**Utility Sounding Board (USB) Meeting Summary**

**March 12, 2008**

**USB members in attendance:**

-   Doris Abravanel -- Snohomish Co. PUD

-   Larry Blaufus -- Clark Public Utilities

-   Darroll Clark -- Franklin Co. PUD

-   Kevin Howerton -- Grays Harbor PUD

-   Robert Kajfasz -- City of Port Angeles

-   Theresa Lackey -- Midstate Electric Co-op

-   Joe Savage -- Emerald PUD

-   Dawn Senger -- Richland Energy Services

-   Wes Thomas -- McMinnville Water & Light

-   Randy Thorn -- Idaho Power Company

-   Dan Villalobos -- Inland Power & Light

-   Jim Wellcome -- Cowlitz County PUD

    **BPA staff in attendance at various times:**

-   Becky Clark

-   Jennifer Eskil

-   Jean Oates

-   John Pyrch

-   Mark Ralston

-   Tim Scanlon

-   Pam Sporborg

-   Mira Vowles

    **[TSP Cost-Share Guidelines and Regional Consistency (Jennifer
    Eskil)]{.underline}**

Jennifer Eskil, Industrial Sector Lead, presented information and
solicited USB input on the Technical Service Proposal Cost-Share
Guidelines and Regional Consistency, compiled by Pam Sporborg, an intern
in the EE Planning and Evaluation Group. After looking over the
Guidelines and talking with others, Jennifer indicated she wanted to
keep the cost share simple and consistent with the commercial cost
share, which is triggered at \$10,000. BPA would still pay 100 percent
for scoping and walkthroughs. When you're looking at a large industry
and significant savings, a cap might not be a good idea. What do you
think about capping the total dollar amount going to an industrial
project?

-   What about capping based on the amount of kWh the facility uses in a
    year? The Energy Savings Plan (ESP) had a kWh cap. \[BPA is leaning
    toward simplicity, and to get the kWh usage can take a lot of
    time.\]

-   They have to go through an approval process within their
    organization. It makes a big difference in how much they'll be able
    to do because of the cost. Does the \$10,000 limit mean per
    customer, per plant, per study?

What do you think about requiring the following cost sharing, where a
detailed study costs more than \$10,000: BPA 75 percent; end-user 25
percent? BPA wants the industry to pay 25 percent to get some buy in to
the project.

-   When they have a stake in the outcome, they tend to think through it
    more thoroughly.

-   On the other end of the spectrum, when we decided to fund studies,
    we set a \$5,000 minimum. We're not funding detailed studies for the
    small customers.

-   Keep in mind that a large facility may have a small project that
    they need assistance with. To pay TSP funding for a small project
    might mean that you get your foot in the door, but not an actual
    project. \[BPA will take that under consideration.\]

> We all know that you have to meet each industry where they're at,
> which is why we do custom project proposals. We need to continue that
> approach and be flexible, weigh that with having some framework and
> guidelines for us to manage the risk. What paying 100 percent for
> design reviews on new construction?

-   Does the customer need to have skin in the game to look at specific
    measures when you go through the study?

I'm convinced the new plants would not have looked at energy efficiency
if we had not paid for the technical services; they are usually on very
short timelines.

-   We have a new cheese plant out here; we used \$3,000 in general
    scoping funds, and we're funding 50 percent of the cost for detailed
    study. We use different funding mechanisms for different tiers.

BPA is not going to link the concept of the industrial assessment
centers to the TSP cost share; that will be on a different track. We'll
pull this out of the cost share and consider this part of succession
planning in our industry.

-   We worked with the center at Oregon State University, but were
    disappointed with Utah State.

-   We have used OSU in the past; they do good work and look at all
    fuels.

BPA recommends no reimbursement for the industry 25 percent, including
Utilities using their CRC/CAA 20 percent administrative allowance.

-   The industry 25 percent can go into the project cost. \[You don't
    get industry buy in and implemented projects without the cost
    share.\]

-   Allowing the use of the admin allowance to cover the industry 25
    percent results in BPA paying 100 percent without an industry share.

-   How would you know if a utility claims this under admin?

-   BPA can't tell the utility how much to pay, and then reimburse them.

-   The utility can't claim admin unless there's an actual project.

-   The point is do we want the industry to have a financial stake; this
    has nothing to do with the admin. The utility is not liable for any
    of the costs of the study.

