# 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/image1.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[^1].

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[^2]. 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[^3] amount of ductwork in
    unconditioned space, the Heat Pump with Ducts Outside[^4] 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.

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.

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.

Table R-3: Zonal/Heat Pump Reimbursements for ENERGY STAR Site-Built
Homes

  ----------------------- ----------------------- -----------------------
                          **Ducts Outside**[^5]   **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.

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.

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.

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.

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.

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))

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.)

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.

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.

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.

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[^6] | 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[^7] 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.

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 |                  |
+------------------+---------+------------+--------+------------------+

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

```{=html}
<!-- -->
```
-   Replacing an existing or proposed transformer with a higher
    efficiency transformer

-   Multiple transformers vs. single transformer based on system
    analysis; and

```{=html}
<!-- -->
```
-   Power factor improvement (measure to improve power factor and reduce
    line losses)

```{=html}
<!-- -->
```
-   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.

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.

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)                      |                                   |
+----------------------------------+-----------------------------------+

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

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                                                 
  -----------------------------------------------------------------------------

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**

a.  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.

b.  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.

c.  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[^8])
    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.

```{=html}
<!-- -->
```
-   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.

```{=html}
<!-- -->
```
-   BPA's will consider measure life in our determination of willingness
    to pay levels for specific measures.

```{=html}
<!-- -->
```
-   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

```{=html}
<!-- -->
```
-   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).

```{=html}
<!-- -->
```
-   Pooling of utility funding is allowed (optional), but there will be
    a 15 percent cap on total administration costs for the pool.

```{=html}
<!-- -->
```
-   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.

```{=html}
<!-- -->
```
-   BPA will strive to provide simplified contracts.

```{=html}
<!-- -->
```
-   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]: 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.

[^2]: Decrementing utilities may choose to accept payment for, and take
    a decrement for, only the 5 percent distribution line losses.

[^3]: BPA interprets "substantial" to mean \~ 75 percent or more of the
    ducts are outside the conditioned space.

[^4]: "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.

[^5]: See footnote 4 for the meaning of these classifications.

[^6]: Rebate limited to no more than two units per sprinkled acre.

[^7]: Lateral moves also included.

[^8]: Based on the FY03 White Book information.