201011042011 DSM Business Plan Appendices.pdf

Appendix A
Summary of the Dual-Fuel Incentive Calculator Implementation Policy
Renee Coelho

Avista‘s Schedule 90 and 190 govern the DSM operations that the Company offers. These tariffs were
designed to provide the utility with sufficient flexibility to be responsive to market conditions and opportunities,
but at the same time impose upon the utility a greater responsibility for ensuring the tariff is implemented
without undue discrimination and within the letter and spirit of the tariff itself.

As a result, the Company has developed a ―Dual-Fuel Incentive Calculator‖ (DFIC) spreadsheet model. This
model ensures a consistency in the calculation of incentives for our customers. The model is most frequently
applied to our site-specific program, given that each project will require a customized incentive calculation, but
is also applied to ―typical‖ projects to determine prescriptive incentive amounts. This tool also provides
engineers, account executives and program managers with key diagnostic statistics regarding the projects to
improve our understanding of how the program is being applied for use in future program design and redesign.

One element that is incorporated into the DFIC model is a series of policy statements. These policies have
been established to improve the consistency of the application of our programs. These policies have been
copied in below in their entirety. The DFIC model is not included in this business plan but is available upon
request.

Policy Guidelines from the DFIC Model

Policy Rules for the Calculation of Customer Incentives
(if in doubt about the interpretation of these rules, consult Renee Coelho or Jon Powell prior to representing
any incentive to the customer)

Definition of Fields within SalesLogix
KW - Customer coincident demand
kWh – direct or primary savings for an electric or dual fuel project
Therms – direct or primary savings for a natural gas or dual fuel project
Secondary kWh – incidental savings or increased usage due to a natural gas or dual fuel project; does
not count for or against goal. Increased usage is entered as a negative.
Secondary therms – incidental savings or increased usage due to an electric or dual fuel project; does
not count for or against goal. Increased usage is entered as a negative.
Measure life – is the measure life for the individual project or the standard measure life when no better
estimate is available. This provides a cross-check to verify whether or not standard measure lives used
in reporting should be adjusted.
Cost – entire cost of the project
Cost for CE Calcs – the incremental cost of the project to be used in the cost-effectiveness calculations
Recurring non-energy benefits – an annual recurring non-energy benefits entered in nominal dollars
One time non-energy benefits – a non-recurring non-energy benefit (i.e. maintenance savings the year
the windows were installed or the difference between regular windows and historical windows)
Schedule 99/199 – pseudo rate schedule for projects with a special contract
Schedule 90 – pseudo rate schedule for dual fuel projects where there are electric savings but the
customer is not an electric customer of the Company
Schedule 190 – pseudo rate schedule for dual fuel projects where there are natural gas savings but the
customer is not a natural gas customer of the Company
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Treatment of Non-Energy Benefits
Data regarding non-energy benefits is to be collected by technical project lead and by account
executive; entry of one time and/or recurring non-energy benefits into SalesLogix being account
executive responsibility
Non-energy benefit data must be incorporated into cost-effectiveness calculations
Non-energy benefits are not to be included in the calculation of simple payback for purposes of
determining the customer‘s incentive
Non-quantifiable non-energy benefits should be documented within the DFIC. This is important for
times when the portfolio may not be cost-effective.
Demand response for our purposes is defined as utility dispatchable and is entered in a separate
demand response part of SalesLogix.

Calculation of Simple Payback (used for Direct Incentives)
Simple payback is the customer cost, as defined within this policy, divided by the first year own-fuel bill
savings accruing to the customer. The incentive level will then be determined by applying that simple
payback to the tier structure defined in Schedule 90 and 190.
Data collection will be the joint responsibility of the technical lead and the account executive.
Coordination and entry of the data into SalesLogix will be the account executive‘s responsibility
The account executive is responsible for submitting the data for calculation of simple payback before
evaluation is submitted to customer.
Data is to be submitted for calculation of simple payback before evaluation is submitted to customer
(when report is handed from technical lead to segment manager)
The final results of the DFIC calculation will be communicated to the account executive prior to being
presented to the customer, unless the account executive approves alternate arrangements.
Capital cost estimates can be arrived at in many ways (e.g., Means Mechnical Estimating, contractor
bids, industry standards, and in-house spreadsheets)
Simple payback calculation are not to include values for non-energy benefits
The simple payback calculation will not include adjustments for secondary energy effects that are not
―own-fuel‖. Thus secondary electric savings are considered in electric efficiency (and dual-fuel and
fuel-switching) calculations and secondary natural gas savings are considered in natural gas efficiency
(or dual-fuel or fuel-switching) calculations. But non-electric savings are not incorporated into electric
SPB calculations nor are non-natural gas savings incorporated into natural gas efficiency SPB‘s.
The calculation will include adjustments for direct non-electric energy effects (e.g., therm penalty as a
result of a fuel switch project).
The calculation will include the bill savings resulting from kWh, kW, kVAR impacts of the project, plus
any associated electric bill, tax or fee impacts.
Calculation is to include adjustments for secondary electric energy effects (e.g., heating increase or
cooling savings resulting in kWh change)
Similar measures (e.g., lighting and lighting controls or HVAC and HVAC controls) will be
bundled for calculations, but dissimilar measures (e.g., lighting and VFDs) will not be combined.
Projects which are served under different rate schedules are never, under any circumstances,
combined into a single project.
Projects which are at different locations are never, under any circumstances, combined into a single
project. For purposes of this policy, different locations mean that the projects involved could not
feasibly be served by a single meter. If the projects could be served by a single meter, the projects will
be combined if they are of a similar measure and on the same rate schedule if the customer benefits
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from combining the multiple projects. The intent is to avoid uneconomic manipulation of metering in
order to allow the combination of projects.
Sales tax paid by the customer and associated with the energy efficiency portion of the project will be
included as a cost for the simple payback calculation.
Energy savings should be valued based upon the actual savings that the customer receives. Generally
this will mean that the highest tier of usage on each individual rate should be used, which is the
methodology embedded in the DFIC model. However, when using this tier would not properly value
customer energy savings, the model rate inputs should be modified by using the hypothetical rate
schedules ―99‖ and ―199‖ to represent the project-specific inputs.

Calculation of Customer Cost (used for Direct Incentives)
The customer costs to be included in the simple payback calculation will be only those associated with
the energy efficiency portion of the project relative to a defined baseline. Energy savings will be
calculated based upon the same definition of the baseline and high efficiency project.
The calculation of customer costs will not include any deductions for non-energy benefits, but the
baseline and high efficiency projects will be defined to exclude these costs and benefits to the extent
possible.
Calculation is not to include adjustments for secondary non-electric energy effects (e.g., heating
increase or cooling savings in therm change)
Calculation is to include all values for electric energy savings; kWh, kW, kVAR
Calculation is to include adjustments for secondary electric energy effects (e.g., heating increase or
cooling savings resulting in kWh change)
Any direct or indirect incentive received by the customer will not be used to reduce the customer cost
for purposes of the calculation of simple payback
The installation of used equipment does qualify for direct incentives, assuming that the equipment
meets the manufacturer‘s code minimum or industry standards. Disposal of the old equipment is not
included in the customer cost for purposes of calculating simple payback, but is considered as a
customer cost for cost-effectiveness purposes
Appropriate base case for projects where existing equipment is in imminent failure is the manufacturer‘s
code minimum or industry standard, whichever is more energy efficient.
Appropriate base case for projects involving new construction or substantial renovation is the
equivalent code minimum or industry standard, whichever is more energy efficient.
Base case for calculation of savings will be the same base case used in calculation of customer
incentives (i.e. A/C upgrade from 8 SEER to 12 SEER when code minimum is 13 SEER—if A/C was
functioning fine with measure life still remaianing savings would be claimed for the upgrade and
incentive paid even though code minimum wasn‘t met. However, if failure was imminent, meeting code
minimum would be necessary to claim savings and pay incentive).

Calculation of Customer Cost (used for Cost-Effectiveness)
Calculation is to include only costs associated with the energy efficiency component of a customer
project
Calculation is to be adjusted for significant differences between remaining life of existing equipment and
expected life of recommended equipment
Calculation is not to include adjustments for non-energy benefits, although non-energy benefits are to
be tracked for inclusion in cost-effectiveness calculations
Calculation is to be performed by the project engineer
Calculation is not to include adjustments for direct incentives
3

Qualifying Projects
Projects that are characterized by having a significant degradation of end-use quality do not qualify for
either customer incentives or credit toward energy savings calculations. Degradation of savings is
defined as a significant reduction to the value, comfort, convenience or other attributes of an end use.
Any non-trivial reduction in the safety of any end-use will disqualify the project. This will apply to both
residential and non-residential projects.

For example, degradation of end use would disqualify projects such as: (1) a lighting retrofit that
reduces the lighting level below industry standards, (2) changes in HVAC temperature settings which
are not associated with any other efficiency project, (3) reductions in lighting levels which are deemed
to adversely affect safety, (4) the closure or destruction of a facility.

Examples of projects which are not disqualified due to degradation of end-use include: (1) reductions in
lighting levels which do not adversely effect comfort, safety or any other end use attribute, (2) changes
in HVAC temperatures when facilities are unoccupied or changes in a manner which do not adversely
effect comfort or any other end use attribute, (3) changes in an industrial process which reduces the
energy use without effecting the quantity or quality of the product, (4) changes in facility operating hours
which do not materially effect the business value of the facility.
Maintenance measures in general do not qualify for incentivization, nor do we take credit for the
efficiency gains from maintenance measures alone. This does not preclude the development of market
transformation programs intended to improve maintenance practice on a sustained basis. Maintenance
measures are defined as measures which bring end-use equipment back to (or towards) their original
level of efficiency or measures which are necessary for the continued operation of the unit as it was
designed to function. Examples of maintenance measures would include filter changes, lamp
replacements, periodic lubrications, replacement of components with an expected life less than the
equipment that it is a part of (e.g. fluorescent tubes). This definition does not preclude providing
incentives for improvements to existing equipment that take it to an efficiency beyond that which it was
originally designed for (e.g. additional of a variable frequency drive to an existing motor). In the case of
an efficiency upgrade the appropriate standard efficiency base case would be the existing equipment,
properly maintained and operating as it was designed to operate.

Capturing of ―Soft Savings‖
Behavioral savings from community outreach and education that are difficult to quantify will not be
included with our primary electric and natural gas savings.

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Appendix B
Tariffs Governing Avista DSM Programs

The regulation permitting Avista to offer and fund DSM programs within our Washington and Idaho service
territory are governed by the nine tariffs. These tariffs are:

Schedule 90 (Washington tariff and Idaho tariff): Specifies the conditions under which Avista operates
electric DSM programs.
Schedule 190 (Washington tariff and Idaho tariff): Specifies the conditions under which Avista operates
natural gas DSM programs.
Schedule 91 (Washington tariff and Idaho tariff): Establishes the tariff rider surcharge funding electric
DSM and (in Washington only) LIRAP programs.
Schedule 191 (Washington tariff and Idaho tariff): Establishes the tariff rider surcharge funding natural
gas DSM and (in Washington only) LIRAP programs.
Schedule 96 (Idaho only): Governs Avista‘s two-year demand-response pilot.

Avista has long sought to offer identical programs to our Washington and Idaho customers to avoid the need
for distinguishing between our Washington and Idaho programs within the marketplace. This is of high
importance given that the two jurisdictions are inextricably joined for purposes of program outreach and
implementation. Thus you will note an extremely high degree of similarity between the tariffs of the two
jurisdictions.

The text of the most recent versions of each of the nine tariffs is contained below. These tariffs are also
available on the Company‘s website at www.avistautlities.com.

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Text of Washington Schedule 90 (governing the conduct of Avista’s electric DSM programs)

SCHEDULE 90
ELECTRIC ENERGY EFFICIENCY PROGRAMS
WASHINGTON
1. AVAILABILITY
The services described herein are available to specified residential, commercial,
and industrial, retail electric distribution customers of Avista for the purpose of promoting
the efficient use of electricity. Customers receiving electric distribution service provided
under special contract and/or customers receiving electric services not specified under
Tariff Schedule 91 (Energy Efficiency Rider Adjustment) are not eligible for services
contained in this schedule unless specifically stated in such contract or other service
agreement. The Company may provide partial funding for the installation of electric
efficiency measures and may provide other services to customers for the purpose of
identification and implementation of cost effective electric efficiency measures as
described in this schedule. These services are available to owners of facilities, and also
may be provided to tenants who have obtained appropriate owner consent.
Assistance provided under this schedule is limited to end uses where electricity is the
primary energy source. Assistance may take the form of monetary incentives or nonmonetary
support, as further defined within this tariff. The Company shall strive to
develop a portfolio of programs that is cost-effective on an aggregate basis. Customer
participation under this schedule shall be based on eligibility requirements contained
herein.
2. ELIGIBLE CUSTOMER SEGMENTS
All customers in all customer segments to whom this tariff is available are eligible for
participation in electric efficiency programs developed in compliance with this tariff. The
broad availability of this tariff does not preclude the Company from targeting measures,
markets and customer segments as part of an overall effort to increase the costeffectiveness
and access to the benefits of electric efficiency.
3. MEASURES
Only electric efficiency measures with verifiable energy savings are eligible for
assistance. Measure eligibility may not necessarily apply to all customer segments.
Final determination of applicable measures will be made by the Company. Eligible
technologies may include, but are not limited to, energy-efficient appliances, assistive
technologies, controls, distributed renewable energy, motors, heating, ventilation and airconditioning
(HVAC) systems, lighting, maintenance, monitoring, new technologies, and
shell.
Incentives for distributed renewable energy measures will be limited to net-metering
facilities operating under Avista Utilities Idaho/Washington Rate Schedule 63 Net
Metering rules. Incentives will be limited to energy production not to exceed 100% of the
average annual energy use of the facility for the preceding three years or if new, a
similar facility's annual use as calculated by the Company. Incentives will be limited to
50% of the total cost of the installation. This market transformation effort supports
renewable energy measures in the residential and small commercial segments.
Market transformation ventures will be considered eligible for funding to the extent
that they improve the adoption of electric efficiency measures that are not fully accepted
in the marketplace. These market transformation efforts may include efforts funded
through regional alliances or other similar opportunities.
4. FUNDING AND NONMONETARY ASSISTANCE
4.1 Funding
The incentive to be provided by the Company for electric or fuel-conversion
efficiency measure(s) is based upon the simple payback of the measure prior to the
application of an incentive, as calculated by Company staff and based upon
standardized measure cost(s). These incentive tiers apply to measures with energy
savings lasting 10 years or longer that meet or exceed the higher of the current energy
6

code or industry practice that are applicable to the project. Simple payback is defined as
the capital cost of the project divided by the energy savings per year. Fuel-conversion
incentives are available only for conversion to natural gas with an end-use efficiency of
44% or greater. The incentives shall be as follows:
Incentive Level
(cents per first year kWh saved)
Measures
Simple Pay-Back
Period (Minimum measure life of 10 years*)
Electric Efficiency 1 to under 2 years 8 cents
2 to under 4 years 12 cents
4 to under 6 years 16 cents
6 to under 10 years 20 cents
Over 10 years ** 20 cents
Over 10 years *** 12 cents
Fuel-Conversion 1 to under 2 years 1 cents
2 to under 4 years 3 cents
4 to under 6 years 5 cents
Over 6 years 7 cents
* Measures with an energy savings life less than 10 years may receive an
incentive amount not to exceed the full incremental cost of the measure.
** Applicable only to non-lighting measures.
*** Applicable only to lighting measures .
Incentives in which the tier structure applies will be capped at 50% percent of the
incremental project cost with the exception of the following that may be capped at a
maximum of 100% of the measure cost:
4.1.1 DSM programs delivered by community action agencies contracted by
the Company to serve Limited Income or vulnerable customer segments
including agency administrative fees and health and human safety
measures;
4.1.2 Low-cost electric efficiency measures with demonstrable energy
savings (e.g. compact fluorescent lamps);
4.1.3 Programs or services supporting or enhancing local, regional or national
electric efficiency market transformation efforts.
The Company will actively pursue electric efficiency opportunities that may not fit
within the prescribed services and simple pay-back periods described in this tariff. In
these circumstances the customer and the Company will enter into a site specific
services agreement.
4.2 Non-Monetary Assistance
Assistance without the granting of direct monetary incentives to the customer is
available across all applicable segments and may be provided in various ways, that
include, but are not limited to, the following:
4.2.1. Educational, training or informational activities that enhance electric
efficiency. This may include technology or customer-segment specific
seminars, literature, trade-show or community events, advertising or other
approaches to increasing the awareness and adoption of resource efficient
measures and behaviors.
4.2.2. Financial activities intended to reduce or eliminate the financial barriers to
the adoption of electric efficiency measures. This may include programs
intended to reduce the payment rate for resource efficiency measures, direct
provision of leased or loaned funds or other approaches to financial issues
with better than existing market terms and conditions.
4.2.3. Product samples may be provided directly to the customer when energy
efficiency products may be available to the utility at significantly reduced cost
as a result of cooperative buying or similar opportunities.
7

8

Text of Washington Schedule 91 (establishing the tariff rider surcharge funding Avista’s electric DSM programs)

SCHEDULE 91
PUBLIC PURPOSES RIDER ADJUSTMENT - WASHINGTON
APPLICABLE:
To Customers in the State of Washington where the Company has electric service available. This Public
Purposes Rider or Rate Adjustment shall be applicable to all retail customers for charges for electric
energy sold and to the flat rate charges for Company-owned or Customer-owned Street Lighting and Area
Lighting Service. This Rate Adjustment is designed to recover costs incurred by the Company associated
with providing Demand Side Management services and programs and Low Income Rate Assistance
(LIRAP) to customers.
MONTHLY RATE:
The energy charges of the individual rate schedules are to be increased by the following amounts:
DSM Rate LIRAP Rate
Schedule 1 $0.00317 per kWh $0.00058 per kWh(I)
Schedule 11 & 12 $0.00449 per kWh $0.00081 per kWh(I)
Schedule 21 & 22 $0.00331 per kWh $0.00060 per kWh(I)
Schedule 25 $0.00217 per kWh $0.00039 per kWh(I)
Schedule 31 & 32 $0.00295 per kWh $0.00052 per kWh(I)
Schedules 41-48 4.65% of base rates (R) 0.84% of base rates (I)
SPECIAL TERMS AND CONDITIONS:
Service under this schedule is subject to the Rules and Regulations contained in this tariff.
The above Rate is subject to increases as set forth in Tax Adjustment Schedule 58.

9

Text of Washington Schedule 190 (governing the conduct of Avista’s gas DSM programs)

SCHEDULE 190
NATURAL GAS EFFICIENCY PROGRAMS
WASHINGTON
1. AVAILABILITY
The services described herein are available to qualifying residential, commercial,
and industrial, retail natural gas distribution customers of Avista Corporation for the
purpose of promoting the efficient use of natural gas. Customers receiving natural gas
distribution service provided under special contract and/or customers receiving natural
gas services not specified under Tariff Schedule 191 (Natural Gas Efficiency Rider
Adjustment) are not eligible for services contained in this schedule unless specifically
stated in such contract or other service agreement. The Company may provide partial
funding for the installation of natural gas efficiency measures and may provide other
services to customers for the purpose of identification and implementation of cost
effective natural gas efficiency measures as described in this schedule. Facilities-based
services are available to owners of facilities, and also may be provided to tenants who
have obtained appropriate owner consent.
Assistance provided under this schedule is limited to end uses where natural gas is
or would be the energy source and to measures which increase the efficient use of
natural gas. Assistance may take the form of monetary incentives or non-monetary
incentives, as further defined within this tariff. The acquisition of resources is costeffective
as defined by a Total Resource Cost test (TRC) as a portfolio. Customer
participation under this schedule shall be based on eligibility requirements contained
herein.
2. ELIGIBLE CUSTOMER SEGMENTS
All customers in all customer segments to whom this tariff is available are eligible for
participation in natural gas efficiency programs developed in compliance with this tariff.
The broad availability of this tariff does not preclude the Company from targeting
measures, markets and customer segments as part of an overall effort to increase the
cost-effectiveness and access to the benefits of natural gas efficiency.
3. MEASURES
Only natural gas efficiency measures with verifiable energy savings are eligible for
assistance. Measure eligibility may not necessarily apply to all customer segments.
Final determination of applicable measures will be made by the Company.
Market transformation ventures will be considered eligible for funding to the extent
that they improve the adoption of natural gas efficiency measures that are not fully
accepted in the marketplace. These market transformation efforts may include efforts
funded through regional alliances or other similar opportunities.
4. FUNDING AND NONMONETARY ASSISTANCE
4.1 Funding
The incentive level provided by the Company to a customer for natural gas efficiency
measure(s) is based upon the simple payback of the measure prior to the application of
an incentive, as calculated by Company staff and based upon standardized measure
cost(s). Simple payback is defined as the capital cost of the project divided by the
energy savings per year. The incentives shall be as follows:
Measures Simple Pay-Back Period Incentive Level
(dollars/first year therm saved)
(Minimum measure life of 10
years*)
I to 2 years 2.00
2 to 4 years 2.50
Natural Gas Efficiency
4 to 6 years 3.00
Over 6 years 3.50
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*Measures with an energy savings life less than 10 years may receive an incentive
amount not to exceed the full incremental cost of the measure.
Incentives in which the tier structure applies will be capped at 50% of the incremental
project cost with the exception of the following that may be capped at a maximum of
100% of the measure cost:
4.1.1 Energy efficiency programs delivered by community action agencies
contracted by the Company to serve Limited Income or vulnerable
customer segments including agency administrative fees and health and
human safety measures;
4.1.2 Low-cost natural gas efficiency measures with demonstrable energy
savings (e.g. rooftop unit service);
4.1.3 Programs or services supporting or enhancing local, regional or national
natural gas efficiency market transformation efforts.
Avista Corporation will actively pursue natural gas efficiency opportunities that may
not fit within the prescribed services and simple pay-back periods described in this tariff.
In these circumstances the customer and Avista Corporation will enter into a site specific
services agreement.
4.2 Non-Monetary Assistance
Non-monetary assistance is service that does not involve the granting of direct monetary
incentives to the customer. This type of assistance is available across all applicable
segments. This assistance may be provided in various ways that include, but are not limited
to, the following:
4.2.1. Educational, training or informational activities that enhance resource
efficiency. This may include technology or customer-segment specific
seminars, literature, trade-show booths, advertising or other approaches to
increasing the awareness and adoption of resource efficient measures and
behaviors.
4.2.2. Financial activities intended to reduce or eliminate the financial barriers to
the adoption of resource efficiency measures. This may include programs
intended to reduce the payment rate for resource efficiency measures, direct
provision of leased or loaned funds or other approaches to financial issues by
better than existing market terms and conditions.
4.2.3. Product samples may be provided directly to the customer when resource
efficient products may be available to the utility at significantly reduced cost
as a result of cooperative buying or similar opportunities.
4.2.4. Technical Assistance may consist of engineering, financial or other analysis
provided to the customer by or under the direction of, Avista Corporation
staff. This may take the form of design reviews, product demonstrations,
third-party bid evaluations, facility audits, measurement and evaluation
analysis or other forms of technical assistance that addresses the costeffectiveness,
technical applicability or end-use characteristics of customer
alternatives.
5. BUDGET & REPORTING
The natural gas efficiency programs defined within this tariff will be funded by
surcharges levied within Schedule 191. The Company will manage these
programs to obtain resources that are cost-effective from a Total Resource Cost
perspective and achievable through utility intervention. Schedule 191 will be
reviewed periodically and revised as necessary to provide adequate funding for
natural gas efficiency efforts.

