NORTHWEST ENERGY EFFICIENCY ALLIANCE Residential Advisory Committee – Q4 October 16, 2014

Welcome What was your favorite Halloween costume and how old were you when you wore it?

Follow up from Q3 RAC meeting  Field Service matrix – page 3  Retail Map m_medium=copy  Sears/DHP update – Jill

Advisory Committee Revamp (Packet pg. 8)  Current Status  Under Governance Committee review  Board to consider for approval December 3  Key Points  Areas for improvement:  better communication and coordination  clarity on roles and responsibilities  clarity on decision points are in NEEA’s process  more transparency and better information sharing  Business Case (funders need it!)  Process Clarity and Formalization (including Work Group template, RPAC voting rules, Advisory Committee membership clarity, etc.)  Single Source of Truth for Advisory Committee materials

Single Source of Truth - CONDUIT

Live link….. 

2015 RAC meeting dates  Page 9

NW RPP compared to EnergyStar (ES) National RPP Pros of supporting a National program NW at table to discuss standards with EPA ES assistance in data collection and matching ES recruiting additional utility partners ES is most recognized brand for efficient products National program provides scale with retailers Leverage in contract negotiations Cost sharing across a wider group Potential to reduce NW incentives Region benefits from quicker MT NW continues to have direct influence/input on national program development Cons of supporting a National program Potential to exceed 2015 RPP incentive budget Individual products/widgets may not be cost effective The NW RPP product assortment and retailer partnerships will continue in Supporting a national program would require adding freezers and dryers at selected retailers.

Funder Coordination Plans

Shout Out!  RAC members on the project team:  DIANE FERINGTON  and DENNIS ROMINGER  THANK YOU!!

Overview

A Funder Coordination Plan Summary  SAMPLE

….and here’s the details  SAMPLE

Conflict Resolution Process  (Reviewed and agreed upon by the RPAC, July 2014)  Consensus among NEEA and stakeholders is highly desirable. Coordination is planned and decisions are made through a consensus-intention process, in which the consent of all parties is actively sought. In the course of doing business, there may be times when NEEA and stakeholder(s) are not in agreement. In these instances, NEEA agrees to:   Summarize areas of dissension and make these available to all parties involved.   In the event that a consensus to move forward cannot be reached, both NEEA and a representative from the dissenting stakeholder(s) will draft a position statement that will be presented to the Regional Portfolio Advisory Committee for further discussion.

Your feedback….  Did we miss something big in defining the Touchpoints for coordination?  Are you able to support the Funder Coordination Plan from a resource perspective?  Are you willing to support the conflict resolution process agreed to by RPAC in July?

Milestone Progress: 20-Year Savings Potential Initiatives Total Regional Savings (TRS) (aMW) 2 Status – September Red indicates movement from prior month. Upcoming milestone date and 20 year aMW savings potential are noted in parentheses in green next to each initiative. Conservatively reflects Infrastructure values at 0. Combined Space & Water Heating (2015) Windows 2.0 Home Energy Management Manufactured Homes (2015) Advanced Water Heating Systems Advanced RTU Business IT Net Zero New Construction Secondary Glazing Systems (2015) Occupancy Building Mgmt Extended Pump Products Efficient Power Supplies Industrial SEM Infrastructure (2015) Super Efficient Dryers (Q4 2015, 183) Retail Product Portfolio (Q4 2015, 50) Next Step Home (Q4, 68) Lum. Lighting Controls (2015, 40) Comm.Lighting - Top Tier Trade Ally (2015, 0) Heat Pump Water Heaters (190) Homes (137) Building Operator Certification- Expansion (25) Ductless Heat Pumps (120) Codes (130) Standards (210) Healthcare (Q4, 4) Food Processors TVs 80 Plus Verdiem Dishwashers Clothes washers Refrigerators Windows, CFLs Commissioning Grocery, Building Operations, BOC, Energy Mngmt Cert, Drive Power, VFD, BacGen, DEI, AM400, Magna Drive, SAV-Air Reduced Wattage Lamp Replacement (Q4, ) Comm. RE (Q3, 10-15) RETA CRES (Q1 2015, 10-17) TRS estimates in green represent 6 th Power Plan 20-year technical achievable potential TRS estimates in blue are NEEA savings ests.

