Guidelines Overview Michael Baker January 20, 2016

What we will cover  Guidelines Origin, Purpose, Priorities, and Structure  Measure Classification and Specification  Key Savings Estimation Concepts  Cost/Benefit and Lifetime Guidelines  Supporting Documents  Guidelines Under Development – A living Document 2

Origin and Purpose  After a decade of making decisions, the RTF “Codified” its decision- making process in the Guidelines  RTF needed to capture its current best practices to ensure more consistent decision-making and operations Purpose: Describe how the RTF selects, develops, and maintains methods for assessing the lifetime costs and benefits of energy efficiency measures (Roadmap 1.1) 3 Major Releases: June 1, 2011 June 17, 2014 December 8, 2015

RTF Priorities  Most important mission is establishing methods for reliable energy savings estimates  Quality standards are defined for savings estimation  Methods must … produce savings estimates of comparable reliability sufficient to meet the needs of regional energy planner  Transparent methods for estimating savings  Best practical savings estimate, i.e., savings are not discounted to account for poor data on a measure’s performance.  RTF also assesses lifetime cost-effectiveness for some measures  Measure costs/benefits and lifetime rely on best available data and professional judgment … no formal quality standards are defined  Regional cost-effectiveness determined using the ProCost model, but results may not be applicable to individual utilities 4

Guidelines Structure Roadmap, Figure 1: Structure and Relationship of RTF Documents and Tools (updated ) 5

Measure Classification  Changes in system configuration, equipment specifications or operating practices  Reduces electric power consumption as a result of increases in the efficiency of energy use, production, or distribution Savings Estimation Method Unit Energy Savings (UES) Standard Protocol Custom Protocol Program Impact Evaluation Measure Category Proven Provisional Planning Small Saver Measure Status Active Under Review Deactivated 6 Roadmap 1.3.1

RTF Role and Goal  RTF role depends on a measure’s savings estimation method  Goal: Produce savings estimates of “comparable reliability” Unit Energy Savings Standard Protocol RTF approves these Custom Protocol Program Impact Evaluation RTF provides guidance on these 7 Roadmap 2

Savings Estimation Methods (1) Unit Energy Savings  RTF Approves: Measure methods and savings values  Intended for: Stable, unitized savings that can be reliably forecast through the period defined by the measure’s sunset date  Required by Programs: Verified count of delivered units  Examples: (2) Standard Protocol  RTF Approves: Savings estimation method  Intended for: Measures with widely varying savings, but where data collection and analysis can be standardized  Required by Programs: Site-specific data collection and analysis  Examples: 8 Ductless Heat PumpClothes WasherCommercial LightingVariable Frequency Drives UES sometimes called Deemed

Savings Estimation Methods (3) Custom Protocol  RTF Provides Guidance on: Appropriate methods and documentation standard  Intended for: Measures that require site-specific savings estimation planning, data collection and analysis  Expected of Programs: Transparent site-specific savings report  Example: (4) Program Impact Evaluation  RTF Provides Guidance On: Appropriate methods and documentation standard  Based on: Reliable sample of program participants (and possibly non- participants) to determine savings achieved during program delivery period  Relies on: Other three methods, plus guidance for “Other UES”  Example: 9 Energy Management SystemsOPower

Measure Categories for UES and Standard Protocol Measures RTF approves the estimation method / savings values based on reliable data and analysis. UES measures only require a count of delivered units. Standard Protocol measures require faithful application. Proven RTF approves sound engineering or statistical methods / savings values with the condition that additional data is collected via a funded research plan. Provisional If a measure has sufficient usefulness and applicability in the region, RTF approves sound engineering or statistical methods / savings values. Requires a research strategy. Planning If measure is regionally applicable but regional technical potential savings are too small, the RTF approves sound engineering or statistical methods / savings values, without further research. Small Saver 10

Measure Status Active Measure meets all requirements set forth in the Guidelines Under Review Errors need to be corrected Savings need to be revised based on new data. Placed under review prior to sunset date. Deactivated Inadequate data exists to bring into compliance with Guidelines Insufficient value to the region to warrant further work 11

Measure Specification  Measure specifications describe all eligible applications of a measure  Specifications include:  Measure identifiers  Savings baseline  Implementation and product standards  Sunset date  Delivery verification guidance  RTF defines these for UES and Standard Protocol  RTF expects program operators to develop comparable information for Custom Protocol measures and all measures subject to Impact Evaluation 12 Roadmap 3

Measure Identifiers  Characteristics that uniquely identify each eligible measure application for UES measures  may help account for measure interactions, e.g., insulation and heat pumps  Limited to those characteristics data that can be reliably obtained by programs  RTF focuses on identifiers that cause significant differences (+/- 10%) in savings  Cannot be arbitrarily restrictive to create a Small Saver  Examples:  Clothes washers may have separate savings estimates depending on the water heater and clothes dryer fuel type;  Ductless heat pumps have separate savings estimates for different climate zones 13 Roadmap 3.1

Two Possible Baselines Current PracticePre-Conditions Used if the measure affects systems, equipment or practices that… … is at the end of its useful life. Includes delivering new equipment or practices. … still has remaining useful life. Defined by …… the typical choices of eligible end users in purchasing new equipment and services. … the typical conditions of the affected system, equipment, or practice at the time of RTF approval. Examples:Clothes Washers: Consumers buy when their existing washer dies. RTF considers what typical consumers are buying in the market. Ductless Heat Pump: Home owners add a DHP to their existing electric resistance zonal system that still works. RTF considers typical practice (being electric resistance zonal heaters) 14 Roadmap 3.2

