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ACID
PROGRAM
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United States
Environmental Protection
Agency
Air and
Radiation
(6204-J)
EPA 430-B-93-002
April 1993
&ER& The User's Guide
to the Conservation
Verification Protocols
Recycled/Recyclable
Printed en p«p« thn eont»n«
eyd«d iitxr
,.j-LCT!ONAGiIi-!CY
RA/W
P H O G R A M
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If you are interested in receiving a copy of the Conservation Verification Protocols, an
application form for the Conservation and Renewable Energy Reserve, or more information on
EPA's Acid Rain Program, call:
ACID RAIN HOTLINE
617 674-7377
Monday through Friday, 9:00 a.m. to 5 p.m., Eastern Standard Time
or write to:
U.S. Environmental Protection Agency
Acid Rain Division, 6204J
401 M Street, SW
Washington, DC 20460
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Contents
Paoe
INTRODUCTION . .. '...> '...-. -. 1
APPLICATION CHECKLIST 2
SUMMARY GRAPHICS 3
Conservation Verification Form . 5
Conservation and Renewable Energy Reserve 6
Conservation and Renewable Energy Reserve Timetable 7
Conservation and Renewable Energy Reserve Application Procedures 8
INSTRUCTIONS 9
Part 1: General Information 11
Part 2: First Program Year 12
A. Stipulated Savings Path 12
B. Monitoring Path 18
Part 3: Subsequent Years 29
A. Inspection or Default Path 30
B. Monitoring Path, Monitoring 32
C. Monitoring Path, Average of Measurements 35
Part 4: Additional Information 37
Submission Instructions X 37
Attachment Instructions 38
CONSERVATION VERIFICATION FORM 45
Perforated Forms for Removal . ......
Conservation Verification Form
Attachment A - Schedule of Installations
Attachment B - Statistical Data
Attachment C - Service Adjustments
Attachment D - Multiple Measure Programs
SAMPLE VERIFICATION CALCULATIONS . 47
Example 1: Exit Sign Replacement . 49
Example 2: Commercial Lighting Retrofit 54
Example 3: Residential Water Heating 66
APPENDICES 1-1
Appendix 1: List of Qualified Measures 1-1
Appendix 2: Useful Lifetime of Measures 2-1
Appendix 3: Reserve Fact Sheet 3-1
Appendix 4: Conservation/Renewables Reserve Form 4-1
Appendix 5: Reprint of Regulation on Reserve 5-1
Page i
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Illustrations
Paoe
Figure 1 - Conservation Verification Form Flow Chart . . . . 5
Figure 2 - Conservation and Renewable Energy Reserve 6
Figure 3 - Conservation and Renewable Energy Reserve Timetable 7
Figure 4 - Conservation and Renewable Energy: Reserve Application Procedures ... 8
Figure 5 - Stipulated Savings Calculation Path 12
Table 1 - Default Gross-to-Net Conversion Factors 15
Table ; 2 - Gross Savings Equations 16
Figure 6 - Monitoring Calculation Path 18
Figure 7 - Comparison Case Option 1 21
Figure 8 - Comparison Case Option 2 21
Figure 9 - Comparison Case Option 3 22
Figure 10 - Comparison Case Option 4 22
Table 3 - Allowable Subsequent Year Savings 29
Figure 11 - Calculation Paths 30
Figure 12 - Monitoring Calculation Path 32
Figure 13 - Average of Measurement Calculation Path 35
Figure 14 - Large-Sample Procedures •••••. 40
Figure 15 - Small-Sample Procedures 41
Table 4 - T Statistics for 75% Confidence Level 42
Table 5 - Commercial Lighting Retrofit Example Raw Data 58
Table 6 - Residential Water Heating Example Raw Data 67
Page ii
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Introduction
The verification of energy conservation savings is critical to evaluating the success of energy efficiency
programs. This document details step-by-step procedures and calculations needed to verify conservation
savings. These detailed procedures and calculations are based upon the verification methods presented in
EPA's "Conservation Verification Protocols."
The "Conservation Verification Protocols" are intended to describe good practice for impact evaluators of
electric utility programs. EPA developed the protocols as part of its mission to implement the Acid Rain
Program authorized by Title IV of the Clean Air Act Amendments of 1990. Conservation verification is
key to two provisions of Title IV:
• The Conservation and Renewable Energy Reserve, a bonus pool of 300,000 allowances to
reward new utility initiatives in conservation and renewable energy; and
• The Reduced Utilization provision, an Acid Rain compliance strategy of reducing generation
at Phase I plants during 1995-1999.
For these provisions, utilities must demonstrate the extent to which the conservation measure actually
achieves savings.
This document provides guidance for several different verification methodologies. Included in the User's
Guide is the verification form along with detailed instructions and other supplementary information to help
guide evaluators.
For further information or clarification about this document, the Conservation Verification Protocol, or
other aspects of the Acid Rain Program, call the Acid Rain Hotline at (617) 674-7377.
Paget
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Application Checklist
If you are using the Conservation Verification Protocols and applying for allowances from the Conservation
and Renewable Energy Reserve, you must complete the following actions:
Q If you are an investor-owned utility, apply to the Department of Energy for net income
neutrality approval. Apply for net income neutralityapproval as soon as possible to avoid
delays in receiving allowances.
D . Complete the appropriate sections of the "Conservation Verification" form.
D Complete the required attachments to the "Conservation Verification" form.
D Complete the "Conservation/Renewables Reserve" form (this is the application form for
the Reserve).
D Submit the "Conservation/Renewables Reserve" form to your ratemaking entity (e.g.,
Public Utility Commission, Board of Directors, City Council).
D After your ratemaking entity certifies the "Conservation/Renewables Reserve" form,
submit both the "Conservation/Renewables Reserve" form and the "Conservation
Verification" form to EPA.
D Retain a copy of both forms for your records.
Mail forms to:
Apply for net income neutrality certification at:
U.S. Environmental Protection Agency Department of Energy
Acid Rain Division, 6204J Office of Conservation and Renewable Energy
Attn: Conservation and Renewable Energy Reserve Mail Stop CE-10, Room 6c-036
401 M Street, SW 1000 Independence Avenue, SW
Washington, DC 20460 Washington, DC 20585
Acid Rain Hotline (617) 674-7377
Telephone (202) 586-9839
Page 2
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Summary Graphics
Conservation Verification Form Flow Chart
Conservation and Renewable Energy Reserve
Conservation and Renewable Energy Reserve
Timetable
Conservation and Renewable Energy Reserve
Application Procedures
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SUMMARY GRAPHICS
Figure 1
Conservation Verification Form Flow Chart
Below is an.outline of the form used to verify conservation savings.
Detailed information on each step is contained in this document.
General Information
Steps 1-4
First Year Savings
I
Stipulated Path
Steps 5-10
1
Monitoring Path
Steps 11-18
Subsequent Year Savings
Inspection or
Default Path
Steps 19-23
Monitoring
Monitoring
Steps 24-32
Path
v
1
Avera
Measure
Steps 3,
Page 5
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SUMMARY GRAPHICS
Figure 2
Conservation and Renewable Energy Reserve
Title IV of the 1990 Clean Air Act Amendments calls for the creation of the
Conservation and Renewable Energy Reserve. Below is a summary of the
Reserve's key features.
WHAT IS IT?
WHO QUALIFIES?
WHEN?
HOW MUCH?
HOW TO APPLY?
300,000 bonus allowances set aside
to reward energy conservation and
renewable energy
Electric utilities that:
• Own or partly own an affected unit
• Pay or partially pay for the measure
• Implemented least cost planning
• Have net income neutrality
(if investor-owned).
Applies to conservation/renewable
energy initiated from January 1,
1992 until utility enters the Acid Rain
Program
500 MWh saved = 1 allowance
• Verify savings;
• If investor-owned, obtain net
income neutrality approval; and
• Submit "Conservation/Renewables
Reserve" form
Page 6
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SUMMARY GRAPHICS
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Page?
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SUMMARY GRAPHICS
Figure 4
Conservation and Renewable Energy Reserve
Application Procedures
1. Utility
• Complete verification documentation
• Apply for net income neutrality with
DOE (only if investotrowned)
• Complete Conservation/Renewables
Reserve form
±
2. Ratemaking Entity
• Reviews/certifies Reserve form
• Certifies verification documentation
(only if utility is state rate-regulated with
performance-based rate adjustments*)
3. EPA
• Certifies verification documentation
(only if ratemaking entity does not)
• Approves/disapproves Reserve
application
See 40 CFR 73.82(0
Page 8
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Instructions
Conservation Verification
Form
Part 1: General Information
Part 2: First Program Year
Part 3: Subsequent Years
Part 4: Additional Information
Attachment Instructions
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Instructions
The following instructions are designed to guide users of the Conservation Verification Form through each
step. The form itself is presented at the end of the instructions. Applicants for the Acid Rain Program who
need further assistance are encouraged to call the Acid Rain Hotline at (617) 674-7377. . .
The applicant may submit the requested information on the provided form, the tabulated "summary page"
format (see summary tables for each calculation path in the Conservation Verification Form), or the
applicant's own form. If the number of items to be listed exceeds the available space, add pages in the
appropriate format or attach copies of the pertinent page. When you have completed the form, indicate the
page order and total number of pages (e.g., 1 of 7,2 of 7, etc.) on each page in the spaces provided at the
top right hand corner of the page.
If you feel any step needs further explanation, you may attach additional information. However, you are
not required to do so.
Part 1. General Information
Step 1
Enter the name of the electric utility that is applying for the reserve allowances. Also, list the state(s)
in which the utility operates.
Step 2 .
List the name and phone number of the person EPA should contact if further clarification is needed.
Step 3
Sum the net energy savings values from each section of the form. Round the total net energy savings
to the nearest MWh.
Step 4
Enter the name of the individual who will act as the certifying official for the applicant.
Page 11
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INSTRUCTIONS
First Program Year: Stipulated Savings
Part 2. First Program Year
A. Stipulated Savings Path (Steps 5-10)
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exceed 10% of
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i]fograrn- of use of the smallest isolatable circuit.
] ^Forexarnpie, energy savings from residential
flighting efficiency improvements will usually
Figure 5
Stipulated Savings Calculation Path
Gross Energy Savings from
Standard Equation
Gross-to-Net Conversion
Factor
Net Energy Savings
Step 5: Savings Year (Year)
The savings year refers to the year in which savings are being claimed for the particular group of
installations. For instance, if in 1996 the applicant is applying for credit based upon conservation
achieved in 1995, then the savings year is 1995.
Step 6: Type of Measure
The "Type of Measure" refers to a descriptive name associated with the measure. The stipulated
measures are:
• Higher Efficiency Motors for Constant Load Applications Operating Continuously
• Exit Sign Light Replacements
Page 12
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Rrst Program Year: Stipulated Savings
INSTRUCTIONS
Amorphous Metal Distribution Transformers
Higher Efficiency Lights in Office Buildings
Higher Efficiency Refrigerator Replacement
Higher Efficiency Street Lights
Water Heater Insulation Blankets
If the measure is one of the stipulated measures, use the above terms as the "Type of Measure."
To identify engineering estimated measures not on the above list, use an appropriately descriptive
term for the "Type of Measure." A further discussion of each stipulated measure is found in
Appendix D of the Conservation Verification Protocols.
Appendix 1 lists measures that are approved as "qualified energy conservation measures" for
purposes of the Conservation and Renewable Energy Reserve Program. (This list includes the
stipulated measures as well as other qualified measures.) A utility may still receive allowances for
conservation measures not listed in Appendix 1 as long as the measure meets the requirements of
40 CFR Part 73.81 (a) (see Appendix 5). For measures meeting these requirements, use an
appropriately descriptive term for the "Type of Measure or Program."
Step 7: Attachments
Attachment A must be completed and submitted in order to document the number of installations
installed each month. See the Attachment Instructions for more detailed instructions on Attachment
A.
If the measure qualifies for use of an engineering estimated equation, the applicant will need to
provide the calculations used to estimate energy savings. Applicants providing such calculations
must submit the basis for the calculations along with a description of any necessary assumptions.
Attach this information.
As will be noted in Step 9, if you use a gross-to-net conversion factor other than the default value,
supporting documentation for the derived value must be attached to the verification form. This
attachment must include the basis and applicability of the conversion factor.
Step 8: Gross Energy Savings (MWh)
The "net energy savings" calculation depends upon the type of conservation measure employed.
In each case; though, "gross energy savings" is first calculated and then converted into "net energy
savings."
The "gross energy savings" calculation is based upon the standard equation developed for each
measure (see Table 2 for the appropriate equation). If the measure qualifies for use of an engineering
estimate, the applicant will need to provide the equation used to calculate energy savings.
The "gross energy savings" calculation must account for the number of installations employed and
the length of time each installation is in operation. Part-year savings are to be pro-rated based on
monthly installations during the year. If a measure is installed on any day of a month, then it will
be credited for saving energy the entire month.
Page 13
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INSTRUCTIONS
First Program Year: Stipulated Savings
The number of installations must only includethoseuhits functioning and in use prior to the retrofit.
Non-Junctioning (removed or broken) unitrcannot be counted as being replaced.
If the group of installations are in place for the same number of months, then the "gross energy
savings" is calculated as follows:
Number
of Months
bross ^ No. of x in Operation x Measure
Energy - jj^jjj^jj,,^ 12 Equation*
savings
* Measure equation is given in Table 2.
If the measures are installed over several months, then the energy savings for each monthly grouping
must be determined and then summed. Thus, "gross energy savings" can then be calculated from
the following general equation:
U
Measure
M
f Equation* U Equation*
M«*s««-«
1 x
12
Measure
Equation*
where
a = number of installations installed and beginning operation in January
b = number of installations installed and beginning operation in February
I = number of installations installed and beginning operation in December.
* Measure equation is given in Table 2. •
Round value to the nearest tenth of a MWh.
Step 9: Gross-to-Net Conversion Factor
The gross-to-net conversion factor is used to convert the calculated gross savings values to net
savings values. "Net" energy savings" refers only to savings that occurred because of die
conservation program; savings from other sources like free-riders are to be eliminated. Gross-to-
net conversion factors are 1 isted in Table 1. Gross-to-net conversion factors can also be determined
through market research, surveys, and inspections of non-participants.
The listed factors are based upon experience with utility conservation programs. Actual gross-to-
net factors may vary significantly even for similar conservation programs. Thus, larger savings
may be possible if the utility develops its own factor.
Page 14
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First Program Year: Stipulated Savings INSTRUCTIONS
Table 1
Default Gross-to-Net Conversion Factors
_ ... Gross-to-Net Conversion
Conservation Measure Factor
Higher efficiency motors for constant load applications 0.6
operating continuously • .
Exit sign light replacements 0.6
Amorphous metal distribution transformers 1.0
Higher efficiency lights in office buildings 0.6
High efficiency refrigerator replacement 0.9
High efficiency street lights 0.9
Water heater insulation blankets 0.6
Other engineering estimated measures 0.6
Documentation for Gross-to-Net Conversion Factor
If you use the gross-to-net conversion factor from Table 1, then no further documentation is
required.
If you use a gross-to-net conversion factor other than that provided in Table 1, supporting
documentation for the factor must be attached to the verification form. This attachment must include
the basis and applicability of the conversion factor.
Step 10: Net Energy Savings (MWh)
Net energy savings can then be calculated from the following equation:
Net Energy Savings = Gross Energy Savings x Gross-to-Net Conversion Factor
(Step 8) (Step 9)
Round the net energy savings to the nearest tenth of a MWh.
Page 15
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INSTRUCTIONS
Rrst Program Year: Stipulated Savings
Table 2
Gross Savings Equations
Measure Name
Gross Savings Equation
Variable Definitions
Higher Efficiency Motors for
Constant Load Applications
Operating Continuously
8500 x
-------
First Program Year: Stipulated Savings
INSTRUCTIONS
Table 2
Gross Savings Equations (cont.)
Measure Name
Higher Efficiency Refrigerator
Replacement
Higher Efficiency Street Lights
Water Heater Insulation Blankets
Engineering Estimates
Gross Savings Equation
e.-e
4000 x (P^ - P.J
A x 400 + B x200 +
C x 200
Applicant must submit the
equation
Variable Definitions
eg = the labeled energy use of a comparable new
unit meeting the applicable efficiency standard
(kWh/year)
Year Replacement
Took Place e. (kWh/year)
1985-1989 1200
1990-1992 950
1993-1996 750
e = the labeled energy use of the purchased
unit (kWh/year)
4000 = hours/year of operation
P«u ~ P°wcr consumption of original street light
OcW)
P(-w = power consumption of replacement street
light (kW)
A — number of insulation blankets installed
400 = energy saved for each insulation blanket
(kWh/year)
B = number of anti-convection valves installed
200 = energy saved for each anti-convection valve
and each pipe insulation installation (kWh/ .
year)
C = number of pipe installations installed
The basis of the equation used to calculate the energy
savings must be submitted, along with a description
of the assumptions needed to use the equation.
Page 17
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INSTRUCTIONS
First Program Year: Monitoring Path
B. Monitoring Path (Steps 11-18)
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eritemdjin units of total
r
, Figure 6
i/Ionitoring Calculation Path
Energy Use, 1
Treated and Untreated Cases 1 :
i
Service-Adjusted Energy Use, 1
Treated and Untreated Cases 1
|
Service-Adjusted
Energy Savings
1
Gross-to-Net Conversion
Factor
i
Net Energy Savings 1
Step 11: Savings Year (Year)
The savings year refers to the year in which savings are being claimed for the particular group of
installations. For instance, if in 1996 the applicant is applying for credit based upon conservation
achieved in 1995, then the savings year is 1995.
Step 12: Type of Measure or Program
The "Type of Measure or Program" refers.to a descriptive name associated with the energy
conservation measure or program. For individual measures, the terms given in Appendix 1 (as
reprinted from 40 CFR Part 73) should be used, if such terms are appropriate.
To receive allowances from the Conservation and Renewable Energy Reserve for conservation
measures not listed in Appendix I, the requirements of 40 CFR Part 73.81{a) must be met (see
Appendix 5). For measures meeting these requirements, use an appropriately descriptive term for
the "Type of Measure or Program."
If several measures are combined for monitoring purposes, the overall name of the program may
be entered. For instance, a group of energy savings measures undertaken in office buildings may
be termed "Building Retrofit." The individual measures within the program must be listed in
Attachment D.
