Maximum Economically Achievable Electricity Savings from

Unconstrained Investmentin Energy Efficiency

2012 - 2031

REVISED ANALYSISJanuary 19, 2011

Contents• Overview• Approach• Results• Methodology• Revisions to Analysis Presented on December 20, 2010• Major Drivers of Long-Term Changes in Opportunities• Issues

2

Overview

3

DRP Context

• VELCO unconstrained savings forecast constitutes a “boundary case” in the Public Service Board’s DRP process

• It is the first of four efficiency resource plans to be developed, analyzed, and compared with the maximum achievable analysis

4

• Flat budget to acquire all economically achievable potential across 20 years

• Ramp up across 5 years to achieve 3% savings, relative to annual energy use

• Status quo budgets adjusted for inflation

Additional Scenarios

5

• PSB DRP process created after VELCO engaged VEIC to conduct the analysis for unconstrained potential

• Necessitated expansion of scope of work to include updating costs and savings estimates over time for key efficiency technologies, applicable across DRP scenario—especially lighting

History

6

Approach

7

Operating definition:The maximum amount of cost-effective electricity savings that can be achieved, as quickly as possible, by deploying the most aggressive program strategies available in all major residential and business markets.

Maximum Economically Achievable Efficiency Savings

8

IF avoided costs are constant or rising in real terms,

all else being equal,

AND the sooner and faster maximum achievable savings

are achieved,

THEN the greater the resulting net benefits.*

Maximum achievable penetration rates are the result of informed professional judgment about what’s possible

with the most aggressive intervention strategies in each market.

*This is automatically true, due to discounting

Guiding Principles

9

General Approach

Same basic approach as analysis used in 2009 Forecast 20:

•Integration with VELCO 2010 Forecast

•Updated efficiency technology characterizations

•Two-stage analysis of measures / measure bundles

•Conceptual program design

•Market penetration rates

10

Integration with VELCO 2010 Forecast• Preliminary 2010 sales and peak demand forecast

(Itron)

• VEIC worked closely with Itron to coordinate energy sales baseline energy intensities with savings analysis baselines

• This time Itron prepared a forecast adjusted for effects of continued EEU investments of $40 million annually throughout the period

• Along with an unadjusted forecast, without the effects of any continuation of Vermont DSM investment in efficiency

11

Development of 90 / 10 Scenario

• Indicates expected summer peak demand savings under extreme weather conditions

• Assumes that the 90 / 10 DSM savings have the same percentage increase over the 50 / 50 DSM savings as the 90 / 10 forecast has over the 50 / 50 forecast

12

Updated Characterizationsof Efficiency Technology

• Re-assessed future changes in baseline

• Characterized additional measures (including solar residential hot water)

13

Two-stage Analysis of Measures / Measure Bundles

• Assess the cost-effectiveness of efficiency measures or measure bundles

• Predict maximum penetration rates with most aggressive conceptual program designs specified for each market

Same approach as with original Forecast 20 and to be conducted in the analysis of

other efficiency resource plans in the DRP process.

14

Avoided Costs Used in this Analysis

From 2009 Regional Analysis of Avoided Costs (Synapse Energy Economics)

Expressed at same level as VELCO forecast

Winter On-Peak

Energy

Winter Off-Peak

EnergySummer On-Peak

Summer Off-Peak

Summer Gener.

CapacityT&D

Capacity$/kWh $/kWh $/kWh $/kWh $/kW-yr $/kW-yr

2012 0.0815 0.0628 0.0805 0.0582 39.60 181.51 2013 0.0818 0.0665 0.0827 0.0637 18.70 181.43 2014 0.0823 0.0675 0.0837 0.0639 18.71 181.34 2015 0.0823 0.0681 0.0854 0.0639 20.16 181.25 2016 0.0828 0.0693 0.0885 0.0651 21.64 181.14 2017 0.0843 0.0711 0.0900 0.0678 21.65 181.10 2018 0.0877 0.0728 0.0916 0.0700 23.12 180.99 2019 0.0882 0.0744 0.0939 0.0710 23.14 180.90 2020 0.0884 0.0746 0.0936 0.0710 24.60 180.79 2021 0.0871 0.0737 0.0920 0.0716 26.07 180.71 2022 0.0880 0.0756 0.0942 0.0727 27.55 180.61 2023 0.0908 0.0763 0.0979 0.0751 29.02 180.52 2024 0.0955 0.0778 0.1036 0.0796 30.50 180.43 2025 0.0971 0.0789 0.1058 0.0816 45.06 180.35 2026 0.0987 0.0801 0.1081 0.0836 59.65 180.25 2027 0.1003 0.0813 0.1105 0.0857 74.26 180.16 2028 0.1020 0.0825 0.1129 0.0878 88.89 180.06 2029 0.1037 0.0837 0.1153 0.0900 103.56 179.97 2030 0.1054 0.0850 0.1178 0.0922 116.78 179.88 2031 0.1072 0.0862 0.1204 0.0945 116.88 179.78 2032 0.1090 0.0875 0.1230 0.0968 116.98 179.69 2033 0.1108 0.0888 0.1257 0.0992 117.08 179.59 2034 0.1126 0.0901 0.1284 0.1017 117.18 179.50 2035 0.1145 0.0915 0.1312 0.1042 117.28 179.41 2036 0.1164 0.0928 0.1340 0.1068 117.38 179.31 2037 0.1183 0.0942 0.1370 0.1094 117.48 179.22 2038 0.1203 0.0956 0.1399 0.1121 117.59 179.11 2039 0.1223 0.0970 0.1430 0.1149 117.69 179.02 2040 0.1244 0.0985 0.1461 0.1177 117.69 178.92 2041 0.1264 0.0999 0.1493 0.1206 117.69 178.83

Year

15

Conceptual Program Design

• Program design incorporates incentives covering 100% of installed or incremental costs, depending on market.

• Exceptions where experience suggests customers will adopt measures with less than 100% cost reimbursement

16

Example: Incentives for large C&I customer retrofitsProgram will “buy down” customer investment costs to

1 year, enabling customers to fund their contribution to efficiency investments out of operating budgets.

Example: Incentives for large C&I customer retrofitsProgram will “buy down” customer investment costs to

1 year, enabling customers to fund their contribution to efficiency investments out of operating budgets.

Market Penetration Rates

Retrofit MarketsAnnual pace and acceleration in market penetration is discretionary and constrained only by infrastructure readiness.

Lost Opportunity Markets•Replacements: Pace depends on natural turnover of existing equipment stock

•New Construction: Pace depends on number of homes and business facilities

17

Residential Existing HomesRetrofit

•Piggyback on fossil heating retrofit program designed to retrofit the entire Vermont housing stock across 20 years•Direct installation of all cost-effective electric efficiency measures•Whole-house re-lighting•Early replacement of appliances, AC•Electric water heating conversion to solar or natural gas

Products•Target all existing homes not reached through the retrofit programs•Lighting

18

Commercial & Industrial Existing Facilities

Retrofit•Plan on achieving 80 – 90% participation among targeted eligible customers in as short a time as possible•Ramp up from current levels within 3 years to a maximum sustainable rate to reach that target, backing down gradually throughout the rest of the 20-year horizon

Lost Opportunity•Terminal market penetration rates approach 80 – 90% for all but infra-marginal (not most efficient) alternatives

•The EEU could ramp up to these maximum rates in 3 – 5 years

19

Improvements in Residential Efficiency Analysis(over 2009 Forecast 20)

• Lighting - In F20, program savings for standard spiral CFLs

ended in 2014 (after first phase of EISA regulations). Based on recent evaluations and negotiations with DPS, CFL (standard and specialty) assumed to continue (with the EISA compliant baseline shift) until 2019.

