NV Energy IRP, Vol7 DSM progs. '10-'12

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BEFORE THE PUBLIC UTILITIES COMMISSION OF NEVADA Application of Nevada Power Company d/b/a NV Energy seeking acceptance of its Triennial Integrated Resource Plan covering the period 2010-2029, including authority to proceed with the permitting and construction of the ON Line transmission project. Docket No. 09-07003 VOLUME 7 OF 26 DEMAND SIDE PLAN DESCRIPTION PAGE NUMBER Demand Side Plan Exhibit A 2 Program Data Sheets Program Page Non-Profit Agency Grants 2 Energy Education 20 Low Income Weatherization 42 Market and Technology Trials 60 Demand Response 70 Residential Energy-Efficient Lighting 126 Second Refrigerator Collection and Recycling 152 Mobile and Manufactured Homes Retrofit 172 Commercial New Construction 192 Energy Smart Schools 218 Commercial Retrofit Incentives 238 Residential High Efficiency Air Conditioning 268 Energy Efficient Pools and Spas 302 Advanced Building Techniques 320 Consumer Electronics and Plug Loads 336 Energy Plus New Homes 358 In Home Displays 376 HomeFree Nevada 388 Residential Solar Thermal Water Heating 406 NevadaPowerCompanyNonProfitAgencyGrantsJanuary20101NevadaPowerCompanyProgramDataSheetNonProfitAgencyGrantsJanuary2010Exhibit APage 2 of 432NevadaPowerCompanyNonProfitAgencyGrantsJanuary20102TableofContentsProgramSummary ......................................................................................................................3SectionA:2008ProgramResults..................................................................................................32008Analysis........................................................................................................................52008LessonsLearned.............................................................................................................6SectionB:2009Program..............................................................................................................62009ProgramExecution.........................................................................................................62009ResultstoDate ...............................................................................................................6SectionC:Proposed2010,2011,and2012Program ......................................................................7Rationale andSupportingData ...............................................................................................10SupportingSavingsData.......................................................................................................1020102012ProgramExecution ...............................................................................................1220102012ProgramManagementPlan....................................................................................12M&VObjective....................................................................................................................13SectionD:ProgramEconomicEvaluation ..................................................................................14CostBenefitAnalysis............................................................................................................14Freeridership........................................................................................................................14InputData,DescriptionofSources,andResultsofFinancialAnalysis........................................14InterpretationofResults........................................................................................................17SectionE:SupportingDocumentation .......................................................................................17ListofTablesTable1:2008NonProfitGrantsResults...................................................................................................................... 4Table2:ActualResults2006through2008................................................................................................................... 4Table3:FirmVerifiedLoadImpactResults ................................................................................................................. 5Table4:Budgets,ProgramYears20102012 ................................................................................................................ 9Table5:Targets,ProgramYears20102012 ................................................................................................................. 9Table6a:BaseScenarioProposedTargetsandBudgets,ProgramYears20102012 ............................................................ 9Table6b:LowScenarioProposedTargets andBudgets,ProgramYears20102012 ............................................................ 9Table6c:HighScenarioProposedTargetsandBudgets,ProgramYears20102012.......................................................... 10Table7a:BaseScenario ProgramBudgetbyCategory,ProgramYears20102012.......................................................... 11Table7b:LowScenario ProgramBudgetbyCategory,ProgramYears20102012.......................................................... 11Table7c:HighScenario ProgramBudgetbyCategory,ProgramYears20102012 ......................................................... 12Table8a:Base ScenarioCostTestResults20102012.................................................................................................. 15Table8b:LowScenarioCostTestResults20102012 .................................................................................................. 15Table8c:HighScenarioCostTestResults20102012.................................................................................................. 15Table9a:BaseScenarioUtilityEconomicEvaluation .................................................................................................. 16Table9b:LowScenarioUtilityEconomicEvaluation................................................................................................... 16Table9c:HighScenarioUtilityEconomicEvaluation .................................................................................................. 16ListofFiguresNoneExhibit APage 3 of 432NevadaPowerCompanyNonProfitAgencyGrantsJanuary20103Date: January2010ProgramName: NonProfitAgencyGrantsProgramStatus: ContinuedProgramManager: TimKierszPrimaryContractor(s): NevadaPower2009Budget: $100,000ProposedBudget:2010:2011:2012:Low$88,000$88,000$88,000Base$110,000$110,000$110,000High$138,000$138,000$138,000TRCB/CRatios: Low1.48Base1.48High1.46ProgramSummaryThis program assists nonprofit organizations with energy efficient construction methods in new andexisting building programs. In order to qualify, an agency must be a 501(c)3 entity located within theNevada Power service area, and the grant money must be used to fund energyefficient retrofits and/orweatherization projects.Constructionmayinvolveresidential,officeandwarehousefacilities.Many nonprofit organizations work with limited budgets and rely on private donations and grants toprovide their services. In addition, Nevada Powers experience has shown that some nonprofitorganizations occupy older buildings due to the reduced cost to own or lease. These older buildingsgenerally have significant energy deficiencies and therefore offer a greater opportunity for energysavings.Nonprofitorganizationscanbegreatlyimpactedbyincreasesinenergycosts,andtheirlimitedresources may only cover routine and emergency maintenance, without consideration for long termenergy reduction. This program assists in identifying areas where the nonprofit organization mayincorporateenergysavingsequipmentandconstructionmethodsintotheirbuildingplanstoreduceenergycosts.SectionA:2008ProgramResultsA total of 14 nonprofit organizations received grant awards in 2008 for a total of 20 installed energyefficiency measures. In addition, six organizations received grants in 2007 for 10 energy efficiencymeasures but did not complete their projects until 2008. The 2007 measurement and variance (M&V)study was not updated and the 2007projects completed in 2008 were included in the 2008 M&V study.Table1providesasummaryofthe2008programyearresultswhichincludethe2007projectscompletedin2008. Table2providesasummaryofthe programresultsfortheperiod2006through2008.The energy efficiency measures included HVAC upgrades, lighting retrofits, LED exit signs,programmablethermostats,solarscreens,andwindfilm.Table3detailstheverifiedenergyanddemandprovided in Table 1 and also provides a summary of the number and type of energy saving measuresinstalledin2008.Exhibit APage 4 of 432NevadaPowerCompanyNonProfitAgencyGrantsJanuary20104Grants were awarded based on the greatest kW and kWh savings compared to the grant amount.Beginning with program year 2009, an economic hurdle rate will be used in the evaluation of eachrequest.Inorderfortherequesttobeaccepted,itmustsupportaTRCof1.20orgreater.Table1: 2008NonProfitGrantsResultsTarget Actual %ofTargetBudget$100,000 $77,122 77.1%Participants20 20 100.0%DemandSavings(kW)116 140 120.7%EnergySavings(kWh)225,000 406,189 180.5%TRC1.29 2.83 219.4%Table2:ActualResults2006through20082006 2007 2008 TotalBudget$108,384 $104,050 $77,122 $289,556Participants17 16 20 53EnergySavings(kWh)146,000 82,283 406,189 634,472DemandSavings(kW)86 42 140 268Exhibit APage 5 of 432NevadaPowerCompanyNonProfitAgencyGrantsJanuary20105Table3:FirmVerifiedLoadImpactResultsECMCountAnnualSavings(kWh)Partialyr2008Savings(kWh)CriticalPeakDemandSavings(kW)DirectLighting 7 144,197165,202 140Lighting 7 165,729HVAC 11 95,404Fenestration 3 649Refrigeration 1 210Custom 1 Total 30 406,189 165,202 1402008AnalysisThe program was successful based on the 2008 program results and the actual expenditures for theprogramyear.Thesuccessofthe programcanbeattributedtothefollowingfactors:Nevada Power worked to improve the overall performance of the program by working with nonprofitorganizations on improving their evaluation process and incorporating measures that would maximizetheir energy savings. Furthermore, it addressed a concern regarding the overestimation of programsavingsbyparticipantsinpriorprogramyears.NevadaPowerreviewedtheestimatesforreasonablenessand compared the estimates with the factors utilized by its M&V contractor and applied a costeffectiveness evaluationpriortoapprovingtheprojects.Thisimprovedtheaccuracy oftheparticipantsenergysavingsestimation.Nevada Power worked to maintain interest in theprogram by having a direct mailing to 268 nonprofitorganizationswithinitsserviceterritory.ThiswassupplementedwithadvertisementonNevadaPowerswebsite,apressrelease,andotherpublicoutreachefforts.Incombinationwiththeeducationprovidedtoeachparticipatingorganization,thiscontributedtoasuccessful programyear.In addition, many of the participants used internal personnel to install efficacy measures to lower theirlaborcostand,asresult,improvedtheTRCforthe program.Several of the projects started in 2007 were not completed until 2008 and were delayed because ofcontractorconflicts,nonprofitpersonnelturnover,andalatestartdatefortheseprojects.Theresultsofthese carryover projects was that the 2007 performance appeared to be less than what actually wasaccomplishedandthe 2008resultsareoverstatedintermsoftheprojectsinitiatedin2008.Exhibit APage 6 of 432NevadaPowerCompanyNonProfitAgencyGrantsJanuary201062008LessonsLearnedNevada Powers effort to improve the participants evaluation process and to incorporate energyefficiency measures that were not considered by the participant was very successful in improving theoverall performance of the program. Because education is important in the overall success of theprogram, it may provide an avenue to expand theprogram. Furthermore, this also addressed a problemattributedtotheparticipantoverestimatingenergyanddemandsavings.Inordertomaintaininterestintheprogram,itisimportthatthedirectmailingtononprofitorganizationsbe supplemented with advertisements on Nevada Powers web site, a press release, and other publicoutreachefforts.Manyparticipantsusedinternalpersonneltolowertheirlaborcostand,asresult,improvetheTRCfortheprogram.Thisimprovementwasattributedto programswheretheincentivepaidfortheentirecostoftheprogram.Nevada Powers intent is to complete the approved projects in the year approved. The 2007 projectscompleted in 2008 were delayed because of contractor conflicts, nonprofit personnel turnover, andapprovalofthe projectsinthefourthquarterof2007.Detailed information for performance of this program in 2008 is included in the Section B of the 2008Annual DSMUpdate Report provided in ExhibitB.SectionB:2009ProgramThe goal/objective of this program is to provide assistance to qualifying nonprofit organizations with theinstallation of energy efficient measures. The nonprofit organization must be a 501(c)3 entity locatedwithinNevadaPowersservicearea.Byprovidingthisservice,thegrantsassistthecommunitybyreducingthe nonprofit organizations energy cost and allowing the nonprofit agency to increase its service to thecommunity.2009ProgramExecutionThe program will continue its efforts to achieve this goal/objective of providing assistance to qualifyingnonprofit organizations with the installation of energy efficient measures in new and existing buildingprograms.Thefollowingchangesandlessonslearnedhavebeenincorporatedintheexecutionofthe2009program: Nevada Power will continue to target measures that providesignificant energy savings and willcontinue the process of advising participants regarding these measures with higher savingpotential.Thisprovedtobesuccessfulin2008andwillcontinuetobeutilized. As stated by Nevada Power in Section B of the 2008 Annual DSM Update Report provided inExhibitB,eachgrantwillbeevaluatedutilizingatargetTRCof1.20 orgreater. To insure that projects are completed within theprogram year, Nevada Power will implement aprocess to encourage that an approved project is completed by December 1 of the applicableprogram year. If the program cannot be completed by this deadline date, the project will bemovedtothesubsequentprogramyear.2009ResultstoDateAll grant requests were required to be submitted by May 1, 2009. The review of thegrant requests hasbeencompleted.Exhibit APage 7 of 432NevadaPowerCompanyNonProfitAgencyGrantsJanuary20107SectionC:Proposed2010,2011,and2012ProgramThe strategy for this program is to provide design recommendations and/or grants for selected energyreducingmeasures.Aneconomichurdleratewillbeusedintheevaluationofeachgrantandgrantswillbe awarded based on whether theproject supports a target TRC of 1.20or greater. The specific grantsvarygreatlyinwhatisrequested(actualrangesarebetween$1,000and$10,000)andtheactualmeasuresareoftenunique.Therefore,thereisnotaspecifictargetkWandkWhsavingspermeasure.TechnicalsupportandenergyefficiencyinformationwillbemadeavailablefornewandexistingfacilitiesbyNevadaPowersenergyconsultants.Theparticipatingnonprofitwillmeetwithanenergyconsultanttoreviewtheirenergyuseanddemands.Suggestedenergyupgradeswill includerecommendationsbasedupon the Take Control message of no cost, low cost and added cost improvements specific to theprogram. Energy consultants will visit the nonprofit agencies that request an improvement grant andsuggest improvements they may wish to submit in their grant request. Specifically the suggestedupgrades will include recommendations for the replacement or substitution of higher efficiencyequipment, lighting, and weatherization, and an estimate of the potential cost savings based on similarprojectsorhistoricaldata. ProjectsavingswillbeintheformofanestimatedkWhorpercentagesavingsratherthanspecificdollarsavings.Apostconstructioninspectionwillbeconducteduponcompletionoftheimprovements.During the first quarter of each year, letters will be mailed to approximately 300 nonprofit agenciesannouncingtheprogramandinvitingapplications.ThenonprofitagencywillestimatethekWandkWhsavings with input from Nevada Power based on the information provided by the nonprofit agencies.These estimates willbeconfirmedbased onfactorsutilizedbytheNevadaPowerM&Vcontractor.AllofthegrantsareexpectedtobeawardedduringMay.Thefollowingsummarizesthestepsintheprogramprocess: Invitationsforgrantrequestsaresenttoapproximately300Nonprofitorganizations. Organizationsobtainbidsfromenergyefficiencymeasuresfromcontractors. NonprofitOrganizationssubmitgrantrequests. Grant requests are reviewed and awarded based on the TRC hurdle rate of 1.20. In addition,Nevada Power personnel discuss with successful participants their proposal and will ensure thattheirprojectcanbecompletedbyDecember1. Projectsareimplemented. NonprofitorganizationnotifiesNevadaPowerwhentheirprojectiscomplete. Pre andPostmeterreadingsarecollectedandinputtedinDataStore. Sitesareinspectedtoverifythatmeasuresareinstalled.Exhibit APage 8 of 432NevadaPowerCompanyNonProfitAgencyGrantsJanuary20108TheproposedbudgetsandtargetsatthebaseandhighscenariosforthisprogramarepresentedinTable4andTable5.ProgramdetailsbyscenarioareshowninTables6a,6b,and6c.InvitationsforgrantrequestsaresenttoNonProfitsOrganizationsobtainbidsforenergyefficiencyimprovementNonProfitAgenciessubmitgrantrequestsGrantrequestsarereviewedandawardedbasedonkWhsavingsAnddollarsavailableProjectsareimplementedNonProfitAgenciesnotifySPPCwhenprojectiscompletePre andpost meterreadingsarecollectedandinputtedintoPRISMsoftwaretogetinitialsavingsSitesareinspectedtoseethatthemeasuresareinstalledasclaimedExhibit APage 9 of 432NevadaPowerCompanyNonProfitAgencyGrantsJanuary20109Table4:Budgets,ProgramYears20102012ScenarioBudgetTRC2010 2011 2012Base $110,000 $110,000 $110,000 1.48Low $88,000 $88,000 $88,000 1.48High $138,000 $138,000 $138,000 1.46Table5:Targets,ProgramYears20102012ScenarioAnnualEnergySavings(kWh) AnnualDemandSavings(kW)2010 2011 2012 2010 2011 2012Base 201,420 201,420 201,420 69 69 69Low 181,278 181,278 181,278 63 63 63High 249,760 249,760 249,760 86 86 86Table6a:BaseScenarioProposedTargetsandBudgets,ProgramYears20102012TotalProgram BaseScenario 2010 2011 2012Budget,TotalProgram $110,000 $110,000 $110,000No.ofParticipants25 25 25DemandSavings(kW) 69 69 69EnergySavings(kWh) 201,420 201,420 201,420Table6b:LowScenarioProposedTargetsandBudgets,ProgramYears20102012TotalProgram LowScenario 2010 2011 2012Budget,TotalProgram $88,000 $88,000 $88,000No.ofParticipants 20 20 20DemandSavings(kW) 63 63 63EnergySavings(kWh) 181,278 181,278 181,278Exhibit APage 10 of 432NevadaPowerCompanyNonProfitAgencyGrantsJanuary201010Table6c:HighScenarioProposedTargetsandBudgets,ProgramYears20102012TotalProgram HighScenario 2010 2011 2012Budget,TotalProgram $138,000 $138,000 $137,500No.ofParticipants 31 31 31DemandSavings(kW) 86 86 86EnergySavings(kWh) 249,760 249,760 249,760RationaleandSupportingDataThe program will continue its efforts to achieve its goal/objective of providing assistance to qualifyingnonprofitorganizationswiththeinstallationofenergyefficientmeasuresinnewandexistingbuildings.NevadaPowerproposesthatthebasescenariorepresentacontinuationofthepreviouslyapprovedprogramscenario.AsdetailedinTable3,whichprovidesasummaryoftheactualresultsforthelastthreeprogramyears(20062008),theprogramhasexperiencedsavingsthathavevariedbyyearduetoprojectsthatcarryoverfromyeartoyear.Theenergysavingsfor2008arenotagoodbasegoingforwardsincetheycontainenergy savings for projects that carried over from 2007. The targeted savings for the base scenario havethereforebeensetclosetotheaverageprogramsavingsachievedoverthelastthreeyears.NevadaPowerbelieves that with the program process enhancements listed below this targeted goal is attainable on anannualbasis. Nevada Power will continue to target measures that providesignificant energy savings and willcontinue the process of advising participants regarding these measures. Furthermore, NevadaPowerwillensurethatestimatedenergyanddemandsavingsareconsistentwiththecriteriausedbyitsM&Vcontractor. NevadaPowerevaluateseachgrantproposalutilizingatargetTRCof1.20 orgreater. To insure that projects are completed within theprogram year, Nevada Power will implement aprocess to encourage that an approved project is completed by December 1 of the applicableprogramyear.Iftheprojectcannotbecompletedbythisdeadlinedate,theprojectwillbemovedtothesubsequentprogramyear.Thehigh scenario incorporatesamoreaggressiveprogram.Basedonprogramresults,aprimaryproblemwith expanding this program is the lack of participant knowledge regarding evaluation procedures andenergymeasures.NevadaPowerhasimplementedaprogramwheresuccessfulparticipantsarecontactedand provided this information. Nevada Power proposes an increased outreach program at the highscenario that would provide more assistance and training regarding the evaluation process and energyefficiencymeasures.SupportingSavingsDataBecause of the diversity of the energy efficiency measures proposed by the individual nonprofitorganizations,the estimated energyand demandsavings werebased onthe historicalaverageforthelastthree programyears(20062009).Theprogrambudgetbreakoutforthebase,lowandhighscenariosarepresentedinTables7a,7b,and7c.Exhibit APage 11 of 432NevadaPowerCompanyNonProfitAgencyGrantsJanuary201011Table7a:BaseScenarioProgramBudgetbyCategory,ProgramYears20102012ProgramYear 2010 2011 2012Marketing,AdvertisingandTechDemo $1,500 $1,500 $1,500ImplementationContractor $0 $0 $0Rebates/Grants $96,500 $96,500 $96,500MeasurementandVerification $3,500 $3,500 $3,500CustomerResearch $1,500 $1,500 $1,500UtilityLaborandOverheads $7,000 $7,000 $7,000TotalProgramCost $110,000 $110,000 $110,000Table7b:LowScenarioProgramBudgetbyCategory,ProgramYears20102012ProgramYear 2010 2011 2012Marketing,AdvertisingandTechDemo $1,200 $1,200 $1,200ImplementationContractor $0 $0 $0Rebates/Grants $77,300 $77,300 $77,300MeasurementandVerification $2,500 $2,500 $2,500CustomerResearch $1,200 $1,200 $1,200UtilityLaborandOverheads $5,800 $5,800 $5,800TotalProgramCost $88,000 $88,000 $88,000Exhibit APage 12 of 432NevadaPowerCompanyNonProfitAgencyGrantsJanuary201012Table7c:HighScenarioProgramBudgetbyCategory,ProgramYears20102012ProgramYear 2010 2011 2012Marketing,AdvertisingandTechDemo $1,880 $1,880 $1,880ImplementationContractor $0 $0 $0Rebates/Grants $120,240 $120,240 $120,240MeasurementandVerification $5,000 $5,000 $5,000CustomerResearch $1,880 $1,880 $1,880UtilityLaborandOverheads $9,000 $9,000 $9,000TotalProgramCost $138,000 $138,000 $138,00020102012ProgramExecutionTheprogramwillcontinuetoprovideassistancetoqualifyingnonprofitorganizationswiththeinstallationof energy efficient measures in new and existing buildings. The program will incorporate the changes inprogramdeliveryprocessasnotedearliertoimproveandstabilize programperformance.TechnicalsupportandenergyefficiencyinformationwillbemadeavailablefornewandexistingfacilitiesbyNevadaPowersenergyconsultants.Theparticipatingnonprofitwillmeetwithanenergyconsultanttoreviewtheirenergyuseanddemands.Suggestedenergyupgradeswillincluderecommendationsbasedupon the Take Control message of no cost, low cost and added cost improvements specific to theprogram. Energy consultants will visit the nonprofit agencies that request an improvement grant andsuggest improvements they may wish to submit in their grant request. Specifically, the suggestedupgrades will include recommendations for the replacement or substitution of higher efficiencyequipment, lighting, and weatherization, and an estimate of the potential cost savings based on similarprojectsorhistoricaldata. ProjectsavingswillbeintheformofanestimatedkWhorpercentagesavingsratherthanspecificdollarsavings.Apostconstructioninspectionwillbeconducteduponcompletionoftheimprovements.During