Document zdXJzV3Q0x8EVowm9vO16RNbm

THE TRANSFORMER ASKAREL FLUID MARKET By Donald R. Pogue February i, 1970 005<>0a3 LEXOLDMONOQ6496 DISTRIBUTION LIS T 1. w. R. Richard 2. C. Curtis 3. R. Munch 4. D. A. Olson 5. H. S. Bergen 6. P. G. Benignus 7. M. F. Baber 8. R. Davis 9. Extras - 4 0056084 LEXOLDMON006497 TABLE OF CONTENTS Page I. II. III. IV. V. VI. INTRODUCTION....................................................................................................... 1 SUMMARY AND CONCLUSIONS............................................................. RECOMMENDATIONS..................................................................................... 2 U ASKAREL TRANSFORMER MANUFACTURER......................... 13 A. Askarel Customers - Types Produced..... 13 B. Askarel Consumption by Type................................... 14 C.' Marketing Organization................................................. 14 D. Cost and Profitability ............ 20 E. The Market Demand by Type................................... 23 F. Demand by End Market................................................ 26 ORGANIZATION AND DECISIONS BY THETRANSFORMER MARKET......................................................................................................................... 31 A. Industrial ................................................................................................. 31 B. Utility and Commerical................................................. 33 C. A&E Versus Consulting Engineer.................. 35 D. The Insurance Company and Electrical Code Pro- 35 visions ....................................................................................................... ATTITUDES AND SELECTION CRITERIA............................... 36 ASKAREL MARKET OUTLOOK............................................................. 40 A. Askarel Seasonality........................................................... 40 B. Quarterly Askarel Demand - Annual Forecast Model................................................................................................ 42 C. New Market Opportunities.......................................................- 49 0056085 LIST OF TABLES Table No. I II HI IV V VI VII VIII IX X _____________________________Title___________________________________ Page Transformer Manufacture - Askarel Customers 52 Transformer Askarel Sales (Blended) by Transformer Type - 1968 53 Typical Profitability & Costs of Askarel Filled Secondary Substations (Load Centers) 54 Estimated Askarel Market Share by Type and Participating End Market Distribution 55 1968 Industrial Market Demand Substation Type Transformers 56 Selected Utility Networks ( 20, 000 KVA Capacity) 57 General Check List for Selection of Load Unit Substation Transformers 58 Transformer Characteristics & Price Comparison 59 Domestic Transformer Aroclor Sales 60 Domestic Askarel Sales Outlook and Historical Correlation by New Transformer Indicators1959-1968 and 1975 61 005608b LEXOLDMON006499 LIST OF FIGURES Figure No.Title_____________________________________ Page I. Typical Transformer Costs 20 II Quarterly Transformer Askarel Sales vs Transformer Shipments and Orders 501 KVA and New Industrial Construction 1964-1968 43 III Transformer Aroclor Demand (Mlb) vs Transformer vs. Transformer Orders, 501 KVA (Units) 45 IV Askarel Outlook vs. Capital Expenditures on 48 Electrical Distribution Equipment and Power Distri bution Transformers 1950-1958 and 1975 0056087 APPENDICES APPENDIX A Some Transformer and Dielectric Terminology B Transformer Use and Types* C Westinghouse Sales Letter D Transformer Askarel Sales, Transformer Shipments and Orders and New Industrial Construction 1965-1968 E Bibliography F List of Personal Contacts Made During This Study Page j vii xx xxi xxii xxiii *List of Figures 1 Transformer Size (KVA) vs Primary Voltage(KV) xiii 2 Askarel Substation Design xiv 3 Dry Type Substation Design xv 4 Gas Filled Substation Design xvi 5 Load Center with Two Askarel Filled Unit Substations xvii 6 Liquid Filled Network Transformer xviii 7 Pole Type Oil-Filled Transformer xix 0056088 LEXOLDMON006501 X. INTRODUCTION Since the 1930's Monsanto has been a proprietary supplier of Askarel to the domestic transformer market. This study was initiated to analyze our market and the factors that influence Askarel demand. The results of this study will, hopefully, provide not only a tool for understanding our end markets but a source for decisions affecting askarel's growth. The objectives of this study were to: 1. Define the askarel market and its attitude towards askarel. 2. Document our market share and project askarel demand. 3. Analyze those influences on demand that we can favorably affect. Include the possible influences on demand of new askarel pricing, advertising and field sales effort. The information in the study was gathered from published sources, telephone and personal contacts with twelve utilities, seven service agencies, six key askarel transformer manufacturers, four industrial firms and four architectural and engineering (A&E) firms. (See Appendix F). The personal contacts were limited to firms in the St. Louis area (for convenience) and firms east of the Mississippi where all of the significant askarel transformer manufacturers and the majority of the largest utilities and other market influences are concentrated. Personal calls on industrial and A&E firms were limited and the consulting engineer audience was not contacted. 00S6Q89 -1 LEXOLDMON006502 n. RESULTS AND CONCLUSIONS Significant results and conclusions found during this study are summarized in this section according to the three objectives of this report. A. The Askarel Market and Its Attitude Towards Askarel Askarel is used only because it provides safety from fires and explosion. Askarels safety image must be protected "at all costs", and certainly in accordance with the value we place on our entire market. Askarel participates in only three of the four transformer markets: These three markets are industrial*, utility** and commercial. AskareTTias not participated in the residential market because transformers have been outside atop poles where people or property were not considered in danger from a transformer fire or explosion. 1. The Residential Market Residential transformer market growth will continue to outpace industrial, commercial and utility growth. Although this market was not surveyed under the report objectives, a 50-100 M lb opportunity was uncovered for askarel in the unit residential trans former (URT) market. He re safety is important as transformers are locatecfon or near the ground close to each resldtf'ffcel Monsanto opportunities include our plastics technology for corrosion resistant URT tank-mate rial IT Both of the above opportunities should be investigated tjij iTT 1^70. Allis Chalmers and GE expressed interest In ---discussing dielectric medium and corrosion-resistant transformer tank materials with Monsanto. Leading utilities that promote differing URT concepts include: Duke Power, Virginia Electric & Power Co. and Southern California Edison Co. * Includes government purchases. The utility market includes transformers owned by the utility for its use (i. e. generating plants, electrical transmission, network distribution). It does not include transformers purchased by the industrial and commercial customer. It does not include residential transformers although they are owned by the utility. -2- 0056090 The Industrial Market Our largest end market is the industrial firm. This market represents 60% of our total demand. ---------- Unit substations (secondary and primary) installed indoors, on rooftops, and close to buildings represent over 90% of askarels use and from 18-33 IvT lb in unsold potential. ~ About 3. 7 M lb of this unsold potential is dry type indoor and 0. 6 M lb is in gas filled indoor and outdoor secondary substations. The remainder is in oil filled outside substations. Our opportunity to expand participation in the oil filled portion of this market is not appealing unless the askarel transformer price is shown equal to the cost of the oil filled unit plus the cost of required fire ' protection devices (fog sprays, fire barriers etc.) and the average annuaTdollar loss due to oil filled fires an<Texplosions. The prevalence of "it's standard practice11 on transformer selection indicates industry does not closely analyze this approach to the economics of askarels safety^ Monsanto can successfully study and use this sales tool in industry. In the industrial market askarel is neither losing nor gaining significant ground on dry type indoor substation demand. Our long term position in this market is endangered unless askarel transformers maintain design superiority over dry type and unless we insure, after tHirty years of service, that faulty askarel transformers designs are' prevented. These observations center uoon: i--* " ~ a. New advanced dry type indoor substation designs now offer impulse strengths equal to askarel at competitive prices. b. Large, old-time askarel users like General Motors, Ford and Chrysler emphasize the same dislike leaks from faulty gaskets and bushings and internal vapor phase corrosion in the askarel unit. This problem is a major reason why General Motors is the major proponent of gas filled designs, and why GM and other industrial firms will not maximize askarels use. -3- 0056091 The profitability of the askarel transformer is unsatisfactory between 15-34 KV voltages due to large insulation clearances thus a large tank deslgrf. According to"Westinghouse, askarel transformer manufacturers -do-not-fully understand this design problem. The trend in industrial secondary substations is to these voltage levels and so is dry type design technology. The industrial market for askarel transformers is widely dispersed and is not dictated by several industries as expected. About 50% of our demand is shared by primary metals, chemicals and the automotive industry. The remaining 50% is evenly spread through 10-15 industries including: Paper Mining Textiles Electronics Petroleum Rubber Food Stone - Clay - Glass Drug Aviation We can expect the dissimiliar industrial environ ments of aviation, food, electronics, drug and rubber to lead to the choice of askarel for major reasons other than proven reliability, contaminated environments and heavy concentrated loads which together or separately typify our three largest consumers. This diverse demand picture justifies Askarel market contacts by industry. A starting point is the petroleum, paper and textile markets, all of which have a low proportion of askarel units to total secondary substation units, according to ITEjand GE unit sales repprts. Allis Chalmers, Pittsburgh has recently fimryey.ed.the industrial^ transformer market regarding preferences and demand. These results should now be available to Monsanto to assist our industrial marketing approach. A new opportunity suggested by Stone and Webster, aTe'ading engineering firm, should be screened for demand and need by Monsanto in high temperature, high voltage cable insulation and fire resistant ' dielectric-coolant mediums. Present solid insulating materials and the use of oil as the dielectric-coolant medium do not meet safety and heat dissipation requirements according to Stone and Webster. Our Flutec-Imperial Smelting technology may be an entre here. -40056092 3. The Commercial fc Utility Market These two markets are summarized together because of the influence of the utility on the transformer decisions in these markets. These markets combined represent 4D% of Askarels demand. Utility owned network transformers and commercial/utility owned indoor secondary substations represent over 70% of our sales volume to these markets. Our overall market atmosphere is unsatisfactory. a. Many large utilities minimize askarels use and do not specify askarel unless absolutely required. This includes large^iskarel network users contacted and Consolidated Edison, New York, who controls about 45% of the entire network transformer market. b. The large utilities not only control the network transformer market but also are the largest influence in the commercial transformer market. Unfavorable prejudice is thus affecting askarels commercial secondary substation market. c. We are losing market position to dry type secondary substations where sales are running at least 2:1 dry to askarel and the trend favors dry type. Similarly our network transformer market share is approximately 20% and shows no gain in position over oil-filled which dominates the remaining 80% of the network market. Our most significant problem is the utilities reluctance to expose personnel and customers to askarel^fumes and irritation. This has resulted both from severaTXvidely publicized explosions and frequent bothersome transformer leaks. Our commercial market growth is further hindered by cost cbncious decisionmakers in the utilities who disfavor askarels high installation costs (venting and vaulting^and weight of unit) and the higher price of askarel vs dry type of smaller substation sizes (500 KVA range) which are popular for upper floor high rise use. -5 0036093 Results and conclusions for askarcls markets have been summarized above. Other important market sectors are: a. The Transformer Manufacturer Our major customers are unbiased towards askarel and they are not aggressively pursuing advanced askarel designs to compete with dry type technology. Their `emphasis is on lowering costs and developing new drytype designs to compete with improved technology from Zinsco, Federal Pacific Electric and Sorgel. . Westinghouse So. Boston is "the exception to the rule" as they actively push askarel in competition with Sharon's dry type units. None of the manufacturers appear aware of askarels market position (Westinghouse underestimates our market demand by 50%) nor of the askarel transformers market-image as in-depth account penetration was not found during any call on this study. b . Insurance, Codes and Agencies Insurance rates are not a governing factor in the type of transformer selected. The key criteria are the minimum provisions of the National Electrical Code, upon which transformer installation policy and insurance premium rates are based. Agencies are covered under section 6. We must address ourselves to frequent utility technical service visits to neutralize emotions on askarel's toxicity andTiandling. A^uccessiul reduction of askarel's installation design requirements could offset lower priced 500 KVA size dry type units. The attitudes of the consulting engineers were not assessed during this study. The decisions of the smaller utility and the commercial customer in his area are influenced by the consulting engineer. 6 0056091! B Document Our Market Share and Project Askarel Demand Prior discussion highlighted askarel's demand by end market, industrial, commercial-utility, and residential. Askarel's estimated potential and market Bhare summarized by major transformer type is: Transformer Total* Market in M lb Askarel Residential Units Gene rating-Transmission Primary Substations Secondary Substations Network Rectifier Furnace Specialty Precipitation Commercial Pad and Pole & Mi sc ** ** 30 22 18 3 3 ** 1 >30 % Total Units Ask Oil Dry Gas 0 100 0 0 0 100 0 0 5 95 0 0 44 30 23 3 20 80 0 0 25 75 0 0 2 96 --- 2 - -- 5 15 80 - 50 50 0 0 5 94 ..-1- Total >104 -cl 6 >78 6 1 *Based on only direct sales to key transformer manufacturers 16. 5 ^ lb out of 21 M lb blended sales in 1968. The market for those transformer types askerisked (**), residential, gene rating-transmission and specialty, was not assessed in this study as they had either insignificant or no known askarel participation and potential. Residential (except URT) and gencrating-transmission units, although large markets, are oil filled, outside and remote from the hazards of fire. Specialty units have askarel participation in precipitation units and this is reported separately. Other askarel sales in the specialty group are estimated at 5% for instrument and transportation units. However, this total market category offers insignificant potential now dominated by mini-sized ( 1 KVA) dry type units. Our market share for those markets in which we now participate does not exceed 16%. Dry types have 6. 