Direction on Guidelines Savings Definition Path

1. Direction on Guidelines Savings Definition Path Results of straw vote and proposed decisions for elements of the savings definition Regional Technical Forum January 22, 2014

2. Straw Voting on Elements of the Savings Definition • Straw voting spreadsheet distributed to RTF members • 27 voting members of the RTF responded • 4 other responses from RTF staff and corresponding members • Results tabulated in the workbook “Savings Definition Voting.xlsm” posted with the meeting agenda.

3. Development of Proposed Decisions • Proposed decisions provided on the following slides that address the four elements of the savings definition • Baseline for Current Practice • Baseline for Pre-Conditions • Remaining Use Life (RUL) • Measure interactions • A decision was constructed for each element’s straw vote “majority” result • Straw vote helped staff generate “guiding principle” to • help slice through some of the confusion expressed by voters, and • craft a proposed “alternate” decision.

4. Summary Vote Results • Note: Voters were also asked to describe alternative approaches. These were used infrequently. Full responses are included in the “Savings Definition Voting.xlsm” workbook.

5. Guiding Principle: EE as Resource • Goal is treating EE savings as a resource • Comparable to other power resources • Purpose is to estimate savings, cost & performance over life of measure • kWh saved & cost per kWh saved over life of measure determines whether it’s a cost-effective resource • That’s why utilities do EE with ratepayer $ • That’s why RTF is in business

6. Indicators of the Guiding Principle • Lifetime Savings: Year-by-year savings over the measure lifetime are realistic. • Reflect, for example, natural replacement cycles, storage patterns, etc. • First-year Savings: First-year savings align with post observations and, as appropriate, pre observations or observation of recent choices. • Observable Data: Use observable data only (don’t extrapolate) • EXCEPTION: Forecasting is required where it can significantly improve the reliability of the estimate.

7. Applying the Indicators of the Guiding Principle

8. Applying the Indicators of the Guiding Principle

9. Applying the Indicators of the Guiding Principle

10. Applying the Indicators of the Guiding Principle

11. Applying the Indicators of the Guiding Principle

12. Applying the Indicators of the Guiding Principle

13. Winners, According to the Guiding Principle

14. What about alignment of Council Plan Potential & Targets with RTF Savings? • Not completely aligned • Example: No early retirement in Council Plan • Example: Plan assumes full measure package • But transparency of RTF work products allows for comparison to Council’s Plan.

15. Summary of Two Approaches

16. Decisions Regarding Baseline for Current Practice • “I ______ move that the RTF: • Straw Vote Majority • Retain the following portion of the current practice baseline description found in the 4-16 version of the Guidelines Roadmap (section 3.2.1) ‘... the baseline is defined by the recent typical choices of eligible end users in purchasing new equipment and services.’ Add ‘Sunset period should be shortened as needed to reliably estimate savings for a measure whose baseline is rapidly changing.’ Add a footnote: ‘Short-term forecasting may be needed to estimate the typical choices at the start of the sunset period for a measure whose baseline is rapidly changing.’” • Staff’s Principle-driven Alternative • (Same as above)

17. Decisions Regarding Remaining Use Life (RUL) • “I ______ move that the RTF: • Straw Vote Majority • For measures with a Pre-Conditions baseline, the default remaining use life of the savings will be equal to the lifetime of the measure. However, the RTF may determine for certain measures that a shorter remaining useful life can be reliably estimated.” • Staff’s Principle-driven Alternative • For all pre-conditions measures, estimate RUL based on best available information. If RUL is likely longer than the 20 year planning horizon, then RUL equals measure lifetime.”

18. Decisions Regarding Baseline for Pre-Conditions • “I ______ move that the RTF: • Straw Vote Majority • Retain the following portion of the pre-conditions baseline description found in the 4-16 version of the Guidelines Roadmap (section 3.2.2) ‘The baseline is defined by typical existing conditions found among eligible end users.’” • Staff’s Principle-driven Alternative* • Modify the pre-conditions baseline description found in the 4-16 version of the Guidelines Roadmap (section 3.2.2) ‘The baseline is defined by the typical conditions of end users that have recently adopted the measure, or if there has been no significant adoption, the typical conditions found among eligible end users.’” * This wording change was already on the list of things to change in the guidelines. It does not reflect a difference in the meaning of the vote.

19. Decisions Regarding Measure Interactions • “I ______ move that the RTF: • Straw Vote Majority • To the extent practical, measure identifiers should be used to account for significant measure interaction. For example, the identifier ‘heating system type’ could be used to account for the interactions between envelope improvements and heat pumps. When measure identifiers are not sufficient to account for all significant interactions, measure savings should be estimated assuming other interactive measures have already been delivered.” • Staff’s Principle-driven Alternative • To the extent practical, measure identifiers should be used to account for significant measure interaction. For example, the identifier ‘heating system type’ could be used to account for the interactions between envelope improvements and heat pumps. When measure identifiers are not sufficient to account for all significant interactions, measure savings should be estimated using sample data on what measures were present when each measure was installed, and which measures were installed simultaneously.”