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

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

Robert

Text Box

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

Nevada Power Company NonProfit Agency Grants

January 2010

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Nevada Power Company

Program Data Sheet NonProfit Agency Grants

January 2010

Exhibit A

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Table of Contents Program Summary ......................................................................................................................3 Section A: 2008 Program Results..................................................................................................3

2008 Analysis ........................................................................................................................ 5 2008 Lessons Learned ............................................................................................................. 6

Section B: 2009 Program..............................................................................................................6 2009 Program Execution ......................................................................................................... 6 2009 Results to Date ............................................................................................................... 6

Section C: Proposed 2010, 2011, and 2012 Program ......................................................................7 Rationale and Supporting Data ............................................................................................... 10 Supporting Savings Data ....................................................................................................... 10 20102012 Program Execution ............................................................................................... 12 20102012 Program Management Plan .................................................................................... 12 M&V Objective.................................................................................................................... 13

Section D: Program Economic Evaluation ..................................................................................14 Cost Benefit Analysis ............................................................................................................ 14 Freeridership ........................................................................................................................ 14 Input Data, Description of Sources, and Results of Financial Analysis ........................................ 14 Interpretation of Results ........................................................................................................ 17

Section E: Supporting Documentation .......................................................................................17

List of Tables Table 1: 2008 NonProfit Grants Results ...................................................................................................................... 4 Table 2: Actual Results 2006 through 2008................................................................................................................... 4 Table 3: Firm Verified Load Impact Results ................................................................................................................. 5 Table 4: Budgets, Program Years 20102012 ................................................................................................................ 9 Table 5: Targets, Program Years 20102012 ................................................................................................................. 9 Table 6a: Base Scenario Proposed Targets and Budgets, Program Years 20102012 ............................................................ 9 Table 6b: Low Scenario Proposed Targets and Budgets, Program Years 20102012 ............................................................ 9 Table 6c: High Scenario Proposed Targets and Budgets, Program Years 20102012.......................................................... 10 Table 7a: Base Scenario Program Budget by Category, Program Years 20102012.......................................................... 11 Table 7b: Low Scenario Program Budget by Category, Program Years 20102012.......................................................... 11 Table 7c: High Scenario Program Budget by Category, Program Years 20102012 ......................................................... 12 Table 8a: Base Scenario Cost Test Results 20102012 .................................................................................................. 15 Table 8b: Low Scenario Cost Test Results 20102012 .................................................................................................. 15 Table 8c: High Scenario Cost Test Results 20102012.................................................................................................. 15 Table 9a: Base Scenario Utility Economic Evaluation .................................................................................................. 16 Table 9b: Low Scenario Utility Economic Evaluation................................................................................................... 16 Table 9c: High Scenario Utility Economic Evaluation .................................................................................................. 16

List of Figures None

Exhibit A

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Date: January 2010

Program Name: NonProfit Agency Grants

Program Status: Continued

Program Manager: Tim Kiersz

Primary Contractor(s): Nevada Power

2009 Budget: $100,000

Proposed Budget: 2010: 2011: 2012:

Low $88,000 $88,000 $88,000

Base $ 110,000 $ 110,000 $ 110,000

High $ 138,000 $ 138,000 $ 138,000

TRC B/C Ratios: Low 1.48

Base 1.48

High 1.46

Program Summary This program assists nonprofit organizations with energy efficient construction methods in new and existing building programs. In order to qualify, an agency must be a 501(c)3 entity located within the Nevada Power service area, and the grant money must be used to fund energyefficient retrofits and/or weatherization projects. Construction may involve residential, office and warehouse facilities.

Many nonprofit organizations work with limited budgets and rely on private donations and grants to provide their services. In addition, Nevada Power’s experience has shown that some nonprofit organizations occupy older buildings due to the reduced cost to own or lease. These older buildings generally have significant energy deficiencies and therefore offer a greater opportunity for energy savings. Nonprofit organizations can be greatly impacted by increases in energy costs, and their limited resources may only cover routine and emergency maintenance, without consideration for long term energy reduction. This program assists in identifying areas where the nonprofit organization may incorporate energy savings equipment and construction methods into their building plans to reduce energy costs.

Section A: 2008 Program Results A total of 14 nonprofit organizations received grant awards in 2008 for a total of 20 installed energy efficiency measures. In addition, six organizations received grants in 2007 for 10 energy efficiency measures but did not complete their projects until 2008. The 2007 measurement and variance (M&V) study was not updated and the 2007 projects completed in 2008 were included in the 2008 M&V study. Table 1 provides a summary of the 2008 program year results which include the 2007 projects completed in 2008. Table 2 provides a summary of the program results for the period 2006 through 2008.

The energy efficiency measures included HVAC upgrades, lighting retrofits, LED exit signs, programmable thermostats, solar screens, and wind film. Table 3 details the verified energy and demand provided in Table 1 and also provides a summary of the number and type of energy saving measures installed in 2008.

Exhibit A

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Grants 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 each request. In order for the request to be accepted, it must support a TRC of 1.20 or greater.

Table 1: 2008 NonProfit Grants Results

Target Actual % of Target

Budget $100,000 $77,122 77.1%

Participants 20 20 100.0%

Demand Savings (kW) 116 140 120.7%

Energy Savings (kWh) 225,000 406,189 180.5%

TRC 1.29 2.83 219.4%

Table 2: Actual Results 2006 through 2008

2006 2007 2008 Total

Budget $108,384 $104,050 $77,122 $289,556

Participants 17 16 20 53

Energy Savings (kWh) 146,000 82,283 406,189 634,472

Demand Savings (kW) 86 42 140 268

Exhibit A

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Table 3: Firm Verified Load Impact Results

ECM Count

Annual Savings (kWh)

Partialyr 2008

Savings (kWh)

Critical Peak

Demand Savings (kW)

Direct Lighting 7 144,197

165,202 140

Lighting 7 165,729

HVAC 11 95,404

Fenestration 3 649

Refrigeration 1 210

Custom 1

Total 30 406,189 165,202 140

2008 Analysis The program was successful based on the 2008 program results and the actual expenditures for the program year. The success of the program can be attributed to the following factors:

Nevada Power worked to improve the overall performance of the program by working with nonprofit organizations on improving their evaluation process and incorporating measures that would maximize their energy savings. Furthermore, it addressed a concern regarding the overestimation of program savings by participants in prior program years. Nevada Power reviewed the estimates for reasonableness and compared the estimates with the factors utilized by its M&V contractor and applied a cost effectiveness evaluation prior to approving the projects. This improved the accuracy of the participant’s energy savings estimation.

Nevada Power worked to maintain interest in the program by having a direct mailing to 268 nonprofit organizations within its service territory. This was supplemented with advertisement on Nevada Power’s web site, a press release, and other public outreach efforts. In combination with the education provided to each participating organization, this contributed to a successful program year.

In addition, many of the participants used internal personnel to install efficacy measures to lower their labor cost and, as result, improved the TRC for the program.

Several of the projects started in 2007 were not completed until 2008 and were delayed because of contractor conflicts, nonprofit personnel turnover, and a late start date for these projects. The results of these carryover projects was that the 2007 performance appeared to be less than what actually was accomplished and the 2008 results are overstated in terms of the projects initiated in 2008.

Exhibit A

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2008 Lessons Learned Nevada Power’s effort to improve the participant’s evaluation process and to incorporate energy efficiency measures that were not considered by the participant was very successful in improving the overall performance of the program. Because education is important in the overall success of the program, it may provide an avenue to expand the program. Furthermore, this also addressed a problem attributed to the participant overestimating energy and demand savings.

In order to maintain interest in the program, it is import that the direct mailing to nonprofit organizations be supplemented with advertisements on Nevada Power’s web site, a press release, and other public outreach efforts.

Many participants used internal personnel to lower their labor cost and, as result, improve the TRC for the program. This improvement was attributed to programs where the incentive paid for the entire cost of the program.

Nevada Power’s intent is to complete the approved projects in the year approved. The 2007 projects completed in 2008 were delayed because of contractor conflicts, nonprofit personnel turnover, and approval of the projects in the fourth quarter of 2007.

Detailed information for performance of this program in 2008 is included in the Section B of the 2008 Annual DSM Update Report provided in Exhibit B.

Section B: 2009 Program The goal/objective of this program is to provide assistance to qualifying nonprofit organizations with the installation of energy efficient measures. The nonprofit organization must be a 501(c)3 entity located within Nevada Power’s service area. By providing this service, the grants assist the community by reducing the nonprofit organization’s energy cost and allowing the nonprofit agency to increase its service to the community.

2009 Program Execution The program will continue its efforts to achieve this goal/objective of providing assistance to qualifying nonprofit organizations with the installation of energy efficient measures in new and existing building programs. The following changes and lessons learned have been incorporated in the execution of the 2009 program:

• Nevada Power will continue to target measures that provide significant energy savings and will continue the process of advising participants regarding these measures with higher saving potential. This proved to be successful in 2008 and will continue to be utilized.

• As stated by Nevada Power in Section B of the 2008 Annual DSM Update Report provided in Exhibit B, each grant will be evaluated utilizing a target TRC of 1.20 or greater.

• To insure that projects are completed within the program year, Nevada Power will implement a process to encourage that an approved project is completed by December 1 of the applicable program year. If the program cannot be completed by this deadline date, the project will be moved to the subsequent program year.

2009 Results to Date All grant requests were required to be submitted by May 1, 2009. The review of the grant requests has been completed.

Exhibit A

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Section C: Proposed 2010, 2011, and 2012 Program The strategy for this program is to provide design recommendations and/or grants for selected energy reducing measures. An economic hurdle rate will be used in the evaluation of each grant and grants will be awarded based on whether the project supports a target TRC of 1.20 or greater. The specific grants vary greatly in what is requested (actual ranges are between $1,000 and $10,000) and the actual measures are often unique. Therefore, there is not a specific target kW and kWh savings per measure.

Technical support and energy efficiency information will be made available for new and existing facilities by Nevada Power’s energy consultants. The participating nonprofit will meet with an energy consultant to review their energy use and demands. Suggested energy upgrades will include recommendations based upon the Take Control message of “no cost, low cost and added cost” improvements specific to the program. Energy consultants will visit the nonprofit agencies that request an improvement grant and suggest improvements they may wish to submit in their grant request. Specifically the suggested upgrades will include recommendations for the replacement or substitution of higher efficiency equipment, lighting, and weatherization, and an estimate of the potential cost savings based on similar projects or historical data. Project savings will be in the form of an estimated kWh or percentage savings rather than specific dollar savings. A postconstruction inspection will be conducted upon completion of the improvements.

During the first quarter of each year, letters will be mailed to approximately 300 nonprofit agencies announcing the program and inviting applications. The nonprofit agency will estimate the kW and kWh savings with input from Nevada Power based on the information provided by the nonprofit agencies. These estimates will be confirmed based on factors utilized by the Nevada Power M&V contractor. All of the grants are expected to be awarded during May.

The following summarizes the steps in the program process:

• Invitations for grant requests are sent to approximately 300 Nonprofit organizations.

• Organizations obtain bids from energy efficiency measures from contractors.

• Nonprofit Organizations submit grant requests.

• 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 that their project can be completed by December 1.

• Projects are implemented.

• Nonprofit organization notifies Nevada Power when their project is complete.

• Pre – and Post – meter readings are collected and inputted in Data Store.

• Sites are inspected to verify that measures are installed.

Exhibit A

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The proposed budgets and targets at the base and high scenarios for this program are presented in Table 4 and Table 5. Program details by scenario are shown in Tables 6a, 6b, and 6c.

Invitations for grant requests are sent to Non Profits

Organizations obtain bids for energy efficiency improvement

NonProfit Agencies submit grant requests

Grant requests are reviewed and awarded based on kWh savings And dollars available

Projects are implemented

Non Profit Agencies notify SPPC when project is complete

Pre and post meter readings are collected and inputted into PRISM software to get initial savings

Sites are inspected to see that the measures are installed as claimed

Exhibit A

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Table 4: Budgets, Program Years 20102012

Scenario Budget

TRC 2010 2011 2012

Base $110,000 $110,000 $110,000 1.48

Low $88,000 $88,000 $88,000 1.48

High $138,000 $138,000 $138,000 1.46

Table 5: Targets, Program Years 20102012

Scenario Annual Energy Savings (kWh) Annual Demand Savings (kW)

2010 2011 2012 2010 2011 2012

Base 201,420 201,420 201,420 69 69 69

Low 181,278 181,278 181,278 63 63 63

High 249,760 249,760 249,760 86 86 86

Table 6a: Base Scenario Proposed Targets and Budgets, Program Years 20102012

Total Program – Base Scenario 2010 2011 2012 Budget, Total Program $110,000 $110,000 $110,000

No. of Participants 25 25 25

Demand Savings (kW) 69 69 69 Energy Savings (kWh) 201,420 201,420 201,420

Table 6b: Low Scenario Proposed Targets and Budgets, Program Years 20102012

Total Program – Low Scenario 2010 2011 2012 Budget, Total Program $88,000 $88,000 $88,000 No. of Participants 20 20 20 Demand Savings (kW) 63 63 63 Energy Savings (kWh) 181,278 181,278 181,278

Exhibit A

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Table 6c: High Scenario Proposed Targets and Budgets, Program Years 20102012

Total Program – High Scenario 2010 2011 2012 Budget, Total Program $138,000 $138,000 $137,500 No. of Participants 31 31 31 Demand Savings (kW) 86 86 86 Energy Savings (kWh) 249,760 249,760 249,760

Rationale and Supporting Data The program will continue its efforts to achieve its goal/objective of providing assistance to qualifying nonprofit organizations with the installation of energy efficient measures in new and existing buildings.

Nevada Power proposes that the base scenario represent a continuation of the previously approved program scenario. As detailed in Table 3, which provides a summary of the actual results for the last three program years (20062008), the program has experienced savings that have varied by year due to projects that carry over from year to year. The energy savings for 2008 are not a good base going forward since they contain energy savings for projects that carried over from 2007. The targeted savings for the base scenario have therefore been set close to the average program savings achieved over the last three years. Nevada Power believes that with the program process enhancements listed below this targeted goal is attainable on an annual basis.

• Nevada Power will continue to target measures that provide significant energy savings and will continue the process of advising participants regarding these measures. Furthermore, Nevada Power will ensure that estimated energy and demand savings are consistent with the criteria used by its M&V contractor.

• Nevada Power evaluates each grant proposal utilizing a target TRC of 1.20 or greater.

• To insure that projects are completed within the program year, Nevada Power will implement a process to encourage that an approved project is completed by December 1 of the applicable program year. If the project cannot be completed by this deadline date, the project will be moved to the subsequent program year.

The high scenario incorporates a more aggressive program. Based on program results, a primary problem with expanding this program is the lack of participant knowledge regarding evaluation procedures and energy measures. Nevada Power has implemented a program where successful participants are contacted and provided this information. Nevada Power proposes an increased outreach program at the high scenario that would provide more assistance and training regarding the evaluation process and energy efficiency measures.

Supporting Savings Data Because of the diversity of the energy efficiency measures proposed by the individual nonprofit organizations, the estimated energy and demand savings were based on the historical average for the last three program years (20062009).

The program budget breakout for the base, low and high scenarios are presented in Tables 7a, 7b, and 7c.

Exhibit A

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Table 7a: Base Scenario Program Budget by Category, Program Years 20102012

Program Year 2010 2011 2012

Marketing, Advertising and Tech Demo $1,500 $1,500 $1,500

Implementation Contractor $0 $0 $0

Rebates/Grants $96,500 $96,500 $96,500

Measurement and Verification $3,500 $3,500 $3,500

Customer Research $1,500 $1,500 $1,500

Utility Labor and Overheads $7,000 $7,000 $7,000

Total Program Cost $110,000 $110,000 $110,000

Table 7b: Low Scenario Program Budget by Category, Program Years 20102012




Rebates/Grants $77,300 $77,300 $77,300





Exhibit A

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Table 7c: High Scenario Program Budget by Category, Program Years 20102012




Rebates/Grants $120,240 $120,240 $120,240





20102012 Program Execution The program will continue to provide assistance to qualifying nonprofit organizations with the installation of energy efficient measures in new and existing buildings. The program will incorporate the changes in program delivery process as noted earlier to improve and stabilize program performance.

Technical support and energy efficiency information will be made available for new and existing facilities by Nevada Power’s energy consultants. The participating nonprofit will meet with an energy consultant to review their energy use and demands. Suggested energy upgrades will include recommendations based upon the Take Control message of “no cost, low cost and added cost” improvements specific to the program. Energy consultants will visit the nonprofit agencies that request an improvement grant and suggest improvements they may wish to submit in their grant request. Specifically, the suggested upgrades will include recommendations for the replacement or substitution of higher efficiency equipment, lighting, and weatherization, and an estimate of the potential cost savings based on similar projects or historical data. Project savings will be in the form of an estimated kWh or percentage savings rather than specific dollar savings. A postconstruction inspection will be conducted upon completion of the improvements.

During the first quarter of each year, letters will be mailed to approximately 300 nonprofit agencies announcing the program and inviting applications. The nonprofit agency will estimate the kW and kWh savings with input from Nevada Power based on the information provided by the nonprofit agencies. These estimates will be confirmed based on factors utilized by the Nevada Power M&V contractor. All of the grants are expected to be awarded during May.

Each site will be inspected at the completion of the installation of the energy efficiency measures.

20102012 Program Management Plan As noted earlier, the program has experienced two issues in the past that have detracted from the performance of the program.

Exhibit A

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The first issue is that the projects proposed by the nonprofits frequently overstated the potential savings for a measure in the grant applications due to a lack of understanding. The result is that the program underachieved in terms of energy savings when evaluated. Two program changes have been incorporated in the delivery of the program to address this issue. The first is that Nevada Power will send an energy auditor to assist the nonprofit organizations to assess potential project and associate savings. The second action will be that each grant request be reviewed to determine if it meets the target TRC threshold of 1.20. These changes will minimize the probability that projects will be approved and result in disappointing energy savings.

The second problem that the program has encountered is that a number of nonprofits have not completed their projects in the year in which they were approved resulting in the energy savings being recorded in a different year than the project expenditures. Program management tools have been added to minimize the number of projects that carry over from one year to the next to minimize mismatch of expenditures and energy savings.

20102012 Data Delivery and Tracking Program Data results related to the 2010 – 2012 NonProfit Agency Grants Program will be gathered from participants on a monthly basis. The monthly updated results will be recorded in the Data Store monthly via electronic reporting protocols.

M&V Objective

The EM&V Contractor will perform evaluation, measurement and verification (EM&V) activities to confirm the savings being realized through the NonProfit Agency Grants Program that will be implemented in Southern Nevada.

Approach Estimation of total program savings is based on a ratio estimation procedure, which allows precision/confidence requirements to be met with a smaller sample size. To apply the ratio estimation procedure, the EM&V Contractor will produce two estimates of gross savings for each project in a sample, an expected gross savings estimate (as reported in the program tracking system) and the verified gross savings estimates developed through the M&V procedures. Programlevel gross savings then are developed by applying savings realization rates calculated for sample projects to the programlevel expected savings.

The following equations are used to determine the number of projects to be selected for the analysis sample,

n z cv(y) p 0

2 2

2 =

+ =

N n 1

1 n n 0

0

where n is required sample size ; z is the abscissa of the standard normal curve for a specified level of confidence; p is required precision level; and cv(y) is coefficient of variation for the variable to be

Exhibit A

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estimated (e.g., hours of use). The second equation applies a finite population correction factor to determine final sample size when n o /N is greater than 10%.

Sample Selection The sample should have a sufficient number of projects to estimate the total achieved savings with 10% precision at 90% confidence. Given these precision/confidence requirements, the required sample size increases as the variability of the variable to be measured increases in size. For planning purposes, a cv = 0.5 is assumed. The required sample size (not considering the finite population correction factor) is 68.

For the NonProfit Agency Grants Program, grants are made in the first half of the year. Thus, the population of projects is known. The analysis sample is chosen from this population.

Onsite Surveys and Verifications The EM&V Contractor will conduct onsite visits to the selected sample of sites that installed measures through the program to collect data with which to verify the installation of the measures for which funding was provided. Before visiting a site, the EM&V Contractor’s field personnel will review the documentation for each project at that site to ensure that they have a complete list and description of the measures.

During the onsite visit, the EM&V Contractor’s field staff will verify that the measures recorded in the project’s file were indeed installed, that they were installed correctly, and that they function properly.

M&V Data Store The Nevada DSM M&V Data Store Web Portal, referred to as “Data Store”, is a web portal that has been customized for both Nevada Power Company’s and Sierra Pacific Power Company’s internal use. Its function is to track Demand Side Management (DSM) program performance. The Data Store supports the evaluation, measurement, and verification activities by providing the data needed for sample selection and verification of savings data. The Data Store is “populated” with data provided by the program manager on a monthly basis.

Section D: Program Economic Evaluation

Cost Benefit Analysis The cost/benefit analysis for this program was performed utilizing the PortfolioPro financial modeling software created by the Cadmus Group for Nevada Power and Sierra Pacific Power. This comprehensive modeling software utilizes a stream of avoided costs broken down by each of the 8,760 hours for each year of the useful life of a measure.

Freeridership The most recently completed analysis freeridership and NetToGross Ratios (“NTGR”) was conducted by PA Consulting Group (PA) in 2009. The freeridership rate for this program as determined by PA is 12.7%.

Input Data, Description of Sources, and Results of Financial Analysis A copy of the input data sheets and financial models are provided in Technical Appendix Item DSM2. These figures were all calculated based upon the information contained in this program data sheet and the

Exhibit A

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materials referenced herein. The following tables summarize the results of the financial analysis for all three scenarios.

Table 8a: Base Scenario Cost Test Results 20102012

Cost Test B/C Benefits (NPV) Costs (NPV) Net Benefits CCE $/KWh

Total Resource 1.48 $496,165 $336,217 $159,947 $0.05 Utility 1.82 $554,972 $304,577 $250,395 $0.04 Participant $529,718 ($25) $529,743 $0.00 Ratepayer 0.56 $496,165 $893,102 ($396,937) $0.12 Societal cost 1.66 $559,412 $336,217 $223,195 $0.05

Table 8b: Low Scenario Cost Test Results 20102012


Total Resource 1.48 $396,932 $269,003 $127,929 $0.05 Utility 1.82 $443,982 $243,688 $200,294 $0.04 Participant $423,775 ($20) $423,795 $0.00 Ratepayer 0.56 $396,932 $714,513 ($317,582) $0.12 Societal cost 1.66 $447,530 $269,003 $178,526 $0.05

Table 8c: High Scenario Cost Test Results 20102012

Cost Test B/C Benefits (NPV)

Costs (NPV) Net Benefits CCE $/KWh

Total Resource 1.46 $615,244 $420,272 $194,972 $0.05 Utility 1.81 $688,753 $380,721 $308,032 $0.04 Participant $656,851 ($31) $656,882 $0.00 Ratepayer 0.55 $615,244 $1,111,081 ($495,836) $0.12 Societal cost 1.65 $693,671 $420,272 $273,399 $0.05

Exhibit A

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Table 9a: Base Scenario Utility Economic Evaluation

Utility Results First Year Total Program

Total Costs $109,988 $329,964

Energy Savings (kWh) 187,889 7,327,680

Energy Benefits ($) $7,834 $506,285

Cost of Conserved Energy N/A $0.04

Critical Peak Demand Savings KW

64 N/A

Table 9b: Low Scenario Utility Economic Evaluation


Total Costs $88,000 $264,000





52 N/A

Table 9c: High Scenario Utility Economic Evaluation


Total Costs $137,485 $412,455





80 N/A

Exhibit A

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Interpretation of Results The Total Resource Cost (TRC) Test is the ratio of the discounted total benefits of a program to the discounted total costs over the life of the installed units. The TRC ratios by scenario are:

• Base Scenario = 1.48

• Low Scenario = 1.48

• High Scenario = 1.46

These values indicate this program is beneficial to the Utility and its ratepayers.

It is noted that the cost of conserved energy by scenario are:

• Base Scenario = $0.04/kWh

• Low Scenario = $0.04/kWh

• High Scenario = $0.04/kWh

Section E: Supporting Documentation The M&V Report for 2008 is provided as Technical Appendix Item DSM16.

Exhibit A

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Exhibit A

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Nevada Power Company Energy Education and Consultation

January 2010

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Nevada Power Company Program Data Sheet

Energy Education and Consultation Program January 2010

Exhibit A

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Section B: 2009 Program............................................................................................................10 2009 Program Execution ....................................................................................................... 10 2009 Program Results to Date ................................................................................................ 10

Section C: Proposed 2010–2012 Program....................................................................................12 Rationale and Supporting Data ............................................................................................... 16 Supporting Savings Data ....................................................................................................... 17 20102012 Program Execution ............................................................................................... 18 20102012 Program Management Plan .................................................................................... 19 20102012 Data Delivery and Tracking ................................................................................... 19 M&V Plan ........................................................................................................................... 20

Section D: Program Economic Evaluation ..................................................................................21 Cost Benefit Analysis ............................................................................................................ 21

List of Tables Table 1: Program Year 2008 Results............................................................................................................................ 6 Table 2: Proposed Budgets Summary for the Base, Low and High Program Scenarios ....................................................... 13 Table 3a: 20102012 Base Scenario........................................................................................................................... 14 Table 3b: 20102012 Low Scenario........................................................................................................................... 15 Table 3c: 20102012 High Scenario........................................................................................................................... 16 Table 4a: Base Level Program Budget by Category, Program Years 20102012.............................................................. 17 Table 4b: Low Level Program Budget by Category, Program Years 20102012 .............................................................. 18 Table 4c: High Level Program Budget by Category, Program Years 20102012.............................................................. 18


Exhibit A

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Date: January 2010

Program Name: Energy Education and Consultation

Program Status: Continued/Expanded

Program Manager: Tim Kiersz

Primary Contractor(s): Nevada Power

2009 Budget: $400,000


Low $400,000 $400,000 $400,000

Base $ 475,000 $ 500,000 $ 500,000

High $ 600,000 $ 600,000 $ 600,000

TRC B/C Ratios: Low N/A

Base N/A

High N/A

Program Summary The 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 environmental benefits of conservation. The program is comprised of four distinct measures:

• The Small Commercial Customer Education measure is collaboration between Nevada Power, the Management Assistance Partnership (MAP) and the Nevada System of Higher Education. This measure provides education for those responsible for building operations. The measure offers a series of classes on how to operate buildings efficiently, how to properly maintain energy consuming equipment, and how to develop managementoriented proposals to implement energy efficiency equipment or improvements at their facility.

The training is delivered through a partnership with MAP and utilizes the FOCUS (Facility Operator 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 of senior practitioners and other experts. The curriculum includes managing energy usage in their businesses, proper maintenance processes to achieve and sustain efficient usage of energy, building and equipment upgrades for better energy efficiency, and developing management oriented energy efficiency funding proposals.

Nevada FOCUS is a statewide training and certification program designed for building engineers, facility operators, their crews and other interested parties. The purpose of the Small Commercial Customer Education measure is to develop instate resources for facility energy education at the building operator level and improve energy efficiencies along with indoor air quality for building occupants, employees and patrons. Nevada FOCUS is recognized statewide through continuing education or professional development credit. Upon successful completion of each course, recipients receive 0.7 CEDU (7 PDH) and are issued a certificate of completion.

• The Home and Trade Shows measure provides energy efficiency and conservation education for customers at various shows and community events. Energy education provides no and low cost

Exhibit A

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measures that customers can take to conserve energy and supports the entire portfolio of DSM programs by introducing various DSM programs to customers and by promoting ways they can participate 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 that contain energy efficiency and conservation message materials as well as material promoting DSM programs. A proven list of practices that a customer can use to conserve energy and improve energy efficiency of their home or business is provided in the bags.

• The Residential and Commercial Builder Support and the ENERGY STAR® for New Home measure provide education for builders on the advantage of incorporating energy efficiency measures in new construction and assist in promoting buildings that incorporate energy efficient practices. The education provided home builders emphasizes the benefits of ENERGY STAR® rated homes and provides the latest information regarding updates to that program. Nevada Power is a key participant in the ENERGY STAR® Partners for New Homes, a southern Nevada joint marketing effort which has earned national ENERGY STAR® awards for six years in a row from 2003 to 2008. ENERGY STAR® certification is accomplished through builder commitment to ENERGY STAR® at the EPA and the regional southern Nevada builder associations.

Homes that earn the ENERGY STAR® certification must meet guidelines for energy efficiency set by the U.S. Environmental Protection Agency (EPA). ENERGY STAR® qualified homes are at a minimum 15% more energy efficient than homes built to the 2006 International Efficiency and Conservation Code (IECC). In contrast to codebuilt homes, ENERGY STAR® qualified new homes offer homeowners superior performance and lower monthly energy costs. Homes earn the ENERGY STAR® label by meeting EPA’s guidelines for energy efficiency, as tested by an independent third party. ENERGY STAR® qualified homes can include a variety of energy efficient features, such as more effective insulation, high performance windows, tight construction and ducts, efficient heating and cooling equipment and ENERGY STAR® qualified lighting and appliances.

The ENERGY STAR® Home Program has helped bring leadingedge energy efficiency technologies to southern Nevada and significant energy and demand savings. The ENERGY STAR® requirements are anticipated to increase in 2011 pursuant to the IECC 2009 standards. It is anticipated that EPA plans to release the new ENERGY STAR® qualified homes standards in January 2010. A comparison of the differences between the 2006 and 2009 IECC standards titled “Summary of Major Changes between the 2006 and 2009 IECC” is provided in Technical Appendix Item DSM7.

Nevada Power works with the Las Vegas new home construction community to retain and recruit builders, developers and retailers and to educate consumers on the advantages of purchasing homes constructed to ENERGY STAR® standards. The greater Las Vegas metropolitan area continues to be one of the nation’s premier ENERGY STAR® residential new construction locations due to the large number of builders who have adopted ENERGY STAR® standards and the market share they have attained.

• The Senior Energy Ambassador (SEA) activity will train approximately ten seniors per year. This is a new direction for Nevada Power’s Energy Education and Consultation program. This initiative has been developed with a goal to better reach this more difficult to reach segment of our community and because most senior are living on fixed income, with many in lower income levels. The initial graduates from this program will assist in the development of an outreach program. The graduates of the program will implement this outreach program. The goal of this

Exhibit A

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program is to empower seniors interested in energy efficiency to take an active role to reach further out into the community to educate others on the efficient use of energy and promote available DSM programs. Inviting seniors to be energy ambassadors provides Nevada Power with new outreach capabilities as they are likely to have the time to volunteer and provide education in their existing networks.

Exhibit A

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Section A: 2008 Program Results The summary of results achieved in 2008 is provided in Table 1 by individual measure.

Table 1: Program Year 2008 Results

Program Measure

Program Budget Conservation Metrics

Approved Actual Quantity Target

Quantity Achieved

Residential and Commercial Builder Support

$150,000 $152,678 182 Educated Five ENERGY STAR® Partner and USGBC

LEED Seminars Completed with 245

Educated

32% of all new homes constructed were

certified ENERGY STAR®

7 energy savings analysis for 332 units

28 technical guidance provided for energy

savings

Educational Presentations

17 Presentations completed with

90 educated

Trade and Home Show Support

$100,000 $100,578 56,706 Attendance

20,324 Impacted

87,130 Attendance 76,059 Impacted

Small Commercial Customer Education

$150,000 $144,560 66 Attendees (12 class

sessions leading to Focus

Certification, 2 sessions

concurrently)

24 FOCUS Workshops 132 Attendees Total*

44 Attendees Unique** 44 Graduates**

*”Attendees Total” represents total attendees at all sessions and is repetitive among attendees ** “Attendees Unique” represents unique individuals and not the total number of individuals in all classes *** “Graduates” are those individuals that attended all 12 courses plus the Commissioning course.

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Residential and Commercial Builders Support / ENERGY STAR® for New Home Construction

The Residential and Commercial Builder Support and the ENERGY STAR® for New Home Construction measure provides training for developers, contractors, building officials, and real estate professionals; and recruitment of builders, developers, and retailers to promote ENERGY STAR® homes with prospective customers.

Training Nevada Power cosponsored and provided training for builders, developers, and retailers. Training covered ENERGY STAR® and USGBC LEED standards and Nevada Energy Code requirements. The following highlights the 2008 results.

• Nevada Power cosponsored several training courses for area developers, contractors, building officials and real estate professionals. 245 building representatives and home builders received training in 2008. These training courses included ENERGY STAR® training and 2006 IECC standard training.

• Overall, the demand for energy code training in Nevada was significantly lower in 2008 than in past years. This decrease in participation can be attributed to the economic downturn along with builder resistance to the new, more rigorous ENERGY STAR® home requirements effective in 2006.

Training was provided at two venues during 2008. The two sessions were Southern Nevada Chapter of the Illuminating Engineering Society and American Institute of Architects 2008 Western Regional Conference. At these sessions the lighting requirements under the 2006 IECC were explained in detail. The AIA session covered ASHRAE’s 90.1 – 2004 Standard and Advanced Energy Design Guide for Small Office Buildings.

• Nevada Power provided seven energy savings analysis covering 332 units and technical assistance in the form of 28 consultations and research to builders and contractors.

Recruitment of Builders, Developers, and Retailers Membership in ENERGY STAR® Partners in the state of Nevada for 2008 was down significantly from the end of 2007. Memberships are renewed annually. This downward trend began in 2006 with the housing crisis. Membership of Nevada builders and other partners at the end of 2007 was 36. At the end of 2008 the total was 28. There is a growing reluctance from major builders to continue their support based upon the downturn in the economy and the decline in the building industry. Another contributing factor to this decrease is the departure of many builders from the Las Vegas area because of the housing downturn.

Trade and Home Show Support & Customer Presentations Nevada Power participated in 64 community events and home shows, and 36 educational presentations. The total number of individuals educated in the 36 educational presentations was 1,511.

Pursuant to the Commission’s order in Docket No. 0608020, Table 1 provides the actual number of attendees and the actual number of attendees receiving literature/information. Of the 87,130 attending the 64 home shows and community events, 76,059 were educated regarding energy efficiency and conservation. This number is based on the number of energy information bags distributed at these events.

Exhibit A

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Attendees who received a bag containing energy conservation materials and information were considered and counted as “Impacted.” The number of bags handed out is the indicator on how many customer contacts were made. This has proven a successful way to measure and increase the value of our energy education efforts.


The Small Commercial Customer Education measure provides training for individuals responsible for operating commercial facilities. There were 132 FOCUS attendees in 2008 and 44 received their certificate of completion. Some of the participants attended classes that were of specific interest and did not choose to participate in the certification program. Receiving the completion certificate is a significant accomplishment based on the length and intensity of the training.

Participants from various state and local governments were included in the training in the southern Nevada FOCUS Program. Attendees include facility maintenance employees of Clark County School District, Clark County Government, Nevada National Guard, Regional Transportation District, Clark County Aviation Center, and the private sector including Las Vegas casinos. Of the total number of participants, over 67% of the certifications issued were earned by employees of state and local government agencies sponsored by the Nevada State Office of Energy (NSOE) Grant.

2008 Analysis The implementation and execution of the program was effective in meeting program targets. Based on actual expenditures being slightly less than budget, the program exceeded the targeted number of individuals educated by 84.1% and far exceeded the targeted number of “Impacted” individuals by 274.2%.

This section provides a discussion of how the actual results varied from the program plan in terms of budget and proposed goals.

Residential and Commercial Builders Support Nevada Power utilized 102% or $152,678 of its $150,000 2008 budget. The measure was very effective in obtaining the following results.

• 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 builder representatives who received training in the 17 field training sessions.

• Singlefamily permits issued in Nevada for 2008 new home construction was down 64% (5,826) as compared to 2007 (16,122) singlefamily permits. As reported in the Paragon Consulting Services report titled “2008 NV Energy Companies ENERGY STAR® Year End Report,” this measure achieved a market share of 32% for ENERGY STAR® homes constructed in 2008 despite the dramatic decline in the housing industry. This result compares to 61% in 2007 when the housing decline began to take a toll on the home building industry. The report is provided in Technical Appendix Item DSM7.

• The number of ENERGY STAR® homes resulted in an estimated 10,598 MWh of energy savings or 2,501 kWh per home; kW demand savings of 9,538 kW or 2.4 kW per home; and heating savings of 33,620 MMBtu or 8.46 MMBtu per home.

Exhibit A

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Nevada ENERGY STAR® Partners is a coalition of local residential developers and business partners in collaboration with the EPA. The purpose of this group is to promote the ENERGY STAR® brand and educate the partners on the benefits of an ENERGY STAR® home. This coalition has worked on this goal for the past seven years.

Membership in ENERGY STAR® Partners in the state of Nevada has experienced a significant decrease in the number of builders participating in the program. Membership of Nevada builders and other partners at the end of 2007 was near 36. At the end of 2008 the total was 28, with only 9 builders actively participating in the program. Due to economic conditions in the building industry, support for the ENERGY STAR® Program declined. The number of participating builders peaked in 2006.

Trade and Home Shows The actual expenditures for 2008 were $100,578 or 100% of the 2008 budget. This reflects a more focused and efficient use of the budget dollars. The 2008 effort resulted in nearly a quadrupling of our quantity target impacted.

The positive results for Nevada Power’s Trade and Home Shows measure is directly related to customer concerns regarding rising energy costs. This measure provides an opportunity for Nevada Power to interact directly with customers empowering them to take control of their energy usage and thus better manage their bills. The measure goal is to impart enough knowledge to our customers at the various events which leads to a positive behavioral change in their daily electrical energy use.

Small Commercial Customer Education The measure implementation was effective based on a comparison of actual expenditures to the targeted goal of 66 attendees and the reported annual energy savings. Actual expenditures represented 96.4% of budget. The actual number of attendees of 132 exceeded the targeted goal by 66 and of these attendees 44 received certificates. In addition, annual energy savings of 9,483.2 MWh and 25,963 MMBtus were estimated based on participation in this measure.

Furthermore, the Southern Nevada FOCUS Program was chosen to provide training and certification to key staff members of the City Center construction project. The Commercial Customer Education measure was incorporated in the overall training provided as part of this measure. Nevada FOCUS is a collaborative effort of Nevada Power and the Nevada System of Higher Education (NSHE) and the Management Assistance Partnership (MAP).

2008 Lessons Learned • Participation in the ENERGY STAR® Homes Program has steadily declined due to the sagging

housing industry. In addition to the decline in housing, builder resistance to the new, more rigorous ENERGY STAR® home requirements effective in 2006 has also contributed to the decline in the number ENERGY STAR® homes. It is anticipated that ENERGY STAR® will increase their standards pursuant to the new IECC 2009 standards effective in 2011.

• In order to meet the possibility that the new stimulus plan will require a shift from ASHRAE Standard 90.1 – 2004 to Standard 90.1 – 2007 and from the IECC 2006 code to the IECC 2009 code, Nevada Power will seek partnerships to share in the cost of the required training.

• Nevada Power and the other ENERGY STAR® Partners have been asked to spearhead a national pilot program in the Las Vegas market regarding ENERGY STAR® for high rise residential construction. We are only one of three markets (New York and Wisconsin) to be given this

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opportunity. Participation in this national program will ensure that Las Vegas maintains its leadership in the construction of energy efficient homes.

• The 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 environmental benefits of conservation. However, the program does contribute to energy and demand savings. The number of ENERGY STAR® certified homes produced an estimated 10,598 MWh of energy savings or 2,501 kWh per home; kW demand savings of 9,537 kW or 2.4 kW per home. In addition, the Small Commercial Customer Education measure participants reported that 26 projects produced an annual energy savings of 9,483 MWh per year.

The Energy Education and Consultation Program continues the existing program, which is designed to educate and assist customers, builders, and developers regarding the efficient use of electricity and to inform customers of the environmental benefits of conservation. The program is comprised of three distinct measures: 1) Small Commercial Customer Education; 2) Public Outreach (formerly Trade and Home Shows); and 3) Residential and Commercial Builder Support including the ENERGY STAR® for New Home Program.

Section B: 2009 Program

2009 Program Execution As noted earlier, the 2009 program will continue to be implemented as in 2008. The following summarizes the specific actions that will be taken to maintain and improve the current program.

• Participation in the ENERGY STAR® Homes Program has steady declined due to the sagging housing industry. Nevada Power and its implementation contractors continue to work with regional and national ENERGY STAR® leaders to counteract this decline in participation. Nevada Power will continue to help with marketing, education and outreach for the Nevada ENERGY STAR® Partners’ activities because of the importance in reducing energy and demand requirements

• ENERGY STAR® will be increasing its standard in 2011 and a new emphasis will be placed on builders to improve the efficiency of the homes they build to meet these higher standards. Nevada Power will continue to provide education programs to reflect this change in standards and to overcome builder resistance to this change.

• In order to meet the possibility that the new stimulus plan will require a shift from ASHRAE Standard 90.1 – 2004 to Standard 90.1 – 2007 and from the IECC 2006 code to the IECC 2009 code, Nevada Power will seek partnerships to share in the cost of the required training.

• Nevada Power and the other ENERGY STAR® Partners have been asked to spearhead a national pilot program in the Las Vegas market regarding ENERGY STAR® for high rise residential construction. Southern Nevada is only one of three markets (New York and Wisconsin) to be given this opportunity. Participation in this national program will ensure that Las Vegas maintains its leadership in the construction of energy efficient homes.

2009 Program Results to Date The following summarizes the program results through September 2009.

Exhibit A

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• Residential and Commercial Builders Support ENERGY STAR® for New Homes. Analysis of project plans for 3 projects with a total of 192 units was performed. In addition, technical assistance with energy savings measures was provided in 22 cases.

Nevada ENERGY STAR® Partners also launched a 6month educational and marketing campaign on the benefits of ENERGY STAR® homes and products. Nevada Power supported these efforts with seminars, workshops, public outreach and a fourpage education insert in the Las Vegas Business Press. Nevada Power presented 3 seminars with 89 attendees and participated in 4 public events with an “impacted” total of 241.

• Public Outreach. Nevada Power has conducted 27 seminars/presentations, with an educated total of 562. In addition, Nevada Power has participated in 88 home & trade shows. The total number of attendees was 60,649 with an “impacted” number of 45,578.

• Small Commercial Customer Education. A total of twelve 8 hour classes have been conducted on two tracks, with an average class participation of 27 per class.

Exhibit A

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Section C: Proposed 2010–2012 Program The 20102012 Energy Education and Consultation Program will expand beyond the successful 2007 2009 program. The program will continue to educate and assist customers, builders, and developers regarding the efficient use of electricity; and will continue to inform customers of the environmental benefits of conservation. In expanding the program, the purpose of the program will not change but the impact of the program will increase. The following describes the proposed expansion of the program.

Base Scenario The proposed base scenario provides for the expansion of the Residential and Commercial Training and Support measure, and the addition of a Senior Energy Ambassador measure.

The Residential and Commercial Training and Support measure (formerly called the Residential and Commercial Builder Support and the ENERGY STAR® for New Home measure) provides training for developers, contractors, building officials, and real estate professionals along with the recruitment of builders, developers, and retailers to promote ENERGY STAR® new homes and the installation of energy efficient measures in existing homes with prospective customers. These activities have been limited to new construction in prior years. With the downturn in new construction and a renewed interest in home improvements, Nevada Power proposes to expand this measure to include training for contractors primarily involved in home renovation.

The Senior Energy Ambassador (SEA) activity will train approximately ten seniors per year. The initial graduates from this program will assist in the development of an outreach program. The graduates of the program will implement this outreach program. The goal of this program is to empower seniors interested in energy efficiency to take an active role to reach further out into the community to educate others on the efficient use of energy and promote available DSM programs. Inviting seniors to be energy ambassadors provides Nevada Power with new outreach capabilities as they are likely to have the time to volunteer and provide education in their existing networks.

Low Scenario The low scenario proposal maintains the current plan at its current budget level of $400,000 and existing measures: 1) Small Commercial Customer Education; 2) Public Outreach; and 3) Residential and Commercial Training and Support including the ENERGY STAR® for New Home Program. The targeted goals have been increased to reflect the success of the program. The new targets were based on the actual results over the past three years, 20062008, and also considered the current housing downturn in Las Vegas.

High Scenario The proposed high scenario would expand the Residential and Commercial Training and Support training to include the new IECC 2009 standard training and the subsequent changes to the ENERGY STAR® requirements. This training is important because Nevada Power anticipates continued builder resistance to these new standards.

The program will be expanded to incorporate an Education Training measure. This Education Training measure has previously been conducted in Sierra Pacific Power Company’s California service territory. The program provides instruction for teachers who then provide the energy training to their students. The measure has proven to be very successful in California. An evaluation of this program titled, “Energy Efficiency Educational Outreach Program and Education Impact Assessment,” can be is provided as Technical Appendix Item DSM7.

Exhibit A

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A summary of the proposed budgets at the base, low and high levels for this program are presented in Table 2. Program details by level are shown in Tables 3a, 3b, and 3c.

Table 2: Proposed Budgets Summary for the Base, Low and High Program Scenarios

Level Budget

2010 2011 2012

Base $475,000 $500,000 $500,000

Low $400,000 $400,000 $400,000

High $600,000 $600,000 $600,000

Base Scenario Nevada Power proposes an expansion of the Residential and Commercial Training and Support, and a new Senior Energy Ambassador measure. The expansion and addition of a new measure to the existing program will form the new base for the 20102012 program.

Residential and Commercial Training and Support

Nevada Power proposes to expand this measure to incorporate training to increase the limited supply of qualified home performance contractors. With the economic downturn of the construction of new homes, home renovations can be a large component of residential construction and provides many opportunities for improving the overall efficiency of existing homes.

Trained and qualified home performance contractors are needed in southern Nevada to improve the energy efficiency of a significant number of existing homes. Many contractors are already in the home performance field, but lack the energy principles in relation to building design. Nevada Power plans to train a portion of its energy education employees to be “mentors”. These mentors will teach and certify others according to the certification requirements of BPI and HERS. Nevada Power will organize training sessions and provide facilities to assist in minimizing training costs to the contractors.

Senior Energy Ambassador

The Senior Energy Ambassador (SEA) will train ten seniors each year. The initial SEA graduates will design an outreach program within the first month after graduation and, subsequently, along with subsequent graduates will implement the program. By the end of the first year, the goal is to produce senior booklets on energy conservation designed by the SEAs with the information they have gathered during their "seniors talking to seniors" outreach. The second year focuses on monitoring and evaluation for measure enhancement as well as further training for SEAs.

Nevada Power will work with established senior volunteer agencies, such as Senior Corps, to deliver this measure. The purpose of this program is to:

• Train seniors to become Senior Energy Ambassadors. • Have the SEAs design tools to engage other seniors to become energy efficiency advocates.

The key word for this measure is "engage." Nevada Power will turn interest into action when it comes to energy conservation for senior citizens. Encouraging seniors to be energy ambassadors provides Nevada

Exhibit A

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Power with new outreach capabilities. The value of seniors talking to seniors is immense and should not be discounted. Seniors are an excellent resource in that they have the time to incorporate their experience and existing networks. Senior involvement in designing this plan makes good business sense and will contribute to the success of the program. This program will also form an alliance with existing senior initiatives and therefore will enhance Nevada Power’s efforts.

The budget and targets for the base scenario are provided in Table 3a.

Table 3a: 20102012 Base Scenario

Measure 2010 2011 2012

Trade and Home Shows

$100,000


$100,000


$100,000


Small Com Customers Education

$150,000

100 Participants 40 Certifications

$150,000


$150,000


Res and Com Training and Support

$175,000

300 Educated

$200,000

300 Educated

$200,000

300 Educated


$50,000

10 Trained (SEA) 260 Impacted

$50,000


$50,000


Low Scenario The low scenario proposal maintains the current plan at its current budget level of $400,000 and existing measures: 1) Small Commercial Customer Education; 2) Public Outreach; and 3) Residential and Commercial Training and Support. The targeted goals have been increased to reflect the success of the program. The new targets are based on the actual results of the measures over the past three program years.

The budget and targets for the low scenario are provided in Table 3b.

Exhibit A

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Table 3b: 20102012 Low Scenario

Measure 2010 2011 2012

Public Outreach $100,000


$100,000


$100,000



$150,000


$150,000


$150,000



$150,000

300 Educated

$150,000

300 Educated

$150,000

300 Educated

High Scenario The proposed high scenario would expand the Residential and Commercial Training and Support measure to provide training on the new IECC 2009 standards and the subsequent changes to the ENERGY STAR® requirements. Furthermore, the program will be expanded to incorporate an Education Training measure.

IECC 2009 Standard Training

Nevada Power proposes to include training that addresses the new IECC 2009 standards and the subsequent changes to the ENERGY STAR® requirements, and builder resistance to these standards.

The ENERGY STAR® certification program has resulted in significant energy and demand savings. The 2008 results provided an estimated energy savings of 10,598.0 MWh or 2,501 kWh per home and a kW demand savings of 9,537.6 kW or 2.4 kW per home. The 2008 results were impacted by the downturn in housing and builder resistance to the IECC 2006 standards. The IECC has issued new standards (2009), which will cause ENERGY STAR® to revise their standards. Nevada Power proposes to specifically direct funding to training on the new IECC 2009 standards in order to convince builders to incorporate these changes in their construction and participate in the ENERGY STAR® certification program.

Education Training

The proposed Education Training measure was very successful in Sierra Pacific’s California service territory. This measure provides energy efficiency training to teachers and students. The teachers are provided instruction on the course material and provide the training to their students. Technical Appendix Item DSM7, Energy Efficiency Educational Outreach Program and Educational Impact Assessment, describes the energy efficiency and conservation training program and was prepared by Culver, who was the implementation contractor.

Exhibit A

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In order to determine the effectiveness of the training, sixteen classes participated in pre and posttesting. A total of 271 student’s test scores were evaluated. Based on the average pre and posttest scores, the average score increased from 66% to 84% for an overall improvement of 27%. According to Culver, this result was consistent with results experienced in other utility school based programs and represents a significant increase in the student’s knowledge of energy efficiency.

The budget and targets for the high scenario are presented in Table 3c.

Table 3c: 20102012 High Scenario

Measure 2010 2011 2012

Public Outreach (formerly Trade and Home Shows

$100,000


$100,000


$100,000


Small Com Customers Education

$150,000


$150,000


$150,000


Res and Com Training and Support

$250,000

350 Educated

$250,000

350 Educated

$250,000

350 Educated

Education Training $50,000

7,500 Impacted

$50,000

7,500 Impacted

$50,000

7,500 Impacted


$50,000


$50,000


$50,000


Rationale and Supporting Data Energy Education continues to be a highly desired deliverable based upon energy efficiencyoriented interest groups. Nevada Power believes this program is a strong contributor to spillover, which accounts for customers undertaking energy efficiency measures outside the utility programs. Education also contributes to market transformation in which customer awareness leads to behavioral changes related to energy usage. Without energy education, marketing costs for other DSM programs would rise due to the need for each program to market both the benefit of buying, building or living efficiently in addition to promoting the details of each program.

Exhibit A

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Supporting Savings Data There is no methodology currently available to quantify all the energy savings directly attributable to Energy Education & Consultation. However, Nevada Power continues to explore ways of capturing this data. Identifying the number of customers that receive energy efficiency materials will allow the utility to conduct surveys to determine the number of customers that took action as a result of receipt of that information. Maintaining contact with graduates of the many educational seminars and conferences, and participants in the Nevada FOCUS Program proves essential in determining if customers respond positively to the materials provided and what improvements can be made to evoke further action toward energy efficiency. The data received as a result of the survey conducted by the instructors for Nevada FOCUS northern Nevada indicates approximately 1 million kWh savings is attributable to projects generated 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. Nevada Power will continue to investigate methodologies for capturing and quantifying energy savings attributable to Energy Education & Consultation and report those findings in future DSM reports.

Tables 4a, 4b, and 4c provide a breakout of the budget by category for the base, low, and high scenarios of the program.

Table 4a: Base Level Program Budget by Category, Program Years 20102012


Marketing, Advertising and Tech Demo

$158,230 $158,230 $145,230

Implementation Contractor $195,645 $199,645 $207,645

Rebates $0 $0 $0





Exhibit A

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Table 4b: Low Level Program Budget by Category, Program Years 20102012



$93,000 $93,000 $93,000


Rebates $0 $0 $0





Table 4c: High Level Program Budget by Category, Program Years 20102012



$184,500 $163,500 $137,500


Rebates $0 $0 $0





20102012 Program Execution The implementation process consists of continually identifying the most costeffective opportunities to influence customers in all markets and designing communication, education collateral, presentations and tools that are both customerfriendly and proven effective in moving customers to action.

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 be consistent with the descriptions provided earlier.


Exhibit A

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This measure seeks builder support for Nevada Power’s efforts in energy education for home construction above minimum energy standards and utilizing that support in various communication tools to positively influence builders who are not currently participating.

This measure will also continue to participate with builder organizations at trade shows and builder showcases to illustrate the benefits of how energy efficient construction practices will result in greater awareness of and compliance with those standards.

Public Outreach (formerly Trade & Home Show Support) A continued review will be made of the various opportunities to interact with customers and selectively participate in the most promising of those events where the energy efficiency and conservation message will be positively received.

Nevada Power will continue to test ways of increasing customer participation in Nevada Power’s displays at various public events including home and trade shows. Further, Nevada Power will work to engage customers in direct conversation and assure that customers are introduced to and take the various pieces of literature available in the bags provided at the event.

Small Commercial Customer Education Nevada Power will continue to work with MAPNV to assure that the course has an increasing emphasis on and attention to energy efficiency. Nevada Power will determine the course schedule based on the needs of facility managers and building operators.

Nevada Power will continue to capture participant evaluations and attempt to quantify the savings from energy efficiency programs undertaken as a result of operator participation in Nevada FOCUS.

20102012 Program Management Plan The delivery of the Energy Education and Consultation Program will be managed by Nevada Power’s program manager to assure maximum customer impact and compliance with the stipulation approved by the Commission’s order in Docket 0608020.

One measure that is managed differently from all others is the Small Commercial Customer Education measure which is managed by MAPNV (Manufacturing Assistance Program of Nevada). Sierra consults with MAPNV on the course selection and the energy efficiency information that is included within the course selections. MAPNV then reports to Nevada Power’s program manager.

20102012 Data Delivery and Tracking Data for each measure is maintained in EXCEL spreadsheets that once verified and validated are then input into the Data Store. Each program manager is responsible for collecting the required data points.

The Residential and Commercial Training and Support measure data will be maintained by the program manager and that manager will update the Data Store on a monthly basis regarding:

o The number of builder and/or contractor presentations. o The number of attendees at each presentation. o The number and type of builder/contractor communications and the reach of those

communications. o The number of ENERGY STAR® Homes certified.

Exhibit A

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The Public Outreach (formerly Trade and Home Show Support) measure data (in compliance with the stipulation approved by the Commission’s order in Docket 0608020) will be collected by the program manager. The following data points will be recorded on a monthly basis within the Data Store:

o The number of Actual Customer Contacts captured in the following categories: § The number of customers attending a class or presentation. § The number of customers visiting a public event and receiving a bag of energy

efficiency information and reporting the number of bags received at a public event and a customer presentations separately.

§ The total event attendance for each reported event.

The Small Commercial Customer Education measure data will include:

o Data reported by MAPNV representatives to Nevada Power’s program manager following conclusion of each class. Sierra will verify this data.

§ The number of participants enrolled in each class. § The number of graduates in each class. § The number of graduates of the entire portfolio of twelve classes required to

graduate and receive certification.

o Nevada Power will also survey participants in order to:

§ Create a report on each energy efficiency project undertaken as a result of participation along with the actual/projected energy and capacity savings attributable to those projects.

§ Data collection and an evaluation of project participation satisfaction will be completed by Nevada Power on an annual basis at the end of the program year.

M&V Data Store The Nevada DSM M&V Data Store is a web portal based program that has been customized for Nevada Power Company’s internal use. Its function is to track Demand Side Management (DSM) Program performance. Nevada Power uses this management and tracking tool throughout the year to ensure that the planned investments provide clear value. The Data Store also supports the evaluation, measurement, and verification activities by providing the data needed for sample selection and verification of savings data.

M&V Plan

EM&V Objective The EM&V Contractor will evaluate the education measures. The evaluation plans address the market and process issues for the Energy Education and Consultation Program. The evaluation will embed as much data collection into the program process as possible to provide ongoing feedback to the programs as well as establishing a baseline for further evaluation. In a few cases where participants are identifiable, the EM&V Contractor will recommend some retrospective evaluation.

The evaluation plans focus less on how the training is delivered and satisfaction with it and more on behaviors or anticipated behaviors that are generated in response to education events. This allows some assessment of the effectiveness of educational effort that can help to decide how to improve the existing

Exhibit A

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education programs and where to put education resources in the future. If it can be demonstrated that education causes changes in relevant energy behaviors, the EM&V Contractor can reasonably assume that there will be some level of savings.

Approach The EM&V Contractor will develop a series of 8 X 5 card surveys for different types of settings/events, for example, trade and home shows, nonenergy events such as fairs and community events, and public presentations at places such as service clubs and other venues. These card surveys are designed to take no more than 2 – 5 minutes and would be administered at random at large events and to populations at the conclusion of presentations at smaller events. At large events a third party would stop attendees at random 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 of the card surveys can be used to keep the surveys short while obtaining a broader range of information.

Sample Selection The EM&V Contractor will conduct a random sample for each Energy Education program. The sample sizes will be determined as necessary to reach confidence intervals on these samples of 90 ± 10.

Surveys and Verifications The EM&V Contractor will conduct interviews with key players. This will include Nevada Power Energy Education staff and others who serve as educators at events. The purpose of these interviews will be to secure more indepth information about procedures, methods, and educational content. It is important to obtain the content of the displays, sample materials that are include in the giveaway bags, and slides and handouts that may be used in conjunction with presentations. The discussions will include anticipated changes to the content, presentation formats, and operation of the program. The interviews will also cover the types of events, the typical participants, and the typical responses to displays, presentations and giveaways.

The EM&V Contractor will review the visuals, information and handout materials as well as the information from the interviews. These will be associated with particular types of events. This review will be used as input to the surveys.

The EM&V Contractor will also prepare packets of surveys for the presenter to carry and use at smaller events. The packets will include copies of the survey, pens, and other items needed to complete the surveys. Presenters will be asked to recruit someone from the host organization to assist with the distribution and collection. The surveys will be placed in close proximity to the respondents. At events were respondents are sitting at tables, they will be placed on tables prior to the start of the event. At other events they will be distributed with the giveaway bags. The host will collect the surveys as people leave the event.


Cost Benefit Analysis The Energy Education and Consultation Program does not result in easily quantifiable savings, therefore no cost benefit analysis can be completed for this program. However, the program does play a contributing role in achieving the savings across the entire DSM portfolio as described in previous sections of this program data sheet.

Exhibit A

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Exhibit A

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Nevada Power Company Low Income Weatherization Program

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Low Income Weatherization Program January 2010

Exhibit A

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Exhibit A

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2008 Analysis ........................................................................................................................ 5 Low Income Weatherization .................................................................................................... 5 Conclusions and Recommendations .......................................................................................... 6


Section C: Proposed 2010–2012 Program......................................................................................8 Low Income Weatherization for Single and MultiFamily Residential Customers ......................... 10 Rationale and Supporting Data ............................................................................................... 10 Supporting Savings Data ....................................................................................................... 10 20102012 Program Implementation Plan ................................................................................ 11 20102012 Program Management Plan .................................................................................... 11 M&V Plan ........................................................................................................................... 11 M&V Data Store .................................................................................................................. 13



List of Tables Table 1: 2008 Program Year Results........................................................................................................................................ 5 Table 2: Targets and Budgets, Program Year 2009................................................................................................................... 6 Table 3a: Budgets, Program Years 20102012.......................................................................................................................... 8 Table 3b: Targets, Program Years 20102012........................................................................................................................... 9 Table 4a: Base Scenario Proposed Targets and Budgets, Program Years 20102012.................................................................. 9 Table 4b: Low Scenario Proposed Targets and Budgets, Program Years 20102012 .................................................................. 9 Table 4c: High Scenario Proposed Targets and Budgets, Program Years 20102012.................................................................. 9 Table 5a: Base Scenario Program Budget by Category, Program Years 20102012 .................................................................10 Table 5b: Low Scenario Program Budget by Category, Program Years 20102012..................................................................11 Table 5c: High Scenario Program Budget by Category, Program Years 20102012 .................................................................11 Table 6a: Base Scenario Cost Results 20102012 ....................................................................................................................14 Table 6b: Low Scenario Cost Results 20102012.....................................................................................................................14 Table 6c: High Scenario Cost Results 20102012....................................................................................................................14 Table 7a: Base Scenario Utility Economic Evaluation .............................................................................................................15 Table 7b: Low Scenario Utility Economic Evaluation .............................................................................................................15 Table 7c: High Scenario Utility Economic Evaluation ..............................................................................................................15


Exhibit A

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Exhibit A

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Date: January 2010

Program Name: Low Income Weatherization Program

Program Status: Continued/Expanded

Program Manager: To Be Determined

Primary Contractor(s): Honeywell

2009 Budget: $2,880,000


Low $2,400,000 $2,400,000 $2,400,000

Base $ 3,000,000 $ 3,000,000 $ 3,000,000

High $ 3,750,000 $ 3,750,000 $ 3,750,000


Base 0.86

High 0.86

Program Summary Nevada Power’s Low Income Weatherization Program facilitates the installation of energy efficiency measures in singlefamily and multifamily homes of residential customers in the most need, those with incomes between 150 percent of the federal poverty level and 80 percent of county median income.

The program’s objective is to provide weatherization improvements to homes and apartments to make them more energy efficient.

This proposed program for the 20102012 action plan period is similar to that proposed and approved by the Commission in the Nevada Power 2006 Integrated Resource Plan where the company proposed utilizing an outsourced contractor to implement the program. The outsourced delivery of the program resulted in a significant improvement in the performance of the program in terms of energy savings achieved per dollar invested.

The proposed Low Income Weatherization Program budget is a modest expansion when compared to the approved Low Income Weatherization Program of 2006 Integrated Resource Plan.

Section A: 2008 Program Results In order to increase the reach of its Low Income Weatherization Program, Nevada Power proposed in its 2006 Integrated Resource Plan, Docket No. 0606051, to outsource a portion of this program. The Commission approved this change to the Low Income Weatherization Program, but directed Nevada Power to coordinate with the Division of Housing. This ensured that outsourcing would serve to complement the efforts of the existing program provider and maximize the level of low income customer participation. This program also provided weatherization assistance to customers with incomes above 150 percent of poverty guidelines and below 80 percent of the county median income living in singlefamily, multifamily, and mobile homes.

Exhibit A

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This program also provides energy education to customers who receive weatherization assistance. The education is provided on site at the time the weatherization crew is at the home to provide the weatherization improvements. Educational materials are provided to the customer and each measure being installed is fully explained by the on site auditor.

A total of 681 homes received services in 2008 under the Nevada Power Low Income Program. These homes include 278 singlefamily homes, 61 mobile homes, and 342 multifamily homes. The measurement and verification (“M&V”) analysis indicates that the program provided annual energy savings totaling 1,463,601 kWh. Peak energy savings totaled 485,204 kWh per year. Critical peak demand savings totaled 563 kW per year.

There is an additional impact to natural gas consumption for homes that utilize natural gas for house heating and/or water heating. Therefore, measures such as water heater blankets and low flow showerheads, weather stripping and other shell improvements provided natural gas savings for those customers with gas water heaters. Verified natural gas savings totaled 8,678 therms per year.

The 2008 program was delivered by an outsourced contractor and a subgrantee. Weatherization improvements installed included additional insulation, weatherstripping of doors and windows, fluorescent lighting, windows, refrigerators, sun screens, thermostats and water heater blankets.

Table 1: 2008 Program Year Results

Total Program Target Actual Variance Budget, Total Program $2,200,000 $1,517,046 69.0%

No. of Installed Measures 940 681 72.4%

Demand Savings (kW) 487.7 563 115.4%

Energy Savings (kWh) 2,273,757 1,463,601 64.4%

TRC 0.92 0.54 58.7%

2008 Analysis

Low Income Weatherization A total of 408 homes received services in 2008 under the outsourced weatherization measure. These homes include 229 singlefamily homes, 31 mobile homes, and 148 multifamily homes. The M&V analysis indicates that this program provided annual energy savings totaling 1,112,343 kWh. Critical on peak demand savings totaled 378 kW per year.

The outsourced weatherization measure utilized 88 percent of the approved budget and achieved 74 percent of the energy and demand targets respectively. In the single and multi family program for 2008 a total of 408 units received weatherization measures. This increase of customers served through the implementation of the 2008 Low Income Weatherization Program was an improvement over the 2007

Exhibit A

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program year activity of 371 units. The increased number of housing units served in the 2008 program year is due in a large part to improving the customer outreach and getting the new name for the program known by our customers

A total of 273 homes or 144% of the targeted goal received services in 2008 under the Low Income Subgrantee 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 energy savings of 351,258 kWh or 73.9% of the targeted goal and a critical peak demand reduction of 184.7 kW per year.

The Low Income Air Conditioning Replacement measure was discontinued in 2008 due to the poor cost benefit results that were experienced in 2007.

Conclusions and Recommendations This program should be continued and modestly expanded to allow the installation of more energy efficient measures for those customers most in need of energy efficiency assistance. In 2009, the program will provide for the installation of more attic insulation to further decrease the air conditioning cost for the low income homeowner. The expanded air conditioning tuneup measure to make the units operate more efficiently. A duct sealing program will be initiated to provide additional energy savings. The additional measures will allow for more kWh savings to be realized and more customers will be served with the proposed budget increase. The low income customers in Southern Nevada have been identified by the State of Nevada Housing Division to exceed 300,000. The contractor’s marketing plan has been successful in identifying participants for the program Through August of 2009 the implementation contractor has installed energy savings measures totaling 1,678,592 kWh or 57 percent of the annual goal utilizing 59 percent of the program budget.

An analysis of this measure for 2007 determined that the achieved Total Resource Cost (“TRC”) for 2007 is 1.11. The TRC for the 2008 program using the 2008 M&V report is 0.54. Additional detail regarding the performance of this program is included in Section D, the 2009 Annual DSM Update Report, provided as Exhibit B.

Section B: 2009 Program Pursuant to the paragraph 42 of the Commission’s Order for Nevada Power’s 2007 Annual Demand Side Management Update Report (Docket No. 0708016), Nevada Power discontinued the State Project Support Weatherization Subgrantee measure in 2009.

Table 2: Targets and Budgets, Program Year 2009

Total Weatherization Program 2009

Budget, Total Program $2,880,000

No. of Installed Measures 1,000

Demand Savings (kW) 555

Energy Savings (kWh) 2,960,634

Exhibit A

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2009 Program Execution The 2009 program year will be the first year that the program will be delivered exclusively by the implementation contractor. In program years 2005 to 2008 the program was split between the implementation contractor and the subgrantees to the Nevada State Housing Division. Starting in 2009, a CO detector is installed in every gas heated home.

2009 Results to Date With the expanded 2009 budget it is anticipated that this program will achieve improved performance and will exceed the 2008 results. For the first eight months of the 2009 program year, the estimated kWh savings achieved by weatherization improvements is 1,678,592 kWh. The contractor has obtained and trained additional personnel to meet the expanded program as compared to 2008.

Exhibit A

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Section C: Proposed 2010–2012 Program Nevada Power recommends that the 2010 budget for the Low Income Weatherization Program be set at the expanded level at $2,900,000 and an additional $100,000 to conduct a community pilot weatherization program with the Nevada Housing Division as recommended by the DSM Collaborative members.

The proposed program for the 20102012 action plan period will continue the current outsourced approach being implemented in 2009 along with the addition of a community pilot project to be implemented and funded jointly with the Nevada Housing Division. This outsourced program will provide weatherization assistance to customers with incomes above 150 percent of poverty guidelines and below 80 percent of the county median income living in singlefamily, multifamily, and mobile homes. The income guidelines for the community pilot match the Housing Divisions Federal Poverty Low Income guidelines. These measures will provide energy education to customers who receive weatherization assistance. The education is provided on site at the time the weatherization crew is at the home to provide the weatherization improvements. Educational materials are provided to the customer and each measure being installed is fully explained by the on site auditor.

Health and Safety Measures that are provided with each weatherization include a combustion gas test, CO test of the premises, smoke detectors and a blower door test.

The goal of the community pilot project is to explore an alternative mode of service delivery in which the Housing Division addresses health and safety issues and the Utility addresses energy efficiency issues. The intent is to improve the cost effectiveness for the DSM contribution such that it consistently enjoys a positive costs benefit. The funds provided by Nevada Power will be focused on costeffective energy efficient measures and the funds from the Housing Division will be directed at health and safety measures.

An overview of the proposed budgets and targets at the base, low and high scenarios for this program are presented in Table 3a and Table 3b. Program target details by scenario are provided in Tables 4a, 4b, and 4c.

Table 3a: Budgets, Program Years 20102012

Scenario

Budget

TRC 2010 2011 2012 Base $3,000,000 $3,000,000 $3,000,000 0.86 Low $2,400,000 $2,400,000 $2,400,000 0.86 High $3,750,000 $3,750,000 $3,750,000 0.86

Exhibit A

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Table 3b: Targets, Program Years 20102012

Scenario

Annual Energy Savings (kWh) Annual Demand Savings (kW)

2010 2011 2012 2010 2011 2012

Base 3,156,551 3,156,551 2,108,988 895 895 598

Low 2,525,241 2,525,241 1,687,262 716 716 478

High 3,945,689 3,945,689 2,636,147 1,119 1,119 747

The proposed budget breakdown for base, low and high scenarios are provided in Tables 4a, 4b, and 4c.


Total Program – Base Scenario 2010 2011 2012 Budget, Total Program $3,000,000 $3,000,000 $3,000,000 No. of Installed Measures 2,332 2,332 2,909 Demand Savings (kW) 895 895 598 Energy Savings (KWh) 3,156,551 3,156,551 2,108,988


Total Program – Low Scenario 2010 2011 2012 Budget, Total Program $2,400,000 $2,400,000 $2,400,000 No. of Installed Measures 1,866 1,866 2,327 Demand Savings (kW) 716 716 478 Energy Savings (kWh) 2,525,241 2,525,241 1,687,262


Total Program – High Scenario 2010 2011 2012 Budget, Total Program $3,750,000 $3,750,000 $3,750,000 No. of Installed Measures 2,915 2,915 3,636 Demand Savings (kW) 1,119 1,119 747 Energy Savings (kWh) 3,945,689 3,945,689 2,636,147

Exhibit A

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Low Income Weatherization for Single and MultiFamily Residential Customers This Low Income Weatherization Program provides weatherization improvements to make homes and apartments more energy efficient for customers with incomes between 150 percent of poverty and 80 percent of county median income. The customers that fall into this income category cannot receive weatherization improvements by the Nevada Housing Division since their annual income exceeds the guidelines for the weatherization program funded by the UEC Funds and federally distributed funds administrated by the Nevada Housing Division. Weatherization measures include insulation, refrigerators, ceiling fans, solar screens, compact fluorescent lamps, programmable thermostats, air infiltration, windows, water heater blankets, total building solutions, and other measures. Measures to be installed are based on need at each location and are provided at no cost to the customer.

Rationale and Supporting Data Although the Low Income Weatherization Program has struggled with meeting targets in the past, the outsourced mode of delivery has demonstrated improved overall program performance and while the performance in 2008 was not quite that demonstrated in 2007 this mode of delivery has demonstrated solid success in terms of improved program performance. The measured benefits of this program coupled with the societal benefits that are so difficult to quantify make this a valuable program to the low income customers and the community.

Supporting Savings Data The estimated energy savings for the 20102012 action plan period were calculated using the energy savings per dollar as experienced in 2008. The demand savings was calculated within the PortfolioPro model.

Nevada Power has also incorporated the gas benefits of 21 therms/customer gas savings based on 2008 M&V results in performing the cost effectiveness analysis for this program.




Implementation Contractor $2,608,696 $2,608,696 $2,608,696



Total Program Cost $3,000,000 $3,000,000 $3,000,000

Exhibit A

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20102012 Program Implementation Plan The implementation process will be the same as the current process with the utilization of an outsourced contractor to implement the installation of energy efficient weatherization measures. The implementing contractor will be responsible for identifying participants. The implementation contractor will conduct a survey of each home and follow with the installation of weatherization measures that were identified during the survey.

20102012 Program Management Plan Nevada Power’s program manager will work collaboratively with the outsourced contractor to ensure that the program is achieving its goals and to address any potential concerns.

M&V Plan

M&V Objective

The evaluation, measurement and verification (“EM&V”) Contractor will perform activities to confirm the savings being realized through the Low Income Weatherization Program that Nevada Power is implementing in Southern Nevada.

Approach The EM&V approach to determine the gross savings associated with particular measures installed through the Low Income Weatherization Program has several aspects.

Exhibit A

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• The first aspect of the analysis is an exploratory data analysis that makes use of billing data for all program participants. This analysis is directed at identifying major gross changes in electricity use that can be attributed to measures installed for lowincome households.

• The second aspect of the statistical analysis, generally multiple regression analysis, involves using longitudinal and crosssectional comparisons of energy consumption before and after installation of energy efficiency measures to determine how electricity use changed after a measure was installed.

• The third aspect of the analysis is to incorporate engineering estimates of energy use into the billing analysis. This stage of the analysis requires independent, engineeringbased estimates of energy use and savings associated with particular conservation measures. The EM&V Contractor will develop these independent, engineeringbased estimates of savings through engineering calculations or through simulations with their energy analysis models.

By using these three types of analysis, the EM&V contractor can “triangulate” the estimates of gross savings attributable to measures installed in the houses of lowincome customers.

Sample Selection The EM&V Contractor will use monthly observations. The model has several observations on each participant house. This has three significant benefits. First, the precision associated with these models is high. Second, the model can give significant results even if a small number of houses are in the model. This latter feature is important for this program where there may not be sufficient participants to meet the target sample size, particularly for some individual measures.

