20100301Application.pdf

LISA D. NORDSTROM
Lead Counsel
Inordstromtâidahopower.com
1SIDA~POR\I
An IDACORP Company
February 26, 2010
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-10-04
IN THE MATTER OF THE JOINT APPLICA TION OF IDAHO POWER
COMPANY AND THE NORTHWEST ENERGY EFFICIENCY ALLIANCE
FOR AUTHORITY TO FUND ITS CONTINUED PARTICIPA TlON IN THE
NORTHWEST ENERGY EFFICIENCY ALLIANCE THROUGH THE
ENERGY EFFICIENCY RIDER
Dear Ms. Jewell:
Enclosed for filing are an original and seven (7) copies of Idaho Power Company
and Northwest Energy Efficiency Allance's Joint Application in the above matter.
Very truly yours,
J?~Il't~
Lisa D. Nordstrom
LDN:csb
Enclosures
cc: Claire Fulenwider (w/encl.)
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise, 10 83702
LISA D. NORDSTROM (ISB No. 5733)
BARTON L. KLINE (ISB No. 1526)
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
Inordstromcæidahopower.com
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
b. -,.--.. 1- t . l", ¡.~ J ;"'1..ii,- V¡~" j i,i:,.';
CLAIRE FULENWIDER
Executive Director 2fJID FEB 26 PM 4: I
Northwest Energy Effciency Allance
529 SW Third Avenue, Suite 6(ffid¥:¡~:li?Portland, Oregon 97204 "_.J
CFulenwidercænwalliance.org
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT
APPLICATION OF IDAHO POWER
COMPANY AND THE NORTHWEST
ENERGY EFFICIENCY ALLIANCE FOR
AUTHORITY TO FUND ITS CONTINUED
PARTICIPATION IN THE NORTHWEST
ENERGY EFFICIENCY ALLIANCE
THROUGH THE ENERGY EFFICIENCY
RIDER.
)
) CASE NO. IPC-E-10-04
)
) JOINT APPLICATION
)
)
)
)
)
)
Idaho Power Company ("Idaho Powet' or the "Company") and the Northwest
Energy Efficiency Allance ("NEEA"), in accordance with Idaho Code § 61-503 and RP
52, hereby respectully make Application to the Idaho Public Utilties Commission
("IPUC" or the "Commission") for an Order authorizing Idaho Powets continued
participation in the Northwest Energy Effciency Allance for the period 2010-2014 and
that its participation be funded by the Energy Efficiency Rider.
In support of this Application, Idaho Power and NEEA represent as follows:
JOINT APPLICATION-1
i. BACKGROUND
NEEA is a non-profit organization whose ongoing purpose is to improve the
efficiency of electric usage and reduce the cost to Northwest consumers of energy
efficient products and services through market transformation. NEEA has been funded
by Northwest utilties, the Energy Trust of Oregon,1 and the Bonneville Power
Administration since 1997. This strategic allance is built around recognition that lasting
change in energy effciency can best be created through strong partnerships, and that
greater energy efficiency can be achieved across Washington, Oregon, Montana, and
Idaho by working in concert than by working as individual states or organizations. The
power of this collaboration historically has resulted in lower average costs for energy
efficiency than individual utilties could achieve on their own. In addition, NEEA brings
regional and national expertise and best practices to Northwest utilties which they might
not be able to access as readily or at lower cost.
NEEA delivers regional market-transformation, energy-efficiency initiatives, and
increased availability of energy-efficient emerging technologies. The purpose of these
initiatives is to deliver cost-effective electricity savings through lasting changes to the
marketplace. From 1997-2008, NEEA has delivered 556 average megawatts ("aMW")
total regional energy savings, 264 aMW of which are net market effects energy
savings.2 A summary of NEEA investment and results delivered from 1997-2009 is
included as Attachment No. 1 to this Application.
1 The Oregon Energy Trust administers energy efficiency funds for Portland General Electric and
Pacific Power in Oregon.
2 2008 NEEA Annual Report, pp. 14-15. (http://ww.nwallance.org/research/annualreport.aspx).
JOINT APPLICATION - 2
Idaho Power can better leverage its market transformation investment by building
on NEEA's pooled resources, suppliers, market research, and program design in the
four-state area. Because NEEA works in markets beyond Idaho Powets service
territory, there is a greater likelihood that market change in Idaho Powets service
territory wil be rooted in a regional market. Idaho Powets participation in NEEA
enables it to influence the direction of NEEA's activities to bring direct benefit to Idaho
customers. From 2002 to 2008, Idaho Powets allocated portion of NEEA savings was
136,370 MWh or 15.57 aMW.
Since Idaho Power first began participating in NEEA in 1997, the Commission
has allowed the Company to recover the costs of its participation in rates. For the years
1997-1999, the Commission authorized the use of revenue sharing funds to reimburse
Idaho Power for its contributions to NEEA. Case Nos. IPC-E-96-26, IPC-E-98-12, and
IPC-E-99-7; Order Nos. 27045, 27124, 27200, 27877, and 28211. In Order No. 28333
issued in Case No. IPC-E-99-13, the Commission authorized Idaho Power to commit to
continued participation in NEEA for the years 2000-2004 using a reserve of revenue
sharing funds.
In May 2005, the Commission issued Order No. 29784, which increased funding
of Idaho Powets Energy Efficiency Rider so that Idaho Power could expand its energy
effciency efforts and continue its participation in NEEA for the years 2005-2009. In
March 2009, the Commission approved a Stipulation finding amounts paid to NEEA
through 2007 were prudently incurred as part of a Stipulation covering a portion of DSM
expenses Idaho Power incurred from 2002-2007. Case No. IPC-E-08-10, Order No.
30740.
JOINT APPLICATION - 3
II. NEEA'S 2010.2014 BUSINESS PLAN
NEEA's 2010-2014 Business Plan sets forth how NEEA intends to deliver 200
aMW of total regional energy savings utilzing $191.7 millon invested by regional
stakeholders. Included as Attachment No. 2 to this Application, NEEA's 2010-2014
Business Plan attempts to provide additional value beyond energy savings that include
lasting changes in behavior and practices and accelerated adoption of energy efficiency
technologies, building, and business practices.
As described in greater detail in the Business Plan, NEEA has four strategic
business units, which are described below. Provided in those descriptions are
ilustrations of the NEEA activities that benefi Idaho Power customers directly and
provide economies of scale benefits that would be difficult to achieve through other
means.
1. Market Operations. NEEA's key market transformation efforts wil
occur in the Residential, Commercial, Industrial/Agricultural sectors and in Codes and
Standards by increasing market adoption, education, and training promoting energy
efficiency and regional coordination. In 2010, NEEA wil continue to deploy market
based energy efficiency initiatives across the region and in Idaho. This work results in
permanent avoidance and/or reduction of energy consumption and creates jobs in the
state.
a. New Construction. The Commercial New Construction
Initiative has resulted in the development of a broadly recognized Integrated Design Lab
("Lab") based in Boise. NEEA and Idaho Power have been the primary funders of the
Lab with additional funding provided from the University of Idaho. The Lab houses
JOINT APPLICATION - 4
specialized equipment, research space, staff offices, and class space. One director and
several research staff are employed, as well as numerous rotating interns for the
University's School of Architecture.
The Lab analyzes new construction building projects to support
adoption of high performance energy efficiency strategies. In addition, Lab staff work in
the community to provide technical assistance to architects and engineers. In 2009, the
Lab advised 12 architecture and engineering firms in Idaho on nearly 30 building
projects. The Lab also held a fall and spring professional educational series
delivering 12 sessions to over 240 participants. Similar work is projected for 2010.
NEEA is also active in the area of residential housing in Idaho.
NEEA has supported the ENERGY STARCI Homes program for six years in the state.
Four hundred and twenty one (421) homes were certified ENERGY STARCI in Idaho
Powets service territory in 2009. Based on 2009 Construction Monitor data, ENERGY
ST ARCI Homes achieved a market share of 16 percent in the Boise area and 11 percent
statewide. Eleven ENERGY ST ARCI Homes inspectors are active in certifying homes in
Idaho. These organizations are now trained and able to provide energy efficiency
modeling and consulting for new construction and retrofit projects, providing Idaho with
important infrastructure to participate in potential federal programs such as Home Star
and federal tax credits. This program wil continue in 2010.
b. Energy Management. NEEA works with Idaho Power's two
largest hospital customers on Strategic Energy Management Plans. As a result,
building operations and maintenance ("O&M") improvements are underway that wil
save between 1 0 and 20 percent of electric energy use. The improvements in the first
JOINT APPLICATION - 5
hospital were identified by a team of local energy engineering firms who, with NEEA's
assistance, developed their O&M diagnostic skils such that they were hired by the other
large hospital to do similar work and now offer these services regularly. This second
hospital is also in the process of hiring a Resource Conservation Manager, funded in
part by NEEA. As a result of NEEA's work, both hospitals have also undertaken a
number of projects incentivized by Idaho Power. In 2010-2014, NEEA and Idaho Power
wil also be reaching smaller hospitals through an energy management training program
under development based on NEEA's work in Montana that wil be leveraged across the
region.
From 2004-2009, NEEA worked with eleven Idaho Power food
processing facilties on implementing energy management practices, resulting in
validated savings of 1.7 aMW and another 2 aMW of projected near-term savings.
During this period, NEEA provided training to 435 employees representing 109 facilities
in Idaho Powets service territory. NEEA is presently working with four Idaho Power
customers to permanently embed energy management as a common business practice
in their organizations and one Idaho Power customer on a demonstration project in
support of the American National Standards Institute energy management standard.
NEEA is also exploring agricultural energy efficiency solutions that wil benefit Idaho
Power customers during the 2010-2014 timeframe.
In 2009, 45 Idaho Costco, Wal-Mart, Sam's Club, Best Buy, Sears,
and Kmart store locations joined NEEA's Consumer Electronics Initiative. Although the
energy savings goal for the 2009 Consumer Electronics Initiative ("Initiative") for Idaho
was 0.06 aMW, the energy savings associated with the funded-share of direct
JOINT APPLICATION - 6
incentives exceeded that energy savings goal by 47 percent. A total of 13,423 high
efficiency televisions were incentivized in Idaho through this Initiative in 2009. During
2010, the Consumer Electronics Initiative is expanding to include desktop computers
and monitors. In addition, buying groups representing independent retailers are
involved in the contract process to increase storefront count and further influence the
Northwest and Idaho markets.
c. Energy Codes. NEEA's funding has been instrumental in
the evolution of energy codes in Idaho. In 2001, the NEEA Board allocated $100,000 in
special funds to support adoption of the most recent national model code, including the
first-ever statewide commercial code adopted in Idaho. Following on that success,
NEEA began funding and participating in the Idaho Energy Codes Collaborative
("Collaborative"), a stakeholder group which plans and implements energy-code
adoptions and trainings. A major accomplishment of the Collaborative was the inclusion
of a recommendation to adopt a new energy code every three years in the Idaho Energy
Plan. While not having the force of law, this recommendation is being followed
consistently and is now a non-controversial, standard practice in Idaho. This is touted
as a best practice across the country but Idaho is one of the few states to actually
implement it. The NEEA Codes & Standards Manager recently recommended Idaho to
a national advocacy organization as a model for effective code implementation.
Through the Collaborative, NEEA has provided energy code
training for thousands of building officials and design and construction professionals
over the past ten years. In 2008, for example, 26 building officials representing 11 of
Idaho's 44 counties attended training. While this represents only 25 percent of the total
JOINT APPLICATION - 7
counties, these counties accounted for 70 percent of all the building starts in the state
that year.
In 2010-2014, NEEA wil focus on ensuring high compliance rates
for the codes that are adopted in Idaho. NEEA is engaged in detailed planning with the
Collaborative on an education and training campaign that wil target a much broader
range of audiences than in past years and wil provide classroom, field, and hands-on
learning opportunities to an unprecedented number of people.
2.Emerging Technologies.NEEA has played a role as an
intermediary between laboratories and the market by coordinating demonstrations and
evaluations of new technologies and practices, and by designing and implementing
strategic market interventions that successfully remove barriers to market availabilty.
For the 2010-2014 Business Plan period, NEEA will coordinate and collaborate with
Bonneville Power Administration, universities, national labs, and others to develop an
Emerging Technology Initiative that wil most effectively leverage existing activities and
fill the gaps where NEEA is best suited to serve the region's needs.
There are several historic and current examples of NEEA's work in this
area that have directly benefitted Idaho customers. In 2004-2007, NEEA conducted a
project to demonstrate a hybrid indirect evaporative cooling roof-top air-conditioning unit
that was tested on a retail store in the Treasure Valley. The prototype unit proved
potential energy savings of 50 percent, with even larger benefits on peak demand.3
NEEA is currently working with Idaho Power on a pilot project to demonstrate the costs,
3 Desert CoolAire Demonstration Project (2005-2007).
(http://ww. nwalliance.org/research/documents/DesertCooIAireF actsheet.pdf)
JOINT APPLICATION - 8
savings, and non-energy benefits of new "ductless" heat pumps ("DHPs,,)4 as a
supplemental heating/cooling source for houses with electric baseboard heat and room
air conditioners.5 This is another technology that promises energy savings in the 40 to
50 percent range over current equipment.
For the future, NEEA anticipates a near-term pilot project for heat pump
water heaters and has established a "Northern Climate" specification6 for manufacturers
wishing to deliver products designed specifically for Northwest climates. NEEA has also
historically worked on developing emerging technologies in the agricultural sector,
including demonstration and validation of a small-scale irrigation scheduling device7 that
would be affordable for small farms and a sub-surface irrigation system that would
significantly increase irrigation efficiencies for many high-value row-crops.
3. Evaluation and Partner Services. NEEA's Partner Services and
Evaluation business unit delivers a set of services that help increase the cost-efficiency
and value delivery of Idaho Powets energy efficiency programs. NEEA's funders have
asked NEEA to do this work because of the economies of scale associated with a
regional effort as compared to utilties each doing it individually. Following are
descriptions of the specific services included in NEEA's business plan and how each of
them delivers value to Idaho Power and its customers:
4 Northwest Ductless Heat Pump Pilot Project. (http://ww.nwductless.com)
5 Although electric resistance space and water heat make up a relatively small fraction of Idaho
Power's customer base (-10 percent), they provide a disproportionate impact on the Company's energy
requirements and represent a very significant cost to the residential customers that use them.
6 A specification for Heat Pump Water Heaters installed in Northern Climates.
(http://ww.nwalliance.org/ourworkldocuments/HPWHNorthern TierSpecFinal . pdf)
7 AM400 Soil Moisture Data Logger Project (2002-2004). Reviewed in the 2006 Long Term
Monitoring Report. (http://ww.nwalliance.org/research/documents/200704NEEAL TMT1.pdf)
JOINT APPLICATION - 9
a. Rural Services. These services are specifically focused on
increasing market adoption of energy effciency in rural markets-a unique component
of Idaho Powets customer base. In coordination with Idaho Power and other funders,
NEEA is in the process of drafting a Rural Services plan that includes the following key
components:
. Education, training, technical assistance for rural
trade alles
.Education, training, technical,
assistance for rural codes offcials
administrative
. Research to identify rural-focused technologies,
services, approaches
.Market delivery
technologies/approaches
of rural-focused
. Information on rural effciency program best practices
b. Regional Web Site/Online Community. NEEA is working in
partnership with its funders to develop a regional website/on-line community that
provides Idaho Power with easy access to data and information that supports energy
efficiency program planning and delivery. NEEA's funders believe that this type of "one-
stop shop" for data, program materials, best practices, and other information wil enable
them to plan and deliver energy efficiency programs more cost-efficiently because it will
reduce staff time spent searching for information, or "reinventing the wheel" due to lack
of information.
c. Regional Conferences/Events. In addition to the on-line
community, NEEA will help facilitate regional information-sharing, collaboration and
coordination via an annual Northwest energy efficiency conference, and a series of
JOINT APPLICATION - 10
more focused events-many of which will be available via webinar. Presently, there are
few events specifically focused on the needs of the Northwest region. NEEA wil work
with funders to identify and plan training and information-sharing events that are most
helpful to their efficiency program efforts.
d. Regional Building Characteristics and Energy Usage
Studies. NEEA plans to continue conducting regional studies of building characteristics,
energy-using equipment, and energy usage in residential, commercial, and industrial
sectors. NEEA's work in this area delivers Idaho Power and other NEEA funders
significant economies of scale. Funders are provided with essential energy efficiency
planning data, and also are offered the opportunity to collect additional data in their
service territory at a lower cost than if they were to conduct the studies individually.
Idaho Power has leveraged this opportunity in the past and expects to do so again in
the future.
e. Regional Evaluation & Market Research Studies. In addition
to the regional building characteristics studies, NEEA conducts ongoing evaluation and
market research associated with all of its Market Operations initiatives. Market research
studies provide valuable information that Idaho Power and other program implementers
use to increase the efficiency and effectiveness of their energy effciency programs
(e.g., NEEA's Lighting Purchaser Study). NEEA has also conducted evaluations of
energy savings associated with its initiatives that have saved Idaho Power from having
to conduct these evaluations individually (e.g., ENERGY STARCI Homes Northwest
Impact Evaluation).
JOINT APPLICATION - 11
4. Business Planning and Operations. NEEA will develop and
implement a portolio management system to support project adoption, emphasis, and
termination decisions. It wil also provide cost benefit analysis/reporting and
market/program planning support.
II. REGIONAL ENERGY EFFICIENCY INITIATIVE AGREEMENT
While Idaho Power shares NEEA's stated goals in improving energy effciency
and is committed to responsibly pursing energy efficiency initiatives for its customers
and the region, Idaho Power must ensure that every energy efficiency expenditure is
made responsibly. To that end, over the past several months, Idaho Power and NEEA
negotiated elements of accountabilty resulting in the attached Agreement. On February
4, 2010, Idaho Power and NEEA entered into a Regional Energy Efficiency Initiative
Agreement ("Agreement"), which is included as Attachment No. 3 to this Application.
The Agreement addresses:
1. Regional Results and Reporting. Under Section 1 of the
Agreement, NEEA wil deliver the services necessary to achieve the five-year goals and
objectives outlined in the NEEA 2010-2014 Business Plan described above. NEEA wil
develop an annual Operation Plan and associated budget that describes how NEEA wil
pursue the five-year Business Plan goals and objectives, as well as interim milestones
that wil be used to assess progress toward achieving them.
Section 2 commits the projects in NEEA's 2010-2014 portolio to deliver
200 aMW of total regional energy savings, in addition to the estimated 750 aMW of total
regional savings expected to be delivered during the same period of time as a result of
prior market transformation investments in NEEA. Of the 200 aMW of total regional
JOINT APPLICATION - 12
savings, 100 aMW are net market effects energy savings in addition to the estimated
175 aMW of net market effects savings expected to be delivered during the same period
of time as a result of prior market transformation investments made in NEEA.
NEEA will report total regional and net market effects savings annually as
part of its annual reporting process and will provide quarterly updates to the Board of
Directors (including Idaho Power) throughout each year. The savings reports and
underlying data and assumptions wil be presented to NEEA's Cost Effectiveness
Advisory Committee. This Committee includes members from the Idaho Commission
Staff as well as staff from the commissions in other states and the Northwest Power and
Conservation CounciL. All of NEEA's energy savings estimates and assumptions are
reviewed by third-party evaluation contractors on an annual basis.
2. Idaho Power Energy Savings. Under Section 2 of the Agreement,
NEEA wil report Idaho Power's share of total regional savings in proportion to their
share of the five-year funding for NEEA for 2010-2014 at 8.62 percent. Idaho Power's
share of the total five-year regional energy savings wil be assessed for cost-
effectiveness from a Total Resource Cost perspective. As referenced earlier, the
assumptions driving the calculations wil be reviewed annually by the Cost Effectiveness
Advisory Committee. Historically, NEEA has reported regional net market effect
savings which have been very cost-effective for Idaho Power and the region, averaging
less than 2 cents per kWh. NEEA projects that future costs wil likely be higher but is
targeting 3.5 cents per kWh in its Business Plan (Attachment No.2). In addition to
Idaho Powets share of regional total savings, NEEA wil deliver quarterly status reports
JOINT APPLICATION - 13
to Idaho Power estimating total energy savings for its service territory by program and
zip code where feasible.8
3. Audits. As described in Sections 3 and 4 of the Agreement, NEEA
will undergo several independent audits to verify appropriate expenditures of its funds.
By December 31, 2012, NEEA wil conduct a management audit utilzing an
independent third party to assess its methods and policies in the use of its resources,
operational and strategic planning, and employee and organizational improvement. By
August 1 of each year, an independent CPA firm will also conduct an annual financial
audit and internal control review.
4. Term. As set forth in Section 5, the Agreement wil become
effective on the service date of an Idaho Public Utilties Commission order authorizing
Idaho Powets continued NEEA participation and rate recovery of expenses associated
with this Agreement. Absent early termination, the Agreement will end on July 1, 2015.
5. Early Termination. Section 10 addresses instances where the
NEEA Board of Directors or individual funders may terminate the Agreement early. For
instance, if Idaho Power sought redress of a conærn about the conduct and/or
performance of NEEA, the Company and NEEA would engage in informal and formal
mediation before Idaho Power could cease its investment in NEEA by making a one-
time payment equal to one-sixth its current average funding amount.