- SSL lighting re-characterized- Recessed down light added

• Appliances- New CEE tiers added / adjusted 20

Improvements in Residential Efficiency Analysis(over 2009 Forecast 20)

• Other additions- Air sealing and insulation measures for electric heat - Cooling savings from shell measures- Solar hot water as an efficiency measure

• Separated low-income from existing homes

• Matched RNC lighting and product assumptions to products program

21

Improvements in C&I Efficiency Analysis(over 2009 Forecast 20)

• Lighting- New measures characterized for SSL for: down-lighting,

screw-in, linear fluorescent replacement, refrigerated case light fixtures

- Revised assumptions for LED costs and efficacy changes over time, based on revised Multi-Year Program Plan for SSL R&D (DOE EERE, March 2010)

- New measures characterized for reduced-wattage T8 lamp and lamp / ballast

22

ExampleExisting T12 lighting is replaced due to EISA phase-out of T12 lamps, and lower-wattage / lumen replacements are suitable, rather than straight T8 lamp / ballast replacements.

ExampleExisting T12 lighting is replaced due to EISA phase-out of T12 lamps, and lower-wattage / lumen replacements are suitable, rather than straight T8 lamp / ballast replacements.

Improvements in C&I Efficiency Analysis(over 2009 Forecast 20)

• HVAC measure characterizations updated, future adjustments made for changing federal standards

• Due to advances in efficient technologies, new retrofit opportunities assumed to become available for more recently installed equipment,10 to 15 years out

• Assumed that measure costs would increase gradually over time (in real dollars), based on an expectation of a gradual increase in the cost of savings due to increasing baselines. 23

Additional Savings— Other Sources not Considered

Other sources of cost-effective efficiency savings that were not considered in this analysis—or in Itron’s forecast—that would increase maximum achievable efficiency savings:

•Accelerating the adoption of more efficient standards for buildings and equipment•New, undiscovered, unidentified technologies emerging beyond 2020•Changes in the load profiles of equipment and appliances with the introduction of real-time pricing and usage displays

24

Results

25

The Big Picture: 2012 - 2031

2,317 GWh / year

390 MW / year Summer Peak

390 MW / year Winter Peak

26

Societal TestElectric System

Test

PV of Net Benefits ($M)

$2,113 $1,318

Benefit-Cost Ratio 2.42 1.86

Statewide Incremental Savings

27

Incremental Annual MWh, Summer Peak MW and Winter Peak MW Savings

RES MWh

RES Summer

Peak MW

RES Winter

Peak MW C&I MWh

C&I Summer

Peak MWC&I Winter Peak MW Total MWh

Total Summer

Peak MW

Total Winter

Peak MW2012 67,118 9 14 134,746 29 20 201,864 38 34 2013 92,406 13 19 161,813 35 24 254,219 48 43 2014 111,245 15 22 173,400 38 26 284,645 53 48 2015 122,718 15 24 163,365 36 24 286,083 51 48 2016 147,846 19 29 152,099 33 23 299,946 52 52 2017 175,010 22 34 134,560 29 20 309,570 51 54 2018 188,624 24 37 125,874 28 19 314,498 52 56 2019 197,101 26 38 119,513 26 18 316,614 52 56 2020 106,320 11 18 109,519 24 16 215,839 35 34 2021 107,925 11 18 99,340 21 15 207,264 32 33 2022 109,672 11 19 93,711 20 14 203,383 31 33 2023 111,403 12 19 90,380 19 13 201,783 31 32 2024 111,834 11 19 84,940 18 13 196,774 29 32 2025 114,050 12 20 84,779 18 12 198,829 30 32 2026 115,705 12 20 83,766 18 12 199,470 30 32 2027 117,017 12 20 84,649 18 12 201,666 30 32 2028 118,791 12 21 86,931 19 13 205,722 31 34 2029 120,581 13 21 89,797 19 13 210,378 32 34 2030 122,351 13 21 92,902 20 14 215,253 33 35 2031 123,761 13 22 96,428 21 14 220,189 34 36

Statewide Cumulative Savings

28

Cumulative Annual MWh, Summer Peak MW and Winter Peak MW Savings

RES MWh

RES Summer

Peak MW

RES Winter

Peak MW C&I MWh

C&I Summer

Peak MWC&I Winter Peak MW Total MWh

Total Summer

Peak MW

Total Winter

Peak MW2012 67,118 9 14 134,746 29 20 201,864 38 34 2013 148,564 21 31 296,558 64 44 445,123 85 75 2014 245,086 34 51 469,792 102 70 714,878 136 121 2015 353,706 48 73 629,117 137 94 982,823 185 167 2016 472,998 62 98 773,819 169 116 1,246,817 230 214 2017 606,790 77 126 895,699 196 134 1,502,489 272 261 2018 737,514 92 155 1,004,837 220 151 1,742,351 311 306 2019 860,535 107 182 1,105,478 241 166 1,966,013 349 348 2020 514,377 55 94 1,194,790 260 180 1,709,167 315 273 2021 570,822 59 106 1,273,915 277 192 1,844,737 336 297 2022 621,134 63 116 1,334,255 288 201 1,955,390 351 317 2023 675,186 68 127 1,391,872 299 211 2,067,058 368 338 2024 729,976 74 138 1,437,348 308 219 2,167,324 382 357 2025 783,761 80 148 1,476,383 315 226 2,260,145 396 374 2026 834,707 86 158 1,503,380 320 230 2,338,087 407 388 2027 883,984 92 167 1,467,893 314 225 2,351,876 405 392 2028 930,508 97 176 1,421,321 305 217 2,351,829 402 393 2029 973,597 101 185 1,371,793 296 208 2,345,390 397 393 2030 997,218 104 190 1,326,974 288 200 2,324,192 392 390 2031 1,020,453 107 196 1,296,307 283 194 2,316,759 390 390

Residential Incremental MWh Saved, by End Use

29

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2012 2016 2021 2031

Net

MW

h

Water Heating

Ventilation

Space Heating

Refrigeration

Outdoor Lighting

Other Appliances

Kitchen/Laundry

Indoor Lighting

Heating/DHW

Heating/Cooling/DHW

Cooling

Consumer Electronics

Residential Incremental MWh Saved, by End Use

30

End Use 2012 2016 2021 2031Consumer Electronics 7,812 33,555 34,833 37,107 Cooling 85 351 384 428 Heating/Cooling/DHW 28 52 76 137 Heating/DHW 36 56 72 99 Indoor Lighting 48,839 83,592 15,481 26,202 Kitchen/Laundry 1,025 6,404 10,910 11,562 Other Appliances 2,064 9,527 9,817 10,443 Outdoor Lighting 987 1,181 912 1,516 Refrigeration 5,425 9,310 10,331 9,099 Space Heating 394 2,131 2,695 2,951 Ventilation 25 89 136 120 Water Heating 361 1,600 22,278 24,098

Residential Cumulative MWh Saved, by End Use

31

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2012 2016 2021 2031

Net

MW

h

Water Heating

Ventilation

Space Heating

Refrigeration

Outdoor Lighting

Other Appliances

Kitchen/Laundry

Indoor Lighting

Heating/DHW

Heating/Cooling/DHW

Cooling

Consumer Electronics

Residential Cumulative MWh Saved, by End Use

32

End Use 2012 2016 2021 2031Consumer Electronics 7,812 101,772 173,636 187,380 Cooling 85 1,079 2,936 5,352 Heating/Cooling/DHW 28 200 572 1,784 Heating/DHW 36 232 603 1,583 Indoor Lighting 48,839 275,644 98,537 208,909 Kitchen/Laundry 1,025 14,506 65,545 140,170 Other Appliances 2,064 28,866 77,365 101,939 Outdoor Lighting 987 5,221 11,124 12,402 Refrigeration 5,425 34,547 64,696 79,305 Space Heating 394 6,067 18,922 45,257 Ventilation 25 271 922 1,275 Water Heating 361 4,558 55,927 235,096