7 MT lb of our market, concentrated in indoor secondary substations. Sales are split about 50% commercialutility and 50% industrial. Gas-filled units represent only 0. 6 R lb directed to the industrial market, primarily to General Motors. Oil filled outdoor units dominate all our markets except secondary substations. -7- 0056095 B( con't) Projected Demand Historical mathematical correlations indicate askarel growth rate above 7% per year through 1975. However laskarel sales appear leveling and will not progress at that rate due to our s tatic__netwo rk.market share and increasing-popularity of the commercial dry type substation transformer. Quarterly transformer orders as reported by Edison Electrical Institute offers the nnly meagnrp nf 'transformer sales activity found rapaMp nf antii-jpatinpr satisfactorily our yearly flnrt.nat.inn in sales. Other "ten year historical correlations of askarel sales with selected quarterly and annual measures of the economy, construction, transformer shipments and sales and energy consumption failed to anticipate yearly sales fluctuations. Results for predicting askarel demand for the period 1964 through 1969 estimated and forecast 1970 by this method are as follows: Year % Change*** (est) % Change (Actual) 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 4% z 30 -19 -14 0-5% 32% 5 21 -7 -14 (est) Note that although fluctuation was correctly identified for 1964-1969, the exact magnitude is questionable. Our 1970 prospects by this method indicate sales at the same 16 W lb level as our estimated 1969 performance (ignoring strike impact). C. Analyze those influences on demand that we can favorably effect. Include possible influences on demand of new pricing, advertising and field sales effort. -8- 0056096 LEXOLDMON006509 Advertising Our advertising program should be directed( onlyjro the_cons_nlting engineex,_2000 of whom are members of the Consulting Engineers Council. a) The l^rge industrial and utility firm is an experienced, biased audience~thaT~relies on technical seminars and technical associations like EEI & IEEE for current developments. Penetration will require personal ronfarta b) The consulting engineer influences the smaller industrial firm and the commercial'area 61------the'-'Sinaller utility. Earger utilities are usually the dominant influence in their commercial area. Four important transformer selection criteria that are now"parFol our advertising theme are^questionabTe^.^ askarel advantages to the experienced sptrciticr.------^ These four criteria are impulse strength, installation costs, location versatility and maintenance problems. Our theme would benefit by citing specific, unique cases where dollar savings in installation costs and the location of the unit were realized with askarel. Impulse strength should be de-emphasized. Pricing A change in askarel's price even to + 20-30% would not appear to significantly effect profitability on the average size askarel transformer. Our costs represent only 12-13% of the total transformer cost. Profitability is good, ranging up to an estimated 48% gross on 1500 KVA sizes. Profitability on smaller size askarel transformers in the 500 KVA range appears marginal at 20%. This explains why askarel prices are not competitive in this size with dry type in the commercial substation market. An increase of less than 1% in askarel's price if needed to justify increased research and field effort should not affect our demand nor prompt transformer price increases. -9- 005697 Field Sales and Marketing Effect Only through increased personal contact with utilities and industry can we expect to improve our market position and maximize Monsanto new opportunities. Monsanto technical visits have been appreciated by utilities and industrial firms. Firms contacted encouraged visits about once per year to educate on askarel's care and handling, reclamation and testing. To produce results in improved image and to gain in depth market understanding personal contact annually to an estimated 50-100 large firms in_our diverseHihdustrial market and to about 25 large investor owned utilities is required. The large utility and industrial firms have only several dominating decision makers on askarel transformers. Active participation in technical associations and close in-depth reviews of all changes in askarel transformer standards and installation code requirements are readily available avenues to pursue improved askarel transformer costs. -10- 0056098 RECOMMENDATIONS 1. Our most important objective should be to improve our market image and aggressively counter our unfavorable position HTthe commercial-utility network ^ind substation markeT ' Initiate an askarel personal contact program beginning in 1970 for at least two in-depth calls annually on the largest investor owned utilities (approximately 25). * i Primary objectives should include: 1) Service on askarel care and handling, reclamation and testing and good penetration at the Utility Distribution Engineering decision making levels. 2) Document additional cases and isolate the transformers and manufacturer(s) where faulty gaskets and vapor phase cbrrosion problems continue to occur on askarel units. The respective~manufacturer should be appraised of our findings. Our ultimate goal should be to insure the entire^market place, industrial commercial and utility, receives transformers equipped with askarel with a guarantee backed by the manufacturer and by Monsanto on the performance of the "unit". With the assistance of CED installation design costs should be analyzed to minize these requirements for the askarel unit. These installation provisions can be analyzed from input received from the utility and from the provisions of the National Electrical Code. Our research effort should be addressed to askarel insulations 'that offer improved costs for the smaller size (500 KVA, <15 KV) range) askarel substation unit. And secondly to the longer range need of improved insulation technology at 15-34 KV. Cooperative Monsanto-transformer manufacturer research efforts should be solicited. An increase in askarcl's price to justify this effort, if needed, should be approved. It is recommended that our advertising program be directed to the consulting engineer audience. This will penetrate both the commercial markets of the smaller utility and the smaller industrial plant market. Our theme should center on specific unique cases where dollar savings were realized in installation costs and in the location of the unit. -11- 0056099 2. New opportunities for askarel and plastics technology in the unit residential transformer market should be assessed in 1970 by either Commercial Development or Marketing. Calls "should be made on Allis Chalmers, General Electric and those key utilities that promote differing URT concepts as listed in this report. 3. Marketing or commercial development should "screen" in 1970 the demand and need for new cable insulations and fire resistant dielectric-coolant mediums with personal contacts to Stone-Webster and several cable manufacturers. 4. In 1970 marketing should contact industrial firms in our diverse markets to further appraise the total industrial position of askarel. These contacts should emphasize: a. Reasons for askarel1 s choice vs the specific industrial environment. b. Exact cost evaluations of the industrial askarel transformer vs outside oil filled units. c. Total askarel potential by each industry segment (i. e., aviation vs. petroleum vs. chemical etc. ) -12- 0056100 LEXOLDMONOQ6513 III. ASKAREL TRANSFORMER MANUFACTURER A. Askarel Customers - * Types Produced Only our key transformer askarel customers: Westinghouse, General Electric, Allis Chalmers, ITE, and Maloney and Wagner in St. Louis were contacted regarding their production. The product mix offered industry by these manufacturers is quite varied. Table I is a summary of data accumulated during visits and from the records of the National Electrical Manufactur ers Association (NEMA) regarding the transformer mix of our customers. Each manufacturer, typically, produces most transformer types from specialty to large power units. Their pro duction line includes both dry, oil-filled and askarel. Note that of our large customers: General Electric, Rome, is primarily substation oriented; Westinghouse, South Boston, will by 1970 have essentially all askarel production, with Sharon handling competitive dry types. 1TE produces only substations to support their switchgear production. The larger manufacturers, General Electric, Westinghouse, and Allis Chalmers, divide production between different plants. Conversely, the smaller plants, Wagner, H. K. Porter, etc. , produce all transformers at a single location. The production of askarel transformers is usually a small part of the transformer output of each company, but can be a large portion of an individual plant's production. As askarel finds major volume only in secondary substations and network units, as much as 90 percent of each manu facturer's output is oil filled units. All our key customers, except Allis Chalmers, also produce dry type and gas filled units. Allis discontinued dry type production in the 1950's. Advanced dry type technology and aggressive market penetration appears centered among those manufacturers where askarel production is incidental or non-existant. Key dry type manufacturers include: Federal Pacific Electric, Hevi-Duty, Zinsco Electrical Products, Los Angeles, and Sorgel in Milwaukee. 0056101 -13 Competitive pressure from these producers has forced renewed dry type attention by Westinghouse, General Electric and Allis. B. Askarel Consumption by Type Our key customers, Allis Chalmers, General Electric, Westinghouse and ITE, together in 1968 represented 14. 1 million pounds, or 75 percent of our 18. 7 million pound domestic sales. The remaining 25 percent was split between ten smaller transformer manufacturers (10 per cent) and service shops and the transformer user (15 percent). However, both General Electric, Pittsfield, and General Electric, Borne, have blended in a 45:55 and 80:20 askarel:chlorobenzene ratio respectively. Thus the actual market significance of our key accounts is higher. In 1968 they represented 16. 5 million pounds, or 79 percent of 21 million pounds finished blend market. Table II displays the significance of each manufacturer contacted to our business, and the significance of each transformer type to our askarel sales. The substation market represents about 68 percent of our business, with secondary substations our key market. Network^transformers represent 18 percent and other 14 percent. General Electric, Rome, Westinghouse and ITE are heavily committed in askarel to substation production. Con versely, General Electric, Pittsfield, and Maloney are heavy network transformer producers. Only Westinghouse and General Electric appear to be major factors in askarel's miscellaneous markets. C. Marketing Organization Each transformer manufacturer is organized similarly to serve the transformer market. Corporate sales are usually divided into industrial and utility groups or divisions. As under Monsanto's original "district" manager concept, the salesman reports administratively to the sales manager, and "functionally" to the marketing manager for that particular product group. Each product group is supported by a separate marketing, engineering, and planning staff. -14- 0056102 LEXOLDMON006515 The Salesmen The field representatives are multi-product, industry specialists. They are not profit oriented marketers. Thus they unquestionably do not care what type trans I former is sold -- oil, dry, or askarel, as long as they get the order. The representative is normally responsi ble for only one to two large industrial accounts, or one r to two utilities and several smaller accounts. With Westinghouse and General Electric, the large number of products per representative often justifies a single [i representative handling all General Electric electrical power equipment requirements to one account. A representative would also handle motors, switchgear, cable, capacitors, generators, etc. In-depth account penetration by transformer representatives was not fOTjnd~dui ing any call on this study. Contact is ' u maintained by the representative with only the key speci fiers at the large utility and industrial account. These people would include the manager of distribution engineering of the utility and the chief engineer, or project engineer, of industrial corporate engineering. Technical service representatives are available for specific problems that cannot be solved by the customer. Representa tives do not provide customer service visits on a routine basis. Operating and maintenance personnel of the utilities indicated that they did not_see the transformer representative at all. This lack of service philosophy was also found at A & E's contacted during this study. ' The sales representatives' lack of enthusiasm for pushing the askarel transformer is due to the unwillingness of manufacturers to inform representatives of the more profitable products. Our position is good with Westinghouse, I 1 however, as South Boston with askarel actually competes b with Sharon with dry types. Note Appendix C. As most other manufacturers offer all types of transformers, they indi cated: 1. Favoritism for one type may lead to loss of the contract P or order. The transformer often represents a very small part of the total project bid. Often it is as little' as two percent of the manufacturer's bid package that would include motors, switchgear, generators, etc. -15- VO* 0 0^b LEXOLDMONOQ6516 ?.. They could not trust the field with profitability data. 3. The user nearly always states his specific preference of i nnsformer type. This is especially true for the utility. The. engineering or consulting firm will cvnluate bids based on quotes received for each type of transformer, then he, too, will specify the type. Mu "hotin jp Management and Support The- marketing manager for askarel transformers normally reports to the plant manager and provides "functional guidance" to the field representative. A marketing manager normally handles one or two of the following transformer drms'm: Distribution transformers (less than 500 KVA units), small power transformers (501 to 10,000 KVA - which represents the present askarel market), and for the large powe'r 1 ransformers. This transformer class over lap -. erics depending upon the product mix of the plant and the size of the company. For example, Zeke Zehnder, Marketing Manager at Wagner Electric, has product and market responsibility for all power, distribution, and small power transformers. Conversely, Dave Keiser, Westinghouse, South Roston, has product and market responsibility for only askarel and oil units in the small power class. The marketing manager has reporting to him a staff of applications engineers (product specialists) and market planning personnel. The applications engineering group rereives each request for bid and handles pricing, delivery, and mmnr systems engineering. They coordinate with the engineering group on all bids that require a design deviation from iheir "standard" transformer line, which is a common off urrenco. In addition, the applications engineer is reqni it d more often than the representative to answer technical cirfonmr inquiries like: a) askarel toxicity, b) current trends in iranqfovmer selection for unique installation requirements, and other "what are people doing?" type questions. The l.,rk of profit motivation was found to exist throughout the applications engineering and market manager levels. Of all those personnel contacted at our customers, the marketing personnel at Allis (Milwaukee and Pittsburgh), Wagner, Moloney, and General Electric, Pittsfield, were not really sure whether oil or askarel or dry was the most profitable. General Electric, Rome; 1TE; and Westinghouse, -16- South Boston and Sharon acknowledged that askarel was more profitable than oil. However, just "get the damn order" is the order of the day, except for South Boston's askarel preference. Product and Market Planning The market manager is the focal point for this function. This industry, however, is characterized by minimum effort on new-product planning and market analysis. This is particularly true for askarel transformers. Even when asked, "How important is the commercial versus industrial