Residential Milestone Progress: 20-Year Savings Potential Initiatives Total Regional Savings (TRS) (aMW) 2 Status – September Red indicates movement from prior quarter. Upcoming milestone date and 20 year aMW savings potential are noted in parentheses in green next to each initiative. Combined Space & Water Heating (2015) Windows 2.0 Home Energy Management Manufactured Homes (2015) Advanced Water Heating Systems Super Efficient Dryers (Q4 2015,183) Retail Product Portfolio (Q2 2015, 50) Next Step Home (Q4 2014, 60) Heat Pump Water Heaters (190) Homes (137) Ductless Heat Pumps (120) Codes (40) Standards (135) TRS estimates in green represent 6 th Power Plan 20-year technical achievable potential TRS estimates in blue are NEEA savings ests. TVs Dishwashers Clothes washers Refrigerators Windows CFLs

Dryers Work Group? Looking for input on:  The formation of a Super-Efficient Dryers work group?  Which organizations want to participate?

19 NORTHWEST ENERGY EFFICIENCY ALLIANCE 2015 Operations Plan Residential/Mass Markets

20 Desired Outcome  Residential Advisory Committee understands and supports 2015 plans for the residential/mass markets sector.

Focus Areas for Business Plan Driving the advancement and success of programs within NEEA’s Consumer Products and Residential New Construction Strategic Markets

2015 Objectives Consumer Products:  Heat Pump Water Heaters – Build regional uptake and market demand while accelerating consumer and supply chain adoption of northern climate heat pump water heaters.  Ductless Heat Pumps – Build and increase market availability and demand while increasing consumer adoption of ductless heat pump technology.  Super-Efficient Dryers – Validate energy savings and product potential for super-efficient dryers.  Retail Product Portfolio – Increase the sale and presence of energy-efficient products in the retail channel. New Construction:  Homes – Accelerate market adoption of energy-efficient residential building practices and technologies to pave the way for future code adoption.

2015 Dependencies and Interactions  Utility Partners  Buy-in and support of key initiatives through  Advisory Committee meetings & monthly reports/updates  Initiative working groups  Face to face meetings  BCE & California Partnerships  Leverage West Coast market power with retailers and lay foundation for Retail Product Portfolio success  ENERGY STAR, EPA, and CEE  Regular meetings to influence specs, share learnings

Critical Success Factors & Challenges Critical Success Factors  Delivery channel diversification  Manufacturer product performance & delivery to market  RTF measure development  Resource availability Challenges  Staff capacity  Incentive variance (35% of budget)  Stakeholder perception & management  Early phased initiatives result in greater variance  Growing residential portfolio Major risks inherent in the plan  Product availability & performance  Ductless Heat Pump, retailer & EPA relationships  Next Step Homes does not produce expected savings

2014 Forecast vs Budget Summary

Residential New Construction Northwest ENERGYSTAR Homes & Next Step Home

27 Efficient Homes Overview – Current state  Launched Quality Oversight (QO) for Providers to ensure all requirements for Northwest ENERGY STAR Homes (NWESH) are met.  Performance Path became the sole method for certifying NWESH after Prescriptive Builder Option Packages expired on 7/1/2014.  Identified Advanced Energy to take over Northwest HVAC oversight for NWESH and began transition planning.  Re-engaged with the EPA to define the national oversight role and timeline for transition.

28 Next Step Home Overview – Current state  Recruited 30 additional pilot projects, ensuring regional builders and home spec diversity.  Analyzed 12 months of performance data from 8 of the first 12 pilot homes.  Completed project reports that summarize: builder challenges and best practices; homeowner/builder interviews; and, cost and performance data.  Held kick-off meeting with RTF to begin exploring an energy savings methodology based on performance ratings.

