From: Robert Berman [mailto:bermaneconomics@gmail.com] 

Sent: Wednesday, November 16, 2011 10:13 AM 

To: Wes Patterson 

Cc: Robert Berman; AaronMeyers; adelaski@standardsASAP.org; ahofmann@publicpower.org; Antonio 

Trujillo; artrosenfeld@gmail.com; Brian Coffey; Hirsch, Bruce R; bsmith@federalpacific.com; 

cabolduc@lbl.gov; Caitlin Johnson; carlosgsiqueiros@eaton.com; carlos.gaytan@ge.com; 

chad.kennedy@us.schneider-electric.com; charlied@uus.org; chris.brown@cogentpowerinc.com; 

chuck.simmons@pgnmail.com; Daniel Cohen; dave.millure@metglas.com; dbrender@cda.copper.org; 

DYoung@energy-solution.com; eduardorobles@eaton.com; Emily (CONTR) Marchetti; 

Eric.Petersen@aksteel.com; frank.guilbault@cogentpowerinc.com; gbf1@pge.com; gjrosenquist@lbl.gov; 

greg.coulter405@gmail.com; Jack C Moore; James.Lass@cleco.com; Jeremiah (CONTR) Freeman; Jerry L 

Corkran; jerry.schoen@aksteel.com; jhodge@howard.com; Jim Creevy; Jim Raba; 

jmauer@standardsasap.org; John Cymbalsky; John Caskey; jrossetti@mlgw.org; kcoughlin@lbl.gov; 

kwinder@mleainc.com; maheshsampat@bellsouth.net; Matthew Nardotti; Maxine (EMAB) Savitz; 

mhyland@appanet.org; Michael Rivest; mwaltner@nrdc.org; ned.efbrush@gmail.com; 

Paul.Ryan@hitmet.com; Phil Hopkinson; pkumar@publicpower.org; Raymond.Polinski@ATImetals.com; 

rgreeson@federalpacific.com; Richard Parker; rick.anderson@faypwc.com; robert.saint@nreca.coop; 

rroy@nrdc.org; ScottB@LVMetals.com; Steve Nadel; srosenstock@eei.org; tballo@earthjustice.org; 

Teckman@nwcouncil.org; ted.johnstone@cogentpowerinc.com; thomas.patzner@us.schneiderelectric.com; tpetrosino@carolina.rr.com; vijay.tendulkar@onyxpower.com; Zhimei Luo 

Subject: Re: Negotiated Rulemaking - Distribution Transformers Teleconference 

Hi Wes, 

Are you saying that the base price of a 50 kVA, for example, is twice the $2150 that DOE shows 

(I;m seeing $1250 on open bid) or are you saying that the factor of 2 kicks in further up the line, 

due to the "bow"? If the latter, where are you seeing it? 

I'm certain that the open bid public power data are not representative of the market. They were 

all TOC, all public power, all very small quantities, appeared to have A factors of around $8+, 

and the prices were higher than what utilities that I spot-checked them against said that they were 

paying. I'm interpreting it as, at best, an upper bound on market prices, and some indication of 

what PPUs may find manageable in terms of efficiencies (e.g., an efficiency resulting from TOC 

design to an $8 A factor does not appear to be unreasonable). 

Thank you for the most recent data dump and very useful reflections. I plan to get back to you 

when I've had a chance to really go through it. I feel a bit like a kid in a candy store with 

everything you've provided. As a long-time modeler, I know that under the best of circumstances 

a model is an abstraction of reality, so it's important to tie to reality whenever we can. 

Transformers are sold in a market, not in a computer. This is especially true of forecasts. 

President Kennedy's Chief Economist, Walter Heller, is reputed to have advised on forecasting 

"give the date OR the event, not both". 

  

Regards,

Robert A. Berman, Principal
Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703‐281‐0490

703‐655‐8398 (cell)

BermanEconomics@gmail.com

On Nov 16, 2011, at 8:56 AM, Wes Patterson wrote: 

Hi Robert 

I find these discussions most informative and thank you for your insights. 

But I disagree with your last comments regarding the DOE cost curves 

My data indicates that the DOE cost curves are greatly understated - perhaps as much as a factor of 2. 

 Also note that these are power relations and not linear. 

Perhaps the open-bid public power data represents a distorted sample of the total market. 

Please reference my concerns expressed at the bottom of my last email. 

I would like to understand what impact a much steeper cost curve will have on the LCC and PBP results. 

You thoughts would be most appreciated. 

Best regards Wes 

Robert Berman <bermaneconomics@gmail.com>

11/16/2011 08:28 AM 

To "Hirsch, Bruce R" <Bruce.R.Hirsch@bge.com> cc 'Robert Berman' <bermaneconomics@gmail.com>, Phil Hopkinson 

<phopkinson@hvolt.com>, Steve Nadel <snadel@aceee.org>, John 

Caskey <Joh_Caskey@Nema.org>, "Eric.Petersen@aksteel.com" 

<Eric.Petersen@aksteel.com>, "jerry.schoen@aksteel.com" 

<jerry.schoen@aksteel.com>, "Maxine (EMAB) Savitz" 

<maxinesavitz@aol.com>, "mhyland@appanet.org" 

<mhyland@appanet.org>, "Raymond.Polinski@ATImetals.com" 

<Raymond.Polinski@atimetals.com>, "maheshsampat@bellsouth.net" 

<maheshsampat@bellsouth.net>, "tpetrosino@carolina.rr.com" 

<tpetrosino@carolina.rr.com>, "dbrender@cda.copper.org" 

<dbrender@cda.copper.org>, "James.Lass@cleco.com" 

<James.Lass@cleco.com>, "chris.brown@cogentpowerinc.com" 

<chris.brown@cogentpowerinc.com>, 

"frank.guilbault@cogentpowerinc.com" 

<frank.guilbault@cogentpowerinc.com>, 
"ted.johnstone@cogentpowerinc.com" 

