DISPUTES & INVESTIGATIONS ECONOMICS FINANCIAL ADVISORY MANAGEMENT CONSULTING ©2015 Navigant Consulting, Inc. July 6, California Potential and Goals Study Overview for IEPR Commissioner Workshop on 2030 Efficiency Goals

1 ©2015 Navigant Consulting, Inc. »Task 1: Potential and Goals Study Update –Inform IOU goals »Task 2: Additional Achievable Energy Efficiency (AAEE) Savings Forecast –Inform planning efforts of the CPUC, CEC, and CAISO »Task 3: Energy Efficiency Targets for Greenhouse Gas Reductions –How can IOU programs and energy efficiency can help meet AB32 goals? »Task 4: Metrics to Support the Strategic Plan Update –Support development of strategic plan by providing potential analysis There are four primary uses of the 2015 and Beyond Potential Study California Potential and Goals Study Topic of Recent Study

2 ©2015 Navigant Consulting, Inc. »The modeling methodology remains the same as the past CPUC Potential Study (2013) »Stage 1 incorporates the following data: –2015/2016 DEER – EM&V studies –Measure Cost Study –CLASS/CSS Saturation Studies –IEPR Data: Retail Rates, Building Stock, and Energy Consumption Forecasts –New research on behavior and financing –CPUC vetted Industry Standard Practice Studies –Updated data on the street lighting market –Updated program cost data (non-incentive costs) »Stage 2 will consider additional data updates and methodology changes This is one of multiple stages to the 2015 Potential and Goals Study; Stage 1 was primarily focused on updating data inputs California Potential and Goals Study

3 ©2015 Navigant Consulting, Inc California Potential and Goals Study Data Update Mapping Model MICS DEER Whole Building Emerging Tech Res/Com Measures CLASS/CSS Measure Cost Study EM&V AIMS ISP Studies IOU Data IEPR 2015 IOU Program Filings Non- Incentive Costs Behavior Financing C&S ISSM Model EM&V Other Behavior Studies Other Financing Studies EM&V Other Studies CEC Title 24 Analysis CPUC Vetted Product Non-CPUC Product Navigant Analysis Output Results Viewer Legend EM&V Historic Program Savings

4 ©2015 Navigant Consulting, Inc. »Scenarios show the range of potential based on changed in input assumptions or policies The IOU goals are informed by the Mid-Case Scenario; low and high scenarios will be run in the future 2015 California Potential and Goals Study MetricLow EE PenetrationMid EE PenetrationHigh EE Penetration Building StockHigh Demand Case from 2014 IEPRMid Case from 2014 IEPRLow Demand Case from 2014 IEPR Retail PricesHigh Demand Case from 2014 IEPRMid Case from 2014 IEPRLow Demand Case from 2014 IEPR Avoided CostsHigh Demand Case from 2014 IEPRMid Case from 2014 IEPRLow Demand Case from 2014 IEPR UESEstimate minus 25%Best Estimate UESEstimate plus 25% Incremental CostsEstimate plus 20%Best Estimate CostsEstimate minus 20% Incentive Level25% of incremental cost50% of incremental costVaries by market maturity TRC Threshold ET TRC Threshold Measure DensitiesBest estimate minus 20%Best EstimateBest estimate plus 20% Marketing Effect1%2%3% Word of Mouth Effect39%43%47% Implied Discount Rate (Non-Res)20%18%14% Implied Discount Rate (Res)70%63%50% C&S Policy ViewOn-the-Books InitiativesExpected InitiativesPossible Initiatives Code complianceNo compliance enhancementsCompliance enhancements Title 24 Tiers Included2005, 2008, , 2008, 2013, , 2008, 2013, 2016, 2019, 2022 Title 20 Tiers Included2005, 2006, 2008, 2009, , 2006, 2008, 2009, 2011, 2013, 2016 Federal Standards IncludedAlready adopted Already adopted and possible future standards

5 ©2015 Navigant Consulting, Inc. All IOUs: Technical, Economic, and Cumulative Market Potential (GWh) 2015 California Potential and Goals Study

6 ©2015 Navigant Consulting, Inc. All IOUs: Technical, Economic, and Cumulative Market Potential (MM Therms) 2015 California Potential and Goals Study

7 ©2015 Navigant Consulting, Inc. All IOUs: Incremental Market Potential as a Percent of Electric Consumption 2015 California Potential and Goals Study Streetlighting is not displayed for ease of viewing trends in other sectors; it averages at 5%. Behavior programs savings are included, C&S program savings are excluded. Sector Level ResultsTotal Results

8 ©2015 Navigant Consulting, Inc. All IOUs: Incremental Market Potential as a Percent of Natural Gas Consumption 2015 California Potential and Goals Study Behavior programs savings are included, C&S program savings are excluded. Sector Level ResultsTotal Results

Key C O N T A C T S ©2010 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. Key C O N T A C T S ©2010 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. Key C O N T A C T S ©2010 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. Key C O N T A C T S ©2014 Navigant Consulting, Inc. 9 Greg Wikler Director San Francisco, CA (415) Greg Wikler Director San Francisco, CA (415)