### (202) 234-4433 Neal R. Gross & Co., Inc. Page 1 UNITED STATES DEPARTMENT OF ENERGY

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PUBLIC MEETING ON ENERGY CONSERVATION STANDARDS FOR SMALL ELECTRIC MOTORS

+ + + + + FRIDAY, JANUARY 30, 2009

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The public meeting convened at 9:00 a.m. in Room 1E-245 of the U.S. Department of Energy, 1000 Independence Avenue, S.W., Washington, D.C., DOUG BROOKMAN, Facilitator.

PRESENT: DOUG BROOKMAN, Facilitator JIM RABA, Presiding Officer, Department of Energy CHRIS EARLY, Department of Energy BRENDA EDWARDS, Department of Energy MARK FRIEDRICHS, Department of Energy MAHIMA GUPTA, Navigant Consulting ASA HOPKINS, Lawrence Berkeley National Laboratory MICHAEL KIDO, Department of Energy MICHAEL McCABE, Department of Energy MATTHEW NARDOTTI, Navigant Consulting MICHAEL SCHOLAND, Navigant Consulting ROBERT VAN BUSKIRK, Lawrence Berkeley National Laboratory WILLIAM H. YEADON, Yeadon Energy Systems

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 2 STAKEHOLDERS PRESENT: EMMANUEL AGAMLOH, Advanced Energy JOHN ANDRLE, Emerson Motor Company TIMOTHY BALLO, Earthjustice JEFF BARTH, A.O. Smith Corporation DALE A. BASSO, WEG Electric Corporation ROBERT B. BOTELER, Emerson Motor Company KITT BUTLER, Advanced Energy BELINDA CARR, Energetics, Inc. ROGER H. DAUGHERTY, Ph.D., Baldor DAIN M. HANSEN, NEMA TOM HINK, Regal-Beloit Corporation JOHN W. HOLT, National Rural Electric Cooperative Association EDWIN A. HORNQUIST, Southern California Edison WILLIAM HOYT, NEMA GLORIA PUMPUNI, Air-Conditioning, Heating, and Refrigeration Institute ALVIN M. RAZON, National Rural Electric Cooperative Association STEVEN J. ROSENSTOCK, Edison Electric Institute CHARLIE STEPHENS, Adjuvant Consulting DANIEL TROMBLEY, ACEEE MOLLY TROMBLEY-McCANN, Energy-Solutions

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 3 TABLE OF CONTENTS

AGENDA ITEM PAGE Welcome, Introductions, Opening............4 Statement Doug Brookman Rulemaking Overview.......................11 Michael Scholand Market & Technology Assessment and........23 Screening Analysis Michael Scholand Engineering Analysis.....................139 Matthew Nardotti Energy Use & End-Use Load................214 Characterization and Markup Analysis Robert Van Buskirk Life-Cycle Cost and Payback Period.......262 Analysis Robert Van Buskirk National Impact Analysis.................267 Robert Van Buskirk Preliminary Manufacturer Impact..........289 Analysis and Other Rulemaking Analyses Matthew Nardotti and Robert Van Buskirk Final Questions, Comments, and Discussion...............................320 Doug Brookman Closing Remarks and Adjournment..........324 Jim Raba

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 4 1 P-R-O-C-E-E-D-I-N-G-S 2 (9:04 a.m.)

3 PRESIDING OFFICER RABA: Good 4 morning and welcome back from yesterday. I 5 hope it was very informative and enlightening. 6 And certainly today we expect the same. 7 I will be the presiding officer 8 today. I am Jim Raba, Department of Energy. 9 We've got some new people here today, good to 10 see some faces that we didn't see yesterday to 11 add to the discussion, appreciate that. 12 We will do introductions shortly. 13 I just want to welcome you today. We will be 14 talking about standards work for small 15 electrical motors. 16 And, with that, again, we welcome 17 and turn to Doug Brookman, our facilitator for 18 today, who will then proceed with the meeting. 19 FACILITATOR BROOKMAN: Thank you. 20 WELCOME, INTRODUCTIONS, OPENING STATEMENT

21 FACILITATOR BROOKMAN: Good 22 morning, everybody. Doug Brookman, Public

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 5 1 Solutions, Baltimore. 2 It is our tradition to allow each 3 person to introduce him or herself. If you 4 would say your name and organization or 5 affiliation? Not all of this will show up on 6 the record. It is a matter of courtesy. 7 Please? And I am going to go around the room. 8 MR. BARTH: Jeff Barth, A.O. 9 Smith. 10 FACILITATOR BROOKMAN: Thank you. 11 MR. DAUGHERTY: Roger Daugherty, 12 Baldor Electric Company. 13 MR. BOTELER: Rob Boteler,

14 Emerson. 15 MR. HINK: Tom Hink, Regal-Beloit. 16 MR. BASSO: Dale Basso, WEG 17 Electric. 18 MR. HOYT: Bill Hoyt, National 19 Electrical Manufacturers Association. 20 MR. ANDRLE: John Andrle, Emerson. 21 MR. HANSEN: Dain Hansen, NEMA. 22 MS. PUMPUNI: Gloria Pumpuni,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 6 1 AHRI. 2 MR. TROMBLEY: Dan Trombley,

3 ACEEE. 4 MS. TROMBLEY-McCANN: Molly 5 Trombley-McCann, PG&E. 6 MR. STEPHENS: Charlie Stephens. 7 I'm representing the Northwest Energy 8 Efficiency Alliance. 9 MR. ROSENSTOCK: Steve Rosenstock, 10 Edison Electric Institute. 11 MR. HORNQUIST: Edwin Hornquist, 12 Southern California Edison. 13 MR. AGAMLOH: Emmanuel Agamloh, 14 Advanced Energy. 15 MR. BUTLER: Kitt Butler, Advanced 16 Energy. 17 MR. KIDO: Michael Kido, DOE. 18 PRESIDING OFFICER RABA: Jim Raba,

19 DOE. 20 FACILITATOR BROOKMAN: Thank you.

21 Please? 22 (Further introductions off the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 7 1 record.) 2 FACILITATOR BROOKMAN: And Michael

3 Scholand? 4 MR. SCHOLAND: Mike Scholand, 5 Navigant Consulting.

6 FACILITATOR BROOKMAN: So thanks 7 to all of you for being here on time so we got 8 an early start on the day. We will try and 9 push through today efficiently. I'm going to 10 do a very brief agenda review. And then we're 11 going to proceed with the meeting. 12 I hope all of you got a copy of 13 the pack as you walked in the door and 14 registered at the registration desk. You can 15 see we are doing the opening segment now. 16 We will move from here to a brief 17 rulemaking overview. From there, we will go 18 straight into market and technology assessment 19 and screening analysis. 20 Around about 10:15 or so, we will 21 take a break. Following that, we will have 22 more detailed description of the engineering

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 8 1 analysis, followed by energy use and end-use 2 load characterization and markup analysis. 3 We will take lunch midday, around 4 about noon. If we go faster than we 5 anticipate, we will just keep going. And we 6 will still observe the break times and the 7 lunch times. 8 Around about 1:00 -- and you're on 9 your own for lunch. We'll describe for those 10 of you who aren't familiar with the way it 11 gets done around here, we're going to get 12 lunch and all of that sort of thing when we 13 get there. 14 Around about 1:00 o'clock, we'll 15 continue with descriptions of life-cycle cost 16 analysis and payback period analysis, 1:30 17 national impact analysis, 2:00 o'clock 18 preliminary manufacture impact analysis and 19 other rulemaking analyses. 20 Around about 3:00 o'clock today, 21 we will take final questions, comments, and we 22 will have whatever discussion is necessary.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 9 1 There is this opportunity at the end of the 2 day for anybody to raise any additional issues 3 you might wish to raise or to emphasize at 4 that point in the meeting today. So that is 5 your opportunity. 6 We will have a few closing 7 remarks. We intend to adjourn around about 8 3:30 today. 9 Questions, comments about the 10 agenda? Any particular issues that don't fit 11 in this format that are important you think 12 you want to try and raise today? 13 (No response.)

14 FACILITATOR BROOKMAN: I see none. 15 Okay. So, then, with your consideration, I 16 will be doing everything I can to keep the 17 meeting moving along. I will be queuing 18 people to speak by name and also trying to 19 encourage discussion ongoing exchange. 20 I would ask for your 21 consideration. Please listen as an ally. Use 22 short, succinct statements to keep the point

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 10 1 moving. Please hold side bar conversations to 2 a minimum. If they're going to be more than 3 about 20 or 30 seconds, please take them 4 outside of the room. 5 I am going to be trying to 6 recognize you, as I said, by name. And so all 7 you need to do is look at me. And I will try 8 and fit you in the queue. 9 And if you would set your cell 10 phones on silent or vibrate now, that would be 11 helpful. 12 This meeting, this public meeting, 13 is on the record. There will be a complete 14 transcript of this meeting. And so if you 15 speak, if you would say your name? And I will 16 be recognizing you. 17 You don't need to say your 18 organizational affiliation as well. You can 19 just say, "John Doe," and that will be 20 sufficient for our record. 21 So, then, additional questions or

22 comments?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 11 1 (No response.) 2 FACILITATOR BROOKMAN: Okay. So 3 we provide, the Department provides, an 4 opportunity for anybody that wishes to make a 5 brief opening statement about issues that are 6 of concern to them, issues they would like to 7 emphasize, knowing that we will probably cover 8 them in much greater detail as the day goes 9 along. So there is an opportunity for that. 10 Sometimes people provide written 11 comments at the outset that they would like to 12 summarize for the record now. Anybody wish to 13 make a brief opening statement or should we 14 just jump right in? Jump right in? Is that 15 okay, everybody? Okay. We'll jump right in. 16 MR. SCHOLAND: Well, thank you, 17 Doug.

18 RULEMAKING OVERVIEW 19 MR. SCHOLAND: This is Mike 20 Scholand from Navigant Consulting. Good 21 morning, everyone. We are here today to talk 22 about the preliminary analysis as conducted

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 12 1 for the small electric motors, energy 2 conservation standard rulemaking. 3 The purpose of today's meeting is 4 to review the statute and DOE's actions for 5 small electric motors. We're going to present 6 DOE's preliminary analysis, which is on the 7 Web. And hopefully some of you have had a 8 chance to review some of that ahead of the 9 meeting. 10 I'm going to clarify any questions 11 that you might have about the Department's 12 approach. We're going to seek comment from 13 you guys on the analysis to date, any new data 14 sources and other recommendations you may have 15 moving forward; and, finally, discuss the next 16 steps for the rulemaking. That's our purpose. 17 And, as you'll find in the 18 presentations which you have, there are issue 19 boxes that are contained through the slides. 20 These are the issues that are sort of key 21 issues the Department wants to make sure it 22 gets comment on from stakeholders.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 13 1 All of the analysis that is 2 published is open for comment and the 3 Department would like comment on, but there 4 are certain key issues which the Department 5 sees as sort of a higher priority to make sure 6 that it definitely gets feedback on. So 7 you'll find these in issue boxes. 8 And what will happen during the 9 presentation, when we get to these issue 10 boxes, we'll stop. And Doug will open the 11 floor. And we'll make sure that people have a

12 chance to comment. 13 So the first section here, I'm on 14 slide 7, small electric motors. I just want 15 to review the statutory language behind the 16 Department's authority. 17 As you may be aware, the Energy 18 Policy Act of 1992 amended EPACT to direct DOE 19 to prescribe energy conservation standards for 20 those small electric motors for which the 21 Secretary determines that standards "would be 22 technologically feasible and economically

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 14 1 justified and would result in significant 2 energy savings." 3 DOE did conduct that analysis. 4 The Secretary did make a positive 5 determination, which was published July 10th

6 of 2006. 7 As a consequence of that positive 8 determination, DOE initiated concurrently both 9 a test procedure and an energy conservation 10 standards rulemaking for small electric

11 motors. 12 The energy conservation standards 13 rule was initiated with a framework document 14 that some of you attended the kickoff meeting. 15 That was published August 10th of 2007. I 16 think the meeting was in September of '07. 17 And DOE is, as you are aware -- 18 many of you were at the meeting yesterday. 19 DOE is conducting a separate rulemaking to 20 establish test procedures for measuring the 21 efficiency of small electric motors. That 22 NOPR was published December 22nd of 2008. And

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 15 1 the comment period is open right now and is 2 open through March 9th. 3 Any questions on the statutory 4 language or DOE's actions? 5 (No response.) 6 MR. SCHOLAND: This is a little 7 flow diagram to help you visualize the energy 8 conservation standards rule, which we're 9 discussing today. 10 There is a framework document 11 stage, a preliminary analysis, a NOPR stage, 12 and a final rule stage. And DOE publishes 13 Federal Register notices in those four little 14 chevrons, which you can see. 15 Today DOE is right in the middle 16 of that flow, having completed its preliminary 17 analysis that published a Federal Register 18 notice in December last year to announce the 19 availability of that data for comment in 20 today's public meeting. 21 Steve, a question?

22 MR. ROSENSTOCK: Yes. Steve

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 16 1 Rosenstock, Edison Electric Institute. 2 So since I have been to many 3 rulemakings, this is kind of under the new 4 process, there is not going to be an advance 5 notice of proposed rulemaking, correct? 6 MR. SCHOLAND: That's correct, 7 Steve. Yes, yes. 8 MR. ROSENSTOCK: Thank you. 9 PRESIDING OFFICER RABA: Jim Raba,

10 DOE. 11 Actually, the new process replaces 12 that. The information is all there in the 13 technical support document, executive summary 14 and chapter 2. But, nevertheless, we proceed 15 this way to meet the new process. 16 MR. ROSENSTOCK: Thank you. Steve 17 Rosenstock. Thank you. 18 MR. SCHOLAND: And so I just have 19 a couple of bullets there that there are 20 public meetings and oral comments, which are 21 contributed through the end of the NOPR stage. 22 That's represented by the green chevron.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 17 1 Written comments and Federal 2 Register notices, technical support documents 3 and analytical spreadsheets are all posted for 4 review. And, finally, DOE always welcomes 5 data input from manufacturers and other 6 interested parties. 7 So this little flow diagram shows 8 you as we break down those flow pieces, what 9 is contained in today's discussion. Today 10 we're talking about DOE's preliminary 11 analysis. And, as Doug did the review of the 12 agenda, he read out all of these things.

13 These are all of the chevrons that 14 represent the analyses that will be discussed 15 today. So I won't bore you with it, but

16 that's the overall flow. 17 The next stage of the rulemaking, 18 the notice of proposed rule, DOE will revise 19 the analyses on the previous slide and then 20 will also conduct new analyses that help it 21 weigh out the seven factors in EPACT for 22 determining and proposing a standard level for

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 18 1 public review. 2 So that gives you all of the 3 different pieces. Fourteen analyses and two 4 reports are needed for the Department to move 5 forward during a standard. 6 And then, finally, the final rule 7 stage, based on comments that DOE receives on 8 the NOPR, it will revise the NOPR analyses and 9 make a final decision and publish a final

10 rule. 11 This next slide is sort of a 12 little schedule to help you visualize on a 13 time line how small electric motors are going 14 to be covered and analyzed. 15 The Federal Register notice was 16 published on December 30th of last year. So 17 we are at this dot right here, NOPM and 18 Preliminary TSD. That actually should say 19 "preliminary analysis" on that dot. So we're 20 at the second blue diamond moving along the 21 time line. 22 Then the NOPR is scheduled to be

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 19 1 published in July of 2009 approximately. And 2 the final rule date is February of next year,

3 so 13 months from now.

4 Steve Rosenstock? 5 MR. ROSENSTOCK: Again, sorry. I 6 was unable to make yesterday's meeting. Is 7 the test procedure basically the same time 8 line as the conservation standard? 9 MR. SCHOLAND: Thank you, Steve, 10 for that question. 11 No. The test procedure will be 12 final, is scheduled to be final, on June 30th 13 of 2009. So the test procedure, which gives 14 you the metric by which you establish the 15 standard, must be final before the NOPR stage 16 of a product. So, hence, getting it done in 17 June enables the Department to have a NOPR in 18 July for the energy standard. 19 MR. ROSENSTOCK: Thank you. 20 MR. SCHOLAND: Okay. And in the 21 statute, there was a five-year minimum 22 effective date for small electric motors. So

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 20 1 the regulations established in February 2010 2 would become effective in February 2015. 3 Okay? 4 Any questions at all on the 5 statute, time line, DOE's rulemaking stages?

6 Yes? 7 MR. HINK: Tom Hink, Regal-Beloit. 8 This 2015 date is different than 9 the pervious date you gave us the last time we 10 visited. Isn't that correct? 11 MR. SCHOLAND: That's absolutely

12 correct. The framework document had three 13 years. And when we reviewed the statute again 14 with general counsel, it is actually five 15 years for certain motors. And motors that 16 have certain requirements, I think it's seven 17 or eight years. It's slightly longer. So 18 it's at least five years, yes. Thank you for

19 that. 20 FACILITATOR BROOKMAN: Yes, 21 please? 22 MR. DAUGHERTY: Roger Daugherty.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 21 1 I just mentioned I think that you 2 will see as we go through the discussion today 3 that in the number of analyses that you have 4 done, one that you have omitted is an analysis 5 on the final application and the impact that 6 these changes in motor designs might have on 7 the application. I think that will become 8 very clear as you go through the day. 9 MR. SCHOLAND: Can you say more 10 about the nature of the application? Say more

11 about that. 12 MR. DAUGHERTY: Roger Daugherty. 13 My point is that when you try to 14 increase the efficiency of a motor, you may 15 change its physical package. And you need to 16 look at the application to the end user, 17 whether or not that will be acceptable for use 18 in that application, because you could end up 19 with something that if you impose the 20 requirement of the higher efficiency motor, 21 you will make his application obsolete. You 22 will have to redesign. Those who are looking

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 22 1 for replacement motors may become a hindrance 2 because they will have to scrap their entire 3 equipment just because they can't replace that

4 motor. 5 MR. SCHOLAND: Okay.

6 MR. DAUGHERTY: So end user 7 application can have a very significant 8 impact. And that is missing from all of your 9 analyses here. 10 MR. SCHOLAND: Jim Raba? 11 PRESIDING OFFICER RABA: Jim Raba,

12 DOE. 13 It's a good thing you brought up, 14 Roger. I understand that this is only the 15 beginning of our analyses, preliminary. We 16 have more stages to go. And much of that will

17 be addressed. 18 The manufacturer impact analysis 19 was to come later, which is part and parcel to 20 what you're saying about manufacturers, the 21 process, and the motors in the applications to 22 fit the needs of the users.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 23 1 So that will be coming up. I'm 2 glad you brought it up at this time. And I 3 will be taking a look at that as a matter of 4 course in the next round.

5 FACILITATOR BROOKMAN: Robert?

6 MR. VAN BUSKIRK: Yes. Robert Van 7 Buskirk, Lawrence Berkeley. 8 Typically in analyses for the 9 Department, the impacts on applications for 10 the end user are addressed in the life-cycle 11 cost analysis. So the consequences you just 12 described incur economic costs on the end 13 user. And those economic costs can be 14 incorporated as factors in the consumer 15 life-cycle cost analysis. So the Department 16 looks forward to your input in that portion of 17 the discussion. 18 MR. SCHOLAND: All of which will 19 be described in much greater detail. Okay? 20 All right. Thank you, Doug.

21 MARKET & TECHNOLOGY ASSESSMENT AND

22 SCREENING ANALYSIS

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 24 1 MR. SCHOLAND: Now, this next 2 section of the slides is the market and 3 technology assessment, the screening analysis 4 and engineering analysis. I'm only going to 5 speak about the market/tech and screening. 6 And then we will depending on time take a 7 break, coffee break.

8 Then Rob Boteler from Emerson 9 Motor will get up and present a couple of 10 slides about the engineering of small electric 11 motors. And then I'll switch over to my 12 colleague Matt Nardotti will present the 13 engineering analysis. So that's our game plan 14 for this section.

15 So let's talk about the market 16 assessment. What is a market assessment? The 17 purpose of a market assessment is to 18 characterize the small electric motors market 19 and manufacturers and to determine appropriate 20 equipment classes. 21 The forks, or key tasks, that the 22 Department of Energy published in the market

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 25 1 assessment are to: one, try and clarify the 2 scope of coverage for what is a small electric 3 motor; second, to identify and characterize 4 manufacturers of small electric motors; 5 thirdly, to classify covered products into 6 appropriate equipment classes -- I'll talk 7 later about why that is important -- and, 8 finally, to use historical shipment data that 9 NEMA had provided for the determination 10 analysis to generate an estimate of shipments 11 for the current analysis. 12 So let's begin by discussing the 13 scope of coverage. This definition you may be 14 familiar with. It's from the statute. It's 15 the definition of a small electric motor, 16 which reads a "NEMA," which is the National 17 Electrical Manufacturers Association, "general 18 purpose alternating current single speed 19 induction motor built in a two-digit frame 20 number series in accordance with NEMA 21 standards publication MG1-1987." 22 So, in order to more clearly

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 26 1 understand the scope, DOE sought to clarify 2 three terms that are contained in that 3 definition: general purpose alternating 4 current as one; induction motor as a second; 5 and two-digit frame number series as a third. 6 So we're just going to drill down 7 one slide on each of those three terms. So 8 for general purpose alternating current, this 9 is a NEMA term that is used in MG1-1987 for 10 alternating current motors that are not 11 designed with a specific application in mind. 12 Okay? So it's not a definite purpose motor, 13 which would be a motor designed for the 14 specific application. 15 Paragraph MG1-1.05 from MG1-1987 16 defines the term as reads on this slide. I 17 won't read you the whole thing, but you can 18 see this is the scope. It's essentially rated 19 up to 200 horsepower and less, which obviously 20 small motors don't go that high. 21 Open construction is the only type 22 here, general purpose. So that removes

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 27 1 enclosed construction, rated for continuous 2 duty service factor in accordance with MG1, 3 paragraph 12-47, and two insulation classes, 4 Class A insulation as specified in MG1 12-42 5 for small motors; and then Class B, which 6 doesn't apply because that is for medium

7 motors. 8 So it is designed in standard 9 ratings with standard operating 10 characteristics and mechanical construction 11 reduce under usual service conditions without 12 restriction to a particular application or 13 type of application. So this whole sub-bullet 14 is the definition of general purpose 15 alternating current in MG1.

16 FACILITATOR BROOKMAN: Rob? 17 MR. BOTELER: Rob Boteler,

18 Emerson. 19 I would just like to comment on 20 one thing. In the definition where we say 21 it's not designed for a specific application, 22 that doesn't mean that it's not sold and

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 28 1 applied into a specific application. I think 2 that's a point that we're going to talk about 3 later because when we build this product and 4 sell it to the OEM community that is building 5 various pieces of equipment -- and open 6 motors, a lot of times they don't go into 7 industrial equipment, but they may go into 8 medical equipment. 9 There is a very specific 10 performance that our customer is looking for, 11 not only efficiency but also the torque 12 characteristics and whether it can handle the 13 load and starts and stops and all the various 14 other things that are involved with the motor. 15 So even though it's perhaps not 16 designed for a specific application, it is 17 actually sold for a specific application. And 18 there is a very specific criteria that our

19 customer has when we sell that motor. 20 FACILITATOR BROOKMAN: Do you 21 think what is written here is not sufficient? 22 MR. BOTELER: I think what is

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 29 1 written here, I believe what is written here, 2 is being lifted right off of -- 3 FACILITATOR BROOKMAN: Right out

4 of the NEMA. 5 MR. BOTELER: Right. But I think 6 it needs to have the clarification that, like 7 I say, while it's not designed for a specific 8 application, it actually is used and applied 9 in a specific application. 10 FACILITATOR BROOKMAN: Okay. 11 Thank you. 12 PRESIDING OFFICER RABA: Jim Raba,

13 DOE. 14 That's a good point you bring up, 15 Rob. Understand, too, that, really, the 16 statute goes to manufactured. And so the 17 applications could be many-fold. I think

18 we're concerned about we don't know where the 19 motor is going. 20 And even though a motor perhaps 21 would be used in medical applications and have 22 particular performance characteristics, it

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 30 1 could also find its way into the open market

2 and be used elsewhere. 3 I think in the current 4 regulations, appendix A to subpart B of 10 CFR 5 part 31 describes guidelines that, 6 understandably, some motors, though they look 7 like -- well, they have certain 8 characteristics. For example, wash-down 9 motors may be all stainless steel, but they 10 still could be used in general purpose 11 applications. 12 That should be more clarified. 13 And we would like to get more of industry's 14 views on that. But we may be constrained by 15 what we can do by our authority, too. 16 So we would like to hear from 17 everybody at the table to see how people feel 18 about that, too, for the record. 19 FACILITATOR BROOKMAN: As we go 20 along, yes. 21 Roger? 22 MR. DAUGHERTY: Roger Daugherty.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 31 1 Just a slight clarification on 2 that. The very first item in this bullet that 3 is referring to a specific application is an 4 interpretation by DOE. That is not part of 5 this definition that's in NEMA MG1. 6 FACILITATOR BROOKMAN: So are you 7 okay with that interpretation? 8 MR. DAUGHERTY: Roger Daugherty. 9 I think, as you have just read, 10 Rob was trying to make the point that that may 11 not be an appropriate interpretation. 12 FACILITATOR BROOKMAN: Okay. 13 Thank you. 14 PRESIDING OFFICER RABA: Jim Raba,

15 DOE. 16 Which bullet is that, please? 17 MR. DAUGHERTY: The very first. 18 It says, "A NEMA term used in MG1-1987 for 19 alternating current motors that are not 20 designed with a specific application in mind." 21 PRESIDING OFFICER RABA: Okay. So 22 that is on slide 17. Thank you.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 32 1 FACILITATOR BROOKMAN: Okay.

2 Thanks for those comments. 3 MR. SCHOLAND: I guess I am just 4 looking at the very last statement on that 5 page, Roger, "designed in standard ratings," 6 dot dot dot, "without restriction to a 7 particular application or type of 8 application." And I think, you know, perhaps 9 we should have used exactly that phrase in 10 that first bullet, rather than to say, 11 "designed with a specific application in 12 mind." 13 PRESIDING OFFICER RABA: Jim Raba 14 again for DOE. 15 It's a good point you raise in 16 their interpretation, DOE. However, again, we 17 don't know where these motors are going to be 18 going. So we would like everybody to weigh in 19 on that, too, that as their manufacture could 20 be used in general purpose application, that 21 was more the mind set. 22 We bring up a specific design or

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 33 1 application in mind. That might be something 2 that we would like to hear more comments from 3 the table on that particular point. Thank you 4 very much. 5 FACILITATOR BROOKMAN: Yes, Rob? 6 MR. BOTELER: Yes. I think we 7 have to realize historically we have talked 8 about IHP, integral horsepower, motors, where 9 we do sell a general purpose motor that goes 10 into a broader market, goes through the 11 distribution channel. 12 When we get into fractional 13 motors, by and large, everything we build and 14 sell goes to an OEM for a specific 15 application. And for many of us, the 16 aftermarket isn't even served through 17 distribution. We sell the motor back to the 18 OEM. When you need a motor for your 19 ice-maker, you don't call us. You call the 20 guy you bought the ice-maker from. And that 21 becomes very, you know, specific to his 22 application.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 34 1 So the term "general purpose" is 2 very different in how the fractional product 3 goes to market than the integral part. The 4 way we sell product is very different because 5 we really have a very, very small amount of 6 our business that is sold directly into the 7 distribution market in this category. The 8 very bulk of it goes back to the OEM, and the 9 OEM then sells that to his customer. 10 FACILITATOR BROOKMAN: Okay. 11 Thanks for that clarification. 12 MR. SCHOLAND: On the next slide, 13 we discuss the term "induction motor." 14 Induction motor is a motor that converts 15 electrical power into rotational mechanical 16 power using electromagnetic induction for its 17 operation and has one or more component 18 members capable of rotary movement. 19 Now, the statute requires that 20 small motors be built in accordance with 21 MG1-1987. And MG1-1987 has five categories of 22 induction motors, which are split-phase;

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 35 1 shaded-pole; capacitor-start, which includes 2 both capacitor-start induction-run and 3 capacitor-start capacitor-run; permanent-split 4 capacitor; and polyphase. Those are the five 5 categories. 6 DOE has come to the preliminary 7 conclusion at this stage of its analysis that 8 the capacitor-start induction-run, the 9 capacitor-start capacitor-run, and the 10 polyphase motors are the only categories that 11 meet the statutory requirements. 12 And the reason that split-phase 13 don't meet them is that those are designed for 14 specific purposes and applications. DOE is 15 unaware of any general purpose split-phase 16 motors that have been built. 17 And, secondly, shaded-pole and 18 permanent-split capacitor motors fail to meet 19 the torque requirements for general purpose 20 motors, which is in NEMA MG1-1987, paragraph

21 12-32. 22 Could we discuss induction motors

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 36 1 now, please? Thanks. 2 FACILITATOR BROOKMAN: Yes. Is it 3 Holly? 4 MS. TROMBLEY-McCANN: Molly. 5 FACILITATOR BROOKMAN: Molly, 6 please? 7 MS. TROMBLEY-McCANN: So it sounds 8 like you're saying that -- 9 FACILITATOR BROOKMAN: Molly, say 10 your name, please. 11 MS. TROMBLEY-McCANN: Oh, sorry. 12 Molly Trombley-McCann. 13 It sounds like you're saying that 14 shaded-pole and PSC motors don't qualify as 15 general purpose motors, but they're included 16 in the NEMA MG1 standard for general purpose

17 motors. So what does that mean? 18 MR. SCHOLAND: Mike Scholand. 19 There are torque requirements for 20 meeting the definition of a general purpose 21 motor, right? And those torque requirements 22 are in MG1 and in table 12-32. And the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 37 1 shaded-pole and permanent-split capacitor 2 motors cannot achieve those torque 3 requirements. And so, for that reason, they 4 cannot be considered as small electric motors. 5 FACILITATOR BROOKMAN: Let's go to 6 Jim Raba and coming back to you, Steve. 7 PRESIDING OFFICER RABA: Jim Raba,

8 DOE. 9 Point of information, too. Good 10 you raise that at this time, that comment. A 11 little bit of background. The determination, 12 the final determination, goes into great 13 detail about the analysis that was performed 14 as to what motors presumably are covered under 15 this determination, this rulemaking, what were

16 not. 17 And they were screened out because 18 of what Mike said before about the electrical 19 and torque performance characteristics, that 20 it was found that the scope at that time, the

21 motors that were covered under all of the 22 elements of general purpose and other

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 38 1 requirements under the NEMA definition boiled 2 down to basically the capacitor-start 3 induction-run, capacitor-start capacitor-run, 4 and polyphase 2 digit NEMA frames. So that is 5 kind of where that happened.

6 So a lot of that has been covered. 7 But, again, I am glad you raised it. This 8 could be opened up, if need be, for further

9 comments. 10 FACILITATOR BROOKMAN: Steve,

11 let's let John follow on. John?

12 MR. ANDRLE: John Andrle. 13 In general, split-phase motors 14 also do not meet the torque requirement of 15 that same standard. And, like the shaded-pole 16 and PSC motors or the PSC and shaded-pole 17 motors also are designed specifically for very 18 specific applications. So, I mean, those two 19 or three categories all are very similar in

20 that. 21 FACILITATOR BROOKMAN: Okay. 22 Let's let the manufacturers continue on here.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 39 1 Please, Roger? 2 MR. DAUGHERTY: Roger Daugherty. 3 To try to answer your question 4 very directly with regards to the NEMA 5 standard, under the definition of a small 6 general purpose motor, it references a torque 7 table of 10-5. That torque table is for 8 motors other than shaded-pole and 9 permanent-split. 10 Then there is a different table of 11 torque capabilities for those type of motors 12 in table 10-6. So within the NEMA standard, 13 those motors are not classified as general 14 purpose. 15 FACILITATOR BROOKMAN: Thank you. 16 Okay. 17 MR. SCHOLAND: Excuse me, Roger. 18 Can you clarify? That is MG1-1987 you're 19 discussing, correct?

20 MR. DAUGHERTY: The reference for 21 all the pages I have with me are the newest 22 edition, but if you go back, while maybe a

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 40 1 table number changes, if you read the 2 appropriate paragraph, then you'll find the 3 definite reference. I still think it's 10-5, 4 but it may have changed. 5 MR. SCHOLAND: Okay. I've got a 6 copy here, and I'll check during the break. 7 FACILITATOR BROOKMAN: Okay.

8 Steve Rosenstock?

9 MR. ROSENSTOCK: Steve Rosenstock. 10 Yes. I'm just kind of curious about the 11 scale of the difference between the torque 12 requirements. You know, are they within ten 13 percent or is there a factor or a magnitude of 14 two or three? I'm just kind of -- I haven't 15 reread the determination lately. Sorry. 16 MR. SCHOLAND: Steve, I'll get 17 back to you on that one -- thank you -- 18 MR. ROSENSTOCK: Okay. Thank you.

