1. April 12, 2016 High Opportunity Projects and Programs (HOPPs) Proposals

2. AGENDA ItemTopicAllotted TimePresenter 1 Welcome 9:00 – 9:10Hillary Hebert 2 Safety/Housekeeping 9:10 – 9:15EIC Rep 3 Introductions 9:15 – 9:30All 4 Multi – Family HOPPs Presentation 9:30 – 9:55Athena Besa 5 Business Energy Savings LED Presentation 9:55 – 10:20Athena Besa 6 Business Equipment Early Retirement Presentation 10:20 – 10:45Athena Besa 7Break10:45 – 11:00All 8 Building Retrocommissioing (RCx) Presentation 11:00 – 11:25Athena Besa 9Tiered Incentive Custom Calculated Presentation11:25 – 11:50Athena Besa 10Wrap Up/Next Steps11:50 – 12:00Athena Besa 2

3. Objectives Provide overview of SDG&E updated HOPPs proposals. Solicit comments on proposals. 3

4. Multifamily HOP DRAFT4

5. Multifamily HOP Target Market Primary target will be multifamily complex common areas. The MF HOPP will also coordinate income qualified tenants’ energy efficiency with either MIDI and/or ESA programs. Focus on top 10% of oldest MF buildings leveraging Tax Assessor property database.  MF properties older than 1980 with a minimum of 50 tenant units, the analysis yield 394 properties. Over 42% of these properties are located in either low- 25% income or locational needs areas. 5

6. Multifamily HOP Program Design Direct install for common areas regardless of income. The common area measures will be installed at no cost to the property owners. Target early replacements and equipment needs to be in operating condition  Implement a project in-take form to collect project baseline data as recommended by the most recent MF impact evaluation study by Apex/DNV-GL. To participate, the building must have at least one of the following:  Boiler must be dated 1997 or before; minimum two-horse power pool pump; or vending machine without a controller, Primary Measures:  Pool pumps; LED Pool/Spa lights; pool heaters; boilers; vending machine controller; LED exterior fixtures; landscape lighting Provides opportunity to inform MF owners regarding AB 802 benchmarking requirements. Provides technical assistance to participate in Portfolio Manager Benchmarking. DRAFT6

7. Multifamily HOP Savings Approach Use DEER ex-ante values whenever possible and practical and will supplement with measurements when DEER values do not exist. Consider the READI values using both the Above Code and Above Pre- Existing values. Where no Above Pre-Existing savings is given, spot measurements of the existing systems will be used along with engineering calculations to evaluate and develop Above Pre-Existing savings. On site spot measurements will be used to determine appropriate baselines based on existing conditions. SDG&E will design a project in-take form to collect site specific baseline data as a part of project documentation. DRAFT7

8. Multifamily HOP Budget and Savings Forecast Program Budget: $1,694,676 Forecasted Program Savings: 1,392,494 KWH, 87.5 KW and 32,250 therms DRAFT8

9. Business Energy Savings LED Fixture HOP DRAFT9

10. BES LED Fixture HOP Target Market Small to Mid-sized business customers (Less than 200KW) Previously participated in SDG&E’s Business Energy Solutions Program, formerly the Direct Install Program, and who still have stranded lighting opportunities.  Previous customers may have remaining stranded lighting opportunities as they may not have wanted to trigger the 2013 Title 24 requirements because of the associated additional costs and thus stopped their retrofit project at 39 fixtures or declined to pursue a project entirely. Specific customers will be identified by comparing BES audit results to measures installed. 10

11. BES LED Fixture HOP Program Design This is a direct install program with customer co-pay. The program will offer incentives towards the installation of the controls required by code Measures will be 17 eligible measures for Interior, Exterior, and High-Bay LED fixtures  The minimum project size will be 40 fixtures Customer Copays will vary. The range for each category is approximately:  Interior25% - 50%  Exterior70% - 80%  High-Bay70% - 85% Proposed incentives is expected to decrease average customer co- pay. 11