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Text of Washington Schedule 191 (establishing the tariff rider surcharge funding Avista’s natural gas DSM
programs)

SCHEDULE 191
PUBLIC PURPOSES RIDER ADJUSTMENT - WASHINGTON
APPLICABLE:
To Customers in the State of Washington where the Company has natural
gas service available. This Public Purposes Rider or Rate Adjustment shall be
applicable to all retail customers taking service under Schedules 101, 111, 112,
121, 122, 131, and 132. This Rate Adjustment is designed to recover costs
incurred by the Company associated with providing Demand Side Management
services and programs, and Low Income Rate Assistance (LIRAP) to customers.
MONTHLY RATE:
The energy charges of the individual rate schedules are to be increased by
the following amounts:
DSM Rate LIRAP Rate
Schedule 101 $0.05135 per Therm(I) $0.00979 per Therm
Schedule 111 & 112 $0.04939 per Therm(I) $0.00846 per Therm
Schedule 121 & 122 $0.04675 per Therm(I) $0.00781 per Therm
Schedule 131 & 132 $0.04298 per Therm(I) $0.00756 per Therm
SPECIAL TERMS AND CONDITIONS:
Service under this schedule is subject to the Rules and Regulations
contained in this tariff.
The above Rate is subject to increases as set forth in Tax Adjustment
Schedule 158.
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Text of Idaho Schedule 90 (governing the conduct of Avista’s electric DSM programs)

SCHEDULE 90
ELECTRIC ENERGY EFFICIENCY PROGRAMS
IDAHO
1. Availability
The services described herein are available to specified residential,
commercial, and industrial, retail electric distribution customers of Avista
Corporation for the purpose of promoting the efficient use of electricity.
Customers receiving electric distribution service provided under special contract
and/or customers receiving electric services not specified under Tariff Schedule
91 (Energy Efficiency Rider Adjustment) are not eligible for services contained in
this schedule unless specifically stated in such contract or other service
agreement. The Company may provide partial funding for the installation of
electric efficiency measures and may provide other services to customers for the
purpose of identification and implementation of cost effective electric efficiency
measures as described in this schedule. Facilities-based services are available
to owners of facilities, and also may be provided to tenants who have obtained
appropriate owner consent.
Assistance provided under this schedule is limited to end uses where
electricity is the energy source. Assistance may take the form of monetary
incentives or non-monetary incentives, as further defined within this tariff. The
acquisition of resources is cost-effective as defined by a Total Resource Cost
test (TRC) as a portfolio. Customer participation under this schedule shall be
based on eligibility requirements contained herein.
2. ELIGIBLE CUSTOMER SEGMENTS
All customers in all customer segments to whom this tariff is available are
eligible for participation in electric efficiency programs developed in compliance
with this tariff. The broad availability of this tariff does not preclude the Company
from targeting measures, markets and customer segments as part of an overall
effort to increase the cost-effectiveness and access to the benefits of electric
efficiency.
3. MEASURES
Only electric efficiency measures with verifiable energy savings are
eligible for assistance. Measure eligibility may not necessarily apply to all
customer segments. Final determination of applicable measures will be made
by the Company. Eligible technologies may include, but are not limited to,
energy-efficient appliances, assistive technologies, controls, distributed
renewable energy, motors, heating, ventilation and air-conditioning (HVAC)
systems, lighting, maintenance, monitoring, new technologies, and shell.
Incentives for distributed renewable energy measures will be limited to
net-metering facilities operating under Avista Utilities Idaho/Washington Rate
Schedule 63 Net Metering rules. Incentives will be limited to energy
production not to exceed 100% of the average annual energy use of the
facility for the preceding three years or if new, a similar facility‘s annual use as
calculated by the Company. Incentives will be limited to 50% of the total cost
of the installation. This market transformation effort supports renewable
energy measures in the residential and small commercial segments.
Market transformation ventures will be considered eligible for funding to
the extent that they improve the adoption of electric efficiency measures that
13

are not fully accepted in the marketplace. These market transformation
efforts may include efforts funded through regional alliances or other similar
opportunities.
4. FUNDING AND NONMONETARY ASSISTANCE
4.1 Funding
The incentive to be provided by the Company for electric or fuel-conversion efficiency
measure(s) is based upon the simple payback of the measure prior to the application of
an incentive, as calculated by Company staff and based upon standardized measure
cost(s). These incentive tiers apply to measures with energy savings lasting 10 years or
longer that meet or exceed the higher of the current energy code or industry practice that
are applicable to the project. Simple payback is defined as the capital cost of the project
divided by the energy savings per year. Fuel-conversion incentives are available only
for conversion to natural gas with an end-use efficiency of 44% or greater. The
incentives shall be as follows:
Incentive Level
(cents per first year kWh saved)
Measures
Simple Pay-Back
Period (Minimum measure life of 10 years*)
Electric Efficiency 1 to under 2 years 8 cents
2 to under 4 years 12 cents
4 to under 6 years 16 cents
6 to under 10 years 20 cents
Over 10 years ** 20 cents
Over 10 years *** 12 cents
Fuel-Conversion 1 to under 2 years 1 cents
2 to under 4 years 3 cents
4 to under 6 years 5 cents
Over 6 years 7 cents
* Measures with an energy savings life less than 10 years may receive an
incentive amount not to exceed the full incremental cost of the measure.
** Applicable only to non-lighting measures.
*** Applicable only to lighting measures .
Incentives in which the tier structure applies will be capped at 50% percent of the
incremental project cost with the exception of the following that may be capped at a
maximum of 100% of the incremental cost:
4.1.1 Limited Income or vulnerable customer segments and the agencies
serving those customers;
4.1.2 Low-cost electric efficiency measures with demonstrable energy
savings (e.g. compact fluorescent lamps);
4.1.3 Programs or services supporting or enhancing local, regional or
national electric efficiency market transformation efforts.
4.2 Non-Monetary Assistance
Non-monetary assistance is service that does not involve the granting of direct
monetary incentives to the customer. This type of assistance is available across all
applicable segments. This assistance may be provided in various ways that include, but
are not limited to, the following:
4.2.1. Educational, training or informational activities that enhance resource
efficiency. This may include technology or customer-segment specific
seminars, literature, trade-show booths, advertising or other approaches to
increasing the awareness and adoption of resource efficient measures and
behaviors.
4.2.2. Financial activities intended to reduce or eliminate the financial barriers to
the adoption of resource efficiency measures. This may include programs
intended to reduce the payment rate for resource efficiency measures, direct
14

provision of leased or loaned funds or other approaches to financial issues by
better than existing market terms and conditions.
4.2.3. Product samples may be provided directly to the customer when resource
efficient products may be available to the utility at significantly reduced cost
as a result of cooperative buying or similar opportunities.
4.2.4. Technical Assistance may consist of engineering, financial or other analysis
provided to the customer by or under the direction of, Avista Corporation
staff. This may take the form of design reviews, product demonstrations,
third-party bid evaluations, facility audits, measurement and evaluation
analysis, project management or other forms of technical assistance that
addresses the cost-effectiveness, technical applicability or end-use
characteristics of customer alternatives.

15

Text of Idaho Schedule 91 (establishing the tariff rider surcharge funding Avista’s electric DSM programs)

SCHEDULE 91
ENERGY EFFICIENCY RIDER ADJUSTMENT - IDAHO
APPLICABLE:
To Customers in the State of Idaho where the Company has electric service available. This Energy
Efficiency Rider or Rate Adjustment shall be applicable to all retail customers for charges for electric
energy sold and to the flat rate charges for Company-owned or Customer-owned Street Lighting and Area
Lighting Service. This Rate Adjustment is designed to recover costs incurred by the Company associated
with providing energy efficiency services and programs to customers.
MONTHLY RATE:
The energy charges of the individual rate schedules are to be increased by the following amounts:
Schedule 1 - .258 ¢ per kWh Schedule 25 - .166 ¢ per kWh
Schedule 11 & 12 - .303 ¢ per kWh Schedule 25P - .146 ¢ per kWh
Schedule 21 & 22 - .232 ¢per kWh Schedule 31 & 32 - .242 ¢ per kWh
Flat rate charges for Company-owned or Customer-owned Street Lighting and Area Lighting Services
(Schedules 41, 42, 43, 44, 45, 46, 47, 48 & 49) are to be increased by 3.64%.
SPECIAL TERMS AND CONDITIONS:
Service under this schedule is subject to the Rules and Regulations contained in this tariff.
The above Rate is subject to increases as set forth in Tax Adjustment Schedule 58.
16

Text of Idaho Schedule 96 (governing Avista’s demand-response pilot program)

SCHEDULE 96
ENERGY LOAD MANAGEMENT PROGRAMS - PILOT
PURPOSE:
To provide residential and commercial demand response programs for a two-year period. Internet
protocol thermostats, direct control units and related technology may be installed to test reduction in
energy usage at peak times of the year.
AVAILABLE
To Rate Schedule 1, 11, and 21 Customers in the State of Idaho where the Company provides electric service in
selected areas of Sandpoint and Moscow.
APPLICABLE
To all customers receiving electric service who agree to participate under this schedule.
INCENTIVE
Participating customers with demand response switches will receive an audit on all equipment controlled via the switch
plus a $10 a month credit for the months of July, August, December, January and February.
SPECIAL TERMS AND CONDITIONS
Qualifying participants must be homeowners or business owners occupying the premises for at least one year on a
full-time basis.
Customers can have an alternate non-electric back-up heat source (an alternate heat source will be required if
demand response units are to be installed on baseboard electric load).
Participating customers will have no incremental costs.
This program will provide load use controls for some of the following appliances:
• Air – Conditioning
• Complete HVAC system (electric heat-pump w/air conditioning)
• Water Heater
• Pool Pump
• Electric Forced Air Heating System
• Electric Base Board Heating System
• Irrigation pump (if any)
Customers may apply for or terminate from this schedule anytime during the pilot.

Issued by Avista Corporation By Kelly Norwood, Vice President State and Federal Regulation

17

Text of Idaho Schedule 190 (governing the conduct of Avista’s natural gas DSM programs)

SCHEDULE 190
NATURAL GAS EFFICIENCY PROGRAMS
IDAHO
1. AVAILABILITY
The services described herein are available to qualifying residential, commercial,
and industrial, retail natural gas distribution customers of Avista Corporation for the
purpose of promoting the efficient use of natural gas. Customers receiving natural gas
distribution service provided under special contract and/or customers receiving natural
gas services not specified under Tariff Schedule 191 (Natural Gas Efficiency Rider
Adjustment) are not eligible for services contained in this schedule unless specifically
stated in such contract or other service agreement. The Company may provide partial
funding for the installation of natural gas efficiency measures and may provide other
services to customers for the purpose of identification and implementation of cost
effective natural gas efficiency measures as described in this schedule. Facilities-based
services are available to owners of facilities, and also may be provided to tenants who
have obtained appropriate owner consent.
Assistance provided under this schedule is limited to end uses where natural gas is
or would be the energy source and to measures which increase the efficient use of
natural gas. Assistance may take the form of monetary incentives or non-monetary
incentives, as further defined within this tariff. The acquisition of resources is costeffective
as defined by a Total Resource Cost test (TRC) as a portfolio. Customer
participation under this schedule shall be based on eligibility requirements contained
herein.
2. ELIGIBLE CUSTOMER SEGMENTS
All customers in all customer segments to whom this tariff is available are eligible for
participation in natural gas efficiency programs developed in compliance with this tariff.
The broad availability of this tariff does not preclude the Company from targeting
measures, markets and customer segments as part of an overall effort to increase the
cost-effectiveness and access to the benefits of natural gas efficiency.
3. MEASURES
Only natural gas efficiency measures with verifiable energy savings are eligible
for assistance. Measure eligibility may not necessarily apply to all customer
segments. Final determination of applicable measures will be made by the
Company.
Market transformation ventures will be considered eligible for funding to the
extent that they improve the adoption of natural gas efficiency measures that are not
fully accepted in the marketplace. These market transformation efforts may include
efforts funded through regional alliances or other similar opportunities.
4. FUNDING AND NONMONETARY ASSISTANCE
4.1 Funding
The incentives specified below are provided by the Company to promote the best
use of natural gas resources. Incentives are based upon the simple payback of the
measure prior to the application of an incentive, as calculated by Company staff and
based upon standardized measure cost(s). These incentive tiers apply to measures with
energy savings lasting 10 years or longer that meet or exceed current manufacturing
and energy codes and/or industry standard practices that are applicable to the project.
Simple payback is defined as the capital cost of the project divided by the energy
savings per year. The incentives shall be as follows:
Measures Simple Pay-Back Period Incentive Level
(dollars/first year therm saved)
(Minimum measure life of 10
years*)
1 to 2 years 2.00
18

2 to 4 years 2.50
Natural Gas Efficiency
4 to 6 years 3.00
Over 6 years 3.50
*Measures with an energy savings life less than 10 years may receive an incentive
amount not to exceed the full incremental cost of the measure.
Incentives in which the tier structure applies will be capped at 50% of the incremental
project cost with the exception of the following that may be capped at a maximum of
100% of the measure cost:
4.1.1 Energy efficiency programs delivered by community action agencies
contracted by the Company to serve Limited Income or vulnerable
customer segments including agency administrative fees and health
and human safety measures;
4.1.2 Low-cost natural gas efficiency measures with demonstrable energy
savings (e.g. rooftop unit service);
4.1.3 Programs or services supporting or enhancing local, regional or
national natural gas efficiency market transformation efforts.
Avista Corporation will actively pursue natural gas efficiency opportunities that may
not fit within the prescribed services and simple pay-back periods described in this tariff.
In these circumstances the customer and Avista Corporation will enter into a site specific
services agreement.
4.2 Non-Monetary Assistance
Non-monetary assistance is service that does not involve the granting of direct
monetary incentives to the customer. This type of assistance is available across all
applicable segments. This assistance may be provided in various ways, that include, but
are not limited to, the following:
4.2.1. Educational, training or informational activities that enhance resource
efficiency. This may include technology or customer-segment specific
seminars, literature, trade-show booths, advertising or other approaches to
increasing the awareness and adoption of resource efficient measures and
behaviors.
4.2.2. Financial activities intended to reduce or eliminate the financial barriers to
the adoption of resource efficiency measures. This may include programs
intended to reduce the payment rate for resource efficiency measures, direct
provision of leased or loaned funds or other approaches to financial issues by
better than existing market terms and conditions.
4.2.3. Product samples may be provided directly to the customer when resource
efficient products may be available to the utility at significantly reduced cost
as a result of cooperative buying or similar opportunities.
4.2.4. Technical Assistance may consist of engineering, financial or other analysis
provided to the customer by or under the direction of, Avista Corporation
staff. This may take the form of design reviews, product demonstrations,
third-party bid evaluations, facility audits, measurement and evaluation
analysis or other forms of technical assistance that addresses the costeffectiveness,
technical applicability or end-use characteristics of customer
alternatives.
5. BUDGET & REPORTING
The natural gas efficiency programs defined within this tariff will be funded by
surcharges levied within Schedule 191. The Company will manage these programs to
obtain resources that are cost-effective from a Total Resource Cost perspective and
achievable through utility intervention. Schedule 191 will be reviewed annually and
revised as necessary to provide adequate funding for natural gas efficiency efforts.
6. OPTIONAL HIGH ANNUAL LOAD FACTOR LARGE GENERAL SERVICE
PROGRAM
Customers receiving natural gas service under Schedules 131 and 132 with costeffective
natural gas efficiency projects are eligible to respond to the Company‘s
19

Request for Proposals (RFP). The RFP will be developed jointly with
representative Customers and the Northwest Industrial Gas Users (NWIGU). The RFP
will be available for release no later than April 1, 2001 and annually thereafter.
Natural gas savings are to be calculated using standard engineering practices, and
with operations schedules documented by the Customer. The Company will review
natural gas savings calculations, and reserves the right to modify energy savings
estimates. Actual savings may be trued up based on post-installation energy use
monitoring. Further details will be provided in the RFP.
Funding is available directly to the Customer upon receipt of customer verification of
completed installation. The Company will fund cost-effective projects, using the costeffectiveness
standards to determine the value of natural gas savings, such that the
Company‘s incentive satisfies the Total Resource Cost test (TRC) as a portfolio. Project
funding will be up to the amount of conservation revenues collected from the Schedule
131 and 132 Customers under Schedule 191 of this Tariff over the period for which this
Schedule is in effect, minus the Company‘s cost to administer this program. Annual
incentive amounts for this program will be subject to the Company‘s annual budget for
energy efficiency programs. Further provisions will be provided in the RFP. The
Company, at its option, may inspect installations prior to payments of the funding.

20

Text of Idaho Schedule 191 (establishing the tariff rider surcharge funding Avista’s natural gas DSM programs)

SCHEDULE 191
ENERGY EFFICIENCY RIDER ADJUSTMENT - IDAHO
APPLICABLE:
To Customers in the State of Idaho where the Company has natural gas service available. This Energy
Efficiency Rider or Rate Adjustment shall be applicable to all retail customers taking service under Schedules
101, 111, 112, 131, and 132. This Rate Adjustment, is designed to recover costs incurred by the Company
associated with providing energy efficiency services and programs to customers. The Company may, at its
discretion to match revenue under this schedule with demand for services under Schedule 190, reduce or
increase this charge on an annual basis. Any change in this charge is subject to Commission approval and its
review of the previous year expenditures under Schedule 190 and determinations with regard to any revenue
carry forward, and prospective budget on an annual basis. Any annual expenditures exceeding annual
collections when combined with any carry forward budget surplus shall be at the Company‘s risk of future
recovery.
MONTHLY RATE:
The energy charges of the individual rate schedules are to be increased by the following amounts:
Schedule 101 $0.05762 per Therm
Schedule 111 & 112 $0.05038 per Therm
Schedule 131 & 132 $0.04020 per Therm
SPECIAL TERMS AND CONDITIONS:
Service under this schedule is subject to the Rules and Regulations contained in this tariff.
The above Rate is subject to increases as set forth in Tax Adjustment Schedule 158.
21

Appendix C
Heritage Plan Analytical Roadmap

Attached below is a copy of the Heritage Plan ―Analytical Roadmap‖ that was used in 2007 to develop a
methodology for developing an electric avoided cost price signal that is more specific and useful for purposes
of evaluating electric efficiency measures. As a result of this effort Avista was able to better isolate the cost
associated with capacity vs. energy and to incorporate a risk valuation premium within the avoided cost
structure.

This methodology has been used for the development of the avoided cost streams used for DSM analysis
since that date.

22

Heritage Project

Analytics Task Force
Road Map

Date: October 4, 2007
Presented by: Dave DeFelice, Bruce Folsom, Lori Hermanson,
Bill Johnson, John Lyons, Jon Powell
23

Task Force Road Map

Introduction

Avista established a new demand response initiative, called the Heritage Project, in 2006. The
goals of the Heritage Project are to increase the acquisition of sustainable and cost-effective
energy and demand savings through comprehensively examining and implementing expanded
energy efficiency programs, peak shaving/shifting programs, and other options (e.g., distribution
system efficiencies). This project continues the Company‘s legacy of conservation innovation
and education on our customers‘ behalf.

The identification of cost-effective resources and appropriate cost-recovery depends
upon a technically sound and transparent analytical approach. Representatives of
several departments developed the analytical process and the estimates necessary to
proceed with the Heritage Project. Updates to this analytical process will be done as
circumstances change, such as the underlying avoided cost of energy and carbon
legislation.

Resource valuation for Heritage Project concepts has centered around six categories of
resource value. Four of these values are part of a total avoided cost of energy usage
and the remaining two values represent reductions in system-coincident demand.

The resource value of energy includes:
Commodity cost of energy
Avoiding carbon emissions
Reducing retail rate volatility
Reducing transmission and distribution system losses

The value of system-coincident capacity includes deferring future investments in:
Generation capacity
Transmission and distribution
24

Calculation of Resource Value Components
The calculation of resource value begins with the commodity cost of energy. To this are added costs to
reflect avoided carbon emissions, retail rate volatility, and transmission and distribution system losses.
Each is described, in turn, below.
1. Commodity Cost of Energy
The base, or commodity, cost of electricity was calculated in Avista‘s 2007 Integrated
Resource Plan (IRP). Wholesale electric prices were estimated based upon 300
iterations of the AURORAXMP market forecasting model under varying load, hydro, wind,
forced outages, emissions, and natural gas prices in the Western Interconnect for the
period 2008 to 2028. Renewable portfolio standards and projected carbon emissions
costs are included in the base case market prices. The model chooses the most
economic resources available to satisfy projected load obligations, including reserves
for system reliability (i.e., planning margin). The IRP modeling results include a cost for
carbon and other regulated emissions. Of these emission costs, the carbon emissions
value was subtracted from the avoided energy cost calculations for separate treatment
(in Section 2, below) because of the unique risks associated with this component.