the first quarter of each year, letters will be mailed to approximately 300 nonprofit agenciesannouncingthe programandinvitingapplications.ThenonprofitagencywillestimatethekWandkWhsavings with input from Nevada Power based on the information provided by the nonprofit agencies.These estimates willbeconfirmedbased onfactorsutilizedbytheNevadaPowerM&Vcontractor.AllofthegrantsareexpectedtobeawardedduringMay.Eachsitewillbeinspectedatthecompletionoftheinstallationoftheenergyefficiencymeasures.20102012ProgramManagementPlanAs noted earlier, the program has experienced two issues in the past that have detracted from theperformanceofthe program.Exhibit APage 13 of 432NevadaPowerCompanyNonProfitAgencyGrantsJanuary201013Thefirstissueisthattheprojectsproposedbythe nonprofitsfrequently overstatedthepotentialsavingsfor a measure in the grant applications due to a lack of understanding. The result is that the programunderachievedintermsofenergysavingswhenevaluated.Two programchangeshavebeenincorporatedin the delivery of theprogram to address this issue. The first is that Nevada Power will send an energyauditortoassistthenonprofitorganizationstoassesspotentialprojectandassociatesavings.Thesecondaction will be that each grant request be reviewed to determine if it meets the target TRC threshold of1.20. These changes will minimize the probability that projects will be approved and result indisappointingenergysavings.Thesecondproblemthatthe programhasencounteredisthatanumberofnonprofitshavenotcompletedtheirprojectsintheyearinwhichtheywereapprovedresultingintheenergysavingsbeingrecordedinadifferentyearthanthe projectexpenditures. Program managementtoolshavebeenaddedtominimizethenumber of projects that carry over from one year to the next to minimize mismatch of expenditures andenergysavings.20102012DataDeliveryandTrackingProgramData results related to the 2010 2012 NonProfit Agency Grants Program will be gathered fromparticipantsonamonthlybasis.ThemonthlyupdatedresultswillberecordedintheDataStoremonthlyviaelectronicreportingprotocols.M&VObjectiveTheEM&VContractorwillperform evaluation, measurementand verification(EM&V)activitiestoconfirm the savings being realized through the NonProfit Agency Grants Program that will beimplementedinSouthernNevada.ApproachEstimation of total program savings is based on a ratio estimation procedure, which allowsprecision/confidence requirements to be met with a smaller sample size. To apply the ratio estimationprocedure, the EM&V Contractor will produce two estimates of gross savings for each project in asample,an expectedgrosssavings estimate(asreportedintheprogramtrackingsystem)andthe verifiedgross savings estimates developed through the M&V procedures. Programlevel gross savings then aredeveloped by applying savings realization rates calculated for sample projects to the programlevelexpectedsavings.The following equations are used to determine the number of projects to be selected for the analysissample,nz cv(y)p02 22 = + =Nn11n n00where n is required sample size z is the abscissa of the standard normal curve for a specified level ofconfidence p is required precision level and cv(y) is coefficient of variation for the variable to beExhibit APage 14 of 432NevadaPowerCompanyNonProfitAgencyGrantsJanuary201014estimated (e.g., hours of use). The second equation applies a finite population correction factor todetermine finalsamplesizewhenno/Nisgreaterthan10%.SampleSelectionThesampleshould haveasufficient numberofprojectsto estimatethetotalachievedsavings with10%precision at 90% confidence. Given these precision/confidence requirements, the required sample sizeincreasesasthevariabilityofthevariabletobemeasuredincreasesinsize. Forplanningpurposes,acv=0.5isassumed.Therequiredsamplesize(notconsideringthefinitepopulationcorrectionfactor)is68.For the NonProfit Agency Grants Program, grants are made in the first half of the year. Thus, thepopulationofprojectsisknown.Theanalysissampleischosenfromthispopulation.OnsiteSurveysandVerificationsThe EM&V Contractor will conduct onsite visits to the selectedsample of sites that installed measuresthrough the program to collect data with which to verify the installation of the measures for whichfunding was provided. Before visiting a site, the EM&V Contractors field personnel will review thedocumentationfor eachprojectatthatsiteto ensurethatthey haveacomplete listand descriptionofthemeasures.During the onsite visit, the EM&V Contractors field staff will verify that the measures recorded in theprojectsfilewereindeedinstalled,thatthey wereinstalledcorrectly,andthattheyfunctionproperly.M&VDataStoreTheNevadaDSMM&VDataStoreWebPortal,referredtoasDataStore,isawebportalthathasbeencustomized for both Nevada Power Companys and Sierra Pacific Power Companys internal use. ItsfunctionistotrackDemandSideManagement(DSM)programperformance.TheDataStoresupportstheevaluation,measurement,andverificationactivitiesbyprovidingthedataneededforsampleselectionandverificationofsavingsdata.The DataStoreispopulatedwithdataprovidedbythe programmanageronamonthlybasis.SectionD:ProgramEconomicEvaluationCostBenefitAnalysisThe cost/benefit analysis for this program was performed utilizing the PortfolioPro financial modelingsoftwarecreatedbytheCadmusGroupforNevadaPowerandSierraPacificPower.Thiscomprehensivemodeling software utilizes a stream of avoided costs broken down by each of the 8,760 hours for eachyearoftheusefullifeofameasure.FreeridershipThe most recently completed analysis freeridership and NetToGross Ratios (NTGR) was conductedby PAConsulting Group (PA) in 2009. The freeridership rate for this program as determinedby PA is12.7%.InputData,DescriptionofSources,andResultsofFinancialAnalysisA copy of the input data sheets and financial models are provided inTechnical AppendixItemDSM2.ThesefigureswereallcalculatedbasedupontheinformationcontainedinthisprogramdatasheetandtheExhibit APage 15 of 432NevadaPowerCompanyNonProfitAgencyGrantsJanuary201015materials referenced herein. The following tables summarize theresults of the financial analysis for allthreescenarios.Table8a:BaseScenarioCostTestResults20102012CostTest B/C Benefits(NPV) Costs(NPV) NetBenefits CCE$/KWhTotalResource1.48 $496,165 $336,217 $159,947 $0.05Utility1.82 $554,972 $304,577 $250,395 $0.04Participant$529,718 ($25) $529,743 $0.00Ratepayer0.56 $496,165 $893,102 ($396,937) $0.12Societalcost1.66 $559,412 $336,217 $223,195 $0.05Table8b:LowScenarioCostTestResults20102012CostTest B/C Benefits(NPV) Costs(NPV) NetBenefits CCE$/KWhTotalResource1.48 $396,932 $269,003 $127,929 $0.05Utility1.82 $443,982 $243,688 $200,294 $0.04Participant$423,775 ($20) $423,795 $0.00Ratepayer0.56 $396,932 $714,513 ($317,582) $0.12Societalcost1.66 $447,530 $269,003 $178,526 $0.05Table8c:HighScenarioCostTestResults20102012CostTest B/C Benefits(NPV)Costs(NPV) NetBenefits CCE$/KWhTotalResource1.46 $615,244 $420,272 $194,972 $0.05Utility1.81 $688,753 $380,721 $308,032 $0.04Participant$656,851 ($31) $656,882 $0.00Ratepayer0.55 $615,244 $1,111,081 ($495,836) $0.12Societalcost1.65 $693,671 $420,272 $273,399 $0.05Exhibit APage 16 of 432NevadaPowerCompanyNonProfitAgencyGrantsJanuary201016Table9a:BaseScenarioUtilityEconomicEvaluationUtilityResults FirstYear TotalProgramTotalCosts $109,988 $329,964EnergySavings(kWh) 187,889 7,327,680EnergyBenefits($) $7,834 $506,285CostofConservedEnergy N/A $0.04CriticalPeakDemandSavingsKW64 N/ATable9b:LowScenarioUtilityEconomicEvaluationUtilityResults FirstYear TotalProgramTotalCosts $88,000 $264,000EnergySavings(kWh) 150,311 5,862,144EnergyBenefits($) $6,267 $405,028CostofConservedEnergy N/A $0.04CriticalPeakDemandSavingsKW52 N/ATable9c:HighScenarioUtilityEconomicEvaluationUtilityResults FirstYear TotalProgramTotalCosts $137,485 $412,455EnergySavings(kWh) 232,983 9,086,324EnergyBenefits($) $9,714 $627,793CostofConservedEnergy N/A $0.04CriticalPeakDemandSavingsKW80 N/AExhibit APage 17 of 432NevadaPowerCompanyNonProfitAgencyGrantsJanuary201017InterpretationofResultsThe Total Resource Cost (TRC) Test is the ratio of the discounted total benefits of a program to thediscountedtotalcostsoverthelifeoftheinstalledunits.TheTRCratiosbyscenarioare: BaseScenario=1.48 LowScenario=1.48 HighScenario=1.46Thesevaluesindicatethis programisbeneficialtotheUtilityanditsratepayers.Itisnotedthatthecostofconservedenergybyscenarioare: BaseScenario=$0.04/kWh LowScenario=$0.04/kWh HighScenario=$0.04/kWhSectionE:SupportingDocumentationThe M&VReportfor2008isprovided asTechnicalAppendixItem DSM16.Exhibit APage 18 of 432Exhibit APage 19 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary20101NevadaPowerCompanyProgramDataSheetEnergyEducationandConsultationProgramJanuary2010Exhibit APage 20 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary20102TableofContentsProgramSummary ......................................................................................................................3SectionA:2008ProgramResults..................................................................................................62008Analysis........................................................................................................................82008LessonsLearned.............................................................................................................9SectionB:2009Program............................................................................................................102009ProgramExecution.......................................................................................................102009ProgramResultstoDate ................................................................................................10SectionC:Proposed20102012Program....................................................................................12RationaleandSupportingData ...............................................................................................16SupportingSavingsData.......................................................................................................1720102012ProgramExecution ...............................................................................................1820102012ProgramManagementPlan....................................................................................1920102012DataDeliveryandTracking ...................................................................................19M&VPlan ...........................................................................................................................20SectionD:ProgramEconomicEvaluation ..................................................................................21CostBenefitAnalysis............................................................................................................21ListofTablesTable1:ProgramYear2008Results............................................................................................................................ 6Table2:ProposedBudgetsSummaryfortheBase,LowandHighProgramScenarios ....................................................... 13Table3a:20102012BaseScenario........................................................................................................................... 14Table3b:20102012LowScenario........................................................................................................................... 15Table3c: 20102012HighScenario........................................................................................................................... 16Table4a:BaseLevel ProgramBudgetbyCategory,ProgramYears20102012.............................................................. 17Table4b:LowLevel ProgramBudgetbyCategory,ProgramYears20102012.............................................................. 18Table4c:HighLevel ProgramBudgetbyCategory,ProgramYears20102012.............................................................. 18ListofFiguresNoneExhibit APage 21 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary20103Date: January2010ProgramName: EnergyEducationandConsultationProgramStatus: Continued/ExpandedProgramManager: TimKierszPrimaryContractor(s): NevadaPower2009Budget: $400,000ProposedBudget:2010:2011:2012:Low$400,000$400,000$400,000Base$475,000$500,000$500,000High$600,000$600,000$600,000TRCB/CRatios: LowN/ABaseN/AHighN/AProgramSummaryThe Energy Education and Consultation Program is designed to educate and assist customers, builders,and developers regarding the efficient use of electricity and to inform customers of the environmentalbenefitsofconservation.Theprogramiscomprisedoffourdistinctmeasures: TheSmallCommercialCustomerEducationmeasureiscollaboration betweenNevadaPower,theManagement Assistance Partnership (MAP) and the Nevada System of Higher Education. Thismeasure provides education for those responsible for building operations. The measure offers aseries of classes on how to operate buildings efficiently, how to properly maintain energyconsuming equipment,and howto develop managementorientedproposalstoimplement energyefficiencyequipmentorimprovementsattheirfacility.The training is delivered through a partnership with MAP and utilizes the FOCUS (FacilityOperator Certification for Utility Systems) curriculum. This curriculum was developed, in part,by two advisory boards (one in southern Nevada and one in northern Nevada) comprised ofsenior practitioners and other experts. The curriculum includes managing energy usage in theirbusinesses, proper maintenance processes to achieve and sustain efficient usage of energy,building and equipment upgrades for better energy efficiency, and developing managementorientedenergyefficiencyfundingproposals.NevadaFOCUSisastatewidetrainingandcertificationprogramdesignedforbuildingengineers,facilityoperators,theircrewsandotherinterestedparties.ThepurposeoftheSmallCommercialCustomer Education measure is to develop instate resources for facility energy education at thebuildingoperatorlevelandimproveenergyefficienciesalongwithindoorairqualityforbuildingoccupants,employeesandpatrons.NevadaFOCUSisrecognizedstatewidethroughcontinuingeducation or professional development credit. Upon successful completion of each course,recipientsreceive0.7CEDU(7PDH)andareissuedacertificateofcompletion. The Home and Trade Shows measure provides energy efficiency and conservation education forcustomersat variousshowsandcommunity events. Energy educationprovidesnoand lowcostExhibit APage 22 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary20104measures that customers can take to conserve energy and supports the entire portfolio of DSMprograms by introducing various DSM programs to customers and by promoting ways they canparticipate in these programs in order to lower their energy consumption and their energy bills.Education is accomplished by personal interaction with customers and by providing bags thatcontainenergyefficiencyandconservationmessagematerialsaswellasmaterialpromotingDSMprograms. A proven list of practices that a customer can use to conserve energy and improveenergyefficiencyoftheirhomeorbusinessisprovidedinthebags. The Residential and Commercial Builder Support and the ENERGY STAR for New Homemeasure provide education for builders on the advantage of incorporating energy efficiencymeasures in newconstructionandassist inpromoting buildingsthatincorporate energy efficientpractices. The education provided home builders emphasizes the benefits of ENERGY STARrated homes and provides the latest information regarding updates to that program. NevadaPowerisakeyparticipantintheENERGYSTARPartnersforNewHomes,asouthernNevadajointmarketingeffortwhichhasearnednationalENERGYSTARawardsforsixyearsinarowfrom 2003 to 2008. ENERGY STAR certification is accomplished through buildercommitment to ENERGY STAR at the EPA and the regional southern Nevada builderassociations.Homes that earn the ENERGY STAR certification must meet guidelines for energy efficiencysetbytheU.S.EnvironmentalProtectionAgency(EPA).ENERGYSTARqualifiedhomesareat a minimum 15% more energy efficient than homes built to the 2006 International Efficiencyand Conservation Code (IECC). In contrast to codebuilt homes, ENERGY STAR qualifiednew homes offer homeowners superior performance and lower monthly energy costs. HomesearntheENERGYSTARlabelbymeetingEPAsguidelinesforenergyefficiency,astestedbyan independent third party. ENERGY STAR qualified homes can include a variety of energyefficient features, such as more effective insulation, high performance windows, tightconstructionandducts,efficientheatingandcoolingequipmentandENERGYSTARqualifiedlightingandappliances.The ENERGY STAR Home Program has helped bring leadingedge energy efficiencytechnologies to southern Nevada and significant energy and demand savings. The ENERGYSTARrequirementsareanticipatedtoincreasein2011pursuanttotheIECC2009standards.ItisanticipatedthatEPAplanstoreleasethe newENERGYSTARqualified homesstandardsinJanuary2010.Acomparisonofthedifferencesbetweenthe2006and2009IECCstandardstitledSummary of Major Changes between the 2006 and 2009 IECC is provided in TechnicalAppendixItem DSM7.NevadaPowerworkswiththeLasVegasnewhomeconstructioncommunitytoretainandrecruitbuilders, developers and retailers and to educate consumers on the advantages of purchasinghomes constructed to ENERGY STAR standards. The greater Las Vegas metropolitan areacontinues to be one of the nations premier ENERGY STAR residential new constructionlocationsduetothelargenumberofbuilderswhohaveadoptedENERGYSTARstandardsandthemarketsharetheyhaveattained. The Senior Energy Ambassador (SEA) activity will train approximately ten seniors per year.This is a new direction for Nevada Powers Energy Education andConsultation program. Thisinitiative has been developed with a goal to better reach this more difficult to reach segment ofourcommunityandbecause mostseniorareliving on fixed income, with many inlower incomelevels. The initial graduates from this program will assist in the development of an outreachprogram.The graduates oftheprogram will implementthis outreachprogram.The goalofthisExhibit APage 23 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary20105program is to empower seniors interested in energy efficiency to take an active role to reachfurther out into the community to educate others on the efficient use of energy and promoteavailable DSM programs. Inviting seniors to be energy ambassadors provides Nevada Powerwith new outreach capabilities as they are likely to have the time to volunteer and provideeducationintheirexistingnetworks.Exhibit APage 24 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary20106SectionA:2008ProgramResultsThesummaryofresultsachievedin2008isprovidedinTable1byindividualmeasure.Table1:ProgramYear2008ResultsProgramMeasureProgramBudget ConservationMetricsApproved Actual QuantityTargetQuantityAchievedResidentialandCommercialBuilderSupport$150,000 $152,678 182Educated FiveENERGYSTARPartnerandUSGBCLEEDSeminarsCompletedwith245Educated32%ofallnewhomesconstructedwerecertifiedENERGYSTAR7energysavingsanalysisfor332units28technicalguidanceprovidedforenergysavingsEducationalPresentations17Presentationscompletedwith90educatedTradeandHomeShowSupport$100,000 $100,578 56,706Attendance20,324Impacted87,130Attendance76,059 ImpactedSmallCommercialCustomerEducation$150,000 $144,560 66Attendees(12classsessionsleadingtoFocusCertification,2sessionsconcurrently)24FOCUSWorkshops132AttendeesTotal*44AttendeesUnique**44Graduates***AttendeesTotalrepresents totalattendeesatallsessionsandisrepetitiveamongattendees**AttendeesUniquerepresentsuniqueindividualsandnotthetotalnumberofindividualsinallclasses***Graduatesarethoseindividualsthatattendedall12coursesplustheCommissioningcourse.Exhibit APage 25 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary20107ResidentialandCommercialBuildersSupport/ENERGYSTARforNewHomeConstructionThe Residential and Commercial Builder Support and the ENERGY STAR for New HomeConstruction measure provides training for developers, contractors, building officials, and real estateprofessionalsandrecruitmentofbuilders,developers,andretailerstopromoteENERGYSTARhomeswithprospectivecustomers.TrainingNevada Power cosponsored and provided training for builders, developers, and retailers. Trainingcovered ENERGY STAR and USGBC LEED standards and Nevada Energy Code requirements.Thefollowinghighlightsthe2008results. Nevada Power cosponsored several training courses for area developers, contractors,building officials and real estate professionals. 