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

NEAL R. GROSS

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 EE-RM-STD-98-440 COMMENT 241WW

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 

(202) 234-4433 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

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WASHINGTON, D.C. 20005-3701 www.nealrgross.com 
2

C-O-N-T-E-N-T-S

} -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

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

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 EE-RM-STD-98-440 COMMENT 241WW

C-O-N-T-E-N-T-S 

').~ 

Opening Remarks . 

Agenda Review and Introduction 

Participants' General Remarks 

Legal Issues 

Proposed Standards 

Other Issues 

(202) 234·4433 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE ISLAND AVE., N.w. 

WASHINGTON, D.C. 20005·3701 

2 

··f 

3 

9 

19 

106 

135 

165 

www.nealrgross.com 
3

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

2 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. Good morning.

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

NEAL R. GROSS

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1323 RHODE ISLAND AVE., N.W.

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 EE-RM-STD-98-440 COMMENT 241WW

3 

1 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 meeting and apologize for this delay but I think we've 

5 all recovered and we're ready to start. Good morning. 

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 

(202) 234-4433 

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COURT REPORTERS AND TRANSCRIBERS 

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4

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

NEAL R. GROSS

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 EE-RM-STD-98-440 COMMENT 241WW

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 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 

(202) 234-4433 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE ISLAND AVE., N.W. 

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EE-RM/STD-98-440-J- W1 5

1 pumps. The supplement proposed-rules was published 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 commentary period to

6 October the 19th.

7 The Department also sent announcements by

8 e-mail and by conventional mail to organizations and

9 individuals who might have an interest in this

10 rulemaking. As stated in the Federal Register notice,

11 we invited any persons who have an interest in the

12 supplemental proposed rule or who is a representative

13 of a group 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 allow each participant to make a general

NEAL R. GROSS

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 EE-RM-STD-98-440 COMMENT 241WW

EE-RM/STO-9S-440-'Z-41 WW5 

1 pumps. The supplement proposed· rules was published 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 commentary period to 

6 October the 19th. 

7 The Department also sent announcements by 

8 e-mail and by conventional mail to organizations and 

9 individuals who might have an interest in this 

10 rulemaking. As stated in the Federal Register notice, 

11 we invited any persons who have an interest in the 

12 supplemental proposed rule or who is a representative 

13 of a group 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 allow each participant to make a general 

(202) 234-4433 

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6

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

NEAL R. GROSS

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 EE-RM-STD-98-440 COMMENT 241WW

6 

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 

(202) 234-4433 

For those of you without e-mail.itis 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

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7

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 and we 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

NEAL R. GROSS

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1323 RHODE ISLAND AVE., N.W.

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 EE-RM-STD-98-440 COMMENT 241WW

7 

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 and we 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 

(202) 234-4433 

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8

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 you must 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 from public 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 item on 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 1ENEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

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 EE-RM-STD-98-440 COMMENT 241WW

8 

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 you must 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 from public 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 item on 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 lE-

(202) 234-4433 

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9

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 The workshop is scheduled to adjourn today

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

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

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 EE-RM-STD-98-440 COMMENT 241WW

-------- ----- ---

9 

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 The workshop is scheduled to adj ourn today 

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 

(202) 234-4433 

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COURT REPORTERS AND TRANSCRIBERS 

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10

1 the meeting. Doug?

2 MR. BROOKMAN: Thank you. Good morning,

3 everybody.

4 (Good morning)

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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 EE-RM-STD-98-440 COMMENT 241WW

---~----- - ----

10 

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 despi te the di srupt ion. 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 

lOwe' 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? 

(202) 234-4433 

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11

1 MR. GOLDSTEIN: Yes.

2 MR. BROOKMAN: I will 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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 EE-RM-STD-98-440 COMMENT 241WW

11 

1 MR. GOLDSTEIN: Yes. 

2 MR. BROOKMAN: I will 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 

(202) 234-4433 

MR. CRAWFORD: Jim Crawford, the Trane 

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12

1 Company.

2 MR. MARTIN: Michael Martin, California

3 Energy Commission.

4 MR. AMRANE: Karim Amrane, 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: Karim Amrane, Air Conditioning 

5 and Refrigeration Institute. 

6 MR. HODGES: John Hodges, Air Condi t ioning 

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 

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MR. BROOKMAN: Is Brenda Ewards-Jones back 

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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: Greg Rosenquist, Lawrence

25 Berkeley National Lab.

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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: Greg Rosenquist, Lawrence 

25 Berkeley National Lab. 

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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 (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 MR. BROOKMAN: And you're located?

