Tom Eckman Northwest Power and Conservation Council

1. Development of EM&V Protocols and a Standardized Savings Systemfor Tracking Energy Efficiency Resources: A Pacific Northwest case study Tom Eckman Northwest Power and Conservation Council Illinois Commerce Commission Workshop on Energy Efficiency and Demand Response October 16, 2008

2. OR . . . Why We Think We Know What We Think We Did

3. Overview of Presentation • Historical Look at the Pacific Northwest (PNW) Conservation Resource Acquisition Program Savings • How the Pacific Northwest Is Attempting to “Standardize” Savings Estimation and Economic Valuation Processes • Overview of Online Planning, Tracking and Reporting System

4. PNW Energy Efficiency Achievements1978 – 2007 Utility & BPA Programs, Energy Codes & Federal Efficiency Standards Now Produced Over 30,000 GWH of Savings

5. So What’s 30,000 GWH? • It’s enough electricity to serve one fifth of the State of Illinois • It’s the PNW’s Third Largest Source of Electricity (after Hydro and Coal) • It saved the PNW’s consumers nearly than $1.6 billion in 2007 • It lowered 2007 PNW CO2 Emissions by an estimated 14.1 million tons.

6. Did Meters in the PNW Really Turn Slower? 60% of the difference between 1985-91 Growth Trend and 1992-00 Growth trend is explained by conservation achievements during this period.

7. The PNW’s Approach To Savings Estimation “Standardization”(We’re Not California) • Established An Ongoing Centralized Process for Technical Review • Carried out by Regional Technical Forum (RTF) • RTF composed of utility and non-utility engineering and economic experts, staffed by Council • Funded by BPA, utilities and system benefits administrators • Public process • RTF builds on historical program experience and ongoing evaluations of regional acquisition programs

8. RTF’s Major Functions • Establish a Standardized Regional Cost-Effectiveness Methodology • Public domain software for evaluating conservation cost-effectiveness • Recommend Measurement and Verification Protocols • Already use IPMVP, FEMP • Adding: NAPEE Model Energy Efficiency Program Impact Evaluation Guide • Develop and Maintain Internet-based System for Tracking and Reporting Regional Conservation Savings and Expenditures • Deemed savings (with minimum technical specifications & Q/C criteria) • EM&V protocols • Default inputs for cost-effectiveness evaluations (e.g., forecast of future energy prices, cost of deferrable distribution and transmission, value non-energy benefits such as water savings, etc.) • Forecast CO2 content/kWh saved (based on load shape of savings)

9. RTF’s Major Functions • Process for updating deemed savings as technology and standard practices change. • Appeals process • Utilities or other parties, including vendors, can demonstrate that different savings and value estimates should apply • Collaborative Development of EM&V designsfor conservation programs operated across multiple utility service areas

10. However - The RTF Doesn’t Count Votes The RTF cannot and does not require use of its deemed savings values nor does it mandate or oversee EM&V!

11. Value of RTF to Region • Leverages utility investments in technology evaluation • Provides centralized & “transparent” source of “peer reviewed” cost and savings assessments • Reduces “regulatory” debates/costs • Serves as “clearinghouse” for vendors of new technologies • Expands region’s technical assessment capabilities and knowledge base

12. HowDoes the RTF Process Work? • RTF Provides Centralized Technical Review • Energy Savings Data and Assumptions • Cost-Effectiveness Methodology and Assumptions • Measurement and Verification Protocols/Guidelines • Builds on historical program experience • Public process – stakeholder “technical” involvement

13. Measure Screening Process “Deemed” Savings and Cost-Effectiveness All Possible Measures Online Data. Planning, Tracking & Reporting System Base “Deemed Calculated” Savings and Cost-Effectiveness ScreeningCriteria & Cost- Effectiveness Analysis “Custom Project” Valuation, Measurement and Verification Protocols

14. Shared Assumptions Discount/Finance Rates Measure life Savings and load shape (by climate zone when needed) Future market prices Measure cost Transmission & Distribution losses Utility/Project specific assumptions Program administrative cost Consumer incentive Number of units Consumer’s retail rate “Deemed Measure” System Inputs

15. Shared Assumptions Discount/Finance Rates* Measure life Load shape (by climate zone when needed) Future market prices* Transmission & Distribution losses* Utility/Project specific assumptions Program administrative cost Consumer incentive Number of units Consumer’s retail rate Measure/project cost Site/Case specific inputs (e.g., hours of operation, gals/day, tank size, etc.) needed to calculate savings “Deemed Calculated” MeasureSystem Inputs *Can be made utility specific

16. Shared Assumptions Discount/Finance Rates* Future market prices* Transmission & Distribution losses* Utility/Project specific assumptions Program administrative cost Consumer incentive Number of units Consumer’s retail rate Measure/project cost Measure life Measurement and verification protocol to calculate savings Load shape (by climate zone when needed) “Custom Measure” System Inputs *Can be made utility specific

17. Measure/Project/ Sector, Utility and Program Level Benefit/Cost Ratios Societal Utility Participants Measure/Project/ Sector, Utility and Program Level Savings (MW & MWH) Utility Expenditures Administrative Cost Consumer Incentives Total Societal Benefits Total Utility System Benefits Total Participant Benefits CO^2 Reduction System Outputs

18. Online Planning, Tracking and Reporting System • Tour Route - • History of system • Design concept (E-commerce model) • Navigation (Example Site Tour) • Organization (Sector, Category, Sub-Category) • Measure Types (Deemed, Deemed Calculated, Custom) • Measure Selection • Measure Reporting • Upload Function • Document Distribution • Guess Access • System Flexibility

19. The Online System Planning, Tracking and Reporting System