VAEEC Spring Meeting May 11, 2015

Overview of Columbia Gas of Virginia Third largest natural gas utility in VA Serve over 250,000 customers Large, diverse service territory Energy Efficiency program began in 2010 and has helped customers save over $4.5 million on their natural gas bills to date

The Natural Gas Conservation and Ratemaking Efficiency Act (CARE) Enacted by the Virginia General Assembly in 2008 Encouraged natural gas conservation and ratemaking efficiency plans Education/promote wise use of natural gas Allowed for alternative rate designs (decoupling)

CARE Act Modifications During the 2015 Legislative Session McAuliffe Administration proposed amendments in support of the Virginia Energy Plan. Modified CARE to provide clarity of definitions and cost allocations. The legislation was approved and becomes effective on July 1, 2015

Amended CARE Act Clarified the definitions of: – “Measure” as “an individual item, service, offering, or rebate available to a customer of a natural gas utility’s conservation and ratemaking efficiency plan.” – “Program" as “a group of one or more related measures for a customer class.” – "Portfolio" as “the program or programs included in a natural gas utility's conservation and ratemaking efficiency plan.”

Amended CARE Act Also clarifies how administrative and education and outreach costs are to be assigned: – Administrative costs to the portfolio as a whole – Education and outreach costs to the program and not to individual measures within a program – When such administrative, education, or outreach costs are not otherwise directly assignable.

Amended CARE Act Columbia understands this language to be applied during the cost-effectiveness screening as follows: – CARE Plan management and administrative costs should be considered at the portfolio level – Program-specific education and outreach costs should be considered at the program level – When not directly assignable