Bonneville Power Administration

Energy Efficiency

Conservation Rate Credit (CRC)

and

Conservation Acquisition

Agreements (CAA)

**[Implementation Manual]{.underline}**

**April 2007 REVISION\***

***\*See list of key changes on page i of this document.***

**Table of Contents**

***For a quick way to get to a particular section if you are viewing an
online or other electronic WORD version of this document, click on the
item you want to view.***

[Implementation Manual Changes Summary - April 2007\*
i](#implementation-manual-changes-summary---april-2007)

[Acronyms and Abbreviations Used in this Document
ii](#acronyms-and-abbreviations-used-in-this-document)

[1.0 Introduction 1](#__RefHeading___Toc166635608)

[1.0.1 Post-2006 Conservation Program Principles and Policies
1](#post-2006-conservation-program-principles-and-policies)

[1.1 Key Features of the Conservation Rate Credit and Conservation
Acquisition Agreement
2](#key-features-of-the-conservation-rate-credit-and-conservation-acquisition-agreement)

[1.1.3 Federal Agency Program 2](#federal-agency-program)

[1.2 Administrative Costs Guidelines and Qualifying Activities
3](#administrative-costs-guidelines-and-qualifying-activities)

[1.2.1 General Administrative Costs Guidelines
3](#general-administrative-costs-guidelines)

[1.2.2 CRC Administrative Cost Guidelines
4](#crc-administrative-cost-guidelines)

[1.2.3 CAA Administrative Cost Guidelines
4](#caa-administrative-cost-guidelines)

[1.2.4 Allowable Administrative Activities
4](#allowable-administrative-activities)

[1.3 Technical Specifications 5](#technical-specifications)

[1.3.1 Residential 6](#residential)

[1.3.2 Irrigated Agriculture 7](#irrigated-agriculture)

[1.3.3 Renewables 7](#renewables)

[1.4 Methods of Determining CRC Credit or CAA Reimbursement Level and
General Requirements
7](#methods-of-determining-crc-credit-or-caa-reimbursement-level-and-general-requirements)

[1.4.1 Methods of Determining CRC Credit or CAA Reimbursement Levels
8](#methods-of-determining-crc-credit-or-caa-reimbursement-levels)

[1.4.2 Measure Requirements and Specifications
10](#measure-requirements-and-specifications)

[1.5 Custom Project Guidelines and Review Process
12](#custom-project-guidelines-and-review-process)

[1.5.1 Measurement and Verification Acceptance Requirement
12](#measurement-and-verification-acceptance-requirement)

[1.5.2 Project Acceptance Requirement
13](#project-acceptance-requirement)

[1.5.3 Reject or Return for Modification
13](#reject-or-return-for-modification)

[1.5.4 Completion report 13](#completion-report)

[1.5.5 Review and Comment 13](#review-and-comment)

[1.5.6 Project Eligibility 14](#project-eligibility)

[1.5.7 Project M &V Plans 15](#project-m-v-plans)

[1.5.8 Custom Project Processes 17](#custom-project-processes)

[1.5.9 Custom Project Proposal Template
17](#custom-project-proposal-template)

[1.6 Reporting Requirements 18](#reporting-requirements)

[1.6.1 Reporting Frequency and Reporting System
18](#reporting-frequency-and-reporting-system)

[1.6.2 Reporting Schedule and Other Important Dates
19](#reporting-schedule-and-other-important-dates)

[1.6.3 Reporting Requirements 19](#reporting-requirements-1)

[1.6.4 Other Utility Funded Conservation
20](#other-utility-funded-conservation)

[1.7 Oversight, Verification, Records, Audits, and Evaluations
20](#oversight-verification-records-audits-and-evaluations)

[1.7.1 Oversight and Verification 20](#oversight-and-verification)

[1.7.2 Records and Audits 21](#records-and-audits)

[1.7.3 Evaluations 21](#evaluations)

[1.8 Agreed Upon Procedures Report for Administrative Activities
21](#agreed-upon-procedures-report-for-administrative-activities)

[1.8.1 Administrative Costs 23](#administrative-costs)

[1.8.2 Frequency 23](#frequency)

[1.8.3 BPA's Right to Audit 23](#bpas-right-to-audit)

[1.9 Records Management 23](#records-management)

[1.10 Program Changes 24](#program-changes)

[1.11 Official Interpretations 24](#official-interpretations)

[1.12 Regional Technical Forum 24](#regional-technical-forum)

[1.12.1 Role of the RTF 25](#role-of-the-rtf)

[1.12.2 Relationship to BPA 25](#relationship-to-bpa)

[1.12.3 Skills 25](#skills)

[1.12.4 The RTF's Role in the CRC and CAA
26](#the-rtfs-role-in-the-crc-and-caa)

[1.12.5 Process for Petitioning the RTF
26](#process-for-petitioning-the-rtf)

[2.0 Conservation Rate Credit 29](#conservation-rate-credit)

[2.1 General Overview of the Conservation Rate Credit
29](#general-overview-of-the-conservation-rate-credit)

[2.2 Calculation of the Conservation Rate Credit
29](#calculation-of-the-conservation-rate-credit)

[2.3 Sources of CRC Qualifying Load Data
29](#sources-of-crc-qualifying-load-data)

[2.4 Calculation and Applications of the Monthly Rate Credit
30](#calculation-and-applications-of-the-monthly-rate-credit)

[2.5 Incremental Spending 30](#incremental-spending)

[2.6 Utilities Choosing to Participate in the CRC
30](#utilities-choosing-to-participate-in-the-crc)

[2.7 Utilities Choosing Not to Participate in the CRC
30](#utilities-choosing-not-to-participate-in-the-crc)

[2.8 Rules for Pooling Organizations
31](#rules-for-pooling-organizations)

[2.9 Low-Income Weatherization 31](#low-income-weatherization)

[2.10 Contributions to Organizations Implementing Cost-Effective
Conservation
32](#contributions-to-organizations-implementing-cost-effective-conservation)

[2.11 Performance Reviews and Remedies
33](#performance-reviews-and-remedies)

[2.12 Final Reconciliation Process 33](#final-reconciliation-process)

[3.0 Conservation Acquisition Agreement
35](#conservation-acquisition-agreement)

[3.1 Procedure for Establishing a Conservation Acquisition Agreement
35](#procedure-for-establishing-a-conservation-acquisition-agreement)

[3.1.1 Establishing a New Agreement 35](#establishing-a-new-agreement)

[3.2 Conservation Acquisition Agreement Structure
35](#conservation-acquisition-agreement-structure)

[3.2.1 Contract Body and Exhibit 35](#contract-body-and-exhibit)

[3.2.2 Standard Offers 35](#standard-offers)

[3.2.3 Customer-Specific Agreements 36](#customer-specific-agreements)

[3.2.4 Change in Requirements for Standard Offers & Negotiated
Agreements
36](#change-in-requirements-for-standard-offers-negotiated-agreements)

[3.3 Changes to Implementation Budget Amounts
36](#changes-to-implementation-budget-amounts)

[3.3.1 Periodic Reviews by BPA 36](#periodic-reviews-by-bpa)

[3.3.2 Requests for Additional Budget Amounts
36](#requests-for-additional-budget-amounts)

[4.0 Renewables Option of the Conservation Rate Credit
37](#renewables-option-of-the-conservation-rate-credit)

[4.1 Purpose and Scope 37](#purpose-and-scope)

[4.2 Objectives of the Renewables Option
37](#objectives-of-the-renewables-option)

[4.3 Definitions 37](#definitions)

[4.4 General RO Requirements 40](#general-ro-requirements)

[4.5 What is a Qualified Renewable Energy Facility
40](#what-is-a-qualified-renewable-energy-facility)

[4.6 Metering Requirements 41](#metering-requirements)

[4.7 Power Purchases from Power Marketers
42](#power-purchases-from-power-marketers)

[4.8 Transfer of RO Claims for Renewable Energy Output
42](#transfer-of-ro-claims-for-renewable-energy-output)

[4.9 Environmental Attributes from Renewable Energy Sources
42](#environmental-attributes-from-renewable-energy-sources)

[4.10 Renewables Purchases from BPA 44](#renewables-purchases-from-bpa)

[4.11 Third Party Blended Renewable Resource Products
44](#third-party-blended-renewable-resource-products)

[4.12 Community Owned Renewable Projects
45](#community-owned-renewable-projects)

[4.13 Renewable Education Programs 45](#renewable-education-programs)

[4.14 Donations 45](#donations)

[4.15 Contributions to Qualified Research Development & Demonstration
Activities
45](#contributions-to-qualified-research-development-demonstration-activities)

[4.15.1 Eligible RD&D Activities 46](#eligible-rdd-activities)

[4.15.2 Criteria used to Evaluate Proposed Renewable Resource Research,
Development, and Demonstration Activities
47](#criteria-used-to-evaluate-proposed-renewable-resource-research-development-and-demonstration-activities)

[4.16 Renewable Energy Purchased from qualifying Renewable Energy
Facilities
48](#renewable-energy-purchased-from-qualifying-renewable-energy-facilities)

[4.17 Effects on Net Requirements Load
53](#effects-on-net-requirements-load)

[4.18 Duration of the RO and Renewable Energy Purchases
53](#duration-of-the-ro-and-renewable-energy-purchases)

[4.19 Administration 53](#administration)

[4.20 Optional Pre-Application 53](#optional-pre-application)

[4.21 Reporting requirements 54](#reporting-requirements-2)

[4.22 Additional Facility Reporting Requirements
55](#additional-facility-reporting-requirements)

[4.23 True-up for Generation-Based Claims
55](#true-up-for-generation-based-claims)

[4.24 Procedures for Processing Reports and Applications
55](#procedures-for-processing-reports-and-applications)

[4.25 Rules for Pooling Renewables 56](#rules-for-pooling-renewables)

[4.26 Technical Specifications for PV systems and Solar Water Heaters
56](#technical-specifications-for-pv-systems-and-solar-water-heaters)

[5.0: Attachments 60](#attachments)

[Attachment A: Reimbursement Strategies and Levels
61](#attachment-a-reimbursement-strategies-and-levels)

[RESIDENTIAL SECTOR 69](#residential-sector)

[COMMERCIAL SECTOR 78](#commercial-sector)

[AGRICULTURAL SECTOR 83](#agricultural-sector)

[INDUSTRIAL SECTOR 87](#industrial-sector)

["OTHER" SECTOR 90](#other-sector)

[ENDNOTE 90](#endnote)

[Attachment B: Low-Income Weatherization Measure and the Low-Income
Prime Window Replacement Lists
94](#attachment-b-low-income-weatherization-measure-and-the-low-income-prime-window-replacement-lists)

[Attachment C: Fundamental Requirements Related to Federal Due Diligence
102](#attachment-c-fundamental-requirements-related-to-federal-due-diligence)

[Attachment D: Final Post-2006 Conservation Structure (6/28/05)
106](#attachment-d-final-post-2006-conservation-structure-62805)

**List of Tables**

[Table 1: New Renewable Facility Credit
50](#__RefHeading___Toc166635720)

[Table 2: Caps on Credit for Existing Renewable
52](#__RefHeading___Toc166635721)

[Table 3: Renewable Credit Proxy Values
52](#__RefHeading___Toc166635722)

[Table R-1: Credits/Reimbursements for Heat Pumps
71](#__RefHeading___Toc166635723)

[Table R-2: Low-Income Window Replacement Measure Eligibility
73](#__RefHeading___Toc166635724)

[Table R-3: Zonal/Heat Pump Reimbursements for ENERGY STAR Site-Built
Homes 74](#__RefHeading___Toc166635725)

[Table R-4: Credits/Reimbursements for ENERGY STAR Manufactured Homes
74](#__RefHeading___Toc166635726)

[Table R-4A: Credits/Reimbursements for MF New Construction
75](#__RefHeading___Toc166635727)

[Table R-4B: MF New Construction Specifications -- Summary ^1^
75](#__RefHeading___Toc166635728)

[Table R-5: Credits/Reimbursements for Line Voltage Electronic
Thermostats per Home 77](#__RefHeading___Toc166635729)

[Table R-6: Credits/Reimbursements for PTCS Duct Sealing in Manufactured
Homes (All climate zones) 77](#__RefHeading___Toc166635730)

[Table R-7A: Refrigerator Credit/Reimbursement
79](#__RefHeading___Toc166635731)

[Table R-8: Credit/Reimbursement for ENERGY STAR Commercial Clothes
Washers 80](#__RefHeading___Toc166635732)

[Table R-9: Credits/Reimbursements for Standard and High Performance
T8 Lamps and Ballasts 81](#__RefHeading___Toc166635733)

[Table R-10: Credit/Reimbursement Commercial & Industrial New
Construction Lighting Program\* 82](#__RefHeading___Toc166635734)

[Table R-11: Credits/Reimbursements for Agricultural Measures
84](#__RefHeading___Toc166635735)

[Table R-12: Credits/Reimbursements for Irrigation System Motors
85](#__RefHeading___Toc166635736)

[Table R-13: Credits/Reimbursements for Medium Voltage Irrigation System
Motors (600v to 5,000v) 86](#__RefHeading___Toc166635737)

[Table R-14: Credits/Reimbursements for DSEI and CVR
90](#__RefHeading___Toc166635738)

[Table R-A-1: Examples of Claims under CRC
93](#__RefHeading___Toc166635739)

[Table R-A-2: Example of Claims on the Bilateral Side
93](#__RefHeading___Toc166635740)

[Table B-1: Low Income Weatherization List
94](#__RefHeading___Toc166635741)

[Table B-2: Low-Income Prime Window Replacement List
100](#__RefHeading___Toc166635742)

# Implementation Manual Changes Summary - April 2007\*

+-------------------+-------------------------------------+-----------+
| **Title**         | **Description**                     | **Imple   |
|                   |                                     | mentation |
|                   |                                     | Manual    |
|                   |                                     | Page      |
|                   |                                     | Number**  |
+-------------------+-------------------------------------+-----------+
| Cost Cap Raised   | Industrial, non-lighting            | > 9, 10,  |
| to 70 percent     | commercial, and non-standard        | > 11, 62, |
|                   | contracts cost cap will be raised   | > 63, 69, |
|                   | to 70 percent, effective February   | > 76, 78, |
|                   | 1, 2007.                            | > 81, 83, |
|                   |                                     | > 86-88,  |
|                   |                                     | > 90      |
+-------------------+-------------------------------------+-----------+
| Freeze Resistant  | Explicitly lists Freeze Resistant   | > 86      |
| Stock Water       | Stock Water Tanks/Fountains and the |           |
| Tanks/Fountains   | associated credit/reimbursements.   |           |
+-------------------+-------------------------------------+-----------+
| Industrial        | If energy savings from lighting     | > 11, 69, |
| Lighting Custom   | projects are over 100,000 kWh, BPA  | > 87      |
| Project Option    | will allow utilities to use the     |           |
|                   | custom project approach.            |           |
+-------------------+-------------------------------------+-----------+
| Geothermal Heat   | -   Remove language regarding a     | > 76      |
| Pumps             |     potential change to the         |           |
|                   |     credit/reimbursement based on   |           |
|                   |     measure cost. Measure           |           |
|                   |     credit/reimbursement remains    |           |
|                   |     unchanged.                      |           |
|                   |                                     |           |
|                   | -   Clarify that ground source heat |           |
|                   |     pump systems must be new        |           |
|                   |     systems, not replacement of     |           |
|                   |     existing hardware that failed.  |           |
+-------------------+-------------------------------------+-----------+
| ENERGY STAR^®^    | Remove language regarding a         | > 78      |
| Dishwashers       | potential drop in the               |           |
|                   | credit/reimbursement based on       |           |
|                   | measure cost. Measure remains the   |           |
|                   | same.                               |           |
+-------------------+-------------------------------------+-----------+
| Clothes Washer    | -   Remove old language related to  | > 77      |
| Clarification     |     January 1, 2007 specification   |           |
|                   |     change.                         |           |
|                   |                                     |           |
|                   | -   Clarify \$70 reimbursement for  |           |
|                   |     verified electric water heat,   |           |
|                   |     \$25 reimbursement for gas or   |           |
|                   |     unverified electric water heat. |           |
|                   |     Measure remains the same.       |           |
+-------------------+-------------------------------------+-----------+
| HZ1 Heat Pumps    | Starting October 1, 2007, BPA will  | > 70, 71  |
| with Ducts Inside | no longer provide                   |           |
|                   | credit/reimbursements for air       |           |
|                   | source heat pumps with \"ducts      |           |
|                   | inside\" located in heating zone 1. |           |
+-------------------+-------------------------------------+-----------+
| 9.5 Heat Pumps    | Starting October 1, 2007, BPA will  | > 70, 71  |
|                   | remove the higher                   |           |
|                   | credit/reimbursement tier for air   |           |
|                   | source heat pumps with HSPF 9.5.    |           |
+-------------------+-------------------------------------+-----------+
| Annual Audit      | State/CPA Audit reports are due     | > 23      |
| Report Timing     | once per year, but not necessarily  |           |
|                   | on March 31.                        |           |
+-------------------+-------------------------------------+-----------+
| Low Income Single | Single pane windows with storm      | > 73      |
| Pane Windows      | windows on low income residences    |           |
|                   | qualify as \"single pane\"          |           |
|                   | existing.                           |           |
+-------------------+-------------------------------------+-----------+
| Add Rebuilt       | BPA will reimburse \$0.75 per       | > 84      |
| Wheel-Line        | rebuilt wheel-line leveler.         |           |
| Levelers          |                                     |           |
+-------------------+-------------------------------------+-----------+

**\***Changes made to the Implementation Manual prior to April 2007 that
were posted to the BPA Energy Efficiency Web site as errata are not
included in the summary of changes. Those errata have been incorporated
into this document.

# Acronyms and Abbreviations Used in this Document

> (Additional definitions associated with the Renewables Option of the
> CRC are provided in section 4. Definitions associated with the
> Reimbursement Strategies and Levels are located in attachment A.)

  ----------------- -----------------------------------------------------------------
  **AE:**           BPA Power Account Executive

  **AgSO:**         Agriculture Standard Offer

  **AICPA:**        American Institute of Certified Public Accountants

  **Alliance (or    Northwest Energy Efficiency Alliance
  NEEA):**          

  **BPA:**          Bonneville Power Administration

  **C&ISO:**        Commercial and Industrial Standard Offer

  **C&RD:**         Conservation and Renewables Discount rate credit (expired
                    September 30, 2006)

  **CAA**           Conservation Acquisition Agreement

  **CAP:**          Community Action Partnership (or Program)

  **CEC:**          California Energy Commission

  **CEE:**          Consortium for Energy Efficiency

  **ConAug:**       Conservation Augmentation (expired September 30, 2006)

  **COTR**          BPA Contracting Officer's Technical Representative

  **Council:**      Northwest Power and Planning Council

  **CP:**           Custom project

  **CPA:**          Certified Public Accountant

  **CRC:**          Conservation Rate Credit

  **DSEI:**         Customer distribution system efficiency improvements

  **CVR**           Conservation voltage regulation

  **EE:**           Energy Efficiency (BPA)

  **EER:**          Energy Efficiency Representative (BPA)

  **EPP:**          Environmentally Preferred Power rate schedule

  **ESO+ (or ESO    Expanded Standard Offer (for Commercial and Industrial Lighting)
  Plus):**          

  **ETO:**          Energy Trust of Oregon

  **FAF:**          Forced air furnace

  **FPS:**          Firm Power Products and Services rate schedule

  **HDD:**          Heating degree days

  **HP:**           High performance, heat pump, [OR]{.underline} horsepower,
                    depending on context.

  **HSPF:**         Heating Season Performance Factor

  **HTR:**          Hard to reach (market)

  **HVAC:**         Heating, ventilation, and air conditioning

  **HZ:**           Heating zone

  **IOU:**          Investor-owned utility

  **kWh:**          Kilowatt-hour -- measure of electric energy

  **LML:**          Long measure life

  **LO:**           Lost opportunity

  **Low-Income:**   Low-income, as defined for the federal Weatherization Assistance
                    Program, is 150 percent of the poverty income levels that are
                    posted on the program Web site:
                    [[http://www.waptac.org/]{.underline}](http://www.waptac.org/).
                    If a statewide definition has been approved for the federal
                    low-income weatherization program in that state, that level will
                    substitute for the default level provided above.

  **M&V:**          Measurement and verification

  **MB:**           Market barriers

  **MEF:**          Modified energy factor

  **MF:**           Multifamily home

  **MH:**           Manufactured home

  **Mid C:**        Mid-Columbia -- A regional wholesale energy market

  **MW:**           Megawatt -- measure of electric energy

  **MWh:**          Megawatt-hour -- measure of electric energy

  **NCAT:**         National Center for Appropriate Technology

  **NEEA (or        Northwest Energy Efficiency Alliance
  Allliance):**     

  **NEEM:**         ENERGY STAR^®^ Manufactured Housing was formerly known as
                    Northwest Energy Efficient Manufactured Housing Program and
                    before that as Super Good Cents Manufactured Housing.

  **NEMA:**         National Electrical Manufacturers Association

  **NR:**           New Resource Firm Power rate schedule

  **ODP:**          Open drip proof

  **PCA:**          Purchase of Conservation Agreement

  **PF:**           Priority Firm rate schedule

  **PTCS™:**        Performance Tested Comfort Systems certification for duct sealing
                    and heat pump commissioning

  **PV:**           Photovoltaic (solar)

  **RD&D:**         Research, development, and demonstration

  **REC:**          Renewable Energy Credit

  **ResSO:**        Residential Standard Offer

  **RL:**           Residential Load rate schedule

  **RO:**           Renewables Option of the Conservation Rate Credit

  **RTF:**          Regional Technical Forum

  **SEER:**         Seasonal Energy Efficiency Ratio

  **SF:**           Single family (or site built home)

  **SIS:**          Scientific Irrigation Scheduling

  **Std:**          Standard

  **TEFC:**         Totally enclosed fan cooled motor

  **TRC:**          Total resource cost

  **TRCs:**         Tradable Renewable Certificates

  **TSP:**          Technical Service Proposal

  **WTP:**          Willingness to Pay (BPA)
  ----------------- -----------------------------------------------------------------

**Sector Definitions**

+--------------+-------------------------------------------------------+
| **Agr        | > Electrical energy used by a farm business whose     |
| icultural:** | > primary purpose is land cultivated for food         |
|              | > production or land used for breeding or raising of  |
|              | > domestic live stock (including fish, oysters,       |
|              | > etc.).                                              |
|              | >                                                     |
|              | > Any on-farm measures are considered                 |
|              | > \"agricultural,\" with the exception of major       |
|              | > processing of farm products on-site.                |
|              | >                                                     |
|              | > This sector also includes any lands involved in     |
|              | > major irrigation loads, regardless of the business  |
|              | > purpose.                                            |
|              | >                                                     |
|              | > The distinction between agricultural and industrial |
|              | > generally rests with the property line. Processes   |
|              | > off farm are industrial; on farm are agricultural.  |
|              | >                                                     |
|              | > Examples:                                           |
|              |                                                       |
|              | -   Dairies and storage of milk is agricultural;      |
|              |     pasteurizing, homogenizing, dehydrating, and      |
|              |     bottling of milk, and ice cream. Cheese and       |
|              |     butter production is industrial.                  |
|              |                                                       |
|              | -   Potato storage on farm is agricultural; potato    |
|              |     storage at a co‑op or at a processor is           |
|              |     industrial.                                       |
|              |                                                       |
|              | -   Pumping for fish farms and refrigeration of fish  |
|              |     before shipping is agricultural; freezing,        |
|              |     storing, and canning of fish is industrial.       |
|              |                                                       |
|              | -   Orchard fruit stored temporarily on the farm,     |
|              |     like grain, milk, or potatoes, is agricultural,   |
|              |     but if it is centrally stored by a middle-man,    |
|              |     co-op, or processor, it is industrial.            |
|              |                                                       |
|              | -   Wineries are agricultural if the wine is grown,   |
|              |     stored, pressed, cooled, and even bottled on the  |
|              |     farm.                                             |
|              |                                                       |
|              | -   Golf courses with irrigation load are             |
|              |     agricultural for the purposes of their irrigation |
|              |     loads.                                            |
|              |                                                       |
|              | > The nature of the choice is tied to the load and    |
|              | > the process as much as it is to the building or     |
|              | > business type.                                      |
+--------------+-------------------------------------------------------+
| **C          | > An energy-consuming sector that consists of         |
| ommercial:** | > service-providing facilities and equipment of       |
|              | > businesses; federal, state, and local governments,  |
|              | > and other private and public organizations.         |
|              | >                                                     |
|              | > The commercial sector is generally defined as       |
|              | > non-manufacturing business establishments,          |
|              | > including hotels, motels, restaurants, wholesale    |
|              | > businesses, retail stores, and health, social, and  |
|              | > educational institutions.                           |
+--------------+-------------------------------------------------------+
| **I          | > An inclusive term for any fixed equipment,          |
| ndustrial:** | > building, or complex for the production of goods in |
|              | > connection with, or as part of, any process or      |
|              | > system, and, in general, within which the majority  |
|              | > of energy use is not devoted to HVAC or to meet the |
|              | > potable hot water energy load requirements of a     |
|              | > facility.                                           |
|              | >                                                     |
|              | > Also included are electric distribution systems,    |
|              | > conservation voltage regulation (CVR), and          |
|              | > water/waste-water systems.                          |
|              | >                                                     |
|              | > Any storage, processing (transportation), or other  |
|              | > activities involving farm products off the farm is  |
|              | > considered industrial food processing.              |
+--------------+-------------------------------------------------------+
| **Re         | > Any electric energy conservation measure that is    |
| sidential:** | > used in a residential setting. This includes single |
|              | > family residences, multifamily residential          |
|              | > structures (up to 3 stories high), and manufactured |
|              | > homes.                                              |
|              | >                                                     |
|              | > Excluded are temporary residences such as hotels,   |
|              | > motels, nursing homes, dorms, or any other          |
|              | > generally temporary quarters.                       |
|              | >                                                     |
|              | > (*Multifamily housing above three stories is        |
|              | > considered commercial.)*                            |
+--------------+-------------------------------------------------------+
| **Other:**   | > Other non-building energy-consuming                 |
|              | > facilities/devices, such as LED traffic signals.    |
+--------------+-------------------------------------------------------+

# 1.0 Introduction

Two major conservation initiatives were developed for the Bonneville
Power Administration's (BPA) Post-2006 Conservation Portfolio of
Programs \-- the Conservation Rate Credit (CRC) and Conservation
Acquisition Agreements (CAA). These initiatives replaced the
Conservation and Renewables Discount (C&RD) and Conservation
Augmentation (ConAug) initiatives.

*(The words utility and customer are used interchangeably to indicate
CRC and CAA participants.)*

The new initiatives are separate conservation-funding mechanisms with
many common and complementary features. Both initiatives use the
Regional Technical Forum's (RTF) Planning, Tracking, and Reporting (PTR)
System (<http://ptr.nwcouncil.org/>), its list of qualifying measures,
verification protocols, and custom project approval processes. The CRC
credit appears on utilities' monthly power bills. The credits are
substantiated by acceptable reports submitted by the customer. The CAA
reimbursement is based on acceptable invoices submitted by the customer.

The basis for this document is the "Final Post-2006 Conservation
Structure" (June 28, 2005) document (attachment D) and the "Post-2006
Conservation Program Reimbursement Strategies and Levels" (April 2007)
document (attachment A) both of which are posted on the BPA Energy
Efficiency (EE) Web site.[^1]

### 1.0.1 Post-2006 Conservation Program Principles and Policies

Five conservation principles were included in BPA's Final Record of
Decision on the short term Regional Dialogue Policy (February 2005) and
provide the framework for future conservation program design purposes.
In addition to the five principles, seven key policy directives guide
BPA's Post-2006 Conservation Program Structure. The principles and
policy directives are posted on the EE Web site at
<http://www.bpa.gov/Energy/N/projects/post2006conservation/pdf/Post2006Proposal.pdf>.

In addition, limited renewables measures are available to assist
utilities and BPA in continuing to be major supporters of renewable
generation in the Pacific Northwest.

This document is organized into five sections:

-   Section 1 describes the implementation guidelines common to both
    funding sources (i.e., CRC and CAA);

-   Section 2 describes the implementation guidelines specific to the
    CRC;

-   Section 3 describes the implementation guidelines specific to the
    CAA;

-   Section 4 describes the implementation guidelines for the Renewables
    Option under the CRC;

-   Section 5 (attachments) provides additional details or specific
    documents to assist participants in implementing the CRC or CAA.

## 1.1 Key Features of the Conservation Rate Credit and Conservation Acquisition Agreement

> Key features of the CRC and CAA initiatives include:

-   Voluntary choice by power customers whether to participate and to
    what extent they participate;

-   CRC funding is proportional to the amount of power purchased from
    BPA. CAA funding levels are negotiated for each CAA contract;

-   The intent of both funding initiatives is to achieve conservation at
    the lowest possible cost;

-   BPA's agreements are between the customer and BPA, not between the
    customer's consumers and BPA. The utilities will design and run
    programs, and BPA will design reimbursement rules and levels for the
    participating utilities and federal customers;

-   Local control and accounting simplicity will be reflected in BPA's
    willingness to pay (WTP) for achieved and measured conservation at
    set levels of credit/reimbursement (deemed reimbursement, or cents
    per kilowatt-hour (kWh) up to a cap), allowing utilities to
    determine how to design and operate their own programs to deliver
    the savings;

-   Administrative support will be allowed to assist utilities for
    planning and implementation of conservation programs;

-   Credit levels in the CRC are generally consistent with the
    reimbursement levels in the CAA;

-   CRC credits and CAA reimbursements are available for cost-effective
    conservation measures in all sectors (i.e., residential, commercial,
    industrial, agricultural, and other); and

-   Information on individual utility expenditures and achievements
    resulting from BPA funding will be made available to the public, as
    appropriate.

### 1.1.3 Federal Agency Program

In addition to using the CAA and CRC as the primary mechanisms for
delivering energy savings from participating utility customers, BPA's
portfolio of energy efficiency programs will continue to include
acquiring energy savings from projects implemented under Interagency
Agreements, primarily with directly-served federal agency customers.
These additional energy savings contribute to achieving the regional
conservation goals at the lowest possible cost.

When BPA funds are used to pay for electric energy savings from federal
facilities, only cost-effective conservation, as defined by the total
resource cost (TRC) test in the Northwest Power and Conservation
Council's (Council) most current Power Plan and approved by BPA, will be
eligible for such reimbursement. In addition, the Post-2006 CRC and CAA
Implementation Manual, procedures, and methods, generally equivalent to
those used in CRC/CRC utility relationships will be used for federal
agency project relationships, including applicable M&V and oversight
procedures.

## 1.2 Administrative Costs Guidelines and Qualifying Activities

### 1.2.1 General Administrative Costs Guidelines

-   The administrative cost allowance is intended to cover internal
    utility administrative costs associated with the delivery of
    conservation including, but not limited to, general awareness
    building and general marketing (e.g., Web site maintenance,
    efficiency messaging, generic newsletters), record keeping,
    reporting, staff time to assist with BPA evaluations, overhead,
    contribution to internal staffing, administrative costs of a third
    party that implements the utility's conservation programs or that
    are passed through to an "implementation pool;"

-   The administrative allowance is above and beyond the BPA WTP
    parameters;

-   Utilities can decide when they submit each CRC report or CAA invoice
    the percentage of their funds they want to claim for the
    administrative allowance, up to the allowable limit. A utility is
    allowed to have different administrative allowance percentages for
    CRC and CAA;

-   State auditor or Certified Public Accountant (CPA) review of the
    utility will be required to verify whether the utility has incurred
    administrative costs related to the pursuit of conservation that are
    equal to or greater than the administrative allowance the utility
    has claimed. See Section 1.8 for more information; and

-   BPA will not require documentation directly supporting the
    administrative allowance amount elected on each invoice. However,
    documentation that actual administrative costs are equal to or
    exceed the allowance must be retained for BPA or BPA's
    representative (state auditor's office or CPA).

### 1.2.2 CRC Administrative Cost Guidelines

-   Utilities with more than 7.5 average megawatts (aMWs) of net
    requirements load can claim up to 15 percent of their qualifying
    claims;

-   Small utilities with 7.5 aMWs or less of net requirements load can
    claim up to 30 percent of their qualifying claims;

-   Pooling utilities, regardless of total load or the size of
    individual loads, can only claim a maximum of 15 percent of their
    qualifying claims, unless the total load of all of the pooling
    utilities is 7.5 aMW or less, in which case they can claim up to 30
    percent of the qualifying claims;

-   A qualifying claim is defined as an installed qualifying
    cost-effective electric conservation measure. Examples that wouldn't
    qualify for administrative allowances include:

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-   Renewables claim;

-   Third Party contract for cost-effective energy conservation, unless
    specifically approved by BPA as qualifying for administrative cost
    recovery; or

-   The Northwest Energy Efficiency Alliance (NEEA).

Utilities are allowed discretion on the amount and timing of
administrative cost claims during the rate period. However, at the end
of the rate period (September 30, 2009) utilities are required to true
up their administrative claims to meet both of the following
requirements:

-   A utility's administrative cost claims cannot exceed the allowable
    percentage (i.e., 15 percent or 30 percent) of their qualifying
    claims, as defined above; and

-   A utility's administrative cost claims cannot exceed the amount of
    utility administrative costs that the utility has actually incurred
    and can document as described in "Section 1.2.4 Allowable
    Administrative Activities." Utilities are required to document
    allowable administrative costs via an Agreed Upon Procedures Report
    as described in "Section 1.8 Agreed Upon Procedures Report for
    Administrative Activities."

### 1.2.3 CAA Administrative Cost Guidelines

-   A utility's administrative allowance is claimed as a percentage of
    their invoiced measures reported with each invoice; and

-   BPA will pay an administrative allowance of up to 15 percent of the
    actual accepted invoiced amount. On each invoice submitted, the
    utility may elect the percentage of administrative allowance for
    that invoice.

### 1.2.4 Allowable Administrative Activities

Allowable administrative costs are those costs spent in support of
energy conservation activities described in this document. In general
terms this can include costs for staff-related administrative costs,
marketing, general energy efficiency awareness building, training,
technical assistance costs, evaluations, equipment, and supplies. Each
of these categories is described below. This is not an exhaustive list.
If utilities have any questions, they can contact BPA for clarification.
(See section 1.2.1.)

**Staff Costs:** Staff costs are the actual labor costs used to operate
the utility's conservation program, including program planning, design,
and implementation, and includes:

-   Direct costs incurred for the implementation of CRC or CAA
    conservation activities, including utility program staff, and
    sub-contracts;

-   Contracted staff support. Support may be required for activities
    such as data entry for planning, tracking, and reporting systems;
    administering credits and reimbursement; or for field staff to
    verify installations or other end use activities;

-   Management personnel involved in the supervision of program staff
    and contractors;

-   Administrative support such as secretarial support, contractors, and
    managers associated with the utility's program-related activities;
    and

-   The utility's conservation-related share of indirect overhead. This
    can include the utility's cost related to preparing the Agreed Upon
    Procedures Report.

**Marketing Costs:** The following costs are appropriate:

-   Market research, development of advertisements, and promotional
    materials;

-   Production of materials for mass distribution;

-   Marketing material distribution costs; and

-   Airtime on radio or television in support of cost-effective
    conservation.

**Other Resources:** Materials, equipment and supplies; training, and
other resources required to operate the utility's program. For example:

-   Computer hardware;

-   Technical equipment (metering equipment, software programs);

-   Marketing training and technical training, including certain
    training for engineers for specific applications and other required
    technical training; and

-   Transportation/travel costs. Travel costs are to be capped at those
    allowed under the Federal Travel Regulations.
    (<http://www.gsa.gov/>).

## 1.3 Technical Specifications

BPA's WTP is based on estimated or verified energy savings that will
persist over the life of the measure. BPA's WTP and the savings
estimates derived from program evaluations and research projects that
are directly related to the standards and quality assurance processes
embodied in the programs are listed below. BPA will only accept claims
for CRC credit or CAA invoices for measures in compliance with the
applicable technical standards described below.

### 1.3.1 Residential

**Weatherization -** BPA will accept claims for CRC credit or CAA
invoices for weatherization of existing electrically-heated
single-family, multifamily, and manufactured homes only on the condition
that these residences have been retrofitted in compliance with the most
recent site-built weatherization specifications or mobile home
weatherization specifications, which are available in the PTR, under
Downloads.