Residential Incremental Summer Peak MW Saved,by End Use

33

-

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

20.00

2012 2016 2021 2031

Net

MW

Water Heating

Ventilation

Space Heating

Refrigeration

Outdoor Lighting

Other Appliances

Kitchen/Laundry

Indoor Lighting

Heating/DHW

Heating/Cooling/DHW

Cooling

Consumer Electronics

Residential Incremental Summer Peak MW Saved,by End Use

34

End Use 2012 2016 2021 2031Consumer Electronics 0.76 3.28 3.40 3.61 Cooling 0.16 0.62 0.69 0.78 Heating/Cooling/DHW 0.06 0.12 0.17 0.31 Heating/DHW - - - - Indoor Lighting 7.46 12.54 2.00 3.55 Kitchen/Laundry 0.13 0.77 1.31 1.39 Other Appliances 0.04 0.08 0.09 0.09 Outdoor Lighting 0.01 0.02 0.02 0.03 Refrigeration 0.67 1.15 1.28 1.13 Space Heating 0.01 0.06 0.08 0.10 Ventilation 0.00 0.01 0.02 0.01 Water Heating 0.03 0.14 1.89 2.04

Residential Cumulative Summer Peak MW Saved,by End Use

35

-

20.00

40.00

60.00

80.00

100.00

120.00

2012 2016 2021 2031

Net

MW

Water Heating

Ventilation

Space Heating

Refrigeration

Outdoor Lighting

Other Appliances

Kitchen/Laundry

Indoor Lighting

Heating/DHW

Heating/Cooling/DHW

Cooling

Consumer Electronics

Residential Cumulative Summer Peak MW Saved,by End Use

36

End Use 2012 2016 2021 2031Consumer Electronics 0.76 9.69 16.49 17.75 Cooling 0.16 1.93 5.27 9.74 Heating/Cooling/DHW 0.06 0.46 1.31 4.10 Heating/DHW - - - - Indoor Lighting 7.46 42.65 13.50 25.53 Kitchen/Laundry 0.13 1.79 7.90 16.86 Other Appliances 0.04 0.30 0.73 0.97 Outdoor Lighting 0.01 0.07 0.16 0.23 Refrigeration 0.67 4.28 8.02 9.83 Space Heating 0.01 0.16 0.54 1.46 Ventilation 0.00 0.03 0.11 0.15 Water Heating 0.03 0.40 4.83 20.10

C&I Incremental MWh Saved, by End Use

37

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

2012 2016 2021 2031

Net

MW

h

Water Heating

Ventilation

Space Heating

Refrigeration

Outdoor Lighting

Miscellaneous

Industrial Process

Indoor Lighting

Elec Total

Cooling

C&I Incremental MWh Saved, by End Use

38

End Use 2012 2016 2021 2031Cooling 8,148 10,475 7,553 8,769 Elec Total 445 711 666 650 Indoor Lighting 84,680 79,960 47,111 41,784 Industrial Process 11,718 20,391 12,645 13,411 Miscellaneous 1,623 1,808 1,890 2,550 Outdoor Lighting 8,056 10,032 6,890 5,983 Refrigeration 5,849 12,414 11,280 13,149 Space Heating 146 247 208 211 Ventilation 11,404 13,115 8,279 6,884 Water Heating 2,677 2,946 2,818 3,037

C&I Cumulative MWh Saved, by End Use

39

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2012 2016 2021 2031

Net

MW

h

Water Heating

Ventilation

Space Heating

Refrigeration

Outdoor Lighting

Miscellaneous

Industrial Process

Indoor Lighting

Elec Total

Cooling

C&I Cumulative MWh Saved, by End Use

40

End Use 2012 2016 2021 2031Cooling 8,148 52,523 84,707 98,398 Elec Total 445 3,019 5,087 5,161 Indoor Lighting 84,680 447,689 671,556 580,411 Industrial Process 11,718 83,480 166,913 172,230 Miscellaneous 1,623 9,797 10,709 14,430 Outdoor Lighting 8,056 45,790 84,669 92,813 Refrigeration 5,849 50,389 102,944 131,587 Space Heating 146 1,145 2,280 3,136 Ventilation 11,404 65,746 116,450 156,168 Water Heating 2,677 14,241 28,598 41,972

C&I Incremental Summer Peak MW Saved, by End Use

41

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2012 2016 2021 2031

Net

MW

Water Heating

Ventilation

Space Heating

Refrigeration

Outdoor Lighting

Miscellaneous

Industrial Process

Indoor Lighting

Elec Total

Cooling

C&I Incremental Summer Peak MW Saved, by End Use

42

End Use 2012 2016 2021 2031Cooling 5.5 7.7 5.3 5.4 Elec Total 0.1 0.2 0.2 0.2 Indoor Lighting 17.8 16.7 9.8 8.8 Industrial Process 2.7 4.7 2.9 3.1 Miscellaneous 0.2 0.2 0.2 0.3 Outdoor Lighting 0.1 0.1 0.1 0.0 Refrigeration 0.8 1.8 1.6 1.9 Space Heating 0.0 0.0 0.0 0.0 Ventilation 1.2 1.4 0.9 0.7 Water Heating 0.4 0.4 0.4 0.4

C&I Cumulative Summer Peak MW Saved, by End Use

43

-

50.0

100.0

150.0

200.0

250.0

300.0

2012 2016 2021 2031

Net

MW

Water Heating

Ventilation

Space Heating

Refrigeration

Outdoor Lighting

Miscellaneous

Industrial Process

Indoor Lighting

Elec Total

Cooling

C&I Cumulative Summer Peak MW Saved, by End Use

44

End Use 2012 2016 2021 2031Cooling 5.5 37.5 64.7 77.7 Elec Total 0.1 0.7 1.2 1.3 Indoor Lighting 17.8 93.6 139.9 120.9 Industrial Process 2.7 19.1 38.1 39.3 Miscellaneous 0.2 1.2 1.4 1.9 Outdoor Lighting 0.1 0.4 0.7 0.8 Refrigeration 0.8 7.2 14.7 18.9 Space Heating 0.0 0.0 0.0 0.0 Ventilation 1.2 6.9 12.1 16.5 Water Heating 0.4 1.9 3.8 5.6

Zonal Forecasts:Cumulative Annual GWh Savings,

Summer Peak MW Savings, Winter Peak MW Savings

45

46

2

HighgateP

SouthernO

AscutneyN

RutlandM

Proctor (Florence)L

Central - BarnardK

MiddleburyJ

Chittenden\Addison GMPI

IBMH

BEDG

St. JohnsburyF

MontpelierE

MorrisvilleD

JohnsonC

St. AlbansB

NewportA

Vermont Potential Load Zones

47

Zonal Savings

A B

Newport Zone SavingsResidential

Year GWhSummer

Peak MWWinter

Peak MW2012 3 0.38 0.38 2013 6 0.84 0.84 2014 10 1.38 1.38 2015 14 1.93 1.93 2016 19 2.48 2.48 2017 24 3.08 3.08 2018 30 3.67 3.67 2019 35 4.30 4.30 2020 21 2.19 2.19 2021 23 2.36 2.36 2022 25 2.52 2.52 2023 27 2.74 2.74 2024 29 2.98 2.98 2025 31 3.22 3.22 2026 33 3.45 3.45 2027 35 3.67 3.67 2028 37 3.86 3.86 2029 39 4.04 4.04 2030 40 4.15 4.15 2031 41 4.26 4.26

StAlbans Zone SavingsResidential

Year GWhSummer

Peak MWWinter

Peak MW2012 4 1 1 2013 10 1 1 2014 16 2 2 2015 24 3 3 2016 32 4 4 2017 41 5 5 2018 50 6 6 2019 59 7 7 2020 35 4 4 2021 39 4 4 2022 43 4 4 2023 47 5 5 2024 51 5 5 2025 55 6 6 2026 59 6 6 2027 62 6 6 2028 66 7 7 2029 69 7 7 2030 71 7 7 2031 73 8 8

48

Zonal Savings

C D

Johnson Zone SavingsResidential

Year GWhSummer

Peak MWWinter

Peak MW2012 3 0.34 0.34 2013 6 0.77 0.77 2014 9 1.28 1.28 2015 13 1.80 1.80 2016 18 2.33 2.33 2017 23 2.91 2.91 2018 29 3.49 3.49 2019 33 4.10 4.10 2020 20 2.10 2.10 2021 22 2.28 2.28 2022 24 2.44 2.44 2023 27 2.67 2.67 2024 29 2.92 2.92 2025 31 3.17 3.17 2026 33 3.42 3.42 2027 36 3.64 3.64 2028 38 3.86 3.86 2029 39 4.06 4.06 2030 41 4.18 4.18 2031 42 4.31 4.31

