Residential Lighting Screw-in Lamps Ryan Firestone August 18, 2015

Overview Today we are seeking approval of an update to the Residential Lighting UES measure. 2

Measure Overview Measure DevelopersRTF, with baseline research from BPA and NEEA CAT ReviewRyan Firestone Tech Sub-Com ReviewSubcommittee: May 26, July 29 RTF Sub-group: July 17 R&E Sub-Com ReviewNo Notes Measure last updated April 2014 Sunset extension from June to September 2015 at June RTF meeting 3 Technology types (screw-in lamps) CFL LED Lamp types Decorative and Mini-Base General Purpose, Dimmable, and Three-Way Globe Reflectors and Outdoor Lumens 250 to 1049 lumens 1050 to 1489 lumens 1490 to 2600 lumens Delivery mechanisms: retail, mail-by-request unsolicited mail give away direct install

Staff Highlighted Areas Federal standards compliance: How to account for manufacturing/import standards that take many years to be fully reflected in the market Lumen shift: Lower that expected baseline lumens Storage: Accounting for delayed installation as our lighting model gets more complex Measure scope: – Three-way lamps – EISA exemption could lead to program over-supply – Direct Install – low use (closets, “other”) 4

Recent History June 16, 2015 RTF Meeting – RTF CAT presentation on methodology – Guidance requested on baseline replacement model and other details of methodology – Sunset date extension for measure to September 30, 2015, with plan to bring measure to RTF at August 2015 meeting – RTF requested that a subcommittee sub-group meet to discuss the baseline replacement model and provide a recommendation July 17, 2015 – RTF Sub-group meeting July 29, 2015 – Residential Lighting Subcommittee meeting to review outcomes of Sub-group meeting and prepare for the August RTF meeting 5

The Baseline Replacement Issue We must model savings over the lifetime of the measure in order to estimate cost-effectiveness. In the case of residential lighting, some of the baseline technologies (inc/hal) have a shorter lifetime than the measure (CFL/LED). Therefore, our savings model must assume what replaces baseline lamps at the end of their life, but before the end of the measure life. Historically, we have assumed like-for-like replacement: e.g., when a halogen lamp burns out, it is replaced with another halogen. – This may conflict with our rationale for using a Current Practice baseline: that the current market mix of sales is representative of the typical choice of an end-user 6

Current Practice Baseline – Guidelines Applied to Residential Lighting Need to establish rule for how choices are made in the baseline throughout the lifetime of the measure. – Like-for-like replacement – when lamps in the counterfactual need replacement, they are replaced with the same thing – Typical choices at time of RTF approval – when lamps in counterfactural need replacement, they are replaced with the same mix of inc/hal/CFL/LED that is assumed at the time of measure implementation – Something in-between – there is some correlation between what was installed and what gets replaced, but not 100% Once this baseline rule is chosen, the baseline and efficient case can be modeled and lifetime savings can be determined. 7 From June 16 RTF Presentation

Current Practice Baseline – Guidelines Applied to Residential Lighting 8 Baseline: Like-for-like replacement Baseline: Typical choices at time of RTF approval Baseline: Something in-between From June 16 RTF Presentation

July 17, 2015 Sub-group Meeting Participants – Jennifer Anziano (RTF Manager) – Mike Baker (SBW) – Ryan Firestone (RTF CAT) – Lauren Gage* (BPA) – Tina Jayaweera (Council) – Bill Welch* (Independent) *RTF member Reviewed slides on Baseline from June presentation Selected a baseline replacement model Proposed an approach to simplifying the representation of measures with savings that vary over the lifetime of the measure ngNotes_2015_07_17.docx 9

July 17, 2015 Sub-group Meeting Baseline Replacement Issue: The sub-group agreed that the market is likely a mix of “like-for-like” behavior and “typical-choices” behavior – Sometimes consumers are intent on replacing what was in a socket with the same thing – Sometimes consumers make a decision about the socket that is independent of what was installed previously The sub-group agreed to recommend the “Something In-between” replacement model – Some in sub-group would have preferred the “Typical Choices” model Captures some like-for-like replacement Does not require arbitrary selection of weights for the models – Sub-group emphasized the importance of communicating the “Something In- between” method clearly, because of the complexity of the approach – The Residential Lighting Subcommittee was presented with the Sub-group’s recommendation at their July 29 meeting, and did not object to this model. 10

Something In-between Replacement Model - Example 11 Halogen CFL LED Current market mix of sales 50% 40% 10% LED Measure – What happens when a halogen lamp in the baseline burns out? Half are replaced with the same type of lamp Halogen CFL LED Half are replace with the current market mix of sales ? 50% 25% 20% 5% The portions of replacements that are like-for-like and typical choices is a variable. Sub-group approved of 50%/50%

