EWEB Board of Commissioners — March 18, 2025

0:03 Right. I'm going to call to order the work session uh March 18, 2025. And there is a meeting logistics and facility and safety awareness posted on the screen, but I'm not going to go ahead and read that. So, hand it right over to you guys. All right. Uh, good evening, commissioners. I'm Brian Booth. Thank you for joining us this evening. Uh, we have a uh we have a very fun and exciting agenda item to chat about. I have a couple of the real experts up here with me. Uh, Juan Serpa Munos and Ben Olrich who you've met before. Uh, the leads on this project. Uh, so let's

0:49 go ahead and jump into it. We've got an hour. Uh, so first of all, some disclaimers. Uh there is a heavy number of asterisks on the this report. Uh this is a study of potential. Uh practicality is limited limited by in one breath here staffing programs ramp rates customer willingness and ability to participate andor financially contribute contractor capacity and interest and equipment availability. We have assumptions that are built into this that we believe make it realistic. Uh they are all assumptions. Some of them are going to be wrong. Um this is our best guess at what's out there and what's really achievable. The study will inform a

1:35 planning process that will include research of all of the above, guiding principles, scenario evaluations, budget setting, and eventually a conservation implementation plan. So all those to say, got to click for me, Ben? Yeah. Oh yeah. Uh let's not put the cart in front of the horse too much here. Uh it's really exciting. There's a lot of potential out in our service territory to be able to do more. I just don't want to jump to too many conclusions. This is all informational. All right. So with that, I can hand it over to Ben to uh get started. Great. Thanks, Brian. So back in 2023, we did our IRP and one of the action items from that IRP was to

2:20 do a study of the potential for conservation and demand response in our community. So when we look out in the future and plan our power supply, we wanted to know how much could happen on the demand side of the equation. And so we hired a consultant in 2024, Lighthouse Energy Consulting, and we've been working with Ted Light and Sophia Spencer who are the two consultants and they've been fantastic to work with. Um they are experts in in the area of demand side uh demand side studies and um they started with regional assumptions and looked at the 2021 power plan that was published by the council. They started with those assumptions uh which took regional uh data and then downscaled it down to eweb. So we used eweb centric data about our building

3:06 stock and attributes of our community to make sure that those regional assumptions were scaled appropriately to our appropriately to our community. And so we think we've let that's led to much more accurate results and we've got some really great data today that will help uh kind of paint a picture of what the future could look like. So, in your background materials, you received the draft copies of the demand uh conservation potential assessment report and the demand response potential assessment report. And Juan and I today are going to provide some context to those numbers um and provide some uh two different two complimentary perspectives. Mine from the IRP mindset or system planning mindset and one from the implementation program side of it. So before I go to my first slide, which is your first chart, I'm going to put us in the IRP mindset, which is thinking

3:52 about cost effectiveness. At what point does it make more financial sense for EW to invest in conservation when comparing it to buying new wind, solar or batteries, things like that? So instead of investing in new resources to meet our load growth, what can conservation do for us? So this first slide uh the headline number here is 85 average megawws of potential. So that's the dark green shaded area shown here. And so the first comparison I thought of is okay let's put a dotted line to show our forecasted load growth in the future. So that's the black dotted line. And so that 85 average megawatts of potential is the top of the green shaded area. and the consultant um in order to feed the

4:39 integrated resource plan, they broke it out into levelized cost bins. So when you put something in terms of levelized costs, it's in a dollar per megawatt hour and it allows you to compare the cost of that measure, that conservation measure relative to the cost of a new wind farm or solar. And so um they I've oversimplified it here and broken it into two bins of two different colors. First is the dark green shaded area, which is all the measures that cost less than $45 per megawatt hour. And then the upper lighter shaded green area is everything that costs $46 and above. And that range goes very high. It goes all the way up to like over $600 a megawatt hour. So some of these measures are very

5:24 expensive. And when we think about cost effectiveness, I think of the numbers in the back of my mind is the Bonavville contract. Bonavville is one of our least cost resource options in our portfolio. That's around $39 a megawatt hour. New resources like wind solar battery can range from $55 to $65 a megawatt hour blended in our IRP modeling results. So when we think about the likelihood of that under $45 bin being cost effective, it seems very likely to be cost effective. In fact, when you do a weighted average of all those measures that are inside that bin, the weighted average is actually $17 per hour. So many measures cost much less than 45. Um, and then the last piece of context I want to add is our current conservation

6:09 targets is in the dotted blue line to just give you a sense of what we're doing today. If we did that same thing for the next 20ome years, um, that green dark shaded under 45 category shows a lot of potential. it's roughly double what our current measures are today. So very exciting um possibilities. Um and so emphasizing that idea that the the load growth is what creates that need a need for new resources, I wanted to say, okay, what does it look like to take money from your purchased power expense budget and instead invest into conservation programs? And so we worked with a consultant to come up with a rough estimate of what those future spending uh the future spending might look like. So in 2030 the the green shaded area is

6:55 around $2 million a year and in 2045 that number grows to $8 million a year. So conservation is not free. These these would require investments in programs and measures. Uh but then I thought, okay, well, if we can put that in context of if that saves you on even your cheapest resource option is Bonavville at $39 a megawatt hour, how does that compare? And so I put that gray shaded area of $39 a megawatt hour in the background. So the concept here is you're avoiding paying someone else, paying a generator, paying Bonavville, and instead choosing to invest in conservation. So it's that kind of avoided cost concept. The other thing I want to make uh in that green spending that includes the cost of incentives like rebates and it also includes

