reserved -- we 14 established those separate classes and we reserved 15 action on those until we had time to collect 16 sufficient data and analyze it in order to determine 17 what level could be achieved. We could have 18 determined, had we had the time, perhaps, that those 19 could also have made a 13. After we went back and 20 looked at it further, we decided, no, they couldn't, 21 that's why we proposed to develop the 12 further. 22 MR. ROSENSTOCK: Okay. So if people

-- 23 I'm just also getting back, if people want the January 24 version of it, then the January version had these 25 numbers as blank technically, right? 

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### MR. ROSENSTOCK: Okay. 2 

### MR. POLLOCK: And we'll talk about that 3 more later on this afternoon but that's why at one 4 

### level more than at the 12 

### more than can meet the 5 

### standard in our review of the data and capabilities. 6 

### MR. ROSENSTOCK: But I guess I'm getting 7 

### backtothe fact that even --- therewouldhave been

- 8 - 

### the January rule has no values for the through the 9 

### wallunits andnow theJulyissuedoes have. The July 10 

### version does have values. Therefore, the January 11 

### versionwouldhavehadtobechangedorupdatedanyway 12 

### to include the through the wall unit now, right? 13 

### MR. POLLOCK: We reserved we 14 established those separate classes and we reserved 15 action on those until we had time to collect 16 sufficient data and analyze it in order to determine 17 

### what level could be achieved. We could have 18 determined, had we had the time, perhaps, that those 19 

### could also have made a 13. 

### After we went back and 20 looked at it further, we decided, no, they couldn't, 21 

### that's why we proposed to develop the 12 

### further. 22 

### MR. ROSENSTOCK: Okay. So if people 23 I'mjust alsogettingback, ifpeoplewant theJanuary 24 version of it, then the January version had these 25 numbers as blank technically, right?

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com123 1 MR. POLLOCK: Right. 2 MR. ROSENSTOCK: Thank you. 3 MR. PRINDLE: Bill Prindle. I have a 4 comment and then a question for the Department staff. 5 In the process rule the normal sequence of things is 6 frame work, workshop, analysis, ANOPR, more analysis, 7 comments, NOPR and final rule. Since the Department 8 is conducting a new NOPR process, our comment, you 9 know, has been and will be that all of the relevant 10 analytical processes should be re-opened and take into 11 account any new data that's been presented to the 12 record since then. 13 Not being familiarwith this whole process 14 of reconsideration and what happens when a final rule 15 becomes all of a sudden not a final rule and becomes 16 somehow transmogrified into a proposed rule again, I'm 17 wanting some clarity from the Department as to what 18 the rules are regarding analytical requirements. My 19 presumption has been that the Department needs to redo 20 all the analyses that are relevant to this rule and 21 take into account any data that's come forward. I'm 22 just looking, you know, what does the Department think 23 it's required to do in that regard? 24 MR. POLLOCK: This is Ed Pollock. Without 25 commenting on the issue around the legality of the 

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### 123 1 

### MR. POLLOCK: Right. 2 MR. ROSENSTOCK: Thank you. 3 

### MR. PRINDLE: Bill Prindle. I have a 4 comment and then a question for the Department staff. 5 

### In the process rule the normal sequence of things is 6 

### frame work, workshop, analysis, ANOPR, more analysis, 7 

### comments, NOPR and final rule. Since the Department 8 

### is conducting a new NOPR process, our comment, you 9 

### know, has been and will be that all of the relevant 10 

### analyticalprocesses shouldbere-openedandtake into 11 account any new data that's been presented to the 12 record since then. 13 Notbeingfamiliarwiththiswholeprocess 14 

### of reconsideration andwhat happens when a final rule 15 

### becomes all of a sudden not a final rule and becomes 16 

### somehowtransmogrifiedintoa proposedruleagain, I'm 17 

### wanting some clarity from the Department as to what 18 

### the rules are regarding analytical requirements. My 19 

### presumptionhasbeenthat theDepartmentneedstoredo 20 

### all the analyses that are relevant to this rule and 21 take into account any data that's come forward. I'm 22 just looking, youknow, whatdoes theDepartment think 23 it's required to do in that regard? 24 MR. POLLOCK: This isEdPollock. Without 25 commenting on the issue around the legality of the

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com124 1 final rule, Bill, you've been involved with a number 2 of these rules where we've had additional data or new 3 actors which have come to light after we proposed a 4 rule and we have not gone back and developed an ANOPR 5 and done the whole rulemaking over again. We've gone 6 from where we were on the record, have reproposed, 7 water heaters is an example, where we've reproposed 8 because we've had other factors we felt needed to be 9 considered that were brought to our attention. 10 So in my mind, that's where we are, 11 setting aside the issue of final rule or otherwise, 12 but with -- we went back based on the record that was 13 already there, no reason to start completely over 14 again with screening, ANOPR, we went to the point of 15 reproposing, considering the factors that were there 16 on the table already and that analysis that was 17 available to us. 18 MR. PRINDLE: Bill Prindle again. So does 19 that mean that the Department doesn't feel that it's 20 required to take another look at the life cycle cost 21 analysis? 22 MR. POLLOCK: This is Ed Pollock. No, we 23 did take a look at those. We looked at the numbers 24 and we determined that given the short time frame 25 between, the data that we had was still valid data. 

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### 124 1 final rule, Bill, you've been involved with a number 2 of these rules where we've had additional dataornew 3 actors which have come to light after we proposed a 4 rule andwe have not gone back and developed anANOPR 5 anddone the whole rulemaking over again. We've gone 6 from where we were on the record, have reproposed, 7 water heaters is an example, where we've reproposed 8 because we've had other factors we felt needed to be 9 considered that were brought to our attention. 10 

### So in my mind, that's where we are, 11 setting aside the issue of final rule or otherwise, 12 but with

-- we went backbased on the record that was 13 already there, no reason to start completely over 14 again with screening, ANOPR, we went to the point of 15 reproposing, considering the factors that were there 16 on the table already and that analysis that was 17 available to us. 18 

### MR. PRINDLE: BillPrindleagain. Sodoes 19 that mean that the Department doesn't feel that it's 20 required to take another look at the life cycle cost 21 analysis? 22 MR. POLLOCK: This is Ed Pollock. No, we 23 

### did take a look at those. We looked at the numbers 24 and we determined that given the short time frame 25 between, the data that we had was still valid data.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com125 1 MR. BROOKMAN: Kit, you're next. 2 MS. KENNEDY: Bill, let me just follow up 3 with that for a second. I think what you're hearing 4 today is that indeed, data from the last year since 5 the rulemaking was closed is very significant on the 6 issue of life cycle cost and that cast out, at least 7 on the freshness of the data that you used. 8 And I guess just the question is, will you 9 reopen the record to look at data concerning the 10 electricity prices and other related factors in the 11 last year or since the record was closed for the SEER 12 13 rule? 13 MR. POLLOCK: This is Ed Pollock. As with 14 any rulemaking, one of the reasons you do a proposed 15 rule is to solicit comments and additional data and 16 any new data that is presented to us, we will evaluate 17 in terms of what impact it has on our final decisions. 18 So, yes, data is very important to us in our decision 19 making process. We try to base all of our decisions 20 on sound data and sound analysis and we invite 21 everyone to if they have new data for the record that 22 substantially would change our position, yes, that 23 should be provided to us. 24 MR. BROOKMAN: Thank you. Charlie 25 Stephens, I think. Oh, pardon me, you weren't 

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### 125 1 MR. BROOKMAN: Kit, you're next. 2 MS. KENNEDY: Bill, let me just followup 3 with that for a second. I think what you're hearing 4 today is that indeed, data from the last year since 5 the rulemaking was closed is very significant on the 6 issue of life cycle cost and that cast out, at least 7 on the freshness of the data that you used. 8 AndI guessjustthequestionis, willyou 9 reopen the record to look at data concerning the 10 electricity prices and other related factors in the 11 last yearor since the recordwas closed for the SEER 12 13 rule? 13 MR. POLLOCK: This isEdPollock. As with 14 any rulemaking, one of the reasons you do a proposed 15 rule is to solicit comments and additional data and 16 anynewdatathat ispresentedtous, we willevaluate 17 intermsofwhat impact ithasonourfinal decisions. 18 So, yes, data isvery important to us in our decision 19 making process. We try to base all of our decisions 20 on sound data and sound analysis and we invite 21 everyone to if theyhave new data for the record that 22 substantially would change our position, yes, that 23 should be provided to us. 24 

### MR. BROOKMAN: Thank you. Charlie 25 Stephens, I think. Oh, pardon me, you weren't

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com126 1 finished. 2 MS. KENNEDY: I'm not. I mean, I don't 3 want to be a hog here but I've just got a couple more 4 questions on these issues. 5 MR. BROOKMAN: Let's let Charlie go and 6 then I'll return to you. 7 MS. KENNEDY: Okay. 8 MR. STEPHENS: Charlie Stephens. This 9 actually Kit may have some interest in this as well, 10 but I'm trying to figure out, we've got two different 11 time lines here going on at the same time. There's 12 this New York legal action time line that, you know, 13 I'm not entirely familiar with when it will come to 14 some conclusion but I'm also kind of curious that if 15 it does come to some conclusion and the plaintiff wins 16 that one, does the docket number stay the same? 17 MR. BOWERS: I don't have a response. I'm 18 not going to speculate on what's going to happen if 19 litigation comes out one way or the other. I mean, 20 the docket for the rulemaking is the same regardless 21 of how the litigation comes out, I guess is the 22 answer. 23 MR. BROOKMAN: That was Mike Bowers. Do 24 you wish to follow-on, Charlie? 25 MR. STEPHENS: Well, it seems to me that 

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### 126 1 finished. 2 MS. KENNEDY: I'm not. I mean, I don't 3 want to be a hoghere but I've just got a couple more 4 questions on**th~se** 

### issues. 5 

### MR. BROOKMAN: Let's let Charlie go and 6 then I'll return to you. 7 

### MS. KENNEDY: Okay. 8 

### MR. STEPHENS: Charlie Stephens. This 9 actually Kit may have some interest in this as well, 10 but I'mtrying to figure out, we've got two different 11 time lines here going on at the same time. There's 12 this New York legal action time line that, you know, 13 I'm not entirely familiar with when it will come to 14 some conclusion but I'm also kind of curious that if 15 itdoes cometo some conclusionandtheplaintiffwins 16 that one, does the docket number stay the same? 17 

### MR. BOWERS: I don't havea response. I'm 18 not going to speculate on what's going to happen if 19 

### litigation comes out one way or the other. I mean, 20 the docket for the rulemaking 1S 

### the same regardless 21 of how the litigation comes out, I guess is the 22 answer. 23 

### MR. BROOKMAN: That was Mike Bowers. Do 24 you wish to follow-on, Charlie? 25

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### MR. STEPHENS: Well, it seems to me that NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 www.nealrgross.com127 1 the answer in that would be that the final rule was 2 the final rule. And I guess that means that a final 3 rule doesn't necessarily close a docket if it's found 4 to be a final rule; is that true? 5 MR. BOWERS: The outcome of the litigation 6 could effect the outcome of this rulemaking if, as you 7 say, the plaintiff wins. I mean, they're related in 8 that sense but your question was what is the docket. 9 MR. STEPHENS: My question is the time 10 line. I guess I need to know when I'm submitting 11 comments here, I really would like to know which 12 docket. I'm assuming it's the one that I'm working 13 on, whether it's a -- 14 MR. BOWERS: Are you in the lawsuit? 15 MR. STEPHENS: Not yet. 16 MR. BOWERS: Are you in the Court? 17 MR. STEPHENS: I'm interested in the 18 outcome because I have to make comments. 19 MR. BOWERS: This is the Department of 20 Energy is doing a rulemaking. There's a record for 21 that and you should participate fully. I can't answer 22 your questions about litigation. That's not my rule. 23 MR. BROOKMAN: Ed Pollock. 24 MR. POLLOCK: Ed Pollock, again. The 25 issue of the docket, as Mike pointed out earlier, it 

### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323RHODE ISLANDAVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 127 

### 1 the answer in that would be that the final rule was 2 

### the final rule. And I guess that means that a final 3 

### rule doesn't necessarilyclose a docket if it's found 4 

### to be a final rule; is that true? 5 

### MR. BOWERS: Theoutcomeofthelitigation 6 

### couldeffect theoutcomeof this rulemakingif, asyou 7 

### say, the plaintiff wins. I mean, they're related in 8 

### that sense but your question was what is the docket. 9 

### MR. STEPHENS: My question is the time 10 

### line. I guess I need to know when I'm submitting 11 

### comments here, I really would like to know which 12 

### docket. I'm assuming it's the one that I'm working 13 

### on, whether it's

# a-- 14 

### MR. BOWERS: Are you in the lawsuit? 15 

### MR. STEPHENS: Not yet. 16 

### MR. BOWERS: Are you in the Court? 17 

### MR. STEPHENS: I'm interested in the 18 

### outcome because I have to make comments. 19 

### MR. BOWERS: This is the Department of 20 

### Energy is doing a rulemaking. There's a record for 21 

### that andyoushouldparticipate fully. I can'tanswer 22 

### your questions about litigation. That's not my rule. 23 

### MR. BROOKMAN: Ed Pollock. 24 

### MR. POLLOCK: Ed Pollock, again. The 25 issue of the docket, as Mike pointed out earlier, it

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com128 1 is the same docket file, has the same docket number. 2 All the documentation is or should be in the reading 3 room. 4 Sometimes we have problems with people 5 being too lazy to make copies and they take our 6 originals, but the -- somewhere along the line, no 7 matter how this proceeds in the court, I believe we 8 will need to issue a Federal Register notice if we -- 9 you know, if that court action should change where we 10 are to inform the public and so that would be the 11 final action that would be necessary. 12 If we -- if the court was to find that we 13 were correct in our decision, then, of course, the 14 final rule that comes out of this proposed rule would 15 be sufficient for the record to establish the new 16 standard. So the time lines are basically running 17 parallel but depending on which is completed first, 18 there may be some additional requirement on our part 19 just to inform the public. 20 MS. KENNEDY: Just going back to the point 21 of what's proposed and what's decided, let me just 22 tell you -- 23 MR. BOWERS: Just to be clear, what has 24 been proposed starts on page 38842 of the Federal 25 Register notice and goes through the regulatory text. 

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### 128 1 is the same docket file, has the same docket number. 2 

### All the documentation is or should be in the reading 3 

### room. 4 

### Sometimes we have problems with people 5 

### being too lazy to make copies and they take our 6 

### originals, but the

-- somewhere along the line, no 7 matter how this proceeds in the court, I believe we 8 

### will need to issue a Federal Register notice if we 9 

### you know, if that court action should changewhere we 10 

### are to inform the public and so that would be the 11 final action that would be necessary. 12 If we if the court was to find that we 13 were correct in our decision, then, of course, the 14 final rule that comes out of this proposedrule would 15 be sufficient for the record to establish the new 16 

### standard. So the time lines are basically running 17 parallel but depending on which is completed first, 18 there may be some additional requirement on our part 19 just to inform the public. 20 

### MS. KENNEDY: Justgoingbacktothepoint 21 of what's proposed and what's decided, let me just 22 tell you -- 23 MR. BOWERS: Just to be clear, what has 24 

### been proposed starts on page 38842 

### of the Federal 25 Registernotice andgoes through the regulatorytext.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com129 1 That is all that has been proposed. The preamble 2 explains the basis for what we've proposed and all 3 that is open for public comment. We invite public 4 comment on it. So continue if you have

-- 5 MS. KENNEDY: Yeah, I just want to sort of 6 briefly address in our view the interplaybetween this 7 process in this hearing today and the litigation in 8 New York. Our view, of course, is that the SEER 13 9 rule is final and that the changes that were made to 10 it were illegal and that as a result of that, this 11 process and this hearing, the DOE is really not 12 authorized to engage in this additional process. 13 So I just want to kind of put that out in 14 the open. We're here to participate because we care 15 a great deal about this issue. We're going to come to 16 any forum where there's the possibility to inform 17 decision makers about our view and I think I'm -- 18 there's Mel. I think I'm speaking for CFA as well on 19 this. So by participating here today, we don't waive 20 any rights that we have as litigants. We don't 21 believe the post-January events should have happened 22 but you've asked for our views and we want to give you 23 our views in the interest of open dialogue. 24 We're concerned, frankly, about this issue 25 of what the Department has already decided and what is 

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### 129 1 

### That is all that has been proposed. The preamble 2 explains the basis for what we've proposed and all 3 

### that is open for public comment. We invite public 4 

### comment on it. So continue if you have

-- 5 

### MS. KENNEDY: Yeah, I justwant to sortof 6 brieflyaddress inourviewthe interplaybetweenthis 7 process in this hearing today and the litigation in 8 

### New York. Our view, of course, is that the SEER 13 9 rule is final and that the changes that were made to 10 it were illegal and that as a result of that, this 11 process and this hearing, the DOE is really not 12 authorized to engage in this additional process. 13 So I justwant tokind of put that out in 14 the open. We're here to participate because we care 15 a great deal about this issue. We'regoingto come to 16 any forum where there's the possibility to inform 17 decision makers about our view and I think I'm 18 there's Mel. I think I'm speaking for CFA as well on 19 this. Sobyparticipatinghere today, we don't waive 20 

### any rights that we have as litigants. We don't 21 believe the post-January events should have happened 22 butyou've askedforourviews andwe want togiveyou 23 our views in the interest of open dialogue. 24 We'reconcerned, frankly, aboutthisissue 25 ofwhat theDepartmenthas alreadydecidedandwhat is

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com130 1 really on the table for open discussion and there's 2 discussion in the preamble to the July 25th rule, 3 which I think gives us reason to be concerned, 4 including the decision to grant the petition for 5 reconsideration and the decision discussed, I guess, 6 at 38828 to 38829, and in other areas of the Register 7 notice to reweigh various factors which don't sound 8 like proposals, they sound like decisions that have 9 already been made. 10 And when we look back over the last year, 11 starting in Januarywith the issuance of the cardmemo 12 and going through the two amendments, the press 13 release which the Department issued in April, you 14 know, unfortunately I just want to say we hope the 15 Department's mind is still open. We're here talking 16 toyou about these issues but we're concerned that the 17 evidence before us suggests a certain outcome which is 18 the.12 SEER rule. And I just want to kind of put that 19 on the table so that you can know what we're thinking 20 about as we participate here. 21 MR. HODGES: Well, as the -- this is John 22 Hodges for the ARI, representing the folks who have 23 requested that reconsideration. We don't consider 24 anything a foregone conclusion in this situation. We 25 consider these all to beproposals. Our understanding 

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### 130 1 really on the table for open discussion and there's 2 discussion in the preamble to the July 25th rule, 3 which I think gives us reason to be concerned, 4 including the decision to grant the petition for 5 reconsideration and the decision discussed, I guess, 6 at 38828 to 38829, and in other areas of the Register 7 notice to reweigh various factors which don't sound 8 like proposals, they sound like decisions that have 9 alreadybeen made. 10 Andwhenwe lookback overthe lastyear, 11 startinginJanuarywiththe issuanceofthe cardmemo 12 and going through the two amendments, the press 13 release which the Department issued in April, you 14 know, unfortunately I just want to say we hope the 15 Department's mind is still open. We're here talking 16 toyouabout these issuesbutwe'reconcernedthatthe 17 evidencebeforeus suggestsa certainoutcomewhichis 18 the.12 SEER rule. And I justwant tokindofput that 19 on the table so that you canknow what we're thinking 20 about as we participate here. 21 MR. HODGES: Well, as the

-- this is John 22 Hodges for the ARI, representing the folks who have 23 requested that reconsideration. We don't consider 24 anythinga foregone conclusion inthis situation. We 25 considerthesealltobeproposals. Ourunderstanding

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 www.nealrgross.com131 1 of the phrase that was used on granting our request 2 for reconsideration is a limited one to the extent 3 that they're saying, "All right, we're going to make 4 a proposal. We are going to reconsider this matter", 5 but as far as my understanding is, that phrase simply 6 meant that the agency is going to reconsider the 7 matter. 8 And that is all a proposal. The proposal 9 to withdraw the 13 is stated as a proposal. We're 10 here to offer comments on that and you all are 11 available to do that as well. The proposal to adopt 12 the 12 is a proposal. The legal interpretations that 13 are being put forth are proposals. Again, you can try 14 to pull out tiny phrases here. I think frankly, it's 15 very insulting to say that this agency is going 16 through this effort, to say that this is all fraud and 17 a foregone conclusion. These are proposals. 18 That's what it states it is and I think 19 the agency should be taken for what this document 20 overall is. It is a proposal. 21 MR. BROOKMAN: Any further comments? 22 Steve Rosenstock. 23 MR. ROSENSTOCK: Steve Rosenstock. I 24 heard thephrase that one party thinks that everything 25 done since January was, quote, "illegal", unquote. 

