1. ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY DISPUTES & INVESTIGATIONS ECONOMICS FINANCIAL ADVISORY MANAGEMENT CONSULTING August 21, 2012 P HASE II: U NIT E NERGY S AVINGS (UES) M EASURE C OMPLIANCE : RTF M EETING Navigant Presentation Presented by Mohit Singh- Chhabra, Ryan Firestone and Kevin Cooney Navigant Reference: 150283

2. 1 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Content of Report This presentation was prepared by Navigant Consulting, Inc. exclusively for the benefit and internal use of Regional Technical Forum and/or its affiliates or subsidiaries. No part of it may be circulated, quoted, or reproduced for distribution outside these organization(s) without prior written approval from Navigant Consulting, Inc. The work presented in this report represents our best efforts and judgments based on the information available at the time this report was prepared. Navigant Consulting, Inc. is not responsible for the reader’s use of, or reliance upon, the report, nor any decisions based on the report. NAVIGANT CONSULTING, INC. MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED. Readers of the report are advised that they assume all liabilities incurred by them, or third parties, as a result of their reliance on the report, or the data, information, findings and opinions contained in the report. June 21, 2012 ©2011 Navigant Consulting, Inc. All rights reserved. Navigant Consulting is not a certified public accounting firm and does not provide audit, attest, or public accounting services. See www.navigantconsulting.com/licensing for a complete listing of private investigator licenses. Investment banking, private placement, merger, acquisition and divestiture services offered through Navigant Capital Advisors, LLC., Member FINRA/SIPC.www.navigantconsulting.com/licensing

3. 2 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Contents Table of Contents 2 Overview of Measures to Brought into Compliance 3Domestic Hot Water Heaters 4Residential Freezers 1Introductions 5Residential Clothes Washers 5Conclusions & Next Steps

4. 3 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Contents Table of Contents 2 Overview of Measures to Brought into Compliance 3Domestic Hot Water Heaters 4Residential Freezers 1Introductions 5Residential Clothes Washers 5Conclusions & Next Steps

5. 4 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Introductions The Navigant Team Working on Updating Measure Workbooks:

6. 5 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Contents Table of Contents 2 Overview of Measures to Brought into Compliance 3Domestic Hot Water Heaters 4Residential Freezers 1Introductions 5Residential Clothes Washers 5Conclusions & Next Steps

7. 6 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Updates Required to Bring Measures Into Compliance Overview The Recommendation memoranda outlined updates required to bring the ten UES measures into compliance. These actions, are presented below for the first three measures completed:

8. 7 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Contents Table of Contents 2 Overview of Measures to Brought into Compliance 3Domestic Hot Water Heaters 4Residential Freezers 1Introductions 5Residential Clothes Washers 5Conclusions & Next Steps

9. 8 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Actions Taken to Bring Measure Into Compliance Domestic Hot Water Heaters

10. 9 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Previous Measure Savings Domestic Hot Water Heaters

11. 10 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Updated Measure Savings Domestic Hot Water Heaters

12. 11 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Contents Table of Contents 2 Overview of Measures to Brought into Compliance 3Domestic Hot Water Heaters 4Residential Freezers 1Introductions 5Residential Clothes Washers 5Conclusions & Next Steps

13. 12 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Actions Taken to Bring Measure Into Compliance Residential Freezers Enhanced documentation for assumptions and sources. Updated cost and energy consumption values based on latest available information. Streamlined workbook to only present data necessary for analysis.

14. 13 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Point for Discussion: Market Penetration of Residential Freezers Residential Freezers * Market penetration rate used in previous version of residential freezer analysis **Current market penetration rate used in analysis. SourceSuggested ValueVintageNotes DnR International* 10% 2010 This was the professional opinion of a DnR International employee. This was used for the last update EPA Regional Data**32%2010Specific to the Northwest Region CEC Database55%2012 This source is California specific and does not represent Market penetration, but it represents equipment available for purchase

15. 14 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Comparison between previous and updated values Residential Freezers ProCost Full Measure Name Incremental Capital Cost ($/unit) Measure Life (years) Annual Savings @ Site (kwh/yr) Total Societal Benefit / Cost Ratio (TRC B/C Ratio) Energy Star Freezer (no tiers)42232 13.7 Energy Star Freezer - Tier 1 (10% to 15% more efficient than federal standard) 22223 15.6 Energy Star Freezer - Tier 2 (15% to 20% more efficient than federal standard) 62244 11.4 Energy Star Freezer - Tier 3 (20% to 25% more efficient than federal standard) 122264 8.3 Energy Star Freezer - Tier 4 (25% to 30% more efficient than federal standard) 232285 5.9 Energy Star Freezer - Tier 5 (30% to 35% more efficient than federal standard) 7322125 2.7 Values are aggregated by Energy Star Tier, freezer configurations include any defrost, upright automatic and manual defrost, and upright freezer. Updated Values ProCost Full Measure Name Incremental Capital Cost ($/unit) Measure Life (years) Annual Savings @ Site (kwh/yr) Total Societal Benefit / Cost Ratio (TRC B/C Ratio) Energy Star Freezer (no tiers)4204215.3 Energy Star Freezer - Tier 1 (10% to 15% more efficient than federal standard) 3203616.7 Energy Star Freezer - Tier 2 (15% to 20% more efficient than federal standard) 7205512.3 Energy Star Freezer - Tier 3 (20% to 25% more efficient than federal standard) 1320758.8 Energy Star Freezer - Tier 4 (25% to 30% more efficient than federal standard) 2220946.4 Energy Star Freezer - Tier 5 (30% to 35% more efficient than federal standard) 40201144.3 Previous Values

