1. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 1 Energy Smart Industrial (ESI): Energy Management Offering RTF August 4 2009 BPA, Cascade Energy, Strategic Energy Group

2. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 2 Today’s Agenda  Energy Management and The 6 th Power Plan  Overview of Energy Management Offering – Including Case Studies  Monitoring Targeting & Reporting Overview  Key Challenges  Evaluation Plan and Timeline for Results  Next Steps

3. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 3 6 th Plan Industrial Overview – 5 Year  Regional Target – 224 aMW  BPA Share of 5 Year Target – 94 aMW – 19% of BPA’s total 5 year target

4. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 4 Energy Management  5 Year Target – ~20 aMW

5. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 5 Energy Management in 6 th Plan

6. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 6 Energy Smart Industrial Overview  Contract with Program Partners – Cascade Energy Engineering – Strategic Energy Group – Evergreen Consulting  Broad program encompassing: – Field outreach to identify and drive conventional projects: Energy Smart Industrial Partners (ESIPs) – Lighting, small industrial, future industry-specific offerings. – Energy Management One of the biggest new program offerings  Two year contract beginning October 1 st 2009. – 1 st year savings goal: 12 aMW – 2 nd year savings goal: 15 aMW

7. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 7 ESI Energy Management  Each project will be treated as custom  Each reviewed and approved by BPA Field Engineers  M&V protocols derived from the International Performance Measurement & Verification Protocol (IPMVP) Three Program Offers – End User can choose any or all. 1. Energy Project Manager (EPM) Funding – This is not an energy efficiency measure, but is a catalyst. – It is a funding mechanism tied to goals set by the End User (cents per kWh of annual savings goal subject to minimum and maximum funding levels) 2. Track and Tune (T&T) – O&M Program Offering. This will be a custom EE measure. 3. High Performance Energy Management (HPEM) – EM Coaching (One-on-One or Peer Group) to help End Users adopt core EM principles. This will be a custom EE measure

8. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 8 Track & Tune Overview

9. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 9 Track & Tune What is being offered?  Site or sub-system tune-up (aka retro-commissioning)  Normalized efficiency tracking system What is the primary goal?  Improve plant energy performance through O&M improvements – An attractive business opportunity for the End User – Documentable, low-cost savings for the program Minimum Size Requirements?  Sub-System > 1,000,000 kWh/yr  Plant-Wide > 4,000,000 kWh/yr Funding of services?  Tune-up and initial tracking tool funded by BPA Measure funding?  CRC/CAA towards the cost of implemented action items Repeat payments?  Incentives paid annually for documented savings seen through ongoing tracking tool

10. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 10 Track &Tune Motto: “Do the little stuff well”  Industrial Refrigeration: – Temperature and pressure set-points, algorithms, sequencing order, coil cleaning, valve adjustment and repair, eliminate non- condensables, etc.  Compressed Air: – Fix leaks, compressor sequencing, operate in optimal part-load mode, avoid wasteful end uses, shutoff loads when not in use, etc. Hypothesis: – Many systems of moderate complexity will have a similar list.

11. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 11 Track and Tune Steps  Step 1: Identify a Plant, Process, or Subsystem with potential  Step 2: Install a measurement system (instrumentation and software) that all parties use as a tool to gauge energy use and progress – funding provided by ESI program  Step 3: Identify a specific set of actions to improve performance and maintain savings over time – funding for technical services provided  Step 4: Make the changes – co-funding for the package of upgrades  Step 5: Ongoing tracking of performance for 5 years. Plan to provide incentive in succession of five 1-yr measures.

12. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 12  International Performance Measurement and Verification Protocol  Track & Tune M&V methods strive to meet the requirements, methods, and spirit of the IPMVP  Options A, B, and C – Use Option A (Retrofit Isolation w/ Key Parameter Measurement) – Use Option B (Retrofit Isolation w/ All Parameter Measurement) – Use Option C (Whole Facility Measurement) Track &Tune M&V Methods Use IPMVP Fundamentals

13. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 13 M&V: Conventional Custom Projects versus Track &Tune Conclusions: Track &Tune savings and methodology are robust due to extended M&V process. Track &Tune methods make O&M measures a very firm EE resource.

14. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 14 Track & Tune Case Studies

15. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 15   110 Refrigerated Warehouses – – Facility Tune-Ups – – Energy Management – – Some Capital Upgrades – – Some Efficient New Construction   Document savings by tracking kWh/day/weighted cu-ft   Continuing to pursue greater energy savings Case Study 1: Sysco Corporation

16. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 16 SYSCO Identified Savings from Tune-ups  Savings never lower than 7% (across 105 facilities).  12.6% average savings identified.  Identified savings are conservative  Sites are shown how to find savings on their own.  Sites saved significantly more than was identified.

17. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 17 SYSCO Realized Savings (YoY, FY08 versus FY06)

18. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 18 Track &Tune Case Study 2: Dairy  First Year Savings: – 2,600,000 kWh – $175,000 – 15%  Upgrade Cost: – $70,000  Changes made: – Refrigeration, pumping, chilled water, glycol, cooling tower, process, HVAC and lighting  Savings Calculated: – Normalized Energy Use – kWh/gallon versus 12- month baseline Kaizen Blitz: June 2008

19. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 19 Dairy Production Normalization  Two ways of showing kWh per gallon of milk  kWh/gallon versus Month  – removes seasonal influence  kWh versus Gallons of Production – Clearly demonstrates before and after performance – Demonstrates continued Year 2 performance Kaizen Blitz: June 2008

20. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 20 High Performance Energy Management (HPEM)

21. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 21 21  Coaching through a continuous improvement process (similar to ISO, Lean, etc…)  Includes organizational and technical aspects  Builds on Energy Project Manager and Track & Tune  Savings come from: – More projects that we are already measuring (Conventional Custom Projects & Track & Tune) – O&M and Behavioral changes that are measured through Monitoring Tracking & Reporting analysis (similar to whole facility Option C in IPMVP). Annual savings quantified and incented for this category of savings. Plan to provide cents/kWh incentive in succession of five 1-year measure lives High Performance Energy Management (HPEM)

22. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 22 22 Assess: Compelling business case? Commit: Establish Sponsor, Champion, Team,… Identify: Where, how energy is used – set baseline Plan: Vision through action plan is communicated Take Action: Implement and track progress Review: Report and Recognize Assisting customers through the High Performance Energy Management process:

23. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 23 23 BC Hydro EPA Energy Star High Performance Energy Management is similar in concept to: NEEA

24. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 24  One-on-one coaching  Structured Network Group – 10 – 12 industry focus, or non-competitive customers – Monthly facilitated meetings (or webinars) – Peer group learning, sharing, and support – Individual support as well: Management assessment Attend energy team meetings Connection to technical services Monitoring, Targeting, and Reporting Delivery of HPEM

25. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 25 Monitoring Targeting & Reporting Relevance to ESI Energy Management  Same Model Serves Dual Purposes – For the Participating Site: Recognize and Seize Opportunities Recognize and Address Backslipping Quantification of Savings Achieved – For the Track &Tune and High Performance Energy Management Measures within the ESI Program: Quantification of Savings Achieved Similar Methodology to IPMVP Option C – Whole Facility Assessment

26. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 26 What is MT&R? Monitoring: collecting data and analyzing against a “performance model” Targeting: setting performance targets Reporting: communicating the information to improve performance, and communicating the results. “You can’t manage what you don’t measure”

27. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 27 Monitors energy consumption over time Relates energy consumption to “drivers” Helps set targets to track and manage Compares consumption to targets Identifies changes and variances Calculates energy savings What does MT&R do?

28. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 28 The process of MT&R  Define the scope  Collect data  Establish the performance model  Create a baseline  Establish targets  Track performance - CUSUM analysis  Quantify energy savings

29. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 29 10,000 foot view: 6 Plants Combined Long Term/Trend Data 1,500 foot view: Individual Plants Long Term/Trend Data Floor view: Individual Projects Short Term Overall Company Electrical Usage Plant 6 1 meter Plant 4 4 Meters Plant 1 3 Meters Plant 2 2 Meters Plant 3 1 Meter Plant 5 1 Meter Process ACompressorLighting Process B Metrics & Analysis at Multiple Levels

30. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 30 MT&R: Reporting

31. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 31 Options for quantifiable performance targets MT&R: Performance Targets

32. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 32 Critical Points MT&R: CUSUM

33. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 33 Important Considerations for Track & Tune and HPEM Savings  Count savings only once!  Re-Baselining  Measurement – Identifying and getting the right “production” data – Balancing – or optimizing – collection of sub-meter data Cost versus “accuracy” – Changes in key drivers (plant, equipment, feed stock, etc.) – Monitoring equipment calibration error – Identifying and addressing outlier data  Investigation bias – Equitable investigation to both increases or decreases in facility energy use – Savings and “Opportunity Register” should be in line.

34. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 34 Avoid Double-Counting of Savings

35. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 35 “Re-Baselining”  Periodic survey of facility processes – Determine if major changes were made that impact energy use  Determining a ‘transition’ – Will change that has occurred be captured through existing normalization method? – If no, then major change forces a re-baselining.  Capturing savings pre and post-transition – Quantify savings going into the transition and claim – Assess whether these savings are maintained after the transition – Re-establish new baseline after transition – Add savings achieved after the transition

36. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 36 Program Evaluation Plan  Early Evaluation (Cadmus Group) – Will kick-off this month – Evaluators will be reviewing program documents, data collection, recommending real-time adjustments to improve program effectiveness and cost-effectiveness – Will develop long-term evaluation approach (late 2009 or early 2010)  Long-term Evaluation (TBD) – Expect to evaluate Energy Management measures – will use EM Data Collection tool developed by Cascade (data starts collection Oct 1 st 2009)

37. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 37 Next Steps  Questions, input and feedback – Due to BPA by August 18 th – Contact: Todd Admundson, tmamundson@bpa.govtmamundson@bpa.gov Danielle Gidding, dngidding@bpa.govdngidding@bpa.gov  BPA, Cascade, SEG and Evergreen will review and provide unified response to input and feedback  October 1 st Implementation

38. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 38 Questions?

39. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 39 More information on IPMVP Concepts relevant to T&T and HPEM Savings

40. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 40 Key Concepts from International Performance Measurement & Verification Protocol (IPMVP  Methods of Savings Quantification: – Retrofit Isolation (Option A or B) – relevant to subsystem T&T – Option C, Whole Facility or Sub-Facility Level –relevant to facility wide T&T and to HPEM  Adjustments: Account for Changes in Static Factors (non- routine) & Changes for Independent Variables (routine).  Boundary of Measurement [whole facility or process/sub- system].  Duration of the Baseline and Reporting Periods.  Savings Analysis Using Statistical Tools.

41. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 41 Key Concepts (cont.)  Long “Reporting Period” (aka post-installation monitoring) equates to higher confidence in savings.  “Non-routine Adjustments” to Savings – IPMVP specifically mentions: facility size design and operation of installed equipment the number of weekly production shifts – would tend to be reflected in regression types of occupants – usually not an issue for industrial projects – To which we would add the following when they affect the energy use within the “Measurement Boundary” Electrical energy use impacts of fuel switching or CHP Processes contracted out or brought inside Capital EE projects. Key concept – no double counting of savings.

42. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 42 IPMVP “Measurement Boundary”

43. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 43 EPM Funding

44. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 44 Background for EPM  Situation: Large industrial customers are short on staff to spearhead and manage efficiency projects  Target: Increase industrial end user staffing and expertise devoted to electrical energy efficiency  Proposal: Direct co-funding of industrial end user staffing to deliver custom projects. Link delivery of savings to continued funding.

45. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 45 Details of Energy Project Manager (EPM)  EPM is not a “measure”!  EPM will serve as ESI program point of contact at industrial end user facility  EPM is employee of end user  ESI program funds some or all of EPM salary  EPM is a specific person, not a pool of labor  End user determines: – The individual filling the EPM position – EPM compensation level – Existing or new employee  One EPM may be shared between multiple sites  An EPM+ is also enrolled in HPEM  An EPM can act as Resource Conservation Manager (RCM), Project Manager, or Energy Efficiency Engineer as needed

46. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Page 46 EPM Goals & Funding Mechanism  ESIP works with end user to set annual savings goal for EPM – This process repeated annually  EPM funding directly tied to magnitude of goal – Minimum annual funding per participating site = $25,000 – Maximum annual funding per participating site = $250,000 – Minimum of 1,000,000 kWh savings target each year – Annual EPM funding = expected at $0.025 per kWh of target – Year 2 and beyond funding is only offered to end users that have achieved their previous year’s goal  Mechanism for under performance