29 Homes Objectives & Goals Leverage the New Construction platform to develop and increase market adoption of energy-efficient advanced building practices for single-family homes aimed at influencing and accelerating code adoption over the next 3-4 code cycles Objectives:  Begin data collection and analysis on Phase II projects to inform savings estimates and best practice pathways.  Outreach to 5 green building programs to potentially adopt Next Step Home Specification  Align Northwest performance path homes with national oversight  Develop Northwest ENERGY STAR specification for states that adopt 2012 IECC (WA completed)  Establish an RTF-approved performance rating based energy savings methodology

Homes Marketing Focus Areas  Support communication of NWESH alignment with National EPA ENERGY STAR program  Transition NWESH website to support Next Step Home pilot projects and advanced building practices and technologies  Develop market partner value propositions and messaging  Work with utilities to identify opportunities to support Next Step Home builders

31 Challenges, Major risks & Contingencies Challenges & Risks:  National Oversight – timelines and alignment  Builders drop NWESH due to increased cost/complexity  Next Step Home specification fails to achieve estimated savings targets  Performance rating challenges Contingencies:  Continue investment in tech support; work with Verifiers/ Raters to resolve pain points  Increase builder flexibility in meeting NWESH spec; provide Verifiers/ Raters assistance to establish cost-effective best practice  Revise NSH spec and identify alternate efficiency measures; Add additional NSH pilot with different mixes of measures  Prepare measure packages within the NSH spec for RTF savings approval

Residential Consumer Products Heat Pump Water Heaters

33 Heat Pump Water Heaters Overview – Current state  Expanded rebate dollars to the region by influencing 14 additional utilities to offer Northern Climate Specification-specific HPWH rebates  Designed and completed 3 promotions driving over 1500 Tier 1 and Tier 2 HPWH installations  25 utilities boosted sales by leveraging manufacturer/retail promotions  Leveraged over $600,000 in marketing and product markdown funds from supply chain

34 Heat Pump Water Heaters Objectives & Goals Influence the passage of a federal standard requiring HPWH for all electric storage tanks greater than 45 gallons by Objectives:  Support the introduction of a new Tier 2 or 3 product into retail and wholesale market.  Leverage market research to enhance marketing tools.  Ensure 50 utilities offer incentives that reference the Northern Climate Specification.  Drive product sales through 6 supply chain partnerships and promotions.  Laboratory test 4 Heat Pump Water Heaters

35 Breaking News!  GE is submitting a Tier 3 unit for NCS testing in November  NEEA has supported development of this product for the past 18 months  GE anticipates the unit will be available early January  Stay tuned!

HPWH Marketing Focus Areas Aware Familiar Willing to consider Purchase intention  Emphasis to fill/ expand top of funnel while also driving sales lower in funnel

HPWH Marketing Focus Areas ▪ Increase consumer awareness of HPWHs ▪ Support plumber/contractor promotion of HPWHs ▪ Facilitate, amplify or support upstream and utility promotions ▪ Leverage market research to develop tools and templates to support utility & market partner marketing ▪ Develop propensity models and other resources to support targeted promotions in the market

38 Challenges, Major risks & Contingencies Challenges & Risks:  Product performance and availability issues  Stakeholder consensus building can delay activity development or ability to react to quickly developing situations Contingencies:  Work closely with major manufacturers to bring Tier 2 product to market  Continue to provide opportunities for stakeholder input and build timelines accordingly

Residential Consumer Products Ductless Heat Pumps

40 Ductless Heat Pumps Overview – Current state  Supported 5 cooperative promotions with 5 utilities, 4 distributors and 4 manufacturers  Trained 16 Sears installers and placed utility rebate messaging/logos in 18 stores  Expanded partnerships and impact in manufactured homes segment (new and existing)  Secured manufacturer commitments to co- develop and deliver market-driven ductless business training

41 Ductless Heat Pumps Objectives & Goals Accelerate the adoption of inverter-driven ductless heat pumps (DHP) in electrically heated homes by building distribution channels, market capacity and consumer demand for DHPs Objectives:  Develop retail channel product road map.  Leverage market research to enhance marketing tools and activities.  Partner with manufacturers to develop 3 DHP promotions.  Complete DIY testing research (includes field testing, research into DIY products and processes).  Achieve 20% increase in residential ductless heat pumps sold in Northwest region.