Page 18
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First Program Year: Monitoring Path ^ INSTRUCTIONS
Step 13: Attachments
Attachments A and B must be completed when savings are monitored. Attachment A is a summary
of installation dates. Attachment B is a summary of statistical data.
Attachment C is a summary of service adjustments. Complete Attachment C only if service
adjustments are deemed necessary.
Attachment D is a summary of individual measures within a-multiple measure program. Attachment
D is completed only if several measures are combined into a "program" for monitoring purposes.
See Attachment Instructions for more detailed instructions on each attachment.
Step 14 : Energy Use
Energy Use, Untreated Case (KWh/instdlation/year)
The "energy use, untreated case" refers to the average number of kilowatt-hours each comparable
device or site uses during a year without the measure in place. The untreated case forms a
comparative basis by which the savings of the program are measured. For example, the "energy
use, untreated case" of a high efficiency motor program could be the energy usage of the motors
mat were replaced by the more efficient models.
The following procedures may be used to determine "energy use, untreated case". Figures 7-10
illustrate various options for the type of comparison cases used, along with the information required
for reporting energy use.
1. Select the type of untreated case to be used. Possible candidates for the untreated case are
listed below. Figures 7-10 give a graphical representation of these options. The applicant
may also choose another type of comparison case.
• Energy use of a comparable non-participant both before and after the installation of the
conservation measure (in this case, only the energy use after the installation of the
conservation measure needs to be recorded on the form);
• Energy use of a non-participant after the installation of the conservation measure;
• Energy use of the device or site prior to installation of the conservation measure; and
• "Flip-flop" of measure (old device is still in place and can be briefly switched on for
a comparison measurement).
2. The sample size used to determine energy usage will later affect the confidence level
achieved for the "service-adjusted energy savings." Ensure that the sample size selected
is sufficient to achieve at least a 75% confidence level for the predicted "service-adjusted
energy savings."
Page 19
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.INSTRUCTIONS
First Program Year: Monitoring Path
3. Measure the energy use of the untreated case. You may use a number of analysis techniques
to measure the energy use. These techniques include billing analysis, econometric
modeling, submetering, or some combination of techniques.
Round the energy use to the nearest kWh/installation/year.
Energy Use, Treated Case (kWh/installation/year)
The "energy use, treated case" refers to the average number of kilowatt-hours each installation with
the measure uses during a year (kWh/installation/year). "Treated case" refers to the installations
with the conservation measure. For example, the "energy use, treated case" for a building retrofit
program could be the number of kilowatt-hours the building used after the retrofit took place.
The following procedures may be used to determine "energy use, treated case".
1. Select the type of treated case to be used. Possible candidates for the treated condition are
listed below. Figures 7-10 give a graphical representation of these options.
• Energy use of the device or site both before and after the installation of the conservation
measure (in this case, only the energy use after the installation of the conservation
measure needs to be recorded on the form); and
• Energy use of the device or site after the installation of the conservation measure.
2. Determine the necessary sample size to achieve at least a 75 % confidence level for the later
calculation of "service-adjusted energy savings."
3. Measure the energy use of the treated case. The utility may use a number of analysis
techniques to measure the energy use. These techniques include billing analysis,
econometric modeling, submetering, or some combination of techniques.
Round the energy use to the nearest kWh/instaliation/year.
Step 15: Service-Adjusted Energy Use
Service-adjusted Energy Use, Untreated Case (kWh/installation/year)
In order to compare energy usage, the untreated case must be adjusted to the same set of reference
conditions as the installations with the measure. The "service-adjusted energy use" refers to the
"energy use" adjusted to a specific set of reference conditions. Some of the most important factors
affecting energy use are:
severity of heating or cooling season (degree-days)
indoor temperature
operating hours
production rate or mix
conditioned floor area
illumination levels
For a specific measure other factors may apply.
Page 20
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First Program Year: Monitoring Path
INSTRUCTIONS
Figure 7
Comparison Case Option 1 :
Energy Use of the Treated and Untreated Cases both
Before and After Measure Is Installed*
Before Measure Installed
Device or Site 1
Without Measure 1
Comparable 1
Non-Participant 1
After Measure Installed .
Treated
Untreated
Device or Site 1
With Measure 1
Comparable 1
Non-Participant I
* Data Requirements: For this option, only the energy use values after!
installation are to be entered on the form. However, values both!
before and after installation will be needed for calculation purposes.!
Figure 8
Comparison Case Option 2:
Energy Use of the Treated and Untreated Cases
After Measure Is Installed
Before Measure Installed
After Measure Installed
Treated
Device or Site
With Measure
Untreated
Comparable
Non-Participant
Page 21
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INSTRUCTIONS
First Program Year; Monitoring Path
Figure 9
Comparison Case Option 3:
Energy Use Before and After
Measure Is Installed
Before Measure Installed
Untreated
After Measure installed
Treated
Device or Site
Without Measure
Same.Device or Site
With Measure
Figure 10
Comparison Case Option 4:
Energy Use with New Device Turned On (Treated) and
Energy Use with Old Device Turned On (Untreated)
Before Measure Installed
After Measure Installed
Treated
Device or Site with
Measure On
Untreated
Device or Site with
Old Device On
Page 22
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First Program Year: Monitoring Path INSTRUCTIONS
Hie calculation procedures for the service-adjusted energy use can vary depending upon the
circumstances. For example, if the comparison case is of the type shown in Figure 7, a simpler
calculation may be possible (see Example 3 in the section on Sample Verification Calculations).
One possible calculation methodology for the "service-adjusted energy use, untreated case" is as
follows:
1. Identify which service conditions affect the energy use of the measure (e.g. temperature,
operating hours, manufacturing output, etc.).
2. Note the level of these conditions during the period in which the treated case is in operation.
3. Note the level of these conditions during the period in which the untreated case is in
operation.
4. Note the long-run average values for the weather-related factors that affect the energy use
of the measure. Weather-related factors may include temperature, wind speed, or
insolation. Weather-related factors are the only service conditions for which the long-run
values must be determined. If the values for weather-related factors differ substantially
from long-run averages, then the basis for subsequent year savings calculations will be
inaccurate.
5. Note the reference conditions. The values for the reference conditions are:
* for weather-related factors such as temperature, wind speed and insolation, the long-
run averages of these factors;
* for other factors, the post-retrofit values of the treated case.
Service levels of the treated case are the basis for the reference conditions (with the
exception of weather-related factors) since service levels often change as a result of the
retrofit. The treated case service levels are more likely to prevail in subsequent years.
6. If the conditions for the untreated case are within 10 percent of the reference conditions,
then
Service-Adjusted Energy Use, £ Untreated
nJS?1? fVT > = (kWh/mstallation/year)
(kWh/installation/year) J
7. If the conditions for the untreated case differ from the reference conditions by more than
10 percent, then you must develop a mathematical relationship between energy use and the
relevant factors. You must note such service adjustments on Attachment C.
Page 23
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INSTRUCTIONS
First Program Year: Monitoring Path
Using the values of the factors at the reference conditions, the service-adjusted average
energy use is thus calculated:
Service-Adjusted Energy Use,
M Untreated Case
(kWh/installation/year)
f(S)
where
S = set of variable(s) affecting energy usage.
The effect of a service factor on energy use may be a simple linear relationship. The
equation for f(S) would thus appear as follows:
f(S) = a + p x (Level of service factor)
Linear relationships may. also be incorporated through the use of ratios:
f(S)
Energy Use, Untreated Case
(kWh/instaUation/year)
Level of service factor at
reference conditions
Level of service factor at
untreated case conditions
If the relationship does not fit a linear pattern, then you must develop a non-linear equation
between the energy use and the service factor.
Round the service-adjusted energy use to the nearest kWh.
Service-adjusted Energy Use, Treated Case (kWh/installation/year)
The "service-adjusted energy use, treated case" refers to the average annual energy use of the
installed units adjusted to the reference conditions.
One possible calculation methodology for the "service-adjusted energy use, treated case" is as
follows:
1. Identify which weather-related factors (e.g. temperature, wind speed, insolation, etc.)
affect the amount of energy use for the measure.
2. Determine the long-run average values for the weather-related factors that affect the amount
of energy use.
3. Note the level of these weather-related factors during the period in which the treated group
is operating.
Page 24
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First Program Year: "Monitoring Path INSTRUCTIONS
4. If weather-related factors do not affect the measure or if the conditions during the operation
of the treated case are within 10 percent of the long-run average, then
.
Semce-Adjusted Energy Use, _ Energy Use, Treated Case
= *Wh/insta..ation/year)
S. If weather-related factors do affect the measure and the conditions during the operation of
the treated case differ from the long-run average by more than 10 percent, then you must
develop a mathematical relationship, between energy use and the relevant weather-related
factors. Also, you must note such service adjustments on Attachment C. Using the values
of the weather-related factors at the reference conditions, the service-adjusted average
energy use is thus calculated:
Service-Adjusted Energy Use, _ f(§)
(kWh/installation/year)
where .
S = set of weather-related variable(s) affecting energy usage.
The effect of a service factor on energy use may be a simple linear relationship. The
equation for f(S) would thus appear as follows:
f(S) * a + P x (Level of service factor)
Linear relationships may also be incorporated through the use of ratios:
Level of weather-related factor at
f{S) = Energy Use, Treated Case reference conditions
(kWh/installation/year) Level of weather-related factor at
treated case conditions
If the relationship does not fit a linear pattern, then you must develop a non-linear equation
between the energy use and the weather-related service factor.
Round the service-adjusted energy use to the nearest kWh.
Page 25
-------
INSTRUCTIONS.
First Program Year:. Monitoring Path
Step 16: Service-Adjusted Energy Savings (MWh)
Hie difference between die average energy use of the treated case and the untreated case is the annual
average energy savings for an installed measure. However, the energy savings value must also
account for die number of installations employed and the length of time each installation is in
operation.
The calculation procedures for the service-adjusted energy savings can vary depending upon the
circumstances.
One possible calculation methodology for the "service-adjusted energy savings" is as follows:
1. Calculate die average annual energy savings.
Average Annual Energy
Savings
(kWh/installation/year)
Service-Adjusted
Energy Use,
Untreated Case
(kWh/installation/year)
Service-Adjusted Energy
Use, Treated Case
(kWh/instaUation/year)
2. Part-year savings are to be pro-rated based on monthly installations during die year.
Attachment A must be completed and submitted in order to document die number of
installations installed each month, if a measure is installed on any day of a month, then
it may be credited for saving energy the entire month. If all installations are in place for
die same number of months, then
Service-Adjusted
Energy Savings
No. or
Installations
Number
of Months
in Operation
12
Average Annual
Energy Savings
3. If die installations become operational during different months of the year, die amount of
savings must be adjusted to reflect die actual duration. The energy savings for each monthly
grouping of installations must be determined and then summed. "Service-Adjusted Energy
Savings" can then be calculated from the following general equation:
Service-Adjusted
Energy Savings
Average
Annual
Energy
Savings
U
Average
Annual
,_, Savings
Average
Annual
Energy
Savings
Page 26
-------
First Program Year: Monitoring Path INSTRUCTIONS
where
a = numberof installations installed and beginning operation in January
b = number of installations installed and beginning operation in February
1 = number of installations installed and beginning operation in December.
Round the result to the nearest tenth of a MWh.
Step 17: Gross-to-Net Conversion Factor
The gross-to-net conversion factor is used to convert the calculated "service-adjusted energy
savings" value to a "net energy savings" value. "Net energy savings" refers only to savings that
occurred as a direct result of the conservation program; savings that would have occurred without
the utility program (e.g., "free-rider" effects) are to be eliminated. The type of comparison case
selected determines whether such effects have been eliminated. Thus, the type of comparison case
also determines the value of the gross-to-net conversion factor.
1. If the type of comparison case eliminates the effect of those who would have undertaken
the measure without the program, then net energy savings is equal to the service-adjusted
energy savings. Types of comparison cases which eliminate this effect include:
• Energy use of untreated and treated cases both before and after installation of the
conservation measure (Figure 7), and
• Energy use of the untreated and treated cases after the installation of the conservation
measure (Figure 8).
If the comparison case is one of these types, then
Gross-to-Net Conversion Factor = 1.0
2. If the comparison case does not eliminate the effect of those who would have undertaken
the conservation measure without the program, then the applicant must calculate the gross-
to-net conversion factor. Such gross-to-net conversion factors can be determined through
market research, surveys or inspections of non-participants.
Types of comparison cases which do not eliminate effects such as "free-riders" include:
• Energy use of the energy conservation measure both before and after installation
(Figure 9), and
Page 27
-------
INSTRUCTIONS
First Program Year: Monitoring Path
* Energy ust with the energy conservation measure turned on and energy use with the
old device turned on (Figure 10).
Documentation for Gross-to-Net Conversion Factor
If the comparison case selected does not eliminate the effect of those who would have undertaken
the conservation measure without the program, documentation supporting the value of the gross-
to-net conversion factor must be submitted with the verification form. This attachment must include
the basis and applicability of the conversion factor.
If the comparison case eliminates the effect of those who would have undertaken the conservation
measure without the program, mark the appropriate box. In this case, the gross-to-net conversion
factor is 1.0 and no additional documentation is necessary.
Step 18: Net Energy Savings (MWh)
Net energy savings can then be calculated from the following equation:
Net Energy
Savings
Service Adjusted
Energy Savings
(Step 16)
Gross-to-Net
Conversion Factor
(Step 17)
Round the net energy savings to the nearest tenth of a MWh.
Page 28
-------
Subsequent Years
INSTRUCTIONS
Part 3. Subsequent Years
Savings may be claimed as long as the measure can
be expected to perJbrm^::^^/;usejW^life^a
conservation measure is the rr^ian}ength:.
The portion of the measure'
subsequent year savings2:iffilf& summarized
extent savings may be claimed for each different
calculation path. A further discussion of subsequent
year savings is found on page 18 of the Conservation
Verification Protocols.
A list of lifetimes for the most common conservation
measures are provided in Appendix 1. If the lifetime
ofameasure is not listed, thenyou must estimate the
lifetime. If the program includes a group of measures
with differing lifetimes, then a weighted average of
the useful lifetimes is required. The useful life is
weighted according to each individual measure's
percentage of the total energy savings.
Table 3
Allowable Subsequent Year Savings
Subsequent Year
Calculation Method
Default Path
Inspection Path,
Active Measure
Inspection Path,
Passive Measure*
Monitoring Path,
Average of
Measurements
Monitoring Path,
Monitoring
Length of Time Savings
May Be Claimed
Half the useful life of the
measure
Half the useful life of the
measure
Entire useful life of the
measure
Entire useful life of the
measure
No limit (i.e., for as long as
savings can be measured)
*A "passive measure" is a measure which can be reasonably
effected to remain in place and perform to first-year savings level*
without active maimtnancf or operation. Examples of passive
measures include: building shell insulation, pipe insulation, and
window improvements.
Page 29
-------
INSTRUCTIONS
Subsequent Years: Inspection or Default Path
A. Inspection or Default Path (Steps 19-23)
'^^^^^^jono^^^gmi^^ns^^lms--
>.Z£ii^fiii8^^&^mi*m»^
-------
Subsequent Years: Inspection or Default Path INSTRUCTIONS
Step 22: Method of Subsequent Year Calculation
If monitoring is not done in a subsequent year, two calculation methods are available: the inspection
path and the default path. Enter either "inspection1* or "default" for the method of subsequent year
calculation. The inspection path implies that the installations or a representative sample of the
installations have been surveyed to ensure proper operation. If no monitoring or inspection is done,
the utility may still claim some savings through a default value. If the default path is used, though,
less savings can be realized than with the inspection path. . •
Step 23: Net Energy Savings (MWh)
Inspection Path
If the inspection path is used for the subsequent year and the measure is not considered a "passive
conservation measure," 75% of the first year savings may be claimed. For "passive conservation
measures" the utility may claim 90% of the first year savings.
The inspection must confirm mat the conservation measures are both present and operating properly
in the subsequent years. If the inspection reveals that some installations are not fully operational,
then a proportional adjustment must be made using the fraction of installations not operational. A
measure is considered fully inoperative if less than half of the first year savings are achieved.
Energy savings determined by the inspection path are calculated as follows for "active measures":
Net Energy _ .. First Year Savings
Savings (MWh)
-------
INSTRUCTIONS
Subsequent Years: Monitoring Path, Monitoring
B. Monitoring Path, Monitoring (Steps 24 - 32)
and actual
r.: Savings
,;.;. 7-T- :.v7v :..': O;.::X.:.«?-'-T:.T -.y,-.5>;:;. ."..--.->.;..-;:;-.v.y, -j*;.--:. ...•,>: ..:,:.•-> ..-,-•-;•.-;•**.,-*•,, , •,.
-------
Subsequent Years: Monitoring Path. Monitoring ~ INSTRUCTIONS
Step 28: Energy Use
Energy Use, Untreated Case (KWh/installation/year)
The energy use of the untreated case does not need to be re-calculated in a subsequent year if die
value was measured previously. Thus, the first year value for the energy use of the untreated case
may be used in all subsequent years. You may re-calculate the value if you would like, however.
If you are re-calculating this value, follow the instructions in Step 14.
Energy Use, Treated Case (kWh/installation/year)
Follow the instructions in Step 14 to calculate the energy use of the treated case.
Step 29: Service-Adjusted Energy Use, Untreated and Treated Cases
(kWh/installation/year)
Follow the instructions in Step 15 to calculate the Service-Adjusted Energy Use of the untreated
and treated cases.
Step 30: Service-Adjusted Energy Savings (MWh)
Follow the instructions in Step 16 to calculate the Service-Adjusted Energy Savings.
Step 31: Gross-to-Net Conversion Factor
Follow the instructions in Step 17 to determine the gross-to-net conversion factor.
Documentation for Gross-to-Net Conversion Factor
If you are calculating a new gross-to-net conversion factor and the comparison case does not
eliminate "free-rider" effects, documentation supporting the value for the gross-to-net conversion
factor must be submitted with the verification form. This attachment must include the basis and
applicability of the conversion factor.
If the comparison case eliminates the effect of free-riders, mark the appropriate box. In this case,
the gross-to-net conversion factor is 1.0 and no additional documentation is necessary.
If the documentation was previously submitted, mark the appropriate box. In this case, no
additional documentation is necessary.
