20170126Amended 2014 DSM.pdf

Avista Corp.
1411 East Mission P.O. Box 3727
Spokane. Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170
January 25, 2017
Diane Hanian, Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
Re: Case No. AVU-E-16-06
Dear Ms. Hanian:
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Enclosed for filing with the Commission is an electronic copy of A vista Corporation, doing
business as Avista Utilities' amended 2014 Idaho Annual Demand Side Management Report,
specifically Table 3-12 on page 19 has been corrected. An original and seven (7) copies are being
provided via overnight mail.
Please direct any questions on this matter to Dan Johnson, Director, Energy Efficiency at (509)
495-2807 or myself at [phone].
Sin~4 ~
C?ef or Manager, Regulatory Policy
Avista Utilities
linda. [e-mail]
509-495-4975
Enclosures
Idaho 2014 DSM Annual Report &
Cost-Effectiveness Analysis
June 12, 2015 (Amended January 24, 2017)
Table of Contents
1 Executive Summary ........................................................... 1
2 Cost-Effectiveness ............................................................ 3
2.1 Electric Cost Effectiveness Results .................................................. 4
3 Programs ............................................................................ 7
3.1 Residential ........................................................................................... 7
3.1.1 Program Changes .............................................................................. 7
3. 1. 1. 1 Residential Program New Offerings ........................................ 8
3.1.1.2 Residential Program Discontinuations ..................................... 8
3. 1. 1. 3 Residential Program Adjustments ........................................... 8
3.1.2 Residential Appliance Recycling ........................................................ 9
3.1.3 HVAC Program .................................................................................. 9
3. 1.4 Water Heat Program .......................................................................... 9
3.1 .5 ENERGY STAR HOMES ................................................................... 9
3.1 .6 Fuel Efficiency .................................................................................. 10
3.1 . 7 Residential Lighting .......................................................................... 10
3.1 .8 Shell 10
3.1.9 Opower Home Energy Reports ........................................................ 10
3.1 .10 Customer Outreach .......................................................................... 11
3.2 Low Income ....................................................................................... 17
3.2.1 Program Changes ............................................................................ 17
3.2.2 2014 Program Details ...................................................................... 17
3.3 Nonresidential ................................................................................... 22
3.3.1 Program Changes ............................................................................ 22
3. 3. 1. 1 Nonresidential Program New Offerings ................................. 22
3. 3. 1. 2 Nonresidential Program Discontinuations ............................. 23
3. 3. 1. 3 Nonresidential Program Adjustments .................................... 23
ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
3.3.2 Prescriptive Path .............................................................................. 29
3.3.3 Site Specific Path ............................................................................. 29
4 Evaluation, Measurement, and Verification (EM&V) ...... 33
4.1 Process Evaluation Summary ......................................................... 33
4.1.1 Residential Sector ............................................................................ 33
4. 1. 1. 1 Program Participation ............................................................ 33
4.1.1.2 Program Design .................................................................... 34
4.1 .1.3 Program Implementation ....................................................... 35
4. 1. 1.4 Marketing and Outreach ........................................................ 35
4 .1.2 Nonresidential Sector ....................................................................... 36
4.1.2.1 Program Management and Implementation .......................... 36
4. 1. 2. 2 Customer Feedback .............................................................. 37
4.1.2.3 Market Feedback ................................................................... 37
4. 1.2.4 Marketing and Outreach ........................................................ 37
4.1.2.5 Quality Assurance and Verification ........................................ 37
4.2 Impact Evaluation Summary ............................................................ 39
4.2.1 Recommendations ........................................................................... 39
4. 2. 1. 1 Residential Electric Programs ............................................... 39
4.2.1.2 Low Income Programs .......................................................... 40
4.2.1.3 Nonresidential Electric Programs .......................................... 42
4.2.2 Impact Evaluation Measurement Designations ................................ 44
5 Distribution Efficiency ..................................................... 46
6 Regional Market Transformation .................................... 47
7 Energy Efficiency Expenditures ..................................... 48
8 Tariff Rider Balances ....................................................... 50
9 Actual to Business Plan Comparison ............................ 51
1 O Net Cost Effectiveness Results ...................................... 53
10.1 Electric Cost Effectiveness Results ................................................ 54
Appendix A Idaho 2014 Impact Memorandum .. Error! Bookmark
not defined.
b ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
b ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
1 Executive Summary
The 2014 Demand-Side Management (DSM) Annual Report summarizes Avista Utility's (Avista)
annual energy efficiency achievements for its Idaho electric customers. These programs are
intended to deliver a cost-effective, "least-cost" resource with the funding provided through
Avista's Schedules 91 and 191 , also known as the "Tariff Rider" which is a non-bypassable
system benefit charge applied to all electric retail sales.
In 2014, Avista acquired 15,743,727 kWh (unverified gross savings) in Idaho, or 95 percent of
the 2014 Business Plan target of 16,634,550 kWh.
A summary of acquired savings by sector is provided in Table ES-1 below.
Table ES-1: 2014 Idaho Electric Energy Savings (Unverified Gross)
Segment kWh
Residential 8,896,105
Low Income 430,356
Nonresidential 6,417,265
Total 15,743,727
The above mentioned acquisition has been delivered through local energy efficiency programs
managed by the utility or third-party contractors. Avista also funds a regional market
transformation effort through the Northwest Energy Efficiency Alliance (NEEA), however,
reported electric energy savings, cost-effectiveness and other related information is specific to
local programs unless otherwise noted.
The savings indicated are unverified gross savings based on all program participants. Net-to­
gross adjustments made to the unverified gross savings for the cost-effectiveness analysis are
discussed in the Evaluation, Measurement, and Verification section of this report.
Avista judges the effectiveness of the energy efficiency portfolio based upon a number of
metrics. Two of the most commonly applied metrics are the TRC test, a benefit-to-cost test
encompassing the entire utility ratepayer population, and the PAC test, a benefit-to-cost test
1 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
from the perspective of achieving a minimization of the utility cost of delivering energy efficiency
services. Benefit-to-cost ratios in excess of 1.00 indicate that the benefits exceed the costs. In
2014, the gross TRC benefit-to-cost ratio was 1.76 and the PAC test benefit-to-cost ratios was
3.22 for the electric programs.
Nexant, Inc., in partnership with Research Into Action, (the Nexant Team) was retained as the
Company's external evaluator to independently measure and verify the portfolio energy savings
for the 2014-2015 biennium period. The energy efficiency savings and associated cost­
effectiveness results presented in this 2014 Annual Report are based on gross, unverified
savings. The 2014 savings will be evaluated by the Nexant Team in 2015 and reported as the
verified energy savings in the 2014-2015 biennium reporting .
Though the nature of this report is to look backwards on the performance of the previous year,
successes and lessons from this process are applied during the forward-looking business
planning process to inform and improve program design, including program modification and
termination where necessary. Avista remains committed to continuing to deliver responsible
and cost-effective energy efficiency programs to our customers.
2 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
2 Cost-Effectiveness
The 2014 Demand-Side Management (DSM) Annual Report summarizes the Company's annual
energy efficiency achievements of its DSM programs.
Cost-effectiveness was reviewed using four of the five California Standard Practice Tests
including the Total Resource Cost (TRC), Program Administrator Cost (PAC), Participant, and
Rate Impact Measure (RIM) tests. For this annual report, cost-effectiveness of DSM programs
is based on unverified gross savings and methods consistent with those laid out in the California
Standard Practice Manual for Economic Analysis of Demand-Side Programs and Projects as
modified by the Council. Shown below in Table 2-2 through Table 2-5 are results for these four
California Standard Practice Tests -Total Resource Cost, Program Administrator Cost,
Participant, and Rate Impact Measure for electric and natural gas. Table 2-1 summarizes the
allocation of cost-effectiveness components as a cost or benefit to each cost-effectiveness test.
Table 2-1: Cost-Effectiveness Component Inputs
I Program I Total I Participant I Rate
Component Administrator Resource Cost Test Impact
Cost Test Cost Measure
(PACT) (TRC) (PCT) (RIM)
Utility Energy & Capacity Avoided Costs Benefit Benefit Benefit
Non-Utility Energy & Capacity Energy Costs Benefit Benefit
Non-Energy Benefit Impacts Benefit Benefit
Incremental Equipment and Installation Costs Cost Cost
Program Non-incentive (admin) Costs Cost Cost Cost
Incentive Payments Cost Benefit Cost
The cost-effectiveness calculations only include non-energy benefits where the values are
reasonably defensible and quantifiable for a limited number of measures, including water
savings, equipment replacement and operation and maintenance benefits. The calculations
also include health and human safety non-energy benefits (dollar for dollar) for the low-income
programs. Non energy benefits not included, because they are not easily quantifiable, include
benefits for arrearage, health/safety/comfort, system reliability, and site specific air emissions to
name a few. The evaluation team will include survey and on-site questions of participating
customers to determine specific and demonstrable non-energy benefits as found and as
applicable.
3 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Cost effectiveness results within this report are based on unverified savings. Energy savings
reported by Avista's implementation team (both external and internal to Avista) were reviewed
by the Company's external evaluator, but savings were not evaluated for the 2014 programs.
The external evaluator will verify the 2014 and 2015 portfolio energy savings and verified
savings will be reported for the biennial period. The savings estimates represent gross energy
acquisition except as noted in section 4.2 of this report.
In summary, electric gross TRC is 1.76. Electric PAC test benefit-cost ratio is 3.22. Table 2-2
through Table 2-5 illustrates electric cost-effectiveness. Regular income includes all programs
offered in the residential and non-residential sectors (not including NEEA) and low-income
includes all programs offered in the low-income sector.
2.1 Electric Cost Effectiveness Results
4
Table 2-2: 2014 ID Electric Total Resource Cost (TRC) (Gross)
Regular Income Low Income O 11 p rtf 1.
Portfolio Portfolio vera O O 10
Electric Avoided Costs $13,714,278 $392,989 $14,107,267
Natural Gas Avoided Costs -$830,920 -$51 ,998 -$882,918
Non-Energy Benefits $85,165 $589,428 $674,593
TRC Benefits $12,968,523 $930,418 $13,898,941
Non-Incentive Utility Costs $1,724,418 $138,855 $1 ,863,273
Customer Costs $5,426,436 $627,690 $6,054,126
TRC Costs $7,150,854 $766,545 $7,917,399
TRC Ratio 1.81 1.21 1.76
Residual* TRC Benefits $5,817,669 $163,873 $5,981,542
*The "Residual TRC" is used to denote the difference between TRC benefits and costs. The term "Residual"
is used in lieu of the term "Net" as not to be confused with TRC benefits and costs where Net to Gross
adjustments have been applied.
ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Table 2-3: 2014 ID Electric Program Administrator Cost (PAC) (Gross)
Natural Gas Avoided Costs -$830,920 -$51,998 -$882,918
PAC Benefits $12,883,358 $340,991 $13,224,349
Non-Incentive Utility Costs $1 ,724,418 $138,855 $1,863,273
Incentive Costs $1 ,542,618 $700,170 $2,242,788
PAC Costs $3,267,036 $839,024 $4,106,060
PAC Ratio 3.94 0.41 3.22
Net PAC Benefits $9,616,322 -$498,034 $9,118,288
Table 2-4: 2014 ID Electric Participant Cost (PCT) (Gross)
Regular Income Low Income O 11 p tf 1-
Portfolio Portfolio vera or O 10
Electric Bill Reduction $17,185,155 $654,626 $17,839,781
Gas Bill Reduction -$11,257 -$2,680 -$13,937
Non-Energy Benefits $85,165 $589,428 $674,593
Participant Benefits $17,259,063 $1,241,373 $18,500,437
Customer Costs $5,426,436 $627,690 $6,054,126
Incentive Received -$1 ,542,618 -$700, 170 -$2,242,788
Participant Costs $3,883,818 -$72,479 $3,811,339
Participant Ratio 4.44 N/A 4.85
Net Participant Benefits $13,375,245 $1,313,853 $14,689,098
5 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Table 2-5: 2014 ID Electric Rate Impact Measure (RIM) (Gross)
Regular Income Low Income O 11 p rtf 1-
Portfolio Portfolio vera O O 10
Electric Avoided Cost $13,714,278 $392,989 $14,107,267 Savings
Non-Participant Benefits $13,714,278 $392,989 $14,107,267
Electric Revenue Loss $17,185,155 $654 ,626 $17,839,781
Non-Incentive Utility Costs $1,724,418 $138,855 $1,863,273
Customer Incentives $1,542,618 $700,170 $2,242,788
Non-Participant Costs $20,452,191 $1,493,650 $21,945,841
RIM Ratio 0.67 0.26 0.64
Net RIM Benefits -$6,737,913 -$1,100,661 -$7,838,575
6 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
3 Programs
3.1 Residential
The Company's residential portfolio is composed of several approaches to engage and
encourage customers to consider energy efficiency improvements within their home.
Prescriptive rebate programs are the main component of the portfolio, but are augmented by a
variety of other interventions. These include: upstream buy-down of low-cost lighting and water
saving measures, select distribution of low-cost lighting and weatherization materials, appliance
recycling program, a low-interest loan program, direct-install programs and a multi-faceted,
multichannel outreach and customer engagement effort.
Over $575,000 in rebates were provided directly to Idaho residential customers to offset the cost
of implementing these energy efficiency measures. All programs within the residential portfolio
contributed over 8,896 MWh in annual first-year energy savings.
3.1.1 Program Changes
Program changes were made for the 2014-2015 Biennium, including the introduction of new
programs, the discontinuation of programs and changes to eligibility or incentive levels of
existing programs. Avista communicates the majority of program changes once the Business
Plan is finalized and typically makes the changes effective at the beginning of the year. Program
changes are also made throughout the year as necessary, but mid-year changes are less
typical.
For residential programs, rebate amounts were updated to reflect business planning analysis
and to include inputs such as new unit energy savings (UES) and cost values. For changes that
were effective January 1, 2014, Avista continued to accept rebate applications and honored
incentive amounts through March 31 , 2014 for 2013 measures (the 90 days allowed for a
smooth transition when rebate programs change, allowing enough time for customers in the
pipeline to complete their projects, yet closed out changes in a timely but balanced approach).
The following outlines additions, adjustments and discontinuations of residential programs and
incentive levels beginning in 2014:
7 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
3.1.1.1 Residential Program New Offerings
The following measures were added to the residential program offering beginning January 2014:
• In October 2014 Avista launched a smart thermostat program that offered customers
installing qualifying wifi-enabled models either a $50 rebate for do-it-yourself installation
or $100 for contractor installed devices.
• Windows offered at $4.00 per square foot (replacement of single or double pane to U­
factor of 0.30 or lower).
3.1.1.2 Residential Program Discontinuations
The following measures and/or programs were discontinued from the residential portfolio:
• High Efficiency Air Source Heat Pumps were discontinued in January 2014.
3.1.1.3 Residential Program Adjustments
The following adjustments in program requirements and/or incentives levels were made to the
residential programs beginning January 2014:
• High Efficiency Electric Water Heater decreased from $30 to $20
• Electric to Natural Gas Furnace Conversion increased from $750 to $900
• Electric to Natural Gas Water Heater Conversion increased from $200 to $300
• Attic Insulation decreased from $0.25 per square foot to $0.15 per square foot (Existing
insulation R-value changes from R-12 or less to R-19 or less to be eligible)
• Wall Insulation decreased from $0.50 per square foot to $0.25 per square foot
• Floor Insulation decreased from $0.50 per square foot to $0.20 per square foot
• Electric or electric and natural gas Energy Star® Home, Stick Built from $650 to $1,000
• Electric or electric and natural gas Energy Star®/Eco-Rated Home, Manufactured from
$650 to $800
• Electric to Natural Gas Furnace Conversion increased from $900 to $2,300 (increased
on September 16, 2014 due to Fuel Efficiency Tariff Change)
• Electric to Natural Gas Water Heater Conversion increased from $300 to $600
(increased on September 16, 2014 due to Fuel Efficiency Tariff Change)
• Combination Electric to Natural Gas Space and Water Heat increased from $1,200 to
$3,200 (increased on September 16, 2014 due to Fuel Efficiency Tariff Change)
8 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
The remaining sub-sections outline each residential program offered in 2014 and the unverified
participation, incentives, energy savings, among other program achievements.
3.1.2 Residential Appliance Recycling
Avista has partnered with JACO, one of the nation's leading appliance recyclers, to provide
third-party administration of the refrigerator/freezer appliance recycling program. Customers
received $30 per appliance for participating which equated to $8, 130 in incentives. This
appliance recycling program resulted in over 118 MWh in annual first-year savings in 2014 (see
Table 3-1).
3.1.3 HVAC Program
Electric customers with electric home heat are eligible for a rebate for the installation of a
variable speed motor on their forced air heating equipment ($100 rebate), or a conversion of
electric straight resistance space heat to an air source heat pump ($900 rebate). This program
achieved over 441 MWh in first-year savings in 2014 and customers received a total of $83,758
in incentives (see Table 3-2).
3.1.4 Water Heat Program
The Water Heat Program offers a $20 incentive for a high efficiency electric water heater (0.93
Energy Factor), and $7 buydown for Simple Steps, Smart Savings showerheads (reflected in
point of purchase price). Savings from free showerheads installed via the Shell program
( described below) are also tallied under Water Heat. The Water Heat Program achieved 184
MWh in first-year savings in 2014 (see Table 3-3). $10,525 was paid in incentives for this
program.
3.1.5 ENERGY STAR HOMES
Avista customers with a certified ENERGY STAR Home or ENERGY STAR/ ECORated
Manufactured Home are eligible for a $1,000 or $800 rebate, respectively. Eligible homes must
be all electric to qualify for these rebate levels. Alternatively, customers who subscribe to Avista
electric service for lighting and appliances and natural gas service for space and water heating
are eligible for a program rebate of $650 regardless of construction type. Avista achieved 27
MWh savings in 2014 (see Table 3-4). A total of $2,790 was paid out in incentives for this
program.
9 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
3.1.6 Fuel Efficiency
This program offers incentives for converting existing straight resistance electric space heat to a
natural gas furnace ($900 rebate); and/or converting their existing electric water heater to a
natural gas water heater ($300 rebate). This program achieved 633 MWh in first-year savings in
2014 (see Table 3-5), with customers receiving $120,100 in paid incentives.
3.1. 7 Residential Lighting
Avista continues to participate in the regional manufacturer buy-down of CFL twists, specialty
bulbs, LED bulbs , and showerheads through Northwest Energy Efficiency Alliance (NEEA) and
its contactor. The bulbs resulted in 4,760 MWh in annual first-year savings during 2014 (see
Table 3-6). The showerhead savings are tallied under Avista's Water Heat program. The
Company contributed over $280,260 in incentives toward this buydown effort.
3.1.8 Shell
The primary measures included wall, attic, and floor insulation and window replacements. In
2014, the Shell Program acquired 446 MWh in first-year energy savings (see Table 3-7).
3.1.9 Opower Home Energy Reports
Avista launched a Home Energy Reports program in June 2013, targeting 25,200 Idaho high
use electric customers. Eligibility for treatment includes several criteria such as sufficient (2
year) billing history, enough peers to build comparison group, not in the control group, not a 'do
not solicit' customer and high enough electric use to be cost-effectively treated , which produced
a treatment group with an average over 18,000 kWh and the lowest use customers in the group
were over 8,000 kWh annual. In an effort to reduce energy usage through behavioral changes,
Home Energy Reports show personalized usage insights and energy saving tips. Customers
also see a ranking of similar homes, comparison to themselves and a personal savings goal on
the Reports. In addition to closely matching usage curves, the similar home comparisons are
also based on the following four criteria, square footage, home type, heat type and proximity.
As shown in Table 3-8 initial participating customer counts began at higher counts than the
program targets to account for Opt-Outs and Attrition. Customers have the choice of receiving
the reports and can opt-out at any time. Attrition results in customers closing their Avista
account and therefore no longer being counted in the Program. Opower's reported energy
savings results (fixed-effects model as reported by OPower) in Idaho are 2,283 MWh (see Table
3-9).
10 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
3.1.10 Customer Outreach
Avista's DSM programs encourage the customer to take action through participation in currently
available programs. Energy efficiency outreach efforts are varied and usually are a combination
of both broad reach and targeted media, online, print and attendance at local community events.