<ted.johnstone@cogentpowerinc.com>, AaronMeyers 

<Aaron.Meyers@CooperIndustries.com>, Antonio Trujillo 

<Antonio.Trujillo@CooperIndustries.com>, Jack C Moore 

<Jack.Moore@CooperIndustries.com>, Jerry L Corkran 

<Jerry.Corkran@CooperIndustries.com>, "tballo@earthjustice.org" 

<tballo@earthjustice.org>, "carlosgsiqueiros@eaton.com" 

<carlosgsiqueiros@eaton.com>, "eduardorobles@eaton.com" 

<eduardorobles@eaton.com>, "Emily (CONTR) Marchetti" 

<Emily.Marchetti@ee.doe.gov>, "Jeremiah (CONTR) Freeman" 

<Jeremiah.Freeman@ee.doe.gov>, Jim Raba <Jim.Raba@ee.doe.gov>, 

John Cymbalsky <John.Cymbalsky@ee.doe.gov>, 

"srosenstock@eei.org" <srosenstock@eei.org>, "DYoung@energysolution.com" <DYoung@energy-solution.com>, 

"rick.anderson@faypwc.com" <rick.anderson@faypwc.com>, 

"bsmith@federalpacific.com" <bsmith@federalpacific.com>, 

"rgreeson@federalpacific.com" <rgreeson@federalpacific.com>, 

"carlos.gaytan@ge.com" <carlos.gaytan@ge.com>, 

"artrosenfeld@gmail.com" <artrosenfeld@gmail.com>, 

"greg.coulter405@gmail.com" <greg.coulter405@gmail.com>, 

"ned.efbrush@gmail.com" <ned.efbrush@gmail.com>, Richard Parker 

<richardparkerdc@gmail.com>, "Paul.Ryan@hitmet.com" 

<Paul.Ryan@hitmet.com>, "jhodge@howard.com" 

<jhodge@howard.com>, Daniel Cohen <Daniel.Cohen@hq.doe.gov>, 

"cabolduc@lbl.gov" <cabolduc@lbl.gov>, "gjrosenquist@lbl.gov" 

<gjrosenquist@lbl.gov>, "kcoughlin@lbl.gov" <kcoughlin@lbl.gov>, 

"ScottB@LVMetals.com" <ScottB@lvmetals.com>, 

"dave.millure@metglas.com" <dave.millure@metglas.com>, 

"kwinder@mleainc.com" <kwinder@mleainc.com>, "jrossetti@mlgw.org" 

<jrossetti@mlgw.org>, "brian.coffey@navigant.com" 

<brian.coffey@navigant.com>, "caitlin.johnson@navigant.com" 

<caitlin.johnson@navigant.com>, "matthew.nardotti@navigant.com" 

<matthew.nardotti@navigant.com>, "mrivest@navigant.com" 

<mrivest@navigant.com>, "zhimei.luo@navigant.com" 

<zhimei.luo@navigant.com>, Jim Creevy <Jim.Creevy@Nema.org>, 

"mwaltner@nrdc.org" <mwaltner@nrdc.org>, "rroy@nrdc.org" 

<rroy@nrdc.org>, "robert.saint@nreca.coop" <robert.saint@nreca.coop>, 

"Teckman@nwcouncil.org" <Teckman@nwcouncil.org>, 

"vijay.tendulkar@onyxpower.com" <vijay.tendulkar@onyxpower.com>, 

"gbf1@pge.com" <gbf1@pge.com>, "chuck.simmons@pgnmail.com" 

<chuck.simmons@pgnmail.com>, "ahofmann@publicpower.org" 

<ahofmann@publicpower.org>, "pkumar@publicpower.org" 

<pkumar@publicpower.org>, "adelaski@standardsASAP.org" 

<adelaski@standardsasap.org>, "jmauer@standardsasap.org" 

<jmauer@standardsasap.org>, Wes 

Patterson/SouthBoston/USTRA/ABB@ABB, 

"chad.kennedy@us.schneider-electric.com" 

<chad.kennedy@us.schneider-electric.com>, 

"thomas.patzner@us.schneider-electric.com" 

<thomas.patzner@us.schneider-electric.com>, "charlied@uus.org" 

<charlied@uus.org>

Subject Re: Negotiated Rulemaking - Distribution Transformers Teleconference

Bruce, 

I understand; but at any given point in time, a Watt saved is a Watt saved. It does nat matter 

where in the transformer it is saved or if it is saved by a consumer turning off a light. It is one 

less Watt. Regardless of where the Watt is saved from it has the same value. That value is the 

cost of the last Watt produced (not the first, middle or average). If you save enough Watts to take 

down a generating unit, you save the money that would have been spent on that unit. The unit 

you take down is the highest cost unit (unless it's a must run). That's the last unit you dispatched. 

 If you don't save that Watt, you charge your customer for it or, if a loss, you charge it off to 
losses for ratemaking purposes. If BGE is willing to bill its TOD customers taking power at peak 

at the cost of generating from a baseload unit because it's for power that they take 24x7 I'll 

concede your point. If BGE, in it's next rate case, values it's losses at peak differently depending 

upon whether they are coil or core losses, I'll concede your point. But has long as you charge 

TOD customers and peak load losses based on marginal costs, your argument is not consistent. 

I agree 100% with you position on correcting the DOE cost curves. They need to be lowered and 

flattened.They are predicting costs that are higher than small quantity open-bid public power 

sales reported on the internet. 

Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703‐281‐0490

703‐655‐8398 (cell)

BermanEconomics@gmail.com

On Nov 16, 2011, at 7:58 AM, Hirsch, Bruce R wrote: 

Robert, 

 

This happens all the time in “time of day” rates. The fact is that it is cheaper to produce electricity at a core

generating station than at the peaking plants. It also is cost effective to keep core stations running. With that said, I

think the issue is that you and Phil are looking at this from a different point of view. Phil is looking at the cost to

generate and he is correct. You are looking at the value of avoiding generation altogether and you are also correct. 