24 MR. FANN: Ohio.

25 MR. BROOKMAN: Thank you for calling in

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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 (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 

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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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1 and anybody else ln 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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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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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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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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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, EEl. You sayan 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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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 related workshops,

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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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 related workshops, 

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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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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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 

(202) 234-4433 

Those submitting the sequence of 

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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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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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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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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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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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 EE-RM-STD-98-440 COMMENT 241WW

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 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 

l8 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 

(202) 234-4433 

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23

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,

NEAL R. GROSS

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 EE-RM-STD-98-440 COMMENT 241WW

23 

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 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, 

(202) 234-4433 

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COURT REPORTERS AND TRANSCRIBERS 

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24

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

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

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 EE-RM-STD-98-440 COMMENT 241WW

24 

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 res~stance 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 

(202) 234-4433 

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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 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 SEER debate is an important, albeit relative

NEAL R. GROSS

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 EE-RM-STD-98-440 COMMENT 241WW

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 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 SEER debate is an important, albeit relative 

(202) 234-4433 

NEAL R. GROSS 

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1323 RHODE ISLAND AVE., NW. 

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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 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 from various

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

NEAL R. GROSS

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 EE-RM-STD-98-440 COMMENT 241WW

26 

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 from various 

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 

(202) 234-4433 

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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 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

NEAL R. GROSS

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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 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 

(202) 234-4433 

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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 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

NEAL R. GROSS

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 EE-RM-STD-98-440 COMMENT 241WW

28 

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. 

(202) 234-4433 

These manufacturers will continue to 

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29

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.

NEAL R. GROSS

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 EE-RM-STD-98-440 COMMENT 241WW

29 

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. 

(202) 234-4433 

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30

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 in prior 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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 EE-RM-STD-98-440 COMMENT 241WW

30 

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 in prior 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 

(202) 234-4433 

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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 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 and production 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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 EE-RM-STD-98-440 COMMENT 241WW

31 

1 estimates. However, we are very encouraged by the 

2 American Council for an Energy Efficient Economy's 

3 proj ection 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 and production 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 

(202) 234-4433 

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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 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

NEAL R. GROSS

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 EE-RM-STD-98-440 COMMENT 241WW

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 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 ln peak demand. Again, we are confident 

25 that the purchase price of a SEER 13 central air 

(202) 234·4433 

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33

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 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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34

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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34 

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 

25 standards. 

(202) 234-4433 

and heat pump energy efficiency 

EEl is the association of the United 

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35

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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35 

1 States investor owned electric utilities, 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 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, 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 reverse engineering values. EEl 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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36

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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36 

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. 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 Based on ARl 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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37

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 to provide 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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37 

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 commi t tee and in our opinion it was vi tal in improving 

21 the DOE analytical and rulemaking process. The 

22 advisory committee p'rovided a platform for interested 

23 stakeholders to provide 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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38

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: Good morning. 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 Executive Vice 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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38 

1 programs. 

2 EEl 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: Good morning. 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 Executi ve Vice 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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39

1 equipment with 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 a balance between both environmental and energy

25 needs. One simple option is energy efficiency and

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39 

1 equipment with 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 a balance' between both environmental and energy 

25 needs. 

(202) 234-4433 

One simple option is energy efficiency and 

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1 conservation, specifically energy efficiency standards

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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40 

1 conservation, specifically energy efficiency standards 

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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1 to the higher SEER will simply mean 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-work during installation of 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 to the higher SEER will simply mean 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-work during installation of 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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1 There have also been some claims that the

2 13 standard would 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 There have also been some claims that the 

2 13 standard would 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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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 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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1 standard will significantly reduce energy consumption,

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. My name 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 standard will significantly reduce energy consumption, 

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. My name 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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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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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 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 

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

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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 conditioning because they don'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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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 conditioning because they don'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 i 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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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 rolling back 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 a year 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 allover 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 rolling back 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 a year 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 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's national energy policy

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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48 

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's national energy policy 

15 notes, quote, IIGreater 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 II . 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 

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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

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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 

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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

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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 

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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

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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 eq~ipment. 

13 We, t~erefore, 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 

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1 conditioner standard is a grave mistake. This action

2 and the roll-back would 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 and unfortunately 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 I want to comment on the

24 diversity of the parties that have joined us in the

25 litigation.

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1 conditioner standard is a grave mistake. This action 

2 and the roll-back would 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 and unfortunately 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 I want to comment on the 

24 diversity of the parties that have joined us in the 

25 litigation. 