Morrisville Zone SavingsResidential

Year GWhSummer

Peak MWWinter Peak

MW2012 2 0.33 0.33 2013 5 0.74 0.74 2014 9 1.24 1.24 2015 13 1.75 1.75 2016 18 2.27 2.27 2017 23 2.86 2.86 2018 29 3.45 3.45 2019 34 4.08 4.08 2020 20 2.10 2.10 2021 23 2.29 2.29 2022 25 2.48 2.48 2023 28 2.72 2.72 2024 30 2.99 2.99 2025 33 3.26 3.26 2026 35 3.53 3.53 2027 37 3.78 3.78 2028 40 4.02 4.02 2029 42 4.24 4.24 2030 43 4.39 4.39 2031 44 4.54 4.54

49

Zonal Savings

E F

Montpelier Zone SavingsResidential

Year GWhSummer

Peak MWWinter

Peak MW2012 7 1 1 2013 16 2 2 2014 26 4 4 2015 37 5 5 2016 49 7 7 2017 63 8 8 2018 76 10 10 2019 88 11 11 2020 52 6 6 2021 57 6 6 2022 62 6 6 2023 67 7 7 2024 72 7 7 2025 77 8 8 2026 82 9 9 2027 86 9 9 2028 90 10 10 2029 94 10 10 2030 95 10 10 2031 97 10 10

StJohnsbury Zone SavingsResidential

Year GWhSummer

Peak MWWinter Peak

MW2012 2 0.34 0.34 2013 6 0.76 0.76 2014 9 1.26 1.26 2015 13 1.77 1.77 2016 18 2.29 2.29 2017 23 2.86 2.86 2018 28 3.43 3.43 2019 33 4.04 4.04 2020 20 2.07 2.07 2021 22 2.25 2.25 2022 24 2.41 2.41 2023 26 2.63 2.63 2024 29 2.88 2.88 2025 31 3.13 3.13 2026 33 3.37 3.37 2027 35 3.60 3.60 2028 37 3.81 3.81 2029 39 4.01 4.01 2030 40 4.13 4.13 2031 41 4.26 4.26

50

Zonal Savings

G H

BED Zone SavingsResidential

Year GWhSummer

Peak MWWinter

Peak MW2012 3 0.39 0.39 2013 6 0.86 0.86 2014 10 1.41 1.41 2015 14 1.96 1.96 2016 19 2.51 2.51 2017 24 3.11 3.11 2018 29 3.68 3.68 2019 34 4.29 4.29 2020 20 2.17 2.17 2021 22 2.33 2.33 2022 24 2.48 2.48 2023 26 2.68 2.68 2024 28 2.90 2.90 2025 30 3.12 3.12 2026 32 3.33 3.33 2027 34 3.53 3.53 2028 35 3.70 3.70 2029 37 3.86 3.86 2030 37 3.95 3.95 2031 38 4.04 4.04

IBM Zone SavingsResidential

Year GWhSummer

Peak MWWinter

Peak MW2012 - - - 2013 - - - 2014 - - - 2015 - - - 2016 - - - 2017 - - - 2018 - - - 2019 - - - 2020 - - - 2021 - - - 2022 - - - 2023 - - - 2024 - - - 2025 - - - 2026 - - - 2027 - - - 2028 - - - 2029 - - - 2030 - - - 2031 - - -

51

Zonal Savings

I J

Bur GMP Zone SavingsResidential

Year GWhSummer

Peak MWWinter

Peak MW2012 10 1 1 2013 22 3 3 2014 36 5 5 2015 52 7 7 2016 69 9 9 2017 89 11 11 2018 108 13 13 2019 125 16 16 2020 75 8 8 2021 83 9 9 2022 90 9 9 2023 98 10 10 2024 105 11 11 2025 113 12 12 2026 120 12 12 2027 127 13 13 2028 133 14 14 2029 139 15 15 2030 143 15 15 2031 146 15 15

Middlebury Zone SavingsResidential

Year GWhSummer

Peak MWWinter

Peak MW2012 2 0.32 0.32 2013 5 0.72 0.72 2014 8 1.18 1.18 2015 12 1.64 1.64 2016 16 2.10 2.10 2017 20 2.60 2.60 2018 25 3.09 3.09 2019 29 3.60 3.60 2020 17 1.83 1.83 2021 19 1.96 1.96 2022 20 2.09 2.09 2023 22 2.26 2.26 2024 24 2.45 2.45 2025 25 2.64 2.64 2026 27 2.82 2.82 2027 28 2.99 2.99 2028 30 3.14 3.14 2029 31 3.27 3.27 2030 32 3.35 3.35 2031 32 3.43 3.43

52

Zonal Savings

K L

Central Zone SavingsResidential

Year GWhSummer

Peak MWWinter

Peak MW2012 6 1 1 2013 14 2 2 2014 24 3 3 2015 34 5 5 2016 45 6 6 2017 58 7 7 2018 71 9 9 2019 83 10 10 2020 49 5 5 2021 55 6 6 2022 59 6 6 2023 65 7 7 2024 70 7 7 2025 75 8 8 2026 80 8 8 2027 84 9 9 2028 89 9 9 2029 93 10 10 2030 95 10 10 2031 97 10 10

Florence Zone SavingsResidential

Year GWhSummer

Peak MWWinter

Peak MW2012 0.20 0.03 0.03 2013 0.43 0.06 0.06 2014 0.70 0.10 0.10 2015 1.01 0.14 0.14 2016 1.34 0.18 0.18 2017 1.72 0.22 0.22 2018 2.07 0.26 0.26 2019 2.40 0.30 0.30 2020 1.42 0.15 0.15 2021 1.56 0.17 0.17 2022 1.68 0.18 0.18 2023 1.81 0.19 0.19 2024 1.93 0.20 0.20 2025 2.04 0.22 0.22 2026 2.15 0.23 0.23 2027 2.24 0.24 0.24 2028 2.33 0.25 0.25 2029 2.41 0.26 0.26 2030 2.44 0.26 0.26 2031 2.46 0.27 0.27

53

Zonal Savings

M N

Rutland Zone SavingsResidential

Year GWhSummer

Peak MWWinter

Peak MW2012 8 1 1 2013 19 3 3 2014 31 4 4 2015 44 6 6 2016 59 8 8 2017 76 10 10 2018 92 11 11 2019 108 13 13 2020 65 7 7 2021 72 7 7 2022 78 8 8 2023 85 9 9 2024 92 9 9 2025 98 10 10 2026 105 11 11 2027 111 12 12 2028 117 12 12 2029 122 13 13 2030 125 13 13 2031 128 13 13

Ascutney Zone SavingsResidential

Year GWhSummer

Peak MWWinter

Peak MW2012 3 0 0 2013 6 1 1 2014 10 1 1 2015 15 2 2 2016 20 3 3 2017 26 3 3 2018 32 4 4 2019 37 5 5 2020 22 2 2 2021 25 3 3 2022 27 3 3 2023 30 3 3 2024 32 3 3 2025 35 4 4 2026 37 4 4 2027 40 4 4 2028 42 4 4 2029 44 5 5 2030 45 5 5 2031 46 5 5

54

Zonal Savings

O P

Southern Zone SavingsResidential

Year GWhSummer

Peak MWWinter

Peak MW2012 10 1 1 2013 23 3 3 2014 38 5 5 2015 55 7 7 2016 74 10 10 2017 95 12 12 2018 115 14 14 2019 135 17 17 2020 80 9 9 2021 89 9 9 2022 97 10 10 2023 106 11 11 2024 115 12 12 2025 123 13 13 2026 131 14 14 2027 139 14 14 2028 146 15 15 2029 153 16 16 2030 157 16 16 2031 161 17 17

