Vermont Electric Energy Efficiency Potential Study – Draft Findings April 10, 2006

GDS Associates, Inc. 2 Overview of Presentation Key findings from draft report of April 9, 2006 –Load forecast for Vermont (1.5% a year before DSM, 1.0% a year after DSM) –mWh savings potential – base case –Sources of electric energy savings potential –Cost effectiveness results –Annual implementation costs –Rate impacts Key assumptions Findings by Sector

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4 mWh Savings Potential

GDS Associates, Inc. 5 Key Sources of Savings Potential for Max. Ach Cost Effective Base Case Residential – lighting, electric water heater fuel conversion, space heat fuel conversion, standby power Commercial – lighting, refrigeration, cooling Industrial – industrial lamps and fixtures, motors

GDS Associates, Inc. 6 Cost Effectiveness Findings- Societal Test

GDS Associates, Inc. 7 Annual Implementation Costs – Base Case Base case assumes EVT pays incentives equivalent to 50% of incremental measure costs Annual incentives costs are $17.4 million Total annual implementation costs are $39.5 million

GDS Associates, Inc. 8 Rate Impacts – Base Case Annual implementation costs are $39.5 million Annual kWh sales decline by 19.4% by 2015 Lost revenues are calculated based upon VDPS forecast of retail rates in Vermont Savings to Vermonters based on AESC Study Group avoided generation costs and avoided T&D costs provided by VDPS staff

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10 Key Assumptions New benefit/cost screening model Line losses Reserve margin Electric avoided costs and fossil fuel prices Externality adders Maximum achievable penetration rate for efficiency measures

GDS Associates, Inc. 11 New Benefit-Cost Screening Model Built by GDS Associates over the past five years Operates in an Excel environment Has been approved by regulators in other States Can handle over 110 energy efficiency measures User-friendly and easy to use

GDS Associates, Inc. 12 Key Assumptions – Line Losses

GDS Associates, Inc. 13 Key Assumptions for Electric Avoided Costs Electric generation avoided costs for Vermont – from December 2005 AESC Study Group report Fossil fuel prices - from December 2005 AESC Study Group report T&D avoided capacity costs – from VDPS ($163 per kW in 2005 dollars) Reserve margin of 13.8% provided by VDPS staff

GDS Associates, Inc. 14 Key Assumptions for Externality Adders for Vermont Societal Test Non – energy benefits adder of $.0081 per kWh saved (in 2005 dollars) applied to electricity savings Non – energy benefits adder for fossil fuel savings obtained from VDPS staff Costs of electric energy efficiency measures reduced by 10%

GDS Associates, Inc. 15 Key Assumptions for Maximum Penetration of Efficiency Measures Maximum penetration rate of 80% for base case where incentives of 50% of incremental cost are paid (base case) Maximum penetration rate of 85% for base case where incentives of 100% of incremental cost are paid (high incentives case)

Residential Sector Findings April 10, 2006

GDS Associates, Inc. 17 Vermont Residential Sector Much has already been accomplished in VT EVT has already saved a significant amount of electric energy and demand This is equivalent to a significant percentage of 2005 annual kWh sales in Vermont

GDS Associates, Inc. 18 Residential Savings Summary Significant cost effective electricity savings potential still exists Important to understand how electricity is used in the residential sector Residential sector is forecast to have the fastest kWh sales growth for 2006 to 2015 (1.6%) Majority of savings potential is in lighting and electric water heater fuel conversion

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Commercial Sector Findings April 10, 2006

GDS Associates, Inc. 25 Commercial Sector Summary Significant cost effective electricity savings potential still exists Important to understand how electricity is used in the commercial sector Commercial sector is forecast to have the slowest growth for 2006 to 2015 (0.5% a year) Majority of savings potential is in lighting and refrigeration end uses

GDS Associates, Inc. 26 VT Commercial Sector Segmentation Industry Type Percent of kWh SalesSIC Categories 1 Light Mfr / Wholesale 23%20-39, 42, Retail 15%52-53, 55-57, 59, 72, Food Sales 14%54, 58 4 Other 11%01-09, 11-17, 40, 41, 44-49, 84-86, 99 5 Schools 10%82 6 Lodging 9%65, 70 7 Health Care 7%80, 83 8 Office 6%60-64, 66-67, 73, 81, Dairy 4%24 10 Ski Areas 2%799 Total100%

GDS Associates, Inc. 27 VT Commercial Sector Segmentation

GDS Associates, Inc. 28 Commercial Measures Summary Note: All measures were analyzed separately for each of the ten building types.

GDS Associates, Inc. 29 Commercial Energy Efficiency Potential Savings Summary

GDS Associates, Inc. 30 Commercial Energy Efficiency Potential Savings Summary

GDS Associates, Inc. 31 Breakdown of Commercial kWh Savings for Existing Commercial Buildings

GDS Associates, Inc. 32 Breakdown of Commercial kWh Savings for New Commercial Buildings

GDS Associates, Inc. 33 Commercial Sector Supply Curve for Existing Buildings

GDS Associates, Inc. 34 Commercial Sector Supply Curve for New Buildings

Industrial Sector Findings April 10, 2006

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