Model Conservation Standards Economic Analysis for for New Single Family and Manufactured Home...

Model Conservation StandardsModel Conservation Standards

Economic AnalysisEconomic Analysis

for for

New Single Family and New Single Family and Manufactured Home ConstructionManufactured Home Construction

May 5, 2009May 5, 2009

slide 2slide 3

What Are theWhat Are the “Model Conservation Standards”? “Model Conservation Standards”?

Act requires that Council’s Plan set Act requires that Council’s Plan set forth model conservation standards forth model conservation standards (MCS) for:(MCS) for:– New and existing buildingsNew and existing buildings– Utility and government conservation Utility and government conservation

programsprograms– Other consumer actionsOther consumer actions

slide 3slide 4

Model Conservation Standards – Model Conservation Standards – Decision CriteriaDecision Criteria

The Act requires that the MCS be set The Act requires that the MCS be set at levels that:at levels that:– achieve achieve all regionally cost-effective power all regionally cost-effective power

savingssavings (i.e., cost less than new generation ); (i.e., cost less than new generation ); and,and,

– that are that are economically feasible for economically feasible for consumersconsumers, taking into account financial , taking into account financial assistance that may be made available assistance that may be made available through Bonnevillethrough Bonneville

slide 4

Where Are We?Where Are We?(Thermal Shell Only)(Thermal Shell Only)

0%10%20%30%40%50%60%70%80%90%

100%

Rela

tive U

se

Zone 1 Zone 2 Zone 3

1983 1986 1989 1992 2009 MCS

slide 5

Where Are We?Where Are We?Other MeasuresOther Measures

Oregon CodeOregon Code– Requires ~50% of lamps be “CFL” equivalentRequires ~50% of lamps be “CFL” equivalent– Requires use of PTCS duct sealing Requires use of PTCS duct sealing oror higher efficiency higher efficiency

Heat Pump (HSPF 8.5)Heat Pump (HSPF 8.5) Washington CodeWashington Code

– Will require (July 2010) “duct sealing” or interior ductsWill require (July 2010) “duct sealing” or interior ducts Montana & IdahoMontana & Idaho

– ““Scheduled” to adopt 2009 IECC which requires better Scheduled” to adopt 2009 IECC which requires better insulated above grade and below grade walls, duct insulated above grade and below grade walls, duct tightening (0.08 cfm/sq.ft) and limits some “loophole” tightening (0.08 cfm/sq.ft) and limits some “loophole” equipment tradeoffs. equipment tradeoffs.

slide 6slide 9

Analytical Approach – Analytical Approach – Regional Cost EffectivenessRegional Cost Effectiveness

Use forecast of future market prices and Use forecast of future market prices and load shape of savings to establish “energy load shape of savings to establish “energy value”value”

Include T&D Benefits to establish “capacity Include T&D Benefits to establish “capacity value”value”

Incorporate “risk” by adjusting future Incorporate “risk” by adjusting future market value (+/-) based on portfolio market value (+/-) based on portfolio analysis modeling resultsanalysis modeling results

slide 7

Analytical Approach –Analytical Approach –Economic FeasibilityEconomic Feasibility

Use “lowest life cycle cost” code compliant home for each Use “lowest life cycle cost” code compliant home for each heating zone as “base case,” heating zone as “base case,” independent of space independent of space conditioning system type and including lighting and water conditioning system type and including lighting and water heating.heating.

Compute life cycle ownership cost of new home with Compute life cycle ownership cost of new home with increased levels of efficiency, including HVAC, DHW & increased levels of efficiency, including HVAC, DHW & lightinglighting

Use “Monte Carlo” model to identify lowest average “life-Use “Monte Carlo” model to identify lowest average “life-cycle” cost package for each climate zone by testing cycle” cost package for each climate zone by testing multiple (1500+) combinations of values for major input multiple (1500+) combinations of values for major input assumptions, e.g. mortgage rates, retail electric rates, assumptions, e.g. mortgage rates, retail electric rates, marginal tax rates, thermal shell efficiency, HVAC marginal tax rates, thermal shell efficiency, HVAC equipment efficiency, lighting efficiency, etc.equipment efficiency, lighting efficiency, etc.

slide 8

Scope of AnalysisScope of Analysis

New Single Family Construction New Single Family Construction Analysis covers thermal shell, HVAC, Hot Water Heating Analysis covers thermal shell, HVAC, Hot Water Heating

& Lighting improvements to homes with:& Lighting improvements to homes with:– Zonal Electric HeatZonal Electric Heat– Air Source heat pumps Air Source heat pumps – Electric Force-air furnaces with and without central air Electric Force-air furnaces with and without central air

conditioningconditioning Tested:Tested:

– Eleven shell improvement measuresEleven shell improvement measures– Three HVAC equipment efficiency levelsThree HVAC equipment efficiency levels– Three HVAC duct efficiency levelsThree HVAC duct efficiency levels– Four Water Heating Efficiency LevelsFour Water Heating Efficiency Levels– Four lighting efficiency improvement levelsFour lighting efficiency improvement levels

Efficiency Packages – Site Built HomesEfficiency Packages – Site Built Homes

Thermal Shell OptionThermal Shell Option HVAC System OptionHVAC System Option Duct Duct SystemSystem

OptionOption

HVAC HVAC CommissioningCommissioning

OptionOption

Lighting Lighting Power Density Power Density (W) Option(W) Option

DHW DHW SystemSystem

OptionOption

Above Grade Wall R19 Std - R21 Above Grade Wall R19 Std - R21 AdvAdv

ZonalZonal StandardStandard NoNo 1.751.75 EF 0.90EF 0.90

Above Grade Wall R21 Std - R21 Above Grade Wall R21 Std - R21 Std w/R5 Std w/R5

Electric FAF w/o ACElectric FAF w/o AC PTCSPTCS YesYes 1.11.1 EF 0.92EF 0.92

Above Grade Wall R21 Std w/R5 Above Grade Wall R21 Std w/R5 - R30 (SSP)- R30 (SSP)

Electric FAF w/ Central ACElectric FAF w/ Central AC InteriorInterior 0.80.8 EF 0.94EF 0.94

Above Grade Wall R30 SSP - Above Grade Wall R30 SSP - R33 (DBL)R33 (DBL)

Heat Pump HSPF 7.7/SEER 13Heat Pump HSPF 7.7/SEER 13 NoneNone 0.60.6 EF 2.2EF 2.2

Attic R38 - R49 AdvancedAttic R38 - R49 Advanced Heat Pump HSPF 8.5/SEER 14Heat Pump HSPF 8.5/SEER 14

Attic R49 Advanced - R60 Attic R49 Advanced - R60 AdvancedAdvanced

Heat Pump HSPF 9.0/SEER 14Heat Pump HSPF 9.0/SEER 14

Below Grade Wall R21 Std to Below Grade Wall R21 Std to R21 w/R5R21 w/R5

Floor R30 - R38 w/12" TrussFloor R30 - R38 w/12" Truss

Infiltration 0.35 ach - 0.20 ach Infiltration 0.35 ach - 0.20 ach w/Heat Recovery Ventilationw/Heat Recovery Ventilation

Slab R0 - R10 Full Slab w/R5 TBSlab R0 - R10 Full Slab w/R5 TB

slide 10

Efficiency Packages – Manufactured Efficiency Packages – Manufactured HomesHomes

Thermal Shell OptionThermal Shell Option HVAC System OptionHVAC System Option Duct Duct SystemSystem

OptionOption

HVAC HVAC CommissioningCommissioning

OptionOption

Lighting Lighting Power Density Power Density (W) Option(W) Option

DHW DHW SystemSystem

OptionOption

Attic R19 - R25Attic R19 - R25 ZonalZonal StandardStandard NoNo 1.751.75 EF 0.90EF 0.90

Attic R25 - R30 Attic R25 - R30 Electric FAF w/o ACElectric FAF w/o AC PTCSPTCS YesYes 1.11.1 EF 0.92EF 0.92

Attic R30 - R38Attic R30 - R38 Electric FAF w/ Central ACElectric FAF w/ Central AC InteriorInterior 0.80.8 EF 0.94EF 0.94

Attic R38 - R49Attic R38 - R49 Heat Pump HSPF 7.7/SEER 13Heat Pump HSPF 7.7/SEER 13 NoneNone 0.60.6 EF 2.2EF 2.2

Floor R22 - R33Floor R22 - R33 Heat Pump HSPF 8.5/SEER 14Heat Pump HSPF 8.5/SEER 14

Floor R33 - R44Floor R33 - R44 Heat Pump HSPF 9.0/SEER 14Heat Pump HSPF 9.0/SEER 14