 

It is important to understand that our (or DOE’s) decision cannot be made on any one factor. All of the issues put

on the table are important issues that must be factored into the final decision. My main concern at this time is that

the Advocate’s case is based on the DOE calculated pay back periods that utilize a projected cost that is much less

than that seen by the only manufacturer who has experience building higher efficiency units with M3 steel. Robert,

you have pushed us to consider historical experience over models. Thus, I believe we need to step back and look at

what the ABB data is really telling us and correct the DOE calculations as appropriate. 

 

                                                                                                                                Bruce 

 

From: Robert Berman [mailto:bermaneconomics@gmail.com] 

Sent: Tuesday, November 15, 2011 7:57 PM

To: Phil Hopkinson

Cc: Robert Berman; Steve Nadel; Hirsch, Bruce R; John Caskey; Eric.Petersen@aksteel.com; 

jerry.schoen@aksteel.com; Maxine (EMAB) Savitz; mhyland@appanet.org; 

Raymond.Polinski@ATImetals.com;maheshsampat@bellsouth.net; tpetrosino@carolina.rr.com; 

dbrender@cda.copper.org; James.Lass@cleco.com; chris.brown@cogentpowerinc.com; 

frank.guilbault@cogentpowerinc.com;ted.johnstone@cogentpowerinc.com; AaronMeyers; Antonio 
Trujillo; Jack C Moore; Jerry L Corkran; tballo@earthjustice.org; carlosgsiqueiros@eaton.com; 

eduardorobles@eaton.com; Emily (CONTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John 

Cymbalsky; srosenstock@eei.org; DYoung@energy-solution.com; rick.anderson@faypwc.com; 

bsmith@federalpacific.com; rgreeson@federalpacific.com; 

carlos.gaytan@ge.com;artrosenfeld@gmail.com; greg.coulter405@gmail.com; ned.efbrush@gmail.com; 

Richard Parker; Paul.Ryan@hitmet.com; jhodge@howard.com; Daniel Cohen; cabolduc@lbl.gov; 

gjrosenquist@lbl.gov; kcoughlin@lbl.gov;ScottB@LVMetals.com; dave.millure@metglas.com; 

kwinder@mleainc.com; jrossetti@mlgw.org; brian.coffey@navigant.com; caitlin.johnson@navigant.com; 

matthew.nardotti@navigant.com; mrivest@navigant.com;zhimei.luo@navigant.com; Jim Creevy; 

mwaltner@nrdc.org; rroy@nrdc.org; robert.saint@nreca.coop; Teckman@nwcouncil.org; 

vijay.tendulkar@onyxpower.com; gbf1@pge.com; 

chuck.simmons@pgnmail.com;ahofmann@publicpower.org; pkumar@publicpower.org; 

adelaski@standardsASAP.org; jmauer@standardsasap.org; wes.patterson@us.abb.com; 

chad.kennedy@us.schneider-electric.com; thomas.patzner@us.schneider-electric.com; charlied@uus.org

Subject: Re: Negotiated Rulemaking - Distribution Transformers Teleconference 

 

Sorry that you disagree. A loss is a loss no matter where it comes from. It's the VALUE that 

changes. The core loss still exists at peak. Why in the world would you put a lower value on the 

core loss at peak just because it ALSO exists at off-peak times as well? 

Regards, 

 

Robert A. Berman, Principal 

Berman Economics 

1915 Grand Court 

Vienna, VA 22182 

703.281.0490 

703.655.8398 (cell) 

Berman.Economics@gmail.com 

www.BermanEconomics.com 

 

Sent from my iPhone 

On Nov 15, 2011, at 5:30 PM, Phil Hopkinson <phopkinson@hvolt.com> wrote: 

Good afternoon Robert and all: 

 

I must disagree fundamentally with the way you have characterized the loss values.  At night when the load is light

everywhere then the energy cost is also low and those who have time of day metering can attest to it.  If the load

is as low as 10% then what is left is largely core loss and the generation is only base generation at very low cost per

kWH. 

 

During the day when the load is high the peak generators are all fired up and that is expensive energy.  There the

winding losses are the big contribution to total transformer losses.  Unfortunately when one has an amorphous

transformer that meets the same efficiency as an M3 transformer it has higher winding losses than the M3.  In the

modeling that Jerry Corkran and I did we found that the amorphous transformer had higher day time losses than

the M3 which looks like it takes away from the enthusiasm for amorphous cores as a National standard. 

 

The bottom line is that core loss is not as valuable as winding loss on a watt for watt tradeoff. 

 
Best regards, 

 

Phil 

 

Philip J Hopkinson, PE 

President & CEO HVOLT Inc. 

3704 High Ridge Rd. 

Charlotte, NC 28270

phopkinson@hvolt.com

Ph 704-846-3290 

Fx 704-845-2520 

Cell 704-236-3320

www.hvolt.com 

From: Robert Berman [mailto:bermaneconomics@gmail.com] 

Sent: Tuesday, November 15, 2011 1:23 PM

To: Steve Nadel

Cc: Bruce R Hirsch; Robert Berman; John Caskey; Eric.Petersen@aksteel.com; 

jerry.schoen@aksteel.com; Maxine (EMAB) Savitz; mhyland@appanet.org; 

Raymond.Polinski@ATImetals.com;maheshsampat@bellsouth.net; tpetrosino@carolina.rr.com; 

dbrender@cda.copper.org; James.Lass@cleco.com; chris.brown@cogentpowerinc.com; 

frank.guilbault@cogentpowerinc.com;ted.johnstone@cogentpowerinc.com; Aaron Meyers; Antonio 

Trujillo; Jack C Moore; Jerry L Corkran; tballo@earthjustice.org; carlosgsiqueiros@eaton.com; 

eduardorobles@eaton.com; Emily (CONTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John 

Cymbalsky; srosenstock@eei.org; DYoung@energy-solution.com; rick.anderson@faypwc.com; 

bsmith@federalpacific.com;rgreeson@federalpacific.com; carlos.gaytan@ge.com; 

artrosenfeld@gmail.com; greg.coulter405@gmail.com; ned.efbrush@gmail.com; Richard Parker; 

