Rosslyn, VA, September 26, 2006 -- The National Electrical Manufacturers Association (NEMA) has asked the U.S. Dept of Energy (DOE) to consider using newer data in the economic analysis of efficiency levels in certain electrical transformers.

"The rise over the past several years in materials prices, for instance, for copper and steel, is not reflected in the prices used by DOE to calculate energy efficiency levels in these transformers," said Kyle Pitsor, NEMA vice president of government relations. "The standards should be based on the best available data."

The U.S. Dept of Energy, with a public meeting on Sept 27, 2006, kicked off the standards process for distribution transformers typically used by electric utilities and in manufacturing facilities. NEMA has a long record of supporting high efficiency products, including a host of new product standards in the Energy Policy Act of 2005. NEMA has been the industry leader in transformer efficiency with the TP 1-1996 standard published a decade ago and advocated by the association ever since. An updated version of this (TP 1-2002) is the basis for the Low Voltage Dry-Type Transformer standards specified in the Energy Policy Act of 2005; these standards go into effect January 1, 2007. Based on actual applications in New England, this LVDT standard would produce about a 50% savings in electricity. TP 1 continues to be the benchmark for newly proposed standards.

There is some controversy now among the various stakeholders as to what efficiency level DOE should adopt for the national standards for the remaining distribution transformer types (Medium Voltage Dry-Type and Liquid Filled). NEMA believes that the debate about what level is most cost effective should be based on a sound technical and economic assessment. NEMA believes that such an assessment is not on the table and that the current debate is limited by inadequate information.

The determination of a cost-effective efficiency level requires a tradeoff between the initial unit cost and the value of future energy savings. The DOE economic analysis being used is based on materials costs from 2002-2004. Costs from these years were historic lows in real terms. At NEMA's request, DOE did perform an analysis based on first quarter 2005 costs; for example, electrical steels typically used in high efficiency transformers cost about twice as much in 2005 as in the DOE base time period. However, rather than adopting the new costs as the baseline, DOE chose to continue to use the 2002-2004 data.

Because of world demand for these materials (notably from China and India), NEMA believes that the 2005 data is more relevant to today's debate over efficiency levels (even worse than steel, copper prices have continued to go up and are now two to three times higher than in the 2002-2004 period). Pitsor says that DOE "should promptly obtain late 2005 and 2006 data to determine benchmark costs. Life cycle costs assessments can then be made and a sound basis for efficiency standards established in short order. Barring a better updated analysis, NEMA supports DOE Trial Standard Level 1."