July 17, 2015 Sub-group Meeting 12 Savings (kWh/yr) First year savings Measure Life Time Adjusted Measure Life Savings (kWh/yr) First year savings Measure Life Time As modeled in measure assessment Reporting Results Majority of sub-group was supportive of determining an “adjusted lifetime” for the measure Adjusted Lifetime = the lifetime at which, if first year savings were held constant over the lifetime, would produce the same cost-effectiveness as the time-variable savings. Rationale: – Savings after first year don’t meet quality standards of Guidelines. – Lifetime is not subject to the same quality standards

Concerns with Adjusted Measure Life RTF CAT disagree with using Adjusted Measure Life – Savings portrayed in this approach are not accurate after the first year – Time-variable modeling must be done regardless Sub-group agrees that workbooks should show the time-variable stream of savings, regardless of if/how lifetime and savings are adjusted Determining Adjusted Lifetime would be an extra step at the end of the analysis By definition, Adjusted Lifetime would not change the cost effectiveness of the measure – Showing time-varying savings is consistent with how the Grocery Display Case EC Motor measure was handled at the July 21 RTF meeting – CAT doesn’t think that this approach is consistent with the Measure Lifetime Guidelines Concern expressed at both the Sub-group and Subcommittee meetings that this would result in an even more truncated lifetime for LEDs than our current 12 year limit. Staff/CAT propose to not compute an Adjusted Measure Life 13

July 29, 2015 Subcommittee Meeting 14 Reviewed sub-group meeting conclusions Reviewed RTF guidance from June 16 RTF meeting Concern expressed about programs’ ability to model time-varying savings in their cost-effectiveness tools – Staff/CAT clarified that they approximate the time-varying savings as two constant annual savings: to end of measure life – Consistent with treatment of Grocery EC Motors at July RTF mtg Concern expressed over “Adjusted Lifetime” implication for LED lifetime: it would be less than 12 years. – Difficult to explain what “lifetime” means to users of RTF work products Meeting Minutes: ResLightingSubcommittee _Final.docxhttp://rtf.nwcouncil.org/subcommittees/reslighting/RTF- ResLightingSubcommittee _Final.docx Participants Sean Abadilla (PSE) Jennifer Anziano (RTF Manager) Rebecca Blanton (PSE) Katie Breene (Colehour+Cohen) Doug Bruchs (Cadeo) Rob Carmichael (Cadeo) James Domanski (CLEAResult) Christian Douglass (Contract Analyst) Ryan Firestone (Contract Analyst) Jennifer Francis (BPA) Philip Kelsven (BPA) Emily Kemper (CLEARresult) Brian Loughran (CLEAResult) Jes Rivas (Navigant) Paul Sklar* (ETO) *RTF member

RTF Guidance from June 16, 2015 RTF Meeting 015_06_16%20v08.pptx 015_06_16%20v08.pptx 15

Previous RTF Guidance EISA 2020 in Baseline replacement model – Baseline replacement model from 2020 onward should reflect EISA 2020 standard (45 lm/W) model as Lowest cost/worst performing compliant technology (CFL – 45 lm/W, ~5,000 hours lifetime, CFL cost) Commercial participants in Retail programs – 10% of sales for General Purpose and Reflector and Outdoor categories – – 0% of sales for other lamp types – 7.5 hours/day – Same baseline market mix of technologies as residential participants – Bonneville Non-residential Lighting metered study may inform Hours of Use, otherwise consider making the Retail Residential Lighting measures Planning until regional data on this is available Lumen Bins – Switch to EISA lumen bins – Extend smallest lumen bin from 310 to 749 lumens to 250 to 749 lumens – Consider grouping 749 to 1049 lumens with 1049 to 1489 lumens 16 Different groupings being proposed today, based on Shelf/Sales results Better data source found, 8.0 hrs/day

Previous RTF Guidance How to model time-varying savings in ProCost From present to 2019 – use average savings over that period From 2020 onward – use average savings over that period Modify measure table to show savings from both time ranges Risk Mitigation Credit Apply only to savings that last beyond 2019 Hours of use data source Use RBSA metered sample extrapolated to NW population. Include additional regional metered data in analysis if available. LED Cost and Performance Extrapolate LED Cost and Efficacy to 2016, based on PNNL and DOE forecasts 17

Non-residential Hours of Use RTF-discussed plan to use Bonneville data from non-residential protocol, but sample size was too small – THANK YOU to SBW and Bonneville for working with us on getting this data quickly Recent metered study of screw-in lamps in commercial spaces in Pennsylvania – Research done to account for commercial participants in upstream retail programs Source: "2014 Commercial and Residential Light Metering Study" Prepared for: Pennsylvania Public Utilities Commission. Prepared by Statewide Evaluation Team, GDS Associates, Inc., Nexant, Research Into Action, and Apex Analytics 18

