201004012009 DSM Report.pdf

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In compliance with Order No. 28646, Avista Utilties submits an electronic version-of its
Energy Effciency Annual Report (formerly known as the Triple-E Report). If you have
any questions, please contact Bruce Folsom at 509-495-8706 or feel free to contact me at
509-495-4975.
Jean Jewell, Commssion Secretar
State of Idaho
Idaho Public Utilities Commssion
Statehouse
Boise, il 83720
RE:A vista Utilties Annual DSM Report
Dear Ms. Jewell:
Sincerely,
!Linda Gervais/
Manager, Regulatory Policy
509-495-4975
linda. gervais (g avistacorp.com
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Letter to Our Customers
With a more than 30-year history in the creation and management of energy efficiency programs, Avista offers its
customers a variety of ways save energy in their homes and businesses. In 2010, this concept couldn't be more
important, not only to our customers as they work to manage rising energy costs, but also to Avista, as we look to
meet the growing demand for energy while meeting newly enacted legislation requiring increased energy savings.
Our 2009 Energy Effciency Annual Report is designed to give you an
overview of the numerous programs we offer to our customers and the
many factors we consider when offering them. But of course, energy
efficiency is nothing new for us. In fact, its a practice we've been fine-
tuning for a very long time. Within the utilty industr, our programs and
practices are often recognized as leading the pack. While this is a
reputation of which we are very proud, we're continually looking to offer
more to our customers.
Economic impact of energy
effciency has far reach
In 2009 alone, customers in
Avista's service territory
completed more than $62
million in energy effciency
projects. The impact this work
has on local economies is
immense and demonstrates the
support energy effciency work
can provide to area businesses.Beginning in 2006, Avista reexamined our energy effciency programs and
planned an outreach campaign. The campaign was based on research that
indicated perceptual barriers existed that were preventing customers from taking action. Customers identified
three key reasons for not becoming energy efficient First, they felt they were already efficient Second, they felt
becoming effcient was too. expensive. Lastly, they felt there wasn't much they could do.
Launched in 2007, the Every Little Bit campaign was intended to increase awareness about energy effciency and
the many rebates Avista offers, while at the same time, tearing away the perceptual barrers that existed. There is
more we all can do. And when it comes to energy efficiency, every litte bit adds up.
Meet the growing demand.
One hundred years ago, electricity was a luxury. Now, we cannot live
without it Even still, we need to remember to use our resources wisely.
Years ago, Avista provided 100% of our customers' electric usage with
hydropower. Now, that percentage is slipping below 50% as the
communities we serve have continued to grow. More businesses have
come to the area, creating valuable jobs, and an increased need for reliable
power. Our houses are bigger than they used to be, and we have access to a
multitude of electonic product, all requiring power. According to the
2009 Nielsen Ratings, more than half the homes in the United States have
three or more TVs, which is roughly 18% higher than in 2000.
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1
As the increasing demand for energy and its subsequent rising prices continue to move to center stage, Avista
remains committed to providing access to programs that help our customers manage their usage. Because we
know there wil be increasing pressure on energy pricing, it's imperative that we do what we can to minimize the
impact this will have on the monthly bils of our customers.
Energy effciency programs that incent customers for taking steps to improve their homes, combined with energy
effcient behavior, can minimize the impact of rising rates and delay our need to build more generation. New
energy sources are far more expensive than conservng what we have, and while Avista wil inevitably acquire
increased generation sources, energy efficiency continues to be the least cost source of "new" energy available.
With this in mind, we offer numerous online tools such as the Online Home Energy Analyzer, Bil Analyzer and a
carbon calculator, just to name a few. These valuable tools, combined with our energy efficiency program rebates,
give customers the abilty to make a difference in their energy usage.
We want to thank you for your continued partcipation and commitment As you')) see throughout this report,
every little bit really does add up.
Bruce Folsom
Senior Manager, Energy Effciency Programs
Avista
2
Executive Summary
Avista's Energy Effciency Annual Report provides an overview of our 2009 operations and results on our Idaho and
Washington, electric and natural gas, energy effciency programs. Avista has more than 30 years of experience in
offering energy efficiency options for our customers and, as such, appreciates the increasingly important role
energy efficiency programs play in meeting customers' energy needs reliably and responsibly. Energy efficiency
provides a wide array of benefits to our customers and communities, including recognizable economic impact,
operational effciencies and environmental benefits. Our renewed focus has been on increasing awareness and
partcipation in cost-effective energy efficiency programs, resulting in substantially increased benefits. Avista
achieves these results with input and involvement from its External Energy Effciency (Triple-E) Board, which is
comprised of a wide variety of industr and regulatory professionals, and the dedication of experienced, talented
and professional staff
Avista's annual energy savings have increased by 55 percent since 2005, with the number of rebates processed
increasing nearly 300 percent during that same period. As you wil see in the tables below, our 2009 programs
results in 80.8 milion kWh and over 2 milion therms saved. We continue to exceed our Integrated Resource Plan
(IRP) goals by 141% for electric and 128% for natural gas. Total energy efficiency expenditures for the year were
$27.1 milion which is a 35% increase over 2008 expenditures of $20.1 milion.
We continue to review the content and delivery process of our energy effciency programs. Our focus on the
residential side is to increase customer understanding of our programs and how our programs can help them
reduce their bils. We also focus our outreach on non-residential customers through tools such as our "Effciency
Avenue" online, interactive tool that enables customers to quickly view programs applicable to them.
Finally, the electric and natural gas energy efficiency programs during 2009 were cost-effectve. As you wil note in
the tables below, both states were cost-effective with a 2.30 total resource cost (TRC) ratio for electric and 1.27 for
natural gas, as well as, Program Administrator Cost Test (PACT) of 5.96 for electric and 4.20 for natural gas.
Table 3: Electric Cost-effectveness
Segment State TRCratio PACT ratio
Residential ID 2.29 5.74
Residential WA 2.32 5.92
Low Income ID 4.13 3.95
Low Income WA 5.37 5.37
Non-residential ID 2.18 6.24
Non-residential WA 2.18 6.14
ID 2.28 5.84
WA 2.30 6.01
System 2.30 5.96
Table 4: Natural Gas Cost-effectveness
Segment State TRCratio PACT ratio
Residential ID 1.64 4.69
Residential WA 1.68 5.70
Low Income ID 1.42 1.42
Low Income WA 2.54 2.48
Non-residential ID 0.97 3.01
Non-residential WA 0.73 3.23
ID 1.31 3.74
WA 1.25 4.41
System 1.27 4.20
Avista tariff rider and energy efficiency programs continue to be very successful. Over the past 30 years, these
programs have resulted in the reduction of 147 aMW of load, of which 111 aMW remain online, equivalent to 10%
of our system electric load. This is equivalent to two Kettle Falls Generating Stations. Participating customers
benefit through lower usage while all customers (including non-participating and future customers) benefit from
Avista having acquired the lowest cost resource in the form of energy efficiency.
4
Residential
The bulk of the residential customer segment is reached through an offering of prescriptive programs such as high-
effciency appliances, high-efficiency space and water heat, weatherization, and natural gas direct use. For these
tyes of measures, customers are incented to go with a higher effciency option through education and financial
rebates. Some projects such as renewable, distributed generation and multi-family are handled on a more
unique basis.
Programs offered in 2009 within the Residential segment were Energy Star products, home weatherization, Energy
Star homes, shade tree, space and water direct use, water heater effciency, JACO refrigerator/freezer recycling,
geographic saturation, specialty CFL buy-down through PECI, heating & cooling effciency, site-specific multi-
family, and a direct install UCONSS multi-family program.
In 2009, Avista completed a multi-year multi-family direct install program of energy efficiency measures such as
CFLs, low-flow showerheads, high-effciency heating and shell measures. This direct install program was adopted
as a means to increase limited income participation in regular income energy effciency offerings as well as reach a
niche segment (renters) that traditionally have been diffcult to reach.
Avista wil be leveraging the availabilty of ARRA funds during 2010 to promote the acquisition of residential
ENERGY STAR appliances. Though this measure has been determined to be non-cost-effective from a TRC
standpoint, we believe that the opportunity to leverage ARRA funds to provide a foothold for future market
transformation opportnities justify the inclusion of these measures as part of the long-term strategy. Regional
market transformation ventures for similar residential measures have been very successful in the past.
The shade tree program is relatively new to Avista and was designed to offset existing or potential air conditioning
load and be replicable throughout our electric servce territory through reliance on 3rd partes. Currently, Avista is
partered with the Spokane County Conservation District (SCCD) who delivers this program to our customers. The
program offers an $18 incentive per tree to SCCD for installation of qualifying shade trees. SCCD conduct a site-
visit to the customer's home to site the right tree in the right location for energy savings. Sitings are 15-30 feet to
the south of the home and must avoid overhead utility lines. SCCD has selected shade trees that are recommended
for this region and its growing conditions as well as potential of large canopy at maturity. While Avista may
support a larger effort, SCCD has proposed a targeted approach in the city of Spokane with a planned installation of
50 trees in the spring and 50 in the fall.
