Energy Smart Industrial (ESI): Energy Management Offering

1. Energy Smart Industrial (ESI): Energy Management Offering RTF August 4 2009 BPA, Cascade Energy, Strategic Energy Group

2. Today’s Agenda Energy Management and The 6th Power Plan Overview of Energy Management Offering Including Case Studies Monitoring Targeting & Reporting Overview Key Challenges Evaluation Plan and Timeline for Results Next Steps

3. 6th Plan Industrial Overview – 5 Year Regional Target 224 aMW BPA Share of 5 Year Target 94 aMW 19% of BPA’s total 5 year target

4. Energy Management 5 Year Target ~20 aMW

5. Energy Management in 6th Plan

6. Energy Smart Industrial Overview Contract with Program Partners Cascade Energy Engineering Strategic Energy Group Evergreen Consulting Broad program encompassing: Field outreach to identify and drive conventional projects: Energy Smart Industrial Partners (ESIPs) Lighting, small industrial, future industry-specific offerings. Energy Management One of the biggest new program offerings Two year contract beginning October 1st 2009. 1st year savings goal: 12 aMW 2nd year savings goal: 15 aMW

7. ESI Energy Management Each project will be treated as custom Each reviewed and approved by BPA Field Engineers M&V protocols derived from the International Performance Measurement & Verification Protocol (IPMVP) Three Program Offers – End User can choose any or all. 1. Energy Project Manager (EPM) Funding This is not an energy efficiency measure, but is a catalyst. It is a funding mechanism tied to goals set by the End User (cents per kWh of annual savings goal subject to minimum and maximum funding levels) 2. Track and Tune (T&T) O&M Program Offering. This will be a custom EE measure. 3. High Performance Energy Management (HPEM) EM Coaching (One-on-One or Peer Group) to help End Users adopt core EM principles. This will be a custom EE measure

8. Track & Tune Overview

9. Track & Tune What is being offered? Site or sub-system tune-up (aka retro-commissioning) Normalized efficiency tracking system What is the primary goal? Improve plant energy performance through O&M improvements An attractive business opportunity for the End User Documentable, low-cost savings for the program Minimum Size Requirements? Sub-System > 1,000,000 kWh/yr Plant-Wide > 4,000,000 kWh/yr Funding of services? Tune-up and initial tracking tool funded by BPA Measure funding? CRC/CAA towards the cost of implemented action items Repeat payments? Incentives paid annually for documented savings seen through ongoing tracking tool

10. Track &Tune Motto:“Do the little stuff well” Industrial Refrigeration: Temperature and pressure set-points, algorithms, sequencing order, coil cleaning, valve adjustment and repair, eliminate non-condensables, etc. Compressed Air: Fix leaks, compressor sequencing, operate in optimal part-load mode, avoid wasteful end uses, shutoff loads when not in use, etc. Hypothesis: Many systems of moderate complexity will have a similar list.

11. Track and Tune Steps Step 1: Identify a Plant, Process, or Subsystem with potential Step 2: Install a measurement system (instrumentation and software) that all parties use as a tool to gauge energy use and progress – funding provided by ESI program Step 3: Identify a specific set of actions to improve performance and maintain savings over time – funding for technical services provided Step 4: Make the changes – co-funding for the package of upgrades Step 5: Ongoing tracking of performance for 5 years. Plan to provide incentive in succession of five 1-yr measures.

12. International Performance Measurement and Verification Protocol Track & Tune M&V methods strive to meet the requirements, methods, and spirit of the IPMVP Options A, B, and C Use Option A (Retrofit Isolation w/ Key Parameter Measurement) Use Option B (Retrofit Isolation w/ All Parameter Measurement) Use Option C (Whole Facility Measurement) Track &Tune M&V Methods UseIPMVP Fundamentals

13. M&V: Conventional Custom Projects versus Track &Tune • Conclusions: • Track &Tune savings and methodology are robust due to extended M&V process. • Track &Tune methods make O&M measures a very firm EE resource.

