20240910Application.pdf

a-10AW R,
RECEIVED
MEGAN GOICOECHEA ALLEN Tuesday, September 10, 2024
Corporate Counsel IDAHO PUBLIC
mgoicoecheaallenC�idahopower.com UTILITIES COMMISSION
September 10, 2024
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg 8,
Suite 201-A (83714)
PO Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-24-35
Application of Idaho Power Company for Authority to Fund its Continued
Participation in the Northwest Energy Efficiency Alliance in 2025-2029
through the Energy Efficiency Rider
Dear Commission Secretary:
Attached for electronic filing is Idaho Power Company's Application and Direct
Testimony of Quentin Nesbitt filed in support of the Application.
If you have any questions about the attached documents, please do not hesitate
to contact me.
Sincerely,
qwrz T 1
I��XYNL
Megan Goicoechea Allen
MGA:sg
Enclosures
P.O.Box 70(83707)
1221 W.Idaho St.
Boise,ID 83702

MEGAN GOICOECHEA ALLEN (ISB No. 7623)
LISA D. NORDSTROM (ISB No. 5733)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
mgoicoecheaallenCaD.idahopower.com
Inordstrom(aMdahopower.com
Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR ) CASE NO. IPC-E-24-35
AUTHORITY TO FUND ITS CONTINUED )
PARTICIPATION IN THE NORTHWEST ) APPLICATION
ENERGY EFFICIENCY ALLIANCE IN 2025- )
2029 THROUGH THE ENERGY )
EFFICIENCY RIDER )
Idaho Power Company ("Idaho Power" or "Company") in accordance with Idaho
Code § 61-502 and Commission Rule of Procedure' 52, hereby respectfully makes
application to the Idaho Public Utilities Commission ("Commission") for an order
authorizing Idaho Power's continued participation in the Northwest Energy Efficiency
Alliance ("NEEA") for the period 2025-2029 and that its participation be funded by the
Idaho Energy Efficiency Rider ("Rider").
In support of this Application, Idaho Power has filed the Testimony of Quentin
Nesbitt ("Nesbitt Testimony") contemporaneously herewith and represents as follows:
Hereinafter cited as RP.
APPLICATION - 1

I. BACKGROUND
1. Idaho Power considers energy efficiency and demand response to be an
important and necessary part of a balanced approach to meeting system energy needs,
and it endeavors to provide customers with programs and knowledge through its Demand
Side Management ("DSM") programs to help them use electricity wisely. As part of its
efforts in this regard, the Company participates in regional market transformation through
NEEA.
2. Established in 1997, NEEA is a non-profit organization whose purpose is to
maximize energy efficiency in the Northwest via the acceleration and adoption of energy
efficient products, services, and practices through market transformation. NEEA is funded
by several Northwest utilities, the Energy Trust of Oregon, and the Bonneville Power
Administration. Idaho Power has funded NEEA since the organization's inception.
3. This strategic alliance is built around recognition that greater market
transformation can be achieved across Washington, Oregon, Montana, and Idaho by
working together rather than by working as individual organizations. Using a collaborative
approach to identify and remove market barriers to energy efficiency and drive permanent
change throughout the supply chain, NEEA has played a significant role in energy
efficiency within the Northwest and its contributions have amounted to large energy
efficiency savings across the region. Because market transformation work takes time,
benefits may not be seen immediately, and as a result, NEEA operates on a five-year
funding cycle though it reports estimated savings due to NEEA regional market
transformation, allocated to utility stakeholders, on an annual basis.
4. Since NEEA's inception, Idaho Power has been an active and influential
APPLICATION - 2

member of the alliance. Currently, the Company participates in NEEA's initiatives and
coalitions, including the Commercial Building Stock Assessment ("CBSA") Residential
Building Stock Assessment ("RBSX) and the Advanced Heat Pump Coalition
("Coalition"). For both the CBSA and RBSA, Idaho Power has participated in monthly
work group meetings to discuss and provide feedback on each studies' objectives,
frameworks, sampling designs, billing analysis plans, and communication plans. For the
Coalition, Idaho Power attends regular meetings and provides input and guidance.
5. Idaho Power representatives have also provided input and support by
participating in the Regional Portfolio Advisory Committee ("RPAC"), Cost-Effectiveness
and Evaluation Advisory Committee ("CEAC"), Regional Emerging Technology Advisory
Committee ("RETAC"), the Idaho Energy Code Collaborative, Integrated Systems
Coordinating Committee, Products Coordinating Committee, and numerous working
groups. Additionally, the Company has had representation on the NEEA Board of
Directors since 1997 when NEEA began.
6. NEEA provides pooled resources, market research, and program design in
participating states, creating a greater likelihood that market change will be regional, on
a scale that manufacturers are more likely to respond to, but which Idaho Power could
not achieve on its own. Further, the Company's participation creates the potential to allow
it to influence the direction of NEEA's activities in a way that brings direct benefit to its
customers.
7. Since Idaho Power began participating in NEEA in 1997 through 2023,
Idaho Power's allocated portion of cumulative NEEA net market effects2 energy savings
2 Net Market Effects are energy savings associated with market change that are not counted as baseline
or local program savings.
APPLICATION - 3

was 471,777 megawatt hours or 53.86 average megawatts ("aMW"). A summary of Idaho
Power's allocated portion of savings from 1997-2023 is included as Attachment 1 to this
Application.
8. As noted above, Idaho Power has funded NEEA since the organization's
inception. At the time of its initial approval of Idaho Power's participation in NEEA, the
Commission required the Company to defer recovery of its annual expenditures until their
prudency had been demonstrated.3 In subsequent orders, the Commission found that the
Company's participation in NEEA was prudent and initially authorized Idaho Power to
establish a reserve consisting of Idaho Power's accumulated revenue sharing balances
to reimburse it for its deferred NEEA expenditures.4 Since 2002, the Commission has
authorized the Company to recover the costs for DSM programs and NEEA participation
from the Rider.5
3 In the Matter of Idaho Power Company's Application for Authority to Implement a Public Purposes
Charge to Fund the Company's Participation in the Northwest Energy Efficiency Alliance, Case No. IPC-
E-96-26, Order No. 27045 (Jul 16, 1997).
4 See In the Matter of the Application of Idaho Power Company for Authority to Use a Portion of the 1997
Revenue Sharing Balance to Fund Idaho Power Company's 1997 and 1998 Payments to the Northwest
Energy Efficiency Alliance, Case No. IPC-E-98-12, Order No. 27877 (Jan. 21, 1999); In the Matter of the
Application of Idaho Power Company to Offset 1998 and 1999 Northwest Energy Efficiency Alliance
Payments Against Reserved Funds, Case No. IPC-E-99-07, Order No. 28211 (Nov. 16, 1999); In the
Matter of the Application of Idaho Power Company for Authority to Fund its Continuing Participation in the
Northwest Energy Efficiency Alliance, Case No. IPC-E-99-13, Order No. 28333 (Apr. 10, 2000).
5 See, e.g., In the Matter of the Application of Idaho Power Company for Authority to Revise the Energy
Efficiency Rider, Tariff Schedule 91, Case No. IPC-E-04-29, Order No. 29784 (May 13, 2005); In the
Matter of the Application of Idaho Power Company for Authority to Increase its Rates and Charges for
Electric Service to Its Customers in the State of Idaho, Case No. IPC-E-08-10, Order No. 30740 (Mar. 6,
2009); In the Matter of the Application of Idaho Power Company for Authority to Fund its Continued
Participation in the Northwest Energy Efficiency Alliance for the Period 2010-2014, Case No. IPC-E-10-
04, Order No. 31080 at(May 12, 2010); In the Matter of the Application of Idaho Power Company for
Authority to Fund its Continued Participation in the Northwest Energy Efficiency Alliance through the
Energy Efficiency Rider for 2015-2019, Case No. IPC-E-14-38, Order No. 33210 (Jan. 8, 2015); In the
Matter of Idaho Power Company's Application to Fund its Continued Participation in the Northwest
Energy Efficiency Alliance Through the Energy Efficiency Rider for 2020-2024, Case No. IPC-E-19-34,
Order No. 34556 (Feb. 20, 2020).
APPLICATION -4

II. NEEA'S 2025-2029 ("CYCLE 7") STRATEGIC AND BUSINESS PLANS
9. As set forth in NEEA's Cycle 7 Strategic & Business Plans6 ("Cycle 7
Plans"), NEEA's efforts will be guided by four strategic goals in 2025-2029: (1) transform
markets for energy efficiency; (2) accelerate the adoption of grid-enabled end-use
technologies through market transformation; (3) advance strategies to reduce
greenhouse gas emissions through market transformation; and (4) advance the equitable
delivery of energy efficiency benefits to Northwest consumers through market
transformation.
10. In its next business cycle 2025-2029 ("Cycle 7"), energy efficiency Market
Transformation will remain NEEA's primary focus. Market Transformation is the strategic
process of intervening in a market to create lasting change in market behavior by
identifying and removing market barriers to energy efficiency and/or exploiting
opportunities to accelerate the adoption of all cost-effective energy efficiency. The
intention of NEEA's Market Transformation work is to achieve energy efficiency that is
permanently embedded into market structures and behaviors.
11. NEEA's core 2025-2029 budget is $211.8 million for electric funders,7 and
its current Cycle 7 electric portfolio of investments has a total achievable potential energy
savings value to the region of 1,300 aMW over the Iifecycle of the investments.$ This
savings potential is expected to increase as new emerging technologies and subsequent
Market Transformation programs are identified in Cycle 7.
6 See NEEA Cycle 7 (2025-2029) Strategic& Business Plans, Exhibit A to the Cycle 7 Agreement
provided as Attachment 2 to this Application.
See Cycle 7 Core Funding Agreement, Exhibit B to the Cycle 7 Agreement provided as Attachment 2 to
this Application.
8 See NEEA Cycle 7 (2025-2029) Strategic& Business Plans, Exhibit A to the Cycle 7 Agreement
provided as Attachment 2 to this Application at 72.
APPLICATION - 5

III. EVALUATION OF PARTICIPATION IN CYCLE 7
12. The Company is committed to the pursuit of tangible, transparent, and cost-
effective energy efficiency savings for its customers and strives to offer DSM programs
that provide value to customers and increase the energy savings accruing to the
Company's system over time.
Independent Evaluation, Measurement, and Verification
13. Idaho Power uses the Rider to fund its participation in NEEA, expenditures
from which are reviewed as part of the Company's annual DSM prudency request. In
reviewing the Company's 2020 DSM prudency request, Commission Staff ("Staff") raised
concerns that NEEA claims savings it is not directly responsible for producing and
recommended that an independent Evaluation, Measurement, and Verification ("EM&W)
be conducted to: "(1) clarify the savings NEEA claims; (2) the allocation of those savings
to its member utilities: and (3) the cost-effectiveness of those savings to the member
utilities based on the utilities' DSM avoided cost."9 In Order No. 35270, the Commission
noted Staff's concerns and directed the Company to address the items raised by Staff
and verify the accuracy of NEEA's claimed savings through an independent EM&V.
14. Subsequently, the Company worked with Avista Corporation for purposes
of conducting an EM&V of NEEA savings and cost-effectiveness as directed by the
Commission,10 The resulting EM&V Report was completed in April 2023, by ADM
Associates ("Evaluator"), and reported as part of the Company's 2022 DSM prudency
In the Matter of Idaho Power Company's Application for a Determination of 2020 Demand-Side
Management Expenses as Prudently Incurred, Case No. IPC-E-21-04, Staff Comments at 10 (Aug. 2,
2021).
10 Id., Order No. 35270 at 6 and 9 (Dec. 27, 2021).
APPLICATION - 6

request," and is also provided as Exhibit No. 1 to the Nesbitt Testimony.
15. Overall, the EM&V found Idaho Power's participation in NEEA to be cost
effective. More specifically, it found that during the 2017-2021 program years the
Company's Idaho customers received $73.2 million in benefits from NEEA activity at a
cost of $12.9 million. This yielded overall cost effectiveness of 5.68 from a Utility Cost
Test ("UCT") perspective. However, the Evaluator also identified concerns regarding how
NEEA accounted for and reported energy savings.
16. In reviewing how NEEA accounts for energy savings related to its activities,
the EM&V made 18 findings on various issues and nine related recommendations. In
response, NEEA expressed a willingness to make several of the recommended changes
and provided additional information to the Evaluator, which resulted in the Evaluator
issuing an addendum to the EM&V Report with revised findings and recommendations in
June 2023. The addendum is included as Exhibit No. 2 to the Nesbitt Testimony.
NEEA's Response to the EM&V
17. A summary of the Evaluator's revised recommendations and NEEA's
responses is set forth in Table 1 of the Nesbitt Testimony. As this summary reflects, a
majority of the recommendations stemming from the EM&V have or will be implemented
by NEEA. The primary outstanding recommendation is Recommendation No. 9, which
involves concerns that NEEA overstates code savings by claiming 100 percent influence
on all construction within a 10-year period after any code changes go into effect within
the region, without consideration of a naturally occurring baseline. The Evaluator
" In the Matter of Idaho Power Company's Application for a Determination of 2022 Demand-Side
Management Expenses as Prudently Incurred, Case No. IPC-E-23-10, Supplemental Application (Jun.
30, 2023).
APPLICATION - 7

recommended that NEEA's 100 percent savings claimed for 10 years policy be revisited
and further methods for estimating NEEA's influence and market baseline explored when
claiming code savings in future program years.
18. While NEEA was willing to consider Recommendation No. 9, it emphasized
that any changes to its current approach on reporting code energy savings would have to
be aligned on by its CEAC because the current approach of claiming one-third of code
savings by assuming a code life cycle of 10 years rather than 30 years was originally
decided on by the CEAC and also considering the impact that the recommendation
regarding evaluating NEEA's influence on codes would have on other utilities in the
region. NEEA has developed and is pursuing a coordinated and targeted approach to
address Recommendation No. 9.
19. Staff from NEEA has been actively working with Idaho Power, CEAC, and
a third-party evaluator, NMR Group, Inc.,12 ("NMR") to assess influence evaluation
approaches and the incorporation of a quantitative method of estimating influence. NMR
presented its preliminary assessment to CEAC at a July 31, 2024, meeting, where it
identified a number of opportunities for improving the qualitative approach NEEA has
historically conducted, which the Company believes will increase the rigor and
defensibility of NEEA's influence on code advancement for each state. The Company has
been advised that NMR is on track to deliver its final assessment this fall.
20. NEEA is also taking a number of other actions to address concerns related
to code savings. NEEA Staff recently provided initial responses to NMR's preliminary
recommendations as set forth more fully in Table 2 of the Nesbitt Testimony and is
NMR was hired by NEEA to perform the third-party assessment pursuant to the CEAC process and
timeline set forth in Figure 1 to the Nesbitt Testimony.
APPLICATION - 8

expected to provide final recommendations to CEAC for addressing Recommendation
No. 9 during its November 4, 2024, meeting. Notwithstanding, Staff at NEEA has already
committed to a separate third-party review of its approach for establishing and estimating
baselines for its state energy codes work. This third-party assessment will kick off in the
fourth quarter of 2024 and be discussed with CEAC in the first quarter of 2025.
Idaho Power's Analysis of NEEA's Cost-Effectiveness
21. Based on the EM&V recommendations, NEEAwill determine Idaho Power's
Net Market Effect savings for the Cycle 7 business cycle using the service territory
savings methodology. For codes, NEEA models code savings rates by state and then
applies savings rates to Idaho Power's share of the state residential customers from the
Energy Information Administration. For non-codes, NEEA collects data at the state and
zip code level and determines the number of Net Market Effect units and applies a savings
rate to determine Idaho Power's share of Net Market Effect energy savings. NEEA's data
source and allocation methodology are provided for each measure in the final savings
report, which is provided as Exhibit No. 3 to the Nesbitt Testimony.
22. Consistent with Idaho Power's objectives, NEEA's goal is to maintain a
portfolio of programs that are cost effective. NEEA evaluates cost effectiveness at the
portfolio level over a 20-year horizon; its approach looks at the total societal impacts of
transforming a market and considers all incremental costs and benefits of the total
regional savings. NEEA's cost-effectiveness guidelines can be found in Exhibit No. 4 to
the Nesbitt Testimony. Under this approach NEEA continues to be cost-effective for the
Cycle 7 as more fully described in the Nesbitt Testimony.
APPLICATION - 9

23. As part of its due diligence leading up to Idaho Power's entering into the
agreement to fund Cycle 7, the Company also performed an analysis to determine
whether the Cycle 7 would be cost effective under Idaho Power's traditional cost-
effectiveness approach. To assess cost-effectiveness, Idaho Power used a 15-year
portfolio look using: 1) Idaho Power's Cycle 7 funding share for 2025-2029, 2) NEEA's
Cycle 7 Net Market Effects energy savings forecasts for 2025-2039, and 3) Idaho Power's
DSM avoided costs from the 2023 Integrated Resource Plan.
24. As explained in the Nesbitt Testimony, to address the concerns raised by
the Evaluator and Staff regarding the overstating of code savings, the Company looked
at four different scenarios as it evaluated NEEA's cost-effectiveness. As shown in Table
3 of the Nesbitt Testimony, all scenarios were found to be cost-effective with UCTs greater
than 1.0.
25. Based on the findings and recommendations of the EM&V and NEEA's
responses thereto, NEEA's Cycle 7 Plans, and the analysis of NEEA's cost-effectiveness,
the Company is satisfied that continued participation in NEEA is a wise use of customer
funds and will provide sufficient direct benefits to Idaho residents during Cycle 7.
IV. CYCLE 7 FUNDING AND PARTICIPATION
26. After determining that participation in NEEA's upcoming funding cycle
would be a prudent application of customer funds, the Company worked with NEEA to
negotiate the Cycle 7 Core Funding Agreement ("Cycle 7 Agreement"), which was
executed by the parties on August 30, 2024, and is subject to the Commission's approval.
A copy of the Cycle 7 Agreement is included as Attachment 2 to this Application.
27. Starting with the agreement negotiated between the parties for the prior
APPLICATION - 10

funding cycle, the Cycle 7 Agreement incorporates basic contract updates and general
contract hygiene as well as other changes to improve clarity, consistency, and efficiency
to maximize the collective work of the alliance as well as revisions to better mitigate risks
and strengthen protections for the Company. The Cycle 7 Agreement adds robust
confidentiality, data security, and insurance provisions with more consistency, clarity,
better processes, stronger protections, and more stringent requirements while
maintaining the negotiated safeguards from the 2020-2024 cycle ("Cycle 6") contract to
help ensure the Company can terminate funding if the Company or the Commission find
that participation is no longer advisable.
28. The term of the Agreement begins January 1, 2025, and expires on August
1, 2030, unless otherwise terminated. Similar to the contract for Cycle 6, the Cycle 7
Agreement includes provisions permitting the Company to terminate the agreement and
cease funding if further concerns regarding cost-effectiveness materialize during the
funding cycle. More specifically, Section 2 of the Cycle 7 Agreement, in pertinent part,
allows the Company to terminate its Cycle 7 Core Funding obligation in the event of:
regulatory disapproval; a material change to NEEA's Bylaws that Idaho Power does not
approve; a determination by NEEA's board of directors that NEEA has made insufficient
progress in achieving objectives or does not have sufficient funds to operate; or Idaho
Power elects to terminate the agreement without cause upon 365 days' written notice to
NEEA.
29. Each NEEA member's funding percentage is based upon four components:
(1) a regional share of total customers, (2) a regional share of energy sales,13 (3) load
13 Based on 2021 EIA Form 861 data for retail customer and energy sales and Final Contract High Water
Mark (CHWM) Contract amounts for BPA public power customers.
APPLICATION - 11

growth forecast for 2025-2029, and (4) a 40 percent cap on increases as compared to the
prior business cycle. This funding percentage calculation places a 12.5 percent weighting
on the customer component and an 87.5 percent weighting on the energy sales
component. Load growth is assumed to increase at a rate of 1 percent annually.
30. Application of these components determined the Company's funding share
for the Cycle 7 to be 9.56 percent as provided in Exhibit B to the Cycle 7 Agreement (and
subject to regulatory approval per Section 2). This equates to $20,256,217 over the five-
year funding cycle or approximately $4.1 million annually.
31. The Company's Cycle 7 funding share reflects an increase from its funding
share in Cycle 6, which was 9.23 percent, or $14,710,808 over the five-year business
cycle (approximately $2.9 million annually). There are a number of reasons for this
increase. Not only were the Company's portion of total regional customers and kilowatt-
hour ("kWh") sales higher than in previous cycles, but the funding amount also increased
because NEEA's overall budget increased for Cycle 7. The overall budget increase was
due to new and expanded work in Cycle 7 including: (1) increased engagement across
all product groups; (2) a new focus on finding opportunities in faster-moving, higher-
volume markets; (3) greater emphasis on efficient technologies that save energy during
peak load times; (4) more duel-fuel opportunities; (5) research to identify customer
segments that are not directly benefiting from market transformation activities; (6)
increased investments in regional stock assessments; (7) base funding for the Efficiency
Exchange to ensure the event continues to be held each year and remains accessible;
and (8) opportunities for the region to support special projects outside of core business
plan funding. Additionally, inflationary pressures have caused a need for NEEA to
APPLICATION - 12

increase funding amounts, though if inflation continues during Cycle 7 NEEA is committed
to making additional cost reductions and operational adjustments to remain within the
five-year fixed budget.
V. MODIFIED PROCEDURE
32. Idaho Power believes that a technical hearing is not necessary to consider
the issues presented herein and respectfully requests that this Application be processed
under Modified Procedure, i.e., by written submissions rather than by hearing. RP 201,
et. seq. Idaho Power has, however, contemporaneously filed the Nesbitt Testimony in
support of this Application and stands ready to present testimony supporting this
Application in a technical hearing if the Commission determines such a hearing is
required.
VI. COMMUNICATIONS AND SERVICE OF PLEADINGS
33. Communications and service of pleadings with reference to this
Application should be sent to the following:
Megan Goicoechea Allen Connie Aschenbrenner
Lisa D. Nordstrom Mary Alice Taylor
Regulatory Dockets Idaho Power Company
Idaho Power Company 1221 West Idaho Street (83702)
1221 West Idaho Street (83702) P.O. Box 70
P.O. Box 70 Boise, Idaho 83707
Boise, Idaho 83707 caschenbrenner(a�_idahopower.com
mgoicoecheaallenCa-)_idahopower.com mtaylorCa)idahopower.com
Inordstrom(a_idahopower.com
[e-mail]
VII. REQUEST FOR RELIEF
34. Idaho Power has been a longstanding supporter of NEEA since its inception
and is confident that the organization has not only played a significant role in energy
APPLICATION - 13

efficiency within the Northwest, but that its efforts have and will continue to directly benefit
Idaho residents. The Company is committed to the pursuit of all cost-effective energy
efficiency and believes its continued participation in NEEA in Cycle 7 is likely to result in
cost-effective energy savings for Idaho Power's customers.
35. Idaho Power proposes to continue funding NEEA expenses through the
Rider and to document NEEA funding amounts and annual savings resulting from its
participation in NEEA in the DSM annual report filed with the Commission on or before
March 15th of each year. The Company believes that the ongoing use of Rider funds for
the Cycle 7 is a prudent application of customer funds but has maintained safeguards in
the contract so that the Company can terminate funding during Cycle 7 if further concerns
regarding cost-effectiveness materialize.
36. Idaho Power respectfully requests that the Commission issue an order
authorizing Idaho Power's continued participation in NEEA for the period 2025-2029, and
that the Company's participation be funded by the Rider. If the Commission grants this
request, the Company plans to continue to address the concerns and recommendations
of the EM&V and explore ways to reduce costs and keep the focus on energy efficiency
measures and activities that deliver actual verified benefits to Idaho Power customers.
The Company will continue to actively participate in RPAC, CEAC, RETAC, the Idaho
Energy Code Collaborative, Integrated Systems Coordinating Committee, Products
Coordinating Committee, numerous working groups and the NEEA Board of Directors to
ensure that NEEA's activities provide sufficient direct benefits to Idaho residents and help
advance Idaho Power's pursuit of cost-effective energy efficiency as mandated by the
Commission.
APPLICATION - 14

Respectfully submitted this loth day of September 2024.
Ay�r T IW�UA I&
MEGAN GOICOECHEA ALLEN
Attorney for Idaho Power Company
APPLICATION - 15

BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-24-35
IDAHO POWER COMPANY
ATTACHMENT NO. 1
SUMMARY OF ALLOCATED SAVINGS
(1997-2023)

SEE ATTACHED SPREADSHEET

BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-24-35
IDAHO POWER COMPANY
ATTACHMENT NO. 2
NEEA CYCLE 7 CORE FUNDING
AGREEMENT

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
NORTHWEST ENERGY EFFICIENCY ALLIANCE CYCLE 7 CORE FUNDING
AGREEMENT
NEEA Agreement#52744
This Northwest Energy Efficiency Alliance Cycle 7 Core Funding Agreement("Agreement") is between
Idaho Power Company("Funder") and Northwest Energy Efficiency Alliance, Inc., a nonprofit
corporation("NEEA"), and is effective January 1,2025 (the"Effective Date"). Funder and NEEA are
sometimes individually referred to as a"Party"and collectively referred to as"Parties".
BACKGROUND
A. NEEA represents an alliance of more than 140 utilities and efficiency organizations
working on behalf of more than 13 million energy consumers. This alliance funds the
activities and programs of NEEA,which is a fuel-neutral non-profit organization dedicated
to accelerating both electric and natural gas energy efficiency.NEEA activities are directed
by NEEA's board of directors("Board of Directors") and delegated to and implemented by
NEEA staff.NEEA is a unique organization established to realize the benefits of energy
efficiency that individual funders are not able to as easily or as efficiently achieve on their
own.
B. Funder seeks to fund NEEA as described herein to benefit from its relationship with NEEA
related to sustained improvement in energy efficiency and access to knowledge,new ideas,
expertise, improved market power, shared expenses, and shared risk.
Based upon the mutual promises exchanged between them and for valuable consideration,NEEA and
Funder agree as follows:
AGREEMENT
1. Cycle 7 Core Funding
a. NEEA shall deliver the goals and objectives outlined in the NEEA 2025-2029 Cycle 7 Strategic
and Business Plan adopted by NEEA's Board of Directors respectively on December 4,2023,
and on March 12, 2024,which is attached and incorporated by reference as Exhibit A
(references herein may refer to the"Strategic Plan"or"Business Plan"as context requires).
b. The Cycle 7 Core Funding Schedule,which is attached and incorporated by reference as Exhibit
B, sets forth the anticipated specific and total Cycle 7 Core funding amounts for each Direct
Funder,Funder's agreed specific and total Cycle 7 Core funding amounts under this Agreement,
and Funder's payment and invoicing schedule (references herein may refer to the"Cycle 7 Core
Funding").
Page 1 of 15 NEEA Contract#52744

