BETTER TOGETHER. ANNUAL REPORT 2007

NEEA: A UNiqUE REGiONAL REsOURcE

In the last year, skyrocketing energy prices helped precipitate a sea change in the nation’s thinking about energy use. All over the United States, efforts are underway to take advantage of something we in the Northwest have known for more than 10 years: Energy efficiency is often the least expensive way to meet the growing demand for energy.

The Northwest had a head start on this work because more than a decade ago, a group of utilities, government entities, and energy-efficiency advocates were called together by the Northwest Power and Conservation Council. Together, they decided the region could save more energy if they combined their resources and efforts and forged a unique regional partnership to change the way we do business here. The result of that decision was the Northwest Energy Efficiency Alliance (NEEA).

History proves that when we work together to advance energy efficiency as a region, we are Better Together. Our story for the last year underscores that fact.

In these few pages, you will read a selection of stories highlighting the effects of our efforts to encourage new technologies and business practices by leveraging the strength created through this unique regional

partnership. Across the Northwest, from Montana, through Idaho and Washington and on to Oregon, Northwest utilities, governments, and energy advocates collaborated through NEEA in 2007 to transform markets in housing, food processing, building management and more.

Over the last three years, energy savings from NEEA’s programs and activities totaled 45 average megawatts (aMW), which exceeds NEEA’s business plan goal for 2007 by 73 percent. In fact, since 1997, the Northwest, working under the banner of NEEA, has already achieved cumulative savings of 210 aMW from the net market effects of current and past projects. This is enough energy to power more than 145,000 homes for an entire year. And while we are proud to look back on these savings, our eyes are now on the future through our participatory strategic planning efforts on how to continue to exceed our goals through regional leverage.

With more than 10 years experience and strong regional partnerships guiding NEEA’s efforts, the Northwest has a head start over the rest of the nation in taking advantage of the benefits of energy efficiency. In coming years, NEEA will continue to act as the region’s energy efficiency spokesperson so we can all be Better Together.

“ THROUGH OUR wORk wiTH NEEA, cONvERsATiONs ABOUT ENERGy HAvE BEcOmE sTRATEGic, ANd NOw TAkE PLAcE iN OUR mEmBER cOmPANiEs’ BOARdROOms As wELL As ON THEiR PLANT fLOORs.” Dave Zepponi President Northwest Food Processors Association

HOw wE wORk iN THE mARkETPLAcE NEEA’s initiatives work in concert with our partners to transform markets in favor of energy efficiency. Our regional efforts complement our partners in three ways:

LEvERAGE NEEA leverages the resources and influence of our partners in order to achieve regional economies of scale for energy-efficient products and services. By working together, we are able to have a greater impact on the Northwest marketplace.

TEcHNOLOGy New technologies ready for commercialization are brought to the Northwest where we work to encourage market adoption of these energy-efficient products and services.

REsOURcEs Regional resources including market strategies, relationships with experts in the marketplace, as well as training and marketing platforms provide additional opportunities for our partners to connect with their customers.

BETTER TOGETHER iN 2007

Looking at the work we’ve all done under the banner of the Northwest Energy Efficiency Alliance (NEEA) during the past year, and at what is to come, it is hard not to comment on the spirit of collaboration in this region. By all traditional measures, the Northwest continues to be a national leader in energy efficiency through innovation and collaboration. There is no other region that can rightly claim our uniqueness and point to the level of effective collaboration that you will see in NEEA’s 2007 Annual Report.

For that, we want to thank all of you.

There are many stories that NEEA will share in this report that helped us save 45 aMW over the last three years, from computer power supplies to new homes, building codes and industrial processes. But I’d like to take a moment to highlight our CFL story because it represents the best of what our region can achieve when working together. With sales of 18 million CFLs in 2007 alone, the Northwest continues to lead the country in the number of CFLs sold per household each year. Northwest homes have about 10 CFLs installed in each home—double the national average—and beyond

the expectations of the region’s energy efficiency leaders a decade ago.

2007 was also a year of transition for NEEA.

After a comprehensive evaluation of the overall needs of the organization beginning nearly two years earlier, the board voted in October 2007 to create a new governance structure comprised of a smaller board, goaled with nimbly guiding the organization’s policies and strategies.

