Vermont Electric Energy Efficiency Potential Study – Draft Findings

1. Vermont Electric Energy Efficiency Potential Study – Draft Findings April 10, 2006

2. Overview of Presentation • Key findings from draft report of April 9, 2006 • Load forecast for Vermont (1.5% a year before DSM, 1.0% a year after DSM) • mWh savings potential – base case • Sources of electric energy savings potential • Cost effectiveness results • Annual implementation costs • Rate impacts • Key assumptions • Findings by Sector

4. mWh Savings Potential

5. Key Sources of Savings Potential for Max. Ach Cost Effective Base Case • Residential – lighting, electric water heater fuel conversion, space heat fuel conversion, standby power • Commercial – lighting, refrigeration, cooling • Industrial – industrial lamps and fixtures, motors

6. Cost Effectiveness Findings-Societal Test

7. Annual Implementation Costs – Base Case • Base case assumes EVT pays incentives equivalent to 50% of incremental measure costs • Annual incentives costs are $17.4 million • Total annual implementation costs are $39.5 million

8. Rate Impacts – Base Case • Annual implementation costs are $39.5 million • Annual kWh sales decline by 19.4% by 2015 • Lost revenues are calculated based upon VDPS forecast of retail rates in Vermont • Savings to Vermonters based on AESC Study Group avoided generation costs and avoided T&D costs provided by VDPS staff

10. Key Assumptions • New benefit/cost screening model • Line losses • Reserve margin • Electric avoided costs and fossil fuel prices • Externality adders • Maximum achievable penetration rate for efficiency measures

11. New Benefit-Cost Screening Model • Built by GDS Associates over the past five years • Operates in an Excel environment • Has been approved by regulators in other States • Can handle over 110 energy efficiency measures • User-friendly and easy to use

12. Key Assumptions – Line Losses

13. Key Assumptions for Electric Avoided Costs • Electric generation avoided costs for Vermont – from December 2005 AESC Study Group report • Fossil fuel prices - from December 2005 AESC Study Group report • T&D avoided capacity costs – from VDPS ($163 per kW in 2005 dollars) • Reserve margin of 13.8% provided by VDPS staff

14. Key Assumptions for Externality Adders for Vermont Societal Test • Non – energy benefits adder of $.0081 per kWh saved (in 2005 dollars) applied to electricity savings • Non – energy benefits adder for fossil fuel savings obtained from VDPS staff • Costs of electric energy efficiency measures reduced by 10%

15. Key Assumptions for Maximum Penetration of Efficiency Measures • Maximum penetration rate of 80% for base case where incentives of 50% of incremental cost are paid (base case) • Maximum penetration rate of 85% for base case where incentives of 100% of incremental cost are paid (high incentives case)

16. Residential Sector Findings April 10, 2006

17. Vermont Residential Sector • Much has already been accomplished in VT • EVT has already saved a significant amount of electric energy and demand • This is equivalent to a significant percentage of 2005 annual kWh sales in Vermont

18. Residential Savings Summary • Significant cost effective electricity savings potential still exists • Important to understand how electricity is used in the residential sector • Residential sector is forecast to have the fastest kWh sales growth for 2006 to 2015 (1.6%) • Majority of savings potential is in lighting and electric water heater fuel conversion

24. Commercial Sector Findings April 10, 2006

25. Commercial Sector Summary • Significant cost effective electricity savings potential still exists • Important to understand how electricity is used in the commercial sector • Commercial sector is forecast to have the slowest growth for 2006 to 2015 (0.5% a year) • Majority of savings potential is in lighting and refrigeration end uses

26. VT Commercial Sector Segmentation

27. VT Commercial Sector Segmentation

28. Commercial Measures Summary Note: All measures were analyzed separately for each of the ten building types.

29. Commercial Energy Efficiency Potential Savings Summary

30. Commercial Energy Efficiency Potential Savings Summary

31. Breakdown of Commercial kWh Savings for Existing Commercial Buildings

32. Breakdown of Commercial kWh Savings for New Commercial Buildings

33. Commercial Sector Supply Curve for Existing Buildings

34. Commercial Sector Supply Curve for New Buildings

35. Industrial Sector Findings April 10, 2006