-   Adding clarity would help.

For the commercial TSP, it will cover up to \$10,000; anything over that
would be 100 percent funded by the utility or end-user. The industrial
sector has the 12 cent/15 cent option; commercial doesn't have that. BPA
should support 12 cent utilities at the 75 percent level.

Jennifer will revise the guidelines and share it with the USB before
finalizing.

**[Lodging Initiative (Tim Scanlon)]{.underline}**

Tim Scanlon, BPA Commercial Sector Lead, provided background on the
lodging initiative and then opened it up for further discussion.

Tim compared the ESG direct acquisition program, which only happens with
utility approval, to the Oregon lodging initiative, which will leverage
the ETO lodging initiative into public territories. Since gas measures
are included, the ETO program already crosses into some Oregon public
territories. BPA is interested in finding a way to offer the electric
measures too. Previously BPA facilitated utilities offering pre-rinse
sprayers to their customers through the ETO program. Tim explained how
utilities could use their CRC funding, get a HWM credit and get some
visibility for the Oregon lodging initiative. BPA has developed a
mechanism to invoice utilities for this type of direct acquisition in
their service territory. BPA will provide a 75 percent credit for the
HWM for any measure implemented under CRC or direct acquisition. In
Option A, BPA contracts with ETO to offer their Lodging Initiative with
utility permission. Economies of scale make Option A the preferred
contracting method. This could be extended to other states through the
ETO contractor.

Two sample participation agreements, between BPA and the utility, were
provided; these would be required to allow the program to be operated in
their service territory. The conditions of the participation agreement
include recognition of the HWM credit, keeping the utility informed of
activity in its service territory and copies of completion reports. It
would be a turnkey installation; the utility wouldn't have to implement
or enter into PTR.

Would any of the USB utilities be interested in this type of program?

-   Who pays for project implement? \[BPA pays and provides the same
    incentives ETO pays. The utility doesn't have to pay, but gets to
    count the savings.\]

-   Not at this point

-   I want part of this money to flow to our utility; if it's outside of
    CRC, slice customers wouldn't benefit. We would probably participate
    if our utility gets some credit. An alternative would be to have the
    utility fund the program and get 100 percent credit. \[Any utility
    can apply under the CAA for additional funds to implement measures
    in addition to the CRC.\]

-   Is this measure eligible under CAA? \[Yes.\]

-   I'm still decremented for CAA? \[Yes.\]

-   It's not as clear cut for me. We haven't done any CAAs because of
    the decrement. The CAA money isn't flowing here; there's actually a
    penalty to us.

-   Can't answer that right now. It might work for that type of
    customer, but it's a little bit confusing now. We should discuss
    this in a face-to-face meeting to get better understanding. I have
    the same issues that already have been raised; so many programs
    thrown at us, and I'm working alone here, need to look over the
    presentation and think about questions to ask. \[Mira will add to
    the agenda for an upcoming face to face.\]

-   In the future, send out a one-page background write up with packet
    like this. It would help new people and people who missed the last
    meeting to be able to keep track of things. It would help the USB
    provide a better response regarding each program brought to us.

-   We would certainly like to offer something like this to our
    customers. Very interested in the results of the Oregon pilot.

CRC reimbursement is included in the second version of the participation
agreement; an interested utility can participate and use its CRC. That's
the only significant difference between the two consent forms. Savings
in the utility service territory would be tracked and measured, and BPA
would invoice the utility for the cost. The utility would pay BPA back
for the direct acquisition (DA) costs. This might be in the form of an
energy service charge on the power bill within 30 days of time BPA
receives the bill from ETO. This would only apply for eligible costs up
to the utility's CRC allocation. We want to make this easy for the
utility and keep the utility visible and involved to the degree they
want to be. Is this a practical solution for those utilities that need
to spend their CRC?

In ESG, PECI tailors the program to each utility service territory and
signs an agreement with the utility. In the Lodging Initiative BPA has a
master contract with ETO. BPA still has to do verification and
oversight, but ETO will do PTR reporting.