DHP Marketing Focus Areas Aware Familiar Willing to consider Purchase intention  Emphasis to reduce leakage lower in funnel while maintaining top of funnel awareness

DHP Marketing Focus Areas  Facilitate and amplify upstream promotions  Leverage market research to develop tools, messaging & templates to support partner marketing  Develop propensity models and other resources to support targeted market-driven promotions  Maintain product awareness in the market  Support contractor skill development to sell DHPs with 1:1 displacement

44 Challenges, Major risks & Contingencies Challenges & Risks:  Delivery channel diversification seen as disruptive by some key partners  Product commoditization  New HVAC technology competition Contingencies:  Communicate value of channel diversification  Drive partners to educate consumers  Influence ductless product diversity/availability

Residential Consumer Products Super-Efficient Dryers

46 Dryers Overview – Current State  Field & Lab Testing  Stakeholder Outreach  Standards and Specifications Work  Manufacturer Engagement

47 Super-Efficient Dryers Objectives & Goals Influence the enactment of more stringent federal efficiency standards for clothes dryers Objectives:  Support super-efficient dryer placement in one big-box retailer – Q4  Support heat pump dryer product launch with 2 major manufacturers – Q4  2 utilities offer incentives on super-efficient dryers meeting NEEA specification, supporting early manufacturer launch – Q2  Complete performance baseline, research plan and lab testing results to inform RTF provisional unit energy savings – Q2

Dryer Marketing Focus Areas  Marketing will be very limited for this initiative since the product is in very early market testing.  Support manufacturer go-to-market promotions  Coordinate manufacturer promotions with utility partners  Analyze market uptake of manufacturer promotions identifying gaps, opportunities and leverage points

49 Challenges, Major Risks & Contingencies  Manufacturers delay product launch  Products fail to meet dryer specification  Regional/national partners unwilling to collaborate on costs for performance baseline, etc.  Closure of Lab Testing facility

Residential Consumer Products Retail Product Portfolio

51 Retail Product Portfolio Overview – Current State  Introduced RPP concept to national retailers participating in the TV initiative and secured their participation in the RPP pilot.  Developed and refined a product selection process in collaboration with the work group and introduced new product categories to retail partners, providing access to new corporate buying groups.  Introduced RPP concept to two new national retailers and secured participation from one (Home Depot).  Deepened strategic partnership with California (PG&E and SMUD).

52 Retail Product Portfolio Objectives & Goals Leverage mid-stream incentives to influence retail stocking practices, ultimately driving manufacturing and standards for a portfolio of energy-efficient products sold through the retail channel Objectives:  Develop product roadmap for market transformation portfolio development.  Launch automated data processing solution.  Expand extra-regional partnerships to increase initiative scale.  Manage and strengthen retailer engagement; adding one additional retailer in 2015.

53 Challenges, Major risks & Contingencies ENERGY STAR unwilling to share/collaborate on specification schedule.  Mitigation Plan: Series of collaboration meetings with ENERGY STAR – starting in Sept. leveraging publicly available data. Automated data solution not identified or implemented in a timely fashion. Could delay being able to add new product categories or require additional investment in current tool.  Mitigation Plan: RFI/RFP timeline being developed now in conjunction with CA. Contract departments involved.  Work with retailers to design.

54 Challenges, Major risks Cont… Corporate buyers do not participate in evaluation efforts.  Mitigation Plan: Working with evaluation contractor to identify alternate methodologies. Retailer contractual changes as necessary. Exploring collaboration with partners to ease evaluation strain on retailers. No new utility partners join, reducing ability to bring scale and delaying retailer influence.  Mitigation Plan: NEEA engages in partner recruitment efforts.

55 Challenges, Major risks Cont… Maintaining market transformation lens as more utility programs join. Need for alignment forces too much compromise around products.  Mitigation Plan: Roadmap with MT focus identified as key area of focus for Continued engagement with CA to incorporate MT into their programs. NEEA is an active and committed participant in national design.