19 MR. SCHOLAND: -- unless the

20 manufacturer wants to comment. 21 MR. ANDRLE: We can certainly give 22 you --

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 41 1 FACILITATOR BROOKMAN: John, 2 please say your name. 3 MR. ANDRLE: John Andrle. Sorry. 4 We can give you specifics, 5 obviously. You can look at the table 6 yourselves. Well, the table is for the 7 general purpose, but in general, the magnitude

8 could be --

9 FACILITATOR BROOKMAN: You're 10 going to speak up if you can't hear, right? 11 Okay. 12 MR. ANDRLE: The magnitude could 13 be greater than 50:1 kind of deal. 14 MR. ROSENSTOCK: Thank you. 15 FACILITATOR BROOKMAN: Let's go 16 back to Roger here. 17 MR. DAUGHERTY: Roger Daugherty. 18 If I just use an example that is 19 out of the present standard for the table 20 10-5, which relates to the capacitor-start 21 motors and capacitor-start capacitor-run and 22 capacitor-start induction-run, for the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 42 1 one-half horsepower motor of the 4-pole motor 2 at 60 hertz, the required breakdown torque is 3 between 40 and a half and 58. I believe 4 that's in ounce-feet. 5 But when you get to the 6 permanent-split capacitor motors under that 7 standard, the number ranges from 31 and a half 8 to 47 and a half. So, as was just pointed 9 out, that for the general purpose motor is 10 significantly greater than it is for the 11 permanent-split. So the permanent-split could 12 not be used in the application if those 13 torques are a requirement of that application. 14 FACILITATOR BROOKMAN: Yes, 15 please, John?

16 MR. ANDRLE: John Andrle. 17 And one further clarification. 18 Probably the most important -- obviously the 19 breakdown torque is important, but the locked 20 rotor torques are significantly less on a PSC 21 and shaded-pole motor and probably at least 50 22 percent less on a split-phase motor than on

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 43 1 capacitor-start or capacitor-start 2 induction-run. 3 FACILITATOR BROOKMAN: Thank you. 4 I'm starting to look forward to Rob's brief 5 tutorial, which will come later. 6 (Laughter.) 7 MR. BOTELER: Don't oversell it. 8 (Laughter.) 9 FACILITATOR BROOKMAN: He said he 10 only had two slides. We may need more. Okay. 11 Additional comments on scope of 12 coverage? This is important. Additional 13 comments? Yes, please? 14 MR. HORNQUIST: Yes. Edwin 15 Hornquist, Southern California Edison.

16 Just John's comment from Emerson 17 regarding the polyphase, I believe that the 18 IEC specifically calls out the polyphase under 19 subsection -- well, under type II, subtype II.

20 FACILITATOR BROOKMAN: Rob? 21 MR. BOTELER: Rob. You have just 22 moved into integral horsepower motors when you

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 44 1 go into subtype I and II. We are only talking 2 about fractionals today. 3 MR. SCHOLAND: Thank you. 4 Appreciate that.

5 FACILITATOR BROOKMAN: It almost 6 seems like we should have some graphic display 7 for this. You know what I'm saying?

8 MR. SCHOLAND: Yes.

9 FACILITATOR BROOKMAN: It's 10 complicated enough. We should be able to kind 11 of find some way to -- 12 MR. SCHOLAND: Visualize this?

13 FACILITATOR BROOKMAN: Yes. 14 Thanks for keeping us on track here. This is 15 useful. Okay. 16 MR. SCHOLAND: Just a point of 17 information. I have looked at the MG1-1987

18 document. And the tables are the same 19 numerical numbers as they are in the 2006 20 edition. 21 Table 10-5 is induction motors 22 except standard shaded-pole and

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 45 1 permanent-split capacitor motors. And table 2 10-6 is shaded-pole and permanent-split 3 capacitor motors for fan and pump 4 applications. So it's the same. We confirm

5 that.

6 FACILITATOR BROOKMAN: Are we 7 ready to move on? Yes, please? And your name 8 is?

9 MR. AGAMLOH: Emmanuel. Emmanuel 10 Agamloh. 11 I have a quick question on the 12 coverage. So does it mean that if a 13 manufacturer puts out a half-horse 14 capacitor-start capacitor-run motor now and 15 later in future years he has an insulation 16 Class F, for some reason, they decide to put 17 out an insulation Class F, is it a covered 18 product or not covered? Because I see that 19 you limit the definition of general purpose to 20 insulation Class A and B. 21 FACILITATOR BROOKMAN: First, say 22 what insulation Class F is. Michael?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 46 1 MR. SCHOLAND: Well, these are 2 different classes for the insulation and the 3 windings to handle certain temperatures. 4 FACILITATOR BROOKMAN: Okay.

5 MR. SCHOLAND: And we would 6 appreciate your comments. The Department 7 would appreciate your comments on your 8 interpretation. What insulation classes 9 should be included in its interpretation of 10 coverage? 11 FACILITATOR BROOKMAN: Can you say 12 now? Do you have a leaning whether it should

13 be covered or not? 14 MR. AGAMLOH: I think it should be 15 covered because the activity, the time line 16 that you showed us in your opening slides goes 17 into 2016 or so. And every year insulation 18 prices come down. And F is widely used now in 19 most general purposes motors and absent in 20 some single-phase motors, too, and although it 21 might be a specific purpose. So I think it

22 should be covered.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 47 1 FACILITATOR BROOKMAN: Michael 2 Kido? 3 MR. KIDO: Michael Kido, DOE. 4 We certainly appreciate that 5 comment. And to the extent that you submit 6 any written comments on that issue -- and this 7 is sort of a general observation for any other 8 comment that folks might have -- please 9 provide us with some detailed explanation for 10 your basis for that view. And to the extent 11 that you can provide any supporting data, that 12 would be extremely helpful. 13 FACILITATOR BROOKMAN: Thank you. 14 Other issues that people want to 15 raise with respect to coverage? Please? 16 MR. BALLO: Tim Ballo with 17 Earthjustice. 18 If we could back up to slide 16 19 very quickly? That language there, the 20 statutory definition of a small electric 21 motor, there are two reasonable 22 interpretations of that provision. DOE has

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 48 1 taken the position tentatively that in 2 accordance with NEMA publication MG1-1987 3 applies to the entire provision. 4 However, it's also perfectly 5 reasonable to read that as the '87 version of 6 the NEMA standard only applies and modifies 7 everything after the comma. 8 In other words, the NEMA 9 publication MG1-1987 is only relevant for 10 determining the two-digit frame number series. 11 And DOE is free to expand coverage and 12 interpret general purpose alternating current 13 and induction motor differently than they are 14 expressed in MG1-1987. 15 We are obviously not very happy 16 with the scope of coverage of this rulemaking. 17 DOE is proposing to cover something like five 18 to ten percent of small motors. Interpreting 19 the statute this way would enable the 20 Department to expand the scope of coverage. 21 At the very least, my 22 understanding is it would get at the issue of

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 49 1 enclosed motors, which if I read the 2 preliminary TSD correctly, MG1 now covers 3 enclosed motors. So it would potentially 4 close the statutory loophole. And I encourage 5 the Department to look again at how it 6 interprets this provision.

7 FACILITATOR BROOKMAN: You'll 8 include your interpretation in your written 9 comments for the Department's use. 10 Roger? 11 MR. DAUGHERTY: Roger Daugherty. 12 I would just like to point out 13 that what was omitted in the present 14 discussion was the very first word of the 15 definition is "NEMA." It says that it's a 16 NEMA general purpose motor. 17 MR. BALLO: Tim Ballo, 18 Earthjustice again. 19 NEMA general purpose motor does 20 not necessarily require it to be NEMA MG1-1987 21 definition of a general purpose motor. If the 22 Department wants to look at a more current

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 50 1 version of MG1, we would encourage them to do

2 that. 3 FACILITATOR BROOKMAN: Thank you. 4 Additional comments on that 5 definitional issue related to scope of 6 coverage before moving on, the scope of 7 coverage issues? 8 (No response.) 9 FACILITATOR BROOKMAN: Okay, 10 Michael. 11 MR. SCHOLAND: Okay. I'm on slide 12 19, talking about two-digit frame number 13 series. This is essentially the physical size 14 of a small electric motor. For small electric 15 motors, it is the D dimension in inches 16 multiplied by the number 16. 17 The D dimension is measured from 18 the center line of the shaft to the bottom of 19 the mounting feet or foot. And, for example, 20 a 48-frame motor would have a D dimension of 3 21 inches, which would be 16 times 3 plus 48. 22 So standard dimensions enable sort

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 51 1 of ease of replacement for motors. That's the 2 intent behind it. The covered motors in the 3 Department's interpretation of the scope of 4 coverage here are only 42, 48, and 56-frame 5 motors. And the reason for that is that 6 MG1-1987 only gives standard dimensions for 7 these 3 frame sizes. 8 There are some other 2 different 9 frame sizes; for example, a 66-frame, but 10 that's likely to be a definite purpose motor 11 or special purpose motor and unlikely to be 12 used in general purpose applications. 13 FACILITATOR BROOKMAN: Roger? 14 MR. DAUGHERTY: Roger Daugherty. 15 I think, once again, as we 16 discussed in yesterday's meeting, it is very 17 important to recognize that there are 18 equivalent IEC motors that are brought into 19 the U.S. in accordance with IEC standards and 20 that, therefore, it is certainly desired that 21 those motors also fall under any rulemaking 22 and any standards.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 52 1 FACILITATOR BROOKMAN: Thank you. 2 MR. SCHOLAND: Actually, the next 3 slide is our first issue for comment. 4 FACILITATOR BROOKMAN: So, Roger, 5 let me ask you, Roger, to follow up. I wasn't 6 here yesterday. So how does that get 7 achieved? How do the IEC-rated motors fit? 8 MR. DAUGHERTY: Roger Daugherty. 9 Well, what happened was, remember, 10 we're dealing with a law that was passed in 11 1992. And at the same time that this part on 12 small motors was passed, there was also the 13 part on the integral horsepower motors, one to 14 200 horsepower.

15 FACILITATOR BROOKMAN: Let me ask 16 you this. So does that address Tim's concerns 17 about scope of coverage?

18 MR. DAUGHERTY: No. 19 FACILITATOR BROOKMAN: Okay. 20 Sorry to take you off track. Keep going. 21 MR. DAUGHERTY: Okay. Roger 22 Daugherty continuing.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 53 1 So during the rulemaking process 2 on the integral horsepower motors, the 3 Department of Energy did recognize that there 4 were equivalent IEC motors of similar ratings, 5 similar dimensions that were being brought 6 into the U.S. for use and made a determination

7 that those should also be covered. 8 So within 10 CFR parts 4 through 9 31, as they adopted the definition of electric 10 motor that was in EPACT, they expanded that 11 definition to also include not only NEMA 12 T-frame but also IEC frame number series. 13 They adopted the use of a kilowatt 14 rating, in addition to the horsepower rating 15 that is used in the U.S. and any similar 16 relationships between IEC and NEMA motors so 17 that now any motor that fit within the 18 integral horsepower, whether it be in a 19 kilowatt or a horsepower rating and whether it 20 be in an IEC frame size or a NEMA frame size, 21 those are considered covered motors and must 22 comply with the standards.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 54 1 So we were only asking that that 2 same determination be made with respect to IEC 3 motors when writing the standards for small

4 motors. 5 FACILITATOR BROOKMAN: Jim Raba? 6 PRESIDING OFFICER RABA: Jim Raba,

7 DOE. 8 The Department would appreciate 9 any comments on that and, actually, data or a 10 comparison chart or an equivalency chart of 11 the ratings, the frame size, and the like to 12 see, actually, for the record how these 13 compare. And if there's a side by side, we 14 can examine it more carefully. 15 So we would appreciate any data or 16 information or, as I say, comparison 17 equivalents that anybody would like to put

18 forward on that. 19 FACILITATOR BROOKMAN: Did you 20 have any follow-up questions that would 21 clarify this further or are you okay? 22 MR. SCHOLAND: I'm okay. Later in

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 55 1 this slide when we present equipment classes, 2 you will see the IEC ratings. 3 FACILITATOR BROOKMAN: So this box 4 on slide 20 request for comments is about the 5 preceding four or five slides, all related to 6 scope of coverage. 7 Additional, perhaps final comments 8 on this series? Yes, please, Molly? 9 MS. TROMBLEY-McCANN: Molly 10 Trombley-McCann. 11 As Tim stated earlier, the covered 12 motors at this point constitute about five to 13 ten percent of the whole market. We are 14 wondering if you have an estimate of the 15 percentage of energy use that that accounts 16 for in terms of all energy use by small motors 17 in the country. 18 MR. SCHOLAND: Well, we will be 19 presenting the preliminary analysis and the 20 national impacts. 21 MS. TROMBLEY-McCANN: So that is 22 going to come later?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 56 1 MR. SCHOLAND: Yes. 2 MS. TROMBLEY-McCANN: Okay. I 3 just wondered.

4 MR. SCHOLAND: Robert has the

5 number for that. 6 FACILITATOR BROOKMAN: Jim Raba?

7 PRESIDING OFFICER RABA: Yes. 8 Again Jim Raba, DOE. 9 A lot of that was covered in the 10 determination analysis that was published, but 11 we will go over that again today. Thank you. 12 Good review. 13 FACILITATOR BROOKMAN: Okay. 14 Thank you. 15 MR. SCHOLAND: Next I am going to 16 talk about manufacturers of small electric 17 motors. The Department understands that 4 18 manufacturers account for more than 90 percent 19 of the domestic market. They are A. O. Smith, 20 Baldor Electric, Emerson Motor, and 21 Regal-Beloit. 22 All are members of NEMA, as far as

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 57 1 we understand. And they all have diverse 2 portfolios of products, including many other 3 categories of electric motors and related 4 electrical equipment and switchgear. 5 I guess a question here is, who 6 are the competitors not listed? Are there

7 others that we should be aware of and 8 analyzing as well.

9 FACILITATOR BROOKMAN: Rob?

10 MR. BOTELER: Rob Boteler. 11 We would certainly also include 12 WEG, who is represented here today. WEG is 13 also a member of NEMA. I think one thing you 14 have to be careful of when we say this is 90 15 percent of the domestic market share, I think 16 that we would tell you that that is of the 17 product produced in the U.S. because when we 18 get to the fractional product, one of the 19 things we realize is there is a very 20 significant amount that is embedded in 21 equipment coming from offshore, whether it be 22 Asia or from Europe.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 58 1 And that is one of the reasons why 2 we have raised the issue about IEC product 3 because we know there is a lot of product that 4 comes in from Italy and Germany that is IEC 5 that doesn't necessarily meet these 6 requirements.

7 One of our concerns that we are 8 going to voice later is enforcement and how 9 DOE proposes to enforce that we are not 10 putting the American manufacturers at a very 11 distinct disadvantage because we are forced to 12 comply with the regulation and the offshore 13 manufacturers do not comply. And there is no 14 enforcement mechanism and no resources from 15 DOE to actually enforce any kind of 16 regulation. 17 FACILITATOR BROOKMAN: Okay. 18 Thank you. 19 MR. KIDO: Michael Kido, DOE. 20 With respect to that last issue on 21 enforcement, if anyone around the table has 22 some ideas or suggestions as to how DOE should

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 59 1 best approach that particular issue, we would 2 certainly be interested in hearing that and 3 reviewing any written comments on that issue. 4 FACILITATOR BROOKMAN: Thank you.

5 Steve Rosenstock? 6 MR. ROSENSTOCK: Just curious. 7 Isn't it with most federal standards that for 8 products manufactured or imported, they have 9 to meet the regulations, have to meet the 10 efficiency regulations? 11 FACILITATOR BROOKMAN: Michael 12 Kido? 13 MR. KIDO: Michael Kido, DOE. 14 Yes, there is a requirement, but I 15 think, as the representative from Emerson 16 indicated, there are also perhaps some 17 practical issues in terms of I guess some of 18 the logistics in being able to bring a lot of 19 enforcement actions. And that's why we're 20 sort of interested in hitting anything that 21 folks here have to say on how we should best 22 approach that issue.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 60 1 FACILITATOR BROOKMAN: Okay. 2 Thank you. 3 Yes, Rob? 4 MR. BOTELER: I would just comment 5 that in the integral world, we have very real 6 examples that we receive from the West Coast, 7 from California periodically regularly, that 8 we have equipment coming in from Asia that now 9 the motor shows up at our distributor, at the 10 repair center where our motors are repaired or 11 replaced. 12 And we get calls as to what should 13 we do. This motor, the nameplate is not even 14 consistent with NEMA. And it's not even 15 nameplated as a 50 hertz or a 60 hertz, and it 16 doesn't meet the efficiency levels. And then 17 we have to try and replace that motor. 18 And we've come to the conclusion 19 that a lot of that product is coming in 20 embedded in the piece of equipment. And there 21 is no enforcement taking place. So we are 22 losing the sale, and we are competing against

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 61 1 that lesser product. 2 FACILITATOR BROOKMAN: Okay. 3 Thank you. 4 Additional comments on this 5 series? 6 (No response.) 7 FACILITATOR BROOKMAN: Okay. 8 MR. SCHOLAND: I just have two 9 slides on equipment classes. For those of you 10 who are not aware of the Department's process, 11 the Department divides equipment classes using 12 three criteria: the type of energy used, the 13 capacity of the equipment, and any other 14 performance-related features that require 15 different standards levels, such as features 16 affecting consumer utility. 17 Why are equipment classes 18 important? Because energy conservation 19 standards may be different applying to 20 different equipment classes. 21 So, for example, as you're 22 familiar with the integral horsepower, one to

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 62 1 two hundred horsepower, motors, there are in 2 the standard, in the CFR right now, 113 3 equipment classes, the combinations of numbers 4 of poles and horsepower ratings. 5 So for the preliminary analysis, 6 we're discussing today the Department is 7 proposing to establish equipment classes 8 around the following three characteristics. 9 The CSIR, the CSCR, and polyphase 10 small electric motors would be classified 11 separately. The horsepower ratings would be 12 classified separately because horsepower has a 13 direct impact on motor efficiency. And, 14 finally, the number of poles also impact the 15 rated speed and torque characteristics of the 16 motor. So they will be classified separately. 17 That results in 72 equipment 18 classes for small electric motors. That is 19 each a unique combination of horsepower number 20 of poles and motors. And on the next slide, 21 we just have one table showing you what it 22 would look like for each of the three

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 63 1 groupings: the CSIR, the CSCR, and the 2 polyphase. There would be three tables that 3 look like this. 4 FACILITATOR BROOKMAN: Roger? 5 MR. DAUGHERTY: Roger Daugherty. 6 I would just like to encourage 7 and, yes, again referring to yesterday's 8 discussion, where we were talking about the 9 definition of a basic model that in that 10 definition, you referred to the identification 11 as a group as being either a polyphase fitting 12 within the group of polyphase, the group of 13 CSIR, or the group of CSCR. Here we seem to 14 be using classes to refer to the same 15 information. 16 I would like to encourage settling 17 on one identification and using that singular 18 identification so it's easy to go from one set

19 of documents to another set of documents. 20 FACILITATOR BROOKMAN: Well, which 21 would you prefer? And does NEMA have a 22 preference or a --

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 64 1 MR. DAUGHERTY: Roger Daugherty. 2 I would just group to me sounded 3 good.

4 FACILITATOR BROOKMAN: So I'm 5 looking down --

6 MR. BOTELER: The other members of 7 NEMA support Roger. 8 FACILITATOR BROOKMAN: Okay. So 9 group sounds good. Okay. 10 MR. SCHOLAND: Roger, Mike 11 Scholand here. Sorry. 12 We tried to actually use them. On 13 this slide, the second bullet uses type, 14 right? So equipment class is at the finest 15 level of disaggregation, 72 classes and each 16 of the motor type being polyphase CSIR or 17 CSCR. I apologize that we're confusing the 18 terminology. 19 FACILITATOR BROOKMAN: Go ahead, 20 Roger.

21 MR. SCHOLAND: Go ahead. 22 MR. DAUGHERTY: Roger Daugherty.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 65 1 Yes. But when we get to this 2 table and we go back to the definition in the 3 previous NOPR and try to apply this and 4 establish the standards, these correspond to 5 what is called a basic rating or a basic 6 model. Each one of these is one of the basic 7 models that is in that definition. So they're 8 not really types. 9 This table encompasses that set of 10 basic models. 11 MR. SCHOLAND: The equipment class 12 -- that's right. The Department -- that's 13 what I was saying. The equipment classes are 14 important. Generally the Department has the 15 flexibility of establishing a different 16 efficiency level for each equipment class. 17 So for small electric motors, 18 there would potentially be 72 equipment 19 classes, 72 efficiency ratings. Now, in each 20 of those boxes, a manufacturer may produce 21 1,000 or 2,000 or 3,000 different basic 22 models. And the understanding, as we were

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 66 1 discussing yesterday, was that manufacturers 2 would report on the least efficient basic 3 model within that equipment class, which has 4 one efficiency rating. 5 So when you make a blueprint 6 design, you are using the AEDM model to create 7 your designs. You keep that data in-house. 8 You only report to DOE on the least efficient 9 basic model in an equipment class. So that is 10 how they are meant to interface between the

11 two. 12 So it could be many basic models 13 within one of these equipment classes, one of 14 the 72 equipment classes, that you would 15 report to DOE on the least efficient. 16 FACILITATOR BROOKMAN: Go ahead, 17 Roger. Follow on.

18 MR. DAUGHERTY: It's not to 19 follow-on. It's just a thank you for that 20 explanation. 21 (Laughter.)

22 FACILITATOR BROOKMAN: So does

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 67 1 that cause you to think that this typology is 2 useful or descriptive enough? 3 MR. DAUGHERTY: Roger Daugherty. 4 Yes, it's descriptive enough. I 5 guess it is trying to become familiar with 6 some of the DOE terms as I read one document,

7 then I move to another document. I am so used 8 to dealing with the basic rating since about 9 1996 that it seemed to be being carried 10 forward into the small. And now we introduce 11 a new term that I don't recall ever having 12 seen before in previous documents. 13 FACILITATOR BROOKMAN: Okay. Tom 14 and then to you John, Tom first. 15 MR. HINK: Tom Hink, Regal-Beloit. 16 Just an observation. I noticed 17 here in your tabulation you are now addressing 18 poles and horsepower. Yet, in the scope 19 section, nothing is mentioned at all in terms 20 of horsepower range, nor poles applied or 21 affected by this. 22 Is that implying, you know, that

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 68 1 these types of charges can vary depending upon 2 the classes in terms of poles affected and 3 horsepowers affected and so on, just an 4 observation, maybe your comment back? 5 MR. SCHOLAND: It's a good 6 comment. May I just respond to that, Doug? 7 This is based off of manufacturers' 8 catalogues. So when we were looking at the 9 universe of manufactured product, we looked at 10 the four manufacturers that we are focusing on 11 today. We looked at all of the product 12 offering. 13 In the two-digit frame number 14 series, these were the horsepower ratings that 15 were there. These were the pole ratings that

16 were there. And then we looked at the 17 integral horsepower table, and we noticed a 18 commonality of structure and said, "Look, this 19 probably is a logical framework to apply for 20 small." And that's why to set this 21 preliminary stage, this is what DOE is 22 suggesting.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 69 1 You might notice that for the high 2 horsepower rating, we have a greater than or 3 equal to three horsepower because there are 4 some five-horsepower two-digit frame number 5 series manufactured in some catalogues. 6 So, rather than cap out at three 7 and then have no guidance on five, we just 8 thought we would say greater than or less than 9 or whatever the efficiency value is. Unit of 10 analysis would be a three. That same 11 efficiency would apply to the five. So that 12 was a little subtle.

13 FACILITATOR BROOKMAN: John? 14 MR. ANDRLE: I have a question 15 about how these -- I'm sorry. John Andrle. 16 I have a question about how these 17 classes, then, will be related to as far as 18 your consideration of efficiency and how they 19 relate to the three different two-digit frame 20 sizes that are being considered here, I mean, 21 as they are going to be proposed, one 22 efficiency standard for a class for, say, a

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 70 1 six-pole quarter-horsepower that covers all 2 three frame sizes. 3 MR. SCHOLAND: Correct, yes. Yes. 4 That's a very good observation. The 5 Department is not using frame size as a 6 disaggregator or characteristic distinguishing 7 between equipment classes at this stage. 8 FACILITATOR BROOKMAN: Roger, go

9 ahead. 10 MR. DAUGHERTY: I guess what I 11 would comment on now is the present comment 12 that was just made. I know when we get into 13 the engineering analysis, an example that you 14 did on polyphase motor was a 56-frame. 15 I think the point that is trying 16 to be made, you have to realize that some 17 ratings do appear in more than one frame size 18 because there is no standardization on 19 horsepower per frame, as there are in the 20 integral horsepower motors. 21 So it wasn't an issue with respect 22 to medium motors that were covered by the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 71 1 other part of EPACT, but when you get here and 2 carry through an engineering analysis on the 3 ratings put into different frames, you're 4 going to find you're handicapped with trying 5 to get the same efficiency in a 48 frame that 6 you will get in a 56 frame. 7 So it may be very important that 8 any efficiency standard that you do establish 9 is tied to a frame size and need to add that 10 to your equipment class as part of the 11 definition.

12 MR. SCHOLAND: DOE would 13 appreciate written comments on that and some 14 data to support it as well if that is 15 available.

16 FACILITATOR BROOKMAN: Steve

17 Rosenstock?

18 MR. ROSENSTOCK: Steve Rosenstock. 19 Looking at this table, again, 20 you're saying that this rulemaking might go up 21 to those motors that are actually sized as 22 large as five horsepower.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 72 1 I guess I am just kind of -- 2 again, this is kind of looking down the road 3 but just kind of curious. You know, we have 4 the standards for the integral motors designed 5 A and B that were done in federal law going 6 into effect in 2010. 7 And these might be going to -- the 8 rulemaking, you know, for these would be in 9 effect in 2015. I'm just kind of -- 10 marketplace confusion possibly. You know, you 11 have two different standards for one 12 horsepower motor for I'll say the novice 13 person looking at a table or catalogue.

14 I know there are a lot of 15 different applications in everything, but I 16 guess there might be some concern that if two 17 different design types -- I don't want to use 18 the wrong word here -- one-horsepower motors 19 have two significantly different efficiency

20 levels. 21 There might be some hopefully not 22 -- you know, especially overseas some

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 73 1 substitution going on. I don't know. I don't 2 know if that is going to play a role down the 3 road but just something to consider possibly. 4 MR. SCHOLAND: Thank you, Steve, 5 for that comment. I think one of the things 6 the Department has in its favor is that small 7 electric motors are two-digit frame number 8 series and the other electric motors are 9 three-digit integral horsepower. 10 So, Roger, did you want to add to

11 that? 12 FACILITATOR BROOKMAN: Roger, yes, 13 please? 14 MR. DAUGHERTY: The item I wanted 15 to address was a request for information on 48 16 versus 56-frame. Back in 2007, when the 17 Department was trying to make the 18 determination, they requested that NEMA 19 provide such information. 20 So NEMA requested their technical 21 committee to do a survey. And within the data 22 that was requested, there were four different

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 74 1 ratings. And it happened that the second and 2 third were half-horsepower motors, both 3 4-pole, the one being in the 56-frame and the 4 other being in a 48-frame. And so we did 5 supply data at that time. That did show an 6 efficiency difference that was attainable in 7 those two different frame sizes for the same 8 rating. 9 FACILITATOR BROOKMAN: I thought 10 you had something else to say as well. You 11 were just responding to that comment. Do you 12 have another comment from previously?

13 MR. DAUGHERTY: No. 14 FACILITATOR BROOKMAN: Okay. 15 MR. SCHOLAND: Okay. Any more 16 discussion on the equipment classes? 17 (No response.)

18 MR. SCHOLAND: Move on to 19 shipments.

20 FACILITATOR BROOKMAN: And let me 21 just confirm. We confirmed that the wording 22 here, the typology, that is going to work for

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 75 1 especially the manufacturers. This is 2 important, I think. 3 MR. SCHOLAND: Oh, it is. And 4 here is a question perhaps for the 5 manufacturers. If you were to modify this 6 table to take into account frame number series 7 because there is some scaling perhaps of frame 8 number series between the horsepower ratings, 9 please prepare a table that you would like to 10 see and submit it in your comment. 11 FACILITATOR BROOKMAN: Would it be 12 a fourth element and it would multiply the 72 13 by 4 essentially, yes? Yes.

14 MR. SCHOLAND: At one extreme.

15 FACILITATOR BROOKMAN: At one 16 extreme, yes. 17 MR. BOTELER: This is Rob Boteler. 18 Yes. I think what we're saying is 19 if we have a -- and I don't know exactly what 20 it is, but we have a 42 and a 48 frame that 21 could both have a half-horsepower motor.

22 So we would need to have an

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 76 1 efficiency level for a half-horsepower 2 42-frame and a half-horsepower 48-frame. If 3 we only did it on one or the other, then we 4 would know which way to go with the other 5 frame designation or I guess we would have to 6 stay with the horsepower. And then we could 7 not achieve it on the lower frame size. 8 FACILITATOR BROOKMAN: Yes. Okay. 9 Thank you. 10 Yes? Sorry. Thank you. Bill? 11 MR. BASSO: This is Dale Basso, 12 WEG Electric. 13 You know, I thought we would 14 probably get into it a little later, but this 15 is all getting down to an issue of 16 standardization and being able to write a 17 standard around a standardized product. 18 And in fractional horsepower 19 motors, it is a very unstandardized product in 20 the industry. And a lot of the motors are 21 applied specifically. Even the general 22 purpose catalogue product for WEG versus

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 77 1 Emerson could be a different frame size. 2 The customer who buys our motor 3 may not be able to buy their motor because 4 it's in a different frame size. And they are 5 very often frame size envelope-restricted in 6 these products. 7 I think, Rob, you are going to get 8 into that. So Rob will get into some of that 9 in his presentation. But the issue of setting 10 this and expanding this from 72 to 3 times or 11 4 times 72 basic ratings gets down to where we 12 can set a standard for efficiency by frame 13 size, but it won't help the customer, who was 14 in a smaller frame and now has to go to a 15 bigger one to get an efficiency level. 16 So we're going to get into a real 17 vicious circle here as far as the customer end 18 of this. As motor manufacturers, we love 19 premium efficiency. And we love to sell 20 efficiency. I think you have probably seen 21 that in our larger frames that it is a big 22 part of our promotion and our efforts.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 78 1 But when we get into this, we also

2 are concerned about our customers. And there 3 are a lot of issues related to the impact on 4 our customers when we get into the fractional 5 horsepower sizing and fitting things in and 6 obtaining the efficiency. 7 So we're struggling with the 8 ability to how we set these standards via 9 frame size. And I guess we will get into that 10 a little more as we go forward.

11 FACILITATOR BROOKMAN: You can 12 imagine that DOE would want to be sufficiently 13 descriptive and adequate, though that tends to 14 get more complicated if you have thousands of 15 classes. So your ideas about how they could 16 compose those classes in your written comments 17 are very important to them because they are 18 looking for a way to be sufficient here in a 19 way that doesn't mess up your customers. 20 Charlie? 21 MR. STEPHENS: Charlie Stephens, 22 Northwest Energy Efficiency Alliance.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 79 1 I was looking in page 3-13 in the 2 market assessment preliminary document. And 3 there is a statement in there by DOE that they 4 did not see significant differentiation and 5 efficiency by frame size and, for that reason, 6 chose not to differentiate by frame size in

7 tables. 8 Is that what is being taken issue 9 with here, that you actually maintain there 10 is, even though DOE did not appear to find it? 11 FACILITATOR BROOKMAN: Bill, go

12 ahead. 13 MR. BASSO: It's Dale Basso, WEG. 14 Yes, that's what we would contend. 15 And there is a significant difference. And 16 because a lot of these are customer-specific 17 once they apply it, when we tell them it now 18 has to go up in efficiency, there's a good 19 chance the motor will get longer, if not 20 bigger diameter. And that will impact the 21 customer in a very costly manner. 22 FACILITATOR BROOKMAN: And, Rob, I

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 80 1 saw you nodding your head in agreement. It's 2 useful to know if you agree. 3 MR. BOTELER: I agree. Actually, 4 one of the things that I am involved with -- 5 and Dale mentioned that the motor 6 manufacturers are very interested in premium 7 efficient motors and we have come up with the 8 NEMA premium and all of the things that we

9 have done there. 10 And I have been working 11 internationally on IE3, which is the 12 international standard for IEC product. And 13 the issue that they face is exactly what we 14 faced with our fractional product. And that 15 is that they have the product on a smaller 16 frame size, smaller diameter. 17 And in order to achieve the level 18 of efficiency, IE3, equivalent to NEMA 19 premium, their only choices are to lengthen 20 the frame or to go to a larger diameter frame 21 or in some cases the technology of moving to a 22 copper bar rotor, which is a very costly

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 81 1 process for them. 2 And what we are talking about 3 today on these frame sizes for the NEMA 4 manufacturers is very similar to what is 5 happening in Europe right now. In Europe, it 6 has pretty much come to a standstill on 7 implementing IE3 because the manufacturers 8 have this issue. 9 And the way around it is not good 10 because it will produce product, as we have 11 heard here, that is not acceptable for the 12 application for the end use. So we don't 13 achieve a whole lot. 14 FACILITATOR BROOKMAN: Thank you. 15 Thank you. 16 Yes, Bill, again? Yes? 17 MR. BASSO: Dale Basso, WEG. 18 I will just for practical purposes 19 give an example of a recent scenario. I was 20 with a previous motor manufacturer that sold a 21 lot more fractional motors. But we closed one 22 of our facilities and had to move the designs

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 82 1 into another facility.