7:41 staffing and overhead costs. So it's kind of your anticipated spending to achieve that under 45 category. Uh the other caveat I would add is these measures are maybe different than what we do today. Veb's current conservation measures are based on our values and not simply focused on just cost effectiveness. So, we're going to provide some more context into the measures and the composition in that bin uh when Juan presents. Yes. Uh and then lastly, peak savings. What are the peak savings potential? So, if you can offset roughly half your annual energy load growth with conservation, uh what about our peak load growth? Can conservation help with our peaks? And the answer is yes. It can also offset roughly half of your peak load growth. Again, this is

8:27 only that under $45 per megawatt hour bin that we're talking about. And then we zoom in and say, okay, what are some of the measures driving those peak savings in these study findings? And so, residential smart thermostats, residential duct ceiling, and commercial lighting are three programs that are really huge components of these peak savings. And those are indicators of programs that we might be interested in if we want to go after this cost-effective bin of measures. And to provide some context to that, I'm going to pass it off to Juan. Um, yeah, thanks Ben. Uh, this under $45 per megawatt hour bin presents an

9:12 opportunity for substantial substantial, excuse me, uh, achievable energy and capacity savings. However, this bin implies an intentional approach to cost-effective energy conservation, which in many ways is different than our current approach, which is more of a responsive one to customer um interest. Over the next three slides, my intent and goal is to provide a general overview of considerations of the implementation of this bin to help bring you context of this potential. To start, let's take a look at the measure composition of this bin. Uh to clarify, the percentages that you see on these two tables for the commercial and the residential sector do not add up to 100 because I'm only highlighting those that have the highest potential. On the

9:57 residential side, which provides 30% of the savings in this bin, 43% of them come from heating, ventilation, and air conditioning or HVAC, which highlights smart thermostats and duct ceiling as having the highest potential within that category. On the commercial side, which brings 40% of the savings, 47% of those come from lighting and 26% of those come from HVAC, which highlights strategic energy management and fans as having the highest potential within those. The next slide, please. To provide a better understanding of the implementation considerations for some of these measures, I will now focus on the duct ceiling measures. An example, duct sealing is the repairing and sealing of

10:42 duck work applicable to homes with forced air systems. These homes use duct work as the delivery mechanism for heating and cooling. The duct ceiling measures an example of how in order to pursue the savings in this specific bin, programmatic changes and additional considerations will be critical in the near and long-term future, including those to business processes, contractor engagement and partnerships, and staffing among others. Looking at the graph, the bars in gray show existing single family as having the highest potential. Multif family, where we tend to find the large portion of rentals and limited income households not appear in this graph due to ducted systems not usually found in these types of buildings. Ew completed one duct ceiling project in 2020

11:28 2024. However, we would be looking at increasing this level of participation in a considerable manner in the next few years, including, as the graph shows, having over 1,600 projects in 2036. This high level of adoption would mean that about a third of single family homes would have have to have gone through our duck ceiling program in the next 22 years. Bringing this level of participation will not be solved simply with higher incentives. We need to explore a completely new approach to in uh increase participation which could include directly working with contractors to increase the awareness of our programs but also hiring installers to directly do installations and direct duct ceiling to homes in our service territory. Next slide please.

12:22 The board and community continues to show interest in the limited income and rental sectors. However, our current popular programs including those with high adoption in our income based efforts such as ducklas pumps insulation windows live in the over $120 per megawatt hour bin. And some of these specific measures have a much higher levelized cost. On the graph, the yellowish areas are savings from households that would qualify for incomebased programs, while the bluish areas are from households that would not. In general, about 34% of all households in our service territory could qualify for income-based programs. However, 70% of the savings in this bin would come from households not eligible for EW income based programs. This is

13:07 due in part to most residential savings in this bin. 86% of those coming from the single family sector. Multifamily where we find most rentals and income eligible households would bring about 4% of the savings in this specific bin. I want to remind them I'm talking about this specific bin savings in general. Multif family tends to have lower energy consumption but also reduce opportunities for energy efficiency and measures especially those that are cost effective. The conservation potential assessment highlights the under $45 per megawatt hour bin of conservation and conservation in general as an exciting opportunity for e-web to substantially achieve both energy and capacity savings. Although there is some overlap

13:53 between this bin of cost-effective conservation and our current programs, these are two separate strategic uh strategic ways of implementation, especially when considering the customer participation that would be needed. Further evaluation, programmatic changes and programmatic changes will be needed to balance EWIB's values of reliability and affordability that this energy conservation bin provides with those of community and accessibility that in many ways drives our current customer programs. The demand side potential assessment and its conservation potential assessment are one component of the process but not the entire process. As Ryan mentioned, it does not tell us the full picture of achieving savings, including capacity, supply,

14:38 demand, affordability, practicality, and willingness to pay. To understand this conservation, this excuse me, a conservation planning process will be needed. This process would include further review of the results by staff, development of scenarios and costs, and a conservation implementation plan to outline actions, measures, and timelines for implementation. Now I'll pass it to Ben. Thanks Juan. So now we're going to shift gears and uh switch over to the demand response potential assessment. And I kind of changed the header on this slide to say demand response and time of use potential because there's some intermixing here of of what comes first.