Table 1 shows estimated avoided energy costs for 10-, 20- and 40-year periods
(excluding carbon costs emission values).

TABLE 1: Annual Average Avoided Cost ($/MWH)

49.60 55.84 69.41
53.59 60.47 75.47
44.23 49.60 61.25

2. Avoided Carbon Emissions Cost
New thermal resources produce emissions that have costs from taxes or cap and trade
programs. Four emissions types are included in the IRP base case market forecast:
carbon dioxide (CO2), sulfur dioxide (SO2), nitrogen oxide (NOx) and mercury (Hg). A
more detailed discussion of how emissions costs are calculated may be found in the
Environmental Issues section of Avista‘s 2007 IRP.

Carbon emissions are separated from other pollutants because of uncertainty over how
such emissions will be regulated. Many state and regional initiatives now compete with
a multitude of cap and trade proposals at the national level. Avista‘s 2007 IRP reflects
CO2 costs as a probability distribution using the National Commission on Energy Policy
(NCEP) for its mean value starting in 2015. The NCEP case is a comprehensive
25

climate change risk reduction program study that was released in December 2004. The
NCEP case is conservative compared to recent federal proposals. Carbon emissions
costs may differ significantly from this analysis depending on which, if any, of the federal
or state laws are passed. Carbon emission costs will be updated as the legislative
process develops.

Table 2 provides estimates for levelized CO2 emission costs. The 10-year costs are
significantly lower than 20-years costs because the CO2 market is modeled to begin in
2015. Avoided CO2 emission costs will increase significantly if legislation more stringent
than the NCEP is adopted, or if a cap and trade program begins prior to 2015.

TABLE 2: Annual Average Avoided CO2 Emissions Cost ($/MWH)

1.96 4.29 5.83
2.02 4.38 6.10
1.89 4.18 5.48

3. Energy Cost Volatility
Energy consumers are presumed to be adverse to volatility and willing to pay a
premium for rate stability. In this analysis, volatility in the electricity market forecast is
referred to as ―risk.‖ Fixed cost resources, such as Heritage Project measures avoid
market volatility, or risk, because they do not rely upon any of the price drivers
persistent in the marketplace, such as the cost of natural gas used to fuel a plant. An
example of societies‘ preference for rate stability can be illustrated by its willingness to
pay for reserve margins, normally covered by the construction and operation of peaking
plants. These plants have very high operating costs on a per-MWh basis because they
run sparingly; however, they mitigate the risk of buying higher priced power in tight
market situations.

Several different risk quantification methodologies were applied to this analysis. The
first considered various confidence intervals around the mean value of the 300
AURORAXMP Monte Carlo iterations. The analytics team found that this methodology
could not sufficiently establish a relationship between a ratepayer‘s willingness to pay
for less risk and any particular confidence interval. The Black-Scholes model was also
evaluated to determine the risk premium. This model calculates the intrinsic value of a
price cap to limit ratepayer risk. Ultimately, a third approach to the risk premium
valuation using PRiSM was selected to remain consistent with the IRP.

26

PRiSM uses a linear programming model routine to determine the optimal amount and
timing of future resource acquisitions and their associated costs. PRiSM is able to
separate capacity and risk reduction values. Once capacity needs are met, PRiSM
looks for cost-effective ways to lower power cost volatility. The volatility reduction
strategy generally involves adding resources with high capital and low variable costs.
These types of resources, such as wind generation, increase expected costs through
the higher capital component and decrease expected risk through lower variable costs.
Table 3 shows the premium that would be paid above the ―short-term‖ market price to
obtain resources that would reduce risk to the same levels as those resources that
would be acquired through the Heritage Project. Incorporating this value into the
avoided costs facilitates the comparison of alternative resource costs on a risk-adjusted
basis.

TABLE 3: Annual Average Avoided Risk Cost ($/MWH)

10.09 10.63 9.41

4. Reduction in Transmission and Distribution Energy Losses
The analytics team used a 6.5% average loss factor for transmission and distribution
(T&D) projects. A precise estimate of T&D system impacts is difficult to quantify for
Heritage Projects. Geography, season, time-of–day and other considerations can
impact these calculations in a manner that is not easily translated into assumptions
regarding specific resource options. Nevertheless, an estimate of the impact of a
reduction in end-use demand upon T&D losses is required for resource analysis.

Discussions are underway to improve the quality of efficiency analyses by separating
T&D losses between summer (space cooling) and winter peak (space heating) peaks.
The improvements will incorporate both demand and ambient temperatures into the
analysis of evaluated resource options.

Based upon the estimates of the avoided cost of energy, emissions and risk reduction
valuation above (using the flat load assumptions), an adder of $4.01 per MW is
incorporated into the energy avoided cost, as illustrated in Table 4.

TABLE 4: Estimate of Value of Reduced T&D
Losses
(using flat load assumption over a 10-year
horizon)
27

$/MWh
2
Total of above energy values 61.65

Resulting total value of energy

5. Value of Avoided Generation Capacity
Some Heritage Project programs have disproportionate (relative to system) impacts on
peak summer loads where market prices are high. There are opportunities including
dispatchable programs that yield little or no energy savings, but offer the region the
opportunity to avoid or postpone the construction of generation capacity. As these
programs are dispatchable, their values are not properly reflected in market price
forecasts derived by the AURORAXMP model. It is necessary to evaluate these
opportunities as ―naked‖ capacity (capacity without any energy). The value of capacity
estimated in this section is applicable to resources possessing virtually no energy
content, which essentially limits this value to demand-response programs.

A pure capacity value of $300 per kilowatt is based upon the remaining capital cost of a
combustion turbine not offset by energy revenues. Table 5 illustrates how the pure
capacity value is derived. The initial installed capacity cost of the turbine is $450 per
kilowatt. When the turbine is dispatched against the short-term electricity market it
generates margins (electric revenue less fuel and O&M costs) to offset $150 per
kilowatt of the initial installed cost. The remaining $300 per kilowatt of capacity cost that
is not offset by the value of energy sales is the pure capacity cost.

TABLE 5: Derivation of Pure Capacity Cost Based On a Simple Cycle Combustion
Turbine

28

Northwest electricity markets witness higher prices during summer space cooling-driven regional
peaks. Price excursions with very high prices are typically short, but reducing energy purchases
during these periods can significantly reduce power supply costs. There are opportunities for
Avista to implement demand-response and energy efficiency measures that would reduce native
loads during these peak periods. The derived generation capacity value is applied to determine
the cost-effectiveness of these opportunities.

6. Value of Avoided Transmission and Distribution Capital Investments
Decreasing electrical consumption reduces T&D infrastructure needs. Certain Heritage
Project opportunities have a disproportionate impact on T&D, so it is necessary to treat
them as a separate component of resource value.

The most recent estimate (2003) of avoided transmission and distribution capacity is
$81 per kilowatt, based on the Edison Electric Institute methodology for calculating
distribution transformer specifications. Costs have escalated by 30% since 2003, which
increases the 2006 value of avoided T&D capacity to $105 per kW. There is an ongoing
discussion regarding significant escalations to this value based upon recent T&D costs
and future expectations and, therefore, the estimate of $105/kW is viewed as a low,
conservative estimate of value for analytical study purposes. The avoided T&D cost will
be modified based upon the outcome of this ongoing evaluation.

7. Application of Generation and Transmission and Distribution Capacity
Avista is using values of $300/kW for generation capacity and $105/kW for transmission and
distribution (T&D) capacity in its analytics. These values are installed cost values. In order to
utilize these values for demand initiative evaluation the installed costs are amortized over the
Total Installed Cost of Simple Cycle Combustion Turbine $54,000,000
Turbine Capacity 120 MW
Installed Cost of Simple Cycle Combustion Turbine $450 /kW
Present Value of Revenue Requirement / Installed Cost 137%
Present Value of Total Installed Cost Revenue Requirement $73,980,000
Present Value of Net Energy Margin (Revenue - Fuel and O&M)$24,660,000
Present Value of Capacity Net of Energy Value $49,320,000
Initial Installed Cost of Capacity Net of Energy Value $36,000,000
Naked Capacity Cost Net of Energy Value $300 /kW
29

useful life of the demand initiative. This creates a stream of annual capacity values that can then
be applied to the capacity reduction contribution of the demand initiative.

For example, a demand initiative that removes load during peak hours will be credited with
capacity savings by multiplying the capacity reduction of the demand initiative by the annual
capacity value for the year (both generation and T&D). In addition, the demand initiative also
receives credit for its annual energy savings. Demand initiatives that do not provide any on-peak
capacity reduction will not receive the capacity credit and will only be credited with energy
savings.
Summary

The six components of resource value outlined above are summarized in Table 6.1

TABLE 6: Resource Value Component Summary
(All calculations assume a flat load)

Component
10-yr Energy
($/MWh)
20-yr Energy
($/MWh)
40-yr Energy
($/MWh)
Capacity5
($/kW) 1 1 1
2 2 2 2
3 3 3
4 4 4
6
TOTAL COST $66 $76 $90 $405

1 The flat load assumption is a simplification of a calculation that will be based
upon a full 8760-hour stream of avoided energy costs.
2 This fixed CO2 emissions cost adder will be applied until definitive legislative
impacts can be more accurately modeled and included in the avoided cost of
energy.
3 This adder reflects the difference between the expected value of the avoided cost
stream and the value of resources obtained to reduce exposure to high market
prices.
4 Based upon a 6.5% T&D loss assumption. In practice this will be applied to each
individual hour of the 8760-hour avoided energy cost stream.

1 These calculations are applicable to energy efficiency, load management, and transmission and distribution projects.

30

5 Capacity value is based upon the contributions of a resource to system-
coincident peak load reduction. Presently this is based upon a winter space
heating-driven system peak assumption.
6 This capacity value is applicable only to programs with virtually no energy but
significant capacity value.

Consistent with the company‘s 2007 IRP, these energy and capacity value estimates
will be used to evaluate Heritage Project opportunities, resulting in an optimal selection
of generation and non-generation resources. This optimal level includes a valuation of
the reduction in power supply cost as well as energy cost volatility.

These summary values make it possible to evaluate non-utility generation resources by
applying 8760-hour resource load shape and system-coincident peak contributions to
develop an estimate of total resource value. This price becomes the cost cap for
Heritage Project programs. By evaluating and sorting the collection of options, it is
possible to build a resource supply-curve and estimate the resources that can be cost-
effectively acquired.

31

Appendix D
2011 Evaluation, Measurement and Verification Plan

Avista‘s 2011 EM&V Plan developed in conjunction with the Triple E Board is provided as a
separate file. (Please note that this EM&V Plan continued to be developed after the date at
which the analysis for the remainder of this Business Plan had to be completed for purposes of
budget development. Thus, the EM&V expenditures defined within the EM&V Plan are
inconsistent with the budget shown in the Business Plan in some categories.)
32

Appendix E
Washington Initiative I-937 Conditions

Attached below are the conditions upon which Avista will be complying with Washington state
Initiative-937 for the 2010-2011 compliance period.

33

1 (2) Company Retains Responsibility. Nothing within this Order relieves Avista of the sole
responsibility for complying with RCW 19.285, which requires Avista to use
methodologies consistent with those used by the Pacific Northwest Electric Power and
Conservation Planning Council (―Council‖). Specifically, the Conditions regarding the
need for a high degree of transparency, and communication and consultation with
external stakeholders, diminish neither Avista‘s operational authority nor its ultimate
responsibility for meeting the biennial conservation target approved herein.

2 (3) Advisory Group.
(a) Avista must maintain and use an external conservation Advisory Group of
stakeholders to advise the Company on the topics described in subsections (i)
through (x) below. To meet this condition, Avista may continue to use its
External Energy Efficiency Board created under Docket UE-981126, and its
Integrated Resource Planning Technical Advisory Committee created under WAC
480-100-238.
(i) Development and modification of protocols to evaluate, measure, and
verify energy savings in Avista‘s programs.
(ii) Development of conservation potential assessments under RCW
19.285.040(1)(a) and WAC 480-109-010(1).
(iii) Guidance to Avista regarding methodology inputs and calculations for
updating cost-effectiveness.
(iv) Review of data sources and values used to update supply curves.
(v) Consideration of the need for tariff modifications or mid-course program
corrections.
(vi) Review appropriate level of and planning for:
(1) Marketing conservation programs.
(2) Incentives to customers for measures and services.
(vii) Consideration of issues related to conservation programs for customers
with limited income.
(viii) Comparing program achievement results with annual and biennial targets.
(ix) Review of conservation program budgets and actual expenditures
compared to budgets.
(b) Meetings should occur quarterly at a minimum. Avista must permit any member
to request an additional meeting of the Advisory Group with reasonable notice.

3 (4) Annual Budgets and Energy Savings.
(a) Avista must submit annual budgets to the Advisory Group and to the Commission
no later than November 1 of each year. The submissions must include reasonable
program detail that shows planned expenses and the resulting projecting energy
34

savings. In odd-numbered years, the annual budget may be submitted as part of
the Biennial Conservation Plan required under Paragraph 8(f) below. In even-
numbered years, the annual budget may be submitted as part of the Business Plan
required under Paragraph 8(b) below.
(b) Avista must provide its proposed budget in a detailed format with a summary
page indicating the proposed budget and savings levels for each electric
conservation program, and subsequent supporting spreadsheets providing further
detail for each program and line item shown in the summary sheet.

4 (5) Program Details. Avista must maintain its conservation tariffs, with program
descriptions, on file with the Commission. Program details about specific measures,
incentives, and eligibility requirements must be filed as tariff attachments or as revisions
to the Company‘s Business Plan. Avista may propose other methods for managing its
program details in the Biennial Conservation Plan required under Paragraph 8(f) below,
after consultation with the Advisory Group as provided in Paragraph 9(b) below.

5 (6) Approved Strategies for Selecting and Evaluating Energy Conservation Savings.
(a) Avista has identified a number of potential conservation measures as qualifying
measures in its Revised Report filed on April 16, 2010 in this Docket. The
Commission is not obligated to accept savings identified in the Revised Report for
purposes of compliance with RCW 19.285. Avista must demonstrate the
prudence and cost-effectiveness of its conservation programs to the Commission
after the savings are achieved. See RCW 19.285.040(1)(d).
(b) Avista must use the Council‘s Regional Technical Forum‘s (―RTF‘s‖) ―deemed‖
savings for electricity measures. As of the date of this Order, the RTF maintains a
Web site at http://www.nwcouncil.org/energy/rtf/.
(c) If Avista utilizes savings amounts for prescriptive programs that have not been
established by the RTF, such estimates must be based on a rigorous impact
evaluation that has verified savings levels, and be presented to the Advisory
Group for comment.
(d) When Avista proposes a new program, it must present it to the Advisory Group
for comment with program details fully defined. After consultation with the
Advisory Group in accordance with Paragraph 3 above, Avista must file a
revision to its Business Plan in this Docket. The revision may be acknowledged
by placement on the Commission‘s No Action Open Meeting agenda.
(e) Avista must provide opportunities for the Advisory Group to review and assist
with the development of evaluation, measurement and verification protocols for
conservation programs. See Paragraph 3(a)(i) above.
35

(f) Avista must spend between three (3) and six (6) percent of its conservation budget
on evaluation, measurement, and verification (EM&V), including a reasonable
proportion on independent, third-party EM&V. Avista must perform EM&V
annually on a multi-year schedule of selected programs such that, over the EM&V
cycle, all major programs are covered. The EM&V function includes impact,
process, market and cost test analyses. The results must verify the level at which
claimed energy savings have occurred, evaluate the existing internal review
processes, and suggest improvements to the program and ongoing EM&V
processes. An annual independent, third-party EM&V report involving analysis
of both program impacts and process impacts must be part of the Annual Report
on Conservation Acquisition described in Paragraph 8(g) below. Avista may
modify this spending band with Commission approval following full Advisory
Group consultation.

6 (7) Program Design Principles
(a) All Sectors Included — Avista must offer a mix of tariff-based programs that
ensure it is serving each customer sector, including programs targeted to the
limited-income subset of residential customers. Modifications to the programs
must be filed with the Commission as revisions to tariffs or as revisions to
Avista‘s Business Plan, as appropriate.
(b) Outreach on Programs — Avista must establish a strategy and proposed
implementation budget for informing participants about program opportunities in
the relevant and strategic market channels for each of its energy efficiency
programs. Avista must share these strategies and budgets with the Advisory
Group for review and comments, and provide updates at Advisory Group
meetings.
(c) Incentives and Conservation Program Implementation — Avista must offer a
cost-effective portfolio of programs in order to achieve all available conservation
that is cost-effective, reliable, and feasible. Programs and incentives may be
directed to consumers, retailers, designers, installers, wholesalers, etc., as
appropriate for measures that save energy. Incentive levels and other methods of
encouraging energy conservation need to be periodically examined to assure that
they are neither too high, nor too low. Incentive levels should not unnecessarily
limit the acquisition of all achievable energy conservation.
(d) Conservation Efforts without Approved EM&V Protocol — Avista may spend up
to ten (10) percent of its conservation budget on programs whose savings impact
has not yet been measured, as long as the overall portfolio of conservation passes
the Total Resource Cost (TRC) test as modified by the Council. These programs
may include educational, behavior change, and pilot projects. Modifications to
36

this spending limit must be made with Commission approval following full
Advisory Group consultation. As of the date of this Order, an outline of the major
elements of the Council‘s methodology for determining achievable conservation
potential, including the Total Resource Cost test, is available on the Council‘s
Web site at
http://www.nwcouncil.org/energy/powerplan/6/supplycurves/I937/CouncilMetho
dology_outline%20_2_.pdf.

7 (8) Required Reports and Filings
(a) File Six-Month Report on Conservation Acquisition, comparing budgeted to
actual kWh‘s and expenditures, by August 15, 2010.
(b) File 2011 Business Plan, containing any changes to program details and an annual
budget by November 1, 2010.
(c) File 2010 Annual Report on Conservation Acquisition, including an evaluation of
cost effectiveness and comparing budgets to actual, by March 31, 2011.
(d) File revisions to cost recovery tariff by May 1, 2011, with requested effective date
of July 1, 2011.
(e) File Six-Month Report on Conservation Acquisition, comparing budget to actual
kWh‘s and dollar activity, by August 15, 2011.
(f) File Biennial Conservation Plan including revised program details and program
tariffs, together with identification of 2012-2021 achievable conservation
potential, by November 1, 2011, requesting effective date of January 1, 2012.
This filing will satisfy the requirement in WAC 480-109-010 to file 10-year
Achievable Conservation Potential and Biennial Conservation Target on or before
January 31.
(g) File 2011 Annual Report on Conservation Acquisition, including an evaluation of
cost-effectiveness, by March 31, 2012.
(h) File two-year report on conservation program achievement by June 1, 2012. This
filing is the one required in WAC 480-109-040(1) and RCW 19.285.070, which
require that the report also be filed with the Washington Department of
Commerce.

8 (9) Required Public Involvement in Preparation for 2012-2013 Biennium
(a) By July 1, 2011, consult with the Advisory Group to facilitate completion of a 10-
year conservation potential analysis by November 1, 2011. See RCW
19.285.040(1)(a); WAC 480-109-010(1). This must be based on a current
conservation potential assessment study of Avista‘s service area within
Washington State. This may be conducted within the context of Avista‘s
integrated resource plan. If Avista chooses to use the supply curves that make up
37

the conservation potential in the Council‘s Northwest Power Plan, the supply
curves must be updated for new assumptions and measures.
(b) Consult with the Advisory Group between July and October 2011 to identify
achievable conservation potential for 2012-2021 and set annual and biennial
targets for the 2012-2013 biennium, including necessary revisions to program
details. See RCW 19.285.040(1)(b); WAC 480-109-010(2) and (3).
(c) Review with the Advisory Group whether standard-efficiency fuel conversion
savings should be included in the 2012-2013 Biennial Conservation Target.

9 (10) Cost Effectiveness Test is the Total Resource Cost Test
(a) The primary cost effectiveness test must be the Total Resource Cost (TRC) test as
modified by the Council. The Council-modified calculation of TRC includes
quantifiable non-energy benefits and a 10 percent conservation benefit adder that
increases the avoided costs by 10 percent. The Council does not include a net-to-
gross adjustment. As of the date of this Order, an outline of the major elements of
the Council‘s methodology for determining achievable conservation potential,
including the Total Resource Cost test, is available on the Council‘s Web site at
http://www.nwcouncil.org/energy/powerplan/6/supplycurves/I937/CouncilMetho
dology_outline%20_2_.pdf.
(b) In addition to the Council-modified TRC, Avista must provide calculations of the
Program Administrator Cost test (also called the Utility Cost test), Ratepayer
Impact Measure test, and Participant Cost test described in the National Action
Plan for Energy Efficiency‘s study ―Understanding Cost-effectiveness of Energy
Efficiency Programs.‖ As of the date of this Order, the study is available on the
Web site of the United States Environmental Protection Agency at
http://www.epa.gov/cleanenergy/documents/cost-effectiveness.pdf.
(c) Overall conservation cost-effectiveness must be evaluated at the portfolio level.
Costs included in the portfolio level analysis include conservation-related
administrative costs. Avista must continue to evaluate measure and program level
cost tests.

10 (11) Recovery Through an Electric Tariff Rider
(a) Annual Filing — Avista must file an annual tariff rider in May of the current year
to recover the future year‘s budgeted expenses and any significant variances
between budgeted and actual income and expenditures during the previous year.
(b) Scope of Expenditures — Funds collected through the rider must be used on
approved conservation programs and their administrative costs.
(c) Recovery for Each Customer Class — rate spread and rate design must match
Avista‘s underlying base volumetric rates.
38

Appendix F
Idaho IPUC Staff Memorandum Of Understanding

Attached below is the Memorandum of Understanding (MOU) that the Idaho Public Utilities
Commission Staff and Avista entered into for purposes of clarifying the expectations of the
Company‘s Demand-Side Management activities, evaluation, measurement and verification and
reporting.

39

40

41

42

43

44

45

46

47

48

Appendix G
Individual Program Plan Summaries

Avista‘s program managers complete a written program plan as part of the business planning
process. This document is purely a working document designed to force a comprehensive
reconsideration of all elements of program implementation efforts and to provide a document to
improve the management of the program implementation process. Attached within this
appendix is a summary of those program plans that were completed as part of this analysis.
Revisions to the program plans continued after the date that the analysis for the business
planning was completed, thus there may not be a perfect match between the most recent
program plans and the assumptions adopted for the development of the 2011 budget.