8 Zip code level tracking is not always feasible or cost-effective to pursue in all markets. For
example, in consumer electronics, NEEA can track sales to the individual store level but will not know the
zip code of the purchaser. In business computer sales, NEEA can only track to a shipping address,
which may go to a central receiving location for corporate accounts and may ultimately be deployed in
some other location. In consultation with the funders and the Cost-Effectiveness Advisory Committee,
NEEA wil develop an appropriate methodology for allocating units where zip code tracking is not
available or not precise enough for the project in question.
JOINT APPLICATION -14
6. Funding Amount. As detailed in Section 6 and Exhibit A to the
Agreement, and subject to regulatory approval per Section 9, Idaho Power has
committed to fund NEEA based on a quarterly estimate of expenses up to the five-year
total direct funding amount of $16,522,800. Idaho Powets funding amount is 8.62
percent of NEEA's $191.7 millon 2010-2014 budget. Each NEEA membets funding
percentage is based upon two weighted components: (1) a regional share of total
customers and (2) a regional share of energy sales.9 This funding percentage
calculation places a 12.5 percent weighting on the customer component and an 87.5
percent weighting on the energy sales component. If this Application is approved by the
Commission, NEEA wil invoice Idaho Power for first quarter 2010 expenses payable
within 30 days of receipt of a final Commission order authorizing Idaho Powets
participation in and funding of NEEA.
IV. MODIFIED PROCEDURE
Idaho Power and NEEA believe that a hearing is not necessary to consider the
issues presented herein and respectfully request that this Application be processed
under Modified Procedure, i.e., by written submissions rather than by hearing. RP 201
et seq. If, however, the Commission determines that a technical hearing is required, the
Company stands ready to present its testimony and support the Application in such
hearing.
V. COMMUNICATIONS AND SERVICE OF PLEADINGS
Communications and service of pleadings with reference to this Application
should be sent to the following:
9 Based on 2006 EIA Form 861 data excluding wholesale power transactions or transmission only
customers.
JOINT APPLICATION - 15
Lisa D. Nordstrom
Barton L. Kline
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
InordstromCâidahopower.com
bklinecæidahopower.com
Ric Gale
Warren Kline
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
rgaleCâidahopower.com
wklineCâidahopower.com
Claire Fulenwider
Northwest Energy Efficiency Allance
529 SW Third Avenue, Suite 600
Portland, Oregon 97204
CFulenwiderCânwalliance.org
SHermenetcænwalliance.org
J Harriscænwallance.org
Vi. REQUEST FOR RELIEF
Idaho Power and NEEA respectfully request that the Commission issue an Order
authorizing: (1) that this matter may be processed by Modified Procedure, (2) Idaho
Power's continued participation in the Northwest Energy Efficiency Alliance for the
period 2010-2014, and (3) that the Company's participation be funded by the Energy
Efficiency Rider.
1h
DATED at Boise, Idaho, this 20 day of fdrcA~ 2010.
~.;Q?i~
LISA D. NORDSTR
Attorney for Idaho Power Company
~c:~
CLAIRE FULENWIDER
NEEA Executive Director
JOINT APPLICATION - 16
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO.IPC-E-10-04
IDAHO POWER COMPANY
ATTACHMENT NO. 1
~i'
NEEA INVESTMENT & RESULTS DELIVERED: 1997-2009
NEEA fuders have invested $233 millon over the past 12 years. Dug that period
NEEA's activities, conducted in partership with BP A, public and investor-owned utilties,
the Energy Trust of Oregon and other regional energy efficiency entities, produced
measurable market results, including:
Increased Market Adoption/Codes & Standards
. ENERGY STAR Lighting. Dramatically increased the availability, quality and
purchase ofCFLs, by exerting regional leverage on manufactuers, retailers and U.S.
EPA (ENERGY STAR); market share has grown from less than 1 % in 1997 to 37%
in 2008 and projected to be almost 50% in 2009; almost double the national average.
. ENERGY STAR Clothes Washers. Early program efforts increased market share
from 2% to over i 0% in less than two years and influenced federal standards that
mandated ENERGY STAR levels of effciency for all clothes washers in 2007;
introduced higher effciency requirements that ultimately became the next level of
ENERGY STAR; along with Nortwest utilities introduced the "Double Your
Savings" promotion effort that brought a half a millon matchig incentive dollars
from national manufactuers to the Nortwest.
. ENERGY STAR New Homes. Established an exclusive, northwest-specific
regional specification for ENERGY STAR new homes that directly influenced the
state of Oregon's 2008 energy code as well as curent proposals to change the
Washigton State energy code. NEEA leveraged the Oregon code success into code
changes to the 2009 version of the International Energy Conservation Code that wil
ultimately be adopted in Idaho and Montana. Over the past five years, the market
share of ENERGY STAR homes has grown from virtally zero to 14% Homes in
2009 despite the worst housing market in the past 30 years..
. Industrial Effciency/Food Processing. Parered with the Nortwest Food
Processors Association to infuence food processors representing 20% of industral
production to adopt Continuous Energy Improvement, and the Association to adopt a
goal of 25% reduction in energy intensity by 2020 and 50% by 2030. Leveraged
infsion of $1 millon from DOE to the nortwest.
. Better BrickslHospitals. Inuenced and provided services to enable hospitals
representing 30% of regional beds to adopt a strategic energy management plan,
including energy effcient design strategies, purchasing practices, and enhanced
operations and maintenance for existing facilities.
SW Third Ave., Suite
ww.uwaluec.org! 503-827-8416
Oregon 91204
(fax)
· ENERGY STAR Residential Windows. Exerted regional leverage with Nortwest
window manufactuers to change their product lines to make ENERGY STAR
windows the standard, increasing market shae from 16% to over 40% in two years
and setting the stage for important energy code changes across the region and at the
national level; resulted in curent market share estimated at 95% in 2009.
Emerging Technology
· Consumer Electronics. Negotiated a regional consumer electronics program with
regionaVnational market actors that wil promote televisions that are 30% more
effcient than ENERGY STAR.
· 80 PLUS Power Supplies. As the first sponsor of the 80 Plus program, NEEA
infuenced the development of the curent ENERGY STAR specification for desktop
computers that in tu dramatically increased the supply of and demand for 80 PLUS
efficient desktop computer powèr supplies.
· Distribution Effciency. Coordinated a multi-state pilot with thieen utility
participants to assess the viability and savings potential from optimzing substation
operations and introducing voltage reguation devices to residential customers. The
pilot confirmed regional energy savigs potential of between 100 and 270 aMW and
wil form the basis for a regional implementation strategy led by BP A.
· Commercial PC Netork Management Parered with Nortwest softare
development firm to test and demonstrte the energy savigs from energy
management softare targeted at networked personal computers. The softare is
targeted directly at network managers and provides both baseline and ongoing
measurement and reporting of energy savings. Sales rose from virally 0 in 2001 to
over 60,000 copies in 2008.
· Variable Frequency Drives/Evaporator Fans. Worked with Cascade Energy
Engineering to demonstrate the energy and non-energy benefits from the use of
varable speed drves in cold storage facilities. Demonstrated improved productivity
along side significant energy benefits. Market share of ths practice has now
increased from roughly 15% to 60% of the market in 2008.
· Wastewater Treatment NEEA demonstrated an innovative approach to managing
energy use in wastewater treatment developed by BacGen Technologies. This unique
energy management optimzation service has reduced energy consumption for small-
and medium-sized treatment facilities from 20 to up to 50 percent. Numerous
Northwest coinunties have implemented ths approach. Market share for ths new
technology increased from vially 0% to 12% today.
2
. MagnaDrive. NEEA helped MagnaDrive, another Nortwest start-up, evaluate and
then demonstrate their unque magnetically coupled varable speed drve technology
in rough-duty industral applications around the Northwest. For specialized
applications that are not conducive to conventional electronic variable speed drve
technologies, Magnadrve's product offers savings of25% or more on large
horsepower motor systems.
Building Market CapabiltylEducation, Training & Technical Support
. Better Bricksnraining & Education. NEEA parered with regional and national
market organzations (e.g., BOMA, AI, BCA and others to build market capabilty
by deliverig training on energy efficient building operations, integrated design
practices and building commissionig to more than 5,000 Nortwest professionals.
. Better Brickslntegrated Design Labs. Through the operation of a network of
Integrated Design Labs, NEEA has empowered infuential architects and engineers to
design the most energy efficient buildings. The labs have provided techncal and
business services, education and trainng, and tools and resources to expand market
capability to deliver energy effcient design and constrction services.
. Building Operator Certification. NEEA parered with the Nortwest Energy
Efficiency Council and the Idaho Association of Building Operators to develop and
deliver a self-sustaing training and certification program targeting building
operators in commercial buildings. The program has been so successful it has been
replicated across the county with similar efforts in Californa, New England, and
areas of the mid-west.
. Commissioning in Public Buildings. Working together with the four state energy
offices, NEEA demonstrated the costs and benefits of building commssioning for
state-owned facilities with the ultimate goal of facilitating development of state
policies that would ensure commssioning of futue state-owned buildings. The
project resulted in commssionig of over 31 millon square feet of state buildings.
As part of ths effort NEEA also helped support the star-up of what is now known as
the Buildig Commssioning Association.
Regional Coordinationltility Programs
. Green Motors. Following years of work under the Drivepower intiative to establish
and validate best practices for re-conditioning industral electrc motors, NEEA
coordinated with BPA, public and investor-owned utilities and the Energy Trust of
Oregon to establish standard practices for a "Green Motors" program and a "deemed
savings" value that utilities can apply to program paricipants.
3
· 80 PLUS Power Supplies. NEEA worked with regional utilities to fud an
"accelerated" market effort following the initial work under the 80 Plus program.
Under ths "opt-in" project, utility fuding was aggregated and used to incent PC
manufactuers to deliver ENERGY ST AR80 Plus desktops resulting in market share
that is more than double the national average.
. Ductless Heat Pumps. Coordinated a regional pilot for residential ductless heating
and cooling systems, including deliver of marketing tools available for utility
use/customization and launch of study that wil quantify energy savings in the field.
· Building Characteristics Studies. Delivered regional building characteristics data
and analysis for residential, multifamily and commercial building stock and new
constrction. Coordinated with utilties and the Energy Trust of Oregon to optimize
usefulness of data.
4
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-10-04
IDAHO POWER COMPANY
ATTACHMENT NO.2
::.. NORTHWEST
__. E E EFFie!
",i ALLIANCE
w_.nwallhlnc:e.org
Submitted to:
NEEA Board of Directors
April 16, 2009
OF CONTENTS
1. Executive Summaiy .... ................. ...... ........... .................... ...... ............ ........... ....... .......... ......... 3
2. Vision, Mission and Goals ....................................................... ............. ...... .... ........ ............ .... 11
GOAL 1: INCREE MAT ADOPfION ..........................................................................13
GOAL 2: HELP NORTHWEST UTliES AND OTHER ENERGY EFFICIENCY
ORGANIZATIONS ACHIEVE THEIR ENERGY EFFICIENCY GOAL ............................... 13
GOAL 3: BUILD REGIONAL MAKET KNOWLEDGE AND CAP ABILI1Y THROUGH
EDUCATION AND TRANING..............................................................................................14
GOAL 4: INCREAE REGIONAL MARET AV AILAILI1Y OF EMERGING
TECHNOLOGIES ...................................................................................................................14
GOAL 5: SUPPORT THE REGION'S EFFORTS TO PROMOTE ENERGY EFFICIENCY... 15
GOAL 6: FACILITATE REGIONAL ENERGY EFFICIENCY PLANING AND
IMPLEMENTATION .............................................................................................................. 16
3. Regional Market Transformation and NEEA's Role .............................................................17
4. Strategic Business Units.........................................................................................................18
4.1 MARKT OPERATIONS ..................................................................................................18
4.2 EMERGING TECHNOLOGIES, ESTIMATED 5-YE BUDGET: ...............................43
4.3 PARTNER SERVICES, CORPORATE COMMUNICATIONS, AND REGIONAL
MAET RESEARCH/EVALUATION .................................................................................50
4.4 BUSINESS PLANING AND OPERATIONS .................................................................59
5. Challenges and Paths to Success ........................................ ................. ...... .......... ................. 64
6. Appendixes ...... ...... ... ... ..... ... ...... ................................................. ............ ....... .... ... .......... ... .... 69
6.1 NEEA's Value ...................................................................................................................69
6.2 ENERGY SAVINGS ESTIMATES AND COST EFFECTIENESS ................................. 72
6.3 COST-EFFECTIVNESS ESTIMATES ............................................................................73
6.4 BUDGET DETAIL............................................................................................................ 76
6.5 GOALS, OBJECTIVS AND METRICS DETAIL............................................................ 80
6.6 2010-2014 BUSINESS PLA AND THE 6TH POWER PLA........................................ 87
NEEA - 2010-2014 Business Plan 2
1. Executive Summary
OVERVIEW
The Nortwest Energy Effciency Alliance (NEEA)
2010-2014 Business Plan is focused on creating lasting
change in energy effciency in the Nortwest through
strong partnerships with the region's utilties and
market actors. The region can achieve greater energy
effciency across Washington, Oregon, Montana and Idaho by working in concert than it can
solely through individual efforts. This plan wil deliver long-term change in the residential,
commercial, industrial and agricultural markets by:
. Filing pipeline .with emerging technologies
. Working upstream in the market to leverage the region's influence
. Leveraging economies of scale
. "Locking in" savings through codes and standards
. Expanding regional market capabilty
. Avoiding resource duplication
. Mitigating risk
The Northwest is at a crossroads in energy policy. Increasing energy demand, supply
constraints, and climate change legislation all point to the increasing need for significant,
cost-effective, environmentally responsible resources. The last decade has proven that energy
effciency is the "least cost" and most quickly available supply resource for securing a vibrant,
sustainable future for the Nortwest, and will continue to perform for years to come. The
current economic crisis and environmental factors accentuate the imperative of providing
energy resources with minimal capital outlays by the utilty, the consumer, business and
industry. Energy effciency is vital in the drive toward economic and environmental health.
But to meet the challenges posed by projected load growt and climate change, the region
needs to multiply its current energy effciency efforts several times over.
This Business Plan is being crafted during a time of severe economic and financial pressures
for much of the region's economy. Business and industry are challenged to maintain
revenues, access credit and stay profitable. Capital is constrained. One might ask, at a time
like this, whether a focus on energy effciency should be maintained and actually heightened.
NEEA and its Board of Directors have reflected on this, and the answer is a strong 'yes.'
Improved cash flow and reduced expenses for consumer households and business is criticaL.
Reduced costs of production for industr are essentiaL. Energy effciency yields both of those
results. Effciency remains our quickest and least cost resource. Loss of focus and
momentum now would be precisely the wrong response and would not just slow future
NEEA - 2010-2014 Business Plan 3
effciency gains, but impede them. As the region has learned from the bounty of CFL savings
that continue to bear frit from signifcant investments that occurred a decade ago, a
continued, deeper investment in emerging technologies for tomorrow is critical. The
justification for a focus on market transformation in the region during times like these is
greater than ever. When money and resources are tight, leverage needs to be maximized and
duplication minimized. This is the appropriate time for a cooperative regional effort to bring
long-term value to the Northwest.
This Business Plan outlines the most effcient ways for NEEA to use its unique role as a
regional entity to maximie energy effciency for the region. At the same time, NEEA is not
in this alone. Its market transformation work can Oiùy be successfu when coordinated with
all other energy effciency effort planned in the region. Together, the Northwest can meet
the challenges of the next five years while building the foundation to achieve energy
effciency gains well into the future.
BACKGROUND
This Business Plan follows a comprehensive strategic planning outreach process with
regional stakeholders. More than 50 organizations, seven regional workshops and 114
completed online surveys from key stakeholders provided NEEA input, resulting in NEEA's
2010-2014 draft Strategic Plan. The NEEA Board found the draft Strategic Plan suffcient to
inform the development of this Business Plan.
The draft NEEA Strategic Plan outlined six interdependent energy effciency goals:
1. Increase Market Adoption;
2. Help Nortwest Utilties and Other Energy Effciency Organizations Achieve their
Energy Effciency Goals;
3. Build Regional Market Knowledge and Capabilty through Education and Training;
4. Increase Regional Market Availabilty of Emerging Technologies;
5. Support the Region's Efforts to Promote Energy Effciency; and
6. Faciltate Regional Energy Effciency Planning and Implementation.
This Business Plan is aligned with these six goals and focuses on regional fairness and equity.
Additionally, the Business Plan focuses on areas that build on NEEA's core values!, distinct
characteristics, core competencies, and on activities that wil complement local energy
effciency efforts. Because NEEA works broadly across the region, upstream with market
actors and with those market actors that span multiple utilty servce terrtories, it honors the
local relationships its partners have with their customers. NEEA strives to complement, not
supplant, those relationships, and acknowledges that careful coordination and good
communication is essentiaL.
1 Detail on NEEAs core competencies and ditinct chacteristics can be found in the Appendix.
NEEA - 2010-2014 Business Plan 4
The Bonneville Power Administration (BP A) is currently in the process of establishing its role
in energy effciency following the implementation of its proposed Tiered Rates structure in
2012 and beyond. The outcome of this process is stil uncertain. NEEA will work to adjust its
regional efforts to complement the role that BP A and its customers ultimately decide is
appropriate for them. NEEA will coordinate and collaborate with BPA and other regional
effciency organizations to minimize duplication and maximize economies of scale in regional
energy effciency efforts.
Concurrent to the development of this plan, NEEA has also been an active member of the
Northwest Energy Effciency Taskforce (NEET), which is faciltating an exchange of ideas
and technical information to accelerate energy effciency implementation and coordination
throughout the Northwest. Many areas identified by NEET in its report of 12/31/2008 are in
alignment with this Business Plan. Because of this, NEEA will incorporate requested NEET
work where there is alignment and work with NEET to clarify the relationship between their
recommendations and the work currently planned and budgeted for in this Business Plan.
In addition to the ongoing NEET and BPA processes, the Northwest Power and Conservation
Council is currently developing the 6th Power Plan. Due for draft release in May 2009, the
energy effciency potential emerging from preliminary work on the 6th plan appears to be
significantly larger than identified in the prevous 5th Power Plan. To have the best chance of
realizing this potential, it will be important for all of the regional effciency efforts to be
planned and coordinated. Many of the largest effciency opportunities emerging from early
work on the 6th Plan are targeted in this Business Plan. As the 6th Plan is finalized, NEEA wi
work with the region to develop appropriate strategies to achieve the goal of the 6th Plan and
will re-evaluate the portolio of projects as appropriate to support the regional effort.
Because of these changes as well as the rapidly changing markets around us, the NEEA
Business Plan incorporates flexibilty at the strategy, planning and operations levels to
accommodate these changig realities. NEEA will prioritize systems and processes to allow
the organization to remain nimble and responsive to changig markets, regional priorities
and plans. Finally, NEEA plans to have an open dialogue with stakeholders to help ensure
that it is continually aligned with the current trends and dynamics in the market to achieve
the goals and objectives set fort in this plan, and to make adjustments to this plan as
appropriate.
INVESTMENT AND ENERGY SAVINGS RETURN
By 2014, the Business Plan is designed to deliver 200 aMW2 of total regional energy savings
of which 100 aMW3 are net market effects energy savings4. The five-year investment required
2 This is in addition to the esimated 750 aMW of total regional savigs expected to be delivered during the same period of
time as a result of prior market transformation investments made in NEEA.
3 This is in addition to the esimated 175 aM of net market effec savings expected to be delivered durig the same
period of time as a result of prior market transformation investents made in NEEA.
4 For more on the difference beteen total regional and net market effects savigs see Appendix A-i.
NEEA - 2010-2014 Business Plan 5
is $196 milion - about 11 percentS of the region's projected tota investment in energ
effciency activities. As a comparison, the region's last five-year investment in NEEA
represented approximately 10 percent6 of the region's tota effciency investment.
The cost and savings estimates ilustrated below imply a range of a total resource cost (TRC)
between 2.5-3.5 cents/kWH. Ten-year savings estimates are expected to generate at least
550 aMW total regional savings, of which 200 aMW are net market effects.
5- and lo-Year Estimated aM and TRC Projections
5 - Year Estimates 10- Year Estimates
Total Resource Cost
Total Regional aMW Savings
Net Market Effect aMW Savings
NEEA Levelized Cost
As noted below, the estimated cost of securing energy effciency through this regional effort
is projected to be less than half the cost of other resource options.
--
~120::..ER-100-fI0()80
Q)Õ 60ì:~:=40
"0Q).!:20
ãi:;
Q)0..
New Electric Resources Options - Early 2020s
2010 - 2014
Business Plan
Gas Comb Cycle Coal Wind (WNOR)
Source: Jeff King, Nortwest Power and Conservation Council: Sixh Nortwest Conservation & Elecric Power Plan,
Rankine (steam) Cycle Coal-fired Power Plant, Resoure Assment, Dec. 9, 2008
5 Assuming a five-year budget of $1.75 bilion for the region (-$350 milion annualy)
6 Assuming a five-yer budget of $1 billon (-$196 milion annualy).
NEEA - 2010-2014 Business Plan 6
The further breakdown of estimated savings, by area, is ilustrated in the following two
charts, broken down first by five-year estimated savings and second by io-year estimated
savings:
5 Year Estimated aMW Savings
250
200
150
100
50
o
Net Mkt Effects Total Regional
Residential
11 Industrial
. Commercial
10 Year Estimated aMW Savings
600
400
200
o
Net Mkt Effects Total Regional
. Emerging Tech
Residential
ii Industrial
. Commercial
NEEA - 2010-2014 Business Plan 7
The required regional investment to execute this five-year Business Plan is $196 milion. The
following ilustration outlines estimated annual expenses with a graduated ramp over the five
years. Expenses in 2010 are estimated to be $30 milion. For comparison purposes, the
2009 budget of $24.5 milion7 is included. When compared to the 2009 budget, 2010
represents a 23% growth in expenses. The ramp rate is slightly higher in 2011 with a 25%
increase, then it declines in the third year to 11%. The budget remains flat in years 2013 and
2014.
