1. 1 Petition to Establish a 4 th Heating Zone January 6, 2009

2. 2 Petition Request RTF Issues –Create a 4th (Heating) Climate Zone –Review cost effectiveness of R-49 attic insulation and other weather sensitive measures BPA Issue –Permit utilities to count the full savings for heat pumps from actual pre-existing equipment to the heat pump installed (conversions) for High Water Mark determinations.

3. 3 Petitioners Primary Supporters Glacier Electric Cooperative - Cut Bank, MT Vigilante Electric Cooperative - Dillon, MT Fall River Electric Cooperative - Ashton, ID Lower Valley Energy, Afton Wyoming Secondary Supporters (may not directly benefit) Flathead Electric Cooperative - Kalispell, MT Lincoln Electric Cooperative - Eureka, MT Mission Valley Power - Pablo, MT Missoula Electric Cooperative - Missoula MT Ravalli Electric Cooperative - Corvallis MT Idaho Falls Power - Idaho Falls, ID

4. Current Heating Climate Zone Assignments Heating ZoneHDD RangeZone Average HDD Zone 1<60005195 Zone 26000 – 74996785 Zone 3>75008360

7. TMY 3 HDD Are Approximately 5% Lower Than TMY 2 HDD Heating ZoneHDD RangeZone Average HDD Zone 1<6000TMY2 = 5195 TMY3 = 4935 Zone 26000 – 7499TMY2 = 6785 TMY3 = 6445 Zone 3>7500TMY2 = 8360 TMY3 = 7930

8. 8 Issue 1 - TMY3 HDD Data Indicate the Need to Revisit Heating Zone 3’s “Representative” Weather Site Missoula = TMY2 Zone 3 Weather Site Kalispell = TMY3 Zone 3 Weather Site?

9. 9 Issue 2 Where to set the lower bound for Heating Zone 4? Option 1 - Current Heating Zones cover 1500 HDD Therefore Zone 4 > 9000 HDD (7500+1500) Option 2 – Set lower bound based on material changes in measure cost- effectiveness

10. Only 10 Weather Sensitive Thermal Shell Measures Are “At the Margin” Using the Current Zone 3 Weather Site Only 5 If a New Zone 3 Weather Site is Adopted Measure Missoula Current Zone 3 7323 HDD Kalispell New Zone 3 7928 HDD Butte Zone 4 > 9000 HDD 9089 HDD MF Retrofit - ATTIC R30 - R380.70.81.0 MF Retrofit - FLOOR R19 - R300.91.01.2 MF Retrofit - FLOOR R19 - R300.91.01.2 MH Retrofit - FLOOR R22 - R30 Blown0.91.01.2 New MF - FLOOR R38 STD w/12"Truss0.70.81.0 New MH - ATTIC R38 - ATTIC R490.80.91.1 New MH - VAULT R30 - VAULT R380.91.01.2 New SF - BGWALL R19 - BGWALL R210.80.91.0 New SF - FLOOR R38 STD w/12"Truss0.80.91.0 SF Retrofit - ATTIC R38 - R490.91.01.3

11. Only 2 Weather Sensitive HVAC Measures Are “At the Margin” Using the Current Zone 3 Weather Site None Are If a New Zone 3 Weather Site is Adopted Measure Missoula Current Zone 3 7323 HDD Kalispell New Zone 3 7928 HDD Butte Zone 4 > 9000 HDD 9089 HDD Existing SF - Convert Electric FAF w/o CAC to HSPF 8.5/SEER 14 Heat Pump & w/PTCS Duct Sealing & Commissioning 0.91.11.3 Existing SF - Convert Electric FAF w/o CAC to HSPF 9.0/SEER 14 Heat Pump & w/PTCS Duct Sealing & Commissioning 0.91.11.3

12. However, If 9000 HDD is Lower Bound Only One of the Petitioning Utilities Would Fall in Heating Zone 4 Petitioning UtilityResidential Consumers TMY 3 HDD TMY 2 HDD/NOAA Fall River Electric Cooperative 11,3958,6118,919 Glacier Electric Cooperative 5,5008,1928,898 Lower Valley Energy18,5999,6649,847 Vigilante Electric Cooperative 7,2487,7878,246

13. Options Adopt Kalispell As the Heating Zone 3 “Reference” Site Accept Petition - Establish a New Heating Zone 4 for Areas with >9000 HDD –Adopt Butte As the Heating Zone 4 “Reference” Site Reject Petition –In order for additional measures to be cost-effective, the lower bound of Zone 4 has to be set at a level which restricts its application to a single utility