12. BES LED Fixture HOP Sample Measure Offering and Incentives DRAFT12

13. BES LED Fixture HOP Savings Approach Reported savings will be Deemed/DEER based on existing approved workpapers; additionally, actual existing conditions will be recorded to assist in truing up savings and the ex post analysis. Estimating savings to reflect actual existing conditions: – Step 1: Based on the specific fixture being installed, the READI Measure ID will be determined, and the basis for the first savings increment will be the “Above Code Whole Building Impact” savings per READI values. – Step 2: Based on the existing conditions at the site and compared to the baseline condition in READI. If the existing site condition is identical to the READI Pre-Existing Baseline, then no additional savings for site conditions will be claimed. – Step 3: Based on the existing site conditions, the project will document whether occupancy sensors are required by code and being installed as a part of the specific project. When occupancy sensors are required and installed on new fixtures, a third increment of savings is based on the delta-savings between Above Code and Above Pre-Existing savings values in READI. If no occupancy sensors are being installed on the new fixtures, then there are no additional savings. – Step 4: For additional occupancy sensors for existing fixtures not being replaced, the delta-watts between the Above Code savings and the Above Pre-Existing savings directly provides the impact of the occupancy sensors. 13

14. Business Energy Savings LED Fixture HOP Simplified Representative Project A customer with an office building participated in Direct Install three years ago. The audit identified 89 T-12 fixtures that could be upgraded to LEDs. The customer was willing to participate, but didn’t want the added expense of complying with code so elected to install only 39 fixtures. BES LED HOP identifies this customer/project as a good candidate and approaches the customer with the HOP offer, and the customer accepts. The Program replaces the remaining 50 T-12 fixtures with LEDs with built in controls. Additionally, sensors are added to control the previously installed 39 fixtures. The customer immediately receives the enhanced incentive in the form of a lower copay for the installed equipment SDG&E reports the current DEER savings for all installed measures SDG&E will calculate the below code savings based on the 50 T-12s and the savings from the added controls. These savings will be reported at a later date. 14

15. Business Energy Savings LED Fixture HOP Budget and Savings Forecast Budget: $1,098,181 Savings*: 3,745,320 kWh and 489 kW *In addition to the savings indicated above, SDG&E will record the actual pre- existing condition of each installation and calculate the savings to code. These will be reported as an aggregate value at the end of the HOPPS period, but individual project detail will also be provided. 15

16. Business Equipment Early Retirement HOP Target Market 16

17. Business Equipment Early Retirement HOP Target Market Open to all business customers in the C/I/A segments with aging HVAC equipment. – Some old inefficient equipment has been kept in service past its expected useful life. Customers often choose to repair, rather than replace, their aging equipment because the current rebates offered for such measures are insufficient to defray a meaningful portion of new equipment costs. – Such existing equipment may be far below current code. The untapped savings represented by replacing an old inefficient unit with a new efficient one may be considered the stranded savings potential. Expected customers will have large facilities (50,000 sq.ft. or larger), such as large administrative buildings. Customers will be required to provide documentation of repairing equipment past it’s effective useful life. 17

18. Business Equipment Early Retirement HOP Program Design Only specific equipment that are believed to be repaired pasted its effective useful life are included in this program. These measures are:  Efficient Water Source Heat Pumps  Cooling Tower for Packaged Systems  Two-Speed Cooling Tower Fans  Packaged Air Conditioners  Efficient Gas Furnaces Using a deemed rebate, the program will make a single rebate payment based on the measure(s) implemented. The incentives offered through this program align with those offered in the Energy Efficient Business Rebate program. Reported savings values will be based on current DEER for above code savings and 2005 DEER for below code savings if the current version does not include values for Pre-Existing Conditions.  The READI Pre-Existing savings, which includes the Above Code savings if applicable, will account for all claimed savings, except in cases where only Above Code savings are claimed. 18

19. Business Equipment Early Retirement HOP Implementation SDG&E Account Executives and vendors will work with customers to identify equipment from the targeted list that has a history of continuously being repaired rather than replaced Pre-inspection is required to determine the pre-existing equipment.  Customers must demonstrate continued operation of the equipment passed the warranty period; and/or  Document repairs made to the equipment that are not covered by the warranty and have extended the equipment’s use past it’s Effective Useful Life A post-inspection will be conducted to verify the installation of the equipment. 19

20. Business Equipment Early Retirement HOP Budget and Forecasted Savings Budget: $445,333 Savings: 1,998,290 kWh, 1,489 kW, and 280 therms 20