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### 131 1 of the phrase that was used on granting our request 2 for reconsideration is a limited one to the extent 3 that they're saying, "All right, we're going to make 4 a proposal. We are going to reconsiderthis matter", 5 but as far as my understanding is, thatphrase simply 6 meant that the agency is going to reconsider the 7 matter. 8 

### And that is all a proposal. Theproposal 9 

### to withdraw the 13 is stated as a proposal. We're 10 here to offer comments on that and you all are 11 available to do that as well. The proposal to adopt 12 the 12 is a proposal. The legal interpretations that 13 arebeingput forthareproposals. Again, youcantry 14 topullout tinyphrases here. I think frankly, it's 15 very insulting to say that this agency is going 16 throughthiseffort, to saythat this isall fraudand 17 a foregone conclusion. These are proposals. 18 That's what it states it is and I think 19 the agency should be taken for what this document 20 overall is. It is a proposal. 21 MR.· BROOKMAN: Any further comments? 22 Steve Rosenstock. 23 

### MR. ROSENSTOCK: Steve Rosenstock. I 

### 24 heardthephrasethatonepartythinksthateverything 25 done since January was, quote, "illegal", unquote.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com132 1 And I guess my only comment is in the July rule there 2 are numbers, there are efficiency levels shown for 3 through the wall units whereas in January they were 4 blank. So if you're saying that the July -- this July 5 Federal Register notice is illegal or it should be 6 null and void, then you're throwing out the efficiency 7 values for the through the wall units because in 8 January those numbers were left blank. So if you 9 throw out the July issue and you have the January 10 level, then technically what you have is no standard 11 for through the'wall units, if you wanted to be

-- 12 MR. BROOKMAN: In my own mind, I need to 13 make a subtle distinction between people trying to 14 describe, to describe their concerns and starting to 15 argue them here. I don't think this is the place to 16 argue the legal issues as opposed to stating them. 17 I'll got to you next. 18 MR. HUNT: Marshall Hunt, Pacific Gas and 19 Electric Company. I am concerned that the record, 20 particularly the record concerning the increase in 21 prices, which we had a refreshment of that issue for 22 myself and others this morning wasn't adequately 23 considered as the Department reconsidered issues and 24 came up with a proposal, I'll emphasize that for the 25 benefit of those here, I did listen, when the proposal 

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### 132 1 And I guess my onlycomment is in the Julyrule there 2 are numbers, there are efficiency levels shown for 3 through the wall units whereas in January they were 4 blank. So ifyou're sayingthattheJuly

-- thisJuly 5 Federal Register notice is illegal or it should be 6 

### nullandvoid, thenyou'rethrowingouttheefficiency 7 

### values for the through the wall units because in 8 

### January those numbers were left blank. So if you 9 throw out the July issue and you have the January 10**lev~l,** 

### then technically what you have is no standard 11 for through the wall units, if you wanted to be

-- 12 MR. BROOKMAN: In my own mind, I need to 13 make a subtle distinction between people trying to 14 des6ribe, to describe their concerns and starting to 15 argue them**here~** 

### I don't think this is the place to 16 

### argue the legal issues as opposed to stating them. 17 I'll got to you next. 18 

### MR. HUNT: MarshallHunt, Pacific Gas and 19 

### Electric Company. I am concerned that the record, 20 particularly the record concerning the increase in 21 prices, which we had a refreshment of that issue for 22 myself and others this morning wasn't adequately 23 considered as the Department reconsidered issues and 24 came up with a proposal, I'll emphasize that for the 25 benefitofthosehere, I didlisten, whentheproposal

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com133 1 was made for SEER 12. 2 I'm particularly concernedwhen I, for the 3 purpose of discussion, view this graph of winners and 4 losers we might say, the ARI graph, and let's for 5 example, delete the

-- 6 MR. BROOKMAN: That graph being the map of 7 the United States that was a part of their attachment. 8 MR. HUNT: Right, and let's just suppose 9 we just change the headings so-we ignore the greater 10 than 20-year payback which I don't think any of us 11 believe, but we keep the graphic and I guess this 12 would be the DOE staff, maybe Mr. Pollock, but how can 13 I determine so that I can comment on it, that the data 14 that our group, some of us help submit a year ago 15 about increased prices, I remember that we had 16 appearing, I think Andrew deLaski had arranged for 17 some testimony where we looked again at what prices 18 were looking like at that time. 19 And certainly we discussed -- I discussed 20 at that time in our testimony and had recently 21 discussed today more but let's sayyou only had access 22 to the data we submitted a year ago, both my data and 23 the data that Mr. deLaski's people discussed. How can 24 I determine that you considered that as part of your 25 proposal for SEER 12? Do you have a spread sheet I 

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### 133 1 was made for SEER 12. 2 I'mparticularlyconcernedwhenI, forthe 3 purpose of discussion, viewthis graphof winners and 4 losers we might say, the ARI graph, and let's for 5 example, delete the

-- 6 

### MR. BROOKMAN: Thatgraphbeingthemap of 7 theUnitedStatesthatwas a partoftheirattachment. 8 

### MR. HUNT: Right, and let's just suppose 9 we just change the headings so·we ignore the greater 10 than 20-year payback which I don't think any of us 11 believe, but we keep the graphic and I guess this 12 wouldbe theDOE staff, maybeMr. Pollock, buthowcan 13 I determine sothat I cancomment onit, that the data 14 that our group, some of us help submit a year ago 15 about increased prices, I remember that we had 16 appearing, I thirik Andrew deLaski had arranged for 17 some testimony where we looked again at what prices 18 were looking like at that time. 19 Andcertainlywe discussed

-- I discussed 20 at that time in our testimony and had recently· 21 discussedtodaymorebut let's sayyouonlyhadaccess 22 to the datawe submitted a year ago, bothmy data and 23 thedatathatMr. deLaski'speoplediscussed. Howcan 24 I determine that you considered that as part of your 25 proposal for SEER 12? Do you have a spread sheet I

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com134 1 can look at or an analysis? Is it on the CD ROM that 2 we got today? Where can I find that so I can comment? 3 MR. McCABE: Mike McCabe, this is also 4 going to be on the next issue section, discussion of 5 the proposal, but responding to your question, the CD 6 does have the -- in the life cycle cost analysis, you 7 could amend the costs as you -- they're arbitrary so 8 you could put in any cost structure that you wish and 9 come up with a new calculated life cycle. 10 MR. HUNT: Thank you. 11 MR. McCABE: It's not to the detail of

-- 12 it doesn't use the crystal ball simulation tool. The 13 numbers are based all on the average values. You can 14 run the simulation if you wish but that adds quite a 15 bit of complexity. 16 MR. POLLOCK: This is Ed Pollock. I think 17 there was one other part of that question that 18 Marshall was also mentioning that was how can you be 19 assured that the data that's already on the record 20 will be considered? I think if you go back and look 21 at the discussion that we have on this proposal in the 22 pre-amble that we have continued to address the 23 economics and certainly all of the economic data that 24 was on record is part of that package which is 25 considered. If you feel that your specific area was 

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### 134 1 can look at or an analysis? Is it on the CD ROM that 2 we got today? Where can I find that so I cancomment? 3 

### MR. McCABE: Mike McCabe, this is also 4 going to be on the next issue section, discussion of 5 theproposal, but respondingtoyourquestion, the CD 6 does have the

-- inthe life cycle cost analysis, you 7 could amend the costs as you -- they're arbitrary so 8 you couldput in anycost structure that you wish and 9 come up with a new calculated life cycle. 10 

### MR. HUNT: Thank you. 11 MR. McCABE: It's not to the detail of

-- 12 it doesn't use the crystalball simulation tool. The 13 numbers arebased all on the average values. You can 14 run the simulation if you wish but that adds quite a 15 bit of complexity. 16 

### MR. POLLOCK: ThisisEdPollock. I think 17 there was one other part of that question that 18 Marshall was also mentioning that was how can you be 19 assured that the data that' s already on the record 20 will be considered? I think if you go back and look 21 at thediscussionthatwe haveonthisproposal inthe 22 pre-amble that we have continued to address the 23 economics andcertainlyall of the economic data that 24 was on record is part of that package which is 25 

### considered.

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### If you feel that your specific area was NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 www.nealrgross.com135 1 neglected, which I don't think is true, it certainly 2 would be worth a comment to that effect and then we 3 can respond to that in our -- as we move forward. 4 MR. BROOKMAN: Thank you. Other comments 5 on issues of concern that are legal? I don't see any 6 others. No one else wishes to comment at this time? 7 Maybe we should move then to the analytic stuff. 8 We are going to keep going then. We are 9 going to be taking up the issue of proposed standards 10 and hope to receive comments, concise comments, brief 11 comments for the Department on that and to que up this 12 discussion, Michael McCabe. 13 MR. McCABE: All of the discussion and 14 analysis leading to the proposed standards for split 15 and packaged air conditioners and heat pumps is 16 described in the proposed rule and in the technical 17 support document. We have -- and these are the 18 numbers that are shown on the screen. 19 We have proposed creating a new product 20 class for through the wall air conditioners and heat 21 pumps with sub-classes for the split and packaged 22 units. The definition of through the wall is given in 23 the proposed rule. All of the analysis that we 24 conducted for this new product class is given in 25 Appendix L of the technical support document. With 

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### 135 1 neglected, which I don't think is true, it certainly 2 would be worth a comment to that effect and then we 3 can respond to that in our -- as we move forward. 4 

### MR. BROOKMAN: Thankyou. Othercomments 5 on issues of concern that are legal? I don't see any 6 others. No one else wishes to comment at this time? 7 Maybe we should move then to the analytic stuff. 8 

### We are going to keep going then. We are 9 going tobe takingup the issue ofproposed standards 10 andhope toreceive comments, concise comments, brief 11 comments for theDepartment onthat andtoqueupthis 12 discussion, Michael McCabe. 13 MR. McCABE: All of the discussion and 14 analysis leading to the proposed standards for split 15 and packaged air conditioners and heat pumps is 16 described in the proposed rule and in the technical 17 

### support document. We have and these are the 18 numbers that are shown on the screen. 19 We have proposed creating a new product 20 class for through the wall air conditioners and heat 21 pumps with sub-classes for the split and packaged 22 units. Thedefinitionof throughthewall isgivenin 23 

### the proposed rule. All of the analysis that we 24 conducted for this new product class is given in 25 

### Appendix L of the technical support document. With

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com136 1 that introduction, I'd like to throw open the subject 2 for discussion. 3 MR. BROOKMAN: Can everybody see the 4 graphic? I saw Steve first. 5 MR. ROSENSTOCK: Steve Rosenstock, Edison 6 Electric Institute. Just a real quick one, for split 7 through the wall air conditioning and heat pump 8 systems, we're showing 11 SEER. In the July 25th, 2001 9 register it says 10.9. So I just wanted to double 10 check on that. 11 MR. BROOKMAN: Thank you. 12 MR. ROSENSTOCK: It's different than the 13 Federal Register. 14 MR. BROOKMAN: Okay, comment on that, 15 Michael? 16 MR. McCABE: No, I don't. Restate that, 17 please. 18 MR. ROSENSTOCK: In the Federal Register 19 notice on July 25th where you have split, through the 20 wall air conditioning and heat pump systems, you have 21 11 up there on the board, in the Federal Register it 22 shows 10.9. So I just wanted to double check. 23 MR. McCABE: I think that's an error. 24 You're correct, you're absolutely correct. In my 25 haste to put the slide together I made an error and 

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### 136 1 that introduction, I'd like to throwopen the subject 2 for discussion. 3 

### MR. BROOKMAN: Can everybody see the 4 graphic? I saw Steve first. 5 

### MR. ROSENSTOCK: SteveRosenstock, Edison 6 

### Electric Institute. Just a real quick one, for split 7 through the wall air conditioning and heat pump 8 

### systems, we're showing 11 SEER. IntheJuly25th, 2001 9 

### register it says 10.9. So I just wanted to double 10 check on that. 11 MR. BROOKMAN: Thank you. 12 MR. ROSENSTOCK: It's different than the 13 Federal Register. 14 

### MR. BROOKMAN: Okay, comment on that, 15 Michael? 16 MR. McCABE: No, I don't. Restate that, 17 please. 18 

### MR. ROSENSTOCK: In the Federal Register 19 notice onJuly 25thwhereyou have split, through the 20 wall air conditioningandheat pump systems, youhave 21 11 up there on the board, in the Federal Register it 22 shows 10.9. So I just wanted to double check. 23 MR. McCABE: I think that's an error. 24 

### You're correct, you're absolutely correct. In my 25 haste to put the slide together I made an error and

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com137 1 thank you for pointing it out. The split through the 2 wall air conditioner and heat pump SEER is 10.9, not 3 the 11 that's shown on this slide. 4 MR. ROSENSTOCK: Thank you. 5 MR. McCABE: Thank you. 6 MR. BROOKMAN: Other comments related to 7 the proposed standards and this specific slide which 8 shows the SEER for the different product classes? 9 MR. PRINDLE: Just a procedure question, 10 Doug? 11 MR. BROOKMAN: Yes. 12 MR. PRINDLE: Michael, are you going to 13 sort of walk through the different aspects of the 14 analysis or are you just sort of taking comments kind 15 of all in a bunch here? 16 MR. McCABE: Yeah, it is my intention that 17 all of our discussion on these analyses that we've 18 done, the rationale is in the proposed rule and what 19 we would like to know here is comments on these 20 particular values. 21 MR. PRINDLE: In that case, I have a 22 question and a comment. Pertaining to the assumption 23 regarding consumer cost for the equipment, in the 24 implementation period following 2006, DOE appears to 25 use its reverse engineering estimate based on present 

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### 137 1 thankyou for pointing it out. The split through the 2 wall air conditioner and heat pump SEER is 10.9, not 3 the 11 that's shown on this slide. 4 

### MR. ROSENSTOCK: Thank you. 5 

### MR. McCABE: Thank you. 6 

### MR. BROOKMAN: Other comments related to 7 the proposed standards and this specific slide which 8 shows the SEER for the different product classes? 9 

### MR. PRINDLE: Just a procedure question, 10 Doug? 11 MR. BROOKMAN: Yes. 12 

### MR. PRINDLE: Michael, are you going to 13 sort of walk through the different aspects of the 14 analysis orare youjust sort of taking comments kind 15 of all in a bunch here? 16 

### MR. McCABE: Yeah, itismy intentionthat 17 all of our discussion on these analyses that we've 18 done, the rationale is in the proposed rule and what 19 we would like to know here is comments on these 20 particular values. 21 

### MR. PRINDLE: In that case, I have a 22 question and a comment. Pertainingto the assumption 23 regarding consumer cost for the equipment, in the 24 implementation period following 2006, DOE appears to 25 use its reverse engineeringestimatebasedonpresent

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com138 1 day tear-down analysis. And yet, when I look at page 2 38825 of the Federal Register notice, there's a 3 statement that -- regarding five-year implementation 4 time frames and why is this necessary and so on and so 5 forth. And it says, "The purpose of the five-year 6 time frame is plainly" -- this is a quote, "plainly to 7 give manufacturers a significant amount of time to 8 develop and manufacture new products after its new 9 standard is adopted but before it becomes enforceable 10 thereby greatly diminishing the costs imposed by new 11 standards". 12 When I read that quote, I see a 13 presumptionand an expectation that costs will decline 14 from the time the standard is issued to the time its 15 implemented and yet, I see nothing in DOE's analysis 16 that reflects that presumption. DOE seems to use 17 current data, freezes it, and applies it to a future 18 time frame rather than following the logic in this 19 quote in the NOPR that says well, greatly diminishing 20 the costs imposed by new standards. 21 And Iwould also call to the Department's 22 attention data that's been presented in the record 23 before which is from another government agency, that 24 being the United States Bureau of the Census which 25 dose annual surveys of costs of equipment. And the 

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### 138 1 day tear-down analysis. And yet, when I look at page 2 38825 of the Federal Register notice, there's a 3 statement that

-- regarding five-year implementation 4 

### time frames andwhy is thisnecessaryand soonand so 5 

### forth. And it says, "The purpose of the five-year 6 time frame isplainly"

- - this isa quote, "plainlyto 7 give manufacturers a significant amount of time to 8 develop and manufacture new products after its new 9 standardis adoptedbut before itbecomes enforceable· 10 thereby greatly'diminishing the costs imposed by new 11 standardsII • 

### 12 When I 

### read that quote, I 

### see a 

### 13 presumptionandanexpectationthatcostswilldecline 14 from the time the standard is issued to the time its 15 implemented and yet, I see nothing in DOE's analysis 16 