Paul.Ryan@hitmet.com; jhodge@howard.com; Daniel Cohen; Phil Hopkinson; cabolduc@lbl.gov; 

gjrosenquist@lbl.gov; kcoughlin@lbl.gov; ScottB@LVMetals.com; dave.millure@metglas.com; 

kwinder@mleainc.com; jrossetti@mlgw.org;brian.coffey@navigant.com; caitlin.johnson@navigant.com; 

matthew.nardotti@navigant.com; mrivest@navigant.com; zhimei.luo@navigant.com; Jim Creevy; 

mwaltner@nrdc.org; rroy@nrdc.org;robert.saint@nreca.coop; Teckman@nwcouncil.org; 

vijay.tendulkar@onyxpower.com; gbf1@pge.com; chuck.simmons@pgnmail.com; 

ahofmann@publicpower.org; pkumar@publicpower.org;adelaski@standardsASAP.org; 

jmauer@standardsasap.org; wes.patterson@us.abb.com; chad.kennedy@us.schneider-electric.com; 

thomas.patzner@us.schneider-electric.com; charlied@uus.org

Subject: Re: Negotiated Rulemaking - Distribution Transformers Teleconference 

 

Steve, 

 

The statement that "reducing transformer losses primarily affects baseload, not peak" is a bit of 

an over simplification. Reducing transformer losses affects both base and peak. The value of the 

loss at any point in time is then marginal cost or system lambda. That is, the value of reducing 

transformer losses is the greater of the cost of the next unit that would have been dispatched, but 

for the reduced load attributable to the transformer, or the cost of generation from the last unit 

actually dispatched, but used less due to the more efficient transformer. Because generation is 

brought on line least-cost first, losses are evaluated in reverse order -- highest cost first. As Katie 

Coughlin explained at the last meeting, this is the way LBNL evaluates benefits. Thus in the 

early years, the more efficient transformer may actually save substantially more money than in 

later years, when the older, higher cost units have been retired. I don't believe this benefit is 

picked up by the LBNL modeling, as it requires more detailed information -- at least hourly 
marginal costs for each power pool. 

Regards, 

Bob

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703‐281‐0490

703‐655‐8398 (cell)

BermanEconomics@gmail.com

 

On Nov 15, 2011, at 8:57 AM, Steve Nadel wrote: 

Two comments. First, some comments have focused on just the market for M3 and amorphous steel. 

 The two markets are linked -- we need competition between the two to keep the price of both in check. 

 We don't want a standard that strongly favors one over the other. The revised DOE analysis on the mix 

between M3 and amorphous at different standard levels should help us to address this. Second, 

reducing transformer losses primarily affects baseload, not peak. So talking about cost per kW is 

misleading. An efficient transformer is energized for more than 8000 hours per year. The average DSM 

measure saves for about 3000 hours per year (although there is wide variation). If you want to compare, 

you'd need to compare levelized cost per kWh saved over the measure lifetime. 

Steve 

>>> "Hirsch, Bruce R" <Bruce.R.Hirsch@bge.com> 11/15/2011 7:37 AM >>> John’s points are well taken. Keep in mind that the DOE numbers indicate a payback at EL4 only if amorphous steel

is used. Thus, to assume that because it can be built using M3 steel, all is well, is totally untrue.  In John’s auto

analogy, at least the customer has a choice of spending the extra money. In our case, the customer will have no

choice. 

 

We all also need to understand that there is not an infinite supply of money to spend on efficiency improvements.

By forcing utilities to spend money on improving transformer efficiencies, we may very well be taking money out of

other efficiency programs which have a much higher payback than what is being proposed here.  In BGE’s case our

package of efficiency programs cost us approximately $139 per kilowatt saved. What is being proposed here is up
to 100 times more costly. If BGE pulls back funds from other efficiency programs to pay the high costs for

transformer efficiencies, we would see a significant decline in efficiency improvements overall. 

                                                                                                                                                                                Bruce 

 

                                                                                                                                                                

 

From: Caskey, John [mailto:Joh_Caskey@nema.org] 

Sent: Monday, November 14, 2011 3:14 PM

To: Robert Berman; Hirsch, Bruce R

Cc: 'Steve Nadel'; Phil Hopkinson; Eric.Petersen@aksteel.com; jerry.schoen@aksteel.com; Maxine 

(EMAB) Savitz; mhyland@appanet.org; Raymond.Polinski@ATImetals.com; 

maheshsampat@bellsouth.net;tpetrosino@carolina.rr.com; dbrender@cda.copper.org; 

James.Lass@cleco.com; chris.brown@cogentpowerinc.com; frank.guilbault@cogentpowerinc.com; 

ted.johnstone@cogentpowerinc.com; Aaron Meyers; Antonio Trujillo; Jack C Moore; Jerry L Corkran; 

tballo@earthjustice.org; carlosgsiqueiros@eaton.com; eduardorobles@eaton.com; Emily (CONTR) 

Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John Cymbalsky;srosenstock@eei.org; 

DYoung@energy-solution.com; rick.anderson@faypwc.com; bsmith@federalpacific.com; 

rgreeson@federalpacific.com; carlos.gaytan@ge.com; artrosenfeld@gmail.com; 

greg.coulter405@gmail.com;ned.efbrush@gmail.com; Richard Parker; Paul.Ryan@hitmet.com; 

jhodge@howard.com; Daniel Cohen; cabolduc@lbl.gov; gjrosenquist@lbl.gov; kcoughlin@lbl.gov; 