15:24 So when the consultant looked at the potential for demand response in the community, their their key finding was there's about 50 megawatts of peak saving potential through demand response programs. Um and the approach they took is they divided them into direct load control programs versus pricing programs. So direct load control is where you would sign up where ew web you e webb would pay you a small fee and you'd sign up your smart thermostat and then four or five times a season e webb would uh tell your thermostat to preheat or pre-cool and avoid a peak. So that's a direct load control program. Whereas a a pricing program like time of use is where eweb just provides a price signal and the customer voluntarily changes their how their thermostat runs um in response to those price signals.

16:10 Um and so we we tried to look at what are the biggest drivers of that 50 megawws of potential savings. What were the biggest uh demand response opportunities? So I'm going to start with the green shaded area at the bottom. That's your residential EV demand uh EV charging. So shifting the EV chargers away from your peaks. And then on top of that is the blue shaded area which is your water heaters. And that's heat pump water heaters or electric resistance water heaters. And then the orange area on top of that is your smart thermostat for heating or cooling. These are just the winter DR programs. Um, and then the last one at the very top there is the brown shaded area. That is behind the meter storage. So, picture that like a Tesla Power Wall that a customer buys. And this is out in

16:55 2040, so we're very far out in the future where a customer has their own battery and then they sign up for e webb to occasionally uh uh use that for demand response. Um, and then the very top there is that kind of thinner fuchsia pink color and that's time of use. And so our first question is why is time of use so small? And it's because it's assuming that the remaining households who don't participate in direct load control programs, those remaining households would participate in a voluntary time of use program. So we have flexibility on how we go about implementing demand response. So if e webb were to start with time of use rates first and we implemented that first, it's very likely that that would cannibalize the participation in the direct load control

17:40 program. So that fuchsia color could actually be the whole area in theory where people voluntarily change their EV charging, they voluntarily change their water heaters and space heaters in response to a time of use uh pricing. So just want to say it's demand response slashtime of use. Um and so yeah that's the idea is that they could capture some of those savings through pricing alone. Uh and in the context of what is cost effective. Those demand response programs are estimated to cost less than a new utility scale battery. So instead of purchasing a 4-hour lithium ion battery, we would look to invest in demand response instead. And when you combine the the green uh under 45

18:26 category of conservation, the peak savings potential there along with the blue demand response potential savings and you kind of compare that to our uh peak load forecast for the future, you can see that you can offset most, not all, but most of our peak load growth with these demand side options. And that's really exciting potential. And I think we as staff are really excited to see that amount of potential peak savings coming from demand side and it will require investments to get there. But I think that's really exciting. And I think uh some of the other context that we want to add today is when we look at implementation or this shift in focus towards cost effectiveness. Um there's going to be challenges to that and it it's going to change the way maybe EW approaches conservation when we

19:11 have this laser focus on what is cost effective and going after that particular bin. And so I think that's some of the context that Juan was hoping to provide today as well. So hopefully that's provided some food for thought and will spark some discussion. With that we can pass it back to you. Thank you. Um this is well presented. I' I've really appreciate it. I'm not lost and we've been in 20 minutes. So thank you very much. Um real quick question. Our our our duck sealing program. Can you tell me what that is? You said that we have a program. That's first I've heard of it. And um yeah, so we have a deck ceiling program. It's available. Uh

19:58 but we don't get a lot of participation. And last year we had I believe we had like in 2024 we only had one but previous to that we had in the 30s uh participation that was because whenever somebody install a ducted heat pump system, they were required to do duct ceiling. And so BPA let go of that requirement. And now we're seeing in 2024 just one project. So the program has been available for years. Uh it's just the adoption is really low. It's not something that customers necessarily they can't see their duck work. They can see their windows. They can see the different things. So it's not something that they pursue intentionally and contractors sometimes may not u be incentivized to promote these programs because they're not making necessarily a lot of money on that. You can install a

20:43 heat pump and not necessarily look at your duck work and then you just move forward, but then the savings are really come from that ceiling because it's kind of like if you're watering your lawn, you have holes on your hose, you know, that water is going everywhere. You're adding your crawl space. So, it's it's it's an important piece of u any forced air system. Unfortunately, we just don't see a lot of participation. I think given the fact that it's a pretty high return that, you know, would be something that we would really be jumping on. So um another qu quick question about more the macro and that's you know demand response and things such as that behavior modification because you're talking about the commercial end of this and about you being able to control when ramp up and ramp down. Well, our our largest employers are government. Uh you think of the UVO, city of Eugene, Lane County, and all that. There's they're the big users when

21:29 the courthouse goes. Is anybody ever given thought to saying, you know, instead of working 8 to5 and everybody ramping up because government, you don't have a choice. I need a planning department or a courtroom, I have to go whenever they're open about just changing their hours of operation or encouraging them to do so through incentivizing about price break to say change your hours of operation. And we've got our major employers and all the big buildings are ramping up at seven instead of eight or six instead of seven. And by that just by doing that just making that uh request and giving them a financial incentive to do that. I would say that's not in this study um that I'm aware of like that particular um program, but I think those are the kinds of conversations you can have as

