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Home My WebLink About20231228Exhibit 4.pdfIntermountain Gas Company 2023 Conservation Potential Assessment 2023 – 2028 Exhibit No. 4 2023 Conservation Potential Assessment Final Report Prepared for: Intermountain Gas Company Submitted by: Guidehouse Inc. 1375 Walnut St, Suite 100 Boulder, CO 80302 303.728.2500 June 30, 2023 This deliverable was prepared by Guidehouse Inc. for the sole use and benefit of, and pursuant to a client relationship exclusively with Intermountain Gas Company (“Client”). The work presented in this deliverable represents Guidehouse’s professional judgement based on the information available at the time this report was prepared. The information in this deliverable may not be relied upon by anyone other than Client. Accordingly, Guidehouse disclaims any contractual or other responsibility to others based on their access to or use of the deliverable. Final Report Page ii Table of Contents Introduction and Background ...................................................................................... 1 Report Organization .......................................................................................................... 2 1. Market & Baseline Characterization ........................................................................ 3 1.1 Global Inputs ............................................................................................................... 3 1.2 Study Indices ............................................................................................................... 3 1.3 Data Request and Sources ......................................................................................... 4 2. Measure Characterization ......................................................................................... 6 2.1 Energy Efficiency Measure List ................................................................................... 6 2.1.1 Measure Replacement Types ........................................................................... 7 2.1.2 Competition Groups .......................................................................................... 8 2.2 Energy Efficiency Measure Characterization Parameters ............................................ 8 2.3 Energy Efficiency Measure Characterization Approaches and Sources ....................... 9 2.4 Density and Saturation Inputs .................................................................................... 10 3. Energy Efficiency Technical Potential ................................................................... 11 3.1 Approach to Estimating Technical Potential ............................................................... 11 3.1.1 Competition Groups ........................................................................................ 11 3.2 Technical Potential Results ....................................................................................... 11 4. Energy Efficiency Economic Potential .................................................................. 14 4.1 Approach to Estimating Economic Potential .............................................................. 14 4.2 Economic Potential Results ....................................................................................... 14 5. Energy Efficiency Achievable Potential ................................................................ 17 5.1 Approach to Estimating Achievable Potential ............................................................ 17 5.1.1 Energy Efficiency Measure Adoption .............................................................. 17 5.1.2 Calibration ...................................................................................................... 18 5.1.3 Scenarios ........................................................................................................ 18 5.2 Achievable Potential Results ..................................................................................... 19 5.3 Comparison of Historical Achievements to Current and Past Potential Study Achievable Potential Results .................................................................................. 24 Appendix A. Market Characterization ...................................................................... A-1 A.1 Data Request and Sources ...................................................................................... A-1 A.2 Global Inputs Data ................................................................................................... A-2 Appendix B. Measure Characterization ................................................................... B-1 B.1 Residential Measure List .......................................................................................... B-1 B.2 Commercial Measure List ........................................................................................ B-3 B.3 Measure Replacement Types and Definitions .......................................................... B-6 Final Report Page iii B.4 Key Measure Characterization Parameters .............................................................. B-7 B.5 Measure Data Sources ............................................................................................ B-8 B.6 Density and Saturation Data Sources ...................................................................... B-9 Appendix C. Energy Efficiency Technical Potential ............................................... C-1 C.1 Approach to Technical Potential and Replacement Types ....................................... C-1 C.2 Competition Groups ................................................................................................. C-2 C.3 Technical Potential Results ...................................................................................... C-3 Appendix D. Energy Efficiency Economic Potential .............................................. D-1 D.1 Economic Potential UCT .......................................................................................... D-1 D.2 Economic Potential Results ..................................................................................... D-1 Appendix E. Energy Efficiency Achievable Potential ..............................................E-4 E.1 Approach to Estimating Achievable Potential ........................................................... E-4 E.2 Achievable Potential Savings – Business as Usual Scenario ................................. E-11 E.3 Achievable Potential Savings – Scenario Results .................................................. E-19 List of Tables Table 2-1. Measure List Summary ............................................................................................ 6 Table 5-1. Gas Cumulative Net Achievable Potential and Budgets for All Scenarios ............... 22 Table 5-2. Key Measure-Level Examples of Gas Savings and Incentives by Scenario (Cumulative Net in 2044) ........................................................................................................ 24 Table A-1. Data Request and Sources ................................................................................... A-1 Table A-2. Commercial Gas Sales - Zone 5 (Therms) ............................................................ A-2 Table A-3. Commercial Gas Sales - Zone 6 (Therms) ............................................................ A-3 Table A-4. Residential Gas Sales - Zone 5 and Zone 6 (Therms) .......................................... A-4 Table A-5. Commercial Stock - Zone 5 (1,000 sq. ft. floor area) ............................................. A-5 Table A-6. Commercial Stock - Zone 6 (1,000 sq. ft. floor area) ............................................. A-6 Table A-7. Residential Stock - Zone 5 and Zone 6 (Households) ........................................... A-7 Table A-8. Residential and Commercial Retail Rates ($) ........................................................ A-8 Table A-9. Avoided Costs ($) ................................................................................................. A-9 Table B-1. Residential End Uses and Measures .................................................................... B-1 Table B-2. Commercial End Uses and Measures ................................................................... B-3 Table B-3. Measure Replacement Types and Definitions ....................................................... B-6 Table B-4. Key Measure Characterization Parameters ........................................................... B-7 Table B-5. Measure Data Sources ......................................................................................... B-8 Table B-6. Density and Saturation Data Sources ................................................................... B-9 Table E-1. Total Natural Gas Cumulative Net Achievable Potential as a Percentage of Natural Gas Sales ............................................................................................................................ E-12 Table E-2. Cumulative Natural Gas Net Achievable Potential by Sector (MMTherms/year).. E-14 Table E-3. Estimated Program Funding, Business as Usual Scenario (Thousands $) .......... E-19 Final Report Page iv List of Figures Figure 3-1. Gas Energy (MMTherms/year) Technical Savings Potential by Sector .................. 12 Figure 3-2. Natural Gas Demand Technical Savings Potential by Sector as a Percent of Sector Sales (%) ................................................................................................................................ 13 Figure 4-1. Natural Gas (MMTherms/year) Economic Potential Savings by Sector ................. 15 Figure 4-2. Natural Gas Economic Potential by Sector as a Percentage of Sector Consumption (%) .......................................................................................................................................... 16 Figure 5-2. Natural Gas Energy (MMTherms/year) Cumulative Net Achievable Potential by Sector (Business as Usual) ..................................................................................................... 20 Figure 5-3. Natural Gas Energy (MMTherms/year) Cumulative Net Achievable Potential by Sector (Unconstrained Budget) ............................................................................................... 21 Figure 5-4. Natural Gas Energy (MMTherms/year) Cumulative Net Achievable Potential by Sector (Medium Adoption) ...................................................................................................... 21 Figure 5-5. Natural Gas Energy (MMTherms/year) Cumulative Net Achievable Potential by Sector (High Incentive, High Adoption) ................................................................................... 22 Figure 5-7. Natural Gas Historic Accomplishments Compared to Past and Current Study Achievable Potential Low Scenario Results (Annual Net Gas Savings MMTherms) ................ 26 Figure 5-8. Cumulative Net Historic and Forecast Natural Gas Savings by Study as a Percent of Economic Potential ................................................................................................................. 26 Figure C-1. Natural Gas Technical Potential by Customer Segment (MMTherms/year) .........C-4 Figure C-2. Top 40 Measures - Natural Gas Technical Potential in 2024 (MMTherms/year) ..C-5 Figure D-1. Natural Gas Economic Potential by Customer Segment (MMTherms/year) .........D-2 Figure D-2. Top 40 Measures - Natural Gas Economic Potential in 2024 (MMTherms/year) ..D-3 Figure E-1. Payback Acceptance Curve for Residential Sector .............................................. E-5 Figure E-2. Payback Acceptance Curve for Commercial Sector ............................................. E-5 Figure E-3. Stock/Flow Diagram of Diffusion Model for Retrofits ............................................ E-7 Figure E-4.Stock/Flow Diagram of Diffusion Model for ROB Measures .................................. E-8 Figure E-5. Natural Gas (MMTherms) Historic and Modeled Achievable Savings for Residential Sector .................................................................................................................................. E-10 Figure E-6. Natural Gas (MMTherms) Historic and Modeled Achievable Savings for Commercial Sector .................................................................................................................................. E-11 Figure E-7.Total Natural Gas Cumulative Net Achievable Potential as a Percentage of Forecast Natural Gas Sales ................................................................................................................ E-12 Figure E-8. Cumulative Natural Gas Net Achievable Potential by Sector (MMTherms/year) E-14 Figure E-9. Cumulative Net Natural Gas Achievable Potential by Residential Customer Segment (MMTherms/year) ................................................................................................................ E-15 Figure E-10. Cumulative Net Natural Gas Achievable Potential by Commercial Customer Segment (MMTherms/year) ................................................................................................. E-16 Figure E-11. Cumulative Net Natural Gas Achievable Potential by Residential Sector End Use (MMTherms/year) ................................................................................................................ E-16 Figure E-12. Cumulative Net Natural Gas Achievable Potential by Commercial Sector End Use (MMTherms/year) ................................................................................................................ E-17 Figure E-13. Top 20 Energy Efficiency Measures for Natural Net Achievable Potential by 2024 (MMTherms/year) ................................................................................................................ E-18 Figure E-14. Cumulative Net Natural Gas Energy Achievable Savings by Scenario ............. E-21 Figure E-15. Incremental Net Natural Gas Energy Achievable Savings by Scenario ............ E-21 Final Report Page v Figure E-16. Residential Natural Cumulative Gas Energy Results by Scenario (MMTherms/year) ............................................................................................................................................ E-22 Figure E-17. Commercial Natural Gas Cumulative Energy Results by Scenario (MMTherms/year) ................................................................................................................ E-22 Final Report Page 1 Introduction and Background Intermountain Gas Company (IGC) retained Guidehouse to conduct a Conservation Potential Assessment (CPA) with the primary objective of developing an estimate of the potential for gas energy efficiency for IGC’s southern Idaho service territory over a 20-year time horizon from 2024 to 2044. Through this Study, Guidehouse leveraged IGC data and secondary research and data sources to characterize customer and measure data to inform the modeling inputs for energy efficiency potential. Guidehouse modeled the technical, economic, and achievable potential for energy efficiency using its proprietary DSMSim model. For energy efficiency, Guidehouse calculated net achievable gas energy efficiency potential for four scenarios, listed below. Further detail and discussion regarding the 2023 CPA scenarios can be found in Section 5.1.3 sand Appendix E. •Business as Usual: The reflection of IGC’s historical data and secondary data collected on the market for energy efficient technologies in IGC’s service territory. •Unconstrained Historic Budget: This scenario is consistent with Business as Usual but with the removal of modeled portfolio budget constraints reflecting the limited overall historic period with actual in-market EE programs. •Medium Adoption: Reflects the Unconstrained Historic Adoption model with the addition of model parameter assumptions designed to model higher overall customer awareness of energy efficiency and an increase in the willingness of customers to adopt efficient technologies. •High Incentive, High Adoption scenario: Builds on the Medium Adoption scenario, with increases in measure incentives and further heightened market adoption-related assumptions. Throughout this Study, Guidehouse sought regular input and feedback from IGC, who provided important market knowledge and industry expertise critical to producing a robust final set of outcomes. Table A summarizes the various elements of the project scope. Table A. Summary of Project Scope Element Dimensions Forms of Energy Natural Gas Type of Potential Technical, Economic, Achievable Scenarios (4) Business as Usual, Unconstrained Historic Budget, Medium Adoption, High Incentive/High Adoption Sectors Residential, Commercial Climate Two Weather Zones DOE CZ 5 and CZ6 Time Horizon 2024-2044 (20 years) Source: Guidehouse analysis 2023 Final Report Page 2 Report Organization The report is organized as follows: •Section 1 provides an overview of Market & Baseline Characterization developed and used in the Study. This section provides the breakdown of customers by sector and segment. •Section 2 discusses the Energy Efficiency Measure Characterization, including key parameters. •Section 3 presents the Energy Efficiency Technical Potential Forecast for energy efficiency measures, including a summary of results by sector and end use. •Section 4 provides the Energy Efficiency Economic Potential Results for energy efficiency measures, including a summary of results by sector and end use. •Section 5 presents the Energy Efficiency Achievable Potential Results by Scenario for energy efficiency measures, including a summary of results by sector, end use, customer segment, and measure, as well as cost-effectiveness test results. The report also includes the following five appendices and two attachments: •Appendix A. Market Characterization •Appendix B. Measure Characterization •Appendix C. Energy Efficiency Technical Potential •Appendix D. Energy Efficiency Economic Potential •Appendix E. Energy Efficiency Achievable Potential •Attachment A – Results Figures and Tables •Attachment B – Measures Inputs and Database Final Report Page 3 1. Market & Baseline Characterization This section outlines Guidehouse’s approach and summarizes the outcomes of the baseline and market characterization tasks conducted for the Intermountain Gas Company’s (IGC) 2023 Conservation Potential Assessment (CPA). 