1. HVAC and DHW System Conversion Cost and Energy Use Assumptions for Direct Use of Natural Gas Analysis September 28, 2010

2. Incremental Cost of Conversion Needs to Reflect Changing Federal Standards US DOE must adopt new efficiency standards for furnaces, central AC and heat pumps by May/June 2011. These standards would take effect in 2013 for gas furnaces and 2015 for Central AC and Heat Pump US DOE must adopt new efficiency standards for furnaces, central AC and heat pumps by May/June 2011. These standards would take effect in 2013 for gas furnaces and 2015 for Central AC and Heat Pump DOE adopted new standards for gas and electric water heaters effective April 16, 2015 DOE adopted new standards for gas and electric water heaters effective April 16, 2015

3. New Water Heater Standards Electric Electric –55 gallon & smaller tanks =>EF 95 –Above 55 gallon tanks => EF 2.0 Gas (storage) Gas (storage) –55 gallon & smaller tanks => EF 62 –Above 55 gallon tanks => EF 75 Gas (tankless) => EF 82 Gas (tankless) => EF 82

4. Consensus Recommendation on HVAC Equipment Efficiency Standards DOE has been petitioned to adopt a consensus recommendation on standards for gas furnaces, heat pumps and central AC DOE has been petitioned to adopt a consensus recommendation on standards for gas furnaces, heat pumps and central AC Consensus recommendation from AHRI (HVAC manufacturer’s trade association) and ACEEE, NRDC, ASE, NEEP, CEC, ASAP & NPCC Consensus recommendation from AHRI (HVAC manufacturer’s trade association) and ACEEE, NRDC, ASE, NEEP, CEC, ASAP & NPCC System Type Minimum Efficiency Split System Central AC 13 SEER Gas Furnace 90% AFUE Split System Heat Pump 14 SEER/8.2 HSPF Packaged HP 14 SEER/8.0 HSPF Packaged AC 14 SEER Gas-Pack 14 SEER/81% AFUE Oil Furnace 83% AFUE

5. Implications for Base Case Efficiency System Base Case Efficiency in Current Model Revised Base Case Efficiency Gas Furnace 80% AFUE 90% AFUE Heat Pump HSPF 7.7/SEER 13 HSPF 8.2/SEER14 Gas Storage DHW EF 59 55 gal & below EF 62 >55 gal. EF 75 Gas Tankless DHW EF 80 EF82 Electric Storage EF 90 55 gal & below EF 95 >55 gal. EF 2.0

6. Revised Baseline Conversion Cost Estimates HVAC Systems

7. Revised Baseline Conversion Cost Estimates HVAC Systems (No Existing Air Conditioning) Issue: How should we treat “added CAC service” from heat pump?

8. Revised High Efficiency Conversion Cost Estimates

9. Revised Conversion Cost for Water Heating Systems* *Not including gas service extension or electrical panel size increase

10. Tank Size Distribution Assumptions Approximately 10% of electric water heaters and 4% of gas water heaters are greater than 55 gallons, hence are subject to the EF 2.0 and EF 75 standards.

11. Energy Use Implications of New Standards Higher efficiency requirements for replacement water heaters, furnaces & heat pumps establish lower “baseline use” for replacement of existing systems Higher efficiency requirements for replacement water heaters, furnaces & heat pumps establish lower “baseline use” for replacement of existing systems –Example: »Prior assumptions - Consumer can replace existing 66 gal. electric water heater with EF-0.88 electric water heater or convert to EF-0.54 gas water heater. Base case electric use = »Revised assumptions - Consumer can replace existing electric water heater with EF-2.0 electric water heater or convert to EF-75 gas water heater.

12. Revised Energy Use Methodology Baseline home prior to conversion originally modeled “as found” (i.e., partially weatherized) Baseline home prior to conversion originally modeled “as found” (i.e., partially weatherized) Revised approach models conversion options (gas or electric) as “last measure in” (i.e., fully weatherized) consistent with 6 th Plan and RTF methodology for other retrofit measures Revised approach models conversion options (gas or electric) as “last measure in” (i.e., fully weatherized) consistent with 6 th Plan and RTF methodology for other retrofit measures

13. Space Conditioning Estimates Source: SEEM calibrated simulation results from weatherization and heat pump conversion/upgrade analysis Source: SEEM calibrated simulation results from weatherization and heat pump conversion/upgrade analysis Gas consumption assumes same input assumptions as electric forced air, adjusted for furnace conversion efficiency (AFUE 90%) Gas consumption assumes same input assumptions as electric forced air, adjusted for furnace conversion efficiency (AFUE 90%) Climate = PNW Weighted Average Climate = PNW Weighted Average –Should we do each heating zone analysis after initial results are reviewed?