Also new in 2010 are the American Recovery and Reinvestment Act (ARRA) co-funded residential in-home energy
audits where Avista wil provide energy audits to Avista customers in Spokane County. The audit wil include both
internal and external inspections as well as diagnostic tests including a blower door test to detect outside air
infiltration, pressure pan test for heating system duct leakage and a combustion zone test for natural gas fired
furnaces, water heaters and ovens. Some minor energy efficiency measure wil be installed and an energy effciency
kit with additional energy saving items will be left with the homeowner.
Web banner promoting A vista's In-Home Energy Audit
5
Table 5: Residential Electric Program Results for 2009
Non-inc Savings on ElectricProgramStateRebatesIncentivesUtil Cost Programs
(Number)(Units)$$(kWh)(therms)
Energy Star(I Products 10 2,431 appliances $80,470 $18,810 350,318
Energy Star( Products WA 5,599 appliances $188,605 $29,152 824,188
Home Weatherization 10 733 homes $219,567 $76,061 1,416,557
Home Weatherization WA 1,460 homes $429,599 $95,656 2,704,371
Energy Star(I Homes 10 35 homes $31,250 $13,107 94,029 5,122
Energy Star(I Homes WA 82 homes $72,650 $20,049 203,176 12,411
Shade Tree Program 10 trees $0 $0
Shade Tree Program WA 32 trees $576 $24 672Space & Water Direct Use
Effciency 10 50 conversions $38,250 $19,598 364,987Space & Water Direct Use
Effciency WA 139 conversions $92,150 $33,795 955,448
Water Heater Effciency 10 124 appliances $6,200 $1,991 37,076
Water Heater Efficiency WA 403 appliances $20,150 $4,262 120,497
Jaco Refrigerator/Freezer
Recycling 10 411 appliances $14,820 $83,909 373,875
Jaco Refrigerator/Freezer
Recycling WA 1,137 appliances $28,498 $159,319 1,033,885
Geographic Saturation 10 7,716 bulbs $33,127 $24,525 371,944
Geographic Saturation WA 18,004 bulbs $61,045 $45,914 867,870
PEei Specialty eFL Buy Down 10 45,142 bulbs $88,115 $108,491 1,578,420
PEei Specialty CFL Buy Down WA 140,366 bulbs $169,440 $258.806 4,547,365
UeONS Multi-family 10 95 projects $212,005 $331,082 1,159,055
UeONS Multi-family WA 438 projects $839,333 $750,811 6,610,853
Multi-family 10 4 projec $147,148 ($19,102)791,716 (39,163)
Multi-family WA 5 projects $147,657 $1,459 612,767 (19,506)
Heating & Cooling Effciency
Program 10 1,256 homes $376,650 $139,460 2,412,806 6,296
Heating & Cooling Effciency
Program WA 2,300 homes $647,200 $154,079 4,079,401 9,444
10 57,997 $1,247,602 $797,932 8,950,783 (27,745)
WA 169,965 $2,696,904 $1,553,327 22,560,493 2,349
System 227,962 $3,944,506 $2,351,258 31,511,277 (25,396)
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Table 6: Residential NaturalGas Program Results for 2009
Non-inc Savings on Natural GasProgramStateRebatesIncentivesUti Cost Programs
(Number)(Units)$$(kWh)(therms)
Home Product ID 1,106 appliances $44,650 $6,587 8,250 22,218
Home Products WA 3,221 appliances $131,100 $14,836 24,201 64.882
Home Weatherization ID 1,194 homes $345,796 $101,977 126,955 366,341
Home Weatherization WA 4,055 homes $1,180,920 $261,596 421,949 1,283,794
Energy Star Homes ID homes $0 $0
Energy Star Homes WA 3 homes $1,650 $332 591
Water Heater Effciency ID 160 appliances $20,600 $4,253 5.816
Water Heater Effciency WA 523 appliances $42,800 $6,065 10,799
UCONS Multi-family ID 22 project $95,397 $89,717 17,742
UCONS Multi-family WA 19 projects $98,030 $90,429 17,548
Site-specific Multi-family ID projects $0 $0
Site-specific Multi-family WA 1 projects $489 $92 163
Heating & Cooling
Effciency m 1,032 homes $412,800 $92,820 126,936
Heating & Cooling
Effciency WA 2,209 homes $883,424 $152,465 271,461
ID 3,514 $919,242 $295,353 285,699 388,559
WA 10,031 $2,338,413 $525,815 746,712 1,348,676
System 13,545 $3,257,655 $821,168 1,032,411 1,737,235
For 2010, rebates for tankless water heaters, ground source heat pumps and retro-fit air-conditioning have been
eliminated. The effciency requirement on retro-fit windows has been increased from 0.35 to 0.30 U-factor. In
addition, based on recent impact evaluation, the savings claimed on electric to natural gas conversions were
reduced to 8,655 kWh (this reduction has been reflected in 2009 savings). The impact analysis results and
reduction in savings were applied proportionately to the electric to heat pump rebate. The reduction in savings
resulted in a minor reducton of the incentive level for electrc to natural gas conversions and electric to heat pump
upgrades. Due in part to the impact analysis and to the single digit rebates paid in 2009, the incentives for electric
to natural gas free standing stoves were discontinued. Finally, an incentive was added for high effciency ductess
heat pumps.
7
Low Income
Low income (LI) programs are delivered through several Community Action Partership (CAPs) agencies
throughout our servce territory because these agencies have administrative systems in place to qualitY customers
by income levels. Avista directs funds to these agencies to be distrbuted on our behalf toward energy efficiency
measures. These CAPs use these funds to provide weatherization, high-effciency space and water heat, high-
effciency appliances, direct use space and water on a customized basis for low income households.
Limited income efficiency measures are typically similar to measures offered under residential prescriptive
programs due to cost-effective guidelines. Limited income efficiency measures do include some measures, like
infiltration, that have not been included in the residential programs but are well-suited to a site-specific approach.
A list of approved measures with a high predictabilty of adequate cost-effectiveness is provided to CAP agencies.
Other measures may be submitted for approval if cost-effectiveness is marginal. Health and human safety
measures that are necessary to ensure the habitabilty of the home as well as energy saving investments are
allowed under these programs. CAP agencies complete installation of efficiency measures at no cost to qualified
customers through this Avista funding. Administrative fees are paid to the CAP agencies for delivery of these
programs.
Table 7: Low Income Electc Program Results for 2009
Non-inc Savings on ElecticProgramStatePartcipantsIncentivesUtil Cost Programs
(Number)(Units)$$(kWh)(therms)
Home Products ID appliances $0 $0
Home Products WA 48 appliances $28,691 $3,576 23,517
CFLs for Seniors ID 7,878 bulbs $9,400 $61,856 252,096
CFLs for Seniors WA 18,382 bulbs $10,358 $73,989 588,224
Home Weatherization ID 219 homes $196,452 $51,943 407,273
Home Weatherization WA 181 homes $216,428 $14,673 574,790Space & Water Direct Use
Effciency ID 1 conversions $2,498 $1,393 18,458Space & Water Direct Use
Effciency WA 133 conversions $345,239 $11,718 1,260,655 1,155
Water Heater Effciency ID appliances $0 $0
Water Heater Effciency WA 3 appliances $2,101 ($27)11,064
Heating & Cooling Effciency ID homes $0 $0
Heating & Cooling Effciency WA homes $0 $0
ID 8,098 $208,350 $115,193 677,827
WA 18,747 $602,817 $103,929 2,458,250 1,155
System 26,845 $811,167 $219,121 3,136,077 1,155
8
Table 8: Low Income Natural Gas Program Results for 2009
Non-inc Savings on Natural Gas
Program State Partcipants Incentives Util Cost Programs
(Number)(Units)$$(therms)(kWh)
Energy Star( Products ID -appliances $0 $0
Energy Star(ß Products WA -appliances $0 $0
Home Weatherization ID 191 homes $115,660 $38,208 12,027
Home Weatherization WA 617 homes $485,424 $120,285 82,017 495
Space & Water Direct Use
Effciency ID -conversions $0 $0
Space & Water Direct Use
Effciency WA conversions $0 $0
Water Heater Effciency ID 3 appliances $96 $94 46
Water Heater Effciency WA 5 appliances $7,033 $1,083 49
Heating & Cooling Effciency ID -homes $0 $0
Heating & Cooling Effciency WA 5 homes $16,079 $3,055 1,112
ID
WA 194 $115,757 $38,302 12,073
ID 627 $508,535 $124,424 83,178 495
System 821 $624,292 $162,726 95,251 495
Avista has convened a collaborative to discuss potential improvements in the acquisition level and cost-
effectiveness of our Washington and Idaho limited income portfolio. The planning process for this effort has been
initiated and wil lead towards a September 2010 report to the Washington Utilities and Transportation
Commission (WTC) and the Idaho Public Utilities Commission (lPUC).