22:15 you start exploring what potentials out there. I will say what stood out to me was of the 50 megawatts of potential like those uh the industrial and and kind of shifting of larger customers was forecast to be fairly small in this study and I think they're just using very broad assumptions about typical programs. I think Eb has a lot of room to create custom programs that could get those savings, but it requires a dialogue with the customer. Thank you, comment. Commissioner Brown, what I would just say that you just pointed out a really good example of time of use um which is um there would be an economic incentive to move to a different time and in some ways an an economic penalty

23:01 to remain business as usual. And so um with large customers, we would probably typically um negotiate that in whatever sort of contract we have with them. Um uh and we we do know that some of them are are already interested in type of use. Okay? Because I you know utilities are the second largest operating expense of buildings and so I would think that we could give them an incentive to do that. It would slow down our peak. So thank you. I just didn't check one thing just um I just want to make one reference clear. Um Ben referenced the council as a regional u basis for when he started. That's not the city council. That's the Pacific Northwest energy and

23:47 conservation council who works in a multi-state region to set the energy efficiency targets for the region including Bonavville. So, just didn't want to get uh anyone confused when he made reference to the council setting these expectations. This is this is a different council in this case. Uh couple questions. One, uh I was also intrigued by the duck ceiling. What is the the cost to do a duct ceiling on a house? It varies. Depends on the complexity and what may be needed. But what we're seeing is around $2,500. $2,500 less. Okay. Um, so a couple of

24:33 things that jumped out at me when I was going through the items was one was uh the program administrative costs. The they said that the industry standard was 20% but using e webb's numbers it went it jumped to 27%. Is that just because of the way our utility is set up with generation and water and those types of things or or why is there such a discrepancy between our administrative costs for these types of programs and let's say the industry standard? I'll have to look more into that, but when we did the calculations, it came out to 27%. But I'll have to research a

25:18 little bit more why it is that that is different than the 20%. And that Yeah. And then that just jumped out of me. And then the one of the other things that Oh, did you want to Yeah, I can I can add a little bit of context to that. Some of it is that we do energy efficiency conf conservation not just for return on investment purposes. Um, as you know, we have a pretty large content that goes to limited income support, rental support. These are more expensive measures and we don't always stay just within the Bonavville deemed programs. We engineer some of our own. So, those that probably drives up our overall cost a little bit. Okay. It just it just jumped out, you know, 7% of at for admin. Anytime I see admin costs, it sends a flare up.

26:03 Um cuz I mean that's a quarter of the the money, right? 27% is more than 25 is more than a quarter of what we're spending just to to implement a program. So at some point the cost benefit is diminitive. The other thing I noticed in the demand response was how stark the contrast was between the achievable winner demand and response potential between residential and commercial. The residential is huge and commercial is just very small. Um that was on page it it's way down. It's not on one of your slides. It's on page eight of their report. But um so when I saw that it kind of made me think about

26:48 the questions that I put forward you know it's like there's businesses and things that can't really do demand or response and if we see that this the big bang is in residential. Is there a way that we can do our demand response? That is looking at the business side of it and saying, you know, these businesses can't really do demand response and the bang for the buck on demand response that they're going to be achieving is so small that we don't want to penalize them. Um, and just really lead into the residential when it goes to winter peak and and demand response. It just I when I I saw that graph, it just really jumped out at me as as I don't know if there's a way that we can design that.

27:35 But when I see the numbers that are are so stark, it just makes me think, let's try not try to penalize our our businesses and commercial people for such a small return. Those were some of the things I took away. Yeah, Commissioner Barowski, I think, um, one of the things to consider in the case of when you're looking at at business opportunities, a lot of these become application specific. Um, I think when we look at standard programs where you're taking something and you're replicating it across a large customer base like residential, you're going to you're going to see more potential. I do think there's opportunity in the commercial industrial side, but it's going to be very specific to the application. um whether they're

28:20 running one shift or two shifts, whether they're dealing with heating processes that have thermal momentum or not. I mean, these are these are things that we could discover that there's one or two accounts that would equate to 20,000 households, for example. I mean, this this is just something that we have to look into further um on an application by application basis. Um your point is correct. Uh we want to be careful u recognizing that that some businesses have more opportunities than others to adapt some areas maneuvers that would apply to everybody and then some are going to be application specific and we don't want to lose sight of that. Also along those same lines, it it might be that you only have to work with a few

29:06 businesses to get that same level, whereas you might have to work with hundreds of or thousands to get the same level of, you know, achievement and savings for a residential site. I mean, there's just so many more individual homes than there are businesses, you know, individual businesses. Um, I'm curious on the commercial lighting side since that was noted as such a a big portion of it. My understanding was that some of our commercial lighting incentives are actually going away. Yeah. Is there some look at changing that then? Yeah, that's a that's a good point. Um, so BPA is um they're either going to sunset or because now you can no longer purchase compact fluorescent lighting for in Oregon since 2025 and BPA is looking at

29:52 the baseline and possibly sunsetting some of those measures. And so that would imply that EW if that takes place there would be a new baseline and the level of refunding the reimbursement that we get from BPA would change. If that were to be the case and I still wants to pursue these this under this bin the large amount of savings on the commercial side then we would have to consider what level that incremental cost we want to pay now whereas before we got x uh reimbursement maybe we're getting a quarter or a fifth or maybe none and so does ew want to implement that but based on the levelized cost it implies that would still be valuable for eb and cost effective to pursue that full incremental cost but again after staff evaluates and explore this further then we can find out what that right