Page 33
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INSTRUCTIONS
Subsequent Years: Monitoring Path, Monitoring
Prr
Step 32: Net Energy Savings (MWh)
;n2S i
Net Energy Savings can then be calculated fromrthe following equation:
Net Energy
Savings
Service Adjusted Gross-to-Net
Energy Savings . x Conversion Factor
(Step 30) (Step 31)
Round the net energy savings to the nearest tenth of a MWh.
Page 34
-------
Subsequent Years: Monitoring Path, Average
INSTRUCTIONS
C. Monitoring Path, Average of Measurements (Steps 33 - 38)
Complete this section only if the group of installations
are in a subsequentyear of operation and at least two
previous subsequent years havrbeen monitored. In
this step, the average of the final two monitored
subsequent years is used for the value of the net
energy savings. However, the utility can elect tip
continue monitoring and thus use steps 24-32 for the
subsequentyear. v |:
Step 33: Savings Year (Year)
The savings year refers to the year for which
savings are being claimed for the particular
group of installations. For instance, if in
1996 the applicant is applying for credit
based upon conservation achieved in 1995,
then the savings year is 1995.
Figure 13
Average of Measurements
Calculation Path
Energy Savings, Monitored 1
Subsequent Year No. 1 1
4
Energy Savings, Monitored 1
Subsequent Year No. 2 1
Average the Two Values
1
Net Energy Savings 1
Multiple years of savings may be claimed for a measure but only after the savings have actually
been achieved. Each year should be listed separately.
Step 34: Type of Measure or Program
The "Type of Measure or Program" refers to a descriptive name associated with the energy
conservation measure or program. The terms used for a "Type of Measure or Program" during
a subsequent year should be identical to the terms used in the measure's or program's first year of
operation.
Step 35: First Program Year Savings (Year and MWh)
Enter the year in which the group of installations were first in operation. Also, enter the amount
of energy savings that was calculated for the first year. The value should be rounded to the nearest
tenth of a MWh. The savings for the first year may have been determined by either monitoring
or a stipulated equation.
Step 36: Monitored Subsequent Year No. 1, Net Energy Savings (Year and MWh)
In order to use an average of monitored energy savings for subsequent years, two monitored years
after the first year of operation are required. Again, the savings for the first program year of the
measure may have been determined by either monitoring or a stipulated equation.
Page 35
-------
INSTRUCTIONS
Subsequent Years: Monitoring Path. Average
The final two years in which monitoring occurred are to be used for averaging purposes, since these
values are most representative of future savings. Enter the year in which the next to last monitored
year took place for the group of installations. Also, enter the amount of energy savings that was
calculated for that year. :
Round to the nearest tenth of a MWh.
Step 37: Monitored Subsequent Year No. 2, Net Energy Savings (Year and MWh)
Enter the final subsequent year in which the utility monitored energy savings. Also, enter the
amount of energy savings that was calculated for that year.
Round to the nearest tenth of a MWh.
Step 38: Net Energy Savings (MWh)
The final two monitored years are averaged to derive subsequent year energy savings. This value
can then be used for the remainder of the measure's physical life. Thus, net energy savings are
calculated as follows:
Net Energy
Savings (MWh)
Monitored Subsequent
Year No. 1,
Net Energy Savings (MWh)
Monitored Subsequent
Year No. 2,
Net Energy Savings (MWh)
Round this value to the nearest tenth of a MWh.
Page 36
-------
Additional Information . INSTRUCTIONS
Part 4. Additional Information
Although not required for submittal, the following items should be kept on record:
1. For savings calculated through the stipulated savings path, the type and power rating
for both the new and replaced units.
2. For all calculation paths, the names and locations of the participating customers.
Submission Instructions
Submit the Conservation Verification Form to the following address:
U.S. ENVIRONMENTAL PROTECTION AGENCY
ACID RAIN DIVISION 6204J
ATTN: CONSERVATION VERIFICATION
401 M STREET, SW
WASHINGTON, DC 20460
Paperwork Burden Estimate
The burden on the public for collecting and reporting information under this request is
estimated at 32 hours. Send comments regarding this collection of information, including
suggestions for reducing the burden, to: Chief, Information Policy Branch (PM-223), U.S.
Environmental Protection Agency, 401 M Street, SW, Washington, D.C. 20460; and to:
Paperwork Reduction Project (OMB#2060-0258), Office of Information and Regulatory
Affairs, Office of Management and Budget, Washington, D.C. 20503. Do not send your
forms to these addresses; see submission instructions, above.
Page 37
-------
INSTRUCTIONS.
Attachment Instructions
Attachment Instructions
Attachment A - Schedule of Installations
Attachment A is to be completed only for a group of installations' first calendar year of operation.
Part-year savings are to be pro-rated based on monthly installations during the year. If a measure
is installed on any day of a month, then it may be credited for saving energy the entire month.
The "Name of Measure or Program" listed must be identical to that listed in the calculations for
the first year net energy savings. Enter the number of installations installed and beginning operation
in the noted month.
Attachment B - Statistical Data
Attachment B must be completed whenever monitoring is the chosen verification path. The service-
adjusted energy savings must meet a 75 % confidence level in order to receive credit for the savings.
For large sample sizes (30 or greater), determine if the 75% confidence level is achieved using the
procedures in Figure 14. For smaller sample sizes, use the procedures in Figure 15.
If you are unable to use either the "large-sample procedures" or the "small sample procedures"
because the stated assumptions do not apply, then you must find the appropriate non-parametric
procedures to ensure that a 75% confidence level is met.
"Samples" refer to a representative selection of both the treated and untreated cases.
Large-Sample Procedures (see Figure 14)
Use the procedures for large samples if the following assumptions apply:
1. The samples are randomly and independently selected from the population.
2. The sample sizes are large enough so that the service-adjusted energy use values of each
group have approximately normal sampling distributions. Also, the sample sizes are large
enough so that the standard deviation of the samples provide good approximations of the
populations. Sample sizes of 30 or more for both groups will generally satisfy this
requirement.
Small-Sample Procedures (see Figure 15)
Use the procedures for small samples if the following assumptions apply:
1. Both sampled populations have relative frequency distributions that are approximately
normal.
Page 38
-------
Attachment instructions • ATTACHMENT INSTRUCTIONS
2. The population variances are equal.
3. The samples are randomly and independently selected from the populations.
The "Name of Measure or Program" listed must be identical to that listed in the part of the form
where the value for the net energy savings is shown.
The "Size of Groups" for the untreated and treated cases refers to the total number of installations
in each case. Thus, the "Size of Groups" represents the population size for the untreated and treated
cases.
The "Sample Size" for the untreated and treated cases refers to the number of installations which
were actually monitored from the population.
The "Standard Deviation" for the untreated and treated cases refers to the standard deviation of the
service-adjusted energy use for each case. Note that the standard deviation is to be calculated from
an energy use value after service adjustments are made. Standard deviation is defined by the
following equation:
Sample
Standard =
Deviation (n -1)
where
n — sample size
x, = service-adjusted energy use
x = average service-adjusted energy use
The "Frequency of Data Collected" refers to how often energy usage measurements were taken.
Possible frequencies of data collection include: Hourly, daily, weekly, etc.
The "Period of Evaluation" refers to the dates over which sampling took place. Sampling must
take place during all periods in which conditions affecting energy usage may differ. Thus, a
representative "Period of Evaluation" should account for seasonal usage variations. Examples of
evaluation periods include:
•9/1,11/15,1/15,4/1,6/15
• 1/1 - 1/31, 4/1 - 4/30, 7/1 - 7/31, 10/1 - 10/31
• 1/1 - 12/31
Page 39
-------
INSTRUCTIONS
Attachment Instructions
Figure 14
Large-Sample Procedures
To determine if the service-adjusted energy savings meets the requirement of a 75% confidence
level for a large sample size (sample > 30), complete the following steps. The following graphic
displays this calculation for the 75% confidence level:
Rejection region
fArea » .25
.= .675
.675
1. Define null hypothesis.
where
u,, = average service-adjusted energy use for the untreated case
U2 s= average service-adjusted energy use for the treated case
D0 =s claimed service-adjusted energy savings per installation
2. Define alternative hypothesis.
3. Calculate the z-score.
where
s, = standard deviation of the service-adjusted energy use for the untreated case
s, - standard deviation of the service-adjusted energy use for the treated case
n, = sample size for the untreated case
n, = sample size for the treated case
4. Test the null hypothesis.
If z > .675, then reject the null hypothesis.
By rejecting the null hypothesis, the sample has met the 75% confidence level. If you cannot
reject the null hypothesis, you have not met the required confidence level and will have to try
a smaller value for D0.
Page 40
-------
Attachment Instructions
ATTACHMENT INSTRUCTIONS
Figure 15
Small-Sample Procedures
To determine if the service-adjusted energy savings meets the requirement of a 75%
confidence level for a small sample size, complete the following steps:
1. Define null hypothesis.
where
= D
H, = average service-adjusted energy use for the untreated case
Hj - average service-adjusted energy use for the treated case
D, — claimed service-adjusted energy savings per installation
2. Define alternative hypothesis.
3 . Calculate the t statistic .
where
s, = standard deviation of the service-adjusted energy use for the untreated case
Sj = standard deviation of the service-adjusted energy use for the treated case
nt=sample size for the untreated case .
tij=sample size for the treated case
4. Determine t ^ from a t statistic table (see table 4 in instructions), based upon the value
for the degrees of freedom.
Degrees of freedom = n, + n, - 2
5. Test the null hypothesis.
If t > tjj. then reject the null hypothesis.
By rejecting the null hypothesis, the sample has met the 75 % confidence level. If you cannot
reject the null hypothesis, you have not met the required confidence level and will have to
try a smaller value for D0.
Page 41
-------
INSTRUCTIONS
Attachment Instructions
Table 4
T Statistics for 75% Confidence Level
Degrees of Freedom
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
. 17
18
19
20
21
22
23
24
25
26
27
28
29
30
40
60
120
CO
w
1.000
.816
.765
.741
.727
.718
.711
.706
.703
.700
.697
.695
.694
.692
.691
.690
.689
.688
.688
.687
.686
.686
.685 .
.685
.684
.684
.684
.683
• .683 .
.683
.681
.679
.677
.674
Page 42
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Attachment Instructions. - ATTACHMENT INSTRUCTIONS
Attachment C - Service Adjustments
Attachment C must be completed whenever monitoring is the chosen verification method and
service adjustments are deemed necessary. Monitored energy use must be adjusted to account for
the effect of service-related factors. Service conditions include such factors as degree-days, indoor
temperature, operating hours, conditioned floor area, production rate, etc.
The "Name of Measure or Program" listed must be identical to that listed in the calculations for
the net energy savings. .
For purposes of Attachment C, the applicant must only mark with an "X" those service-related
factors which affect the energy use. If a service-related adjustment is used and is not one of the
listed adjustments, then applicant must name the adjustment in the column entitled "other."
Attachment D - Multiple Measure Programs
Use Attachment D only if several types of measures are combined for purposes of calculating
savings. Also, Attachment D only needs to be completed for the group of installations' first year
of operations.
The "Name of Measure or Program" listed must be identical to that listed in the calculations for
the net energy savings.
"Measure" refers to the name of the individual measure in the conservation program. Use the terms
given in Appendix 1 (as reprinted from 40 CFR Part 73), if such terms are appropriate. If the term
is not listed in Appendix 1 but meets the requirements of 40 CFR Part 83.81 (a), then list the measure
using an appropriately descriptive term.
Page 43
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INSTRUCTIONS
Attachment Instructions
ul Ul "5
- -•» 3
•*« S
Page 44
-------
Conservation Verification
Form
Form
Attachment A: Schedule of Installations
Attachment B: Statistical Data
Attachment C: Service Adjustments
Attachment D: Multiple Measure Programs
-------
-------
United States
Environmental Protection Agency
Acid Rain Program
OMB No. 206O-O258
Expires 1-31-36
Conservation Verification
Pagel
For more information, see instructions and refer to 40 CFR 73.82(c)(2)
This submission is: D New [~| Revised
Page
Part 1: General Information
STEP1
Identify the applicant
Utility Name
State(s)
STEP 2
Enter information for the
person completing this form
Name
Phone
STEP 3
Sum the total energy
savings from Steps 10.
18, 23, 32. and 38
MWh
STEP 4
Read the certification and
sign find date
I certify under penalty of taw that I have personally examined, and am familiar'with, the statements and
information submitted in this document and all its attachments. Based on my inquiry of those individuals
with primary responsibility for obtaining the information, I certify that the statements and information ara to
the bast of my knowledge and belief true, accurate, and complete. I am aware that there are significant
penalties for submitting false statements and information or omitting required statements and information,
including the possibility of fine or imprisonment.
Name of Certifying Official
Title
Signature
Date
EPA Form 761O-11 (3-93)
-------
Verification - Pag« 2
[THIS PAGE INTENTIONALLY LEFT BLANK]
EPA Form 7810-11 (3-93)
-------
Utility Name (from Step 1)
Verification - Page 3
Page
Part 2: First Program Year
A. STIPULATED SAVINGS
PATH
Complete Section A, Steps 5 through 10, only if using the stipulated savings path, I.e.
calculations based upon standard equations, for the group of installations first year of operation.
If you have more than one measure, or are reporting for more than one year, use table on Page 4,
Alternatively, you may provide your own summary table of the data requirements.
STEPS
Enter the year for which
savings are being claimed
STEP 6
Enter the descriptive name
of the measure or program
STEP?
Mark the appropriate
boxlas) and include
documentation
| j I hove included Attachment A, a summary of installation dates.
I I If a measure is not one of listed stipulated measures, I have included the calculations for the gross
^—^ energy savings along with a description of any necessary assumptions.
STEP 8
Enter the gross energy
savings (MWh). Round
result to the nearest
tenth of a MWh
MWh
STEP 9
Enter the gross-to-net
conversion factor used to
convert gross energy
savings to net energy
savings and mark the
appropriate box
Q I have used a standard gross-to-net conversion factor (See Table 1 in instructions).
[ j I have calculated my own gross-to-nei conversion factor and have included documentation supporting
1—' the value (see instructions).
STEP 10
Enter the net energy
savings (multiply Step 8 by
Step9). Round to the
nearest tenth of a MWh
MWh
EPA Form 7610-11 (3-93)
-------
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-------
B. MONITORING PATH
STEP 11
Enter the year for which
savings are being claimed
STEP 12
Enter the descriptive name
of'the measure or program
Utility Name (from Step 11
Verification - Page 5
D-D
Page
Complete Section B, Steps 11 through 18, only If using the monitored path. I.e. a
measurement-based comparison of energy use with and without the measure, for the group of
installations first year of operation. If you have more than one measure, or are reporting for more
then one year, use table on Page 6. Alternatively, you may provide your own summary table of
the data requirements.
STEP 13
Mark the appropriate
box(es) and include
documentation
STEP 14
Enter the energy use for the
untreated and treated cases
(kWh/installation/
year). Round result to the
nearest kWh
r~] I have included Attachment A, a summary of installation dates.
Q t have included Attachment B, a summary of statistical data.
[""I I have included Attachment C, a summary of service adjustments (leave blank if no service adjustments
— are necessary).
Dlf multiple measures are combined for monitoring, I have included Attachment 0
(leave blank if not combining multiple measures).
Untreated Case Treated Case
kWh/install./yr
kWh/install./yr
STEP 15
Enter the service-adjusted
energy use for the
untreated and treated cases
(kWh/installation/
year). Round result to the
nearest kWh
Untreated Case
Treated Case
kWh/install./yf
kWh/mstall./yr
STEP 16
Enter the service-adjusted
energy savings {MWh).
Round result to the nearest
tenth of a MWh
MWh
STEP 17
Enter the gross-to-net
conversion factor used to
convert gross energy
savings to net energy
savings and mark the
appropriate box
I I I have included documentation supporting the value of the gross-to-net conversion factor.
r~j A calculated gross-to-net conversion factor is not necessary due to the design of the untreated group
(see instructions)
STEP 18 . .
Enter the net energy
savings (multiply Step 16
by Step 17). Round to the
nearest tenth of a MWh
MWh
EPA Form 7610-11 (3-93)
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Utility Name (from Step 11
Verification -
D-
Pag.
Part 3: Subsequent Years
A. INSPECTION OR
DEFAULT PATH
Complete Section A, Steps 19 through 23. only if the group of installations are in a subsequent
year of operation and the inspection or default paths are used to calculate savings. If you have
more than one measure, or are reporting for more than one year, use table on Page 8.
Alternatively, you may provide your own table of the data requirements.
STEP 19
Enter the year for which
savings are being claimed
STEP 20
Enter the descriptive name
of the measure or program
STEP 21
Enter the year and amount of
net energy savings (MWh)
calculated for the group of
installations first year of
operation. Round to the
nearest tenth of a MWh
Year
Net Energy Savings
MWh
STEP 22
Enter either "inspection" or
"default" as the method for
calculating the subsequent
year energy savings
STEP 23
Enter the net energy
savings. See Instructions
for calculation procedures.
Round to the nearest tenth
of a MWh
MWh
EPA Form 7610-11 (3-93)
-------
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Utility Name (from Step 1)
Verification - Page B
D-D
Page
B. MONITORING PATH,
MONITORING
STEP 24
Enter the year for which
savings are being claimed
Complete Section B, Steps 24 through 32, only if the group of installations are in a subsequent
year of operation and actual monitoring is conducted for the savings year. If you have more than
one measure, or are reporting for more than one year, use table on Page 10. Alternatively, you
may provide your own summary table of the data requirements.
STEP 25
Enter the descriptive name
of the measure or program
STEP 26
Mark box(es) and include
documentation
STEP 27
Enter the year and amount of
net energy savings IMWh)
calculated for the group of
installations first year of
operation. Round to the
nearest tenth of a MWh
Q I have included Attachment B. a summary of statistical data.
| [ I have included Attachment C, a summary of service adjustments (leave blank if no service adjustments
are necessary).
Year
Net Energy Savings
MWh
STEP 28
Enter the energy use for the
untreated and treated cases
for the subsequent year
(kWh/lnstallation/
year). Round result to the
nearest kWh
STEP 29
Enter the service-adjusted
energy use for the
untreated and treated cases
for the subsequent year
(kWh/instaJlation/
year). Round result to the
nearest kWh
Untreated Case
Treated Case
kWh/install./yr
kWh/install./yr
Untreated Case
Treated Case
kWh/install./vr
kWh/install./yr
STEP 30
Enter the service-adjusted
energy savings (MWh).