In 2014, Avista's residential outreach included the repeat of popular broad reach media
promotions "Efficiency Matters" and "Home Energy Advisor". A bill insert in the early spring
offered to tips to manage energy use and a link to rebate offerings.
Idaho customers could tune into a radio segment called "House to Home" ; each quarter it
featured an Avista energy engineer discussing energy efficiency information based on the
season and related topics. Web searches for key words such as "gas conversion" or "rebates"
resulted in a banner ad for Avista and a link to avistautilities.com. As opportunities arise, energy
efficiency tips are provided to local media outlets. Typical topics include winter weather and
summer heat energy efficiency tips. Avista provides updates to area vendors about program
information through mailings and webinars who in turn pass that information on to their
customers.
These are the highlights of specific activities that are reinforced and compliment the ongoing
outreach and messaging through the website , customer service reps, printed rebate forms,
trainings, sponsorships, etc. As noted in further detail in the Low Income outreach and while we
target low income customers, our energy fairs are open to all customers.
11 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Table 3-1: 2014 ID Residential Appliance Recycling Summary1
P · kWh A .d d Therms Non-Customer Non-roiect . vo1 e . Measure C Incentives kWh Therms C Avoided energy Incremental incentive aunt osts Costs Benefits Costs Utility Costs
Refrigerator 207 $6,210 87,768 $24,081 $0 $0 $6,210 $6,591
Freezer 64 $1 ,920 30,592 $8,845 $0 $0 $1 ,920 $2,421
Total 271 $8,130 118,360 $32,926 $0 $0 $8,130 $9,012
Table 3-2: 2014 ID Electric HVAC Program Summary1
Non-
p . t kWh Therms Non-Customer . . roiec . . . incentive Measure C Incentives kWh Therms Avoided Avoided energy Incremental aunt Utility Costs Costs Benefits Costs C osts
E Thermostat WA/ID DIY ., I $50 961 -$559 I $0 $0 I $264 $153
I I X E Air Source Heat Pump 15 I $1 ,308 5,055 -$3,755 I $0 $0 $44,158 $1 ,028 !
E Electric To Air Source Heat Pump 68 I $61 ,200 341 ,556 -$253,717 J $0 $0 $360,574 $69,442
E Variable Speed Motor 211 I $21 ,100 I 93,068 -I $57,211 I $0 $0 I $273,837 $15,659
E Thermostat WA/ID PD Install 1 I $100 ! 961 -$559 I $0 $0 $445 $153 !
Total 296 I $83,758 J 441,so1 -$31s.ao1 I $0 $0 $679,278 $86,434
Table 3-3: 2014 ID Electric Water Heat Program Summary1
1 All kWh values reported in this table are gross, excluding the effect of applicable NTG ratios.
12 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Non-
p . kWh Therms Non-Customer . . roiect . . . incentive Measure C Incentives kWh Therms Avoided Avoided energy Incremental U .
1
. ount . t11ty Costs Costs Benefits Costs C osts
Simple Steps Showerheads 1,682 $10,265 183,470 $88,254 $0 $0 $40,368 $24,155
E Electric Water Heater 13 $260 1,430 $831 $0 $0 $6,632 $227
Total 1,695 $10,525 184,900 $89,085 $0 $0 $47,000 $24,383
Table 3-4: 2014 ID ENERGY STAR Homes Electric Program Summary2
P . kWh Therms Non-Customer Non-
Measure ~oJect Incentives kWh Therms Avoided Avoided energy Incremental incentive
ount Costs Costs Benefits Costs Utility Costs
E Estar Home -Manuf, Furnace 4 $2,790 27,388 $26,750 $0 $659 $12,000 $7,322
Total 4 $2,790 27,388 $26,750 $0 $659 $12,000 $7,322
Table 3-5: 2014 ID Electric Fuel Conversion Program Summary2
Non-
p . kWh Therms Non-Customer . . roiect . . . incentive Measure C Incentives kWh Therms Avoided Avoided energy Incremental U .. ount . t1hty Costs Costs Benefits Costs C
E Electric To Natural Gas Water
Heater 17 $10,200 62,577
2 All kWh values reported in this table are gross, excluding the effect of applicable NTG ratios.
13 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
osts
(3,672) $25,156 -$116,639 $0 $35,244 $6,885
E Electric To Natural Gas Furnace 45 $103,500 540,540 (22,094) $217,302 -$701 ,806 $0 $219,972 $59,475
E Electric To Natural Gas Fur & WH 2 $6,400 30,386 (1,426) $12,215 -$45,296 $0 $10,576 $3,343
Total 64 $120,100 633,503 (27,192) $254,674 -$863,741 $0 $265,792 $69,704
Table 3-6: 2014 ID Electric Residential Lighting Program Summary2
kWh Therms Non-Customer N . . Project . . . on-incentive Measure Incentives kWh Therms Avoided Avoided energy Incremental U .1• C Count t1 1ty osts Costs Costs Benefits Costs
Simple Steps LED 53,015 $143,235 1,119,394 $449,897 $0 $0 $651 ,558 $123,137
Simple Steps CFL 206,422 $136,053 3,636,394 $1,072,864 $0 $0 $673,140 $293,642
Customer Outreach CFLs 240 $720 3,600 $1 ,041 $0 $0 $359 $285 (Residential)
Customer Outreach LEDs 84 $252 1,092 I $520 $0 $0 $1 ,032 $142 (Residential) I I I
Total 259,761 $280,260 4,760,480 I $1,s24,322 $0 $0 $1,326,090 $417,206
14 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Table 3-7: 2014 ID Electric Shell Program Summary3
Non-
p . kWh Therms Non-Customer . . roiect . . . incentive Measure C Incentives kWh Therms Avoided Avoided energy Incremental U .1. ount t11ty Costs Costs Benefits Costs C osts
E Attic Insulation With Electric Heat 21 $4,569 22,267 $20,184 $0 $742 $28,109 $5,524
E Floor Insulation With Electric Heat 6 $1 ,690 9,949 $9,018 $0 $212 $7,696 $2,468
E Wall Insulation With Electric Heat 12 $3,189 22,331 $20,242 $0 $339 $12,717 $5,540
E Window Replc From Double Pane W 80 $30,286 142,941 $129,570 $0 $0 $264,582 Elec Heat $35,463
E Window Replc From Single Pane W 67 $29,504 I 246,514 i $223,455 $0 $0 $257,323 $61,159 Elec Heat !
G Window Replc With Natural Gas Heat 1 $340 2,776 320 I $4,130 $0 $0 $1,256 $1 ,130
Total 187 $69,578 446,778 320 I $4os,s99 $0 $1,294 $571,681 $111,286
'
Table 3-8: 2014 OPower Participation Summary
P Initial Opt-outs Closed Accounts Participating State rogram P . . . C 2 Tar et articipatmg 2013 2014 2013 2014 ustomers 014
g Customers Year-End
ID 25,200 21 ,545 0.88% 1.11% 2,323 2,535 18,988
3 All kWh values reported in this table are gross, excluding the effect of applicable NTG ratios.
15 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Table 3-9: 2014 ID Electric Residential OPower Program Summary
Non-
p . kWh Therms Non-Customer . t· roJect . . . mcen 1ve Measure C Incentives kWh Therms Avoided Avoided energy Incremental U .
1
• ount t11ty Costs Costs Benefits Costs C osts
OPower Home Energy Reports 0 $0 2,283,095 $286,741 $0 $0 $244,569 $244,569
16 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
3.2 Low Income
The Company leverages one Community Action Program (CAP) agency to deliver energy
efficiency programs for the Company's low income residential customers in the Idaho service
territory. The Community Action Partnership out of Lewiston has resources to income qualify,
prioritize and treat clients homes based upon a number of characteristics. In addition to the
Company's annual funding , the agency has other monetary resources that they can leverage
when treating a home with weatherization or other energy efficiency measures. The agency
either has in-house or contractor crews to install many of the efficiency measures of the
program.
3.2.1 Program Changes
In 2014, the Company continued to reimburse Community Action Agencies for 100% of the cost
of installation for a select group of "Approved" energy efficiency measures.
New in 2014, the Company established a "Rebate List" of other energy efficiency measures.
This rebate list allows the agencies to receive funding for measures that are not as cost­
effective as those on the Approved List but are still necessary for the homes overall
functionality. The reimbursement amount is only equal to the energy value of the improvement
from the Utility perspective. This approach focuses the Agency towards installing measures that
have the greatest cost-effectiveness, from the utility perspective, but still offers an opportunity to
fund other measures if needed. To allow for additional flexibility, the agency may also choose to
utilize their Health and Safety dollars to fully fund the cost of the measures on the Rebate list.
3.2.2 2014 Program Details
Eligible efficiency improvements are similar to those offered under the traditional residential
rebate programs, as well as mirroring a variety of the same measures found on the state
program priority list. An Avista approved measure list is provided to the agencies in an attempt
to manage the cost-effectiveness of the low income program (see Table 3-10). The agencies are
given discretion to spend their allotted funds on electric efficiency improvement based on the
need of the clients The program includes improvements to insulation, infiltration, ENERGY
STAR® doors and refrigerators along with fuel conversion from electric resistance space and
water heat to natural gas. Avista's funding covers the full cost of the improvement from the
Approved Measures list.
17 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis -
Table 3-10: 2014 Low Income Program Approved Measure List
Electric Measures
• Air infiltration
• Insulation (floor and wall)
• Duct sealing
• ENERGY STAR doors
• Electric to Natural Gas Conversion
(Space and Water Heat)
• ENERGY STAR Refrigerators
• Variable speed Motor
As mentioned above, beginning in 2014 a "Rebate" list was established to allow the agencies to
receive funding for measures that are not as cost-effective as those on the Approved List but
are still necessary for the homes overall functionality. This measure list is outlined in Table 3-11 .
Table 3-11: 2014 Low Income Program Rebate Measure List
Electric Measures
• Insulation (duct and attic)
• ENERGY STAR refrigerators (for
replacement of a refrigerator that is not
fully operational)
• High efficient water heater
• Electric to air source heat pump
• Electric to natural gas water heater
• ENERGY STAR windows
• High efficiency air source heat pump
The one Idaho agency received a total funding amount of $700,000 in 2014. The annual
contract allows the agency to spend their annually allotted funds on electric efficiency measures
at their discretion, and charge a 15 percent administration fee towards the cost of each
measure. In addition , up to 15 percent of their annual funding allocation may be used towards
Health and Safety improvements in support of energy efficiency measures installed in the home.