**ENERGY STAR*^®^* Homes Northwest -** BPA will accept claims for CRC
credit or CAA invoices for new electrically-heated homes certified to be
in compliance with ENERGY STAR Homes Northwest standards by the state
certifying organization (SCO). Information regarding the ENERGY STAR
Homes Northwest Program is available at
<http://www.northwestenergystar.com/>. *Note: BPA will not accept CRC
claims for credit or CAA invoices for homes built to "TCO #9 -- hybrid
gas unit heaters with electric resistance zonal heaters."*

**ENERGY STAR** **Manufactured Homes** (formerly Super Good Cents^^ for
Manufactured Housing or Northwest Energy Efficient Manufactured Housing
(NEEM)) - BPA will accept claims for CRC credit or CAA invoices for
reimbursement for measures for energy efficiency upgrades to new
electrically-heated manufactured homes only on the condition that these
residences have been designed, constructed, and certified in compliance
with the most recent ENERGY STAR standards.

**Performance Tested Comfort Systems** (PTCS) - BPA will accept claims
for CRC credit or CAA invoices for reimbursement for PTCS-certified
upgrades to electric heating systems including: duct sealing, heat pump
installation, and heat pump commissioning. The PTCS specifications are
available in the PTR, under Downloads.

PTCS certifications must be from an RTF-recommended and BPA-approved
PTCS service provider. The following organizations are currently
approved to provide PTCS duct sealing training, PTCS certification, and
PTCS quality assurance.

-   Oregon Department of Energy. Contact: Brady Peeks (503) 373-7561;

-   Washington State University, Energy Program. Contact: Marla
    Hacklander (509) 477‑6703;

-   Idaho Department of Water Resources, Energy Division. Contact:
    Ken Eklund (208) 287-4895; and

-   NCAT (Montana) is under consideration to provide PTCS certification
    services in Montana for existing homes. Contact the CRC or CAA
    Program Manager for additional information.

Utilities should work directly with the appropriate state energy office
to acquire the needed PTCS certification for each measure claimed.

Utilities can also petition the RTF for an exemption from the PTCS third
party quality assurance requirements.

**Air Source and Ground Source Heat Pump Specifications -** BPA will
accept claims for CRC credit or CAA invoices for reimbursement for the
installation of electric heat pumps in residences regardless of the date
of construction on the condition that:

-   Such residences have had their heat pump installation certified
    under PTCS specifications. This includes PTCS certified duct systems
    (where applicable) and PTCS certified controls and commissioning;

-   Homes where the duct system is inside the heated envelope of the
    home (i.e., heated basements) are not required to have the duct
    systems certified under the PTCS specifications as any heat loss is
    inside the heated envelope of the home;

-   If air-source, the heat pump is installed in accordance with the air
    source heat pump installation specifications, which are available in
    the PTR, under Downloads.

-   If ground-source, the heat pump is installed in accordance with the
    geothermal heat pump design and installation standards, which are
    available in the PTR, under Downloads.

### 1.3.2 Irrigated Agriculture

**Irrigated Agriculture Specifications** - BPA will accept claims for
CRC credit or CAA invoices for reimbursement for verified energy savings
of energy efficiency upgrades to new or existing irrigation systems and
water management only on the condition these facilities have been
designed, constructed, and inspected in substantial compliance with the
most recent irrigated agriculture specifications, which are available in
the PTR, under Downloads.

### 1.3.3 Renewables

BPA will accept claims for CRC credit for renewable energy systems that
meet the specifications for direct application renewables (i.e.,
photovoltaic systems and solar water heating systems), which can be
found in section 4.

## 1.4 Methods of Determining CRC Credit or CAA Reimbursement Level and General Requirements

This section is based on BPA's Phase 2 Reimbursement Levels and
Strategies document updated April 1, 2007, which is included as
attachment A of this document.

BPA will accept reports for the CRC credit and CAA reimbursement that
meet the requirement contained in this document. (See section 1.6.)

### 1.4.1 Methods of Determining CRC Credit or CAA Reimbursement Levels

There are two methods to determine the CRC credit and CAA reimbursement
level:

a.  **Deemed:** For some measures BPA has deemed the CRC credit or CAA
    reimbursement level. The deemed credit or reimbursement level was
    determined by (1) multiplying the RTF's estimate of bus-bar energy
    savings by a set dollar amount [or]{.underline} (2) BPA setting the
    credit/reimbursement levels for individual measures based on BPA's
    WTP. This is the case for many of BPA's standard offers;

> **Calculated**: For some other measures with a deemed
> credit/reimbursement, the PTR may require additional calculations to
> arrive at energy savings. When this occurs, the measure is referred to
> as "calculated;" but is still a deemed measure; and
>
> **Cost-Effectiveness Test** (for method a): The measure list in the
> PTR will indicate if a measure is cost-effective. If a measure is not
> cost-effective, the CRC credit, the High Water Mark (HWM) utility
> self-funded, or CAA reimbursement is zero and these funding sources
> cannot be selected for reporting purposes.

b.  **Custom Projects (CP)**: These are measures or projects where there
    is not a deemed method of determining the credit/reimbursement. In
    these cases the credit/reimbursement is determined by multiplying
    the accepted, verified energy savings[^2] by BPA's WTP. Measures for
    which this method is used to determine the credit/reimbursement must
    meet the specification and funding source requirements for certain
    sectors or other measurement guidelines as applicable; and

> **Cost-Effectiveness Test** (for method b): The PTR provides a TRC
> calculator that is available both in the Help section of the system
> and in the CP template. This is available for both utility and
> contractor use to determine if the CP meets the cost-effectiveness
> requirements.

**Custom Projects**

This section focuses on industrial projects, but custom projects also
can be submitted for commercial, residential, and agricultural sector
projects.

**Industrial Sector**

Industrial process-related projects include production systems within a
particular industry (e.g., pulping in wood products, food processing,
plastic extrusion, compressed air, computer chip fabrication, drive
systems, drying systems in lumber products, or water and waste water
treatment). Process-related projects will involve site-specific
calculations (e.g., motors, variable speed drives, pumps, ammonia-based
refrigeration, etc.) and will be eligible for credit/reimbursement as
part of an integrated approach.

For industrial projects, the utility must choose between the two options
noted below. The utility must pick one option and apply it to both its
CRC- and CAA-funded activities. These options are designed to allow a
utility to seek BPA's technical assistance or to use its own means to
address technical needs. They were created with the understanding that
some utilities have their own technical support tools and other
utilities do not. These options level the playing field and assure that
costs and risks are evenly applied across the region.

The utility must make the decision of which option to use up front and
for the life of the rate period or other agreement, whichever is longer.
Utilities may not be credited/reimbursed at the Option 1 rate for some
projects and Option 2 for other projects.

Option 1 is designed to provide technical support for utilities that
need such assistance and that do not wish to bear the risk of dry holes.
Option 2 is designed for utilities providing technical assistance on
their own that are comfortable bearing the risk of dry holes. The
credit/reimbursement is more for Option 2, but BPA does not provide
these customers with any upstream technical project support.

Utilities that participated in a ConAug Technical Service Proposal (TSP)
prior to the early start period of the CAA or CRC are required to claim
credits/reimbursements at the Option 1 (\$0.12/kWh) rate for any project
in the TSP stream at that time. After signing a CAA or CRC agreement,
the utility may choose the administrative credit/reimbursement level
(\$0.12 or \$0.15 per kWh) for subsequent projects. The
credit/reimbursement is still capped at 70 percent of project costs
regardless of the option selected.

**Option 1**

-   The credit/reimbursement level for industrial projects is \$0.12 per
    kWh (up to 70 percent of the incremental project cost);

-   BPA Services: BPA will provide the utility with technical support
    services for which the utility is not required to reimburse BPA. The
    technical services may be provided by either BPA employees or a
    qualified BPA contractor. BPA will determine and provide the best
    technical staff to meet the utility's need. The current TSP process
    applies;

-   In addition to the TSP process, utilities that select this option
    may continue to call BPA's utility-dedicated engineer for assistance
    with their industrial customer loads; and

-   The TSP support for which BPA will cover costs includes: most
    upstream support for project development, including audits, scoping
    and custom project proposal (CPP) development, and measurement and
    verification (M&V) plan development. It does not include downstream
    support such as the implementation of M&V plans or completion
    reports. Downstream technical support may be included as part of
    project costs.

> **OR**

**Option 2**

-   The credit/reimbursement level is \$0.15 per kWh (up to 70 percent
    of the project's incremental project cost);

-   BPA does not provide technical support for utilities under this
    option. BPA will not provide walk through audits, scoping, proposal
    development, or M&V plan development, and BPA will not provide
    contractors for such purposes. However, the TSP-qualified BPA
    contractor list is available for utility use;

-   The cost of upstream technical project support, such as audits and
    technical studies can be included in the total project costs; and

-   BPA will review M&V plans for CPPs and make comments and
    recommendations on submitted CPPs as provided under the CP section.

### 1.4.2 Measure Requirements and Specifications 

This section lists general and sector-specific requirements. Specific
measures may have additional requirements, not listed here, in which
case the requirements are listed with the measure in the PTR.

**General (Applies to all Sectors)**

-   In all sectors, including residential, commercial, and agricultural,
    non-deemed conservation measures can be claimed as a custom project.
    In order for the measure to be eligible, it must be submitted as a
    custom project proposal and meet all of the custom project
    requirements;

-   Only cost-effective conservation measures as defined by the
    Council's Power Plan qualify for a CRC credit or CAA reimbursement.
    (Section 3.3 of the Pacific Northwest Power and Conservation
    Planning Act (Act) of 1980 states: "Conservation means any reduction
    in electric power consumption as a result of increases in efficiency
    of energy use, production, or distribution." For example,
    curtailment, fuel switching, or load building activities do not
    qualify for a CRC credit or CAA reimbursement.);

-   All measures presented for CRC credit or CAA reimbursement must be
    installed in the Pacific Northwest, as defined by the Act, in
    service areas of participating utilities;

-   Measures for which BPA has established a deemed credit or
    reimbursement level are not eligible as CPPs; and

-   Conservation voltage regulation (CVR) projects, customer
    distribution system efficiency improvements (DSEI), distribution
    system upgrades for energy efficiency, and new construction or major
    renovation commercial/industrial construction and multifamily
    residential must be submitted as CPPs.

**Commercial and Industrial Sectors**

-   Commercial/industrial projects with less than a 1-year simple
    payback, based on the estimated energy savings and the estimated
    project costs do not qualify for credit/reimbursement;

-   All new construction/major renovation projects in the
    commercial/industrial sectors must be submitted as CPPs;

-   Commercial and Industrial Lighting credits/reimbursements must use
    the C&IL Spreadsheet Tool that is available on the PTR System under
    Downloads. Credit/reimbursement is based on the Standard Offer
    schedule which is also available on the PTR System. (The measure
    number is CLI00612, and the latest version of this calculator should
    be used to claim credit/reimbursement, which is automatically
    calculated by the tool.);

> (Note: Industrial and commercial lighting measures are considered
> deemed, except when they have interactive effects on other measures,
> in which case they may be submitted as a CPP under the multiple
> measures category. One exception is that, after March 1, 2007, for
> industrial lighting measures that are estimated to provide more than
> 100,000 kWh in annual savings, the utility has an [option]{.underline}
> of using the custom project approach, recognizing that there is
> significantly more effort involved to make a custom project proposal,
> complete with an M&V plan, and the need for a completion report);

-   Industrial motor and drive applications must be submitted as CPPs;
    and

-   BPA no longer deems a credit/reimbursement level for motor programs
    based on deemed hours of operation and assumed loading factors.

**Agriculture**

-   Pump/motor improvements in the irrigation sector are based on system
    audits and interactive measure calculations. The reimbursement level
    is \$0.15 per kWh or 70 percent of project costs. WISA (Waterwise
    Irrigation Schedule, Ag 123, or its technical equivalent is
    available in the PTR);

-   Motor replacements are assumed to be in lieu of rewinding the motor
    or at the time of failure;

-   Incremental project costs and incremental savings are calculated as
    the difference between the National Electrical Manufactures
    Association (NEMA) standard efficiency motor and the proposed motor
    for the same size and application;

-   Credit/reimbursement for irrigation motor measures requires that the
    motor is open drip proof (ODP) or totally enclosed fan cooled
    (TEFC), operates at 1,800 rpm, and is replacing an older rewound
    motor;

-   Motor measures under this section must be installed in an irrigated
    agriculture application. The motors may be purchased anywhere;

-   Motor measures under this section must be new, three-phase AC
    induction, 5 to 500 horsepower, and NEMA design A, B, or C; and

-   Motor measures under this section must meet or exceed the NEMA
    Premium efficiency standard shown in table R-12 or table R-13 of the
    Reimbursement Levels and Strategies document dated April 2007
    (attachment A).

## 1.5 Custom Project Guidelines and Review Process

The purpose of this section is to define those measures and projects
which require BPA acceptance and review and comment. In general, all
measures or projects for which BPA has not deemed a reimbursement level,
deemed energy savings, or for which cost effectiveness has not been
determined, must be submitted as CPPs. BPA will review and accept,
reject, or return for modification, the CPP, and/or the M& V plan.

BPA will also provide additional review and comment on project proposals
where estimated energy savings is 200,000 kWh *(This is assumed to be
equivalent to a \$30,000 credit/reimbursement level)* or greater. BPA is
differentiating between "review and comment" and "M&V approval" in the
CRC and CAA and the "Notice to Proceed" process used in ConAug. There is
also a difference between the new acceptance process and the C&RD
protocol process. BPA review is focused on project success and delivered
savings as estimated in the CPP. The purpose of the comment and review
procedure is to help utilities and end users design and implement a
project that will secure energy savings.

### 1.5.1 Measurement and Verification Acceptance Requirement

-   BPA must accept both the M&V plan of a CPP and the completion report
    for a CP before a credit/reimbursement can be reported. The CPP must
    be submitted and accepted before the project is begun. This means
    the measures have not been purchased (or ordered) or installed
    before the CPP is accepted by BPA;

-   A simple template for submitting CPPs is available in the PTR
    System. Once submitted to BPA the proposal is "locked" while BPA
    completes its review. BPA will accept, reject, or return the CPP for
    modification. Once BPA approves the CPP, the data from the template
    will be transferred as a measure on the PTR and assigned a measure
    reference number;

-   For assistance in development of an M&V Plan, see Verification
    Guidelines at:
    <http://www.bpa.gov/Energy/N/projects/cr_discount/pdf/site_specific_verification.pdf>);

-   BPA acceptance of the M&V plan included in the CPP is BPA's
    commitment to pay at the reimbursement amount that is in effect at
    the time of the approval, regardless of what changes to the program
    may occur before the M&V is completed, and is limited only by the
    term of the agreement. This M&V acceptance process may result in
    some rejected projects if BPA determines the results cannot be
    reasonably and defensibly measured; and

-   A utility may request technical advice from BPA staff regardless of
    the size of the project or the requirement for review and comment
    unless they have selected Option 2 under the industrial
    credit/reimbursement level section 1.4.1 b.

### 1.5.2 Project Acceptance Requirement

CPPs are required for the following measures, regardless of any other
requirements:

-   Conservation Voltage Regulation (CVR);

-   Customer Distribution System Efficiency Improvements (DSEI); and

-   New construction or major renovations in the commercial, industrial,
    and multifamily sectors.

BPA must accept both the CPP and the M&V plan for these measures.

### 1.5.3 Reject or Return for Modification 

-   BPA may reject a CPP for failure to provide an adequate M&V plan;

-   BPA may also reject a CPP submitted for measures noted in section
    1.4.2 or for failure to provide an adequate project description; and

-   BPA may return a CPP for changes to improve the adequacy of either
    the project description or M&V plan.

### 1.5.4 Completion report

-   A completion report is required for all CPs;

-   A completion report must be submitted when the project is installed
    and when the M&V plan has been implemented before a utility can
    claim a CRC credit or submit an invoice for CAA reimbursement. The
    completion report template, which is similar to the original report,
    is available on the PTR System. The utility fills out the form and
    submits it to BPA electronically. This involves entering the actual
    project costs and verified savings data as determined in accordance
    with the approved M&V plan. The template will calculate the
    credit/reimbursement;

-   Credit/reimbursement for CPs is based on the accepted completion
    report data;

-   Credit/reimbursement for accepted CP completion report savings is
    provided in section 1.4.1 b for qualifying cost-effective measures
    based on the actual savings up to the cost cap, as documented by the
    pre-approved M&V plan and only after M&V is completed; and

-   If the utility's payment to the end user is based on verified energy
    savings, BPA recommends informing the end user in advance that
    payment will not occur until after the energy savings have been
    verified.

### 1.5.5 Review and Comment 

CPPs, for which the expected first year energy savings are over 200,000
kWh *(this is assumed to be equivalent to a \$30,000
credit/reimbursement level),* require BPA review and comment in addition
to BPA acceptance of the M&V plan.

-   Comment and review: BPA staff will review the CPP submitted by the
    utility to determine if the submitted project contains any weakness
    or concerns which would impact the project's ability to deliver the
    estimated savings, to come in at the estimated project costs, or to
    impact the ability of the project to be measured and verified. BPA
    may also identify possible risks related to the implementation of
    the project and its impact on the technical process. BPA engineers
    may warn the utility about potential risks and may suggest
    improvements, but the ultimate decision to proceed with the project
    will be up to the utility and its consumers;

-   BPA reviewers may suggest alternatives to consider, identify
    potential lost opportunities, and make other suggestions for
    improvement. The utility is not required to accept BPA's comments or
    recommendations in full or in part; and

-   If, based on BPA's recommendation or comments or for other reasons,
    the utility changes the substance of the CP, the CP should be
    resubmitted as a CPP.

### 1.5.6 Project Eligibility

The utility is required to screen all CPs using the following
eligibility requirements prior to submitting the CPP to BPA. These
requirements are listed in the CPP template available in the PTR.

**Eligibility requirements:**

-   Deemed savings or deemed reimbursements are not available for the
    measures (see section 1.4.1 a);

-   The proposed measures have not been purchased or installed;

-   The project does not result in fuel switching;

-   The measures are designed to result in improvements in the energy
    efficiency of electricity distribution or use;

-   The expected life of the energy savings for each measure is greater
    than one year;

-   The proposed baseline for each measure is documented and provides a
    basis for establishing energy savings;

-   The proposal includes an M&V plan showing how energy savings will be
    verified;

-   The expected project simple payback (Project Cost/Annual Energy Cost
    Savings) is one year or greater; and

-   The expected project benefit/cost ratio (Present Value Total Energy
    Cost Savings/Present Value Project Cost) is 1.0 or greater, based on
    data provided by the utility (the CPP template will calculate the
    project benefit/cost ratio).

### 1.5.7 Project M &V Plans

The purpose of the Measurement & Verification (M&V) Plan is to provide a
basis for determining the verified annual energy savings reported for
each measure. The minimum requirements for the M&V Plan vary depending
on the expected annual energy savings and the project details.

**1.5.7.1 Standard M&V Plan Requirements**

The **Standard M&V Plan** is intended for projects where the expected
annual energy savings are 75,000 kWh per year or greater. This level of
energy savings has enough value to support a rigorous verification.
Typically, this means direct measurement of pre- and post-measure
installation energy consumption and other significant variables.
Engineering calculations based on simplifying assumptions are usually
insufficient for standard projects. Direct metering is not explicitly
required for standard projects, but it does set the standard of rigor.
At a minimum, the M&V Plan should include the following sections and
address the points listed below.

**Approach**

Outline the verification approach to be used and why it was chosen.
Detailed guidance for preparing an M&V plan may be found in several
standard references:

-   The International Performance Measurement & Verification Protocol,
    available at <http://www.evo-world.org/>;

-   The Regional Technical Forum Appendix P Energy Savings Verification;
    and

-   Site Specific Verification Guidelines, May 1992, Bonneville Power
    Administration, at
    [[http://www.bpa.gov/Energy/N/projects/cr_discount/pdf/site_specific_verification.pdf]{.underline}](http://www.bpa.gov/Energy/N/projects/cr_discount/pdf/site_specific_verification.pdf).

**Protocols**

-   ASHRAE Guideline 14-2002, Measurement of Energy and Demand Savings

-   Direct measurement of pre-and post-energy consumption and other
    significant variables is preferred.

**Assumptions**

Explain the assumptions made and state the sources of all assumed
values. Show the overall significance of these assumptions to the total
expected savings and describe the uncertainty inherent in the
assumptions.

Identify the significant variables that affect energy use and categorize
each as "assumed" or "to be measured." Assumed values are only
acceptable if they have a well-documented basis in fact and an analysis
shows that plausible errors from the assumption will not significantly
affect the overall reported savings. When using assumed values,
conservative assumptions shall be used.

**Metering Plan**

For metered verifications, include a description of what will be
measured, the measurement duration and the data sampling intervals, and
the instrumentation to be used. Also, include details on who will
perform verification and when it will be performed. If applicable,
include a one-line diagram showing proposed metering locations both
before and after the installation. Explain how short term measurements
will be extrapolated to an annual basis.

If measurement is not possible or practical, provide an explanation.

**Calculations**

Show or describe the calculations to be used. Include and describe
calculations to account for significant changes in production, weather,
loads, hours-of-operation, setpoints, manual operation, occupancy, or
other factors that affect the annual savings over the expected life of
the measure.

**Quality Assurance**

Describe activities planned to ensure good data and accurate
calculations. Describe inspections, tests, commissioning, etc., to
ensure that the proposed systems function as planned.

**1.5.7.2 Lite M&V Plan Requirements**

The **Lite M&V Plan** may be allowed for projects where the expected
annual energy savings are less than 75,000 kWh per year, where
appropriate. The value of the energy savings for these projects may not
be great enough to support direct measurement of savings. If the
reviewing engineer does not believe the Lite M&V Plan is appropriate for
a project, the Standard M&V Plan may be required. The BPA reviewing
engineer may allow the Lite M&V Plan for larger projects (greater than
75,000 kWh per year) where the engineer finds it appropriate. At a
minimum, the M&V Plan should include the following sections and address
the points listed below.

**Approach**

The primary method for determining the verified annual energy savings
that will be reported for each measure is engineering calculations. The
measure(s) installed under this approach should have defensible annual
energy savings values that are calculated based on commonly accepted
engineering practices and reasonable assumptions.

**Calculations and Assumptions**

Show or describe the calculations to be used. The engineering
calculations should use known variables specific to the project combined
with defensible assumptions. Assumptions should be based on independent
third party information such as cases studies, prototype testing,
metering and

evaluation reports, and/or scientific research. Document the source(s)
of all assumptions.

-   Energy Savings Limits

> Since many of the inputs to the engineering calculation are assumed, a
> best case and worst-case calculation should be made to help determine
> a reasonable and conservative value for energy savings. For each
> significant assumption, it is important to determine a realistic error
> boundary in order to calculate the best and worst-case scenarios. In
> the best case calculation, all significant assumed variables should be
> those that are realistic and, when occurring together, provide the
> highest savings. In the worst-case calculation, the significant
> variables that provide the least amount of savings expected should be
> examined. In the worst-case calculation, it is not uncommon to have no
> savings, or even negative savings. The final estimated energy savings
> value must be defensible and reasonable.

Since the engineering calculations will vary with the measure
application, there is not one specific analysis tool to recommend. The
US DOE is one source of potentially useful software calculation tools
such as PSAT, FSAT, and MotorMaster. It is recommended to use a
Microsoft Office® Excel spreadsheet for engineering calculations as an
easy way to document the calculations and assumptions.

**Quality Assurance**

Describe inspections, tests, commissioning, spot or short-term
measurements at the component or system level, etc., to ensure that the
proposed systems function as planned. Energy savings values must be
adjusted prior to submitting a project completion report if the Quality
Assurance tasks reveal the as-built, as-installed, and/or as-operated
conditions are significantly different than originally estimated.

### 1.5.8 Custom Project Processes

BPA is committed to providing the utility a response within 10 working
days of receiving a CPP or a CP completion report. The response will be
in writing (i.e., via e-mail or letter). The response may not be
acceptance of the report, but may include a return for modification
and/or rejection. Return for modification responses can include a
notification of errors, missing material, inappropriate baseline
assumptions, or missing cost-effectiveness data, or notice of other
problems with either the submittal or the M&V plan. If a CPP is returned
for modification, it may be resubmitted in which case the 10 working day
response time will restart.

### 1.5.9 Custom Project Proposal Template

-   The utility will fill out and submit the CPP template available on
    the PTR. The template includes more information than the M&V plan.
    This additional information is necessary for BPA technical staff to
    determine if the M&V plan is acceptable. The project information
    required for acceptance of an M&V plan is outlined on the template;

-   BPA will review the submitted CPP for completeness. If the submittal
    is not complete or needs additional work, the CPP will be returned
    for modification and the utility will be notified. Modification
    recommendations will be provided by BPA. This determination is
    considered a BPA response under the timeline requirements of
    section 1.5.8. If the CPP was returned for modification, the utility
    may change the CPP and resubmit it for BPA consideration;

-   Once a CPP is determined to be complete, BPA will review the
    proposed M&V plan. For projects where the expected first year energy
    savings are more than 200,000 kWh *(This is assumed to be equivalent
    to a \$30,000 credit/reimbursement level)*, BPA will also provide
    "Review and Comment" on the CPP. The comments will be provided to
    the utility when the M&V plan is accepted;

-   BPA may return or reject the CPP if the M&V plan is inappropriate
    for the measures to be installed or if the baseline condition is not
    appropriately estimated. BPA's determination will include notice on
    the M&V plan deficiencies. This determination is a BPA response; and

-   BPA will issue a response when it accepts the CPP. The utility will
    be notified in writing (i.e., via e-mail or letter). The CPP will
    receive a reference number from the PTR. This reference number is
    the tracking number for the CPP and will be tied to the completion
    report. Only projects with a reference number are eligible to submit
    a completion report, which is required before a utility can claim a
    CRC credit or a CAA reimbursement.

## 1.6 Reporting Requirements 

The purpose of these sections is to explain the reporting requirements
and reporting services available for the CRC and CAA.

### 1.6.1 Reporting Frequency and Reporting System

-   Utilities are required to use the PTR System at
    <http://ptr.nwcouncil.org/>, for all reports;

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-   Two primary reports are required \-- monthly and biannual. Quarterly
    reports and utility internal reports are also available;

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-   Utilities are required to report their CRC activity at least
    biannually. CRC reports are due no later than:

    1.  Beginning October 1, 2006, CRC participants will submit a report
        by April 30 for the period October 1 to March 31 for each year
        during the rate period;

    2.  Beginning October 1, 2006, CRC participants will submit a report
        by October 31 for the period April 1 to September 30 for each
        year during the rate period; and

-   Utilities are required to report their activities for CAA
    reimbursement. The report serves as the invoice for the purposes of
    CAA. The utility can submit invoices/reports as often as monthly.
    The annual reports submitted to BPA can include CAA activities, but
    will not serve as a report for invoicing purposes.

### 1.6.2 Reporting Schedule and Other Important Dates

  ------------------------ -------------------------------------------------------------
  **[Date]{.underline}**   **[Description of Activity]{.underline}**

  *11/9/05*                *CAA are available*

  *2/15/06*                *CRC Early Start begins*

  *7/15/06*                *Customer proposed renewables claims for FY 2007 are due*

  *9/30/06*                *CRC Early Start period ends*

  ***10/1/06***            ***CRC, CAA, and Rate Period officially start***

  *10/31/06*               *CRC Early Start reports are due*

  4/30/07                  1st bi-annual CRC reports for FY 2007 are due for October 1
                           to March 31

  7/15/07                  Customer proposed renewables for FY 2008 are due

  10/31/07                 2nd bi-annual CRC reports for FY 2007 are due for April 1 to
                           September 30

  4/30/08                  1st bi-annual CRC reports for FY 2008 are due for October 1
                           to March 31

  7/15/08                  Customer proposed renewables for FY 2009 is due

  10/31/08                 2nd bi-annual CRC reports for FY 2008 are due for April 1 to
                           September 30

  4/30/09                  1st bi-annual CRC reports for FY 2009 are due for October 1
                           to March 31

  9/30/09                  Year three of the CRC/Rate Period ends (October 1, 2006, to
                           September 30, 2009)

  10/31/09                 2nd bi-annual CRC reports for FY 2009 are due for April 1 to
                           September 30

  11/30/09                 Final reconciliation report due from participating utilities.
                           Program participants' agreed upon procedures reports on the
                           certification and balances for FY 2009 are due.

  12/31/09                 Revised final reconciliation report and reimbursement from
                           utilities whose qualifying activities/expenditures do not
                           equal or exceed their cumulative CRC amount. Program
                           participants' agreed upon procedures reports, on the
                           certification and balances for FY 2009 are due.
  ------------------------ -------------------------------------------------------------

### 1.6.3 Reporting Requirements

**General for CRC and CAA**

This section defines how utilities submit reports to claim CRC credits
or to request CAA reimbursement.

When submitting a report for credit/reimbursement, the utility must use
the PTR System. The PTR will guide the utility through the submittal
requirements, which include:

-   Confirmation that the utility implemented the items for which they
    are claiming CRC credit or CAA reimbursement in compliance with the
    directions, requirements, and procedures documented in the
    Implementation Manual and in applicable contracts; and

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-   The utility will identify the percentage of administrative allowance
    they are claiming for the reported items. All CRC claims are limited
    by the utility's total CRC eligibility, which is based on the
    customer's Net Requirements Forecast. All CAA claims are limited by
    the CAA contract.

BPA will not credit/reimburse for measures not reported in the PTR
System.

BPA will, as part of its review process, ensure that the
credit/reimbursement report is reasonable and corresponds with any and
all attachments.

The report submitted to BPA should include, through attachment or
referenced e‑mail, supporting documentation that may be required for any
Standard Offer or CP.

Supporting documentation must include unique identification information.
For CRC, this is the reporting period information. For CAA this is the
invoice number from the report. The unique identification information
should also be kept with the utility files for all supporting
documentation which is not submitted with the report, but which is
required to substantiate the reports.

The PTR will track the CRC credit balance and the CAA contract balances
as reports are filed. BPA will make this information available to the
utility as part of the reporting process.

### 1.6.4 Other Utility Funded Conservation

Utilities are encouraged to report conservation activity funded by
sources other than BPA using the PTR. The system will accommodate other
funding sources. These items can be included in the biannual reports,
but should not be included in any CAA monthly report.

## 1.7 Oversight, Verification, Records, Audits, and Evaluations

### 1.7.1 Oversight and Verification

-   BPA or BPA's agent will conduct inspections of all report records
    and monitor or review the utility's procedures, records, verified
    energy savings methods and results, or otherwise oversee the
    implementation of the activities implemented under the initiatives
    covered by this document. The number, timing, and extent of such
    inspections shall be at the discretion of BPA, but will be
    coordinated with the utility. BPA will provide written notice not
    less than 30 days prior to such an inspection. These inspections
    shall occur at BPA's expense; and

-   BPA may contact appropriate federal, state, or local jurisdictions
    regarding environmental, health, or safety matters related to any
    activity or measure/unit/project credited or reimbursed under the
    CRC or CAA.

### 1.7.2 Records and Audits

-   Each utility shall establish files and maintain supporting documents
    and records for each submitted report for each and every item listed
    including administrative costs. The files for all reports shall be
    clearly designated as BPA credit/reimbursement files. The records
    shall be sufficient to document that the item reported is accurate
    and can be substantiated to meet the BPA's due diligence in the
    spending or crediting of federal funds;

-   Utilities shall keep program report records for no less than three
    years after the term of the current rate case or through 2012,
    whichever is later; and

-   Financial audits shall be in compliance with the audit standards
    established by the Comptroller General of the United States.

### 1.7.3 Evaluations

Evaluations are needed to determine barriers to program success,
identify ways to improve programs, help track program accomplishments,
assess market conditions, determine the accuracy of savings estimates,
and to answer the ultimate question of whether programs are meeting
their expected goals.

-   BPA may conduct, and the utility shall cooperate with, evaluations
    of conservation impacts and project implementation processes to
    assess the amount, cost effectiveness, and reliability of
    conservation in the utility's service area or region. After
    consultation with the participating utility, BPA shall determine the
    timing, frequency, and type of such evaluations;

-   BPA anticipates that many of the evaluations will be done
    collaboratively with other organizations to share costs and to
    improve the usefulness of the evaluations. In some cases, the
    evaluation will be managed by another party on behalf of BPA and
    others;

-   BPA will determine the specific requirements for evaluations with
    consideration for the schedules and reasonable needs of the utility
    and the utility's customers; and

-   Any evaluation of the project initiated by BPA shall be conducted at
    BPA's expense or shared regional expense, and such costs shall be
    excluded from the implementation budget. Utilities or other entities
    that cooperate with the evaluation are recognized as providing some
    resource/cost, but the cost will not be considered for direct
    reimbursement by BPA, except under unusual circumstances.
    Cooperation with the evaluation is a cost of the partnership in
    delivering the programs.

## 1.8 Agreed Upon Procedures Report for Administrative Activities

For both the CRC and CAA, BPA requires that utility costs for
administrative activities be verified by a certified public accounting
(CPA) firm or state auditor. This is to assure that the information
submitted to BPA in applications and reports is supported by adequate
documentation and accounting records. Such documentation and records are
to be maintained in accordance with the participant's policies and
procedures.

It is BPA's objective to keep the cost of performing the work, outlined
below, to the minimum possible. To keep these costs low, BPA expects
program participants to negotiate relatively low cost "agreed-upon
procedures" work with their CPA firms/auditors whenever possible.

Agreed-Upon Procedures" is a specific technical term that has specific
meaning to auditors and accountants. The American Institute of Certified
Public Accountants (AICPA) Statements on Standards for Attestation
Engagements No. 10 provides guidance for performing agreed-upon
procedures engagements, including an illustrative report.

This section does not suggest that an agreement be made between BPA and
the utility on the nature of the agreed-upon procedures. It is BPA's
intent that the customer should agree upon the procedures with their CPA
firm/auditor.

Annual reports from the state auditor or the CPA shall include the
following:

-   The name of the utility;

-   The time period covered by the report (i.e., beginning and end
    dates);

-   The amount of costs incurred for allowed administrative activities
    (as described in section 1.2) for both CAA and CRC and whether these
    amounts are equal to or more than the administrative allowances that
    the utility has claimed for credit or reimbursement. CAA and CRC
    costs should be accounted for separately;

-   A description of and results of tests that were performed to review
    the administrative costs for allowability; and

-   A statement that the customer has appropriate policies and
    procedures, and an accounting system that is capable of tracking CRC
    and CAA programs.

> [Sample CPA firm/auditor statement language:]{.underline}
>
> "The auditor of record has determined that the utility has sufficient
> records to indicate that the utility's costs, either direct, indirect
> or overhead, are equal to or exceed the amount of administrative
> allowance claimed through its agreements with BPA."
>
> *The required state audit or CPA audits of the utility must address
> whether the utility has documented administrative costs related to the
> pursuit of conservation. BPA will not duplicate that external review.*

Utilities who are not familiar with running energy conservation programs
or who did not participate in BPA's C&RD program are encouraged to
discuss with their CPA firm/auditor the following:

-   Can the utility define what basis and related documentation will be
    used to support the reporting elements for either the CRC or CAA
    program; and

-   Does the utility have policies and procedures and an accounting
    system in place capable of tracking the elements described above?

-   An Agreed Upon Procedures Report is required if a customer:

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-   Has a CAA contract, or

-   Claims administrative costs under the CRC.

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-   An Agreed Upon Procedures Report is [not required]{.underline} if a
    customer:

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-   Does not file a CRC report, and

-   Does not have a CAA contract in place.

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-   *Note: An Agreed Upon Procedures Report is not required if customers
    only claim donations to NEEA, or for a purchase of Environmentally
    Preferred Power (EPP) or other renewables.*

### 1.8.1 Administrative Costs

As stated above, the CPA or auditors' report must address whether the
utility has documented administrative costs related to the pursuit of
conservation activities equal to or in excess of the actual
administrative allowance that is claimed against the CRC and CAA. If the
utility's documented administrative costs are less than what the utility
has claimed in their CRC reports or CAA invoices, the utility will be
required to correct their CRC report to account for the change or to
reimburse BPA in the case of the CAA.

### 1.8.2 Frequency

The report is due annually (or for utilities under 7.5 aMW, once during
each rate period).

### 1.8.3 BPA's Right to Audit

BPA shall have the right to review the customer's CRC or CAA records at
any time, with 30 days notice. Any such effort will be undertaken at
BPA's expense. BPA is not allowed to waive this right, but will not
generally exercise the right unless there is suspicion of waste, fraud,
or abuse.

## 1.9 Records Management

-   CRC and CAA records must be organized and maintained in such a
    manner that pertinent records can be found when needed; and

-   CRC and CAA records must be maintained for potential audit purposes
    for at least three years after the end of the CRC Program
    (September 30, 2012).

## 1.10 Program Changes

BPA reserves the right to make changes to the CRC and CAA with six
months notice, or as required (see attachment C). This includes, but is
not limited to, changes to:

-   Program requirements;

-   Conservation measure credit or reimbursement levels;

-   Conservation measure applications;

-   Technical specifications; and

-   Reporting requirements.