The EM&V Contractor will use data for all participants in the billing analysis regressions, but the actual sample sizes will depend on the quality of the billing data. The advantage of billing analysis that uses existing data is that marginal costs associated with larger samples are negligible relative to the effort required to conduct other aspects of the analysis for example, data cleaning routines, model specification, and interpretation of results.

Additionally, a sample will be selected for onsite verification of measure installation. Program participants will accumulate over time as the program is implemented. For this reason, a systematic sampling approach will be used to select sample sites as program implementation proceeds. Sample selection is spread over the entire implementation period. The sample design the EM&V Contractor will use for selecting program projects allows estimates of savings to be determined with ±10% precision at the 90% confidence level for the program.

M&V Analysis Methods The EM&V Contractor will use degreehours instead of degreedays to provide a more representative measure of the effects of weather conditions. Depending on their energyefficiency characteristics and the magnitudes of their solar and internal heat gains, buildings differ in the temperatures at which they begin to require heating or cooling. The degree hours used for a house are calculated to match the periods of time covered in the billing records.

The EM&V Contractor will use a “fixedeffects” specification for the panel model. That is, when the data are pooled across customers, the EM&V Contractor will apply a least squares dummy variable (“LSDV”) covariance estimate procedure. In this approach, a binary dummy variable is created for each customer in the sample, and the full set of these dummy variables is included in the regression analysis.

Exhibit A

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This covariance approach has the advantage of bringing all of the sample information together in a consistent manner for estimation purposes.

There are several significant advantages to using this fixedeffects panel model:

• The panel model does not require a fixed participation window. Rather, each house essentially has its own, unique, participation window.

• 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 generally high. Second, the model can give significant results even if a small number of houses are in the model. This latter feature is important for this program where there may not be sufficient participants to meet the target sample size, particularly for some individual measures.

The EM&V Contractor will use standard statistical tests and regression diagnostics to evaluate the performance of the models and will screen each model for implausible results. The statistical tests and diagnostics include evaluating the tstatistics for estimated coefficients and the R2 for equation fit and examining residuals from the fitted models. The EM&V Contractor will use the results of the statistical testing and diagnostic screening to select the model that best explains the data. The results from the model providing the best "fit" will be used in the analysis of electricity and natural gas savings.

The second aspect of the EM&V Contractor’s analysis of savings will use engineering analysis with an energy simulation model to develop alternative estimates of heating and cooling energy use and of energy savings from installed measures for a sample of participant dwellings.

The third aspect of the M&V analysis for the Low Income Weatherization Program combines the regression analysis of billing data with the engineering estimates of energy used. The model specification used for 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 based on engineering or thermal load simulations.

M&V Data Store The Nevada DSM M&V Data Store Web Portal, referred to as Data Store, is a web portal that has been customized for Nevada Power’s internal use. Its function is to track Demand Side Management program performance. The Data Store supports the evaluation, measurement, and verification activities by providing the data needed for sample selection and verification of savings data. The Data Store is populated with data provided by the implementation contractor on a monthly basis.


Cost Benefit Analysis The Low Income Weatherization Program is designed to facilitate the implementation of energyefficient measures in the homes of low income residential customers at no cost to the customer. The program includes singlefamily, multifamily, and manufactured or mobile housing.

Exhibit A

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Freeridership The Commission order in Docket No. 0608020, refer to stipulation, paragraph 4, the order stated that “freeridership or spillover do not need to be considered in the financial analysis of the lowincome programs. NettoGross Ratio of 100% has been used in the economic evaluation of this program.

Input Data, Description of Sources, and Results of Financial Analysis A copy of the input data sheet and financial model are provided as Technical Appendix Item DSM2. These figures were all calculated based upon the information contained in this program data sheet and the materials referenced herein. The following tables summarize the results of the financial analysis.

Table 6a: Base Scenario Cost Results 20102012

Cost Test B/C Benefits (NPV) Costs (NPV) Net Benefits CCE $/kWh

Total Resource 0.86 $7,659,909 $ 8,908,751 ($1,248,842) $0.09 Utility 0.94 $7,831,708 $8,307,491 ($475,782) $0.09 Participant N/A $8,677,234 $0 $8,677,234 $0.00 Ratepayer 0.37 $ 6,718,952 $18,097,481 ($11,378,529) $0.19 Societal cost 0.96 $8,511,080 $8,908,751 ($397,672) $0.09

Table 6b: Low Scenario Cost Results 20102012


Total Resource 0.86 $6,124,522 $ 7,123,448 ($998,926) $0.09 Utility 0.94 $6,263,370 $ 6,642,383 ($379,014) $0.09 Participant N/A $6,939,022 $0 $6,939,022 $0.00 Ratepayer 0.37 $5,373,058 $14,471,718 ($9,098,660) $0.19 Societal cost 0.96 $6,805,188 $7,123,448 ($318,260) $0.09

Table 6c: High Scenario Cost Results 20102012


Total Resource 0.86 $9,574,986 $11,136,118 ($1,561,131) $0.09 Utility 0.94 $9,789,741 $10,384,521 ($594,781) $0.09 Participant N/A $10,846,642 $0 $10,846,642 $0.00 Ratepayer 0.39 $8,398,756 $22,622,148 ($14,223,391) $0.19 Societal cost 0.96 $10,638,960 $11,136,118 ($497,158) $0.09

Exhibit A

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Total Costs $2,999,966 $8,999,937 Energy Savings (kWh) 3,346,265 93,874,926 Energy Benefits ($) $140,790 $6,436,679 Cost of Conserved Energy N/A $0.09 Critical Peak Demand Savings KW 949 N/A



Total Costs $2,400,213 $7,195,622 Energy Savings (kWh) 2,677,184 75,068,680 Energy Benefits ($) $112,638 $5,147,110 Cost of Conserved Energy N/A $0.09 Critical Peak Demand Savings KW 759 N/A



Total Costs $3,750,064 $11,250,079 Energy Savings (kWh) 4,182,853 117,344,735 Energy Benefits ($) $175,988 $8,045,922 Cost of Conserved Energy N/A $0.09 Critical Peak Demand Savings KW 1,186 N/A

Interpretation of Results The Total Resource Cost (“TRC”) Test is the ratio of the discounted total benefits of a program to the discounted total costs over the life of the installed units. The TRC ratios by scenario are:






Exhibit A

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Section E: Supporting Documentation The Low Income Weatherization Program M&V Reports for 2008 are provided as Technical Appendix Item DSM17.

Exhibit A

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Exhibit A

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Nevada Power Company Market and Technology Trials

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Market and Technology Trials January 2010

Exhibit A

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Section C: Proposed 20102012 Program ......................................................................................8 Rationale and Supporting Data ................................................................................................. 8 20102012 Program Execution ................................................................................................. 8 20102012 Program Management Plan .................................................................................... 10 20102012 Data Delivery and Tracking ................................................................................... 10 M&V Plan ........................................................................................................................... 10

List of Tables Table 1: Results, Program Year 2008....................................................................................................................................... 6 Table 2: Budget for Program Year 2009................................................................................................................................... 7 Table 3: Base, Low, and High Budget, Program Years 20102012 ............................................................................................ 8


Exhibit A

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Date: January 2010

Program Name: Market and Technology Trials

Program Status: Continuing/Expanded

Program Manager: Kelly Johnson

Primary Contractor(s): Varies

2009 Budget: $200,000


Low $160,000 $160,000 $160,000

Base $ 200,000 $ 200,000 $ 400,000

High $ 240,000 $ 240,000 $ 440,000

TRC B/C Ratios: Low N/A

Base N/A

High N/A

Program Summary The Market and Technology Trials Program focuses on the assessment and testing of innovative and energyefficient technologies with applications in the residential, smallcommercial, and industrial markets in Nevada. The trials allow small scale tests of products that have potential energy and demand savings benefits. Where the benefits are demonstrated to be of sufficient quantity and reliability the measure will be incorporated in one of Nevada Power’s energy efficiency or demand response programs. This program strengthens Nevada Power’s commitment to help customers reduce their energy bills through the implementation of new, advanced and cutting edge energy efficiency measures.

Under this program, Nevada Power and its contractors conduct due diligence in selecting programs for testing and evaluation based on the following criteria:

a. Product will establish feasibility of technical concepts and can potentially advance energy science and/or technology beneficial to Nevada’s electric ratepayers.

b. The product technology offers potential for energy savings and demand savings.

At the conclusion of each field evaluation, Nevada Power prepares a detailed report documenting testing protocols, measured data results, conclusions and recommendations for further evaluations and/or technology deployment. These reports support the dissemination of related test performance data and lessons learned.

Section A: 2008 Program Results In 2008, Nevada Power continued its commitment and efforts assessing and evaluating innovative technologies considered to support energyefficient applications for Nevada customers. Complete reports for each trial are provided as Technical Appendix Item DSM8.

New technology assessment efforts in 2008 included:

Exhibit A

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eCube Refrigeration Temperature Controller Field Test

The eCube controller is a small box that contains a material inside that simulates the temperature performance of food. It can be retrofitted with a thermostat sensor in a refrigerated space, and is small enough to easily fit into refrigeration units. The eCube temperature represents food temperature rather than air temperature; therefore it provides a delayed temperature response compared to the more rapid air temperature variations normally monitored by the thermostat sensor. The effect of this unit is fewer, but longer, "on and off" compressor cycles. Longer cycles result in higher compressor efficiency because the compressor operation is allowed time to stabilize and reach full design efficiency during each cycle. An additional claim that the eCube controls air temperature to a lower level with no adjustment to the thermostat was also evaluated.

For the walkin refrigerator at the Del Taco test site, the annual utility bill savings would be $27 to $40 based on a projected annual energy savings of 269 kWh and an estimated electric energy cost in the 10¢/kWh to 15¢/kWh range. Comparing the projected savings with the eCube cost ($225 plus $100 for installation), results in a payback period of 812 years. This payback period is applicable only to the conditions at the field test site, assumed electricity costs, and the installed cost assumptions, and may vary at other sites. This unit was not adopted as a supported energy efficiency measure. The final report is provided as Technical Appendix Item DSM8.

SEER 21 High Efficiency Air Conditioner Field Test

Frigidaire has begun marketing a 4ton air conditioning (AC) unit in the Las Vegas area with a Seasonal Energy Efficiency Ratio (SEER) rating of 21. This system has the highest SEER efficiency rating currently available for a 4ton residential AC. This system has been commercially available for about a year, and only a few units have been installed to date in the Las Vegas area. Reducing air conditioning load by supporting increased use of higher efficiency air conditioners would reduce the utility’s customer demand at critical times and would reduce costs to customers during the hot weather periods.

This unit achieved the energy savings that were expected from a SEER 21 AC unit. The homeowner's annual utility bill savings could be reduced by $189 based on a projected annual energy savings of 1,746 kWh and the current Nevada Power residential rate of 10.84 ¢/kWh. Comparing the test site homeowner’s projected savings of $189 annually with the assumed $7,000 incremental cost to upgrade a 4ton AC installation from the baseline SEER 13 model to the SEER 21 AC system results in a simple payback of 37 years. A payback of this length is longer than the expected AC system lifetime and the upgrade would not pay for itself over the expected life of the unit. As the price of this unit is reduced with increased production this unit will be a viable addition to the Residential High Efficiency Air Conditioning Program. The final report is provided as Technical Appendix Item DSM8.

Geoexchange HVAC and Domestic Hot Water

This program was continued from 2006. It was cost effective to keep monitoring at the site since all of the measurement and verification equipment was already installed. It was found that the geoexchange heat was cost effective for radiant floor heating and domestic hot water. For air conditioning, the system performed below the efficiency of what would be expected of a conventional air conditioning system, although it did keep the house at 74 degrees Fahrenheit for most of the summer. The system had longer run times due to increased ground loop temperatures. This system was experimental, and the contractor had a lot of kinks to work out due to inexperience in geoexchange installations in the Las Vegas area. The system is constantly being improved and worked on in hopes that it will prove to be cost effective in the future.

Exhibit A

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In Home Displays

The In Home Display Market test investigated customers’ preferences for the features and customers’ reactions to the five displays tested. The results revealed that there were savers and non savers. The savers actively worked with the devices and obtained energy savings. The non savers did not invest much interest in the devices and did not obtain energy savings. Approximately 80% of the participants were savers. The features that the customers found most valuable were the presentation of energy and dollar savings, both instantaneous and period to date. All other display options were rated lower. The participants did not place much value on telling time or esthetics.

The test demonstrated that any larger program would require a dedicated customer support, better instructions on how to use the devices, and ongoing education to maximize the potential energy savings. Devices that require the installation of pickup devices in electric panels encountered major installation difficulties as they could not be installed in many panels due to space or access limitations and they required the added expense of an electrician for installation.

The test observed an overall approximate energy savings of 7.34% for Nevada Power. It is noted that approximately 40% of the participants achieved savings greater than 10%.

The results of the Market Test were used in the design of the Market Research being conducted in 2009. The market research will investigate the design of customer support functions, educational materials, unit deployments and second generation in home displays that are designed to work with a smart meter and minimize installation, and address rate data updating issues. The final report and M&V report are provided as Technical Appendix Item DSM13 and Technical Appendix Item DSM15.

Ice Bear

This project was initiated to investigate the installation and performance of ice storage technology in shifting load from onpeak during the hot afternoons to mid and offpeak hours during the night or morning hours in the Las Vegas area. The project was designed to investigate the operational effectiveness and technical feasibility of using Ice Bear 30 energy storage applied to common direct expansion airconditioners as an appropriate technology for demand reduction and peak load management in Nevada.

The project consisted of the installation of four Ice Bear units at two different business locations during the summer of 2008 and monitoring the performance of these units for the 2008 cooling season. An emphasis of the project was to study the impact of unusually high daytime and evening Las Vegas summer temperatures on the ice making and ice cooling operational modes. The Ice Bear 30 units are programmed to permanently load shift 95% of the existing air conditioning onpeak demand (KW) and energy (KWh) to the mid and offpeak periods. The project timeline anticipated that two demonstration site agreements would be executed, that the design phase, installation, and startup phases would be completed so that the evaluation phase could begin on June 1, 2008 and continue for a period of six months.

Problems encountered during the test included major delays as the main electric service panel at one location required an upgrade as it was undersized to meet the increased load requirements. In addition there were two operating issues that required the replacement of a circuit board and sensor assemblies that adversely impacted the results of the test.

For the test period the Ice Bear units were apparently successful at reducing the onpeak demand for each combination AC and Ice Bear unit by over 90% for the six hour target period. (Due to installation delays the units could not be tested during the very hottest of summer days.) This demand reduction was

Exhibit A

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accomplished with no increase in aggregate electrical energy consumption. The test demonstrated that the Ice Bear units when appropriately applied have the technical potential to shift approximately 90% of the on peak air conditioning load to mid and off periods. The final report for the Ice Bear Test is provided as Technical Appendix Item DSM8.

Table 1 proves the budget performance for this program in 2008.

Table 1: Results, Program Year 2008

Total Program Target Actual Variance Budget, Total Program $400,000 $298,101 74.5% No. of Installed Measures 5 4 80.0% Demand Savings (kW) N/A N/A N/A Energy Savings (MWh) N/A N/A N/A

2008 Analysis The 2008 Market and Technology Trials evaluated four technologies with the potential to save energy in the Las Vegas service territory, focusing primarily in cooling. All have the potential to become a viable part of an energy conservation program.

• eCube is a low cost measure that would be especially effective in walkin refrigerators that are not used often since it reduces the cycling.

• 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 the customer.

• The Geoexchange home has been an ongoing market trial. As the industry becomes more mature with more experienced installation contractors, it could become cost effective for new home construction.

• The In Home Displays Market Test was effective in identifying customer reaction and desires in regards to in home displays and in identifying other issues that required additional research to insure a wider rollout would achieve optimum results. The results guided the design of the 2009 In Home Display Market Trial. The results of the 2009 Market Trial will also be used to guide the design of the In Home Display measure under the Demand Response Program in the 2010 2012 action plan period.

• The Ice Bear Test demonstrated that such units have the technical potential to shift 90% of air conditioning demand from onpeak to midpeak and offpeak periods.

2008 Lessons Learned Programs 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 to participate makes all the difference in obtaining accurate information about the program.

Exhibit A

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Section B: 2009 Program Nevada Power’s program budget for Market and Technology Trials for 2009 is $100,000.

Nevada Power is evaluating numerous programs for 2009. Several of these will leverage partnership opportunities with customers, vendors, and efficiency industry organizations. Below is the target and budget for the program.

Table 2: Budget for Program Year 2009

Total Program 2009

Budget, Total Program $100,000

No. of Installed Measures 4

Demand Savings (kW) N/A

Energy Savings (MWh) N/A

Technology Trials that are being considered for 2009 include heat pump water heaters, new lighting techniques, residential occupancy sensors, and/or commercial HVAC occupancy sensors. The following potential products and technologies will be investigated in 2009 and if merited, trials will be initiated.

Heat Pump Water Heaters (HPWH’s) Heat pumps water heaters reject heat into water, replacing a traditional water heater. They need mild to warm climates, and should always be somewhere between 4090 degrees F. They need lots of air space around them, the right ambient temperature range, no freezing conditions, and proper ventilation. When the conditions are right it appears that the efficiency factors can be three times that of traditional water heaters. Las Vegas seems to have an ideal climate for the product.

New Lighting Technologies New technologies are constantly evolving that will need to examined every year, such as LED lights and fiber optic lighting options. Both offer significant savings over CFL’s, although the LED light is still much more expensive and has limited applications. Induction lighting for commercial properties for use in street lighting is also being explored.

Online Customer Experience (Interactive feedback via personal computer) This initiative investigates the customer’s experience with Nevada Power’s new online tools for viewing billing data, performing online analysis and for performing online home energy audits.

Enhanced Bill Analysis This initiative is targeted to investigate the effect on customer energy consumption by providing additional useful information on the monthly electric bill.

2009 Program Execution The implementation process in 2009 will continue the use of program screening, program agreements, and establishment of program test guidelines (See Appendix A). Final reports and recommendations for each program are provided as part of the Nevada Power’s Annual DSM Update Report to the Commission.

2009 Results to Date Online Customer Experience Evaluation The draft report for the Online Customer Experience investigation is under review.

Exhibit A

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Section C: Proposed 20102012 Program The proposed program for 20102012 will be implemented as it has been in prior years. The program will give priority to potential products that are expected to have the greatest savings potential, cooling and lighting. Table 3 provides the budgets for the base, low, and high scenarios.

Table 3: Base, Low, and High Budget, Program Years 20102012

Level Budget

TRC 2010 2011 2012 Base $200,000 $200,000 $400,000 N/A Low $160,000 $160,000 $160,000 N/A High $240,000 $240,000 $440,000 N/A

Rationale and Supporting Data The Market and Technologies Trial program is designed to test new technologies and transfer this information to existing or new DSM programs for Nevada Power and its customers. The Commission Discussion and Findings in Consolidated Dockets 0606051 and 0607010 found that addressing conservation and DSM issues by using a systematic process for evaluating the potential of technologies is necessary in order to develop and implement new programs. Some trials may take more than one year and will be continued into the following program year.

20102012 Program Execution The implementation process consists of project/product screening, agreements, and establishment of test guidelines. Final reports and recommendations for each project/product are provided to the Commission as part of the Company’s Annual DSM Update Report.

Listed below is a short list of the types of typical technologies that may be considered for testing in the 20102012 action plan period.

Residential Occupancy Sensors Occupancy Sensors have verified savings in the commercial sector for hotels and motels, and are offered under the commercial rebate program. A trial of the residential occupancy sensors would determine if they are also cost effective for the average homeowner. Since they are low cost, ranging from $30 to $130, and easy to use, the product would be cost effective with minimal savings. In addition to energy savings, they may be an added security measure in the home, especially in outside lighting applications. There are many studies on the energy savings for commercial buildings, reducing energy costs by up to 50%, but use in the residential market requires further research.

Wireless Occupancy Sensor HVAC Control Wireless Occupancy Sensor HVAC Control can be used in hospitality, multifamily dwellings, and offices. It works off a wireless platform, facilitating quick and easy retrofit installation. It uses two sensors, one that is a ceiling mount passive infrared sensor and one that is a door sensor. The passive infrared sensor allows the unit to detect when someone is in the room, therefore it will not turn off if someone is sleeping. It can be programmed and commissioned for different set points and multiple levels of setback, therefore energy savings would vary widely depending on application and usage.

Electric Vehicles The Electric Vehicles (“EV”) are coming and with them the demand for electricity to charge these vehicles will follow. The PlugIn Electric Vehicle is a hybrid vehicle with batteries that can be recharged

Exhibit A

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http://en.wikipedia.org/wiki/Hybrid_vehicle

http://en.wikipedia.org/wiki/Battery_(electricity)


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by connecting a plug to an electric power source. It shares the characteristics of both traditional hybrid electric vehicles, having an electric motor and a internal combustion engine, and of battery electric vehicles, also having a plug to connect to the electric grid. Most PHEVs on the road today are passenger cars, but there are also PHEV versions of commercial passenger vans, utility trucks, school buses, motorcycles, scooters, and military vehicles. It is estimated that each kilowatt hour of battery capacity in use will displace up to 50 US gallons of petroleum fuels per year (gasoline or diesel fuels).

The technology test would investigate various tools to encourage off peak charging and demand response opportunities that might be available with PHEVs.

Electronic Gaming Machines In 2005 Nevada Power authorized a study of the potential for energy savings in the Electronic Gaming Machine (EGM) industry in the state of Nevada. At that time the estimated electric consumption of EGMs in the state of Nevada was 263,000,000 kWh. As of June 2008 the number of EGMs in the state has remained fairly consistent at just over 200,000 devices. Since 2005 the advancement in quality and output of LED lights makes the potential for EGM upgrades more technically feasible. The technology and price on LCD screens has also improved since 2005. Additionally, a large percentage of EGMs are actually computer processors and there appears to be energy savings potential in the power supplies and microprocessor equipment. All of the energy savings related to EGMs we believe will result in significant HVAC savings. It has been estimated that the energy savings potential in EGMs is between 5% 30%. The large energy consumption is based on 24 hour operations; all the devices also impact the system peak. Nevada Power has worked with a large EGM manufacturer in the state and proposes to work with their R&D lab to evaluate the savings potential, the HVAC interaction, and the technical feasibility of the equipment while maintaining the strict controls and integrity of the EGMs as required by the Nevada State Gaming Commission and State Gaming Control Board.

Green Motors At the end of motor life, motors are either replaced or rewound. For large motors the cost to replace a motor is often cost prohibitive and therefore most very large motors are rewound. The DOE has reported that in general, one to two percentage points should be deducted from the efficiency of an electric motor that has been rewound. However, it has been shown that if done with best practices, a motor rewind can result in no efficiency loss. EASA/AEMT has set guidelines to follow when rewinding a motor in order to minimize efficiency loss. The Green Motors Practices Group (GMPG) was founded in 2006 as a non profit organization dedicated to promoting best practices at motor repair shops. GMPG enforces the rewind guidelines and certifies service centers that follow the EASA/AEMT guidelines. Nevada Power plans to explore market awareness and potential for this motor option.

Office of the Future Office characteristics indicate that 75% of the energy use in offices is related to Lighting, HVAC, and Plug Load. Despite energy efficiency efforts, building energy use is not going down primarily due to ever increasing plug load. Taking a more systems approach including all connected electric load for office spaces appears to hold promise for a higher level of energy savings than the traditional “widget approach”. By designing packages of energy efficient measures for different office types for both retrofit and new construction will provide office spaces to take a more holistic planning approach to their energy use. Nevada Power proposes to build off the office of the future planning currently underway at many major utilities nationwide and then develop a proof of concept marketing trial to determine the potential for market acceptance and technical potential in southern Nevada.

HVAC Retrofit Devices At least two companies have approached Nevada Power with HVAC retrofit devices that suggest energy savings by cycling the compressor when it is not needed. As the HVAC lowers the temperature, the evaporator cannot extract as much cooling capacity and it becomes saturated. When the evaporator is

Exhibit A

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http://en.wikipedia.org/wiki/Electric_power

http://en.wikipedia.org/wiki/Hybrid_electric_vehicle

http://en.wikipedia.org/wiki/Internal_combustion_engine

http://en.wikipedia.org/wiki/Battery_electric_vehicle

http://en.wikipedia.org/wiki/Plug

http://en.wikipedia.org/wiki/Electric_grid

http://en.wikipedia.org/wiki/Scooter_(motorcycle)


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saturated, the compressor is wasting energy because the evaporator cannot use the additional cooling quick enough. These devices turn off the compressor until the evaporator is no longer saturated, and then allows the compressor to turn back on. Cycling the compressor makes the process more efficient by not running the compressor when it is not needed. Energy savings of 1020% have been suggested and there are installations reported as successful in Europe and Australia; however no information has been provided related to installations in the US. Nevada Power is proposing to study this technology further in both commercial and residential applications to determine if there is any real benefit to this “black box” technology.

Data Mining Data mining is the process of sorting through large amounts of utility customer data, benchmarking performance, and identifying customers with excessive energy or demand use. The process involves a customized, standalone software application that will consolidate and sift through utility billing and customer data (such as square footage) to allow Nevada Power to identify customers with operational problems and opportunities for efficiency improvements. This approach has been successful at other utilities with many customer segments, including office buildings, clothing retailers, banks, and local, state, and Federal government. Typically 5 to 10% of customer facilities are using at least 200% of expected consumption. Correcting these outliers yields large customer savings and motivates customers to delve further into energy use in their other buildings. Nevada Power proposes to test data mining both as an option to identify likely candidates for equipment improvements and for market acceptance of this type of offering.

20102012 Program Management Plan The program management plan for the Market and Technology Trials program includes a Nevada Power program manager working with collaboration consultants to conduct the trials.

20102012 Data Delivery and Tracking A comprehensive report will be developed for each project/product investigated.

M&V Plan A unique measurement and verification plan will be developed for each project/product investigated.

Exhibit A

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Nevada Power Company Program Data Sheet Demand Response

January 2010

Exhibit A

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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

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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 A

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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 ................................ Error! Bookmark not defined. 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 A

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• 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 Company’s 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 A

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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 utility’s 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 A

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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 A

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Section A: Historical Program Review Historically, Nevada Power has focused on direct load control, which is one of the two main types of demand response—direct 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 manufacturers—Cannon 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 manufacturers—the 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 45-49

2008 63.0 20-24 83-89

2009 100.8 20-24 121-125

Exhibit A

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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 105ºF-108ºF 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


2008 Cumulative M&V Verified Demand


2001-2006 20-24 19 19

2007 21 17 36

2008 48 48 84

2009 (May) 21 21 105

2009 (Dec. 31 Est.) 46-56 46-56 130-140

Section 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 A

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Table 3: Program Year 2008 Results


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 ºF - 108 ºF as measured at the generator for 4 ºF 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 ºF

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 105ºF-108ºF 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 MW—i.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 A

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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 customer’s 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 A

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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 Power’s experience and observations regarding the implementation and execution of the ACLM Program.

As discussed in last year’s Annual Report, direct load control programs are evolving to include more participation choice for customers—for 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 A

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• 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 A

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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


Demand Savings (kW) 37,800


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 A

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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 2.91

Dynamic Pricing Trial

$ 1,200,000 $ 2,848,000 $ 2,940,000 0.94

Energy Storage

$ 306,000 $ 300,000 $ 393,000 0.07

Pre -2010 Installed

$5,750,000 $5,750,000 $5,750,000 n/a

Total 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 A

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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 77,292

Dynamic Pricing Trial**

0 2,102,000 2,107,000 0 4,498 4,498

Energy Storage

n/a n/a n/a 28 28 42

Total 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 utility’s 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 A

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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 A

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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 A

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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 customer’s 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 A

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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 A

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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 A

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22

Exhibit A

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January 2010

23

Explanation of Scenario Assumptions The DR program data sheet proposes three scenarios of demand response activities. All scenarios assume the implementation of the functional requirements for Back Office, Middle Office, Front Office and Field Services to ensure reliable and generation equivalent peak demand resources for the existing system and proposed system. The scenarios are distinguished by participation rates, communications systems, and customer systems requirements. The base and high level scenarios provide for the full integration into a smart grid implementation as part of the contemplated Advanced Service Delivery (ASD) Project. The estimated budget, energy, and demand figures in the data sheet are based upon the following assumptions:

Low Scenario – The low scenario assumes a continuation and then gradual decline of the existing program design and technology package, i.e. a continuation of Air Conditioning Load Management utilizing 2-way PCT technology over public paging networks. The program builds out an additional 28-30 MW of demand response capacity over the three year planning period with a gradual transition of legacy 1-way technology to 2-way PCT technology in order to maintain overall system size as receiver switch customers turnover or as receiver switches fail. The budgets assume increased costs for customer acquisition and retention assuming that most of the customer base that is attracted to the existing value proposition in the absence of sign-up bonuses or enhanced technology has already enrolled in the program. In 2009, for example, to maintain the pace of customer enrollments, gift cards were included as a sign-up bonus to attract new customers. Limited marketing is included for TOU rate awareness, similar to the existing program direct mail pieces. The low Scenario program does not include a large commercial and industrial program, nor price-responsive load control and energy storage pilots. By the end of 2012, the overall participation rate in the residential sector is at 6% for a total projected system size of 160-170 MW of installed demand reduction capacity.

Base Scenario – The base scenario assumes an expansion of the program to direct load control in the commercial and industrial sectors and includes the Dynamic Pricing Trial affecting residential and small commercial sectors. It incorporates limited energy storage installations; and, it assumes the technology packages detailed in Table 7 above, and that the technology packages and program design will provide an enhanced value proposition that is able attract up to 9% of the residential customer base and 7-8% of small commercial customers by 2012. The scenario assumes that on the customer side the program will install “bridging” technologies and broadband based technologies that are more integrated to Internet based control and information systems. Bridging technologies include those that can be transitioned to use with future advanced meter infrastructure platforms and are flexible to accommodate evolving open standards such as OpenAutoDR and Zigbee SEP 2.0. One example of a potential bridging technology is a ZigBee based PCT communicating via a customer’s broadband connection initially, and then later as Zigbee based meters are installed, the Company could communicate to the PCTs via metering communication systems. On the utility side, the program assumes the procurement and integration of demand response management systems that allows Nevada Power to manage the increase in scale and scope of DR programs and that also integrate to Resource Procurement and Balancing Authority systems to allow forecasted demand drop from customer systems to be scheduled along with generation units and/or be utilized as 10-minute non-spinning reserve requirements. Overall, this scenario translates to: an additional 146 MW of installed demand response capacity in the residential and small commercial sectors; an initial penetration in the large commercial and industrial sectors with the addition of 12 MW of installed demand capacity; and, small scale pilots in energy storage technology. Cumulative installed capacity grows to approximately 305 MW.

Exhibit A

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High Level – The high level builds upon the base level by assuming a much more aggressive Commercial and Industrial program. In this scenario the C&I program grows by approximately 100 MW over the three-year plan period. Cumulative installed capacity grows to approximately 395 MW.

Input Data, Description of Sources, and Results of Financial Analysis A copy of the input data sheets and financial models can be found in the Demand Side Plan Technical Appendix Item DSM-2. These figures were all calculated based upon the information contained in this program data sheet and the materials referenced herein. The following tables summarize the results of the financial analysis for all three scenarios. The financial analysis was performed using the incremental additions to the program that will occur during the Action Plan period of 2010-2012.

Table 8a: Base Scenario Cost Test Results 2010-2012

Cost Test B/C Benefits (NPV) Costs (NPV) Net Benefits

Total Resource 2.52 $163,795,320 $64,896,821 $98,898,498

Utility 2.17 $168,517,562 $77,708,300 $90,809,262

Participant $55,936,681 ($3,744,227) $59,680,908

Ratepayer 1.18 $163,795,320 $138,367,223 $25,428,096

Societal cost 2.61 $169,288,894 $64,896,821 $104,392,072

Table 8b: Low Scenario Cost Test Results 2010-2012


Total Resource 1.44 $41,623,001 $28,873,957 $12,749,044

Utility 1.34 $44,027,940 $32,970,174 $11,057,766

Participant $1,449,305 ($5,391,184) $6,840,489

Ratepayer 1.13 $41,623,001 $36,824,418 $4,798,583

Societal cost 1.45 $41,765,167 $28,873,957 $12,891,210

Exhibit A

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Table 8c: High Scenario Cost Test Results 2010-2012


Total Resource 2.42 $237,143,660 $97,872,686 $139,270,974

Utility 1.77 $245,105,492 $138,507,082 $106,598,410

Participant $58,175,384 ($33,311,539) $91,486,923

Ratepayer 1.16 $237,143,660 $204,644,298 $32,499,361

Societal cost 2.48 $242,904,531 $97,872,686 $145,031,844

Interpretation of Results The Total Resource Cost (TRC) Test is the ratio of the discounted total benefits of a program to the discounted total costs over the life of the installed units. The TRC ratios by Scenario are:




The Rate Impact measure (RIM) provide an indicator of the impact of a program on rates. A RIM of gre3ater than one indicates a reduction in rates.




These values indicate this program is very beneficial to the Utility and its ratepayers.

Exhibit A

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Section E: Direct Load Control 2010-2012

Rationale and Supporting Data – Direct Load Control Direct load control programs reduce system peak loads by providing incentives to customers in return for their permission to control their load (e.g. air conditioning) during peak times. These programs are clean energy programs 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.

These programs also contribute to electrical system reliability as they can be used for non-spinning reserves and reduce congestion on the distribution system. In effect, direct load control systems can operate as a peaking resource, which helps reduce or avoid the necessity to purchase higher cost capacity and energy, and may delay the construction of new generation and/or distribution assets.

Figure 1: 2010 Load Duration Curve with 2010 Target Demand Response Capacity

84.9%

86.9%

88.9%

90.9%

92.9%

94.9%

96.9%

98.9%

4773

4823

4873

4923

4973

5023

5073

5123

5173

5223

5273

5323

5373

5423

5473

5523

5573

5623

0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190

Perc

ent o

f Sys

tem

Pea

k Lo

ad

Syst

em L

oad

(MW

)

Top 200 Hours

NV Energy (South) Load Duration Curve - 2010

LOW/BASE/HIGH (TOP 5-6 HOURS: 2.2%-2.7% OF PEAK)

The following observations can be made from analyzing system load duration curves (Figures.1 and 2) for the top hours of the year:

26

Exhibit A

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• If low Scenario targets are met and maintained, the load control system could offset approximately 2.3% of peak in 2015

• If base and high scenario targets are met and maintained, the load control system could offset approximately 5% of peak in 2015

Figure 2: 2015 Load Duration Curve with 2012 Target Demand Response Capacity

86.6%

88.6%

90.6%

92.6%

94.6%

96.6%

98.6%

5122

5172

5222

5272

5322

5372

5422

5472

5522

5572

5622

5672

5722

5772

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5872

5922

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0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190Pe

rcen

t of S

yste

m P

eak

Load

Syst

em L

oad

(MW

)

Top 200 Hours

NV Energy (South) Load Duration Curve - 2015

LOW (TOP 7 HOURS - 2.3% OF PEAK)

BASE/HIGH (TOP 17 HOURS - 5% OF PEAK)

The load duration curves combined with program targets show how the DR portfolio could avoid the construction of costly peaking generators that would only run for a few hours of the year. In the high scenario the portfolio would be capable of reducing loads of between 400-500 MW depending upon load growth and load shape at peak with an installed base in the range of 670 MW, potentially offsetting the top 20-30 hours per year. As the demand response system grows in installed capacity, the capacity is spread out across the peak load hours in order to minimize peak (and maximize Avoided Capacity), thereby requiring more hours of control before and after the peak on any one day.

From a utility perspective the benefits of a demand response portfolio include those derived from:

• Avoided capacity (included in TRC and RIM models)

27

Exhibit A

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28

• Avoided fuel and purchase power (included in TRC and RIM models)

• Deferred distribution system upgrades (included in TRC and RIM models)

• Avoided capacity options (not included in TRC and RIM models)

• Ancillary services such as avoided spinning reserve (not included in TRC and RIM models)

• Reliability, i.e. the benefits derived from using the system to avoid the high costs associated with brownouts or blackouts under extremely rare system emergencies (not included in TRC and RIM models);

• Market effects, i.e. a lowering in the market price of electricity due to decreased demand (not included in TRC and RIM models);

• Managing load without the environmental consequences of other resources, thus offering a tangible benefit under carbon regulation schemes; and,

• Other resource benefits, such as diversification, maintenance flexibility, and reduced long-term resource adequacy requirements (not included in TRC and RIM models).

From a customer perspective the DR portfolio offers:

• Community Benefits:

o Customer satisfaction from enhancing the reliability of the electrical system;

o Customer satisfaction from helping to reduce upward pressure on electricity prices;

o Customer satisfaction from helping to avoid or slow down the construction of new gas fired generation plants;

o Customer satisfaction from helping to reduce the community’s environmental impact and carbon footprint.

• Personal Benefits:

o Customer satisfaction from reducing personal environmental impact and carbon footprint;

o Customer satisfaction from reducing electricity bill via program participation and via their own additional actions to save energy and reduce costs.

• Enabling Technology Benefits

• Service Incentives

o Internet programming of the PCT and remote update of IHDs;

o Customer support for utilizing and programming the PCT and IHD

• Participation-based Monetary Incentives

Exhibit A

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• Additional energy and cost savings from participating in events and capitalizing upon the efficiency and control benefits of the provided enabling technology.

Table 9a provides the budgets and Table 9b provides the proposed targets for the Direct Load Control measure. Table 9c provides the program costs to continue the program developed in the 2001 to 2009 period.

Table 9a: Targets and Budgets, Program Years 2010-2012

Scenario Budget1

TRC 2010 2011 2012

Base $ 9,914,000 $ 12,622,000 $ 16,038,000 2.91

Low $ 8,897,000 $ 5,031,000 $ 5,770,000 1.44

High $ 20,055,000 $ 24,608,000 $ 29,531,000 2.65

Pre 2010 DR System $5,750,000 $5,750,000 $5,750,000

1 Pursuant to NAC 704.952 the cost for incentives for the dispatchable load control programs will be recovered the same as fuel and purchased power …

Exhibit A

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Table 9b: Targets, Program Years 2010-2012

Scenario Annual Energy Savings (kWh)* Annual Incremental

Installed Capacity (kW)

2010 2011 2012 2010 2011 2012

Base 6,010,749 23,166,620

22,212,167 27,287 51,176 77,292

Low 6,086,579 6,348,840 6,759,991 32,940 9,129 10,942

High 8,882,447 28,801,144 30,941,972 58,287 82,176 107,892

Pre 2010 DR System 140,000 140,000 140,000

* Includes prior installed devices.

Table 9c: Existing Demand Response System (Prior to 2010) Program Costs


Overhead and M&V (included in new program) n/a n/a n/a

Customer Incentives $2,100,000 $2,100,000 $2,100,000

Customer and Field Services $2,380,000 $2,380,000 $2,380,000

Communications $1,120,000 $1,120,000 $1,120,000

Consulting, IT, and Marketing Services $150,000 $150,000 $150,000

Totals $5,750,000 $5,750,000 $5,750,000

Supporting Savings Data – Direct Load Control The demand savings and budget estimates for the 2010-2012 Action Plan period are based on the evaluation of the program results from previous years incorporating the results from the Measurement and Verification Reports for 2008 and previous years.


Exhibit A

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Table 10a: Base Scenario - Program Budget by Category, Program Years 2010 – 2012


Marketing, Advertising and Tech Demo $ 3,650,000 $ 3,050,000 $ 3,011,000

Implementation $ 4,910,000 $ 7,397,000 $ 9,514,000

Rebates $ 396,000 $ 1,187,000 $ 2,495,000

Measurement and Verification $ 120,000 $ 150,000 $ 180,000

Utility Labor and Overheads $ 838,000 $ 838,000 $ 838,000

Total Program Cost $ 9,914,000 $ 12,620,000 $ 16,038,000

Table 10b: Low Scenario - Program Budget by Category, Program Years 2010 – 2012



Implementation $ 5,435,000 $ 2,494,000 $ 3,068,000

Rebates $ 494,000 $ 631,000 $ 795,000




Table 10c: High Scenario - Program Budget by Category, Program Years 2010 – 2012



Implementation $ 11,770,000 $ 14,487,000 $ 16,634,000

Rebates $ 1,947,000 $ 4,283,000 $ 6,998,000


Utility Labor and Overheads $ 1,488,000 $ 1,488,000 $ 1,488,000


Exhibit A

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Estimated annual program costs including customer incentives to continue the program at these levels are $3 million, $13 million, and $30 million beginning in 2013 at the low, base and high scenarios respectively.

Inputs to the Load and Resources Tables (L&R Tables) vary from the installed capacity targets presented in this program data sheet for two primary reasons:

• The capacity numbers presented in the project datasheet represent program year annual targets, while those in the L&R tables represent the estimated progress toward annual targets achieved by the first two weeks of July when system peak is expected to occur; and,

• The capacity numbers presented in the project datasheet represent installed capacity (by December 31), while those in the L&R tables represent firm avoided capacity (by early July). Firm avoided capacity corrects for two primary factors:

o The number does not include capacity from Energy Storage since this is a very small pilot phase; and,

o Installed capacity is dispatched over time in an effort to minimize the peak. As the system size grows, current forecast models and dispatch algorithms suggest that dispatching the installed capacity all at once would reduce but not minimize peak, i.e. would move a reduced peak forward in time, but would not minimize the peak by taking into account the system load shape. Current models using optimization algorithms (theoretical perfect dispatch) show a close match between installed and avoided in the near term growing to as much as 30% depending upon the shape of the load curve in long term system load forecasts.. In practical terms, it would not be possible to perfectly dispatch each device according to optimization models, so the L&R figures represent an estimate of practical dispatch capability of groups of devices over time. For the economic analysis, Nevada Power has decremented average device capacity factors to conservatively model the impacts of avoided capacity.

2010-2012 Program Execution – Direct Load Control/Automation Service The Direct Load Control program provides a program option for all sectors with Back Office and Middle Office functions providing required functionality that is similar across the sectors. Major differences exist between the Residential and Small Commercial sectors and the Large Commercial and Industrial Sectors in the Front Office, Communications, and Field Services functions.

Residential and Small Commercial

ACLM also marketed as “Cool Share” is an existing Nevada Power demand response program to be transformed and enhanced by the ASD infrastructure and complimentary demand response systems to supplement and complement the ARRA grant and Company load impact, participation, and satisfaction goals. The ACLM program will also support efficient delivery of the Dynamic Pricing Trial and compliment its structure. The ACLM program existing and transition phases are described as follows:

• Existing – this program is currently based upon Schedule OLM with a primary reliance upon paging technologies which incur public carrier charges. The Company is proposing that this phase of program evolution end as of 12/31/2009. It will have delivered 140 MW of peak load

Exhibit A

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capacity and overall increased customer satisfaction among participants. Further growth of this phase would engender high public carrier communications costs, utilize obsolete equipment, and present obstacles to compliance with NERC CIP requirements. This phase has been based upon Schedule OLM which provides a participation based incentive similar to that of a Peak Time Rebate program except that incentives are not fully based upon $/kWh. They are $/hr based as derived from average expected kWh savings. Schedule OLM is a rider that can be attached to either the existing flat rate or Optional TOU rate;

• Transition Phase 1 – the Company proposes a Short Term transitional phase utilizing “AMI bridging” technologies in 2010 and early 2011 focused on testing and validation of ASD infrastructure and complimentary demand response systems. The “AMI bridging” technologies have alternate communication paths in order to ensure ACLM program delivery as the infrastructure platforms are tested and delivered, yet also qualifies the Company for Federal matching grant dollars for hardware and software since the technology is AMI based and will be compatible with the ASD system. This phase continues to be based upon Schedule OLM and is estimated to end in the third quarter of 2011.

• Transition Phase 2 – the Company proposes a Medium Term phase which will begin at the same time as the Dynamic Pricing Trial. This phase transitions from $/hr participation incentives to $/kWh participation incentives. This allows full benefit realization of smart meter technology, promotes fair and efficiently allocated participation incentives, and provides greatly flexibility to customers regarding participation. Customers are appropriately rewarded for saving more energy and providing higher levels of demand relief and vice-versa. Schedule OLM would be replaced by a Peak Time Rebate platform rate combined with Automation Service (PTR-AS). Automation Services for voluntary participants would include:

• Default Automation – setback of a customer’s programmable communicating thermostat (PCT) by 4-degrees F during critical peak events;

• Customized Automation – setback of a customer’s PCT by their chosen set point during critical peak events.

• Transition Phase 3 – a Long Term phase which will incorporate lessons learned from the Dynamic Pricing Trial and include additional Automation Services. This phase is expected to be based upon PTR-AS but could also facilitate other and more advanced dynamic pricing regimes. While it is hard to predict, additional automation services could include appliance and lighting automation. Automation Services are expected to include at a minimum the following:

o Optimized HVAC Automation – customers choose economic and comfort preferences which are then maintained and optimized via software algorithms for maximized savings.

The Company will make an appropriate tariff filing to reflect any changes to the program approved by the Commission as part of this Integrated Resource Plan proceeding, including, without limitation, provisions relating to the distribution of energy information display and control technology as an incentive and the changes necessary to support the transition from $/hr participation incentives to the $/kWh participation incentives.

Exhibit A

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Large Commercial and Industrial

As an option to traditional commercial load control agreements, Nevada Power will develop demand response based financing structures for energy efficiency projects that can be integrated into its portfolio of commercial incentive programs for energy efficiency projects. Such financing structures would support customer adoption and expansion of the commercial programs by providing energy efficiency project funds to customers in return for multi-year firm load control agreements. Nevada Power will also investigate the option of developing a large C&I critical peak pricing (CPP) tariffs for customers that prefer to simply focusing on automation platforms that respond to price signals.

Demand response agreements have proven to be an effective vehicle for creating financing streams for energy efficiency projects. They have also proven to raise the awareness of commercial customers regarding energy saving opportunities due to the energy consumption information provided by the interval data necessary to enable participation. However, to date, capacity and energy payments have largely been paid out over time after settlement of load control events and subsequently reinvested in energy efficiency projects. The concept of load management based financing of energy efficiency reverses and enhances the investment time frame by determining the net present value of future capacity and energy payments over the term of a customer agreement for the purpose of investing the funds in enhanced energy efficiency and enabling technology.

Nevada Power will attempt to coordinate the large commercial and industrial DR program as much as possible with the commercial energy efficiency programs. Ideally, Nevada Power would create an integrated services delivery platform with the goal of maximizing energy efficiency and cost savings for customers via comprehensive and well communicated value propositions. Such a platform should reduce the costs to deliver commercial energy efficiency and improve the performance of the commercial programs. The integrated services delivery platform would be managed in the Front Office by Nevada Power Key Account Mangers. The Account Managers would facilitate demand response audits, development of curtailment strategies, and the construction and testing of interfaces with customer energy management systems.

The Company will make appropriate tariff filings to support implementation of this program. This may include, without limitation, the filing of a large commercial and industrial critical peak pricing rate.

2010-2012 Program Management Plan – Direct Load Control/Automation Service Program implementation from the Back Office requirements through to the Customer Systems requirements will be a matrix-managed cross functional effort with primary business process management (BPM) and coordination provided by the DR business unit.

The Company has issued RFPs to procure Customer Systems, and select Front, Middle, and Back Office systems. The level and rate of adoption of the systems depends upon the outcome of this and other PUCN regulatory filings. The RFPs have specified web services based interfaces for Customer System control and data exchanges. For mass market programs, Nevada Power will prioritize risk managed installation and service contracts as it has in the past. For large commercial and industrial programs, Nevada Power will seek proposals from qualified vendors to fully develop viable customer contracts and contract management platforms and to provide demand response auditing, curtailment strategy design, and customer EMS interfaces.

Exhibit A

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M&V Plan

M&V Objective The M&V objective will be to quantify the energy savings and demand reductions resulting from the Direct Load Control Program.

Approach The utility’s EM&V contractor will work closely with Nevada Power to assess and confirm the effects of the Direct Load Control Program. The EM&V Contractor will prepare a Program-specific M&V Plan to guide this work. This plan will include approaches for quantifying the demand reductions and energy savings resulting from customer participation in the Program. These approaches are based on using the data collection procedures and analytical techniques that Nevada Power has developed and refined for its Demand Response Program in previous years.

Sample Selection Communicating devices have been installed for participants in this program. New sampling will be required for selecting customers to verify equipment installation and performance.

Onsite Surveys and Verification Onsite surveys and verification will be performed for the Direct Load Control Program as follows.

• On-site visits will be used to verify installation and performance of the load control equipment, according to program expectation. In some instances, site inspections may be made both pre- and post-installation.

• On-site end-use monitoring, for verification of load reduction for major equipment changeovers or controls, where the savings are large enough to justify the measurements.

M&V Analysis Methods The M&V analysis methods for the Direct Load Control Program include the following:

• Review of tracking system information and other customer forms and applications and verification documentation.

• Telephone survey of customers, to verify participation. • Analysis of customer billing data, when load reduction is sufficiently high to be detected through

this analysis. • Review of any end-use, building, or process modeling documentation, including input and output

for the type of model used. • Review of the algorithms / methodology used to calculate the effective coincident peak load

reduction (kW) and energy savings (kWh).

Exhibit A

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Section F: Program Economic Evaluation – Direct Load Control


Free ridership The most recently completed analysis of free ridership and Net-To-Gross Ratios (“NTGR”) was conducted by PA Consulting Group (PA) in 2009. The free ridership rate for this program as determined by PA is 0.00%.

Input Data, Description of Sources, and Results of Financial Analysis A copy of the input data sheets and financial models can be found in Technical Appendix Item DSM-2. These figures were all calculated based upon the information contained in this program data sheet and the materials referenced herein. The following tables summarize the results of the financial analysis for all three Scenarios.



Total Resource 2.91 $154,127,664 $52,910,716 $101,216,947

Utility 2.43 $157,999,104 $65,000,459 $92,998,646

Participant $51,805,493 ($3,744,209) $55,549,702

Ratepayer 1.28 $154,127,664 $120,677,392 $33,450,271

Societal cost 3.01 $159,215,524 $52,910,716 $106,304,807

Exhibit A

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Total Resource 2.65 $41,623,001 $28,873,957 $12,749,044

Utility 1.86 $44,027,940 $32,970,174 $11,057,766

Participant $1,449,305 ($5,391,184) $6,840,489

Ratepayer 1.22 $41,623,001 $36,824,418 $4,798,583

Societal cost 2.71 $41,765,167 $28,873,957 $12,891,210



Total Resource 2.65 $237,143,660 $97,872,686 $139,270,974

Utility 1.86 $245,105,492 $138,507,082 $106,598,410

Participant $58,175,384 ($33,311,539) $91,486,923

Ratepayer 1.22 $237,143,660 $204,644,298 $32,499,361

Societal cost 2.71 $242,904,531 $97,872,686 $145,031,844






Exhibit A

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Nevada Power Company Demand Response Program

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Section G: Dynamic Pricing Trial 2010-2012

Rationale and Supporting Data – Dynamic Pricing Trial In August 2009, Nevada Power submitted a Smart Grid Investment Grant (SGIG) Application to the U.S. Department of Energy (DOE) requesting funding support for our Advanced Service Delivery Project. The Grant Application was selected for potential funding by DOE in October, 2009. The Company is working with DOE to finalize the grant agreement provided to the Company on December 24, 2009, and will submit the Dynamic Pricing Trial Consumer Behavior Study Plan to the DOE in late February.

The initial design of the Trial is discussed below. The design will be finalized through discussions with the DOE and tariffs necessary to implement the final design of the Trial will be filed with the Commission for approval. Due to timing requirements with the DOE, Nevada Power intends to file the tariffs outside the IRP process after the design is finalized with the DOE but well before the hearings in this IRP. We would ask for approval of the tariffs consistent and coincident with the Commission’s IRP decision.

Nevada Power has negotiated with DOE to implement the dynamic pricing changes in its Southern Nevada pricing pilot in October 2011. This will allow customers to adapt to the new rates, beginning in the less expensive off-peak season, rather than in the high cost summer season. At the same time, Nevada Power will install smart meters in late 2010 and early 2011 to allow hourly kWh consumption data to be collected from trial customers while they continue to take service under Nevada Power’s standard flat rate schedules for residential and small commercial customers. This will allow the Company to collect at least six months of benchmark hourly kWh consumption for all customers being analyzed in the Southern Nevada pricing trial, before they are moved off of the existing flat rate schedule. The objective of the Dynamic Pricing Trial is to learn how customers respond to different advanced TOU rate structures and how their response is affected by the availability of technology and educational resources. The trial will provide empirical evidence to revise and improve pricing policy, rates and programs in the future.

Providing customers with pricing information that reflects cost variations by TOU period or Critical Peak Period (charge or rebate) has been demonstrated to produce behavioral changes which result in energy and demand reductions during high cost periods.

The California Statewide Pricing Pilot (CA SPP) was a two-year cooperative joint-venture between SCE, PG&E and SDG&E evaluating residential and small commercial customer responses to TOU and Critical Peak pricing options. It demonstrated customer acceptance of critical peak pricing and TOU rates and resulted in statistically significant demand reductions from customers. Highlights of the pilots include:

• TOU Customers decreased their average peak load usage by 4.1%.

• 95% of TOU Customers on the CA SPP felt that dynamic rates should be offered to all customers.

• Customers without enabling technology used up to 13% less energy during 5 hour critical peak periods;

• Technology enabled customers used:

o 25% less energy during 5 hour critical peak periods;

o 41% less energy during 2 hour critical peak periods

Exhibit A

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The PSE&G myPower two-year critical peak pricing pilot evaluated the impact of education versus technology on their residential customer’s energy usage during high cost periods. The pilot demonstrated that:

• Participants consistently lowered their energy use in response to price signals across two summers (peak demand reduction of 1.33 kW for myPower Connection (technology enabled), and 0.32 to 0.43 kW for myPower Sense (no technology).

• Participants achieved summer period energy savings of 3-4% when compared to the Control Group.

• Technology-enabled customers produced greater reductions in energy use in response to the TOU rates and the CPP events.

o 87% of myPower Connection; and, o 68% of myPower Sense achieved bill savings.

• Participants would recommend the program to a friend or relative; believe they saved money; believe the program is good for the environment and that PSE&G should offer more programs similar to myPower.

The BGE Smart Energy Pricing pilot during the Summer of 2008 covering approximately 1,000 residential customers who were split between two pricing models (peak time rebate and dynamic peak pricing) demonstrated that:

• Customers without enabling technology used 17-20% less energy during 5h critical peak periods with a CPP rate;

• Customers with enabling technology used 33% less energy during 5h critical peak periods with a CPP rate;

• Participants receiving a (moderate or high) peak time rebate used:

o 17 to 20% less energy during 5 hour critical peak periods without enabling technology;

o 23 to 27% less energy during 5 hour critical peak periods with a PCT;

o 29 to 33% less energy during 5 hour critical peak periods with a PCT and in-home signaling device.

Table 12a provides the budgets and Table 12b provides the targets for the Dynamic Pricing Trial. Due to the investigative nature of this proposed pilot the base and high level scenarios are identical. This measure is excluded in the low scenario.

Exhibit A

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Table 12a: Budgets, Program Years 2010-2012

Scenario Budget

TRC 2010 2011 2012

Base $ 1,200,000 $ 2,848,000 $ 2,940,000 0.94

Low $ - $ - $ - n/a

High $ 1,200,000 $ 2,848,000 $ 2,940,000 0.94



2010 2011 2012 2010 2011 2012

Base 0 2,102,000

2,107,000 0 4,498 4,498

Low 0 0 0 0 0 0

High 0 2,102,000

2,107,000 0 4,498 4,498

Supporting Savings Data – Dynamic Pricing Trial The energy and demand savings are estimated utilizing the results from the CA SPP, PSE&G and BGE pilots summarized above.




Marketing, Advertising and Tech Demo $ 800,000 $ 724,000 $ 662,000

Implementation $ - $ 1,624,000 $ 1,781,000

Rebates $ - $ - $ 197,000

Measurement and Verification $ - $ 100,000 $ 100,000



Exhibit A

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Marketing, Advertising and Tech Demo $ 0 $ 0 $ 0

Implementation $ 0 $ 0 $ 0

Rebates $ 0 $ 0 $ 0

Measurement and Verification $ 0 $ 0 $ 0

Utility Labor and Overheads $ 0 $ 0 $ 0

Total Program Cost This measure is not included in the low scenario.




Implementation $ - $ 1,624,000 $ 1,781,000

Rebates $ - $ - $ 197,000

Measurement and Verification $ - $ 100,000 $ 100,000



2010-2012 Program Execution – Dynamic Pricing Trial The Dynamic Pricing Trial will take advantage of the availability of ASD smart metering capabilities for the Company’s largest classes of small customers to learn how they will accept and respond to prices that more closely reflect the time variation in the utility’s costs. Combined with the investigation of the effect of technology and education on customers’ responses to alternative advanced pricing structures, the trial should play a major role in informing the future of cost-based electricity rates in Nevada.

Within a geographic trial area, Nevada Power will create1 test populations for three randomly pre-assigned advanced dynamic rate “treatments.” A set of 12 sample populations (four for each advanced

1 One-time incentive payments may be proposed to obtain minimum acceptance rates.

Exhibit A

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rate treatment)2 will be randomly selected from eligible customers in each of three rate classes, Single Family Residential (RS), Multi-Family Residential (RM) and Small General Service (GS.) In addition, four default TOU rate sample populations will be created from customers in each class who opt not to accept the pre-assigned advanced dynamic rate treatment they are offered. The default rate for each class will be a standard optional TOU rate, already existing in the utility’s tariffs, and containing an annual revenue guarantee. A single control group will also be randomly selected from each of the three classes to remain on their existing non-TOU flat rate schedule and receive no other treatments. Eligible customers within the trial area not in a control group will not have the option to continue taking service under their existing non-TOU flat rate schedule.

These test populations described in the Company’s SGIG Grant Application will be created from a total population of approximately 127,000 RS, RM and GS customers, all of whom will be equipped with ASD smart meters supported by the DOE grant. At a minimum, hourly interval kWh consumption will be collected for evaluation for all of these customers. Inactive or ineligible customers will be excluded from the pricing trial, including Optional TOU, ACLM, existing sample and Large Residential customers. Control group samples will be set aside from the eligible customers in each class. Each non-control group customer will receive one of 16 combinations of 1) receiving or not receiving a technology package: 2) receiving or not receiving a package of enhanced energy information/education; and 3) assignment to one of the three advanced dynamic rates or the default TOU rate. With four technology/education packages for each of four rate treatments and a separate control group (with no technology/education package) there are 17 samples that must be filled for each of the RS, RM and GS classes. Each sample is filled by a stratified random selection process from among all eligible customers in each class.

We will test the following three different advanced rate structures:

The Enhanced Time of Use (TOU-E) Rate identifies the highest cost Summer Peak Season and shortens the daily On-Peak Period relative to existing optional TOU rates for the RS, RM and GS classes. By isolating the cost information sent to customers during the highest cost hours of the Summer Peak Season this TOU rate will improve the accuracy of cost based rate information in all summer peak hours. This rate will also be the TOU platform for the other two advanced dynamic rates described below. It will provide important information on customer understanding and acceptance of more finely tuned TOU rates for future broader application.

2 A 9 sample population design may be required for RM and GS classes due to limitied eligible customer

populations within the geographic area.

Exhibit A

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The Dynamic Critical Peak Pricing (CPP) Rate further separates the very highest cost Critical Peak hours from the On-Peak Period of the Summer Peak Season. It is based on TOU-E with a pre-set, dispatchable critical peak $/kWh charge applicable during Critical Peak Events. Critical Peak Events may be called for either system reliability or economic dispatch reasons, but will be limited to five consecutive hours for any customer, in any day.

The Dynamic Peak Time Rebate (PTR) has the same Critical Peak Event definitions as the CPP Rate. However, instead of customers under this rate paying a very high Critical Peak rate for all their kWh used during the event, these customers will continue to pay the TOU-E Rates for the kWh they use during the event. They will also receive a Critical Peak Rebate for verifiable reductions in their kWh use during the event. To compute verified kWh savings during a Critical Peak Event, the kWh used for each hour of the event will be subtracted from the corresponding hour of an individual customer baseline load shape. The rates are designed so that customers under PTR and CPP rates have equal incentives to reduce kWh during the Critical Peak Event.

The Default Rate (TOU-S) will be NPC’s standard optional TOU Rate (O-TOU Rate A) available to customers in each of the trial Rate Classes. This rate has a lowest rate provision that will limit a customer’s annual payments under it to no more than they would have paid under the existing flat rate. O-TOU Rate A also has a contract obligation of at least one year under the rate. The obligation for pricing trial customers will be extended to cover the duration of the trial.

NPC will also designate a control group within each of the three trial classes who will receive smart meters, will be linked to the AMI/MDM infrastructure, and can be monitored appropriately but who would not receive the three trial package components of additional on-premises technology, information/education or advanced rates. The control groups will also be excluded from any general program marketing not also directed to all customers outside of the trial target area. The Control Groups will remain on the standard non-TOU flat rate for each class.

2010-2012 Program Management Plan – Dynamic Pricing Trial Trial participants will be randomly selected and assigned to the twelve advanced rate treatment cells with an opt-out provision to take service under the default rate. A marketing plan will be developed using some combination of direct mail, direct contact, telephone solicitation, and other channels (e.g. e-mail, door hangers) as necessary. Fundamental baseline surveying of participants and control group members will permit proper adjustments for self-selection, survivor, and other typical biases. To meet the requirements of the DOE grant, the Company will place every eligible customer on a dynamic rate option. However, to meet state requirements, customers will have the option of the default rate which is a currently approved rate option with an annual revenue guarantee. The Company will explain the rate/treatment option for which they are selected and advise participants of their default option. Materials will explain the opportunities to change behavior and save on power bills as well as advise customers that the trial’s time-differentiated rates will display substantial differences between off, mid, on, and critical peak periods, individual participants who use higher than average shares of their total electricity consumption during the high cost peak periods will end up spending more on electricity during the trial than they would have otherwise.

Trial and control group members will both be monitored for:

Exhibit A

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• energy usage;

• energy costs;

• load shapes;

• changes in occupancy, appliances, and equipment;

• response to peak events;

• customer service inquiries and events; and,

• other interactions with the Company (including program participation) and awareness of energy issues.

Prior to the trial and throughout the trial, both trial and control group members will be surveyed for household and business demographics, attitudes, behavior, experiences, and satisfaction. Surveys, focus groups, and on-site interviews will be conducted with both trial and control group members to help isolate the influence of the package of advanced utility services.

Customer service will be provided by Front Office personnel specifically trained to identify Dynamic Pricing Trial program participants and provide appropriate customer service.

The pilot structure and rates will be designed and monitored by Nevada Power’s Regulatory Affairs department while program implementation from the Back Office requirements through to the Customer Systems requirements will be a matrix-managed cross functional effort with primary business process management (BPM) and coordination provided by the DR business unit.

M&V Plan

M&V Objective With this program, a critical peak pricing tariff is combined with customer control architecture. Depending on the nature of the system, a customer will set an equipment control regime based on the pricing periods in the tariff. Alternatively, Nevada Power will be able to activate control of specific equipment with limited customer override options during summer critical peak periods. The M&V objective will be to quantify the energy savings and demand reductions resulting from either alternative used for the Price Response Load Control Program.

Approach The utility’s EM&V contractor will work closely with Nevada Power to assess and confirm the effects of the Dynamic Pricing Trial. The EM&V Contractor will prepare a Program-specific M&V Plan to guide this work. This plan will include approaches for quantifying the demand reductions and energy savings resulting from customer participation in the Program. These approaches are based on using the data collection procedures and analytical techniques that Nevada Power has developed and refined for its DR Program in previous years.

Exhibit A

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Sample Selection Communicating devices have been installed for participants in this program. New sampling will be required for selecting customers to verify equipment installation and performance.

Onsite Surveys and Verification Onsite surveys and verification will be performed for the Dynamic Pricing Trial as follows.

• On-site visits will be used to verify installation and performance of the load control equipment, according to program expectation. In some instances, site inspections may be made both pre- and post-installation.

• On-site end-use monitoring, for verification of load reduction for major equipment changeovers or controls, where the savings are large enough to justify the measurements.

M&V Analysis Methods

Usage and billing data that will be collected for program participants using communicating devices will be used for the M&V. Other types of data used in the analysis include runtime data for the controlled units, measured data on the capacities of the controlled units and data on various predictor variables (e.g., temperature, household characteristics, etc.).

These data are used in regression analyses to examine customers’ baseline electricity use and how this use changes during control events. Statistical regression analysis will be applied to the usage and billing data to estimate demand reductions and energy savings as functions of temperature, humidity, and time of control. The regression equations are estimated to allow for incorporation of weather adjustments, seasonal factors, and end-use specific variances.

Section H: Program Economic Evaluation – Dynamic Pricing Trial


Freeridership The most recently completed analysis of free ridership and Net-To-Gross Ratios (“NTGR”) was conducted by PA Consulting Group (PA) in 2009. The freeridership rate for this program as determined by PA is 0.00%.

Input Data, Description of Sources, and Results of Financial Analysis A copy of the input data sheets and financial models can be found in the Technical Appendix Item DSM-2. These figures were all calculated based upon the information contained in this program data sheet and the materials referenced herein. The following tables summarize the results of the financial analysis for all three Scenarios.

Exhibit A

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Total Resource 0.94 $9,537,014 $10,189,994 ($652,980)

Utility 0.94 $10,275,310 $10,972,293 ($696,984)

Participant 0.00 $4,108,869 $0 $4,108,869

Ratepayer 0.60 $9,537,014 $15,819,458 ($6,282,444)

Societal cost 0.98 $9,940,063 $10,189,994 ($249,931)



Total Resource n/a $ 0 $ 0 $ 0

Utility n/a $ 0 $ 0 $ 0

Participant n/a $ 0 $ 0 $ 0

Ratepayer n/a $ 0 $ 0 $ 0

Societal cost n/a This measure is not included in the low scenario.



Total Resource 0.94 $9,537,014 $10,189,994 ($652,980)

Utility 0.94 $10,275,310 $10,972,293 ($696,984)

Participant 0.00 $4,108,869 $0 $4,108,869

Ratepayer 0.60 $9,537,014 $15,819,458 ($6,282,444)

Societal cost 0.98 $9,940,063 $10,189,994 ($249,931)


Exhibit A

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• Low Scenario = n/a


Although these values do not demonstrate that this Dynamic Pricing Trial is initially cost effective, the results from the previously referenced pilots indicate that a larger scale deployment following this initial market evaluation has the potential for significant reductions of both demand and energy use with the associated benefits.

Exhibit A

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Section I: Energy Storage 2010-2012

Rationale and Supporting Data – Energy Storage Thermal energy storage systems (TES) shift electricity usage for air conditioning and process cooling from on-peak to off peak time periods. The ability to shift the peak demand for air conditioning to off peak periods is valuable for Nevada Power which experiences a sharp peak demand increase each afternoon as air conditioning units work hard to counteract the repetitively hot afternoons found in the Mojave Desert. Thermal energy systems have been in the market place for a number of years but have not experienced significant market penetration due to a high first cost and concerns regarding the reliability and performance of the equipment. TES can also be used to follow load, manage peak loads, improve power quality, defer upgrade investments, support peak pricing programs, and support renewable projects. Nevada Power is primarily focused on thermal energy storage systems used to shift air conditioning loads from on-peak to off-peak periods. Thermal energy storage can refer to a number of technologies that store energy in a thermal reservoir for later reuse The principal application today is the production of ice, chilled water, or eutectic solution at night, which is then used to cool environments during the day. A kilowatt-hour of electricity consumed at night can be produced at much lower marginal cost. Thus, these types of systems are proving to be a reliable and efficient ways to reduce critical peak demand.

In 2008 Nevada Power conducted an initial investigation of TES with the fielding of a Market and Technology trial for Ice Bear units installed at two small commercial installations. The result of that test demonstrated that ice storage technologies are capable of creating ice during the off-peak and mid-peak periods and that deploying the energy stored in the ice to provide cooling during the on-peak period negating the need to run the air conditioning compressor units during the on-peak period. This test demonstrated that the Ice Bear equipment was capable of achieving approximately a 90% reduction in peak period demand for the full six hours of the on-peak period. The increased efficiency of running the equipment at night (lower ambient temperatures) roughly offsets the added energy required to generate the ice. The load shift was obtained with no net increase of energy and during some days minor energy savings were observed.

This proposed measure takes the next step beyond the initial Ice Bear test. This proposed measure begins in 2010 with a small pilot to explore the potential fuller deployment of TES. The pilot will determine if there is a market for TES with the sweetener of a utility incentive and validate the assumptions for incentives as provided in this proposed measure. If the first year pilot demonstrates that this is a viable measure it will gradually expand in 2011 and 2012.

As proposed this measure will recruit commercial customers for the installation of thermal energy storage units to offset peak energy and demand costs. The scenario envisioned would have the customer purchase and own the required equipment with Nevada Power providing an incentive based on the kilowatt hours shifted, but other proposed scenarios will be considered in the procurement process.

In addition to thermal energy storage, Nevada Power will be following the advancement of batteries for storage capabilities. There are, after all, many ways to store energy. They include chemical, electrical, thermal, kinetic, and potential energy storage methods. The appeal for a workable method for large-scale electric storage is so important that this has been a major area of research by scientists for decades and warrants following advances in these technologies.

Exhibit A

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http://en.wikipedia.org/wiki/Energy_storage

http://en.wikipedia.org/wiki/Ice

http://en.wikipedia.org/wiki/Eutectic

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Table 16a provides the budgets and Table 16b provides the targets for the Direct Load Control measure. Due to the investigate nature of this pilot the base and high scenarios are identical and this measure is not included in the low scenario.

Table 16a: Targets and Budgets, Program Years 2010-2012

Scenario Budget

TRC 2010 2011 2012

Base $ 306,000 $ 300,000 $ 393,000 n/a

Low None None None n/a

High $ 306,000 $ 300,000 $ 393,000 n/a



2010 2011 2012 2010 2011 2012

Base n/a n/a n/a 28 28 42

Low n/a n/a n/a n/a n/a n/a

High n/a n/a n/a 28 28 42

Supporting Savings Data – Energy Storage Ice on Coil - External Melt (ICEM)

Circulating a low temperature glycol solution through the ice storage coils charges the ice storage system. The storage container holds water at the level covering the coils, and ice is formed around the outside of each coil. When discharging the ice storage system, chilled water circulates through the container in direct contact with the ice. The ice melts from the exterior of the ice rings and the ice melt becomes part of the chilled water system.

Ice on Coil - Internal Melt (ICIM)

The ice storage system is charged the same way as in the direct contact Ice on Coil – External Melt system. Low temperature glycol circulates through the coils and ice forms around the outside of each coil; however, unlike direct contact, the water and ice melt do not circulate through the chilled water-cooling loop, but rather remain in the container.

During the discharge mode, a warmer glycol solution flows through the coils melting the ice ring that surrounds the ice coil. The ice coil is a heat exchanger that indirectly transfers the ice melt BTUs to the

Exhibit A

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warm glycol. This process is also called an "internal melt system," since the ice begins melting on the inside of the ice ring, where the coil and the ice meet.

The internal melt ice on coil system uses a “right sized” standard chiller with ice making controls to charge the tanks and to help cool the facility during peak cooling load and energy use times. This means that chillers can also be sized smaller due to the TES operation and reduce total energy use. Rightsizing the installed chiller capacity and balancing the amount of storage installed is a good balance to minimize connected load to the grid, ensuring storage gets used, and offering the customer a flexible, modular cooling system that can change and adapt to changing building usage and or growth. If the chiller is right-sized, the ancillary support equipment is also sized appropriately

Encapsulated Ice (EI)

In this system, plastic capsules, generally in the shape of balls, are filled with de-ionized water. Thousands of capsules are placed in a container (tank). The container is then filled with a glycol solution. During the charge mode (ice build), cold glycol solution, typically at 22°F or below, is circulated through the container and around the outside of the water-filled capsules. The water in each capsule will freeze as implied by the name "encapsulated ice." During the discharge mode (ice melting), the same glycol solution is circulated through the container and out to the load, thereby melting the ice as the cooling load is satisfied.

Application Example– Ice on Coil - Internal Melt

Most TES systems are modular. They can be factory of field combined in groups of two, three or more modules. For example a CALMAC based module is about 7.5 feet in diameter and about 8 feet tall. Discharging at 42 degrees F. over six hours it can provide about 140 ton-hours of cooling at an average discharge rate of about 23 tons. If discharge requirement are more extreme, the net usable capacity is less. Conversely, if the requirement is less extreme, the net usable capacity of each module is more. Different sized modules can then be chained together to match the customer load.

Chillers will pump glycol as a heat transfer fluid. When cooling loads are somewhat lower and electricity is less expensive (in the night) the chillers will pump low temperature glycol into the tanks to make ice. The next day the ice is available to cool return glycol and act as a heat exchanger thus removing electric chiller capacity demand from the on-peak rate period (1 to 7 pm).

The essential element of the ice storage tanks (in the case of CALMAC) is a modular insulated, polyethylene tank containing a spiral wound plastic tube “heat exchanger” surrounded by water. The water in the tank never leaves the tank and has been applied in many desert high night time ambient installations. It is frozen to store cooling capacity and melted to provide cooling capacity. The tank is available in sizes ranging from 140 ton-hours to over 486 ton-hours of usable capacity. At night, water containing 25% ethylene glycol is cooled by a chiller and is circulated through the tank tubing, extracting heat until eventually about 95% of the water in the tank is frozen solid. The ice is built uniformly throughout the tank by the temperature averaging effect of closely spaced counter-flow heat exchanger tubes.