-   Would it work the same in Washington? \[It's just a test in Oregon
    now to see what works. Trying to expand the use of DA mechanisms;
    not sure how it would work in other states as it would have to be
    through a different contractor. Greg Stiles will have materials and
    a presentation related to the ETO program at the workshop.\]

-   Is ETO using local contractors or their own contractors? Concern
    that end-users are protected with warranties, etc. \[Tim will
    confirm that ETO's Program Delivery Contractor uses local vendors.
    Lockheed-Martin is the ETO delivery contractor.\]

-   The utility's reputation is still on line if they are linked to this
    in the eye of the end-user.

**[CRC Early Start for the Next BPA Program (John Pyrch)]{.underline}**

Based on a USB request, John Pyrch, Energy Efficiency Implementation
Manager, discussed the possibility of an early start for the CRC for the
next rate period (FY 2010 -- 2011). BPA doesn't want a gap in program
activities. We're beginning a new rate case, and there's no guarantee we
will have a CRC, so there's some risk in an early start. We have a lot
of capital funds (\$5.2 million in funding for bilateral (CAA) projects
in FY 2007. We achieved 100 MW under ConAug, but have only seen roughly
6.7 aMW of utility HWM conservation in FY 2007 and expect 14 aMW in FY
2008. There were issues with the HWM, but those effects should be less
now. John asked why we should have an early rate credit start when we
have so much CAA funding available, and do you think people are as
concerned about early start as they are about the transition?

-   Another utility called and wanted this brought to a USB meeting.

-   We want a smooth transition. \[Mike Rose, EE Contract Administration
    Manager, will speak about having funding available, contracts ready
    and transition related issues in his presentation at the Utility
    Workshop. The goal is to have a five year CAA program that's not
    tied to the rate period. CAA allows utilities to access additional
    dollars for programs, and not just sit and wait for the new rate
    credit.\]

-   With long-term projects like new construction, it's hard for
    utilities to make commitments when something isn't locked in.

-   With the decrement issue, CAA is less of an option.

-   Full requirement customers fall back on CAA without a decrement. The
    decrement has always been an issue for other utilities.

John will talk internally about early start and try to get an answer
soon. We're turning back large amounts of money each year and can't get
people to spend in under the CAA. We're trying to balance our budget -
need to use full range of funding options.

-   People would use the early start if they've run out of CRC so they
    don't lose momentum.

-   We've done it before with CRC and C&RD, so it isn't anything new.

**[Utility Energy Efficiency Workshop (Becky Clark)]{.underline}**

Becky Clark updated the USB on Utility Energy Efficiency Workshop.

Mike Weedall, Energy Efficiency VP, put together a PowerPoint
presentation for his lunch hour session the second day of the workshop.
Is PowerPoint at lunch an issue with anyone?

-   No, but allow for questions at the end.

We'll have folders, not binders, with about 20 pages of hand-outs. We're
asking presenters to poll the audience -so think of questions to ask.
The vendor reception is full. Cheri has a tic tac toe form to fill out
for drawings. Is everyone planning to attend?

-   Yes from all

-   Appreciate reduction of paper in those folders

Becky will send final version of agenda to USB for comment by Friday.
Becky will have a hardcopy of the Emerald PUD climate change board
resolution.

**[USB Business (Mira Vowles)]{.underline}**

The next meeting is a face-to-face meeting on April 9. The three new USB
members - Doris, Wes and Bob will take over for Kevin, Joe and Jim. Mira
thanked them for their participation.

All of the USB members present said they plan to attend the face-to
face.

Action Items

+------+---------------------------------------------------------------+
| BPA  | -   Mira will include the Lodging Initiative to the agenda    |
|      |     for an upcoming face to face.                             |
|      |                                                               |
|      | -   Becky will send the final version of the Workshop agenda  |
|      |     to the USB for comments                                   |
+------+---------------------------------------------------------------+
| USB  | -   Comment on the Workshop agenda by Friday, March 14.       |
|      |                                                               |
|      | -   Think of questions for participants at the Workshop.      |
+------+---------------------------------------------------------------+

Next Meetings

+------------------+---------------------------------------------------+
| -   April 9      | Face-to-face meeting, 8:30 a.m. to 3:30 p.m.      |
+------------------+---------------------------------------------------+
| -   May 14       | Conference call, 8:30 a.m. to 10:30 a.m.          |
+------------------+---------------------------------------------------+

**Potential Agenda Items for Next Meeting:**

-   Workshop overview (recap) and summary of evaluation forms.