1.1 Global Inputs Baseline and market characterization refers to the collection and analyzing of information pertaining to the size and characteristics of the customer population within IGC’s service territory. Market characterization forms the basis for scaling up energy efficiency potential from an individual measure level to an aggregate utility-wide level. This information is also referred to as the Global Inputs. Guidehouse developed the following global inputs for the 2023 CPA: • Building Stock • Gas Sales • Avoided Costs • Retail Rates • Inflation Rate • Discount Rate • Building Stock Demolition Rate Guidehouse developed these market characterization inputs in parallel with measure characterization (see Section 2), as both are key inputs to the calculation of technical and economic potential. 1.2 Study Indices A key aspect of any potential assessment is defining the study breadth and scope, level of segmentation, and parameters for variation within the inputs, modeling, and results, which Guidehouse collectively refers to as the Study Indices. Guidehouse developed the study indices to meet the needs of the CPA in consultation with IGC staff. For the development of global inputs, the study indices dictate the level of granularity at which the global inputs can or should be developed. The remainder of this section summarizes the key study indices that are relevant to the development of global inputs. Service Territory and Climate Zone In line with the 2019 CPA, Guidehouse considered two climate zones within the IGC service territory: • Zone 5 • Zone 6 Final Report Page 4 These climate zones are derived from the U.S. Department of Energy (DOE) using climate zone designations from the International Energy Conservation Code (IECC).1 Guidehouse developed the Building Stock and Gas Sales global inputs with this climate zone differentiation. This will allow savings for measures that have different impacts by climate zone to be appropriately scaled to the correct proportion of buildings and gas sales within the two climate zones. For measures that are not weather sensitive, impacts will be scaled to the entire service territory. As such, the global inputs contain three combinations of service territory and climate zone: • All • IGC | Zone 5 • IGC | Zone 6 Sector The scope of the 2023 CPA covers two sectors: • Residential • Commercial Guidehouse differentiated the Building Stock, Gas Sales, and Retail Rate global inputs by these two sectors. Customer Segment Within each sector, the customer segment index provides building type granularity, which are used for the Building Stock and Gas Sales global inputs. The 2023 CPA contains the following customer segments (11 in total): • Commercial (9): Education, Food Service, Healthcare, Light/Converted, Lodging, Manufacturing/Industrial, Office, Other, Retail • Residential (2): Single Family, Multi-Family At the request of IGC staff, Guidehouse added the Light/Converted customer segment within the Commercial sector to represent zoned commercial customers that exist in buildings that were originally residential homes. 1.3 Data Request and Sources To perform the baseline and market characterization, Guidehouse requested several data items from IGC in a formal data request. Table A-1 in Appendix A contains a detailed summary of each data source and its components. The items Guidehouse requested from IGC are listed below: • Customer Stock Data • Gas Sales Data 1 For more information on DOE Climate Regions, see the following link: https://www.energy.gov/sites/prod/files/2015/10/f27/ba_climate_region_guide_7.3.pdf Final Report Page 5 • Retail Rate Data • Avoided Cost Data • IGC Discount Rate(s) • IGC Inflation Rate(s) Guidehouse developed the data request with an expectation that not all data could be provided at the desired level of detail. To supplement the data that IGC provided, Guidehouse used the following secondary sources: • National Renewable Energy Laboratory (NREL) ComStock:2 ComStock is a U.S. DOE model of the U.S. commercial building stock, developed and maintained by NREL. ComStock provides access to a vast ecosystem of reliable and granular data for commercial buildings across the country. • NREL ResStock:3 ResStock is a similar DOE analysis tool for residential premises across the country. • Market Characterization Memo from the 2019 IGC CPA In Appendix A, Table A-2 through Table A-9 show market characterization results for all global inputs and study indices. 2 Available at: https://comstock.nrel.gov/. 3 Available at: https://resstock.nrel.gov/. Final Report Page 6 2. Measure Characterization This section outlines Guidehouse’s approach to the measure characterization task conducted for the IGC 2023 CPA. Guidehouse characterized energy efficiency measures applicable to IGC’s residential and commercial sectors. The team prioritized measures for inclusion based on their likelihood to have high savings in IGC’s territories and their current market availability and cost-effectiveness. IGC’s leadership team reviewed the list in detail and provided feedback that was incorporated to finalize the measure list for this Study. 2.1 Energy Efficiency Measure List The first step in the measure characterization process was to create a vetted measure list defining each of the individual measures to be included and characterized in the CPA. To focus the efforts of the Study on the measures most likely to contribute achievable potential, Guidehouse and IGC developed a measure list based on IGC’s experience managing portfolios and Guidehouse’s experience estimating potential, while considering Idaho-specific characteristics. Table 2-1 summarizes the final number of measures that were characterized in the CPA by sector and end use. In total, Guidehouse characterized 31 measures for the residential sector and 55 measures for the commercial sector. The full residential (Table B-1) and commercial (Table B-2) measure lists can be found in Appendix B. Table 2-1. Measure List Summary Sector End Use Unique Measure Count Measure ID Count* Example Measures† Residential Appliance 4 6 Clothes Washer, Clothes Dryer, Pool Heater Behavioral 1 1 Home Energy Report Envelope 6 12 Air Sealing, Attic/Roof Insulation, Windows Hot Water 6 10 Storage Water Heater, Tankless Water Heater, Faucet Aerator HVAC 14 17 Furnace, Boiler, Tune-Up, Duct Insulation, Thermostat Total 31 46 Commercial Appliance 4 7 Clothes Washer and Dryer, Ozone Laundry Behavioral 1 1 Building Operator Certification Envelope 5 9 Dock Door Sealing, Wall Insulation, Windows Hot Water 10 15 Storage Water Heater, Tankless Water Heater, Indirect Water Heater, Pre-Rinse Spray Valve HVAC 23 30 Furnace, Boiler, Energy Management System Kitchen 8 8 Fryer, Oven, Steamer Final Report Page 7 Process 4 4 Process Boiler, Grain Dryer Total 55 74 * The Measure ID Count exceeds the Unique Measure Count to the extent that certain measures have multiple IDs to differentiate RET Only and NEW Only replacement types in the model. For example, the Windows measure counts as one unique measure, but has two measure IDs for both RET and NEW replacement types. † Measures listed here are provided for example. This is not a full list. The full measure list can be found in Appendix B. Source: Guidehouse To develop the final measure list, Guidehouse utilized the following sources and considerations: • Existing energy efficiency measures offered by IGC in its programs • Measures that are not currently offered by IGC, but which were analyzed in the previous iteration of the CPA in 2019 • Input from IGC staff on additional measures of interest • Other measures commonly offered in other jurisdictions or commonly included in potential studies 2.1.1 Measure Replacement Types In the measure list, each measure is assigned one of several replacement types. Depending on the measure replacement type, the same measure may be treated differently when calculating cost-effectiveness, calculating energy savings relative to the baseline, and modeling consumer decisions and market adoption. See Table B-3 in Appendix B for complete definitions. The types of measure replacement types are outlined below: • New Construction (NEW) • Replace on Burnout (ROB) – also known as Normal Replacement (NR) • Retrofit (RET) – add-on equipment or accelerated replacement The Guidehouse potential model allows individual measures to have one of the following replacement type values in the measure characterization: • ROB and NEW: indicating a measure that is applicable both in a normal replacement scenario and a new construction scenario • RET Only: a measure that is applicable to a retrofit situation (could be either add-on equipment or accelerated replacement) • NEW Only: a measure that is applicable to new construction Several measures that Guidehouse characterized for the IGC CPA were identified as applicable to both a RET scenario and a NEW scenario. Given the allowable values listed above, these measures were characterized twice using measure codes that differentiate between the RET case and the NEW case. Final Report Page 8 2.1.2 Competition Groups Most measures in the measure list represent a standalone single efficient technology, relative to a defined baseline technology, which a customer could adopt. However, a handful of measures are not standalone but are related to another measure within a competition group. A competition group consists of two or more efficiency levels of the same technology relative to a common baseline. Competition groups are named as such because technologies within them compete for installations; only one of the measures within the group can be installed at a time because they represent the same fundamental equipment or consumption. The final measure list includes the following competition groups and efficiency levels: • Commercial Furnaces: 95% thermal efficiency furnace, gas heat pump • Commercial Thermostats: programmable thermostat, Wi-Fi thermostat • Commercial Water Heaters: efficient storage water heater, tankless water heater • Commercial Indirect Water Heaters: mid-efficiency, high-efficiency • Residential Furnaces: 95 AFUE, 98 AFUE, gas heat pump • Residential Thermostats: programmable thermostat, Wi-Fi thermostat • Residential Water Heaters: efficient storage water heater, tankless water heater 2.2 Energy Efficiency Measure Characterization Parameters After specification of the measure list, the measure characterization process includes specifying various characterization parameters for each technology necessary to calculate potential. Some parameters are defined in the measure list, while others are determined during the characterization process from various data sources. Table B-4 in Appendix B summarizes the key measure characterization parameters that the Guidehouse team defined for each characterized measure. All measure parameters are listed below: • Measure Description • Measure Replacement Type • Measure Applicability • Unit Basis • Energy Consumption and Savings • Costs • Measure Density and Saturation • Measure Lifetime • Net-to-Gross Ratio (NTGR) As described in Appendix B, Guidehouse used default NTGR assumptions of 1.0 for all measures given limited data available to inform specific NTGR assumptions that would be applicable to IGC Service Territory. Final Report Page 9 2.3 Energy Efficiency Measure Characterization Approaches and Sources To characterize the key Unit Basis, Energy Consumption and Savings, and Cost inputs for each measure, Guidehouse utilized a range of Technical Reference Manuals (TRM) from other state jurisdictions.4 In general, TRMs across all jurisdictions are maintained by regulatory bodies and organizations comprised of stakeholders and expert advisors who provide collaborative peer review of measure assumptions on a recurring basis. Guidehouse determined which TRMs would be most relevant to use for the IGC CPA based on the following criteria: • Climate Zones. Guidehouse prioritized TRMs from states with similar IECC climate zones as Idaho for weather-sensitive measures. The Michigan, Iowa, Illinois, and New York TRMs were prioritized by this criterion. • Codes and Standards. Guidehouse prioritized the use of TRMs from states like Michigan, Iowa, Illinois, and Minnesota that – like Idaho – do not set appliance standards that go beyond Federal code requirements. Conversely, Guidehouse was careful to avoid using the California, Massachusetts, and New York TRMs for measures where these states have adopted state-level appliance standards that go beyond Federal code requirements, resulting in differing baseline efficiency levels compared to Idaho.5 • Data Format. Given the timeline and budget constraints for measure characterization, Guidehouse prioritized TRMs which contain deemed values (pre-calculated values using validated common measure input parameters for various measure characteristics), rather than those which contain only engineering algorithms and equations. The Michigan and California TRMs were prioritized by this criterion. An advantage to using TRMs with deemed values is the ability to incorporate values for technical measure parameters and variables that have been vetted and approved by the regulatory bodies and experts who maintain such TRMs. This ultimately creates less reliance on Guidehouse’s own assumptions for key measure parameters, and instead leverages measure parameter values whose embedded assumptions can be found in publicly available sources and proceedings, which helps to increase transparency. In Appendix B, Table B-5 lists the key TRMs data sources that were used to develop measure energy and cost inputs and their frequency of use. Where a TRM was used to characterize weather-sensitive measures, Table B-5 also shows which climate regions in each TRM were used for the IGC CPA Climate Zones (Zone 5 and Zone 6). Appendix B also provides citations for each of the TRMs used, which can be referenced to find the TRMs themselves as well as details about specific measure assumptions and supporting documentation such as workpapers, engineering studies, and materials from technical stakeholder working groups. In addition to TRMs, Guidehouse utilized findings from existing IGC evaluation, measurement, and verification (EM&V) studies to inform measure assumptions where available. It is a best practice in potential studies to account for realized program results and EM&V findings in the characterization of measure savings. Most notably, Guidehouse aligned residential furnace 4 Guidehouse and IGC staff also reviewed resources available from the Northwest Power and Conservation Council Regional Technical Forum (RTF) but decided to prioritize the use of TRMs from other states because of limited gas measures and because IGC is not a member of the RTF. 5 The American Council for an Energy Efficient Economy (ACEEE) maintains a database of state-level appliance standards which go beyond Federal standards, available at: https://database.aceee.org/state/appliance-standards-summary Final Report Page 10 measure therm savings with the findings from the 2020 Furnace Impact Evaluation billing analysis provided by IGC. 2.4 Density and Saturation Inputs Guidehouse developed density and saturation inputs defined as: • Density represents the average prevalence of a particular measure among the building stock, or the number of measure units per building. Density for a measure has units of measure Unit Basis6 divided by sector Scaling Basis.7 The potential model uses density information to determine the number of applicable measure units within the total IGC service territory to scale up per unit measure impacts to an aggregate service-territory level. Within a competition group, the density is the same for all measures in the group and represents the total measure prevalence regardless of efficiency level. Measures within a competition group share the same density under the assumption that lower efficiency technologies are replaced on an equivalent unit basis with higher efficiency technologies. • Saturation represents the percentage of a specific measure that is efficient or not. Saturation is divided up into baseline saturation and efficient saturation. The baseline saturation is the percentage of a measure’s total population that is the base model, whereas the efficient saturation is the percentage of a measure’s total population that is the efficient model. Guidehouse referenced a variety of secondary sources which contain data about the prevalence of measures in the building stock or the distribution of technology efficiency levels. Where applicable, Guidehouse also referenced the density and saturation assumptions that were documented in the 2019 IGC CPA Market Characterization Memorandum. See Table B-6 in Appendix B for a complete list of sources used to find density and saturation inputs. 