14. Home Sized Revised to Reflect Correlation with System Types and Basements* System Type System TypeBasement No Basement Electric FAF 2,982 2,160 Zonal 2,573 1,540 Heat Pump 2,118 2,298 All 2,438 1,693 *Source: Analysis of Super Good Cents sub-metered data – N= 603 homes

15. Base Case Single Family Energy Use Assumptions – Space Conditioning System TypeAverage House SizeRepresentative Model Annual Heating Energy Use - Electricity (kWh) Annual Cooling Energy Use - Electricity (kWh) Annual Energy Use - Gas (Mbtu) Electric Zonal1600 Weighted Average 1344 sq.ft. and 2200 sq.ft. 7,743 Electric Zonal - Basement26882688 sq,ft. Basement Prototype 10,499 Electric FAF w/o CAC22002200 sq.ft. prototype 13,473 Electric FAF w/o CAC - Basement26882688 sq,ft. Basement Prototype 10,910 Electric FAF w/ CAC22002200 sq.ft. prototype 13,473 674 Electric FAF w/ CAC - Basement26882688 sq,ft. Basement Prototype 10,910 393 Heat Pump22002200 sq.ft. prototype 8,492 603 Heat Pump - Basement26882688 sq,ft. Basement Prototype 6,348 351 Gas FAF w/o CAC22002200 sq.ft. prototype 51 Gas FAF w/o CAC - Basement26882688 sq,ft. Basement Prototype 41 Gas FAF w/ CAC22002200 sq.ft. prototype 674 51 Gas FAF w/ CAC - Basement26882688 sq,ft. Basement Prototype 393 41

16. Base Case Multifamily Energy Use Assumptions – Space Conditioning PrototypeSystem Type Heating Use (kWh/yr) Heating Use (MBtu/yr) Cooling Use (kWh/yr) MF - 1050 sq.ft. Electric FAF w/o CAC 6,660 MF - 1050 sq.ft. Electric FAF w/ CAC 6,660 485 MF - 1050 sq.ft. Electric Zonal 6,228 MF - 1050 sq.ft. Heat Pump 4,939 436 MF - 1050 sq.ft. Gas FAF w/o CAC 25 MF - 1050 sq.ft. Gas FAF w/ CAC 25 485

17. Base Case Water Heating Assumptions System Type Representative Model Total Installed Cost Annual Maintenance Cost Annual Energy Use - Electricity (kWh) Annual Energy Use - Gas (Mbtu) SF - Electric Storage <= 55 gal50 gal EF 0.95 – Electric Resistance $ 751 $ 4.01 3,355 SF - Electric Storage > 55 gal66 gal EF 2.00 - Heat Pump Water Heater $ 2,176 $ 8.89 1,594 SF - Gas Storage <= 55 gal40 gal EF 0.63 EF - Standing Pilot $ 1,178 $ 12.36 -17.69 SF - Gas Storage > 55 gal66 gal EF 0.77 EF – Condensing w/ power vent $ 3,178 $ 14.79 12813.69 SF - Gas Tankless Variable output EF 0.82 Electronic Ignition, Power Vent, Improved HX $ 2,380 $ 66.88 3013.16 MF - Electric Storage <= 55 gal40 gal EF 0.95 Electric Resistance $ 617 $ 4.01 2,277 MF - Gas Storage <= 55 gal 30 gal EF 0.63 EF - Standing Pilot $ 1,071 $ 14.79 - 12 MF - Gas Tankless Variable output 0.82 EF Electronic Ignition, Power Vent, Improved HX $ 2,380 $ 66.88 288.91

20. ETO Gas Tankless Water Heater Cost

21. Retrofit Duct System Cost Style Size (sq.ft.)Cost/sq.ft. Duct System Cost Ranch1344 $1.30 $1,747 2-Story2200 $1.50 $3,300 1-Story w/Basement2688 $1.00 $2,688

22. Electric FAF Replacement Cost Electric Furnace CostCFMPriceInstalled Cost <1200 sq. ft.800 $ 535 $ 803 1200 - 1800 sq.ft.1200 $ 570 $ 855 1801 - 2600 sq.ft.1600 $ 600 $ 900 2600 - 3200 sq.ft.2000 $ 625 $ 938