Change also brought new leadership. Margie Gardner moved on to join the Bonneville Environmental Foundation (BEF) as its CEO. I want to personally thank Margie for her leadership and accomplishments at NEEA, including her big bet on CFLs 10 years ago. I also want to congratulate BEF for landing such a great leader. We are also excited to announce Claire Fulenwider as NEEA’s new executive director. Claire brings 30 years of leadership and experience in the industry. We expect her leadership, experience and vision to bring fresh ideas to the table to advance energy efficiency and

accelerate market transformation in the Northwest.A number of expert committees will help advise the organization on specific areas or initiatives. With these changes, NEEA is well prepared to face the challenges of the 21st century.

One of these challenges is undoubtedly the changing environment around us. While the public is more conscious of energy efficiency, the consumption of power has steadily increased. For every megawatt saved during the last decade, the region has added a megawatt of new electric load, due in part to our region’s rapid population growth and the boom in consumer electronics.

We can be proud of NEEA and its partners, but it’s clear the future will demand much more. Looking forward, NEEA has engaged the region in a strategic planning process that will refine its guiding principles to help take us through the next decade of change. At its core, NEEA is here to represent the region’s interests and goals, and leverage our collective resources to transform markets and encourage new technologies and practices.

Congratulations to the leadership and collaboration of the region’s more than 140 electric utilities, Bonneville Power Administration, Energy Trust of Oregon, our four states and the regional energy efficiency community for a job well done. Going forward, meeting the needs of the region will require even greater collaboration and creativity.

Sincerely,

Craig Smith, Board ChairNorthwest Energy Efficiency Alliance

“ By ALL TRAdiTiONAL mEAsUREs, THE NORTHwEsT cONTiNUEs TO BE A NATiONAL LEAdER iN ENERGy EfficiENcy THROUGH iNNOvATiON ANd cOLLABORATiON.” Craig Smith Board Chair Northwest Energy Efficiency Alliance

“ wHEN THE POwER PLANNiNG cOUNciL’s fOURTH POwER PLAN iNcLUdEd 20-yEAR sAviNGs fROm cfLs EqUivALENT TO THREE LAmPs PER HOUsEHOLd, iT wAs GREETEd wiTH cONsidERABLE skEPTicism. THANks iN LARGE PART TO THE GROUNdwORk LAid By NEEA ANd THE REGiON’s UTiLiTiEs, THAT GOAL wAs mET ANd ExcEEdEd By A siGNificANT mARGiN.” Dick Watson Former Director of the Power Planning Division Northwest Power and Conservation Council

Since its inception, NEEA has used sound data to make big bets in search of long-term payback for the region. One of the region’s biggest bets was on compact fluorescent lamps (CFLs). Ten years ago, these strange-looking bulbs were targeted by the Northwest Planning Council and Northwest utilities as an emerging technology that could transform the lighting market. The bold goal of the Fourth Power Plan was to have three CFLs in every home in the region in 20 years.

At the time, CFLs were twice the size they are today, cost about $15 each, and many were failing prematurely. Market share was less than one percent. NEEA helped lay the groundwork for a comprehensive market strategy by identifying key indicators of progress, including increased awareness, getting CFLs in retail stores, improving product size and addressing quality concerns.

To address quality, NEEA was a founding sponsor of an independent product testing program called PEARL that now serves as the quality testing program for all ENERGY STAR qualified CFLs.

To address customer concerns with product size and appearance, NEEA and the region helped fund a pioneering effort at Pacific Northwest National Laboratories to envision a better CFL.

To address cost, NEEA and the region worked together with manufacturers to drive down consumer costs, offer incentives and set new expectations about price points at retail stores.

And finally, to address availability, NEEA worked closely with big-box buyers at Fred Meyer, The Home Depot, Costco and others to drive awareness, and used spiffs when appropriate to garner valuable shelf space for the bulbs.

cfL LEAdERsHiP iN THE NORTHwEsT

INCREMENTAL CFL SALES VS. INVESTMENT

NEEA INVESTMENT BULB SALES

20M

18M

16M

14M

12M

10M

8M

6M

4M

2M

0

$4M

$2M

$0M

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Fast forward to 2001.

The power crisis was upon us, sending shockwaves across the region. While sales of CFLs were still low, awareness was high enough and the infrastructure in place that when the call to action came, the region was ready to respond. NEEA and Northwest utilities coordinated efforts to drive consumers to retailers to buy CFLs. That same year, the region’s retailers sold almost 6.5 million bulbs. Although sales dropped off in 2003 to 3.5 million, every year after has seen sales grow by 50 percent or more. In 2007, the region purchased more than 18 million CFLs.