BPA will strive to limit the number, scope, and nature of any changes.
However, changes may be required to ensure the CRC and CAA meet the
intended goals as defined in the Post-2006 Conservation Program
Structure document (attachment D) and operate as intended under this
document.

## 1.11 Official Interpretations

Only BPA's CRC Manager, CAA Manager, or Energy Efficiency Implementation
Manager may issue interpretations, determinations, and findings related
to the CRC or CAA that are binding and/or have implications across the
program, unless delegated to other BPA staff (i.e., COTRs). Such
decisions shall be provided to the utility in writing. Only written
statements (including e-mail) by BPA officials acting within the scope
of their authority in administering the CRC and the CAA shall be
considered to be official BPA statements.

## 1.12 Regional Technical Forum

In 1996, Congress directed BPA and the Council to convene a Regional
Technical Forum to develop standardized protocols for verifying and
evaluating conservation savings. Congress further recommended that the
RTF\'s membership include individuals with technical expertise in
conservation program planning, implementation, and evaluation, and that
its services be made available to all utilities in the Northwest.

The Comprehensive Review of the Northwest Energy System (Comprehensive
Review) supported the Congressional directives and recommended that the
RTF should, in addition, track conservation and renewable resource goals
and provide feedback and suggestions for improving the effectiveness of
conservation and renewable resource development programs in the region.
The Comprehensive Review also recommended that the RTF conduct reviews
of the region\'s progress toward meeting its conservation and renewable
resource goals at least every five years and communicate recommended
changes to appropriate decision-makers. These periodic reviews are to
acknowledge changes in the market and to adjust targets appropriately.

The RTF was established as a standing advisory committee in 1999 to
provide technical peer review and advice to the Council and BPA. Members
of the RTF are selected by the Council based on their expertise and
experience. The RTF consists of individuals drawn from utilities, the
private sector, BPA, public interest groups, state and local government,
and academic and national laboratory personnel. The RTF is funded from
the Council\'s budget with possible augmentation from state public
purpose funds and/or individual utilities that would use the RTF\'s
services but that do not contribute proportionately to the Council\'s
funding.

### 1.12.1 Role of the RTF

-   The RTF collects, reviews, and distributes protocols for the
    verification, evaluation, and development of new methods of
    achieving conservation savings;

-   Regional Conservation Tracking:

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-   The RTF has developed standardized forms and data definitions for
    use by retail electricity distribution utilities, state and local
    low-income weatherization service providers, and renewable resource
    developers; and

-   The RTF compiles data submitted and publishes an annual regional
    summary, which it presents to the Council. This summary compares the
    level of activity and expenditures reported with the Comprehensive
    Review's \"public purpose\" goals. In addition, the RTF assesses
    what has been accomplished through those expenditures - electricity
    savings achieved, low-income consumers served, renewable resource
    production achieved - and at what cost.

Specifically, the RTF is called upon to make recommendations to BPA
regarding:

-   Cost-effective conservation measures and estimated savings
    associated with those measures;

-   Changes in technology and standard practices through which utilities
    can demonstrate that different savings and value estimates should
    apply;

-   A set of protocols by which the savings and system value of
    measures/programs not on the list could be estimated including
    complex commercial or industrial projects;

-   Criteria for renewable resource projects; and

-   Protocols for measurement and evaluation of savings or production.

### 1.12.2 Relationship to BPA

The RTF is independent of BPA. The RTF's recommendations to BPA are for
advisory purposes only and reflect the legal requirement that decisions
affecting BPA\'s rates must ultimately be made by BPA. Consequently, BPA
will decide whether to accept, reject, or modify the recommendations of
the RTF.

### 1.12.3 Skills

The RTF\'s responsibilities are primarily technical. Its members
collectively bring technical experience and expertise in the analysis of
conservation and renewable resources and the design of conservation and
renewable resource projects and programs, their implementation and their
evaluation. Members of the RTF are required to have expertise in
particular areas of energy conservation implementation (e.g., commercial
buildings, industrial processes, residential, renewable resources,
etc.).

### 1.12.4 The RTF's Role in the CRC and CAA

Utilities may petition the RTF to review the eligibility of new measures
or measures previously deemed as not regionally cost-effective. If the
RTF recommends a proposed measure as cost-effective, BPA will review the
RTF's recommendations to determine whether or not BPA will pay an
incentive for the measure.

### 1.12.5 Process for Petitioning the RTF

**Initiation of Process** *-* Parties may initiate the process by
contacting the Chair of the RTF via letter or e-mail. The party making
the proposal should explain the change proposed. If a new measure is
proposed, the proposal should cite the RTF criteria under which the
measure qualifies for inclusion in the RTF's list. If a change in
evaluation methodology is proposed, the proposal should include the
rationale for the change. For example, in the case of a proposed change
in protocol, the proposal should explain why the change would improve
the analytical quality of the protocol. In the case of a proposed
changed assumption, the proposal should present evidence that the
changed assumption more closely reflects the real world. A standard form
is available on the RTF Web site, which sets forth the minimum level of
information needed to file the proposal.

RTF staff will first assess the completeness of the proposal. If the
proposal includes all necessary information, the staff will assess the
validity of supporting arguments and evidence and make a recommendation
to the RTF as to its acceptance or rejection. RTF members will receive
copies of all information provided by the appealing party in support of
their proposal.

If the staff assessment is that the proposal should be accepted, or that
the proposal is sufficient to merit more discussion by the RTF, the
proposal will be put on the agenda for discussion at the next RTF
meeting. If the staff assessment is that the proposal has no merit,
staff will assign the proposal to a consent agenda for rejection. If any
RTF member disagrees with the assignment, it will be moved from the
consent agenda to a place on the discussion agenda.

The RTF anticipates that it will normally be able to make decisions on
proposals within 90 days of receiving them, although complex issues
could take longer and some circumstances (e.g., health and safety) could
warrant more immediate action. Notice of pending actions on matters
under appeal will be provided in the RTF meeting announcements and
agendas. Figure 1, below, depicts the flow of a proposal through the
RTF\'s process.

The RTF will consider the proposal, staff's assessment and
recommendation, and any public comment and accept or reject the
proposal. Acceptance or rejection will require a 60 percent vote by the
RTF. The party making the proposal may make a presentation directly to
the RTF and may contact individual RTF members prior to the meeting.
Members are obligated to disclose such contacts when the proposal is
under considered.

**Transmittal of Recommendations to BPA** - Accepted proposals will be
submitted in writing to BPA as RTF recommendations with advice for
implementing the changes.

**BPA Approval** - BPA will respond within 30 days of the RTF
recommendation, either by approving the request, denying the request, or
by requesting more information. For more complex requests, BPA may need
more time, but will respond with a proposed course of action and
completion date within 30 days of the RTF recommendation.

**Figure 1 - Process Flowchart**

> ![](media/image1.wmf)**After BPA receives the RTF's recommendation,
> BPA will make a determination within 30 days, to approve the request,
> deny the request, or to request additional information.**

# 2.0 Conservation Rate Credit

This section provides an overview of elements specific to the CRC.
Features that are the same for both the CRC and CAA are described in
section 1 of this manual, or are included in the attachments as
applicable to both CRC and CAA.

## 2.1 General Overview of the Conservation Rate Credit

-   The CRC is available to BPA's Priority Firm Power (PF), Industrial
    Power (IP), and New Resource Firm Power (NR) customers that take
    action to achieve cost-effective conservation and renewable resource
    development in the region. In addition, investor owned utility (IOU)
    Residential Exchange benefits qualify under the same terms and
    conditions as the PF, IP, and NR rates;

-   Each utility will be eligible for a CRC set at 0.5 mills per kWh
    applied to its PF, IP, and NR purchases. The rate credit is included
    in the posted rates for Subscription Power Purchases. The 0.5
    mill/kWh rate credit will be incorporated into the IOU calculation
    of settlement benefits consistent with the IOU settlement contracts;

-   Individual participants in the CRC are obligated to make investments
    in cost-effective conservation and renewable resource development in
    the region to earn credits/reimbursements equal to their purchases
    times 0.5 mills/kWh;

-   BPA will determine and make available on the PTR System information
    about eligible measures and specific activities that can be
    implemented to satisfy customer credit obligations; and

-   The PTR System will provide the specific dollar amount of
    eligibility contributed by each measure or provide a means for
    calculating such an amount.

## 2.2 Calculation of the Conservation Rate Credit

The CRC applies to the following rate schedules, contracts, and
settlement benefits:

-   Priority Firm Power (PF-07) rate schedule;

-   New Resource Firm Power (NR-07) rate schedule;

-   Industrial Power (IP-07) rate schedule; and

-   Slice rate exhibit.

Benefits provided as a cash payment in settlement of the Residential
Exchange Program will also be eligible for the CRC, subject to the terms
of such settlement.

## 2.3 Sources of CRC Qualifying Load Data

-   For Block purchases and Full or Partial Requirements customers, BPA
    will use the monthly average, rounded to the nearest whole dollar,
    of the projected eligible purchases for October 1, 2006, through
    September 30, 2009, from the BPA fiscal year[^3] 2006 Wholesale
    Power Rate Case Sales Forecast;

-   For Slice purchases, BPA will use the Slice Initial Critical
    Inventory Amount (7,070 average megawatts) to determine the average
    monthly load, rounded to the nearest whole dollar; and

-   For IOU Residential Exchange customers, BPA will provide the CRC
    according to the terms of their current settlement contracts.

## 2.4 Calculation and Applications of the Monthly Rate Credit

-   BPA will determine the annual amount of the annual rate credit using
    the following formula:

> The annual rate credit = monthly rate credit X 12;

-   The monthly rate credit will be reflected as a deduction on the
    customer's monthly total power bill;

-   The rate credit will be applied after BPA has determined all other
    charges and credits on the participating customer's power bill; and

-   BPA will provide the rate credit even in those months when the rate
    credit amount is larger than the customer's total power bill amount.

## 2.5 Incremental Spending

Only conservation and renewables activities or spending that exceeds
what the utility or customer is required by law or regulatory
requirements to accomplish will qualify.

## 2.6 Utilities Choosing to Participate in the CRC 

-   Customers with an existing Subscription Contract will be offered a
    revised Exhibit B pertaining to the Conservation Rate Credit.

-   Customers without an existing Subscription Contract will be offered
    the CRC as part of their 2007-2009 Subscription Contract.

-   Customers are required to sign Exhibit B before the Conservation
    Rate Credit will be applied to their power bill during the 2007-2009
    Rate Period. If the customer does not sign the revised Exhibit B,
    they will be charged the higher rate.

## 2.7 Utilities Choosing Not to Participate in the CRC

A utility may elect to discontinue participating in the CRC any time
during the rate period. If a customer decides that they want to
discontinue receiving the CRC on their power bill, they can notify BPA,
in writing, and BPA will remove the CRC from the customer's future power
bills. At that point, the customer will be required to submit a Final
Reconciliation Report as described in section 2.12.

## 2.8 Rules for Pooling Organizations

Forming pooling organizations to implement cost-effective conservation
is a contractual relationship among the pooling members. BPA will not
monitor contractual relationships or activities of pooling
organizations.

**General Requirements**

-   Pooling utilities, regardless of the size of individual loads, can
    only claim a maximum of 15 percent of their qualifying budget,
    unless the total load of all of the pooling utilities is 7.5 aMW or
    less, in which case they can claim up to 30 percent of the
    qualifying budget;

-   Pooling utilities are responsible for reporting their individual
    conservation costs and savings for determining their CRC. Utilities
    in the pool can assign this responsibility to the pooling
    organization, but are still responsible for what the pool reports on
    their behalf. In the case of renewables, the utility would report
    the CRC allocated by the pool based on the output of the qualified
    renewable resource;

-   The pooling organization shall provide a summary report to BPA on a
    semi-annual basis documenting the conservation costs and savings
    reported by each participant. The savings and CRC for both
    conservation and renewables would be allocated and determined by the
    pool. Double counting of credits is not permitted;

-   A customer may put all or a portion of its CRC toward a pool and
    withdraw under the terms and conditions agreed to by the pool, not
    under terms specified by BPA. Pool membership can expand or contract
    as determined by the pool;

-   Trading of the CRC would be allowed within the pool. This would
    allow a member to capture an amount above its CRC as determined by
    the 0.5 mill cap, by utilizing another pool member\'s unused CRC;
    and

-   Pooled utilities whose total load is 7.5 aMW or less will not have
    their proposed renewables claim prorated in the event that
    renewables exceed \$6 million; renewables claims of pooled utilities
    whose total load is more than 7.5 aMW will be prorated if renewables
    exceed \$6 million.

## 2.9 Low-Income Weatherization

Utilities can [provide]{.underline} funds to state/LIWSP/tribal
organizations and receive credit on a dollar-for-dollar basis, with the
exception of Prime Window Replacements for the purpose of low-income
weatherization. Or utilities can run their own low-income weatherization
program and will be credited on the same dollar-for-dollar basis as
contributions to LIWSPs. The following conditions apply:

-   CRC funds can only be used to install eligible measures, in
    electrically-heated homes in the utility's service territory.
    Eligible measures are those that the RTF has defined as Total
    Resource Cost (TRC) cost-effective and have been approved by BPA.
    The CRC has a defined list of eligible measures that might be
    different than the list of eligible measures defined by DOE's
    Savings to Investment Ratio (SIR) method. The eligible measures list
    is found in attachments A and B;

-   Prime window replacements are an eligible measure, but do not
    qualify for the dollar-for-dollar credit (see lists in attachments A
    and B). The credit for TRC cost-effective low-income prime window
    replacement is capped at \$0.30 per kWh saved;

-   CRC funds cannot be used to do repair work needed to install
    cost-effective weatherization measures;

-   Utilities and LIWSPs should expect the same level of oversight and
    diligence from BPA on low-income weatherization claims as they would
    expect for other reported activity in the CRC;

-   Low-income activity qualifies for an administrative allowance,
    regardless of whether a customer provides funds to a LIWSP or runs
    its own program;

-   Utilities choosing to run their own low-income weatherization
    program should be in substantial compliance with programs currently
    funded by BPA grants for the U.S. Department of Energy Low-Income
    Weatherization Program requirements;

-   Eligible measures will be reported in the PTR System. The customer
    will be required to enter the square footage data on a measure
    basis. Data on a house-by-house basis is not required in the PTR
    System; however, house-by-house data must be maintained in utility
    records;

-   Customers need to provide an appropriate level of oversight to
    ensure that CRC funds provided to LIWSPs are used only to install
    eligible measures;

-   Utilities should have a written agreement with the LIWSP outlining
    terms and conditions, and reporting requirements; and

-   CRC funds and BPA funds provided to state/LIWSP/tribal organizations
    cannot be co-mingled and must be used for separate activities or
    projects.

Note: Under a separate BPA program, BPA will directly fund low-income
weatherization through the existing state/Community Action Partnership
(CAP) agency/tribal infrastructure at a level of up to \$5 million per
year for the 2007 to 2009 Rate Period, which began October 1, 2006.

## 2.10 Contributions to Organizations Implementing Cost-Effective Conservation

Contributions to third party providers such as NEEA will qualify for
full CRC dollar-for-dollar credit, provided that they install
cost-effective conservation measures and meet all applicable
requirements for measures claimed for the CRC. Such contributions do not
qualify for an administrative allowance.

## 2.11 Performance Reviews and Remedies

-   Utilities will report bi-annually to BPA via the PTR System;

-   If, at the end of the first full year of the program (October 1,
    2007), the utility is not meeting its targets (i.e., the utility is
    claiming 50 percent or less of the rate credit received by the end
    of the first year of the rate period), the utility must prepare and
    have BPA approve an action plan by April 1, 2008, that provides
    sufficient proof of achievable intent by the end of the rate period;

-   BPA staff will be available to assist utilities in developing an
    action plan that will indicate how the utility will spend its CRC
    funds by the end of the rate period (September 30, 2009);

-   BPA's goal is for every participating utility to spend the full
    amount of its CRC on qualified conservation and/or renewables
    activities by the end of the rate period. If at the end of the
    18‑month period (third progress report \-- April 1, 2008)
    participants still have not made sufficient progress on their CRC
    spending (i.e., the utility has spent 75 percent or less of the rate
    credit received by the end of the first 18 months of the rate
    period), BPA may send a notification letter that the CRC will be
    withdrawn for the third year of the program. Such customers will be
    required to pay the full PF or other appropriate power rate so the
    CRC funds can be reallocated; and

-   At the end of the third year of the CRC program
    (September 30, 2009), there will be a final true up required for
    participating utilities.

## 2.12 Final Reconciliation Process

After the end of the third year of the CRC program (September 30, 2009),
there will be a final true up required for participating utilities.

**Requirements**

-   All required electronic reports have been submitted;

-   All required paper work has been completed and is on file with BPA's
    CRC Program Manager. This includes:

1.  Signed hard copies of the bi-annual electronic CRC reports,
    electronic signature proxies (/s/) will qualify as a signed copy,
    and

2.  Acceptable Agreed Upon Procedures reports (see CPA/audit
    requirements in section 1.8).

**Process for Final Reconciliation of CRC**

-   Customers can request, in writing, that BPA start the close-out and
    true-up process to determine if they have satisfied their CRC
    program obligations. Otherwise, BPA will start the process as soon
    as practical after September 30, 2009;

-   BPA will review the customer's CRC file and will determine if all of
    the requirements have been met. The customer will be notified of any
    deficiencies and asked to submit the required documentation; and

-   Once BPA is satisfied that the customer has met all of the CRC
    program requirements, BPA will notify the customer in writing.

**Agreed Upon Procedures Reports**

Customers must have submitted an agreed upon procedures report, per
section 1.8, for each of the years that CRC claims are made. If there
are missing reports or if the existing reports do not adequately
document the time period being covered, the tests that were made, and
the results of those tests, utilities are encouraged to have their state
auditor or CPA firm conduct a close-out review covering the entire time
period when CRC claims were made.

# 3.0 Conservation Acquisition Agreement

This section provides an overview of elements that are specific to the
Conservation Acquisition Agreement (CAA). Features which are the same
for both the CAA and the Conservation Rate Credit are described in
section 1. Utilities should notify their Energy Efficiency
Representative to indicate interest in participating in the CAA.

## 3.1 Procedure for Establishing a Conservation Acquisition Agreement

### 3.1.1 Establishing a New Agreement

To initiate a customer-specific CAA agreement, customers should submit a
proposal to their EER that includes the measures, metering and savings
verification method to be used, sector-specific reimbursement rate for
those measures, estimated installation cost, total implementation budget
amount, and the proposed delivery approach. BPA will review the proposal
submitted, may ask clarifying questions and, if acceptable for purchase,
negotiate final terms for the agreement.

For standardized offers, customers request a CAA, the specific standard
offer, and an implementation budget amount. The implementation budget
amount requested should estimate the expected expenditures for the
service area for the term of the agreement. This request may be made to
the EER directly.

BPA will review the request submitted and, if the request is accepted,
develop a draft CAA. Generally, BPA will provide a draft CAA to the
customer for review. Once the CAA is in final form, two originals will
be sent to the customer with a request that both be signed and one
original be returned to BPA.

## 3.2 Conservation Acquisition Agreement Structure

### 3.2.1 Contract Body and Exhibit

The structure of the CAA contains terms and conditions applicable to the
overall purchase of energy savings. The exhibit provides terms and
conditions specific to measures or outlines processes and conditions
that must be met in order to receive reimbursement from BPA.

### 3.2.2 Standard Offers 

BPA's initial set of standardized offers includes the Commercial and
Industrial Lighting Offer (C&ILO), Commercial and Industrial Standard
Offer (C&ISO), Irrigated Agriculture Standard Offer (AgSO), and a
comprehensive Residential Standard Offer (ResSO). BPA's reimbursement
amounts for these standard offers are detailed in the Post-2006
Conservation Program Reimbursement Strategies and Levels document (April
2007 or subsequent edition). The term of BPA's standard offers is
through September 30, 2007. BPA plans to develop follow on offers for
customers that will take effect October 1, 2007.

### 3.2.3 Customer-Specific Agreements

Customers may request customized terms and conditions suitable to their
service area. BPA will consider such requests and any customized
purchase will be made by BPA within the parameters of the Post‑2006
Program Structure (attachment D). This includes the parameters
established in the Reimbursement Strategies and Levels document
(attachment A).

### 3.2.4 Change in Requirements for Standard Offers & Negotiated Agreements

BPA will make changes to the structure of the CAA or the Exhibit(s) with
six months notice. Generally, changes will be made by notice and will be
associated with changes made to this manual.

## 3.3 Changes to Implementation Budget Amounts

### 3.3.1 Periodic Reviews by BPA

BPA reserves the right to review actual budget expenditures relative to
the initial implementation budget amount and the period of time
remaining during the term of the agreement. BPA, working with the
customer, may review the actual expenditure rate and lower the
implementation budget amount if the budget provided in the agreement
cannot be fully utilized during the term of the agreement. BPA will take
into account projects that are in process and have a reasonable chance
of being completed as part of working with the customer to make this
decision.

### 3.3.2 Requests for Additional Budget Amounts

Customers may at any time during the agreement request additional budget
for standardized offers and custom agreements. BPA will review such
requests, taking into account actual expenditures, projects in process,
and potential new projects, and may add budget to projects in the CAA.

Requests for additional budget should be sent to the customer's EER in
writing, should identify the standard offer or custom project for the
addition of the funds, and should include information on actual or
potential projects supporting the increase in funding. If the request is
approved by BPA, BPA will send the customer a letter increasing the
budget amount.

# 4.0 Renewables Option of the Conservation Rate Credit

Criteria for Renewable Energy Resources Eligible for the Renewables
Option (RO) of the Conservation Rate Credit

## 4.1 Purpose and Scope

The purpose of this section is to explain the procedures for
implementing the RO.

Many of the new requirements included in this section exist because of
the \$6 million dollar/year cap on claims against the RO. To ensure this
\$6 million spending cap is not exceeded, claims against the RO will be
pro rata reduced if they total more than \$6 million in any single year.
Several new reporting restrictions have been put into place to help
ensure the \$6 million is distributed fairly, that the objectives of the
program are met (section 4.2), and that funds are channeled towards
utilities with valid project/program needs.

## 4.2 Objectives of the Renewables Option

-   To encourage the development of new incremental renewable energy
    facilities and activities in the Pacific Northwest, and

-   To maximize the development of incremental renewable generation.

## 4.3 Definitions

-   **Community Owned Renewable Projects:** Community owned means that
    more than one member of the local community has a significant direct
    financial stake in a small commercial-scale project (meeting the New
    Renewable Energy Facility definition) other than through land lease
    payments, tax revenues, or other payments in lieu of taxes. Small
    commercial-scale means all projects that are too large to qualify
    for net metering but less than 3-megawatt capacity (e.g., onsite
    home-sized projects are excluded and projects must be connected to
    the grid). Customers participating in such projects are eligible for
    an annual dollar for dollar rate credit for expenses associated with
    the project(s). As with other aspects of the RO, administrative
    costs are not eligible expenses. BPA will approve applications for a
    rate credit amount after the customer demonstrates to BPA's
    satisfaction that the proposed project meets this definition of a
    Community Owned Renewable Project.

-   **Environmental Attributes** means the non-power attributes
    associated with the energy generated from a renewable energy
    facility. Environmental attributes are the fuel type, emissions, or
    other environmental characteristic of a renewable resource.
    Non-power attributes or environmental attributes do not include any
    energy, capacity, reliability, or other power attributes used to
    provide electricity services. Environmental or non-power attributes
    are expressed in megawatt-hours (MWh); one Environmental Attribute
    represents the non-power attributes made available by the generation
    of 1 MWh of energy from a Renewable Energy Facility. Environmental
    Attributes are commonly referred to as "Renewable Energy
    Certificates" (RECs), "Green Tags," or "Tradable Renewable
    Certificates" (TRCs).

-   **Environmentally Preferred Power (EPP):** One of BPA's renewable
    energy products for which BPA charges a Green Energy Premium.

> (WP-07-E-BPA-25)

-   **Existing Renewable Energy Facility (Existing Facility)** is a
    Renewable Energy Facility that was energized prior to January 1,
    2006, but after May 1, 1999.

-   **Hybrid Facilities:** That fraction of a renewable energy facility
    that uses a Renewable Energy Fuel Source to generate electricity.

-   **Incremental Renewable Energy Facilities and Activities:** Those
    activities and resources beyond that required by law. For example,
    in Oregon, the Investor-Owned Utilities System Benefit Charge is
    required by law; therefore, it is not incremental and is not
    eligible for the RO.

-   **Integration Costs:** Costs of hour-to-hour storage and/or shaping
    of generation from non-dispatchable Renewable Energy Facilities.
    Integration costs do not include within hour ancillary services
    (imbalance and regulation costs) or transmission costs.
    Self-supplied storage and shaping is eligible, if costs are approved
    by BPA. BPA suggests self-supplied integration cost claims should be
    based on near-term opportunity costs. Certification by an
    independent CPA is required for approval.

-   **Net Electric Energy** means the metered MWh generated and sold,
    and excludes electric energy used within the renewable energy
    facility to power equipment such as pumps, motors, controls,
    lighting, heating, cooling, and other systems needed to operate the
    facility.

-   **New Renewable Energy Facility (New Facility)** is a Renewable
    Energy Facility that was energized after January 1, 2006. BPA will
    distinguish between new facilities and expansions of an existing
    facility on a case-by-case basis.

-   **Pacific Northwest** has the meaning defined in section 3(14) of
    the Act, Public Law 96-501, 16 USC 839.

-   **Project Costs:** Project Costs will be limited to independently
    CPA-certified contracted energy charges at the bus bar for the year
    in which the claim is being made and independently CPA-certified
    Integration Costs for the year in which the project's generation
    being claimed.

> Project Costs = \[Energy costs at the bus bar for the year in which
> the claim is being made + integration costs for the year in which the
> claim is being made\]

-   **Proxy for Avoided Cost:** The simple average of BPA's FY 2007 flat
    Priority Firm (PF) preference rate and the 2007 forward flat-block
    Mid-C market price used in the investor-owned utility residential
    exchange settlement. The 2007 forward flat block Mid-C market price
    used in the residential exchange settlement is equal to \$58.46/MWh
    and the FY 2007-2009 flat PF preference rate is equal to
    \$25.87/MWh, resulting in a Proxy for Avoided cost of \$42.17/MWh.

-   **Renewable Energy Certificates (RECs):** See Environmental
    Attributes.

-   **Renewable Energy Facility** means a single module or unit, or an
    aggregation of such units, which generates electric energy that is
    independently metered and that results from the utilization of a
    Renewable Energy Fuel Source.

-   **Renewable Energy Fuel Source** means:

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-   **Biogas:** Electricity generated from the combustion of gases
    derived from animal manure, sewage digesters, or from decaying plant
    matter. Includes sewage treatment plant digesters, dairy-based
    anaerobic digesters, and biomass gasification.

-   **Biomass** is electricity generated from combustion of:

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-   The organic, non-fossil-based portion of municipal solid waste;

-   Energy crops;

-   Agricultural residues;

-   Untreated mill or forest residues; or

-   Biomass-derived energy from hybrid facilities, not including energy
    derived from fossil fuels.

> Biomass does not include the combustion of black liqueur or
> preservative-treated wood waste.

-   **Geothermal:** Electricity generated from naturally occurring
    underground heat.

-   **Hydroelectric:** Electricity generated by the flow of water at
    facilities located outside of protected areas as defined by the
    Council.

-   **Landfill Gas:** Combustion of gases derived from landfills.

-   **Ocean:** Generation of electricity from wave, thermal gradient or
    tidal forces. Ocean energy is not likely achieve commercial status
    during this rate period, and it is eligible as Research Development
    & Demonstration (RD&D) during the FY 2007-2009 rate period.

-   **Solar:** Electricity generated from solar heat and light. Includes
    solar photovoltaic systems (PV) and solar water heaters.

-   **Wind:** Electricity generated from wind. Because project size
    affects costs, wind projects are broken out into three categories:

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-   Utility-scale wind projects with a total installed capacity greater
    than or equal to 10 MW;

-   Wind projects with a total installed capacity of less than 10 MW but
    greater than 25 kW; and

-   Wind projects with a total installed capacity of less than or equal
    to 25 kW.

## 4.4 General RO Requirements

> a\. Only Incremental Renewable Energy Facilities and activities are
> eligible for the RO;
>
> b\. The RO is only available during FY 2007 through FY 2009. There was
> no early start for the RO claims portion of the CRC;
>
> c\. Renewable claims under the RO must be spent on qualifying
> renewable activities and or projects prior to the end of the rate
> period (e.g., money claimed against the renewable program under CRC
> should not be used for conservation measures). If all of the money
> claimed on renewables is not directed towards qualifying renewable
> projects or activities and reported to BPA by October 31, 2009, the
> customer will be billed for that portion of their renewable claim
> which remains unreported, plus interest. Interest will accrue on the
> unreported amount from the date of the customer's first renewable
> claim against the CRC program for the FY 2007-2009 rate period.
> Interest will be calculated by dividing the Prime Rate for Large Banks
> as reported in the Wall Street Journal, plus 4 percent; by 365. The
> applicable rate for Large Banks shall be the rate reported on
> October 31, 2009. Customers will be billed on the November 2009 bill,
> issued in December 2009;
>
> d\. Claims made under the RO need to be substantiated using the PTR
> System (See section 4.21 for reporting requirements.);
>
> e\. Administrative activities do not qualify for the RO unless
> otherwise exempted; and
>
> f\. Individual customer RO claims are limited to the customer's total
> CRC eligibility for the fiscal year in which the claim is being made.

## 4.5 What is a Qualified Renewable Energy Facility

To be eligible for the RO, a renewable energy facility must satisfy the
following criteria:

> a\. The energy must be generated using a Renewable Energy Fuel Source
> and meet one of the following criteria.
>
> 1\. **Time of first use** --- The facility must begin commercial
> operation no earlier than May 1, 1999, and no later than December 31,
> 2009.
>
> 2\. New Facilities energized after September 30, 2009, but prior to
> December 31, 2009, may qualify for the RO on a case by case basis,
> subject to BPA approval. To qualify, the customer must provide BPA
> with the verification information listed below. If any one of these
> conditions is not met, the customer must repay BPA for claims based on
> the facility, plus interest (see section 4.4(c), except that the
> billing schedule will begin January 2010 for customers with facilities
> falling under this category.)
>
> i\. Verification that the customer has entered into a power purchase
> agreement during FY 2007-2009 for the output of the facility;
>
> ii\. Evidence supporting the claim that the Facility will be energized
> by December 31, 2009. Examples: contractual incentives for commercial
> operation by January 31, 2009, or penalties for late performance; and
>
> iii\. Verification by no later than January 15, 2010, that the New
> Facility had achieved commercial operation by December 31, 2009.
>
> 3\. Renewable Energy Facilities on-line prior to May 1, 1999, are
> eligible for RO if they have been rebuilt or expanded. The following
> criteria apply:
>
> i\. Rebuilt facilities qualify if the fair market value of the
> facility before the upgrades is less than 20 percent of the new total
> fair market value. In other words, capitol investments in the new
> facility must total at least 80 percent of the value of the assessed
> value of the repowered facility. Tax records should be provided to
> validate this claim.
>
> ii\. Incremental expansions to Renewable Energy Facilities qualify if
> the additional equipment generates incremental energy which is metered
> independently from the original facility. Replacement or modification
> of existing equipment that does not change gross power production, but
> results in a reduction of electric power consumption, will be
> considered conservation.
>
> b\. **Location** --- renewable energy facilities must be located in
> the Pacific Northwest, with the following three exceptions:
>
> 1\. The currently permitted Wyoming Wind Project at Foote Creek Rim
> and Simpson Ridge in Carbon County, Wyoming;
>
> 2\. Projects shown by the applicant to effectively displace operation
> of regional nonrenewable generation resources (subject to BPA's
> approval); or
>
> 3\. The project or a portion of the project serves load within the
> Pacific Northwest (subject to BPA's approval).

## 4.6 Metering Requirements

Except for PV, solar water heaters and RD&D projects, the output of
renewable energy facilities must be metered by a revenue-quality meter
at the point of delivery in accordance with generally accepted utility
standards, and output and meter calibration records must be available
for inspection by BPA upon request.

## 4.7 Power Purchases from Power Marketers

Purchases from power marketers and pooling organizations are eligible
for the RO provided:

> a\. The underlying resources meet the eligibility requirements for
> renewable energy facilities; and
>
> b\. The customer can supply documentation verifying the renewable
> energy resource eligibility; the amount and term of the purchase, the
> Project Costs, and attestation that the environmental attributes have
> not been sold or claimed elsewhere. The amount of the RO available for
> each type of underlying renewable energy facility is specified in
> tables 1 and 2 in section 4.16.
>
> c\. Customers are required to retain and retire within their service
> territory the environmental attributes associated with power purchases
> from qualifying renewable energy facilities when claiming such
> purchases on their annual CRC report. If the environmental attributes
> are sold into the customer's green pricing program. Costs of
> administrating the green pricing program may qualify as eligible
> expenses. Revenues from the attribute sales and the pricing program
> must be reinvested in the green pricing program to qualify for the RO.

## 4.8 Transfer of RO Claims for Renewable Energy Output

Customers may enter contractual arrangements through which one customer
would own or purchase the output from an eligible renewable energy
facility and other customers would apply their RO to the output.

For example, Customer A could sign a power purchase agreement with a
developer for 15 MW of wind power from a qualifying new renewable energy
facility. Customer A could assign the right to claim the project as a
new renewable energy facility to Customer B under a separate payment
arrangement with Customer A. All of the project's output would be
delivered to, and used in, Customer A's system, but Customer B would own
and could claim the resource under the RO. The RECs from this project
must be retired within one of the participating parties' service area(s)
for the entire rate period and should not be subject of a second claim.

Customers may also transfer RO claims to other BPA customers by selling
the attributes or RECs generated by eligible renewable energy facilities
to other BPA customers.

## 4.9 Environmental Attributes from Renewable Energy Sources 

This section applies only to Renewable Energy Certificates (Green Tags,
RECs, or environmental attributes), not to Environmentally Preferred
Power (EPP); section 4.10 addresses EPP.

RECs are eligible for RO, provided the following conditions are met:

> a\. Megawatt-hours cannot be claimed twice under the RO. RECs
> associated with renewable energy claimed elsewhere under the RO are
> not eligible for additional RO benefits under this section. RECs from
> new facilities cannot be claimed under this program during this rate
> period if the energy from the project is the subject of a RO claim
> anytime during the rate period.
>
> b\. Claims based on RECs from a single New Facility cannot total more
> during the 3-year rate period (for all customers) than could be
> derived from a claim based on one year of generation times the
> appropriate \$/MWh credit cap (table 1, section 4.16). Without this
> restriction, REC claims for a specific New Facility could be claimed
> for all three years of the rate period at a purchase price equal to
> the credit cap. Under this scenario, REC claims would total three
> times that of a straight facility claim. (The amount of credit
> associated with REC claims is equal to the purchase price of the REC,
> not to exceed the caps posted in tables 1 and 2; RECs can be claimed
> all three years of the rate period.)
>
> c\. Only RECs which are retired within the purchasing utility' service
> area are eligible for the RO program. RECs sold outside of the
> utility's service area cannot be claimed by the seller but may be
> claimed by the purchaser. RECs resold in a premium green pricing
> program will be eligible for RO credit in an amount equal to the REC
> purchase price if the revenues from the green pricing program, net of
> REC purchase price, are reinvested in qualifying New Renewable Energy
> Facilities, other qualifying Renewable Education program(s),
> qualifying RD&D project(s) or the green pricing program. Costs of
> administrating the green pricing program may qualify as eligible
> expenses. Demonstration of reinvestment will be required in the
> October 31 annual report to BPA as required in section 4.21.
>
> 1\. The facility generating the RECs must be a qualifying Renewable
> Energy Facility as defined in section 4.5.
>
> 2\. The output of the generating resource from which the RECs
> originated is metered (section 4.6).
>
> 3\. The REC claim is accompanied by: (1) a generator attestation
> verifying the monthly output of the generation facility, that the RECs
> have been sold only once, and that the RECs retain associated emission
> offsets; (2) Wholesaler attestation(s) verifying that the RECs have
> been sold only once and retain associated emission offsets; and (3) an
> independent annual audit verifying purchase price. Verification of REC
> ownership from the Western Renewable Energy Generation Information
> System can be used in lieu of (1) and (2) above.
>
> 4\. RECs can only be claimed in the year in which they are generated.
>
> 5\. RO credit amount: Payment scale is equal to the purchase price of
> the RECs, not to exceed the resource specific credit caps listed in
> table 1 or table 2 (section 4.16). Proof of purchase price must be
> verified via independent audit and provided to BPA by October 31 for
> the proceeding fiscal year.
>
> d\. Solar exception. RECs from PV units claimed under the RO can be
> sold outside of the customer\'s service area because the credit for
> solar units has been reduced to \$500/kW.