Wall R21 AdvWall R21 Adv

Window Class 30 - Window Class 30 - Class 25Class 25

slide 11slide 10

Life Cycle Cost – Input AssumptionsLife Cycle Cost – Input Assumptions

Mortgage Rate and Term (Based on 1985 – 2007 data)Mortgage Rate and Term (Based on 1985 – 2007 data) Consumer Discount RateConsumer Discount Rate Downpayment (Based on 1985 -2005 data)Downpayment (Based on 1985 -2005 data) Private Mortgage Insurance (for less than 20% down)Private Mortgage Insurance (for less than 20% down) Retail Electricity Price (2007 utility specific average Retail Electricity Price (2007 utility specific average

revenue/kWh)revenue/kWh) Retail Electricity Escalation Rate (6Retail Electricity Escalation Rate (6 thth Plan/Global Insights) Plan/Global Insights) State and Federal Income Tax Rate (2009 Rates)State and Federal Income Tax Rate (2009 Rates) State Property Tax Rate (2008-09 rates)State Property Tax Rate (2008-09 rates) Homeowner’s Insurance RateHomeowner’s Insurance Rate Measure Incremental CostMeasure Incremental Cost Measure Incremental SavingsMeasure Incremental Savings

slide 12slide 11

Life Cycle Cost –Life Cycle Cost – “Uncertainty” Model “Uncertainty” Model

ProblemProblem– All of the major input assumptions are known to vary All of the major input assumptions are known to vary

over a range, yet each new homebuyer will face unique over a range, yet each new homebuyer will face unique combination of financial conditions combination of financial conditions

– ““Point estimates” for each assumption result in Point estimates” for each assumption result in “Yes/No” answers, when the real conclusion is “Yes/No” answers, when the real conclusion is “sometimes OK, sometimes not so OK”“sometimes OK, sometimes not so OK”

Solution Solution – Use distributions of input assumptions that represent Use distributions of input assumptions that represent

the “probability” that a specific value for each input the “probability” that a specific value for each input will occur to compute the likelihood that a specific will occur to compute the likelihood that a specific level of efficiency is economically feasiblelevel of efficiency is economically feasible

Consumer Life Cycle Cost Model Considers UncertaintyConsumer Life Cycle Cost Model Considers Uncertainty

0

5

10

15

20

25

30

35

40

45

50

0.7% 1.2% 1.6% 2.1% 2.5% 3.0% 3.5% 3.9% 4.4% 4.9%

Retai Electricity Price Escalation Rate

Frequency

0%

2%

4%

6%

8%

10%

12%

14%

16%

5.0% 6.0% 7.0% 8.0% 9.0%

Nominal Morgage Rate (% APR)

Prob

ab

ilit

y (

%)

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Downpayment (% )

Pro

babil

ity (

%)

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Retail Rate (2000$/ kWh)

Sh

are

of

Hom

eb

uyers

(%

)0%

5%

10%

15%

20%

25%

30%

35%

10% 21% 27% 31% 39%

Marginal Federal Income Tax Rate

Sh

are

of

Hom

ebu

yers

(%

)

0%

10%

20%

30%

40%

50%

60%

70%

0.0% 5.1% 7.0% 7.1% 7.8% 9.0%

Marginal State Income Tax Rate

Sh

are

of

Hom

ebu

yers

(%

)

0%

10%

20%

30%

40%

50%

60%

Sh

are

of

Ho

meb

uyers

1.14% 1.23% 1.49%

Frequency Chart

Dollars

Mean = $689.000

.011

.022

.032

.043

0

10.75

21.5

32.25

43

($3,509) ($1,131) $1,247 $3,625 $6,003

1,000 Trials 1,000 Displayed

Forecast: WALL R21 STD+R5

Slab R0 - R10 Full Slab w/R5 TB

Infiltration 0.35 ach - 0.20 ach w/Heat Recovery Ventilation

Floor R30 - R38 w/12" Truss

Below Grade Wall R21 Std to R21 w/R5

Heat Pump HSPF 9.0/SEER 14Attic R49 Adv - R60 Adv

Heat Pump HSPF 8.5/SEER 14Attic R38 - R49 Advanced

EF 2.20.6NoneHeat Pump HSPF 7.7/SEER 13Above Grade Wall R30 SSP - R33 (DBL)

EF 0.940.8InteriorElectric FAF w/ Central ACAbove Grade Wall R21 Std w/R5 - R30 (SSP)

EF 0.921.1YesPTCSElectric FAF w/o ACAbove Grade Wall R21 Std - R21 Std w/R5

EF 0.901.75NoStandardZonalAbove Grade Wall R19 Std - R21 Adv

DHW System Option

Lighting Power Density (W) Option

HVAC Commissioning Option

Duct System OptionHVAC System OptionThermal Shell Option

Slab R0 - R10 Full Slab w/R5 TB

Infiltration 0.35 ach - 0.20 ach w/Heat Recovery Ventilation

Floor R30 - R38 w/12" Truss

Below Grade Wall R21 Std to R21 w/R5

Heat Pump HSPF 9.0/SEER 14Attic R49 Adv - R60 Adv

Heat Pump HSPF 8.5/SEER 14Attic R38 - R49 Advanced

EF 2.20.6NoneHeat Pump HSPF 7.7/SEER 13Above Grade Wall R30 SSP - R33 (DBL)