16. 15 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Increased residential freezer baseline efficiency reduces incremental cost and energy savings for Tier 1 to Tier 4 Energy Star freezers. Residential Freezers Residential freezers has become more efficient since the last freezer review, bringing the baseline freezer efficiency to be 5% more efficient than federal standard (as opposed to 2% more efficient than federal standard from last review). Both updated incremental cost values and energy savings values decrease for Energy Star Tier 1 to Tier 4 freezers due to increase baseline efficiency. The updated incremental cost and energy savings of Tier 5 freezers increased. Tier 5 freezers show a different trend than other Energy Star Tiers as the cost curve used in this analysis has an exponential distribution. As the average efficiency of Tier 5 freezers increases, the cost of the freezers increases exponentially. Updated values decrease the TRC ratio for all Tiers, all updated TRC values range from 2.7 to 15.6.

17. 16 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Contents Table of Contents 2 Overview of Measures to Brought into Compliance 3Domestic Hot Water Heaters 4Residential Freezers 1Introductions 5Residential Clothes Washers 5Conclusions & Next Steps

18. 17 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Actions Taken to Bring Measure Into Compliance Residential Clothes Washers

19. 18 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Previous Measure Savings Residential Clothes Washers Measure Name Incremental Capital Cost ($/unit) Measure Life (years) Avg. Annual Savings @ Site (kwh/yr)* Avg. Annual Savings @ Site (Therm/yr)** Avg. Total Societal Benefit / Cost Ratio (TRC B/C Ratio)** Energy Star Clothes Washer (MEF 2.00 or higher) $ 80.4314952.75.7 CEE Tier 2 / WA State Tier 1 Clothes Washer (MEF 2.00 to 2.19 ) $ 36.7214561.58.1 WA State Tier 2 Clothes Washer (MEF 2.20 to 2.45) $ 107.0914882.54.2 WA State Tier 3 Clothes Washer (MEF 2.46 or higher) $ 245.67141293.72.4 Energy Star Top 10% Clothes Washer (MEF 2.70 or higher) $ 209.16141414.13.0 * Aggregated for fuel and dryer types. Includes wastewater energy ** Aggregated for fuel and dryer types.

20. 19 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Updated Measure Savings Residential Clothes Washers * Aggregated for fuel and dryer types. Includes wastewater energy ** Aggregated for fuel and dryer types. Measure Name Incremental Capital Cost ($/unit) Measure Life (years) Avg. Annual Savings @ Site (kwh/yr)* Avg. Annual Savings @ Site (Therm/yr)** Avg. Total Societal Benefit / Cost Ratio (TRC B/C Ratio)** Energy Star Clothes Washer (MEF 2.00 or higher) $ 95.3414651.83.1 CEE Tier 1 Clothes Washer (MEF 2.00 to 2.19) $ 76.3814150.41.1 CEE Tier 2 Clothes Washer (MEF 2.20 to 2.39) $ 120.3414421.21.8 CEE Tier 3 Clothes Washer (MEF 2.40 or higher) $ 91.0614862.44.0 WA State Tier 1 Clothes Washer (MEF 2.2 to 2.45) $ 134.9214451.31.7 WA State Tier 2 Clothes Washer (MEF 2.46 or higher) $ 118.5314922.63.2 Energy Star Top 10% Clothes Washer (MEF 3.13 or higher) $ 328.25141233.41.4 NOTE: Updated CEE and WA State efficiency criteria resulted in two additional measure categories.