### that reflects that presumption. DOE seems to use 17 current data, freezes it, and applies it to a future 18 time frame rather than following the logic in this 19 quote intheNOPR that says well, greatlydiminishing 20 the costs imposed by new standards. 21 And I wouldalso call to theDepartment's 22 attention data that's been presented in the record 23 before which is from another government agency, that 24 being the United States Bureau of the Census which 25 dose annual surveys of costs of equipment. And the

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com139 1 only really comparable situation we have to compare to 2 this NOPR is the rule that set the SEER 10 standard. 3 And back in the '80's there was a lot of testimony, a 4 lot of industry folks said this is going to cost a lot 5 of money, in some cases over $700.00. 6 DOE's estimate back in the '80's for the 7 SEER 10 standard was $360.00. When we look at the 8 Census Bureau data, we find that the cost was 9 virtually zero, that rule prices of air conditioning 10 units actually declined somewhat during the 1990's. 11 When we now jump to the SEER 13 rule, we have industry 12 data that is comparable in magnitude in terms of the 13 cost estimate for these units. We have a DOE estimate 14 in the area of 335 to $340.00 in terms of the 15 incremental cost of a SEER 13 unit compared to a SEER 16 10 unit. 17 I'm wondering, has the Department looked 18 at this historical data that's on the record and if 19 not, why not. It seems to be inconsistent with the 20 presumption behind the statement in the NOPR. 21 MR. POLLOCK: Ed Pollock, this is Ed 22 Pollock. This issue has been addressed and discussed 23 several times before, Bill, and I think there was some 24 discussion of it in the Federal Rule that was issued 25 in January of the basis, that we have not been able to 

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### 139 1 onlyreallycomparable situationwe havetocompareto 2 this NOPR is the rule that set the SEER 10 standard. 3 Andback in the '80's there was a lot of testimony, a 4 lot of industryfolks saidthis isgoingtocost a lot 5 of money, in some cases over $700.00. 6 

### DOE's estimate back in the '80's for the 7 

### SEER 10 standard was $360.00. When we look at the 8 Census Bureau data, we find that the cost was 9 virtually zero, that rule prices of air conditioning 10 units actually declined somewhat during the 1990's. 11 Whenwe nowjumptothe SEER 13 rule, we have industry 12 data that is comparable in magnitude in terms of the 13 cost estimate fortheseunits. We have a DOE estimate 14 in the area of 335 to $340.00 in terms of the 15 incremental cost of a SEER 13 unit compared to a SEER 16 10 unit. 17 I'm wondering, has the Department looked 18 at this historical data that's on the record and if 19 not, why not. It seems to be inconsistent with the 20 presumption behind the statement in the NOPR. 21 MR. POLLOCK: Ed Pollock, this is Ed 22 Pollock. This issue has been addressedand discussed 23 severaltimesbefore, Bill, andI thinktherewas some 24 discussion of it in the Federal Rule that was issued 25 inJanuaryof thebasis, thatwe havenot beenable to

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com140 1 find a good way to forecast what that trend would be 2 in the future and since we do put other discount 3 factors in, we discount everything to the current date 4 and I think that's been well discussed previously, so 5 I don't think that it's appropriate to try to answer 6 it any further than that here. 7 MR. BROOKMAN: Jim Crawford,and thenMark 8 if you wish to make a comment. 9 MR. CRAWFORD: Jim Crawford, Trane 10 Company. I just want to reiterate the point I made 11 yesterday on this issue and that is the thing that 12 really matters here is not the absolute price but the 13 differential price between different efficiency 14 levels. And when productivity is achieved by the 15 industry, that reduces prices, it tends to reduce 16 prices across the product line and the differential 17 remains relatively constant, certainly at least in 18 terms of percentage, if not in terms of absolute 19 dollars. 20 So the antidotal information about the 21 past has almost, without exception, beenmisappliedby 22 those who are trying to make it look as though somehow 23 or other a 13 costs the same as a 12, costs the same 24 as a 10. There are different material content. Those 25 price differences, cost differences, remain real. 

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### 140 1 find a good way to forecast what that trend would be 2 in the future and since we do put other discount 3 

### factors in, we discount everythingtothecurrentdate 4 and I think that'sbeenwell discussedpreviously, so 5 I 

### don't think that it's appropriate to try to answer 6 

### it any further than that here. 7 

### MR. BROOKMAN: JimCrawford, andthenMark 8 

### if you wish to make a comment. 9 

### MR. CRAWFORD: Jim Crawford, Trane 10 Company. I just want to reiterate the point I made 11 yesterday on this issue and that is the thing that 12 reallymatters here is not the absolute pricebut the 13 differential price between different efficiency 14 levels. And when productivity is achieved by the 15 industry, that reduces prices, it tends to reduce 16 prices across the product line and the differential 17 remains relatively constant, certainly at least in 18 terms of percentage, if not in terms of absolute 19 dollars. 20 

### So the antidotal information about the 21 pasthasalmost, withoutexception, beenmisappliedby 22 thosewho are tryingtomake it lookas thoughsomehow 23 or other a 13 costs the same as a 12, costs the same 24 as a 10. There aredifferentmaterial content. Those 25 price differences, cost differences, remain real.

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com141 1 MR. BROOKMAN: Thank you. Mark Kendall, 2 you had a comment? 3 MR. KENDALL: Regarding Bill's question 4 about the quote that you referred to that describes 5 that the five-year lead time was to reduce the costs 6 of the new standard; that phrase there refers to costs 7 imposed on the manufacturers, not on the consumers. 8 So that's versus imposing a new standard on the 9 manufacturers say tomorrow, the cost of doing that 10 over five years is diminished. That's the meaning of 11 that phrase, I believe. 12 MR. BROOKMAN: Other comments related to 13 the table, the matrix that we have up here on the 14 proposed standards and the product classes and the 15 SEER's and the HSPF and other issues as well? Michael 16 Martin and then to Harvey. 17 MR. MARTIN: Yes, I have a hard time on 18 figuring out whymanufacturers need six more months to 19 reach a 12 than they did to reach a 13. These 20 effective dates have been extended or are proposed to 21 be extended by six months. I take that as an answer. 22 MR. BOWERS: Are you referring to the

-- 23 MR. BROOKMAN: This is Mike Bowers 24 speaking. 25 MR. BOWERS: Mike Bowers. Are you just 

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### MR. BROOKMAN: Thank you. 

### Mark Kendall, 2 

### you 

### had a comment? 3 

### MR. KENDALL: Regarding Bill's question 4 about the quote that you 

### referred to that describes 5 

### that the five-year lead time was to reduce the costs 6 

### ofthenewstandard; thatphrasethererefers tocosts 7 

### imposed on the manufacturers, not on the consumers. 8 

### So that's versus imposing a new standard on the 9 

### manufacturers say tomorrow, the cost of doing that 10 

### over five years is diminished. That's themeaning of 11 

### that phrase, I 

### believe. 12 MR. BROOKMAN: Other comments related to 13 the table, the matrix that we have up here on the 14 

### proposed standards and the product classes and the 15 

### SEER's andtheHSPF andotherissues aswell? Michael 16 

### Martin and then to Harvey. 17 

### MR. MARTIN: Yes, I 

### have a hard time on 18 figuringoutwhymanufacturersneedsixmoremonthsto 19 

### reach a 12 than they did to reach a 13. These 20 effective dates have beenextendedor areproposedto 21 be extendedby sixmonths. I take that as an answer. 22 23 24 speaking. 25

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### MR. BOWERS: Are you 

### referring to the

-- MR. BROOKMAN: This is Mike Bowers

MR. BOWERS: Mike Bowers. Are you 

### just NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com142 1 referring to the fact that this supplemental 2 rulemaking is going to prolong the

-- 3 MR. MARTIN: No, there is a specific date 4 for -- in the January Federal Register that the 13 5 SEER standard would take effect. There's a specific 6 date in the July one that the 12 SEER would take 7 effect. They are the proposed one. It's proposed to 8 take effect. They are six months apart. It seems to 9 me that if you are wanting relief, you shouldn't be 10 making the effective date of the requirements six 11 months later. If anything, you should make it 12 earlier. It would take them less time to reach a 12 13 than to reach a 13. 14 MR. POLLOCK: This is Ed Pollock. 15 Michael, *those numbers come because basically the 16 requirement interpreted from the statute is that five 17 years after the effective date of the final rule is 18 the effective date of the standard. So if we open the 19 record and issue a final rule at a later date, then it 20 moves anything progressively back. 21 MR. HODGES: This is John Hodges. My 22 understanding -- again, my understanding is that this 23 is a -- that the agency is going to do what's best 24 under the circumstances, to craft a rule that is the 25 most reasonable under the circumstances. If you have 

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### referring to the fact that this supplemental 2 rulemaking is going to prolong the

-- 3 

### MR. MARTIN: No, there is a specific date 4 for

-- in the January Federal Register that the 13 5 

### SEER standard would take effect. There's a specific 6 

### date in the July one that the 12 

### SEER would take 7 

### effect. They are the proposed one. It'sproposed to 8 

### take effect. They are sixmonths apart. It seems to 9 

### me that if you are wanting relief, you shouldn't be 10 

### making the effective date of the requirements six 11 

### months later. If anything, you should make it 12 earlier. It would take them less time to reach a 12 13 than to reach a 13. 14 

### MR. POLLOCK: This is Ed Pollock. 15 

### Michael, .those numbers come because basically the 16 

### requirement interpretedfrom the statute is that five 17 

### years after the effective date of the final rule is 18 

### the effectivedate of the standard. So ifwe openthe 19 

### recordandissue a final rule at a laterdate, then it 20 

### moves anything progressively back. 21 MR. HODGES: This is John Hodges. My 22 understanding

-- again, myunderstanding is that this 23 is a -- that the agency is going to do what's best 24 under the circumstances, to craft a rule that is the 25 most reasonable under the circumstances. Ifyou have

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 www.nealrgross.com143 1 a comment with respect to that, make it and I will do 2 so, too, and we'll just see what happens. My 3 understanding again is that this is a -- this is a 4 proposal with respect to that 12 and that, you know, 5 anybody can make their comment on it and DOE is going 6 to take it into account. 7 MR. BROOKMAN: Marshall, and then we'll go 8 from there. 9 MR. HUNT: Marshall Hunt, PG&E. I like 10 that spirit. It seems to me since we are interested 11 in energy efficiency and since I've been working a lot 12 with ARI data base, there's about half of the split 13 systems under the ARI data base out of the 75,000 that 14 meet SEER 12, so it seems to me that we could almost 15 negotiate a much earlier date. So why not move it up 16 a year or maybe more. I mean, if the industry is 17 serious about saving energy, I don't see why we 18 shouldn't negotiate a much earlier date and I don't 19 see why this five-year time period needs to be set 20 there. And I would challenge the industry to try to 21 make something in this proposal that would sweeten the 22 deal a bit. 23 We are still interested in the EER and as 24 was stated earlier, there is a problem as we get 25 higher efficiency equipment with EER's dropping and 

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### 143 1 a comment with respect to that, make it and I will do 2 so, too, and we'll just see what happens. My 3 

### understanding again is that this is a -- this is a 4 

### proposal with respect to that 12 and that, you know, 5 

### anybodycanmake their comment on it andDOE is going 6 

### to take it into account. 7 

### MR. BROOKMAN: Marshall, andthenwe'llgo 8 

### from there. 9 

### MR. HUNT: Marshall Hunt, PG&E. I like 10 that spirit. It seems to me since we are interested 11 inenergyefficiencyand since I'vebeenworkinga lot 12 with ARI data base, there's about half of the split 13 systemsundertheARI databaseout of the 75,000 that 14 meet SEER 12, so it seems to me that we could almost 15 negotiate a much earlier date. So why not move it up 16 

### a year or maybe more. I mean, if the industry is 17 serious about saving energy, I don't see why we 18 shouldn't negotiate a much earlier date and I don't 19 see why this five-year time period needs to be set 20 there. And I would challenge the industry to try to 21 make somethinginthisproposalthatwouldsweetenthe 22 deal a bit. 23 We are still interestedin the EER and as 24 was stated earlier, there is a problem as we get 25 higher efficiency equipment with EER's dropping and

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com144 1 that is still a big concern along with TXV's. So 2 let's see what we can do about moving this data up. 3 Thank you. 4 MR. BROOKMAN: Thank you. Ed Pollock. 5 MR. POLLOCK: I think Marshall has opened 6 a topic which hasbeen something under out newprocess 7 rule that we have encouraged and that is the attempt 8 to consider all proposals and what I heard was maybe 9 there is room for some discussion. It's not something 10 that would be proper in this forum, because this is 11 our hearing on this legislation but certainly if 12 interested parties were to come together and make a 13 proposal with a consensus agreement to us, we would 14 applaud that. 15 MR. HODGES: Well, this is John Hodges 16 again. My understanding is that with respect to this 17 proposal, everything is

-- 18 A VOICE: Speak into the mike. 19 MR. HODGES: Yes, this is John Hodges for 20 ARI. My understanding is, is that with respect to 21 this particular proposal, everything is on a proposed 22 basis and that everybody has the opportunity to make 23 a public comment on that no matter what it is, but 24 there's nothing that is off the table here. That the 25 issue of effective date is a proposal as California 

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### 144 1 

### that is still a big concern along with TXV's. So 2 let's see what we can do about moving this data up. 3 Thank you. 4 MR. BROOKMAN: Thank you. Ed Pollock. 5 

### MR. POLLOCK: I thinkMarshallhas opened 6 a topicwhichhasbeen somethingunderoutnewprocess 7 rule that we have encouraged and that is the attempt 8 to consider all proposals and what I heard was maybe 9 there isroomfo·r somediscussion. It'snot something 10 that would be proper in this forum, because this is 11 our hearing on this legislation but certainly if 12 interested parties were to come together and make a 13 proposal with a consensus agreement to us, we would 14 applaud that. 15 

### MR. HODGES: Well, this is John Hodges 16 again. My understanding is that withrespect to this 17 proposal, everything is 18 A 

### VOICE: Speak into the mike. 19 

### MR. HODGES: Yes, this isJohnHodges for 20 ARlo 

### My understanding is, is that with respect to 21 thisparticularproposal, everything is ona proposed 22 basis and that everybody has the opportunity to make 23 a public comment on that no matter what it is, but 24 there's nothing that 1S 

### off the table here. That the 25 issue of effective date is a proposal as California

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com145 1 Energy Commission pointed out and that people can make 2 public comments on that and the agency will take that 3 into account with it renders its rule. 4 MR. BROOKMAN: Carol, you were next and 5 then I'll turn the mike over. I want to make sure 6 that everybody on the conference call has a chance if 7 they wish to weigh in here, to do so. Does anybody 8 wish to get in here on this subject? 9 MR. GOLDSTEIN: Yes, just briefly. This 10 is David Goldstein. I think Marshall has a good point 11 about advancing the date. As I recall the statute, 12 there is no requirement in this rulemaking for a five13 year implementation time, that there are six dates in 14 the statute and since DOE is already way behind, it 15 can select whatever date it believes is justified. 16 MR. BROOKMAN: Thank you, David. Anybody 17 else on the call wishes to comment? Okay, then Carol, 18 you're next. 19 MS. BIEDRZYCKI: I'm a little bit 20 confused. I've never been involved in one of these 21 discussions before and it seems like there are a lot 22 of nuances to the discussions here and a lot of 23 different opinions about what the law means which is 24 not usual. I guess I'm wondering like what is the 25 objective here? I thought the objective of these 

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### 1 EnergyCommissionpointedout andthatpeoplecanmake 2 public comments on that and the agencywill take that 3 

### into account with it renders its rule. 4 

### MR. BROOKMAN: Carol, you were next and 5 

### then I'll turn the mike over. I want to make sure 6 

### that everybodyon the conference call has a chance if 7 

### they wish to weigh in here, to do so. Does anybody 8 

### wish to get in here on this subject? 9 

### MR. GOLDSTEIN: Yes, just briefly. This 10 

### isDavidGoldstein. I thinkMarshall has a goodpoint 11 

### about advancing the date. As I recall the statute, 12 

### there isnorequirement inthisrulemakingfor a five13 

### year implementation time, that there are sixdates in 14 

### the statute and since DOE is already way behind, it 15 

### can select whatever date it believes is justified. 16 

### MR. BROOKMAN: Thankyou, David. Anybody 17 

### elseonthe callwishes tocomment? Okay, thenCarol, 18 

### you're next. 19 

### MS. BIEDRZYCKI: I'm a little bit 20 

### confused. I've never been involved in one of these 21 

### discussions before and it seems like there are a lot 22 of nuances to the discussions here and a lot of' 23 different opinions about what the law means which is 24 25 

### not usual. I guess I'm wondering like what is the objective here? I thought the objective of these

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW WASHINGTON, D.C. 20005-3701 www.nealrgross.com146 1 kinds of standards was to save energy and to set goals 2 for energy efficiency and this is one of those classic 3 dilemmas that we get involved in where, you know, like 4 how do you set the goal and how high should it be. 5 And so I just want to remind everybody, I 6 think that we are losing a lot of energy savings as we 7 sit here and argue about what the standard should be. 8 There are opportunities that are being lost right now 9 and Ibelieve that my written comments try to put some 10 numbers to the -- all the apartmentbuildings that are 11 being built in the State of Texas alone. Imean, all 12 over the country there are apartments that are being 13 built that have a 10 SEER air conditioner installed in 14 them because there is no utility energy efficiency 15 program or there is no state tax incentive program. 16 We need to do something about raising 17 these standards, because we're using more electricity 18 to cool housing than we need to and that's just not 19 right. Something has got to be done about it and so 20 I would encourage first of all dates; like let's put 21 firm dates on things. 22 Iunderstand -- Iwasn't even aware of the 23 fact that there have been some amendments or some 24 proposed amendments to sort of leave the date that the 25 standard goes into effect open-ended. That just 

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### 146 1 kindsof standardswas to saveenergyandto setgoals 2 forenergyefficiencyandthis isoneof thoseclassic 3 dilemmasthatwe get involvedinwhere, youknow, like 4 how do you set the goal and how high should it be. 5 And so I justwant toremindeverybody, I 6 thinkthatwe are losinga lotofenergy savings aswe 7 sit here and argue about what the standard shouldbe. 8 There are opportunities that arebeing lost right now 9 and I believethatmywrittencomments trytoput some 10 numbers tothe

-- all theapartmentbuildings that are 11 beingbuilt inthe State of Texas alone. I mean, all 12 over the country there are apartments that are being 13 builtthathavea 10 SEER airconditionerinstalledin 14 them because there is no utility energy efficiency 15 program or there is no state tax incentive program. 16 We need to do something about raising 17 these standards, becausewe'reusingmore electricity 18 