ScottB@LVMetals.com; dave.millure@metglas.com;kwinder@mleainc.com; jrossetti@mlgw.org; 

brian.coffey@navigant.com; caitlin.johnson@navigant.com; matthew.nardotti@navigant.com; 

mrivest@navigant.com; zhimei.luo@navigant.com; Creevy, Jim;mwaltner@nrdc.org; rroy@nrdc.org; 

robert.saint@nreca.coop; Teckman@nwcouncil.org; vijay.tendulkar@onyxpower.com; gbf1@pge.com; 

chuck.simmons@pgnmail.com; ahofmann@publicpower.org;pkumar@publicpower.org; 

adelaski@standardsASAP.org; jmauer@standardsasap.org; wes.patterson@us.abb.com; 

chad.kennedy@us.schneider-electric.com; thomas.patzner@us.schneider-electric.com; charlied@uus.org

Subject: RE: Negotiated Rulemaking - Distribution Transformers Teleconference 

 

Robert 

 

You continue to reference the ABB data presented by Wes Patterson as indicating that since a transformer was

sold at the EL3 or EL4 efficiency level that this level is cost effective. Specifically, you state “Market sales data,

however, is quite real. In this case it unambiguously says that the transformers at EL4 are an economically

reasonable choice ‐‐ the market has, in fact, selected that choice on multiple occasions”. This is simply NOT TRUE. 

 

Just because a person buys as Jaguar for $100k that gets 25 mpg in place of a $40k Cadillac that gets 20 mpg; does

NOT mean that the $60k delta will ever be “economically reasonable” for the extra 5 mpg. You seem to be

assuming that all of the transformers purchased from ABB that meet the efficiency levels were purchased for

efficiency reasons. This is simply not fact. The fact is that one large transformer manufacturer was able to produce

distribution transformers at EL3 and EL4 using M3 steel. To my knowledge, Wes did not state the price for these

transformers. In addition, just because one company can produce this product doesn’t mean that all transformer

manufacturers can make this product at this level using M3 steel. 

 

My hope is that we can all understand the facts and the analysis results better over the next few weeks so that we

can negotiate a solution that benefits the consumers, the ratepayers, the manufacturers, the environment, etc. I

plan to stay at the table till the end of the negotiation process.   

 

Regards, 

 

John 

 

John F. Caskey, CEM 
Assistant Vice President, Industry Operations National Electrical Manufacturers Assoc. (NEMA) 1300 North 17th Street - Suite 1752 

Rosslyn, VA 22209 john.caskey@nema.org 703-841-3233 Voice 703-841-3333 FAX 703-350-6886 Cell 

From: Robert Berman [mailto:bermaneconomics@gmail.com] 

Sent: Monday, November 14, 2011 1:19 PM

To: Hirsch, Bruce R

Cc: 'Steve Nadel'; Robert Berman; Phil Hopkinson; Eric.Petersen@aksteel.com; 

jerry.schoen@aksteel.com; Maxine (EMAB) Savitz; mhyland@appanet.org; 

Raymond.Polinski@ATImetals.com;maheshsampat@bellsouth.net; tpetrosino@carolina.rr.com; 

dbrender@cda.copper.org; James.Lass@cleco.com; chris.brown@cogentpowerinc.com; 

frank.guilbault@cogentpowerinc.com;ted.johnstone@cogentpowerinc.com; Aaron Meyers; Antonio 

Trujillo; Jack C Moore; Jerry L Corkran; tballo@earthjustice.org; carlosgsiqueiros@eaton.com; 

eduardorobles@eaton.com; Emily (CONTR) Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John 

Cymbalsky; srosenstock@eei.org; DYoung@energy-solution.com; rick.anderson@faypwc.com; 

bsmith@federalpacific.com; rgreeson@federalpacific.com; 

carlos.gaytan@ge.com;artrosenfeld@gmail.com; greg.coulter405@gmail.com; ned.efbrush@gmail.com; 

Richard Parker; Paul.Ryan@hitmet.com; jhodge@howard.com; Daniel Cohen; cabolduc@lbl.gov; 

gjrosenquist@lbl.gov; kcoughlin@lbl.gov;ScottB@LVMetals.com; dave.millure@metglas.com; 

kwinder@mleainc.com; jrossetti@mlgw.org; brian.coffey@navigant.com; caitlin.johnson@navigant.com; 

matthew.nardotti@navigant.com; mrivest@navigant.com;zhimei.luo@navigant.com; Creevy, Jim; Caskey, 

John; mwaltner@nrdc.org; rroy@nrdc.org; robert.saint@nreca.coop; Teckman@nwcouncil.org; 

vijay.tendulkar@onyxpower.com; gbf1@pge.com;chuck.simmons@pgnmail.com; 

ahofmann@publicpower.org; pkumar@publicpower.org; adelaski@standardsASAP.org; 

jmauer@standardsasap.org; wes.patterson@us.abb.com; chad.kennedy@us.schneiderelectric.com;thomas.patzner@us.schneider-electric.com; charlied@uus.org

Subject: Re: Negotiated Rulemaking - Distribution Transformers Teleconference 

 

Bruce, 

 

Those upfront transformer costs are compared to the fuel cost savings in the LCC approach. The 

discounting process values fuel cost saving in the future at less than the costs incurred today. The 

positive LCC means that that the efficiency advocates are not ignoring costs, but comparing 

them with benefits and finding that the consumer is better off and will be paying less. One does 

not, however, need to rely on the LBL analysis to see this. The ABB sales data shows M3 

transformers being delivered at EL4 efficiency. As a modeler, I am always skeptical of model 

results -- people do not live in computers and certainly not on in some of the back-of-theenvelope calculations that we have seen from others. Market sales data, however, is quite real. In 

this case it unambiguously says that the transformers at EL4 are an economically reasonable 

choice -- the market has, in fact, selected that choice on multiple occasions. 

 

To the extent that there are dug-in positions, again the evidence does not support that it is the 

efficiency advocates that are dug-in. Although EL4 is achievable and beneficial based both on 

market data and LBL analyses, the proponents of greater efficiency indicated a willingness to 

 compromise. It is certain representatives of the industry who have consistently said either no 

change, or a fractional change. It is those industry representatives who appear to be advancing 

the "my position or nothing" attitude. Although I happen to agree that substantial movement 
towards more efficient distribution systems, I also note that these are incredibly expensive 

meetings. We have a large number of very senior people devoting substantial time to the 

meetings, their preparation and non-trivial travel costs. These people have other things 

competing for their time. If you and others honestly believe that you cannot agree to a higher 

standard, and place no value on regulatory certainty, then let's not waste additional time and 

money. Let's just say that we gave it a good shot, cut our losses here, and make our respective 

cases to DOE outside the negotiation process and let DOE make it's own decision. I believe that 

they certainly have sufficient information to support their position in a February NOPR. I can't 

imagine what else they would need. 

Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703‐281‐0490

703‐655‐8398 (cell)

BermanEconomics@gmail.com

 

On Nov 14, 2011, at 11:49 AM, Hirsch, Bruce R wrote: 

 

Steve, 

 

I am disappointed with your approach to this assignment. 

 

It appears that negotiation to you is defined as agreeing with your position ‐‐‐ or calling it off. It is unfortunate that

you believe the American public, especially in these trying economic times, should be expected to foot the (very

large) bill for more efficient transformers when it is still not certain that there is value in doing so. You have clung

to one suspect calculation that indicates there may be a payback ‐‐‐ in the distant future ‐‐‐ and only if all the

assumptions being made pan out. You choose to ignore the costs, not yet factored in, on US jobs, US businesses

and the reliability of supply of an item so desperately needed for our economy to expand. 

 

This is not a “cut and dried” economic decision but is one that needs to be taken seriously for the major impact it

could have on the electric supply of the US and the financial position of the American public. If DOE makes the final

decision on this, I would expect them to do “due diligence” in considering all the effects there decision would have

on US businesses and the US economy.   

 

Let it be known that the Utility Industry has not pulled out of the negotiation process and will continue to work

with DOE to reach the right decision. 

 
Bruce.   

 

From: Steve Nadel [mailto:snadel@aceee.org]

Sent: Friday, November 11, 2011 2:16 PM

To: Robert Berman; Phil Hopkinson

Cc: Eric.Petersen@aksteel.com; jerry.schoen@aksteel.com; Maxine (EMAB) Savitz; 

mhyland@appanet.org; Raymond.Polinski@ATImetals.com; maheshsampat@bellsouth.net; Hirsch, Bruce 

R; tpetrosino@carolina.rr.com;dbrender@cda.copper.org; James.Lass@cleco.com; 

chris.brown@cogentpowerinc.com; frank.guilbault@cogentpowerinc.com; 

ted.johnstone@cogentpowerinc.com; Aaron Meyers; Antonio Trujillo; Jack C Moore; Jerry L Corkran; 

tballo@earthjustice.org; carlosgsiqueiros@eaton.com; eduardorobles@eaton.com; Emily (CONTR) 

Marchetti; Jeremiah (CONTR) Freeman; Jim Raba; John Cymbalsky; srosenstock@eei.org; 

DYoung@energy-solution.com; rick.anderson@faypwc.com; bsmith@federalpacific.com; 

rgreeson@federalpacific.com; carlos.gaytan@ge.com; artrosenfeld@gmail.com; 

greg.coulter405@gmail.com; ned.efbrush@gmail.com; Richard Parker; Paul.Ryan@hitmet.com; 

jhodge@howard.com; Daniel Cohen; cabolduc@lbl.gov; gjrosenquist@lbl.gov; kcoughlin@lbl.gov; 

ScottB@LVMetals.com; dave.millure@metglas.com; kwinder@mleainc.com;jrossetti@mlgw.org; 

brian.coffey@navigant.com; caitlin.johnson@navigant.com; matthew.nardotti@navigant.com; 

mrivest@navigant.com; zhimei.luo@navigant.com; Jim.creevy@nema.org; 

john.caskey@nema.org;mwaltner@nrdc.org; rroy@nrdc.org; robert.saint@nreca.coop; 

Teckman@nwcouncil.org; vijay.tendulkar@onyxpower.com; gbf1@pge.com; 

chuck.simmons@pgnmail.com; ahofmann@publicpower.org;pkumar@publicpower.org; 

adelaski@standardsASAP.org; jmauer@standardsasap.org; wes.patterson@us.abb.com; 

chad.kennedy@us.schneider-electric.com; thomas.patzner@us.schneider-electric.com; charlied@uus.org

Subject: RE: Negotiated Rulemaking - Distribution Transformers Teleconference 

 

Phil, 

We're in the middle of negotiations and some of us have made clear that no or little change to the 

standard is not acceptable as the DOE analysis justifies higher standards (higher levels are technically 

feasible and cost-effective on a life-cycle cost basis). The efficiency groups would rather leave the 

decision to DOE than agree to subpar standards. If you and other participants want to veto any 

significant change in the standard, then we might as well save some time, break off negotiations and just 

make our respective arguments to DOE. Is that what you want to do? If the answer is no, then let's start 

talking about how to make higher standards acceptable rather than continue to make arguments about 

why low standards are needed. We're all busy and if we're going to make progress we need to break new 

ground and not rehash old ground. 

Steve 

>>> Phil Hopkinson <phopkinson@hvolt.com> 11/11/2011 1:16 PM >>> Hello Robert and all: 

 

You must not have looked at Jerry Corkran’s message because he found the cost to be $17/watt, which is pretty

close to my number, where both Jerry and I have used M3 core steel to derive the cost curve.  The fact is that the

cost curve is very steep with M3 and quickly hits the brick wall. 