Highgate Zone SavingsResidential

Year GWhSummer

Peak MWWinter

Peak MW2012 2 0.30 0.30 2013 5 0.67 0.67 2014 8 1.10 1.10 2015 11 1.53 1.53 2016 15 1.96 1.96 2017 19 2.43 2.43 2018 23 2.89 2.89 2019 27 3.37 3.37 2020 16 1.71 1.71 2021 18 1.84 1.84 2022 19 1.96 1.96 2023 21 2.12 2.12 2024 22 2.30 2.30 2025 24 2.48 2.48 2026 25 2.66 2.66 2027 27 2.81 2.81 2028 28 2.96 2.96 2029 29 3.09 3.09 2030 30 3.16 3.16 2031 31 3.24 3.24

Benefit–Cost Analysis

55

ProgramPV of Societal Benefits ($M)

PV of Electric Energy System Benefits ($M)

Residential

Residential New Construction $174 $24

Retail Products $1,108 $851

Existing Homes $218 $126

Low Income (SF and MF) $18 $10

Sub-Total Residential $1,518 $1,012

Commercial & Industrial

C&I New Construction $326 $280

C&I Efficient Equipment $873 $796

C&I Retrofit $881 $765

Sub-Total C&I $2,081 $1,841

EVT Core Supporting Services - -

Portfolio of Programs $3,599 $2,852

Benefits 2012 – 2031

56

ProgramPV of Societal

Costs ($M)PV of Electric Energy

System Costs ($M)

Residential

Residential New Construction $64 $64

Retail Products $208 $291

Existing Homes $76 $118

Low Income (SF and MF) $10 $17

Sub-Total Residential $359 $491

Commercial & Industrial

C&I New Construction $145 $118

C&I Efficient Equipment $322 $232

C&I Retrofit $358 $391

Sub-Total C&I $825 $741

EVT Core Supporting Services $303 $303

Portfolio of Programs $1,487 $1,535

Costs 2012 – 2031

57

Societal Net Benefits & Benefit-Cost Ratios

58

ProgramPV of Net Benefits

($M)Benefit-Cost Ratio

Residential

Residential New Construction $110 2.71

Retail Products $900 5.33

Existing Homes $142 2.86

Low Income (SF and MF) $7 1.73

Sub-Total Residential $1,160 4.23

Commercial & Industrial

C&I New Construction $181 2.25

C&I Efficient Equipment $551 2.71

C&I Retrofit $523 2.46

Sub-Total C&I $1,256 2.52

EVT Core Supporting Services* ($303) -

Portfolio of Programs $2,113 2.42

* Because societal costs are negative, BCR is meaningless

Electric System Net Benefits & Benefit-Cost Ratios

59

ProgramPV of Net

Benefits ($M)Benefit-Cost Ratio

Residential

Residential New Construction ($40) 0.38

Retail Products $560 2.92

Existing Homes $9 1.07

Low Income (SF and MF) ($7) 0.58

Sub-Total Residential $521 2.06

Commercial & Industrial

C&I New Construction $163 2.38

C&I Efficient Equipment $563 3.42

C&I Retrofit $374 1.96

Sub-Total C&I $1,099 2.48

EVT Core Supporting Services* ($303) -

Portfolio of Programs $1,318 1.86

* Because societal costs are negative, BCR is meaningless

Budget Projections 2012 – 2021

60

Millions of 2011$ Core Supporting ServicesRemaining Budget for C&I and

RES Markets

Year

Total Portfolio Budget

Admin/ Mgmt

Marketing, Outreach & Bus. Dev.

NRA Activities

Total Core Supporting

ServicesTotal C&I and RES

C&I Sector Budget

RES Sector Budget

2012 $109.1 $3.2 $13.3 $4.9 $21.3 $87.8 $68.9 $18.82013 $137.2 $3.2 $16.7 $5.1 $24.9 $112.3 $85.4 $26.92014 $155.3 $3.2 $18.9 $5.2 $27.2 $128.1 $92.5 $35.62015 $164.9 $3.2 $20.0 $4.8 $28.0 $136.9 $88.6 $48.32016 $163.9 $3.2 $19.9 $5.1 $28.2 $135.7 $81.1 $54.62017 $164.3 $3.2 $20.0 $5.2 $28.4 $136.0 $71.3 $64.72018 $159.5 $3.2 $19.4 $5.1 $27.7 $131.9 $66.5 $65.32019 $152.3 $3.2 $18.5 $5.4 $27.1 $125.2 $63.4 $61.82020 $130.0 $3.2 $15.7 $5.5 $24.4 $105.6 $58.4 $47.32021 $126.3 $3.2 $15.4 $5.4 $23.9 $102.4 $54.6 $47.8

Budget Projections 2022 – 2031

61

Millions of 2011$ Core Supporting ServicesRemaining Budget for C&I and

RES Markets

Year

Total Portfolio Budget

Admin/ Mgmt

Marketing, Outreach & Bus. Dev.

NRA Activities

Total Core Supporting

ServicesTotal C&I and RES

C&I Sector Budget

RES Sector Budget

2022 $125.5 $3.2 $15.3 $5.8 $24.2 $101.4 $52.2 $49.22023 $125.9 $3.2 $15.3 $5.9 $24.3 $101.5 $50.9 $50.72024 $119.6 $3.2 $14.5 $5.7 $23.4 $96.2 $46.0 $50.12025 $122.2 $3.2 $14.9 $6.1 $24.1 $98.1 $47.0 $51.02026 $123.8 $3.2 $15.0 $6.2 $24.4 $99.4 $47.4 $52.02027 $123.6 $3.2 $15.0 $6.1 $24.3 $99.4 $48.7 $50.72028 $127.2 $3.2 $15.5 $6.5 $25.1 $102.1 $50.3 $51.82029 $130.8 $3.2 $15.9 $6.6 $25.6 $105.1 $52.1 $53.02030 $132.3 $3.2 $16.1 $6.4 $25.7 $106.6 $54.2 $52.42031 $136.5 $3.2 $16.6 $6.8 $26.6 $109.9 $56.4 $53.5

Methodology

62

Residential Market Analysis

63

“Bottom-up” Approach•Estimate per measure savings each year

•Market categories: Efficient Products (EP), Existing Homes (EH), Low Income (LI), New Construction (RNC)

•EH & LI - Market penetrations = Program homes X percentage with unit X percentage ready for retrofit

•EP – Market penetrations = Estimated stock turnover and new stock for EP X percentage influenced by program, minus EH, LI, RNC penetrations where appropriate

• RNC – Market penetrations= Program homes X percent with unit X percent influenced by program

“Bottom-up” Annual Savings Calculation

Retrofit Measures: Per-measure savings

X Homes in programX Percentage homes with unit

X Percentage ready for replacement (cost effective)= Annual measure maximum achievable potential

64

Efficient Products: Per-measure savings

X Stock mortality (existing stock / measure life) + New stock (existing stock in Year X – existing stock in Year X-1)

X Percentage influenced by program= Annual measure maximum achievable potential

Residential New Construction:Per-measure savings

X Homes in the programX Percent of home with unit

X Percent influenced by program= Annual measure maximum achievable potential

Retrofit Example Heat Pump DHW Early Replacement (2012)

65

Annual Max Achievable Savings Potential = 176 MWh

Parameter Description Value Result

Per Measure Savings (kWh)

1914 1914

#homes Number of homes participating in HPwES program

1500 2,871,000

%electric DHW Percentage of homes with Electric DHW

0.31 890,010

%ready % of electric DHW with cost effective potential for retrofit

0.34 302,603

%HPDHW % of retrofits assumed to HP (as opposed to Natural Gas or Solar DHW)

0.58 175,509

Efficient Products ExampleClothes Washer (CEE Tier 3) (2013)

66

Annual Max Achievable Savings Potential = 686 MWh

Parameter Description Value Result

Stock Mortality

# existing units needing replacing each year:(# Homes x % Homes with CW) / Measure Life

= (294,500 * 0.92) / 14=19,458

19,458

New Stock New units purchased each year (due to new homes and more homes having unit):= Units in 2013 – units in 2014

