1. Commercial Efficient Tank Water Heater UES Measure Update Regional Technical Forum December 17, 2013

2. Commercial Tank Water Heater Measure Overview Current Category: Proven Current Status: Out-Of-Compliance Current Sunset Date: February 2014 Reason for Update/Review: Response to recommendation memo; bring measure into compliance Baseline Type: Current Practice Notes:Bringing measure into compliance as Small Saver 2

3. Staff Highlighted Areas Staff seeks RTF input on measure lifetime and tank set-point temperature assumptions – Staff recommends changing measure lifetime from 15 years to 13 years. – Staff recommends leaving tank set-point temperature assumption at 135°F, since little strong evidence is available to suggest a change. 3

4. Summary of Updates Updates based on recommendation memo – Ported analysis into latest ProCost template – Removed unused worksheets and analyses – Cleaned up equations such that important inputs (e.g. Recovery Efficiency, Average Rated Power, Op Hours) are located on a centralized tab, rather than hardcoded across many tabs – Fixed calculation error that results in changed savings for one residential- type tank measure application Other Updates – Investigated whether current market efficiency baseline needed to be updated by looking at several appliance databases: AHRI, CEC, and DOE appliance database – Found little difference (less than 1%, on average) between current workbook baseline assumptions and present-day baseline estimate; therefore did not update baseline 4

5. Remaining Issues for RTF Discussion Lifetime – RTF previously adopted 15-year lifetime for this measure – DOE Technical Support Document estimates typical water heater lifetime at 13 years, with a range from 6 to 20 1 – Staff recommends changing lifetime to 13 years 5 1 DOE Technical Support Document for Residential Water Heaters, "Chapter 8: Life-Cycle Cost and Payback Period Analysis". http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/27

6. Remaining Issues for RTF Discussion Tank Set-Point Temperature – Recommendation memo suggests using field measurements of tank set-point temperature if measure were to be Proven under Guidelines. – Secondary data for this parameter does not exist, and primary research would be unlikely for a Small Saver. – DOE test procedure assumes 135°F set-point temperature 1, which is used as the current assumption; however, recommendation memo states that DOE also recommends set- point temperatures closer to 120°F. – Various secondary sources (including DOE and hot water tank manufacturers) assume commercial set-points ranging from 120°F to 140°F+ (as high as 180°F in certain applications). – Staff does not find strong evidence to deviate from the current assumption, and therefore does not recommend a change. 6 1 DOE Test Procedure (Title 10 CFR 430 - Energy Conservation Program for Consumer Products Appendix E to Subpart B - Uniform Test Procedure for Measuring the Energy Conservation of Water Heaters, effective June 10, 1998)

7. Summary of Changes No change in energy savings for 12 of the 13 measures – Energy savings for one measure (Residential-type Water Heater, >= 25 gallons, <35 gallons) increased from 48 kWh to 69 kWh based on calculation error No change in incremental costs Lifetime changed from 15 years to 13 years per DOE Technical Support Document for water heaters All measures remain cost-effective 7

8. Decision “I _______________ move that the RTF: approve the Commercial Efficient Tank Water Heater measure as a Small Saver UES; Set the measure status to ‘Active;’ and Set the sunset date to March 31, 2015.” 8