### to cool housing than we need to and that's just not 19 right. Something has got to be done about it and so 20 I would encourage first of all dates; like let's put 21 firm dates on things. 22 I understand I wasn'tevenawareofthe 23 fact that there have been some amendments or some 24 proposedamendments tosortof leavethedate thatthe 25 

### standard goes into effect open-ended.

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 

### That just

www.nealrgross.com147 1 doesn't seem like -- it doesn't seem like a reasonable 2 course of action to me. I think we need a date, we 3 need a standard and if this industry is innovative 4 that they'll meet the challenge of the efficiency 5 standard. And I don't see where anything that's been 6 on the table so far -- nothing that's on the table so 7 far is not something that has alreadybeen achieved in 8 some quantitywithin the, you know, existing equipment 9 stock. 10 MR. BROOKMAN: Thankyou. Michael Martin, 11 did you wish to comment? 12 MR. MARTIN: David Goldstein, who was one 13 of the authors of the legislation gave me the answer 14 I was after. 15 MR. BROOKMAN: Thank you. Harvey and then 16 Steve. 17 MR. SACHS: The table in front of us is a 18 result of particular idiosyncratic -- I'm sorry, this 19 is Harvey Sachs, ACEEE. 20 MR. BROOKMAN: And pardon me. The table 21 you're referring to is the big chart, the big overhead 22 on the wall in front of us. 23 MR. SACHS: The overheadon the wall given 24 the proposed, changed, rolled back efficiency 25 standards, the 20 percent and 30 percent is a result 

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### 147 1 

### doesn't seemlike itdoesn't seemlikea reasonable 2 course of action to me. I think we need a date, we 3 need a standard and if this industry is innovative 4 that they'll meet the challenge of the efficiency 5 standard. And I don't see where anything that's been 6 on the table so far

-- nothing that's on the table so 7 farisnot somethingthathas alreadybeenachievedin 8 somequantitywithinthe, youknow, existingequipment 9 stock. 10 

### MR. BROOKMAN: Thankyou. MichaelMartin, 11 did you wish to comment? 12 MR.· MARTIN: DavidGoldstein, who was one 13 of the authors of the legislation gave me the answer 14 I was after. 15 

### MR. BROOKMAN: Thankyou. Harveyandthen 16 Steve. 17 MR. SACHS: The table in front of us is a 18 result ofparticularidiosyncratic

-- I'm sorry, this 19 is Harvey Sachs, ACEEE. 20 MR. BROOKMAN: And pardon me. The table 21 you'rereferringtoisthebigchart, thebigoverhead 22 on the wall in front of us. 23 MR. SACHS: Theoverheadonthewallgiven 24 

### the proposed, changed, rolled back efficiency 25 standards, the 20 percent and 30 percent is a result

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### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com148 1 of a particular convoluted interpretation. If, as Mr. 2 Pollock has suggested, and Ibelieve I understand from 3 Mr. Hodges, who seems to be helping with the 4 interpretation, the Department's position, if I 5 understand correctly, this thing is really open, it 6 leads me to want to insist on a couple of things. One 7 of them is that the cost data that ostensibly drove 8 this must include the kinds of cost data Marshall 9 Hunt, that Tom Eckman and that others have brought to 10 the table today. 11 They seem to have an understanding of the 12 impact of deregulation. Secondly, the process 13 improvement rule that Debby has referred to today is 14 undoubtedly an improvement, but it's my understanding 15 from yesterday's discussion that that requires 16 transparent analysis. I'm led to believe by some ARI 17 members that to do a transparent analysis would 18 require -- by ARI member, would require disclosure of 19 competitive information and, therefore, in itself, 20 would run into a potential anti-trust problem. 21 So it's not at all clear to me, not being 22 an attorney, that it is even possible to utilize ARI's 23 data. I'm also very concerned that in this case, the 24 ARI data do not seem to reflect common understandings 25 of the manufacturing industry in terms of what is 

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### 148 1 ofa particularconvolutedinterpretation. If, asMr. 2 Pollockhas suggested, andI believeI understandfrom 3 

### Mr. Hodges, who seems to be helping with the 4 

### interpretation, the Department's position, if I 5 understand correctly, this thing is really open, it 6 leadsme towant to insist ona couple of things. One 7 of them is that the cost data that ostensibly drove 8 this must include the kinds of cost data Marshall 9 Hunt, that Tom Eckman andthat others havebrought to 10 the table today. 11 They seemtohave anunderstandingof the 12 impact of deregulation. Secondly, the process 13 improvement rule that Debby has referred to today is 14 undoubtedlyan improvement, but it'smyunderstanding 15 

### from yesterday's discussion that that requires 16 transparent analysis. I'm ledtobelieveby some ARI 17 members that to do a transparent analysis would 18 require

-- byARI member, wouldrequire disclosure of 19 competitive information and, therefore, in itself, 20 would run into a potential anti-trust problem. 21 So it'snot at all cleartome, not being 22 anattorney, that itisevenpossibletoutilizeARI's 23 data. I'malsoveryconcernedthat in this case, the 24 ARI data donot seemto reflect commonunderstandings 25 of the manufacturing industry in terms of what is

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com149 1 involved technologically. The 13 does not involve 2 discontinuities in technology. It can be met without 3 permanent magnet motors, be met without multi-stage, 4 pull stage or continuously variable compressors. It 5 as, as we've heard this morning, a little more 6 aluminum, a little more copper. 7 The numbers which have been presented 8 which exceed what we have heard are the retail mark-up 9 differences in today's niche market. Simply, on a 10 common sense basis, strains one to accept and I hope 11 that counsel will also reflect on whether these even 12 can be incorporated in the spirit of the process 13 improvement rule. 14 MR. BROOKMAN: Thank you. Steve. 15 MR. ROSENSTOCK: Steve Rosenstock, EEI. 16 I want to kind of get back to the through the wall 17 units. In the Federal Register notice there's a few 18 paragraphs on 38839 about a worry about the through 19 the wall units having lower SEER there might be some 20 sort of equipment shifting between the 12 SEER central 21 units or package units and the through the wall units. 22 And for that reason, that's part of the reason that 23 the through the wall unit efficiency standards only 24 last through July of 2010. 25 I guess there's a thing about well after 

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### 149 1 

### involved technologically. The 13 does not involve 2 discontinuities intechnology. It canbemet without 3 

### permanent magnet motors, be met without multi-stage, 4 

### pull stage or continuouslyvariable compressors. It 5 as, as we've heard this morning, a little more 6 aluminum, a little more copper. 7 

### The numbers which have been presented 8 whichexceedwhatwe haveheardaretheretailmark-up 9 

### differences in today's niche market. Simply, on a 10 common sense basis, strains one to accept and I hope 11 that counsel will also reflect on whether these even 12 can be incorporated in the spirit of the process 13 improvement rule. 14 MR. BROOKMAN: Thank you. Steve. 15 

### MR. ROSENSTOCK: Steve Rosenstock, EEl. 16 I want to kind of get back to the through the wall 17 units. In the Federal Register notice there's a few 18 paragraphs on 38839 about a worry about the through 19 the wall units having lower SEER there might be some 20 sortofequipment shiftingbetweenthe 12SEERcentral 21 unitsorpackageunitsandthethroughthewallunits. 22 And for that re'ason, that's part of the reason that 23 the through the wall unit efficiency standards only 24 last through July of 2010. 25 I guess there's a thing about well after

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com150 1 that there will be investments in new technologies. 2 I'm just -- I guess I'm wondering in terms of are 3 there -- have there been other rules where there is 4 kind of an expiration date for the efficiency levels 5 and what happens if there is no -- if there's no new 6 rule before July 26th, 2010, what kind of happens? 7 I'm just kind of curious that way. 8 MR. BROOKMAN: Steve, I lost track of the 9 question. 10 MR. ROSENSTOCK: Okay. 11 MR. BROOKMAN: Can you restate it briefly? 12 MR. ROSENSTOCK: For the efficiency levels 13 on the through the wall units there's an expiration 14 date. What happens if there is no new levels set 15 before then? 16 MR. BROOKMAN: Thank you. 17 MR. POLLOCK: This is Ed Pollock. I think 18 it's pretty clear, Steve, when -- what we're doing is 19 giving them some extra time to do the engineering 20 necessary and also some changes in buildings. Some of 21 those buildings right now have small openings that 22 those buildings may not be in existence any more and 23 new buildings certainly should be planning for this 24 change, now this will be on the record. 25 So what would happen is that as of that 

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### 150 1 that there will be investments in new technologies. 2 .I'm just - - I guess I'm wondering in terms of are 3 theie

-- have there been other rules where there is 4 kind of an expiration date for the efficiency levels 5 and what happens if there is no -- if there's no new 6 rule before July 26th, 2010, what kind of happens? 7 I'm just kind of curious that way. 8 

### MR. BROOKMAN: Steve, I lost track of the 9 question. 10 MR. ROSENSTOCK: Okay. 11 MR. BROOKMAN: Canyourestateitbriefly? 12 MR. ROSENSTOCK: Fortheefficiencylevels 13 on the through the wall units there's an expiration 14 date. What happens if there is no new levels set 15 before then? 16 MR. BROOKMAN: Thank you. 17 

### MR. POLLOCK: This isEdPollock. I think 18 it'sprettyclear, Steve, when

-- what we're doing is 19 giving them some extra time to do the engineering 20 necessaryandalsosomechanges inbuildings. Some of 21 those buildings right now have small openings that 22 those buildings may not be in existence any more and 23 new buildings certainly should be planning for this 24 change, now this will be on the record. 25 So what would happen is that as of that

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 www.nealrgross.com151 1 date then, they have tomeet the higher standard level 2 of the conventional products. 3 MR. BROOKMAN: Thank you. 4 MR. BRUNDAGE: Don Brundage, Southern 5 Company. I've heard a lot of comments about updating 6 cost databecause of recent changes in certain states. 7 I would hope that DOE will be careful in adding cost 8 data that is not selectively adding cost data that's 9 volunteered from high cost areas, potentiallybiasing 10 their study. I do have a concern that while the

-- 11 what was done and the technical support document was 12 fairly complete and consistent. 13 As DOE knows, I had some complaints about 14 it along the way but at least had some internal 15 consistency. Starting toplay aroundwith some of the 16 assumptions and update parts of it, I have some 17 concern that you'll end up having to redo things and 18 delay the implementation if the technical support 19 document is no longer consistent and has to be redone. 20 I'm afraid that too much picking around the edges of 21 it we may end up delaying the whole process. Thank 22 you. 23 MR. BROOKMAN: Thank you. Bill Prindle 24 first, then Harvey Sachs. 25 MR. PRINDLE: I threw the Department staff 

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### 151 1 datethen, theyhavetomeetthehigher standardlevel 2 of the conventional products. 3 

### MR. BROOKMAN: Thank you. 4 

### MR. BRUNDAGE: Don Brundage, Southern 5 Company. I've heard a lot of comments about updating 6 costdatabecauseofrecentchanges incertainstates. 7 I would hope that DOE will be careful in adding cost 8 data that is not selectively adding cost data that's 9 volunteeredfromhighcost areas, potentiallybiasing 10 

### their study. I do have a concern that while the

-- 11 what was done and the technical support document was 12 fairly complete and consistent. 13 As DOE knows, I had some complaints about 14 it along the way but at least had some internal 15 consistency. Startingtoplayaroundwithsome ofthe 16 assumptions and update parts of it, I have some 17 concern that you'll end up having to redo things and 18 delay the implementation if the technical support 19 document isno longerconsistent andhas toberedone. 20 I'm afraid that too much picking around the edges of 21 it we may end up delaying the whole process. Thank 22 you. 23 MR. BROOKMAN: Thank you. Bill Prindle 24 first, then Harvey Sachs. 25

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### MR. PRINDLE: I threwtheDepartment staff NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com152 1 kind of a hard ball last time so I'm going to give you 2 maybe an easier shot with this one. It does relate to 3 cost issues. In the NOPR the incremental cost from a 4 SEER 12 to a SEER 13 is shown as $122.00, which as the 5 installation cost estimate for a split system is 6 listed, maybe a five percent cost impact. And I've 7 heardmany statements from industry and DOE and others 8 that this level of cost increase is going to impose 9 hardships on consumers, they won't be able to buy 10 units, sales will be effected and I believe also 11 there's assumptions in manufacturing employment 12 analysis that presumes there's a certain amount of 13 other economic activity that's effected by this. 14 So I'm going to offer you a simple test. 15 All these hypotheses that $122.00 is going to 16 materially effect economic behavior in the United 17 States and I'll call this test the Delaware Memorial 18 Bridge test. Those of you know Delaware Memorial 19 Bridge, it connects New Jersey and Delaware. In New 20 Jersey, there's a seven percent sales tax. In 21 Delaware there's a zero percent sales tax which means 22 that in Delaware (sic) an installed central air 23 conditioner by all rights, should cost more than 24 $122.00 in addition to a similar unit installed across * 25 the bridge in Delaware. 

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### 152 1 

### kindof a hardball last time so I'mgoingtogiveyou 2 maybe aneasiershotwiththis one. It does relate to 3 cost issues. Inthe NOPR the incremental cost from a 4 SEER 12 toa SEER 13 is shown as $122.00, whichas the 5 

### installation cost estimate for a split system is 6 

### listed, maybe a five percent cost impact. And I've 7 

### heardmanystatementsfrom industryandDOE andothers 8 

### that this level of cost increase is going to impose 9 

### hardships on consumers, they won't be able to buy 10 units, sales will be effected and I believe also 11 

### there's assumptions in manufacturing employment 12 analysis that presumes there's a certain amount of 13 other economic activity that's effectedby this. 14 So I'm going to offer you a simple test. 15 All these hypotheses that $122.00 is going to 16 

### materially effect economic behavior in the United 17 

### States and I'll call this test the Delaware Memorial 18 

### Bridge test. Those of you know Delaware Memorial 19 

### Bridge, it connects New Jersey and Delaware. In New 20 Jersey, there's a seven percent sales tax. In 21 Delaware there's a zeropercent sales taxwhichmeans 22 that in Delaware (sic) an installed central air 23 conditioner by all rights, should cost more than 24 $122.00 inadditiontoa similarunit installedacross 25 the bridge in Delaware.

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com153 1 So I think there's a simple way to test 2 this hypothesis that $122.00 has a damaging effect on 3 consumers or on the economy in general and I would 4 simply ask the Department, as part of its analysis to 5 look at residential central air conditioning unit 6 sales in states like New Jersey and Delaware and see 7 if there is a documentable difference in sales or 8 other kinds of detectable economic activity that will 9 lend any support to all of these assertions I'm 10 hearing that this amount of money is causing people 11 problems and unless -- and I assert, and I mean this 12 seriously, unless the Department can produce evidence 13 along that line, I think there is no rebuttable 14 presumption that any of the alleged consumer impacts 15 in this rule, in the SEER 13 rule as finalized last 16 January are valid at all. 17 So I would invite any response to that. 18 MR. POLLOCK: This is Ed Pollock. I'm not 19 going to get into the interpretation of all the 20 numbers but I will remind you that what we are 21 required to do is set a standard for the whole nation. 22 There are all sorts of permutations, sales tax, 23 installation costs, labor costs, environmental 24 factors, energy costs whichwe do factor in as well as 25 marketing strategies from the air conditioning 

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### 153 1 So I think there's a simple way to test 2 this hypothesis that $122.00 has a damaging effect on 3 consumers or on the economy in general and I would 

### 4 simply ask the Department, as part of its analysis to 5 look at residential central air conditioning unit 6 sales in states like New Jersey and Delaware and see 7 if there is a documentable difference in sales or 8 otherkinds of detectableeconomic activitythat will 9 lend any support to all of these assertions I'm 10 hearing that this amount of money is causing people 11 problems and unless

-- and I assert, and I mean this 12 seriously, unless theDepartment canproduce evidence 13 along that line, I think there is no rebuttable 14 presumption that any of the alleged consumer impacts 15 in this rule, in the SEER 13 rule as finalized last 16 January are valid at all. 17 So I would invite any response to that. 18 

### MR. POLLOCK: This isEdPollock. I'mnot 19 going to get into the interpretation of all the 20 numbers but I will remind you that what we are 21 requiredtodo is set a standardfor thewholenation. 22 There are all sorts of permutations, sales tax, 23 

### installation costs, labor costs, environmental 24 factors, energycostswhichwe do factor inaswell as 25 marketing strategies from the air conditioning

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com154 1 manufacturers and if you've comparedprices across the 2 nation, you know that it's a little harder to sell an 3 air conditioner in Maine and the Northwest and yet 4 they do it, and they do it to some extent by offering 5 rebates and special sales, and things like that. 6 So that now 95 percent of all new homes do 7 have central air conditioning in them. So to try to 8 factor in and then make a decision on a little 9 permutation like you've just described, given all the 10 much larger permutations across the nation, I'm not 11 sure that's really a fair evaluation. 12 MR. BROOKMAN: Harvey Sachs and then back 13 to Jim Crawford. 14 MR. SACHS: Most people complain that I'm 15 so loud I should never get near one. 16 (Laughter) 17 I'm Harvey Sachs. Steve Rosenstock has 18 several times raised the question of the through the 19 wall units. I have spend many years working in 20 industries where the total sales of the industry are 21 in the range of one percent of the products covered 22 under this rule making. Ihave personally and I think 23 on behalf of the organization Irepresent a great deal 24 of sympathy with special needs cases such as through 25 the wall. 