6 Unit Basis: the units in which a measure is characterized (e.g., per sq. ft, per kBTU/h, per appliance) 7 Scaling Basis: the units from the global inputs used to characterize the population (e.g., households for residential, 1000 sq. ft. floor area for commercial). Final Report Page 11 3. Energy Efficiency Technical Potential This Study defines technical potential as the total energy savings available, assuming that all installed measures being considered can immediately be replaced with the most efficient measure or technology—wherever technically feasible—regardless of the cost, market acceptance, or whether existing equipment has failed and must be replaced. 3.1 Approach to Estimating Technical Potential Guidehouse used its DSMSim model to estimate the technical potential for demand-side resources in IGC’s service territory. DSMSim is a bottom-up technology diffusion and stock tracking model implemented using a systems dynamics framework.8 Guidehouse calculates the technical potential of each measure relative to a baseline which is defined, where relevant, by current codes and standards. Any known planned changes to codes and standards may be used to adjust measure baselines in future forecast years. The calculation of technical potential in this Study differs depending on the assumed measure replacement type. Technical potential is calculated on a per-measure basis and includes estimates of savings per unit, measure density (e.g., quantity of measures per building), and total building stock in the service territory. The Study accounts for three replacement types, where potential from retrofit and ROB measures are calculated differently from potential for new measures. The formulas used to calculate technical potential by replacement type are shown in Appendix C.1. 3.1.1 Competition Groups Guidehouse’s modeling approach recognizes that some efficient technologies will compete in the calculation of potential for a given stock unit. The Study defines competition as an efficient measure competing for the same installation as another efficient measure for a specific end use. For instance, a consumer has the choice to install an efficient storage water heater, a tankless water heater, or a heat pump water heater, but not all three. These efficient technologies compete for the same installation. A detailed explanation of the calculation of potential for measures in a competition group can be found in Appendix C.2 3.2 Technical Potential Results This section provides the technical savings potential calculated through DSMSim by sector. The Attachment B: Measure Inputs provides the associated data. Figure 3-1 shows the total cumulative technical potential split by sector for natural gas energy. The allocation of technical potential among sectors is generally comparable with the allocation of forecast sales among sectors, with the residential sector contributing the greatest gas energy technical potential. Technical potential grows over time due to new stock additions to the territory. This model uses a frozen in-situ efficiency baseline, meaning the baseline characteristics do not change over the forecast independent of the efficient measure adoption. The increase in potential in the 8 Sterman, John D. Business Dynamics: Systems Thinking and Modeling for a Complex World. Irwin McGraw-Hill. 2000 for detail on System Dynamics modelling. Final Report Page 12 commercial and residential sectors from 2024-2044 corresponds with an increase in projected sales during that time period. This highest natural gas technical potential exists within the residential sector, as well as the greatest growth in technical potential over time. Figure 3-1. Gas Energy (MMTherms/year) Technical Savings Potential by Sector Source: Guidehouse analysis 2023 Figure 3-2 shows the natural gas energy savings potential for all sectors as a percentage of that sector’s total forecast sales. The percentages reflect a weighted average savings among measures applicable to existing building stock and new building stock constructed during the study period. The growth in residential shows that technical savings potential slightly outpaces sales projections. And the decline in commercial shows that technical savings potential is outpaced by sales projections. The 2023 CPA model shows the residential sector has the greatest technical potential for natural gas energy savings for the study period overall. This is primarily driven by the three measures with the highest technical potential (Furnace, Tankless Water Heater, and Furnace Tune-up, representing 41% of the total potential across all characterized measures) all being applicable to the residential sector. 0 50 100 150 200 250 Sa v i n g s P o t e n t i a l ( M M T h e r m s / y e a r ) Commercial Residential Final Report Page 13 Figure 3-2. Natural Gas Demand Technical Savings Potential by Sector as a Percent of Sector Sales (%) Source: Guidehouse analysis 2023 Appendix C provides detailed results by segment and shows the top 40 measures contributing to technical potential. 0% 10% 20% 30% 40% 50% 60% Po t e n t i a l a s % o f S a l e s Commercial Residential Final Report Page 14 4. Energy Efficiency Economic Potential This section describes the economic savings potential available in IGC’s service territory. Economic potential are savings that are considered cost-effective under the Utility Cost Test (UCT), which is detailed further in this section. The results below detail Guidehouse’s approach for calculating economic potential as well as the detailed results for this portion of our analysis. 4.1 Approach to Estimating Economic Potential Economic potential is a subset of technical potential, using the same assumptions regarding immediate replacement as in technical potential, but including only those measures that have passed the benefit-cost test chosen for measure screening. In this Study Guidehouse used the UCT per IGC’s guidance. The UCT ratio for each measure is calculated each year and compared against the measure-level ratio screening threshold of 1.0. A measure with a UCT ratio greater than or equal to 1.0 is a measure that provides calculated economic benefits greater than or equal to its costs. If a measure’s UCT meets or exceeds this threshold, it is included in the economic potential. The UCT is a cost-benefit metric that measures net benefits of energy efficiency from the viewpoint of the utility (or program administrator), by comparing the costs of administering a program to the cost of supply-side options for comparable energy consumption. A detailed explanation of algorithms and the approach for calculating the UCT ratio is provided in Appendix D.1. 4.2 Economic Potential Results This section provides the economic potential calculated through DSMSim by sector. Figure 4-1 shows gas energy economic potential across all sectors. On average, 65% of technically viable natural gas energy savings potential passes the economic screening process across the study period. Technically viable savings for all of these analyses refers specifically to the energy efficiency technical potential identified in Section 3. Final Report Page 15 Figure 4-1. Natural Gas (MMTherms/year) Economic Potential Savings by Sector Source: Guidehouse analysis 2023 Increases in select years of the economic potential occur whenever one or more measures cross the cost-effectiveness threshold in one or more customer segments. Marginally economic measures having a UCT ratio slightly less than 1.0 at the beginning of the study period can become economically feasible as avoided costs increase. Conversely some avoided costs do not increase as fast as the inflation of measure costs, which may cause some measures to fall out of cost-effectiveness. An example of this would be an HVAC measure, Res Furnace 95 in Zone 5, which falls out of cost effectiveness from 2025-2035 due to lower avoided costs in these years compared to measure costs. Figure 4-2 shows the economic natural gas energy savings potential as a percentage of sales. The most noteworthy trend in economic potential as a percent of sales is that, like technical potential as a percent of sales, it is relatively flat over time for the Commercial sector. For the Residential sector, the economic potential as a percent of sales is less than the Commercial sector (unlike in technical potential) because several high potential measures are not cost effective including Tankless Water Heater and Furnace Tune-up over the study period. 0 20 40 60 80 100 120 140 Sa v i n g s P o t e n t i a l ( M M T h e r m s / y e a r ) Commercial Residential Final Report Page 16 Figure 4-2. Natural Gas Economic Potential by Sector as a Percentage of Sector Consumption (%) Source: Guidehouse analysis 2023 Appendix D.2 provides detailed results by segment and shows the top 40 measures contributing to economic potential. All the measure-level data inputs are provided as an attachment to this report (Attachment A – Results Figures and Tables). 0% 5% 10% 15% 20% 25% 30% 35% 40% Po t e n t i a l a s % o f S a l e s Commercial Residential Final Report Page 17 5. Energy Efficiency Achievable Potential As discussed in this report’s introduction, the overall objective of the 2023 CPA is to provide IGC a well-defined estimate of the total achievable potential gas savings impact that can be realized through energy efficiency programs within its service territory. In addition to supporting EE portfolio budget and goal setting processes, this Study seeks to inform IGC’s broader resource planning process and provide a forward-looking view on how demand-side programs may impact infrastructure planning and natural gas acquisition strategies over the next several decades. To best serve these objectives, Guidehouse refined the estimate of total modeled cost-effective EE potential detailed in Section 4 to account for broader market influences that impact the adoption of these measures and technologies in the real world. In addition, several iterations of model inputs and parameters were applied to determine how the future achievable EE potential may vary depending on variables both within IGC’s influence and external to it. These iterations collectively provide several potential scenarios for the future net potential impact of EE programs serving residential and commercial customers. The following sections describe in greater detail Guidehouse’s approach to calculating achievable potential as well as the results of the 2023 CPA. 5.1 Approach to Estimating Achievable Potential 5.1.1 Energy Efficiency Measure Adoption The adoption of energy efficiency measures can be broken down into calculation of the equilibrium market share and calculation of the dynamic approach to reaching that equilibrium market share. The equilibrium market share can be thought of as the percentage of individuals choosing to purchase a technology provided those individuals are fully aware of the technology and its relative merits (e.g., the energy- and cost-saving features of the technology). In this 2023 CPA, Guidehouse used equilibrium payback acceptance curves that were developed using a meta-analysis which involved averaging payback acceptance curves from other potential studies based on Guidehouse’s experience. For the research referenced to inform this Study, customer decision makers were surveyed and asked about the quantity of various end uses within their home or business to inform density and saturation estimates, and whether they would be likely to make investments in energy efficiency upgrades based on a variety of project costs and expected annual energy savings. Appendix E.1.1 provides a more detailed explanation with examples of these concepts. Initial efficient saturation (which is informed by the customer survey reference above) has a large impact on net achievable potential. Energy efficient technologies can either be adopted as a retrofit, replace-on-burnout, or new construction measures. Guidehouse models the dynamics of how customers become aware of an efficient measure and eventually choose to adopt it or not, and how the building stock changes over time. Based on discussions with IGC, Guidehouse modeled incentives as representing a portion of the EE measure’s incremental cost, defined as the net difference in the cost between baseline and efficiency measures. Additional detail regarding incentive value calculation is in Section 5.1.3 below. This methodology is described in greater detail within Appendix E. Final Report Page 18 5.1.2 Calibration For all models that simulate future product adoption, there is no future world against which one can compare simulated with actual results. As a results, the model has to be calibrated using historic data. For this CPA Study, Guidehouse took a number of steps to ensure that forecast model results were reasonable by comparing historic program performance and incentive spending with the modeled forecast. Guidehouse adjusted model parameters and technology diffusion coefficients to obtain close agreement across a wide variety of metrics as the foundation for the CPA Study. This process ensures that forecast net potential is grounded against real-world results considering the many factors that come into play in determining the likely adoption of energy efficient measures, including both economic and non-economic factors. In the absence of robust historical data, the model was calibrated to the historic accomplishments for IGC for 2019-2021. Calibration targets were estimated using the actual incentive spend, and therm savings were estimated using unit energy saving values from the 2021 EE Annual Report and the number of annual installations. Historic accomplishments were assigned to sector and end use combinations using the closest available measure in the Study. For the Whole Home measure, the historical data was allocated based on unit energy savings from the closest available measures in the study. The model was calibrated on a sector and end use level. For measures where there was no historical data, the model was calibrated so that these measures would have very little achievable potential in 2019-2021 compared to the other measures with historical data. Appendix E.1.5 provides modeled versus historic savings for both the residential and commercial sectors and more details on how the model was calibrated. 5.1.3 Scenarios While the calibration process detailed above seeks to align the model as closely as possible with historic actual program achievements, there is always uncertainty regarding future market influences and decisions made by IGC as it designs and implements EE programs. To account for multiple future possible sets of conditions, different model scenarios were considered representing varying approaches to calculating net achievable energy efficiency potential for the CPA study period. The specific elements of these scenarios were developed collaboratively and reflect variations in future EE budgets, IGC customer attitudes and awareness regarding energy efficiency, and different approaches to defining incentive amounts for EE measures. Multiple model input variations, or “levers”, were considered for the 2023 CPA. IGC shared that along with the overall population of Idaho, their customer base is growing due to population migration from other states. This may reflect a future where customers in aggregate may have a greater propensity to adopt EE technologies. In addition, IGC opted to test different variations of modeled EE incentive amounts, representing different percentages of incremental measure costs. Guidehouse modeled achievable potential for four scenarios, defined as Business as Usual, Unconstrained Historical Budget, Medium Incentive, and High Incentive, High Adoption. Together, these scenario levers provide a broader view of possible future outcomes for their EE portfolio and system. These scenarios are defined as follows: • Business as Usual: This scenario is aligned and calibrated closely with IGC’s historic program activity using IGC’s available program accomplishments on a sector and end use Final Report Page 19 basis. Incentive levels are defined as 50% of measure incremental cost, with the exception of Residential Furnace which was set at 40% of incremental cost to ensure the largest potential measure was cost effective throughout the study period. While this scenario represents no intentionally defined changes to the model, it does reflect an assumption that future program budgets will be closely correlated with IGC’s historic EE program spending. • Unconstrained Historical Budget: This scenario reflects a ramp up of customer adoption of natural gas energy efficiency over a 10 year period from the start of the EE program (through 2029), driven by increased IGC program activity without constraining program spending to historic levels. Incentive levels are consistent with Business as Usual Scenario. • Medium Adoption: This scenario increases the adoption parameters compared to the unconstrained historical budget scenario, and increases model parameter values relating to customer awareness and willingness to adopt energy efficient technologies. Incentive levels are consistent with Business as Usual Scenario. • High Incentive, High Adoption: this scenario reflects the savings possible by increasing the incentives from 50% of measure incremental cost to 65% of incremental cost, and further increasing the customer awareness and willingness to adopt energy efficiency measures to the highest values based on Guidehouse’s experience and rules of thumb. Residential Furnace was kept at 40% of incremental cost to ensure it remained cost effective. 