market to your total substation business, and what is the significance of specific industries (steel versus automobile versus paper, etc. ) to your total substation business ?" few market managers, product planners or applications engineers had the answer. Westinghouse and General Electric, Rome, Georgia, had answers -- thanks to a well-staffed market research-planning group reporting to the marketing manager. Information is classed by computer for all bid requests receiv ed according to transformer type, geographical location of the customer, and the industry. Allis-Chalmers and ITE simply were not abreast of their market position. ITE estimated in a meeting that the construction market represented about ten percent of their secondary substation sales. However, a manual breakout revealed the construction market represented 23 percent of their business. AllisChalmers' situation seems even worse as all substation sales are made indirectly through the Switchgear Division in Milwaukee. The marketing manager in Pittsburgh has little direct contact with the end market. Specific comments regarding organization and marketing capability addressed to each manufacturer personally contacted is as follows: General Electric - Pittsfield and Rome, Georgia General Electric's marketing organization for electrical products is divided into the industrial and utility sales divisions. Market headquarters arc located at the producing plant. The industrial sales division is comprised of electrical machinery (motors, transformers, turbines, switchgear, cable, etc. ), marine equipment, and the -17- 0056105 electronics groups. Salesmen call only on specific industrial customers, while their counterparts in the utility sales division handle similar products and call only on specific utilities. Transformer orders are referred back to the market headquarters of the producing location for pricing, delivery, etc. Technical support is provided each salesman through installation and service engineering (I & SE) specialists located in each district office. Westinghouse - Sharon and South Boston Both Westinghouse and General Electric are similarly organized to serve the transformer market. Corporate sales is divided into three groups: Electronic components, distribution and service, and industrial sales. Industrial group salesmen are specialists handling all industrial products consumed by that specific customer. Utilities and industrial accounts are served by the industrial sales group. At South Boston, Dave Keiser, Marketing Manager, has a staff of six to nine "inside" salesmen (applications engineers) who handle orders and provide technical support to the field. Keiser will assume responsibility for the market and product planning group for substations and net works when they relocate to South Boston from Sharon. ITE, Philadelphia* 1 ITE is organized into two major groups, one of which is the Power Group. This group consists of several profit center divisions. These divisions include TransformersRectifiers, Switchgear, Victor Company (porcelain) and the Power Circuit Breaker (PGB) Division. The T-R division employs thirty to forty salesmen who differ from their General Electric and Westinghouse counterparts. They are: 1. More specialized - handling only the products of their division. 2. Responsible for both sales and engineering service. ITE has only one "applications engineer" in Philadelphia for transformers and one for rectifiers. Conversely, General Electric and Westinghouse have an applications -18- 00^6106 engineering staff, plus the customer service engineers. Allis-Chalmers, Milwaukee and Pittsburgh The Milwaukee group is the marketing arm for most of Allis1 askarel filled transformers. Market guidance, deliveries, pricing, etc., on the transformer comes from the market manager in Pittsburgh. Both Milwaukee and Pittsburgh have applications engineers. Milwaukee has four to six applications engineers specialized by industry - mining metals, rubber, petroleum, chemical, utility, etc. This group quotes prices, delivery, and answers generally to the prospective customer. They coordinate with the Pittsburgh applications engineering group. Milwaukee satisfies askarel and oil filled requirements through the Pittsburgh plant. Dry types are purchased outside from Sorgel, Standard Transformer, and others. The Switchgear division is separate from the Pittsburgh organization, which is part of the Utility Division. This organizations! split compounds the "care less" attitude towards askarel. The Switchgear Division does not share in Allis' transformer profits. The trend here seems to favor more active marketing by Pittsburgh. Allis is having success with new gas-filled units at General Motors, and generally have taken an aggressive market posture. A study was initiated several months ago by Fosdick and Associates, New York, for Allis in Pittsburgh. The study objectives are similar to ours, they include demand by specific industry, attitude analysis, and future transformer demand. Fosdick will personally contact over one hundred key industrial firms and will sub mit their final report to Allis in Pittsburgh in December 1969. Sheffey Massey, Marketing Manager for Allis in Pittsburgh, has agreed to discuss results with Monsanto. The Allis salesmen are like ITE men -- more specialized than General Electric and Westinghouse. They handle only the products of the Switchgear Division. Pittsburgh is responsible for both creative and applications engineering on each of their transformer types except the unit substation. "Creative" refers to new transformer designs, and major modifications to existing designs. The -19- , 0056107 Milwaukee group appears responsible for creative engineering on substations. Moloney Electric - St. Louis Moloney supplies only askarel filled network units to utilities. Rhinehart termed their salesmen as "order takers" for this market. The large network user, according to Moloney, usually gives you a certain percentage of their business whether you are high bidder or not. They serve only the domestic market, through full-time district transformer representatives (estimate twenty). About six regional offices are located in major cities east of the Mississippi to serve the big investor-owned utilities. West of the Mississippi they have a regional office in Dallas and several distributors, the largest serving the West Coast. They estimate 80 percent of their sales are direct. Distributors usually handle complimentary electrical equipment, while each Moloney's representative handles their entire transformer line. Costs and Profitability Based on cost analysis input provided by Allis Chalmers for indoor secondary unit substation, askarel represents between twelve and thirteen percent of the total transformer cost, including material, labor, and overhead. This com pares to 1. 6 to 1.8 percent for oil for the same type and size unit. FIGURE I: Typical Transformer Costs -20- 0Q3bl-O8 Figure I illustrates typical manufacturing costs applicable to askarel filled units. The core and coil together represent 54 percent; the supporting end plate assembly (core and frame) 15 percent; the tank and cover (including cooling coils) 13 percent; and miscellaneous enclosed parts 6 percent. Askarel's cost increases only slightly with increase in transformer size. Cost analysis input shows askarel is about 12 percent of the cost on a 500 KVA unit, and 13 percent on a 2500 KVA unit. The overall transformer cost is typical of a high volume commodity product. Allis reports that materials (including fluid) represent 75 percent of the unit cost, while labor is only 7 percent and overhead 18 percent. Labor and super visory costs are directed at the coil, tank and end plate (frame) assembly. Askarel versus Oil versus Dry Type The total transformer cost, excluding fluid, appears essentially equivalent for both oil and askarel units up to 15 KV primary voltage. For units above 15 KV primary voltage, the askarel insulation class increases one level, thus increasing askarel's costs. Historically, most of the network and secondary substation units sold are 15 KV and below. The trend, however, for both commercial and industrial substations is to 15 to 34 KV units. The basic design difference between oil and askarel units (networks and secondary substations) include only internal paint (askarel often is not painted, oil is); pressure relief device (standard on askarel, optional on oil); and the wire coating. However, these exceptions appear to vary from manufacturer to manufacturer and many market ''universally compatible" units that use either oil or askarel. Askarel1 s cost picture was found to rapidly deteriorate at those manu facturers not heavy in substation production, who were geared for predominately oil filled units, i. e., networks, pad-mounts, pole units, etc. Primary reason for this situation is the re quirement for non-standard gasketing, fluid and test procedures, etc. The dry type unit cost versus askarel is reported from essentially the same to about 5 percent above askarel for -21- 0056109 equivalent type and sizes. Dry type costs, however, are reported above askarel for units above 50 BIL due to increased insulation requirements. Improved insulation technology is present with dry type substation units now being offered at 95 BIL by Federal Pacific Electric, Zinsco and Sorgel. They have assured the utilities market that expected market demand will allow equivalent pricing with askarel at the 95 BIL level. Current pricing quotes {discussed later) indicate these units are now about 10 percent above askarel. Profitability The askarel transformer is more profitable than oil to manufacturing plants heavily committed to askarel production. Acknowledging this fact were General Electric, Rome, ITE, and Westinghouse, South Boston. All are key producers of secondary unit substations (askarel's primary market). Askarel units appear to generate acceptable to good profits ranging between 20 to 40 percent gross. Table III displays estimated profits for 500, 1500, and 2500 KVA units based on cost and pricing input from Allis and Westinghouse. Although the volume of askarel per transformer varies from manufacturer to manufacturer, this breakout is representative. The average unit size is in the 1000 to 1500 KVA range, indi cating 30 to 40 percent average gross profit. Note that profitability decreases substantially with decreased trans former size. Gross profit on oil filled secondary substation transformers ranges from 6 to 8 percent below that of askarel filled. This difference comes from the lower cost of oil required for each transformer, assuming other costs essentially equal. For example, oil costs on an Allis substation transformer rated at 1500 KVA, < 15 KV primary are $74 (2373 pounds (h> $0. 031/ pound) versus askarel at $665 (4113 pounds $0. 166/pound). This represents an 8 percent difference in profitability as the askarel transformer sells 125 percent higher than the oil filled units. This profitability difference should be applicable to all transformers where "universally compatible" design and significant askarel sales versus oil are realized by the manufacturer on that unit. At present we find only secondary substations and possibly network transformers in this category. -22- <>056110 Future Profitability / Between 15 to 34 KV primary voltage design, askarel economics (I are regarded as unfavorable by General Electric and Westinghouse. Askarel's cost and gross profit advantage over oil deteriorates between 15 and 34 KV, as noted earlier. This condition is apparently due to askarel's lack of ability to uniformly distribute voltage stresses. The phenomena is not fully understood according to Westinghouse, however, it does require large insulation clearances, thus a larger design. In view of in creasing demands for higher voltage units in the 15 to 34 KV range and improving dry type design at these voltages, Westinghouse has specifically addressed their future askarel plans to developing a high temperature unit that will overcome these ' problems. The period of 1968-69 generally has teen regarded as a time of over supply with deteriorated industry transformer prices. Industry is partially offsetting this profit squeeze by aggressive marketing and improving costs. General Electric, Rome, will convert all substations from high priced copper windings to aluminum by 19*70. Other economic moves are obvious: Westinghouse, South Boston, with new facilities; Allis Chalmers, Pittsburgh, pushing for new 1242 design. Manufacturers are optimistic for 1970 when they hope prices will rebound to 1966 1967 levels. E. The Market Demand by Type Askarel fluid enjoys a diverse use in at least nine different transformers ranging from secondary and primary substations to an occasional pole top transformer designed for inside use. However, two of these transformers, secondary substations and network junits, dominate our sales with about^dO percfent of our market. Based on the data presente(I_earlier for our key customers in Table II, our estimated market demand is as follows: Share by Transformer Type Total Secondary Primary Substations Substations Network Others Volume (M lb) % Total 16. 5 100 9.8 59 1. 4 9 2.9 18 2.4 14 -23- LEXOLDMON006524 Secondary Substations or "Load Centers11 represent about 59 percent of the askarel demand. Askarel substations, however, share a considerable part of this market with dry and oil types. From the transformer production input of ITE, Allis, General Electric and Westinghouse, who dominate this market, askareFs market share is not over 44 percent: V olume (M lb askarel) Total Askarel Dry Gas Oil 22.2 , 44% 30% 3% 23% The above demand has been converted_to. equivalent askarel volume per"transT6rmer. Dry types represent about 33 per cent of this market, while oil is about 23 percent. The impact of gas filled units on Westinghouse's production was not determined. Excluding Westinghouse, the gas filled transformer represents about 3 percent of substation demand. Primary Substations represent about 9 percent of our sales, with outdoor oil units dWiinating this marketplace. Askarel's market share is less than 5 percent, with those units on askarel being installed indoors, close to a building or in a hazardous outside environment where safety from fire is re quired. Network Transformers -- Network demand is about 18 percent 20 percent, with oil representing the remaining 80 percent. ThecTry^type network market appears negligible at present. They are popular for indoor upper floor applications. Our share is based on historical AC network transformer surveys by Edison Electrical Institure. EEI annually, for the period 1944 to 1961, reported installed network transformers by the utilities as follows: Period % Askarel Period % Askarel 1944-46 1947-49 1950-52 6. 2 10. 4 12. 9 1953-55 1959-61 1968 (est. ) 18. 7 17. 0 20. 