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### 154 1 manufacturersandifyou'vecomparedpricesacrossthe 2 nation, you know that it's a little harder to sell an 3 air conditioner in Maine and the Northwest and yet 4 theydo it, and theydo it to some extentby offering 5 rebates and special sales, and things like that. 6 Sothatnow 95 percentof allnewhomesdo 7 

### have central air conditioning in them. So to try to 8 factor in and then make a decision on a little 9 permutationlikeyou'vejust described, given all the 10 much larger permutations across the nation, I'm not 11 sure that's really a fair evaluation. 12 MR. BROOKMAN: HarveySachs andthenback 13 to Jim Crawford. 14 MR. SACHS: Most people complain that I'm 15 so loud I should never get near one. 16 (Laughter) 17 

### I'm Harvey Sachs. Steve Rosenstock has 18 several times raised the question of the through the 19 

### wall units. I have spend many years working in 20 industries where the total sales of the industry are 21 in the range of one percent of the products covered 22 underthisrulemaking. I havepersonallyand I think· 23 onbehalfoftheorganizationI representa greatdeal 24 of sympathy with special needs cases such as through 25 the wall.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com155 1 Given the very low level of sales in some 2 of these niche markets, given the transition that I 3 think DOE has wisely announced, we were trying very 4 hard to look at the whole animal and not just the 5 toenails with all due respect to unicos (phonetic) and 6 ground source heat pumps, which are not covered here, 7 through the walls, we do not believe that they are the 8 major focus of this hearing and although nobody 9 expected me to say so, I'm comfortable with the way 10 DOE has tried to treat those even if I'm not 11 comfortable with the document they're treated in. 12 MR. BROOKMAN: Okay, Carol. 13 MS. BIEDRZYCKI: Yeah, Iwanted to go back 14 -- Carol Biedrzycki, Texas Ratepayers Organization to 15 Save Energy. I just want to go back to the cost 16 issues because I concur with the Alliance to Save 17 Energy. I think that they're -- I haven't seen 18 anything that I've read that's associated with the 19 cost estimates, I haven't seen any overwhelming 20 evidence that would cause a negative backlash to 21 consumers or for consumers not participate in this 22 market. 23 One point that I didn't make earlier that 24 I would like to make is that I recognize the fact that 25 the air conditioning industry is a very competitive 

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### 155 1 Given the very low level of sales in some 2 of these niche markets, given the transition that I 3 think DOE has wisely announced, we were trying very 4 hard to look at the whole animal and not just the 5 toenailswithallduerespecttounicos (phonetic) and 6 ground sourceheatpumps, which are not coveredhere, 7 throughthewalls, we donotbelieve that theyare the 8 major focus of this hearing and although nobody 9 expected me to say so, I'm comfortable with the way 10 DOE has tried to treat those even if I'm not 11 comfortable with the document they're treated in. 12 MR. BROOKMAN: Okay, Carol. 13 

### MS. BIEDRZYCKI: Yeah, I wantedtogoback 14

-- CarolBiedrzycki, Texas Ratepayers Organizationto 15 Save Energy. I just want to go back to the cost 16 issues because I concur with the Alliance to Save 17 

### Energy. I think that they're I haven't seen 18 anything that I've read that's associated with the 19 cost estimates, I haven't seen any overwhelming 20 evidence that would cause a negative backlash to· 21 consumers or for consumers not participate in this 22 market. 23 One point that I didn'tmake earlierthat 24 I would liketomake is that I recognize the fact that 25 the air conditioning industry is a very competitive

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW WASHINGTON, D.C. 20005-3701 www.nealrgross.com156 1 industry. There are a lot of manufacturers out there 2 that offer a lot of product. The problem is, is that 3 energy efficiency is not a competitive commodity in 4 this country and the only way we'll get the energy 5 efficiency into this competitive energy within the air 6 conditioning market is to set the standard as high as 7 we can possibly set it and I think that the industry 8 can meet it. 9 I also think that as far as costs are 10 concerned, as I spoke earlier about safety standards 11 in cars, consumers recognize when they're getting more 12 for their money and when they're not getting more for 13 their money. Consumers understand the difference 14 between a first cost and an operating cost and they

-- 15 you know, they understand those concepts and that's 16 what we're talking about here. We're not necessarily 17 talking about a permanent increase in expenses for 18 consumers raising efficiency levels. 19 In fact, a lot of air conditioners, I 20 don't know the numbers, but they impact of this 21 standard on new construction is like so substantial 22 that I'm sure that somebody has written down the 23 number someplace. The point is, is that a lot of 24 people -- the air conditioners that go into new houses 25 will be included in some kind of a finance package. 

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### 156 1 industry. There are a lot of manufacturers out there 2 that offera lot of product. The problem is, is that 3 energy efficiency is not a competitive commodity in 4 this country and the only way we'll get the energy 5 efficiencyintothiscompetitiveenergywithintheair 6 conditioningmarket is to set the standard as high as 7 we can possibly set it and I think that the industry 8 can meet it. 9 

### I also think that as far as costs are 10 concerned, as I spoke earlier about safety standards 11 incars, consumersrecognizewhenthey'regettingmore 12 for theirmoney andwhen they're not gettingmore for 13 

### their money. Consumers understand the difference 14 betweena first cost andanoperatingcost andthey

-- 15 you know, they understand those concepts and that's 16 what we're talkingabout here. We're not necessarily 17 talking about a permanent,increase in expenses for 18 consumers raising efficiency levels. 19 

### In fact, a lot of air conditioners, I 20 don't know the numbers, but they impact of this 21 standard on new construction is like so substantial 22 that I'm sure that somebody has written down the 23 

### number someplace. The· point is, 1S 

### that a lot of 24 people

-- the airconditionersthatgointonewhouses 25 will be included in some kind of a finance package.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com157 1 So if we're talking about $122.00 in a mortgage, you 2 know, on the purchase price of a new house, we are not 3 talking about a cost impact that is going to cause 4 consumers not to buy. 5 MR. BROOKMAN: Thank you. 6 MS. BIEDRZYCKI: And I don't think we can 7 -- I haven't seen any in this -- in any of the numbers 8 that I've read, I haven't seen anything that I think 9 would cause the consumer not to buy. 10 MR. BROOKMAN: Thank you. Jim Crawford. 11 MR. CRAWFORD: I have a number of points 12 to pick up and I guess I'll start with $122.00. And 13 I guess nobody on this side of the table would 14 acknowledge that that number represents anything more 15 than adding 122. That is simply not what the 16 difference in the retail market is. The retail 17 difference by the numbers that are kind of a mixture 18 of the ARI numbers with the ADL manipulation is 19 $305.00 between an 11 and a 12 and I feel like I 20 should say that about 47 times to equal the number of 21 times that $122.00 has been said, but just let us say 22 it's $305.00 between an 11 and a 12. 23 Harvey managed to leave the room before I 24 could take exception to his characterization of the 25 ARI data. What the ARI members, if they're 

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### 157 1 So if we're talking about $122.00 in a mortgage, you 2 know, onthepurchasepriceof a newhouse, we are not 3 talking about a cost impact that is going to cause 4 consumers not to buy. 5 

### MR. BROOKMAN: Thank you. 6 

### MS. BIEDRZYCKI: And I don't thinkwe can 7

-- I haven't seenanyinthis

-- inanyof thenumbers 8 that I've read, I haven't seen anything that I think 9 would cause the consumer not to buy. 10 MR. BROOKMAN: Thank you. Jim Crawford. 11 MR. CRAWFORD: I have a number of points 12 to pick up and I guess I'll start with $122.00. And 13 I guess nobody on this side of the table would 14 acknowledge that that numberrepresents anythingmore 15 than adding 122. That is simply not what the 16 

### difference in the retail market is. The retail 17 difference by the numbers that are kind of a mixture 18 of the ARI numbers with the ADL manipulation is 19 $305.00 between an 11 and a 12 and I feel like I 20 should saythat about 47 times to equal the number of 21 times that $122.00 has been said, but just let us say 22 it's $305.00 between an 11 and a 12. 23 Harveymanagedto leave the roombefore I 24 could take exception to his characterization of the 25 ARI data.

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### What the ARI members, NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 

### if they're

www.nealrgross.com158 1 responsible, will not do is publish their individual 2 cost numbers in such a way that we can tell what each 3 other's costs are and I think that's universal of all 4 manufacturers in the room. We don't publish costs and 5 if we did, we'd have trouble with the Department of 6 Justice. 7 However, in the ASHRE process and in the 8 ARI process, I mean the NAECA process, we have 9 provided numbers to those respective organizations 10 through ARI that have been aggregated so that the 11 industry cost structure can be seen but not the cost 12 structure of individual manufacturers. So very 13 significant amounts of data have been given. Again, 14 Harvey made reference to discontinuities of 15 technology. 16 I've heard no assertion by anybody today 17 or yesterday that there was a discontinuity in 18 technology between a 12 and a 13 and I'll go on record 19 as saying there is, in general, no such discontinuity. 20 Things just get bigger. And things get bigger on a 21 curve that has diminishing returns and you know, 22 without getting into the thermaldynamics of the thing, 23 the -- as you go up each step, you get closer and 24 closer and closer to a practical limit beyond which 25 you.cannot go and you're in an area of approaching 

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### 1 responsible, will not do is publish their individual 2 

### cost numbers in such a way that we can tell what each 3 

### other's costs are and I think that's universal of all 4 

### manufacturers intheroom. We don'tpublishcostsand 5 

### if we did, we'd have trouble with the Department of 6 

### Justice. 7 

### However, in the ASHRE process and in the 8 

### ARI process, I mean the NAECA process, we have 9 

### provided numbers to those respective organizations 10 

### through ARI that have been aggregated so that the 11 

### industry cost structure can be seen but not the cost 12 structure of individual manufacturers. So very 13 significant amounts of data have been given. Again, 14 

### Harvey made reference to discontinuities of 15 

### technology. 16 I've heard no assertion by anybody today 17 or .yesterday that there was a discontinuity in 18 technologybetweena 12 anda 13 andI'llgoonrecord 19 as sayingthereis, ingeneral, no suchdiscontinuity. 20 

### Things just get bigger. And things get bigger on a 21 curve that has diminishing returns and you know, 22 withoutgettingintothethermaldynamicsofthething, 23 the

-- as you go up each step, you get closer and 24 closer and closer to'a practical limit beyond which 25 you cannot go and you're in an area of approaching

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com159 1 diminishing returns which is why when you pass 13, lo 2 and behold, you do begin to encounter discontinuities 3 in technology to try to work around that aspect of the 4 laws of physics. 5 There's been a lot of talk about let's 6 grab these ridiculously high utility rates that have 7 occurred in spot locations and fortunately our friend 8 from Southern Company has perhaps brought that back 9 towards center again. To this day, everything I read 10 from the PUC's and the deregulation advocates tells me 11 as a consumer that I'm going to benefit from all this 12 and my utility rates are going down. Now, either 13 they're all lying which is quite possible or, perhaps 14 there's a misunderstanding here as to what the long 15 term picture is going to be. 16 Certainly we all know if we've been 17 following costs, that a large part of what happened in 18 the recent past had to do with the really, really bad 19 purchasing programs on the way people were buying the 20 gas, the fire, the peak generators and they were 21 buying them on the spot market and the cost of gas on 22 the spot market just went through the blooming 23 ceiling. It increased, I believe, by a factor of 10 24 over a relatively short period and by the way, it came 25 back almost back down to the original base. Thank 

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### 159 1 

### diminishingreturnswhich iswhywhenyoupass 13, 

### 10 2 andbehold, youdobeginto encounterdiscontinuities 3 intechnologytotrytoworkaroundthat aspect of the 4 laws of**physics~** 

### 5 There's been a lot of talk about let's 6 grab these ridiculously high utility rates that have 7 occurred in spot locations and fortunately our friend 8 from Southern Company has perhaps brought that back 9 towards centeragain. To this day, everything I read 10 

### fromthePUC'sandthederegulationadvocatestellsme 11 as a consumer that I'mgoing tobenefit from all this 12 

### and my utility rates are going down. Now, either 13 

### they're all lyingwhich is quitepossible or, perhaps 14 

### there's a misunderstanding here as to what the long 15 term picture is going to be. 16 

### Certainly we all know if we've been 17 followingcosts, thata largepartofwhat happenedin 18 

### the recent past had to do withthe really, reallybad 19 purchasingprograms on thewaypeople werebuyingthe 20 

### gas, the fj,re, the peak generators and they were 21 

### buying them on the spot market and the cost of gas on 22 the spot market just went through the blooming 23 ceiling. It increased, I believe, by a factor of 10 

### 24 overa relativelyshortperiodandbytheway, it came 25 

### back almost back down to the original base. Thank

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com160 1 you. 2 MR. BROOKMAN: Thank you. Carol. 3 MS. BIEDRZYCKI: One final comment; I 4 don't disagree with the fact that -- I mean, our 5 energy prices are very unpredictable and I understand 6 your observations that the impact on energy prices is 7 not the same everywhere in the country because it 8 isn't but across the board, we have seen increased 9 natural gas prices everywhere because of increasing 10 dependence on natural gas generation. 11 So I guess what I'm saying is that energy 12 efficiency and the higher standard is an insurance 13 policy against these volatile energy prices that we 14 face, you know, like on a yearly basis. Nobody can 15 tell what's going to happen to energy prices and it's 16 not our job to sit here and predict with accuracy 17 what's going to happen to electricity rates over the 18 next, you know, two or three or five or 10 or 20 19 years. 20 Our job is to set a standard that 21 insulates consumers to the highest extent possible 22 from the impacts of those changes in energy prices. 23 MR. BROOKMAN: Thank you. Bill Prindle. 24 MR. PRINDLE: Yes, I'm just listening to 25 some of the discussion that has occurred since my last 

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### 160 1 you. 2 MR. BROOKMAN: Thank you. Carol. 3 

### MS. BIEDRZYCKI: One final commenti 

### I 4 

### don't disagree with the fact that I mean, our 5 energyprices areveryunpredictable and I understand 6 your observations that the impact onenergyprices is 7 not the same everywhere in the country because it 8 isn't but across the board, we have seen increased 9 natural gas prices everywhere because of increasing 10 dependence on natural gas generation. 11 So I guess what I'm saying is that energy 12 efficiency and the higher standard is an insurance 13 policy against these volatile energy prices that we 14 

### face, you know, like on a yearly basis. Nobody can 15 tell what's going to happen to energyprices and it's 16 not our job to sit here and predict with accuracy 17 what's going to happen to electricity rates over the 18 next, you know, two or three or five or 10 or 20 19 years. 20 Our job is to set a standard that 21 insulates consumers to the highest extent possible 22 from the impacts of those changes in energyprices. 23 

### MR. BROOKMAN: Thank you. Bill Prindle. 24 

### MR. PRINDLE: Yes, I'm just listening to 25 someof thediscussionthathasoccurredsincemy last

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com161 1 comment and I think some of the statements have 2 actually supported some of my earlier points. I 3 wanted to thank Mark Kendall for correcting me on that 4 NOPR statement. It, in fact, does refer to the fact 5 that manufacturer costs go down as a result in between 6 final rule and implementation date but that still 7 supports my fundamental point that costs do go down, 8 they don't remain frozen. 9 And ARI data, by requirement, has to be 10 backward looking. ARI data comes from somewhere in 11 the 1990's as recently as the data can be credibly 12 gathered. DOE's job is to be forward looking, it to 13 try and project where manufacturer cost and market 14 priceswill be at an following the effective date, the 15 implementation date, excuse me, I don't want to use 16 the word effective date. I'm not sure -- given the 17 NOPR, I'm not even sure what effective date means. 18 The implementation date when the 19 manufacturing standard becomes binding on the 20 manufacturers and Idon't envy the Department's job in 21 doing that. However, I do think there's a number of 22 statements that have beenmade that showthat backward 23 looking data in the industry is not sufficient. That 24 you have to somehow find a way to project that 25 forward. 

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### 161 1 comment and I think some of the statements have 2 

### actually supported some of my earlier points. I 

### 3 wantedtothankMarkKendall for correctingme onthat 4 NOPR statement. It, in fact, does refer to the fact 5 thatmanufacturercostsgodown as a result inbetween 6 final rule and implementation date but that still 7 supports my fundamental point that costs do go down, 8 

### they don't remain frozen. 9 And ARI'data, by requirement, has to be 10 backward looking. ARI data comes from somewhere in 11 the 1990's as recently as the data can be credibly 12 gathered. DOE's job is to be forward looking, it to 13 try and project where manufacturer cost and market 14 priceswillbeat anfollowingtheeffectivedate, the 15 implementation date, excuse me, I don't want to use 16 the word effective date. I'm not sure -- given the 17 NOPR, I'm not even sure what effective date means. 18 

### The implementation date when the 19 manufacturing standard becomes binding on the 20 manufacturersandI don'tenvytheDepartment'sjobin 21 doing that. However, I do think there's a number of 22 statementsthathavebeenmadethat showthatbackward 23 lookingdata inthe industryis not sufficient. That 24 you have to somehow find a way to project that 25 forward.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com162 1 And I also recall yesterday ADL making

-- 2 including in its list of data sources for the 3 commercial air conditioningproceeding, U.S. Bureau of 4 Census data as a reasonable source of data. I heard 5 no comments in opposition to the use of the Census 6 Bureau as a source of data. I've heard it referred to 7 as antidotal. 8 I think the census -- the staff at the 9 Department of Commerce would be somewhat put off by 10 the idea that their hard-fought statistical data base 11 is antidotal and I do submit the Department should 12 include U.S. Bureau of Census data as part of its 13 consideration of this difficult job of projecting what 14 the costs and what the prices of equipment is going to 15 be out in the future. 16 MR. BROOKMAN: Jim Crawford. I thought 17 I'd made myself clear earlier. Obviously, I hadn't. 18 I invite anybody to go to any dealer and get a three19 ton 12 SEER air conditioner and a three-ton 14 SEER 20 air conditioner and put the bloody things on a scale 21 and weigh them and if you don't find a weight 22 difference and a fairly appreciableweight difference, 23 then there's something mighty strange going on and 24 when you find that weight difference, you can ponder 25 whether or not you really think that the additional 

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### 162 1 

### And I alsorecallyesterdayADL making

-- 2 including in its list of data sources for the 3 commercialairconditioningproceeding, 

### u.S. Bureauof 4 

### Census data as a reasonable source of data. I heard· 5 no comments in opposition to the use of the Census 6 Bureauas a sourceof data. I'veheard itreferredto 7 as antidotal. 8 I think the census - - the staff at the 9 Department of Commerce would be somewhat put off by 10 the idea that theirhard-fought statisticaldatabase 11 is antidotal and I do submit the Department should 12 include U.S. Bureau of Census data as part of its 13 considerationofthisdifficultjobofprojectingwhat 14 the costsandwhat thepricesofequipment isgoingto 15 be out in the future. 16 MR. BROOKMAN: Jim Crawford. I thought 17 I'dmade myself clear earlier. Obviously, I hadn't. 18 I invite anybody to go to any dealer and get a three19 ton 12 SEER air conditioner and a three-ton 14 SEER 20 air conditioner and put the bloody things on a scale 21 and weigh them and if you don't find a weight 22 differenceanda fairlyappreciableweightdifference, 23 then there's something mighty strange going on and 24 when you find that weight difference, you canponder 25 whether or not you really think that the additional

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 www.nealrgross.com163 1 material and the labor that went along with it came 2 free. It doesn't. 3 MR. BROOKMAN: Other comments related to 4 standards? Yes, Doug Marty. 5 MR. MARTY: Doug Marty. In listening to 6 all this, number one, I'm very glad to hear, as Mr. 7 Hodges has said a number of times, that the door is 8 wide open for more comments, more proposals, more 9 whatevers in making any presentation to DOE. We at 10 Goodman, we're firm believers in the 13 SEER. We know 11 the technology is here today. The vast majority of 12 the manufacturers build and market these products just 13 as we do. 14 Commenting back on what Marshall had said 15 earlier, I'm really amazed that we're going to take 16 five years to get into this process. I mean, in five 17 years the technology could be dramatically different 18 than it is today for the better. We're going to take 19 into consideration within our company that if the door 20 is still open for other comments and suggestions that 21 although we're going to continue to push for the 13 22 SEER because we think it's the right thing to do, 23 we're also going to push that we get into a 12 SEER 24 just as quickly as possible while this process is 25 going on or whatever. 