Estimated Annual Expenditures
($ Milions)
$50
$40
$30
$20
$10
$0
2009 2010 2011 2012 2013 2014
Below is a further breakdown of cost and savings by major area:
5 Year
Regional
Savings
5 Year Net
Savings
10 Year
Regional
savings
10 Year Net
Savings
5 Year
Budget
(millions)
Residential
Commercial
Industrial
Emerging Technologies
Codes and Standards
Partner Services and
Communications
Regional Evaluation and
Market Research
Planning and Operations
Totals
7 The budget includes both core funding and three regional "opt in" projects.
NEEA - 2010-2014 Business Plan 8
ADDING VALUE BEYOND AMWS
NEEA's 2010-2014 Business Plan delivers significant energy savings; however, NEEA's value
in the region goes well beyond the megawatt. Additional benefits include lasting changes in
behavior and practices, and accelerated adoption of energy effciency technologies, buildings,
and business practices. Specifically, additional value beyond aMWs delivered through the
execution of this plan includes:
1. Filing pipeline of emerging technologies
2. Delivering regional leverage with upstream market actors
3. Realizing economies of scale
4. "Locking in" savings through codes and standards
5. Expansion of regional market capabilty
6. Avoiding resource duplication
7. Mitigating risk
CHALLENGES AND PATHS TO SUCCESS
The current economic situation and the volatility in the energy industry represent significant
challenges to NEEA and the region in achieving the energy effciency goals set for the next
five years. In addition, specific challenges have been identified for NEEA and acknowledged
including managing organizational growth and increased complexity
NEEA plans to build on a solid infrastructure and management process, and implement a
robust system for prioritizing new opportunities. To ensure effectiveness, NEEA will
institutionalize key business processes to ensure operations are transparent, flexible and
effcient, decision-making is evidence-based, the voice of the region is integrated, and that
NEEA invests in a market transformation portfolio that delivers optimal and equitable return
on the region's investment. NEEA will implement a formal portolio management
system. This system will be actively managed to help ensure ongoing effciency and
accountabilty, openly providing information on NEEA initiative and program selection, and
provide insight into the portolio management criteria used in decision making.
To ensure engagement and participation, NEEA will utilize multiple existing and new
expert/ advisory committees to help ensure the diverse needs of the region are appropriately
reflected within NEEA operations. Key committees wil also help identify areas of
coordination and reduce any risk of duplication of work in the region. NEEA will continue to
place emphasis on evaluation of its results, and will place particular emphasis on developing
a robust methodology for estimating savings associated with business practice change in the
commercial and industrial sectors.
SUMMARY
NEEA has a successful track record and is poised to build on that to prOvide significantly
more regional support for energy effciency. Over the past decade, NEEA and the region's
electric utilties have already shown that the unique collaboration is extremely effective when
NEEA - 2010-2014 Business Plan 9
carefuly coordinated. Together, under the banner ofNEEA the region has already
accomplished a broad range of market-based and energy codes successes including the
following:
1. Since 1997, more than 255 aMWs of net market effects have been saved in markets
where NEEA and utilities have worked together through 2008.
2. One in four light bulbs sold in the region are CFLs, and Northwest homes have twice
as many CFLs as the national average.
. Regional healthcare systems representing more than 30% of the region's hospital
beds are implementig Strategic Energy Management Plans (SEMP) to reduce their
energy costs.
. 20% of the region's food processing industry has made corporate commitments to
practice Continuous Energy Improvement (CEl) to increase the energy effciency of
their total operations.
. NEEA and Northwest states have sponsored improvements to regional energy codes
that have resulted in nearly 20 aMW of energy savings for the region and that grow
by 5 aMW each year.
This Business Plan provides a balanced portolio of
transformative initiatives, leverages synergies from existing
efforts, accelerates new technologies and practices into the
market, and provides educational/best practice support to
regional partners while building increased awareness of
energy effciency in key areas. In summary, it yields
substantial low-cost energy savings to the region while
providing support to its partners to help them more
effectively serve their customers.
NEEA - 2010-2014 Business Plan
Value
power of
through
collaboration.
By design, investments in NEEA's market
transformation efforts have and wil continue to
pay dividends to NEEA's funders -and the
region as a whole - far beyond the years those
initial investments were made. By 2014 it is
projected that investments in NEEA through
2009 alone wil have accrued a total of 1470
aMW total regional savings. of which 500 aMW
are net market effects.
10
2. Vision, Mission and Goals
VISION AND MISSION
NEEA's vision and mission statements, as described in NEEA's draft Strategic Plan, together
provide the foundation for its overall Business Plan. NEEA's vision provides a vivid idealized
description ofNEEA's desired long-term outcome. NEEA's mission defines its core purpose
and focus; it is NEEA's reason for existing.
Vision:
Energy efficiency is a cornerstone
of a vibrant sustainable Northwest.
Mission
Mobilize the Northwest to become increasingly
energy effcient for a sustainable future.
STRATEGIC GOALS
NEEA's strategy is based on collaboration with regional utilities and market partners to
achieve 200 "total regional" aMW (sso aMW by 2019) in Northwest markets. One hundred
aMW of those energy savings in the five-year plan period will be net market effects at a
levelized cost of approximately 2.S to 3.S cents/KW.
To achieve this objective, NEEA will pursue six goals outlined in its draft Strategic Plan and
discussed below. To help ensure success, all six goals must be pursued, and pursued in
concert; they are interdependent to one another as ilustrated below. Stakeholders8 and
partners alike have indicated that NEEA must:
Gi. Increase Market Adoption
G2. Help Northwest Utilities and Other Energy Effciency Organizations Achieve their
Energy Effciency Goals
G3. Build Regional Market Knowledge and Capabilty through Education and Training
G4. Increase Regional Market Availabilty of Emerging Technologies
GS. Support the Region's Effort to Promote Energy Effciency
G6. Faciltate Regional Energy Effciency Planning and Implementation
8 Reference for Stakeholder input results
NEEA - 2010-2014 Business Plan 11
INTERDEPENDENCY OF GOALS
The detailed objectives presented in the Business Plan appendi (S.4) will not be reached
without the support of all six goals as a comprehensive market strategy. The goals are
interdependent as ilustrated below; all are part of the market transformation continuum.
..tl '..'''+iiê\117
For instance, an adequate pipeline of emerging, viable, and cost-effective energy-effcient
technologies (G4) is essential to increasing market adoption (G1). NEEA plays the role of
working regionally with upstream market actors to help build early market adoption. Then,
local voluntary energy effciency programs take over to create more widespread market
adoption among their customers (G2). NEEA will work with its stakeholders to develop and
implement a transition strategy where appropriate between these roles. Afer the region has
successfully achieved this high degree of market adoption, NEEA re-enters the picture to
"lock in" these energy savings through accelerated adoption of energy codes and product
standards where appropriate.
But none of this can happen without NEEA's foundational goals (G2, G3, GS, G6). The
foundational goals must always be in place. For instance, NEEA must continue to maintain
some level of investment in market infrastructure, and market leverage to local programs
(G2) where NEEA is able to deliver significant economies of scale. NEEA must also faciltate
regional planning and implementation (G6) with its stakeholders and partners at the
foundation level to maximize returns and integrate plans into the larger strategy.
Lastly, supporting the region's efforts in promoting energy effciency (GS) is an ongoing
priority in meeting regional energy needs, and has the potential to augment and accelerate
the scale of all energy effciency effort.
NEEA - 2010-2014 Business Plan 12
GOAL 1: INCREASE MARKET ADOPTION
NEEA's primary goal has been, and will continue to be, to increase and accelerate the
adoption of energy-effcient technologies, business practices, and behaviors among
Northwest business, industry and consumers. NEEA's core work has been and will continue
to be market transformation.
NEEA will continue to pursue this goal by intervening in key markets
to create lasting change. This is done by removing identified barriers
and exploiting opportunities that accelerate the adoption of all cost-
effective energy effciency as a matter of standard practice. NEEA's
market interventions include workig with a broad array of upstream
market actors including manufacturers, distributors, retailers,
builders, architects, code offcials, trade and industry associations,
and government organizations. Achievement of this goal is
measurable by assessing the outcomes of specific market
interventions.
. Leverage with upstream
market actors
. Economies of scale
. Codes and standards
lock- in savings
. Example: All in region wil
benefit from regional
consumer products
infrastructure
GOAL 2: HELP NORTHWEST UTILITIES AND OTHER ENERGY
EFFICIENCY ORGANIZATIONS ACHIEVE THEIR ENERGY
EFFICIENCY GOALS
As one of many energy effciency organizations operating programs
in the region, NEEA is committed to supporting individual energy
effciency efforts of utilties and administrators by providing
regional leverage and effectively complementing their programs
and initiatives. In the past, NEEA has provided such support
through its influence upstream in the market, through regional and
national standard-setting organizations and state building codes;
through faciltation of training, education, and technical support;
and by funding regional information servces.
Value Region:
. Economies of scale; avoid
resource duplication
. Equitable services to utilities
east of the Cascades
. Examples:
- Web portal will provide access
to best practices and emerging
technologies information
- Circuit rider wil ensure
2-way communication
throughout the region.
During the extensive planning outreach efforts, stakeholders made
it clear that NEEA should step up its efforts to provide servces for
utilty program staff. NEEA will ramp up servces it provides the
region's energy effciency organizations to help them achieve their
individual goals. The goal of Partner Servces is to support utilties and other energy
effciency organizations in achieving their goals. NE wil deterine the specic
services to be provided based on the needs and priorities offunders. Partner
Servces work falls into three primary areas-information servces; events and training; and
regional program coordination of market activities in instances when funders believe that
NEEA can deliver regional leverage and/or economies of scale. Achievement of this goal will
be measured based on utilty/energy effciency organization usage and perceived
servce/effectiveness.
NEEA - 2010-2014 Business Plan 13
GOAL 3: BUILD REGIONAL MARKET KNOWLEDGE AND
CAPABILITY THROUGH EDUCATION AND TRAINING
NEEA's stakeholders believe that a general lack of energy effciency
know-how among business, industry and consumers is a major barrier to
the region's achieving its energy effciency potential. NEEA has a history
of successfully building market knowledge and market capabilty by
coordinating regional training, education and technical support.
Recently, the demand for these resources has far outstripped the supply.
Going forward, NEEA wil continue its work with market partners,
building trades, and other professionals to further expand market
capabilty for delivery of energy effciency. Achievement of this goal wil
be measured by assessing changes in behavior/practice resulting from
NEEA-sponsored activities.
to
. Expanded regional
market capabilty
. Example: Training of
building operations
industry will lead to more
energy-efficient buildings
throughout region
GOAL 4: INCREASE REGIONAL MARKET AVAILABILITY OF
EMERGING TECHNOLOGIES
In the long run, the region's collective energy effciency goals depend on a
continuous pipeline of new, commercially available energy effciency
technologies and practices. Many of the current success stories in energy
effciency - compact fluorescent lamps (CFLs), resource-effcient clothes
washers, super-effcient windows, and premium effciency motors - were
the result of development work in the 1980s and early 1990s. However,
with deregulation in the mid-1990s, most work on emerging technologies
stopped. As a result, today few new opportunities are ready to replace
their impact. While there are some emerging technologies on NEEA's
radar, "the next CFL" is not clearly visible on the horizon. The region-
public power, investor-owned utilities and other energy effciency
organizations-have asked NEEA clearly to take a strong role in assuring
the region that a pipeline of new effciency opportunities will be maintained.
to
. Emerging technology
pipeline
. Mitigation of risk
. Example: Heat pump
water heaters have
potential for long-term
savings and wil be
explored
NEEA has experience and a track record in emerging technologies. This business unit will
reinvest in this critical area. NEEA wil manage a portolio of emerging technology
demonstration projects that have an estimated potential of 300 aMW of energy savings by
2030. While these activities will not yield much in the way of near-term savings, they will
deliver a significant return in 10 to 15 years. NEEA provides a mechanism for the region to
invest in these new opportunities in a way that minimizes risks to anyone funder and
maximizes potential benefits to all through economies of scale.
NEEA - 2010-2014 Business Plan 14
GOAL 5: SUPPORT THE REGION'S EFFORTS TO PROMOTE
ENERGY EFFICIENCY
Although utilties and other energy effciency organizations widely recognize energy
effciency as the first priority for meeting energy supply constraints and environmental
challenges, the general public and the marketplace at large does not.
Regional stakeholders are unanimous in their agreement that the
current level of awareness and interest in climate change represents a
tremendous opportunity to promote energy effciency as an
actionable solution. This topic has been a key area of focus for the
Northwest Energy Effciency Taskforce (NEET-Workgroup #4).
Utilties have been clear that they see marketing activities as their
own domain; therefore, this plan does not include any
marketing or promotional efforts. This plan does call for
NEEA to support the region's efforts to promote energy effciency
as follows:
Region:
. Regional coordination
. Economies of scale
. Example: Findings from
market research &
evaluation identify
effective marketing
messages and
approaches for behavior
change
Sumarize Existig Marketig Research-The NEET
Executive Committee has asked NEEA to work collaboratively with Work Group #4 during
2009 to hire a contractor who will summarize the learning to date from existing market
research related to energy effciency behavior. This contractor will also identify needs for
additional research. NEEA will disseminate findings and recommendations to the region,
and will continue to share learning via its new Partner Servces business unit.
Conduct Primary Marketing Research-Based on identified needs for
additional/ongoing market research, NEEA will conduct primary marketing research-only
to the extent that it is most effciently conducted at a regional level, and the regional
"coordinating council" asks NEEA to conduct it. Examples of such research might
include a study to identify motivating benefits/messages, and an awareness and
behavior-tracking study.
Disseminate Actionable Findings/Recommendations-Actionable marketing
research provides an analytical basis for identifyng effective marketing strategies (e.g.
targeting, media, messaging). NEEA can add value by disseminating such information to
stakeholders and by making it easily accessible to the entire region. As a regional
organization, NEEA is in a unique position to assist the Northwest in developing unified
messaging and to support regional activities and other outreach strategies designed to
elevate awareness about the benefits of energy effciency.
Communicate Regional Accomplishments- NEEA will continue its ongoing efforts to
keep energy effciency top-of-mind via traditional corporate communications activities. In
particular, NEEA will actively pursue opportunities to publicly communicate the region's
collaborative energy effciency accomplishments through NEEA, and the public benefits that
those accomplishments have delivered.
NEEA - 2010-2014 Business Plan 15
NEEA is prepared to support the region's efforts as described above, and it has the core
competencies and marketing experience to support this goal in any other manner that the
region identifies as appropriate in the future.
GOAL 6: FACILITATE REGIONAL ENERGY EFFICIENCY
PLANNING AND IMPLEMENTATION
As a regional collaborative, NEEA is in an excellent position to advance coordinated regional
market transformation strategies by faciltating the development of comprehensive market
strategies, conducting regional market research on a schedule that coordinates with regional
planning timelines, and providing additional information servces. While the Nortwest
Power and Conservation Council provides a focal point for regional planning of energy
effciency resource potential, the majority of stakeholders believe that if there were greater
coordination of roles and activities, the region could achieve a significantly higher level of
energy effciency.
The need for more deliberate regional interaction and coordination via a long-term regional
program forum was discussed at length by NEET Work Group #3. That work group's
recommendation suggested that NEEA playa role in facilitating the coordinated
implementation of regional initiatives. The final results of this work group will help to furter
define NEEA's role in this area.
NEEA - 2010-2014 Business Plan 16
3. Regional Market Transformation and NEEA's
Role
Market transformation is the result of combined efforts from all energy effciency
organizations working together to sustainably change markets. Over time, the primary roles
of these organizations change depending on their unique strengts, position in the market
and capabilty to address where the market is at that point in time. Following is an
ilustration of the market transformation process over time and the roles various entities
play.
As you can see in the graphic, there are places on the market diffsion curve, where NEEA's
unique role as a regional aggregator lends itself to taking on a primary role in the market
transformation process. These three areas are very discrete and focus on leveraging upstream
market actors. The bulk of the diffsion curve is in mainstream market adoption, and is
where efforts to increase market adoption (Gi) are best accomplished at a local level directly
with end use customers.
t:o.....mb..øt:øD...ø~bm
:E
NEEA - 2010-2014 Business Plan 17
4. Strategic Business Units
In order to meet the goals of this plan, NEEA has strctured itself in such a way to be able to
effectively grow its operations, while remaining flexible and nimble to respond to market
changes and opportunities. NEEA is structured into four strategic business units: Market
Operations; Emerging Technology; Evaluation and Partner Servces; and Corporate Planning
and Operations. In addition to this structure, NEEA will also implement a matrix
management approach to its operations, in order to both share information more readily
across units, while allowing for specialization that can increase depth of knowledge within a
business unit. The following section describes key business units and approaches to deliver
the value outline in this plan.
4.1 MARKET OPERATIONS
NEEA's key market transformation effort will occur through core work in the Residential,
Commercial, Industrialj Agricultural sectors and in Codes and Standards. NEEA has
prioritized investment in markets across sectors based on current understanding of the
maximum achievable potential for sustainable, cost-effective energy effciency. As new
information on effciency potential becomes available (e.g. from the 6th Power Plan), NEEA
will re-evaluate its portolio of projects and make adjustments as appropriate.
Over the next five years, NEEA will increase its effort and investment in the Residential
sector. This renewed focus on the residential sector is a direct response to input received in
the strategic planning process for NEEA to re-establish and maintain its consumer products
regional infrastructure and support significant new effciency potential identified in the 6th
Power Plan.
NEEA is prioritizing investment in the Commercial, Industrial and Agicultural sectors in the
markets where the greatest potential for cost-effective market transformation exists. A
number ofinitiatives in this Business Plan (e.g. Integrated Design, Strategic Energy
Management) are aligned with effciency potential that has been identified in the 6th Power
Plan.
Concurrently, NEEA is undertaking enhanced efforts with state energy codes and national
standards to raise the bar of effciency at both levels. These effort are strongly linked to
NEEA's work in the sectors and will help ensure that energy code proposals are based on
practical market applications and that federal standards are influenced based on documented
market acceptance and demonstrated successful practice.
Ongoing evaluation/market research for all NEEA initiatives will be conducted in a timely
and disciplined manner that facilitates decision-making and adaptive management. Over the
next five years, NEEA is placing particular emphasis on developing a robust methodology for
estimating savings associated váth business practice change in the commercial and
industrialjagricultural sectors. Rigorous evaluation of prior NEEA initiatives will be
NEEA - 2010-2014 Business Plan 18
conducted regularly to assess post market intervention baseline and market adoption and
allow the region to substantiate the long-term savings associated with those initiatives.
NEEA will leverage the following strategic approaches to achieve its goals and objectives as
outlined in this Business Plan through these market business units.
Strategic Approach to Increasing Market Adoption
NEEA pursues this goal by strategically intervening in markets with a comprehensive
approach designed to create lasting change; it removes identified market barriers and
exploits market opportunities to accelerate the adoption of all cost-effective energy effciency
as a matter of standard practice. NEEA's market interventions include working with a broad
array of market actors including manufacturers, distributors, retailers, builders, architects,
code offcials, trade and industry associations, and government organizations. Following are
key strategies NEEA will utilze in its core work of changing markets:
· Develop/maintain relationships with upstream regional and national market actors
(e.g., manufacturers, retailers, designers, builders, servce providers and other
supply-side market actors) in order to influence increased availabilty of energy
effcient products and servces
· Develop/maintain relationships with national standards-setting organizations (e.g.,
U.S. Environmental Protection Agency, U.S. Department of Energy, ASHRA) in
order to promote more energy effciency standards.
. Develop/maintain relationships with regional/national organizations that influence
building energy codes.
· Work with associations and other leveraged opportunities in targeted vertical
markets to demonstrate the value of strategic energy management and build
sustainable demand for energy effcient business practices.
· Leverage "green" effort of prominent national market actors (e.g., U.S. Green
Building Council, American Institute of Architects, Building Owners and Managers
Association); develop/maintain relationships and ensure that energy effciency best
practices are incorporated into their initiatives
· Develop and implement strategic interventions targeted at specific markets through
comprehensive market strategies
. Seek partnerships and identify new opportunities the region could benefit from (i.e.
partnership with California on the Consumer Electronics initiative)
Strategic Approach to Education and Training
NEEA's strategic approach to building market knowledge and capabilty through education,
training and technical support will continue to be a foundational component in transformng
markets.
NEEA - 2010-2014 Business Plan 19
Several key efforts comprise this approach. Energy effciency will be a core part of
professional development (e.g. training and education; continuing education; certfications)
in partnership with others, including associations such as the Building Owners and Managers
Association and Nortwest Food Processors Association, utiities/public benefits
administrators and trade alles. A suite of standardized training curricula for commercial and
industrial trade alles and building/plant operators wi be developed that deliver predictable
participant behavior change that can be tied to measurable and replicable energy savings.
Past successes in this area include the Building Operator Certcation Program and the
Compressed Air Challenge, both of which have a deemed savings estimate for delivery by
local partners.