Originally it was anticipated that the impact evaluation portion of the EM&V plan would be
initiated by identifying the critical assumptions leading towards an energy savings claim for each
program and measure. After the work leading to the program plans was initiated the direction of
the EM&V plan (attached as Appendix D) changed directions to a higher level document that is
more reliant upon independent external auditors. Consequently the EM&V portions of these
program plans have been deleted except for the portion where the program manager identifies
what critical aspects of the program are to be tracked. The identification of these raw data
sources should assist future internal and external EM&V work.

Avista does tentatively plan on engaging in a flowcharting exercise to clarify and document the
assumptions going into the energy savings claims made through these measures and
programs. That process will be useful in initiating a new EM&V analyst into the process as well
as in providing a summary of the background for external auditors.

The cost-effectiveness of the programs for 2011 has been estimated, including sensitivities to
net-to-gross ratios and with and without the use of tax credits as customer cost offsets. All of
the calculations represented in the table below are without the use of the traditional 10%
conservation preference.

Program managers continued to work to improve program throughput and cost-effectiveness
after the date at which their written program plans were due for incorporation into this document.
This additional effort was especially focused on programs with substandard cost-effectiveness.

Significant additional attention is in progress in regards to the measures which will be
incorporated into the ―no prior approval required‖ measure list for installation under Avista‘s
2011 low-income contracts. It is possible that additional revisions will be made to the cost-
effectiveness calculations, acquisition and status of the measures based upon the results of the
in-progress Ecotope impact evaluation of low-income DSM.

Following is a list of the program plans that were prepared as part of the business planning
process as well as a table outlining the cost-effectiveness of the programs as defined for cost-
effectiveness and acquisition purposes. Occasional disconnects in the definition and naming of
49

these programs are the result of the ongoing process that was occurring while the business plan
document was being finalized.

Program Plans (in order of their appearance within this appendix):

Non-Residential
Site-Specific Program
HVAC Variable Frequency Drive Program
Prescriptive Lighting Program
EnergySmart Program
Green Motors Rewind Program
Power Management for PC Networks
Prescriptive Commercial Clothes Washer Program
Demand Controlled Ventilation Program
Prescriptive Electric to Natural Gas Water Heater Conversion Program
Prescriptive Food Service Equipment Program
Prescriptive Commercial HVAC Program
Prescriptive LED Traffic Signal Program
Prescriptive LEED Program
Prescriptive Premium Efficiency Motors Program
Prescriptive Refrigerated Warehouse Program
Prescriptive Retro-Commissioning Program
Prescriptive Commercial Shell Program
Prescriptive Side Stream Filtration Program
Prescriptive Vending Machine Controller Program
Non-Residential HVAC Rooftop Maintenance Pilot Program

Residential
Energy Star Appliance Rebate Program
Second Refrigerator or Freezer Recycling Program
Residential Lighting Programs
Energy Conservation in Schools, Dollars for Change, CFL recycling programs
Events Program (also known as Geographic Saturation)
Home Energy Audit Pilot Program

Low-Income
Low-Income Shell (Weatherization)
Low-Income Energy Star Appliance
Low-Income Fuel Conversion
Low-Income Hot Water Heater Efficiency
Low-Income HVAC Efficiency

50

Combined fuel TRC B/C's with tax credits Combined fuel TRC B/C's without tax credits
100% 75% 50% 25% 100% 75% 50% 25%
Program Portfolio NTG sub-TRC NTG sub-TRC NTG sub-TRC NTG sub-TRC NTG sub-TRC NTG sub-TRC NTG sub-TRC NTG sub-TRC
Demand Controlled Ventilation Non-Residential

1.19

1.19

1.18

1.18

1.19

1.19

1.18 1.18
Energy Smart Grocer Program Non-Residential 1.93 1.76 1.49 1.03 1.93 1.76 1.49 1.03
Green Motors (rewind) Non-Residential

1.97

1.83

1.60

1.16 1.97

1.83

1.60 1.16
Nonres rooftop maintenance1 Non-Residential
Nonres traffic lights Non-Residential

19.38

19.33

19.23

18.95 19.38

19.33

19.23 18.95
Nonres vending machines Non-Residential 2.13 2.12 2.11 2.09 2.13 2.12 2.11 2.09
Prescriptive food service Non-Residential 2.29 2.28 2.27 2.23 2.29 2.28 2.27 2.23
Prescriptive network computers Non-Residential 2.35 2.35 2.34 2.31 2.35 2.35 2.34 2.31
Prescriptive new equipment upgrades2 Non-Residential
Prescrptive Non-res clotheswashers Non-Residential 6.01 6.01 6.00 5.98 6.01 6.01 6.00 5.98
Prescriptive Nonres lighting Non-Residential 1.04 1.04 1.04 1.04 1.04 1.04 1.04 1.04
Prescriptive retrofit equipment upgrades Non-Residential 1.13 1.13 1.12 1.12 1.13 1.13 1.12 1.12
Prescriptive VFDs Non-Residential 3.65 3.64 3.62 3.55 3.65 3.64 3.62 3.55
Premium Efficiency Motors Non-Residential 0.75 0.75 0.75 0.75 0.75 0.75 0.75 0.75
Resource Conservation Manager Non-Residential 2.36 1.77 1.18 0.59 2.36 1.77 1.18 0.59
Side Stream Filtration Non-Residential 0.85 0.85 0.85 0.85 0.85 0.85 0.85 0.85
Steam Trap Replacement Non-Residential 2.03 2.02 2.02 2.00 2.03 2.02 2.02 2.00
Small Commercial HVAC Non-Residential 2.38 2.37 2.36 2.33 2.38 2.37 2.36 2.33
Commercial Shell Non-Residential 1.52 1.52 1.51 1.50 1.52 1.52 1.51 1.50
LEED3 Non-Residential
Electric to NG Water Heater Conversion Residential 5.52 5.52 5.52 5.52 5.52 5.52 5.52 5.52
Energy Conservation Schools Program Residential 6.19 6.19 6.19 6.19 6.19 6.19 6.19 6.19
Geographic saturation Residential 6.19 6.19 6.19 6.19 6.19 6.19 6.19 6.19
Multifamily Residential 3.77 3.77 3.77 3.77 3.77 3.77 3.77 3.77
Res appliances Residential 1.19 1.17 1.15 1.06 0.57 0.57 0.56 0.54
Res Energy Star Home Residential 1.84 1.79 1.70 1.47 1.48 1.45 1.39 1.23
Res fuel conversion Residential 1.28 1.25 1.21 1.09 1.28 1.25 1.21 1.09
Res HVAC efficiency Residential 1.25 1.23 1.20 1.11 1.18 1.16 1.13 1.05
Res lighting Residential 4.03 3.78 3.36 2.52 4.03 3.78 3.36 2.52
Res refrig recycling Residential 1.13 0.85 0.57 0.28 1.13 0.85 0.57 0.28
Res shell Residential 1.22 1.20 1.17 1.08 0.97 0.95 0.93 0.88
Res water heating efficiency Residential 1.85 1.77 1.64 1.34 1.85 1.77 1.64 1.34
Trees Residential 0.87 0.87 0.87 0.87 0.87 0.87 0.87 0.87
Res outsourced programs4 Residential
Home Energy Audit Residential 1.12 1.01 0.85 0.58 0.74 0.69 0.61 0.45
LI appliances Low Income 0.67 0.64 0.59 0.48 0.67 0.64 0.59 0.48
LI fuel conversion Low Income 1.41 1.35 1.25 1.02 1.41 1.35 1.25 1.02
LI HVAC efficiency Low Income

0.19

0.19

0.17

0.14 0.19

0.19

0.17 0.14
LI shell Low Income 0.68 0.65 0.60 0.49 0.68 0.65 0.60 0.49
LI water heating efficiency Low Income 0.05 0.05 0.05 0.04 0.05 0.05 0.05 0.04
LI H&HS5 Low Income
Solar6 Renewable
Wind7 Renewable
Prescriptive program total
1.35 1.32 1.26 1.11 1.20 1.18 1.13 1.01
Demand Response8 Demand Response - - - - - - - -
Site-Specific Non-Residential 2.55 2.53 2.47 2.32 2.55 2.53 2.47 2.32

Pgm aggregate (w/o labor and non-program NL/NI 1.68 1.64 1.58 1.42 1.54 1.51 1.46 1.32
51

Footnotes:
1. The rooftop HVAC maintenance program was a pilot program only in 2010. As of the
close of October 2010 it was not sufficiently developed to allow for a program to be
incorporated within the 2011 Business Plan. However this program is one that has been
identified as a prospective cost-effective program with natural gas savings, when
launched in conjunction with a programmable thermostat program.
2. Estimates of the potential throughput of this program were not available at the time that
the cost-effectiveness calculations were completed. The program is under continuing re-
development .
3. The LEED program was developed to encourage and incentivize customers to pursue
LEED certification within non-residential structures. The savings attributable to the
improvements to meet LEED standards are incorporated within other non-residential and
site-specific programs. Thus the LEED program itself has only costs and no benefits.
The cost-effectiveness of this program lies in the additional throughput attributed to other
programs. The program was not incorporated into other ‗infrastructure‘ programs since
the expenditures under the program are direct customer incentives.
4. During 2010 there was discussion of the launch of additional short-term outsourced
programs, similar to Avista‘s UCONS program for the direct-installation of efficiency
devices in multifamily homes. That discussion was not mature enough to develop
program inputs for the 2011 Business Plan, but the potential for developing such a
program remains a significant possibility for 2011.
5. The health and human safety (H&HS) measures provided through the low-income
portfolio do not generate energy savings. They are assumed to have non-energy
benefits equivalent to their cost based upon the presumption that the funds are being
effectively expended by the community action agencies.
6. Avista‘s Schedule 90 tariff includes selected customer-owned distributed renewable
generation within the scope of the incentives provided for through the tariff, including
solar generation. With the Company‘s proposed revision to the tariff language that
would exclude incentives for measures with energy simple paybacks in excess of 13
years, it is not believed that any solar projects will be funded in 2011 given this tariff
revision.
7. Avista‘s Schedule 90 tariff includes selected customer-owned distributed renewable
generation within the scope of the incentives provided for through the tariff, including
wind generation. With the Company‘s proposed revision to the tariff language that would
exclude incentives for measures with energy simple paybacks in excess of 13 years, it is
not believed that any wind projects will be funded in 2011 given this tariff revision.
8. Avista‘s current demand response effort is associated with the SmartGrid pilot currently
underway in Pullman. As of the time that the 2011 Business Plan was completed it was
expected that 2011 would be an installation and baseline study period for the pilot.
Avista‘s DSM portfolio was not anticipated to incur any expenses or receive any benefits
from the program during the year.
52

Site Specific Program
Commercial Sector

Key Individuals and Responsibilities:
Renee Coelho and Greta Zink are designated as the current Program Managers as well as
serving as primary contact for internal and external inquiries. The program is implemented by 8
Account Executives, 7 Engineering Staff, a program coordinator and 2 program managers.
Tom Lienhard and Mike Dillon are the primary technical resources for the program.
Target Market(s):
This is applicable to any commercial, industrial or pumping customer who, receive firm electric
or natural gas service from Avista and would like to consider making cost effective, energy
efficiency improvements to their business. Key external stakeholders include business owners,
building owners, property management companies, tenants and trade allies. Key internal
stakeholders include Account Executives, contract services, accounts payable, marketing and
corporate communications.

Program Overview:
The site specific program is a major component in our commercial/industrial portfolio.
Customers receive technical assistance and incentives in accordance with Schedules 90/190. Our
program approach is to review most energy efficiency projects that have demonstrable kilowatt
hour and/or therm savings. The majority of site specific kWh and therm savings are comprised of
appliances, compressed air, HVAC, industrial process, motors, shell, and custom lighting
projects that do not qualify for the prescriptive lighting program. It is estimated that customers
who participate in the 2010 site specific program will realize energy savings of over 27 million
kWh and 907,000 therms. The site specific program brings in the largest portion of savings to the
overall energy efficiency portfolio.

53

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings
–
–
–
–

The above is non-audited 2010 results based on YTD results through September 2010. Rebate
throughput is 30% higher compared to the same timeframe for 2009. In addition to extensive
marketing efforts, federal tax credits are believed to have contributed significantly to increased
throughput.

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
Lighting – Interior
Lighting – Exterior
HVAC – Heating
HVAC – Cooling
Industrial Process
Compressed Air
Shell
Appliances
HVAC Combined
Motors Industrial
Motors
Total

54

The estimates of unit throughput for 2011 are significantly lower than 2010 due to the expiration
of federal tax credits. It is expected that a high percentage of older units were replaced during
the 2009 and 2010 time period in order to take advantage of these tax credits. This incentive to
replace older equipment before burnout advanced many of these replacements that would have
otherwise occurred in 2011 and the few years thereafter.
Market Segment Overview:

There are is some code activity in Washington, mainly affecting new construction but we may
need to evaluate changes in case they influence this market in the foreseeable future.

There are no technology or infrastructure changes that are likely to influence the premium that
would be paid for high-efficiency appliances incentivized under this program in the near future.

The federal tax credits are scheduled to expire at the end of 2010, this could have an effect on
throughput and potentially lower the average high-efficiency unit that is installed on equipment
such as natural gas furnaces. For example, currently we have a significant number of units that
meet our 90% AFUE requirement as well as the federal 95% AFUE requirement.

Implementation Plan:
The Site Specific program is an integral part of the DSM savings acquisition. References to the
program are communicated daily by Avista Account Executives, bi-monthly through the Energy
Solutions Questline newsletter and on Efficiency Avenue located in the Business section of
everylittlebit.com. Any program changes would have advance notice for customers in the form
of a minimum of 90 days to submit under old requirements. This usually includes at a minimum
direct mail communication to trade allies and current customer participants as well as internal,
forms and website updates.

Data Collected to Support Future EM&V:

Data collected in anticipation of future internal and external EM&V needs include individual
data on the cost, size, and installation date of each energy efficiency equipment or measure
installed. In 2011, in response to external audit feedback, square footage and age of the home
where the energy efficiency measure was completed will be included in the customer rebate
form. While measures may be paid to a landlord at a different location, measures will be tracked
by service address where the work was completed.

For process evaluation data results will be collected monthly to show throughput of number of
measures installed, incentives paid, kWh and therm savings claimed and incremental non-
incentive costs. A monthly narrative will be included with the above results to summarize
changes under evaluation and/or changes implemented to program processes, rebate amounts,
savings claims, etc.

55

HVAC Variable Frequency Drive
Commercial Sector

Key Individuals and Responsibilities:
Renee Coelho is designated as the current Program Manager. This is likely to shift during CY
2011 due to recent organizational changes.
Mike Dillon is the primary technical resource for the program.
Target Market(s):

Large office buildings, school districts, universities, hospitals, manufacturing and production
facilities with mid-size commercial HVAC fans and pumps are the target customers.
Installations under this program include: supply and/or return fans, building exhaust fans, boiler
feed water pump, cooling tower, chilled water pump and condensing water pump. A total of 3
types of variable frequency drives are offered a rebate through this prescriptive method of
program delivery: VFD for Fans; VFD for Cooling Pump Only; or VFD for Heating Pump or a
Combined Heating and Cooling Pump.
Key external stakeholders include business owners, facilities managers, property managers and
trade allies. Key internal stakeholders include Account Executives, Marketing, and Accounts
Payable.

Program Overview:

The Commercial HVAC Variable Frequency Drive (VFD) Program serves the customer who
would benefit from a variable frequency drive on their heating and cooling equipment. The
program was originally conceived in 1995 to offer commercial customers a ―prescriptive‖ way to
participate in DSM by installing a device that would be a benefit in most large commercial
HVAC applications. An outside consulting firm was hired to analyze and develop the savings
and initial incentives. These parameters are evaluated periodically or as changes are made to
codes, DSM incentive levels or other issues. VFD‘s are a gray area in the construction industry.
In some cases they are required while in others they are one of many efficiency choices a
customer can make. Customers usually install VFD‘s in a retrofit situation but we are seeing
more of them being installed as part of a new construction scope of work. This program allows
multiple VFD‘s to be submitted for a rebate at one time and often the customer will install
anywhere from 2 – 10 VFD‘s on their HVAC equipment system with average sizing from 2hp to
100 hp. The incentive that is paid for each VFD is based on the horsepower installed and varies
based on the type of HVAC application (i.e. fan or pump).

56

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

The above numbers are based on YTD results through September 2010. Information about each
measure: Fans = 923.5 hp installed at $80/hp; 16 units under 10 hp; avg hp installed 27;
Cooling pump = 410 hp installed at $85/hp; 9 units installed at 20 hp or less; avg hp installed 29;
Heating pump = 26 hp installed at $85/hp; all units are 5hp or less; avg hp installed is 4.

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
VFD Fan 30 80 1022 0
VFD Cooling Pump only 15 85 1091
VFD Heating Pump only 5 85 1756
VFD Combined Heating and
Cooling Pump
2 100 1756
Total 52

The estimates of unit throughput for 2011 are about the same each year; approximately 20 or so
customers installing approximately 50 units.
Market Segment Overview:

There are is current code activity in Washington in 2010 that may affect new construction.

Implementation Plan:
This program is familiar to property managers, building owners and equipment vendors and
Energy Services Companies for schools, hospitals and large office buildings. An Avista Account
Executive can also deliver this program to a customer in these applications who may not be
57

working with a dedicated vendor. No prior contact is necessary prior to the installation of the
equipment.
Updates for any changes to program requirements are provided through direct mailing, via the
Energy Solutions Questline newsletter and on the everylittlebit.com website.

Data Collected to Support Future EM&V:
All variable frequency drives are inspected prior to payment being issued. With the payment
based on the size of horsepower installed – ensures that the appropriate amount is distributed.
Future EM & V efforts for this program will be determined in the future after the hiring of a new
EM & V Specialist. For process evaluation data results will be collected monthly to show
throughput of number of measures installed, incentives paid, kWh and therm savings claimed
and incremental non-incentive costs. A monthly narrative will be included with the above results
to summarize changes under evaluation and/or changes implemented to program processes,
rebate amounts, savings claims, etc.

58

Prescriptive Lighting
Commercial/Industrial Sector

Key Individuals and Responsibilities:
Leona Doege is designated as the current Program Manager. This is likely to shift in Q4 2010 or
CY 2011 due to Leona‘s temporary Smart Grid Demonstration Project (SGDP) duties. The
program coordinator is Sandra Hoye who works with the processing team of contract employees
and students to perform data entry duties for this program.
Tom Lienhard is the primary technical resource for the program.
Target Market(s):

This is applicable to existing commercial or industrial facilities with electric service provided by
Avista with rate schedules 11 or above.

Program Overview:

This program is intended to prompt the customer to increase the energy efficiency of their
lighting equipment through direct financial incentives. It indirectly supports the infrastructure
and inventory necessary to ensure that the installation of high-efficiency equipment is a viable
option for the customer.

There is significant opportunity for lighting improvements in commercial facilities. Avista has
been offering site specific incentives for qualified lighting projects for many years. In an effort
to streamline the process and make it easier for customers and vendors to participate in the
program we developed a prescriptive approach, which began in 2004. This program provides for
many common retrofits to receive a pre-determined incentive amount. Incentive amounts were
calculated using a baseline average for existing wattages and replacement wattages. Energy
savings claimed are calculated based on actual customer run times using the averages as
calculated for incentive amounts.
The prescriptive lighting program makes it easier for customers, especially smaller customers
and vendors to participate in the program. We have seen a substantial increase in the number of
projects that have been completed since this approach was instituted.
A total of 38 individual measures are included in the Prescriptive Lighting Program. These
include T12, HID and incandescent retrofits to more energy efficient light sources including, T8,
T5, induction, LED, cold cathode and compact fluorescent lamps.

59

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings
2-Lamp T12 U-Lamp to 2-Lamp F17T8 214
4-Lamp T12 to 4-Lamp T8 (4-Foot) 2364
4-Lamp T12 to 3-Lamp T8 (4-Foot) 5859
4-Lamp T12 to 2-Lamp T8 (4-Foot) 1232
3-Lamp T12 to 3-Lamp T8 (4-Foot) 774
3-Lamp T12 to 2-Lamp T8 (4-Foot) 216
2-Lamp T12 to 2-Lamp T8 (4-Foot) 3703
2-Lamp T12 to 1-Lamp T8 (4-Foot) 58
1-Lamp T12 to 1-lamp T8 (4-Foot) 486
4-Lamp T12 Fixture to 4-Lamp T8
Fixture/Retrofit: (8)4 foot or (4)8 foot
lamps
2504
2-Lamp T12 Fixture to 2-Lamp T8
Fixture/Retrofit: (4)4 foot or (2)8 foot
lamps
1891
2-Lamp T12 Fixture to 2-Lamp T5
High-Output 0
2-Lamp T12 HO or VHO Fixture to 2-
Lamp T8 High-Output Fixture/Retrofit 139
2-Lamp T12 HO or VHO Fixture to 4-
Lamp T5 High-Output Fixture 432
2-Lamp T12 HO or VHO Fixture to 2-
Lamp T5 High-Output 5-foot Fixture
1-Lamp T12 Fixture to 1-Lamp T8
Fixture/Retrofit: (2)4 foot or (1)8 foot
lamps
1-Lamp T12 Fixture to 1-Lamp T5
Fixture High-Output Fixture
250 watt HID Fixture to 4-Lamp T8
FixtureHO or 2-Lamp T5HO 5-foot
Fixture
400 watt HID Fixture to 4-Lamp T5
High-Output Fixture 1763
400 watt HID Fixture to 6-Lamp T5
High-Output Fixture 640
400 watt HID Fixture to 6-Lamp T8
Fixture (4-Foot Lamps)
818
400 watt HID Fixture to 8-Lamp T8
Fixture (4-Foot Lamps) 59
400 watt HID Fixture to 200 Watt
Induction Fluorescent Fixture 59
1000 watt HID Fixture to (2 fixtures) 6-Lamp T-5 High-Output 206
1000 watt HID Fixture to 400 Watt
Induction Fluorescent Fixture
100 watt or less Incandescent to
Compact Fluorescent Lamp (30 watt or
Less)
3823
Over 100 Watt to 200 watt
Incandescent to Compact Fluorescent
Lamp or Fixture (40-55 watt)
Over 200 watt Incandescent to
Compact Fluorescent Lamp or Fixture 115
60

(55-65 watt)
60 watt or greater Incandescent to
Dimmable Compact Fluorescent or
Cold Cathode**
593
100 watt or greater incandescent flood
to Ceramic Metal Halide (25 watt) 189
150 watt or greater incandescent to
New Linear T8 Fluorescent Fixture 68
90 watt or greater incandescent to 15
watt or less LED
120 watt or greater incandescent to 20
watt or less LED
20-30 watt Incandescent to LED or
Low-Wattage Equivalent
20-60 watt Incandescent to Cold
Cathode
Incandescent Exit Sign to New LED
Exit Signs 263
Manual Light Switch to Occupancy sensor controlled wall switch 113
Fixture with no Occupancy Sensor to
Built in Occupancy Sensor in fixture

The above estimates 2010 results based on YTD results through September 2010.