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
2. Term and Termination
This Agreement shall be effective as of the Effective Date and will expire on August 1,2030,unless
otherwise terminated as set forth in the Agreement. SPOs(defined in Section 7 below)may remain in
effect past the expiration or termination date of this Agreement.
a. Termination for Lack of Re.ulatory Approval.With sixty(60) days' notice to NEEA,Funder
may: (1)reduce any portion of its remaining Cycle 7 Core Funding obligation that Funder's
public governing or regulatory body will not approve; or(2)terminate this Agreement if no
portion of its remaining Cycle 7 Core Funding obligation will be approved by Funder's public
governing or regulatory body. Funder shall pay NEEA for services through the date of
termination.NEEA shall refund any portion of Funder's Cycle 7 Core Funding obligation paid by
Funder under quarterly invoices that is for Business Plan activities to be rendered beyond the
termination date.
b. Termination for Cause. Either Party may terminate this Agreement if the other Party materially
breaches this Agreement provided that(1)the Party asserting the breach provides the breaching
Party with a detailed notice of the alleged breach and reasonable conditions upon which the
breach will be considered cured or mitigated, and(2)the breaching Party fails to satisfactorily
cure or mitigate the breach within forty-five (45)days of receiving the notice of the alleged
breach. Provided,however,the time period to cure or mitigate the breach may be extended by an
additional forty-five(45) days upon the breaching Party's written certification to the non-
breaching Party that(i) such breach is reasonably capable of being cured or mitigated within an
additional forty-five(45) days, and(ii) it has commenced and is diligently pursuing efforts to cure
or mitigate such breach. If,upon expiration of the cure periods,the breach is not reasonably cured
or mitigated,then the non-breaching Party may terminate this Agreement immediately upon
providing written notice to the breaching Party.
c. Termination for Material Change , lam. Funder may terminate this Agreement within ninety
(90)days of a material change to NEEA's Bylaws with which Funder does not approve,by
providing sixty(60)days' written notice to NEEA.
d. Termination for Convenience.Funder may elect to terminate or suspend this Agreement,in whole
or in part, at any time without cause and without penalty,with three hundred sixty-five(365)
days' written notice to NEEA.
e. Termination for Lack of Sufficiency. If the Board of Directors determines at any time that NEEA
has made insufficient progress in achieving objectives set forth in the Business Plan, or that
NEEA does not have sufficient funds to operate or to meet all objectives,Funder may choose to
terminate or reduce its Cycle 7 Core Funding obligations. Funder shall pay its pro-rata share of
the wind-down costs as determined by the Board of Directors.
f. Effect of Termination. Upon termination or expiration of this Agreement, all obligations of the
Parties(other than those obligations that expressly or by nature survive termination) shall
terminate.
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3. Reporting
a. For each year of the Business Plan,NEEA will develop an annual Operations Plan("Operations
Plan") and an associated budget that describes how NEEA will pursue the Business Plan goals
and objectives. The Operations Plan will specify focus areas and key Business Plan activities that
will be used to assess progress toward Business Plan goals and objectives.
b. NEEA will present the Operations Plan and associated budgets for approval by the Board of
Directors annually.NEEA will deliver: (i) quarterly financial reports; (ii)an annual status report
to the Board of Directors; and(iii) any other reports required by the Board of Directors,Board
Finance and Audit Committee,Board of Directors' Policies(including Financial Management
Policies),Business Plan or NEEA 2025-2029 Strategic Plan.' NEEA will provide a copy of the
quarterly financial and annual status reports to Funder.
4. Metrics
a. Energy Savings Metrics. The initiatives in NEEA's electric portfolio will deliver an estimated
190-2252 average megawatts ("aMW") of co-created energy savings for the region.NEEA will
report Business Plan specified targets and metrics at least annually.NEEA will report estimated
regional energy savings to Funder as follows:
i. Funder's share of the total estimated regional energy savings will be determined by Funder's
direct funding share of NEEA. Upon Funder request, savings will be reported based on
estimates at the service territory level where available.
ii. NEEA will provide Funder its estimated energy savings associated with all market
transformation efforts up to and including those of the Cycle 7 Business Plan on an annual
basis by July 1st of each year, inclusive of any true-up for the prior year's reported energy
savings.
iii. Estimated energy savings are reported using either the: (1)NEEA baseline methodology; or
(2)Northwest Power and Conservation Council Power Plan methodology. Funder will select
a methodology to use for its energy savings reporting and will notify NEEA in writing of its
selection.
iv. The energy savings reporting shall include approved Regional Technical Forum values,
measure life assumptions,non-energy impacts, and third-party evaluations on energy savings,
as is current practice at the Effective Date.
v. Funder may request access to data sets collected by NEEA as part of the Business Plan
activities.NEEA will provide Funder access to data sets unless Funder access is prohibited by
NEEA's contract,legal,regulatory, or fiduciary obligations. Unless otherwise agreed to
separately,Funder may not use the data sets for any other purposes than Funder's internal
analysis.
b. Savin sg Audit.Funder shall have the right,within sixty days' (60)written notice to NEEA,to
have a third party evaluate energy savings (including NEEA's cost to deliver savings) at the
Funder's expense.NEEA agrees to provide reasonable access to information,data, facilities,or
' The NEEA 2025-2029 Strategic Plan was adopted by the NEEA Board of Directors on December 4,2023.
2 The NEEA 2025-2029 Business Plan,page 46.
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personnel necessary for such review. Funder will share the results of the savings audit, including
underlying methodologies,with NEEA.NEEA will notify its Board of Directors of any request
for a savings audit.
c. Financial Audit. Each year,NEEA will retain the services of an independent certified public
accounting firm to conduct and complete an annual financial audit and internal control review.
The selection of the firm and audit will be overseen by members of the Board of Directors and
copies made available annually to the Board of Directors and Funders by August 1 st.
d. Funder Right to Audit Financial Records.NEEA shall maintain books and accounts of the costs
relating to the Business Plan activities in accordance with generally accepted accounting
principles and practices.NEEA shall retain all records relating to reported results delivered under
this Agreement for a period of not less than five years. Funder may reasonably request
information from these books and accounts to verify costs and other information related to the
Business Plan activities provided to Funder for a period of five years.Within sixty(60) days of
written request from Funder,NEEA will deliver either the original or a copy of any or all records,
calculations, summaries,reports, and records produced and collected by NEEA in the course of
performance of this Agreement,provided that such information is not protected by regulations or
laws that restrict the disclosure of such information. Information to be disclosed under this
section shall not include:(1)personally identifiable information of NEEA participants or survey
respondents; (2)proprietary information,trade secrets, or data from NEEA participants, survey
respondents, or contracting party that NEEA is contractually restricted from disclosing to Funder;
or(3) other Funders' confidential information.NEEA may request that Funder pay for reasonable
costs related to NEEA providing information requested under this Section 4(d)pursuant to
NEEA's Board Member Requests for Information Policy then in effect at the time of request. The
Board of Directors must approve any reasonable costs charged to Funder by NEEA under this
Section 4(d).
5. Confidentiality
a. To the extent permitted by applicable law or unless otherwise agreed by the Parties,the Parties
agree not to disclose to a third party any Confidential Information received from the other Party
in connection with this Agreement. "Confidential Information"of a Party means all non-public,
confidential,or proprietary information that is maintained as confidential and disclosed by a
Party("Disclosing Party")to the other Party("Receiving Party") or its employees, officers,
directors, shareholders, agents, attorneys,accountants,or advisors(collectively,
"Representatives") or any Subcontractor(defined below),whether disclosed orally or disclosed
or accessed in written,electronic, or other form or media, and is marked, designated, or
otherwise identified as"confidential"(in such cases where not so marked or designated,where it
would reasonably be expected in the industry that such information would be deemed
confidential),including without limitation: (i)personally identifiable information(in any form or
format); (ii)business plans, supplier,or distributor information; (iii)documents, software,
reports,data,records, forms,and other materials obtained by the Receiving Party or its
Representatives from the Disclosing Party or its Representatives; and(iv)all non-public data
regarding the Disclosing Party, its customers, and vendors that is either: furnished,disclosed,or
otherwise made directly or indirectly available to Receiving Party or any Subcontractor at all
tiers by or on behalf of Disclosing Party under this Agreement.
b. The Receiving Party will not disclose the Disclosing Party's Confidential Information to third
parties for any purpose, except to Receiving Party's Representatives or any Subcontractor to the
extent such Representatives or any Subcontractor need to know such information to assist the
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Receiving Party with its obligations or exercise its rights under the Agreement. The Receiving
Party shall be responsible for any breach by its Representatives of the confidentiality obligations
under this Agreement. The Receiving Party and any Subcontractor shall take reasonable steps to
protect and safeguard the confidentiality of the Confidential Information of the Disclosing Party.
These steps must be at least as protective as the steps Receiving Party takes to protect its own
confidential information.
c. The Parties will not be liable for the disclosure of any Confidential Information that is: (i) easily
accessible, or becomes easily accessible,in the public domain through no fault of the Receiving
Party; (ii)lawfully received from a third party and without any obligation of confidentiality;
(iii) already known to Receiving Party without any limitation on disclosure by Disclosing Party
before its receipt; (iv)is expressly authorized for disclosure in writing by the Disclosing Party;
(v) anonymized or aggregated such that Funder's customers are not personally identifiable; or
(vi) compelled legally.
d. This Agreement governs disclosures of Confidential Information by the Parties for the period
commencing on the Effective Date through August 1,2030, or the date in which the Agreement
is earlier terminated in accordance with the terms set forth herein,whichever date comes first
("Disclosure Period").Notwithstanding, and regardless that the Confidential Information may
have been returned or copies destroyed prior to the expiration of the Disclosure Period,the
obligations of confidentiality and nondisclosure imposed by this Agreement shall survive any
termination or expiration of the Disclosure Period and shall be in effect in perpetuity.
e. Upon the written request of the Disclosing Party,that Confidential Information is to be returned
or destroyed,the Receiving Party and any Subcontractor shall promptly return or destroy(as
instructed)the Disclosing Party's Confidential Information and shall confirm such action in
writing. Receiving Party and Subcontractor may,however,retain a copy of such Confidential
Information as required for archival legal, audit, or recordkeeping purposes, subject to the
Confidentiality requirement of this Agreement and applicable laws and regulations consistent
with Receiving Parry's and any Subcontractor's regular document retention policies and
procedures. Information systems backup and recovery data will be destroyed pursuant to
NEEA's data retention policies.
f. If a recipient of Confidential Information is or becomes legally compelled to disclose any
Confidential Information it has received from the other Party,then the recipient shall provide the
other Party with prompt written notice of the nature and source of the legally compelled
disclosure requirement. The other Party may thereafter seek a protective order or other remedy
necessary to protect its Confidential Information. If the other Party does not obtain a protective
order or other remedy, or if any provision of this Agreement is waived by the other Party,then
the recipient of Confidential Information shall disclose only that portion of the Confidential
Information that it is legally compelled to disclose, in the opinion of its legal counsel.
6. Data Ownership,Data Security, and Electronic Protection
As used in this Agreement,"Funder Data"means:non-public data regarding Funder,Funder's
customers,vendors(other than NEEA), and business plans that is furnished, disclosed, or otherwise
made directly or indirectly available to NEEA or any Subcontractor at all tiers by or on behalf of
Funder under this Agreement that is not otherwise anonymized or aggregated such that Funder's
Data cannot be tied back to Funder,its customers,vendors, or business plans, or could reasonably
trigger consumer notification requirements for unauthorized access to,use or disclosure of
"personal information"as defined by applicable law.Funder Data shall remain the sole property of
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Funder.NEEA may not use Funder Data for any purpose other than to perform its obligations
under this Agreement and any subsequent funding agreements between Funder and NEEA.Funder
Data may not be sold, assigned, leased, or otherwise disposed of or commercially exploited by
NEEA.
a. Data Security.NEEA represents,warrants,and covenants to Funder that NEEA has developed
and implemented, currently has in place,and shall maintain during the term of this Agreement a
comprehensive information security program that includes administrative,technical, and
physical safeguards and controls sufficient to: (i) ensure the security and confidentiality of
Funder Data; (ii)protect against anticipated threats or hazards to the security or integrity of
such information; and(iii)protect against unauthorized access to, or disclosure or use of, all
Funder Data that NEEA accesses,receives, stores,processes,transmits,maintains, or possesses
(collectively, "Security").NEEA shall document its Security and all safeguards,procedures,
and controls and keep them current in light of changes in relevant technology and provide
Funder with a copy of the same upon request and at no cost to Funder. Such Security shall
include,but not be limited to,the following:
i. NEEA shall store,process,and maintain any and all Funder Data on designated target
servers that reside physically within the boundaries of the United States.
ii. NEEA shall not process or transfer Funder Data to any unencrypted portable or laptop
computing device, or any other unencrypted portable storage medium.
iii. NEEA shall maintain physical security of all premises in which Funder Data will be
processed, stored, and/or transmitted.
iv. NEEA shall take reasonable precautions with respect to the employment of, and access
given to,all employees and contractors("NEEA Personnel")who have access to non-
aggregated or non-anonymized data of Funder customers, including background checks
and security clearances that assign specific access privileges to NEEA Personnel.
V. NEEA shall train NEEA Personnel on the proper use of data,information systems,and
the importance of information security.
vi. NEEA shall monitor relevant key and critical information systems for unauthorized use
of or access to Funder Data.
vii. NEEA shall validate system changes to ensure the security posture of the system(s) and
environments are not compromised by the change.
viii. NEEA shall maintain network and information systems security controls to protect
Funder Data.
ix. Software and Operating Systems shall be supported by the manufacturer and security
patches and updates shall be applied in a timely manner.
X. Information systems in which Funder Data will be processed, stored, and/or transmitted
shall be protected by anti-virus/anti-malware or equivalent systems software.
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xi. NEEA Personnel shall use two-factor authentication for remote access to systems that
access or store Funder Data.
xii. Data Transfers (in the event that NEEA transfers or receives Funder Data).
• Shared Information. During the term of the Agreement,Funder may request that:
(a)NEEA transfers certain Funder Data to one or more third parties designated
by Funder(each,a"Designated Recipient"); or(b)NEEA receives certain Funder
Data from one or more third parties designated by Funder(each, a"Designated
Representative"). In the event that Funder makes such a request,Funder will
provide written notice and express permission to NEEA that: (i)identifies the
applicable Designated Recipient or Designated Representative; (ii)identifies
Funder Data that NEEA must either transfer to such Designated Recipient or
receive from such Designated Representative(in each case,the "Shared
Information"); and(iii) sets forth additional terms and conditions including the
data transfer mechanism,adequate permissions and grants of authority, if any,
that apply to the transfer or receipt of the Shared Information by NEEA pursuant
to this Section 6(a)(xi). The Shared Information shall remain the sole and
exclusive property of Funder.
• Secure Transfer. When NEEA transfers Shared Information at the written request
of Funder pursuant to this Section 6(a)(xi),NEEA shall: (a)Transfer solely the
Shared Information to the Designated Recipient identified by Funder pursuant to
and in accordance with the written notice provided by Funder pursuant to Section
6(a)(xi); and(b) Securely transfer the Shared Information in accordance with
applicable law and via a data transfer mechanism approved by Funder.
• Secure Receipt. When NEEA receives Shared Information pursuant to this
Section 6(a)(xi),NEEA shall: (a)Use commercially reasonable efforts to
securely receive the Shared Information from the Designated Representative
identified by Funder pursuant to and in accordance with the written notice
provided by Funder pursuant to Section 6(a)(xi); (b) Securely store the Shared
Information in accordance with applicable law and as approved by the Parties; (c)
Treat the Shared Information received from the Designated Representative as:
(i)information,data and materials provided to NEEA directly from Funder under
this Agreement; and(ii)Funder Confidential Information under this Agreement;
and(d)Use Funder Data solely as authorized by Funder in writing, including in
this Agreement,in all applicable Data Sharing Agreements, and in all applicable
Special Project Orders,and solely for purposes of performing its obligations
under these agreements.
• Cessation. Funder may direct NEEA to cease transferring or receiving Shared
Information pursuant to this Section 6(a)(xi), at any time and in its sole
discretion,by providing written notice to NEEA. Upon NEEA's receipt of such
written notice,NEEA shall immediately cease transferring or receiving Shared
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Information pursuant to this Section 6(a)(xi),as applicable,and destroy such
information pursuant to Section 6(b)below unless otherwise directed by Funder.
b. Data Destruction.Upon termination of this Agreement,NEEA shall require the destruction or
erasure of physical or electronic media containing Funder Data so that such information cannot
practicably be read or reconstructed, in a time frame not to exceed 180 days. Exceptions to this
are instances where audit or legal requirements prohibit the erasure of information within this
time frame or if the Parties anticipate entering into subsequent contracts which require
continued use of Funder Data. Information systems backup and recovery data will be destroyed
pursuant to NEEA's data retention policies.
c. Security Incident.NEEA shall promptly notify Funder if NEEA discovers or becomes aware:
(i)that NEEA is not in compliance with or has violated any of the requirements of this
Section 6: or(ii)of any unauthorized disclosure or use of or access to Funder Data or any
unauthorized intrusion,penetration, or security breach involving NEEA information systems
that affects Funder(each of(i)and(ii)a"Security Incident"). In addition to all other remedies
permitted under this Agreement and applicable law,NEEA shall be required to promptly
remedy and mitigate any damages, losses, or expenses caused by a breach in the security of
NEEA's information systems that adversely impacts Funder and take all measures as may be
reasonably necessary to prevent any further Security Incident.NEEA shall reasonably
cooperate with Funder or governmental authorities and non-governmental entities in any action
or proceeding as may be deemed necessary by Funder as the result of such Security Incident.
d. Audit Requirements.NEEA will,on at least a biennial basis(or more often as determined by
NEEA or its Board of Directors),hire a third-party security auditing firm to perform a NIST
Cyber Security Framework audit(or an equivalent audit framework of a similar nature that is
generally accepted in the industry and approved by NEEA's Board of Directors)to assess the
Security and the design and operating effectiveness of controls over NEEA's sites, facilities,
and information systems,to the extent that they relate to the Business Plan activities.NEEA
will report the results of an audit to the Board of Directors and will make a copy of the audit
report available to Funder upon request.
e. Subcontractors. To the extent that NEEA is permitted to engage Subcontractors to perform, or
otherwise provide support to assist NEEA to perform, any of the obligations hereunder(each a
"Subcontractor"),then: (i)NEEA shall not share or disclose, or engage a Subcontractor to
access, store,process,transmit, or otherwise possess any Funder Data,unless and until such
Subcontractor has agreed in writing to protect Funder Data in a manner substantially similar
(but in any case no less restrictive)to that required of NEEA under this Agreement, and then
only on a need-to-know basis; (ii)NEEA shall cause such Subcontractors to comply with the
obligations and restrictions associated with substantially the same services,tasks, functions,and
responsibilities performed by such Subcontractors that are applicable to NEEA under this
Agreement, including,without limitation,those obligations set forth in this Section 6; and
(iii)NEEA shall remain responsible for the services,tasks, functions, and responsibilities
performed by Subcontractors to the same extent as if such services,tasks,functions, and
responsibilities were performed directly by NEEA.
f. Indemnification. In addition to any other indemnification obligation of NEEA set forth in this
Agreement,NEEA shall indemnify, defend,and hold Funder,Funder affiliates, and its
respective officers,directors, employees,representatives, agents, successors, and assigns
harmless from,for, and against any Damages(as defined in Section 9)to the extent such
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Damages arise out of or in connection with: (i) a Security Incident(including a Security
Incident by a Subcontractor) or(ii)NEEA's,or any Subcontractor's,failure to comply with the
requirements of this Section 6.
g. Injunctive Relief.NEEA acknowledges and agrees that any breach or threatened breach of the
obligations set forth in this Section 6 may result in a substantial likelihood of irreparable harm
and injury to Funder, for which monetary damages alone may be an inadequate remedy,and
which damages may be difficult to accurately measure.Accordingly,NEEA agrees that in
addition to any other remedies available,Funder shall have the right to obtain injunctive relief
as well as other equitable relief allowed by the federal and state courts. The foregoing remedy
of injunctive relief is agreed to without prejudice to Funder's right to exercise any other rights
and remedies it may have,including without limitation,the right to terminate this Agreement
and seek damages or other legal or equitable relief.
h. Survival. The rights and obligations set forth in this Section 6 shall survive the expiration or
termination of this Agreement for any reason.
7. Special Projects
a. In addition to the Cycle 7 Core Funding agreed to in this Agreement, Funder may also engage
NEEA to provide additional programs,Business Plan activities, or services that are outside of
the scope of the Business Plan(each a"Special Project").NEEA will clearly list the funders of
a Special Project on any publicly available materials associated with Special Projects.
b. Funder and NEEA will not become obligated to each other in any way for a Special Project
until a Special Project Order("SPO")is signed by an authorized representative of both Funder
and NEEA. Each executed SPO will be incorporated into this Agreement by this reference and
will specify the scope of work, schedule,term, and budget specific to the Special Project. Each
additional SPO will be numbered sequentially(i.e., SPO No. 1, SPO No. 2, and so on).
c. This Agreement sets forth the terms and conditions which govern the Cycle 7 Core Funding
and each additional SPO. However, each SPO may also contain unique terms and conditions
that apply to that specific SPO. In the event of any conflict between this Agreement's terms and
conditions and an SPO,the terms and conditions in the SPO, as they apply to that specific
Special Project,will prevail. In no event will the terms and conditions contained within an SPO
alter or affect the terms and conditions within this Agreement as they apply to Cycle 7 Core
Funding and the Business Plan.
8. Insurance
a. NEEA shall maintain(and shall cause each of its agents, independent contractors, and
Subcontractors performing any obligations hereunder to maintain) at all times at its sole cost and
expense at least the following insurances covering its obligations under this Agreement:
i. Workers'Compensation Insurance required by law, at statutory limits,and Employer's
Liability Insurance with a limit of not less than$1,000,000. A waiver of subrogation in favor
of Funder shall be secured.NEEA may omit the Workers' Compensation/Employer's
Liability Insurance requirement from a subcontract if a Subcontractor is not required by state
statute or their work does not necessitate coverage.
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ii. Business Automobile Liability Insurance including Hired and Non-Owned auto liability with
a combined single limit of at least$1,000,000. In cases where a Subcontractor does not have
this insurance coverage and automobile use will be limited when performing services for
NEEA,NEEA may instead require that Subcontractor agree to adequately insure any
automobile used while performing services on behalf of NEEA.NEEA may omit the
Business Automobile Liability Insurance requirement from a subcontract if a Subcontractor
does not use an automobile that would necessitate such coverage.
iii. Commercial General Liability Insurance,including(i)bodily injury, (ii)property damage,
(iii)contractual liability coverage covering its obligations of indemnity and defense and
(iv)personal and advertising injury with a combined single limit of not less than$1,000,000.
NEEA may omit the Commercial General Liability Insurance requirement from a
subcontract if a Subcontractor's work does not necessitate such coverage.
iv. Professional Liability Insurance or Errors and Omissions Insurance,including coverage for
covered claims of financial loss due to error, act, or omission of NEEA or NEEA's
employees, officers, equity owners, Subcontractors at any tier, or agents,with a limit of not
less than$2,000,000($1,000,000 for Subcontractors). Professional Liability Insurance shall
be maintained for a minimum of two years beyond the date this Agreement expires or is
otherwise terminated.NEEA may omit this insurance requirement from a subcontract if a
Subcontractor is not performing a professional service that would result in a material
financial loss due to error,act, or omission of the Subcontractor.
v. Cyber Liability, Network Security, Data Breach Protection, and/or Similar Privacy Liability
Insurance. In the event that NEEA or a Subcontractor has access to any Restricted
Information of Funder, its clients,customers,or employees,whether protected or not by any
local, statutory,federal or other governing legislation(s)or regulation(s),NEEA and its
Subcontractor(s) shall maintain cyber liability,network liability,data breach,or similar
privacy liability insurance covering actual and/or alleged covered acts committed by NEEA
or its Subcontractor(s), its employees, contractors, or agents with a limit of at least
$2,000,000 per wrongful act/claim and$2,000,000 in the aggregate($1,000,000 for
Subcontractors).For purposes of this Agreement,"Restricted Information"means any
confidential or personal information that is protected by law or policy and that requires the
highest level of access control and security protection,whether in storage or in transit,
including without limitation,personal identity information("PII"),protected health
information("PHI"), electronic protected health information("ePHI")protected by Federal
Health Insurance Portability and Accountability Act legislation,credit card data regulated by
the Payment Card Industry("PCI"),passport numbers,passwords providing access to
restricted data or resources,information relating to an ongoing criminal investigation, court-
ordered settlement agreements requiring non-disclosure, information specifically identified
by contract as restricted, and other information for which the degree of adverse effect that
may result from unauthorized access or disclosure is high. Such insurance shall expressly
provide coverage for the following perils up to the full limit of coverage with no sublimit: (i)
unauthorized use/access of a computer system or database; (ii)defense of any regulatory or
governmental action involving a breach of privacy or similar rights; (iii)failure to protect
from disclosure Restricted Information; (iv)notification and remedial action costs(such as
credit monitoring)in the event of an actual or perceived computer security or privacy
breach; and(v)denial of electronic access, electronic infection, and electronic information
damage,whether or not required by law. Such insurance shall extend to cover damages
arising out of any actual or alleged covered act(s) of any individual when acting under
NEEA's supervision, direction, or control. Such insurance shall provide coverage on a
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worldwide basis NEEA may omit this insurance requirement from a subcontract if a
Subcontractor will not have access to Restricted Information.
b. All insurance policies required to be issued under this Section 8 shall be issued on a United
States policy by one or more insurance carriers licensed to do business in the state where
services are rendered.Additional insured status shall be provided to Funder for Business Auto
Liability and Commercial General Liability Insurance policies.Upon execution of this
Agreement,NEEA shall provide evidence of insurance indicating all coverage required
hereunder.
9. Indemnification and Limitation of Liability
a. Each Party shall indemnify,defend, and hold harmless the other Party and its successors and
their respective directors, officers, employees, affiliates,representatives and agents (collectively,
"Indemnitees") from, for, and against any and all allegations, claims, liens, demands, suits,
losses, liabilities,costs,judgments, and damages of every kind and description, including court
costs, disbursements,expenses, and reasonable attorneys' fees whether incurred at trial or appeal
(collectively, "Damages"),resulting from or arising out of the performance or nonperformance
of the indemnifying Party's obligations under this Agreement,including(i) loss of or damage to
any property of a Party or any third party; (ii)bodily or personal injury or death of any
person(s); (iii) any breach of this Agreement by the indemnifying Party; (iv)infringement or
misappropriation of any intellectual property right of any third party by the indemnifying Party;
(v)the negligent acts, omissions, or willful misconduct of a Party, its employees,agents,
Subcontractors at any tier,or a Party's independent contractors; or(vi)a violation of federal or
state law,regulation, statute, or ordinance.
b. If Indemnitees seek indemnification from the indemnifying Party, Indemnitees shall: (i)notify
the indemnifying Party of the assertion of any claim; and(ii)provide reasonable assistance(at
the indemnifying Party's expense) in connection with the defense.
C. EXCEPT AS TO A PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT,
NEITHER PARTY SHALL BE LIABLE FOR INDIRECT, SPECIAL,INCIDENTAL,
PUNITIVE, OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR THE PERFORMANCE OF THIS AGREEMENT,INCLUDING BUT
NOT LIMITED TO,LOSS OF ANTICIPATED REVENUE,PROFITS,USE OF PROPERTY,
OR GOODWILL,WHETHER ARISING UNDER THEORIES OF NEGLIGENCE, STRICT
LIABILITY, TORT,BREACH OF CONTRACT, OR UNDER STATUTE OR RULE.
10. Equal Employment
a. During performance pursuant to this Agreement,NEEA agrees to comply with all applicable
equal employment opportunity, small business,and affirmative action laws and regulations. If
applicable,NEEA and any Subcontractor shall abide by the requirements of 41 CFR§§ 60-1.4(a),
60-300.5(a) and 60-741.5(a). These regulations prohibit discrimination against qualified
individuals based on their status as protected veterans or individuals with disabilities and prohibit
discrimination against all individuals based on their race, color,religion, sex, or national origin.
Moreover,these regulations require that covered prime contractors and Subcontractors take
affirmative action to employ and advance in employment individuals without regard to race,
color,religion, sex, sexual orientation, gender identity,national origin,protected veteran status or
disability.
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b. To the extent Executive Order 13496 applies to this Agreement or the Work performed
hereunder,the text of 29 CFR Part 471,Appendix A to Subpart A(as amended,modified,
restated or supplemented from time to time)is hereby incorporated by reference into this
Agreement as if set forth fully herein.NEEA and any Subcontractor shall comply with all
requirements set forth in 29 CFR Part 471,Appendix A to Subpart A.
11. Disputes
Any dispute arising out of or in connection with this Agreement shall,to the extent practicable,be
settled amicably by negotiation or mediation by the Parties,represented by management of each
Party,prior to either Party taking legal action.Notwithstanding the foregoing,either Party may seek
provisional legal remedies if in such Party's judgment such action is necessary to avoid irreparable
damage or preserve the status quo. In any proceeding by which one Party seeks to enforce its rights
under this Agreement or seeks legal or equitable relief available under law,equity, or this Agreement,
the prevailing Party shall be entitled to recover from the other Party all of its reasonable costs and
expenses incurred in connection with such action or proceeding, including reasonable attorneys'fees
and costs at the trial court and all appellate levels. This Agreement, and any and all claims that arise
out of or relate to this Agreement,will be governed by and interpreted in accordance with the laws of
the State of Oregon,without regard to conflict-of-laws principles. If any part of this Agreement is
found to be in conflict with applicable laws, such parts shall be inoperative,null and void so far as it
is in conflict with said laws,but the remainder of the Agreement will remain in full force and effect.
12. Notices
Notices required to be made under this Agreement shall be served on each Party by the following
methods: (i)personally, (ii)by United States certified mail,return receipt requested to the address
shown below, (iii)by overnight courier to the address shown below, or(iv)by email delivery to the
address shown below.Notice will be deemed delivered on a served Party as follows: (i) on the date of
personal delivery, (ii)at the expiration of the second day after the date of deposit in the United
States mail, (iii) on the date of confirmed delivery by the overnight courier, or(iv)when delivered by
email upon written confirmation of receipt by recipient or automatic email tracking(such as "read
receipt").
13. Non-Solicitation
It is hereby mutually agreed that neither Party will solicit for hire any employee(s)of the other Party
who are associated with efforts called for under this Agreement during the term of this Agreement
and for a period of one year thereafter.
14. Force Maieure
Neither Party shall be liable for any delay or failure in performance hereunder caused by: fire, flood,
earthquake, elements of nature,pandemic,riots, civil disorders,rebellions or revolutions in any
country,changes in governmental rules, laws,regulations, ordinances,permits, or licenses relating to
the subject matter of this Agreement, or any other cause beyond the reasonable control of such Party
and not reasonably anticipated by such Party(a"Force Majeure Event"),provided the non-
performing Party is without fault in causing such breach, default, or delay, and such breach, default or
delay could not have been prevented by reasonable precautions and cannot reasonably be
circumvented by the non-performing Party through the use of alternate sources,work-around plans, or
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other means. For purposes of clarity, late performance of services or late delivery of goods by
Subcontractors, suppliers or vendors shall not constitute a Force Majeure Event. A Party shall
promptly notify the other Party of the occurrence of any such Force Majeure Event that will or may
adversely affect the performance of the Party's obligations under this Agreement.
15. Miscellaneous
a. Nothing in this Agreement shall limit NEEA's ability to solicit funds from third-party sources.
Such solicitation of funds from a third party must be approved in advance when required by the
Board of Directors' Policies and Guidelines, including but not limited to the New Strategic
Opportunity Screening and Review Guidelines. This Agreement is not exclusive.Either Party
may contract with other third parties for the receipt of funding for or provision of similar
Business Plan activities.
b. This Agreement,including the Background and any Exhibits,amendments, schedules, or
attachments(all of which are incorporated into this Agreement by this reference),contains the
entire understanding of the Parties regarding the subject matter hereof and supersedes all prior
and contemporaneous negotiations and agreements,whether written or oral,between the Parties
with respect to the subject matter of this Agreement. The provisions of this Agreement may not
be amended or modified, except by an agreement in writing signed by Funder and NEEA.
c. In the event of any conflict between this Agreement and NEEA's Articles of Incorporation,
Bylaws, or any other of NEEA's organizational documents,the provisions of this Agreement
shall prevail as between Funder and NEEA.
d. Section headings in this Agreement are for convenience only and in no way define, limit,
construe,or otherwise affect this Agreement. Whenever possible,each provision of this
Agreement shall be interpreted so as to be effective and valid under applicable law. If any
provision of this agreement is held to be void,voidable, contrary to public policy,or
unenforceable,that provision will be deemed severable from the Agreement and the remainder of
the Agreement shall remain in full effect as if the severed provision had not been included.
e. NEEA agrees and acknowledges that Funder is providing funding to NEEA only for the purposes
and to the extent set forth in this Agreement, and that NEEA shall remain a separate independent
legal entity from Funder during the term of this Agreement.Neither Party shall be deemed an
agent,partner,joint venture, or employee of the other Party and nothing in this Agreement shall
be deemed to create a franchise arrangement between the Parties.NEEA agrees to be solely
responsible for all compensation of its personnel who provide services to Funder hereunder.
NEEA's personnel shall have no right or claim against Funder for workers' compensation, stock
purchase plan, stock option,health and welfare,pension,retirement, or other benefits arising out
of the Business Plan activities performed hereunder.
f. The provisions of this Agreement are intended to be for the exclusive benefit of Funder and
NEEA, and nothing in this Agreement shall be interpreted or construed as conferring upon any
third party any right or claim against Funder or NEEA or entitling any third party to enforce any
of the terms of this Agreement on Funder,NEEA,or otherwise.
g. The Parties agree that remedies at law for any breach or threatened breach by a Party may,by its
nature,be inadequate and that in addition to such remedies,the Parties are entitled to seek a
restraining order,temporary and permanent injunctive relief, specific performance, and other
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appropriate equitable relief,without showing or proving that any monetary damage has been
sustained.
h. Waivers of any right,privilege, claim,obligation, condition, or default shall be in writing and
signed by the waiving Party.No waiver by a Party of any breach of this Agreement shall be a
waiver of any preceding or succeeding breach, and no waiver by a Party of any right under this
Agreement shall be construed as a waiver of any other right.
i. NEEA acknowledges that securities laws prohibit any person who has received material,non-
public information about a company from purchasing or selling securities of such company or
from communicating such information to any person while such information is non-public under
circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell
such securities.NEEA shall comply with all such laws.
j. Any obligation in this Agreement which may involve performance subsequent to termination of
this Agreement,or which cannot be ascertained or fully performed until after termination of this
Agreement, including,without limitation, indemnification, confidentiality, insurance, and
warranty obligations, shall survive.
k. This Agreement may be executed in counterparts (including by means of electronic signature,
facsimile, or pdf), each of which shall be deemed an original but all of which together shall
constitute one and the same agreement,binding on the Parties even though all the Parties are not
signatories to the same counterpart.
(Signature Page Follows)
Page 14 of 15 NEEA Contract#52744