0 Currently, manufacturers report askarel-network transformer production running from 15 to 60 percent of total production. Westinghouse and General Electric, the market leaders, report 17% and 33% respectively. -24- Others - All other transformer types represent an estimated 14 percent of the askarel demand. Within this category are: Rectifier Transformers - Annual consumption of askarel in rectifier units exceeds 600, 000 pounds based on General Electric, Pittsfield production estimates. The market is 25 percent askarel and 75 percent oil. Furnace Transformers - Askarel1 s participation appears less than 100,000 pounds annually, based on General Electric, Pittsfield production estimates. Askarel's sales are confined to the small induction foundry furnaces with only 2 percent of the large arc furnace demand. Askarel shares the induction furnace market with dry type and 98 percent of the arc furnaces units are oil equipped. Precipitation Transformers - A 300, 000 pound annual askarel demand based on General Electric and Westinghouse, Sharon input. Askarel shares this market about 50:50 with oil. Transportation Transformers - None in 1969. However, askarel demand averages yearly 100, 000 pounds with equal share for oil filled units. Growth rates of the above transformers by type could not be reliably assessed from manufacturers' input. The only area that showed promise of demand growth above the standard industry "6 to 7 percent per year" rate was transportation transformers. General Electric indicated the demand for these units will increase as new rapid transit systems are constructed. The 100 Mpound askarel demand reflects this market annually over the next three-to-five year period. This should increase to the levels of rectifier demand (600M) in the late '70's if the weight of askarel does not rule in favor of oil. General Electric indicates this may be the case, as askarel increases the cost per car by $1000 to $1500 based on a one dollar per pound value on weight per car. One transformer per car is required at 200 to 300 gallons per unit. -25- 0056113 Table IV summarizes askarel's total estimated market share by type and total for those markets in which we now participate. jDur market share does not exceed 16 percent. Oil, with at least a 78 percent share, doxmnate s all our markets, except secondary substations andour mini-market, rectifier transformers. Dry type transformers represent 6 percent or less of our total market, however, are quite heavy in our major market place secondary substations. Table IV also indicates the importance of each major end market; commercial, industrial, utility and defense, to our business. This is discussed in the next section. F. Demand by End Market The industrial market represents about 60 percent of our askarel fluids' end market, while the commercial market has about 12 percent and the utilities 28 percent. This section will discuss how each askarel transformer type is used in the industrial, utility, and commercial markets and the importance of particular end market segments (i. e. primary metals, generating plants, etc. ) to our business. The why's of selection is discussed under the Attitudes and Selection Criteria section. Industrial Use The industrial market includes all manufacturing locations separate from institutions, offices, shopping centers, etc. , which are considered the Commercial Market. The typical industrial plant is characterized by heavy, widely varying electrical needs. Different types of transformers are required to selectively meet these demands. Industrial plants are served by the utility at voltages up to 69 KV. This voltage is then stepped-down by primary sub stations and secondary substations to utilization voltages. The secondary unit normally feeds the plant motors, fans, etc., at 480/600 volts, while the primary will provide direct supply to the higher voltage needs of large motors, strip mill drives, etc. , and to other secondary units in plants having widely dispersed load concentrations (steel mills, aluminum mills and chemical plants). -26- The bulk of all volume potential to the industrial market appears concentrated in primary, secondary, rectifier and furnace type transformers (Table IV). All of these markets, except two, are dominated by oil because units are: 1. Outside (most primary) 2. High dielectric liquid volume (Primary and furnace transformer volumes reach 5, 000 to 10, 000 gallons per unit. ) 3. High voltage requirements (Primary, rectifier and arc furnace reach up to 69 KV. ) The above factors have ruled out askarel consideration except for those units installed indoors where National Electrical Codes require askarel or vaulting. It appears as though some rectifier and large furnace units are installed indoors, however, General Electric, Pittsfield stated, "Oil is used in large rectifier and furnace units indoors because the cost of a vault overshadows the $10, 000 to $14, 000 extra for askarel fluid in these units. M In depth industrial feedback on the subject of rectifier, furnace, precipitation, and primary substations for askarel versus oil was not obtained. General Motors did note that unlike the rest of the industry they have ordered several large askarel equipped arc furnace units; however, delays for "non-standard'1 materials and leakage problems in gaskets and bushings have been problems. They would like to continue to specify askarel, however, economically it is questionable. From Table IV the bulk of our business in industry (totalling 7.8Rof 9.9 M pounds) is in secondary unit substations. Our market share in this specific market is estimated over SO percent of the available business, with oil and dry types sharing the remainder. The impact of the dry type unit in industry does not appear to be as significant as in the commercial-utility markets, which will be discussed later. Gas filled units find a major demand in industry, primarily at General Motors, who continue to pioneer and promote new gas designs. -27- 0i`U5 The industrial market for askarel, both in present sales and potential, may be more widely dispersed than we anticipated. Complete by-industry totals for askarel sub stations sales could be obtained only from ITE, who represents about 20 percent of askarel's blended consumption to this market. This data, plus General Electric, Rome's input of the total available substation market gives a useful picture of our key industrial markets. This data is summarized in Table V. Our key markets are primary metals, automotive and rchemicals, which together account for about 50 percent of 'all askarel substations. No single market appears to dictate our business, however, automotive is~the largest single J consumer and they prefer askarel over all other types. Calls on General Motors, Ford, and Chrysler confirmed this fact. The remaining 50 percent of our business appears widely dispersed in the paper, petroleum, stone-clay-glass, aviation, electronics, rubber, drug, and food industries. Major unsold potentials exist in the paper, textiles, and petroleum markets, each having a smaller proportion of askarel units compared to all units. The petroleum industry characteristically favors oil-filled units, while A & E firms indicated the paper industry trend is to "clean room" environments that house all electrical equipment. In these cases, dry type units can be used because of the clean environment. Factors affecting askarel's selection, including the transformer environment, are discussed under "Attitudes and Selection Criteria." Utility and Commercial Use Commercial buildings, as the expression is used, includes all buildings not involved in manufacturing or processing a product. Included are office buildings, hotels, colleges, hospitals, shops, shopping centers, and similar non-manufacturing facilities. Electric distribution service to this market involves systems with unique problems. However, power service normally comes from the utility owned network or pad-mounted trans former. The network transformer commonly serves the down town area from a "grid" of units, employed in over 300 of our large cities. The network serves several customers and is traditionally vaulted, cither under ground beneath street or sidewalk. Large demands ( >750 KVA) often justify one or two -2 8- 0056116 "spot" network units per customer. If the load and building is large, several units may be located in the basement and on upper floors. These are utility owned. If the load is large and the utility rate structure permits, the customer can purchase the transformer, pay reduced rates, and design his distribution on the load center (secondary unit substation) principle, much as the industrial plant. These units then are installed indoors, without vaults, and are either of askarel or dry type design. Other transformer requirements in the commercial building are standard, smaller dry type units (500 KVA or below) used for stepping down 480 to 600 volts from the larger net work or substation unit to 120 volts. The latter voltage serves incandescent lighting and small electrical appliance needs. The 480/120 volt dry type units are found on each floor of a multi-story building and are usually mounted on the floor, wall or ceiling, or in distribution closets for the 500 KVA size unit. Generating Plants About 5 percent of the installed capacity (KW) of a power generating plant is required for internal power within the plant to operate fans, motors, lights, etc. Indoor secondary unit substations meet this need by stepping down generated voltages of four to 13. 8 KV voltages. Transformers for use within the generating plant are usually referred to as generating "auxiliary" transformers. Auxiliary power requirements are a necessary part of any power generating plant, irrespective of the generating source (hydro, pumped storage, fossil, or nuclear steam, in ternal combustion or gas turbine). Generally about one percent of a generator's capacity output will approximate the substation KVA requirement. This equates to throe to six substations per generating plant. From Table IV the utility market for askarel represents pre cipitation transformers and secondary substations for generating plants, all network transformer sales for commercial use, and a less than five percent share of the utility-owned pole and padmounted units for commercial use. These units are normally utility owned, although they serve the commercial customer. -29- Our present established position in this market is in network transformers (excluding low volume precipitation transformers). Our market share of 2n pe n|~lTMl g; not appear stable. A's displayed earlier on page 24 , EEI reports through 1961 indicated askarel share at 17 percent. Contacts with utilities indicate that during recent years, because of larger multi-story buildings, inside basement network vaults and upper floor networks are becoming increasingly popular. Unfortunately, dry types for upper floor service are preferred (weight and askarel1 ^installation askarel must be vaulted anyway (fear of explosion and fumes). Giants like Public Service Gas & Electric and Consolidated Edison and an industry leader, Virginia Power and Electric plus two others of twelve utilities responding indicated a deqline in askarel's share of their installed network trans formers^ Two other utilities reported status-quo conditions while three indicated gains in askarel's share. Table VI summarizes the findings for these specific utilities who represented 52 percent of the network market in 1953-55, and an estimated 68 percent in 1968. An actual decline in our share since the last EEI report of 17 percent (See page 24) appears questionable as manu facturers indicate 1968 production at about 20 percent askarel. This would indicate other large utilities have favored the askarel unit. At best, it appears, however, we will only maintain our current market position in a cloud of unfavoritism In the commercial market our established position is in the secondary sub station unit purchased by the commercial customer. Here dry type competition appears quite strong. According to manufacturing input, more dry type 'than askarel units are sold to this market. ITE sales records reflect in 1968, 78 askarel units versus 102 dry types -- a ratio of 1 to 1. 3. Similarly, Power Magazine's annual Energy Systems Design Survey (October, 1969) reports every year since I960 that of between 50 to 100 firms surveyed in the small industrial - large commercial class, dry type is definitely more popular. A trend couldn't be established from their 30- 0056110 LEXOLDMONOQ6531 data. However, of the total available secondary substation market quoted on by General Electric the dry type share of available business had increased 4-7 percent since 1964-65. If we include dry type units sold by Zinsco, Sorgel and j Federal Pacific Electric, a realistic ratio of askarel versus dry units sold to the commercial market would appear to' approach 1 to 2, with the trend favoring dry type. This indicates that at least 3 Mpounds of available askarel business is held by dry type, indoor substation units. Each utility has a series of rate schedules for supplying power to customers under various conditions. One of the bases for establishing rates is the transformer or substation ownership. The large user often finds it necessary or economical to purchase power at higher voltage, such as 4.16 or 13. 8 KV. The customer may then elect to furnish his transformers or substations to convert this higher voltage to the utilization voltage. On purchasing the transformer he shares the utility's fixed charge burden and receives rate compensation. This concept is applicable in theory to large loads (i. e. shopping centers, universities, hospitals), and to tall high-rise buildings (i.e. offices, apartments, and hotels) outside the downtown metropolitan area. Power Magazine surveys indicate that between sixty and seventy percent of all smaller customers (5MW and below) distribute below 600 volts, and between twenty and thirty percent distribute between 4.16 to 13. 8 KV. The trend is towards higher I voltage service to satisfy continued growth in large load j buildings. Thus the commercial indoor substation I concept will grow in popularity. IV. ORGANIZATION AND DECISIONS BY THE TRANSFORMER MARKET A. Industrial The individual plant engineer appears to have a questionable influence on transformer selection for new plants. However, his role does become significant for replacement units and new transformers for expansions to existing facilities. Thp rentral enginorrirrp; or "corporate staff" group of the large corporation is perhaps the singl^most important influence on transformer specifications. This central 0056X19 LEXOLDMONOQ6532 group, headed by the Chief Engineer and composed of representatives from each division evolve corporate "standards" that include transformer guidelines. Corporate staff design engineering personnel normally adhere to the "standards. " Thus the large industrial firm has little dependence upon the outside consultant or A & E to select his transformer. The small industrial firm, however, is unlike the large corporation. He lacks internal engineering, and his projects do not warrant large (i. e., Bechtel, Sverdrup & Parcel) A & E contracts. Thus^ his decision is influenced by the consultant who engineers his new project. Normally, their jobs are not large millionsof-dollars repeat projects, and "standard" practices do not prevail. He is more dollar conscious and the consultant will choose with less regard for total longrange performance. Each large industrial firm contacted appeared to have one or two key dominating decision makers at the corporate and divisional level, who are recognized both within the corporation and outside by the transformer manufacturer as the prime contact on transformer specifications and corpoate policy; for example: General Motors Detroit, Michigan Howard A. Baldwin, V.P. Eng. Jerry Stein, Sr. Engr. Chev. Div. Ford Motor Co. Detroit, Michigan Mike Yugovich, Chief Elec. Eng. U.S, Steel Corp. Pittsburgh, Pa. Roy L. Leventry, Chairman, Central Maintenance Harry Frostick, Mgr. Design Engr Minnesota Mining & Mfg. John Devich, Mgr. Elec. Eng. Little need was found for Monsanto advertising to the large industrial-firm. Normally, these engineers are older, experienced men who have standard practices -32- 0056120 years old. They rely on mein lx; rship in tin; Institute of Electrical and Electronic Engineers (IEEE) and technical seminars as sponsored by McGraw-Hill (Power Magazine) for new transformer technology trends, etc. This situation was also found at four A & E firms contacted. General Motors, Ford and U.S. Steel did appreciate prior technical sessions by Monsanto. Generally, they recommended periodic one to two year visits with key corporate engineers and with plant engineers for technical service support on: Askarel reclamation, handling, toxicity, etc. B. Utility and Commercial Of 3600 utilities in the United States, less than 500 control about 80 percent of all customers and of all ' generating capacity. These 500 are the private, investor owned utilities v/ho have the network systems and serve the major metropolitan cities with generating and distribution power to the commercial and industrial customer. Of the remaining 3100 utilities, 3050 are the smaller public and cooperatives owned by municipalities and private groups respectively. They have little effect on askarel transformer demand. The other 50 utilities are Federal utilities, like Bonneville and TV A, who supply wholesale generated power (13 percent of the total U.S. demand) to isolated large power industries such as aluminum plants, to government users like the Atomic Energy Commission and the public utilities. These utilities have little impact on either industrial or commercial transformer