Integration Issues for RTF Guidelines: Savings, Lifetimes and Cost/Benefit

1. Integration Issues for RTF Guidelines: Savings, Lifetimes and Cost/Benefit October 24, 2012 Regional Technical Forum Presented by: Michael Baker, SBW

2. Topics for Today • Review the Guidelines Integration Plan • Obtain Guidance on How to Resolve Integration Issues • Presented roughly in order of importance

3. Plan for Integrating RTF Guidelines • July meeting – Propose, discuss, adopt overall structure for Guidelines.  • August meeting – Discuss a new version of the Savings Guidelines. • September meeting – Observe the discussion and decision-making related to the Phase II Lifetimes and Cost/Benefit updates.  • October meeting - Discuss Integration Issues • Possible subcommittee work to resolve issues • November meeting and beyond – Once the issues have been resolved, draft integrated Guidelines and assist the RTF with review and adoption.

4. Sunset Criteria • Should each measure (UES or Standard Protocol) have just one? • Life guideline introduces concept of a separate sunset for measure life • Cost/Benefit guideline does not, but like life allows for updates outside the savings update process • Update to any of the three would require re-run of ProCost to keep UES workbooks current

5. Sunset Criteria Continued • Sunset criteria are not necessarily just a date and trying to line cost/benefit and life estimate up with savings could be complicated • Cost introduces measure time period and active period. Is the intent that these are co-terminus with the period defined by the savings sunset criteria? • From Cost/Benefit Guideline - Data used from other times should be adjusted to reflect the expected costs and benefits throughout the period the measure will be active . Typically, present costs and benefits are used as a proxy for this. • Simplest workflow would be only one update process driven by Savings sunset.

6. Measure Specification Life Guidelines allow measure specifications that are more detailed than found in the Savings specification. This would result (for UES) in more than one life value associated with a line in a measure table. These values would have to be weighted according to market shares. Some UES measures have 200+ applications in their measure tables. In addition, life adjustment factors can reflect the specific characteristics for a cohort of participants in an single operator’s program. Is this getting too detailed? If we need this detail to get life correct, do we also need it to get UES or cost/benefit correct?

7. Baseline (Current Practice and Pre-Conditions) • Is the intent of both Cost/Benefit and Life guidelines, to provide values for each measure or for each measure application. Applications for UES are defined by the rows in the measure table. Applications for standard protocols would be defined in its eligibility section, e.g., both types of baselines or just one. • From Cost/Benefit • Savings Guidelines Section 2.2, which states that each unique measure must be associated with either the current practice or precondition baseline • Savings Guidelines 2.2 actually uses the phrase “… each unique savings values…”, referring to each measure application appearing in the measure table

8. Quality Standard The quality standard for savings determines how good the data needed to be to justify and measure category (Proven, provisional, etc.) What is the purpose of the quality standard for Life guideline if values of any quality are acceptable? Why not simply list sources in order of quality, search in that order and then document where you found best values. Cost does not use quality standards, just best available.

9. Remaining Useful Life • Need to clarify handling of all measures that use Pre-Conditions baselines. Is EUL to be used in all cases or is RUL to be estimated. • Should there ever be a reduction in first year savings for a measure based on RUL expectations? • Cost/Benefit guidelines are also at issue given differences between full cost and incremental costs. • From Life Guidelines • Remaining Useful Life (RUL) conditions: If the program specifically addresses early replacement and retirement, an RUL value will be computed and documented. For example, higher savings estimates may apply for the period of EUL less the average vintage, and UES for the remainder of the EUL period. Without other compelling data or programmatic conditions, we assume the program intervenes at the end of useful life and no special value other than EUL is applied.

10. Treatment of Standard Protocol / Custom Measures UES measures get Cost/Benefit and Life summary sheets added to savings workbook. Should Cost/Benefit and Life sections be added to standard protocol outline and custom measure report outline. Where should the derivation of the Cost/Benefit and Life be documented? No standardized Excel home in either case, as standard protocol may not have a single RTF calculator and there is no standardized Excel product for custom.

11. Common Language - Measure Assessment • From Cost/Benefit Guidelines • Measure Assessment – Measure assessment is the analysis of an energy efficiency measure by which estimates of savings, costs and benefits, and effective useful lifetime are determined and proposed to the RTF for approval and determination of measure cost-effectiveness. • Should the Savings and Life guidelines adopt this. • Key phrase in roadmap and applicable to all measures (UES, Standard Protocol and Custom)?

12. Common Language – Delivery and Default Savings Guidelines refer to measure delivery. Elsewhere installation and implementation is used. Can we use delivery throughout? Costs/Benefits has “Standard Information Workbook”, Life uses Default Table. Should we have a common name for default values? Is Default ok?

13. Data Analysis Methods Both Cost/Benefit and Life guidelines have similar sections dealing with how to analyze data. Are these also applicable to data supporting various savings parameters? Should we have a common appendix that all guidelines address based on the one in Cost/Benefit Guidelines

14. Tracking Measure Decisions Life summary sheet tracks dates for RTF presentations and decisions. Should there be a central system for doing this. RTF website?