While the CAP agencies are always encouraged to provide more comprehensive site-specific data, the impact
analysis recently completed on electric to natural gas conversions wil be applied to LI as well with a reduced
prescriptive savings amount of 8,655 kWh. The Limited Income Total Resource Cost Calculator (LlTRCC) continues
to be applied on marginally cost-effective measures not on the approved list In place of Nort Colombia
Community Action Center (NCCAC), the Opportunities Industrialization Center of Washington (Yakima) wil be
aiding customers in Grant and Adams counties while Rural Resources will be serving Lincoln county customers
previously served by NCCAC. Avista continues to have membership on the Idaho and Washington Weatherization
Policy Advisory Committees that guide allocation and implementation of federal low income weatherization
dollars across the region. As always, Avista continues to consider and evaluate any new measures for the low
income segment
9
Non-Residential
Financial incentives are available for non-residential project with demonstrable electric or natural gas savings and a
simple payback of over a year. Non-residential programs are delivered on a custom (or "site-specific") basis. Over the
years, Avista has been transitioning some of these programs to be standard offers (or "prescriptive") through forms
specifying qualifying measures and associated conditions, similar to the way in which residential programs are offered.
Where appropriate, this transition can provide cost savings in technical resources and time savings for the customer.
Current non-residential offerings include but are not limited to prescriptive clothes washers, prescriptive demand-
controlled ventilation, direct-use water heaters, Energymart Grocer faciltated through PECI, LED traffc signals,
Leadership in Energy and Environmental Design (LEE D) certfication, prescriptive food service equipment, prescriptive
power management for PC networks, premium effciency motors, prescriptive refrigerated warehouse, retro-
commissioning, prescriptive side-stream fitration, prescriptive steam trap replacement/repairs, prescriptive vending
machine controls, prescriptive HVAC and variable, frequency drives (VFDs), rooftop maintenance, prescriptive lighting,
and finally, sight specific or custom measures. Any energy effciency measure not mentioned above would be handled
on a customized, site-specific basis.
Table 9: Non-Residential Electric Program Results for 2009
Non-incProgramStateProjectIncentivesUtil Cost Savings on Electric Programs
(Number)$$(kWh)(therms)
Energy Star(\ Product ID 1 $5 $2 36
Energy Star(\ Products WA 12 $13,635 $1,652 59,927
EnergySmart ID 68 $272,655 $291,145 2,205,899
EnergSmart WA 150 $518,338 $605,249 4,667,470 (104)
Green Motors ID 4 $625 $571 5,861
Green Motors WA 3 $640 $381 4,908
Prescriptive Clothes Washers ID 4 $4,543 $914 19,276
Prescriptive Clothes Washers WA 5 $4,961 $547 19,843
Prescriptive Demand Controlled
Ventilation ID 1 $117 $408 8,600
Prescriptive Demand Controlled
Ventilation WA 2 $305 $55 1,996
Prescriptive Food Service ID 24 $11,290 $4,873 102,749
Prescriptive Food Service WA 67 $34,590 $9,194 333,618
Prescriptive LED Traffic Signals ID 2 $220 $118 2,481
Prescriptive LED Traffc Signals WA 1 $12,900 $6,543 237,400
Prescriptive Lighting ID 183 $263,888 $88,733 2,234,833 (12,425)
Prescriptive Lighting WA 310 $644,279 $148,640 6,597,006 (41,081)
Prescriptive Motors ID 8 $16,520 $6,000 126,492
10
Prescriptive Motors WA 13 $13,070 $2,947 106,931
Prescriptive PC Network Controls ID 2 $200 $90 1,899
Prescriptive PC Network Controls WA 14 $126,400 $22,611 820,417
Prescriptive Refrigerated
Warehouse ID $0 $246
Prescriptive Refrigerated
Warehouse WA 3 $88,550 $27,978 997,993
Prescriptive Side-stream Filtration ID $0 $0
Prescriptive Side-stream Filtration WA 2 $102,400 $12,869 466,942
Renewable ID 1 $828 $196 4,139
Renewable WA 2 $865 $119 4,326
Rooftop Maintenance ID 5 $1,500 $16,345 19,616
Rooftop Maintenance WA 7 $4,175 $30,945 47,317
NEEA80+ID 1,199 $13,457 $12,362 146,861
NEEA80+ID 2,797 $31,399 $22,036 342,675
Site-specific Appliances WA 2 $6,110 $1,394 38,118 (298)
Site-specific Appliances ID 7 $8,015 $2,145 84,817 (239)
Site-specific Compressed Air WA $0 $0
Site-specific Compressed Air ID 3 $127,070 $26,854 974,374
Site-specific HV AC WA 47 $400,975 $100,192 3,505,834 (47,559)
Site-specific HV AC ID 77 $1,002,552 $182,533 6,645,591 (766)
Site-specific Industrial Process WA 6 $29,143 $8,823 186,022
Site-specific Industrial Process ID 1 $332,970 $118,250 4,290,667
Site-specific LEED WA 1 $28,125 $0
Site-specifc LEED ID 6 $761,776 $0
Site-specific Lighting WA 36 $204,465 $68,942 1,606,036 (5,205)
Site-specific Lighting ID 93 $614,885 $117,513 4,633,525 (12,614)
Site-specific Motors WA 2 $9,013 $6,433 135,638
Site-specific Motors ID 21 $190,659 $51,609 1,872,619
11
Site-specific Industrial Process WA 2 $109.731 $34.272 55,160
Site-specific Shell ID 40 $144,848 $43.523 52,116 2,139
Site-specific Shell WA 92 $315,617 $75,754 121.826 2,907
ID 111 $855,040 $236,956 282,309 (38,907)
WA 271 $1,727,025 $384,616 607.841 20.589
System 282 $2,582,065 $621,572 890,150 (18.318)
For 2010, some equipment is being removed from the prescriptive food servce equipment program such as
natural gas water heaters and charbroilers. The retro-commissioning program is currently being reevaluated with
the intent to improve participation. For non-residential prescriptive clothes washers, incentives are being
restructured from a tiered to a flat amount as a result of an annual review of the program incentives and savings.
Finally, the lighting program is currently being reevaluated due to pricing changes in equipment as well as changes
in standards and codes.
Regional
Historically, about 20% of Avista's energy effciency savings have been derived from regional programs provided
by the Nortwest Energy Efficiency Allance (NEEA). Avista is one of 12 utility funding partners and has
committed to continued funding for the 2010-2014 funding cycle. NEEA uses economies of scale and the tools of
market transformation to accelerate the adoption of cost-effective electric-effciency products and practices with
offers such as reducing the cost of compact fluorescent light bulbs (CFLs) to consumers through manufacturer
buy-downs.
Based on NEEA's current business plan, Avista expects to claim only 2.3 aMW's during 2010 based upon the impact
of NEEA ventures and regional allocation of savings. This savings is only slightly above the level of savings claimed
in the past despite the large 2010 budget increase due to the delay between the funding availabilty to NEEA and
the demonstrated acquisition within Avista's servce territory. It is fully expected that an evaluation of Avista's
measured energy savings in comparison to the costs borne by Avista and its customers wil lead to a finding that
the effort is cost-effective within our jurisdiction.
Additionally, Avista will continue to work with NEEA to develop the quantifications necessary to allow for the
estimation of the natural gas therm acquisition resulting from NEEA programs within Avista's servce territory.
This will generally be based upon a conversion of the non-energy benefits associated with natural gas usage
reduction in the major therm-producing programs (e.g. WashWise and residential fenestration) and a regional
allocation of those savings. It is hoped that a consistent means of reporting savings and allocating them throughout
the region can be achieved. This business plan does not include any estimate of therm savings from NEEA
programs due to the uncertinty regarding the likelihood that such estimates can be generated in time to meet
Washington decoupling filing deadlines. In the long-term, about 20% of our acquisition is through NEEA.
Avista is interested in leveraging this and other regional effort in the area of Evaluation, Measurement &
Verification (EM&V).
13
Demand Response
Avista recently complete a two-year demand response pilot within its Idaho service territory to gain experience
with customer acceptance, program design, operational components and cost-effectiveness. The pilot resulted in
several findings: Equipment compatibilty on Avista's system (from the customer's meter) through to Avista's
"back office" operations was tested and improved; customers involved exhibited a strong wilingness to
participate; the Energy Load Management program demonstrated conditions under which customers would accept
load curtailment of home heating, air-conditioning or water heating; and finally, due to low on-peakjoff-peak cost
differences on Avista's system, cost-effectiveness remains challenging under our current power pricing.
