1. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Energy Efficiency Post-2011 Phase 2 Update January 12, 2011 Northwest Power and Conservation Council Missoula, MT

2. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 2 Post-2011 Phase 2 Update  Phase 1 was finalized in August.  Final Policy Framework and Response to Public Comments are available online: http://www.bpa.gov/Energy/N/post-2011/Phase- 1.cfmhttp://www.bpa.gov/Energy/N/post-2011/Phase- 1.cfm.

3. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 3 Post- 2011 Phase 2 Overview  Phase 2 provided an opportunity for BPA, its customers and other stakeholders to continue a collaborative engagement.  Collectively, we can create the most efficient and effective energy efficiency programs possible.  Workgroups were very productive. Council staff was active in the workgroups.

4. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 4 Post-2011 Phase 2 Recommendations  Workgroups provided recommendations to BPA on the implementation of energy efficiency programs for the post-2011 time period.

5. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 5 Post-2011 Phase 2 Workgroups 1) Energy Efficiency Incentive (EEI) 2) Small/Rural/Residential (SRR) Focus 3) Conservation Potential Assessment (CPA) 4) Implementation Mechanism 5) Regional Programs & Infrastructure

6. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 6 BPA Proposal  BPA has taken the workgroup recommendations into consideration while creating a proposal that will be available for public comment in mid- to late-January.  Following slides are a high-level review of critical pieces of the BPA Proposal.

7. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 7 1) Energy Efficiency Incentive (EEI)  Incentive dollars will be assigned on a Tier One Cost Allocator (TOCA) basis.  Mechanism provides equity, but less flexibility to move funds where savings exist. Utility pooling can allow customers to create flexibility. “Unassigned Account” funds will be distributed on a first come, first serve basis.  Transition funding to fund existing projects should be minimal. In tracking system by 10/1/10 and exceed 20% of utility’s EEI.

8. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 8 Large Project Fund  Should capital budget funds be set aside to pay incentives for large (industrial) projects? BPA is putting forward two options for parties to comment on: Option 1: No funding Set Aside (Workgroup recommendation). − Utilities use their own EEI funds for projects. If projects exceed EEI, utilities self-fund or use other mechanism (pooling or bilateral transfer) to cover incentive costs. − Risk is that utility will not provide funding and savings will not happen. Option 2: Allow access to a large project fund (LPF). − Utilities have access to a fund that is set aside from EE’s capital budget (and not distributed through the EEI). − Access requirements to LPF: 1) project incentives must use >50% of utility’s EEI; 2) utility must self-fund at least 50% of incentives. − Risk that set aside funds will not be used. − Each utility’s EEI will be smaller because of the set aside.

9. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 9 2) Small/Rural/Residential  Attempting to ensure all customers have an opportunity to implement EE programs and utilize EEI funds. EEI funds must deliver reportable savings.  Who qualifies: sliding scale based on a utilities TOCA – Small, Medium, Large.  What is the benefit: increased % of performance payment (S=25%, M=20%, L=15%).  Additional measure and program support: increase usable measures as well as provide turnkey programs.

10. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 10 3) Conservation Potential  Should BPA develop methodologies and standards for Conservation Potential Assessments (CPAs)? BPA is putting forward two options for parties to comment on: Option 1: BPA should not develop prescriptive standards nor require utility CPAs (Workgroup recommendation). − BPA will assist its customers with the continued development and dissemination of the utility potential calculator (UPC). − BPA will help identify data collection protocols and prioritize collection of those data elements that significantly influence overall potential assessment. Option 2: BPA will develop prescriptive standards and methodologies for CPAs and require customers to perform CPAs. − Define standards for CPAs to ensure that customer-conducted CPAs are consistent across customers and consistent with the Council’s methodology − This allows CPAs conducted by individual customers to be ‘rolled-up’ to get to a bottoms-up public power potential for the region.

11. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 11 4) Implementation Mechanism  Two implementation options: 1) Standard (projects pre-approved) or 2) Non-Standard (projects reviewed after the fact) for custom projects.  M&V protocols will be the same regardless of which custom project path a customer has chosen.  Willingness to Pay will be the same for both options.

12. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 12 5) Regional Programs  Involve customers early to ensure that new regional programs meet needs and minimize disruption of existing programs.  Federal implementation work will change with the way funds are now allocated. Differential between direct serve and utility served locations. Enhance coordination and communications.

13. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 13 Contact Information http://www.bpa.gov/Energy/N/post-2011/ Josh Warner jpwarner@bpa.gov 503-230-5857 Matt Tidwell mttidwell@bpa.gov 503-230-4139