This measure is designed based on the demand savings achieved by reducing the operation of air conditioning compression equipment or compressors during on peak period. Demand savings will be determined by the tons of air conditioning offset during on-peak periods by the thermal storage units. As noted earlier the general performance of ice storage units was tested by Nevada Power in 2008 and found to successfully shift air conditioning load away from the on-peak period

Exhibit A

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Implementation $ 54,000 $ 55,000 $ 40,000

Rebates $ 196,000 $ 190,000 $ 284,000



Total Program Cost $ 306,000 $ 300,000 $ 393,000



Marketing, Advertising and Tech Demo $ 0 $ 0 $ 0

Implementation $ 0 $ 0 $ 0

Rebates $ 0 $ 0 $ 0

Measurement and Verification $ 0 $ 0 $ 0

Utility Labor and Overheads $ 0 $ 0 $ 0

Total Program Cost This measure is not included in the low scenario.

Exhibit A

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Implementation $ 54,000 $ 55,000 $ 40,000

Rebates $ 196,000 $ 190,000 $ 284,000



Total Program Cost $ 306,000 $ 300,000 $ 393,000

2010-2012 Project Execution – Energy Storage The implementation contractor will identify customers, obtain their commitment to purchase the units through value proposition/ROI based sales, managing the installation, paying an incentive for the TES system costs, managing the customer service work, and providing all the required ongoing support & reporting, including coordinating with the M&V provider.

In addition the implementation contractor will handle market and customer outreach, analyze customer feasibility, administer the incentive program and report on progress resulting in the installation of a portfolio of TES technologies. Application of this technology will be used to offset HVAC and process electric cooling loads. The program will be open to TES solutions and will consist of TES systems manufactured by companies such as TRANE/Calmac, FAFCO, Ice Energy, Cyrogel, Baltimore Aircoil Company, Evapco, Inc. and other well established providers of TES systems.

Actions by the implementation contractor will include:

• Expanding the available market support from manufacturers, distributors, design firms and installers of TES equipment by assisting them in their market out-reach, customer awareness/education efforts

• Coordinate with state and market-wide TES technology innovation conferences/seminars/webinars where design firms, new technology providers, installers, and end user can learn about TES applications and its benefits.

• Partner with large real-estate property and real estate management firms and the casino/hospitality market to identify properties whose load profiles would benefit from TES technology.

• Develop web based materials and use electronic processing for easy customer use.

• Offer incentives to any customer designated channel participants as opposed to only the end use customer

• Integrate available third party Financing options to assist customers

Exhibit A

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• Coordination with the State of Nevada, SNARSCA, and other local agencies to utilize their influence to improve training and outreach.

• Leverage marketing dollars through cooperative marketing & advertising efforts with qualified channel partners.

2010-2012 Project Management Plan – Energy Storage Nevada Power will utilize an implementation contractor for the delivery of this measure. Nevada Power will assign a program manager to manage the delivery of the measure and the work of the contractor. Developing the pilot will be the core responsibly of the contractor but Nevada Power will assist with material development, support through normal channels of promoting DSM programs, and by promotional support and introductions provided by Nevada Power’s Account Executives.

2010-2012 Data Delivery and Tracking – Energy Storage Data and results related to this measure will be gathered from customers via program applications as well as participating contractors and manufacturers. Updated program results will be provided to the Nevada Power Project Manager and uploaded to Data Store monthly via electronic reporting protocols as well as traditional written reports.

M&V Plan

M&V Objective The M&V objective will be to quantify the energy savings and demand reductions resulting from the Energy Storage Program.

Approach The utility’s EM&V contractor will work closely with Nevada Power to assess and confirm the effects of the Energy Storage Program. The EM&V Contractor will prepare a Program-specific M&V Plan to guide this work. This plan will include approaches for quantifying the energy savings resulting from customer participation in the Program.

The EM&V Contractor will prepare a report on the analysis and the estimated impacts.

Sample Selection Energy Storage units have been installed for participants in this program. New sampling will be required for selecting a sample of customers to verify equipment installation and performance.

Onsite Surveys and Verification Onsite surveys and verification will be performed for the Energy Storage Program as follows.

• On-site visits will be used to verify installation and performance of equipment. In some instances, site inspections may be made both pre- and post-installation.

• On-site end-use monitoring, for verification of major equipment changeovers or controls, where the savings are large enough to justify the measurements.

Exhibit A

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Usage and billing data that will be collected for program participants using communicating devices will be used for the M&V. Other types of data used in the analysis include runtime data for the controlled units, measured data on the capacities of the controlled units and data on various predictor variables (e.g., temperature, business characteristics, etc.).

These data are used in regression analyses to examine customers’ baseline electricity use and how this use changes during control events. Statistical regression analysis will be applied to the usage and billing data to estimate demand reductions and energy savings as functions of temperature, humidity, and time of control. The regression equations are estimated to allow for incorporation of weather adjustments, seasonal factors, and end-use specific variances.

Exhibit A

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Nevada Power Company Demand Response Program

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Cost Benefit Analysis The Energy storage measure will focus on thermal energy storage utilizing equipment that forms ice during off-peak period and melts the ice during on-peak periods to reduce air conditioning demand. Nevada Power proposes that the measure be a pilot program. Only if the pilot program demonstrates sound results it will grow to a into a full scale program. Thermal energy storage has demonstrated that from a technology perspective that it can be successful. The pilot will investigate a modest sized deployment to identify whether this measure should be continued as one part of Nevada Power’s portfolio of demand side management and demand response measures and programs.

Based on the initial findings of the Ice Bear test, this pilot is expected to produce similar results and a full cost-benefit analysis will be conducted based on the results. No cost/benefit analysis for the pilot was performed as a standalone program. However, the costs were included when evaluating the cost effectiveness of the full DR Program.

Section J: Supporting Documentation The M&V Report for the 2008 program year for the Air Conditioning Load Management program implementation is provided in the Technical Appendix Item DSM-18.

Exhibit A

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Exhibit A

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Nevada Power Company Residential EnergyEfficient Lighting Program

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Residential EnergyEfficient Lighting Program January 2010

Exhibit A

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2

Table of Contents Program Summary................................................................................................................................3

Section A: 2008 Program Results..........................................................................................................4 2008 Analysis ...................................................................................................................................4 2008 Lessons Learned.......................................................................................................................5

Section B: 2009 Program.......................................................................................................................6 2009 Program Execution ...................................................................................................................6 2009 Results to Date .........................................................................................................................7

Section C: Proposed 20102012 Program .............................................................................................8 Program Design ................................................................................................................................8 Rationale and Supporting Data ........................................................................................................12 Supporting Savings Data .................................................................................................................14 20102012 Program Implementation Plan........................................................................................18 20102012 Program Execution ........................................................................................................19 Measurement and Verification (M&V) Plan ....................................................................................20

Section D: Program Economic Evaluation ......................................................................................... 21 Cost Benefit Analysis......................................................................................................................21 Freeridership ...................................................................................................................................22 Input Data, Description of Sources, and Results of Financial Analysis ............................................. 22 Interpretation of Results ..................................................................................................................24

Section E: Supporting Documentation............................................................................................... 25

List of Tables Table 1: 2008 ENERGY STAR® Lighting Results .................................................................................................................. 4 Table 2: Program Year 2009 Results through August 31, 2009 ................................................................................................. 7 Table 3: Budgets, Program Years 20102012 ........................................................................................................................... 9 Table 4: Savings Targets, Program Years 20102012...............................................................................................................10 Table 5a: Base Scenario Proposed Targets and Budgets, Program Years 20102012.................................................................10 Table 5b: Low Scenario Proposed Targets and Budgets, Program Years 20102012 .................................................................11 Table 5c: High Scenario Proposed Targets and Budgets, Program Years 20102012.................................................................12 Table 6: Measures by Year, Program Years 20102012 ...........................................................................................................16 Table 7: CFL Placement in the Home .....................................................................................................................................17 Table 8a: Base Scenario Program Budget by Category, Program Years 20102012 ................................................................18 Table 8b: Low Scenario Program Budget by Category, Program Years 20102012.................................................................18 Table 8c: High Scenario Program Budget by Category, Program Years 20102012 ................................................................19 Table 9: Freeridership, Program Years 20102012...................................................................................................................22 Table 10a: Base Scenario Cost Test Results 20102012...........................................................................................................22 Table 10b: Low Scenario Cost Test Results 20102012 ...........................................................................................................23 Table 10c: High Scenario Cost Test Results 20102012............................................................................................................23 Table 11a: Base Scenario Utility Economic Evaluation ............................................................................................................23 Table 11b: Low Scenario Utility Economic Evaluation.............................................................................................................24 Table 11c: High Scenario Utility Economic Evaluation ............................................................................................................24

Exhibit A

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• Program Name: Residential EnergyEfficient Lighting

• Program Status: Continued/Expanded

• ProgramManager: To be determined

• Primary Contractor(s): To be determined by RFP

• 2009 Budget: $3,100,000

• Proposed Budget: 2010: 2011: 2012:

Low $ 3,326,000 $ 2,833,000 $ 2,575,000

Base $ 4,157,000 $ 3,541,000 $ 3,219,000

High $ 5,197,000 $ 4,425,000 $ 4,023,000


Base 3.17

High 3.08

Program Summary The ENERGY STAR® Lighting program is a marketbased residential program that provides direct incentives to consumers for the retail purchase of energy efficient lighting products. Incentives are typically delivered to Nevada Power Company’s customers through discounted retail pricing for energy efficient lighting. Previously this program has supported compact fluorescent lights (CFLs) and pin based CFL fixtures. This proposed program expands the included lighting products to potentially include advanced CFLs enhanced incandescent light bulbs and light emitting diodes (LEDs). Product discounts and rebates are provided for specific products that have earned the national ENERGY STAR® rating and logo.

ENERGY STAR® is a voluntary labeling program that is administered by the U.S. Environmental Protection Agency in partnership with the U.S. Department of Energy. The label is recognized around the U.S. as a trusted energy efficiency standard. ENERGY STAR® establishes energy efficiency specifications and standards that are at least 15% better than federal energy standards, and identifies and promotes qualifying energy efficient products.

In southern Nevada, the program works directly with retailers, local residents, customers, property management firms, and a variety of agencies and organizations to deliver the program. The distribution of CFLs is achieved through a combination of retail channels, direct distribution, direct installation and community outreach events

Through this program, Nevada Power has participated in the transformation of consumer markets by:

• Moving more ENERGY STAR® products into the retail marketplace;

• Making energy efficient lighting products more affordable for customers; and

• Providing customers valuable energy efficiency education and guidance through various outreach events.

Exhibit A

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Section A: 2008 Program Results Based on the success of the program in early 2008, Nevada Power decided to expand the expenditures in the program during the second half of 2008 to capture additional energy savings. With the expansion of the program, actual expenditures exceeded the original budget by 49.5%. However, this program expenditure expansion proved to be very successful based on the final results. The total number of units exceeded the original target by 135.3% and, as result, the energy savings target was exceeded by 137.0%. In addition, the actual TRC was 161.9% higher than the target of 3.02.

Table 1 summarizes the 2008 ENERGY STAR® Lighting program results.

2008 Analysis As the year unfolded, the program demonstrated an everexpanding market presence. Relationships with program “partners” evolved in 2008 as well, resulting in participation in a variety of unique special events and innovative marketing opportunities: from Home Shows to partnerships with local casino groups to large Earth Day celebrations.

The 2008 results reflect a focus on growth in a number of channels aimed at developing creative methods of achieving energy savings. The intention was to expand existing relationships with big box retailers and grocery store chains in addition to developing new partnerships with local employers in order to reach as many Nevada Power customers as possible. As a growing number of customers become increasingly aware of the presence of energy efficiency lighting and fixtures, the challenge turned towards reaching those who were still unfamiliar with ways of saving electricity, especially related to lighting. The expanded outreach to these customers was achieved through a combination of retail channels, direct distribution, direct install and outreach events. The successful completion of the 2008 program is impressive in its achievements for many reasons. Despite a global economic downturn and the hardhit economy of the Silver State, the program was able to achieve 145,394,585 kWh of energy savings through the distribution of 2,463,025 CFLs.

Of particular note in 2008 were the partnerships that were developed with casino properties for the distribution of CFLs and other energy efficiency and conservation information directly to their employees. The partnership added credibility to the initiative and distributed the CFLs directly to the employees, many of which are in the lower income portion of our communities.

Table 1: 2008 ENERGY STAR® Lighting Results


Budget $3,100,000 $4,632,881 149.5%

Units 1,046,847 2,463,025 235.3%

Demand Savings (kW) 7,004.2 20,272.0 289.4%

Energy Savings (MWH) 61,357.5 145,394.6 237.0%

TRC 3.02 7.91 261.9%

Exhibit A

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NV Energy contracts with Ecos Consulting of Portland, Oregon, to deliver this program to customers in southern Nevada. Ecos also administers the same program for NV Energy’s northern Nevada and California service territories; however, the program design is slightly different in each region. Ecos has proven to be a valuable partner in the delivery and success of this program.

2008 Lessons Learned The following are lessons that have been learned over the program life and that have contributed to improving the performance and effectiveness of the program.

• Timing of Retail Promotion Launch: The program discovered that it is often difficult for manufacturers to deliver inventory to distribution centers and to position product on shelves until late spring.

• Recycling As a Selling Point: In 2008, it became clear that CFL recycling is becoming an important factor in consumers’ decision to purchase CFLs.

• No Two Manufacturers Are the Same: In 2008, one channel of CFL distribution was negatively impacted due to inconsistent performance by one manufacturer. The following factors form the basis for the decision not to proceed with this manufacturer in 2009: lack of timely and accurate sales data, delayed start to promotion, and premature termination of promotion during critical fall months without prior notification or explanation.

• Local Partnerships Are Important: The program is becoming increasingly aware that partnerships with local employers and community organizations are an extremely effective way to reach a large number of employees who are also Nevada Power customers, acquiring substantial kWh savings in the process.

• Cross Program Collaboration Is Critical: In an effort to increase exposure of all energy efficiency and conservation programs, the lighting team continues to expand relationships with all NV Energy conservation and efficiency programs.

• Quantifying Cost and Energy Savings for Consumers: Moving beyond the early adopters of energyefficient lighting technology requires a renewed marketing effort. Despite constant and deliberate marketing campaigns aimed at educating the consumer about energyefficient light bulbs, there are still a large number of Nevada Power customers who are unaware of the discounted price, corresponding energy savings, and the utility’s involvement in the rebate program.

Additional details regarding the performance of this program in 2008 are included in Section G of the 2009 Annual DSM Update Report provided in Exhibit B.

Exhibit A

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Section B: 2009 Program The following discussion of the 2009 program provides a basis of the proposed 20102012 program.

The 2009 ENERGY STAR® Lighting program is a continuation of the successful 20072008 program and remains a marketbased resource acquisition program with a goal of 61,357.5MWh of annualized energy savings.

Nevada Power continues its effort in transforming consumer markets by:

• Moving more ENERGY STAR® products into the retail marketplace,

• Making energy efficient lighting products more affordable for customers, and

• Providing customers valuable energy efficiency education and guidance through various outreach events.

2009 Program Execution The 2009 Residential EnergyEfficient Lighting Program, as in past years is designed to deliver cost effective energy savings to the residential market.

This successful program will be continued through the following initiatives.

• Nevada Power continues to promote partnerships with local employers to reach a large number of their employees, with a focus on reaching lower income customers. This partnership produced significant savings and is critical to the continued strong performance of this program.

• Nevada Power continues its existing relationships with big box retailers and grocery store chains. By shifting the start date for some of the big box retailers to March, this has contributed to the program’s ability to reach its goals earlier in the year.

• CFL recycling is an important determinant in a consumer’s decision to purchase efficient light bulbs. In 2008, the program partnered with The Home Depot to make CFL recycling bins available at all Nevada stores and, at various outreach events, field representatives were successful at convincing people who were previously averse to purchasing CFLs that there was now a viable option due to the ability to recycle the bulbs.

• The success of the lighting program depends, in part, on a solid relationship with manufacturers based on consistent communication and balanced information exchange.

• Moving beyond the early adopters of energy efficient lighting technology requires a renewed marketing effort. Despite constant and deliberate marketing campaigns aimed at educating the consumer about energy efficient light bulbs, there are still a number of Nevada Power customers who are unaware of the energy saving opportunities with the installation of more efficient lighting. Future program success can be enhanced by a revamped marketing campaign designed to clearly quantify both the energy and financial savings associated with the lighting rebate program and to create a sense of urgency to replace less efficient lighting.

• As consumers become more aware of the benefits of CFL bulbs, they are beginning to search for a variety of styles, output, and functions in addition to efficiency. The program, working in close

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collaboration with the manufacturers, has further expanded its product offering to include additional colors and functions.

2009 Results to Date Results for 2009 through August 31 reflect distribution and sales of more than 1.8 million units to the market with an associated energy savings of 97,921,637 annual kWh. The results indicate that Nevada Power reached the initial program goals (86,997,260 kWh) by June. Nevada Power will continue to invest in this highly cost effective program for the remainder of the 2009 program year. Table 2 summarizes the program results through August 2009.

Table 2: Program Year 2009 Results through August 31, 2009

Total Program Target Actual (YTD) % of Target

Budget, Total Program $3,100,000 $3,192,589* 103%

No. of Installed Measures 1,084,935 1,802,613 166%

Energy Savings (MWh) 63,567 97,922 154%

*Includes expansion program

Exhibit A

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8

Section C: Proposed 20102012 Program

Program Design The goal for the proposed Residential EnergyEfficient Lighting Program has been expanded beyond promoting CFLs to include the introduction of the nextgeneration of CFLs and LEDs and potentially superefficient incandescent bulbs to customers and to encourage them to install these new lighting technologies in their residences. The program will capitalize on the success and momentum of the current Residential Lighting Program, introducing the new lighting technologies through a phased approach to help prepare the market for the 2012 Nevada lighting standard change. The upstream buydown program model of the current Residential Lighting Program provides an ideal avenue to encourage both market push and pull for the new technologies, allowing for modifications to the measure mix as the technologies achieve market acceptance and production volume increases. The Implementation Contractor will coordinate all manufacturer and retailer recruitment, marketing, training and incentive payment activities for the program. The program scope includes the following activities:

Manufacturer Recruitment. The Implementation Contractor will leverage its relationships to recruit leading manufacturers to participate in the Residential EnergyEfficient Lighting Program. Manufacturers will be solicited to provide marketing materials and lighting products at a reduced cost to the end user.

Marketing. The Implementation Contractor will work with manufacturers to develop marketing materials to draw consumers to program information at the point of purchase.

Outreach Events. Outreach events will be conducted to engage targeted market segments and provide opportunities for consumer education.

Invoicing. All invoicing and incentive processing for participating manufacturers will be handled by the Implementation Contractor.

Reporting. The Implementation Contractor will furnish monthly, quarterly and annual reports, as appropriate.

To maximize the program’s savings potential, the mix of measures throughout the threeyear program period will utilize a phased approach to technology introduction.

While Nevada’s 2012 lighting standard will reduce the energy savings gained from standard CFLs, it is anticipated based on market developments and forecasts by bulb manufacturers that an enhanced incandescent bulb will meet the standard. The enhanced incandescent bulb will be less efficient than the standard CFL, therefore continuing to promote standard CFLs in 2012 may, if required, be considered costeffective savings while the program ramps up marketing efforts and increases incentives for other lighting. If the standard CFL is continued in 2012, the potential perbulb incentive for standard CFLs will be reduced with the budget funds shifted to specialty CFLs, next generation CFLs, LEDs and potentially superefficient incandescent bulbs.

Based on the limited information currently available regarding the direction of residential lighting in the year 2012 from manufactures and those closely following the lightning market, the proposed plan for the 2012 program year is based on Nevada Power’s best estimation of the market that that time. Nevada Power will leverage whatever direction the market goes and ensure that the utility is prepared to actively participate in those market opportunities.

This marketdriven program will include a consistent sales and training effort to communicate program benefits and offerings to both target customers and retailers. Educating retailers will help build their

Exhibit A

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9

understanding and enthusiasm for the program so they can accurately sell the benefits of new lighting technologies to residential customers. Proposed training will enable retailers to make informed recommendations about the optimal lighting technologies for a range of applications.

The estimated budgets and goals are provided in Tables 4 and 5. Reduced energy savings and subsequent increases in cost per kWh for 2012 in the proposed plan are a result of the state lighting standard that begins January 1, 2012. Implementation Contractor compensation includes all marketing costs as well as management and administration costs.

The mix of measures included in the proposed 20102012 program is based on a variety of determinants in addition to kWh savings measurements. As discussed in the “Rationale and Supporting Data” section, the program will include technologies that will promote a fundamental market transformation, help customers adopt energyefficient technologies, and provide improved functionality, features and quality.

The rationale for the basescenario, lowscenario and highscenario estimates are as follows:

Base – Basescenario estimates are derived from a mix of nextgeneration CFLs, LEDs and potentially superefficient incandescent bulbs. The Base scenario is a carryover from the previous program (2007 2009) with calculations based on a decreasing number of standard CFLs over time with an escalating number of nextgeneration CFLs, enhanced incandescent bulbs and LEDs following a projected trend in the evolution of the efficient lighting market.

Low – The lowscenario estimates assume that the program continues as currently structured (current generation CFLs) with the addition of nextgeneration CFLs only but with decreased resources available for incentives.

High – The highscenario estimate uses the basescenario mix but assumes that nextgeneration lighting products in fact are developed on an optimistic schedule, provide quality results, and are embraced by the market at an accelerated rate. This scenario also includes installation of CFLs through the Multifamily Direct Install program and is based on the assumption that products will improve in quality and decrease in cost somewhat faster than projected in the base scenario.

An overview of the proposed budgets and targets at the base, low and high scenarios for this program are presented in Table 3 and Table 4. Program details by scenario are provided in Tables 5a, 5b, and 5c.


Scenario Budget

TRC 2010 2011 2012 Base $4,157,000 $3,541,000 $3,219,000 3.17 Low $3,326,000 $2,833,000 $2,575,000 3.19 High $5,197,000 $4,425,000 $4,023,000 3.08

Exhibit A

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Table 4: Savings Targets, Program Years 20102012

Scenario

Annual Energy Savings (kWh) Annual Demand Savings (kW)

2010 2011 2012 2010 2011 2012 Base 69,375,550 60,527,038 5,913,000 2,588 2,258 221 Low 56,201,788 48,421,630 4,730,400 2,098 1,807 177 High 80,955,175 75,418,442 7,391,250 3,198 2,979 292


Total Program – Base Scenario 2010 2011 2012

Budget, Total Program $4,157,000 $3,541,000 $3,219,000

No. of Installed Measures 1,618,400 1,413,000 532,000

Demand Savings (kW) 2,588 2,258 221

Energy Savings (kWh) 69,375,550 60,527,038 5,913,000

Measure 1 – Standard CFL

No. of Installed Measures 1,600,000 1,343,000 0

Energy Savings (kWh) 65,600,720 55,063,604 0

Measure 2 – Next Generation CFL

No. of Installed Measures 0 50,000 300,000

Energy Savings (kWh) 0 1,962,788 2,617,050

Measure 3 – LED

No. of Installed Measures 18,400 20,000 232,000

Energy Savings (kWh) 722,306 837,456 3,035,778

Exhibit A

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Total Program – Low Scenario 2010 2011 2012











Measure 3 – LED



Exhibit A

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Total Program – High Scenario 2010 2011 2012











Measure 3 – LED



Measure 4 – Standard CFL MF Direct Install

No. of Installed Measures 30,000 0 0

Energy Savings (kWh) 1,286,625 0 0

Rationale and Supporting Data Installing energyefficient lighting is a proven way to reduce residential energy use. As technologies improve, customers have an increasingly wider selection of energyefficient bulbs to fit an array of applications. In developing a program around these new technologies, it is important to consider a measure mix that will promote a fundamental market transformation and adoption of energyefficient technologies in addition to choosing the bulbs that have the highest available kWh savings per bulb. To this end, introducing new technologies with improved functionality and quality is critical to the future development of the efficient lighting market.

While some next generation bulbs capture the same or fewer kWh savings as current CFLs, they have additional features that will appeal to a much wider audience. Next generation CFL and LED technologies, as well as superefficient incandescent bulbs, will offer the same appearance and function as traditional incandescent bulbs—including color and ability to dim light—addressing many customers’ complaints about current CFLs. By improving functionality and visual comfort, these new CFLs, LEDs

Exhibit A

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and superefficient incandescent bulbs have the capacity to capture a greater market share, thereby achieving greater savings through higher adoption rates and better retention.

Introducing next generation technologies to the existing residential lighting program will create several key benefits for this program:

Drive Market Transformation. Next generation CFLs, LEDs and superefficient incandescent bulbs are projected to be available for introduction into the residential market during the 2010 program year. Such measures are already in retail channels in limited quantities and at premium costs, however, as technology improves we expect to see a wider variety of products that meet and exceed the latest Energy Star® standards. Feedback from manufacturers and channel partners suggest that next generation CFLs, LEDs and superefficient incandescent bulbs will soon experience an expanded product offering coupled with improved quality and functionality. By designing a program that can incorporate these measures, Nevada can continue as a leader in lighting efficiency and encourage manufacturers to further develop and promote these new technologies.

Wider Market Penetration. Some customers have resisted the adoption of energyefficient lighting because current energyefficient lighting options (CFLs, in particular) lack certain features of incandescent bulbs, such as warm color and the ability to dim. By introducing an alternative to traditional incandescent bulbs that fulfills this functionality, the program will be able to appeal to a wider audience and capture additional sockets that could not previously be filled.

Improved Environmental Impact. Next generation CFLs contain less mercury than current CFLs and LEDs and superefficient incandescent bulbs contain none. As a result, these new technologies are more environmentally friendly and will help address some consumers’ concerns about the environmental safety of energyefficient lighting.

Longer Lifespan. Energyefficient lighting technologies have a longer measure life than current generation incandescent and halogen lighting options, which will reduce replacement hassles for consumers and produce extended energy savings for each upfront investment. Improved bulb life will also make these new technologies more appealing to consumers.

Prepare Market for 2012 Nevada Standard Change. A new baseline for lighting energy consumption will take effect in Nevada beginning January 1, 2012, creating a 25 lumensper Watt standard that will replace current incandescent bulbs as the lighting baseline. The proposed program includes a measure mix to ramp up implementation of a range of alternatives by the mandated implementation date. By introducing a moderate number of the future measures in 2010 and 2011, the program will lay the foundation for manufacturers to provide adequate product volume to facilitate customer choice in 2012 when the market reacts to the new standards.

By clearly communicating the benefits of new energyefficient lighting technologies to consumers through targeted marketing campaigns, significant energy savings and market transformation will occur. Activities such as program outreach, aggressive point of sales marketing and signage coupled with continued education of retail channel partners have all contributed to the dramatic increase in consumer awareness of energyefficient lighting. Qualitative observations from program field representatives combined with continuous sales growth in retail channels indicate a substantial increase in consumer interest in energyefficient lighting suggesting that additional product offerings, increased functionality, higher kWh savings and improved product aesthetics will be well received and embraced by many consumers.

Exhibit A

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Supporting Savings Data

New Measures While the exact composition of the proposed 20102012 efficient lighting portfolio is subject to change as new technologies actually come online and achieve the ENERGY STAR® rating, we expect a mix of the following product categories to be included. The Implementation Contractor will work with manufacturers to understand and propose efficiency measures for these and other energy efficient lighting products, and to structure effective incentive programs.

• Next generation CFLs Increased efficiency. A key advantage of next generation CFLs is decreased freeridership by addressing market barriers of standard CFLs, such as startup time, color, mercury content and dimmer compatibility. These attributes will be attractive to many consumers and encourage CFL placement in sockets that consumers have been unwilling to fill with typical CFLs for the previous reasons. Additional “specialty” CFL applications such as 3 way and reflectors will increase the savings opportunities.

• Superefficient incandescent bulbs – Halogen infrared reflective technology, used in super efficient incandescent lamps, is advancing rapidly. Today, there is a 40 W lamp on the market that replaces a traditional 60 W incandescent (approximately 800 lumens). Prototypes of improved efficiency halogen IR capsules have shown efficacies of up to 40 lm/W at high light output levels and are expected to achieve 30 lm/W at 800 lumens. In the coming years, it is expected these lamps will eventually approach efficiencies of some CFLs, and to be appealing to customers who do not yet prefer CFLs. Marketing will be necessary to educate consumers about new technology.

• LEDs – LEDs are another rapidlyadvancing technology. ENERGY STAR® now lists more than 25 qualifying products, many of them replacement lamps. The DOE has documented industry trends in efficiency improvement and price reduction. Residential applications will be a new technology during the first program year and the program activities will educate consumers about the availability of the new products. Many LED products in the current ENERGY STAR® dataset exceed 40 lm/W, and some exceed 60 lm/W. More and more of these products can be phased into the program as additional lamps exhibit the efficacy, color, and lifetime requirements of ENERGY STAR®, and as retail costs continue to decrease.

• CFLs through Multifamily Direct Install program The Nevada Power Multifamily Direct Install program will introduce multifamily property owners, managers and tenants to nocost energy efficiency measures. The program will use an innovative relationshipbased approach that will lead to immediate energy savings through lowcost direct installation of CFL lighting devices that the program provides to the customer at no cost.

20102012 Savings Overview In 2010, standard CFLs will continue to be the main source of energy savings, achieving 41 annual kWh savings, followed by an increasing number of super CFLs with a prolonged lifespan. Late in 2011, we begin to see a sunset pattern on the standard CFL bulbs with an expanded number of super CFLs introduced along with enhanced incandescent and LEDs. In addition, freeridership associated with CFLs increases to 50% as incremental costs of this measure in the retail channel drop along with the need to heavily incentivize this measure.

In 2012, as the state lighting standard (AB 178 of the 2007 session) takes effect mandating that general purpose light bulbs produce at least 25 lumens. The program incorporates a major shift in the measure

Exhibit A

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mix due to the reduction in watts of the basecase measure. Shifting from 60 watts to 32 watts maximum, based on 800 lumens and 25W/lumen, kWh savings for existing measures are reduced, underscoring the need to promote an increasing number of LEDs to achieve desired kWh savings under tightened mandates. A conservative base case of 25 watts was used for 2012 savings calculations based on the assumption that an enhanced incandescent bulb will be on the market at that time and will set a new base usage level. However, the base energy consumption level may be closer to 32 watts depending on what products are available in the market. There are a number of unknowns in the 2012 energy savings projections. These include the development of an enhanced incandescent bulb that meets the 25 lumens perwatt standard; the actual costs to the consumer for residential applications of LEDs; and definitions of specialty bulbs that may provide opportunities for the application of conventional CFLs. The proposed program for year 2012 is based on the best information that could be gathered at this time but, is in fact, a placeholder. The actual program that will be delivered in 2012 will depend on the development of newer and better lighting products and will need to be reassessed and the targets reset in the Annual DSM Update Report to be filed in August 2011. Table 6 illustrates this shift in deemed savings per measure from 2010 to 2012 along with the estimated number of units for the base scenario:

Exhibit A

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Table 6: Measures by Year, Program Years 20102012

2010

Measure # of units Demand Annual savings Total annual Watts kWh Watts kWh Savings

Std. Incandescent 60 Std. CFL 1,600,000 13 42.9 47.0 68,620,000

Super CFL 0 15 41.1 45.0 0

Enhanced incandescent 0 40 18.3 20.0 0

LEDs 18,400 15 41.1 45.0 755,550

Total 1,618,400 69,375,550

2011


Std. Incandescent 60

Std. CFL 1,343,000 13 42.9 47.0 57,597,913

Super CFL 50,000 15 41.1 45.0 2,053,125


LEDs 20,000 12 43.8 48.0 876,000

Total 1,413,000 60,527,038

2012


Enhanced incandescent 25

Std. CFL 0 13 11.0 12.0 0

Super CFL 300,000 15 9.1 10.0 2,737,500


LEDs 232,000 10 13.7 15.0 3,175,500

Total 532,000 5,913,000

Exhibit A

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Adjustment of Hourly Usage Rate In developing the 20102012 Action Plan, Nevada Power has revaluated the existing three hour daily usage rate per CFL currently used in Nevada Power’s programs. The threehourdaily usage figure is provided by DOE as a national average in their estimation of savings that can be achieved by energy efficient lighting. Following the logic that bulb usage rates differ depending on the location within a household and as saturation rates increase causing primary sockets to be filled with efficient lighting products, in some homes light bulbs in less commonly used sockets are now being replaced with efficient lighting products causing the hourly usage rates per bulb to decline. This extremely effective program has increased the CFL saturation in Nevada Power’s service territory over the last four years. As additional information pertaining to installation patterns and postpurchase habits became available, Nevada Power decided to adjust this number downward to 2.5 hours of usage per day for the 2010 program year and beyond.

While this adjustment in average burn time is an indication of program effectiveness, it is also requires a reassessment of overall kWh savings based on existing socket saturation studies. While the actual number applied to final program implementation may vary slightly pending the outcome of potential followup studies, the program energy savings calculations in this proposed program incorporate the assumption that 2.5 hour daily usage is realistic for the state of Nevada. In determining this estimated burn time, it was observed that the burn time used in California is 2.3 hours. Since estimated saturation rates for Nevada are lower than California, it is logical to assume that hourly usage rates per socket may be slightly higher. 1 , 2

Table 7 from the 2005 CLASS study highlights a portion of rationale behind the decision to adjust the hourly usage rate:

Table 7: CFL Placement in the Home

1 CFL Metering Study. KEMA. February 25, 2005 2 2005 California Statewide Residential Lighting and Appliance Efficiency Saturation Study. RLW Analytics, August 23, 2005

Exhibit A

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20102012 Program Implementation Plan The Residential EnergyEfficient Lighting Program will deliver costeffective energy savings to Nevada Power’s customers and will begin the market transformation to solid state lighting. The program implementation will continue the highly successful plan as used in prior program years. As noted previously this delivery will be updated to include increased marketing and the introduction and support of additional highly efficient lighting technologies.



Program Year 2010 2011 2012 Marketing, Advertising and Tech Demo

$194,208 $127,170 $57,456

Implementation Contractor

$776,832 $720,630 $261,744

Rebates $2,643,556 $2,232,656 $2,478,889

Measurement and Verification

$180,801 $153,514 $140,303


Utility Labor and Overheads

$336,603 $282,030 $255,608




$157,320 $101,736 $45,965


$629,280 $576,504 $209,395

Rebates $2,106,044 $1,786,124 $1,983,111


$144,452 $122,879 $112,177



$263,904 $220,757 $199,352


Exhibit A

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$298,008 $158,462 $75,810


$1,192,032 $897,953 $323,190

Rebates $3,034,889 $2,791,231 $3,098,611


$224,023 $192,451 $175,130



$423,048 $359,903 $325,259


20102012 Program Execution The program addresses lighting in the residential market through the following processes:

• The Implementation Contractor will provide training to Nevada Power’s key account representatives to assist them in encouraging businesses in the territory to specify qualifying products in their product offerings.

• The Implementation Contractor will provide content for Nevada Power’s branded collateral materials that can be used in multiple marketing channels such as the Commercial Retrofit Incentive program, Nevada Power newsletters, and bill inserts.

• The Implementation Contractor will provide collateral materials that can be used to represent Nevada Power at industry trade shows.

• The Implementation Contractor will verify reports from participating manufacturers detailing product shipping to the territory.

• The implementation contractor will invoice Nevada Power monthly for qualified lighting measures. Upon receipt of payment from Nevada Power, the implementation contractor will disburse earned incentive payments to each of the manufacturers that shipped the qualified lighting equipment into Nevada Power’s service territory.

• In 2008, the program partnered with The Home Depot to make CFL recycling bins available at all Nevada stores. At various outreach events, field representatives were successful at convincing people who were previously averse to purchasing CFLs that there was a viable option to recycle the bulbs. Nevada Power will continue to work to locate additional CFL recycling bins at other vendor locations.

Exhibit A

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20102012 ProgramManagement Plan Nevada Power will issue a Request for Proposals (RFP) in mid 2010 for this program. Actual award will be contingent on Commission approval of the program. The successful bidder will be responsible for marketing and program implementation. The selected implementation contractor will be required to work with technology vendors and internal departments to deliver a successful program.

20102012 M&V Data Store The NV Energy DSM M&V Data Store Web Portal, referred to as Data Store, is a web portal that has been customized for both Nevada Power Company’s and Sierra Pacific Power Company’s internal use. Its function is to track Demand Side Management (DSM) program performance. Nevada Power uses this management and tracking tool throughout the year to ensure that the planned investments provide clear value. The Data Store also supports the evaluation, measurement, and verification activities by providing the data needed for sample selection and verification of savings data.

Measurement and Verification (M&V) Plan The EM&V Contractor will perform evaluation, measurement and verification (EM&V) activities to confirm the savings being realized through the Residential Energy Efficient Lighting Program implemented in Southern Nevada.

Approach The procedures that will be used to perform the EM&V activities have been informed by standard technical references, such as the International Performance Measurement and Verification Protocol and the National Action Plan Model Energy Efficiency Program Impact Evaluation Guide.

Measuring and verifying these savings will require the following:

Verifying the numbers of CFLs purchased as a result of the program;

Determining the percentage of purchased CFLs that are actually installed; and

Estimating the extent to which installed CFLs are used.

To collect the data with which to verify the numbers of CFLs, LEDs and superefficient incandescent bulbs purchased as a result of the program, the EM&V Contractor will conduct instore intercept interviews with lighting purchasers (including CFLs and nonCFLs). Reaching consumers via retail store intercepts has been shown to be a reliable method for getting data to distinguish between CFLs purchased with and without the discount.

Sample Selection The EM&V Contractor will select samples of participating and nonparticipating retailers in the Southern Nevada service territory. At the selected stores, they will identify purchasers of either CFLs or nonCFLs and ask them for a brief (two to four minutes) interview. In the interview, they will ask questions pertaining to the quantity of CFLs that were purchased or that would have been purchased at alternative prices. The consumer intercept survey will also be used to recruit CFL purchasers for a followup telephone survey that will be used to assess key inputs to energy savings calculations (e.g., installation rates, hours of use and delta watts).

Exhibit A

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CFL purchasers will subsequently be interviewed by telephone two to three months after the intercept survey to verify installations. This followup telephone survey is used to collect the following types of information needed for the verification of savings:

Installation rates for the programdiscounted bulbs;

Hours of use (by room/fixture type); and

Characteristics (e.g, type, watts) of light bulbs that the CFLs replaced.

The homes of a subsample of the CFL purchasers interviewed by telephone will be visited to confirm data obtained through the telephone survey. The EM&V Contractor will use the site visit to confirm self reported data obtained on CFL storage, CFL usage, CFL installed location/application, CFL wattage (installed and replacement), and remaining CFL potential.

The EM&V Contractor will select samples of customers for these interviews that will ensure estimates of ±10% precision at the 90% confidence level. The interviews will verify where applicable (1) that the customers had participated in the program as indicated by program tracking records, (2) had received their rebate as expected, and (3) ask if their participation in the program would make them more likely to purchase new more efficient lighting products

M&V Analysis Methods A key determinant of energy savings for CFLs, LEDs and superefficient incandescent bulbs are the average hours of operation. Some data on hours of use for CFLs are available from the CFL metering study conducted in California in 2005. The EM&V Contractor will conduct a metering study for Southern Nevada customers. The general structure of the study would be as follows:

Metering will be conducted within a cluster sample of homes in Nevada Power’s service territory.

Allocation of sample to service territories and by dwelling type will be approximately proportional to numbers of residential customers.

Within each dwelling unit, meter all CFLs, LEDs and superefficient incandescent bulbs (except where there is a practical barrier to installing the meter).

Metering will be conducted using on/off date/timestamp loggers.

Metering will be conducted in waves, staggered at 3month intervals over the 3year period.

The EM&V Contractor will use the data from the metering along with similar data from other studies to determine how CFL runtime is affected by the number or saturation of CFLs in the home and room type/location.



Exhibit A

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Freeridership The most recently completed analysis of freeridership and NetToGross Ratios (“NTGR”) was conducted by PA Consulting Group (PA) in 2009. The freeridership rate for the total program as determined by PA is 32.8%.

Due to existing and future market forces, it is estimated that freeridership rates will increase for each bulb type over the three year action plan period as shown in Table 9.

Table 9: Freeridership, Program Years 20102012

Measure Estimated Freeridership Explanation

Current CFL 33% (2010) 40% (2011) 50% (2012)

CFLs are already in the market and these CFLs will continue to expand market penetration, resulting in increasing freeridership over time.

Next Generation CFL 5% (2010) 10% (2011) 15% (2012)

Next generation CFLs will be a new product in the market so initial freeridership rates will be lower than current CFLs. However, consumers may not distinguish between the CFLs, so some freeridership may result from product confusion.

HighEfficiency Incandescent

5% (2010) 10% (2011) 15% (2012)

These bulbs will be entirely new in the market and the program will be responsible for educating consumers about the new technology.

LED 0% (2010) 2% (2011) 4% (2012)

LEDs for residential applications will be a brand new technology during the first program year and the program activities will educate consumers about the availability of the new product. Small freeridership from early adopters may emerge in subsequent program years.

Input Data, Description of Sources, and Results of Financial Analysis A copy of the input data sheets and financial models is provided as Technical Appendix Item DSM2. These figures were all calculated based upon the information contained in this program data sheet and the materials referenced herein. The following tables summarize the results of the financial analysis for all three scenarios.



Total Resource 3.17 $35,576,826 $11,225,599 $24,351,227 $0.01

Utility 3.65 $ 37,009,340 $10,149,882 $ 26,859,458 $0.01

Participant 262.77 $79,977,376 $304,363 $79,673,012 $0.00

Ratepayer 0.39 $35,576,826 $91,559,772 ($55,982,946) $0.11

Societal cost 3.87 $43,421,998 $11,225,599 $32,196,400 $0.01

Exhibit A

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Total Resource 3.19 $28,610,356 $ 8,958,921 $19,651,436 $0.01

Utility 3.66 $29,756,509 $8,120,467 $21,636,042 $0.01

Participant 290.72 $64,335,073 $221,295 $64,113,778 $0.00

Ratepayer 0.39 $28,610,356 $73,601,692 ($44,991,336) $0.11

Societal cost 3.90 $34,921,138 $8,958,921 $26,962,217 $0.01



Total Resource 3.08 $43,091,112 $14,007,263 $29,083,848 $0.01

Utility 3.54 $44,881,491 $12,684,674 $32,196,816 $0.01

Participant 269.45 $96,606,717 $358,539 $96,248,178 $0.00

Ratepayer 0.39 $43,091,112 $111,081,770 ($67,990,659) $0.11

Societal cost 3.75 $52,567,496 $14,007,263 $38,560,233 $0.01



Total Costs $4,157,404 $10,918,449

Energy Savings (kWh) 48,782,078 818,190,912

Energy Benefits ($) $1,936,627 $52,214,689


Critical Peak Demand Savings KW 1,820 N/A

Exhibit A

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Total Costs $3,326,016 $8,735,345


Energy Benefits ($) $1,567,923 $41,944,424





Total Costs $5,196,711 $13,645,034


Energy Benefits ($) $2,273,106 $63,177,781



Interpretation of Results The Total Resource Cost (TRC) Test is the ratio of the discounted total benefits of a program to the discounted total costs over the life of the installed units. The TRC ratios, by scenario, are:




These values indicate this program is beneficial to the utility and its ratepayers.

It is noted that the costs of conserved energy, by scenario, are:


• Low Scenario = $0.01/ kWh


These values are significantly less than the programmed cost for energy for the company.

Exhibit A

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Section E: Supporting Documentation The M&V Report for 2008 is provided as Technical Appendix Item DSM19.

Exhibit A

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Exhibit A

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Nevada Power Company Second Refrigerator Collection and Recycling Program

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Second Refrigerator Collection and Recycling Program

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Exhibit A

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Section C: Proposed 20102012 Program ......................................................................................8 Rationale and Supporting Data ................................................................................................. 9 Supporting Savings and Budget Data ...................................................................................... 10 20102012 Program Execution ............................................................................................... 12 20102012 Program Management Plan .................................................................................... 12 20102012 Data Delivery and Tracking ................................................................................... 14 M&V Plan ........................................................................................................................... 14



List of Tables Table 1: 2008 Second Refrigerator Collection and Recycling Results................................................................................. 4 Table 2: 2009 Budgets and Targets .............................................................................................................................. 6 Table 3: 2009 Results through August 30, 2009.............................................................................................................. 7 Table 4: Budgets, Program Years 20102012 ................................................................................................................. 8 Table 5: Targets, Program Years 20102012 ................................................................................................................. 8 Table 6a: Base Scenario Proposed Targets and Budgets, Program Years 20102012 ............................................................. 9 Table 6b: Low Scenario Proposed Targets and Budgets, Program Years 20102012 ............................................................ 9 Table 6c: High Scenario Proposed Targets and Budgets, Program Years 20102012............................................................. 9 Table 7a: Base Program Budget by Category, Program Years 20102012 ...................................................................... 11 Table 7b: Low Program Budget by Category, Program Years 20102012....................................................................... 11 Table 7c: High Program Budget by Category, Program Years 20102012 ...................................................................... 12 Table 8a: Base Case Cost Test Results 20102012 ....................................................................................................... 17 Table 8b: Low Cost Test Results 20102012 ............................................................................................................... 17 Table 8c: High Case Cost Test Results 20102012 ....................................................................................................... 17 Table 9a: Base Case Utility Economic Evaluation ........................................................................................................ 18 Table 9b: Low Case Utility Economic Evaluation........................................................................................................ 18 Table 9c: High Case Utility Economic Evaluation ....................................................................................................... 18


Exhibit A

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• Program Name: Second Refrigerator Collection and Recycling Program

• Program Status: Continued/Expanded

• ProgramManager: Adam Grant


• 2009 Budget: $ 1,650,000

• Proposed Budget 2010: 2011: 2012:

Low $1,320,000 $1,453,000 $1,453,000

Base $ 1,650,000 $ 1,816,000 $ 1,816,000

High $2,062,000 $2,270,000 $2,270,000


Base 2.71

High 2.71

Program Summary The Second Refrigerator Collection and Recycling Program is designed to help customers reduce their energy consumption by removing a functional second refrigerator or freezer from their home and permanently removing that unit from the market place. Nevada Power benefits because the second refrigerator usually operates inefficiently; for example, is an older less efficient refrigerator; cools a small thermal load; and is often located in an unconditioned air space such as a garage. Any residential customer can take advantage of this program. The second refrigerator is dismantled and recycled and therefore is permanently removed from the electric system. The recycling process safely disposes of all potentially environmentally harmful materials.

Nevada Power, in conjunction with its implementation contractor solicits customers through bill inserts and media ads, and also leverages Nevada Power’s retail network to promote the program. Potential customers call the primary contractor to schedule the appliance pick up. The contractor calls the customer the day before the pickup as a reminder of the appointment, fills out a customer fact sheet while at the home, defaces the refrigerator, and recycles it at their EPAapproved disposal site. Upon verification that the refrigerator was recycled, Nevada Power pays the full recycling cost to the contractor and a $30 incentive to the customer.

Section A: 2008 Program Results The 2008 program results are summarized in Table 1. The actual annual energy savings in 2008 were 13,479 MWH which was 119.3% of targeted annual energy savings of 11,296 MWH. The work accomplished was very cost effective based on the actual results compared to expenditures. Actual expenditures were 74.4% of the budgeted amount. In addition to the energy savings, Nevada Power was able to achieve 95.9% and 138.5% of its unit and demand saving targets, respectively.

Exhibit A

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Table 1: 2008 Second Refrigerator Collection and Recycling Results


Budget $1,650,000 $1,228,095 74.4%

Units 10,000 9,590 95.9%


Energy Savings (MWH) 11,296.0 13,479.0 119.3%

TRC 2.17 3.69 170.0%

This program also provides a very import secondary benefit. Because the collected refrigerators are processed at CONTRACTOR’s EPA approved recycling facility, refrigerants, oils, PCBs, insulation, metal, plastics, and glass are removed in an environmental safe manner. The material recycling results for the 2008 program year are summarized below.

• Total Freon weight = 3,974 lbs (averaging 6.6 oz. per unit)

• Units Containing CFC12 = 8,219

• Units Containing CFC22 = 0

• Units Containing HFC134a = 1,372

• Units Containing HFC141b = 1,372

Metals, glass, plastic, insulation

• Metals totaling 1,774,150 lbs (averaging 185 lbs/unit)

• Glass totaling 14,385 (averaging 1.5 lbs/unit)

• Plastic 91,800 lbs (averaging 20 lbs/unit)

• Units Containing CFC11 Foam 6,809 lbs

• CFC11 Foam totaling 64,685 lbs (averaging 9.5 lbs/unit)

2008 Analysis Although the program did not reach its unit goal, it was effective in its primary goal of saving energy by permanently removing functioning second refrigerators or freezers from the market place. Actual expenditures of $1,228,095 were 74.4% of budget. Whereas, the program was able to achieve 95.9% of its targeted unit goal, 138.5% of its demand savings target, and 119.3% of its energy savings target. In

Exhibit A

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addition, the actual number of refrigerator units collected and recycled exceeded the 2007 results by 37.5%; 9,590 collected in 2008 compared to 6,977 collected in 2007.

The significant improvement compared to 2007 results was attributed to Nevada Power’s actions to ensure that the program operated throughout the entire year. This ensured that the program momentum was not lost during the later part of 2007 and the beginning of 2008. Advertising was not stopped at the end of 2007 but continued through the end of 2007 and the beginning of 2008. This helped maintain customer interest in the program and eliminated the time required to “reeducate” Nevada Power’s customers regarding the program.

In order to achieve the 2008 targeted goals, Nevada Power implemented the following:

• Nevada Power proposed tighter coordination between the program and retail point of sales (POS) in the implementation of the program. Nevada Power enlisted Sears and other retailers to collect qualifying units at the time of a new refrigerator or freezer delivery. This effort is in the early stages of its implementation. It is hoped that Best Buy will be added as another participant in this initiative.

• Nevada Power is working with schools to publicize the program and allow customers to designate that their rebate be paid directly to a chosen school district. This action has been rolledout in rural areas but has not achieved any significant results.

2008 Lessons Learned Nevada Power observed that during 2008 customers began “tightening their belts” by buying food in bulk amounts for example, supermarket sales and from warehouse stores. This has caused an increase in demand for secondary unit capacity and provides a strong incentive to retain the second refrigerator/freezer. Additionally, the housing and mortgage banking crisis dampened new home sales and home remodeling activities. Both home sales and remodeling activities often result in kitchen upgrades and replacement of old, working appliances. This was the primary reason for Nevada Power not achieving or exceeding its 2008 unit target.

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Section B: 2009 Program Achievement of the 2009 targeted goals will be more difficult to achieve because of the economic downturn. The following discussion of the 2009 program provides a context for the proposed 2010-2012 program.

Key 2009 performance indicator targets are provided in Table 2.

Table 2: 2009 Targets

2009 Targets

Budget $1,650,000

Units 10,000

Demand Savings (kW) 2,700.0

Energy Savings (MWH) 11,296.0

TRC 2.17

The program’s core targeting will not change in 2010-2012 from 2009. Unit eligibility criteria, collection processes, recycling processes, and customer incentives will remain unchanged in 2010-2012, regardless of scenario.

The main area of change for the 2009 program pertains to marketing.

• In response to 2009 economic conditions causing secondary units to be valued more highly because of consumer bulk food purchases, program advertising content increasingly will focus on the high cost of operating older units.

• In response to 2009 economic conditions causing fewer purchases of new appliances, increased importance will be placed on existing secondary units.

• Program awareness will be maintained using a mix of mass media vehicles, including bill inserts which has an efficient reach; very cost-effective, general market newspaper ads which has a high readership among the program’s core audience of homeowners aged 35-60, and television ads, which complements newspaper reach among the program’s core audience.

2009 Program Execution Key schedule-related milestones for CONTRACTOR’s execution of the 2009 program are summarized below:

• Initial pickups: January 2, 2009

• Final pickups: December 31, 2009

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• Recycling, final demanufacturing occurs: January 14, 2010, this allows two weeks from final pickups for all recycling activities to be completed.

• Final invoice and reports issued: January 31, 2010, this allows three weeks from final recycling activities to complete all reporting.

2009 Results to Date The program results through August 30, 2009 shown in Table 3 below.

Table 3: 2009 Results through August 30, 2009

2009 Targets 2009 Results to Date % Target

Budget $1,650,000 $723,958 43.9%

Units 10,000 6,601 66.0%

Energy Savings (MWh) 11,296 7,704 68.2%

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Section C: Proposed 20102012 Program Three scenarios have been developed for the 20102012 action plan period program:

• Base: target annual unit volumes consistent with the current program

• Low: target annual unit volumes assumed to be 80% of the base level

• High: target annual unit volumes provides for a 125% of the base level

In all scenarios employ a $30 perunit customer incentive and the same collection and recycling processes.

The “annual harvest rate” (AHR) is defined as average annual refrigerator and freezer units collected divided by the total number of residential electric service accounts. Typical pilot implementations have AHR’s of up to 0.75%, while commercialscale implementations usually have AHR’s of 1% to 2%. CONTRACTOR’s most aggressive programs in other jurisdictions have experienced AHR’s of 3% to 4%. Within this context, the three Nevada Power scenarios, assuming 724,950 residential service accounts have AHR’s during 20102012 as follows:

• Low: 1.1% AHR

• Base: 1.4% AHR

• High: 2.5% AHR

An overview of the proposed budgets and annual energy savings targets for each of the three scenarios is presented in Table 3 and Table 3a.


Scenario Budget TRC 2010 2011 2012

Base $1,650,000 $1,816,000 $1,816,000 2.71

Low $1,320,000 $1,453,000 $1,453,000 2.71

High $2,062,000 $2,270,000 $2,270,000 2.71



2010 2011 2012 2010 2011 2012

Base 10,350,006 11,391,540 11,391,540 2,871 3,160 3,160

Low 8,280,005 9,113,232 9,113,232 2,297 2,528 2,528 High 12,937,508 14,239,425 14,239,425 3,589 3,950 3,950

Exhibit A

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Program details by scenario are shown in Tables 6a, 6b, and 6c.


Total Program – Base Scenario 2010 2011 2012 Budget, Total Program $1,650,000 $1,816,000 $1,816,000 No. of Installed Measures 10,434 11,484 11,484 Demand Savings (kW) 2,871 3,160 3,160 Energy Savings (kWh) 10,350,006 11,391,540 11,391,540


Total Program – Low Scenario 2010 2011 2012 Budget, Total Program $1,320,000 $1,453,000 $1,453,000 No. of Installed Measures 8,347 9,187 9,187 Demand Savings (kW) 2,297 2,528 2,528 Energy Savings (kWh) 8,280,005 9,113,232 9,113,232


Total Program – High Scenario 2010 2011 2012 Budget, Total Program $2,062,000 $2,270,000 $2,270,000 No. of Installed Measures 13,043 14,355 14,355 Demand Savings (kW) 3,589 3,950 3,950 Energy Savings (kWh) 12,937,508 14,239,425 14,239,425

Rationale and Supporting Data

Specific Rationale The success of this program since 2003 clearly demonstrates that this program should be continued. Further, the generally successful outcome for the program in 2008 provides a sound basis for a moderate expansion of the program. An aggressive expansion of the program has been provided in the high case which maintains unit costs but presents a much higher risk than the actual results of falling short of the aggressive high case targets.

Specific Rationale Market research indicates that there is a significant presence of working second refrigerators and stand alone freezers in the Nevada Power service territory. For example, the U.S. DOE’s Energy Information Administration’s Household Electricity Report for the U.S. as a whole (published in 2005) indicated that

Exhibit A

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an average of 1.18 refrigerators and 0.35 freezers were present per household.1 This research has been further corroborated by 2003-2008 unit volumes for Nevada Power’s programs. Given this state of affairs – and given the relatively low costs to properly remove and dispose of such appliances, the program offers significant opportunities for cost-effective peak demand reduction and annual energy savings.

The essence of the program’s core theory is that many customers retain and operate spare appliances even though such units are old, inefficient, and/or ineffectively operated, for example, a secondary refrigerator is mostly empty, or used simply to keep beverages cold. These circumstances occur because the customer 1) does not recognize the full cost of operating the units in this way and/or 2) perceives a hassle factor regarding the disposal of the unit. The program overcomes this inertia by 1) publicizing the true costs of running the old, inefficient units, 2) making unit disposal convenient and no-cost, and 3) offering an incentive to further lure the customer away from the old unit.

The program also prevents the customer from either 1) using a haul-away and resale service, or 2) transferring the appliance to another Nevada Power’s customer. In either of these options, the older, inefficient appliance usually continues to be utilized. Furthermore, it provides for the safe disposal of the refrigerator.

Supporting Savings and Budget Data

Recycled Refrigerators and Freezers Savings Projected annualized energy savings per recycled refrigerator or freezer is 1,124.4 kWh, which is based on the 1,405.5 kWh figure in Paragon Consulting Services’ 2008 M&V report dated January 2009, which reduced by approximately 20%. The 20% reduction is an allowance for an increased number of harvested units falling under the federal 1990 energy efficiency standards during 2010-2012.

Budgets by Scenario Scenario-specific program budgets are provided in Tables 7a, 7b, and 7c below. For budget conservatism purposes, implementation contractor budgets assume that all harvested appliances are “first” unit in reality, a discount is provided by the implementation contractor for additional units picked up from a given service address.

1 See data at http://www.eia.doe.gov/emeu/reps/enduse/er01_us_tab1.html ; 126.0 million refrigerators divided by

107.0 million total households = 1.18 refrigerators per household; 37.9 million freezers divided by 107.0 million total households = 0.35 freezers per household.

Exhibit A

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Table 7a: Base Program Budget by Category, Program Years 20102012


$183,040 $201,450 $201,450

Implementation Contractor $913,130 $1,005,000 $1,005,000

Rebates $313,030 $344,520 $344,520





Table 7b: Low Program Budget by Category, Program Years 20102012


$146,450 $161,210 $161,210


Rebates $250,470 $275,710 $275,710





Exhibit A

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Table 7c: High Program Budget by Category, Program Years 20102012


$228,780 $251,860 $251,860


Rebates $391,270 $430,740 $430,740





20102012 Program Execution Key schedulerelated milestones for the implementation contractor’s execution of the 20102012 program are summarized below:

• Initial pickups: January 2, 2010

• Final pickups: by December 31, 2012

• Recycling: final demanufacturing occurs: December 15, 2012 (allows two weeks from final pickups for all recycling activities to wind down)

• Final invoice and reports issued: January 15, 2013 (allows approximately two weeks from final recycling activities to complete all reporting)

20102012 Program Management Plan The overall goal of program management is ensuring that the program is implemented, maintained, and completed at extremely high levels of quality, while meeting program budget constraints and program energy savings goals.

The discussion is divided into the following sections:

• Communications

• Tracking procedures

• Hiring and training procedures

• Contingency planning issues

Each section is described in turn.

Exhibit A

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Communications Communications between Implementation Contractor and Nevada Power will occur at least monthly. Additional status report meetings will be scheduled as warranted based on emerging program developments.

Tracking Procedures Unit tracking mainly pertains to reconciliation work conducted for scheduled and unscheduled units picked up from customer homes.

Processing of specific appliance units is tracked comprehensively within the contractor’s facility. For refrigerator and freezer recycling, note that when units are disassembled (and hazardous materials harvested), appliances will be flagged as such, and unitspecific material quantities subsequently will be tracked on an aggregated basis. For example, the compressor oils associated with refrigerator X will be reported as Y ounces, but the Y ounces will be grouped with oils from other refrigerators for reporting purposes of hazmat materials subsequently processed.

Hiring and Training Procedures Hiring and training procedures mainly pertain to unit collection and transportation staff; appliance distribution employees utilized in non retailer pickups, unit recycling technicians made up of contractor employees, and call center staff also made up of contractor employees.

Safety is an important aspect; the implementation contractor developed comprehensive ISO 14001 compliant procedures in 2004, and provides safety procedure updates regularly for example, with all new employees and subcontractors.

The same situation is true regarding handling of hazardous materials. Not only are contractor’s approaches 100% in compliance of all federal and state laws, but the Company has pioneered certain appliance recycling processes for example, incineration of CFC11 from unit foam that are significantly “above and beyond” legal requirements in deference to threats posed by Global Warming, and certified by RAL Quality Assurance Association the “UL” of Europe. Additionally, all inspections of CONTRACTOR recycling processing facilities by the U.S. EPA, utility program staff, or environmental auditors for example, SCS Engineers’ October 2005 review of Fullerton operations have passed with a 100% compliance rate.

Unit collection and transportation staff is typically solicited through local newspaper ads and/or the state unemployment office. Formal background checks are conducted by Choice Point of Alpharetta, Georgia, and include criminal background and drivers’ license checks including type of license. Background check result summaries will be provided to the Nevada Power’s Security Department, and such records will be maintained in employee personnel files. Road tests are then conducted for “finalists”. New hires will be briefed regarding all applicable program procedures before being deployed into the field, and work under the supervision of a more senior employee for several months before being considered for promotion. All unit collection and transportation staff will be required to carry picture ID badges and business cards.

Recycling technicians are similarly recruited and trained, although drivers’ license checks and bonding are not required since these employees do not drive company trucks, nor go into customer homes. New hires work directly under the supervision of the recycling facility manager, and are taught about the hazardous nature of many of the components found in refrigerators and freezers including Global Warming /Ozone depleting aspects.

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Call center staff members are typically recruited through local newspaper ads. Formal background checks include social security verification and criminal / credit checks. Additionally, employment histories and prior employer references are thoroughly reviewed. New hires are trained on applicable scripts for inbound calls regarding the Appliance Recycling programs, and are pretested with simulated calls before fielding “live” customer reservation requests. Call center staff members are subsequently monitored by supervisory staff on a weekly basis while receiving calls and handling customer orders.

Contingency Planning Issues In the event that program results significantly lag planned quantities, the Implementation Contractor will proactively work with Nevada Power’s management to suggest responsive measures.

Such contingency plans can include but are not limited to the following:

• Evaluate reallocation of media channel marketing efforts, for example, bill inserts versus community outreach versus print mass media versus web page media

• Evaluate increase in marketing budget, for example, increase marketing budget per unit

• Evaluate increase in customer incentive levels, for example, increase incentive amount per unit

• Evaluate change in pickup schedule frequency

20102012 Data Delivery and Tracking The implementation contractor will continue to utilize the webbased reporting and tracking system that was used for Nevada Power during 20032009, and will use it to provide requested reporting information for use in the Nevada Power Data Store.

Program reporting will focus on:

• Progress and status reports for example, cumulativetodate or from/tobased information regarding various program activities and volumes/metrics. These metrics will focus on 1) the number of units harvested, 2) unit attributes information for example, size, type, configuration, prior location, primary/secondary status, seasonal operating status, 3) the gross annual kWh impacts, and 4) Program monies expended.

• Materials reports consisting of harvested hazardous materials; presence or absence of mercury containing devices.

The Implementation Contractor will work jointly with Nevada Power regarding the development of mutually agreedto improved and/or asneeded evolving program reports for use with the 20102012 program implementation.

M&V Plan

M&V Objective The EM&V Contractor will perform evaluation, measurement, and verification (EM&V) activities to confirm the savings being realized through the Second Refrigerator Collection and Refrigerator Recycling that Nevada Power is implementing in Southern Nevada.

Exhibit A

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Approach The choices for procedures that will be used to perform the EM&V activities have been informed by standard technical references, such as the International Performance Measurement and Verification Protocol and the National Action Plan Model Energy Efficiency Program Impact Evaluation Guide.

The following EM&V elements will be performed:

• Descriptions of energy and demand savings metrics

• Identification of the need for deemed savings measures and how their values will be developed.

• Description of how realization rates will be determined

• Description of the methodologies, procedures and data tracking systems to be used to conduct the EM&V work, including data gathering, sampling and analysis methods.

• Description of other activities to be conducted in support of EM&Vrelated activities, such as market baseline assessments and determining stipulated (deemed) savings values

Sample Selection

The EM&V Contractor will approach the EM&V of the Second Refrigerator Recycling Program by collecting and analyzing data to measure the following:

• Numbers of refrigerators and freezers collected and recycled;

• Average annual kWh savings per collected appliance; and

• Average kW reduction per collected appliance.

A first aspect of conducting measurements of program activity is to verify the numbers of refrigerators and freezers collected and recycled. The EM&V Contractor’s verification work is based on using program tracking data. To begin the verification effort, the contractor will review the tracking system data on reported recycled units to determine that all reported units were eligible for the program.

Onsite Surveys and Verifications The EM&V Contractor will also conduct a brief telephone verification survey that focuses on verification issues. In particular, the verification survey determines that the pickup is recalled by customers and briefly explores satisfaction issues with respect to the pickup. The EM&V Contractor will ask the customers to verify whether the refrigerator or freezer was in working condition when picked up by the recycler.

M&V Analysis Methods To estimate average annual kWh savings for refrigerators and freezers recycled through the Second Refrigerator Collection and Recycling Program, the EM&V Contractor will use an approach to estimating UECs for the gross savings analysis. Using this data on atdeath energy use, the EM&V Contractor will estimate regression equations that quantify the relationship between atdeath energy usage (as measured through the DOE test) and such factors as the appliance’s atmanufacture UEC, type and configuration, household size, or door opening frequency, weather, conditioned/unconditioned location, concentration of

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use in particularly warm or cool parts of the year.. The EM&V Contractor will also develop one set of estimates of energy use for the population of recycled appliances by applying these regression equations to tracking system data characterizing these factors for appliances in the program population.

The EM&V Contractor will collect these various types of data and will use them in their analysis of gross savings for the recycled refrigerators and freezers.

• The tracking system database of Nevada Power’s implementation contractor will provide information on, model number, size and age of discarded refrigerators and freezers. The EM&V Contractor will use this data in developing sampling frames and weights, in creating a population characterization matrix, and in performing verification work.

M&V Data Store The Nevada DSM M&V Data Store Web Portal, referred to as “Data Store”, is a web portal that has been customized for both Nevada Power Company’s and Sierra Pacific Power Company’s internal use. Its function is to track Demand Side Management (DSM) program performance. The Data Store supports the evaluation, measurement, and verification activities by providing the data needed for sample selection and verification of savings data. The Data Store is “populated” with data provided by the implementation contractor on a monthly basis.



Freeridership The most recently completed analysis freeridership and NetToGross Ratios (“NTGR”) was conducted by PA consulting in 2009. The freeridership rate for this program as determined by PA consulting is 35.6%.

Input Data, Description of Sources, and Results of Financial Analysis A copy of the input data sheets and financial model output are provided as Technical Appendix Item DSM2. These figures were all calculated based upon the information contained in this program data sheet and the materials referenced herein. The following tables summarize the results of the financial analysis for all three scenarios presented in this program data sheet.

Exhibit A

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Table 8a: Base Case Cost Test Results 20102012


Total Resource 2.71 $14,545,304 $5,368,404 $9,176,899 $0.02 Utility 3.18 $15,484,213 $4,862,838 $10,621,375 $0.02 Participant $21,455,803 $0 $21,455,803 $0.00 Ratepayer 0.53 $14,454,304 $27,257,550 ($12,712,246) $0.12 Societal cost 3.10 $16,649,955 $5,368,404 $11,281,551 $0.02

Table 8b: Low Cost Test Results 20102012



Table 8c: High Case Cost Test Results 20102012



Exhibit A

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Table 9a: Base Case Utility Economic Evaluation


Total Costs $1,650,000 $5,282,000


Energy Benefits ($) $290,846 $15,199,703



Table 9b: Low Case Utility Economic Evaluation


Total Costs $1,320,000 $4,226,000


Energy Benefits ($) $232,671 $12,159,490



Table 9c: High Case Utility Economic Evaluation


Total Costs $2,062,000 $6,602,000


Energy Benefits ($) $363,571 $18,999,843







Exhibit A

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It is noted that the cost of conserved energy by scenario are




These values are significantly less than the projected cost for energy for the company.

Given these and the other factors listed above, the program is economically viable, and achieves significant energy savings.

Section E: Supporting Documentation M&V Report for 2008 for the Second Refrigerator Collection and Recycling Program is provided as Technical Appendix Item DSM20.

Exhibit A

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Exhibit A

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Nevada Power Company Mobile and Manufactured Homes Retrofit Program

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Mobile and Manufactured Homes Retrofit Program

January 2010

Exhibit A

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Section B: 2009 Program..............................................................................................................5 2009 Program Execution ......................................................................................................... 6

Section C: Proposed 20102012 Program ......................................................................................6 Rationale and Supporting Data ............................................................................................... 12 Supporting Savings Data ....................................................................................................... 12 20102012 Program Execution ............................................................................................... 14 20102012 Program Management Plan .................................................................................... 15 M&V Plan ........................................................................................................................... 15


List of Tables Table 1: Results, Program Year 2008........................................................................................................................... 4 Table 2: New Manufactured Home Shipments and Trends in State of Nevada .................................................................... 5 Table 3: Targets and Budgets, Program Year 2009......................................................................................................... 6 Table 4: Budgets, Program Years 20102012 ................................................................................................................ 7 Table 5: Targets, Program Years 20102012 ................................................................................................................. 7 Table 6a: Base Scenario Proposed Targets and Budgets, Program Years 20102012 ............................................................ 8 Table 6b: Low Scenario Proposed Targets and Budgets, Program Years 20102012 .......................................................... 10 Table 6c: High Scenario Proposed Targets and Budgets, Program Years 20102012.......................................................... 11 Table 7a: Base Scenario Program Budget by Category, Program Years 20102012.......................................................... 13 Table 7b: Low Scenario Program Budget by Category, Program Years 20102012.......................................................... 13 Table 7c: High Scenario Program Budget by Category, Program Years 20102012 ......................................................... 14 Table 8: Savings Estimation Approach by Type of Measure ........................................................................................... 16 Table 9a: Base Scenario Cost Test Results 20102012 .................................................................................................. 18 Table 9b: Low Scenario Cost Test Results 20102012 .................................................................................................. 18 Table 9c: High Scenario Cost Test Results 20102012.................................................................................................. 18 Table 10a: Base Scenario Utility Economic Evaluation................................................................................................. 19 Table 10b: Low Scenario Utility Economic Evaluation................................................................................................. 19 Table 10c: High Scenario Utility Economic Evaluation ................................................................................................ 19


Exhibit A

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• Program Name: Mobile and Manufactured Homes Retrofit Program

• Program Status: Revised

• Program Manager: To be determined

• Primary Contractor(s): To be determined

• 2009 Budget: $411,000

• Proposed Budget: 2010: 2011: 2012:

Low $ 345,000 $ 1,129,000 $ 1,451,000

Base $ 432,000 $ 1,400,000 $ 1,800,000

High $ 540,000 $ 1,737,000 $ 2,236,000


Base 1.35

High 1.35

Program Summary The Mobile and Manufactured Homes Retrofit (“MMHR”) Program is designed to be a direct installation program that serves one of Nevada Power’s more difficult to reach customer segments. The existing manufactured and mobile home market is difficult to reach and is generally not being well served by existing energy efficiency programs. A review of the manufactured and mobile homes in southern Nevada revealed a low penetration of the energy efficient measures. There are many factors leading to market barriers for the manufactured and mobile home market such as split incentives, park management directives, income, age and language. In addition, there are a limited number of contractors serving this market segment in part because of the limited degree to which residents take advantage of available programs due to age, language, economic or educational barriers. The market barriers to reach this customer base are significant but can be overcome using innovative approaches.

Section A: 2008 Program Results The ENERGY STAR® New Manufactured Homes Program was the predecessor to the Mobile and Manufactured Homes Retrofit (“MMHR”) Program proposed. While the new retrofit program takes a completely different approach to serving this customer segment, the results of the predecessor program are provided herein. This will provide the reviewer with the contrast between the previous program, which experienced very disappointing results, and the complete change of approach for serving this customer segment through the newly proposed program.

The ENERGY STAR® New Manufactured Homes Program was intended to move a substantial share of the new manufactured homes built in Nevada Power’s service area from what has been basic energy construction under the U.S. Department Housing and Urban Development (“HUD”) standards to high performance ENERGY STAR® levels by the strategic application of rebates. Although the leap from HUD standard construction to ENERGY STAR® represents a significant energy efficiency increase, requiring a more than a 30% reduction in energy usage. The changes also require a significant increase in the cost of the home.

This program was launched in a troubled housing market in 2007 and was not able to generate any traction with the participants in the manufactured home market and thus achieved no energy savings.

Exhibit A

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This was balanced with small expenditures because the contract with the implementation contractor was a pay for performance contract based on energy savings. Work in 2008 focused on program delivery changes and efforts to market the merits of moving to ENERGY STAR® in the market place.

Prior to the housing downturn in Nevada Power’s service territory, the ENERGY STAR® New Manufactured Homes Program was expected to achieve the following:

• Significantly improve the energy efficiency of new manufactured homes placed in Nevada Power’s service territory by capturing 43% of the market for ENERGY STAR® New Manufactured Homes over the threeyear program period.

• Receive from the thermal envelope improvements a reduce system load by reducing cooling equipment capacity by eliminating on average about ½ ton of installed cooling capacity per home.

• Achieve additional energy savings and demand reduction through the installation of compact fluorescent lamps (“CFLs”) replacing of incandescent bulbs.

• For electricallyheated homes, change the heating equipment practice to heat pumps from the current preference for electric resistance furnaces.

• Educate the key players in the industry—particularly the retail community, which is the interface with the homebuyers—as to the benefits of ENERGY STAR® and energy efficient construction, thereby sustaining program gains into the future.

In the 2008 Demand Side Management (“DSM”) Annual Update Report, Nevada Power recommended that this program be continued in 2009 at the previously approved budget level. However, in light of two disappointing years and a continued decline in the housing market, this program will not reach its original energy savings goals. Because of this lack of market participation in 2007 and 2008, Nevada Power has been using 2009 as a planning period for the development, proposing, and obtaining approval of a completely new approach to improve the energy efficiency of existing mobile and manufactured homes. Nevada Power will, however, continue to honor the program requirements for those that sell an ENERGY STAR® New Manufactured Home through the end of 2009.