=(294500 * 0.92) – (293000 * 0.92)= 1,412

20,870

% influenced by program

0.24 5,009

In program penetration

Divide out spillover (influenced but not in program) and subtract EH, LI and RNC penetrations

= (5009/1.2) – 216 – 202 – 69

3,686

Per Measure Savings (kWH)

186 186

Total Savings Potential

Penetration x Per Measure Savings =3686 * 186 685,596

Residential Market Technologies

39Efficient Product measures

43 Existing Homes measures

14 Low Income measures

30 Residential New Construction measures

67

C&I Market Analysis

68

“Top-down” Approach•Forecast sales and estimate potential % savings

•Determine cost by energy saved

•Break up analysis by market categories- New Construction

- Existing facilities• Retrofit opportunities

• Equipment opportunities

•Track eligible stock to avoid double-counting

•Interior lighting savings adjusted for “cooling bonus” or “heating penalty”

“Top-Down” Savings CalculationBuilding end-use MWh sales per year

X Applicability factor

X Feasibility factor

X Turnover or retrofit-not-complete factor

X Savings factor

X Penetration factor

= Annual measure maximum achievable potential

69

Example:High-Performance T8 vs. Standard T8

70

Parameter Description Value Cumulative Result

Building type/ end use electric forecast

Electricity sales for interior lighting for offices

100,000 MWh 100,000 MWh

Applicability factor

% of interior office lighting energy use from linear fluorescent fixtures

x 80% 80,000 MWh

Feasibility factor

% of linear fluorescent fixtures that could be replaced with Super T8 technology

x 100% (all linear fluorescents could feasibly be replaced with Super T8s)

80,000 MWh

Turnover factor

% of existing office space that will naturally replace lighting as a remodel in given year

x 6.7% (typical fixture life of 15 years result in 1/15 replacement per year on average)

5,333 MWh

Savings factor

% energy savings from shifting from standard T8 to Super T8 technology (represents weighted average for different number of lamps)

x 17% 907 MWh

Net penetration

The increase in penetration of Super T8 fixtures as a result of the efficiency initiative.

x 10% 90.7 MWh

Annual Maximum Achievable Savings Potential = 90.7 MWh

C&I Market Technologies

87efficiency measures

10 different commercial building types

and street lighting

2,253 combinations analyzed

(technology / building type / market)

71

C&I Existing Market Characteristics

72

Existing End Use Sales Forecast for 2012, MWh at MeterOther Street

Office Retail Grocery Warehouse Education Health Lodging Restaurant Commercial Lights Industrial

Indoor Lighting 292,708 77,521 52,332 9,338 137,625 50,686 30,230 17,269 93,201 0 132,477Outdoor Lighting 32,163 6,043 6,295 1,631 14,373 3,437 6,281 5,024 12,426 37,375 0Cooling 31,490 18,062 6,674 295 10,166 11,624 4,656 3,010 15,274 0 168,631Ventilation 77,061 61,395 10,315 5,239 57,061 16,098 22,737 6,283 33,759 0 0Water Heating 12,459 15,773 4,864 334 19,643 11,412 10,103 14,033 19,652 0 0Refrigeration 4,389 28,503 137,523 29,280 6,835 5,638 3,214 27,534 109,164 0 0Space Heating 19,245 7,116 999 501 6,366 3,227 4,645 687 3,790 0 0Office Equipment 84,638 6,309 2,163 771 13,121 3,508 3,856 810 8,762 0 0Miscellaneous 60,549 9,037 3,604 1,395 11,447 37,820 6,749 2,917 20,858 0 0Industrial Process 0 0 0 0 0 0 0 0 0 0 1,084,270Total 614,701 229,760 224,770 48,785 276,638 143,449 92,470 77,567 316,887 37,375 1,385,378

C&I New Construction Market Characteristics

73

New Construction Sales Forecast for 2012, MWh at MeterOther Street

Office Retail Grocery Warehouse Education Health Lodging Restaurant Commercial Lights Industrial

Indoor Lighting 2,957 783 529 94 1,390 512 305 174 941 0 1,338Outdoor Lighting 325 61 64 16 145 35 63 51 126 378 0Cooling 318 182 67 3 103 117 47 30 154 0 1,703Ventilation 778 620 104 53 576 163 230 63 341 0 0Water Heating 126 159 49 3 198 115 102 142 199 0 0Refrigeration 44 288 1,389 296 69 57 32 278 1,103 0 0Space Heating 194 72 10 5 64 33 47 7 38 0 0Office Equipment 855 64 22 8 133 35 39 8 89 0 0Miscellaneous 612 91 36 14 116 382 68 29 211 0 0Industrial Process 0 0 0 0 0 0 0 0 0 0 10,952Total 6,209 2,321 2,270 493 2,794 1,449 934 784 3,201 378 13,994

Revisions to Analysis Presented

on December 20, 2010

74

F20 Unconstrained Analysis REVISIONS• VEIC accidentally retained the 2007 avoided

costs used in the 2009 Forecast 20 analysis in the unconstrained savings forecast presented on December 20.

• The updated avoided costs approved by the Board in December 2009—and used by Efficiency Vermont in 2010 for program implementation—are substantially lower than the 2007 values mistakenly used in the original unconstrained analysis.

• VEIC has revised the unconstrained analysis using the 2009 avoided costs. 75

F20 Unconstrained Analysis REVISIONS

Reductions are especially significant in avoided generation capacity costs.

VEIC corrected this error by re-screening all efficiency measures.

• Most measures are still cost-effective at lower avoided costs.

• Others either are no longer cost-effective throughout the analysis period or they become cost-effective in later years.

VEIC also applied the revised real discount rate of 5.6%, recommended by the DPS (changed from 5.7%).

76

F20 Unconstrained Analysis REVISIONS

VEIC adjusted measure penetrations accordingly by

• removing measures no longer cost-effective, or • postponing and lowering market penetration rates for

measures that become cost-effective in later years.

VEIC re-screened all programs and entire portfolio for cost-effectiveness, and calculated new electricity savings.

Effects of lower avoided costs on measure cost-effectiveness and electricity savings are significant, particularly in the residential sector.

77

Annual Avoided Costs—Energy and Capacity

78

Winter On-Peak

Energy

Winter Off-Peak

EnergySummer On-Peak

Summer Off-Peak

Summer Gener.

CapacityT&D

Capacity$/kWh $/kWh $/kWh $/kWh $/kW-yr $/kW-yr

2012 (0.0130) (0.0060) (0.0179) (0.0085) (89.56) (0.84) 2013 (0.0087) 0.0023 (0.0147) (0.0000) (110.46) (0.84) 2014 (0.0102) 0.0028 (0.0133) (0.0002) (110.45) (0.84) 2015 (0.0087) 0.0037 (0.0125) (0.0007) (108.99) (0.84) 2016 (0.0097) 0.0027 (0.0118) (0.0028) (107.52) (0.84) 2017 (0.0129) 0.0017 (0.0126) 0.0004 (107.50) (0.84) 2018 (0.0065) 0.0047 (0.0100) 0.0010 (106.04) (0.84) 2019 (0.0051) 0.0082 (0.0093) 0.0027 (106.02) (0.84) 2020 (0.0080) 0.0052 (0.0124) 0.0018 (104.55) (0.84) 2021 (0.0120) 0.0038 (0.0172) 0.0033 (103.08) (0.84) 2022 (0.0131) 0.0046 (0.0167) 0.0023 (101.61) (0.84) 2023 (0.0118) 0.0042 (0.0147) 0.0037 (100.14) (0.84) 2024 (0.0086) 0.0047 (0.0106) 0.0072 (98.66) (0.84) 2025 (0.0085) 0.0048 (0.0100) 0.0081 (84.10) (0.84) 2026 (0.0084) 0.0049 (0.0094) 0.0091 (69.51) (0.84) 2027 (0.0083) 0.0050 (0.0087) 0.0100 (54.90) (0.84) 2028 (0.0082) 0.0051 (0.0081) 0.0111 (40.26) (0.84) 2029 (0.0081) 0.0052 (0.0074) 0.0121 (25.60) (0.84) 2030 (0.0080) 0.0053 (0.0066) 0.0132 (12.38) (0.84) 2031 (0.0079) 0.0054 (0.0059) 0.0144 (12.28) (0.84) 2032 (0.0078) 0.0055 (0.0051) 0.0155 (12.18) (0.83) 2033 (0.0077) 0.0056 (0.0043) 0.0167 (12.08) (0.83) 2034 (0.0076) 0.0057 (0.0034) 0.0180 (11.98) (0.83) 2035 (0.0074) 0.0059 (0.0026) 0.0193 (11.87) (0.83) 2036 (0.0073) 0.0060 (0.0017) 0.0207 (11.77) (0.83) 2037 (0.0072) 0.0061 (0.0007) 0.0220 (11.67) (0.83) 2038 (0.0070) 0.0062 0.0003 0.0235 (11.57) (0.83) 2039 (0.0068) 0.0063 0.0013 0.0250 (11.47) (0.83) 2040 (0.0067) 0.0065 0.0023 0.0265 (11.47) (0.83) 2041 (0.0046) 0.0079 0.0055 0.0294 (11.47) (0.83)