It is at the agencies discretion whether or not to utilize their funds for health and safety and
other home repairs to ensure the habitability of the home where the energy efficiency
improvements were installed.
For the 2014 program year, Idaho income-qualified homes installed approximately 3,640
individual measures in 253 individual homes, acquiring more than 430 MWh while expending
the $700,000 thousand in Idaho contracts. Refer to Table 3-12 for details on the low income
program.
18 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
In partnership with the Company's Demand-Side Management efforts, Avista's Consumer
Affairs department conducts conservation education and outreach for the low income, senior
and vulnerable customers. The company reaches the target population through workshops,
energy fairs, mobile and general outreach. Each of these methods include demonstrations and
distribution of low-cost and no-cost materials with a focus on energy efficiency, conservation tips
and measures, and information regarding energy assistance that may be available through
agencies.
The company has recognized the following educational strategies as efficient and effective
activities for delivering the energy efficiency and conservation education and outreach:
• Energy Conservation workshops for groups of Avista customers where the primary
target audiences are seniors and low income participants.
• Energy Fairs where attendees can receive information about low cost/no cost
methods to weatherize their home; this information is provided in demonstrations and
limited samples. In addition, fair attendees can learn about billing assistance and
demonstrations of the online account and energy management tools. Community
partners that provide services to low income populations and support to increase
personal self-sufficiency are invited, at no cost, to host a booth to provide information
about their services and how to access them.
• Mobile Outreach is conducted through the Avista Energy Resource Van (ERV) where
visitors can learn about effective tips to manage their energy use, bill payment
options and community assistance resources .
• General Outreach includes bill payment options and assistance resources in senior
and low income publications. General Outreach can also be accomplished by
providing energy management information and resources at events (such as
resource fairs) and through partnerships that reach our target populations.
In 2014, in Idaho, Avista facilitated 16 workshops with 470 participants; two energy fairs that
had 550 attendees; 19 mobile outreach events touching 3,319 visitors; and 4 general outreach
partnerships and events reaching 455 individuals for a total of 4,794 senior and low income
individual touches.
In addition to the Avista led outreach, a $50,000 conservation education (ConEd) grant funded
through the DSM tariff rider was provided to the Community Action Partnership (CAP) in
Lewiston. The grant covers the costs for brochures and flyers to reach individuals seeking
energy assistance at the CAP offices and in the service area. The objectives of CAP's low
income consumer energy conservation education program include:
• Increase ConEd knowledge and awareness of low income individuals
• Build capacity for ConEd in local communities, and
• Decrease energy consumption
19 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
These objectives are achieved through low, medium and high impact strategies. These
strategies start with basic awareness building (low impact) activities through a print materials
that are available to individuals as they wait for their energy assistance appointment in CAP
offices; through this strategy 17,791 individuals were reached in 2014. Medium impact includes
workshops and participation in community events to increase individual knowledge of energy
conservation; through this strategy 2,085 individuals were reached. Finally, high impact
activities include one-on-one education with those are receiving weatherization and other
energy efficiency installations in their home, 4 individuals received this form of education;
additionally, 177 weatherization households were sent a letter that provided an analysis of their
prior year's energy use.
20 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Table 3-12: ID 2014 Electric Low-Income Measures Summary4
P . kWh Therms Non-Customer N . . roiect . . . on-incentive Measure C t Incentives kWh Therms Avoided Avoided energy Incremental U .1. C oun t1 1ty osts Costs Costs Benefits Costs*
Customer Outreach CFLs
(Low Income)
Customer Outreach LEDs
(Low Income)
E Ins -Ceil/Attic
E Ins -Duct
E Ins -Floor
E Ins -Wall
E Energy Star Windows
E Energy Star Doors
E To G Furnace Conversion
E To G H20 Conversion
E To G Heat Pump
Conversion
E Air Infiltration
Federal H&Hs
Health & Human Safety
E Duct Sealing
Total
2,977
285
25 !
8
41
11
20 i
27
47 i
38
5
54
6
53 i
43 !
3,640 i
$0 49,620
$0 3,705
$13,984 9,261
$767 524
$93,047 60,842
$45,236 11 ,020
$548 405
$23,323 8,880
$202,484 124,809 (5,989)
$90,570 44,672 (2,761)
$17,877 24,872
$84,688 29,084
$0
$104,568
$23,078 62,662
$700,170 430,356 (8,750)
$14,347 $0 $0 $4,457 $5,072
$1,764 $0 $0 $5,130 $624
$15,763 $0 $0 $12,156 $5,572
$356 $0 $0 $667 $126
$103,556 $0 $0 $80,890 $36,609
$18,757 $0 $0 $39,326 $6,631
$689 $0 $5,733 $477 $244
$15,114 $0 $34,254 $20,276 $5,343
$113,134 -$40,941 $78,000 $176,031 $39,995
$22,881 -$11,057 $25,000 $78,737 $8,089
$18,476 $0 $0 $15,542 $6,531
$21,604 $0 $0 $73,624 $7,637
$0 $0 $0 $9,408 $0
$0 $0 $446,441 $90,907 $0
$46,547 $0 $0 $20,063 $16,455
$392,989 -$51,998 $589,428 $627,690 $138,928
*Customer incremental costs are the incremental measure cost absent any incentive. Therefore, the values should not be zero for the low income program. These
incremental values are used in cost-effectiveness calculations.
4 All kWh values reported in this table are gross, excluding the effect of applicable NTG ratios.
21 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
3.3 Nonresidential
The nonresidential energy efficiency market is delivered through a combination of prescriptive
and site-specific offerings. Any measure not offered through a prescriptive program is
automatically eligible for treatment through the site-specific program, subject to the criteria for
participation in that program. Prescriptive paths for the nonresidential market are preferred for
measures that are relatively small and uniform in their energy efficiency characteristics.
In 2014, 323 prescriptive and site specific nonresidential projects were incented. Avista
contributed over $967,000 for energy efficiency upgrades in nonresidential applications.
Nonresidential programs contributed over 6,417 MWh in annual first-year energy savings. Table
3-15 and Table 3-16 provide details on the electric nonresidential programs.
3.3.1 Program Changes
Program changes made at the beginning of 2014 to the nonresidential programs include the
addition of new program offerings, discontinued programs and changes to eligibility or incentive
levels. Avista communicates the majority of program changes once the Business Plan is
finalized and those changes become effective at the beginning of the year. In addition, some
program changes are made throughout the year as necessary but these are less typical.
For nonresidential programs, rebates were updated to reflect business planning analysis to
include inputs such as new unit energy savings (UES) and cost values. Changes were effective
January 1, 2014 and Avista accepted rebate applications through March 31 , 2014 for 2013
measures and amounts. This 90 day grace period allows for a smooth transition when rebate
programs change to allow enough time for customers in the pipeline to complete their projects
yet close out changes in a timely but balanced approach.
The following sections outline additions, adjustments and discontinuations of nonresidential
programs and incentive levels beginning in 2014.
3.3.1.1 Nonresidential Program New Offerings
In 2014, Avista offered several new pilot programs as described in the Business Plan. The
timing of projects for these pilot programs is identified as follows:
• AirGuardian Pilot:
• Identification of pilot sites occurred in November 2014
• Completion of device installations at pilot sites occurred in December 2014
• Completion of data collection (pre-and post-device operation) in January 2015
• Final report submitted to Avista in February 2015
• Cascade Energy Pilot:
• The contract with the third-party implementer for this pilot was signed in February
2014 and all scoping reports were done that summer. No contracts have been
22 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
signed for Phase 2. Two customers are interested in going forward. One has
operational constraints due to the type of manufacturing processes and security
where they are still considering their option to proceed. A second company is
also still evaluating timing of the investment and operational considerations.
• Fleet Heat Pilot:
• The goal of this pilot is to determine if there are cost-effective savings without
operational issues by adding a temperature device to turn engine block heaters
on and off as appropriate during the winter season. Anecdotally the fleet
approach is often to begin using engine block heaters around the end of October
until the end of April due to potential cold temperatures. Avista delivered the
cords to a local school district in November 2014 and a local packaged food
delivery company and local freight company shortly after.
3.3.1.2 Nonresidential Program Discontinuations
The following nonresidential programs and/or measures were discontinued beginning January
2014:
• Nonresidential Hot Water Heater Program
• Standby Generator Block Heater Program
• From the Nonresidential Windows and Insulation Program new and retrofit windows
were discontinued.
• From the Nonresidential Food Service Equipment Program hot food holding carts were
discontinued.
3.3.1.3 Nonresidential Program Adjustments
The following adjustments in program requirements or incentive levels were made to the
nonresidential programs beginning January 2014:
• Nonresidential HVAC VFD Program-all applications were changed to $130 per HP
• Nonresidential Clothes Washers were increased from $75 to $100 per unit.
• Nonresidential Lighting Interior and Exterior Incentives Program Announcement: Avista
offers a variety of prescriptive incentives for Non-T12 Lighting Retrofits. In 2014, Avista
has expanded the interior and exterior incentive options which are now available on two
separate Prescriptive Commercial Lighting Incentive Agreement Forms. Please note the
lighting program changes listed in Table 3-13.