Round result to the nearest
tenth of a MWh
MWh
STEP 31
Enter the gross-to-net
conversion factor used to
convert gross energy
savings to net energy
savings and mark the
appropriate boxes
[_J I have included documentation supporting the value of the gross-to-net conversion factor.
| | I submitted the documentation for the gross-to-net conversion factor in a previous year end the value of
— the factor has not changed.
| | A calculated gross-to-net conversion factor is not necessary due to the design of the untreated group.
STEP 32
Enter the net energy
savings {multiply Step 30
by Step 31 1. Round to the
nearest tenth of a MWh
MWh
EPA Form 7610-11 (3-93)
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Utility Name (from Step 11
Verification - Page 11
Page LJofl—I
C. MONITORING PATH,
AVERAGE OF
MEASUREMENTS
Complete Section C, Steps 33 through 38, only if the group of Installations are in a subsequent
year of operation and the average of the final two monitored subsequent years is used for the net
energy savings value. If you have more than one measure, or are reporting for more than one year,
use table on Page 12. Alternatively, you may provide your own summary of the data
requirements. •
STEP 33
Enter the year for which '
savings are being claimed
STEP 34
Enter the descriptive name
of the measure or program
STEP 35
Enter the year and amount of
net energy savings {MWh)
calculated for the group of
installations first year of
operation. Round to the
nearest tenth of a MWh
Year
Nat Energy Savings
MWh
STEP 36
Enter the year and amount of
net energy savings (MWh)
calculated for the group of
installations next to last
monitored year. Round to the
nearest tenth of a MWh
Year
Net Energy Savings
MWh
STEP 37
Enter the year and amount of
net energy savings {MWh)
calculated for the group of
installations final monitored
year. Round to the nearest
tenth of a MWh
Year
Net Energy Savings
MWh
STEP 38
Enter the net energy
sayings (the average of
Steps 36 and 37). Round
to the nearest-tenth of a
MWh
MWh
EPA Form 7610-11 (3-93)
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Sample Verification Calculations
Example 1: Exit Sign Replacement
Example 2: Commercial Lighting Retrofit
Example 3: Residential Water Heating
-------
-------
Example 1 SAMPLE VERIFICATION CALCULATIONS
Example 1: Exit Sign Light Replacement
This example highlights the following points:
• First-year savings calculated by the stipulated savings path
• Initial installations put into place over several months
• Subsequent-year savings calculated by the default path .
This example is intended only to demonstrate the concepts in the Conservation Verification
Protocols. Many other monitoring designs and verification techniques are possible for this type
of program. A utility should select the methods that best suit the individual situation.
Program Description
The utility offered rebates to owners of commercial buildings who replaced exit signs illuminated
by incandescent lights with signs illuminated by fluorescent lights.
Gross Energy Savings
The utility surveyed each building to determine the original power consumption of the exit lights
and the fraction not operating. The 154 buildings participating in the program replaced
incandescent lights with fluorescent lights.
The utility chose to claim savings through the stipulated savings path. Thus, the gross energy
savings is determined through the following standard equation:
Gross
Energy = 8760 hours/year x (P..J-P.J
Savings
where . ..'"''
P^ = .03 kW/light (or .015 kW/light if only one lamp is illuminated on original exit light)
Pam = power consumption of replacement exit light (kW)
The power consumption of the high efficiency replacement exit lights in this example was .007 kW
per exit sign. Thus, the gross energy savings for one exit sign, as calculated by the above equation,
is 201 kWh per year.
The sum of the gross energy savings for each new exit sign in each building gives the total gross
energy savings. However, the first-year savings is complicated because the retrofits occurred over
the whole year and not every building enjoyed a full year's use of the new exit lights. For this reason,
the savings must be adjusted to reflect the number of months in which the new exit signs were
installed and operating. Attachment A gives a schedule of the exit light installations during the
savings year.
Page 49
-------
SAMPLE VERIFICATION CALCULATIONS
Example 1
For example, buildings retrofitted in April are credited with 9 months of savings:
Partial-Year Gross Energy _201kWh x ^ x Number of Exit Signs
Savings for April Installation ~ 12 Replaced in April
Based upon die installation schedule given in Attachment A, the total gross energy savings is
calculated as follows:
RtptactOMU
Gross Energy _ ^» F Partial-Year Gross 1
Savings Z*A I Energy Savings J
i»i
= 201 kWh x (1248 + 4r- x 986 + 4f-x 882 + ... +-L- x 226)
• 1,442,443 kWh
« 1.442.4MWH
Thus, after determining the number of replaced exit signs in each of the 154 buildings and the
number of months each new group of exit signs were in operation, the gross energy savings was
found to be 1442.4 MWh.
First- Year Net Energy Savings
The net energy savings are obtained by multiplying the gross energy savings by the gross-to-net
conversion factor. This utility did not perform a market study to determine the fraction of non-
participating buildings mat replaced exit signs. The utility instead used the measure's default gross-
to-net conversion factor of 0.6. The net energy savings for this program's first year is:
Net Energy
Savings .
= Gross Savings Energy x 0.6
= 1442.4 MWh x 0.6
= 865.4 MWh
Subsequent-Year Net Energy Savings
The utility chose to use the default path to calculate subsequent-year savings. In this case, the default
allows only 50% of the savings for half of the unit's physical lifetime. The subsequent-year savings
are:
Subsequent-Year
Net Energy Savings
First- Year Net
Energy Savings
x Q 5
865.4 MWh x 0.5
432.7 MWh
Exit lights have an estimated lifetime of 10 years. Thus, savings can be claimed for a total of five
years. The calculated 432.7 MWh of savings may claimed for a total of four subsequent-years.
Page 50
-------
re Pother Ser i/' 0*4
Utility Name (from Step 1 >
Verification - Pago 3
Pago ISU of I_J
Part 2: First Program Year
A. STIPULATED SAVINGS
PATH
Complete Section A, Steps 5 through 10, only if using the stipulated savings path, i.e.
calculations based upon standard equations, for the group of installations first year of operation.
If you have-more than one measure, or are reporting for more than one year, use table on Page 4.
Alternatively, you may provide your own summary table of the data requirements.
STEPS
Enter the year for which
savings are being claimed
STEPS
Enter the descriptive name
of the measure or program
STEP 7
Mark tile appropriate
box(es) and Include
documentation
D
I have included Attachment A, a summary of installation dates.
If a measure is not one of listed stipulated measures, I have included the calculations for the gross
energy savings along with a description of any necessary assumptions.
STEP 8
Enter the gross energy
savings (MWh). Round
result to the nearest
tenth of a MWh
MWh
STEP 9.
Enter the gross-to-net
conversion factor used to
convert gross energy
savings to net energy
savings and mark the
appropriate box
O,
|Xj I have used a standard gross-to-net conversion factor (See Table 1 in instructions).
I j I have calculated my own gross-to-net conversion factor and have included documentation supporting
1— the value (see instructions).
STEP 10
Enter the net energy
savings (multiply Step 8 by
Step 9). Round to the
nearest tenth of a MWh
VI* 5 A-
MWh
EPA Form 7610-11 (3-93)
-------
;
2
2
-------
Public
Utility Name (from Step 1)
Verification - Page 7
Page LfcioflS
Part 3: Subsequent Years
A. INSPECTION OR
DEFAULT PATH
Complete Section A, Steps 19 through 23, only if the group of Installations are in a subsequent
year of operation and the inspection or default paths are used to calculate savings. If you have
more than one measure, or are reporting for more than one year, use table on Page 8.
Alternatively, you may provide your own table of'the data requirements.
STEP 19
Enter the year for which
savings are being claimed
STEP 20
Enter the descriptive name
of the measure or program
STEP 21
Enter the year and amount of
net energy savings (MWh)
calculated for the group of
installations first year of
operation. Round to the
nearest tenth of a MWh
Year
Net Energy Savings
MWh
STEP 22
Enter either "inspection" or
"default" as the method for
calculating the subsequent
year energy savings
Default
STEP 23
Enter the net energy
savings. See instructions
for calculation procedures.
Round to the nearest tenth
of a MWh
MWh
EPA Form 7610-11 (3-93)
-------
SAMPLE VERIFICATION CALCULATIONS
Example 2
Example 2: Commerciaf Lighting Retrofit
This example highlights the following points:
* First-year savings calculated by the monitoring path
* Calculations for service adjustments
• Calculations for achieving a 75% confidence level
• Subsequent-year savings calculated by the monitoring path
This example is intended only to demonstrate the concepts in the Conservation Verification
Protocols. Many other monitoring designs and verification techniques are possible for Ms type
of program. A utility should select the methods that best suit the individual situation.
Program Description
The measure involves replacing existing fluorescent lights in office buildings with more efficient
fixtures and lamps. The precise technology varied with the situation. The utility could have used
the stipulated savings procedure for this measure but felt that it could obtain credit for greater
savings through monitoring.
Measurement Procedures
During 1992, 114 similarly-sized buildings were retrofitted. For each building, the number of
fixtures replaced and the affected lighted floor area were compiled. From the 114 installations, 16
buildings were randomly selected for monitoring. The utility felt that 16 was the necessary sample
size to achieve a 75% confidence level for the estimated energy savings. The untreated case
consisted of the same buildings prior to the retrofit.
In each of these buildings, a data logger was installed on the lighting circuits. (Another technique
would be to measure a sample of each building's circuits). In most cases, the buildings used 277
volts for lighting circuits, so the circuit contained only lighting. Monitoring was undertaken for
one year. Prior to the retrofits, the auditors surveyed the number of non-working lamps and
confirmed that they had been repaired during the retrofit.
Service Adjustments
The utility compiled data on energy use, operating hours, and lighted floor area (seeTable 5, Raw
Data). The utility determined that two principal service factors, "hours of operation" and "lighted
floor area," would affect the energy use of commercial lighting. Thus, the utility adjusted the
energy use for these service factors.
The hours of operation (hours per year) were determined from the data loggers. Changes in lighted
floor area were based on auditors' surveys before and after the retrofit.
Page 54
-------
Example 2 SAMPLE VERIFICATION CALCULATIONS
The reference conditions are the number of operating hours and 1 ighted floor area in the post-retrofit
year. Thus, the service adjustments need to be applied to the pre-retrofit year (i.e. the untreated
case). The energy use in the post-retrofit year (i.e., the treated case) is not adjusted because no
weather-related adjustments are necessary.
The utility used the following relationships to adjust the pre-retrofit energy use:
Hours of Operation ._ Hours of Operation After Retrofit
Adjustment ~ Hours of Operation Before Retrofit
Lighted floor Area __ Floor Area After Retrofit
Adjustment Floor Area Before Retrofit
Thus, based upon the values compiled in the table, the service-adjusted energy use of the untreated
case is calculated as follows:
Service-Adjusted | > Energy Use, x Hours of Operation Floor Area
Energy Use, = | <« Untreated Case Adjustment x Adjustment
Untreated Case
"1
I
J
16
= (198000 kWhx 0.98 x 1.02 +... + 287369x0.94x 1.07)
16
= 182,569 kVVh/installation/year
Service-Adjusted _ Number of x T Service-Adjusted Service Adjusted T|
„ „ . — n ..j. x • Energy Use, - Energy Use. I
Energy Savmgs Bu.ld.ngs L UntreSed Cale TrealS Case J
- 114 x (182569 kWh/install./year • 132068 kWh/install./year)
= 575J.1MWH
All lighting retrofits were installed in January of 1992.
Statistical Analysis
The utility calculated a service-adjusted energy savings of 5757.1 MWh. However, the savings
meeting the 75% confidence level was lower. The allowed savings was calculated using the standard
formula for small samples (see Attachment B instructions).
The mean and standard deviation for service-adjusted energy use values are presented in Table 5.
The utility tested different savings values until the required t-statistic for 75% confidence was
achieved. For the given conditions, the calculated t-statistic must be greater than .683.
(u. - ig • P.
t «
-------
SAMPLE VERIFICATION CALCULATIONS
Example 2
•where,
M
.683, for 30 degrees of freedom
[15 x (72.794 MWh)1 + IS x (51.099
30.
- 3955 (MWh)1
Solve the equation for D0.
.683
5757.1 MWh -D0
3955
5757.1 MWh - .683 x J3955 (MWh)2 x .125
5741.9 MWh
Thus, in order to achieve this t-statistic, the service-adjusted energy savings must be reduced to
5741.9 MWh.
In this case, variations in energy use reduced the savings meeting the confidence requirement. The
utility might have achieved greater allowable savings by using a larger sample or by obtaining more
accurate data on service adjustments so as to reduce the variation in energy savings.
Net Energy Savings «
The comparison case selected was a comparison of each building's energy use before and after
installation of the energy efficient lighting. This comparison case does not account for savings that
would have occurred without the utility program. Therefore, a gross-to-net conversion factor must
be developed to determine the net energy savings.
In a separate study of office buildings in the same service territory, the utility found that 8% of the
customers had independently undertaken some son of lighting efficiency measures during the past
year. While most of the measures were much less extensive than those undertaken in the program,
the utility reasonably concluded that at least 92 % of the activity in the treated buildings was due
to the program. Therefore, the utility used a 0.92 gross-to-net conversion factor.
Net Energy _ Service-Adjusted
Savings Energy Savings
- 5741.9 MWh x 0.92
= 5282.5 MWh
Gross-to-Nel
Conversion Factor
Page 56
-------
Example 2 ! SAMPLE VERIFICATION CALCULATIONS
Subsequent-Year Net Energy Savings
The utility decided to use the monitoring path for estimating subsequent-year energy savings. The
first-year net energy savings as calculated above was for 1992. The utility also monitored the
savings during 1993 and 1994. After 1994 the utility took credit for the average of the estimated
energy savings from 1993 and 1994.
The utility continued to monitor changes in lighting area and operating hours. However, as an
unfortunate consequence of renovation, the data loggers in two buildings were disconnected. Thus,
the sample size was reduced by two buildings.
Using the same calculation procedures as before, the service-adjusted energy savings of the second
program year was found to be 6152.2 MWh. The utility may use the same gross-to-net conversion
factor as calculated in the first year. Thus, the second-year net energy savings is:
Second-Year
Net Energy = 6152.2 MWh x 0.92
Savings
- 5660.0 MWh
The third-year service-adjusted energy savings was likewise monitored and found to be S298.4
MWh.
Third-Year
Net Energy = 5298.4 MWh x 0.92
Savings
= 4874.5 MWh
For savings after the third program year, the utility may claim the average of the second and third
year savings:
Fourth-Year
Net Energy = (S660.0MWh + 4874.5 MWM
Savings 2
= 5267.3 MWh
Useful Lifetime of Measure
The program consisted of two technologies: energy efficient fluorescent lamps and electronic
ballasts. According to the tables in Appendix 2, the stipulated lifetimes for these two technologies
are 5 and 10 years, respectively. Engineering calculations indicated that the lamps were responsible
for about 60% of the savings and the ballasts for 40%. The weighted lifetime is therefore:
Weighted Lifetime = (0.6 x 5 years) -I- (0.4 x 10 years)
= 7 years
Thus, the utility may claim savings from this measure for a total of seven years. The savings claimed
for the fifth, sixth, and seventh years will be 5267.3 MWh.
Page 57
-------
SAMPLE VERIFICATION CALCULATIONS
Example 2
Table 5
Commercial Lighting Retrofit Example
Raw Data
Building
1
2
3
4
5
6
7
8
9
10
1)
12
13
14
15
16
Average
Std. Dev.
Energy Use,
Untreated
Case
(kWh/yeart
198000
222000
171600
247500
184800
118800
318000
891000
96000
79800
148500
171600
185000
93600
166400
285000
173481
70223
Energy Use,
Treated Case
(kWh/year)
152991
163362
133523
189969
168209
93610
213383
64598
66700
67644
109171
120513
165991
67104
126998
209319
132068
51099
Operating
Hour
Adjustment
0.98
0.98 .
0.96
0.98
0.99
0.96
0.99
0.93
0.92
0.96
0.92
0.91
0.94
0.97
0.95
0.94
Lighted
' . Floor
Area
Adjustment
1.02
1.19
1.16
1.10
1.10
1.18
1.02
1.21
1.00
1.08
1.12
1.19
1.01
1.14
1.10
1.07
Service-
Adjusted
Energy Use,
Untreated Case
(kWh/year)
198071
258588
191502
266329 '
199865
134331
323902
100439
88873
83139
152036
186463
174154
103468
172571
287369
182569
72794
Service-
Adjusted
Energy Use,
Treated Case
-------
B. MONITORING PATH
STEP 11
Enter the year for which
savings are being claimed
STEP 12
Enter the descriptive name
of the measure or program
Utility Name (from Step 11
Verification - Page S
Pag* e£l of L£J
Complete Section B, Steps 11 through 18, only if using the monitored path, i.e. a
measurement-based comparison of energy use with-and without the measure, for the group of
installations first year of operation. If you have more than one measure, or are' reporting for more
than one year, use table on Page 6. Alternatively, you may provide your own summary table of
the data requirements.
ffll
Co
m
O. I Lif
STEP 13
Mark tiie appropriate
box(es) and include
documentation
STEP 14
Enter the energy use for the
untreated and treated cases
(kWh/installation/
year). Round result to the
nearest kWh
[2 I Have included Attachment A, a summary of installation dates.
(£<[) I have included Attachment B, a summery of statistical data.
IV] I have included Attachment C, a summary of service adjustments (leave blank if no service adjustments
^~^ are necessary).
[V| If multiple measures are combined for monitoring, I have included Attachment 0
I**1 (leave blank if not combining multiple measures).
Untreated Case
kWh/install./yr
Treated Case
kWh/instalL/yr
STEP 15
Enter the service-adjusted
energy use for the
untreated and treated cases
(kWh/installation/
year). Round result to the
nearest kWh
Untreated Case
Treated Case
kWh/install./yr
kWh/instalL/yr
STEP 16
Enter the service-adjusted
energy savings IMWh).
Round result to the nearest
tenth of a MWh
MWh
STEP 17
Enter the gross-to-net
conversion factor used to
convert gross energy
savings to net energy
savings and mark the
appropriate box
\)Q I have included documentation supporting the value of the gross-to-net conversion factor.
j | A calculated gross-to-net conversion factor is not necessary due to the design of the untreated group
(see instructions)
STEP 18
Enter the net energy
savings (multiply Step 16
by Step 17). Round to the
nearest tenth of a MWh
MWh
EPA Form 7610-11 (3-93)
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Utility Name (from Step 1 >
Verification - Page \ \
Page
loft
C. MONITORING PATH.
AVERAGE OP
MEASUREMENTS
Complete Section C, Steps 33 through 38. only If the group of installations are in a subsequent
year of operation and the average of the final two monitored subsequent years is used for the net
energy savings value. If you have more than one measure, or are reporting for more than one year,
use table on Page 12. Alternatively, you may provide your own summary of the data
requirements.