Year

Difference between 2009 and 2007

Cumulative Effects:Change in Energy and Peak Demand Savings

79

Energy and Peak Demand Savings Pre-Avoided Cost Revision

Post-Avoided Cost Revision

TOTAL 2031 2031 % changeCumulative Annual MWh 2,322,699 2,316,759 -0.26%Cumulative Annual Summer MW Saved 448.7 389.7 -13.15%Cumulative Annual Winter MW Saved 431.0 389.9 -9.53%

Residential 2031 2031 % changeCumulative Annual MWh 1,018,122 1,020,453 0.23%Cumulative Annual Summer MW Saved 164.3 106.7 -35.05%Cumulative Annual Winter MW Saved 235.8 196.0 -16.90%

C&I 2031 2031 % changeCumulative Annual MWh 1,304,577 1,296,307 -0.63%Cumulative Annual Summer MW Saved 284.3 283.0 -0.49%Cumulative Annual Winter MW Saved 195.2 194.0 -0.62%

Effects of Change in Societal Net Benefits

80

PV of Societal Net Benefits ($M)

Pre-Avoided Cost

Revision

Post-Avoided

Cost Revision Change

Residential ProgramsResidential New Construction $78.0 $110.0 $32.0

Retail Products $1,110.0 $900.0 ($210.0)Existing Homes $134.0 $142.0 $8.0

Low Income (SF and MF) $8.0 $7.5 ($0.5)Sub-Total Residential $1,330.0 $1,159.5 ($170.5)

Commercial & Industrial ProgramsC&I New Construction $211.0 $181.3 ($29.7)

C&I Efficient Equipment $672.0 $551.3 ($120.7)C&I Retrofit $635.0 $523.0 ($112.0)

Sub-Total C&I $1,518.0 $1,255.6 ($262.4)EVT Core Supporting Services ($300.0) ($302.6) ($2.6)

Portfolio of Programs $2,548.0 $2,112.5 ($435.5)

Effects of Change in Electric System Net Benefits

81

PV of Electric System Net Benefits ($M)

Pre-Avoided Cost

Revision

Post-Avoided

Cost Revision Change

Residential ProgramsResidential New Construction ($38.0) ($40.2) ($2.2)

Retail Products $781.0 $560.0 ($221.0)Existing Homes $9.0 $8.6 ($0.4)

Low Income (SF and MF) ($6.5) ($7.3) ($0.8)Sub-Total Residential $745.5 $521.1 ($224.4)

Commercial & Industrial ProgramsC&I New Construction $191.0 $162.6 ($28.4)

C&I Efficient Equipment $659.0 $563.1 ($95.9)C&I Retrofit $475.0 $373.7 ($101.3)

Sub-Total C&I $1,325.0 $1,099.4 ($225.6)EVT Core Supporting Services ($300.0) ($302.6) ($2.6)

Portfolio of Programs $1,770.5 $1,317.9 ($452.6)

New avoided costs rendered some residential measures cost-ineffective in early years.

Zero penetrations for the following measures and years:

• 2012 – 2019: Efficient Products heat pump DHW

• 2012 – 2015: Efficient Products, RNC, Existing Homes and Low-Income heat pump dryers

• 2012 – 2018: Existing Homes solar DHW

• 2012 – 2024: Existing Homes heat pump DHW

Residential Sector Changes

82

Residential Sector Changes

During the re-screening process we revised characterizations for two measures:

• Products Program heat pump DHW, changed load shape of from “DHW insulation” to “DHW fuel switch”

• Electric heat air sealing and insulation measures—previously broken down between high, medium, and low—were consolidated to an average air sealing and insulation measure

83

C&I Sector Changes• Ground Source Heat Pumps

- In the 5 building types where these were previously found to be cost-effective, they now fail in the first few years, but pass in Year 5. Penetrations were adjusted to start in Year 5.

• "High Efficiency residential-size refrigerator" now fails in warehouses.

• "Booster water heat for dishwashing" in Lodging now fails until Year 10, so it is excluded.

• The above measures have relatively small savings. Adjustments made only a small difference in the overall C&I maximum achievable forecasted savings. 84

C&I Sector Changes• Several measures now do not pass cost-

effectiveness screening for the first few years in a specific building type. But they almost pass, and thus remain in the measure mix since the measure still passes when aggregated across building types.

• Total Resource Costs change is due to the updated real discount rate.

• C&I results also reflect a change in the “Vermont Other Sales” forecast.

85

Summary of Changes in Residential

86

Change in Residential Incremental MWh Saved, by End Use

87

Pre-Avoided Cost Revision Post-Avoided Cost Revision

End Use 2012 2016 2021 2031 2012 2016 2021 2031

Consumer Electronics 7,812 33,555 34,833 37,107 7,812 33,555 34,833 37,107

Cooling 85 351 384 428 85 351 384 428

Heating/Cooling/DHW 28 52 76 137 28 52 76 137

Heating/DHW 36 56 72 99 36 56 72 99

Indoor Lighting 48,839 83,592 15,481 26,202 48,839 83,592 15,481 26,202

Kitchen/Laundry 2,480 11,266 10,910 11,562 1,025 6,404 10,910 11,562

Other Appliances 2,064 9,527 9,817 10,443 2,064 9,527 9,817 10,443

Outdoor Lighting 987 1,181 912 1,516 987 1,181 912 1,516

Refrigeration 5,425 9,310 10,331 9,099 5,425 9,310 10,331 9,099

Space Heating 341 1,812 2,146 2,309 394 2,131 2,695 2,951

Ventilation 25 89 136 120 25 89 136 120

Water Heating 4,319 21,934 22,892 24,098 361 1,600 22,278 24,098

TOTAL 72,442 172,723 107,990 123,119 67,081 147,846 107,925 123,761

Change in Residential Incremental Summer Peak MW Saved, by End Use

88

Pre-Avoided Cost Revision Post-Avoided Cost RevisionEnd Use 2012 2016 2021 2031 2012 2016 2021 2031Consumer Electronics 0.76 3.28 3.40 3.61 0.76 3.28 3.40 3.61 Cooling 0.16 0.62 0.69 0.78 0.16 0.62 0.69 0.78 Heating/Cooling/DHW 0.06 0.12 0.17 0.31 0.06 0.12 0.17 0.31 Heating/DHW - - - - - - - - Indoor Lighting 7.46 12.54 2.00 3.55 7.46 12.54 2.00 3.55 Kitchen/Laundry 0.30 1.34 1.31 1.39 0.13 0.77 1.31 1.39 Other Appliances 0.04 0.08 0.09 0.09 0.04 0.08 0.09 0.09 Outdoor Lighting 0.01 0.02 0.02 0.03 0.01 0.02 0.02 0.03 Refrigeration 0.67 1.15 1.28 1.13 0.67 1.15 1.28 1.13 Space Heating 0.01 0.06 0.08 0.10 0.01 0.06 0.08 0.10 Ventilation 0.00 0.01 0.02 0.01 0.00 0.01 0.02 0.01 Water Heating 1.50 7.63 7.43 7.91 0.03 0.14 1.89 2.04 TOTAL 10.98 26.86 16.48 18.93 9.34 18.80 10.95 13.06