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NORTHWEST ENERGY EFFICIENCY IDAHO POWER COMPANY,INC.
ALLIANCE,INC.
Signed by: Signed by:
I
t,�Ca qa�'s �°?6 (faun@
429BC594C14446F... 9EB4DD768FE54F8...
Rebecca Yates Bo Hanchey
Executive Director VP, Customer Operations and Chief Safety
Officer
Au9-29-2024 Au9-30-2024
Date Date
Address for Notices: Address for Notices:
Northwest Energy Efficiency Alliance, Inc. Idaho Power Company, Inc.
Attention: Legal Notice Attention: Regulatory Legal Counsel
700 NE Multnomah St., Suite 1300 Idaho Power Company
Portland, OR 97232 PO Box 70
Boise,Idaho 83707
Email for Notices (when permitted): Email for Notices(when permitted):
[e-mail] [e-mail]
Phone: Phone:
503-688-5400 208-388-5824
Page 15 of 16 NEEA Contract#52744

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To be attached hereto:
Exhibit A: NEEA 2025-2029 Cycle 7 Strategic and Business Plan adopted by NEEA's Board of
Directors respectively on December 4, 2023, and on March 12,2024
Exhibit B: Cycle 7 Core Funding Schedule
{Remainder of Page Left Intentionally Blank)
Page 16 of 16 NEEA Contract#52744

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CYCLE 7 (2025-2029)
neea STRATEGIC & BUSINESS PLANS

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>> Table of Contents
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
NEEA 2025-2029 Strategic Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
NEEA 2025-2029 Business Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Electric Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Natural Gas Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Alliance Value Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Special Funding Opportunities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Operations and Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Risks and Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Appendices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Processes and Practices to Ensure Adaptability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Product Group Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Promising Opportunities in Scanning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Energy Savings Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Glossary of Key Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

>> Executive Summary
The Northwest Energy Efficiency Alliance (NEEA) is an alliance _
of more than 140 electric and natural gas utilities and partners
working to increase the adoption of energy-efficient technologies
and practices on behalf of customers in Idaho, Montana, Oregon and
Washington.
•w
MISSION:
NEEA catalyzes the most efficient use of energy for a thriving
Northwest.
PURPOSE:
,. NEEA is an alliance of utilities and partners that pools
resources and shares risks to transform the market for energy
efficiency to the benefit of all consumers in the Northwest. ;�Il►
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0 ver the last twenty-five years, Business Plan Focus Areas
NEEA has played a vital role
in supporting energy efficiency To deliver on these goals, NEEA's Board of
efforts in the Northwest by creating directors has identified a number of focus areas for
the market conditions necessary to the organization in the next business cycle:
accelerate and sustain the adoption Seeking opportunities to accelerate near-
of energy-efficient products and term market adoption and energy savings
practices. potential while balancing the need to maintain
a continuous pipeline of long-term energy
In its next business cycle (2025-2029), energy savings for the region.
efficiency Market Transformation will remain
• Prioritizing energy savings at peak demand
NEEA's primary focus. NEEA's Board also
to ensure NEEA's energy efficiency Market
recognizes the growing value that energy efficiency
Transformation activities are delivering the
contributes to the region through peak load
highest value to the region.
reduction, greenhouse gas emissions reduction,
and consumer benefits, and has prioritized these • Supporting regional decarbonization efforts
secondary co-benefits within NEEA's strategic and through the development and adoption
business plans. of highly efficient electric and natural gas
technologies.
2025-2029 Strategic Goals • Addressing the needs of stakeholders in all four
states, in both rural and urban settings and in
In 2025-2029, NEEA's efforts will be guided by four colder climates, through a mix of region wide
strategic goals:
and limited geographic activities.
Transform Markets for Energy • Implementing strategies to accelerate the
equitable delivery of energy efficiency benefits
to all Northwest consumers.
Accelerate the Adoption
TechnologiesGrid-Enabled End-Use New or Expanded Work in Cycle 7
through Market Transformation.
In the next business cycle, NEEA's work will be
Advance Strategies to Reduce focused in five key work streams: 1) emerging
Greenhouse Gas Emissions through technology, 2) market strategy and execution,
Market Transformation. 3) codes and standards,4) analytics, research
and evaluation, and 5) convene and collaborate.
All Market Transformation programs in both the
Advance the Equitable Delivery electric and natural gas portfolio will be carried
of forward, as will high-value regional activities such
EnergyNorthwest Consumers through as codes and standards outside of programs,
Market Transformation. the regional building stock assessments and the
Efficiency Exchange conference.
Exhibit A- Cycle 7 Core Funding Agreement NEEA Cycle 7 Strategic&Business Plans—Executive Summary 5

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Areas of new or expanded work in Cycle 7, Value Delivery
include:
• Increased engagement across most product NEEA measures Market Transformation results
groups, including up to two new electric Market by evaluating expected market progress and then
Transformation initiatives. quantifying the energy saved in the region through
alliance efforts. In the next business cycle, NEEA's
• A new focus on finding opportunities in faster- activities are expected to deliver between 190 and
moving, higher-volume markets to accelerate
market change leading to near-term savings 225 aMW of electric energy savings and 6 to 17
opportunities. million Therms of natural gas savings.These energy
savings and associated value metrics, including
• Greater emphasis on efficient technologies greenhouse gas and peak load reduction,are enabled
that save energy during peak load times and by the alliance's Market Transformation programs
incorporating peak load impacts into NEEA's
portfolio decision-making criteria. and investment in tools, training, resources, data and
research to support greater efficiency.
• More dual-fuel opportunities, leveraging
resources and market engagement to support
regional decarbonization goals and create value Budget
for both the electric and natural gas systems.
• Research to identify customer segments NEEA's core 2025-2029 budget is$211.8 million
that are not directly benefiting from Market for electric funders and$35.3 for natural gas.
Transformation activities, or are benefiting Additionally, the business plan includes$2.1 million
much later, and strategies to accelerate the in contracted expenses for the on-going End Use
equitable distribution of benefits to all Northwest Load Research special project and about$25
consumers. million for additional special projects that emerge
• Increased investment in regional stock throughout the course of the business cycle.
assessments, including the first Motor Products
Stock Assessment since 2000, a Residential
Building Stock Assessment that includes
multi-family buildings, and another Commercial
Building Stock Assessment.
• Base funding for Efficiency Exchange to ensure
the event continues to be held each year
and remains accessible for energy efficiency
professionals from across the Northwest. Budget
• Opportunities for the region to support special
projects outside of core business plan funding,
including end-use load flexibility and whole
building efficiency.
$211.8 million - Electric portfolio
$35.3 million - Natural gas portfolio
$25 million - Special projects (estimate)
$2.1 million - End Use Load Research
NEEA Cycle 7 Strategic&Business Plans—Executive Summary
Exhibit A-Cycle 7 Core Funding Agreement 6

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1 1 �
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Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Strategic Plan—Introduction 7

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Cycle 7
>> Introduction
he Northwest Energy Efficiency Evolutions in customer sophistication and
Alliance (NEEA) is an alliance a growing imperative for social equity in all
of more than 140 electric sectors, including energy.
and natural gas utilities and energy
efficiency organizations working on The Growing Value of Energy Efficiency
behalf of Northwest energy consumers The Northwest benefits from hydro power as a
to Increase the adoption of energy- clean and low-cost energy resource. The region
efficient products services and also relies on natural gas and other fossil fuels
practices. to deliver energy consistently to meet demand,
particularly during the winter months.
NEEA was established more than 25 years ago,
when utilities and energy efficiency stakeholders As the energy system continues to add more
from Idaho, Montana, Oregon, and Washington intermittent renewable resources, the Northwest
came together to address the challenges of a must contend with increased variability and new
changing utility environment by sharing the costs dimensions of uncertainty in the region's energy
and benefits of transforming markets for energy supply. This uncertainty will likely be compounded
efficiency. by significant additional electric loads from the
transportation and building sectors, and from
The Evolving Energy Landscape extreme weather events that test the limits of the
energy system and drive efforts for grid integration
Today, the utility environment is once again and load balancing initiatives across the West.
undergoing a period of intense and rapid change Critically, the region must ensure that the burden
driven by inter-related forces that could potentially of this transition in the energy system does not
redefine the region's energy sector in the next 5-10 fall on those who can least afford it, and that the
years. These drivers include: benefits are shared equitably.
• Policies at the federal and state level that are Northwest utilities have historically valued energy
driving decarbonization and equity goals. efficiency as an important input to resource
• Increased reliance on intermittent renewable planning and as part of their commitment to energy
resources. affordability for customers. While energy savings
• Changes in the relative value of energy remain the driving goal for regional investment in
efficiency and shifts in realizing that value. energy efficiency, for some utilities the co-benefits
that can come along with energy efficiency(e.g.,
• Electrification of the transportation and load flexibility, resource adequacy, greenhouse gas
building sectors. reduction and equity) are becoming increasingly
• Divergence in regional energy policy, needs important. Deployed strategically, energy efficiency
and priorities. can help the region meet its broader energy system
and societal goals by:
• Impacts of a changing climate on the hydro
system, seasonal load, and grid stability. Supporting reliable integration of renewable
resources into the system.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Strategic Plan—Introduction 8

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• Reducing peak demand based on time of day, "The strategic process of intervening in a market
and seasonal and geographic needs. to create lasting change in market behavior
by removing identified barriers or exploiting
• Helping the natural gas system meet opportunities to accelerate the adoption of energy
decarbonization objectives. efficiency as a matter of standard practice."
• Supporting load flexibility through efficient
products with advanced controls. The Board also recognizes that the value
• Lowering emissions of greenhouse gases and proposition for energy efficiency is growing and,
particulates by reducing the need for peaking for some utilities and stakeholders, changing.
resources. In Cycle 7, NEEA will continue to focus first on
market change that leads to energy efficiency.
• Contributing to deferred utility investments in In addition, NEEA will explore evolving efficiency
transmission and distribution. opportunities that align with NEEA's purpose,
• Lowering the energy burden for low-income mission, and core competencies in ways that drive
customers. system benefits for electric and natural gas utilities,
• Providing workforce development energy efficiency administrators, businesses and
opportunities. consumers throughout the Northwest.
Strategic Direction NEEA's Board has identified four strategic
goals for 2025-2029:
Against the backdrop of these evolving utility and
customer needs, NEEA's Board has reaffirmed the Transform Markets for Energy
continuing importance of energy efficiency to the
region and refined NEEA's Mission and Purpose:
Accelerate the Adoption
MISSION: NEEA catalyzes the most TechnologiesGrid-Enabled End-Use
efficient use of energy for a thriving through Market Transformation.
Northwest. Advance Strategies to Reduce
Greenhouse Gas Emissions through
PURPOSE: NEEA is an alliance Market Transformation.
of utilities and partners that pools Advance the Equitable Delivery
resources and shares risks to transform of Energy Efficiency Benefits to
the market for energy efficiency to Northwest Consumers through
the benefit of all consumers in the Market Transformation.
Northwest.
All four goal areas are mutually supportive and will
Looking ahead to Cycle 7 (2025-2029), NEEA's overlap in activities. However, NEEA's first goal,
highest value to the region remains energy Transform Markets for Energy Efficiency, is the
efficiency Market Transformation, which NEEA foundation upon which NEEA's activities are built.
defines as:
Exhibit A- Cycle 7 Core Funding Agreement NEEA 2025-2029 Strategic Plan—Introduction 9

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Cycle 7
>> Strategic Goals
Goal 1: Transform Markets for Energy Efficiency
NEEA leverages the collective market power of the region and its more than 25 years of Market Transformation
experience to create lasting market change. By identifying market barriers and then strategically intervening
to remove them, NEEA's work delivers permanent market change and verified energy savings. As regional
priorities continue to evolve over the next business cycle, NEEA will intervene in the market to influence
energy-efficient end-use product development in ways that align with those priorities and coordinate activities
among stakeholders interested in accelerating efficiency through Market Transformation.
KEY STRATEGIES
1.1— Pursue energy efficiency Market Transformation through a portfolio of initiatives, emerging technology,
and codes and standards development that enable energy efficiency to occur sooner, at lower costs, and in
larger amounts than otherwise expected.
1.2— Leverage end-use energy efficiency as a tool to deliver broader regional benefits such as load flexibility,
emissions reductions, resource adequacy, resilience, and equity.
1.3— Increase Northwest market leverage through collaboration and coordination with energy efficiency and
Market Transformation organizations both inside and outside the Northwest.
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Pictured.Residential triple-pane window(left)and Luminaire level lighting controls in office building(right).
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Strategic Plan—Strategic Goals 10

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Goal 2: Accelerate the Adoption of Grid-Enabled End-Use
Technologies through Market Transformation
In Cycle 7, NEEA staff will explore opportunities for Market Transformation to support the region's ability to
dynamically manage electric loads to maximize the efficient use of energy while advancing efficiency within
these products. Specifically, NEEA will prioritize opportunities to 1) leverage existing market relationships and
product development expertise to accelerate the integration of features that enable end-use flexibility, and 2)
promote standardized protocols that enable products to communicate with other end uses and the grid. These
end-use technologies and/or practices must integrate within the broader electric utility system operations. This
will require understanding of, and collaboration with, electric utility system operations and systems.
KEY STRATEGIES
2.1—Support regional load flexibility by enabling electric-grid communications and connectivity of energy-
efficient products in NEEA's portfolio.
2.2—Support regional need for electric load flexibility by undertaking projects that deliver load flexibility
benefits in addition, or connected to, energy efficiency benefits (where load flexibility is the primary benefit,
this work will be supported outside of NEEA's core funding).
2.3—Advance industry-wide product standards and protocols that enable grid connectivity (e.g., open
standards for in-home consumer products).
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Exhibit A- Cycle 7 Core Funding Agreement NEEA 2025-2029 Strategic Plan—Strategic Goals 11

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Goal 3: Advance Strategies to Reduce Greenhouse Gas
Emissions through Market Transformation
Energy efficiency will play an important role in helping the region achieve its emissions reductions goals.
However, diverging policy drivers and decentralized approaches to decarbonizing the electric grid and natural
gas system are creating uncertainty within the supply chain. Due to this uncertainty, some manufacturers are
hesitant to invest significant dollars in product technologies, while others are investing in technologies that
may or may not provide long-term value to a decarbonized system. Market Transformation offers a unique
approach to support regional decarbonization goals and reduce market confusion by connecting the market
to policy drivers and helping to align product development roadmaps with the anticipated regional needs of
the future. NEEA will leverage its core competencies by 1) convening the region to bring multiple parties and
perspectives together, 2) identifying and filling regional research and data gaps, and 3)working with market
partners to accelerate the development and market adoption of low-carbon technologies and strategies.
KEY STRATEGIES
3.1—Advance energy efficiency as a strategy for reducing greenhouse gas emissions by providing data and
analysis on the greenhouse gas emissions reduction benefits of efficient products, services, and practices.
3.2— Provide support to anticipate and address the implications of regional decarbonization-related policies,
where they exist, in program planning and technology road maps.
3.3—Support funders in meeting their decarbonization goals, where applicable, by undertaking projects
that deliver decarbonization benefits in addition, or connected to, energy efficiency benefits. Where
decarbonization is the primary benefit, this work will be funded outside of NEEA's core funding.
3.4—Track and analyze how emerging electrified loads affect the energy system to inform and guide NEEA
portfolio decision-making.
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Pictured. Gas condensing rooftop unit, Post Falls, Idaho
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Strategic Plan—Strategic Goals 12

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Goal 4: Advance the Equitable Delivery of Energy
Efficiency Benefits to Northwest Consumers through Market
Transformation
NEEA's Market Transformation efforts often focus on bringing innovations to market by targeting early adopters
— usually households and businesses with resources to invest in new, efficient technologies. And then when
possible, locking in those savings for everyone through more efficient codes and standards. The Diffusion
of Innovation theory predicts that as market share of an efficient technology grows it becomes more widely
available and more affordable for all. However, it can take several years, if not decades, for everyone to directly
experience those benefits. In Cycle 7, NEEA will undertake research to identify which customer segments are
not directly benefiting from alliance Market Transformation activities, or benefiting much later. The alliance will
also work with stakeholders and the market to identify and implement strategies to accelerate the equitable
delivery of energy efficiency benefits to Northwest consumers.
GOAL 4 KEY STRATEGIES
4.1 — Undertake research to understand how diffusion takes place within different consumer segments around
the region and opportunities for Market Transformation to accelerate equitable delivery of energy efficiency
benefits to Northwest consumers.
4.2— Identify and implement interventions that address shared regional priorities identified through research
efforts.
4.3—Support funders in meeting their goals by undertaking efforts to better understand or address barriers to
efficiency for targeted consumer segments (where priorities are not shared across the region, this work will be
funded outside of NEEA's core funding).
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Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Strategic Plan—Strategic Goals 13

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Cycle 7
>> Guiding Principles
EEA operates under a set of Business Plan and new opportunities that arise
global principles, Which WIII during the business cycle, including both core and
guide decision making and specially funded activities:
prioritization in the 2025-2029 • NEEA's priority is delivering energy efficiency
business cycle. through Market Transformation to the region
and its funders.
Principles to Guide Value Delivery • NEEA's Board recognizes that energy
efficiency delivers many dimensions of
These principles ensure that Northwest utilities value to the region, including reducing peak
and their customers are the primary beneficiaries demand, supporting grid resilience and
of NEEA's work and that the value of that work is reliability, and contributing to emissions
distributed equitably across the region: reductions. NEEA may consider these
secondary benefits of energy efficiency when
• NEEA's primary customers are its funders—
electric and natural gas utilities, Bonneville prioritizing new opportunities for Cycle 7 core
work.
Power Administration, and the Energy Trust
of Oregon —and the customers they serve. • All of NEEA's work must have some
When NEEA works outside of the region, connection to energy efficiency Market
those activities will align with Northwest goals Transformation. However, those opportunities
and deliver value back to the region. that primarily deliver benefits beyond energy
efficiency, or do not have sufficient regional
• NEEA is responsible for delivering value
fairly across the region. Though some interest to be included in core funding, must
opportunities may be of higher value to some be specially funded outside of the business
utilities, in aggregate all funders receive plan.
proportionate value from NEEA's Market NEEA's process for screening and reviewing new
Transformation activities over the course of opportunities that arise during the business cycle is
the business cycle. described in more detail in Appendix I.
• NEEA strives to benefit all Northwest electric
and natural gas customers, including rural Principles to Guide Implementation
markets and markets east of the Cascades.
These principles ensure that NEEA's Market
Transformation activities are executed in
Principles to Guide Prioritization collaboration and coordination with regional
funders to ensure effective results:
These principles ensure that NEEA's activities in
Cycle 7 align with regional priorities as identified NEEA focuses on efforts that leverage market
and agreed upon by NEEA's Board of Directors opportunities and/or reduce or remove
through the strategic planning process. These market barriers to energy efficiency for
principles apply both to work scoped in the sustained market change.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Strategic Plan—Guiding Principles 14

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
• NEEA works in markets that cross state On an annual basis, NEEA's Board will
and utility service territory boundaries and approve annual budgets and activities
throughout the supply chain, engaging through NEEA's Operations Planning process.
primarily with upstream and midstream In addition to providing annual Board
market actors, to accelerate the market oversight into resourcing decisions, this
adoption of energy-efficient end-use yearly planning process helps the alliance
technologies. remain nimble as new opportunities emerge
• NEEA pursues opportunities with clear within the five-year business cycle.
Market Transformation potential that NEEA is • NEEA staff will maintain systems, process,
uniquely positioned to leverage. records, and reporting protocols sufficient to
demonstrate fiscal responsibility and effective
• NEEA seeks opportunities to collaborate with risk management practices in all aspects of
funders and other market actors to leverage
operations.
resources, add complementary value and
avoid duplication of effort. • As part of regular quarterly updates, the
Executive Director will provide the Board with
• NEEA coordinates with utilities and a summary of activities pending, in progress
funders, especially when they may be and completed under the approved annual
affected by NEEA's downstream research or Operations Plan.
engagement.
• NEEA does not seek to influence regional
policy but tracks policy shifts to understand
market impacts and may provide subject
matter expertise to inform regional
policymaking or research, if requested.
• NEEA will conduct regular third-party
independent evaluations of programs to
assess influence and market progress, and
provide recommendations for adaptive
management.
Principles to Guide Resource Allocation
These principles ensure that resources are
allocated at the discretion of NEEA's Executive
Director with appropriate oversight by NEEA's
Board of Directors:
• NEEA's Executive Director is responsible for
strategically allocating resources to deliver _the highest value to the region.
•a, Boise River, Idaho
X
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Strategic Plan—Guiding Principles 15

>� 2025-2029 NEEA
Business Plan
More than 25 years ago, energy efficiency stakeholders from
around the region established the Northwest Energy Efficiency
Alliance (NEEA) in a coordinated effort to transform markets for
energy efficiency. Working together, the alliance permanently
removes market barriers to drive market change and accelerate
the adoption of energy efficiency in Idaho, Montana, Oregon,
and Washington. This collaboration has realized more than 879
average Megawatts (aMW) of co-created electric energy savings
'? and 10 million Therms of natural as savings through Market
g g g ;..
Transformation.
Y - - -
i Bend, Ore.