245 building representatives and homebuilders received training in 2008. These training courses included ENERGY STARtrainingand2006IECCstandardtraining. Overall,thedemandforenergycodetraininginNevadawassignificantlylowerin2008thaninpastyears.Thisdecreaseinparticipationcanbeattributedtotheeconomicdownturnalongwith builder resistance to the new, more rigorous ENERGY STAR home requirementseffectivein2006.Training was provided at two venues during 2008. The two sessions were Southern NevadaChapter of the Illuminating Engineering Society and American Institute of Architects 2008Western Regional Conference. At these sessions the lighting requirements under the 2006IECC were explainedin detail. The AIAsession covered ASHRAEs 90.1 2004 StandardandAdvancedEnergyDesignGuideforSmallOfficeBuildings. Nevada Power provided seven energy savings analysis covering 332 units and technicalassistanceintheformof28consultationsand researchtobuildersandcontractors.RecruitmentofBuilders,Developers,andRetailersMembership in ENERGY STAR Partners in the state of Nevada for 2008 was down significantlyfromtheendof2007.Membershipsarerenewedannually.Thisdownwardtrendbeganin2006withthehousingcrisis.MembershipofNevadabuildersandotherpartnersattheendof2007was36.Attheendof2008thetotalwas28.Thereisagrowingreluctancefrommajorbuilderstocontinuetheirsupport based upon the downturn in the economy and the decline in the building industry. AnothercontributingfactortothisdecreaseisthedepartureofmanybuildersfromtheLasVegasareabecauseofthehousingdownturn.TradeandHomeShowSupport&CustomerPresentationsNevada Power participated in 64 community events and home shows, and 36 educational presentations.Thetotalnumberofindividualseducatedinthe36educationalpresentationswas1,511.Pursuant to the Commissions order in Docket No. 0608020, Table 1 provides the actual number ofattendeesandtheactualnumberofattendeesreceivingliterature/information.Ofthe87,130attendingthe64 home shows and community events, 76,059 were educated regarding energy efficiency andconservation.Thisnumberisbasedonthenumberofenergyinformationbagsdistributedattheseevents.Exhibit APage 26 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary20108Attendeeswhoreceivedabagcontainingenergyconservationmaterialsandinformationwereconsideredand counted as Impacted. The number of bags handed out is the indicator on how many customercontacts were made. This has proven a successful way to measure and increase the value of our energyeducationefforts.SmallCommercialCustomerEducationThe Small Commercial Customer Education measure provides training for individuals responsible foroperating commercial facilities. There were 132 FOCUS attendees in 2008 and 44 received theircertificate ofcompletion. Some oftheparticipantsattended classesthatwereofspecificinterestand didnotchoosetoparticipateinthecertificationprogram.Receivingthecompletioncertificateisasignificantaccomplishmentbasedonthelengthandintensityofthetraining.Participants from various state and local governments were included in the training in the southernNevada FOCUS Program. Attendees include facility maintenance employees of Clark County SchoolDistrict, Clark County Government, Nevada National Guard, Regional Transportation District, ClarkCounty Aviation Center, and the private sector including Las Vegas casinos. Of the total number ofparticipants, over 67% of the certifications issued were earned by employees of state and localgovernmentagenciessponsoredbytheNevadaStateOfficeofEnergy(NSOE)Grant.2008AnalysisThe implementation and execution of the program was effective in meeting program targets. Based onactual expenditures being slightly less than budget, the program exceeded the targeted number ofindividuals educated by 84.1% and far exceeded the targeted number of Impacted individuals by274.2%.This section provides a discussion of how the actual results varied from the program plan in terms ofbudgetandproposedgoals.ResidentialandCommercialBuildersSupportNevadaPowerutilized102%or$152,678ofits$150,0002008budget.The measure wasvery effectiveinobtainingthefollowingresults. The measure exceeded its goal in terms of the targeted number of builders/contractors (182)educated by 63 or a total educated of 245. This does not include an additional 90 builderrepresentativeswhoreceivedtraininginthe17fieldtrainingsessions. SinglefamilypermitsissuedinNevadafor2008new homeconstruction wasdown64%(5,826)as compared to 2007 (16,122) singlefamily permits. As reported in the Paragon ConsultingServices report titled 2008 NV Energy Companies ENERGY STAR Year End Report, thismeasure achieved a market share of 32% for ENERGY STAR homes constructed in 2008despitethe dramatic decline inthe housingindustry.Thisresultcomparesto61%in2007whenthe housing declinebegantotakeatoll onthehomebuildingindustry.Thereportisprovided inTechnicalAppendixItem DSM7. The number of ENERGY STAR homes resulted in an estimated 10,598 MWh of energysavings or 2,501 kWh per home kW demand savings of 9,538 kW or 2.4 kW per home andheatingsavingsof33,620MMBtuor8.46MMBtuperhome.Exhibit APage 27 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary20109NevadaENERGYSTARPartnersisacoalition oflocalresidentialdevelopersandbusinesspartnersincollaboration with the EPA. The purpose of this group is to promote the ENERGY STAR brand andeducatethepartnersonthebenefitsofanENERGYSTARhome.Thiscoalitionhasworkedonthisgoalforthepastsevenyears.MembershipinENERGYSTARPartnersinthestateofNevadahasexperiencedasignificantdecreasein the number of builders participating in the program. Membership of Nevada builders and otherpartnersattheendof2007wasnear36.Attheendof2008thetotalwas28,withonly9buildersactivelyparticipating in the program. Due to economic conditions in the building industry, support for theENERGYSTARProgramdeclined.Thenumberofparticipatingbuilderspeakedin2006.TradeandHomeShowsTheactualexpendituresfor2008were$100,578or100%ofthe2008budget.Thisreflectsamorefocusedand efficient use of the budget dollars. The 2008 effort resulted in nearly a quadrupling of our quantitytargetimpacted.The positive results for Nevada Powers Trade and Home Shows measure is directly related to customerconcernsregardingrisingenergycosts.ThismeasureprovidesanopportunityforNevadaPowertointeractdirectlywithcustomersempoweringthemtotakecontroloftheirenergyusageandthusbettermanagetheirbills.Themeasuregoalistoimpartenoughknowledgetoourcustomersatthevariouseventswhichleadstoapositivebehavioralchangeintheirdailyelectricalenergyuse.SmallCommercialCustomerEducationThe measureimplementation was effectivebased onacomparisonofactual expenditurestothetargetedgoal of 66 attendees and the reported annual energy savings. Actual expenditures represented 96.4% ofbudget.Theactualnumberofattendeesof132exceededthetargetedgoalby66andoftheseattendees44received certificates. In addition, annual energy savings of 9,483.2 MWh and 25,963 MMBtus wereestimatedbasedonparticipationinthismeasure.Furthermore, the Southern Nevada FOCUS Program was chosen to provide training and certification tokey staff members of the City Center construction project. The Commercial Customer Educationmeasure was incorporated in the overall training provided as part of this measure. Nevada FOCUS is acollaborative effort of Nevada Power and the Nevada System of Higher Education (NSHE) and theManagementAssistancePartnership(MAP).2008LessonsLearned Participation in the ENERGY STAR Homes Program has steadily declined due to the sagginghousing industry. In addition to the decline in housing, builder resistance to the new, morerigorous ENERGY STAR home requirements effective in 2006 has also contributed to thedecline in the number ENERGY STAR homes. It is anticipated that ENERGY STAR willincreasetheirstandardspursuanttothenewIECC2009standardseffectivein2011. In order to meet the possibility that the new stimulus plan will require a shift from ASHRAEStandard 90.1 2004 to Standard 90.1 2007and from the IECC 2006 code to the IECC 2009code,NevadaPowerwillseek partnershipstoshareinthecostoftherequiredtraining. NevadaPower and the other ENERGYSTARPartners have been asked to spearheada nationalpilot program in the Las Vegas market regarding ENERGY STAR for high rise residentialconstruction. We are only one of three markets (New York and Wisconsin) to be given thisExhibit APage 28 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary201010opportunity. Participation in this national program will ensure that Las Vegas maintains itsleadershipintheconstructionofenergyefficienthomes. The Energy Education and Consultation Program is designed to educate and assist customers,builders,and developersregardingthe efficientuse of electricityandto informcustomers oftheenvironmental benefits of conservation. However, the program does contribute to energy anddemand savings. The number of ENERGY STAR certified homes produced an estimated10,598MWhofenergysavingsor2,501kWhperhomekWdemandsavingsof9,537kWor2.4kW per home. In addition, the Small Commercial Customer Education measure participantsreportedthat26projectsproducedanannualenergysavingsof9,483MWhperyear.The Energy Education and Consultation Program continues the existing program, which is designed toeducate and assist customers, builders, and developers regarding the efficient use of electricity and toinform customers of the environmental benefits of conservation. The program is comprised of threedistinct measures: 1) Small Commercial Customer Education 2)Public Outreach (formerly Trade andHomeShows)and3)ResidentialandCommercial BuilderSupportincludingtheENERGYSTARforNewHomeProgram.SectionB:2009Program2009ProgramExecutionAs noted earlier, the 2009 program will continue to be implemented as in 2008. The followingsummarizesthespecificactionsthatwillbetakentomaintainandimprovethecurrentprogram. Participation in the ENERGY STAR Homes Program has steady declined due to the sagginghousingindustry.NevadaPoweranditsimplementationcontractorscontinuetoworkwithregionaland nationalENERGY STAR leaders to counteractthis decline in participation. NevadaPowerwill continue to help with marketing, education and outreach for the Nevada ENERGY STARPartnersactivitiesbecauseoftheimportanceinreducingenergyanddemandrequirements ENERGYSTARwillbeincreasingitsstandardin2011andanew emphasis willbeplaced onbuilders to improve the efficiency of the homes they build to meet these higher standards.NevadaPowerwillcontinuetoprovideeducationprogramstoreflectthischangeinstandardsandtoovercomebuilderresistancetothischange. In order to meet the possibility that the new stimulus plan will require a shift from ASHRAEStandard 90.1 2004 to Standard 90.1 2007and from the IECC 2006 code to the IECC 2009code,NevadaPowerwillseekpartnershipstoshareinthecostoftherequiredtraining. NevadaPower and the other ENERGYSTARPartners have been asked to spearheada nationalpilot program in the Las Vegas market regarding ENERGY STAR for high rise residentialconstruction.SouthernNevadaisonlyoneofthreemarkets(NewYorkandWisconsin)tobegiventhis opportunity. Participation in this national program will ensure that Las Vegas maintains itsleadershipintheconstructionofenergy efficienthomes.2009ProgramResultstoDateThefollowingsummarizestheprogramresultsthroughSeptember2009.Exhibit APage 29 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary201011 Residential and Commercial Builders Support ENERGY STAR for New Homes. Analysis ofproject plans for 3 projects with a total of 192 units was performed. In addition, technicalassistancewithenergysavingsmeasureswasprovidedin22cases.Nevada ENERGY STAR Partners also launched a 6month educational and marketingcampaign on the benefits of ENERGY STAR homes and products. Nevada Power supportedthese efforts with seminars, workshops, public outreach and a fourpage education insert in theLas Vegas Business Press. Nevada Power presented 3 seminars with 89 attendees andparticipatedin4publiceventswithanimpactedtotalof241. PublicOutreach.NevadaPowerhasconducted27seminars/presentations,withaneducatedtotalof562.Inaddition,NevadaPowerhasparticipatedin88home&tradeshows.Thetotalnumberofattendeeswas60,649withanimpactednumberof45,578. SmallCommercialCustomerEducation. Atotal oftwelve8 hourclasses havebeenconductedontwotracks,withanaverageclassparticipationof27perclass.Exhibit APage 30 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary201012SectionC:Proposed20102012ProgramThe 20102012 Energy Education and Consultation Program will expand beyond the successful 20072009 program. The program will continue to educate and assist customers, builders, and developersregarding the efficient use of electricity and will continue to inform customers of the environmentalbenefits ofconservation. In expandingtheprogram,thepurpose oftheprogram will not changebuttheimpactoftheprogramwillincrease.Thefollowingdescribestheproposedexpansion oftheprogram.BaseScenarioThe proposed base scenario provides for theexpansion of the Residential and Commercial Training andSupportmeasure,andtheadditionofaSeniorEnergyAmbassadormeasure.The Residential and Commercial Training and Support measure (formerly called the Residential andCommercial Builder Support and the ENERGY STAR for New Home measure) provides training fordevelopers, contractors, building officials, and real estate professionals along with the recruitment ofbuilders, developers, and retailers to promote ENERGY STAR new homes and the installation ofenergy efficient measures in existing homes with prospective customers. These activities have beenlimitedtonewconstructioninprioryears.Withthedownturninnewconstructionandarenewedinterestinhomeimprovements,NevadaPowerproposestoexpandthismeasuretoincludetrainingforcontractorsprimarilyinvolvedinhomerenovation.The Senior Energy Ambassador (SEA) activity will train approximately ten seniors per year. The initialgraduatesfromthisprogramwillassistinthedevelopmentofanoutreachprogram.Thegraduatesoftheprogram will implement this outreach program. The goal of this program is to empower seniorsinterested in energy efficiency to take an active role to reach further out into the community to educateothersontheefficientuseofenergyandpromoteavailableDSMprograms.InvitingseniorstobeenergyambassadorsprovidesNevadaPowerwithnewoutreachcapabilitiesastheyarelikelytohavethetimetovolunteerandprovideeducationintheirexistingnetworks.LowScenarioThelowscenarioproposalmaintainsthecurrentplanatitscurrentbudgetlevelof$400,000andexistingmeasures: 1) Small Commercial Customer Education 2) Public Outreach and 3) Residential andCommercial Training and Support including the ENERGY STAR for New Home Program. Thetargetedgoalshavebeenincreasedtoreflectthesuccessoftheprogram.The newtargets werebased ontheactualresultsoverthepastthreeyears,20062008,andalsoconsideredthecurrenthousingdownturninLasVegas.HighScenarioTheproposedhighscenariowouldexpandtheResidentialandCommercialTrainingandSupporttrainingto include the new IECC 2009 standard training and the subsequent changes to the ENERGY STARrequirements. This training is important because Nevada Power anticipates continued builder resistancetothesenewstandards.Theprogram willbe expandedto incorporateanEducationTraining measure.ThisEducationTrainingmeasure has previously been conducted in Sierra Pacific Power Companys California service territory.Theprogramprovidesinstructionforteacherswhothenprovidetheenergytrainingtotheirstudents.Themeasure has proven to be very successful in California. An evaluation of this program titled, EnergyEfficiency Educational Outreach Program and Education Impact Assessment, can be is provided asTechnicalAppendixItem DSM7.Exhibit APage 31 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary201013A summary of the proposed budgets at the base, low and high levels for this program are presented inTable2.ProgramdetailsbylevelareshowninTables3a,3b,and3c.Table2:ProposedBudgetsSummaryfortheBase,LowandHighProgramScenariosLevelBudget2010 2011 2012Base $475,000 $500,000 $500,000Low $400,000 $400,000 $400,000High $600,000 $600,000 $600,000BaseScenarioNevada Power proposes an expansion of the Residential and Commercial Training and Support, and anewSeniorEnergy Ambassador measure.The expansionandaddition ofanewmeasuretothe existingprogramwillformthenewbaseforthe20102012program.ResidentialandCommercialTrainingandSupportNevada Power proposes to expand this measure to incorporate training to increase thelimited supply ofqualifiedhomeperformancecontractors.Withtheeconomicdownturnoftheconstructionofnewhomes,homerenovationscanbea large component ofresidentialconstructionandprovides many opportunitiesforimprovingtheoverallefficiencyofexistinghomes.Trained and qualified home performance contractors are needed in southern Nevada to improve theenergy efficiency of a significant number of existing homes. Many contractors are already in the homeperformance field, but lack the energy principles in relation to building design. Nevada Power plans totrain a portion of its energy education employees to be mentors. These mentors will teach and certifyothersaccordingtothecertificationrequirementsofBPIandHERS.NevadaPowerwillorganizetrainingsessionsandprovidefacilitiestoassistinminimizingtrainingcoststothecontractors.SeniorEnergyAmbassadorThe Senior Energy Ambassador (SEA) will train ten seniors each year. The initial SEA graduates willdesign an outreach program within the first month after graduation and, subsequently, along withsubsequent graduates will implement the program. By the end of the first year, the goal is to producesenior booklets on energy conservation designed by the SEAs with the information they have gatheredduringtheir"seniorstalkingtoseniors"outreach.ThesecondyearfocusesonmonitoringandevaluationformeasureenhancementaswellasfurthertrainingforSEAs.NevadaPowerwillworkwithestablishedseniorvolunteeragencies,suchasSeniorCorps,todeliverthismeasure.Thepurposeofthisprogramisto: TrainseniorstobecomeSeniorEnergyAmbassadors. HavetheSEAsdesigntoolstoengageotherseniorstobecomeenergyefficiencyadvocates.Thekeywordforthismeasureis"engage."NevadaPowerwillturninterestintoactionwhenitcomestoenergyconservationforseniorcitizens.EncouragingseniorstobeenergyambassadorsprovidesNevadaExhibit APage 32 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary201014Powerwithnewoutreachcapabilities.Thevalueofseniorstalkingtoseniorsisimmenseandshouldnotbediscounted.Seniorsareanexcellentresourceinthattheyhavethetimetoincorporatetheirexperienceand existing networks. Senior involvement in designing this plan makes good business sense and willcontribute to the success of the program. This program will also form an alliance with existing seniorinitiativesandthereforewillenhanceNevadaPowersefforts.ThebudgetandtargetsforthebasescenarioareprovidedinTable3a.Table3a:20102012BaseScenarioMeasure 2010 2011 2012TradeandHomeShows$100,00085,000Attendance54,000Impacted$100,00085,000Attendance54,000Impacted$100,00085,000Attendance54,000ImpactedSmallComCustomersEducation$150,000100Participants40Certifications$150,000100Participants40Certifications$150,000100Participants40CertificationsResandComTrainingandSupport$175,000300Educated$200,000300Educated$200,000300EducatedSeniorEnergyAmbassador$50,00010Trained(SEA)260Impacted$50,00010Trained(SEA)260Impacted$50,00010Trained(SEA)260ImpactedLowScenarioThelowscenarioproposalmaintainsthecurrentplanatitscurrentbudgetlevelof$400,000andexistingmeasures: 1) Small Commercial Customer Education 2)Public Outreach and 3)Residential andCommercial Training and Support. The targeted goals have been increased to reflect thesuccess of theprogram. The new targets are based on the actual results of the measures over the past three programyears.ThebudgetandtargetsforthelowscenarioareprovidedinTable3b.Exhibit APage 33 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary201015Table3b:20102012LowScenarioMeasure 2010 2011 2012PublicOutreach$100,00085,000Attendance54,000Impacted$100,00085,000Attendance54,000Impacted$100,00085,000Attendance54,000ImpactedSmallCommercialCustomerEducation$150,000100Participants40Certifications$150,000100Participants40Certifications$150,000100Participants40CertificationsResidentialandCommercialTrainingandSupport$150,000300Educated$150,000300Educated$150,000300EducatedHighScenarioTheproposedhighscenariowouldexpandtheResidentialandCommercialTrainingandSupportmeasureto provide training on the new IECC 2009 standards and the subsequent changes to the ENERGYSTARrequirements.Furthermore,theprogramwillbeexpandedtoincorporateanEducationTrainingmeasure.IECC2009StandardTrainingNevada Power proposes to include training that addresses the new IECC 2009 standards and thesubsequentchangestotheENERGYSTARrequirements,andbuilderresistancetothesestandards.TheENERGYSTARcertificationprogramhasresultedinsignificantenergyanddemandsavings.The2008resultsprovidedan estimated energysavings of 10,598.0MWh or2,501kWhper homeandakWdemandsavingsof9,537.6kWor2.4kWperhome.The2008resultswereimpactedbythedownturninhousingandbuilderresistancetothe IECC2006standards.TheIECChasissued newstandards(2009),which will cause ENERGY STAR to revise their standards. Nevada Power proposes to specificallydirect funding to training on the new IECC 2009 standards in order to convince builders to incorporatethesechangesintheirconstructionandparticipateintheENERGYSTARcertificationprogram.EducationTrainingThe proposed Education Training measure was very successful in Sierra Pacifics California serviceterritory. This measure provides energy efficiency training to teachers and students. The teachers areprovidedinstructiononthecoursematerialandprovidethetrainingtotheirstudents.TechnicalAppendixItem DSM7, Energy Efficiency Educational Outreach Program and Educational Impact Assessment,describestheenergyefficiencyandconservationtrainingprogramandwaspreparedbyCulver,whowastheimplementationcontractor.Exhibit APage 34 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary201016Inordertodetermine theeffectivenessofthetraining,sixteenclassesparticipatedinpreandposttesting.A total of 271 students test scores were evaluated. Based on the average pre and posttest scores, theaveragescoreincreasedfrom66%to84%foranoverallimprovementof27%.AccordingtoCulver,thisresult was consistent with results experienced in other utility school based programs and represents asignificantincreaseinthestudentsknowledgeofenergyefficiency.ThebudgetandtargetsforthehighscenarioarepresentedinTable3c.Table3c:20102012HighScenarioMeasure 2010 2011 2012PublicOutreach(formerlyTradeandHomeShows$100,00085,000Attendance54,000Impacted$100,00085,000Attendance54,000Impacted$100,00085,000Attendance54,000ImpactedSmallComCustomersEducation$150,000100Participants40Certifications$150,000100Participants40Certifications$150,000100Participants40CertificationsResandComTrainingandSupport$250,000350Educated$250,000350Educated$250,000350EducatedEducationTraining$50,0007,500Impacted$50,0007,500Impacted$50,0007,500ImpactedSeniorEnergyAmbassador$50,00010Trained(SEA)260Impacted$50,00010Trained(SEA)260Impacted$50,00010Trained(SEA)260ImpactedRationaleandSupportingDataEnergy Education continues to be a highly desired deliverable based upon energy efficiencyorientedinterestgroups.NevadaPowerbelievesthisprogramisastrongcontributortospillover,whichaccountsfor customers undertaking energy efficiency measures outside the utility programs. Education alsocontributesto markettransformation in whichcustomerawareness leadstobehavioralchangesrelatedtoenergyusage.Withoutenergyeducation,marketingcostsforotherDSMprogramswouldriseduetotheneed for each program to market both the benefit of buying, building or living efficiently in addition topromotingthedetailsofeachprogram.Exhibit APage 35 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary201017SupportingSavingsDataThere is no methodology currently available to quantify all the energy savings directly attributable toEnergyEducation&Consultation.However,Nevada Powercontinuesto explore ways ofcapturingthisdata.Identifyingthenumberofcustomersthatreceiveenergyefficiencymaterialswillallowtheutilitytoconduct surveys to determine the number of customers that took action as a result of receipt of thatinformation.Maintainingcontactwithgraduatesofthe many educationalseminarsandconferences,andparticipants in the Nevada FOCUS Program proves essential in determining if customers respondpositivelytothe materialsprovidedand whatimprovementscanbe madeto evokefurtheractiontowardenergy efficiency. The data received as a result of the survey conducted by the instructors for NevadaFOCUS northern Nevada indicates approximately 1 million kWh savings is attributable to projectsgenerated by graduates. These savings are a testimony to the effectiveness of the education program.ENERGY STAR Homes also estimate a significant savings of over 2,500 kWh per home. NevadaPower will continue to investigate methodologies for capturing and quantifying energy savingsattributabletoEnergyEducation&ConsultationandreportthosefindingsinfutureDSMreports.Tables4a,4b,and4cprovideabreakout ofthebudgetbycategoryforthebase,low,and highscenariosoftheprogram.Table4a:BaseLevel ProgramBudgetbyCategory,ProgramYears20102012ProgramYear 2010 2011 2012Marketing,AdvertisingandTechDemo$158,230 $158,230 $145,230ImplementationContractor $195,645 $199,645 $207,645Rebates $0 $0 $0MeasurementandVerification $16,625 $20,625 $20,625CustomerResearch $9,500 $11,500 $11,500UtilityLaborandOverheads $95,000 $110,000 $115,000TotalProgram Cost $475,000 $500,000 $500,000Exhibit APage 36 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary201018Table4b:LowLevel ProgramBudgetbyCategory,ProgramYears20102012ProgramYear 2010 2011 2012Marketing,AdvertisingandTechDemo$93,000 $93,000 $93,000ImplementationContractor $170,000 $170,000 $170,000Rebates $0 $0 $0MeasurementandVerification $14,000 $14,000 $14,000CustomerResearch $8,000 $8,000 $8,000UtilityLaborandOverheads $115,000 $115,000 $115,000TotalProgramCost $400,000 $400,000 $400,000Table4c:HighLevel ProgramBudgetbyCategory,ProgramYears20102012ProgramYear 2010 2011 2012Marketing,AdvertisingandTechDemo$184,500 $163,500 $137,500ImplementationContractor $262,500 $262,500 $252,500Rebates $0 $0 $0MeasurementandVerification $21,000 $28,500 $36,000CustomerResearch $12,000 $18,000 $24,000UtilityLaborandOverheads $120,000 $127,500 $150,000TotalProgramCost $600,000 $600,000 $600,00020102012ProgramExecutionThe implementation process consists of continually identifying the most costeffective opportunities toinfluencecustomers inall marketsand designingcommunication, education collateral,presentationsandtoolsthatarebothcustomerfriendlyandproveneffectiveinmovingcustomerstoaction.The specific actions identified below concern the low scenario, which is the current base program.Subject to Commission approval of the expanded base plan, the execution of the new measures will beconsistentwiththedescriptionsprovidedearlier.ResidentialandCommercialTrainingandSupportExhibit APage 37 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary201019ThismeasureseeksbuildersupportforNevadaPowerseffortsinenergyeducationforhomeconstructionabove minimum energystandardsandutilizingthatsupportin variouscommunicationtoolstopositivelyinfluencebuilderswhoarenotcurrentlyparticipating.This measure will also continue to participate with builder organizations at trade shows and buildershowcases to illustrate the benefits of how energy efficient construction practices will result in greaterawarenessofandcompliancewiththosestandards.PublicOutreach(formerlyTrade&HomeShowSupport)A continued review will be made of the various opportunities to interact with customers and selectivelyparticipate in the most promising of those events where the energy efficiency and conservation messagewillbepositivelyreceived.NevadaPowerwillcontinuetotestwaysofincreasingcustomerparticipationinNevadaPowersdisplaysat various public events including home and trade shows. Further, Nevada Power will work to engagecustomers in direct conversation and assure that customers are introduced to and take the various piecesofliteratureavailableinthebagsprovidedattheevent.Small CommercialCustomerEducationNevadaPower will continueto work withMAPNVtoassurethatthe course hasan increasing emphasison and attention to energy efficiency. Nevada Power will determine the course schedule based on theneedsoffacilitymanagersandbuildingoperators.Nevada Power will continue to capture participant evaluations and attempt to quantify the savings fromenergyefficiencyprogramsundertakenasaresultofoperatorparticipationinNevadaFOCUS.20102012ProgramManagementPlanThe delivery of the Energy Education and Consultation Program will be managed by Nevada PowersprogrammanagertoassuremaximumcustomerimpactandcompliancewiththestipulationapprovedbytheCommissionsorderinDocket0608020.One measure that is managed differently from all others is the Small Commercial Customer Educationmeasure which is managed by MAPNV (Manufacturing Assistance Program of Nevada). Sierra consultswith MAPNV on the course selection and the energy efficiency information that is included within thecourseselections.MAPNVthenreportstoNevadaPowersprogrammanager.20102012DataDeliveryandTrackingDataforeachmeasureismaintainedinEXCELspreadsheetsthatonceverifiedandvalidatedaretheninputintotheDataStore.Eachprogrammanagerisresponsibleforcollectingtherequireddatapoints.The Residential and Commercial Training and Support measure data will be maintained by the programmanagerandthatmanagerwillupdatetheDataStoreonamonthlybasisregarding:o Thenumberofbuilderand/orcontractorpresentations.o Thenumberofattendeesateachpresentation.o The number and type of builder/contractor communications and the reach of thosecommunications.o ThenumberofENERGYSTARHomescertified.Exhibit APage 38 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary201020The Public Outreach (formerly Trade and Home Show Support) measure data (in compliance with thestipulation approved by the Commissions order in Docket 0608020) will be collected by the programmanager.ThefollowingdatapointswillberecordedonamonthlybasiswithintheDataStore:o ThenumberofActualCustomerContactscapturedinthefollowingcategories: Thenumberofcustomersattendingaclassorpresentation. The number of customers visiting a public event and receiving a bag of energyefficiencyinformationandreportingthenumberofbagsreceivedatapubliceventandacustomerpresentationsseparately. Thetotaleventattendanceforeachreportedevent.TheSmallCommercialCustomerEducationmeasuredatawillinclude:o DatareportedbyMAPNVrepresentativestoNevadaPowersprogrammanagerfollowingconclusionofeachclass.Sierrawillverifythisdata. Thenumberof participantsenrolledineachclass. Thenumberofgraduatesineachclass. The number of graduates of the entire portfolio of twelve classes required tograduateandreceivecertification.o NevadaPowerwillalsosurveyparticipantsinorderto: Create a report on each energy efficiency project undertaken as a result ofparticipation along with the actual/projected energy and capacity savingsattributabletothoseprojects. Data collection and an evaluation of project participation satisfaction will becompletedbyNevadaPoweronanannualbasisattheendoftheprogramyear.M&VDataStoreTheNevadaDSMM&VDataStoreisawebportalbasedprogramthathasbeencustomizedforNevadaPower Companys internal use. Its function is to track Demand Side Management (DSM) Programperformance. Nevada Power uses this management and tracking tool throughout the year to ensure thattheplannedinvestmentsprovideclearvalue.TheDataStorealsosupportsthe evaluation, measurement,and verification activities by providing the data needed for sample selection and verification of savingsdata.M&VPlanEM&VObjectiveThe EM&V Contractor will evaluate the education measures. The evaluation plans address the marketand process issues for the Energy Education and Consultation Program. The evaluation will embed asmuch datacollection intotheprogramprocessaspossibletoprovideongoingfeedbacktotheprogramsaswellasestablishingabaselineforfurtherevaluation.Inafewcaseswhereparticipantsareidentifiable,theEM&VContractorwillrecommendsomeretrospectiveevaluation.The evaluation plans focus less on how the training is delivered and satisfaction with it and more onbehaviorsoranticipatedbehaviorsthataregeneratedinresponseto education events.Thisallowssomeassessment ofthe effectiveness of educational effortthatcanhelpto decidehowtoimprovethe existingExhibit APage 39 of 432NevadaPowerCompanyEnergyEducationandConsultationJanuary201021education programs and where to put education resources in the future. If it can be demonstrated thateducationcauseschangesinrelevantenergybehaviors,theEM&VContractorcanreasonablyassumethattherewillbesomelevelofsavings.ApproachTheEM&VContractorwill developaseriesof8X5 cardsurveysfor differenttypesofsettings/events,for example, trade and home shows, nonenergy events such as fairs and community events, and publicpresentationsatplacessuchasserviceclubsandothervenues.Thesecardsurveysaredesignedtotakenomore than 2 5 minutes and would be administered at random at largeevents and to populations at theconclusion of presentations at smaller events. At large events a third party would stop attendees atrandom ask them to fill the survey and provide the survey with clipboard and pen. At small events,presenters would be asked to distribute the survey cards so that they are available after the presentation.Alternative versions ofthecardsurveys canbeusedto keepthesurveysshortwhile obtainingabroaderrangeofinformation.SampleSelectionTheEM&VContractorwillconductarandomsampleforeachEnergyEducationprogram. Thesamplesizeswillbedeterminedasnecessarytoreachconfidence intervalsonthesesamplesof9010.SurveysandVerificationsThe EM&V Contractor will conduct interviews with key players. This will include Nevada PowerEnergyEducationstaffandotherswhoserveaseducatorsatevents.Thepurposeoftheseinterviewswillbe to secure more indepth information about procedures, methods, and educational content. It isimportant to obtain the content of the displays, sample materials that are include in the giveaway bags,andslidesandhandoutsthatmaybeusedinconjunctionwithpresentations.Thediscussionswillincludeanticipated changes to the content, presentation formats, and operation of the program. The interviewswill also cover the types of events, the typical participants, and the typical responses to displays,presentationsandgiveaways.The EM&V Contractor will review the visuals, information and handout materials as well as theinformation from the interviews. These will be associated with particular types of events. This reviewwillbeusedasinputtothesurveys.TheEM&VContractorwillalsopreparepackets ofsurveysforthepresenterto carryanduseatsmallerevents. The packets will include copies of the survey, pens, and other items needed to complete thesurveys. Presenters will be asked to recruit someone from the host organization to assist with thedistributionandcollection.Thesurveys willbeplaced incloseproximitytotherespondents.At eventswererespondentsaresittingattables,theywillbeplacedontablespriortothestartoftheevent.Atothereventstheywillbedistributedwiththegiveawaybags.Thehostwillcollectthesurveysaspeopleleavetheevent.SectionD:ProgramEconomicEvaluationCostBenefitAnalysisTheEnergyEducationandConsultationProgramdoesnotresultineasilyquantifiablesavings,thereforenocostbenefitanalysiscanbecompletedforthisprogram. However,theprogramdoesplayacontributingroleinachievingthesavingsacrosstheentireDSMportfolioasdescribedinprevioussectionsofthisprogramdatasheet.Exhibit APage 40 of 432Exhibit APage 41 of 432NevadaPowerCompanyLowIncomeWeatherizationProgramJanuary20101NevadaPowerCompanyProgramDataSheetLowIncomeWeatherizationProgramJanuary2010Exhibit APage 42 of 432Exhibit APage 43 of 432NevadaPowerCompanyLowIncomeWeatherizationProgramJanuary20102TableofContentsProgramSummary ......................................................................................................................4SectionA:2008ProgramResults..................................................................................................42008Analysis........................................................................................................................5LowIncomeWeatherization ....................................................................................................5ConclusionsandRecommendations ..........................................................................................6SectionB:2009Program..............................................................................................................62009ProgramExecution.........................................................................................................72009ResultstoDate ...............................................................................................................7SectionC:Proposed20102012Program......................................................................................8LowIncomeWeatherizationforSingleandMultiFamilyResidentialCustomers .........................10RationaleandSupportingData ...............................................................................................10SupportingSavingsData.......................................................................................................1020102012ProgramImplementationPlan ................................................................................1120102012ProgramManagementPlan....................................................................................11M&VPlan ...........................................................................................................................11M&VDataStore ..................................................................................................................13SectionD:ProgramEconomicEvaluation ..................................................................................13CostBenefitAnalysis............................................................................................................13Freeridership........................................................................................................................14InputData,DescriptionofSources,andResultsofFinancialAnalysis........................................14InterpretationofResults........................................................................................................15SectionE:SupportingDocumentation .......................................................................................16ListofTablesTable1:2008ProgramYearResults........................................................................................................................................ 5Table2:TargetsandBudgets,ProgramYear2009................................................................................................................... 6Table3a:Budgets,ProgramYears20102012.......................................................................................................................... 8Table3b:Targets,ProgramYears20102012........................................................................................................................... 9Table4a:BaseScenarioProposedTargetsandBudgets,ProgramYears20102012.................................................................. 9Table4b:LowScenarioProposedTargetsandBudgets,ProgramYears20102012 .................................................................. 9Table4c:HighScenarioProposedTargetsandBudgets,ProgramYears20102012.................................................................. 9Table5a:BaseScenario ProgramBudgetbyCategory,ProgramYears20102012 .................................................................10Table5b:LowScenario ProgramBudgetbyCategory,ProgramYears20102012..................................................................11Table5c:HighScenario ProgramBudgetbyCategory,ProgramYears20102012 .................................................................11Table6a:BaseScenarioCostResults20102012 ....................................................................................................................14Table6b:LowScenarioCostResults20102012.....................................................................................................................14Table6c:HighScenarioCostResults20102012....................................................................................................................14Table7a:BaseScenarioUtilityEconomicEvaluation .............................................................................................................15Table7b:LowScenarioUtilityEconomicEvaluation .............................................................................................................15Table7c:HighScenarioUtilityEconomicEvaluation..............................................................................................................15ListofFiguresNoneExhibit APage 44 of 432NevadaPowerCompanyLowIncomeWeatherizationProgramJanuary20103Exhibit APage 45 of 432NevadaPowerCompanyLowIncomeWeatherizationProgramJanuary20104Date: January2010ProgramName: LowIncomeWeatherization ProgramProgramStatus: Continued/ExpandedProgramManager: ToBeDeterminedPrimaryContractor(s): Honeywell2009Budget: $2,880,000Proposed Budget:2010:2011:2012:Low$2,400,000$2,400,000$2,400,000Base$3,000,000$3,000,000$3,000,000High$3,750,000$3,750,000$3,750,000TRCB/CRatios: Low0.86Base0.86High0.86ProgramSummaryNevada Powers Low Income Weatherization Program facilitates the installation of energy efficiencymeasures in singlefamily and multifamily homes of residential customers in the most need, those withincomesbetween150percentofthe federal povertylevel and80percentofcountymedianincome.The programs objective is to provide weatherization improvements to homes and apartments to makethemmoreenergyefficient.Thisproposedprogramforthe20102012actionplan periodissimilartothatproposedandapprovedbythe Commission in the Nevada Power 2006 Integrated Resource Plan where the company proposedutilizing an outsourced contractor to implement the program. The outsourced delivery of the programresulted in a significant improvement in the performance of the program in terms of energy savingsachievedperdollarinvested.TheproposedLowIncomeWeatherizationProgrambudgetisamodestexpansionwhencomparedtotheapprovedLowIncomeWeatherization Program of2006IntegratedResourcePlan.SectionA:2008ProgramResultsInordertoincreasethereachofitsLowIncomeWeatherizationProgram,NevadaPowerproposed inits2006Integrated Resource Plan, Docket No. 0606051, to outsource a portion of this program. The CommissionapprovedthischangetotheLowIncomeWeatherizationProgram, butdirectedNevadaPowertocoordinatewiththe Division of Housing. This ensuredthat outsourcing would serve to complement the efforts of the existingprogram provider and maximize the level of low income customer participation. This program also providedweatherizationassistanceto customerswithincomesabove150percentofpovertyguidelinesandbelow80percentofthecountymedianincomelivinginsinglefamily,multifamily,andmobilehomes.Exhibit APage 46 of 432NevadaPowerCompanyLowIncomeWeatherizationProgramJanuary20105This programalsoprovidesenergyeducationtocustomerswhoreceiveweatherizationassistance.Theeducationisprovidedonsiteatthetimetheweatherizationcrewisatthehometoprovidetheweatherizationimprovements.Educationalmaterialsareprovidedtothecustomerandeachmeasurebeinginstalledisfullyexplainedbytheonsiteauditor.A total of 681 homes received services in 2008 under theNevada Power LowIncome Program. Thesehomes include 278 singlefamily homes, 61 mobile homes, and 342 multifamily homes. Themeasurement and verification (M&V) analysis indicates that the program provided annual energysavings totaling 1,463,601 kWh. Peak energy savings totaled 485,204 kWh per year. Critical peakdemandsavingstotaled 563kWperyear.There is an additional impact to natural gas consumption for homes that utilize natural gas for househeating and/or water heating. Therefore, measures such as water heater blankets and low flowshowerheads, weather stripping and other shell improvements provided natural gas savings for thosecustomerswithgaswaterheaters.Verifiednaturalgassavingstotaled8,678thermsperyear.The 2008 program was delivered by an outsourced contractor and a subgrantee. Weatherizationimprovements installed included additional insulation, weatherstripping of doors and windows,fluorescentlighting,windows,refrigerators,sunscreens,thermostatsandwaterheaterblankets.Table1:2008ProgramYearResultsTotalProgram Target Actual VarianceBudget,TotalProgram$2,200,000 $1,517,046 69.0%No.ofInstalledMeasures940 681 72.4%DemandSavings(kW)487.7 563 115.4%EnergySavings(kWh)2,273,757 1,463,601 64.4%TRC0.92 0.54 58.7%2008AnalysisLowIncomeWeatherizationA total of 408 homes received services in 2008 under the outsourced weatherization measure. Thesehomes include 229 singlefamily homes, 31 mobile homes, and 148 multifamily homes. The M&Vanalysisindicatesthatthisprogramprovidedannual energysavingstotaling1,112,343kWh.Criticalonpeakdemandsavingstotaled378kWperyear.The outsourced weatherization measure utilized 88 percent of the approved budget and achieved 74percentoftheenergyanddemandtargetsrespectively. Inthe singleandmultifamilyprogramfor2008atotal of 408 units received weatherization measures. This increase of customers served through theimplementation of the 2008 Low Income Weatherization Program was an improvement over the 2007Exhibit APage 47 of 432NevadaPowerCompanyLowIncomeWeatherizationProgramJanuary20106program year activity of 371 units. The increased number of housing units served in the 2008 programyearisdueinalargeparttoimprovingthecustomer outreachandgettingthenew namefortheprogramknownbyourcustomersA total of 273 homes or 144% of the targeted goal received services in 2008 under the Low IncomeSubgrantee Weatherization measure. These homes included 49 singlefamily homes, 30 mobile homes,and 194 multifamily homes. The M&V analysis indicates that this measure provided annual energysavingsof351,258kWhor73.9%ofthetargetedgoalandacriticalpeakdemandreductionof184.7kWperyear.TheLowIncome AirConditioningReplacement measure wasdiscontinuedin2008duetothepoorcostbenefitresultsthatwereexperiencedin2007.ConclusionsandRecommendationsThis program should be continued and modestly expanded to allow the installation of more energyefficientmeasuresforthosecustomersmostinneedofenergyefficiencyassistance.In2009,theprogramwillprovidefortheinstallationofmoreatticinsulationto furtherdecreasethe airconditioningcostforthelowincome homeowner.The expandedairconditioningtuneup measureto maketheunitsoperate moreefficiently.Aductsealingprogramwillbeinitiatedtoprovideadditionalenergysavings. Theadditionalmeasures will allow for more kWh savings to be realized and more customers will be served with theproposedbudgetincrease.ThelowincomecustomersinSouthernNevadahavebeenidentifiedbytheStateof Nevada Housing Division to exceed 300,000. The contractors marketing plan has been successful inidentifying participants for the program Through August of 2009 the implementation contractor hasinstalled energy savings measures totaling 1,678,592 kWh or 57 percent of the annual goal utilizing 59percentoftheprogram budget.Ananalysisofthismeasurefor2007determinedthattheachievedTotalResourceCost(TRC)for2007is1.11.TheTRCforthe2008programusingthe2008M&Vreportis0.54. Additionaldetailregardingtheperformance of this program is included in Section D,the 2009 Annual DSM Update Report,provided asExhibitB.SectionB:2009ProgramPursuanttotheparagraph42oftheCommissionsOrderforNevadaPowers2007AnnualDemandSideManagement Update Report (Docket No. 0708016), Nevada Power discontinued the State ProjectSupportWeatherization Subgranteemeasure in 2009.Table2:TargetsandBudgets,ProgramYear2009TotalWeatherizationProgram 2009Budget,TotalProgram $2,880,000No.ofInstalledMeasures 1,000Demand Savings(kW) 555EnergySavings(kWh) 2,960,634Exhibit APage 48 of 432NevadaPowerCompanyLowIncomeWeatherizationProgramJanuary201072009ProgramExecutionThe 2009 program year will be the first year that the program will be delivered exclusively by theimplementation contractor. In program years 2005 to 2008 the program was split between theimplementationcontractorandthesubgranteestothe NevadaStateHousingDivision. Startingin2009,aCOdetectorisinstalledineverygasheatedhome.2009ResultstoDateWiththe expanded2009budgetitisanticipatedthatthisprogramwillachieveimprovedperformanceandwill exceed the 2008 results. For the first eight months of the 2009 program year, the estimated kWhsavings achieved by weatherization improvements is 1,678,592 kWh. The contractor has obtained andtrainedadditionalpersonneltomeettheexpandedprogramascomparedto2008.Exhibit APage 49 of 432NevadaPowerCompanyLowIncomeWeatherizationProgramJanuary20108SectionC:Proposed20102012ProgramNevada Power recommends that the 2010 budget for the Low Income Weatherization Program be set attheexpandedlevelat$2,900,000andanadditional$100,000toconductacommunitypilotweatherizationprogramwiththeNevadaHousingDivisionasrecommendedbytheDSMCollaborativemembers.The proposed program for the 20102012 action plan period will continue the current outsourcedapproach being implemented in 2009 along with the addition of a community pilot project to beimplementedandfundedjointly withtheNevadaHousingDivision. Thisoutsourcedprogramwillprovideweatherizationassistanceto customerswithincomesabove150percentofpovertyguidelinesandbelow80percent of the county median income living in singlefamily, multifamily, and mobile homes. Theincome guidelines for the community pilot match the Housing Divisions Federal Poverty Low Incomeguidelines. These measureswillprovide