1. 1 Proposed Changes to the RTF’s Heat Pump Deemed Savings and Cost- Effectiveness Draft 6th Plan Assumptions April 7, 2009

2. 2 Background Bonneville requested RTF Review of 6 th Plan Heat Pump Deemed Savings and Cost-Effectiveness Assumptions Are More Upgrades Cost-Effective with Higher Avoided Costs? With A Revised Base Case Assumption for Conversion of Forced-Air Furnace Systems to Heat Pumps, Which Measures are Cost-Effective?

3. 3 Existing Deemed Savings for Heat Pump Upgrades & Conversions

4. 4 Limitations of Current Estimates Based on “calibration” to billing analysis of existing homes with forced-air electric furnaces prior to conversion to heat pumps (w/o PTCS) All homes in sample were from Heating Zone 1 Analysis “tool” did not fully reflect impact of colder climate zones nor the impact of alternative control strategies on heat pump performance TMY 2 Weather Data Cost data from DOE Standards process, limited (i.e., one) contractor estimates and online prices.

5. 5 6 th Plan Analysis 6 th Plan savings estimates based on prior “calibration” for Heating Zone 1 –Using current SEEM input assumptions, zonal system “base case” most closely matched prior calibration –Heat Pump w/PTCS duct sealing & commissioning treated as single measure –TMY 3 weather files –Kalispell as reference site for Heating Zone 3 Savings assume home is fully weatherized (i.e., installs all cost- effective thermal shell measures) Heat pump & duct sealing cost updated based on Energy Trust of Oregon program data base

6. 6 Base Case Forced Air Furnace Use Assumptions – Crawlspace Homes

7. 7 Base Case Forced Air Furnace Use Assumptions – Basement Homes

8. 8 Heat Pump Space Heating Use - Crawlspace (w/ PTCS Duct Sealing & Commissioning)

9. 9 Heat Pump Space Heating Use - Basement (w/ PTCS Commissioning)

10. 10 Heat Pump Conversion Space Heating Savings - Crawlspace (Base Case Forced Air Furnace)

11. 11 Heat Pump Conversion Space Heating Savings – Basement (Base Case Forced Air Furnace)

12. 12 Heat Pump Upgrade Savings (Base Case HSPF 7.7/SEER 13 w/o PTCS Duct Sealing & Commissioning

13. 13 Revised Conversion and Upgrade Cost Estimate Energy Trust Data Base –1260 Heat Pump Upgrades –610 Heat Pump Replacements Regression Analysis Using Size, HSPF, SEER and “Replacement/Upgrade” as Independent Variables

14. 14 Regression Results ( R 2 =0.37) Coefficients* Standard Error t Stat P-value Intercept($4,797)1,223-3.920 Capacity (tons)$508746.870 HSPF$2051571.30.2 SEER$5784811.930 Upgrade($775)114-6.790 *All coefficients significant at the 95% level, except HSFP which is significant at the 80% level.

15. Heat Pump Cost Regression vs. Reported Cost

16. 16 Heat Pump Conversion and Upgrade Cost

17. 17 Findings – The Good News All Single Family and Manufactured Home Heat Pump Efficiency Upgrades to HSPF 8.5/SEER 14 and HSPF 9.0/SEER 14 with PTCS Duct Sealing and Commissioning are cost-effective in all zones. All Single Family and Manufactured Home Conversions to HSPF 8.5/SEER 14 and HSPF 9.0/SEER 14 with PTCS Duct Sealing and Commissioning are cost-effective in all zones for homes with exterior duct work, i.e., crawlspaces.

18. 18 Findings – The Bad News No Single Family Conversions to HSPF 8.5/SEER 14 or HSPF 9.0/SEER 14 are cost- effective in any zones for homes with interior duct work, i.e., basements/half basements.