Today, one out of every four bulbs sold in the Northwest is a CFL. Northwest homes have about 10 CFLs installed in each household—double the national average—and well beyond what the Fourth Power Plan imagined could happen.

AccOmPLisHmENTs AT-A-GLANcE • By working together, Northwest CFL sales topped 18 million

bulbs in 2007. Today, one out of every four bulbs sold in the region is a CFL.

• In 2007, 2,658 new homes were certified as meeting the Northwest ENERGY STAR Homes standard.

• In Idaho alone, 70 real estate agents took the Northwest ENERGY STAR for Realtors class, which will continue to jumpstart the transformation of this market.

NORTHWEST VS. U.S. ENERGY STAR CFL MARKET SHARE

MARKETSHARE

NORTHWEST UNITED STATES

40%

35%

30%

25%

20%

15%

10%

5%

0%

2001 2002 2003 2004 2005 2006 2007

BETTER TEAms fOR BETTER BUiLdiNGs

TRANsfORmiNG THE cOmmERciAL mARkET The Northwest commercial building market is a large and complex mix of players. NEEA, under the BetterBricks commercial initiative, works to bring a diverse array of market actors together toward a common goal of building and operating highly efficient buildings that benefit the owners and communities at large. Through a network of technical and business services, education and training efforts, and the development and dissemination of tools and resources, BetterBricks is working to change how energy is managed by owners of commercial buildings and expand the skill sets of those who design and operate them.

In the design market, BetterBricks partners with the region’s top architecture schools, leading local utilities and in some cases state energy offices to run the BetterBricks Network of Integrated Design Labs. These nationally recognized labs work upstream with designers and owners to bring the highest energy performance considerations to the design table. Their methods have spread from project to project and from designer to designer, and are now being promoted by the local chapters of the American Institute of Architects (AIA) in the “ReThinking Design”

curriculum. The result is increased building performance at reduced costs.

Thanks to collaboration between BetterBricks, the Oregon Lab, the nationally recognized and environmentally conscious BOORA and SRG Architects, the Fathers at Mount Angel’s Seminary in Mount Angel, Oregon, local utilities and the Oregon Office of Energy, an energy-efficient design concept was taken from prototype to reality. Five classrooms were built that consume 60 percent less energy than typical classrooms. The success of the design is quickly spreading within the design and school communities.

AccOmPLisHmENTs AT-A-GLANcE • As of 2007, hospitals representing 30% of the beds in the

region have adopted or committed to adopting a Strategic Energy Management Plan (SEMP).

• The success of the energy-efficient classroom design at Mount Angel Abbey continues to inspire other architects and builders.

• NEEA worked with utility sponsors Puget Sound Energy, Seattle City Light, Tacoma Power, Snohomish PUD, Idaho Power and the Energy Trust of Oregon to produce BOMA (Building Operations Management Association) Energy Efficiency Program trainings across the region for its more than 700 members. The classes present best energy efficiency practices for building operations and maintenance without capital expenditures.

• BetterBricks engaged building owners representing more than 20% of the office square footage in the Puget Sound and Portland markets in two city-wide contests aimed at developing benchmark data of energy use in office buildings.

• BetterBricks introduced integrated design business practice to five design firms representing more than 50% of the new healthcare market and 40% of the new office market.

“ iT’s sO mUcH mORE vALUABLE TO HAvE A sysTEm APPROAcH THAN THE iNdividUAL HOsPiTALs APPROAcHiNG ENERGy EfficiENcy wiTH THis OR THAT PROjEcT. THE sTRATEGic ENERGy mANAGEmENT PLAN iNcLUdEs THiNGs wE didN’T THiNk Of, LikE PURcHAsiNG ANd TRAiNiNG.” Medrice Coluccio CEO Peace Health, Lower Columbia Region

AdvANciNG iNdUsTRiAL ENERGy mANAGEmENT

dRiviNG BUsiNEss PRAcTicE cHANGEThe number one and two users of energy in the region are the pulp and paper and the food processing industries respectively. NEEA’s Industrial Initiative focuses on making energy efficiency an integral part of both corporate and plant business practices within these industrial sectors. Northwest utilities and others collaborate under the banner of NEEA to help companies understand the value of energy management and make Continuous Energy Improvement (CEI) a part of their standard business practices.