2 And motor manufacturers aren't 3 standardized on a particular lamination 4 diameter. So Emerson might use a different 5 lamination barrel than WEG does for a 6 particular frame size. 7 So 56-frame is a foot height 8 thing, not a barrel diameter thing. So the 9 frame can actually get larger around. And 10 when we design motors, we do call it a D2 L or 11 it's a length-to-diameter ratio coming up with 12 a design. 13 Well, we started out with larger 14 diameter motors in the plant we were closing. 15 When we transferred those into a plant that 16 used a smaller diameter, all the motors got 17 longer; well, not all but a high percentage of 18 the motors got longer. 19 And a significant number of our 20 customers came back to us screaming and 21 yelling. That was not acceptable. They could 22 not handle that little bit of additional

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 83 1 length to move. Because we went a smaller 2 diameter, we had to go longer just to get the 3 same rating. 4 And our goal was to get the exact 5 same rating. We weren't increasing 6 efficiency. It was strictly trying to match 7 the performance of the previous motor. So 8 barrel diameter itself within a manufacturer 9 can make a difference in what we can get. 10 So I guess the morale we learned 11 to that story is that they are very sensitive. 12 Customers are sensitive to the envelope size 13 of the motor and that it is important. 14 FACILITATOR BROOKMAN: Okay. So, 15 Dale, my apologies. I have been calling you 16 Bill for about the last five to ten minutes. 17 And I'm saying this to correct the record, in 18 fact. So thank you. 19 So additional? Yes, Michael? 20 MR. KIDO: Michael Kido, DOE. 21 I was wondering if the 22 manufacturers could sort of quantify a

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 84 1 ballpark range as to the differences in 2 efficiency among frame sizes. Are we talking 3 about five percent, ten percent? What is this 4 bottom line number if there is one? 5 (Laughter.) 6 FACILITATOR BROOKMAN: Yes, Dale, 7 please? 8 MR. BASSO: I think the issue is 9 that because we are into the fractional 10 horsepowers and, as Rob pointed out or as 11 Roger pointed out earlier, in the NEMA frame 12 size 140 and up, the 3-digit frame sizes, they 13 are pretty much in a fixed length frame. And 14 the core length can vary within that frame to 15 get the rating. So the mechanical package to 16 the customer doesn't change when you increase 17 efficiency. 18 In these ratings, to go from a 19 48-frame and don't even change the frame size 20 but just change the efficiency, it might go 21 from an 8-inch-long to a 9-inch-long motor. 22 So when you say the difference

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 85 1 between a 48 and a 56, we might be able to go 2 up in frame to a 56, make it longer, and get a 3 more significant increase in efficiency. But 4 now we have not only increased the diameter 5 but the length. 6 So there isn't an exact number 7 that we could say, "Well, a 48 can do, you 8 know, 80 percent and a 56 will do 85." It's 9 very dependent on how long we then make the 10 next rating. 11 MR. KIDO: Okay. Just to follow 12 up, but there are efficiency differences among 13 different products within the same frame range 14 size or are they all the same?

15 FACILITATOR BROOKMAN: Dale? Yes. 16 Keep going. 17 MR. BASSO: Yes, there are 18 differences even within the same frame range. 19 And it will come down to a length. You know, 20 if we wanted to make a motor, a half-horse 21 motor, and a 56-frame more efficient, we can 22 expand the length of it. And it will get more

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 86 1 efficient. 2 And so the definition of how long 3 you go with that length increase could change 4 the amount of additional efficiency you have. 5 If you went from a 48-frame -- and only to 6 confuse issues further, -- 7 (Laughter.) 8 MR. BASSO: -- we can actually 9 build a 48 and a 56 with the same laminations. 10 So the actual barrel diameter of the motor 11 might be the smaller laminations that would 12 support a 48, but we put feet. That raised 13 shaft height up to that of a 56. And now 14 we've got a 56-frame motor by definition with 15 the same laminations that would be in a

16 48-frame motor. 17 So it's just very dynamic in the 18 fractional horse world. 19 FACILITATOR BROOKMAN: Thank you.

20 Rob? 21 MR. BOTELER: Yes. Just to kind 22 of reiterate on what Roger said a minute ago,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 87 1 the numbers that we submitted to DOE, we 2 actually looked at four examples. But, just 3 taking one example, the 3-phase one-horsepower 4 56-frame 4-pole, we determined that the 5 standard efficient was 74 percent efficient. 6 If we increased the length of the 7 motor, we could go to what we considered 8 energy-efficient or EPACT at 78.5. And if we 9 went even longer, we could go to 85.5. 10 In all cases, we're looking. And 11 we looked at examples where we might go from 12 one and a half-inch stack. And when we were 13 done, we might be 250 percent of that. 14 So, to Dale's point, we have now 15 lengthened that motor to the point where our 16 customer can no longer purchase that motor 17 because it will not fit in his envelope, but 18 we have achieved the energy goal. 19 FACILITATOR BROOKMAN: Okay. And, 20 Roger, please? 21 MR. DAUGHERTY: And just to follow 22 up on that, a little bit of clarification. At

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 88 1 the time that DOE asked for the survey and 2 that we provide the results, we weren't even 3 thinking in terms of trying to explain what 4 frame size these were in. We were just 5 providing the numbers that were requested. 6 So while we provided the standard 7 efficiency with 74 percent, energy efficiency 8 with 78 and a half, and premium was 85 and a 9 half, it is possible within the 56-frame DOE 10 is probably not aware, as what Rob just said, 11 that over those 3 values, those are very 12 different motors and very different overall 13 package lengths. And one may be 200 and some 14 percent as long as the lowest efficiency. 15 So you may not have interpreted 16 the information that we actually gave you 17 correctly in making a determination that there 18 was not a significant change in frame size 19 corresponding to the efficiency values that 20 you received. 21 FACILITATOR BROOKMAN: Thank you. 22 Tom, did you want to follow on?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 89 1 MR. HINK: I was just going to 2 make a follow-up comment that if you are 3 looking at our various catalogues, we may just 4 plainly say 56-frame, but you have no way of 5 really knowing whether it's a smaller diameter 6 lamination or the larger, which may refer to 7 the comment that was stated earlier that they 8 couldn't see any real difference. 9 Well, the reason you can't see it 10 is you can't really see behind the scenes 11 which lamination is being used. That could be 12 adding to some of the confusion there. 13 FACILITATOR BROOKMAN: Okay. 14 MR. SCHOLAND: Very helpful 15 comments. Thank you. 16 Next I have just one slide to 17 discuss the shipments estimate that the 18 Department prepared for the preliminary 19 analysis we're discussing today. 20 Essentially the methodology 21 followed for this was to use shipment data 22 that NEMA provided to DOE for the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 90 1 determination analysis that was published in 2 2006. NEMA had provided that data, I believe, 3 2002 or 2003. It was several years ago. 4 DOE then used publicly available 5 shipment data for the appropriate NAICS code

6 from the Census and calculated an annual 7 growth rate that projected the NEMA data 8 forward to the year 2007. 9 And, as I had mentioned earlier 10 about a NEMA general purpose induction motor, 11 DOE did only consider open construction motors 12 here. There is a determination it was both 13 open and closed construction. 14 So it was just a portion of the 15 shipments that were provided that we use to 16 project forward. And the results are 17 approximately six million small electric 18 motors for the year 2007. 19 Polyphase was about nine percent. 20 Capacitor-start induction-run was the large 21 one, with approximately 87 percent. And 22 capacitor-start capacitor-run was about four

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 91 1 and a half. 2 FACILITATOR BROOKMAN: Rob,

3 comments? 4 MR. BOTELER: This is Rob Boteler. 5 We have really struggled with 6 these numbers because of the definition and 7 how they're applied. And in this category of 8 numbers, we build so many more that are 9 definite and special purpose motors than we do 10 that meet the definition of general purpose. 11 And we have recently gone back to 12 our members and the members sitting here and 13 actually one other and asked for 14 clarification. And we would adjust the

15 numbers. 16 I think we would tell you that the 17 polyphase is likely to approach a million 18 units, but we would tell you that the 19 cap-start induction-run is more likely to be 20 three million units. And part of that may be 21 because of what has happened in the market. 22 And we all watch the news and know what is

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 92 1 happening in the residential markets. And 2 that is driving our markets. 3 On the cap-start cap-run within 4 our NEMA guidelines, if we have less than five 5 members who report numbers, we cannot share 6 those numbers amongst us. So we have to 7 report nothing for sales in that category 8 because we had so few members who reported in 9 that category. 10 FACILITATOR BROOKMAN: Yes. It is 11 Bill, is it not?

12 MR. HOYT: Yes. 13 FACILITATOR BROOKMAN: Thank you. 14 MR. HOYT: Bill Hoyt with NEMA. 15 I just want to amplify what Rob 16 said about disclosure. The disclosure 17 requirements for data provided to our business 18 information services are grounded on antitrust

19 law. 20 FACILITATOR BROOKMAN: Okay. 21 Thank you.

22 Steve Rosenstock?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 93 1 MR. ROSENSTOCK: Again it might be 2 in the analysis. You'll have to forgive me, 3 but I am just kind of curious. Are there any 4 horsepower sizes that dominate the shipments, 5 you know, any one that really -- or are they 6 all kind of across the board in terms of 7 horsepower, there's no real, I'll say, market

8 leader? 9 MR. BOTELER: This is Rob Boteler. 10 Four-pole ratings are primarily 11 going to be in the 60 to 70 percent of the 12 units sold. Two poles are probably the next 13 one, at 12 or 13 percent. And then the rest 14 are six poles. 15 If you look in these categories, I 16 think the one-horsepower is probably the 17 dominant product that we sell. 18 MR. ROSENSTOCK: Thank you. 19 FACILITATOR BROOKMAN: The figures 20 you were giving, Rob, were they for '08, 2008, 21 or 2007 or what were they? 22 MR. BOTELER: They were recent

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 94 1 figures. They were really 2008. 2 FACILITATOR BROOKMAN: Okay. 3 MR. SCHOLAND: And just as a point 4 of information for Steve's question, the 5 Department's estimates are available in the 6 TSD. Thank you. 7 Okay. Technology assessment. So 8 we are shifting gears now away from the market 9 assessment. The technology assessment, the 10 purpose is to develop a preliminary list of 11 technology options that could improve the 12 efficiency of small electric motors. 13 Just a question, Doug, in terms of 14 time. It's 10:25. 15 FACILITATOR BROOKMAN: You've got 16 about four slides here?

17 MR. SCHOLAND: I have a few more. 18 FACILITATOR BROOKMAN: Five 19 slides. 20 MR. SCHOLAND: There are five.

21 FACILITATOR BROOKMAN: Let's do

22 them before the break.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 95 1 MR. SCHOLAND: I'll try.

2 FACILITATOR BROOKMAN: Yes.

3 FACILITATOR BROOKMAN: The method 4 that the Department followed to identify 5 technology options was to review the 6 literature, including manufacturers' marketing 7 brochures promoting efficient motors; 8 determination analysis work that was 9 performed; and comments from stakeholders from 10 the framework document and the DOE technical

11 contractors. 12 DOE classified losses into four 13 groups: conductor losses, core losses, 14 friction and windage losses, and stray load

15 losses. 16 DOE did not identify any 17 technology options to reduce stray load. So 18 we didn't move forward with that. We just 19 looked at options for the other three groups. 20 So, just focusing on conductor 21 losses, the measures DOE considered for the 22 technology options include the copper diecast

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 96 1 rotor cage, removing skew on the conductor 2 cage, increasing the cross-sectional area of 3 the rotor conductor bars, increasing the 4 end-ring size, changing gauges of copper wire 5 in the stator, manipulating slot size 6 geometry, and decreasing the air gap between

7 rotor and stator. 8 On the core loss side, DOE looked 9 at adding stack to the length of the motor, 10 changing grades of electrical steel, such as 11 improved conventional grades, and exotic 12 steel, annealing the laminations, thinning 13 laminations using plastic bonded iron powder 14 as a core material and using a permanent 15 magnet electric motor.

16 Comment there?

17 FACILITATOR BROOKMAN: Should we 18 just finish? We've got a -- okay. Go ahead, 19 Roger. 20 MR. DAUGHERTY: Roger Daugherty. 21 I noticed that with regards to the 22 core losses, the information the Department

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 97 1 appears to be using is given on page 3-33 of 2 the TSD. And in that table, I have to assume 3 that the watts per pound core loss that has 4 been provided is possibly coming from 5 electrical steel manufacturers' data. 6 And I will only put to you that 7 that kind of information is based on Epstein 8 testing of nice strips, although they are cut 9 from different orientations in the steel. 10 In the electric motor, the 11 distribution of the flux is not nice, like it 12 is in the Epstein testing. And it's not nice 13 like it is in power transformers. 14 One thing that doesn't show up on 15 the Epstein testing is the effect of the flux 16 trying to go across the air gap and causing 17 losses into the surface of the steel. And so 18 these numbers that come from electrical steel 19 manufacturers sometimes become misleading. 20 And it's only by building prototype motors 21 that we actually are able to evaluate what the 22 true loss is in that material.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 98 1 One that is a significant concern 2 to me is that the Department has looked into 3 this investigation of the Hiperco 50 material, 4 which in this table is showing a very 5 significant reduction in core loss. 6 Well, having investigated similar 7 materials, a lot of that is coming from the 8 fact that it is a very thin lamination 9 material. As I said, this information doesn't 10 account for losses that are not evident in 11 Epstein testing. 12 So practical experiences indicated 13 that the losses, this change in loss, going to 14 this material is not as significant as 15 indicated. The true value of that material in 16 thin laminations comes into play when you go

17 above 200 hertz. 18 So it looks to be a very good 19 advantage in variable speed equipment that is 20 running from a variable frequency controller. 21 But it has not necessarily proven of 22 significant benefit at 60 hertz.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 99 1 So I only caution that as you use 2 data that you have some background that 3 supports the amount of core loss that you are 4 actually calculating. And I tried to go 5 through your examples in your appendix 5 to 6 try to see what you were coming up with. 7 And I have got to conclude from 8 some of your other charts, where you show that 9 use of this steel caused a very significant 10 rise in efficiency, that it's due to just 11 purely using these numbers without any 12 experience in this background. 13 FACILITATOR BROOKMAN: Are you 14 able to generalize or characterize the 15 difference, the variability from the Epstein 16 testing to the real world applications? 17 MR. DAUGHERTY: Roger Daugherty. 18 I think what you will find is that 19 probably each manufacturer has done his own 20 prototype testing as he investigates a new 21 steel. And according to the analysis of the 22 program that he uses to do designs, how he

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 100 1 calculates core loss influences what 2 relationship he may have found. 3 So while I may have found a 4 certain relationship in the factors that I 5 use, other manufacturers may find different 6 relationships related to the way that they

7 calculate core loss.

8 FACILITATOR BROOKMAN: That 9 suggests there is significant variability.

10 MR. DAUGHERTY: Yes. 11 FACILITATOR BROOKMAN: Charlie? 12 MR. STEPHENS: Charlie Stephens, 13 Northwest Energy Efficiency Alliance. 14 Roger, could you comment a little 15 further by talking about the differences in

16 the deltas between the levels of losses that 17 you see there? 18 I realize you just told me the 19 absolute numbers are probably not what you see 20 in the actual motor. Could you talk about the 21 differences between the various levels that we 22 see in the table on that page that you

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 101 1 referenced in the TSD? 2 MR. DAUGHERTY: Roger Daugherty. 3 Yes. What is shown in the table 4 for this Hiperco 50, which has only a six 5 thousandths of an inch lamination thickness, 6 which is very thin -- and it's a side bar 7 which means that the manufacturer would have 8 to be punching about four times more 9 laminations in order to build a stack out of 10 that than it would out of the 24 M36 steel, 11 for example. 12 But in this table, you're showing 13 one watt per pound against more normal steels 14 that are used that are up to the two to three 15 watts per pound. It's just that in very 16 limited experience of looking into prototype 17 situations, because of our interest -- and we 18 build a lot of variable speed equipment and a 19 lot of variable speed motors in the controls. 20 And as we investigate trying to 21 improve those efficiencies and looking at this 22 material, we just find that you don't get this

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 102 1 two to one factor, like it shows here from a 2 24 M19 down to the Hiperco 50. 3 I can't give you an exact 4 comparison because while we observe the bad 5 comparison at 60, it's much closer than shown 6 here. Our interest was really 200 hertz and 7 higher because when you apply these 8 higher-loss steels, they have a hysteresis, 9 eddy current effects that as you go up in 10 frequency, they give tremendously high loss. 11 So we have to investigate these alternative 12 materials. 13 And so those alternative materials 14 are really marketed and driven toward 15 high-frequency applications, more so than they

16 are at 60 hertz. 17 So unless you gain experience and 18 do prototype testing, it's very difficult to 19 look at manufacturers of electrical steel and 20 take their numbers. 21 And we don't take any of them. We 22 always build prototypes every time we

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 103 1 investigate a new steel. We go through the 2 full IEEE 112 method B testing and find the 3 effect on stray load loss that that steel has 4 as well as the effect that it has on core 5 loss. And it's that stray load loss component 6 that is affected that is not shown in this 7 table and not given through Epstein testing. 8 FACILITATOR BROOKMAN: Thank you. 9 Are there additional comments since we are 10 here on technology options, as described in

11 27?

12 MR. SCHOLAND: Just a footnote. 13 MR. ANDRLE: I would just like to

14 make one other comment.

15 MR. SCHOLAND: Sure. 16 FACILITATOR BROOKMAN: John, 17 please?

18 MR. ANDRLE: John Andrle. 19 As far as changing steels and 20 changing the thickness of laminations, I mean, 21 based on the way that we're tooled, I mean, 22 we're tooled for one thickness of lamination.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 104 1 And basically we find it difficult to run 2 more than one type of steel through our plant 3 with one lamination. 4 So going to exotic steels or going 5 to exotic thicknesses probably means that the 6 manufacturer would have to change all of the 7 product coming from that lamination, which 8 means that costs are going to be added to 9 products that don't require it. 10 And so now you're impacting more 11 than what you're initially trying to regulate. 12 FACILITATOR BROOKMAN: Okay. 13 Thank you. 14 MR. SCHOLAND: I just wanted to 15 mention something relating to the technology 16 assessment. A requirement of the statute for 17 the Department is to develop what is called 18 the maximum technologically feasible design. 19 And that needs to be considered in the 20 analysis, where cost is actually no option. 21 And so DOE developed designs using 22 the conventional steel and didn't feel that it

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 105 1 had achieve max. tech. and went back to see, 2 okay, well, what other steels could be used or 3 other design measures. And the Hiperco was a 4 type of exotic steel that we felt would push 5 to the absolute maximum technologically 6 feasible. 7 So what I would say to all of you 8 if you have other suggestions, reasons why the 9 Department should not be considering this as a 10 technology option, please submit that in 11 writing but also give other suggestions for 12 how DOE can achieve maximum technologically 13 feasible, we would love to hear it. 14 FACILITATOR BROOKMAN: Yes, 15 please, Rob? 16 MR. BOTELER: Within the max. 17 tech., in that area, is that still within the 18 definition of induction motor and general 19 purpose or have we moved beyond that?

20 MR. SCHOLAND: No. It's meant to 21 be a small electric motor as defined and 22 interpreted as we discussed earlier today.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 106 1 MR. BOTELER: Okay.

2 MR. SCHOLAND: Yes.

3 MR. BOTELER: Then the next 4 question I have is, in your technology 5 options, you have permanent magnet electric 6 motor as on of your options.

7 MR. SCHOLAND: Correct. 8 MR. BOTELER: So it's not an 9 induction motor. 10 MR. SCHOLAND: We realized that 11 since publishing this. 12 MR. BOTELER: Thank you. 13 MR. SCHOLAND: Thank you. 14 Okay. The next slide is on 15 friction and windage. Is it windage or 16 windage losses? Wind, windage. Thank you. 17 FACILITATOR BROOKMAN: Although 18 they are windings, are they not? Okay. 19 That's why I'm looking forward to the 20 tutorial. 21 MR. SCHOLAND: The two technology 22 options the Department considered to reduce

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 107 1 the friction and windage losses are to improve 2 mechanical components and designs, such as the 3 bearings and bearing lubricant and the 4 efficiency of the cooling system. 5 So just to have a slide here 6 summarizing all of the technology options. 7 Oh, excuse me. This slide is a comment the 8 Department received in response to the 9 framework document when we discussed 10 technology options, summarizing factors, motor 11 characteristics that the Department needs to 12 keep in mind when looking at improving 13 efficiency of the motor. 14 So I just wanted to put this up 15 here to emphasize that this comment was 16 listened to and considered very carefully. 17 And when we get to the engineering analysis, 18 my colleague Matt Nardotti will talk about the 19 constraints that were applied to the design 20 software to make -- well, to try and 21 accommodate this comment. 22 So this last slide here is -- I

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 108 1 think this is the last one on technology -- is 2 just an opportunity for stakeholders to make 3 any final comments about the technology 4 options in the tech assessment, the 5 completeness, the description, and any other 6 recommendations that we would have for max. 7 tech. or other design options. 8 FACILITATOR BROOKMAN: Roger? 9 MR. DAUGHERTY: Yes. Roger 10 Daugherty. 11 Back on slide 29, probably one of 12 the things we forgot to add to that -- and I 13 know where these items came from -- was a very 14 important one, probably the very first one,

15 that the motor can be manufactured. 16 I'll leave you hanging with that 17 one. We'll get to it later. 18 (Laughter.) 19 MR. SCHOLAND: Thank you. Thank 20 you.

21 FACILITATOR BROOKMAN: Other 22 comments? Comments on technology options on

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 109 1 slide 29? No? No additional ones? 2 (No response.) 3 FACILITATOR BROOKMAN: Okay. So, 4 then, let's take our break now. Okay. I'm 5 just suggesting we take a break. It's now by 6 my watch or by that watch up there, that 7 clock, 20 minutes until 11:00. We'll resume 8 at 5 minutes until 11:00, 10:55. 9 Walking around in the Forrestal 10 Building you must wear your badge. And 11 there's a coffee shop one floor below us. On 12 the opposite side of the hall, there are 13 elevators at the center of the building. 14 There are stairwells on both ends. 15 There are also restrooms on both ends of this 16 hall. Please don't go anywhere too far 17 because we will start at 5 minutes until 18 11:00. Thanks for a good start on the day. 19 Did I forget anything? I think 20 that's it. Okay. We'll see you back here in 21 15 minutes. Wear your badges. 22 (Whereupon, the foregoing matter

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 110 1 went off the record at 10:40 a.m. and resumed 2 at 11:00 a.m.)

3 FACILITATOR BROOKMAN: So let's 4 begin, folks. Let's begin. Just for 5 information purposes, I was thinking we're a 6 few minutes behind. We are probably going to 7 press on and work until, say, 12:30 before we 8 pause for lunch. I hope that works for 9 everybody. 10 As we had said this morning, we 11 were going to get a few slides from Rob. And 12 we have them, two slides, mounted up here. 13 So, Rob, it is yours. 14 MR. BOTELER: I just wanted to 15 make a couple of points. One of them I think 16 that is important is that we're dealing with a 17 regulation, proposed regulation, at this point 18 that started out back in the early '90s. And 19 things have changed a great deal for us as 20 motor manufacturers since the early '90s. 21 One of the things that I think we 22 should be on the record as knowing is that

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 111 1 technology has advanced a great deal. And we 2 as the motor manufacturers are spending a lot 3 of resources on new technologies, all focused 4 on energy savings and energy efficiency, in 5 the same applications and kind of rating sizes 6 that we're talking about today. 7 We're really kind of focused on 8 yesterday's technology when we talk about the 9 products we have been talking about for the

10 last few hours. 11 And I wanted to just share that 12 with you because I want you to know that the 13 motor manufacturers, although we are opposed 14 to this regulation, -- we'll go on record as 15 saying that -- we are not opposed to energy 16 savings. And we are spending a tremendous 17 amount of resources in that area. 18 That is one of our concerns 19 because this regulation diverts those 20 resources that we would use in other areas. 21 We're working on permanent magnet motors. 22 We're working on switch-reluctant motors.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 112 1 Some of us are working on wind generators and 2 alternative fuels. We're supporting 3 alternative fuel-type applications with

4 motors. 5 One of the things that we do as a 6 company now, not speaking as NEMA, we're 7 working on removing gear boxes and belts and 8 pulleys. Instead of the four-pole motor that 9 we have been talking about, we're developing 10 28-pole motors that go onto the washing 11 machine directly onto the barrel of the 12 washer. So we have eliminated all the belts 13 in that efficiency that we lose in the belts. 14 So we debate in this discussion 15 where we talk about two or three points of 16 efficiency. Yet, we have opportunities in 17 other areas with multi-speed or with different 18 applications where we can talk 10 or 15 points 19 of efficiency or more. 20 I think it is important to know 21 that because that is part of the reason why 22 you are going to see more and more push-back

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 113 1 from us because we want our resources where 2 the real savings are. And it concerns us that 3 we would be asked to put our resources where 4 we really don't feel there's a lot of energy 5 savings.

6 FACILITATOR BROOKMAN: And where 7 your products are going as well?

8 MR. BOTELER: And where the market 9 is going.

10 FACILITATOR BROOKMAN: Yes. 11 MR. BOTELER: Absolutely. In 12 California, we have moved on pool pumps as an 13 example. We have moved almost entirely to 14 variable-speed pool pumps. 15 So we are not really debating this 16 product as it might have occurred two years 17 ago as a pool pump because we have moved the 18 market, and California has helped us move that 19 market, of course. 20 I wanted to show this just a 21 little bit so that people understood. And 22 this is to give you a kind of a grounding into

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 114 1 the categories of motors here. 2 The general purpose motors that 3 are covered today in the IHP area, the 4 definite purpose motors that are not covered, 5 but they are covered by NEMA premium. So they 6 are not covered by a regulation, but they are 7 covered by a standard. And most of us make 8 and sell those motors every day as a NEMA 9 premium.

10 When we come over to the 11 fractional motors, this is the guy we're 12 talking about right here. Everything else 13 that you see is an appliance motor. It's a 14 partial motor or it's a different type of 15 motor that is already covered in a different 16 piece of product in the system. 17 So we're really talking about one 18 narrow focus. And that was pointed out by the 19 young lady at PG&E this morning. You are 20 absolutely right. That is where we are at. 21 We are at that one small end of our product 22 line.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 115 1 The other thing that I wanted to 2 point out, we're going to get into talking a 3 little bit about the technical side. And 4 we've tried to make the point that the stack 5 of the rotor changes. And on our fractional 6 product, that electrical performance is 7 driving the mechanical configuration. 8 What you see here is an enclosed 9 motor. This is an IHP motor. And you see the 10 stack, and you see the end turns. And what 11 you see in this motor is that there is room. 12 And this is actually a premium efficient 13 motor, that there is room. 14 This may be a five-horse or seven 15 and a half. And on this frame size, we 16 probably make two sizes. We make a seven and 17 a half and a ten or we make a -- did I say 18 that right? Yes. We make a three and a five. 19 And we make it in the same frame size. 20 So we have designed this so that 21 we have room to move. In fractional motors, 22 that is not the case. In fractional motors,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 116 1 the frame is determined by the length of that 2 stator core. And it changes every time we 3 grow the motor. 4 So I'm going to make that point. 5 See, you all kind of understood what we were 6 looking at here. All right?

7 FACILITATOR BROOKMAN: Are there 8 questions following Rob's presentation? Okay. 9 MR. BOTELER: We'll let Michael

10 take over. 11 FACILITATOR BROOKMAN: Thank you. 12 MR. BOTELER: Thank you. 13 FACILITATOR BROOKMAN: Yes, Roger? 14 MR. BOTELER: What did I say wrong

15 there? 16 (Laughter.) 17 MR. DAUGHERTY: Nothing. Roger 18 Daugherty. 19 Because the question came up about 20 this w-i-n-d-a-g-e and how to pronounce it and 21 things and the reason it's windage is in this 22 particular machine, what it is referring to is

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 117 1 the loss of that fan trying to push the air 2 or, in other words, blow wind over the motor. 3 And that's why the word "windage" and not 4 windage. 5 (Laughter.) 6 FACILITATOR BROOKMAN: Okay. So 7 now we're turning to where we left off, which 8 is slide 31, screening analysis. 9 MR. SCHOLAND: So Mike Scholand

10 here. 11 Continuing, slide 31. The 12 screening analysis is essentially to apply 13 certain screening criteria to determine which 14 of the technology options discussed in the 15 technology assessment should be screened out 16 based on those criteria and which ones should 17 be included and, therefore, considered in the 18 engineering analysis, which, as you will 19 recall the chevron diagram, the screening 20 analysis feeds into the engineering analysis. 21 So the four screening criteria are 22 technological feasibility; practicability to

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 118 1 manufacturer install and service; adverse 2 impacts on product utility or availability to 3 customers; and, finally, adverse impacts on 4 health or safety. 5 I just want to point out that cost 6 is not a factor for the screening analysis. 7 That is an issue. Cost comes into analysis 8 when you look at the engineering cost curves 9 and when you get to the life-cycle cost

10 assessment for customers. 11 So the four criteria here are 12 technological feasibility, practicability to 13 manufacturer install and service, adverse 14 impacts on utility, and health and safety. 15 Roger? 16 FACILITATOR BROOKMAN: Please, 17 Roger? 18 MR. DAUGHERTY: Roger Daugherty. 19 I would like to just point out a 20 couple of things in your screening analysis. 21 Since you don't seem to be going on your 22 slides into the actual things that you

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 119 1 screened but you are only going into those 2 that are screened out in the later slides, if 3 you look on page 4-5 of the TSD, there is an 4 item 4.3.7, the air gap between rotor and 5 stator. And there is a statement, the very 6 first statement, "Reducing the radial air gap 7 between the rotor and stator can improve motor 8 efficiency." 9 Well, it's my experience it's just 10 the opposite, that by increasing the radial 11 gap many times is a way that we influence 12 stray load loss in a machine. And so that is 13 the opposite of the criteria that we use in 14 designing a motor. 15 Another is on 4-7, item 4.3.11, 16 "Additional stack height." I think we have 17 gone over this a lot in the stuff that Rob 18 just mentioned, but I think you really need to 19 correct the statement that says near the end 20 of the second paragraph, "However, DOE 21 recognizes that the majority of small motor 22 applications are not constrained by motor

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 120 1 length." 2 I believe, as I said, if you did 3 an application analysis, that that becomes 4 very important in this condition, as you heard 5 mostly this morning, is very important to the 6 application, whether or not that motor can go 7 into the application. 8 So it really has to be a condition 9 on any efficiency change that you come up 10 with. 11 FACILITATOR BROOKMAN: Okay. 12 Thank you.

13 MR. SCHOLAND: Can I --

14 FACILITATOR BROOKMAN: Yes. 15 Michael, please? 16 MR. SCHOLAND: -- just ask as a 17 point of information, Roger, has NEMA done an 18 application analysis? And on what basis do 19 you find that the applications are, in fact, 20 the majority are, constrained by how do you

21 make that statement? 22 MR. DAUGHERTY: Roger Daugherty.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 121 1 I don't know if I can answer that 2 directly. It's just what you have been told 3 today is that -- because some of your 4 examples, you talk about increasing the core 5 length by 105 percent. And you've got to 6 realize that if you did that to someone's 7 piece of equipment, you would produce a motor 8 that, as you have been told, just won't fit in 9 that piece of equipment. 10 So the person who is trying to 11 replace a motor because it burns out isn't 12 going to be able to do so. An OEM that has 13 been marketing that equipment for 15 or 20 14 years now suddenly has to totally redesign his 15 piece of equipment. 16 I know you said you tried to 17 include that in the life-cycle cost analysis, 18 but unless you have an item in there that 19 says, "Well, this is what it is going to cost 20 for that person to redesign his equipment, 21 that OEM, and this is what it is going to cost 22 those users who can't do any replacements

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 122 1 anymore, then you have to question your 2 life-cycle analysis." 3 So it seems to me it's easier if 4 you first screen out that because I increase 5 the core length too much, I can't go into 6 these applications. And so is it really 7 feasible to even do a life-cycle cost analysis 8 on it?

9 FACILITATOR BROOKMAN: Robert? 10 Robert, can you just pop that stem up? Will 11 it go up to -- thank you.

12 MR. VAN BUSKIRK: So Robert Van 13 Buskirk. 14 As Michael said, the Department's 15 criteria for screening analysis does not 16 include cost. The analysis that is available 17 for this meeting is a preliminary analysis. 18 The Department welcomes whatever 19 comments interested parties may provide on the 20 costs that would be incurred by consumers from 21 the characteristics that motors would have 22 resulting from these higher efficiency

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 123 1 designs. 2 So even if the cost isn't included 3 in the current preliminary analysis, the 4 Department has the capability of including 5 such costs in revised analyses.