energyeducationtocustomerswhoreceiveweatherizationassistance.Theeducationisprovidedonsiteatthetimetheweatherizationcrewisatthehometoprovidetheweatherizationimprovements. Educational materials are provided to the customer and each measure being installed is fullyexplainedbytheon siteauditor.HealthandSafetyMeasuresthatareprovidedwitheachweatherizationincludeacombustiongastest,COtestofthepremises,smokedetectorsandablowerdoortest.The goal of the community pilot project is to explore an alternative mode of service delivery in which theHousingDivisionaddresseshealthandsafetyissuesandtheUtilityaddressesenergyefficiencyissues.Theintentis to improve the cost effectiveness for the DSM contribution such that it consistently enjoys a positive costsbenefit.ThefundsprovidedbyNevadaPowerwillbefocusedoncosteffectiveenergyefficientmeasuresandthefundsfromtheHousingDivisionwillbedirectedat healthandsafetymeasures.Anoverviewoftheproposedbudgetsandtargetsatthebase,lowandhighscenariosforthisprogramarepresentedinTable3aandTable3b.ProgramtargetdetailsbyscenarioareprovidedinTables4a,4b,and4c.Table3a: Budgets,ProgramYears20102012ScenarioBudgetTRC 2010 2011 2012Base$3,000,000 $3,000,000 $3,000,000 0.86Low$2,400,000 $2,400,000 $2,400,000 0.86High$3,750,000 $3,750,000 $3,750,000 0.86Exhibit APage 50 of 432NevadaPowerCompanyLowIncomeWeatherizationProgramJanuary20109Table3b:Targets,ProgramYears20102012ScenarioAnnualEnergySavings(kWh) AnnualDemandSavings(kW)2010 2011 2012 2010 2011 2012Base3,156,551 3,156,551 2,108,988 895 895 598Low2,525,241 2,525,241 1,687,262 716 716 478High3,945,689 3,945,689 2,636,147 1,119 1,119 747Theproposedbudgetbreakdownforbase,lowandhighscenariosareprovidedinTables4a, 4b,and4c.Table4a:BaseScenarioProposedTargetsandBudgets,ProgramYears20102012TotalProgram BaseScenario 2010 2011 2012Budget,TotalProgram$3,000,000 $3,000,000 $3,000,000No.ofInstalledMeasures2,332 2,332 2,909DemandSavings(kW)895 895 598EnergySavings(KWh)3,156,551 3,156,551 2,108,988Table4b:LowScenarioProposedTargetsandBudgets,ProgramYears20102012TotalProgram LowScenario 2010 2011 2012Budget,TotalProgram$2,400,000 $2,400,000 $2,400,000No.ofInstalledMeasures1,866 1,866 2,327DemandSavings(kW)716 716 478EnergySavings(kWh)2,525,241 2,525,241 1,687,262Table4c: High ScenarioProposedTargetsandBudgets,ProgramYears20102012TotalProgram HighScenario 2010 2011 2012Budget,TotalProgram$3,750,000 $3,750,000 $3,750,000No.ofInstalledMeasures2,915 2,915 3,636DemandSavings(kW) 1,119 1,119 747EnergySavings(kWh)3,945,689 3,945,689 2,636,147Exhibit APage 51 of 432NevadaPowerCompanyLowIncomeWeatherizationProgramJanuary201010LowIncomeWeatherizationforSingleandMultiFamilyResidentialCustomersThis Low Income Weatherization Program provides weatherization improvements to make homes andapartments more energy efficient for customers with incomes between 150 percent of poverty and 80percent of county median income. The customers that fall into this income category cannot receiveweatherization improvements by the Nevada Housing Division since their annual income exceeds theguidelines for the weatherization program funded by the UEC Funds and federally distributed fundsadministrated by the Nevada Housing Division. Weatherization measures include insulation,refrigerators, ceiling fans, solar screens, compact fluorescent lamps, programmable thermostats, airinfiltration,windows,waterheaterblankets,totalbuildingsolutions,andothermeasures.Measurestobeinstalledarebasedonneedateachlocationandareprovidedatnocosttothecustomer.RationaleandSupportingDataAlthough the Low Income Weatherization Program has struggled with meeting targets in the past, theoutsourced mode of delivery has demonstrated improved overall program performance and while theperformance in 2008 was not quite that demonstrated in 2007 this mode of delivery has demonstratedsolidsuccessintermsofimprovedprogramperformance.Themeasuredbenefitsofthisprogramcoupledwiththesocietalbenefitsthataresodifficulttoquantifymakethisavaluableprogramtothelowincomecustomersandthecommunity.SupportingSavingsDataThe estimated energy savings for the 20102012 action plan period were calculated using the energysavings per dollar as experienced in 2008. The demand savings was calculated within the PortfolioPromodel.Nevada Power has also incorporated the gas benefits of 21 therms/customer gas savings based on 2008M&Vresultsin performing thecosteffectivenessanalysisforthisprogram.Theprogrambudgetbreakoutforthebase,lowandhighscenariosarepresentedinTables5a,5b,and5c.Table5a:BaseScenarioProgramBudgetbyCategory,ProgramYears20102012Program Year 2010 2011 2012ImplementationContractor$2,608,696 $2,608,696 $2,608,696MeasurementandVerification$130,435 $130,435 $130,435UtilityLaborandOverheads$260,869 $260,869 $260,869TotalProgram Cost$3,000,000 $3,000,000 $3,000,000Exhibit APage 52 of 432NevadaPowerCompanyLowIncomeWeatherizationProgramJanuary201011Table5b:LowScenarioProgramBudgetbyCategory,ProgramYears20102012Program Year 2010 2011 2012ImplementationContractor$2,086,956 $2,086,956 $2,086,956MeasurementandVerification$104,349 $104,349 $104,349UtilityLaborand Overheads$208,696 $208,696 $208,696TotalProgram Cost$2,400,000 $2,400,000 $2,400,000Table5c:HighScenarioProgramBudgetbyCategory,ProgramYears20102012Program Year 2010 2011 2012ImplementationContractor$3,260,869 $3,260,869 $3,260,869MeasurementandVerification$163,044 $163,044 $163,044UtilityLaborandOverheads$326,087 $326,087 $326,087TotalProgram Cost$3,750,000 $3,750,000 $3,750,00020102012ProgramImplementationPlanThe implementationprocess willbethesameasthecurrentprocess withtheutilizationofanoutsourcedcontractor to implement the installation of energy efficient weatherization measures. The implementingcontractorwillberesponsible foridentifyingparticipants.Theimplementationcontractorwillconductasurvey of each home and follow with the installation of weatherization measures that were identifiedduringthesurvey.20102012ProgramManagementPlanNevada Powersprogrammanager will work collaboratively with the outsourced contractorto ensure thatthe programisachievingitsgoalsandtoaddressanypotentialconcerns.M&VPlanM&VObjectiveThe evaluation, measurement and verification (EM&V) Contractor will perform activities toconfirm the savings being realized through the Low Income Weatherization Program that NevadaPowerisimplementinginSouthernNevada.ApproachTheEM&VapproachtodeterminethegrosssavingsassociatedwithparticularmeasuresinstalledthroughtheLowIncomeWeatherizationProgramhasseveralaspects.Exhibit APage 53 of 432NevadaPowerCompanyLowIncomeWeatherizationProgramJanuary201012 Thefirstaspectoftheanalysisisanexploratorydataanalysisthatmakesuseofbillingdataforallprogram participants. This analysis is directed at identifying major gross changes in electricityusethatcanbeattributedtomeasuresinstalledforlowincomehouseholds. The second aspect of the statistical analysis, generally multiple regression analysis, involvesusing longitudinal and crosssectional comparisons of energy consumption before and afterinstallation of energy efficiency measures to determine how electricity use changed after ameasurewasinstalled. The third aspect of the analysis is to incorporate engineering estimates of energy use into thebilling analysis. This stage of the analysis requires independent, engineeringbased estimates ofenergyuseandsavingsassociatedwithparticularconservationmeasures.TheEM&VContractorwill develop these independent, engineeringbased estimates of savings through engineeringcalculationsorthroughsimulationswiththeirenergyanalysismodels.By using these three types of analysis, the EM&V contractor can triangulate the estimates of grosssavingsattributabletomeasuresinstalledinthehousesoflowincomecustomers.SampleSelectionThe EM&V Contractor will use monthly observations. The model has several observations on eachparticipant house. This has three significant benefits. First, the precision associated with these models ishigh. Second, the model can givesignificant results even if a small number of houses are in the model.Thislatterfeatureisimportantforthisprogramwheretheremaynotbesufficientparticipantstomeetthetargetsamplesize,particularlyforsomeindividualmeasures.TheEM&VContractorwilluse dataforallparticipantsinthebillinganalysisregressions,buttheactualsample sizes will depend on the quality of the billing data. The advantage of billing analysis that usesexisting data is that marginal costs associated with larger samples are negligible relative to the effortrequiredtoconductotheraspectsoftheanalysisforexample,datacleaningroutines,modelspecification,andinterpretationofresults.Additionally, a sample will be selected for onsite verification of measure installation. Programparticipants will accumulate over time as the program is implemented. For this reason, a systematicsampling approach will be used to select sample sites as program implementation proceeds. Sampleselectionisspreadovertheentireimplementationperiod.ThesampledesigntheEM&VContractorwilluse for selecting program projects allows estimates of savings to be determined with 10% precision atthe90%confidencelevelfortheprogram.M&VAnalysisMethodsThe EM&V Contractor will use degreehours instead of degreedays to provide a more representativemeasureoftheeffectsofweatherconditions.Dependingontheirenergyefficiencycharacteristicsandthemagnitudesoftheirsolarandinternalheatgains,buildingsdifferinthetemperaturesatwhichtheybeginto require heating or cooling. The degree hours used for a house are calculated to match the periods oftimecoveredinthebillingrecords.The EM&V Contractor will use a fixedeffects specification for the panel model. That is, when thedata are pooled across customers, the EM&V Contractor will apply a least squares dummy variable(LSDV)covariance estimateprocedure.Inthisapproach,abinarydummy variable iscreatedforeachcustomer in the sample, and the full set of these dummy variables is included in the regression analysis.Exhibit APage 54 of 432NevadaPowerCompanyLowIncomeWeatherizationProgramJanuary201013This covariance approach has the advantage of bringing all of the sample information together in aconsistentmannerforestimationpurposes.Thereareseveralsignificantadvantagestousingthisfixedeffectspanelmodel: The panel model does not require a fixed participation window. Rather, each house essentiallyhasitsown,unique,participationwindow. By using monthly observations, the model has several observations on each participant house.This has three significant benefits. First, the precision associated with these models is generallyhigh. Second, the model can give significant results even if a small number of houses are in themodel. This latter feature is important for this program where there may not be sufficientparticipantstomeetthetargetsamplesize,particularlyforsomeindividualmeasures.The EM&V Contractor will use standard statistical tests and regression diagnostics to evaluate theperformance of the models and will screen each model for implausible results. The statistical tests anddiagnostics include evaluating the tstatistics for estimated coefficients and the R2 for equation fit andexaminingresidualsfromthefittedmodels.TheEM&VContractorwillusetheresultsofthestatisticaltestinganddiagnosticscreeningtoselectthemodelthatbestexplainsthedata. Theresultsfromthemodelprovidingthebest"fit"willbeusedintheanalysisofelectricity andnaturalgassavings.The second aspect of the EM&V Contractors analysis of savings will use engineering analysis with anenergysimulationmodeltodevelopalternativeestimatesofheatingandcoolingenergyuseandofenergysavingsfrominstalledmeasuresforasampleofparticipantdwellings.The third aspect of the M&V analysis for the Low Income Weatherization Program combines theregressionanalysisofbillingdatawiththeengineeringestimatesofenergyused.Themodelspecificationusedfor this regression analysis is sometimes referred to as a statistically adjusted engineering (SAE)model. This consists of using explanatory variables in the regression model specification that are basedonengineeringorthermalloadsimulations.M&VDataStoreTheNevadaDSMM&VDataStoreWebPortal,referredtoasDataStore,isa webportalthat hasbeencustomizedforNevadaPowersinternaluse.Itsfunction istotrackDemandSideManagementprogramperformance. The Data Store supports the evaluation, measurement, and verification activities byproviding the data needed for sample selection and verification of savings data. The Data Store ispopulatedwithdataprovidedby theimplementationcontractoronamonthlybasis.SectionD:ProgramEconomicEvaluationCostBenefitAnalysisTheLowIncomeWeatherizationProgramisdesignedtofacilitatetheimplementationofenergyefficientmeasures in the homes of low income residential customers at no cost to the customer. The programincludessinglefamily,multifamily,andmanufacturedormobilehousing.Exhibit APage 55 of 432NevadaPowerCompanyLowIncomeWeatherizationProgramJanuary201014FreeridershipThe Commission order in Docket No. 0608020, refer to stipulation, paragraph 4, the order stated thatfreeridership or spillover do not need to be considered in the financial analysis of the lowincomeprograms.NettoGrossRatioof100%hasbeenusedintheeconomicevaluationofthisprogram.InputData,DescriptionofSources,andResultsofFinancialAnalysisA copy of the input data sheet and financial model are provided as Technical Appendix Item DSM2.Thesefigureswereallcalculatedbasedupontheinformationcontainedinthisprogramdatasheetandthematerialsreferencedherein.Thefollowingtablessummarizetheresultsofthefinancialanalysis.Table6a:BaseScenarioCostResults20102012CostTest B/C Benefits(NPV) Costs(NPV) NetBenefits CCE$/kWhTotalResource0.86 $7,659,909 $8,908,751 ($1,248,842) $0.09Utility 0.94 $7,831,708 $8,307,491 ($475,782) $0.09Participant N/A $8,677,234 $0 $8,677,234 $0.00Ratepayer 0.37 $6,718,952 $18,097,481 ($11,378,529) $0.19Societalcost 0.96 $8,511,080 $8,908,751 ($397,672) $0.09Table6b:LowScenarioCostResults20102012CostTest B/C Benefits(NPV) Costs(NPV) NetBenefits CCE$/kWhTotalResource0.86 $6,124,522 $7,123,448 ($998,926) $0.09Utility 0.94 $6,263,370 $6,642,383 ($379,014) $0.09Participant N/A $6,939,022 $0 $6,939,022 $0.00Ratepayer 0.37 $5,373,058 $14,471,718 ($9,098,660) $0.19Societalcost 0.96 $6,805,188 $7,123,448 ($318,260) $0.09Table6c:HighScenarioCostResults20102012CostTest B/C Benefits(NPV) Costs(NPV) NetBenefits CCE$/kWhTotalResource0.86 $9,574,986 $11,136,118 ($1,561,131) $0.09Utility 0.94 $9,789,741 $10,384,521 ($594,781) $0.09Participant N/A $10,846,642 $0 $10,846,642 $0.00Ratepayer 0.39 $8,398,756 $22,622,148 ($14,223,391) $0.19Societalcost 0.96 $10,638,960 $11,136,118 ($497,158) $0.09Exhibit APage 56 of 432NevadaPowerCompanyLowIncomeWeatherizationProgramJanuary201015Table7a:BaseScenarioUtilityEconomicEvaluationUtilityResults FirstYear TotalProgramTotalCosts $2,999,966 $8,999,937EnergySavings(kWh) 3,346,265 93,874,926EnergyBenefits($) $140,790 $6,436,679CostofConservedEnergyN/A$0.09CriticalPeakDemandSavingsKW 949 N/ATable7b:LowScenarioUtilityEconomicEvaluationUtilityResults FirstYear TotalProgramTotalCosts $2,400,213 $7,195,622EnergySavings(kWh) 2,677,184 75,068,680EnergyBenefits($) $112,638 $5,147,110CostofConservedEnergyN/A$0.09CriticalPeakDemandSavingsKW 759 N/ATable7c:HighScenarioUtilityEconomicEvaluationUtilityResults FirstYear TotalProgramTotalCosts $3,750,064 $11,250,079EnergySavings(kWh) 4,182,853 117,344,735EnergyBenefits($) $175,988 $8,045,922CostofConservedEnergyN/A$0.09CriticalPeakDemandSavingsKW 1,186 N/AInterpretationofResultsThe Total Resource Cost (TRC) Test is the ratio of the discounted total benefits of a program to thediscountedtotalcostsoverthelifeoftheinstalledunits.TheTRCratiosbyscenarioare: BaseScenario=0.86 LowScenario=0.86 HighScenario=0.86Itisnotedthatthecostofconservedenergy byscenarioare: BaseScenario=$0.09/kWhExhibit APage 57 of 432NevadaPowerCompanyLowIncomeWeatherizationProgramJanuary201016 LowScenario=$0.09/kWh HighScenario=$0.09/kWhSectionE:SupportingDocumentationThe Low Income WeatherizationProgramM&V Reports for 2008 areprovidedas Technical AppendixItem DSM17.Exhibit APage 58 of 432Exhibit APage 59 of 432NevadaPowerCompanyMarketandTechnologyTrialsJanuary20101NevadaPowerCompanyProgramDataSheetMarketandTechnologyTrialsJanuary2010Exhibit APage 60 of 432NevadaPowerCompanyMarketandTechnologyTrialsJanuary20102TableofContentsProgramSummary ......................................................................................................................3SectionA:2008ProgramResults..................................................................................................32008Analysis........................................................................................................................62008LessonsLearned.............................................................................................................6SectionB:2009Program..............................................................................................................72009ProgramExecution.........................................................................................................72009ResultstoDate ...............................................................................................................7SectionC:Proposed20102012Program ......................................................................................8RationaleandSupportingData .................................................................................................820102012ProgramExecution .................................................................................................820102012ProgramManagementPlan....................................................................................1020102012DataDeliveryandTracking ...................................................................................10M&VPlan ...........................................................................................................................10ListofTablesTable1:Results,ProgramYear2008....................................................................................................................................... 6Table2:BudgetforProgramYear2009................................................................................................................................... 7Table3:Base,Low,andHighBudget,ProgramYears20102012............................................................................................ 8ListofFiguresNoneExhibit APage 61 of 432NevadaPowerCompanyMarketandTechnologyTrialsJanuary20103Date: January2010ProgramName: MarketandTechnologyTrialsProgramStatus: Continuing/ExpandedProgramManager: KellyJohnsonPrimaryContractor(s): Varies2009Budget: $200,000ProposedBudget:2010:2011:2012:Low$160,000$160,000$160,000Base$200,000$200,000$400,000High$240,000$240,000$440,000TRCB/CRatios: LowN/ABaseN/AHighN/AProgramSummaryThe Market and Technology Trials Program focuses on the assessment and testing of innovative andenergyefficient technologies with applications in the residential, smallcommercial, and industrialmarkets inNevada.Thetrialsallowsmallscaletestsofproductsthathavepotential energyanddemandsavings benefits. Where the benefits are demonstrated to be of sufficient quantity and reliability themeasurewillbeincorporatedinoneofNevadaPowersenergyefficiencyordemandresponseprograms.This program strengthens Nevada Powers commitment to help customers reduce their energy billsthroughtheimplementationofnew,advancedandcuttingedgeenergyefficiencymeasures.Under this program, Nevada Power and its contractors conduct due diligence in selecting programs fortestingandevaluationbasedonthefollowingcriteria:a. Productwillestablishfeasibilityoftechnicalconceptsandcanpotentiallyadvanceenergyscienceand/ortechnologybeneficialtoNevadaselectricratepayers.b. Theproducttechnologyofferspotentialforenergysavingsanddemandsavings.Atthe conclusion of eachfield evaluation,NevadaPowerpreparesadetailedreportdocumentingtestingprotocols, measured data results, conclusions and recommendations for further evaluations and/ortechnology deployment. These reports support the dissemination of related test performance data andlessonslearned.SectionA:2008ProgramResultsIn 2008, Nevada Power continued its commitment and efforts assessing and evaluating innovativetechnologiesconsideredtosupportenergyefficientapplicationsforNevadacustomers. Completereportsforeachtrialareprovided as TechnicalAppendixItem DSM8.Newtechnologyassessmenteffortsin2008included:Exhibit APage 62 of 432NevadaPowerCompanyMarketandTechnologyTrialsJanuary20104eCubeRefrigerationTemperatureControllerFieldTestThe eCube controller is a small box that contains a material inside that simulates the temperatureperformance of food. It can be retrofitted with a thermostat sensor in a refrigerated space, and is smallenough to easily fit into refrigeration units. The eCube temperature represents food temperature ratherthanairtemperaturethereforeitprovidesadelayedtemperatureresponsecomparedtothemorerapidairtemperaturevariations normally monitoredbythethermostatsensor.Theeffectofthisunitisfewer,butlonger,"onandoff"compressorcycles.Longercyclesresultinhighercompressorefficiencybecausethecompressoroperation isallowedtimetostabilizeandreachfull design efficiencyduring eachcycle.Anadditional claim that the eCube controls air temperature to a lower level with no adjustment to thethermostatwasalso evaluated.For the walkin refrigerator atthe Del Taco test site, the annual utility bill savings would be $27 to $40based on a projected annual energy savings of 269 kWh and an estimated electric energy cost in the10/kWh to 15/kWh range. Comparing the projected savings with the eCube cost ($225 plus $100 forinstallation), results in a payback period of 812 years. This payback period is applicable only to theconditionsatthefieldtestsite,assumedelectricitycosts,andtheinstalledcostassumptions,andmayvaryat other sites. This unit was not adopted as a supported energy efficiency measure. The final report isprovidedasTechnicalAppendixItem DSM8.SEER21HighEfficiencyAirConditionerField TestFrigidairehasbegun marketinga4tonairconditioning(AC)unitintheLasVegasareawithaSeasonalEnergy Efficiency Ratio (SEER) rating of 21. This system has the highest SEER efficiency ratingcurrently available for a 4ton residential AC. This system has been commercially available for about ayear,and only a few units have been installed to date in the Las Vegas area. Reducing air conditioningloadbysupportingincreaseduseofhigherefficiencyairconditionerswouldreducetheutilityscustomerdemandatcriticaltimesandwouldreducecoststocustomersduringthehotweatherperiods.This unit achieved the energy savings that were expected from a SEER 21 AC unit. The homeowner'sannualutilitybillsavingscouldbereducedby$189basedonaprojectedannualenergysavingsof1,746kWh and the current Nevada Power residential rate of 10.84 /kWh. Comparing the test sitehomeownersprojectedsavingsof$189annuallywiththeassumed$7,000incrementalcosttoupgradea4ton AC installation from the baseline SEER 13 model to the SEER 21 AC system results in a simplepayback of 37 years. A payback of this length is longer than the expected AC system lifetime and theupgrade would not pay for itself over the expected life of theunit. As the price of this unit is reducedwith increased production this unit will be a viable addition to the Residential High Efficiency AirConditioningProgram.ThefinalreportisprovidedasTechnicalAppendixItem DSM8.GeoexchangeHVACandDomesticHotWaterThis program was continued from 2006. It was cost effective to keep monitoring at the site since all ofthe measurement and