30:37 number would be for EVA and that is part of the consideration or the use of something else that we're looking at including which is the cost effectiveness calculator that would allow us to evaluate per measure uh what it is the right amount of incentives that how much the customer pays how much the utility pays what makes something move forward because I mean if they're going to purchase it anyway at some point uh but how long does it take for you an older style CFL before it actually dies and needs replacing just naturally. Yeah. The incentive incentivizes you to like, oh, maybe I don't have to replace it now. It's still going, but I'm going to go ahead and do it. You can do it now versus just waiting until the end of life, the current. So, so the potential will still be there, like potential lighting will

31:22 still be there. So, ABC widgets might say, uh, instead of because there's an incentive changing that today, I'm going to wait until it ends. it will still take place. We can just have a role in incentivizing that a faster ch time frame that we have those rebates. How long do they typically expect the older style CFLs to last? I'm not sure. Depends, but I'll have to look for because I mean that that tail of how long it takes before they just naturally go out and that kind of plays into it a little bit. Um, okay. Well, thank you on that. Um, I'm I'm curious. Can you just give me a sense? This uh $45 per megawatt hour, what does that equate to in terms of a the size of a project for

32:08 an average business or an average household? because that that's just a a weird, you know, I understand in the utility term like that makes more sense from where you're coming from, but when we're trying to relate to it and look at a an individual level, it's hard for me to wrap my brain around like how much money are we talking on an individual project basis. So that considers the levelized cost. If you're thinking more about a specific measure like connected ther advanced thermostats for example, uh then that unit may be $240 and our incentive is going to be like $140. Is that is that how you're meaning or Well, I mean, if you're doing it on the amount of savings of a particular project essentially, I

32:53 mean, you're trying to delineate these projects are too expensive because they they don't get that cost savings. they're they're too expensive versus these projects are, you know, in that savings realm that we would want to go after. I understand you put those projects up there, but it still doesn't for me, it would just be helpful to know what those like what what the cost of those projects are. Does that equate to a $300 project? Is it a $1,500 project? Is it a $5,000? I mean, like sense of scale for a home versus a business. And I know businesses are wildly different. So that's probably a harder one to tackle, but at least on the residential side, if I could get a sense of like what that translates to, it would vary depending on the life of the measure. So

33:39 each measure would have a life. For example, connected advanced thermostats have a 5year uh life and whereas like insulation would have like a 45 year life, but insulation doesn't make it on this. Uh so then you would consider the incremental cost, how much it costs from a non energy efficient. I understand how to do it. I just want a number. If like maybe you can't do it now, but if you could get a number like do that math at some point and bring it back that would be helpful. I understand how you have to do it. I just I can't do that. Okay. On the fly here. So, at some point it would be just helpful to know based on these projects if if you go back to the residential slide of of the projects that kind of meet that side.

34:24 Cy. Yeah. Um, no, not this one. It where it had residential versus there. Here we go. So, yeah, that one. Um, like, okay, so for the smart thermostat for the residential side or the air source heat pump, how much do those projects usually cost? If this is the kind of projects that we're doing or on the, you know, on the commercial side, this is how much these typically cost and this is how much we think we would need to pay to incentivize. Okay. Yeah. So, Okay. So, yeah. So, for example, on the duct ceiling, that would be like a $2,500 cost. On the connected thermostat, it would be like a $240 cost if you go for the high. And so, instead of them just like paying for that energy over that amount of time with the current the

35:09 current old technology, we would instead say it's actually better $2,500 worth to just put in a new one that's more energy efficient now because it's going to save x amount of dollars over the life of that that product. Yes, that that is what the potential is saying that duing paying 25 the incremental cost of that measure would benefit e webb and it would fall under the bin of $45 and under. Now, ducksling may have a specific levelized cost, but it falls within that bin. But yeah, we can come up with some of those when you're trying to ask what is the right incentive to provide that would fall more on the cost effectiveness calculator to understand what that sweet number may be in consideration of the the value to e webb

35:54 from different lenses. Okay. So instead, so the project cost $2,500, but the incentive may not need to be $2,500. It may only need to be $500, 600, 700, whatever it needs. And also how uh yeah how much um customers are aware of these programs as well because maybe you need to have a higher incentive to build it and then that goes down or maybe just higher spending on outreach just to get that participation to increase and then once contractors have that awareness or is well sold then that can decrease. So there's a lot that goes into it but I think I'm understanding what and we can look at coming up with some of those scenarios for you. Okay, great. Thank you. Um and then I had one other question. So the direct load control

36:41 um are there other utilities that do this right now and how do they protect themselves from a liability perspective? I can just see somebody saying, "Well, they came into my system and they ramped up my heat. Now my bill is XYZ." And can I can I offer two two answers? The first one is a snide one that anything is possible with a contract. Uh the second one is that um these tend yes there are other utilities that do this. I know that PGE does it. Uh we had done a a pilot on this at Snomish with several hundred participants. Um it was partnered through the manufacturer. So like I have an EcoB thermostat. We worked directly

37:27 with EcoB to do a demand response pilot with these customers. So, we could call on it for 40 hours uh total out of the year. We'd press a button that would send a message to EcoB and they'd turn everybody's thermostat down a degree or two in the winter or up a degree or two in the summer. And would the customer have any input into like, I got a notification actually, sorry, that's not going to work for me today, but another time or I don't recall if they got like a text message notification. I they could absolutely walk to the thermostat and just zero out the change that we had made though. I see. Okay. So, they still have choice. Yes. Otherwise. Okay. Yeah. There's absolutely the the utilities that have