6 FACILITATOR BROOKMAN: Rob? 7 MR. BOTELER: Yes. I think where 8 Roger was headed, not even getting to the 9 costs yet but on the screening analysis, when 10 we looked at the practicality to install and 11 service what we mentioned is, as the 12 dimensions change, it no longer can be 13 installed. So it no longer performs any 14 service. 15 And I guess the product could 16 still be serviced, but it doesn't fit into the 17 OEM product. And the utility of the product 18 is removed because it wouldn't be able to fit. 19 I think another point, just 20 talking about the type of product. Because 21 this is open product, it is more likely to be 22 in an OEM enclosure.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 124 1 And the company that I work for, 2 we build product for medical equipment. And 3 in some cases, our dimensions are down to a 4 thousandth of an inch for plus or minus if 5 it's acceptable to our customer for his 6 application. 7 So when we start talking about 8 things with increasing the stack length and 9 changing the C dimension -- we have talked a 10 lot about the D dimension, which is the shaft 11 height, but our customers look at the other 12 dimensions. And the C dimension is the 13 overall length. If that starts to change, 14 then we no longer have a product that they can

15 use. 16 MR. SCHOLAND: Great. Very 17 helpful comments. Thank you. 18 I am just going to mention here on 19 slide 32, there were 3 technology options that 20 were screened out. And I have one slide on

21 each of these. 22 I want to emphasize -- and Roger

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 125 1 has already studied that TSD chapter 4 is a 2 good place to see the full analysis spelled 3 out in terms of our application of these four 4 criteria to the technology options. 5 And now to Rob Boteler's point 6 about the air gap and the constraints on stack 7 height and the C dimension in addition to the 8 D dimension, I'm wondering if industry could 9 comment on the sort of degree to which some of 10 these technology options to improve efficiency 11 could be allowed, like, for example, you had 12 provided to us that had a stack length 13 increase of 250 percent. We thought that was

14 a lot. 15 And so the stack length constraint 16 we applied to the engineering was 100 percent, 17 a doubling. Should it only be 50 percent? 18 And on the radial air gap, I 19 understand you find that increasing air gap 20 can improve efficiency. At this stage we 21 believe it's the opposite but completely open 22 to your input on it.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 126 1 I'm wondering if there's a radial 2 air gap constraint, like here we had said 3 nothing below ten thousandths of an inch as a 4 constraint. We're going to screen out below 5 that because we don't think it's practicable

6 to manufacture. 7 Are there degrees of these 8 technology options that are manufacturable and 9 acceptable? And could you provide comment on 10 those, either now or in your written comments?

11 FACILITATOR BROOKMAN: John?

12 MR. ANDRLE: John Andrle. 13 I would just like to talk about 14 the stack length changes and the examples that 15 you gave us or that were being discussed. I 16 mean, like for a 56-frame motor, we're talking 17 about a motor that is sort of in the middle of 18 the horsepower range that we build that motor

19 at. 20 Think about the motors that are at 21 the upper end of that band, the 22 two-horsepower, maybe the three-horsepower.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 127 1 Now the stack length of those motors are at 2 our maximum capability. 3 Now, in order to go beyond what 4 we're doing today, we now have to look at the 5 equipment that we make for both winding and 6 inserting the coils, making the frame lengths, 7 and probably that requires a retooling of our 8 equipment. 9 So the examples don't necessarily 10 relate to the entire product line that is 11 coming off of a particular lamination. 12 MR. SCHOLAND: I appreciate that. 13 Thank you very much for that comment. I will 14 use that comment to make a plug for the 15 manufacturers' impact analysis, which Matt 16 will be presenting later today. 17 At that stage of the rulemaking, 18 DOE will be soliciting input from you on 19 retooling costs, new equipment cost. Should 20 the Department go to this level, I have to 21 retool my whole production line. Here's how 22 many millions it's going to cost me.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 128 1 And then we'll prepare for the 2 Department a cash flow analysis of the impacts 3 on manufacturers. And that becomes part of 4 the rulemaking and part of the Secretary's 5 decision in order to move forward with

6 standards. 7 So it is taken into consideration, 8 just not here in this.

9 FACILITATOR BROOKMAN: Dale? 10 MR. BASSO: Dale Basso, WEG 11 Electric. 12 When we talk about the changes and 13 what percentage you can live with, if you look 14 at -- and I can't speak for all manufacturers, 15 only what I have experienced. 16 We had about four different frame 17 lengths that we standardized down from six 18 different frame lengths within a given 19 diameter. And the goal for engineering was 20 always to design -- they did the electrical 21 design of a motor. And then they put it in 22 the shortest frame they could.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 129 1 So that there typically wasn't 2 room to just add core length to a motor to get 3 more efficiency out of it. You would change 4 the frame when you added core length.

5 So I don't know that we can come 6 up with a number that says you can add 25 7 percent more core because the whole factor was 8 if we could fit it into something that was 9 right on the edge, that's what it got because 10 cost was always an important driver in 11 fractional horsepower motors. And you didn't 12 want to put any more into it than you had for 13 the design. 14 FACILITATOR BROOKMAN: Yes, Rob? 15 MR. BOTELER: Yes. I think, to 16 elaborate a little bit more on what Dale just 17 said, when we look at some of the other 18 options -- and adding copper and increasing 19 slot fill is certainly one of the options -- 20 one of the things that we try to do today with 21 high-volume product is we run it through 22 automated processes. We go through automated

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 130 1 winders. 2 And we have a limit to the amount 3 of fill that we can do with an automated 4 winder. So if we decide that we can move to a 5 higher efficiency but it moves us to a 6 hand-winding operation, I can't speak for all 7 of my colleagues here, but I can tell you that 8 the company that I work for, we will be 9 looking at low-cost countries. We will not be 10 looking at North American operations because 11 moving to a hand operation and more labor cost 12 we can't be competitive and remain in North 13 American facilities. 14 FACILITATOR BROOKMAN: Okay. 15 Thank you. 16 MR. SCHOLAND: Thank you. 17 So slide 33 is discussing radial 18 air gap. And DOE screened out radial air gaps 19 below ten thousandths of an inch, finding that 20 it is now practicable to install, manufacture, 21 install, and service. Problems are concerned 22 in manufacturing and service. The rotor could

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 131 1 come into contact with the stator.

2 It was also screened out due to 3 adverse impacts on customer utility and 4 reliability and maybe higher failure rates 5 with these tighter air gaps, particularly for 6 motors that may have longer stack lengths and 7 heavier rotors. 8 Okay? Plastic bonded iron powder. 9 This is an iron powder alloy suspended in 10 plastic and shaped into motor components, 11 eliminating a number of manufacturing steps. 12 And cleaning the technology up could cut core 13 losses by as much as 50 percent. 14 DOE screened this technology out 15 because we are not aware of it ever being 16 incorporated into a working prototype of a 17 small electric motor, as defined by the 18 statute. And DOE is also uncertain whether 19 the material has structural integrity to be 20 formed into a small electric motor. 21 Finally, DOE is uncertain whether 22 the classic bonded iron powder would be

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 132 1 practical to manufacture, install, and service 2 because there is insufficient information at 3 this time. 4 And then, finally, permanent 5 magnet electric motors. And I apologize. 6 This should not be in the screening, should 7 not be a technology option. It is not an 8 induction motor, as defined by MG1-1987. So 9 this is not only screened out. It will not 10 appear in the NOPR. 11 So the next slide, 36, discusses 12 technology options that were selected for 13 further consideration.

14 FACILITATOR BROOKMAN: Nora? Is 15 it Nora? 16 MS. PUMPUNI: Yes, Gloria Pumpuni,

17 AHRI. 18 I guess I need some more 19 understanding of slide 36, the second option,

20 --

21 MR. SCHOLAND: Yes. 22 MS. PUMPUNI: -- technology option

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 133 1 there, --

2 MR. SCHOLAND: Yes. 3 MS. PUMPUNI: -- where you want to 4 remove the skew. I guess I am not quite sure 5 how -- I don't have a good understanding of 6 how that would work. Is it a design feature 7 or is it a manufacturing result to have this

8 skew? 9 I am just trying to see how taking 10 that out completely would impact. 11 MR. SCHOLAND: There are many 12 people more qualified than me to respond. And 13 we'll take the first hand there.

14 FACILITATOR BROOKMAN: I see John. 15 Yes, please?

16 MR. ANDRLE: John Andrle. 17 I would just like to say skew is 18 in the rotor core itself, the lamination. 19 There are slots in the lamination. And 20 they're not basically being looked at from the 21 end. The slot has an angle to it from one end

22 to the other.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 134 1 Basically, for a single-phase 2 motor, which here we're talking about the 3 capacitor-start induction-run, capacitor-start

4 run motor. We need to skew for the motor to

5 start. 6 So if we removed it by making the 7 skew from one end to the other straight on the 8 single-phase motor, the motor will not start. 9 So it's inherent in the design of the motor. 10 FACILITATOR BROOKMAN: Gloria, do 11 you have a follow-on there or are you okay? 12 MS. PUMPUNI: I guess that is what 13 I thought because it seemed to me to be 14 something that would be part of the design. I 15 guess in your other options, you are talking 16 about reducing or increasing, and this is 17 completely eliminating. And I just wanted to

18 know about that. 19 MR. SCHOLAND: Sorry. I 20 appreciate the question, your context for that 21 question. The Department does consider 22 technology options that are design-based,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 135 1 material-based, or otherwise. 2 Anything a manufacturer could do 3 to a motor to make it more efficient could be 4 classified as a technology option and 5 considered. So including adjusting dimensions 6 of core things, adjusting the diameters, those 7 could all impact, would all impact efficiency. 8 And so those are called technology options. 9 They may just be design-based, rather than a 10 material.

11 Yes?

12 FACILITATOR BROOKMAN: I see 13 several people wishing to comment. Michael 14 did not run through all 15 or so of these 15 items. Specific comments on them would be 16 helpful now.

17 Tom? 18 MR. HINK: Tom Hink. 19 I am just going to add to what was 20 already said related to skew that not only 21 does it impact the starting characteristics of 22 the motor. It also can impact the noise level

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 136 1 of the motor. And so that is something else 2 we have to take into consideration. 3 FACILITATOR BROOKMAN: Thank you. 4 Roger? 5 MR. DAUGHERTY: Roger Daugherty.

6 Yes. Another concern about skew 7 that maybe the Department of Energy didn't 8 recognize in 4.3.2, where they discuss it, is 9 that they seem to concentrate on the effect on 10 the torque characteristics. 11 As I went through the examples, I 12 don't recall right now having seen an analysis 13 of pull-up torque, which is the thing that is 14 related to these cusps and things I referred 15 to. But since we are dealing with efficiency, 16 it's interesting there's no statement as 17 actually what it does do to efficiency. 18 And in your example for the 19 three-phase motor that is in appendix 5A, you 20 assumed a value of stray load loss, which 21 suggests to me that you may not be calculating 22 it. And if you do calculate it, skew is one

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 137 1 of the items that goes into the calculation of 2 the stray load loss. 3 So you may have inadvertently not 4 recognized an effect of skew in making a 5 determination. 6 FACILITATOR BROOKMAN: Okay. So 7 the Department would like now for specific 8 comments on these items listed, 36, technology 9 options selected for further consideration. 10 Yes, please, Molly? 11 MS. TROMBLEY-McCANN: Molly 12 Trombley-McCann. 13 I just wanted to clarify. John, 14 it sounded like you were saying that skew is 15 necessary in order for the motor to start so 16 that removing skew entirely would make the 17 motor nonfunctional.

18 MR. ANDRLE: John Andrle. 19 Yes, that's correct. On a 20 single-phase motor, we need to skew to start. 21 And, as Roger pointed out, the effect is on 22 also pull-up torque, which is another

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 138 1 characteristic for mechanical loads, which 2 these general purpose motors are intended for. 3 FACILITATOR BROOKMAN: Thank you. 4 There are 15 items here or so. 5 MR. SCHOLAND: If you want me to 6 read them, Doug?

7 FACILITATOR BROOKMAN: Yes. You 8 should do it for the record as well. Yes. 9 MR. SCHOLAND: Sure. So just 10 going down the list: use of a copper diecast 11 rotor cage; removing skew on the conductor 12 cage; increasing cross-sectional area of the 13 rotor conductor bars; increasing end-ring 14 size; manipulating state or slot size; 15 decreasing the air gap between rotor and

16 stator not less than ten thousandths of an 17 inch; use improved grades of electrical steel; 18 use thinner steel laminations; anneal steel 19 laminations; add stack height; that is, more 20 electrical steel; use high-efficiency 21 lamination materials; install better bearings 22 and lubricant; install a more efficient

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 139 1 cooling system. Okay? 2 So those are all of the technology 3 options screened in and considered in the 4 engineering, but we're taking Roger's comment 5 about the effect of removing skew on the 6 torque and the assumptions. We will look into 7 that, having stray load losses. 8 Any other comments before we move 9 on? Because the next speaker is on deck. 10 (No response.) 11 MR. SCHOLAND: Matt Nardotti will 12 now take you through the engineering analysis.

13 ENGINEERING ANALYSIS 14 MR. NARDOTTI: Good morning. 15 Thank you, Michael, for that. My name is 16 Matthew Nardotti. And I am going to present 17 the preliminary engineering analysis that was 18 conducted for this rulemaking. 19 The engineering analysis is one of 20 the first major analyses conducted for the 21 rulemaking. As part of the engineering 22 analysis, we developed cost-efficiency

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 140 1 relationships that demonstrate the 2 manufacturer's selling price necessary for 3 achieving increased energy efficiency. 4 The results of this analysis are 5 used for a downstream analysis, such as the 6 life-cycle cost analysis, the payback period 7 analysis, and the national impacts analysis. 8 I would like to start off by 9 discussing to go through how we developed the 10 engineering analysis. The first step in 11 developing the cost-efficiency relationship is 12 selecting representative units to perform the 13 analysis on. 14 Because there are so many 15 equipment classes and DOE could not directly 16 analyze all of them, selection of these units 17 was critical to facilitate this analysis. 18 When choosing representative 19 units, DOE reviewed the small electric motors 20 determination analysis and manufacturer of 21 catalogues. While looking over this material, 22 DOE focused on three variables: motor

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 141 1 category or polyphase CSCR and CSIR motors, 2 the number of poles, and the horsepower 3 ratings. These are the same three ratings 4 that Michael talked about that define our 5 equipment classes. 6 DOE selected a representative unit 7 from each of the motor categories. So we 8 selected one polyphase, actually two CSIR

9 motors and a CSCR motor. 10 When considering horsepower, we 11 tried to capture the most common horsepower 12 ratings in the market for those motor types 13 for categories. And when we selected a pole 14 configuration, we only selected four pole 15 motors. And we did this for two reasons. 16 First, they have the highest 17 shipment volume. And four-pole configuration 18 falls within the middle of the range covered 19 between two and six poles. So we figured that 20 when we scale, that would introduce the least 21 amount of error, when we scale to other 22 equipment classes.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 142 1 So, as I mentioned, we chose four 2 representative units. And you can see them 3 here: a polyphase one-horsepower power, 4 4-pole 56-frame motor; a capacitor-start 5 induction on half horsepower; 4-pole, 56-frame 6 motor; a capacitor-start induction run 7 half-horsepower, 4-pole, 48-frame motor; a 8 capacitor-start capacitor run three-quarter 9 horsepower, 4-pole, 56-frame motor. 10 The horsepower ratings of the 11 polyphase and CSIR motors was taken directly 12 from determination analysis and considered to 13 be the most common in market, as I mentioned

14 before. 15 The horsepower rating for the CSCR 16 motor was taken as another common horsepower 17 rating for that motor type and also happen to 18 be right in the middle of the horsepower 19 ratings for the other two. 20 One thing I would like to note is 21 that we chose two CSIR motors with the same 22 horsepower, same pole configuration but a

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 143 1 different frame size. So, even though DOE is 2 analyzing two different representative units, 3 they still represent the same equipment class 4 and would be subject to the same standard as 5 we discussed before. 6 The reason we did this was to try 7 and determine some of the different 8 relationships that frame size can have on the 9 cost-efficiency relationship. 10 When DOE conducted the engineering 11 analysis, we attempted a sort of two-pronged 12 approach in which manufacturers would provide 13 their own cost-efficiency curves. And, in 14 parallel, DOE would develop its own 15 cost-efficiency curves that could be used to 16 validate those given to us by the

17 manufacturers. 18 To do this, DOE used a 19 subcontractor with proprietary software to 20 create our curves. The software helped to 21 develop an itemized bill of materials that, 22 along with labor time estimates and markups,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 144 1 allowed us to create manufacturer selling 2 prices for those representative units and 3 designs. 4 FACILITATOR BROOKMAN: Roger? 5 MR. DAUGHERTY: Roger Daugherty. 6 Just a question. As I see you're 7 going to be moving into it, the example 8 designs in appendix 5A, are those from a DOE 9 analysis of using this software to arrive at a 10 design? 11 MR. NARDOTTI: Yes. They're an 12 example of this. 13 So I would like to move on to the 14 overall methodology that we used after 15 selecting representative units. This slide 16 shows step by step the general methodologies 17 DOE used for the engineering analysis. DOE 18 began by defining the baseline specifications 19 for the four representative units that were 20 shown on the previous slide. 21 A baseline unit is a reference 22 point against DOE measures changes in

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 145 1 manufacturing selling prices and energy 2 efficiencies. The baseline unit in each 3 equipment class represents the fundamental 4 design, against which DOE would apply their 5 design changes to improve the motors' energy 6 efficiency. 7 Because there are no minimum 8 standards for small electric motors, the 9 baseline efficiency was selected after 10 reviewing efficiency ratings from the 11 determination analysis from manufacturer 12 catalogues in consultation with the 13 manufacturers and some technical experts. 14 More detail on the baseline units is given in 15 the preliminary TSD chapter 5. 16 After that, DOE developed design 17 restrictions, which we have already mentioned 18 several of them, for the subcontractor. These 19 restrictions and criteria were used in the 20 model to ensure that the final motor designs

21 were both reasonable and manufacturable. 22 After setting the restrictions,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 146 1 DOE developed five designs of increasing 2 efficiency for each of the representative 3 units. Design option combinations were 4 implemented in order of the shortest payback 5 period to the longest. So we end up graphing 6 a curve that has increased slope as you 7 increase efficiency. In other words, DOE 8 implemented the design options that give the 9 greatest increase in efficiency for the least 10 cost first. 11 Next, DOE took the bill of 12 materials, labor, time estimates and estimated 13 manufacturer markups to convert production 14 costs to a manufacturer selling price. 15 Finally, DOE compared its curves 16 to those that were provided by manufacturers. 17 FACILITATOR BROOKMAN: Roger? 18 MR. DAUGHERTY: Roger Daugherty. 19 With the respect of trying to 20 cover manufacturer markups and production 21 costs, as was pointed out earlier, there is a 22 possibility that you could arrive at a design

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 147 1 that doesn't fit into present tooling 2 equipment. 3 So was the replacement of 4 equipment considered in doing those 5 calculations? 6 MR. NARDOTTI: As Michael 7 mentioned before, that was not considered for 8 this part. And in the manufacturer impact 9 analysis when we come and visit you, we will 10 talk about those costs and ask you for what 11 they might be.

12 FACILITATOR BROOKMAN: That's 13 based on the standard designs that you have

14 constructed.

15 MR. NARDOTTI: Correct. 16 FACILITATOR BROOKMAN: Okay. 17 MR. SCHOLAND: Mike Scholand, 18 Navigant. 19 Just to add to what Matt has said, 20 that is the standard methodology the 21 Department applies in all of the energy 22 conservation standards rules, that the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 148 1 engineering analysis is based on the 2 presumption you have the equipment to do the 3 work. And the manufacturer's impact analysis 4 is where you quantify the change to equipment 5 you have today and the equipment you need in

6 the future. 7 So they just quantify that cost in 8 another of the 14 analyses. It is taken into 9 consideration by the Secretary. 10 FACILITATOR BROOKMAN: John first, 11 please.

12 MR. ANDRLE: John Andrle. 13 I have a question about your 14 manufacturer data validation. Could you 15 explain that a little more? The reason I ask 16 this is that we have had experience with a 17 number of different programs that have come 18 from different sources because of 19 consolidations that have happened. 20 In every case, we have had to take 21 the design program. And we have had to 22 validate it against the actual production to

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 149 1 verify that the model that we're using does 2 give us accurate results.

3 So unless the actual model has 4 been compared to an actual product, there is 5 certainly room for error in the output. 6 MR. NARDOTTI: The intent of the 7 validation was that manufacturers provided us 8 with curves. And then the curves that were 9 generated by our subcontractor would be 10 compared. And hopefully there wasn't too much 11 difference between the two curves. 12 Jim? 13 FACILITATOR BROOKMAN: Jim Raba? 14 PRESIDING OFFICER RABA: Jim Raba,

15 DOE. 16 I just want to also mention where 17 Matt alluded to when we visit you, which means 18 that in the course of the manufacturer impact 19 analysis, it has been a longstanding process 20 here for the Department to actually visit 21 manufacturers on a confidential basis that 22 together the specific information about cost,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 150 1 things like that, which will then be 2 aggregated, whatever, masked and used 3 thereafter in the analysis but to guess these 4 numbers specifically about these process costs

5 and all. 6 So these interviews are very

7 useful to us. We understand we do not 8 disclose the data once it is received -- I 9 don't see it -- but that it is very useful to

10 know these exact numbers. 11 Again, there is a presumption we 12 go by because of our process, but it is 13 refined more later on in the analyses. So 14 there will be at some point in time interview 15 guides sent out from the Department, just a 16 list of things to discuss and go over what we 17 can and gather some more data from your 18 experience as well, too. So it's just the 19 beginning of the process. We have to operate 20 under presumptions and process. We, shall we 21 say, take a closer look as we move along in 22 our analyses.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 151 1 FACILITATOR BROOKMAN: In that 2 interview process?

3 PRESIDING OFFICER RABA: In the 4 interview process. 5 FACILITATOR BROOKMAN: Thank you. 6 Okay. 7 Yes, please, Dale? 8 MR. BASSO: I'm just curious. In 9 the modeling, did you take into account the 10 various increments of frame length change or 11 was it strictly a core length analysis and you 12 assumed the rest of the mechanical package was 13 the same for a frame size? 14 FACILITATOR BROOKMAN: Michael

15 Scholand? 16 MR. SCHOLAND: Mike Scholand here. 17 I'm asking Bill Yeadon from Yeadon 18 Energy Systems, who did the modeling on our, 19 on the Department's, behalf, to respond to 20 some of these comments. He did tell me just 21 now that his software is validated against 22 real designs that have been built.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 152 1 Bill, could you step up and speak 2 a little bit to that and the gentleman's 3 question? 4 MR. YEADON: Yes. Bill Yeadon 5 from Yeadon Energy Systems. Our software 6 basically is based off of algorithms done by 7 Veinott, Trickey and people like that in the 8 past. 9 And we validated against real live 10 motors. So we're fairly certainly that it is 11 fairly accurate. Of course, you have to input 12 the right information. 13 What was the last question? When 14 you say "frame," you're talking about the 15 outside housing? No. We increase stack 16 length, irrespective of the outside housing.

17 That's correct.

18 MR. BASSO: You assumed that one

19 -- 20 MR. YEADON: No. We assumed you 21 had a housing that would fit it. That's

22 correct.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 153 1 FACILITATOR BROOKMAN: Okay. 2 Thanks for that clarification. 3 MR. SCHOLAND: Sorry, Matt. Mike 4 Scholand again. 5 Dale, if you could suggest ways 6 that the Department could take into account 7 housing, the C dimension issues into its 8 engineering analysis, that would be greatly 9 appreciated. 10 MR. NARDOTTI: So I would like to 11 move on to the design restrictions that we 12 gave. This slide shows three of the nine 13 design restrictions that we ultimately 14 established for the motor designs. 15 I mentioned that these design 16 restrictions were meant to ensure a set of 17 reasonable and manufacturable designs. The 18 intent was that increasing the efficiency of 19 the baseline motor, you don't sacrifice 20 consumer utility.

21 We also wanted to note that the 22 manufacturability is on a large-scale. So, as

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 154 1 Rob Boteler mentioned, with slot fill and 2 individual pulling of wires, we tried to avoid 3 that in our first design restriction here. 4 So the first design restriction 5 was peak slot fill. The maximum value that we 6 set for this parameter was 75 percent for an 7 assumed, as I said, high-volume simultaneous 8 insertion process. And we defined slot fill 9 as the area of wire, including installation, 10 divided by the total slot area available for 11 the winding. 12 For the air gap between the rotor 13 and stator, the air gap between those two

14 should not be less than ten hundredths of an 15 inch. Having an air gap tighter than this, 16 this minimum amount could be problematic and 17 may cause contact between the spinning rotor 18 and stator, especially as shaft length 19 increases. 20 For a stator slot opening, the 21 opening in combination with the copper wire 22 gauges used should graph to a point in the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 155 1 level wind area of the blade gap chart taken 2 from Alliance Winding. Unfortunately, we

3 don't have that here. We don't show that 4 chart. But it is available with Alliance 5 Winding. 6 Without this restriction, we 7 expressed concern that there may be too many 8 issues with wire breakage or jamming of the

9 manufacturer's tools. 10 So for the next three, stack 11 height, as we have already started to discuss, 12 we allowed a change of up to 100 percent 13 relative to the baseline height. So that's 14 doubling the length of the motor. This design 15 option we felt would enable to regain in 16 induction when steel grades were improved. 17 For the locked rotor torque, we 18 wanted the locked rotor torque to stay within 19 ten percent of the baseline motor and also be 20 kept within a specification set forth by NEMA, 21 MG1-1987 in section 12-32.2 so as to maintain 22 that it's still covered under the scope.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 156 1 Similarly, the locked rotor current should 2 fall within the specifications of NEMA. 3 Roger? 4 MR. DAUGHERTY: Roger Daugherty. 5 With respect to the locked rotor 6 current, the reference that is provided here, 7 design in, is for single-phase equipment only. 8 It is a different table that applies to the 9 polyphase. It is also covered by small

10 motors. 11 And the values are different in

12 the two tables. 13 MR. NARDOTTI: This was just an 14 example of one of the numbers from the table. 15 It wasn't meant to apply to one of the -- 16 FACILITATOR BROOKMAN: However, 17 the specifics can be very important. So I'm 18 glad you raise them when you do. 19 Yes, please? 20 MR. DAUGHERTY: Roger Daugherty. 21 Yes. I wasn't questioning the 22 value but the fact that you are referencing

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 157 1 the particular table. And you also did that 2 over in chapter 5. 3 MR. NARDOTTI: Okay. 4 MR. DAUGHERTY: So my point is 5 that you never discuss the table that applies 6 to polyphase equipment. 7 MR. NARDOTTI: Thank you. This 8 slide has the last three design restrictions 9 we used: breakdown torque. Similarly, again, 10 we wanted to keep it within the restrictions 11 set forth in NEMA. 12 The cooling system, we wanted the 13 parameters that were directly related to the 14 motors' cooling system, such as the 15 ventilation openings in the laminations. They 16 should not be modified in any manner that will 17 increase the operating temperature of the

18 motor. 19 And rotor skew, the rotor skew may 20 be altered, but it cannot be raised or lowered 21 to a point that will introduce harmonics that 22 adversely affect motor performance or

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 158 1 introduce cusps in the acceleration curve. 2 This was brought up a few moments ago. 3 And this is a design option that 4 was very subjective to Bill's expertise in 5 motor design. 6 FACILITATOR BROOKMAN: Roger? 7 MR. DAUGHERTY: Roger Daugherty. 8 I think there is something else 9 that you need to include in this 10 manufacturability in addition to these items 11 that you have. If we visit appendix 5A and we 12 look at 5A.1.2, "Rotor Dimensions," I'll note 13 that what is being discussed here is a 14 56-frame motor. For a 56-frame motor, the 15 NEMA standard diameter for the shaft is 16 five-eighths of an inch. 17 And it is common that the shaft 18 diameter that goes under the bearings is 19 greater than the external shaft diameter. It 20 is also common that the bearings on both ends 21 of the machine have the same ID. They can be 22 different, but it is common that they are the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 159 1 same. 2 So we are at a value that, at 3 least at the bearings, we are in excess of 4 five-eighths of an inch. The value that is 5 given for the rotor diameter in this design is 6 half an inch. So pressing that rotor that has 7 a half-inch diameter over those bearings that 8 are in excess of five-eighths of an inch 9 diameter would be very difficult to achieve. 10 MR. NARDOTTI: Thank you. 11 In total, DOE developed 20 12 designs. After the designs were created 13 following these guidelines, the next step was 14 developing costs for each design. 15 At this point I would like to 16 discuss the cost model and some inputs that 17 DOE used to develop the manufacturer selling 18 prices. As you can see from this graphic, 19 full production costs along with manufacturer 20 and markups or the nonproduction costs gives 21 us a manufacturer selling price. 22 The full production costs consists

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 160 1 of direct material, direct labor, factory 2 overhead, and depreciation. The bulk of the 3 full production costs can be attributed to 4 direct material and direct labor costs. And 5 those costs were calculated from the outputs

6 of the subcontractor's software. So I would 7 like to move on to talking about those two, 8 starting with the bill of materials. 9 The cost model inputs for 10 materials are organized into three types of 11 costs: fixed, variable, and semi-fixed costs. 12 Fixed costs are for those materials or 13 components that do not change from design to 14 design; so, for example, your switches or ball 15 bearings. 16 Variable cost items represent 17 those components that change in both the 18 amount of material used and the material price 19 paid from design to design. 20 An example of this is stator 21 lamination costs are variable because the 22 steel grade changes from design-design. When

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 161 1 the steel grade changes, so, too, does the 2 price paid per pound, but also so, too, does 3 the amount of steel that goes into it. 4 Semi-fixed costs are for those 5 materials whose prices are constant but the 6 amount of material used varies depending on 7 the design. An example of this is the 8 aluminum or copper used to diecast the rotor. 9 The price paid for that aluminum or copper 10 stays the same, but when you lengthen the 11 motor, the amount of aluminum or copper used 12 would then increase and change the amount paid

13 for that. 14 Here I would like to show a few 15 specific material costs that we use and 16 welcome any input to the prices that we used.

17 FACILITATOR BROOKMAN: Steve

18 Rosenstock?

19 MR. ROSENSTOCK: Steve Rosenstock 20 with EEI. 21 I am looking at slide 47. As 22 everyone has seen, commodity markets have gone

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 162 1 pretty crazy the last couple of years. I 2 think the recent price of copper on the 3 exchange was like $1.50 a pound. And so I am 4 sure aluminum probably went down -- I don't 5 know -- not as far but significantly. 6 I am kind of curious how DOE is 7 going to model some of these pretty wild 8 gyrations and metal prices over the next few 9 years. I am not sure where the baseline is 10 going to be over the next five or ten years. 11 It's going to be kind of interesting or if 12 they were going to reach their peaks that they 13 were just a couple of years ago. 14 MR. NARDOTTI: Thank you for that 15 comment. We welcome any input on accounting 16 for those drastic changes in the prices. 17 FACILITATOR BROOKMAN: Michael

18 Scholand? 19 MR. SCHOLAND: Mike Scholand. 20 Just for a point of information 21 and perhaps a request for input from 22 manufacturers. We had a similar problem in

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 163 1 the rulemaking for distribution transformers, 2 for which material costs are a significant 3 part of manufacturers' costs. And at that 4 time steel prices and copper prices and 5 aluminum were all over the map. 6 What the Department elected to do 7 for the final rule was to create a five-year 8 average price. And I believe it spanned 2001 9 through 2006 and took a simple average of 10 those years correcting for inflation over that 11 time period. And that gave us a value that

12 was used to create manufacturers' costs for 13 the year of analysis. 14 So that is a possible method. And 15 if manufacturers believe it would be possible 16 to provide historical trends in material 17 prices, DOE could do a similar approach on 18 this rule. 19 Thank you. 20 FACILITATOR BROOKMAN: Charlie? 21 MR. STEPHENS: Charlie Stephens, 22 Northwest Energy Efficiency Alliance.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 164 1 I think when you get into the 2 life-cycle cost analysis, if I'm not mistaken, 3 you will be using a distribution of costs for 4 the motor itself, the resulting motors, at the 5 various efficiency levels. 6 And it seems to me that a similar 7 distribution could be used for the prices of 8 the materials going into the motor, which 9 would then produce a distribution of a 10 different, different distribution perhaps and 11 a wider distribution of motor costs at the

12 other end. 13 But it seems that that same kind 14 of crystal ball approach could also yield some 15 interesting information if we don't feel that 16 things will settle down. 17 FACILITATOR BROOKMAN: Okay. 18 Thank you. 19 MR. NARDOTTI: Thank you. That's 20 a good comment. 21 Anything else before I move on? 22 (No response.)

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 165 1 MR. NARDOTTI: As I mentioned, the 2 second major component of the full production

3 --

4 FACILITATOR BROOKMAN: Let me 5 emphasize one thing. In your written 6 comments, please do emphasize how the 7 Department might deal with these differences, 8 this variability in costs. Michael suggested 9 one pathway. If you've got ideas, that would 10 be very helpful to the Department. 11 MR. NARDOTTI: The second major 12 component of the full production cost is the 13 labor cost. DOE starts with an unburdened 14 labor rate per hour, shown in this slide, and 15 then applies several subsequent markups to 16 calculate the fully burdened labor rate.