14. Track & Tune Case Studies

15. Case Study 1: Sysco Corporation • 110 Refrigerated Warehouses • Facility Tune-Ups • Energy Management • Some Capital Upgrades • Some Efficient New Construction • Document savings by tracking kWh/day/weighted cu-ft • Continuing to pursue greater energy savings

16. SYSCO Identified Savings from Tune-ups Savings never lower than 7% (across 105 facilities). 12.6% average savings identified. Identified savings are conservative Sites are shown how to find savings on their own. Sites saved significantly more than was identified.

17. SYSCO Realized Savings(YoY, FY08 versus FY06)

18. Track &Tune Case Study 2: Dairy First Year Savings: 2,600,000 kWh $175,000 15% Upgrade Cost: $70,000 Changes made: Refrigeration, pumping, chilled water, glycol, cooling tower, process, HVAC and lighting Savings Calculated: Normalized Energy Use kWh/gallon versus 12-month baseline Kaizen Blitz: June 2008

19. Dairy Production Normalization Two ways of showing kWh per gallon of milk kWh/gallon versus Month  removes seasonal influence kWh versus Gallons of Production Clearly demonstrates before and after performance Demonstrates continued Year 2 performance Kaizen Blitz: June 2008

20. High Performance Energy Management (HPEM)

21. Coaching through a continuous improvement process (similar to ISO, Lean, etc…) Includes organizational and technical aspects Builds on Energy Project Manager and Track & Tune Savings come from: More projects that we are already measuring (Conventional Custom Projects & Track & Tune) O&M and Behavioral changes that are measured through Monitoring Tracking & Reporting analysis (similar to whole facility Option C in IPMVP). Annual savings quantified and incented for this category of savings. Plan to provide cents/kWh incentive in succession of five 1-year measure lives High Performance Energy Management (HPEM) 21

22. Assisting customers through the High Performance Energy Management process: Assess:Compelling business case? Commit: Establish Sponsor, Champion, Team,… Identify: Where, how energy is used – set baseline Plan: Vision through action plan is communicated Take Action: Implement and track progress Review: Report and Recognize 22

23. High Performance Energy Management is similar in concept to: BC Hydro EPA Energy Star NEEA 23

24. One-on-one coaching Structured Network Group 10 – 12 industry focus, or non-competitive customers Monthly facilitated meetings (or webinars) Peer group learning, sharing, and support Individual support as well: Management assessment Attend energy team meetings Connection to technical services Monitoring, Targeting, and Reporting Delivery of HPEM

25. Monitoring Targeting & Reporting Relevance toESI Energy Management Same Model Serves Dual Purposes For the Participating Site: Recognize and Seize Opportunities Recognize and Address Backslipping Quantification of Savings Achieved For the Track &Tune and High Performance Energy Management Measures within the ESI Program: Quantification of Savings Achieved Similar Methodology to IPMVP Option C – Whole Facility Assessment

26. What is MT&R? Monitoring: collecting data and analyzing against a “performance model” Targeting: setting performance targets Reporting: communicating the information to improve performance, and communicating the results. “You can’t manage what you don’t measure”

27. Monitors energy consumption over time Relates energy consumption to “drivers” Helps set targets to track and manage Compares consumption to targets Identifies changes and variances Calculates energy savings What does MT&R do?

28. The process of MT&R Define the scope Collect data Establish the performance model Create a baseline Establish targets Track performance - CUSUM analysis Quantify energy savings

29. Metrics & Analysis at Multiple Levels 10,000 foot view: 6 Plants Combined Long Term/Trend Data Overall Company Electrical Usage 1,500 foot view: Individual Plants Long Term/Trend Data Plant 1 3 Meters Plant 2 2 Meters Plant 3 1 Meter Plant 4 4 Meters Plant 5 1 Meter Plant 6 1 meter Floor view: Individual Projects Short Term Lighting Compressor Process A Process B

30. MT&R: Reporting

31. MT&R: Performance Targets Options for quantifiable performance targets

32. MT&R: CUSUM Critical Points

33. Important Considerations for Track & Tune and HPEM Savings Count savings only once! Re-Baselining Measurement Identifying and getting the right “production” data Balancing – or optimizing – collection of sub-meter data Cost versus “accuracy” Changes in key drivers (plant, equipment, feed stock, etc.) Monitoring equipment calibration error Identifying and addressing outlier data Investigation bias Equitable investigation to both increases or decreases in facility energy use Savings and “Opportunity Register” should be in line.