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Cycle 7
V Introduction
EEA is one of many NEEA leverages its unique role and core
organizations improving energy competency of Market Transformation to deliver
efficiency In the Northwest. a wide range of regional value on behalf of its
funders. In the 2025-2029 business cycle (Cycle
However, the alliance maximizes 7), those efforts will be guided by four strategic
return on investment by leveraging its goals.
unique regional role to deliver value
in ways that complement local energy
efficiency efforts. Specifically, NEEA 2025-2029 Strategic Goals
creates a regional impact by: .1 Transform Markets for Energy
Aggregating Market Influence
NEEA is the only alliance of both public and
private utilities and energy efficiency organizations
representing the entire Northwest—over 13 million
energy consumers—to national and global market Accelerate the Adoption
partners. This aggregation of market resourcesEnd-Use
enables NEEA to influence supply chain decision Technologies through Market
-
makers in ways that support regional goals and
create permanent market change.
Lowering the Overall Costs of Efficiency Advance Strategies to Reduce
By working together and pooling their resources, Greenhouse
NEEA's funders achieve economies of scale with through Market Transformation.
their energy efficiency investment that lowers the
overall regional cost of efficiency.
Mitigating Risk across the Region Advance the EquitableDelivery
NEEA's Market Transformation activities throughof Energy Efficiency Benefits to
Northwest Consumers
complement the efforts of its funders while Transformation.
mitigating individual risk to any one utility or
organization.
All four goals are interconnected and include
overlap in activities. The Cycle 7 Business Plan
<\ highlights the rationale for these four goals and
the strategies, objectives and associated funding
proposed to progress against these goals.
E hibit A Cycle 7 Core Funding Agreement NEEA 2fVfE,420j29eEZi9trateg?ea&-&uMta3JtRho13 17

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Business Plan Environment against market uncertainty and a tool to support
peak load reduction and resource adequacy.
As described in NEEA's 2025-2029 Strategic For some of NEEA's funders, these co-benefits
Plan, the Northwest energy system is undergoing of efficiency are becoming as important as the
a period of accelerated change driven by a variety energy savings themselves. NEEA's Cycle 7
of forces, including intense policy pressure, Strategic and Business Plans formalize NEEA's
extreme weather events and uncertain economic commitment to delivering these secondary
conditions. In NEEA's next business cycle, energy benefits of efficiency.
efficiency will remain critically important as a
Addressing the Imperative to Equitably Deliver
resource for consumers, businesses, and the
region's energy system. At the same time, the Energy Efficiency Benefits to all Northwest
value proposition of energy efficiency and the Consumers through Market Transformation
drivers for Market Transformation investment are The Diffusion of Innovation theory predicts that,
increasingly diverging across the region. This as market share of an efficient technology grows,
business plan was created against the backdrop it will become more affordable and available
of these dynamics and takes into consideration for all. However, it can take several years, if not
a number of trends and drivers identified by decades, for everyone to directly experience
NEEA's Board of Directors: those benefits. In Cycle 7, NEEA will undertake
research to identify which customer segments
Growing Need for Energy Savings are not directly benefiting from alliance Market
Through its strategic planning process, NEEA's Transformation activities or are benefiting
Board affirmed the continuing importance of much later. The alliance will also work with
energy efficiency to the region and recognized stakeholders and the market to develop and
new and unprecedented pressures on the implement strategies to accelerate the equitable
energy system and regional utilities. Rising delivery of energy efficiency benefits to all
energy costs, resource adequacy challenges and Northwest consumers.
decarbonization policy goals all amplify the need
for realizing as much near- and long-term energy
efficiency as possible. In Cycle 7, NEEA will seek
and prioritize opportunities to accelerate market
adoption and increase the likelihood of near-term
energy savings. At the same time, NEEA will fI
continue to invest in emerging technologies to
maintain a continuous pipeline of future energy
efficiency opportunities.
Changing Value of Energy Efficiency
I ~
Traditionally, energy efficiency investment hasi
been driven b the need to achieve regulatory - `
Y
targets, deliver customer solutions and as an Y'' - `' _ Tt
Is :��a�i
input for resource planning. Increasingly, energy
efficiency is being seen as an important buffer
against extreme weather variability, a hedge Seattle,
'Source:NEEA 2022 Annual Report. NEEA 2025-2029 Business Plan—Introduction 18
Exhibit A-Cycle 7 Core Funding Agreement

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
NEEA's 2025-2029 Business Plan takes into Over the past 25 years, NEEA has built trusted
consideration varying priorities across the region relationships with these key stakeholders
and identifies the need for more data collection by working to complement the work of other
and analysis. To address these needs, NEEA will: organizations without duplicating efforts or
causing market confusion. On behalf of the
• Work with the Board to understand the region, NEEA leverages these relationships to
individual priorities of utilities and states, influence market dynamics, procure regional
where they exist, as well as ongoing activities data and intelligence, and deliver value to the
to execute on these priorities. Northwest. As a growing number of other Market
• Undertake research and outreach to Transformation entities enter the market, NEEA
understand which consumer segments are can draw on its national leadership position to
or are not directly benefiting from NEEA's align work and priorities and deliver value to
Market Transformation interventions, and Northwest consumers by ensuring their needs
why and perspectives are represented.
• Establish goals and success metrics for the
business cycle, as well as a definition of the
National Partners
consumer segments NEEA is targeting.
• Identify ways to accelerate the delivery
There are many organizations outside the
of Market Transformation benefits across Northwest that contribute to creating the
targeted consumer segments. market conditions necessary to advance
energy efficiency in the region. These
• Conduct an assessment that outlines groups include retail, manufacturer,
potential opportunities to guide the Board in and distributor partners as well as
decision-making around further activity, and many energy efficiency organizations,
whether this is core or specially funded. laboratories, and government agencies
without whom this work would not
• Apply incremental, low-cost interventions be possible. Traditional collaborators
that address shared regional priorities. have included American Council for an
Desired outcomes include greater understanding Energy-Efficient Economy (ACEEE), CSA
of the customer segments that aren't directly Group, Consortium for Energy Efficiency
benefiting from alliance activities or benefiting (CEE), Department of Energy (DOE),
much later; strategies to accelerate the value Electric Power Research Institute (EPRI),
delivery to those customers, along with goals and ENERGY STAR, GTI Energy, Minnesota
success metrics; Board alignment and approval Center for Energy and Environment,
of proposed activities; and more equitable Natural Resources Canada (NRCan)
delivery of benefits to Northwest consumers. and New York State Energy Research
Development Agency (NYSERDA) among
Need to Partner Outside the Northwest to others. The alliance also collaborates
Amplify Market Influence with utilities outside the Northwest in
NEEA is one of several organizations across specific programs and on codes and
the country working to accelerate the adoption standards activities.
of energy-efficient products and technologies.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Introduction 19

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Certainty of Future Uncertainty Inflationary Pressures
NEEA's five-year business cycle provides the Since the most recent business planning
stability and investment predictability required process was completed in 2018, the consumer
for Market Transformation success. It also price index has increased by approximately
involves a degree of uncertainty, as market 20 percent.2 At the time of Cycle 7 business
and industry conditions five to seven years planning, forecasted inflation was expected to
in the future are difficult to predict. NEEA's add another 8 percent by 2024, resulting in
Market Transformation approach was developed a loss of purchasing power of approximately
to manage this risk though an adaptive 28 percent by January 2025. To recover some
management operating philosophy. Adaptive of its purchasing power, NEEA has factored a
management ensures NEEA remains nimble conservative estimate for inflation into the Cycle
and able to pivot to respond to market dynamics 7 budget (see Operations and Budget for more
or embrace new opportunities throughout the detail). NEEA recognizes the challenge for its
business cycle. NEEA employs a number of Board funders to absorb these historic cost increases
and stakeholder processes that support adaptive and has committed to finding efficiencies and
management by directing regional collaboration leverage points to deliver upon the Cycle 7
and coordination and providing Board oversight of Business Plan. If inflation continues to increase
annual budgets. These processes are described in during the five years of Cycle 7, additional cost
more detail in Appendix I. reductions and operational adjustments will be
made to remain within the five-year fixed budget.
#rs
1 t -
j
of
I .tea- - •� ` <-'= . '`� ' . Itl '
� a '
T:
- n
r
o = _
Source: JS 1UCjaX of J�ab4.r S$a istics. NEEA 2025-2029 Business Plan—Introduction 20
*_hi i l ye
ele / ( ore Funding Agreement

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
NEEA's Market Transformation Approach continuing even after direct market interventions
have stopped.
NEEA defines Market Transformation as "the
strategic process of intervening in a market to Market Transformation Creates Permanent
create lasting change." By executing intervention Market Change.
strategies directed at overcoming market NEEA's success is measured by its ability to
barriers, NEEA creates the market conditions remove specific barriers and create permanent
to accelerate and sustain the adoption of change in the market. Technology and innovation
emerging energy efficiency products, services, have the potential to provide energy savings
and practices over the long term. Over the last in the region, but the efficiency cannot be
25 years, NEEA's approach to implementing realized and sustained in the market without
and evaluating Market Transformation programs an accompanying change in the decisions and
has become a model for organizations across behavior of both supply- and demand-side
the country. This work is based on the following market actors. Accordingly, NEEA's interventions
foundational principles: must focus on market decision-makers,
Market Transformation is a Strategic Process including:
Market Transformation is built on the idea that Influencing manufacturers to incorporate a
markets are powerful forces for change that can different set of technologies or more efficient
be effectively influenced to accelerate adoption product features.
of energy-efficient innovations. It is a purposeful . Motivating distributors and retailers to stock
process, grounded in proven theories and more a different assortment of products.
than 25 years of applied experience. NEEA's
role as a Market Transformation organization is • Changing consumer purchasing habits
to leverage these forces to permanently change to include more efficient products and
the structure of a market so that the supply services.
and demand of an energy-efficient product is • Incorporating energy management into
established, functioning and preferred. standard business practices.
Market Transformation Removes Barriers and Greater permanence of market changes, such
Leverages Opportunities as codes and standards favoring efficiency,
NEEA's Market Transformation approach also increases access to efficient options for
is distinguished by its deliberate focus on communities or consumers that are often
removing market barriers and leveraging market overlooked.
opportunities in competitive markets to create
lasting market change. By removing market
barriers, new products are made available and
supported by strategies to increase awareness
among potential buyers. This increased
accessibility and awareness of more efficient
products or services builds demand in the
market, which in turn increases the adoption
of the efficient product or service over time,
4NE25-2029 Business Plan—Introduction 21
Exhibit A-Cycle 7 Core Funding Agreement

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Market Transformation Workstreams
NEEA achieves Market Transformation through Market Strategy and Execution
five key workstreams that it has honed over the NEEA manages a diversified portfolio of Market
past two and a half decades: Emerging Technology, Transformation initiatives to manage risk and
Market Strategy and Execution, Analytics, Research volatility in the markets in which it intervenes. For
and Evaluation, Codes and Standards, and Convene each initiative, NEEA identifies market barriers
and Collaborate. Individually, each workstream has to efficiency and then strategically intervenes to
broad value to the region. Together, they deliver influence decision-makers throughout the supply
permanent market change leading to energy chain, thereby removing those barriers. Examples
savings. include:
• Motivating distributors and retailers to stock
Emerging Technology a different assortment of products.
NEEA routinely scans for, assesses, and reports on . Developing tools and resources to support
the potential for newly identified efficient products, contractors to sell, install and maintain
services and practices. Once opportunities are efficient products.
identified, NEEA works with manufacturers to
encourage products that meet regional needs • Connecting supply-chain activities with
and truly save energy. As a regional organization, regional efforts to raise consumer awareness
NEEA focuses on opportunities that have broad about more efficient products and services.
benefits across the four Northwest states, including
Ultimately, this work ensures that Northwest
places that have unique barriers and opportunities
customers have greater access to efficient
for efficiency, such as rural markets and colder products at increasingly affordable prices, and
climates. By working together and aggregating
market actors have opportunities for skills training
investment, NEEA's funders and stakeholders
and job creation.
share both the cost and the risks associated with
this technology development.
Codes and Standards
Energy codes and equipment standards provide
a unique and cost-effective opportunity to lock in
energy savings. NEEA works with state-level and
national stakeholders, providing data, research and
product performance information gathered through
' NEEA's other workstreams to advance codes and
standards that are based on proven technologies
and benefit the Northwest. Because they establish
- I universal expectations that must be adopted by the
market, codes and standards favoring efficiency
are one of the most effective ways to ensure
widespread adoption of efficiency measures and
Pictured.High-efficiency heat recovery ventilator provide benefits to all Northwest consumers.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Introduction 22

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Analytics, Research and Evaluation information and best practices and align on regional
On behalf of the region, NEEA identifies, collects, priorities, including advisory and coordinating
analyzes and disseminates data, information committees, the Leadership in Energy Efficiency
and insight to assist decision-making and Awards, and the annual Efficiency Exchange
advance and report the progress value created conference. These opportunities enable the region
by Market Transformation. All of NEEA's Market to move the market faster and more efficiently than
Transformation programs are regularly evaluated any one organization could do alone.
by independent third parties to understand market
influence and progress and inform approaches
to adaptive management. NEEA's data and Efficiency Exchange is the premier
analytics expertise drives Market Transformation networking and learning conference for
success and provides the region with insights energy efficiency professionals from
and information unavailable from other sources to across the Northwest. Attendees from
inform NEEA's and the region's energy efficiency public and private utilities, consulting
efforts. Additionally, NEEA collects market data at and research firms, government and
a regional stock level to inform market strategies, non-profit organizations come together
assess progress and provide validation of data to learn and connect to help the region
used for reporting energy efficiency value metrics. more effectively achieve its energy
efficiency goals. In Cycle 7, NEEA
Convene and Collaborate will continue to host this annual event
in partnership with Bonneville Power
NEEA regularly creates and communicates Administration and the Northwest Power
opportunities for regional energy efficiency
and Conservation Council.
stakeholders by convening the region to share
rpr r
- I V
Exhibit A- Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Introduction 23

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Strategic Markets
Through the Cycle 6 business planning process,
NEEA identified the potential for growth across The HVAC Product Group includes the supply chain
multiple cross-sector product groups and then that manufactures, distributes, specifies, designs
reorganized its natural gas and electric portfolios to and installs commercial and residential HVAC
align with those opportunities. Working in cross- products, and the end consumers who purchase
sector product groups allows NEEA to leverage them. High-Performance HVAC (HP HVAC) and
relationships, data, infrastructure and other assets Advanced Heat Pumps (AHP) are the two electric
to support multiple programs and to use resources programs in this Product Group, while Efficient
more flexibly and efficiently. This structure also Rooftop Units (Efficient RTUs) is the one natural-
creates efficiencies for NEEA's work with the gas-funded program.
supply chain, in which products and delivery
channels often cross multiple sectors. In Cycle 7, The Lighting Product Group includes the supply
NEEA will continue to operate in as many as six3 chain that manufactures, distributes, specifies,
cross-sector product groups: building envelope, designs and installs lighting products (e.g., lamps,
consumer products, HVAC, lighting, motor-driven ballasts, controls and fixtures), and the end
systems, and water heating. In addition, NEEA will consumers who purchase them. Luminaire Level
support two infrastructure programs: BetterBricks Lighting Controls (LLLC) is the one electric program
and Integrated Design Labs. in this Product Group.
The Motor-driven Systems Product Group includes
the supply chain that manufactures, distributes,
NEEA Product Groups specifies, designs and installs a variety of motor-
The Building Envelope Product Group includes driven systems (e.g., pumps, fans, compressed air
the supply chain that manufactures, distributes systems and high-performance motors), and the
and sells the materials that physically separate decision-makers who influence the purchase of
the interior and exterior of a building, and the these products. Efficient Fans and Extended Motor
end consumers who purchase them. High- Products (XMP) are the two electric programs in
Performance Windows is the one program in this this Product Group.
Product Group. It is supported by both electric and
The Water Heating Product Group includes the
natural gas funders.
supply chain that manufactures, distributes
The Consumer Products Product Group includes the (wholesale and retail), specifies, designs and
supply chain that delivers consumer goods and installs electric and natural gas water heating
services in high volume, including manufacturers, systems (commercial and residential), and the end
distributors, physical and online retailers, contractors consumers who purchase them. Heat Pump Water
and installers, and the end customers who Heaters (HPWH) is the one electric program in this
purchase them. The Retail Products Portfolio(RPP) Product Group. In Cycle 7, NEEA will leverage the
is the one electric program in this Product Group. relationships and resources developed through
the natural gas Efficient Water Heating program to
explore residential and commercial gas heat pump
opportunities.
3New Construction was a stand-alone product group at the
beginning of Cycle 6.Those activities have since been absorbed
into the Codes and Standards workstream. NEEA 2025-2029 Business Plan—Introduction 24
Exhibit A-Cycle 7 Core Funding Agreement

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Enabling Infrastructure Programs
Product Groups are supported by enabling Integrated Design Labs have a mission to transform
infrastructure programs that are leveraged the design, construction and operations of
by multiple programs to build relationships, commercial, institutional and residential buildings
support market engagement, and deliver further to advance energy-efficient, high-performance
leverage for the region. NEEA manages two such and healthy buildings in the Northwest. Integrated
infrastructure programs: BetterBricks and the Design Labs exist at several prominent universities
Integrated Design Labs. in the Northwest, including Montana State
BetterBricks is a market engagement platform University, the University of Idaho, the University
that provides resources and market knowledge to of Oregon, the University of Washington, and
commercial building stakeholders in an efficient, Washington State University. These universities
coordinated and streamlined manner. BetterBricks are critical partners to alliance programs by
supports multiple Market Transformation helping accelerate Market Transformation through
programs in the commercial building sector by research, technical assistance and education.
supporting market relationships, providing tools Integrated Design Labs activities can be further
and resources, and maintaining communications leveraged to support local and regional efficiency
channels. BetterBricks launched in 1999 and programs in a variety of ways, including through
represents a long-standing, trusted resource for case studies, training, testing and evaluating
building professionals, including building owners,
new technologies, and building awareness of
property managers, buildings facilities staff, new programs or technologies within the design
architects, designers, engineers and contractors. community.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Introduction 25

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Cycle 7
>> Electric Portfolio
fter several years focused on portfolio will deliver the bulk of NEEA's energy savings in
diversification, NEEA is entering Cycle 7 Cycle 7, alongside advancements in residential
with an electric portfolio that is broader and commercial codes, and federal and state
and more balanced than the previous cycle. Asa standards. Earlier stage opportunities—those
result, NEEA has a robust foundation for the future in Concept or Program Development—will be
pipeline of energy savings, along with the flexibility considered for the portfolio if a viable Market
to respond to varying market conditions, optimize Transformation opportunity is determined and
regional energy savings and address peak capacity in consultation with the region through NEEA's
management needs. stakeholder advisory process.
Table 1 below outlines NEEA's starting electric
portfolio for Cycle 7, organized by Product Group
and Initiative Lifecycle phase (i.e., degree of
maturity). Programs in Market Development
Table 1: Cycle 7 Starting Portfolio of Electric Programs
Initiative Lifecycle Phase
Product
GroupDevelopment
Building • High-Performance
Envelope Windows(dual fuel)
Consumer
Products • Retail Products Portfolio
• Next Generation
Residential Heat Pumps • High-Performance HVAC
HVAC • Ductless Heat
• Rooftop Units with Heat •Advanced Heat Pumps Pumps
Pumps
• Manufactured
Lighting • Luminaire Level Lighting Homes
Controls
• Expansion to New
Pump and Fan
Motor-Driven Applications • Efficient Fans • Extended Motor
Systems Products(pumps)
• Efficient Motor-Drive
Systems
• Commercial/
Multifamily Central Heat
Water Pump Water Heater • Heat Pump Water
Heating . Residential Heat Pump Heaters
Water Heaters for All
Applications
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Electric Portfolio 26

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Portfolio Management Approach
NEEA uses a robust portfolio management Risk mitigation— NEEA pays attention to the total
approach to optimize the overall health and overall risk profile of the portfolio to ensure low or
balance of its portfolio and evaluate new calculated exposure of regional funding. Risk is
opportunities for Market Transformation assessed based on a number of criteria, including
development. Portfolio health is assessed by the measurability of energy savings, anticipated
tracking indicators of success and identifiable ramp-up speed in the market (i.e., how long the
risks that need to be monitored and/or managed. market will take to transform), how much is known
Portfolio balance, on the other hand, is about the market and technology, and related
determined by tracking the distribution of Market costs and benefits of the transformation.
Transformation potential across a set of dimensions Peak Valuation— New in Cycle 7, NEEA will
(e.g., time horizon, maturity and confidence consider contribution to winter and summer peak
level, geography and market type). This portfolio as an additional balancing criterion to inform
management approach provides visibility for investment decisions and manage to the full
decision-makers to ensure resources are focused spectrum of value potential for the region (for
on the right places to deliver the most optimized more information, see the Regional Value Delivery
outcomes.
section).
In Cycle 7, NEEA will use the following set of
criteria to ensure the portfolio is healthy and
provides balanced value delivery across the region: Micro Heat Pumps— The Next
Generation of Ductless
Energy Savings— Both near-and long-term. After years of product development and
Overall Portfolio Composition— NEEA assesses testing, manufacturers are beginning to
sell micro heat pumps designed to heat
portfolio dynamics, such as program maturity and and cool small spaces like individual
market mix, to address areas in which imbalance rooms. These efficient products are
may introduce risk and require action. These similar in size to window air conditioners
factors inform overall portfolio decision-making to but offer both heating and cooling.
ensure a continuous flow of value to the region, Unlike ductless systems, they are
including energy savings for future business designed for homeowners to purchase
and install themselves, resulting in a
cycles. much lower price point. In Cycle 7,
Distribution of energy savings potential— NEEA NEEA will work with manufacturers
and energy efficiency organizations
tracks program savings potential across the region to develop test methods and/or
and works to ensure that the portfolio delivers specifications for micro heat pumps that
proportionate value in all four Northwest states. It ENERGY STAR and DOE could consider
is NEEA's responsibility to maintain a portfolio that for future updates. Staff will also explore
balances benefits fairly across the region. the possibility of adding this product
category into the upstream Retail
Products Portfolio program to increase
availability to consumers around the
region.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Electric Portfolio 27

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
>>> Cycle 7 Key Activities by Workstream
Emerging Technology
• Increasing market adoption of heat pumps,
NEEA routinely scans for, assesses, and reports on including at the individual-room level,
the potential for newly identified efficient products, through approaches specifically tailored to
services and practices. Once these opportunities the building stock in the Northwest.
are identified, NEEA works with manufacturers to • Delivering capacity, carbon and grid
encourage products that meet regional needs and flexibility benefits in combination with HVACefficiency.
truly save energy by conducting lab and field-
testing and providing data to the Department of ' Optimizing motor-driven systems to
maximize system-level efficiency.
Energy to support test procedures and voluntary
specifications. As a regional organization, NEEA For the first time in Cycle 7, NEEA will consider
focuses on opportunities that have broad benefits co-benefit metrics4(e.g., affordability, accessibility,
across the four Northwest states, including places peak reduction, grid flex and resilience) in its
that have unique barriers and opportunities for scanning process, providing increased visibility into
efficiency, such as rural markets and colder the full range of value in the pipeline.
climates. Emerging technology activities include:
Product Management
New Opportunity Scanning Once technologies are identified and prioritized,
NEEA scans the market for emerging energy the alliance works to translate those opportunities
efficiency opportunities, leveraging existing into a product or measure that can be promoted
relationships with manufacturers, technology through Market Transformation and/or utility
developers, utilities outside the Northwest, U.S. programs. Product management involves:
DOE labs, and other research and development . Defining the product.
entities. The alliance also welcomes unsolicited • Considering the product's value based on
proposals through its website neea.org. Over opportunities and market barriers.
the last 25 years, NEEA's emerging technology
• Developing and evaluating test methods.
scanning process has identified significant energy-
saving opportunities for the region, including heat • Collaborating on performance specifications.
pump water heaters, efficient televisions, and • Testing commercially available products.
ductless heat pumps. • Planning for product evolution.
NEEA's scanning efforts typically include several • Collaborating with manufacturers.
dozen emerging opportunities across multiple Gaps in product performance are shared with
Product Groups. Examples in Cycle 7 may include: manufacturers to encourage products that more
• Improving building efficiency through readily meet Northwest needs. The outcome of
additional window and envelope measures this process can either be a new concept readied
beyond fenestration. for NEEA's portfolio, or new product categories or
target markets within existing programs.
• Delivering the next level of energy efficiency
to Northwest consumers through new or
emerging consumer products.
4The Regional Emerging Technology Advisory Committee is currently developing a
list of grid benefit metrics that will be tracked for each product in NEEA's pipeline. NEEA 2025-2029 Business Plan—Electric Portfolio 28
Exhibit A- Cycle 7 Core Funding Agreement

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Regional Coordination Cycle 7 Focus Areas
At the regional level, NEEA tracks ongoing Maintaining and deepening relationships
emerging technology activities and identifies with standard-setting organizations to
gaps in coordination with the Regional Emerging develop and validate test protocols so they
Technology Advisory Committee (RETAC). In accurately reflect real-world conditions and
Cycle 7, NEEA will continue to coordinate regional energy savings.
emerging technology research with RETAC on Leveraging and expanding relationships with
manufacturers to ensure products meet the
a quarterly basis and convene Product Council unique needs of all Northwest consumers.
meetings to disseminate research findings and
• Assessing opportunities for system-level
technology innovations. efficiency to unlock energy savings from the
Key Assumptions optimized interaction of discrete products
(e.g., networked lighting and building
• Technology innovations offer continuing controls leveraged for HVAC, plug loads and
and significant energy-saving potential; this other process loads).
potential will be amplified in Cycle 7 by Scanning for opportunities to deliver
anticipated federal and private investment in capacity, carbon, and grid flexibility benefits
clean energy technologies. in combination with efficiency.
• Future energy-saving opportunities will
derive from increasingly complex systems,
rather than discrete product options, which Passing the Test for Heat Pump
will challenge conventional lab-and field- Efficiency
testing approaches.
• Increasing interest in Market Transformation Heat pumps now dominate the market
from outside the Northwest presents new for electrically conditioned homes, far
opportunities to increase NEEA's market outpacing electric resistance and electric
leverage, while also introducing potential forced air furnace sales in both new
challenges to maintaining the market's focus construction and retrofits. With increases
on Northwest priorities. in federal and utility incentives, code
and legislative activity, and heightened
consumer interest, these trends are
expected to continue. As heat pump
adoption accelerates, NEEA will focus
on shifting the market toward more
efficient products through accurate
testing, rating and labeling of systems.
After federal rules established a new
energy conservation standard for heat
pumps in 2017, NEEA helped to lead
the development of a new load-based
test procedure (CSA SPE07:23) to
better predict real-world performance.
In Cycle 7, NEEA will leverage the new
test procedure to identify opportunities
for product efficiency improvements and
ensure clear and accurate differentiation
of higher-efficiency products.
Pictured:Outdoor heat pump unit installation.
Exhibit A- Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Electric Portfolio 29

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Market Strategy and Execution Key Assumptions
• Efficiency opportunities are becoming
Once a new energy efficiency opportunity is increasingly integrated and complex, which
identified and proven to deliver reliable energy requires more holistic market interventions and
savings, NEEA develops and implements Market measurement approaches.
Transformation initiatives at a scale designed to
• Increasing state and federal policy drivers
accelerate adoption of these new opportunities. (e.g., federal infrastructure spending) offer
For each initiative, NEEA identifies market barriers important leverage opportunities for Market
to adoption and then strategically intervenes to Transformation and will require increased
remove those barriers and influence decision- coordination and alignment.
makers throughout the supply chain. Ultimately, Increasing interest in Market Transformation
this work ensures that 1) Northwest customers from outside the Northwest presents new
have greater access to efficient products at opportunities to increase NEEA's market
increasingly affordable prices, and 2) market leverage, while also introducing potential
actors have opportunities for skills training and job challenges to maintaining the market's focus
creation. Market Strategy and Execution activities on Northwest priorities.
include market strategy development, program
management, market channel development and Cycle 7 Focus Area
marketing. Maximize near-term market progress and savings
potential by:
Knocking Down Barriers to Efficiency Carrying forward current Market Transformation
initiatives, while increasing investment in
Marketing is a key tool in removing several Product Groups to take advantage of
barriers and capitalizing on opportunities substantial energy efficiency opportunities and
to accelerate the adoption of energy- potential peak-reduction benefits.
efficient products and practices.
• Amplifying alliance investments by
Marketing addresses a variety of barriers, collaborating with regional and national
including supply chain readiness, partners to build scale, increase alignment and
product availability and consumer generate market momentum (e.g., leveraging
awareness. For example, "Boring but the growing momentum around heat pumps
Efficient" was a regionwide alliance and indoor air quality to advance HVAC
marketing campaign designed to engage efficiency).
both rural and urban consumers and Strategically expanding engagement in
increase their awareness of heat pump faster-moving, higher-volume markets to
water heaters. Through digital adds accelerate market change leading to near-
targeting consumers across Idaho, term savings opportunities (e.g., engaging
Montana, Oregon and Washington, the influential manufacturers, distributors and
campaign increased rural awareness trade associations to demonstrate product
performance of smart pumps and address
of HPWHs in the targeted areas by market barriers to adoption).
approximately 20%.
• Supporting regional programs through
continued investment in critical market
infrastructure programs like BetterBricks and
the Integrated Design Lab network.
Exhibit A-Cycle 7 Core Funding Agreement NEEA Cycle 7 Strategic&Business Plans 30