CEI helps industrial companies lower their energy costs and reduce their environmental impact by changing the way they think about energy.

The CEI process begins when NEEA works in concert with the company’s electric utility and other stakeholders to develop an ongoing energy management process, addressing the four areas of a company that are affected by energy management efforts: organizational structure, employee awareness, manufacturing systems and measurement.

Five of the largest food processing companies were sopleased with the results of CEI when they implemented it at a single facility that they decided to roll it out to two or more facilities within their companies. This was precisely NEEA’s transformation strategy. At the beginning of 2007, nine facilities were implementing CEI. By the end of the year, that number rose to 30 facilities (20 percent of the target market), already exceeding NEEA’s 2009 goal. NEEA is committed to working to influence energy management practices across the food processing sector in the Northwest, with an eye toward sustainable savings for the region.

In addition to collaborating with local utilities, NEEA also collaborates with the Northwest Food Processors Association (NWFPA) and its member companies on CEI development and implementation.

The association has actively partnered with NEEA to make CEI accessible to its food processor members and to highlight the value and benefits of energy management at two key annual events: the Northwest Food Manufacturing and Packaging Expo and the Executive Business Summit.

The Expo reaches close to 4,000 food processing professionals, and the Executive Business Summit is attended by C-suite industrial leaders representing some of the largest energy consumers in the industry.

At the end of 2007, NEEA partnered with NWFPA on a one-year pilot of the Green Energy Management System (GEMS), a program designed to help food processors quantify energy savings and to crunch the right numbers to justify energy efficiency projects at the business level. On successful conclusion of the pilot, NWFPA plans to make the program available to its entire membership.

As a result of a regional commitment to collaboration, energy management is becoming a long-term business opportunity in the food processing industry.

AccOmPLisHmENTs AT-A-GLANcE • In 2007, the number of food processing facilities implementing

CEI practices grew from nine to 30. This represents 20% of the target market and already exceeds NEEA’s 2009 goal.

• In conjunction with local utilities, the Energy Trust of Oregon and the Bonneville Power Administration NEEA is implementing Continuous Energy Improvement practices at a number of pulp and paper mills throughout the region. These mills are beginning to incorporate energy management into their operations.

• In 2007, Grays Harbor Paper collaborated with NEEA, Grays Harbor

PUD and the Bonneville Power Administration on energy management efforts that led to measurable, sustainable energy savings. As a result, the mill created a position for a full-time energy champion to lead the company’s ongoing energy efficiency programs.

“ THE PARTNERsHiP BETwEEN NwfPA ANd NEEA fURTHERs cOLLABORATiON BETwEEN THE fOOd PROcEssiNG iNdUsTRy ANd THE REGiON’s ELEcTRic UTiLiTiEs.” Jim Root CEO Sabroso Company

80 PLUsCurbing the growing plug load of the 1.5 million commercial desktop computers sold in the Northwest each year represents a significant opportunity for energy savings. Efficient power supplies directly save 82 kWh per desktop PC each year.

With a long-term vision of millions of efficient PCs purchased by universities and businesses resulting in long-term energy savings, NEEA set out to become the first funder of 80 PLUS—an electric utility-funded incentive program to integrate more energy-efficient power supplies into desktop computers. The immediate hope was to jumpstart the next ENERGY STAR spec for PCs.

When utilities and other regional players first started working on 80 PLUS in 2004 under the banner of NEEA, the Northwest was looking at an opportunity to save nearly 8.5 million kWh. When power supply manufacturers and major computer manufacturers signed on to 80 PLUS, EPA took notice. In July 2007, EPA adopted an improved ENERGY STAR specification that now includes 80 PLUS and better controls to reduce energy when PCs are idling, among other requirements.

Although PCs that meet the 80 PLUS and ENERGY STAR standard are still just an option for commercial consumers, the industry is committed to making these innovations available today. Dell and HP already support the new ENERGY STAR specification, thereby creating leverage in the market and bringing the industry closer to a tipping point.