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1 On the non-profit side, we're very pleased

2 that the Consumer Federation of America 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 joined by 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 telling you, "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

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1 On the non-profit side, we're very pleased 

2 that the Consumer Federation of America 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 joined by 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 telling you, II 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 

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54

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 from NRDC's perspective the SEER 13 standard itself is

25 a form of compromise. We believe that the record

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54 

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 from NRDC' s perspective the SEER 13 standard itself is 

25 a form of compromise. We believe that the record 

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55

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

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55 

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 rem~ining 30 seconds? 

21 

22 all. 

23 

24 

25 

(202) 234-4433 

MR. GOLDSTEIN: No, I think that covers it 

MR. BROOKMAN: Thank you, David. 

MS. KENNEDY: Thank you. 

MR. BROOKMAN: And thank you. 

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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.

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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 su~p6rts 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. 

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57

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: Thank you very much. Thank

23 you. The next speaker will be Pacific Gas and

24 Electric.

25 MR. HUNT: I'm Marshall Hunt with Pacific

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57 

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: Thank you very much. Thank 

23 you. The next speaker will be Pacific Gas and 

24 Electric. 

25 

(202) 234-4433 

MR .. HUNT: I'm Marshall Hunt with Pacific 

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58

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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58 

1 Gas and Electric Company. We serve about one in ever 

2 20 ~lectric 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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59

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

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59 

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 

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60

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 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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61

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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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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62

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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62 

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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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'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 and we 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'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 and we 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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64

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 manufacturer of heating, ventilating, air conditioning

11 and refrigeration products. 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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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 manufacturer of heating, ventilating, air conditioning 

11 and refrigeration products. 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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1 there is a lack of 13 SEER equipment for many space2 constrained and smaller niche products 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 main problems

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 increased dealer 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 concern about

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 constrained and smaller niche products 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 main problems 

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 increased dealer 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 Relati ve to space constraint and niche 

21 products, we've previously expressed our concern about 

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 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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1 units are also a space constraint problem for 

2 manufactures at those levels. When ARI states that 84 

3 percent of the curre.nt 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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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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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 

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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 has worked 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 require me 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 improve procedures 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 instruct ions, 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 has worked 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 require me to abbreviate my comments about 

19 the procedures leading up to this hearing but briefly 

20 let me say this i 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 improve procedures and protect the 

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69

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 standard would

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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69 

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 standard would 

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 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 would pave 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 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 would pave 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 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-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 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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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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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 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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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 transmission and distribution 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 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 transmission and distribution 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, 

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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 signed by 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 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 signed by about 40 organizations 

13 to Secretary Abraham supporting the 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 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 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 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 J.n 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 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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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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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 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 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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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 i 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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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 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 i 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 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 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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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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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 Bush was 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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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 Bush was 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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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 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 II. 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 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 rather more specifically the quality

12 of life that your grandchildren may enjoy when 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 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 rather more specifically the quality 

12 of life that your grandchildren may enjoy when 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 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 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 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 rulemaking and within the lifetime of many of the 

18 systems that are subj ect 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 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 and we were

25 the. genesis of really wakening people to the problems

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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 iI' 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 and we were 

25 the genesis of really wakening people to the problems 

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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 my memory serves me right,

9 were in the forefront of attempting to establish a

10 building energy efficiency code and I was 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 I worked 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 really put our sights on, not lower the

24 bars but raise the bars. raise the bars of

25 performance. And sometimes when you raise the bars of

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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 my memory serves me right, 

9 were in the forefront of attempting to establish a 

10 building energy efficiency code and I was 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 I worked 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 really put our sights on, not lower the 

24 bars but raise the bars. ralse the bars of 

25 performance. And sometimes when you raise the bars of 

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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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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.S 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 con~uming 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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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 the business, the developing, and building

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 our people 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 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 the business, the developing, and building 

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 our people 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 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 a great pride of mine of

11 the Air Conditioning Contractors of America.

12 I'm not 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 I also 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, I don't know, but I want 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 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 a great pride of mine of 

11 the Air Conditioning Contractors of America. 

12 I'm not 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 I also 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, I don't know, but I want 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 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 and everything 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 my 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 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 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 and everything 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 my 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 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 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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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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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, 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 

14 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 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, I would just like to,

19 you know, add a few comments here. First of all,

20 let's really think about what we're talking about 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 a year at $7.00

25 an hour, you make $14,000.00 a year. That's over the

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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, I would just like to, 

19 you know, add a few comments here. First of all, 

20 let's really think about what we're talking about 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 a year at $7.00 

25 an hour, you make $14,000.00 a year. That's over the 

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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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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 I t afford to buy those things 

25 anyway and why would they stop -- why would they not 

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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 I wanted 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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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 I wanted 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 

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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 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 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 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 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 when we

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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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 when we 

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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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, and utility 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 consumer protector, I strongly

15 feel needs to, again maintain 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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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, and utility 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 consumer protector, I strongly 

15 feel needs to, again maintain the 13 SEER standard for 

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 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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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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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 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 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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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, I don'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 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 

24 on. 

