Guidelines Revisions Defining What RTF Means by “Savings” December 17,

Treating Energy Efficiency as a Resource Implications for Defining Savings Power Act: – Resources are actual or planned load reduction resulting from a conservation measure”. 1st year might be “actual” or “historical savings” Planned savings might represent savings over the life of the measure – A resource must be “reliable and available within the time it is needed” (i.e., the reliability of EE must be comparable to other resources) Near term need might be satisfied by estimates of “first year” savings Long term need requires estimate of “persistent savings” – The Council (and BPA) are to account for historical experience with similar measures when determining the amount of power that a conservation measure may be expected to save Treatment of EE as resource, requires internal consistency between baseline used in load forecast and baselines used for savings estimates – Note: targets based on current practice are lower than those based on “existing conditions” People are using RTF savings in their cost-effectiveness analyses to make investment decisions – Cost-effectiveness calculations assume savings persist for the life of the measure 2

Process for Reaching Agreement on RTF Savings Definition Focus on UES measures Discuss options for four parts of the definition – Baseline for Current Practice – Remaining Use Life (RUL) – Baseline for Pre-Conditions – Measure interactions After meeting, members vote and explain why – See draft voting template Discuss voting and decide at subsequent meeting 3

Example Measures Current Practice – CFL’s – Clothes washers Pre-Conditions – Weatherization & Heat Pump Conversions – Refrigerator Early Decommissioning 4

Current Practice Baseline – Council’s Plan Council’s Plan: Use Baseline from Council Plan – Based on knowledge at start of Council 20 year forecast of Recent market choices Upcoming codes and standards – RTF baseline would remain constant for five years (until a new Plan). – Pro’s Simple, less updating. Aligns perfectly with Plan baseline. – Con’s For rapidly moving markets, doesn’t give programs feedback on real market. Utilities often need data more frequently (2-year IRP cycle). 5

Current Practice Baseline – Today’s Market Today’s Market: Use recent data on market choices to set a baseline for each measure’s sunset period – Based on direct observations of the current market – beginning of sunset period. – Remains constant for savings sunset period – Pro’s Helps programs adjust to rapidly moving markets. Does not require forecasting. – Con’s Likely to overstate program savings over the sunset period if market changing fast. Savings not comparable to Council baseline – so target tracking requires estimating savings since Council Plan. 6

Current Practice Baseline – Forecasted Market Forecasted Market: Estimate market choices over the sunset period – Savings could be average over sunset period or end-point of period – Sunset period could be one to five years (limit in current guidelines) – Pro’s Helps programs adjust to rapidly moving markets. Attempts to get savings correct over sunset period. – Con’s Requires forecast of baseline conditions over sunset period. Longer sunset period require longer forecasts which are less certain Savings not comparable to Council baseline – so target tracking requires estimating savings since last Council Plan 7

Estimating RUL: Options Assume any measure with a pre-conditions baseline has RUL = EUL. Generally assume RUL=EUL, but allow a case to be made for exceptional measures Use a simple rule (for example RUL is 1/3 of EUL) Use a simple rule but allow exceptions Forecast the average RUL during each sunset period Remove Pre-Condition Baseline from Guidelines – always use current practice, assuming RUL = 0. 8

Pre-Conditions Baseline: Options Today’s Conditions: Data on typical conditions (RBSA, etc.) at the beginning of each measure’s sunset period – Based on direct observations of the market Forecasted Conditions: Estimate of “average” typical conditions over the sunset period – Requires short-term forecasting 9

Measure Interactions Currently the Guidelines say… – “Interaction is significant if the RTF determines that it is likely to account for more than 10% of the measure savings.” Measure identifiers can be used to account for some measure interactions – Example: For an attic insulation measure, measure definition depends on whether there is a heat pump There would be one UES for “with heat pump”, and one UES for “without a heat pump”. – Requires more data to be collected by programs – Should this strategy be recognized by the Guidelines? 10

Measure Interactions – Other Strategies Strategies other than measure identifiers – None. Do what programs will tolerate with measure identifiers – Estimate based on “full package” (LMI, Option 3, etc.) End of sunset period End of EUL End of planning period – Estimate based on program evaluation findings Requires sample data on what measures were present when each measure was installed, and which measures were installed simultaneously Effectively defines the baseline conditions for each measure – Estimate based on general population characteristics Same as above, but data not tied to recent participants. 11