 

1. I have checked Carlos Gaytan’s cost curves as well and he is finding about the same relationship with M3. 

2. I have checked Wes Patterson’s data as well and he is finding an M3 cost curve about the same as mine. 

3. I have checked the OPS data with M3 as well and it too is very close to $20/watt. 

a. For example, for design line 1 they show an efficiency at 50% load of 99.08% which translates to 232 watts of

loss and sells for $1,960.73. 

b. They show another M3 design with an efficiency of 99.26% which translates to 186 watts of loss and sells for

$2962.11. 
c. The change in selling price is $2,962.11‐$1,906.11 or +$1,001.38 

d. The change in watts is 232‐186 or ‐46 watts. 

e. The OPS $/watt is therefore, $1,001.38/46 watts or $21.77 

f. Hence we see that all data sources are pointing to cost per watt of ~$20 /watt saved to go from the current

mandatory standard to EL1.  I get $30/watt to go to EL2 and $53/watt to go to EL3 

4. The fact is that M3 is about out of gas and the DOE did a good job in the last rule making. 

5. The fact also is that a push to anything beyond present does not show economic value and I do not support it. 

6. The fact also is that a push to higher efficiencies will kill the new transformer market and open up the rebuild

market, destroying jobs at the new transformer manufacturers and resulting in transformers of lower efficiency

which will cost energy and not save it. 

 

Best regards, 

 

Phil 

 

Philip J Hopkinson, PE 

President & CEO HVOLT Inc. 

3704 High Ridge Rd. 

Charlotte, NC 28270

phopkinson@hvolt.com

Ph 704-846-3290 

Fx 704-845-2520 

Cell 704-236-3320

www.hvolt.com 

From: Robert Berman [mailto:bermaneconomics@gmail.com]

Sent: Friday, November 11, 2011 11:16 AM

To: Phil Hopkinson

Cc: Corkran, Jerry L; Richard Parker; Freeman, Jeremiah (CONTR); rick.anderson@faypwc.com; 

tballo@earthjustice.org; ScottB@LVMetals.com; john.caskey@nema.org; Cymbalsky, John; 

adelaski@standardsASAP.org;Teckman@nwcouncil.org; gbf1@pge.com; carlos.gaytan@ge.com; 

rgreeson@federalpacific.com; bruce.r.hirsch@bge.com; jhodge@howard.com; mhyland@appanet.org; 

dave.millure@metglas.com; snadel@aceee.org;wes.patterson@us.abb.com; Eric.Petersen@aksteel.com; 

Raymond.Polinski@ATImetals.com; artrosenfeld@gmail.com; srosenstock@eei.org; rroy@nrdc.org; 

robert.saint@nreca.coop; chuck.simmons@pgnmail.com;kwinder@mleainc.com; mwaltner@nrdc.org; 

jerry.schoen@aksteel.com; Paul.Ryan@hitmet.com; ahofmann@publicpower.org; 

pkumar@publicpower.org; bsmith@federalpacific.com; 

greg.coulter405@gmail.com;jmauer@standardsasap.org; Cohen, Daniel; Meyers, Aaron; 

Jim.creevy@nema.org; jrossetti@mlgw.org; cabolduc@lbl.gov; kcoughlin@lbl.gov; 

brian.coffey@navigant.com; mrivest@navigant.com; gjrosenquist@lbl.gov;caitlin.johnson@navigant.com; 

zhimei.luo@navigant.com; Marchetti, Emily (CONTR); charlied@uus.org; DYoung@energy-solution.com; 

James.Lass@cleco.com; maheshsampat@bellsouth.net;matthew.nardotti@navigant.com; Raba, Jim; 

Savitz, Maxine (EMAB); tpetrosino@carolina.rr.com; chris.brown@cogentpowerinc.com; 

ted.johnstone@cogentpowerinc.com; frank.guilbault@cogentpowerinc.com;ned.efbrush@gmail.com; 

dbrender@cda.copper.org; chad.kennedy@us.schneider-electric.com; eduardorobles@eaton.com; 

vijay.tendulkar@onyxpower.com; thomas.patzner@us.schneiderelectric.com;carlosgsiqueiros@eaton.com; Robert Berman; Trujillo, Antonio; Moore, Jack C

Subject: Re: Negotiated Rulemaking - Distribution Transformers Teleconference 

 

Even if it were that high (and Mr. Hopkinson is the only one I've seen who has put the number 

anywhere near that), the efficiency objective is saving Watt-hours (energy) not Watts (the 

capacity to save energy) . One Watt saved for 8,760 hours per year for 30 years is 262.8 kWh 

(not counting leap years). Even at Mr. Hutchinson's $20, that's just over 7¢ / kWh. If Mr. 
Hutchinson will examine his electric bill, as he has reported, he will see that even as high as 7¢ 

it's a good buy, and that assumes we put a ZERO value on any environmental benefits (which is 

why DOE agreed to reconsider its 2007 MEPS in the first place. 

 

Indeed, the cost of losses per Watt (roughly the A factors that OPS has been using) are no where 

near the $20 claimed here. Moreover, as ABB and others have pointed out, the proper approach 

would have been to minimize cost subject to efficiency, not A & B, which would have resulted 

in a lower, flatter curve to the asymptote. ABB's actual market data -- physical transformers 

produced and delivered -- shows a competitive market for M3 transformers even at EL4 

efficiency. You can make all the hypothetical claims you want to, gentlemen, the market is the 

real world. 

Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703‐281‐0490

703‐655‐8398 (cell)

BermanEconomics@gmail.com

 

On Nov 10, 2011, at 6:53 PM, Phil Hopkinson wrote: 

 

Well stated Jerry 

 

That is also what my analysis and report said. If you restrict to M3 then the cost of EL1 rises to 

about $20/watt. 

 

Phil 

Phil Hopkinson,P.E. 

HVolt Inc. 

704-846-3290 

F: 704-845-2520 

C: 704-236-3320 

phopkinson@hvolt.com 

On Nov 10, 2011, at 18:04, "Corkran, Jerry L" <Jerry.Corkran@CooperIndustries.com> wrote: 
To Mr. Parker and the DOE working group, 

 

The reason for the request for the incremental cost of the losses is that the current DOE efficiency levels can be

obtained if the design is optimized at about $4 per core watt and $1 per winding watt at full load.  At the DOE 50%

kVA rating, this is the same as evaluating the losses or optimizing the design at about $4 per total watts loss.

 

The present DOE efficiency loss level results in transformer designs about like many utilities were purchasing their

transformers before 2007.   The utilities were purchasing the efficiency levels that were justified based on the cost

of losses.  A few utilities  were purchasing higher efficiency that the 2007 efficiency rules because of the calculated

cost of energy being higher than the $4/$1 loss evaluation.