STEP 33
Enter the year for which
savings are being claimed
STEP 34
Enter the descriptive name
of the measure or program
STEP 35
Enter die year and amount of
net energy savings IMWh)
calculated for the group of
installations first year of
operation. Round to the
nearest tenth of a MWh
Year
Net Energy Savings
, 3
MWh
STEP 36
Enter the year and amount of
net energy savings (MWh)
calculated for the group of
installations next to last
monitored year. Round to the
nearest tenth of a MWh
Year
Net Energy Savings
ma-
MWH
STEP 37
Enter the year and amount of
net energy savings (MWh)
calculated for the group of
installations final monitored
year. Round to the nearest
tenth of a MWh
Year
Net Energy Savings.
MWh
STEP 38
Enter the net energy
savings (the average of
Steps 36 and 37). Round
to the nearest tenth of a
MWh
,3
MWh
EPA Form 7610-11 (3-93)
-------
SAMPLE VERIFICATION CALCULATIONS
Example 3
Example 3: Residential Water Heating Retrofit
This example highlights the following points:
• First-year savings calculated by the monitoring path
• Calculations for service adjustments
• Calculations for measures installed over several months
• Subsequent-year savings calculated by the inspection path
This example is intended only to demonstrate the concepts in the Conservation Verification
Protocols, Many other monitoring designs and verification techniques are possible far this
type of program, A utility should select the methods that best suit the individual situation.
Program Description
The utility sponsored a water heating conservation program. A contractor visited each home
and installed a package of conservation measures including water heater blankets, low-flow
showerheads, and pipe insulation.
Measurement Procedure
The program reached 2,522 homes during 1992, at a rate of about 200 homes per month. The
verification procedure involved comparing the energy use of 40 randomly-selected participating
homes to the energy use of 40 non-participating neighbors. By comparing these two groups,
the utility is seeking to estimate the net energy savings. The energy data are monthly utility
bills for one year. . .
Service Adjustments
The pre-retrofit energy use of the two groups differed by about 3%. This difference may be
due to a range of service-related factors such as duration of showers, amount of dishwasher
usage, etc. The utility did not attempt to quantify these different service conditions. The
utility assumed that this difference in service levels would continue, after the retrofit took place.
The goal is to calculate the energy savings between the two groups at the same level of service.
The following table summarizes the energy use and service-adjusted energy use for both the
treated and untreated cases:
Page 66
-------
Example 3
SAMPLE VERIFICATION CALCULATIONS
Table 6
Residential Water Heating Example - Raw Data
CM*
Untreated
Treated
ENERGY USE
Pre-retrofit,
(kWh/yr/home)
8232
8517
Post-retrofit,
(kWh/yr/home)
SERVICE-ADJUSTED ENERGY USE
Pre-retrofit,
(kWh/yr/home)
Post-retrofit,
(kWh/yr/home)
Service »dj.
Energy' Uee
8485 8517 8779
7975 8517 7975
Standard
Deviation
1244
903
Hie energy use of the treated case (participating homes) is not adjusted. The energy use of the
untreated case (non-participating homes) must be adjusted to the same service conditions as the
treated case.
The comparison used here involves the energy use of the untreated and treated cases both
before and after installation. For this type of comparison, the service-adjusted energy use ^re-
retrofit) of the untreated case is set equal to the pre-retrofit energy use of the treated case.
Service Adjusted Energy Use of
Untreated Case, Pre-retrofit
Energy Use of Treated
Case, Pre-retrofit
8517kWh/yr/home
The adjustment factor of this type of comparison case is the ratio of the two pre-retrofit energy
use values.
Adjustment Factor
Energy Use of Treated
Case, Pre-retrofit
Energy Use of Untreated
Case, Pre-retrofit
8517 kWh/yr/home
8232 kWh/yr/home
= L0346
The utility assumes the .difference in the pre-retrofit service level would continue into future
years. Thus, the service-adjusted energy use (post-retrofit) of the untreated case is calculated
as follows:
Service Adjusted Energy Use
of Untreated Case,
Post-retrofit
_ Adjustment Energy Use of Untreated
~ Factor * Case, Post-retrofit
= 1.0346 x 8485 kWh/yr/home
'- 8779kWh/yr/home
Page 67
-------
SAMPLE VERIFICATION CALCULATIONS
Example 3
Hie average annual energy savings can now be calculated:
Service-Adjusted Energy Use Service-Adjusted Energy Use
- •«*—a* - -ft—GlT
Post-retrofit Post-retrofit
Statistical Analysis
= 8779 kWh/yr/home - 7995 kWh/yr/home
= 804kWh/yr/home
o 0.804 MWh/yr/home
The average annual energy savings calculated above must meet the 75% confidence level
requirement. Since the sample sizes, of the. untreated and.treated cases are sufficiently large,
the utility may use the "large-sample procedures" in the attachment instructions.
To meet the 75% confidence level, the calculated z-score must be greater than z... 0.675.
z =
0*. -
where, .
_ -—
^HI-HJ *
-------
Examples SAMPLE VERIFICATION CALCULATIONS
Service-adjusted _ 0.640 MWh/yr/home x a + 11/12 x 0.640 MWh/yr/home x b + ... +
Energy Savings ~ 1/12 x 0.640 MWh/yr/home x I
= 0.640 [152 + 11/12 x 176 + 10/12 x 165 + 9/12 x 209 + 8/12 x 231
+ 7/12 x 247 + 6/12 x 226 + 5/12 x 258 + 4/12 x 233 + 3/12 x 217
' + 2/12 x 196 + 1/12 x 212] MWh
= 837.4MWH
where
a = number of retrofits installed and beginning operation in January
b = number of retrofits installed and beginning operation in February
1 = number of retrofits installed and beginning operation in December
Net Energy Savings
The monitoring design for this program consisted of measuring the energy use of untreated and
treated cases both before and after installation of the efficiency measures. This comparison case
eliminates the effect of those who would have undertaken the measures without the utility program.
Thus, the gross-to-net conversion factor is 1.0.
Net Energy _ Service-adjusted x Gross-to-Net
Savings ~ Energy Savings Conversion Factor
- 837.4MWhx 1.0
- 837.4 MWh
Subsequent-Year Savings
Subsequent-year energy savings will be evaluated by the inspection technique. A random sample
will be inspected to determine that the measures are present and operating. Energy savings will
be discounted by the number of homes in which the measures have been removed or are inoperative.
In the program's second year, 1993, the inspection showed all measures in proper operating
condition. Thus, the net energy savings for 1993 is:
Subsequent-Year _ o 75 x F'rst-Year Net
Net Energy Savings ' Energy Savings
= 0.75 x 837.4 MWh
= 628.1Mwh
Page 69
-------
SAMPLE VERIFICATION CALCULATIONS
Example 3
Useful Lifetime of Measure
This program involves a package of measures with varying lifetimes. The utility apportioned
the savings through the following engineering estimates:
Meaiure
Percent of
Savings
Useful
Lifetime (Years!
Water Heater Blankets
Low-flow Showerheads
Pipe Insulation
0.5
0.4
0.1
6
4
IS
Weighted Lifetime - (0.5x6 years) + (0.4x4 years) + (0.1x15 years)
= 6.1 years
Thus, the utility may claim savings from this measure for a total of 6.1 years.
Page 70
-------
B. MONITORING PATH
STEP 11
Enter the year for which
savings are being claimed
STEP 12
Enter the descriptive name
of the measure or program
Utility Name (from Step 1)
Verification - Page 5
Page
Complete Section B, Steps 11 through 18, only if using the monitored path. I.e. a
measurement-based comparison of energy use with and without the measure, for the group of
installations first year of operation. If you have more than one measure, or are reporting for more
than one year, use table on Page 6. Alternatively, you may provide your own summary table of
the data requirements.
STEP 13
Mark the appropriate
box(es) and include
documentation
STEP 14
Enter the energy use for the
untreated and treated cases
(kWh/installation/
year). Round result to the
nearest kWh
I have included Attachment A, a summary of installation dates.
|>3 I have included Attachment B, a summary of statistical data.
r~] I have included Attachment C, a summary of service adjustments (leave blank if no service adjustments
— are necessary).
If multiple measures are combined for monitoring. I have included Attachment D
(leave blank if not combining multiple measures}.
Untreated Case Treated Case
o"oO kWh/instatl./vr
77 75"
kWMnstall./yr
STEP 15
Enter the service-adjusted
energy use for the
untreated and treated cases
(kWh/tnstallation/
year). Round result to the
nearest kWh
Untreated Cose . Treated Case
0 / 7y kWh/instBll./yr
/7/O kWhtostall./yr
STEP 16
Enter the service-adjusted
energy savings (MWh).
Round result to the nearest
tenth of a MWh
937.
MWh
STEP 17
Enter the gross-to-net
conversion factor used to
convert gross energy
savings to net energy
savings and mark the
appropriate box
I.
I—I
I I I have included documentation supporting the value of the gross-to-net conversion factor.
A calculated gross-to-net conversion factor is not necessary due to the design of the untreated group
(see instructions)
STEP 18
Enter the net energy
savings (multiply Step 16
by Step 17). Round to the
nearest tenth of a MWh
$37.4
MWh
EPA Form 7610-11 (3-93)
-------
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Utility Name Ifrom Step T>
Verification - Page 7
Pag* HoflZJ
Part 3: Subsequent Years
A. INSPECTION OR
DEFAULT PATH
Complete Section A, Steps 19 through 23, only if the group of installations are in a subsequent
year of operation and the inspection or default paths are used to calculate savings. If you have
more than one measure, or are reporting for more than one year, use table on Page 8.
Alternatively, you may provide your own table of the data requirements.
STEP 19
Enter the year for which
savings are being claimed
STEP 20
Enter the descriptive name
of the measure or program
STEP 21
Enter the year and amount of
net energy savings (MWh)
calculated for the group of
installations first year of
operation. Round to the
nearest tenth of a MWh
Year Net Energy Savings
fln
037> 7 MWh
STEP 22
Enter either "inspection" or
"default" as the method for
calculating the subsequent
year energy savings
STEP 23
Enter the net energy •
savings. See instructions
for calculation procedures.
Round to the nearest tenth
of a MWh
MWh
EPA Form 7610-11 13-93)
-------
-------
Appendices
Appendix 1: List of Qualified Measures
Appendix 2: Useful Lifetimes of Measures
Appendix 3: Reserve Fact Sheet
Appendix 4: Application Form for the Conservation
and Renewable Energy Reserve
Appendix 5: Reprint of Regulation
-------
-------
Appendix 1:
List of Qualified Measures
-------
-------
Appendix 1
List of Qualified Measures
Appendix to Subpart F of 40 CFR 73 - List of Qualified Energy Conservation Measures; Qualified Renewable
Generation, and Measures Applicable for Reduced Utilization
1. Dem^-sideMeaswwAppliaibleforthe Conservation
and Renewable Energy Reserve Program or Reduced
Utilization
The following listed measures are approved as
"qualified energy conservation measures" forpurposes
of the Conservation and Renewable Energy Reserve
Program or reduced utilization qualified energy
conservation plans under §72.43 of this chapter.
Measures not appearing on the list may also be
qualified conservation measures if they meet the
requirements specified in §73.81 (a) of this part.
1.1 RESIDENTIAL
1.1.1 Space Conditioning
Electric furnace improvements (intermittent ignition,
automatic vent dampers, and heating element change-
outs)
Air conditioner (central and room) upgrades/
replacements
Heat pump (ground source, solar assisted, and
conventional) upgrades/replacements
Cycling of air conditioners and heat pumps
Natural ventilation
Heat recovery ventilation
Clock thermostats
Setback thermostats
Geothermal steam direct use
Improved equipment controls
Solar assisted space conditioning (ventilation, air-
conditioning, and desiccant cooling)
Passive solar designs
Air conditioner and heat pump clean and tune-up
Heat pipes
Whole house fans
High efficiency fans and motors
Hydronic pump insulation
Register relocation
Register size and blade configuration
Return air location
Duct sizing
Duct insulation
Duct sealing
Duct cleaning
Shade tree planting
11.2 Water Heating
Electric water heater upgrades/replacements
Electric water heater tank wraps/blankets
Low-flow showerheads and fittings
Solar heating and pre-heat units
Geothermal heating and pre-heat units
Heat traps
Water heater heat pumps
Recirculation pumps
Setback thermostats
Water heater cycling control
Solar heating for swimming pools
Pipe wrap insulation
1.1.3 Lighting
Lamp replacement
Dimmers
Motion detectors and occupancy sensors
Photovoltaic lighting
Fixture replacement •
Outdoor lighting controls
Page 1-1
-------
APPENDIX 1
List of Qualified Measures
1.1.4 Building Envelope
Attic, basement, ceiling, and wall insulation
Passive solar building systems
Exterior roof insulation
Exterior wall insulation
Exterior wall insulation bordering unheated space
(e.g., a garage)
Knee wall insulation in attic
Floor insulation
Perimeter insulation
Storm windows/doors
Caulking/weatherstripping
Multi-glazed inserts for sliding glass doors
Sliding door replacements
Installation of French doors
Hollow core door replacement
Radiant barriers
Window vent conversions
Window replacement
Window shade screens
Low-e windows
Window reduction
Attic ventilation
Whole house fan
Passive solar design
1.1.5 Other Appliances
• Refrigerator replacements
* Freezer replacements .
