20260909Attachment 1 - Evaluation of Commercial Water Heater Measure Options.pdf

ATTACHMENT I
CASE No.INT-G-26-05
INTERMOUNTAIN GAS COMPANY
EVALUATION OF COMMERCIAL WATER HEATER MEASURE OPTIONS

1"<1>__1 Energy
INTERMOUNTAIN'
CAS COMPANYQ Efficiency
ASubsitliaryal MUUResaulces Cl¢ep Im.'.
Evaluation of Commercial Water Heater Measure Options for the IGC Technical
Reference Manual
Purpose
This memorandum summarizes the options considered for development of deemed
savings values for commercial water heater measures in Intermountain Gas Company's
("IGC"or"Company")Technical Reference Manual("TRM"). It is intended to document the
analytical considerations reviewed, the relative advantages and limitations of each option,
and the basis for the recommended approach.
Background
In evaluating the commercial water heater measures, the Company considered whether
the underlying savings analysis should be based on an Idaho-only dataset or a broader
regional dataset, and whether deemed savings should be structured as a single average
value, a tiered value, or a capacity-based value. These questions were evaluated with an
emphasis on representativeness, precision, implementation practicality, and regulatory
defensibility.
Representativeness of the Idaho Sample
One question considered was whether the 94 Idaho records available from the NEEA
Commercial Building Stock Assessment ("CBSA") provide a sufficiently representative
basis for estimating savings for IGC's commercial customer population.
The review concluded that the Idaho CBSA records are a reasonable basis for the analysis.
According to pages 11 and 12 of the 2019 CBSA Final Report, the CBSA was designed to
provide a regionally representative sample of commercial buildings based on a cataloguing
of commercial buildings across the region. The CBSA development process also included
input from a group of statisticians who reviewed the sample design, case weighting
methods, and final weights. On that basis, the Idaho sample was determined to be a
reasonable proxy for Idaho's commercial water heater population. Assuming IGC's
commercial customer base is generally similar to Idaho's broader commercial building
stock, the Idaho subset provides an appropriate foundation for water heater savings
estimation.

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INTERMOUNTAIN'
CAS COMPANYQ Efficiency
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Geographic Scope Options Considered
Option 1: Idaho-Only Analysis
Under this option, the deemed savings analysis would rely solely on the Idaho-specific
records within the CBSA dataset.
Advantages considered:
• Most directly aligned with IGC's service territory and customer population.
• Avoids introducing building stock or climate differences from neighboring states.
• Provides a straightforward and jurisdiction-specific basis for analysis.
Limitations considered:
• The principal limitation is the relatively small sample size.
Despite the smaller sample, this option was viewed favorably because it is more closely
tailored to Idaho conditions and avoids the need to defend the inclusion of external
geographies that may not be as comparable.
Option 2: Expanded Geography
The Company also considered whether to expand the dataset to include additional
geographies, particularly Montana, given that Montana shares one of Idaho's climate
zones.
Advantages considered:
• A larger geography could increase sample size modestly.
Limitations considered:
• Montana would add only 73 customers, which was not viewed as a large enough
increase to materially improve the analysis.
• Broader regional expansion could raise questions regarding comparability of
climate, market conditions, and commercial building stock.
• Inclusion of Oregon or Washington was not viewed as advisable because those
states present different climatic and market conditions.
After review, an Idaho-only analysis was considered the more appropriate and defensible
geographic basis.

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INTERMOUNTAIN'
CAS COMPANYQ Efficiency
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Measure Structure Options Considered
The Company also considered three potential approaches for structuring deemed savings
values: (1) single average values, (2)tiered values, and (3) capacity-based values.
These options can be viewed on a continuum from simplicity to precision. A single average
approach represents the simplest end of the spectrum, while a capacity-based approach
represents a more differentiated and equipment-specific methodology.
Option 1: Single Average Savings Value
Under a single average approach, one deemed savings value would be applied broadly
across qualifying installations.
Advantages considered:
• Simple to administer.
• Minimal data collection requirements.
• Straightforward for rebate validation and savings assignment.
Limitations considered:
• May reduce precision.
• May not fully reflect differences in installed equipment characteristics.
• Can be less adaptable if customer or equipment distributions change overtime.
This option offers administrative ease, but its simplicity may come at the expense of
accuracy and representativeness.
Option 2: Tiered Savings Values
Under a tiered approach, savings values would vary across a limited number of predefined
categories.
Advantages considered:
• Provides more differentiation than a single average value.
• Can improve precision while maintaining relatively manageable implementation
requirements.
Limitations considered:
• Requires more data collection and verification than a single average approach.
• Still may not fully reflect variation in actual installed equipment.

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INTERMOUNTAIN'
CAS COMPANYQ Efficiency
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This option was viewed as an intermediate alternative, offering some improvement in
accuracy while stopping short of a fully equipment-specific framework.
Option 3: Capacity-Based Savings Values
Under a capacity-based approach, savings would be tied directly to the input capacity of
the installed equipment.
Advantages considered:
• Most likely to improve the precision and accuracy of deemed savings estimates.
• Better aligns savings values with the equipment actually installed by customers.
• Offers flexibility and is consistent with current Regional Technical Forum ("RTF")
practice, which increasingly relies on differentiated methodologies based on
relevant equipment or site characteristics.
• Key inputs needed to support this approach, such as model number or AHRI
information, are often already collected by contractors.
• Input capacity can typically be verified using model number information through
AHRI directory searches and other standard equipment reference sources.
Limitations considered:
• Requires somewhat more customer- or equipment-specific information than a
single average approach.
• May introduce additional implementation steps if the required equipment data are
not consistently collected.
On balance, these implementation considerations were not viewed as significant barriers.
In fact, from an evaluation perspective, the capacity-based approach was considered
comparable in workload to the other options and may be the most straightforward
analytically.
The Company also considered whether a capacity-based treatment for water heaters
would be appropriate if other TRM measures continue to use single average deemed
savings values.This was not viewed as a barrier, provided the measure-specific rationale
for differentiation is clearly documented.

1"<1>__1 Energy
INTERMOUNTAIN'
CAS COMPANYQ Efficiency
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Plan of Action
Use an Idaho-only dataset as the basis for the commercial water heater analysis; and
adopt a capacity-based deemed savings methodology for the measure. This combination
was viewed as the most supportable because it relies on a geography that is closely aligned
with the Company's service area while also using a measure structure that better reflects
the characteristics of the equipment actually installed. A capacity-based approach also
aligns more closely with the direction of current RTF methodologies, which increasingly
distinguish savings based on relevant equipment and site parameters rather than applying
a single average value across all applications.
Conclusion
The Company considered multiple alternatives for development of deemed savings values
for commercial water heater measures, including broader geographic sampling and less
differentiated savings structures. After reviewing the tradeoffs among sample
representativeness, implementation complexity, analytical precision, and regulatory
defensibility, the preferred course of action is an Idaho-only, capacity-based approach.
This approach provides a reasonable balance of jurisdictional relevance, methodological
rigor, and practical implementation and is therefore the most defensible option for
inclusion in the TRM.