selections. The transformer decisions for distribution, small power transformers in the investor-owned utility rests with a selected few individuals in each utility. The Group having primary responsibility is - Distribution Engineering. My contacts with the Manager or Superintendent of this group indicated they were principle decision makers with respon sibility for the planning and performance of all distribution and small power transformers in their service area. Responsibility for large power, including ''auxiliary" generating plant transformer requirements, rests with the Generating and Transmission Group. Generating and Transmission -33- OOSfel*1 LEXOLDMONOQ6534 was always found as a separate function from Distribution, however, there is much inter-communication between groups on transformer performance, preferred suppliers, etc. At both Consolidated Edison, New York and Commonwealth Edison, Chicago, the heads of both groups were familiar with the performance records of askarel units in distribution and generating plant applications. The utility has a major role in the selection of askarel transformers. He governs the choice of transformers for his metropolitan area (networks and padmounts), for his generating plants (substations), and the larger utilities maintain much influence over the commercial market whether the customer purchases the transformer or not. Many customers are reluctant to purchase transformer types that are not favored by the utility. Drawings and specifications on large commercial buildings are usually submitted to the utility engineering group by the consultant for review and approval. Drawings include the indoor electrical "service entrance" design, electrical equipment and transformers. Thus the utilities have an impact on the consultants' selection and viewpoint. Of eleven utilities responding, seven indicated they "own and maintain" the majoriTy of their n etwbrk~arfd padmount transformers, and they "control" the commercial type of substation units. Included are some of our largest utilities; Consolidated Edison, New York Commonwealth Edison, Chicago Public Service Electric & Gas, Newark Virginia Electric & Power, Richmond Baltimore Gas & Electric The smaller utility relies heavily on the A & E and consultant for transformer requirements. They simply do not have the engineering staff nor demand to design and engineer their installations. The utility, like industry, relies heavily on their industry association, Edison Electrical Institute (EEI) for new technology and industry news. Little evidence was found during utility contacts that would draw decision results from advertising our product. The engineers here are, like the A & E and industry, experienced with firm prejudices. 34- If product experience has been good the utility will continue their support. Considerable evidence supporting the need for increased Monsanto technical service was uncovered. This is discussed under Attitudes and beiecTlon~CriTeria. C. A &t E versus Consulting Engineer It is important to note here that the A E normally designs and constructs the utility generating plants, while the consultant (consulting engineer) is the engineering source for commercial jobs. A & E's are large, engineering firms like Bechtel, K. M. Parsons, Stone-Webster, etc. The largest are capable of designing both industrial and utility generating projects. Whereas some are specialists; i. e. Stone-Webster, New York handles generating plants; Rust Engineering, Alabama only industrial projects. The largest are members of The National Constructors Association (NCA) -- see bibliography. Conversely, the consulting engineers are independent contractors who manage their own businesses. Firms vary from a small operation of a single professional engineer to several hundred engineers and architects. Over 2000 key consulting engineers are members of the Consulting Engineers Council - - see bibliography. This council nee through the advertising media due to this enormous audience. The Executive ' Secretary of the Consulting Engineers Council agreed to /support and assist efforts by Monsanto in a survey of this group regarding their transformer preferences and decision-making influence. D. The Insurance Company and Electrical Code Provisions The National Electrical Code Committee membership consists of both mutual and underwriting insuring companies. The electrical equipment manufacturers, industry associations (i. e., NEMA), the utilities, the contractors and the International Brotherhood of Electrical Workers Union representatives. The code was last revised September 1968 and is revised every three years. The code contains basic minimum provisions considered necessary for safety within public and private buildings and lots, and industrial substations. These provisions are accepted minimum standards for insurance inspectors and all government installations. The code doesn't -3500>6i23 LEXOLDMON006536 cover mines, ships, railway cars, aircraft, automotive equipment, or equipment of a railroad or utility. However, these groups, as well as most state codes, consider these provisions as their minimum standards. Deviations from code provisions would occur outside the large metropolitan area in smaller cities and towns without municipal electrical inspectors, who interpret the electrical code for new installations. However, industrial plants in general follow the code but are normally not "bothered" by electrical inspectors. In both these exceptions, the insuring agent would be the governing factor to insure code safety standards are met. In the infrequent case where a conflict in code interpretation exists between the municipal (or state) inspecting authority and the insuring company, the inspecting authority governs. Fire insurance bodies appear not to recommend Askarel over dry types or oil filled. They only require adherence to the electrical codes for the standard insurance rate. Fire insurance premiums are approved only on meeting code requirements and are based on plant value and the class of industry insured (i. e., textile, automotive). Transformer insurance can be of two types, fire insurance (mutual or underwriting companies) or electrical breakdown insurance (above companies or independent companies). Fire insurance covers all elements except damage by electrical breakdown. They insure all property except the faulty piece of electrical equipment. A separate electrical breakdown policy is required to cover self damaged electrical equipment. According to Factory Mutual, electrical breakdown policy premium rates are not different for oil, dry, or Askarel units as long as the code is met. If it isn't, they won't insure the equipment. Most installations do not have breakdown insurance because of its expense. ATTITUDES AND SELECTION CRITERIA | Askarel's image with the utilities contacted in this study p, was entirely unsatisfactory^ Many have reluctantly used I nd lived with askarel fluid for years because they have had little choice when safety from fires is required. -36- 005612* Askarel's basic problem is one of toxicity and handling. Workers do~not like the fluid because it irritates the' skin and residual Aroclor 1260 is sticky and difficult to remove from spills, leaks and inside arced transformers. This situation is felt in the marketplace. Consolidated Edison, who controls about 45 percent of The entire network transformer market, has chosen to absolutely minimize askarel in either 1) networks outside or inside buildings, 2) substatioiTumts for generating plants,due to a record"oT several law suits from explosions "tir- askarel units. In 6he~'case~^wb'pebpie died "irPthe HC1 fumes, 11 and in the other two cases fumes caused adverse feedback from the building occupants. Union Electric and Virginia Electric and Power Company began phasing askarel out of their network systsm following similar conditions of fumes, resulting from an explosion that created adverse publicity. ^ This situation is detrimental to the growth of not only our utility business, but our commercial business due to the utilities* strong role in commercial transformer decisions. , Without regard to the utilities' prejudice for or against any particular dielectric medium, Table VII is a general check list prepared on the order of preference "generally accepted" for selecting transformers of the dry, gas-filled, oil-filled, and askarel type. This check list represents eleven of perhaps the most critical characteristics weighed for transformer selection The order of preference is a published checklist prepared and published by Allis-Chalmers in 1955. Adjustments were made based on current data and price quotes received from the manufacturers for 500 KVA and 1500 KVA units (Table VIII). Adjust ments in items #7 through #11 were made subjectively based on contacts during this study. These adjust ments are noted parenthetically beside the old "order of preference. " Askarel indoor substations have advantages over our prime competitor dry-type in; Lower cost of losses, height, safety, noise and general reliability. "WS're essentially equal in initial cost (however the smaller -37- 0056125 sizes* 500KVA, are less expensive), impulse strength, installation costs and maintenance frequency. Disad vantages appear for the askarel units in weight, floor area, overload capacity (under forced cooling), and location versatility. Two of these conditions of equality or disadvantage appear to have developed in design since 1955; reduced size and impulse strength. Equality of installation costs and maintenance problems are subjective and will be discussed later. In this light, our askarel advertising theme centers on nine of these eleven selection criteria as askarel advantages -~ cost of losses, noise, safety, reliability, maintenance, location versatility, installation costs and impulse strength. The latter four characteristics may be very questionable to the experienced transformer specifier at the utility and in industry. Initial Costs - Total initial costs were the most often mentioned characteristic by the utility. About the same for askarel versus dry type at 1500 KVA. However, price quotes on smaller units favor dry type. The ratio is 1. 27 to 1. 09, askarel to dry for a 500 KVA substation versus 1. 27 to 1. 27 for a 1500 KVA unit. The smaller 500 KVA units are popular upper floor transformers in high rises. Cost of Losses - Not cited by either the utilities, nor during industrial or A&E calls. Impulse Strength Important, especially in industry where loads can be severe and units are often subjected to large switching surges. A key current strength for askarel. Not emphasized by utilities. Noise - Important, but indoor substation units are normally in enclosed service areas. Forced Cooling - The rated capacity increase of the dry type unit exceeds liquid filled by over 2:1 with fans. This fact gives question to the overload capacity advantage of an askarel unit. -38- 0056126 Installation Costs - An extremely important advantage over oil units that must be vaulted for inside use. However Allis' rating favoring askarel is questionable as: 1) Venting - Askarel units, reference Article 450, National Electrical Code, requires outside venting. Utilities feel this creates an expensive requirement, particularly in tall buildings with units on several floors. Commonwealth Edison in Chicago noted that in the past several years the city has begun to enforce this code, and as a result installation costs inhibit askarels usage versus dry for highrise apartments, offices, etc. 2) Weight - The heavier askarel transformer is disfavored for upper floor usage and can become a problem in building design (effects location versatility). In addition, handling of the unit by the utility is particularly difficult because of its added weight. Location Versatility - Here askarel loses some industrial favor due to weight and fear of fumes and askarel leaks. Units indoors are normally installed either in penthouses (adjacent to manufacturing buildings or on roof top), on the manufacturing floor, on balconies or on overhead trusses, as close to the load as possible. Many plants with contaminated environments (aluminum, steel, chemical, etc. ) favor askarel as open dry type is , subject to contamination. Strangely enough, the paper and stone-clay-glass industries are in contaminated environ ments. However, our market share reported earlier in these industries gives question to our degree of participation. Some evidence was found that "clean room" environments are becoming popular to overcome the contaminated environment. -397 - 00561 127 LEXOLDMON006540 General Safety - Our record of safety, overall, appears to be askarel's primary base of existance. This factor seems to have g re atly inhibite d the use of gas fille d units indoQj: a.s faults can create~gas pressure sufficient to blow the unit. Reliability & Maintenance - The most often mentioned selection criteria by industry. The reason why askarel lias~given generally satisfactory service to Ford, Chrysler, U.S. Steel, and the Chevrolet Division of General Motors, they report "No large problems * been using it for years. " However, they did emphasize two significant dislikes similar to the utilities: 1) Frequent leaks due to faulty gaskets and bushings. Sticky 1260 residue and fumes irritating to personnel. 2) Internal corrosion problems on copper leads and Lank interior. The wafer auuuiKulation can not be tapped off the bottom drain valve as in an oil unit. ASKAREL MARKET OUTLOOK A. Askarel Seasonality Eleven and one-half years (January 1957 through July 1969) of monthly transformer pound sales were analyzed by the Management Information Systems Department (MISD) for monthly seasonality. Our monthly sales show excellent stability, indicating that our monthly sales distribution can be reliably predicted based on history, barring effects from uncontrollable variables like the strikes we are now experiencing. The seasonal factors developed by MISD for each month of 1969 and for the first seven months of 1970 are noted on Table IX, along with actual and predicted sales. The "seasonal factor" simply states that if you divide the total anticipated yearly sales by twelve and multiply by the monthly seasonal factor, the sales for that month can be "predicted" based on history, with recent years monthly performance weighted heaviest. Reliable monthly seasonal factors require -40- that historical monthly sales be adjusted for uncontrollable variables (strikes, product availability etc;) the above procedure is the basis now used to determine our monthly transformer fluids budget (Shiskin). Thus we haye verified the reliability of Shiskin, More important, however, after several months' experience we can use this as one measure to anticipate our final yearly sales. Note that the ''predicted values" were calculated using 6 months 1969 history and the seasonal factors developed from 11.0 years experience. The predicted values and actual values for January-July 1969 coincided at a 16. 0M lb. annual demand. Actual sales were closely predicted for August and September, however July and October exceeded expectations. Seasonality was also checked for five and one-half years (January 1964 to July 1969) of historical monthly sales for key transformer customers, including: Allis Chalmers, General Electric Pittsfield and Rome, ITE, and Westinghouse (Sharon and South Boston together). Although stability was found for our total sales, stability of quality enough to "predict" monthly performance by customer does not exist. Graphs displaying the customers' monthly sales history (1964 - 1968) compared to our relative askarel performance were discussed with the Marketing Manager of each key customer contacted. Results of these discussions indicated: 1. Our quarterly sales cycle each year is dictated by those transformer plants producing primarily secondary unit substation transformers for the industrial market. Allis Chalmers and ITE sales best "set our pattern. " Usually Aroclor sales to these companies parallel our seasonal performance. General Electric Rome was an exception to this rule in '67 and '69, due to abnormal askarel unit production cycles. 