1. Northwest Power and Conservation Council HVAC and DHW System Conversion Cost for Use in Direct Use of Natural Gas Analysis August 16, 2010

2. Northwest Power and Conservation Council Incremental Cost of Conversion Needs to Reflect Changing Federal Standards US DOE must adopt new efficiency standards for furnaces, central AC and heat pumps by May/June 2011. These standards would take effect in 2013 for gas furnaces and 2015 for Central AC and Heat Pump US DOE must adopt new efficiency standards for furnaces, central AC and heat pumps by May/June 2011. These standards would take effect in 2013 for gas furnaces and 2015 for Central AC and Heat Pump DOE adopted new standards for gas and electric water heaters effective April 16, 2015 DOE adopted new standards for gas and electric water heaters effective April 16, 2015

3. Northwest Power and Conservation Council New Water Heater Standards Electric Electric –55 gallon & smaller tanks =>EF 95 –Above 55 gallon tanks => EF 2.0 Gas (storage) Gas (storage) –55 gallon & smaller tanks => EF 62 –Above 55 gallon tanks => EF 75 Gas (tankless) => EF 82 Gas (tankless) => EF 82

4. Northwest Power and Conservation Council Consensus Recommendation on HVAC Equipment Efficiency Standards DOE has been petitioned to adopt a consensus recommendation on standards for gas furnaces, heat pumps and central AC DOE has been petitioned to adopt a consensus recommendation on standards for gas furnaces, heat pumps and central AC Consensus recommendation from AHRI (HVAC manufacturer’s trade association) and ACEEE, NRDC, ASE, NEEP, CEC, ASAP & NPCC Consensus recommendation from AHRI (HVAC manufacturer’s trade association) and ACEEE, NRDC, ASE, NEEP, CEC, ASAP & NPCC System Type Minimum Efficiency Split System Central AC 13 SEER Gas Furnace 90% AFUE Split System Heat Pump 14 SEER/8.2 HSPF Packaged HP 14 SEER/8.0 HSPF Packaged AC 14 SEER Gas-Pack 14 SEER/81% AFUE Oil Furnace 83% AFUE

5. Northwest Power and Conservation Council Implications for Base Case Efficiency System Base Case Efficiency in Current Model Revised Base Case Efficiency Gas Furnace 80% AFUE 90% AFUE Heat Pump HSPF 7.7/SEER 13 HSPF 8.2/SEER14 Gas Storage DHW EF 59 55 gal & below EF 62 >55 gal. EF 75 Gas Tankless DHW EF 80 EF82 Electric Storage EF 90 55 gal & below EF 95 >55 gal. EF 2.0

6. Revised Baseline Conversion Cost Estimates HVAC Systems

7. Northwest Power and Conservation Council Revised Baseline Conversion Cost Estimates HVAC Systems (No Existing Air Conditioning) Issue: How should we treat “added CAC service” from heat pump?

8. Northwest Power and Conservation Council Revised High Efficiency Conversion Cost Estimates

9. Northwest Power and Conservation Council Revised Conversion Cost for Water Heating Systems* *Not including gas service extension or electrical panel size increase

10. Northwest Power and Conservation Council Tank Size Distribution Assumptions Approximately 10% of electric water heaters and 4% of gas water heaters are greater than 55 gallons, hence are subject to the EF 2.0 and EF 75 standards.