TV Initiative Transition to Long-Term Monitoring and Tracking Great to be with you today talking about why the TV Initiative team believes now is the time to move the TV initiative from Market Development to Long-Term Monitoring and Tracking. I am here on behalf of the team looking for your input prior to taking the proposal to NEEAs directors. There was a webinar on March 25 that many of you attended so my presentation today will be focused on the indicators for transition rather than the history of the initiative. Ty Stober April 8, 2014

Desired Outcomes Hear input on transition Support transitioning to Long-Term Monitoring and Tracking Investment in TVs was positive for region I have three main objectives for the presentation: To hear your thoughts about the transition Confirming your support for the transition to Long-Term Monitoring and tracking Want you to feel like the investment was positive for the region

Televisions – Market Transformation Leverage mid-stream incentives to influence retailer buying practices, ultimately driving the manufacturing, product specifications and standards of energy-efficient televisions. MARKET BARRIERS INTERVENTIONS OUTCOMES Consumers pay attention Dominant market share for TVs that meet program specifications ENERGY STAR assists standards implementation Consumers weren’t aware or concerned So, manufacturers and retailers didn’t care Resistance to standards Marketing links EE and Advanced Technology Super Regional market power to influence retailers Drive ENERGY STAR specification To bring us all back to the base level understanding of the initiative, I am going to walk through the theory of market transformation for the TV initiative. [Click] When the initiative began, three key barriers were identified. When making a $1000 plus purchase, consumers were not aware of or concerned about the set’s energy consumption. Because consumers didn’t care, the retailers and manufacturers didn’t care, though manufacturers did have the capability of making more efficient products. Additionally, manufacturers and trade associations were resistant to any standards and had worked to keep even the ENERGY STAR specification at a level that allowed 80% of available models to qualify. The challenge was to find the weak links in order to overcome these barriers. Changing consumer awareness – not to mention attitudes – is extremely expensive so marketing needed to be as focused which led to the creation of the Most Efficient message. Consumers posed the additional challenge that they would not be motivated by a $25 direct incentive on a $1000 TV. Manufacturers also posed a challenge in that they are evaluating their portfolio based on the global market with little concern for the West Coast, let alone the Northwest, and show great disdain for any regulation loudly complaining it will stifle innovation. Retailers, we learned, were using televisions as a loss-leader. In order to get customers in the door to buy higher margin products, they were minimizing their television profits. They believed an inexpensive TV would attract consumers and this belief caused them to stock products that were not energy efficient. [Click] NEEA developed a strategy to attack all three barriers. [Click] The theory is to leverage mid-stream incentives to influence retailer buying practices, ultimately driving the manufacturing, product specifications and standards of energy-efficient televisions. The introduction of flat screen TVs, the increasing availability of high definition programming, and the mandate to transition to digital broadcast was driving rapid demand growth, created great urgency for the region’s utilities and presented a narrow window for market transformation. The goal was to accelerate the adoption of more efficient technology to slow plug load growth. [Click] If the theory was correct, efficient TVs would outnumber inefficient models leading to the year-over-year increases in the average efficiency of models in the retail store. If the average TV set on the showroom floor becomes dramatically more efficient, consumers do not even need to care about the energy consumption of the model they chose. The program being run consistently over multiple years will lead manufacturers to anticipate retailers requesting even more efficient products each year. Pushing the ENERGY STAR specification to be more aggressive will also encourage manufacturers to increase the pace of efficient technology adoption.

Average TV Energy Consumption TV’S: Use 56% Less Energy Than Pre-Program! This slide tells the story. Over the course of the initiative, the average television has decreased energy consumption by [click] 56%. That has happened even as televisions have gotten larger and included more technologies like Wi-Fi, 3D and smart interfaces. In 2011, TVs passed the incandescent light bulb and dropped below 100 watts. ENERGY STAR 5 Effective

TV Initiative Ready to Transition Televisions are more energy efficient Energy Efficiency standard feature Qualified products sold ENERGY STAR is consistently improving Plan to advance standards The TV team believes we are ready to transition for the following reasons: [Click] As the previous slide demonstrated, televisions are dramatically more efficient than in 2009 [Click] Energy Efficiency has become a standard feature. One indication of that was the number of ENERGY STAR televisions that were featured on the cover of 2013 black Friday circulars. [Click] Products that met the initiatives criteria of being at least 20% more efficient than ENERGY STAR reached 50% in the last quarter of 2013. [Click] ENERGY STAR is consistently moving its base specification and Most Efficient program forward. [Click] And NEEA has a low-cost plan to continue moving towards standards.

TV Energy Savings $0.007/kWh Today 2013 Goal 27.7 aMW 167 120 Total Regional Savings 78 44 20 6 TVs have contributed significantly to the region’s efficiency goals. [Click] We achieved 34.7 aMW of savings in 2013. The goal was 27.7 aMW. The difference was caused by the shift to larger TVs that consumed less energy than projected. The 20-year projected total regional savings for the initiative 358 aMW. NEEA has a portfolio goal of delivering savings for an average of 3.5₵ per kilowatt/hour. [Click] The Television initiative has a cost of 7/10th of a penny per kilowatt hour. But as year-over-year decreases in energy savings become less, our incremental cost of savings increases. There are additional savings to be gained from Televisions and it is time to utilize more cost effective means to extract them.

Activities during LTMT Monitor market trends Participate in ENERGY STAR process Participate in DOE standards process Support state standards Long-Term Monitoring and Tracking will allow us to continue to extract savings at significantly reduced costs to the region. There are four main activities that NEEA will continue to pursue. [Click] We will be monitoring the market to ensure expected energy savings are achieved. [Click] We will comment on the ENERGY STAR standard, making sure it continues to push the upper end of the market. [Click] We will participate in the development of DOE standards when that process begins. [Click] And while the Washington State legislature adjourned before considering an efficiency standard in 2014, we will continue to engage with interested parties to encourage the future adoption of a TV standard and will work with Oregon to advance the stringency of their standard over time.

Discussion What are your concerns with the Television Initiative moving to Long-Term Monitoring and Tracking? What additional areas need to be addressed as NEEA transitions the Initiative? What topics would you like to see addressed in final (2013) Market Progress Evaluation Report? I want to open up the conversation with you to seek your feedback. What concerns do you have about moving to Long-Term Monitoring and Tracking? Are their additional areas that you believe we should address during this transition? Do you have suggestions for us for the final market progress evaluation report that covers 2013?

Review Desired Outcomes Support transitioning to Long-Term Monitoring and Tracking Concerns about transition have been heard Investment in TVs was positive for region I really appreciate your feedback and will include your comments in my report to NEEA’s directors. Based on the objectives I laid out for our time today, from your comments I hear: [Click] We do/do not have your support for transitioning [Click] I hope you feel your concerns have been heard, but I want to give a last opportunity for you to share any more comments [Click] The TV initiative has gained the region a great deal of savings, but also the non-energy benefit of being considered a model for creating market change. I would ask that you use the post-meeting evaluation to share your opinion on the value of the initiative to the region. Thank you.