2. Total primary and secondary substation transformer shipments generally follow industrial construction activity (often low first quarter - high fourth quarter). Unfortunately the manufacturers cannot predict the magnitude of this change nor its impact on askarel specifically. Reason -- askarels small significance to total substation demand; the impact of large contracts, -41- and production scheduling of secondary units that is tied to switchgear production capacity (ITE and Allis specifically). 3. Manufacturers heavy in nonsubstation askarel trans formers, i.e. General Electric, Pittsfield, Wagner and Moloney do not parallel substation manufactuers cycles. This is a heavy utility market (network transformers) and production is spaced more evenly throughout the year. Quarterly Askarel Demand - Annual Forecast Model In accordance with substation manufacturers observations, our total askarel sales generally follows industrial con struction activity. Figure II, with supporting data in Appendix D, includes a display of quarterly industrial construction vs. askarel sales for the period 1964-1968. All that can be said is our demand often rises and falls during coincident periods with construction activity. This rela tionship isn't reliable for anticipating demand. Other "cyclic" relationships to our sales were investigated for: 1. Electrical Energy Demand (Kwhr). 2. Capital Expenditures on New Plants and Equipment ($). 3. Small Power Transformer Sales ($). 4. Transformer Shipments, >501 KVA (units and KVA). 5. Transformer Orders, 7501 KVA (units and KVA). Transformer Shipments and Orders, >501 KVA, in units are shown on Figure II. Cyclic relationships were not found between askarel and energy demand, capital expenditures, nor transformer shipments. However, useable correlation appears to exist between quarterl^_askarel sales and both Small Power Transformer Sales ($M) and Transformer Orders, >501 KVA (units). Regression analysis indicated that 60-70% of our quarterly sales variation is explained by askarel sales lagging by 4 quarters (12 months). -42- 0056130 LEXOLDMON006544 Figure ill was thus developed to anticipate yearly askarel demand, based on transformer orders. Results for the period 1964 through 1969e with forecast 1970 are shown as follows: %% Askarel Annual Annual Equivalent Change Actual Change 1964 1965 1966 1967 1968 1969e 19 7 0f 13. 0 13. 5 13. 7 18. 9 15. 3 13. 2 -- 12.0 4 15. 8 32 2 16. 7 5 30 20. 0 21 -19 18. 7 -7 -14 16. 0* -14 16-16. 8* 0 to 5% Ignores strike impact The 1970 forecast is based on orders through three quarters of 1969. Results indicate that unless orders for fourth quarter of 1969 are unexpectedly high (>2500 units), we can expect sales equivalent to, or 5 percent above, a 16 KT pounds rate. Fourth quarter 1969 industry orders will be available from EEI in early January 1969. Ten year historical transformer askarel sales were analyzed by MISD against other indicators in an attempt to find a good forecastable correlation which does parallel our sales. Rather than depend on quarterly data, these indicators were annual values. Indicators evaluated were selected measures of the economy, construction, trans former shipments and sales and energy consumption. They included: - New industrial construction ($) - Total generating capacity (KW) - Industrial use of Electrical Energy (KWHR) - Power and Distribution Transformer Sales ($) -Power Transformer Shipments, KVA and Units for 501-10, 000 KVA sizes and all Sizes Greater than 500 KVA - New Industrial Construction ($) - Network Transformer Sales ($) - Gross National Product ($) - Durable Goods ($) - Utility Capital Spending ($) - Electric Power Consumption Kwhr - Utility Capital Spending on Distribution Equipment ($) - National Defense Expenditures ($) # -44- 0056132 -- ~n ET Distribution Range of 9 5% of all Quarterly Sales 1964-68 -45- J tf.l'K O O LEXOLDMONOQ6546 None of the above measures were able, historically, to anticipate our yearly fluctuation in sales. This wasn't totally unexpected* however, as all manufacturers indicated that they could not reliably predict yearly industry or company transformer sales, specifically unit substations and network sales. Although none of these measures, except the Quarterly Transformer Orders Forecast Model developed earlier, were able to correctly identify yearly sales fluctuations, several measures when regressed did approximate our historical sales with a satisfactory degree of accuracy. These measures were Utility Capital Expenditures for Electrical Distribution Equipment and Power and Distribution Transformer Shipments. Results based on a nine-year period* 1959-1968, indicated that askarel sales were historically explained with 90 percent confidence at + 2.5M pounds per year. Forecast confidence however assumes: 1) Historical progress continues without major changes in Market share and growth. E) The measure can be reliably forecast. The Department of Commerce, Bureau of Census, provides the industry totals on Power and Distribution Transformers Shipments. The department nor the industry provides forecasted transformer shipments beyond one year. Thus the measure, at present, cannot be used until the Department of Commerce initiates long-range forecasts in their annual "Outlook" issue. This step is doubtful in the foreseeable future. Utility Capital Expenditures are projected annually by Electrical World Magazine. They are considered a reliable primary source of forecasted energy and capital expenditure requirements by industry experts. Historical correlation results with the linear equations are given in Table X for both power and distribution transformer shipments and utility capital expenditures for distribution equipment. The 1975 trend value for askarel sales is 33. 6 + 2. 6 M pounds, or a range of 31 to 35. Z M pounds. This indicates an average annual growth rate for / -46- 0056134 the period 1968 to 1975 of between 7. 5 and 9. 5 percent per year. This range is consistent with industry's common denominator for transformer growth -- generating capacity, which according to Electrical World is projected to increase during the period 1968 to 1975 by 8. 40 per cent per year from a 6.1 percent per year prior ten-year history. Askarel's lower rate projection, 7. 5 percent per year, also parallels that found by semi-log trend analysis (ref: 1979 Forecasts For Long Range Planning, Aug. '69, C. N. Caputo; P. D. Craska). However, as noted earlier, this anticipated growth rate range assumes Btatic market share and this does not appear to reflect askarel's position. Several factors indicate we are now below market growth and will continue to grow at a slower rate in the future: 1) Network transformer market share; although approximately 20 percent, will at best remain static with increased use of oil-filled and dry-type. 2) We participate heavily in the industrial market, which during the past ten years has grown only at a rate of energy consumption parallel to that of our askarel sales (5 percent per year). Conversely, the commercial market, also a consumer of askarel transforme rs , has increased twice this rate and will continue at a faster pace through 1975. Market 1968 Value (B Kw Hr) Growth Rate 1960-68 196 9-75 Commercial Industrial 264. 2 517. 3 11% 5 7. 6% 6.1 3) Dry type transformers are preferred over askarel for commercial secondary substations and this trend continues. This discussion assumes the askarel transformer continues to participate in the industrial market without a significant loss in position. On this basis, and a decline in 1969's sales, it does not seem that prospects for 1975 will approach 30 M lb, nor will projected growth continue at our ten-year historical rate of 5 percent. Our trend appears leveling off with sales progress through 1975~not~e>tpeeted to appreciably exceed our 1967-68 level of 20,1 and 18. I M pounds respectively. Note Figure IV. ~~ ---------------- -47- - 0056135 C. New Market Opportunities 1. Residential Market - According to Electrical World the residential market growth for transformers currently exceeds, and will continue to outpace both commercial and industrial growth rates through 1975 and 1985 based on projected energy requirements. Market 1968 Value B KwHr Annual Growth 1969-75 Total Growth 1975-80 Industrial Commercial Residential 517. 3 264.2 366.2 6.1% 7.6% 8.6% 98% 91% 112% Currently we do not participate in this market except perhaps secondary substations in high rise apartments. A key concept to serve the residential demand has been the development of the unit residential trans former (URT). The URT replaces the larger padmount units and the unsightly pole top unit with small compact units located underground, on a pad outside, or on the wall of the individual residence. The location of the transformer has created a major difference of opinion between utilities and between the transformer manufacturers, who must develop satisfactory designs to meet this new concept. The pad concept utilizes oil filled units. Utilities indicate underground units are either oil, or solid-epoxy filled. The residential wall unit prefers dry type technology. Several opportunities appear to exist to overcome problems that currently inhibit acceptance of the unit residential concept: - A fire resistant fluid offers safety to the outside pad, which is located close to the individual residence; - A liquid or solid unit provides freedom from contamina tion found in the dry type wall unit. - Askarel units are inherently quieter than dry type. -49- 0056137 Also, the underground unit residential transformer has suffered field problems from corrosion. Transformer tanks fabricated from mild steel have failed regardless of the protective coating. Recent field tests have included epoxy finished and entire fiber-glass tank structures. Both Allis Chalmers and General Electric expressed interest in discussing dielectric medium and corrosion-resistant transformer tank materials with Monsanto. The above areas appear to offer Monsanto an excellent chance to penetrate the residential market with askarel's safety, and quiet operation and with Monsanto plastics technology for corrosion resistant tank materials. It is important to note that WeBtinghouse, with a strong underground solid filled design does not encourage our activity in this market. Leading utilities that promote differing URT concepts include: Duke Power, Virginia Electric & Power, and Southern California Edison. Residential fluids long range market potential for the new URT concept was not assessed; however, my guesstimate is 50-100 M lb annually. Utilities indicated residential units often represented 90% of their total transformer unit demand. Cables - Industry needs appear unsatisfied in two areas: Insulations and dielectric mediums. Insulation mate rial for high temperature service (200C and above) for above ground service has created fire safety and heat dissipation problems. Several industrial cable fires have prompted FR insulation research by cable manufacturers and coatings suppliers, including DuPont. The problem is not resolved. Present cable insulation materials include butyl, polyethylene, and oilimpregnated paper, and more advanced insulations for higher voltage service. One type of power line which is installed underground utilizes mineral oil dielectric medium. Because of its low dielectric constant (2 vs. 5 for askarel), it minimizes capacitance or energy storage. This is a desirable characteristic. Also important is power factor, since energy losses where voltage is applied show up as heat. This is difficult to dissipate in a -50- 00 5.613 8 long pipe since the dielectric medium is not circulated. Increased EHV demands have stressed the efficiency of oil-filled cables. A leading A&E, Stone and Webster, reports little progress is being made on new insulating mediums. As higher dielectric strength also offers improved voltage-carrying capability, we may see justification for looking at new fluids for this area. Of course, the medium must show an improved dielectric constant over that now possessed by askarel blends. Fluorocarbon and cryogenic cooling are among possible new cable dielectric media. Flutec technology may provide an entre' here for Monsanto. 0056139 -51. LEXOLDMONOQ6552 TABLE I TRANSFORMER MANUFACTURE - ASKAREL CUSTOMERS Transformers ALLZ8 CHALMERS Pittsburgh Oadsen,Ala*(M Milwaukee GENERAL ELECTRIC Hickory#N,C.(U) Pittsfield Robs ITE MALONEY VAONER WESTINOHOUSE Athens ,0a, (U) Sharon 8o*Boston(5) Muneia (4) OTHERS not contactedC 4) Kuhlman McOrav-Edison Nlagra Standard Tranef* Hevi-Duty R*E*Uptegraf Eseo Faderal Pacific H. K. Portar Siarra Tranef, -- Market -- H ft H H Typa aa ft -DielectricMedium H 4* ft 0 H *4 u ft 0 0 H h *H 4* 0 a * 4* c *4 H H U ft* ft 0 V> u0 CL .4* ft 4* M 0 U ft O ft u o ftft 4* 0 a 4 oa oX 1 ft Hm a <r H X ft ft H o H XI o <o 4* 0 *4 fr* ft* 0 0 a h 0 ft 0 0 OS a as D M o Ou Cfi CO CO ft* 0 CL D e ftft ft ft e ft ft ft ' ft ft ft (2) ft ft ft e ft ft ft ft ft ft ft ft ft ft ft ft ft ft ft ft ft ft ft ft ft ft ft ft (3) * ft (1) ft ' ft ft ft ft ft ft ft ft ft ft ft ft ft ft a ft ft ft ft ft ft ft ft (3) u n k n o v n Askarsl typaa lncludti (1) Ractifiar and transportation* (2) Rectifier, transportation and instrument* (3) Includes ractifiar, transportation, furnace and precipitation* (4) Not contacted--data from NEMA not verified vith company* (?) Planned by 1970* 0056140 -52 LEXOLDMONOQ6553 TABLE II TRANSFORMER ASKAREL SALES (BLENDED) BY TRANSFORMER TYPE - 1968 (Millions of pounds) Transformer Type Secondary Primary Total # Total Substations-* Substations Network Other ITE 1.98 Allis 1.63 Wagner 0.10 OE,Pittsfield 2.90 GE, Rome 4.07 Westlnghouse 5.60 Maloney 0.24 Subtotal 16.52 9.5 7.8 0.5 13.9 19.5 26.7 0.1 79.0 1.92 1.14 4.07 2.63 9.76 0.16 0.10 1.18 1.44 0.33 0.06 1.002 1.90` 1.35 0.24 2.92 0.44 2.40 Total 1968 Sales 21.0 # Total Sales 59# 9# 18# 14# Includes predominately precipitation, furnace, transportation and rectifier units. Estimated. "Load Centers" -53- 005t>ii'1 LEXOLDMONOQ6554 TABLE III TYPICAL PROFITABILITY & COSTS OF ASKAREL FILLED SECONDARY SUBSTATIONS (LOAD CENTERS) KVA 500 1500 2500 KVA 500 1500 2500 COST COMPARISONS Askarel Mfg. Cost 11.8# 12.3 13.3 Allis Price Lb./ Ask. Per Lb. Tnsf. Cost $0,166 2402 $400 0.166 4113 665 0.166 5200 865 PROFITABILITY Westlnghouse Price Lb./ Ask. Per Lb, Tnsf. Cost $0,135 3000 $405 0.135 0.135 4780 6210 655 840 Total1 Transformer Cost $3722 5849 7124 - - - - -High- Low Range- - - - - ~ Sales Price^ Gross Profit i. $4640 (2) $918 20 8580-9586 2731-3737 32-39 12480-13707 5356-6583 43-48 1 t < 1 Prom Allia Chalmers input. Total cost includes estimated freight of 5# sales price. A 2500 KVA Askarel unit with fluid weighs 14 16,000 pounds. Freight charges @ 600 miles totals <$200 @ $1.24/cwt. or 1-2# of sales price. O Range for Allis and Westlnghouse quotes Monsanto 10-69 for standard 13.8 KV, 60 cycle, 65 rise unit. Note: Allis provided low quotes for these sizes. -54 0056142 LEXOLDMON006555 TABLE IV ESTIMATED ASKAREL MARKET SHARE BY TYPE AND PARTICIPATING END MARKET DISTRIBUTION (Million pounds Askarel and % Units) Type Network % Vol. Secondary Substations Vol. Dielectric Ask OH Dry Gas 20 80 2.9 14.6 44 23 30 3 9.8 5.0 6.7 0.6 Primary Substations % Vol. 5 95 1.4 29 Precipitation % 50 50 Vol 0.3 0.3 Rectifier % Vol. 25 75 0.6 2 Furnace ft Vol. 2 96 -- 2 <0.1 3 -<0. 1 - Others* % Vol. <5 >94 1.4 >28 - <1 -- Total % Vol. <16 >78 <6 <1 16.5 >81 6.7 0.6 Askarel Only Industrial Commercial Utility 100 2.9 80 15 5 7.8 1.5 5 90 1.3 60 0.15 100 0.6 100 <0.1 60 9.9 10 0.1 40 0.15 50 50 0.4 1.0 12 28 1.9 4.9 Total 100 2.9 100 9.8 100 1.4 100 0.30 100 0.6 100 <0.1 100 1.4 100 16.5 My estimate-includes commercial pad-mounts, pole and miscellaneous. Excludes impact of small specialty (dry types) and large generatingtransmission units (oil filled). -55 ' 005bl*3 LEXOLDMONOQ6556 TABLE V. 1968 INDUSTRIAL MARKET DEMAND SUBSTATION TYPE TRANSFORMERS Number of Units Industry Automotive Primary Metals (Steel) (Aluminum and non-ferrous) Chemicals Paper Petroleum Textile Stone, Clay & Glass Mining Others Industry1 % Total Units 5% 15 (7) (8) 11 10 10 4 3 2 25 Askarel ^ % Total Units 21% 14 (8) (6) 14 3 3 <1 45 Totals 100% 100% 1. Based on 1968 Total Known Available Market of 3300 Units General Electric, Rome, Georgia 2. Based on 1968 Total Askarel Transformer Unit Sales of 434 Units - ITE, Philadelphia, Pennsylvania -56- 0056144 LEXOLDMONOQ6557 TABLE VI SELECTED UTILITY NETWORKS (>20, 000 KVA CAPACITY) Utility 19682 Total Units % Askarel -551 1953 Total Units % Askarel Baltimore Gas & Electric 360 Boston Edison 471 Virginia Electric and Power 435 Con. Edison, N. Y. 18, 000 Louisville Gas & Electric 250 Ohio Edison 175 Ohio Power 150 67 20 65-75 <1 100 <1 3 245 284 178 9541 117 1244 1454 47 15 91 8 75 24 04 Cincinnati Gas & Electric 307 Kansas City Power & Light 249 Public Service Gas & Electric 4500 Commonwealth Edison 1800 Union Electric 4503 Total % Total Net- work market 27 , 147 68% 0 100 ~1 89 < 50 256 0 111 100 2359 L 972 271 14, 603 51. 