23 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Table 3-13: Nonresidential Lighting Interior and Exterior Changes
24 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Program Existing Light , Retrofit Light Old I New j Notes
Change ! Incentive I Incentive I
I
25 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Deletion 1000 watt HID 400-575 watt Digital HID fixture $400 $0 Exterior
26 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Deletion 1000 watt HID 400-470 watt LED fixture $475 $0 Exterior
27 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Program Existing Light Retrofit Light Old New I Notes
Change , Incentive Incentive :
' I
Deletion 750 watt HID 320-400 watt Digital HID fixture $300 $0 Exterior
Deletion 750 watt HID 210-240 watt LED fixture $350 $0 Exterior
Increased 400 watt HID 250 watt Digital HID fixture $150 $260 Exterior
Incentive
Modified 400 watt HID 125-175 watt LED fixture $275 $255 Exterior
Eligibility
Addition 320 watt HID 125-160 watt LED fixture $0 $180 Exterior
I
Modified 250 watt HID I 85-140 watt LED fixture I $175-200 $145 Exterior
Eligibility
Deletion 175 watt HID 40 watt Induction Fluorescent $150 $0 !Exterior
fixture
Modified 175 watt HID 35-85 watt LED fixture $175 $135 Exterior
Eligibility
Modified 150 watt HID 35-50 watt LED fixture $175 $130 Exterior
Eligibility
Modified 90-100 watt HID 25-50 watt LED fixture $100 $75 Exterior
Eligibility
Modified 70-90 watt HID 15-35 watt LED fixture $75 $55 Exterior
Eligibility
Decreased 400 watt HID 4 lamp T5 fixture $110 $105 Interior
Incentive
Deletion 400 watt HID 6 lamp High Performance TB $140 $0 Interior
Decreased 250 watt HID 4 lamp High Performance TB or 2 $55 $50 Interior
Incentive lamp T5 fixture
Varied Interior HID T5 or High Performance TB with $35-45 $30-40 Interior
Incentive occupancy sensor
Modified Over: 150 watt 2 lamp High Performance TB $40 $40 Interior
Eligibility incandescent
Modified 40 watt incandescent 6-10 watt LED lamp NIA $6 Interior
Eligibility
Modified
Eligibility
160 watt incandescent 9-13 watt LED lamp NIA $8 Interior
Modified 75 100 watt 12 20 watt LED lamp NIA $10 I Interior --
Eligibility incandescent
Addition 20 watt MR16 2-4 watt MR16 LED lamp NIA $5 Interior
Addition 35 watt MR16 4-6 watt MR16 LED lamp NIA $6 Interior
Addition
I
50 watt MR16 6-9 watt LED* lamp NIA $10 Interior
28 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
----------------------------------------------------
• Commercial Lighting Canopy LED and LED Sign Incentives Program Announcement:
Avista increased the incentives for canopy LED lighting retrofits and added the LED
Sign Lighting Program in the summer of 2014. The increased incentive amounts for
canopy lighting were added on the Exterior Prescriptive Commercial Lighting Incentive
Agreement Form. In order to qualify for this rebate , customers must meet the
requirements of replacing all the canopy fixtures; and replacing at least 4 or more
canopy LED lights which excludes LED wall packs, soffit fixtures and pole lights. The
canopy LEDs must be on one of the approved LED fixture lists. In addition, the new LED
Sign Lighting program has its own separate form and will state specific requirements in
regards to LED sign lighting qualifications. Existing signs must be T12 fluorescent
lighting and operate for at least 11.5 hours per day or 4,288 hours annually. Please note
the Program changes in Table 3-14. New measures or increased incentives took effect
July 1, 2014.
Table 3-14: Nonresidential Lighting Canopy LED and LED Sign Changes
Program Existing Light Retrofit Light Old Incentive New Notes
Change Incentive**
Increased
Increased
Incentive
400 watt HID
320 watt HID
122-175 watt LED Canopy fixture $255 $325
122-160 watt LED Canopy fixture $180 $250
Exterior
Exterior
Addition T12 Sign Exterior LED Sign Lighting Site Specific $17 per sq ft Signs only
The remaining sub-sections outline the nonresidential programs offered in 2014 and the
unverified participation, incentives, energy savings, etc for each measure offered in the
programs.
3.3.2 Prescriptive Path
Prescriptive paths do not require pre-project contracting , as the site-specific program does, and
thus lend themselves to streamlined administrative and marketing efforts. Incentives are
established for these prescriptive programs by applying the incentive formula contained within
Schedules 90 and 190 to a prototypical installation. Actual costs and savings are tracked,
reported and available to the third-party impact evaluator. When applicable, the prescriptive
measures utilize RTF unit energy savings.
3.3.3 Site Specific Path
Site specific is the most comprehensive offering of the nonresidential segment and brings in
more than a third of the nonresidential savings. Avista's Account Executives work with
nonresidential customers to provide assistance in identifying energy efficiency opportunities.
Customers receive technical assistance in determining potential energy and cost savings as
well as identifying and estimating incentives for participation. Site specific incentives, in which
the tier structure applies, are capped at seventy percent of the incremental project cost for
lighting projects with simple paybacks of less than 3 years and nonlighting projects (or lighting
29 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
projects with a verified life of 40,000 hours or more) with simple paybacks less than 5 years. All
other project incentives calculated under the tier structure will be capped at fifty percent of the
incremental project cost. Simple payback criteria for eligible projects is greater than 1 year and
less than 8 years for lighting measures or less than 13 years for non-lighting and LED lighting
measures. Site specific projects include appliances, compressed air, HVAC, industrial process,
motors (non-prescriptive), shell and lighting with the majority being HVAC, lighting and shell.
30 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Table 3-15: 2014 ID Electric Nonresidential Prescriptive Measures Summary5
Non-kWh Therms Non-Customer Incentive
Project . kWh Therms Avoided Avoided Energy Incremental Utility Measure Count Incentives Savings Savings Costs Cost Benefits Costs Costs
PSC Com Water Heater 3 $60 190 $110 $0 $0 $76 $8
PSC Commercial Windows and lnsul 5 $4,066 35,561 $28,676 $0 $0 $16,118 $2,002
PSC EnergySmart-Case Lighting 37 $99,784 518,839 $129,340 $0 $0 $147,426 $9,028
PSC EnergySmart-Industrial Proc 35 $56,923 437,212 $246,938 $0 $0 $230,612 $17,236
PSC Food Service Equipment 14 $5,151 71,236 $39,263 $0 $0 $32,984 $2,740
PSC Green Motors Rewind 18 $2,883 32,893 $13,223 $0 $0 $5,949 $923
PSC Lighting Exterior 94 $227,357 1,022,213 $523,526 $0 $56,590 $435,894 $36,541
PSC Lighting Interior I 47 $62,618 542,648 $312,206 $0 $26,622 $140,813 $21,791
PSC Motor Controls HVAC i 1 $1 ,250 15,841 $9,738 $0 $0 $3,100 $680 I
PSC Standby Generator Block 3 $1,210 7,228 $4,443 $0 $0 $4,780 $310
Total 257 $461,302 2,683,860 $1,307,465 $0 $83,212 $1,017,751 $91,259
5 All kWh values reported in this table are gross, excluding the effect of applicable NTG ratios.
31 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Table 3-16: 2014 ID Electric Nonresidential Site Specific Measures Summary6
Project . kWh Therms k'J:'h The_rms Non-Customer Non-Incentive
Measure C t Incentives S . S . Avoided Avoided Energy Incremental urn C t oun avings avings Costs Cost Benefits Costs 1 1 Y os s
SS Appliances 1 $7,817 4,092 2,598 $10,810 $9,689 $0 $15,510 $1,422
SS Compressed Air 1 $74,400 350,583 $589,472 $0 $0 $166,419 $41,144
SS HVAC Combined 10 $62,816 636,815 $3,342,934 $0 $0 $362,766 $233,331
SS Industrial Process 2 $28,422 270,682 $1,573,061 $0 $0 $54,974 $109,797
SS Lighting Exterior 18 $60,900 376,781 $505,525 $0 $0 $174,410 $35,285
SS Lighting Interior 32 $242,493 2,010,969 $3,352,571 $0 $0 $419,075 $234,003
SS Motor Controls Industrial 1 $17,716 83,483 $95,542 $0 $0 $37,954 $6,669
SS HVAC Heating 1 $11 ,611 4,834 $0 $23,133 $0 $23,037 $1 ,594
Total 66 $506,176 3,733,405 7,432 $9,469,916 $32,822 $0 $1,254,145 $663,244
6 All kWh values reported in this table are gross, excluding the effect of applicable NTG ratios.
32 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
4 Evaluation, Measurement, and
Verification (EM&V)
The Nexant Team was retained to provide impact and process evaluations for the 2014-2015
electric and natural gas programs.
The following sections outline the major recommendations from the impact and process
evaluation reports completed for the 2012-2013 portfolio of programs and notes what changes
were made to the 2014-2015 Avista programs as a result of these evaluations.
4.1 Process Evaluation Summary
Recommendations from Avista's 2012-2013 process evaluation7 report and subsequent
implementation actions taken by Avista are summarized below.
4.1.1 Residential Sector
4.1.1.1 Program Participation
Conclusion: Avista's implementation of new and continued support for existing third-party
implemented programs such as Simple Steps, Smart Savings and Residential Behavior
effectively captures energy savings in the residential market segments.
Recommendation: Continue exploring new measures, program designs, and delivery
mechanisms that leverage the national expertise of experienced third-party implementation
firms. Possible programs may include additional partnership with ENERGY STAR in the form of
the Home Performance with ENERGY STAR program.
Status: In 2014 the Company offered Energy Star rebates through NEEA as the
implementer, and distinguished between an Energy Star stick build home and a
manufactured home.
Conclusion: Avista's continued investment in pilot programs provides a low-risk way test the
effectiveness of new measure offerings, delivery channels, and implementation partners.
Recommendation: Continue testing new program designs and measure offerings through the
use of pilots-even if secondary sources of funding or local partners are not available.
7 Avista 2012-2013 Process Evaluation Report, The Cadmus Group, Inc., May 15, 2014.
33 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Status: Avista initiated 3 pilot programs in 2014, a pilot program for reducing losses in
compressed air systems called Air Guardian, a pilot program to test the efficacy of
controlling block heaters on vehicles to reduce losses, and a pilot program to perform
strategic energy management (SEM) in our industrial customers. The Company has yet
to get an industrial customer to sign up for the second phase of the SEM initiative, but
should have some preliminary results from the other two pilots by August of 2015.
Conclusion: While still early, evaluation findings indicate the Residential Behavior program is
an effective way to capture savings in the residential market and Opower is a strong partner for
program implementation.
Recommendation: If determined to be cost-effective, consider expanding the Residential
Behavior program (for example, lowering the energy consumption threshold for participation and
implementing measures to track the methods these customers use to save energy). Given that
Avista has already included all cost-effective customers in their target population for this
program, future opportunities for expansion may be limited.
Status: The Company will consider expansion of the OPower Residential Behavior
program pending 2014-2015 cost effectiveness results. Avista will take into
consideration the cost effectiveness of the program over the full program life.
4.1.1.2 Program Design
Conclusion: Inconsistencies continue to exist in measure and program naming and
organization across program planning, tracking and reporting activities which result in less
transparency in program operations and limit effective program evaluation .