Total Program Target Actual Variance

Budget, Total Program $358,000 $10,899 3%

No. of Installed Measures 300 0 0%

Demand Savings (kW) 975 0 0%

Energy Savings (MWh) 900.6 0 0%

Exhibit A

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2008 Analysis This program was severely impacted by the continued downturn in the residential new home market. The slowdown in new home sales in Nevada was particularly acute for the manufactured housing market. The number of new manufactured homes delivered into Nevada in 2008 dropped by more than 30% from 2007, see Table 2, and down about 75% when compared to 2005. Not only did this diminish the available market, but the industry continued to focus on selling existing inventory in 2008, mainly homes built prior to the program that did not qualify for the ENERGY STAR® label.

A few new manufactured homes that were sold in 2008 by retailers in Clark County were constructed to ENERGY STAR® standards as a result of this program. Unfortunately, they were sited just outside Nevada Power’s service area.

Table 2: New Manufactured Home Shipments and Trends in State of Nevada

2005 2006 2007 2008

New home shipments 1,342 979 502 345

Percent change year over year — - 27% - 49% - 31%

2008 Lessons Learned This section provides a discussion of conclusions and recommendations based on Nevada Power’s experience and observations regarding the implementation and execution of the ENERGY STAR® New Manufactured Homes Program.

• Marketing this program during the continued slow housing market conditions will be difficult.

• This program, as well as the entire housing industry, will continue to struggle until the environment for the new home market improves.

Section B: 2009 Program Due to the program’s lack of market participation in 2008, Nevada Power will not be actively promoting this program in 2009. Instead Nevada Power will be using 2009 as a planning period for the development of a completely new approach on improving the energy efficiency of existing mobile and manufactured homes. Nevada Power is proposing the Mobile and Manufactured Homes Retrofit Program, which is designed as a direct install program serving a difficult to reach customer segment. Table 3 lists the previously approved targets and budgets for the ENERGY STAR® New Manufactured Homes Program.

Exhibit A

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Total Program Name

Budget, Total Program $411,000



Energy Savings (MWh) 1,126

2009 Program Execution As stated above, based on the lack of market penetration demonstrated by this program in the previous two years, it will not be promoted in 2009. Nevada Power will, however, continue to honor the program for those that sell an ENERGY STAR® New Manufactured Home through the end of 2009.

Section C: Proposed 20102012 Program A new Mobile and Manufactured Homes Retrofit (MMHR) Program has been designed as a direct install program to deliver a comprehensive set of energy efficient measures to existing manufactured and mobile home customers that are hard to reach. Manufactured homes are defined as factory built, prefabricated housing, mobile homes, or homes built within mobile home type communities, but do not include homes traditionally built entirely at the construction site.

With the large untapped market in this sector, this program will deploy a creative marketing and screening program such as, facetoface visits with park owners and managers combined with direct mail and telephone campaigns, to reach occupants of mobile home park sites and common areas with an emphasis on energy savings.

The comprehensive installation of energy efficiency measures while at each dwelling provides the maximum level of cost effective measures that are feasible. The comprehensive focus is to service the customer’s energy efficient needs as fully as possible by a single visit rather than going back with several different programs.

This program includes significant innovative features, such as:

• The unique marketing approach to optimize market saturation in working with park owners, managers and residents.

• A nocost to customer, direct install feature that removes the barriers for installation of highly effective energy efficiency measures.

• Regular inhouse inspections of work completed.

This program intends to provide comprehensive energy efficient service to these customers, through a direct install process, with no cost to the customer. The key energy efficiency measures to be installed are as follows:

Exhibit A

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• ENERGY STAR® Exterior Hardwired Fluorescent Fixtures

• ENERGY STAR® Interior Hardwired Fluorescent Fixtures

• ENERGY STAR® Screwin Compact Fluorescent Light Bulbs

• Occupancy Sensors

• Vending Machine Controls

• Common Area Energy Efficient Products

• Duct Sealing and AC Tuneups

This innovative implementation process will also include the review of measured savings, as well as research and development of emerging technologies or new cost effective measures that can serve the manufactured and mobile home community. If new measures are identified, they would be considered for incorporation in the program.

An overview of the proposed budgets and targets at the base, low and high scenarios for this program are presented in Tables 4 and 5. Program details by level are shown in Tables 6a, 6b, and 6c.


Scenario Budget

TRC 2010 2011 2012

Base $432,000 $1,400,000 $1,800,000 1.35

Low $345,000 $1,129,000 $1,451,000 1.33

High $540,000 $1,737,000 $2,236,000 1.35



2010 2011 2012 2010 2011 2012

Base 1,157,033 3,131,405 3,049,041 162 440 428

Low 925,627 2,505,124 2,439,233 130 351 342

High 1,444,780 3,914,256 3,811,302 203 550 536

Exhibit A

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Total Program – Base Scenario 2010 2011 2012 Budget, Total Program $432,000 $1,400,000 $1,800,000


Demand Savings (kW) 162 440 428


Measure 1 – CFLs

No. of Installed Measures 9,360 16,000 0

Energy Savings (kWh) 575,323 983,424 0

Measure 2 – Fixtures



Measure 3 – Lamps

No. of Installed Measures 300 530 0


Measure 4 – Exit signs


Energy Savings (kWh) 9,461 28,382 28,302

Measure 5 – Occupancy sensors


Energy Savings (kWh) 0 20,690 27,586

Measure 6 – HID

No. of Installed Measures 0 530 1,400

Energy Savings (kWh) 0 503,976 1,330,506

Measure 7 – Duct Seal and Test



Exhibit A

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Total Program – Base Scenario 2010 2011 2012 Measure 8 – AC Repair/Tuneup



Measure 9 – Vending Machines



Exhibit A

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Total Program – Low Scenario 2010 2011 2012 Budget, Total Program $345,000 $1,129,000 $1,451,000



Energy Savings (kWh) 925,627 2,505,124 2,439,233

Measure 1 – CFLs






Measure 3 – Lamps









Measure 6 – HID






Exhibit A

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Total Program – Low Scenario 2010 2011 2012 Measure 8 – AC Repair/Tuneup







Total Program – High Scenario 2010 2011 2012 Budget, Total Program $540,000 $1,737,000 $2,236,000




Measure 1 – CFLs


Energy Savings (kWh) 719,153 1,229,280 0



Energy Savings (kWh) 644,514 1,112,048 0

Measure 3 – Lamps








Exhibit A

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Total Program – High Scenario 2010 2011 2012 Energy Savings (kWh) 0 25,862 34,483

Measure 6 – HID






Measure 8 – AC Repair/Tuneup






Rationale and Supporting Data Many manufactured and mobile home customers are often low income, retired, or fixedincome customers. However, these same customers can have some of the highest energy usage of any residential sector. The vast majority of existing mobile homes are not designed for the efficient use of energy. There are approximately 25,000 manufactured or mobile home units in parks and communities within Nevada Power’s service territory. This comprehensive direct install program has been designed to provide energy efficient measures to approximately 9,000 customers.

Supporting Savings Data The measures proposed to be delivered are currently documented as proscriptive or deemed saving measures by the Database for Energy Efficiency Resources (“DEER”) database maintained in California. While DEER does not directly apply to this program proposal, this type of program is currently providing energy efficiency programs in climate zones of California, which match the cooling degree days and the heating degree days of the southern Nevada. In summary, the design basis for energy and capacity savings for all measures is based on appropriate climate zones from similar programs operating in similar climate zones. The estimated energy and demand savings used in determining the estimated savings and the cost benefit analysis have been guided by Nevada Power’s measurement and verification (“M&V”) results for similar measures in other programs.


Exhibit A

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Rebates $259,148 $869,349 $1,118,151


Customer Research $0 $0 $0


Total Program Cost $432,000 $1,400,000 $1,800,000





Rebates $207,119 $696,144 $895,046





Exhibit A

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Rebates $323,841 $1,086,686 $1,399,023





20102012 Program Execution The following tasks outline the program design and implementation:

Task 1 –Program RampUp

A marketing strategy will be developed to educate the hard to reach customers, as well as the park owners and managers on the availability of this new program. Marketing activities and materials may include: 1) working with local community organizations and publications to educate residents and communities about the availability of the program; 2) direct mail pieces; and 3) advertisement in applicable magazines.

Task 2 –Program Launch

Facetoface meetings will take place from personal visits at the park to schedule and conduct open house meetings. An outreach team will attend community meetings, luncheons and other activities to promote the program, as well as provide information in monthly mailings to be included in the park office including newsletters and billing statements. Information will be posted in common areas and the office. These contacts and relationships will be invaluable in helping to increase awareness of the program.

Task 3 – Enroll Customers

Information and applications for the MMHR Program will be available both from Nevada Power and/or the implementation contractor. Customers will complete a program application and be contacted by the Utility or implementation contractor to receive preliminary program services. To achieve economies of scale, installation dates will be scheduled in blocks by community or mobile home parks.

Exhibit A

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Task 4 – Install Energy Efficient Measures and Projects

Upon completion of the initial program services at the customer’s facilities, an Installation Agreement will be executed for the feasible measures for the customer. The implementation contractor will coordinate the installation of these energy efficient measures. The installation of energy efficient measures in common areas of the community will also be coordinated with the direct installations in customer households.

Task 5 – Quality Assurance of Completed Projects

Random inspections will be conducted of the installations at the jobsite as technicians are completing their work. When the mobile home community is complete, the Quality Project Manager will review work completed with the park owner, manager, or resident and have that individual sign off that the work is acceptable and satisfactory.

Task 6 – Perform Customer Feedback Surveys

At least 20% of customers will be called quarterly to survey and assess customer satisfaction and technician service. Nevada Power, in conjunction with the implementation contractor, will address and resolve all customer issues discovered through either survey feedback or other means of customer contact. Continuous improvements will be made to the MMHR Program to promote complete customer satisfaction.

20102012 Program Management Plan Nevada Power will assign a program manager to manage this program. The program team will conduct biweekly program meetings as needed with Nevada Power’s program management to facilitate the continuous tracking of the status of tasks and goals. In addition, the biweekly program meetings will identify specific issues that need attention in the coming weeks and these tasks will be identified and scheduled.

M&V Plan

M&V Objective The M&V objective will be to quantify the energy savings and demand reductions resulting from the Mobile and Manufactured Homes Retrofit Program.

Approach The utility’s EM&V contractor will work closely with Nevada Power to assess and confirm the effects of the Mobile and Manufactured Homes Retrofit Program. The EM&V Contractor will prepare a program specific M&V Plan to guide this work. This plan will include approaches for quantifying customer energy savings from the measures that will be installed through the program.

The approach used to determine savings will depend on the type of measure. Two primary approaches for estimating savings will be used: regression analysis of billing data and calculations using prescriptive assumptions and onsite data. Table 8 shows the approach expected to be used for different measures in the program.

Exhibit A

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Table 8: Savings Estimation Approach by Type of Measure

Measure Expected M&V Approach ENERGY STAR® Exterior Hardwired Fluorescent Fixtures

Review of prescriptive assumptions; onsite verification

ENERGY STAR® Interior Hardwired Fluorescent Fixtures


ENERGY STAR® Screwin Compact Fluorescent Light Bulbs (CFLs)


Occupancy Sensors Review of prescriptive assumptions; onsite verification

Duct Test and Seal Regression analysis of billing data Air Conditioning Diagnostic and TuneUp Regression analysis of billing data

Vending Machine Controls Review of prescriptive assumptions; onsite verification

Common Area EE products Review of prescriptive assumptions; onsite verification

For the regression analysis of billing data, the EM&V contractor will obtain billing data for randomly selected samples of customers who did and did not have a measure installed through one of the three sub programs. Monthly billing data will be obtained for the customers selected for the samples, and other data on the characteristics of the customers will be obtained from program records or from focused surveys. If appropriate, data to confirm operation of the measures may be obtained through onsite data logging.

The EM&V Contractor will assess the impacts on energy use of installing the measures through statistical and regression analysis of the monthly billing data for the sample households, both participants and non participants. The analysis will establish useful energy use baselines and estimate the magnitude of the changes in energy use attributable to installation of the measures. The changes in energy use that result from installing the measures will be estimated through the “difference in differences” method, in which changes in energy use for participants are compared to changes in energy use for nonparticipants.

For some measures, savings will be based on deemed or stipulated per unit savings values. To verify savings for such measures, the EM&V contractor will review the proposed deemed savings values to ensure that they are appropriate and reasonable. In addition, the EM&V contractor will have field technicians conduct brief visits to verify that measures reported installed were indeed installed.


Sample Selection The EM&V Contractor will select the M&V samples using appropriate statistical sampling procedures based on random sampling. Sample sizes for participants and nonparticipants will be determined so that energy savings can be validated with ± 10% precision at a confidence level of 90%. Samples of the required sizes for participants and for nonparticipants will be selected through random sampling procedures. The participant sample will be selected from the database of customers who participated in the Mobile and Manufactured Homes Retrofit Program. Randomized procedures will be used for selection of the participant sample so that all customer households participating in the Mobile and Manufactured Homes Retrofit Program will be equally likely to be selected.

Exhibit A

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For the regression analysis of billing data, the nonparticipant sample will be selected from among customers living in mobile or manufactured homes in Nevada Power’s, but who did not participate in the program. The sample of nonparticipants is selected through frequency matching against characteristics of participants.

Onsite Surveys and Verification Field technicians conduct brief visits to the participant customers selected for the sample to verify that measures reported installed were indeed installed. Moreover, they will collect information pertaining to the characteristics and operation of the measures that are used to determine the savings from installing the measures.

M&V Data Store The Nevada DSM M&V Data Store Web Portal, referred to as the Data Store, is a web portal that has been customized for both Nevada Power Company’s and Sierra Pacific Power Company’s internal use. Its function is to track Demand Side Management program performance. Nevada Power uses this management and tracking tool throughout the year to ensure that the planned investments provide clear value. The Data Store also supports the evaluation, measurement, and verification activities by providing the data needed for sample selection and verification of savings data.


Cost Benefit Analysis The comprehensive design of this program is expected to maximize energy efficiency opportunities by promoting kW and kWh electric savings within more difficult to reach customer segments.

Freeridership The most recently completed analysis of freeridership and NetToGross Ratios (“NTGR”) was conducted by PA Consulting Group (“PA)” in 2009. The freeridership rate for this program as determined by PA is 27.7%.

Input Data, Description of Sources, and Results of Financial Analysis A copy of the input data sheets and financial are provided as Technical Appendix Item DSM2. These figures were all calculated based upon the information contained in this program data sheet and the materials referenced herein. The following tables summarize the results of the financial analysis for all three scenarios.

Exhibit A

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Total Resource 1.35 $4,066,900 $ 3,023,545 $1,043,355 $0.04 Utility 1.45 $4,694,053 $3,248,098 $1,445,954 $0.05 Participant $5,945,324 ($414,564) $ 6,359,888 ($0.01) Ratepayer 0.41 $ 4,066,900 $9,820,576 ($5,753,676) $0.14 Societal cost 1.54 $4,650,091 $3,023,545 $1,626,546 $0.04



Total Resource 1.33 $3,253,520 $2,437,678 $815,842 $0.04

Utility 1.44 $3,758,538 $2,615,546 $1,142,991 $0.05

Participant $4,756,260 ($331,651) $5,087,911 ($0.01)

Ratepayer 0.41 $3,253,520 $7,876,824 ($4,623,304) $0.14

Societal cost 1.53 $3,720,073 $2,437,678 $1,282,395 $0.04



Total Resource 1.35 $5,084,296 $3,753,113 $1,331,183 $0.04

Utility 1.45 $5,863,644 $4,036,336 $1,827,308 $0.05

Participant $7,432,371 ($518,258) $7,950,629 ($0.01)

Ratepayer 0.42 $5,084,296 $12,248,056 ($7,163,760) $0.14

Societal cost 1.55 $5,813,355 $3,753,113 $2,060,242 $0.04

Exhibit A

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Total Costs 432,000 $3,631,954


Energy Benefits ($) $36,331 $5,105,905


Critical Peak Demand Savings KW 124 N/A



Total Costs $345,030 $2,925,022


Energy Benefits ($) $29,065 $4,084,724





Total Costs $540,030 $4,513,010


Energy Benefits ($) $45,369 $6,383,175



Exhibit A

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Exhibit A

Page 191 of 432

Nevada Power Company Commercial New Construction

January 2010

1


Commercial New Construction January 2010

Exhibit A

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Section B: 2009 Program.......................................................................................................................8 2009 Program Execution .................................................................................................................10 2009 Results to Date .......................................................................................................................11

Section C: Proposed 20102012 Program ........................................................................................... 12 Rationale and Supporting Data ........................................................................................................17 Supporting Savings Data .................................................................................................................18 20102012 Program Execution ........................................................................................................20 20102012 Program Management Plan ............................................................................................21 20102012 Data Delivery and Tracking ...........................................................................................21 M&V Plan ......................................................................................................................................21



List of Tables Table 1. Results, Program Year 2008....................................................................................................................................... 5 Table 2. Targets and Budgets, Program Year 2009.................................................................................................................... 9 Table 3. Program Year 2009 Accomplishments as of March 31, 2009.......................................................................................11 Table 4. Budgets, Program Years 20102012 ...........................................................................................................................13 Table 5. Targets, Program Years 20102012 ............................................................................................................................13 Table 6a. Base Scenario Proposed Targets and Budgets, Program Years 20102012..................................................................14 Table 6b. Low Scenario Proposed Targets and Budgets, Program Years 20102012 ..................................................................15 Table 6c. High Scenario Proposed Targets and Budgets, Program Years 20102012..................................................................16 Table 7a. Base Scenario Program Budget by Category, Program Years 20102012.................................................................19 Table 7b. Low Scenario Program Budget by Category, Program Years 20102012.................................................................19 Table 7c. High Scenario Program Budget by Category, Program Years 20102012 ................................................................20 Table 8a: Base Scenario Cost Test Results 20102012..............................................................................................................24 Table 8b: Low Scenario Cost Test Results 20102012..............................................................................................................24 Table 8c: High Scenario Cost Test Results 20102012..............................................................................................................24 Table 9a: Base Scenario Utility Economic Evaluation ..............................................................................................................25 Table 9b: Low Scenario Utility Economic Evaluation ..............................................................................................................25 Table 9c: High Scenario Utility Economic Evaluation ..............................................................................................................25


Exhibit A

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Date: January 2010

Program Name: Commercial New Construction Program

Program Status: Expanding

Program Manager: Mary Ann Sheehan

Primary Contractor(s): To be determined by RFP

2009 Budget: $4,615,000


Low $ 3,600,000 $ 3,200,000 $ 3,200,000

Base $ 4,600,000 $ 3,850,000 $ 3,850,000

High $ 5,750,000 $ 5,000,000 $ 5,100,000


Base 2.50

High 2.38

Program Summary The Commercial New Construction Program (CNCP) for action plan period 20102012 is built upon the highly successful Sure Bet Commercial New Construction Program from previous years. The CNCP is designed to encourage energy efficiency in new construction projects throughout the Nevada Power service territory. The program provides financial incentives and technical assistance to building owners and developers to identify, validate, and implement energy efficiency measures. Incentives are available for single pieces of equipment, entire systems, and whole buildings. The program is designed such that incentives are provided for exceeding the current International Energy Conservation Code (IECC) or applicable local building code by at least 10 percent.

The CNCP will work with the building developers and their contractors or professionals to assess the amount of energy savings per project. The CNCP pays funds when a new building is complete and ready for occupancy and the applicant can demonstrate that the energy efficiency measures have met the program requirements. Prescriptive measures are paid per unit, and lighting density per watt reduction.

From 20062009 the performancebased incentive component paid $0.10 cents per annual onpeak kWh savings and $0.06 cents per annual nononpeak kWh for documented and installed measures. LEED certified projects can apply for both the performancebased incentive and the prescriptive commissioning incentive.

The program also includes an upstream rebate component that provides financial incentives to distributors for high efficiency HVAC and premium efficiency motors.

The primary objective of the CNCP is to promote investments in energy efficient design strategies and measures, thus ensuring longterm energy savings and peak demand reduction. An additional goal is to influence building owners, project managers, architects, engineers, contractors and others to realize the benefits of incorporating energy efficiency into new construction projects going forward, thereby achieving a market transformation effect. Longterm sustainable energy savings will be achieved if this program is successful in changing the market behavior of market actors in the southern Nevada construction industry.

Exhibit A

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In 20102012, Nevada Power proposes to expand the annual budget of the CNCP in response to increasing demand. The proposed enhancements would add new components to capture additional savings from mixed use projects in the low case, additionally a second new component; tenant improvements in the base case, and a third new component; high performance buildings in the high case. Additional marketing and outreach are also planned which target small to medium facilities and will provide the tools to facilitate the incorporation of energy efficient technologies in their new construction projects. These new components are described in more detail in Section C.

Section A: 2008 Program Results The 2008 year was very successful for the CNCP. The goal for annual energy savings was surpassed by 61 percent. The budget was under spent by 20 percent. Overall, the program achieved 8,812 Demand (kW) savings and 27,071,905 kWh savings with $1,098,548 paid in incentives.

LEED incentives provided about two thirds of the program savings for 2008. Prescriptive lighting accounted for nearly 10 percent of the savings.

A total of 361 new construction projects were completed in 2008. These programs are further categorized as follows:

• Two projects received LEED incentives

• Twenty three projects received prescriptive lighting incentives

• One project received an incentive for performancebased measures only

• Seven projects received an incentive for both performancebased and prescriptive measures

• Eighteen projects received an incentive for a set of prescriptive measures.

• 310 projects received an incentive as part of the Upstream component.

The program team focused at the end of 2008 on working with participants to facilitate energyefficient design. As is the case with the New Construction industry, many projects will not be completed within one calendar year. Nonetheless, program activities included design assistance support services for future projects, review of project documentation and analysis, payment processing, database tracking and reporting, and planning for the 2009 CNCP.

The complete analysis of the 2008 CNCP is provided in Section J of the 2009 Annual DSM Update Report provided in Exhibit B.

As displayed in Table 1, the 2008 CNCP was successful in achieving costeffective results. Additional detail and analysis regarding program performance is available in the 2009 Annual DSM Update Report provided in Exhibit B.

Exhibit A

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Table 1. Results, Program Year 2008 1


Budget, Total Program $3,062,500 $2,456,100 80.2%

No. of Participants 52 87 167.3%


Energy Savings (MWh) 15,937,500 27,071,905 169.9%

Measure 1 –Prescriptive Lighting

Energy Savings (MWh) 2,147.85 2,820.3 131.4%

Measure 2 – Prescriptive Cooling


Measure 3 – Prescriptive Refrigeration


Measure 8 – Whole Building Modeling


Measure 9 – LEED

Energy Savings (MWh) 10,153 18,458.9 181.8%

TRC 1.15 2.44 212.2%

2008 Analysis The program was very successful in 2008 and far exceeded the program goals. The following listing summarizes major variances from original projections or expectations:

• In 2008, the program paid incentives for 361 projects, resulting in an 8,821 peak kW reduction compared to a goal of 1,811 kW (487.1%) and energy savings of 25,725 MWh compared to a goal of 15,938 MWh (167.3%). Total expenditures were $2,456,100 (80%). The budget was slightly below target. The achieved demand reductions and energy savings significantly surpassed the targeted values. This unusual achievement was primarily the result of one large project that received a tier four incentive where the savings are greater per dollar of incentive. The success of this program continues to be the cumulative effect of the foundational work with the market actors over the past several program years.

1 The 2008 program goals were not developed at the measure level. These targets represent prorated amounts for the goals at the custom and prescriptive retrofit, and upstream levels.

Exhibit A

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• Although, the energy savings goals were notably exceeded, additional projects were incomplete as of December 31, 2008 and will be carried over into the 2009 program year and will qualify for an incentive when construction is completed. Savings for those projects will be claimed in the company’s future annual report(s).

• In the new construction industry, many projects will not be completed within one calendar year. Therefore, even though the program shows a larger than anticipated savings for 2008, the savings do not reflect the full amount of work that was completed. In fact, there is a high potential for additional savings in future years based on the foundational work that was completed with participants who initiated building planning or design work in 2008.

• The 2007 savings were reported as provisional in the 2008 annual report. The M&V report verified 3,462 MWh in energy savings which is 137% of the program goal. However, this is 85% of the previously reported savings. The M&V contractor could not verify all of the LEED savings previously reported due to the customer using multiple contractors in the construction of the facility. The M&V study indicated that the prescriptive savings may have also been overstated. As a result of this finding, the program policies and procedures have been changed to calculate the actual savings for projects with prescriptive savings greater than 750,000 kWh on an annualized basis to limit the impact of very large projects on the overall gross realization rate for prescriptive projects.

2008 Lessons Learned There are several lessons learned that help to explain the 2008 successes, as well as provide information useful for future improvement and success. The following list of lessons learned was developed based upon a look back at the year 2008.

• An ongoing observation is that the Commercial New Construction Program frequently takes more than one program year from the planning stage to building occupancy. For this program to be successful, Nevada Power must begin working with customers well in advance of project completion, regardless of which year the energy savings will begin. This lag makes planning, predicting energy savings, and budgeting challenging. As a result, a project can participate in the program for several years before the project starts to produce results that can be reported as complete. This has been even more apparent as a result of the recent economic downturn. A significant number of new construction projects have been stalled or put on hold pending an upturn in the economy.

• A total of 361 new construction projects were completed in the report of 2008 activity. This included; two LEED incentives, twenty three prescriptive lighting incentives, one performance based only project, seven projects with an incentive for both performance based and prescriptive measures, eighteen projects for a combination of prescriptive measures, and three hundred and ten upstream incentives. The results indicate that the upstream component of the program achieved its effect as designed. A significantly larger number of units were completed as compared to the past model of incentivizing these units at the retail level. Therefore, this approach will be continued in 2009 and beyond. Federal standards for packaged AC units less than 5 Tons in size increased midyear 2008. However, equipment that was produced prior to the change in standards was still available for purchase. Therefore, the program changed the baseline to the new standards for the 2009 program year when the majority of the equipment available for sale will reflect the new standards.

Exhibit A

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• Program contractors found that building owners often do not sufficiently understand energy efficient design issues or the design process to make decisions on energy options. Rather, these decisions are often left to the design professionals. The Commercial New Construction efforts continue to focus on working with the community of design professionals who understand these issues and can influence their clients’ decision process.

• Through continued attendance at monthly meetings of local professional organizations, program staff increased the exposure and credibility of the Commercial New Construction Program. The meetings provided an avenue to discuss the program and its benefits to key market participants involved in the new construction market segment. Additional program leads were also generated at these meetings. This process has resulted in an exponential growth of the program participation and is planned to be continued in 2009 and beyond.

• During 2008, the value of a dedicated new construction staff member to support Nevada Power’s commercial program was demonstrated. The presence of dedicated staff continues to strengthen the efforts of the Commercial New Construction Program team. Locallybased marketing and engineering resources were able to identify projects in the early stages of development and influence design decisions to enhance energy efficiency. While many of these projects will be completed beyond 2008, the customers appear to be using the information and expertise available through the program in the planning phase of construction. Local staff also provided support to close out the necessary paperwork to report more projects as complete by year end. Providing a “personal touch” through local support has proved to be a highly effective approach in 2008 and is planned to continue in 2009 and beyond.

• LEED takes a wholebuilding approach to building design and construction practices. Due to the renewable, nonelectric and nonenergy related provisions of LEED, M&V activities have been challenging. As a result, the incentive levels and energy savings for 2009 will be modified. LEED projects can apply under the whole building approach using the LEED building models and incentives will be based on the electrical energy savings shown in a comparison of the baseline model and the asbuilt model. Since many LEED projects began in prior years, LEED participants can apply for a $200 bonus for achieving LEED certification in 2009; however, this will be discontinued in 2010.

• Starting with the program year 2009, the baseline that will be used to determine energy savings will be based on IECC 2006 for projects where construction was completed after January 1, 2009 if there had been no prior interaction with program staff. For projects completed in 2008, the baseline will be based on IECC 2003. The adoption of the new baseline in 2009 is due to the fact that the majority of the construction in 2008 will only need to meet the energy code that was in place at the time that the permit was issued. It is reasonable to believe that most buildings that are completed in 2009 would have applied for a permit after midyear 2007 when IECC 2006 was adopted in southern Nevada. However, customers who can provide evidence that the project was permitted under IECC 2003, or a prior code and had interacted with program staff prior to 2009, will be evaluated on a casebycase basis to determine the appropriate baseline for the project.

• For projects that first make contact with the program in 2009, the qualifications and energy savings for several new construction measures such as LEED and Lighting Density have been reviewed and modified in the program policies and procedures to reflect the IECC 2006 code requirements.

• The tiered incentive structure implemented in 2008 was well received by participants. The structure was evaluated and no further revision is required for 2009; however, it will continue to

Exhibit A

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8

be monitored for future years both to control budget impact and to reduce the potential for freeridership.

• This program has proven its potential to be successful and Nevada Power will continue it in 2009 and proposes this expanded continuation of the program as part of the 2009 IRP.

Section B: 2009 Program The 2009 New Construction offering is structured similar to the 2008 approach and offers prescriptive, performancebased, upstream, and LEED qualified program incentives. In addition, the program provides technical guidance and education on energy efficiency practices to design professionals and building owners. In 2009, there are no changes to the prescriptive measures or prescriptive incentive amounts. However, a prescriptive incentive will not be paid for variable speed drives (VSDs), flat plate heat exchangers, and lighting controls when required by Nevada state energy code.

The 2009 incentives for upstream measures are the same as in 2008 with one exception. All 3phase units that are 5 tons or less have the same incentive and qualifying efficiency as the singlephase units that are 5 tons or less.

In 2009 customer projects that qualify for LEED certification will receive a fixed incentive of $200 per project and will be eligible to receive both the performancebased incentive and prescriptive commissioning incentive. The performancebased incentive amount will not change in 2009. The baseline for calculating the energy savings for performancebased incentives will be IECC 2006 for all projects completed after January 1, 2009 and IECC 2003 for those projects competed in 2008 where incentives are paid in 2009 if there has been no prior interaction with program staff and where the customer does not provide evidence that the project was permitted under a different building or energy code.

The New Construction Program also provides specially trained consultants that work sideby side with building design teams in the early stages of a project to increase savings by maximizing synergies. Entire “whole building” packages of lighting, HVAC, shell design, window treatments and shading are analyzed and assessed.

The program kW and kWh savings numbers will be determined using standard engineering calculation methodologies. The methods include using deemed, calculated, modeled, and monitored values. Most of the prescriptive incentives use deemed energy and demand savings values. Deemed savings are appropriate for these measures since they have been studied, they are understood in the market, and their energy savings are widely accepted.

The primary source of the savings estimates or methodologies for the prescriptive measures is the Database of Energy Efficiency Resources (DEER), jointly developed by the California Public Utilities Commission and the California Energy Commission. Other sources include the Pacific Gas & Electric work papers for the Express Efficiency Program. A calculated savings approach is used for all custom measures. The program team works with the customer and/or contractor to verify or analyze the energy and demand savings for custom measures. Every measure requires a unique set of information to determine the energy savings estimate. The implementation contractor (Kema in 2009) relies on its expertise and experience to calculate estimates in a conservative manner that both benefit the customer and the utility. In some cases, modeling and/or metering may be involved.

Table 2 provides the goals and budgets for the 2009 CNCP.

Exhibit A

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Table 2. Targets and Budgets, Program Year 2009

Total 2009 Target


No. of Participants 76


Energy Savings (MWh) 23,375.00


Demand Savings (kW) 196.05








Measure 8 – Whole Building Modeling



Measure 9 – LEED



Measure 11 – Upstream HVAC


Energy Savings (MWh) 986.88

Measure 12 – Upstream Motor



Exhibit A

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10

2009 Program Execution The 2009 CNCP offers four approaches to assist customers with their project:

o Prescriptive

o Performancebased/Custom

o Upstream

o Lighting Density

The prescriptive approach is a simplified method to optimize choices on predefined energy efficiency measures. It is an option for smaller projects or larger projects with basic opportunities for energy savings. Typical prescriptive measures include energyefficient lighting and occupancy sensors, energy efficient HVAC equipment, and variable frequency drives.

The performancebased/custom approach is designed for larger, more energy intensive projects or for individual measures not included in the prescriptive component. It encourages designers to design their project to exceed the IECC energy or applicable building code by at least 10 percent.

The upstream component is designed to provide incentives for certain measures to distributors rather than the equipment purchaser. The incentive is provided to encourage distributors to stock and sell qualifying premiumefficiency motors and air conditioning equipment to business customers in Nevada Power’s service territory.

Lighting density incentives are available on a whole building basis for projects designed at least 10 percent lower than the IECC or applicable building code standard. These projects are excluded from the performancebased approach that considers lighting in the calculations.

In 2009, the program will build upon the momentum of past program years by reaching out to previously participating members of the design community as well as other supplyside actors. The program continues to expand on previous success stories distributed throughout the Nevada Power Company commercial customer networks. The program team’s objective is to continue to foster new relationships with potential contractors and to increase the visibility of program successes within Nevada Power’s electricity southern service territory.

The CNCP application and administrative procedures are designed to make the incentive application process easy to follow as well as to effectively verify savings associated with incentive payments. The program team also provides technical assistance to support customers submitting applications.

In the first quarter of 2009, the program staff focused on developing and announcing the 2009 CNCP. Activities during this period have included the following:

• Design of modified New Construction Program • Update of Policies and Procedures Manual and all application forms • Update website with 2009 details • Press releases and trade ally meetings to announce 2009 Commercial New Construction Program

Planned activities include the following:

• Meeting with the Major Account Executives (MAEs) to develop MAE plans • Direct mailing to Architectural and Engineering (A&E) firms, contractors and developers

Exhibit A

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• Selected meetings with A&E firms, property management firms and developers to promote the 2009 program.

• Technical support throughout the program development, construction and commissioning phases.

2009 Results to Date The demand for the CNCP was significant during the first three quarters of 2009. As indicated in Table 3, at the end of the third quarter of 2009 the program already has 122 paid projects (with an additional 20 building projects underway). Despite the economic downturn, participants are still submitting projects for new construction incentives. It is unclear what percentage of the current projects will be completed in 2009 and what percentage might be delayed until the economy improves. If necessary, future 2009 energy efficiency program applications will be waitlisted until additional funding is available through customers withdrawing their applications or additional funding allocated to the program.

Table 3. Program Year 2009 Accomplishments as of March 31, 2009

Total 2009 as of Sept 30, 2009

No. of Completed Projects 122 Energy Savings (MWh) 24,115.11 Prescriptive Incentives Energy Savings (MWh) 18,189.88 Whole Building Model Energy Savings (MWh) 3,733.30 LEED Energy Savings (MWh) 2,191.93

Exhibit A

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Section C: Proposed 20102012 Program For the most part, the 20102012 Commercial New Construction Program will be a continuation of the 2009 offering. Thus, the program will continue to offer prescriptive, performancebased, and upstream incentives. In addition, the program will continue to provide technical guidance and education on energy efficiency practices to design professionals and building owners.

As proposed, the following additional components may 2 be added to the Commercial New Construction Incentive portfolio in 20102012:

• The Mixed Use New Construction (Mixed Use) component would facilitate an integrated and comprehensive approach to projects that combine residential, commercial, cultural, and/or retail facilities in one location. It will target energy conservation measures for lighting, HVAC, and ENERGY STAR® appliances. This approach would be performancebased and include both commercial and residential energy measures. This component will enable the design team to establish an integrated model that would include a combination of measures on a wholebuilding level.

• The Tenant Improvement (TI) component would offer incentives for lighting efficiency upgrades to the property management (PM) companies with the optional ability to pay the incentive to PM firms rather than the tenant. Incentives would be paid via the lighting density approach— requiring a specified Watts per square foot—as outlined in the existing new construction program. The minimum requirement to qualify a project would be ten percent better than current lighting code.

• The High Performance Buildings Design Assistance component would offer higher incentives for buildings that surpass the energy code by 50 percent or more to help offset the higher design costs associated with high performance buildings. The incentives would vary based on the level of performance in excess of the code. This program concept provides design consultation and modeling services in addition to the incentive for modeled energy savings.

• Marketing and outreach efforts will be added to target small and medium size facilities. Check lists by market sector will be developed to provide this hardtoreach customer group the tools to incorporate energy efficient measures in their new construction projects. Marketing and outreach to this customer group will also be expanded to identify market opportunities and help guide customers to the program component(s) that will best assist them with their facility.

The implementation process for the program consists of three major components: outreach, technical services, and incentive processing. Outreach activities are designed to inform customers, the design community, and the tradeallies to sell energyefficient (EE) measures based on the program benefits and features. The objective of outreach is to identify potential program participants.

The program also provides specially trained consultants that work sideby side with building design teams in the early stages of a project to increase savings by maximizing synergies. Entire “whole building” packages of lighting, HVAC, shell design, window treatments and shading are analyzed and assessed.

2 The proposed new components were included based responses received from contractors to an initial request for information. A final determination of which, if any, of the new components will be implemented will be based on an evaluation of market interest and contractor responses to a general RFP to be issued by the Company.

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The objective of incentive processing is to confirm that qualifying EE measures were installed and are operational. This component consists of documentation review and onsite inspections. Once it has been determined that qualifying EE measures have been installed, an incentive check is sent to the customer or participant.

The management plan for the program will be similar to previous program years. The 20102012 program team will conduct scheduled meetings with the Nevada Power Program Manager to continuously track program goals, identify short and longterm objectives and review tasks. Reports will be submitted by the Contractor(s) to provide data on activities as well as program performance relative to goals.

The proposed budgets and targets at the base, low, and high scenarios for this program are presented in Table 4 and Table 5. Program details by scenario are shown in Tables 6a, 6b, and 6c.

Table 4. Budgets, Program Years 20102012

Scenario Budget

TRC 2010 2011 2012

Base $4,600,000 $3,850,000 $3,850,000 2.50

Low $3,600,000 $3,200,000 $3,200,000 2.40 High $5,750,000 $5,000,000 $5,100,000 2.38

Table 5. Targets, Program Years 20102012


2010 2011 2012 2010 2011 2012

Base 19,800,000 16,600,000 16,560,000 8,192 6,868 6,851

Low 16,000,000 14,480,000 14,560,000 5,400 4,887 4,914

High 23,760,000 20,600,000 21,360,000 9,268 8,035 8,332

Exhibit A

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Table 6a. Base Scenario Proposed Targets and Budgets, Program Years 20102012



Demand Savings (kW) 8,192 6,868 6,851

Energy Savings (MWh) 19,800 16,600 16,560

Measure 1 – Lighting


Measure 2 – HVAC


Measure 3 – Refr/Kitchen/Vending

Energy Savings (MWh) 720 720 720

Measure 4 – Integrated whole building




Measure 6 – UpstreamMotors


Measure 7 – Industrial Process

Energy Savings (MWh) 960 960 1,040

Measure 8 – Com Misc/ Cool Roofs

Energy Savings (MWh) 960 960 1,040

Measure 9 – Mixed Use


Measure 10 – Tenant Improve Lighting


Exhibit A

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Table 6b. Low Scenario Proposed Targets and Budgets, Program Years 20102012







Measure 2 – HVAC








Measure 6 – Upstream Motors








Exhibit A

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Table 6c. High Scenario Proposed Targets and Budgets, Program Years 20102012







Measure 2 – HVAC








Measure 6 – Upstream Motors







Energy Savings (MWh) 960 1,040 1,080

Measure 10 – Tenant Improve Lighting


Measure 11 – High Perf Bldg Design


Exhibit A

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Rationale and Supporting Data For the most part, the 20102012 Commercial New Construction portfolio, will be a continuation of all successful components of the 2009 offering. It will include prescriptive, performancebased and upstream incentives. In addition, the program provides technical guidance and education on energy efficiency practices to design professionals and building owners.

The new mixed use component is being proposed to address the fact that, increasingly, developers and architects are concentrating on the integration of multitower structures that combine residential, commercial, cultural, and retail facilities in one location. Currently, the CNCP focuses on the commercial common areas. Under this proposed enhancement, the CNCP would now include mixed use, such as the residential condo areas, targeting energy conservation measures centered around lighting, HVAC, and ENERGY STAR® appliances. A whole building performance model or appropriate engineering algorithms would demonstrate that the annual energy consumption is at least 10 percent lower than the applicable energy code.

Many lighting equipment decisions are made when a tenant moves in a previously unoccupied building or changes an office or retail space. While these projects can qualify for an incentive under the current Commercial New Construction Program, Nevada Power believes that the program reaches only a small portion of its market potential. The proposed tenant improvement component will allow property management (PM) firms to bundle the energy efficiency improvements into their overall lease and TI offer. By focusing on the property manager and owner rather than the tenant or contractor, Nevada Power creates an incentive to complete the upgrade at a convenient time even though the owner does not directly receive the benefits from the reduced electric consumption.

An outreach focused specifically on PMs and building owners would enable the utility to encourage a lighting efficiency upgrade when an existing tenant moves out as opposed to simply replacing burned out lamps and cleaning fixtures. The TI lighting component will offer a “package” for the building owner and PMs to review that is easy to understand and specific to their energy savings opportunity. This individual focus will inform and encourage them (through an incentive) to enact an energyefficient upgrade. If the concept is successful, it can be expanded to include additional measures such as occupancy sensors and programmable thermostats.

The new high performance buildings component would apply to new buildings that surpass the applicable energy code by 50 percent or more. The current CNCP incentives are structured around buildings being 10 percent better than the applicable energy code. More aggressive high performance projects typically involve passive building design concepts such as wind scoops, cooledbeam ceilings, and evaporative cooling to reduce the fans and cooling equipment required for the building and can achieve substantial savings beyond code. However, many of these passive design concepts have a significantly higher design cost and may have a higher construction cost to achieve such a high level of energy demand/use performance.

Incentives for this measure would be paid based on the result of a building energy model and would vary based on the level of performance in excess of the code. Typically, a computational fluid dynamics modeling approach is needed to convince the building owner that this passive building can perform well under the full range of temperature and wind conditions that might occur.

The new marketing outreach efforts will focus on small to medium sized businesses which have been underserved in the past, yet represent a significant portion of the new construction in southern Nevada. The development of a checklist by market sector will provide a tool for customers who cannot justify completing energy modeling of a facility of their size. The intent is to market and provide a set of easy touse tools to begin the market transformation of this group of customers.

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The base scenario of the program has been designed to continue to maintain the program at a level similar the results of the program in previous years. It is a conservative program design in uncertain financial times. The low scenario of the program assumes an effort that is 20% less than the base program and results in a higher cost benefit ratio. The high scenario of the program is a more aggressive approach to this project that assumes a portion of the program in moving buildings into the high performance category (50% better than code) and as such represents a higher risk of not meeting goals especially in the early years of the program and a slightly reduced cost benefit ratio.

Supporting Savings Data The program kW and kWh savings numbers for the base, low and high scenarios have been determined using standard engineering calculation methodologies. The program savings units are per kWh. To determine measure and program costeffectiveness, the program has defined the incremental measure cost (IMC) across measure categories at a dollar per kWh ($/kWh), which is the unit defined by the project. These values were determined by a weighted average across the measures forecasted for the following year, the IMC per prescriptive unit and converted to $/kWh. The following illustrates the calculation: IMC ($/kWh) = IMC ($/unit) ÷ (kWh/unit).

The savings calculation methods range from using deemed, calculated, modeled, and monitored values to determine the kWh savings per project.

Most of the prescriptive and upstream incentives use deemed energy and demand savings values. Deemed savings are appropriate for these measures since they have been studied, they are understood in the market, and their energy savings are widely accepted. The prescriptive measures are rebated typically per unit.

The primary source of the savings estimates or methodologies for the prescriptive measures is the Database of Energy Efficiency Resources (DEER), jointly developed by the California Public Utilities Commission and the California Energy Commission. Other sources include the KEMA calculations and Pacific Gas & Electric work papers for the Express Efficiency Program.

A calculated savings approach is used for all custom measures, including the tenant improvements and high performance buildings technical assistance. The program team works with the customer and/or contractor to verify or analyze the energy and demand savings for custom measures. Every measure requires a unique set of information to determine the energy savings estimate. The implementation contractor will rely on its expertise and experience to calculate estimates in a conservative manner that both benefit the customer and the utility. In some cases, modeling and/or metering may be involved.

Exhibit A

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Table 7a. Base Scenario Program Budget by Category, Program Years 20102012



$70,000 $100,000 $100,000


Rebates $2,138,250 $1,717,750 $1,710,750


Customer Research $30,000 $0 0



Table 7b. Low Scenario Program Budget by Category, Program Years 20102012



$70,000 $100,000 $100,000


Rebates $1,593,750 $1,379,250 $1,408,500


Customer Research $30,000 $0 $0



Exhibit A

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Table 7c. High Scenario Program Budget by Category, Program Years 20102012



$100,000 $150,000 $150,000


Rebates $2,672,250 $2,241,500 $2,299,750


Customer Research $50,000 $0 $0



20102012 Program Execution The 20102012 Commercial New Construction Program offers several approaches to assist customers with their project:

• Prescriptive

• Performancebased/Custom

• Upstream

• Mixed Use New Construction

• Lighting Density & Tenant Improvement Lighting

• High Performance Buildings Design Assistance

The prescriptive approach is a simplified method to optimize choices on predefined energy efficiency measures. It is an option for smaller projects or larger projects with basic opportunities for energy savings. Typical prescriptive measures include energyefficient lighting and occupancy sensors, energy efficient HVAC equipment, and variable frequency drives.

The performancebased approach is designed for larger, more energy intensive projects or for individual measures not included in the prescriptive component. It encourages designers to design their project to exceed the applicable IECC energy or building code by at least 10 percent. The program will also offer increased incentives and technical assistance for projects exceeding the IECC energy code by 50 percent or more under the high performance building component. The high performance buildings and mixed use component will expand on the existing performance based approach.

The upstream component is designed to provide incentives for certain measures to distributors rather than the equipment purchaser. The incentive is provided to encourage distributors to stock and sell qualifying

Exhibit A

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premium-efficiency motors and air conditioning equipment to business customers in Nevada Power’s service territory.

Lighting density incentives addressing full build out or tenant improvements are available on a whole building basis for projects designed at least 10 percent lower than the IECC standard. These projects are excluded from the performance-based approach that considers lighting in the calculations.

In 2010-2012, the program will reach out to previously participating members of the design community as well as other supply-side participants. The program will continue to expand on previous success stories distributed throughout Nevada Power’s commercial customer networks. The program team’s objective is to continue to foster new relationships with potential contractors and to increase the visibility of program successes within the Nevada Power service territory. The program will further expand the outreach to specifically target the new components as well; for example it will be important to target outreach to gain participation by new projects very early in design that may be eligible for the high performance buildings component.

The program application and administrative procedures will continue to be designed to make the incentive application process easy to follow as well as to effectively verify savings associated with incentive payments. The program team will also provide technical assistance to support customers submitting applications.

2010-2012 Program Management Plan Nevada Power’s current Commercial New Construction Program processes have resulted in the delivery of a successful program from the inception of the program in 2003. Nevada Power selected an implementation contractor and Nevada Power managed the implementation contract. The current management structure utilizing an implementation contractor, including a core program team comprised of a Program Director; an Operations Manager; a Program Coordinator; a data analyst, and a team of energy engineers has proven successful. It is anticipated that the majority of the contractor’s implementation team will reside in Nevada which facilitates access to customers and the design community. However, utilizing a contractor with experts outside the area has also proven to be a benefit to provide assistance with highly specialized projects.

2010-2012 Data Delivery and Tracking Data and results related to the program will be gathered continually from customers via project applications as well as participating contractors and manufacturers. Updated program results will be provided to and uploaded to the Data Store monthly via electronic reporting protocols as well as traditional written reports.

M&V Plan

M&V Objective

The EM&V Contractor will perform evaluation, measurement and verification (EM&V) activities to confirm the savings being realized through the Commercial New Construction Program that Nevada Power is implementing in Southern Nevada.

Exhibit A

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Approach Following the review of program documentation, the EM&V Contractor will prepare a sampling plan for selecting a sample of projects that they will use for the analysis of kWh savings and kW demand reductions. Sampling for collecting program M&V data may be complicated because the M&V effort will occur in real time while the program is being implemented and a complete sampling frame is not yet available. Program participants will accumulate over time as the program is implemented. For this reason, a systematic sampling approach will be used to select sample sites as program implementation proceeds. Sample selection is thus spread over the entire implementation period.

The sample design the EM&V Contractor will use for selecting program projects takes skewness into account and allows estimates of savings to be determined with ±10% precision at the 90% confidence level for the program. In particular, the EM&V Contractor may accomplish the sampling using an approach originally suggested by Hidiroglou 3 , which has been used successfully for other impact evaluation studies. With this approach, a number of sites with large savings are selected for the sample with certainty, and a random sample is taken of the remaining sites.

Sample Selection

Sampling for collecting program M&V data also needs to account for the M&V effort occurring in real time while the program is being implemented. Projects will accumulate over time as the program is implemented. The sampling plan is therefore designed to have a predetermined sample size requirement for achieving certain analytical goals but with adjustments made over time as data for additional sites become available.

Sample selection is thus spread over the entire implementation period. The EM&V Contractor will use a near realtime process whereby they select a portion of the sample each quarter as projects accumulate in the program. Projects initiated during a quarter are sampled as they become available and the selected samples are monitored. The progress of the sample selection is monitored by looking at the additions to the sampling frame that have arrived and at the cumulative sampling frame totals and the cumulative sample totals in comparison to the corresponding values that were expected per the initial sampling analysis. If appropriate, the sampling rates are adjusted to take into account major changes in the sampling frame.

The EM&V Contractor should expect to collect some important items of data needed for the analysis of gross savings through monitoring at a subsample of the sites selected for the onsite data collection. The sites chosen for monitoring are those sites with projects where there is some uncertainty about the values for important factors that affect the level of savings. For example, monitoring may be used to obtain information on operating hours for some types of lighting measures.

M&V Analysis Methods The EM&V Contractor will obtain the primary data needed to estimate savings for the sample of projects by making onsite visits and conducting monitoring of specific enduses. To ensure the effectiveness of the site visits, the EM&V Contractor will review the documentation for the sample sites to verify the information on energy efficiency measures that were installed and to determine

3 See Hidiroglou, M. A., “The Construction of a SelfRepresenting Stratum of Large Units in Survey Design,” The American Statistician, February 1986, Vol. 40, pp. 2731.

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what compliance documentation is available in the project file. The EM&V Contractor will identify what information is missing from the documentation so that the onsite data collection effort can be focused on obtaining the missing information (while verifying the other information).

The EM&V Contractor will also conduct shortterm, nonintrusive monitoring of specific enduses as applicable and where it is feasible. Such monitoring is useful to provide more detailed data on operational schedules for lighting and HVAC than can be obtained through reported data.

The EM&V Contractor will determine gross savings using methods that depend on the type of measure, for example:

• Analyze Savings through Simulations

• Analyze Savings from Lighting Measures

• Analyze Savings from Motor and VFDs

• Analyze Savings from Other NonConditioning Measures

M&V Data Store The Nevada DSM M&V Data Store Web Portal, referred to as “Data Store”, is a web portal that has been customized for both Nevada Power Company’s and Sierra Pacific Power Company’s internal use. Its function is to track Demand Side Management (DSM) program performance.


Cost Benefit Analysis The CNCP is designed to help commercial property owners, developers, architects and construction companies explore, design and build and complete new construction or major renovations resulting in more efficient commercial buildings. The program will pay an incentive toward the incremental costs for energy efficiency measures, provide design assistance, and will also provide tools, technical guidance and education on energy efficiency practices to design professions and building owners. The significant parameters to be modeled for this program include the total expected qualifying installations, the total expected incentives, the incremental costs, and the total budget.

Freeridership The primary object of the CNCP is to promote investments in energy efficient design strategies and measures, thus ensuring longterm energy savings and peak demand reduction. An additional goal is to influence building owners, program managers, architects, engineers, contractors and others to realize the benefits of incorporating energy efficiency into new construction projects going forward, thereby achieving a market transformation effect. Longterm sustainable energy savings are achieved as this program is successful in changing the market behavior of actors in Nevada’s construction industry.

The most recently completed analysis of Net To Gross Ratios (“NTGR”) was conducted by PA consulting in 2009. The freeridership rate for this program as determined by PA is 17.9%

Input Data, Description of Sources, and Results of Financial Analysis A copy of the input data sheets and financial models are provided as Technical Appendix Item DSM2. These figures were all calculated based upon the information contained in this program data sheet and the

Exhibit A

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materials referenced herein. The following tables summarize the results of the financial analysis for all three scenarios.



Total Resource 2.50 $44,558,488 $17,831,384 $26,727,105 $0.03

Utility 4.10 $46,761,741 $11,411,358 $35,350,383 $0.02

Participant 8.37 $43,801,092 $5,233,658 $38,567,434 $0.01

Ratepayer 0.78 $44,558,488 $57,415,703 ($12,857,215) $0.09

Societal cost 2.79 $49,788,249 $17,831,384 $31,956,866 $0.03



Total Resource 2.40 $34,106,147 $14,236,139 $19,870,008 $0.03

Utility 3.88 $35,894,300 $9,261,389 $26,632,911 $0.02

Participant 9.18 $36,812,238 $4,011,899 $32,800,339 $0.01

Ratepayer 0.71 $34,106,147 $47,861,779 ($13,755,633) $0.09

Societal cost 2.70 $38,501,453 $14,236,139 $24,265,314 $0.03



Total Resource 2.38 $52,883,244 $22,229,170 $30,654,074 $0.03

Utility 3.80 $55,717,738 $14,680,740 $41,036,998 $0.02

Participant 8.91 $53,650,064 $6,022,164 $47,627,900 $0.01

Ratepayer 0.74 $52,883,244 $71,165,298 ($18,282,054) $0.09

Societal cost 2.67 $59,288,952 $22,229,170 $37,059,783 $0.03

Exhibit A

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Total Costs $4,600,000 $12,300,000


Energy Benefits ($) $735,061 $42,945,930



7,122 N/A



Total Costs $3,600,000 $10,000,000


Energy Benefits ($) $580,716 $35,282,630



4,699 N/A



Total Costs $5,750,000 $15,850,000


Energy Benefits ($) $873,311 $52,693,281



8,036 N/A

Interpretation of Results The Total Resource Cost (TRC) Test is the ratio of the discounted total benefits of a program to the discounted total costs over the life of the installed units. The TRC ratios by level are:



Exhibit A

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• Base Scenario = $0.02 /kWh

• Low Scenario = $0.02 /kWh

• High Scenario = $0.02 /kWh

Section E: Supporting Documentation M&V Report for 2007 program performance is provided as Technical Appendix Item DSM21.

M&V Report for 2008 program performance is provided as Technical Appendix Item DSM21.

Exhibit A

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Nevada Power Company Energy Smart Schools Program

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Nevada Power Company

Program Data Sheet Energy Smart Schools Program

January 2010

Exhibit A

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Section C: Proposed 2010, 2011, and 2012 Program............................................................................7 Rationale and Supporting Data ..........................................................................................................8 Supporting Savings Data .................................................................................................................10 20102012 Program Execution ........................................................................................................13 20102012 Program Management Plan ............................................................................................14 20102012 M&V Data Store ...........................................................................................................14 M&V Plan ......................................................................................................................................14



List of Tables Table 1: Energy Smart Schools 2008 Results ........................................................................................................................... 4 Table 2: Energy Smart Schools 2009 Targets ........................................................................................................................... 6 Table 3: Proposed Budgets Summary for the Base, Low and High Program Scenarios................................................................ 7 Table 4: Proposed Targets Summary for the Base, Low and High Program Scenarios................................................................. 7 Table 5a: Base Scenario Proposed Targets and Budgets, Program Years 20102012................................................................... 7 Table 5b: Low Scenario Proposed Targets and Budgets, Program Years 20102012 .................................................................. 8 Table 5c: High Scenario Proposed Targets and Budgets, Program Years 20102012.................................................................. 8 Table 6: Energy Smart Schools Technical Services Toolkit ...................................................................................................... 9 Table 7: Energy Efficiency Measures......................................................................................................................................11 Table 8a: Base Scenario Program Budget by Category, Program Years 20102012 ................................................................12 Table 8b: Low Scenario Program Budget by Category, Program Years 20102012.................................................................12 Table 8c: High Scenario Program Budget by Category, Program Years 20102012 ................................................................13 Table 9a: Base Scenario Cost Test Results 20102012.............................................................................................................17 Table 9b: Low Scenario Cost Test Results 20102012 .............................................................................................................17 Table 9c: High Scenario Cost Test Results 20102012.............................................................................................................17 Table 10a: Base Scenario Utility Economic Evaluation ...........................................................................................................18 Table 10b: Low Scenario Utility Economic Evaluation............................................................................................................18 Table 10c: High Scenario Utility Economic Evaluation ...........................................................................................................18


Exhibit A

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Date: January 2010

Program Name: Energy Smart Schools Program

Program Status: Expanded

ProgramManager: John Hargrove


2009 Budget: $400,000


Low $500,0000 $500,0000 $500,0000

Base $1,070,000 $1,270,000 $1,270,000

High $1,338,000 $1,588,000 $1,588,000


Base 1.74

High 1.83

Program Summary The Energy Smart Schools Program is designed to facilitate energy efficiency and peak demand reduction in K12 public schools. The program offers incentive funding to offset the first cost associated with energy efficiency investments. Perhaps even more importantly, technical support is also provided to help school districts identify qualifying projects, provide assessment of program viability, calculate energy and cost savings, provide energy savings verification, and assist with district internal communications to management. A complete listing of the support services offered by Nevada Power is provided in the Energy Smart Schools Technical Services Toolkit, which is provided later in this program data sheet.

Nevada Power’s Energy Smart Schools Program serves the Clark County School District (CCSD), which is the public education provider for Las Vegas and the surrounding communities in southern Nevada and the only K12 public school district within Nevada Power’s service territory. The CCSD owns and operates more than 300 educational facilities as well as 25 major service and support facilities in Nevada Power’s service territory. CCSD is the second largest Nevada Power customer. It consumes more than 320 million kWh annually, with annual electricity costs totaling almost $40 million. CCSD employs a fulltime energy manager and has an active energyefficiency program.

The primary objective of the Energy Smart Schools Program is to achieve cost effective energy savings that ultimately result in energy and cost savings for the school district. Customer incentives are structured to encourage and accelerate the installation of energy efficiency measures. Higher incentives are offered for improvements to existing buildings than for new construction due to the higher cost of retrofit energy efficiency measures as compared to energy efficiency measures in new construction.

Section A: 2008 Program Results The 2008 Energy Smart Schools Program was very effective as it exceeded program targeted goals. The program exceeded the 2008 budget goal by 89.4%, however, the program surpassed its targeted energy savings goal by 163.0% and the targeted demand savings by 515.0%. Actual results included 198 projects consisting of 222 energy conservation measures. Table 1 provides the targets and actual results. The results are as determined by the 2008 measurement and verification (M &V) report.

The significant accomplishment in demand savings is primarily attributed to lighting retrofits and the installation of high efficiency air conditioning compressors. This accomplishment represents the

Exhibit A

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culmination of the efforts of the Energy Smart Schools Program team over the past several years to initiate and complete these projects.

Table 1: Energy Smart Schools 2008 Results


Budget $400,000 $757,437 189.4%

Participants 10 198 1980.0% Energy Savings (MWH) 2,189,071 5,756,419 263.0%

Demand (kW) 321.0 1,974.0 615.0%

TRC 1.25 1.65 132.0%

Nevada Power offers a suite of services through its Energy Smart Schools Technical Services Toolkit. The technical tool kit provides CCSD a suite of energy efficiency services to choose from as they determine which services best meet the needs of the district. For 2008, Technical and Analytical Assistance, New Construction Design and Plan Review services were the primary Toolkit items most needed and consequently implemented with CCSD. This emphasis occurred because of the Clark County School District’s focus on energy efficiency for new construction projects in 2008.

The Energy Smart Schools Program worked with CCSD’s energy management staff, and supported and enhanced their efforts to improve energy efficiency throughout the school district. This effort included providing services through the Technical Services Toolkit as noted and providing training for CCSD employees. A training session was provided for approximately 50 CCSD employees in 2008. Participants included building engineers, HVAC technicians and EMS technicians. The training involved building performance, methods to improve system performance, and energy case studies based on CCSD schools.

The Energy Smart Schools team continued its focus on marketing efforts to maintain ongoing communication with the school district and working with their representatives to identify potential projects. For example, the Energy Smart Schools team worked with the CCSD staff on the Custodial Control measure. The installation of this measure has proven to be highly successful over the past several years.

2008 Analysis The 2008 program far exceeded program targets. The following factors contributed to the overall success of the 2008 program.

• The ability to adapt the program to align with CCSD priorities during the program year allowed Nevada Power to maximize the benefits of this program. Nevada Power’s flexibility in the delivery of the program played a significant role in the large increases captured in excess of the 2008 program targets. The ability to expand the original budget allowed the program team to maintain the productive momentum established by CCSD early on during the 2008 program year.

Exhibit A

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• A retrocommissioning program was started near the end of 2007 and continued with energy efficiency upgrades in identified schools in 2008. The retrocommissioning helps identify whether HVAC systems are functioning as efficiently as possible. This enabled CCSD to effectively identify HVAC systems that needed a replacement, tune up, or other attention.

• The actual demand savings were primarily attributed to lighting retrofits and the installation of high efficiency air conditioning compressors. This accomplishment represents the culmination of the efforts of the Energy Smart Schools Program team over the past several years to support these projects.

2008 Lessons Learned • The flexibility of the Energy Smart Schools Program during the program year enabled Nevada

Power to seize opportunities that maximized the benefits of this program.

• Ongoing energy efficiency education and technical assistance is a key to the continued success of this program. This assistance continued to prove valuable when decisions were made in upgrading equipment because it provided better defined energy efficiency project data and facilitated communications between various departments within the school district. Program staff reviewed building plans and was able to offer ongoing feedback on new and retrofit projects.

• Other than the control changes through the Custodial Cycle retrofits, the Building Optimization Assistance service was less effective than anticipated. Future energy savings estimates from this measure are being reevaluated in light of these results. Changes being considered may include more emphasis on services that review school design plans and/or review of new projects.

• By providing technical assistance to the school district, Nevada Power was able to improve overall program paybacks from six years to two years and was more successful in convincing the school district to initiate energy efficiency projects than the provision of monetary incentives.

Section B: 2009 Program The 2009 Energy Smart Schools Program is a continuation of the successful 2008 program that was designed to facilitate energy efficiency and peak demand reduction in K12 public schools located in Nevada Power’s service territory. The primary objective of the Energy Smart Schools Program is to achieve cost effective energy savings that ultimately result in energy and cost savings for the school district. In order to achieve this objective, the Energy Smart Schools Program consists of the following components.

• Financial Incentives. The program offers funding incentives to offset the first cost associated with energy efficiency investments.

• Education and training. Technical support is also provided to help the school district identify qualifying projects, provide assessment of project viability, calculate energy and cost saving, provide energy savings verification, and assist with district internal communications to management through the Energy Smart Schools Technical Services Toolkit.

2009 Program Execution The 2009 program execution will be the same as 2008 with the flexibility to modify the program delivery to meet the needs of CCSD. The program will again offer the Technical Services Tool kit and provide

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training regarding energy efficiency and conservation for district staffing involved in energy management or decisions.

Table 2: Energy Smart Schools 2009 Targets

2008 Actual

2009 Target

Budget $757,436 $400,000

Energy Savings (kWH) 5,756,419 2,189,071

Demand (kW) 1,974.0 321.0

TRC 1.69 1.25

Cash incentives are offered for most types of energy savings projects in order to provide the maximum flexibility for energysaving retrofits. The following summarizes the 2009 incentives and requirements.

• Incentives were $0.05 per kWh for retrofit project.

• Incentives were $0.015 per kWh for new construction & renovation projects.

• Incentives were provided for both custom and prescriptive measures.

• Incentives were limited to not exceed project costs.

• Prenotification was required on larger projects to reserve funding.

The Energy Smart Schools Program customer incentives are structured to encourage and accelerate the installation of energy efficiency measures. Higher incentives are offered for improvements to existing buildings than for new construction because:

• Improving efficiency in new construction is already more cost effective because added costs for efficiency are only incremental – the only increase in initial cost is the difference between the previouslyplanned technology and the more energy efficient technology.

• There is more momentum and focus on energy efficiency for new construction projects – especially in the Clark County School District.

• Identifying and specifying retrofit projects opportunities require more effort, and the school district must generally replicate that effort at each facility.

Technical support is also provided to help the school district identify qualifying projects, provide assessment of project viability, calculate energy and cost saving, provide energy savings verification, and assist with district internal communications to management.

2009 Results to Date As of September, savings of 3,206,506 kWh have been achieved at CCSD. Projects completed to date include lighting retrofits, high efficiency equipment installations in new school construction projects and controls installations on portable classrooms.

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Section C: Proposed 2010, 2011, and 2012 Program The 20102012 Energy Smart Schools Program is proposed to be an expansion of the successful 2007 2009 program. The primary objective of this program is to achieve cost effective energy savings that ultimately result in energy and cost savings for the Clark County School District. The program will provide technical trainings, technical assistance, and incentives to CCSD.

The proposed budgets and targets for the base, low, and high scenarios for this program are provided in Table 3 and Table 4.


Scenario Budget

TRC 2010 2011 2012

Base $1,070,000 $1,270,000 $1,270,000 1.74

Low $500,000 $500,000 $500,000 1.84

High $1,338,000 $1,588,000 $1,588,000 1.83

Table 4: Proposed Targets Summary for the Base, Low and High Program Scenarios

Scenario Annual Energy Savings (kWh) Annual Demand Savings

(kW)

2010 2011 2012 2010 2011 2012

Base 4,140,000 4,975,000 4,975,000 1,658 1,992 1,992

Low 2,007,000 2,007,000 2,007,000 729 729 729

High 5,418,405 6,368,415 6,368,415 2,174 2,555 2,555

Program details for the base program scenario are provided in Table 5a. Program details for the low program scenario are provided in Table 5b and program details for the high program scenario are provided in Table 5c.


Total Program – Base Scenario 2010 2011 2012 Budget, Total Program $1,070,000 $1,270,000 $1,270,000

Demand Savings (kW) 1,658 1,992 1,992 Energy Savings (kWh) 4,140,000 4,975,000 4,975,000

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Total Program – Low Scenario 2010 2011 2012 Budget, Total Program $500,000 $500,000 $500,000

Demand Savings (kW) 729 729 729 Energy Savings (kWh) 2,007,000 2,007,000 2,007,000


Total Program – High Scenario 2010 2011 2012 Budget, Total Program $1,338,000 $1,588,000 $1,588,000

Demand Savings (kW) 2,174 2,555 2,555 Energy Savings (kWh) 5,418,405 6,368,415 6,368,415

Rationale and Supporting Data Nevada Power’s Energy Smart Schools Program serves the Clark County School District, which is the public education provider for Las Vegas and the surrounding communities in southern Nevada and the only K12 public school district within Nevada Power’s service territory.

CCSD projects are evaluated using the following criteria:

• Longterm energy and demand savings potential.

• Potential for similar projects throughout the school district.

• Energy and peak demand savings potential.

• Project cost, energy savings, O&M cost savings, payback period, capital expenditure budgets, and ability to leverage incentive with customer contribution.

• Project installation timeline.

• Qualitative benefits, such as student impact, diversity/complexity, and public interest.

Cash incentives are offered for most types of energy savings projects in order to provide the maximum flexibility for energysaving retrofits. The following summarizes the 2009 incentives and requirements.

• Incentives were $0.05 per kWh for retrofit projects.

• Incentives were $0.015 per kWh for new construction & renovation projects.

• Incentives were provided for both custom and prescriptive measures.

• Incentives were limited to not exceed project costs.

• Prenotification was required on larger projects to reserve funding.

The incentives for 2010 and beyond will be adjusted higher as the next increments for energy savings will be more costly than previously experienced. This is because new construction has slowed down and because many of the lower cost measures have been completed in the existing schools.

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The Energy Smart Schools Program customer incentives are structured to encourage and accelerate the installation of energy efficiency measures. Higher incentives are offered for improvements to existing buildings than for new construction because:

• Improving efficiency in new construction is already more cost effective because added costs for efficiency are only incremental – the only increase in initial cost is the difference between the previouslyplanned technology and the more energy efficient technology.

• There is more momentum and focus on energy efficiency for new construction projects – especially in the Clark County School District.

• Identifying and specifying retrofit project opportunities require more effort, and the school district must generally replicate that effort at each facility.

Technical support is also provided to help the school district identify qualifying projects, provide assessment of project viability, calculate energy and cost saving, provide energy savings verification, and assist with district internal communications to management.

As in previous program years, the school district will be offered the Energy Smart for Schools Technical Services Toolkit and encouraged, within program budget constraints, to select the services that would benefit them the most. Table 6 provides a summary listing of the technical support services offered.

Table 6: Energy Smart Schools Technical Services Toolkit

Tool Objective Target Audience

Energy Benchmarking

Allows districts to compare the energy performance of their buildings with other district schools, Nevada schools, and nationally.

School Board, senior district administrators, energy managers, and principals.

Energy Master Planning and Best Practices

Provides a workshop, a management performance scorecard, guidance on best management practices relevant to energy planning, and a template for a written master plan.

Senior district administrators, energy managers.

New Construction Design and Plan Review

Assists districts to determine if their new construction plans are appropriately using efficient technologies.

Energy managers, construction planners, design professionals.

Technical Support and Assessment

Address technical needs on an individual basis for specific schools, technologies or challenges. Highly custom and reactive.

Facility and energy managers, project planners.

Building Optimization Assistance

Technical guidance and assistance for lowcost/nocost building tuneup and retro commissioning.

Energy/facility managers, building operations or maintenance personnel.

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Tool Objective Target Audience

Assistance with funding, financing, and performance contracts

Guidance and /or individual assistance to better overcome financial barriers or utilize ESCos.

Energy managers, purchasing departments, senior district administrators.

Assistance with Project Procurement

Best practices, individual guidance, and information exchange network for improving energy project purchasing methods.

Energy managers, project planners, purchasing departments.

Assistance with Evaluating Vendors and Proposals

Assistance on how to best solicit, evaluate, and respond to vendors and vendor proposals.

Energy and facility managers, purchasing departments.

Approaches to Accelerate Decisionmaking

Guidance and an information exchange network for tips on moving projects forward in the decisionmaking process.

Energy managers and senior district administrators.

Building Survey and Audit Training and Guidance

Proactive training and personalized guidance on how to survey existing buildings for energy saving retrofit opportunities.

Energy, and facility managers and staffs, maintenance or project planning personnel.

Supporting Savings Data The key factors to the success of the Energy Smart Schools Program have been the ongoing communication with CCSD personnel through energy efficiency education and technical assistance and project selection guided by the school district. The communication has included consultation with the energy manager regarding possible energy efficiency measures, which could be included in the program. From these discussions, a list of viable energy efficiency measures was developed. These potential energy efficiency measures are listed in Table 7. The number of each of these measures that will be undertaken each year will depend on the funding level approved for this program, the funding available within school district resources and the projects selected by the school district.

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Table 7: Energy Efficiency Measures

Measures # Units (Sites)

Annual kWh

Savings per Unit

Installed Cost per unit (site)

New Construction or Rebuilds 15 70,000 Varies Rehab/Modernization/Upgrade / Chiller Replacement 36 35,000 Varies Roof Coatings for Portables 1500 490 $150 Security Switch Shutoff of Emergency Lighting 30 36,620 $20,000 Retrocommissioning/Control Optimization (6% savings) 100 50,400 $ 25,000 Enterprise (Real Time) Energy Information System (250 sites) 1 395,467 $250,000 Undercounter refrigerator removal/replacement program 3,000 455 $2,000 Airside Economizer Rehabilitation 100 28,000 $15,000 AirCooled Chiller Replacement 10 160,650 $225,000

Occupancybased ventilation controls for gyms; MP rooms and auditoria.

200 5,040 $5,000 Gym and MP Room HID> T8 or T5 Lighting Replacement (50% 6LHO, 50% 4LHO; 4,000 hr/yr). 70 29,680 $14,000

As described in the Rational and Support Data section, Nevada Power is proposing a suite of various energy efficiency measures to facilitate working with the school district in terms of school district funding and priorities. The decision will be based on consultation with an agreement by the CCSD. As shown by the 2008 program performance, this flexibility will enable Nevada Power to maximize the effectiveness of the program.

The proposed base scenario, which is a major expansion of the program compared to previous years, incorporates the factors which have contributed to the success of the program in prior years. The factors, which were described earlier, are the flexibility to adapt the program to the needs of the school district program and thus maintain a strong relationship with the energy management of the CCSD. This base scenario is designed to be a major expansion from the targets for 2009 and to build on the successes demonstrated in 2008.

The low scenario is a continuation of the program budget and targets roughly at the scenario that was approved for the 20072009 action plan period.

The primary increase from the base to high scenario case is attributed to the full implementation of the retrocommission project which would include approximately 100 schools over the action plan period. During the 2008 program year, this measure was implemented at two schools in the district. A pilot study is currently under way at three high schools to verify the results obtained from the initial applications of

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the retrocommissioning measure. The retrocommission pilot project should be completed this winter, however; the evaluation of the pilot will take several months. This increase above the base scenario includes some uncertainty regarding the actual savings that will be gained from the retrocommissioning measure and risk that the school district may not be able to fund the work to achieve a portion or all of the potential savings identified.

The proposed budget detail by category at the base, low, and high scenarios are provided in Table 8a, 8b, and 8c.