34. Avoid Double-Counting of Savings

35. “Re-Baselining” Periodic survey of facility processes Determine if major changes were made that impact energy use Determining a ‘transition’ Will change that has occurred be captured through existing normalization method? If no, then major change forces a re-baselining. Capturing savings pre and post-transition Quantify savings going into the transition and claim Assess whether these savings are maintained after the transition Re-establish new baseline after transition Add savings achieved after the transition

36. Program Evaluation Plan Early Evaluation (Cadmus Group) Will kick-off this month Evaluators will be reviewing program documents, data collection, recommending real-time adjustments to improve program effectiveness and cost-effectiveness Will develop long-term evaluation approach (late 2009 or early 2010) Long-term Evaluation (TBD) Expect to evaluate Energy Management measures – will use EM Data Collection tool developed by Cascade (data starts collection Oct 1st 2009)

37. Next Steps Questions, input and feedback Due to BPA by August 18th Contact: Todd Admundson, tmamundson@bpa.gov Danielle Gidding, dngidding@bpa.gov BPA, Cascade, SEG and Evergreen will review and provide unified response to input and feedback October 1st Implementation

38. Questions?

39. More information on IPMVP Concepts relevant to T&T and HPEM Savings

40. Key Concepts from International Performance Measurement & Verification Protocol (IPMVP Methods of Savings Quantification: Retrofit Isolation (Option A or B) – relevant to subsystem T&T Option C, Whole Facility or Sub-Facility Level –relevant to facility wide T&T and to HPEM Adjustments: Account for Changes in Static Factors (non-routine) & Changes for Independent Variables (routine). Boundary of Measurement [whole facility or process/sub-system]. Duration of the Baseline and Reporting Periods. Savings Analysis Using Statistical Tools.

41. Key Concepts (cont.) Long “Reporting Period” (aka post-installation monitoring) equates to higher confidence in savings. “Non-routine Adjustments” to Savings IPMVP specifically mentions: facility size design and operation of installed equipment the number of weekly production shifts – would tend to be reflected in regression types of occupants – usually not an issue for industrial projects To which we would add the following when they affect the energy use within the “Measurement Boundary” Electrical energy use impacts of fuel switching or CHP Processes contracted out or brought inside Capital EE projects. Key concept – no double counting of savings.

42. IPMVP “Measurement Boundary”

43. EPM Funding

44. Background for EPM Situation: Large industrial customers are short on staff to spearhead and manage efficiency projects Target: Increase industrial end user staffing and expertise devoted to electrical energy efficiency Proposal: Direct co-funding of industrial end user staffing to deliver custom projects. Link delivery of savings to continued funding.

45. Details of Energy Project Manager (EPM) EPM is not a “measure”! EPM will serve as ESI program point of contact at industrial end user facility EPM is employee of end user ESI program funds some or all of EPM salary EPM is a specific person, not a pool of labor End user determines: The individual filling the EPM position EPM compensation level Existing or new employee One EPM may be shared between multiple sites An EPM+ is also enrolled in HPEM An EPM can act as Resource Conservation Manager (RCM), Project Manager, or Energy Efficiency Engineer as needed

46. EPM Goals & Funding Mechanism ESIP works with end user to set annual savings goal for EPM This process repeated annually EPM funding directly tied to magnitude of goal Minimum annual funding per participating site = $25,000 Maximum annual funding per participating site = $250,000 Minimum of 1,000,000 kWh savings target each year Annual EPM funding = expected at $0.025 per kWh of target Year 2 and beyond funding is only offered to end users that have achieved their previous year’s goal Mechanism for under performance