Other areas of focus include providing code education, training and technical assistance to all
affected parties - building offcials, designers, contractors and subcontractors. Materials wil
be provided to train and educate the residential new construction market: builders, verifiers,
real estate agents; space heatig market: distrbutors, contractors; and retailers.
Strategic Approach to Promoting Energy Effciency
To promote energy effciency in Nortwest markets NEEA will help ensure, for instance, that
key influential market organizations (e.g. U.S. Green Building Council, Building Owners and
Managers Association, and Northwest Food Processors Association) fully integrate energy
effciency into their agendas.
Strategic Approach to Market Transition/Ext Strategies
NEEA takes a structured approach to defining and tracking progress toward market
transformation: before any market transformation initiative is adopted, a cross-functional
team develops an initiative logic model that clearly depicts the market situation (barriers to
and opportunities for market adoption); NEEA's planned intervention, and intended market
outcomes. The logic model includes specific market progress indicators are used to measure
progress toward market transformation.
In the past, NEEA's Business Plan encouraged initiatives to focus only on the early stages of
market adoption; progress indicators tyically focused on improved product/technology
availabilty and quality and increased end-user awareness of benefits and
product/technology adoption. Once the major barriers to market adoption were removed,
NEEA stopped funding the initiative. Afer NEEA terminated funding, utilties continued to
make cost-effective investments in increasing market penetration-but without NEEA's
assistance.
Stakeholders, however, have made it clear that NEEA should explicitly plan exit/transition
strategies for the initiatives it funds. This Business Plan calls for NEEA and partners to
explicitly identifY what role, if any, NEEA should continue to play after initial market barrers
have been overcome and market progress indicators met. Specific tactics will also be
identified for how programs and initiatives will be "handed off" to utilities. These strategies
will take into account variance in markets across the region so that successful transformation
NEEA - 2010-2014 Business Plan 20
of markets in some portions of the NW, such as the 1-5 corrdor, will not be generalized to the
entire region unless data substantiates that.
For example, after NEEA completed the first phase of its 80 PLUS project (the indicators for
which included increased product availabilty, lower price and a revised ENERGY STAR
specification), it transitioned to a second phase of the project which is limited to NEEA
providing regional coordination with retailers. It makes sense for NEEA to play this role
because it is more cost-effcient and effective for a single part to negotiate with national
market actors than for individual utilities to play that role. Similar strategies will be
developed on an initiative by initiative basis.
Strategic Approach to Regional Coordination
In addition to explicit exit/transition strategies, this Business Plan includes funding and
objectives to provide regional coordination where NEEA can deliver market influence with
upstream market actors, economies of scale, or other leverage/effciencies. Specific regional
coordination program activities to be funded will be selected based on stakeholder needs and
priorities. Examples might include coordination of: a program to improve roof-top HVAC
operating performance; creation of prescriptive design packages that meet 2030 Challenge
performance levels for smaller buildings; or regional trainings for industrial customers. In
each of these examples, while no market transformation opportunity exists, per se, NEEA can
add value by providing leverage with upstream market or by developing turnkey program
materials. These are but a few examples intended for ilustration purposes only.
NEEA - 2010-2014 Business Plan 21
4.1.1 Residential, Estimated 5-Year Budget: $43.3 Million
Estimated 5-Year
aMW Savings
Estimated 10-Year
aMW Savings
Net Market Effects
Total Regional
Consumers are primarily exposed to energ-effcient products through three channels: new
construction, remodeljretrofit and retaiL. The cru of NEEA's residential strategy is to
support and maintain a regional upstream delivery platform for energy-effcient products
and servces that complement and support utilty consumer programs through two of these
channels: new construction and retaiL.
NEEA's role is to leverage the market
power of the Nortwest to broadly
engage the building industry, dealer
networks, manufacturers, and retailers.
This allows the region's utilties to focus
on local relationships and their
individual customers. NEEA wil
accelerate distribution of highly energy-
effcient products and practices as well as
leverage a robust platform to introduce
new technological advances in energy
effciency to the region. Because the
Northwest already has a high market
penetration of ENERGY STAR level
products, NEEA plans to move the
region beyond the ENERGY STAR platform for greater savigs. An established new
construction and retail infrastructure allows an outlet for aggressively procuring and
distributing the most energy-effcient products and servces throughout the region.
New Constrction
A new construction platform is important for the region because it 1) minimizes lost
opportunities and 2) provides a path for increasing codes and locking in energy effciency
savings.
In spite of the recent housing decline, the market share for Nortwest ENERGY STAR homes
has steadily increased. Consumer awareness and demand is on the rise. Builders are finding
they can differentiate their homes with ENERGY STAR in the current housing market and
NEEA - 2010~2014 Business Plan 22
economy. 1Now is the optimal time to continue to generate demand for energy-effcient
homes.
As the new construction market has evolved over the last several years, NEEAs role must
also evolve. Traditionally, NEEA has focused on the implementation of the ENERGY STAR
Homes program (i.e. recruiting and training performance testers, verifiers, and builders and
marketing the ENERGY STAR brand). NEEA is broadening its scope to take advantage of the
multiple green building brands that have gained recognition in the market over the past
couple of years. Many of these brands do not currently require significant energy effciency as
part of their "green" definition. Therefore, addition to supporting ENERGY STAR, NEEA will
encourage "green" building programs to adopt minimum energy effciency standards and, in
turn, provide marketing and training support to help them achieve higher market
penetration.
Establishing energy effciency specifications in voluntary programs is an important part of
achieving code adoption of higher levels bf energy effciency. This provides proof that
standards are doable by a significant percentage of builders and allows NEEA to reduce
market barriers of specific technologies or practices to ready them for mass adoption (i.e.
duct testing). NEEA will continue to influence national voluntary standards for new
construction so that Northwest research and assumptions impact national efforts such as the
ENERGY STAR homes specifications and federal tax credits.
NEEA will continue to influence national voluntary standards for new construction, so that
Nortwest research and assumptions impact national efforts such as the ENERGY STAR
homes specifications and federal tax credits.
As part ofNEEA's new construction strategy, investments will be made to reduce market
barriers to new technologies that support Goal 4 (Emerging Technologies). Emerging
technology is an important future focus as it pushes construction toward net zero home
building and allows continued adoption of higher specifications for both voluntary new
construction programs and new codes. Investing in new construction technologies also has
the added benefit of spiling over to the retrofit and remodel market, increasing saving
potential (i.e. more effcient windows).
Retail - Consumer Products
A few years ago, NEEA developed a retail and upstream infrastructure for energy-effcient
lighting and white goods. The infrastructure was comprised of a network of relationships
with retailers and manufacturers. By leveraging the buying power of the Northwest, initiating
upstream programs and partnering with Northwest utilties, NEEA was able to obtain CFLs
and energy-effcient effcient clothes washers at retail at a standard above ENERGY STAR,
surpassing the availabilty of these products in other part of the country. Working together,
NEEA was able to drive consumer demand for these products. As a result, the Northwest
quickly achieved significant market share of energy-effcient clothes washers and CFLs
before the rest of the country. Savings continue to be realized from those initiatives.
Retail channels continue to have strategic importance. NEEA is rebuilding the consumer
product platform and will extend it to include any electric-powered product that affects
NEEA - 2010-2014 Business Plan 23
load (all "plug" loads). The retail channel is where consumers shop and the region must
influence what products are available and promoted. This is essential to ensuring that real
change occurs in the market adoption of energ-effcient products. NEEA's strategy will
address big box, regional, independents, and online retailers as well as manufacturers whose
products affect energy effciency (i.e. adjusting manufacturer defaults for brightness and
standby settings on 'Is) and upstream buy-down programs. NEEA's initial ara of
focus will be in the electronics sector. Plug load growt is the fastest growing
residential end use and a big concern of the Northwest region. In 2009 NEEA will focus on
high-definition'Is. As budget allows, this focus will expand into lighting, white goods, and
other areas of opportunity. NEEA will work with utilties to ensure our efforts are
complimentary and not duplicative.
New Opportunities
TopTen. Consumer products are changing rapidly while current effciency programs tend to
get updated on slower cycle. This creates a lag between new products and responsiveness of
programs such as ENERGY STAR. To address this issue, NEEA wi invest in TopTen USA,
modeled after an established website in Europe that highlights the ten most energy-effcient
products in a wide array of popular home purchase categories. In Europe, the site has been
successful in spurring the development of energy-effcient products among manufacturers,
decreasing the cost of energy- effcient technologies, and accelerating the adoption of these
products by consumers. TopTen has now entered the U.S. market. By getting involved early
and partnering with other national supporters of this effort. NEEA will be able to influence
the development of TopTen content and connect it directly to Northwest retail channel
efforts. Claire Fulenwider serves on the TopTen Board of Directors, helping to help ensure
the direction of the effort is strategic for the Nortwest and its customers.
Promising New Products. There are a number of new products
currently in the market that are good candidates for market
adoption. For example a regional ductless heat pump pilot is
being conducted in the Northwest from 2008-2010 to quantify
energy savings, non-energy benefits and to evaluate consumer
acceptance. We expect the pilot to realize significant savings in the
space heating category - one of the biggest energy use areas of the
home. In the 2010-2014 timeframe, adoption will be accelerated by
working upstream with manufacturers to ensure the latest models
of ductless heat pumps are regionally available. NEEA will build
upstream relationships and provide training for partners working
with distributors to help ensure products are appropriately priced
and marketed. In addition, market barriers will be monitored and
addressed. As market barriers are overcome, NEEA wil coordinate
with utilty partners to transition this initiative to them for wide-
spread promotion and program support.
NEEA - 2010-2014 Business Plan
A strong opportunity to
deliver a potential 200 aMW
in the Northwest in existing
single-family homes that
could grow to 400 aMW with
the addition of existing
manufactured and multi-
family homes.
24
Regional Coordination
The residential sector will coordinate with partner servces and utilties to identify and
support economy of scale opportunities for the region like regional residential forums or
specific opportunities such as new applications for solid state lighting (e.g. holiday LED
lights).
Residential Contrbutions to Strategic Goals
NEEA - 2010-2014 Business Plan 25
Residential 2010-2014 Estimated Budget
Residentials- Year Estimated aM Savings
80
70
60
50
40
30
20
10
o
Net Mkt Effects
II New Construction I~ Lighting
Total Regional
. Appliances II Consumer Electronics HVAC
NEEA - 2010-2014 Business Plan 26
4.1.2 Commercial, Estimated 5- Year Budget: $43.0 Million
Estimated 5-Year aMW
Savings
Estimated 10-Year
aMW Savings
Total Regional
Net Market Effects
The commercial sector is complex. It is a collection of markets, each with its own
characteristics, motivations, challenges and opportunities. While these markets are distinct,
they relate to one another, with best practices in one market also applying, with variations, to
another market. Related trade ally products and servces apply across multiple commercial
markets. NEEA's commercial sector building initiative, BetterBricks, addresses individual
market distinctions, while capitalizing on similarities and market interrelationships.
A cross-cutting approach to building demand for energy effciency
~fJllDlNG
OHRATIONS
DESKiN I;
CONSTlIJON
CURRENT FOCUS PAST FOCUS FUTURE FOCUS
As ilustrated above, the commercial initiative simultaneously and systematically drives
market transformation in the commercial sector by building .demand for and supply of
energy effcient products and servces in these markets. The approach is a continuation of the
strategy and activities initiated in the previous business plan, addressing market barrers to
accelerate commercial sector energy effciency and capitalize on market opportunities in
partnership with the region's utilties and business associations. The strategy is rooted in
education and professional development, with activities ranging from advisory assistance to
seminars and workshops focused on advancing best practices.
NEEA - 2010-2014 Business Plan 27
Demandfrom Owners
Under the banner of BetterBricks, NEEA works with companies on a strategic approach to
energy management that addresses all business practices that impact energy use. These
practices span the organization, and include building design and construction, building
operations, purchasing equipment and servces, and capital upgrades. Best practices result in
organization-wide and building-specific energy peiformance targets, consistent financial
decision-making based on total cost of ownership, energy-effcient equipment purchasing
guidelines, building operations staff training and enhanced building servce contracts.
A strategic approach provides
decision makers with the means to
better manage energy within their
organizations and reap the benefits
of energy effciency. With energy-
related business practices in place
across an organization, the demand
for energy-effcient products and
servces increases. For example,
construction managers know how to
ask for and demand energy-
effcient, high- peiformance new
buildings. Facility managers know
how to improve existing building
operating peiformance and engage
building servce providers for
support. The approach
complements the work of utilties
and helps them meet their own
energy effciency targets. As
companies strive to meet their
organization-wide energy reduction
targets, their participation in utilty
technical and financial assistance
programs increases.
NEEA is currently working with a third of the healthcare market and three prominent real
estate companies on strategic energy management (SEM), with initial company goals ranging
from 10-30% reduction in energy use. For the 2010-2014 Business Plan, NEEA intends to
build on these efforts, achieving the following objectives:
· 65% of hospitals practicing SEM (measured by # of beds)
. 50% of offce real estate practicing SEM (measured by floor space)
. 15% of other commercial practicing aspects of SEM (measured by floor space)
NEEA - 2010-2014 Business Plan 28
The goal is to enable organizations to independently employ a strategic approach to energy
management with continuous improvement in their practices. Broad based education,
training and marketing efforts, including use of the BetterBricks website
(WW'\.betterbricks.com), will be used to influence commercial markets. NEEA wil work with
Northwest energy effciency organizations (utilities, Energy Trust of Oregon, Bonnevile
Power Administration, and state and local programs) to include components of strategic
energy management in their own programs to achieve higher levels of energy savings.
Supply: New Constrction
On the supply side, NEEA focuses on trade alles involved in building design and
construction; including architects, design engineers and construction contractors. These
trade alles have limited exposure or experience with energy-effcient, high-performance
building design and construction practices. Best practices are rapidly advancing due to the
growing interest in sustain abilty, making it challenging for practitioners to remain current.
NEEA provides professional development opportunities (training), access to tools and
expertise, project-based design assistance and case studies that enable professionals to
advance their practice and meet changing client expectations. Training is often offered
through leveraged partnerships with market-based organizations that serve target audiences,
such as the American Institute of Architects or the U.S. Green Building CounciL.
The Integrated Design Lab network is the hub ofNEEA's efforts to advance energy- effcient,
high-performance building practices within the region's design community. Located
throughout the region, and associated with the region's universities, the labs are regional and
national leaders in energy-effcient design practices. The labs are actively working with
design firms representing more than 50% of the healthcare and offce real estate new
construction markets. The labs conduct research, deliver training and provide project-based
advisory assistance to continually raise the bar on energy performance of newly designed
commercial buildings. They are helping the design community meet the increasing energy
effciency goals of American Institute of Architects' 2030 Challenge and the United States
Green Building Council's Leadership in Energy and Environmental Design (LEED)
standard's.
NEEA's goal is to enable the design and construction industry to build energy-effcient, high-
performance buildings that progressively achieve greater levels of effciency and
performance. For the 2010-2014 Business Plan, NEEA intends to achieve the following
objectives:
· 50% of architectural and design engineering servces within targeted markets achieve
energy savings consistent with 2030 Challenge Targets (50% or + over current
practice).
· 30% of designjbuild contractor servces within targeted markets achieve energy
savings consistent with 2030 Challenge Targets (50% or + over current practice).
While the objectives speak to the offce real estate and healthcare markets, NEEA's design
and construction efforts work across all commercial markets. In 2008 the labs assisted
NEEA - 2010-2014 Business Plan 29
architects in advancing their integrated design skils on 137 projects throughout the region,
40% within the targeted markets and 60% outside the targeted markets, including schools,
retail stores, and university/college buildings. Work wil continue across all commercial
markets while emphasizing key target markets. The design/build contractor focus is new for
NEEA, and represents a push to further influence the design and construction of smaller
buildings in the region.
Supply: Building Operations
NEEA also works to build the skills and capabilties of those who operate and maintain
existing commercial buildings; including building operators, mechanical contractors,
building controls companies and equipment manufacturers; thus, increasing the supply of
competent workforce in energy effciency fields. Most building operators and building servce
providers lack the skills and experience needed to improve building operating perrormance.
NEEA provides professional development opportunities (training), access to tools and
expertise, and project-based assistance to build the capacity of both in-house staff and trade
alles. As with new construction, training is often offered through leveraged partnerships
with market-based organizations that serve target audiences, such as the Building Owners
and Operators Association or the American Society of Heating, Refrigerating and Air-
Conditioning Engineers (ASH RAE)
As building owners adopt a strategic approach to energy management, their expectations
increase for how buildings perrorm. This gives building servce providers that have invested
in developing new skills and capabilities an excellent opportunity to offer clients building
perrormance servces. NEEA is currently workig with half a dozen servce providers across
the region on their servce offerings and capacity to deliver, including two of the largest
mechanical contractors in the region. Building tune-up and enhanced operations and
maintenance (O&M) servces offered by these companies can often yield the building owner
10-20% low cost energy savings and serves as a good lead in to utilty technical and financial
assistance programs.
NEEA's goal is to enable building operators and servce providers to significantly improve the
operating perrormance of existing commercial buildings. This Business Plan should result in
50% of building operators and servce providers within targeted markets achieving building
operating perrormance that saves 30% or more energy than current practice.
Building operations work will continue across all commercial markets while emphasizing key
target markets. NEEA is and wil continue to promote better roof-top HV AC operating
perrormance for smaller buildings. NEEA is working with Northwest energy effciency
organizations (utilties, Energy Trust of Oregon, Bonnevile Power Administration, etc.) to
include building operating perrormance for both large and small buildings in their own
programs to achieve higher levels of energy savings
Offce Electronic Equipment
Offce equipment now makes up a substantial portion of overall commercial sector energy
use. Clear product differentiation, lack of model procurement specifications, and product
availability are key market barriers in this area. NEEA will work upstream with
NEEA - 2010-2014 Business Plan 30
manufacturers, distributors and vendors of offce equipment to remove these barriers to help
ensure better choices for businesses in the Northwest. NEEA wil build on previous work
supporting the adoption of more energy-effcient desktop computers and broaden this scope
to include computer monitors, imaging equipment, servers, and other significant "plug"
loads. NEEA 'wil also work to develop decision-maker tools including model specifications,
business-case templates, and procurement policies.
Regional Coordination
NEEA will coordinate with utilties to identify and support additional economy-of-scale
opportunities for the region like options that enhance utilty program offerings directed at
small commercial customers. Some of these options could leverage related NEEA activity,
such as improving roof-top HV AC operating performance or prescriptive design packages
that meet 2030 Challenge performance levels for smaller buildings.
Estimated Energy Savings
NEEA is placing particular emphasis on developing a robust methodology for estimating
savings associated with the business practice changes that are the focus of the BetterBricks
initiative. Evaluation efforts to date have validated building-level savings for BetterBricks
participants--a critical component of proving that the business practices promoted by
BetterBricks result in energy savings. Future evaluation efforts will focus on additional
energy savings validation and improved tracking/data collection that allows NEEA
to established "deemed" savings values that can be tied to specific business practices.
Commercial Contrbutions to Strategic Goals
NEEA - 2010-2014 Business Plan 31
NEEA - 2010-2014 Business Plan 32
Commercial 2010-2014 Estimated Budget
Commercials- Year Estimated aM Savings
80
60
40
20
o
Net Mkt Effcts Total Regional
. Capital Projects
¡¡ Purchasing and Procurement
ii Building Operations
. New Construction
NEEA - 2010-2014 Business Plan 33
4.1.3 Industrial and Agriculture, Estimated 5-Year Budget:
$34.2 Million
Net Market Effects
Total Regional
Estimated 5-Year aMW
Savings
Estimated 10-Year
aMW Savings
At roughly 5,5005 aMW per year, the industrial and agricultural sectors are the largest
electrical energy consumers in the Nortwest with an estimated savings potential ranging
between 420 aMW and 820 aMW9. These energy savings represent more than just a
resource for the region's electrical system; they represent a significant opportunity for
diverse Northwest manufacturing industries to achieve or maintain a competitive advantage
in today's global market place.
Despite the energy savings potential for this sector, significant barriers have prevented the
region as a whole from realizing the available industrial energy efficiency potentiaL. These
barriers can be characterized as:
. A lack of technical solutions
developed in collaboration
with specific industry
segments;
. A near-exclusive focus on
short-term tactical programs;
. A lack of collaboration among
industry, utilties and
government at a regional leveL.
9 NPCC 6th Conservation Plan Industrial Supply Curv, Regional Technica Foru Presentation Januar 6, 1008
NEEA - 2010-2014 Business Plan 34
Acquiring energy efficiency within the industrial and agricultural sectors is no simple task.
Within industr, energy effciency competes with production and quality initiatives-
initiatives that have long histories of quickly and tangibly influencing a company's bottom
line. Within agriculture, competing initiatives for water and for crop production also
compete with capital for energy effciency projects. Based on key learnings from the 2005-
2009 funding cycle, NEEA's strategy for 2010-2014 addresses these region-wide barriers
through three integrated initiatives. Together, these initiatives support NEEA's mission and
work in tandem with the region's stakeholders to create sustainable energy savings in the
industrial and agricultural sectors. The three initiatives are:
1. Collaborative Energy Strategies - This initiative convenes and mobilzes
executive management by leveraging existing industry groups (trade associations,
allances, geographic clusters or government-led clusters) to set industry-wide energy
intensity reduction targets and create plans to achieve those targets. Once plans are
in place, the initiative fosters national, regional, state, and local partnerships to
support the industry group in achieving short- and long-term energy objectives.