verification equipment was already installed. It was found that the geoexchangeheatwascosteffectiveforradiantfloorheatinganddomestichotwater.Forairconditioning,thesystemperformed below the efficiency of what would be expected of a conventional air conditioning system,although itdid keepthe houseat74degreesFahrenheitfor most ofthesummer. Thesystem had longerruntimes dueto increased groundlooptemperatures.Thissystem was experimental,andthecontractorhad a lot of kinks to work out due to inexperience in geoexchange installations in the Las Vegas area.Thesystemisconstantlybeingimprovedandworkedoninhopesthatitwillprovetobecosteffectiveinthefuture.Exhibit APage 63 of 432NevadaPowerCompanyMarketandTechnologyTrialsJanuary20105InHomeDisplaysThe In Home Display Market test investigated customers preferences for the features and customersreactions to the five displays tested. The results revealed that there were savers and non savers. Thesaversactivelyworkedwiththedevicesandobtainedenergysavings.Thenonsaversdidnotinvestmuchinterest in the devices and did not obtain energy savings. Approximately 80% of the participants weresavers. The features that the customers found most valuable were the presentation of energy and dollarsavings, both instantaneous and period to date. All other display options were rated lower. Theparticipantsdidnotplacemuchvalueontellingtimeoresthetics.The test demonstrated that any larger program would require a dedicated customer support, betterinstructions onhowtousethe devices,and ongoing educationto maximizethepotential energysavings.Devices that require the installation of pickup devices in electric panels encountered major installationdifficulties as they could not be installed in many panels due to space or access limitations and theyrequiredtheaddedexpenseofanelectricianforinstallation.The test observed an overall approximate energy savings of 7.34% for Nevada Power. It is noted thatapproximately40%oftheparticipantsachievedsavingsgreaterthan10%.TheresultsoftheMarketTestwereusedinthedesignoftheMarketResearchbeingconducted in2009.Themarketresearchwillinvestigatethedesignofcustomersupportfunctions,educationalmaterials,unitdeployments and second generation in home displays that are designed to work with a smart meter andminimize installation, and address rate data updating issues. The final report and M&V report areprovidedasTechnicalAppendixItem DSM13andTechnicalAppendixItem DSM15.IceBearThis project was initiated to investigate the installation and performance of ice storage technology inshifting load from onpeak during the hot afternoons to mid and offpeak hours during the night ormorning hours in the Las Vegas area. The project was designed to investigate the operationaleffectiveness and technical feasibility of using Ice Bear 30 energy storage applied to common directexpansionairconditionersasanappropriatetechnologyfordemandreductionandpeakloadmanagementinNevada.The project consisted of the installation of four Ice Bear units at two different business locations duringthe summer of 2008 and monitoring the performance of these units for the 2008 cooling season. Anemphasis of the project was to study the impact of unusually high daytime and evening Las Vegassummer temperatures on the ice making and ice cooling operational modes. The Ice Bear 30 units areprogrammed to permanently load shift 95% of the existing air conditioning onpeak demand (KW) andenergy(KWh)tothe midand offpeakperiods.Theprojecttimelineanticipatedthattwo demonstrationsite agreements would be executed, that the design phase, installation, and startup phases would becompleted so that the evaluation phase could begin on June 1, 2008 and continue for a period of sixmonths.Problems encountered during the test included major delays as the main electric service panel at onelocation required an upgrade as it was undersized to meet the increased load requirements. In additionthereweretwooperatingissuesthatrequiredthereplacementofacircuitboardandsensorassembliesthatadverselyimpactedtheresultsofthetest.ForthetestperiodtheIceBearunitswereapparentlysuccessfulatreducingtheonpeakdemandforeachcombinationACandIceBearunitbyover90%forthesixhourtargetperiod.(Duetoinstallationdelaysthe units could not be tested during the very hottest of summer days.) This demand reduction wasExhibit APage 64 of 432NevadaPowerCompanyMarketandTechnologyTrialsJanuary20106accomplished with no increase in aggregate electrical energy consumption. The test demonstrated thattheIce Bearunits whenappropriatelyappliedhavethetechnicalpotentialtoshiftapproximately90% oftheonpeakairconditioningloadtomidandoffperiods.ThefinalreportfortheIceBearTestisprovidedas TechnicalAppendixItem DSM8.Table1provesthebudgetperformanceforthisprogramin2008.Table1:Results,ProgramYear2008TotalProgram Target Actual VarianceBudget,TotalProgram $400,000 $298,101 74.5%No.ofInstalledMeasures 5 4 80.0%DemandSavings(kW) N/A N/A N/AEnergySavings(MWh) N/A N/A N/A2008AnalysisThe2008MarketandTechnologyTrialsevaluatedfourtechnologies withthepotentialtosave energyintheLasVegasserviceterritory,focusingprimarily in cooling. All havethepotentialtobecomeaviablepartofanenergyconservationprogram. eCube is a low cost measure that would be especially effective in walkin refrigerators that arenotusedoftensinceitreducesthecycling. The SEER 21 air conditioner will likely come down in price as more units are manufactured.When the incremental cost comes down, it could potentially be a good investment for thecustomer. TheGeoexchangehomehasbeenanongoingmarkettrial.Astheindustrybecomesmorematurewith more experienced installation contractors, it could become cost effective for new homeconstruction. TheInHomeDisplaysMarketTestwas effective in identifying customerreactionanddesiresinregards to in home displays and in identifying other issues that required additional research toinsureawiderrolloutwouldachieveoptimumresults.Theresultsguidedthedesignofthe2009In Home Display Market Trial. The results of the2009 Market Trial will also be used to guidethe design of the In Home Display measure under the Demand Response Program in the 20102012actionplanperiod. The Ice Bear Test demonstrated that such units have the technical potential to shift 90% of airconditioningdemandfromonpeaktomidpeakandoffpeakperiods.2008LessonsLearnedPrograms usually have a long lead time between program conception and actual installation for testing.Finding a customer willing to participate can take time, but having a customer willing and eager toparticipatemakesallthedifferenceinobtainingaccurateinformationabouttheprogram.Exhibit APage 65 of 432NevadaPowerCompanyMarketandTechnologyTrialsJanuary20107SectionB:2009ProgramNevadaPowersprogrambudgetforMarketandTechnologyTrialsfor2009is$100,000.Nevada Power is evaluating numerous programs for 2009. Several of these will leverage partnershipopportunities with customers, vendors, and efficiency industry organizations. Below is the target andbudgetfortheprogram.Table2:BudgetforProgramYear2009TotalProgram 2009Budget,TotalProgram $100,000No.ofInstalledMeasures 4DemandSavings(kW) N/AEnergySavings(MWh) N/ATechnology Trials that are being considered for 2009 include heat pump water heaters, new lightingtechniques,residentialoccupancysensors,and/orcommercialHVACoccupancysensors.Thefollowingpotentialproductsandtechnologieswillbeinvestigatedin2009andifmerited,trialswillbeinitiated.HeatPump WaterHeaters(HPWHs)Heatpumpswaterheatersrejectheatintowater,replacingatraditionalwaterheater.Theyneedmildtowarmclimates,andshouldalwaysbesomewherebetween4090degreesF. Theyneedlotsofairspacearoundthem,therightambienttemperaturerange,nofreezingconditions,andproperventilation. Whentheconditionsarerightitappearsthattheefficiencyfactorscanbethreetimesthatoftraditionalwaterheaters. LasVegasseemstohaveanidealclimatefortheproduct.NewLightingTechnologiesNewtechnologiesareconstantlyevolvingthatwillneedtoexaminedeveryyear,suchasLEDlightsandfiber optic lighting options. Both offer significant savings over CFLs, although the LED light is stillmuch more expensiveand haslimitedapplications.Induction lightingforcommercialpropertiesforuseinstreetlightingisalsobeingexplored.OnlineCustomerExperience(Interactivefeedbackviapersonalcomputer)ThisinitiativeinvestigatesthecustomersexperiencewithNevadaPowersnewonlinetoolsforviewingbillingdata,performingonlineanalysisandforperformingonlinehomeenergyaudits.Enhanced Bill AnalysisThis initiative is targeted to investigate the effect on customer energy consumption by providingadditionalusefulinformationonthemonthlyelectricbill.2009ProgramExecutionThe implementation process in 2009 will continue the use of program screening, program agreements,and establishment ofprogramtest guidelines(See Appendix A).Finalreportsandrecommendationsforeach program are provided as part of the Nevada Powers Annual DSM Update Report to theCommission.2009ResultstoDateOnlineCustomerExperienceEvaluationThedraftreportfortheOnlineCustomerExperienceinvestigationisunderreview.Exhibit APage 66 of 432NevadaPowerCompanyMarketandTechnologyTrialsJanuary20108SectionC:Proposed20102012ProgramTheproposedprogramfor20102012willbeimplementedasithasbeeninprioryears.Theprogramwillgive priority to potential products that are expected to have the greatest savings potential, cooling andlighting.Table3providesthebudgetsforthebase,low,andhighscenarios.Table3:Base,Low,andHighBudget,ProgramYears20102012LevelBudgetTRC 2010 2011 2012Base$200,000 $200,000 $400,000 N/ALow$160,000 $160,000 $160,000 N/AHigh$240,000 $240,000 $440,000 N/ARationaleandSupportingDataTheMarketandTechnologiesTrialprogramisdesignedtotestnewtechnologiesandtransferthisinformationtoexistingornewDSMprogramsforNevadaPoweranditscustomers.TheCommissionDiscussionandFindingsinConsolidatedDockets0606051and0607010foundthataddressingconservationandDSMissuesbyusingasystematicprocessforevaluatingthepotentialoftechnologiesisnecessaryinordertodevelopandimplementnewprograms.Sometrialsmaytakemorethanoneyearandwillbecontinuedintothefollowingprogramyear.20102012ProgramExecutionTheimplementationprocessconsistsofproject/productscreening,agreements,andestablishmentoftestguidelines.Finalreportsandrecommendationsforeachproject/productareprovidedtotheCommissionaspartoftheCompanysAnnualDSMUpdateReport.Listedbelowisashortlistofthetypesoftypicaltechnologiesthatmaybeconsideredfortestinginthe20102012actionplanperiod.ResidentialOccupancySensorsOccupancySensorshaveverifiedsavingsinthecommercialsectorforhotelsandmotels,andareofferedunderthecommercialrebateprogram.Atrialoftheresidentialoccupancysensorswoulddetermineiftheyarealsocosteffectivefortheaveragehomeowner.Sincetheyarelowcost,rangingfrom$30to$130,andeasytouse,theproductwouldbecosteffectivewithminimalsavings.Inadditiontoenergysavings,theymaybeanaddedsecuritymeasureinthehome,especiallyinoutsidelightingapplications.Therearemanystudiesontheenergysavingsforcommercialbuildings,reducingenergycostsbyupto50%,butuseintheresidentialmarketrequiresfurtherresearch.WirelessOccupancySensorHVACControlWirelessOccupancySensorHVACControl canbeused inhospitality,multifamilydwellings,andoffices.Itworksoffawirelessplatform,facilitatingquickandeasyretrofitinstallation.Itusestwosensors,onethatisaceilingmountpassiveinfraredsensorandonethatisadoorsensor.Thepassiveinfraredsensorallowstheunittodetectwhensomeoneisintheroom,thereforeitwillnotturnoffifsomeoneissleeping.Itcanbeprogrammedandcommissionedfordifferentsetpointsandmultiplelevelsofsetback,thereforeenergysavingswouldvarywidelydependingonapplicationandusage.ElectricVehiclesThe Electric Vehicles (EV) are coming and with them the demand for electricity to charge thesevehicleswillfollow.ThePlugInElectricVehicleisahybridvehiclewithbatteriesthatcanberechargedExhibit APage 67 of 432NevadaPowerCompanyMarketandTechnologyTrialsJanuary20109by connecting a plug to an electric power source. It shares the characteristics of both traditional hybridelectric vehicles, having an electric motor and a internal combustion engine, and of battery electricvehicles,alsohavinga plugtoconnecttotheelectricgrid.MostPHEVsontheroadtodayarepassengercars, but there are also PHEV versions of commercial passenger vans, utility trucks, school buses,motorcycles,scooters,andmilitaryvehicles.Itisestimatedthateachkilowatthourofbatterycapacityinusewilldisplaceupto50USgallonsofpetroleumfuelsperyear(gasolineordieselfuels).The technologytestwouldinvestigatevarioustoolstoencourageoffpeakcharginganddemandresponseopportunitiesthatmightbeavailablewithPHEVs.ElectronicGamingMachinesIn2005NevadaPowerauthorizedastudyofthepotentialforenergysavingsin theElectronicGamingMachine(EGM)industryinthestateofNevada.AtthattimetheestimatedelectricconsumptionofEGMsinthestateofNevadawas263,000,000kWh.AsofJune2008thenumberofEGMsinthestatehasremainedfairlyconsistentatjustover200,000devices.Since2005theadvancementinqualityandoutputofLEDlightsmakesthepotentialforEGMupgradesmoretechnicallyfeasible.ThetechnologyandpriceonLCDscreenshasalsoimprovedsince2005.Additionally,alargepercentage ofEGMsareactuallycomputerprocessorsandthereappearstobeenergysavingspotentialinthepowersuppliesandmicroprocessorequipment.AlloftheenergysavingsrelatedtoEGMswebelievewillresultinsignificantHVACsavings.IthasbeenestimatedthattheenergysavingspotentialinEGMsisbetween5%30%.Thelargeenergyconsumptionisbasedon24houroperationsallthedevicesalsoimpactthesystempeak.NevadaPowerhasworkedwithalargeEGMmanufacturerinthestateandproposestoworkwiththeirR&Dlabtoevaluatethesavingspotential,theHVACinteraction,andthetechnicalfeasibilityoftheequipmentwhilemaintainingthestrictcontrolsandintegrityoftheEGMsasrequiredbytheNevadaStateGamingCommissionandStateGamingControlBoard.GreenMotorsAttheendofmotorlife,motorsareeitherreplacedorrewound.Forlargemotorsthecosttoreplaceamotorisoftencostprohibitiveandthereforemostverylargemotorsarerewound.TheDOEhasreportedthatingeneral,onetotwopercentagepointsshouldbedeductedfromtheefficiencyofanelectricmotorthathasbeenrewound.However,ithasbeenshownthatifdonewithbestpractices,amotorrewindcanresultinnoefficiencyloss.EASA/AEMThassetguidelinestofollowwhenrewindingamotorinordertominimizeefficiencyloss.TheGreenMotorsPracticesGroup(GMPG)wasfoundedin2006asanonprofitorganizationdedicatedtopromotingbestpracticesatmotorrepairshops.GMPGenforcestherewindguidelinesandcertifiesservicecentersthatfollowtheEASA/AEMTguidelines.NevadaPowerplanstoexploremarketawarenessandpotentialforthismotoroption.OfficeoftheFutureOfficecharacteristicsindicatethat75%oftheenergyuseinofficesisrelatedtoLighting,HVAC,andPlugLoad.Despiteenergyefficiencyefforts,buildingenergyuseisnotgoingdownprimarilyduetoeverincreasingplugload.Takingamoresystemsapproachincludingallconnectedelectricloadforofficespacesappearstoholdpromiseforahigherlevelofenergysavingsthanthetraditionalwidgetapproach.Bydesigningpackagesofenergyefficientmeasuresfordifferentofficetypesforbothretrofitandnewconstructionwillprovideofficespacestotakeamoreholisticplanningapproachtotheirenergyuse.NevadaPowerproposestobuildofftheofficeofthefutureplanningcurrentlyunderwayatmanymajorutilitiesnationwideandthendevelopaproofofconceptmarketingtrialtodeterminethepotentialformarketacceptanceandtechnicalpotentialinsouthernNevada.HVACRetrofitDevicesAtleasttwocompanieshaveapproachedNevadaPowerwithHVACretrofitdevicesthatsuggestenergysavingsbycyclingthecompressorwhenitisnotneeded.AstheHVAClowersthetemperature,theevaporatorcannotextractasmuchcoolingcapacityanditbecomessaturated.WhentheevaporatorisExhibit APage 68 of 432NevadaPowerCompanyMarketandTechnologyTrialsJanuary201010saturated,thecompressoriswastingenergybecausetheevaporatorcannotusetheadditionalcoolingquickenough.Thesedevicesturnoffthecompressoruntiltheevaporatorisnolongersaturated,andthenallowsthecompressortoturnbackon.Cyclingthecompressormakestheprocessmoreefficientbynotrunningthecompressorwhenitisnotneeded.Energysavingsof1020%havebeensuggestedandthereareinstallationsreportedassuccessfulinEuropeandAustraliahowevernoinformationhasbeenprovidedrelatedtoinstallationsintheUS.NevadaPowerisproposingtostudythistechnologyfurtherinbothcommercialandresidentialapplicationstodetermineifthereisanyrealbenefittothisblackboxtechnology.DataMiningDataminingistheprocessofsortingthroughlargeamountsofutilitycustomerdata,benchmarkingperformance,andidentifyingcustomerswithexcessiveenergyordemanduse.Theprocessinvolvesacustomized,standalonesoftware applicationthatwillconsolidateandsiftthroughutilitybillingandcustomerdata(suchassquarefootage)toallowNevadaPowertoidentifycustomerswithoperationalproblemsandopportunitiesforefficiencyimprovements.Thisapproachhasbeensuccessfulatotherutilitieswithmanycustomersegments,includingofficebuildings,clothingretailers,banks,andlocal,state,andFederalgovernment.Typically5to10%ofcustomerfacilitiesareusingatleast200%ofexpectedconsumption.Correctingtheseoutliersyieldslargecustomersavingsandmotivatescustomerstodelvefurtherintoenergyuseintheirotherbuildings.NevadaPowerproposestotestdataminingbothasanoptiontoidentifylikelycandidatesforequipmentimprovementsandformarketacceptanceofthistypeofoffering.20102012ProgramManagementPlanTheprogrammanagementplanfortheMarketandTechnologyTrialsprogramincludesaNevadaPowerprogrammanagerworkingwithcollaborationconsultantstoconductthetrials.20102012DataDeliveryandTrackingAcomprehensivereportwillbedevelopedforeachproject/productinvestigated.M&VPlanAuniquemeasurementandverificationplanwillbedevelopedforeachproject/productinvestigated.Exhibit APage 69 of 432January 2010 1 Nevada Power Company Program Data Sheet Demand Response January 2010 Exhibit APage 70 of 432January 2010 2 Table of Contents Program Summary ..................................................................................................................................... 5 Section A: Historical Program Review ..................................................................................................... 8 Section B: 2008 ACLM Program Results ................................................................................................. 9 2008 Program Variance Analysis ......................................................................................................... 10 2008 Program Year Activity Summary ................................................................................................ 12 2008 Lessons Learned .......................................................................................................................... 12 Section C: 2009 Program .......................................................................................................................... 14 2009 Program Execution ...................................................................................................................... 14 Section D: Proposed 2010-2012 Demand Response Program ............................................................... 15 Explanation of Scenario Assumptions .................................................................................................. 23 Input Data, Description of Sources, and Results of Financial Analysis ............................................... 24 Interpretation of Results ....................................................................................................................... 25 Section E: Direct Load Control 2010-2012 ............................................................................................. 26 Rationale and Supporting Data Direct Load Control ........................................................................ 26 Supporting Savings Data Direct Load Control .................................................................................. 30 2010-2012 Program Execution Direct Load Control ........................................................................ 32 2010-2012 Program Management Plan Direct Load Control ............................................................ 34 M&V Plan ............................................................................................................................................ 35 M&V Objective .................................................................................................................................... 35 Approach .............................................................................................................................................. 35 Sample Selection .................................................................................................................................. 35 Onsite Surveys and Verification ........................................................................................................... 35 M&V Analysis Methods ...................................................................................................................... 35 Section F: Program Economic Evaluation Direct Load Control ....................................................... 36 Cost Benefit Analysis ........................................................................................................................... 36 Free ridership ........................................................................................................................................ 36 Input Data, Description of Sources, and Results of Financial Analysis ............................................... 36 Interpretation of Results ....................................................................................................................... 37 Section G: Dynamic Pricing Trial 2010-2012 ......................................................................................... 38 Rationale and Supporting Data Dynamic Pricing Trial ..................................................................... 38 Supporting Savings Data Dynamic Pricing Trial .............................................................................. 40 2010-2012 Program Execution Dynamic Pricing Trial ..................................................................... 41 2010-2012 Program Management Plan Dynamic Pricing Trial ........................................................ 43 M&V Plan ............................................................................................................................................ 44 M&V Objective .................................................................................................................................... 44 Approach .............................................................................................................................................. 44 Sample Selection .................................................................................................................................. 45 Onsite Surveys and Verification ........................................................................................................... 45 M&V Analysis Methods ...................................................................................................................... 45 Section H: Program Economic Evaluation Dynamic Pricing Trial .................................................. 45 Cost Benefit Analysis ........................................................................................................................... 45 Freeridership ......................................................................................................................................... 