17 The unburdened labor rate was 18 taken from the 2002 Economic Census of 19 Industry. The markups for indirect 20 production, overhead, and the assembly labor 21 up time were all DOE estimates. The fringe 22 markup was also taken from the 2002 Economic

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 166 1 Census of Industry. 2 I would like to point out the last 3 markup, the nonproduction markup, because you 4 will see it again on the next slide. If you 5 wish for any explanation of what those markups 6 entail, it's in tiny font below the chart. 7 It's also in the TSD chapter as well. 8 FACILITATOR BROOKMAN: Roger? 9 MR. DAUGHERTY: Roger Daugherty. 10 Maybe you will say if I go read 11 the information, but let me just ask. You 12 give a markup percentage, and it's based on 13 something. Could you just go through an 14 example of how one item that is marked up 33 15 percent ended up at $18.02 and one that was 16 marked up 28 percent ended up at $29? 17 Are you using some other base for 18 each of these items and then marking that base 19 up or are you using a common base and marking 20 each of those items up? 21 MR. SCHOLAND: Mike Scholand. I 22 can respond as I helped Matt with this table.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 167 1 In essence, it's compounding as 2 you go down the column. So the 33 percent is 3 applied to the $13.55, to arrive at $18.02; 4 and then 30 percent, to arrive at $23.43; and 5 then 28 percent markup to get to 29.99. 6 As you go down, I'm sorry that the 7 table is not very clear. I realize now that 8 you're looking at it. We'll try and make a 9 little clearer presentation for the NOPR. 10 Thank you. 11 MR. NARDOTTI: So this slide shows 12 three cost model markups, three more cost 13 model markups, that DOE developed. And 14 numbers here represent industry averages or 15 estimates of the industry average. 16 Scrap factor is a markup used to 17 account for unused material that is discarded 18 in the factory. The factory overhead markup 19 accounts for costs associated with production, 20 indirect materials, energy use, taxes, and 21 insurance. 22 These two markups were only

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 168 1 applied to the bill of materials. They were 2 applied in that order and with cumulative 3 effect, just as the labor rate was marked up. 4 The similar effect is to the bill of 5 materials. So the factory overhead markup was 6 applied to the bill of materials plus the 7 additional cost of the scrap. 8 Now, I mentioned that the 9 nonproduction markup would be shown. And it 10 is shown again here. DOE estimated this 11 markup from publicly available financial 12 information. 13 Publicly held corporations file 14 annual reports with the Securities and 15 Exchange Commission called 10-Ks. Information 16 contained in these reports, such as total 17 revenues, allowed DOE to estimate 18 corresponding markups for each of the 19 manufacturers and, thus, in industry as a

20 whole. 21 This manufacturer markup is to 22 account for costs associated with sales,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 169 1 general administration work, research and 2 development, interest payments, and profits. 3 The nonproduction markup was 4 applied to both the labor rate and the bill of 5 materials that has been marked up by the scrap 6 factor and the factory overhead markups. 7 So when you finally add the 8 marked-up bill of materials and the labor 9 estimates, labor cost estimates, you get the 10 full manufacturer's selling price. 11 So now I would like to move on to 12 some of the results that we received. Here we 13 have the results of the polyphase 14 one-horsepower 4-pole 56-frame motor. 15 FACILITATOR BROOKMAN: Yes, 16 please? 17 MR. HORNQUIST: Edwin Hornquist, 18 Southern California Edison. 19 I mean, it's a quite drastic 20 change of course that is visible here. It's 21 over a 100 percent increase between I guess 22 premium plus and max. tech. What is driving

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 170 1 that? 2 MR. NARDOTTI: The material cost 3 used for the exotic steel Hiperco 50 that we 4 used was extremely high. And that definitely 5 skews the graph that we show here. 6 In the preliminary TSD, we 7 actually show this same graph without that 8 max. tech., the max. tech. point. And you can 9 see a relationship between those bottom four 10 points. 11 The reason we did that is because 12 when you go from the fourth level to the fifth 13 level, besides this motor, there was barely 14 any gain in efficiency. So we thought that 15 you would get a better idea of the cost 16 efficiency relationship without seeing that 17 last point.

18 MR. SCHOLAND: Excuse me one 19 second. Mike Scholand. 20 Just as a point of information, 21 the slide 47 does not mention the dollar per 22 pound for Hiperco. The assumption was $75 a

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 171 1 pound. 2 MR. NARDOTTI: Thank you, Michael. 3 FACILITATOR BROOKMAN: So if you 4 are skeptical about such things, it would be 5 good for you to speak up. 6 MR. HORNQUIST: Edwin Hornquist 7 again. 8 Not that I'm skeptical, I like to 9 just understand how the prices come about and 10 what the source of the estimate is. 11 FACILITATOR BROOKMAN: Okay. 12 Thank you. 13 MR. NARDOTTI: Right. Thank you. 14 FACILITATOR BROOKMAN: Roger, did 15 you have a comment here? 16 (No response.) 17 FACILITATOR BROOKMAN: Okay. 18 Thank you.

19 MR. NARDOTTI: These are some of 20 the major designs, design specifications that 21 were found for the polyphase motor that we 22 analyzed.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 172 1 And, as you can see, the torques 2 remained relatively constant, which was one of 3 the performance characteristics we wanted to 4 restrict. 5 Are there any questions or

6 comments about those? 7 FACILITATOR BROOKMAN: Roger? 8 MR. DAUGHERTY: Roger Daugherty. 9 To understand some of my 10 questions, we will need to go to appendix 5A, 11 where I believe the details are provided for 12 what is listed in table 5.5.2. That's 13 premium, the 85 and a half percent.

14 FACILITATOR BROOKMAN: Does he 15 need to look at it? 16 MR. DAUGHERTY: I can try to read 17 them as I go. 18 FACILITATOR BROOKMAN: Okay. 19 MR. DAUGHERTY: As I already 20 mentioned, I personally have a difficulty with 21 a half-inch interior diameter rotor and 22 getting it onto the machine.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 173 1 So if I were to assume that it 2 were to have to go to a more typical value of 3 close to an inch, that will remove a lot of 4 material under these rotor slots that are 5 being used in the model. And something is 6 going to have to be done with that.

7 That leads me to look at the rotor 8 diameter that is being used. And I find that 9 that is not quite typical of what I see of 10 four-pole machines, but I won't argue that 11 there are ways that you can do designs and you 12 can get different configurations. But once 13 you raise that ID, I don't think you're going 14 to be able to work with that OD. 15 I noticed that in this appendix, 16 while you do present some of the torque 17 information and things, it is real interesting 18 that there is no full load data here, that 19 while some of that is summarized over in the 20 main table, it doesn't appear in this analysis 21 of the machine. 22 So I tried to look at trying to

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 174 1 calculate some of the losses and things and 2 make comparisons against what is in here. 3 And, as I did those, I got a little concerned 4 that when I looked at the full load current, I 5 saw it said it was four amps. 6 Typically for a standard efficient 7 motor in this product range and even as we 8 have looked into premium efficiency motors, we 9 see levels that are down around three amps and

10 less. 11 So it led me to a power factor. 12 And I found that when I tried to get power 13 factor, which wasn't in the tables, that the 14 power factor of this machine appears to be 15 around 54 percent, which is a very, very low 16 power factor. 17 Manufacturers have been pushed 18 upon by their users and their OEMs to keep 19 that power factor up as high as possible. 20 And, if I could just give you an example, my 21 father had a motor repair business in a rural 22 area in Ohio. It's probably 100-200 miles

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 175 1 away from the power plant. 2 And although all he was doing was 3 repairing farm motors and small motors and low 4 integral horsepower, the power company came 5 in. And they installed a power factor meter 6 on his facility. So that if he tested one of 7 those motors -- and the only other stuff in 8 there is lighting and a few other pieces of 9 equipment. 10 So when he would try to test a 11 20-horsepower motor, which was a rare build 12 for him, that would drive his power factor 13 down. And suddenly he would get penalized. 14 And so we have these pushes from 15 our customers that when you go from three to 16 four amps, that is current. You're having to 17 draw through the whole power system to get to 18 that motor. And so power factors vary serious 19 criteria in our designs. 20 So I think that's another thing 21 that I'm saying you have to look at when you 22 are trying to arrive at these designs. So,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 176 1 like I said, I was just amazed that it wasn't 2 convenient. 3 I couldn't find any of the loss 4 breakdown in the data. So, like I said, I had 5 to try to revive what that information was, 6 how much was loss in stator, what the rotor 7 loss was. I see stray load loss was an 8 assumed value of one percent. 9 If you go to the IEEE standard 10 112, which is our recommended test procedure 11 for polyphase motors, you will see that if you 12 don't follow one of the test procedures for 13 measuring stray load loss, the assumed value 14 for one horsepower to -- I forget the upward 15 number right now -- is 1.8 percent. It's not 16 one percent. 17 Of course, as we move into more 18 highly efficient motors, we certainly are 19 working to reduce that stray load loss. And 20 that 1.8 percent, of course, is from a 21 standard that was written well before my time. 22 And I became involved in that standard.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 177 1 The other thing I noticed, that 2 when I was looking at the rotor resistance of 3 the design, I was struck by that because I 4 thought, "Well, wait a minute. I'm given a 5 full-load speed here of 1,709 rpm." 6 So I go to various product 7 catalogues and things. And what I find is 8 1,785 rpm. So I wondered, "Well, why is this 9 speed so low?" Well, it's related to that 10 rotor resistance. And that's rotor I squared

11 R losses. 12 An another instance, this has 13 become a serious problem. As we moved into 14 EPACT of '92 and went into the integral 15 horsepower motors, DOE put together a 16 committee of manufacturers, pump suppliers, 17 users, et cetera, advisers, where we looked at 18 how we could have improved system 19 efficiencies. 20 And we started getting feedback 21 that as we pushed these more efficient motors 22 onto the market, we tended to increase the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 178 1 speed of the motor. And when we increased the 2 speed of the motor, the user started getting 3 more output out of his system. 4 Well, that looked a benefit, but

5 the trouble was he was so used to the amount 6 of output that he did have if he couldn't use 7 it, he had to throttle it all. 8 And so now suddenly I see 9 something that is just the opposite. And I 10 don't know if this has been considered in your 11 analysis when you get to your life-cycle costs 12 and everything, but suddenly the speed here is 13 way down from what is typical. 14 So if you were to put this motor 15 as a replacement motor into a user's 16 application who is used to running at 1780 17 rpm, his output of his system is going to go

18 down. 19 Now, will that provide the 20 sufficient output he needs? I can't answer 21 that. That is up to him to say. So when I 22 look at this design that is presented, I can't

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 179 1 manufacture it. I think I would be concerned 2 about the power factor is very low. I would 3 be concerned that the speed is low compared to 4 what is out there in replacements, let alone 5 all the issues about the stack length and 6 other criteria. 7 So, number one, I would certainly 8 like to see this information increased so that 9 all of the information of the design is 10 presented, the loss breakdown so you can get a 11 feel of where they are at. But be 12 knowledgeable of when you change things in 13 this high full-load current. Well, where does

14 that come from?

15 You look at no-load current. That 16 no-load current is high. And that means that 17 if a customer throttles back and runs this 18 thing at no load for an extended period of 19 time, at which he is doing no useful work, he 2 20 is pulling more energy through I R losses in a 21 power system than he would with the motor that 22 he is replacing.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 180 1 All these things are of concern to

2 the user. And all of these needs to be 3 addressed when you are trying to arrive at, is 4 this a satisfactory design for this efficiency 5 level? And what use is this design going 6 into? 7 MR. NARDOTTI: Thank you. 8 FACILITATOR BROOKMAN: Thank you.

9 Steve Rosenstock? 10 MR. ROSENSTOCK: Steve Rosenstock, 11 Edison Electric Institute. 12 Just to follow up on the power 13 factor issue, typically, especially for 14 industrial applications, where there are power 15 factor meters, utilities want to see a 16 facility-wide, not equipment by equipment but 17 facility-wide power factor of greater than 90 18 percent. 19 And obviously the larger motors 20 are well above 90 percent all the time, but, 21 again, that would be useful information to 22 have if certain motor designs have

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 181 1 significantly lower power factors and there is 2 a possibility, especially in terms of the 3 life-cycle cost analysis of power factor 4 penalties, which would affect the economics. 5 Thank you. 6 MR. NARDOTTI: Thank you.

7 So here's the second cost 8 efficiencies curve for the capacitor-start 9 induction-run, half horsepower, 4-pole, 10 56-frame motor that we analyzed.

11 FACILITATOR BROOKMAN: That's what 12 I would call a steep increase.

13 Go ahead. 14 MR. NARDOTTI: Again, we have some 15 of the specific design specifics, some of the 16 major design specifications except, as you 17 mentioned, power factor, which we will 18 consider in the next phase. Thank you. 19 This is the 48-frame CSIR motor 20 and, as you can see, the efficiency values and 21 manufacturer selling prices that we found; 22 again the design specs.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 182 1 I'm just running through these. I 2 don't know if it's worth stating all of the 3 efficiencies and selling prices that we came 4 up with. 5 FACILITATOR BROOKMAN: I think 6 it's useful to just briefly describe the 7 characteristics of each result, of course, not 8 the entire table but at least for the record 9 identify them individually. I guess so why 10 don't you do that.

11 MR. NARDOTTI: Sure. 12 MR. HORNQUIST: Edwin Hornquist, 13 Southern California Edison. 14 I'm wondering how the calibration 15 of these estimates compared to the

16 manufacturer's actual costs of these motors.

17 MR. NARDOTTI: You mean the curves 18 that they provided us? 19 MR. HORNQUIST: Right. 20 MR. NARDOTTI: Actually, we 21 entered into nondisclosure agreements with the 22 manufacturers and did not receive sufficient

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 183 1 response from them such that we could 2 aggregate their data without exposing some 3 sensitive material. So we can't disclose what

4 those curves were. 5 MR. HORNQUIST: Edwin Hornquist 6 again. 7 I am sure this is -- there is 8 somewhere in between where information can be 9 shared so that we know that what we're looking 10 at is validated with real information from the

11 market. 12 I will just bring up -- this is 13 more of a question, just for information 14 purposes. If the manufacturers can address 15 this or perhaps the consultant? 16 On this Hiperco material, I am 17 wondering, is this a theoretical motor or is 18 there a motor that is actually manufactured? 19 And what is the application? 20 I mean, the cost is so immense why 21 would they even be entertained. 22 MR. NARDOTTI: As Mike mentioned

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 184 1 in the max. tech. model, we have to account 2 for all technology options. So this is a 3 theoretical model. It wasn't one that was 4 actually built. It was an output of our 5 subcontractors' design software and a function 6 of his algorithms. 7 MR. SCHOLAND: Mike Scholand. 8 Just to add to Matt's response, my 9 understanding is that this is used where cost 10 is no object, such as in the space program. I 11 believe NASA has used Hiperco in some motors 12 in the space shuttle. That's my 13 understanding. 14 MR. NARDOTTI: That's the material 15 itself, but the design, the max. tech. motor 16 design, here is not one that was actually 17 built. 18 MR. HORNQUIST: Edwin Hornquist 19 again. 20 So, just to entertain this idea, 21 is there any seriousness of ever entertaining 22 this idea as a possible material for actual

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 185 1 motors for general service?

2 FACILITATOR BROOKMAN: Rob? Do 3 any of you work for NASA? 4 MR. BOTELER: I think that for the 5 applications that we're talking about, that 6 the cost-benefit would just not be there. To 7 my knowledge, none of the manufacturers are 8 looking at this as a solution. 9 FACILITATOR BROOKMAN: Yes, 10 please, Dale?

11 MR. BASSO: Dale Basso. 12 I will make a comment to that. 13 You know, that is one technology they looked 14 at as manufacturers. As Rob stated earlier, 15 we have other technologies that will bring 16 much more benefit to the cost that we're using

17 to -- 18 FACILITATOR BROOKMAN: And they're 19 not included in the list still? 20 MR. BASSO: It's not in this list, 21 things like permanent magnet rotor.

22 FACILITATOR BROOKMAN: So those

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 186 1 are the things that would be helpful for the 2 Department for you to note in your comments. 3 Robert, please?

4 MR. VAN BUSKIRK: Robert Van 5 Buskirk. 6 Just to clarify why the maximum 7 technologically feasible is included in those 8 cost curves in this way, when you are doing 9 the cost-benefit analysis, we have a few 10 designs. 11 And you want to be able to look at 12 the cost curve, even beyond where the current 13 market is. And you want to be able to 14 characterize that and see at what point on 15 increasing efficiency there is a very large 16 increasing cost. So it's useful to have those 17 maximum technologically feasible designs to 18 define the upper end of the cost. 19 FACILITATOR BROOKMAN: Thank you, 20 Robert. Okay?

21 MR. NARDOTTI: If there are no 22 more questions or comments about these

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 187 1 designs, I would like to move on to what was 2 actually excluded from your original packet. 3 There is the sheet, the single 4 sheet, on scaling. So this is the last part 5 of the engineering analysis that I would like 6 to discuss. And it is how we develop the 7 method for scaling. 8 We started off by modeling the 9 motor losses as a function of horsepower. To 10 do that, we plotted the standard levels 11 adopted by the Energy Independence and 12 Security Act. 13 The graph here shows a term that 14 we dubbed as "delta," which represents 100 15 minus the efficiency level. That was plotted 16 against the horsepower on a logarithmic scale. 17 As you can see from the equations 18 on the graph, delta decreases according to a 19 power law equation with an exponent value near 20 -.25 for the 3 different: the 2, 4, and 21 6-pole motors. 22 FACILITATOR BROOKMAN: Roger?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 188 1 MR. DAUGHERTY: Roger Daugherty. 2 Over in clause 5.6.2, where you 3 address this issue in chapter 5 of the TSD, 4 you were defining two different deltas. One 5 was the one that you just mentioned is based 6 on 100 minus efficiency level. 7 That is an interpretation, but the 8 introduction to this, you talk about motor 9 losses and that you're going to be looking at 10 losses. But then you get to this delta, as 11 you have defined it. 12 It is a concern that manufacturers 13 have always had that people continue to 14 prosper with the notion that somehow 15 efficiency or losses is 100 minus the 16 efficiency level, which is not a correct 17 interpretation of motor losses. 18 But you do have a second 19 representation of delta, which is essentially 20 100 over the efficiency level minus the 21 efficiency level. And that is the true 22 representation of motor losses or the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 189 1 percentage of losses in the machine. 2 I note that I don't know if you 3 made that conclusion about this .25 exponent 4 in looking at delta in the second manner, but 5 I will note that it is approximately that when 6 I looked at it. 7 I would just like to encourage 8 that the Department of Energy when they're 9 publishing information and they're trying to 10 relate to losses and things in motors, that 11 they use the industry standard relationships. 12 If it's not necessary to introduce or 13 continue trying to put out erroneous 14 relationships, you will not do so. 15 I think you will reach the same 16 conclusion here with the way that you were 17 doing this linearalization on a log-log plot 18 if you use your second definition and just 19 strike your first definition totally out of

20 the document. 21 I do notice that this chart that 22 you handed out today does indicate I think

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 190 1 that the plot is different than it is in 2 figure 5.6.2 in chapter 5 because in that one, 3 the relationship you express for the y-axis is 4 the other delta relationship assuming 5 efficiency is given in a per-unit value, 6 instead of a percent value. Yet, your chart, 7 that value would always be below one. But you 8 show in your plot that you went above ten as 9 you got over to the axis. 10 So that one was confusing to me, 11 but today it appears that you may have cleaned 12 it up by using this 100 percent minus 13 efficiency. But, like I said, I would like to 14 encourage that you go back and just use 15 standard relationships for motor losses.

16 FACILITATOR BROOKMAN: Robert? 17 MR. VAN BUSKIRK: So yes, the 18 Department looked at both relationships. The 19 standard relationship of the one over 20 efficiency minus one yields a slightly 21 different exponent for the horsepower. 22 So I guess my question to you is,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 191 1 the Department can interpret your comment to 2 use the standard relationship. And the 3 slightly different exponent would be your 4 preference. 5 MR. DAUGHERTY: Roger Daugherty. 6 I guess all I can say, the way the 7 Department is manipulating these numbers, that 8 yes, using the other relationship would be a 9 slight change in the exponent. I would not 10 necessarily say that I agree with the 11 manipulation the way it is being done, that 12 projecting information on three-digit frame 13 sizes back into two-digit frame sizes of small 14 motors, whether or not that is really a true 15 projection.

16 MR. VAN BUSKIRK: So can the 17 Department interpret that comment as saying 18 that you would like the Department to validate 19 the relationship for the smaller frame size

20 motors? 21 MR. DAUGHERTY: Roger Daugherty. 22 Yes, that you look into values in

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 192 1 present product and use those -- if you are 2 going to in CSLs linearalize on a log-log 3 scale and don't use integral horsepowers in 4 three-digit frame sizes. 5 MR. VAN BUSKIRK: That will be 6 useful to the Department. Thanks. 7 PRESIDING OFFICER RABA: Jim Raba,

8 DOE. 9 Again, just for clarity, if there 10 is, as you say, just use standard industry 11 relationships, spell it out. Let us know in 12 your comments what those relationships are. 13 I think we've said here, but, 14 again, in writing, your written comments from 15 the industry or anyone else who is 16 understanding this more thoroughly make it 17 very clear what the thoughts are on that 18 standard industry relationship. 19 MR. NARDOTTI: Continuing. So 20 doing some math that Roger actually alluded to 21 that's in the preliminary TSD chapter 5, we 22 end up with the equation that you see at the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 193 1 bottom of this page. I would like to point 2 out two items, two terms from this equation.

3 FACILITATOR BROOKMAN: You're 4 referring to supplement number 1, right, 5 supplement slide 1? 6 MR. NARDOTTI: Yes, yes. Excuse

7 me. 8 So I would like to point out two 9 terms of this equation. One of them is that 10 term "efficiency (1)." This value is the key 11 to defining similar CSL levels for different 12 motors. I will actually come back to this 13 term in a couple of slides to describe how. 14 The second term I would like to 15 note is the constant “K," which I will go into 16 more depth now. To scale from equipment 17 classes analyzed in the engineering analysis, 18 DOE needed to make three assumptions. 19 The first was that efficiency can 20 be defined as a function of horsepower. The

21 second was that the standard for 22 one-horsepower, four-pole open-constructed

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 194 1 motors was a valid reference point for the 2 equivalence small electric motor that we 3 analyzed. Again, that deals with the term 4 "efficiency (1)," and I'll come back to. 5 The last assumption that we needed 6 to make was that a similar efficiency level, 7 for example, a NEMA premium level, for 8 different equipment classes can be described 9 by some constant, which is this value K. 10 K is used to describe changes when 11 scaling from a polyphase motor to either a

12 CSIR motor or a CSCR motor but also from 13 scaling to a two-pole or six-pole from a 14 four-pole motor. 15 The ratio of the lead coefficients 16 on the equations that were on the previous 17 graph was taken. And that's how we developed 18 or calculated the numbers that you see in the 19 column for polyphase. 20 When scaling to other motor 21 categories, it was a little more complicated. 22 DOE took an efficiency value near the max.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 195 1 tech. level that was a result of the CSIR and 2 CSCR engineering analysis results. 3 This value along with the 4 corresponding horsepowers were plugged into 5 the scaling equation that we showed. And from 6 there, we could solve for K.

7 And those K values are on the row 8 for four-pole motors. 9 FACILITATOR BROOKMAN: Roger? 10 MR. DAUGHERTY: Roger Daugherty. 11 I would just like to ask why you 12 went to the trouble of trying to create this K 13 value when in a previous slide, number 1, you 14 did a linearalization on two poles, four 15 poles, and six poles. 16 So why do you start at a four to 17 move to a two or a six and just not use the 18 information you had directly?

19 FACILITATOR BROOKMAN: Robert?

20 MR. VAN BUSKIRK: So the 21 information that the Department has on the two 22 poles, four poles, and six poles is from the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 196 1 standard levels at the medium motors. 2 So the question is, when the 3 Department is developing new costs and new 4 efficiency levels for the fractional 5 horsepower motors or the two-digit frame 6 sizes, what will the relationship be between 7 the several efficiency levels being considered 8 for the four-pole and analyzed with the 9 engineering data for the four-pole and the 10 corresponding efficiency levels for the two 11 and six-pole. 12 So the coefficient that is used to 13 adjust between essentially a constant of 14 proportionality that's equivalent to the 15 constant of proportionality in the 16 relationship for the medium motors. 17 FACILITATOR BROOKMAN: Roger? 18 MR. DAUGHERTY: Roger Daugherty. 19 But that brings up a question. 20 Why do you find four poles to be the most 21 important criteria as your base, rather than 22 use two, four, and six separate information?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 197 1 Because a two-pole design, such as 2 the rotor OD, is usually very different to the 3 four-pole and a four-pole may be different 4 than a six-pole. 5 So why did you settle on four-pole 6 as the base point? 7 MR. VAN BUSKIRK: The Department 8 selected a subset of all possible designs to 9 analyze in the engineering analysis. My 10 understanding is the four-pole is the most 11 common design. And so when it was selecting a 12 limited number of all possible designs, it

13 selected the most common.

14 Yes? 15 FACILITATOR BROOKMAN: Matthew, 16 you would agree? Yes. 17 MR. VAN BUSKIRK: Yes. But, in 18 addition, your comment, the Department 19 welcomes comments on the scope, on any piece 20 of the analysis and the scope of the 21 engineering analysis. 22 FACILITATOR BROOKMAN: Robert, I

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 198 1 thought that you were a representative. The 2 Department said earlier that you thought the 3 four-pole was a good place to extrapolate 4 from. Somebody did.

5 MR. VAN BUSKIRK: Well. 6 FACILITATOR BROOKMAN: Yes, yes. 7 It's based on volume, you think? That was the 8 -- okay.

9 MR. VAN BUSKIRK: And based on the 10 consistency of the relationship between the 11 efficiency levels for the medium motors. Now, 12 with new information, the Department can come 13 up with -- 14 FACILITATOR BROOKMAN: So yes, 15 Roger, do you want to follow on here? 16 MR. DAUGHERTY: Roger Daugherty. 17 I guess a very important question, 18 then, the implication that you have given to 19 me is that the four-pole motors will be used 20 through this design program to do analysis to 21 determine possible efficiency levels, but when 22 it gets to two and six, you are not going to

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 199 1 use that program. And you are just going to 2 go off and use these relationships that were 3 derived to extrapolate and come up with the 4 efficiency levels that will go into the

5 standard. 6 Is that a correct interpretation 7 of what you are saying? 8 MR. VAN BUSKIRK: That is what the 9 Department has done in the preliminary 10 analysis. The Department welcomes comments on 11 how to improve the analysis between the 12 preliminary stage and the NOPR stage.

13 FACILITATOR BROOKMAN: Just to 14 confirm, you do not have the data presently 15 for two-pole, four-pole, and six-pole? 16 MR. NARDOTTI: The design? No, we 17 do not. We did not. The representative units 18 we selected were all four-pole motors. And we 19 extrapolated from that polyphase 20 one-horsepower, four-pole motor because it was 21 also the most similar to a standard that is 22 already in practice.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 200 1 FACILITATOR BROOKMAN: Okay. 2 Thank you. 3 So additional comments from our 4 bank of manufacturers here before we press on? 5 (No response.) 6 FACILITATOR BROOKMAN: Okay. 7 MR. NARDOTTI: So now I'm going to 8 go back to that "efficiency (1)" term that was 9 in the preliminary equation. We have shown 10 here preliminary CSL levels for the equipment 11 classes that we analyzed. 12 And one note I would like to bring 13 up is that the frame size wouldn't necessarily 14 need to be a part of this chart because the 15 equipment classes that we defined earlier are 16 independent frame sizes. 17 I have highlighted 85.5 percent in 18 red because this is the NEMA premium level for 19 a four-pole one-horsepower open-constructed 20 polyphase motor, the medium motors.

21 DOE chose that as a reference 22 point because it is a standard for a motor

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 201 1 very similar to the polyphase motor that we 2 analyzed. We did not want that to be the 3 lowest preliminary CSL level, however. So we 4 chose another level a little bit lower and

5 made that CSL level 1. 6 An efficiency value near the max. 7 tech. level for the polyphase motor analyzed 8 was then taken as the upper bound for CSL

9 level 5. And then CSL levels 3 and 4 were 10 chosen as disbursed levels in between the NEMA 11 premium level and the max. tech. level. 12 Those values for the polyphase 13 four-pole one-horsepower motor I used in the 14 scaling equation that we saw. And they are 15 plugged in as that term "efficiency (1)" to 16 generate different CSL levels, other motor 17 types. 18 FACILITATOR BROOKMAN: Roger? 19 MR. DAUGHERTY: Roger Daugherty. 20 As I mentioned earlier, back in 21 2007, you did request the information on four 22 designs as to efficiency levels of three

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 202 1 classifications: standard efficient, energy 2 efficient, and premium efficient. 3 I would just suggest that this 4 value that you have chosen for the polyphase 5 of 85 and a half percent was the value that 6 was given in that response coming from NEMA,

7 from the motor manufacturers. 8 When you select candidate level 9 number one, the response that was returned to 10 you as energy-efficient was 78 and a half 11 percent, rather than 84.0. 12 I would only make that point that 13 when you are trying to do your cost-benefit 14 analysis and make cost comparison analyses and 15 things, that if you are looking for the 16 support of manufacturers and you want to try 17 to get some reasonable estimation of the cost 18 of at least those two candidate levels which 19 actually exist in the market, not necessarily 20 to the same frame length but that they do 21 exist in the market, that when you are trying 22 to gather that data, if you were to choose

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 203 1 that value that was given to you of 78 and a 2 half percent, you might be able to obtain 3 information cost-wise of that size motor and 4 the 85 and a half and start checking that 5 against your models and things that you are 6 trying to compare. 7 So it may be of benefit that you 8 go back and for candidate level number one, 9 you use the values that NEMA supplied to you 10 for energy-efficient in the selection of those

11 values. 12 MR. NARDOTTI: Thank you very much 13 for that comment. And we will definitely 14 consider that. 15 FACILITATOR BROOKMAN: Thank you. 16 MR. NARDOTTI: Well, that's the 17 end of the engineering analysis. And if there 18 are any other comments on the engineering? 19 FACILITATOR BROOKMAN: Yes, 20 please, Gloria? 21 MS. PUMPUNI: Gloria Pumpuni,

22 AHRI.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 204 1 I am just curious as to if you 2 guys looked at any interactions between the 15 3 technology options and tried to optimize that, 4 if there's any analysis on that, whether you 5 picked certain options, whether picking one 6 option meant that other option wasn't 7 available, and if you looked at all of that 8 together to optimize the choice of technology. 9 MR. SCHOLAND: Mike Scholand. 10 To clarify what you're asking, 11 you're asking, did we look at each of the 15 12 options individually and then sort of create a 13 prioritization?

14 FACILITATOR BROOKMAN: Or a 15 hierarchy? 16 MS. PUMPUNI: No. Gloria Pumpuni,

17 AHRI. 18 Actually, looking at the 19 interactions between the 15 and trying to 20 optimize which technologies to apply. 21 MR. SCHOLAND: I guess I will take 22 a first stab at that. And, Bill, feel free to

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 205 1 add. Mike Scholand again. Sorry. 2 All of those options were in play 3 in the software. And the objective that we 4 asked Bill to come up with was to create the 5 least-cost path to efficiency. So perhaps 6 copper in the rotor bars was not something he 7 considered first because he knew that was 8 expensive. And he did other measures first. 9 So I'm not sure how many 10 iterations he did to come up with the designs 11 that are in the engineering, but our direction 12 was to find the least-cost path and to 13 consider all 15 things as in play with the 14 constraints that Matt mentioned in terms of 15 manufacturability. 16 FACILITATOR BROOKMAN: Please, 17 Molly? 18 MS. TROMBLEY-McCANN: Molly 19 Trombley-McCann. 20 Realistically speaking, do you 21 know if any of those 15 options are mutually 22 exclusive?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 206 1 MR. SCHOLAND: Sorry, Molly. Mike 2 Scholand here. We're just checking. Thank 3 you. 4 FACILITATOR BROOKMAN: Does it 5 come up later in the discussion, Michael? No? 6 Okay. Just keep checking. We're going to go 7 to lunch here shortly, folks, just so you're

8 aware. 9 I will allow you to check in, Tom? 10 MR. HINK: Yes. Tom Hink, 11 Regal-Beloit. 12 I just did a very simple exercise 13 of taking your chart number 3, where you had 14 the preliminary -- 15 FACILITATOR BROOKMAN: This is the 16 supplement? 17 MR. HINK: Right. This is the 18 supplement, which is slide number 3, -- 19 FACILITATOR BROOKMAN: Number 3, 20 yes. 21 MR. HINK: -- the preliminary 22 candidate standard levels. And I merely wrote

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 207 1 in all of the efficiency levels that you had 2 on your larger charts that you previously had 3 showed them. There doesn't seem to be a very 4 good correlation when you compare each of the 5 different five levels to the five levels that

6 we had on those charts. 7 You know, for example, if you're 8 looking at the CSL 1 levels for the polyphase, 9 on your slide 3, it says 84 percent. But on 10 the analysis that was done earlier, it's only

11 75.8. 12 Likewise, if you look at the CSL 13 level 1 for the CSIR, the capacitor 14 induction-run, on your slide 3, it says 70.8. 15 But on your previous analysis, it was 62.3. 16 And so some numbers are fairly 17 close, but there are some that are quite off. 18 And I'm just curious if someone can comment

19 on that.