This progress was made possible largely because the Northwest spoke with a unified voice. The region brought together resources, expertise and the leadership of the Pacific Northwest utilities and four states. Due to the new spec, sales and energy savings are expected to accrue into the future. Separately, through NEEA’s funding and additional utility funding, an 80 PLUS for Servers study has now set the stage for even broader savings as the region becomes a preferred location for data centers and server farms.

dUcTLEss HEAT PUmPsSome 500,000 Northwest utility customers still rely on inefficient electric resistance systems to heat their homes, despite years of marketing efforts to convince them to shift to more efficient heat sources. When a new type of ductless heat pump technology was identified in

ENcOURAGiNG NEw TEcHNOLOGiEs

2005, NEEA and Grant County Public Utilities District looked into it as a possible alternative. The pumps themselves turned out to be more attractive and have quieter operations than their predecessors. That, combined with a lower cost versus installing a gas-heat system, got the partners thinking that it would be worth studying the technology in real-life applications.

The manufacturer of the heat pumps, Mitsubishi, supplied units for NEEA to have installed in five homes in Grant County PUD’s territory. At the end of the demonstration in 2007, the homeowners reported that they used their baseboards on only the coldest days and two said the ductless heat pumps provided 95 percent of their heat during the winter. The data collected showed the technology was 50 percent more efficient. These results led to a regional conversation now underway to figure out how to spread adoption of ductless heat pumps, and spread the word about the huge energy savings they provide, across the region.

AccOmPLisHmENTs AT-A-GLANcE • NEEA and its partners helped develop the ENERGY STAR computer

specification to require 80 PLUS power supplies—a spec that is delivering about 147 kWh worth of savings per unit each year.

• Sales of desktop PCs with 80 PLUS power supplies grew from 3,000 units in 2006 to 20,000 in 2007.

• A NEEA-sponsored study that included participation of 13 utilities representing 61 percent of the region’s load, found in 2007 that by improving electric distribution efficiency through voltage regulation the region can save 100 aMW for less than a penny per kWh and can save 200 aMW for about two cents per kWh.

• The demonstration of ductless heat pumps (DHP) in Grant County, Washington shows that there could be as much as 200 aMW of potential savings in the region.

wHEN UTiLiTiEs ANd OTHER REGiONAL PLAyERs fiRsT sTARTEd wORkiNG ON 80 PLUs iN 2004 UNdER THE BANNER Of NEEA, THE NORTHwEsT wAs LOOkiNG AT AN OPPORTUNiTy TO sAvE NEARLy 8.5 miLLiON kwh.

wORkiNG TOGETHER ANd wiNNiNG TOGETHER

wAsHiNGTON Working in collaboration withregional partners and the BuildingOwners and Managers Association

(BOMA), NEEA’s BetterBricks initiative is using the experience the region gained during its successful effort promoting energy-efficient best practices to the office building management market in Portland. Soon after BetterBricks and its utility partners began working with BOMA in Seattle, the two organizations launched a competition to identify the buildings with the highest ENERGY STAR ratings in the city. The contest had the double benefit of helping managers gather benchmark data for NEEA and its partners to use when they measure the success of future energy efficiency improvements. Having accurate benchmarks is the first step in raising the bar for energy efficiency. In its first year, the contest already has 67 participants representing 20 percent of the city’s office market and interest from many others who want to take part next year.

OREGONNEEA’s BetterBricks initiative and Oregon design firm SRG Partnership—the fourth largest

design firm in the state—have a strong relationship built on a foundation of working together closely with the design lab supported by the BetterBricks program in Oregon. In 2007, that relationship led SRG, BetterBricks and its lab partners to work together designing a replacement facility for the Oregon State Hospital. Taking part in the earliest stages of design, NEEA and its collaborators helped the designers view the site’s climate as a resource by analyzing its environmental characteristics. The results helped the lab team and SRG orient the buildings to take advantage of the sun and use daylighting as much as possible. In future steps, the team is researching and helping layout the interiors to further reduce loads. As design comes to fruition, NEEA will likely work closely with the Energy Trust of Oregon to support the construction phase. In the long-term, working closely with SRG means that market transformation is taking place in the region’s design sector because SRG is a firm others watch closely.

idAHO Basic American Foods, one of the world’s leading suppliers of convenience food products, chose to take a strategic approach to energy

management. Under the stewardship of NEEA, Idaho Power, the Northwest Food Processors Association (NWFPA) and other regional partners, the ambitious company decided to look at energy efficiency from a holistic point of view. Leveraging Continuous Energy Improvement and Idaho Power’s Custom Efficiency Program, Basic American gave each facility’s senior manager accountability for their own energy efficiency program. Almost immediately, the company began to see results. Employees in each location took responsibility for energy management, momentum increased and energy savings are now reaching into the double digits for its three facilities. NEEA is continuing to spread the idea to other food processing facilities throughout the Northwest, working collaboratively with local utilities, NWFPA and others who support industry in achieving their energy efficiency goals.