Recommendation: As part of the transition to the new data tracking system , consider aligning
program and measure names with offerings articulated in annual business plans and other
planning materials.
Status: Avista's transition to a new tracking system has taken considerably longer to
accomplish than was considered at the writing of this recommendation due to a
prolonged initiation of the new customer information system. The present thought
process, at the time of this report, is that Avista will enhance the historical savings
database, Saleslogix, with tracking capabilities in the same database. As that change is
made in the 2nd and 3rd quarter of 2015, the alignment of program , measure, planning
materials and business planning will be a priority.
Conclusion: The elimination of appliance rebates gives customers fewer ways to participate in
Avista energy-efficiency rebate programs.
Recommendation: Consider ways to encourage repeat participation (such as marketing
targeted at previous participants and online profiles that reduce application paperwork).
34 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Status: The Company has noted the response of its General Population Survey which
indicated that approximately 10% of surveyed customers planned to replace HVAC
equipment in the next couple years. Avista will continue to promote these measures to
serve this demand.
Conclusion: Considering self-report customer freeridership scores and market baseline data
from the RTF is an effective way to assess the appropriateness of measure offerings.
Recommendation: Continue use of customer freeridership and market assessments as a way
to assess the appropriateness of measure offerings.
Status: Avista is employing accepted Northwest Power and Conservation Council
methodologies to the extent possible, to include the use of unit energy savings and
freeridership values as identified by the RTF. When such values are not available, Avista
will utilize the best estimate of what future third-party impact evaluation will reveal. Avista
will continue to track freeridership values for measures and programs and will consider
program changes and measure offerings in cases where market transformation has fully
occurred.
4.1.1.3 Program Implementation
Conclusion: Avista prioritization of customer satisfaction has been very successful and overall
participant experience is very positive across all rebate programs.
Recommendation: Continue Avista's commitment to customer satisfaction, but monitor
increased staffing costs and impacts of the 90-day participation window on freeridership.
Status: Avista agrees and continues to be committed to customer satisfaction. Staffing
costs are continually tracked and efforts have been made to save where possible. Avista
believes there is a long standing approach that balances customer's ability to participate
along with implementation/operational considerations. Avista typically provides 90 days for
program changes to allow for market communications and smooth transitions in and out of
programs. Avista believes the 90 day participation window is an optimal, balanced approach
considering customer equity and increasing documentation requirements.
4.1.1.4 Marketing and Outreach
Conclusion: Avista implements a strong general awareness campaign around energy­
efficiency, but some room exists in market segmentation and targeting specific customer
groups.
Recommendation: Utilize survey results from this evaluation and other data collection activities
to understand which audiences are more likely to participate in Avista programs.
35
Status: Avista appreciates the intent of this recommendation, however, due to limitations in
our customer care and billing system, the Company doesn't have a comprehensive
ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
customer relationship management tool that allows for segmentation and targeting and
campaign management. The Company does believe that a continued broad reach approach
engages new customers and further engages customers who have previously participated in
energy efficiency programs demonstrated by repeat customers. The Company has found
success in highlighting some programs but usually in the context of broader messaging that
drives customers to our website to find offerings that are available to them . The Company
has also had success in stretching our outreach efforts by building relationships with media
partners such as local television stations and personalities and weekly newspapers that
leverage and add endorsement.
4.1.2 Nonresidential Sector
4.1.2.1 Program Management and Implementation
Conclusion: Several parties over several years, internal and external to Avista, have observed
the need for greater data quality assurance, in both documentation and input tracking.
Quantitative inputs to the savings and rebate calculations have repercussions for tariff
compliance, incentive payments, and savings realization rates.
Recommendation: Avista should continue efforts to improve program processes. The
evaluation team believes unifying the organizational structure under central leadership is a step
in the right direction and may help alleviate some previously documented issues with internal
communications. In addition to the reorganization , it was recommended that Avista develop
standardized processes within the DSM group, including clear delineation of roles and precise
description and assignment of all processes and responsibilities for both residential and
nonresidential programs. All affected parties should be included in formalizing and standardizing
the DSM group's processes, roles, and responsibilities. Further, all parties must formally agree
to clearly delineated responsibilities under the new organizational structure. While these
activities need to be prescriptive and precise, we caution that the resulting structure should still
allow some flexibility: increased clarity, transparency, and accountability should serve to
enhance program delivery and customer satisfaction.
36
Status: In 2014, the Company carefully reviewed the recommendations from external
evaluators, Advisory Group and Commission Staff regarding the DSM Team
Organization. By April 2014, the Customer Solutions Team, including the Energy
Efficiency Group was reorganized and is now reporting to one Leadership individual, a
Sr. Director. In July, the Energy Efficiency Team was re-organized to report to one Sr.
Manager to include Program Managers across all three states (WA/ID/OR), Energy
Efficiency Engineering , and the Analyst Team . This reorganization has facilitated
coordination and communication by the team members in delivering successful
programs to customers. In addition, this new organizational structure included a
thorough review of the Standard Operating Practices, EM&V Framework, Duel Fuel
Incentive Calculators, and the Top Sheet Reviews. These process documents are
expected to be complete in early 2015 and made available to the Advisory Group at the
ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Spring 2015 meeting The team continues to be committed to developing, designing, and
implementing prudent cost effective programs for the Company's customers.
4.1.2.2 Customer Feedback
Conclusion: Customers were highly satisfied with the program overall and with individual
components. Customer satisfaction has increased since 2011 , which had in turn increased from
2010.
Recommendation: Continue to prioritize and monitor program satisfaction.
Status: Customer satisfaction and feedback will continue to be collected on programs
through third party evaluation efforts conducted for 2014-2015 program years.
4.1.2.3 Market Feedback
Conclusion: According to commercial lighting contractor feedback, the nonresidential programs
are successful in driving incremental energy-efficient equipment sales, and the market has not
yet transformed to make energy efficiency standard practice.
Recommendation: Continue to monitor market transformation indicators to measure programs'
market impact over time.
Status: Avista will continue monitoring signs of market transformation in the
Nonresidential sector through efforts taken by the third party evaluator.
4.1.2.4 Marketing and Outreach
Conclusion: The characteristics of the evaluation survey respondents indicate that the office I
professional services and local government sectors may be underserved by the programs
relative to their incidence in the nonparticipant population. Further research is necessary to
determine whether this is true.
Recommendation: Identify underserved industries, and seek opportunities to target outreach to
specific underserved industries such as ; investigate overall customer industry distribution,
compare to participant industry distribution, and develop targeted outreach strategies for any
underserved sectors.
Status: This will be investigated as part of the 2014-2015 process evaluation .
4.1.2.5 Quality Assurance and Verification
Conclusion: Avista monitored its site-specific project review process and instituted refinements
during the evaluation period in response to feedback from users. While this has led to
improvements, including notably improved reliability of reported savings in 2012 , quality
assurance problems may persist.
37 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Recommendation: Continue to monitor the effectiveness of the site-specific project review
process and refine as needed. The third party evaluator recommends implementing the
following to ensure continued improvement:
Status: Avista implemented the following review model on April 24, 2015 that focuses
on review guidelines based on a risk assessment:
• Measures that have an incentive of $0 and an energy based simple payback of
over 20 years require no report and no review, just a form letter to the customer.
• Measures that have incentives between $1 and $2,000 will be processed by the
reporting engineer without any other review.
• Measures that have incentives between $2001 and $25,000 will be reviewed
before going to the customer by another qualified engineer.
• Measures over $25,000 will be reviewed by another qualified engineer with an
additional technical management review prior to releasing to the customer.
• Measures over $40,000 will be reviewed by another qualified engineer, a
technical manager, and an additional director review prior to releasing to the
customer.
• Each review above will use the technical Top Sheet as a reviewing instrument
with appropriate name and review level noted.
• A completed project must be re-submitted through the technical review process
only if the incentive changes more than 10% when the savings or costs from the
original report change. The report and DFIC will always be changed and
recorded when savings or incremental costs change upon completion.
Recommendation: Conduct an external third-party review of Top Sheets, including reviewing a
random sample of completed Top Sheets for completeness and accuracy. These were not
reviewed as part of the 2012-2013 process evaluation, but should be included in the next
process evaluation. Review should not only verify the presence of the Top Sheets, but also the
quality and accuracy of the information provided.
Status: Several implementation improvements, either in-progress or recently completed,
were reviewed and their impact upon 2014 program performance was discussed by the
Avista implementation team. These improvements include:
• Revisions to the site-specific program implementation processes to improve
clarity and promote the timely movement of projects through the pipeline.
• The establishment of three checklists (or "Top Sheets"), one prior to contracting
and one prior to the payment of the incentive, in order to ensure consistent
documentation and treatment of each project as it progresses through these
processes towards completion.
38 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
4.2 Impact Evaluation Summary
Recommendations from Avista's 2013 Idaho Electric Impact evaluation8 report and subsequent
implementation actions taken by Avista are summarized below.
4.2.1 Recommendations
4.2.1.1 Residential Electric Programs
The 2013 Idaho Electric Impact evaluation recommended the following changes to Avista's
residential electric programs. Applicable updates have been included under the "status" sub
bullet.
Recommendation: Consider updating its per-unit assumptions of recycled equipment to reflect
the 2012-2013 evaluation findings in order to ensure that planning estimates of program savings
are in line with evaluated savings.
Status: Per unit energy savings for refrigerators were updated from 482 to 424 kWh,
and per unit energy savings for freezers were updated from 555 to 478.
Recommendation: If clothes washer rebates are reinstated, Avista should track them all within
the electric program unless there is a large penetration of gas dryers.
Status: Clothes washer rebates were not reinstated .
Recommendation: Increase the measure level detail captured on applications and include this
detail in the tracking database. Specific additional information should include energy factors or
model numbers, baseline information for insulation, and home square footage, particularly for
the ENERGY STAR Homes program.
Status: Energy factors and home square footage are being captured in Avista's tracking
database. Model numbers are captured on rebate applications as well as baseline
information for insulation which will likely be considered in 2016 after the new tracking
database has been stabilized. Energy Star Homes is a regional (NEEA) program that
has its own builder training, inspections, certifications and database. Avista requires
customers meet and provide proof of their Energy Star Homes certification. Avista also
collects square footage, primary space heating fuel and primary water heating fuel.