38:13 done it have have created boundaries around what those look like either number of times called upon the limits of which you can make adjustments. Um, and also the customer in in all of their cases have said they can override this for their own reasons, whatever whatever those are. People really have a a hesitancy around letting someone else take control of their important therm. I mean, we fight over it in our own households, let alone having someone else involved with it. Um, and and so I think that um and and we're also seeing other utilities do wrestle with this. what's an aggregated benefit, a whole bunch of people doing a little thing versus the industrials each doing a big thing. They they have seen potential in

38:59 both areas. And so I think we want to keep both of those uh options open. Um, and um, to your earlier question, Commissioner Carlson, I think, you know, Ben, to translate a little bit based on what you've done in the past, I think what she's also looking for is when we did the electrification study and showed what's the benefit for the participant for EWE and the community, having a few examples that would highlight that would also show where the incentives potentially could be as part of that. So, um, there's this overarching potential and benefit, but also, um, recognizing that in some cases we might not have to have to, you know, it's just there's a savings there for the customer, there's all kinds of willingness to do it. It's a great

39:45 investment. In other cases, we have to make seed that. So, I think that's partly what you're looking for. Yeah, absolutely. just that that translation so that we can I mean when somebody is making a decision you know as a community member out in the public and I I don't know I look at that and I I it's not digestible which is fine so but that would absolutely help and then as policy makers then we can you know understand where that incentive dollar um you know might need to be and found a lot in the other work that I do with brain that urgency helps a lot so if something is constantly there people are like eh I don't want to do anything with it but if it is diminishing or will go away um that really sparks interest so I just throw that out there as a design feature that

40:33 maybe we rotate different ones around and have pools and so it spurs some you know interest around the different programs. Okay, that's it for me. Thank you. Thank you, Cher. Um, this is a lot, but it's a really great information. Thank you for the presentation. I I echo Commissioner Brown. It was it's very digestible. Um, there's definitely some percentages that I uh definitely need to reread to have a full understanding. And I wanted to comment as well as Commissioner Barovski. I'm This is the perfect screen. Um, when we talk about uh commercial versus residential, I think on the practical side of scheduling and

41:19 and doing that with with a residential home and with the thousands of residential homes, you'll be doing a lot of scheduling and working around. But if if the goal is to get to 100% achievable for like fans, for example, that'd be great to that that's I assume possible even during business being open. So, probably a lot easier easier to accomplish that. Um, I just wanted to make those comments. I um for the residential duct ceiling one project complete in 2024. Yes. Can you can you you go in 30ish back in 2023? You you said you said uh you you looked back a year before as well in 2023 and there was roughly 30%. It wasn't on the slide. You were responding to a

42:04 question. Yeah, I believe it was 30 something projects that we had and something similar the year pass and that was again because uh there was a requirement to implement duct ceiling whenever uh adapted adapted excuse me a heat pump was installed and BPA let go of that requirement in late 2023 and so a lot of utilities let go of that as well. So they saw a decrease in that. That's just a good measure. I appreciate that. That was primarily my question was why? Um so thank you. You answered my question. Um yeah, I think it's it's going to be an interesting um opportunity for us from a marketing perspective and in particular, I think it was mentioned working with contractors. Um and and I actually had

42:50 um I was going to say my duct sealed, but that sounds wrong. Uh the the ducks on my house underneath my house were sealed and and it was it was about a $3,000 bill. Um, but what was interesting was the contractors who were working on it wanted me to put in a new heat pump. They they came out, they wanted a new heat pump. Oh, that's going to solve your problem. I had a I had a new heat pump. It wasn't it wasn't damaged. Um, and so I think working with contractors is going to be an important part of the channel to this market. um because there'll be things that make sense from an energy efficiency conservation standpoint that may or may not be in their initial best interest. And so this is this is going to pose

43:36 some some opportunities for us. I think it is encouraging and where the $45 comes in is we're looking at we can invest in a resource we can invest in conservation and if conservation is not only more affordable economically we haven't included something like the cost of carbon in this which is also something that would be a benefit less energy less transmission and there's there's also other benefits to the avoided use of energy um but I think it's a it's a good sign that um at least half of our peak and half of our forecasted growth can be mitigated through these efforts and and and affordably mitigated. Um and and that's

44:21 that's pretty exciting. I think as we dive into it further um this is not to say commissioners that this is the only reason we would do energy efficiency or conservation. you have all all expressed other reasons to do it around social benefits. Um those may not be as affordable. Um just recognizing that there would be a difference that of doing that and the intent of that versus this. Um but it it's pretty exciting to note that there's there's possibilities to mitigate higher forecasts in the future through uh demand side programs. So I think that that's that's encouraging to us.