mONTANAEfforts to introduce the benefits of integrated design in Montana are gaining traction through NEEA’s

BetterBricks initiative. After NEEA partnered with Montana State University and Northwestern Energy to open the state’s first Integrated Design Lab on the Bozeman campus in 2005, the state’s largest design and engineering firm, CTA, took notice. They helped spread the word about the value of the process. The firm, which has a presence in all the major cities of Montana, did so because it was learning about the energy efficiency gains of measures such as daylighting at the Bozeman Lab. CTA is now a key member of the team working toward market transformation in Montana. As CTA takes advantage of the resources the NEEA-funded lab offers, implements them across the state, and talks them up in design circles, more design firms in the state are approaching Northwestern and the Lab for integrated design assistance. This is one of many examples of driving ongoing energy savings for the state of Montana through a regional approach to energy efficiency.

“wiTH ALL Of Us AT THE TABLE OUR cUsTOmERs cAN NOw TAkE A HOLisTic viEw Of THEiR cURRENT

ENERGy PRAcTicEs ANd REdUcE THEiR fUTURE ENviRONmENTAL imPAcT, wHicH is LEAdiNG

TO BiG sAviNGs fOR EvERyBOdy.”

Javad Maadanian Supervisor / Commercial & Industrial

Seattle City Light

“ NEEA’s sUPPORT fOR ENERGy cOdEs THROUGHOUT THE REGiON is HELPiNG TO RAisE THE BAR fOR ENERGy EfficiENcy ANd dELivER LAsTiNG sAviNGs fOR THE REGiON, ENsURiNG THAT ENERGy UsE iN BUiLdiNGs is dRAmATicALLy REdUcEd.” Clark Brockman Board Chair Cascadia Region Green Building Council

mARkET AdOPTiON BEcOmEs sTANdARd PRAcTicE Raising energy codes for residential and non-residential structures is a key area of focus for NEEA and its partners because of the long-term energy savings they provide. Investing in efforts to make effective changes to state and national building energy codes now provides 5 aMW of cumulative savings each year—an excellent return on investment.

The approach NEEA and its partners take to influence code changes promotes the voluntary efforts of our BetterBricks, Industrial and ENERGY STAR Northwest initiatives to demonstrate the business value of energy-efficient practices. This allows the market to reach a tipping point by locking in savings for the long-term through local, state and national code adoption.

Last year, NEEA and its partners used experience gained from the ENERGY STAR Homes program to invest in and support the Oregon Department of Energy’s re-write of the state’s residential building energy code. Now, new homes in Oregon which would have received the Northwest ENERGY STAR Homes designation will instead simply be meeting code.

This raises the bar in Oregon which now requires newhome construction to be 15 percent more energy efficient.

In 2007, NEEA envisioned a new partnership that would take advantage of a regional phenomenon of states following each other’s code improvements.

NEEA brought together code officials from each state to create the Northwest Codes Group. This open, ongoing conversation between the people who write building energy codes examines new construction and design techniques and how they can be incorporated into state and national building energy codes. These regular meetings hosted by NEEA will have a cumulative effect on the amount of energy savings coming from code changes.

Thanks to NEEA’s position as a trusted interstate market actor, the changes in Oregon will also have much farther-reaching effects on the national code discussion. NEEA and its partners are working with experts to incorporate the changes in Oregon’s building energy code into the national model code which is adopted by 35 states including Idaho and Montana.

RAisiNG THE BAR fOR Us ALL

sTATEmENT Of fiNANciAL POsiTiON

AssETsCash and cash equivalents 6,432,828Funder and other receivables 162,860Prepaid expenses 385,409Property and equipment 110,838

TOTAL AssETs $7,091,935

LiABiLiTiEs ANd NET AssETsAccounts payable and other liabilities 3,328,863Advances from funders 2,177,696Net assets 1,585,376

TOTAL LiABiLiTiEs ANd NET AssETs $7,091,935

sTATEmENT Of AcTiviTiEsYear ended December 31, 2007

REvENUEsContributions 21,140,181Interest income 316,822Contract and other revenues 45,955

TOTAL REvENUE $21,502,958

ExPENsEsProject costs 20,407,929General operations 1,866,332

TOTAL ExPENsEs $22,274,261

cHANGE iN NET AssETs ($771,303)

REGiONAL LEAdERsHiP

THE vALUE Of iNvEsTiNG fOR THE fUTUREBetween 2005 and 2009, NEEA’s goal is to deliver 75 aMW of net savings for the region. After completing the third year toward this five-year goal, NEEA achieved a cumulative net savings of 45 aMW, exceeding its 2007 goal by 19 aMW.