 

What came up in the discussion last week was even for loss level 1, the incremental cost of losses was about $17

per watt for the design checked, between the present DOE losses an efficiency level of DEL1.  The added cost of

$17 per watt is so much higher than the typical cost of the energy for the utilities, that  it is very questionable that

the DOE payback estimates are accurate.  A 3% interest rate may be a factor in the payback calculations. 

 

 

Jerry Corkran 

 

 

From: Richard Parker [mailto:richardparkerdc@gmail.com]

Sent: Thursday, November 10, 2011 3:23 PM

To: Robert Berman

Cc: Freeman, Jeremiah (CONTR); rick.anderson@faypwc.com; tballo@earthjustice.org; 

ScottB@LVMetals.com; john.caskey@nema.org; Corkran, Jerry L; Cymbalsky, John; 

adelaski@standardsASAP.org;Teckman@nwcouncil.org; gbf1@pge.com; carlos.gaytan@ge.com; 

rgreeson@federalpacific.com; bruce.r.hirsch@bge.com; jhodge@howard.com; mhyland@appanet.org; 

dave.millure@metglas.com;snadel@aceee.org; wes.patterson@us.abb.com; Eric.Petersen@aksteel.com; 

Raymond.Polinski@ATImetals.com; artrosenfeld@gmail.com; srosenstock@eei.org; rroy@nrdc.org; 

robert.saint@nreca.coop;chuck.simmons@pgnmail.com; kwinder@mleainc.com; mwaltner@nrdc.org; 

jerry.schoen@aksteel.com; Paul.Ryan@hitmet.com; ahofmann@publicpower.org; 

pkumar@publicpower.org;bsmith@federalpacific.com; greg.coulter405@gmail.com; 

jmauer@standardsasap.org; Cohen, Daniel; Meyers, Aaron; Jim.creevy@nema.org; jrossetti@mlgw.org; 

cabolduc@lbl.gov; kcoughlin@lbl.gov;brian.coffey@navigant.com; mrivest@navigant.com; 

gjrosenquist@lbl.gov; caitlin.johnson@navigant.com; zhimei.luo@navigant.com; Marchetti, Emily 

(CONTR); charlied@uus.org; DYoung@energy-solution.com; James.Lass@cleco.com; 

maheshsampat@bellsouth.net; phopkinson@hvolt.com; matthew.nardotti@navigant.com; Raba, Jim; 

Savitz, Maxine (EMAB); tpetrosino@carolina.rr.com;chris.brown@cogentpowerinc.com; 

ted.johnstone@cogentpowerinc.com; frank.guilbault@cogentpowerinc.com; ned.efbrush@gmail.com; 

dbrender@cda.copper.org; chad.kennedy@us.schneider-electric.com; eduardorobles@eaton.com; 

vijay.tendulkar@onyxpower.com; thomas.patzner@us.schneider-electric.com; 

carlosgsiqueiros@eaton.com

Subject: Re: Negotiated Rulemaking - Distribution Transformers Teleconference 

 

Robert, 

I understand the DOE staff are working on the incremental Watts calculations and will get that 

out to group as soon as it's ready. 

best wishes, 

Richard 

On Thu, Nov 10, 2011 at 11:52 AM, Robert Berman <bermaneconomics@gmail.com> wrote: 
Thank you Richard. That clarification is helpful. 

 

In the liquid-filled meeting we were told that we would receive an analysis of incremental Watts 

saved by DL for all ELs, as well as the incremental cost. When will that analysis be available? 

For many of us, that analysis is the basis for additional, perhaps extensive analyses, so it should 

come with enough lead time before any additional meetings or teleconferences to that we can 

give it the required consideration. It would be most helpful if the incremental cost were provided 

separately for transformer and installation, with any pole component of the installation identified. 

 

For the MV Dry and LV Dry meetings, it would be most helpful if you would also circulate an 

agenda with objectives, hopefully this week, so that we are able to prepare for those meetings. 

Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703‐281‐0490

703‐655‐8398 (cell)

BermanEconomics@gmail.com

 

On Nov 10, 2011, at 11:14 AM, Richard Parker wrote: 

Dear Colleagues: 

The telcon on the 17th is currently planned for medium-voltage dry-type and the telcon on the 

21st is reserved for low-voltage. There will be revised analysis circulated in advance of both 

calls per our discussion yesterday. Each call has substantial chunks of time allocated, though I 

hope we won't need all that time. 

It may be prudent to schedule a liquid-filled call at some point as well, but I propose that we hold 

off on that for day or so, until we can clarify when revised analysis for liquid-filled will be ready. 

 

Thanks for your very constructive participation in the meetings over the last two days. 

Richard Parker 

On Thu, Nov 10, 2011 at 10:05 AM, Freeman, Jeremiah (CONTR) 

<Jeremiah.Freeman@ee.doe.gov> wrote: 
When: Thursday, November 17, 2011 1:00 PM‐5:00 PM (GMT‐05:00) Eastern Time (US & Canada). 

Where: Webinar and Phone 

 

Note: The GMT offset above does not reflect daylight saving time adjustments. 

 

*~*~*~*~*~*~*~*~*~* 

 

Dear Colleagues, 

 

This event is to save the time slot on your calendar based on our discussion at yesterday's meeting. Later today

further information will be sent regarding the registration information for our November 17 and November 21

webinars. After registering you will get the link for the webinar and a toll free number. 

 

Please call with questions or concerns. 

 

Very Respectfully, 

Jeremiah Freeman 

202‐431‐4243 (cell) 

202‐586‐1867 (office) 

 

 

 

 

 

 

 

>>> This e‐mail and any attachments are confidential, may contain legal,

professional or other privileged information, and are intended solely for the

addressee.  If you are not the intended recipient, do not use the information

in this e‐mail in any way, delete this e‐mail and notify the sender. CEG‐IP2