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Develop new programs to continue a robust portfolio Implementing strategies that have a
and a secure energy efficiency pipeline of future local impact, recognizing that Market
savings by: Transformation will progress at different rates
• Introducing up to two new electric Market around the region, depending on economic,
Transformation programs and assessing new geographic, and demographic conditions, as
opportunities with portfolio balancing criteria, well as the availability of local programs. For
including energy savings, peak valuation, example, NEEA may remain engaged in a
portfolio composition and regional distribution market that has been slower to transform in
of value. one state, while exiting the same market in
other parts of the region. Or NEEA may target
• Evaluating new opportunities on an ongoing geographically specific market barriers in a
basis through NEEA's portfolio management, state or location that aren't experienced across
advisory committee and annual operations the region. These activities are balanced
planning processes. annually through NEEA's annual operations
planning process.
Prioritize peak demand savings as a secondary
priority to energy efficiency within the Identifying and engaging in incremental market
portfolio by: interventions to address shared regional priorities
• Advancing energy-efficient technologies that to ensure NEEA's Market Transformation
have a secondary ability to modify the demand benefits are equitably distributed to Northwest
the devices place on the system. If properly consumers by:
configured and connected, these technologies Undertaking research and outreach to
can provide both energy and capacity in understand which consumer segments
support of the changing needs of the system. are/are not benefiting from NEEA's Market
Transformation interventions and why.
• Providing additive value to existing energy- Within its portfolio of Market Transformation
efficiency-focused Market Transformation programs, NEEA will use this research to
efforts by working with market actors to identify ways to achieve Market Transformation
make necessary changes to enable those benefits across more consumer segments and
efficient products to serve as flexible demand apply incremental, low-cost interventions that
resources. address shared regional priorities.
Support sub-regional needs to ensure value is
delivered fairly across the region by: Accelerating Market Change and
Near-term Savings Potential
• Addressing the needs of stakeholders in
all four states and in both rural and urban Motors use about half of the electricity in
settings through a mix of regionwide and the U.S. and account for 30% of the total
limited geographic activities. electric load in the region. Adding smart
controls to variable-speed motor-driven
• Continuing to identify and support sub- systems (e.g., pumps, fans and compressors)
regional needs that align with NEEA's regional represents a significant energy-savings
Market Transformation objectives. For opportunity for the region. To capture these
example, focusing on remaining barriers to savings, NEEA will expand applications
heat pump water heater market acceptance of motor systems within its pump and fan
and challenging market segments, including programs in Cycle 7, and potentially add
those in cold climates. a new program for variable-speed drives to
increase energy iency for existing single-
speed pumps, motors and fans.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Electric Portfolio 31

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Codes and Standards
Energy codes and equipment standards provide process. These standards cover products that
a unique and cost-effective opportunity to lock consume nearly 90 percent of residential energy,
in energy savings. NEEA works with state-level 60 percent of commercial energy and 30 percent
and national stakeholders, bringing together data, of industrial energy. Members of NEEA staff serve
research and product performance information as technical experts in the U.S. DOE's rulemaking
gathered through NEEA's other workstreams, process, including by:
including the development of voluntary
specifications, and then leveraging that work to • Developing and validating updated test
advance codes and standards based on proven methods that better align with real-world
technologies that benefit the Northwest. Because conditions in the Northwest.
they establish universal expectations that must . Collecting performance and adoption data for
be adopted by the market, codes and standards products sold in the region.
favoring efficiency are one the most effective ways to
ensure widespread adoption of efficiency measures • Sharing data, analysis and suggestions as part
and provide benefits to all Northwest consumers. of the public process for updating standards.
Codes • Helping the market prepare for updated
Customized to meet the unique needs and standards.
processes followed by each state, NEEA's holistic This work is done in close coordination with
support of regional and national code stakeholders NEEA's Market Transformation programs and other
includes: efficiency organizations around the country.
• Developing energy code proposals within
states and for the International Code Council. New Construction
NEEA will continue to monitor and engage the new
• Analyzing proposals for state benefits. construction industry to ready the market and to
validate viable technologies for code proposals.
• Supporting code implementation through
training, education and technical assistance in Coordination
each state.
NEEA will continue to coordinate with efficiency
• Measuring compliance and market challenges. organizations within and outside the region to
ensure alignment on priority products and code
• Working to remove barriers to implementation. improvement proposals.
Standards Key Assumptions
Appliance and equipment standards specify
Codes and standards will continue to be one
the minimum energy efficiency levels of specific
the most effective ways to ensure widespread
products, including major home appliances (e.g., adoption of efficiency measures and provide
clothes washers and water heaters), commercial significant benefits to consumers.
and industrial equipment, and HVAC equipment
(e.g., gas furnaces). Equipment standards are
set by the U.S. DOE through a public rulemaking
Exhibit A-Cycle 7 Core Funding Agreement NEEA 202-EEA-Eodsir7e&rgtegie-&Mzcl®egRoFdhrlio 32

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
• Diverging federal and state decarbonization
policies are creating different environments Influencing Energy Codes
for efficiency in codes and new construction
throughout the region. NEEA will continue to Advancing building energy codes is
prepare the market for increases in codes and one of the most impactful ways to
standards.
permanently lock-in energy savings.
However, the process can be time-
Cycle 7 Focus Areas consuming and requires a great deal of
• Leveraging data collected through Market subject matter expertise, which NEEA
Transformation programs and market research provides. For example, NEEA submitted
to encourage the development of effective 25 residential and 51 commercial code
codes and standards. change proposals as part of the public
• Influencing the development and support of process for the 2021 Washington State
successful implementation of building energy Energy Code (which took effect in
codes in each of the four Northwest states. 2023). Staff also participated in both
the commercial and residential technical
• Informing development of voluntary advisory group that reviewed and voted
specifications, and then leveraging those on all proposals. An independent
specifications to influence development of analysis of the completed code indicated
federal standards.
that the residential 2021 WSEC will be
• Coordinating with standard-setting 30% more efficient than 2018 WSEC,
organizations, utilities and manufacturers and the commercial 2021 WSEC will
to move toward common specifications for increase efficiency by 24%.
demand-response communications protocols
or command structures for technologies within
NEEA's energy efficiency portfolio.
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Exhibit A- Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Electric Portfolio 33

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Analytics, Research and Evaluation
On behalf of the region, NEEA identifies, collects, Focus Areas by Function
analyzes and disseminates data, information Market Research and Evaluation
and insight to assist decision-making and
To measure market progress and influence over
advance and report the progress value created
more than 25 years, NEEA has developed and
by Market Transformation. All of NEEA's Market
continually refined an approach to evaluating
Transformation programs are regularly evaluated
Market Transformation that is grounded in best
by independent third parties to understand market
practices. NEEA conducts its evaluation and
influence and progress and inform approaches
market research activities in a transparent manner,
to adaptive management. NEEA's data and
with all evaluations available to the public on
analytics expertise drives Market Transformation
neea.org. Methodologies are reviewed with
success and provides the region with insights
the Cost Effectiveness and Evaluation Advisory
and information unavailable from other sources to
Committee. Key Cycle 7 activities include:
inform NEEA's and the region's energy efficiency
efforts. Additionally, NEEA collects market data at . Regular, independent, third-party evaluations
a regional stock level to inform market strategies, of market progress of programs and influence,
assess progress and provide validation of data as well as identification of areas for adaptive
used for reporting energy efficiency value metrics. management.
• Market characterization efforts to inform
Key Assumptions program opportunity and/or strategy.
• As the number and complexity of programs
increases in Cycle 7, the need for ARE will • Independent baseline estimates of market
grow commensurately. conditions and insight to inform baseline
forecasts of the adoption of energy-efficient
• Regional studies will become more expensive products, services and practices.
to implement as recruiting and the in-situ . Regular review of pivotal assumptions used
collection of data becomes more difficult and in cost-benefit analyses and energy-savings
complex.
reporting.
• As building systems become more complex Regional research to support shared goals
and integrated systems become harder to include:
measure, more frequent and targeted data-
gathering efforts will need to supplement Mid-cycle review of learnings gleaned
large-scale regional studies and sales data. from research and data-gathering to
understand how Market Transformation can
• The depth and number of codes requiring better deliver equitable energy efficiency
evaluation will increase in complexity. opportunities across the region.
• Small-scale inventory of ongoing efforts
across the region to identify and support
communities that have a high energy
burden, or who may not have traditionally
benefited from efficiency programs.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025NEEAEO¢Jaime&rgtagic--&E�d P--oRY€ sD 34

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Data Planning& Market Analysis documentation of all data sources, analysis
NEEA's Data, Planning and Market Analysis team methods and key assumptions for each
measure in the portfolio to support market
is responsible for the full lifecycle of data-driven tracking and reporting.
decision-making and management at NEEA. This
work includes: Collaborating with the Northwest Power and
Conservation Council and Regional Technical
• Creating data strategies. Forum with data and insights to inform
measure development, market-level efficiency
• Acquiring and managing datasets. mix assessments and reporting against the
Power Plan.
• Deriving analysis and insights that guide
Market Transformation. • Continuing to build understanding to develop
methods to inform peak valuation at a local
• Forecasting and tracking of key performance level across the region.
metrics, such as energy savings, capacity
reductions and cost effectiveness values. NEEA recognizes that the data accessible through
strong market relationships is critical to the
Specific key activities and deliverables of the team success of many facets of NEEA. This data is
include:
often sensitive or confidential, so NEEA follows
• Translating program strategies into quantitative strict data security requirements to ensure all
market models that enable forecasting and data provided by funders and market partners is
tracking of energy savings and the adoption of securely housed and managed.
energy-efficient technologies, practices and/or
behaviors.
• Developing naturally occurring baseline
market adoption forecasts of energy efficiency �
practices and technologies to assess and
report the incremental impacts of Market
Transformation.
• Analyzing technology reports and market
studies to develop unit-energy-savings values
that represent market applications and factors
(such as climate zone) across the region.
• Analyzing market data to inform program <
strategies by understanding trends in various -
market segments.
• Leading market data collection activities, _ • _ __ !
including the collection of utility program data, = .
'� a —,,. •�
to enable market tracking and calculation of
energy-savings results.
• Reporting energy savings results to NEEA �.
funders to support their individual regulatory
reporting needs. This includes detailed Pictured. Triple-pane window installation
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Electric Portfolio 35

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Regional Stock Assessments Motor-driven Systems Stock Assessment
NEEA's stock assessments, conducted roughly (MDSSA)
This study will collect motor characteristic
every five years, support the region's diverse data on stand-alone motor-driven equipment
building characteristic and energy consumption in a representative sample of commercial and
data needs. Building characteristic information is industrial facilities. This data has not been
collected on site by trained engineers to ensure collected in the region since 2000.
accuracy. The data gathered is used to uncover,
measure, track and plan for new opportunities in Key Assumptions
NEEA's Market Transformation portfolio and utility
Existing residential electric end-use data is three
energy efficiency programs. It is also a key source
decades old and increasingly inaccurate, while
of information for the Power Council's five-year
very little commercial electricity end-use data
Power Plan and the Regional Technical Forum's
exists at all. Once collected, EULR data can play a
energy efficiency measures. In addition, the data is
unique role in:
used by electric and natural gas utilities to inform
their conservation potential assessments and • Helping to design and deliver improved energy
integrated resource plans. efficiency programs to electricity customers.
NEEA is planning the following stock assessment . Designing programs to reduce electricity use
studies for Cycle 7: at times of peak demand.
• Residential Building Stock Assessment(RBSA) • Improving electricity demand forecasting.
This study will collect building-characteristic
and energy-consumption data for a • Increasing the accuracy of electric utility price-
representative sample of single-family setting and financial planning.
buildings and multifamily tenant units in
the region. It will be designed to provide . Tailoring utility investments in electric
analytical results by state and climate zone generation, transmission and distribution
and may include an optional oversampling assets.
of key demographic groups to support
the region's efforts to understand which
consumer segments are, or are not, directly Key Cycle 7 Activities
benefiting from NEEA's Market Transformation • Maintaining customized metering equipment,
interventions and why. communications equipment and sensors to
meter key end-uses by circuit in 400 homes
• Commercial Building Stock Assessment(CBSA) and 70 commercial buildings across the
This study will collect building characteristic Northwest.
and energy consumption data for a
representative sample of commercial buildings • Performing quality assurance and quality
in the region. Mid-and high-rise multifamily control of the data transmitted by cellular
buildings will be included in this study to connections.
complement the tenant-unit data collected
in the RBSA with multifamily building-level • Delivering secure one-minute end-use data to
data. The budget for this work includes the funders through the cloud and 15-minute data
completion of the CBSA scheduled to begin to the public through the NEEA website.
in 2023 and finish in 2026, in addition to a
second CBSA scheduled to begin in 2028 and • Analyzing the data for insights on energy
finish in Cycle 8. efficiency program design, demand response,
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Electric Portfolio 36

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
load forecasting, integrated resource planning, Convene and Collaborate
as well as additional utility operational
concerns, including generation, transmission, NEEA regularly creates and communicates
distribution and energy storage.
opportunities for regional energy efficiency
stakeholders to share information and best practices
Specially Funded Project:End-Use and align on regional priorities. These activities
Load Research enable the region to move the market faster and
The Northwest End-Use Load Research more efficiently than any one organization could do
(EULR)project is a regional research alone.
project designed to measure accurate load
profiles for electric end-use equipment Key Assumptions
in homes and businesses. Specially
funded by a subset of NEEA funders and Regional collaboration not only brings value
interested stakeholders, the project is to funders and stakeholders, but it is also
continuously collecting energy use data required to drive Market Transformation
in 1-and 15-minute intervals. Detailed success. NEEA will continue to facilitate this
energy information of this scope and collaboration through formal and informal
accuracy has not been collected since the channels including workgroups, advisory
End-Use Load and Consumer Assessment committees and board committees.
Program (ELCAP), which was completed
in 1990. • Diverging funder needs, combined with the
pace of change for the regional energy system,
Recognizing the need for up-to-date is increasing the need for NEEA to stay closer
energy use data, the alliance brought and more connected with its funders and
together a working group of utilities and stakeholders.
energy efficiency organizations in 2016
to launch the EULR project, which is • There is a growing need for regional
managed by NEEA's Analytics, Research collaboration between natural gas and
and Evaluation team. Although Covid electric utilities to address shared goals
presented challenges to the project and and challenges. As a dual-fuel organization
significantly delayed metering installations, representing the entire region, NEEA is
all metering installations for 400 homes uniquely positioned to facilitate this need.
and 70 commercial buildings will be
completed by May 2023. Monitoring is • Market partners and supply chain actors must
scheduled to continue for two more years, understand the alliance and the value it brings
wrapping up by mid-way through the them for successful execution of market
business cycle. transformation programs.
• Interest in Market Transformation outside the
Northwest and increased federal funding for
energy efficiency will result in a greater need
for NEEA to coordinate with national and state-
level energy efficiency stakeholders.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 20254aDVak¢�ffiZss^tPdWic-Elgatime§btffoha 37

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Cycle 7 Focus Areas including NEEA's five-year Strategic and
Business Plans, as well as its annual
Facilitation of Board of Director, Committee, and operations planning process.
workgroup meetings that:
• Foster regional input and conversations Track and communicate developments in
that drive the alliance's work in ways that regional and national energy policy.
complement funder and NEEA programs.
• Support collaboration between market actors, Regional events, including:
researchers, funders and industry leaders to The annual Efficiency Exchange conference
understand technology and market trends, that provides a forum for knowledge-sharing
opportunities and barriers, as well as to and networking to help regional energy
advance energy efficiency opportunities. efficiency professionals achieve their goals. In
Cycle 7, NEEA will continue to host this annual
event in partnership with Bonneville Power
Funder account management that: Administration and the Northwest Power and
• Understands and convenes discussion on Conservation Council.
funder and regional perspectives on alliance
initiatives. • The Leadership in Energy Efficiency Awards
that recognize excellence in energy efficiency
• Ensures funder perspectives are represented innovation and collaboration.
throughout every stage of the Initiative
Lifecycle Process.
• Empowers funders with the information and
resources needed to collaborate effectively in
alliance work.
Corporate Communications efforts that:
• Increase supply-chain understanding of r
NEEA's value proposition to the market
through NEEA's corporate website, program
communications materials and other strategic
communications.
• Support Market Transformation programs
through recognition and celebration of market
partner successes and participation in alliance
programs.
Corporate Strategy efforts that:
• Chart the strategic direction for NEEA, in
coordination with NEEA's Board of Directors.
• Align the organization around corporate goals.
• Lead enterprise-wide planning initiatives,
Exhibit A- Cycle 7 Core Funding Agreement NEEA Cycle 7 Strategic&Business Plans 38

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
>> Natural Gas Portfolio
n 2015, the alliance began its first regional solutions that support regional resource adequacy
natural gas Market Transformation effort. At the and decarbonization goals. NEEA's natural gas
time, NEEA adopted a strategy that focused activities deliver value to the region by:
on implementing a small portfolio of initiatives,
which was designed to allow the region to • Promoting the adoption of highly efficient
gain experience working on natural gas Market gas technologies (e.g., gas heat pumps)that
Transformation and minimize major organizational support decarbonization efforts.
changes. These efforts have built solid foundation . Advancing dual-fuel technologies (e.g., rooftop
for energy efficiency Market Transformation by HVAC)to increase natural gas efficiency while
demonstrating significant progress in product serving as a peaking resource and providing
development and market characterization and support for resource adequacy challenges on
forging critical relationships within the region and the electric grid.
with extra-regional partners.
• Developing efficiency solutions for end-uses
Natural gas energy efficiency work in the region and market segments that are least likely or
is currently undergoing a time of high uncertainty slower to electrify.
driven by: • Advancing efficient envelope measures that
• Policy and code changes that limit the market deliver energy savings across all fuel choices.
for natural gas products. • Convening regional stakeholders who work
• Delayed commercialization timelines for highly with both gas and electric products (i.e.,
utilities and market actors)to collaborate and
efficient residential gas heat pump products. address shared goals.
• An emerging interest in dual-fuel heat pump 0 Leveraging co-investments from outside the
technologies that provide both opportunity
region.
and measurement challenges for the region's
utilities.
To hedge against this uncertainty and reduce risk Portfolio Overview
for natural gas funders, NEEA's Cycle 7 Business
Plan presents a natural gas portfolio that is both NEEA began Cycle 6 (2020-2024)with a
nascent natural gas portfolio primarily focused
diverse and flexible. It is designed to maximize the
on emerging technology work and early program
likelihood of success by advancing multiple product
development (energy savings were primarily
areas at once and allow NEEA to pursue the most
derived from advances in energy codes). As a
promising areas that unfold during the cycle.
result of NEEA's efforts to identify commercialized
technologies and advance new programs into the
Alliance Natural Gas Value Proposition pipeline, the alliance enters Cycle 7 with a greater
understanding of both where the opportunities for
Natural gas Market Transformation initiatives natural gas efficiency lie, and the best strategies to
contribute to affordable and reliable energy engage and invest in the market.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Natural Gas Portfolio 39

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
In Cycle 7, NEENs gas portfolio will be managed including residential and commercial heat pumps.
with two related goals: 1) maximize near-to-medium This work will be highly leveraged with investment
term energy savings, and 2) maintain the flexibility from partners from outside the region to reduce
to strategically advance products with the highest costs and mitigate risk to alliance funders.
likelihood for achieving significant savings. NEEA's
Market Transformation efforts will be concentrated Dual-fuel and Fuel-neutral Products
in three focus areas: gas heat pumps, dual-fuel and In Cycle 7, NEEA will advance technologies that
fuel-neutral products, and gas equipment. contribute to both electric and natural gas energy
savings or use both gas and electric fuels, for
Gas Heat Pumps example high-performance windows or dual-fuel
Gas heat pumps offer enormous regional energy HVAC. These products and systems have significant
savings potential for both space and water heating non-energy benefits that potentially include
equipment, with the potential to improve efficiency decarbonization and winter-peak reduction.
by up to 50% over existing equipment. In Cycle
7, NEENs gas heat pump work will build on
investments made during the previous two business
cycles (e.g., in water heating and combi systems)
and expand into new technology categories,
Table 2: Cycle 7 Starting Portfolio of Natural Gas Programs
Initiative Lifecycle Phase
VP qm� M Long-term
Product Concept Programk'I pr Market Monitoring&
Group 1 Development �� Development
1
Building •High-Performance
Envelope Windows(dual fuel)
•Efficient Commercial
Consumer Gas Dryers
Products
• Hearths
•Residential Gas Heat •Commercial Gas Heat
Pumps Pumps* •
HVAC Efficient Rooftop
•Rooftop Units with Heat • Dual-fuel HVAC* Units
Pumps(dual-fuel)
Water • Residential Gas Heat •Commercial Gas Heat
Heating Pump Water Heaters Pumps*
*Pending advancement decisions expected in Cycle 6.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Natural Gas Portfolio 40

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Gas Equipment efficiency opportunities, leveraging existing
relationships with manufacturers, technology
This category of work includes the current Efficient developers, U.S. DOE labs and other research
Rooftop Unit program, as well as potential new and development entities. In Cycle 7, NEEA's
programs advancing efficient gas technologies scanning efforts will focus on technologies that are
that do not include gas heat pumps or use both commercially available or will be available within
electric and gas as fuels (e.g., commercial dryers the business cycle and can contribute toward
or hearths). NEEA's efforts will be directed toward near-term energy savings. These efforts will be
products that have the highest market potential; supported by NEEA's continued participation in the
impacts of electrification policies and market drivers GTI Energy's Emerging Technology Program.
will be taken into consideration.
Product Management
Once technologies are identified and prioritized,
the alliance works to translate them into a product
or measure that can be promoted through alliance
>� Cycle 7 Key Activities and/or utility programs and activities, tracked
bWorkstream in the market, evaluated for energy savings and
y leveraged to meet the region's goals.
Gaps in product performance are shared with
Emerging Technology manufacturers to encourage product updates
resulting in products that more readily meet
NEEA routinely scans the market for emerging Northwest needs. Ongoing product management
energy-efficient products and practices. Once efforts include:
these opportunities are identified, NEEA works
' Defining the product.
with manufacturers to support the development
of products that meet Northwest needs and . Considering the product's value based on
save energy. This often involves conducting lab- opportunities and market barriers.
and field-testing and providing data to the U.S.
DOE to support test procedures and voluntary • Developing and evaluating test methods.
specifications. As a regional organization, NEEA
focuses on opportunities that have broad benefits • Collaborating on performance specifications.
across the four Northwest states, including areas Testing commercially available products.
that have unique barriers and opportunities for
efficiency, such as rural markets and colder 0 Planning for product evolution.
climates. By working together and aggregating
investment, NEEA's funders and stakeholders • Collaborating with manufacturers.
share both the cost and the risks associated with
this technology development. The outcome of this process can either be new
concepts readied for NEEA's portfolio, or the
Key activities in Cycle 7 include: definition of new product categories or target
New Opportunity Scanning markets within existing programs.
NEEA scans the market for emerging energy
Exhibit A-Cycle 7 Core Funding Agreement NEEA Cycle 7 Strategic&Business Plans 41

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Regional Coordination Market Strategy and Execution
NEEA tracks regional emerging technology
activities and gaps in coordination with the Once a new energy efficiency opportunity is
Regional Emerging Technology Advisory Committee identified and proven to deliver reliable energy
(RETAC). In Cycle 7, NEEA will continue to savings, NEEA develops and implements Market
coordinate regional emerging technology research Transformation initiatives at a scale designed to
with RETAC on a quarterly basis and convene accelerate adoption. For each initiative, NEEA
Product Council meetings to disseminate research identifies market barriers to adoption and then
findings and technology innovations. strategically intervenes to remove those barriers
Key Assumptions and influence decision-makers throughout the
supply chain. Ultimately, this work ensures that
• Emerging technology scanning will primarily 1) Northwest customers have greater access
focus on available or soon-to-be available to efficient products at increasingly affordable
technologies that would come to market within prices, and 2) market actors have opportunities
Cycle 7, rather than opportunities with a longer for skills training and job creation. Market Strategy
time horizon for commercialization. and Execution activities include market strategy
• Significant co-funding from extra-regional development, program management, market
partners will continue be leveraged in Cycle 7 channel development and marketing.
to accelerate natural gas efficiency. In Cycle 7, NEEA will adaptively manage the
Cycle 7 Focus Areas natural gas portfolio, balancing incremental
progress in all three focus areas (i.e., gas heat
• Scanning the market for additional window pumps, dual-fuel and fuel-neutral technologies,
and envelope measures beyond fenestration. and gas equipment) with accelerated Market
• Coordinating with GTI Energy's Emerging Transformation concentrated in just one or two
Technology Program to identify technologies areas. Priority for these opportunities will be
with potential for the Northwest market (both determined by market conditions and technology
utility and Market Transformation programs). development timelines.
• Partnering with technology providers and Key Assumptions
manufacturers on emerging gas heat pump
products for space and water heating (both • State policy will continue to support investment
residential and commercial applications). in natural gas efficiency efforts.
• Scanning for opportunities to deliver • NEEA will partner extra-regionally to accelerate
decarbonization benefits in combination with natural gas Market Transformation where
efficiency. possible. For example, NEEA is partnering with
Market Transformation Administrators outside
• Developing dual-fuel heating products the region to align efforts on dual-fuel-efficient
and program approaches that provide grid rooftop units. These collective efforts will
flexibility, resiliency, and energy savings. accelerate the value delivery to the Northwest
while reducing costs through economies of
scale.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Natural Gas Portfolio 42

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
• Electric and natural gas funders will continue Dual-fuel and Fuel-Neutral Products
to share the cost of fuel-neutral initiatives and Utilities and other stakeholders in the region have
regional research.
highlighted the strategic importance of fuel-neutral
• Portfolio trade-offs will be required to pursue and dual-fuel solutions that deliver efficiency to
multiple opportunities should they arise both the gas and electric systems, and potentially
simultaneously during the business cycle. support load balancing. These solutions support
key energy system challenges by mitigating
Cycle 7 Focus Areas or slowing electric system peak load growth,
improving energy system efficiency, reducing
NEEA's overarching objective for its natural gas greenhouse gas emissions and providing options
portfolio is to remain flexible and adaptable in an for customers.
evolving natural gas market. How NEEA balances
investment decisions between the three focus Gas Equipment
areas (gas heat pumps, dual-fuel and fuel-neutral
products, and gas equipment) will be determined Highly efficient natural gas equipment has the
potential to deliver a consistent stream of energy
by market conditions and made in coordination
savings across a diverse set of applications and
with NEEA's Natural Gas Advisory Committee and
sectors. Gas product efficiency can also help
the Natural Gas Committee of the NEEA Board.
address gas system capacity issues, contribute to
carbon emissions reduction goals and enhance
Gas Heat Pumps system flexibility. This focus area includes NEEA's
Since 2015, NEEA's gas heat pump efforts have current Efficient Rooftop Unit program and
focused on water heaters and combination space- potential new programs, such as commercial
and water-heating systems driven by a gas heat dryers or hearths. NEEA's efforts will be directed
pump. This work supported the creation of the toward products that have the highest market
North American Gas Heat Pump Collaborative, potential; impacts of electrification policies and
which is composed of gas utilities from across market drivers will be taken into consideration.
the country working together to swiftly advance
the market introduction and adoption of gas heat
pump technology. NEEA's participation in the
Collaborative leverages Northwest investment in
heat pumps to move the market further and faster
r—
than the region could do alone. ^--`' Zd
In Cycle 7, NEEA will leverage regional investments
made during previous business cycles to
accelerate the commercialization of gas heat
pumps and scale their adoption. To increase the y
likelihood for near-term energy savings, NEEA will
expand its focus beyond residential water heating
to all gas heat pump types and applications,
including residential and commercial HVAC and
commercial water heating.
Pictured: Gas rooftop unit u•
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Natural Gas Portfolio 43

