WARNER POWER RESPONDS TO THE DEPARTMENT OF ENERGY NOTICE OF PROPOSED RULE-MAKING (NOPR)

WARNER, New Hampshire 13 Feb, 2012 - This exercise was initiated on a ‘fast-track’ as part of the court settlement in respect of the alleged failure of DOE to meet its statutory obligations under the Energy Policy and Conservation Act of 1975 (EPCA) and amendments thereto under the National Energy Conservation Policy Act of 1978 (NECPA) and the Energy Policy Act of 1992 (EPACT 1992). Distribution transformers were included in the group of covered commercial equipment in EPACT 1992. This settlement required DOE to publish a revised rule not later than October 2012 for a number of covered products, including low-voltage distribution transformers as required by Section 135(c) of the Energy Policy Act of 2005 (EPACT 2005). Pursuant to EPCA, any new or amended energy conservation standard that the DOE prescribes for distribution transformers shall be designed “to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified”. Furthermore, any new or amended standard must result in a “significant” conservation of energy.

DOE commissioned Navigant Consulting to perform much of the fact-finding and analytical work. Warner Power was active in this phase and met on several occasions with DOE HQ, DOE Lawrence Berkeley National Laboratory and Navigant, as well as hosting a visit to Warner by Navigant. Warner Power also attended at public meeting in the spring of 2011 at DOE HQ and submitted verbal and written statements, some of which are reported in the NOPR.

Later in 2011, the White House urged DOE to be more business friendly by seeking to obtain consensus on new standards through a panel of industry experts, rather than by Government order. Under the auspices of the Energy Efficiency Renewables Advisory Committee (ERAC) established by Secretary Chu in late 2010, the FACA, and the Negotiated Rulemaking Act, such a panel was convened, which did not include Warner Power, but Warner did attend the first panel meeting as an observer.

Relative to low voltage, dry type, 3 phase, distribution transformers, which is the primary interest of Warner Power, the NOPR makes but a modest incremental change. Using the popular 75kVA size as a benchmark, this NOPR raises the minimum efficiency level from 98.00% to 98.47% (at 35% of rated power). Interestingly this still falls short of the current NEMA Premium and CEE Tier 1 standards, both of which cite 98.60% efficiency for this size and type. It is curious that two industry groups (NEMA, representing the electrical manufacturers and CEE, representing the Utilities), have both endorsed a higher standard than that set forth in the NOPR. This would strongly infer that DOE has again failed to meet its obligations under EPCA 1975.

In a recent press release, dated Feb 2, 2012, ACEEE and others fiercely criticized DOE. This sets forth, quantitatively, how far DOE has fallen short of achieving significant energy savings. It is available at http://www.aceee.org.

Warner Power takes the view that the DOE approach was timid and too concerned with preserving the status quo:

1. DOE failed to consider the limitations of the present testing method, which requires a single test point of 35% of nameplate load. Warmer Power had recommended testing at 15% load, in line with overwhelming evidence that shows that most distribution transformers operate at very low loads, where they are quite inefficient.

a. DOE data (ORNL-6925, page 2-8) referenced a 20% average loading for a 75kVA LVDT in one study, this being reduced by conservation activities from 26% formerly.

b. Study: Metered Load Factors for Low-Voltage, Dry-type Transformers in Commercial, Industrial and Public Buildings published by the Canadian Government (Natural Resources Canada) cites a study in Massachusetts by CADMUS, under a contract from the Northeast Energy Efficiency Partnerships, Inc. (NEEP). This showed an average loading of 15.9% http://oee.nrcan.gc.ca/industrial/equipment/dry-type-transformers/study/metered-load-factors/index.cfm?attr=4 .

c. ASHRAE Design Guide for K-12 School Buildings (2008) in which DOE participated, indicated that very low loadings were found in some school low voltage distribution transformers with efficiencies consequently as low as 79.5%. On page 153 the report states that transformers should be at least 30% lower loss than TP-1 and that the efficiencies should be certified at 16.7%.

d. There are widespread activities to improve building efficiencies. These include DOE leadership activities; utilities’ conservation programs and rebate schemes; the growing trend among consumers towards conservation and efforts by large ESCOs such as Johnson Controls. Taken as a whole, this will lead to more efficient buildings and declining consumption. This may reduce loads on low voltage distribution transformers, even below the numbers referenced above. A 50% reduction in building energy use is clearly achievable per DOE Report PNNL-19004.

2. DOE failed to consider emerging high-efficiency technologies such as symmetrical core technology and core deactivation technology.

3. DOE spent some time investigating amorphous steel which it acknowledged offers a significant reduction in core losses, but ruled out this material due to expected supply chain difficulties, including concerns about reliance on imported materials.

4. For low voltage, dry type transformers, DOE ruled out efficiency gains relying on the more widespread use of step-lap and miter-cut core construction techniques, on the grounds that this would disadvantage the many smaller manufacturers of these types of transformer, who lack the appropriate equipment and capital resources.

Faced with these limitations, DOE could only make marginal improvements based on slightly higher grade, but conventional core steels, conventional core construction and heavier windings to reduce resistive losses.

Having observed this at first hand, Warner Power concluded that the process was fundamentally flawed, with the DOE intervening in an effort to protect transformer houses from the supposed repercussions of any of the more significant possible changes. And yet without major technological changes, (and let it be clear, market winners and market losers), no worthwhile improvement in transformer efficiency standards is achievable.

It is widely acknowledged that the distribution transformer market functions poorly due to an inherent disconnect. Distribution transformers are frequently specified and purchased by parties other than the power consumers, often without consideration of the long term total cost of ownership. To address this, Government and Industry are encouraged to work together, to continue to promulgate higher efficiency standards, as well as raising the awareness of the importance of transformer efficiency.

Warner Power believes that a key element in any solution will lie in education and mandatory labeling of transformer efficiencies, with the lifetime costs of energy wastage clearly stated in advertising, sales proposals and placarded on the transformers themselves. For example a low voltage, dry type, 3 phase, 75kVA transformer meeting the current Federal standard, running at 35% load, will waste $14,716 in electricity of its average lifetime of 32 years, using a constant national average electricity price of $0.10/kWh. This is a shockingly high number compared with the estimated transformer purchase price of $3,000.

Education and information may be appropriately reinforced by modest legislative incentives to encourage buyers to select premium efficiency transformers. An example of this may be found in The Energy Savings and Industrial Competitiveness Act of 2011 (Shaheen-Portman) with rebates targeted for NEMA Premium grade transformers.


More about Warner Power LLC
Warner Power manufactures electrical transformers, power supplies and data entry terminals, boasting many years of experience and a reputation for quality and reliability at a competitive price. Rooted firmly in the New England traditions of inventiveness, hard work and thrift, Warner Power products support the fast-growing alternative energy industries in China, Korea, Europe and the U.S. Over 40% of the company’s production is exported. Other key markets include power supplies for industrial heating, elevator drive systems, and medical equipment.

In 2008 the Company was recognized as one of the fastest growing privately owned companies in New Hampshire by New Hampshire Business Review magazine. In 2010 Warner Power was recognized by New Hampshire Governor John Lynch in his State of the State Speech.

Warner Power is a portfolio company of American Capital, Ltd. (NASDAQ:ACAS), a Bethesda MD based publicly traded private equity firm and global asset manager Visit: http://www.warnerpower.com/.

Warner Power manufactures electrical transformers, power supplies and data entry terminals, boasting many years of experience and a reputation for quality and reliability at a competitive price.

40 Depot Street Warner, NH 03278 USA

This release was published on openPR.