Residential Consumer Products Long Term Monitoring & Tracking (LTMT)

57 LTMT Overview – Current state  TV initiative transitioned to long-term monitoring and tracking (LTMT)  Regional Residential Lighting Summit  LTMT teams identified  Need to evaluate alternatives for monitoring residential lighting market

58 LTMT Objectives & Goals Ensure long-term sustainability of the energy- efficiency gains stemming from the region’s market transformation investments Objectives:  ENERGY STAR TV 5.3 penetration reaches 92 percent  Evaluate lighting market progress indicators  Discontinue white goods and windows initiatives

Questions & Discussion

NORTHWEST ENERGY EFFICIENCY ALLIANCE 2015 Operations Plan Emerging Technology – Product Management

Pipeline Metrics Cycle 4 to Cycle 5 Metric (aMW)Cycle 4 Goal 2014 Year EndCycle 5 Goals Scanning-~ In Process1200~500*1000 Readied for Market300~ year TRS Savings 200~ Year TRS Savings 0 * Reduction of ~ 500 aMW when EBR, CRE and TTTA moved to infrastructure. Includes 183aMW added by dryers program

Filling the Pipeline in 2015 – Portfolio Ready TechnologyDescriptionSavings Potential StatusReady for Portfolio SGS – Secondary glazing system Interior window insert attachment for commercial buildings aMW (Market Potential) Developing test method with LBNL. Working with NFRC to include SGS in their new “attachments” standard. Working with Solarc and estimator to determine estimate of cost/savings (ROI). Early Products are available. Test method will be ready. Market characterization will be needed. High Performance Manufactured Homes Updated standard for manufactured homes with shell and HVAC upgrades aMW (Market Potential) Upside potential if early retirement included Coordinated field testing with BPA to prove savings and understand manufacturer barriers. Federal standard process underway Could be ready in 2015 to help meet pipeline metric. Combo system space and water Split system HP with single outside unit that supports residential space and hot water 394 aMW (Technical Potential) Assume aMW market potential Lab and field testing. Products are not yet available for sale in the NW. Expected availability Q Initiative start likely in May be incorporated into DHP program. Commercial New Construction Integrated design for commercial buildings 57 aMW (Technical Potential) Program planning will start in Initiative start likely in Q

Filling the Pipeline in 2015 – Scanning Themes TechnologySectorDescriptionStatusReady for Portfolio Automated M&VAllNegawatt meter for residential, commercial and industrial. Supports financial transactions. Inventory of available products complete. Exploring ways to validate tools and test capabilities insitu This technology is not likely to be ready for 2-4 years. CO2 Heat PumpsAllCO2 as a refrigerant for heat pumps. Useful for water heating and space conditioning. Products are currently available for industrial. Commercial and residential are coming. First product for res likely in mid Commercial later. Internet of ThingsAllWhat happens when everything is web connected? Load growth is a possibility. Also enables zonal controls for energy savings. Includes home energy management. Standards are emerging IVP6, ANSI/CEA-2045, others. Testing needed to understand impact and to find ways to reduce negative impact. Sometime in cycle 5 LightingAllEfficient lighting and controlsLots of changes happening in lighting. Controls, more efficient products, etc. Test procedures and product validation needed to understand energy impact Likely to be incorporated into RWLR, TTTA or LLLC programs. Advanced HVACComSeparation of conditioned air from ventilation air. Proven to yield savings. Waiting for product options to field test. Likely Ag IrrigationAgExplore irrigation technologies that offer energy savings for large and small farms. Completing finally report on current ag program. Learnings will be applied to new effort. Likely 2016 Existing Building Operation CommercialExploring tools, controls, and training as options for improving building operations. Very difficult to define the skill set, market opportunity, and MT approach. Automated M&V may help support this.

Lower Priority Scanning Projects TechnologySectorDescriptionStatus WindowsResidentialHigh performance <0.25 U value double and triple glazed windows. Market appears to be moving on its own. Lower priority unless new data becomes available. Efficient Power SuppliesIndustrialDIN mounted power supplies typically run at <20% load and at this level they are not efficient. Efficient product is available but not common in the market. 80 plus like program may be needed, but market may move on it is own. Extended Products for Motor Driven Systems Industrial / Commercial Product labeling for systems of pump, motor and controls that maximize efficiency within the required operating conditions. NEEA is participating in national workgroup, but not leading the effort. If an MT opportunity emerges, this may move up in priority. Home Energy Management ResidentialHome displays and feedback that lead to lower energy use by home owners. We are focusing our efforts on automated M&V instead of the display approach for now. Refrigeration Optimization IndustrialDefrost system design and operations for maximum efficiency Limited savings for a complex problem Business ITCommercialCloset data center energy managementNo clear MT opportunity yet. Evaporative RTUsCommercialIndirect / direct evaporative RTUs for replacement of DX systems. No new low cost product options to test. Building Operations Engineering Assessor CommercialBOC+, Bill Clumpner clone for assessing, planning and implementing building operation changes Very difficult to define the skill set, market opportunity, and MT approach. Automated M&V may help support this.