20 FACILITATOR BROOKMAN: Robert?

21 MR. VAN BUSKIRK: Robert Van 22 Buskirk.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 208 1 A key reason for the scaling and 2 trying to get the levels to have a 3 relationship between the different products is 4 in a previous rulemaking, the Department had 5 many different product classes. And when it 6 independently selected levels for each of the 7 different product classes, there became 8 inconsistencies between the consumer economics 9 in the levels between product classes. 10 So in this particular case, the 11 levels are being chosen by the Department to 12 try to have a consistency on the consumer 13 economic side of the equation, which means 14 that there's an adjustment between the designs 15 and efficiencies that are examined in the 16 engineering analysis and the levels that are 17 examined for the sake of the economic 18 analysis. 19 The Department used an 20 interpolation to try to estimate what the 21 equivalent costs would be for these 22 intermediate levels.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 209 1 FACILITATOR BROOKMAN: Yes, Roger? 2 MR. DAUGHERTY: Roger Daugherty. 3 But if you're going to do that 4 analysis and do the projection, probably the 5 more troubling comparison of these two tables 6 is the premium value. In chapter 5, for the 7 premium value, if I read correctly, the 8 purpose of appendix 5-A was to provide a 9 design that had that premium efficiency level 10 in its calculated value, although, again, I'll 11 note that when you get to the appendix, there 12 is no efficiency value for those ratings in 13 there. So unless you read chapter 5, you're 14 left with trying to wonder what this design is 15 actually applied to. 16 But it just seems that if you 17 chose for the capacitor-start induction-run 18 for a premium efficiency level -- and I assume 19 that's CSL 2 of 73.6 percent -- why didn't you 20 do the engineering analysis to find a design 21 that was at that percent, that efficiency? 22 Why is the engineering analysis at a different

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 210 1 efficiency level?

2 MR. VAN BUSKIRK: In the 3 preliminary analysis, the Department did the 4 engineering analysis, did an adjustment of the 5 levels for the economic analysis, and did not 6 close the loop to recalculate the engineering 7 designs based on the adjustment. 8 Now, for the NOPR analysis, the 9 Department welcomes comments on how to improve 10 that process. 11 FACILITATOR BROOKMAN: Roger? 12 MR. DAUGHERTY: Roger Daugherty. 13 Then perhaps someone would like to 14 explain how you did the economic analysis, 15 which included the cost of producing a motor 16 if you didn't have the design for what you 17 were doing the economic analysis for. 18 MR. VAN BUSKIRK: The Department 19 had the cost characteristics of a more 20 efficient design and a less efficient design 21 and interpolated between those two. 22 FACILITATOR BROOKMAN: So in those

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 211 1 two cases, you did have a --

2 MR. VAN BUSKIRK: We had a more 3 efficient design, and we had a less efficient 4 design. And the Department interpolated. 5 FACILITATOR BROOKMAN: Basically a 6 stock design for each of those? 7 MR. VAN BUSKIRK: Right.

8 FACILITATOR BROOKMAN: Yes. 9 Michael Scholand? 10 MR. SCHOLAND: Mike Scholand. 11 Two comments. One to this 12 discussion. I think the Department will be 13 doing new designs for the NOPR, taking into 14 account power factors that have been raised 15 today and trying to get designs that are 16 closer to the candidate standard levels that, 17 as Robert explained, it is sort of a linear 18 process to get a preliminary idea about what 19 the candidate standard levels should be, get 20 some feedback on those, and then go back and 21 do the engineering to try and get designs that 22 fall into the sweet spot.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 212 1 Secondly, to Molly's question, 2 whether any of the 15 designs or technology 3 options are mutually exclusive, Bill's answer 4 is no. So all 15 options were in play when he 5 was looking at design improvements and 6 creating the least-cost path to efficiency. 7 Thank you.

8 FACILITATOR BROOKMAN: It's 9 getting on toward lunch, past lunchtime, in 10 fact. So let's take any final comments on 11 this segment should there be any before we 12 head out of here for a while. 13 MR. HORNQUIST: A very quick one. 14 Edward Hornquist, Southern California Edison. 15 Just for the record, it's not 15, 16 but it's 13. 17 MR. SCHOLAND: Oh, thank you. 18 FACILITATOR BROOKMAN: Thirteen? 19 What was it? 20 MR. HORNQUIST: Technology 21 options. 22 FACILITATOR BROOKMAN: Thank you.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 213 1 I misspoke in the beginning. I just made a 2 guesstimate. Yes. Thank you. 3 So it's now 12:45. It always 4 takes just about an hour to eat lunch in the 5 Forrestal Building, and that's if you go 6 off-campus. You must stay on campus. 7 Otherwise you won't be back when we start at 8 1:45, back here in this room. 9 This room will be locked. So you 10 can leave all of your stuff here. Those of 11 you who are familiar with the building, there 12 is a big cafeteria, a full-service cafeteria, 13 across the street. So you have to go down to 14 the ground level and go underneath the street 15 to get there. There's also a smaller snack 16 bar one floor below where you got your coffee 17 this morning if you went there. 18 So we will resume. Wear your 19 badges inside the building. We'll resume in 20 an hour, 1:45. 21 (Whereupon, a luncheon recess was 22 taken at 12:46 p.m.)

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 214 1 A-F-T-E-R-N-O-O-N S-E-S-S-I-O-N 2 (1:44 p.m.)

3 FACILITATOR BROOKMAN: So let's 4 resume. Welcome back. Glad to have you here. 5 I hope lunch was okay. Several people have 6 mentioned that they have flights leaving in 7 the 6:00 o'clock time frame-ish. 8 So we're going to try and press 9 ahead, as we did this morning, and cover as 10 much ground as we can efficiently and try to 11 be done, say, 4:00-ish, no later than 12 4:00-ish. Okay? So that's the plan. 13 And I think, unless anybody has 14 anything that they wish to return to from the 15 morning, we're going to move on to the next 16 item on the agenda and to Robert. Okay? 17 We're moving on. 18 MR. VAN BUSKIRK: Okay. Thank you 19 very much.

20 ENERGY USE & END-USE LOAD CHARACTERIZATION

21 AND MARKUP ANALYSIS

22 MR. VAN BUSKIRK: So now we are on

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 215 1 to the more economic impact analysis pieces of 2 the preliminary analysis. What I would like 3 to emphasize is that this is the preliminary 4 analysis stage. 5 So for the sake of transparency, 6 the Department endeavors to keep the analysis 7 simple when it is possible to keep the 8 analysis simple. But if there are important 9 pieces of detail and important factors to 10 include, then the Department welcomes comments 11 that allows it to make more accurate estimates 12 and to include all of those various factors or 13 many of those various factors that interested 14 parties would like included in the analysis. 15 So please look at the talk as a 16 framework for including all of your concerns 17 and for framing the inputs that you would like 18 the Department to consider when it looks at 19 the benefits and costs of the standard. 20 So this next section covers 21 markups for equipment price determination. 22 And right after that, we will discuss the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 216 1 energy use and end use load characteristics. 2 So the markups to determine 3 equipment price have the purpose of 4 determining consumer prices under a standard 5 scenario based on manufacturer cost, 6 characterizing the equipment distribution 7 channels and market segments, describing small 8 electric motor equipment distributor 9 wholesaler direct cost expenses and profits. 10 Our inputs, we tend to get inputs 11 from firm balance sheets and various aggregate 12 economic data; for example, from the U.S. 13 economic census. 14 The key output that we have for 15 the markup analysis is the markup factors, 16 both for the baseline equipment, the case of 17 no standards and for incremental costs that 18 may occur along the various steps of the 19 distribution chain. 20 So here we have a diagram that 21 illustrates the distribution chain as it was 22 described in the determination analysis and as

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 217 1 the Department has used it in the preliminary 2 analysis. 3 The different proportions of the 4 pieces of the distribution chain or 5 distribution channels are taken from the 6 determination analysis. The Department, of 7 course, welcomes comments as for whether or 8 not those different distribution channels are 9 larger or smaller compared to what the 10 Department has put in the preliminary 11 analysis. 12 So let's go through the three 13 distribution channels. One is to sell 14 directly to an original equipment 15 manufacturer, who then may be putting the 16 small electric motor into a piece of 17 equipment. 18 That original equipment 19 manufacturer then will have an equipment 20 distributor. And depending upon the type of 21 equipment, that equipment then may have 22 installation costs. And adding up all of

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 218 1 those pieces of the chain will come up with an 2 end use installed cost. 3 In addition, sometimes the 4 manufacturers will sell their motors through a 5 wholesaler, who then will either sell to the 6 original equipment manufacturers, or to more 7 the separate motor to the consumer, we put 8 between the motor wholesaler motor retail 9 distribution and then an installation cost and 10 a consumer. And then the other path is the 11 wholesaler, OEM equipment, distribution, 12 installation to consumer. So on the markups, 13 relate consumer price...

14 Yes? 15 MR. BOTELER: This is Rob Boteler. 16 MR. VAN BUSKIRK: Why don't I stop

17 for comments. 18 MR. BOTELER: I would just say we 19 would I think looking at your percentages to 20 the channel in this particular product the way 21 we now understand the definition, we would say 22 I think more like 65 percent goes direct to

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 219 1 the OEM equipment manufacturer, 30 percent to 2 a distributor that then goes into the 3 equipment, and probably only 5 percent that 4 actually get sold to an end user again because 5 this type of product has a fairly short life 6 span and so does the equipment that it is 7 being used in. 8 So there really isn't that much of 9 an after-market. There is some, but not as 10 much as 35 percent, I wouldn't say. 11 FACILITATOR BROOKMAN: Thank you. 12 MR. VAN BUSKIRK: Thank you very

13 much. 14 So there are both baseline and 15 incremental markups. The markups relate the 16 consumer price, usually deriving it by 17 analyzing the cost of goods sold for the 18 distributor. Baseline markups relate price to 19 cost prior to the change in efficiency. The 20 incremental markups relate to incremental 21 change in consumer price based on the 22 incremental costs of efficiency.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 220 1 So some distribution costs remain 2 constant, with cost of goods sold increases. 3 Incremental markups cover only expenses that 4 vary with cost of goods sold, in this case 5 expenses that increase due to an increase in 6 equipment efficiency. 7 Now, earlier today there was 8 mention that some of the higher efficiency 9 equipment may create additional costs for the 10 original equipment manufacturers. So this 11 would be a good section for stakeholders who 12 are concerned about additional costs to 13 equipment and original equipment manufacturers 14 to make comments on: at what point, at what 15 efficiency levels, and under what conditions 16 these manufacturers would incur extra costs 17 and how those costs would change with the 18 characteristics of the motor. 19 FACILITATOR BROOKMAN: Roger? 20 MR. DAUGHERTY: Roger Daugherty. 21 Just as an aid in trying to make 22 comments because we're getting into -- I'm

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 221 1 trying to track what chapter we're in with 2 various items. If you could just mention what 3 chapter this information is in? 4 MR. VAN BUSKIRK: Chapter 6.

5 MR. DAUGHERTY: Then we can refer 6 to it to try to get to it. 7 MR. VAN BUSKIRK: It's chapter 6. 8 Though if you make -- 9 MR. DAUGHERTY: Chapter 6? That's 10 not the title of what you're talking about. 11 MR. VAN BUSKIRK: Chapter 6 is 12 markups. 13 MR. DAUGHERTY: Chapter 6 is 14 energy use. 15 MR. VAN BUSKIRK: Oh, sorry. 16 Chapter 7. Sorry. 17 MR. DAUGHERTY: So have you 18 skipped over 6 or are you going back to 6? 19 MR. VAN BUSKIRK: I'm going to go 20 back to energy use. So I'm skipping over the 21 chapters a little bit for the sake of logical 22 presentation, though if you make a comment on

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 222 1 costs to equipment manufacturers, the 2 Department will be able to put that in the 3 right category. 4 So onward. So this table presents 5 the factors that the Department used, both 6 baseline and incremental. And I think the 7 table is pretty self-explanatory. 8 You see that, for example, for 9 equipment manufacturers, that a baseline 10 markup is 1.37. The incremental is 1.27 11 because some of the costs, sometimes for the 12 incremental, if there is no additional labor, 13 then that is a cost that doesn't need to be 14 recovered in the markup. 15 If the original equipment 16 manufacturer incurs extra costs due to 17 efficiency, then, instead of being less than 18 the baseline markup, it's possible for the 19 incremental markup to be bigger than the 20 baseline markup. 21 So down at the bottom, you see the 22 range of overall markups goes from a low 2.17

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 223 1 for the baseline when you go via distributor 2 to end users, 1.53 for the incremental. And 3 then in the high case, where it's going 4 through the maximum number of steps in the 5 distribution chain, the baseline is 2.95 and 6 2.93 for the incremental. So those are the --

7 FACILITATOR BROOKMAN: Dale? 8 MR. BASSO: Yes. Dale Basso, WEG. 9 A question on evaluating the 10 costs. We know you didn't consider the frame, 11 and we'll talk about that. We'll give you 12 some input on that. What about freight and 13 the additional cost of moving product around 14 with additional weight? 15 MR. VAN BUSKIRK: We did not 16 include freight in the preliminary analysis. 17 If you believe freight is an important factor, 18 please do feel free to comment on that. 19 FACILITATOR BROOKMAN: You didn't 20 include it in the preliminary analysis. Will 21 you include it in later analysis? 22 MR. VAN BUSKIRK: I usually try

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 224 1 not to forecast the Department's analysis 2 before it is done. In other analyses, the 3 Department has included freight costs, no 4 problem. The reason it was included in 5 previous analyses and not this one was that 6 the size of the motors is relatively small. 7 And the Department did not know that the few 8 pounds of difference due to the increased 9 efficiency was going to have a significant 10 impact on the freight costs. 11 But if interested parties know 12 that the increased weight does have a 13 significant impact on the freight costs and 14 approximately what those impacts might be, 15 then that would be very useful information for 16 the Department. 17 FACILITATOR BROOKMAN: Jim Raba? 18 PRESIDING OFFICER RABA: Jim Raba, 19 Department of Energy. 20 Yes. That was a good 21 clarification, Robert. As I understand it, 22 shipping is really incremental cost of a

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 225 1 standard motor, of an efficient motor by 2 weight and other characteristics. So there 3 would be a difference, a delta there that we

4 would have to look at. 5 And certainly if you have some 6 ideas, rates, data, the actual data perhaps, 7 within value and quantities shipped and what 8 those are, even with tariff reductions by 9 amount shipped or distances, which may be out 10 there, be it rail or other trucks, too, 11 certainly bring it to our attention, data.

12 MR. VAN BUSKIRK: Yes. And 13 freight costs may vary quite a bit depending 14 upon the shipping channel. So if interested 15 parties have information on what shipping 16 channels tend to be used for shipping such 17 motors, then that will assist the Department 18 in estimating the freight costs.

19 PRESIDING OFFICER RABA: We 20 appreciate the comment. Thank you, Dale.

21 FACILITATOR BROOKMAN: John?

22 MR. ANDRLE: John Andrle.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 226 1 I just had a question about the 2 contractor cost. Does that include both the 3 labor to install plus the markup of the 4 product? 5 MR. VAN BUSKIRK: The Department 6 examined the cost-estimating data in RS Means. 7 And in the RS Means cost estimate for 8 installation of the motors, the labor cost did 9 not vary. So there is no -- the Department 10 included the labor cost of installation as a 11 separate item. That did not vary with 12 efficiency. 13 But a contractor that is 14 installing the motor usually marks up the 15 materials that they're installing. So the 16 contractor markup here is on the cost of the 17 motor, not including the labor of 18 installation, which is added later as a 19 separate installation cost. That is fixed 20 with efficiency because RS Means had a range 21 of estimates for a range of motor sizes. All 22 of the two-digit frame motor sizes had a

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 227 1 constant installation labor according to the

2 RS Means. 3 Any other comments or questions? 4 (No response.) 5 MR. VAN BUSKIRK: Now, energy use, 6 which is chapter 6. So motor losses, as 7 discussed in the engineering section, include 2 8 I R losses, both stator and rotor, core 9 losses, stray losses, friction, and windage

10 losses. 11 For the mathematical description 12 of the losses, the Department simplified it 13 into a constant and a load-dependent component 14 where the load-dependent component varied as 15 the square of the load. 16 Another factor that the Department 17 recognizes is reactive power. And I think we 18 have had some discussion about that today. 19 And the Department is inviting comment on how 20 best to deal with reactive power. 21 Let me go to the next slide, which 22 has a couple of graphs. So this slide has

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 228 1 some graphs. One is, the first graph on the 2 left-hand side is, a plot pulling out data 3 from motor catalogues showing the losses of 4 the motor as a function of the square of the 5 motor loading. So that demonstrates that 6 given that data, the proportionality to 7 loading squared is pretty good. 8 The other plot on the right-hand 9 side is a plot of reactive power versus motor 10 loading. And the Department is inviting 11 comments on how to address reactive power and 12 its implications for losses in the surrounding 13 electrical circuit, both at the customer level 14 and at the utility level. 15 FACILITATOR BROOKMAN: Roger? 16 MR. DAUGHERTY: Roger Daugherty. 17 On this particular figure, with 18 regards to the reactive power, it's indicated 19 to be watts. It's actually VARs for the units 20 of measures for reactive power. 21 I am a little troubled where you 22 got your data from, that the combination of

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 229 1 these two plots indicate that at full load 2 this particular motor is using or consuming, 3 as you would say, in losses -- or I assume 4 this is actual power of about 200 watts, a 5 little greater than 200 watts. Yet, it's 6 greater than 500 VARs of reactive power. That 7 comes out to a power factor of about 34 8 percent. 9 That's a very low number. And so 10 you may wish to check your data or your 11 derivation in how you came up with these

12 curves.

13 MR. VAN BUSKIRK: These are 14 one-horsepower motors. So the left-hand plot 15 is only the losses, not losses plus mechanical 16 load. So on the left-hand plot, if you were 17 to estimate the entire power going through the 18 motor, it would be -- I think one horsepower 19 is approximately 750 watts. So it would be 20 200 plus 750. So that would be 950 watts, 21 compared to 500 watts. 22 MR. DAUGHERTY: Roger Daugherty.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 230 1 A follow-up question again is on 2 chapter 6 on page 6-2, under these curves that 3 you presented, you have a definition that you 4 say that you're evaluating efficiency to be 5 equal to a factor called P of W, which is 6 identified to be the motor-rated power in 7 watts times L, which are identified to be a 8 loading factor, which can be I assume this 9 loading factor you are using in your plotting. 10 That amount, which represents 11 output power at some load, is divided by that 12 same quantity, PW times L, plus losses. And 13 losses are identified to be the power of 14 load-independent losses at full load and

15 watts. 16 So if I let L be one, which is 17 full load, then it's giving me an efficiency 18 relationship that says that the efficiency at 19 full load is the output power divided by 20 output power plus independent, 21 load-independent, losses. It does not include 22 those losses which are dependent on load.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 231 1 MR. VAN BUSKIRK: So I have to 2 look at the equations that are in front of you 3 to answer your question. 4 FACILITATOR BROOKMAN: Can you 5 suggest offhand what the fix is? 6 MR. DAUGHERTY: Roger Daugherty. 7 What is missing from it are the 8 load-dependent losses, which are characterized 9 by the result of this square motor loading 10 curve. So, as is pointed out in the 11 discussion within chapter 6, there are the 12 load-dependent losses, which they found that 13 if you plot losses versus a square motor 14 loading, you see that those vary by the square

15 of the load. Those are the stator and rotor 16 losses and stray load loss in the machine. 17 Then there are the independent losses 18 generally, such as the friction and windage 19 loss. And the core loss somewhat is being

20 constant. 21 The only thing that is in this 22 relationship -- and by only referencing

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 232 1 independent -- are the core loss and 2 friction/windage loss. It also needs the 3 relationship of L2 times the dependent losses 4 to correct the equation.

5 MR. VAN BUSKIRK: So I have to 6 step through the equations with you. So the 7 PW is the rated power of the motor, correct? 8 The losses is the total losses. Okay? Okay. 9 So "The load-independent in the 10 definition of losses" is a typo. Okay. 11 MR. DAUGHERTY: I guess what I 12 would be trying to say is in your previous 13 slide 66, you have your relationship for the 14 annual energy consumed. And you have that as 15 PNL, which are your load-independent losses. 16 Then you have the PLL times L2, which are your 17 dependent losses that vary by load squared. 18 Those represent at any load the total losses

19 at that load. 20 So over in this new relationship 21 that's on page 6-2, in place of losses, which 22 are identified as those that are independent,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 233 1 that needs to be replaced by this relationship 2 that you have on slide 66 or on page 6-1, that 3 it's PNL plus PLL times L2. And that will 4 correct the relationship. 5 MR. VAN BUSKIRK: Yes. I agree. 6 My understanding is that when the Department 7 performed the preliminary analysis, they used 8 the correct equations, as you were describing 9 them. And my understanding is that there may 10 be errors in the documentation that are not 11 describing the equations correctly. 12 PRESIDING OFFICER RABA: Jim Raba,

13 DOE. 14 So where those are going to be 15 picked up as refinements or just that they 16 need to be addressed, mark it. Call attention 17 to it. Provide what you view as the correct. 18 And we will examine that, too, and clean up

19 those areas.

20 FACILITATOR BROOKMAN: You 21 finished describing these, right?

22 MR. VAN BUSKIRK: Yes.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 234 1 FACILITATOR BROOKMAN: So 2 additional comments on costs and losses from 3 reactive power, these slides here, 65, 66, 67 4 generally? Yes, Molly? 5 MS. TROMBLEY-McCANN: Molly 6 Trombley-McCann. 7 I asked this question earlier, but 8 I think maybe this is a more appropriate 9 section. I can't find the citation in the

10 document. But the documents do state that the 11 DOE finds that the motors covered by this 12 rulemaking constitute a major fraction of the 13 energy use of all small motors in the country. 14 I'm wondering, what do you mean by 15 a "major fraction"? Are we talking about 50 16 percent, 70 percent? 17 MR. VAN BUSKIRK: The Department 18 did not calculate that, the precise fraction 19 in the preliminary analysis. If interested 20 parties think it is an important piece of 21 information to have in the analysis, then 22 please do include that in your comments.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 235 1 Yes? 2 MR. AGAMLOH: Emmanuel Agamloh. 3 FACILITATOR BROOKMAN: Thank you. 4 MR. AGAMLOH: The square of motor 5 loading and motor loading, are they per-unit 6 quantities? 7 MR. VAN BUSKIRK: Yes. The square 8 of motor loading, if I understand what you 9 mean by "per-unit," it is a number that is 10 zero with no loading and one at full loading. 11 So at 50 percent loading, the square of motor 12 loading is .25. 13 FACILITATOR BROOKMAN: Roger?

14 MR. VAN BUSKIRK: Yes? 15 MR. DAUGHERTY: Roger Daugherty. 16 To follow up on that, then it's 17 interesting that your distribution of values, 18 which appears to be on a linear plot, are 19 equally spaced, where the square of a half 20 load is .25 and the square of three-quarter 21 load, that those spread out a lot more as you 22 go up in the square, --

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 236 1 MR. VAN BUSKIRK: Well, the three

2 -- 3 MR. DAUGHERTY: -- although what 4 you are describing on this slide I guess 5 appears different than what is in the report. 6 MR. VAN BUSKIRK: Well, let me try 7 to describe. The point furthest to the right 8 is the square of one. So it's 1.0. 9 The next point is the square of 10 .75. So it's between .5 and .6. The third 11 point from the right is the square of .5. So 12 it's .25. And the fourth point is the square 13 of .25. So it's .0625.

14 Does that seem to conform to the 15 graph? 16 FACILITATOR BROOKMAN: Okay. 17 Thank you. 18 Additional comments? We are going 19 to keep moving along here. Yes, Jim? 20 PRESIDING OFFICER RABA: Jim Raba,

21 DOE. 22 Good comment, Molly, about the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 237 1 major part. I can't remember personally where 2 I saw it. And I would like to know if you 3 have a citation where we could go back and 4 review, please. Submit it for a comment, if 5 you would like, please. Thank you. 6 FACILITATOR BROOKMAN: Thank you. 7 MR. VAN BUSKIRK: So an issue that 8 the Department would like to highlight is the 9 issue of how to properly account for reactive 10 power losses and estimate what fraction of 11 reactive power actually results in consumptive 12 losses in the surrounding equipment customer 13 and distribution system circuits and any 14 suggestions that interested parties may have 15 on valuing any differences in reactive power 16 between motors that are designed for different 17 efficiency levels. Level two was selected as 18 the NEMA premium level. 19 Level one was one percent below. 20 Level two was set equal to the NEMA premium 21 level. Level three was one percent above. 22 Level four was set at 2.5 percent above. And

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 238 1 level five was selected as the max. tech.

2 level. 3 FACILITATOR BROOKMAN: Roger? 4 MR. DAUGHERTY: Roger Daugherty. 5 I would just suggest that if this 6 were your selection of values, that you go 7 back and revisit the table on slide 3 of the 8 extra handout that the value of CSL 1 is given 9 as 84.0 percent. That's more than one percent 10 below the NEMA premium value. 11 MR. VAN BUSKIRK: Yes. Thank you. 12 We will examine that inconsistency. 13 So next is the flow diagram that 14 describes -- 15 FACILITATOR BROOKMAN: Roger wants 16 to follow on. Go ahead, Roger? 17 MR. DAUGHERTY: It was just 18 pointed out to me by Rob that it may be 19 important here to make a point that when you 20 say that the efficiency is one percent below 21 NEMA premium, you are actually referring to 22 one percentage point because that one

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 239 1 percentage point below NEMA premium represents 2 ten percent change of losses in the machine. 3 So we like to talk in terms of percentage 4 points if you're going to use actual 5 percentage values. 6 FACILITATOR BROOKMAN: Thank you. 7 MR. VAN BUSKIRK: Thank you for

8 that. 9 So the flow diagram describes the 10 flow of information in the life-cycle cost 11 calculation. Life-cycle costs starts with the 12 baseline manufacturer cost, the standard level 13 manufacturer cost, manufacturer markups, 14 retail and distribution markup, sales tax, 15 combine those into an equipment price. 16 Then added to that equipment price 17 is an installation cost, which in the 18 preliminary analysis, the Department assumed 19 that the installation cost is the labor 20 component, did not vary with rating or size of

21 the motor. 22 That gives you a total installed

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 240 1 cost. And then that total installed cost is 2 compared with the annual operating expenses. 3 The annual operating expenses result from the 4 energy consumption and energy prices, which 5 gives the annual energy expense and any repair 6 and maintenance costs that then flow into an 7 annual operating expense. 8 The Department again assumed that 9 repair and maintenance costs did not vary with 10 efficiency levels. Again, this is a 11 preliminary analysis. And stakeholders should 12 feel free at providing any additional 13 information to the Department that they think

14 would be useful. 15 The annual operating expenses then 16 are combined with inputs regarding lifetime, 17 discount rate, and any trends in energy 18 prices, to come up with a lifetime operating 19 expense. This is the discounted present 20 value. And that is combined with the total 21 installed cost to come up with the life-cycle 22 cost of the equipment.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 241 1 Are there any questions or 2 clarifications about this flow?

3 FACILITATOR BROOKMAN: Rob? 4 MR. BOTELER: This is Rob Boteler. 5 So it's at this point where we as 6 the stakeholders will put in our 7 recommendations or estimates, I guess, on the 8 impact on what we talked about as far as the 9 stack length of the example, went up 200 10 percent. So we're doubling the length of the 11 motor or nearly. And we're going to then try 12 and quantify that as to what the impact would 13 be on the OEM, the user, and the contractor so 14 that can be added to the life-cycle cost 15 analysis.

16 MR. VAN BUSKIRK: Yes. And a 17 particularly useful way of organizing the 18 input would be to take the population of 19 consumers or end users and say I have one 20 segment which is this fraction. I have 21 another segment which is this other fraction. 22 And I have another segment which is a third

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 242 1 fraction. And these different segments or 2 categories of consumers then will have 3 different types of impacts from these changes. 4 Another component will discuss in 5 the NOPR analyses that there is a life-cycle 6 subgroup analysis that the Department performs 7 for its rulemakings. And in the subgroup 8 analysis, the Department can examine the 9 peculiar or particular impacts on any subset 10 of users of the equipment. 11 FACILITATOR BROOKMAN: Yes, John? 12 MR. ANDRLE: I just had a comment. 13 And it basically goes back to kind of the 14 beginning, where we talked about the baseline 15 manufacturing cost, also some of the 16 assumptions that were placed in getting to 17 these various levels of efficiency. 18 Also just a comment that depending 19 on what level of efficiency, there could be 20 significant additional tooling costs, which 21 you did mention we need to ensure we have in 22 our manufacturing impact analysis. But

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 243 1 because depreciation is part of a motor cost, 2 that portion of the motor cost may become 3 significant if these levels were at a point 4 where the tooling costs became significant. 5 So it's a comment to understand 6 that some of these manufacturing costs may be 7 not valid because that wasn't considered in 8 the preliminary analysis. 9 FACILITATOR BROOKMAN: Okay. 10 MR. VAN BUSKIRK: So if I may 11 reflect some of my understanding, the comment 12 is that a portion of the retooling costs would 13 get passed on to the consumers as an increase 14 in product price.

15 FACILITATOR BROOKMAN: John?

16 MR. ANDRLE: John Andrle. 17 Yes, that's correct. I mean, 18 that's how normally it's done. The tooling is 19 depreciated over the life of the production. 20 So we could have a significant impact, tooling 21 impact, which would start to be a depreciated 22 annealing on the production of that product.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 244 1 FACILITATOR BROOKMAN: Yes, Dale? 2 MR. BASSO: Dale Basso, WEG. 3 One of the other things we haven't 4 really mentioned at this point, we mentioned 5 that it could cause some redesign for the 6 equipment manufacturers to get into their 7 equipment.

8 But the other area that often 9 comes up with small motors like this is that 10 they get them certified by a third party or 11 they get their equipment certified by a third 12 party with our motor in it. It could happen 13 either way. 14 And it's specific to that part 15 number motor of that particular customer. It 16 still could be a general purpose motor. It 17 could still be a motor off the shelf for us. 18 But now that customer is tied to 19 if we ever make a change to that motor, they 20 have to go get that motor recertified in their 21 equipment. And so there is a certification 22 expense that goes with that when that's a

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 245 1 change. 2 It is not an uncommon occurrence 3 in fractional horsepower motors. So that is 4 something else we will try and quantify for 5 you. 6 FACILITATOR BROOKMAN: Got you. 7 Thank you. 8 MR. VAN BUSKIRK: Just a question 9 for clarification. That certification cost is 10 borne by the OEM?

11 MR. BASSO: Correct. 12 FACILITATOR BROOKMAN: Jim Raba? 13 PRESIDING OFFICER RABA: Jim Raba,

14 DOE. 15 John or Dale, if you have data, 16 your samples of different sizes or types of 17 the motors, could you provide some examples, 18 real-world, that you could share, either for 19 tooling and retooling or the cost of, say, 20 listing or certifying the motor? 21 We're not saying for safety now. 22 We're saying for efficiency if that's where

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 246 1 we're going. That's my point there. I mean, 2 is this something we should factor in? And to 3 what degree? Is there any data you could 4 provide? 5 I mean, it's something we should 6 consider, nonetheless. That's a good point 7 you bring up. 8 FACILITATOR BROOKMAN: Yes, 9 follow-on, Dale. 10 MR. BASSO: Just to clarify. It's 11 not an issue of certification for the 12 efficiency. It actually is typically a safety 13 certification, but it's for that piece of 14 equipment being certified and certified with a 15 particular part number motor in it. And so if 16 anything changes to that motor, it has to go 17 through the recertification process.

18 FACILITATOR BROOKMAN: And the 19 additional cost?

20 MR. BASSO: Yes.

21 PRESIDING OFFICER RABA: That's a 22 good point. I agree. I mean, no question

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 247 1 there. It's got to be that part, that number, 2 that number, that motor, and so on. So, 3 again, factored in, again, I think we 4 understand that this is all part of the I 5 would say markup process, but it's all part of 6 the costing-out process for sure. 7 If there is any other segment 8 along with that that you believe would have 9 some impact on efficiency or the cost of 10 incrementally increasing efficiency, add that, 11 too, if you would. But, again, the data would 12 be very helpful. Thank you very much. 13 FACILITATOR BROOKMAN: Charlie,

14 have a comment?

15 MR. STEPHENS: No. 16 FACILITATOR BROOKMAN: Okay. Yes,

17 Rob? 18 MR. BOTELER: One other that just 19 comes to mind when Dale made such comment is 20 the vast majority of these products have 21 thermal protection. So when we go through our 22 process of redesign and retesting, there is

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 248 1 another incremental test that we would have to 2 do on all of these thermal testing to make 3 sure we had the right protectors on these. So 4 the additional cost will include it. 5 FACILITATOR BROOKMAN: Okay.