The results of Avista's demand response pilot have been incorporated into a larger exploration of the integrated
benefits of demand response within Smart Grid technology in Pullman, Washington. This American Recovery and
Reinvestment Act (ARRA) co-funded project is not funded through the DSM tariff rider, but wil be closely
coordinated with the DSM resource planning functions.
Tariff Rider Exenditures
During 2009, Avista spent more than $27 milion on electric and natural gas energy effciency programs. Of that
amount, 74 percent was returned to customers in the form of rebates on energy effciency measures installed in
their homes or businesses. Avista does not "cap" its energy efficiency efforts based on available revenue;
consequently over $27 milion was spent on energy effciency as opposed to our 2009 annual budget of$25
milion. Program expenditures are hugely driven by incentives and while incentives have increased nearly 300
percent over the past five years, the energy efficiency budget and expenditures have increased as well. Note that
the following tables are on a cash basis.
Table 11: 2009 Electric Energy Effciency Expenditures
Segnent State . Incentives Implementation EM&V Total
Residential lD . $1,577,710 $560,882 $7,621 $2,146,212
Residential WA $2,730,907 $1,117,222 $14,846 $3,862,975
Low Income lD $306,696 $64,278 $0 $370,973
Low Income WA $747,901 ($31,332)$0 $716,569
Non-Residential lD $1,573,996 $361,370 $1,499 $1.936,866
Non-Residential WA $6,055,940 $811,073 $1,744 $6,868,757
Regional lD $0 $311,907 $0 $311,907
Regional WA $0 $695,425 $0 $695,425
General lD $0 $537,057 $32,892 $569,949
General WA $0 $1,016,164 $68,420 $1,084,584
lD $3,458,402 $1,835,494 $42,013 $5,335,909
WA $9,534,748 $3,608,551 $85,010 $13,228,309
System $12,993,150 $5,444,046 $127,022 $18,564,218
70%29%1%100%
14
Table 12: 2009 Natural Gas Energy Effciency Expenditures
Segment State Incentives Implementation EM&V Total
Residential ID $1,091,613 $122,942 $5,856 $1,220,411
Residential WA $2,688,313 $249,468 $11,826 $2,949,607
Low Income ID $130,980 $14,974 $0 $145,954
Low Income WA $599,342 $16,689 $0 $616,032
Non-Residential ID $711,722 $97,026 $1,120 $809,868
Non-Residential WA $1,773,969 $152,482 $2,056 $1,928,508
Regional ID $0 ($171)$0 ($171)
Regional WA $0 ($342)$0 ($342)
General ID $0 $295,840 ($3,373)$292,467
General WA $0 $567,762 ($6,512)$561,251
ID $1,934,315 $530,610 $3,603 $2,468,528
WA $5,061,624 $986,059 $7,371 $6,055,054
System $6,995,939 $1,516,670 $10,973 $8,523,582
82%18%0%100%
Tariff Rider Balances
As of the end of 2009, the tariff rider balance - both Idaho and Washington, electric and natural gas - was an
underfunded $11.9 milion (i.e., dollars expended exceed dollars collected from customers through the tariff
riders). By jurisdiction and fuel, current balances are, as of February 2010: $2,008,944 underfnded for Idaho
electc; $1,238,294 underfnded for Idaho natural gas; $2,653,751 underfunded for Washington electric; and
$3,656,937 underfunded for Washington natural gas. These underfunded balances are largely caused by
incentives, as Avista does not "cap" its energy effciency effort based on available revenue. Avista is committed to
meeting customer demand for energy efficiency in advance of revenue recovery. Avista has also level high public
interest in "green" technologies and heightened customers' awareness due to increasing energy costs to enhance
its acquisition of cost-effective energy effciency. Finally, our Every Litte Bit campaign has resonated with
customers and driven higher partcipation in our programs.
Table 13: Tariff Rider Balances
Idaho Electrc Rider
2009 Beginning Balance (underfunded)
2009 Funding
Total 2009 Funds
$1,364,730
$4,272,693
($2,907,963)
2009 Expenditures ($5,277,039)
2009 Ending Balance (underfnded)$2,369,075
15
Washington Electc Rider
2009 Beginning Balance (underfunded)
2009 Funding plus accrued interest
Total 2009 Funds
$5,919,437
$15,408,111
($9,488,674)
2009 Expenditures ($13,284,265)
2009 Ending Balance (underfunded)$3,795,590
Idaho Natural Gas Rider
2009 Beginning Balance (underfunded)
2009 Funding
Total 2009 Funds
$1,035,530
$1,835,916
($800,386)
2009 Expenditures ($2,427,018)
2009 Ending Balance (underfunded)$1,626,631
Washington Natural Gas Rider
2009 Beginning Balance (underfnded)
2009 Funding plus accrued interest
Total 2009 Funds
$2,798,071
$4.794,603
($1,996,533)
2009 Expenditures ($6,099,484)
2009 Ending Balance (underfundedJ $4,102,951
The underfunded tariff rider balances have been a concern and, in 2009, Avista committed to an annual filng to
"true-up" the amount under/over collection through the tariff riders. During 2009, Avista was successful in
reducing its underfunded Washington electrc tariff rider balance by $2.1 milion and is on track to reduce the
remainder of underfunded balance by year-end 2010. Washington natural gas proved to be more challenging.
During 2009, Avista paid $5.1 milion in incentives alone, which exceeded the entire Washington natural gas
annual budget by more than $1.4 milion. We also experienced the eighth warmest winter in history causing tariff
rider collections to be down by 20 percent Similar challenges are present in Idaho as well. Avista currently has a
Schedule 191 increase pending before the Idaho Public Utilities Commission (lPUC) as part of our annual
tre-up filing. A revised Washington Schedule 191 was approved to be effective April 1,2010.
2010 Budget
Customer response and opportnities for prudent energy effciency resource investments have in recent years
contributed to a tendency to exceed annual budgets established within the business planning process. Avista's
energy effciency budget - Idaho and Washington, electric and natural gas - is $25.3 milion for 2010. Avista is
projecting to achieve its 2010 IRP acquisition target for Washington and Idaho, electic and natural gas, as well as
16
the 2010-2011 1-937 acquisition levels for Washington electric. Another notable increase for 2010 is an additional
$1.4 milion funding contribution to NEEA due to revisions in the allocation of that funding responsibilty
throughout the region for the 2010-2014 funding cycle.
Avista has committed to the IPUC staff to more formerly evaluate energy effciency portfolios, programs and
measures on a net rather than gross basis. Part of the past net-to-gross strategy has been to maintain a high
percentage of customer incentives as a portion of total expenditures. This approach to managing portfolio net-to-
gross risk is being gradually eroded as a necessary consequence of pursuing opportunities for significant increases
in energy acquisition that require increased non-incentive investents. The degree to which these relationships
are changing between 2009 and 2010 as well as the unexpected changes during 2009 are ilustrated in the
following table.
Table 14: Incentives as a Percentage of Total Expenditures
2009 budget 2009 actual 2010 budget
Electric 77%70%63%
Natural gas 86%82%86%
Total 79%74%79%
Cost-Effectveness
The IPUC staff requested increased reporting on the impacts of Federal tax credits on cost-effectiveness. The federal tax
credit is available for 30% of the tQ (not incremental) cost of the 2009 installed measure, up to a maximum of $1,500
per customer. However, the rebate covers multiple Avista programs (high-effciency furnaces, heat pumps, and boilers,
windows, shell and tanklesswa.ter heaters). The assumption was made that some customers wil either fail or choose
not to claim the credit even though they qualify and some customers wil exceed the $1,500 maximum.
Since it is too early to have any actual federal data available on the partcipation in this ta credit or the number of
participants who cap out by the $1,500 limitation, Avista has assumed an allocation of ta benefits over the affected
programs. Avista assumed that the number of customers who chose not to or failed to take the credit or failed to get a
full 30% off of the total cost of the measure due to the $1,500 maximum would be about 80%. Therefore, the maximum
incentive was calculated without the $1,500 constrint and then reduced by 20%.
