1. Knowledge to Shape Your Future Electric / Gas / Water Information collection, analysis and application EE Potential Summary Study Overview CALMAC Meeting Pacific Energy Center October 27, 2004 Keith Fuller

2. Electric / Gas / Water Information collection, analysis and application Knowledge to Shape Your Future 2 Project Goals –Analyze current saturations and penetrations of energy efficiency (EE) –Assess maximum 10 year G&E technical potential of EE –Estimate achievable potential of EE –Assess current accomplishment of achievable potential of EE –Test sensitivity of realized EE Interim Opinion Adopting Energy Efficiency Policy Rules, PUC D.01-11-066 under R.01-08-028.

3. Electric / Gas / Water Information collection, analysis and application Knowledge to Shape Your Future 3 Background Builds on and consolidates a number of recent and current potential studies –To be Incorporated Emerging Technology Study (part of this project) New Construction Potential Study –To provide key assumptions Existing Commercial Study Existing Residential Study Industrial Study

4. Electric / Gas / Water Information collection, analysis and application Knowledge to Shape Your Future 4 Project Organization Staff Other Team Members: Kema- Xenergy, Quantum

5. Electric / Gas / Water Information collection, analysis and application Knowledge to Shape Your Future 5 ASSET Framework

6. Electric / Gas / Water Information collection, analysis and application Knowledge to Shape Your Future 6 Asset Capabilities –Technical Potential For retrofit actions, only changes that are technically feasible without major structural changes are included. For new construction, a broader set of actions is considered. All measures are installed regardless of measure cost or acceptability to the customer. –Economic Potential Economic potential is based on implementation of all measures and actions that meet a stated economic investment criterion. Measures are taken in all segments and situations regardless of customer awareness of or attitudes about DSM technologies. –Market Potential Market potential relates to the impacts that can be expected to occur within a specified period and with a specified level of utility program activity. It takes into account a variety of factors like customer cost- effectiveness, awareness, willingness to adopt (which in turn depends upon various market barriers like risk perceptions, split incentives, limited rationality, etc.).

7. Electric / Gas / Water Information collection, analysis and application Knowledge to Shape Your Future 7 Asset Decision States –New Construction Fraction of new construction that adopts –Replacement on Burnout (ROB) Share of total group replacements –Equipment Conversion Fraction of customers that convert –Device Acquisition Fraction of applicable customers that install

8. Electric / Gas / Water Information collection, analysis and application Knowledge to Shape Your Future 8 Asset Model Features –Incorporates both physical barriers to adoption (technology applicability and feasibility) and market barriers to adoption (customer awareness, customer willingness, and supply- side availability). –Offers a variety of adoption models to estimate market adoption rates based on technology and customer characteristics. Incorporates a fully articulated stock accounting system. –Capable of modeling both binary and multinomial decisions through the definition of competition groups (groups of competing technologies) and the integration of multinomial adoption models. –Recognize changes in codes and standards over time. –Allows the user to specify the rate at which energy efficiency measures are replaced in kind upon the end of their lifetimes. –Ability to do on-the-fly measure screening.

9. Electric / Gas / Water Information collection, analysis and application Knowledge to Shape Your Future 9 Issues – Geographic Segments Reporting Needs –16 Title 24 Standards zones –16 Forecasting zones –Utility service areas –New construction potential based on 5 zones Approach –Asset Analysis by Title 24 Standards Zones Avoided costs in this form –Separate congestion zone 5 (San Francisco) –Allocate certain assumptions to Title 24 Standards zones –Allocate Asset results to other locations as needed for reporting. Note: Earlier decision to start with forecasting zones but avoided cost tables were issued by Title 24 Standards zones.

10. Electric / Gas / Water Information collection, analysis and application Knowledge to Shape Your Future 10 Issues – Emerging Technologies In the context of this study, we consider the product’s stage of the R&D, demonstration, and commercialization process as a key criterion and not the extent of market penetration. An emerging technology to be a technology, combination of technologies, or practice that has recently become commercially available, or has been demonstrated and will become commercially available at some pointing the forecast period.

11. Electric / Gas / Water Information collection, analysis and application Knowledge to Shape Your Future 11 Issues - Measures “The final list of measures to include in the Statewide Assessment will likely include all the measures (or representations of groups of these measures) that appear within the programmatic offerings. Measures beyond these programmatic offerings will also be considered based on perceived potential importance and impact. While the list of measures will include some improvements in equipment operation (e.g., retrocommissioning), purely behavioral measures will not be covered.”

12. Electric / Gas / Water Information collection, analysis and application Knowledge to Shape Your Future 12 Issues – Peak Impact Definition Peak hour? Average impact during peak period?

13. Electric / Gas / Water Information collection, analysis and application Knowledge to Shape Your Future 13 Measures

14. Electric / Gas / Water Information collection, analysis and application Knowledge to Shape Your Future 14 Project Schedule Task 1: Project Initiation Meeting – Complete Task 2: Develop Research Plan – Complete Task 3: Produce Updated Forecasts of Potential –General Asset Model Input Development: 10/30/2004 –Residential Sector Asset Model Input Development: 11/12 Memorandum: 12/3/2004 –Commercial Sector Asset Model Input Development: 1/14/2005 Memorandum: 1/29/2005 Task 4: Prepare Summary Study –Draft memorandum summarizing energy efficiency potential – 2/28/2005 Task 5: Develop Plan to Update Energy Efficiency Potential Studies –Plan memorandum developed. - 2/28/2005 Task 6: Prepare “Action Plans” for Program Targeting –Update Plan memorandum developed. - 3/15/2005 Task 7: Conduct Additional Cost-Effectiveness (CE) Analyses –Schedule TBD Task 8: Prepare Reports – See Tasks Task 9: Project management Task 10: Optional Regulatory Support and Consultation