6 Thanks. 7 MR. VAN BUSKIRK: So another issue 8 I want to highlight as we start into the 9 life-cycle cost analysis or review of the 10 preliminary analysis is that in the 11 preliminary analysis, the Department has one 12 baseline efficiency, but any comments that 13 interested parties may have on either the 14 baseline efficiency value that the Department 15 has or the distribution of efficiencies that 16 it should consider in the market, that would

17 be useful. 18 So electricity prices. In the 19 preliminary analysis, the Department considers 20 that the electricity prices relevant for these 21 motors are likely to be close to the average 22 electricity prices. The Department,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 249 1 therefore, used a distribution of electricity 2 prices derived from EIA form 861, which is the 3 reporting form for utilities, where they 4 report revenues and volume of sales for three 5 classes of customers: industrial, commercial, 6 and residential. 7 And then the Department did 8 electricity price projections based on the 9 Energy Information Administration's annual 10 energy outlook 2008 reference case, and has 11 scenarios for high growth and low growth cases 12 of the EIA forecast. which has slightly 13 different projections for future electricity 14 price trends. 15 Any comments, questions? Yes? 16 MR. BALLO: Tim Ballo. 17 Just quickly, something we raised 18 consistently is that the AEO 2008 does not 19 include price impacts of a carbon cap. And we 20 encourage the Department to look to estimates 21 of future electricity prices. It incorporates 22 estimates of the impact of the carbon cap.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 250 1 FACILITATOR BROOKMAN: Thank you. 2 MR. VAN BUSKIRK: I think a 3 clarifying question I would like to ask is in 4 recent rulemakings, the Department provided 5 monetized estimates of the value of carbon 6 emissions reductions. And would you like to 7 see both estimates of emissions reductions and 8 modified electricity price or what is the 9 specific request? 10 MR. BALLO: Tim Ballo. 11 I'm not trying to get the 12 Department to double count anything. And that 13 is a tricky issue. I think, at minimum, you 14 have to consider the impact of a carbon cap on 15 electricity prices. 16 At that point if you're 17 considering that, I think the other economic 18 benefit of an increase in efficiency and a 19 reduction in energy use is the incremental 20 change in the price of allowances under the 21 carbon cap. 22 If you consider those two things,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 251 1 I think you have considered everything that 2 you consider. If you're not going to assume 3 for the sake of your projection of electricity 4 pries a cap on carbon, I think that's when you 5 have to get into analyzing the social cost of 6 carbon dioxide emissions and calculating those 7 values, which is something the Department has 8 done to some extent in past rulemakings. 9 FACILITATOR BROOKMAN: Charlie? 10 MR. STEPHENS: Charlie Stephens, 11 Northwest Energy Efficiency Alliance. 12 I think dealing with the purpose 13 of the carbon cap or carbon cap and trade 14 system is to internalize those costs into the 15 cost of energy. I think it's appropriate to 16 put it in the cost of energy ultimately.

17 I know the West Coast states have 18 pretty much done this already. They've 19 already got their own estimates of exactly-- 20 based on the mix of generation out there--what 21 the impact will be on electricity prices, for 22 instance, out there at various levels of

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 252 1 carbon tax and carbon cap. 2 And so it's being done in a lot of 3 places. I don't think it's that hard to do. 4 And I think it's appropriate. 5 MR. KIDO: Michael Kido, DOE. 6 Just sort of as a follow-up to 7 those two comments, are there any particular 8 studies or sets of data that you would 9 recommend that the agency take a look at? 10 MR. BALLO: Tim Ballo. 11 Well, first off, there was an 12 analysis done of the Lieberman-Warner bill, 13 which did some projections of the impact of 14 that legislation on electricity prices out to, 15 I think, like 2030. 16 Also, even in the absence of any 17 nationwide legislation, there are regional 18 caps on emissions that, for example, in the 19 Northeast, there is currently a market for 20 emissions. They are priced in the marketplace 21 and incorporated into future values, will be 22 incorporated into future values of

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 253 1 electricity. 2 However, those, to my knowledge, 3 are not reflected in AEO 2008. So if there 4 will be a new version of that out, which will 5 be used in the rulemaking and would reflect 6 the RGGI impacts. That would address part of

7 the concern. 8 MR. KIDO: Michael Kido, DOE. 9 Just to sort of follow up again. 10 So are there any studies that actually take 11 those particular factors into account that we

12 could look at? 13 MR. BALLO: Tim Ballo. 14 There was some analysis done of 15 the impacts of RGGI when it was being debated. 16 And I can make sure those get to the 17 Department. 18 FACILITATOR BROOKMAN: Charlie, do 19 you have specific ones to look at? 20 MR. STEPHENS: Charlie Stephens. 21 There are some out there. They're 22 often done state by state or region. The RGGI

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 254 1 ones were regional analysis. And those are 2 available. In fact, I download them from 3 online. 4 It's not that hard to get a hold 5 of them. The problem is that it isn't 6 trivial. There are two ways to look at how 7 this plays out. 8 There was a recent study that was 9 published in the last month and a half or so 10 that is a little bit unrealistic and I think 11 overestimated the cost of the carbon cap and a 12 carbon tax because of the way it dealt with 13 coal-fired power plants and how they were 14 phased out of the system. It didn't look at 15 the phaseout. It looked at alternatives for 16 new power plants only. That's probably not 17 the way to look at this. 18 So it is a little bit tricky. And 19 you have just got to be sure that it's 20 consistent. As you pick up one study and 21 another, you have to make sure they're all 22 consistently looking at the methodology for

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 255 1 how you price carbon and its impacts in power 2 prices. 3 FACILITATOR BROOKMAN: Michael? 4 Yes, please, Gloria? 5 MS. PUMPUNI: Gloria Pumpuni from

6 AHRI. 7 I guess one comment I have is 8 there seems to be a lot of uncertainty about 9 this. And that is the whole point, that there 10 is so much speculation as to what this -- if 11 there is going to be a trading system or a cap 12 program, what it is going to be. 13 And I would caution DOE, including 14 these analyses to make sure it's based on very 15 solid evidence because there's a lot of 16 confusion in the marketplace. 17 And another point is as we go 18 forward and try to monetize carbon emissions, 19 we have to really look at how this value is 20 allocated, you know, the benefits are 21 allocated to the consumer, to the 22 manufacturer, or who gets the monetary

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 256 1 benefit. And that I think would have a huge 2 impact on the life-cycle cost analysis. 3 MR. VAN BUSKIRK: Thank you very 4 much for the input and the clarification. We 5 will have another chance to discuss this in 6 the other NOPR analysis section. 7 So other inputs into the 8 life-cycle cost, DOE assumed a $252.90 9 installation cost, again based on RS Means. 10 Installation costs were assumed to not vary 11 with equipment price for efficiency level 12 except for the contractor markup and in this 13 preliminary analysis. 14 Discount rates were derived from 15 estimates of the cost of capital of companies 16 for commercial and industrial sectors. We 17 used a weighted cost of capital model for 18 doing that. 19 Cost of capital and interest rates 20 varies over time. We followed the methods of 21 the Federal Reserve in taking a 40-year 22 average of the cost of capital equation

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 257 1 parameters and the weighted average value. 2 Real cost of capital was 5.92 percent for 3 agricultural and industrial owners and 5.89 4 percent for commercial. 5 Any comments on these inputs? 6 FACILITATOR BROOKMAN: Why don't 7 you finish with the other input? 8 MR. VAN BUSKIRK: Other inputs?

9 FACILITATOR BROOKMAN: Yes.

10 MR. VAN BUSKIRK: So for the 11 equipment lifetime, the Department followed 12 the same approach that it used in the 13 determination analysis using an average of 14 nine years for polyphase motors and seven 15 years for capacitor-start motors based on a 16 literature survey and industry input obtained 17 during the determination analysis. And we 18 used a range of lifetimes to characterize the 19 variability.

20 FACILITATOR BROOKMAN: So let's 21 see if there are any comments on these other 22 inputs listed on 76 and 77. How does this

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 258 1 track with manufacturers' experience? Rob? 2 MR. BOTELER: Well, it's Rob

3 Boteler. 4 Explain to me the $252.90 5 installation cost. I'm not exactly sure what 6 you mean.

7 MR. VAN BUSKIRK: That's an adder. 8 Because in the preliminary analysis it's not 9 varying with the efficiency or characteristics 10 of the motor, it doesn't have an impact on the 11 incremental consumer economics. 12 Now, when the Department examined 13 the cost estimates in RS Means, there wasn't a 14 variation in the installation labor for small 15 electric motors because most of the labor 16 apparently was going into other aspects of the 17 installation. 18 In RS Means, when you go to the 19 medium motors, the installation cost does vary 20 with motor size, but the variations stop at 21 size levels above those being considered in 22 this analysis.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 259 1 FACILITATOR BROOKMAN: Okay.

2 MR. VAN BUSKIRK: Onward. So when 3 the Department runs through the analysis, it 4 gets a distribution of results, some motors 5 having a net life-cycle cost, others having a 6 net savings. 7 In this particular case, with 8 polyphase one-horsepower motor, candidate 9 standard level 2, 85.5 percent, the mean 10 life-cycle cost savings is $29. 11 On the next slide, this 12 illustrates the variation of life-cycle cost 13 with efficiency given the various inputs that 14 have been described to you today. 15 So you'll notice how the 16 life-cycle cost curves turn sharply up as you 17 approach the maximum technologically feasible 18 level. And they are sort of broad, sloping 19 downward, and then maybe flat or turning up 20 slightly towards the max. tech. level. 21 So there's a big, there's a broad 22 flat area of the life-cycle cost. And then

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 260 1 these curves show a hard constraint at the 2 highest levels. 3 FACILITATOR BROOKMAN: Roger? 4 MR. DAUGHERTY: Roger Daugherty. 5 Perhaps you could just explain in 6 layman's terms the difference between 7 life-cycle cost in slide 79, what is meant by 8 life-cycle cost savings, which is in 78. How 9 do you get a life-cycle cost savings?

10 MR. VAN BUSKIRK: Versus 11 life-cycle savings? It is relative to the 12 baseline. So the difference between the 13 life-cycle cost of the baseline unit and the 14 life-cycle cost of the standard unit is the 15 life-cycle cost savings.

16 So because for some levels the 17 operating cost, the present value of the 18 operating cost, provides a savings due to 19 decreased energy consumption, the life-cycle 20 cost of some of the more efficient motors is 21 lower because the savings in energy costs when 22 discounted to the present is less than the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 261 1 increase in cost due to the higher efficiency. 2 MR. DAUGHERTY: Roger Daugherty. 3 I guess the question was trying to 4 find where your base was at. 5 MR. VAN BUSKIRK: The base is the 6 baseline. Yes. So in this graph, it's the 7 far left dot. The farthest left dot is the 8 baseline. 9 MR. DAUGHERTY: The question is, 10 what design is that? Were all of these at the 11 same efficiency level? Is that what you are 12 saying? What is your reference point? 13 MR. VAN BUSKIRK: I will have to 14 refer to the engineering folks, who did the 15 design analysis for the baseline units. 16 MR. NARDOTTI: Matthew Nardotti. 17 The left-most design is the baseline unit that 18 we examined in the engineering analysis. So 19 the very first model, the very first point in 20 the efficiency curves that we have is the 21 baseline, is again the left-most point. 22 That's the design.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 262 1 MR. VAN BUSKIRK: So in the 2 engineering analysis, they started with a 3 baseline efficiency. In the preliminary 4 analysis, the Department did a very slight 5 adjustment to make it match the market data we 6 had. But it was the baseline design as 7 assumed in the engineering analysis. 8 Other questions, comments? 9 (No response.)

10 LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSIS 11 MR. VAN BUSKIRK: Okay. For the 12 payback period, this graph illustrates the 13 distribution of payback periods resulting from 14 this analysis. In this particular case, 15 standard level 3 for a CSIR 0.5-horsepower 16 motor, the mean value is approximately 6 17 years. 18 FACILITATOR BROOKMAN: Yes, 19 please, Rob? 20 MR. BOTELER: And when you 21 determined that mean value for six years, did 22 you include that installation cost of $252?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 263 1 MR. VAN BUSKIRK: It's the payback 2 period on the incremental costs. So the 3 installation cost in the preliminary analysis 4 did not vary with the efficiency level. 5 MR. BOTELER: So it is included in 6 the base case and in the --

7 MR. VAN BUSKIRK: Yes. So the 8 difference is zero. 9 MR. BOTELER: Zero. Okay. 10 MR. VAN BUSKIRK: And then in 11 graphical form is a function of the motor 12 efficiency. This is illustrated in the 13 current slide, slide 81. 14 And, again, you can see the effect 15 of the sharp increase in engineering and 16 manufacturing costs as you approach the 17 maximum technologically feasible level. 18 FACILITATOR BROOKMAN: Okay? Yes, 19 please? 20 MR. BARTH: Jeff Barth, A. O. 21 Smith. 22 It appears to me that on these

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 264 1 charts, you're added in some confusion by 2 going from one design to another. In one case 3 you do a three-phase single or one-horsepower 4 motor. And you're doing a payback analysis 5 cost-wise. And in the next one, you're doing 6 a three-quarter-horse or a half-horsepower 7 CSIR motor and doing the payback in time on

8 that. 9 And you're not comparing apples to 10 apples. You're more comparing apples to 11 oranges and adding in some confusion. Stick 12 to one model. If you're going to compare the 13 payback cost on one model, do the payback in 14 years on the other. 15 Personally I find that a little 16 confusing because you're saying that the 17 payback is 6 years on the one model, but if 18 you go back to the one-horsepower 3-phase 19 motor and the way I understand it, the payback 20 on that appears to be about 17 years, not 6 21 years. Is that a correct statement?

22 MR. VAN BUSKIRK: In the current

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 265 1 plot, the payback time, the average payback 2 time, for CSL 3 for the polyphase motor is 3 shown as approximately 17 years on the ground. 4 And that is right. 5 So during the preliminary analysis 6 stage, the Department is vetting to a large 7 extent the methodologies, rather than the 8 results, with the understanding that between 9 the preliminary stage and the notice of 10 proposed rulemaking, there will be revisions 11 to the analysis. 12 So we have covered two -- yes?

13 MR. ANDRLE: John Andrle. 14 Would you go back to that chart 15 one more time and explain? You've got 16 multiple points. 17 FACILITATOR BROOKMAN: This is 81 18 you're looking at? 19 MR. ANDRLE: Yes, chart 81.

20 MR. VAN BUSKIRK: Yes.

21 FACILITATOR BROOKMAN: Yes? 22 MR. ANDRLE: You've got multiple

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 266 1 points. 2 MR. VAN BUSKIRK: The first one, 3 the first point, on the left for each curve is 4 the CSL 1. The second one is CSL 2. The 5 third one is CSL 3. And the fourth one is CSL

6 4. 7 MR. ANDRLE: Okay. This is John 8 Andrle again. But, then, one chart back we 9 were talking about the data point being the 10 baseline motor, not the CSL 1. So how do we 11 know which chart has which starting point,

12 then?

13 MR. VAN BUSKIRK: We can add 14 labels for the version of the presentation 15 that goes on the Web to clarify. The 16 Department welcomes comments on clarifying the 17 presentation.

18 FACILITATOR BROOKMAN: How we 19 clarify these. Jeff? 20 MR. BARTH: I'm thinking about 21 this. I personally think that maybe you 22 should separate the charts out so that you

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 267 1 don't have three different types of data on 2 the same chart? Payback in cost and payback 3 in years for one design, another design, 4 another design. 5 So you keep them separate, and you 6 take out some of that confusion. 7 MR. VAN BUSKIRK: Thank you very

8 much for that. 9 We have gone through two sections. 10 How are we doing, Doug? Time for a break or

11 --

12 FACILITATOR BROOKMAN: Let me see. 13 Keep going? 14 MR. VAN BUSKIRK: Keep going?

15 FACILITATOR BROOKMAN: Is that 16 okay with everybody?

17 NATIONAL IMPACT ANALYSIS 18 MR. VAN BUSKIRK: Okay. National 19 impact analysis covers both the shipments 20 analysis and the national impact analysis. So 21 I will discuss them both now. 22 Purpose, shipments analysis is to

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 268 1 estimate small electric motor equipment 2 shipments over time. National impact analysis 3 has the purpose of estimating the national 4 energy savings from more efficient small 5 electric motor equipment at different 6 efficiency levels. And it has the purpose of 7 estimating the national economic impact in net 8 present value terms of the increased 9 efficiency equipment. 10 National impact analysis 11 calculation takes input from both the 12 life-cycle cost analysis, where it gets the 13 average values for distribution of consumer 14 economics and input from the shipments model. 15 National energy savings are 16 calculated for the period 2015 through 2045. 17 The NPV, the national net present value, is 18 calculated from the period 2015 to 2055, where 19 the shipments go until 2045.

20 So the reason for the extended 21 calculation period is that you will have 22 shipments in 2045, but it will take time for

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 269 1 that equipment to cycle out of the stock. And 2 so for consistent calculation, we include 3 operating expenses from the equipment that is 4 shipped in 2045 and before. 5 So one issue that comes up in this 6 analysis is that an increase in installed cost 7 of small electric motors could reduce 8 shipments due to migration to uncovered 9 products. In the preliminary analysis, the 10 Department does not include an elasticity only 11 as a sensitivity, does not include this effect 12 of a potential reduction in shipments due to 13 increased cost. 14 The Department welcomes any 15 comments and data that would allow it to model 16 such effects if they exist.

17 FACILITATOR BROOKMAN: Rob?

18 MR. BOTELER: Rob Boteler. 19 I think when we had this 20 discussion back -- I don't know -- a year ago. 21 There was some concern that lower efficient 22 shaded-pole product, things like that, may be

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 270 1 an alternative to moving to the premium 2 product. 3 Actually, as we look at it now, 4 the manufacturer didn't think that was going 5 to happen, but that was a question. But I 6 think if we looked at it now, we would tell 7 you that the induction motor will continue to 8 lose ground due to the more efficient, 9 permanent magnet, switch reluctance, and 10 variable speed applications. 11 So I think that we would want you 12 to be conservative in your growth numbers 13 going forward to -- what was it? -- 2045.

14 MR. VAN BUSKIRK: Yes. 15 MR. BOTELER: Because this product 16 is going to be replaced, but it is going to be 17 replaced by a much more efficient product in 18 those three categories: variable speed, 19 permanent magnet, and switch reluctance. 20 FACILITATOR BROOKMAN: Okay. 21 Thank you.

22 MR. VAN BUSKIRK: Yes. In the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 271 1 preliminary analysis, the shipment projection 2 is continued growth of shipments. So that's a 3 very useful comment. 4 Another element of looking at 5 shipments -- this also is used in the 6 life-cycle cost analysis -- is how shipments 7 break out to different types of applications. 8 Since the Department didn't get additional 9 detail between the determination analysis and 10 the preliminary analysis, this breakout of the 11 portion of shipments to different applications 12 is essentially the estimates coming from the 13 determination analysis. So yes. 14 FACILITATOR BROOKMAN: Yes, 15 please?

16 MR. BOTELER: Yes. I have a few 17 comments on this one. It's Rob Boteler. 18 Conveyors that would fall into 19 this category, it's unlikely that the conveyor 20 would be anything other than a C-face 21 connection. It would not be a T-frame 22 connection.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 272 1 Farm machinery, speaking as a

2 manufacturer who sells blower motors for 3 farms, for hog farms and chicken farms, we 4 wouldn't be using open motors. They wouldn't 5 last because they would plug up immediately. 6 And the other application is 7 really screw conveyors for feed delivery to 8 farms. And those would never be open motors. 9 They wouldn't survive. 10 Item number 6 is food machinery. 11 In the food and beverage area, we would never 12 use an open motor. We would only use an 13 enclosed motor, more than likely a wash-down 14 stainless steel definite purpose motor. 15 I think in general industry -- 16 what I would do is change that one maybe to 17 medical because in the medical area, there are 18 some applications in hospitals where there are 19 blood pumps and oxygen generators and things 20 like that that perhaps could use this product. 21 Woodworking is another area. It 22 would be very rare that we would put an open

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 273 1 motor into any kind of a dusty severe 2 environment because of its life expectancy. 3 We would have to change your life expectancy 4 from seven years to about seven days. 5 I would say that the area that you 6 would add those items that I eliminated back 7 into would be in small compressors. And I 8 think that the difference that this would make 9 in your calculations would then become in the 10 -- and maybe that is coming up, but in the 11 annual hours of operation when we look at 12 compressors, particularly small compressors in 13 residential and gas stations, small light 14 commercial, the hours of application per year 15 are very, very small, very low. 16 FACILITATOR BROOKMAN: Thank you. 17 MR. VAN BUSKIRK: Thank you. The 18 Department would welcome any comments, data, 19 and estimates of what the hours of operation 20 for a new category would be. 21 FACILITATOR BROOKMAN: Yes, 22 please, Dale?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 274 1 MR. BASSO: Yes. Dale Basso, WEG. 2 Kind of to Rob's point, I think 3 what we ought to do is just come up with the 4 categories that really exist because I would 5 agree with Rob. Most of them don't exist for 6 open motors. Compressors, 7 heating/ventilation, some general industry, 8 and pumps and fans might be the only ones that 9 actually qualify for the kind of products 10 we're talking about. 11 And so this mixture was really 12 based off of all fractional motors, as opposed 13 to the specific ones that are being discussed. 14 So we really narrow the categories way down. 15 FACILITATOR BROOKMAN: Charlie? 16 MR. STEPHENS: Charlie Stephens, 17 Northwest Energy Efficiency Alliance. 18 In your table that you've got in 19 chapter 2, it's table 2.7.1. You've got some 20 strange categories there. I'm trying to 21 understand what residential packaging 22 machinery looks like. But you've got some

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 275 1 percentages of motors in there. 2 I can't envision a piece of 3 residential packaging machinery or machine 4 tools in the residential setting. So I'm 5 thinking there are some errors in there. 6 And under pumps and pumping, we 7 have pool pumps in here somewhere in the 8 residential. No? Special purpose motors. 9 They're the right type, but they're built with 10 special components. 11 MR. BOTELER: This is Rob Boteler. 12 The pool pump motors are flange 13 motors. They're not general purpose. 14 FACILITATOR BROOKMAN: Yes, 15 please, Tom? 16 MR. HINK: Tom Hink, Regal-Beloit. 17 I just want to make one comment, 18 too, that I think in our most recent request 19 to supply the shipment by application, we were 20 going to put zeroes in number two for 21 commercial industrial air conditioning. 22 FACILITATOR BROOKMAN: Would you

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 276 1 say again where you are? 2 MR. HINK: Slide 87. 3 FACILITATOR BROOKMAN: Okay. 4 MR. HINK: Number 2, we are 5 talking about commercial/industrial heating 6 and ventilating. I thought we were going to 7 make those as zeroes for the purposes of this

8 chart. 9 Also, I just want to make the 10 distinction that when we were asked to supply 11 sales volume of all the general purpose open 12 motors, they could include motors that we 13 would sell into distribution channels that 14 could eventually be into air conditioning 15 applications. 16 And so it would be misleading if 17 you try and use all of these percentages and 18 apply them back to the sales numbers that we 19 had supplied in the past because some of the 20 sales numbers may be too high because they may 21 actually include air conditioning motors that 22 are covered by some other standard.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 277 1 I'm just saying if you're looking 2 at impact in total savings and so on, you have 3 to take that into account as well. 4 PRESIDING OFFICER RABA: Jim Raba,

5 DOE. 6 Can you break that out for us? 7 MR. HINK: We'll try.

8 PRESIDING OFFICER RABA: Thank 9 you. 10 FACILITATOR BROOKMAN: Any other 11 of these? I guess, Dale, your last comment 12 was maybe you all should just bring back a 13 chart with the applications that you think are

14 most relevant that are most accurate and send 15 that, rather than spending a lot more time 16 with it here. 17 I think we'll just do it that way. 18 Okay. So that is on your to do list. 19 MR. VAN BUSKIRK: Okay. The next 20 slide shows the distribution of sales by 21 different sizes and number of poles for 22 polyphase motors.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 278 1 Again, this is adjusted from data 2 from year 2000 data, that was obtained for the 3 determination analysis and then projected 4 forward using the growth factor. And similar 5 tables are available in the TSD for this 6 single-phase motor. Okay? 7 So this plot on slide 89 shows the 8 graph of the stock of motors which is affected 9 by a standard. You see at the front of the 10 plot a fairly steep ramp-up. That represents 11 the change-out of the existing motors with the 12 new regulated motors. 13 Then you hit a long plateau, which 14 increases slightly due to the assumption of a 15 gradual sales increase in the preliminary 16 analysis, which people commented on just a 17 little while ago. 18 Then the end of the analysis 19 period for shipments is 2045. So the ramp at 20 the end of the graph is the change-out of

21 those motors as the motors sold on 2045 and 22 before get replaced by the post-2045 motors.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 279 1 This next slide, slide 90, 2 illustrates the trade-off between the 3 increased equipment cost and the operating 4 cost savings. Again, in the preliminary 5 analysis, we're just illustrating one example

6 case. 7 We expect, the Department expects, 8 the details of the calculation will change 9 between the preliminary analysis and the 10 notice of proposed rulemaking. 11 So you see that the effect of the 12 increase of equipment price is fairly steady. 13 The operating cost, the annual operating cost 14 savings, ramped up, sort of increased 15 gradually. And then there were some leftover 16 savings after 2045. 17 And the Department takes the 18 present value of the net savings to calculate 19 the net present value of the savings at the 20 national level. 21 So this again is a summary, 22 putting perhaps a little too much information

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 280 1 on one slide, illustrating how for the 2 different candidate standard levels how the 3 energy savings increases more or less linearly 4 with the increasing points of efficiency and 5 the relative magnitude of the savings between 6 capacitor-start induction-run motors, 7 polyphase motors, and capacitor-start 8 capacitor-run.

9 FACILITATOR BROOKMAN: Rob? 10 MR. BOTELER: Robert, what annual 11 hours of operation were used for this? 12 MR. VAN BUSKIRK: The average 13 annual hours of operation were a little over 14 2,500. 15 MR. BOTELER: Okay. 16 MR. VAN BUSKIRK: And any 17 additional data on what the annual hours of 18 operation are would be appreciated. 19 So in terms of net present value 20 of the impact on the country, these are the 21 plots again, plotting all three on the same 22 graph. You see the reflection of what we saw

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 281 1 in the life cycle cost analysis, where for CSL 2 1 and CSL 2 and sometimes CSL 3, there is a 3 sort of level impact of the economics. 4 And then, as the engineering cost 5 curve starts turning up steeply, then the net 6 benefit of the economics drops steeply.

7 FACILITATOR BROOKMAN: John? 8 MR. ANDRLE: I just have another

9 comment about the use on these charts. 10 Instead of using the CSL levels, this chart, 11 shouldn't the charts being used back here on 12 some of the payback, shouldn't that have been 13 based back to the baseline motor because, I 14 mean, that is the motor that -- isn't that the

15 motor that -- 16 MR. VAN BUSKIRK: Well, the chart 17 is illustrating the net economic impacts of 18 the standard. So back at the baseline motor, 19 the net impacts will be zero. And in this 20 analysis, the Department didn't interpolate 21 between baseline and CSL 1. 22 If interested parties want more

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 282 1 information on how those impacts are seen for 2 a greater range of efficiencies, then the 3 Department would appreciate comments to that

4 effect. 5 FACILITATOR BROOKMAN: Yes, John? 6 MR. ANDRLE: John Andrle again. 7 Well, in the other document that 8 -- is there enough detail that we can 9 reconstruct these charts ourselves? I mean, 10 is it enough --

11 MR. VAN BUSKIRK: Yes. Yes.

12 FACILITATOR BROOKMAN: In the TSD? 13 MR. VAN BUSKIRK: Each point on 14 the chart should be both in chapter -- well, I 15 can't remember if it's in the executive 16 summary or chapter 2 -- and in the topic 17 chapter of the TSD. In this case the national 18 impact analysis chapter, which is chapter 10. 19 MR. HOPKINS: Asa Hopkins, 20 Lawrence Berkeley Lab. 21 Also, the draft preliminary life 22 cycle cost, Excel spreadsheets, and

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 283 1 instructions for using them are also 2 available. So you can download the same Excel 3 spreadsheets that we have. 4 FACILITATOR BROOKMAN: And they 5 find those where? 6 MR. HOPKINS: Those are linked off 7 of the announcement Web page for this public 8 meeting, the same DOE Web page. 9 FACILITATOR BROOKMAN: Thank you.

10 MR. VAN BUSKIRK: And the 11 Department is committed to assisting any 12 interested parties in being able to understand 13 and use the analyses. 14 FACILITATOR BROOKMAN: Yes, Tim? 15 MR. BALLO: Tim Ballo, 16 Earthjustice. 17 A question on the national 18 analysis. The Department selected one type of 19 capacitor-start, one CSIR, one CSCR, and one 20 polyphase motor for its analysis. 21 So the national impact analysis, 22 when you say, for example, that the CSIRs

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 284 1 would save something like 2.4 quads, you're 2 talking about just for that one motor type 3 that was analyzed. They're all CSIR.

4 MR. VAN BUSKIRK: The results from 5 the example motor were scaled up to represent 6 the whole population of motors. 7 MR. BALLO: Thank you. 8 MR. VAN BUSKIRK: So this is the 9 Department's estimate on regulating the whole 10 population.

11 FACILITATOR BROOKMAN: And the 12 population of all motors?

13 MR. VAN BUSKIRK: All motors 14 within that motor category. 15 FACILITATOR BROOKMAN: Okay. Tim? 16 MR. BALLO: Sorry. Just to 17 clarify, that's all CSIR motors --

18 MR. VAN BUSKIRK: Yes.

19 MR. BALLO: -- or all CSIR motors 20 at a half a horsepower?

21 MR. VAN BUSKIRK: No. All CSIR

22 motors.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 285 1 MR. BALLO: Okay. Thank you.

2 MR. VAN BUSKIRK: So comment on 3 clarifying the labels is appreciated? 4 (No response.) 5 MR. VAN BUSKIRK: This is the same 6 calculation calculated with a real discount 7 rate of seven percent, rather than three 8 percent. The previous calculation was using 9 the three percent real discount rate. 10 What you see is that the overall 11 scale of the net present value of impacts has 12 changed quite a bit, but the relative, you 13 know, whether it's plus or minus, the 14 intercept with zero is pretty similar between 15 the two. And that's because the lifetime of 16 the motors is seven and nine years on average, 17 which is relatively short compared to the 18 payback time when you're using either a three 19 percent or a seven percent discount rate. 20 And their NIA. I think I now --

21 FACILITATOR BROOKMAN: Yes. 22 MR. VAN BUSKIRK: Any other --

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 286 1 FACILITATOR BROOKMAN: Roger? 2 MR. DAUGHERTY: Roger Daugherty. 3 This chart on slide 92, am I 4 hearing that those things that are plotted

5 there are the ones that are off of the Excel 6 spreadsheet that was included at the Web site? 7 MR. VAN BUSKIRK: They are in the 8 NIA Excel spreadsheet. 9 MR. DAUGHERTY: And how do you 10 make a determination that if the net present 11 value went negative but up above you've got 12 national energy savings that are obviously 13 positive in energy, which do you choose as 14 being a determination that that particular 15 efficiency should go forward? 16 MR. VAN BUSKIRK: At this stage of 17 the rulemaking, the Department presents the 18 preliminary analysis. A proposed rule comes 19 at the notice of proposed rulemaking stage. 20 And it's at that time that the Department 21 provides a proposal for the efficiency level 22 and a proposed rationale for the efficiency

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 287 1 level. 2 So at this stage of the rulemaking 3 I can't say how the Department will choose at 4 the next stage. 5 FACILITATOR BROOKMAN: Jim Raba? 6 PRESIDING OFFICER RABA: Jim Raba. 7 If you would like to address that 8 in further comments as to, anybody, their 9 views upon these graphs about the net present 10 value discount rates and so forth and these 11 savings, certainly we would entertain those to 12 be submitted to us for further review and

13 comment. 14 MR. VAN BUSKIRK: As we go to the 15 notice to proposed rulemaking. 16 PRESIDING OFFICER RABA: So right 17 now we're presenting --

18 MR. VAN BUSKIRK: The 19 methodologies.

20 PRESIDING OFFICER RABA: -- the 21 methodologies, the overall preliminaries. And 22 this is where the information and the comments

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 288 1 gathered are very helpful to us. So these are 2 preliminaries for now. 3 FACILITATOR BROOKMAN: So if there 4 was a logic for the decision-making rules, 5 then that would be helpful? 6 PRESIDING OFFICER RABA: Well, Jim 7 Raba again. 8 I say that. Again, one of our 9 purposes was to provide to you, everybody, the 10 thought processes, the methodologies, the data 11 inputs we have been working with and would 12 encourage anything better, data, as far as 13 accurate and refinements. That would be 14 appreciated. 15 FACILITATOR BROOKMAN: Rob, do you

16 have a comment? 17 MR. BOTELER: I think the look on 18 our faces was simply that we were expecting 19 the guidance to come from the Department, not 20 from us to the Department. 21 FACILITATOR BROOKMAN: But you 22 understand the distinction we're making about

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 289 1 preliminary, the preliminary nature of this.