Incentive levels are based on 2010 incentive levels that went into effect May 1st, 2010. Some
measures were paid on old incentive levels through July 31st, 2010 as we offer a 90 day overlap
between forms to allow for customers to finish projects that were begun with the old form
incentive levels.

kWh savings are based upon our baseline averages not from actual customer savings as those
items were tracked on a project basis rather than an individual measure basis. Savings are in line
with 2010 budget estimates.

Due to the reduction in many of the incentive levels that took place May 1st, 2010 (expected to
decrease throughput), and the new lamp legislation that will ban most T12 lamps (expected to
increase throughput), which may have the effect of balancing one another, savings are expected
to remain the same for 2011.

Budget and Savings:

Measure

Units

Incentive
$

kWh
Non-
incentive $
(NEB)
2-Lamp T12 U-Lamp to 2-Lamp F17T8 Unk 15 96.72 3.00
4-Lamp T12 to 4-Lamp T8 (4-Foot) Unk 50 156 2.00
4-Lamp T12 to 3-Lamp T8 (4-Foot) Unk 35 268.32 2.00
4-Lamp T12 to 2-Lamp T8 (4-Foot) Unk 30 308.88 4.00
3-Lamp T12 to 3-Lamp T8 (4-Foot) Unk 20 165.36 2.00
3-Lamp T12 to 2-Lamp T8 (4-Foot) Unk 25 205.92 3.00
2-Lamp T12 to 2-Lamp T8 (4-Foot) Unk 12 56.16 2.00
2-Lamp T12 to 1-Lamp T8 (4-Foot) Unk 15 156 2.00
61

1-Lamp T12 to 1-lamp T8 (4-Foot)
4-Lamp T12 Fixture to 4-Lamp T8
Fixture/Retrofit: (8)4 foot or (4)8 foot
lamps
2-Lamp T12 Fixture to 2-Lamp T8
Fixture/Retrofit: (4)4 foot or (2)8 foot
lamps
2-Lamp T12 Fixture to 2-Lamp T5 High-
Output
2-Lamp T12 HO or VHO Fixture to 2-
Lamp T8 High-Output Fixture/Retrofit
2-Lamp T12 HO or VHO Fixture to 4-
Lamp T5 High-Output Fixture
2-Lamp T12 HO or VHO Fixture to 2-
Lamp T5 High-Output 5-foot Fixture
1-Lamp T12 Fixture to 1-Lamp T8
Fixture/Retrofit: (2)4 foot or (1)8 foot
lamps
1-Lamp T12 Fixture to 1-Lamp T5
Fixture High-Output Fixture
250 watt HID Fixture to 4-Lamp T8 Fixture HO or 2-Lamp T5HO 5-foot
Fixture
400 watt HID Fixture to 4-Lamp T5
High-Output Fixture
400 watt HID Fixture to 6-Lamp T5
High-Output Fixture
400 watt HID Fixture to 6-Lamp T8
Fixture (4-Foot Lamps)
400 watt HID Fixture to 8-Lamp T8
Fixture (4-Foot Lamps)
400 watt HID Fixture to 200 Watt
Induction Fluorescent Fixture
1000 watt HID Fixture to (2 fixtures) 6-
Lamp T-5 High-Output
1000 watt HID Fixture to 400 Watt
Induction Fluorescent Fixture
100 watt or less Incandescent to
Compact Fluorescent Lamp (30 watt or
Less)
Over 100 Watt to 200 watt
Incandescent to Compact Fluorescent
Lamp or Fixture (40-55 watt)
Over 200 watt Incandescent to
Compact Fluorescent Lamp or Fixture
(55-65 watt)
60 watt or greater Incandescent to
Dimmable Compact Fluorescent or
Cold Cathode**
100 watt or greater incandescent flood
to Ceramic Metal Halide (25 watt)
150 watt or greater incandescent to
New Linear T8 Fluorescent Fixture
90 watt or greater incandescent to 15
watt or less LED
120 watt or greater incandescent to 20
watt or less LED
20-30 watt Incandescent to LED or
Low-Wattage Equivalent
20-60 watt Incandescent to Cold
Cathode
Incandescent Exit Sign to New LED Exit
Signs
Manual Light Switch to Occupancy
sensor controlled wall switch
Fixture with no Occupancy Sensor to
Built in Occupancy Sensor in fixture

62

Individual unit counts of the many measures incorporated into this program are too detailed to be
instructive for program management or planning. An overall estimate of program energy savings, 14.3
million first-year kWh‘s, is the appropriate metric to use for program planning and management purposes.
Individual counts of measures are tracked over the course of the program year for EM&V purposes.
63

Market Segment Overview:

2009 Department of Energy (DOE) Lamp Rulemaking will go into effect July 14th, 2012. At
which time, most T12 lamps can no longer be manufactured or imported in the United States.
Figure below, courtesy of NEMA.
64

65

Implementation Plan:

The key drivers to delivering on the objectives of this program are the direct-incentives to fuel
customer interest, marketing efforts to drive customers to the program and ongoing work with
trade allies to ensure that customer demand can be met.
The Prescriptive Lighting Program is an integral consideration in the ongoing everylittlebit.com
campaign, specifically Efficiency Avenue. The campaign builds broad awareness for energy
efficiency as well as specific programmatic highlights.
Key to success is clear communication to lighting supply houses, distributors, electricians and
customers on incentive requirements and forms. Utility websites are also channels to
communicate program requirements and highlight opportunities for customers. Avista‘s regional
based Account Executives (AEs) are a key part of delivering the Prescriptive Lighting Program
to commercial and industrial customers.
Any changes should have advance notice for customers in the form of 90 days to submit under
old requirements. This usually includes at a minimum direct mail communication to trade allies
as well as internal, forms and website updates.
______________________________________________________________________________
____________
Data Collected to Support Future EM&V:
Beginning January 1st, 2010, each measure within the program was monitored on its percentage
of throughput. We do see changes in throughput per measure from year to year. However,
monitoring throughput per measure will help direct our efforts for 2011 and 2012 program
planning and changes we expect to make according to code changes.

In addition, individual measure costs were tracked when feasible for CY 2010. We can compare
these average actual individual measure costs to our estimates in our savings calculator. Results
will be useful in determining appropriate material and labor costs for many measures on the
Program.

For process evaluation data results will be collected monthly to show throughput of individual
measures installed and incentives paid, kWh savings claimed and incremental non-incentive
costs on projects. A monthly narrative will be included with the above results to summarize
changes under evaluation and/or changes implemented to program processes, rebate amounts,
savings claims, etc.

66

EnergySmart Program
Commercial Sector

Key Individuals and Responsibilities:
Greta Zink is designated as the current Program Manager.
Mike Dillon is the primary technical resource for the program.
Target Market(s):
This is applicable to non-residential electric and natural gas customers
with refrigeration facilities.

Program Overview:
The EnergySmart Program was selected as the preferred bid through the
2006/2007 commercial refrigeration RFI/RFP process. The program was
launched in late 2007 and is facilitated by PECI.
A Field Energy Analyst with expertise in commercial refrigeration
provides customers with technical assistance and a comprehensive audit
producing a detailed energy savings report regarding potential savings
for their facility and is guided through the process from inception
through the payment of incentives for qualifying equipment.
Refrigeration often represents the primary electricity in a grocery store
or supermarket. Although the potential for savings is high, it is often
overlooked because of the technical aspect of the equipment. This
program provides a concentrated effort to assist customers through
technical aspects of their refrigeration systems while providing a clear
view of what savings can be achieved.
PECI utilizes a modeling program called Grocer Smart to determine
savings. PECI is handling the outreach effort through industry contacts,
cold calling and contractor relationships. The account executives are
also providing customer referrals with permission from the customers.
PECI has also contracted with BPA and PSE to provide this program so
overlapping customer with other electric utilities may also benefit.
Administrative fees are paid to PECI on a pay for performance of
$0.0801 per kWh and $0.6000 per therm.

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

67

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
EnergySmart Program 200 785,000 7,000,000 0 560,700
Total 200 793,101 7,000,000 0 570,855

The estimates of throughput for 2011 are based on projections from
PECI. The non-incentive dollars are budgeted dollars for PECI pay for
performance fees which are currently 0.0801 per kWh. The incentive
dollars are based on the annualized 2010 numbers times the 2011
estimated kWh. The total line is the numbers realized from making the
kWh fit into measures list.
Market Segment Overview:
There are no currently anticipated code changes that are likely to
influence this market within the foreseeable future.
There are no technology or infrastructure changes that are likely to
influence this program in the near future.
Implementation Plan:
The key drivers to delivering on the objectives of this program are the
direct-incentives to fuel customer interest and ongoing work with PECI.

Data Collected to Support Future EM&V
Data collected in anticipation of future internal and external EM&V
needs include data on the project cost, installation location and date,
measure installed and unit count, kWh and therm savings, savings
method, measure life, incentive per unit and total incentive paid.

68

Green Motors Rewind Program
Commercial Sector

Key Individuals and Responsibilities:
Greta Zink is designated as the current Program Manager.
Levi Westra is the primary technical resource for the program.
Target Market(s):
This is applicable to non-residential electric customers.

Program Overview:
This program is intended to organize, educate and promote member
motor service centers to commit to energy saving shop rewind practices,
continuous energy improvement and motor driven system efficiency.
This program is run in partnership with the Green Motors Practices
Group.
Avista joined this program in 2008 offering the program to electric
customers who participate in the green rewind program from 15 to 500
HP motors. The incentive paid is $2.00 per HP and .05 to Green Motors
for administrative costs per HP. Of the $2.00, $1.00 is an instant
discount to the customer and $1.00 goes to the motor service center
doing the rewind.

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
Green Motor Rewind 25 8,784 73,450 N/A 4,000
Total 9,010 75,893 3,794.65

69

The estimates of throughput for 2011 are expected to be similar to 2010.
The incentive dollars and kWh were extrapolated from the 2010
numbers and the non incentive dollars are for the administrative fees to
Green Motors Practices Group. Then during the actual business planning
process, the unit numbers were applied to various HP motors to come up
with the final numbers for the business plan which are reflected in the
total.
Market Segment Overview:
NEMA code changes are taking effect in December of 2010 and may
affect the throughput of this program.
There are no technology or infrastructure changes that are likely to
influence the premium that would be paid for green motor rewinds
incentivized under this program in the near future.

Implementation Plan:
The key drivers to delivering on the objectives of this program are the
direct-incentives to fuel customer interest, marketing efforts to drive
customers to the program and ongoing work with Green Motors
Practices Group and motor service centers.

Data Collected to Support Future EM&V
Data collected in anticipation of future internal and external
EM&V needs include motor HP, RPM, cost, savings per rewind
and location.

70

Power Management for PC Networks
Commercial Sector

Key Individuals and Responsibilities:
Greta Zink is designated as the current Program Manager.
Tom Lienhard is the primary technical resource for the program.
Target Market(s):
This is available to non-residential electric customers that install a network
based power management software solution.
Program Overview:
This program was developed to incent non-residential customers with
multiple personal computers (PCs) to install a network based power
management software solution. Even though PCs have the capability to
shift into a low-power operating state after a specified period of
inactivity, only a small fraction of those PCs actually do.
For companies that have numerous PCs, the wasted energy from
computers that remain in the full power state even when they are idle
can be significant. Software products that can simplify the process of
implementing power management in large numbers of networked PCs
are available.
This program offers a $10 incentive per controlled PC that meets our
eligibility criteria. Criteria includes: ability to provide regular energy
use reports, ability to control every available level of power management
offered by the PC, ability to reset user over-ride capabilities, a minimum
average savings of 120 annual kWh per PC, ability to provide usage data
prior to the controls being installed (baseline setting) and the software
must remain in operation for a minimum of 3 years.

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

Budget and Savings:

Non-
71

Measure

Units

Incentive
$

kWh

Therms
incentive $

The estimates of unit throughput for 2011 are based on the throughput
for 2010. The kWh savings estimates are based on the total average kWh
savings totals for 2009 and 2010.
Market Segment Overview:
There are no currently anticipated code changes that are likely to
influence this market within the foreseeable future.
There are no technology or infrastructure changes that are likely to
influence this program in the near future.
This program is marketed through account executives, vendors and
outreach material.

Implementation Plan:
The key drivers to delivering on the objectives of this program will be
using marketing efforts to drive customers to the program and ongoing
work with vendors to make sure they are aware of the incentives
available to customers.

Data Collected to Support Future EM&V:
Data collected in anticipation of future internal and external EM&V needs
include data on the cost, number of controllers, installation date of the
software, baseline reports providing usage data prior to installation and
usage data reports showing savings after installation of software.

72

Prescriptive Commercial Clothes Washer Program
Commercial Sector

Key Individuals and Responsibilities:
Greta Zink is designated as the current Program Manager.
Tom Lienhard is the primary technical resource for the program.
Target Market(s):
This is applicable to non-residential electric and natural gas customers in
multi-family or commercial Laundromat facilities.

Program Overview:
This program is intended to prompt the customer to replace or install an
energy-efficient commercial clothes washer in a multi-family or
commercial Laundromat facility.
Commercial clothes washers that are certified Energy Star or CEE listed
are eligible for the incentive.
Having a streamlined prescriptive approach allows us to reach these
markets before decisions are made and influence customers to select
higher efficiency models.

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
CW- Electric DHW and E 45 9,000
73

The estimates of unit throughput for 2011 similar to the numbers for
2010. The incentive estimate is based on the $200 incentive; the kWh
and therm savings are based on the 2010 numbers extrapolated using the
2011 unit numbers.
Market Segment Overview:
CEE is proposing that commercial clothes washers be more closely
aligned with residential clothes washer specifications as far as savings. If
this is accepted, the changed could be effective on 1/1/11.
This program is marketed through account executives, vendors and
outreach material.
Implementation Plan:
The key drivers to delivering on the objectives of this program are the
direct-incentives to fuel customer interest, marketing efforts to drive
customers to the program and ongoing work with trade allies to ensure
that customer demand can be met.

Data Collected to Support Future EM&V
Data collected in anticipation of future internal and external EM&V
needs include data on the cost, manufacturer and model of machine,
installation date, number of units and location of each machine, type of
water heater that serves the clothes washer, type of dryer as well as the
number of loads that are processed per week.

74

Demand Controlled Ventilation Program
Commercial Sector

Key Individuals and Responsibilities:
Greta Zink is designated as the current Program Manager.
Mike Dillon is the primary technical resource for the program.
Target Market(s):
This is applicable to non-residential electric or natural gas customers.

Program Overview:
This program is intended to prompt the customer to install ventilation
controls on existing buildings that use carbon dioxide levels to measure
occupancy and modify the percentage of outside air based on variable
levels, rather than setting the intake rates for maximum occupancy levels
at all times.
Demand controlled ventilation measures the approximate number of
people occupying a space and resets the intake rate based on the
measurement.
To be eligible for the program, the conditioned spaces must be kept
between 65 and 75 degrees during operating hours, the controlled
conditioned space must have a minimum of 2,000 square feet, incentives
are paid at .25 per square foot with a cap of 2,500 square foot per sensor.
If the space has portable walls, each room must be controlled separately
and controlled space must meet a minimum of ASHREA 62 standards.

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
75

The estimates of throughput for 2011 are similar to 2010.
Market Segment Overview:
There are no currently anticipated code changes that are likely to
influence this market within the foreseeable future.
There are no technology or infrastructure changes that are likely to
influence this program in the near future.
This program is marketed by account executives, vendors and outreach
material.
.

Implementation Plan:
The key drivers to delivering on the objectives of this program are the
direct-incentives to customers, marketing efforts to drive customers to
the program and ongoing work with trade allies to make them aware of
our commercial programs.

Data Collected to Support Future EM&V
Data collected in anticipation of future internal and external
EM&V needs include data on costs, type of area to be controlled,
square footage of area, total number of square feet to be controlled,
if the controlled space has air conditioning, what the controlled
space is heated with, maximum occupancy of controlled space and
approximate percent of time he space is at full occupancy.

76

Prescriptive Electric to Natural Gas Water Heater Conversion Program
Commercial Sector

Key Individuals and Responsibilities:
Greta Zink is designated as the current Program Manager.
Carlos Limon is the primary technical resource for the program.
Target Market(s):
This is applicable to non-residential electric and natural gas customers

Program Overview:
This program is intended to prompt our smaller commercial customer to
convert their electric water heater that is 80 gallons or smaller to a
natural gas water heater 80 gallons or smaller.
This program offers a $150 incentive for the conversion when it meets
our eligibility criteria. Criteria includes: building square footage must
be 4,000 or less (larger buildings can apply for a site specific rebate
through their Avista Account Executive), must be both Avista electric
and natural gas customer, and the Efficiency Factor of the new water
heater must be equal or greater than .60 or have an AFUE equal or
greater that 90%.

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
E to NG WH Conversion 0 0 0 0 0
Total

77

Market Segment Overview:
This market is hard to reach as many smaller commercial customers do
not own their facility and property managers do not pay the utility bill so
neither wishes to do property improvements. During the life of this
program we processed one incentive. It did not pass the sub-TRC during
the 2011 business planning process and the decision was made to
eliminate this program from the prescriptive offering. We will accept
rebates for these conversions that were installed on or before December
31, 2011. All paperwork needs to be submitted before March 31, 2011.
The website will be updated to reflect these changes.

Implementation Plan:
This program is being discontinued as of 12/31/10.

Data Collected to Support Future EM&V
Data collected in anticipation of future internal and external EM&V
needs include total cost, manufacturer, model and size of unit removed,
installation date of new unit, manufacturer, model and size of new
installed unit, building square footage and installing contractor name.

78

Prescriptive Food Service Equipment Program
Commercial Sector

Key Individuals and Responsibilities:
Greta Zink is designated as the current Program Manager.
Andy Paul is the primary technical resource for the program.
Target Market(s):
This is applicable to non-residential electric and natural gas customers.

Program Overview:
This program was launched to provide an easy path for customer to
make choices for high efficiency equipment in commercial kitchens.
This had been a difficult market to reach with our site specific program
and is ideal for the prescriptive approach as the savings are similar
between applications.
Equipment must meet Energy Star or CEE Tier levels depending on the
unit to be eligible for incentives.

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualized
therm
savings

79

80

81

82

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
Commercial Food Service
Equipment
144 64,545 393,678 23,831 600
Total 144 64,545 393,678 23,831 600

The estimates of throughput for 2011were extrapolated from the 2010
numbers. The non-incentive dollars are for participation in trade shows.
Market Segment Overview:
There are no currently anticipated code changes that are likely to
influence this market within the next year.

Implementation Plan:
83

The key drivers to delivering on the objectives of this program are the
direct-incentives to fuel customer interest and ongoing work with
account executives and restaurant equipment vendors.

Data Collected to Support Future EM&V
Data collected in anticipation of future internal and external EM&V
needs include data on the cost, installation site and date, manufacturer,
model number, if the equipment was installed as a retrofit or new
equipment, if old equipment was still functioning properly, and type of
booster heater for dishwashers.

84

Prescriptive Commercial HVAC Program
Commercial Sector

Key Individuals and Responsibilities:
Greta Zink is designated as the current Program Manager.
Mike Dillon is the primary technical resource for the program.
Target Market(s):
This is applicable to non-residential electric and natural gas customers.

Program Overview:
This program is intended to provide a prescriptive approach for small
commercial/industrial customers who are installing or replacing HVAC
equipment.
Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
Commercial HVAC
Total 13,000
kbtu
37,500 N/A 30,770

Throughput for 2011 is based on engineer estimates from 2010 site
specific project loads.
Market Segment Overview:
There are no technology or infrastructure changes that are likely to
influence this program in the near future.
Implementation Plan:
85

The key drivers to delivering on the objectives of this program are the
direct-incentives to fuel customer interest, working with vendors and
contractors to make them aware of this new incentive opportunity for
small commercial/industrial customers and working with account
executives.

Data Collected to Support Future EM&V
Data collected in anticipation of future internal and external
EM&V needs include type of equipment, equipment efficiency,
segment of business, and hours of operation.

86

Prescriptive LED Traffic Signal Program
Commercial Sector

Key Individuals and Responsibilities:
Greta Zink is designated as the current Program Manager.
Tom Lienhard is the primary technical resource for the program.
Target Market(s):
This is applicable to non-residential electric customers

Program Overview:
This program is intended to prompt the customer to replace incandescent
traffic signals with high efficient LED traffic signals.
Incentives are paid for pedestrian signals, red, yellow and green traffic
signals and traffic arrows.
This program is available to traffic signal owners which are primarily
municipalities.

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

87

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
Pedestrian Signals 9 Inch
Pedestrian Signals 12 Inch
Traffic Signals 8 Inch Green
Traffic Signals 8 Inch Red
Traffic Signals 8 Inch
Yellow

Traffic Signals 12 Inch
Green

Traffic Signals 12 Inch Red
Traffic Signals 12 Inch
Yellow

Traffic Arrows 8 Inch Green
Traffic Arrows 8 Inch Red
Traffic Arrows 8 Inch
Yellow

Traffic Arrows 12 Inch
Green

Traffic Arrows 12 Inch Red
Traffic Arrows 12 Inch
Yellow
23,540 218,354
Total 800 25,285 218,625 N/A 200

The estimates of unit throughput for 2011 based on results from a survey
we did in 2010 on traffic signals remaining to be replaced.
Market Segment Overview:
Code changes have occurred that require all traffic signals manufactured
to be energy efficient. We believe that we are reaching market saturation
and plan to run this program until the end of 2011.