## 4.10 Renewables Purchases from BPA

BPA currently offers three types of renewable products:
(a) Environmentally Preferred Power (EPP), (b) Alternative Renewable
Energy (ARE), and (c) RECs.

> a\. **EPP and ARE:** BPA will reinvest the Green Energy Premiums (as
> defined in WP-07-FS-BP-05, page 29) associated with EPP and ARE sales
> in the Pacific Northwest Renewable RD&D projects. Therefore,
> 100 percent of the Green Energy Premium associated with EPP and ARE
> (\$10.50/MWh) is eligible for the rate credit under the RO.
>
> ARE and EPP remarketed into green pricing programs is eligible for the
> RO if proceeds, net of the EPP/ARE purchase price, are reinvested in
> New Renewable Energy Facilities, Renewable Education program(s),
> qualifying RD&D project(s), or the green pricing program itself. Costs
> of administrating the green pricing program may qualify as eligible
> expenses. Demonstration of reinvestment will be required in the
> October 31 annual report to BPA required in section 4.21.
>
> b\. **RECs:** BPA will reinvest the green energy premiums associated
> with EPP in Pacific Northwest renewable RD&D projects. Therefore, the
> amount of the RO for BPA's RECs will be 100 percent of the premium
> paid for this product. RECs remarketed into green pricing programs are
> eligible for the CRC if proceeds, net of the REC purchase price, are
> reinvested in New Renewable Energy Facilities, Renewable Education
> program(s), qualifying RD&D project(s), or the green pricing program.
> Costs of administrating the green pricing program may qualify as
> eligible expenses. Demonstration of reinvestment will be required in
> the October 31 annual report to BPA required under section 4.21.
>
> c\. Customers are required to retain and retire within their service
> territory the environmental attributes associated with EPP or RECs
> purchased from BPA when claiming such purchases under the RO.

## 4.11 Third Party Blended Renewable Resource Products

A customer can receive credit under the RO for the purchase of a third
party, or their own, blended renewable resource product consisting of
existing or new renewable energy facilities meeting the eligibility
criteria of the RO. The appropriate "new" credit will be given to the
new portion of the product for one year of estimated generation. The
"existing" portion of the blended product will be given the appropriate
credit for existing renewable energy facilities. Renewable energy
claimed elsewhere under the RO is not eligible for additional RO
benefits under this section.

Customers are required to retain and retire within their service
territory the RECs associated with such transactions when claiming such
purchases under the RO.

## 4.12 Community Owned Renewable Projects

Expenses associated with Community Owned Renewable Projects, incurred by
the customer, which include but are not limited to interconnection,
integration, and energy costs above the Proxy for Avoided Cost, which
are not passed through to the utilities customers or to the
Community-owned project, are eligible for a dollar-for-dollar credit.
Community Owned Renewable Projects are New Facilities; therefore, claims
based on energy production are limited to one year of actual generation.
Consistent with other eligible activities and programs under this
chapter, Administrative costs are not eligible.

## 4.13 Renewable Education Programs

Renewable Education Programs are customer-funded curriculum and
demonstration projects. Education programs are eligible for a
dollar-for-dollar rate credit, capped at the greater of 20 percent of
the customer's total CRC over the rate period or \$25,000/year.

## 4.14 Donations

Donations to 501c(3) non-profit organizations promoting renewable
resource development in the Pacific Northwest are eligible for the RO
upon BPA approval. Examples of organizations that may qualify:
Bonneville Environmental Foundation, Energy Trust of Oregon, Climate
Trust, Last Mile Electric Coop, and Northwest Seed. Donations are
limited to 20 percent of the customer's total CRC over the rate period.
One hundred percent of the donated amount is eligible for the RO. BPA
may waive the 20 percent cap on a case-by-case basis if there are
compelling reasons to do so.

To qualify for credit, the following conditions must be met:

> a\. The 501c(3) recipient will be asked to self-certify that at least
> 80 percent of the donation will be used to support renewable resource
> activities as contemplated elsewhere in this manual and must
> demonstrate that the donation was not used to support lobbying
> activities.
>
> b\. The receiving organization will provide BPA and the donating
> customer a report documenting use of the donated funds by no later
> than October 31 of each year, for the preceding year. BPA reserves the
> right to audit the receiving organization.

## 4.15 Contributions to Qualified Research Development & Demonstration Activities

One hundred percent of the amount spent on qualified RD&D activities is
eligible for the RO; however, renewable RD&D claims cannot comprise more
than 40 percent of the participating utility's total CRC over the rate
period. Costs are limited to those incurred from October 1, 2006, to
September 30, 2009. Electricity production obtained as a result of a
RD&D activity will not qualify for RO credits. BPA may waive the 40
percent cap on a case-by-case basis if there are compelling reasons to
do so.

BPA pre-approved RD&D activities include:

> a\. The regional wind data collection program administered by Oregon
> State University;
>
> b\. The Regional Solar Radiation Data Center administered by the
> University of Oregon, and the Wave Energy Technology Center;
>
> c\. New ocean-powered renewable energy facilities; and
>
> d\. BPA will approve small-scale (less than \$20,000 per installation)
> renewable energy demonstration systems on a case-by-case basis without
> consultation with the RTF, provided the project meets all of the
> following criteria:
>
> 1\. The performance of the project is measured on at least monthly
> intervals. Projects using revenue-quality meters are preferred but not
> required;
>
> 2\. The system performance and description of the project must be
> reported to the public via the Intranet, as well as local reporting
> mechanisms, before September 30, 2009; and
>
> 3\. The project falls under at least one of the Eligible Activities
> listed below, in section 4.15.1 and not specifically excluded in
> section 4.15(e).

### 4.15.1 Eligible RD&D Activities

The following categories of activities potentially qualify for the RO as
RD&D activities. Qualification will be determined using the criteria
listed in section 4.15.2.

> a\. Assessment of the supply, location, development potential, or
> quality of renewable energy sources;
>
> b\. General preparations (i.e., not in sole support of a specific
> project) for the development of renewable resource areas. These
> efforts may include identification and resolution of technical,
> environmental, and institutional issues potentially affecting resource
> development;
>
> c\. Research regarding environmental or other issues affecting the
> development and operation of renewable energy facilities. These may be
> undertaken at a specific project, providing the results will
> significantly benefit other projects;
>
> d\. Development or demonstration of new technologies with potentially
> significant application to the use of renewable energy sources;
>
> e\. Demonstration of novel applications of established technologies
> using renewable energy sources (e.g., new applications of commercially
> available technologies). Conventional applications of commercially
> available technologies are not considered RD&D. For example: PV
> installations using conventional approaches/designs are no longer
> considered to be in the developmental phase and will not be considered
> RD&D. PV installations using new designs or novel applications may be
> considered developmental;
>
> While a RD&D activity may be undertaken in conjunction with the
> development of a specific commercial project, the cost of the activity
> should not include the costs of developing or operating a proven
> commercial application. Efforts to lower costs through increased
> production or mass purchase of commercial technologies are not
> considered to be RD&D; and
>
> f\. Provision of information useful for the evaluation, siting,
> design, or operation of facilities using renewable energy sources.

### 4.15.2 Criteria used to Evaluate Proposed Renewable Resource Research, Development, and Demonstration Activities

Other RD&D activities may be proposed and approved by BPA on a
case-by-case basis or, at BPA's sole discretion, submitted to the RTF
for review. The proposal must include research technology, renewable
fuel source, location, objectives, approach/methodology, tasks,
timeline, budget, and milestone reporting schedule. The proposal should
clearly state the project's specific stage in the technology continuum
(hypothesis, research, development, or demonstration). The proposal
should also include a section addressing the criteria set forth here, as
applicable:

> a\. The activity should have a high probability of expanding the use
> of qualifying renewable resources in the Northwest;
>
> b\. The activity should have a high probability of achieving one or
> more of the following objectives: reduced resource development or
> operating costs; improved technology performance (reliability,
> conversion efficiency, etc.); reduced environmental impact; improved
> project development characteristics (e.g., lead time); and improved
> forecasts of cost, performance, development timeline, or environmental
> impact;
>
> c\. Preferably, activities should address resources promising low or
> declining costs, abundant quantity, modest or beneficial environmental
> effects, and favorable development characteristics, including short
> lead-time and modularity;
>
> d\. Preference for activities designed to achieve multiple objectives
> and widespread benefits (e.g., the activity should foster the
> development of qualifying resources in general, as distinguished from
> primarily supporting the development of a specific commercial
> project). For example, assessment of the spatial extent, and general
> turbulence and wind shear characteristics of a wind resource area
> could be considered a qualifying RD&D activity, whereas studies
> leading to the placement of individual wind turbines are a
> responsibility of the commercial developer; and
>
> e\. Projects that are co-funded/co-sponsored are preferred. Co-funded
> amounts are excluded from the RO credit.

## 4.16 Renewable Energy Purchased from qualifying Renewable Energy Facilities

Methods to calculate the RO credit earned by energy purchases from
eligible Renewable Energy Facilities are described below. The \$/MWh cap
for each resource type is shown in table 1 (New Facilities) and table 2
(Existing Facilities).

> a\. **New Renewable Energy Facilities:** To be eligible for credit,
> the New Facility must qualify under sections 4.4, 4.5, and 4.6. The
> amount of the credit earned by New Facilities is based on the
> difference between Project Costs and the Proxy for Avoided Costs
> (\$42.17/MWh) and capped at \$27/MWh. Credit can be earned for up to
> one year of generation regardless of whether the facility is energized
> in the beginning or at the end of the rate period.
>
> Credit for New Utility-scale wind projects will be calculated
> differently than other New Facilities because the Council updated
> project cost estimates for New Utility-scale wind projects. The
> revised cost estimate for Utility-scale wind increased by nearly 100
> percent resulting in a more than 7-fold increase in the \$/MWh credit.
>
> If the Council's new cost estimates were used as the sole basis for
> the rate credit for Utility-scale wind projects (as occurs with other
> New Facilities), BPA would create a windfall for purchasers of less
> expensive projects. (The difference between the actual costs and the
> Council's cost estimates can be significant.) Because of the \$6
> million dollar cap on total renewable claims and because of the large
> amount of wind being developed in the Region, BPA decided to change
> the way utility-scale wind credit is calculated.
>
> The credit for New and Existing Utility-scale wind projects will be
> based on actual Project Costs, not the Council's cost estimate. The
> Council's cost estimate for New Utility-scale wind will be used to
> create the cap. Both the cap and the Council's estimate are posted in
> table 1.
>
> Calculating the credit:
>
> 1\. New Utility-scale wind. The amount of the RO is equal to the
> customer's share of the output from a New Utility Scale Wind project
> over any single fiscal year during the rate period, multiplied by the
> difference between actual Project Costs and the Proxy for Avoided
> Costs, not to exceed \$27/MWh;
>
> Claims submitted as part of the October 31 report to BPA (section 4.21
> b) should be based on actual generation and should use metered data.
> Claims based on forecasted generation should use capacity factors
> provided in table 1 and the name plate rating of the facility.
> Forecasted claims apply to projects not on line by the end of the rate
> period, but scheduled to be in commercial operation prior to December
> 31, 2009;
>
> Third party verification (CPA audit) of Project Costs and actual
> generation should be included in the October 31 annual report to BPA
> (BPA may grant case-by-case extensions for audit reports.)
>
> *New Utility-Scale wind Credit = \[(cost of energy at the busbar for
> the year in which the claim is being made + integration costs for the
> year in which the claim is being made) -- (Proxy for Avoided Cost)\] x
> MWh generated over one year. NTE the cap posted in table 1*; and
>
> 2\. All other New Renewable Facilities: The amount of the credit is
> equal to the customer's share of the output over any single fiscal
> year during the rate period, multiplied by \$/MWh credit provided in
> table 1.
>
> b\. **Existing Renewable Energy Facilities:** It is BPA's objective to
> encourage the development of new incremental renewable energy
> facilities and activities. Therefore, the credit for existing
> facilities cannot exceed that of new facilities.
>
> Existing facilities will be eligible for credit on energy generated
> during the entire rate period. Because of the 3-year rate period, the
> credit for Existing Facilities is capped at 33 percent of the credit
> given to New Facilities using the same renewable energy source. The
> amount of the \$/MWh credit for generation from Existing Facilities
> will be based on the customer's share of actual generation during the
> rate period, the type of facility, and the difference between the
> Project Costs during the year the claim is being made and the Proxy
> for Avoided Cost, not to exceed the \$/MWh caps posted in table 2
> (capped at 33 percent of the cap for New Facilities). Credit will only
> be given for metered generation during the rate period.
>
> *Credit = \[energy costs at the busbar for the year in which the claim
> is being made + integration costs for the year in which the claim is
> being made\] -- \[Proxy for Avoided Cost\] x MWh. NTE the cap posted
> in table 2.*
>
> 1\. Third party verification (audit) of Project Costs for the year the
> claim is being made and third party verification of actual generation
> should be included in the October 31 annual report to BPA. BPA may
> grant case-by-case extensions for audit reports.
>
> 2\. The existing facility must qualify under sections 4.5 and 4.6.
>
> 3\. No credit will be given to existing solar energy facilities.

[]{#__RefHeading___Toc166635720 .anchor}Table 1: New Renewable Facility
Credit

+---------------------------------+-----------+-----------+-----------+
| **New Facilities**              |           |           |           |
|                                 |           |           |           |
| **Total Credit for each         |           |           |           |
| Facility = (Capacity) x         |           |           |           |
| (Capacity Factor) x (New        |           |           |           |
| Facility Credit). If claiming   |           |           |           |
| actual generation, disregard    |           |           |           |
| capacity factor and use metered |           |           |           |
| data. If claiming forecasted    |           |           |           |
| generation use the nameplate    |           |           |           |
| rating to determine capacity    |           |           |           |
| and Capacity Factors posted     |           |           |           |
| below.**                        |           |           |           |
|                                 |           |           |           |
| **Credit should not exceed the  |           |           |           |
| resource-specific caps listed   |           |           |           |
| below. *Credit for 1 year of    |           |           |           |
| Generation.***                  |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| **Resource type *(project       | **Project | **Credit\ | **        |
| size)***                        | Cost      | (\$/      | Capacity\ |
|                                 | (Proxy)   | MWh)^1^** | Factor    |
|                                 | (         |           | ^2^**     |
|                                 | \$/MWh)** |           |           |
+---------------------------------+-----------+-----------+-----------+
| Biogas ^3^                      | 51.00     | 8.50      | 90%       |
+---------------------------------+-----------+-----------+-----------+
| Geothermal ^4^                  | 67.84     | 25.34     | 92%       |
+---------------------------------+-----------+-----------+-----------+
| Hydro ^5^                       | 48.46     | 5.96      | 80%       |
+---------------------------------+-----------+-----------+-----------+
| Micro hydro *(\<1 MW)* ^4^      | 79.00     | 27.00     | 58%       |
+---------------------------------+-----------+-----------+-----------+
| Landfill gas *(\> 2 MW)* ^3^    | 42.00     | -0.50     | 80%       |
+---------------------------------+-----------+-----------+-----------+
| Landfill gas *(less than or     | 50.00     | 7.50      | 90%       |
| equal to 2 MW)*^6^              |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Wind *(less than or equal to 25 | 270.00    | 27.00     | 14%       |
| kW (no Tx))*^3^                 |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Wind *(less than or equal to 10 | 73.00     | 27.00     | 30%       |
| MW but \> 25 kW)* ^7^           |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Wood/Forest residue (wood only, | 68.00     | 25.50     | 90%       |
| not cogen) ^3^                  |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Wood/Forest residue (cogen) ^3^ | 51.00     | 8.50      | 90%       |
+---------------------------------+-----------+-----------+-----------+

**Table 1, continued**

+---------------------------------+-----------+-----------+-----------+
| New Utility--scale wind         |           |           |           |
|                                 |           |           |           |
| Credit = (Project Cost -- Proxy |           |           |           |
| for Avoided Cost) x (Capacity)  |           |           |           |
| x (Capacity Factor). If         |           |           |           |
| claiming actual generation,     |           |           |           |
| disregard capacity factor and   |           |           |           |
| use metered data. If claiming   |           |           |           |
| forecasted generation, use the  |           |           |           |
| nameplate rating to determine   |           |           |           |
| capacity and the Capacity       |           |           |           |
| Factor posted below.            |           |           |           |
+---------------------------------+-----------+-----------+-----------+
|                                 | Project   | Cap       | Capacity\ |
|                                 | Cost      | (\$/MWh)  | Factor    |
|                                 | (Proxy)   |           | ^2^       |
|                                 | (\$/MWh)  |           |           |
+---------------------------------+-----------+-----------+-----------+
| Wind - utility scale *(+1 0     | 80.00     | 27.00     | 30%       |
| MW)* ^8^                        |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Solar                           |           |           |           |
+---------------------------------+-----------+-----------+-----------+
|                                 | Project   | Credit    | Capacity\ |
|                                 | Cost      |           | Factor    |
|                                 | (Proxy)   |           |           |
|                                 | (\$/MWh)  |           |           |
+---------------------------------+-----------+-----------+-----------+
| Solar water heaters,            | 117.00    | 500.00    | NA        |
| collectors\>31 ft or evacuated  |           |           |           |
| tubes with equivalent output    |           |           |           |
| ^4^                             |           |           |           |
|                                 |           |           |           |
| (\$ credit per installation,    |           |           |           |
| based on capacity)              |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| Photovoltaic (PV) Credit in     | 290.00    | 500.00    | NA        |
| \$/kW ^4^                       |           |           |           |
|                                 |           |           |           |
| (\$ credit per kW)              |           |           |           |
+---------------------------------+-----------+-----------+-----------+
| ^1^ New Resource Credit         |           |           |           |
| (\$/MWh) = (Project cost as     |           |           |           |
| posted in table 1) - (Proxy for |           |           |           |
| Avoided Cost). NTE \$27/MWh.    |           |           |           |
| \$27/MWh Cap reflects the FY 07 |           |           |           |
| value of 20 years of CO^2^      |           |           |           |
| offsets. (Northwest Power and   |           |           |           |
| Conservation Council).          |           |           |           |
|                                 |           |           |           |
| ^2^ Capacity Factors taken from |           |           |           |
| the same sources as the cost    |           |           |           |
| estimates. Actual metered       |           |           |           |
| generation should be used if    |           |           |           |
| the project is in commercial    |           |           |           |
| operation.                      |           |           |           |
|                                 |           |           |           |
| ^3^ Project Cost is the FY 07,  |           |           |           |
| 20-year levelized cost of       |           |           |           |
| shaped and delivered energy     |           |           |           |
| (see Council Memo dated August  |           |           |           |
| 10, 2005).                      |           |           |           |
|                                 |           |           |           |
| ^4^ Cost data derived from      |           |           |           |
| unsolicited proposals submitted |           |           |           |
| to BPA and BPA project files.   |           |           |           |
|                                 |           |           |           |
| ^5^ Estimate based on one       |           |           |           |
| project.                        |           |           |           |
|                                 |           |           |           |
| ^6^ Costs derived from Energy   |           |           |           |
| Trust of Oregon \"Sizing and    |           |           |           |
| Characterizing the Market for   |           |           |           |
| Oregon Biopower Projects\"      |           |           |           |
| April 2005.                     |           |           |           |
|                                 |           |           |           |
| ^7^ Costs derived from an       |           |           |           |
| Energy Trust of Oregon report   |           |           |           |
| and from Northwest Power        |           |           |           |
| Planning and Conservation       |           |           |           |
| Council staff analysis. ETO     |           |           |           |
| report: \"A Comparative         |           |           |           |
| Analysis of Community Wind      |           |           |           |
| Power Development Options in    |           |           |           |
| Oregon\" July 2004.             |           |           |           |
|                                 |           |           |           |
| ^8^ Project Cost is the FY 07,  |           |           |           |
| 20-year levelized cost of       |           |           |           |
| shaped and delivered energy     |           |           |           |
| (see Council Memo dated July    |           |           |           |
| 13, 2006).                      |           |           |           |
+---------------------------------+-----------+-----------+-----------+

[]{#__RefHeading___Toc166635721 .anchor}Table 2: Caps on Credit for
Existing Renewable

  ------------------------------------------------------- ---------------
  **Resource type**                                       **Cap\
                                                          (\$/MWh)**

  Biogas                                                  2.81

  Geothermal                                              8.36

  Hydro                                                   1.97

  Micro hydro *(\< 1 MW)*                                 8.91

  Landfill gas \> 2 MW                                    -0.17

  Landfill gas less than or equal to 2 MW                 2.48

  Wind less than or equal to 25 kW                        8.91

  Wind less than or equal to 10 MW                        8.91

  Wind - utility scale (+10 MW)                           8.91

  Wood/Forest residue (wood only, no Cogen)               8.42

  Wood/Forest residue (Cogen)                             8.42

  Solar water heaters, collectors\>35 ft^2^               NA

  Photovoltaic (PV)cCredit in \$/kW                       NA
  ------------------------------------------------------- ---------------

[]{#__RefHeading___Toc166635722 .anchor}Table 3: Renewable Credit Proxy
Values

+--------------------------------------------------------+-------------+
|                                                        |             |
+--------------------------------------------------------+-------------+
|                                                        | *           |
|                                                        | *(\$/MWh)** |
+--------------------------------------------------------+-------------+
| **Proxy for Avoided Costs =**                          |             |
+--------------------------------------------------------+-------------+
| Avg of FY 07 Flat PF & FY 07 IOU Settlement Flat-Block | **42.17**   |
| Mid C mkt price ^1^                                    |             |
+--------------------------------------------------------+-------------+
| **Cap =**                                              |             |
+--------------------------------------------------------+-------------+
| Proxy for present year value of a 20-year CO^2^ offset | **27.00**   |
| ^2^                                                    |             |
+--------------------------------------------------------+-------------+
| ^1^ The 2007 forward flat block Mid-C market price     |             |
| used in the residential exchange settlement is equal   |             |
| to \$58.46/MWh and the FY 2007-2009 flat PF preference |             |
| rate is equal to \$25.87/MWh, giving a Proxy for       |             |
| Avoided cost of \$42.17/MWh Value will be fixed at FY  |             |
| 07 levels not adjusted for inflation or variations in  |             |
| market prices.                                         |             |
|                                                        |             |
| ^2^ Cap based on NW Power and Conservation Council     |             |
| estimates of the average 2007 current year dollar      |             |
| value of a CO^2^ offset. Any credit below \$27/MWh     |             |
| could be considered cost effective if the CO^2^        |             |
| credits are not sold. CO2 value will be fixed at FY 07 |             |
| levels not adjusted for inflation.                     |             |
+--------------------------------------------------------+-------------+

## 4.17 Effects on Net Requirements Load

Adjustments to the customer's Subscription contract and Net Requirements
Load will be independent of credit given under the RO. No adjustment to
net requirements load is necessary for REC and EPP purchases.

## 4.18 Duration of the RO and Renewable Energy Purchases

The RO can only be applied to activities undertaken during the rate
period and energy generated during the rate period, except for special
considerations given to new facilities energized between January 1,
2006, and December 31, 2009 (see section 4.5).

## 4.19 Administration

Applications, notifications, inquiries, and other matters related to the
RO for renewable energy resources should be directed to the following
address:

> Bonneville Power Administration
>
> Attn: Debra Malin, MS PL-5
>
> P.O. Box 3621
>
> Portland, Oregon 97208
>
> Phone: (503) 230-5701
>
> E-mail: djmalin@bpa.gov

## 4.20 Optional Pre-Application

At any time, a customer may submit a Pre-Application containing the
information described below to obtain a preliminary and conditional
determination of a renewable energy facility's or activity's eligibility
for the RO:

*(Note: Pre-Application is optional, but the October 31 report will need
to include this information regardless of whether a Pre-Application is
submitted.)*

> a\. Name and type of facility or activity or other official
> designation;
>
> b\. Location and address of the facility and type of renewable energy
> source;
>
> c\. Name, address, and telephone number of a point of contact to
> respond to questions or requests for additional information;
>
> d\. A clear statement of how the renewable energy facility or activity
> satisfies the eligibility criteria;
>
> e\. If the customer intends to purchase power from a power marketer or
> enter into an arrangement with another customer, a description of the
> purchase or arrangement; and
>
> f\. Other applicable information as required elsewhere in this
> chapter.

## 4.21 Reporting requirements

> **a. Customer request for Renewable funds and the pro rata
> reduction:** Due to the \$6 million dollar annual cap on total annual
> renewable rate credit, BPA requires customers to request total annual
> renewable credit claims by July 15 of each year for the following
> fiscal year. If total utility requests exceed \$6 million dollars in
> any year, all requests will be pro rata reduced for that year so that
> the \$6 million dollar cap is not exceeded. Note: Small (\<7.5 aMW
> load) customers and federal customers will not be pro rata reduced but
> their requests will count against the \$6 million dollar cap. In the
> event of a pro rata reduction, BPA will notify customers of the amount
> their request was pro rata reduced by no later than August 1 of each
> year.
>
> Due to the increased volume of renewable claims against the RO, BPA
> will no longer allow adjustments to renewable requests (claims) after
> the pro rata reduction. The dollar amount remaining after the pro rata
> reduction will be considered a final number and the requesting utility
> has an obligation to spend this amount of money on renewables before
> the end of the rate period.
>
> Customers have the option of rolling forward that portion of their
> July 15 request which was pro rata reduced (e.g., Customers may
> request it again in the following fiscal year).
>
> The amount reduced via the pro rata reduction should be spent on
> conservation, rolled forward as a renewable request in the next year,
> or the customer can opt out of the program.
>
> Renewable requests made under this section should be sent to the
> address shown in section 4.19 by July 15 of each year of the rate
> period.
>
> **b. Annual Reports to BPA:** Customers must submit annual reports to
> BPA validating renewable claims made under the RO. Annual reports
> should use the PTR System and should be submitted by no later than
> October 31 of each year for the proceeding fiscal year's renewable
> claim.
>
> Due to increasing pressure on the \$6 million cap, BPA will no longer
> accept or approve additional requests for renewable credit for FY 2009
> if renewable claims from FY 2007 and FY 2008 have not been
> substantiated via the annual October 31 reports. This is consistent
> with reporting required for conservation under section 2.11.
>
> October 31 reports to BPA validating pro rata reduced July 15
> renewable rate credit requests (claims) should contain the following
> information to be approved:
>
> 1\. A statement of the annual and monthly metered Net Electric Energy
> generated by the renewable energy facility during the previous fiscal
> year and claimed for credit by the customer;
>
> 2 A statement showing how the customer's renewable rate credit claim
> was derived and computed;
>
> 3\. Applicable information required elsewhere in section 4, including
> third party verification: BPA recognizes it may be difficult to obtain
> third party verification by October 31 for the previous fiscal year
> and may grant extensions for third party verification on a
> case-by-case basis;
>
> 4\. RD&D and Donations: An Application for Certification for a
> qualified RD&D activity or eligible donations must contain a
> description of the qualified facility or activity, verification that
> applicable criteria have been met, and a copy of the invoices that are
> the basis for the customer's claim for credit (if applicable); and
>
> 5\. Purchases from BPA: The customer will reference the contract, the
> BPA product, the amount of the purchase (kWhs), and how much of the
> rate credit is being applied to this purchase in the annual October 31
> report.

## 4.22 Additional Facility Reporting Requirements

For each project, customers may submit a pre-certification application
to BPA before a resource purchase or renewable resource project
investment to ensure that it will qualify for the RO. Pre-certification
application is optional, but encouraged.

## 4.23 True-up for Generation-Based Claims

Due to the \$6 million dollar cap on renewable claims, utilities making
RO claims on new and existing facilities will be required to make claims
based on actual generation. True-ups will only be accepted for New
Facilities energized after the end of the rate period, but prior to
December 31, 2009. (These facilities use forecasted generation rather
than actual generation.)

## 4.24 Procedures for Processing Reports and Applications

BPA will process Pre-Applications and Annual Reports and notify the
customer of its determination within 60 days of receipt of the
Pre-Application and 30 days of receipt of the Application for
Certification.

> 1\. Notice to applicant --- If an application meets the requirements
> of the RO, BPA will issue a written notice to the applicant;
>
> 2\. Disqualification --- If an application does not meet the
> requirements of the RO for renewables or if some of the kWh claimed in
> the application are disallowed as unqualified, BPA will issue a
> written notice denying the application in whole or in part, with an
> explanation of the basis for denial; and
>
> 3\. Appeal of determination --- A customer may appeal a decision
> within 60 days. Appeals should be sent to the address shown in section
> 4.20.

## 4.25 Rules for Pooling Renewables

A project or proposal from a pooling entity is subject to the same
criteria, standards, and procedures as any other entity. The pool must
comply both on an individual and aggregate basis.

> **Renewable Pooling Requirements**
>
> a\. Pooling utilities are responsible for reporting their own
> individual claims and semi-annual reports. Claims are subject to
> applicable reporting requirements outlined elsewhere in this document;
>
> b\. The pooling organization will provide an annual summary report to
> BPA. The report shall document the claims of all pooling participants;
> and
>
> c\. If the pooling entity has a mix of customers using different
> conservation or renewable approaches, the pool must keep customers
> using different approaches separate for reporting purposes.

## 4.26 Technical Specifications for PV systems and Solar Water Heaters

> a\. **Customer-side solar photovoltaic systems** --- Eligible PV
> systems must meet the following requirements:
>
> 1\. Photovoltaic modules and inverters must be certified by the
> California Energy Commission (CEC). The lists of CEC-certified modules
> and inverters are posted on the California Energy Commission Web site
> (<http://www.consumerenergycenter.org/erprebate/equipment.html>);
>
> 2\. The system must be installed by a licensed contractor, unless
> installed by the purchaser, and must be installed in conformance with
> the system manufacturer\'s specifications and with applicable
> electrical codes and standards;
>
> 3\. Photovoltaic modules must be listed by a nationally recognized
> testing laboratory as meeting the requirements of the Underwriters
> Laboratory Standard 1703. Inverters must be listed by a nationally
> recognized testing laboratory for safe operation. Further, all
> grid-connected, inverter-based systems must meet the Institute of
> Electrical and Electronic Engineers Standard 929-2000. In the absence
> of a recognized testing standard, manufacturers of concentrator
> photovoltaic systems must provide acceptable evidence of one year of
> reliable operation of that model of equipment; and
>
> 4\. Photovoltaic systems credited under the RO must be warranted as
> follows:
>
> i\. The warranty must cover the photovoltaic panel components of the
> generating system against breakdown or degradation in electrical
> output of more than 20 percent from their originally rated electrical
> output in the first 20 years, and
>
> ii\. Other components of the generating systems against breakdown or
> degradation for five years, including the full cost of repair or
> replacement of defective components or systems.
>
> b\. **Solar Domestic Water Heaters** --- Eligible solar domestic water
> heating systems must be designed, installed, inspected, and found to
> be in substantial compliance with the most recent version of the
> **\"Bright Way to Heat Water Program - General and Technical
> Specifications."** These program specifications are available on the
> PTR System, under Downloads. Utilities claiming renewables credit for
> solar water heating systems under the RO are required to sign a Bright
> Way to Heat Water licensing agreement, available from BPA.

**Examples**

***[Existing Utility Scale Wind]{.underline}***

Big City Energy wants to use its rate credit to offset the cost of
purchasing 20 MW of energy from the Big Wind Project (energized in
2001). The busbar CY 2007 power purchase price is \$44/MWh, their
contracted integration charges are \$9/MWh. The project generated (and
Big City Energy purchased) 40,000 MWh in FY 2007, 60,000 MWh in 2008 and
50,000 MWh in 2009. This project would be classified as an Existing
Facility and as a utility-scale wind project.

\$/MWh Credit = \[(Contracted Power Cost) + (Contracted Integration
Charges)\] - (Proxy for avoided cost).

NTE 33 percent of the applicable New Facility credit.

\$/MWh Credit = \[(\$44/MWh) + (\$9/MWh) - (\$42.17/MWh) = \$11.83/MWh.

However, \$11.83/MWh \>33 percent of the credit given to New Utility
Scale Wind facilities (e.g. Existing Utility-scale wind projects are
capped at \$9.00/MWh). Therefore, the \$/MWh Credit for the purchase of
energy from the Big Wind Project is capped at \$9.00/MWh.

Total Credit = (Energy Generated) x (\$/MWh Credit)

Total Credit = (150,000 MWh) x (\$9.00/MWh) = \$1,350,000

Big City Energy can submit a request for a claim for \$1,350,000 anytime
during the rate period, but the amount claimed in one year cannot exceed
their annual CRC credit, and the claim will need to be substantiated in
the next October 31 report.

Big City Energy must have the output and costs independently certified
by a CPA and include these verification reports in their October 31
annual report to BPA for the year in which they make the claim.

***[New small wind project]{.underline}***

During the FY 07-09 rate period PUD #1 signs an agreement to purchase a
wind project within their service area. The Project is contracted to be
energized by December 31, 2009. Project consists of two 1.5‑MW turbines.
This is a New Wind project with a capacity factor less than or equal to
10 MW but greater than 25 kW.

Credit = (Capacity) x (Capacity Factor) x (\$/MWh Credit) x (hours/year)

Credit = (3 MW) x (0.30) x (\$27/MWh) x (8,760) = \$212,868. (\$27/MWh =
Cap)

PUD #1 can submit a claim for this project anytime during the rate
period, but must include in their October 31 annual report verification
that they have executed a power purchase agreement during the rate
period and that contractual incentives are in-place to ensure the
project is energized by December 31, 2009. By no later than January 15,
2010 PUD #1 must also demonstrate that the project was energized by
December 31, 2009. If the project fails to come on-line by December 31,
2009, the PUD must repay BPA for the credit claimed for this project
plus interest.

If PUD #1's request is reduced due to a pro rata reduction in 2007 or
2008, the PUD can roll the portion of their project credit forward into
the next FY. There will be no ability to roll forward in 2009.

Although the PUD can claim the renewable project during any year, they
must substantiate the claim in the next October 31 annual report. PUD #1
must retire the RECs generated by this project during the 2007-2009 rate
period within their service area. PUD #1 cannot simultaneously claim
energy generated by their wind project under the rate credit program and
sell the attributes or Renewable Energy Certificates (RECs) separately.

See table 1, section 4.16.

***[New utility-scale wind project with self-supplied integration
services:]{.underline}***

East Side Electric signs a contract to purchase 60 percent of the output
of the 50 MW White Eagle wind project. The busbar cost of the energy is
\$48/MWh and integration costs are \$20/MWh.

The project is scheduled to be energized in Sept. 2007. The White Eagle
project would be classified as a New utility scale wind project.

Credit = ((Project Costs) -- (Proxy for Avoided Cost)) x (Capacity) x
(Capacity Factor) x (hours/year)

Credit = \[(\$48/MWh + \$20/MWh) - (\$42.17)\] x (50 MW x 0.60) x (0.30)
x (8760) = \$2,036,437.

Credit = \$25.83/MWh

East Side can submit a request for a claim for this project anytime
during the rate period, but the amount claimed in any one year cannot be
greater than the customers total CRC for that year. If East Side's total
eligibility is only \$1,000,000/year, then this utility must submit
their request for a claim for this project over several years rather
than in a single year.

East Side must verify, via a third party audit, generation amounts,
purchase price, and justification for their near-term opportunity costs
associated with self-supplied integration. The audit report and the
justification for integration costs should be supplied to BPA in their
October 31 annual report for the year in which they made the claim
(e.g., report due by October 31, 2007, for FY 2007). This utility may
want to keep the busbar energy and integration costs confidential, in
such case they should arrange for a confidentiality agreement with BPA.

Generation exceeding the requested claim can be rolled forward and
claimed in the following year. (2009 generation cannot be rolled forward
to FY 2010.)

East Side must retire the RECs generated by their portion of the White
Eagle wind project during the FY 2007 - 2009 rate period within their
service area. East Side

cannot simultaneously claim energy under the rate credit program and
resell the associated RECs to another utility or marketer.

See section 4.16(a).

***[RECs]{.underline}***

Jones County PUD purchases 50,000 MWh of Calendar Year 2009 RECs from
PUD #1\'s portion of the wind Project. Jones paid PUD #1 \$5/MWh for the
RECs and submits a claim to BPA for \$250,000. The calculations are
correct but BPA denies Jones\' claim because:

a\) BPA determined that East Side also submitted a claim on the same
project.

b\) Some of the RECs will be generated after the end of the rate period.
Only RECs generated during the rate period are eligible. Jones will have
to use the amount of rate credit they claimed for these RECs on anther
eligible Renewable activity before the end of the rate period. The other
utility making a claim on this project may be required to repay BPA for
their claims made on this project.

See section 4.9.