Other Scanning Options TechnologySectorDescriptionStatus Smart ThermostatsResidential and Commercial Thermostats with occupancy sensing and control approaches that improve efficiency Lots of movement in the market. It isn’t clear the savings and MT opportunity. Automated M&V could support savings assessment. RTU ControlsCommercialControl optimization for RTUSThe advanced HVAC project looking at the separation of ventilation from condition air is our priority. Air Distribution SystemsIndustrial and open Commercial Space Fans and other methods of removing stratification of air within large, open and high bay spaces There may be an opportunity, but the savings and MT opportunity are not clear. Compressed Air Improvements IndustrialLeak detection, best practices and other technologies for improving the efficiency of compressed air systems. No one technology seems to be the solution. Small savings and complex approach.

Residential Initiative Marketing

Discussion topics  DHP & HPWH Marketing Strategic Plans  2015 Marketing Plan Development & Coordination  DHP & HPWH Marketing Work Group

NEEA Marketing Process NEEA Program Business Case (Marketing Strategic Plan included as documentation) Annual marketing plans Deliverables & activities Marketing and campaign results Insights Market research, evaluation & analysis Annual marketing report Utility & Market Partner Input & Coordination Utility RPAC members Utility advisory committees Utility program work groups Utility marketing teams Other utility staff Supply chain & industry partners

DHP & HPWH Marketing Strategic Plans  Desired outcome from discussion:  Gain feedback on these plans to inform 2015 annual tactical marketing plans  Identify areas of concern/overlap and way to address these

DHPs  Barriers Marketing Addresses  Slow consumer progress through purchase funnel  High total cost  Weak DHP marketing & training throughout the supply chain  Supply-chain lack of 1:1 displacement approach Aware Familiar Willing to Consider Purchase Intention

DHP Marketing Goals  Amplify and support targeted partner promotions in the market  Increase consumer conversion/purchase, reduce funnel leakage

DHP Marketing Strategies  Key Changes:  Less NEEA-led awareness building activities  More focus supporting upstream promotions  Emphasis on targeting consumers lower in funnel

DHP Marketing Strategies  Ongoing:  Utility and market support (templates, tools & educational resources)  Help facilitate market-led reduced pricing promotions  Low-level awareness activities (i.e. PSAs)  Support retail product presence

Discussion  Any questions or feedback?  What opportunities or concerns do you see?

HPWHs  Barriers Marketing Addresses  High total cost  Product not integrated into standard water heater supply chain  Lack of consumer awareness  Challenging consumer buying experience Aware Familiar Willing to Consider Purchase Intention

HPWH Marketing Goals  Increase supply chain engagement with and promotion of HPWH  Amplify and support targeted partner promotions in the market  Increase consumer awareness of HPWHs

HPWH Marketing Strategies  Key Changes:  More awareness-building in market (top of funnel)  More focus on plumber/contractor base

HPWH Marketing Strategies  Ongoing:  Help facilitate market-led reduced pricing promotions  Utility and market support (templates, tools, educational resources)  Targeting likely to purchase consumers (i.e. propensity models)

Discussion  Any questions or feedback?  What opportunities or concerns do you see?

2015 Marketing Plan Development Meeting with marketing counterparts between now and mid-December to discuss:  What’s worked/not worked in 2014  2015 marketing focus areas (for both)  2015 marketing coordination focus areas

2015 Marketing Plan Development  Any questions or feedback?  Would you like to be included in these meetings?

DHP & HPWH Marketing Workgroup  Focus in 2014 mainly on DHP & HPWH marketing templates & collateral development  2015 focus mainly on DHP & HPWH website updates

Utility Share Outs

Meeting Wrap-up  Public Comment?  Feedback on any of the following?  Meeting overall?  Agenda?  Packet materials?  What was missing?  Anything else?

Thank you!  Thank you all for your time and much appreciated guidance!