To date (starting in 1997), the region has realized a total of approximately 210 aMW through regional efforts, a 30 percent rise from 2006. Of that 210 aMW, approximately 165 aMW were realized from projects the region invested in prior to 2005, and approximately 45 aMW were generated from projects funded between 2005 and 2007.

Just as experienced shareholders caution in rewarding companies on short-term gains at the expense of longer-term viability, the energy efficiency industry

as a whole is trending toward valuing longer planning cycles and upfront investments based on sound data, and to expect payback years or even decades later. Almost 40 percent of NEEA’s 2007 cumulative savings from both previously and currently funded projects were savings realized from projects that are no longer funded. This illustrates that today’s investments in energy efficiency continue to pay off far down the road.

According to the Northwest Power and Conservation Council, over the past 30 years the region has managed to save more than 3,300 aMW of electric power. That’s enough energy to power the city of Seattle three times over. Energy efficiency truly is the most cost-effective source of energy on the planet, and the region’s first priority for acquiring power through comprehensive market-based strategies.

PRIOR INVESTMENTS HAVE DELIVERED THE REGION 165 aMW IN SAVINGS

AVER

AGE

MEG

AWAT

TS

CUMULATIVE REGIONAL SAVINGS FROM PREVIOUS INVESTMENTS

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

400300200100

0

BUSINESS PLAN CYCLE CUMULATIVE NET MARKET EFFECTSNEEA EXCEEDING 2007 BUSINESS PLAN GOAL BY 19 aMW

AVER

AGE

MEG

AWAT

TS

50403020100

2005 2006 2007

GOAL

GOAL

45 aMW

BASELINE LOCAL NET

PRIOR INVESTMENTS HAVE DELIVERED THE REGION 165 aMW IN SAVINGS

AVER

AGE

MEG

AWAT

TS

CUMULATIVE REGIONAL SAVINGS FROM PREVIOUS INVESTMENTS

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

400300200100

0

BUSINESS PLAN CYCLE CUMULATIVE NET MARKET EFFECTSNEEA EXCEEDING 2007 BUSINESS PLAN GOAL BY 19 aMW

AVER

AGE

MEG

AWAT

TS

50403020100

2005 2006 2007

GOAL

GOAL

45 aMW

BASELINE LOCAL NET

Net Market Effect Savings = Regional Savings – Baseline Savings – Locally Incented Savings. Baseline savings refer to savings that would have occurred in the absence of NEEA, utilities or other conservation groups.

Robert BalzarSeattle City Light

Larry BlaufusClark Public Utilities

Ted coatesTacoma Public Utilities

Pat EganPacific Power

kathy Hadley NEEA Board Treasurer National Center for Appropriate Technology

margie HarrisEnergy Trust of Oregon

Tom karierNorthwest Power and Conservation Council

warren klineIdaho Power Company

sara PattonNW Energy Coalition

cal shirleyPuget Sound Energy

craig smith NEEA Board Chair Snohomish County PUD

mike weedallNEEA Board SecretaryBonneville Power Administration

Roger woodworthNEEA Board Vice ChairAvista Utilities

deb youngNorthWestern Energy

NEEA BOARd mEmBERs

THANk yOU fOR yOUR sUPPORT

529 SW Third Avenue, Suite 600 Portland, Oregon 97204 503-827-8416 800-411-0834 503-827-8437 (Fax)www.nwalliance.org

BETTER TOGETHER.

5 1,183 2 259 437

trees

fully grown gallons million Btu pounds pounds

water energy solid waste greenhousegases

NEEA saved the following resources by using New Leaf’s Reincarnation Matte paper:

Calculations based on research by Environmental Defense Fundand other members of Paper Task Force.

Printed on New Leaf Reincarnation Matte, designated Ancient Forest Friendly andmanufactured with electricity that is offset with Green-e® certified renewable energy certificates,

100% recycled fiber and 50% post-consumer waste, and processed chlorine free. www.newleafpaper.com