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Codes and Standards Cycle 7 Focus Areas
Typically, energy codes and equipment standards • Providing information about efficient natural
provide a unique and cost-effective opportunity to gas products and systems to code officials
lock in energy savings. NEEA works with state-level during codes development cycles.
and national stakeholders, bringing together data, . Training and educating market actors
research and product performance information on efficient options to meet new code
gathered through NEEA's other workstreams to requirements.
advance codes and standards based on proven
technologies that benefit the Northwest. Because • Informing further code development by
they establish universal expectations that must collecting information about the ways builders
be adopted by the market, codes and standards are responding to new codes.
favoring efficiency are one the most effective
ways to ensure widespread adoption of efficiency Analytics, Research and Evaluation
measures and provide benefits to all Northwest
consumers. On behalf of the region, NEEA identifies, collects,
analyzes and disseminates data, information
Although natural gas efficiency has benefited and insight to assist decision-making and
from increased code stringency over the years, advance and report the progress value created
decarbonization policies are driving changes that by Market Transformation. All of NEEA's Market
limit the efficiency opportunity for natural gas in Transformation programs are regularly evaluated
codes and new construction. NEEA's work in the by independent third parties to understand market
next business cycle focuses on the remaining influence and progress and inform approaches
gas efficiency opportunities in code, along with to adaptive management. NEEA's data and
providing market support to help the building analytics expertise drives Market Transformation
industry implement code effectively. success and provides the region with insights
and information unavailable from other sources to
Key Assumptions inform NEEA's and the region's energy efficiency
• Diverging federal and state decarbonization efforts. Additionally, NEEA collects market data at
policies are creating different environments for a regional stock level to inform market strategies,
efficiency in codes and new construction in assess progress and provide validation of data
the region. used for reporting energy efficiency value metrics.
• External policy drivers may limit opportunities
for gas efficiency in new construction. Key Assumptions
• Measuring code compliance will continue • Stock assessments will be funded by the
to be important in preparing the market, electric and gas portfolios proportional to their
especially as states and municipalities adopt contribution to overall NEEA funding.
new decarbonization policies.
• Significant co-funding from market partners
• New construction engagement work will be will be leveraged in Cycle 7, similar to Cycle 6.
funded by both gas and electric funders.
• Market research and evaluation resources will
be needed to support a more mature natural
gas portfolio in Cycle 7.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Natural Gas Portfolio 44

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Cycle 7 Focus Areas required to drive Market Transformation
success. NEEA will continue to facilitate this
NEEA's Natural Gas portfolio is co-funding the collaboration through formal and informal
following stock assessment studies for Cycle 7: channels including workgroups, advisory
Residential Building Stock Assessment(RBSA) committees, and Board committees.
This study will collect building-characteristic and Diverging funder needs combined with the
energy-consumption data for a representative pace of change for the regional energy system
sample of single-family buildings and multifamily is increasing the need for NEEA to stay closer
tenant units in the region. It will be designed to and more connected with its funders and
provide analytical results by state and climate stakeholders.
zone and may include an optional oversampling
of key demographic groups to support the region's • Market partners and supply chain actors
efforts to understand which consumer segments must understand the alliance and the value it
are, or are not, directly benefiting from NEEA's brings them for successful execution of market
Market Transformation interventions and why. transformation programs.
Commercial Building Stock Assessment (CBSA) . There is a growing need for regional
This study will collect building characteristic and collaboration between natural gas and
energy consumption data for a representative electric utilities to address shared goals
sample of commercial buildings in the region. Mid- and challenges. As a dual-fuel organization
and high-rise multifamily buildings will be included representing the entire region, NEEA is
in this study to complement the tenant-unit data uniquely positioned to facilitate this need.
collected in the RBSA with multifamily building-
level data. The budget for this work includes the • Interest in Market Transformation outside the
completion of the CBSA scheduled to begin in 2023 Northwest and increased federal funding for
and finish in 2026, in addition to a second CBSA energy efficiency will result in a greater need
scheduled to begin in 2028 and finish in Cycle 8. for NEEA to coordinate with national and state-
level energy efficiency stakeholders.
Convene and Collaborate
NEEA regularly creates and communicates
opportunities for regional energy efficiency
stakeholders to share information and best Red Lodge, Mont
practices and align on regional priorities. Including
advisory and coordinating committees, the
Leadership in Energy Efficiency Awards, and the
annual Efficiency Exchange conference, these
opportunities enable the region to move the
market faster and more efficiently than any one
organization could do alone.
Key Assumptions - �
• Regional collaboration not only brings value _
to funders and stakeholders, but it is also
/i
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Natural Gas Portfolio 45

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Cycle 7
>� Alliance Value Delivery
Value Metrics
NEEA measures Market Transformation results of 410-475 MW (winter peak) and 350-400 MW
by quantifying the energy saved in the region as (summer peak).
a result of alliance efforts to shift markets toward
Due to the long-term nature of Market
higher and faster adoption of efficient technologies.
Transformation, the value that NEEA delivers in
These energy savings and associated value
Cycle 7 will partially result from NEEA's efforts to
metrics, including greenhouse-gas and peak-load
create the market conditions for greater energy
reduction, are enabled by the alliance's Market
efficiency over the past two or three business
Transformation programs, codes and standards
cycles. Likewise, regional Market Transformation
work, and investment in tools, training, resources,
investments made in Cycle 7 will create the market
data and research to support greater efficiency.
conditions for energy savings continuity in Cycles
In Cycle 7, NEEA will estimate, track and report 8, 9 and 10 (2025-2039). About 50% of NEEA's
five-and ten-year energy savings, along with estimated energy savings in Cycle 7 will derive
associated avoided carbon and peak benefits. The from previously funded investments, with the
value metrics estimated in Table 3 are intentionally remaining 50% deriving from current investments
conservative and allow for the possibility that (see Appendix IV for details).
the business plan isn't fully funded in Cycle 7. If
On an annual basis, NEEA will also track and
full funding is realized, NEEA estimates that the
report organizational metrics that ensure effective
business plan will deliver between 195-225 aMW
and efficient operations, including budget
of energy savings and peak values in the range
management, employee engagement and benefit-
cost ratio of NEEA's Market Transformation
Table 3: Cycle 7 Scorecard
Market Transformation Metrics Electric Estimate Natural Gas Estimate
5-year (2025-2029) Co-Created Energy Savings 190-225 aMW 6-17 MM Therms
10-year (2025-2034) Co-Created Energy Savings 365-470 aMW 10-51 MM Therms
5-year Carbon Reduction (thousand tons) 780-900 70-200
5-year Winter Peak Load Savings' (MW) 390-475 N/A
5-year Summer Peak Load Savings6 (MW) 340-400 N/A
Operational Metrics Electric Target Natural Gas Target
Total Annual Budget ($) Set Annually Set Annually
Administrative Expenses (% of total annual budget) < 18% N/A
Portfolio Benefit-Cost Ratio >- 1 >- 1
Employee Engagement At industry benchmark or above
e Based on winter peak hours, 6.00 p.m. weekdays in December,January and February.
6 Based on summer peak hours, 6:00 p.m. weekdays in July and August.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Alliance Value Delivery 46

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
portfolio. Prior to entering market development, be available to help funders meet their energy
the benefit-cost ratio for each program is assessed efficiency goals.
across its full lifecycle with the objective of
achieving a ratio of equal to or greater than one. Opportunities to participate in emerging technology
The benefit-cost assessment for each program research projects
is evaluated by a third-party to inform the Demonstration pilots provide an opportunity for
advancement decision. utilities to engage with customers, builders and
developers through innovative and cost-saving
In addition to the metrics outlined above, NEEA technology pilots in their local service territory.
will measure program-level success through In addition, research like the Cold Climate Heat
market progress indicators (MPIs) related to Pump Water Heater Demonstration Project can
market-level objectives of transformation and be designed and leveraged to accelerate market
sustainability. MPIs are tracked through program adoption in parts of the region with unique barriers
evaluations, which quantify adoption trends and and opportunities for energy efficiency.
the advancement of technology performance
(e.g., broader applicability and higher savings). Increased availability of energy-efficient products
Evaluations also capture additional qualitative for all Northwest consumers at increasingly
market progress indicators, such as the affordable prices
development of long-standing relationships with NEEA partners with national retailers and groups
manufacturers and other market actors that fuels representing local stores to influence the stocking
innovation and market change now and in the and availability of efficient products throughout
future. Annually, NEEA staff will establish program- the Northwest. Through NEEA's efforts to improve
level goals and targets through the Operations energy codes and equipment standards, efficiency
Planning process, and report against those targets gets locked in and becomes the baseline for
to the Board. products and installation practices across the
region. As energy-efficient products become more
Regional Value Delivery widely available and the efficient solution becomes
the default, price per unit comes down increasing
In addition to energy savings and associated the affordability of efficiency for everyone.
benefits, NEEA's Market Transformation activities
also deliver regional benefits that go far beyond Training, tools and resources to support the
contractor base and increase the market's ability to
energy savings, including: install,test and maintain energy-efficient products,
services and practices
A pipeline of new energy-efficient technologies
For example, NEEA regularly:
NEEA's emerging technology scanning efforts
typically include several dozen emerging • Partners with utilities to provide trade ally
opportunities across multiple Product Groups. trainings that complement local efforts and
The most promising of these opportunities will be support local needs.
developed for Market Transformation programs • Offers technical assistance to builders to
and potential new measures for future utility develop the knowledge and skills to meet
programs. By sharing the costs of emerging evolving energy codes.
technology development across the region, the • Provides targeted messaging and materials for
alliance reduces risk to individual organizations installers in markets that have been slower to
while ensuring that new technologies will always adopt an efficient technology.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Alliance Value Delivery 47

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Market research and independent third-party More energy efficiency jobs
evaluations that can be used to help utilities NEEA provides opportunities for energy-efficiency-
develop their own local efficiency programs related education and training through many of
In any given year, NEEA delivers 20-30 market its programs. These opportunities are offered to
research, evaluation or market characterization a broad range of energy professionals, helping
reports, which are made available to the public on them build skills and differentiate themselves from
neea.org. competitors. NEEA also supports a broad network
Regional building stock assessments and the End- of regional energy efficiency contractors that it
Use Load Research project to inform future utility engages to support program implementation,
planning efforts research and data-collection efforts.
Stock assessments in the commercial, industrial Improved home comfort
and residential sectors provide the building- NEEA's Market Transformation programs improve
characteristic and energy-consumption data home comfort through improved indoor air quality,
necessary for the region to uncover, measure, enhanced space heating and cooling year-round,
track and plan for the next generation of Market
and quiet, energy-saving appliances.
Transformation and utility energy efficiency
programs. NEEA's funders have the opportunity to Improved energy affordability
oversample building stock in their service territory Energy efficiency reduces energy bills and can
to support their own organizational objectives at a help alleviate the energy burden for low-income
fraction of the cost of fielding a separate study. communities and others. Through its Market
Convening and collaboration Transformation programs, the alliance works with
NEEA serves as a convenor for regional utility the supply chain to remove barriers for efficient
and energy efficiency stakeholders, bringing products, including the first-cost barrier for end-
stakeholders together to: use consumers.
• Collaborate on issues of strategic importance Reduced greenhouse gas emissions
(e.g., regional load flexibility efforts and By contributing to regional energy savings and
opportunities for federal efficiency funding). locking in efficiency through its codes and
• Celebrate regional accomplishments (e.g., the standards activities, alliance Market Transformation
Leadership in Energy Efficiency Awards). programs contribute to the reduction of
• Learn from one another and share best greenhouse gas emissions by ensuring the most
practices (e.g., the annual Efficiency Exchange efficient products, technologies and best-practice
conference). applications become the baseline.
• Address shared challenges (e.g., developing a Improved resilience through peak-load savings
savings attribution methodology for dual-fuel When timed right, energy efficiency programs can
technologies). reduce demand on the energy system at times
of peak load. Many programs in NEEA's current
Additional Value Delivery portfolio contribute to peak-load reduction in both
summer and winter. Additionally, where it supports
Furthermore, investing in NEEA can contribute to NEEA's Market Transformation objectives, NEEA
state and local priorities, including: works with manufacturers to incorporate demand
response capabilities into efficient products.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Alliance Value Delivery 48

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Cycle 7
>� Special Funding
n the process of developing the variable generation cannot begin to replace the
Cycle 7 Business Plan, a handful firm capacity of retired regional coal plants on a
of opportunities were identified that one-to-one basis.' Flexible end-use load resources
align with NEEA's strategic goals, while can help with system integration of the renewable
resources and contribute to filling an expanding
also 1) delivering a primary benefit capacity gap by helping to meet system peaks and
other than energy efficiency, and/or 2) allowing for more flexibility in load control.
addressing needs that are not shared
across the region. NEEA's 2025-2029 Strategic Plan identifies
"accelerating adoption of grid-enabled end-use
One of these projects, the regional End-Use Load technologies through Market Transformation" as a
Research Study, is carrying over from the current strategic goal for the alliance in Cycle 7. This goal
business cycle and has already received funding allows for exploration of Market Transformation
commitments (see Electric Portfolio). opportunities supporting the region's ability
to manage electric loads by making the end
Other special funding opportunities include, but use of energy not just more efficient, but also
aren't limited to: connected and controllable. Specifically, NEEA will
• A regional end-use load flexibility effort. prioritize opportunities to leverage existing market
relationships and product development expertise to
• A strategy for whole-building efficiency. 1) accelerate the integration of features that enable
These opportunities would be funded outside of end-use flexibility, and 2) promote standardized
this Business Plan if a subset of regional funders
protocols that enable products to communicate
or other stakeholders wishes to pursue them.
with one another and the grid. While focused
on end-use technologies, these products and
As additional opportunities for special funding arise practices must integrate within the broader electric
during the business cycle, they will be evaluated utility system operations. This will require close
by the Board's Strategic Planning Committee collaboration with electric utilities and a strong
through NEEA's existing Special Opportunity understanding of their operations and systems.
Assessment Guidelines for new strategic
opportunity screening (see Appendix 1). Barriers to Adoption
Although the technical potential for load flexibility
Special Project Opportunity: End-use is high in the Northwest, there are quite a few
Load Flexibility challenges preventing the region from maximizing
the benefits of end-use load flexibility programs or
The 2021 Northwest Power Plan projects as much technologies. These barriers include:
as 3,500 MW of additional coal plant retirements
by 2029. The expected addition of 3,500 MW of Implementation costs and lack of financing
Accelerating technology advancement in
renewable resources by 2027 will help to mitigate sensors, controls and communications is
this loss. However, renewable resources with creating new opportunities for load flexibility
'See: U.S. Capacity Factor by Energy Source 2021 in
https://�e�l :gov/ne/alcly/yvhat-giner�tjon-capacity NEEA 2025-2029 Business Plan—Special Funding 49
(source: t A C ycle 7 ( ore l+un ing Agreement

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
through lowered costs and increasing Role for NEEA
efficiency. However, while the costs for As a Market Transformation organization, NEEA
controls themselves are decreasing overall,
the investment required to implement can play an important role in helping the region
communicating controls is a major barrier, accelerate adoption of new end-use technologies
particularly for smaller commercial buildings. that enable more flexible, efficient operation of
Demand-side investments will have partially the electric system and increased integration of
limited access to financing until they can be renewable energy. Specifically, NEEA can:
aggregated and standardized.
• Serve as a convener and developer of
• Unreliable communication capabilities Northwest use cases, recognizing differing
Demand-response aggregators have noted that characteristics of Northwest and adjoining
reliability challenges with Wi-Fi-based and/ power markets.
or cloud communication protocols have led to
unmet commitments. Other communications • Utilize its experience and structure to ensure
pathways are technically feasible (e.g., FM stakeholders are effectively engaged to
broadcast, cellular or mesh networks) but not focus the project on maximizing value and
widely used for load management. collaborative opportunities.
• Lack of interoperability and open standards • Employ its existing Emerging Technology
Extensive competition among energy scanning processes to identify appropriate
management system providers leads to products, solutions and potential interventions.
proprietary systems that only work with
devices from the same manufacturer, • Leverage its existing strategic partnerships
which limits the development of innovative with manufacturers, codes and standards
applications. Additionally, once a proprietary organizations, trade associations and the
system has sufficient force in the market, the supply chain market to drive development and
manufacturer can charge utilities significantly accelerate the adoption of flexible, demand-
more for access to that resource, or they could enabled features into products.
go out of business and strand the needed • Help advance standardized communication
assets. protocols across product groups to enable two-
• Unclear value proposition for end customers way communication from utility to end use,
and utilities including voluntary specifications and qualified
Due to the lack of a consistent bulk power product lists.
system value, the monetary compensation for . Support the evolution of controls by
participation in traditional demand-response coordinating with manufacturers and utilities
programs is often fairly small to individual to advance open-source solutions.
end consumers, even though the aggregated
value to an individual utility or the region • Conduct field studies and research to study
may be large. This can lead to expensive, the grid benefits of connected technologies
ongoing customer engagement programs to such as water heaters, lighting, HVAC and
keep participation high, especially where end pumps.
customers are concerned about privacy or lack
of control. Even with high-touch engagement • Apply its experience with customer
efforts, participation rates tend to be low for engagement in target market segments to
opt-in demand-response programs (typically enhance the uptake of end-use load flexibility
around 15% of the eligible population). initiatives.
• Use research from its Northwest End-
Use Load Research project to accurately
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Special Funding 50

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
characterize actual (not design) performance retrofit projects. However, the changing landscape
at 1-minute intervals of electric-resistance presents new opportunities for a regional
water heaters, heat pump water heaters, heat Market Transformation effort focused on driving
pumps, air conditioners, electric furnaces and broader and deeper adoption of whole-building
electric vehicles for load flexibility purposes.
efficiency. This effort can build on NEEA's past
• Leverage voluntary specifications to include and ongoing work in building renewal, strategic
flexible load requirements as technologies energy management and commercial real estate
develop and evolve. NEEA's ability to develop
engagement.
qualified products lists with an eye towards
flexibility will be key to the uptake with national
standards groups. Barriers to Adoption
Even with these new levers, understanding and
Special Project Opportunity: addressing the key barriers for the commercial
Whole-Building Efficiency building community will be crucial for success.
Recent market outreach points to challenges in:
The region's commercial building sector is • Identifying the combinations of upgrades to
experiencing seismic shifts, each of which pursue.
creates new drivers for whole-building retrofits
that deliver significant energy-use intensity(EUI) Ensuring the results will meet both code and
improvements. These shifts include: building performance standards.
Policy: Building owners are increasingly under • Understanding how to profitably engage load-
management strategies.
pressure to meet organizational sustainability
goals and aggressive state and local building • Determining pathways for financing in the
performance standards. Building EUI is becoming context of substantially longer payback
more of a focus than efficiency improvements to periods.
individual systems.
While these barriers are felt across the board,
Financial uncertainty: In addition to reconfiguring they are most acute for small-and medium-sized
around post-pandemic changes in how buildings
businesses, nonprofits, and those with limited
are used, commercial building owners and
managers must also grapple with high interest access to capital.
rates. Commercial real estate investors are
likely to hold their investments longer, allowing Role for NEEA
them to reap the financial benefits of efficiency
improvements, which tend to be dependable NEEA sees the potential for a new Market
investments, even in times of uncertainty. Transformation program focused on driving
broader and deeper adoption of whole-building
Technology innovations: Ubiquitous sensors and efficiency through strategies that include:
controls embedded in every building system and
are enabling smarter, more integrated, and more 0 Exploring new technologies and practices to
efficient buildings. improve operation and maintenance efficiency.
Grid-interactivity: Load management opens new 0 Evaluating grid-enabled energy-resource
value streams to enhance building profitability. strategies to maximize value for building
owners and utilities.
For a variety of reasons, building owners have
been historically reticent to undertake deep energy
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Special Funding 51

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
• Streamlining approaches to developing Special Project Tracking:
building upgrade plans. Hydrogen-Ready Appliances
• Creating and disseminating tools and
resources that simplify all aspects of energy In 2022, NEEA conducted a specially funded
upgrades, including audits, portfolio planning, research overview of the current market situation
technology selection, workforce selection and for end-use equipment fueled by natural gas
financing. blended with varying amounts of hydrogen. This
• Expanding knowledge of, and access to, small project found that there is currently a need
financial mechanisms needed to put upgrade for revisions to North American testing and rating
plans into action. standards to ensure that newly manufactured
• Improving consistency and value of energy equipment could be powered by natural gas/
efficiency upgrades in real estate valuation. hydrogen blends without impacting safety or
efficiency. Further work has uncovered that
• Exploring opportunities to develop or use a there are a number of national and international
commercial building energy use intensity (EUI)
dataset to support regional efficiency efforts, initiatives attempting to address this issue as
including supporting energy management well as a nascent labeling effort led by California.
efforts or helping utilities identify buildings that Given this, NEEA does not currently plan to
have consumption levels significantly higher pursue activities in this space. While it appears
than other comparable buildings.$ that some market barriers are already being
With a current portfolio of programs, the addressed by industry, there may be a need for
BetterBricks platform and a long history of future assistance in helping the regional energy
engagement in integrated design, NEEA system ensure efficiency of end-use products
is strategically positioned to support the as the natural gas system evolves. If additional
transformation of whole-building efficiency. An
opportunities arise, NEEA will work through its
essential next step is engaging funders to develop a committee processes to assess and approve any
shared understanding of the current and emerging new strategic opportunities with our Advisory and
state-and local-level policies driving deeper whole-
Board committees to help support a more efficient
building efficiency, the barriers and opportunities, regional energy system.
and how NEEA can best complement funder efforts
to achieve this vision. Whole-Building Efficiency is
being proposed as a specially funded project due to Rogue Valley,
varying factors, including 1) diverging policy drivers,
and 2)the variety and concentration of commercial
building stock, that make this opportunity of greater
value to some of NEEA's funders than others.
DPW
8 Identified as a Regional Recommendation for Energy Efficiency
in the Northwest Power and Conservation Council's 2021 Power
Plan.
Exhibit A- Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Special Funding 52

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
CvCIP- 7
>> Operations and Budget
Administration
determined policies to assure equitable allocation
NEEA's Business Administration and Human and appropriate prioritization of resources and
Resources functions support the people, activities across the region.
processes and technology required by NEEA staff
to effectively achieve annual and five-year goals. Within all of its operations, NEEA actively looks to
Ensuring that internal processes and technologies achieve results while creating efficiencies that save
are efficient, streamlined and compliant allows time and reduce costs. Examples include:
NEEA staff to operate proficiently, efficiently and Working in cross-sector Product Groups
flexibly across all Market Transformation work. (e.g., commercial and residential HVAC)
to efficiently leverage shared relationships,
expertise, research and data collection
Key Assumptions between commercial and residential programs,
rather than duplicating efforts and recreating
• An upgrade is required to NEEA's business assets. Similar leverage opportunities also exist
accounting, budgeting, forecasting, reporting, between the natural gas and electric portfolios.
and contract management software in Cycle 7.
• Optimizing resourcing by insourcing key
• NEEA will maintain its current office lease. activities where it makes sense. For example,
NEEA manages its data and analytics functions
Cycle 7 Activities internally. This highly specialized work is
repurposed many times over across multiple
Both Human Resources and Business programs, thereby maximizing its value to the
Administration support and serve NEEA's natural region.
gas and electric business units. Activities include: In Cycle 7, NEEA staff will continue to seek
• Information Technology efficiencies and leverage resources across its
electric and natural gas portfolios to ensure
• Finance and Accounting streamlined operations and deliver on business
• Contracts plan goals within the five-year budget.
• Legal and Risk Management
• People Management(including recruiting Resourcing Philosophy
and hiring) NEEA's greatest asset is its staff. Market
• Facilities Management Transformation practitioners spend years,
sometimes decades, developing and honing the
skills and relationships required to cultivate and
Commitment to Organizational Efficiency implement market strategies that drive lasting
market change. Given the specialized nature of
NEEA acts as a careful steward of utility customer the work, outsourcing for these critical strategic
dollars, recognizing that it is entrusted with roles has proven difficult and costly given the
delivering value to those customers on behalf of time it takes to develop Market Transformation
its funders. NEEA carefully adheres to Board- expertise. NEEA's Executive Director is responsible
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Operations and Budget 53

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
for managing the organization's budget to align
with business plan goals in the most efficient Assumptions and Drivers
and effective way possible, including resourcing NEEA's unique funding model creates some
decisions. Traditionally, NEEA strives to manage complexities in dealing with inflation as the
and administer strategy development and other cumulative effects of five years of future inflation
critical tasks using internal staff and seeks to must be considered in the next five-year budgeting
outsource execution tasks. This approach has and planning process. Prior to the start of
traditionally resulted in around 45-50% in-house the current business plan, inflation had been
staff and 50-55% outsourced contractors. NEEA historically low, between one and three percent
expects to maintain a similar philosophy toward annually, so it did not factor significantly into
resourcing in Cycle 7. business planning.
However, since the most recent business planning
Annual Planning and Reporting process was completed in 2018, the consumer
Each year of the business cycle, NEEA's Board of price index has increased by approximately 20
Directors will approve an annual operations plan percent.9 To recover some of its purchasing power,
and budget for the organization. The operations particularly with respect to recruiting and retention,
plan includes planned activities, budgeted NEEA has factored a conservative estimate for
program, labor and administrative expenses, and
key performance metrics. It also provides input to inflation into its Cycle 7 budget estimates:
alliance portfolio management systems to ensure Labor and General and Administrative Cost
the portfolio delivers value to the region. This yearly Assumptions
planning process helps maintain the alliance's To estimate the impact of inflation, the
flexibility by presenting new opportunities in a business plan assumes a compound annual
timely manner as they emerge within the five-year inflation rate of 4.4 percent (averaged between
business cycle. salaries, benefits, and some general and
administrative costs) and uses the Cycle 6
NEEA maintains systems, processes, records forecast prepared for the 2023 Operations
and reporting protocols sufficient to demonstrate Plan as a baseline.
fiscal responsibility and effective risk management
practices in all aspects of operations. The Executive Project Cost Assumptions
Director will provide the Board with a summary To estimate direct project costs, the business
of pending, in progress and completed activities plan does not assume a flat inflation
rate across the portfolio. Rather, annual
under the approved annual Operations Plan. budgets are based on anticipated program
milestones and associated increases in
market investment, areas of increased market
Cycle 7 Budget opportunity (e.g., markets where deeper
engagement will drive near-term energy
Northwest utilities and energy efficiency savings), and potential for increased cost-
efficiencies in operations. Project costs reflect
organizations fund NEEA based on each 2023 rates, with no inflation assumptions
participant's share of the overall regional energy embedded past 2023.
system. This approach is built on the idea that
all utilities receive long-term benefits from local
energy savings and from the regional benefit of
reduced demand on the energy system.
9 Source:J�ShQ_4rp u of�ybfr�ta&tics AgreementNEEA 2025-2029 Business Plan—Operations and Budget 54
IMIc e ore Funding