Previously Unaddressed Issues 19

Federal Standards Compliance Bonneville/NEEA Shelf/Sales Analysis reveals that the 2014 market contained many non-compliant halogen and incandescent lamps – Standards became effective 1/1/2012 – 1/1/2014 – Note that EISA is a manufacture and import standard, not a sales standard Despite this phenomenon Staff/CAT still recommend applying current standards as an adjustment to the Shelf/Sales baseline – Data is from 2014, measure will be implemented in 2016 two more years for standards to filter into the market – Effect of displacing a non-compliant lamp sale (via program) is just to have someone else install that non-compliant lamp Program would need to remove non-compliant lamps from circulation to have a regional effect – Consistent with previous Residential Lighting analyses and other appliance measures: non-compliant models in baseline data sets are either removed or adjusted to reflect the efficiency standard – This assumes manufacturers are following the law [PAUSE FOR DISCUSSION] 20

Federal Standards Compliance 21 % of sales for this lamp type/ lumen group Year standard became effective

Federal Standards Compliance Markets take several years to reflect EISA lighting standards Periodic shelf surveys in California funded by CPUC allow for a time series analysis Note that standards became effective in CA one year earlier than the rest of the U.S. 22 Data source: DNV GL, query for incandescent and halogen medium screw base a-lamps from all retail channelswww.bulbstockdata.com

Lumen Shift 23 Shelf/Sales data shows a shift in consumer trends – General Purpose and Dimmable Many Incandescent and Halogen lamps marketed as “60W” equivalent are less than 749 lumens Not the case for CFL and LED (~800 lumens, as expected) – Reflectors and Outdoors: May have been inaccuracies mapping RBSA wattages to correct lumen bins Suggests merging 310 to 749 and 750 to 1049 lumen bins – Rather than 750 to 1049 and 1050 to 1489

Storage Some program lamps do not get installed right away Most get installed within a few years This spreads savings out over time, relative to installing all lamps as soon as acquired Issue discussed at the October 15, 2013 RTF meeting 24 Current and proposed removal and storage rates

Storage Rate – CFL Failure But not all retail lamps get installed right away 25 Note: 1)Installation rate increases in first few years 2)But some lamps installed in the first couple of years are already failing 3)The lifetime of the retail measure (6.1) is longer than that of the direct install measure (5.5). From 10/15/13 RTF Presentation

Storage At Oct meeting, RTF decided to – Extend measure life for measures where storage was a factor to estimate median time to failure – Reduce savings by the storage rate At that time, the RTF rejected a suggestion to disregard the storage rate because, over multiple program years, previous years’ stored lamps provide savings where current year stored lamps do not. With the switch to a more complex baseline replacement model for this measure update, Staff/CAT recommend revising the treatment of storage. Staff/CAT approach: – Assume [1- StorageRate] lamps get installed at time of measure implementation and [StorageRate] lamps get installed two years after. – Extend measure life to reflect some delayed installations 26

Measure Scope Three-way lamps – Assumed baseline: other three-way lamps with similar lumen levels – But they will work in regular sockets (on the medium output setting) – Uncommon: 2% of shelf/sales, 1% of RBSA sockets – Exempt from EISA and predominantly inc/hal >> High estimated savings With reduction in savings from general purpose lamps, there is potential for programs to supply these lamps beyond the demand for three-way lamps – Staff/CAT approach: Group three-ways with General Purpose/Dimmable – Gets savings right on average – Removes perverse incentives for program over-supply of three-way lamps 27

Measure Scope Direct Install – Low Use – Mostly “Other” space types – Approximately 6% of RBSA sockets – Opportunity to reduce measure list – Staff/CAT Approach Exclude “Closet” from measure – Low savings, ability to reduce measure list Add “Other” to “Moderate Use”, – Avoids ambiguity about “other” space type 28

Results Comparison of proposed savings to current savings is not exact because lumen bins, lamp types, and space types have changed The mapping below – of proposed measure identifiers to current measure identifiers – is used only to compare results between the two analyses in the following slides. 29

Results - Savings 30 Results shown for Retail delivery mechanism. For other delivery mechanisms, see the “Results” sheet of the measure assessment workbook. Select delivery mechanism in cell Z3.

Results – Incremental Cost 31 Results shown for Retail delivery mechanism. For other delivery mechanisms, see the “Results” sheet of the measure assessment workbook. Select delivery mechanism in cell Z3.

Results - Lifetime 32 Results shown for Retail delivery mechanism. For other delivery mechanisms, see the “Results” sheet of the measure assessment workbook. Select delivery mechanism in cell Z3.

Results – Cost Effectiveness 33 Y-axis limited to 20. Many measures have a B/C ratio greater than 20. Results shown for Retail delivery mechanism. For other delivery mechanisms, see the “Results” sheet of the measure assessment workbook. Select delivery mechanism in cell Z3.

Motion “I move that the RTF approve the Residential Lighting – Screw-in Lamps UES measure as presented: Set the category to ‘Proven’ Set the status to ‘Active’ Set the sunset date to August 31, 2016” 34

Backup slides – Lamp Costs 35

Lamp Cost 36

Lamp Cost 37

Lamp Cost 38

Lamp Cost 39 Some values greater than $20