![](media/image2.png){width="9.961805555555555in"
height="6.147916666666666in"}

# 5.0: Attachments

> **Attachment A: Reimbursement Strategies and Levels (4/1/07)**
>
> **Attachment B: Low-Income Measure Lists**
>
> **Attachment C: Fundamental Requirements Related to Federal Due
> Diligence**
>
> **Attachment D: Final Post-2006 Conservation Structure (6/28/05)**

## Attachment A: Reimbursement Strategies and Levels

**Post-2006 Conservation Program**

**Reimbursement Strategies and Levels**

**Energy Efficiency**

**Bonneville Power Administration**

![](media/image3.png){width="0.8569444444444444in"
height="0.6875in"}**April 2007**

**Executive Summary**

This document represents BPA's manual for Post-2006 initiatives based on
the 2005 -- 2006 Utility Sounding Board process regarding reimbursement
strategies and levels for BPA's Post-2006 conservation programs, and the
year of experience of the early starters in the 2007 programs. This
document is the core element of the Implementation Manual for the new
programs and detailed bilateral contract terms and conditions.

[The Guiding Principles:]{.underline}

1.  BPA's agreements (CRC and CAA) are between the utility and BPA, not
    between the consumer and BPA. The utilities will design and run
    programs, and BPA will design reimbursement rules and levels for the
    utilities. For that reason, BPA refers to its payments to utilities
    as credits or reimbursements, not "incentives" or "rebates;"

2.  BPA's decision to pay for achieved and measured conservation at set
    levels of reimbursement (deemed reimbursement, or cents per kWh up
    to a cap) allows utilities to determine how to design and operate
    their own programs to deliver the savings. This reflects two of
    BPA's principles of local control and accounting simplicity;

3.  Almost all options available under the CAA will be part of the CRC
    and *vice versa* as BPA lines up the offering to be consistent;

4.  Administrative allowances of up to 15 percent are allowed (or 30
    percent under the CRC for utilities with loads of 7.5 aMW or less)
    on qualifying measures;

5.  Calculated credits or reimbursements will be offered by BPA based on
    the busbar savings; thus, BPA is providing credit/reimbursement for
    reduced line losses;

6.  Savings from both the CRC and the CAA must be reported in the
    Regional Technical Forum (RTF) Planning, Tracking, and Reporting
    (PTR) System;

7.  Where appropriate, BPA will group similar measures and provide an
    average reimbursement level to replace long lists of similar
    measures in the PTR System. For example, the C&IL list of measures
    and reimbursements for lighting replaces 6,200 separate lighting
    measures in the RTF database;

8.  If there is a deemed reimbursement level for a particular measure,
    only that deemed reimbursement level will be provided by BPA. There
    will not be an option to substitute calculated savings or another
    deemed savings from the RTF list;

9.  For industrial projects, customers may choose at the time they sign
    their first agreement (either the CRC or CAA) to either accept 15
    cents/kWh up to 70 percent of project costs (including technical
    services) and handle or pay for all technical services/audits on
    their own, or to accept 12 cents/kWh up to 70 percent of project
    costs and have BPA arrange for technical services/audits;

10. Cross Cutting Features: The following features will be consistent
    across all sectors (residential, commercial, industrial,
    agricultural and other sectors):

-   Custom projects can be proposed in any sector: residential,
    commercial, industrial, agricultural or other. All custom projects
    (projects for which reimbursement is based on verified savings)
    require BPA approval of a measurement and verification (M&V) plan.
    Standardized M&V protocols will be provided for some common
    measures. Custom projects of less than 75,000 kWh/per year are
    eligible for "M&V Lite," an approach by which BPA engineers can
    approve less costly M&V approaches;

-   M&V plans must be approved by BPA prior to any project
    implementation activity such as equipment purchase;

-   Projects with a BPA credit/reimbursement level of \$30,000 or higher
    must be submitted to BPA, prior to any project implementation
    activity such as equipment purchase, for review and comment.
    However, the ultimate decision to proceed with the project will be
    up to the utility and its consumers;

-   All new commercial, industrial, agricultural, construction/major
    renovation, conservation voltage regulation (CVR) and distribution
    system efficiency improvement (DSEI) projects must be submitted to
    BPA for approval prior to any project implementation activity such
    as equipment purchase;

-   BPA will establish a target standard of service of 10 working days
    for completing the review and comment, M&V approval and special
    project approvals. An incomplete request will obviously hold up the
    final decision. A need for external expert review may also extend
    the 10‑working day target.

11. There will be no new stranded investment clauses added to the CRC,
    but the ConAug stranded investment clauses will be carried over to
    the CAA; and

12. Generally, residential measures will be reimbursed at between 20 and
    35 cents/first year kWh depending on the measure; industrial at
    either 12 or 15 cents; agricultural at 15 cents; and commercial at
    13 cents.

**Reimbursement Strategies and Levels Definitions**

+----------------+-----------------------------------------------------+
| **aMW:**       | Average megawatt of electricity. An average measure |
|                | of the total energy delivered in one year \--       |
|                | 8,760,000 kilowatt-hours per year.                  |
+----------------+-----------------------------------------------------+
| *              | At its most basic level, evaluation tests in the    |
| *Evaluation**: | field the assumptions made in planning when         |
|                | measures are installed by real people and used by   |
|                | real people. It is generally not part of oversight, |
|                | does not affect payments, and is used to refine or  |
|                | confirm the planning assumptions for future use.    |
|                |                                                     |
|                | BPA needs and will require cooperation with         |
|                | evaluations for both the CRC and the CAA to improve |
|                | programs, to assure all ratepayers that we are      |
|                | running the most efficient programs that we can,    |
|                | and to show that energy efficiency is a reliable    |
|                | resource.                                           |
+----------------+-----------------------------------------------------+
| **Fiscal Year  | BPA's fiscal year is from October 1 through         |
| (FY)**:        | September 30.                                       |
+----------------+-----------------------------------------------------+
| **HSPF**:      | Heating Season Performance Factor.                  |
+----------------+-----------------------------------------------------+
| **Incremental  | A term of art that is used consistently within the  |
| cost:**        | Regional Technical Forum (RTF) and in this          |
|                | document, as well as in all California utilities.   |
|                | It can be the full cost of some measures,           |
|                | especially in retrofit situations or when a measure |
|                | is completely incremental to standard practice. It  |
|                | is generally defined as the "energy efficiency      |
|                | improvement related costs above what would be       |
|                | required by standard practice or code." It is often |
|                | called "qualifying costs of the measures."          |
+----------------+-----------------------------------------------------+
| **             | This refers to measurements taken to establish      |
| Measurement**: | energy use or improvements in energy use. It can    |
|                | mean many things, such as testing duct leakage or   |
|                | measuring loading factors and run time in           |
|                | factories. It usually involves post and/or pre/post |
|                | measurement. Large consumers often do it to make    |
|                | sure that they are getting what they pay for, or to |
|                | better understand their system operations. The      |
|                | prevalence of required measurement for audits or    |
|                | for payment has varied in the field of energy       |
|                | efficiency, but the general rule is: the more       |
|                | uncertainty, the greater the risk of performance,   |
|                | the greater the need for actual measurement.        |
|                |                                                     |
|                | BPA contracts will require some level of            |
|                | measurement for projects for which the              |
|                | reimbursement is established by the savings         |
|                | achieved.                                           |
+----------------+-----------------------------------------------------+
| **Oversight**: | This is a contract management activity that is      |
|                | usually limited to assuring the government that it  |
|                | is getting what it pays for with some level of      |
|                | certainty, and is used mostly for BPA activity. It  |
|                | will be a required part of all post-2006            |
|                | conservation activities.                            |
|                |                                                     |
|                | Those who have recently participated in BPA         |
|                | programs requiring oversight have reported this to  |
|                | be a minimal inconvenience and sometimes a          |
|                | constructive process. Those who haven't had recent  |
|                | exposure to Con Aug oversight have expressed        |
|                | concerns about the burdens and risks involved. BPA  |
|                | will review the contract language to see if it can  |
|                | be simplified, but BPA cannot eliminate its right   |
|                | to conduct oversight visits.                        |
+----------------+-----------------------------------------------------+
| **PTCS™**:     | Performance Tested Comfort Systems                  |
+----------------+-----------------------------------------------------+
| **PTR:**       | Planning, Tracking, and Reporting System for        |
|                | utilities to report conservation activity.          |
+----------------+-----------------------------------------------------+
| **Regional     | The RTF is an advisory committee established in     |
| Technical      | 1999 to develop standards to verify and evaluate    |
| Forum (RTF):** | conservation savings. Members of the RTF are        |
|                | individuals experienced in conservation program     |
|                | planning, implementation and evaluation and are     |
|                | appointed by the Northwest Power and Conservation   |
|                | Council.                                            |
+----------------+-----------------------------------------------------+
| **RTF          | The software referred to is now known as the        |
| Reporting      | Planning, Tracking, and Reporting System, which is  |
| Soft           | hosted by the RTF.                                  |
| ware/System:** |                                                     |
+----------------+-----------------------------------------------------+
| **SEER**:      | Seasonal Energy Efficiency Ratio                    |
+----------------+-----------------------------------------------------+
| **VAR:**       | Volt-amperes-reactive (reactive power).             |
+----------------+-----------------------------------------------------+
| **V            | This is a responsibility to inspect actual presence |
| erification**: | and proper operation of an installed measure as     |
|                | intended. This is a level of quality control. It is |
|                | often a function performed by the utility before    |
|                | paying rebates. Some turn-key program operators do  |
|                | it to make sure that their employees are following  |
|                | the specs. BPA may, during an oversight visit,      |
|                | review measures which have been verified by the     |
|                | utility or a turn-key program operator.             |
+----------------+-----------------------------------------------------+
| **Willingness  | -   LO: Lost opportunities are more valuable        |
| to Pay         |     because they can't be captured later, or will   |
| Acronyms:**    |     cost much more to capture later.                |
|                |                                                     |
|                | -   LML: Long measure lives represent a larger      |
|                |     value to the region and the power system, even  |
|                |     if the ultimate value is less certain over a    |
|                |     longer measure life.                            |
|                |                                                     |
|                | -   CPN: Customer program needs: customers have a   |
|                |     set of traditional programs and offerings that  |
|                |     help define their relationship with their       |
|                |     consumers. In other cases, small utilities need |
|                |     a simple measure that they can offer without a  |
|                |     lot of technical resources. In all cases, the   |
|                |     measures are cost-effective from a total        |
|                |     resource cost (TRC) perspective.                |
|                |                                                     |
|                | -   MB: Market barriers represent an                |
|                |     acknowledgement that there are substantial      |
|                |     barriers to getting consumer attention or       |
|                |     co-funding. Market transformation has as one of |
|                |     its goals trying to overcome market barriers.   |
|                |                                                     |
|                | -   WTP: This refers to some control required to    |
|                |     keep the overall willingness to pay within the  |
|                |     range of the BPA target.                        |
+----------------+-----------------------------------------------------+

**Post-2006 Conservation Program:**

**Reimbursement Strategies and Levels**

**Introduction**

Throughout the Conservation Rate Credit (CRC) and Conservation
Acquisition Agreement (CAA) Implementation Manual, BPA intends to
provide an attractive and effective approach to help customers achieve
conservation targets at the lowest cost to BPA.

**Purposes of this Section of the Implementation Manual:**

This section describes BPA's Willingness to Pay (WTP) levels and
reimbursement strategies for conservation activities under both the CRC
and CAA (bilateral contracts).

1.  The numbers and values proposed in this document represent BPA's
    best projections and intent at this time.

2.  BPA's intent is to provide a standard CRC Implementation Manual and
    standard bilateral agreements based on the details in this document
    and to incorporate these details into the Planning, Tracking, and
    Reporting system (PTR). Except where noted, most decisions apply to
    both the CRC and CAA.

3.  Any utility may request to establish an individually negotiated
    custom agreement for the CRC or the CAA. It is assumed that any
    custom agreement will be based on the same principles as the
    standard offerings. BPA will enter into a custom agreement when it
    is mutually beneficial, usually meaning when the agreement will
    directly or indirectly lower costs for BPA.

**Conservation Program Principles**

The Utility Sounding Board process built on and elaborated on the
principles from the February 2005 Short-term Regional Dialogue Policy
and the June 28, 2005, Final Post-2006 BPA Conservation Program
Structure. The following key principles are quoted from the Conservation
Program Structure.

1.  **Conservation Achieved at the Local Level:** The bulk of the
    conservation to be achieved is best pursued and achieved at the
    local level. There are some initiatives that are best served by
    regional approaches (for example, market transformation through the
    Northwest Energy Efficiency Alliance). However, the knowledge local
    utilities have of their consumers and their needs reinforces many of
    the successful energy efficiency programs being delivered today.

-   Local Control: BPA will foster local utility initiative and control
    of conservation efforts to the maximum extent it can, consistent
    with meeting cost and verification goals.

-   Each utility may choose the incentive level to pay its end users but
    is credited only the amount BPA offers for each cost-effective
    measure.

-   BPA will design systems for payments or utility
    credit/reimbursement, not design individual utility programs. Using
    BPA's WTP and rate credit/contract specifications, each utility is
    free to design its own incentives, marketing, or delivery
    mechanisms. BPA will need to do site verifications as part the
    agreement with the utility, but this is not the same as dictating
    the relationship between the utility and its consumer; BPA's focus
    is on the interaction between BPA and its utility customers.

2.  **Achieve Conservation at Lowest Cost Possible to BPA:** BPA will
    seek to meet its conservation goals at the lowest possible cost to
    BPA. While the inclusion of only cost-effective measures and
    programs is a given, the region can benefit by working together to
    jointly drive down the cost of acquiring those resources.

-   BPA's first concern is achieving cost-effective savings on a total
    resource cost (TRC) basis; the secondary consideration is making
    efficient use of available ratepayer funding for conservation by
    minimizing free-ridership. Situations in which free-ridership might
    lead to inefficient use of BPA's conservation funding will be
    considered at the program design stage in most cases.

-   BPA's WTP may vary by sector and measure, and will reflect the
    actual cost to acquire resources in each sector. It may also reflect
    program implementation realities.

    a.  In setting WTP, BPA considers what it may take to move the
        market, which includes providing a sufficient signal to the
        market and the recognition of hard to reach (HTR) market
        segments, the likely measure life of the savings, the need to
        capture lost opportunities, as well as meeting the overall BPA
        cost target per aMW.

    b.  In establishing a WTP level, BPA does not intend to pay the
        entire cost of measures. Cost share is expected. Paying less
        than the full cost, or paying less than some utilities believe
        is sufficient, is not intended to cause a utility cost-share.
        Rather, a utility may require the end-use consumer to pay the
        cost share. BPA does, however, recognize that some utilities,
        within their own program designs, may contribute some additional
        funding.

3.  **Administrative Support:** BPA will continue to provide an
    appropriate level of funding for local administrative support to
    plan and implement conservation programs.

-   Reimbursement of administration costs at a rate up to 15 percent of
    the allowable costs may be included with the project budget and
    reimbursed by BPA under the CAA or claimed under the CRC;

-   BPA will allow small utilities (7.5 aMW or less) up to 30 percent of
    their rate credit for administrative costs:

    a.  BPA intends that the administrative cost allowed under CAA and
        CRC be an allowance, not a reimbursement of actual documented
        costs (other than state/CPA audit review for existence of
        sufficient administrative cost to justify the claim; see
        appendix A of this attachment);

-   BPA engineers will provide **assistance with** custom proposals to
    the extent that engineering resources are available; and

-   BPA will support local utility programs to the extent possible, by
    specifically providing "tools" such as sample program marketing and
    implementation materials that can reduce utility or consumer
    confusion and simplify local utility program administration. In
    general, these "tools" will reduce local utility administrative
    costs and will be formatted to allow for local utility
    customization.

4.  The list of qualified, cost-effective measures, deemed kWh savings,
    and payment rate per measure will generally be consistent across
    programs. However, BPA retains the flexibility to negotiate custom
    agreements, when there is a benefit to BPA.

-   BPA will strive to make rules consistent across both the rate credit
    and the bilateral contract areas such as:

    a.  BPA's WTP for a specific application of a measure;

    b.  The level of oversight, tracking, reporting, utility
        verification, and measurement of savings; and

    c.  BPA's openness to negotiating custom contracts using the same
        criteria.

-   In general, if there is a deemed credit or reimbursement level for a
    particular measure, only that deemed credit or reimbursement level
    will be provided by BPA. There will not be an option to substitute
    calculated savings or another deemed savings number from the PTR
    System.

5.  BPA will strive to provide simplified contracts.

-   Before imposing a contractual requirement, BPA will ask itself why
    it is important or necessary. BPA is committed to clear, concise,
    and streamlined approaches, and

-   In most cases, where there are simplified credit/reimbursement
    schemes, the reporting of actual savings and/or measures installed
    in the PTR System will still be required.

6.  BPA will strive to provide a streamlined approval process

**Basic Building Blocks**

The fundamental way BPA will provide for local control and innovation is
to structure its relationship to the utilities by crediting/reimbursing
them for the verified energy savings they capture at either the cents
per kWh up to the cost share amount (whichever is less), or by
crediting/reimbursing them for the measures installed as provided in
BPA's WTP. How the utilities spend the reimbursements or the
expenditures they make in their effort to capture the savings is between
the utilities and their consumers. This allows maximum freedom for the
utility to innovate, negotiate, and leverage the credit/reimbursement
amount. BPA is getting what it pays for at a price that BPA believes is
fair, effective, and that meets BPA's least cost criterion[^4].

BPA will meet its objective to achieve all cost-effective savings at the
lowest possible cost to BPA by establishing reasonable levels of WTP,
and by requiring a cost share to cap BPA's investment in custom
projects.

BPA will offer a simplified payment and review structure, which will
reduce the burden of accounting and oversight. In addition, the planned
levels of "Review and Comment" on proposals will provide the utility
both more freedom and flexibility to seek assistance. The treatment of
accounting for the administrative cost allowance will be consistent with
the previous Conservation and Renewables Discount (C&RD). BPA will place
the responsibility for verifying that there is a reasonable basis for
the allowance in the hands of the state/CPA auditors for each utility.

In each sector, there will be a custom proposal pathway, unless there is
a deemed approach available. The exception is that industrial lighting
may be submitted as a custom proposal if the estimated savings are more
than 100,000 kWh/year. Effective February 1, 2007, the cap on BPA's WTP
was raised to 70 percent in all sectors for custom projects for which
the proposal was approved by the COTR after that date. (This change
affects the industrial, non-commercial lighting, and other categories
that had not previously been at that level.)

**Administrative Costs**

(See appendix A of this attachment)

**Influences on BPA's Willingness to Pay (WTP)**

Each time WTP is described in this document, the measure is followed by
an acronym(s), in parentheses, that reflects BPA's main reasoning behind
the reimbursement level. A key to the WTP acronyms and other definitions
is provided at the beginning of this Reimbursement Strategies and Levels
document.

To avoid confusion, BPA's credit/reimbursement to the utility for
savings achieved is based on busbar savings, which is generally 7.625
percent above the site savings[^5]. This is consistent with the way
BPA's aMW targets and its WTP are set.

#### RESIDENTIAL SECTOR

The main cost-effective applications in the residential sector are:
lighting, HVAC, weatherization, new construction, and appliances. BPA
customers want to stay active in this sector. BPA's WTP and requirements
for specific residential measures or projects are described below.

**Residential ENERGY STAR^®^ CFL Lighting** (MB; WTP)

BPA will reimburse the utility \$2.50 per socket (screw-in or other) as
the standard WTP. Each installed CFL must be ENERGY STAR-rated and
wattage must be more than 5 Watts.

There are special situations for which BPA may be willing to pay more.
BPA will reimburse \$4 per socket for customer proposals to get CFLs
into hard to reach (HTR) or special opportunity segments. Such customer
proposals must be pre-approved by BPA and must include a justification
for why the segment is HTR or is a special opportunity. BPA is open to
most ways to deliver products to such segments. These proposals may
include lighting with additional measures such as showerheads in
multifamily rental units or combined with duct sealing in manufactured
homes to avoid missing savings opportunities and to make efficient use
of site visits. Other examples include communities with language
barriers, porch lighting initiatives, audit/install efforts, direct
install efforts in small assisted living facilities, etc.

*(Again, whether the utility chooses to pay more or less for a specific
bulb, or to substitute fixtures, the BPA WTP to the utility remains the
same.)*

**Air Source Heat Pumps** (CPN; LO)

-   BPA set credits/reimbursements based on the incremental savings from
    a standard efficiency air-source heat pump (heat pump efficiency
    upgrade), regardless of the consumer's reasons for the installation
    of a heat pump and regardless of the pre-existing heating system
    type, if any;

-   Either electric or non-electric auxiliary heat systems may be
    installed with the heat pump. However, BPA expects the electric heat
    pump will be the primary system used to meet the heating needs of
    the house;

-   For site-built single-family homes, most heat pump measures were
    initially determined to be cost effective. The credit/reimbursement
    level varies depending on whether the ducts are outside of the
    conditioned space or whether there is no substantial ducting outside
    the conditioned space. For heating zone 1, Heat Pumps with "Ducts
    Inside" is generally not a cost effective measure, so no
    credit/reimbursement will be provided for systems installed after
    October 1, 2007. See table R-1 for the credit/reimbursement
    schedule;

-   Manufactured Homes: BPA will not provide credits/reimbursements for
    heat pumps installed in manufactured homes in heating zone 1/cooling
    zone 1 or heating zone 1/cooling zone 2, because the measure is not
    cost-effective. Heat pumps are cost effective in heating zones 2 and
    3 and, on average, in heating zone 1/cooling zone 3.

> BPA will provide credits/reimbursements for heat pumps installed in
> manufactured homes as shown in table R-1. Manufactured homes are
> almost always built on vented crawlspaces, rather than sealed
> basements, which means the Ducts Outside measure applies;

-   The minimum required prescriptive performance standard is SEER 14
    and HSPF 8.5. BPA will offer a higher credit/reimbursement for units
    with HSPF 9.5 or higher. Unless 9.5 HSPF heat pumps are determined
    cost-effective, BPA will eliminate credits/reimbursements for this
    measure effective October 1, 2007;

-   Heat pumps must be installed to the latest version of the "PTCS Air
    Source Heat Pump Installation Standards," which is available on the
    PTR. [Reminder]{.underline}: As a part of the PTCS installation
    standards, PTCS Commissioned Heat Pump certification is required on
    all heat pumps and PTCS Duct System certification may be required
    depending on the location of the ductwork;

-   Where a house has a substantial[^6] amount of ductwork in
    unconditioned space, the Heat Pump with Ducts Outside[^7] measure
    must be claimed. Where a house does not have a substantial amount of
    ductwork in unconditioned space, the Heat Pump with Ducts Inside
    measure must be claimed (not applicable to heating zone 1). PTCS
    Duct System Certification is required when the Heat Pump with Ducts
    Outside measure is claimed;

-   Homes with heated floor area greater than 4,500 square feet, which
    is twice the size of the prototypes used by the RTF to estimate
    savings, are allowed to claim two heat pump measures. BPA requires
    the newly installed heat pump(s) to be the primary heating source
    for the entire house.

BPA will credit/reimburse based on the heat pumps installed and claimed.

[]{#__RefHeading___Toc166635723 .anchor}Table R-1:
Credits/Reimbursements for Heat Pumps

+------------------+------------+-----------+-----------+------------+
|                  | **Ducts    | **Ducts   | **Ducts   | **Ducts    |
|                  | Outside**  | Outside** | Inside**  | Inside**   |
+------------------+------------+-----------+-----------+------------+
| **Zon            | 8.5 HSPF   | 9.5       | 8.5 HSPF  | 9.5        |
| es\\Efficiency** |            | H         |           | HSPF\*\*\* |
|                  |            | SPF\*\*\* |           |            |
+------------------+------------+-----------+-----------+------------+
| > h1 c1          | \$615      | \$740     | \$270\*\* | \$380\*\*  |
| > \*(except MH)  |            |           |           |            |
+------------------+------------+-----------+-----------+------------+
| > h1 c2          | \$635      | \$760     | \$280\*\* | \$390\*\*  |
| > \*(except MH)  |            |           |           |            |
+------------------+------------+-----------+-----------+------------+
| > h1 c3          | \$675      | \$810     | \$300\*\* | \$420\*\*  |
+------------------+------------+-----------+-----------+------------+
|                  |            |           |           |            |
+------------------+------------+-----------+-----------+------------+
| > h2 c1          | \$1,080    | \$1,295   | \$450     | \$630      |
+------------------+------------+-----------+-----------+------------+
| > h2 c2          | \$1,090    | \$1,310   | \$465     | \$650      |
+------------------+------------+-----------+-----------+------------+
| > h2 c3          | \$1,125    | \$1,350   | \$485     | \$680      |
+------------------+------------+-----------+-----------+------------+
|                  |            |           |           |            |
+------------------+------------+-----------+-----------+------------+
| > h3 c1          | \$1,430    | \$1,715   | \$580     | \$810      |
+------------------+------------+-----------+-----------+------------+
| > h3 c2          | \$1,450    | \$1,740   | \$590     | \$825      |
+------------------+------------+-----------+-----------+------------+
| > h3 c3          | \$1,490    | \$1,790   | \$615     | \$860      |
+------------------+------------+-----------+-----------+------------+

> **\*** BPA will [not]{.underline} provide credit/reimbursement for
> heat pumps installed in manufactured homes in heating zone 1/cooling
> zone 1 or heating zone 1/cooling zone 2.
>
> **\*\***Effective October 1, 2007, there will be no credit for heat
> pumps with ducts inside in HZ 1, because they are generally not
> cost-effective.
>
> **\*\*\***Unless 9.5 HSPF heat pumps are determined cost-effective,
> BPA will eliminate credits/reimbursements for this measure effective
> October 1, 2007.

**Weatherization Measures** (CPN; LML)

BPA will offer \$0.30 per kWh savings for the cost-effective retrofit
measures in the RTF list.

To the extent there are cost-effective retrofit weatherization measures
in the RTF list for multifamily and manufactured homes, the
reimbursement will be the same \$0.30 per kWh. Credits/reimbursements
and busbar savings for specific measures can be found in the PTR.

Insulation measures must follow the latest version of the
"Weatherization Specifications" found in the PTR. Air-sealing measures
must follow the latest version of the "Air Sealing" specifications found
in the PTR.

**Low-Income Weatherization**

Low-income measures are generally the same as the weatherization
measures found in all similar homes with the exception of Prime Window
Replacements. Because utilities that provide funding for low-income
programs to Low-Income Weatherization Service Providers (LIWSP) must
ensure that the measures are cost-effective and qualifying, BPA has
attached a simple list of the measures that are qualifying, including
the prime window replacements.

*(Note: The Low-Income Weatherization Measure List is provided in
attachment B, table B-1 of this manual.)*

**Low-Income Window Replacement**

BPA will credit 30 cents/kWh based on the REPLACEMENT of existing prime
windows. Replacement windows must have a weighted average value of
U=0.30. Table R-2 lists the allowed existing window condition by house
type and heating zone. Existing single pane windows with storm windows
may be considered single pane windows for the purpose of determining
eligibility. Deemed savings and credits can be found in the PTR.

[]{#__RefHeading___Toc166635724 .anchor}Table R-2: Low-Income Window
Replacement Measure Eligibility

  ----------- ------------------ --------------------------------------------
  **Heating   **House Type**     **Existing Window Condition**
  Zone**                         

  1           Single-Family      Single pane with any frame type or double
                                 pane with metal frame

  1           Manufactured Home  Single pane with any frame type

  1           Multifamily        Single-pane with any frame type

  2           Single-Family      Single pane with any frame type or double
                                 pane with metal frame

  2           Manufactured Home  Single pane with any frame type or double
                                 pane with metal frame

  2           Multifamily        Single pane with any frame type or double
                                 pane with metal frame

  3           Single-Family      Single pane with any frame type or double
                                 pane with metal frame

  3           Manufactured Home  Single pane with any frame type or double
                                 pane with metal frame

  3           Multifamily        Single pane with any frame type or double
                                 pane with metal frame
  ----------- ------------------ --------------------------------------------

*(Note: The Low-Income Prime Window Replacement List is provided in
attachment B, table B-2 of this Implementation Manual.)*

**Water Heaters** (CPN; LO)

BPA will provide credits/reimbursements of \$0.25 per kWh for
cost-effective energy-efficient electric water heater measures. BPA will
pay \$0.35/kWh for cost-effective water heater measures where the tank
has a 20-year or longer warranty. Credits/reimbursements and busbar
savings can be found in the PTR.

**Gravity Film Heat Exchangers** (LO)

Cost-effective installations of gravity film heat exchangers in electric
water heater applications are eligible measures, which may receive
credits/reimbursement of \$0.35 per kWh (according to the busbar savings
in the PTR). Credits/ Reimbursements and busbar savings can be found in
the PTR.

**New Home Construction** (LO; LML; MB)

Credit/reimbursement for new home construction is described below for
different types of new homes.

**New ENERGY STAR Site-Built Homes**

New electrically heated ENERGY STAR Site-Built Homes are cost-effective
in all climate zones with zonal electric heating or electric heat pumps.
BPA will provide credits/reimbursement as shown in table R-3.

[]{#__RefHeading___Toc166635725 .anchor}Table R-3: Zonal/Heat Pump
Reimbursements for ENERGY STAR Site-Built Homes

  ----------------------- ----------------------- -----------------------
                          **Ducts Outside**[^8]   **Ducts Inside**

  Heating 1, Cooling 1 hp \$1,140                 \$ 600

  h1 c2 heat pumps        \$1,180                 \$ 600

  h1 c3 heat pumps        \$1,250                 \$ 600

  **All zonal \$1,170**                           

                                                  

  h2 c1 heat pumps        \$1,800                 \$ 850

  h2 c2 heat pumps        \$2,000                 \$ 850

  h2 c3 heat pumps        \$2,100                 \$ 850

  **All zonal \$1,400**                           

                                                  

  h3 c1 Hp                \$2,600                 \$1,020

  h3 c2 Hp                \$2,700                 \$1,020

  h3 c3 Hp                \$2,800                 \$1,020

  **All zonal \$1,600**                           
  ----------------------- ----------------------- -----------------------

Gas-heated ENERGY STAR homes are not TRC cost-effective, but electric
appliance and lighting rebates can be provided to customers in
gas-heated homes.

Deemed measures eligible for adding to an ENERGY STAR site-built home
include: fluorescent lighting measures above what the ENERGY STAR homes
measure requires, ENERGY STAR Clothes Washers, ENERGY STAR
Refrigerators, ENERGY STAR Freezers, and cost-effective Gravity Film
Heat Exchangers.

ENERGY STAR site-built homes must be certified as ENERGY STAR by the
appropriate State Certification Organization. (For more information on
the Northwest ENERGY STAR New Homes program, visit
[http://www.northwestenergystar.com](http://www.northwestenergystar.com/).)

**New ENERGY STAR Manufactured Homes** (LML; LO; CPN)

Given the big increment in savings above HUD standards,
electrically-heated ENERGY STAR manufactured homes (MH) are very
cost-effective. BPA will provide a credit/reimbursement as shown in
table R-4.

[]{#__RefHeading___Toc166635726 .anchor}Table R-4:
Credits/Reimbursements for ENERGY STAR Manufactured Homes

  ------------------------------------------ ----------------------------
  Heating Zone 1                             \$ 850

  Heating Zone 2                             \$1,150

  Heating Zone 3                             \$1,450
  ------------------------------------------ ----------------------------

Deemed measures eligible for adding to ENERGY STAR Manufactured Homes
include: Air-Source Heat Pumps in heating zones 2 and 3 (but not in
heating zone 1), fluorescent Lighting measures, ENERGY STAR Clothes
Washers, ENERGY STAR Freezers, and ENERGY STAR Refrigerators.

ENERGY STAR Manufactured Homes must be certified by the Northwest Energy
Efficient Manufactured (NEEM) Homes program as ENERGY STAR.

**Multifamily New Construction** (LO; LML; MB)

Multifamily (MF) new construction of five or more units and three
stories or less can be made more efficient than code or standard
practice. Projects meeting the latest version of the RTF's "Multifamily
New Construction Low Rise Technical Specifications" (available in the
PTR System) will be reimbursed on a per unit basis as outlined in table
R-4A.

[]{#__RefHeading___Toc166635727 .anchor}Table R-4A:
Credits/Reimbursements for MF New Construction

  ------------------------------------------ ----------------------------
  Heating Zone 1                             \$80 per unit

  Heating Zone 2                             \$115 per unit

  Heating Zone 3                             \$140 per unit
  ------------------------------------------ ----------------------------

Table R-4B summarizes the required prescriptive path for compliance with
the MF New Construction Low Rise Specifications.

[]{#__RefHeading___Toc166635728 .anchor}Table R-4B: MF New Construction
Specifications -- Summary ^1^

+-------------+--------------------+-----------+----------+-----------+
| **          |                    | **Zone    | **Zone 2 | **Zone 3  |
| Component** |                    | 1**       | (6,0     | (\>7,500  |
|             |                    |           | 00-7,500 | HDD)**    |
|             |                    | *         | HDD)**   |           |
|             |                    | *(\<6,000 |          |           |
|             |                    | HDD)**    |          |           |
+-------------+--------------------+-----------+----------+-----------+
| Ceilings    | Attic              | R-38 Std. | R-38     | R-38 Std. |
| ^2^         |                    |           | Std.     |           |
+-------------+--------------------+-----------+----------+-----------+
|             | Vaults             | R-30      | R-30     | R-30      |
+-------------+--------------------+-----------+----------+-----------+
| Walls ^2^   | Above Grade        | R-21,     | R-21,    | R-21,     |
|             |                    | Inter.    | Inter.   | Inter.    |
+-------------+--------------------+-----------+----------+-----------+
|             | Below Grade Inter. | R-21      | R-21     | R-21      |
|             | w/R-5 thermal      |           |          |           |
|             | break ^4^          |           |          |           |
+-------------+--------------------+-----------+----------+-----------+
| Floors      | Over Crawlspaces   | R-30      | R-30     | R-30      |
|             | and Unheated       |           |          |           |
|             | Basements          |           |          |           |
+-------------+--------------------+-----------+----------+-----------+
|             | Slab-on-Grade      | R-15      | R-15     | R-15      |
|             | Perimeter          |           |          |           |
+-------------+--------------------+-----------+----------+-----------+
| Glazing ^3^ | Maximum NFRC rated | U-0.30    | U-0.30   | U-0.30    |
|             | U-value            |           |          |           |
+-------------+--------------------+-----------+----------+-----------+
| Exterior    |                    | U-0.19    | U-0.19   | U-0.19    |
| Doors       |                    |           |          |           |
+-------------+--------------------+-----------+----------+-----------+
| Duct        | Rigid              | R-11      | R-11     | R-11      |
| Insulation  |                    |           |          |           |
+-------------+--------------------+-----------+----------+-----------+
|             | Flexible           | R-8       | R-8      | R-8       |
+-------------+--------------------+-----------+----------+-----------+
| Water       |                    | ***See    |          |           |
| Heaters     |                    | Specifi   |          |           |
|             |                    | cation*** |          |           |
+-------------+--------------------+-----------+----------+-----------+
| Mechanical  |                    |           |          |           |
| ventilation |                    |           |          |           |
| and         |                    |           |          |           |
| pollutant   |                    |           |          |           |
| source      |                    |           |          |           |
| control in  |                    |           |          |           |
| all climate |                    |           |          |           |
| zones.      |                    |           |          |           |
+-------------+--------------------+-----------+----------+-----------+

> ^1^ This table presents a summary of the requirements - the RTF\'s
> Multifamily New Construction Specifications shall be followed.
>
> ^2^ Inter. indicates intermediate framing techniques
>
> ^3^ An area weighted U-factor for windows which meets the component
> requirement of this table is acceptable.
>
> ^4^ A thermal break having a minimum value of R-5 is required between
> slab floors and all walls and footings.

Deemed measures eligible for adding to MF homes include: fluorescent
lighting measures, ENERGY STAR Clothes Washers, ENERGY STAR
Refrigerators, ENERGY STAR Freezers, ENERGY STAR Dishwashers, and
cost-effective Gravity Film Heat Exchangers.

Projects not meeting the prescriptive specifications that qualify as
being above code or standard practice efficiency must be reviewed and
approved by BPA as *custom projects*. Consistent with MH and
single-family (SF) homes, \$0.30 per kWh will be the applicable
reimbursement level (with a cap of 70 percent of the incremental energy
related measure costs). The amount and type of measurement and
verification (M&V) required will be determined by the BPA reviewer, but
is not expected to be complex.

MF housing above three stories will be considered as commercial
construction and submitted for new construction incentives and BPA
pre-approval under the commercial sector WTP.