Rebates $645,900 $774,300 $774,300









Rebates $264,200 $264,200 $264,200





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Rebates $814,800 $991,700 $991,700





20102012 Program Execution Execution of the Energy Smart Schools Program will continue as in previous program years with the changes listed below. This procedure is based on the following components:

• Financial Incentives. The program offers incentive funding to offset the first cost associated with energy efficiency investments.

• Education and training. Technical support is also provided to help the school district identify qualifying projects, provide assessment of project viability, calculate energy and cost savings, provide energy savings verification, and assist with district internal communications to management.

The following procedure will be used to implement this change:

• Prior to the program year, the program staff will meet with school district representatives to discuss the upcoming requirements for the program year. The group will discuss the mix of energy measures to be installed during the program year. The CCSD will then select the mix of energy efficiency measures that will be installed during that program year.

• Program staff will maintain ongoing communication with CCSD personnel in order to evaluate the progress and success on installed measures and work with the school district where changes are warranted.

The program will continue to offer options to the school district and organize the actual delivery of the program around the expressed wishes and needs of the school district.

The ongoing communication with CCSD personnel through energy efficiency education and technical assistance has been a key to the program success. This strategy will also be continued in the 20102012 action plan period. This assistance provides extra value when decisions are being made regarding

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upgrading equipment because it provides a better definition of energy efficiency project data and facilitates communications between various departments within the school district.

20102012 Program Management Plan The program management plan for the Energy Smart Schools Program will be similar to previous program years. The Energy Smart Schools team will conduct weekly staff meetings with Nevada Power’s program management to continuously track the status of tasks and goals. In addition, the weekly staff meetings will identify specific issues that need attention in the coming weeks and tasks will be assigned to team members.

20102012 M&V Data Store The Nevada DSM M&V Data Store Web Portal, referred to as “Data Store”, is a web portal that has been customized for both Nevada Power Company’s and Sierra Pacific Power Company’s internal use. Its function is to track Demand Side Management (DSM) program performance. Nevada Power uses this management and tracking tool throughout the year to ensure that the planned investments provide clear value. The Data Store also supports the evaluation, measurement, and verification activities by providing the data needed for sample selection and verification of savings data.

M&V Plan

M&V Objective The EM&V Contractor will perform evaluation, measurement and verification (EM&V) activities to confirm the savings being realized through the Energy Smart Schools Program that will be implemented in Southern Nevada.

Approach Data that can be used for estimating the gross savings being achieved through the projects need to be collected for samples of projects for which incentives were paid through the program. There is a variety of considerations that enter into the selection of the EM&V Contractor’s sampling plan. The EM&V Contractor expects to develop the final version of the sampling plan through an iterative process for each sample project The EM&V work will produce two estimates of gross savings: an expected gross savings estimate and the verified gross savings estimates developed through the M&V procedures. Programlevel gross savings will be developed by applying savings realization rates to the programlevel expected savings. This procedure for estimating gross savings for the program is an application of ratio estimation, which improves the precision of the estimates.

The EM&V Contractor will calculate the sample sizes required to estimate the total achieved savings with 10% precision at 90% confidence.

Sample Selection The EM&V Contractor will expect that the distribution of savings for the program being evaluated in this effort will generally be positively skewed, with a relatively small number of projects accounting for a high percentage of the estimated savings for the program. The sample design the EM&V contractor will use for selecting program projects takes such skewness into account and allows estimates of savings to be determined with ±10% precision at the 90% confidence level for the program. In particular, the EM&V

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Contractor will accomplish the sampling using an approach originally suggested by Hidiroglou1. With this approach, a number of sites with large savings are selected for the sample with certainty, and a random sample is taken of the remaining sites.

An additional aspect of the sampling plan is to take account of sample sites needing to be selected as projects and sites become eligible over time for inclusion in the EM&V effort. A full sampling frame cannot be constructed for the whole target population of projects prior to the start of the sampling and data collection. The sampling plan will therefore be designed to have a predetermined sample size requirement for achieving certain analytical goals but with adjustments made over time as data for additional sites become available.

For the actual selection of the sample sites, we propose to use a near realtime process whereby the EM&V Contractor will select a portion of the sample each quarter as projects accumulate in the program. Projects initiated during a quarter will be sampled as they become available and the selected samples are monitored. The progress of the sample selection is monitored by looking at the additions to sampling frame that have arrived and at the cumulative sampling frame totals and the cumulative sample totals in comparison to the corresponding values that were expected per the initial sampling analysis.

M&V Analysis Methods The EM&V Contractor will collect some important items of data needed for the analysis of gross savings through monitoring at a subsample of the sites selected for the onsite data collection. The sites chosen for monitoring are those sites with projects where there is some uncertainty about the values for important factors that affect the level of savings.

To better inform the selection of sites for monitoring, the EM&V Contractor will review the program documentation that the implementation contractor may prepare for the sites chosen for the onsite sample. For this review, the EM&V Contractor will use a documentation checklist to document any equipment changed or new equipment installed, including (1) descriptions, (2) schematics, (3) performance data, and (4) other supporting information to document information about the savings calculation methodology, including (1) what methodology was used, (2) specifications of assumptions and sources for these specifications, and (3) correctness of calculations.

OnSite Data Collection Procedures The EM&V Contractor’s field staff will conduct the onsite data collection. Before visiting a site, the field personnel will review the documentation for the project(s) implemented at that site. Each participant’s project file is reviewed to verify the information on energy efficiency measures that were proposed and implemented.

During an onsite visit, the field staff will accomplish the following: • Verify the implementation status of all proposed measures. • Verify that the energy efficiency measures for which incentives were paid were indeed

installed, that they were installed correctly, and that they still function properly. • Collect the data needed to analyze the energy savings that have been realized from the

installed measures.

1 See Hidiroglou, M. A., “The Construction of a SelfRepresenting Stratum of Large Units in Survey Design,” The American Statistician, February 1986, Vol. 40, pp. 2731.

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The EM&V Contractor will collect the data using a standardized data collection form. The form is comprehensive in addressing a facility's characteristics, its modes and schedules of operation, and its electrical and mechanical systems. The form also addresses various energy efficiency measures, including high efficiency lighting (both lamps and ballasts), lighting occupancy sensors, lighting dimmers and controls, air conditioning, high efficiency motors, etc.

The EM&V Contractor will collect data from the following additional sources: • Conduct interviews with the staff of the site. • Review documents and records at the site. • Visual inspections are made of control settings, lighting levels, inventory of end use

appliances and equipment, ventilation rates, building population, occupancy level, and other parameters.

Data is also needed that pertain to the present pattern of energy use at a site. Where appropriate, the EM&V Contractor will establish this pattern. Photographs of a site and of its electrical and mechanical systems are also taken during the onsite visit. Throughout the onsite data collection and monitoring effort, the EM&V Contractor will apply quality control procedures to ensure that the data collected are of high quality. As the data collection progresses, each completed data collection form is thoroughly reviewed by the field staff supervisor.

Monitoring Procedures The EM&V Contractor will also conduct monitoring of specific enduses at participating sites. The end use equipment that the EM&V Contractor will monitor will depend on the characteristics of each particular site. Before a site is approved for monitoring, consideration must of course be given to whether the monitoring is feasible and whether facility personnel will be cooperative for the monitoring effort. Cooperation from facility personnel will be obtained.

After a site has been accepted for monitoring, the EM&V Contractor will install suitable monitoring equipment. Because the equipment is onsite only temporarily, it does not need to be mounted in a permanent fashion. The EM&V Contractor will provide the technical and managerial control to ensure that the equipment is installed properly and that installation work proceeds on schedule. After the monitoring equipment has been installed but before actual data collection begins, the EM&V Contractor will verify the installation of the equipment. This verification includes an inspection of the loads being monitored and a check of the monitoring equipment to verify that appropriate installation procedures were followed.



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Input Data, Description of Sources, and Results of Financial Analysis A copy of the input data sheets and financial model output are provided as Technical Appendix Item DSM2. These figures were all calculated based upon the information contained in this program data sheet and the materials referenced herein. The following tables (9a10c) summarize the results of the financial analysis for all three scenarios presented in this program data sheet.



Total Resource 1.74 $11,670,074 $6,697,734 $4,972,340 $0.04

Utility 3.65 $12,102,536 $3,316,864 $8,785,673 $0.02

Participant 3.68 $11,590,722 $3,148,006 $8,442,717 $0.02

Ratepayer 0.76 $11,670,074 $15,340,048 ($3,669,974) $0.10

Societal cost 1.95 $13,053,983 $6,697,734 $6,356,249 $0.04



Total Resource 1.84 $4,843,714 $2,629,075 $2,214,639 $0.04

Utility 3.63 $5,029,187 $1,384,681 $3,644,507 $0.02

Participant 4.44 $5,087,137 $1,144,524 $3,942,613 $0.02

Ratepayer 0.73 $4,843,714 $6,657,291 ($1,813,577) $0.10

Societal cost 2.07 $5,451,108 $2,629,075 $2,822,033 $0.04



Total Resource 1.83 $14,662,992 $8,018,379 $6,644,612 $0.04

Utility 3.67 $15,203,754 $4,147,459 $11,056,295 $0.02

Participant 4.08 $14,622,839 $3,579,740 $11,043,099 $0.02

Ratepayer 0.76 $14,662,992 $19,311,061 ($4,648,069) $0.10

Societal cost 2.05 $16,408,929 $8,018,379 $8,390,550 $0.04

Exhibit A

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Total Costs $1,070,000 $3,610,000


Energy Benefits ($) $167,000 $10,991,932





Total Costs $500,032 $1,500,096


Energy Benefits ($) $79,804 $4,836,779





Total Costs $1,337,995 $4,513,995


Energy Benefits ($) $216,817 $13,742,936



Exhibit A

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These values are significantly less than the projected cost for energy for the company.

Section E: Supporting Documentation M&V Report for 2008 for program performance is provided as Technical Appendix Item DSM22.

Exhibit A

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Exhibit A

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Nevada Power Company Commercial Retrofit Incentives Program

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Commercial Retrofit Incentives Program January 2010

Exhibit A

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Table of Contents

Program Summary...................................................................................................................................3

Section A: 2008 Program Results...............................................................................................................4 2008 Analysis .....................................................................................................................................5 2008 Lessons Learned ..........................................................................................................................6

Section B: 2009 Program ..........................................................................................................................7 2009 Program Execution.......................................................................................................................9 2009 Results to Date ..........................................................................................................................10

Section C: Proposed 20102012 Program .................................................................................................12 Rationale and Supporting Data ............................................................................................................17 Supporting Savings Data.....................................................................................................................19 20102012 Program Execution ............................................................................................................22 20102012 Program Management Plan .................................................................................................24 20102012 Data Delivery and Tracking.................................................................................................24 M&V Plan ........................................................................................................................................24

Section D: Program Economic Evaluation ...............................................................................................26 Cost Benefit Analysis .........................................................................................................................26 Freeridership.....................................................................................................................................27 Input Data, Description of Sources, and Results of Financial Analysis.......................................................27 Interpretation of Results......................................................................................................................29

Section E: Supporting Documentation ....................................................................................................30

List of Tables Table 1a: Results, Program Year 2008 ......................................................................................................................... 4 Table 1b: Energy Savings Results by Measure Category, Program Year 2008 .................................................................... 5 Table 2: Targets and Budgets, Program Year 2009.......................................................................................................... 7 Table 3: Program Year 2009 Accomplishments to Date ................................................................................................. 11 Table 4: Budgets, Program Years 20102012 .............................................................................................................. 14 Table 5: Targets, Program Years 20102012 ............................................................................................................... 14 Table 6a: Base Scenario Proposed Targets and Budgets, Program Years 20102012 .......................................................... 15 Table 6b: Low Scenario Proposed Targets and Budgets, Program Years 20102012 ........................................................... 16 Table 6c: High Scenario Proposed Targets and Budgets, Program Years 20102012........................................................... 17 Table 7a: Base Scenario Program Budget by Category, Program Years 20102012.......................................................... 21 Table 7b: Low Scenario Program Budget by Category, Program Years 20102012.......................................................... 21 Table 7c: High Scenario Program Budget by Category, Program Years 20102012 ......................................................... 22 Table 8a: Base Scenario Cost Test Results 20102012 .................................................................................................. 27 Table 8b: Low Scenario Cost Test Results 20102012 .................................................................................................. 28 Table 8c: High Scenario Cost Test Results 20102012.................................................................................................. 28 Table 9a: Base Scenario Utility Economic Evaluation .................................................................................................. 28 Table 9b: Low Scenario Utility Economic Evaluation................................................................................................... 29 Table 9c: High Scenario Utility Economic Evaluation .................................................................................................. 29


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• Program Name: Commercial Retrofit Incentives Program

• Program Status: Expanding

• Program Manager: Mary Ann Sheehan


• 2009 Budget: $5,000,000

• Proposed Budget: 2010: 2011: 2012:

Low $ 7,050,000 $ 7,500,000 $ 7,500,000

Base $ 9,000,000 $ 9,150,000 $ 9,150,000

High $ 14,000,000 $ 14,050,000 $ 14,050,000


Base 2.66

High 2.43

Program Summary The Commercial Retrofit Incentives Program (CRIP) facilitates the implementation of energy efficient measures in commercial, industrial and institutional facilities through incentives and technical services. The CRIP offers perunit prescriptive incentives for energy efficient lighting, cooling, motors, commercial kitchens and refrigeration along with miscellaneous energy conservation measures. In addition, custom incentives are offered for most measures not covered under the prescriptive component that result in verifiable energy savings. The CRIP also offers a direct install component for small commercial customers and an upstream incentive component for HVAC and motors.

The CRIP has been successfully implemented since 2003 under the name “Sure Bet”. In 20102012, Nevada Power proposes to expand the annual budget of the CRIP in response to increasing demand and to target opportunities in previously hardtoreach markets. The program expansion will allow more customers to participate, provide greater opportunity for participation from those customers with a longer planning horizon, and reach market segments that have historically had a low rate of participation in the program.

The proposed niche market component was designed to target the savings from some previously hardto reach markets. Many of these niche markets were proposed by contractors in response to Nevada Power’s RFI process in late 2008. The niche markets would include components such as providing incentives to the hotel/motel customers previously served under the standalone hotelmotel program, expanding the commercial kitchens component focusing on the new generation of demand ventilation. In addition, the niche market component would consider new components targeting specific technologies and markets including A/C tuneups, compressed air, retro commissioning, enhanced automation, data centers, grocery stores, water/waste water and other industrial processes, and other technologies that show potential based on successful results as part of the market and technology trials program. Additional marketing and outreach is also planned to identify market opportunities and to help guide customers to the program component(s) that will best assist them with their project(s) or facility(s).

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The proposed new components are included based upon responses received from contractors to an initial RFI. A final determination of which if any, of the new components will be implemented will be based on an evaluation of market interest and contractor responses to a general RFP to be issued by Nevada Power.

The program design includes funding to begin with pilots with varied components and the expansion of the successful components throughout the threeyear plan period. The low and base scenario project approximately 10% of the total program savings will be attributable to these new components by the end of the third year. The high scenario projects approximately 20% of the program savings will be realized from these niche markets by the end of the third year. In all scenarios, the savings potential for lighting and direct install lighting reflect the impact from anticipated code changes affecting CFLs and T12 retrofits.

Nevada Power’s objective is to work with existing customers, contractors and industry associations to promote and participate in the CRIP thereby influencing retrofit and purchasing decisions to transform market behavior. While the CRIP team markets and processes the customer’s project incentive, they also provide a variety of key support functions such as technical assistance, customer assistance, outreach activities and industry support. This combination has proven successful in this market since 2003. In the plan for the 20102012 action plan period the objective is to add components that place a greater emphasis on specific customer groups which typically have a higher energy use per sq ft and therefore a higher savings potential.

Section A: 2008 Program Results 2008 was a very successful year for the CRIP. The goal for annual energy savings was surpassed by 31% while the incentive budget was under spent by 8%. Overall, the program achieved demand savings of 22,229 kW and 64,834,701 kWh of energy savings. The program paid $3,850,661 for incentives. Custom measures were paid at $0.10 for peak savings and $0.05 for offpeak savings with tiered incentives and a payment cap set at project cost.

As displayed in Table 1a, the 2008 CRIP was successful in surpassing goals. Additional detail and analysis regarding program performance is available in the 2008 CRIP Final Report included in the 2009 Annual DSM Update Report provided in Exhibit B.

Table 1a: Results, Program Year 2008

Total Commercial Retrofit Incentive Program Target Actual Variance

Budget, Total Program $6,000,000 $5,533,548 92.2%

No. of Participants 292 620 212.3%

Demand Savings (kW) 9,052 22,229 245.6%


TRC 1.74 5.84 335.6%

Exhibit A

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Table 1b: Energy Savings Results by Measure Category, Program Year 2008

Energy (kWh) % of Total (kWh)

Prescriptive Lighting 31,525,505 49%

Prescriptive Motors 440,698 1%

Prescriptive HVAC 4,022,717 6%

Prescriptive Refrigeration 1,996,527 3%

Custom Projects 21,552,114 33%

Direct Install HVAC 1,214,262 2%

Direct Install Lighting 3,471,890 5%

Direct Refrigeration 344,835 1%

Upstream HVAC 187,489 0%

Upstream Motors 78,663 0%

Total 64,834,701 100%

2008 Analysis As described above, the CRIP was very successful in 2008 and exceeded goals. The following listing summarized major variances from original projections or expectations:

Nevada Power’s Commercial Retrofit Incentive Program demonstrated strong activity in 2008 consistent when compared to 2007 activity due to both the successful direct install component which resulted in 233 projects and the upstream distributor incentive for premium efficiency motors and high efficiency HVAC equipment which resulted in 98 projects.

The 620 projects resulted in an on peak reduction of 22,229 kW compared to a goal of 9,052 kW (247%) and energy savings of 64,835 MWh compared to a goal of 49,394 MWh (131%). Total expenditures were $5,533,548 (92.2%). The program was able to achieve savings above goal while remaining below budget due to several large projects that were subject to tiered incentives. (A description of the tiered incentive structure for 2008 is included in the program report section of the Nevada Power Annual Report of 2008 activity.)

The M&V work to verify savings for 2008 projects was completed and savings are verified.

The 2007 savings were reported as provisional in the 2008 annual report. The M&V report indicated that the verified energy and demand savings were 68,644,823 kWh and 23,535 kW which is approximately 139% of the energy savings goal and 260% of the demand savings goal, respectively.

Exhibit A

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2008 Lessons Learned There are several lessons learned that help to explain the 2008 successes, as well as provide information useful for the enhancement of the program for future years. The following list of lessons learned was developed based upon a look back at the year 2008.

• Taking time to talk with customers by helping them with their applications and by providing energy information using a "personal touch" has proven to be a highly effective approach in 2008. Customers have appreciated the direct assistance with filling out application forms and securing contractors. This type of activity is planned to continue in 2009 and beyond.

• Public presentations of incentive checks to customers and encouraging the local media to "pick up" the articles assist in promoting and generating interest in the program. These activities are planned to continue in 2009 and beyond.

• During the second half of 2007, Nevada Power piloted a successful upstream incentive with the goal of penetrating the high efficiency HVAC and Premium Efficiency Motor market. The upstream buy down significantly increases the stocking of energy efficient equipment by local distributors making the energy efficient equipment more practical for emergency replacement applications. The goal is to have premium inventory immediately available to the customer base at the time of failure or replacement. Federal standards for packaged AC units < 5 Tons in size increased midyear 2008. However, equipment that was produced prior to the change in standards was still available for purchase. Therefore, the program will change the baseline to the new standards for the 2009 program year, when the majority of the equipment available for sale will reflect the new standards.

• During 2008, Nevada Power fully integrated a direct install offering, also based on a successful pilot in 2007. This program component provides energy efficiency measures to customers with less than 600,000 kWh/yr consumption and in leased space or in owner occupied space in economically depressed geographic locations. Based on customer acceptance in this otherwise hardtoreach market during 2008, this program component will be continued in 2009 and is proposed to be increased in size in the high scenario of the 20102012 action plan period.

As a result of a M&V finding related to prescriptive savings in the new construction program, policies and procedures have been changed to calculate the actual savings for projects with prescriptive savings greater than 750,000 kWh on an annualized basis. This change limits the potential negative impact of very large projects on the overall gross realization rate for prescriptive savings in the commercial retrofit program. To further reduce the potential of overstating estimated savings before the M&V is completed, beginning in 2008 the policy regarding prescriptive incentives and savings for Variable Speed Drives (VSD) on redundant systems was changed with measures tied to redundant systems no longer eligible for incentives.

Based on customer interest, the company evaluated and adopted a set of prescriptive incentives of energy efficient commercial kitchen equipment and expanded marketing to the commercial kitchen customer segment. The tiered incentives implemented in 2008 were well received by customers. The structure was evaluated and no further revision is required for 2009, however the program manager will continue to monitor this tiered incentive structure in future years to both control budget impact and to reduce the potential for freeridership.

The Hotel Motel Program is consistent with the goals and objectives of the commercial incentive program. Based on the success of the Hotel Motel Program in 2008 and the remaining market potential,

Exhibit A

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the Hotel Motel Program energy efficiency measures will be incorporated into the Commercial Incentive Program in 2009.Beyond 2009 customers may be eligible for an incentive under the Commercial Incentive Program.

This program has consistently demonstrated a high rate of success in terms of meeting program goals and meeting the needs of customers. Nevada Power therefore recommends that this program be continued and expanded in the 20102012 action plan period.

Section B: 2009 Program The 2009 CRIP is structured similar to the 2008 offering. Minor modifications planned include changes in the HID to T5 or T8 incentive, addition of a commercial pool pump incentive and T12 to 4’HPT8 retrofit, and a change in the upstream 3phase units for 5 tons or less to have the same incentive and qualifying minimum efficiency requirement as the equivalent sized singlephase units. Custom incentives are determined from the amount of on and offpeak kWh savings and paid at $0.10 cents per onpeak kWh and $0.05 cents per offpeak kWh, respectively.

The project caps have a tiered incentive structure that provides the first $100,000 (per calendar year) of incentive funding at one hundred percent. For the next $100,000 to $500,000 of incentives paid, the incentive funding is reduced to fifty percent, any incentive earned between $500,000 and $1,000,000 will be paid at twenty percent with all incentives earned over $1,000,000 being paid at ten percent of the earned amount.

The CRIP kW and kWh savings numbers have been determined using standard engineering calculation methodologies. The methods include using deemed, calculated, modeled, and monitored values. Most of the prescriptive incentives use deemed energy and demand savings values. Deemed savings are appropriate for these measures since they have been studied, they are understood in the market, and their energy savings are widely accepted.

The primary source of the savings estimates or methodologies for the prescriptive measures is the Database of Energy Efficiency Resources (DEER), jointly developed by the California Public Utilities Commission and the California Energy Commission. Other sources include the Pacific Gas & Electric work papers for the Express Efficiency Program. A calculated savings approach is used for all custom measures. The CRIP team works with the customer and/or contractor to verify or analyze the energy and demand savings for custom measures. Every custom measure requires a unique set of information to determine the energy savings estimate. The CRIP team relies on its expertise and experience to calculate estimates in a conservative manner that both benefit the customer and the utility. In some cases, pre and/or post metering may be involved.

Table 2 provides the goals and budgets for the 2009 CRIP.


Total Commercial Retrofit Incentive Program 2009 Target

Budget, Total Project $5,000,000

No. of Participants



Exhibit A

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Measure 5 – Direct Install Lighting



Measure 6 – Direct Install HVAC



Measure 7 – Direct Install Refrigeration



Measure 8 – Custom Lighting



Measure 10 – Custom Other





Exhibit A

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Measure 12 – Upstream Motor



Total



2009 Program Execution The CRIP is designed to deliver costeffective energy savings by facilitating the installation of energy efficient measures in nonresidential facilities. The 2009 CRIP offers four approaches to assist customers with their project:

• Prescriptive


• Direct install

• Upstream

The prescriptive approach is a simplified method to optimize choices on predefined energy efficiency measures. It is an option for smaller projects or larger projects with only basic opportunities for energy savings. Typical prescriptive measures include technologies such as energyefficient lighting and occupancy sensors, energyefficient HVAC equipment, variable frequency drives and commercial kitchen equipment.

The custom approach is designed for larger, more energy intensive projects or for individual measures not included in the prescriptive component. Custom project applications require supporting equipment performance information, calculation of the on and offpeak energy savings that are expected to result from the project. In some cases (especially for nonlighting measures) this can require pre and post metering.

The direct install component is designed to provide energy efficiency upgrades to small commercial businesses in leased space and in businesses in targeted geographic areas. This component addresses the unique split incentive and other barriers to participation of this target group with higher incentives and shorter payback periods.

The upstream component was designed to provide incentives for certain measures to distributors rather than the equipment purchaser. The incentive is provided to encourage distributors to stock and sell qualifying premiumefficiency motors and air conditioning equipment to business customers in Nevada Power’s service territory.

Exhibit A

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In 2009, the CRIP will build upon the momentum of past program years by reaching out to previously participating contractors, vendors, equipment distributors, and other supplyside market actors. The CRIP continues to expand on previous success stories distributed throughout the NV Energy commercial customer networks. The CRIP team’s objective is to continue to foster new relationships with potential contractors and to increase the visibility of project successes within the Nevada Power’s service territory.

The CRIP application and administrative procedures are designed to make the incentive application process easy to follow as well as to effectively verify savings associated with incentive payments. The CRIP team also provides technical assistance to support customers submitting applications.

In January, February and March of 2009, the CRIP staff focused on developing and announcing the 2009 program. Activities during this period have included the following:

• Design of modifications to the Commercial Incentives Program processes

• Update the Policies and Procedures Manual and application forms

• Updated the website with 2009 details

• Issued press releases to announce the 2009 CRIP

• Direct mailing to contractors, vendors and manufacturers

• Conducted contractor training meeting (with over 125 in attendance)

Planned activities include the following:

• Meeting with the Major Account Executives (MAEs) to develop major account customer plans

• Events and customer meetings

• Technical support throughout the customer project process

• Continued marketing

2009 Results to Date The demand for the CRIP was significant during the first three quarters of the 2009 program year. As indicated in Table 3, at the end of the third quarter of 2009, the CRIP had paid projects with over 300,000 measures installed (with additional projects underway). Some of the projects reported in 2009 were completed by the customer at the end of 2008 however there was not adequate time to process the applications and complete the necessary inspections or post metering that was required. The savings and costs associated with any such projects will be reported as part of the 2009 activity. Despite the economic downturn, participants continue to submit applications for planned projects. It is unclear what percentage of the planned projects will actually be completed and what percentage might be delayed until the economy improves. If required by heavy demand, future 2009 energy efficiency project applications will be waitlisted until additional funding is available through customers withdrawing their applications or additional funding is allocated to the program.

Exhibit A

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Table 3: Program Year 2009 Accomplishments to Date

Total Commercial Retrofit Incentive Program 2009 Accomplishments to Date


Energy Savings (kWh) 60,643

Prescriptive Incentives



Custom Incentives



Direct Install



Upstream



Exhibit A

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Section C: Proposed 20102012 Program For a large part, the 20102012 CRIP will be a continuation of the 2009 offering. Thus, the CRIP will continue to offer prescriptive incentives for common lighting, cooling, motors, commercial kitchens and refrigeration, as well as miscellaneous energy conservation measures. In addition, custom incentives will be available for most nonprescriptive measures that have verifiable energy savings. The upstream incentive component will continue to address HVAC and motors.

The direct install program will continue to target energy efficiency upgrades for small businesses. However, due to the high percentage of lighting savings, it is anticipated that code changes impacting CFLs and T12s will reduce the savings from this component.

Cool roofs are eligible for an incentive under the current program. It appears that there may be additional marketing strategies to increase the penetration of this measure. The proposed 20102012 program has targeted this technology for additional marketing and promotion.

The Hotel/Motel Program component was successful in 2008 and has been successful during the first three quarters of 2009. It appears the majority of the target market has been served. Remaining customers will be eligible for an incentive under the basic program and a direct install component may be considered if responses to a general RFP result in a costeffective program component with sufficient market potential.

The current program provides prescriptive incentives for commercial kitchen equipment. The proposed 20102012 program includes a marketing approach to promote a demand ventilation measure to the commercial kitchen suite. The marketing effort will address the first cost barrier for this capital investment.

The following niche markets are proposed to be added to the CRIP as a result of the responses to the Company’s RFI in late 2008. A final determination of which if any, of these new components will be implemented will be based on an evaluation of market interest and contractor responses to a general RFP to be issued by the Nevada Power.

The Grocery Store component takes a whole building systems approach for facilities with commercial retail refrigeration, including large, midsize, “momandpop” grocery stores and convenience stores. The offering is designed to capture immediate savings and through continuous partnering with customers will yield multiple layers of energy savings over time. By providing incentives to customers for improving efficiency that include systems recommissioning, initial savings are achieved. By addressing complex and comprehensive measures on a programmatic basis, this will insure that customers understand first cost and how to act upon all available savings opportunities.

The Data Center component works with managers of enterprise facilities, corporate data centers, along with facilities with individual server rooms to select from a large number of potential measures such as, high efficiency servers, virtualization software, and upgrades to HVAC systems. The offering will focus on educating customers on data center best practices and encouraging them to utilize program resources to save electric energy. The process is similar to the grocery component and includes an audit phase, an implementation phase, and concludes with a verification/inspection. This proposed component addresses a market segment that has significant potential for energy savings and has been under served.

The Industrial Process component includes working with industrial customers and focuses on compressed air, and water/waste water plant processes. The offering will work with large facilities and conduct audits to identify potential savings opportunities that range from compressed air leaks to control strategies and

Exhibit A

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equipment upgrades that may take more than a year to complete. This proposed component addresses a market segment that has significant potential for energy savings and has been underserved.

The Enhanced Automation (EA) offering will pay incentives based on firstyear energy (kWh) savings that result from hardware and programming/software upgrades along with any demand response (DR) capability that is programmed into the EMS to reduce demand (kW) when requested during the onpeak period. The DR kW reduction would be required to be above the daily kWh savings from any hardware and/or software upgrades.

The EA program concept would provide control system programming consultation in addition to the incentives for energy saved and kW reduced through DR capability. Initial estimates of DR kW can be modeled, but ultimately must be demonstrated by the customer and measured by the utility. The outreach to building owners will include informing them of the benefits of enhanced automation including energy cost savings, increased occupant comfort, incentives provided for firstyear kWh saved, and DR capability programmed into the EMS. The EA concept would target customers such as casinos, hospitals, office buildings, and large commercial facilities.

The A/C Tune up component proposed for commercial customers targets the air conditioners with the highest energy consumption per building square foot. The advanced technical implementation will ensure proper refrigerant charge and improved airflow in existing air conditioners.

The retro commissioning component proposed would provide a comprehensive platform to assist eligible commercial and industrial customers to improve performance and reduce energy consumption through the systematic evaluation of existing building and industrial systems. Lowcost and nocost measures are targeted and implemented to improve system operation, reduce energy and demand in many cases improve occupant comfort.

The market transformation component is proposed to provide for the introduction of new technology advances that are expected to provide new costeffective options prior to the filing of the next IRP in 2012. For example, there is a potential that the program could promote a new generation of energy efficient electronic gaming machines or a new process that could be put in place to encourage the energy efficient rewind of large motors. This will also provide for promoting those technologies with successful results proven in the Company’s Market and Technology Trials Program.

The program also proposes to add additional marketing and outreach efforts through mechanisms targeting the small to medium commercial customer market segments, national accounts or other customers with multiple locations through data mining, and reaching out to commercial real estate focusing on retail and office spaces. These approaches will target previously underserved market segments.

The implementation process for the CRIP consists of three major components: outreach, technical services, and incentive processing. Outreach activities are designed to inform customers and tradeallies that sell energy efficiency (EE) measures on the program benefits and features. The objective of outreach is to identify and target potential program participants. Technical services are provided to assist the customers and trade allies with various aspects of the implementation process. These services include facility assessments, energy savings calculations, and EE measure procurement support. The objective of incentive processing is to confirm that qualifying EE measures were installed. This process consists of documentation review and onsite inspections. Once it has been determined that qualifying EE measures have been installed, an incentive check is provided to the customer.

The program management plan for the CRIP will be similar to previous program years. The CRIP team will conduct routine staff meetings with the NVE Project Manager to continuously track program goals,

Exhibit A

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monitor short and longterm objectives and assign deliverables to team members. Reports will be submitted by the Contractor to provide data on activities as well as program performance relative to goals.

An overview of the proposed budgets and targets at the base, low and high scenarios for this program are presented in Table 4 and Table 5. Project details by scenario are shown in Tables 6a, 6b, and 6c.


Scenario Budget

TRC 2010 2011 2012

Base $9,000,000 $9,150,000 $9,150,000 2.66

Low $7,050,000 $7,500,000 $7,500,000 2.64

High $14,000,000 $14,050,000 $14,050,000 2.43



2010 2011 2012 2010 2011 2012

Base 62,000,000 58,000,000 48,000,000 14,613 13,671 11,314

Low 49,500,000 46,500,000 38,500,000 11,956 11,232 9,299

High 77,500,000 72,500,000 60,000,000 18,568 17,370 14,375

Exhibit A

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Total Project – Base Scenario 2010 2011 2012 Budget, Total Project $9,000,000 $9,150,000 $9,150,000 Demand Savings (kW) 14,613 13,671 11,314 Energy Savings (kWh) 62,000,000 58,000,000 48,000,000

Measure 1 – Lighting Energy Savings (kWh) 43,553,760 39,126,960 26,355,208 Measure 2 – HVAC and other Energy Savings (kWh) 8,000,000 8,000,000 8,000,000 Measure 3 – Refrigeration/Vending Energy Savings (kWh) 2,640,000 2,640,000 2,640,000 Measure 4 – Direct Install Lighting Energy Savings (kWh) 4,200,000 2,240,000 1,800,000 Measure 5 – Direct Install HVAC and Misc Energy Savings (kWh) 420,000 420,000 420,000 Measure 6 – Upstream HVAC Energy Savings (kWh) 600,000 600,000 600,000 Measure 7 – Upstream Motors Energy Savings (kWh) 200,000 200,000 200,000 Measure 8 – Niche Markets Energy Savings (kWh) 2,386,749 4,773,497 7,985,749

Exhibit A

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Total Project – Low Scenario 2010 2011 2012 Budget, Total Project $7,050,000 $7,500,000 $7,500,000 Demand Savings (kW) 11,956 11,232 17,370

Energy Savings (MWh) 49,500,000 46,500,000 38,500,000

Measure 1 – Lighting Energy Savings (MWh) 34,057,920 30,014,400 20,361,120 Measure 2 – HVAC and other Energy Savings (MWh) 6,800,000 6,800,000 6,800,000 Measure 3 – Refrigeration/Vending Energy Savings (MWh) 2,240,000 2,240,000 2,240,000 Measure 4 – Direct Install Lighting Energy Savings (MWh) 3,000,000 1,600,000 1,000,000 Measure 5 – Direct Install HVAC and Misc Energy Savings (MWh) 300,000 300,000 300,000 Measure 6 – Upstream HVAC Energy Savings (MWh) 500,000 500,000 500,000 Measure 7 – Upstream Motors Energy Savings (MWh) 140,000 140,000 140,000 Measure 8 – Niche Markets Energy Savings (MWh) 2,463,766 4,9500,958 7,159,735

Exhibit A

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Total Project – High Scenario 2010 2011 2012 Budget, Total Project $14,000,000 $14,050,000 $14,050,000 Demand Savings (kW) 18,568 17,370 14,375 Energy Savings (MWh) 77,500,000 72,500,000 60,000,000

Measure 1 – Lighting Energy Savings (MWh) 47,948.800 41,712,000 29,040,000 Measure 2 – HVAC and other Energy Savings (MWh) 8,000,000 8,000,000 8,000,000 Measure 3 – Refrigeration/Vending Energy Savings (MWh) 3,200,000 3,200,000 3,200,000 Measure 4 – Direct Install Lighting Energy Savings (MWh) 7,200,000 6,240,000 3,840,000 Measure 5 – Direct Install HVAC and Misc Energy Savings (MWh) 600,000 600,000 600,000 Measure 6 – Upstream HVAC Energy Savings (MWh) 600,000 600,000 600,000 Measure 7 – Upstream Motors Energy Savings (MWh) 200,000 200,000 200,000 Measure 8 – Niche Markets Energy Savings (MWh) 9,753,627 11,962,123 14,520,154

Rationale and Supporting Data For the most part, the 20102012 CRIP will continue all successful components of the 2009 offering. The CRIP will continue to offer prescriptive incentives for common lighting, cooling, motors, refrigeration, commercial kitchen equipment and vending control measures. In addition, custom incentives will be available for most nonprescriptive measures that have verifiable energy savings. The upstream incentive component will continue to address HVAC and motors and the Direct Install Program will continue to target energy efficiency upgrades for small business. The rationale and overview of supporting data for the new and expanded components of this program are provided below.

The focus on the demand ventilation hood measure is proposed to address the food service industry. The food industry has one of the highest energy intensities per square foot of space with much of the electricity used during summer peak hours. Food service ventilation uses significant electricity to push air out of the building and then more to condition the makeup air that is brought back into the building. This effort will reduce the high first cost for the ventilation equipment by packaging it with other measures resulting in a lower return on investment for the bundle of measures for the food service facility.

The new grocery component is being proposed to address the potential for savings and barriers to customer participation that have not been overcome in the current program offerings. Grocery and

Exhibit A

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supermarkets account for 8-9% of all commercial energy use in the United States. According to the US Census Bureau, and the 2008 Progressive Grocer, Nevada has the second largest number of retail grocery stores in the Southwest region. Refrigeration needs drive energy demand, accounting for more than half the electric use in grocery operations. Energy efficient refrigeration upgrades can yield significant energy savings. However, capturing these savings has historically been hard to achieve with barriers tied to the complexity of commercial refrigeration and the limited number of trained refrigeration contractors. This component is designed to overcome these challenges.

The Data Center component is being proposed to address the large potential energy savings, the high energy intensity per square foot and the barriers that have not been overcome by the current program offering. Data center energy use doubled between 2000 and 2005 and is projected to grow by 12% per year in the United States. Industry experts predict that electrical costs for enterprise data centers equals 1.2% of all energy consumed in the United States. Las Vegas has seen a large increase in data centers in the past few years due to the stable nature of the geographical area and the availability of data line resources. This target market has been underserved due to many barriers such as rapidly changing technology, concerns about reliability, and lack of information about energy costs and potential savings opportunities especially for small facilities with server rooms. This component is designed to overcome these challenges.

The Industrial Process component is being proposed to address the high potential savings in this market segment and the barriers that have not been overcome with the current program offerings. Compressed air is often called the forgotten utility in industrial operations and many facility employees assume that air is “free”. In fact 76% of the cost of a compressed air system is the cost of electricity. Our current program offerings do not pay an incentive for what might be considered O&M costs, and therefore air leaks can be left unattended for long periods of time. Studies to reconfigure compressed air systems can be very expensive and often are a barrier to redesigning systems to be more energy efficient.

Water/waste water plants may have large energy potential but their first priority is insuring compliance with all discharge and quality permit requirements. Therefore, similar to the data center, reliability is the most important factor in these facilities and can pose a barrier to implementing energy efficiency improvements. This component is designed to work with industrial customers to overcome these challenges.

The new enhanced automation (EA) component is being proposed because, while the existing program provides incentives to building owners who install hardware to their existing energy management systems (EMS) there are generally no incentives currently provided to projects that involve programming or software changes that could be considered O&M projects. This new EA concept would provide incentives and programming assistance to building owners considering upgrading both hardware and programming/software. Customers who are considering installing a new EMS could also benefit from the EA concept. Effective EMS automation techniques provide important information on energy demand, equipment usage, energy costs, and DR capability. This new concept could enable businesses to manage their energy costs more effectively and participate in DR and peak-load reduction programs.

The A/C Tune up component is proposed for commercial customers based on the experience gained through the residential a/c tune up program at Nevada Power. Based on the recently completed market potential study there are indications that a significant number of commercial building owners and occupants do not service their a/c units on a regular basis but rather wait until there is a maintenance issue to correct. The final decision to offer this component will be made after the evaluation of the effects and impacts of the residential program is completed.

Exhibit A

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The retro commissioning/continuous commissioning component is being proposed because over time even the best designed buildings and systems lose efficiency. Retrocommissioning is the process of optimizing a building’s performance by restoring systems to their design condition by performing low cost and/or nocost measures to maximize efficiency. Historically retrocommissioning can deliver up to 20% in energy savings. While building owners are compelled to undertake routine maintenance and to replace failed equipment, they often do not have the inhouse engineering expertise to identify opportunities to optimize their existing systems. Under the current program, there generally are no incentives provided for retrocommissioning projects unless the project requires a capital investment by the customer. This new component would overcome the barriers to retrocommissioning by providing technical assistance, development of a network of retro commissioning service providers, and incentives for lowcost and/or nocost retro commissioning measures which may also lead to larger capital projects in future years.

The market transformation component is proposed to provide for the introduction of new technology advances that are expected to provide new costeffective options prior to the filing of the next IRP in 2012. For example, there is a potential that the program could promote a new generation of energy efficient electronic gaming machines that could result in up to 30% energy savings plus provide a reduced HVAC load, or a new process could be put in place to encourage the energy efficient rewind of large motors. The DOE has reported that, in general, one to two percentage points should be deducted from the efficiency of an electric motor that has been rewound. However, it has been shown that if done with best practices a motor rewind can result in no efficiency loss.

The additional marketing and outreach efforts are proposed to engage small and midsize businesses and other hardtoreach customer segments to participate in one of the many offerings under the CRIP. The efforts will assist customers in entering the program through the component that will provide the best scenario for their project by reducing the hassle factor of trying to find the correct program process. The data mining effort will help identify the customers with the most potential based on energy intensity compared to other similar facilities. The commercial property component will provide property specific recommendations in a format that will be well received by the financial decision makers for the properties. All these efforts are intended to remove barriers and increase customer participation for specific customer segments with high savings potential.

A final determination of which, if any, of the new components will be implemented will be based on an evaluation of market interest and contractor responses to a general RFP to be issued by Nevada Power.

Supporting Savings Data The CRIP kW and kWh savings numbers for the base, low and high scenarios have been determined using standard engineering calculation methodologies. The program savings units are per kWh. To determine measure and program costeffectiveness, CRIP has defined the incremental measure cost (IMC) across measure categories at a dollar per kWh ($/kWh), which is the unit defined by CRIP. These values were determined by a weighted average across the measures forecasted for the following year, the IMC per prescriptive unit and converted to $/kWh. The following illustrates the calculation: IMC ($/kWh) = IMC ($/unit) ÷ (kWh/unit).

The savings calculation methods range from using deemed, calculated, modeled, and monitored values to determine the kWh savings per project.

Most of the prescriptive, upstream and direct install incentives use deemed energy and demand savings values. Deemed savings are appropriate for these measures since they have been studied, they are

Exhibit A

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understood in the market, and their energy savings are widely accepted. The prescriptive measures are rebated typically per unit.

The primary source of the savings estimates or methodologies for the prescriptive measures is the Database of Energy Efficiency Resources (DEER), jointly developed by the California Public Utilities Commission and the California Energy Commission. Other sources include the KEMA calculations and Pacific Gas & Electric work papers for the Express Efficiency Program.

A calculated savings approach is used for all custom measures, including enhanced automation. The CRIP team works with the customer and/or contractor to verify or analyze the energy and demand savings for custom measures. Every measure requires a unique set of information to determine the energy savings estimate. The contractor (currently KEMA) relies on its expertise and experience to calculate estimates in a conservative manner that both benefit the customer and the utility. In some cases, modeling and/or metering may be involved.

The grocery component proposes to utilize robust software that allows trained field staff to deliver initial sitespecific recommendations, and customized savings for business refrigeration retrofits and recommissioning. This methodology is similar to the prescriptive and custom savings approach used in the existing program. However, it also provides the customer with cost information and simple payback information.

The Data Center component approach will also involve a custom audit with a deliverable of a scoping level report that will provide the details of energy use in the facility, the potential energy efficiency measures, measure costs, feasibility of implementation, savings estimates and payback. This methodology is also similar to the prescriptive and custom savings approach used in the existing program.

The industrial process approach will provide education on best practices to help identify the potential energy efficiency measures. For the larger facilities the process will involve facility audits, training, assistance with the measure installation process, and will provide guidance for future decision making. This methodology is similar to the custom savings approach used in the existing program.

The savings for the A/C Tune Up Component will be determined using software that calculates the savings based on the corrections needed to adjust the unit for a proper refrigerant charge and improved airflow which is similar to the Residential A/C Tune Up Program savings calculation.

The retro commissioning approach includes conducting a detailed site assessment, diagnostic testing, and trending analysis to evaluate current facility operating procedures and equipment functionality. A verification report is completed by the retro commissioning service provider to summarize the final findings and impacts from the project. Supplemental customer training is also provided to help ensure savings persistence. This methodology is very similar to the custom savings approach used in the existing program.


Exhibit A

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Implementation Contractor $2,282,675.00 $2,571,754 $2,520,524

Incentives $5,123,595 $4,984,539 $5,028,670

Measurement and Verification $389,576.67 $ 397,902.33 $ 400,268


Utility Labor and Overheads $ 779,153.33 $ 795,804.67 $ 800,536.67






Incentives $3,897,797 $4,000,277 $3,755,005

Measurement and Verification $306,241 $320,306.00 $313,901


Utility Labor and Overheads $612,481 $640,612.00 $627,803


Exhibit A

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Table 7c: High Scenario Program Budget by Category, ProgramYears 20102012



Implementation Contractor $3,981,560.00 $3,523,853.00 $3,791,004.00

Incentives $7,468,980 $7,984,200 $7,723,000

Measurement and Verification $608,153.33 $ 613,982.67 $611,665.67


Utility Labor and Overheads $1,216,306.67 $1,227,965.33 $1,223,331.33


20102012 Program Execution The CRIP will continue to provide cost effective energy savings in 20102012 using an approach honed since 2003. There are six approaches to assist customers with their project:

• Prescriptive


• Direct install

• Upstream

• Multilayered customer support system

• Enhanced automation

The prescriptive approach is a simplified method to optimize choices on predefined energy efficiency measures. It is ideal for smaller projects or larger projects with only basic opportunities for energy savings. Typical prescriptive measures include energyefficient lighting and occupancy sensors, energy efficient HVAC equipment, variable frequency drives and motors.

The custom approach is designed for larger, more energy intensive projects or for individual measures not included in the prescriptive component. Custom project applications require supporting equipment performance information and calculation documenting the on and offpeak energy savings that are expected to result from the project.

The direct install component is designed to provide comprehensive energy efficiency upgrades to small commercial businesses. This component addresses the unique barriers to participation of this target group with higher incentives and shorter payback periods.

The upstream component was designed to provide incentives for certain measures to distributors rather than the equipment purchaser. The incentive is provided to encourage distributors to stock and sell

Exhibit A

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23

qualifying premiumefficiency motors and air cooled package air conditioning equipment to business customers in Nevada Power’s service territory.

The grocery component is designed as an informtoinvest model. The process involves an onsite comprehensive audit with instant savings through the direct installation of walkin cooler occupancy sensors, an energy savings report, and phased retrofits using a trained contractor network. The multi layered customer support system approach provides grocery store owners with the confidence and technical assistance to take action on energy savings opportunities.

The Data Center component is also designed as a multilayered customer support system including an analysis of current energy use in the facility, identification of the energy savings opportunities, delivery of a scoping scenario report for the facility, implementation support, and a final inspection to confirm installation and assumptions used in savings estimates. The approach taken provides data center decision makers with the confidence and technical assistance to take action and to overcome their concern about potentially jeopardizing reliability which has been a barrier to program participation.

The Industrial Process component is also designed as a process that focuses on training and education utilizing best practices. Energy savings opportunities will be identified though an onsite audit. This approach will provide industrial facility managers with the information to allow facility decision makers to prioritize capital investments and will also provide guidance for future decision making. The complexity and technical nature of the processes in industrial facilities has previously been a barrier to program participation.

The Kitchen Ventilation component is designed to include an additional marketing effort that will reduce the high first cost for the ventilation equipment by packaging it with other measures resulting in a lower return on investment for the food service facility. The process will involve an investment grade audit, propose technology solutions, and will put customers in contact with a vendor network that can provide installation and in some cases financing terms.

The Enhanced Automation concept is designed to provide control system programming consultation and incentives for energy saved and kW reduced through DR capability from software programming changes to control systems. This offering will prevent lost opportunities by allowing customers the opportunity to simultaneously upgrade equipment and prepare for the future of commercial demand response benefits.

The A/C tune up component is designed to adjust commercial A/C units for proper refrigerant charge and improved airflow. The offering will also provide technical training to contractors with the result being a local network of contractors that are recognized as energy efficiency experts. The process will involve sales and marketing to customers, contractor training, and contractor services.

The retro commissioning approach includes conducting a detailed site assessment, diagnostic testing, and trending analysis to evaluate current facility operating procedures and equipment functionality. The retro commissioning service provider works with the customer’s implementation team to fully investigate, implement, and verify the recommended measures. The team typically includes the facility engineers and the mechanical, electrical, and controls contractors. The component is also designed to provide training and documentation to assist the facility with ongoing continuous commissioning.

In the 20102012 action plan period, the program will reach out to previously participating contractors, vendors, equipment distributors, and other supplyside actors. CRIP continues to expand on previous success stories distributed throughout Nevada Power’s commercial customer networks. One of the CRIP team’s objective is to continue to foster new relationships with potential contractors and to increase the visibility of project successes within the utilities’ electricity customer service territories.

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The CRIP application and administrative procedures are designed to make the incentive application process easy to follow as well as to effectively verify savings associated with incentive payments. The CRIP team also provides technical assistance to support customers.

20102012 Program Management Plan Nevada Power’s current Commercial Retrofit Program processes have resulted in the delivery of a successful program from the inception of the program in 2003. The current management structure utilizing an implementation contractor, including a core project team comprised of a Project Director, an Operations Manager, a Project Coordinator, a data analyst, and a team of energy engineers has proven successful. The grocery component will require the addition of technicallyskilled territorybased field energy analysts and the outreach component will require additional marketing and analytical resources.

It is anticipated that the majority of the contractor(s) implementation team will reside in Nevada which facilitates access to customers and the trade networks. However, utilizing a contractor with experts outside the area has also proven to be a benefit by providing assistance with highly specialized projects. For example, the data center, industrial, kitchen ventilation, and retro commissioning components require subject matter efficiency experts and it may not be costeffective to locate full time resources in the local area if resources are not already located in the Las Vegas area.

20102012 Data Delivery and Tracking Data and results related to the CRIP will be gathered from customers via program applications as well as participating contractors and manufacturers. Updated program results will be provided to the Nevada Power Senior Project Manager and uploaded to Data Store monthly via electronic reporting protocols as well as traditional written reports.

M&V Plan

M&V Objective The EM&V Contractor will perform evaluation, measurement and verification (EM&V) activities to confirm the savings being realized through the Commercial Retrofit Program that will be implemented in Southern Nevada.

Approach Estimation of total program savings is based on a ratio estimation procedure, which allows precision / confidence requirements to be met with a smaller sample size. The EM&V Contractor will select a sample with a sufficient number of projects to estimate the total achieved savings with 10% precision at 90% confidence. To apply the ratio estimation procedure, the EM&V Contractor will need to produce two estimates of gross savings for each project sampled. First, an expected gross savings estimate and the verified gross savings estimates developed through the EM&V procedures. Programlevel gross savings then are developed by applying savings realization rates calculated for sample projects to the program level expected savings.

Sample Selection The greater the degree of variability in the savings values, and the lower the correlation between the expected and actual savings, the greater the sample size will be required. To address this situation, the

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EM&V Contractor can use a sample design for selecting projects for the M&V sample that takes such skewness into account. With this approach, the EM&V Contractor can select a number of sites with large savings for the sample with certainty and take a random sample of the remaining sites. To further improve the precision, noncertainty sites will be selected for the sample through systematic random sampling. That is, a random sample of sites remaining after the certainty sites have been selected is selected by ordering them according to the magnitude of their savings and using systematic random sampling. Sampling systematically from a list that is ordered according to the magnitude of savings ensures that any sample selected will have some units with high savings, some with moderate savings, and some with low savings. Samples cannot result that have concentrations of sites with atypically high savings or atypically low savings.

Sampling for collecting program M&V data also needs to account for the M&V effort occurring in real time while the program is being implemented. Projects will accumulate over time as the program is implemented. The sampling plan is therefore designed to have a predetermined sample size requirement for achieving certain analytical goals but with adjustments made over time as data for additional sites become available.

Sample selection is thus spread over the entire implementation period. The EM&V Contractor will use a near realtime process whereby they select a portion of the sample each quarter as projects accumulate in the program. Projects initiated during a quarter will be sampled as they become available and the selected samples are monitored. The progress of the sample selection is monitored by looking at the additions to the sampling frame that have arrived and at the cumulative sampling frame totals and the cumulative sample totals in comparison to the corresponding values that were expected per the initial sampling analysis. If appropriate, the sampling rates are adjusted to take into account major changes in the sampling frame.

Onsite Surveys and Verifications

The EM&V Contractor will perform onsite visits to collect primary data for a sample of custom measure projects. This effort includes collecting facility characteristics data and conducting monitoring of installed measures as appropriate.


OnSite Data Collection Procedures The EM&V Contractor’s field staff engineers will conduct the onsite data collection. The EM&V Contractor will use a computerized system for tracking and managing the scheduling and field work. Once the arrangement for a site visit has been made, a member of the field staff will visit the site to collect the data. The EM&V Contractor will review the participant’s project file to verify the information on energy efficiency measures that were proposed and implemented.

The EM&V Contractor will accomplish three primary objectives while at the site:

• Verify the implementation status of all proposed measures

• Verify that the energy efficiency measures for which incentives were paid were indeed installed, that they were installed correctly, and that they still function properly

• Collect the data needed to analyze the energy savings that have been realized from the installed measures

Exhibit A

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During the onsite visit, the EM&V Contractor will also collect data on a variety of other information about factors that affect energy use by enduses. Data on these factors are needed in order to analyze and to verify the energy savings of rebate measures.

• For lighting, important factors include the number and type of fixtures, lamps, and ballasts and the usage patterns for lighting in different parts of a site. Outside lighting is surveyed.

• For space cooling, energy use will vary according to the type of cooling equipment and distribution systems and further depends on a building's type, size, age and structural characteristics as well as weather conditions.

• For building shell insulation, nondestructive techniques are used to determine the type and level of insulation that has been installed.

Data also are needed that pertain to the present pattern of energy use at a site. Where appropriate, the EM&V Contractor will establish this pattern. Photographs of a site and of its electrical and mechanical systems are also taken during the onsite visit.

Throughout the onsite data collection and monitoring effort, the EM&V Contractor will apply quality control procedures to ensure that the data collected are of high quality. As the data collection progresses, each completed data collection form is thoroughly reviewed by a field staff supervisor.

Monitoring Procedures The EM&V Contractor will also conduct monitoring of specific enduses at participating sites as applicable. The enduse equipment that the EM&V Contractor will monitor depends on the characteristics of each particular site. Before a site is approved for monitoring, consideration must of course be given to whether the monitoring is feasible and whether facility personnel will be cooperative for the monitoring effort. Cooperation from facility personnel is obtained.

M&V Data Store The Nevada DSM M&V Data Store Web Portal, referred to as “Data Store”, is a web portal that has been customized for both Nevada Power Company’s and Sierra Pacific Power Company’s internal use. Its function is to track Demand Side Management (DSM) program performance. The Data Store supports the evaluation, measurement, and verification activities by providing the data needed for sample selection and verification of savings data. The Data Store is “populated” with data provided by the implementation contractor(s) on a monthly basis.


Cost Benefit Analysis The Commercial Retrofit Incentives Program (CRIP) at Nevada Power facilitates the implementation of energy efficient measures in commercial, industrial and institutional facilities through incentives and comprehensive technical services. The CRIP pays incentives for energy efficient upgrades that result in verifiable energy savings. The CRIP also offers a direct install for small commercial customers and an upstream incentive component for HVAC and motors. In 20102012, Nevada Power proposes to expand

Exhibit A

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the CRIP in response to increasing demand and to target opportunities in previously hardtoreach markets. The program expansion will allow more customers to participate, provide greater opportunity for participation from those customers with a longer planning horizon, and to reach market segments that have historically had a low rate of participation in the program. While the CRIP team markets and processes the customer’s project incentives, it also provides a variety of key support functions such as technical assistance, customer assistance, outreach activities and industry support. The significant parameters to be modeled for this program include the total expected qualifying installations, the total expected incentives, the incremental costs, and the total budget.

Freeridership The objective of NVE’s Commercial Retrofit Incentive Program has been to work with existing customers, contractors and industry associations to promote and participate in the CRIP thereby influencing design and purchase decisions to transform market behavior. The 20102012 plan proposes the addition of new components that would target hardtoreach and previously underserved market segments. While the CRIP provides incentives it also provides a variety of key support functions such as technical assistance, customer assistance, outreach activities and industry support.

The most recently completed analysis of Net to Gross Ratios (“NTGR”) was conducted by PA consulting in early 2009. The NTGR used in the economic analysis of this program varies by measure. The overall freeridership rate for this program as determined by PA is 1820%.

Input Data, Description of Sources, and Results of Financial Analysis A copy of the input data sheets and financial models are provided in Technical Appendix Item DSM2. These figures were all calculated based upon the information contained in this program data sheet and the materials referenced herein. The following tables summarize the results of the financial analysis for all three scenarios.



Total Resource 2.66 $112,791,647 $42,384,345 $70,407,303 $0.02

Utility 4.67 $117,654,886 $25,188,005 $92,466,881 $0.01

Participant 9.28 $135,233,291 $14,577,673 $120,655,618 $0.01

Ratepayer 0.68 $112,791,647 $165,284,535 ($52,492,887) $0.09

Societal cost 3.04 $128,938,227 $42,384,345 $86,553,882 $0.02

Exhibit A

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Total Resource 2.64 $91,753,991 $34,729,116 $57,024,874 $0.02

Utility 4.71 $95,677,116 $20,318,858 $75,358,258 $0.01

Participant 8.84 $108,655,014 $12,297,806 $96,357,208 $0.01

Ratepayer 0.69 $91,753,991 $132,896,998 ($41,143,007) $0.09

Societal cost 3.02 $104,727,178 $34,729,116 $69,998,062 $0.02



Total Resource 2.43 $142,184,751 $58,404,922 $83,779,829 $0.02

Utility 3.85 $149,687,128 $38,856,834 $110,830,294 $0.02

Participant 10.96 $170,024,876 $15,508,347 $154,516,530 $0.01

Ratepayer 0.66 $142,184,751 $216,384,088 ($74,199,337) $0.09

Societal cost 2.78 $162,485,375 $58,404,922 $104,080,453 $0.02


Utility Results First Year Total Project

Total Costs $9,000,000 $27,299,967

Energy Savings (kWh) 53,839,808 1,854,277,334

Energy Benefits ($) $2,174,438 $126,287,272



Exhibit A

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Total Costs $7,050,000 $22,049,984


Energy Benefits ($) $1,738,824 $101,926,280





Total Costs $14,000,000 $42,099,782


Energy Benefits ($) $2,715,166 $159,656,299












Exhibit A

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These values are significantly less than the projected cost for energy for the company. Given these and the other factors listed above, the Commercial Retrofit Incentive Program is an economically viable program that achieves significant energy savings.

Section E: Supporting Documentation M&V Report for 2007 is provided in Technical Appendix Item DSM23.

M&V Report for 2008 is provided in Technical Appendix Item DSM23.

Exhibit A

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Nevada Power Company Residential High Efficiency Air Conditioning

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Residential High Efficiency Air Conditioning

January 2010

Exhibit A

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Section B: 2009 Program.......................................................................................................................9 2009 Program Execution ...................................................................................................................9 2009 Results to Date .......................................................................................................................10

Section C: Proposed 20102012 Program ........................................................................................... 11 Rationale and Supporting Data ........................................................................................................15 Marketing Channel Detail: Residential A/C Replacement/Maintenance Contractors ........................ 16 New for 20102012 .........................................................................................................................17 Supporting Savings Data .................................................................................................................20 20102012 Program Execution ........................................................................................................25 20102012 Program Management Plan ............................................................................................26 M&V Plan ......................................................................................................................................27



List of Tables Table 1: Program Year 2008 Residential High Efficiency A/C Results...................................................................................... 5 Table 2: Targets and Budgets, Program Year 2009................................................................................................................... 9 Table 3: Budget and Targets...................................................................................................................................................10 Table 4: Proposed Budgets Summary for the Base, Low and High Program Scenarios..............................................................11 Table 5: Proposed Targets Summary for the Base, Low and High Program Scenarios...............................................................11 Table 6a: Base Scenario Proposed Targets and Budgets, Program Years 20102012.................................................................12 Table 6b: Low Scenario Proposed Targets and Budgets, Program Years 20102012 .................................................................13 Table 6c: High Scenario Proposed Targets and Budgets, Program Years 20102012.................................................................14 Table 7: Enhanced Time Delay Savings and Assumed Installation Mix....................................................................................21 Table 8: Motor Replacement Compressor Cycle Savings.........................................................................................................22 Table 9a: Base Scenario Program Budget by Category, Program Years 20102012 ................................................................24 Table 9b: Low Scenario Program Budget by Category, Program Years 20102012.................................................................24 Table 9c: High Scenario Program Budget by Category, Program Years 20102012 ................................................................25 Table 10a: Base Scenario Cost Test Results 20102012...........................................................................................................31 Table 10b: Low Scenario Cost Test Results 20102012 ...........................................................................................................31 Table 10c: High Scenario Cost Test Results 20102012...........................................................................................................31 Table 11a: Base Scenario Utility Economic Evaluation ...........................................................................................................32 Table 11b: Low Scenario Utility Economic Evaluation............................................................................................................32 Table 11c: High Scenario Utility Economic Evaluation ...........................................................................................................32

Exhibit A

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List of Figures Figure 1: SEER Test ..............................................................................................................................................................18 Figure 2: Fan Motor Performance Comparisons .......................................................................................................................19 Figure 3: Time Delay Increase to EER.....................................................................................................................................21

Exhibit A

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• Program Name: Residential High Efficiency Air Conditioning

• Program Status: Redesign

• Program Manager: Leo Wong


• 2009 Budget: $11,514,120

• Proposed Budget: 2010: 2011: 2012:

Low $ 5,720,000 $ 5,720,000 $ 5,720,000

Base $7,150,000 $7,150,000 $7,150,000

High $ 8,935,000 $ 8,935,000 $ 8,935,000


Base 1.51

High 1.50

Program Summary The 20102012 Residential High Efficiency Air Conditioning Program continues the evolution of Nevada Power’s Residential A/C High Efficiency Program. This program provides incentives to homeowners, residential homebuilders, and HVAC contractors in the Nevada Power service territory to install and maintain high efficiency air conditioning equipment. The program continues to support the residential new construction and retrofit channels, scales back the tuneup measure and adds several new measures all designed to increase the operating efficiency of existing air conditioning units.

Nevada Power’s participation in the residential air conditioning market is important, considering that air conditioning is a major contributing factor to the utility’s summer energy peaks. The incentives are designed to motivate home builders and home owners to purchase and appropriately install air conditioning equipment that is more efficient than the SEER minimum specified by federal standards and to increase the operating efficiency of existing air conditioning equipment. The elements of this program will result in improved efficiencies of approximately 71,772 air conditioning systems during the next three years. The program has three year target savings of 55,185 MWh of energy and 29.2 MW of demand.

Nevada Power will continue to market high efficiency equipment placement and quality installation through two primary channels: residential homebuilders and new and replacement A/C contractors. Additional program marketing for the retrofit channel may be expanded to include the residential end user. Quality air conditioning tuneups, time delay relays, variable speed fan motors and duct test and sealing will be marketed through the residential HVAC contractor channel, and as appropriate, the residential enduser.

The 20102012 Residential High Efficiency Air Conditioning Program will be implemented by an experienced thirdparty contractor, heavily weighted on a performancebased compensation. This structure aligns costs with performance. The implementation contractor will be required to provide a technology methodology which enables onsite measurement of energy savings variables for faster

Exhibit A

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quantification and verification of actual energy savings associated with refrigerant charge and airflow optimization and duct sealing measures.

Section A: 2008 Program Results Table 1 presents the program results for program year 2008. Actual expenditures for 2008 were 148% of budget. The program achieved 165% of targeted energy savings and 131% of targeted demand savings.

Table 1: Program Year 2008 Residential High Efficiency A/C Results


Budget $9,626,325 $14,128,043 148%

Measures 45,050 73,391 163%

Demand Savings (kW) 15,229 20,016 131%

Energy Savings (kWh) 22,935,150 37,884,825 165%

TRC 1.07 1.09 101.9%

These program results were achieved despite the continued and rapid declines in the new home market and the economic slowdown adversely impacting the air conditioning replacement market. In response to these market dynamics, participating HVAC contractors refocused their efforts toward tuning up existing air conditioning units; rather than, replacement or the new construction market. This was aided by the efforts of the program team to overcome the initial concerns of the A/C contractor community regarding the requirements of the tuneup measure. Added emphasis and work was placed on HVAC contractor technical certifications, educating HVAC contractors on intent and goals of the program, and adjusting program design and software to be more user friendly for program participants. Participating HVAC contractors concentrated their efforts on tenant occupied apartments despite an incentive design that was intended to encourage a heavier participation for single family A/C units.

2008 Analysis This section presents a discussion of how and why the actual budget and goal results varied from the program plan.

Since there were continued declines in the new home market and the economic slowdown adversely affected the retrofit market, participating HVAC contractors refocused their efforts on tuning up existing air conditioning units; rather than, replacement or the new construction market. This did not happen until the program team was successful in overcoming the initial resistance of the A/C contractor community. Southern Nevada Air Conditioning Refrigeration Service Contractor Association (SNARSCA) is a local air conditioning advocacy group dedicated to improving the technical skills and professional installation and maintenance of air conditioning and refrigeration related systems. There are 306 companies engaged

Exhibit A

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in residential air conditioning work, of which approximately 150 members belong to SNARSCA. The continuing alliance of Nevada Power with SNARSCA was an integral part of the success of this HVAC contractor driven program. Nevada Power was able to overcome HVAC contractor resistance by aligning the common goals of the utility and SNARSCA. Nevada Power also supported SNARSCA on HVAC contractor technical certifications, educating them on intent and goals of the program, improving program design, resolving technical software glitches, and improvements to the database, which improved quicker delivery on incentive payments to program participants.

Participating HVAC contractors concentrated their efforts on tenant occupied apartments and adjusted their pricing to perform the air conditioning tuneup services for the incentives received under this program, with no cost to the end user. Other participating HVAC contractors, targeting single family and owner occupied condos/townhomes, adjusted their pricing with the same strategy or at a substantially reduced price for the tuneup service to the end user.

The tuneup measure includes cleaning of indoor coils (if accessible without disassembling the air handler), cleaning the outdoor coil, cleaning and straightening the indoor and outdoor fan blades, lubrication if needed, and a check of drive belts (if used) for wear and proper tension. Refrigerant charge is checked; all leaks fixed and the system recharged if the refrigerant is low. The air temperature between air return and supply is also tested for proper temperature drop.

The success of the tuneup measure more than offset the shortfall in the other program measures.


The Measurement and Verification work for the 2008 program was performed by Paragon Consulting Services. The results of the report were achieved by a mixture of engineered calculations, modeling and direct field measurements. A copy of this M&V Report is provided as Technical Appendix Item DSM 25.

There currently exists some controversy in the industry regarding the quantification of the energy savings that is achieved by tuning up air conditioning units. For a number of years, there was general comfort and stability regarding how the savings are to be quantified. The standard was a set of engineered calculations that were developed in concert with field investigations. These calculations and assumptions were derived from a formula from the report “BEST Program A/C Diagnostic and Duct Seal Final Report”, KEMA, Inc., June 21, 2005, Pete Baumstark. The equations used for the energy calculation are from “Innovative Peak Load Reduction Program CheckMe! Commercial and Residential AC TuneUp Program”, Proctor Engineering Group, Prepared for the California Energy Commission, November 6, 2003. The questions that have arisen concern not only the accuracy of the equation but also how it is being applied in the field.

The controversy has also been fueled by several billing analysis studies that have mixed results with some results not demonstrating any energy savings and other results demonstrating energy savings only in the hotter climate areas. Further complicating these results, is the significant increase in home electronics, especially plasma and large screen LCD televisions that would work to mask any bill savings from improved A/C efficiency.

Nevada Power reached out to the major California utilities Southern California Edison (SCE) and Pacific Gas & Electric (PG&E) to better understand the issue surrounding the quantification of energy savings. California has been the center of this controversy and wanted to hear their experience and solutions regarding tuneups. Nevada Power visited each of these neighboring utilities for extended discussions and has exchanged information (work papers, white papers, and analysis) on air conditioning and related

Exhibit A

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energy efficiency measures. Nevada Power remains engaged in this dialogue. It is noted that higher levels of energy savings with A/C tuneups would be expected in Nevada due to the lesser penetration of TXV valves on A/C units. TXV valves widen the band of over or under charging in which the A/C units operate more efficiently.

The update in the Database for Energy Efficiency Research (DEER) in December of 2008 found that the newest updated energy savings reduced from the DEER in 2005. This posed a problem with marginally costeffective air conditioning programs in California, which are now apparently no longer cost effective.

As noted earlier residential air conditioning is a major contributor to the summer peak load at Nevada Power and is the main source of residential energy usage in southern Nevada. The High Efficiency Air Conditioning Program is a very important part of Nevada Power’s DSM portfolio. In the beginning of 2009, Nevada Power engaged the services of a new M&V contractor, ADM Associates, Inc. To gain an additional perspective and as an added review process to evaluate the potential energy savings from this program Nevada Power requested the evaluation of the potential energy savings for this program by this new M&V contractor. While the results from ADM are not identical to that from Paragon Consulting, they are generally supportive of the results with similar per ton and per unit savings figures.

2008 Lessons Learned In this section, Nevada Power presents a discussion of key lessons learned, conclusions, and recommendations for changes to improve the performance of the program based on the information provided in the 2008 Analysis.

• The programmed savings from the tuneup measure should be scaled back to be more conservative and the incentives adjusted accordingly. Additional energy savings measures are needed to maintain strong program energy savings.

• The per ton energy savings for multifamily units is less than that for single family homes and therefore the incentive structure for multifamily should also be less.

• Nevada Power tried to influence HVAC contractors to focus their efforts on tuneups of air conditioning units greater than 2 tons. To do this, Nevada Power adjusted the incentive amounts based on A/C size to recognize the larger energy saving potential of the higher tonnage A/C units. The utility’s efforts were met with minimal success. To increase single family unit participation, a more aggressive differentiation is required for future program years.

• The pay for performance contract had some negative effects on program performance. During the time the participation of the A/C contractors in the tune–up measure was lagging, the implementation contractor was hesitant to invest in aggressive advertising.

• The duct testing and sealing (DTS) did not get much traction in 2008. The small sample that was completed did not achieve the anticipated level of energy savings. With these initial disappointing results, the program manager focused on optimizing the performance of the other measures. This measure merits additional attention both in terms of measure design and testing additional units in the field.

• The HVAC contractors were open to participating in a cross marketing of Nevada Power’s programs. The program manager was successful in negotiating an agreement and development of a process with SNARSCA to have local HVAC contractors maintain, install, and market the thermostats used under the Cool Share Program (Demand Response). This also resolved a source

Exhibit A

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of contention between the HVAC contractors and Nevada Power as the HVAC contractors believed the utility was taking work away from the local contractors by having “out of town implementation contractors” installing thermostats under the Cool Share Program. By negotiating a fixed cost for the installation of each thermostat, Nevada Power was also able to lower the costs for that program.

• Nevada Power investigated means of improving communications with HVAC contractors by utilizing the SNARSCA sponsored newsletters and “Fax Blasts”. Nevada Power discovered it was necessary to use certified letters to participating contractors to be effective in informing and documenting important, significant changes to the program. SNARSCA sponsored newsletters and presentations in monthly meetings were also helpful but only for HVAC contractor recruitment.

• There were customer complaints of a few participating HVAC contractors aggressively marketing the tuneup portion of this program by the use of telemarketing. To prevent further contractor misrepresentation, a modification of the Contractor Participation Agreement was issued and signed by each participating contractor. This modification educated contractors on the proper use of logo and script for Nevada Power marketing purposes. There is still an open issue with one participating contractor regarding misrepresentation; Nevada Power is working with local agencies to resolve.

Exhibit A

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Section B: 2009 Program Table 2 provides the budget and targets for 2009.


Total Residential High Efficiency Air Conditioning





Measure 1 – High Efficiency A/C

Budget $2,240,000




Measure 2 – Quality Installation

Budget $414,376




Measure 3 – Tuneups

Budget $9,437,476




Measure 4 – Duct Testing and Sealing

Budget $10,694




2009 Program Execution The 2009 Residential High Efficiency Air Conditioning Program is similar to the program delivered in the 2008 program year with incentives provided to homebuilders of new homes and homeowners of existing homes for the installation of highly efficient air conditioning units. Additional incentives are

Exhibit A

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provided directly to the HVAC contractors for the quality installation of those air conditioners and for duct testing and sealing of leaks in the air distribution system. The tuneup measure will also continue in 2009. Enalasys, the implementations contractor, will continue to use the computer based ChargeRite system as a verification tool to test and provide information on each energy efficient measure performed.

Duct testing and sealing (DTS) for new construction will be an optional energy conservation measure performed at the time of air conditioning installation. Duct leakage for new homes are generally under 6%, mainly due to the Energy Star® home influence over the past five (5) years in southern Nevada. Incentives for DTS of existing homes remain optional. There has been minimal HVAC contractor participation of this measure, because incentives are based on percentage of duct leakage achieved. The amount of work necessary to achieve the incentive has not been sufficient to maintain contractor participation; however, incentive levels are set based on the estimated annual kWh savings.