5.2 Achievable Potential Results Figure 5-1 presents the overall net natural gas achievable potential by sector for the Business as Usual, Unconstrained Historical Budget, Medium Adoption, and High Incentive, High Adoption scenarios. Figures 5-2, 5-3, 5-4, and 5-5 show the natural gas energy savings by sector for the Business as Usual, Unconstrained Historical Budget, Medium Adoption, and High Incentive, High Adoption scenarios respectively. In the Business as Usual scenario, Guidehouse calibrated the residential and commercial sectors to historical accomplishments from 2019-2021 and from 2021, respectively, in alignment with the years IGC's programs were active through the 2019-2021 calibration period. In the Unconstrained Historical Budget scenario, the commercial potential is significantly higher than in the Business as Usual scenario due to the assumption that there will be a significant increase in customer awareness and adoption of measures over 10 years (by 2029). The residential sector increases due to significantly greater potential from the Hot Water end use due to the assumption of increased customer awareness and adoption of measures over 10 years (by 2029). Final Report Page 20 Figure 5-1. Total Natural Gas Energy (MMTherms/year) Cumulative Net Achievable Potential by Scenario Source: Guidehouse analysis 2023 Figure 5-1. Natural Gas Energy (MMTherms/year) Cumulative Net Achievable Potential by Sector (Business as Usual) Source: Guidehouse analysis 2023 0 20 40 60 80 100 120 Sa v i n g s P o t e n t i a l ( M M T h e r m s / y e a r ) Business as Usual Unconstrained Historic Budget Medium Adoption High Adoption, High Incentive 0 5 10 15 20 25 30 35 Sa v i n g s P o t e n t i a l ( M M T h e r m s / y e a r ) Commercial Residential Final Report Page 21 Figure 5-2. Natural Gas Energy (MMTherms/year) Cumulative Net Achievable Potential by Sector (Unconstrained Budget) Source: Guidehouse analysis 2023 Figure 5-3. Natural Gas Energy (MMTherms/year) Cumulative Net Achievable Potential by Sector (Medium Adoption) Source: Guidehouse analysis 2023 - 10 20 30 40 50 60 Sa v i n g s P o t e n t i a l ( M M T h e r m s / y e a r ) Commercial Residential - 10 20 30 40 50 60 70 Sa v i n g s P o t e n t i a l ( M M T h e r m s / y e a r ) Commercial Residential Final Report Page 22 Figure 5-4. Natural Gas Energy (MMTherms/year) Cumulative Net Achievable Potential by Sector (High Incentive, High Adoption) Source: Guidehouse analysis 2023 The High Incentive, High Adoption scenario potential yields significantly more achievable than the Business as Usual scenario, and it comes with a higher cost, as shown in Table 5-1. Overall, High Incentive, High Adoption scenario potential is 226% higher on a cumulative MMTherm basis, but the overall budget ranges between 92% and 163% higher annually versus the Business as Usual scenario depending on the year. The Medium Adoption scenario savings are 174% higher than the Business as Usual scenario, and the modeled budget increases as savings grows overall over the forecast period, generally about 23% - 97% higher than the Business as Usual Scenario annually. Table 5-2 provides two measure-level examples of savings and incentive costs for each scenario to highlight these differences. Both measures detailed are in the top 10 measures for each scenario in terms of overall savings potential. Table 5-1. Gas Cumulative Net Achievable Potential and Budgets for All Scenarios Cumulative Gas Savings (MMTherms) Gas Percent of Sales Portfolio Annual Budget ($000s) Business as Usual 2024 1.68 0% 10,313 2029 9.77 2% 9,103 2034 17.82 3% 9,582 2039 25.80 4% 8,710 2044 34.52 5% 9,767 Unconstrained Historical Budget 2024 1.83 0% 10,740 2029 14.07 3% 13,653 - 10 20 30 40 50 60 70 80 Sa v i n g s P o t e n t i a l ( M M T h e r m s / y e a r ) Commercial Residential Final Report Page 23 2034 34.99 6% 16,560 2039 58.17 9% 16,211 2044 83.57 12% 18,126 Medium Adoption 2024 2.17 0% 12,639 2029 17.11 3% 15,963 2034 42.70 8% 18,259 2039 69.31 11% 16,960 2044 94.63 14% 17,692 High Adoption, High Incentive 2024 5.93 1% 12,639 2029 38.96 8% 15,963 2034 66.17 12% 18,259 2039 89.25 14% 16,960 2044 112.55 17% 17,692 Source: Guidehouse analysis 2023 Final Report Page 24 Table 5-2. Key Measure-Level Examples of Gas Savings and Incentives by Scenario (Cumulative Net in 2044) Measure Scenario Cumulative Savings Potential (MMTherm) Cumulative Incentives (Thousands $) Com | Boiler, Large (> 300 kBtuh) Business as Usual 0.03 143 Unconstrained Historic Budget 1.56 6,916 Medium Adoption 1.66 7,340 High Incentive, High Adoption 2.68 15,522 Res | Furnace 98 AFUE (Res) Business as Usual 26.39 136,894 Unconstrained Historic Budget 26.39 136,894 Medium Adoption 26.78 138,920 High Incentive, High Adoption 26.66 138,300 Appendix E.3 provides results for the Unconstrained Historical Budget, Medium Adoption and High Incentive, High Adoption scenarios, the assumptions Guidehouse made in developing this scenario, and how it compares to the Business as Usual scenario. To supplement this report, Guidehouse has included a detailed output file in Attachment A - Results Figures and Tables. This file shows the detailed results for all scenarios. 5.3 Comparison of Historical Achievements to Current and Past Potential Study Achievable Potential Results Guidehouse presents these achievable potential results as a follow up to a previous CPA completed by Dunsky in 2019. The previous Study was conducted prior to the design and implementation of a significant part of IGC’s energy efficiency program portfolio, and as a result reflected very little available historical data regarding program impacts. The 2023 CPA was calibrated using 3 years of historical accomplishments, and the Business as Usual case demonstrates what is achievable if the forecast is constrained to the historical budget. Since IGC’s program is still in the relatively nascent phase, the Unconstrained Historical Budget scenario models what would happen if the program is ramped up over the course of 10 years with 2029 as the final year for the ramp up9. There is some continuity between the previous CPA and this Study. The previous Low scenario in the long run has similar incremental achievable potential to the Business as Usual scenario in this Study. And the Unconstrained Historical Budget and Medium Adoption scenario are comparable in achievable potential to the Base and Max scenarios in the previous Study, respectively. Figure 5-6 details the IGC’s historic claimed 9 The 2023 CPA model includes “pre-study” period beginning in 2019. Final Report Page 25 portfolio accomplishments, the 2019 CPA Base Scenario achievable potential, and the four 2023 CPA Scenarios. All values represent incremental (first year) MMTherm savings. Figure 5-6. Natural Gas Historic Accomplishments Compared to Past and Current Study All Achievable Potential Scenario Results (Annual Net Gas Savings MMTherms) The figures below illustrate how programs have performed historically compared to the current and previous forecasts. Figure 5-7 provides a focused comparison of IGC’s historical accomplishments to specific comparable scenarios from the past and current potential studies (2019 CPA Low scenario and 2023 CPA Business as Usual scenario) on an annual, incremental basis for gas savings. These results show the effect and importance of calibration and incorporating new data and market learnings into the studies over time. Figure 5-8 offers a cumulative view of historical accomplishments and Study results as a percent of economic potential from the current Study. This figure illustrated how much of the available cost-effective energy efficiency potential IGC’s programs have already accomplished, and how much is remaining as the market nears saturation. In these figures, past and current CPA results are added cumulatively to any historical accomplishments before the start year of that study. 0 1 2 3 4 5 6 7 8 An n u a l N e t N a t u r a l G a s S a v i n g s (M M T h e r m s ) 2019 Study (Base)Business as Usual Unconstrained Historic Budget Medium Adoption High Adoption, High Incentive Historic Accomplishments Final Report Page 26 Figure 5-5. Natural Gas Historic Accomplishments Compared to Past and Current Study Achievable Potential Low Scenario Results (Annual Net Gas Savings MMTherms) Source: Guidehouse analysis 2023 Figure 5-6. Cumulative Net Historic and Forecast Natural Gas Savings by Study as a Percent of Economic Potential Source: Guidehouse analysis 2023 0.0 0.5 1.0 1.5 2.0 2.5 3.0 An n u a l N e t N a t u r a l G a s S a v i n g s (M M T h e r m s ) 2019 Study (Low Scenario)Current Study (Business as Usual)Historic Accomplishments 0 2 4 6 8 10 12 14 Sa v i n g s a s a % o f E c o n o m i c P o t e n t i a l 2019 Study (Low Scenario)Current Study (Business as Usual)Historic Accomplishments Final Report Page A-1 Appendix A. Market Characterization This appendix provides a more detailed explanation of the market characterization task. A.1 Data Request and Sources Table A-1. Data Request and Sources Item Desired Scope/Granularity Data Received Customer Stock Data - Historic (2019-2022) and forecast (thru 2044) - Residential: households by segment - Commercial: square footage by segment Years: 2019-2044 Gas Sales Data - Historic (2019-2022) and forecast (thru 2044) - By sector and segment Number of accounts at sector level Retail Rate Data - Historic (2019-2022) and forecast (thru 2074) - By sector and load shape period Years: 2019-2044 Avoided Cost Data - Historic (2019-2022) and forecast (thru 2074) - By load shape period Sales at sector level IGC Discount Rate(s) Over study period (2019-2044) Years: 2019-2023 IGC Inflation Rate(s) Over study period (2019-2044) Retail rates at sector level Source: Guidehouse Final Report Page A-2 A.2 Global Inputs Data Table A-2. Commercial Gas Sales - Zone 5 (Therms) Year Food Service Healthcare Lodging Office Light/ Converted Education Retail M&I 2019 18,499,878 1,875,118 5,509,368 5,218,140 996,814 10,796,428 50,473,544 3,286,290 2020 17,557,332 1,779,583 5,228,672 4,952,282 946,027 10,246,363 47,901,978 3,118,857 2021 17,705,932 1,794,645 5,272,927 4,994,197 954,034 10,333,086 48,307,408 3,145,254 2022 20,564,228 2,084,357 6,124,143 5,800,418 1,108,045 12,001,172 56,105,746 3,652,998 2023 20,308,012 2,058,388 6,047,841 5,728,149 1,094,240 11,851,646 55,406,709 3,607,484 2024 20,858,769 2,114,212 6,211,859 5,883,497 1,123,916 12,173,064 56,909,349 3,705,320 2025 21,388,225 2,167,876 6,369,534 6,032,837 1,152,444 12,482,052 58,353,871 3,799,371 2026 21,927,698 2,222,557 6,530,192 6,185,003 1,181,512 12,796,885 59,825,726 3,895,202 2027 22,467,589 2,277,279 6,690,975 6,337,287 1,210,602 13,111,963 61,298,719 3,991,108 2028 23,018,872 2,333,156 6,855,150 6,492,783 1,240,307 13,433,689 62,802,795 4,089,037 2029 23,547,097 2,386,696 7,012,458 6,641,776 1,268,769 13,741,958 64,243,960 4,182,870 2030 24,086,891 2,441,409 7,173,212 6,794,033 1,297,854 14,056,979 65,716,691 4,278,758 2031 24,626,766 2,496,130 7,333,990 6,946,312 1,326,944 14,372,047 67,189,641 4,374,661 2032 25,179,220 2,552,126 7,498,514 7,102,139 1,356,711 14,694,456 68,696,910 4,472,798 2033 25,706,480 2,605,568 7,655,535 7,250,859 1,385,121 15,002,162 70,135,442 4,566,459 2034 26,246,366 2,660,290 7,816,316 7,403,142 1,414,211 15,317,237 71,608,424 4,662,364 2035 26,786,257 2,715,012 7,977,098 7,555,425 1,443,302 15,632,314 73,081,417 4,758,269 2036 27,339,847 2,771,123 8,141,961 7,711,573 1,473,130 15,955,386 74,591,788 4,856,608 2037 27,865,989 2,824,452 8,298,649 7,859,978 1,501,480 16,262,440 76,027,271 4,950,071 2038 28,405,856 2,879,172 8,459,424 8,012,255 1,530,569 16,577,503 77,500,199 5,045,972 2039 28,945,740 2,933,894 8,620,205 8,164,537 1,559,659 16,892,577 78,973,174 5,141,877 2040 29,500,478 2,990,122 8,785,409 8,321,008 1,589,550 17,216,318 80,486,674 5,240,419 2041 30,025,620 3,043,349 8,941,799 8,469,131 1,617,845 17,522,789 81,919,430 5,333,705 2042 30,565,628 3,098,084 9,102,617 8,621,448 1,646,942 17,837,935 83,392,743 5,429,631 2043 31,105,715 3,152,826 9,263,457 8,773,787 1,676,043 18,153,126 84,866,271 5,525,571 2044 31,661,789 3,209,189 9,429,059 8,930,635 1,706,006 18,477,648 86,383,418 5,624,351 Source: Guidehouse Final Report Page A-3 Table A-3. Commercial Gas Sales - Zone 6 (Therms) Year Food Service Healthcare Lodging Office Light, Converted Education Retail M&I 2019 5,694,295 776,823 2,897,731 1,683,248 372,624 4,454,991 19,612,077 639,524 2020 5,404,178 737,245 2,750,095 1,597,488 353,639 4,228,015 18,612,866 606,941 2021 5,449,917 743,485 2,773,372 1,611,009 356,632 4,263,799 18,770,400 612,078 2022 6,329,706 863,507 3,221,081 1,871,077 414,204 4,952,111 21,800,534 710,887 2023 6,250,842 852,748 3,180,949 1,847,764 409,043 4,890,411 21,528,915 702,030 2024 6,420,366 875,875 3,267,217 1,897,876 420,137 5,023,040 22,112,783 721,069 2025 6,583,333 898,107 3,350,148 1,946,050 430,801 5,150,539 22,674,069 739,372 2026 6,749,384 920,760 3,434,649 1,995,135 441,667 5,280,451 23,245,975 758,021 2027 6,915,563 943,430 3,519,214 2,044,258 452,541 5,410,463 23,818,324 776,684 2028 7,085,249 966,579 3,605,565 2,094,417 463,645 5,543,219 24,402,750 795,742 2029 7,247,838 988,760 3,688,303 2,142,479 474,285 5,670,421 24,962,731 814,002 2030 7,413,988 1,011,426 3,772,854 2,191,593 485,157 5,800,410 25,534,978 832,662 2031 7,580,162 1,034,096 3,857,417 2,240,715 496,032 5,930,419 26,107,309 851,325 2032 7,750,208 1,057,294 3,943,951 2,290,981 507,159 6,063,456 26,692,976 870,423 2033 7,912,500 1,079,434 4,026,539 2,338,955 517,779 6,190,426 27,251,934 888,650 2034 8,078,678 1,102,104 4,111,104 2,388,077 528,653 6,320,438 27,824,278 907,313 2035 8,244,857 1,124,774 4,195,670 2,437,200 539,528 6,450,450 28,396,627 925,977 2036 8,415,253 1,148,020 4,282,381 2,487,570 550,678 6,583,761 28,983,499 945,114 2037 8,577,201 1,170,113 4,364,794 2,535,442 561,276 6,710,462 29,541,272 963,302 2038 8,743,373 1,192,782 4,449,356 2,584,563 572,150 6,840,469 30,113,596 981,965 2039 8,909,550 1,215,453 4,533,921 2,633,685 583,024 6,970,479 30,685,937 1,000,628 2040 9,080,299 1,238,746 4,620,812 2,684,159 594,198 7,104,066 31,274,025 1,019,805 2041 9,241,939 1,260,797 4,703,068 2,731,940 604,775 7,230,527 31,830,739 1,037,959 2042 9,408,154 1,283,473 4,787,652 2,781,074 615,652 7,360,567 32,403,211 1,056,626 2043 9,574,394 1,306,151 4,872,249 2,830,215 626,530 7,490,627 32,975,768 1,075,297 2044 9,745,554 1,329,501 4,959,349 2,880,810 637,731 7,624,536 33,565,272 1,094,520 Source: Guidehouse Final Report Page A-4 Table A-4. Residential Gas Sales - Zone 5 and Zone 6 (Therms) Zone 5 Zone 6 Year Single family Multi-family Single family Multi-family 2019 166,278,673 22,996,993 62,157,476 8,596,623 2020 165,192,113 22,846,718 61,751,304 8,540,448 2021 164,335,181 22,728,201 61,430,969 8,496,144 2022 193,108,925 26,707,723 72,187,029 9,983,750 2023 186,422,036 25,782,900 69,687,369 9,638,037 2024 191,477,835 26,482,137 71,577,303 9,899,422 2025 196,338,093 27,154,329 73,394,141 10,150,698 2026 201,290,311 27,839,241 75,245,355 10,406,728 2027 206,246,360 28,524,682 77,098,001 10,662,956 2028 211,306,991 29,224,587 78,989,741 10,924,591 2029 216,155,953 29,895,217 80,802,356 11,175,283 2030 221,111,118 30,580,536 82,654,671 11,431,466 2031 226,067,023 31,265,957 84,507,263 11,687,686 2032 231,138,397 31,967,348 86,403,019 11,949,877 2033 235,978,498 32,636,753 88,212,322 12,200,111 2034 240,934,510 33,322,189 90,064,954 12,456,337 2035 245,890,558 34,007,630 91,917,600 12,712,565 2036 250,972,369 34,710,464 93,817,257 12,975,295 2037 255,802,213 35,378,451 95,622,726 13,224,999 2038 260,758,043 36,063,861 97,475,290 13,481,215 2039 265,714,031 36,749,294 99,327,913 13,737,440 2040 270,806,369 37,453,584 101,231,506 14,000,715 2041 275,627,037 38,120,302 103,033,544 14,249,944 2042 280,584,163 38,805,892 104,886,593 14,506,228 2043 285,542,012 39,491,582 106,739,911 14,762,549 2044 290,646,620 40,197,569 108,648,091 15,026,458 Source: Guidehouse analysis 2023 Final Report Page A-5 Table A-5. Commercial Stock - Zone 5 (1,000 sq. ft. floor area) Year Food Service Healthcare Lodging Office Light, Converted Education Retail M&I 2019 11,304 13,121 36,107 55,566 2,933 49,151 96,059 93,187 2020 11,493 13,340 36,712 56,497 2,982 49,975 97,669 94,748 2021 11,658 13,531 37,237 57,305 3,025 50,689 99,066 96,103 2022 11,822 13,722 37,762 58,113 3,067 51,404 100,462 97,458 2023 11,981 13,906 38,269 58,893 3,109 52,094 101,810 98,766 2024 12,139 14,090 38,775 59,672 3,150 52,783 103,158 100,073 2025 12,291 14,267 39,261 60,420 3,189 53,444 104,450 101,326 2026 12,446 14,447 39,756 61,182 3,229 54,118 105,767 102,604 2027 12,602 14,627 40,253 61,947 3,270 54,795 107,089 103,887 2028 12,756 14,806 40,746 62,705 3,310 55,466 108,401 105,159 2029 12,911 14,986 41,239 63,464 3,350 56,137 109,713 106,432 2030 13,066 15,166 41,734 64,226 3,390 56,811 111,030 107,710 2031 13,220 15,345 42,228 64,986 3,430 57,483 112,344 108,984 2032 13,375 15,524 42,721 65,745 3,470 58,155 113,657 110,258 2033 13,529 15,704 43,215 66,505 3,510 58,827 114,970 111,532 2034 13,684 15,883 43,709 67,265 3,550 59,499 116,284 112,806 2035 13,838 16,062 44,202 68,024 3,591 60,171 117,596 114,079 2036 13,993 16,242 44,696 68,784 3,631 60,843 118,909 115,353 2037 14,147 16,421 