**New Geothermal Heat Pump Systems** (LML; CPN; LO)

BPA set credits/reimbursements based on the incremental savings from a
standard air-source heat pump (upgrade to a geothermal system),
regardless of the consumer's reasons for the installation of the
geothermal heat pump system and regardless of the fuel used in the
pre-existing heating system, if any. However, replacement of an existing
geothermal heat pump unit does not qualify for BPA credit/reimbursement;
all geothermal heat pump system components must be newly installed.
Geothermal Heat Pump installations must adhere to the latest version of
the "PTCS Ground Source Heat Pump Specifications," which are available
in the PTR.

*SF installations in HZ 1*: BPA will provide a melded
credit/reimbursement of \$2,400 for cost-effective geothermal heat pump
installations that are identified in the PTR as cost-effective.

*SF installations in HZ 2 and 3*: Most installations are cost-effective.
Because of these commonalities, BPA will offer a simplified
reimbursement of \$3,000 per unit.

*Manufactured Homes*: There are no deemed cost-effective geothermal heat
pump measures in manufactured homes. BPA will provide no deemed
credit/reimbursement.

*Multifamily and Commercial New Construction:* Cost-effective geothermal
heat pumps for **[all]{.underline}** MF and commercial new construction
applications (including MF greater than three stories) will be
reimbursed according to the commercial sector reimbursement schedule as
a custom project.

**Miscellaneous**

**Line Voltage Electronic Thermostats**

Replacement of bi-metal line voltage thermostats in existing
single-family homes with line voltage electronic thermostats will be
credited/reimbursed **per home** as listed in table R-5. The
credits/reimbursements in heating zones 2 and 3 are capped based on the
incremental cost of the measure. All existing thermostats, except those
in bathrooms, must be replaced with thermostats in accordance with the
most recent version of the "Electronic Thermostat Specifications," which
are available in the PTR.

[]{#__RefHeading___Toc166635729 .anchor}Table R-5:
Credits/Reimbursements for Line Voltage Electronic Thermostats per Home

  -------------------------------- --------------------------------------
  HZ 1                             \$115

  HZ 2                             \$160

  HZ 3                             \$160
  -------------------------------- --------------------------------------

**PTCS Duct Sealing in Existing Manufactured Homes** (MB; WTP)

BPA will provide credit/reimbursement for retrofit PTCS duct sealing in
existing electrically heated manufactured homes\*. The duct system must
be certified as a PTCS Duct System. The BPA credit/reimbursement will be
according to table R‑6.

[]{#__RefHeading___Toc166635730 .anchor}Table R-6:
Credits/Reimbursements for PTCS Duct Sealing in Manufactured Homes (All
climate zones)

  -------------------------- --------------------------------------------
  HZ 1\*                     \$280

  HZ 2                       \$400

  HZ 3                       \$400
  -------------------------- --------------------------------------------

As noted earlier under HTR lighting, combining this measure with direct
install lighting may increase the value of the visit to the home and
allow a combined higher credit/reimbursement.

This measure may [not]{.underline} be claimed separately in conjunction
with a heat pump upgrade.

*\* Retrofit PTCS Duct Sealing in SGC Manufactured Homes is not a
cost-effective measure in HZ 1, and, therefore, it is not eligible for
credit/reimbursement in HZ 1.*

**PTCS Duct Sealing in Existing Single-Family Homes** (WTP)

Retrofit PTCS duct sealing as a stand-alone measure in existing
electrically heated SF site-built homes will be credited/reimbursed at
\$400 for all climate zones. In order to be eligible for the
credit/reimbursement, the pre-existing duct leakage to the outside must
be greater than 250 CFM~50~ or 15 percent of the floor area, whichever
is less. The duct system must be certified as a PTCS Duct System.

This measure, as specified in the preceding paragraph, may be claimed in
conjunction with a "Ducts Inside" heat pump upgrade; however, the
measure may [not]{.underline} be claimed in conjunction with a "Ducts
Outside" heat pump upgrade or in new construction.

**ENERGY STAR Clothes Washers** (LO; CPN; MB)

(Modified energy factor (MEF) 1.72 is the 2007 ENERGY STAR level.)

BPA will credit/reimburse two amounts for any ENERGY STAR‑rated
residential clothes washer depending on the fuel used to heat water. For
installations in homes verified to use electricity to heat water, the
reimbursement level will be \$70; for installations in homes with gas or
unverified water heater fuel type, the credit/reimbursement will be
\$25.

**ENERGY STAR Dishwashers** (LO; CPN)

BPA will credit/reimburse \$25 per ENERGY STAR-rated dishwasher.

**ENERGY STAR Refrigerators** (CPN; LO)

BPA will credit/reimburse \$25 per ENERGY STAR-rated full size (7.75 cu.
ft. or greater) refrigerator.

**ENERGY STAR Freezers** (CPN; LO; WTP)

BPA will credit/reimburse \$12 per ENERGY STAR-rated full size (7.75 cu.
ft. or greater) freezer.

**Residential Refrigerator Decommissioning** (MB; WTP)

BPA will credit/reimburse \$85 per decommissioned residential
refrigerator unit. Decommissioning has a short measure life. Its
expected high free-ridership is accounted for in the savings numbers.

The existing refrigerator must be verified as functional, serving a home
within the participating utility's service territory, and must have at
least 14 cu. ft. capacity. Unit must be decommissioned and its
components recycled.

The ENERGY STAR Refrigerators measure may be added to the Refrigerator
Decommissioning measure.

**Multifamily Showerheads and Aerators** (WTP)

BPA will credit/reimburse the utility [\$12 per MF living
unit]{.underline} with electrically heated water if all showerheads and
at least the kitchen faucet have low-flow showerheads and aerators
installed. The pre-existing showerhead(s) must have a tested flow rate
of at least 3.0 gallons per minute (gpm). The replacement showerhead(s)
must have a tested flow rate of 2.5 gpm or less. Showerheads must be
installed by utility staff or a utility contractor.

#### COMMERCIAL SECTOR

Lighting, HVAC, and commercial refrigeration dominate the savings
opportunities in commercial buildings. Efficient power supplies for
computers and power controls for networked computers also represent
other savings opportunities.

The overall structure for the commercial sector credit/reimbursement is
shown below:

-   BPA will pay specified reimbursements for selected measures (deemed
    measures) (e.g., Commercial & Industrial Lighting for stand-alone
    lighting, computer controls, etc.) and

-   BPA will pay a credit/reimbursement of 13 cents/kWh up to 70 percent
    of the project incremental cost for HVAC, commercial refrigeration,
    and interacting lighting.

**Deemed Measures**

**Deemed Commercial Food Service Reach-in Refrigeration Measures (solid
and glass door)**

Deemed Credits/Reimbursements based on CEE Tier 2 Commercial Food
Service Refrigerators and Freezers

(Link to CEE list:
[[http://www.cee1.org/com/com-kit/com-kit-main.php3#qp]{.underline}](http://www.cee1.org/com/com-kit/com-kit-main.php3#qp))

[]{#__RefHeading___Toc166635731 .anchor}Table R-7A: Refrigerator
Credit/Reimbursement

  -------------------------- -------------------- ------------------------
  **Size (cu. ft.)**         **\# of Qualifying   **Credit/
                             CEE Tier 2 Units**   Reimbursement**

  0-30                       36                   \$100

  30-60                      8                    \$150

  60-90                      10                   \$200
  -------------------------- -------------------- ------------------------

**Table R-7B: Freezer Credit/Reimbursement**

  -------------------------- ---------------------- ------------------------
  **[Size (cu.               **[\# of Qualifying    **Credit/
  ft.)]{.underline}**        CEE Tier 2             Reimbursement**
                             units]{.underline}**   

  0-30                       12                     \$200

  30-60                      19                     \$400

  60-90                      16                     \$700
  -------------------------- ---------------------- ------------------------

> Notes: Size is interior volume of the new equipment as listed by CEE.
>
> No credit/reimbursement for Tier 1, which is baseline practice.

**Grocery Stores**

**Grocery Program (Third Party)**

BPA will credit/reimburse on a dollar-for-dollar basis measures
implemented and documented under a pre-approved third party contract.
The dollar-for-dollar credit/reimbursement will be documented based on
the rebate form provided by the approved third party contractor. The
approved third party contractor will input the details of the
accomplished measures into the PTR System for the utility or BPA if
utilities' have a signed letter of agreement to participate in the
Grocery Program. (Measures installed for credit under the Grocery
Program are qualifying measures and expenditures for purposes of
administrative allowance, because the utility is still responsible for
verification of the installation of the measures as they are for other
credited/reimbursed measures. These measures are subject to the utility
oversight and records requirements under section 1.7 of the
Implementation Manual.)

**Network Computer Power Management** (MB; WTP)

BPA will credit/reimburse \$17 per workstation.

**Pre-rinse Spray Wash valves** (WTP)

BPA will credit/reimburse \$150 per qualified installation. Qualified
installations require that the water for dishwashing be heated with
electricity and that the facility serves 10 or more meal shifts per week
(for example, a facility that serves lunches and dinners, five days a
week), or that the utility document the reason for exceptions to the
10-meal rule. The exceptions should indicate that there is an equivalent
amount of usage of the rinse system as with 10 meals (e.g., commercial
bakeries, central school district cafeterias that prepare thousands of
hot meals, or catering facilities that may only be used for three
parties a week, but provide meals for hundreds of people at a time,
etc.).

**Existing Small Office or Retail (\<5,000 sq. ft.) Insulation
Measures**

Deemed energy savings for attic, wall, and floor insulation measures are
available for existing small buildings (\<5,000 sq. ft.) used for office
or retail activities. BPA will credit/reimburse on a per square foot
basis at \$0.13/deemed kWh energy savings.

**ENERGY STAR Commercial Clothes Washers**

BPA offers two tiers of credit/reimbursement.

(Note: If the clothes washer is on the ENERGY STAR commercial list, it
can be claimed as a commercial measure; if the clothes washer is on the
ENERGY STAR residential list, it can be claimed as a residential
measure.)

[]{#__RefHeading___Toc166635732 .anchor}Table R-8: Credit/Reimbursement
for ENERGY STAR Commercial Clothes Washers

+----------------+------------------------------------+----------------+
| **PRIOR to     |                                    |                |
| 2/1/07**       |                                    |                |
+----------------+------------------------------------+----------------+
| MEF 1.42-1.79  | -   Electric Domestic Hot Water    | -   \$ 90      |
|                |     and Dryers                     |                |
|                |                                    | -              |
|                | -   All other combinations         |                |
|                |                                    | -   \$ 45      |
+----------------+------------------------------------+----------------+
| MEF 1.80 and   | -   All electric                   | -   \$180      |
| higher         |                                    |                |
|                | -   All other combinations         | -   \$ 75      |
+----------------+------------------------------------+----------------+
| **Starting     |                                    |                |
| 2/1/07**       |                                    |                |
+----------------+------------------------------------+----------------+
| ENERGY STAR    | -   All electric                   | -   \$180      |
|                |                                    |                |
|                | -   All other combinations         | -   \$ 75      |
+----------------+------------------------------------+----------------+

**80+ Efficient Power Supplies** (MB; WTP; LO)

This is currently handled through the Northwest Energy Efficiency
Alliance (NEEA) to get computer hardware manufacturers on board. It may
be necessary for local utilities to support the manufacturers' buy down
once the initial NEEA funds are expended, probably through contributions
to NEEA at around \$5 per computer. This measure lends itself more to
the CRC than to CAA, but it is one way to acquire cost-effective
resources with little administrative burden.

**Commercial and Industrial Lighting Credit/Reimbursement Schedule**
(CP; WTP)

-   The Commercial and Industrial Lighting measure list
    credit/reimbursement schedule and requirements must be used for
    lighting-only projects in any size commercial, industrial,
    agricultural, or institutional facility. The list is available on
    the PTR System under Downloads - "Commercial & Industrial Lighting."

-   If there is a measure not found on the list of C&IL measures for
    which the customer would like to have a deemed credit/reimbursement,
    the customer may request a one-time approval from BPA to use a
    deemed measure and credit.

-   If the measure does not qualify for a deemed credit/reimbursement
    after a review, then the customer can submit a custom proposal, or
    seek to have a deemed value established through the RTF.

Credits for some measures in the C&IL list will change over time to
reflect market conditions. Table R-9 shows how the T-8 measure credits
will change.

[]{#__RefHeading___Toc166635733 .anchor}Table R-9:
Credits/Reimbursements for Standard and High Performance T8 Lamps and
Ballasts

+---------------------------------------------------------+------------+
| **Fiscal Year 2007**                                    |            |
+---------------------------------------------------------+------------+
| HP T8 lamps and ballast (2-4 lamps)                     | -   \$30   |
|                                                         |            |
| HP T8 lamps and ballast (1 lamp)                        | -   \$15   |
|                                                         |            |
| Std T8 lamps and ballast (2-4 lamps)                    | -   \$15   |
|                                                         |            |
| Std T8 lamps and ballast (1 lamp)                       | -   \$ 8   |
+---------------------------------------------------------+------------+
| **Fiscal Year 2008**                                    |            |
+---------------------------------------------------------+------------+
| HP T8 lamps and ballast (2-4 lamps)                     | -   \$30   |
|                                                         |            |
| HP T8 lamps and ballast (1 lamp)                        | -   \$15   |
|                                                         |            |
| Std T8 lamps and ballast (2-4 lamps)                    | -   \$10   |
|                                                         |            |
| Std T8 lamps and ballast (1 lamp)                       | -   \$ 5   |
+---------------------------------------------------------+------------+
| **Fiscal Year 2009**                                    |            |
+---------------------------------------------------------+------------+
| HP T8 lamps and ballast (2-4 lamps)                     | -   \$30   |
|                                                         |            |
| HP T8 lamps and ballast (1 lamp)                        | -   \$15   |
+---------------------------------------------------------+------------+

**Combined and Interactive Commercial Projects** (MB; WTP)

Combined and/or interactive commercial projects that include lighting,
commercial scale refrigeration, and HVAC measures, among other
cost-effective measures that are calculated, will be credited/reimbursed
at \$0.13/kWh, not to exceed 70 percent of the incremental installed
measure cost. The incremental cost for retrofit of existing equipment is
the full installed measure cost. For replacement of burned
out/failing/failed equipment, the incremental cost (and savings) is the
cost above code or its equivalent. For example, for HVAC replacement,
the incremental cost is the cost of equipment above the federal or state
applicable standard for new or replacement equipment.

As described earlier in this document, for custom projects, utilities
must submit an M&V plan for BPA approval prior to any project
implementation activity such as equipment purchase. See ENDNOTE for
further discussion. Also, projects with credit/reimbursement levels
\$30,000 and above will require "Review and Comment" by BPA prior to any
project implementation activity.

**New Commercial/Industrial/Agricultural Construction Lighting** (LO,
LML, WTP)

BPA will reimburse a fraction of the cost of new high-efficiency
lighting measures in new commercial/industrial construction. Table R-10
indicates the inaugural list of measures and the credits/reimbursements
available from BPA. The list may be supplemented with qualifying new
measures; all readers should check the PTR for the latest measures. As
with other measures, BPA may change or remove some of these
measures/credits on October 1, 2007, if the market and/or other analyses
indicate that it would be appropriate.

[]{#__RefHeading___Toc166635734 .anchor}Table R-10: Credit/Reimbursement
Commercial & Industrial New Construction Lighting Program\*

**NW Public Power Utility**

**Program Offer of Incentive Levels**

  ---------- -------------------------------------------------- --------------------
  **Code**   **New Fixture/Sensor Description**                 **Incentive Per
                                                                Unit\*\***

  **A.**     **High Performance T8 Fluorescent Lamps and        
             Electronic Ballast in a New Fixture**              

             The fixture shall include a high performance 48\"  
             T8 lamp and ballast system listed on the CEE       
             qualifying products list. Refer to this link:      
             <http://www.cee1.org/com/com-lt/com-lt-prod.pdf>   

  1          Upgrade any fluorescent fixture to high            \$10
             performance                                        

  **B.**     **High Bay T8 or T5 Fluorescent Fixture**          

             T5 fixture must have 3 or more lamps, T8 fixture   
             must have 4 or more lamps. Fixture must be         
             installed in a high bay area with a minimum        
             ceiling height of 15\'.                            

  1          T8 or T5 New \"High Bay\" Fixture                  \$50

  **C.**     **Sensor or Timer Control of Fluorescent**         

             Sensors required by code are not eligible.         

  1          Controls a minimum of 120 Watt connected load.     \$30

  **D.**     **Stairwell Fluorescent Fixture**                  

             Fixture must be specifically designed for          
             stairwell lighting.                                

  1          Bi-level fixture with occupancy sensor control     \$50

  **E.**     **Ceramic Metal Halide (hard-wired)**              

             Hard-wired new recessed can or track heads (cans). 
             Incentive is per lamp, i.e., per track head.       

  1          20 to 100 Watts (Nominal Lamp Watts)               \$40

  2          101 to 400 Watts (Nominal Lamp Watts)              \$50
  ---------- -------------------------------------------------- --------------------

\* Applies to lighting systems in commercial, industrial, and
agricultural new construction facilities. For instance, all commercial
and industrial facilities, plus wineries, potato storage sheds, pump
houses, office space, and other on-farm facilities.

\*\* More than one measure can be claimed per fixture. For example: a
high-bay T8 fixture could receive a high-performance, high-bay and
sensor incentive for each fixture.

**New Commercial Construction and Major Renovation and Residential
Multifamily Higher than Three Stories** (LO; MB)

New construction and major renovations (multiple end-uses changed, with
a construction or building permit required) will be reimbursed on a
performance-based approach that credits/reimburses the lesser of
\$0.20/kWh or 70 percent of incremental cost (which includes payments
for design assistance/technical assistance) for improved efficiency
above code. The key to project eligibility for the higher "new
construction" reimbursement is the existence of an implementation design
plan that usually involves modeling and a building construction permit.
These projects are partly self-defining because the projects must be
submitted to BPA for pre-approval. The higher reimbursement values are
provided to allow the utility to bring the extra modeling and design
resources to bear.

*As described earlier in this document, all new construction/major
renovation projects will require BPA approval of the project modeling
and M&V plan.*

#### AGRICULTURAL SECTOR

(MB; CPN; WTP)

[On-farm]{.underline} measures should be considered agricultural, and
any storage, processing (transportation) or other activities involving
farm products [off]{.underline} the farm should be considered industrial
food processing. The property line is a good surrogate for demarcation.

Utilities that have a CAA contract with a Commercial & Industrial
Lighting Standard Offer budget may use that budget to claim
reimbursements for lighting in agricultural facilities. These claims
must be entered in the PTR System.

Agriculture is a cash-constrained sector that requires significant
motivation to make investments. Credits/reimbursements will be roughly
based on \$0.15/kWh not to exceed 70 percent of the incremental
installed measure cost. The measures listed in table R-11 will be paid
as shown below in table R-11.

[]{#__RefHeading___Toc166635735 .anchor}Table R-11:
Credits/Reimbursements for Agricultural Measures

+---------------------------------------------+--------------+---------+
| **Sprinkler Equipment**                     | **Rebate**   | **Est.  |
|                                             |              | Sa      |
|                                             |              | vings** |
+=============================================+==============+=========+
| 1.  New flow controlling type nozzle for    | \$3.0        | 20      |
|     impact sprinklers.                      | 0/nozzle[^9] | kWh/yr  |
+---------------------------------------------+--------------+---------+
| 2.  \(a\) Rebuilt or new impact sprinklers. | \$3.         | 25      |
|                                             | 75/sprinkler | kWh/yr  |
| > \(b\) New nozzle for impact sprinkler     | ^1^          |         |
| > replacing existing worn nozzle of same    |              | 15      |
| > flow rate or less.                        | \            | kWh/yr  |
|                                             | $0.25/nozzle |         |
|                                             | ^1^          |         |
+---------------------------------------------+--------------+---------+
| 3.  New rotating type sprinklers that       | \$3.         | 40      |
|     replace impact sprinklers. (Entire      | 00/sprinkler | kWh/yr  |
|     pivot[^10] must be upgraded. Flow may   | ^1^          |         |
|     not be increased.)                      |              |         |
+---------------------------------------------+--------------+---------+
| 4.  New gasket for wheel lines, hand lines, | \            | 30      |
|     or portable main line.                  | $1.00/gasket | kWh/yr  |
+---------------------------------------------+--------------+---------+
| 5.  \(a\) New low-pressure regulators.      | \$3.         | 20      |
|     (Entire pivot ^2^ must be upgraded.)    | 00/regulator | kWh/yr  |
|                                             | ^1^          |         |
| > \(b\) New rotating type sprinklers that   |              | 20      |
| > replace low-pressure sprinklers. (Entire  | \$3.         | kWh/yr  |
| > pivot ^2^ must be upgraded. Flow may not  | 00/sprinkler |         |
| > be increased.)                            | ^1^          |         |
+---------------------------------------------+--------------+---------+
| 6.  New multiple configuration nozzles for  | \$2.         | 20      |
|     low-pressure pivot ^2^ sprinklers.      | 00/sprinkler | kWh/yr  |
|                                             | ^1^          |         |
+---------------------------------------------+--------------+---------+
| 7.  New multi-trajectory sprays that        | \$2.         | 25      |
|     replace impact sprinklers. (Entire      | 00/sprinkler | kWh/yr  |
|     pivot ^2^ must be upgraded. Flow may    | ^1^          |         |
|     not be increased.)                      |              |         |
+---------------------------------------------+--------------+---------+
|                                             |              |         |
+---------------------------------------------+--------------+---------+
| 8.  New sprays that replace low pressure    | \$1.         | 10      |
|     sprinklers. (Entire pivot ^2^ must be   | 00/sprinkler | kWh/yr  |
|     upgraded. Flow may not be increased.)   | ^1^          |         |
+---------------------------------------------+--------------+---------+
| 9.  New drains for wheel lines, hand lines, | \$1.00/drain | 30      |
|     or pivots ^2^. (Entire line must be     |              | kWh/yr  |
|     upgraded.)                              |              |         |
+---------------------------------------------+--------------+---------+
| 10. New hubs for wheel-lines. (Entire wheel | \$6.00/hub   | 40      |
|     line must be upgraded.)                 |              | kWh/yr  |
+---------------------------------------------+--------------+---------+
| 11. New \"goose neck\" elbow for new drop   | \$1.00/goose | 20      |
|     tubes.                                  | neck         | kWh/yr  |
+---------------------------------------------+--------------+---------+
| 12. New drop tube for low-pressure pivot    | \$3.00/drop  | 20      |
|     ^2^ sprinklers (min. 3 feet length).    | tube         | kWh/yr  |
+---------------------------------------------+--------------+---------+
| 13. New center pivot base boot gasket.      | \$           | 850     |
|                                             | 125.00/pivot | kWh/yr  |
+---------------------------------------------+--------------+---------+
| 14. Cut and pipe press repair of leaking    | \$8.00/pipe  | 60      |
|     hand lines, wheel lines, and portable   | section      | kWh/yr  |
|     mainline.                               |              |         |
+---------------------------------------------+--------------+---------+
| 15. Rebuilt or new wheel-line leveler.      | \$           | 20      |
|                                             | 0.75/leveler | kWh/yr  |
+---------------------------------------------+--------------+---------+

***[Note]{.underline}:** Number 2: has been broken into two parts, the
sprinkler and the nozzle. This allows for the nozzle to be replaced
separately from the sprinkler. The current offer assumed the nozzle
would be replaced at the same time as the sprinkler. The change allows
for either/or. Number 5: has been broken into two parts, 5(a) and 5(b).
This allows for the upgrade of the regulators if new rotating sprinklers
are already in place or for the installation of new rotating sprinklers
if low-flow regulators are already in place.*

Motor replacements are assumed to be in lieu of re-winds or at time of
failure, and the incremental cost (and savings) is calculated off a
National Electrical Manufacturers Association (NEMA) standard efficiency
motor for the same size and application. They are TRC cost-effective
because of the summer peaking load shapes in irrigated agriculture. The
credits/reimbursements are found in table R‑12.

Irrigation motor rebates require that the motor is open drip proof
**(ODP) or totally enclosed fan cooled (TEFC)**, operates at 1,800 rpm,
and is replacing older or rewound motors. Other types of motors will
need to be submitted as custom proposals.

[Eligibility]{.underline}:

-   Motors that qualify for a BPA credit/reimbursement may be purchased
    anywhere, but must be installed in an irrigated agriculture
    application.

-   Motors must be:

    1.  New, three-phase AC induction;

    2.  5 to 500 horsepower; and

    3.  NEMA design A, B, or C

Motors must meet or exceed the NEMA Premium^®^ efficiency standard shown
in table R-12 or table R-13.

[]{#__RefHeading___Toc166635736 .anchor}Table R-12:
Credits/Reimbursements for Irrigation System Motors

+------------------+---------+------------+--------+------------------+
| **Measure        | **Motor | **NEMA     | **     | **Estimated      |
| Description**    | Effic   | Premium    | Rebate | Savings Per Unit |
|                  | iency** | Ef         | Per    | (kWh/yr.)**      |
| **HP**           |         | ficiency** | Unit** |                  |
+------------------+---------+------------+--------+------------------+
| 5 horsepower     | 83.0%   | 89.5%      | \$55   | 352              |
+------------------+---------+------------+--------+------------------+
| 7.5 horsepower   | 84.0%   | 91.0%      | \$85   | 569              |
+------------------+---------+------------+--------+------------------+
| 10 horsepower    | 85.0%   | 91.7%      | \$110  | 726              |
+------------------+---------+------------+--------+------------------+
| 15 horsepower    | 87.3%   | 92.4%      | \$125  | 829              |
+------------------+---------+------------+--------+------------------+
| 20 horsepower    | 88.0%   | 93.0%      | \$165  | 1,084            |
+------------------+---------+------------+--------+------------------+
| 25 horsepower    | 88.0%   | 93.6%      | \$300  | 1,518            |
+------------------+---------+------------+--------+------------------+
| 30 horsepower    | 88.8%   | 94.1%      | \$340  | 2,290            |
+------------------+---------+------------+--------+------------------+
| 40 horsepower    | 89.3%   | 94.1%      | \$450  | 3,053            |
+------------------+---------+------------+--------+------------------+
| 50 horsepower    | 89.3%   | 95.0%      | \$595  | 4,134            |
+------------------+---------+------------+--------+------------------+
| 60 horsepower    | 89.5%   | 95.0%      | \$700  | 5,247            |
+------------------+---------+------------+--------+------------------+
| 75 horsepower    | 89.5%   | 95.0%      | \$985  | 6,559            |
+------------------+---------+------------+--------+------------------+
| 100 horsepower   | 90.0%   | 95.4%      | \      | 8,586            |
|                  |         |            | $1,290 |                  |
+------------------+---------+------------+--------+------------------+
| 125 horsepower   | 90.3%   | 95.4%      | \      | 10,137           |
|                  |         |            | $1,520 |                  |
+------------------+---------+------------+--------+------------------+
| 150 horsepower   | 90.8%   | 95.8%      | \      | 11,926           |
|                  |         |            | $1,790 |                  |
+------------------+---------+------------+--------+------------------+
| 200 horsepower   | 91.0%   | 95.8%      | \      | 15,265           |
|                  |         |            | $2.290 |                  |
+------------------+---------+------------+--------+------------------+
| 250 horsepower   | 91.0%   | 95.8%      | \      | 19,081           |
|                  |         |            | $2,860 |                  |
+------------------+---------+------------+--------+------------------+
| 300 horsepower   | 91.0%   | 95.8%      | \      | 22,897           |
|                  |         |            | $3,440 |                  |
+------------------+---------+------------+--------+------------------+
| 350 horsepower   | 91.0%   | 95.8%      | \      | 26,713           |
|                  |         |            | $4,010 |                  |
+------------------+---------+------------+--------+------------------+
| 400 horsepower   | 91.0%   | 96.2%      | \      | 27,349           |
|                  |         |            | $4,100 |                  |
+------------------+---------+------------+--------+------------------+
| 450 horsepower   | 91.0%   | 96.2%      | \      | 33,630           |
|                  |         |            | $5,050 |                  |
+------------------+---------+------------+--------+------------------+
| 500 horsepower   | 91.0%   | 96.2%      | \      | 37,367           |
|                  |         |            | $5,600 |                  |
+------------------+---------+------------+--------+------------------+

[]{#__RefHeading___Toc166635737 .anchor}Table R-13:
Credits/Reimbursements for Medium Voltage Irrigation System Motors (600v
to 5,000v)

+--------------------+-----------+------------+------------------------+
| **Measure          | **NEMA    | **Rebate** | **Estimated Savings**  |
| Description**      | Premium   |            |                        |
|                    | Eff       | **Per      | **Per Unit (kWh/yr.)** |
| **HP**             | iciency** | Unit**     |                        |
+--------------------+-----------+------------+------------------------+
| 250 horsepower     | 95.0%     | \$2,385    | 15,901                 |
+--------------------+-----------+------------+------------------------+
| 300 horsepower     | 95.0%     | \$2,862    | 19,081                 |
+--------------------+-----------+------------+------------------------+
| 350 horsepower     | 95.0%     | \$3,339    | 22,261                 |
+--------------------+-----------+------------+------------------------+
| 400 horsepower     | 95.0%     | \$3,339    | 22,261                 |
+--------------------+-----------+------------+------------------------+
| 450 horsepower     | 95.0%     | \$3,757    | 25,044                 |
+--------------------+-----------+------------+------------------------+
| 500 horsepower     | 95.0%     | \$4,174    | 27,826                 |
+--------------------+-----------+------------+------------------------+

**Variable Frequency Drives on Small Milking Machines in Dairies** (CPN;
WTP)

BPA will credit/reimburse \$2,200 for verified installations of Variable
Frequency Drives (VFD) on milking machines of 10 hp or less. (For larger
sized machines, a custom proposal with M&V is required.)

**Freeze Resistant Stock Water Tanks/Fountains**

Installation of freeze resistant stock water tanks/fountains is a
cost-effective measure in heating zones 2 and 3. BPA will
credit/reimburse \$165 for installation of a freeze resistant stock
tank/fountain in heating zone 2 and \$225 for installation of a freeze
resistant stock tank/fountain in heating zone 3. It is not cost
effective in heating zone 1, so BPA will provide no
credit/reimbursement.

Electric resistance stock tank heater(s) must be removed or permanently
disabled. Tanks and installations must meet the RTF specifications for
Freeze Resistant Stock Tanks/Fountains, available in the PTR.

**Other Agricultural Measures**

For other agricultural measures, BPA will credit/reimburse 15 cents/kWh
or 70 percent, whichever is less, [including the following, but not
limited to]{.underline}:

-   Low pressure conversion with pump work

    -   Change to 40 foot spacing on hand lines and wheel lines to
        enable conversion

-   Low energy precision application (LEPA) conversion for pivots and
    lateral moves

-   Adjustable speed drives in certain applications (multiple-valved
    sprinkler systems and field elevation differences of 25 feet or
    greater)

The cost of the technical studies needed to accomplish the project is
assumed to be covered in the BPA credit/reimbursement amount to the
utility and in the total project cost for purposes of cost-capping. As
with industrial projects, custom irrigation projects need to be run
through the RTF calculator to determine TRC cost-effectiveness prior to
submitting the M&V plan for approval by BPA.

*Note: As described earlier in this document, for custom projects
utilities must submit an M&V plan for BPA approval prior to any project
implementation activity such as equipment purchase. See ENDNOTE for
further discussion. Also, projects with credit/reimbursement levels
\$30,000 and above will require "Review and Comment" by BPA prior to any
project implementation activity.*

**Scientific Irrigation Scheduling (CPN; WTP)**

BPA will provide credits or reimbursements to customers for Scientific
Irrigation Scheduling (SIS), which is defined in the RTF, but which
requires knowledge of the data on weekly hydro application data for all
water applied, evapotranspiration needs, and soil moisture tables. This
measure only applies to agricultural systems for which there is pumping
capacity above that needed to meet the normal needs of the crops.

The RTF determined that SIS is cost-effective with a TRC cost of
\$13.50/acre first-year cost (\$7.50/acre initial cost and \$6/acre
service) and \$6.00 an acre for each of the next two years, and expected
savings ranging from 80 - 125 kWh/acre depending on the crop type, soil,
climate, and pumping lift. BPA will reimburse the lesser of 15 cents/kWh
or 70 percent of the SIS TRC cost (\$25.50) for a three-year measure
life on a field by field basis.

The utility programs are unlikely to have the same crops, fields,
farmers, or weather in each year. Therefore the reimbursement is based
on a contractual three-year measure life, providing a minimum kWh result
over all three years, as opposed to a physical measure life.

SIS projects must be submitted as custom proposals. A standardized M&V
plan is available on the PTR Web site. Completion reports must be
completed each year based on a field by field analysis using the
standardized M&V algorithm.

Custom proposals can be credited/reimbursed over three years at
\$0.05/year/kWh or one-third of the 70 percent cost (\$5.95/acre/year)
on a field-by-field basis. Because the proper credit can only be claimed
for the lowest sustained level of savings over the three years, true ups
will be required at the end of the third year. True-up can take a few
forms: working some SIS savings in the fourth year if the customer is an
early starter, claiming equivalent credits from other qualifying
measures, or by returning the unearned rate credit to BPA.

BPA offered this measure under the CAA beginning January 1, 2007.

#### INDUSTRIAL SECTOR

> (Including water and wastewater treatment, Distribution System
> Efficiency Improvements and Conservation Voltage Regulation)

**Cost Based Measure Reimbursement**

The C&IL lighting spreadsheet is must be used for lighting measures in
industrial facilities.

*Exception: For industrial lighting-only projects where the estimated
savings are over 100,000 kWh, the utility has the [option]{.underline}
to submit the project as a custom proposal. Since this requires a
project proposal, M&V plan, and completion report, it involves
substantially more effort than using the C&IL approach.*

**Other Cost-Based Industrial Reimbursements**

There are no other pre-determined measures for the industrial sector.
There will be no "motor rebate" program based on deemed hours of
operation and assumed loading factors. Motors and drives will be
eligible for calculated savings based on site-specific custom project
analyses.

**Calculated Industrial Savings** (WTP)

Process-related projects include production systems within a particular
industry (e.g., pulping in wood products, food processing, plastic
extrusion, compressed air, computer chip fabrication, drive systems, or
drying systems in lumber products). Process and drive systems will
involve site-specific calculations - motors, variable speed drives,
pumps, ammonia-based refrigeration, etc. - and will be eligible for
credit/reimbursement as part of an integrated approach.

The utility is required to choose path (A) or (B) below when it first
signs up for either the CRC or CAA. This will establish the method to be
used over the life of the longest lasting agreement (CRC or CAA) and
will apply to all industrial projects, including Water and Wastewater
Treatment, Distribution System Efficiency Improvements (DSEI), and
Conservation Voltage Regulation (CVR). The same reimbursement scheme
will apply to all industrial in both CRC and CAA projects within the
utility. Industrial new construction reimbursements also are
credited/reimbursed as in A and B below, but require pre-approval just
as with new commercial customers.

BPA will **either**:

**(A)** Credit/reimburse the utility at 12 cents per kWh (up to 70
percent of the incremental energy project cost) with BPA arranging and
paying for the technical assistance studies/audits. This takes the risk
of "dry hole" audits away from the utility and shifts the expense from
the utility to BPA.

**OR**

**(B)** Credit/reimburse the utility \$0.15 per kWh (which includes the
cost of technical assistance/audits) up to 70 percent of the project's
incremental energy cost (which includes the cost of technical
assistance/audits).

The cost of the audit and technical assistance is included in either the
"project cost" or captured within the 15-cent reimbursement level.

The cost of "dry-hole" technical studies will be managed by the
utilities within the overall reimbursement by BPA.

Regardless of the choice of A or B:

-   The utility must pre-screen the projects for TRC cost-effectiveness
    by using the RTF protocol-based calculator, supplying the cost,
    savings, and industry sector (to get the appropriate load shape)
    prior to submitting the M&V plan to BPA for approval.

-   For all custom projects, utilities must submit an M&V plan for BPA
    approval prior to any project implementation activity such as
    equipment purchase. Project paperwork shall include the basis for
    the savings estimates, as was required in the Conservation
    Augmentation (ConAug) proposal worksheet.

-   In addition, projects with a BPA credit/reimbursement level of
    \$30,000 or higher must be submitted to BPA, prior to any project
    implementation activity such as equipment purchase, for review and
    comment. However, the ultimate decision to proceed with the project
    will be up to the utility and its consumers. *(See ENDNOTE for
    further discussion.)*

**Other Requirements**

-   No project with less than a one-year simple payback based on average
    utility billed energy costs will be credited/reimbursed by BPA.

-   Stranded cost repayment provisions are required for CAA, but not for
    CRC.

BPA encourages all utilities to use technical assistance from third
party service providers **and/or** from the Industrial Sector Initiative
of NEEA. Industrial savings can be hard to identify, and the industrial
partners tend to trust trade allies with whom they traditionally work.