The incentives for the tuneup measure have been revised for 2009. The incentive is changing from a per ton incentive to a per unit incentive to reduce complexity and confusion regarding program incentives. Incentives will be provided for single family units and multifamily units based on the relative energy savings of each type of residence. The incentive design will again attempt to get a better balance of single and multiple family homes. An additional $5.00 shortterm incentive per A/C unit paid directly to the HVAC technician to encourage compliance to protocol and training issues will be investigated.

The start of the 2009 program was delayed until May after the new M&V contractor, ADM Associates, had a chance to review the program and assess potential program savings. This was due to the controversy regarding the quantification of program savings attributable to the tuneup measure and the impact on the pay for performance contract with the implementation contractor.

2009 Results to Date Table 3 provides the accomplishments of the program through August 31, 2009 as reported by the implementation contractor.

Table 3: Budget and Targets

Program Year Budget 2009 Actual 2009

Total $11,514,120 $3,745,994

Measures 53,050 9,014

Demand Savings (kW) 17,864 5,031 Energy Savings (kWh) 25,626,370 9,522,784

Exhibit A

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Section C: Proposed 20102012 Program This program provides incentives to homeowners, residential homebuilders, and HVAC contractors to install and maintain high efficiency air conditioning equipment and maintain existing air conditioning equipment at optimum efficiency. The program continues to support the residential new construction and retrofit channels, scales back the tuneup measure and adds several new measures all designed to increase the operating efficiency of new and existing air conditioning units

Nevada Power will continue to market high efficiency equipment placement and quality installation through two primary channels: residential homebuilders and new and replacement HVAC contractors. Additional program marketing for the retrofit channel may be expanded to include the residential end user. Quality air conditioning tuneups, time delay relays, and variable speed fan motors and duct testing and sealing will be marketed through the residential HVAC contractor channel, and as appropriate, the residential enduser.

An overview of the proposed budgets and targets at the base, low and high scenarios for this program are presented in Table 4 and Table 5.


Scenario Budget

TRC 2010 2011 2012

Base $7,150,000 $7,150,000 $7,150,000 1.51

Low $5,720,000 $5,720,000 $5,720,000 1.51

High $8,935,000 $8,935,000 $8,935,000 1.50

Table 5: Proposed Targets Summary for the Base, Low and High Program Scenarios


2010 2011 2012 2010 2011 2012

Base 18,395,300 18,395,300 18,395,300 9,718 9,718 9,718

Low 15,124,330 15,124,330 15,124,330 7,991 7,991 7,991

High 22,200,506 22,200,506 22,200,506 11,729 11,729 11,729

Program details for the base program scenario are provided in Table 6a. Program details for the low program scenario are provided in Table 6b and program details for the high program scenario are provided in Table 6c.

Exhibit A

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A/C Tuneup No. of Installed Measures 19,874 19,874 19,874 Energy Savings (kWh) 14,905,500 14,905,500 14,905,500 A/C New Const and QI No. of Installed Measures 500 500 500 Energy Savings (kWh) 360,000 360,000 360,000 A/C Retrofit and QI No. of Installed Measures 750 750 750 Energy Savings (kWh) 690,000 690,000 690,000 DTS No. of Installed Measures 50 50 50 Energy Savings (kWh) 18,000 18,000 18,000 Time Delay Relays No. of Installed Measures 2,000 2,000 2,000 Energy Savings (kWh) 1,318,400 1,318,400 1,318,400 Variable Speed Motors No. of Installed Measures 750 750 750 Energy Savings (kWh) 1,103,400 1,103,400 1,103,400

Exhibit A

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A/C Tuneup No. of Installed Measures 16,443 16,443 16,443 Energy Savings (kWh) 12,332,490 12,332,490 12,332,490 A/C New Const and QI No. of Installed Measures 400 400 400 Energy Savings (kWh) 288,000 288,000 288,000 A/C Retrofit and QI No. of Installed Measures 600 600 600 Energy Savings (kWh) 552,000 552,000 552,000 DTS No. of Installed Measures 40 40 40 Energy Savings (kWh) 14,400 14,400 14,400 Time Delay Relays No. of Installed Measures 1,600 1,600 1,600 Energy Savings (kWh) 1,054,720 1,054,720 1,054,720 Variable Speed Motors No. of Installed Measures 600 600 600 Energy Savings (kWh) 882,720 882,720 882,720

Exhibit A

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A/C Tuneup No. of Installed Measures 23,638 23,638 23,638 Energy Savings (kWh) 17,728,506 17,728,506 17,728,506 A/C New Const and QI No. of Installed Measures 625 625 625 Energy Savings (kWh) 450,000 450,000 450,000 A/C Retrofit and QI No. of Installed Measures 1,050 1,050 1,050 Energy Savings (kWh) 966,000 966,000 966,000 DTS No. of Installed Measures 50 50 50 Energy Savings (kWh) 18,000 18,000 18,000 Time Delay Relays No. of Installed Measures 2,600 2,600 2,600 Energy Savings (kWh) 1,713,920 1,713,920 1,713,920 Variable Speed Motors No. of Installed Measures 900 900 900 Energy Savings (kWh) 1,324,080 1,324,080 1,324,080

Exhibit A

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Rationale and Supporting Data

Quality Installation The installation of an air conditioning unit requires a number of key steps in order to ensure proper operation and efficiency. One of these steps is charging the unit with refrigerant. Air conditioning equipment arrives from the factory or distributor with a “standard” amount of refrigerant, which is based on a “typical” installation.

Each actual installation, however, requires the air conditioning technician to adjust the refrigerant levels to account for the differences between the “typical” installation requirements and the specific requirements dictated by the conditions present at the new home. This adjustment may require more or less refrigerant than is provided for the typical installation.

A welldefined protocol to ensure that the equipment has been charged properly has been developed and implemented by many air conditioning contractors. The protocol requires the units to be tested under a typical cooling load, and verifies that the amount of refrigerant is appropriate for the operating conditions in the specific application. Additional options exist in the protocol to verify and adjust refrigerant levels in conditions where cooling load is difficult or impossible to replicate.

Occasionally, contractors either lack the ongoing oversight to enforce this protocol with their installation technicians, or simply do not utilize the protocol at all. A study commissioned by the American Society of Heating, Refrigeration and Air Conditioning Engineers (ASHRAE) completed by John Proctor, P.E. found that over 80% of air conditioning units installed in a sample of new homes in Arizona were charged incorrectly 1 .

When air conditioning equipment is improperly charged (with either too much or too little refrigerant), it loses operational efficiency to a significant degree. The equipment is highly sensitive, and the designed SEER ratings are based entirely on the proper amount of refrigerant for the system. Improper charging of equipment degrades efficiency by 5%15% 2 .

This problem can easily be rectified by tighter oversight and control of the air conditioning technicians. If they follow the protocol set forth by industry experts and “best practice,” the proper refrigerant charge is assured and the unit operates properly. The challenge is providing both supervision and some level of incentive to promote this change in oversight and quality focus.

Nevada Power has designed a project that provides a cash incentive for the Air Conditioning contractors to follow the proper refrigerant charging protocol. In order to qualify for the rebate, the A/C technician must enroll and participate with Nevada Power’s implementation contractor. The implementation contractor provides the technology methodology which enables onsite measurement of energy savings variables associated with refrigerant charge and airflow optimization, thus ensuring reasonable quality installation oversight.

The incentive provides both the motivation to comply as well as funding for the contractors that can be utilized to offset any investment in training or education required to ensure the technicians follow the protocol and provide the proper documentation to Nevada Power.

1 Field Measurements of New Air Conditioning Units in Phoenix, Arizona, by John Proctor, P.E., ASHRAE publication BN9722, pp. 406415

2 Database for Energy Efficient Resources (DEER), Version 2.01, California Energy Commission, http://www.energy.ca.gov/deer/

Exhibit A

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The energy and demand savings targets for the 20102012 action plan period have been set based on the measurement and verification results for 2008.

Marketing Channel Detail: Residential Homebuilders The residential homebuilder channel is expected to continue to be the primary market channel for air conditioners sold in the Las Vegas market. As demonstrated in previous years for this program, Nevada Power has achieved some success in establishing the relationships necessary to influence purchasing behavior for these large homebuilders.

Nevada Power provides rebates directly to homebuilders to maximize the influence regarding largescale purchasing decisions. Unlike the replacement market, new construction demands influence the purchasing decision for air conditioners well in advance of actual installation. This is best accomplished by a rebate that goes directly to the home builder. Developing this direct homebuilder payment strategy has allowed Nevada Power to reach the largest, nationallybased builders in the market and influence market transformation.

Rebates for new residential home construction are designed to influence behavior and are scaled to coincide with the kWh savings for each level of efficiency. Due to the scale of purchasing power and efficiency of new construction, the incremental costs for new construction are lower than for retrofits.

Marketing Channel Detail: Residential A/C Replacement/Maintenance Contractors A large group of contractors currently service and replace high efficiency A/C units for homeowners. They range from small “mom and pop” operations of a few technicians to large national contracting organizations such as Sears. These contractors work both competitively and collaboratively to drive industrysupporting change and regulation.

Nevada Power has worked diligently over the past five years to develop effective working relationships with air conditioning contractors. One avenue has been active participation with SNARSCA, the group representing all air conditioning contractors in Las Vegas. This industry organization provides a centralized communication forum to drive change in the contracting community. As in previous years, Nevada Power will work both directly with contractors and through SNARSCA to promote the A/C retrofit project. These contractors are the primary source of air conditioning information used by consumers. At the point of sale, the contractor typically notifies the consumer of the availability of a cash rebate for high efficiency air conditioning installations. The tuneup incentive provides a marketing tool for the HVAC contractors to sign up new customers.

Rebate payments for replacements are made directly to the consumer or HVAC contractor. The consumer deals directly with Nevada Power’s implementation contractor through the contractor’s Customer Service Center. The HVAC contractor is responsible for providing project specific air conditioning information to the implementation contractor. The consumer is responsible for verifying the installation of the equipment by providing a copy of the contractor invoice to the implementation contractor’s Customer Service Center. Random field verifications are performed to ensure that all participating contractors are abiding by the project rules.

In the replacement market, the incremental costs to increase the efficiency of the air conditioning unit can be higher than in the new construction market. This is partly due to the additional steps in the distribution chain, as the contractor generally has a less direct negotiating position with the manufacturer (e.g. through

Exhibit A

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a distributor). Furthermore, contractors have less mass production capabilities, requiring higher margin/markup levels on the final step in the distribution chain. Also, the additional cost for equipment replacement for higher efficiency units is greater in the replacement market due to the potential for larger size equipment. This is less of a problem in new construction, where the location and placement can be tailored to the new unit. In the retrofit market, contractors must find ways to fit new, larger units into existing spaces, which can increase labor and materials costs. For this reason, Nevada Power provides higher rebate levels for the retrofit market.

Nevada Power has designed the tuneup program that provides a cash incentive directly to the air conditioning contractor. The primary marketing of the tuneup measure will be made by participating air conditioning contractors as they market the tuneup service to new and existing customers. Nevada Power will provide additional marketing through such means as bill inserts, brochures, and promotion at public events as part of Nevada Power’s Energy Education Program. In order to qualify for the rebate, the A/C contractor must enroll and participate with Nevada Power’s implementation contractor. The implementation contractor provides the means for onsite measurement of energy savings variables associated with refrigerant charge and airflow optimization, thus ensuring reasonable quality installation oversight.

New for 20102012 Nevada Power will add three new measures to this proposed program. These measures were identified in a response to Nevada Power’s formal request for information that invited ideas and programs that could be added to Nevada Power’s portfolio of DSM programs. These new measures are an enhanced time delay relay, a variable speed fan motor, and an early retirement measure. The following paragraphs describe each of these new measures.

Exhibit A

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SEER Cycling Test

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

0 2 4 6 8 10

Minutes

EER 82

Fan Continues

Compressor Off

Dry Coil

Enhanced Time Delay Relay Air conditioning systems remove water from the air even in dry climates where dehumidification is not needed. Unnecessary dehumidification is wasted air conditioner capacity. The Enhanced Time Delay Relay (ETDR) harvests this wasted capacity by running the fan after the compressor turns off, evaporating water retained on the indoor coil to provide additional sensible cooling, much like an evaporative cooler.

The fanoff time delay is not a new concept. Manufacturers have long used a short time delay, typically 30 to 90 seconds, to increase their rating on the SEER test as shown below in Figure 1. The SEER test is conducted with a completely dry coil, so the time delay provided by manufacturers is not optimized to provide evaporative cooling from water retained on the indoor coil.

Figure 1: SEER Test

Most air conditioners are operating with no fanoff time delay at all. Data collected by Proctor Engineering Group from 6200 air conditioners found over 90% are operating with no time delay.

The ETDR uses a proprietary algorithm (patent pending) to run the fan at low speed and very low watt draw for the optimal amount of time after the compressor turns off. The time delay is recalculated during every air conditioner cycle as a function of the available cooling capacity remaining on the indoor coil.

Variable Speed Motor

Concept 3 is a high efficiency, variable speed, climate optimized, Brushless Permanent Magnet (BPM) fan motor designed for retrofit into existing gas furnaces and air handlers. In addition to high operating efficiency, the motor has integrated climate optimized fan control algorithms (patent pending) that reduce air conditioner energy use and peak demand in dry climates and improve dehumidification in humid climates.

Exhibit A

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Standard furnace fan motors are Permanent Split Capacitor (PSC) motors. The characteristics of these motors are moderate efficiency and constant noload speed. Lower speeds are accomplished by “slip” which drops the speed of the motor, but has only a small effect on the watt draw.

Higher efficiency motors have been available for a number of years and have been used as replacements for refrigeration evaporator fan motors. Since 1985, equipment manufacturers have used higher efficiency variable speed BPM (also called ECM) motors in their top end residential furnaces. In recent years, furnaces with BPM motors have gained market share but still represent a minority of new furnace sales.

In 2008, the Concept 3 BPM motor became commercially available. Concept 3 is designed specifically for retrofit into existing furnaces as a replacement for the standard PSC motors. Motor controls are compatible with standard 24VAC thermostat wiring. The Concept 3 operates at virtually identical efficiency to the GE ECM motors used in top end furnaces as shown in Figure 2.

Figure 2: Fan Motor Performance Comparisons

Early Replacement

The early replacement measure that will be investigated for addition to the program looks similar to the retrofit measure with two major differences. First is it targets A/C units that are still fully functional and have a number of years of useful life left. Second is a portion of the energy savings for this measure is based on the difference between the replacement unit and the unit that is being replaced. The balance of the energy savings, the same as the retrofit measure, is based on the upgrade to a SEER rating greater than the SEER 13 minimum. This measure targets older less efficient A/C units that still have a number of years of useful life remaining. The A/C unit must have an EER of 8 or less to qualify for this measure. The concept is based on the analysis that the average age of an A/C unit in service is between 8 and 10 years with an expected useful life of 20 years.

Motor Performance in Same Duct System and Furnace

August 2008

0

100

200

300

400

500

600

700

400 500 600 700 800 900 1000 1100

CFM

Watts Concept 3

PSC Motor ECM

PSC High

PSC Low PSC Medium

Exhibit A

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Upstream Buy Down The program will continue to provide incentives as in previous years but will be exploring the concept of an upstream buy down process to determine if that alternative means of providing incentives would improve the performance of the program.

Supporting Savings Data New Construction and Retrofit Measures

The energy and demand savings targets for A/C New Construction with Quality Install and the A/C Retrofit with Quality Install have been set for the 20102012 action plan period based on the measurement and verification results for 2008 and previous years.

TuneUp Measure

The energy and demand savings targets for the TuneUp measure is also based on the measurement and verification results for 2008 and previous years but has been reduced for future years in recognition of the current discussions in the industry regarding the quantification of the energy savings.

Time Delay Relay Measure

The fanoff time delay is not a new concept. Manufacturers have long used a short time delay, typically 30 to 90 seconds, to increase their rating on the SEER test as shown in Figure 1. The SEER test is conducted with a completely dry coil, so the time delay provided by manufacturers is not optimized to provide evaporative cooling from water retained on the indoor coil.

Figure 3 displays laboratory data from Southern California Edison showing the effect of a fanoff time delay on the sensible efficiency of an air conditioner equipped with a BPM blower motor. The indoor fan was run for 10 minutes following each cycle, and data were recorded each minute.

The arrows show the effect of the fanoff time delay for the 10 minute compressor cycle. The standard time delay in existing units in the field ranges from 0 to 90 seconds. The time delay for this cycle with Concept 3 would be 10 minutes. Sensible EER at 10 minutes is 22% higher than at 90 seconds, and 36% higher than with no delay.

Exhibit A

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Figure 3: Time Delay Increase to EER

The savings from the ETDR depends on the initial condition of the air conditioner including its fan motor type and any existing fan time delay. It is assumed that this program will show similar proportions of installations on ECM motors and mix of existing fan time delays. The estimated mix of these parameters and their savings are shown in Table 7.

Table 7: Enhanced Time Delay Savings and Assumed Installation Mix

Initial Condition Final Condition Savings Installations PSC motor, no tail PSC motor, Variable tail

(2 to 5 minutes) 13% 93%

PSC motor 90 sec. tail PSC motor, Variable tail (2 to 5 minutes)

10% 4%

Premium motor, no tail Premium motor, Variable tail (4 to 10 minutes)

20% 1%

Premium motor 90 sec. tail

Premium motor, Variable tail (4 to 10 minutes)

17% 2%

Average Savings 12.9%

Variable Speed Motor The higher efficiency of the Concept 3 BPM motor is estimated to reduce cooling energy use by 11% on average. Higher blower motor efficiency during cooling saves energy by:

1) Reducing the watt draw of the motor. 2) Reducing heat generated by motor inefficiency and rejected to the air stream, which must be

removed by the air conditioner.

The derivation of the 11% energy saving is provided in Table 8

Latent Recovery Test Package Unit kW and Cumulative Sens. EER

0 1 2 3 4 5 6 7 8 9 10

0 2 4 6 8 10 12 14 16 18 20

Minutes

Sensible EER Power (kW)

No Delay

90 Sec. Delay

10 Min. Delay

Exhibit A

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Table 8: Motor Replacement Compressor Cycle Savings

Standard PSC motor

Concept 3 motor

A/C Gross Sensible Capacity (Btuh) 31,488 31,488

Fan Motor Heat (Btuh) 2156 1078

A/C Net Sensible Capacity (Btuh) 29,332 30,410

A/C Condenser Unit Watts 3457 3457

Fan Motor Watts 632 316

Total Watts 4089 3773

Net Sensible EER 7.17 8.06

Savings 11%

Concept 3’s patent pending integrated climate optimized fan controls (the Enhanced Time Delay is integrated into this motor) increase the sensible efficiency of air conditioners in dry climates, reducing air conditioner energy use by an additional 20%, for total air conditioning energy savings of more than 28%.

A/C Early replacement

The calculation of the estimated energy savings for the early retirement measure is as follows;

Lifetime:

The average life span of an air conditioner is 20.5 years.

The lifespan of the new installation and quality installation is 20 years.

The average age of air conditioners in service is between 8 and 10 years.

The lifespan of the savings due to early replacement of the old inefficient air conditioner relative to a SEER 13 baseline is approximately 8 years.

The annual savings is adjusted as detailed below to simplify the lifetime to 20 years.

Baseline Energy Consumption:

The average SEER of units replaced with this measure is estimated to be less than 10.

The baseline SEER of units installed with this measure is estimated to be 13.

The average size of the single family units is estimated to be 3.5 tons.

The average size of the multifamily units is estimated to be 2.5 tons.

The average energy consumption for a SEER 10 unit in Las Vegas is 2128 kWh per ton.

Exhibit A

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The average energy consumption for a SEER 13 unit in Las Vegas is 1637 kWh per ton.

Source: Energy Star A/C Calculator

Savings:

The average savings for the upgrade from SEER 13 and the Quality Installation with 10% Free Riders is 26.38%. This is detailed in Measure 2.

Calculation: Annual kWh = Baseline kWh per ton x tons x Savings Annual kWh = 1637 kWh per ton x tons x 26.38% Annual kWh = 432 kWh per ton x tons

The minimum savings for the early replacement of an EER 8 or less “EnergyHog” with a SEER 13 unit (EER 11.3) is 29.2% for 8 years. The calculation assumes a 20% freerider rate on the early replacement portion of the measure.

Calculation: Savings = (11.3 8) / 11.3 = 29.2% Annual kWh = Baseline kWh/ton x tons x Savings Annual kWh = 2128 kWh/ton x tons x 29.2% Prorated Annual kWh = Annual kWh x 8 years / 20 years Prorated Annual kWh = 2128 kWh per ton x tons x 29.2% x 0.4 Prorated Annual kWh = 248.5 kWh per ton x tons Prorated Annual kWh with FR correction = 248.5 x (100% 20%) x tons

= 199 kWh per ton x tons

Combined Prorated Annual kWh for 8 years of early replacement and 20 years upgrade from SEER 13 to average SEER 16 is 632.5 kWh/ton x tons.

Calculation: Prorated Annual kWh = (432 kWh per ton + 199 kWh per ton) x tons Prorated Annual kWh = 631 kWh per ton x tons.

Tables 9a, 9b, and 9c provide a breakout of the budget by category for the base, low and high scenarios of the program.

Exhibit A

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$250,000 $250,000 $250,000


Rebates $3,734,860 $3,734,860 $3,734,860









Rebates $2,933,212 $2,933,212 $2,933,212





Exhibit A

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Rebates $4,773,375 $4,773,375 $4,773,375





20102012 Program Execution The High Efficiency Air Conditioning Program will have a residential tune up program for existing units. HVAC technicians will be testing for refrigerant charge, TXV performance, air flow, signs of refrigerant leakage, and extreme condenser coil restrictions. As a result, the repairs will be to fix the refrigerant leakage, correct the refrigerant charge for optimum savings, replacing or cleaning dirty filters, opening dampers, remove restrictions to increase air flow. Incentives will be paid directly to the HVAC contractor for proper work performed.

Tiered incentives will encourage air conditioning upgrades above the standard 13 SEER with a Quality Installation requirement. This will include checking for Thermostatic Expansion Valves (TXV) or Electronic Expansion Valves on every unit, which regulates refrigerant to the evaporative coil with greater efficiency. Confirmation of proper refrigerant charge and unit amp draw on every unit; as well as, the installation of all air conditioning components such as, outdoor unit, indoor coil, and furnace or furnace controls. There will be a measurement of system airflow and minimum requirement for airflow for new construction. For replacement systems, temperature split before and after the evaporative coil, with mandatory customer education about airflow for systems with less than ideal airflow. Incentives will be provided to the HVAC contractor for work performed, directly to the homeowner for the high efficiency air conditioning unit on existing homes, and directly to the builder for new construction.

These upgrades will be available for single family buildings only; however, this program could be expanded to multifamily if cost justification can be verified.

Duct testing and sealing measures for both new construction and existing units will be optional. Incentives for this measure will be paid to the HVAC contractor. It may be necessary to target Nevada Power’s marketing to older homes with exposed expansion couplers which are more easily accessible to the HVAC technician to have a viable duct testing and sealing measure. This focused action will minimize costs relative to energy savings. Repairing leaking and broken duct work is an important component of airflow to deliver proper air volume to and from the air conditioning unit.

Exhibit A

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The installation of an Enhanced Time Delay Relay controls the blower motor and increases the efficiency of the air conditioning unit by continuing to run at a low speed and at a low wattage, by extending the heat transfer at the evaporative coil, after the compressor shut off. In hot dry climates it is not necessary to run the fan a full 30 to 90 seconds as in existing time delay relays. It is advantageous to allow some water on the evaporative coil to provide additional sensible cooling or evaporative cooling.

The replacement of the existing Permanent Split Capacitor blower motor with a Brushless Permanent Magnet, Electrically Commutated, Climate Sensitive Fan Motor in the air handler will increase the operating efficiency by varying the speed of the blower motor to climate conditions; such as, baseline airflow, amp draw, humidity and static pressure.

If adopted as a new measure the early replacement of units with an original EER (Energy Efficiency Ratio) less than 8, will qualify for a potential early retirement incentive. The average lifespan of an air conditioner is 20 years with the average age of air conditioners in services is between 8 and 10 years. The lifespan of the savings due to early retirement of the old inefficient air conditioner relative to a SEER 13 (11.3 EER) baseline is approximately 8 years. The minimum qualifying original EER can be adjusted to insure general cost effectiveness. These upgrades will be available for single family buildings only; however, this program could be expanded to multifamily if cost justification can be verified.

20102012 Program Management Plan The delivery of this program will be similar to that of the 2008/2009 program with utilization of an implementation contractor. The details of the program execution may differ in some respects due to the fact that the program for the 20102012 action plan period will be the subject of a Request for Proposal (RFP) that will be issued in the fourth quarter of 2009. It is noted that different contractors have different approaches to the program delivery. The program delivery approaches will be evaluated as part of the RFP evaluation process.

The delivery of the High Efficiency Air Conditioning program will be similar to the previous years. With incentives provided to homebuilders of new homes and homeowners of existing homes for the installation of highly efficient air conditioning units. Additional incentives are provided directly to the HVAC contractors for the quality installation of those air conditioners and for duct testing and sealing of the air distribution system.

Duct testing and sealing (DTS) for new construction and existing homes will be an optional energy efficiency measure performed at the time of air conditioning installation.

Air conditioning contractors will be the conduit for the delivery of the retrofit measures. These measures include the A/C replacement, quality install, duct testing and sealing, time delay relays, variable speed motors and early replacement. The implementation contractor who is selected form the RFP process will be responsible for recruiting, educating and equipping A/C contractors for the delivery of the retrofit measures

Nevada Power will continue to work with SNARSCA to both gain support of the A/C community for the programs and to work to improve the technical skills and certifications of the community of A/C technicians.

A residential upstream buy down initiative will be investigated to determine if it could enhance program performance. In addition, incentives paid directly to the A/C technicians will be investigated as a potential step to increase the quality of the work performed pursuant to this program.

Exhibit A

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M&V Plan M&V Objective The thirdparty EM&V contractor will perform measurement and verification (M&V) activities to confirm the savings being realized through the Residential High Efficiency Air Conditioning program that Nevada Power is implementing in Southern Nevada. To guide the M&V activities, the EM&V Contractor will prepare an M&V Plan. The M&V activities for the Residential High Efficiency Air Conditioning program pertain to verifying and estimating the savings for measures implemented through the program.

Approach The M&V activities for this program fall into two major categories.

• The first category of activities pertain to reviewing the deemed savings values assigned to air conditioning servicing or tuneup measures that are being implemented through the program.

• The second category of activities pertains to estimating the savings being achieved through implementation of the measures.

The first category of EM&V activities for the Residential High Efficiency Air Conditioning program pertain to reviewing the analyses and calculations that were used to develop deemed savings values for the servicing or tuneup measures that are being implemented by contractors participating in the program. These measures include the following.

• Correcting refrigerant over or undercharging.

• Improving airflow by cleaning evaporator coils, cleaning or replacing filters, etc.

• Taking actions to correct reduced heat exchange rates.

The EM&V Contractor will assess the analysis used to determine deemed savings values for each measure according to the degree to which the savings calculations are supported and defensible and documentation is adequate. This includes assessing (1) whether the methodology used for the calculation was appropriate, (2) whether assumptions used were reasonable and appropriate, and (3) whether savings calculations were done correctly.

Based on the review and assessment of the information from these various sources, the EM&V Contractor will classify measures into one of three categories:

• Documentation is sufficient, and original deemed savings estimate is reasonable.

• Documentation is sufficient, but original deemed savings estimate is not reasonable.

• Both documentation and original deemed savings estimate are inadequate.

Sample Selection The EM&V Contractor will collect onsite verification visits for a selected sample of air conditioning units that received tuneup servicing. A sample with a sufficient number of units to estimate the total achieved savings with 10% precision at 90% confidence will be selected.

Exhibit A

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The sample selection is spread over the entire implementation period. The EM&V Contractor will use a near realtime process whereby they select a portion of the sample each quarter as units accumulate in the program. Units serviced during a quarter are sampled as they become available and the selected samples are monitored. If appropriate, the sampling rates are adjusted to take into account major changes in the sampling frame.


Collect Data through OnSite Visits For the units selected for the sample, the EM&V Contractor will make onsite verification visits to confirm the asinstalled and used conditions that provide the expected savings. The steps in this process are as follows:

• Call customers to recruit and schedule for the M&V effort.

• Make visits to verify measure implementation and, where applicable, to install monitoring equipment.

• Return to site to remove monitoring equipment.

Once the arrangement for a site visit has been made, a member of the EM&V Contractors field staff visits the site to collect the data. Before visiting a site, our field personnel review the documentation for the site. Each sample participant’s data in the program tracking system are reviewed to verify the information on measures that were implemented. A complete list and description of these measures is provided to the survey engineer.

Perform Billing Data Analysis As another method to determine the savings that result from servicing air conditioning units, the EM&V Contractor can use regression analysis of account billing data on electricity use for each household that received servicing.

The following equation provides the basic regression model we consider for each site during this analysis.

AECt = β0 + β1HDDt + β2CDDt + β3GPt +β4POST + β5POSTHDDt + β6POSTCDDt + Et

where:

AECt is average daily electricity use for billing period t for the site (determined by dividing billing period gas usage by number of days in billing period);

HDDt is the average daily heating degree days for billing period t for the site;

CDDt is the average daily cooling degree days for billing period t for the site;

GPt is the price of gas for billing period t;

POST is a binary (01) variable with a value of 1 for the postretrofit period;

POSTHDDt is an interaction term between POST and HDD;

POSTCDDt is an interaction term between POST and CDD;

Exhibit A

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β0 is the intercept term;

β1 is a coefficient showing the change in gas use that occurs for a change in the heating degree day variable;

β2 is a coefficient showing the change in gas use that occurs for a change in the cooling degree day variable;

β3 is a coefficient showing the change in gas use that occurs with a change in the price of gas;

β4 is a coefficient showing the change in gas use after the installation of the energysavings measures;

β5 is a coefficient showing the change in gas use that occurs for a change in the heating degree day variable after the installation of the energysaving measures;

β6 is a coefficient showing the change in gas use that occurs for a change in the cooling degree day variable after the installation of the energysaving measures;

Et is an error term.

Two types of regression analysis will be applied for each site.

• First, the data for each site are used individually in single equation regression estimation. Because of the time dimension in the billing data for each site, there may be autocorrelation in such data, and techniques for correcting for such autocorrelation are incorporated into the regression analysis.

• Second, the data for all sites are used in combination in a “Seemingly Unrelated Regression” analysis. This technique allows account to be taken of possible correlations among the regression error terms across sites, thereby improving the efficiency with which coefficients are estimated for the individual sites.

Once the best model and data set for a site is determined, the EM&V Contractor can use that model and data to calculate “weather normalized” baseline and postinstallation electricity use for the site. This weather normalization is performed so that the effects of changes in weather conditions are not included in the estimates of savings.

Estimated Energy Savings The EM&V Contractor may use the data collected onsite, any monitored data, and the results of the billing data analysis to estimate the energy savings of the various servicing measures implemented. Before beginning the analysis, they may run the field measurement data through a number of input checks based on condition inequalities. These checks are made for the measurements as well as for typing errors of the input data. Any condition not met and not an error translating from measurement notes to spreadsheet input will be further investigated.

Programlevel gross savings will be developed by applying savings realization rates to the programlevel expected savings. This procedure for estimating gross savings for the program is an application of ratio estimation, which improves the precision of the estimates.

Exhibit A

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For each air conditioning unit in the sample, the M&V work will produce two estimates of gross savings: an expected gross savings estimate and the verified gross savings estimates developed through the M&V procedures. The ratio estimation of programlevel gross savings makes use of these two sets of estimates.

In particular, programlevel savings are estimated through the following formulation:

$ Y y x X = X

x y R =

where YR is the estimate for programlevel gross savings, y is the sample total for gross savings, x is the sample total for the auxiliary variable, and X is the population total for the auxiliary variable. For this ratio estimation of programlevel savings, estimates of expected savings from the program tracking records are used as the auxiliary information.

Where appropriate, achieved savings rates are determined and applied for types of dwelling units that can be expected to be relatively homogeneous (e.g., single family detached, single family attached, multifamily).

20102012 M&V Data Store The Nevada DSM M&V Data Store Web Portal, referred to as “Data Store”, is a web portal that has been customized for both Nevada Power Company’s and Sierra Pacific Power Company’s internal use. Its function is to track Demand Side Management (DSM) program performance. Nevada Power uses this management and tracking tool throughout the year to ensure that the planned investments provide clear value. The Data Store also supports the evaluation, measurement, and verification activities by providing the data needed for sample selection and verification of savings data.



Freeridership The most recently completed analysis freeridership and NetToGross Ratios (“NTGR”) was conducted by PA consulting in 2009. The freeridership rate for this total program as determined by PA consulting is 14.5%. The freeridership rate for A/C replacement is 11.3%, the freeridership rate for A/C tuneup is 20.0%, and the freeridership rate for duct seal and repair is 20.3%.

Input Data, Description of Sources, and Results of Financial Analysis A copy of the input data sheets and financial model output are provided as Technical Appendix Item DSM2. These figures were all calculated based upon the information contained in this program data sheet and the materials referenced herein. The following tables summarize the results of the financial analysis for all three scenarios presented in this program data sheet.

Exhibit A

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Total Resource 1.51 $32,288,119 $21,436,262 $10,851,857 $0.06 Utility 1.75 $34,699,365 $19,799,665 $14,899,700 $0.05 Participant 33.59 $37,585,809 $1,119,103 $36,466,706 $0.00 Ratepayer 0.50 $30,876,498 $61,208,342 ($30,331,845) $0.16 Societal cost 1.68 $35,975,002 $21,436,262 $14,538,739 $0.06



Total Resource 1.51 $26,447,182 $17,469,107 $8,978,075 $0.06 Utility 1.79 $28,341,180 $15,840,028 $12,501,152 $0.05 Participant $30,815,898 ($17,726) $30,833,623 $0.00 Ratepayer 0.51 $25,282,829 $49,714,277 ($23,431,448) $0.16 Societal cost 1.69 $29,469,988 $17,469,107 $12,000,080 $0.06



Total Resource 1.50 $39,375,818 $26,331,358 $13,044,459 $0.06 Utility 1.72 $42,454,783 $24,744,420 $17,710,364 $0.05 Participant $45,705,521 ($985,609) $46,691,130 $0.00 Ratepayer 0.50 $37,677,196 $75,227,529 ($37,550,333) $0.16 Societal cost 1.67 $43,859,182 $26,331,358 $17,527,824 $0.06

Exhibit A

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Total Costs $7,150,000 $21,450,000


Energy Benefits ($) $704,022 $24,988,049





Total Costs $5,720,107 $17,160,321


Energy Benefits ($) $578,513 $20,453,626





Total Costs $8,935,636 $26,806,908


Energy Benefits ($) $850,729 $30,530,099






Exhibit A

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33







Section E: Supporting Documentation M&V Report for 2008 is provided as Technical Appendix Item DSM25.

Exhibit A

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Exhibit A

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Nevada Power Company Energy Efficient Pools and Spas

January 2010

1


Energy Efficient Pools and Spas January 2010

Exhibit A

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January 2010

2


2008 Analysis ........................................................................................................................ 4 2008 Lessons Learned ............................................................................................................. 5 Product Training..................................................................................................................... 5 Credibility ............................................................................................................................. 5 Continuous Process Improvement ............................................................................................. 5 Continued Partnership with Southern Nevada Water Authority..................................................... 5


Section C: Proposed 20102012 Program ......................................................................................8 20102012 Program Execution ............................................................................................... 11 20102012 Program Management Plan .................................................................................... 12 M&V Plan ........................................................................................................................... 12



List of Tables Table 1: Results, Program Year 2008........................................................................................................................... 4 Table 2: Targets and Budgets, Program Year 2009......................................................................................................... 6 Table 3: Budgets, Program Years 20102012 ................................................................................................................ 8 Table 4: Targets, Program Years 20102012 ................................................................................................................. 8 Table 5a: Base Scenario Proposed Targets and Budgets, Program Years 20102012 ............................................................ 9 Table 5b: Low Scenario Proposed Targets and Budgets, Program Years 20102012 ............................................................ 9 Table 5c: High Scenario Proposed Targets and Budgets, Program Years 20102012.......................................................... 10 Table 6b: Low Scenario Program Budget by Category, Program Years 20102012.......................................................... 11 Table 6c: High Scenario Program Budget by Category, Program Years 20102012 ......................................................... 11 Table 7a: Base Scenario Cost Test Results 20102012 .................................................................................................. 16 Table 7b: Low Scenario Cost Test Results 20102012 .................................................................................................. 16 Table 7c: High Scenario Cost Test Results 20102012.................................................................................................. 16 Table 8a: Base Scenario Utility Economic Evaluation .................................................................................................. 17 Table 8b: Low Scenario Utility Economic Evaluation................................................................................................... 17 Table 8c: High Scenario Utility Economic Evaluation .................................................................................................. 17


Exhibit A

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3


• Program Name: Energy Efficient Pools and Spas


• Program Manager: Quinn Parker


• 2009 Budget: $1,033,475

• Proposed Budget: 2010: 2011: 2012:

Low $ 424,000 $ 640,000 $ 800,000

Base $ 530,000 $ 800,000 $ 1,000,000

High $ 663,000 $ 1,000,000 $ 1,250,000


Base 1.42

High 1.42

Program Summary The Energy Efficient Pools and Spas program continues to operate primarily under a midstream buy down structure. The rebates are generally paid to distributors or retailers. In the case where a pool service professional acquires the device, the distributor receives the rebate. In the case where the home owner purchases the device, the rebate is paid to the retailer. Nevada Power program participants are comprised of individual home owners, service professionals and pool builders. A home owner would qualify for a direct rebate if they purchased the device from a vendor not participating in the program such as from an internet provider. After a pump is purchased, the distributor or retailer submits the rebate request via online application software.

For the 20102012 action plan period, the program has been expanded to include spas. The program expansion also includes a rebate for switching to an intelligent, digitally controlled timer such as the TightWatt, which, by reducing run times needed for proper pool operation, can save a significant amount of energy. An incentive will be added for pool professionals for installing energyefficient pool pumps providing a verification report is submitted to ensure appropriate settings have been entered on the variable speed pool pumps to achieve optimum savings. A variable speed pool pump must be installed by a trained technician to ensure effective operations, due to the fact that variablespeed pumps either contain an integrated, programmable controller, or utilize a separate, standalone controller. Both types of controllers require fairly sophisticated programming in which residential customers are generally not trained to program. 1

1 Work Paper WPSCREWP0001 Revision 0 – Southern California Edison Company – Design & Engineering Services – Variable Speed Swimming Pool Pump. October 31, 2007

Exhibit A

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4

Section A: 2008 Program Results Table 1: Results, Program Year 2008


Budget, Total Program $897,694 $406,267 45.3%

No. of Installed Measures 3,750 1,023 27.3%

Demand Savings (kW) 2,025 373 18.4%


TRC 2.16 0.99 45.8%

2008 Analysis The program continued to struggle in 2008 although it demonstrated a significant improvement as compared to 2007. While the program did not meet the energy savings goal, it did achieve the installation of 1,023 qualifying pool pumps, representing a 1,200 percent increase over the number of pumps installed in 2007. The following paragraphs explain the reasons for the shortfall:

Economic Forces: The pool industry is closely tied to the new home industry in Las Vegas. The new home industry had an extremely challenging year in 2008, as did the pool industry. The number of foreclosures tripled from January 2008 to October 2008. Bank owned properties comprised almost three quarters of all home sales by the end of 2008. The housing market began to deteriorate in 2007, but it essentially collapsed in 2008.

Legal Forces: On December 18, 2008 the Virginia Graeme Baker Pool & Spa Safety Act went into effect mandating that antientrapment devices must be placed on all public pools and spas to prevent accidents. While this law mainly covers commercial pools it does mandate that all residential pools be equipped with compliant drain covers and dual or “unblockable” drains 2 . An alternative for homeowners is a new variable speed pump with builtin antientrapment detection device that automatically shut off when they sense drain blockage. The actual impact of this new law on the residential pool pump industry remains unclear; it is likely that manufacturers such as Pentair, who produce variablespeed pumps equipped with antientrapment detection, will see a boost in sales as a result. This should improve program results in future years. The shortterm boost in sales has yet to materialize.

Measurement & Verification: The program received the measurement and verification (M&V) results from the 2008 program year in April 2009. These results reflected a 31.4% drop from the ex ante savings. The M&V report notes that the primary reason for this lower than expected savings figure is that many of the new variable speed pumps are being operated in a manner that is close to that of a single speed pump. Operating in this mode, results in a significant lost energy savings opportunity. The M&V report suggests additional education of pool technicians is required in best practices of operating a variable speed pump in order to maximize savings actually achieved.

2 Pool & Spa News. “VGB Act Uncertainty Hits Residential Side”. January 30, 2009. pg 1

Exhibit A

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5

2008 Lessons Learned

Product Training It is clear that simply training pool professionals on the value of two speed and variable speed pumps is not sufficient to ensure the proper setting of pumps. It is critical that a more rigorous education and verification process be integrated into the program to realize the full savings potential of variable speed pumps.

Credibility It is important that all partners’, pool builders, service professional and homeowners, questions are responded to in a timely fashion and that all participants have direct access to the field coordinator to enable the quick resolution of issues that may be encountered.

This increased responsiveness was incorporated in the second year of the program resulting in achieving much greater participation in the program in 2008. The improved response time has established strong credibility with all of the program participants. Often, when issues arose they were quickly handled by the field coordinator who would promptly pay a visit to the property in question and inspect the pump or related plumbing. Such attentiveness is greatly appreciated by the partner and builds program credibility and reaffirms Nevada Power’s commitment to the success of the program.

Continuous Process Improvement Since the program’s inception, the field coordinator has spent a substantial amount of time reviewing rebates, confirming data accuracy, and inputting countless rows of data into Excel spreadsheets. In 2008, the team designed a plan to reduce labor hours associated with data management by developing an online rebate processing database which allows each individual retailer or distributor to upload rebates on a daily or weekly basis.

Continued Partnership with Southern Nevada Water Authority The partnership between Nevada Power and Southern Nevada Water Authority is a great example of synergy in the world of energy conservation and efficiency. The crosspromotion of the programs to save energy and save water is a progressive step in the process of spreading awareness across Nevada Power’s customer base. Every interaction with a customer, a retailer, or a distributor is an opportunity to disseminate information on how pool owners can help conserve both of these critical resources.

Detailed information for the performance of this program in 2008 is provided in Section O of the 2009 Annual DSM Update Report provided as Exhibit B.

Section B: 2009 Program The 2009 Energy Efficient Pool Pumps program is a building on the success of the 2008 program. It continues as a midstream rebate program with a goal of saving 5,400,000 kWh annually.

The goals and objectives of the program include:

1. Expanding existing relationships with retailers and distributors.

Exhibit A

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6

2. Continuous education of program partners to ensure effective program promotion and implementation to be achieved through onsite education at program partners’ facilities and at various outreach events throughout the year.

3. Aggressive marketing and promoting of the program will be delivered through a combination of marketing materials, bill inserts, website expansion, retailer recommendations and outreach events.

4. Crossprogram collaboration with other conservation and energy efficiency programs will be enhanced to maximize customer awareness and participation in these programs.

5. The partnership with the Southern Nevada Water Authority (“SNWA”) will be continued to maximize energy savings through crossutility promotion.

6. Implement and maintain an online application process.


Total EnergyEfficient Pool Pumps 2009





2009 Program Execution

Technology Improvements The program is preparing to launch an online rebate processing website aimed at streamlining the rebate process for both the program partners and the implementation contractor, Ecos Consulting. The new system will allow partners to upload rebates in realtime. This enables Ecos’ service center to identify potential data discrepancies instantaneously. This helps speed up rebate processing time substantially by setting in motion the necessary steps to reconcile the data instead of waiting for a batch of rebates to be sent on a weekly or monthly basis where errors may not be identified until well after the date the rebate request is submitted. This result is a faster reimbursement for the partners and more efficient use of time by program staff helping contribute to overall program effectiveness and participant satisfaction.

New Program Partners The pool pump program has incorporated two major additions in 2009. The first is a new partnership with Leslie’s Pools in southern Nevada. All Leslie’s locations will begin participating in the program in April. In addition, the program has added Hayward’s new TriStar variable speed pump as an eligible measure for 2009.

Exhibit A

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7

Procedural Improvements As a part of continuous improvement, program staff will verify a representative sample of all rebates to confirm the validity of the customer’s signature. This is in addition to the 10 percent pump verification sampling currently being performed.

Education and Training Nevada Power and Ecos Consulting have developed a revised program designed to address the lack of understanding regarding water flow and energy usage within the pool industry on how a twospeed and variable speed pool pump should be properly set. Installers will be required to attend a training session prior to being eligible to participate in the program. In addition, program staff will monitor verification reports to ensure the pumps are being set properly. Random site visits will be instituted to verify proper settings.

2009 Results to Date To date in 2009, the program has issued over 800 rebates for efficient pool pumps. The majority of the pumps have been variable speed pumps manufactured by Pentair Pool & Spas. The program has processed rebates from all channels, including retailers, distributors, and pool builders. The primary participants have been retailers.

Exhibit A

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January 2010

8

Section C: Proposed 20102012 Program The 20102012 Energy Efficient Pools program will expand beyond the 20072009 program scope.

2010 2012 objectives include:

§ Explore the Implementation of a rebate structure to encourage early retirement of existing single speed pool pumps for new twospeed or variablespeed pool pumps.

§ Provide a third rebate component that pays rebates directly to the installation contractor.

§ Provide a rebate for retrofitting existing singlespeed pool pumps with seasonal timers sold through the same channels as energy efficient pool pumps.

The program will continue to provide an instant rebate at the point of purchase to the pool pump distributor, retailer or pool builder. Rebates will be provided for twospeed, variable speed, and seasonal timer purchases. Along with the instant rebate at point of purchase, an incentive rebate will be provided to the installer. Installer incentives will be paid upon receipt of a verification report.

An overview of the proposed budgets and targets at the base, low and high scenarios for this program are presented in Table 3 and Table 4. Program details by scenario are provided in Tables 5a, 5b, and 5c.


Scenario Budget

TRC 2010 2011 2012

Base $530,000 $800,000 $1,000,000 1.42

Low $424,000 $640,000 $800,000 1.42

High $663,000 $1,000,000 $1,250,000 1.42



2010 2011 2012 2010 2011 2012

Base 2,150,250 3,229,500 4,003,250 597 896 1,111

Low 1,720,200 2,583,600 3,202,600 478 717 889

High 2,687,250 4,037,700 5,005,400 745 1,120 1,388

Exhibit A

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9


Total Program – Base Scenario 2010 2011 2012 Budget, Total Program $530,000 $800,000 $1,000,000 No. of Installed Measures 2,125 3,160 3,835 Demand Savings (kW) 597 896 1,111 Energy Savings (kWh) 2,150,250 3,229,500 4,003,250 Measure 1 – Variablespeed pumps No. of Installed Measures 1,380 2,100 2,650 Energy Savings (kWh) 1,725,000 2,625,000 3,312,500 Measure 2 – Twospeed pumps No. of Installed Measures 120 170 210 Energy Savings (kWh) 144,000 204,000 252,000 Measure 3 – Timers No. of Installed Measures 625 890 975 Energy Savings (kWh) 281,250 400,500 438,750


Total Program – Low Scenario 2010 2011 2012 Budget, Total Program $424,000 $640,000 $800,000 No. of Installed Measures 1,700 2,528 3,068 Demand Savings (kW) 478 717 889 Energy Savings (kWh) 1,720,200 2,583,600 3,202,600 Measure 1 – Variablespeed pumps No. of Installed Measures 1,104 1,680 2,120 Energy Savings (kWh) 1,380,000 2,100,000 2,650,000 Measure 2 – Twospeed pumps No. of Installed Measures 96 136 168 Energy Savings (kWh) 115,200 163,200 201,600 Measure 3 – Timers No. of Installed Measures 500 712 780 Energy Savings (kWh) 225,000 320,400 351,000

Exhibit A

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10


Total Program – High Scenario 2010 2011 2012 Budget, Total Program $663,000 $1,000,000 $1,250,000 No. of Installed Measures 2,655 3,951 4,795 Demand Savings (kW) 745 1,120 1,388 Energy Savings (kWh) 2,687,250 4,037,700 5,005,400 Measure 1 – Variablespeed pumps No. of Installed Measures 1,725 2,625 3,313 Energy Savings (kWh) 2,156,250 3,281,250 4,141,250 Measure 2 –Twospeed pumps No. of Installed Measures 150 213 263 Energy Savings (kWh) 180,000 255,600 315,600 Measure 3 – Timers No. of Installed Measures 780 1,113 1,219 Energy Savings (kWh) 351,000 500,850 548,550





$50,000 $75,000 $100,000


Rebates $265,350 $400,700 $500,750



Total Program Cost $530,000 $800,000 $1,000,000

Exhibit A

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January 2010

11




$40,000 $60,000 $80,000


Rebates $212,280 $320,560 $400,600







$62,500 $93,750 $125,000


Rebates $331,650 $500,940 $626,080




20102012 Program Execution In the 20102012 action plan period the program will continue to provide rebates to customers for the installation of twospeed and variable speed pool pumps. An additional item, seasonal timers, will be added into the program design. A rebate will be provided when a customer purchases and installs a seasonal pool timer with their singlespeed pool pump. Savings are achieved by the timer automatically setting back the timer during the off season and managing total run time on a daily basis. Many pool owners run their pumps at the same speed and duration year round, often greatly in excess of the number of hours required for sound pool functioning. It is not necessary to run the pool as much in the winter and fall as in the spring and summer.

Exhibit A

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12

Nevada Power will strengthen the installer training and verification process based on lessons learned in 2009. It is clear that this is a crucial component to ensure maximum energy savings are obtained from the installation of a twospeed or variable speed pool pumps.

20102012 Program Management Plan Nevada Power will issue a request for proposal to select an implementation contractor for the 20102012 action plan period. The contractor will be responsible for program management including, marketing, customer education, installer training, and collection of pertinent data. A detailed program management plan will be required as a product of the request for proposal process.

M&V Plan

M&V Objective The Evaluation, Measurement and Verification (“EM&V”) Contractor will perform measurement and verification (“M&V”) activities to confirm the savings being realized through the Energy Efficient Pools and Spas program that Nevada Power is and will be implementing.

Approach The EM&V Contractor will provide the plans for performing the M&V activities for the Energy Efficient Pools and Spas Program. The choices for procedures that will be used to perform the M&V activities have been informed by standard technical references, such as the International Performance Measurement and Verification Protocol and the National Action Plan Model Energy Efficiency Program Impact Evaluation Guide.

The following elements will be included in the M&V planning:

• Descriptions of energy and demand savings metrics. • Identification of the need for deemed savings measures and how their values will be developed. • Description of how realization rates will be determined. • Description of the methodologies, procedures and data tracking systems to be used to conduct the

M&V work, includes data gathering, sampling and analysis methods. • Description of other activities to be conducted in support of M&V related activities, such as

market baseline assessments and determining stipulated (deemed) savings values. • Description of the data and information needed from the implementation contractor, with

estimated dates that the data will be needed.

Sample Selection The EM&V Contractor will prepare a sampling design that will allow collecting the data required to meet the study objectives.

For purposes of preparing the sampling design, the EM&V Contractor will take the design variable to be the number of pool pumps and/or spas that are on during a given hour. The EM&V contractor will propose that the sample should be sufficient in number to obtain a relative precision of ±.10% at the 90% scenario of confidence. The sample size n for estimating a population proportion through simple random sampling is given by

Exhibit A

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13

) 1 ( 2

2

p p r z n − =

where r is the desired precision, z is the value associated with a desired scenario of confidence, and p is the proportion of units on at a given hour. For a desired precision of ±.10% at the 90% scenario of confidence, r = .20 and z = 1.282. The value of p to be used in calculating the sample size will be determined through analyzing past year program data as well as current year program data that are currently available.

The EM&V Contractor’s pools and spas sample will include both owners that provide their own service of the pool and those that use pool service or maintenance contractors. This will allow for identifying any operating characteristics that are different between selfserviced and contractserviced pools.

As a frame for selecting the sample sites, the EM&V Contractor will use lists that Nevada Power has compiled. The EM&V Contractor will conduct a telephone survey to obtain the completed sample of households. A proportion of the households that are interviewed by telephone will be visited onsite to collect data on pump size and hours of operation.

M&V Analysis Methods To prepare for the data collection, the EM&V Contractor will develop survey instruments, an interview guide, and a detailed data monitoring and collection procedure, including survey and interview protocols. The survey instruments and interview guide are to be designed to ensure that the necessary data is collected to meet the study objectives.

The analysis will include a telephone survey. The purpose of the telephone survey is to gather information in order to assess how customers have responded to the program, and particularly how, if at all, they have shifted their usage of their pool pump systems. The EM&V Contractor will design a telephone survey instrument to collect the following types of information.

• How are residential swimming pool and spa filtration systems operated by their owners and/or their maintenance contractors? What are the pool and spa filtration systems schedules of operation? What kind of timers are used?

• What have the customers done, if anything in respect to replacing pool and/or spa pump equipment?

• Basic barriers for customers in shifting usage of their pool and/or spa pumps. • Basic motivators/drivers for customers to alter their pool and/or spa pump operation.

The EM&V Contractor will design the questionnaire to balance some opposing considerations.

For the onsite data collection, sitespecific pool and/spa pump runtime and power data are to be collected that will be used to verify pool and/or spa pump runtime and loads and load reduction impacts in the Nevada Power’s Southern Nevada service territory. The data to be collected by the EM&V Contractor includes the following:

• Pool pump runtime data • Pool pump demand (kW) characteristics (based on a single spot metering) • Record of the pool timer operating schedule • Pool water condition by visual inspection

Exhibit A

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14

• Location of swimming pool or spa (i.e., indoor, outdoor) • Size of pool or spa (gallons) • Other water features installed along with pool or spa • Is a pool or spa cover used? • Pool or Spa Heater Capacity (kBtu/hr or kW) • Type of fuel used to heat pool or spa • Age of pool or spa heating equipment • Filtration pump size (hp) • Age of filtration pump • Is pump motor high efficiency? • Type of timer used to control operation of pool or spa pump (e.g., mechanical, digital) • Hours during the day that the pump runs (i.e., 24hour profile of pump use)

Collect Data through OnSite Visits The purpose of the onsite data collection is to verify pool or spa pump runtime data for the swimming pools or spas selected for the customers.

Onetime power measurements (in watts) will be made for single speed motors and for both speeds for two speed motors, using an AEMC handheld power meter. If the pool pump is not already on, the pump motor will be switched on and run until the flow of water is at a steady state condition before power measurements are made.

The EM&V Contractor will collect the data on pool or spa pump run times by inspection of the timer. Some households with newer systems may have computerized controllers that often are within the residence.

The EM&V Contractor will characterize the pool or spa water condition by visual inspection. This may be accomplished via digital imaging recording (photographs).

Analyze Data The EM&V Contractor will analyze pool or spa pump spot kW and runtime data and estimate the load reductions related to various segments within the population for different times of the day and different days of the week.

The EM&V Contractor will have gathered data about the hours that pool pumps are operated through the telephone and inperson interviewing and through the onsite inspection and data collection. The EM&V Contractor will analyze the information collected to determine (1) average hours of operation for pool or spa pumps and (2) profiles showing the percentage of pool or spa pumps on during different hours of the day.

For purposes of evaluating the program, it is important to determine the percentage of pumps that are on at any hour of the day. The pump operating profiles are developed from data collected regarding the starting and stopping times for the pool or spa pumps.

One set of profiles the EM&V Contractor will show the percentage of pool or spa pumps that are operating for the various hours of the day.

Exhibit A

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15

For a second set of profiles, the EM&V Contractor will use kW data collected to develop hourly profiles in terms of average kW per hour.

The EM&V Contractor will also draw on the data collected through the telephone interviews and onsite inspections to assess the total demand reduction achieved through the program. To assess the demand reduction, the load resulting from the operation of pool or spa pumps needs to be determined. The aggregate load at any hour of the day that is associated with pool or spa pumps being operated can be estimated as the product of three factors:

1. Number of pool or spa pumps in place; 2. Percentage of pool or spa pumps in place that are being operated during a given hour; and 3. Estimated kW demand by a pool or spa pump when it is operating.

M&V Data Store The Nevada DSM M&V Data Store Web Portal, referred to as Data Store, is a web portal that has been customized for both Nevada Power Company’s and Sierra Pacific Power Company’s internal use. Its function is to track Demand Side Management (DSM) program performance. The Data Store supports the evaluation, measurement, and verification activities by providing the data needed for sample selection and verification of savings data. The Data Store is populated with data provided by the implementation contractor on a monthly basis.



Freeridership The most recently completed analysis of freeridership and NetToGross Ratios (“NTGR”) was conducted by PA Consulting Group (“PA”) in 2009. The freeridership rate for this program as determined by PA is 20.0 percent.

Input Data, Description of Sources, and Results of Financial Analysis A copy of the input data sheets and financial models are provided as Technical Appendix Item DSM2. These figures were all calculated based upon the information contained in this program data sheet and the materials referenced herein. The following tables summarize the results of the financial analysis for all three scenarios.

Exhibit A

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16










Exhibit A

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17



Total Costs $530,000 $2,330,000


Energy Benefits ($) $75,057 $5,394,294





Total Costs $424,000 $1,864,000


Energy Benefits ($) $60,046 $4,315,435





Total Costs $663,000 $2,913,000


Energy Benefits ($) $93,802 $6,743,836




Exhibit A

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18










Exhibit A

Page 319 of 432

Nevada Power Company Advanced Building Techniques

November 2009

1


Advanced Building Techniques November 2009

Exhibit A

Page 320 of 432


November 2009

2




Section C: Proposed 20102012 Program .............................................................................................8 Rationale and Supporting Data ........................................................................................................11 Supporting Savings Data .................................................................................................................11 20102012 Program Execution ........................................................................................................13 20102012 Program Management Plan ............................................................................................14 20102012 Data Delivery and Tracking ...........................................................................................14 M&V Plan ......................................................................................................................................14

Section D: Program Economic Evaluation ......................................................................................... 16 Cost Benefit Analysis......................................................................................................................16 Freeridership ...................................................................................................................................16

List of Tables Table 1: Results, Program Year 2008....................................................................................................................................... 5 Table 2: Results, Programs Year 2007 and 2008....................................................................................................................... 6 Table 3: Targets and Budgets, Program Year 2009................................................................................................................... 7 Table 4a: Budgets, Programs Year 20102012.........................................................................................................................10 Table 4b: Targets, Programs Year 20102012..........................................................................................................................10 Table 5a: Base Scenario Proposed Targets and Budgets, Program Years 20102012.................................................................10 Table 5b: Low Scenario Proposed Targets and Budgets, Program Years 20102012 .................................................................11 Table 5c: High Scenario Proposed Targets and Budgets, Program Years 20102012.................................................................11 Table 6a: Base Scenario Program Budget by Category, Program Years 20102012 ................................................................12 Table 6b: Low Scenario Program Budget by Category, Program Years 20102012.................................................................12 Table 6c: High Scenario Program Budget by Category, Program Years 20102012 ................................................................13


Exhibit A

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November 2009

3

• Date: November 2009

• Program Name: Advanced Building Techniques

• Program Status: Updating



• 2009 Budget: $270,000

• Proposed Budget: 2010: 2011: 2012:

Low $ 400,000 $ 400,000 $ 400,000

Base $ 500,000 $ 500,000 $ 500,000

High $ 625,000 $ 625,000 $ 625,000

• TRC B/C Ratios: Low N/A

Base N/A

High N/A

Program Summary The Advanced Building Techniques Program (formerly Zero Energy Home Program) is intended to investigate and demonstrate the viability of advanced building techniques and material that will increase the energy efficiency of new homes in the production home market. The program will explore the use of proven energy efficient techniques that are being used on smaller scale settings such as in custom and demonstration homes. The target market for this program is a distinctive segment of residential new construction builders that are interested and equipped to take part in the Advanced Building Technologies Program. The program will research, introduce, and encourage the use of advanced building techniques to provide builders a clear path to the development of near zero and zero energy homes. The structure of this program is also designed to expose the value of investing in energy efficiency and renewable energy to home buyers, home appraisers, real estate agents, and financial companies. The goal of this program while encouraging and incenting the construction of near zero energy homes energy is to develop and drive new technologies and energy efficient materials into the entire New Home Construction Program. This program is designed to work in tandem with the Energy Plus New Home Program to encourage and incent home builders to build more energy efficient homes and to educate potential new home buyers to look for energy efficiency when looking for a new home.

Section A: 2008 Program Results 2008 proved to be a challenging year for residential home builders in southern Nevada. Many builders chose to slow down or even suspend production of residential homes until the market rebounds. In spite of the economic downturn, Nevada Power made significant progress toward meeting the objectives outlined in the original program scope. Nevada Power found in its interactions with builders that a strategy to survive this crisis in the home building industry was to differentiate their product from the competition. The renewed awareness of consumers regarding potential impacts on the environment has led builders on a path of environmental consciousness. Generally people and therefore potential home buyers are more knowledgeable about how their everyday actions impact the environment. For most

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people the single family home is their single largest investment that has a significant impact on the environment.

In 2008 Nevada Power worked primarily with two builders that were interested in pursuing advanced energy efficiency building techniques in production home construction, Concordia Homes and Pulte Homes. Concordia offered an opportunity to develop, Sommerset, a community of 48 single family homes. All homes would be substantially more energy efficient than code, with solar panels standard. Nevada Power and Concordia had agreed upon a scope of work and had begun preliminary discussions on how to implement the plan. Prior to any financial investment, in October 2008, Concordia made a decision to close down their sales offices at Summerset ending the analysis and research work planned for that program. Nevada Power’s partnership with Pulte in 2008 is a continuation of the work that began in 2007. The program team, UNLV—Center for Energy Research, Pulte Homes, and Nevada Power, has continued to grow and pull in additional resources. The funding opportunity from the U.S. Department of Energy (US DOE), which has been spearheaded by Dr. Bob Boehm with UNLV, has offered an opportunity for Nevada Power to implement, analyze, and research energy efficiency while a major portion of these costs were subsidized with grant funding. The result is the development of the highly energy efficient Villa Trieste community

The ZeroEnergy Homes Pilot Program met the majority of its goals in 2008:

• Four demonstration homes were built at the Villa Trieste community, all are also Leadership in Energy and Environmental Design (LEED) certified.

• The program continued the work started in 2007 with additional market research to refine Nevada Power’s original assumptions on customer purchasing decisions and perceptions.

• The program began the development of a comprehensive incentive structure that is a combination of performance based incentives and technical and marketing resources.

• The program made significant progress on understanding the incremental costs of energy efficient upgrades, issues with adopting new techniques and materials in a production home setting while developing a better understanding on how to capitalize on the economies of scale present in the production home environment.

• In 2009 Nevada Power hosted and sponsored events at the Villa Trieste community to educate customers and establish the value of a zero energy home.

The housing collapse resulted in the fact that the program was unable to meet the construction goal of 25 to 50 homes. The economic turmoil in this market necessitated that Pulte change the scope of their participation from three separate communities to one single community and Concordia’s complete withdrawal from the market made Nevada Power’s construction goal a challenge. However; looking forward, Pulte is projecting that they will sell up to 50 homes at Villa Trieste in 2009. The program is actively seeking additional participants to the program.

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Budget, Total Program $330,000 $120,561 $209,439



Energy Savings (kWh) 150,200300,400 11,076

115,092 289,324

2008 Analysis Through Nevada Power’s market research and energy modeling, the scope of the program was redesigned to better align with market conditions. Pulte could not implement the original program scope in a challenging real estate environment. Instead Nevada Power has shifted their focus to a single community, Villa Trieste, which offers high performance homes coupled with solar tiles.

The uncertainty in the market resulted in losing one of the two builder participants. To complete a comprehensive analysis of building practices in southern Nevada, perspectives from multiple builders is necessary. Nevada Power will continue to pursue partnerships with other builders that can increase the energy performance of their homes and provide homebuyers with a source of renewable energy to offset their energy needs.

The southern Nevada market has long been a national leader in building to a higher level of energy efficiency as compared to the rest of the country. However, production building is structured to develop tracts of home quickly and efficiently. Innovative energy efficiency building techniques are not necessarily considered quick or efficient. More work needs to be done with builders to learn how to incorporate these techniques into the daily building practices while still enabling a builder to maintain a strict production schedule.

The work of this program has identified that buyers are not educated on the benefits of energy efficiency both to their overall comfort and their reduced energy costs. Buyers have become very savvy on understanding price per square foot, but not on how small increased building costs during construction for energy efficiency can decrease their overall cost throughout the life of the home. To enable buyers to understand the value of energy efficiency, the entire real estate market must be educated. Real estate agents will need to understand how energy efficiency can be a selling point. Real estate appraisers need to better understand the value of energy efficient measures over what is required by state code. More education will be targeted at the real estate community in 2009.

The budget dollars that were spent in 2008 were directed primarily to the assisting in constructing the demonstration homes at Villa Trieste. Integrated solar tiles were installed on the homes to educate

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homebuyers both on the aesthetics and the technology. Additional funds were spent on modeling and research regarding energy efficiency materials and techniques. Prior to any expenditure in the program, Nevada Power ensured that Pulte’s commitment was firm. A description of Villa Trieste and Simulations for Pulte Homes at Villa Trieste are provided as Technical Appendix Item DSM9.

Table 2: Results, Programs Year 2007 and 2008

Total Program Target 2007 and 2008 Total Actual 2007 Actual 2008 Total

Variance

Budget, Total Program $630,000 0 $120,561 $509,439

No. of Installed Measures 2550 0 4 2146

2008 Lessons Learned Nevada Power’s work with builders and the market research conducted has resulted in lessons learned and an increased emphasis on certain aspects of the program design.

• Material availability and trade education are barriers to incorporating the advanced energy efficiency building techniques that are required to build near zero or zero energy homes. More work needs to be done with builders to help them learn how to incorporate these techniques into the daily building practices while still maintaining a strict production schedule.

• Builders will build the product that their buyers demand. A strong focus must be on buyer education to increase customer demand for high efficiency in new homes. Until potential home buyers demand energy efficiency, builders are not going to wholeheartedly accept implementation of advanced building techniques into the production environment.

• For buyers to understand the value of energy efficiency, the real estate market must be educated. Real estate agents will need to understand how energy efficiency can be a selling point. Real estate appraisers need to better understand the value of energy efficient measures over what is required by state code. More education will be targeted at the real estate community in 2009.

• The lending community has made progress in understanding the value of energy efficiency. Energy Efficient Mortgage (EEM) is understood in the industry as a mortgage that credits a home’s energy efficiency in the mortgage itself. EEMs stretch debttoincome qualifying rations on loans thereby allowing borrowers to qualify for a larger loan amount and a better, more energyefficient home. The larger loans are more than offset by the reduced costs of home ownership in terms of energy costs.

• A truly zero energy home is a challenge that Nevada Power does not think production builders are going to support. The real goal is bringing the advanced building techniques that are required to even attempt to meet the near zero or zero energy standard to more application in the production home environment. Encouraging builders to build zero energy without providing the support and

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education that is required to get there will result in an industry that resists this evolution to energy efficiency in new home construction. As an interim step this program will be revised to focus on building near zero energy homes. This near term goal is more focused on understanding advanced building techniques and how they fit together to eventually build a home but is an essential step to build zero energy homes, homes that do not require more energy than they can produce.

Section B: 2009 Program In 2009, the program will come closer to meeting the program construction goals. Eight production homes are currently underway in some status of construction. 2009 has continued to be a learning experience for all parties, including Nevada Power and Pulte Homes. Nevada Power is learning how to incorporate energy efficiency and renewable energy in the construction process to be perceived as a value rather than a burden.

The goals and objectives of the program include:

Increase brand value and customer perceived value.

Educational campaigns will run throughout the year to teach homebuyers the value of coupling energy efficiency with renewable sources of energy. These educational seminars began in March 2009.

Develop tracts of near zero energy homes.

The current tract of Pulte Homes anticipates up to 50 homes will close escrow by year end. The program is aggressively pursuing new builders to join the program. Most industry forecast do not predict a rebound in the housing sector this year, so meeting Nevada Power’s goal of developing homes beyond what is required may be challenging.

Conduct on-site monitoring.

On-site monitoring of the homes will continue to provide additional information on the best use of resources. UNLV will provide valuable feedback demonstrating if the homes are performing as modeled. This feedback provides us the opportunity to refine the selection of measures, thus optimizing the combination of energy efficiency measures. As Nevada Power collects more information on how people live in a high performance home, Nevada Power can make adjustments on how to use resources in a way that is most effective.

Table 3: Budgets, Program Year 2009

Total Advanced Building Techniques 2009 Budget, Total Program $270,000

No. of Installed Measures 20-50

Demand Savings (kW) 50-100

Energy Savings (kWh) 77,550-155,100

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2009 Program Execution The 2009 Advanced Building Techniques Program was initially designed to explore the feasibility of developing zero or nearzero homes in a production home environment. It has been evident in Nevada Power’s research that the builders are making great progress in increasing the efficiency of their homes; however, these homes at about 60% better than code cannot be categorized as zero or nearzero. In 2009, the focus will be to broaden from builder recruitment and education to consumer education and market transformation. Until the community demands homes begin to be built to a higher efficiency standard, builders will not be fully motivated to push the envelope of energy efficiency building practices especially in a market that is struggling due to the economic downturn.

The program will include an increased emphasis on homebuyer and real estate community education. This education campaign will include seminars, marketing collateral, and website development.

Energy modeling data and onsite monitoring for the Villa Trieste community will be gathered on a regular basis from UNLV to evaluate and refine the mix of energy efficiency features. In addition, specifically in the Pulte’s Villa Trieste homes, Nevada Power will be installing advanced meters to provide Nevada Power the capability to monitor the energy usage of these homes more effectively. Many options are being explored including communicating with the customers through in home displays, and creative marketing tools such as MySpace, Twitter, and Facebook. Updated program results will be provided to Nevada Power Program Managers.

2009 Results to Date Results for 2009 reflect construction starts of eight production homes. Educational seminars have been conducted at the demonstration homes at Villa Trieste and a program website is under construction. Nevada Power has found synergies between the Advanced Building Techniques Program and the Energy Plus New Homes Program. These two programs will often communicate similar messages. Both programs have goals of creating market transformation which requires a strong presence in both the real estate community and homebuyers.

The early results show an optimistic indication that Nevada Power will meet the goals set for this program in 2009.

Detailed information for this program for 2008 may be found in the 2008 Annual DSM Update Report provided as Exhibit B.

Section C: Proposed 20102012 Program For the 20102012 action plan period the Advanced Building Techniques Program will leverage the lessons learned in the 2007–2009 program. The program’s initial design was to develop the zero energy homes concept with potential builders and explore the viability of proceeding with a larger scale program in subsequent years. Incentives were focused on offsetting the incremental cost of these advanced energy efficiency features and sources of renewable energy. Though this was the initial goal, the homes that currently participate in the program are approximately 60% more efficient than a code built home but clearly cannot be categorized as nearzero or zero energy homes.

Achieving a true zero energy home, in a production environment, is challenging and additional work needs to be done in how to build substantial energy efficiency and sustainability into the original architectural design. There are factors in achieving a cost effective zero energy home that cannot be solved simply with advanced construction methods. One crucial factor is the orientation of the home and

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placement of windows appropriate for the specific orientation. To make decisions on factors such as these, energy efficiency has to be a considered well before construction begins; it has to be considered during the infrastructure phase which in many cases is many years before construction begins

To address the needs of the building community that have been identified by this program, this program must further investigate several areas in 20102012.

Advanced building methods It was clear in the work that Nevada Power did with builders that there were limitations on exactly what could be done in a production environment. In Nevada Power’s interactions with builders, Nevada Power has found that many of these advanced building methods are being implemented in custom and semicustom building. These builders have the capital, flexibility, and knowledge to incorporate these measures. Production builders have barriers which include both prohibitive costs and the lack of qualified tradesmen.

Renewable energy Renewable energy is crucial to a zero or near zero energy home. Though Nevada Power found that builders could achieve some economies of scale due to the volume of panels being installed, Nevada Power’s market research did not show conclusive evidence that homebuyers understood or placed a premium on its inclusion in their home. Many were simply confused about the technology while others felt the 20 year plus payback was not acceptable when making a financial decision.

Preconstruction activities The construction of the home is only part of the picture when attempting to build a zero or near zero energy home. Preconstruction activities, including subdivision infrastructure, architectural appreciation for passive heating and cooling through building orientation and window placement, and roof design to allow adequate space for sufficient solar panels to meet the demands of the home were all important factors in how likely a home could reach zero or near zero.

Incentive Design Additional work needs to be done to design an incentive structure that effectively removes the barriers for builders to achieve aggressive energy efficiency standards. The incentive structure must be a combination of financial rebate and marketing and technical support.

An overview of the proposed budgets and targets at the base, low and high scenarios for this program are presented in Table 4a and 4b. Program details by scenario are shown in Tables 5a, 5b, and 5c.

The proposed budget below includes matching funding for years two through four of the DOE Grant that UNLV was awarded and that Nevada Power and Pulte Homes participate in as subcontractors. The grant opportunity allows Nevada Power to participate at a fraction of the actual cost, but to benefit in full from the opportunities provided by this initiative. The matching funding included in the budget for this program is aligned with the goals of the overall program which is to promote the use of advanced building techniques in the production home environment. This funding is part of a program scope which will build high efficiency homes, incorporating renewable resources, advanced metering technology, and energy storage.

The low budget includes only enough funding to support the DOE Grant. The base and high budgets allow the program to expand beyond the grant and support multiple builders in pursuing the use of advanced building techniques. The base budget assumes the anticipated builder recruitment, while the high assumes a higher scenario of builder participation with an increased rebate scenario to support recruitment.

