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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
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        eyd«d iitxr
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        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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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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                   $, at least one of the following
                              exceed  10% of
       prtgram cost for the program's first year.
       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  
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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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, 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.
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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

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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
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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

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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

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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

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INSTRUCTIONS
Subsequent Years:  Inspection or Default Path
A. Inspection or Default Path  (Steps 19-23)
'^^^^^^jono^^^gmi^^ns^^lms--
>.Z£ii^fiii8^^&^mi*m»^
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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)      
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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*;.--:. ...•,>: ..:,:.•-> ..-,-•-;•.-;•**.,-*•,, ,	 •,. 
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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

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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

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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

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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

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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

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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

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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

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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

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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
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Page 44

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Conservation Verification
            Form
 Form

 Attachment A:  Schedule of Installations

 Attachment B:  Statistical Data

 Attachment C:  Service Adjustments

 Attachment D:  Multiple Measure Programs

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                         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)

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                                                                                             Verification - Pag« 2
                                   [THIS PAGE INTENTIONALLY LEFT BLANK]
EPA Form 7810-11 (3-93)

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                             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

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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

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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

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                                        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)

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;
2
2

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                             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)

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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

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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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                                                                           -
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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

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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)

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-------
            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

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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

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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

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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

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 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

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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

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       Appendix 2:
Useful Lifetimes of Measures

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                           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

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.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.

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                     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

-------
   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

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   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

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                        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)

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                               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
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                     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;
                                                                                           Page 5-5

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APPENDIX S
                            Reprint off Regulation
(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
Page 5-6

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Reprint of Regulation
                                    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
                                                                                             Page 5-7

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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
Page 5-8

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Reprint of Regulation
                                   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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