The maximum ta credit on windows and shell was assumed to be 30% of the customer cost reduced by the 20% above,
leaving a 24% (80% x 30%) cost for purposes of the TRC calculation. Total cost on HVAC relevant to the ta credit is
about $5,000 so using the same 24% factor, the average customer would receive a rebate of $1,200 (natural gas high-
effciency furnace - $1000 as 30% customers install both high-efficiency furnace and heat pump; high-effciency heat
pump $1,000; high-efficiency ductless heat pump - $1,050). This $1,200 actally exceeds the $900 incremental cost,
leading to an oddity of the TRC cost for this measure being a negative $300. Per the Standard Practice Test, this is correct
- the total customer population has a net cost of purchasing this effciency resource of less than zero since the taxpayers
are subsidizing our rate payers by $1,200 per unit Finally, tankless water heaters were assumed to have a $480 (24% of
the average $2,000 cost) reduction on TRC cost per unit
Below are the cost-effectiveness tests provided using the four standard practice tests: total resource cost (TRC),
program administrator cost test (PACT, formerly the utility cost test, or UCT, participant test (PT) and the rate payer
impact test (RIM, formerly, the non-participant test). In addition, Avista provided cost-effectiveness with the impact of
the federal ta credits for both states on the tests affected.
17
Table 15: Residential Electric Cost-effectiveness (with and without ta credits)
Stadard Practice Cost-Benefit Tests w / Federal ta credits
TRC
Pro ram State ratio PACT ratio PT ratio RTratio TRCratio PTratio
Energy Star(j Products ID 0.47 4.06 29.81 0.02 0.47 29.81
Energy StarQ Products WA 0.48 4.34 124.53 0.00 0.48 124.53
Home Weatherization ID 3.46 14.65 25.84 0.17 4.98 42.93
Home Weatherization WA 3.41 15.73 4.72 0.87 5.03 8.00
Energy StarQ Homes ID 1.20 3.15 2.01 0.74 1.20 2.01
Energy Star(j Homes WA 1.24 3.55 1.77 0.82 1.24 1.77
Shade Tree ID n/a n/a n/a n/a n/a n/a
Shade Tree WA 2.30 2.30 n/a 2.30 2.30 n/aSpace & Water Direct Use
Efficiency ID 3.71 13.10 52.33 0.10 3.71 52.33Space & Water Direct Use
Effciency WA 3.99 14.55 6.73 0.77 3.99 6.73
Water Heater Efficiency ID 5.45 5.45 n/a 5.45 5.45 n/a
Water Heater Effciency WA 5.95 5.95 n/a 0.01 5.95 n/a
Jaco Refrigerator/Freezer
Recycling ID 2.43 2.43 n/a 0.01 2.43 n/a
Jaco Refrgerator/Freezer
Recycling WA 3.55 3.55 n/a 0.01 3.55 n/a
Geographic Saturation ID 3.21 3.21 n/a 0.01 3.21 n/a
Geographic Saturation WA 4.04 4.04 n/a 0.01 4.04 n/a
PEei Specialty eFL Buy
Down ID 3.99 3.99 n/a 0.01 3.99 n/a
PEei Specialty eFL Buy
Down WA 5.28 5.28 n/a 0.01 5.28 n/a
UeONS Multi-family ID 2.32 2.96 4.29 1.31 2.32 4.29
UeONS Multi-family WA 2.67 3.65 5.40 1.13 2.67 5.40
Multi-family ID 5.09 7.26 2.97 3.20 5.09 2.97
Multi-family WA 1.98 3.92 2.83 1.04 1.98 2.83
Heating & Cooling
Efficiency ID 1.60 4.48 6.88 0.33 2.23 12.32
18
Heating & Cooling WA 1.55 4.87 3.78 0.53 2.04 5.86Effciency
ID 2.29 5.74 53.16 0.07 2.71 71.48
WA 2.32 5.92 79.38 0.05 2.65 99.83
S stem 2.31 5.86 71.16 0.05 2.67 91.35
Table 16: Low Income Electric Cost-effectveness
Progrm
Home Products
Home Products
CFLs for Seniors
CFLs for Seniors
Home Weatherization
Home Weatherization
Space & Water Direct Use Effciency
Space & Water Direct Use Efficiency
Water Heater Efficiency
Water Heater Effciency
Heating & Cooling Effciency
Heating & Cooling Efficiency
State
ID
WA
ID
WA
ID
WA
ID
WA
ID
WA
ID
WA
Standard Practice Cost-Benefit Tests
TRC ratio PACT ratio PT ratio RT ration/a n/a n/a n/a0.85 0.85 n/a 0.011.76 1.76 n/a 0.013.47 3.47 n/a 0.014.74 4.52 n/a 0.027.25 7.25 n/a 0.02
7.93 7.29 n/a 0.015.01 5.01 n/a 0.02n/a n/a n/a n/a6.43 6.43 n/a 0.02n/a n/a n/a n/an/a n/a n/a n/a
ID
WA
System
4.13
5.37
4.98
3.95
5.37
4.92
n/a
nla
nla
0.02
0.02
0.02
Table 17: Non-Residential Electric Cost-effectveness
Standard Practice Cost-Benefit Tests
Program State TRCratio PACT ratio PTratio RTratio
Energy Star(ß Product ID 0.23 4.21 0.12 1.38
Energy Stal( Products WA 0.25 3.57 0.23 0.88
EnergySmart ID 1.71 4.14 1.28 1.47
EnergySmart WA 2.55 4.14 3.55 1.29
Green Motors ID 2.18 3.81 2.24 1.43
Green Motors WA 2.60 3.72 3.77 1.41
Prescriptive Clothes Washers ID 1.93 2.57 3.23 0.93
19
Prescriptive Clothes Washers WA 1.96 3.12 2.93 0.94
Prescriptive Demand Controlled
Ventilation ID 5.66 6.74 22.55 1.28
Prescriptive Demand Controlled
Ventilation WA 4.04 6.56 5.29 1.53
Prescriptive Food Service ID 2.51 8.41 1.35 2.05
Prescriptive Food Service WA 3.62 10.20 2.74 1.71
Prescriptive LED Traffc Signals ID 12.44 8.24 15.85 1.32
Prescriptive LED Traffc Signals WA 12.35 14.25 26.81 1.14
Prescriptive Lighting ID 2.83 5.75 2.97 1.39
Prescriptive Lighting WA 2.61 7.50 2.45 1.33
Prescriptive Motors ID 3.78 6.65 3.08 1.99
Prescriptive Motors WA 4.25 7.91 3.53 1.96
Prescriptive PC Network Controls ID 1.61 3.84 2.28 0.92
Prescriptive PC Network Controls WA 2.01 2.82 4.93 0.95
Prescriptive Refrigerated Warehouse ID n/a n/a n/a n/a
Prescriptive Refrigerated Warehouse WA 5.03 9.96 5.20 1.63
Prescriptive Side-stream Filtration ID n/a n/a n/a n/a
Prescriptive Side-stream Filtra~on WA 2.61 5.09 1.89 1.82
Renewable ID 0.19 6.60 0.11 1.47
Renewable WA 0.21 7.17 0.14 1.27
Rooftop Maintenance ID 0.17 0.17 n/a 0.14
Rooftop Maintenance WA 0.21 0.21 n/a 0.17
NEEA80+ID 1.87 1.87 n/a 1.87
NEEA80+WA 2.11 2.11 n/a 2.11
Site-specific Appliances ID 2.16 5.74 1.48 1.60
Site-specific Appliances WA 2.88 8.85 2.29 1.53
Site-specific Compressed Air ID n/a n/a n/a n/a
Site-specific Compressed Air WA 3.21 6.00 3.36 1.53
Site-specific HVAC ID 1.95 8.59 0.91 1.98
Site-specific HV AC WA 1.33 7.46 0.71 1.78
Site-specific Industrial Process ID 0.39 4.40 0.21 1.40
Site-specific Industrial Process WA 8.06 12.50 7.86 2.36
20
Site-specific LEED ID nja nja nja nja
Site-specific LEED WA nja nja nja nja
Site-specific Lighting ID 2.88 5.45 2.80 1.54
Site-specific Lighting WA 2.40 5.93 2.26 1.38
Site-specific Motors ID 4.42 9.65 3.37 1.93
Site-specific Motors WA 2.03 9.00 1.21 1.76
Site-specific Shell ID 4.95 10.59 3.21 2.28
Site-specific Shell WA 2.39 10.27 1.56 1.68
ID 2.18 6.24 1.41 1.71
WA 2.18 6.14 1.67 1.53
System 2.18 6.17 1.61 1.58
Table 18: Residential Natural Gas Cost-effectveness (with and without ta credits)
Standard Practice Cost-Benefit Tests wi Federal ta credits
TRC
Pro ram State ratio PACT ratio PTratio RTratio TRCratio PTratio