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### 163 1 material and the labor that went along with it came 2 

### free. It doesn't. 3 

### MR. BROOKMAN: Other comments related to 4 

### standards? Yes, Doug Marty. 5 

### MR. MARTY: Doug Marty. In listening to 6 

### all this, number one, I'm very glad to hear, as Mr. 7 

### Hodges has said a number of times, that the door is 8 

### wide.open for more comments, more proposals, more 9 

### whatevers in making any presentation to DOE. We at 10 Goodman, we're firmbelievers inthe 13 SEER. We know 11 the technology is here today. The vast majority of 12 

### themanufacturersbuildandmarkettheseproductsjust 13 as we do. 14 CommentingbackonwhatMarshall had said 15 earlier, I'm really amazed that we're going to take 16 five years to get into this process. I mean, in five 17 .years the technology could be dramatically different 18 than it is today for the better. We're going to take 19 intoconsiderationwithinourcompanythat ifthedoor 20 is still open for other comments and suggestions that 21 

### although we're going to continue to push for the 13 

### 22 SEER because we think it's the right thing to do, 23 

### we're also going to push that we get into a 12 

### SEER 24 just as quickly as possible while this process is 25 going on or whatever.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com164 1 I mean, with the 12 SEER today, hundreds 2 of thousands if not millions of units are being 3 shipped today and I don't know why we've got to wait 4 six months, a year, two years or five years to get 5 into a 12 SEER program when it's here today. We are 6 still of the belief, we know it, that our unit, our 12 7 SEER to 13 SEER, our 13 SEER unit can be built for 8 that $122.00 figure or less. The height and weight 9 constraints are not maybe what Mr. Crawford had 10 indicated. 11 Somebody earlier had mentioned that they 12 didn't think this was rocket science and he said that 13 he thought it was just a little more copper and a 14 little more aluminum. And we totally agree with that. 15 In our case -- for some of the people that are not in 16 the business, I brought a cross-section of what the 17 coil looks like and for those that haven't seen it, 18 I'll pass it around, but this is the difference in our 19 12 SEER and 13 SEER unit, a little more aluminum, a 20 little more copper. 21 MS. KENNEDY: So that's what 13 has that 22 12 doesn't have? 23 MR. MARTY: That's what ours does. And 24 you know, I can't speak for other manufacturers but 25 that's what ours does and we know it's there, the 

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### 164 1 

### I mean, with the 12 SEER today, hundreds 2 of thousands if not millions of units are being 3 shipped today and I don't know why we've got to wait 4 six months, a year, two years or five years to get 5 into a 12 SEER program when it's here today. We are 6 stillof thebelief, we knowit, that ourunit, our 12 7 SEER to 13 SEER, our 13 SEER unit can be built for 8 

### that $122.00 figure or less. The height and weight 9 constraints are not maybe what Mr. Crawford had 10 indicated. 11 Somebody earlier had mentioned that they 12 didn't think this was rocket science and he said that 13 he thought it was just a little more copper and a 14 littlemore aluminum. Andwe totallyagreewiththat. 15 Inour case for some of the people that are not in 16 the business, I brought a cross-section of what the 17 coil looks like and for those that haven't seen it, 18 I'llpass it around, but this isthedifference inour 19 12 SEER and 13 SEER unit, a little more aluminum, a 20 little more copper. 21 MS. KENNEDY: So that's what 13 has that 22 12 doesn't have? 23 MR. MARTY: That's what ours does. And 

### 24 you know, I can't speak for other manufacturers but 25 that's what ours does and we know it's there, the

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com165 1 technology is there and we're going to continue to 2 push for the 13 and we'd like to see it happen soon. 3 Thank you. 4 MR. BROOKMAN: Thank you. Other comments 5 related toproposed standards? I thinkwe're starting 6 to get a little redundant here, folks, so any new 7 comments related to proposed standards? I see this 8 gentleman here. 9 MR. DOYLE: Ted Doyle from Mestek. We're 10 also a manufacturer and for the lay people in the 11 audience this little corner in the coil is not the 12 difference between the 12 SEER and the 13 SEER. 13 MR. MARTY: It is with ours. 14 MR. DOYLE: That much aluminum and that 15 much copper? 16 MR. MARTY: Not that much. 17 MR. DOYLE: Okay, that's just what I'm 18 trying to explain to Kit down here. 19 MR. MARTY: Excuse me, it's not -- that's 20 a cross section of the aluminum and the copper and 21 what goes into it and there's going to be more than 22 that. 23 MR. BROOKMAN: I appreciate your comment. 24 MR. DOYLE: Okay, yes, thank you, and in 25 order to get that extra aluminum and copper into a 

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### 1 technology is there and we're going to continue to 2 push for the 13 and we'd like to see it happen soon. 3 Thank you. 4 

### MR. BROOKMAN: Thankyou. Othercomments 5 relatedtoproposedstandards? I thinkwe're starting 6 to get a little redundant here, folks, so any new 7 

### comments related to proposed standards? I see this 8 gentleman here. 9 

### MR. DOYLE: TedDoyle fromMestek. We're· 10 also a manufacturer and for the lay people in the 11 audience this little corner in the coil is not the 12 difference between the 12 SEER and the 13 SEER. 13 MR. MARTY: It is with ours. 14 

### MR. DOYLE: That much aluminum and that 15 much copper? 16 

### MR. MARTY: Not that much. 17 

### MR. DOYLE: Okay, that's just what I'm 18 trying to explain to Kit down here. 19 

### MR. MARTY: Excuse me, it'snot -- that's 20 a cross section of the aluminum and the copper and 21**wha~** 

### goes into it and there's going to be more than 22 that. 23 MR. BROOKMAN: I appreciateyourcomment. 24 

### MR. DOYLE: Okay, yes, thank you, and in 25 order to get that extra aluminum and copper into a

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com166 1 cabinet, there's also a lot of engineering and 2 drafting and there's certifications, UL inspections, 3 marketing. There's a lot more money into it than just 4 a plug of aluminum and copper and it's not -- it may 5 not be rocket science but it is expensive and

-- 6 MR. BROOKMAN: Okay, Deborah Miller. 7 MS. MILLER: I have been in the back 8 cooling my heels since this morning's outburst, so I 9 decided I needed to say something else. First of all, 10 I just wanted to remind many of the parties around 11 this table that are now saying, "Well, maybe we should 12 try to implement the standard a few years earlier at 13 a 12 SEER", and I assume that means that you're 14 entertaining a two-tier standard, but about a year ago 15 or less ARI approached ACEEE, NRDC and a few other 16 efficiency groups and said, "We would like to 17 negotiate with you". We were turned down. 18 It was August of last year and I'm not 19 talking August of 2001, August of 2000. Yes, we've 20 been talking to them for several months and yes, it 21 did take some time for us to get most of our 22 manufacturers on board, although one did leave the 23 fold. So as we're talking about being -- you know, 24 having some sort of modicum here of negotiation or 25 flexibility, I would just like you to know that we're 

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### 166 1 cabinet, there's also a lot of engineering and 2 drafting and there's certifications, UL inspections, 3 marketing. There's a lotmoremoneyintoitthanjust 4 

### a plug of aluminum and copper and it's not it may 5 not be rocket science but it is expensive and 6 MR. BROOKMAN: Okay, Deborah Miller. 7 

### MS. MILLER: I have been in the back 8 cooling my heels since this morning's outburst, so I 9 decidedI neededto saysomethingelse. Firstof all, 10 I just wanted to remind many of the parties around 11 thistablethatarenow saying, "Well, maybewe should 12 try to implement the standard a few years earlier at 13 a 12 SEER", and I assume that means that you're 14 entertaininga two-tierstandard, butabout a yearago 15 or less ARI approached ACEEE, NRDC and a few other 16 efficiency groups and said, "We would like to 17 negotiate with you". We were turned down. 18 

### It was August of last year and I'm not 19 

### talking August of 2001, August of 2000. Yes, we've 20 been talking to them for several months and yes, it 21 did take some time for us to get most of our 22 manufacturers on board, although one did leave the 23 fold. So as we're talking about being

-- you know, 24 having some sort of modicum here of negotiation or 25 flexibility, I wouldjust likeyou toknow that we're

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com167 1 always willing to entertain aproposal from any of the 2 energy efficiency groups. 3 So don't hesitate. Let me tell you, the 4 struggle has been hard for everybody. Don't hesitate 5 to come to us. We came to you the first time, we were 6 turned down. We're more than happy for forget all 7 about what's happened in the last year and try to come 8 to the table. I haven't talked to any of my members 9 but I would assume they'd be at least willing to 10 listen to a proposal. Thank you. 11 MR. BROOKMAN: Thank you, Deborah. Steve 12 Rosenstock. I'm hoping we can have additional and 13 hopefully, new comments that relate to proposed 14 standards and then I think we need to assess how much 15 new business there is and whether we need to take a 16 break shortly or not. Steve. 17 MR. ROSENSTOCK: A couple quick comments; 18 Steve Rosenstock, Edison Electric Institute. If DOE 19 does decide to do yet another analysis, another life 20 cycle cost analysis for this, I would urge that they 21 would use retail and not wholesale prices for 22 electricity because retail is what the consumers pay. 23 Wholesale spikes do not have anything to do with 24 necessarily what the consumers are having to pay in 25 any state of the union. 

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### 1 alwayswillingtoentertaina proposal fromanyofthe 2 energy efficiency groups. 3 

### So don't hesitate. Let me tell you, the 4 

### struggle hasbeenhard for everybody. Don't hesitate 5 

### to come tous. We came toyouthe first time, we were 6 

### turned down. We're more than happy for forget all 7 

### aboutwhat'shappenedinthe lastyearandtrytocome 8 

### to the table. I haven't talked to any of my members 9 

### but I would assume they'd be at least willing to 10 

### listen to a proposal. Thank you. 11 

### MR. BROOKMAN: Thankyou, Deborah. Steve 12 

### Rosenstock. I'm hoping we can have additional and 13 

### hopefully, new comments that relate to proposed 14 

### standards and then I thinkwe need to assess how much 15 

### new business there is and whether we need to take a 16 

### break shortly or not. Steve. 17 

### MR. ROSENSTOCK: A 

### couple quickcomments; 18 

### Steve Rosenstock, Edison Electric Institute. If DOE 19 does decide to do yet another analysis, another life 20 cycle cost analysis for this, 

## r would urge that they 21 

### would use retail and not wholesale prices for 22 electricitybecause retail iswhat the consumerspay. 23 Wholesale spikes do not have anything to do with 24 necessarily what the consumers are having to pay in 25 any state of the union.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com168 1 The second thing is, also it is quite 2 interesting hearing about these negotiations. As I 3 recall one of the manufacturers said they were willing 4 to have a 12 SEER in January 1, 2005. They put out a 5 press release to that effect and so it's kind of 6 interestingwith all these lawsuits that that could

-- 7 delaying the implementation of the standard, It's kind 8 of a lost opportunity. That might be an interesting 9 calculation to make, 2005 January, versus the impact 10 of lawsuits extending it to 2010 or 2015. Thank you. 11 MR. BROOKMAN: Yes, Harvey and then back 12 to Marshall. 13 MR. SACHS: Deborah, I'd very much 14 appreciate the microphone. 15 MS. MILLER: Oh, thank you. Sorry. 16 MR. SACHS: Microphone, Harvey Sachs, 17 ACEEE. Deborah, I very much appreciate your remarks 18 about negotiation. I would not respond on this level 19 but for the fact that it was in the record. As I 20 recall, you had just recently joinedARI at that point 21 or about to. I was not part of ACEEE at that point. 22 MS. MILLER: No, no, just so you know, I 23 joined ARI at the end of 1999. 24 MR. SACHS: Okay, so you had been there 25 about as long as I've been at ACEEE now. 

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### The second thing is, also it is quite 2 

### interesting hearing about these negotiations. As I 3 

### recalloneofthemanufacturers saidtheywerewilling 4 

### to have a 12 SEER in January 1, 2005. Theyput out a 5 

### press release to that effect and so it's kind of 6 

### interestingwithallthese lawsuitsthat thatcould 7 

### delayingtheimplementationofthe standard, It'skind 8 

### of a lost opportunity. That might be an interesting 9 

### calculation to make, 2005 January, versus the impact 10 of lawsuits extending it to 2010 or 2015. Thankyou. 11 

### MR. BROOKMAN: Yes, Harvey and then back 12 to Marshall. 13 

### MR. SACHS: Deborah, I'd very much 14 

### appreciate the microphone. 15 MS. MILLER: Oh, thank you. Sorry. 16 

### MR. SACHS: Microphone, Harvey Sachs, 17 

### ACEEE. Deborah, I very much appreciate your remarks 18 

### about negotiation; I wouldnot respond on this level 19 

### but for the fact that it was in the record. As I 

### 20 recall, youhadjustrecentlyjoinedARI at thatpoint 21 or about to. I was not part of ACEEE at that point. 22 

### MS. MILLER: No, no, just so you know, I 23 

### joinedARI at the end of 1999. 24 

### MR. SACHS: Okay, so you had been there 25 about as long as I've been at ACEEE now.

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.w. WASHINGTON, D.C. 20005-3701 www.nealrgross.com169 1 MS. MILLER: That's right. 2 MR. SACHS: I actually talked with Steve 3 Nadel about this, this morning and there are bruised 4 feelings on both sides in the sense that the advocacy 5 community believes that it had been broadcasting 6 pretty plainly for four or five years for the NOPR 7 that it was happy to negotiate. And they believe, and 8 again, I was not there, that the offer from ARI came 9 something less than two weeks before the NOPR was due 10 to be published. 11 Again, I was not there. 12 MS. MILLER: Right. 13 MR. SACHS: I'm only reporting this in the 14 hopes that we can mutually get beyond this. Toward 15 that end I want to say one or two other short things. 16 Our community is focused I think -- I think I can 17 speak roughly for our community on that, the present 18 value of megawatts avoided and kilowatt hours saved. 19 MS. MILLER: Correct. 20 MR. SACHS: Earlier does matter but 21 earlier is not the only thing that matters. Anything 22 which looks like it optimizes, it maximizes the 23 avoided megawatts and the avoided kilowatt hours, 24 we're all ears, as one gentleman from Texas used to 25 say. 

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### MS. MILLER: That's right. 2 MR. SACHS: I actually talked with Steve 3 Nadel about this, this morning and there are bruised 4 feelings onboth sides inthe sense that the advocacy 5 community believes that it had been broadcasting 6 pretty plainly for four or five years for the NOPR 7 that itwashappytonegotiate. And theybelieve, and 8 again, I was not there, that the offer from ARI came 9 something less than two weeks before the NOPR was due 10 to be published. 11 

### Again, I was not there. 12 MS. MILLER: Right. 13 

### MR. SACHS: I'monlyreportingthisinthe 14 

### hopes that we can mutually get beyond this. Toward 15 that end I want to sayone or two other short things. 16 

### Our community is focused I think I think I can 17 speak roughly for our community on that, the present 18 value of megawatts avoided and kilowatt hours saved. 19 

### MS. MILLER: Correct. 20 

### MR. SACHS: Earlier does matter but 21 earlier is not the onlything that matters. Anything 22 which looks like it optimizes, it maximizes the 23 avoided megawatts and the avoided kilowatt hours, 24 we're all ears, as one gentleman from Texas used to 25 say.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com170 1 The other thing is that Iwant the record 2 to show that my organization and the others in our 3 community have been leaders in the effort to aid 4 manufacturers withproduct differentiation or premium 5 value addedproducts. People on this phone call help 6 set up some of. the very first sustained programs. 7 We've worked at it continuously. We are continuing to 8 work on ways to use these voluntary programs as a 9 compliment to standards to deliver more efficiency to 10 customers. I believe that the 20-year record of my 11 organization, the NRDC and others at this table 12 demonstrates that this is a sustained commitment which 13 we wish to be partners in delivering efficiency. 14 Anything that maximizes avoided the 15 present value, avoided megawatts and saved kilowatt 16 hours we are ready to talk about. Thank you. 17 MS. MILLER: May I just make one remark? 18 MR. BROOKMAN: Deborah Miller, yes. 19 MS. MILLER: And I'm sorry to be carrying 20 this on in the midst of hearing. All I would say to 21 you, Harvey, is first of all off-line I'll give you 22 the correct information about when we first began 23 talking, but secondly, I just want to say that ARI put 24 something out there for the advocates. For whatever 25 reason they turned it down. Our feelings our hurt 

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### 170 1 

### The otherthing is that I want the record 2 to show that my organization and the others in our 3 community have been leaders in the effort to aid 4 manufacturerswithproduct differentiationorpremium 5 value addedproducts. People on thisphone call help 6 set up some of. the very first sustained programs. 7 

### We'veworkedat itcontinuously. We arecontinuingto 8 

### work on ways to use these voluntary programs as a 9 

### compliment to standards todelivermore efficiencyto 10 customers. I believe that the 20-year record of my 11 organization, the NRDC and others at this table 12 demonstratesthatthisisa sustainedcommitmentwhich 13 we wish to be partners in delivering efficiency. 14 

### Anything that maximizes avoided the 15 present value, avoided megawatts and saved kilowatt 16 hours we are ready to talk about. Thank you. 17 MS. MILLER: May I just make one remark? 18 

### MR. BROOKMAN: Deborah Miller, yes. 19 

### MS. MILLER: And I'm sorrytobe carrying 20 this on in the midst of hearing. All I would say to 21 you, Harvey, is first of all off-line I'll give you 22 the correct information about when we first began 23 talking, but secondly, I justwant to saythatARI put 24 