45,189 69,543 3,671 61,514 120,221 116,626 2038 14,302 16,600 45,682 70,301 3,711 62,185 121,533 117,898 2039 14,456 16,779 46,175 71,060 3,751 62,856 122,844 119,170 2040 14,610 16,958 46,668 71,819 3,791 63,527 124,155 120,443 2041 14,765 17,137 47,160 72,577 3,831 64,198 125,466 121,714 2042 14,919 17,316 47,653 73,335 3,871 64,869 126,777 122,986 2043 15,073 17,495 48,146 74,094 3,911 65,540 128,088 124,258 2044 15,227 17,675 48,639 74,852 3,951 66,210 129,399 125,530 Source: Guidehouse Final Report Page A-6 Table A-6. Commercial Stock - Zone 6 (1,000 sq. ft. floor area) Year Food Service Healthcare Lodging Office Light, Converted Education Retail M&I 2019 4,226 4,905 13,497 20,771 1,096 18,373 35,908 34,835 2020 4,296 4,987 13,723 21,120 1,115 18,681 36,510 35,418 2021 4,358 5,058 13,920 21,422 1,131 18,948 37,032 35,925 2022 4,419 5,130 14,116 21,724 1,147 19,216 37,554 36,431 2023 4,479 5,198 14,305 22,015 1,162 19,473 38,058 36,920 2024 4,538 5,267 14,495 22,306 1,177 19,731 38,562 37,409 2025 4,595 5,333 14,676 22,586 1,192 19,978 39,045 37,877 2026 4,653 5,400 14,861 22,871 1,207 20,230 39,537 38,355 2027 4,711 5,468 15,047 23,157 1,222 20,483 40,032 38,834 2028 4,769 5,535 15,231 23,440 1,237 20,734 40,522 39,310 2029 4,826 5,602 15,416 23,724 1,252 20,985 41,012 39,786 2030 4,884 5,669 15,601 24,009 1,267 21,237 41,505 40,264 2031 4,942 5,736 15,785 24,293 1,282 21,488 41,996 40,740 2032 5,000 5,803 15,970 24,577 1,297 21,739 42,487 41,216 2033 5,058 5,870 16,154 24,861 1,312 21,991 42,978 41,692 2034 5,115 5,937 16,339 25,145 1,327 22,242 43,469 42,169 2035 5,173 6,004 16,523 25,429 1,342 22,493 43,959 42,645 2036 5,231 6,071 16,708 25,712 1,357 22,744 44,450 43,121 2037 5,288 6,138 16,892 25,996 1,372 22,995 44,940 43,596 2038 5,346 6,205 17,077 26,280 1,387 23,246 45,431 44,072 2039 5,404 6,272 17,261 26,563 1,402 23,497 45,921 44,548 2040 5,462 6,339 17,445 26,847 1,417 23,747 46,411 45,023 2041 5,519 6,406 17,629 27,130 1,432 23,998 46,901 45,499 2042 5,577 6,473 17,814 27,414 1,447 24,249 47,391 45,974 2043 5,635 6,540 17,998 27,697 1,462 24,500 47,881 46,449 2044 5,692 6,607 18,182 27,981 1,477 24,750 48,371 46,925 Source: Guidehouse Final Report Page A-7 Table A-7. Residential Stock - Zone 5 and Zone 6 (Households) Zone 5 Zone 6 Year Single family Multi-family Single family Multi-family 2019 218,507 30,220 81,681 11,297 2020 225,534 31,192 84,308 11,660 2021 232,388 32,140 86,870 12,014 2022 239,256 33,090 89,437 12,370 2023 246,159 34,045 92,018 12,726 2024 252,912 34,979 94,543 13,076 2025 259,657 35,912 97,064 13,424 2026 266,409 36,845 99,588 13,773 2027 273,155 37,778 102,109 14,122 2028 279,905 38,712 104,633 14,471 2029 286,653 39,645 107,155 14,820 2030 293,404 40,579 109,679 15,169 2031 300,153 41,512 112,202 15,518 2032 306,904 42,446 114,725 15,867 2033 313,655 43,380 117,249 16,216 2034 320,406 44,313 119,772 16,565 2035 327,157 45,247 122,296 16,914 2036 333,908 46,181 124,820 17,263 2037 340,658 47,114 127,343 17,612 2038 347,409 48,048 129,867 17,961 2039 354,160 48,982 132,391 18,310 2040 360,912 49,916 134,914 18,659 2041 367,665 50,849 137,439 19,008 2042 374,418 51,783 139,963 19,357 2043 381,172 52,718 142,488 19,707 2044 387,927 53,652 145,013 20,056 Source: Guidehouse Final Report Page A-8 Table A-8. Residential and Commercial Retail Rates ($) Commercial Residential Year HVAC Hot Water Other HVAC Hot Water Other 2019 0.4674 0.4674 0.4674 0.5182 0.5182 0.5182 2020 0.4896 0.4896 0.4896 0.5403 0.5403 0.5403 2021 0.5579 0.5579 0.5579 0.5967 0.5967 0.5967 2022 0.7083 0.7083 0.7083 0.7339 0.7339 0.7339 2023 0.8442 0.8442 0.8442 0.8698 0.8698 0.8698 2024 0.6812 0.6700 0.6700 0.7163 0.7042 0.7042 2025 0.6677 0.6509 0.6509 0.7075 0.6893 0.6893 2026 0.6541 0.6318 0.6318 0.6987 0.6744 0.6744 2027 0.6406 0.6127 0.6127 0.6899 0.6596 0.6596 2028 0.6270 0.5935 0.5935 0.6811 0.6447 0.6447 2029 0.6066 0.5833 0.5833 0.6589 0.6336 0.6336 2030 0.6081 0.5872 0.5872 0.6605 0.6378 0.6378 2031 0.6083 0.5959 0.5959 0.6607 0.6472 0.6472 2032 0.6140 0.6044 0.6044 0.6669 0.6565 0.6565 2033 0.6254 0.6157 0.6157 0.6793 0.6687 0.6687 2034 0.6316 0.6181 0.6181 0.6860 0.6713 0.6713 2035 0.6287 0.6162 0.6162 0.6829 0.6693 0.6693 2036 0.6249 0.6139 0.6139 0.6788 0.6668 0.6668 2037 0.6224 0.6107 0.6107 0.6760 0.6633 0.6633 2038 0.6203 0.6102 0.6102 0.6738 0.6628 0.6628 2039 0.6240 0.6157 0.6157 0.6778 0.6688 0.6688 2040 0.6397 0.6325 0.6325 0.6949 0.6870 0.6870 2041 0.6651 0.6533 0.6533 0.7224 0.7096 0.7096 2042 0.6772 0.6619 0.6619 0.7355 0.7190 0.7190 2043 0.6736 0.6601 0.6601 0.7317 0.7170 0.7170 2044 0.6765 0.6605 0.6605 0.7348 0.7175 0.7175 Source: Guidehouse Final Report Page A-9 Table A-9. Avoided Costs ($) Year HVAC Hot Water Other 2019 0.4149 0.4149 0.4149 2020 0.4587 0.4587 0.4587 2021 0.5025 0.5025 0.5025 2022 0.8698 0.8798 0.8798 2023 1.6844 1.0899 1.0899 2024 0.8904 0.7213 0.7213 2025 0.7510 0.6460 0.6460 2026 0.6938 0.6176 0.6176 2027 0.6295 0.5812 0.5812 2028 0.5759 0.5451 0.5451 2029 0.5572 0.5357 0.5357 2030 0.5585 0.5393 0.5393 2031 0.5587 0.5473 0.5473 2032 0.5639 0.5551 0.5551 2033 0.5744 0.5655 0.5655 2034 0.5801 0.5677 0.5677 2035 0.5775 0.5659 0.5659 2036 0.5740 0.5638 0.5638 2037 0.5716 0.5609 0.5609 2038 0.5697 0.5604 0.5604 2039 0.5731 0.5655 0.5655 2040 0.5875 0.5809 0.5809 2041 0.6109 0.6000 0.6000 2042 0.6219 0.6079 0.6079 2043 0.6187 0.6063 0.6063 2044 0.6213 0.6067 0.6067 Source: Guidehouse Final Report Page B-1 Appendix B. Measure Characterization This appendix provides additional details regarding the energy efficiency measure characterized as part of the 2023 CPA. B.1 Residential Measure List Table B-1. Residential End Uses and Measures End Use Common Measure Baseline Measure Efficient Measure Name Replacement Type Appliance Clothes Washer (Res) Standard Clothes Washer ENERGY STAR Clothes Washer ROB and NEW Clothes Dryer (Res) Standard Clothes Dryer ENERGY STAR Clothes Dryer ROB and NEW Pool Heater (Res) Standard Pool Heater 82% Eff. ENERGY STAR Pool Heater NEW Only Pool Heater (Res) Standard Pool Heater 82% Eff. ENERGY STAR Pool Heater RET Only Pool Cover (Res) No Pool Cover Pool with Cover NEW Only Pool Cover (Res) No Pool Cover Pool with Cover RET Only Behavioral Home Energy Report No Home Energy Report Home Energy Report RET Only Envelope Windows (Res) Standard Windows ENERGY STAR Windows NEW Only Windows (Res) Standard Windows ENERGY STAR Windows RET Only ENERGY STAR Doors Standard Doors ENERGY STAR Doors NEW Only ENERGY STAR Doors Standard Doors ENERGY STAR Doors RET Only Air Sealing (Res) No Air Sealing Air Sealing Energy Kit Distribution NEW Only Air Sealing (Res) No Air Sealing Air Sealing Energy Kit Distribution RET Only Attic/Roof Insulation (Res) R-11 Attic/Roof Insulation R-30 Attic/Roof Insulation NEW Only Attic/Roof Insulation (Res) R-11 Attic/Roof Insulation R-30 Attic/Roof Insulation RET Only Basement Insulation R-5 Basement Insulation R-20 Basement Insulation NEW Only Basement Insulation R-5 Basement Insulation R-20 Basement Insulation RET Only Wall Insulation (Res) R-5 Wall Insulation R-15 Wall Insulation NEW Only Wall Insulation (Res) R-5 Wall Insulation R-15 Wall Insulation RET Only HVAC Furnace 95 AFUE (Res) Standard Res Central Furnace (80 AFUE) Efficient Res Central Furnace (95 AFUE) ROB and NEW Furnace 98 AFUE (Res) Standard Res Central Furnace (80 AFUE) Efficient Res Central Furnace (98 AFUE) ROB and NEW Gas Heat Pump (Space Heating) (Res) Standard Res Central Furnace (80 AFUE) Res Central Gas Absorption Heat Pump ROB and NEW Final Report Page B-2 End Use Common Measure Baseline Measure Efficient Measure Name Replacement Type Furnace Tune-Up (Res) No Furnace Tune-Up Furnace Tune-Up RET Only Boiler (Res) Standard Res Boiler 84 AFUE High-efficiency Res Boiler 95 AFUE ROB and NEW Boiler Reset Control (Res) No Reset Control Reset Control RET Only Boiler Tune-Up (Res) No Boiler Tune-Up Boiler Tune-Up RET Only Combination Boiler, Space and Water Heat (Res) Standard Gas Boiler and Water Heater Combo Boiler 95 AFUE ROB and NEW Duct Insulation (Res) No Duct Insulation Duct Insulation R-6 NEW Only Duct Insulation (Res) No Duct Insulation Duct Insulation R-6 RET Only Duct Sealing (Res) Leaky Ducts (20% leakage rate) Sealed Ducts (6% leakage rate) RET Only Fireplace Standard Fireplace (64% Eff.) Efficient Fireplace (70% Eff.) ROB and NEW Heat Recovery Ventilator (HRV) No Heat Recovery ENERGY STAR HRV NEW Only Programmable Thermostat (Res) Manual Thermostat Programmable Thermostat NEW Only Programmable Thermostat (Res) Manual Thermostat Programmable Thermostat RET Only Wi-Fi Thermostat (Res) Manual Thermostat Wi-Fi Thermostat NEW Only Wi-Fi Thermostat (Res) Manual Thermostat Wi-Fi Thermostat RET Only Hot Water High-Efficiency Storage Water Heater (Res) Standard Res Storage Water Heater Efficient Res Storage Water Heater 0.68 UEF ROB and NEW Tankless Water Heater (Res) Standard Res Storage Water Heater Tankless Res Water Heater 0.87 UEF ROB and NEW Faucet Aerator (Res) No Faucet Aerator Low-flow Faucet Aerator 1.5 gpm NEW Only Faucet Aerator (Res) No Faucet Aerator Low-flow Faucet Aerator 1.5 gpm RET Only Low-flow Showerhead (Res) 2.5gpm Showerhead 1.5gpm Showerhead NEW Only Low-flow Showerhead (Res) 2.5gpm Showerhead 1.5gpm Showerhead RET Only Hot Water Pipe Insulation (Res) Non-insulated Hot Water Pipe Insulated Hot Water Pipe R4 NEW Only Hot Water Pipe Insulation (Res) Non-insulated Hot Water Pipe Insulated Hot Water Pipe R4 RET Only Thermostatic Restrictor Shower Valve (Res) No Thermostatic Valve Thermostatic Valve NEW Only Thermostatic Restrictor Shower Valve (Res) No Thermostatic Valve Thermostatic Valve RET Only Source: Guidehouse Final Report Page B-3 B.2 Commercial Measure List Table B-2. Commercial End Uses and Measures End Use Common Measure Baseline Measure Efficient Measure Replacement Type Appliance Ozone Laundry Standard Commercial Process Washer Ozone Laundry System Retrofit NEW Only Ozone Laundry Standard Commercial Process Washer Ozone Laundry System Retrofit RET Only Clothes Washer and Dryer (Com) Standard Clothes Washer and Dryer, Gas Water Heat ENERGY STAR Clothes Washer and Dryer ROB and NEW Pool Heater (Com) Standard Pool Heater 78% Eff. ENERGY STAR Pool Heater 84%+ Eff. NEW Only Pool Heater (Com) Standard Pool Heater 78% Eff. ENERGY STAR Pool Heater 84%+ Eff. RET Only Pool Cover (Com) No Pool Cover Pool with Cover NEW Only Pool Cover (Com) No Pool Cover Pool with Cover RET Only Behavioral Building Operator Certification No BOC Training BOC Training RET Only Envelope Windows (Com) Standard Windows ENERGY STAR Windows NEW Only Windows (Com) Standard Windows ENERGY STAR Windows RET Only Air Sealing (Com) No Air Sealing Air Sealing Energy Kit Distribution NEW Only Air Sealing (Com) No Air Sealing Air Sealing Energy Kit Distribution RET Only Dock Door Sealing Dock Door without Sealing Dock Door with Sealing RET Only Attic/Roof Insulation (Com) R-11 Attic/Roof Insulation R-30 Attic/Roof Insulation NEW Only Attic/Roof Insulation (Com) R-11 Attic/Roof Insulation R-30 Attic/Roof Insulation RET Only Wall Insulation (Com) R-5 Wall Insulation R-15 Wall Insulation NEW Only Wall Insulation (Com) Uninsulated wall Code level wall insulation RET Only HVAC Furnace (Com) Standard Com Furnace 81 Et Efficient Com Furnace 95 Et ROB and NEW Gas Heat Pump (Space Heating) (Com) Standard Com Furnace Com Gas Absorption Heat Pump ROB and NEW Boiler, Small (< 300 kBtuh) Standard Small Boiler 84 AFUE High-efficiency Small Boiler 90 AFUE ROB and NEW Boiler, Large (> 300 kBtuh) Standard Large Boiler 80 Et High-efficiency Large Boiler 90 Et ROB and NEW Boiler Stack Economizer No Economizer Economizer NEW Only Boiler Stack Economizer No Economizer Economizer RET Only Combo Condensing Boiler/Water Heater (Com) Standard Gas Boiler and Water Heater Combo Boiler 95 AFUE ROB and NEW Boiler Reset Control (Com) No Reset Control Reset Control RET Only Final Report Page B-4 End Use Common Measure Baseline Measure Efficient Measure Replacement Type Boiler Shut Off Damper, Space Heating No Damper Damper RET Only Condensing Make Up Air Unit (MAU) Standard MAU Condensing MAU with VFD NEW Only Condensing Make Up Air Unit (MAU) Standard MAU Condensing MAU with VFD RET Only Energy Management System (EMS) No EMS EMS RET Only Energy Recovery Ventilator (ERV) No ERV ERV NEW Only Energy Recovery Ventilator (ERV) No ERV ERV RET Only Demand Control Ventilation (DCV) No DCV DCV NEW Only Demand Control Ventilation (DCV) No DCV DCV RET Only Steam Trap Leaky Steam Trap Steam Trap Repair RET Only Furnace Shut Off Damper, Space Heating No Damper Damper RET Only Infrared Heater Standard Heater Infrared Heater ROB and NEW Programmable Thermostat (Com) Manual Thermostat Programmable Thermostat NEW Only Programmable Thermostat (Com) Manual Thermostat Programmable Thermostat RET Only Wi-Fi Thermostat (Com) Manual Thermostat Wi-Fi Thermostat NEW Only Wi-Fi Thermostat (Com) Manual Thermostat Wi-Fi Thermostat RET Only Overhead Door Air Curtain No Curtain Air Curtain NEW Only Overhead Door Air Curtain No Curtain Air Curtain RET Only Duct Insulation (Com) No Duct Insulation Duct Insulation R-6 RET Only Duct Sealing (Com) Leaky Ducts (20% leakage rate) Sealed Ducts (8% leakage rate) RET Only Boiler Tune-Up (Com) No Boiler Tune-Up Boiler Tune-Up RET Only Furnace Tune-Up (Com) No Furnace Tune-Up Furnace Tune-Up RET Only HTHV Heater Gas Unit Heater (80% Eff.) HTHV Heater (92% Eff.) ROB and NEW Kitchen Infrared Broiler Standard Broiler High-efficiency Broiler ROB and NEW Dishwasher Standard Dishwasher ENERGY STAR Dishwasher ROB and NEW Fryer Standard Fryer ENERGY STAR Fryer ROB and NEW Steamer Standard Steamer ENERGY STAR Steamer ROB and NEW Final Report Page B-5 Source: Guidehouse End Use Common Measure Baseline Measure Efficient Measure Replacement Type Oven - Combination Standard Combination Oven ENERGY STAR Combination Oven ROB and NEW Oven - Rack Standard Rack Oven ENERGY STAR Rack Oven ROB and NEW Oven - Convection Standard Convection Oven ENERGY STAR Convection Oven ROB and NEW Griddle Standard Efficiency Griddle ENERGY STAR Griddle ROB and NEW Process Process Boiler - Steam Standard Efficiency Steam Boiler 80% High-efficiency Steam Boiler 82% ROB and NEW Process Boiler - Water Standard Efficiency Hot Water Boiler 80% High-efficiency Hot Water Boiler 82% ROB and NEW Process Boiler Tune-Up No Service Process Boiler Tune-Up RET Only Process Grain Dryer Standard Grain Dryer High-efficiency Grain Dryer ROB and NEW Hot Water High-Efficiency Storage Water Heater (Com) Standard Com Storage Water Heater Efficient Com Storage Water Heater 0.68 UEF ROB and NEW Tankless Water Heater (Com) Standard Com Storage Water Heater Tankless Com Water Heater 0.87 UEF ROB and NEW Mid-Efficiency Indirect Water Heater Gas Water Heater and Boiler Indirect Water Heater, Boiler 84-89% Eff ROB and NEW High-Efficiency Indirect Water Heater Gas Water Heater and Boiler Indirect Water Heater, Boiler 90%+ Eff ROB and NEW Faucet Aerator (Com) No Faucet Aerator Low-flow Faucet Aerator 1.5gpm NEW Only Faucet Aerator (Com) No Faucet Aerator Low-flow Faucet Aerator 1.5gpm RET Only Low-flow Showerhead (Com) 2.5gpm Showerhead 1.5gpm Showerhead NEW Only Low-flow Showerhead (Com) 2.5gpm Showerhead 1.5gpm Showerhead RET Only Pre-Rinse Spray Valve 1.16gpm Spray Valve 1.12gpm Spray Valve ROB and NEW Hot Water Pipe Insulation (Com) Non-insulated Hot Water Pipe Insulated Hot Water Pipe R4 NEW Only Hot Water Pipe Insulation (Com) Non-insulated Hot Water Pipe Insulated Hot Water Pipe R4 RET Only Recirculation Pump with Demand Controls Uncontrolled pump Recirculating pump NEW Only Recirculation Pump with Demand Controls Uncontrolled pump Recirculating pump RET Only Thermostatic Restrictor Shower Valve (Com) No Thermostatic Valve Thermostatic Valve NEW Only Thermostatic Restrictor Shower Valve (Com) No Thermostatic Valve Thermostatic Valve RET Only Final Report Page B-6 B.3 Measure Replacement Types and Definitions Table B-3. Measure Replacement Types and Definitions New or Existing Measure Replacement Type Definition New Construction New Construction (NEW) Equipment installed in a newly constructed building. In this situation, energy savings calculations are always relative to code. Existing Construction Normal replacement (NR) (i.e., replace on burnout [ROB]) New equipment needs to be installed to replace equipment that has reached the end of its useful life, has failed, or is no longer functional. Upon failure, normal replacement equipment is generally not repaired by the customer and is instead replaced with a new piece of equipment. Appliance standards are applicable to some types of normal replacement equipment and apply to all new purchases. Retrofit (RET) – add-on equipment New equipment installed onto an existing system, either as an additional, integrated component or to replace a component of the existing system. In either case, the primary purpose of the add-on measure is to improve the overall efficiency of the system. These measures cannot operate on their own as standalone equipment and are not required to operate the existing equipment or building. Codes or standards may be applicable to some types of add-on measures by setting minimum efficiency levels of newly installed equipment, but the codes or standards do not require the measure to be installed. Retrofit (RET) – accelerated replacement Equipment that will be replaced before it fails. These measures are installed to replace previously existing equipment that has either not failed or is past the end of its Effective Useful Life (EUL )but is not compromising use of the building (such as insulation and water fixtures). Many of these installations are subject to building code, but upgrades are not always required by code until a major building renovation (and even then, some may not be required). Final Report Page B-7 B.4 Key Measure Characterization Parameters Table B-4. Key Measure Characterization Parameters Source: Guidehouse Parameter Name Definition Measure Description Definitions of the measure, including both baseline and efficient levels, and including characteristics such as capacity or efficiency where relevant. This is included in the Measure List. Measure Replacement Type Each measure is defined as retrofit/early retirement, ROB, or new construction. This input is included in the Measure List. Measure Applicability Each measure will have a defined applicability. Sector and End Use applicability is defined in the Measure List, while Building Type and Climate Zone applicability was determined during the individual characterization of each measure. Unit Basis The measure unit basis must be clearly specified and remain consistent across all energy, cost, and density inputs. Energy Consumption and Savings For each measure, the relative annual gas energy consumption between the baseline and efficient levels is defined (in therms), yielding unit energy savings. Costs Incremental measure costs per unit are defined, including both material and labor/installation costs. Measure Density and Saturation Density and saturation represent the prevalence of the measure in the building stock. Density values are defined as unit basis per household for residential and unit basis per 1,000 sq. ft. for commercial. Saturations are defined as the % penetration of the existing technology. Measure Lifetime The effective useful life for each measure is used to calculate lifetime energy savings. Net-to-Gross Ratio (NTGR) Measures are assigned a Net-to-Gross (NTG) Ratio to account for any free riders and/or spillover that may result from participating in a program. Based on discussion with IGC staff, Guidehouse used default NTGR assumptions of 1.0 for all measures given limited data available to inform specific NTGR assumptions applicable to IGC Service Territory. Final Report Page B-8 B.5 Measure Data Sources Table B-5. Measure Data Sources * The Usage Count column shows the number of measures for which the source was used to characterize the measure’s inputs. Source: Guidehouse 10 MI MEMD available at https://www.michigan.gov/mpsc/regulatory/ewr/michigan-energy-measures-database. 