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Budget Detail
NEEA's total five-year(2025-2029) core budget is$211.8 million for the electric portfolio and $35.3 million for
natural gas. The proportion of funding budgeted each year will be reviewed and approved as part of NEEA's
annual operations planning process.
Additionally, the business plan includes$2.1 million in contracted expenses for the on-going End Use Load
Research special project and a placeholder of about$25 million for additional special projects that are
expected to emerge throughout the course of the business cycle. NEEA has established business processes
to evaluate these opportunities (see Appendix I: Processes and Practices to Ensure Adaptability), as well as
processes to segregate and account for additional funding. These financial processes are overseen by NEEA's
Board and align with financial policies.
Table 4: Total Five-year Budget by Workstream ($ Thousands)
End-Use Load Other
Workstreams Electric Natural Gas Research Special Total
Project10 Projects"
Emerging Technology 17,733 3,027 0 0 20,760
Market Strategy and Execution 91,005 19,512 0 20,132 130,649
Codes &Standards 16,952 1,283 0 0 18,235
Analytics, Research & Evaluation 48,552 5,333 1,914 0 55,799
Convene &Collaborate 11,910 75 0 0 11,985
Administration (Shared Services) 36,789 0 0 0 36,789
Allocation of Shared Services12 (11,141) 6,088 190 4,863 0
Total (All NEEA Core Activities) 211,800 35,316 2,104 24,995 274,215
to The End-Use Load Research project(EULR)is a special project, funded and operated separately from activities
that are regionally funded in the Business Plan.
11 Excluding EULR, this column is an estimate of Cycle 7 Special Projects outside of core Business Plan activities
and not yet under contract. Dollars will be allocated to individual workstreams upon contracting.
12 Shared Services are NEEA's Convene and Collaborate and Administration workstreams. All Shared Services costs
are incurred within the electric budget. Natural Gas and Special Projects reimburse the electric budget for their
allocation of Shared Services, facilities and supplies.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Operations and Budget 55

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Cycle 7
>> Risks and Opportunities
EEA's success depends funding shares have been finalized by the Board,
on several factors with the NEEA would delete their assumed level of dollars
potential to fluctuate within from the Board-approved total funding amount
its rapidly changing operating and recalculate effective shares such that other
funders' dollar amounts are unchanged. In this
environment. Each of these factors event, NEEA would apply the following principles
carry risks and opportunities, which to investment reduction decisions:
could impact NEEA's ability to
• Maintain Cycle 7 value delivery as much as
achieve its strategic goals and fulfill
possible without increasing individual funder
its purpose and mission. contributions.
• Preserve planned investment in high value,
high certainty categories.
Risks and Opportunities NEEA Plans to
Mitigate Reduce investment or delay timing and scope
in areas where 1) NEEA has a higher degree
of uncertainty or 2)where reductions will have
Loss of Funding low to no impact on Cycle 7 energy savings
The loss of a funder(s) could result in an and peak value.
impact to NEEA's leverage required for Market Ensure regional distribution of value for NEEA's
Transformation. This potential loss could also remaining funders.
create inequity and free-ridership issues across the Annual priorities and budgets will continue to be
region. At any point, funding could be in jeopardy approved by the Board through NEEA's Operations
if: Planning process.
• NEEA does not achieve its goals.
• NEEA fails to deliver on its commitments. Uncertain Policy Environment for Natural Gas
• NEEA is perceived by funders as not providing Acknowledging that the landscape for natural
additional value. gas efficiency in the Northwest will continue to
evolve in Cycle 7, contingencies are required for
• NEEA does not evenly distribute benefits future external policy or market shifts that may
across the region. impact NEEA's natural gas portfolio and associated
• Investment in NEEA is precluded by a interventions. Some possible scenarios include
regulatory commission decision. state or local restrictions on the use of natural gas
or incentivization of natural gas efficiency or shifts
NEEA mitigates these risks by clearly defining and
delivering value to funders and by maintaining in clean energy policies that deprioritize energy
open, meaningful channels of communication to efficiency as a decarbonization strategy.
resolve issues and maximize the alliance's impact. NEEA will continue to track policy shifts and,
Should a funder withdraw from NEEA after the if needed, use the annual operations planning
Cycle 7 Business Plan has been approved and process to pivot natural gas efforts to focus
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Risks and Opportunities 56

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
on the most beneficial opportunities given the opportunities to engage and influence
new market conditions. Staff will leverage the commercial building decision-makers and
Natural Gas Advisory Committee to guide and influencers.
inform intervention strategies to adaptively • Investing in convening and collaboration in
manage the natural gas portfolio, and to make anticipation of increased need for engagement
recommendations to the Board of Directors' with other Market Transformation organizations
Natural Gas Committee. • Formalizing NEEA's commitment to delivering
If NEEA's investment in natural gas efficiency secondary co-benefits of efficiency, keeping
needs to be significantly reduced or phased out NEEA relevant and able to engage in broader
regional and national conversations on behalf
in Cycle 7, NEEA will work with the Board of of the Northwest.
Directors' Natural Gas Committee and Governance
Committee to develop a strategy and timeline for
divestment or refunds. In the case that regulatory Federal Funding Opportunities and Uncertainties
requirements restrict funders' ability to receive Upcoming federal funding flowing from the
reimbursement for their core investment, NEEA Bipartisan Infrastructure Law(BIL) and the
will coordinate with affected funders to conclude Inflation Reduction Act (IRA) could represent
funding agreements in a timely fashion. In this an unprecedented boon for energy efficiency in
event, NEEA's electric business unit would the Northwest. Given the number of new and
be required to absorb the portion of shared expanded federal programs joining the complex
administrative costs that are currently budgeted patchwork of existing local and regional programs,
from natural gas. including NEEA's Market Transformation programs,
purposeful coordination is necessary to 1) ensure
Different Approaches to Market Transformation these new opportunities integrate effectively with
Other parts of the country, including California,
existing programs and 2) to amplify Northwest
Minnesota and New York, are actively investigating efforts and to mitigate unintended program
Market Transformation. Differing approaches by impacts. In Cycle 7, NEEA will seek opportunities
large players in these states could create market to enhance energy efficiency outcomes for
confusion and hinder the ability of the Northwest Northwest consumers by identifying and leveraging
to effectively influence markets. NEEA will mitigate opportunities associated with federal funding
this risk by continuing to establish and maintain streams. Likely roles for NEEA include:
relationships with key players in other geographies Continuing to convene regional stakeholders,
to influence and collaborate on Market including state energy offices, regional utilities,
Transformation programs. The Cycle 7 Business and others to coordinate around federal
Plan maintains NEEA's influence by: funding opportunities and share information
(e.g., timing, eligibility, relevant technologies,
• Continuing, and in many cases, deepening etc.).
engagement and relationships in all current
Serving as a bridge between U.S. Department
markets.
of Energy(DOE) staff and regional
• Continuing to support national partnerships stakeholders, conveying rules, guidelines, and
and collaboratives to maintain alignment and other useful information and sharing regional
market momentum. feedback with the DOE to ensure Northwest
needs are represented and considered.
• Continuing investment in the Integrated Design
Labs and BetterBricks platform, providing
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Risks and Opportunities 57

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
• Coordinating with entities (e.g., Consortium Risks Outside of NEEA's Control that
for Energy Efficiency, ACEEE) who may also Cannot be Easily Mitigated
be accessing federal funding to leverage
each other's efforts (e.g., research) and avoid
duplication of work. There are many ongoing risk factors in the market
that are beyond NEEA's sphere of influence,
• Engaging with the market (e.g., including pressure for utilities to limit rate
manufacturers, retailers)to help NEEA's increases, as combined with rising energy costs
partners stay current on with DOE priorities,
coordination efforts at the state and regional and economic pressures. Other such risks include:
levels, and utility priorities. • Regulatory or governing body decisions that
Given some of the uncertainty around DOE end or curtail investments in efficiency.
timelines and priorities, NEEA has not included • Events or conditions that lead to a significant
any assumptions for direct federal funding in the contraction of the economy, supply chain
Cycle 7 budget. Any investment that does flow to disruptions or continued high levels of
NEEA will be supplemental to regional investment. inflation.
Likely areas of focus based on DOE's currently • Changes in leadership and/or priorities at the
expressed priorities include building codes, state or federal level.
specifically efforts to support market readiness and Significant changes or disintermediation that
compliance, emerging technology development, shift energy efficiency away from utilities.
and research.
NEEA regularly monitors activity and developments
Contribution of Special Funding Assumptions to in the industry to identify potential impacts.
Budget Estimate
As the need arises, NEEA will work through its
The Cycle 7 Business Plan budget includes a Board of Directors to develop specific mitigations.
-$25 million placeholder for special funding Additionally, during the development of the annual
opportunities. As described in the 2025-2029 Operations Plan, NEEA staff uses these analyses
Business Plan, these special funding opportunities to determine proactive mitigation strategies to
are not yet under contract. The total amount of address market shifts.
special funding estimated in the Cycle 7 budget
is similar to NEEA's percentage of special funding _
in Cycle 6. Should these special projects not
materialize in Cycle 7, or materialize to a lesser
degree, NEEA's electric and gas core budgets
would be required to absorb the portion of shared
administrative costs that are currently budgeted - - .
from special funding. In that event, NEEA would
leverage its adaptive management approach to
ensure no impact to regional value delivery.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Risks and Opportunities 58

>� Appendices
Processes and Practices to Ensure Adaptability...................60
Product Group Strategies..................................................67 -
"` Promising Opportunities in Scanning................................ 70 9+ .Vowfl'
Energy Savings Overview...................................................72 .
r
Glossary of Key Terms.......................................................74
1 t
114
~
PtT

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Cvrlp 7
>� Appendix I — Processes and Practices to
Ensure Adaptability
Focusing on opportunities to leverage market
momentum
NEEA's five-year business cycle provides the Whenever possible, NEEA prioritizes high-leverage
stability and level of investment predictability market opportunities. By focusing on markets
that's required for Market Transformation success. that are being disrupted (e.g., markets with
However, it also introduces a degree of risk as new manufacturers or with distributors that are
it's very difficult to predict market and industry changing practices), or where demand for an
conditions five to seven years in the future. This energy-efficient product is growing, NEEA can
is particularly true in the energy sector, which deliver greater transformation for less investment.
is now experiencing unprecedented levels of
uncertainty and change. To mitigate this risk, For example, in Cycle 6, NEEA decided to increase
NEEA uses a number of Board and stakeholder investment in heat pump water heaters to support
processes that support adaptive management by regional growth in demand, target interventions
ensuring regional collaboration and coordination with manufacturers, wholesalers and installers,
and providing Board oversight of annual budgets. and ensure the availability of Northwest data
These processes are described in more detail and experience to inform the federal standards
below. development process.
Note: All of NEEA's current guidelines and policies
will be reviewed by the Board for consistency with Scaling back intervention activities but remaining
the Cycle 7 Business and Strategic Plans once the engaged enough to monitor the market and retain
plans are finalized. relationships with critical market actors
For slower moving, harder to transition markets,
NEEA may opt to strike a balance between
observation and engagement that limits staff
Adaptive Management Approach time and other resource needs until a leverage
opportunity arises.
NEEA's adaptive management approach
maximizes value delivery to the region within For example, in 2023, NEEA discontinued
available resources. Portfolio and program-level Windows Attachments as standalone program but
decisions are made based on where NEEA is likely decided to maintain some critical activities and key
to have the greatest impact to deliver on business relationships should an opportunity to reengage in
plan goals. This approach ensures that NEEA the market arise.
remains nimble and able to pivot to respond to
market dynamics or embrace new opportunities. Pausing activities when NEEA doesn't have a
Through its annual operations planning process, leverage point and/or market partners
NEEA assesses market opportunities, makes trade- If trade-offs are required, NEEA will pause in areas
off decisions, and strategically manages risk in where a market leverage opportunity doesn't exist
consultation with funders and stakeholders. These or where relationships haven't been established.
decisions are often driven by market dynamics and These are typically markets in which activities
timing and may include: haven't started and/or significant investments
have not been made. For example, in 2023, NEEA
decided to invest conservatively in developing
the new Efficient Fans program to allow for more
robust investment in Extended Motor Products
Pumps, which is a faster moving market.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Appendix 60

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Initiative Lifecycle
NEEA has established a portfolio management system that provides a clear framework for decision-making
on Market Transformation program investments. Through NEEA's Natural Gas Advisory Committee (NGAC)
and Regional Portfolio Advisory Committee (RPAC), NEEA staff actively manage the portfolio of Market
Transformation activities to deliver value based on a range of criteria. Each program in NEENs portfolio goes
through a consistent stage-gate development process called the Initiative Lifecycle, illustrated below:
Figure 1: NEEA's Initiative Lifecycle OLC) Process
ENT DEVELOPMENT &TRACKING
CONCEPT WVW�EINT MARKET MONITORING
Opportunity Advancement Transition to LTMT Monitoring Complete
Advisory Committee Approval: Advisory Committee Approval:
Concept Advancement Program Advancement
There are two key decision points within the Initiative Lifecycle where a formal vote by RPAC or NGAC is
required for any Market Transformation program to advance. These points occur 1) prior to an initiative being
adopted into the alliance Market Transformation program portfolio (i.e., Concept Advancement), and 2) prior to
an initiative being approved to scale-up its market activities (i.e., Program Advancement).
Annual Operations Planning
On an annual basis, NEEA staff will prepare an operations plan and budget for approval by NEENs Board of
Directors. The Operations Plan includes planned activities, budgeted expenditures for program work, labor
and administrative costs, and key performance metrics. It also provides input to alliance portfolio management
systems to ensure the portfolio delivers value to the region. This yearly planning process supports the alliance's
flexibility by presenting new opportunities in a timely manner as they emerge within the five-year business cycle.
Exhibit A- Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Appendix 61

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Board and Advisory Committee Process
NEEA staff facilitates a robust process to ensure that regional input is considered in alliance program planning
and decision-making. This coordination and collaboration process happens at many levels throughout both
NEEA and stakeholder organizations. It includes NEEA's Board of Directors as well as the Board committees
shown in Figure 2. Additional Board committees, either permanent or ad hoc, may be created depending on
the needs of the alliance, e.g., Business Planning or Diversity Equity and Inclusion.
Figure 2:Alliance Governance and Committee Structure as of March 2024
Pr EXECUTIVE I BOARD OF
DIRECTOR DIRECTORS
------------------- -------------------
NEEA Board Committees
Staff
Steering Advisory Coordinating
Committees Committees Committee(s)
Executive
End Use Load Regional Portfolio Program
Research Advisory Committee Coordinating
(EULR) (RPAC) Committee(s)
Strategic Planning
Natural Gas
(NGAC)
Finance/Audit
Cost Effectiveness
&Evaluation
(CEAC)
Governance
Regional
Emerging Tech
(RETAC)
Natural Gas
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Appendix 62

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Regional Portfolio Advisory Committee (RPAC) Cost-Effectiveness and Evaluation Advisory
• Advises NEEA's Executive Director on portfolio Committee (CEAC)
performance and program advancement, • Advises NEEA's Executive Director on methods,
including the formalized "challenge flag" data sources and inputs for use in NEEA's cost-
process. benefit analysis and energy-savings reporting.
o RPAC+,13 an extension group of this • Advises NEEA's Executive Director on market
committee, will advise NEEA's executive research and evaluation methodologies.
director on downstream marketing
elections.14 Regional Emerging Technology Advisory Committee
(RETAC)
• Monitors developments from other committees
regarding regional coordination, market progress • Advises NEEA's Executive Director on NEENs
and emerging technology. progress toward achieving strategic pipeline
goals.
Natural Gas Advisory Committee (NGAC) • Tracks and coordinates the progression of
energy efficiency technologies to improve
• Advises NEEA's Executive Director on technology readiness and market adoption in the
gas portfolio performance and program Northwest.
advancement, including the formalized
"challenge flag" process.
• Monitors developments from other advisory Workgroups
committees regarding market progress and • Formed by RPAC on an as-needed basis, these
emerging technology. workgroups are staffed with as-needed expertise
for limited-term and specific purposes that are
distinct from that of RPAC, the Coordinating
Coordinating Committee(s) Committees, and other advisory committees or
• Collaborates with NEEA staff and reports workgroups.
to RPAC on coordination and optimization
recommendations regarding NEEA programs
and related activities.
• Identifies and manages potential implementation
challenges between NEEA and local utility
activities and seizes opportunities for amplified
market influence.
13 Committees may evolve based on alliance needs in Cycle 7
14 RPAC+is a group consisting of RPAC members, funder marketing staff and other electric and natural gas funder
staff.
15 Downstream marketing activities are regionwide marketing activities to promote energy-efficient products, services,
and/or practices in the NEEA portfolio directly to end-use customers where NEEA may use a market-facing brand.
Channels include digital ads, purchased social, billboards and print, broadcast(radio/tv), point of purchase and
direct mail. These activities do not include marketing to midstream and upstream partners, including installer base,
distributors and manufacturers.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Appendix 63

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
New Strategic Opportunity Screening discretion of the Executive Director to pursue
and Review Guidelines and manage as part of overall organizational
management authority.
NEEA has a structured and open process to look 3. Opportunities that fall outside of the scope
for new opportunities to accelerate the adoption and budget of the current Strategic and
of energy efficiency. Some of these opportunities Business Plans require Board engagement to
may be in the form of new technologies and fall the extent that they represent significant and
within the scope of the current Business Plan. unanticipated impacts on the organization.
Other opportunities may fall outside the scope of Board engagement may include Executive
the activities defined in the current Business Plan Director communication with the Chair but
but may still fall within the scope and purpose may escalate to discussions with the Executive
of NEEA as an organization. Opportunities that Committee and/or Strategic Planning Committee
fall outside the Business Plan are assumed to be depending on the nature and scope of the
accompanied by their own financial resources opportunity. The Executive Committee or
to support the additional work. Many of these Strategic Planning Committee may choose
new opportunities could help NEEA and its to recommend full Board discussion if the
stakeholders broaden efforts to transform markets nature of the opportunity and the impacts
in the region. On the other hand, some of these on the organization are significant. Examples
opportunities also bring risk of diluting NEEA's of possible impacts that might trigger Board
core purpose and primary added value for the engagement include but are not limited to:
Northwest.
• Significant financial impacts: Any new
NEEA's Board-approved guidelines for new opportunity supported by funds separate
opportunity assessment lay out a set of primary from core NEEA funding (e.g., US
criteria for screening these new opportunities Department of Energy grants)that represent
that will support decision making aligned with five percent or more of NEEA's annual
NEEA's primary stakeholder's interests and NEEA's budget.
core strengths. These guidelines apply to new
opportunities with significant strategic, financial or • Regulatory impacts: Any opportunity that
internal resource implications. They do not replace may have potential impacts on regulatory
or subsume other NEEA portfolio or initiative level treatment of NEEA or NEEA funders.
screening or review processes that are intended to
address new opportunities that are of lesser impact • Legal or Organizational changes: Any
to the organization and/or fall within the scope of impacts on the organization that represent
the current Business Plan. potential new legal liabilities or changes
to the organizational structure such as to
governance, tax exempt status, expansion
Current Guidelines of membership, changes to geographic
1. NEEA welcomes new opportunities that representation (e.g., request to join by a
strategically advance the purpose of the Canadian utility).
organization. • Staff Diversion: Opportunities which, if
2. New opportunities that fall reasonably pursued, would require a diversion of staff
within the scope and budget of the current focus that could detrimentally impact the
Strategic and Business Plans are included achievement of Business Plan goals and
within the annual operations planning, objectives.
budgeting and implementation processes • Public Perceptions: Opportunities that
at NEEA. These processes include review significantly affect the way NEEA or its
by advisory committees where appropriate. funding organizations are perceived by the
Such opportunities are considered within the public or by key stakeholders.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Appendix 64

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
4. Board engagement should include a review of following the Concept Advancement milestone,
the opportunity as outlined in the New Strategic it will be flagged in the business case. Purpose:
Opportunity Assessment by the Strategic Information sharing around marketing,
Planning Committee followed by the Board. decision point for program progress.
2. Prior to October each year, or as early as
RPAC+ Downstream Marketing available— Funders agree to share marketing
Coordination Process plans relating to relevant alliance programs.
Purpose: Information sharing, consider
Though downstream marketing activities are a opportunities for leverage and coordination.
small subset of the marketing activities undertaken 3. Early October each year—As part of the
at NEEA, they require careful coordination with Operations Plan packet, RPAC+will receive a
NEEA's funders due to the customer touch. These marketing calendar with downstream activities
guiding principles address a dual objective: 1) for the upcoming calendar year highlighted.
funder concerns around marketing to customers, Purpose: Information sharing in preparation
and 2)the ongoing effectiveness of regional for decision at Q4 RPAC meeting.
Market Transformation work. The intent of this
work is to ensure transparency, adequate time for 4. Q4 RPAC Meeting— Funders will be prepared to
deliberation, coordination in the planning process, discuss their marketing plans and opportunities
and the ability to assess the effectiveness of the for regional synergies. Funders will commit
alliance's evolving regional downstream marketing to participating, self-delivery, or exemption
work. for downstream marketing activities for the
upcoming calendar year. Purpose: Decision
Principles for Downstream Marketing Activities point for activities in the draft Operations Plan
• An implementation process will achieve the dual marketing calendar, informs the Operations
objective above. Plan that is approved by the Board.
• An option for self-delivery and exemption will be 5. Two months prior to planned campaign— NEEA
provided for funders. staff will conduct a webinar for RPAC+ sharing
• Funders will have flexibility regarding the timing NEEA's planned marketing approach. Funders
of self-delivery. opting to self-deliver agree to document and
share their planned marketing approach within
• The delivery of marketing activities in four weeks following this webinar. Purpose:
participating and self-delivering service territories Information sharing.
will include the entire electric and/or gas service 6. Q2 RPAC Meeting— If changes or additions are
territory, including areas with overlapping zip made to the current-year marketing calendar,
codes. there is another discussion at the Q2 RPAC
• Decisions made should include consideration of meeting, and changes will be sent to RPAC+a
the regional result and initiatives' objectives. month prior to the meeting for internal review/
vetting. Funders will commit to participating,
self-delivery, or exemption for downstream
Coordination Process marketing activities in their territories. Purpose:
1. ILC Milestones—As part of the Business Case Decision point for any activities added to
for Program Advancement milestone votes at marketing calendar.
RPAC, downstream marketing activities will
be flagged if they are a strategy for that phase �• Quarterly— Marketing updates will be
of the program. To the extent downstream included as needed in quarterly advisory and
marketing is known as a potential intervention coordinating committee packets. Purpose:
Information sharing.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Appendix 65

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
8. Ad hoc— If there are new marketing activities Flexibility Around Self-Delivery Timing
that were not included in the previous • At the time the marketing calendar is reviewed
semiannual review but have a planned with RPAC+ (Q2 and Q4), funder plans for
start-date before or within two months self-delivery of downstream marketing activities
following the next scheduled review, a special will include an expected execution timeframe
communication with RPAC+will be initiated to and rationale. Funders choosing self-delivery of
determine whether a special meeting/webinar is regional execution agree to conduct activities
needed, or if the next scheduled review(Q4 or within a timeframe that will help meet regional
Q2) is sufficient for determining how the activity objectives in the spirit of this agreement.
will be executed. Purpose: Possible decision
point if a special meeting/webinar is needed. • When a funder opts to self-deliver downstream
marketing activities, NEEA staff and the
funder should attempt to coordinate activities
Options for Self-Delivery and Exemption to optimize campaign effectiveness. This
• Funders agree to document their rationale for coordination should include consideration
self-delivery or exemption and, when choosing of timing sensitivity (e.g., seasonality and
to self-deliver, share their plans to support the partnership commitments).
intended outcome of the regional effort.
Overlapping Zip Codes
• NEEA staff will provide an online template to
support funder documentation in a streamlined • Alliance activities will include all electric and/or
and efficient manner. Funders agree to natural gas zip codes for funders participating
document activities executed in the market in the regional campaign irrespective of self-
within approximately 30 days following execution delivery or exemption elections of other funders
of self-delivered activities. Funders agree to with overlapping zip codes. Other coordination
document and share results as they become arrangements may be considered.
available.
• Self-delivery activities may include coverage for
• Documentation is recommended in the spirit of overlapping zip codes in addition to any regional
sharing, collaboration and learning, and is not campaign activity. Funders opting to self-
intended as scrutiny of Funder decisions. deliver agree to include all of their electric and/
or natural gas service territory zip codes in the
activity they undertake to support the regional
_ campaign.
r,
Reimbursement
• Reimbursement for self-delivering funders will
be based on the funder share of budgeted costs
for each campaign or activity in each Operations
Plan, and as agreed by funders at each Q2
1 RPAC meeting for any mid-year changes to
marketing activities.
�, • No reimbursements are provided if the
►� campaign or activity is canceled.
�" • Reimbursement is not provided for exemption.
—41pe • Reimbursement will be provided on request and
computed on an annual basis. It will be provided
in the form of a bill credit after acceptance of the
audit report for the preceding year.
}
Exhibit 7 Core Funding Agreement
NEEA 2025-2029 Business Plan—Appendix 66
Cycle

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Cvrip- 7
>� Appendix II — Product Group Strategies
In Cycle 7, NEEA will continue to operate in Market Transformation objectives:
as many as six cross-sector product groups,
leveraging its adaptive management approach • Scan the market and work with manufacturers
to explore and advance the highest value on new or emerging technologies across
opportunities for the region: consumer product categories that will deliver the
next level of energy efficiency for consumers.
The Building Envelope Product Group includes
the supply chain that manufactures, distributes • Build scale nationally with utilities and Market
and sells the materials that physically separate Transformation entities outside the Northwest,
the interior and exterior of a building (e.g., walls, national retailers and ENERGY STAR to influence
fenestration and roofs), and the end consumers the purchasing decisions of corporate retail
who purchase them. High-Performance Windows buyers that in turn influence manufacturers'
(HPW) is the one program in this Product Group product development and manufacturing
at the beginning of Cycle 7. It is supported by both decisions.
electric and natural gas funders. • Influence ENERGY STAR specifications and
Market Transformation objectives: federal standards with data and insights.
• Engage in national partnerships to build • Improve U.S. DOE and U.S. EPA test protocols
alignment and market momentum in both so that they accurately reflect real-world
window attachment and primary window conditions and energy savings.
markets. This includes increasing market The HVAC Product Group includes the supply chain
demand for high performance fenestration that manufactures, distributes, specifies, designs
products by leveraging 1) the U.S. DOE's and installs commercial and residential HVAC
investment and focus on the Partnership for products, and the end consumers who purchase
Advanced Window Solutions (PAWS) national them. High-Performance HVAC (HP HVAC) and
collaborative, and 2) emerging policies for deep Advanced Heat Pumps (AHP) are the two electric
energy retrofits of existing buildings. programs in this Product Group, while Efficient
• Continue to advance codes and standards for Rooftop Units (Efficient RTUs) is the one natural-
high-performance windows, leveraging the latest gas-funded program at the beginning of Cycle 7.
ENERGY STAR specification(s)to drive market Market Transformation objectives:
adoption in the Northwest.
• Amplify alliance investments by collaborating
• Assess viability of additional window and with regional and national partners, including by
envelope measures beyond fenestration through leveraging the growing momentum around heat
product scanning. pumps, indoor air quality and HVAC efficiency.
The Consumer Products Product Group includes the • Increase supply-chain and end-user awareness
supply chain that delivers consumer goods and and promotion of the very high efficiency
services in high volume, including manufacturers, dedicated outside air systems (very high
distributors, physical and online retailers, efficiency DOAS) approach and its significant
contractors and installers, and the end customers cost savings and non-energy benefits.
who purchase them. The Retail Products Portfolio
(RPP) is the one electric program in this Product • Continuously improve average installed efficiency
Group at the beginning of Cycle 7. and peak savings across all residential-sized
heat pump systems in the Northwest by
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Appendix 67