25 

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MR. BROOKMAN: Deborah, I don't think it 's 

MS. MILLER: that is supposed to be 

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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 the positions of your organizations that go

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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 the positions of your organizations that go 

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1 beyond the content of these proceedings here today

2 which are more narrowly cast than where you 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 representative who would profess 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 behind me 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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1 beyond the content of these proceedings here today 

2 which are more narrowly cast than where you 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 representative who would profess 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 behind me 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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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 for being 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 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 for being 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 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, Texas Natural 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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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, Texas Natural 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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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 Bowers will 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 to make 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 Conservation Act. Section 325(o) (1) provides in part

24 that, "The Secretary of Energy may not prescribe any

25 amended standard which increases the maximum allowable

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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 Bowers will 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 to make 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 (0) (1) of the Energy Policy and 

23 Conservation Act. Section 325(0) (1) provides in part 

24 that, liThe Secretary of Energy may not prescribe any 

25 amended standard which increases the maximum allowable 

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1 energy use or decreases the minimum required energy

2 efficiency of a covered product".

3 DOE has proposed a new 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's petition 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 efficiency minimums would not be required by 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 of proposed rulemaking. Until this rulemaking,

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1 energy use or decreases the minimum required energy 

2 efficiency of a covered product ll . 

3 DOE has proposed a new section 430.34 that 

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 energy use ll , that are used in 325 (0) (1) . 

8 The impetus for these proposals was ARI' s petition 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 (0) (1) 

13 applied to the January 22nd, final rule because new 

14 efficiency minimums would not be required by 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 (0) (1) in the July 25th 

25 notice of proposed rulemaking. Until this rulemaking, 

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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 Review Act

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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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 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 (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 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 Review Act 

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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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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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 (0) (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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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'm not following your point,

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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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 ou~ 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'm not following your point I 

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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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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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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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 for public comment and we 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, as you're aware in New

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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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 for public comment and we 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, as you're aware in New 

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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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 from ARI.

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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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 from ARI. 

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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1 invited. And that's what my understanding is of DOE's

2 interpretation of this and that certainly is ARI's

3 interpretation and we 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 record before 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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1 invi ted. And that's what my understanding is of DOE's 

2 interpretation of this and that certainly is ARI's 

3 interpretation and we 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 record before 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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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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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 gue~s my specific question is in the Federal Register 

25 at 38823 DOE states that it's granting ARI's petition 

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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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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 1S a that is what this 

25 rulemaking is about, to give everybody an opportunity 

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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 and you 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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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 and you 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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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: Let me 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. I won't go through those criteria.

25 They're written and we've talked about them a number

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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: Let me 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. I won't go through those criteria. 

25 They're written and we've talked about them a number 

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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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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, EEl. 

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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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 them which 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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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 them which 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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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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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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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 familiar with 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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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 familiar with 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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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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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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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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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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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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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 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'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 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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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

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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 

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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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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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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 interplay between 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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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 interplay between 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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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 January with the issuance of the card memo

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 to you 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 be proposals. Our understanding

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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 January with the issuance of the card memo 

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 to you 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 be proposals. Our understanding 

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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 the phrase that one party thinks that everything

25 done since January was, quote, "illegal", unquote.

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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 pullout 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 the phrase that one party thinks that everything 

25 done since January was, quote, "illegal", unquote. 

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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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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 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: 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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1 was made for SEER 12.

2 I'm particularly concerned when 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 say you 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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1 was made for SEER 12. 

2 I'm particularly concerned when 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 thirik 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 say you 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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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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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. 

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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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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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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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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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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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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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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 presumption and 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 I would 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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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 II • 

12 When I read that quote, I see a 

13 presumption and 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 I would 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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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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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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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 then Mark

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, been misapplied by

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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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 then Mark 

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, been misapplied by 

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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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 why manufacturers 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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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 why manufacturers 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 

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 

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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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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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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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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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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 has been something under out new process

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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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 has been something under out new process 

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 fo·r 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 ARlo 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 1S off the table here. That the 

25 issue of effective date is a proposal as California 

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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 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 

25 

not usual. I guess I'm wondering like what is the 

objective here? I thought the obj ecti ve of these 

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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 I believe that my written comments try to put some

10 numbers to the -- all the apartment buildings that are

11 being built in the State of Texas alone. I mean, 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 I understand -- I wasn'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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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 I believe that my written comments try to put some 

10 numbers to the -- all the apartment buildings that are 

11 being built in the State of Texas alone. I mean, 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 I understand I wasn'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. 