**Distribution System Efficiency and Conservation Voltage Regulation**

DSEI may include, among others, the following measures when
cost-effective and otherwise qualifying:

-   Power transformer replacement;

-   Service conductor replacement;

-   Insulator additions and replacement;

-   Higher distribution primary voltage;

-   Transformer load management (replacement of improperly sized
    transformers for loss improvements);

-   Balancing loads and phases;

-   Adding parallel feeders;

-   Operation improvement (recognition and phase balancing);

-   De-energizing seasonally unloaded transformers;

-   Service distribution transformer

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-   Replacing an existing or proposed transformer with a higher
    efficiency transformer

-   Multiple transformers vs. single transformer based on system
    analysis; and

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-   Power factor improvement (measure to improve power factor and reduce
    line losses)

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-   VAR management;

-   Voltage management; and

-   Fixed and switched capacitors.

[Conservation Voltage Regulation (CVR)]{.underline}

CVR includes distribution level and customer level (e.g., house,
business) voltage regulation.

DSEI and CVR projects must be submitted as custom project proposals. All
custom projects, for which reimbursement is based on verified savings,
require BPA approval of a M&V plan. Standardized M&V protocols will be
provided for some measures prior to any project implementation. DSEI
projects must be submitted to BPA for approval prior to any project
implementation activity such as equipment purchases.

Because DSEI and CVR are industrial projects, the credit/reimbursement
amounts are determined by the industrial program options path chosen by
the utility at the time it signs up for the CAA or CAA.

[]{#__RefHeading___Toc166635738 .anchor}Table R-14:
Credits/Reimbursements for DSEI and CVR

  ----------------------------- -------------------- --------------------
  **Utility Distribution        **Credit/kWh**       **Project Cost Cap**
  System**                                           

  Option A                      \$0.12               70%

  Option B                      \$0.15               70%
  ----------------------------- -------------------- --------------------

**New Industrial Construction** (LO; MB)

New industrial construction/major renovations will be
credited/reimbursed in accordance with the 12 cent or 15 cent option, up
to 70 percent of the incremental cost choice (above), with the technical
assistance provided by either the utility (15 cents) or with help from
BPA (12 cents). This does not include lighting measures available in the
deemed Commercial and Industrial New Construction Lighting list
available on the PTR System.

#### "OTHER" SECTOR

LED traffic signals and other non-building energy efficiency
improvements can be credited/reimbursed at the rate of \$0.13/kWh, up to
70 percent of the incremental project cost.

#### ENDNOTE

**BPA Review and Comment**

It is necessary for BPA to have some involvement in projects involving
large amounts of ratepayer dollars even when the servicing utility is
willing to take full risk of payment based only on the measured savings.
The reasons for this are:

-   Some large customers feel that they can afford to take risks with
    getting paid only for measured project savings, but many utilities
    want to minimize risk;

-   Regardless of utility size, BPA cannot set up situations that can
    result in massive problems with customer relations that will follow
    from projects that are not pre-screened and turn out to be
    ineligible, unworkable, and/or likely to produce disappointing
    savings, and for which BPA could not fully reimburse the utility
    after the fact; and

-   A BPA review (second set of eyes) may identify improvements to
    projects which otherwise would have been a lost opportunity.

Given that BPA credits/reimburses based on verified savings for custom
projects, [all M&V plans, except when standardized, need to be approved
by BPA]{.underline}. M&V approval may mean that some projects won't go
forward because the results cannot be reasonably and defensibly
measured. BPA approval of the M&V plan will be BPA's commitment to
credit/reimburse for verified savings at the credit/reimbursement amount
that is in effect at the time of the approval, regardless of what policy
changes may occur before the M&V is completed.

For projects with expected BPA credit/reimbursement \$30,000 and above,
BPA must review and provide comment. BPA distinguishes between "Review
and Comment" and "approval with a notice to proceed." BPA Review and
Comment will include BPA staff comments on any weaknesses and concerns
they see in a project. For example, there may be concern that savings
won't be achieved, or that the measures may not be reimbursed because
they are ineligible (e.g., fuel switching or non-TRC cost-effective).
BPA engineers may warn the utility about potential downsides and risks,
but the utility may choose to move ahead with the project. Utilities
will be reimbursed for qualifying measures based on the actual savings
up to the cost cap as documented by the pre-approved M&V only after the
M&V is completed. A completion report will be required.

BPA reviewers may suggest alternatives to consider, identify potential
lost opportunities, and make other suggestions for improvement, but they
will not require the utility or consumer to change the project to meet
the preferences of the reviewer.

As usual, any customer may request technical advice from BPA staff
regardless of the size of the project or the requirement for Review and
Comment. BPA may not be able to meet the 10 working-day standard on
non-required requests due to workload and the priority placed on
required reviews.

**Summary**

All projects for which payment is determined by the results of M&V
require BPA approval of the M&V plan (commercial, industrial,
agricultural, and other). Also, any M&V project with expected
credit/reimbursement of \$30,000 or greater requires BPA Review and
Comment.

In addition, regardless of the size of the project, BPA
[pre-approval]{.underline} is required prior to any project
implementation activity for:

-   DSEI

-   CVR; and

-   Commercial, industrial, or commercial-scale multifamily new
    construction.

**Appendix A -- Administrative Costs (Reimbursement Strategies and
Levels document)**

There are several issues surrounding administrative costs that need
clarification. This appendix defines BPA's intention, so that utilities
may use the flexibility that is intended without confusion about what is
meant. (See Implementation Manual section 1.2.)

-   The up to 15 percent (30 percent for small utilities (7.5 aMWs of
    load or less) under the Conservation Rate Credit (CRC) applies to
    the sum of qualifying conservation expenditures. It does not apply
    to purchases of green power or donations to the Northwest Energy
    Efficiency Alliance (see examples in tables R-A1 and R-A2).

-   It is above the BPA willingness to pay parameters, (i.e., BPA
    assumed that 15 percent would be spent on administrative costs when
    setting the levels of BPA willingness to pay.)

-   It is not, however, above the total CRC available for the utility
    and it is not above and beyond the total qualifying contract amount
    in the CAA (see examples in tables R-A1 and R-A2).

-   To clarify what should be included in the administrative allowance,
    the "up to 15 percent" administrative cost allowance (30 percent for
    utilities 7.5 aMW or less in the CRC) is intended to cover internal
    utility costs associated with the delivery of conservation,
    including general awareness building and general marketing (e.g.,
    Web site maintenance, efficiency messaging, generic newsletters),
    record keeping, reporting, help with evaluations, overhead,
    contributions to internal staffing, or passed through to a
    "implementation pool" or a third party operating the utility's
    conservation programs.

> It is an allowance that is assumed to be far below the actual costs to
> the utility involved (risk that the allowance will exceed the actual
> costs is minor). The required state audit or CPA audits of the utility
> must address whether the utility has documented administrative costs
> related to the pursuit of conservation, and BPA will not duplicate
> that external review.

-   All other funds reimbursed to the utility or allowed as credits
    against their CRC are expected to be spent on getting cost-effective
    measures installed.

[]{#__RefHeading___Toc166635739 .anchor}Table R-A-1: Examples of Claims
under CRC

+----------------------------------+-----------------------------------+
| **Budget:**                      | **Budget:**                       |
|                                  |                                   |
| \$300,000                        | \$300,000                         |
|                                  |                                   |
| \- \$100,000 spent for           | \- \$ 0 spent for renewables      |
| renewables                       |                                   |
|                                  | \- [\$ 0 spent on                 |
| \- [\$ 50,000 spent on           | donations]{.underline}            |
| donations]{.underline}           |                                   |
|                                  | [\$300,000 available              |
| \$150,000 available for measures | for]{.underline} measures and     |
| and                              |                                   |
|                                  | qualified for 15% admin           |
| qualified for 15% admin          |                                   |
|                                  | [\$ 45,000 allowed for            |
| [\$ 22,500 allowed for           | admin.]{.underline}               |
| admin]{.underline}               |                                   |
|                                  | \$255,000 additional is left to   |
| \$127,500 additional is left to  | use for                           |
| use for                          |                                   |
|                                  | measures and in support of        |
| measures and in support of       |                                   |
|                                  | getting measures into             |
| getting measures into            |                                   |
|                                  | place (WTP)                       |
| place (WTP)                      |                                   |
+----------------------------------+-----------------------------------+

[]{#__RefHeading___Toc166635740 .anchor}Table R-A-2: Example of Claims
on the Bilateral Side

+----------------------------------+-----------------------------------+
| **Budget (not WTP) for ESO+:**   | **Budget for Custom Program:**    |
|                                  |                                   |
| \$200,000                        | *(multifamily new construction,   |
|                                  | direct install, weatherization)*  |
| > \$100,000 spent on measures    |                                   |
| > over three years and in        | \$200,000                         |
| > support of getting measures    |                                   |
| > into place                     | > \$170,000 spent on measures     |
|                                  | > over three years and in support |
| [\$ 15,000 admin                 | > of getting measures into place  |
| allowance]{.underline}           |                                   |
|                                  | [\$ 30,000 admin                  |
| \$ 85,000 unspent that must be   | allowance]{.underline}            |
| de-obligated                     |                                   |
|                                  | \$ 0 unspent that must be         |
|                                  | de-obligated                      |
+----------------------------------+-----------------------------------+

## Attachment B: Low-Income Weatherization Measure and the Low-Income Prime Window Replacement Lists

[]{#__RefHeading___Toc166635741 .anchor}Table B-1: Low Income
Weatherization List

  -----------------------------------------------------------------------
  **BPA designates measures eligible under the Low Income Weatherization
  provisions of the Conservation Rate Credit \$ for \$ credit. Utilities
  are also directed to inform the state/CAP agencies/tribal organizations
  that receive CRC funds, that CRC funds can only be spent on measures
  that are listed as qualifying measures.**

  **Shaded Measures Do Not Qualify for Low Income Weatherization Measure
  credit.**
  -----------------------------------------------------------------------

  -----------------------------------------------------------------------------
  **Technology, Measure or Practice**                         **\"Qualifies\"
                                                              or \"Does Not
                                                              Qualify\"**
  ----------------------------------------------------------- -----------------
  **Single Family Wx (All Heating Zones)**                    

  Single Family Weatherization - Infiltration Control (Cost   Qualifies
  and Savings per sq.ft. of floor area for each 0.1 ach       
  reduction)                                                  

  Single Family Weatherization - R0 to R19 Attic Insulation   Qualifies
  (Cost and Savings are per sq.ft. of attic area insulated)   

  Single Family Weatherization - R19 to R38 Attic Insulation  Qualifies
  (Cost and Savings are per sq.ft. of attic area insulated)   

  Single Family Weatherization - R0 to R19 Floor Insulation   Qualifies
  (Cost and Savings are per sq.ft. of floor area insulated)   

  Single Family Weatherization - R19 to R30 Floor Insulation  Qualifies
  (Cost and Savings are per sq.ft. of floor area insulated)   

  Single Family Weatherization - R0 to R11 Wall Insulation    Qualifies
  (Cost and Savings are per sq.ft. of wall area insulated)    

  ** **                                                       

  **Multifamily Wx (All Heating Zones)**                      Qualifies

  Multifamily Weatherization - R0 - R19 Attic insulation      Qualifies
  (Cost & Savings are per square foot of attic area           
  insulated)                                                  

  Multifamily Weatherization - R19 - R38 Attic insulation     Qualifies
  (Cost & Savings are per square foot of attic area           
  insulated)                                                  

  Multifamily Weatherization - R0 - R19 Floor insulation      Qualifies
  (Cost & Savings are per square foot of floor area           
  insulated)                                                  

  Multifamily Weatherization - R19 - R30 Floor insulation     Qualifies
  (Cost & Savings are per square foot of floor area           
  insulated)                                                  

  Multifamily Weatherization - R0 - R11 Wall Insulation (Cost Qualifies
  & Savings are per square foot of area insulated)            

  Multifamily Weatherization - Infiltration Control           Does Not Qualify

                                                              

  **Manufactured Home Wx**                                    

  **HZ1**                                                     

  Manufactured Home Weatherization - Infiltration Control     Qualifies
  (Cost and savings are per square foot of floor area per 0.1 
  air change per hour infiltration rate reduction) - Heating  
  Zone 1                                                      

  Manufactured Home Weatherization - Attic Insulation R0 to   Qualifies
  R19 (Cost and savings are per square foot of attic          
  insulated) - Heating Zone 1                                 

  Manufactured Home Weatherization - Attic Insulation R19 to  Does Not Qualify
  R30 (Cost and savings are per square foot of attic          
  insulated) - Heating Zone 1                                 

  Manufactured Home Weatherization - Floor Insulation R0 to   Qualifies
  R11 (Cost and savings are per square foot of floor          
  insulated) - Heating Zone 1                                 

  Manufactured Home Weatherization - Floor Insulation R11 to  Does Not Qualify
  R22 (Cost and savings are per square foot of floor          
  insulated) - Heating Zone 1                                 

  **HZ2**                                                     

  Manufactured Home Weatherization - Infiltration Control     Qualifies
  (Cost and savings are per square foot of floor area per 0.1 
  air change per hour infiltration rate reduction) - Heating  
  Zone 2                                                      

  Manufactured Home Weatherization - Attic Insulation R0 to   Qualifies
  R19 (Cost and savings are per square foot of attic          
  insulated) - Heating Zone 2                                 

  Manufactured Home Weatherization - Attic Insulation R19 to  Does Not Qualify
  R30 (Cost and savings are per square foot of attic          
  insulated) - Heating Zone 2                                 

  Manufactured Home Weatherization - Floor Insulation R0 to   Qualifies
  R11 (Cost and savings are per square foot of floor          
  insulated) - Heating Zone 2                                 

  Manufactured Home Weatherization - Floor Insulation R11 to  Qualifies
  R22 (Cost and savings are per square foot of floor          
  insulated) - Heating Zone 2                                 

  **HZ3**                                                     

  Manufactured Home Weatherization - Infiltration Control     Qualifies
  (Cost and savings are per square foot of floor area per 0.1 
  air change per hour infiltration rate reduction) - Heating  
  Zone 3                                                      

  Manufactured Home Weatherization - Attic Insulation R0 to   Qualifies
  R19 (Cost and savings are per square foot of attic          
  insulated) - Heating Zone 3                                 

  Manufactured Home Weatherization - Attic Insulation R19 to  Does Not Qualify
  R30 (Cost and savings are per square foot of attic          
  insulated) - Heating Zone 3                                 

  Manufactured Home Weatherization - Floor Insulation R0 to   Qualifies
  R11 (Cost and savings are per square foot of floor          
  insulated) - Heating Zone 3                                 

  Manufactured Home Weatherization - Floor Insulation R11 to  Qualifies
  R22 (Cost and savings are per square foot of floor          
  insulated) - Heating Zone 3                                 

  **PTCS Duct Sealing**                                       

  **Gas Heated Homes - Cooling Only (All Cooling Zones)**     

  Manufactured Home w/o Electric Heat, w/CAC - PTCS Duct      Does Not Qualify
  Sealing                                                     

  Manufactured Home Natural Choice, w/CAC - PTCS Duct Sealing Does Not Qualify

  Single Family w/o Electric Heat w/CAC - PTCS Duct Sealing   Does Not Qualify

  **Electrically Heated Homes (Single Family and Manufactured 
  Homes)**                                                    

  **H1**                                                      

  Manufactured Home Non-SGC Forced Air Furnace w/o CAC - PTCS Qualifies
  Duct Sealing Heat Zone 1                                    

  Manufactured Home SGC Forced Air Furnace w/o CAC - PTCS     Does Not Qualify
  Duct Sealing Heat Zone 1                                    

  Single Family Forced Air Furnace w/o CAC - PTCS Duct        Qualifies
  Sealing Heat Zone 1                                         

  **H1C1**                                                    

  Manufactured Home Non-SGC Forced Air Furnace w/CAC - PTCS   Qualifies
  Duct Sealing Heat Zone 1 - Cool Zone 1                      

  Manufactured Home Non-SGC Heat Pump - PTCS Duct Sealing     Qualifies
  Heat Zone 1 - Cool Zone 1                                   

  Manufactured Home SGC Forced Air Furnace w/CAC - PTCS Duct  Qualifies
  Sealing Heat Zone 1 - Cool Zone 1                           

  Manufactured Home SGC Heat Pump - PTCS Duct Sealing Heat    Does Not Qualify
  Zone 1 - Cool Zone 1                                        

  Single Family Forced Air Furnace w/CAC - PTCS Duct Sealing  Qualifies
  Heat Zone 1 - Cool Zone 1                                   

  Single Family Heat Pump - PTCS Duct Sealing Heat Zone 1 -   Qualifies
  Cool Zone 1                                                 

  **H1C2**                                                    

  Manufactured Home Non-SGC Forced Air Furnace w/CAC - PTCS   Qualifies
  Duct Sealing Heat Zone 1 - Cool Zone 2                      

  Manufactured Home Non-SGC Heat Pump - PTCS Duct Sealing     Qualifies
  Heat Zone 1 - Cool Zone 2                                   

  Manufactured Home SGC Forced Air Furnace w/CAC - PTCS Duct  Qualifies
  Sealing Heat Zone 1 - Cool Zone 2                           

  Manufactured Home SGC Heat Pump - PTCS Duct Sealing Heat    Does Not Qualify
  Zone 1 - Cool Zone 2                                        

  Single Family Forced Air Furnace w/CAC - PTCS Duct Sealing  Qualifies
  Heat Zone 1 - Cool Zone 2                                   

  Single Family Heat Pump - PTCS Duct Sealing Heat Zone 1 -   Qualifies
  Cool Zone 2                                                 

  **H1C3**                                                    

  Manufactured Home Non-SGC Forced Air Furnace w/CAC - PTCS   Qualifies
  Duct Sealing Heat Zone 1 - Cool Zone 3                      

  Manufactured Home Non-SGC Heat Pump - PTCS Duct Sealing     Qualifies
  Heat Zone 1 - Cool Zone 3                                   

  Manufactured Home SGC Forced Air Furnace w/CAC - PTCS Duct  Qualifies
  Sealing Heat Zone 1 - Cool Zone 3                           

  Manufactured Home SGC Heat Pump - PTCS Duct Sealing Heat    Does Not Qualify
  Zone 1 - Cool Zone 3                                        

  Single Family Forced Air Furnace w/CAC - PTCS Duct Sealing  Qualifies
  Heat Zone 1 - Cool Zone 3                                   

  Single Family Heat Pump - PTCS Duct Sealing Heat Zone 1 -   Qualifies
  Cool Zone 3                                                 

  **H2**                                                      

  Manufactured Home Non-SGC Forced Air Furnace w/o CAC - PTCS Qualifies
  Duct Sealing Heat Zone 2                                    

  Manufactured Home SGC Forced Air Furnace w/o CAC - PTCS     Qualifies
  Duct Sealing Heat Zone 2                                    

  Single Family Forced Air Furnace w/o CAC - PTCS Duct        Qualifies
  Sealing Heat Zone 2                                         

  **H2C1**                                                    

  Manufactured Home Non-SGC Forced Air Furnace w/CAC - PTCS   Qualifies
  Duct Sealing Heat Zone 2 - Cool Zone 1                      

  Manufactured Home Non-SGC Heat Pump - PTCS Duct Sealing     Qualifies
  Heat Zone 2 - Cool Zone 1                                   

  Manufactured Home SGC Forced Air Furnace w/CAC - PTCS Duct  Qualifies
  Sealing Heat Zone 2 - Cool Zone 1                           

  Manufactured Home SGC Heat Pump - PTCS Duct Sealing Heat    Qualifies
  Zone 2 - Cool Zone 1                                        

  Single Family Forced Air Furnace w/CAC - PTCS Duct Sealing  Qualifies
  Heat Zone 2 - Cool Zone 1                                   

  Single Family Heat Pump - PTCS Duct Sealing Heat Zone 2 -   Qualifies
  Cool Zone 1                                                 

  **H2C2**                                                    

  Manufactured Home Non-SGC Forced Air Furnace w/CAC - PTCS   Qualifies
  Duct Sealing Heat Zone 2 - Cool Zone 2                      

  Manufactured Home Non-SGC Heat Pump - PTCS Duct Sealing     Qualifies
  Heat Zone 2 - Cool Zone 2                                   

  Manufactured Home SGC Forced Air Furnace w/CAC - PTCS Duct  Qualifies
  Sealing Heat Zone 2 - Cool Zone 2                           

  Manufactured Home SGC Heat Pump - PTCS Duct Sealing Heat    Qualifies
  Zone 2 - Cool Zone 2                                        

  Single Family Forced Air Furnace w/CAC - PTCS Duct Sealing  Qualifies
  Heat Zone 2 - Cool Zone 2                                   

  Single Family Heat Pump - PTCS Duct Sealing Heat Zone 2 -   Qualifies
  Cool Zone 2                                                 

  **H2C3**                                                    

  Manufactured Home Non-SGC Forced Air Furnace w/CAC - PTCS   Qualifies
  Duct Sealing Heat Zone 2 - Cool Zone 3                      

  Manufactured Home Non-SGC Heat Pump - PTCS Duct Sealing     Qualifies
  Heat Zone 2 - Cool Zone 3                                   

  Manufactured Home SGC Forced Air Furnace w/CAC - PTCS Duct  Qualifies
  Sealing Heat Zone 2 - Cool Zone 3                           

  Manufactured Home SGC Heat Pump - PTCS Duct Sealing Heat    Qualifies
  Zone 2 - Cool Zone 3                                        

  Single Family Forced Air Furnace w/CAC - PTCS Duct Sealing  Qualifies
  Heat Zone 2 - Cool Zone 3                                   

  Single Family Heat Pump - PTCS Duct Sealing Heat Zone 2 -   Qualifies
  Cool Zone 3                                                 

  **H3**                                                      

  Manufactured Home Non-SGC Forced Air Furnace w/o CAC - PTCS Qualifies
  Duct Sealing Heat Zone 3                                    

  Manufactured Home SGC Forced Air Furnace w/o CAC - PTCS     Qualifies
  Duct Sealing Heat Zone 3                                    

  Single Family Forced Air Furnace w/o CAC - PTCS Duct        Qualifies
  Sealing Heat Zone 3                                         

  **H3C1**                                                    

  Manufactured Home Non-SGC Forced Air Furnace w/CAC - PTCS   Qualifies
  Duct Sealing Heat Zone 3 - Cool Zone 1                      

  Manufactured Home Non-SGC Heat Pump - PTCS Duct Sealing     Qualifies
  Heat Zone 3 - Cool Zone 1                                   

  Manufactured Home SGC Forced Air Furnace w/CAC - PTCS Duct  Qualifies
  Sealing Heat Zone 3 - Cool Zone 1                           

  Manufactured Home SGC Heat Pump - PTCS Duct Sealing Heat    Qualifies
  Zone 3 - Cool Zone 1                                        

                                                              

  Single Family Forced Air Furnace w/CAC - PTCS Duct Sealing  Qualifies
  Heat Zone 3 - Cool Zone 1                                   

  Single Family Heat Pump - PTCS Duct Sealing Heat Zone 3 -   Qualifies
  Cool Zone 1                                                 

  **H3C2**                                                    

  Manufactured Home Non-SGC Forced Air Furnace w/CAC - PTCS   Qualifies
  Duct Sealing Heat Zone 3 - Cool Zone 2                      

  Manufactured Home Non-SGC Heat Pump - PTCS Duct Sealing     Qualifies
  Heat Zone 3 - Cool Zone 2                                   

  Manufactured Home SGC Forced Air Furnace w/CAC - PTCS Duct  Qualifies
  Sealing Heat Zone 3 - Cool Zone 2                           

  Manufactured Home SGC Heat Pump - PTCS Duct Sealing Heat    Qualifies
  Zone 3 - Cool Zone 2                                        

  Single Family Forced Air Furnace w/CAC - PTCS Duct Sealing  Qualifies
  Heat Zone 3 - Cool Zone 2                                   

  Single Family Heat Pump - PTCS Duct Sealing Heat Zone 3 -   Qualifies
  Cool Zone 2                                                 

  **H3C3**                                                    

  Manufactured Home Non-SGC Forced Air Furnace w/CAC - PTCS   Qualifies
  Duct Sealing Heat Zone 3 - Cool Zone 3                      

  Manufactured Home Non-SGC Heat Pump - PTCS Duct Sealing     Qualifies
  Heat Zone 3 - Cool Zone 3                                   

  Manufactured Home SGC Forced Air Furnace w/CAC - PTCS Duct  Qualifies
  Sealing Heat Zone 3 - Cool Zone 3                           

  Manufactured Home SGC Heat Pump - PTCS Duct Sealing Heat    Qualifies
  Zone 3 - Cool Zone 3                                        

  Single Family Forced Air Furnace w/CAC - PTCS Duct Sealing  Qualifies
  Heat Zone 3 - Cool Zone 3                                   

  Single Family Heat Pump - PTCS Duct Sealing Heat Zone 3 -   Qualifies
  Cool Zone 3                                                 
  -----------------------------------------------------------------------------

[]{#__RefHeading___Toc166635742 .anchor}Table B-2: Low-Income Prime
Window Replacement List

  -----------------------------------------------------------------------
  Low-Income Prime Window Replacements **[do not]{.underline}** qualify
  for \$ for \$ reimbursement or credit. Credit/reimbursement is based on
  \$0.30 per kWh of annual energy savings. Annual energy savings and
  credit/reimbursement levels are listed per square foot of glazing area
  replaced. Where credit/reimbursement level is \$0.00, the RTF has
  determined the application was not TRC Cost Effective and, therefore,
  **[does not]{.underline}** qualify.

  -----------------------------------------------------------------------

  -----------------------------------------------------------------------------------------------
  **Measure**          **Building     **Delivery Mechanism or Program** **Annual     **Credit/
                       Type**                                           Savings @    Reimburse-
                                                                        Busbar       ment**
                                                                        (kwh/yr)**   
  -------------------- -------------- --------------------------------- ------------ ------------
  **Heating Zone 1**                                                                 

  Single Family        Single Family  Prime windows must have an NFRC   27           \$ 8.07
  Low-Income Class 30                 rated U-factor of 0.30 or lower.               
  Prime Replacement                   Patio doors must have an NFRC                  
  Windows - Single                    rated U-factor of 0.35 or lower.               
  Pane Base                           Existing window must be single                 
                                      pane with wood or metal frame.                 

  Single Family        Single Family  Prime windows must have an NFRC   19           \$ 5.67
  Low-Income Class 30                 rated U-factor of 0.30 or lower.               
  Prime Replacement                   Patio doors must have an NFRC                  
  Windows - Double                    rated U-factor of 0.35 or lower.               
  Pane Base                           Existing window must be single or              
                                      double pane with wood or metal                 
                                      frame.                                         

  Multifamily          Multifamily    Prime windows must have an NFRC   15           \$ 4.52
  Low-Income Class 30                 rated U-factor of 0.30 or lower.               
  Prime Replacement                   Patio doors must have an NFRC                  
  Windows - Single                    rated U-factor of 0.35 or lower.               
  Pane Base                           Existing window must be single                 
                                      pane with wood or metal frame.                 

  Multifamily          Multifamily    Prime windows must have an NFRC   11           \$ -
  Low-Income Class 30                 rated U-factor of 0.30 or lower.               
  Prime Replacement                   Patio doors must have an NFRC                  
  Windows - Double                    rated U-factor of 0.35 or lower.               
  Pane Base                           Existing window must be single or              
                                      double pane with wood or metal                 
                                      frame.                                         

  Manufactured Home    Manufactured   Prime windows must have an NFRC   24           \$ 7.25
  Low-Income Class 30  Home           rated U-factor of 0.30 or lower.               
  Prime Replacement                   Patio doors must have an NFRC                  
  Windows - Single                    rated U-factor of 0.35 or lower.               
  Pane Base                           Existing window must be single                 
                                      pane with wood or metal frame.                 

  Manufactured Home    Manufactured   Prime windows must have an NFRC   17           \$ -
  Low-Income Class 30  Home           rated U-factor of 0.30 or lower.               
  Prime Replacement                   Patio doors must have an NFRC                  
  Windows - Double                    rated U-factor of 0.35 or lower.               
  Pane Base                           Existing window must be single or              
                                      double pane with wood or metal                 
                                      frame.                                         

  **Heating Zone 2**                                                                 

  Single Family        Single Family  Prime windows must have an NFRC   35           \$ 10.65
  Low-Income Class 30                 rated U-factor of 0.30 or lower.               
  Prime Replacement                   Patio doors must have an NFRC                  
  Windows - Single                    rated U-factor of 0.35 or lower.               
  Pane Base                           Existing window must be single                 
                                      pane with wood or metal frame.                 

  Single Family        Single Family  Prime windows must have an NFRC   25           \$ 7.49
  Low-Income Class 30                 rated U-factor of 0.30 or lower.               
  Prime Replacement                   Patio doors must have an NFRC                  
  Windows - Double                    rated U-factor of 0.35 or lower.               
  Pane Base                           Existing window must be single or              
                                      double pane with wood or metal                 
                                      frame.                                         

  Multifamily          Multifamily    Prime windows must have an NFRC   25           \$ 7.48
  Low-Income Class 30                 rated U-factor of 0.30 or lower.               
  Prime Replacement                   Patio doors must have an NFRC                  
  Windows - Single                    rated U-factor of 0.35 or lower.               
  Pane Base                           Existing window must be single                 
                                      pane with wood or metal frame.                 

  Multifamily          Multifamily    Prime windows must have an NFRC   18           \$ 5.26
  Low-Income Class 30                 rated U-factor of 0.30 or lower.               
  Prime Replacement                   Patio doors must have an NFRC                  
  Windows - Double                    rated U-factor of 0.35 or lower.               
  Pane Base                           Existing window must be single or              
                                      double pane with wood or metal                 
                                      frame.                                         

  Manufactured Home    Manufactured   Prime windows must have an NFRC   33           \$ 9.90
  Low-Income Class 30  Home           rated U-factor of 0.30 or lower.               
  Prime Replacement                   Patio doors must have an NFRC                  
  Windows - Single                    rated U-factor of 0.35 or lower.               
  Pane Base                           Existing window must be single                 
                                      pane with wood or metal frame.                 

  Manufactured Home    Manufactured   Prime windows must have an NFRC   23           \$ 6.96
  Low-Income Class 30  Home           rated U-factor of 0.30 or lower.               
  Prime Replacement                   Patio doors must have an NFRC                  
  Windows - Double                    rated U-factor of 0.35 or lower.               
  Pane Base                           Existing window must be single or              
                                      double pane with wood or metal                 
                                      frame.                                         

  **Heating Zone 3**                                                                 

  Single Family        Single Family  Prime windows must have an NFRC   42           \$ 12.57
  Low-Income Class 30                 rated U-factor of 0.30 or lower.               
  Prime Replacement                   Patio doors must have an NFRC                  
  Windows - Single                    rated U-factor of 0.35 or lower.               
  Pane Base                           Existing window must be single                 
                                      pane with wood or metal frame.                 

  Single Family        Single Family  Prime windows must have an NFRC   29           \$ 8.84
  Low-Income Class 30                 rated U-factor of 0.30 or lower.               
  Prime Replacement                   Patio doors must have an NFRC                  
  Windows - Double                    rated U-factor of 0.35 or lower.               
  Pane Base                           Existing window must be single or              
                                      double pane with wood or metal                 
                                      frame.                                         

  Multifamily          Multifamily    Prime windows must have an NFRC   29           \$ 8.85
  Low-Income Class 30                 rated U-factor of 0.30 or lower.               
  Prime Replacement                   Patio doors must have an NFRC                  
  Windows - Single                    rated U-factor of 0.35 or lower.               
  Pane Base                           Existing window must be single                 
                                      pane with wood or metal frame.                 

  Multifamily          Multifamily    Prime windows must have an NFRC   21           \$ 6.22
  Low-Income Class 30                 rated U-factor of 0.30 or lower.               
  Prime Replacement                   Patio doors must have an NFRC                  
  Windows - Double                    rated U-factor of 0.35 or lower.               
  Pane Base                           Existing window must be single or              
                                      double pane with wood or metal                 
                                      frame.                                         

  Manufactured Home    Manufactured   Prime windows must have an NFRC   39           \$ 11.77
  Low-Income Class 30  Home           rated U-factor of 0.30 or lower.               
  Prime Replacement                   Patio doors must have an NFRC                  
  Windows - Single                    rated U-factor of 0.35 or lower.               
  Pane Base                           Existing window must be single                 
                                      pane with wood or metal frame.                 

  Manufactured Home    Manufactured   Prime windows must have an NFRC   28           \$ 8.28
  Low-Income Class 30  Home           rated U-factor of 0.30 or lower.               
  Prime Replacement                   Patio doors must have an NFRC                  
  Windows - Double                    rated U-factor of 0.35 or lower.               
  Pane Base                           Existing window must be single or              
                                      double pane with wood or metal                 
                                      frame.                                         
  -----------------------------------------------------------------------------------------------

## Attachment C: Fundamental Requirements Related to Federal Due Diligence

**C5.0 Fundamental Requirements Related to Federal Due Diligence**

The purpose of this section is to apply, to the terms of the CRC and CAA
agreements, the following standard provisions as a minimum for
implementation of the credit/reimbursement initiatives for the purposes
of meeting the federal governments requirements for due diligence in the
expenditure of federal funds and the dedication of federal staff.

**C5.1 Purchase of Energy Savings**

c.  The utility shall abide by all the pertinent provisions of this
    document and all applicable Power Sales Agreement provisions
    including sections for notices, uncontrollable forces, governing law
    and dispute resolution, and standard provisions (i.e., sections
    pertaining to amendments, assignments, information exchange and
    confidentiality, no third-party beneficiaries, waivers, sever
    ability, hold harmless sections), and termination provisions unless
    otherwise directed in this section or in subsequent conservation
    agreements. the power sales provisions regarding uncontrollable
    forces, which apply to both parties for contract power obligations,
    also apply to the parties' conservation obligations.

d.  This commitment applies to the utility and any applicable utility
    sub-contractors, contracted third parties and contract staff
    responsible for a portion, regardless of percentage, of time worked
    related to the implementation, management, record keeping, or any
    other related involvement of the utility activity funded through BPA
    credit/reimbursement.

e.  BPA shall not be obligated to pay for energy savings from measures/
    projects/completed units prior to the implementation date of the CRC
    or a CAA agreement or delivered after these initiatives end or after
    the implementation period unless otherwise specified in an
    agreement.

**C5.2 Other Sources of Funding**

a.  The utility may use only one BPA funding source for specific
    measures/projects/units to achieve savings.

b.  BPA will not pay for any portion of the cost of a project under BPA
    agreements where those costs have been or will be reimbursed,
    received payment for, or otherwise given credit under any other BPA
    or other federal contract or financial assistance agreement.

**C5.3 Reporting**

a.  The utility shall submit reports to BPA using the PTR reporting
    system as defined in section 1.9.

b.  All reports can include only measures with completion dates within
    the performance period specified. Completion dates are for completed
    units/measures or approved completion reports.

c.  The utility shall retain all supporting documentation for each
    submitted report.

d.  Documentation retained by utility for each submitted report should
    clearly indicate the reporting period and the report to which they
    are associated.

e.  Should there be a disagreement regarding a submitted report, BPA and
    Utility agree to work together to correct errors in the report and
    any revisions shall be included on the revised report. The Parties
    shall make reasonable efforts to make adjustments as soon as
    possible after BPA's receipt of the report. See Disputes section of
    the Power Sales Agreement for all other applicable dispute
    resolution provisions.

**C5.4 Suspension and Withholding Payment**

a.  BPA and utility agree to an immediate suspension of any measure,
    which presents a significant environmental, health, or safety threat
    to Consumers. Such a determination by either Party must be preceded
    by a reasonable investigation.

b.  BPA shall not accept a report for credit/reimbursement for any
    suspended measure during the suspension period. The utility shall
    remedy or take actions agreed to by the Parties to correct the
    environmental, health or safety threat to Consumers. The utility
    shall have a number of days as agreed to in writing by BPA, to
    remedy or complete the corrective actions. The utility will notify
    BPA when the remedy or corrective actions are complete. BPA shall
    review the corrective actions and make a determination on lifting
    the suspension. BPA will notify the utility of its determination. If
    the suspension is lifted by BPA, the utility may begin
    implementation of the Agreement with the changes required by BPA
    under its determination.

c.  If BPA determines the utility's implementation of any Agreement
    under CRC or CAA is not in compliance with the environmental,
    technical, or record‑keeping requirement, BPA shall provide a
    written notice to the utility suspending implementation of all or
    specific activities in cover under the appropriate Agreement and
    identify the specific nature of the noncompliance. BPA will provide
    comments on what activities are required to bring the activity into
    compliance. BPA shall not accept reports for any measure implemented
    under a suspended activity.

d.  If BPA suspends a utility activity as noted in "c" above, the
    utility shall have a number of days as agreed to in writing by BPA,
    to correct the noncompliance identified and notify BPA when the
    corrective actions have been completed. BPA shall review the
    corrective actions and make a determination on lifting the
    suspension. BPA will notify the utility of its determination. If the
    suspension is lifted by BPA, the utility may begin implementation of
    the Agreement with the changes required by BPA under its
    determination.

e.  If the utility does not completed the remedy or corrective actions
    required then BPA may terminate the appropriate Agreement.

f.  The utility shall bear the costs of Agreement compliance.