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
motivating manufacturers and other market building controls opportunities, such as
partners to incorporate efficiency improvements integrated lighting and HVAC controls.
into specifications and standards, which will
enable manufacturers and the market to The Motor-driven Systems Product Group includes
differentiate the best performing products and the supply chain that manufactures, distributes,
create competitive advantage. specifies, designs and installs a variety of motor-
driven systems (e.g., pumps, fans, compressed air
• Scan for opportunities to 1) increase market systems and high-performance motors), and the
adoption of heat pumps at the individual-room decision-makers who influence the purchase of
level through window-mounted heat pumps and these products. Efficient Fans and Extended Motor
reduced-cost installation strategies, 2) support Products (XMP) are the two electric programs in
hydronic heating and cooling in HP HVAC, and this Product Group at the beginning of Cycle 7.
3) deliver capacity, carbon and grid flexibility
benefits in combination with HVAC efficiency. Market Transformation objectives:
• Continue to develop natural gas opportunities for • Inform the development of voluntary
HP HVAC and dual-fuel (hybrid) opportunities for specifications to reward the most efficient
efficient RTUs and the residential market. motor-driven systems, and then leverage those
specifications to influence development of
• Inform and accelerate the region's interventions federal standards.
in equipment, design and installation efficiency
through insights derived from data and research. Engage influential manufacturers, distributors
and trade associations to demonstrate product
The Lighting Product Group includes the supply performance of smart pumps and address
chain that manufactures, distributes, specifies, market barriers to adoption.
designs and installs lighting products (e.g.,
lamps, ballasts, controls and fixtures), and the Ultimately, expand federal standards to require
end consumers who purchase them. Luminaire integrated variable speed drives and advanced
Level Lighting Controls (LLLC) is the one electric controls for all covered pumps.
program in this Product Group at the beginning of . Partner with manufacturers and industry
Cycle 7. associations to increase awareness, visibility and
Market Transformation objectives: adoption of more efficient fan products.
• Engage national and regional partnerships to • Scan for opportunities that optimize motor-driven
build demand for networked lighting solutions systems to maximize system-level efficiency.
and create greater market leverage with national The Water Heating Product Group includes the
manufacturers. supply chain that manufactures, distributes
• Continue partnerships with U.S. DOE and Design (wholesale and retail), specifies, designs and
Lights Consortium to improve networked lighting installs electric and natural gas water heating
product performance and specifications. systems (commercial and residential), and the
end consumers who purchase them. Heat Pump
• Engage key lighting manufacturers and their Water Heaters (HPWH) is the one electric program
sales channels to enhance promotion and in this Product Group at the beginning of Cycle 7.
uptake of LLLC in the Northwest. In Cycle 7, NEEA will leverage the relationships
and resources developed through the natural
• Build awareness of LLLC and its benefits and gas Efficient Water Heating program to explore
develop the market-actor capabilities. residential and commercial gas heat pump
• Continue to assess networked lighting and opportunities.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Appendix 68

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Market Transformation Objectives: BetterBricks objectives:
• Increase regional adoption of heat pump water • Cultivating and deepening market relationships
heaters by continuing supply chain engagement by serving as a trusted third-party. This role
to drive demand and build confidence in the brings both credibility and attention to NEEA's
technology. work in commercial buildings and helps build
important partnerships that result in consistent
• Support the market as adoption widens to focus opportunities for programs to engage with and
on remaining barriers to heat pump water heater better understand key segments and audiences.
market acceptance and challenging market
segments, including those in cold climates, with Creating, inventorying and disseminating
tools and resources. These efforts educate the
challenging installation locations, and across
varying income levels. market about alliance programs and associated
benefits and support the market by helping them
• Engage with manufacturers to improve efficiency properly implementing these solutions.
of water heating products and systems, and
develop efficient water heating solutions for Maintaining communication channels. These
multifamily and commercial applications. channels allow alliance programs to deliver
targeted communications to and from target
• Support the adoption and integration of audiences using curated messaging.
the Consumer Technology Association
communication protocol CTA-2045 as standard Integrated Design Labs have a mission to transform
practice across all heat pump water heaters the design, construction and operations of
supplied to the Northwest. commercial, institutional and residential buildings
to advance energy-efficient, high-performance
Product Groups are supported by an enabling and healthy buildings in the Northwest. Integrated
infrastructure that is leveraged by multiple Design Labs exist at several prominent universities
programs to build relationships, support market in the Northwest, including Montana State
engagement and bolster regional clout. In Cycle University, the University of Idaho, the University
7, NEEA is supporting two such infrastructure of Oregon, the University of Washington, and
programs: BetterBricks and the Integrated Design Washington State University. These universities
Labs. are critical partners to alliance programs by
helping accelerate Market Transformation through
BetterBricks supports alliance and regional energy research, technical assistance and education.
efficiency programs by providing access to target
market actors through its relationships and Integrated Design Labs are a critical source of,
communication channels. This allows multiple and testing ground for, emerging technologies and
programs to leverage a central investment while practices. Their activities can be further leveraged
working to overcome market barriers, such as to support local and regional efficiency programs in
raising awareness and generating demand for a variety of ways, including through case studies,
energy-efficient technologies in commercial training, testing and evaluating new technologies,
buildings. BetterBricks launched in 1999 and and building awareness of new programs or
represents a long-standing, trusted resource technologies within the design community. The
for building professionals. BetterBricks target market partners they work with (e.g., designers,
audiences include building owners, property engineers and building owners and managers)
managers, buildings facilities staff, architects, are a critical leverage point for efficient building
designers, engineers and contractors. practices across programs. Integrated Design
Labs has an important role providing them with
resources to support their understanding and
ability to implement energy-efficient building
practices.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Appendix 69

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Cvrip- 7
>� Appendix III — Promising Opportunities in
Scanning
Market Transformation Approach
NEEA will work with market actors to advance and
Residential and Commercial HVAC test solutions that deliver occupant comfort and
Opportunity efficiency at a reasonable cost to consumers, with
approaches specifically tailored to the existing
Space heating is by far the largest opportunity for Northwest building stock. This transformation
residential energy savings. In the Northwest, the requires finding solutions that are unique to the
current load is 1,600 aMW for electric residential Northwest and are equipped with communicating
space heating, and 470 aMW for commercial controls that are intelligent enough to deliver
space heating. The cooling load is smaller, but efficiency and flexibility across the majority of
growing, with the current load at 700 aMW for building stock in the region.
residential and nearly 1,800 for commercial.
Innovative solutions are emerging for heat pumps
to serve both residential and commercial heating Residential, Commercial and Industrial Motors/
and cooling demand. Much of this innovation Drives
and the potential to transform this market focuses Opportunity
on controls that improve the adaptability of the
systems to deliver efficient space heat and cooling Motors use about half of the electricity in the U.S.
in variable climates and building types. and account for 30% of the total electric load in
the region. Adding smart controls to variable-speed
• Next Generation Residential Heat Pumps: While motor-driven systems (e.g., pumps, fans and
variable speed heat pumps can offer more compressors) represent a significant energy-saving
efficiency than other types of space heating, opportunity for the region.
leaky ducts and other installation and operating
challenges can diminish their effectiveness. By To capture these savings, NEEA will expand
adding advanced controls, heat pumps can be applications of motor systems within the pump and
optimized to perform better, save more energy fan program, and potentially add a new program
and deliver ancillary benefits to the grid. The for variable-speed drives to increase energy
same controls and sensors that enable efficiency efficiency for existing single-speed pumps, motors
and comfort simultaneously offer the flexibility of and fans.
demand response. Market Transformation Approach
• Commercial RTUs with Heat Pumps: There are This market is ready to be transformed through a
hundreds of thousands of RTUs in the region, combination of practices, including: 1) improving
the majority of which are electric-resistance how systems are installed and sized for efficient
or gas powered. Adding heat pumps with operation, 2) optimizing efficiency by measuring
integrated controls will allow these units to performance as a system instead of individual
modulate up and down, saving energy by components, and 3)gaining adoption in the
sensing and responding to weather conditions market through training operators and trade allies
and other inputs. Advanced controls can also to retrofit existing systems with smart controls.
help business operators know if the systems NEEA will collaborate in the development and
are 1) installed, 2) functioning properly, and 3) validation of test methods and ratings that
could be delivering more efficiently in a way that differentiate the variable-speed systems and
adapts to their specific building. quantify their energy and non-energy benefits for
the region.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Appendix 70

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Residential and Commercial Water Heating emissions at the building and at the generation
Opportunity source. Grid-enabled CHPWHs offer fully flexible
Heat pump water heaters are gaining momentum load shifting to help grid operators balance the grid
in the Northwest, but there remains an important during peak times.
opportunity to adapt the products to meet the Market Transformation approach
needs of a broader pool of homes and buildings. Commercial heat pump water heater technology
Emerging products with varying capacities and has been available in the U.S. market for many
form factors offer alternatives for large central years, but market adoption has languished
systems and small hard-to-reach applications. due to complex engineering and unpredictable
These products represent efficient alternatives
for the majority of water heater installation needs performance outcomes. Until now, the market
and hold the potential to significantly reduce the has designed these heat pumps as a series
of components that are acustom-engineered
region's 1,300 aMW residential and 140 aMW
commercial water-heating loads. solution. This requires design engineers and
installation contractors to specify all parts and
• Residential Heat Pump Water Heaters for All pieces for a water-heating system, size it properly,
Applications: Heat pump water heaters are develop a control system to integrate all active
gaining awareness with homeowners and components, and then install it, commission it, and
residential contractors, but the products tend ensure proper maintenance. This approach has
to be one-size-fits-all offerings. NEEA will work been a risky and expensive deployment strategy
with manufacturers and the supply chain to and has led to unpredictable performance results.
accelerate development of a range of water While transforming this market will require
heaters that are ready to install in common improving and leveraging existing tools, several
installations, such as attics and small closet products are available, with new products from
spaces, to make efficient heat pump water major manufacturers expected soon. NEEA has
heaters off-the-shelf accessible to a broader
market of consumers. published an Advanced Water Heater Specification
v8.0 and defined all the parts of a fully functional
• CommerciaVMultifamily Central Heat Pump Water commercial/multifamily system. This, along
Heaters: There is tremendous opportunity for with modeling and sizing tools available for the
the central heat pump water heater (CHPWH) design and engineering community, will enable
product in the new construction sector. In new the proposed system to be reliably modeled to
multifamily buildings, water heating represents predict performance. In addition, the water heating
1) 25-30% of the total energy use, 2) one of the Qualified Products List (QPL) is in place to set
highest energy intensity uses, and 3) one of the performance expectations for those products, and
largest direct sources of carbon emissions in workforce development training is available to help
most of these buildings. move the market forward.
NEEA's Advanced Water Heating Specification
(AWHS) includes commercial water heating
systems. These electric heat pumps with a central
water-heating and distribution system provide
domestic hot water in multifamily buildings. Gas
boilers or electric resistance have been the go-to
technology for central hot water due to a lack
of technologies and low fuel costs. However,
CHPWHs are 2-3 times more efficient and have
the potential to operate at significantly lower costs.
In addition, they support the growing number of
policies for decarbonization by eliminating carbon
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Appendix 71

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
CvCIP 7
>� Appendix IV — Energy Savings Overview
Electric Energy Savings
The intention of NEEA's Market Transformation program results. Because of the collaborative
work is to achieve energy efficiency that is nature of many Market Transformation programs
permanently embedded into market structures and the unique roles that NEEA and its utility
and behaviors. NEEA's current Cycle 7 electric partners play in transformation, NEEA does not
portfolio of investments has a total achievable assign attribution to either the regional or local
potential energy savings value to the region of 1300 effort. However, NEEA does collect program data to
aMW over the lifecycle of the investments. This factor in local savings and avoid double counting
savings potential is expected to increase as new in the reporting process. Additionally, NEEA
emerging technologies and subsequent Market tracks the avoided costs on the system to ensure
Transformation programs are identified in Cycle 7. regional benefits outweigh the societal costs of new
NEEA's primary energy savings measure is co-
efficiency adoption in the market.
created savings,15 which are savings that are
generated above the estimated naturally occurring
market baseline and inclusive of utility local
Figure 3: Co-Created Savings Estimate (2020-2039)
Forecasted Energy Savings based on Proposed Cycle 7 Market Transformation Portfolio
50 Cycle 7 Cycle 8 Cycle 9
40 —
30
20
10 '
0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039
Prior Investments Active Programs,Codes and Standards
New Programs Developed in Cycle 6 New Emerging Technology for Cycle 7
16 NEEA began tracking and reporting co-created savings in 2011 following an extensive Board-led value metrics
exercise,which utilized McKinsey and involved extensive regional engagement.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Appendix 72

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Figure 3 above shows the estimated time horizon Natural Gas Energy Savings
of alliance co-created energy savings (2020-2039)
and the individual sources of energy savings, Compared to the electric portfolio, NEEA's venture
including: into natural gas efficiency is very recent, with
• Active Market Transformation Activities funding beginning in 2015. Through exploration
and opportunity identification, NEEA has now
In Cycle 7, NEEA will carry forward current established a solid investment portfolio in Market
programs in market development, as well Transformation for funding in Cycle 7.
as continued advancement of codes and
standards efforts to lock in the market changes. Through work to date, NEEA has one natural
Approximately half of the co-created energy gas program in market development(Efficient
savings expected in Cycle 7 will be from those RTUs) and a host of additional opportunities it
current investments (shown in orange bars on is vetting for advancement. As a result, there is
previous page). a wide range of potential for Cycle 7 natural gas
energy savings. The savings estimates depicted
• Prior Investments in Figure 4 are based on current programs and
The other half of anticipated Cycle 7 savings will do not contain savings potential for new work
be derived from codes and standards that went cultivated and advanced as part of the Cycle 7
into effect prior to Cycle 7, along with a possible plan. The range below depicts estimated savings
continuation of above-baseline savings from in the Cycle 7 timeframe for 1) Efficient Rooftop
NEEA's previously funded Ductless Heat Pump Units for commercial buildings, 2)the potential for
program, which ended in 2021 (shown in the commercially available gas heat pumps, and 3)
gray bars on previous page.) continued advancements in codes and standards.
• New Programs Developed in Cycle 6 Refer to the natural gas portfolio, Table 2, for a full
NEEA has advanced three new electric depiction of present opportunities for natural gas
programs so far in Cycle 6 (High-Performance efficiency.
HVAC, Advanced Heat Pumps and Extended
Motor Products). These programs are very early
in maturity, which means that despite NEEA's Figure 4: MM Therms Co-Created Savings
confidence in the total energy savings potential, Estimate (2025-2029)
the specific timing of when those savings will be
recognized through work in the market remains Forecast of MM Therm Savings for
in flux. Those savings, shown in the green bars Cycle 7 Market Transformation Portfolio
on the previous page, will be refined as the
program strategy advances.
17
• New Emerging Technology for Cycle 7
Energy savings from both current and previous
investments begins to drop off by 2035. This
places considerable emphasis on both the
need for continued investment in emerging
technology and to advance new programs into
the portfolio to ensure future continuity of energy 6
savings for the region. This need is particularly
pivotal given the current and anticipated future
pressures on the energy system described in p
NEEA's 2025-2029 Strategic Plan. Any new Total
investments made after 2029, or any new codes
or standards that may go into effect after that
time, are not included in the Cycle 8 forecast.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Appendix 73

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
CvCIP 7
>� Appendix V — Glossary of Key Terms
NEEA's Board of Directors has defined the Complementary Approach
following set of key terms in the context of the The alliance supports utilities' local program
2025-2029 Strategic and Business Planning activities and, in turn, local program activities
process: support regional work. NEEA recognizes the
importance of the utility-customer relationship
Alliance and focuses on 1) efforts that reduce and/or
The regional Market Transformation collaboration, remove market barriers, primarily upstream and
including staff and activities of all organizations midstream, and 2) on the readiness of the market
that fund NEEA, as well as the direct efforts and to permanently adopt energy-efficient products,
staff of NEEA. practices and services at the best overall value.
Baseline Savings Decarbonization
Energy savings from market growth and change The reduction or elimination of carbon dioxide
that would naturally occur without any market emissions.
intervention on behalf of efficiency, including
interventions funded by any utility, NEEA, Energy Efficiency or Energy and Capacity Savings
Bonneville Power Administration (BPA) and Energy The reduction of energy consumption (kWh) and/
Trust of Oregon. or the reduction of demand (kW) on the customer
side of the meter.
Basic Research
Generally the first step in research and Funder
development, this systematic study is aimed at An organization that provides money to achieve
gaining better understanding of the fundamental NEEA's mission.
aspects of a concept or a phenomenon, without
directed applications toward products. For Direct Funder
example, National Labs conduct this type of A utility or Public Benefits Administrator that
directly funds NEEA under the terms of the
research.
Business Plan.
Business Plan
Builds on the Strategic Plan and serves as a Indirect Funder
funder prospectus that outlines value delivery A Preference Customer of BPA who is not a
activities and resources required to achieve direct funder to NEEA, or who is an investor-
performance metrics. The Five-year Business Plan owned utility that funds NEEA through Energy
includes performance metrics (i.e., energy savings Trust of Oregon.
estimates) and budget guidelines. The Business Funder Coordination Plan
Plan is reviewed on an annual basis to ensure A framework to help alliance programs identify
NEEA is pursuing an optimal portfolio and that specific activities that require close coordination
other pursuits remain consistent with the Purpose. with funders to better leverage one another's work
Co-Created Savings and minimize potential overlap throughout the
All energy savings above baseline that occur in Initiative Lifecycle process.
the market due to the combined efforts of utilities,
NEEA and other actors.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Appendix 74

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Infrastructure Net Market Effects
An integrated set of resources that NEEA helps Energy savings associated with market change that
develop to support utilities and the market in are not counted as Baseline or Local Programs
building market capability, awareness and demand Savings. It is a derived calculation of all other
for energy-efficient products and practices. changes in the market that are not counted
Infrastructure provides resources that funders through Baseline or Local Programs Savings, but
and market partners can leverage to address that the alliance is able to track through its ability
market barriers and support long-term Market to estimate Total Regional Savings.
Transformation across multiple markets and
programs. Northwest Energy Efficiency Alliance (NEEA)
The organization and staff employed by the
Load Flexibility organization to facilitate Market Transformation
The ability to shape the demand curve in real-time activities in service to the region.
and shift energy usage to off-peak times.
NEEA Staff
Local Programs Savings Those employed by the organization to facilitate
Energy savings counted through BPA, the Energy Market Transformation activities in service to the
Trust of Oregon and local utilities. NEEA estimates region.
and forecasts these values by annually surveying
these stakeholders about their local programs. Northwest Region (the region)
The four states: Idaho, Montana, Oregon and
Market Transformation Washington, and parts of California, Nevada and
The strategic process of intervening in a market Wyoming that receive electric utility services
to create lasting change in market behavior by through Preference Customers of BPA.
removing identified barriers and/or exploiting
opportunities to accelerate the adoption of all cost- Operational Efficiency
effective energy efficiency as a matter of standard The ratio of service realized (i.e., work performed)
to energy/resources expended.
practice.
Markets Operations Plan
These are actual or virtual places where forces The detailed annual plan and budget based on the
of demand and supply operate, and where five-year Business Plan. The Board of Directors
buyers and sellers interact (directly or through approves the annual Operations Plan, which links
intermediaries)to trade goods, services, contracts key strategies to specific initiatives, performance
or instruments, for money or barter. The Business metrics and milestones, and provides input to
Plan identifies the specific markets in which NEEA management systems to ensure delivery of the
sees a long-term opportunity to help the region annual goals and objectives.
achieve energy efficiency goals through Market Portfolio
Transformation work and regional leverage. The grouping of all Market Transformation
Montana investments, including scanning energy-efficient
As referenced in NEEA's Business and Strategic emerging technologies, concept-, product-and
Plans, Montana represents Western Montana to market-testing, market development, evaluation,
75 East of the Continental Divide, encompassing long-term market tracking activities, and ultimately
NorthWestern Energy and several public utilities code and standard adoption.
served by Bonneville Power Administration.
Exhibit A-Cycle 7 Core Funding Agreement NEEA 2025-2029 Business Plan—Appendix 75

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Prioritization • upstream channel
As in the "prioritized Portfolio of initiatives," Entities that are typically at least two steps
prioritization is determined by the Board in removed from the end user, decision-maker,
the Operations Plans and by consensus of the or consumer. For example, these may be
Regional Portfolio Advisory Committee (RPAC), manufacturers, standards bodies, national
who the Board has chartered to prioritize and energy efficiency organizations, code officials,
advance Market Transformation programs through regulatory agencies (e.g., national agencies such
the Initiative Lifecycle process using established as U.S. EPA or U.S. DOE, as opposed to utility
portfolio criteria. regulators), and distributors.
Regional Distribution of Value (portfolio criteria) • midstream channel
This is the balance the portfolio of work to Entities that are typically in direct contact with
deliver value equitably across the region, with a the end user, decision-maker, or consumer.
recognition of the needs of stakeholders in all four For example, these may be trade allies or
states and in both rural and urban settings. This contractors, retailers, architects and engineers.
requires addressing and balancing the needs of
both large and small utilities and other energy downstream channel
efficiency organizations. The balance will include The end user or their agent, or the consumer of
a mix of regionwide and limited geographic a technology or approach.
opportunities, and operational differences, such Total Regional Savings
as the rate of Market Transformation and product Energy savings associated with all market changes.
adoption across the region. Total Regional Savings represent the trackable
Strategic Plan adoption in the market of the efficient product or
The Strategic Plan identifies long-term goals service. Note, this only captures first-year savings.
and objectives determined to be in NEEA's best Voluntary Industry Standard
interests, along with strategies for reaching each
goal and objective. The Plan defines NEEA's Equipment specifications that are agreed to by
Mission, Purpose, guiding principles, strategic all, or a significant share, of manufacturers. This
goals and key strategies. The Strategic Plan is a ' agreement enables or enhances an increased
roadmap for achieving NEEA's vision. level of energy efficiency or reliability(e.g.,
communication standards to facilitate equipment
Supply Chain self-reporting and/or control).
A system of organizations, people, activities,
information and resources involved in making
and moving a product or service from supplier to
customer.
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® Bonneville NATURAL I Clark A_ NorthNllf
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Exhibit A-Cycle 7 Core Funding Agreement

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Exhibit B Cycle 7 Core Funding
Agreement
Cycle 7 Core Funding Schedule
Northwest Energy Efficiency Alliance Core Funding Agreement
Part A—Cycle 7 Core Funding Commitments by Direct Funders'
2025-2029 2025-2029 2025-2029
2025-2029 2025-2029
Gas Electric Electric
Direct Funders Gas Funding Total Funding
Funding Funding Funding
Amount Amount
Share Share Amount
Avista Corporation ° °
(Washington only) 7.81/o $2,758,453 3.63/o $7,695,690 $10,454,143
Avista Corporation 3.82% $1,350,048 2.18% $4,627,723 $5,977,771
(Idaho only)
Benton Public
Utility District X X 0.13% $269,300 $269,300
Bonneville Power X X 36.48% $77,254,688 $77,254,688
Administration
Cascade Natural
Gas Corporation 9.62% $3,397,503 X X $3,397,503
(Washington only)
Public Utility
District No. 1 of
X X 1.02% $2,169,176 $2,169,176
Chelan County,
Washington
Clark Public X X 1.44% $3,059,722 $3,059,722
Utilities
Energy Trust of 34.20% $12,076,678 20.27% $42,930,607 $55,007,285
Oregon
Idaho Power X X 9.56% $20,256,217 $20,256,217
Company
'Pursuant to NEEA's Bylaws,and whether or not listed above,a"Direct Funder"refers to electric and gas,public
or investor-owned utilities,Bonneville Power Administration, energy efficiency administrators, and the like that
have committed to fully fund their share of NEEA's 5-year Business Plan's Cycle 7 Core Funding activities
consistent with Board approved NEEA Funding Mechanism Policies,which determine the financial contribution
required by each Direct Funder;not including funders paying such funds exclusively through other Direct Funders.
See NEEA Bylaws,Art. II, Section(b)-(d).
Exhibit B Cycle 7 Core Funding Agreement
NEEA Agreement No. 52744

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
2025-2029 2025-2029 2025-2029
2025-2029 2025-2029
Gas Electric Electric
Direct Funders Gas Funding Total Funding
Funding Funding Funding
Amount Amount
Share Share Amount
Northwest Natural
Gas Company 3.41% $1,206,022 X X $1,206,022
(Washington only)
Northwestern
Corporation, dba
X X 4.10% $8,682,021 $8,682,021
Northwestern
Energy
PacifiCorp X X 2.56% $5,415,032 $5,415,032
(Washington only)
Puget Sound 41.14% $14,527,295 13.75% $29,120,471 $43,647,766
Energy,Inc.
City of Seattle,
acting by and
through its Seattle X X 3.26% $6,909,665 $6,909,665
City Light
Department
Public Utility
District No. 1 of X X 0.66% $1,402,241 $1,402,241
Snohomish County
City of Tacoma,
Department of
Public Utilities, X X 0.95% $2,007,446 $2,007,446
Light Division,dba
Tacoma Power
TOTAL CYCLE 7 100% $35,316,000 100% $211,800,000 $247,116,000'
CORE FUNDING
Funder's agreed 2025-2029 Gas,Electric, and Total Funding Amount(s),in US dollars,will not be
affected by any changes in any other Direct Funders' anticipated 2025-2029 Funding Amount(s)and
Funding Share(s) as set forth in Exhibit B,or otherwise. In the event that NEEA's Cycle 7 Core Funding
is subsequently adjusted for any reason during the Term of this Agreement,Funder's agreed 2025-2029
Gas,Electric, and Total Funding Amount(s)will not be recalculated or and adjusted.NEEA will however
notify Funder in writing of any actual changes to total Cycle 7 Core Funding within thirty(30)days of
any change and internally adjust,reflect, and report Funder's adjusted Gas or Electric Share(s)pursuant to
this Agreement without need to amend Exhibit B. Funder may request reimbursement for self-delivered
z Funding amounts are rounded to the nearest dollar for both gas and electric cycle budget allocation.
Exhibit B Cycle 7 Core Funding Agreement
NEEA Agreement No. 52744

Docusign Envelope ID:940F7F73-9DA4-4C62-874E-FBE95lC3C89E
Downstream Marketing' activities in accordance with the"Principles for Downstream Marketing
Activities"contained in Appendix I to Exhibit A.
Part B—Invoice and Payment Schedule
1. Incurred Expense Invoice.NEEA shall provide Funder with an invoice of NEEA's estimated
expenses for Q1-2025 on December 1, 2024. Funder will pay invoice within thirty(30)days of
receipt. Subsequently,NEEA will provide quarterly invoices for the duration of the Agreement Term,
not less than thirty(30)days prior to the beginning of each quarter,with payment due the 1st of each
quarter.
2. Expense Reconciliation. Reconciliation between the estimated expenditures and the actual
expenditures will be completed thirty(30)days after the quarter end,with the exception of year-end,
which will be provided as a draft by January 3 Pt of each year and a final reconciliation by March V.
A true-up of any variance from the estimate will be included in the next quarterly invoice prepared. If
NEEA has not expended Funder's entire portion of its Cycle 7 Core Funding amount at the end of this
funding Cycle,billings will be reduced, or funds will be credited to a future funding agreement.
Part C—Contact Information
Invoices should be sent to:
Organization: Idaho Power Company
Address: PO Box 70
Boise,ID 83707
Phone: [phone]
Invoices should be addressed to:
Employee Name& Title: Dahl Bietz, Senior Financial Analyst-Business Unit Controller
Employee Email: [e-mail]
Employee Name& Title: Billie McWinn,Energy Efficiency Program&Customer Analysis Leader
Customer Operations
Employee Email: [e-mail]
'Downstream Marketing is defined in Appendix I to Exhibit A.
Exhibit B Cycle 7 Core Funding Agreement
NEEA Agreement No. 52744