2. Strategic Energ Management (SEM) - This initiative provides a framework for
utilities and market players to support companies in integrating energy management
into their company cultures, beginning with the executive suite and extending to the
shop floor. This framework institutionalizes a systemic, corporate-wide approach to
energy effciency that enables companies to manage energy as a controllable expense.
3. Regional Coordination - This initiative focuses on partnerships with regional
stakeholders to develop energy effcient, market-ready offerings that Nortwest
utilties can provide to their industrial and agricultural customers.
Combined, these three initiatives weave a focus on industry-wide efforts, company- or plant-
specific activities and ongoing technical support through utilties to individual customers.
Collaborative Energy Strategies
By working directly with industr executives through industry groups, NEEA forges
partnerships among industry, utilties, and government to enable shared perspectives on
critical energy issues. These groups, which can include industry associations, industry
allances, geographic clusters or government-led clusters, provide a trusted reference point
which can focus on energy effciency at a broad leveL. Through this approach, NEEA
promotes dialogue so participants understand the issues, find commonalities on which to
build energy strategies, uncover mutual objectives and create a joint plan for saving energy.
From 2010 - 2014, NEEA will use its proven approach in the food processing industry as a
template to implement Collaborative Energy Strategies in at least three energy-intensive
industries in the region. This replication of process is designed to steadily decrease NEEA
involvement with each subsequent group. Key elements of this strategy will include working
with industry groups in developing an industry-wide energy plan and supportng them with
industry-wide:
NEEA - 2010-2014 Business Plan 35
1. Design of Programs
2. Tracking of Energy Savings
3. Implementation of Program Elements
4. Development of Infrastructure
5. Innovation of Industry Specific Processes and Technologies (supported and funded
by the Emerging Technologies Business Unit)
6. Dissemination of Industry-Specific Best Practices
All of these activities wil leverage available resources such as national initiatives through the
U.S. Department of Energ, existing regional effort (e.g. BPA), and local utilty effort.
In 2010-2014, NEEA will continue to work with the Nortwest Food Processors Association,
which represents an annual consumption of more than 800 aMWIO, to secure collaborative
partnerships that support industry in achieving energy-intensity reduction objectives;
documenting and disseminating industry-specific best practices, key learnings and
approaches to overcoming barriers to adoption of industrial energy effciency measures.
Central to this strategy is the partnership with the U.S. Department of Energy which has
helped fund and develop the approach and helps support its implementation and
dissemination of the approach into other industries.
The framework developed with the food processing industry will be leveraged in work with
other industries, such as the pulp and paper industry to engage in a partnership with forest
products industry associations, U.S. Department Of Energy, and regional stakeholders in
adopting an industry-wide plan to reduce energy intensity. NEEA wil employ the best
practices and framework from these industries to affect other industry groups. By 2014,
NEEA plans to work with a total of four additional industry groups, so that collectively,
NEEA will address 50% of the region's industrial load.
Strategic Energy Management
As energy prices increase, industrial and
agricultural companies in the Nortwest are facing
significant challenges, including erosion of already-
slim profit margins. Embedded energy costs are
tyically managed separately from product costs
and are often assumed to be insignificant to other
production costs. As electricity and natural gas
prices rise quickly, that assumption is no longer
valid for most of the region's industrial companies.
Companies are now looking for an approach that
uses proven industry management techniques and
can be integrated into existing management
10 NPCC 6th Conservation Plan Industrial Supply Cure, Regional Techn
NEEA - 2010-2014 Business Plan
Strategic Energy Management
36
practices. According to the NWCC's 6th Conservation Plan Industrial Supply Curve
(Regional Technical Forum Presentation January 6, 2008) energy management has the
potential to deliver approximately 200 aMW by 2030.
A successful energy management system is generally characterized by:
. Measurement and reporting systems
. Assessments and technical potential
. Employee awareness and behavior
. Executive commitment and proper organizational structure
By working in collaboration with industrial companies and electric utilties, NEEA is
developing a definition of energy management that is:
1. Practical for facilties to implement
2. Complementary to utilty programs and industry-wide initiatives
3. Based on proven industrial management practices and
4. Leads to tangible short-term and long-term results
NEEA's approach to Strategic Energy Management provides a fundamental framework to
permanently embed energy management as a core business practice throughout industry in
. the Northwest. To achieve this, NEEA focuses on creating industrial energy management as a
viable, for-profit market by generating demand for energ effciency among industrial energy
users and enhancing supply of energy effcient products, seIVces and practices from
qualified providers.
NEEA increases the market availabilty and support for Strategic Energy Management
through a comprehensive approach that includes six key elements:
1. Continued Development and Refinement of the Practice of Strategic Energy
Management
2. Collaboration \"ith Electric Utilities
3. Energy Management Education and Training
4. Standards Development
5. SeIVce Provider Development
6. Demonstration Projects
Through the implementation of these six elements, NEEA expects 16% of all Northwest
industries to adopt and implement an energy management policy by 2014. NEEA will also
work to ensure that Strategic Energy Management can be integrated into utilty industrial
and agricultural programs in the Nortwest.
Regional Training
Since 2005, NEEA has coordinated industrial training in the Northwest, proving not only
market demand across nine regions, but across multiple industries as well. To date,
industrial training has focused on systems that drive industrial production: motors, pumps,
compressed air, and refrigeration.
NEEA - 2010-2014 Business Plan 37
As NEEA continues to coordinate regional industral training, the organization wil look to
industry to help define the training and education needs of its workforce, and to investigate
delivery methods, such as distance and web-based learnig, to ensure not only that curricula,
but the format in which it has been delivered continues to support industry in meeting the
challenges of a carbon constrained economy.
Regional Coordination
NEEA V\'Ìll collaborate with utilties, industry and the agricultural sector in the Northwest to
identifY market-ready industrial programs with components that can be customized by each
utilty to best meet its business needs. A priority for these efforts will be irrigation. The
Industrial and Agricultural Sector Staff wil coordinate with the Emerging Technologies and
Partner Servces business units to help disseminate best practices and identifY research
opportnities in this area.
Estimating Energy Savings
NEEA is placing particular emphasis on developing a robust methodology for estimating
savings associated with Strategic Energ Management (SEM). Evaluation efforts to date
have validated facilty-level savings for SEM participants-a critical component of proving
that the business practices SEM comprises result in energy savings. Future evaluation efforts
will focus on additional energy savings validation and on advancing a top-down approach to
estimating facilty-level energy savings that allows NEEA to establish "deemed"
savings for SEM.
Industral and Agricultural Contrbutions to Strategic Goals
NEEA - 2010-2014 Business Plan 38
NEEA - 2010-2014 Business Plan 39
Industral 2010-2014 Estimated Budget
Industrals-Year Estimated aM Savings
80
60
40
20
o
Net Mkt Effects Total Regional
. Regional Programs
Energy Management
il Other Targeted Industries
. Food Processing
NEEA - 2010-2014 Business Plan 40
4.1.4 Codes and Standards, Estimated 5- Year Budget: $7.4
Million
Policy makers at the federal, state and local levels have recently passed legislation or issued
executive orders to significantly increase the stringency of energy codes as a key strategy to
reduce energy use and consequently global warming. NEEA has played a key role in creating
new codes to help achieve policy makers' stringency goals. Over the past 12 years, NEEA has
worked within the region to support the development of energy codes that are practical,
effective and grounded in market realities. Once codes are adopted, NEEA provides
education, training and technical support to hundreds of local jurisdictions which implement
the codes. This supports high compliance rates that in turn maxmize energy savings.
Similarly, NEEA has played a role in standards efforts at the U.S. Department of Energy.
NEEA has provided documented market and technical input into the public process hearings
which determine national appliance and equipment standards. By providing market data
and experience, NEEA's participation has allowed the Nortwest to have a significant
influence in the standards process.
NEEA also participates in organizations/forums/processes which determine voluntary codes
and standards, particularly those with a direct connection to NEEA's core sector initiatives.
Examples include LEED and ENERGY STAR. For initiatives that extend beyond energy (Le.
"sustainabilty" or "green"), NEEA will work to ensure that minimum energy effciency
requirements are significantly higher than applicable mandatory codes and standards.
More stringent codes and standards save energy in all buildings, benefiting both ratepayers
and utilties. Furthermore, .codes and standards set the floor for effciency. As that floor is
raised, voluntary programs and market actors seeking to differentiate themselves are forced
to improve. This dynamic ensures a constant influx of new effciency approaches and
technologies into the market. NEEA is the only organization which comprehensively
addresses energy codes in all four nortwest states. NEEA has been by far the largest funder
of energy code support in the Northwest for more than ten years.
Codes and standards playa key role in "locking-in" energy savings that have been
demonstrated through voluntary programs. Together, the voluntary and code efforts
represent a substantial energy savings resource. A recent example of this synergy can be
found in the relationship between Oregon's recent residential energy code that was based
largely on provisions pioneered in the ENERGY STAR Homes Northwest program. Other
examples exist in consumer products such as high-effciency clothes washers and in
commercial new construction with day lighting.
In recognition of the relationship between voluntary programs and codes, the savings from
both have been combined and are reported under the "new construction" category for both
residential and commercial sectors. However, if they were counted separately, the five-year
total regional and net market effects savings from codes are projected to be 29 aMW and 21
aMW respectively."
NEEA - 2010-2014 Business Plan 41
Specific savings for effciency standards are not included in the energ savings projections for
this Business Plan. This is due to the high levels of uncertainty around both what levels of
effciency will ultimately be adopted as well as what level of attribution can be credited to
NEEA. However, the savings from these effort could be very substantial for the Northwest,
regardless of attribution. If only a porton of the 25 federal standards scheduled for review
are made more effcient, it is well within possibilty that the region could see over 50 aMW of
savings over the five-year Business Plan period and well over 100 over the ten-years of 2010-
2019.
Codes and Standards Contrbutions to Strategic Goals
Codes and Standards 2010-2014 Estimated Budget
NEEA - 2010-2014 Business Plan 42
4.2 EMERGING TECHNOLOGIES, ESTIMATED 5-YEAR BUDGET:
$19.8 MilLION
Net Market Effects
Total Regional
Estimated 5-Year aMW
Savings
Estimated 10-Year
aMW Savings
NEEA's goal of market change and the region's collective energy effciency goals depend on a
continuous pipeline of commercially available new energy effciency technologies and
practices. Over the years, NEEA has played a role as an intermediary between laboratories
and the market by coordinating demonstrations and evaluations of new technologies and
practices and by designing and implementing strategic market interventions that successfully
remove barriers to market availability.
Many of the current success stories in energy effciency - compact fluorescents (CFLs),
resource efficient clothes washers, super-effcient windows, and premium effciency motors
- were the result of development work in emerging technologies in the 1980s and early
1990S that were accelerated with market transformation in the 2000S. However, as a result
of concerns over stranded costs during deregulation of the electric utilty industr in the mid-
1990S, work on emerging technologies was significantly ramped down. NEEA's own effort
have most recently been focused on securing widespread adoption of currently available
technologies. As a result, there are currently few new energy effciency opportunities ready to
replace the benefits provided by these more mature technologies.
The emerging technologies business
unit of NEEA will help the region
begin rebuilding this critical area and
fillng the effciency pipeline for the
future by managing an ongoing
portfolio of commercially viable
emerging technologies and practices.
This Business Plan defines end-use
emerging technologies as effciency
technologies or practices that are
commercially available but with low
(-1% or less) market share. Further
refinement of this definition will be
undertaken with advice from the
expert advisory committee for
emerging technologies. NEEA will
identify and develop strategic
NEEA - 2010-2014 Business Plan 43
interventions to overcome barriers impeding the commercial availabilty and success of these
new effciency opportunities. NEEA wil be measured against this goal by the future energy
savings associated with the emerging technology projects that the organization helps become
commercially available.
A variety of strategies will be used to discover, assess and initially introduce new products,
servces, and practices to the market. Basic research and development activities are not in
scope. NEEA's work is focused on technologies and opportnities for products that are either
commercially available or near commercialization.
Throughout NEEA's operations, NEEA is committed to help ensure that its work in emerging
technologies is complementary to other regional activities in the same area. NEEA will
coordinate and collaborate with BPA, universities, national labs and others to develop an
Emerging Technology initiative that will most effectively leverage existing activities and fill
the gaps where NEEA is best suited to serve the region's needs. Our obligation is to assure
that the region's needs for emerging technologies are being met.
1. Opportunity Discovery and Assessment - The latest developments in
technology and markets that have potential to become significant new effciency
opportunities will be discovered and assessed as follows:
. Targeted Market Research - Market research will be focused on areas of
promising opportunity. Projects will consist largely of secondary research
summarizing existing work supplemented by primary research as appropriate to
the scale ofthe opportnity.
. Relationships with Key Research Institutions - Research efforts that
promise to deliver new commercializable technologies wil be identified. Regular
contact with and potential partnerships wil be established as appropriate with
regional universities, national laboratories, and others.
. Review of Technology and Market Trends - Staff time wil be dedicated to
search out and review publicly available information on new technologies with an
NEEA - 2010-2014 Business Plan 44
eye towards areas of specific interest to the Nortwest and markets which the
region could influence.
. Regional/National Partnerships - Formal partnerships will be established
as appropriate including funding participation in effort with entities such as U.S.
Department of Energy, California's Public Interest Energy Research, EPRI, etc.
. Unsolicited Proposals - This tactic re-invigorates NEEA's dormant
unsolicited proposal process to anyone with new opportunities. This process
previously provided some very innovative projects for the region. Solicited
proposals may be utilized as well.
2. Opportunity Confirmation - This strategy confirms the technical and market
opportunities identified in the discovery and assessment stage. Limited field
demonstrations and market research will be used to confirm energy savings,
performance issues, market size, opportunity and the like. Demonstrations will also
provide preliminary confirmation of barriers to market acceptance.
. Field Demonstrations - These will include measurement and testing of
technical performance in a variety of dimensions. These activities are aimed at
understanding real-world impacts of the technology and identifyng the full set of
technical issues associated with field applications.
. Market Research - These projects would include focus groups, or other
primary research activities intended to get a preliminary understanding of
market response to the new effciency opportunity. Market research needs to be
coupled with technical demonstrations to understand the non-technical
dimensions of the project such as business operations impacts of the new
technology/practice.
Previous examples of NEEA projects in this category include the original Ductless Heat
Pump Demonstration project in Grant County Washington, field demonstrations of the
Desert CoolAre Hybrid Evaporative Packaged Rooftop Unit project, and the demonstration
ofthe Laser-Ultrasonic Stiffness Sensor at Boise Cascade's St Helens paper mil.
3. Market Intrduction: Preparing for fu-scae market adoption - These
projects are intended to test emerging opportunities in real market conditions in
scale large enough to understand the issues related to a full-scale market intervention
effort. These projects would be large enough to allow NEEA to engage with upstream
market actors such as manufacturers and distributors to develop key relationships
that would support leveraged value to the region under a larger scale effort. They
would involve utilty partners directly in testing interaction with utility programs.
. Pilot Projects - Pilot projects are generally limited in scale to a few markets or
geographic regions where the emerging effciency opportunity is available
NEEA - 2010-2014 Business Plan 45
through normal market channels and instaled in the anticipated applications.
Pilot projects are initiated to gather statistically significant data on technical
performance, cost and energy savings and to identify remaining technical barriers
on either the upstream channel side (manufacturing, distribution or retail) or on
the customer side (installation problems, operation diffculties, etc.).
. Market tests - Market test are sometimes conducted in parallel with technical
elements of pilot projects but are more focused on the end-user reactions to the
emerging technology. Market tests are intended to gather statistically reliable
data on end-user attitudes and experiences with the new technology and provide
the validation of the original logic model for market transformation by sorting
out significant market barriers from those that are less important.
Previous examples of NEEA projects of this tye include the Ductless Heat Pump
Pilot Project, the Double-Your-Savings rebate pilot for Clothes Washers, and the
Envinta One-to-Five Energy Management Practices Pilot project.
4. Information Servces - This component wil leverage the Partner Servces
communication vehicles (websites, newsletters, conferences, etc.) to provide updates
to NEEA partners on activities and results from new and emerging effciency
opportunities. This component would be targeted at developing appropriate content
for the various communication needs to the partners.
. Content Development - In addition to the formal report developed as a
standard part of the emerging technologies work, NEEA will develop several
different levels of content for use in a variety ofless technical medium. This
content will be delivered and made available for re-publication to NEEA's
partners for use in their own communications vehicles.
. Iriormation delivery (web, print, newsletters, etc) - NEEA will provide
regular updates to its partners on emerging technologies efforts through web
content, newsletters and hardcopy as appropriate.
. Interactive: Corierences, Webinars, etc. - In conjunction with NEEA's
Partner Services business unit, NEEA will provide interactive exchange with
regional partners through semi-annual webinars and through sponsorship of an
emerging technologies session at regional energy effciency conferences.
Regional Coordiation
Multiple emerging technologies programs are in place across the Nortwest. NEEA will work
with regional stakeholders to establish a coordinating committee to help guide and
coordinate regional emerging technologies efforts. This body will serve as NEEA's
expert/advisory committee for emerging technologies efforts, providing a common regional
forum for identification of high priority emerging technologies activities and will faciltate
implementation coordination of initiatives among the players. The coordinating committee
provides the stage for collaboration on individual projects where multiple entities could join
together to bring each organiation's core strengths to a given project. It would also serve as
NEEA - 2010-2014 Business Plan 46
a focal point for reporting and review of progress towards regional emerging technology
goals.
One example of effective coordination under the coordinating committee would be a joint
project targeted at heat pump water heaters (HPWHs) where BPA and the National Labs
could take a lead role in conducting laboratory performance testing while NEEA could take a
lead role in market research and development of a regional strategy for market introduction
of the new product. Other examples would include BPA and NEEA cosponsoring a special
workshop on emerging technologies at BPA's annual energy effciency conference. Emerging
technologies was the focus of NEET workgroup # 2. The final results of this workgroup will
help to further define NEEA's role in this area.
NEEA - 2010-2014 Business Plan 47
Emerging Technologies' Contrbution to Strategic Goals
NEEA - 2010-2014 Business Plan 48
Emerging Technologies 2010-2014 Estimated Budget
NEEA - 2010-2014 Business Plan 49
4.3 PARTNER SERVICES, CORPORATE COMMUNICATIONS,
AND REGIONAL MARKET RESEARCH/EVALUATION
This business unit comprises three distict business functions, all of which include delivery
of value-added information servces to NEEA's stakeholders.
4.3.1 Partner Servces & Communications, Estimated 5- Year
Budget: $13.1m
During the extensive planning outreach efforts, stakeholders made it clear that they want
NEEA to step up its efforts to provide servces for utilty/energy effciency program staff. The
Partner Servces business unit described in this plan comprises a variety of servces that
NEEA will provide to support its funders'
and stakeholders' energy effciency
programs.
The goal of Partner Servces is to support
utilities and other energy efficiency
organizations. NEEA will determine the
specifc serices to be provided based
on the needs and priorities of its
funders. Based on feedback to date, this
Business Plan assumes Partner Servces will
include information servces, and events and
training.
Information Servces - Stakeholders
clearly expressed the desire for a
"clearinghouse" for energy effciency
information servces. Stakeholders
mentioned a variety of topical areas they would consider valuable, including information on
best practices, emerging technologies, a compendium of utilty marketing communications,
and many others. NEEA will make information available to stakeholders via web-based tools
that are easily accessible and that allow stakeholders to provide content to their customers.
NEEA will work closely with its partners to prioritize information content, tools, and servces
that stakeholders find most valuable.
Events and Training - In addition to delivering regional information servces, NEEA
plans to host at least two annual regional conferences or forums on topics of interest to
regional partners (e.g. energy efficiency program best practices, emerging technologies) that
allow them to exchange information with colleagues and industry experts. NEEA also plans
to coordinate two training events per year for energy effciency program staff on topics of
interest to them (e.g. customer segmentation and program marketing).
NEEA - 2010-2014 Business Plan 50
Parter Servces Delivery - NEEA will deliver partner servces through a variety of
mechanisms that best suit the objectives of the servce. These mechanisms will likely include
(but are not limited to):
Web site(s) - Stakeholders have expressed the desire for a "one-stop shop" for energy
effciency information. NEEA envisions developing its web site to serve as portal to a
variety of information resources for energy effciency programs. These resources will
likely include information on best practices, emerging technologies, a database of utilty
energy effciency program information (e.g., plans, programs, program materials),
customizable marketing and information tools for customers, market
research/evaluations and key findings, building characteristics databases (e.g.,
Commercial Building Stock Assessment), standardized surveys/questionnaires and
methodologies, and links to available information from NEEA partners.
In-person events - Although web-based information is generally the most easily
accessible and economical way to share information, stakeholders value the opportunity
to interact in person with and with their counterparts at other utilties in the region.
Periodic in-person workshops and forums present an opportunity to share and discuss
ideas, and also allow the opportunity for in-depth exploration and discussion of specific
topics. NEEA anticipates conducting or partnering on at least two in-person events and
per year.
Web-based events -While in periodic in-person events offer the opportunity for
valuable discussion and networking, time and money constraints can make travel diffcult
or impossible. NEEA recognizes this reality, and will also make partner servces
accessible via web-based events.
Circuit rider - NEEA has heard clearly from stakeholders-particularly those located in
areas remote from the 1-5 corridor that they value direct contact with NEEA staff. In
response to this feedback, this business plan includes funding for a "circuit rider" who will
periodically visit utilities throughout the region. This person will ensure that NEEA is
able to more equitably incorporate the interests of the entire region and that all
stakeholders are aware of NEEA's activities and how they can potentially help them
achieve their goals.