• Oven/range replacements
* Dishwasher replacements
• Clothes washer replacements
* Clothes dryer replacements
* Customer located power generation based on
photovoltaic, solar thermal, biomass, wind or
geothermal resources
• Swimming pool pump replacements
• Gasket replacements
• Maintenance/coil cleaning
1.2 COMMERCIAL
1.2.1 Heating/Ventilation/Air Conditioning (HVAC)
• Heat pump replacement
• Fan motor efficiency
Resizing of chillers
Heat pipe retrofits in air conditioning units
Dehumidifiers
Steam trap insulation
Radiator thermostatic valves
Variable speed drive on fan motor
Solar assisted HVAC including ventilation, chillers,
heat pumps, and desiccants
HVAC piping insulation
HVAC ductwork insulation
Boiler insulation
Automatic night setback
Automatic economizer cooling
Outside air control
Hot and cold deck automatic reset
Reheat system primary air optimization
Process heat recovery
Deadband thermostat
Timeclocks on circulating pumps
Chiller system
Increase condensing unit efficiency
Separate make-up air for exhaust hoods
Variable air volume system
Direct tower cooling (chiller strainer cycle)
Multiple chiller control
Radiant heating
Evaporative roof surface cooling
Cooling tower flow control
Ceiling fans
Evaporative cooling
Direct expansion cooling system
•Heat recovery ventilation (water and air-source)
Set-back controls for heating/cooling
Make-up air control
Manual fan switches
Energy saving exhaust hood
Night flushing
Spot radiant heating
Terminal regulated air volume control
scheme
Variable speed motors for HVAC system
Waterside economizers
Airside economizer
Gray water systems
Well water for cooling
Page 1-2
-------
List of Qualified Measures
APPENDIX 1
7.2.2 Building envelope
Insulation
Wai! insulation
Floor/slab insulation
Roof insulation
Window and door upgrades, replacements, and
films (to reduce solar heat gains)
Passive solar design
Earth berming
Shading devices and tree planting
High reflectivity roof coating
Evaporative cooling
Infiltration reduction
Weatherstripping
Caulking
Low-e windows
Multi-glazed windows
Replace glazing with insulated walls
Thermal break window frames
Tinted glazing
Vapor barrier
Vestibule entry
1.2.3 Lighting
Electronic ballast replacements
Delamping
Reflectors
Occupancy sensors
Dayiighting with controls
Photovoltaic lighting
Efficient exterior lighting
Manual selective switching
Efficient exit signs
Dayiighting construction
Cathode cutout ballasts
High intensity discharge luminaries
Outdoor light timeclock and photocell
1.2.4 Refrigeration
• Refrigerator replacement
* Freezer replacement
* Optimize heat gains to refrigerated space
Optimize defrost control
Refrigeration pressure optimization control
High efficiency compressors
Anti-condensate heater control
Floating head pressure
Hot gas defrost
Parallel unequal compressors
Variable speed compressors
Water cooler controls
Waste heat utilization
Air doors on refrigeration equipment
1.2.5 Water Heating
Electric water heating upgrades/replacements
Electric water heater wraps/blankets
Pipe insulation
Solar heating and/or pre-heat units
Geothermal heating and/or pre-heat units
Circulating pump control
Point-of-use water heater
Heat recovery domestic water heater (DWH) system
Chemical dishwashing system
End-use reduction using low-flow fittings
/. 2.6 Other end-uses and miscellaneous
• Energy management control systems for building
operations
• Customer located power based on photovoltaic, solar
thermal, biomass, wind, and geothermal resources
• Energy efficient office equipment
• Customer-owned transformer upgrades and proper
sizing
1.3 INDUSTRIAL
1.3.1 Motors
• Retire inefficient motors and replace with energy
efficient motors, including the use of electronic
adjustable speed or variable frequency drives
• Rebuild motors to operate more efficiently through
greater contamination protection and improved
magnetic materials
Page 1-3
-------
APPENDIX 1
List of Qualified Measures
* Install self-starters
• Replace improperly sized motors
1.3.2 Lighting
* Electronic ballast replacement/improvement
• Electromagnetic ballast upgrade
* Installation of reflectors
•* Substitution of lamps with built-in automatic
cathode cut-out switches
-• Modify ballast circuits whh additional impedance
devices
• Metal halide and high pressure sodium lamp retrofits
• High pressure sodium retrofits
• Daylighting whh controls
• Occupancy sensors
• Delamping
• Photovoltaic lighting
• Two step and dimmable high intensity discharge
ballast
1.3.3 Heating/VentUation/Air Conditioning (HVAC)
Heat pump replacement/upgrade
Furnace upgrade/replacement
Fan motor efficiency
Resizing of chillers
Heat pipe retrofits on air conditioners
Variable speed drive on fan motor
Solar assisted HVAC including ventilation, chillers,
heat pumps and desiccants
1.3.4Industrial Processes
* Upgrades in heat transfer equipment
• Insulation and burner upgrades for industrial
fumaces/ovens/boilers to reduce electricity loads on
motors and fans
* Insulation and redesign of piping
* Upgrades/retrofits in condenser/evaporation
equipment
* Process air and water filtration for improved
efficiency
• Upgrades of catalytic combustors
* Solar process heat
• Customer located power based on photovoltaic,
solar thermal, biomass, wind, and geothermal
resources
Power factor controllers
Utilization of waste gas fuels
Steam line ami steam trap repairs/upgrades
Compressed air system improvements/repairs
Industrial process heat pump
Optimization of equipment lubrication or
maintenance
• Resizing of process equipment for optimal energy
efficiency
• Use of unique thermodynamic power cycles
1.3.5 Building Envelope
• Insulation of ceiling, walls, and ducts
• Window and door replacement/upgrade, including
thermal energy barriers
• Caulking/weatherstripping
1.3.6 Water Heating
Electric water heater upgrades/replacements
Electric water heater wraps/blankets
Pipe insulation
Low-flow showerheads and fittings
Solar heating and pre-heat units
Geothermal heating and pre-heat units
1.3.7 Other End-uses and miscellaneous
• Refrigeration system retrofit/replacement
• Energy management control systems and end use
metering
• Customer-owned transformer retrofits/replacements
and proper sizing
1.4 AGRICULTURAL
1.4.1 Space Conditioning
Building envelope measures
Efficient HVAC equipment
Heat pipe retrofit on air conditioners
System and control measures
Solar assisted HVAC including ventilation,
chillers, heat pumps, and desiccants
Page 1-4
-------
List of Qualified Measures
APPENDIX-1-
•• Air-source and geothermajl heat pumps
replacement/upgrades
1.4.2 Water heating
Upgrades/replacements
Water heater wraps/blankets
Pipe insulation
Low-flow showerheads and fittings
Solar heating and/or pre-hear units
Geothermal heating and/or pre-heat units
1.4.3 Lighting
Electronic ballast replacements
Delamping
Reflectors
Occupancy sensors
Daylight ing with controls
Photovoltaic lighting
Outdoor lighting controls
1.4.4 Pumping/Irrigation
Pump upgrades/retrofits
Computerized pump control systems
Irrigation load management strategies
Irrigation pumping plants
Computer irrigation control
Surge irrigation
Computerized scheduling of irrigation
Drip irrigation systems
1.4.5 Motors
• Retire inefficient motors and replace with energy
efficient motors, including the use of electronic
adjustable speed and variable frequency drives
• Rebuild motors to operate more efficiently through
greater contamination protection and improved
magnetic materials
• Install self-starters
• Replace improperly sized motors
7.4.6 Other end uses
* Ventilation fans
• Cooling and refrigeration system upgrades
• Grain drying using unheated air
• Grain drying using low temperature electric
• Customer-owned transformer retrofits/
replacements and proper sizing
• Programmable controllers for electrical farm
equipment
• Controlled livestock ventilation
• Water heating-for production agriculture
• Milk cooler heat exchangers
• Direct expansion/ice bank milk cooling
• Low energy precision application systems
• Heat pump crop drying
1.5 GOVERNMENT SERVICES SECTOR
1.5.1 Streetlighting
• Replace incandescent and mercury vapor lamps
with high pressure sodium and metal halide
7.5.2 Other
• Energy efficiency improvements in motors, pumps,
and controls for water supply and waste water
treatment
• District heating and cooling measures derived for
cogeneration that result in electricity savings •
2. Supply-side Measures Applicable for Reduced
Utilization
Supply-side measures that may be approved for
purposes of reduced utilization plans under §72.43
include the following:
2.1 GENERATION EFFICIENCY
• Heat rate improvement programs
• Availability improvement programs
Page 1-5
-------
APPENDIX 1
List of Qualified Measures
Coal cleaning measures that improve boiler
efficiency
Turbine improvements
Boiler improvements
Control improvements, including artificial
intelligence and expert systems
Distributed control-local (real-time) versus central
(delayed)
Equipment monitoring
Performance monitoring
Preventive maintenance
Additional or improved heat recovery
Sliding/variable pressure operations
Adjustable speed drives
Improved personnel training to improve man/
machine interface
2.2 TRANSMISSION AND DISTRIBUTION
EFFICIENCY
High efficiency transformer switchouts using
amorphous core and silicon steel technologies
Low-loss windings
Innovative cable insulation
Reactive power dispatch optimization
Power factor control
Primary feeder reconfiguration
Primary distribution voltage upgrades
High efficiency substation transformers
Controllable series capacitors
Real-time distribution data acquisition analysis
and control systems
Conservation voltage regulation
Page 1-6
-------
Appendix 2:
Useful Lifetimes of Measures
-------
-------
Appendix 2
Useful Lifetimes of Measures
Useful Lifetimes of Residential Energy Efficiency
Measures
Measure Lifetime (Years) Measure Lifetime (Years}
Caulking 10 High-efficiency Central Furnace 20
Ceiling Insulation 25 High-efficiency Refrigerator 20
Central Heat Pump 18 Low-flow Showerhcads 10
Clock Thermostat 15 Storm Windows 10
Double Glazing 25 Wall Insulation 25
Duct Wrap/Insulation 15 Water Faucet Aerators 10
Efficient Gas Water Heater 13 Water Heater Blanket 10
Evaporative Coolers IS Wealherstripping 10
Fluorescent Bulbs 10 Whole House Fan 15
Furnace Retrofit 15 Window Shade Awnings 10
High-efficiency A/C 18
Page 2-3
-------
.APPENDIX 2
Useful Lifetimes of Measures
Useful Lifetimes of Commercial and Industrial Energy
Efficiency Measures
Equipment Type &
Description
Lifetime (Years)
Equipment Type &
Description
Lifetime (Years)
LIGHTING
Dimming Systems 20
Electronic Ballast 10
Energy-efficient Ballast 11
Energy-efficient Fluorescent Lamp 5
Energy efficient Fluorescent Lamp with
Built-in Ballast 2
High Pressure Sodium Lamp 5
Low-Pressurt Sodium Lamp 5
Metal Halide Lamp 10
Motion Sensor 10
On-Off Switching 7
Parabolic fixture 20
HVAC
Air Curtain ~ 10
Air-to-Air Packaged Heat Pump 10
Air De-stratification Fan-High Inlet/Low
Discharge IS
Air De-stratification Fan-Paddle Type 10
Chiller Strainer Cycle System IS
Deadband Thermostat 13
Economizer 11
Heat Recovery From Refrigerator Condenser 11
Ice Thermal Energy Storage 19
Low Leakage Damper 9
Make-up Air Unit for Exhaust Hood 10
Plate Type Heat Pipe Recovery System 14
Rotary Type Heat Recovery System 11
Spot Radiant Heat 10
Variable Air Volume, Inlet Vane Controls 11
Variable Pitch Fan for Cooling Power 13
Water Thermal Energy Storage 20
Water-to-Air Packaged Heat Pump IS
CONTROLS
Computer Logic Energy-Management
Systems 13
Electronic Controls 11
Time Clocks 10
MOTORS, DRIVES, & TRANSFORMERS
Efficient AC Electric Transformer IS
High-Efficiency Electric Motor 17
Standard Electric Motor IS
Variable-Speed DC motor 18
Variable-Speed Drive - Belt Type 10
Variable-Speed Drive - Solid Type IS
DOMESTIC HOT WATER
Heat Pump Water Heater 10
Point-of-Use Water Heater 12
Solar Water Heater 15
REFRIGERATION
Auto Cleaning System for
Condenser Tubes 15
Condenser Float Head Pressure Control 10
Hot Gas Bypass Defrost 10
Polyethylene Strip Curtain 3
Refrigeration Case Cover 11
Unequal Parallel Refrigeration 14
BUILDING ENVELOPE
Double Glazing 20
Heat Mirror 18
Low-Emissivily Coating 14
Solar Shade Film (Retrofit) 7
Tinted & Reflective Coating 14
Page 2-4
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Appendix 3:
Reserve Fact Sheet
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United States
Environmental Protection
Agency
Air and Radiation
(6204J)
EPA430/F-93/055
November 1993
Acid Rain Program
Conservation and
Renewable Energy Reserve
In .order to reduce acid rain in the United States and Canada, Title IV
of the Dean Air,Act Amendments of 1990 established the Acid Rain
Program. The program will cut sulfur dioxide emissions from-electric
utility plants. This fact sheet discusses the Energy Conservation and
Renewable Energy Reserve and is one of a series containing information
about the program.
The overall goal of the Acid Rain
Program is to achieve significant environ-
mental benefits through reductions in
emissions of sulfur dioxide (SO2), and
nitrogen oxides (NOJ, the primary causes
of acid rain. To achieve this goal at the
lowest cost to society, the program em-
ploys both traditional and innovative,
market-based approaches for controlling
air pollution. In addition, the program
encourages energy efficiency and
renewable energy.
Title IV of the Clean Air Act sets
as its primary goal the reduction of annual
SO2 emissions by 10 million tons below
1980 levels. To achieve these reductions,
the law requires a two-phase tightening of
the restrictions placed on fossil fuel-fired
power plants.
Phase I begins in 1995 and affects
110 mostly coal-burning electric utility
plants located in 21 eastern and midwest-
ern states. Phase II, which begins in the
year 2000, tightens the annual emissions
limits imposed on these large, higher
emitting plants and also sets restrictions
on smaller, cleaner plants fired by coal,
oil, and gas. The program affects utility
units with an output capacity of 25 megaw-
atts or greater and new utility units under
25 megawatts that use fuel with sulfur con-
tent greater than .05 percent.
The Act also calls for a 2 million-
ton reduction in NO, emissions by the
year 2000. A significant portion of this
reduction will be achieved by coal-fired
utility boilers that will be required to
install low-NOj burner technologies and
meet new emissions standards.
-------
NOT."
The innovative, market-based SO2
allowance trading component of the Acid
Rain Program allows utilities to adopt the
most cost-effective strategy to reduce SO2
emissions at units in their system. The
Acid Rain Program operating permit
outlines the specific program requirements
and compliance options chosen by each
source. Affected utilities also will be
required to install systems that continuous-
ly monitor emissions of SO2, NO* and
other related pollutants in order to track
progress, ensure compliance, and provide
credibility to the trading program. In any
year that compliance is not achieved,
excess emissions penalties will apply, and
sources will be required to submit a plan
to EPA that specifies how the excess SO2
emissions will be offset.
INTRODUCTION
The Conservation and Renewable
Energy Reserve... (the Reserve) was
established as a part of the Acid Rain
Program to encourage utilities to jump
start pollution prevention efforts, by
reducing emissions before Clean Air Act
compliance deadlines. The Reserve is a
pool of 300,000 allowances set aside to
award to utilities that meet SO2 standards
through efficiency or renewable energy
(such as biomass, solar, geothermal or
wind). Reserve allowances can be used
for compliance, sold or banked for future
use.
The Reserve allowances are just
the beginning of the benefits for efficiency
and renewable energy. The greatest
benefit lies in simply using efficiency and
renewable energy to avoid emissions.
Each ton of SO2 avoided through
efficiency or renewables requires one less
allowance to be retired. That allowance
has a dollar value and can be used or sold
to increase revenue for the selling utility.
Best of all, the avoided emissions benefit
is automatic—no reporting requirements,
applications or verification required.
Eligible utilities can apply to the
Reserve for energy savings or generation
in effect since January 1, 1992. For
example, if a utility began a lighting
retrofit program in 1989, only those
installations done on or after January 1,
1992 are eligible for credit.
Phase I utilities are eligible to earn
Reserve allowances for savings or
generation from January 1, 1992 up until
their compliance date of January 1, 1995.
Phase n utilities are eligible from January
1, 1992 up until their compliance date of
January 1, 2000. If allowances remain in
the Reserve after its scheduled
termination date of January 1, 2010, the
remaining allowances are distributed on a
pro-rata basis.
ENVIRONMENTAL IMPACTS
Emissions from electric utilities can
pose a significant threat to the
environment, public health, visibility, and
the integrity of building and monuments.
Pollution prevention through efficiency
and renewable energy helps combat not
only acid rain, but other environmental
harms as well, including global wanning
and urban smog.
The 300,000 allowances represent a
conversion to 150 billion kWh to efficiency
or • renewable energy. The following
graphic illustrates the net pollution
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displaced by the implementation of the
Reserve.
Implementation of the
Reserve displaces:
885 Million ;/ 825 Million
} IbsofSOZ J? IbsofNOx
225 BilUon
lbsofCO2
itant
The CO2 reductions are equivalent to
taking 21 million cars off the road each
year. Efficiency and renewable energy
also avoid the emitting of NO, and toxics,
and the production of coal particulates,
ash and scrubber sludge.
ELIGIBILITY REQUIREMENTS
To qualify for the Reserve the
utility must meet the following require-
ments:
• The applicant must sell electricity.
• The applicant or applicant's holding
company, must own or operate, in
whole or in part, a Phase I or II
unit.
• The applicant is subject to a least
cost plan or planning process to be
approved or accepted by the
applicant's ratemaking entity, and
meets the following requirements:
(1) public participation; (2)
evaluation of a full range of resource
options; (3) treatment of supply-side
and demand-side resources on a
consistent and integrated basis; (4)
accounting for system operation and
risk factors; (5) implementation of
least-cost resources.
To be eligible for allowances from
the Reserve for energy conservation
(but not for renewable generation),
applicants that are investor-owned
utilities must be subject to a
ratemaking process that does not
make energy conservation
unprofitable. This is known as net
income neutrality," and it requires
that the utility be compensated for
lost sales due to its energy efficiency
programs. Applications for net
income neutrality must be certified
by the Department of Energy.
WHEN TO APPLY TO THE RESERVE
Utilities owning Phase I and/or Phase
II plants began applying to the Reserve in
July 1, 1993. EPA accepts applications
beginning each July 1, for savings and
generation of the previous year. If an
application is sent to EPA prior to July 1,
EPA will consider it as a July 1 arrival.
An applicant may apply to the Reserve
each year, or may wait and submit one
application for several years of savings or
renewable generation at a time.
VERIFICATION
-------
Hie Reserve application requires
verification of both energy efficiency mea-
sures and renewable energy generation.
Renewable energy can be verified by
enclosing relevant plant records. An
applicant applying for efficiency credit
must be verified by the state, if the
ratemaking entity uses performance-based
rate adjustments. Otherwise, applicants
must submit documentation of savings
directly to EPA for verification, and may
use the EPA Conservation Verification
Protocols to do so.
FOR MORE INFORMATION
Write to:
U.S. EPA
Acid Rain Division (6204J)
Washington, DC 20460
If you would like to receive other fact
sheets or more information on energy
efficiency and renewable energy, call the
Acid Rain Hotline at (202) 233-9620.
OPPORTUNITY FOR UTILITIES
The Energy Conservation and
Renewable Energy Reserve provides an
opportunity for utilities to earn allowances
for implementing efficiency measures and
renewable energy generation. These
allowances can make it easier for utilities
to comply with the new emissions stan-
dards.
In addition, using efficiency and
renewable energy will free up valuable
allowances after compliance deadlines.
The dollar value of these allowances can
make it more economical to implement
efficiency measures or to generate
renewable energy. The Energy
Conservation and Renewable Energy
Reserve is one of the many innovative
features of the Acid Rain Program that
can help utilities reduce SO2 emissions
cost-effectively.
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Appendix 4:
Conservation/Renewables
Reserve Form
-------
-------
United States
Environmental Protection Agency
Acid Rain Program
OMB No. 2060-0258
Expires 1-31-96
&EFW Conservation/Renewables Reserve
For more information, see instructions and refer to 40 CFR 73.80, 73.81 and 73.82
This submission is: CD New d Revised
Pago
Pagel
D-D
STEP 1
Identify the applicant
STEP 2
Enter information for the
person completing this form
STEP 3
Identify any affected unit
owned or operated by the
applicant by plant name
from NADB and allowance
tracking system account JD#
ENERGY CONSERVATION MEASURES AND VERIFICATION
Utility Nemo ' .
Name
State(s)
Phone
Plant Name
ATS Account IDf
STEP 4
Mark the appropriate box
Verification of conservation measures performed by
I I State I ! U.S. EPA (Attach documentation verifying energy savings)
STEPS
Enter the requested
information for each type of
conservation measure
employed. Total the
savings and round to the
nearest MWh. If more
space is needed, add pages
in the appropriate format
STEP 6
Convert total from Step 5
to tons of sulfur dioxide
emissions avoided by
multiplying Step 5 total by
.002 tons/MWh. Round to
the nearest tenth of a ton
RENEWABLE ENERGY GENERATION
STEP?
Enter the requested
information for each type of
renewable energy
generation measure
employed. Total the
generation and round to the
nearest MWh. If more
space is needed, add pages
in the appropriate format
STEPS
Mark box and attach
documentation
STEP 9
Convert the total from Step
7 to tons of sulfur dioxide
emissions avoided by
multiplying Step 7 total by
.002 tons/MWh. Round to
the nearest tenth of a ton
Type of Measure or Program Saving. Number^ *™%*™»»
TOTAL
torts
Generation Energy Generation
Type of Generation Rant Name veneration (MWh)
•
TOTAL
D
I have attached documentation to verify the amount of renewable energy generation
tons
EPA Form 7610-10(1-93)
-------
Utility Name (from Step 1)
Conservation - Page 2
D-D-
Page
TOTAL RESERVE ALLOWANCES
STiPIO
Add toflether the Step 6
and Step 9 entries; round
result to the newest ton
and convert tons to
allowances (1 ton = 1
allowance)
STEP 11
Identify the allowance
tracking accounts) and the
number of earned reserve
allowances to be allocated
to each account. The total
must equal the number
entered at Step 10
allowances
Allowance Tracking System Account Number
Allowance*
TOTAL
CERTIFICATION BY RATEMAKING ENTITY
STEP 12
Submit application to
the appropriate
ratemafclng entity for
approval
I certify, as the appropriate representative of the applicant's ratemaking entity, that the applicant's least cost
plan or least cost planning process meets the requirements of 40 CFR 73.82
-------
Acid Rain Program
A CEM Instructions for
Conservation/Renewables Reserve Form
(40 CFR Part 73.80, 73.81, and 73.82)
The Energy Conservation and Renewable Energy Reserve Program provides a 300,000 allowance reserve for
utilities employing qualified energy conservation measures or renewable energy generation. To apply for
allowances from the Reserve, you must submit the Conservation/Renewables Reserve form.