5% 83 69 1 - Edison Electrical Institute 2 - D. R. Pogue Survey 3-D. R. Pogue Estimate 4 - 1956-58 Data -57- 00561*5 LEXOLDMON006558 TABLE VII General Check List for Selection of Load Center Unit Substation Transformers Characteristies 1. Initial Cost Important Influences () AfrE Industry Utility *-* Oil Filled Transformer Type Askarel Open Sealed Filled Dry Type Dry Type 1 2 23 2. Annual Cost of Losses --- 1 12 3 3. Physical Speci- fications a) Weight *-* 2 .. X) 1 3 (4) b) Floor Area - - - . 1 (2) Tv 2) 2 U> --'2____--^ C_. i c) Height -- 12 2 4. Impulse & Surge Strength (KV-Bil) * * 1 1 (2) 2 2 (1) 5. Audio Noise - - * 1 12 2 6. Forced Air Cooling - 2 21 3 7. Installation Costs - - * 4 2 0) 3 1 B. Location Versatility * 9. General Safety * - * * 4 4 32 23 1 (2) 1 (2) 10. General Reli- ability ** " 1 1 z 1 11. Maintenance _ 2 2 (3) 3 1 Note: (a) Units are rated 1,2, 3,4 in decreasing order of preference. Numbers indicate importance of influence. (b) If units are rated the same they are considered essentially equal. -58- 0056146 LEXOLDMONOQ6559 ZM9S00 N oW 0J T3 TABLE VUI Transformer Characteristics &c Price Comparison Indoor Secondary Substation (Load Center) 13. 8 KV to 480 v, 60 cycle, 3 phase* 1500 KVA - -- 500 KVA Initial Cost^ Losses (watts) F ull load No load Physical Spec's Weight (lb) Floor Area (sq ft) Height (in) Oil 1 19, 800 3, 400 10, 200 29. 9 83 Aska rel Filled 1. 27 Open Dry 1. 27 19, 800 3, 400 22,050 5, 050 12, 180 29. 9 83 8, 500 21. 0 90 Se aled Gas Oil 1 Askarel Filled L 25 Open Dry 1. 08 Sealed Gas 3 1. 79 - 9, 900 9, 900 10,700 -- - 2, 050 2, 050 1, 900 -- 12, 700 28. 8 112 5, 140 23. 6 67 6, 150 23. 6 67 3, 400 16. 6 90 7, 100 24. 5 90 Impulse Strength (Bil) 95 95 54 95 95 95 54 95 Forced Air Cooling (% Inc. ) Noise (dc) 15 60 15 60 33 65 - 15 64 56 15 56 33 -60 59 Maintenance: Fluid te st Leaks Filte ring Fluid test Leaks F ilte ring Clean and blow off Moisture on shut-down Leaks (Same as for 1500 KVA) 1. Based on data and quotes from G. E. , Allis Chalmers, Westinghouse and Zinsco Electrical Products (dry type). 2. Based on lowest price quoted compared to oil at $6, 800 (1500 KVA) and $3, 720 (500 KVA). 3. Comparison made on quote for outside gas-filled versus oil. 4. 95 KV Bil units available at 10% above quoted price for 50 KV Bil units per Zinsco 11/69. -59- LEXOLDMON006560 TABLE IX Domestic Transformer Aroclor Sales In Thousands of Pounds Month January February March April May June July August September October November December Total Actual 1145 1018 1303 1236 1089 1364 1558 1330 1411 1851 1505* 1630* 16. 0 M Seasonal Factor 83. 4 86.2 103. 9 92. 6 92. 6 103. 7 82. 2 105. 7 106. 0 106. 7 113. 1 122. 9 Seasonally Adjusted (Predicted) 1120 1150 1380 1230 1230 1380 1090 1400 1410 1420 1505 1630 16. 0 M 1970 January February March April May June July 83. 9 85. 0 103.9 93. 0 92. 2 103. 7 81. 9 Seasonally Adjusted - "Predicted Values" -60- OOSb1**8 LEXOLDMONOQ6561 Year 1959 60 61 62 63 64 65 66 67 68 TABLE X DOMESTIC ASKAREL SALES OUTLOOK AND HISTORICAL CORRELATION by NEW TRANSFORMER INDICATORS - 1959 to 1968 and 1975 - Askarel Actual M lbs. 12. 5 14. 2 11.8 10. 9 11. 1 12. 0 15.8 16. 5 20. 0 18. 7 Power1*! Distribution Transformers ST $ Askarel Predicted M lbs. Utility2 Capital Expenditures Elec. Dist. Equip, f? $ Askarel Predicted HT lbs. 450 12.4 1. 413 11. 1 450 12. 4 1. 565 12. 3 418 11. 1 1. 550 12. 2 389 11. 1 1. 593 12. 54 425 11.9 1. 568 12. 3 501 13. 5 1. 688 13. 31 578 15. 2 1.861 14. 7 661 17. 9 2. 108 16. 7 735 16. 9 2. 349 18. 7 778 18. 6 2. 564 19. 6 75 19. 0 4.200 33.6 1 - Source - Department of Commerce (Equation) Askarel Sales 2. 55 + 0.0219 (1)+ 2. 0 SA lbs. lbs) = 2 - Source - Electrical World (Equation) Askarel Sales (M lbs) = -0. 43 + 0. 0081 (2) + 2. 5 T3T lbs. -61- 0056149 LEXOLDMONOQ6562 APPENDIX A Some Transformer and Dielectric Terminology In order to reacquaint many of us with some basic terminology, several key definitions of dielectric and transformer properties are in order and will aid our understanding of transformer askarel's function: The Transformer The transformer transfers energy from one alternating electric circuit to another alternating circuit. It consists essentially of two coils, wound on an iron core, which forms a closed magnetic circuit. When power is supplied to one coil at a definite frequency and voltage, power can be taken from the other coil at the same frequency and at the same or at a different voltage. A transformer, which receives power at one voltage and delivers it at the same voltage, is called a one-to-one transformer. When it receives power at one voltage and delivers power at a higher voltage, it is called a step-up transformer. And when it receives power at one voltage and delivers power at a lower voltage, it is called a step-down transformer. The coil, or winding, to which power is supplied is called the primary; and the coil, or winding, from which power is taken is called the secondary. In the ordinary transformer, the coils, wound of insulated copper or aluminum wire or strap, are insulated from the iron core and from one another, so that the primary and secondary electric circuits are entirely separate and insulated from each other. Since there are no moving parts in the machine it is called a static, or stationary, transformer* The cost per kilowatt of capacity is low compared to that of other electrical apparatus. The losses are small and the efficiency is correspondingly high -- higher than that of any other electrical power machine. Efficiencies of large trans formers may be 99 percent or more. They require little attention and maintenance costs are low. The average life expectancy of a transformer is twenty to thirty years. Transformer Action In a transformer the iron core is laminated and made up of sheet steel punchings clamped in place. The supply or primary winding (p) is wound on one leg of the core, while the secondary winding (s), LEXOLDMON006563 of a different number of turns, is wound on the opposite leg. (To reduce losses, half of each coil is wound on each leg in commercial transformers. ) The supply current from G to the primary winding, P, sets up a magnetic field _________ _ (flux), in the iron core. ______ secondary This flux, 4, also links the turns of the secondary wind ing, S, and sets up an alternating (opposite) mag 3* netic force in the winding. Because of the voltage "induced" in the secondary rE winding, it can be used to supply current and power. Fjo. 1-8. Klcmcnt-ury HU*|wlown transformer. Dielectric A dielectric is an insulating material (gas, liquid or solid) when it is used to store electrostatic energy. This material in a transformer actually prevents the flow of energy, and is also referred to as insulation. Dielectric Strength The ability of a dielectric to prevent a spark or arc when between two electrodes is referred to as its dielectric strength. Many variables enter into the measurement, but using an ASTM test with a gap of 0. 1 inches between the electrodes, oil has a dielectric strength of 26, 000 to 30, 000 volts; Aroclor, 30, 000 to 35, 000 volts; air 5, 000 to 10, 000 volts; and gas (SFg; C4Fg etc. ) approaches the strength of oil and askarel under pressure. Impulse Strength If, instead of applying the test voltage slowly as in the measurement of dielectric strength, it is applied suddenly as a pulse, sometimes quite different results are obtained. This test is intended to approx imate the characteristics of a lightning or severe overload surge. Whereas Aroclor has a dielectric strength higher than oil, askarel impregnated insulation has a lower impulse strength. This is a serious shortcoming in Aroclor transformer applications. 005611)1 li LEXOLDMONOQ6564 Dielectric Constant The minimum energy storage under a vacuum is called capacitance and is taken as unity. Air and most gases have capacitance of 1. 0006, and this is referred to as dielectric constant. Petroleum oil has a dielectric constant of about 2. 2, and Aroclor of around 5. Thus, Aroclor in a certain size capacitor can store four or five times the energy of air, or over twice as much as oil. Or, to look at it another way, an Aroclor-filled capacitor can be half the size of an oil-filled capacitor and still do the same job. In capacitors, the higher the dielectric constant, the better (other things being equal); in a trans former it is as important. However, a high dielectric constant in the presence of contaminates does degrade the insulation quality of the dielectric. Power Factor This is one of the more confusing terms as power factor, dissipation factor, loss factor, and loss tangent are all used to describe the same characteristic. However, the quantities are numerically equal only at low values. All of the terms can be considered as referring to the energy loss that occurs in a dielectric when an alternating voltage is applied. Part of the loss can come from leakage of the current through the dielectric system, and another part from what can be thought of as the friction from rotating molecules. Both show up as heat in the dielectric. A perfect dielectric would return as much energy as was put in to charge it. The difference, the power factor, is the energy lost as heat. The lower it is, the better. Resistivity This is simply a measure of the resistance of the dielectric to the passage of direct current. It is measured in ohiry^cm. Oil ranges from 1013 t0 l()14 ohm-cm, and Aroclor from 10 ^ to 10^ at room temperature. The higher, the better. Note: A liquid dielectric can be used as an insulator, as in a cable; as a dielectric as in a capacitor; as a coolant in a transistor; or for a combination of reasons, as in a transformer where the di electric serves as both insulant and coolant. 0056152 ill LEXOLDMONOQ6565 However, there are many other important uses for other dielectrics and these are indicated in pictorial form below: APPLICATIONS OFLIQUID DIELECTRIC5 taltoT.D.Camm, H.R.l.) This shows the relationship of the application to three major characteristics of the dielectric; Ability to withstand high voltage, ability to store or insulate from electricity, and heat transfer quality. Rated KVA The kilovolt-ampere output of the transformer which can be delivered at rated secondary voltage and rated frequency without exceeding the rated temperature rise. Voltage or Turn Ratio The ratio of the number of turns ("turn ratio") in the primary and secondary windings. The rated voltage (open-circuit) of a transformer is closely proportional to the turn ratio, or number of turns, in the primary windings divided by the number of turns in the secondary windings. For example, a substation unit "stepping down" from 34 KV (primary) to 13. 8 KV (secondary) has a turn ratio of about 3 to 1. iv 0056X53 Insulation Solid and liquid oi* dry dielectric insulation separates the solid insulated high-voltage winding from the low-voltage winding. This dielectric insulation carries the highest voltage and occupies the most limited space; hence it usually operates at highest stress. Stress is maximized in large ducts rather than smaller ducts, thus askarel and oil designs attempt to minimize insulation clearances. Losses Reduction in transformer efficiency due to internal power loss. Losses come from resistance and leakage within the windings and core. These losses are a function of the length and size of coil used, and core quality and weight. These losses together vary from one percent of the full load rating (KVA) for large transformers to three to five percent for the small sizes. No-load losses are core losses under no-load conditions. These losses usually remain practically constant at all loads of constant voltage supply. However, total losses rise rapidly above no-load values when load is applied. Current/Voltage Load BIL Standard basic impulse insulation level as established by The Institute of Electrical and Electronic Engineers, Edison Electrical Institute, and The National Electrical Manufacturers Association. This "impulse" test level is that value where the insulation will not break down on voltage surges of high magnitude and short duration. Lightning or sudden switching surges are examples of impulse surges. The standard BIL of most oil and askarel distribution and power distribution equipment is the value assigned below: 005615* v LEXOLDMON006567 Basic Impulse Refe rence Insulation Class, KV Level, KV Common Insulation Level (dry tvpe) KV 1. 2 2. 5 5 8. 7 15 23 34. 5 46 30 45 60 75 95* 110 150 200 250 10 20 25 35 - 50 - - Basic Impulse Refe rence Insulation Class, KV Level, KV Common Insulation Level (dry type) KV 69 92 115 138 161 196 230 287 345 350 450 550 650 750 900 1050 1300 1550 _ * The 95 KV BIL was established for certain types of equipment in the 15 KV class. Under special conditions equipment having lower BIL ratings may be furnished. No industry standard impulse levels have been established for dry type transformers. The above values are past common practice. Newer designed dry types have 95 KV BIL ratings for 15 and 23 KV reference ratings. Audio Sound Transformers are noisy when energized. The noise is a hum generated by vibration in the laminated core structure. The iron core actually lengthens and shortens due to its changing magnetization causing a "hum. " Low noise level designs with definite sound ratings in decibels (db) are important selection criteria. A basic selection rule is to choose a transformer with db rating lower than the average decible level of the area in question. Typically, a three decibel increase in sound level has the effect of almost doubling the sound volume as detected by the human ear. The following table shows average ambient noise levels in common installation areas: Area Average Sound Level (decibels) Average home Retail Store Office area (without machines) Office area (with machines) Average factory 30-45 45-55 45-70 50-75 79-95 APPENDIX B TRANSFORMER USE AND TYPES Transformers are used to meet a wide range of requirements. Energy must be transferred from its originating source (generating plant) to the user (residence, factory, etc. ) as economically as possible. High voltage permits economical energy transfer with lower line resistance losses. Thus, large power transformers are used at generating stations to step-up the generated voltage to high levels (115 to 765 KV) for transmission. The transmission voltages are then stepped down by transformers at the substation for local distribution. The step-down to local distribution is normally done in several transformation phases. That is, at the large outdoor or vault substation where step-down to medium voltage (13. 