45:06 Um, well, I think this is really exciting and I'm curious what what comes next and realistically when could we think about um starting some of these programs? I know that everything's getting more expensive. We've raised rates and um resources are becoming scarcer. So, it would be great to get a start on this. I've got my own thoughts and I think these two will probably chime in. Um, when I go I'm taking it back to this slide about like long-term vision. This is such a long-term study. Um, and we just got these reports like it has draft marked on it because we were so anxious to show these results and like share the

45:51 excitement with you. I think there's we have a lot more conversations to have about what implementation might look like. And when I think of like strategy, I think you have to look at realities on the ground at study results and bring those two together. So I think my sense is we're starting that journey now. We've got some good data that gets that tells us this is worth spending time on on a long-term basis. And then I think we have some real challenges on implementing these particular measures. If we're interested in these, I think we need to look at those study assumptions. And then Juan mentioned a cost effectiveness calculator where we can play with those assumptions. say, well, what if it cost us a little bit more, a little bit less? Do we still want to do that measure? So, yeah, IBS is kind of just starting this conversation. I'm anxious to get started as well, but I think it's a complex topic and I think

46:37 it really does require top down and bottom up thinking to come together and I think that takes time and communication and collaboration. So, that's that's my own sense of it is I think there's more dialogue to be had before we set strategy. Now, we like to add to that. Um, so yeah, we have the draft report, but we're just getting the data. And really the beauty is in the data. Like the report tells you one thing, but all these graphs and things that you're seeing that comes from the data and the analysis of that. We're going to get conservation potential assessment. All the data, the demand response, but then you got electrification in solar too. So how do all these things play together? It's a really fascinating future to to take a surgical approach to our programs in the future. But that doesn't come from the report. that comes from the data that we're going to get at the end of this evaluation. And then the cost

47:23 effectiveness calculator will let you understand well what is the right um price that should be for each measure. When you're looking at all these substantial amount of measures that you're considering then that is that amount of work times all that and then what would be the right programmatic approach? Are we the right um marketing approach? We have a lot of adoption or not what does the community want? What are the values of e-web? So there's a lot still to I think work and consider to make something take place but I think it's a very very exciting future that we had have ahead of us and uh working with lighthouse has been really fantastic in the information that they can provide. So I would say stay tuned and I think there's a lot of excitement from staff on all this. Uh but there's also a lot of uh consideration to context because

48:09 it sounds great but you really need to understand what is needed to actually implement this. Uh and then we can come back to the board and say this is what it looks like if you wanted to pursue this. I'm not sure we I think there's also some discussion of potential twoon- ones with commissioners to talk more in depth. So I you may have further conversations with staff coming up as well. I'm curious, would we ever consider like a more immediate kind of pilot project or something? I know John Brown has talked about that when you were on the board, you did something with kind of time of use or demand response. Um, and I know that there are probably a not insignificant amount of people out there that would be willing to voluntarily participate in some kind of time of use

48:55 or demand response. Um, and I'm just wondering if it would be possible to to try something like that and just that would give us some like real data. Um and also would potentially help in um advising other customers who do have high bills if we have some like real here examples of like look we had this project and this is what happened. We've had pilot programs in the past on demand response including heat pump water heaters and the price signal just has not been there for the customer at that time nor for e web and so there's a lot of challenges also in the communication protocol that you're using if you're leveraging Wi-Fi for example and that Wi-Fi goes away or the password changes then it so there's we have had

49:41 those pilot programs I think we would look to technologies that can do that in a more automated way so that there's less that the customer has to think about but Again, uh we we can definitely review the pilot produce that we had in the past and bring those results which have have voice concerns with the price signal and also the communication standards that seem to present challenges to this time of use seems to be a nice way to implement something like that because it's up to you but you can use things like the eco that can actually think for you and you don't have to worry about it and so and when you combine like the conservation advanced thermostats with time of use or things like that I think it presents um a potential that is more realistic and feasible than perhaps direct uh time of

50:26 you demand response but again we've had pilots and we can review those and present the results to you that is beneficial and so yeah thanks I I think the timing of this has really two important purposes one is that we we are in the process of looking at various contract options with BPA and it's important to understand what we see is the local potential that drives the assumptions around what our future contract options might be and what the impacts are. And I think that Ben was trying to highlight that piece of it. Thus, the timing is really important for that right now. Um, the other one is to look at the long term. Um, I do think we're going to have to approach marketing a bit differently. Um there's there's uh sometimes when you'd be first

51:13 and run fast and you might not be perfect out of the gate, but you continue to improve to understand things such as price sensitivity uh versus acceptance rate. For example, um we have found looking at not only our own time of use studies but also other utilities time of use studies, people are very enamored with this very early on in the pilot. Some people even bet with their neighbors who they can who can save them more money. Um, but over time you have to make sure that the signals that you're sending warrant the ongoing behavior you're looking for and that and that can vary. So this is not kind of a oneanddone kind of marketing effort. This is going to require eweb to be

51:59 product managers and manage this stuff going forward. And I we are we are excited about this too. commissioner. And I think getting some of these things out, we can do that in relatively lowrisk ways, but we also don't want to send false signals so that people get turned off. We don't want to have so many false starts that people don't trust us. So, we want to we want to do a good job with that. And that's the the balance that we're going to have to to look at. I'd like to um encourage us. So, if we go back, I think the smart meter or it has the residential versus the commercial again. So, it says the smart thermostat. So, something that the county did um to encourage businesses to uh clean out their storm water drains