**C5.5 Termination**

a.  The utility has the right to terminate Conservation Agreements upon
    no more than 60 days written notice, or as defined in specific
    contracts. The utility shall have one year from the effective date
    of termination pursuant to this section to complete Work in
    Progress, unless otherwise negotiated in subsequent agreements.

b.  BPA may terminate a CRC Agreement when:

    1.  The utility has failed to comply with the environmental,
        technical, or record-keeping requirements; or

    2.  The utility has failed to comply with the guidelines/manual
        requirements. Including progress toward targets as described in
        Section 2.11 -- Performance Reviews and Remedies.

    3.  The utility becomes insolvent, files a petition for bankruptcy
        or reorganization, or assigns substantially all assets to
        creditors and/or consequently BPA no longer serves the utility's
        loads.

c.  The utility and BPA may not include in termination "Work in
    Progress" where the completion period occurs beyond the effective
    date of termination.

d.  If an Agreement is terminated in accordance with this section, the
    utility may not report measures/projects/units for
    credit/reimbursement for "Work in Progress."

**C5.6 Environmental Provisions**

a.  BPA, in the performance of Agreements, must comply with all
    obligations pursuant to the National Environmental Policy Act,
    therefore:

b.  Both Parties agree to:

    1.  Comply fully with all applicable environmental laws and
        regulations;

    2.  Assist and cooperate with meeting all environmental obligations,
        to the fullest extent economically and technically practical and
        mutually agreeable; and

    3.  Provide, upon request of the other Party, a copy of the
        pollution abatement plans as required by the Clean Air Act, by
        the Clean Water Act, by other federal statutes, or by an agency
        having jurisdiction and within a reasonable time submit evidence
        such plans have been approved or have not been objected to by
        agencies with jurisdiction.

**C5.7 Standard Provisions**

a.  The Information Exchange and Confidentiality section of the Power
    Sales Agreement is expanded for the purposes of this agreement to
    include BPA's obligations under the National Operations Security
    Program (OPSEC).

b.  [For CRC]{.underline}: the CRC Conservation Agreement includes all
    pertinent provisions related to CRC or those applicable to both
    funding initiatives, included in document, including appropriate
    appendixes. [For CAA]{.underline}: The CAA Conservation Agreement
    incorporates appropriate provisions from this manual and is the
    single source of the commitment between the Parties.

**C5.8 Liability**

The utility agrees BPA has no responsibility for production of energy
savings under the Agreements.

**C5.9 Governing Law and Dispute Resolution**

All agreements pursuant to this document shall be interpreted consistent
with and governed by Federal law. The parties shall make a good faith
effort to negotiate a resolution of any and all disputes before
initiating litigation. Should reasonable negotiation fail, both parties
agree to dispute resolution processes as defined the current BPA and
Utility Subscription Contract.

**C5.10 Notices**

Any notice required under this agreement shall be in writing and
delivered:

a.  In person;

b.  By a nationally recognized delivery service;

c.  By United States Certified Mail; or

d.  By electronic mail to e-mail addresses that are designated at the
    time agreements are signed.

Notices are effective when received. Either Party may change its address
for the purposes noted above by giving notice of such change in the
manner noted above.

## Attachment D: Final Post-2006 Conservation Structure (6/28/05)

Energy Efficiency

**Bonneville Power Administration**

**Final Post-2006 Conservation Program Structure**

This document describes BPA's final Post-2006 Conservation Program
structure. A companion document, "Response to Key Issues Raised in
Public Comment Process," summarizes the key issues raised in the 56
public comment letters and e-mails BPA received regarding BPA's
Post-2006 Conservation Program Proposal. The companion document also
summarizes BPA's final decisions on these key issues that are
incorporated into this final program structure. This document is
organized as follows.

**Section I: Introduction.** The program purpose and BPA's strategic
direction are described in this section. The five-year (FYs 05 -- 09)
aMW targets are identified. The five program principles that were
included in BPA's Final Record of Decision on the short-term Regional
Dialogue Policy are described along with seven key policy directives
that help frame the post-2006 conservation programs. Finally, the
timeframe anticipated for implementation of these final programs is
explained.

**Section II: Program Portfolio and Structure.** This section includes a
description of the portfolio of programs followed by a more detailed
description of program design features for each of the four portfolio
components: a rate credit; utility and federal agency customer bilateral
contracts; third-party contracts; and regional infrastructure support.
Features that are consistent across all programs are identified up
front. Oversight requirements and tracking and reporting activities are
described in Appendix 1 and the small utility option for the rate credit
program is described in Appendix 2.

Appendices:

1.  Sample of BPA Reporting, Oversight, and Evaluation Requirements.

2.  Small Utility Option under the Conservation Rate Credit

**I. Introduction**

**Purpose**

The purpose of this document is to describe the portfolio of programs
that BPA will offer during the 2007 through 2009 timeframe and through
2011 (pending the outcome of post-2009 rate case decisions and/or future
long-term power sales contract requirements). BPA anticipates that this
portfolio will: (1) facilitate BPA's ability to achieve its share of the
regional conservation targets as defined by the Northwest Power and
Conservation Council's (Council) Fifth Power Plan; (2) enable BPA to
achieve its strategic objective described below; and (3) provide
consistency with BPA's Regional Dialogue policy decisions. In addition,
the seven BPA policy directives described below provided supplemental
guidance to the portfolio design.

**Strategic Direction**

[Strategic Objective 3:]{.underline} BPA ensures development of all
cost-effective energy efficiency in the loads BPA serves, facilitates
development of regional renewable resources, and adopts cost-effective
non-construction alternatives to transmission expansion.

**Explanation of S3:** BPA will continue to treat energy efficiency as a
resource and define our goals in terms of megawatts of energy efficiency
acquired. Even if we adopt tiered rates, we are very likely to continue
to need limited amounts of new resources. We expect conservation to
continue to be a cost-effective resource to meet this limited need, with
first priority by law. Accordingly, our goal is to continue to ensure
that the cost-effective conservation in the load we serve gets
developed, since this amount is very unlikely to exceed our total need.
We will ensure this amount is developed with the smallest possible BPA
outlay. We will do this through a combination of acquisition of
conservation, adoption of policies and rates that support others'
development or acquisition of cost-effective conservation, and support
of market transformation that results in more efficient electric energy
use.

**Program Principles**

The following five conservation principles were included in BPA's Final
Record of Decision on the short-term Regional Dialogue Policy (dated
February 2005). They provide the framework for future conservation
program design purposes.

-   **Conservation Targets from Council's Plan:** BPA will use the
    Council's plan to identify the regional cost-effective conservation
    targets upon which the agency's share (approximately 40
    percent[^11]) of cost-effective conservation is based.

-   **Conservation Achieved at the Local Level:** The bulk of the
    conservation to be achieved is best pursued and achieved at the
    local level. There are some initiatives that are best served by
    regional approaches (for example, market transformation through the
    Northwest Energy Efficiency Alliance). However, the knowledge local
    utilities have of their consumers and their needs reinforces many of
    the successful energy efficiency programs being delivered today.

-   **Achieve Conservation at Lowest Cost Possible to BPA:** BPA will
    seek to meet its conservation goals at the lowest possible cost to
    BPA. While only cost-effective measures and programs are a given,
    the region can benefit by working together to jointly drive down the
    cost of acquiring those resources.

-   **Administrative Support:** BPA will continue to provide an
    appropriate level of funding for local administrative support to
    plan and implement conservation programs.

-   **Funding for Education, Outreach and Low-Income Weatherization:**
    BPA will continue to provide an appropriate level of funding for
    education, outreach, and low-income weatherization such that these
    important initiatives complement a complete and effective
    conservation portfolio.

In addition to the five approved principles listed above, BPA's
Post-2006 Conservation Program Structure is guided by the following key
policy directives:

-   **Benefits Must Flow to BPA:** BPA must realize directly the benefit
    of the savings achieved from the conservation acquisition programs
    it funds. ([Note]{.underline}: the decrement will only be required
    in conjunction with slice/block customers' bilateral acquisition
    agreements and in some third-party contractor programs, as
    appropriate and with utility agreement.)

-   **Cost-Effective Measures:** BPA will only pay for cost-effective
    measures as defined in the Council's Power Plan.

-   **Accountability:** BPA needs to be sure it is getting what it pays
    for \-- incremental, reliable and verifiable conservation savings.
    Measurement and verification will be included in all program
    mechanisms. This will include managing performance risks upfront
    such that BPA will avoid any need to "backstop" underachievement.

-   **Tracking Progress:** BPA will monitor and report, on a regular
    basis, how our utilities and other parties are spending the
    conservation funds it provides across all components of the
    conservation portfolio.

-   **Flexibility:** BPA will retain flexibility to shift budgets and
    targets across all program elements of the conservation portfolio
    and across program years to ensure the Council's target is met at
    the lowest cost possible.

-   **Leveraging and Coordination:** BPA will coordinate and synchronize
    its efforts with those of others as part of an effective and
    efficient regional effort to achieve cost-effective conservation.

-   **Local Control:** BPA will foster local utility initiative and
    control of conservation efforts to the maximum extent it can,
    consistent with meeting cost and verification goals.

[Timeframe]{.underline}

It is anticipated that this program structure will be implemented for
BPA's FYs 2007 to 2011 period. However, new power sales contracts and/or
post-2009 rate case decisions may require that elements of this program
structure be adjusted. This program approach will be ready for
implementation on or before October 1, 2006. BPA will allow customers
that have used all their C&RD credits and have filed a final closeout
report to spend their funds under the new rate credit starting in
calendar year 2006 (targeted for January 1, 2006) and to claim spending
on approved, cost-effective measures when the new rate credit kicks in
(October 1, 2006). This approach will require customers to indicate
their willingness to participate in the new rate credit program (should
it be approved in the rate process) and follow the implementation rules
as defined by BPA. Only qualified ECMs implemented after the customers
have satisfied their C&RD obligations and indicated to BPA that they
want to begin the new program will be allowed. *([Note]{.underline}:
There is a risk to utilities if they begin before the new rates are
finalized. This is similar to the risk some utilities assumed when they
started their rate credit conservation activities early in 2001 before
the start of the current rate period.)* BPA will include a mechanism or
procedure for customers to discontinue participation in the rate credit.
However, should they choose to discontinue participation, they will have
to pay the full PF or appropriate power rate, including the 0.5 mill
adder, for the remaining portion of the rate period.

BPA will offer new bilateral contracts for execution by customers in the
fall of 2005 (targeting October 1, 2005). Customers may choose to close
out current ConAug contracts and transition to new bilateral
conservation acquisition agreements. Customers can begin implementing
projects and receiving reimbursement from BPA under the new contracts
(with modified terms and incentive levels) once the new contracts have
been executed. However, commercial and industrial projects already
purchased or approved under ConAug will be subject to the current ConAug
incentive levels and contract terms. Payment for projects under the new
bilateral contracts can only occur after the execution date for the new
agreement. BPA believes this approach will allow BPA to maximize the use
of existing rate period conservation budgets to facilitate achieving the
higher targets presented in the Council's Fifth Power Plan.

**Commitment to Achieving the Target:** BPA believes it is important to
maintain a steady level of support for conservation over time and will
continue to provide a strong energy efficiency program with a firm
commitment to achieving its share of the Council's conservation target.
This commitment has been demonstrated in the current rate period. BPA
more than quadrupled its budget for installing energy conservation
measures and capturing conservation savings from about \$15M in 2001 to
over \$70M in 2002. Since that substantial increase in funding for
conservation, BPA has maintained a high level of support for delivering
conservation savings each year. In the 2007-09 rate period, BPA proposes
to continue this support and increase the funding level from about
\$70M/year, on average, to \$80M/year, on average.

**Program Portfolio and Structure**

**Program Design Features**

BPA's Post-2006 Conservation Program is a portfolio of programs and
supporting activities designed to achieve BPA's share of the regional
cost-effective conservation target (as identified by the Council's Fifth
Power Plan). The portfolio includes: (1) a rate credit program; (2)
utility and federal agency customer acquisition program; (3) third-party
acquisition initiatives; and (4) support for regional infrastructure
necessary to effectively carry out the other portfolio elements. Options
are provided under the rate credit program for small utilities. In
addition, under the rate credit program, a renewables alternative is
provided.

The program portfolio is shown in the following chart and explained in
further detail in the remainder of this document.

[Post-2006 Conservation Program aMW Targets]{.underline}

Based upon the Council's Fifth Power Plan, there is a regional
conservation target over the 2005-

2009 period of about 700 aMW. BPA's responsibility to achieve its share
of this regional target is based on the amount of regional firm load
that BPA supplies with federal power. BPA estimates that it is
responsible for about 40 percent of the 700 aMW or 280 aMW. While this
amount equates to an annual target of 56 aMW, BPA will adjust the amount
of its target to take

**BPA's Final Post-2006 Conservation Program Structure**

into account the estimated amount of "naturally occurring" conservation
(about 7 percent or 4 aMW/year). This results in an average annual
conservation target of 52 aMW/year for a total of 260 aMW over the
2005-2009 period. BPA will increase its near-term conservation targets
for the 2005-09 period, rather than the originally proposed 2007-11
period. This change reflects an adjustment and commitment by BPA to
align the new conservation targets with the same five-year planning
horizon in the Council's Fifth Power Plan. BPA expects to meet its
2002-06 target (220 aMW averaging 44 aMW/year) by the end of FY 2006. To
meet the 52 aMW/year target in 2005 and 2006 (i.e., an additional 8
aMW/year from the Council's new target), BPA will seek to acquire an
additional 16 aMW in 2006.

BPA will conduct an evaluation to estimate the accuracy of this
assumption about naturally occurring conservation and whether the
assumption should be modified going forward. BPA's commitment is to
ensure development of the five-year target, recognizing that there will
be variations in the pace of the delivered savings on an annual basis.

As indicated in the March 28 proposal, BPA will count all conservation
savings achieved with its funds toward the new target. For example, BPA
will count 50 percent of NEEA's conservation acquisition towards BPA's
targets since BPA provides 50 percent of NEEA's funding. BPA will also
count the conservation savings that result from IOU rate credit
expenditures.

**Eligibility**

All BPA customers (including the IOUs), with the exception of the
aluminum-related DSIs, will be eligible to participate in the rate
credit program. All BPA preference and federal agency customers will be
eligible to participate under the bilateral contract program.

*Incremental Requirements*

BPA's conservation funding must be used by our customers for energy
efficiency savings and related activities beyond what they are required
by state law and/or regulatory requirements to accomplish. A public
utility board of directors decision to pursue a particular conservation
program, for example, would not, in itself, make that funding
non-incremental.

**Decrement**

BPA believes, as stated in the original proposal, that decrementing is
necessary to minimize cross-utility subsidies and to ensure that the
benefits from conservation flow to BPA and its customers. BPA will
continue its current practice of not decrementing the slice/block or
participating IOU customers under the rate credit program, but will
continue requiring a load decrement for these customer groups in
conjunction with the bilateral contracts program. The decrement will not
apply to the NEEA contract. Whether or not the decrement applies to
other third-party contracts involving slice/block customers will be
determined on a case-by-case basis. Customers will be asked if they want
to participate in any third-party program in their service area.
Customers will be informed if a decrement applies to the program at the
time they are asked.

This approach continues the policy we currently apply and ensures that
BPA realizes a load reduction from the conservation BPA pays for and
that BPA and its customers see the full benefit from the conservation
acquisitions. For the rate credit program, this approach, while not
resulting in a BPA load reduction, reduces a barrier to utility
participation in BPA's conservation programs and is consistent with the
Conservation Workgroup's recommendations. However, BPA does not believe
this approach is consistent with how conservation should be acquired, so
the decision to not decrement the rate credit program for the 2007-09
rate period is not meant to set any precedent for future conservation
program activities post 2009.

BPA considers this strategy, along with the change to pay only for
cost-effective measures, a positive step toward BPA's goal of achieving
cost-effective conservation at the lowest possible cost.

**Renewables Alternative**

Under the rate credit program, eligible customers can choose to use
their credits for qualified renewable resource related activities. BPA
will require a three-month advance notice prior to each year of the rate
period (2007-09) with a \$6M/year cap that will be pro rated if
customers over subscribe. Small utilities (7.5 aMW and under) and BPA's
federal agency power customers will be exempt from this *pro rata*
requirement. This is intended to provide sufficient advance notice to
BPA regarding the amount of rate credit and thus aMW that will be
achieved with the rate credit funds, and provides additional flexibility
for customers that manage their rate credit on an annual basis. A list
of eligible renewable measures will be distributed for public review and
comment prior to the start of the new rate credit program.

**Budget**

BPA's annual budget (capital and expense) for acquiring the target of 52
aMW/year is \$80 million (see Table 1). BPA has an additional \$6
million per year from BPA's Generating Renewable Program Fund for
renewables. For the 2007 -- 2009 rate period, the rate credit will be
\$0.0005/kWh (1/2 mill) on utility-purchased power from BPA and the
equivalent treatment for IOU residential benefit payments. This equates
to roughly \$42 million (including participation by pre-subscription
contract holders and IOUs). BPA anticipates that \$6 million per year
will be spent on renewable resource related initiatives. As shown in
Table B-1, BPA will pay a weighted average of \$1.5 M/aMW (which
includes a 15 percent administration allowance for the rate credit and
bilateral contracts programs) across the entire portfolio of programs.

**Table B1: Program Annual aMW Targets and Budgets**

**Program aMW Budget Cost/aMW**

Rate Credit (at 0.5 mills = \$42M\*/year 20 \$36M \$1.8M

with IOUs and Pre-Subbers included)\*\*

Utility & Fed. Agency Bilateral Contracts\*\* 17 \$26M \$1.5M

Third- Party Contracts 5 \$7M \$1.4M

Market Transformation 10 \$10M \$1.0M

(via NEEA)

Infrastructure Support and Evaluation \-\-- \$ 1M \-\--

Total 52 \$80M \$1.5M

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\*Assumes \$6M/year of the \$42 M/year from a separate renewable budget
will be spent on renewables.

\*\*Includes a 15 percent administration allowance.

**Features Consistent For All Programs**

There are several features that will be consistent across all of the
conservation programs:

-   BPA will pay only for qualified cost-effective measures from the RTF
    list as defined by the Council's Fifth Power Plan, as well as for
    approved calculated and custom program designs, and for additional
    deemed measures that are approved throughout the rate period.

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-   The list of qualified, cost-effective measures, deemed kWh savings
    and payment rate per measure will generally be consistent across
    programs. However, BPA retains the flexibility to negotiate custom
    agreements.

-   BPA's willingness to pay may vary by sector and measure, and will
    reflect the actual cost to acquire resources in each sector. It may
    also reflect program implementation realities.

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-   BPA's will consider measure life in our determination of willingness
    to pay levels for specific measures.

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-   BPA will strive to simplify implementation by using averages that
    take advantage of measure similarity.

-   Packaging of measures will be allowed, but BPA will only pay an
    amount equivalent to payment for the cost-effective measures in the
    package.

-   BPA will attempt to minimize the frequency of adjustments to
    willingness to pay adjustments. For example, BPA may adjust payments
    with six months notice, if necessary, to compensate, for changes in
    codes, market prices, technology penetration or, if needed, to stay
    on pace with targets. Adjustments will apply to measures installed
    after the date the adjustment notice is effective. No retroactive
    adjustments will be applied.

-   Utilities may request the RTF review the eligibility of new measures
    or measures previously deemed to not be regionally cost effective.
    If the RTF recommends the requested measures as cost-effective, BPA
    will review the RTF's recommendations to determine whether or not
    BPA will pay an incentive for the measure.

-   Semi-annual reporting will be required.

-   BPA retains the flexibility to shift funds between programs and
    program elements, and across fiscal years as needed to ensure the
    conservation targets are achieved at the lowest cost possible.

-   Oversight and verification will be similar to the current
    requirements under the ConAug program. Participating utilities will
    be required to support evaluations (see Appendix 1).

-   Information on individual utility expenditures and achievements
    resulting from BPA funding will be made available to the public, as
    appropriate.

**Rate Credit** **Program**

**Overview**

A rate credit will be established to facilitate local development of
conservation. The aMW purchased with rate credit money will be counted
towards BPA's aMW target. Load forecasts will not be reduced and no
decrement off block or slice will be required. If IOU's participate,
they will participate under the same rules and conditions that apply to
all utilities. Utilities will make a commitment to BPA if they plan to
participate in the rate credit program no later than three months prior
to the start of the rate period (program start October 1, 2006;
notification to participate required by July 1, 2006). The utility will
make the commitment by submitting a letter to BPA that states that the
utility will participate and that the utility agrees to abide by the
program rules as documented in the appropriate GRSPs and the
Implementation Manual. If a utility chooses to discontinue
participation, the utility must provide BPA notice no later than July 1
for the following October 1 to September 30 fiscal year period. A Rate
Credit Implementation Manual, similar to the existing C&RD
Implementation Manual, will be prepared and distributed approximately
six months prior to program implementation and three months before
utility commitments to the rate credit are required. An overview of this
program is shown on the chart. Key features of this proposed program
include:

**Key Features**

-   Customers may choose to be reimbursed from the rate credit for
    administration costs at a rate of up to 15 percent of the customer's
    eligible annual rate credit.

-   Monthly credit amount is equal to the forecasted eligible annual
    credit/12.

-   Each utility may choose the incentive level to pay the end user but
    is credited only the amount BPA offers for each cost-effective
    measure.

-   Rate credits will be provided for qualified deemed, deemed
    calculated, custom/protocol projects and standard offers.

-   BPA engineers will provide custom proposal reviews to the extent
    engineering resources are available

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-   Utilities will report at least semi-annually to BPA via the RTF
    reporting system. If, at the second semi-annual report (end of the
    first full year of the program), the utility is not meeting its
    targets (50 percent or less of its expected rate credit spending),
    the utility will have to prepare and have BPA approve an Action Plan
    that provides sufficient proof of achievable intent by the end of
    the first year after the program starts (10/1/07). BPA staff will be
    available to assist utilities in developing an Action Plan that will
    indicate how the utility will spend its rate credit funds by the end
    of the rate period (9/30/09). BPA's goal is for every participating
    utility to spend the full amount of its rate credit on qualified
    conservation and/or renewables activities by the end of the rate
    period. If at the 18-month period (third progress report -- 4/1/08)
    participants still have not made sufficient progress on their rate
    credit spending (i.e., 75 percent or less of their expected rate
    credit has been spent), then BPA may send a notification letter that
    the rate credit will be withdrawn for the third year of the program
    (i.e., customers will be required to pay the full PF or other
    appropriate power rate) so the funds can be reallocated. After the
    end of the third year of the rate credit program (9/30/09), there
    will be a final true-up required for participating utilities.

-   The existing RTF web-based information and reporting system will be
    used. The RTF database will include all measures in the current C&RD
    database and the cost-effective measures for which BPA is willing to
    pay an incentive during the new rate period (FYs 2007-09). The
    reporting system will be enhanced to include means for utilities (at
    their option) to enter savings acquired from non-cost-effective
    measures, measures the utility pays for with its own money, and for
    identifying savings from lost opportunity measures.

-   Measurement and verification for non-deemed measures at a level
    similar to that done under the current ConAug program will be
    required (see Appendix 1).

-   Utility records related to spending of BPA funds will be subject to
    federal financial review.

-   BPA will conduct an annual oversight visit (see Appendix 1 for
    further detail).

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-   Pooling of utility funding is allowed (optional), but there will be
    a 15 percent cap on total administration costs for the pool.

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-   Utilities may contract independently with third-party service
    providers to operate their programs (optional).

-   An annual commitment to renewables will be allowed (see earlier
    Renewables Alternative section).

**Rate Credit Eligibility**

-   Only qualified, cost-effective conservation and direct application
    (customer side) renewable measures will be eligible for a rate
    credit and renewables option.

-   There will be a no cap on the total dollars in the rate credit
    program that a utility may either contract to low income
    weatherization organizations or spend on utility low income
    programs. No double counting of savings will be allowed, and
    utilities may not claim administration costs on the amount of money
    contracted or passed through.

-   Third party subcontracts with energy organizations will be allowed
    provided cost-effective aMW savings result. Utilities may not take
    administration payments on pass-through contracts. BPA will include
    these funds in determining its share of the NEEA aMW achieved and
    will count these aMWs toward BPA's target.

**Small Utility Option**

**Overview**

Small utilities are defined as those with a 7.5 aMW or smaller total
load. BPA wants to make participation in the rate credit feasible for
small utilities, while ensuring that dollars actually go to
cost-effective conservation and renewables. Small utilities will be
required to acquire cost-effective measures (or renewables) in order to
participate in the rate credit program. BPA will allow up to 30 percent
of their rate credit for administrative costs, ensure that small
utilities who wish to spend their rate credit dollars on renewables can
do so without being affected by a *pro rata* adjustment if renewables
are over subscribed by customers (exceed the \$6M/year cap), provide a
checklist of simple programs and initiatives suitable for a small
utility to implement, and modify the performance reporting requirements
to align more with their capabilities. More detail on these changes is
included in Appendix 2.

**Utility and Federal Agency Bilateral Contracts Program**

**Overview**

BPA anticipates this bilateral program component of the program
portfolio to be a five-year program and is committing funding for a
three-year period (2007 though 2009). This program is needed because the
conservation resources are not evenly distributed across the region. BPA
may shift money between the bilateral contract and other programs in the
portfolio, as appropriate.

Streamlined, standardized umbrella agreements will be written with
interested utilities (participation is optional). Similar to the current
ConAug program, each agreement will have exhibits that provide specific
program details. Utilities can select from available program exhibits to
customize the selection of programs best suited to their service
territory. BPA will fund both standard offer and custom designed
programs. BPA (or its designated contractor) will conduct oversight. BPA
will make a budget commitment to the utility for the duration of the
contract subject to utility performance. Similar to the current ConAug
program, BPA (or its designated contractor) will provide limited
engineering assistance for project scoping and, if requested,
pre-approval of projects. The proposed Utility and Federal Agency
Bilateral Program is an acquisition program and, as such, the decrement
will apply to all slice/block customers. Key features of this proposed
program include:

**Key Features**

-   Reimbursement of administration costs at a rate up to 15 percent of
    the allowable costs may be included with the project budget and
    reimbursed by BPA.

-   Each utility may choose the incentive level to pay the end user but
    is credited only the amount BPA offers for each cost-effective
    measure.

-   BPA engineers will provide custom proposal reviews to the extent
    engineering resources are available.

-   Measurement, verification and oversight will be similar to that done
    under the current ConAug program.

-   Incentives will be provided for qualified deemed, standard offers
    and custom/protocol projects.

-   BPA will explore augmenting the existing RTF database to allow
    bilateral contract reporting \-- so that tracking for both programs
    will be through the same database. Invoicing for BPA payment will be
    separate.

-   Stranded cost repayment provisions will be put in place between each
    participating utility and BPA.

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-   BPA will strive to provide simplified contracts.

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-   BPA will strive to provide a streamlined approval process

**Measure Eligibility**

Only qualified cost-effective conservation and direct application
(customer-side) renewable measures will be eligible.

**Third-Party Contracts**

**Overview**

This third-party contract component of the program portfolio will allow
BPA to contract to third parties when these contracts will lower the
cost of acquiring conservation or where needed to affect markets that
cannot be changed at a local level. BPA will only pay third parties to
work in utility service territories that have agreed to participate in
the third-party program. This policy of requiring pre-approval of
utility partners is a continuation of BPA's current policy. In general,
regional programs will be designed to operate in coordination with local
utility programs. For example, regional bulk purchases of a technology
might be delivered locally. BPA anticipates transferring funds between
third-party contracts and utility and federal agency bilateral
contracts, as needed, to balance the level of effort needed at both the
regional and local levels and to achieve the targets at the lowest
possible cost.

Pre-committed funding for NEEA (\$10 million per year for the 2007-09
period) is included in this mechanism and no decrement will be applied
for the NEEA contract.

**Key Features**

-   BPA will negotiate reasonable administration costs for third-party
    contracts.

-   Region-wide programs and efforts will be coordinated with local
    utilities.

-   The decrement will not apply to NEEA.

-   A determination of whether or not a decrement applies for other
    third-party programs will be determined on a case-by-case basis.

-   Customers will be notified as to whether or not a decrement will
    apply to any third-party program of interest to the utility before
    the utility agrees to participate.

**Infrastructure Support**

**Overview**

A number of proposed support activities will be undertaken to optimize
expenditures through BPA's energy efficiency programs, to leverage other
available resources and to reduce the overall cost of accomplishing the
conservation. These activities may include:

-   Setting up a mechanism for peer sharing (e.g., so utilities can
    share successful program ideas and marketing materials).

-   Conducting limited BPA and collaboratively funded RD&D to ensure we
    are developing the next wave of energy efficiency technologies.

-   Performing evaluations (process and impact) and market assessments
    to ensure BPA's programs are achieving the intended result and to
    gather the information necessary to make mid-stream program
    adjustments. Co-funding from other affected organizations may be
    solicited for these evaluations/assessments. BPA may also contribute
    to a regional evaluation designed to assess how much naturally
    occurring conservation has been achieved.

-   Enhancing and supporting the RTF database to include expanding the
    reporting elements and Web site to allow bilateral contract
    acquisition reporting and tracking and to track lost opportunity
    acquisition.

-   Developing, with utility guidance, tool kit components such as
    utility program marketing and implementation materials that
    utilities need and may choose to use to launch new programs.

-   Developing templates and other program design "off the shelf"
    materials that small utilities can easily use.

**Tracking and Reporting**

BPA is upgrading the RTF/C&RD database to allow utilities to report both
bilateral and rate credit program accomplishments in an on-line
database. BPA will continue to rely on invoicing for reimbursement under
bilateral agreements. BPA is also expanding the database to allow
utilities to report conservation savings from other funding sources as
well.

**Appendix 1**

**Sample of Reporting, Oversight, and Evaluation Requirements**

**Reporting:**

Purpose: Tracking progress to meeting the regional goals in real time
will be important if the region is going to be able to respond and adapt
to shortfalls. In addition, the use of public funds requires a minimum
level of accounting.

All utilities will report at least semi-annually, using the RTF
database, on their accomplishments and expenditures of funds, whether
from the rate credit or bilateral contracts. BPA will strive to have
this single source of reporting meet as many needs as possible to avoid
duplicative or inconsistent reporting needs. All data received will be
in the public domain except where consumer business confidentiality is
needed.

Oversight and Verification:

Purpose: The expenditure of funds included in the published BPA rates
for purposes of achieving conservation (and renewables, if applicable)
is an activity for which BPA has fiduciary responsibility. In addition,
by providing constructive oversight, BPA may be able to provide
assistance to utilities to improve the programs and reporting. BPA will
aim to have one oversight visit per year for all of its conservation
programs for each participating utility, unless major issues surface.

\(a\) Bonneville Power Administration (BPA) or BPA's agent shall have
the right to conduct inspections of units or completed units and monitor
or review a utility's procedures, records, verified energy savings
method and results, or otherwise oversee the utility's implementation of
conservation programs funded through dollars included in BPA's rates.
The number, timing, and extent of such audits shall be at the discretion
of BPA. Such site reviews are expected to be conducted annually. Such
audits shall occur at BPA's expense. Financial audits shall be in
compliance with the audit standards established by the Comptroller
General of the United States. BPA may contact appropriate federal,
state, or local jurisdictions regarding environmental, health, or safety
matters related to units or completed units.

\(b\) Prior to any oversight visit physical inspection, BPA shall give
the utility written notice. If physical inspections are required by BPA,
the utility shall have 30 days to arrange for the inspection of units or
completed units. The oversight visit will include: review of energy
audit or measure installation procedures, technical documents, records,
and/or verified savings methods and results.

**Evaluations:**

Purpose: Evaluations are needed to determine barriers to program
success, identify ways to improve programs, help track program
accomplishments, and to assess the market conditions, the accuracy of
the savings estimates, and to answer the ultimate question of whether
programs are meeting their expected goals.

(a) BPA may conduct, and the utility shall cooperate with, evaluations
    of conservation

impacts and project implementation processes to assess the amount, cost
effectiveness, and reliability of conservation in the utilities' service
areas or region. After consultation with the participating utilities,
BPA shall determine the timing, frequency, and type of such evaluations.

\(b\) BPA anticipates that many of the evaluations will be done
collaboratively with other organizations to share costs and improve the
usefulness of the evaluations. In some cases, this will result in the
evaluation being managed by another party on behalf of BPA and others.
Such evaluation contract management responsibilities might be shared
with other parties, including among others, the NEEA, the RTF, the Power
Council, the Energy Trust of Oregon, or another utility.

\(c\) BPA will determine the specific requirements for evaluations with
consideration for the schedules and reasonable needs of the utility and
the utility's customers.

\(d\) Unless requested by the program managers to improve program
operation, any evaluation of the project initiated by BPA shall be
conducted at BPA's expense or shared regional expense and such costs
shall be excluded from the implementation budget. Utility or other
entities that cooperate with the evaluation are implicitly recognized as
providing some resource/cost, but will not be considered for direct
reimbursement by BPA, except under unusual circumstances. Cooperation
with the evaluation is a cost of the partnership in delivering the
programs.

> **Appendix 2**

**Post-2006 Conservation Program:**

**Small Utility Option under the Conservation Rate Credit**

BPA will continue to define small utility as those utilities with loads
of 7.5 aMW or under. BPA intention is that small utilities acquire
cost-effective conservation (or renewables) in order to receive the
conservation rate credit (CRC). The following CRC Program elements will
be available to small utilities:

-   Up to 30 percent of a small utility's CRC amount may be used for
    administrative costs, (which include information, education and
    outreach (marketing) efforts regarding energy efficiency).

-   Only one BPA oversight visit will be required during the three-year
    CRC rate period (unless the utility requests a more frequent
    review).

-   Only one report will be required during the three-year CRC rate
    period.

-   Third-party (or utility pooling) to run utility conservation
    programs (using some or all of the 30 percent administrative
    allowance to pay the third-party) is allowed.

-   Small utility customers can satisfy their remaining 70 percent CRC
    spending by implementing appropriate (to their service areas)
    cost-effective measures, such as:

    -   CFL programs

    -   Appliance Rebate programs

    -   SGC Manufactured Homes program

    -   Energy Star New Construction program

    -   Other qualifying cost-effective measures and standard offers

However, if small utility customers don't have sufficient opportunities
to implement cost-effective measure programs with their end-use
consumers, then the following options are available to help ensure that
they will be successful in meeting their full CRC obligation:

-   Donations for cost-effective measures to low income weatherization
    organizations with no cap (e.g., CFLs).

-   Purchase of the renewables (with no *pro rata* adjustment if
    renewables are over subscribed ((i.e., exceed \$6M/year cap)) by CRC
    participants).

-   Donations to NEEA (or other organizations that will use BPA's funds
    to install cost-effective measures) with no cap.

BPA's AEs and EERs are available to work with small utilities to develop
a reasonable game plan for achieving CRC success under the new program
requirements. BPA will continue to explore new program options for small
utility customers.

[^1]: ^\*^ Materials referenced on the BPA Energy Efficiency Post-2006
    Web site can be found at:
    <http://www.bpa.gov/Energy/N/projects/post2006conservation/> unless
    otherwise noted. Customers without Internet access should contact
    their Energy Efficiency Representative for more information or for
    copies of the referenced materials.

[^2]: Included in the custom project template available in the PTR.

[^3]: BPA\'s fiscal year runs from October 1 through September 30.

[^4]: This does not imply that the utility will not have to track the
    costs of most commercial/industrial and agricultural projects,
    because the decision to pay per kWh or invoke the cost-share cap
    depends on knowing the actual incremental cost. This means that
    tracking and documenting will include all project conservation costs
    in order to determine the reimbursement level.

[^5]: Decrementing utilities may choose to accept payment for, and take
    a decrement for, only the 5 percent distribution line losses.

[^6]: BPA interprets "substantial" to mean \~ 75 percent or more of the
    ducts are outside the conditioned space.

[^7]: "Ducts Outside" and "Ducts Inside" are shorthand for homes with
    ducts outside the conditioned space where duct testing and sealing
    can result in higher savings gains, and homes without substantial
    ducting outside the conditioned space, respectively.

[^8]: See footnote 4 for the meaning of these classifications.

[^9]: Rebate limited to no more than two units per sprinkled acre.

[^10]: Lateral moves also included.

[^11]: Based on the FY03 White Book information.