Recommendation: Consider tiered incentives by SEER rating as higher SEER systems
generally require ECM fan motors to achieve certain SEER ratings.
Status: The Air Source Heat Pump rebate is no longer offered due to not meeting cost
effectiveness requirements .
8 Avista 2013 Idaho Electric Impact Evaluation Report, The Cadmus Group, Inc., June 17, 2014.
39 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Recommendation: Avista should consider completing a lighting logger study within its territory
if Avista believes the results of the forthcoming RBSA study do not accurately represent usage
in their territory.
Status: A lighting logger study is being conducted by the Nexant Team as a part of the
2014-2015 independent third-party evaluation activities.
Recommendation: Avista should consider researching the percentage of Simple Steps, Smart
Savings bulb purchase that are installed in commercial settings. This could increase the
average installed hours of use and increase program savings.
Status: This research is being conducted by the Nexant Team during the 2014-2015
evaluation period
Recommendation: Perform a billing analysis on ENERGY STAR homes using a non­
participant comparison group once enough homes have participated under the new
requirements to justify performing the work. This research could be used to demonstrate the
achieved savings through energy efficiency construction practices.
Status: If enough homes participate during the 2014-2015 program period that allow for
a study population large enough to produce statistically significant results, this research
will be conducted by the Nexant Team during the 2014-2015 evaluation period.
Recommendation: Consider researching the current variable speed motor market activity to
determine if this measure should continue as a stand-alone rebate or be packaged with other
equipment purchases.
Status: This research is being conducted by the Nexant Team as part of the 2014-2015
evaluation.
Recommendation: Continue to promote efficiency programs in the Behavior Program energy
reports, as the reports increased both the rate of efficiency program participation and savings.
Status: Avista will continue to promote efficiency programs bi-annually on the Behavior
Program energy reports.
Recommendation: Avista should consider performing additional research about the peak­
coincident demand savings from the behavior program.
Status: This will be considered for the 2014-2015 evaluation and largely depends on the
data available and whether or not a study of peak-coincident demand savings is
applicable for planning purposes.
4.2.1.2 Low Income Programs
The 2013 Idaho Electric Impact evaluation recommended the following changes to Avista's low
income programs. Applicable updates have been included under the "status" sub bullet.
40 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Recommendation: Consider including a control/comparison group in future billing analyses.
Status: In the 2014-2015 evaluation, a billing analysis will be used to analyze energy
impacts; a comparison group approach will be used as the preferred method if sufficient
data is available.
Recommendation: Consider options for increasing the analysis sample size due to small
program populations (such as combining Washington and Idaho program participants).
Status: In the 2014-2015 evaluation, combination tactics are being utilized to increase
the analysis sample size.
Recommendation: Obtain a full list of weatherization measures from agencies.
Status: The list of weatherization measures from agencies is provided in Section 3.2 of
this report.
Recommendation: Consider targeting high-use customers.
Status: The Community Action Agencies have a priority screen that they utilize which
includes high energy use customers. Additional data mining from Avista is not possible
as the Utility does not have access to income data and as such does not presume that a
high use customer would also be eligible for low income weatherization services. The
high use customer data has been used in the past to target potential participants for the
residential behavior program along with electric to natural gas conversion opportunities.
Recommendation: Track and compile additional data from agency audits.
Status: Avista includes on the Agency billing invoice a space for type of home (e.g. stick
built or mobile) age of home, square footage of home, heating fuel and whether or not air
conditioning exists. Additional data points will be gathered as needed.
Recommendation: Consider performing quantitative, non-energy benefit analyses.
41
Status: Avista currently quantifies two primary non-energy benefits for Low Income
Programs. One is a dollar for dollar benefit related to health and human safety (H&HS)
improvements. Savings are not currently claimed applicable to H&HS but these are
improvements that protect the investment of and/or enable the energy efficiency
improvements to occur. The other is the benefit equivalent to the cost of the standard
efficient equipment benefit compared to the high efficiency equipment measure (e.g.
furnaces, water heaters, refrigerators and broken windows). For some measures, like
insulation, the incremental cost is the full cost as if the customer did not have to replace
anything and could have just left the under-insulated space untreated. For the high
efficiency improvements, Avista is making the assumption that the baseline equipment is
at or close to end of life and, is therefore a replace upon burnout situation.
ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
4.2.1.3 Nonresidential Electric Programs
The 2013 Idaho Electric Impact evaluation recommended the following changes to Avista's
nonresidential electric programs. Applicable updates have been included under the "status" sub
bullet.
Recommendation: Create a quality control system to double-check all projects with savings
over 300,000 kWh.
Status: Avista implemented the review model on April 24, 2015 as discussed in Section
4.1.2 above. Avista uses measure level evaluation because the number of measures in
a project may change, but the incentives and risks on a per measure basis will stay
consistent. Avista found the incentive levels that most closely matched the 300,000 kWh
threshold to create the risk-based strategy below as outlined.
Recommendation: Consider working with participants to accelerate the process of claiming
energy savings and paying the project incentive. Preferably this should happen within one year
of measure installation, depending on Avista's requirements for post-installation data on the
particular project.
Status: Avista continually works with participants to accelerate the process of claiming
energy savings and paying the project incentive. Balancing the level of rigor required to
make sure savings claims are as accurate as possible, appropriate documentation is
received and requirements for post installation data are achieved is part of our on-going
active management of projects. Site specific projects that are not performance based are
typically paid within weeks of invoice receipt and verification of installation. For
performance based projects, the payment timeframe is determined by the ability to
collect adequate performance data unique to the project parameters. Performance
periods are typically within one year of installation.
Recommendation: Avista may want to consider tracking and reporting demand reduction to
better understand measure load profiles and peak demand reduction opportunities.
Status: Avista is working with their Power Supply department to find the value of
demand reduction at different times for different measures. Presently the program
operates only on commodity savings. Avista already calculates and reports demand
reduction when it occurs both in custom and prescriptive measures and will continue this
process.
Recommendation: Update prescriptive measure assumptions and sources on a regular basis.
42
Status: Technical Reference Manual (TRM) updates, including prescriptive measure
assumptions, are being conducted as part of the 2014-2015 independent evaluation
activities.
ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Recommendation: Streamline its file structure to enable reviewers to more easily identify the
latest documentation.
Status: All documentation pertaining to a project is now stored in one file for each
project/opportunity. This includes; Energy Efficiency Report, DFIC, Top Sheets,
Contract, Invoices, lnstallationNerification report and copy of incentive check. A PDF file
can easily be developed to upload to external FTP sites or it can be viewed by anyone
with access to Saleslogix. Avista has changed the naming convention for projects to
account for version control.
Recommendation: Continue to perform follow-up measure confirmation and/or site visits on a
random sample of projects (at least 10%).
Status: Avista continues to perform installation verifications on all Site Specific projects
and 10% of all Prescriptive projects.
Recommendation: Consider flagging sites for additional scrutiny when the paid invoice does
not include installation labor.
Status: Avista will implement data collection concerning installation labor on the
technical Top Sheet on May 11 , 2015. While labor for some customers is a sunk cost
and will not show up in the incremental costs, for those that must have it be a part of the
incremental costs, it will be recorded and reviewed as part of the technical Top Sheet
process.
Recommendation: Avista may consider adding a flag to the tracking database to automatically
calculate the unit of energy savings per dollar (kWh/$ or therm/$) to provide a quick check to
identify extreme outliers.
Status: Avista added this metric to the lighting calculators in 2014 and this will be added
to the other calculators as they are updated in 2015.
Recommendation: In the case of redundancy, Avista may want to consider incenting pump
projects through the Site-Specific Program to more accurately characterize the equipment
operating hours.
Status: This issue has not been significant enough to change the prescriptive process
for VFD's to site specific at this time.
Recommendation: Avista may want to adopt modeling design guidelines to set minimum
standards, such as The Energy Trust of Oregon guidelines.
43
Status: Avista uses both eQUEST and Energy Plus for modeling and will design
minimum standards for modeling design for contractors and Avista DSM engineers to
use, drawing on the experience of Energy Trust and others in 2015.
ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
4.2.2 Impact Evaluation Measurement Designations
As a result of efforts and activities conducted for the 2013 portfolio evaluation, the application of
RTF unit energy savings values to measures offered through Avista's programs was defined.
The 2014-2015 portfolio evaluation will continue to apply RTF UES values for applicable
measures. Table 4-1 summarizes the evaluation and reporting methodology for gross and net
energy savings values when RTF values are applicable and in instances where there is no RTF
value to reference. The table presents the methodology applied for the 2013 evaluation and this
table will be reviewed and updated as applicable for the 2014-2015 evaluation. The Designation
column represents the identified evaluation methodology summarized by:
• RTF: Acquisition savings based on a UES value provided by the RTF library, including
consideration of the adjusted market baseline inherent in the analysis, or the acquisition
as derived by the savings calculation methodology including appropriate factors and
criteria.
• Gross: Acquisition savings without the application of a NTG factor, using a traditional
approach of code minimum or current standard practice as the evaluation baseline.
• Net: Acquisition savings resulting from the application of an evaluated survey-based net­
to-gross factor or as a fundamental net savings based on the applied analysis method.
44 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Table 4-1: 2012-2013 Impact Evaluation Methodology
Program Designation Reporting Method
Residential
Appliance Recycling RTF
CFL Contingency RTF
ENERGY STAR Products RTF
ENERGY STAR Homes RTF
Geographic CFL Giveaway RTF
Heating and Cooling Efficiency Gross
Manufactured Home Duct Sealing Gross
Residential Behavior Net
Simple Steps, Smart Savings RTF
Space and Water Conversions Gross
Weatherization and Shell Gross
Water Heating Efficiency RTF
Low Income
RTF UES with spillover
RTF methodology and inputs
RTF UES with spillover
RTF UES with spillover
RTF methodology and inputs
Billing Analysis
Direct install measures, NTG assumed as
1.00
Billing analysis results net due to control
group
RTF methodology and inputs
Billing analysis
Billing analysis
RTF UES with spillover
All Measures Gross NTG assumed as 1.00
Nonresidential
All Measures Gross Consistent with CPA, NTG assumed as
1.00
Notes: Regional Technical Forum (RTF), Unit Energy Savings (UES), Conservation Potential
Assessment (CPA), Net-to-gross (NTG)
The application of freeridership and spillover are also important considerations. Gross savings
do not have freeridership or spillover factors applied. Net savings include both freeridership and
spillover considerations. The RTF adjusted market baseline definition of savings accounts for
freeridership but not spillover, allowing for identified spillover savings to be applied to the
appropriate results when based on the RTF UES.