45 Exhibit APage 71 of 432January 2010 3 Input Data, Description of Sources, and Results of Financial Analysis ............................................... 45 Interpretation of Results ....................................................................................................................... 46 Section I: Energy Storage 2010-2012 ...................................................................................................... 48 Rationale and Supporting Data Energy Storage ................................................................................ 48 Supporting Savings Data Energy Storage ......................................................................................... 49 2010-2012 Project Execution Energy Storage ................................................................................... 52 2010-2012 Project Management Plan Energy Storage ...................................................................... 53 2010-2012 Data Delivery and Tracking Energy Storage .................................................................. 53 M&V Plan ............................................................................................................................................ 53 M&V Objective .................................................................................................................................... 53 Approach .............................................................................................................................................. 53 Sample Selection .................................................................................................................................. 53 Onsite Surveys and Verification ........................................................................................................... 53 M&V Analysis Methods ...................................................................................................................... 54 Cost Benefit Analysis ........................................................................................................................... 55 Section J: Supporting Documentation ................................................................................................... 55 Exhibit APage 72 of 432January 2010 4 List of Tables Table 1: IRP Targets for Demand Reduction Capacity .................................................................................................................... 8 Table 2: Verified Demand Reduction Capacity ............................................................................................................................... 9 Table 3: Program Year 2008 Results ............................................................................................................................................. 10 Table 4: IRP Budget and Target, Program Year 2009 ................................................................................................................... 14 Table 5: Cumulative Installed Demand Capacity (MW) ................................................................................................................ 15 Table 6a: Proposed Targets and Budgets, Program Years 2010-2012 ........................................................................................... 15 Table 6b: Proposed Energy and Demand Targets 2010-2012 ........................................................................................................ 16 Table 7: Proposed Technology Packages 2010-2012 ..................................................................................................................... 18 Table 8a: Base Scenario Cost Test Results 2010-2012 .................................................................................................................. 24 Table 8b: Low Scenario Cost Test Results 2010-2012 .................................................................................................................. 24 Table 8c: High Scenario Cost Test Results 2010-2012 .................................................................................................................. 25 Table 9a: Targets and Budgets, Program Years 2010-2012 ........................................................................................................... 29 Table 9b: Targets, Program Years 2010-2012 ............................................................................................................................... 30 Table 9c: Existing Demand Response System (Prior to 2010) Program Costs .............................................................................. 30 Table 10a: Base Scenario - Program Budget by Category, Program Years 2010 2012 ............................................................... 31 Table 10b: Low Scenario - Program Budget by Category, Program Years 2010 2012 ............................................................... 31 Table 10c: High Scenario - Program Budget by Category, Program Years 2010 2012 .............................................................. 31 Table 11a: Base Scenario Cost Test Results 2010-2012 ................................................................................................................ 36 Table 11b: Low Scenario Cost Test Results 2010-2012 ................................................................................................................ 37 Table 11c: High Scenario Cost Test Results 2010-2012 ................................................................................................................ 37 Table 12a: Budgets, Program Years 2010-2012 ............................................................................................................................ 40 Table 12b: Targets, Program Years 2010-2012 ............................................................................................................................. 40 Table 13a: Base Scenario - Program Budget by Category, Program Years 2010 2012 ............................................................... 40 Table 13b: Low Scenario - Program Budget by Category, Program Years 2010 2012 ............................................................... 41 Table 13c: High Scenario - Program Budget by Category, Program Years 2010 2012 .............................................................. 41 Table 14: Potential Sample Design for Price Responsive Load Control Pilot ................................ 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Table 15a: Base Scenario Cost Test Results 2010-2012 ................................................................................................................ 46 Table 15b: Low Scenario Cost Test Results 2010-2012 ................................................................................................................ 46 Table 15c: High Scenario Cost Test Results 2010-2012 ................................................................................................................ 46 Table 16a: Targets and Budgets, Program Years 2010-2012 ......................................................................................................... 49 Table 16b: Targets, Program Years 2010-2012 ............................................................................................................................. 49 Table 17a: Base Scenario - Program Budget by Category, Program Years 2010 2012 ............................................................... 51 Table 17b: Low Scenario - Program Budget by Category, Program Years 2010 2012 ............................................................... 51 Table 17c: High Scenario - Program Budget by Category, Program Years 2010 2012 .............................................................. 52 List of Figures Figure 1: 2010 Load Duration Curve with 2010 Target Demand Response Capacity ................................................ 26 Figure 2: 2015 Load Duration Curve with 2012 Target Demand Response Capacity ................................................ 27 Exhibit APage 73 of 432January 2010 5 Date: January 2010 Program Name: Demand Response Program Status: Revised/Expanded Program Manager: Michael Brown Primary Contractor(s): To Be Determined by RFP 2009 Budget: $13,133,000 Proposed New Budget: Note: These costs include $5,750,000 to account for program costs associated with the existing (prior to 2010) 130-140MW DR system. 2010: 2011: 2012: Low $ 14,647,000 $ 10,781,000 $ 11,450,000 Base $ 17,170,000 $ 21,520,000 $ 25,125,000 High $ 27,311,000 $ 34,242,000 $ 37,878,000 New Incremental Peak Demand Installed Capacity (MW) 2010: 2011: 2012: Low 33 9 11 Base 27 56 82 High 58 87 112 Cumulative Installed Capacity (MW) 2010: 2011: 2012: Low 173 182 193 Base 167 223 305 High 198 285 395 TRC B/C Ratios: Low 1.44 Base 2.52 High 2.42 Program Summary The Demand Response (DR) Program, previously known as the Air Conditioning Load Management Program, has been redesigned to drive market transformation and incorporate additional opportunities to help temper the Companys needle-like summer peak. Nevada Power is proposing to expand the installed demand response reduction capacity by approximately 165 MW over the next three year period starting in 2010. This plan includes expanding installed demand reduction capacity by 146 MW in the residential and small commercial sectors, and by 12 MW in the large commercial and industrial sectors. The program as proposed incorporates all of the Demand Side Plan measures that require customers or demand responsive technology to respond to or coordinate with dispatchable events. Concurrently, the Advanced Service Delivery (ASD) initiative, described in detail in Section 2, provides a solid and enhanced foundation upon which Nevada Power can continue to build a successful Demand Response Program. The program has been designed to integrate with the Advanced Service Delivery initiative. The combined goal of the integration of these two major undertakings is to enable customers to more proactively take control of their energy consumption and costs, and to promote much wider scale participation in energy efficiency and demand response initiatives that increase electrical system efficiency and reliability while lowering production costs. This goal can be achieved through deployment of enabling technologies (e.g. smart meters, in-home displays, programmable communicating thermostats the delivery of educational material, and the implementation of dynamic pricing. Exhibit APage 74 of 432January 2010 6 As part of the Smart Grid Investment Grant awarded by the US Department of Energy (DOE), Nevada Power and Sierra Pacific Power will receive $138 million for the ASD initiative. Not only will this ASD smart grid infrastructure support the Demand Response program but a portion of the grant funding will offset a portion of the Demand Response program costs. This will result in lower overall costs and a higher Total Resource Cost (TRC) and Ratepayer Impact Measurement (RIM) cost benefit ratios. The proposed DR program as aligned with ASD demonstrates cost-effectiveness, with a TRC cost benefit ratio of 2.52 and a RIM cost benefit ratio of 1.18. The proposal assumes ASD approval. . However, if the ASD project is not approved as requested, adjustments to the DR proposal would be required in order to achieve the proposed demand and energy savings targets. If no ASD funding is approved the Company requests that the DR base budget level be increased by $23,189,000 to cover the required meter, software, and communication system costs to enable the next generation of DR programs. Without the shared benefits of implementing DR and ASD the TRC cost benefit ratio decreases to 2.02 and the Ratepayer Impact Measurement (RIM) cost benefit ratio decreases to 1.04. The proposed DR program will develop low cost generation equivalent peak load resources while providing value added services and financial savings to Nevada Power customers via advanced technology and communications systems. The program has been designed to provide residential, commercial, and industrial customers enabling technology that will allow them greater control over their energy consumption patterns and choices about how to participate in Nevada Power peak load management programs. The Demand Response program offers a technology package to customers that will allow them to participate in the following programs: Direct Load Control/Automation Service Previously available to residential and small commercial customers via the Air Conditioning Load Management (ACLM) program, the proposed base case Demand Response program expands direct load control to large commercial and industrial customers and to technologies that interact with end-use loads other than air conditioning, such as lighting and motor controls. The proposed technology packages will facilitate energy savings across all sectors and increase the value proposition to customers, thereby increasing program participation. Under all of the Direct Load Control/Automation Service options the customer has the ability to override the curtailment at their home or business, and have increased choice regarding participation levels Programs are designed to provide more efficient allocation of participation incentives and greater customer choice. The program transitions from traditional Direct Load Control to the provision of Automation Services on behalf of the customer that ensure savings for them during peak demand events. Dynamic Pricing Trial (also known as Price Responsive Load Control) As part of the ASD grant, Nevada Power will conduct a Dynamic Pricing Trial that will assess the individual and cumulative impacts of rates, technology, and education within a dynamic pricing regime. First, the trial will distinguish the differential impacts of technology and education from the impact of merely taking service under various time-differentiated rates. Second, it will provide the information necessary to characterize changes in customer behavior under dynamic pricing in addition to customer adoption and understanding of dynamic pricing. Third, it will provide proven and reliable forms of education and technology, based on the utilitys extensive experience with device trials, conservation & efficiency programs, and customer research. And finally, the Company will be able to measure the extent to which customers have received the insight, skills, and tools to manage their energy use. Information from the Dynamic Pricing Trial will be used to help refine pricing policy, rates and demand response programs. Demand reduction estimates for the trial have been included in IRP economic and cost/benefit models. Exhibit APage 75 of 432January 2010 7 Energy Storage Distributed and coordinated thermal and battery energy storage holds great promise for peak demand strategies. The base and high case programs propose a pilot to install and evaluate a limited number of distributed energy storage systems to learn more about systems integration and how to optimally deploy such technologies within a demand response resource portfolio. Through the use of next generation residential and small commercial demand response technologies, implementation of advanced signaling and automation technologies in the commercial and industrial sectors, and distributed energy storage products, this portfolio approach will provide more reliable and predictable peak demand resources through diversity while at the same time providing enabling technologies and choices to Nevada Power customers. The Demand Response program will also create a better alignment between energy supply costs and consumer consumption patterns while supporting and promoting complimentary conservation behaviors and energy efficiency investments. Exhibit APage 76 of 432January 2010 8 Section A: Historical Program Review Historically, Nevada Power has focused on direct load control, which is one of the two main types of demand responsedirect load control and price responsive load control. In the past, program efforts concentrated on the direct control of air conditioning systems in the residential and small commercial sectors. The program has been known as the ACLM Program and marketed to Nevada Power customers as the Cool Share program. This section presents a historical review of the ACLM program and then the next section focuses specifically on program year 2008 activities and results of the ACLM program. The Air Conditioning Load Management (ACLM) program is a direct load control program that reduces system peak loads by providing incentives to customers in return for their permission to control their air conditioning loads during peak times. It is a clean energy program that helps to reduce upward pressure on rates for all customers, participating and non-participating customers alike, by offsetting the generation or purchase of higher cost marginal electricity. The ACLM Program also contributes to electrical system reliability as it can be used for non-spinning reserves and reduces congestion on the distribution system. In effect, the direct load control system can operate as a peaking resource, which helps reduce or avoid the necessity to purchase higher cost capacity and energy, and delays the construction of new generation and/or distribution assets. The program has been operating since 2001. Between 2001 and 2006, Nevada Power primarily deployed load control receiver switches from two different manufacturersCannon Technologies and Corporate Systems Engineering. Load control receiver switches represented 92% of the technology deployed. Nevada Power also piloted one-way and two-way programmable communicating thermostats (PCTs) from two different manufacturersthe Cannon/Honeywell one-way ExpressStat and the Carrier two-way ComfortChoice thermostat. PCTs represented 8% of the deployed technology during that period. In 2004 and 2005 Nevada Power piloted a sophisticated load control and customer information gateway system from Invensys; however, due to operating complications and vendor issues, these installations were removed in 2006 and largely replaced with the Carrier ComfortChoice two-way PCTs. By the end of 2006, Nevada Power had approximately 20-24 MW of installed demand reduction capacity for the high temperature summer season. In November of 2006, the Public Utilities Commission of Nevada (Commission) approved the 100 MW expansion of the program as requested in the 2007-2009 IRP. This program expansion focused on the installation of two-way PCT technology. The specific demand reduction goals included in the plan were as shown in Table1: Table 1: IRP Targets for Demand Reduction Capacity Program Year 2007-2009 Cumulative New Demand Reduction Target (MW) 2001-2006 Estimated Demand Reduction at time of IRP Filing (MW) 2001-2009 Cumulative System Demand Reduction Target (MW)2007 25.2 20-24 45-492008 63.0 20-24 83-892009 100.8 20-24 121-125 Exhibit APage 77 of 432January 2010 9 By the end of 2007, Nevada Power had installed an additional 20.8 MW of demand reduction capacity, bringing cumulative demand reduction for the 2001-2007 system to 40 MW at temperatures between 105F-108F for entire system one-hour demand using standard curtailment strategies. The achieved incremental demand reduction capacity in 2007 was 4.4 MW below the new demand reduction target in the above table; however, by the end of 2008 the Company had recovered from a delayed start and installed 65 MW of cumulative new demand reduction capacity for a total 2001-2008 installed and maintained capacity of 84 MW. In October of 2009, at the time of report writing, new installations are ahead of schedule (using 2008 verified kW factors as proxies) with an estimated 2001-2009 installed and maintained capacity of 132 MW. Due to recruiting and installation momentum, the Company may exceed original cumulative new demand reduction targets by up to 20% if measured kW factors remain in the range of 2 kW per PCT. Estimated year end cumulative installed capacity is 140 MW. Table 2: Verified Demand Reduction Capacity Program Year Program Year M&V Verified Demand Reduction Capacity (MW) 2008 M&V Verified Demand Reduction Capacity (MW) 2008 Cumulative M&V Verified Demand Reduction Capacity (MW) 2001-2006 20-24 19 192007 21 17 362008 48 48 842009 (May) 21 21 1052009 (Dec. 31 Est.) 46-56 46-56 130-140Section B: 2008 ACLM Program Results Table 3 is a summary of the 2008 results. Customers continued to respond positively to invitations to participate in the Cool Share Program. By the end of the year, Nevada Power had installed an additional 21,300 PCTs representing an incremental 47.7 MW of installed load reduction capacity. Cumulative customer participation by the end of 2008 approximated 35,500 residences and 84 MW of installed demand response capacity at peak temperatures. Exhibit APage 78 of 432January 2010 10 Table 3: Program Year 2008 Results Target Actual % of Target Budget1 $11,811,000 $11,330,963 96% Incremental Demand Savings (kW)2 37,800 47,675 126% Total System Energy Savings (kWh)3 2,094,641 1,440,034 69% TRC Benefit Cost Ratio 1.14 1.47 129% 1 Actual expenditures include 2008 calendar year ACLM related charges plus adjustments to 2008 invoices made in the calendar year 2009 due to Annual Settlement calculations regarding performance based compensation minus adjustments to 2007 invoices made in the calendar year 2008 due to Annual Settlement calculations regarding performance based compensation. 2 The kW target source is the Nevada Power IRP 2006, Volume V, Demand Side Plan. Demand reduction figures represented are one hour average reduction in the temperature range from 105 F - 108 F as measured at the generator for 4 F setback (PCTs) and 50% cycling (switches) curtailment strategies. 