Implementation Plan:
Due to changes in manufacturing codes and the belief that we are
reaching market saturation, we will be sending out notice that this
program will be ending as of 12/31/10.
88

Data Collected to Support Future EM&V
Data collected in anticipation of future internal and external
EM&V needs include individual data on the cost, size, installation
date of each signal installed, and location of installation.

89

Prescriptive LEED Program
Commercial Sector

Key Individuals and Responsibilities:
Greta Zink is designated as the current Program Manager.
Mike Dillon is the primary technical resource for the program.
Target Market(s):
This is applicable to non-residential electric and natural gas customers.

Program Overview:
This program is intended to prompt significant market transformation for
the number of LEED certified buildings in our service territory.
The proposed incentive level is $.25 per conditioned square foot for
LEED certified buildings that are new construction projects and $.50 per
conditioned square foot for LEED certified buildings that are existing
buildings and that have an energy use index of at least 25% less than
required by Washington State Energy Code.
The incentive is intended to help cover the costs of the certification with
a requirement that 4 points are achieved in the Energy Optimization
section of the LEED Checklist. Projects with potential LEED
certification incentives, along with the other incentives we pay on the
projects, are contracted through the site specific process.

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
LEED 2 754,251 N/A N/A N/A
Total 2 754,251 N/A N/A N/A
90

The estimates of unit throughput for 2011 are based on projects in the
pipeline.
Market Segment Overview:
Avista began providing market transformation incentives for projects that went through
the United States Green Building Council‘s LEED New Construction and Existing Buildings
processes in 2004. At that moment in time we had minimal green building activities in our
service territory. Since then we have seen a large increase in the design of projects that choose to
go through the LEED certification process. From the USGBC website there have been 68
projects that have either been certified or applied for the certification process in our Washington
and Idaho service territory (54 NC, 6 EB, 3 LEED Schools and 5 CI/CS). Of these 68 projects
Avista has been involved in 30 of these projects 28 of which are currently in study or completed
phase. The spillover consists of projects that never went beyond the application phase, only
served by one of our fuels, in an area where we might operate but not necessarily provide utilities
to that facility, required building to LEED standards or a transportation gas customer. Over the
course of the program we have paid out (or are contracted to) $1,813,015 in incentives. We now
believe that we have been successful in introducing the LEED certification process to the
building stock in our service territory and thus we should begin to wrap up the market
transformation program. We should accept all projects that have their applications and be under
contract by 12/31/2010 under the old programs, but those projects must wrap up and have final
approval from the Green Building Certification Institute before 12/31/2011.

Implementation Plan:
Work with the account executives to contract any projects we are aware of
before the end of the 2010 calendar year.

Data Collected to Support Future EM&V
Since we do not claim any savings for this program we do not collect
any specifically for EM&V. Invoices are required to show project cost
and installation.

91

Prescriptive Premium Efficiency Motors Program
Commercial Sector

Key Individuals and Responsibilities:
Greta Zink is designated as the current Program Manager.
Levi Westra is the primary technical resource for the program.
Target Market(s):
This is applicable to non-residential electric customers.

Program Overview:
The premium efficiency motors program was developed several years
ago in an effort to change the buying patterns for customers who use
motors in their facilities. This program provides an incentive for
customers who purchase premium efficiency motors over standard
motors for stock.
The incentive is intended to pay approximately 50% of the incremental
costs of buying premium efficiency motors. This is our only prescriptive
program that allows incentives to be paid upon purchase rather than
upon installation. This is an intentional piece of this program since we
are trying to get customers to keep premium efficiency motors in stock.
In order to qualify for incentives, motors must meet our listed NEMA
Premium efficiency standards.
Premium efficiency motors provide customers with reduced downtime
and lower maintenance costs. This program has also provided a market
transformation element because purchasing practices have been altered
as a result of our incentives.

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

Budget and Savings:

Measure

Units

Incentive

kWh

Therms
Non-
incentive $
92

$

The 2011 estimates are slightly lower than the 2010 actual. Although we
did not have any motors over 200HP processed in 2010, with the limited
number of high efficient motors on the CEE list, we may not see the
throughput that we have in years past. The incentive and kWh numbers
for 2011 were determined by using the 2010 actual and dividing by the
units and multiplying by the 150 units estimated for 2011. The non-
incentive dollars are for form change costs. The total line reflects the
numbers in the business plan spreadsheet that came from sizing the
program to fit the expectations.
Market Segment Overview:
Code changes going into effect December 2010 will make NEMA
Premium Efficiency motors the new standard for motors in the 1 -200
HP range. There are currently 633 motors that are one full band above
the standard that will be considered high efficient. The new federal
minimum for 250 -500 HP motors is below NEMA Premium efficiency
levels. As such, the NEMA Premium levels for these motors will
continue to represent premium efficiency.

Implementation Plan:
Due to the code changes that will be effective in December of this year,
we plan on scaling back the Premium Efficiency Motor Rebates to
motors that fall between 1 and 200 HP. Any motors that are above 200
HP will need to be considered on a site specific basis.

Data Collected to Support Future EM&V
Data collected in anticipation of future internal and external EM&V
needs include purchase date, manufacturer, motor model number, rated
efficiency, ODP or TEFC, HP and RPM, Continuous or Non-continuous
and installation location.

93

Prescriptive Refrigerated Warehouse Program
Commercial Sector

Key Individuals and Responsibilities:
Greta Zink is designated as the current Program Manager.
Andy Paul is the primary technical resource for the program.
Target Market(s):
This is applicable to non-residential electric customers with refrigerated
warehouses.

Program Overview:
This program was launched in 2006 to provide the opportunity for
customers to receive a prescriptive incentive for efficiency
improvements in refrigerated warehouses using a streamlined approach.
Although there are a relatively small number of customers in this
segment, there are significant opportunities for energy savings in the
measures covered under this program.

Prior Year Program Results:

Measure
New Construction/Retrofit

Annualize
d 2010
units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

94

Refrigerated Warehouse Cooler
Table
Refrigerated Warehouse Freezer
Table
95

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
Fast-acting freezer doors
Fast-acting cooler doors
Dock door seals for freezers
Dock door seals for heated spaces
Cooler condenser fan VFD
Freezer condenser fan VFD
Evaporator fan VFD
Compressor VFD
Electronic compressor unloading
control

Central computer refrigeration
control

Auxiliary evaporative condenser
EC evaporator fan motor 1/20 hp
EC evaporator fan motor 1/15 hp
EC evaporator fan motor 1/6 hp
EC evaporator fan motor 1/3 hp
EC evaporator fan motor 1/2 hp
96

Refrigerated Warehouse Cooler
Table
Refrigerated Warehouse Freezer
Table
97

The estimates of throughput for 2011 are not input by units as this
program has measures that are in linear feet, per square feet or per item.
Market Segment Overview:
There are no currently anticipated code changes that are likely to
influence this market within the foreseeable future.
There are no technology or infrastructure changes that are likely to
influence this program in the near future.

Implementation Plan:
The key drivers to delivering on the objectives of this program are the
direct-incentives to fuel customer interest, marketing efforts to drive
customers to the program and ongoing work with account executives to
remind the customer that this is available.

Data Collected to Support Future EM&V

98

Prescriptive Retro-Commissioning Program
Commercial Sector

Key Individuals and Responsibilities:
Greta Zink is designated as the current Program Manager.
Mike Dillon is the primary technical resource for the program.
Target Market(s):
This is applicable to non-residential electric and natural gas customers.

Program Overview:
This program provides an opportunity for eligible customers to receive
an incentive towards a qualified retro-commissioning study. This
program was developed for commercial buildings that have never gone
through any type of commissioning or quality assurance process and are
performing below their potential.
Retro-commissioning is a systematic process for investigating, analyzing
and optimizing the performance of building systems that have never
been commissioned. Building commissioning is increasingly recognized
as a cost-effective process to improve building performance, reduce
energy use, increase equipment life, improve indoor air quality and
improve occupant comfort and productivity.
Although the savings that are achievable through retro-commissioning
can be significant, market penetration still seems to be relatively low.
Our program is trying to overcome these barriers with education,
incentives and a streamlined approach to implementation.
Currently the program parameters include a .10 per square foot incentive
for retro-commissioning studies done by a qualified commissioning
agent, an incentive for contractors to make eligible quick fixes and the
opportunity for customer to receive schedule 90/190 incentives for
qualifying projects.
To be eligible for incentives you must meet the following criteria;
building must have at least 5,000 square feet and must be controlled by
an energy management system. The Energy Use Index must be greater
than 100% of normal. The building must be at least 5 years old. The
minimum average occupancy must be at least 50% over the last 2 year
period.

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010

Annualized
kWh savings

Annualize
d therm

99

incentives* savings

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
Retro-Commissioning 1 5,375
Total

The estimates of throughput for 2011 are based on what is in the
pipeline. The kWh is calculated site specifically when the reporting on
the building is done, so it is not possible to estimate the savings.
Market Segment Overview:
There are no currently anticipated code changes that are likely to
influence this market within the foreseeable future.
There are no technology or infrastructure changes that are likely to
influence this program in the near future.

Implementation Plan:
We are in discussions with others regarding this program with possible
partnership to spark more customer interest.

Data Collected to Support Future EM&V
Data collected in anticipation of future internal and external
EM&V needs include pre and post usage, list of measures and
savings calculations.

100

Prescriptive Commercial Shell Program
Commercial Sector

Key Individuals and Responsibilities:
Greta Zink is designated as the current Program Manager.
Mike Dillon is the primary technical resource for the program.
Target Market(s):
This is applicable to non-residential electric and natural gas customers.

Program Overview:
This program is intended to provide a prescriptive approach to
commercial/industrial customers who will be adding insulation or
replacing windows. This program is not intended for new construction.
Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
Commercial Shell
Total 180,000
sq ft
62,000 175,950 11,700

Throughput for 2011 is based on engineer estimates from 2010 site
specific projects load.

Market Segment Overview:
There are no technology or infrastructure changes that are likely to
influence this program in the near future.

101

Implementation Plan:
The key drivers to delivering on the objectives of this program are the
direct-incentives to fuel customer interest, working with contractors and
vendors to make them aware of this new incentive opportunity and
working with the account executives.

Data Collected to Support Future EM&V
Data collected in anticipation of future internal and external
EM&V needs include segment of business, existing insulation
level, current u-value of windows, heating and/or cooling system
type and hours of occupancy.

102

Prescriptive Side Stream Filtration Program
Commercial Sector

Key Individuals and Responsibilities:
Greta Zink is designated as the current Program Manager.
Tom Lienhard is the primary technical resource for the program.
Target Market(s):
This is applicable to non-residential electric customers who have open
loop evaporative cooling tower/chiller systems.

Program Overview:
This program is intended to prompt the customer to increase the energy
efficiency of their side stream filtration systems through direct financial
incentives.
This program provides incentives for the installation of permanent side
stream filtration systems on open loop chiller/cooling tower systems for
new or existing systems. This helps keep the exterior water loop cleaner
and makes the exchange of heat or cooling more efficient and helps the
equipment operate more efficiently between normal cleanings and
inspections.
Incentives for this program are paid at $18 per ton or 50 percent fo the
installed cost, whichever is less.
Other benefits of installing side stream filtration systems include
extending the equipment life, improve plant efficiency, and reduction in
corrosion and erosion.
To be eligible for this program the following program criteria must be
met: pre-approval by Avista is required to receive the incentive, the
system must filter at least 2 percent of the full chilled water circuit flow,
the system must have automatic backwash system and controls, the
minimum filter efficiency must be at least 75 percent, the filer media
must remove particles 0.5 microns and greater in size, if chiller and
cooling tower systems are interconnected, the entire system must be
filtered, normal annual teardown, inspection and maintenance of the
chiller must still be performed.

Prior Year Program Results:

Measure

Annualized
2010 Tons*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

103

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
Side Stream Filtration 300 5,400 38,100 N/A N/A
Total 300 5,400 38,100 N/A N/A

The estimates of tons throughput for 2011 are averaged from the 2010
actual numbers.
Market Segment Overview:
There are no currently anticipated code changes that are likely to
influence this market within the foreseeable future.
There are no technology or infrastructure changes that are likely to
influence this program in the near future.

Implementation Plan:
The key drivers to delivering on the objectives of this program are the
direct-incentives to fuel customer interest, marketing efforts to drive
customers to the program and ongoing work with trade allies to ensure
that customer demand can be met.

Data Collected to Support Future EM&V
Data collected in anticipation of future internal and external EM&V
needs include energy use per kW/ton at full load and average load,
average chiller load percent, annual chiller operation hours, the system
tons per ton, installation location and date of install, contractor name.

104

Prescriptive Vending Machine Controller Program
Commercial Sector

Key Individuals and Responsibilities:
Greta Zink is designated as the current Program Manager.
Tom Lienhard is the primary technical resource for the program.
Target Market(s):
This program is available to non-residential electric customers.

Program Overview:
This program is intended to prompt the customer to install energy saving
controls on cold drink vending machines dispending non-perishable
drinks.
The program is only available for vending machines that do not
currently have controls.
This program pays an incentive of $90 per controller.

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
Vending Machine Controller 10 900 9000 N/A N/A
Total

The estimates of unit throughput for 2011 are the same as 2010.
Market Segment Overview:
There are no currently anticipated code changes that are likely to
influence this market within the foreseeable future.
105

There are no technology or infrastructure changes that are likely to
influence this program in the near future.
This program is marketed through account executives, vendors and
outreach material.

Implementation Plan:
The key drivers to delivering on the objectives of this program will be
using marketing efforts to drive customers to the program and ongoing
work with vendors to make sure they are aware of the incentives
available to customers.

Data Collected to Support Future EM&V
Data collected in anticipation of future internal and external EM&V
needs include data on the cost, hours of operation, installation date and
location of each controller installed as well as the vending machine
model number.

106

Non-Residential HVAC Rooftop Maintenance Pilot Program
Commercial Sector

Key Individuals and Responsibilities:
Greta Zink is designated as the current Program Manager.
Levi Westra is the primary technical resource for the program.
Target Market(s):
This is applicable to non-residential electric customers who have a
rooftop unit.

Program Overview:
This program is intended to better define the savings that occur with the
regular maintenance of a commercial HVAC rooftop unit. We started
this pilot program in 2009 and planned to have an analysis complete for
2011 Business Planning, however due to contractor and equipment
issues, the final data will not be available until later this year.
This pilot program replaced the AirCare Plus Program that ran for 5
years. AirCare Plus started as a NEEA venture to attempt market
transformation for the rooftop HVAC industry. The premise of the
program was that very little, if any, maintenance was done on a regular
basis for rooftop units. NEEA decided to no longer fund the project
when it was determined not to be a reasonable market transformation
effort. We decided to fund the program at a local level and make
changes to the protocol to fit our needs. The program was run in our
Idaho service territory for 2 years and then was expanded service
territory wide for 2006, 2007 and 2008. During external audits, this
program was flagged as one to be re -evaluated for savings. In order to
accommodate that request, we did not renew our contract with PECI and
initiated this pilot program.
This pilot program was set up to compare like rooftop units on one
rooftop, performing maintenance on one and not the other and log the
data on both units to better identify the energy saving of regularly
maintaining those units. We also are monitoring the conversation with
the RTF on the BPA pilot that is ongoing.

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

107

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
Rooftop Pilot 3 0 0 0 0
Total

The estimate of throughput for 2011 is still at zero. We will be
compiling our pilot data later this year and determining if this program
should be reinstated or terminated.
Market Segment Overview:
There are no currently anticipated code changes that are likely to
influence this market within the foreseeable future.
There are no technology or infrastructure changes that are likely to
influence the premium that would be paid for high-efficiency appliances
incentivized under this program in the near future.

Implementation Plan:
The decision to implement this program will be determined after all data
is analyzed. If it is determined to go forward, we will budget and
implement for 2012.

Data Collected to Support Future EM&V
Currently we are collecting the following data from the rooftop units;
energy usage, temperature, location, date and time.

108

Energy Star® Appliance Rebate Program
Residential Sector

Key Individuals and Responsibilities:
Camille Martin is designated as the current Program Manager. The program coordinator is
Sandra Hoye who works with the processing team of contract employees and students as well as
serving as primary contact for internal and external inquiries.
Tom Lienhard is the primary technical resource for the program.
Target Market(s):

This is applicable to residential gas and electric customers seeking to purchase energy efficient
appliances, in Washington and Idaho. Both new construction and retrofit purchases may apply.
Key external stakeholders include homeowners, landlords (and renters) and businesses. Key
internal stakeholders include contact center, accounts payable, marketing and corporate
communications.

Program Overview:

This program has been designed for ease of use by Avista electric and natural gas residential
customers in Idaho and Washington. Currently, any new Energy Star® rated freezers,
refrigerators, dishwashers and clothes washers are rebated as part of this program. Rebates are
applicable to new or existing single and multi–family residences, including manufactured,
modular homes and domestically used in businesses.

This program is intended to prompt the customer to increase the energy efficiency of their
appliances through direct financial incentives. It indirectly supports the infrastructure and
inventory necessary to ensure that the availability and variety of high-efficiency appliances for
the customer.

By ensuring that sufficient demand exists for these appliances it is expected that an adequate
demand for high-efficiency appliances will exist to justify maintaining them in inventory. To
that extent the program is anticipated to have a long-term market transformation component as
well as a short-term acquisition objective. This program additionally supports regional and
national market transformation efforts. Incentives also encourage customers to replace operative
non-efficient appliances to reduce the energy use in their home.

109

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

The above estimates 2010 results based on YTD results through September 2010. Rebate
throughput is 30% higher compared to the same timeframe for 2009. In addition to extensive
marketing efforts, state appliance rebates are believed to have contributed significantly to
increased throughput.

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
Freezers 345 $20 60/year $0
Refrigerators 3,704 $25 105/year $0
Dishwashers (Electric H2O
Heat)
1,785 $25 70/year $0
Clothes Washers (Electric
H2O Heat)
2,894 $50 220/year $0
Dishwashers (Natural Gas
H2O Heat)
1,563 $25 100/year 6/year $0
Clothes Washers (Natural
Gas H2O Heat)
2,872 $50 30/year 2/year $0
Total 13,163

The estimates of unit throughput for 2011 are significantly lower than 2010 due to the expiration
of state appliance rebates. It is expected that a high percentage of older units were replaced
during the 2010 time period in order to take advantage of these state rebates. This incentive to
110

replace older appliances before burnout advanced many of these replacements that would have
otherwise occurred in 2011 or the few years thereafter.
Market Segment Overview:

Changing to a tiered approach in incentivizing Energy Star® appliance purchases may cause
market transformation with retailers stocking more of the highly efficient appliance models.
There are infrastructure changes that are likely to influence the premium that would be paid for
high-efficiency appliances incentivized under this program, in the near future.

Idaho‘s state appliance rebates ended in September 2010. Washington state appliance rebates are
scheduled to expire at the end of 2010. This could have an effect on throughput and potentially
lower the average high-efficiency appliance that is installed.

Implementation Plan:

The key drivers to delivering on the objectives of this program are the direct-incentives to fuel
customer interest, marketing efforts to drive customers to the program and ongoing work with
retailers to ensure that customer demand can be met.
The Energy Star® Appliance Rebate Program is an integral consideration in the ongoing
everylittlebit.com campaign. The campaign builds broad awareness for energy efficiency as well
as specific programmatic highlights.
Key to success is clear communication to customers on rebate requirements and forms. Utility
websites are also channels to communicate program requirements and highlight opportunities for
customers.
Any changes should have advance notice for customers in the form of 90 days to submit under
old requirements. This usually includes at a minimum direct mail communication to retailers as
well as internal, forms and website updates.

Data Collected to Support Future EM&V:
Data collected in anticipation of future internal and external EM&V needs include individual
data on the cost, size, and installation date of each energy efficiency appliance installed. While
rebates may be paid to a landlord at a different location, measures will be tracked by service
address where the appliance was installed.
For process evaluation data results will be collected monthly to show throughput of number of
measures installed, incentives paid, kWh and therm savings claimed and incremental non-
incentive costs. A monthly narrative will be included with the above results to summarize
changes under evaluation and/or changes implemented to program processes, rebate amounts,
savings claims, etc.

111

Second Refrigerator or Freezer Recycling Program
Residential Sector

Key Individuals and Responsibilities:
Camille Martin is designated as the current Program Manager. The program contractor is JACO
Environmental, Inc. (JACO) who manages the turn-key program that includes marketing,
customer call center (customer unit pick-up requests & scheduling and complaints) haul-away,
unit dismantling & recycling, administration of program and rebate processing as well as serving
as primary contact for internal and external inquiries.
Tom Lienhard is the primary technical resource for the program. Bob Nicholas is JACO‘s
primary contact for the Second Refrigerator or Freezer Recycling Program.
Target Market(s):

This is applicable to residential electric or electric/gas combo customers seeking to recycle
energy inefficient refrigerators or freezers, in Washington and Idaho. Key external stakeholders
include JACO, homeowners, renters and landlords. Key internal stakeholders include contact
center, accounts payable, marketing and corporate communications.

Program Overview:

This program is intended to prompt the customer to decrease their energy used on inefficient
second refrigerators or freezers by recycling and receive financial incentives. JACO
Environmental Inc. (JACO) picks up to two Refrigerators and/or Freezers (units) from a
customer‘s home when they request a pick-up. The pick-up service is free to the customer. A $30
rebate is provided for each operational refrigerator and/or freezer, up to two per household. The
pre-1995 refrigerator(s) or freezer(s) are picked up and delivered to a recycling facility operated
by JACO. JACO recycles nearly 95 percent of each refrigerator, and safely dispose of the toxins
and ozone-destroying chlorofluorocarbon gases from foam insulation. JACO works with local
businesses to recycle glass, plastic and metal.
Program Criteria:
The refrigerator or freezer needs to be in working condition and between 10 to 30 cubic feet in
size. Units also must be 1995 models or older.
The program is for Avista Electric or Electric/Gas customers only.
Customers must own the unit(s) being recycled, with a limit of two units per account.
The $30 rebate check will be mailed to the customer within 4 to 6 weeks after the appliance
collection.