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Table 4a: Budgets, Programs Year 20102012

Scenario Budget TRC

2010 2011 2012

Base $500,000 $500,000 $500,000 N/A

Low $400,000 $400,000 $400,000 N/A

High $625,000 $625,000 $625,000 N/A

Table 4b: Targets, Programs Year 20102012


2010 2011 2012 2010 2011 2012

Base 300,000 451,000

300,000 451,000

300,000 451,000 135203 135203 135203

Low 240,000 360,000

240,000 360,000

240,000 360,000 108162 108162 108162

High 375,000 564,000

375,000 564,000

375,000 564,000 169254 169254 169254



Budget, Total Program $500,000 $500,000 $500,000 No. of Installed Measures 5075 5075 5075 Demand Savings (kW) 135203 135203 135203

Energy Savings (kWh) 300,000 451,000

300,000 451,000

300,000 451,000

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Total Program – Low Scenario 2010 2011 2012 Budget, Total Program $400,000 $400,000 $400,000 No. of Installed Measures 4060 4060 4060 Demand Savings (kW) 108162 108162 108162


240,000 360,000

240,000 360,000


Total Program – High Scenario 2010 2011 2012 Budget, Total Program $625,000 $625,000 $625,000 No. of Installed Measures 6394 6394 6394 Demand Savings (kW) 169254 169254 169254


375,000 564,000

375,000 564,000

Rationale and Supporting Data For the 2010–2012 action plan period this project will emphasize builder education and support. There will also be a push to empower potential homebuyers with information to make more informed buying decisions and increase the demand for energy efficiency in new home construction.

In response to this market segment the program will develop a comprehensive incentive structure that will include marketing support, technical support, and financial rebates. Rebates will encourage builders to reach beyond the status quo and use innovative construction methodologies. As code requirements increase and government agencies such as ENERGY STAR® increase their standards, Advanced Building Techniques will work to further raise the bar for builders and encourage them to more aggressively incorporate energy efficiency in the homes they build. Both of the standard setting specifications, (International Energy Conservation Code) IECC and ENERGY STAR® have updated specifications out for review that could potentially increase requirements. In fact, ENERGY STAR® has a proposed design specification that is intended to target new and innovative technologies and provide an ENERGY STAR® branding for doing so. Nevada Power will research thoroughly how all these specifications fit together and will design a program that supports the national energy efficiency brand initiatives. Rebates will be provided to support continually increasing levels of efficiency.

Supporting Savings Data § Based on the data and analysis by UNLV – The Center for Energy Research, Nevada Power has been

able to refine the estimated kWh and kW savings in homes currently being constructed at Pulte’s Villa Trieste community. This analysis demonstrates that these homes save up to 6,500 kWh annually depending on the orientation of the home. Onsite monitoring is being conducted in 2009 to compare modeling data versus data gathered in the field.

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Rebates $255,000 $255,000 $255,000









Rebates $204,000 $204,000 $204,000





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Rebates $318,750 $318,750 $318,750





20102012 Program Execution The Advanced Building Techniques Program will be designed around the means rather than the end. It continues to explore the options to production builders to construct zero or nearzero energy homes, and also to assist builders in researching and understanding advanced building techniques and assisting them in obtaining the tools to get to zero or nearzero is a necessary strategy to work towards zero energy homes.

The last three years has provided the foundation to move forward with the Advanced Building Techniques Program. In 2007 and 2008 the program focused on thoroughly understanding the market. Prior to investing financial resources into the program, viability was the priority. The focus then shifted to creating an environment that allows home buyers to learn about the benefits of energy efficiency and renewable energy. This was done by developing four demonstration homes. The homes are highly energy efficient, approximately 50% better than code prior to the incorporation of solar tiles into the roof design. An education center is located on site and sales agents are well trained to answer questions. This work has set the target for the 20102012 action plan period program design.

This program will provide a combination of financial incentives, technical support, and marketing assistance. The program will work alongside the Energy Plus New Homes Program and target those builders that are showing the capability and motivation to employ advanced building techniques in the production building practices.

This program will also collaborate with Energy Plus New Homes in its marketing campaign. The target market is the same, home buyers and residential home builders. Potential home buyers will be provided choices and in these choices education will be provided to help them understand the right investment for each individual. This collaborative marketing strategy will also reduce the marketing dollars required for this program.

An implementation contractor will be selected through a competitive bidding process to manage the program execution of the program. The Advanced Building Techniques and Energy Plus New Homes Programs will be solicited in an RFP as a package with the intent for the same contractor to manage both

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programs. The relationships that are established with home builders are crucial to the success of both programs.

20102012 Program Management Plan To date, the program has been managed internally; however, Nevada Power will issue an RFP to select an implementation contractor for 20102012. Due to the growth and complexity of this program an implementation contractor is needed to efficiently drive the program to reach program goals. The RFP will require the proposing contractors to provide a program management plan.

20102012 Data Delivery and Tracking Data and results related to the 2010–2012 Advanced Building Techniques Program will be gathered on a regular basis from builder participants and UNLV. This information will be reported to the Nevada Power Program Manager by the implementation contractor based on the schedule to be determined in the RFP process.

M&V Plan

M&V Objective The measurement and verification (M&V) objective for Advanced Building Techniques would be to select a statistically representative sample and quantify the energy and demand savings resulting from the implementation of energy efficiency measures and local renewable generation resources in residential new construction sites.

Approach The M&V option selected for the Advanced Building Techniques Program is based on the accepted International Performance Measurement and Verification Protocol (IPMVP) Option D Calibrated Computer Simulations. This option will capture the interaction among the multiple measures installed. The proposed M&V approach consists of the following steps:

• Collect the required Advanced Building Techniques data from builder’s architectural drawings, mechanical plans, equipment schedules, and equipment submittals.

• Adapt the data and enter data into a building simulation software input file.

• Run the simulation program for the “asbuilt” highperformance building model. The “asbuilt” building is the newly constructed Advanced Building Techniques with all energy efficiency measures installed.

• Calibrate the model by comparing its output with measured data. The weather data for the model should be the actual weather occurring during the metering period. Refine the model until the program’s output is within acceptable tolerances of the measured data.

• Run the calibrated asbuilt model using typical weather data to normalize the results.

• Repeat the process for the baseline building model. The baseline building model is the newly constructed building with specifications that reflect applicable minimum building design values from minimum state and federal energy standards. In general, the baseline building represents the building,

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as it would have been built had minimum standard equipment been installed instead of the high efficiency equipment.

• Calculate the savings by subtracting the asbuilt results from the baseline results.

The “asbuilt” Advanced Building Techniques design data should include data from the installed solar PV system (DC capacity, inverter brand and model, pv sqt ft area, orientation/tilt angle), HVAC equipment (capacity, number, brand, model and serial numbers), operation schedules, indoor fan sizes and types, design flow rates and static pressures, duct system types, HVAC controls, including the location of zones, temperature setpoints, control setpoints and schedules, building envelope and thermal mass features (dimensions and type of interior and exterior walls, properties of windows, building orientation and shading), water heating system (fuel type, capacity, efficiency factor), lighting systems (number and types of lamps, with nameplate data for lamps and fixtures) and nameplate data from common household appliances.

The calibrated simulation strategy should include the most current version available of the EnergyGuage, a building energy analysis software program developed by the Florida Solar Energy Center (FSEC), or a similar tool provided that the program can be shown to adequately model the Advanced Building Techniques, the system or equipment installations can be calibrated to a high level of accuracy, and the calibration can be documented. Acceptable tolerance for monthly data calibration is ± 15%.

Sample Selection The selection of the M&V sample will consist of random sampling from Advanced Building Techniques. M&V sampling should include at least one program for each participating builder in the program. The goal is to validate energy savings within a minimum confidence level of 90% and a +/10% level of precision.

The M&V evaluation team will coordinate with home builders the M&V field tests and select a diversified sample of new homes from program participants. The sample size for a program of 50 homes is 29 homes to achieve desired precision of 10% and 90% confidence.


Onsite Surveys and Verifications The utility M&V contractor will conduct postconstruction visual inspections on at least 10% of Advanced Building Techniques homes participating in the program. These onsite inspections will verify the installation of the measures in new homes according to the program guidelines, and verify information about the installed measures and nameplate data about the solar PV system, cooling/heating equipment, lighting and appliances installed.

Metering Datalogging and monitoring equipment will be set up to record instrumentation data over hourly time intervals. The metered interval data would describe the performance in response to changes in weather conditions, occupancy, daily schedules, and thermostat settings among key parameters. These measurements may involve lighting systems, HVAC systems, Solar PV generation, and indoor temperature data. The period of measurement should be from one to several weeks. At minimum, the following data points should be captured during metering:

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Electrical Flows • Main electrical flow to/from the house.

• Electrical energy consumption of A/C and indoor fan units.

• Electrical generation of the solar PV system.

Gas Flows • Main gas flow to house.

Temperature Measurements • Outside ambient.

• Inside ambient, near HVAC thermostats.

• Attic temperature, at least 2 locations.

These measurements will be made with appropriate instrumentation and transducers. If available, whole house interval data can be obtained from the electric and gas utility meters.

20102012 M&V Data Store The Nevada DSM M&V Data Store is a web portal based program that has been customized for both Nevada Power Company’s and Sierra Pacific Power Company’s internal use. Its function is to track Demand Side Management (DSM) program performance. Nevada Power uses this management and tracking tool throughout the year to ensure that the planned investments provide clear value. The Data Store also supports the evaluation, measurement, and verification activities by providing the data needed for sample selection and verification of savings data.


Cost Benefit Analysis A cost benefits analysis is not necessary for this program.


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Nevada Power Company Consumer Electronics and Plug Loads

January 2010

1


Consumer Electronics and Plug Loads (Previously 80 Plus®)

January 2010

Exhibit A

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Section A: 2008 Program Results – 80 Plus® Program........................................................................3 2008 Lessons Learned.......................................................................................................................4


Section C: Proposed 20102012 Program .............................................................................................7 Rationale and Supporting Data ........................................................................................................10 Supporting Savings Data .................................................................................................................14 20102012 Program Execution ........................................................................................................16 20102012 Program Management Plan ............................................................................................17 20102012 Data Delivery and Tracking ...........................................................................................17 M&V Plan ......................................................................................................................................19



List of Tables Table 1: Results, Program Year 2008....................................................................................................................................... 4 Table 2: Targets and Budgets, Program Year 2009................................................................................................................... 6 Table 3: Proposed Budgets, Program Years 20102012 ............................................................................................................ 7 Table 4: Targets Budgets, Program Years 20102012 ............................................................................................................... 7 Table 5a: Base Scenario Proposed Targets and Budgets, Program Years 20102012.................................................................. 8 Table 5b: Low Scenario Proposed Targets and Budgets, Program Years 20102012 .................................................................. 9 Table 5c: High Scenario Proposed Targets and Budgets, Program Years 20102012.................................................................10 Table 6a: Base Scenario Program Budget by Category, Program Years 20102012 ................................................................15 Table 6b: Low Scenario Program Budget by Category, Program Years 20102012.................................................................15 Table 6c: High Scenario Program Budget by Category, Program Years 20102012 ................................................................16 Table 7a: Base Scenario Cost Test Results 20102012.............................................................................................................20 Table 7b: Low Scenario Cost Test Results 20102012 .............................................................................................................20 Table 7c: High Scenario Cost Test Results 20102012.............................................................................................................21 Table 8a: Base Scenario Utility Economic Evaluation .............................................................................................................21 Table 8b: Low Scenario Utility Economic Evaluation .............................................................................................................21 Table 8c: High Scenario Utility Economic Evaluation .............................................................................................................22

List of Figures Figure 1: EndUse Electricity Growth Rates in the United States, 2005 2030 .........................................................................11 Figure 2: U.S. Residential Electricity, Percentage by EndUse, 2005 to 2030 ...........................................................................12 Figure 3: Consumer Electronics Load Growth in PG&E Territory, Baseline Scenario...............................................................13

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• Program Name: Consumer Electronics and Plug Loads

(Previously 80 PLUS®)

• Program Status: Updated

• Program Manager: To be determined


• 2009 Budget: $505,000

• Proposed Budget: 2010: 2011: 2012:

Low $ 594,000 $ 850,000 $ 850,000

Base $ 742,000 $ 1,060,000 $ 1,064,000

High $ 925,000 $ 1,325,000 $ 1,330,000


Base 2.43

High 2.43

Program Summary Nevada Power has been conducting a somewhat successful 80 PLUS® Program in Nevada since 2008. For that program, incentives and program fees were paid after the computer manufacturers provided data to demonstrate shipments of qualified products into Nevada Power’s service territory and verification by the 80 PLUS® program administrator. In preparing the portfolio of Demand Side Management programs to propose for the upcoming 20102012 period, an evaluation of both existing and new program concepts was completed. As part of this process, Nevada Power has chosen to move beyond the 80 PLUS® concept to a more comprehensive and experienced program that will provide midstream and upstream incentives for retailers and original equipment manufacturers to increase the stocking, promotion, and sales of the highest efficiency products on the market. This program expansion will incorporate a much wider range of plug loads including televisions and cable boxes. It is designed to move quickly with the rapidly evolving electronics market and will incorporate new product measures where they demonstrate sufficient potential energy savings and market penetration.

Section A: 2008 Program Results – 80 Plus® Program Table 1 summarizes the 2008 results for the 80 PLUS® Program. The program consisted of the following measures: 80 PLUS® desktop PCs, ENERGY STAR® 4.0 desktop PCs, desktopderived servers, and ultra efficient LCD monitors. The 2008 80 PLUS® campaign results fell short of the original expectations for the program. Although it did not reach its targeted goals, the energy savings were proportional with the program expenditures. Actual expenditures were 27.5% of budget and the program achieved 31.1% of the energy savings target, and 44.4% of the demand reduction target. The addition of ultra efficient LCD monitors contributed to the overall effectiveness of the program.

Exhibit A

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Budget $313,000 $86,183 27.5%

Units 19,472 7,196 37.0% Energy Savings (MWH) 2,540.0 789.8 31.1%

Demand (kW) 304.0 134.9 44.4%

TRC 1.36 1.06 77.9%

2008 Lessons Learned The 2008 program fell short of its targeted goals because of the following factors:

The original forecasts submitted for the 2008 program budget were scoped too aggressively. At the time of program scoping approximately mid2007, it was uncertain what market penetration rate of efficient products would occur, due to a lack of hard data from manufacturers. At that time, product delivery estimates were based solely on conversations with manufacturing partners. The delivery of qualifying products was slower than anticipated due to the lengthy process required in manufacturing to integrate more efficient products into the existing product lines. Product delivery was slowed because of the abundant inventory of less efficient products.

Nevada Power assumed that unit deliveries would be more substantial as the program had recruited many large computer manufacturers, namely Dell and HP, representing the majority market share of computer desktop sales. It was also thought that the effect of the EPA’s ENERGY STAR® v4.0 specification release in July 2007 would have more of an impact in driving efficient products into the marketplace at a more aggressive rate. This did not occur. Based on rebate claims received from the manufacturing partners, the national penetration rates were .1%, .2%, and 3.4% for 2006, 2007, and 2008, respectively.

Another factor that impacted reported deliveries for 2008 was the fact that this program had a start date of March 1, 2008, effectively losing potential savings for most of the first quarter.

Based on the initial results, it was clear that unit deliveries were starting at a slower rate than expected or required to achieve the program’s savings targets. It was therefore decided, based on analysis and conversation between program staff and Nevada Power personnel, to expand the program to include ultra efficient LCD monitors effective November 1, 2008. This measure proved to be a valuable addition to the program and improved program results.

Section B: 2009 Program This section provides a discussion of conclusions and recommendations based on Nevada Power’s experience and observations regarding the implementation and execution of the individual measures. In order to achieve the 2009 targeted goals provided in Table 2, Nevada Power has taken or will take the

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5

following actions to improve the overall performance of the program. These actions will increase the number of options available to customers and therefore increase interest in the program measures.

• Nevada Power will provide incentives to manufacturers for the sale of data center servers containing 80 PLUS® certified power supplies. It is expected that sales of this measure will begin to ramp up in the second quarter of 2009.

• Along with monitors and servers, the program team has worked aggressively to expand the focus of the program to include industrial applications containing 80 PLUS® power supplies, specifically point of sale machines (desktops used in retail settings), slot machines and ATM machines. A similar program approach and strategy has been taken to recruit these industrial manufacturers for their full participation in the program as quickly as possible. It is anticipated that participation from these manufacturers and applicable rebate claims will most likely occur by the fourth quarter of 2009.

• Other program measures are under development and are expected to be released in 2009. This possibly would include efficient TVs, Smart Power Strips, and ENERGY STAR® 5.0 desktops, as well as build relationships with large electronic and hardware retailers to help promote and sell these efficient product offerings.

• To supplement efforts for program measure expansion, 80 PLUS® staff has spent time and resources with Nevada Power program managers and account executives to increase end user awareness of efficient products. This education effort will continue in 2009. Program kick offs were provided with account executives in both the north and south regions to educate them on the benefits of the program to ensure that they would be best equipped to promote these attributes to their largest customers. In addition, program marketing collateral was produced for account executives to leave behind at their accounts to further increase awareness and encourage procurement of efficient computing products.

• A onepage program promotional piece was also created and submitted to Nevada Power program managers for distribution to all of the major school district superintendents in Nevada to brief them on the energy and nonenergy benefits of procuring 80 PLUS® product lines.

• In addition to monitors, program staff will continue to promote the testing process for certifying single output power supplies used in data center servers. A measure has been established with Nevada Power for incenting manufacturers for sales of data center servers containing 80 PLUS® certified power supplies. It is expected that sales of this measure will begin to ramp up heading into 2009, but more likely by the second quarter of 2009.

Exhibit A

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2009 Budget

Budget $505,000

Units 29,172

Energy Savings (MWH) 4,428.4

Demand (kW) 507.0

TRC 1.46

2009 Program Execution The strategies revised in 2008 will be continued in 2009 to ensure that consumers are aware of and purchase 80 PLUS® product lines at everincreasing rates.

Program staff made progress throughout the year to expand program measure sales via retailers such as Best Buy. It is anticipated that Best Buy will be submitting rebates for ENERGY STAR® 4.0 desktops and ultra efficient monitors by mid2009. In addition, strategic partnerships were developed with several manufacturers of Smart Power Strips who are very interested in supporting a rebate program for this unique technology as soon as utility funding is made available.

Program staff facilitated discussions with IGT, the largest slot machine manufacturer in the United States, in the latter half of 2008 and it is anticipated that the company will be submitting their power supplies for testing and certification by the second quarter of 2009.

2009 Results to Date The following list includes all program qualifying unit deliveries claimed by 80 PLUS® manufacturing partners through the month of September 2009.

• Total 2009 Units 17,633 • Total 2009 kWh Savings 1,152,698 • Total 2009 kW Savings 1,548

Exhibit A

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Section C: Proposed 20102012 Program The proposed program addresses the added load growth within Nevada Power’s service territory, caused by the rapid proliferation of electronics—both consumer electronics such as, televisions, and office equipment such as, computers and monitors. The program will provide midstream and upstream incentives to retailers such as Best Buy and WalMart or to original equipment manufacturers Dell and HP to increase the stocking, promotion, and sale of the highest efficiency products on the market. If possible, Nevada Power would like to leverage the work being completed at other utilities in southern Nevada by achieving economies of scale.

Due to hundreds of thousands of individual sales transactions and number of expected participating retailers, the use of a streamlined online incentive processing system that integrates seamlessly with retailer and Original Equipment Manufacturer (OEM) data system would be preferred to ensure cost effective program operations. An online application processing system has been popular with many other electronic programs because of the quick and easytouse interface, and consistent reliability of the system. The online application system would also provide the benefit of having a transparent auditing trail. Similar to other utility programs, Nevada Power would like to use a system that automates incentive processing, starting with either a file upload from the applicant or a direct Electronic Data Interchange (EDI) connection. EDI allows for the automated transfer of data between the retailer’s database and the online incentive processing system. Once the EDI connection is made with a retailer, their system will automatically transfer the necessary information on qualifying product sales to the online system and they will move through the process. The database then validates the imported data, sends the completed applications for approval and batches them for payment by the utility.

An overview of the proposed budgets and targets at the base, low and high scenarios for this program are presented in Table 3 and Table 4. Program details by scenario are shown in Tables 5a, 5b, and 5c.

Table 3: Proposed Budgets, Program Years 20102012

Scenario Budget

TRC 2010 2011 2012 Base $742,000 $1,060,000 $1,064,000 2.43 Low $594,000 $850,000 $850,000 2.41 High $925,000 $1,325,000 $1,330,000 2.43

Table 4: Targets Budgets, Program Years 20102012


2010 2011 2012 2010 2011 2012 Base 2,514,945 6,903,758 7,143,758 698 1,917 1,983 Low 2,011,956 5,522,958 5,522,958 558 1,530 1,530 High 3,143,681 8,656,158 8,736,158 872 2,402 2,425

Exhibit A

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Budget, Total Program $742,000 $1,060,000 $1,064,000


Demand Savings (kW) 698 1,917 1,983


Measure 1 – Televisions



Measure 2 – Desktop PCs



Measure 3 – Monitors



Measure 4 – To Be Determined Measures



Exhibit A

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Exhibit A

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Rationale and Supporting Data Electronics are at the forefront of today’s energy efficiency challenge. While innovation is leading to lower energy use for a given level of service provided by electronics, the level of service, the range of features and functionality, and the market saturation of consumer electronics are rapidly increasing. Electronics are now recognized as a prominent and growing energy consuming enduse. Recent studies by Lawrence Berkley Nation Laboratory (LBNL), National Resources Defense Council (NRDC), and others, as well as analysis conducted by Energy Solutions, shows utility systemwide energy use attributable to electronics is growing at a rate that is overwhelming the impacts of the overall energy efficiency program portfolio efforts. For example, as people buy bigger TVs and watch them longer on average, the increased energy consumption erodes efforts made by Nevada Power’s current and previous energy conservation programs.

Exhibit A

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Relying on projections in the 2008 Annual Energy Outlook, Energy Solutions, in developing program response to Nevada Power’s RFI analyzed the load growth of electronics in the United States relative to other electrical end uses (see Figure 1 below). The Energy Information Administration (EIA) models electricity consumption for the following categories of electronics: Color Televisions and SetTop Boxes, Personal Computers (residential), Commercial Office Equipment (PC), Commercial Office Equipment (nonPC), and Other Uses. The Other Uses category (also referred to as “Miscellaneous”) includes consumer electronics such as home audio equipment, DVD players, and handheld rechargeable devices, but also includes numerous other plugloads such as coffee makers, ceiling fans, and microwave ovens.

Figure 1: EndUse Electricity Growth Rates in the United States, 2005 2030

Source: Energy Solutions analysis of “YearbyYear Reference Case Tables” in EIA 2008. Includes the estimated impact of H.R.6, “Energy Independence and Security Act of 2007” that was enacted in late December, 2007.

The average annual growth rate in energy consumption from 2005 to 2008 for consumer electronics and information technology equipment (or referred to in this RFI response simply as “electronics”) was significantly more than all other enduses shown by the horizontal xaxis in Figure 1. Commercial PCs had the highest growth rate (13.4%), followed by nonPC commercial office equipment (8.6%), color TVs and STBs (7.6%), residential computers (6.6%) and “other uses” (4.4%). With the exception of furnace fans (4.4%), all other enduses had average annual growth rates under 2%.

The forecasted growth rate from 2008 to 2030 shown by the vertical yaxis in Figure 1 follows a similar trend: electricity consumption from electronics is expected to increase at a much faster pace relative to other enduses. The growth rates level off a bit compared to the previous three years but still increase at a rate of 1.5% per year or more for each electronic category. Residential PC energy consumption is

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projected to have the highest growth rate (3.2%), followed by nonPC commercial office equipment (2.8%), other uses (1.9%), TVs and STBs (1.8%) and commercial PCs (1.5%). It is notable that electricity consumption from lighting is expected to decrease by 1.8% per year, partially due to the efficiency standards passed in the Energy and Independence Security Act of 2007 and the general trend towards more efficient lighting. Consumers replacing incandescent lamps with CFLs.

This growth has caused electronics to become a significant portion of overall residential electricity consumption and the segment is on a trajectory to become the dominant electrical enduse (see Figure 2 below). In the U.S. residential sector, the Television and Settop Box category is expected to increase from 6.5% of overall residential electricity in 2005 to 9.4% in 2030, thus becoming the thirdlargest end use behind Other Uses and Space Cooling. The percentage of electricity from personal computers is projected to increase from 1.4% to 2.7% during the same time period. The Other Uses category accounts for more electricity than any other major enduse: 21.8% of overall consumption in 2005 and projected to increase to 29.4% in 2030. The Other Uses category does include products not commonly referred to as part of the “electronics” category for example, coffee makers but the increase in overall consumption is being driven primarily by the proliferation of consumer electronics and information technology equipment. It is clear by the trend lines in Figure 2 that no other enduse is increasing as dramatically as electronics.

Figure 2: U.S. Residential Electricity, Percentage by EndUse, 2005 to 2030

Source: Energy Solutions Analysis of “YearbyYear Reference Case Tables” in EIA 2008. The “Other Uses” category includes home audio equipment, DVDs/VCRs, imaging equipment, and other small electric devices. Total delivered electricity is 4.64 quad BTU in 2005 and 5.88 quad BTU projected in 2030.

Exhibit A

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In late 2006, PG&E sponsored Energy Solutions to conduct a research study that assessed the key market trends and energy characteristics for 33 unique electronic devices being used in their “Mass Market” segment, which primarily includes single and multifamily residential customers and small businesses that are not included in their major targeted market segments. 1 Figure 3 shows a baseline, “businessasusual” energy consumption scenario from 2005 to 2010 for these electronic devices. The figure is illustrative of the significant load growth being seen in this segment and the possible implications in the absence of any coordinated mitigation strategies.

Figure 3: Consumer Electronics Load Growth in PG&E Territory, Baseline Scenario

In late 2007, PG&E sponsored QDI Strategies to develop a program strategy to address the issues and barriers to an effective energy efficient electronics program. 2 The strategy that was developed was based

1 Consumer Electronics: Market Trends, Energy Consumption, and Program Recommendations 20052010, December 2006. http://www.etccca.com/database/download/ETCC_Report_370.pdf

2 Strategic Options for EnergyEfficient Electronics in Pacific Gas & Electric Service Territory: Marketing Delivery Systems for Electronics Measures, April 2008. http://www.etccca.com/database/download/ETCC_Report_446.pdf

Small Office Equipment

Televisions

Set‐Top Boxes

Personal Electronic Chargers

Home Entertainment

18%

20%

21%

23%

24%

26%

0

1000

2000

3000

4000

5000

6000

7000

8000

2005 2006 2007 2008 2009 2010

Ann

ual Electricity Con

sumption (GWh/yr)

Percentage of residential and small commercial electricity consumption

Notes: figure shows a hypothetical baseline scenario (no efficiency program intervention) in PG&E territory. Home Entertainment includes DVDs, home theaters, and audio equipment; Personal Electronic Chargers only includes "maintenance" and "no load" modes; STBs includes cable and satellite boxes, DVRs, and IPTV; Small Office Equipment includes PCs, monitors, imaging equipment, and broadband equipment.

Exhibit A

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http://www.etcc-ca.com/database/download/ETCC_Report_370.pdf

http://www.etcc-ca.com/database/download/ETCC_Report_446.pdf


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on research with key retailers and original equipment manufacturers (OEM). The research found that the electronics market is dominated by companies that purchase and operate nationally and make decisions nationally. For these organizations, the key to success is having a largescale, unified, efficient program. To have a program that will impact what they promote and sell, utilities will need to offer them a program that could be multiproduct, statewide and ultimately national. Their organizations are very lean and need to have a single point of contact program – a single contact for account management and a single contact for data management.

The proposed Consumer Electronics and Plug Loads Program will provide Nevada Power with an innovative, costeffective, and viable approach to address these challenges and achieve energy savings in the residential and commercial sectors. The program is structured as a midstream and upstream incentive program because it is the most costeffective mechanism to capture a high volume of sales. A key reason for offering the incentive to retailers and OEMs is because they have direct connections to “downstream” enduse customers. Retailers can influence customer purchases by stocking more efficient products and by identifying those products to customers through instore signage and other marketing collateral. The retailers can also send signals “upstream” to supply chain vendors and manufactures by purchasing a larger percentage of high efficiency products. The goal is that these signals influence the manufactures to offer more qualified monitors at lower price points, thus spurring a market transformation.

In addition to internal program impacts, the program is expected to positively influence energy efficiency initiatives outside of the program scope. Establishing midstream and upstream incentives and supporting systems with the major retailers and OEMs establishes working relationships that may be expanded to either additional consumer electronics products or other services and products such as large appliances.

Supporting Savings Data The qualifying products and incentives will be based on ENERGY STAR® and other specifications, a product’s current level of market penetration, and the ability of a product to achieve energy savings. The initial qualifying products for the program include: 1) Televisions that exceed ENERGY STAR® requirements by at least 15%; 2) ENERGY STAR® 4.0 Computers; and 3) Computer monitors that exceed ENERGY STAR® requirements by at least 25%. The initial incentive levels ($/unit) for the respective products are $10.00, $5.00 and $4.00.


Exhibit A

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Rebates $247,996 $520,000 $532,000









Rebates $198,396 $416,000 $416,000





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Rebates $309,994 $652,000 $656,000





20102012 Program Execution Efficient and Cost Effective Upstream Incentives Implementing incentive programs that target upstream market participants is a cost efficient and effective strategy for affecting the consumer electronics market. Potentially, hundreds of thousands of qualifying electronics products will be sold in the Nevada Power territory during this program period. Handling downstream rebates would be prohibitively expensive and ineffective, as the proposed rebate amounts for electronics at $20 per unit are so small that there would be a high percentage of rebate breakage. This breakage, which is nonexecution of rebates, results not only because the rebate amount is small, but also because the amount is small relative to the purchase price of the product, for example, $20 on an $800 flat screen TV.

Qualifying Products

The qualifying products and incentives will be based on ENERGY STAR® and other specifications, a product’s current level of market penetration, and the ability of a product to achieve energy savings. The qualifying products for the California program included: 1) Televisions that exceed ENERGY STAR® requirements by at least 15%; 2) ENERGY STAR® 4.0 Computers; and 3) Computer monitors that exceed ENERGY STAR® requirements by at least 25%. Nevada Power will match with this program to achieve maximum efficiency and effectiveness.

Qualifying products and incentive levels will be modified, added or deleted from the program from time to time in response to market conditions in order to maximize program savings and to minimize the risk of freeridership. The implementation contractor will work with Nevada Power program staff to provide analysis and recommendations based on Nevada Power’s program requirements and goals.

Any modifications to qualifying product and incentive levels will be sent to participating retailers and OEMs in advance of the effective date in an effort to accommodate their planning and stocking decisions.

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Additional products that may be considered for the program include but are not limited to: cable and satellite boxes, thin client computers, servers, network power management, imaging equipment (printers, scanners, and fax machines), and game consoles.

Qualifying Sales

Qualifying sales will include retailer and OEM sales to eligible customers via the retailer’s store(s), internet sales, and telephone sales of qualifying products. Qualifying sales through retail stores will require that qualifying products be sold from retail stores located in zip codes in the service territories of Nevada Power. Qualifying sales through OEM direct sales via the OEM’s sales force, internet sales and telephone sales, and through resellers, will require that qualifying products be sold to eligible customers located in zip codes in the service territories of Nevada Power.

Implementation Plan

Contracting with an experienced electronics implementation contractor should accelerate Nevada Power’s entry into this market. Nevada Power plans to have work with the implementation contractor to coordinate working relationships and/or contracts with all the major retailers and OEMs.

Key milestones after program launch include:

• Ongoing incentive processing daily, as information enters the automated online system.

• Managing a technology roadmap to assess market data, efficiency developments, and sales rates to prioritize how and when to update or introduce new measures. The analysis process will be continual—updated or new measures would be introduced on an as needed basis.

• Ongoing savings assessment and customized reporting for Nevada Power. The online system will allow for realtime savings and sales volume assessments.

20102012 Program Management Plan The program management plan for the Consumer Electronics and Plug Load Program will include routine staff meetings with Nevada Power’s program management to track the status of tasks and goals. In addition, these staff meetings will identify specific issues that need attention in the coming weeks and tasks will be assigned to team members.

20102012 Data Delivery and Tracking Online Paperless Rebate Application

The implementation contractor will use a costeffective online system. An online application processing system has been popular with other utilities and in other DSM programs. These systems have a quick and easytouse interface with consistent reliability and also provide the benefit of having a transparent auditing trail.

The applicants, retailers and OEMs, can submit their data in two ways: 1) either by bulk file upload or 2) by Electronic Data Interchange (EDI) connection. For bulk file upload, retailers and OEMs will log into the online system and will upload their data. The system will validate the data to ensure that the appropriate initial conditions are met. EDI allows for the automated transfer of data between the retailer’s

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database and the online incentive processing system. Once the EDI connection is made with a retailer, their system will automatically transfer the necessary information on qualifying product sales to the online system and they will move through the process.

The implementation contractor will work with Nevada Power staff to determine how the system will connect to the utilities’ application processing systems. The system has the capability to have a direct, automated connection with Nevada Power’s processing system. In addition, the online system will include reporting and charting functionality for Nevada Power’s program managers to track key metrics such as energy savings, incentive allocations, and others.

Savings Verification Plan The implementation contractor will work with the Nevada Power program manager to determine the most appropriate tracking mechanisms to ensure real ongoing savings. All incentive strategies to be deployed by the program will hedge against the expost EM&V risks inherent to electronics incentive programs. The strategy will include closely tracking the qualifying product market share and adjusting incentive levels appropriately from time to time in order to maximize program savings and to minimize the risk of freeridership. Evaluation protocols have been developed in California and similar principles can be applied in Nevada Power territories as appropriate.

Strategies being employed include, but are not limited to the following: 1) for each qualifying product, retailer or OEM shall provide the ratio of qualifying sales to total product sales in the category of the qualifying product prior to and during the program. This aggregated sales data shall indicate the geographic areas in which both pre and post program sales were made and shall include sales for twelve months prior to the promotion period and during each month of the promotion period, and 2) For each qualifying product, retailer or OEM shall provide the ratio of qualifying sales to total product sales in the category of the qualifying product for territories of each participating utility and for territories other than those of the participating utility during the same time period. The specified sales data shall cover the entire promotion period of each qualifying product.

Qualifying sales will include retailer and OEM sales to eligible customers via the retailer’s store(s), internet sales, and telephone sales of qualifying products. Qualifying sales through retail stores will require that qualifying products be sold from retail stores located in zip codes in the Nevada Power service territories. Qualifying sales through OEM direct sales via the OEM’s sales force, internet sales and telephone sales, and through resellers, will require that qualifying products be sold to eligible customers located in zip codes in the Nevada Power service territories.

Due to the hundreds of thousands of individual customer sales transactions and number of expected participating retailers, a streamlined, paperless online incentive process system that integrates seamlessly with each unique retailer and OEM data system is key to successfully engaging the retailers and OEMs, as well as ensuring costeffective program operations. The system automates incentive processing, starting with either a file upload from the applicant or a direct Electronic Data Interchange (EDI) connection. The database then validates the imported data, sends the completed applications for approval and batches them for payment by the utility.

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M&V Plan

M&V Objective The measurement and verification (M&V) objective will be to quantify the energy savings and demand reductions resulting from the Consumer Electronics and Plug Loads Program.

Approach The utility’s EM&V contractor will work closely with Nevada Power to assess and confirm the effects of the Consumer Electronics and Plug Loads Program. The EM&V Contractor will prepare a program specific M&V Plan to guide this work. This plan will include approaches for quantifying customer energy savings from the equipment that will be promoted through the program.

The M&V approach for the Consumer Electronics and Plug Loads Program is aimed at the following:

• Verifying how many qualifying units have been shipped to Nevada Power’s service area;

• Identifying industry standard data that determines the energy consumption by qualified units in comparison to standard units being replaced; and

• Determining resulting total program energy savings.

The implementation contractor for the Consumer Electronics and Plug Loads Program has developed a tracking system. This Program Tracking System (PTS), which is based on tracking by ZIP code, is the primary datatracking tool for the program, which the EM&V contractor will access for performing the verification of the numbers of qualifying units shipped into Nevada Power’s service territory. The PTS provides data on participation in the program by tying data on product shipped by OEMs or by power supply manufacturers to the ZIP codes within Nevada Power’s service territory. Using data from the PTS, the EM&V contractor will determine the shipments that have been made of qualifying equipment.

The EM&V contractor will determine the per unit energy savings for qualifying equipment by using information on product brand and model numbers collected by the implementation contactor to verify the type, energy savings and life (hours), according to specifications provided on the ENERGY STAR® website (http://www.energystar.gov/) and/or on vendor/brand packaging specifications.


Sample Selection The EM&V Contractor will calculate the sample sizes required to estimate the total achieved savings with 10% precision at 90% confidence.

Onsite Surveys and Verification No onsite surveys and verification will be required for this program.

M&V Data Store The Nevada DSM M&V Data Store Web Portal, referred to as “Data Store”, is a web portal that has been customized for both Nevada Power Company’s and Sierra Pacific Power Company’s internal use. Its

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function is to track Demand Side Management program performance. Nevada Power uses this management and tracking tool throughout the year to ensure that the planned investments provide clear value. The Data Store also supports the evaluation, measurement, and verification activities by providing the data needed for sample selection and verification of savings data.


Cost Benefit Analysis The Consumer Electronics and Plug Loads incentives are designed to facilitate the acceptance energy efficient electronics by residential and commercial customers.

Freeridership The freeridership for this program is 27.2% as provided by PA consulting.

Input Data, Description of Sources, and Results of Financial Analysis A copy of the input data sheets and financial models are provided as Technical Appendix Item DSM2. These figures were all calculated based upon the information contained in this program data sheet and the materials referenced herein. The following tables summarize the results of the financial analysis for all three scenarios.



Total Resource 2.43 $5,399,327 $2,217,691 $3,181,636 $0.03

Utility 2.19 $5,731,117 $2,620,733 $3,110,384 $0.03

Participant $8,712,153 ($580,888) $9,293,041 ($0.01)

Ratepayer 0.46 $5,399,327 $11,664,675 ($6,265,349) $0.13

Societal cost 2.82 $6,253,923 $2,217,691 $4,036,232 $0.03



Total Resource 2.41 $4,273,776 $1,771,864 $2,501,912 $0.03

Utility 2.16 $4,539,641 $2,097,810 $2,441,831 $0.03

Participant $6,893,632 ($468,456) $7,362,088 ($0.01)

Ratepayer 0.46 $4,273,776 $9,257,307 ($4,983,531) $0.13

Societal cost 2.79 $4,949,989 $1,771,864 $3,178,125 $0.03

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Total Resource 2.43 $6,707,918 $2,764,184 $3,943,734 $0.03

Utility 2.18 $7,122,186 $3,273,486 $3,848,701 $0.03

Participant $10,823,605 ($731,357) $11,554,962 ($0.01)

Ratepayer 0.46 $6,707,918 $14,511,359 ($7,803,441) $0.13

Societal cost 2.81 $7,769,631 $2,764,184 $5,005,447 $0.03



Total Costs $742,005 $2,866,005


Energy Benefits ($) $80,216 $5,640,377





Total Costs $594,004 $2,294,004


Energy Benefits ($) $64,173 $4,466,641



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Total Costs $924,993 $3,580,083


Energy Benefits ($) $100,264 $7,009,464












Section E: Supporting Documentation M&V Report for 2008 is provided as Technical Appendix Item # DSM27.

Exhibit A

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Nevada Power Company Energy Plus New Homes

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Energy Plus New Homes January 2010

Exhibit A

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Section C: Proposed 20102012 Program ......................................................................................8 Rationale and Supporting Data ............................................................................................... 10 Supporting Savings Data ....................................................................................................... 10 20102012 Program Execution ............................................................................................... 12 20102012 Program Management Plan .................................................................................... 12 20102012 Data Delivery and Tracking ................................................................................... 13 M&V Plan ........................................................................................................................... 13



List of Tables Table 1: Results, Program Year 2008........................................................................................................................... 4 Table 2: Builder Applicants ....................................................................................................................................... 5 Table 3: Targets and Budgets, Program Year 2009......................................................................................................... 7 Table 4a: Base, Low, High Budgets, Program Year 20102012 ........................................................................................ 9 Table 4b: Base, Low, High Targets, Program Year 20102012......................................................................................... 9 Table 5a: Base Scenario Proposed Targets and Budgets, Program Years 20102012 ............................................................ 9 Table 5b: Low Scenario Proposed Targets and Budgets, Program Years 20102012 .......................................................... 10 Table 5c: High Scenario Proposed Targets and Budgets, Program Years 20102012.......................................................... 10 Table 6a: Base Scenario Program Budget by Category, Program Years 20102012.......................................................... 11 Table 6b: Low Scenario Program Budget by Category, Program Years 20102012.......................................................... 11 Table 6c: High Scenario Program Budget by Category, Program Years 20102012 .......................................................... 12 Table 7a: Base Scenario Cost Test Results 20102012................................................................................................... 14 Table 7b: Low Scenario Cost Test Results 20102012 ................................................................................................... 15 Table 7c: High Scenario Cost Test Results 20102012................................................................................................... 15 Table 8a: Base Scenario Utility Economic Evaluation ................................................................................................... 15 Table 8b: Low Scenario Utility Economic Evaluation ................................................................................................... 16 Table 8c: High Scenario Utility Economic Evaluation ................................................................................................... 16


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• Program Name: Energy Plus New Homes

• Program Status: Existing


• Primary Contractor(s): Energy Inspectors

• 2009 Budget: $2,379,000

• Proposed Budget: 2010: 2011: 2012:

Low $ 1,077,000 $ 1,360,000 $ 1,544,000

Base $ 1,346,000 $ 1,700,000 $ 1,930,000

High $ 1,683,000 $ 2,125,000 $ 2,413,000


Base 1.31

High 1.31

Program Summary The Energy Plus New Homes Program is designed to significantly increase energy efficiency in new home construction in southern Nevada. The ultimate goal of this program is to move the efficiency of new homes well beyond the requirements for ENERGY STAR® New Homes. This program will provide assistance and incentives to builders to construct homes that exceed ENERGY STAR® New Homes energy savings by at least 15%. Rather than solely paying cash incentives, this program will be expanded in the 20102012 action plan period to be more of a market transformation program. Additional emphasis will be focused on reducing multiple barriers to this higher level of construction standard. The program has been successful in recruiting builder participants and now will also expand its focus to homebuyer education. Creative and innovative marketing techniques are being considered, including MySpace and Facebook. These outreach efforts have been found to be effective in marketing other products and require a minimal financial investment.

In addition to increasing the marketing effort, the program will work closer with builders to help those builders that are right on the edge of meeting the program requirements and those that are aggressively seeking new and innovative ways to economically incorporate more energy savings in the new homes they are constructing. The program will investigate various solutions including modification of the rebate structure or providing various levels of nonfinancial incentives.

The overall goal of the program is to encourage a transformation in housing by incorporating more energy efficient materials and techniques in the production home construction process to build more energy efficient homes. This program will be linked with the Advanced Building Techniques Program and is complementary to that program. The Advance Building Technique Program will be working to develop the incorporation of new energy efficiency measures in new home construction with a target of reducing energy consumption by 60% below that allowed by the current building code. This program will target moving those advances in energy efficiency in construction techniques and materials into the production builder processes to enable and encourage builders to move to 30% or better energy savings as compared to code. Combined, these programs can provide the home builder and buyer with more options and flexibility for extremely energy efficient new homes.

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Section A: 2008 Program Results In 2008, Nevada Power provided rebates for 419 new homes that were constructed at least 30% more efficient than required by code. The program was announced informally to the building community in July 2008 and a formal meeting was held in September 2008. To integrate the installation of new energy efficient materials in the production home process the building plans must be changed before construction begins. By informally announcing the program’s launch, the builders were able to begin the process of renegotiating contracts with both suppliers and the trades to meet the requirements of the program. In 2008, seven builders were approved for participation in the program. Of these seven, three were able to construct homes built to the program’s specification before the end of 2008. Those three builders were Astoria Homes, Pulte Homes, and Storybook Homes.

Although the program got off to a slow start, momentum began to build at the end of 2008 as an influx of new applications were submitted for review.



Budget, Total Program $1,892,000 $690,102 36.5%

No. of Installed Measures 1,250 419 33.5%

Demand Savings (kW) 1,343 721 53.7%


TRC 1.22 1.74 142.6%

2008 Analysis Due to a depressed housing market causing a steep reduction in housing demand, the program faced a difficult challenge of gaining the originally anticipated program participation. Despite the challenges, the program managed to gain strong momentum. One of the main achievements of the program in 2008 was the progress made in developing a brand for the Nevada Power Energy Plus New Homes Program. In 2008, Nevada Power engaged over 20 prospective builders. Two of these builders, American West Homes and Richmond American, were previously not ENERGY STAR® certified. The program encouraged these builders not only to improve their energy efficiency but come on board at 30% opposed to the 15% required by ENERGY STAR®.

Exhibit A

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Table 2 provides a list of the builders that have submitted applications for program participation.

Table 2: Builder Applicants

American West Homes Astoria Homes Blue Heron Centex Homes Desert Wind Homes KB Homes Pulte Homes Richmond American Homes Ryland Homes StoryBook Homes

Market Assessment During the second half of 2008, the economy faced a drastic economic decline nationwide. In addition to other factors, one major contributing factor to this economic decline was the virtual collapse of the mortgage lending industry and banking system. Many homeowners found themselves in situations in which they could no longer afford the payments on their homes, resulting in many of these properties falling into foreclosure. This caused two major problems that affected this program:

1. The foreclosure rate caused the banks to attempt to quickly unload risky loans; which, restricted their liquidity, lending ability, and sustainability.

2. With increased foreclosures, the value of residential properties in the southern Nevada area drastically decreased.

With the increased foreclosure rates, decreased property values, and lending institutions burdened by a rapidly increasing portfolio of bad loans, the lending industry tightened their lending requirements making it harder for builders and buyers alike to attain loans for the building and buying of new homes. Nevada has been particularly hard hit, having a rate of foreclosures among the highest in the nation.

The high number of foreclosures has had a significant impact on the program’s success in achieving targeted energy savings. The economic decline was evident early in 2008 and became critical half way through the third quarter and throughout the fourth quarter, which roughly coincided with the program launch. This program is designed around new homes in a market that has shifted focus to explore remodels and retrofitting of older homes, primarily foreclosures. To meet this challenge, the Energy Plus New Homes Program has developed a strategy to position itself for eventual market recovery. As the market rebounds, this program will have set a strong foundation within the new home community as a quality brand and something to be asked for when a potential buyer is shopping for a new home.

Program Design This program was launched at a time when builders were struggling to remain in business and were looking for ways to differentiate their homes from the rest of the market. The Energy Plus New Homes Program provided branding assistance to help create a premium brand for builders. The program will

Exhibit A

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continue to use the marketing model as an advantage to recruit additional participants. The goal is to create a demand of homes at a high level of efficiency. At some point, homebuyers will expect this level of construction (as they have with ENERGY STAR®) and the program will realize one of the major goals, which is to stimulate market transformation to markedly more efficient homes.

M&V Results The M&V report completed by Paragon Consulting validated the energy savings that were claimed by the implementation contractor. Paragon reviewed the ex ante estimated energy savings and agreed 100% with the values. Another review subsequent to the receipt of the report revealed that there was more appropriate estimated savings number to use in the modeling software. The figure reduces the savings from the Paragon report by 25%. The utility feels that this estimate more accurately reflects the true consumptions savings of a homebuyer that purchases an Energy Plus home over the average ENERGY STAR® home. This reduced figure will be used in future estimates.

2008 Lessons Learned § Market Assessment – Until the market rebounds from the current crisis, it may be difficult for

participating builders to participate at a level required to meet Nevada Power’s program goals as originally designed. The program must reassess these goals to be in line with market conditions.

§ Foreclosures – New construction cannot compete with foreclosures simply based on price per square foot. However, if potential homebuyers could see that purchasing a foreclosed home will cost them more over time both in energy costs and comfort, the playing field is leveled somewhat. The only way to make this happen is to educate them with a tool that can compare these two homes. The program is investigating the Department of Energy’s EnergySmart Home Scale rating scale. This scale functions similarly to a miles per gallon rating for homes. Homebuyers would be able to compare the efficiency of new homes and homes available for resale.

§ Energy Plus is a whole house program that has a role in all of the programs that have an impact on residential new construction. To maximize the benefits of not only this program but others, close relationships between program managers and implementation contractors is crucial to program success.

§ The building industry is close knit community with all players being well informed of actions taken by all parties involved. This has worked both favorably and unfavorably for the company. Once a few major builders get involved in the program other builders tend to follow suit. They understand that they do not want to give a competitor an advantage.

Detailed information for performance of this program for 2008 is provided in the 2009 Annual DSM Update Report provided as Exhibit B.

Section B: 2009 Program The 2009 program will concentrate efforts on providing builder support, both technical and marketing. The following program improvements are planned for 2009:

• Better communication tools will be created. As the program expands with dozens of builder participants, reasonable expectations will be set initially to minimize extraneous communication.

• A webbased standardized document submittal format will be developed to increase the efficiency and effectiveness of the application process.

Exhibit A

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• The program will be marketed more aggressively to custom and lowincome housing developers.

• The program will include multifamily dwellings up to 3 stories.

• An aggressive education campaign for homebuyers will be developed and delivered.

• Synergies with other programs that play a significant role in introducing energy efficiency in the residential new construction market will be leveraged. These programs include High Efficiency AC, CoolShare (ACLM), and the proposed Advanced Energy Techniques Program.

• The program will capitalize on current tax benefits. The Emergency Economic Stabilization Act of 2008 extended the tax credit of $2,000 for homes that are constructed such that the heating and cooling energy consumption is at least fifty percent below that of the comparable unit constructed in accordance with the 2004 Supplement to the 2003 International Energy Conservation Code (IECC 2003). This tax credit is effective until December 31, 2009.

Table 3 provides the budget and targets for 2009.


Total Energy Plus New Homes





2009 Program Execution The 2009 program goal is to recruit additional participants to construct 1,750 homes that achieve energy savings of 30% or greater as compared to a home built to comply with code requirements. The program execution will deviate from the implementation plan of 2008 to address lessons learned.

The 2009 program will have one primary contractor, Energy Inspectors and two additional contractors with specific task roles, Sierra Building Science and Energy Solutions. Energy Inspectors will continue to provide consulting services to Nevada Power as an industry expert in the Home Energy Rating System (HERS®) ratings and energy efficiency analysis. The program, with Energy Inspectors assistance, provides initial energy efficiency analysis to potential participants in the program to make decisions on what upgrades need to be made to satisfy program requirements. This alleviates the barrier of modeling costs that many builders will not invest in prior to knowing if or how they can qualify for the program. Builders then take these upgrades back to their internal purchasing departments to conduct costbenefit analysis. At this point negotiations begin between the builder and their distributers and contractors to tie down the actual costs and integrate the energy efficiency improvements in the construction processes.

Energy Inspectors will continue to support educational events and trade shows to educate potential homebuyers regarding the benefits of the Energy Plus New Homes Program. Energy Inspectors are also responsible for development and implementation of the marketing plan.

Exhibit A

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Sierra Building Science is a well respected provider of energy efficiency training and consulting services in California. Sierra Building Science is providing quality assurance (QA) services to Nevada Power. They are serving as a third party verification company that reviews the reports provided by all HERS® raters participating in the program. Sierra Building Science also does field audits of a percentage of all participating builders and HERS® raters.

Energy Solutions provides turnkey online application and data management solutions. The volume of information that is required for participating in this program has the potential to slow down the administrative process. The potential result of this manual administrative burden would be inaccuracy in the data, delayed responses to builder inquiry, and the delayed ability to provide rebates to builders in a reasonable timeframe on homes constructed. This automation solution will provide an online application and data tracking system in which all parties including the builder, Nevada Power, and contractors have access to essentially real time information, while the data is securely managed in a database. This information will be able to be quickly transferred to the Data Store for review and analysis for measurement and verification purposes.

Data and results related to the 2009 Energy Plus New Homes Program will be gathered through the online data management system. Data will include number of homes built, incentive dollars, and HERS® ratings information. Builders will have access to data relating to their projects via the online application system. This information will also be available to the utility and for evaluation, management and reporting as needed.

2009 Results to Date Nevada Power has processed nearly 200 rebates to date. In addition, the program has reviewed over 300 plans for initial program review and has received dozens of applications for formal approval. The number of plan reviews demonstrates that the program has the potential to see a dramatic increase in Energy Plus homes completed before the end of the year.

In addition to increased builder participation, the marketing effort to potential homebuyers has increased. Marketing collateral targeting homebuyers is being developed and seminars are being finalized to take energy education out to the neighborhoods.

Section C: Proposed 20102012 Program In the 20102012 action plan period the Energy Plus New Homes Program is setting its goals in consideration of the expected sluggish rebound of the housing market. A number of sources suggest that the housing market will stabilize in 2010. If so, the program could see an increase in the number of participating homes being completed by its builder participants in 2011 and 2012. As housing production levels increase, Nevada Power’s participation may be able to be decreased due to economies of scale. Currently many of the energy efficiency techniques and materials are relatively expensive compared to the energy benefit. As the trades become more accustomed to these building techniques, the related labor hours will be reduced not only because they will become more proficient but there will be greater supply of trained workers. In addition, many builders currently struggle with costs of some supplies partially due to the low volume. Radiant barrier is an example of a builder material that has a proven positive impact on the overall home performance but is priced very high by distributors. As the demand increases, it is expected that production will ramp up and the costs for radiant barriers will come down. The incentive design will be modified as warranted by actual market conditions with any of decreased incentive redirects to marketing and homebuyer education and providing incentives for additional units.

Exhibit A

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The ability of the program to achieve the goals of the base, low, and high scenarios is dependent on when and how strong the rebound is from current market conditions. It is also dependent on how builders respond to the housing market. Many southern Nevada builders have exited the market, have sold much of their vacant lots, and undeveloped land is being held by banking institutions. It will take some time for builders to recover from this crisis. Infrastructure is in progress for several years before home construction begins.

An overview of the proposed budgets and targets at the base, low and high scenarios for this program are presented in Table 4a and Table 4b. Program details by scenario are provided in Tables 5a, 5b, and 5c.

Table 4a: Base, Low, High Budgets, Program Year 20102012

Scenario Budget

TRC 2010 2011 2012

Base $1,346,000 $1,700,000 $1,930,000 1.31

Low $1,077,000 $1,360,000 $1,544,000 1.31

High $1,683,000 $2,125,000 $2,413,000 1.31

Table 4b: Base, Low, High Targets, Program Year 20102012


2010 2011 2012 2010 2011 2012

Base 2,089,640 2,623,464 2,983,795 941 1,181 1,343

Low 1,671,712 2,098,420 2,388,160 753 945 1,076

High 2,612,928 3,280,208 3,729,744 1,178 1,478 1,681


Total Program – Base Scenario 2010 2011 2012 Budget, Total Program $1,346,000 $1,700,000 $1,930,000 No. of Installed Measures 1,190 1,494 2,124 Demand Savings (kW) 941 1,181 1,343 Energy Savings (kWh) 2,089,640 2,623,464 2,983,795

Exhibit A

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Total Program – Low Scenario 2010 2011 2012 Budget, Total Program $1,077,000 $1,360,000 $1,544,000 No. of Installed Measures 952 1,195 1,700 Demand Savings (kW) 753 945 1,076 Energy Savings (kWh) 1,671,712 2,098,420 2,388,160


Total Program – High Scenario 2010 2011 2012 Budget, Total Program $1,683,000 $2,125,000 $2,413,000 No. of Installed Measures 1,488 1,868 2,655 Demand Savings (kW) 1,178 1,478 1,681 Energy Savings (kWh) 2,612,928 3,280,208 3,729,744

Rationale and Supporting Data The most opportune time to capture a minimum cost for effective energy efficiency measures is prior to design of the home. For home owners the incremental costs to implement energy efficiency measures can be included in the price of the home and in the underlying loan. Energy efficiency measures installed when a home is constructed are less expensive than a similar retrofit measure. The Energy Efficiency Mortgage (EEM) is gaining momentum in the industry. According to the Environmental Protection Agency (EPA), an EEM is a mortgage that credits a home’s energy efficiency in the determining loan eligibility. This allows the borrower to stretch their debttoincome qualifying ratios on loans, thereby allowing borrowers to qualify for a larger loan amount and a better, more energyefficient home. The ability for a homebuyer to qualify for this type of loan has a direct benefit to the homebuilder and may entice them to build to a standard, such as Energy Plus New Homes, that qualifies for this unique mortgage.

Nevada Power has also learned that ENERGY STAR® anticipates the launch of a more aggressive ENERGY STAR® requirement in 2011. This program will maintain a required level of energy savings that is more stringent than the ENERGY STAR® requirement.

Supporting Savings Data The Residential Energy Analysis and Rating Software (REM/Rate), a building conservation measure modeling tool, developed by the Architectural Energy Corporation located in Boulder, Colorado, was employed to measure the energy savings figures pursuit to this program. REM/Rate is a nationally recognized energy modeling tool currently being used by RESNET, the agency that provides oversight for the Home Energy Rating System®. This tool is used by ENERGY STAR® to certify ENERGY STAR® homes, is recognized as an acceptable tool for certification for the Federal Tax Credit, and is recognized by Freddie Mac as an acceptable energy efficiency validation tool to qualify for Energy Efficient

Exhibit A

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Mortgages. Market research and surveys of area distributors provide regional incremental cost information.





$50,000 $75,000 $100,000

Implementation $238,788 $296,386 $319,358

Rebates $881,647 $1,106,875 $1,258,903







$40,000 $60,000 $80,000

Implementation $191,204 $237,257 $255,012

Measurement and Verification $705,318 $885,352 $1,007,597




Exhibit A

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12



Marketing and Advertising $62,500 $93,750 $125,000


Rebates $1,102,429 $1,383,964 $1,573,629




20102012 Program Execution The program will continue to work with builders to provide technical support, marketing assistance, and cash incentives. Builders will work with HERS® raters to verify the energy savings as modeled in their homes. HERS® raters will act as a sales force for this program to educate and persuade builders to build beyond the ENERGY STAR® standard to meet the requirements of this program. The HERS® rater receives a benefit for this program as additional work provided through the program for their services.

The utility will develop messages and materials to educate potential homebuyers on the overall lower costs of buying a home that earns a rating of Energy Plus. Graphic depictions will be developed to illustrate that the increased cost of construction to meet the higher standard could potentially be financed through the home buyer’s mortgage. The higher mortgage payments would be more than offset by lower utility costs resulting in a net savings to the home buyer. This cost proposition is strengthened if the homebuyer can take part in the Energy Efficient Mortgage (EEM) opportunity that is now being offered.

The Residential New Construction Program will improve the level of energy efficient construction and, through performance based testing and third party verification, ensure that savings are being achieved. The combination of equipment, technologies, and building design features will determine the efficiency level of each home design. Builders will be able to choose any combination of measures that meet the 30% savings (as compared to code) required by the program, as well as including added measures to earn additional cash incentives for savings above 30%. Approaches to meet this energy savings threshold are likely to include; higher efficiency air conditioning and heating equipment, increased insulation levels, attic radiant barriers, bettersealed ductwork, and ENERGY STAR® appliances and lighting fixtures.

20102012 Program Management Plan Nevada Power will issue a Request for Proposals (RFP) in 2009 for the 20102012 delivery of this program. This program will be bid as a package with the proposed Advanced Building Techniques Program. The bidders will be invited to bid on one or both programs. This program has the ability to be a staging ground for builders that are ready for taking the next step for energy efficiency, while nurturing those builders that are embarking on energy efficiency for the first time. The program manager will be

Exhibit A

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responsible for the day to day oversight of the implementation contractor. As noted previously the program is currently being managed by multiple contractors. One goal of the RFP process will be to have one contractor manage the delivery of the program.

20102012 Data Delivery and Tracking Data and results related to the 20102012 Energy Plus New Homes Program will be gathered through the online data management system. Data will include number of homes built, incentive dollars, and HERS® ratings information. Builders will have access to the data regarding their projects via the online application system. This information will also be available to the utility for management and reporting as needed. Pertinent data will be stored in the data store.

M&V Plan

M&V Objective The Nevada Power EM&V Contractor will perform measurement and verification (M&V) activities to confirm the savings being realized through the Energy Plus New Homes Program being implemented in Southern Nevada.

Approach The EM&V Contractor will use program records to develop preliminary information needed for the analysis of savings from participant dwelling units. Thus, the M&V approach for the Energy Plus New Homes Program will begin with a review of the data in the Data Store tracking system for the program. The EM&V Contractor will need to identify data sources, establish key contacts for applicable data sets at Nevada Power, and develop an understanding of database formats and coverage. The EM&V Contractor will examine the program forms, databases, and reports as well as billing system data, weather data, and any other potentially useful data.

Sample Selection Sampling for collecting program M&V data may be complicated because the M&V effort will occur in real time while the program is being implemented and a complete sampling frame is not yet available. Program participants will accumulate over time as the program is implemented. For this reason, a systematic sampling approach will be used to select sample sites as program implementation proceeds. Sample selection is thus spread over the entire implementation period. The sample design to be used for selecting programs allows estimates of savings to be determined with ±10% precision at the 90% confidence level for the program.

Onsite Surveys and Verifications In addition to collecting data on houses, the EM&V Contractor will survey samples of homebuilders, including not only participant builders but also nonparticipating builders. For both participant and non participant builders, the EM&V Contractor will use the survey to collect information on builders' standard construction practices, their awareness of and reasons for participating or not participating in the Energy Plus New Homes Program and the influence of the program on their building practices, etc.

Exhibit A

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M&V Analysis Methods The EM&V Contractor will determine the gross savings impacts for the sample of Energy Plus New Homes using complementary analytical methodologies (e.g., econometric analysis and engineering analysis) and alternative types of data on energy use (e.g., billing data and engineering estimates). Where appropriate, the EM&V Contractor may also use data collected through monitoring.

M&V Data Store The Data Store, is a web portal that has been customized for both Nevada Power Company’s and Sierra Pacific Power Company’s internal use. The function of this portal is to track Demand Side Management (DSM) program performance. The Data Store supports the evaluation, measurement, and verification activities by providing the data needed for sample selection and verification of savings data. The Data Store is “populated” with data provided by the implementation contractor on a monthly basis.


Cost Benefit Analysis The cost/benefit analysis for this program was performed utilizing the PortfolioPro financial modeling software created by the Cadmus Group for Nevada Power and Sierra Pacific. This comprehensive modeling software utilizes a stream of avoided costs broken down by each of the 8,760 hours for each year of the useful life of a measure.


Input Data, Description of Sources, and Results of Financial Analysis A copy of the input data sheets and financial models are provided as Technical Appendix Item DSM2. The following economic analysis figures were all calculated based upon the information contained in this program data sheet and the materials referenced herein. The following tables summarize the results of the financial analysis for all three scenarios.



Total Resource 1.31 $8,532,275 $6,518,540 $2,013,734 $0.06

Utility 1.96 $8,937,721 $4,548,693 $4,389,028 $0.04

Participant 5.48 $8,199,994 $1,496,941 $6,703,052 $0.01

Ratepayer 0.59 $8,059,466 $13,626,941 ($5,567,475) $0.13

Societal cost 1.43 $9,336,632 $6,518,540 $2,818,092 $0.06

Exhibit A

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15



Total Resource 1.31 $6,826,801 $5,215,186 $1,611,615 $0.06

Utility 1.97 $7,151,143 $3,639,153 $3,511,990 $0.04

Participant 5.48 $6,560,813 $1,197,687 $5,363,126 $0.01

Ratepayer 0.59 $6,448,501 $10,902,608 ($4,454,107) $0.13

Societal cost 1.43 $7,470,367 $5,215,186 $2,255,181 $0.06



Total Resource 1.31 $10,667,187 $8,149,554 $2,517,633 $0.06

Utility 1.96 $11,174,069 $5,686,790 $5,487,279 $0.04

Participant 5.48 $10,251,882 $1,871,536 $8,380,346 $0.01

Ratepayer 0.59 $10,076,073 $17,036,668 ($6,960,595) $0.13

Societal cost 1.43 $11,672,819 $8,149,554 $3,523,264 $0.06



Total Costs $1,346,000 $4,975,992


Energy Benefits ($) $72,737 $7,926,216



Exhibit A

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Total Costs $1,077,000 $3,980,992


Energy Benefits ($) $58,190 $6,341,908





Total Costs $1,683,000 $6,220,990


Energy Benefits ($) $90,952 $9,909,454












Exhibit A

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Exhibit A

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Exhibit A

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Nevada Power Company In Home Displays January 2010

1

Nevada Power Company Program Data Sheet In Home Displays

January 2010

Exhibit A

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2



Section B: 2009 Market Trial .......................................................................................................7 2009 Market Trial Execution.................................................................................................... 7 2009 Results to Date ............................................................................................................... 8

Section C: Proposed 20102012 Program ......................................................................................8 Rationale and Supporting Data ................................................................................................. 9 Supporting Savings Data ....................................................................................................... 10 20102012 Program Execution ............................................................................................... 10 20102012 Program Management Plan .................................................................................... 11 20102012 Data Delivery and Tracking ................................................................................... 11 M&V Plan ........................................................................................................................... 11

Section D: Program Economic Evaluation ..................................................................................12 Cost Benefit Analysis ............................................................................................................ 12 Freeridership ........................................................................................................................ 12


List of Tables Table 1: Results, Program Year 2008........................................................................................................................... 4 Table 2: Targets and Budgets, 2009 Market Trial........................................................................................................... 7 Table 3: Base, Low, High Budgets, Market Trial Years 20102012................................................................................... 9 Table 4: Base, Low, High Targets, Market Trial Years 20102012.................................................................................... 9


Exhibit A

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3


• Program Name: In Home Display


• Program Manager: Michael Brown


• 2009 Budget: $1,000,000

• Proposed Budget: 2010: 2011: 2012:

Low $ 150,000 $ 0 $ 0

Base $ 150,000 $ 0 $ 0

High $ 150,000 $ 0 $ 0

• TRC B/C Ratios: Low N/A

Base N/A

High N/A

Program Summary In Home Displays (IHDs) expand the use in Nevada of household energy management technology. IHDs are countertop, wallmounted, or plug in devices which provide consumers with realtime information about energy usage, pricing, and costs. Unlike home thermostats (which are designed for direct control of heating, ventilating, and air conditioning systems) and home computers (which are designed to provide online access to information), IHDs are designed for information display. By catching the attention of energy users, and indicating the expense of energy use, IHDs motivate energy users to take immediate action to reduce their energy consumption. In effect, the IHD provides the consumer a primary tool to actually take control of their energy behaviors and usage.

Nevada Power will begin the deployment of IHDs as a measure under the Demand Response program in the 20102012 Action plan period. To date, customer research conducted by Nevada Power has concentrated on learning how customers respond to these devices and what features customers find attractive and useful. Work is in progress in 2009 to gain additional experience with the operations and economics of a full scale IHD program and to better quantify energy savings. In the 20102012 action plan period, the scope will be expanded to include not only deployment of standalone devices, but will seize the opportunity to collaborate with other initiatives within the utility, such as the evaluation of enhanced pricing strategies, the meter data management system, and initiatives that deploy smart metering technologies. These initiatives in aggregate may install more than 100,000 advanced meters during the action plan period.

IHDs have the potential to provide benefits for customers and Nevada Power that extends beyond energy savings. Nevada Power is proposing a pilot to study the magnitude of potential benefits that might be accrued through the implementation of alternative rate pricing strategies such as critical peak pricing through the Demand Response program. The IHDs will be an essential contributor to any such program. In addition, the IHD provides the information that can significantly increase the opportunity of a customer to leverage the savings opportunities inherent in a timeofuse rate schedule.

Exhibit A

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4

Section A: 2008 Program Results In 2008, Nevada Power completed the initial market test and research regarding In Home Displays (IHDs) that was initiated in 2007. The first phase of this market test consisted of analysis and market research aimed at identifying how customers respond to IHDs and what features they found useful and desirable. The market test fielded five different devices. These five IHDs were all firstgeneration products with different features and functions. A first generation device can only communicate in one direction. This means the devices are unable to communicate with metering systems to receive additional information beyond energy usage. Such additional information can include pricing data such as dynamic pricing signals or notifications of demand response events. The installations of many of these first generation devices must be installed by a qualified electrical contractor and in some cases require construction permits which would add significant complexity and cost. With the first generation selfinstalled device, there was uncertainty behind whether the device was installed correctly.

The initial market test was delayed and not completed in 2007. The market test continued until July 2008 to capture the savings potential of these devices during the summer months. The result of this extended initial market test was that the start of the extended market trial that was planned for 2008 was delayed into 2009. All expenditures for the 2008 market test were funded through the Market and Technology Trial program.



Budget, Total Program $1,000,000 0 ($1,000,000)

No. of Installed Measures 2,000 0 (2,000)

Demand Savings (kW) 382 0 (382)

Energy Savings (kWh) 2,314,560 0 (2,314,560)

2008 Analysis In 2008, Nevada Power completed the initial market test and research regarding IHDs. In addition to analyzing energy savings, the market test conducted research to describe the residential customer experience, identify features and functions residential customers prefer, and indicated customer satisfaction. The market test was continued into the summer of 2008 and therefore the 2008 portion of the next phase of the market trial was pushed into 2009. The 2008 results provided in Table 1 therefore reflect this market test delay and show no expenditures or energy savings. The following summarizes some of the lessons learned through the phase I market test.

Installation Issues § Circuit Breaker Panel access

Exhibit A

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5

Two devices required installation of current transformers on the main electrical feed within the circuit breaker panel. Many of these panels had insufficient depth for placement of the clamps resulting in many customers that were originally slotted for these devices to have an alternative device installed or be dropped from the test entirely.

§ Electrician requirements

An electrician is required for the installation of three of the devices due to the fact that work is accomplished with or in the presence of energized conductors. This caused installation delays due to scheduling requirements and additional expenses.

§ Connection to the meter

Some devices such as the Blueline, requires a sensor be attached to the meter and in the case of the ECSI, the device was installed behind the meter. The Blueline is a selfinstall sensor that requires appropriate placement and is battery powered. It was difficult for Nevada Power to determine if the device was installed and also if the device was installed correctly. Also, once the battery died in the sensor or the device within the home, the systems no longer provide energy usage or pricing information. A number of participants became frustrated with battery replacements and loss of synchronization.

One device must be installed between the meter and the meter socket which requires the presence of utility personnel at the time of installation.

§ Permits requirements

Several jurisdictions specified that permits would be required where there was work around live uninsulated conductors.

Customer Preferences § Participants had clear functional preferences:

• Participants wanted a device that accurately measured their costs and the amount of electricity used. They wanted these costs and amounts to be displayed instantaneously and over a period of time, such as 24 hours.

• They wanted to be able to see how much electricity their homes used as a whole and how much energy individual appliances used at that moment.

• Participants were less interested in:

o How the device looked in their homes

o The method of display is wall mounted or sitting on a counter or shelf.

o The device’s ability to link to energy analysis on a personal computer.

o Ability to display time, date, and weather information.

o Whether the device required a battery or not.

Customer Support § Participants received minimal customer support. This led to some participants dropping

out of the test or continuing to use the device incorrectly. It is clear that IHDs will require support beyond the initial installation of the devices.

Exhibit A

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6

Savers and Nonsavers § Market test participants could be categorized into two groups, savers and nonsavers.

Each of these groups had characteristics that may make them more or less likely to save energy with an IHD. The estimated energy savings for a Nevada Power participant in the phase 1 market research and test achieved energy savings of 7.2%.

2008 Lessons Learned § Any device that requires a connection in the panel box has the potential to cause installation

issues. In some cases the problems were due to the panel box being unable to accommodate the current transformers. Other issues surfaced in scheduling installation appointments with the participants.

§ Devices that require frequent battery changes or repeatedly lose synchronization lose customer interest.

§ Participants had clear functional preferences that can be leveraged in a wider deployment.

§ A detailed service modeling that provides support will improve the effectiveness of the IHDs in terms of achieving energy savings and improving customer satisfaction.

§ Targeting savers as identified in the phase I market test will improve IHDs energy savings results.

Exhibit A

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7

Section B: 2009 Market Trial The 2009 market trial is implementing the next phase of the market test in accordance with Nevada Power’s 5th Amendment to the 2006 Integrated Resource Plan. The goals and objectives of this market test include:

1. Identify the target market segments most likely to be attracted to IHDs. The market trial has already identified IHD “savers” and “nonsavers” in the market test and some of the attributes that can be tied to each of these groups.

2. Develop support, training, and marketing materials to maximize the energy savings achieved by the market trial.

3. Develop and test a plan for recruiting customers into the market trial.

4. Develop and test a service model that can be scaled for a larger implementation.

5. Deploy approximately 1,000 IHDs to southern Nevada households to test the market, product, and marketing models. Although the original market trial concept called for 3,000 units to be installed it has been determined after closer review that only 1,000 units are required to obtain the desired market research results.

6. In analyzing the market test, develop statistically useful results about the costbenefit balance of IHDs.

Table 2: Targets and Budgets, 2009 Market Trial

Total In Home Display 2009



2009 Market Trial Execution The 2009 market trial will implement phases two and three of the Nevada Power 5th Amendment to the 2006 Integrated Resource Plan. This market trial will utilize some of the infrastructure that has been invested in by other departments within the utility. To maximize the effectiveness of the market trial, Nevada Power has chosen to deploy IHDs that will communicate with smart meters. The original market trial only used first generation devices which did not have the capability to communicate with a smart meter. These devices were dependent on a connection either to a sensor that is attached to the meter or had to be connected to the customers’ electrical system, usually through the panel box. To alleviate these barriers, the utility has decided to move forward with second generation devices that communicate with smart meters. Second generation IHDs employ AMI communications and data storage capabilities to provide more information and capabilities, such as pricing signals and notification of demand response events. The utility can update rates and provide information to customers through the meter to the IHD. This ensures that the customer receives the most current and up to date information.