Home Product ID 0.23 1.57 0.99 0.23 0.23 0.99
Home Product WÀ 0.24 1.63 3.99 0.07 0.24 3.99
Home Weatherization ID 1.92 8.19 2.40 0.93 4.46 9.37
Home Weatherization WA 1.92 8.57 2.63 0.85 4.59 10.49
Energy Star Homes ID nja nja nja nja nja nja
Energy Star Homes WA 2.45 5.98 5.98 2.45
Water Heater
Effciency ID 0.63 2.64 2.22 0.33 1.04 4.55
Water Heater
Effciency WA 0.72 2.34 5.01 0.19 1.08 9.69
UCONS Multi-family ID 2.06 2.06 nja 0.80 2.06 nja
UCONS Multi-family WA 2.00 2.00 nja 0.87 2.00 nja
Site-specific Multi-
family ID nja nja nja nja nja nja
Site-specific Multi-
family WA 5.01 2.71 nja 0.78 5.01 nja
21
Heating & Cooling ID 1.64 2.98 16.79 0.20 (13.28)(11.28)Effciency
Heating & Cooling
Effciency WA 1.67 3.11 58.81 0.06 (11.15)(39.72)
ID 1.64 4.69 4.99 0.46 2.38 126.04
WA 1.68 5.70 10.19 0.22 2.19 83.13
S stem 1.67 5.40 8.91 0.26 2.24 87.24
Table 19: Low Income Natural Gas Cost-effectiveness
Progrm
Energy StarlI Product
Energy Starl Products
Home Weatherization
Home Weatherization
Water Heater Efficiency
Water Heater Effciency
Heating & Cooling Effciency
Heating & Cooling Effciency
State
ID
WA
ID
WA
ID
WA
ID
WA
TRCratio
n/a
n/a
1.42
2.63
2.15
0.06
n/a
0.72
Standard Practice Cost-Benefit Tests
PACT ratio PT ratio RT ration/a n/a n/an/a n/a n/a
1.42 n/a 0.64
2.57 n/a 0.65
2.15 n/a 0.65
0.05 n/a 0.05n/a n/a n/a
0.69 n/a 0.37
ID
WA
System
1.42
2.54
2.32
1.42
2.48
2.27
n/a
n/a
n/a
0.64
0.64
0.64
Table 20: Non-Residential Natural Gas Cost-effectveness
Standard Practice Cost-Benefit Tests
Program State TRCratio PACT ratio PTratio RTratio
Energy StarQi Products ID 0.06 1.18 0.07 0.50
Energy StarQi Products WA 0.50 3.57 0.62 0.74
EnergSmart ID 1.12 4.88 1.12 1.02
EnergySmart WA 0.52 1.49 0.64 0.68
Prescriptive Clothes Washers ID 1.04 1.28 1.48 0.55
Prescriptive Clothes Washers WA 1.04 0.78 1.66 0.45
Prescriptive Demand Controlled
Ventilation ID 1.91 1.70 (21.60)0.50
22
Prescriptive Demand Controlled
Ventilation WA 1.67 3.45 3.02 0.82
Prescriptive Food Service ID 0.40 1.96 0.40 0.77
Prescriptive Food Service WA 1.23 3.49 1.56 0.89
Prescriptive Refrigerated Warehouse ID nja nja nja nja
Prescriptive Refrigerated Warehouse WA 0.41 2.37 0.39 0.82
Prescriptive Steam Trap Replacement ID nja nja nja nja
Prescriptive Steam Trap Replacement WA 1.23 1.63 5.82 0.57
Site-specific Appliances ID 0.71 2.39 0.76 0.85
Site-specific Appliances WA 0.57 1.77 0.74 0.70
Site-specific HV AC ID 1.16 2.90 1.46 0.90
Site-specific HVAC WA 0.57 2.90 0.54 0.90
Site-specific Industrial Process ID 0.28 2.69 0.23 0.91
Site-specific Industrial Process WA 2.97 5.22 4.84 1.11
Site-specific Shell ID 1.83 3.67 2.62 1.01
Site-specific Shell WA 1.13 3.99 1.25 0.95
ID 0.97 3.01 1.06 0,92
WA 0.73 3.23 0.72 0.93
System 0.79 3.15 0.80 0.92
Net-to-Gross Impact on Cost-effectveness
As mentioned above, Avista has tried to maintain a high percentage of funding being returned to customers in
the form of incentives. This is done by through a tiered approach to incentives in Schedules 90 and 190 in an
effort to limit the amount of free-ridership. In addition, the structuring of our tariffs in schedules 90 and 190
have been done in an effort to limit the amount of free-ridership. Avista continues to manage the net-to-gross
issue. Historically, we have reported savings and cost-effectiveness at a gross level. However, as part of
Avista's commitment to provided additional reportng to the IPUC, Avista is providing cost-effectiveness with
three scenarios assuming net cost-effectiveness at 25%, 50% and 75% (i.e. 25% NTG equals a 25% adjustment
to benefits).
23
Table 21: Residential Electric Cost-effectveness (with net-to-gross scenarios applied)
25%NTG 50%NTG 75%NTG
TRC PACTProgramStateratioPACT ratio TRCratio PACT ratio TRC ratio ratio
Energy Star~ Products ID 0.47 3.82 0.46 3.41 0.44 2.59
Energy Star~ Products WA 0.47 4.16 0.47 3.83 0.46 3.10
Home Weatherization ID 3.39 13.49 3.27 11.65 2.93 8.27
Home Weatherization WA 3.37 14.83 3.28 13.31 3.05 10.17
Energy Star(! Homes ID 1.16 2.87 1.08 2.43 0.90 1.67
Energy Star(! Homes WA 1.21 3.31 1.15 2.92 1.01 2.15
Shade Tree ID nja n/a n/a nja nja n/a
Shade Tree WA 2.27 2.27 2.22 2.22 2.06 2.06Space & Water Direct Use
Effciency ID 3.59 11.77 3.38 9.78 2.88 6.50Space & Water Direct Use
Effciency WA 3.89 13.35 3.72 11.47 3.27 8.06
Water Heater Effciency ID 5.05 5.05 4.39 4.39 3.15 3.15
Water Heater Effciency WA 5.62 5.62 5.06 5.06 3.90 3.90Jaco Refrigerator/Freezer
Recycling ID 1.90 1.90 1.32 1.32 0.69 0.69Jaco Refrigerator/Freezer
Recycling WA 2.76 2.76 1.92 1.92 1.00 1.00
Geographic Saturation ID 2.81 2.81 2.25 2.25 1.41 1.41
Geographic Saturation WA 3.53 3.53 2.82 2.82 1.76 1.76PECI Specialty CFL Buy
Down ID 3.37 3.37 2.57 2.57 1.50 1.50PECI Specialty CFL Buy
Down WA 4.40 4.40 3.29 3.29 1.88 1.88
UCONS Multi-family ID 2.01 2.46 1.59 1.84 0.97 1.05
UCONS Multi-family WA 2.41 3.15 2.02 2.48 1.35 1.51
Multi-family ID 5.28 7.64 5.69 8.54 7.42 13.15
Multi-family WA 1.98 3.91 1.97 3.88 1.95 3.81Heating & Cooling
Effciency ID 1.55 4.11 1.46 3.53 1.24 2.48Heating & Cooling
Efficiency WA 1.52 4.57 1.46 4.08 1.31 3.09
ID 2.18 5.08 1.99 4.13 1.57 2.64
WA 2.22 5.28 2.03 4.34 1.63 2.82
System 2.20 5.21 2.02 4.27 1.61 2.76
24
Table 22: Low Income Electric Cost-effectiveness (with net-to-gross scenarios applied)
25%NTG 50%NTG 75%NTGTRCPACTProl!ram State ratio PACT ratio TRCratio PACT ratio TRCratio ratioHome Products ID nla nla nla nla nla nla
Home Products WA 0.82 0.82 0.77 0.77 0.64 0.64
CFLs for Seniors ID 1.36 1.36 0.94 0.94 0.49 0.49
CFLs for Seniors WA 2.68 2.68 1.85 1.85 0.96 0.96
Home Weatherization ID 4.44 4.23 3.92 3.74 2.92 2.78
Home Weatherization WA 7.09 7.09 6.81 6.81 6.09 6.09Space & Water Direct Use
Efficiency ID 7.08 6.51 5.84 5.37 3.82 3.51
Space & Water Direct Use
Effciency WA 4.95 4.95 .4.85 4.85 4.56 4.56
Water Heater Effciency ID nla nla nla nla nla nla
Water Heater Efficiency WA 6.46 6.46 6.51 6.51 6.69 6.69
Heating & Cooling
Efficiency ID nla nla nla nla nla nla
Heating & Cooling
Effciency WA nla nla nla nla nla nla
ID 3.69 3.53 3.04 2.91 1.99 1.91
WA 5.12 5.12 4.68 4.68 3.73 3.73
System 4.65 4.60 4.11 4.06 3.04 3.01
Table 23: Non-Residential Electric Cost-effectveness (with net-to-gross scenarios applied)
25%NTG 50%NTG 75%NTG
TRC PACTProl!ram State ratio PACT ratio TRCratio PACT ratio TRCratio ratio
Energy Star~ Products ID 0.23 3.89 0.23 3.36 0.22 2.39
