Energy Trust of Oregon, Inc. Resource Assessment Carbon Allocation Task Force April 27, 2006

1. Energy Trust of Oregon, Inc. Resource Assessment Carbon Allocation Task Force April 27, 2006

2. Energy Efficiency Resource Assessment Purpose: To quantify the projected amount and cost of gas and electric efficiency resources within the territory Energy Trust serves between now and 2017. • Update 2003 study with significant amount of new information available (surveys, studies, program data). • Results will be used to help establish policies and target programs for Energy Trust efficiency resource acquisition. • NW Natural contracted separately for low-income residents and Washington territory. • Cascade Natural Gas contracted separately to include their territory. 2

3. Resource Assessment - Scope • Estimated technical and achievable savings potential and total measure cost • “Technical” includes all savings available from possible participants without considering market barriers • “Achievable” adjusts participation based upon market barriers (Power Council assumption ~ 85% of technical) • Relied upon secondary data sources only • Employed results of recent surveys/studies funded separately over the last few years • Addressed both electric and gas resources • Both fuels separately considered and summarized • Interactive effects with other fuels quantified as impact to Operation & Maintenance costs • All sectors except industrial gas studied • Results presented for 2006, 2012, and 2017 • Equipment and operational/behavioral measures included • Direct application renewable resources and combined heat and power (CHP) addressed

4. Resource Assessment – Data Sources • Utilities – PGE, PacifiCorp, and NW Natural • Load forecasts and historical sales by sector and SIC code • Survey data – (e.g. Residential Appliance Saturation Survey (RASS) • NW Power Council/Regional Technical Forum • Measure characteristics, load shapes • Energy Trust of Oregon • Existing program data • Measure cost and savings assumptions and verification • Regional/national reports and studies • Recent NW Energy Efficiency Alliance market research data from the Commercial Building Site Assessment • Database for Energy Efficient Resources (DEER); American Council for an Energy Efficient Economy studies • 2004 Census, Federal Energy Regulatory Commission Form 1 4

5. Resource Assessment – Limitations • Industrial • Challenge of extrapolating from the number of individually site-specific tailored Energy Trust projects • Resulted in conservative industrial saving projections • Emerging technologies • Newer technologies with less consumer interest and purchasing opportunities • Example: heat pump water heaters • Next generation technologies • Not included in study and likely to emerge; difficult to forecast • Example: white Light Emitting Diode (LED) lamps • Demographics • Limited data on existing residential insulation levels • New data will be available soon from the Alliance study 5

6. Summary of Study Results- Definitions 1. Type of efficiency potential; Technical vs. Achievable 2. Cost of savings • Total measure cost - Direct output from study includes cost of equipment, installation, operations and maintenance (Operations & Maintenance). • Utility system cost – What it would cost for Energy Trust to acquire these savings; includes incentive, program management and program delivery expenses. • Societal cost – Total measure cost plus the cost to manage and deliver the programs. 3. Cost effective savings • Traditional efficiency cost effectiveness tests not included in the study (value of benefits change through time, variations of tests limit usefulness of output, etc.) • Utilized a “cap” on the total measure cost to limit measure savings to those which have the most reasonable chance of being cost effective 6

7. Overall Results – Gas 2017

8. Overall Results – Electric 2017

9. Overall Results – Electric 2017 New = 25% Existing = 75% New = 18% Existing = 82%

10. Commercial by End Use – Electric 2017

11. Residential by End Use – Electric 2017

12. How can we use these results? • The study provides total potential in terms of total measure cost • Cost screens of 5.5 cents/kWh and $1.70/therm levelized approximate avoided cost of generation – provides estimate of potential with most reasonable chance of being cost effective • Limited use by itself – total measure cost can include participant benefits of Operations & Maintenance savings, not what Energy Trust would pay for savings • Does not recognize additional value for peak load measures Other ways to looks at the results…. 12

13. Analysis of Results – Electric Savings Focus on Achievable Savings • Technical potential is insufficient for program design 13

14. Analysis of Results – Utility Cost of Savings Calculate a utility system levelized cost for each measure. Includes Energy Trust incentives, program management and delivery costs Results in range of savings from 351 to 433 MWa at an estimated utility cost of between $456M and $579M 14

15. Utility System Levelized Cost - 2012 15

16. Analysis of Results – Utility Cost of Savings 2012 For perspective, in 2005, Energy Trust acquired 39 MWa at 1.3 cents/kWh levelized 16

17. Comparison to Energy Trust Goals Energy Trust 2012 “stretch” goal to acquire 300 MWa savings • 2002-2005, 96 MWa acquired • Current estimate of 150 MWa savings 2006-2012 achievable with projected $230M in funding for cumulative savings of 250MWa by 2012 • Anticipating 50 MWa short of 2012 target with currently forecasted funding 17

18. Analysis of Results – Societal Cost of Savings Calculate a societalcost for each measure • Includes total measure costs, program management, installation, etc. • Results in same range of savings at an estimated societal cost of between $978M and $1,200M • Levelized cost remains competitive 18

19. Comparison to other Resource Choices Source of resource costs: NWPCC, 5th Power Plan, 2005 19

20. Equivalent Avoided CO2 Emissions • 2003 average emission rates by utility: 1.867 lb CO2 avoided per kWh saved for PacifiCorp and 1.123 lb/kWh for PGE • Based on weighted average estimate of 1.42 lb/kWh… 20

21. Future Analysis • Calculate estimated utility and societal costs for gas efficiency potential • Quantify economic impacts of acquiring electric and gas savings (e.g., new business income, job retention and expansion, wage increases, business and economic development benefits) • Calculate benefit/cost ratios for specific savings measures 21

22. Resource Assessment – Next Steps • Results serve as a general guide for long term planning and investment strategy • Provides input to Energy Trust strategic planning and analyses • Serves as a useful data source/tool to understand service territory demographics Comments/Questions - ? 22

23. Backup 23

24. Resource Assessment – Methodology All Sectors Step 1: Baseline of existing gas/electric usage by utility, apply utility growthrates for future energy use estimates Step 2: Sort energy use by building types, use/square foot, etc to get typical energy use intensity Step 3: Screen potential measures for those with savings but limited risk Step 4: Collect Measure data ; savings, cost, saturation and applicability Step 5: Calculate savings and cost: Apply measures to energy use population and calculate technical and achievable savings potential and total measures cost Step 6: Calculate measure levelized cost : Levelize the measure installation, capital, and O&M costs over the life of the measure. 24

25. Resource Assessment – Methodology • Residential • Utility building characteristics: housing type (SF, MF, MH) vintage, heating & DHW fuel • Average consumption by house type through calibration of retail sales to population data • Commercial • Population data converted to square footage by building type with EUI estimates and utility retail sales. • Industrial / Agriculture • Top down approach – Sales by SIC code split into end use process categories • Measures characterized as % of end use load that can be saved 25

26. Residential Results – Electric 2017

27. Commercial Results – Electric 2017

28. Industrial Results – Electric 2017