21. Building Retrocommissioning (RCx) HOP 21

22. Building Retrocommissioning (RCx) HOP Target Market Commercial and Industrial customers with large existing buildings (typically > 50,000 sq.ft.) that have not been previously commissioned RCx HOP Objectives include: – Assist customer in identifying upgrades that they typically would not be able to identify on their own, including system enhancements. These projects are usually very costly but can produce large energy savings because of the breadth of the enhancements that take place. – Support the industry standard practice change by requiring the building owner to enroll in a three-year maintenance plan, which includes training and will educate the customer on not only retro-commissioning best practices for their site, but also on the value of retro-commissioning in general. – Provides additional opportunity to inform MF owners regarding AB 802 benchmarking requirements. – Provide technical assistance to participate in Portfolio Manager Benchmarking. 22

23. Building Retrocommissioning (RCx) HOP Program Design Combines traditional retro-commissioning with monitoring-based commissioning Provides, at no customer cost, a Commissioning agent who can work one- on-one with the customer to help them understand and identify the tangible benefits of optimizing their equipment and systems Incentives will be provided to reduce the payback period of identified tune- up measures to 2 years. Each project will include monitoring, which will provide the customer with measurable benefits on an ongoing basis Each project will use the Custom Calculated method of determining energy savings. This method will include:  The CMPA process  Calculation methodologies based on one year of pre-project meter data and two years of post-project meter data.  Projects and measures which do not markedly affect the whole building consumption will be sub-metered. 23

24. Building Retrocommissioning (RCx) HOP Program Implementation The third-party commissioning agent will conduct a no-cost survey of the customer facility The commissioning agent will provide the customer with a report of equipment and system enhancement recommendations that will include project costs, incentives, and estimated energy savings. The customer agrees to project scope, including obvious repairs and routine maintenance. The customer also is required to sign up for a three year maintenance plan, which includes training on how to properly maintain the system enhancements. The project is initiated and incentive payments are based upon the project’s actual annual kWh energy savings obtained and proven by the M&V activity. – 60 percent is paid upon the installation of the energy efficiency measure(s) – The final 40 percent is paid after M&V. If needed, the total incentive amount will be adjusted based on the actual energy savings 24

25. Building Retrocommissioning (RCx) HOP Budget and Forecasted Savings Budget: $1,780,909 Savings: 5,185,078 kWh, 20 kW, and 442,152 therms 25

26. Tiered Incentive Custom Calculated HOP 26

27. Tiered Incentive Custom Calculated HOP Target Market Summary Mid-sized to large-sized (above 200kW) non-residential SDG&E customers with retrofit opportunities for large To-Code and Above Code energy savings Tiered Incentive will target customers who have large To-Code and Above Code projects that have previously been rejected or those with known equipment that has not been replaced due a lack of incentives.  Historically, SDG&E was unable to provide incentives for projects that yield only To-Code savings. This has created stranded savings in these projects.. 27

28. Tiered Incentive Custom Calculated HOP Design This program will only target high opportunities projects. A project must meet all of the following requirements:  Electric projects must save a minimum of 500,000 kWh annually, and/or  Natural gas projects must save a minimum of 25,000 therms annually;  All EE measures must be retrofits or replacements of existing, operating equipment; and  Baseline calculations will requires a minimum of 1-year pre-application of prior metered data All non-deemed measures will be eligible for this program. 28

29. Tiered Incentive Custom Calculated HOP Incentive Design Tiered Incentive will include both a standard incentive and a performance bonus based on actual savings achieved  The standard incentive will be based on the end-use rates in the table below:  The Performance Bonus will be a percentage bonus added to the incentive and paid based on the percent of overall building load reduced according to the rates in the table below. Total project incentive cannot exceed 50% of the total project cost. 29

30. Tiered Incentive Custom Calculated HOP Budget and Forecasted Savings Budget: $1,130,356 Savings: 5,235,082 kWh, 579 kW, and 78,261 therms 30

31. Next Steps Current Schedule – Interested stakeholders can provide written comments to SDG&E by Wednesday (4/13) 3pm. – This week: Finalize all proposals considering all input – Last week of April: file Supplemental Advice Letters Implementation Schedule – As HO custom projects are developed, these will be submitted via CMPA for implementation approval – All filed HO programs are expected to be effective consistent with AL Tier 1 schedule. 31