Energy Star(ß Products WA 0.25 3.44 0.25 3.22 0.24 2.69
EnergySmart ID 1.60 3.54 1.41 2.73 1.04 1.63
EnergySmart WA 2.29 3.51 1.91 2.69 1.28 1.58
Green Motors ID 2.00 3.29 1.71 2.58 1.20 1.57
Green Motors WA 2.39 3.31 2.06 2.71 1.46 1.76
25
Prescriptive Clothes Washers ID 1.88 2.43 1.77 2.20 1.52 1.71
Prescriptive Clothes Washers WA 1.93 3.02 1.88 2.84 1.73 2.40
Prescriptive Demand
Controlled Ventilation ID 4.65 5.35 3.42 3.79 1.91 2.02
Prescriptive Food Service ID 2.44 7.64 2.31 6.46 1.98 4.41
Prescriptive Food Servce WA 3.53 9.54 3.37 8.43 2.96 6.26
Prescriptive LED Traffc
Signals ID 12.07 7.38 11.39 6.11 9.74 4.03
Prescriptive LED Traffc
Signals WA 11.57 12.81 10.28 10.66 7.69 7.09
Prescriptive Lighting ID 2.72 5.30 2.53 4.59 2.08 3.28
Prescriptive Lighting WA 2.55 7.06 2.45 6.32 2.19 4.80
Prescriptive Motors ID 3.60 6.11 3.29 5.25 2.60 3.70
Prescriptive Motors WA 4.11 7.45 3.87 6.68 3.28 5.09
Prescriptive PC Network
Controls ID 1.55 3.48 1.43 2.93 1.16 1.99
Prescriptive PC Network
Controls WA 1.94 2.69 1.82 2.45 1.52 1.94
Prescriptive Refrigerated
Warehouse ID nja nja nja nja n/a n/a
Prescriptive Refrigerated
Warehouse WA 4.84 9.22 4.49 8.03 3.69 5.79
Prescriptive Side-stream
Filtration ID nja nja nja nja n/a n/a
Prescriptive Side-stream
Filtration WA 2.56 4.90 2.47 4.58 2.23 3.81
Renewable ID 0.19 6.20 0.19 5.54 0.19 4.19
Renewable WA 0.21 6.89 0.21 6.40 0.21 5.26
Rooftop Maintenance ID 0.13 0.13 0.09 0.09 0.05 0.05
Rooftop Maintenance WA 0.16 0.16 0.11 0.11 0.06 0.06
NEEA80+ID 1.61 1.61 1.26 1.26 0.77 0.77
NEEA80+WA 1.85 1.85 1.49 1.49 0.94 0.94
Site-specific Appliances ID 2.11 5.40 2.02 4.84 1.79 3.68
Site-specific Appliances WA 2.82 8.27 2.70 7.31 2.39 5.42
Site-specific Compressed Air ID nja nja nja nja nja n/a
26
Site-specific Compressed Air WA 3.11 5.67 2.94 5.11 2.51 3.94
Site-specific HVAC ID 1.92 8.05 1.86 7.16 1.71 5.37
Site-specific HV AC WA 1.32 7.09 1.30 6.46 1.23 5.10
Site-specific Industrial Process ID 0.39 4.09 0.38 3.57 0.37 2.59
Site-specìfic Industrial Process WA 7.68 11.50 7.01 9.91 5.55 7.00
Site-specific LEED ID n/a n/a n/a n/a n/a n/a
Site-specìfic Lighting ID 2.77 5.03 2.58 4.35 2.13 3.10
Site-specific Lighting WA 2.35 5.63 2.26 5.11 2.04 4.01
Site-specific Motors ID 4.15 8.47 3.71 6.81 2.81 4.29
Site-specìfic Motors WA 2.00 8.41 1.94 7.42 1.78 5.49
Site-specific Shell ID 4.74 9.68 4.38 8.26 3.55 5.74
Site-specific Shell WA 2.36 9.78 2.31 8.93 2.16 7.08
ID 2.10 5.64 1.96 4.73 1.64 3.18
WA 2.12 5.71 2.02 5.00 1.77 3.65
SYstem 2.12 5.69 2.01 4.93 1.73 3.52
Table 24: Residential Natural Gas Cost-effectiveness (with net-to-gross scenarios applied)
25%NTG 50% NTG 75%NTG
PACTProl!am State TRCratio PACT ratio TRCratio PACT ratio TRCratio ratio
Home Products ID 0.23 1.51 0.23 1.39 0.22 1.3
Home Products WA 0.24 1.57 0.23 1.48 0.23 1.25
Home
Weatherization ID 1.89 7.61 1.82 6.67 1.65 4.86
Home
Weatherization WA UI9 8.08 1.84 7.25 1.71 5.55
Energy Star Homes ID n/a n/a n/a n/a n/a n/a
Energy Star Homes WA 2.40 5.66 2.30 5.12 2.03 3.98
Water Heater
Effciency ID 0.62 2.50 0.61 2.25 0.56 1.74
Water Heater
Effcìency WA 0.71 2.25 0.69 2.08 0.64 1.71
27
UCONS Multi-family ID 1.77 1.77 1.39 1.39 0.84 0.84
UCONS Multi-family WA 1.73 1.73 1.35 1.35 0.82 0.82
Site-specific Multi-
family ID nja nja nja nja nja nja
Site-specific Multi-
family WA 4.76 2.58 4.33 2.34 3.40 1.84
Heating & Cooling
Effciency ID 1.58 2.81 1.49 2.52 1.26 1.92
Heating & Cooling
Effciency WA 1.63 2.97 1.55 2.71 1.35 2.16
ID 1.60 4.34 1.52 3.78 1.31 2.71
WA 1.65 5.37 1.59 4.82 1.44 3.68
Svstem 1.64 5.06 1.57 4.50 1.41 3.37
Table 25: Low Income Natural Gas Cost-effectveness (with net-to-gross scenarios applied)
2S%NTG SO%NTG 75%NTG
PACTProizramStateTRCratioPACT ratio TRCratio PACT ratio TRCratio ratioEnergy Star(
Product ID nja nja njo nja nja nja
Energy Star~
Product WA njo nja njo nja nja nja
Home
Weatherization ID 1.31 1.31 1.14 1.4 0.82 0.82
Home
Weatherization WA 2.47 2.41 2.20 2.14 1.65 1.61
Water Heater
Effciency ID 1.84 1.84 1.44 1.44 0.86 0.86
Water Heater
Effciency WA 0.05 0.05 0.05 0.05 0.04 0.04
Heating & Cooling
Effciency ID nja nja nja nja nja nja
Heating & Cooling
Effciency WA 0.68 0.66 0.62 0.60 0.49 0.47
ID 1.32 1.32 1.14 1.14 0.82 0.82
WA 2.39 2.33 2.13 2.07 1.60 1.56
System 2.17 2.13 1.93 1.88 1.43 1.40
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Table 26: Non-Residential Natural Gas Cost-effectveness (with net-to-gross scenarios applied)
25%NTG 50%NTG 75%NTG
PACTProlUamStateTRCratioPACT ratio TRCratio PACT ratio TRCratio ratio
Energy StaiV Product ID 0.06 1.12 0.06 1.01 0.06 0.78
Energy StaiV Products WA 0.49 3.16 0.47 2.57 0.43 1.65
EnergySmart ID 1.05 3.87 0.95 2.73 0.73 1.45
EnergySmart WA 0.48 1.16 0.40 0.81 0.28 0.43
Prescriptive Clothes Washers ID 1.02 1.20 0.98 1.07 0.89 0.81
Prescriptive Clothes Washers WA 1.03 0.76 1.00 0.72 0.94 0.62
Prescriptive Demand
Controlled Ventilation ID 1.63 1.47 1.25 1.15 0.74 0.70
Prescriptive Demand
Controlled Ventilation WA 1.61 3.20 1.50 2.80 1.25 2.03
Prescriptive Food Service ID 0.40 1.84 0.39 1.64 0.36 1.24
Prescriptive Food Service WA 1.20 3.20 1.13 2.75 0.98 1.94
Prescriptive Refrgerated
Warehouse ID nja nja nja nja nja nja
Prescriptive Refrigerated
Warehouse WA 0.40 2.24 0.39 2.03 0.37 1.58
Prescriptive Steam Trap
Replacement ID nja nja nja nja nja nja
Prescriptive Steam Trap
Replacement WA 1.12 1.43 0.94 1.15 0.64 0.73
Site-specific Appliances ID 0.70 2.24 0.67 1.98 0.61 1.48
Site-specific Appliances WA 0.56 1.68 0.55 1.53 0.50 1.21
Site-specific HVAC ID 1.13 2.71 1.07 2.39 0.93 1.77
Site-specific HVAC WA 0.56 2.74 0.55 2.49 0.52 1.94
Site-specific Industrial
Process ID 0.28 2.53 0.28 2.25 0.27 1.70
Site-specific Industrial
Process WA 2.84 4.84 2.61 4.22 2.11 3.05
29
Site-specific Shell ID 1.77 3.41 1.64 2.98 1.36 2.17
Site-specific Shell WA 1.11 3.75 1.07 3.34 0.97 2.52
ID 0.95 2.80 0.91 2.47 0.80 1.82
WA 0.72 3.04 0.70 2.73 0.65 2.09
System 0.78 2.96 0.76 2.64 0.69 1.99
Evaluation, Measurement & Verification
For the 2010 budget year Avista is updating, documenting and creating procedures related to the evaluation of
programs in terms of savings, cost effectiveness and program effciency. This effort is to make what we do more
transparent to Avista's stakeholders and provide data that meets the needs of the IPUC's memorandum of
understanding, Washington's 1-937 and natural gas decoupling.