Change in Residential Incremental Winter Peak MW Saved, by End Use

89

Pre-Avoided Cost Revision Post-Avoided Cost RevisionEnd Use 2012 2016 2021 2031 2012 2016 2021 2031Consumer Electronics 0.88 3.80 3.94 4.20 0.88 3.80 3.94 4.20 Cooling - - - - - - - - Heating/Cooling/DHW 0.02 0.03 0.04 0.07 0.02 0.03 0.04 0.07 Heating/DHW 0.02 0.03 0.04 0.05 0.02 0.03 0.04 0.05 Indoor Lighting 11.22 17.98 3.16 5.26 11.22 17.98 3.16 5.26 Kitchen/Laundry 0.41 1.80 1.76 1.88 0.18 1.04 1.76 1.88 Other Appliances 0.73 3.40 3.51 3.74 0.73 3.40 3.51 3.74 Outdoor Lighting 0.24 0.29 0.22 0.36 0.24 0.29 0.22 0.36 Refrigeration 0.65 1.11 1.23 1.08 0.65 1.11 1.23 1.08 Space Heating 0.11 0.60 0.74 0.80 0.13 0.74 0.99 1.10 Ventilation 0.00 0.01 0.02 0.01 0.00 0.01 0.02 0.01 Water Heating 1.54 7.81 7.70 8.18 0.05 0.20 3.48 3.77 TOTAL 15.81 36.84 22.36 25.64 14.12 28.63 18.39 21.52

Summary of C&I Changes

90

Change in C&I Incremental Energy (MWh) Saved, by End Use

91

Pre-Avoided Cost Revision Post-Avoided Cost Revision

End Use 2012 2016 2021 2031 2012 2016 2021 2031

Cooling 8,148 10,478 7,554 8,770 8,148 10,475 7,553 8,769

Elec Total 445 711 666 650 445 711 666 650

Indoor Lighting 84,680 79,960 47,111 41,784 84,680 79,960 47,111 41,784

Industrial Process 11,718 20,391 12,645 13,411 11,718 20,391 12,645 13,411

Miscellaneous 1,623 1,808 1,890 2,550 1,623 1,808 1,890 2,550

Outdoor Lighting 8,430 10,380 7,179 6,214 8,056 10,032 6,890 5,983

Refrigeration 6,412 13,233 11,729 14,070 5,849 12,414 11,280 13,149

Space Heating 146 248 208 211 146 247 208 211

Ventilation 11,404 13,115 8,279 6,884 11,404 13,115 8,279 6,884

Water Heating 2,677 2,946 2,818 3,037 2,677 2,946 2,818 3,037

TOTAL 135,682 153,271 100,078 97,580 134,746 152,099 99,340 96,428

Change in C&I Incremental Summer Peak MW Saved, by End Use

Pre-Avoided Cost Revision Post-Avoided Cost RevisionEnd Use 2012 2016 2021 2031 2012 2016 2021 2031Cooling 5.49 7.71 5.35 5.41 5.49 7.70 5.35 5.41 Elec Total 0.11 0.17 0.16 0.16 0.11 0.17 0.16 0.16 Indoor Lighting 17.78 16.70 9.80 8.77 17.78 16.70 9.80 8.77 Industrial Process 2.68 4.66 2.89 3.06 2.68 4.66 2.89 3.06 Miscellaneous 0.20 0.23 0.24 0.33 0.20 0.23 0.24 0.33 Outdoor Lighting 0.06 0.08 0.05 0.05 0.06 0.08 0.05 0.05 Refrigeration 0.91 1.92 1.70 2.03 0.82 1.78 1.62 1.89 Space Heating 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Ventilation 1.19 1.38 0.86 0.70 1.19 1.38 0.86 0.70 Water Heating 0.36 0.39 0.38 0.41 0.36 0.39 0.38 0.41 TOTAL 28.77 33.23 21.43 20.91 28.68 33.10 21.35 20.76

92

Change in C&I Incremental Winter Peak MW Saved by End Use

Pre-Avoided Cost Revision Post-Avoided Cost RevisionEnd Use 2012 2016 2021 2031 2012 2016 2021 2031Cooling 0.20 0.24 0.23 0.29 0.20 0.24 0.23 0.29 Elec Total 0.05 0.08 0.07 0.07 0.05 0.08 0.07 0.07 Indoor Lighting 13.14 12.27 7.23 6.33 13.14 12.27 7.23 6.33 Industrial Process 2.68 4.66 2.89 3.06 2.68 4.66 2.89 3.06 Miscellaneous 0.19 0.22 0.24 0.31 0.19 0.22 0.24 0.31 Outdoor Lighting 1.22 1.61 1.04 0.93 1.22 1.61 1.04 0.93 Refrigeration 0.79 1.67 1.48 1.76 0.72 1.55 1.41 1.64 Space Heating 0.08 0.13 0.10 0.10 0.08 0.13 0.10 0.10 Ventilation 1.47 1.68 1.06 0.87 1.47 1.68 1.06 0.87 Water Heating 0.49 0.54 0.52 0.56 0.49 0.54 0.52 0.56 TOTAL 20.32 23.10 14.87 14.29 20.24 22.98 14.80 14.16

93

Major Drivers of Long-term Changes

in Opportunities

94

Codes & Standards: Short Term

• DOE reviewing ASHRAE 90.1-2004

• ASHRAE 90.1-2007 available now

• Vermont standards (9 V.S.A §2791) include:

- Metal halide lamp fixtures

- State regulated incandescent reflector lamps

- Residential furnaces and residential boilers

95

Codes & Standards: Long Term

• DOE seeking 1 – 2% annual efficiency improvement (20 – 40% change by 2028)

• Potential adoption of regional standards

• Changes in impact from:

- New and / or expanded standards and service

- Better enforcement of codes

- Expanded codes

96

Savings Due to Codes & Standards

97

Standards Impact over Time

-200

020

040

060

080

010

00

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

Year

GWh

MW

Decline of Savings from Compact Fluorescent Lamps

2012 – 2020• First tier of new federal lighting standard• Incentives for specialty CFLs only (dimmers,

three-way, etc.)

After 2020• Second tier of federal lighting standards• CFLs are baseline

98

Rise of Solid-state Lighting

• LEDs and Organic LEDs

• “New Frontier”- Highly efficient (eclipsing current technology)- Extremely long life

• Barriers exist, but are constantly shifting- Cost (high but falling)- Compatibility (new screw-in lamps coming to market)

99

Rebatable CFLs vs. SSL

100

Number of CFLs and SSL

0

500000

1000000

1500000

2000000

2500000

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

Year

Nu

mb

er

of

bu

lbs

Number of COM & RES CFLs

Number of COM & RES SSLs

Savings from CFLs vs. SSL

101

CFL & SSL (MWh/yr)

0

10000

20000

30000

40000

50000

60000

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

Year

(MW

h) COM & RES CFL

COM & RES SSL

Issues

102

Baseline Household Lighting Energy Use, After 2020

Inconsistency persists between post-2020 baseline household lighting energy use intensities:

•Steep drop in lighting efficiency savings forecast because CFLs become baseline

•Itron EUIs continue gradual decline implying continued prevalence of incandescent

103

Baseline Household Lighting Energy Use, After 2020

Two options:•VEIC develops an adjustment to be applied to post-2020 sales forecast when applying unconstrained residential maximum achievable savings

•Itron departs from EIA projections and builds discontinuity into its post-2020 sales peak demand forecasts

104

Avoided Costs MatterThe inadvertent use of the 2007 avoided costs forced an early analysis of the sensitivity of efficiency measure cost-effectiveness to changes in avoided costs

Lower avoided energy, and especially capacity costs:

•Rendered some measures cost-ineffective throughout the forecast period•Delayed the point at which some measures become cost-effective•Ultimately lowered the amount of cost-effectively achievable savings over the next 20 years, especially in the residential sector. 105