21. 20 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY In the previous res clothes washer RTF workbook, OR tax credit data (vintage: 2007) was used to inform the base and efficient machine costs. In the current workbook, Navigant considered two methods of updating machine costs: –Method 1: Use ETO clothes washer incentive cost data to inform the efficient case machine costs and manufacturer retail costs (from manufacturer websites) to inform the costs of non-efficient machines. –Method 2: Use a single cost source, a Home Depot located in the Northwest (Portland, OR), to inform both the efficient case and non-efficient case machine costs. Point for Discussion: Incremental Cost Source(s) Residential Clothes Washers

22. 21 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY The following tables show the machine costs and incremental costs that result from the two cost methods: Point for Discussion: Incremental Cost Source(s) (continued) Residential Clothes Washers Retail Cost, Normalized to CEC Baseline Volume ($2006) Cost MethodBaseline Any Energy Star, January 2011 CEE Tier 1CEE Tier 2CEE Tier 3 WA State Tier 1 WA State Tier 2 Energy Star Top 10% Method 1 $ 649 $ 744 $ 725 $ 769 $ 740 $ 784 $ 768 $ 977 Method 2 $ 661 $ 795 $ 527 $ 824 $ 834 $ 874 $ 838 $ 1,036 Incremental Cost, Normalized to CEC Baseline Volume ($2006) Cost MethodBaseline Any Energy Star, January 2011 CEE Tier 1CEE Tier 2CEE Tier 3 WA State Tier 1 WA State Tier 2 Energy Star Top 10% Method 1 $ - $ 95 $ 76 $ 120 $ 91 $ 135 $ 119 $ 328 Method 2 $ - $ 134 $ (134) $ 163 $ 173 $ 213 $ 177 $ 375

23. 22 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY The RTF res clothes washer workbook has assumed a 65°F ∆T for the entire Northwest region. Navigant was asked to look at various climate zones in the Northwest to see the effect of different mains water temperatures on measure savings. The DOE’s Building America Research Benchmark spreadsheet tool was used to calculate mains water temps, and the associated delta T’s, for three heating zones in the NW. Point for Discussion: Effect of Climate Zone on Measure TRC B/C Residential Clothes Washers Heating Zone Average Mains Temp (°F) Delta T (°F) 157.862.2 253.566.5 350.070.0 Zone 1 includes: Yakima, WA; Tacoma, WA; Portland, OR; Seattle, WA Zone 2 includes: Spokane, WA; Klamath Falls, OR; Livingston, MT; Billings, MT Zone 3 includes: Idaho Falls, ID; Butte, MT; Missoula, MT; Great Falls, MT

24. 23 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY The following table shows the maximum and average percent changes in the TRC B/C ratios of clothes washer measures, when the heating zone-specific delta T’s are compared to the current assumption of 65°F: Point for Discussion: Effect of Climate Zone (continued) Residential Clothes Washers Change in TRC B/C Ratio Heating Zone 1 (62.2°F ∆T) Heating Zone 2 (66.5°F ∆T) Heating Zone 3 (70°F ∆T) Maximum Change 0.57%0.37%1.21% Average Change -0.04%0.02%0.06%

25. 24 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Previously, commercial clothes washer data was used as the basis of comparing dryer energy to remaining moisture content: Average commercial tub volume in this study: 2.8 ft^3 Point for Discussion: Dryer Energy vs. Remaining Moisture Content Residential Clothes Washers

26. 25 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY DOE res data is also available, however the data correlation among machines is not as strong. Average residential tub volume in this study: 3.5 ft^3. Data points normalized by average tub volume. Should Navigant continue to use the commercial clothes washer data to establish this correlation, or use the residential washers to correlate data instead? Point for Discussion: Dryer Energy vs. Remaining Moisture Content (continued) Residential Clothes Washers

27. 26 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Contents Table of Contents 2 Overview of Measures to Brought into Compliance 3Domestic Hot Water Heaters 4Residential Freezers 1Introductions 5Residential Clothes Washers 5Conclusions & Next Steps

28. 27 ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. ENERGY Finalized workbooks to be presented in the next RTF meeting Draft version of workbooks to be presented in the next RTF meeting: –Commercial Refrigerators & Freezers –Manufactured Housing Duct Sealing –Refrigerator Recycling –Specialty CFL and LED Down-lights Feedback from the RTF Will be Used to Finalize Workbooks Next Steps

29. Key C O N T A C T S ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. Key C O N T A C T S ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. Key C O N T A C T S ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. Key C O N T A C T S ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. 28 ENERGY Kevin Cooney, Director-in-Charge Managing Director Boulder, CO (303) 728-2500 Kevin.Cooney@navigant.com Ryan Firestone Associate Director Walnut Creek, CA (925) 930-2708 Ryan.Firestone@navigant.comRyan.Firestone@navigant.com Mohit Singh-Chhabra Managing Consultant Walnut Creek, CA (925) 930-2713 Mohit.Singh-Chhabra@navigant.comMohit.Singh-Chhabra@navigant.com Kevin Cooney, Director-in-Charge Managing Director Boulder, CO (303) 728-2500 Kevin.Cooney@navigant.com Ryan Firestone Associate Director Walnut Creek, CA (925) 930-2708 Ryan.Firestone@navigant.comRyan.Firestone@navigant.com Mohit Singh-Chhabra Managing Consultant Walnut Creek, CA (925) 930-2713 Mohit.Singh-Chhabra@navigant.comMohit.Singh-Chhabra@navigant.com