2 MR. BOTELER: Yes. 3 FACILITATOR BROOKMAN: This is 4 methodological at this point.

5 MR. BOTELER: Yes. 6 FACILITATOR BROOKMAN: Right. 7 Okay.

8 PRELIMINARY MANUFACTURER IMPACT ANALYSIS AND

9 OTHER RULEMAKING ANALYSES 10 MR. NARDOTTI: Hello again. I'm 11 here to talk about the preliminary 12 manufacturer impact analysis and some of the 13 NOPR analyses that will be happening in the 14 next stage of the rulemaking. 15 You can see here a flow diagram. 16 And we highlight the preliminary manufacturer 17 impact analysis. The point here is that it 18 was conducted in parallel with the engineering 19 analysis. 20 So the manufacturer impact 21 analysis is actually a NOPR analysis, but the 22 preliminary manufacturer impact analysis is

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 290 1 part of that which is done here in the 2 preliminary analyses. And the point of it is 3 to identify and quantify the potential impacts 4 of energy conservation standards on

5 manufacturers. 6 DOE conducts an MIA in three 7 phases, the first of which, as I said, is done 8 in the preliminary analysis. Phases two and 9 three are done during the NOPR phase. And 10 we'll discuss that in a few more slides. 11 DOE conducted the preliminary MIA 12 by providing an interview guide to NEMA 13 members, which can be found as appendices 12A 14 and 12B on the Web site, the same Web site 15 where the announcement was mentioned before. 16 These interview guides requested 17 information regarding the engineering 18 analysis, efficiency and market data, 19 manufacturer defined key issues, company 20 niches, capital costs and investment, facility 21 impacts, and impacts on consumers as a result 22 of standards. When DOE received written

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 291 1 responses, we then contacted the manufacturers 2 to try and discuss and clarify some of those 3 responses. 4 I would like to talk about some of 5 the key issues that were identified by the 6 manufacturers during that phase. The first is 7 the issue with production and product mix. 8 Implementing standards would mean a higher 9 per-unit cost that could potentially cause 10 consumers to switch to other less expensive

11 motors. 12 A second issue that they 13 identified was compliance costs. In some 14 cases manufacturers may be able to meet 15 proposed standard levels by modifying existing 16 products, but in other cases, the changes may 17 result in a complete product line redesign. 18 This will cause manufacturers to 19 incur one-time conversion capital expenses and 20 product conversion expenses. And so this 21 could also mean an obsolescence of existing 22 tools and assets that the companies have.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 292 1 A third issue that they 2 identified, which we already touched on, was 3 how standards will affect export sales, the 4 proportion of the domestic market that is held 5 by the foreign competition and domestic 6 production levels. 7 There are two more issues that 8 they mentioned. And the fourth was with 9 respect to market shares and industry 10 consolidation. New standards could alter the 11 competitive dynamics of the marketplace, 12 prompting companies to enter the market, exit 13 the market, or even merge with other 14 companies. 15 The interview questions tried to 16 focus on information and helps DOE assess 17 disproportionate cost increases to some 18 manufacturers, increased proportion of fixed 19 cost, potentially increasing business risks 20 and potential barriers to market entry; for 21 example, proprietary technologies. 22 The fifth issue was cumulative

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 293 1 burden. A single regulation might not impose 2 a significant burden on manufacturers, but 3 several impending regulations may have a 4 combined effect with serious consequences for 5 individual manufacturers, groups of 6 manufacturers, or even the entire industry. 7 So assessing this cumulative regulatory burden 8 is something that DOE wishes to learn more 9 about and seeks any comment on. 10 As a result of the preliminary 11 interviews conducted with manufacturers, DOE 12 identified three major concerns of 13 manufacturers. The first is capital expenses 14 to produce standards-compliant motors. 15 As has been discussed earlier, the 16 vast majority of small electric motors market 17 is dominated by the four manufacturers: A. O. 18 Smith, Baldor, Emerson, and Regal-Beloit. 19 These manufacturers produce many 20 other categories of motors. And because of 21 this, the small electric motors market is a 22 relatively small portion of their business.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 294 1 If standards are pushed too high, 2 capital expenses to retool may not justify the 3 continued production of small electric motors. 4 And they may just leave the market. 5 Another issue with capital 6 expenses is for small businesses. They have 7 fewer sources from which to raise capital. 8 And so they, too, may just choose to leave the 9 market, rather than dealing with the 10 difficulty of trying to raise capital 11 necessary. 12 The second major issue of concern 13 is maintaining product availability and 14 futures. It is possible that if efficiency 15 levels are pushed too high for some equipment 16 classes, the motors become larger in diameter, 17 length, or some other dimension, this could 18 cause a consolidation of some horsepowers and 19 eliminate some of today's market. 20 Manufacturers also expressed 21 concern about retrofitting these newer 22 potentially larger motors into already

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 295 1 existing applications. So this would 2 ultimately affect the end user. 3 The last issue that was raised by

4 the manufacturers was the enforcement of 5 potential standards. They're concerned that 6 motors embedded in other equipment, especially 7 those imported, may be non-compliant and could 8 put manufacturers producing 9 standards-compliant motors at a distinct 10 disadvantage. 11 FACILITATOR BROOKMAN: Please do,

12 Dale? 13 MR. BASSO: Dale Basso, WEG. 14 I would like to take that one step

15 further when we talk about lack of enforcement 16 and noncompetitive. It's not just us, the 17 motor manufacturers, that puts it in a 18 competitive situation. It's our customers, 19 the domestic machine manufacturers, who now 20 have a competitive disadvantage against 21 someone who doesn't buy products that meet the

22 standard.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 296 1 So the offshore products may come 2 in with a lower-cost product that doesn't 3 comply and there's no enforcement. So it 4 hurts not only us but them. 5 FACILITATOR BROOKMAN: You raised 6 issues of enforcement earlier, several of you. 7 Do you want to elaborate on them now since we 8 have reached this point? I thought we covered 9 it somewhat this morning. 10 MR. BASSO: Yes. This is Dale

11 Basso. 12 I guess I'm not sure how much more 13 to elaborate other than the fact that we think 14 it would be extremely difficult to enforce the 15 regulation because of the equipment, the motor 16 drop and buried-in equipment coming in from

17 offshore. 18 The motors that are coming in in 19 the boxcar for OEMs might be less of an issue 20 than the equipment coming in in the middle of 21 a piece of equipment that nobody can get down 22 and look at nameplates or do tests on. So it

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 297 1 will never happen. The motors are too small 2 to be a significant enough target.

3 FACILITATOR BROOKMAN: I see. 4 Okay. Yes?

5 MR. BOTELER: The manufacturers 6 would welcome the Department's recommendations

7 on enforcement. 8 (Laughter.) 9 FACILITATOR BROOKMAN: Thank you,

10 Rob. 11 PRESIDING OFFICER RABA: We will, 12 of course, examine that issue. 13 FACILITATOR BROOKMAN: Thanks, Rob 14 and then Jim Raba, both of you. Thank you. A 15 little bit of humor in the afternoon. 16 Okay. We're moving on. Yes?

17 MR. NARDOTTI: Yes.

18 FACILITATOR BROOKMAN: I know. I 19 think we're in good shape. This last segment 20 goes rapidly. 21 MR. VAN BUSKIRK: A brief 22 interlude. This is Robert Van Buskirk.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 298 1 Brief interlude to life cycle 2 costs subgroup. I got ahead of myself. 3 Preliminary analysis. As we go from the 4 preliminary analysis, we go through several 5 steps. 6 In the first step, the Department 7 will revise the preliminary analysis and then 8 include a series of additional analyses for 9 the notice of proposed rulemaking stage. 10 Those additional analyses will 11 include the life cycle cost subgroup analysis, 12 the full manufacture impact analysis, the 13 utility impact analysis, employment impact 14 analysis, the environmental assessment, and 15 the regulatory impact analysis. 16 So when the Department revises the 17 preliminary analysis, for engineering, it will 18 consider comments and revise using the latest 19 data and information. 20 For the life cycle cost and 21 payback period analyses, it will consider 22 comments, revise using the latest data, and

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 299 1 create an analysis for the LCC consumer 2 subgroups. And, similarly, for the national 3 impact analysis, it will consider comments and 4 revise using the latest available data. 5 For life cycle cost subgroup 6 analysis, we have had some discussion of this 7 earlier today. The purpose is to evaluate 8 impacts on any identifiable groups or 9 customers who may be disproportionately 10 affected by any of the national energy 11 efficiency standards or the levels that might

12 be chosen. 13 The method is to create a 14 specialized version of the life cycle cost and 15 payback period analysis for those subgroups of 16 customers that fall into the identifiable 17 subgroups, have a spreadsheet tool that 18 provides transparency for the calculation for 19 the public. And a key issue is which 20 subgroups should be included. 21 I think as we evaluated the 22 applications, we can cross out farmers since

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 300 1 that will be closed motors, but still there 2 may be small business groups or particular OEM 3 manufacturers. Earlier today people were 4 mentioning, for example, medical equipment. 5 And then the output is customer 6 subgroup life cycle costs and payback periods 7 for those who will be especially -- so 8 particularly there may be groups that are 9 particularly sensitive to the purchase price 10 increases earlier in the day. Interested 11 parties mention design constraints and 12 equipment constraints that particular 13 applications and subgroups might have. 14 So now the next is the 15 manufacturer impact analysis. I'll hand back

16 to Matt. 17 MR. NARDOTTI: So to expand on 18 what I just talked about a few minutes ago, so 19 the actual manufacturer impact analysis is one 20 required by the statute. The purpose, as I 21 said, is to assess the impacts of small 22 electric motor manufacturers.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 301 1 During this analysis, DOE will 2 identify the manufacturer subgroups that 3 should be considered in more detail, as Robert 4 just mentioned. And DOE will also examine the 5 impacts of the cumulative regulatory burden. 6 Under method here, we see that DOE 7 shows a couple of tools available to conduct a 8 manufacturer impact analysis. The first one 9 is the government regulatory impact model, or 10 the GRIM, which is an industry cash flow 11 analysis. It also calculates the industry net 12 present value. 13 The second tool available to DOE 14 is manufacturer interviews. I will describe 15 this in a little more detail and what it 16 entails on the next slide. 17 The output of the MIA is again the 18 industry net present value, the subgroup net 19 present value, and any other impacts that are

20 relevant to manufacturers. 21 One last point of emphasis, when 22 we conduct a manufacturer impact analysis, we

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 302 1 stress confidentiality. So as a contractor to 2 DOE, we will establish at NCI the 3 nondisclosure agreement so that we can conduct 4 the interviews. 5 This slide shows that the MIA is a 6 three-phase process. Phase one includes the 7 industry profile. Phase two includes the 8 development of the Straw-man GRIM and the 9 development of the interview guide. 10 In phase three, we include the 11 conducting the manufacturer interviews and 12 industry-wide subgroup analysis. We also 13 assess direct employment competition and the 14 cumulative burden. The last activity of phase 15 three is finalizing MIA results for the NOPR. 16 The MIA is current and coordinated 17 with activities throughout the rulemaking 18 process. And that is the purpose of this 19 slide, just to show how the phases are 20 conducted and the timing relative to the other 21 analyses. 22 FACILITATOR BROOKMAN: Yes,

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 303 1 please, Rob? 2 MR. BOTELER: Our next step is 12 3 months away. Is that right? Is it February 4 of -- July of '09? So the actual 5 manufacturing, all of this, the impact and 6 potentially plant visits and everything, would 7 have to happen before July of this year? 8 MR. NARDOTTI: That is correct. 9 MR. BOTELER: Thank you. 10 MR. NARDOTTI: So phase one is the 11 industry profile. What DOE does here is look 12 at all available public information to 13 describe the manufacturing of small motors. 14 Some of the things we analyzed to 15 develop the industry profile include industry 16 reports, company annual reports, and Web sites

17 themselves. 18 We also use the information 19 gathered during the preliminary MIA. And we 20 revisit that information and try and be more 21 thorough with it. The combination of these 22 things gives us a picture of what the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 304 1 manufacturing world looks like for small 2 electric motors. 3 The second phase is to develop the 4 Straw-man GRIM. DOE uses the industry profile 5 developed in phase one as an input to the 6 GRIM. That is the basis for our initial

7 Straw-man GRIM. 8 What happens is we will, after 9 phase two starts, take the information we 10 learned in the interviews and recalculate the 11 GRIM based on what we have learned during the 12 interviews. 13 Continuing with phase two, the 14 second step is to develop the interview guide. 15 Basically DOE looks at some of the topics 16 that are relevant to manufacture in small 17 electric motors. 18 And we will prepare an interview 19 guide. This interview guide will be mailed 20 out to manufacturers, who agree to have the 21 interviews ahead of time so that they will 22 have time to look over the questions and

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 305 1 prepare responses. 2 Some of the topics that are 3 included in the interview guide are, again, 4 the engineering analysis results, shipments, 5 numbers that were shown here today, cost 6 structure and financial parameters, conversion 7 costs, impacts of other regulations, direct 8 employment impacts, export issues, 9 consolidation of the industry, replacement 10 parts, refurbishments, impacts of standards 11 for the effective date, and other topics that 12 manufacturers feel are important to the 13 rulemaking. That has all been written up in 14 an interview guide. And it is mailed ahead of 15 time along with a nondisclosure agreement. 16 Phase three includes the 17 interviews themselves. Typically what happens 18 is that after the comment period closes for 19 the preliminary analysis stage, just so you 20 know, that is March 2nd, which is different 21 than the test procedures comment period. 22 We will be scheduling interviews

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 306 1 with manufacturers. And typically that is 2 done; the interview, that is, is done on site 3 at the manufacturer's production facilities. 4 It is typically a whole-day event so that we 5 can discuss all topics that are in the 6 interview guide that we will prepare.

7 FACILITATOR BROOKMAN: Rob? 8 MR. BOTELER: And that's why I was 9 asking the question. You need to plan, start 10 planning, now because in several of our cases, 11 those sites are going to be offshore. And 12 they may be in Asia. You may need visas and 13 things to get to those plants. And we need 14 some lead time to be ready for you there or 15 something.

16 FACILITATOR BROOKMAN: That's 17 fair. 18 MR. NARDOTTI: Thank you very

19 much. 20 FACILITATOR BROOKMAN: Typically 21 it's the case that they really start 22 scheduling these things soon, right?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 307 1 MR. NARDOTTI: Yes. I was going 2 to mention that we will be contacting you very 3 shortly. 4 After the interviews are 5 conducted, we prepare a summary report, which 6 we will provide to the manufacturers 7 interviewed along with NEMA, who can then 8 review the information and make sure 9 everything is correct and we have recorded the 10 information properly. 11 We then take the information from 12 the interviews and consolidate what we have 13 learned from each manufacturer and update the 14 government regulatory impact model to do a 15 final run. 16 Finally, we report that 17 information in the notice of proposed 18 rulemaking, the NOPR, and in the NOPR TSD. 19 FACILITATOR BROOKMAN: Okay. 20 MR. NARDOTTI: Sorry. Are there 21 any questions about the MIA? 22 (No response.)

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 308 1 MR. NARDOTTI: Thanks. Robert is 2 up to talk about the utility impact analysis. 3 MR. VAN BUSKIRK: For the notice 4 of proposed rulemaking, there are four more 5 analyses. For the utility impact analysis, 6 the purpose is to investigate the effects on 7 electric utilities in the utility sector for 8 reduced energy consumption and reduced peak 9 load demand due to the new energy conservation

10 standards. 11 The method that the Department 12 uses is it begins with results from the 13 national energy savings analysis, which gives 14 an annual time series of the energy savings. 15 And then the Department uses that 16 as an input into the national energy modeling 17 system, which is maintained by the Energy 18 Information Administration and produces the 19 annual energy outlook. 20 So the output that results from 21 the utility impact analysis includes changes 22 in electricity sales and potentially

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 309 1 electricity price, changes in the mix of 2 electricity generation, and changes in the new 3 capacity in the utility sector. 4 Any comments or questions about 5 the utility impact analysis? 6 (No response.) 7 FACILITATOR BROOKMAN: Okay. 8 MR. VAN BUSKIRK: The next is the 9 employment impact analysis. Now, the purpose 10 of the employment impact analysis is to report 11 net jobs created or eliminated nationally as a 12 consequence of new energy conservation

13 standards. 14 Now, the direct employment impacts 15 for the manufacturers are addressed in the 16 manufacturer impact analysis, which was 17 presented a little while ago. 18 The type of impacts that are 19 calculated from the employment impact analysis 20 is indirect employment impacts that result 21 from a shift in expenditures in the national 22 economy.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 310 1 So the Department will use an 2 employment impact model called the "Impact of 3 Sector Energy Technologies" model for the 4 evaluation of these indirect employment 5 impacts. 6 And the employment impacts will 7 result from changes in equipment and energy 8 expenditures that are input from the national 9 energy savings analysis. 10 The output is a change in the 11 commercial and energy sector employment as a 12 consequence of the new energy conservation 13 standards given as an annual time series. 14 FACILITATOR BROOKMAN: Yes, Roger? 15 MR. DAUGHERTY: Roger Daugherty. 16 What's the chance that this impact 17 of sector energy technologies model covers the 18 OEMs and producers of the equipment for the 19 applications that we have listed and talked 20 about previously?

21 MR. VAN BUSKIRK: The ImSET model 22 starts from the expenditures that are provided

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 311 1 by the national impact analysis. Included in 2 those expenditures are the increase in 3 equipment expenditures, which include all of 4 the costs, the incremental costs, for the

5 consumer. 6 I guess the question posed by your 7 comment is whether or not increased equipment 8 expenditures are properly distributed between 9 all of the players in the distribution chain. 10 So a portion of those equipment 11 costs is coming from the markups from the 12 OEMs. So if the equipment costs are properly 13 allocated to the different sectors, including 14 the OEMs, then the ImSET model will properly 15 account for the employment impacts because the 16 ImSET model divides the national economy into 17 dozens of economic sectors.

18 And the ImSET model takes as an 19 input how expenditures are shifted between 20 those dozens of economic sectors and then does 21 the accounting of the resulting employment 22 impacts for each of the sectors and adds them

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 312 1 up as a total. 2 FACILITATOR BROOKMAN: Do you want 3 to follow on? Roger? 4 MR. DAUGHERTY: Roger Daugherty. 5 Just briefly. I guess it's okay. 6 There are these energy sectors that it talks 7 about that I guess --

8 FACILITATOR BROOKMAN: Sectors of 9 the entire economy?

10 MR. VAN BUSKIRK: Sectors of the 11 entire -- 12 MR. DAUGHERTY: Of the entire 13 economy. And it's whether or not in creating 14 those sectors that are in the model, is there 15 a good likelihood that it will actually cover 16 and analyze correctly those who use our motors 17 and the impact that it may have on them that

18 we have talked about. 19 MR. VAN BUSKIRK: Well, the ImSET 20 tends to use average employment intensity

21 numbers for the sector. So to the extent that 22 any particular sector, like the OEM

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 313 1 manufacturers, may have an impact that is not 2 reflected in the average behavior of their 3 sector, the Department would appreciate 4 comments, information, and data on what those 5 employment impacts might look like. 6 FACILITATOR BROOKMAN: This 7 section is to measure employment impacts?

8 MR. VAN BUSKIRK: Correct.

9 FACILITATOR BROOKMAN: Yes. 10 MR. VAN BUSKIRK: Right. So 11 stakeholders may have comments. These 12 efficiency levels would have this type of 13 employment impact that may not be included in

14 the ImSET model. 15 So given information about types 16 of impacts that may not be captured in the 17 model, DOE then may be able to take that into 18 consideration. 19 FACILITATOR BROOKMAN: Charlie? 20 MR. STEPHENS: Charlie Stephens. 21 This sounds like a question that 22 ought to be on the manufacturer interview

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 314 1 sheet, being able to properly align their 2 markets and their knowledge of their markets 3 with whatever sectorization, if I can use that 4 word, there is in the ImSET model so that they 5 know which boxes their markets go into so that 6 there can be accurate representation there.

7 FACILITATOR BROOKMAN: That's a 8 good point, good point. I'm sure that we 9 captured that. Yes. Okay. Thank you, 10 Charlie. 11 Additional thoughts on this before

12 we move on? 13 (No response.) 14 FACILITATOR BROOKMAN: Okay. 15 MR. VAN BUSKIRK: Okay. The next 16 analysis is the environmental assessment. And 17 in the environmental assessment, the purpose 18 is to report environmental impacts as a 19 consequence of the new energy conservation 20 standards, including changes in power plant 21 emissions. 22 The method is to take the energy

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 315 1 savings results from the national energy 2 savings analysis and use the Energy 3 Information Administration's national energy 4 modeling system, which provides power plant 5 emissions to estimate the changes in 6 emissions, especially sulfur dioxide, oxides 7 of nitrogen, carbon dioxide, and mercury that 8 might result from the standard.

9 FACILITATOR BROOKMAN: Tom? 10 MR. HINK: Tom Hink. 11 I just had a question. There's 12 nothing in the environmental assessment that 13 would take into account the possible addition 14 of emissions to create new laminations, to 15 create the additional copper wire that may go 16 into these higher efficient motors? 17 MR. VAN BUSKIRK: Currently there 18 is no accounting of emissions from laminations 19 in the type of applications you mentioned. 20 The Department welcomes comments from all 21 interested parties on environmental impacts 22 that should be considered in the environmental

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 316 1 assessment.

2 FACILITATOR BROOKMAN: Those 3 outputs that you list at the bottom of the 4 slide, are those the only ones you typically

5 look for?

6 MR. VAN BUSKIRK: Yes. 7 FACILITATOR BROOKMAN: Tim? 8 MR. BALLO: Tim Ballo, 9 Earthjustice. 10 I just want to encourage you to 11 look at particulate matter in addition. Also, 12 I think the Department has given the reason 13 before when faced with the question just 14 raised by the manufacturers that it looks at 15 the impact on emissions of the energy use of 16 the product itself, that it has to draw the 17 line somewhere. And that seems reasonable to

18 me. 19 Just then one quick more general 20 comment, the utility impact analysis, 21 environment impact analysis, and environmental 22 analysis all tend to be calculated and then

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 317 1 disappear. 2 And we again encourage the 3 Department to incorporate these values with a 4 dollar figure into the national net present 5 value analysis of the rulemaking to arrive at 6 a true assessment of the impact of the 7 rulemaking monetarily nationwide. 8 FACILITATOR BROOKMAN: Thank you. 9 MR. VAN BUSKIRK: Thank you. 10 FACILITATOR BROOKMAN: So any 11 additional comments on environmental 12 assessment issues? 13 (No response.) 14 FACILITATOR BROOKMAN: Okay. 15 MR. VAN BUSKIRK: Okay. Let's

16 see. 17 Additionally in the environmental 18 assessment section, DOE invites comment on the 19 monetary value of greenhouse gas emissions 20 reduction and other emissions. DOE will use 21 monetary values to represent the potential 22 value of such emissions reduction.

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 318 1 DOE invites comments on methods 2 for estimating these values and comments on 3 which data and reports provide information 4 regarding widely accepted values that may be 5 useful to the analysis. 6 So the final NOPR analysis we 7 discuss is the regulatory impact analysis. 8 The purpose of the regulatory impact analysis 9 is to investigate the national impacts due to 10 non-regulatory alternatives. 11 The non-regulatory alternatives 12 that may be considered include no new 13 regulatory action, early replacement programs, 14 prescriptive standards, customer tax credits, 15 manufacturer tax credits, customer rebates, 16 voluntary efficiency targets, and bulk up 17 government procurement. 18 The method is to --

19 FACILITATOR BROOKMAN: Rob?

20 MR. BOTELER: Rob Boteler. 21 On the tax credits and these other 22 alternative methods, are they only in

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 319 1 reference to what we have talked about today 2 as covered product or would this be an 3 alternative product which offered greater 4 energy savings and we could introduce that as 5 something for a tax credit? 6 MR. VAN BUSKIRK: The purpose of 7 the regulatory impact analysis is to look at 8 non-regulatory alternatives to the regulation. 9 The method that is used in the 10 regulatory impact analysis is there is a 11 modification at the national impact analysis 12 spreadsheet that includes energy prices and 13 escalation factors and implicit market 14 discount rates and customer purchase price 15 effects and elasticities to model the impacts 16 of those non-regulatory alternatives. 17 The output from the regulatory 18 impact analysis spreadsheet is the national 19 energy savings and net present value of the 20 various non-regulatory alternatives. 21 And that's it. Any comments and 22 questions?

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 320 1 (No response.) 2 MR. VAN BUSKIRK: I will now hand 3 it over to Jim Raba for closing remarks. 4 FINAL QUESTIONS, COMMENTS, AND DISCUSSION

5 FACILITATOR BROOKMAN: Please do. 6 Yes? Please go right ahead, Molly. 7 MS. TROMBLEY-McCANN: Molly 8 Trombley-McCann. 9 This is a question that actually 10 relates back to the scope of the rulemaking. 11 We're wondering, particularly in California, 12 that because the scope of motors covered by 13 this particular rulemaking is so small, we're 14 wondering about the possibility of setting

15 future standards for other motors that aren't 16 currently covered by this rulemaking. 17 In particular, we're thinking of

18 small motors that aren't covered under the 19 current scope. And we had a question about 20 whether or not there would be a preemption

21 concern for those other small motors that 22 aren't covered under the current scope of the

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 321 1 rulemaking. 2 FACILITATOR BROOKMAN: Are you 3 asking what other motors might be covered 4 subsequently?

5 MS. TROMBLEY-McCANN: No. We're 6 actually asking if it's a small motor, even if 7 it's not covered by the rulemaking, it might 8 still be preempted because it is a small motor 9 and the title of the rulemaking is -- 10 FACILITATOR BROOKMAN: Got you. 11 Thank you. 12 Tim, do you want to follow on

13 there? 14 MR. BALLO: Yes. Tim, 15 Earthjustice. 16 It would be helpful for the 17 Department to clarify its position on that in 18 the NOPR and in the final rule. We will be 19 submitting comments that address. 20 We think the statutory language on 21 this point, although not very user-friendly, 22 is clear that preemption would not apply and

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 322 1 California and other states could do standards 2 for small motors not covered by the federal

3 standards. 4 FACILITATOR BROOKMAN: Is it Dan? 5 MR. TROMBLEY: Yes. Dan Trombley 6 with ACEEE. 7 In a way, I would like to echo 8 those comments just made. And I think 9 everyone in this room pretty much agrees that 10 the scope of this rulemaking is a very small 11 subset of the total energy use by small motors 12 in this country. 13 So we think that it could lead to 14 a misallocation of funds, even if the 15 preemption is not an issue and it's open to be 16 other small motors are open to be regulated.

17 It's sort of somewhat of a 18 distraction to focus all of these funds, both 19 on DOE's part with regulatory and rulemaking

20 enforcement and on the motor manufacturer's 21 part with complying with these regulations 22 that by focusing on this small percentage, it

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 323 1 leaves a very large percentage of energy use 2 unregulated, which is sort of I guess, as I 3 said, a misallocation of funds and resources. 4 FACILITATOR BROOKMAN: Okay. 5 Thank you. 6 Jim? 7 PRESIDING OFFICER RABA: Jim Raba,

8 DOE. 9 If you would like, please, to 10 amplify when you say a large unregulated 11 market perhaps? I don't want to put words in 12 your mouth, but for the record and the record 13 there, is there any data you could provide, 14 like the magnitude of what else is out there? 15 Is it feasible by our criteria as 16 well, technologically feasible, economically 17 justified? Would it save a significant amount 18 of energy considering all of the analyses that 19 would have to be examined in the meantime? 20 It's a valid comment, but, again, 21 we would need some data or some other criteria 22 to substantiate that. We may or may not have

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 324 1 to look at that. But I just want to kind of 2 put some more into that comment. 3 MR. TROMBLEY: Dan Trombley. 4 Yes. We will probably be 5 submitting some comments with what data we 6 have. And we recognize that in the scope of 7 what you are entitled to do or regulated to 8 do, that it still may be outside that scope, 9 but we just want to recognize that this is a 10 much larger issue. 11 And this is a concern that wasn't 12 working in this section for a number of years, 13 over a decade or two. And this has been a 14 longstanding concern with a lot of these 15 regulations. 16 And we don't want to miss anything 17 big. Thank you.

18 PRESIDING OFFICER RABA: Thank 19 you.

20 CLOSING REMARKS AND ADJOURNMENT

21 PRESIDING OFFICER RABA: It's been 22 a good couple of days. Thank you very much

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 325 1 for your patience, not only your work, your 2 input. 3 We appreciate, the Department does 4 appreciate, everything here. In my view I 5 think 126 slides of this one presentation has 6 been a record. Congratulations. 7 (Laughter.)

8 PRESIDING OFFICER RABA: You held 9 up very well. And we appreciate for our 10 facilitator, Doug Brookman; Brenda Edwards, 11 who has been behind the scenes preparing 12 everything for you, the handouts, the cards, 13 the setup for the room, things like that, the 14 unsung heroine of our work effort here. We'll 15 certainly look to your comments coming in. 16 We have a very tight schedule 17 throughout this as one of many rulemakings 18 we're doing. So the better the data, the 19 better the information. Most appreciated. We 20 are working a tight schedule as well. But, 21 again, to wish you all a safe journey home. 22 FACILITATOR BROOKMAN: Do you want

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 326 1 to cover that?

2 PRESIDING OFFICER RABA: I'm 3 sorry? 4 FACILITATOR BROOKMAN: Do you want 5 to cover that slide? 6 PRESIDING OFFICER RABA: Which

7 ones?

8 FACILITATOR BROOKMAN: The 9 consensus recommendations slide.

10 PRESIDING OFFICER RABA: Oh. What 11 Doug is pointing out to me here is slide 125. 12 You see it on the screen right there. We 13 have heard inputs from many views, all of 14 which are very interesting to the Department. 15 But the consensus recommendations, 16 if there's something you've heard today where 17 there can be consensus among a broad scale of 18 interested parties and broad support for any

19 of the standards work or the other --

20 FACILITATOR BROOKMAN: Test 21 procedures.

22 PRESIDING OFFICER RABA: -- test

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 327 1 procedures and the like you have heard today, 2 we would like very much to hear from you as a 3 consensus of recommendations of a particular 4 test procedure/procedures, such as. 5 And, again, I note that in the 6 second bullet, there are seven statutory 7 criteria that must be satisfied for them, of 8 which the baseline is technologically 9 feasible, economically justified, resulting in 10 a significant savings. 11 But there are other criteria also 12 enumerated, like utility and things like that, 13 health and safety as well, which are in the 14 statute. And it was covered today in part of 15 the discussions in your TSD, your executive 16 summary. 17 So, anyway, with any 18 recommendation, also we would ask that you 19 would provide very good, substantiating data, 20 and your rationale behind that data and how 21 you arrived at your conclusion for your 22 position, which will be very helpful for all

### (202) 234-4433 Neal R. Gross & Co., Inc. Page 328 1 concerned. 2 So any other things I should 3 cover? Any questions, please? 4 (No response.)

5 PRESIDING OFFICER RABA: We've 6 covered a lot. Thank you very much. And I 7 look forward to your comments. Thank you. 8 Give yourselves a round or applause.

9 FACILITATOR BROOKMAN: Safe

10 travels. 11 (Applause.) 12 (Whereupon, the foregoing matter 13 was concluded at 3:56 p.m.)

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323:20 validate 143:16 148:22 191:18 validated 151:21 152:9 183:10 validation 148:14 149:7 value 69:9 98:15 136:20 154:5 156:22 159:2,4 163:11 173:2 176:8,13 187:19 190:5,6,7 193:10 194:9,22 195:3,13 201:6 202:4,5 203:1 209:6,7,10 209:12 225:7 238:8,10 240:20 248:14 250:5 255:19 257:1 260:17 262:16,21 268:8,17 279:18 279:19 280:19 285:11 286:11 287:10 301:12,18 301:19 317:5,19 317:22 319:19 values 88:11,19 156:11 181:20 191:22 195:7 201:12 203:9,11 235:17 238:6 239:5 251:7 252:21,22 268:13 317:3,21 318:2,4 valuing 237:15 Van 1:19 3:11,13

3:14,17 23:6,6 122:12,12 186:4,4 190:17 191:16 192:5 195:20 197:7,17 198:5,9 199:8 207:21,21 210:2,18 211:2,7 214:18,22 218:16 219:12 221:4,7,11 221:15,19 223:15 223:22 225:12 226:5 227:5 229:13 231:1 232:5 233:5,22 234:17 235:7,14 236:1,6 237:7 238:11 239:7 241:16 243:10 245:8 248:7 250:2 256:3 257:8,10 258:7 259:2 260:10 261:5,13 262:1,11 263:1,7 263:10 264:22 265:20 266:2,13 267:7,14,18 270:14,22 273:17 277:19 280:12,16 281:16 282:11,13 283:10 284:4,8,13 284:18,21 285:2,5 285:22 286:7,16 287:14,18 297:21 297:22 308:3 309:8 310:21 312:10,19 313:8 313:10 314:15 315:17 316:6 317:9,15 319:6 320:2 variability 99:15 100:9 165:8 257:19 variable 98:19,20 101:18,19 160:11 160:16,21 270:10 270:18 variables 140:22 variable-speed 113:14 variation 258:14

259:12 variations 258:20 varied 227:14 varies 161:6 256:20 various 28:5,13

89:3 100:21 151:10 164:5 177:6 215:12,13 216:11,18 221:2 242:17 251:22 259:13 319:20 VARs 228:19 229:6 vary 68:1 84:14 175:18 220:4 225:13 226:9,11 231:14 232:17 239:20 240:9 256:10 258:19 263:4 varying 258:9 vast247:20 293:16 Veinott 152:7 ventilating 276:6 ventilation 157:15 verify 149:1 version48:5 50:1

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325:4 views 30:14 287:9

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