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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 already been achieved in

8 some quantity within the, you know, existing equipment

9 stock.

10 MR. BROOKMAN: Thank you. 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 overhead on 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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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 already been achieved in 

8 some quantity within the, you know, existing equipment 

9 stock. 

10 MR. BROOKMAN: Thank you. 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 overhead on 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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1 of a particular convoluted interpretation. If, as Mr.

2 Pollock has suggested, and I believe 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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1 of a particular convoluted interpretation. If, as Mr. 

2 Pollock has suggested, and I believe 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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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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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, 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 sort of equipment shifting between the 12 SEER central 

21 units or package units and the through the wall units. 

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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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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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: 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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1 date then, they have to meet 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 data because 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, potentially biasing

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 to play around with 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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1 date then, they have to meet 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 data because 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, potentially biasing 

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 to play around with 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 

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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 heard many 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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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 heard many 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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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 which we do factor in as well as

25 marketing strategies from the air conditioning

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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 which we do factor in as well as 

25 marketing strategies from the air conditioning 

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1 manufacturers and if you've compared prices 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. I have personally and I think

23 on behalf of the organization I represent a great deal

24 of sympathy with special needs cases such as through

25 the wall.

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1 manufacturers and if you've compared prices 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. I have personally and I think· 

23 on behalf of the organization I represent a great deal 

24 of sympathy with special needs cases such as through 

25 the wall. 

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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, I wanted 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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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, I wanted 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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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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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, 1S 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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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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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. 

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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 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 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 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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1 diminishing returns which is why when you pass 13, 10 

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 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 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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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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1 you. 

2 MR. BROOKMAN: Thank you. Carol. 

3 MS. BIEDRZYCKI: One final comment i 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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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 prices will 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 I don't envy the Department's job in

21 doing that. However, I do think there's a number of

22 statements that have been made that show that 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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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 proj ect where manufacturer cost and market 

14 prices will 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 I don't envy the Department's job in 

21 doing that. However, I do think there's a number of 

22 statements that have been made that show that backward 

23 looking data in the industry is not sufficient. That 

24 you have to somehow find a way to proj ect that 

25 forward. 

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1 And I also recall yesterday ADL making --

2 including in its list of data sources for the

3 commercial air conditioning proceeding, 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 appreciable weight 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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1 And I also recall yesterday ADL making --

2 including in its list of data sources for the 

3 commercial air conditioning proceeding, 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 appreciable weight 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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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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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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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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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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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 to proposed standards? I think we'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: Thank you. Other comments 

5 related to proposed standards? I think we'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 wha~ 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 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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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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1 always willing to entertain a proposal 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 always willing to entertain a proposal 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, r 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 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 interesting with 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 joined ARI 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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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 interesting with 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 joined ARI 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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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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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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1 The other thing 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 manufacturers with product differentiation or premium

5 value added products. 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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1 The other thing 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 manufacturers with product differentiation or premium 

5 value added products. 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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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 whether people 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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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 tha t 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 whether people 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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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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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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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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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 

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MR. SACHS: Let me ask a question on that. 

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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: 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: 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 

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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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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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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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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 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 wi th 

25 differentiated projects -- products such as the small 

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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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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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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 I mean, 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 reach who 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 a whole lot further without the assistance

24 of DOJ at our side.

25 MR. BROOKMAN: I appreciate the internal

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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 I mean, 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, 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 with regional reach who 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 a whole lot further without the assistance 

24 of DOJ at our side. 

25 

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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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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 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: 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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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 once you have the technology established and 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 I would consider a 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: Thank you. Michael McCabe?

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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 once you have the technology established and 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 substituie practices for what we -- what 

10 I would consider a 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 

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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

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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 

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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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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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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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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. 

(202) 234-4433 

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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 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.

NEAL R. GROSS

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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 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. 

(202) 234-4433 

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COURT REPORTERS AND TRANSCRIBERS 

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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 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.

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

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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 leadership of ARI and its 21 CR research program which 

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'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 everyone 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. 

(202) 234-4433 

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COURT REPORTERS AND TRANSCRIBERS 

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186

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

NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS

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186 

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 

(202) 234-4433 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

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187

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.)

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NEAL R. GROSS

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187 

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.) 

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COURT REPORTERS AND TRANSCRIBERS 

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188

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.

 EE-RM-STD-98-440 COMMENT 241WW

188 

CERTIFICATE 

'.',-, 

EE-RM/STD-98-440- /.. ~ I ~ 

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. 

--" .'"