Partner Services Coordination
NEEA is committed to executing its partner servces activities in a way that avoids overlap
with the activities of other energy effciency organizations,; NEEA would not re-create or
duplicate information services or events that are already offered by other entities. The
process for identifyng the most valuable information servces and avoiding duplication
will include:
1. Identify stakeholders' unmet needs, via regular communication with NEEA
expert committees, regional forums, and utility/energy effciency program staff
NEEA - 2010-2014 Business Plan 51
2. Identify already-existing resources that can be leveraged/modified/extended to
meet those needs (Le., don't "re-invent the wheel")
3. Develop plans for new/modified/extended servces in coordination with
stakeholders, to ensure that those servces complement-not duplicate or
compete with-servces that are already offered or planned.
So, for example, if stakeholders were to identify the need for a marketing toolkit for CFLs,
and if BPA already plans to provide that to its customers, NEEA would work in concert with
BPA to figure out the best way to make that resource available to all Northwest utilties.
NEEA would not duplicate or compete with that servce. Another example might be
information on emerging technologies. Several organizations track development of emerging
technologies (e.g. E-Source, EPRI). If stakeholders identify a need for this information,
NEEA will first determine what already exists, and work with stakeholders to identify the
most effcient approach for making the information they need accessible to them.
Corporate Communications
Partner servces will be tightly coordinated with NEEA's corporate communications function.
Whereas Partner Servces is focused on resources to support utilty programs, Corporate
Communications is focused on communication related to all of NEEA's activities. NEEA's
corporate communications function comprises three primary areas: funder reportng; funder
relations; and stakeholder/public communications.
Fuder Reportg-Funder reportng includes periodic and ad hoc reports to and
for NEEA's funders, such as NEEA's corporate annual report, an annual and
quarterly report of aMW savings and other non-energy results at the servce territory
level, a regular report of accomplishments to NEEA's funders, and ad hoc report of
accomplishments in particular states or regions as required. These reports will help
directly address accountabilty, as well as NEEA's core value of transparency and
openness. The reports could be used for other uses (ie. to help utilties with load
forecasting).
Fuder Relations-This Business Plan calls for NEEA to work closely with its
funders to help them achieve their goals. Under this plan, NEEA wil implement a
more formal system of outreach and two-way communication than NEEA has had the
resources for in the past. Specific activities will include NEEA's participation in and
coordination of regional energy effciency forums, periodic in-person meetings, and
more frequent conversations with stakeholders. Success wil be measured via
NEEA's annual stakeholder satisfaction survey and other feedback. These efforts will
be tightly integrated with partner servces activities as well as regional planning
acthities.
Staeholder/Public Communications-This business unit is also responsible
for NEEA's ongoing communications with stakeholders and the public. Such
communication serves to keep interested parties informed about NEEA's activities,
NEEA - 2010-2014 Business Plan 52
and maintains/builds NEEA's influence with regional and national market actors,
which can be leveraged for the benefit of Nortwest stakeholders.
Specific communications activities include the NEEA Newsletter, the NEEA web site,
the NEEA Annual Report, and various ad hoc requests for information. Corporate
Communications also supports NEEA's efforts to conduct regular outreach and
participates on boards and decision-making forums with influential organizations. It
",rill also initiate activities that better establish the Northwest's leadership in energy
effciency, such as an annual "state-of-the-region" report that summarizes the
region's energy effciency activities, and regional awards to spotlight the best regional
programs.
Partner Services & Coiporate Communications Contrbution to Strategic
Goals
NEEA - 2010-2014 Business Plan 53
Parer Servces and Communications 2010 - 2014 Estimated Budget
NEEA - 2010-2014 Business Plan 54
4.3.2 Regional Evaluation, Market Research and
Assessments ($9.6 M)
Regional Data Collection Needs & NEET -There is broad agreement that the region
needs and is willng to pay for a regionally coordinated data collection effort. Concurrent
with the development of this Business Plan, the Northwest Energy Effciency Taskforce-
Workgroup #1 identified five tyes of regional market research and evaluation that the
region needs: (1) Building characteristics studies (2) evaluation studies (3) market
characteriations/opportunity assessments, and (4) marketing research, and (5) Cost
reviews. NEEA has been engaged in all of these activities since its inception, but past efforts
have been somewhat ad hoc due to lack of specific Business Plan objectives and budget.
NEET Workgroup #1's final recommendations were for NEEA to assume responsibilty for
areas (1), (3), and (4), as well as shared responsibilty with the RTF for (2), with the RTF
taking responsibilty for (5). It envisioned the RTF taking on responsibilty for planning and
coordinating regional data collection needs, and creation and maintenance of a regional
clearinghouse for data and data collection tools. It is estimated that the total cost to meet the
identified regional data coordination and collection needs at $8-1OM per year. The
recommendation also called for an independent evaluation of the RTF.
In response to Work Group #1's recommendation, the NEET Executive Committee requested
that NEEA project manage an independent evaluation of the Regional Technical Forum
(RTF) in 2009, evaluating its structure, role and ninding and determining what changes (if
any) are needed to address today's changing environment. The study is intended to inform
any future decisions about the RTF's role and responsibilities.
Regional Data Collection by NEEA-NEEA developed this Business Plan concurrently
with the efforts ofWG #1. It includes resources for some-but not all-of the WG #1
recommendations to the NEET Executive Committee. The following section describes the
tyes of regional data collection activities that are included in the plan. In brief, the plan:
. fully funds regional building characteristics studies (residential, commercial and
industrial) (1),
· provides some funding for marketing research (4)
· provides some funding for the other 3 data collection categories-evaluations (2),
market characterizations (3) and cost reviews (5)-but it is limited to
markets/technologies/initiatives that are part of NEEA's portfolio.ll
· includes budget for 1.5 FTE to coordinate and project manage regional studies.
11 Resources for these three data collection categories are contained within the sector and emergng technology budgets,
under the "market research and evaluation" line item. Based on past experience, NEEA estites that approximately 50%
of those line items ",ill go toward these categories.
NEEA - 2010-2014 Business Plan 55
. includes $700,000 for the creation of a web-based clearinghouse to house data
collection tools and results12
. includes $1,000,000 for ongoing market tracking and monitoring of initiatives that
NEEA has funded in the past and in which the region continues to be interested (e.g.,
CFLs).
In total, between the budget shown here and that in the sector and emerging technology
budgets, NEEA's Business Plan includes approximately $3 milion per year for regional
data collection activities. Additional description of data collection activities follows:
. (i) Regional building characteristics studies-NEEA has been conducting
these studies consistently for the last 10 years, and stakeholders have unanimously
told NEEA that it should continue to do so. NEEA wil improve upon past efforts by
establishing a more formal regional market research and assessment function that
coordinates with regional planning timelines, is fully funded to meet regional needs,
and includes creation of a regional clearinghouse for study methodologies,
protocols/processes - including data collection instruments, and results. These
activities will provide a common foundation to the region's energy effciency
organizations for planning and implementation of energy effciency initiatives. When
NEEA conducts these studies, the region benefits from substantial economies of scale
and coordination. The budget for these studies is shown in this business unit.
. (2) Regional Evaluations-NEEA has conducted regional evaluations to quantify
the energy consumption impact of specific technologies on an as-needed basis.
Examples include the current efforts underway to evaluated energy savings
associated with ENERGY STAR New Homes and with Ductless Heat Pumps. NEEA
will continue efforts to quantify the impact of technologies associated with the
initiatives it funds. The budget for these evaluations is included in the relevant sector
and emerging technologies business units, reflecting the integral role they play in the
overall project implementation.
· (3) Regional Market Assessments-NEEA has regularly conducted market
research and assessments over the past 10 years whenever it is assessing
opportunities for market transformation initiatives. NEEA will continue to play this
role going forward. The budget for these assessments is included in the relevant
sector and emerging technologies business units, reflecting the integral role they play
in initiative planning.
· (4) Regional Marketing Research-As discussed in relation to NEEA Strategic
Goal #5, this Business Plan calls for NEEA to provide marketing research to support
12 This budget is substantially smaler than that caled for by NEET Work Group #1 ($1 million for development, plus
$300K-$sooK annual maintenance). NEEA believes that the budget in this plan is sufficient to develop a basic
clearinghouse function to house regional studies, and that can be expanded upon/upgraded as needed.
NEEA - 2010-2014 Business Plan 56
behavior change associated with energy effciency. Based on the recommendations of
NEET Taskforce #4, the NEET Executive Committee asked NEEA to summarize
existing research and its implications, and to identify what other marketing research
is needed. NEEA will conduct additional marketing research to the extent that
regional stakeholders find it appropriate for NEEA to do so. In addition to
conducting the research, NEEA is well-positioned to disseminate findings and
recommendations for marketing strategies (e.g., messaging; media; targeting) based
on that research.
· (5) Cost Reviews-NEEA collects cost data on an ad hoc basis to support cost-
effective analysis and market progress assessment of the initiatives in its current and
past portolio. The budget for this data collection activity is included in the relevant
sector business units and in the long-term monitoring and tracking line item below.
. Long-Term Monitoring and Trackig-The budget for this functional area also
includes the continuation of long-term monitoring and tracking of market
transformation initiatives once they are no longer being actively funded. This activity
allows NEEA and the region to quantify energy savings that result in the latter stages
of market transformation and to keep abreast of market penetration.
NEEA ~ 2010-2014 Business Plan 57
Regional Evaluation and Research Contrbution to Strategic Goals
Regional Evaluation and Market Research 2010-2014 Estimated Budget
NEEA - 2010-2014 Business Plan 58
4.4 BUSINESS PLANNING AND OPERATIONS
NEEA Business Planning and Operations comprises multiple functions, all poised to both
advance and support the efforts outlined in this Business Plan.
4.4.1 Business Planning
NEEA's business planning unit will comprise the following areas: Strategic and Business
Planning, Business Development, Portfolio Management, Cost Benefit analysis and reporting
and Market/Program Planning Support. Following are the strategic objectives that are the
primary focus of business planning:
· NEEA's funders identify market transformation through NEEA as part of their energy
effciency portolio
. All NEEA funders count NEEA-reported net market effects toward their energy
effciency accomplishments
· Develop and implement a portfolio management system to ensure NEEA's portfolio
is optimized
. Deliver annual energy savings reports to NEEA funders to support rate recovery.
. As appropriate, develop a regional "Fuel-Neutral" Action Plan consistent with
NEEA's new mission statement; develop appropriate operational and business
seIVce changes to accommodate recommendations arising from the plan
. Develop and gain regional commitment to comprehensive market strategic plans for
at least two of NEEA's major initiatives; these plans have shared goals and defined
roles for all regional energy effciency players.
. Assist and support the development of regional action plan for energy effciency.
NEEA Portolio Management System
The NEEA Portfolio Management is a management process that will become an integral part
of NEEA's decision making and will help NEEA acquire and view information about all of its
initiatives/projects, then sort and prioritize each according to certain criteria, such as
strategic value, impact on resources, cost, and so on, to best achieve the organization's goals
and objectives.
NEEA wil develop and implement a portfolio management system to support project
adoption, emphasis and termination decisions. This system and processes will be
transparent, help ensure ongoing effciency and accountabilty, and provide stakeholders
insight into portfolio management criteria (e.g. contribution to Business Plan objectives,
regional equity, resource requirements, risk, initiative performance to date). Like any good
system of checks and balances, NEEA's portfolio management system will help NEEA remain
nimble and flexible during wholesale or incremental changes in the economic/ environmental
landscape.
NEEA - 2010-2014 Business Plan 59
Annual Energy Savings Reporting to Support Rate Recovery
NEEA is committed to providing energ savings tracking and reporting suffcient to allow for
rate recovery ofNEEA expenses. For NEEA's direct funders, NEEA wil be collecting and
reporting energy savings data at the servce-territory leveL.
Fuel-Neutral Action Plan
A large proportion of northwest residences, businesses, and industry are currently served by
multiple energy sources. Improving energy effciency for these end users is inherently a
multi-fuel issue. As a reflection of this reality, NEEA's new mission statement is "fuel-
neutral" to improve the effciency of energy use, regardless of the energy source. NEEA's new
mission closely aligns with the end-user perspective and enables more effective regional
effciency efforts in these markets. However, NEEA is currently funded solely by electric
utilties. This single-fuel funding source creates some challenges in accomplishing NEEA's
new mission.
For instance, there is currently an inequity in who pays and who benefits. Electric ratepayers
are the sole funders but both electric and gas customers benefit with market changes that
affect both fuels (e.g. ENERGY STAR windows). Another challenge comes from an inabilty
for NEEA to fully address the effciency needs of a multi-fuel market. Ultra-high-effciency
gas-fired steam boilers may be very important to some industrial end-customers, but NEEA
cannot in good conscience spend electric rate-payer funds to help transform the market for
that equipment.
NEEA is proposing to explore the possibilty of pursuing funding from non-electric utilties.
As a matter of policy NEEA would not use funds from any fuel source to engage in activities
that would be seen as encouraging fuel-switching. Rather, NEEA would start from the end-
user, fuel-neutral perspective defined in the new mission statement. Any activities funded
through other fuel sources would need to support both the mission and goals defined in the
strategic plan.
NEEA will develop an action plan to define appropriate steps and stakeholders. Regional gas
utilties would likely be consulted to gauge their interest, needs and requirements in specific
initiatives related to NEEA's planned work. Electric utility stakeholders would be consulted
to ensure that the right balance of funder-equity and end-customer needs are maintained.
The Board of Directors wi review and monitor non-electric planning and activities.
Collaborative Market Planing
Collaborative planning and coordination will be important to help the region realize the full
potential of the 6th Northwest Conservation and Electric Power Plan. The 6th Plan13 is likely
13 The 6th Power Plan is currently scheduled for Draf releae in May of 2009 and final adoption on August of 2009. At the
time of the drafting of this Business Plan, much of the effciency supply curve work was largely complete and many of the
large effciency targets have been identified.
NEEA - 2010-2014 Business Plan 60
to adopt very significant goals for the region for energy effciency. Much of the new effciency
potential is in areas that will require a coordinated effort between upstream market
intervention and local program delivery. Many of these areas are already identified and
targeted within this Business Plan. For those that are not, NEEA will work with the region to
coordinate and plan for appropriate strategies to address these targets and will re-examine
NEEA's portfolio of projects and make adjustments as appropriate.
Market transformation is the end-result of collaboration by all energy effciency
organizations in the region. The ultimate effects and the cost of achieving market
transformation wil be more successful to the extent that the region coordinates its efforts.
Where appropriate, NEEA will serve as regional convener to develop and gain commitment
to comprehensive market strategic plans for major energy effciency opportunities. These
plans will include specific market goals and have defined roles for all regional energy
effciency players. They will include emerging technologies opportunities, market
transformation initiatives and technical market opportunities.
Business Planning 2010-2014 Estimated Budget
NEEA - 2010-2014 Business Plan 61
4.4.2 Business Operations
NEEA's business operations unit will comprise the following functional areas;
Executive/Board, Finance and Accounting, Legal and Contracts Administration, Human
Resources, Information Technology, Facilties, Ofce Management and Administration and
Supplies.
NEEA is committed to effcient and effective business processes, practices, and systems. The
growt and new business areas outlined in this Business Plan necessitate for NEEA to
develop and utilze more effective and effcient methods of managing its work and reporting
on its activities and successes. Effective business operations are key to Business Plan
execution and sustainable results. NEEA has historicaly kept its operating expenses low and
plans to continue this trend.
Headquartered in Portand Oregon, NEEA operates programs in Oregon, Washington, Idaho
and Montana. NEEA receives its funding from 12 electric utilities, Bonneville Power
Administration and the Energy Trust of Oregon. In this Business Plan, NEEA will administer
roughly 40 milion dollars a year in achieving its goals.
NEEA has approximately 34 full-time employees as of 2009, and is expected to grow to
approximately 60 by 2014. Where practicable, NEEA will utilize contract and/or limited term
employees to fill its human resource needs. Beyond its offcial employee count NEEA actively
funds and manages a host of implementation, evaluation and market research contractors
who work on behalf ofNEEA to carry out its goals. Hence many ofNEEA's systems and
processes have a much larger user base than the organization's 34 full-time employees.
NEEA's business operating principles include:
. In relation to technologies, be neither cutting edge nor obsolete edge -
There is a cost to work with technology that has not yet been proven or become
industry standard. What is often overlooked is that there are also opportunity costs in
staying with technology that is past its prime. The ideal is to remain balanced
between these two so that maxmum value can be provided at minimum cost.
. Operate within the organization's capacity for change - Over a given time
period there is a finite capacity for change within an organization. Exceeding this
limit is neither desirable nor sustainable.
. Follow industr standards and best practices for al business operation
fuctional areas - Standards and best practices exist for two reasons. First, they
provide a means to get an item done. Second, they provide an industr-proven
means to get an item done.
NEEA's core values will be an integral part of all NEEA's operations and mindset,and
include:
. Excellence - NEEA will be a high-performance organization as evidenced by its
focus on and commitment to accountabilty and continuous improvement, as well as
the cost effciency of its activities. In order to deliver on its promise of excellence,
NEEA - 2010-2014 Business Plan 62
NEEA will embrace human resources policies and practices that effectively attact
and retain high-performing talent. '
· Teamwork/Collaboration - Effective teamwork and collaboration-both
internally and among all stakeholders- is essential to NEEA's abilty to deliver value
to the region. To collaborate effectively, NEEA must engage in clear and open
communications, and embrace diversity of opinion and perspective.
· Nimbleness - Given the dynamic nature of the energy business, NEEA's future
success wil likely depend on the abilty to respond to unanticipated changes. It wil
be important for NEEA to have a structure of governance and management that
supports the abilty to adjust to such changes.
· Integrity - Integrity includes honesty-both by the organization and the individual
conduct of staff and management-as well as transparency and openness.
· Supportve work environment - NEEA is committed to a supportve
environment for its employees, including work-life balance, and a culture of respect
and kindness.
· Sustainabilty - NEEA is committed to the practice of sustainability in its day-to-
day operations and decision-making. The organization is committed to "walking the
talk".
Business Operations 2010-2014 Estimated Budget
NEEA - 2010-2014 Business Plan 63
5. Challenges and Paths to Success
CHANGES TO SUCCESS
Tremendous opportunity exists over the next five years and beyond. NEEA management is
mindful of challenges as well. In addition to the current economic situation and the volatilty
in the energy industry, specific risks exist. Organizational growt and operational complexity
are two of the most challenging areas facing NEEA over the next five years. Operational
complexity is multifaceted and continues to grow as energy effciency relevance grows in the
region. Managing the diverse needs of the region, and coordinating on multiple levels, across
multiple functions with multiple stakeholders will require focus.
In addition, NEEA's partners located east of the Cascades shared concerns about regional
equity and value, and the need to provide more support for the many smaller, mostly rural,
"east-side" utilties and energy effciency organizations.
Lastly, NEEA recognizes the need to address commercial and industrial energy savings
verification, both in the short and long term, associated with the market transformation goal
of sustainably changing business practices associated with energy management.
These last two areas were also identified as areas for NEEA to address in a recently
completed Independent Evaluation of NEEA's Accomplishments: Retrospective Assessment
2008 (Retrospective) Report.
PATHS TO SUCCESS - OPERATIONALING THE BUSINESS PLA
To effectively deliver the value outlined in this Business Plan, NEEA must address the
challenges it faces. The following section outlines how NEEA intends to address those
challenges in its operations.
Effective growt management. Growt is required in order to deliver the value outlined
in this Business Plan. Growt at this level requires a deliberate and well-executed plan for
effectively managing organizational change while being true to NEEA's corporate values.
NEEA's approach to managing growth over the five years will be sequential and in three
phases: i) build on a solid structure, infrastructure foundation, and management processes
which allow for effective growt, flexibilty and rapid response to regional needs; 2) develop
new or re-emphasized business offerings in a prioritied, systematic order; and 3) effciently
and effectively deliver and communicate the value outlined in this Business Plan. This
approach will be executed through openness and transparency of operations, with the highest
level of integrity, and by supporting a productive work environment for employees.
In the industry's current environment, competition for experienced staff is increasingly
fierce. NEEA's abilty to continue to attract and retain talent is critical to NEEA achieving its
Business Plan. Management will work to mitigate this through a comprehensive talent
NEEA - 2010-2014 Business Plan 64
management plan including such key elements as professional development opportunities
and a supportive work environment.
Institutionalize key business processes. In addition to effectively managing growt
over the course of this Business Plan, NEEA also will institutionalize key business processes.
These processes will ensure that: operations are transparent, flexible, and effcient; decision-
making is evidence-based; the voice of the region is integrated; and NEEA invests in a
portolio that delivers optimal return on the region's investment. Following are some of
NEEA's key business processes.
Portolio Management System. The need for a formal portfolio management system was
identified as a critical issue in NEEA's draft Strategic Plan. This formal system wil be
integral to NEEA's decision making and will cause NEEA to acquire and view information
about all of its initiatives, then sort and prioritize each according to explicit criteria, including
strategic value, contribution to Business Plan objectives, regional equity, and resource
requirements.
The system will support initiative/program adoption and termination decisions, and include
a mechanism for considering trade-offs between continued investments in existing programs
and new program opportunities, as well as trade-offs at the corporate level (e.g. between
business units). Such a management system will help ensure that NEEA's funders are
receiving optimal return on their investment.