45 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
5 Distribution Efficiency
Avista did not acquire any distribution savings in Idaho in 2014.
46 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
6 Regional Market Transformation
Avista's local energy efficiency portfolio consists of programs and supporting infrastructure
designed to enhance and accelerate the saturation of energy efficiency measures through a
combination of financial incentives, technical assistance, program outreach and education. It is
not feasible for Avista to independently have a meaningful impact upon regional or national
markets.
Consequently, utilities within the northwest have cooperatively worked together through the
Northwest Energy Efficiency Alliance (NEEA) to address those opportunities that are beyond the
ability or reach of individual utilities. Avista has been participating in and funding NEEA since
the 1997 founding of the organization. NEEA is currently in its fourth funding cycle (2010-2014).
This fourth five-year period saw a doubling of the contractual funding from $20 million to $40
million regionally. Concurrently, Avista's share of NEEA funding increased from 4.0% to 5.4%
due to shifts in the distribution of regional retail end-use load.
Avista's criteria for funding NEEA's electric market transformation portfolio calls for the portfolio
to deliver incrementally cost-effective resources beyond what could be acquired through the
Company's local portfolio alone. Avista has historically communicated with NEEA the
importance of NEEA delivering cost-effective resources to our service territory. The Company
believes that NEEA will continue to offer cost-effective electric market transformation in the
foreseeable future. Avista will continue to play an active role in the organizational oversight of
NEEA. This will be critical to insure that geographic equity, cost-effectiveness and resource
acquisition continue to be primary areas of focus.
Electric savings by NEEA is provided after the Biennium period is complete, Avista expects to
have the 2014-2015 NEEA savings by spring of 2016.
47 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
7 Energy Efficiency Expenditures
During 2014, Avista incurred over $4.7 million in costs for the operation of electric energy
efficiency programs. Of this amount, $625,000 was contributed to the Northwest Energy
Efficiency Alliance to fund regional market transformation ventures.
Forty-eight percent of expenditures were returned to ratepayers in the form of incentives or
products (e.g. CFLs). During the 2014 calendar year, a little over $200 thousand , or 4.2 percent,
was spent on evaluation in an effort to continually improve program design, delivery and cost­
effectiveness.
Evaluation, as well as other implementation expenditures, can be directly charged to the
appropriate state and/or segment(s). In cases where the work benefits multiple states or
segments, these expenditures are charged to a "general" category and are allocated based on
avoided costs for cost-effectiveness purposes.
The expenditures illustrated in the following tables represent actual payments incurred in the
201 4 calendar year and often differ from the cost-effectiveness section where all benefits and
costs associated with projects completing in 2014 are evaluated in order to provide matching of
benefits and expenditures resulting in a more accurate look at cost-effectiveness. While natural
gas programs were suspended in 2014, minimal costs were incurred in the 2014 program year
for natural gas measures carried over from 2013, and are therefore reported below.
Table 7-1 and Table 7-2 provide a summary of energy efficiency expenditures by fuel type.
Table 7-1: Avista Electricity Energy Efficiency Expenditures
Segment Incentives Implementation EM&V NEEA Total
Residential $575,141 $545,259 $43,831 $0 $1 ,164,230
Low Income $700,170 $63,880 $11 ,687 $0 $775,737
Nonresidential I $967,477 $391,841 $65,934 $0 $1 ,425,252
Regional $0 $26,466 $23,891 $603,481 $653,838
General $0 $631 ,823 $45,698 $0 $677,520
Research $0 $11,771 $0 $0 $11 ,771
Total $2,242,788 $1,671,039 $191,041 $603,481 $4,708,348
48 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Table 7-2: Avista Natural Gas Energy Efficiency Expenditures
Segment Incentives Implementation EM&V NEEA Total
Residential $1,310 $710 $0 $0 $2,020
Low Income $0 $0 $0 $0 $0
Nonresidential $18,938 $404 $0 $0 $19,342
Regional $0 $116 $0 $21 ,662 $21,778
General $0 $259 $10,061 $0 $10,311
Total $20,248 $1,489 $10,061 $21,662 $53,451
49 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
8 Tariff Rider Balances
As of the start of 2014, the Idaho electric and natural gas (aggregate) tariff rider balances were
underfunded by $2,785,130. During 2014, $5.9 million in tariff rider revenue was collected to
fund energy efficiency while $4.7 million was expended to operate energy efficiency programs.
The $2.8 million under-collection of tariff rider funding resulted in a year-end balance of $1 .6
million underfunded balance.
During the first quarter of 2015, the underfunded balance has decreased to a total underfunded
amount of $1 .1 million. The bulk of this amount is attributable to Idaho electric which ended the
year with an underfunded balance of $1 .6 million mostly due to the nonresidential prescriptive
and site specific lighting programs.
Table 8-1 illustrates the 2014 tariff rider activity by fuel type.
Table 8-1 Tariff Rider Activity
Electric Natural Gas
Beginning Balance (Underfunded) ($3,459,189) $674,059
Energy Efficiency Funding $6,542,812 ($630,683)
Net Funding for Operations $3,083,623 $43,376
Energy Efficiency Expenditures $4,708,389 $53,463
Ending Balances (Underfunded) ($1 ,624,766) ($10,088)
50 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
9 Actual to Business Plan Comparison
For 2014 operations, Avista exceeded budgeted electric energy efficiency expenditures by $80
thousand, or less than 2 percent and natural gas expenditures were exceeded by $53 thousand.
The biggest driver of expenditures is incentives. This demand for incentives was slightly higher
than anticipated and its impact resulted in the underfunding in the Idaho electric programs. The
Idaho Natural Gas Portfolio was discontinued in 2014 but minimal expenditures were made in
2014 due to carry-over measures from 2013.
While the business plan provides an expectation for operational planning, Avista is required to
incent all energy efficiency that qualifies under Schedules 90 and 190. Since customer
incentives are the largest component of expenditures, customer demand can easily impact the
funding level of the Tariff Riders.
Table 9-1 provides detail on the budget to actual comparison of energy efficiency expenditures
by fuel type.
Table 9-1 Business Plan to Actual Comparison9
Electric Natural Gas
Business Plan
Incentives Budget $2,089,705 $0
Non-incentives and Labor $2,538,280 $0
Total Budgeted Expenditures $4,627,985 $0
Actual 2014 Expenditures
Incentives $2,242,788 $20,248
Non-Incentives & Labor $2,465,560 $33,203
Total Actual Expenditures $4,708,348 $53,451
Variance (Unfavorable) ($80,363) ($53,451)
9 Budget values are from 2014 Business Plan
51 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
52 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
10 Net Cost Effectiveness Results
This section reports the cost-effectiveness results with net to gross values, including
freeridership and spillover, as determined in verification and impact evaluations conducted on
the 2012-2013 programs. In summary, electric net TRC is 1.58. Electric net PAC test benefit­
cost ratio is 2.46. Table 10-1 through Table 10-4 illustrate electric cost-effectiveness results ..
53 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
10.1 Electric Cost Effectiveness Results
Table 10-1: 2014 ID Electric Total Resource Cost (TRC) (Net)
Regular Income Low Income O 11 p rtf ,.
Portfolio Portfolio vera O O 10
Electric Avoided Costs $10,059,529 $392,989 $10,452,518
Natural Gas Avoided Costs -$311 ,417 -$51 ,998 -$363,416
Non-Energy Benefits $85,165 $589,428 $674 ,593
TRC Benefits $9,833,276 $930,418 $10,763,695
Non-Incentive Utility Costs $2,107,940 $138,855 $2,246,795
Customer Costs $3,946,791 $627,690 $4,574,481
TRC Costs $6,054,731 $766,545 $6,821,276
TRC Ratio 1.62 1.21 1.58
Residual TRC Benefits $3,778,546 $163,873 $3,942,419
Table 10-2: 2014 ID Electric Program Administrator Cost (PAC) (Net)
Regular Income Low Income O 11 p rtf 1-
Portfolio Portfolio vera O O 10
Electric Avoided Costs $10,059,529 $392,989 $10,452,518
Natural Gas Avoided Costs -$311,417 -$51 ,998 -$363,416
PAC Benefits $9,748,111 $340,991 $10,089,102
Non-Incentive Utility Costs $2,107,940 $138,855 $2,246,795
Incentive Costs $1 ,157,898 $700,170 $1 ,858,067
PAC Costs $3,265,838 $839,024 $4,104,862
PAC Ratio 2.98 0.41 2.46
Net PAC Benefits $6,482,274 -$498,034 $5,984,240
54 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Table 10-3: 2014 ID Electric Participant Cost (PCT) (Net)
Regular Income Low Income O II p rtf r
Portfolio Portfolio vera O O 10
Electric Bill Reduction $13,059,770 $654,626 $13,714,396
Gas Bill Reduction -$11 ,080 -$2,680 -$13,760
Non-Energy Benefits $85,165 $589,428 $674,593
Participant Benefits $13,133,855 $1,241,373 $14,375,228
Customer Costs $3,946,791 $627,690 $4,574,481
Incentive Received -$1, 157,898 -$700, 170 -$1 ,858,067
Participant Costs $2,788,893 -$72,479 $2,716,414
Participant Ratio 4.71 NIA 5.29
Net Participant Benefits $10,344,962 $1,313,853 $11,658,815
Table 10-4: 2014 ID Electric Rate Impact Measure (RIM) (Net)
Electric Avoided Cost
Savings
Non-Participant Benefits $10,059,529 $392,989 $10,452,518
Electric Revenue Loss $13,059,770 $654,626 $13,714,396
Non-Incentive Utility Costs $2,107,940 $138,855 $2,246,795
Customer Incentives $1 ,157,898 $700,170 $1 ,858,067
Non-Participant Costs $16,325,608 $1,493,650 $17,819,258
RIM Ratio 0.62 0.26 0.59
Net RIM Benefits -$6,266,079 -$1,100,661 -$7,366,740
55 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
Appendix A Idaho 2014 Impact Memorandum
A-1 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis
A-2 ID 2014 DSM Annual Report & Cost-Effectiveness Analysis