Additionally independent third-part evaluators may be retained to either perform formal evaluations or to review
evaluations performed by Avista personneL. This effort is intended to provide stakeholders reasonable confidence
that evaluation results are robust and independent
Avista's intent is to follow industry best practices. Consequently, we have adopted the Model Energy Effciency
Program Impact Evaluation Guide, by Steven R. Schiler as the method by which programs wil be evaluated. These
documents are well respected and commonly used within the industry. Additional references are:
· International Performance Measurement and Verifcation Protocol (IPMVP).
· ASHREA Guideline 14-2002.
The 2010 budget for EM&Vaètivities is $1.0 milion or about 4% of the DSM budget. Four percent on EM&V is
consistent within the industry. These activities include the following:
· Project Measurement and Verification
-: Site specific measures may be unique enough that they require individual measurement and
verification that is not part of a program evaluation.
· Project Installation Verification
- All site specific non-residential projects are visually inspected as a prerequisite to incentive
payment.
· Program Evaluations
Formal and informal program evaluations are used to verify program savings and to improve the
performance of programs.
· Pilot/Evaluation Progrms
RoofTop Maintenance: Avista is currently running a yearlong study on the potential savings from
proper maintenance of RTUs.
Solar Water Heaters: Avista is in the middle of a several year study of solar domestic hot water
heaters.
· DecoupUng
Independent evaluation of our therm savings will be implemented.
30
Avista was ordered by the WUTC in our recently concluded natural gas decoupling case to convene a collaborative
to examine evaluation, measurement and verification (EM&V). We were asked to submit the results of thiscollaborative to the Commission by September 1, 2010. Avista has already convened this collaborative to discuss
EM&V issues with particular attèntion to meeting the requirements and expectations established in the IPUC staff
MOU, Washington natural gas decoupling and 1-937 discussions.
Implementation of a three-year EM&V plan is described within the 2010 business plan. This wil include meeting
the requirements of the natural gas decoupling pilot for independent external verification of Washington naturalgas acquisition and incorporating a net-to-gross ratio with disaggregation suffcient to be useful in both performing
cost-effectiveness on a net basis and fOf"upportng effort to manage the net-to-gross ratio through changes in
implementation strategies.
Avista continues to leverage external working relationships with groups such as the Regional Technical Forum
(RTF). The RTF is an advisory committee that develops standards to verify and evaluate conservation savings.
Occasionally, the RTF initiates technical studies which have regional interest with economies of scale as opposed to
studies done by an individual utility. Avista is interested in participating in EM&V activities that can be done cost-
effectively at a regional level by the RTF or other such organizations.
DSM Outreach
In the past three years, Avista has increased its promotion of energy effciency through the "Every Little Bit"
campaign (ELB). This multi-media effort was initiated with a general communication campaign to inform
customers of both general efficiency program availabilty as well as providing educational energy-effciency
messages to customers in the first year with the intent of driving increased partcipation. The genesis of this
campaign came from market research which indicated that customers had three concerns about increasing their
energy effciency. These concerns were "it costs too much," "I've done all I can," and "it doesn't make that much
difference." The Every Little Bit theme was chosen as a vehicle to address these concerns and assist in removing
these perceptual barriers~
AVISTA'
Sample of DSM print advertising.
31
The ELB effort is designed to use multiple outreach channels, including website, web banners, print, broadcast,
print material (brochures, signage, etc.), participation in community events and other methods to reach customers.
The intent is to educate and encourage customers to install energy efficient measures with the "call to action" being
a visit to Avista's website (ww,everylittlebit.com or ww.avistautilties.com). During the second and subsequent
years the program was designed to become progressively more specific, including asking customers to download a
rebate form. Avista launched an interactive house, called the "House of Rebates" where customers can scroll room
by room, or alternately, sort by State, to find information about effciency programs and download forms. Decisions
regarding target programs are based upon the program cost-effectiveness and the additional participation that we
believe can be driven by investments in outreach as well as overall portfolio cost-effectiveness. The additional
throughput that can be obtained from our outreach investments also takes into consideration the opportnity to
leverage the growing effciency messages in the general media and parterships with utility and non-utilty
organizations. The Every Little Bit campaign is supported through earned media opportunities through Avista's
Corporate Communications Department
In 2009, we added an "Effciency Avenue" interactive tool (to complement the residential "House of Rebates") on
the website which guides customers to our non-residential rebate programs. Considering the complexity of many
non-residential energy efficiency programs, "Efficiency Avenue" helps customers manage the wealth of programs
by allowing them to tour a business district and browse by industr segment, such as grocery or restaurant, as well
as view case studies about work other businesses have already completed. The Every Little Bit website also
maintains a number oflow-cost / no-cost effciency measures that customers can take to manage their energy use.
The outreach effort is coordinated with ongoing updates to cost effectiveness analysis and integrated into the long-
term program management planning process. Effciency messages that are not associated with individual
programs come out of a collaborative process incorporating input from effciency engineer staff, program
managers and program outreach specialists. The intent is to maintain a fresh and informative appeal to the overall
outreach effort
Research updated in December 2008 indicates that customer awareness is rising. Specifically, advertsing
awareness increased significantly, especially in relation to general conservation, with a jump of 18%, from 11% to
295. Also important is the reduction in those who could not recall a specific message. This was reduced 22%
overall-from 52% unable to recall a specific message in 2007 to only 30% in 2008. Specific program awareness
also increased 9% in relation to weatherization and high effciency equipment This quantifiable information,
combined with overall program partcipation increases, is a strong indicator of the benefits of energy effciency
outreach. Avista is in the process of fielding the third awareness tracking survey, with results expected in
May 2010,
The Every Little Bit campaign will be continued into 2010 as a primary means to reach customers with low-
cost/no-cost opportnities for saving energy as well as increasing customer usage of our effciency rebates, and to
underscore the value of saving energy.
Sample of outdoor advertising.32
RESIDENTIAL REBATE TRACKING
-- -. --- ----- ~
I
!
I
------ -----------------1
4000
3500 ..2006
-02007
--2008
---- --02009-
r ~
2006: 6,569 RebatesPròcessed
0W7990-Rë6ates.Processeil'..
2008: 17,312 Rebatesiproc~s~~d
2009: 28,011 Rebates Processed3000
2500
2000 -------.----------------
1500
1000 --------
._.1
I
----'-' ---_.--------- -.- --I
~-I500 ----.-
o
Ai'" .JilirV'STA
Tracking from 2006-2010 shows the sustained increase in residential rebate program participation.
Regulatory
Effective April 1, 2010, the Washington natural gas Schedule 191 tariff rider wil be increased by 2.27%. An Idaho
natural gas Schedule 191 increase is pending before the IPUC. In addition, general rate cases are in process for
both Washington and Idaho, electric and natural gas, in which Avista is requesting a finding of prudence for
Demand-Side Management (DSM) expenditures incurred in 2008 and 2009.
Avista submitted for approval by the WUTC its 1-937 energy effciency target for Washington electric. Avista chose
to use its portion of the Northwest Power Planning Council's option 1 adjusted to include electric to natural gas
conversions. This results in a 2-year target (2010-2011) of 128,603 mWhs for Washington electric. Avista
continues to work with stakeholders with anticipated approval by the WUTC in April 2010. A finalized EM&V plan
related to this wil be submitted to the WUTC by September 1, 2010.
Avista wil be filing revisions to Schedule 90 in both Idaho and Washington to eliminate incentives granted for
renewable energygeneration. Also included with this filing would be potential changes to the tier structure to
limit the amount of incentives being paid on longer-lived measures so as to enhance portfolio cost-effectiveness.
33