Prior Year Program Results:

112

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

The above estimates 2010 results based on YTD results through September 2010. Rebate
throughput is about the same compared to the same timeframe for 2009. Avista and JACO have
done extensive marketing efforts to increase the amount of units being recycled.

Budget and Savings:

Measure

Units

Incentive
$

kWh
Non-
incentive $
Units (Freezers or
refrigerators
2,500 $30.00 ea 579 ea
(avg)
$110.00 ea

The estimates of unit throughput for 2011 will most likely continue to be steady or slightly lower
compared to 2010 due to the expiration of state appliance rebates and their refrigerator recycling
requirement.
Estimates of energy savings for different types of units (freezers or refrigerators), different
locations and home characteristics (e.g. located in the home or garage etc) are specifically
tracked and the appropriate energy savings are claimed. The averages above are based upon the
historical mix within the Avista service territory.
Market Segment Overview:
Market research indicates that there is a significant presence of working 2nd refrigerators and
stand-alone freezers in the Pacific Northwest. For example, the Northwest Energy Efficiency
Alliance‘s 2007 Single Family Residential Existing Construction Stock Assessment indicated
that among single family owners intending to stay in the same location 18+ months, there was an
average of 0.39 secondary refrigerators per household (see Table 52 on page 44 (PDF page 46)
of the report at http://www.nwalliance.org/research/reports/E07179.pdf ).
Given this situation, and given the relatively low costs to properly remove and dispose of such
appliances, the opportunities for cost-effective peak demand reduction and annual energy
savings. The success of the Program will be attributed to the accelerated retirement and removal
of the older and least efficient refrigerators.
Many customers retain and operate spare appliances even though such units are old, inefficient,
and/or ineffectively operated (e.g., a secondary refrigerator is mostly empty, or used simply to
keep beverages cold). These circumstances occur because the customer: 1) does not recognize
113

the full cost of operating the units in this way, and/or 2) perceives a hassle factor regarding the
disposal of the unit. JACO‘s program overcomes this inertia by: 1) publicizing the true costs of
running the old, inefficient units, 2) making unit disposal convenient and no-cost, and 3) offering
an incentive to further lure the customer away from the old unit.
This program also prevents the customer from either: 1) using a haul-away and resale service, or
2) transferring the appliance to another customer. In either of these options, the older, inefficient
appliance often continues to be utilized.
Marketing
The marketing campaign promotes from May through December. JACO notes that refrigerator
recycling program participation is highest in the summer months (when home improvement
projects and home relocations most frequently occur) and lowest around the November-January
holidays (when second-unit need is the greatest); average daily harvest rates during the summer
typically run up to 50% higher than average month harvest rates.
Given the geographic, demographic, and seasonality considerations , JACO and sub-contractor
for marketing and public relations- Runyon Saltzman & Einhorn (RS&E) recommend a mix of
media based on the following criteria:
- Maximization of advertising reach (local newspapers) and frequency throughout the
targeted geographies through the utilization of cost-effective and targeted media
vehicles, with a focus on 1) generating high levels of initial awareness and 2)
sustaining levels of high awareness.
- Ability of the media to deliver messages to a targeted geography, thereby reducing
geographic waste resulting from campaign coverage to areas not eligible for subject
program.
- Impact and effectiveness of the medium as a direct response vehicle, i.e., the ability to
present both in-depth program detail and a visual display of response mechanism (for
example, a telephone number or web site address for interested audience members to
contact).
Media Plan Objectives
The media plan‘s explicit objectives are to 1) generate a high level of awareness regarding the
Avista‘s refrigerator recycling program, 2) prompt calls to the JACO call center or visits to the
program web site, 3) encourage unit collection scheduling via either the JACO call center or the
web site, and 4) By utilizing cost-effective and targeted media vehicles and compelling creative
messages, JACO and RS&E will be able to maximize the program‘s advertising reach, frequency
and impact throughout the targeted geography.
How to reach Avista Customers:
Bill Inserts. The most cost-effective way to reach residential customers in the Avista service
territories – especially in light of service territory geographic considerations (e.g., two states) – is
through monthly bills, in the form of a bill insert, during most active (i.e., warm weather) months
of the year). The bill insert has been developed by Avista and RS&E, for visual impact, and to
increase the chances that customers will view the insert rather than toss it straight into the trash
(unread).
______________________________________________________________________________
____
Implementation:
114

The key drivers to delivering on the objectives of this program are the direct-incentives to fuel
customer interest, and marketing efforts to drive customers to using the program.
The Second Refrigerator Recycling Program is an integral consideration in the ongoing
everylittlebit campaign. The campaign builds broad awareness for energy efficiency as well as
specific programmatic highlights.
Key to success is clear communication to customers on unit pick-up services, recycling and
rebate requirements. Utility websites are also channels to communicate program requirements
and highlight opportunities for customers.

Data Collected to Support Future EM&V:
The following data will be collected and evaluated to verify this savings:
a. Measurement and verification data (evaluation of JACO‘s database records)-This
will be an evaluation of a representative sample of the records of the recycled
units.
b. Deemed savings (comparison of the adjusted baseline and verified data) - Savings
are based on stipulated values that come from historical savings values of specific
models.
i. Calculate the net energy savings and the net to gross ratio.
c. Statistical analysis (historical & current metered energy use data) -Time series
approach-The gross billing analyses will use two years of utility billing records to
determined the energy use pattern.
As part of a larger regional effort offered by many utilities, Avista has the ability to leverage
additional data obtained from other very similar utility programs offered throughout the region
and collected through JACO and the RTF.

115

Residential Lighting Programs
Residential Sector
Energy Conservation in Schools, Dollars for Change and CFL recycling programs

Key Individuals and Responsibilities:
Camille Martin is designated as the current Program Manager and primary contact for internal
and external inquiries.
Mike Dillon is the primary technical resource for the program.
Target Market(s):

This is applicable to residential electric customers, in Washington and Idaho. Key external
stakeholders include homeowners, landlords (and renters), and trade allies. Key internal
stakeholders include contact center, accounts payable, marketing and corporate communications.

Program Overview:

Simple Steps, Smart Savings-Twist and Specialty Compact Fluorescent Lamp (CFL) Buy-
down Program contracted through Fluid Marketing Strategies, Inc.

This program is intended to prompt the customer to increase the energy efficiency of their
lighting through indirect financial incentives through retail buy-down at most big box in the
region. It also indirectly supports the infrastructure and inventory necessary to ensure that the
installation of high-efficiency lightings a viable option for the customer.

By ensuring that sufficient demand exists for these lighting it is expected that an adequate
inventory of high-efficiency lighting will exist to justify maintaining them in inventory.
Incentives also encourage customers to increase efficiency before burn-out of the existing
lighting.
Dollars for Change-An Avista CFL School Fundraiser Program
Avista is looking for ways to encourage energy conservation. Avista is uniquely positioned to
provide a service to schools and non-profit organizations. At the same time, funding for these
organizations is in short supply and they are looking for ways to raise money. A CFL
fundraising program can help meet these needs with mutual benefit.
Described simply, Avista provides energy conservation expertise and volume purchasing power
while fundraising organizations provide a compelling sales force to place CFLs and energy
conservation information in homes. Secondary benefits include an entrepreneurial experience
and energy conservation information for the fundraising organization. Avista receives the
benefit of energy savings.
CFL Recycling Program
Avista has expanded its long-term commitment to the environment and sustainability by
providing a compact fluorescent light (CFL) bulb recycling program at 18 locations in Avista‘s
electric service territory. This free service is the first such offering made in the area to customers
to recycle CFLs. Customers can simply bring in any expired, unbroken CFL bulbs, and give
them to local participating recycling centers. The bulbs will then be managed responsibly by an
environmental management company who will coordinate CFL packaging, transportation and
recycling to maximize safety and ensure environmental compliance. The CFL recycling
116

program is another example of how Avista is empowering customers to help make a difference
in their own homes, and have less of an impact on the environment.

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

The above estimates 2010 results based on YTD results through September 2010.

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
Simple Steps-CFL Buy-
down
90,000 $180,000 1,530,000 0 $22,500
$ for Change 3,500 $7,315 112,000 0 $0
CFL Recycling Program NA $0 0 0 $5,000
Total 93,500 $187,315 1,642,000 0 $27,500

Market Segment Overview:

Simple Steps, Smart Savings
Fluid Marketing Strategies (Fluid) has designed and produced retail Point of Purchase (POP)
materials for participating retail locations, including those in Avista‘s territory. Marketing
materials are being delivered directly to the stores by the Fluid field representatives. Field
representatives will support participating retail stores in Avista‘s territory, provide on-site
merchandising, sales associate training and event staffing. Fluid operates a consumer facing
website that provides educational information about promotional products and allows Avista
customers to locate stores carrying product.

Dollars for Change
Initiation of the relationship between Avista and the non-profit organization begins with
execution of a contract per DSM program requirements. Each fundraising organizer receives a
guide packet that includes basic instruction, marketing materials and tips. Order forms,
permission slips, conservation tip sheets, CFL recycling flyers and other forms/templates are
117

contained on a CD that the sponsoring organization (organizer) can use to download and make
necessary copies.
The organizer launches the sales campaign and collects orders. The orders are tallied and the
organizer contacts Avista to arrange the bulk delivery of CFLs and collateral materials to the
school. The organizer puts together individual orders and makes final delivery. Each order shall
include energy conservation tips and CFL recycling information on a flyer.
CFL Recycling Program
The CFL Recycling Program is marketed through Avista‘s websites and at residential outreach
events. Many of the recycling centers have advertised the program at their recycling centers.

Dollars for Change-2009 Operational Program for 10 Schools, 4 Options

Gratis
Supply
Additional
Supply
Price
Additional
Supply
Subsidy
Retail
Price
Unit Profit Bonus Total
School
Profit
Avista Cost
$500 (270
bulbs)
$1.85 $0 $3.00 $1.15 on
2230 addl
bulbs sold
$0 $810 on
gratis
supply +
$2564.50 +
$0 bonus =
$3,374.50
$500 gratis supply +
$0 subsidy + $0
bonus = $500 (x10
schools = $5,000)
$500 (270
bulbs)
$1.00 $0.85 $3.00 $2.00 on
2230 addl
bulbs sold
$0 $810 on
gratis
supply +
$4460 + $0
bonus =
$5,270
$500 gratis supply +
$1895.50 subsidy +
$0 bonus =
$2,395.50 (x10
schools = $23,955)
$0 $1.85 $0 $3.00 $1.15 on
all bulbs
sold
$500 $2875 +
$500 bonus
= $3,375
$0 gratis supply + $0
subsidy + $500
bonus = $500 (x10
schools = $5,000)
$0 $1.00 $0.85 $3.00 $2.00 on
all bulbs
sold
$500 $5000 +
$500 bonus
= $5,500
$0 gratis supply +
$2,125 subsidy +
$500 bonus = $2,625
(x10 schools =
$26,250)

Implementation Plan:

Simple Steps, Smart Savings
Key to success is clear communication to customers through Fluid website on the program and
highlight opportunities for customers.
Dollars for Change
Initiation of the relationship between Avista and the non-profit organization begins with
execution of a contract per DSM program requirements. Each fundraising organizer receives a
118

guide packet that includes basic instruction and tips. Order forms, permission slips, conservation
tip sheets, CFL recycling flyers and other forms/templates are contained on a CD that the
sponsoring organization (organizer) can use to download and make necessary copies.
The organizer launches the sales campaign and collects orders. The orders are tallied and the
organizer contacts Avista to arrange the bulk delivery of CFLs and collateral materials to the
school. The organizer puts together individual orders and makes final delivery. Each order shall
include energy conservation tips and CFL recycling information on a flyer.

CFL Recycling
This program is slated for termination at the end of 2011 based upon the success that the
program has had in encouraging local governments to adopt CFL recycling practices for their
jurisdictions.

Data Collected to Support Future EM&V:
Data collected in anticipation of future internal and external EM&V needs include individual
data on the cost
General process evaluation data results will be collected monthly to show throughput of a
number of measures installed, incentives paid, kWh and therm savings claimed and incremental
non-incentive costs. A monthly narrative will be included with the above results to summarize
changes under evaluation and/or changes implemented to program processes, rebate amounts,
savings claims, etc.

119

Events Program
Residential Sector

Key Individuals and Responsibilities:
Camille Martin is designated as the current Program Manager. This is likely to shift during CY
2011 due to recent organizational changes.
Mike Dillon is the primary technical resource for the program.
Target Market(s):

This is applicable to residential customer DSM event outreach in Avista‘s Washington and Idaho
territory. Key external stakeholders include homeowners, landlords (and renters), and
community organizations. Key internal stakeholders include contact center, accounts payable,
marketing and corporate communications.

Program Overview:

This program is intended to prompt and encourage Avista customers to increase the energy
efficiency of their residence through education and knowing about and using Avista‘s residential
energy efficiency rebates. The purpose of this business plan is to outline an enhancement to the
residential energy conservation strategy. As part of this strategy the "Something for Everyone"
and ―Geographical Saturation‖ (Events) will promote energy efficiency measures in residential
customer homes.
They include Events and Workshops:
o The program educates and gives an effective way to communicate energy
efficiency and modifies behavior through awareness and product knowledge.
o Avista participates in workshops, conferences, energy fairs, home shows and
community events through Avista‘s service territory in Washington and Idaho, to
spread the energy efficiency message.
o Distributes energy efficiency materials, such as, CFLs and weatherization
products to introduce the use of such products to our customers.
o Informs residential customers about the energy efficiency options and rebates
available to them through Avista and state rebates.

Prior Year Program Results:

Measure Annualized
2010 units*
Annualized
2010
incentives*
Annualized
kWh savings
Annualize
d therm
savings

The above estimates 2010 results based on YTD results through September 2010.

Budget and Savings:
120

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
CFL Distribution
Wx Distribution
Total

Market Segment Overview:

Market analyses estimate a program‘s influence on encouraging future energy efficiency
projects because of changes in the energy marketplace. These evaluations are primarily, but not
exclusively, used for programs with market transformation elements and objectives.
This program markets Avista‗s long standing energy efficiency message to their customers. The
goal of market effects analysis is to determine the potential of a market and to understand its
evolving opportunities as they relate to the Events Program. This program‘s market analysis can
include:
1. Market size (current and future)
2. Potential distribution channels (i.e., media, vendor, customer touch point)
3. Market Potential-Key success factors (barrier identification, customer interest)
4. Market profitability (program penetration potential)

Implementation Plan:

The key drivers to delivering on the objectives of this program are fuel customers interest,
marketing efforts to drive customers to implement energy saving in their homes and use Avista‘s
rebates. Communicating to customers about Avista‘s websites are also channels to communicate
program requirements and highlight opportunities for customers.

Data Collected to Support Future EM&V:

Data collected in anticipation of future internal and external EM&V needs include invoicing for
CFLs, weatherization materials and event registration, event evaluations, 2011 proposed event
list and customer surveys that are filled out to get CFLs and weatherization items.

For process evaluation data results will be collected monthly to show throughput of number of
CFL and weatherization materials distributed, kWh and therm savings claimed and incremental
non-incentive costs. A monthly narrative will be included with the above results to summarize
121

changes under evaluation and/or changes implemented to program processes, rebate amounts,
savings claims, etc.

122

Home Energy Audit Pilot Program
Residential Sector

Key Individuals and Responsibilities:

Joe Brabeck is designated as the current Program Manager. Bryce Eschenbacher is the primary
technical resource for the program. Mary Tyrie is the Marketing Manager assigned to this
project.

Target Market(s): Free-standing single family homes, duplexes and manufactured homes in
Spokane County.

Program Overview:

This program provides residents of free-standing single family homes, side-by-side duplexes and
manufactured homes, and a comprehensive energy audit of their homes. In addition to energy
efficiency the audit will often uncover potential health, safety and structural durability issues
such as water damage and mold problems. Through the use of both an external and internal
physical inspection plus a variety of diagnostic tests the auditor will identify a number of energy
savings opportunities. The customer receives a comprehensive report of the auditor‘s findings.
The report focuses on no-cost (behavioral) and low-cost improvements first (often to be done by
the homeowner) and then targets other efficiency measures which will require some capital
investment.
The audits are designed to follow structural, safety and air quality standards set forth by the
Building Performance Institute (BPI) and the Association of Heating, Refrigeration and Air-
conditioning Engineers. All lead audit contractors are required to be certified Building
Analyst/Home Auditors by BPI.

The program is funded in part by Avista DSM funds, an Energy Efficiency Community Block
Grant (funds received via reimbursement from our government partners) and customer
contributions.

Key external stakeholders include homeowners, renters and landlords. Key internal
stakeholders include contact center, accounts payable, marketing and corporate communications.

Program Objective:
Determine the cost-effectiveness of in-home energy audits as a way to capture electric and
natural gas savings. A secondary objective is to educate customers about energy efficiency and
saving energy by implementing the auditor‘s recommendations.

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010

Annualized
kWh savings
123

incentives*
Program launched in May 2010 205 $18,040 41,000

The above estimates 2010 results based on YTD results through September 2010.

Budget and Savings:

Measure

Units

Incentive $

kWh
Non-
incentive $
Home Audits Completed 420 $88.00 ea 200 ea (avg) $110.00 ea

The estimates of unit throughput for 2011 will likely be higher for a number of reasons
1. A full year of audits vs. 8 months in 2010
2. Increased awareness due to additional marketing and promotion,
3. Additional government funding resulting in lower costs to customers and
4. Word of mouth endorsements.

In addition the majority of the time the program has been running has been during the warmer
weather months. Colder weather and resulting higher heating bills will encourage and motivate
more people to participate in the program.

Market Segment Overview:

Customer Awareness Initiative

The customer awareness and education plan is based on a joint strategy with the governmental
agencies with which we have partnered, it is a year round effort that includes the following
tactics.

Bill inserts in partners bills as well as targeted town codes in the Avista bill.
Impact and effectiveness of the medium as a direct response vehicle, i.e., the ability to present
both in-depth program detail and a visual display of response mechanism, including a telephone
number or web site address for interested audience members to contact.

Email blasts to Avista customers in targeted town codes.
Bill Inserts and Email Blasts are the most cost-effective way to reach residential customers in the
Avista service territories – especially in light of service territory geographic considerations (e.g.,
two states) – is through monthly bills, in the form of a bill insert.

124

Newspaper advertising in appropriate zones based on zip codes. Ability of the media to
deliver messages to a targeted geography, thereby reducing geographic waste resulting from
campaign coverage to areas not eligible for subject program.

Increase Avista’s involvement in grassroots community events including, energy fair
participation, and specific neighborhood meetings.
Allows for one on one education of the program and the benefits the customer will receive.

All messaging directs interested parties to the Avista website.
Provides area for customers to learn the details about the how the program can help them save
KWH and Therms as well as to see if they are eligible for the program and what they can expect
to pay.

Partner with the governmental agencies on ways to further promote through their
channels.
Possible promotions based on income levels or geographic areas.

Plan objectives
1) generate a high level of awareness regarding the Avista‘s In Home energy audit program,
2) prompt calls to the program web site,
3) By utilizing cost-effective and targeted media vehicles and compelling creative messages,
JACO and RS&E will be able to maximize the program‘s advertising reach, frequency
and impact throughout the targeted geography.
______________________________________________________________________________
____
Implementation:
The Home Energy Audit program is implemented in the following way.
1. Customer submits application via the online registration form or completes a paper copy
of the registration form
2. Program manager receives application and acknowledges via email and request payment.
Some customers send in payment with paper copy and some customers who registered
online send in a check (as instructed) prior to the emailed request.
3. Program manager receives payment, processes it and assigns the audit to one of Avista
Home Energy Audit contractors.
4. Auditor completes audit and forwards data to Program Engineer who produces final
report packet and mails it directly to customer. Packet includes audit report, home
improvement rebate forms, Energy Star appliance rebate forms, a refrigerator recycling
coupon, an energy efficiency tip sheet, a weatherization contractor list, an information
sheet about the Energy Efficiency Revolving Loan Program and a customer
feedback/survey card.
5. Random selected phone follow-ups 6 months after the audit is completed to find out if
any measures were implemented.
6. Periodic cross-referencing of rebate lists and audits list to help determine follow up
measures.
7. Periodic review of energy usage histories to determine if energy savings were realized.
125

8. Randomly selected site visits and interviews with customers to determine behavioral
changes and any measures not uncovered by other information capturing methods.

Key Drivers:

The key drivers to delivering on the objectives of this program are the direct-incentives to
subsidize the cost of the audit thereby increasing customer interest, and marketing efforts to
drive customers to using the program.

The In-Home Energy Audit Program is an integral consideration in the ongoing everylittlebit
campaign. Access to registration is channeled through the ELB website The campaign builds
broad awareness for energy efficiency as well as specific programmatic highlights.
Key to success is clear communication to customers of the numerous benefits of the audit. both
energy and non-energy benefits (health, safety comfort, durability) Utility websites are also
channels to communicate program benefits and highlight opportunities for customers.
126

LI SHELL (WEATHERIZATION)
Residential Sector

Key Individuals and Responsibilities:
Renee Coelho is designated as the current Program Manager. The program coordinator is
Rachelle Humphrey who processes invoices and assists in tracking. Avista contracts with
Community Action Partners (CAP) agencies to deliver limited income programs. CAP agencies
have primary contact responsibilities with customers.
Mike Dillon is the primary technical resource for the program. Lori Hermanson provides data
for monthly tracking reports.
Target Market(s):

This is applicable primarily to existing single-family residential buildings, both ‗stick-built‘ and
manufactured homes. CAP agencies have flexibility to treat new construction or multifamily and
are encouraged to identify strategies to reach multifamily and renters. Key external stakeholders
include homeowners, landlords (and renters), and trade allies. Key internal stakeholders include
rates, contact center CARES reps, accounts payable and community development, especially the
limited income energy assistance programs.