52:44 was that they contracted with a particular company. I think they went out for an RFP, whoever bid to get the, you know, the bid, but then they would get a standard rate that was significantly lower because they get this whole bulk of um business. And so I don't know if that's something that we could do, but it seemed like it could be a really um innovative way to get some of the smart meter thermostats like just maybe get three or four of them that come and bid and we say great, you can select these and then within a certain amount of time you um you know the residential customers can get a very low rate. Maybe it's subsidized or maybe it's just due to the efficiency of scale. And so they're they have a few, you know, a few businesses that they work with and then we bring that in that way. Anyway, just an idea, food for

53:30 thought. Thanks. Um, one of the things that I'm encouraged about in in the report was the uh utility distribution savings that we can achieve from this. So, we're going to have to buy less transformers. we're going to have to buy less substations um going forward. And so for me, that's where, you know, the demand response and those things are are good. And kind of Frank talked about, well, you know, will it go that but doing these ones that are long-term savings, sealing the ducks, getting uh heat pumps installed, that's going to be good for 8, 10, 12, 20 years

54:19 of savings. pays off one for the customer, but it really pays off for us as a utility as well because we're not having to buy all of these in we're going to have to buy a lot less infrastructure to serve these people. You know, that was one of the things 34 substations uh 29 commercial substations that we don't have to we may not have to buy over the next 28 years. These these are I mean you see it on the cons consent calendar. These are big ticket items. And if we can get these people to to do these long-term savings that may cost us $2,500, you know, it may cost us $2,000 to do that, but how much did KU current and substation cost us, right?

55:04 So TW, you know, if we have to pay $1,000 to to a,000 people, that's $100,000, but that's a tenth of what current costs us, right? So that's the the way that I'm looking at it as well is what can we do that are long-term that's going to really lower our our cost of infrastructure going forward. Just want to Yes. And that like I like you clearly have read the report uh because you're talking about the transmission and distribution deferral assumption that was used. So when I presented these levelized costs, this is the what drives these costs down is the avoided costs of transmission and um and distribution upgrades. So those are baked into these levelized cost numbers.

56:05 I saw there's so two things on the income impact. So, one there there's a section that says income ineligible. So, I'm assuming that means that they're just they they make too much money to get the incentives from our programs. That doesn't mean that there couldn't be some again unique ways to create those incentives to tackle that group. Um, and then the other side of it is that we do if if we were able to target strategically the homes where we continue to pay um for, you know, uh, our our community cares program and we look at that cost savings. I assume that this doesn't take into account any of those dollars, correct? The the amount that we're paying into infrastructure or

56:50 does it? Well, we that we subsidize people's bills directly and not to fix the problem, but just to pay for their their energy because they they're low income, but also many of them, I'm I'm guessing, have homes that are very inefficient because they're renting and there's that divide. So, does this take into account any of the dollars that we pay annually into that or is that just kind of small potatoes in the the bucket? It it doesn't look at energy assistance payments. it looks uh used to the potential of conserv energy conservation. So if we were able to target that to that then we also get the potentially get the savings on the other side if if they're now in a place where they don't have to get energy assistance

57:35 dollars. Yeah. And I think you would have to consider what your intention would be uh if you're looking at cost effective energy savings and may not as it shows it will not be in the limited income sector. Income elleible means that they qualify for our limited income programs. Now for our so uh it is ducted heat pumps, duckless heat pumps. Um those tend to be in the not cost effective bin. So they don't appear on this. So we those are our regular programs that we have which are not necessarily cost effective but it's something that is in alignment with EHIP's values to support our community. So that's why in my presentation I was saying that there's two different strategies here. One is a cost effective strategy and then the strategy that continues to support our current

58:20 programs that may not fall. There's a small gap. There's not really a lot in there's some there's some but like insulation it doesn't fit into this bin. Weather windows does not necessarily fit into this bin. A small amount of ducted heat pumps in manufacturer homes fit but most of them do not. Douglas heat pump does not fit. That's because the cost to install the insulation is yeah the incremental cost is so much more than it is you put something else. And so again there would be two separate strategies that you're trying to pursue. So if you're trying to pursue cost effective energy conservation then that approach may not be in alignment with that. So I I want to encourage us again to look at those innovative ways like if we had potentially a contractor that was like I

59:05 will just do a hundred homes and I'll give you a break on it. It might mean that we push some of those down into the cost-effective category and tackle both. I don't know. But it's worth looking into because I'd like to if we can because I'm a maximizer. I would love to tackle both of those situations. We get a good situation for the person who's in a rental and we tackle our energy situation. But I'm I'm just guessing a lot of it is because it's like a one-off here and there and people have to individually do it and that's just it's really it's so time consuming and frustrating for people to navigate that process because it's not something they do all the time. And so just getting over that hurdle of yeah I know it's something I should do or could do but it's so daunting to do. So the way that

59:52 we can make it easier uh the more effective any of those programs are going to be. Can I make a quick comment? Do you mind Frank? Um, one of the things in addition to focusing on cost effectiveness because that's really important and we do have so many values across the board with affordability and supporting our community etc. The real focus of this study is on where lies the greatest potential. We've chosen to focus today on particular buckets that that are most coste effective, but we're also really thoughtful about like when we start to think as of conservation more as a resource, where is the greatest potential within the community? So, it's it's about cost and it's also about what we can

1:00:48 achieve. Last No. All right. Well, thank you very much. Um, and before I adjourn, uh, at 6:15, the board will meet with the general manager in executive session under OS 192.6602 I1 to review and evaluate the employment related performance of the CEO general manager. And this meeting is now adjourned.