11 Iowa TRM available at https://iub.iowa.gov/regulated-industries/energy-efficiency-programs. 12 CA eTRM, maintained by the California Technical Forum, available at http://www.caltf.org/etrm-overview. 13 IL TRM available at https://www.icc.illinois.gov/programs/illinois-statewide-technical-reference-manual-for-energy- efficiency. 14 NY TRM available at https://dps.ny.gov/technical-resource-manual-trm. 15 MN TRM available at https://mn.gov/commerce/energy/industry-government/cip/technical-reference-manual/. 16 MA eTRM available at https://www.masssavedata.com/Public/TechnicalReferenceLibrary. Source Data Format Usage Count Notes 2023 Michigan Energy Measures Database (“MI MEMD”)10 Deemed values (pre-calculated with validated parameters 65 Climate Zone map for weather- sensitive measures: -Zone 5: DE (Detroit City Airport) -Zone 6: AL (Alpena) 2023 Iowa TRM (“Iowa TRM”)11 Engineering algorithms and equations 10 Climate Zone map for weather- sensitive measures: -Zone 5: Iowa Zone 5 -Zone 6: Iowa Zone 6 2023 California TRM (“CA eTRM”)12 Deemed values (pre-calculated with validated parameters 8 Used only for non-weather-sensitive measures given climate differences 2023 Illinois TRM (“IL TRM”)13 Engineering algorithms and equations 3 Climate Zone map for weather- sensitive measures: -Zone 5: Illinois Zone 2 -Zone 6: Illinois Zone 1 2023 New York TRM (“NY TRM”)14 Engineering algorithms and equations 1 Climate Zone map for weather- sensitive measures: -Zone 5: Albany/Buffalo (Zone 5A) -Zone 6: Massena (Zone 6A) 2023 Minnesota TRM (“MN TRM”)15 Engineering algorithms and equations 1 None 2023 Massachusetts TRM (“MA eTRM”)16 Deemed values (pre-calculated with validated parameters 1 None Final Report Page B-9 B.6 Density and Saturation Data Sources Table B-6. Density and Saturation Data Sources Source Link Northwest Energy Efficiency Alliance – Residential Building Stock Assessment https://neea.org/data/residential-building-stock- assessment Northwest Energy Efficiency Alliance – Commercial Building Stock Assessment https://neea.org/data/commercial-building-stock- assessments 2019 California Residential Appliance Saturation Study https://www.energy.ca.gov/publications/2021/2019- california-residential-appliance-saturation-study-rass California Lighting and Appliance Saturation Survey https://webtools.dnvgl.com/projects62/Default.aspx?tabid =190 California Commercial Saturation Survey https://www.calmac.org/publications/California_Commerci al_Saturation_Study_Report_Finalv2.pdf Characterizing the Energy Efficiency Potential of Gas- Fired Commercial Food Service Equipment https://www.caetrm.com/media/reference- documents/CEC-500-2014-095.pdf ENERGY STAR® Shipment Data 2021 https://www.energystar.gov/sites/default/files/asset/docu ment/2021%20Unit%20Shipment%20Data%20Summary %20Report_0.pdf ENERGY STAR® Windows, Doors, and Skylights Version 7.0 Criteria Analysis Report https://www.energystar.gov/sites/default/files/asset/docu ment/ES_Residential_WDS_Draft%201_Criteria%20Anal ysis%20Report.pdf Final Report Page C-1 Appendix C. Energy Efficiency Technical Potential This appendix details the energy efficiency technical potential task. The Attachment B: Measure Inputs and Database provides the associated data. C.1 Approach to Technical Potential and Replacement Types Guidehouse’s modeling approach considers an energy efficient measure to be any change made to a building, piece of equipment, process, or behavior that could save energy. The savings can be defined in numerous ways, depending on which method is most appropriate for a given measure. Measures like residential water heaters are best characterized as some fixed amount of savings per water heater; savings for measures like large boilers in commercial buildings are typically characterized as savings per 1,000 sq/ft of floor space. The DSMSim model can appropriately handle savings characterizations for both methods. The following sections include the formulas used to calculate technical potential by replacement type. C.1.1 New Construction Measures The cost of implementing new construction (NEW) measures is incremental to the cost of a baseline (and less efficient) measure. However, new construction technical potential is driven by equipment installations in new building stock rather than by equipment in existing building stock.17 New building stock is added to keep up with forecast growth in total building stock and to replace existing stock that is demolished each year. Demolished (sometimes called replacement) stock is calculated as a percentage of existing stock in each year, and this Study uses a demolition rate of 0.5% per year for all building stock. New building stock (the sum of growth in building stock and replacement of demolished stock) determines the incremental annual addition to technical potential, which is then added to totals from previous years to calculate the total potential in any given year. The team used the following equations to calculate technical potential for new construction measures. Equation C-1. Annual Incremental NEW Technical Potential (AITP) AITPYEAR = New BuildingsYEAR (e.g., buildings/year18) X Measure Density (e.g., widgets/building) X SavingsYEAR (e.g., kWh/widget) X Technical Suitability (dimensionless) Equation C-2. Total NEW Technical Potential (TTP) TTP = ∑𝐴𝐼𝑇𝑃𝑌𝐸𝐴𝑅𝑌𝐸𝐴𝑅=2044𝑌𝐸𝐴𝑅=2024 𝐓𝐓𝐏=∑𝑨𝑰𝑻𝑷𝒀𝒆𝒂𝒓 𝟐𝟎𝟒𝟒 𝒀𝒆𝒂𝒓=𝟐𝟎𝟐𝟒 17 In some cases, customer-segment-level and end use-level consumption/sales are used as proxies for building stock. These consumption/sales figures are treated like building stock in that they are subject to demolition rates and stock-tracking dynamics. 18 Units for new building stock and measure densities may vary by measure and customer segment (e.g., 1,000 square meters of building space, number of residential homes, customer-segment consumption/sales, etc.). Final Report Page C-2 C.1.2 Retrofit and ROB Measures Retrofit (RET) measures, commonly referred to as advancement or early-retirement measures, are replacements of existing equipment before the equipment fails. RET measures can also be efficient processes that are not currently in place and not required for operational purposes. For RET measures, we calculated a deferred replacement credit, which accounts for the value of deferring the replacement of baseline equipment by some number of years (lifetime of equipment minus remaining useful life of existing equipment). The deferred replacement credit is subtracted from the incremental costs of RET measures. In contrast, replace-on-burnout (ROB) measures, sometimes referred to as lost-opportunity measures, are replacements of existing equipment that have failed and must be replaced, or they are existing processes that must be renewed. Because the failure of the existing measure requires a capital investment by the customer, the cost of implementing ROB measures is always incremental to the cost of a baseline (and less efficient) measure. Retrofit and ROB measures have a different meaning for technical potential compared with new construction measures. In any given year, we use the entire building stock for the calculation of technical potential.19 This method does not limit the calculated technical potential to any pre- assumed rate of adoption of retrofit measures and assumes that all ROB equipment is instantly eligible for replacement. Existing building stock is reduced each year by the quantity of demolished building stock in that year and does not include new building stock that is added throughout the simulation. For RET and ROB measures, annual potential is equal to total potential, offering an instantaneous view of technical potential. The team used Equation C-3 to calculate technical potential for RET and ROB measures. Equation C-3. Annual/Total RET/ROB Technical Savings Potential Total Technical Potential = Existing Building StockYEAR (e.g., buildings20) X Measure Density (e.g., widgets/building) X SavingsYEAR (e.g., kWh/widget) X Technical Suitability (dimensionless) C.2 Competition Groups General characteristics of competing technologies used to define competition groups in this Study include the following: • Competing efficient technologies share the same baseline technology characteristics, including baseline technology densities, costs, and consumption • The total (baseline plus efficient) measure densities of competing efficient technologies are the same • Installation of competing technologies is mutually exclusive (i.e., installing one precludes installation of the others for that application) • Competing technologies share the same replacement type (RET, ROB, or NEW) 19 In some cases, customer-segment-level and end use-level consumption/sales are used as proxies for building stock. These consumption/sales figures are treated like building stock in that they are subject to demolition rates and stock-tracking dynamics. 20 Units for building stock and measure densities may vary by measure and customer segment (e.g., 1,000 square feet of building space, number of residential homes, customer-segment consumption/sales, etc.). Final Report Page C-3 To address the overlapping nature of measures within a competition group, Guidehouse’s analysis only selects one measure per competition group to include in the summation of technical potential across measures (e.g., at the end use, customer segment, sector, service territory, or total level). The measure with the largest energy savings potential in a given competition group is used for calculating total technical potential of that competition group, regardless of the customer economics or cost-effectiveness of that measure. This approach confirms the aggregated technical potential does not double-count savings. However, the model still calculates the technical potential for each individual measure outside of the summations. Although measure savings are not double counted, this approach does not consider savings interaction between measures. For example, if a high-efficiency air conditioner is installed in a house with poor insulation or a leaky envelope, the potential savings for retrofitting those components after the new air conditioner is installed will be less than if they were installed first. These interactive effects are addressed when calculating achievable potential. In practice, some measures have within-end use interactive effects that are not accounted for in technical potential, leading to the technical and economic potential to be higher than practicable. These interactive effects occur when the installation of one measure would reduce the savings for other measures after installation, despite the measures not competing directly. The whole is less than the sum of its parts. An example of this is with HVAC and insulation measures. When installed in a home without upgraded insulation, an efficient furnace would save more energy per year relative to a home with upgraded insulation. The same is true for the savings of an insulation measure in a home with a baseline furnace versus a home with an efficient furnace. Because the order of installation matters when assigning the discount factor to the applied savings, it does not make sense to evaluate these interactive effects when the stock can turnover instantly, as is the case for technical and economic potential. The sum of technical or economic potential over measures that interact will be overstated. C.3 Technical Potential Results C.3.1 Results by Customer Segment The natural gas energy technical potentials shown in Figure C-1 are broken out for each of the customer segments. Attachment B provides the associated data. These figures show that technical potential is slightly larger for the residential sector compared to the commercial sector. The largest customer segment was for single family residential due to the large building stock of single family homes in IGC’s territory. Final Report Page C-4 Figure C-1. Natural Gas Technical Potential by Customer Segment (MMTherms/year) Source: Guidehouse analysis 2023 C.3.2 Results by Measure The measure-level savings potential shown in Figure C-2 are after adjustments are made due to competition groups for natural gas. Attachment B provides the associated data. This is consistent with the aggregate results shown above. However, for the achievable potential scenarios, measures gain market share relative to their economic characteristics rather than their savings potential alone; measures will be included in the achievable potential forecast that are not shown in the technical and economic potential. Figure C-2 shows the top 40 natural gas measures, which is topped with predominately residential HVAC and water heating measures. 0 50 100 150 200 250 300 350 Sa v i n g s P o t e n t i a l ( M M T h e r m s / y e a r ) Res-Single Family Res-Multi Family Com-Retail Com-Other Com-Office Com-Manufacturing/Industrial Com-Lodging Com-Light/Converted Com-Healthcare Com-Food Service Com-Education Final Report Page C-5 Figure C-2. Top 40 Measures - Natural Gas Technical Potential in 2024 (MMTherms/year) Source: Guidehouse analysis 2023 Furnace 98 AFUE (Res) Tankless Water Heater (Res) Wall Insulation (Res) Hot Water Pipe Insulation (Res) Boiler, Large (> 300 kBtuh) Furnace (Com) Furnace Tune-Up (Res) Tankless Water Heater (Com) Energy Management System (EMS) Duct Sealing (Res) Attic/Roof Insulation (Res) Steam Trap Building Operator Certification Wi-Fi Thermostat (Res) Boiler (Res) Energy Recovery Ventilator (ERV) Hot Water Pipe Insulation (Com) Duct Sealing (Com) Dock Door Sealing Demand Control Ventilation (DCV) Infrared Heater Duct Insulation (Res) Clothes Dryer (Res) Boiler Reset Control (Com) Basement Insulation Faucet Aerator (Res) Low-flow Showerhead (Res) Air Sealing (Res) Gas Heat Pump (Space Heating) (Com) Boiler Tune-Up (Res) Boiler Tune-Up (Com) HTHV Heater Fryer Boiler, Small (< 300 kBtuh) Home Energy Report Furnace Tune-Up (Com) Clothes Washer (Res) Condensing Make Up Air Unit (MAU) Dishwasher Fireplace Final Report Page D-1 Appendix D. Energy Efficiency Economic Potential This appendix details the economic potential task. D.1 Economic Potential UCT The model used Equation D-1 to calculate the UCT benefit-cost ratio. Equation D-1. Benefit-Cost Ratio for UCT UCT =𝑃𝑉(𝐴𝑣𝑜𝑖𝑑𝑒𝑑 𝐶𝑜𝑠𝑡𝑠) 𝑃𝑉(𝐼𝑛𝑐𝑒𝑛𝑡𝑖𝑣𝑒𝑠+𝐴𝑑𝑚𝑖𝑛 𝐶𝑜𝑠𝑡𝑠) Where: • PV( ) is the present value calculation that discounts cost streams over time. • Avoided Costs are the monetary benefits resulting from natural gas savings (e.g., avoided costs of infrastructure investments and avoided commodity costs due to natural gas energy conserved by efficient measures). • Admin Costs are the administrative costs incurred by the utility or program administrator. • Incentives are measure-level incentives that are provided to the customer for adopting the measures. Guidehouse calculated UCT ratios for each measure based on the present value of benefits and costs (as defined above) over each measure’s life. Guidehouse included administration costs at the measure level estimated from IGC’s historic administrative costs and allocated it to each measure using the historical average of cost per therm savings. These administrative spending levels are held constant over time and across all scenarios and used 2023 dollars to be comparable to the incremental costs which used 2023 dollars as well. Similar to technical potential, only one economic measure (meaning that its UCT ratio meets the threshold) from each competition group is included in the summation of economic potential across measures (e.g., at the end use category, customer segment, sector, service territory, or portfolio level). If a competition group is composed of more than one measure that passes the UCT test, then the economic measure that provides the greatest savings potential is included in the summation of economic potential. This approach confirms double counting is not present in the reported economic potential, though economic potential for each individual measure is still calculated and reported outside of the summation. D.2 Economic Potential Results D.2.1 Results by Customer Segment Figure D-1 depicts the economic natural gas energy savings potential for all customer segments. Attachment B provides the corresponding measure input data. Economic potential steadily increases at the same rate as technical potential. Residential measures that pass the Final Report Page D-2 UCT largely remain economic throughout the forecast. The mix of economic potential from the Commercial sector does not change appreciably relative to the technical potential. Figure D-1 shows the economic natural gas potential by segment, which again is dominated by residential and single family homes because so much of IGC’s territory serves residential compared to commercial. Figure D-1. Natural Gas Economic Potential by Customer Segment (MMTherms/year) Source: Guidehouse analysis 2023 D.2.2 Results by Measure Figure D-2 provides the top 40 natural gas measures, which are predominately residential measures. As discussed before, this is because the residential natural gas load makes up most of the applicable natural gas load for energy efficiency measures. Guidehouse’s secondary research showed relatively low efficient saturation of gas furnaces, which results in high remaining savings potential for gas furnaces. 