Program Overview:

The limited income CAP agencies focus primarily on shell measures and improvements. They
offer ceiling/attic, wall, floor and duct insulation. The complete blower door tests to assess
infiltration opportunities and complete extensive infiltration measures as applicable. When
infiltration measures are completed a post-blower door test is also completed to estimate savings.
Energy Star windows measures are also completed for single pane or broken windows.

CAP agencies complete a site-specific home energy audit to determine which shell measures will
be completed. For 2011 prescriptive savings estimates will most likely be used rather than site-
specific inputs based on results from the 3rd party conducted natural gas decoupling audit. The
audit found some modeling to be overly optimistic. For infiltration some sort of queue from the
agency will be necessary since that measure is difficult to make prescriptive.

127

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings
–
–
–
–
–
–
–
–

The above estimates 2010 results based on YTD results through September 2010. For 2011
limited income allocations have increased in both states. As a result 2011 estimates are higher.

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
G INS – CEIL/ATTIC 216 $185,905 21,383
G INS – FLOOR 199 $257,894 43,290
G INS – WALL 76 $102,126 21,194
G INS – DUCT 52 $17,720 5,254
G REPLC WINDOWS 113 $138,623 8,546
E INS – CEIL/ATTIC 82 $76,108 131,692
E INS – FLOOR 107 $182,501 563,271
E INS – WALL 138 $62,100 103,554
E INS – DUCT 22 $11,442 5,386
E REPLC WINDOWS 121 $234,786 427,800
E INFILTRATION 158 $106,293 129,261
G INFILTRATION 278 $112,807 14,157
Total 1,562 $1,488,305 1,355,578 108,570

Market Segment Overview:

128

There is some code activity in Washington, mainly affecting new construction but we may need
to evaluate changes in case they influence this market in the foreseeable future. There are
technology endeavors underway to further triple pane window options in the market, for
example, the Department of Energy‘s R-5 window program. While this endeavor is promising it
could affect the premium paid for high-efficiency windows incentivized under this program in
the future.

Implementation Plan:

The key drivers to delivering on the objectives of this program are the direct-installation and zero
cost to fuel customer interest and ongoing work with CAP agencies to deliver these programs
cost-effectively.
Key to success is clear communication to CAP agencies through contracting, face to face
meetings and encouraging open dialogue. For 2011, additional efforts will be made to clearly
communicate invoicing and savings tracking requirements and forms.

Data Collected to Support Future EM&V:
Data collected in anticipation of future internal and external EM&V needs include individual
data on the cost, size, and installation date of each energy efficiency equipment or measure
installed. While measures are paid to CAP agencies at a different location, measures will be
tracked by service address where the work was completed.

For process evaluation data results will be collected monthly to show throughput of number of
measures installed, incentives paid, kWh and therm savings claimed and incremental non-
incentive costs. A monthly narrative will be included with the above results to summarize
changes under evaluation and/or changes implemented to program processes, rebate amounts,
savings claims, etc.

129

LI Energy Star Appliance
Residential Sector

Key Individuals and Responsibilities:
Renee Coelho is designated as the current Program Manager. The program coordinator is
Rachelle Humphrey who processes invoices and assists in tracking. Avista contracts with
Community Action Partners (CAP) agencies to deliver limited income programs. CAP agencies
have primary contact responsibilities with customers.
Mike Dillon is the primary technical resource for the program. Lori Hermanson provides data
for monthly tracking reports.
Target Market(s):

This is applicable primarily to existing single-family residential buildings, both ‗stick-built‘ and
manufactured homes. CAP agencies have flexibility to treat new construction or multifamily and
are encouraged to identify strategies to reach multifamily and renters. Key external stakeholders
include homeowners, landlords (and renters), and trade allies. Key internal stakeholders include
rates, contact center CARES reps, accounts payable and community development, especially the
limited income energy assistance programs.

Program Overview:

This program covers the installation of Energy Star refrigerators prescriptively for replace before
burn out situations where the refrigerator is older than 1992 vintage. There is also an option to
install Energy Star refrigerators in replace upon or immediately before burn out situations with
prior written approval. Typically a replace before burnout with greater than 550 kWh should
pass cost-effectiveness tests. Determination is made based on total resource cost-effectiveness
analysis that the measure passes or it may also be approved if the overall limited income
portfolio performance is high enough. Limited income total resource cost-effectiveness is
tracked in a ―calculator‖ that is updated monthly to reflect portfolio performance. If specific
energy usage of existing refrigerator is unknown or if it is a replace upon burn out, then the new
Energy Star refrigerator is compared to a standard efficient system to estimate savings.

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

The above estimates 2010 results based on YTD results through September 2010. For 2011
limited income allocations have increased in both states. As a result 2011 estimates are higher.

Budget and Savings:
130

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
E EStar Refrig 95 $69,043 9,462

Market Segment Overview:

There is some code activity in Washington, mainly affecting new construction but we may need
to evaluate changes in case they influence this market in the foreseeable future.

There are no technology or infrastructure changes that are likely to influence the premium that
would be paid for high-efficiency appliances incentivized under this program in the near future.

The federal and state tax credits are scheduled to expire at the end of 2010 but shouldn‘t affect
limited income programs.

Implementation Plan:

The key drivers to delivering on the objectives of this program are the direct-installation and zero
cost to fuel customer interest and ongoing work with CAP agencies to deliver these programs
cost-effectively.
Key to success is clear communication to CAP agencies through contracting, face to face
meetings and encouraging open dialogue. For 2011, additional efforts will be made to clearly
communicate invoicing and savings tracking requirements and forms.

Data Collected to Support Future EM&V:
Data collected in anticipation of future internal and external EM&V needs include individual
data on the cost, size, and installation date of each energy efficiency equipment or measure
installed. While measures are paid to CAP agencies at a different location, measures will be
tracked by service address where the work was completed.
For process evaluation data results will be collected monthly to show throughput of number of
measures installed, incentives paid, kWh and therm savings claimed and incremental non-
incentive costs. A monthly narrative will be included with the above results to summarize
changes under evaluation and/or changes implemented to program processes, rebate amounts,
savings claims, etc.

131

LI Fuel Conversion
Residential Sector

Key Individuals and Responsibilities:
Renee Coelho is designated as the current Program Manager. The program coordinator is
Rachelle Humphrey who processes invoices and assists in tracking. Avista contracts with
Community Action Partners (CAP) agencies to deliver limited income programs. CAP agencies
have primary contact responsibilities with customers.
Mike Dillon is the primary technical resource for the program. Lori Hermanson provides data
for monthly tracking reports.
Target Market(s):

This is applicable primarily to existing single-family residential buildings, both ‗stick-built‘ and
manufactured homes. CAP agencies have flexibility to treat new construction or multifamily and
are encouraged to identify strategies to reach multifamily and renters. Key external stakeholders
include homeowners, landlords (and renters), and trade allies. Key internal stakeholders include
rates, contact center CARES reps, accounts payable and community development, especially the
limited income energy assistance programs.

Program Overview:

This program involves two measures that replace existing electric straight resistance heat with
natural gas, for both space and water heating needs. The measures include necessary piping and
venting to convert the existing home and in some cases the addition of duct-work as well. For
customers to qualify for a conversion project they must demonstrate they heat primarily with
electric heat. A bill analysis is completed that estimates the electric usage devoted to space
heating to arrive at what is called an R-number. A customer must have a minimum R-number of
4,000 to qualify for a conversion to natural gas.

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

The above estimates 2010 results based on YTD results through September 2010. For 2011
limited income allocations have increased in both states. As a result 2011 estimates are higher.

Budget and Savings:

132

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $

This is always a bit difficult to estimate as natural gas penetration is estimated to be high. With
natural gas prices remaining low there is a shorter payback to converting to natural gas and
remaining electric heat customers have as much to gain as ever. CAP agencies are encouraged to
mine for potential conversions due to the significant bill savings opportunities for customers.
Market Segment Overview:

There are no technology or infrastructure changes that are likely to influence the premium that
would be paid for conversions under this program in the near future. For non-ducted electrically
heated homes, ductless heat pumps are improving on technology and price may have some spill
over to natural gas equipment, whether existing or speculative.

Implementation Plan:

The key drivers to delivering on the objectives of this program are the direct-installation and zero
cost to fuel customer interest and ongoing work with CAP agencies to deliver these programs
cost-effectively.
Key to success is clear communication to CAP agencies through contracting, face to face
meetings and encouraging open dialogue. For 2011, additional efforts will be made to clearly
communicate invoicing and savings tracking requirements and forms.
Evaluation, Measurement and Verification:
In 2010 Avista completed some initial impact evaluations on the savings from the fuel
conversions (and efficiency upgrades) from electric straight resistance. Avista performed
internal estimates of heat load in residential buildings that will inform further internal and
external EM&V. These results indicated that only 47% of the estimated heat load within these
buildings could be verified through billing analysis of various HVAC measures. It is uncertain
how the impact of customer behavior (e.g. ‗take-back‘), pre-project fuel assumptions (e.g.
augmentation with non-Avista fuels) and changes in fuels as a consequence of the efficiency
project influenced these overall results. Additional analysis and follow-up is anticipated. In the
meantime and as a result, kWh savings estimates were reduced for displacing electric straight
resistance.
These measures will be incorporated into two separate 2011 process evaluations of separate data
management and rebate processing.
Future market evaluations of these measures will be evaluated after preliminary results of the
Northwest Energy Efficiency Alliance (NEEA) Residential Building Stock Assessment (RBSA)
work is available. This work, in conjunction with the 2010 Net-to-Gross study, will help Avista
answer the question of what the current saturation of high-efficiency appliances within this
segment is and whether the program is effectively addressing influencing that saturation.
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Customer and trade-ally interviews may follow depending upon the conclusions of these
analyses.

Data Collected to Support Future EM&V:
Data collected in anticipation of future internal and external EM&V needs include individual
data on the cost, size, and installation date of each energy efficiency equipment or measure
installed. While measures are paid to CAP agencies at a different location, measures will be
tracked by service address where the work was completed.
For process evaluation data results will be collected monthly to show throughput of number of
measures installed, incentives paid, kWh and therm savings claimed and incremental non-
incentive costs. A monthly narrative will be included with the above results to summarize
changes under evaluation and/or changes implemented to program processes, rebate amounts,
savings claims, etc.

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LI Hot Water Heater Efficiency
Residential Sector

Key Individuals and Responsibilities:
Renee Coelho is designated as the current Program Manager. The program coordinator is
Rachelle Humphrey who processes invoices and assists in tracking. Avista contracts with
Community Action Partners (CAP) agencies to deliver limited income programs. CAP agencies
have primary contact responsibilities with customers.
Mike Dillon is the primary technical resource for the program. Lori Hermanson provides data
for monthly tracking reports.
Target Market(s):

This is applicable primarily to existing single-family residential buildings, both ‗stick-built‘ and
manufactured homes. CAP agencies have flexibility to treat new construction or multifamily and
are encouraged to identify strategies to reach multifamily and renters. Key external stakeholders
include homeowners, landlords (and renters), and trade allies. Key internal stakeholders include
rates, contact center CARES reps, accounts payable and community development, especially the
limited income energy assistance programs.

Program Overview:

This program covers the upgrade of water heaters, prescriptively electric water heaters and
natural gas models as well. Limited income energy efficiency equipment upgrades such as water
heating are challenging from a cost-effective perspective. In a regular income situation, the
customer is in need of a water heater and would have to pay at least for a code minimum system.
Therefore the cost of the upgrade is the incremental cost. For limited income, since we pay
100% of the project, the entire system cost needs to be treated in the TRC. For 2011 it has been
clarified that the cost up to code minimum is also an equivalent non-energy benefit for the
customer.

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Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

The above estimates 2010 results based on YTD results through September 2010. For 2011
limited income allocations have increased in both states. As a result 2011 estimates are higher.

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
G Hot Water 40 gallon 2 $3,000 16
G Hot Water 50 Gallon 10 $15,715 110
E HE WH 5 $4,484 1450
Total 17 $23,199 1450 126

Market Segment Overview:

There are technology changes that are likely to influence the savings potential in a positive
manner. New .67 EF tank-type systems without the need for power vents are being produced.
Regionally discussions are underway on potential activities to test and increase market
opportunities.

Implementation Plan:

The key drivers to delivering on the objectives of this program are the direct-installation and zero
cost to fuel customer interest and ongoing work with CAP agencies to deliver these programs
cost-effectively.
Key to success is clear communication to CAP agencies through contracting, face to face
meetings and encouraging open dialogue. For 2011, additional efforts will be made to clearly
communicate invoicing and savings tracking requirements and forms.

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Data Collected to Support Future EM&V:
Data collected in anticipation of future internal and external EM&V needs include individual
data on the cost, size, and installation date of each energy efficiency equipment or measure
installed. While measures are paid to CAP agencies at a different location, measures will be
tracked by service address where the work was completed.
For process evaluation data results will be collected monthly to show throughput of a number of
measures installed, incentives paid, kWh and therm savings claimed and incremental non-
incentive costs. A monthly narrative will be included with the above results to summarize
changes under evaluation and/or changes implemented to program processes, rebate amounts,
savings claims, etc.

137

LI HVAC Efficiency
Residential Sector

Key Individuals and Responsibilities:
Renee Coelho is designated as the current Program Manager. The program coordinator is
Rachelle Humphrey who processes invoices and assists in tracking. Avista contracts with
Community Action Partners (CAP) agencies to deliver limited income programs. CAP agencies
have primary contact responsibilities with customers.
Mike Dillon is the primary technical resource for the program. Lori Hermanson provides data
for monthly tracking reports.
Target Market(s):

This is applicable primarily to existing single-family residential buildings, both ‗stick-built‘ and
manufactured homes. CAP agencies have flexibility to treat new construction or multifamily and
are encouraged to identify strategies to reach multifamily and renters. Key external stakeholders
include homeowners, landlords (and renters), and trade allies. Key internal stakeholders include
rates, contact center CARES reps, accounts payable and community development, especially the
limited income energy assistance programs.

Program Overview:

Typically this program covers situations where the CAP determines that the customer has a very
inefficient natural gas furnace (or potentially heat pump based on forthcoming LI air source heat
pump analysis) and recommends installing a new, high efficient system. The savings is based on
the existing system vs. the proposed system. In some cases, if the customer‘s existing system is
no long functioning or very close to the end of its life, then the savings would be based on the
difference between a new standard code system and the proposed high efficiency model.

138

Prior Year Program Results:

Measure

Annualized
2010 units*

Annualized
2010
incentives*

Annualized
kWh savings

Annualize
d therm
savings

The above estimates 2010 results based on YTD results through September 2010. For 2011
limited income allocations have increased in both states. As a result 2011 estimates are higher.

Budget and Savings:

Measure

Units

Incentive
$

kWh

Therms
Non-
incentive $
G HE Furnace 8 $33,750 1044
E HE AirSource Heat Pump 5 $25,000 16,185
Total 13 $58,750 16,185 1044

Market Segment Overview:

There are is some code activity in Washington, mainly affecting new construction but we may
need to evaluate changes in case they influence this market in the foreseeable future.

Implementation Plan:

The key drivers to delivering on the objectives of this program are the direct-installation and zero
cost to fuel customer interest and ongoing work with CAP agencies to deliver these programs
cost-effectively.
Key to success is clear communication to CAP agencies through contracting, face to face
meetings and encouraging open dialogue. For 2011, additional efforts will be made to clearly
communicate invoicing and savings tracking requirements and forms.

Data Collected to Support Future EM&V:
Data collected in anticipation of future internal and external EM&V needs include individual
data on the cost, size, and installation date of each energy efficiency equipment or measure
139

installed. While measures are paid to CAP agencies at a different location, measures will be
tracked by service address where the work was completed.
For process evaluation data results will be collected monthly to show throughput of number of
measures installed, incentives paid, kWh and therm savings claimed and incremental non-
incentive costs. A monthly narrative will be included with the above results to summarize
changes under evaluation and/or changes implemented to program processes, rebate amounts,
savings claims, etc.

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Appendix H – Avista’s Approach to the Standard Practice Cost-Effectiveness Tests
Jon Powell and Lori Hermanson

The following summary of Avista‘s application of the standard practice cost-effectiveness tests
has been adapted from ―Appendix B‖ in the 2007 Triple E Report to incorporate updates that
have become important to Avista‘s approach since that time.

The analytical evaluation of Avista‘s programs can largely be divided into two general
approaches; the standard practice cost-effectiveness tests and descriptive statistics. Each
approach and each calculation within the two different approaches provide a different
perspective on the status of a program. When viewed as a whole they are intended to provide a
meaningful insight into the program for purposes of making informed decisions for the
management of individual programs as well as the overall portfolio.
The descriptive statistics, such as direct incentive per kWh saved, general costs per kWh saved
and so on are easily understood and calculated. Over the course of designing, implementing
and evaluating these programs these descriptive calculations are made and modified as
necessary to meet the management needs of the portfolio.
The cost-effectiveness tests are a more standardized and, in many ways, a more rigorous
analytical tool. In consideration of their value as a management tool Avista is providing a brief
summary of the calculation, meaning and interpretation of these tests for our implementation
staff. This summary has been periodically modified and redistributed internally and externally
for use in introducing the methodology for calculating and interpreting the standard practice
tests. Additional updates have been incorporated to include issues such as Avista‘s tax
treatment and net-to-gross scenarios.

The four ‗standard practice tests‘ were originally developed in California as a means to
standardizing the cost-effectiveness calculations of demand-side management programs from a
variety of perspectives. The basic four tests include:

Total Resource Cost (TRC) test:
This is a measure of the benefits and costs accruing to the total ratepayer population. It
is not a true societal test in that externalities are not valued however imports of funding
to the customer base (e.g. state or federal tax credits) are considered as offsets to the
customer incremental cost. Avista‘s calculation of the TRC test includes a variant that
excludes tax credits as an offset by request of the Triple-E Board. It is also notable that
Avista‘s avoided cost streams are now incorporating carbon costs. In this sense some
of the variants of the TRC test performed by Avista are taking on more of the
characteristics of a full societal test.

The standard practice tests call for the TRC calculation to be based upon only those
participants who were motivated by the program to adopt the efficiency measure (called
141

―net‖ participation). Avista provides TRC results based upon both ―gross‖ (total
participation) as well as net participation in recognition of regulatory requirements,
Triple-E Board interest and for comparison with other utilities.

For purposes of the TRC test, the cost-benefit analysis is a comparison of the present
value of energy and non-energy benefits vs. the customer incremental cost and non-
incentive utility program cost. Incentive costs are considered to be a transfer within the
ratepayer population and are neither a cost nor benefit.

Utility Cost Test (UCT) or Program Administrator Cost Test (PACT):
This test indicates whether the utility cost of serving all customers goes up or down as a
result of the program. This test is a comparison of the reduction in the cost of providing
energy to the customer in comparison to the total cost (incentive and non-incentive) of
running the DSM program. Neither customer costs nor non-energy benefits are included
within this calculation. The UCT/PACT test generally yields a higher benefit to cost ratio
since the customer incremental cost is usually significantly higher than the utility
incentive and net positive non-energy benefits.

Participant Test:
This is the cost-effectiveness from the perspective of the participating customer. It
includes the retail value of the energy savings and non-energy benefits from the project
vs. the customer project costs. This is a useful measure of potential program adoption
levels in that it provides insight into the ‗traction‘ that a measure may have with
prospective participants (subject to many other considerations).

Rate Impact Measure (RIM) or Non-Participant Test:
This indicates the programs impact upon retail rates. It is a comparison of lost retail
revenue versus the incremental reduction in utility cost. If retail rates exceed the
avoided cost of energy (including demand and other impacts), any DSM program is
mathematically guaranteed to fail this test. Programs that target ‗underpriced‘ energy
products (e.g. system load coincident energy usage) may conceivably pass the RIM test.
The RIM test does not consider the impact of programs upon the customers billing
determinants (energy usage), and is thus only applicable to program non-participants.

A summary of the application of these four standard practice tests can be shown in the
illustrative table below:

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Benefits TRC test UCT test Participant test RIM
Electric avoided cost $4,000,000 $4,000,000 $4,000,000
Gas avoided cost $200,000 $200,000 $200,000
Non-energy benefits $100,000 $100,000
Retail electric savings $5,000,000
Retail gas savings $250,000
TOTAL BENEFITS $4,300,000 $4,200,000 $5,350,000 $4,200,000

Costs
Customer incremental cost1 $3,000,000 $3,000,000
Retail electric savings $5,000,000
Retail gas savings $250,000
Utility non-incentive program cost2 $300,000
Utility incentive program cost3 $2,000,000 -$2,000,000 $2,000,000
TOTAL COSTS $3,300,000 $2,300,000 $1,000,000 $7,250,000

Net benefits $1,000,000 $1,900,000 $4,350,000 ($3,050,000)
Benefit/cost ratio 1.30 1.83 5.35 0.57

1. Customer incremental costs after utility incentives and state and federal tax credits. Avista
includes TRC scenario calculations that do not include state and federal tax credits as offsets to
customer incremental cost.
2. Utility non-incentive costs include labor costs, general program costs, EM&V costs and all other
utility expenditures that are not passed to the customer in the form of direct incentives.
3. Incentives costs incorporate any cost that is appropriate to consider as a transfer to the customer.
This includes direct financial incentives but may also include the cost or value of physical product
provided to the customer in the form of physical products.

All calculations above are performed based upon the present value of the stream of costs or
benefits over the full expected measure life. The discount rate applied to all cost and benefit
streams is the current utility weighted average cost of capital approved in the last rate case and
used in the most recent IRP.

Avista does not presently establish separate baselines assumptions for the remaining life of the
pre-existing equipment vs. the life of the newly installed equipment beyond the remaining life of
the pre-existing equipment (as does the Northwest Power and Conservation Council). Doing so
would require a means of estimating the remaining life of the currently installed equipment. The
Company is searching for approaches that would allow for greater consistency with the NPCC
approach without imposing impractical requirements upon the Company‘s DSM implementation
process.

Avista‘s avoided cost calculation are based upon the most recent recognized IRP process as
modified for the analysis described in Appendix C.

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Only rigorously quantifiable non-energy benefits are incorporated into the benefit-cost analysis.
Other qualitative non-energy benefits are identified and described, to the extent possible, but do
not become part of the cost-effectiveness analysis.