EPA will accept submissions each July 1 following the year for which you are claiming energy savings or
generation, beginning on July 1, 1993. Forms received before July 1 will be deemed to be received on July 1.
EPA will accept Conservation/Renewables Reserve forms until it has allocated all 300.000 allowances or Until the
year 2010. when the Reserve will be terminated.
EPA will render a decision whether submissions meet the specified requirements within 120 days of receipt.
If the applicant is a state rate-regulated, investor-owned utility and is undertaking conservation measures for the
purpose of receiving Reserve allowances, EPA's approval will be conditional upon certification of net income
neutrality by the Secretary of the U.S. Department of Energy. For a complete description of the Conservation and
Renewable Energy Reserve allowance program mandated by Sections 404 (fj and (g) of the Clean Air Act
Amendments, see 40 CFR Part 73.
Type or complete the form using black ink. If you need more space, add pages in the appropriate format or
photocopy the pertinent page. When you have completed the form, indicate the page order and tout number of
pages (e.g.. 1 of 4, 2 of 4. etc.) on each page in the spaces provided at the top right hand comer of the page.
STEP 1 Enter the name of the electric utility that is applying for the reserve allowances and list the state(s) in
which the utility operates.
STEP 2 List the name and phone number of the personal EPA should contact for clarification.
STEP 3 To qualify for reserve allowances, the applicant, any subsidiary of the applicant, or any subsidiary of the
applicant's holding company, must own or operate, in whole or in part, an affected unit. You need to
list only one affected unit.
STEP 4 Applicants subject to the ratemaking jurisdiction of a State regulatory authority must use the verification
methodology approved by such authority provided that the ratemaking entity uses performance-based
rate adjustments (see 40 CFR 73.82(c}(l».
All other applicants must submit documentation to EPA to verify savings; these applicants may use the
EPA Conservation Verification Protocol. These applicants must submit the documentation with this form.
STEP 5 At "Type of measure or program," enter a descriptive name associated with the energy conservation
measure or program. If a group of measures are combined for monitoring purposes, you may enter the
overall name of the program. For instance, a group of energy savings measures you undertake in office
buildings may be termed "Building Retrofit.* For individual measures, use the terms given at 40 CFR part
73, Appendix A(1), if appropriate. You also may list a conservation measure not appearing in Appendix
A, provided it meets the requirements of 40 CFR 73.81 (a). List these measures using an appropriate
term.
If you are using industrial waste gases as a conservation method, include documentation to illustrate that
the use of such gases does not result in a net increase of sulfur dioxide emissions.
'Savings year" refers to the year for which you are claiming saving for the particular group of
installations. For instance, if in 1997 you are applying for credit based upon conservation achieved in
1995, the savings year is 1995. You may claim multiple years of savings for a measure, but should list
each year separately. You must have installed measures on or after January 1.1992. to receive credit.
"Number of Installations" is the number of sites or devices installed with the conservation measure. This
value represents the total number of installations in operation during the savings year.
Total the energy savings from each conservation method, including those listed on additional pages, in
the "Total* box on the right hand side of the form.
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Page 2
Conservation/Renewables Reserve Form Instructions
STEP 6 This step converts the megawatt hours of generation saved to the tons of sulfur dioxide emissions
avoided due to conservation measures, as follows:
Tons of SO2 = Step 5 Total (MWh) x 4 (Ibs/MWh)
Avoided 2000 (Ibs/ton)
Round to the nearest tenth of a ton.
Step 5 Total (MWh) X.002; ISQS \
I MWh/
STEP 7 "Type of generation" refers to the renewable energy technology you employ. Use the terms listed at 40
CFR part 73, Appendix A, if such terms are appropriate. Eligible types of generation are: biomass (i.e.,
combustible energy-producing materials from biological sources, which include wood, plant residues,
biological wastes, landfill gas, energy crops and eligible components of municipal solid'waste), solar,
geothermal and wind resources. You may list a type of renewable energy generation not appearing in
Appendix A, provided it meets the requirements of 40 CFR 73.81 (c). Ust such measures using an
appropriate term.
At "Plant Name," identify the plant at which the renewable energy generation took place. Use the plant
name from NADB or other appropriate name.
"Generation year" refers to the year for which you are claiming renewable energy generation. For
instance, if in 1997 you are applying for credit based upon generation achieved in 1995, then the
generation year is 1995. You may claim multiple years of generation, but should list each year
separately. You must have initiated the generation on or after January 1,1992 to receive credit.
Total the renewable energy generation from each qualified method, including those listed on additional
pages, in the "Total" box provided on the right hand side of the form.
For hybrid renewable energy systems, the amount of generation is the MWh that can'be attributed to the
qualified renewable energy measure. Include documentation showing the hybrid system's total
generation, the heat input and heat rate attributed to the non-renewable portion of the generation, and
the calculations you used to determine the amount of qualified renewable energy generation.
Step 8 Include copies of pertinent plant operation records that substantiate the amount of renewable energy
generation claimed.
Step 9 This step converts the megawatt hours of renewable energy generation to the tons of sulfur dioxide
emissions avoided, as follows:
Tons of SO2 « Step 7 Total (MWh) x 4 tlbs/MWh)
Avoided 2000 (Ibs/ton)
Round to the nearest tenth of a ton.
Step 7 Total
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Conservation/Renewables Reserve Form Instructions Page 3
STEP 12 The entity with ratemaking authority for the utility must review the application. As the Step 12
certification states, the ratemaking entity for the utility must be able to certify that the least-cost plan
or least-cost planning process meets the following requirements of 40 CFR 73.82(a)(4)-{7):
•• Provides an opportunity for public notice and comment.
•• Evaluates the full range of existing and incremental resources in order to meet expected future
demand at lowest system cost.
• Treats demand-side resources and supply-side resources on a consistent and integrated basis.
-• Takes into account necessary features for system operation such as diversity, reliability,
dispatchabilrty. and other factors of risk. •
• is being implemented by the applicant to the maximum extent practicable.
• Is consistent with the energy conservation measures adopted and the renewable energy generated.
Further, the applicant must demonstrate that the qualified energy conservation measures adopted and
qualified renewable energy generated are consistent with the least-cost plan or least-cost planning
process.
The ratemaking entity also must be able to certify that measures not included in Appendix A of Part 73
meet the following requirements of 40 CFR 73.81 (a)(2) and (0(2):
• The measures must be consistent with an applicable least-cost planning process.
• The measures must be implemented pursuant to approval by the utility regulatory authority.
• A qualified conservation measure must be a cost-effective demand-side measure that increases the
efficiency of the customer's use of electricity (as measured in accordance 40 CFR 73.82(c» without
increasing the use by the customer of any fuel other than qualified renewable energy, industrial
waste heat or industrial waste gases.
* A qualified renewable energy measure must be derived from biomass (i.e.. combustible energy-
producing materials from biological sources, which include wood, plant residue, biological wastes,
landfill gas, energy crops, and eligible components of municipal solid waste), solar, geothermat, or
wind resources.
STEP 13 The certifications arise from the regulatory requirements.
Only a utility may qualify for the Reserve (40 CFR 73.82(a){1)).
If your application includes an energy conservation measure and the utility is investor-owned, you must
provide the necessary information to enable the U.S. Secretary of Energy to certify that the State
regulatory authority has established rates and charges that ensure net income neutrality (40 CFR
73.82{a)(9)). You must submit this information to the Department of Energy directly and not through
EPA.
Consistent with 40 CFR 73.82(a)(3), you must certify that the utility "is paying in whole or in part for
one or more qualified energy conservation measures or qualified renewable energy generation (that
became operational during the period of applicability) either directly or through payment to another
person that purchases the qualified energy conservation measure or qualified renewable energy
generation."
Measures that are installed before January 1,1992, or after one of the utility's units becomes a Phase
I or Phase II unit do not qualify for the Reserve bonuses (40 CFR 73.80(b)).
Independent power producers that sell qualified energy generation to another utility must submit
' documents to indicate the energy was purchased according to the purchasing utility's least cost planning
process (40 CFR 73.82(a)(8)>.
Enter the name of the individual who will act as the certifying official for the utility.
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Page 4 • Conservation/Renewables Reserve Form Instructions
Submission Instructions
To obtain allowances from the Conservation and Renewable Energy Reserve, you must submit this application to
the following address:
U.S. ENVIRONMENTAL PROTECTION AGENCY
ACID RAIN DIVISION, 6204J
ATTN: CONSERVATION AND RENEWABLE ENERGY RESERVE
401 M STREET, SW
WASHINGTON, DC 20460
Paperwork Burden Estimate .
The burden on the public for ooilectine and reporting of information under this request )• estimated at 78 hours. Send
comments regarding this collection of information, including suggestions for reducing the burden, to: Chief, Information Policy
Branch (PM-223), U.S. Environmental Protection Agency, 401 M Street, SW, Washington, D.C. 20460; and to: Paperwork
Reduction Project (OMB12060-O258), Office of Information and Regulatory Affairs, Office of Management and Budget,
Washington, D.C. 20503. Do not mood your farm* to thoto mMnno*; «** *uftmw*fon instmca'ona, *6ov*.
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Appendix 5:
Reprint of Regulation on the
Conservation and Renewable
Energy Reserve
-------
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APPENDIX 5
Reprint Of Regulation on the
Conservation and Renewable
Energy Reserve
Sebw Is a copy of EPA's rule, 40 CFRPart 73.80
through 73.86, that pertains to the Conservation
andRenewable Energy Reserve mandated by Sections
404 $and (g) of the dean Air Act Amendments.
This section of the rule can also be found on pages
3695through 3701 of the Federal Register, Monday
January 11, 1993. Also attached are relevant
definitions from 40 CFR Part 72.2.
§ 722 Definitions
Certifying official, for purposes of part 73 of this chapter,
means:
(1) For a corporation, a president, secretary, treasurer,
or vice-president of die corporation in charge of a
principal business function, or any other person who
performs similar policy or decision-making functions for
the corporation:
(2) 'For partnership or sole proprietorship, a general
partner or the proprietor, respectively; and
(3) For a local government entity or State, federal, or
other public agency, either a principal executive officer
or ranking elected official.
Conservation Verification Protocolmeans amethodology
developed by the Administrator for calculating the
kilowatt hour savings from energy conservation measures
and improved unit efficiency measures for the purposes
of title IV of the Act.
Customer means a purchaser of electricity not for
purposes of transmission or resale.
Demand-side measure means a measure:
(1) To improve the efficiency of consumption of
electricity from a utility by customers of the utility; or
(2) To reduce the amount of consumption of electricity
from a utility by customers of the utility without
increasing the use by the customer of fuel other than:
Biomass (i.e., combustibleenergy-producingrnaterials
from biological sources, which include wood, plant
residues, biological wastes, landfill gas, energy crops,
and eligible components of municipal solid waste),
solar, geothermal, or wind resources; or industrial
waste gases where the party making the submission
involved certifies that there is no net increase in sulfur
dioxide emissions from the use of such gases.
"Demand-side measure" includes the measures listed
in part 73, Appendix A, section 1 of this chapter.
Hybrid generation facility means, a plant that generates
electrical energy derived from a combination of
qualified renewable energy (wind, solar, biomass, or
geothermal) and one or more other energy resources.
Investor-owned utility means a utility that is organized
as a tax-paying for-profit business.
Kilowatthour saved or savings means the net savings
in electricity use (expressed in Kwh) that result
directly from a utility's energy conservation measures
or programs.
Least-cost plan or least-cost planning process means
an energy conservation and electric power planning
methodology meeting the requirements of § 73.82(a)(4)
of this chapter.
Page 5-3
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APPENDIX 5
Reprint of Regulation
Owner means any of the following persons:
(1) Any holder of any portion of the legal or
equitable title in an affected unit; or
(2). Any holder of a leasehold interest in an affected
unit; or
(3) Any purchaser of power from an affected unit
under a life-of-the-unit, firm power contractual
arrangement as that term is defined herein and used
in section 4080) of the Act. However,.unless
expressly provided for in a leasehold agreement,
owner shall not include a passive lessor, or a person
who has an equitable interest through such lessor,
whose rental payments are not based, either directly
or indirectly, upon the revenues or income from the
affected unit; or
(4) With respect to any Allowance Tracking System
genera) account, any person identified in the
submission required by § 73.31(c) of this chapter
that is subject to the binding agreement for the
authorized account representative to represent that
person's ownership interest with respect to
allowances.
Owner or operator means any person who is an
owner or who operates, controls, or supervises an
affected unit or affected source and shall include, but
not be limited to, any holding company, utility
system, or plant manager of an affected unit or
affected source.
Net income neutrality means, in the case of energy
conversation measures undertaken by an investor-
owned utility whose rates are regulated by a State
utility regulatory authority, rates and charges
established by the State utility regulatory authority
that ensure that the net income earned by the utility
on its State-jurisdictional equity investment will be
no lower as a consequence of its expenditures on
cost-effective qualified energy conservation measures
and any associated lost sales than it would have been
had the utility not made such expenditures, or that
theState utility regulatory authority has implemented
a rulemaking approach designed to meet this objective.
Supply-side measure means a measure to improve
the efficiency of the generation, transmission, or
distribution of electricity, implemented by a utility
in connection with its operations or facilities to
provide electricity to its customers, and includes the
measures set forth in part 73, Appendix A, section
2 of this chapter.
LW/zYy means, any person that sells electricity.
Utility regulatory authority means an authority,
board, commission, or other entity (limited to the
local-, State-, or federal level, whenever so specified)
responsible for overseeing the business operations
of utilities located within its jurisdiction, including,
but not limited to, utility rates and charges to
customers.
Subpart F - Energy Conservation and Renewable
Energy Reserve
73.80 Operation of allowance reserve program for
conservation and renewable energy.
73.81 Qualified conservation measures and renewable
energy generation.
73.82 Application for allowances from reserve
program.
73.83 Secretary of Energy's action on net income
neutrality applications.
73.84 Administrator's action on applications.
73.85 - Administrator review of the reserve program.
73.86 State regulatory autonomy.
Appendix A to Subpart F - List of Qualified Energy
Conservation Measures
Page 5-4
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Reprint of Regulation
APPENDIX 5
Subpart F - Energy Conservation and Renewable §73.81
Energy Reserve
Qualified conservation measures and renewable energy
§73.80 generation.
Operation of allowance reserve program for
conservation and renewable energy.
(a) General. The Administrator will allocate allowances
from the Conservation and Renewable Energy Reserve
(the "Reserve") established under subpart B based on
verified kilowatt hours saved through die use of one
or more qualified energy conservation measures or
based on kilowatt hours generated by qualified
renewable energy generation. Allowances will be
allocated to applicants that meet the requirements of
this subpart according to the formulas specified in
§73.82(d), and in the order in which applications are
received, except where provided for in §73.84 and
§73.85, until a total of 300,000 allowances have been
allocated.
(b)Period of applicability. Allowances will be allocated
under mis subpart for qualified energy conservation
measures or renewable energy generation sources that
are operational on or after January 1,1992, and before
the date on which any unit owned or operated by the
applicant becomes a Phase I unit or a Phase II unit.
(c) Termination of the Reserve. The Administrator
will reallocate any allowances remaining in the Reserve
after January 2,2010 to the affected units from whom
allowances were withheld by the Administrator, in
accordance with section 404(g), for purposes of
establishing the Reserve. Each unit's allocation under
this paragraph will be calculated as follows:
Remaining allowances in the Reserve x
Unit's allowances withheld
Total amount in Reserve
(a) Qualified energy conservation measures. A qualified
energy conservation measure is a demand-side measure
not operational until the period of applicability,
implemented in the residence or facility of a customer
to whom the utility sells electricity, that:
(I) Is specified in appendix A(l) of this subpart; or
(2) In the case of a device or material that is not
included in appendix A(l) of this subpart,
(i) Is a cost-effective demand-side measure consistent
with an applicable least-cost plan or least-cost planning
process that increases the efficiency of the customer's
use of electricity (as measured in accordance with
§73.82(c)) without increasing the use by the customer
of any fuel other than qualified renewable energy,
industrial waste heat, or, pursuant to paragraph (b)(5)
of this section, industrial waste gases;
(ii) Is implemented pursuant to a conservation program
approved by the utility regulatory authority, which
certifies that it meets the requirements of paragraph
(a)(2)(i) of th is section and is not excluded by paragraph
(b) of this section; and
(Hi) Is reported by the applicant in its application to the
Reserve.
(b) Non-qualified energy conservation measures. The
following energy conservation measures shall not
qualify for Allowance Reserve allocations:
(1) Demand-side measures that were operational
before January 1, 1992;
(Allowances will be rounded to the nearest allowance) @) Supply-side measures;
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APPENDIX S
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(3) Conservation programs that are exclusively
informational or educational in nature;
(4) Load management measures that lead to economic
reduction of electric energy demand during a utility's
peak generating periods, unless kilowatt hour savings
can be verified by the utility pursuant to §73.82(c); or
(5) Utilization of industrial waste gases, unless the
applicant has certified that mere is no net increase in
sulfur dioxide emissions from such utilization.
(c) Qualified renewable energy generation. Qualified
renewable energy generation is electrical energy
generation, not operational until the period of
applicability, that:
(1) Is specified in appendix A(3) of this subpart; or
(2) In the case of renewable energy generation that is
not included in appendix A(3) of this subpart is:
(i) Consistent with a least cost plan or a least cost
planning process and derived from biomass (i.e.,
combustible energy-producing materials from
biological sources which include wood, plant residues,
biological wastes, landfill gas, energy crops, and
eligible components of municipal solid waste), solar,
geothermal, or wind resources;
(ii) Implemented pursuant to approval by the utility
regulatory authority, which certifies that it meets the
requirements of paragraphs (c)(2)(i) and (c)(2)(ii) of
mis section and is not excluded by paragraph (d) of this
section; and
(iii) Is reported by the applicant in its application to the
Reserve.
(d) Non-qualified renewable energy generation. The
following renewable energy generation shall not
qualify for Allowance Reserve allocations:
(1) Renewable energy generation that was operational
before January 1,1992;
(2) Measures that reduce electricity demand for a utility's
customers without providing electric generation directly
for sale to customers; and
(3) Measures that appear on the list of qualified energy
conservation measures in Appendix A(l) of this subpart
§73.82
Application for allowances form reserve program.