This system will be actively managed to help ensure ongoing effciency and accountabilty,
openly providing information on NEEA initiative and program selection, and provide insight
into the portfolio management criteria used in decision making. It is envisioned that NEEA's
portfolio will have three levels, each requiring management. The following chart is an
example of a potential framework for NEEA.
NEEA - 2010-2014 Business Plan 65
Potential Portolio Criteria Framework
The full development and management of the Portolio Management System will be done in
consultation with NEEA's partners, forums and committees. Examples of potential criteria
at the corporate level include:
1. Strategic Plan Goals and Business Plan Objectives - Ensure all goals and
objectives outlined in the Business Plan are met. If any objective is not being met
over time, that wil be considered a priority area for investment. A measurement of
relative portion/weight will be developed between the goals and objectives to aid
decision making during 2010-2014.
2. Regional Equity - NEEA wil balance its portolio to deliver benefits fairly and
equitably across the region; recognizing the needs of stakeholders in rural and
urban settings both east and west of the Cascades, as well as each of the four
states. Initial metrics used to assess this balance include: the number of states
NEEA - 2010-2014 Business Plan 66
touched; the number of utilties and system benefits administrators touched
directly; and a measure of rural touch.
3. Portfolio Cost Effectiveness - Ensure the portfolio's total resource cost (TRC)
remains at or below 3.5 cents/kWH, and that a percentage (target 20 - 30%) of
the overall budget is for activities with "non-countable" direct energy savings,
either in the short or long term.
4. Diversifcation - NEEA will balance its portolio to ensure a diversification of
investment to mitigate risk. Metrics will be further established around short vs.
long term benefit, direct versus non-direct energy savings, and likelihood of
success.
The level one corporate decision criteria above were used in development of this Business
Plan and will be further refined to balance NEEA's portolio. In addition, the second and
third levels of criteria will be developed and utilized with advice and consultation from
NEEA's Expert Committees. Like any good system of checks and balances, NEEA's portolio
management system will help NEEA remain nimble and flexible during wholesale or
incremental changes in the economic/emironmental landscape.
Engagement with regional stakeholders. NEEA is committed to collaboration with
regional partners',NEEA will engage with regional stakeholders to help ensure the diverse
needs of the region are appropriately reflected within NEEA operations. NEEA is committed
to identify areas of coordination to reduce any potential for duplication. Supporting this
effort will require focused resources and systems to ensure effectiveness.
A network of expert/advisory committees wil provide counsel on NEEA operations.
Four Expert Committees are currently in place, and will continue through the course
of this plan. There is a committee for each of the three sectors, as well as a Cost
Effectiveness and aMW Savigs Committee.
The purpose of the Sector Expert Committees is to provide NEEA with broad- based
advice, experience and feedback. This feedback is used to influence NEEA's work
toward achievement of the organization's strategic goals, priorities and objectives.
The purpose of the Cost Effectiveness and aMW Savings Committee is to help ensure
the reliable reporting of NEEA cost effectiveness and aMW savings information so
that the information for use by utilties and public benefits administrators is
appropriate. The Committee also reviews and provides recommendations to
management regarding the ongoing development and implementation of cost and
savings measurement and estimation methods, including evaluation work. This
Committee has representation from utilties, Bonnevile Power Administration,
Energy Trust of Oregon, The Power and Conservation Council and State Public Utilty
Commission staff.
Along with these existing committees, NEEA envisions at least three additional
committees. First, an Executive Director Advisory Committee will be established to
help ensure the broader regional voice from indirect funders is informing NEEA on
NEEA - 2010-2014 Business Plan 67
an ongoing basis. The second Committee envisioned is a Planning/Portolio Expert
Committee for helping advise and providing counsel to NEEA around its market
planning, market operations, and to have a look at NEEA across the three sectors.
Finally, an Emerging Technologies committee is also anticipated.
Energ savings and cost effectiveness analysis. The energy savings estimates
presented in this Business Plan are management targets. They do not represent detailed
supply curves similar to those the Regional Technical Forum / Nortwest Power and
Conservation Council provide.
Over the course of this Business Plan, these forecasts as well as the program(s) cost
effectiveness estimates will be reviewed and updated as part of the annual Alliance Cost
Effectiveness (ACE) model review. The Cost Effectiveness and aMW Savings Expert
Committee is part of this annual review. The ACE models will also be part of the basis of the
data for the portolio management system and that if forecasts show that targets are not
likely to be met, then the portolio process wil take appropriate action.
Energy Savigs Trackig and Reporting. NEEA will establish a servce territory level
energy savings tracking and reporting system. NEEA is committed to working with each
funder to report energy savings achieved in their servce area in a format and time frame that
meets their needs. The tracked energy savings will be reviewed with the Cost Effectiveness
and aMW Savings Expert Committee on an annual basis. For Washington utilties that fall
under 1-937 requirements, NEEA will provide reporting of each utilty's share of savings for
both its direct contribution to NEEA as well as for their indirect contributions paid through
BPArates.
Evaluation and Adaptive Management. NEEA is committed to conducting ongoing
evaluation activities that provide critical information for decisions on project planning &
design, adoption, adaptive management and exit strategies. Ongoing evaluation (as opposed
to ex-post evaluation) helps to ensure NEEA's transparency, responsiveness and timely
decision making. NEEA will publish annual market progress evaluation updates for each
market transformation initiative in its portfolio. These reports provide stakeholders with an
objective third-part assessment of each initiative's progress against established market
progress indicators and outcomes.
Over the next five years, NEEA will place particular emphasis on developing a robust
methodology for estimating savigs associated with business practice change in the
commercial and industrial sectors. The evaluation team wil communicate regularly with the
Cost-Effectiveness and aMW Exert Commttee, and with other stakeholders to ensure that
proposed saving estimation methods benefit from regional input, are well understood and
are agreed upon. Evaluation of prior NEEA initiatives also will be conducted regularly to
assess post-market intervention baseline and market adoption and allow the region to
substantiate the long-term savings associated with those initiatives.
NEEA - 2010-2014 Business Plan 68
6. Appendixes
6.1 NEEA's Value
OVERVIEW OF NEEA
Since its inception in 1997, NEEA has consistently evolved to meet the needs of its
stakeholders. NEEA is known as a pioneer in market transformation - driving energy
effciency at a regional leveL. In NEEA's recent independent Retrospective Report conducted
by Northwest Economic Research, NEEA rated high in employee satisfaction, responsiveness
and transparency. Along with the rest of the energ effciency industry, NEEA is responding
to a rapidly changing landscape. In addition to adjusting program operations to work more
closely in collaboration with other energy effciency programs, NEEA recently recruited
Executive Director Claire Fulenwider to lead the organization. In addition, NEEA's funders
recently simplified its governance structure; moving from a 27-member Board of Directors to
14 members and re-focusing Board work on strategic policy.
NEEA LEAERSHIP
NEEA's Board is comprised of key members of the Northwest energy efficiency community.
The NEEA Board of Directors is an esteemed collection of senior, respected members of the
Northwest's energy industry known for their national and regional, public and private sector
professional experience. The Board represents the public power utilties ofthe Northwest,
Investor-Owned Utilities, the states of Washington, Oregon, Idaho and Montana, public
representation, Bonneville Power Administration and The Energy Trust of Oregon. This
Board is well prepared to guide NEEA through the growth and transition required to
faciltate market transformation.
NEEA's Executive Director, Claire Fulenwider comes to NEEA with more than thirty years
experience in the energy industry and has a passion for energy effciency, conservation and
the environment. Her background in organizational development, energy effciency practice,
program design and implementation, strategic planning, evaluation and business
development is well suited to NEEA's current challenges. Her experience leading
organizations of diverse sizes and interests will serve NEEA well as it strives to meet the
needs of the region over the next five years.
Fulenwider leads a senior management team with extensive experience in the energy field as
well as in private sector markets. NEEA leadership and senior staff have diverse and deep
backgrounds in marketing, research, architecture, process and project engineering, and
public policy.
NEEA - 2010-2014 Business Plan 69
NEEA'S UNIQUE CHACIERSTICS
Recognizing that many organizations are working toward a common goal of improving
energy effciency in the region, NEEA seeks to maximize return on investment to its funders
by focusing on areas that build on its core competencies and leverage its unique strengths to
complement local energy effciency progrm effort. The following distinct characteristics -
combined with NEEA's core competencies-position NEEA well to serve the region in the
areas outlined in this Business Plan.
Aggregator of market resources
NEEA is the only alliance of both public and private electric utilties that represents the
entire four-state region to national and global market partners. The aggregation of
market resources provides the region with greater potential to influence market actors
for the benefit of its regional stakeholders. NEEA adds 'clout' for the region's utilties.
Impartial promoter of energy effciency
NEEA's sole focus will continue to be on energy effciency. Because it has no product or
servce to sell or promote, it presents a credible face to the market.
Meehanismfor cost-effective long-ter energy effciency initiatives
NEEA provides the region with a mechanism through which it can undertake and fund
riskier long-term energy effciency initiatives than would otherwse be possible without a
regional energy effciency organization. By pooling funds into a portolio of long-term
initiatives, utilities can leverage their dollars and spread risk while investing in
tomorrow's successful energy effciency initiatives. NEEA can work to transform energy
markets in ways that individual utilties cannot.
NEEA'S CORE COMPETENCrnS
Combined with its unique characteristics, NEEA's core competencies will help the region
achieve a sustained adoption of energy-effcient technologies and practices, and provide the
foundation for NEEA to achieve the goals and objectives presented in this plan:
Market Assessment to Identi Energy Effciency Opportunities
NEEA has more than a decade of experience designing and managing a variety of market
assessments that have enabled it and the region at large to identifY the most promising
opportunities for energy effciency. Examples include large regional studies such as the
Commercial Building Stock Assessment, the Residential New Construction
Characteristics and Practices Survey, and the Single Family Residential Existing Stock
Assessment. These studies were influential in helping NEEA identifY opportunities in
these markets, helped support the Northwest Power and Conservation Council develop
its critical Power Plans, and assisted several regional utilties with their integrated
resource planning (IRP).
Design and Execution of Innovative Market Strategies
Over the last twelve years of operation, NEEA has accrued significant experience and
expertise in developing and executing innovative market strategies that increase market
NEEA - 2010-2014 Business Plan 70
adoption of energy effciency technologies and practices at a low cost. One example of
where NEEA has successfully designed and pursued strategies to overcome barriers to
market adoption is in its ENERGY STAR Homes Northwest program. NEEA designed
and collaborated on the development of an entire market infrastructure, including
negotiating a Northwest ENERGY STAR specification that was appropriate given the
region's more stringent codes versus the rest of the country.
Leveraging Market Relationships
Since the markets that NEEA strives to change are national markets, NEEA has
developed strategic relationships that allow influence at the national leveL. NEEA's
relationships include the following: national manufacturers and retailers; government
organizations such as the U.S. Department of Energy and Environmental Protection
Agency; national effciency organizations; and a broad array of industr and professional
organizations such as American Society of Heating, Refrigerating and Air-Conditioning
Engineers, Building Owners and Managers Association, Hydraulic Institute, and the
Northwest Food Processors Association.
Codes and Standards Expertie and Relationships
NEEA holds competencies in state energy code development and strategy formulation,
and has successfully engaged in the national standards setting process throughout the
past decade. NEEA has pursued this work as an integral part of the overall market
transformation process.
Regional Coordination and Communication
Since its inception, NEEA has always had to adjust to a changing landscape. Over the last
several years NEEA has been redesigning program operations to work more closely in
collaboration with other effciency programs; to complement-not compete. Over this
period, NEEA's capabilty to coordinate regional activities has grown, as utilties have
ramped up local energy effciency programs, and NEEA has learned from its experiences.
NEEA has demonstrated this competency on a variety of projects including: the "Double
Your Savings" program for ultra-high-effciency clothes washers and the Green Motors
program.
Finally, NEEA is also unique in being a regional energy effciency organization funded
solely through voluntary contributions of regional utilties and public benefits
organizations. Utilties, Bonneville Power Administration and The Energy Trust of
Oregon have realized that together they can achieve more with a regional organization
than they can individually.
NEEA - 2010-2014 Business Plan 71
6.2 ENERGY SAVINGS ESTIMATES AND COST EFFECTIVENESS
Energy Savings Metrcs
This Business Plan includes energy savings estimates using two different metrIcs14:
1. Total Regional Savigs - These are savings estimated from a measurement of
total market share for a given effciency technology. This metric does not make any
judgments as to attribution for the observed market share; i.e., it does not attempt to
assign credit for the market adoption of the effciency measures to NEEA or local
utilty programs or consumer behavior. This metric is most directly linked to power
supply requirements for utiities as it represents the actual effciency of the end-use
load. It is also the more appropriate metric for a regional, collaborative effort to
change the market.
2. Net Market Effects Savigs - These savings are derived by calculation and
assignment of attribution. To arrive at this metric, total regional savings are divided
into three components of attribution: a component associated with an assumed
market response if there had been no NEEA or utility intervention otherwse known
as "baseline" energy savings, a component associated with local utilty program
savings claimed or counted from local utiity program efforts; and lastly a component
calculated by deducting the first two components from total regional savings that are
the assumed "net market effects" resulting from NEEA and utilty program
interventions in the market. This is the metric NEEA has historically used for
measuring and reporting savings as a mechanism to avoid double counting of savings
in reporting. This is useful for regulatory recognition but presents a potential conflict
with goals for collaboration as it places priority on maximizing savings where utilities
or other entities are not engaged.
14 Both metrcs are stated in units of average megawatts or the equivalent output of a power plant
producing one megawatt of power for 8,760 hours for one year
NEEA - 2010-2014 Business Plan 72
6.3 COST-EFFECTIVENESS ESTIMATES
Cost-Efectiveness Metrcs
For this Business Plan, NEEA has estimated cost-effectiveness using two different metrics:
· Total Resource Cost - This metric is calculated using the standard definition
adopted by most of the regulatory commissions in the region: sum of all societal costs
net of the sum of all societal quantifiable benefits divided by total regional energy
savings and levelized over the tyical life of the measure.
. NEEA only - This metric is calculated assuming what is more traditionally viewed
as a "utilty cost test". It is a NEEA-centric viewpoint that is calculated by taking the
sum of NEEA costs divided by net market effects energy savings and levelized using
the appropriate measure life.
In both cases, NEEA uses a modeling process that is based on and consistent with the
Nortwest Power and Conservation Council's cost-effectiveness protocols.
Energy Savings, Cost Effectiveness and Risk
The energy savings and cost-effectiveness throughout this Business Plan represent a "most-
likely" scenario based on the best information available at the time of writing. In order to
test the robustness of these values, NEEA also examined a "high" scenario where the
assumptions in the "most likely" scenario were pushed to achieve a "less likely" but more
optimistic energy savings scenario. A third "low-case" scenario was developed to represent a
very conservative, high-probabilty scenario; i.e., what could the Business Plan be expected to
deliver even under the very unlikely scenario that almost all of the "most likely" scenario key
assumptions fail to materialize. For the "high case" scenario, these assumptions could be
assumed to be associated with a 25% probabilty of occurrence; i.e. there is a one in four
chance that the energy savings wil achieve a higher level than the "most likely" scenario. The
"low case" is assumed to represent a 75% probabilty of occurrence; i.e, a 75% chance that
savings will at least hit these levels.
Figure A-i below depicts the Total Regional Savings for 2010-2014 for each of the three
scenarios. Figure A-2 depicts the Net Market Effects energy savings for the same period.
NEEA - 2010-2014 Business Plan 73
Figure A-1. Tota Regional Energ Savings 2010-2014
2010.2014 Energy Savings. Total Regional
350
50
Residential
sr Industrial
. Commercial
300
250
3: 200::II 150
100
o
Low Case Most Likely High Case
Figue A-2. Net Market Effects Energ Savigs 2010-2014
2010-2014 Energy Savings. Net Market Effects
140
40
Residential
sr Industrial
. Commercial
120
100
80III 60
20
o
Low Case Most Likely High Case
From a cost-effectiveness perspective, the Total Resource Cost (TRC) estimates for the
portolio do not change substantially since the majority of the costs are driven by end-
customer costs that tend to scale proportionately. However, the NEEA-only cost-
effectiveness changes fairly dramatically; lowering to about 2 cents/kWh under the "high"
case but increasing to over 4 cents/kWh under the "low case".
NEEA energy effciency resource cost compared to other resource choices.
Figure A-i below compares the total resource cost (TRC) for the energy savings acquired in
markets targeted by NEEA initiatives. As ilustrated in Table 1, the energy effciency resource
NEEA - 2010-2014 Business Plan 74
in these markets is anticipated to be less than half the cost of the nearest likely alternative: a
market purchase of firm power. It is projected to be one third or less of the cost of any likely
generating resource options. Even ifthe projected costs ofNEEA's efforts are off by a factor
of two, the effciency resource targeted by NEEA's initiatives would stil be a bargain for the
region.
Figue A-t. Cost of New Resource Options for the Northwest
Resourc Options - Early 2020s
~-¡
3
I~
8Jl
~..==
. Emissions (CO2) Costs
Transmssion and losss
System Interation
. Plant COsts
.# . 10~ ..." ~~"'~, ~...~. ..~,.. '1...'1
.:~ ~ ... ~..~l' ~~
~ -~~'I~ ç
r: .d*f-l ~f.
So..cedeffK~ ~tlestl'_r imd Conservacol.mi:U¡ Sl.ibNtrth_
ClllIsililim &ElorÎl'_ Ali ; Rliiwe(_ii)CycJiCoJ.ll 1'1I_l'i..n
lWurc Ai"._(t~ Dec; \I ,zOOa:
NEEA - 2010-2014 Business Plan 75
6.4 BUDGET DETAIL
2010-2014 Budgets by Sector/Business Unit
The following financial information includes 5 budget estimates for 2010-2014. These budget estimates
may change due to NEEA's Portolio Management System. The Portfolio Management process provides a
formal mechanism for consideration of tradeoffs between continued investment in existing projects and
new project opportunities, as well as trade-offs at the corporate leveL. The portfolio management process
will evaluate resource allocation across the portfolio with regards decisions to accelerate investment, to
de-prioritize certain areas, to divest in certain areas 'and to develop new strategies areas of focus for the
business.
Table A-i below shows the detailed budgets by sector and major activity:
Table A-1. Estiated 2010-2014 Detailed Budgets.
NEEA - 2010-2014 Business Plan 76
** Note: Selection of target market to be determined by market transformation potential and regional
equity.
NEEA - 2010-2014 Business Plan 77
-
"II''''':m
NEEA - 2010-2014 Business Plan 78
*Note: Staffng and related expenses are allocated in each functional area
NEEA - 2010-2014 Business Plan 79
6.5 GOALS, OBJECTIVES AND METRICS DETAIL
Overarching Corporate Objectives and Metrcs
NEEA - 2010-2014 Business Plan 80
Objectives and Metrcs of the Six Strategic Goals
Goal #1: Increase Market Adoption
NEEA - 2010-2014 Business Plan 81
Goal #2: Help NW utilties and other energ effciency organizations achieve their energ
effciency goals
~()al :2 0bjec:ti¡V'es
NEEA - 2010-2014 Business Plan 82
NEEA - 2010-2014 Business Plan 83
Goal #3: Buid regional market knowledge and capabilty through education and training
NEEA - 2010-2014 Business Plan 84
Goal #4: Increase regional market availabilty of emerging technologies
85
Goal #5: Support the region's effort to promote energ effciency
Goal #6: Faciltate regional energ effciency planing and implementation
NEEA - 2010-2014 Business Plan 86
6.6 2010-2014 BUSINESS PLAN AND THE 6TH POWER PLAN
Context. As of the wrting of this document, the Northwest Power and Conservation Council is
currently in the final stages of drafting the 6th Northwest Power Plan. The first draft of the Plan is
scheduled for release in May of 2009 with a projected final adoption in August of 2009.
Although the numbers are stil in review, Council staff are projecting that the 6th Plan will identify a very
significant conservation resource potential; perhaps as much as 5,000 aMW to be captured over the next
20 years. This very large target presents real challenges to the region and to NEEA's 2010-2014 Business
Plan.
Overlay with the 2010-2014 Business Plan. Unfortunately, the final outcome from the 6th Plan
process will not be known before NEEA's 2010-2014 Business Plan is anticipated to be adopted by the
Board in April of 2009.
In order to better understand the challenge presented by the 6th Plan and its interaction with the 2010-
2014 Business Plan, a preliminary analysis of the draft 6th plan documents was conducted and mapped
against the markets supported in the 2010-2014 Business Plan.
This analysis consisted of the following steps:
1. Identify 6th Plan effciency measures and technically-achievable energy savings potential with
cost-effectiveness up to 100 mils/kWh.
2. Map thes,e measures against 2010-2014 Business Plan market activities.
3. Aggregate savings where the Business Plan provided direct support to the market that delivers
the effciency measure.
4. Identify key gaps between the 6th plan and the 2010-2014 Business Plan.
Analysis Summary. The analysis of draft data from the Council suggests a total regional technically
achievable potential of just under 5,500 average megawatts; roughly double what was identified in the
5th Power Plan. Of this potential, NEEA's projected activities for the 2010-2014 Business Plan provide
support for markets that would affect roughly 3,300 aMWs or just about 60% overall. However, when
split into lost opportunities versus discretionary resources, NEEA provides significantly more support
for lost opportunities (79%) and less for discretionary resources (40%). This is probably appropriate
given that discretionary resources tend to be better targets for local utility programs (e.g. weatherization,
lighting retrofits). Table 6-3.1 below ilustrates the breakdown by resource tye.