### something out there for the advocates. For whatever 25 reason they turned it down. Our feelings our hurt

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE,N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com171 1 too, and all I can say is at this point, I think our 2 members would like to see something from the advocate 3 community but not something that just says, "This is 4 the only thing we'll accept". 5 I think it has to be something which say, 6 "This is a starting point, let's talk". 7 MR. SACHS: I look forward to getting 8 together. 9 MS. MILLER: Okay, thank you. 10 MR. BROOKMAN: Thank you. Thank you for 11 that exchange. Let me ask if there are other new 12 issues, since I think we've moved into that domain, 13 that people wish to take up at this time. I'd like to 14 have some kind of a show of hands, some simple 15 indication of whetherpeople have a significant number 16 of new issues to take up or not. Can you just -- Jim, 17 do you have other new issues to bring up? 18 You have a new issue to bring up. Here's 19 where I am, folks; it's now about 2:35. If we have 20 very few additional issues, we'll take them up now and 21 then we'll take them up and conclude today's session. 22 If we have quite a few of them, we'll take a break now 23 and then we'll push on through the rest of the 24 afternoon. You have new issues as well -- pardon me, 25 other issues, other issues that are new, other issues 

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### 171 1 too, and all I can say is at this point, I think our 2 members would like to see something from the advocate 3 communitybut not something that just says, "This is 4 the only thing we'll accept". 5 I think it has tobe somethingwhich say, 6 "This is a startingpoint, let's talk". 7 

### MR. SACHS: I look forward to getting 8 together. 9 

### MS. MILLER: Okay, thank you. 10 

### MR. BROOKMAN: Thank you. Thank you for 11 that exchange. Let me ask if there are other new 12 issues, since I think we've moved into that domain, 13 thatpeoplewishtotakeup at this time. I'd like to 14 have some kind of a show of hands, some simple 15 indicationofwhetherpeoplehavea significantnumber 16 ofnew issues totakeupornot. Canyoujust

-- Jim, 17 do you have other new issues to bring up? 18 

### You have a new issue tobringup. Here's 19 

### where I am, folks; it's now about 2:35. If we have 20 veryfewadditional issues, we'lltakethemupnowand 21 thenwe'll take themup andconclude today's session. 22 Ifwe have quite a fewof them, we'll take a breaknow 23 and then we'll push on through the rest of the 24 afternoon. You have new issues as well

-- pardonme, 25 other issues, other issues that are new, other issues

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 www.nealrgross.com172 1 that are neither legal issues nor proposed standards. 2 So do you have an additional issue. 3 MR. DOYLE: Ted Doyle from Mestek and we 4 do build a number of specialty products and through 5 this process I've seen that everything has been pretty 6 broad brushed by just the capacity range and there 7 are, as you have up there, a number of -- six 8 different types of units. There's actually a lot more 9 than that that will suffer by space constraints and 10 other things that a higher SEER rating is going to 11 involve and that should be considered as a separate 12 issue. 13 MR. BROOKMAN: Thank you. I heard a sound 14 from the conference calling telephone. Does anybody 15 on the conference call wish to add in at this time? 16 (No response) 17 MR. BROOKMAN: Maybe that person was 18 signing off. So let me be clear, be even more clear 19 than I was. We have, as you know, gone through the 20 legal issues and we've also described the proposed 21 standards. On the agenda, it says that we are now to 22 turn towards other issues that wouldn't be included in 23 those two categories and I'd like to make sure we 24 cover those and give them adequate time and treatment 25 but if there's just a few of them, we'll just keep 

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### 172 1 that are neither legal issues norproposed standards. 2 

### So do you have an additional issue. 3 

### MR. DOYLE: Ted Doyle from Mestek and we 4 

### do build a number of specialty products and through 5 

### thisprocess I'veseenthateverythinghasbeenpretty 6 

### broad brushed by just the capacity range and there 7 

### are, as you have up there, a number of six 8 differenttypesofunits. There'sactuallya lotmore 9 than that that will suffer by space constraints and 10 other things that a higher SEER rating is going to 11 involve and that should be considered as a separate 12 issue. 13 

### MR. BROOKMAN: Thankyou. I hearda sound 14 from the conference calling telephone. Does anybody 15 on the conference call wish to add in at this time? 16 (No response) 17 MR. BROOKMAN: Maybe that person was 18 signing off. So let me be clear, be even more clear 19 than I was. We have, as you know, gone through the 20 legal issues and we've also described the proposed 21 standards. On the agenda, it says that we are now to 22 turntowardsotherissuesthatwouldn'tbeincludedin 23 those two categories and I'd like to make sure we 24 cover those andgive them adequate time and treatment 25 but if there's just a few of them, we'll just keep

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com173 1 going now. If not, we'll take a break. Let's just 2 keep going now? 3 I see many of you nodding your heads up 4 and down. Okay, then let's proceed with it. Harvey, 5 I see you first. 6 MR. SACHS: Age before beauty. 7 MS. MILLER: Harvey, now you're really 8 making enemies. 9 MR. CRAWFORD: And this is Jim Crawford, 10 I think he yielded the microphone to me, I'm not sure. 11 MR. McCABE: This is the show-up list of 12 what we have for other issues and we certainly would 13 encourage other items to be added to this list, but I 14 think the thing is if this is the only other issue, 15 then it probably makes sense to continue with this. 16 If others in the audience have things other than this 17 and that have not been vetted in the previous 18 sessions, let us know and that will help determine how 19 to conduct the meeting, if we're going to take a break 20 or proceed. 21 MR. BROOKMAN: So for the record, the 22 slide that Michael McCabe has put up says "Small 23 Diameter, High Velocity Systems". Comments on that or 24 other issues? Harvey, you're first. 25 MR. SACHS: Let me ask a question on that. 

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### 173 1 

### going now. If not, we'll take a break. Let's just 2 keep going now? 3 I see many of you nodding your heads up 4 and down. Okay, then let'sproceedwith it. Harvey, 5 I see you first. 6 

### MR. SACHS: Age before beauty. 7 

### MS.·MILLER: Harvey, now you're really 8 making enemies. 9 

### MR. CRAWFORD: And this is Jim Crawford, 10 I thinkheyieldedthemicrophone tome, I'mnot sure. 11 MR. McCABE: This is the show-up list of 12 what we have for other issues and we certainlywould 13 encourage other items tobe added to this list, but I 14 think the thing is if this is the only other issue, 15 then it probably makes sense to continue with this. 16 If others in the audience have things otherthan this 17 and that have not been vetted in the previous 18 sessions, letusknowandthatwillhelpdeterminehow 19 toconduct themeeting, ifwe'regoingtotake a break 20 or proceed. 21 MR. BROOKMAN: So for the record, the 22 slide that Michael McCabe has put up says "Small 23 Diameter, HighVelocitySystems". Commentsonthator 24 other issues? Harvey, you're first. 25

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### MR. SACHS: Letme aska questiononthat. NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com174 1 Harvey Sachs, ACEEE. Do we have any indication that 2 the sales of small diameter, high velocity systems 3 exceed 30,000 units per year? 4 MR. McCABE: We have no indications of 5 that. 6 MR. SACHS: You have no indications either 7 way. 8 MR. McCABE: No, we have indications that 9 10 MR. SACHS: This is a matter then which is 11 well less than one percent of the market we're 12 interested in. It is a group which will, to the 13 extent it can, follow the available technologies on 14 the market as its vendors are able to supply things 15 and we will not raise concerns about things which are 16 less than one percent of the market. 17 MR. BROOKMAN: Thank you for the clarity 18 of that statement. Anybody else? Jim, Deborah? Yes, 19 Karim. 20 MR. AMRANE: This is Karim Amrane with 21 ACRI. There was a contention among ARI members to 22 propose a separate class of product for small 23 diameter, high velocity systems so we will be 24 submitting a proposal to DOE on that. 25 MR. BROOKMAN: Thank you for that early 

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### 1 Harvey Sachs, ACEEE. Do we have any indication that 2 the sales of small diameter, high velocity systems 3 

### exceed 30,000 

### units per year? 4 

### MR. McCABE: We have no indications of 5 

### that. 6 

### MR. SACHS: Youhavenoindicationseither 7 

### way. 8 

### MR. McCABE: No, we have indications that 9 10 

### MR. SACHS: This is a matterthenwhichis 11 

### well less than one percent of the market we're 12 

### interested in. It is a group which will, to the 13 

### extent it can, follow the available technologies on 14 

### the market as its vendors are able to supply things 15 

### andwe will not raise concerns about things which are 16 

### less than one percent of the market. 17 

### MR. BROOKMAN: Thank you for the clarity 18 

### of that statement. Anybodyelse? Jim, Deborah? Yes, 19 

### Karim. 20 

### MR. AMRANE: This is Karim Amrane with 21 

### ACRI. There was a contention among ARI members to 22 propose a separate class of product for small 23 diameter, high velocity systems so we will be 24 submitting a proposal to DOE on that. 25

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### MR. BROOKMAN: Thank you for that early NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com175 1 notice. That's helpful. Okay, back to Harvey and 2 then Bill. 3 MR. SACHS: Bill, if you have follow-up on 4 this one, I will let you go ahead. I would to 5 introduce some other issue when you're done. 6 MR. PRINDLE: This is Bill Prindle, 7 Alliance to Save Energy. We've commented in the past 8 and we still are quite open to separate product 9 classifications or exemptions for some of these niche 10 products and that's -- from our point of view, that's 11 a very flexible area. 12 MR. BROOKMAN: Thank you, Marshall, you 13 follow in, please. 14 MR. HUNT: Yes, Pacific Gas and Electric, 15 Marshall Hunt. I just would like when you do that to 16 be cognizant of the fact that the fan energy is much 17 higher because of the high static pressures and of 18 course, the latent factor is much higher in those 19 systems and in our neck of the woods, we don't need so 20 much latent removal, so we want to make sure the 21 consumer would be aware of those. Thank you. 22 MR. BROOKMAN: Thank you. Harvey Sachs. 23 MR. SACHS: I'd like to turn to another 24 issue which is not technical at all and therefore, I'm 25 a little bit modest about even proposing it, but I 

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### 175 1 

### notice. That's helpful. Okay, back to Harvey and 2 then Bill. 3 

### MR. SACHS: Bill, ifyouhave follow-upon 4 

### this one, I will let you go ahead. I would to 5 introduce some other issue when you're done. 6 

### MR. PRINDLE: This is Bill Prindle, 7 Alliance to Save Energy. We've commented inthe past 8 and we still are quite open to separate product 9 classifications orexemptions for someof these niche 10 products andthat's

-- from ourpoint of view, that's 11 a very flexible area. 12 MR. BROOKMAN: Thank you, Marshall, you 13 follow in, please. 14 

### MR. HUNT: Yes, PacificGas andElectric, 15 Marshall Hunt. I justwould like whenyou do that to 16 be cognizant of the fact that the fan energy is much 17 higher because of the high static pressures and of 18 course, the latent factor is much higher in those 19 systems andinourneckof thewoods, we don't needso 20 much latent removal, so we want to make sure the 21 consumer would be aware of those. Thank you. 22 MR. BROOKMAN: Thank you. Harvey Sachs. 23 

### MR. SACHS: I'd like to turn to another 24 issuewhichisnottechnical at allandtherefore, I'm 25 a little bit modest about even proposing it, but I

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 www.nealrgross.com176 1 would like to quote from the letter from the 2 Department of Justice. This is Harvey Sachs, ACEEE. 3 "We've identified three possible 4 competitive problems presented by the proposed 5 standards. First, the proposed 13 SEER heat pump 6 requirement would have a disproportionate impact on 7 smaller manufacturers. Currently, less than 20 8 percent of the total current product lines meet the 9 proposed standards but for some small manufacturers 10 100 percent of their product lines failed to satisfy 11 the proposed. Page 38843, column 2, the argument is 12 extended to air conditioners by NAN's (phonetic) on 13 38844 column 1". 14 I trust that the Office of General Counsel 15 for DOE has reasonably good relations with DOJ and 16 will help them understand the structure of the air 17 conditioning and heat pump industry. I certainly 18 don't claim in this company to be an expert on that 19 but from everything I've learned, the smaller 20 manufacturers are purchasers and assemblers of 21 components manufactured by other companies. All of 22 the ones I know buy much more value from their vendors 23 than they add in terms of those cost structure. 24 Those who have chosen to compete with 25 differentiated projects -- products such as the small 

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### 176 1 would like to quote from the letter from the 2 Department of Justi6e. This is Harvey Sachs, ACEEE. 3 

### "We've identified three possible 4 competitive problems presented by the proposed 5 

### standards. First, the proposed 13 SEER heat pump 6 

### requirement would have a disproportionate impact on 7 

### smaller manufacturers. Currently, less than 20 8 percent of the total current product lines meet the 9 proposed standards but for some small manufacturers 10 100 percent of their product lines failed to satisfy 11 the proposed. Page 38843, column 2, the argument is 12 extended to air conditioners by NAN's (phonetic) on 13 38844 column 1". 14 I trustthattheOfficeofGeneralCounsel 15 for DOE has reasonably good relations with DOJ and 16 will help them understand the structure of the air 17 conditioning and heat pump industry. I certainly 18 don't claim in this company to be an expert on that 19 

### but· from everything I've learned, the smaller 20 manufacturers are purchasers and assemblers of 21 components manufactured by other companies. All of 22 theones I knowbuymuchmorevalue fromtheirvendors 23 than they add in terms of those cost structure. 24 

### Those who have chosen to compete with 25 differentiatedprojects

-- products suchas the small

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com177 1 diameter, high velocity systems, have a niche. Take 2 the ground source heat pump manufacturers in that 3 category. On the other hand, there are some vendors 4 in areas for example, PTACs who are specialists in 5 building commodity products to a price. They have 6 chosen to assemble low efficiency units and sell them 7 on low price. 8 And the least price units equipment 9 available will assemble into a standard at 13, at 12, 10 at 14. They'll meet that and it is disappointing that 11 the Department of Justice in my opinion has so badly 12 misread the do not offer as cannot make. And I trust 13 that someone will help with meeting DOJ's concerns so 14 that we can focus on some of the real issues. 15 MR. BROOKMAN: Thank you. Jim Crawford. 16 MR. CRAWFORD: Jim Crawford, Trane 17 Company. I -- we try real hard not to be one of those 18 smaller manufacturers. If you were to go back to the, 19 I believe it was October, perhaps October 5th of the 20 year 2000 NOPR, the thing that might jump out at you 21 after you studied the tables is the fact that the 22 DOE/ADL contractor group came to some estimates about 23 the impact of various standards on the net present 24 value of the industry and whether or not you would 25 equate highest cost manufacturers with smallest 

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### 177 1 diameter, high velocity systems, have a niche. Take 2 the ground source heat pump manufacturers in that 3 category. On the other hand, there are some vendors 4 in areas for example, PTACs who are specialists in 5 

### building commodity products to a price. They have 6 chosentoassemble lowefficiencyunits and sell them 7 on low price. 8 

### And the least price units equipment 9 

### available will assemble into a standard at 13, at 12, 10 at 14. They'llmeet that andit isdisappointingthat 11 the Department of Justice in my opinion has so badly 12 misread the do not offer as cannot make. And I trust 13 that someonewill helpwithmeetingDOJ's concerns so 14 that we can focus on some of the real issues. 15 MR. BROOKMAN: Thank you. Jim Crawford. 16 

### MR. CRAWFORD: Jim Crawford, Trane 17 Company. I

-- we tryreal hardnot tobeone of those 18 smallermanufacturers. Ifyouwere togobacktothe, 19 I believe it was October, perhaps October 5th of the 20 year 2000 NOPR, the thing that might jump out at you 21 after you studied the tables is the fact that the 22 DOE/ADL contractorgroup came to some estimates about 23 the impact of various standards on the net present 24 value of the industry and whether or not you would 25 equate highest cost manufacturers with smallest

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 www.nealrgross.com178 1 manufacturers, I have no idea but it certainly showed 2 some really significant skewing in the competitive 3 nature of the industry aside from questions of how 4 many models one had or didn't have. 5 And Imean, if you want to get into those 6 issues, it's very worthwhile looking at. 7 MR. BROOKMAN: Thank you. Follow-on? 8 Harvey? 9 MR. SACHS: Jim, I may have badly 10 misunderstood that piece of the NOPR and if so, I 11 appreciate the clarification. I took the highest cost 12 manufacturers as code DOE language where those 13 companies with the rich traditions in training, R and 14 D, ARI participation, national advertising budgets, 15 Trane, York, Carrier, Lenox, folks like that. 16 I took that as what was meant as higher 17 cost as opposed to some of the very small commodity 18 manufacturers with regional reachwho have a business 19 model that looks more like Gateway than like Hewlett 20 Packard. I could be wrong and I appreciate the 21 clarification. 22 Mr. CRAWFORD: I don't think we could 23 pursue this awhole lot furtherwithout the assistance 24 of DOJ at our side. 25 MR. BROOKMAN: I appreciate the internal 

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### 178 1 manufacturers, I have no ideabut it certainly showed 2 some really significant skewing in the competitive 3 

### nature of the industry aside from questions of how 4 

### many models one had or'didn't have. 5 

### And I 

### mean, ifyouwant to get into those 6 

### issues, it's very worthwhile looking at. 7 

### MR. BROOKMAN: Thank you. Follow-on? 8 

### Harvey? 9 

### MR. SACHS: Jim, I 

### may have badly 10 misunderstood that piece of the NOPR and if so, I 11 appreciatetheclarification. I tookthehighest cost 12 manufacturers as code DOE language where those 13 companies withthe richtraditions intraining, Rand 14 D, ARI participation, national advertising budgets, 15 Trane, York, Carrier, Lenox, folks like that. 16 

### I took that as what was meant as higher 17 cost as opposed to some of the very small commodity 18 manufacturers withregional reachwho have a business 19 model that looks more like Gateway than like Hewlett 20 

### Packard. I could be wrong and I appreciate the 21 clarification. 22 Mr. CRAWFORD: I don't think we could 23 pursuethisa whole lotfurtherwithouttheassistance 24 of DOJ at our side. 25

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### MR. BROOKMAN: I appreciate the internal NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com179 1 inhibition that might be there. Any other comments, 2 any other issues people would like to raise at this 3 point, please. 4 MR. DOYLE: I just wanted to make a 5 comment that you know, it's not really the DOE rule or 6 an ASHRE standard that saves energy. It's people that 7 save energy and by pulling the drapes when the air 8 conditioning is on, by having their unit serviced once 9 a year to run at its optimum efficiency, those are 10 things that we can immediately do that will save 11 energy and redesigning air conditioning equipment to 12 make up for the people that leave their shades open 13 with the air conditioning on, that's the expensive way 14 to go. 15 The other thing is that as we do get 16 higher and higher into these higher efficiencies, 17 there is other technologies which service people in 18 the industry are not equipped or educated to handle 19 and that will also be an added cost. 20 MR. BROOKMAN: Thank you. Carol and Mel. 21 MS. BIEDRZYCKI: Sorry, I can't control 22 myself. Carol Biedrzycki, Texas ROSE, I just have to 23 respond to one of the comments that was made here 24 because I believe that people should practice energy 25 efficiency and do what they can to lower their energy 

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### 179 1 inhibition that might be there. Any other comments, 2 any other issues people would like to raise at this 3 point, please. 4 

### MR. DOYLE: I just wanted to make a 5 comment thatyouknow, it'snot reallytheDOE ruleor 6 anASHRE standardthat savesenergy. It'speoplethat 7 save energy and by pulling the drapes when the air 8 conditioningison, byhavingtheirunit servicedonce 9 a year to run at its optimum efficiency, those are 10 things that we can immediately do that will save 11 energy and redesigning air conditioning equipment to 12 make up for the people that leave their shades open 13 withthe airconditioningon, that'stheexpensiveway 14 to go. 15 

### The other thing is that as we do get 16 higper and higher into these higher efficiencies, 17 there is other technologies which service people in 18 the industry are not equipped or educated to handle 19 and that will also be an added cost. 20 

### MR. BROOKMAN: Thankyou. Carol andMel. 21 MS. BIEDRZYCKI: Sorry, I can't control 22 myself. Carol Biedrzycki, TexasROSE, I justhave to 23 respond to one of the comments that was made here 24 because I believe that people shouldpractice energy 25 efficiencyanddo what theycan to lower their energy

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 www.nealrgross.com180 1 use. However, technology is the only thing that we 2 can depend on. It's one of the reasons why utility 3 DSM programs have always centered around technology 4 based energy efficiency rather than changes in the 5 practices of customers and their energy use because 6 onceyou have the technology establishedand once it's 7 known then you can depend on it. So while I agree in 8 principle with what's being said here, I don't think 9 that we can substitute practices for what we -- what 10 Iwould considera confirmed change in technology that 11 increases the efficiency standard. 12 MR. BROOKMAN: Thank you. Mel Hall13 Crawford? 14 MS. HALL-CRAWFORD: Mel Hall-Crawford. I 15 would just like to echo what Carol has said. I am 16 involved in an education outreach project on energy 17 efficiency, so that's definitely part of what we do. 18 We try to educate consumers on buying energy efficient 19 products and also energy efficient practices. I 20 believe we have a great opportunity here to raise the 21 bar. It takes 10 years, it seems on average to put 22 out a new standard. Let's do it right. Let's do it 23 as efficiently as we possibly can and the technology 24 is there to do it at 13. 25 MR. BROOKMAN: Thankyou. Michael McCabe? 