0 50 100 150 200 250 Sa v i n g s P o t e n t i a l ( M M T h e r m s / y e a r ) Res-Single Family Res-Multi Family Com-Retail Com-Other Com-Office Com-Manufacturing/Industrial Com-Lodging Com-Light/Converted Com-Healthcare Com-Food Service Com-Education Final Report Page D-3 Figure D-2. Top 40 Measures - Natural Gas Economic Potential in 2024 (MMTherms/year) Source: Guidehouse analysis 2023 Furnace 98 AFUE (Res) Hot Water Pipe Insulation (Res) Boiler, Large (> 300 kBtuh) Tankless Water Heater (Com) Energy Management System (EMS) Furnace (Com) Steam Trap Building Operator Certification Wi-Fi Thermostat (Res) Tankless Water Heater (Res) Energy Recovery Ventilator (ERV) Hot Water Pipe Insulation (Com) Duct Sealing (Com) Infrared Heater Gas Heat Pump (Space Heating) (Com) Duct Insulation (Res) Faucet Aerator (Res) Boiler Reset Control (Com) Low-flow Showerhead (Res) Basement Insulation Air Sealing (Res) Wall Insulation (Res) HTHV Heater Fryer Boiler (Res) Boiler, Small (< 300 kBtuh) Condensing Make Up Air Unit (MAU) Dishwasher Oven - Convection Pool Cover (Res) Infrared Broiler Steamer Boiler Shut Off Damper, Space Heating Furnace Shut Off Damper, Space Heating Pre-Rinse Spray Valve Process Grain Dryer Oven - Rack Ozone Laundry Boiler Stack Economizer Combination Boiler, Space and Water Heat (Res) Final Report Page E-4 Appendix E. Energy Efficiency Achievable Potential This appendix describes Guidehouse’s approach to calculating achievable energy efficiency potential and presents the results for IGC’s service territory. E.1 Approach to Estimating Achievable Potential This section provides a high level summary of the approach to calculating net achievable potential. The adoption of energy efficiency measures can be broken down into calculation of the equilibrium market share and calculation of the dynamic approach to equilibrium market share. This section also provides an overview of the sensitivity analysis and model calibration process. E.1.1 Calculation of Equilibrium Market Share The equilibrium market share can be thought of as the percentage of individuals that would choose to purchase a technology provided those individuals are fully aware of the technology and its relative merits (e.g., the energy- and cost-saving features of the technology). In this context – fully aware means ready and capable of making an informed purchase decision. For energy efficiency measures, a key differentiating factor between the base technology and the efficient technology is the energy and cost savings associated with the efficient technology. Of course, that additional efficiency often comes at a premium in initial cost, meaning that it can take some time for the higher efficiency to pay off. Equilibrium market share is calculated as a function of the payback time of the efficient technology relative to the inefficient technology. This approach allows Guidehouse to estimate the market share for the dozens or even hundreds of technologies that are often considered in potential studies. In the 2023 CPA, Guidehouse used equilibrium payback acceptance curves that were developed from a meta-analysis of secondary sources from a few other potential studies. Guidehouse typically employs surveys of residential and commercial customers to define the payback acceptance curves at sector level. In the surveys, customer decision makers were asked about the quantity of various end uses within their home or business to inform density and saturation estimates, and then were asked whether they would be likely to make investments in energy efficiency upgrades based on a variety of project costs and expected annual energy savings. This willingness to pay question battery is typical of discrete choice experiments and designed to elicit the customer’s inherent response to different economic returns. Guidehouse conducted statistical analysis on these responses to develop a set of payback acceptance curves for each customer sector combination which were used in other potential studies. Using an average of each sector’s payback curves, Guidehouse developed a payback acceptance curve for each sector. Figure E-1 shows an example of a payback acceptance curve for residential measures. In this example, at a payback period of 0 (i.e., the cost of the efficient technology after incentives is equivalent to the cost of the baseline technology), approximately 95% of customers would choose to install the efficient technology. This indicates that there are additional considerations or barriers beyond just cost that impact whether or not a particular customer is willing to install the efficient technology. Final Report Page E-5 Figure E-1. Payback Acceptance Curve for Residential Sector Figure E-2. Payback Acceptance Curve for Commercial Sector Source: Guidehouse analysis 2023 Since the payback time of a technology can change over time, as technology costs or energy costs change over time, the equilibrium market share can also change over time. The 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 Ma r k e t S h a r e Payback Time in Years 0.0 0.2 0.4 0.6 0.8 1.0 1.2 Ma r k e t S h a r e Payback Time in Years Final Report Page E-6 equilibrium market share is recalculated for every year of the forecast to ensure the dynamics of technology adoption take this effect into consideration. As such, equilibrium market share is a bit of an oversimplification since the whole system is dynamic. Thus, the equilibrium refers to the long run market share at each time step in the model. E.1.2 Retrofit and New Construction Technology Adoption Approach Retrofit technologies employ an enhanced version of the classic Bass diffusion model21,22 to simulate the S-shaped approach to equilibrium that is observed again and again for technology adoption. Figure E-3 and E-4 provide a stock/flow diagram illustrating the causal influences underlying the Bass model. In this model, market potential adopters flow to adopters by two primary mechanisms – adoption from external influences, such as marketing and advertising, and adoption from internal influences, or word-of-mouth. The fraction willing to adopt was estimated using the payback acceptance curves Figure E-1 and Figure E-2 illustrate. The marketing effectiveness and word-of-mouth parameters for this diffusion model were estimated drawing upon case studies where these parameters were estimated for dozens of technologies.23 Recognition of the positive, or self-reinforcing, feedback generated by the word- of-mouth mechanism is evidenced by increasing discussion of the concepts such as social marketing as well as the term viral, which has been popularized and strengthened most recently by social networking sites such as Twitter, Facebook, and YouTube. However, the underlying positive feedback associated with this mechanism has been ever present and a part of the Bass diffusion model of product adoption since its inception in 1969. 21 Bass, Frank (1969). "A new product growth model for consumer durables". Management Science 15 (5): p215– 227. 22 See Sterman, John D. Business Dynamics: Systems Thinking and Modeling for a Complex World. Irwin McGraw- Hill. 2000. p. 332. 23 See Mahajan, V., Muller, E., and Wind, Y. (2000). New Product Diffusion Models. Springer. Chapter 12 for estimation of the Bass diffusion parameters for dozens of technologies. This model uses a value of 0.10 for the word- of-mouth strength in the base case scenario. The Marketing Effectiveness parameter for the base case scenario varied between 0.019 and 0.048, depending on the sector (values were determined as part of the calibration process). These values compare reasonably with the “most likely” value of 0.021 (75th percentile value is 0.055) per Mahajan 2000. Final Report Page E-7 Figure E-3. Stock/Flow Diagram of Diffusion Model for Retrofits Source: Guidehouse E.1.3 Replace-on-Burnout (ROB) Technology Adoption Approach The dynamics of adoption for ROB technologies is somewhat more complicated than for NEW/RET technologies since it requires simulating the turnover of long-lived technology stocks. The DSMSim model tracks the stock of all technologies, both base and efficient, and explicitly calculates technology retirements and additions consistent with the lifetime of the technologies. Such an approach ensures that technology churn is considered in the estimation of market potential, since only a fraction of the total stock of technologies are replaced each year, which affects how quickly technologies can be replaced. A model that endogenously generates growth in the familiarity of a technology, analogous to the Bass approach described above, is overlaid on the stock tracking model to capture the dynamics associated with the diffusion of technology familiarity. Figure E-4 illustrates a simplified version of the model employed in DSMSim. Final Report Page E-8 Figure E-4.Stock/Flow Diagram of Diffusion Model for ROB Measures Source: Guidehouse E.1.4 Approach to Applying Customer Incentives One of the most important drivers for estimating net achievable potential is the approach for modeling incentives. Through various discussions with the IGC over the course of this project, Guidehouse chose the percentage of incremental cost approach for applying incentives in the model. This is where the rebate levels are set as a fixed percentage of the incremental cost of installing the efficient measure. Under this approach, the level of savings would be achieved by paying some level (50% or 65%, depending on Scenario) of incremental costs. It is possible to set the rebates at different levels, depending on the sector or end uses that are modeled. For example, there may be policy reasons why it would make sense to set rebate levels at higher amounts for end uses that would target markets that are in the highly inefficient category. For the 2023 CPA, IGC provided Guidehouse with historic project and incentive costs where they were available through program tracking data. Guidehouse used 50% incremental costs for the business as usual scenario, with the exception of both residential furnaces (Furnace 95 AFUE and Furnace 98 AFUE) which was set at 40% of incremental costs for all scenarios to ensure that the largest potential measure was cost effective throughout the study period. The behavioral measures had their adoption specified exogenously in the model as the adoption model uses a planned rollout rather than payback based approach. Planned rollout is used instead of the payback based approach for behavioral measures because there are no incentives for the behavioral measures. Final Report Page E-9 E.1.5 Model Calibration Any model simulating future product adoption faces challenges with calibration, as there is no future world against which one can compare simulated with actual results. For this potential Study, Guidehouse took a number of steps to ensure that forecast model results were reasonable, including: • A comparison of 2019-2021 historic program savings values by sector and end use against Guidehouse’s modeled program net savings potential. The residential sector had historical data for 2019-2021, while the commercial sector only had historical data for 2021. • Due to natural year-over-year variations in program achievement, rather than calibrating to a point estimate (i.e., tuning the model’s 2020 potential to IGC’s achieved 2020 savings), Guidehouse looked at the savings trend over the past 3 years of program achievement and calibrated the model to match the overall historical data. Guidehouse adjusted model parameters, including assumed technology diffusion coefficients, to obtain close agreement across a wide variety of metrics compared for the Business as Usual scenario. This process ensures that forecast net potential is grounded against real-world results considering the many factors that come into play in determining the likely adoption of energy efficiency measures, including both economic and non-economic factors. The model was calibrated to the historic program savings by sector and end use. For sector and end uses where there was no historic program savings, similar calibration coefficients were applied as for the other measures, so that the resulting potential was only a small proportion of the Business as Usual scenario potential in 2019-2021. Since the IGC program in 2019-2021 was still in its nascent phase, the level of adoption was too high at the modeled payback levels to align with historic program savings. To address this, a payback adder was added to most measures. A positive payback adder slows down the adoption rate, while a negative payback adder speeds up the adoption rate. The payback adders were calibrated for all measures to get energy savings closest to the historical data trend for 2019-2021. For sector and end uses with measures with historical data, the measures that historically had programs were calibrated to have more potential than measures without historical data, using the payback adder. Figure E-5 and Figure E-6 show the historic gas program savings from 2019-2021 by end use for the residential sector and commercial sectors, respectively, combined with the modeled net achievable potential from 2024-2044. Historic savings for the residential sector have increased year over year. Historic natural gas savings for the commercial sector have less data available due to the program being introduced in 2021. The calibrated results are lower than what could be achieved in the market due to the historical values being a pilot and still in a ramp up phase. In other scenarios, the historic budget constraints were reduced over a period of 10 years, and better show what is achievable by the current market. This was modeled by phasing out the payback adder linearly over 10 years starting 2019. For the high incentive, high adoption scenario, the payback adder was phased out over 4 years with a concave shape which means that most of the payback adder is removed in the last few years. This ensures the calibration period of 2019-2021 is as close as possible to the historical data, while also increasing the forecasted potential. Final Report Page E-10 Figure E-5. Natural Gas (MMTherms) Historic and Modeled Achievable Savings for Residential Sector Source: Guidehouse analysis 2023 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 Ga s E n e r g y ( M M T h e r m s ) Res - Appliance Res - Behavioral Res - Envelope Res - Hot Water Res - HVAC Historic Program Data Net Achievable Potential Forecast Final Report Page E-11 Figure E-6. Natural Gas (MMTherms) Historic and Modeled Achievable Savings for Commercial Sector Source: Guidehouse analysis 2023 E.2 Achievable Potential Savings – Business as Usual Scenario This section provides results pertaining to the Business as Usual scenario for natural gas net achievable potential at different levels of aggregation. Results are shown by sector, customer segment, end use, and by highest-impact measures. The Business as Usual Scenario represents where IGC would continue implementing their energy efficiency programs at comparable funding levels and for the most part continue to realize the energy savings that they have experienced from the past. E.2.1 Results by Sector Figure E-7 and Table E-1 show the natural gas percent of sales data is growing from 0.4% to 