### BASIC INSTRUCTIONS FOR NES SPREADSHEET MODEL
The user onl y needs to work with the Welcome NE S worksheet. NATIONAL ENERGY SAVINGS RESULTS The Energy Savings results appear on the Welcome NES worksheet in box with a light blue heading as shown below. Cumulative energy savings are presented from the chosen Start Year (the example below has the standard starting in the year 2006) to 2010, 2020, and 2030.

NATIONAL NET PRESENT VALUE ( NPV ) RESULTS The NPV results appear on the Welcome NES worksheet in a box with a dark blue heading as shown below. Cumulative Total Operating Cost Savings, Total Equipment Costs, and Net Present Benefit are presented. A negative Net Present Benefit means that there are net costs to the Nation from the increased efficiency standard. A Benefit/Cost Ratio is also provided.

Annual non-discounted Operating Savings and Equipment Price Changes are presented in a chart on the Welcome NES worksheet as shown below. The red line runnin g throu g h the chart rep resents the Net Savin g s ( or costs )

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CALCULATION BUTTONS There are two calculation buttons for determinin g the ener gy savin g s and NPVs for a p articular standard. The first button is called Calculate Results Relative to 10 SEER . This is the button that is recommend for use. After the user changes the desired inputs, they simply need to click on this button for the spreadsheet model to calculate the energy savings and NPV results. Clicking on this button generates results that are relative to a base case design where 10 SEER is the minimum efficiency standard (9.7 SEER for package systems). Energy Saving in Quads Total Elec Gas Oil LPG from 2006 to 2010 0.11 0.11 0.00 0.00 0.00 to 2020 0.78 0.78 0.00 0.00 0.00 to 2030 1.83 1.83 0.00 0.00 0.00

CAC/HP Standards in 2006: 12 SEER Cost and Net Present Values (in billion 1998$) Cumulative for Split A/C Purchased from 2006 to 2030 Discounted at 7% to year 1998 Total Operating Savings 5.73 Total Equipment Cost 7.06 Net Present Benefit -1.32
Benefit/Cost Ratio 0.81

Cost and Saving of CAC/HP

-1.50 -1.00 -0.50 0.00 0.50 1.00 1.50 2.00Billion 1998 Dollars 2000 2005 2010 2015 2020 2025 2030 Price Change Operating Savings Net SavingThe second button, Reset Base Case , should only be used if the user want to generate results relative to a base case design that IS NOT based on a minimum standard of 10 SEER. For example, a user might want to generate results for a 12 SEER standard relative to an 11 SEER standard. If this were the case, the user would need to specify both tier #1 and tier #2 efficiency levels at 11 SEER for a particular start year. Then the user would need to click on the Reset Base Case button. Then the user would need to change the efficiency levels to 12 SEER. After changing the efficiency levels, the energy savings and NPV results generated would reflect the difference between 11 and 12 SEER standards. Again, if the user only want to generate results based on a 10 SEER base case design, the Calculate Results Relative to 10 SEERbutton is the onl y calculation button that needs to be used.

USER INPUTS The user has several inputs to choose from. Most inputs are drawn from a list of options. Those inputs drawn from a list box are indicated with a "down arrow" on the right side of the box. The list box for the energy price/economic projection is shown below as an example. To make a selection from this type of input, the user simply needs to click anywhere on the list box. Once doing so, a list of options will appear which the user can select from.

Some inp uts , which are hi g hli g hted in y ellow , re quire the user to typ e in a value. Below are the list of inp uts which the user can select. ENERGY PRICE/ECONOMIC PROJECTION : This input is drawn from a list of options and defines the electricity price trend. The user can select from the following: 1) Constant 1998 dollars, 2) AEO2000 Reference Case, 3) GRI 1998 (Gas Research Institute) price forecast, 4) AEO2000 High Growth Case, and 5) AEO2000 Low Growth Case. The default value is the AEO2000 Reference Case. DISCOUNT RATE : This input requires the user to type in a value. This input defines the societal discount rate for determinin g the p resent value of future e qui p ment costs and o p eratin g savin g s. The default value is 7%. STANDARD CASE DESIGN — TIER #1 AND TIER #2 EFFICIENCY LEVELS AND START YEARS : These inputs define the standard case design. The user can input either a single tier efficiency standard or a two tier efficiency standard. If a single tier standard is desired, set both the tier #1 and tier #2 efficiencies and start years to identical values. If a two tier standard is desired, set the tier #1 and tier #2 efficiencies and start years to different values. The tier #1 and tier #2 efficiencies are drawn from a list of options ranging from 10 to 18 SEER. The tier #1 and tier #2 start years require the user to type in a value COOLING OR HEATING PRODUCT: This input defines the product class which the analysis will be performed on. The user can select from s p lit a/c , s p lit heat p ump, p acka g e a/c , and p acka g e heat p ump . STANDARD PRICE OPTION : This input defines the price data. The user has two options to select from: 1) price data based on ARI shipment-weighted mean manufacturer costs or 2) price data based on manufacturer costs from the reverse engineering analysis. EQUIPMENT PRICE PROJECTION : This input defines how equipment prices will behave in the future. The user has two options to select from: 1) constant prices (no fall in equipment prices) or 2) a declining price drop based on historical data. The default choice are constant prices. EFFICIENCY MARKET SCENARIO : This input defines how efficiencies will behave once a standard becomes effective. There are three options to select from: 1) NAECA, 2) Roll-up, and 3) Shift. The efficiency scenarios are described below: NAECA: The NAECA scenario is named after the legislation which promulgated minimum efficiency standards for central air conditioners and heat pumps. The NAECA scenario forecasts that equipment efficiencies after adoption o f new standards would change in the same pattern as the efficiency changes that occurred in 1992 when minimum efficiency standards first took effect. Roll-up: The Roll-up scenario simply moves equipment from efficiency levels that exist below the modeled standard level to the SEER value of the new standard. For example, in the case of a 12 SEER standard, if 60% of shipments have efficiencies below 12 SEER, all those shipments are moved to the 12 SEER level without affecting the efficiency distribution above 12 SEER. Shift: The Shift scenario retains the pattern of the existing efficiency distribution but simply re-orients that distribution at and above the new minimum standard that is bein g modeled. AEO 2000 - Reference CaseThe default choice is the NAECA scenario. HEAT PUMP STANDARD LEVEL CUSTOMIZATION : This allows the user to customize the SEER/HSPF combination that they want to analyze for heat pumps. The base levels are shown in the first two columns of the table. The last two columns give the user the option of defining new SEER and HSPF values for the particular standard level of interest. For example, to achieve the same national energy savings for level 2 (12 SEER and 7.4 HSPF) but with a lower SEER value and a higher HSPF value, the user simply needs to type in the desired SEER and HSPF values in the customized input cells immediately to the right of the base level values. The user will need to go through a "trial and error" sequence to determine the exact SEER and HSPF values that will result in energy savings equivalent to the base level values.