1. Wood Smoke: Monetizing Health Benefits Regional Technical Forum August 23, 2013

2. Meeting Agenda Subcommittee objectives Objectives for today Genesis of the problem Regional Act and Regulatory requirements Abt Associates presentation Discussion Next steps Adjourn 2

3. Subcommittee Objectives Exploring alternative options to quantify the net health impacts of displacing wood heat with electric powered heat. – Different options available to model health impacts of particulate emissions on air quality. – Granularity of results one can expect from this modeling exercise. – Inherent assumptions and uncertainties associated with such modeling – Data required to conduct this analysis. 3

4. Objectives for Today Discussion to provide direction for staff to draft a Scope of Work – Make recommendations to RTF on options and methods. – Understand how results from this exercise will be applied – Direction will be gathered from discussion in the subcommittee meeting. 4

5. Genesis of the Problem Ductless Heat Pumps (DHP) replace wood heat in some residential homes. – This reduces wood smoke emission … but this also adds load to the grid – Preliminary analysis showed the health benefits from avoided wood smoke to be significant, larger than electric savings – Other EE measures also reduce wood heat (e.g. weatherization) 5

6. Regional Act Context: Section 3(4) Cost-effectiveness “ System cost” is defined to mean “an estimate of all direct costs of a measure or resource over its effective life,” including, “among other factors”: – cost of distribution and transmission to the consumer, if applicable – waste disposal costs – end-of-cycle costs – fuel costs (including projected increases) – such quantifiable environmental costs and benefits as the Administrator determines, on the basis of a methodology developed by the Council as part of the plan are directly attributable to such measure or resource 6

7. RTF Guidelines RTF Guidelines describe analysis of costs & benefits Guideline section 4.5 identify “other non- energy” cost & benefits – General guideline: “included in a measure cost analysis if it can be sufficiently demonstrated to the RTF that the impacts are significant and monetizable.” 7

8. WA Public Utilities Regulation RCW 80.52.030(8): “… the definition of cost-effective, which applies to conservation and other resources, relies on system costs that explicitly includes quantifiable environmental costs and benefits.” – System Costs include quantifiable environmental costs and benefits. – The 1980 Northwest Power Act also includes quantifiable environmental costs and benefits in the “system cost” to be included in cost effectiveness calculations. Staff has not had a chance to understand regulatory requirements of OR, MO, ID 8

9. ABT Presentation ABT presentation will contain three options for analysis: – Option 1: Screening Level Analysis (Basic Detail) 3 months; $20,000 - $40,000 (Abt estimate) – Option 2: EPA RIA- Style Analysis for CAPs (Medium Detail) 6 – 8 months; $60,000 - $200,000 (Abt estimate) – Option 3: EPA RIA- Style Analysis for CAPs and HAPs (High Detail) Cost and duration will be more than Option 2 9

10. Discussion Scope of this analysis for electric utilities Feasibility of presented options – Potential bias inherent in each option – Importance of granularity Consider impacts beyond health? Other ideas/ considerations? 10

11. Next Steps Milestones – Scope of Work – Timing for analysis (Option driven) Other thoughts? 11