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### 180 1 

### use. However, technology is the only thing that we 2 can depend on. It's one of the reasons why utility 3 DSM programs have always centered around technology 4 

### based energy efficiency rather than changes in the 5 

### practices of customers and their energy use because 6 

### onceyouhavethetechnologyestablishedandonce it's 7 

### known thenyou can depend on it. Sowhile I agree in 8 

### principle with what's being said here, I don't think 9 

### that we can substituie practices for what we -- what 10 I wouldconsidera confirmedchange intechnologythat 11 increases the efficiency standard. 12 

### MR. BROOKMAN: Thank you. Mel Hall13 

### Crawford? 14 

### MS. HALL-CRAWFORD: Mel Hall-Crawford. I 15 

### would just like to echo what Carol has said. I 

### am 16 involved in an education outreach project on energy 17 efficiency, so that's definitely part of what we do. 18 We trytoeducateconsumersonbuyingenergyefficient 19 

### products and also energy efficient practices. I 

### 20 believewe have a great opportunityhere to raise the 21 

### bar. It takes 10 years, it seems on average to put 22 out·a new standard. Let's do it right. Let's do it 23 as efficiently as we possibly can and the technology 24 is there to do it at 13. 25

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### MR. BROOKMAN: Thankyou. MichaelMcCabe? NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW WASHINGTON, D.C. 20005-3701 www.nealrgross.com181 1 MR. McCABE: Yeah, I'd just like to try to 2 get some closure on the small diameter, high velocity 3 discussion. ARI has stated here that they're going to 4 recommend to us that to establish a separate product 5 class. We also have ARI's comments on the test 6 procedure where they accepted the test procedure which 7 had a permitted -- the proposed test procedure permits 8 testing these units without a fan and using the 9 default power consumption. 10 And it seems that there may be -- that the 11 two are inter-related and we would hope in your 12 comments that you were to address both the separate 13 product class and the proposed test procedure changes 14 and basically it's our concern that -- to consider in 15 this is that we're trying to avoid creating of a loop 16 hole. 17 Another issue that we have is if we do a 18 rulemaking, this takes a lot of resources, as 19 mentioned, the small market share and we also are very 20 strongly trying to avoid in delaying the final rules 21 for both the central air standards and for the test 22 procedures. So those are the criteria that we're 23 expressing and we hope to have comments from all of 24 the interested parties. 25 MR. BROOKMAN: Thank you, Michael. Ed 

### NEALR.GROSS COURTREPORTERS ANDTRANSCRIBERS 1323RHODEISLANDAVE., N.W. (202)234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 181 1 

### MR. McCABE: Yeah, I'djust liketo tryto 2 

### get some closure on the small diameter, highvelocity 3 discussion. ARI has statedhere that they're goingto 4 

### recommend to us that to establish a separate product 5 

### class. We also have ARI's comments on the test 6 

### procedurewheretheyacceptedthetestprocedurewhich 7 

### hada permitted

-- theproposedtestprocedurepermits 8 

### testing these units without a fan and using the 9 

### default power consumption. 10 

### Andit seems that theremaybe

- - that the 11 

### two are inter-related and we would hope in your 12 

### comments that you were to address both the separate 13 

### product class and theproposedtestprocedure changes 14 

### andbasicallyit's our concern that

-- to consider in 15 

### this is that we're trying to avoid creating of a loop 16 

### hole. 17 

### Another issue that we have is if we do a 18 

### rulemaking, this takes a lot of resources, as 19 

### mentioned, the smallmarket share andwe also arevery 20 

### strongly trying to avoid in delaying the final rules· 21 

### for both the central air standards and for the test 22 

### procedures. So those are the criteria that we're 23 

### expressing and we hope to have comments from all of 24 

### the interestedparties. 25 

### MR. BROOKMAN: Thank you, Michael. Ed

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### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., NW WASHINGTON, D.C. 20005-3701 www.nealrgross.com182 1 Pollock and then to Karim. 2 MR. POLLOCK: This is Ed Pollock. Just 3 from some clarification on that; with the fact that we 4 have decided to change our position on what we had 5 proposed on these high velocity systems, we will have 6 to re-propose and that will be both on the test side 7 and on the standard side. In order to expedite that 8 and minimize the amount of time, as was pointed out, 9 it's a very small percentage of the market but we do 10 need to provide this utility to consumers for retrofit 11 especially which is where these high velocity systems 12 are mostly applied. 13 So any type of information that you can 14 give us in terms of the way you see this product being 15 tested, there was some discussion about the extra 16 power being used. That does need to be factored in, 17 in some way. So this will not be the last chance you 18 get to comment on the high velocity systems. We will 19 do, hopefully, a very abbreviated proposal and then 20 move to final rule on setting the standards and the 21 test methodology. And if you can help us by providing 22 some suggestions the way you see this should be done, 23 that will help us shorten up the amount of time it 24 will take and the amount of resources we have to 25 expend. 

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### 182 1 Pollock and then to Karim. 2 

### MR. 

### POLLOCK: This is Ed Pollock. Just 3 fromsomeclarificationonthat; withthe fact thatwe 4 have decided to change our position on what we had 5 proposedon these highvelocity systems, we will have 6 to re-propose and that will be both on the test side 7 and on the standard side. In order to expedite that 8 and minimize the amount of time, as was pointed out, 9 it's a very small percentage of the market but we do 10 needtoprovidethisutilitytoconsumersforretrofit 11 especiallywhich iswhere these highvelocity systems 12 are mostly applied. 13 So any type of information that you can 14 giveus intermsof thewayyou see thisproductbeing 15 tested, there was some discussion about the extra 16 power being used. That does need to be factored in, 17 in some way. So this will not be the last chance you 18 get to comment on the highvelocity systems. We will 19 do, hopefully, a very abbreviated proposal and then 20 move to final rule on setting the standards and the 21 testmethodology. Andifyoucanhelpusbyproviding 22 some suggestions the wayyou see this shouldbe done, 23 that will help us shorten up the amount of time it 24 will take and the amount of resources we have to 25 expend.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com183 1 MR. AMRANE: Yes, Karim Amarne of ARI. To 2 answer Michael McCabe's question,ARI will be amending 3 its comments on the test procedure to reflect the new 4 position we have. 5 MR. BROOKMAN: Harvey Sachs. 6 MR. SACHS: Harvey Sachs, ACEEE. I 7 certainly confess both to not knowing this product 8 line in detail but also to having knowledge that 9 there's some other products which are commonly sold 10 with third party air handlers. The question that's 11 been raised of testing without a fan in an area where 12 space constraints are not likely to be in the 13 mechanical area but in the wall cavities into which 14 these are installed is of concern to us and even 15 though it's a small product class, we would very much 16 be interested for a lot of reasons, in a test that's 17 done at a realistic static pressure for these systems 18 with a performance based air handling requirement. 19 MR. BROOKMAN: Karim. 20 MR. ARMRANE: This is Karim again, with 21 ARI. I think I'd like to reassure you, Harvey, we 22 will be amending our comments for this procedure and 23 require this product to be tested with a fan. 24 MR. SACHS: I'm delighted to see we're on 25 common ground on that. 

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### 183 1 

### MR. AMRANE: Yes, KarimAmarneofARI. To 2 answerMichaelMcCabe'squestion, ARI willbeamending 3 its comments onthe testprocedure to reflect the new 4 position we have. 5 

### MR. BROOKMAN: Harvey Sachs. 6 

### MR. SACHS: Harvey Sachs, ACEEE. I 

### 7 certainly confess both to not knowing this product 8 line in detail but also to having knowledge that 9 there's some other products which are commonly sold 10 

### with third party air handlers. The question that's 11 beenraisedof testingwithout a fan in an area where 12 space constraints are not likely to be in the 13 mechanical area but in the wall cavities into which 14 these are installed is of concern to us and even 15 though it'sa smallproduct class, we wouldverymuch 16 be interested for a lot of reasons, in a test that's 17 done at a realistic staticpressure for these systems 18 with a performance based air handling requirement. 19 

### MR. BROOKMAN: Karim. 20 

### MR. ARMRANE: This is Karim again, with 21 ARI. I think I'd like to reassure you, Harvey, we 22 will be amending our comments for this procedure and 23 require this product to be tested with a fan. 24 

### MR. SACHS: I'mdelightedto seewe're on 25 common ground on that.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com184 1 MR. BROOKMAN: Thank you. Jim Crawford. 2 MR. CRAWFORD: Jim Crawford. I just 3 wanted to say I think we're about ready to complete 4 because Harvey and I agree on this last point. 5 (Laughter) 6 MR. SACHS: I like your haircut, too. 7 (Laughter) 8 MR. BROOKMAN: I guess now is the time to 9 test that assumption. Deborah Miller. 10 MS. MILLER: No, actually because 11 everybody spoke so much about energy efficiency and it 12 was brought up about technicians and making sure that 13 your machines are being checked twice a year, I would 14 be remiss and my boss would probably fire me if I 15 didn't mention two of his two favorite projects which 16 are, number one, that the Federal Government has to 17 continue supporting research in the area of high 18 efficiency units and number two, we continue to say 19 that the whole industry has a program to certify our 20 technicians and to make sure that they know how to 21 handle these high efficiency units. that the air flow 22 and the refrigerant charges are correct. 23 So I will continue to -- as part of our 24 comments, we obviously, will be talking about the need 25 to have a balanced strategy. Thank you. 

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### 184 1 

### MR. BROOKMAN: Thank you. Jim Crawford. 2 MR. CRAWFORD: Jim Crawford. I just 3 wanted to say I think we're about ready to complete 4 

### because Harvey'and I agree on this last point. 5 

### (Laughter) 6 

### MR. SACHS: I like your haircut, too. 7 

### (Laughter) 8 

### MR. BROOKMAN: I guess now is the time to 9 

### test that assumption. Deborah Miller. 10 

### MS. MILLER: No, 

### actually because 11 everybodyspoke somuchaboutenergyefficiencyandit 12 was brought up about technicians andmaking sure that 13 your machines are being checked twice a year, I would 14 be remiss and my boss would probably fire me if I 15 didn't mention two of his two favorite projects which 16 are, number one, that the Federal Government has to 17 continue supporting research in the area of high 18 efficiency units and number two, we continue to say 19 that the whole industry has a program to certify our 20 technicians and to make sure that they know how to 21 handlethesehighefficiencyunits. that the airflow 22 and the refrigerant charges are correct. 23 So I will continue to -- as part of our 24 comments, we obviously, willbetalkingabouttheneed 25 to have a balanced strategy. Thank you.

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### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com185 1 MR. BROOKMAN: Thank you very much. 2 Harvey? 3 MR. SACHS: On a note of commentary, I 4 would like to praise both this Department and the 5 leadership of ARI and its 21 CR research program which 6 it's been my privilege to participate in since its 7 founding and some very, very exciting work that will 8 help us get higher efficiencies delivered is being 9 undertaken in that effort and I salute you all for 10 your work there. 11 MR. BROOKMAN: Thank you. Let's just 12 confirm, I'm going to turn and look at the Department 13 and I'm going to -- before I go to them, I'm going to 14 ask if anybody else has issues they'd like to raise at 15 this point, issues that haven't been raised already 16 today? Do you have other substantive issues? I've 17 asked the Department if they have other substantive 18 issues. They do not, I do not think, so from my 19 perspective, I want to thank all of you for what I 20 thought was a very productive workshop and I thank 21 especially each and every one of you for the goodwill 22 and spirit of open exchange that we've had here. I 23 found that that makes a huge difference no matter 24 where we go forward from here. So thanks to all of 25 you for that. 

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### 185 1 MR. BROOKMAN: 

### Thank you very much. 2 Harvey? 3 MR. 

### SACHS: On a note of commentary, I 

### 4 would like to praise both this Department and the 5 leadershipofARI andits 21CRresearchprogramwhich 6 it's been my privilege to participate in since its 7**fou~ding** 

### and some very, very exciting work that will 8 help us get higher efficiencies delivered is being 9 undertaken in that effort and I salute you all for 10 your work there. 11 MR. BROOKMAN: 

### Thank you. Let's just 12 confirm, I'mgoing to turn and look at the Department 13 and I'mgoing to -- before I go to them, I'mgoing to 14 askifanybodyelsehas issuesthey'dlike toraise at 15 this point, issues that haven't been raised already 16 

### today? Do you have other substantive issues? I've 17 asked the Department if they have other substantive 18 issues. They do not, I do not think, so from my 19 perspective, I want to thank all of you for what I 20 thought was a very productive workshop and I thank 21 especiallyeachandeveryoneof you for the goodwill 22 and spirit of open exchange that we've had here. I 

### 23 found that that makes a huge difference no matter 24 

### where we go forward from here. So thanks to all of 25 you for that.

(202)234-4433 

### NEAL

### R.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com186 1 Let me turn it back to Michael McCabe. 2 MR. McCABE: I'd just like to express my 3 personal thanks to the people for your attendance, 4 your attention. I know coming here in this final 5 slow-down of air travel creates quite a problem, so 6 it's really appreciated that you could -- especially 7 those that came long distances in their participation 8 in this hearing. 9 MR. POLLOCK: Just echoing what Michael 10 said, I appreciate your participating in this. We are 11 looking forward to other -- any additional thoughts 12 that you might have or especially concrete data that 13 we should be considering as we move forward to making 14 our final decision. This was a proposal, this is not 15 a final decision. We will evaluate and consider all 16 comments that are submitted to us on this proposal 17 before we go to a final rule. 18 And I'd also like to commend you. There's 19 obviously a very polarized group of people on 20 positions on this. We'll wade through anything. 21 There was no screaming matches and I commend you on 22 your conduct and also the offer here, perhaps, trying 23 to come together to suggest a consensus way that we 24 might bring both sides together in something that 25 would move us forward more quickly and get a standard 

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### 186 1 

### Let me turn it back to Michael McCabe. 2 MR. McCABE: I'djust like to express my 3 personal thanks to the people for your attendance, 4 

### your attention. I know coming here in this final 5 slow-down of air travel creates quite a problem, so 6 it's really appreciated that you could

-- especially 7 

### those that came longdistances intheirparticipation 8 in this hearing. 9 

### MR. POLLOCK: Just echoing what Michael 10 said, I appreciateyourparticipatinginthis. We are 11 looking forward to other

-- any additional thoughts 12 that you might have or especially concrete data that 13 we shouldbe considering as we move forward to making 14 our final decision. This was a proposal, this is not 15 a final decision. We will evaluate and consider all 16 comments that are submitted to us on this proposal 17 before we go to a final rule. 18 AndI'dalsoliketocommendyou. There's 19 obviously a very polarized group of people on 20 

### positions on this. We'll wade through anything. 21 There was no screaming matches and I commend you on 22 your conduct and also the offerhere, perhaps, trying 23 to come together to suggest a consensus way that we 24 might bring both sides together in something that 25 wouldmove us forwardmore quicklyand get a standard

(202)234-4433 

### NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com187 1 in place, perhaps, more quickly. Thank you. 2 MR. BROOKMAN: Travel safely, everyone. 3 MR. POLLOCK: Also, thank you, Doug, for 4 a job well done today as always. 5 (Whereupon, at 2:55 p.m. the above6 entitled matter was concluded.) 7 

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### 1 in place, perhaps, more quickly. Thank you. 2 

### MR. BROOKMAN: Travel safely, everyone. 3 

### MR. POLLOCK: Also, thank you, Doug, for 4 a job well done today as always. 5 (Whereupon, at 2:55 p.m. the above6 entitledmatter was concluded.) 7 8 9 10 11 12 13 14 15 16 17 18 19 

### 20 21 22 23 24 

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NEALR.GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODEISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 www.nealrgross.com188 CERTIFICATE

### EE-RM/STD-98-440- Z( 

# W| This is to certify that the foregoing transcript in the matter of: Public Hearing

Before: Office of Energy Efficiency and Renewable Energy

Date: October 2, 2001

Place: Washington, DC

represents the full and complete proceedings of the aforementioned matter, as reported and reduced to typewriting. 188 

### CERTIFICATE '.',-, 

### EE-RM/STD-98-440-/..

## ~

# I**~** This is to certifythat the foregoing transcript in the matter of: Public Hearing

Before: Office of Energy Efficiency and Renewable Energy Date: October 2, 2001

Place: Washington, DC

represents the full and complete proceedings of the aforementioned matter, as reported and reduced to typewriting.

--".'"