5.1% in 2044, or an average of 0.24% per year over the study horizon. Values shown below for net achievable potential are termed cumulative achievable potential, in that they represent the accumulation of each year’s annual incremental net achievable potential. As an example, an annual net achievable potential of 1.05% per year, for 10 years, would result in a cumulative net achievable potential of 10.5% of forecast sales. Economic potential, as defined in this Study can be thought of as a theoretical upper limit on potential if 100% of customers were willing to adopt the efficient measure regardless of payback and they chose to install the highest saving measure within a competition group (this is discussed in more detail in the Technical and Economic Potential chapters). The long run market potential considers 0.00 0.02 0.04 0.06 0.08 0.10 0.12 0.14 0.16 0.18 0.20 Ga s E n e r g y ( M M T h e r m s ) Com - Appliance Com - Behavioral Com - EnvelopeCom - Hot Water Com - HVAC Com - Kitchen Com - Process Historic Program Data Net Achievable Potential Forecast Final Report Page E-12 customers’ willingness to pay for an efficient measure and can be thought of as a bucket of potential from which programs can draw over time. Net achievable potential represents the draining of that bucket, the rate of which is governed by a number of factors, including the lifetime of measures (for ROB technologies), market effectiveness, incentive levels, and customer willingness to adopt, among others. If the cumulative net achievable potential ultimately reaches the economic potential, it will signify that all long run market potential in the bucket had been drawn down or harvested. Achievable gas savings potential reaches 5.1% of forecast sales by 2044, meaning that roughly 17% of economic potential has been harvested by the end of the potential study period (which represents 29.6% of sales in 2044). Figure E-7.Total Natural Gas Cumulative Net Achievable Potential as a Percentage of Forecast Natural Gas Sales Source: Guidehouse analysis 2023 Table E-1. Total Natural Gas Cumulative Net Achievable Potential as a Percentage of Natural Gas Sales Gas Energy Achievable Potential by Sector as a Percent of Total Sales (%) All Commercial Residential 2019 0.0% 0.0% 0.0% 2020 0.0% 0.0% 0.0% 2021 0.0% 0.0% 0.0% 2022 0.0% 0.0% 0.0% 2023 0.0% 0.0% 0.0% 2024 0.4% 0.0% 0.6% 2025 0.7% 0.0% 1.1% 2026 1.0% 0.1% 1.5% 2027 1.4% 0.1% 2.0% 0% 1% 2% 3% 4% 5% 6% 7% 8% Po t e n t i a l a s % o f S a l e s Commercial Residential Final Report Page E-13 2028 1.7% 0.1% 2.4% 2029 1.9% 0.1% 2.8% 2030 2.2% 0.1% 3.2% 2031 2.4% 0.2% 3.6% 2032 2.7% 0.2% 3.9% 2033 2.9% 0.2% 4.3% 2034 3.2% 0.2% 4.6% 2035 3.4% 0.3% 4.9% 2036 3.6% 0.3% 5.2% 2037 3.8% 0.3% 5.5% 2038 4.0% 0.4% 5.8% 2039 4.1% 0.4% 6.0% 2040 4.3% 0.5% 6.2% 2041 4.5% 0.5% 6.5% 2042 4.7% 0.6% 6.8% 2043 4.9% 0.7% 7.0% 2044 5.1% 0.7% 7.2% Source: Guidehouse analysis 2023 Figure E-8 and Table E-2 provide the total natural gas net achievable savings by sector (MMTherms/year). All savings reported in this potential study are net, meaning that the effect of possible free ridership is accounted for in the reported savings. The residential sector makes up the largest portion of applicable sales. The residential sector makes up the most net natural gas potential as well as having the highest percentage of sales. Gas furnaces in the residential sector show the largest amount of savings potential. Final Report Page E-14 Figure E-8. Cumulative Natural Gas Net Achievable Potential by Sector (MMTherms/year) Source: Guidehouse analysis Table E-2. Cumulative Natural Gas Net Achievable Potential by Sector (MMTherms/year) Commercial Residential 2019 0.0% 0.0% 2020 0.0% 0.0% 2021 0.0% 0.0% 2022 0.0% 0.0% 2023 0.0% 0.0% 2024 0.0% 0.6% 2025 0.0% 1.1% 2026 0.1% 1.5% 2027 0.1% 2.0% 2028 0.1% 2.4% 2029 0.1% 2.8% 2030 0.1% 3.2% 2031 0.2% 3.6% 2032 0.2% 3.9% 2033 0.2% 4.3% 2034 0.2% 4.6% 2035 0.3% 4.9% 2036 0.3% 5.2% 2037 0.3% 5.5% 2038 0.4% 5.8% 0 5 10 15 20 25 30 35 Sa v i n g s P o t e n t i a l ( M M T h e r m s / y e a r ) Commercial Residential Final Report Page E-15 2039 0.4% 6.0% 2040 0.5% 6.2% 2041 0.5% 6.5% 2042 0.6% 6.8% 2043 0.7% 7.0% 2044 0.7% 7.2% Source: Guidehouse analysis E.2.2 Results by Customer Segment Figure E-9 shows the cumulative net natural gas achievable savings potential by segment in the residential sector. Figure E-9. Cumulative Net Natural Gas Achievable Potential by Residential Customer Segment (MMTherms/year) Source: Guidehouse analysis 2023 Residential single family dominates the potential as well as the stock forecast. Most of the potential is in the HVAC and Envelope use, with furnaces and air sealing high on the top measures list, detailed in later sections. Figure E-10 shows the net natural gas potential for all of the commercial customer segments from 2024-2044. 0 5 10 15 20 25 30 35 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044Sa v i n g s P o t e n t i a l ( M M T h e r m s / y e a r ) Res-Single Family Res-Multi Family Final Report Page E-16 Figure E-10. Cumulative Net Natural Gas Achievable Potential by Commercial Customer Segment (MMTherms/year) Source: Guidehouse analysis 2023 The natural gas savings are dominated by the Manufacturing/Industrial sector, which again makes up most of the load in the Commercial sector. E.2.3 Results by End Use Figure E-11 shows the residential sector by end use for 2024-2044. Figure E-11. Cumulative Net Natural Gas Achievable Potential by Residential Sector End Use (MMTherms/year) Source: Guidehouse analysis 2023 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 Sa v i n g s P o t e n t i a l ( M M T h e r m s / y e a r ) Com-Retail Com-Other Com-Office Com-Manufacturing/Industrial Com-Lodging Com-Light/Converted Com-Healthcare Com-Food Service Com-Education 0 5 10 15 20 25 30 35 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 Sa v i n g s P o t e n t i a l ( M M T h e r m s / y e a r ) HVAC Hot Water Envelope Appliance Final Report Page E-17 Natural gas savings are largely the Envelope and HVAC end uses. The largest gain in HVAC end use is from the growth in adoption for Furnace 98 AFUE. The largest gain in Envelope end use is from the growth in adoption for air sealing measures. Figure E-12 shows the net potential savings by end use in the Commercial sector from 2024- 2044. Figure E-12. Cumulative Net Natural Gas Achievable Potential by Commercial Sector End Use (MMTherms/year) Source: Guidehouse analysis 2023 Natural gas savings are largely the HVAC and Behavioral end uses. The largest gain in HVAC end use is from the growth in adoption for Boiler, Large measures. E.2.4 Results by Measure Figure E-13 shows the top 20 ranking natural gas savings measures along with their cumulative net achievable gas energy potential in 2024. The top achievable measures are Building Operator Certification and Boiler, Large measures. In the commercial sector, the growth in savings is split evenly between the different end uses, except for behavioral which experiences relatively larger growth due to its adoption being specified exogenously in the model. When interpreting these measures and comparing to their technical and economic potential, it is important to remember that some measures, it is important to remember that adoption is not just based solely on economics. Some measures are low in achievable potential compared to economic potential due to there being high barriers of entry to adopting a technology, the customer does not know about the technology, or due to the model calibration with limited historical data. 0 0 0 1 1 1 1 1 2 2 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 Sa v i n g s P o t e n t i a l ( M M T h e r m s / y e a r ) Process Kitchen HVAC Hot Water Envelope Behavioral Appliance Final Report Page E-18 Figure E-13. Top 20 Energy Efficiency Measures for Natural Net Achievable Potential by 2024 (MMTherms/year) Source: Guidehouse analysis 2023 E.2.5 Budget Estimates Guidehouse developed estimates of energy efficiency program funding needed to support the various levels of net achievable potential to be obtained during the study period. Table E-3 presents the estimated funding levels for incentives, program administration and portfolio administration under the Business as Usual scenario. These estimates were calculated in the DSMSim model and reflect calibrated incentive levels based on the percent of incremental cost approach described in this earlier in this report. The incentive budgets reflect the amount of spending that would result from the level of adoption for each measure that make up the net achievable potential estimates. Incentive values vary over time due to changes in the mix of measures. The administration budgets are based on historical expenditures for administration Final Report Page E-19 reported by IGC and applied on a measure level based on unit energy savings for each measure. The table below is the total portfolio budget for natural gas programs. As the table shows, the total simulated funding that corresponds with the Business as Usual scenario net achievable potential is just over $10.3 million in 2024, decreasing slightly but keeping to a similar level year to year depending on the level of adoption. The share of incentives compared to the total budget remains steady over time. Table E-3. Estimated Program Funding, Business as Usual Scenario (Thousands $) Incentives Administration Annual Total 2024 8,196 2,117 10,313 2025 7,598 2,026 9,624 2026 7,651 2,060 9,711 2027 7,604 2,064 9,668 2028 7,496 2,051 9,547 2029 7,128 1,975 9,103 2030 7,007 1,958 8,965 2031 7,028 1,977 9,005 2032 7,112 2,010 9,122 2033 7,325 2,075 9,399 2034 7,462 2,121 9,582 2035 7,314 2,087 9,401 2036 7,084 2,034 9,117 2037 6,882 1,995 8,877 2038 6,708 1,963 8,671 2039 6,743 1,967 8,710 2040 6,982 2,035 9,017 2041 7,485 2,174 9,658 2042 7,789 2,266 10,055 2043 7,666 2,255 9,921 2044 7,524 2,243 9,767 E.3 Achievable Potential Savings – Scenario Results Guidehouse conducted three additional scenario analysis in addition to the Business as Usual case scenario results described above. The four scenarios are described in detail below: • Business as Usual: This scenario is aligned and calibrated closely with IGC’s historic program activity using IGC’s program data, where available, with calibration to IGC’s historic program accomplishments on a sector and end use basis. Incentive levels are defined as Final Report Page E-20 50% of measure incremental cost, with the exception of Residential Furnace which was set at 40% of incremental cost to ensure the largest potential measure was cost effective throughout the study period. While this scenario represents no intentionally defined changes to the model, it does reflect an assumption that future program budgets will be closely aligned with IGC’s historic EE program spending. • Unconstrained Historical Budget: This scenario reflects a ramp up of customer adoption of natural gas energy efficiency over a 10 year period from the start of the EE program (through 2029), driven by increased IGC program activity without constraining program spending to historic levels. Incentive levels are consistent with Business as Usual Scenario. • Medium Adoption: This scenario increases the adoption parameters compared to the unconstrained historical budget scenario, and increases model parameter values relating to customer awareness and willingness to adopt energy efficient technologies. Incentive levels are consistent with Business as Usual Scenario. • High Incentive, High Adoption: this scenario reflects the savings possible by increasing the incentives from 50% of measure incremental cost to 65% of incremental cost, and further increasing the customer awareness and willingness to adopt energy efficiency measures to the highest values based on Guidehouse’s experience and rules of thumb. Residential Furnace was kept at 40% of incremental cost to ensure it remained cost effective. E.3.1 Natural Gas Energy Scenario Analyses Results Figure E-14 and Figure E-15 compare the natural gas net savings results from the four different scenarios to the Business as Usual case technical and economic potential. In Figure E-15, the slight variation in incremental savings over the study period for the Business as Usual and Unconstrained Historical Budget scenario is driven primarily by the HVAC end use and the variation in retail rates which was informed by the avoided costs. For the Medium Adoption Scenario, achievable potential decreases after 2035 due to the Commercial Energy Management System (EMS) measure’s rapid adoption, leading to this technology becoming saturated in the market prior to the end of the study cycle. This results in the Commercial HVAC end use potential to trend down significantly, as this measure representing as much as 10% of overall portfolio savings. For the High Incentive, High Adoption scenario, the overall first year achievable potential decreases after 2027, due primarily to two measures with significant impact (Commercial Steam Trap and EMS) becoming saturated. Final Report Page E-21 Figure E-14. Cumulative Net Natural Gas Energy Achievable Savings by Scenario Source: Guidehouse analysis 2023 Figure E-15. Incremental Net Natural Gas Energy Achievable Savings by Scenario Figure E-16 and Figure E-17 show the net natural gas energy potential for the residential sector and commercial sectors, respectively. As the incentive percent of incremental cost, the maximum long run market share decreases for measures. For residential, the HVAC end use drives the decreases in potential. For commercial, the economic potential decreases for all end uses and is primarily driven by HVAC and envelope end uses. 0 50 100 150 200 250 300 350 Sa v i n g s P o t e n t i a l ( M M T h e r m s / y e a r ) Technical Economic Business as Usual Unconstrained Historic Budget Medium Adoption High Adoption, High Incentive - 1 2 3 4 5 6 7 8 Sa v i n g s P o t e n t i a l ( M M t h e r m s / y e a r ) Business as Usual Unconstrained Historic Budget Medium Adoption High Incentive, High Adoption Final Report Page E-22 Figure E-16. Residential Natural Cumulative Gas Energy Results by Scenario (MMTherms/year) Source: Guidehouse analysis 2023 Figure E-17. Commercial Natural Gas Cumulative Energy Results by Scenario (MMTherms/year) Source: Guidehouse analysis 2023 E.3.2 Budget Comparison – All Scenarios Table E-4 summarizes results from the Unconstrained Historic Budget, Medium Adoption and High Incentive, High Adoption scenarios relative to the Business as Usual scenario. Compared to the Business as Usual scenario, the total spending over the study period is 1.6 times higher for the Unconstrained historical budget scenario, times 1.7 higher for the High Adoption scenario, and 2.2 times higher for the High Incentive, High Adoption scenario. Compared to the - 50 100 150 200 250 Sa v i n g s P o t e n t i a l ( M M T h e r m s / y e a r ) Technical Economic Business as Usual Unconstrained Historic Budget Medium Adoption High Adoption, High Incentive - 20 40 60 80 100 Sa v i n g s P o t e n t i a l ( M M T h e r m s / y e a r ) Gas Results -Commercial, All Scenarios Technical Economic Business as Usual Unconstrained Historic Budget Medium Adoption High Adoption, High Incentive Final Report Page E-23 Business as Usual scenario, the growth in savings over the study period is 2.4 times higher for the Unconstrained historical budget scenario, 2.7 times higher for the High Adoption scenario, and 3.3 times higher for the High Incentive, High Adoption scenario. Table E-4. Total Portfolio Spending By Scenario (Thousands $) Business as Usual Unconstrained Historic Budget Medium Adoption High Incentive, High Adoption 2024 10,313 10,740 12,639 25,459 2025 9,624 10,221 11,952 24,979 2026 9,711 10,701 12,406 25,403 2027 9,668 11,298 13,023 25,390 2028 9,547 12,207 14,075 24,897 2029 9,103 13,653 15,963 23,597 2030 8,965 14,788 17,215 22,489 2031 9,005 15,136 17,326 21,575 2032 9,122 15,550 17,541 20,756 2033 9,399 16,123 17,955 20,301 2034 9,582 16,560 18,259 19,888 2035 9,401 16,546 18,107 19,352 2036 9,117 16,374 17,790 18,681 2037 8,877 16,215 17,454 18,181 2038 8,671 16,084 17,098 17,765 2039 8,710 16,211 16,960 17,715 2040 9,017 16,848 17,316 18,011 2041 9,658 17,749 17,949 18,819 2042 10,055 18,302 18,259 19,267 2043 9,921 18,190 17,923 19,068 2044 9,767 18,126 17,692 18,946 The Portfolio UCT was calculated for each year of the study period. The avoided costs were calculated based on the measures that were adopted in each achievable scenario. The program costs were also calculated based on the number of installations. Since only measures that are cost-effective are in the achievable potential, this results in the UCT ranging from 1.19 to 2.09. Table E-5. Benefit-Cost Ratios By Scenario Scenario 1: Business as Usual Scenario 2: Unconstrained Historic Budget Scenario 3: Medium Adoption Scenario 4: High Incentive, High Adoption 2024 1.24 1.28 1.29 1.62 2025 1.21 1.28 1.30 1.65 Final Report Page E-24 2026 1.19 1.31 1.34 1.68 2027 1.19 1.36 1.41 1.70 2028 1.19 1.45 1.52 1.71 2029 1.20 1.57 1.67 1.72 2030 1.22 1.67 1.78 1.72 2031 1.23 1.71 1.82 1.70 2032 1.25 1.74 1.86 1.68 2033 1.26 1.76 1.88 1.67 2034 1.28 1.79 1.91 1.67 2035 1.29 1.82 1.95 1.68 2036 1.30 1.87 1.99 1.70 2037 1.33 1.91 2.03 1.72 2038 1.35 1.96 2.06 1.75 2039 1.36 1.99 2.07 1.77 2040 1.38 2.00 2.05 1.79 2041 1.39 2.01 2.03 1.79 2042 1.41 2.02 2.02 1.80 2043 1.43 2.06 2.04 1.83 2044 1.46 2.09 2.05 1.85 Final Report Page I ATTACHMENT A Final Report Page J ATTACHMENT B