Remaining Useful Life (RUL) Pre-Conditions Measures  Number of years that the measure’s baseline would have persisted if the measure had not been delivered  RUL > 10 Years  RTF sets RUL = lifetime  RUL =< 10 Years. Savings, costs, and benefits estimated for two periods:  Thru RUL expiration (Quality standard applies)  Balance of Measure Lifetime (Best professional judgment) 15

Implementation and Product Standards  Define the standards that govern the measures implementation and/or specific performance specifications that must be met  Examples:  Clothes Washers: The installation of an ENERGY STAR Top- Loading, ENERGY STAR Front-Loading, CEE Tier 1, CEE Tier 2, or CEE Tier 3 clothes washer. Qualifying ENERGY STAR washers must be standard capacity units (greater than 2.5 cu. ft.) meeting or exceeding the version 7.0 specification. Qualifying CEE washers must meet the latest CEE specification approved on December 18, 2014 and effective March 7, Programs using the ENERGY STAR clothes washer measures may not also use the CEE Tier measures, and vice versa.  DHP: Install an inverter driven DHP (0.75 tons or greater) in the main living area of a house with existing zonal electric heat. 16 Roadmap 3.3 and 3.4

Sunset Date  As part of approving a UES or Standard Protocol measure, the RTF will establish a sunset date for the measure  Not more than five years  Beyond this date, the RTF may decide that the measure’s savings estimation method is no longer RTF-approved.  Sunset data based on:  Expected revisions to energy codes or federal standards  For Provisional measures, expected completion of funded research plans  Shifts in current practices of consumers  Not appropriate for Custom Protocol measures, but program operators should consider similar factors in determining eligibility 17 Roadmap 3.5

Delivery Verification Guidance  Describes key data that need to be collected as part of delivery verification  Depends on factors included in the savings estimation method  RTF generally describes what data are needed, but may in some cases, describe how the data is to be collected  Note: The RTF is currently in the process of developing this guidance for its measures 18 Roadmap 3.6

Measure Interactions  The savings from one measure may, in part, be determined by whether another measure has already been delivered to the end user  Savings in one end use may change energy used by other end uses  Interaction is significant if the RTF determines that it could change a measure’s savings estimate by more than +/- 10%  Example: Upgrading insulation levels in a home would change the savings from a ductless heat pump 19 Roadmap 1.3.4

Savings and Savings Reliability  Savings (Roadmap 1.3.2) and Lifetime Savings (Roadmap 1.3.3)  Difference in energy use between the baseline and post (after the measure delivery) periods caused by the delivery of a measure  Terms “net” or “gross” are intentionally not used as they may conflict with definition of baseline  Current Practice measure have constant savings throughout their lifetime, while Pre-Conditions measures may have savings for RUL and Balance of Measure Lifetime (BML)  Savings Reliability (Roadmap 1.3.8)  An estimate is reliable if the errors associated with sampling, data collection, or modeling are sufficiently small and unbiased  Sufficiency is determined by the collective opinion of the RTF 20

Best Practices Savings Estimate  Relies on the best practical and reliable data collection and estimation methods  Can be carried out with proven techniques and resources deemed reasonable by the RTF  May rely on parameter values from studies performed by other agencies, if found to be sufficiently reliable based on diligent review 21 Roadmap

What is Diligent Review?  Diligent review includes, but is not limited to understanding:  Characteristics of the sample studied  Study’s data collection methods and analysis methods  Variability of parameter estimates  Feasibility of normalizing results to this region  Ultimately, the reliability of a parameter that was diligently reviewed is up to the judgment of the RTF 22 Roadmap 1.3.9

Transparency and Accessibility  All methods have documentation standards  Sources must be cited  Data and documents must be accessible  Must show your work  Estimation algorithms  Derivation of input parameters  Software must be either inherently transparent, such as a Microsoft Excel ® workbook or fully documented 23

Cost/Benefit Guideline  Purpose: provide systematic approach to developing estimates for costs and benefits  Refers to: incremental costs and benefits (increase or decrease from baseline) that are monetizeble and result from delivery of a measure  Includes: capital costs, maintenance, operations, non- energy impacts, etc. Examples  Clothes Washer:  Cost of the efficient unit (ex: CEE Tier 2) above the baseline costs (average cost of units purchased by customers)  If efficient unit uses less water than the baseline unit, the monetized value of this savings would be a benefit  Ductless Heat Pump:  Cost of the DHP above the baseline costs  If the baseline did not have central air conditioning, added cooling from the DHP would be a cost (and benefit) 24

Lifetime Guideline  Purpose: describe a systematic approach to developing estimates for lifetime of measure savings  Refers to: median number of years during which at least half the deliveries of a measure are in place and operable (producing savings)  Different than: sunset dates and remaining useful life Examples  Clothes Washer  14 years based on a DOE estimate of washer lifetimes  Ductless Heat Pump  15 years assuming the same lifetime as a heat pump (which is based on an analysis of several studies) 25

Supporting Documentation  Measure Assessment Template  Standard Information Workbook  ProCost and its Marginal Costs and Load Shapes  Standard Protocol Template  Research Strategy/Plan Templates 26

Under Development  Further clarification to Current Practice baseline definition  Implications of RUL requirements across measures and simplifications for Custom Protocols  Define and specify “First Year Savings” and “Lifetime Savings” throughout  Need for threshold requirement for Small Saver (and if so, what it is)  RTF Role (generally, relative to program design, relative to Power Plan) 27

Questions 28