NEEA - 2010-2014 Business Plan 87
Table 6.3-1. Summar Mapping of 6th Plan to 2010-2014 BP
6th Plan Resource
Potential 0:100
mils/kWh
Supported by
NEEA 2010-2014
Business Plan.
%
Total Discretionary
Total Lost Opportunities
Total
Figure 6-3.1 below ilustrates a more detailed breakdown of the comparison by sector and resource tye.
Figu 6-3.1. 6th Plan Technicay Achievable Energ Savigs Potential by Sector and
Resource Tye Mapped to 2010-2014 Business Plan Market Support
2000
800
. 6th Plan Potential 0: 100 mils/kWh II NEEA BP Supported
aMW1600
1200
400
o
Res - Res-
Lost Discr.
Ops
Comm Comm
- Lost
Ops Discr.
Sector
Ind - Ind-
Lost Discr.
Ops
Ag - Ag-
Lost Discr
Ops
NEEA - 2010-2014 Business Plan 88
Gap analysis. In order to better understand the gaps between the 2010-2104 Business Plan and the
6th Plan, measures were sorted by total potential into "top 10" lists for each sector separated into lost-
opportunity and discretionary resources. These tOP-10 measures represent 84% of the total potential in
the 6th plan.
In lost opportunity markets, seven of the tOP-10 residential and 8 of commercial measures are supported
by the 2010-2014 Business Plan. For discretionary resources, only 2 residential and 2 commercial
measures are supported. For industrial, 3 lost opportunity and 6 discretionary tOP-10 measures are
supported. Table 6-3.2 below shows the detail by sector and resource tye.
Figure 6-3.2 Top-to 6th Plan Measures and Gap Analysis.
6th Plan Potential
c:100mils/kWH aMW
Top 10 Included
in 2010-2014
Business Plan
NEEA Business
Plan Supported
aMW
Res - Lost Ops
Res - Discr.
Comm - Lost OpsComm-Discr. ___
Ind - Lost Ops
Ind - Discr.
Ag - Lost Ops
Ag - Discr
Total Lost Ops
Total Discretionary ___
Total
Conclusions. Although brief, the mapping exercise indicated that there is already fairly good
alignment between the 6th plan and the 2010-2014 Business Plan. This is especially true for lost-
opportunity resources that are traditionally better targets for upstream focused activities or codes and
standards efforts. This is less true for discretionary markets, although NEEA has targeted some high-
priority markets in these markets.
NEEA - 2010-2014 Business Plan 89
Futue Efforts. NEEA staff will be working with regional stakeholders to furter understand the
details of the 6th Plan and refine the levels of support included in the Business Plan. An additional
analysis of these measures frm the perspective of key support activities (e.g codes or standards, local
programs, upstream market interventions) and wil need to be conducted. NEEA will integrate the
outcome of these activities as part of the portolio management process described in more detail in the
2010-2014 Business Plan.
A more detailed report of this analysis is available upon request.
NEEA - 2010-2014 Business Plan 90
NORTHWEST
ENERGY EFfICIENCY
ALLIANCE
www.MiIJianee.òf.
NEEA - 2010-2014 Business Plan 91
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-10-04
IDAHO POWER COMPANY
ATTACHMENT NO.3
..
,.
REGIONAL ENERGY EFFICIENCY INITIATIVE AGREEMENT
This Regional Energy Efficiency Initiative Agreeent ("Agreeent") is between
Idaho Power Company ("Idaho Power") and Northwest Energy Effciency Alliance; ,Inc.,
a nonprofit corporation ("NEEA").
RECITALS:
NEEA is a non-profit corporation that has been fuded by Nortwest utilties,
Bonneville Power Administration, and the Energy Trust of Oregon since 1997. NEEA'smission is to mobilize the Nortwest to become increasingly energy efficient for a
sustainable futue. NEEA is a strategic alliance built around a broad recogntion that
lasting change in energy effciency can only be created though strong parerships and
that greater energy efficiency can be achieved across Washington, Oregon, Montana, and
Idaho by workig in concer than by workig as individual states or organizations.
NEEA delivers regional market-transformation, energy-effciency intiatives, and
increased availability of energy-effcient emerging technologies. The purose of these
initiatives is to deliver cost-effective electrcity savings though long-lasting changes to
the marketplace.
Idaho Power is choosing to fud NEEA because the two organizations share goals
to influence markets strctually to promote and sustai energy effciency and achieve
cost-effective electrcity savings. The arangement brings several benefits to Idaho
Power. NEEA has an established track record of market transformation actvities inOregon, Washigton, Montaa and Idaho. Idaho Power can reduce its market
transformation costs by buildig on NEEA's pooled, four-state resources, suppliers,
market researçh and program design. Because NEEA works in markets beyond Idaho
Power's servce terrtory, there is a greater likelihood that market change in Idaho
Power's servce terrtory wil be rooted in a regional market.
Based upon the mutual promises exchanged between them, NEEA and Idaho
Power agree as follows:
AGREEMENT:.
1) Regional Results and Reportg. NEEA shall deliver the serces necessar to
achieve the five-year goals and objectives outlined in the NEEA 2010-2014 Business
Plan, as adopted by the Board of Directors on April 23, 2009 ("Serces"), and
incorporated herein into this Agreement by reference. NEEA shall develop an anual
Operations Plan and associated budget that descrbes how NEEA will pursue the five
year Business Plan goals and objectives. The Operations Plan wil specify interim
progress goals/milestones that it will use to assess progress toward Business Plan
goals and objectives.
1
a) NEEA wil present anual operations plans and associated budgets for approval
by the Board of Direètors annuay.
b) NEEA will deliver quarerly status reports to the Board of Directors, with a
wrtten anual status report provided to all NEEA fuders.
c) NEEA wil present anual operations plan and associated budgets, with a
sumar of highlights relevant for Idaho Power's servce terrtory.
2) Idaho Power Energy Savigs. The projects in NEEA's portfolio will deliver 200
aMWI of tota regional energy savigs ofwhièh 100 aM2 are net market effects
energy savigs. NEEA shall deliver a minum energy savigs that allows each
fuder to satisfy its govering regulatory body that its investment of ratepayer fuds
is justified.
a) Idaho Power's share oftota regional savings wil be not less than 8.62%, or Idaho
Powers equivalent fudig share of the tota five year regional energy savings and
will be shown to be cost-effective from the Tota Resource Cost perspective.
b) NEEA will deliver quarerly status report to Idaho Power estiating tota energy
savings for its serce terrtory. Savigs will be reported both for achievements as.
a result ofths2010-2014 investment, as well as for achievements durg 2010-
2014 as a result of prior investments in NEEA.
c) NEEA wil report estiated savigs on a quarerly basis. NEEA wil deliver an
anual savings report includig any tre-up for the calendar year by July 1 of thefollowing year. .
d) Savings wil be reported where feasible at a zip code leveL.
e) Savings as a result of prior investments will be reported based on prior funding
share.
i This is in addition to the estimated 750 aMW of total regional savigs expected to be delivered during
the same period of time as a result of prior market trnsformation investments made in NEEA. Total
regional market savings are estimated from a measurement of total market share for a given effciency
technology and do not mae any judgment as to attibution for the observed market share.
2 This is in addition to the estimated 175aM of net market effects savings expected to be delivered
durg the same period of time as a result of prior maket tranformation investments made in NEEA. Net
market effects savings are derived by calCulation and assignment of attbution. To arve at this metric,
tota regional savings are divided into thee components of attbution: a component associated with an
assumed market response if there had been no NEEA or utility intervention otherwise known as "baseline"
energy savings, a component associated with local utility program savings claimed or counted from local
program effort; and, lastly, a component calculated by deducting the first two components from total
regional savings that are the assumed "net market effects" resulting from NEEA and utility program
interventions in the market. This metrc is used for measurng and reportng savings as a mechanism to
avoid double counting of savings in reporting.
2
f) NEEA will, as stated in Goal 2 of the 2010-2014 Business Plan, provide equitable
rural and agrculttal servces to the region. NEEA will work with fuders, who
serve rual areas to assess the nees and opportties, deterine measures of
equitability, develop mutual expectations and goals for deliver of rual servces
durng 2010 to 2014.
3) Operational Effectiveness. NEEA will conduct a management audit utilizing an
independent thid pary to assess its methods and policies of management in the
administration and the use of resources, operational and strategic plang, and
employee and organational improvement. The audit report wil be delivered to the
Board of Directors and fuders by December 31, 2012.
4) Fiscal Prudence. Each year, NEEA wil retain the serces of an indépendent CPA
fi to conduct and complete an anual fiancial audit and interal control review.
The selection of the firm and audit wil be overseen by members of the Board of
Directors and copies made available anually to the Board of Directors and fuders
by August 1.
5) Term. This Agreement becomes effective on the serce date of an Idaho Public
Utiities Commission order authorizing Idaho Power's contiued NEEA participation
and rate recver of expenses associated with ths agreement. This agreement will
end on July 1, 2015, unless terinated earlier puruant to paragraph 9 or 10.
6) Total Fundig Amount. Idaho Power is committed to fud NEEA based on a
quaerly estimate of expenses up to the five-year total diect fuding amount of
$16,522,800 of the total 2010-2014 expenses.
7) Payments. Idaho Power shall make payments based on the invoicing and payments
schedule in the attached Exhbit A, "Payment Schedule."
8) Additional Funds. Nothing in ths Agreement shall limit NEEA's abilty to solicit
fuds from third-party sources.
9) Exceptions to Fundig Commitments. The following exceptions shall apply to
Idaho Power's fuding commitments:
a) Idaho Power shall not have an obligation to provide fuding for NEEA for that
porton of its total fuding commitment that is not approved by its public
governg or regulatory body.
b) Idaho Power may elect to reduce or discontiue NEEA fuding under ths
agreement upon the implementation of restrctung legislation or other
legislation which eliminates the r~sponsibilties of Idaho Power to provide
benefits under a public purose charge.
3
c) Funding by Idaho Power may be discontinued with sixty (60) days notice to
NEEA ifthere is.a.-change to the Bylaws of NEE A to which Idaho Power does not .
agree.
i 0) Determination of Sufciency and Termiation.
a) Ifthe NEEA Board of Directors deterines at any tie that NEEA's progress
versus business plan objectives does not warant continued investment in NEEA,
or that NEEA does not have suffcient funds to operate, Idaho Power may choose
to reduce or cease its investment in NEEA. If the Board determines to completely
cease operations, Idaho Power shall pay its pro rata share of the wind-down costs,
up to one-half of its curent anual fuding amount less any credits.
b) Any direct fuder may at any time seek redess of any èoncems such fuder may
have about the conduct and/or perormance of NEE A or its staffby fist
informing the NEEA executive director of the conces and requesting corrective
action. Failing a mutually satisfactory resolution with 30 days, the fuder may
present its concern in wrting to the board chai. Failing a mutually satisfactory
. resolution by the board, the fuder may within a 30 day perod trgger a formal
mediation of its conce. Upon receipt of a certfied leter from the fuder,
NEEA shall promptly secure the serces of a professional medator acceptable to
the funder and the pares shal then parcipate in good faith toward a mutually
satisfactory resolution. The medation process shall be completed within 30 days
from receipt of the fuder's medation request. If, after the mediation process, the
pares are unable to reach a mutually satisfactory resolution, Idaho Power may, in
its sole discretion, choose to cee its investment in NEEA. At such time, Idaho
Power shall make a onetime payment equal to one sixth of its curent average
anual fuding amount, less any credits. This one-tie payment will be in full
accord and satisfaction of all obligations NEEA and Idaho Power may have to
each other.
11) Insurance. NEEA shall mainta (and shall cause each of its agents, independent
contractors and subcontractors performing services hereunder to mainta) at all ties
at its sole cost and expense at least the following insurances coverng its obligations
under ths Agreement.
a) Workers' Compensation Insurance requi~ by law, at statutory limits, and
Employer's Liability Insurance with a limit of not less than One Milion Dollars
($1,000,000).
b) Business Automobile Liabilty Insurance coverig all owned, non-owned, or hied
automobiles used in connection with Serices, with a combined single limit of at
least $1,000,000 per accident. An endorsement shall be issued naming Idaho
Power as an additional insured but only to the extent ofNEEA's strct liability or
negligence and only to the extent of the policy limits stated herein.
4
c) Commercial General Liability Insurance including (i) bodily injur, (ii) propery
damage, (iii) Contractual liabilty coverage coverng its obligations of indemnty
and defense, and.(iv) personal and advertising injury with a combined single limit
each occurence and in the aggregate of not less than One Milion Dollars
($1,000,000). An endorsement shall be issued naming IPC as an additional
insured but only to the extent of Consultat's strct liability or negligence and
only to the extent of the policy limits stated herein.
d) All insurance requied to be issued under this Section shall be issued on a U.S.
policy by one or more insurance carrers and licensed to do business in the state
where serces are rendered.
e) Prior to commencing Servces under this Agreement, NEEA shall provide to
Idaho Power a Certificate of Insuance evidencing such insurance coverage and
naming Idaho Power as an additional insured as requied on the coverages
described in Paragraphs b and c. These certficates shall contai a provision that
coverges afforded shall not be canceled until at least th (30) days prior
wrtten notice has been given to Idaho Power.
12) Indemncation. Each par shall indemfy, defend and hold harless the other
pary, its directors, offces, employees, and agents (collectively, Indemitees) from
any and all claims, demands, suits, losses, costs, and damages of ever kind and
. descrption, including attorney fees, brought or made agaist or incured. by any of the
Indemnitees resulting from, arsing out of, or in any way connected with, any act of a
pary, its employees, agents, representatives, or subcontractors of any tier, their
employees, ageits, or representatives in the performance or nonperformance of a
par's obligations under this Agreement or in any way related to ths Agreement.
Notwithstanding anythig contaied in this Agreement to the contrar:
a) Neither NEEA nor Idaho Power wil be deeed liable or to be in default for any
delay or failure in perormance under ths Agreement or other interrption
deemed to result, directly or indiectly, from acts of God, civil or miltar
authority, acts of public enemy, war, accidents, fires, explosions, earquakes,
floods, failure of transportation, stres or other work interptions by its
employees, or any other similar cause beyond its reasonable control uness such
delay or failure in perormance is expressly addressed elsewhere in ths
Agreement.
b) Under no circumstaces will either pary be liable to the other with respect to this
Agreement for any incidental, indirect, consequential, special, punitive or
exemplar damages, including, but not limited to, loss of revenue or profit, or loss
of use of propery, whether based in whole or in par on Agreement, negligence,
strct liability, tort, statutory, or any other theory ofliability.
c) Idaho Power and NEEA will be entitled to indemnification hereunder only in the
event of an allegation that the Indemtees, or any of them, are vicarously liable
5
for the acts or omissions of Idaho Power or NEEA or their directors, employees,
Contractors, or other agents or representatives.
13) Non-Solicitation. It is hereby mutually agreed that NEEA wil not soliCit for hire any
Idaho Power employee(s) who are associated with efforts called for under this
Ap-eement durig the ter of ths Agreement.
14) Confidentialty.
a) Confidential Information. All data which a Par discloses to one another shall be
deeed to be Confidential Information, protected .under the ters of this
Agreement, provided in the cae of tagible information, such information is
marked with a legend or wrtig, stating that it is Confidential Information, or
with a similar marking, and in the case of orally, visually, or electronically
disclosed information, such information is orally identified at the tie of initial
disclosure as being Confidential Information or with a similar identification and
followed withn th (30) days by a wrtten notice setng fort a brief
description of the information and confing the Confidential Information
classification. All tangible, oral, visu, and electronic information disclosed in
accordance with the ters of ths pargraph shall hereinafter be referred to as
"Confidential Information." .
b) Protection of Confidential Information: Durg the ter of the Agreement and for
a perod of three (3) years after its expiration, the receivig Pary wil safeguard
said Confidential Information with the same degree of care as it exercises over its
own Confidential Information, but in no event less than reasonable care.
Notwthstanding the foregoiig, NEEA shall protect the confidentiality of Idaho.
Power's customer data indefiitely.
c) Exceptions. Confidential Information will not be deeed to include information
which, (i) at the time of disclosue to a receivig Par is generally available to
the public or thereafter, without any fault of the receiving Par, becomes
generally available to the public by publication or otherse, or which becomes
general knowledge; or (ii) was in the possession of the recejvig Pary prior to its
disclosure by the disclosing Pary; or (iii) was independently made known without
restrction to tlie receiving Par by a thd pary not under any obligation of
secrecy or confidentiality to the disclosing Pary; or (iv) was developed by the.
receiving Pary independently from the Confidential Information disclosed to it by
the disclosing Pary.
15) Disputes. Any dispute arsing out of or in connection with ths Agreement or its
performan~e shall, to the extent practicable, be setted amicably by negotiation
between the Pares represented by management of each Party, prior to either Pary
tag legal action. Notwithstanding the foregoing, however, either Par may seek
provisional legal remedies, if in such Pary's judgment such action is necessar to
avoid irreparable damage or preserve the status quo.
6
..
16) Notices. Notices requ.ired to be made under this Agreement shall be sered
personally, by overnght courer to the address shown below, or by United States
certified mail, retu receipt requested. Notice wil be deemed to be given (a) on the
date of personal delivery, (b) at the expiration of the second day after the date of
deposit in the United States mail, or ( c) on the date of confirmed delivery by the
overnight courer.
17) Miscellaneous.
a) No amendment or modification of this Agreement shall be vald uness set fort in
a wrtten document hereafter signed by Idaho Power and NEEA.
b) In the event of any conflct between this Agreement and the Arcles of
Incorporation or Bylaws of NEE A, the provisions of ths Agreement shall prevail
as between Idao Power and NEEA.
c) The provisions of ths Agreement are intended to be for the exclusive benefit of
Idaho Power and NEEA, and nothing in this Agreement shall be interpreted or
constred as conferrng upon any third pary any right or clai against Idaho
Power or NEEA or entitlng any thd pary to enforce any of the ters of this
Agreement on Idaho Power, NEEA or otherse. This Agreement shall not be
interpreted or constred to create or evidence a parership between Idaho Power
and NEEA, or as imposing any parership obligation or liabilty on Idaho Power
orNEEA.
IDAHO POWER CONW ANY
Date:
By:
I,,,~
Executive Vice President, Operations
Name and Address for Notices to
Idaho Power Company
Attention:
Waren Kline
Vice President, Customer Serce and
Regional Operations
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
NORTHWEST ENERGY EFFICIENCY
ALLIACE
Date: 2. /r; ~ (; I 'Z .I ~7 coBy: C&~)~a'b',~0
Claie Fulenwider
Executive Director
Name and Address for Notices to NEEA:
Claie Fulenwider, Executive Director
Nortwest Energy Effciency Alliance
529 SW Thd Avenue, Suite 600
Portland, Oregon 97204
7
8
. '
r'
Exhibit A
Payment Schedule
Regional Energy Efficiency Initiative Agreement
Between
Idaho Power Company
And
Northwest Energy Efficiency Alance
Part A - Five Year Direct Fundig Commitment by fundig share
Funder Funding 2010-2014
Shares
Total Direct
Fundig
Bonnevile Power Administration 35.49%$68,051,200
Energy Trust of Oregon 20.53%$39,356,800
Puget Sound Energy 13.72%$26,303,200
Idaho Power Company 8.62%$16,522,800
A vista Corporation, Inc 5.53%$10,603,600
PacifiCorp .4.51%$8,643,600
Nort Wester Energy 3.81%$7,310,800
Seattle City Light 3.72%$7,134,400
Clark Public Utilties -1.36%$2,607,000
Tacoma Power 1.12%$2,156,000
PUD #1 of Snohomish 0.79%$1,509,200
Eugene Water and Electrc Board 0.52%$994,200
PUD #1 ofCQwlitz County 0.29%$548,800
TOTAL 100.00%$191,741,600
Part B - Invoice and Payment Schedule
Idaho Power is committed to fud NEEA based on a quarerly estimate of expenses up to the
five-year tota direct fuding amount of $16,522,800 or 8.62% of the tota2010~2014 e'fenses,
. which ever is less. The quarerly estimate shall not exce 125% of one-twentieth (1/20 )' of its
five-year tota direct fuding contrbution. The contrbution shal be paid quarerly as definedbelow. .
1. Incured Expense Invoices. Idaho Power shall be invoiced NEEA's estiated expenses
for Q1-2010 on December 1,2009 which is due and payable within 30 days of receipt of a fial
order from the Idaho Public Utilities Commission authoriing Idaho Power's paricipation in and
-'"
'.
fuding of NEEA. Followig that, quarerly invoices will continue though the contract period
with an invoice date of thl (30) days prior to the quarer and -due date of the fist of each
quarer.
2. Expense Reconciliation. Reconciliation between the estiated expenditues and the
actual expenditures wil be completed 30 days after the quarer end, with the exception of year-
end which will be provided as a draft by Januar 31 of each year and a final reconciliation by
March 1. A tre-up of any varance from the estiate wil be included in the next quarerly
invoice prepared. Ths tre-up wil render the quarerly payment not to exceed 125% of one-
twentieth (l/20th) of its five-year total diect fudig contrbution. Additionally, NEEA will
provide anually a forecast of the followig year's expenses, by quarer, to Idaho Power prior to
the end of October of each year.
Part C - Contact Information
Invoices should be sent to:
Name:
Title:
Theresa Drake
Customer Relations. & Energy Effciency Manager
Organization: Idaho Power Company
Address:P.O. Box 70
Boise, Idao 83707
Phone:
E-mail:
. [phone]
TDrake~idaopower.com