1. Contact Information Gordon Monk Energy Utilization Manager Tel: (604) 592-7970 Fax: (604) 576-7122 E-mail: gordon.monk@terasengas.comgordon.monk@terasengas.com www.terasengas.com Building an Efficient Boiler Program from the Ground Up ENERGY STAR Participants Meeting Ottawa, May 11, 2005

2. Presentation Outline Introduction Building from the ground up (from the Efficient Boiler Program perspective) Background Research Program Design Program Implementation & Marketing Conclusions

3. Introduction Terasen Inc. formerly BC Gas 4.6 Billion in assets 2046 employees traded on TSX provides 60% of energy in B.C. Terasen Gas Inc. wholly owned subsidiary 875,000 customers 48,000 km of pipeline 150 Communities

4. Introduction Demand Side Management (DSM) Definition: Modify or influence the way customers use energy DSM programs since 1991 Programs must pass cost-benefit tests Partnering has facilitated increased DSM activity

5. Introduction 2005 New Programs: Forecast Annual Reductions 170,000 GJ 21,000 GJ 72,000 GJ 65,000 GJ

6. Background Research Commercial Boiler Market Share in B.C. (Estimated) 70 % 20 % 10 %

7. Background Research Understand market before program design StakeholderResearch Approach ManufacturersInterviews and Industry Meetings - Understand ratings (CSA 4.9, BTS2000) TradeInterviews - Understand barriers & training needs CustomerMarket share and end-use research - Incremental cost: incentives up to 50% - Payback: 3-5 year private sector/10 years public - understand limits in conversion market - consider training needs of equipment operator PartnersKeeping them informed

8. Background Research “Hearing concerns” = “Hearing barriers” Concerns (from Interviews) Response (for Boiler Program) Sizing (75% of boilers over-sized) Design incentive (towards Engineering costs) Cost of ventingVenting incentive (50% of Modifications) Ongoing maintenancePerformance bonus (weekly diagnostics) ReliabilityWarranty requirement (two years) Installed efficiencyRequirements (eg., fully modulating, forced/induced draft) Lack of trade knowledgeTraining/Support component in program Large Price StepsFormula-based price incentive Near Condensing Boilers: $4000 / boiler + $2.00 / MBH Condensing Boilers: $4000 / boiler + $6.00 / MBH

9. Program Design Use program criteria to improve efficiency Standards (eg., CSA 4.9, BTS2000) - consider future U.S. and Canadian standards - understand mechanics of different standards - ability of manufacturers to certify Technical Program Requirements Examples: - Forced or induced draft burner - Fully modulating turndown ratio <= 50% - Condensing Boiler inlet water temp not to exceed 49 o C - Intermittent ignition

10. Building a New Program Program Implementation & Marketing Consider requirements for unique markets Examples from Boiler Program: One-on-one marketing Support materials and case studies to engineers & mechanical contractors Pre-installation review & approval Program specific training and seminars for builders and developers Industry advertisements Technical support

11. Efficient Boiler Program Conclusions: Highly technical = longer program development Highly technical = Industry may tend to wait until launch dates to actually review materials carefully For new programs in competitive industries, information is not necessarily “free flowing” The devil is in the details!

12. Efficient Boiler Program For more information, please contact: Gordon Monk, P.Eng. Energy Utilization Manager Terasen Gas Inc. Tel. 604-592-7970 E-mail: Gordon.Monk@terasengas.comGordon.Monk@terasengas.com