3 Energy savings were achieved due to approximately 80 hours of full system operation at temperatures above 104 F 2008 Program Variance Analysis Program Expenditures Actual expenditures were 4% below plan, while incremental achieved demand reduction was 26% above plan. It should be noted that in 2008 the customer incentive levels were lower in aggregate than plan. In the 2007 Annual Report filed last year, the Company stated that it would be impossible to stay within the originally planned customer incentive budgets during the 2007-2009 timeframe due the structure of the approved Schedule OLM--i.e. because per unit customer incentives embodied in Schedule OLM are higher than originally budgeted. In 2008 alone, this turned out not to be the case in aggregate since 38% of the devices were installed in the fourth quarter and slightly over 50% of the devices were installed after July. The control season runs from June 1 through September 30; however, devices are installed throughout the year in an attempt to maintain a workflow that can support a more constant workforce assigned to the program. Demand Reduction At the end of 2008 cumulative demand reduction capacity for the 2001-2008 Nevada Power load control system was 84 MW at temperatures between 105F-108F for entire system one-hour demand using standard curtailment strategies. The achieved incremental demand reduction capacity for 2008 was 10 MW above target. The Company was able to overcome two shortfalls: a shortfall in installed capacity compared to plan during 2007; and, a lower measured kW Factor (average demand reduction per device). Regarding installed capacity goals, at 84 MW overall the Company is now tracking very well with the IRP goal of a cumulative installed capacity of 83-87 MWi.e. maintenance of a projected 20-25 MW installed during the 2001-2006 timeframe plus the 63 MW goal for incremental capacity in 2008. At 19 MW, the 2001-2006 system capacity is lower than projected due to customer turnover and statistically significant measurement of the Non-Responding Device rate (i.e. devices that do not respond to curtailment signals due to either communication failure or device failure). However, the installation of additional new incremental capacity has helped the Company meet overall targets. Exhibit APage 79 of 432January 2010 11 Regarding a lower measured kW Factor, the M&V results showed a 15% lower demand drop per 2-way PCT in 2008 vs. 2007. As the kW Factor declines, more PCTs must be installed to meet the same demand reduction targets. It is difficult to assign an exact reason for the drop in average reduction per device, as this is dependent upon a wide range of variables including weather, technology, and customer behavior. It is not unreasonable to assume that this factor might further decline in 2009 due to the current economic downturn as customers use less air conditioning to save money on utility bills. Energy Savings Energy savings have not traditionally been a key target of the air conditioning load management program, as the focus of the program is to reduce peak demand and it was believed that there were small energy savings available. However, with the introduction of the programmable communicating thermostat load control technologies, and in particular, the 2-way PCT technologies, significant energy savings are discovered, some of which have already been proven as shown in Table 2. There are three main drivers of energy savings in the air conditioning load management program: More demand reduction capacity - PCT technologies enable greater per device energy and demand savings than receiver switch technology. More information - PCT technologies enable better and more accurate measurement of temperature and energy impacts at a customers premise. M&V data provide net energy savings per discrete curtailment events on average by quantifying energy saved during the event and energy snapback after the event ends. Energy snapback on average is on the order of 30% for switch technologies and 40% for PCT technologies. Snap back is an increase in energy usage after the event as the thermostats reset and put the temperature setting back to the setting that was in effect prior to the event and the air conditioning units run to meet this reduced setting. More capability - PCT technologies enable energy savings year round due to the customer interactive and programmable nature of the devices. The 2-way technology also allows measurements to be made to determine whether or not customers have utilized the set-back features of the programmable thermostat and have saved energy as a result. The energy savings as reported are directly associated with the discrete load control events, i.e. net-energy savings from curtailments events only have been quantified and reported. In 2008, the energy savings as reported in Table 3 above were 69% of the estimated target. This is largely due to the rate and timing of device installations as discussed above in the context of customer incentives, i.e. 38% of the devices were installed after the control season and hence did not create any energy savings. The ACLM Program has not yet claimed any energy savings outside of load control events; however, energy efficiency programs such as the Low-Income Outsourced Weatherization Program and the HomeFree Nevada Program are being proposed that include energy savings from the provision of programmable thermostats. Coordination with other energy efficiency programs may allow additional marketing channels for the Cool Share Program and may allow the program to benefit from their M&V efforts directed specifically toward the quantification of year round energy savings from programmable thermostats. In 2009, an effort is underway to offer participants of the Low-Income Outsourced Weatherization Program a Cool Share thermostat through program cross marketing efforts. Exhibit APage 80 of 432January 2010 12 2008 Program Year Activity Summary During 2008, in addition to focusing on the achievement of incremental demand reduction capacity and the maintenance of existing load control assets, Nevada Power worked to improve the functionality and usability of the load control system in the following areas: M&V Automation and Optimization implementation of software, hardware, and processes to improve feedback timeframes regarding the amount of demand reduction achieved during discrete load control events. Expanded System Monitoring and Testing implementation of software and hardware to improve system availability metrics and testing to document latency from notice of requirement for curtailment to measureable demand drop on system load. Distribution Planning testing of target marketing strategies into areas where the distribution system incurs more stress during peak loading conditions. Geographic Information Systems utilization of GIS systems to assign location information to each device for strategic aggregation of devices into load control groups. Maintenance Optimization allocation of maintenance resources to premises with known or suspected device issues. A more complete discussion of the above topics is included in the ACLM section of the DSM 2008 Annual Report which is provided in Exhibit B of the Demand Side Plan. 2008 Lessons Learned This section provides an overview of lessons learned and challenges that must be addressed based on Nevada Powers experience and observations regarding the implementation and execution of the ACLM Program. As discussed in last years Annual Report, direct load control programs are evolving to include more participation choice for customersfor example, a choice of total hours of curtailment or allowed degrees of temperature setback with varying rebate levels according to selected participation levels. Programs are also evolving that integrate dynamic pricing and delivery of energy information within an integrated demand response program. This evolution in program design and technology requires Nevada Power to support the existing program designs while at the same time preparing for future programs with increased complexity. It also requires an ongoing investigation into emerging technology for customer end-point devices, customer web interfaces, and communication systems for control, feedback, and measurement. Nevada Power is addressing the challenges of building scalable and reliable demand response systems in the following areas: Program Design utilization of new marketing techniques to attract customers to the programs and investigations into new value propositions and program offerings. Technology Selection and Evaluation performance and economic evaluation of communication methodologies, end-point devices, automation techniques, and customer web interfaces. Exhibit APage 81 of 432January 2010 13 Information Technology Infrastructure utilization of new Service Oriented Architecture (e.g. IBM WebSphere) and Business Intelligence (e.g. MicroStrategy) products to facilitate systems integration and enterprise reporting. A more complete discussion of the above topics is included in the ACLM 2008 DSM Annual Report which is provided in Exhibit B of the Demand Side Plan. Exhibit APage 82 of 432January 2010 14 Section C: 2009 Program In October of 2009, at the time of report writing, new installations are ahead of schedule (using 2008 verified kW factors as proxies) with an estimated 2001-2009 installed and maintained capacity of 132 MW. Due to recruiting and installation momentum, the Company may exceed original cumulative new demand reduction targets by up to 20% if measured kW factors remain in the range of 2 kW per PCT. Estimated year end cumulative installed capacity is 140 MW. Table 4: IRP Budget and Target, Program Year 2009 Total ACLM Budget, Total Program $13,133,000 Demand Savings (kW) 37,800 Energy Savings (kWh) 3,102,641 2009 Program Execution The Company will continue to execute the program in a similar fashion as outlined above. However, specific recommendations for improvements to existing processes and preparations for future programs include making incremental investments to: Begin transitioning communication and endpoint technologies to bridging technologies that could be used in concert with future technology packages; Enhance M&V system communications network for improved reliability and improved delivery timeframes of M&V data, and for the testing of second generation IHD technologies and deployment strategies; Acquire enhanced modeling tools and resources for dispatch strategy optimization; Test the implementation of Open Automated Demand Response (Open ADR) protocols in small commercial facilities (or residential facilities with broadband internet) via a hosted demand response application server (DRAS) and Open ADR clients; Develop and test narrowband application of Open ADR protocol for wireless residential applications; Develop web services interfaces to Service Oriented Architecture environment for select demand response applications; and, Expand the use of Business Intelligence applications and data warehouses for predictive analytics, calculation of customer incentive payments, and customer segmentation analyses. Exhibit APage 83 of 432January 2010 15 Section D: Proposed 2010-2012 Demand Response Program Nevada Power proposes to implement the Base scenario. Table 5 below outlines the proposed installed capacity goals on both an incremental and cumulative basis incorporating the estimated installed capacity by the end of 2009. Table 5: Cumulative Installed Demand Capacity (MW) Demand Savings 2010 2011 2012 Pre 2010 Installed* 140 140 140Proposed New System Annual Incremental Targets 27 56 82Proposed New System Cumulative Targets 27 83 165Entire System Cumulative Targets 167 223 305* Note: The cumulative demand savings at the end of 2009 is 140MW. An overview of the proposed budgets and targets for the base scenario for this Program are presented in Table 6a and 6b. Table 6a: Proposed Targets and Budgets, Program Years 2010-2012 Measures Annual Budget TRC 2010 2011 2012 Direct Load Control1 $ 9,914,000 $ 12,6228,000 $ 16,038,000 2.91Dynamic Pricing Trial $ 1,200,000 $ 2,848,000 $ 2,940,000 0.94Energy Storage $ 306,000 $ 300,000 $ 393,000 0.07Pre -2010 Installed $5,750,000 $5,750,000 $5,750,000 n/aTotal 2010-2012 Program $ 17,170,000 $ 21,520,000 $ 25,121,000 2.522 1 Pursuant to NAC 704.952 the Direct Load Control budgets include customer incentives which will be submitted for recovery as part of the annual DEAA filing. 2 Excluding Pre -2010 installed system Exhibit APage 84 of 432January 2010 16 Table 6b: Proposed Energy and Demand Targets 2010-2012 Measures Annual Energy Savings (kWh) New System Incremental Annual Installed Capacity (kW) 2010 2011 2012 2010 2011 2012 Direct Load Control* 6,010,749 23,166,620 22,212,167 27,315 51,176 77,292Dynamic Pricing Trial** 0 2,102,000 2,107,000 0 4,498 4,498Energy Storage n/a n/a n/a 28 28 42Total Program* 6,010,749 25,268,620 24,319,167 27,315 55,702 81,832* Includes prior installed devices. ** Annual incremental savings. The proposed DR Program will develop low cost generation equivalent peak load resources while providing value added services and financial savings to Nevada Power customers via advanced technology and communications systems. The program has been designed to provide residential, commercial, and industrial customers enabling technology that will allow them greater control over their energy consumption patterns and choices about how to participate in Nevada Power peak load management programs. The Demand Response program offers a technology package to customers that will allow them to participate in the following programs: Direct Load Control/Automation Service This program was previously available to residential and small commercial customers via the Air Conditioning Load Management (ACLM) program. The proposed base case Demand Response program expands direct load control to large commercial and industrial customers and to technologies that interact with end-use loads other than air conditioning, such as lighting and motor controls. The proposed technology packages will facilitate energy savings across all sectors and increase the value proposition to customers, thereby increasing program participation. Under all of the Direct Load Control/Automation Service options the customer has the ability to override the curtailment at their home or business, and have increased choice regarding participation levels. Programs are designed to provide more efficient allocation of participation incentives and greater customer choice. The program transitions from traditional Direct Load Control to the provision of Automation Services on behalf of the customer that ensure savings for them during peak demand events. Dynamic Pricing Trial (also known as Price Responsive Load Control) As part of the ASD grant, Nevada Power will conduct a Dynamic Pricing Trial that will assess the individual and cumulative impacts of rates, technology, and education within a dynamic pricing regime. First, the trial will distinguish the differential impacts of technology and education from the impact of merely taking service under various time-differentiated rates. Second, it will provide the information necessary to characterize changes in customer behavior under dynamic pricing in addition to customer adoption and understanding of dynamic pricing. Third, it will provide proven and reliable forms of education and technology, based on the utilitys extensive experience with device trials, conservation & efficiency programs, and customer research. And finally, the Company will be able to measure the extent to which customers have received Exhibit APage 85 of 432January 2010 17 the insight, skills, and tools to manage their energy use. Information from the Dynamic Pricing Trial will be used to help refine pricing policy, rates and demand response programs. Demand reduction estimates for the trial have been included in IRP economic and cost/benefit models. Energy Storage Distributed and coordinated thermal and battery energy storage holds great promise for peak demand strategies. The program proposes to install and test a limited number of distributed energy storage systems to learn more about systems integration and how to optimally deploy such technologies within a demand response resource portfolio. The proposed technology packages would be marketed in an approach that will allow customers to take advantage of existing and future programs, while supporting and promoting complimentary conservation behaviors and energy efficiency investments. Table 7 summarizes the technology measures that would be delivered to customers: Exhibit APage 86 of 432January 2010 18 Table 7: Proposed Technology Packages 2010-2012 Sector Technology Package Customer Benefits Residential Programmable Communicating Thermostat (PCT) Allows participation in DLC; Provides capability for year round energy savings; Facilitates participation in TOU and future PTR or CPP programs via self-selected temperature set-back. In-Home Display (IHD) with broadcast Interval Meter Allows participation in future PTR or CPP programs via receipt of pricing signals and measurement of interval data for rebate calculations; Facilitates year-round energy savings via real-time energy consumption feedback; Facilitates savings for TOU customers. Internet access to energy consumption information and PCT programming (via PC and/or mobile phone) Facilitates access to energy consumption information and use of PCT; Provides platform for energy education, customer service, and marketing of other energy efficiency programs Small Commercial Programmable Communicating Thermostat (PCT) Allows participation in DLC; Provides capability for year round energy savings; Facilitates participation in TOU and future PTR or CPP programs via self-selected temperature set-back. Hardware Automation Gateway and Interval Meter Allows enhanced participation in DLC via automated control of lighting, motor, or other end-use loads; Allows participation in future PTR or CPP programs via receipt of pricing signals and measurement of interval data for rebate calculations. Option: Demand Responsive Controls Allows coordination and potential enhancement of commercial energy efficiency investments by incorporating incremental cost of upgraded lighting ballasts or motor controls into incentive structure Option: Thermal Energy Storage (TES) Allows appropriate customers upgrade of packaged HVAC systems with small scale TES systems Large Commercial and Industrial Software Client integration to Energy Management System (EMS) or Hardware Automation Gateway Allows participation in DLC via automated control of HVAC, lighting, motor, or other end-use loads; Allows participation in future PTR or CPP programs via receipt of pricing signals. Option: Demand Responsive Controls Allows coordination and potential enhancement of commercial energy efficiency investments by incorporating incremental cost of upgraded controls into incentive structures Option: Thermal Energy Storage (TES) Allows appropriate customers upgrade of cooling systems with large scale TES systems Exhibit APage 87 of 432January 2010 19 Management and implementation of the proposed DR portfolio and technology packages can be characterized at a high level by the functional system requirements of the portfolio in six areas: Back Office; Middle Office; Front Office; Communications Systems; Field Services; and, Customer Systems. Back Office - The back office requires construction of IT systems, interfaces, and procedures for: Forecasting the amount of available demand response under variable conditions; Optimizing demand response dispatch algorithms to match system loading requirements; Structuring dispatch algorithms into products that are congruent and consistent with generation products; Scheduling and issuing direct and price-responsive load control signals across multiple platforms; Monitoring and measuring the magnitude of demand response events; Storing and updating event, meter, asset location, and customer data in data warehouses that can be accessed by enterprise systems; Implementation and testing of security systems and protocols including penetration testing and NERC CIP compliance testing and documentation; Building interfaces to internal and third-party customer information and work order management systems; Support for development and automation of Business Process Management tools. The DR program proposes to utilize and integrate back office IT technology that would be common across the portfolio of deployed consumer and field assets. This includes integrating DR systems (both internal and third-party hosted) and data warehouses into a Service Oriented Architecture (SOA) environment. The program proposes to utilize open and/or industry standard protocols to facilitate communications among back-office systems as well as to signal customer devices or software clients across multiple communications paths. Middle Office The middle office will be comprised of systems and procedures for: Event registration; Financial settlement and payment of DR incentives including processes to match each customers event participation profile (e.g. customer participation start and end dates, device active/inactive status, override count, etc.) with the event registry; Maintenance of a book of customer demand response agreements specifying customer elections regarding event number, timeframes, duration, and curtailment strategies; Risk management procedures and accounting documentation including Sarbanes Oxley compliance. Front Office The front office requires processes and procedures for: Exhibit APage 88 of 432January 2010 20 Providing customer service via telephone and online contact centers for the residential and small commercial sectors, and access to key account representatives for large commercial and industrial; Design and implementation of strategic marketing across multiple channels including direct mail, online marketing, community and business events, door-to-door, cross marketing through complimentary energy efficiency programs, and via key account managers; Product structuring for commercial accounts based upon the results of demand response audits and opportunities for enhancing commercial energy efficiency projects implemented as part of the Commercial DSM programs; Contracting and legal services to commemorate demand response agreements; Utility program management to provide oversight and coordination among product vendors, contractors, and internal support groups. Communications Systems The Company uses public and utility owned communications systems for signaling, messaging, and updating device information and configurations. Communications requirements will include: Contract management, installation, and/or maintenance of the following systems: o Utility-owned and licensed VHF 154 MHz one-way system for Corporate Systems Engineering receiver switches; o 900 MHz licensed public paging networks from USA Mobility, American Messaging, Cook Paging, and SkyTel (two-way paging) for communicating with Cannon, Comverge, and Carrier systems; o 2.4 GHz and 900 MHz wireless mesh networks for utility owned two-way communication with M&V assets, and home area networks (HANs) incorporating next generation IHDs and PCTs; o Wireless mesh or wired broadband pathways (e.g. VPN over Internet) to meter gateways and commercial customer clients. Network monitoring of communications systems to ensure the availability and reliability of the demand response portfolio; Security procedures and monitoring. Field Services Field service requirements will include: Installation of PCTs, IHDs, meters, communications equipment, and automation gateways; Training of customers regarding usage of equipment such as PCTs and IHDs; Maintenance for service calls in response to customer issues as well as ongoing inspections and repair of assets in the field; Demand response auditing to identify curtailment strategies in commercial facilities; Exhibit APage 89 of 432January 2010 21 Configuration and testing of software clients, automation gateways, and energy management systems (EMS) at customer locations. Customer Systems The customer systems are detailed in Table 21 above. Implementation and support of these systems will require the following: Customer surveys and focus groups to determine: o The perceived use value of the technology; o Proficiency in device utilization; o Functionality or other hardware and software issues; o Impacts on customer comfort and/or operations; and o Satisfaction with program experience. Device and system testing for: o Communication ranges and data rates; o Durability and longevity; o Firmware and programming update issues. These concepts are presented in the following illustration. Exhibit APage 90 of 432January 2010 22 Exhibit APage 91 of 432Back Office Systems m I Blisiress Intelligence MK;rost"ategy a 1< 0 e- '. . , Demand Contod Septimization 'oO B " 0"", W3"'/'OU

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