(a) Application Requirements. Each application for
ConservationandRenewableEnergyReserveallowances,
shall:
(1) Certify that the applicant is a utility;
(2) Demonstrate that the applicant, any subsidiary of the
applicant, or any subsidiary of the applicant's holding
company, is an owner or operator, in whole or in part, of
at least one Phase I or Phase fl unit by including in the
application the name and Allowance Tracking System
account number of aPhaselorPhasellunit which it owns
or operates and for which it is listed as an owner or
operator on the certificate of representation submitted by
the designated representative for the unit pursuant to
§72.20 of mis chapter,
(3) Through certification, demonstrate that the applicant
is paying in whole or in part for one or more qualified
energy conservation measures or qualified renewable
energy generation (that became operational during the
period of applicability) either directly orthrough payment
to another person mat purchases the qualified energy
conservation measure or qualified renewable energy
generation;
(4) Demonstrate that the applicant is subject to a least cost
plan or a least cost planning process that:
(i)provides an opportunity for public notice and comment
or other public participation processes;
(ii) evaluates the full range of existing and incremental
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APPENDIX 5
resources in order to meet expected future demand at
lowest system cost;
(Hi) treats demand-side resources and supply-side
resources on a consistent and integrated basis;
(iv) takes into account necessary features for system
operation such as diversity, reliability, dispatchability,
and other factors of risk;
(v) may take into account other factors, including the
social and environmental costs and benefits of resource
investments; and
(vi) is being implemented by the applicant to the
maximum extent practicable.
(5) Demonstrate that the qual ified energy conservation
measure adopted or qualified renewable energy
generated, or bom, are consistent with the least cost
plan or least cost planning process;
(6) If the applicant is subject to the rate-making
jurisdiction of a State or local utility regulatory
authority, its least cost plan or least cost planning
process has been approved or accepted by the utility
regulatory authority in the State or locality in which
the qualified conservation measure(s) are adopted or
in which the qualified renewable energy generation is
utilized, and such State or local utility regulatory
authority certifies that the least-cost plan or least-cost
planning process meets the requirements of paragraph
(a)(4) of this section;
(7) If the applicant is not subject to the rate-making
jurisdiction of a State or local regulatory authority, its
least cost plan or least cost planning process has been
approved or has been accepted by the utility regulatory
authority with rate-making jurisdiction over the
applicant, and such utility regulatory authority certifies
that the least cost plan or least cost planning process
meets the requirements of paragraph (a)(4) of this
section;
(8) If the applicant is an independent power production
facility that sells qualified renewable energy generation
to another utility, the applicant has enclosed
documentation mat such qualified renewable energy
generation was purchased pursuant to the purchasing
utility's least cost plan or least cost planning process,
which has been approved or accepted by thepurchasing
utility's utility regulatory authority.
(9)(i) If the applicant is an investor-owner utility
subject to the ratemaking jurisdiction of a State utility
regulatory authority and is submitting an application
on the basis of one or more qualified energy
conservation measures, such State utility regulatory
authority has established a procedure for determining
rates and charges ensuring net income neutrality, as
defined in §72.2 of this chapter, including a provision
that the utility's net income is compensated in full
(considering factors such as risk) for lost sales
attributable to the utility's conservation programs,
which may include:
(A) General ratemaking for formulas that decouple
utility profits from actual utility sales;
(B) Specific rate adjustment formulas that allow a
utility to recover in its retail rates the full costs of
conservation measures plus any associated net revenues
lost as a result of reduced sales resulting from
conservation initiatives; or
(C) Conservation incentive mechanisms designed to
provide positive financial rewards to a utility to
encourage implementation of cost-effective measures;
(ii) Provided that the existence of any one of the
categories of ratemaking or rate adjustment formulas
or conservation incentive mechanisms specified in
paragraph (a)(9)(i) of this section shall not necessarily
constitute fulfillment of the net income neutrality
requirement unless, pursuant to §73.83, the Secretary
of Energy has certified the establishment of such net
income neutrality;
(10) Demonstrate that the applicant has implemented
the qualified energy conservation measures or used
the qualified renewable energy generation specified in
the application during the period of applicability;
(11) Demonstrate the extent to which installation of
the qualified conservation measure(s) has achieved
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APPENDIX 5
Reprint of Regulation
actual energy savings, by stating, on the basis of the
performance of die measure(s) following installation:
COTheamountofkilowatthoursavings resultingfromthe
measures) in the given year(s);
(ii) Pursuant to paragraph (c) of this section, the
methodology used to calculate the kilowatt hour.
savings; and
(iii) The name, address, and phone number of the
person who performed the calculation, of kilowatt
hour savings; (12) Report the type and amount of
yearly qualified renewable energy generation, by
stating (and submitting documentation, including
copies of plant operation records, supporting such
statements) the kilowatt hours of qualified renewable
energy generated during a previous calendar year or
years; and
(13) Report the extent to which qualified renewable
energy generation was produced in combination with
other energy sources (hereafter "hybrid generation")
by stating (and submitting documentation, including
copies of plant operation records, supporting such
statements) the heat input and heat rate of the non-
qualified renewablegeneration, thetotal annual kilowatt
hours generated, and the kilowatt hours that can be
attributed to qualified renewable energy generation;
(14) Demonstrate the extent to which the
implementation of qualified energy conservation
measures or the use of qualified renewable energy
generation has resulted in avoided tons of sulfur
dioxide emissions by the utility during the period of
applicability, pursuant to paragraph (d) of this section.
(b) Application to the Secretary of Energy. For
purposes of paragraph (a)(9) of this section, the
applicant shall fulfill the following requirements:
(1) If a utility applying for allowances from die
Reserve has not received certification of net income
neutrality from the Secretary of Energy or such
certification is no longer applicable, the applicant
shall submit to the Secretary of Energy:
(i) A copy of the relevant State utility regulatory
authority's final order or decision setting forth the
approved ratemaking mechanisms that ensure that a
utility's net income will be at least as high upon
implementation of energy conservation measures as
such net income would have been if the energy
conservation measures has not been implemented;
(it) A description of how the State utility regulatory
authority's order or decision meets the definition of
net income neutrality as defined in §72.2; and
(iii) Any additional information necessary for Secretary
of Energy to certify that the State regulatory authority
has established rates and charges mat ensure net
income neutrality.
(2) If a utility applying for allowances from the
Reserve has already received certification of net
income neutrality from the Secretary of Energy in
connection with aprevious applicationfor allowances,
and the ratemaking methods or procedures that ensure
net income neutrality have not been altered, the
applicant shall certify that the ratemaking methods
and procedures that led to the original certification are
still in place.
(c) Verification of energy savings methodology. For
the purposes of paragraph (a)(ll) of this section:
/
. (1) Applicants subject to the ratemaking jurisdiction
of a State utility regulatory authority shall use the
energy conservation verification methodology
approved by such authority in support of energy
conservation applications under this subpart and part
72 of this chapter, provided that
(i) The authority in question uses this methodology to
determine the applicant's entitlement to performance-
based rate adjustments, which permit a utility's rates
to be adjusted for additional kilowatt hours saved due
to the utility's energy conservation programs;
(ii) Such performance based rate adjustments are
subject to modification either prospectively or
retrospectively to reflect periodic evaluations of energy
savings secured by .the applicant; and
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APPENDIX 5
(iii) Hie applicant has provided the Administrator
with a description of the State utility regulatory
authority's verification methodology and
documentation that the requirements of this paragraph
(c) have been met.
(2) All other applicants, including applicants whose
rates are not subject to the ratemaking jurisdiction of
a State utility regulatory authority shall demonstrate
to the satisfaction of the Administrator through
submission of documentation that savings have been
achieved and may use the EPA Conservation
Verification Protocol.
(3) All records of verification of energy savings shall
be kept on file by the applicant for a period of 3 years.
The Administrator may extend this period for cause at
any time prior to the end of 3 years by notifying the
applicant in writing.
(4) The Administrator reserves the right to conduct
independent reviews, analyses, or audits to ascertain
mat the verification is valid and correct. If the
Administrator determines that the verification is not
valid or correct, the Administrator may revise the
allocation of allowances to an applicant or require the
surrender of allowances from the applicant's Allowance
Tracking System account.
(d) Calculation of allowances to be allocated.
(1) In the case of an application submitted on the basis
of qualified energy conservation measures, the sulfur
dioxide emissions tonnage deemed avoided for any
calendar year shall be equal to the product of:
(A)x(Bl
20001bs/ton
(Rounded to the nearest ton)
Where:
(A) = the kilowatt hours that were not, but would
otherwise have been, supplied by the utility during
such year in the absence of such qualified energy
conservation measures.
(B) - 0.004 Ibs. of sulfur dioxide per kilowatt hour.
(2) In the case of an appl ication submitted on the basis
of qualified renewable energy generation, the sulfur
dioxide emissions tonnage deemed avoided for any
calendar year shall be equal to the product of:
(AlxfBl
2000Ibs/ton
(Rounded to the nearest ton)
Where:
(A) = the actual kilowatt hours of qualified renewable
energy generated or purchased by the applicant (based
on the qualified renewable energy generation portion
for hybrid generation).
(B) = 0.004 Ibs. of sulfur dioxide per kilowatt hour.
(e) Certification by Applicant's Certifying Official.
(1) Certification of all application requirements,
including the net income neutrality requirements,
shall be made by a certifying official of the applicant
upon such official's verification of all information and
documentation submitted.
(2) The applicant shall submit a certification statement
signed by the applicant's certifying official that reads
"1 certify under penalty of law that I have personally
examined and am familiar with the information
submitted in this document and all its attachments.
Based on my inquiry of those individuals with primary
responsibility for obtaining the information, I certify
that the information is to the best of my knowledge and
belief true, accurate, and complete. I am aware mat
there are significant penalties for submitting false
material information, or omitting material information,
including the possibility of fine or imprisonment for
violations."
(f) Certification by State Utility Regulatory Authority.
Applicants subject to the ratemaking jurisdiction of a
State utility regulatory authority shall include in their
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APPENDIX 5
Reprint of Regulation
applications a certification by the State utility regulatory
authority's certifying official that it has reviewed the
application, including supporting documentation, and
finds it to be accurate, complete, and consistent with
all applicable requirements of this subpart.
(g) Time period to apply. (1) Beginning no earlier
than July 1,1993, and no earlier than July 1 of each
subsequent year, applicants may apply to the
Administrator for allowances from the Reserve for
emissions avoided in a previous year or years by use
of qualified energy conservation measures or qualified
renewable energy generation that became operational
during the period of applicability; and
(2) Beginning no earlier, than January 1, 1993, any
applicant may apply to the Secretary of Energy for the
Secretary's certification of net income neutrality
where the application is based on the use of one or
more qualified energy conservation measures.
(3) Applications will be received by the Administrator
and the Secretary of Energy until January 2, 2010,
pursuant to §73.80(c), or until no allowances remain
in the Reserve.
(h) Submittal location. Applicants shall submit one
copy of the. completed Reserve application, not
including the net income neutrality application, via
registered mail to the Administrator at an address to
be specified in later guidance. Applicants shall submit
10 copies of the net income neutrality application via
registered mail to the Department of Energy at the
following address: Department of Energy, Office of
Conservation and Renewable Energy, Mail Stop CE-
10, Room6c-036,1000 Independence Avenue, SW.,
Washington, DC 20585, Ann: Net Income Neutrality
Certification.
§73.83
Secretary of Energy's action on net income neutrality
applications.
(a) First come, first served. The Secretary of Energy
will process and certify net income neutrality
applications on a "first-come, first served" basis,
according to die order, by date and time, in which they
are received from either the applicant or, in the case
of an application submitted to the Administrator and
then forwarded to the Secretary, from the
Administrator.
(b) Deficient applications. If the Secretary of Energy
determines that the net income neutrality certification
application does not meet the requirements of §73.82
(a)(9) and (b), the Secretary will notify the applicant
and the Administrator in writing of the deficiency.
The applicant may then supply additional information
or a new revised application as necessary for the
Secretary to make a determination that the applicant
meets the requirements of §73.28(a)(9) and (b).
Additional information or revised applications will be
processed according to the date of receipt of such
information or revisions.
(c) Notification of approval. The Secretary of Energy
will review the net income neutrality application to
determine whether it meets the requirements of §73.82
(a}(9) and (b) and will certify this finding in writing
to the applicant and to the Administrator within 60
calendar days of receipt of the net income neutrality
application or a revised application, except that die
Secretary may specify a later date for certification.
§73.84
Administrator's action on applications.
(a) First come, first served. The Administrator will
process and approve Allowance Reserve applications,
in whole or in part, on a "first-come, first-served"
basis as established by the order of date of receipt,
provided that the Administrator shall not allocate
more than a total of 30,000 allowances in connection
with applications based on any one of the four
categories of qualified renewable energy generation
enumerated in §73.81(c)(2)(i) and Appendix A(3.1-
3.4).
(b) Deficient applications. An application is deficient
and will be returned by the Administrator if it fails to
meet the requirements set forth in this subpart,
including those set forth in §73.82. A revised
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Reprint of Regulation
APPENDIX 5
application that is submitted after being returned for
failure to meet the requirements of this subpart will be
processed according to the date of receipt of the
revised application.
(c) Notification of approval. Applications that the
Administrator determines to be complete and correct
will be conditionally approved, subject to notification
to EPA of a net income neutrality certification from
the Department of Energy, within 120 calendar days
of receipt. Allowances from the Reserve will be
awarded subject to the Department .of Energy
certification, or, if a DOE certification has already
been issued to the applicant, allocated to applicants
from such applications depending on the availability
of allowances in the Reserve. In the event the initial
application approval is conditioned upon the Secretary
of Energy's certification, final approval will be granted
upon notification of certification by the Secretary of
Energy pursuant to §73.83. The Administrator will
notify applicants of final approval in writing.
(d) Allocation of allowances. Beginning in 1995, the
Administrator will allocate allowances from the Reserve
for each approved application into the applicant's
account or accounts in the Allowance Tracking System.
If the applicant does not have an account in the
Allowance Tracking System, or wishes to open a new
account for the allowances from the Reserve, an
application pursuant to §73.31 (c) must accompany the
application for Reserve allowances.
(e) Partial fulfillment of requests. (1) In the event that
the allowances available in the Reserve are less than
the number that could otherwise be allocated to an
approved applicant's account under the application as
approved, the applicant will receive the allowances
remaining in the Reserve.
(2) In the event that a subaccount is established by
EPA, pursuant to §73.85, and the applicant is making
arequest for allowances not included in the subaccount,
the Allowance Reserve allocations for the approved
applicant will be made, in addition to any that may be
allocated pursuant to paragraph (0(3) of this section,
from any allowances remaining in the Reserve that are
not contained in the subaccount.
(f) Oversubscription of the Reserve.
(l)Intheevent that theReserve becomes oversubscribed
by more than one applicant on a single day, the
allowances remaining in theReserve will bedistributed
on a pro rata basis to applicants meeting the
requirements of §73.82.
(2) If Reserve applications are received by die
Administrator after all allowances from the Reserve
have been allocated, the Administrator will so notify
the appl Scant within 5 business days after receipt of the
application.
(3) In the event that applications meeting the
requirements pursuant to §73.82 are received by the
Administrator prior to February 1,1998, and
(i) All remaining allowances in the Reserve have been
placed in a subaccount pursuant to §73.85; and
(ii) The applicant is not eligible for an allocation of
allowances from the subaccount; the application will
be placed on a waiting list in order of receipt.
(iii) The Administrator will notify the applicant of
such action within 5 business days after receipt of the
application.
(4) If any allowances are returned to theReserve after
February 1, 1998 pursuant to §73.85(c), the
Administrator will review the wait-listed applications
in order of receipt and allocate any remaining
allowances to the approved applicants in the order of
their receipt until no more allowances remain in the
Reserve.
(g) Applications for allowances based on the same
avoided emissions from the same energy conservation
measures or renewable energy generation.
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APPENDIX 5
Reprint of Regulation
(1) Hie Administrator will not award allowances to
morethan one applicant for the same avoided emissions
from die same energy conservation measure or the
same qualified renewable energy generation, and will
process and act on such duplicative applications on a
"first-come, first-serve" basis as determined by the
order of date of receipt.
(2) Any allowances awarded pursuant to two or more
applications received on the same date based on the
same avoided emissions from the same energy
conservation measure or the same renewable electric -
generation will be divided equally between all such
applicants unless the Administrator is otherwisedirected
by all such applicants.
§73.85
Administrator review of the reserve program.
(a) Administrator review of the Reserve and creation
of a subaccount. In the event that an allocation of
allowances from the Reserve pursuant to a pending
application would bringthe total number of allowances
allocated to a number greater than 240,000, the
Administrator will review the distribution of all
allowances allocated as follows:
(1) If at least 60,000 allowances have been allocated
from the Reserve, for each of
(ii) Qualified renewable energy generation, allocations
of allowances will continue pursuant to §73.82, until
no more allowances remain in the Reserve.
(2) If fewer than 60,000 allowances havebeen allocated
for either qualified energy conservation measures or
qualified renewable energy generation, the
Administrator will establish a subaccount for the
allocation of allowances for applications based on the
category for which fewer than 60,000 allowances
have been allocated. The subaccount will contain
allowances equal to 60,000 less the number of
allowances previously allocated for such category.
(b) Allocation of allowances from the subaccount. The
Administrator will allocate allowances from the
subaccount established pursuant to paragraph (a) of
this-sectionio approved and DOE certified applicants
that fulfil] the requirements of this subpart, including
§73.82 and §73.83, on a "first-come, first-served
basis", pursuant to §73.84(a), until the subaccount is
depleted or closed pursuant to paragraph (c) of this
section.
(c) Closure of the subaccount. Unless all allowances
in the subaccount have been previously allocated, the
Administrator will terminate the subaccount not later
than February 1, 1998 and return any allowances
remaining in the subaccount to the general account of
the Reserve. After all Reserve allocations have been
made to applicants with approved and DOE certified
applications subject to §73.84(0(3), the Administrator
will allocateany remaining allowances to any applicants
that meet the requirements of this subpart, including
§73.82 and §73.83, on a "first-come, first-served"
basis, pursuant to §73.84.
(i) Qualified energy conservation measures, and §73.86
State regulatory autonomy.
Nothing in this Subpart shall preclude a state or state
regulatory authority from providing additional
incentives to utilities to encourage investment in any
conservation measures or renewable energy generation.
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