8 to 69 KV) occurs; at various load centers near or in the building or plant where step-down to secondary distribution (480 to 600 volts typical) levels occurs; and at subdistribution points where final step-down to various utilization voltages is accomplished. Typical final step-down transformation is for residential, building and factory lighting, air conditioners, and miscellaneous small electrical equipment and appliances. Designations Manufacturers provide a wide range of transformer types, sizes and designs for both indoor and outdoor application. Units are listed and designated according to function, KVA capacity, phase and voltage characteristics, method of cooling, noise level rating and type of en closure and construction -- all for specific applications. As a fluid supplier we should have some understanding of the various types, their normal application, and where askarel units fit in the overall picture. Figure l*was developed for this purpose and is discussed below. Data is based on transformer standards (NEMA) and contacts with trans former manufacturers. Voltage versus Rated KVA Service Most manufacturers and service agencies (EEI, NEMA, etc. ) recognize transformers broadly by primary voltage and the rated KVA size. Normally all smaller transformers with voltages 1 to 69 KV, of 1 to 500 KVA sizes, are classed "distribution." All transformers above 500 KVA are classed "power. " (Note ) Power transformers are All figures referenced follow Appendix B vii 0056156 often further defined by "small power" ranging from 500 to 10, 000 KVA, and "large power" for units over 10, 000 KVA. This classifi cation was developed not to stereotype transformers but to better understand transformers in terms of their voltage-KVA size range. In addition, the organization of the utility and transformer manu facturers are normally defined according to these "distribution" and "power" classifications. For example, the Westinghouse production and marketing-engineering organization is divided into Small Power at Sharon and South Boston, Distribution (residential and commercial) predominantly at Hickory, North Carolina, and Large Power at Muncie, Indiana. Utility engineering groups who specify transformers are normally headed by the Superintendent of Distribution and the Superintendent of Transmission and Generation (large power). Trans former order and shipment statistics compiled by NEMA, EEI, and others are classed broadly into less than 500 KVA, 500 to 10, 000 KVA, and greater than 10,000 KVA ranges, which correspond to the distribution, small power and large power classes respectively. In actual practice, and as you will see on Figure 1, the transformer KVA rating iB often found to overlap from distribution into power service. For example, secondary substation transformers are manu factured in sizes ranging from 11E. 5 to E500 KVA, and furnace trans formers are rated from less than 100 KVA for small foundry induction units to 100, 000 KVA on large arc furnaces in steel mills. Thus, the "power versus distribution" lingo is hazy for many specific transformer types. Some manufacturers have both small power and distribution units produced by the Distribution Department because it is an economical production mix. For example, the Distribution Department of General Electric, Pittsfield produces utility network units, 300 to 2500 KVA, while the medium transformer (small power) department at Home produces secondary unit substations, 112. 5 to 2500 KVA. Transmission Step-up and Tie (Large Power) The largest transformer (Tab>^) is for extra high voltage (EHV) service. These units step-up from generated voltage (less than 69 KV) to high economical transmission voltages of 115 to 765 KV range. Sizes range from 25, 000 KVA to 1 M KVA for giant units serving the new, but in creasingly popular, EHV ranges of 500 to 765 KV. These units are installed outdoors and oil filled. viii ' Substations All substations are made up of one or more substation type trans formers linked mechanically and electrically. Their design includes protective switchgear assemblies. Substations are normally of unit type design, indicating factory assembled. Primary Substations (Large and Small Power) The first point of transformation (Tab A) of the "primary" voltage down to medium or "secondary" high voltage. Normal ranges are 34. 5 to 138 KV primary, and 5000 KVA to 30, 000 KVA or higher. Actual "standards" cover a range from 6.9 to 138 KV and sizes 500 to 10, 000 KVA as shown on the figure. These units are oil filled (few are askarel), outdoor units designed for utility distribution and industrial plant use. Normally, in industry, the primary substation will feed a "secondary" substation located indoors at voltages of less than 35 KV. The primary substation may also directly feed large voltage users, i. e., arc furnace transformers at 34 to 69 KV, Secondary Substations (Small Power-Distribution) The point of transformation (Tab A) from medium to low voltage. Typical ranges are 2.2 KV to 34. 5 KV primary in sizes 500 to 2500 KVA; low voltage is 480 volts (normal). These units are usually askarel filled, dry type or gas filled indoor or roof-top units designed for either commercial, industrial or utility auxiliary power needs inside the generating plant. Outdoor substations are usually oil filled unless the unit is close to the building -- then askarel may be used in lieu of a fire-resistant barrier, according to the National Electrical Code. Secondary substations are often referred to as "load centers" or "power centers" transformers. This terminology is an outgrowth of the popular physical location of these units in indoor load center areas where the user enjoys a "packaged system" of secondary substation transformer (s) and protective equipment enclosed in a functional attractive switchboard design. Figures 2, 3, 4, and 5, illustrate askarel, dry type, and gas filled secondary unit substations. Furnace Transformers (Small Power and Distribution) Not shown on Figure 1. Large units are arc furnace transformers used for supplying electric power to direct arc melt furnaces. Smaller units serve induction furnaces for foundries. Both are normally indoor units. Arc units normally range from 10 to 100 MVA, with 13.8 to 34 KV voltage, while induction units average 250 to 5, 000 KVA at 2.4 to 00 ^t>v IX 34 KV voltages. The arc furnace is oil filled (few askarel), while smaller induction units are oil, askarel and dry type. Rectifier Transformer (Small Power-Distribution) Not shown on Figure 1. Indoor units that rectify AC current to DC current for primarily aluminum, steel and chlorine production. They operate normally at 13. 8 KV, with larger units up to 130 KV. Sizes range from less than 100 KVA to 10, 000 KVA. Smaller rectifier trans formers are oil and askarel filled, while large units are oil filled. Network Transformer (Small Power) The point of transformation (Tab A) from medium to low voltage by the utility in large cities. This unit is normally underground and vaulted with parallel, interconnecting circuitry to other network transformers to form a fail-safe "network grid" throughout the city. When one unit fails, the load is picked up by another unit in the grid. A "spot network" unit is a network transformer off the grid that serves a remote or very large commercial customer. Primary voltages are 2. 2 to 13. 8 KV in sizes 500 to 2500 KVA. Secondary user voltages are 480 volts and below. Units are oil and askarel filled. A network unit is shown in Figure 6. Note: Large commercial customers outside the network often choose to purchase power at 2. 2 to 13. 8 KV and transform to low voltage via the secondary substation, located in side his building. Specialty and Miscellaneous (Distribution) Final transformation point with transformers to supply electric power for control, machine tool, signaling, luminous tool, cold-cathode, lighting, series street lighting, transportation, and low voltage general purpose applications. Standards for this class range up to 500 KVA with voltage to 69 KV. However, these are nearly all mini-sized dry type transformers at mini-voltages; most at less than 600 volts and below 2. KVA. Several transformer types are exceptions to this stereotype class: a) Transportation (Railroad) Transformers - Rectifier type units normally restricted to smaller sizes (less than 100 KVA) for use on electric trains (one per car). Units are of askarel and oil design. 0056159 b) Instrument Transformers - Small units that give over-voltage protection or change current or voltage to values suitable for instruments, meters and relays. Instrument transformers are usually askarel filled for 15 KV and above, and dry or solid type for less than 15 KV. Sizes are small, 10 to 15 KVA. c) Precipitation Transformers - These transformers are of the rectifier type. They supply DC power to utility and industry power plant stacks to electrically filter out ash decomposition products. Normal voltages are less than 50 KV, and sizes are estimated at less than 500 KVA. These units are askarel or oil filled. Commercial Pad, Pole and Subway (Distribution and Small Power) These units have been arbitrarily lumped into a single category on Tab B to display units serving the commercial market, not defined by the network and secondary substation types. These transformers may be: a) Pad-mounted - Encase, oil-filled units for outdoor installation near the building on a factory-assembled pad support. Normal size, 75 to 500 KVA (some to 2500 KVA) <18 KV. b) Pole - Unencased oil filled transformers suitable for mounting on a pole or similar structure. Same sizes as commercial padmounted units. A pole-top unit is shown on Figure 7. The above units are about 95 percent oil filled, the remainder are askarel filled. They transform from medium to low voltage by the utility, and are prevalent in suburban shopping centers, universities, etc. Residential Pole, Pad and URT (Distribution) Lump category shown on Tab B to display the residential market. Commercial transformer definitions for pole and pad mount are the same for residential, except for size and voltage. These units are the final transformation point from utility medium voltages of 2.2 to 25 KV to the home owner's lighting and appliance voltage levels of 240/120 volts. Sizes are 25 to 167 KVA. Residential pole or pad units normally serve several customers, however, the unit residential distribution (URT) concept is receiving much attention. In URT, each xi 0056160 residence is served through a URT unit located immediately adjacent to, or in, the residence, above ground, or under the ground in a sub mergible vault type design. Residential transformers are oil filled. Newer URT designs are dry type, oil and of epoxy solid encased design (Westinghouse). The present askarel market in terms of voltage and transformer KVA size is illustrated on Tab C. Our voltage range extends typically from 2. 2 KV to 34 KV (max) in transformer sizes from 300 KVA to 2500 KVA. Askarel types include the network, secondary substations, primary substations, induction furnace and rectifier transformers. We also participate in lower sizes below 500 KVA in transportation, precipitation, and instrument transformers. 0056161 xii zq1940 E *?/> t-*S ,'*7*-~ ,->v'1 rr:-Si>f " VH./1'WiV |i^aNWe**sea6# v V-`,'\-. -<?iV;r. j v. sv- *?*-;;'.\> ; . *.<' ,;,>> I LEXOLDMONOQ6575 05 2 2 13 25 34 LEXOLDMONOQ6576 LEXOLDMON006577 r^m LEXOLDMON006578 F igurc L Askarel Substation Design Mechanical pressure relief device is furnished on cover of all Pyranol transformers. Cover is welded to tank to eliminate gasketed joints. Lifting loops are rug ged and easy to reach. Glass bushings are weld ed to tank. Flat cooling tubes take less space. They are swaged at the ends for extra strength. Bottom drain valve allows full oil drain age. Hold-down holts can be inserted with ease. Flanged base can be rolled or slid in any direction. 00*>lbb LEXOLDMONOQ6579 Figure 3 Dry Type Substation Design General Electric's 15 kV open-dry type trans . formers provide compact J'' substations in applicalions wlfere high capavk, titles are required. 'S' 'jiii I. - 0056167 LEXOLDMON006580 Figure 4 Gas Filled Substation Design 0036168 xvi LEXOLDMONOQ6581 Figure 5 Load Center with Two Askarel Filled Unit Substations xv ii 0056169 LEXOLDMONOQ6582 Figure 6 Liquid Filled Network Transformer k r [ [ L L F xviii ,0056170 , LEXOLDMONOQ6583 Figure 7 Pole Type Oil-Filled Transformer xix 0056171 ' LEXOLDMONOQ6584 APPENDIX C POWER TRANSFORMER DIVISION, SOUTH BOSTON, VIRGINIA SALES LETTER 69-7 FILE A7-000 WHY INERTEEN INCREASED STRENGTH FIRE RESISTANT If you can get your customers to specify Inerteen filled transformers for their power center (secondary unit substation) requirements, you will be in the best possible position to get the order. Attached is a copy of booklet O/FF-14 prepared by Monsanto Company outlining the reasons why Askarel (Inerteen) filled transformers should be specified. If you get with it early enough (before your customer firms up his specifications) you can frequently get Inerteen specified instead of a dry type. This is important because the superiority of the rectangular core form transformers built by South Boston as told in SA 10099 and DB 47-350 will put you in the preferred position. Add to that the fact that 1. the price will be right, and ?. the shipment will be shorter and you're in I So use the attached booklet (more copies are available on request), get Inerteen specified and you'll be holding the winning hand I D. P. Kaiser Marketing Manager South Boston, Ve. Plant October, 1969 SFE-004, 009-01 J. 014. 024. 097 040, 044. 045. 047, 051,052 xx - '0056172 . APPENDJX D Transformer Askarel Sales Transformer Shipments and Orders (501 KVA) and New Industrial Construction# 1965 - 1968 Askarel (M lbs) Transformersi ( > 501 KVA) Shipments Orders (Units) (Units) New Contruction (51$) 1964 I. 11. III. IV. 2849 2492 3062 3639 1529 1901 1857 1961 1904 2138 1899 2229 679 873 986 727 1965 I. 11. III. IV. 3248 2918 2979 3941 1882 1847 2048 2054 2269 2079 2623 1988 937 1278 1352 1561 1966 I. 3144 II. 3763 III. 3487 IV. 3125 2797 3215 3186 3212 2110 2174 2077 2245 1364 1713 1855 1771 1967 I. 11. III. IV. 3687 4690 5369 5774 1914 2613 2439 2391 3019 2939 2357 1773 1447 2617 1663 1551 1968 I. II. III. IV. 4903 4092 4026 5660 2267 2559 2150 2250 2208 1853 1696 1633** 1256 1318 1400 1610 * Sources a) Transformer Shipments and Orders - Edison Electrical Institute, New York b) New Industrial Construction - Survey of Current Business, Dept, cf Commerce ## Orders by quarter for 1969 are; 1806(1), 1474(11) and 2593 (111) units. xxi ' 005*173 LEXOLDMONOQ6586 APPENDIX E Bibliography 1. Electric Power Distribution for Industrial Plants 4th ed. IEEE Publication No. 141, August 1969. 2. Dry-Type Versus Liquid-Filled Transformers for Industrial Applications by W. M. Terry Jr., Asst. Chief Engineer, Allis-Chalmers. Presented to The American Power Conference (1955). 3. Electric Systems for Commercial Buildings, JEEP Publication No. 241, October 1964. 4. Energy Systems Design Survey, Power Magazine, Div. of McGraw Hill, New York, October 1969. 5. Electric Distribution Equipment, A Special Report, Power Magazine, October 1965. 6. Insulation Systems for Electrical Design, Wiley fc Sons, F. Clark, 1958. 7. Liquid Dielectrics and Aroclor, A Market Study, OD 1134, John S. Harris, August 15, 1956. 8. Industrial Electricity, Volume Two, Timhie and Wilson, 1949, Wiley & Sons. 9. U. S. Industrial Outlook - 1969, U. S. TVp.a rt.rnent of Comm rce. Business and Defense Services Administration. 10. Electrical World, 20th Annual Elect viral Industry Forecast, McGraw-Hill, September 15, 1969. 11. Directory of International Engineering and Const rm lion Services 1968, National Constructors Association, Washington D. C. 12. Directory of the Consulting Engineers Council (1969-70), Consulting Engineers Council, Washington D. C. XXII APPENDIX F List of Personal Contacts Made During This Study Transformer Manufacturers Allis Chalmers, Pittsburg, Pa. Allis Chalmers, Milwaukee, Wise. General Electric Company, Rome, Ga. General Electric Company, Pittsfield, Mass. ITE Circuit Breaker, Philadelphia James Ford, Sharpsville, Pa. Maloney Electric, St. Louis, Mo. Wagner Electric, St. Louis, Mo. Westinghouse Electric Company, Sharon Pa. Westinghouse Electric Company, South Boston, Va. Architectural and Engineering Firms Charles T. Maine, Boston, Mass. Russ Engineering Co., Birmingham, Ala. Stone Webster, Boston, Mass. Sverdrup & Parcel, St. Louis, Mo. Industrial Contacts Chrysler Motor Co., Detroit, Mich. Ford Motor Co., Detroit, Mich. General Motors Co., Detroit, Mich. U. S. Steel, Pittsburgh, Pa. Utilities Baltimore Gas & Electric, Baltimore, Md. Boston Edison Co. , Boston, Mass. Cincinnati Gas & Electric Co., Cinn., Ohio Commonwealth Edison Co., Chicago Consolidated Edison Co. , New York, N. Y. Kansas City Gas & Electric Co., Kansas City, Mo. XX111 0056175 Utilities (Cont. ) Louisville Gas & Electric, Louisville, Ken. Ohio Edison Co., Akron, Ohio Ohio Power Co., Canton, Ohio Public Service Gas & Electric Co., Newark, New Jersey Union Electric Co., St. Louis, Mo. Virginia Electric & Power, Richmond, Va. Service Agencies and Others Department of Commerce, Bureau of Business Services Administration, Washington D. C. Edison Electrical Institute, New York, N. Y. Electrical World, Div. of McGraw-Hill, New York, N. Y. Factory Mutual Insurance, Boston, Mass. Federal Power Commission, Washington, D. C. National Electrical Manufacturers Assoc. (NEMA) Power Magazine, Div. of McGraw-Hill, New York xiv 0056176 LEXOLDMONOQ6589