To execute this work, the services of two contractors will be engaged, one will assist with market research, customer recruitment, training and support, and market evaluation. The second contractor will assist with installation, deployment, and ongoing customer service.

Exhibit A

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The market trial will deploy approximately 1,000 devices and install smart meters at each participant premise. The market trial is searching for opportunities to partner with other company initiatives, including the AMI Elster pilot that is underway, to minimize costs. Smart meters are all ready installed in the AMI Elster pilot study area and to the extent this area can support the customer research goals, customers will be recruited in this area.

Data and results related to the 2009 market trial will be gathered by the implementation contractors. Data will include the number of devices deployed, device radio ID, meter radio ID, meter number, and device location. Updates will be provided on customer status (such as opting out of the market trial). Customer billing data will be monitored periodically to check for fluctuations that could indicate discontinued participation in the market trial. These reports will be provided to the program manager on a regular basis. At the end of the market trial the average energy savings, marketing plan, support plan and deduction plans will be evaluated to determine the optimum parameters to deploy IHDs.

2009 Results to Date The market trial design has been completed, the implementation contractor has been selected and the deployment of IHDs is in progress.

Section C: Proposed 20102012 Program During the 20102012 action plan period the widespread deployment of IHDs will begin under the Demand Response program. The IHD market trial will not develop into a standalone program. The deployment of the IHDs will be guided by the results from the market trial completed in 2008 and the results from the 2009 market trial to be completed in 2010. The primary goal of this next phase of the IHD deployment will be to offer IHDs to customers to provide them a proven tool to assist them in managing their energy usage. The initial deployment will pair an IHD with a smart meter capable of communicating with the IHD.

In addition, the deployment of the IHDs will align itself with the potential large deployment of smart meters in Nevada Power’s service territory. The IHDs will be well poised to leverage the smart meter pilot.

Although this market trial has been designed to have the option to leverage the deployment of smart meters, it has also been designed to complete the deployment of the targeted number of IHDs should the smart meter pilot not materialize.

Since the IHDs will not develop into a standalone program, the budget dollars for this program will be captured under the Demand Response program. The $150,000 budgeted for 2010 is required for the completion of the 2009 market trial.

An overview of the proposed budgets and targets at the base, low, and high scenarios for this market trial are presented below in Tables 3 and 4.

Exhibit A

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9

Table 3: Base, Low, High Budgets, Market Trial Years 20102012

Scenario Budget

TRC 2010 2011 2012

Base $150,000 $0 $0 N/A

Low $150,000 N/A N/A N/A

High $150,000 N/A N/A N/A

Table 4: Base, Low, High Targets, Market Trial Years 20102012


2010 2011 2012 2010 2011 2012

Base 0 0 0 0 0 0

Low 0 0 0 0 0 0

High 0 0 0 0 0 0

Rationale and Supporting Data The deployment of IHDs begins a transition in demand side management from a heavy reliance on hardware based programs (lighting, air conditioning, building shell, appliances etc.) to a demand side management program that focuses more on customer energy usage behaviors and strives to actively engage customers in the management of their own energy usage. As such, this is a forward looking market trial that will integrate well with initiatives centered on the smart grid of the future. The IHD will be one of the communication devices that will provide customers information that will be more readily available as the smart grid evolves.

Work by others in the utility industry has demonstrated energy savings achieved from the deployment of IHDs to be in the range of 415% of annual energy usage. The 2008 market test provided an estimated annual average savings of 7.34% for Nevada Power. As noted in the following section, the 2009 market trial is investigating support and education that will significantly improve this savings figure. The IHD is therefore viable as an energy savings device, but it offers significant additional potential benefits. The IHD can provide a portal for live messaging to customers. The primary benefit of this communications is the ability to support the customer for the implementation of alternative rate structures such a critical peak pricing or critical peak rebates. These devices will provide a gateway for the utility to send pricing signals to customers. Under these alternative rate structures the customer benefits with potential bill savings and the other rate payers benefit with reduced costs. (A price responsive load control pilot is also being proposed as part of the Demand Response program.)

The utility strategy is to pursue under glass solutions. Under glass solutions provide the IHD the ability to integrate with smart meters and the communications that can be directed through the smart meters. In addition, the under the glass solution enables the customers to not have to concern themselves with updating the device with revised rates or whether it is appropriately synced with the meter. The IHDs will be updated via the network via the smart meter.

Exhibit A

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As part of the investigation of smart grid technology and the development of a potential pilot, Nevada Power recently issued a request for proposal (RFP) to solicit bids for Advanced Meter Infrastructure (AMI) Technology Requirement. Within the RFP there are three areas which will have an impact on IHDs.

Meter Data Management System (MDMS) – There is a demand response solution included in this proposal that is expected to start during the 4 th quarter of 2009 and conclude by the end of 2010. IHD has been found to be an effective tool in successful demand response programs.

Field Acceptance Test (FAT) – This initiative is a deployment of the selected AMI solution for approximately 10,000 electric meters in the southern service territory over a period of three months starting during the third quarter of 2010.

Demonstration Area – Up to 90,000 electric meters in up to nine locations in the southern service territory over a three month period starting in the first quarter of 2011.

The expectation is not for the Demand Response program to support the distribution of enough IHDs to meet the same level of deployment as the FAT or the mass deployment; however, the IHDs can achieve some economies by coupling efforts. From the lessons learned in prior years, the IHDs can target segments within the deployments to focus efforts while sharing common costs such as marketing and customer support.

Supporting Savings Data The 2008 market test analysis identified an overall estimated 7.34% annual energy savings per device for Nevada Power. The evaluation of energy saved in the market test is provided in the HED Market Test Report prepared by Paragon Consulting Services which is provided as Technical Appendix Item DSM 15. These are estimated savings because the market test goals focused on learning about the features of the devices favored by customers and customer perception regarding the devices trialed and did not seek maximum energy savings. In reviewing the evaluation of energy savings in the market test, it is noted that just over 40% of the customers achieved savings that exceeded 10%. This indicates that with additional support and training, the energy savings potential of IHDs is significantly greater than 7.34%. It is noted that even at the 7.34% energy savings level, it is cost effective. Other utilities’ deploying IHDs have reported energy savings ranging between 4% and 15%, and averaging between 7%10%. The question of the persistence of savings attributable to IHDs over a longer period of time has not yet been answered.

Nevada Power anticipates a drop in the cost per unit in the devices over the next three years. This will have two implications. The first is that the installed unit cost will drop, maybe to half of the first year cost. The second is that the additional functionality and benefits of the IHD can be more fully utilized in a smartmeterrich environment. If this partnership with a smart meter initiative materializes and the unit cost drops, it will present the Demand Response program the opportunity to review and redesign both the marketing and delivery mechanism to maximize the number of units installed.

20102012 Program Execution The IHDs will be a collaborative effort between multiple utility departments, including Meter Operations and Customer Service. The utility will contract with an implementation contractor to coordinate the installation of the meter and the deployment of the IHDs, provide ongoing customer service, and collect pertinent data for program management. The utility will seek out new technologies as they emerge and investigate them where warranted through market trial installations within the Demand Response program

Exhibit A

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11

to determine if they offer advantages. Where advantages are identified, tested devices will be integrated in the Demand Response program where they demonstrate a clear benefit.

In marketing the IHD, the utility will target those customers that embody the attributes that are most likely to benefit from an IHD. The 2008 market test identified that there clearly are savers and non savers in terms of how customers react to IHDs. The Demand Response program will work to concentrate the IHDs on the savers guided by the results from the 2008 market test and the 2009 market trial. The devices will be provided to participants at no or low cost.

20102012 Program Management Plan Nevada Power will issue a Request for Proposals (RFP) for this measure under the Demand Response program. Actual award will be contingent on Commission approval. The successful bidder will be responsible for marketing and program implementation. The selected implementation contractor will be required to work with technology vendors and internal departments to deliver a successful implementation. The chosen contractor will work closely with the AMI initiative and the Demand Response Program, as they both have a part to play as the utility gets more involved in behavioral devices.

20102012 Data Delivery and Tracking Data and results related to the 20102012 IHDs will be will be gathered by the implementation contractor. Data will include number of devices deployed, device radio ID, meter radio ID, meter number, and device location. Updates will be provided on customer status. Customer billing data will be monitored periodically to check for fluctuations that could indicate discontinued participation. These reports will be provided to the program manager on a regular basis. Pertinent data will be stored in the data store.

M&V Plan

M&V Objective The M&V objectives will include data gathering across a statistically representative sample of customer sites to quantify the energy savings and demand reductions resulting from the use of IHDs.

Approach The utility’s EM&V contractor will work closely with Nevada Power and will help assess the results. The EM&V Contractor will work with the market research contractor and program manager to confirm results.

The M&V approach will also quantify customer energy savings from IHDs across a statistically significant sample, through techniques such as bill analysis and onsite data logging, according to a specific M&V plan. The M&V approach will establish useful baselines, assess the impact on energy use of IHDs introduction into the sample households, and prepare a report analyzing these impacts.

Sample Selection The selection of the M&V sample will be based on a random sampling for prescriptive measures. The goal is to validate energy savings from IHDs within a ± 10% precision and confidence level of 90%. In simple random sampling, a sample of a given size is selected from the customer database following a

Exhibit A

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12

randomized procedure; thus all customer households with In Home Displays supplied are equally likely to be selected.

20102012 M&V Data Store The Nevada DSM M&V Data Store is a web portal based program that has been customized for both Nevada Power Company’s and Sierra Pacific Power Company’s internal use. Its function is to track Demand Side Management (DSM) Program performance. Nevada Power uses this management and tracking tool throughout the year to ensure that the planned investments provide clear value. The Data Store also supports the evaluation, measurement, and verification activities by providing the data needed for sample selection and verification of savings data.


Cost Benefit Analysis No cost/benefit analysis for IHDs was performed as a standalone program. For further details, please refer to the Demand Response Program Data Sheet.


Section E: Supporting Documentation Home Energy Display Product Test Market Research which is provided as Technical Appendix Item DSM13.

HED Market Study Report prepared by Paragon Consulting Services which is provided as Technical Appendix Item DSM15.

Exhibit A

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Nevada Power Company HomeFree Nevada Program

January 2010

1


HomeFree Nevada Program January 2010

Exhibit A

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January 2010

2

Table of Contents Program Summary ......................................................................................................................3 Section A: Proposed 20102012 Program ......................................................................................5

Rationale and Supporting Data ................................................................................................. 5 20102012 Program Execution ................................................................................................. 7 Marketing and Communications Support ................................................................................... 7 Contractor Recruitment and Training Support ............................................................................ 7 Customer Education Support.................................................................................................... 8 Customer Incentives................................................................................................................ 8 20102012 Program Management Plan .................................................................................... 12 20102012 Data Delivery and Tracking ................................................................................... 13 M&V Plan ........................................................................................................................... 13

Section B: Program Economic Evaluation...................................................................................14 Cost Benefit Analysis ............................................................................................................ 14 Freeridership ........................................................................................................................ 14 Input Data, Description of Sources, and Results of Financial Analysis ........................................ 15 Interpretation of Results ........................................................................................................ 16

Section C: Supporting Documentation ........................................................................................17

List of Tables Table 1a: Base, Low, and High Budgets, Program Years 20102012 ................................................................................. 8 Table 1b: Base, Low, and High Targets, Program Years 20102012.................................................................................. 8 Table 2a: Base Scenario Proposed Targets and Budgets, Program Years 20102012 ............................................................ 9 Table 2b: Low Scenario Proposed Targets and Budgets, Program Years 20102012 .......................................................... 10 Table 2c: High Scenario Proposed Targets and Budgets, Program Years 20102012.......................................................... 11 Table 3a: Base Scenario Program Budget by Category, Program Years 20102012.......................................................... 11 Table 3b: Low Scenario Program Budget by Category, Program Years 20102012.......................................................... 12 Table 3c: High Scenario Program Budget by Category, Program Years 20102012 ......................................................... 12 Table 4: Method for Savings Estimation by Type of Measure ........................................................................................ 13 Table 5a: Base Scenario Cost Test Results 20102012 .................................................................................................. 15 Table 5b: Low Scenario Cost Test Results 20102012 .................................................................................................. 15 Table 5c: High Scenario Cost Test Results 20102012.................................................................................................. 15 Table 6a: Base Scenario Utility Economic Evaluation .................................................................................................. 16 Table 6b: Low Scenario Utility Economic Evaluation ................................................................................................... 16 Table 6c: High Scenario Utility Economic Evaluation .................................................................................................. 16


Exhibit A

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3

Date: January 2010

Program Name: HomeFree Nevada Program

Program Status: New

Program Manager: To be determined


2009 Budget: N/A


Low $ 73,000 $ 72,000 $ 69,000

Base $ 91,000 $ 90,000 $ 86,000

High $ 114,000 $ 113,000 $ 108,000


Base 1.37

High 1.36

Program Summary In 2007, the Nevada Legislature passed SB437 requiring residential property sellers to conduct an energy audit of the property and to provide a prospective buyer with a completed audit before closing the transaction. The Nevada State Energy Office was charged with establishing an energy audit to fulfill the new mandate and develop audit standards for residential energy consumption and a common form for recording the audits. Nevada Power assisted in organizing an informal training workshop with staff from the Nevada State Energy Office, the Nevada State Housing Division, and the Nevada Attorney General’s Office in August 2008. Steve Baden, the Executive Director of Residential Energy Services Network (RESNET) was invited by Nevada Power and provided an educational presentation on residential energy audits and ratings.

Beginning January 1, 2011, the State of Nevada will require a disclosure of home energy use at the time of sale in the residential market. The Energy Commissioner will have developed the plan to implement this requirement. Nevada Power will be an active participant in helping develop and implement this plan. To develop the infrastructure necessary for a home energy assessment initiative to succeed, southern Nevada needed to enlist the participation of local organizations that have a stake in the process. Some of these stakeholders include the local government organizations, home retrofit contractor community, and other utilities. In a time when many of these key stakeholders are working collectively to improve energy efficiency in the homes in southern Nevada communities, Nevada Power will work in concert with these stakeholders to promote the concept and opportunity to achieve increased energy efficiency in existing residential units.

To support this initiative and to seek additional energy efficiency opportunities in the existing home market, Nevada Power is proposing the implementation of the HomeFree Nevada Program. This program is designed to support the development of a Home Performance with Energy Star® initiative in southern Nevada communities. Nevada Power will leverage the required audit on sale law as an opportunity to improve the energy efficiency of existing homes. Nevada Power has already made substantial progress in other residential energy use sectors and continuously pursues developing innovative energy saving programs such as this program to deliver value to customers.

Exhibit A

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4

The residential energy audit and retrofit market is one that is difficult to stimulate, but it is a market that has plenty of energy savings to capture. These types of programs are difficult to design and make cost effective. Nevada Power has put in a great deal of thought and creativity to create this comprehensive residential program.

Nevada Power has been a key player in designing, initiating, and supporting the HomeFree Nevada Program. Due to the struggling local economy and the magnitude of energy savings that can be obtained, Nevada Power feels strongly that the organizational partnership resulting from this program is critical in dealing with this important community issue. Nevada Power also believes the proposed modest incentive involvement is essential for the program’s initial success. The City of Las Vegas is employing a portion of the stimulus funding they have received to incentivize customers to participate in the home energy assessment.

Recent or current HomeFree Nevada Pilots: 1. City of Las Vegas and NV Energy Partnership Pilot – The City of Las Vegas is providing

rebates to energy auditors that meet the certification requirements of HomeFree Nevada up to $500 per home for City of Las Vegas residents. Therefore the energy audit is provided at little or no cost to the customer. The City of Las Vegas requires that the customer participate in Nevada Power’s Residential High Efficiency Air Conditioning Program or implement some other recommended measures to reduce their energy use. This is required to qualify for the $500 rebate.

2. Neighborhood Stabilization Program (NSP) HomeFree Nevada has capitalized on the Neighborhood Stabilization Program (NSP) in conjunction with Clark County, Nevada to use the foreclosed homes purchased with US Department of Housing and Urban Development (HUD) monies as pilot homes for the program. Clark County requires that the energy auditors be approved through HomeFree Nevada.

3. Green Chips and Rebuilding Together Pilot – HomeFree Nevada energy auditors have been hired by the Green Chips organization to perform comprehensive energy audits on some low income homes that are also clients of the nonprofit Rebuilding Together organization.

Exhibit A

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5

Section A: Proposed 20102012 Program Approximately 88% of the Nevada Power energy sales are driven by the residential sector. The proposed 20102012 HomeFree Nevada Program has been designed to penetrate the existing home market where there is significant energy savings potential.

Nevada Power will offer the “HomeFree Nevada Package” which includes direct install CFLs, weather stripping and caulking for doors and windows, programmable thermostat, and an A/C tuneup/refrigerant charge. Customers that participate and complete the energy audit in the HomeFree Nevada Program will receive the “HomeFree Nevada Package” at no cost until program resources are exhausted. It is noted that the customer will have previously incurred their share of the cost of the required home energy audit.

Nevada Power will be providing the “HomeFree Nevada Package” measures at referred residences. The HomeFree Nevada Program supports a program in partnership with others that provides a comprehensive wholehouse approach to home improvements designed to enhance the energy efficiency, health, safety, durability, comfort and affordability of Nevada’s housing stock. A program manager has been hired by HomeFree Nevada to compose the Home Performance with Energy Star® Sponsorship Requirements and implementation plan with the Environmental Protection Agency (EPA) and the Department of Energy (DOE). HomeFree Nevada is now an official Home Performance with Energy Star® Program and is listed on the Energy Star® website at http://www.energystar.gov/.

The program is a marketbased resource targeted to acquire lifetime energy savings of more than 2.6 million kWh from all measures installed during the next three years.

Rationale and Supporting Data The HomeFree Nevada Program was developed in partnership with several other local organizations to aggressively penetrate the existing homes market. A great deal of research and community partnering was conducted to propose this comprehensive residential energy audit and retrofit program.

In June 2008, Nevada Power was invited to attend a local community meeting to discuss bringing a Home Performance with Energy Star® program to southern Nevada. These meetings included a variety of organizations and were held on a monthly basis. The meetings were designed as a forum where stakeholders could express their experiences and opinions to assist in developing an existing home retrofit program in Nevada. Topics covered at these meetings included contractor recruitment, customer education, contractor training, marketing concepts, and overall program design. These meetings are still underway and will be continued to ensure that a successful and sustainable program will be executed. In the Home Performance Advisory Board, the following organizations are participating:

Exhibit A

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http://www.energystar.gov/


January 2010

6

Air Filtration Systems, Corp. National Renewable Energy Laboratory American Institute of Architects Nevada Conservation League City of Henderson NV Electrical Contractors Ass. City of Las Vegas NV Energy City of North Las Vegas NV Housing Authority Clark County NV State Bank DAQEM PGAL Architects AIA Greendream Enterprises Renewal By Anderson Home Energy Connection, LLC Sierra Club ICF International Southwest Gas J. Stout Law, LLC Springs Preserve Just Alt SWEEP Las Vegas Valley Water District UNLV Lucchesi Galati Architects UNR

HomeFree Nevada Program is still in the initial stages of program implementation. The program was created in partnership with the Springs Preserve, Nevada Power, and the Southern Nevada Regional Planning Coalition. As a program partner, Nevada Power provided a $20,000 program sponsorship in December 2008 to assist in kickingoff this program. This initial support was funded by Nevada Power’s O&M budget.

As the sponsor of Home Performance with Energy Star®, HomeFree Nevada will be responsible for:

• Training (BPI Institute and RESNET) of auditors and contractors. • Developing the program standards, policies, and procedures. • Managing the program. • Administration in league with the oversight committee. • Recruiting contractor participation. • Promoting the program. • Ensuring that the work completed under the program meets program standards. • Evaluating program success.

Functions of Nevada Power Company: • Support program with name and logo. • Marketing and education support. • Customer rebates/incentives for retrofits through Demand Side Management programs. • Contractor training assistance. • Assist in evaluating program success and technical expertise. • Executive board participation.

The Home Performance with Energy Star® Arizona Program provided an excellent example for southern Nevada. Since Phoenix and Las Vegas are close in proximity and have similar climate zones, the guidance offered by the managers of the Home Performance with Energy Star® – Arizona Program was incredibly helpful. A variety of other similar state and local programs were also examined.

Exhibit A

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7

20102012 Program Execution As of August 2009, HomeFree Nevada has become a nonprofit 501c3 with an official board of directors. The board members include representatives from the Springs Preserve, Rafi Architects, Nevada Energy Audit, Nevada Power, City of Las Vegas, City of Henderson, Nevada Conservation League, City of Henderson, Southwest Gas, Clark County, City of North Las Vegas, and Nevada State Bank. Nevada Power has and will continue to support the program and remain an active member of the executive board during the 20102012 period. The Environmental Protection Agency (EPA) and Department of Energy (DOE) have reviewed and approved HomeFree Nevada’s required sponsorship and organizational formalities and have approved it as an official Home Performance with Energy Star® Program.

The program will develop a network of speciallytrained contractors that evaluate homes using stateof theart equipment, recommend comprehensive improvements, and offer expert guidance to customers deciding whether to install the improvements. The HomeFree Nevada Program will enable customers the ability to choose and pay for improvements based on credible information. The program focuses attention on costeffective home improvement options and offers a significant opportunity for utility bill savings. Additionally, this program will help build a new home performance retrofit industry in southern Nevada during these difficult economic times, providing green jobs and opportunities for businesses, while at the same time providing the added bonus of helping improve energy efficiency and reducing air pollution and green house gas emissions.

The HomeFree Nevada Program will employ a consultant and the contractor model (Hybrid) in delivering services to the target market. Under this model, a qualified consultant will conduct the Home Performance Assessment (HPA) or Comprehensive Home Energy Audit, develop a scope of work and recommend improvements. Qualified contractors will provide the customer and sponsor with a written quote to complete the recommended improvements and the consultant will test out the home and report back to the program sponsor at the completion of the work. The consultant may form trade alliances with multiple contractors and receive compensation from the contractors.

HomeFree Nevada will provide overall program management to include lead generation, contractor/consultant(s) recruitment, arrange contractor/consultant training for RESNET and BPI certifications, provide quality assurance and quality control (QA/QC), inspections and oversight, program promotion and marketing as well as performance reporting to DOE/EPA and the utility providers.

Marketing and Communications Support Nevada Power will market the program through the utility website, bill inserts, press releases, media interviews, public relations campaigns, media advertising and special promotional events of the Company’s overall energy efficiency portfolio of programs. Nevada Power’s public reputation and credibility are valuable in persuading homeowners to consider making wholehouse energy efficiency improvements.

Contractor Recruitment and Training Support A common market barrier to improving home energy performance is the limited supply of qualified home performance contractors. Trained and qualified home performance contractors are needed in southern Nevada to improve the energy efficiency of a significant number of existing homes. Developing a strong network of professionals, skilled in wholehouse assessment, diagnostic testing, and installation best practices, is essential to the HomeFree Nevada Program. To date, the HomeFree Nevada Program has

Exhibit A

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8

been very successful in recruiting contractors and getting these contractors highly motivated to enroll in the required training programs.

Trained and qualified home performance contractors are needed in southern Nevada to improve the energy efficiency of a significant number of existing homes. A number of contractors are already in the home performance field, but need additional field experience and training regarding the energy principles of building design. Nevada Power will train current energy education consultant employees trained to be familiar with these processes. Nevada Power has and will continue to assist in organizing training sessions and provide their facilities to assist in minimizing training costs to the contractors.

Contractors that have met the requirements set forth by the program will be able to participate in the program. Participation in the program provides benefits and privileges to contractors and requires a commitment from the contractor to follow program requirements.

Customer Education Support Nevada Power’s energy education team will help create public awareness of the program in close coordination with Nevada Power’s existing public education and awareness activities. Nevada Power will play a very important role in educating consumers about the process and benefits of the HomeFree Nevada Program.

Customer Incentives Nevada Power will offer the “HomeFree Nevada Package” which includes direct install CFLs, weather stripping and caulking for doors and windows, programmable thermostat, and an A/C tuneup/refrigerant charge at no cost to the customer.

An overview of the proposed budgets and targets at the base, low and high scenarios for this program are presented in Table 1a and Table 1b.

Table 1a: Base, Low, and High Budgets, Program Years 20102012

Scenario Budget

TRC 2010 2011 2012 Base $91,000 $90,000 $86,000 1.37 Low $73,000 $72,000 $69,000 1.36 High $114,000 $113,000 $108,000 1.36

Table 1b: Base, Low, and High Targets, Program Years 20102012


2010 2011 2012 2010 2011 2012 Base 175,800 160,425 114,300 69 63 45 Low 140,640 128,340 91,440 56 51 36 High 219,750 200,521 142,875 86 78 56

Exhibit A

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9

The HomeFree Nevada Program details by scenario are provided in Tables 2a, 2b, and 2c.


Total Program – Base Scenario 2010 2011 2012 Budget, Total Program $91,000 $90,000 $86,000 No. of Installed Measures 1,800 1,425 300 Demand Savings (kW) 69 63 45 Energy Savings (kWh) 175,800 160,425 114,300 Measure 1 – CFLs No. of Installed Measures 1,500 1,125 0 Energy Savings (kWh) 61,500 46,125 0 Measure 2 – Weatherstripping and caulking for doors and windows No. of Installed Measures 100 100 100 Energy Savings (kWh) 19,500 19,500 19,500 Measure 3 – Programmable Thermostat No. of Installed Measures 100 100 100 Energy Savings (kWh) 19,800 19,800 19,800 Measure 4 – AC Tuneup/Refrigerant Charge No. of Installed Measures 100 100 100 Energy Savings (kWh) 75,000 75,000 75,000

Exhibit A

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10


Total Program – Low Scenario 2010 2011 2012 Budget, Total Program $73,000 $72,000 $69,000 No. of Installed Measures 1,440 1,140 240 Demand Savings (kW) 56 51 36 Energy Savings (kWh) 140,640 128,340 91,440 Measure 1 – CFLs No. of Installed Measures 1,200 900 0 Energy Savings (kWh) 49,200 36,900 0 Measure 2 – Weatherstripping and caulking for doors and windows No. of Installed Measures 80 80 80 Energy Savings (kWh) 15,600 15,600 15,600 Measure 3 – Programmable Thermostat No. of Installed Measures 80 80 80 Energy Savings (kWh) 15,840 15,840 15,840 Measure 4 – AC Tuneup/Refrigerant Charge No. of Installed Measures 80 80 80 Energy Savings (kWh) 60,000 60,000 60,000

Exhibit A

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11


Total Program – High Scenario 2010 2011 2012 Budget, Total Program $114,000 $113,000 $108,000 No. of Installed Measures 2,250 1,781 375 Demand Savings (kW) 86 78 56 Energy Savings (kWh) 219,750 200,521 142,875 Measure 1 – CFLs No. of Installed Measures 1,875 1,406 0 Energy Savings (kWh) 76,875 57,646 0 Measure 2 – Weatherstripping and caulking for doors and windows No. of Installed Measures 125 125 125 Energy Savings (kWh) 24,375 24,375 24,375 Measure 3 – Programmable Thermostat No. of Installed Measures 125 125 125 Energy Savings (kWh) 24,750 24,750 24,750 Measure 4 – AC Tuneup/Refrigerant Charge No. of Installed Measures 125 125 125 Energy Savings (kWh) 93,750 93,750 93,750

The HomeFree Nevada Program budget breakout for the base, low and high scenarios are presented in Tables 3a, 3b, and 3c.



Marketing, Advertising and Tech Demo $0 $0 $0


Incentives $36,400 $35,733 $34,000




Exhibit A

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12



Marketing, Advertising and Tech Demo $0 $0 $0


Incentives $29,120 $28,586 $27,200







$0 $0 $0


Incentives $45,500 $44,665 $42,500




20102012 Program Management Plan The overall goals of the program management plan are to ensure that the HomeFree Nevada Program is effectively implemented and maintained. The program manager will be responsible for monitoring the program results and to make changes as required to reach or exceed program goals. Status report meetings will be scheduled as warranted based on emerging program developments. The purpose of the communications is to provide continuous feedback and adjust how to administer and implement the program. Depending on the level of success the program experiences in obtaining the targeted number of participants, customers may be contacted to ensure that their experience has been successful.

Exhibit A

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13

20102012 Data Delivery and Tracking Data and results related to the 20102012 HomeFree Nevada Program will be gathered through an internal data management system. Data will include number of homes that received a comprehensive energy audit, confirmation that the homeowner received the “HomeFree Nevada Package”, and other pertinent data will be stored in the data store. This information will also be available to the utility for management and reporting as needed.

M&V Plan

M&V Objective The EM&V Contractor will perform evaluation, measurement and verification (M&V) activities to confirm the savings being realized through the HomeFree Nevada Program in the Nevada Power service territory. The performance and installation verifying are required to ensure that the installed systems indeed perform up to expectations and provide real savings.

Approach The utility’s EM&V contractor will work closely with Nevada Power to assess and confirm the effects of the HomeFree Nevada Program. The EM&V Contractor will prepare a programspecific M&V Plan to guide this work.

The approach used to determine savings will depend on the type of measure. Two primary approaches for estimating savings will be used: regression analysis of billing data or calculations using engineering algorithms and onsite data. Table 4 depicts the approach expected to be used for different measures in the four measures.

Table 4: Method for Savings Estimation by Type of Measure

Measure Expected M&V Approach

CFLs Engineering algorithm; onsite data Weather stripping / windowdoor caulking Regression analysis of billing data Programmable thermostat Regression analysis of billing data AC tuneup / refrigerant charge Engineering algorithm; onsite data

For the regression analysis of billing data, the EM&V contractor will obtain billing data for randomly selected samples of customers who did and did not have a measure installed through the program. Monthly billing data will be obtained for the customers selected for the samples, and other data on the characteristics of the customers will be obtained from program records or from focused surveys. If appropriate, data to confirm operation of the measures may be obtained through onsite data logging.

The EM&V Contractor will assess the impacts on energy use of installing the measures through statistical and regression analysis of the monthly billing data for the sample households, both participants and non participants. The analysis will establish energy use baselines and estimate the magnitude of the changes in energy use attributable to installation of the measures. The changes in energy use that result from installing the measures will be estimated through the “difference in differences” method, in which changes in energy use for participants are compared to changes in energy use for nonparticipants.

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To provide the data for the calculation of savings using engineering algorithms and onsite data, field technicians conduct brief visits to verify that measures reported installed were indeed installed. Moreover, they collect information pertaining to the characteristics and operation of the measures that are used to determine the savings from installing the measures. This information includes data on the operating hours for the measures.


Sample Selection The EM&V Contractor will select the M&V samples using appropriate statistical sampling procedures based on random sampling. Sample sizes for participants and nonparticipants will be determined so that energy savings can be validated with ± 10% precision at a confidence level of 90%. Samples of the required sizes for participants and for nonparticipants will be selected through random sampling procedures. The participant sample will be selected from the database of customers who participated in the HomeFree Nevada Program. Randomized procedures will be used for selection of the participant sample so that all customer households participating in the program will be equally likely to be selected.

For the regression analysis of billing data, the nonparticipant sample will be selected from Nevada Power’s general residential customer population, but with matching characteristics against participants.

Onsite Surveys and Verification Field technicians conduct brief visits to the participant customers selected for the sample to verify that measures reported installed were indeed installed. Moreover, they collect information pertaining to the characteristics and operation of the measures that are used to determine the savings from installing the measures.

M&V Data Store The Nevada DSM M&V Data Store Web Portal, referred to as “Data Store”, is a web portal that has been customized for both Nevada Power Company’s and Sierra Pacific Power Company’s internal use. Its function is to track Demand Side Management (DSM) program performance. The Data Store supports the evaluation, measurement, and verification activities by providing the data needed for sample selection and verification of savings data. The Data Store is “populated” with data provided by the implementation contractor or program manager on a monthly basis.

Section B: Program Economic Evaluation


Freeridership The most recently completed analysis freeridership and NetToGross Ratios (“NTGR”) was conducted by PA Consulting Group (PA) in 2009. The freeridership rate for the HomeFree Nevada Program is 30.7%.

Exhibit A

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Input Data, Description of Sources, and Results of Financial Analysis A copy of the input data sheets and financial models are provided as Technical Appendix # DSM2. These figures were all calculated based upon the information contained in this program data sheet and the materials referenced herein. The following tables summarize the results of the financial analysis for all three scenarios.



Total Resource 1.37 $330,997 $242,360 $88,637 $0.08

Utility 1.07 $264,348 $246,834 $17,514 $0.09

Participant $278,119 ($1,231) $279,350 ($0.00)

Ratepayer 0.38 $216,690 $572,611 ($355,922) $0.20

Societal cost 1.48 $358,279 $242,360 $115,919 $0.08



Total Resource 1.36 $264,798 $194,296 $70,502 $0.08

Utility 1.07 $211,549 $197,837 $13,713 $0.09

Participant $222,495 ($985) $223,480 ($0.00)

Ratepayer 0.38 $173,352 $458,530 ($285,178) $0.20

Societal cost 1.48 $286,623 $194,296 $92,327 $0.08



Total Resource 1.36 $413,744 $304,202 $109,541 $0.08 Utility 1.07 $330,650 $309,677 $20,973 $0.09 Participant $347,643 ($1,539) $349,182 $0.00 Ratepayer 0.38 $270,859 $717,112 ($446,253) $0.20 Societal cost 1.47 $447,845 $304,202 $143,642 $0.08

Exhibit A

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Total Costs $91,000 $267,001







Total Costs $73,000 $214,000







Total Costs $114,000 $335,000









Exhibit A

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Section C: Supporting Documentation The HomeFree Nevada implementation plan approved by EPA is provided as Technical Appendix DSM 14.

Exhibit A

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Exhibit A

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Nevada Power Company Residential Solar Thermal Water Heating

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Residential Solar Thermal Water Heating Program

January 2010

Exhibit A

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Table of Contents Program Summary ......................................................................................................................3 Section A: Proposed 20102012 Program ......................................................................................5

Rationale and Supporting Data ................................................................................................. 6 20102012 Program Execution ............................................................................................... 11 20102012 Program Management Plan .................................................................................... 23 20102012 Data Delivery and Tracking ................................................................................... 24 M&V Plan ........................................................................................................................... 24

Section B: Program Economic Evaluation...................................................................................25 Cost Benefit Analysis ............................................................................................................ 25 Freeridership ........................................................................................................................ 25 Input Data, Description of Sources, and Results of Financial Analysis ........................................ 25 Interpretation of Results ........................................................................................................ 27

Section C: Supporting Documentation .......................................................................................27

List of Tables Table 1: Proposed Budgets ......................................................................................................................................... 5 Table 2: Proposed Energy and Demand Savings Targets .................................................................................................. 5 Table 3a: Base Scenario Proposed Targets and Budgets, Program Years 20102012 ............................................................ 5 Table 3b: Proposed Targets and Budgets, Program Years 20102012 ................................................................................ 6 Table 3c: Proposed Targets and Budgets, Program Years 20102012 ................................................................................ 6 Table 4: State Incentives............................................................................................................................................ 8 Table 5: Utility Rebates.............................................................................................................................................. 9 Table 6a: Base Scenario Program Budget by Category, Program Years 20102012.......................................................... 10 Table 6b: Low Scenario Program Budget by Category, Program Years 20102012............................................................ 10 Table 6c: High Scenario Program Budget by Category, Program Years 20102012 ......................................................... 11 Table 7: List of Community Outreach Events.............................................................................................................. 18 Table 8a: Base Scenario Cost Test Results 20102012 .................................................................................................. 25 Table 8b: Low Scenario Cost Test Results 20102012 .................................................................................................. 26 Table 8c: High Scenario Cost Test Results 20102012.................................................................................................. 26 Table 9a: Base Scenario Utility Economic Evaluation .................................................................................................. 26 Table 9b: Low Scenario Utility Economic Evaluation................................................................................................... 27 Table 9c: High Scenario Utility Economic Evaluation .................................................................................................. 27


Exhibit A

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• Program Name: Residential Solar Thermal Water Heating Program

• Program Status: New

• Program Manager: John Hargrove


• 2009 Budget: Not Applicable

• Proposed Budget: 2010: 2011: 2012:

Low $ 364,000 $ 744,000 $ 744,000

Base $ 455,000 $ 930,000 $ 930,000

High $ 569,000 $ 1,163,000 $ 1,163,000


Base 0.20

High 0.20

Program Summary This program is proposed despite the total Recourse Cost Test results of 0.2 in compliance with SB 437 Section 43.5 Paragraph 3 which reads as follows: “The Commission shall require the utility to include in its plan: (a) An energy efficiency program for residential customers which reduces consumption of electricity or any fossil fuel, and which includes without limitation, the use of new solar thermal energy sources.”

Work was initiated in designing this program by inviting interested parties to join Nevada power and Sierra Pacific Power (“Sierra”) in an all day workshop. A solar thermal workshop was held in December of 2008 at both Nevada power and at Sierra via video conference between Reno and Las Vegas. Contractors, distributors, Bureau of Consumer Protection (“BCP”), PUCN Staff, elected officials, and any other interested party were invited to attend. The contractors in attendance were very interested in creating a solar thermal market in Nevada due to the economic downturn in the State which has severely impacted the building market. Contractors believe that a utility incentive program would be helpful in marketing a technology that has a relatively high initial investment. The initial investment is more costly than replacing or upgrading a traditional water heater. A reduced payback period and the desire to be “green” would help overcome these factors.

Key points discussed at the workshop included:

• The need to overcome the “black eye” stereotype in the solar market due to shoddy installations in the early 1980’s (Nevada Power will remedy this problem by requiring proper training and warranties on the equipment).

• Solar Rating and Certification Corporation (“SRCC”) OG300 standards should be the starting point for eligibility, but it was noted that there is a backlog of units waiting to be tested.

• Attention to building codes is critical for proper roof mounting and structural engineering due to high winds in the State.

Exhibit A

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• Conduct annual training sessions with building officials and contractors to go over best practices and key issues.

• Capacity should grow with the industry while balanced with the fact that rate payers will initially subsidize the program.

• Require a signed contract with a certified contractor to be accepted into the program and remove projects from the program that are not completed within 56 months.

Based on the valuable feedback provided by the attendees at the workshop and Nevada Power’s own research, the proposed Residential Solar Thermal Water Heating Program has been designed to provide incentives to residential customers who install qualifying solar water heating systems that offset energy used by an existing water heater. The goals of this program are to encourage the adoption of solar thermal water heaters and reduce electrical consumption used for water heating.

The program will encourage the adoption of solar thermal water heating systems by providing financial incentives to assist with installation costs and by providing training for contractors, building inspectors, and other state and local building officials. The program will target the approximate 15% 20% of single family homes in Nevada Power’s service territory with residential electric water heaters. A companion program will be filed for the Sierra Pacific territory at a later date.

Exhibit A

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Section A: Proposed 20102012 Program Program Goals The program has been designed with an aggressive approach in the first year. This approach has been adopted intentionally with a target that is significantly above the level of penetration that is actually anticipated. The strategy has been designed to ensure that if the program achieves results that are beyond expectations, it will not be limited due to inadequate incentive funding. It is anticipated, that the first year market penetration will include approximately 60 installations. The first program year provides a higher level of incentives to build consumer interest in the program. The first years of the program will focus on providing education and training to get momentum started in the industry. Higher levels of solar thermal penetration are anticipated as more customers and contractors are educated and trained and as the benefits of solar thermal water heating become more widely understood.

The following tables summarize the proposed budgets and targets. Table 1 provides the proposed program budget for 20102012. Table 2 provides the proposed energy and demand savings. Table 3a, 3b, and 3c provide a more detailed breakdown of budget and savings by different categories.

Table 1: Proposed Budgets

Scenario Budget

TRC 2010 2011 2012

Base $455,000 $930,000 $930,000 0.20

Low $364,000 $744,000 $744,000 0.20

High $569,000 $1,163,000 $1,163,000 0.20

Table 2: Proposed Energy and Demand Savings Targets


2010 2011 2012 2010 2011 2012

Base 90,000 450,000 450,000

10 48 48

Low 72,000 360,000 360,000

8 38 38

High 112,500 562,500 562,500

11 57 57


Total Program – Base Scenario 2010 2011 2012 Budget, Total Program $455,000 $930,000 $930,000

No. Of Solar Thermal Incentives 60 300 300 Incentive per unit* $2,000 $1,500 $1,500 Demand Savings (kW) 10 48 48 Energy Savings (kWh) 90,000 450,000 450,000

Exhibit A

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*Program incentive scenario will change as needed to improve customer interest and participation.

Table 3b: Proposed Targets and Budgets, Program Years 20102012



No. Of Solar Thermal Incentives 48 240 240 Incentive per unit* $2,000 $1,500 $1,500


Energy Savings (kWh) 72,000 360,000 360,000 *Program incentive scenario will change as needed to improve customer interest and participation.

Table 3c: Proposed Targets and Budgets, Program Years 20102012



No. Of Solar Thermal Incentives 75 375 375 Incentive per unit* $2,000 $1,500 $1,500


Energy Savings (kWh) 112,500 562,500 562,500 *Program incentive scenario will change as needed to improve customer interest and participation.

Rationale and Supporting Data In designing a solar thermal program, many resources were used. The solar thermal workshop was held with 26 participants from outside the utility. The interested groups in attendance included the PUCN staff, BCP, contractors, manufacturers, and elected officials. The workshop was designed as a forum where everyone could express their opinions on the best way to develop a solar thermal market in Nevada. Topics covered at the all day workshop included customer and contractor education, quality control and inspections, incentive levels, and program size. The workshop was conducted via a video conference between Las Vegas and Reno to enable greater participation.

Programs at other utilities were also examined. Of particular interest was the Solar Thermal Pilot at San Diego Gas & Electric Company. This pilot is being used in a market research phase before implementing a large scale solar thermal program for the State of California. Arizona Public Service (“APS”) has initiated a solar thermal program. Since Phoenix and Las Vegas are close in proximity and have similar climate zones, the guidance offered by the managers of the APS program was very instructive. A variety of other similar state and local programs were also examined.

The design of the program leverages the lessons learned by two regionally comparable utilities, San Diego Gas and Electric Company and Arizona Public Service, in the design and launch of their solar thermal water heating programs. The lessons learned from the implementation of their solar thermal water heating programs have been considered in the design of this program. Nevada Power is appreciative of the willingness of each of these companies to openly share the trials and tribulations they encountered in launching their programs. This program was also designed by using lessons learned and various features from the SolarGenerations Program.

Exhibit A

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San Diego Experience

The San Diego Regional Energy Office (“SDREO”) started a pilot incentive program for solar thermal technologies in the San Diego Gas & Electric Company (“SDG&E”) service territory of 1.4 million customers in July of 2007. The purpose of the pilot is to perform market research leading to the implementation of a statewide incentive program under the California Solar Initiative (Solar Bill 1). The 18month pilot has a $2.2 million dollar budget and is designed to provide rebates to residential, commercial and industrial electrical customers of SDG&E who install qualifying solar water heating systems that offset energy used by an existing natural gas or electric water heaters or boilers. The SDREO will provide financial incentives, and consumer information and education to overcome market barriers to solar water heating, such as high initial system costs, customer lack of information, and potential negative public perceptions of solar water heating technologies. Customers utilizing electricity, gas, or propane to heat water are eligible.

SDG&E require all contractors to submit paperwork with licensing, warranty, and insurance coverage information. Contractors were also required to attend a one day training session that covered building codes and SRCC requirements. To qualify, solar water heating systems must be OG300 certified. The program received 92 applications for installations in the first 10 months. Seventyeight of these initial applications were for residential installations. Over 250 contractors and industry representatives and 300 customers were trained. There was a two month lag from when the first contractors were trained to when the first applications were received. San Diego is performing a comprehensive measurement and evaluation analysis that includes pre/post consumption data, demographic information, system characteristics, and costs.

The program did not obtain the initial program participation it was expecting in terms of applicants. Increased marketing efforts and the extension and increase of the Federal Tax Incentive for solar thermal are expected to bolster the market. A typical rebate of $1,250 per customer may have been lower than what was needed to generate interest. In addition, the program had stringent restrictions on the installation, reducing the rebate amount if the system did not have optimum sun, orientation, and angle.

Arizona Public Service Experience APS implemented a small solar thermal incentive program in 2002. The program did not get much attention. The program was significantly increased in the fall of 2007. APS has the unique benefit of having a $50 million dollar yearly budget that can be allocated to any type of renewable technology, including solar photovoltaic, wind, geothermal and solar thermal. This allows the renewable programs to share in marketing costs, to reallocate funds to programs as needed. For this reason, APS has never run out of incentive dollars for its solar thermal program.

The program requires that a system be SRCC OG300 certified to receive an incentive and uses the SRCC rating to determine the incentive amount. In addition to the utility incentive, Arizona also offers a state tax credit. The maximum APS incentive is equal to 50% of the total system cost. Other incentives such as a Federal tax credit of 30% of the system cost and a State tax credit of 25% of system cost up to $1,000 are also available.

To date, the program has achieved approximately 3,000,000 kWh of savings and approximately 1,200 installations since inception. About 75% of the incentives have been issued in the last year and a half.

Exhibit A

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http://www.sdenergy.org/


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This is partially due to the program allowing fuel switching for solar thermal in May of 2008, opening the program up to many ineligible customers. Like Nevada, Arizona has a majority of gas water heaters.

APS anticipates its largest number of water heater incentives in 2009 with a projected 600 new solar thermal water heating systems and expects the program to grow each year. With the growth of the program, coop marketing and contractor and customer training, a program will be implemented.

State Incentives and Utility Incentives Nationwide Many states also offer a state incentive to supplement the utility rebate and the federal tax incentive. This is obviously not applicable in Nevada, but will be considered in determining rebate amounts.

Table 4 below presents state incentives.

Table 4: State Incentives

State Incentives

Arizona 25% state tax credit

Delaware 50% state rebate

Florida $500 state rebate

Hawaii 30% state tax credit

Idaho 40% state tax credit

Illinois 30% state rebate

Louisiana 50% state tax credit

Maine $1,250 state rebate

Maryland 20% state rebate

Massachusetts 15% state tax credit + tax exemption

Montana 100% state tax credit (max. $500)

New Mexico 30% state tax credit less federal tax credit

North Dakota 15% state tax credit

Oregon $1,400 tax credit

Rhode Island 25% state tax credit + sales tax exemption

South Carolina $1,000 state rebate + 25% state tax credit

Utah 25% state tax credit

Vermont $1.75/100 BTU state rebate + sales tax exemption

Exhibit A

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Table 5 provides a list of Utility Rebates by utility. The different types of rebates included are a flat rate, a rebate based on energy production, a rebate based on square footage, and a low interest loans in addition to a rebate.

Table 5: Utility Rebates

Utility Rebate

Redding Electric (CA) $1,500

SMUD (CA) $1,500

Earthrise (AZ) $0.50/kWh estimated energy production

APS (AZ) $0.50/kWh estimated energy production

Trico Electric (AZ) $0.50/kWh estimated energy production

Austin Energy Rebate (TX) $1,500 New Construction, $2,000 retrofit

Bryan Texas Energy $1,000 New Construction, $1,500 retrofit and/or low interest loan

CPS Energy Rebate (TX) $0.30/kWh

Aspen Solar Pioneer (CO) $1,000

Clark Public Utilities (WA) $2,000

Pacific County PUD (WA) $2,000

Clalium County PUD (WA) $500/40 ft 2

Grays Harbour PUD (WA) $600/40 ft 2

Port Angeles PW&U (WA) $500/39 ft 2 + sales tax exemption

Budget by Category The program budget by category for the base, low, and high scenarios are presented in Tables 6a, 6b, and 6c. Education and training will be imperative to a successful program, so a budget of $35,500 in the first year is allocated for contractor and building official training and customer education, each to be held twice yearly. Marketing is essential for customer education because it increases consumer knowledge about the program. No cost marketing will be utilized by including bill inserts and customer testimonials. A budget is also included for paid advertising for additional marketing initiatives should the program not achieve its unit goals. During the program year, if the program does not experience enough installations to exhaust the incentive funds, the balance of the incentive funds and associated administrative costs will be carried into the next year.

Exhibit A

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Incentives $120,000 $450,000 $450,000


Marketing, Research and Advertising $55,000 $75,000 $75,000

Education and Training $35,500 $53,725 $53,725

Utility Administration and Overhead $65,000 $80,850 $80,850





Incentives $96,000 $360,000 $360,000







Exhibit A

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Incentives $150,000 $562,500 $562,500







20102012 Program Execution The Residential Solar Thermal Water Heating Program will be managed by the program manager of the Renewable Generations Program. Due to the similar nature of the programs, this will allow many shared savings in cross promotions at community events, contractor outreach, and customer outreach.

Contractor and Building Official Training and Education Nevada Power’s first objective is to address the training and education of the contractor community. This training will focus on the development of programs and the technical details of properly installing solar thermal water heating systems. The education and training of contractors, building inspectors, building officials, and other entities having jurisdiction for building permits and code enforcement is very important. Many building and code officials may not be familiar with the systems, given that few systems are installed per year in each jurisdiction.

The contractor training will focus on the development of programs and the technical details of properly inspecting solar thermal water heating systems. The training will be designed to ensure these contractors and building officials have a thorough knowledge of solar water heating systems to provide them with the tools to ensure quality and safe installations.

All systems will be required to be installed by appropriately licensed Nevada contractors in accordance with rules and regulations in the State of Nevada. Contractors will be required to attend workshops provided by SRCC in order to be eligible to participate in the program. The contractor and building official training will be provided by an educator from the SRCC.

Although not required in the first year of participation, installation contractors will be encouraged to become certified by the North American Board of Certified Energy Practitioners (NABCEP).

The SRCC is a nonprofit, independent thirdparty certification entity that provides a national database for comparison of solar thermal systems. The SRCC was established in 1980 when the need for a way for consumers and contractors to evaluate the reliability, maintainability, and energy savings for solar thermal products was not being addressed. There are currently two independent laboratories hired by SRCC that

Exhibit A

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test all of the systems under standardized test conditions using computer models. The values are then adjusted for the annual energy savings for different locations nationally. Nevada has ratings for Elko, Ely, Las Vegas, Reno, Tonopah, and Winnemucca. It is these values that the Portfolio Energy Credits (“PECs”) are based on. The SRCC is the most widely accepted rating system for solar thermal systems. Nevada Administrative Code NAC 704.8893 requires that if a solar thermal system is to be issued portfolio energy credits it must be either SRCC rated, use a thermal energy meter if it is not rated or have a consumption of greater than 34 million British thermal units.

The contractor and building official onsite training will be provided twice a year in Las Vegas and in Reno. After successfully completing the training, the contractor will be listed on the website as a contractor who has completed the Nevada Power sponsored training course.

SRCC Training

SRCC offers a training class that includes the following comprehensive training on the four main components of solar thermal water heating system. These components include the collector, transport, control, and storage.

Collector

• Operating Indicators • Solar Isolation Loop • Back Thermosiphon Prevention • Protection from Ultraviolet Radiation • Heat Exchanger • Insulation • Water ShutOff • Freeze Protection • Fluid Safety Labeling • Toxicity • Waste Disposal • Combustible Liquids • Liquid Flash Point • Entrapped Air • Pressure Relief • Building Penetrations • Penetration of Structural Members • VacuumInduced Pressure Protection • Thermal Expansion • Expansion Tanks • Service Connections • Permanent Maintenance Accessories • Piping System • Operating Conditions • Sound and Vibration Control • Pipe and Component Supports

Exhibit A

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• Pitch or Angle of Piping Installation • System Failure Prevention • Contamination of Potable Water • Firestopping • Penetration Through FireRated Assemblies • Fluid System Sizing • Different Metallic Materials • Thermal Shock Protection • Airborne Pollutants • Effects of Decomposition Products • Coupling Hoses • Solar Degradation • Incompatible Materials • Protection from Leaks • Fluid Compatibility • Deterioration of Fluids • Buried Components • Underground Piping • Water Hammer • Protection Against AutoIgnition of

Combustibles • Protection From Thermal Deterioration • Heated Components • Backflow • Auxiliary System • Space Use • Emergency Egress and Access • Accessibility • Maintenance and Servicing

Transport

• Operating Indicators • Solar Isolation Loop • Back Thermosiphon Prevention • Protection from Ultraviolet Radiation • Heat Exchanger • Insulation • Water ShutOff • Freeze Protection • Fluid Safety Labeling • Toxicity • Waste Disposal • Combustible Liquids • Liquid Flash Point

Exhibit A

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• Entrapped Air • Pressure Relief • Building Penetrations • Penetration of Structural Members • VacuumInduced Pressure Protection • Thermal Expansion • Expansion Tanks • Service Connections • Permanent Maintenance Accessories • Piping System • Operating Conditions • Sound and Vibration Control • Pipe and Component Supports • Pitch or Angle of Piping Installation • System Failure Prevention • Contamination of Potable Water • Firestopping • Penetration Through FireRated Assemblies • Fluid System Sizing • Different Metallic Materials • Thermal Shock Protection • Airborne Pollutants • Effects of Decomposition Products • Coupling Hoses • Solar Degradation • Incompatible Materials • Protection from Leaks • Fluid Compatibility • Deterioration of Fluids • Buried Components • Underground Piping • Water Hammer • Protection Against AutoIgnition of

Combustibles • Protection From Thermal Deterioration • Heated Components • Backflow • Auxiliary System • Space Use • Emergency Egress and Access • Accessibility • Maintenance and Servicing • Protection from Foreign Substances • Filters • Deterioration Protection

Exhibit A

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Control

• Collector Circulation Control • Protection From Ultraviolet

Radiation • Solar Degradation • Temperature Rating • Control System Override • High Temperature Control • Operating Limits • Control Lines and Sensors • Control Sensor Installation • Building Penetrations • Wiring Identification • Protection of Electrical

Components • Protection from Foreign Substances • Filters

• Deterioration Protection

Storage

• Operating Limits • Auxiliary Water Heating

Equipment • Stagnation • Thermal Storage System • High Temperature Control • Tank Design Requirements • Tanks • Different Metallic Materials • Tank Insulation • Protection of Electrical

Components • Auxiliary System • Water Damage • Waterproofing • Emergency Egress and Access • Earthquake Protection

Exhibit A

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Customer Education and Awareness

The education of potential customers is another significant objective. The customer education activities will provide homeowners with the knowledge to understand and select a solar thermal water heating system appropriate for their residence. The customer education activities will also be geared toward teaching homeowners to work with the installation contractors and to monitor the actual installation process. The involvement of the homeowner will be crucial in ensuring quality installations. Nevada Power will provide interested customers the opportunity to meet with utility and industry experts to learn about solar thermal water heating systems as well as provide additional educational information on the Utility’s website. The customer education component of the program will conduct the following activities:

• Nevada Power will host two annual customer education workshops. Customers will be provided with program and technical information. Guidance on how to research and work with a contractor to design a solar thermal system will also be provided. Following the first program year, participants who have completed their project will be invited to participate in future workshops to share their experiences with potential applicants.

• Nevada Power will send periodic emails containing uptodate program information to customers who have entered their contact information on the website. The emails will also include information on events such as customer workshops and other relative special events.

A trained customer will be an informed consumer. The basic knowledge about solar thermal systems will enable customers to negotiate for the installation of a system that fits their needs and make informed choices about an installation contractor. Informed consumers will improve the quality and effectiveness of the entire solar thermal industry.

Nevada Power training and education efforts will provide contractors with the help required to properly perform quality installations, while education for customers will alleviate misconceptions and confusion about how solar thermal works. Building officials will be attending the same training sessions as contractors, which will have the added benefit of ensuring that the industry is on the same page for code compliance and ensuring quality installations. These training activities will ensure that program is successful in stimulating a market for solar thermal water heating systems.

Nevada Power plans to reach out to Southwest Gas Company and explore working on an integrated Residential Solar Thermal Water Heating Program sometime in the future.

Marketing and Outreach

Assessment of Current Market The program will start in challenging economic times with effects of the recession potentially lingering well into 2010. The incentive amount needs to be high enough to motivate a customer to make an investment averaging approximately $7,000 in a solar thermal water heating system. The incentive amount is set at $2,000 for the first year to encourage early adoption and to stimulate the solar thermal market; it will be reduced to $1,500 for following program years if subscription is being met.

In addition to the proposed incentive program, Federal tax incentives are also available. The current Federal tax incentive of up to 30% of system cost is an increase over the previous 30% incentive up to $2,000. In the first year, a higher incentive will be offered to help meet the first year incentive goal. The

Exhibit A

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first year will be a learning year with hiring an implementation contractor, developing materials, and training. It will also get a later start since PUCN approval will not come in time for the program to start on the first of the year. In comparison to the other utilities The SDG&E incentive of up to $1,500 did not achieve the market penetration expected even with extensive training and marketing, the average incentive was $1,250. At APS, the program has done well with the average incentive of $2,000, achieving much higher subscription than the goal for Nevada. The incentive amount will be adjusted based on program subscription.

Marketing Initiatives

The marketing and outreach initiatives will be designed to attract potential consumers and contractors to the Nevada Power Residential Solar Thermal Water Heating Program. The Marketing Plan consists of coordination with both internal and external organizations, outreach programs, and advertising. The components of the Marketing Plan are detailed in the following paragraphs. Marketing efforts will include bill inserts, home and trade shows, and shared marketing campaigns with the other renewable energy programs.

Nevada Power will create marketing materials educating customers about the energy savings opportunities that costeffective measures like lowflow showerheads and electric water heater blankets add to the installation of a Solar Water Heating System. The marketing materials will also encourage customers to purchase ENERGY STAR® rated home appliances and offer other energy savings tips.

Coordination of Marketing Efforts

The Residential Solar Thermal Water Heating Program team will work closely with Nevada Power’s marketing team, marketing consultants, Governmental Affairs, Customer Service, and other departments in the development and deployment of the marketing plan. This coordination will result in a clear message on the company’s position, as well as leverage the company’s resources to promote the program.

Events and Advocacy Organizations

Nevada Power will participate in diverse events to attract new customers and develop interest in the program. Involvement at events will include hosting booths, providing displays, handing out program information, and making formal presentations. These events will be coordinated with the Renewable Generations Program and the Energy Education Group to leverage resources for maximum benefit. Table 7 provides a list of events that are typical of those in which the Residential Solar Thermal Water Heating Program team might participate in a year.

Exhibit A

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Table 7: List of Community Outreach Events

Event Location County and City Senior Fairs Las Vegas Earth Day Fairs Las Vegas NV Energy Senior Energy Assistance Expo Las Vegas SNHBA Building Industry Environmental Fair Las Vegas Latin Chamber of Commerce Business Expo Las Vegas Home Show Extravaganza Las Vegas SolarNV Home Tour Las Vegas

Advertising Efforts

The Residential Solar Thermal Water Heating Program will utilize earned advertising and paid advertising within the allocated budget amounts to achieve the required number of completed installations.

Brochures and Fact Sheets

Solar Thermal fact sheets and brochures will be distributed at all events that program representatives and Energy Education staff attend. Various contractors, consultants, and renewable energy industry participants may also distribute the fact sheets and brochures to their potential customers.

Earned Advertising

Earned advertising is important in that it reaches large numbers of industry participants. It is extremely costeffective and will further promote public relations initiatives such as press releases, television and radio interviews, participation on radio programs, and print stories.

Paid Advertising

Nevada Power will include a Solar Thermal bill insert for program year 2010 prior to the start of the application period. The insert will contain specific information on how the program operates and how to apply and participate in the program.

A website will also be built for the program that will be a resource for customers and contractors alike. The website will contain application information, list of contractors who have completed training, customer and contractor training dates, incentive availability, and valuable links to solar thermal materials.

Nevada Power will use paid advertising to increase participation if installation goals are not being met. In the case that all of the incentive funds for the program year have not been depleted, Nevada Power will immediately begin conceptualizing a new paid advertising strategy. Such strategies will be based primarily on print media such as state and regional newspapers and rural publications. Cross promotional activities will be executed with contractors that are participating in the program to leverage outreach campaigns.

Exhibit A

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Evaluation of Marketing Efforts

During the program year, Nevada Power staff will conduct surveys of program participants; customers, contractors, engineers, industry associates, and other utility staff to gather information on making improvements to the marketing efforts of the program. The survey will ask participants how they learned about the Solar Thermal Pilot program and whether they would agree to share their experience with other interested groups. Those participants in the survey who agree to share their experience may serve in helping to educate potential and current participants about the program. If the initial marketing efforts are not achieving program goals in terms of the amount of applications received, additional market research may be initiated.

Eligible Equipment

All systems components must be new and must not have been previously placed in service in any other location. All systems must have SRCC OG300 certification and be closed loop indirect systems.

SRCC offers two types of certification, OG100 and OG300. OG100 certification certifies only the collector and does not certify the system as a whole; similar to the way a solar panel is rated. OG100 is the way solar panels were originally certified before the industry determined it needed a way to certify the other components of the system to make sure it worked together efficiently and was properly sized. Solar thermal systems must have protection for different climates due to concerns with freezing and scald protection. The OG300 whole system certification was developed in response to this demand. OG300 includes all systems components including, storage tanks, pumps, valves and controls which make up a complete system. Additionally, safety, installation procedures, operation and maintenance manuals are evaluated which are not evaluated for the OG100 rating. Since the solar thermal industry has experienced a poor reputation in the past due to bad installations, the more stringent OG300 rating will be used for the Nevada Power program. This will increase the system safety, since the whole system is designed and certified, and reduce the number of possible improper installations. It was also the majority consensus from the Solar Thermal Workshop held at the utility that OG300 certification be required.

Below is a list of utilities and the type of SRCC rating that is used Nationwide. Some states, such as Utah, have changed the requirement to receive a State tax incentive from OG100 to OG300 in 2009.

• Arizona (OG300) o Tucson Electric Power (OG300)

• Georgia (OG300) • California

o Sacramento Municipal Utility District (OG300) o City of Thousand Oaks (OG300) o California Energy Commission (OG100 and OG300) o Title 24

• Colorado (OG300) • Delaware (OG100 and OG300) • Guam • Hawaii

o Hawaiian Electric (OG100) o Hawaii Electric Light (OG100)

Exhibit A

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o Kauai Island Utility Cooperative (OG100) o Maui Electric (OG100)

• HUD (OG300) • Illinois (OG300) • Louisiana (OG100 and OG300 recommended) • Maryland (OG100 and OG300) • Minnesota (OG100 and OG300) • Montana

o National Center for Appropriate Technology • Nevada

o Public Utilities Commission (OG300) • New Mexico (OG100 and OG300) • North Carolina (OG100 and OG300 highly recommended) • Oregon (OG300)

o Eugene Water and Electric Board (OG300) o City of Ashland

• Pennsylvania o Allegheny Power (OG100) o GPU (OG100) o PECO Energy (OG100) o PPL (OG100)

• Utah o Questar Gas (OG100)

• Vermont (OG100) • Wisconsin (OG100 and OG300)

The Nevada Administrative Code defines renewable energy systems and how they must the metered. The pertinent section of the Nevada Administrative Code states:

“NAC 704.8893 Renewable energy systems: Use of solar thermal systems. (NRS 703.025, 704.210, 704.7821, 704.7828) 1. A solar thermal system which reduces the consumption of electricity, natural gas or propane

and which is used as a solar water heating system qualifies as a renewable energy system only if the solar water heating system is certified by the SRCC. To calculate the number of equivalent kilowatt hours attributable to the solar water heating system, the provider must use: (a) For a solar water heating system that is not rated by the SRCC, a thermal energy meter; (b) For a solar water heating system which has an SRCC rating of 34 million British thermal units

or more, a thermal energy meter; or (c) For a solar water heating system which has an SRCC rating of less than 34 million British

thermal units, a thermal energy meter or the annual performance estimates of the SRCC for the solar water heating system. 2. A solar thermal system which reduces the consumption of electricity, natural gas or propane

and which is used for a purpose other than as a solar water heating system qualifies as a renewable energy system only if the Commission determines that the provider can adequately measure or estimate the number of equivalent kilowatthours attributable to the solar thermal system. (Added to NAC by Pub. Utilities Comm’n by R14401, eff. 5312002; A by R21003, 5212004)”

Other Eligibility Requirements

Exhibit A

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http://www.leg.state.nv.us/NRS/NRS-703.html





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Customers will be required to install costeffective measures like lowflow showerheads and electric water heater blankets to minimize their total water heating requirements.

Application Process

PreApplication

• In the first program year, Nevada Power will advertise the start date of the application period in the media and a variety of public venues including electric utility bill inserts and press releases.

• Nevada Power will notify contractors, distributors, and consultants of the application launch date by email, mail, and phone conferences in the first program year. In subsequent program years, the application process will start on January 1.

• The Solar Thermal website will be updated to include information on participating contractors, incentive levels, and availability of incentives.

Application

• At the start of the program year, Nevada Power will accept applications via the Solar Thermal website, email, fax, and by hand delivery at Nevada Power’s main offices in Las Vegas. Security personnel can also provide customers with applications to be completed and returned.

• The application will start with an initial two week opening application process.

o After the first two weeks of the opening application process, the amount of applications will be tallied. If it is more than the program can support, the applicants will be picked through a lottery method.

o If there is additional budget for incentives, the application process will remain open.

• Applicants may install or energize their solar thermal system anytime after submitting an application. Only applicants who receive written notice of selection to the program will be eligible for an incentive.

• Each application must meet the following requirements or it will be rejected.

o The installation must be on the premises of a Nevada Power grid connected customer. In the case of new construction, the customer at that location must become a grid connected customer before receiving an incentive.

o The proposed system or any parts must be new and never installed in a previous location. o The system should be installed according to the manufacturer’s instructions and all

applicable governmental codes. o The proposed contractor is a Nevada licensed contractor with an active C37 license. o The system must be OG300 certified by the SRCC. o The system must offset 1,500 kWh hours per year of electrical energy to be eligible for

the rebate. o The systems must have a minimum of a 10year manufacturer’s warranty on the solar

collector(s), minimum of 1year and up to 5years on manufacturer’s warranty on the

Exhibit A

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individual balance of the system components, and 1year warranty on installation labor and workmanship.

o The system cannot be shaded between the hours of 10am and 3 pm at any time during the year.

o The incentive will not be greater than 50% of the system cost.

Approval Notification and Progress Tracking

• To be accepted into the program the applicant upon request of the program administrator must provide a copy of the contract for installation or an invoice for the purchase of the equipment.

• The applicants will be notified by certified mail of their status on the active or waiting list.

• A waiting list will be established after the program is fully subscribed.

• No fewer than 10% of the applicants will have a preinspection to. Each site will be reviewed by satellite images to make sure that the installation meets acceptable maximum shading requirements

• Applicants on the active list are instructed to proceed with construction and are given suggested milestones to assist them in completing their projects within the time requirements established by the statute.

The suggested milestones are:

− Within 30 days of written notice of selection to the program, applicant should meet with licensed contractor and schedule completion date.

− Within 60 days of written notice of selection to the program, applicant should enter into a contract with the contractor and have a scheduled start date subject to the receipt of a building permit.

− If Nevada Power has not received confirmation that the applicant is proceeding with the applicant’s project after 120 days of written notice of selection to the program, Nevada Power will inquire if the applicant intends to proceed with their project. Those applicants who respond negatively will be encouraged to withdraw from the program to enable others to participate.

− If Nevada Power has not received confirmation that applicant is proceeding with construction after 180 days of written notice of selection to the program, Nevada Power will remove the customer from the approved application list.

• When the project is complete, the applicant must provide Nevada Power a signed building permit and the contractor’s invoice(s) with prices for services and equipment clearly stated.

Customer Program Completion/Withdrawal and Post Program Surveys

• Upon notification by the customer or the contractor that a project is complete and Nevada Power has received all required closeout documents, the customer will receive an incentive check within 60 days of receipt of all the final documentation.

Exhibit A

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• Nevada Power will conduct an inspection of at least 10% of the installations. These inspections will ensure that the customer installed the specified equipment and complied with the rules of the program.

• Applicants who complete their project will be sent a questionnaire to document their experience and level of satisfaction.

• Applicants who withdraw from the program will be sent a questionnaire along with their withdrawal confirmation letter to determine their reasons for withdrawal.

Incentive Structure

A fixed incentive of $2,000 will be provided for the first year of the program to help drive interest and participation in the program. For the second and third year of the program the incentive will be $1,500. Systems that have been certified by SRCC will be eligible for an incentive upon completion of the installation. The intent of the incentive structure is to start a sustainable solar thermal market in Nevada so incentives will decrease based on demand as the market is developed. The incentive was based on neighboring states that have implemented solar thermal programs such as California and Arizona, taking into account that Nevada does not offer a state income tax incentive. These incentives may need to be adjusted based on program participation in following program years.

20102012 Program Management Plan The overall goals of the program management plan are to ensure that the program is effectively implemented and maintained. The program manager will be responsible for monitoring the program results and making changes as required to reach or exceed program goals.

The discussion is divided into the following sections:

Communications

Tracking procedures

Hiring and training procedures

Contingency planning issues

Communications Communications between the implementation contractor and Nevada Power will be flexibly scheduled based on Nevada Power needs and interest, but will occur at least monthly. Additional status report meetings will be scheduled as warranted based on emerging program developments. The purpose of this communication is to provide continuous feedback and adjust how to administer and implement the program.

Tracking Procedures Applications will be processed as they are received. A waiting list will be implemented if the program receives more incentive applications than can be accommodated in the first two weeks. The time and date of the application will be used to determine whether a program applicant has moved up on the list due to a participant withdraw.

Exhibit A

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Depending on the level of success the program experiences in obtaining the targeted number of installations, customers may be contacted at least three times to ensure that their project is going forward. Contact may be made at 60, 120 and 180 days to make sure the project is progressing as planned. As each project is completed, the complete data will be submitted to the Data Store on a monthly basis.

Contingency Planning Issues In the event that actual incentives and applications lag behind the planned schedule, Nevada Power management and the implementation contractor will work together on responsive measures.

Such contingency plans can include, but are not limited to the following:

Reallocation of media channel marketing efforts

Increasing the marketing budget per unit or

Increasing customer incentive levels per unit

20102012 Data Delivery and Tracking The implementation contractor will submit the Nevada Power management requested information to the Nevada Power Data Store. The Nevada Power Data Store is updated monthly with information on all projects.

Program reporting will focus on:

Progress/status reports for example, cumulativetodate or from/to based information regarding various program activities and volumes/metrics. These metrics will focus on the number of applications received, the number of installations completed, the gross annual kWh impacts, and the program funds expended.

The status of each project which will be updated monthly to ensure that progress is being made.

The intent is to weed out customers who are unlikely to follow through with completing their projects.

M&V Plan The thirdparty Evaluation Measurement &Verification Contractor will perform measurement and verification (“M&V”) activities to confirm the savings being realized through the Residential Solar Thermal Water Heating in the Nevada Power service territory. The performance and installation verifying are required to ensure that the installed systems indeed perform up to expectations and provide real savings. Sample sizes will be determined so real savings can be validated with ± 10% precision at 90% confidence.

M&V Data Store The Nevada Demand Side Management (“DSM”) M&V Data Store Web Portal, referred to as Data Store, is a web portal that has been customized for both Nevada Power Company’s and Sierra Pacific Power Company’s internal use. Its function is to track (DSM) program performance. The Data Store supports the evaluation, measurement, and verification activities by providing the data needed for sample selection and

Exhibit A

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verification of savings data. The Data Store is populated with data provided by the implementation contractor on a monthly basis.

Section B: Program Economic Evaluation


Freeridership The most recently completed analysis of freeridership and NetToGross Ratios (“NTGR”) was conducted by PA Consulting Group (PA) in 2009. The freeridership rate for this program as determined by PA is 1.0%.

Input Data, Description of Sources, and Results of Financial Analysis A copy of the input data sheets and financial models are provided as Technical Appendix # DSM2. These figures were all calculated based upon the information contained in this program data sheet and the materials referenced herein. The following tables summarize the results of the financial analysis for all three scenarios.



Total Resource 0.20 $827,157 $4,063,634 ($3,236,477) $0.20

Utility 0.59 $1,232,700 $2,100,341 ($867,641) $0.10

Participant 0.87 $1,509,528 $1,744,924 ($235,396) $0.08

Ratepayer 0.21 $827,157 $4,015,411 ($3,188,253) $0.19

Societal cost 0.24 $975,231 $4,063,634 ($3,088,403) $0.20

Exhibit A

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Total Resource 0.20 $661,726 $3,250,907 ($2,589,181) $0.20

Utility 0.59 $986,160 $1,680,273 ($694,113) $0.10

Participant 0.87 $1,207,622 $1,395,939 ($188,317) $0.08

Ratepayer 0.21 $661,726 $3,212,329 ($2,550,603) $0.19

Societal cost 0.24 $780,185 $3,250,907 ($2,470,723) $0.20



Total Resource 0.20 $1,033,947 $5,079,542 ($4,045,596) $0.20

Utility 0.59 $1,540,875 $2,625,426 ($1,084,551) $0.10

Participant 0.87 $1,886,909 $2,181,155 ($294,246) $0.08

Ratepayer 0.21 $1,033,947 $5,019,264 ($3,985,317) $0.19

Societal cost 0.24 $1,219,038 $5,079,542 ($3,860,504) $0.20



Total Costs $455,000 $2,315,000


Energy Benefits ($) $3,695 $1,574,469



Exhibit A

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Total Costs $364,000 $1,852,000


Energy Benefits ($) $2,956 $1,259,575





Total Costs $568,750 $2,893,750


Energy Benefits ($) $4,619 $1,968,087











Section C: Supporting Documentation An example Solar Thermal Water Heating Pilot Program is provided as Technical Appendix DSM8.

Exhibit A

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Documents

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