Center for Energy and Environment Development of Utilities Conservation Programs and Cost Effective Analysis Sheldon Strom Russ Landry, PE, LEED® AP Executive Director Mechanical Engineer Center for Energy and Environment 212 North 3rd Ave, Suite 560 Minneapolis, MN June 15, 2009

Center for Energy and Environment June 15, 2009 Excerpts from SB 2030 Legislation 216B.241 Subd. 9: Cost Effectiveness “A performance standard must not be established or increased absent a conclusive engineering analysis that it is cost-effective based upon established practices used in evaluating utility conservation improvement programs.”

Center for Energy and Environment June 15, 2009 Cost Effectiveness Analysis for SB 2030: Recently Compiled Results Key Observations Savings in ballpark of SB2030 can be cost- effective for a variety of buildings, although less so for some No clear patterns of reduced cost- effectiveness as % savings increases Utility programs could make SB2030 standards more cost-effective to building owners (& still cost-effective to utilities) with larger incentives

Center for Energy and Environment June 15, 2009 Excerpts from SB 2030 Legislation 216B.241 Subd. 9: CIP Programs “(e) The commissioner shall require utilities to develop and implement conservation improvement programs that are expressly designed to achieve energy efficiency goals consistent with the Sustainable Building 2030 performance standards. These programs must include offerings of design assistance and modeling, financial incentives, and the verification of the proper installation of energy- efficient design components in new and substantially reconstructed buildings.”

Center for Energy and Environment June 15, 2009 CIP Program Design & Support Major goals/challenges for CIP programs related to SB 2030 standard  Creating incentives for reaching SB2030 standards within existing design assist- ance programs  Building comprehensive design assistance programs for additional service territories  Establishing comprehensive & effective CIP program(s) for small buildings

Center for Energy and Environment June 15, 2009 Ideas for Possible CIP Program Elements 1) For large buildings, create or enhance comprehensive design assistance 2) Bonus incentive for SB2030 buildings (e.g. >$/kWh) 3) Incentives for meeting whole building “prescriptive” approach for small building (SB2030 Steering Committee will evaluate options further) 4) Incentives to offset increased design team fees for participating projects 5) Bonus incentives based on measured energy use 6) Incentives for commissioning 7) Incentives for operator training 8) Partnerships between utilities

Center for Energy and Environment June 15, 2009 Next Steps Related to CIP Programs Research & development of small building program template Work with utilities on new strategies and pilot programs Submit supportive CIP plan comments Cooperate with utilities on filings & modifica- tions for 2010 & beyond How can our team help utilities?