EF 0.940.8InteriorElectric FAF w/ Central ACAbove Grade Wall R21 Std w/R5 - R30 (SSP)

EF 0.921.1YesPTCSElectric FAF w/o ACAbove Grade Wall R21 Std - R21 Std w/R5

EF 0.901.75NoStandardZonalAbove Grade Wall R19 Std - R21 Adv

DHW System Option

Lighting Power Density (W) Option

HVAC Commissioning Option

Duct System OptionHVAC System OptionThermal Shell Option

0

10

20

30

40

50

60

$1,223 $1,401 $1,579 $1,758 $1,936

Installed Cost EF 2.2 Water Heater

Frequency

Nu

mb

er

of

Ob

serv

ati

ons

Cost for Input Set 2

Cost for Input Set 1

Distribution of Life Cycle Cost for Distribution of Life Cycle Cost for A Single Upgrade PackageA Single Upgrade Package

240 241 243 244 245 246 247 248 249 250

Life Cycle Cost (NPV 2006 000$)

Mean LCCMean LCC

slide 15

Zone 1 – Life Cycle Cost Zone 1 – Life Cycle Cost Distribution for “Best Package”Distribution for “Best Package”

0

5

10

15

20

25

30

$66,000 $126,000 $186,000 $246,000 $306,000 $366,000 $426,000 $486,000

Life Cycle Cost (2006$)

Fre

qu

en

cy

slide 16

Base Case Life Cycle Cost – Base Case Life Cycle Cost – Single FamilySingle Family

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000


Heating Climtate Zone

Lif

e C

ycle

Co

st (

2006

$)

Zonal

Heat Pump HSPF 7.7/SEER 13

Elec FAF No AC

Elec FAF SEER 13 Central AC

slide 17

Base Case Life Cycle Cost – Base Case Life Cycle Cost – Manufactured HomeManufactured Home

$94,000

$96,000

$98,000

$100,000

$102,000

$104,000

$106,000

$108,000

$110,000

$112,000


Heating Climtate Zone

Lif

e C

ycle

Co

st (

2006

$)


Elec FAF No AC


slide 18

Base Case Annual Energy Use* – Base Case Annual Energy Use* – Single FamilySingle Family

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000


Heating Climate Zone

En

erg

y U

se (

kWh

/yr)

Zonal


Elec FAF No AC


*Includes space conditioning, water heating & lighting

slide 19

Base Case Energy Use* – Base Case Energy Use* – Manufactured HomeManufactured Home

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000



En

erg

y U

se

(k

Wh

/yr)


Elec FAF No AC


*Includes space conditioning, water heating & lighting

slide 20

Base vs Lowest Life Cycle Cost – Base vs Lowest Life Cycle Cost – Single FamilySingle Family

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000



Lif

e C

ycle

Co

st (

2006

$)

Base-Zonal

Base-HP

Lowest LCC

slide 21

Base vs Lowest Life Cycle Cost – Base vs Lowest Life Cycle Cost – Manufactured HomeManufactured Home

$80,000

$85,000

$90,000

$95,000

$100,000

$105,000

$110,000



Lif

e C

ycle

Co

st (

2006

$)

Base

Lowest LCC

slide 22

Single Family – Zone 1Single Family – Zone 1Energy UseEnergy Use

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Base-Zonal Base-HP Lowest LCC All Cost-Effective

Tota

l A

nnual U

se (

kWh/y

r)

Lighting

Water Heating

Space Conditioning

slide 23


0

5,000

10,000

15,000

20,000

25,000

Base-Zonal Base-HP* Lowest LCC All Cost-Effective

Tota

l A

nnual U

se (

kWh/y

r) Lighting

Water Heating

Space Conditioning

*Zone 2 HP higher than zonal due to addition of air conditioning

slide 24


0

5,000

10,000

15,000

20,000

25,000

30,000

Base-Zonal Base-HP Lowest LCC All Cost-Effective

Tota

l A

nnual U

se (

kWh/y

r)

Lighting

Water Heating

Space Conditioning

slide 25

Manufactured Home – Zone 1Manufactured Home – Zone 1Energy UseEnergy Use

0

2,000

4,000

6,000

8,000

10,000

12,000

Base Lowest LCC All Cost-Effective

Tota

l A

nnual U

se (

kWh/y

r) Lighting

Water Heating

Space Conditioning

slide 26


0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000


Tota

l A

nnual U

se (

kWh/y

r) Lighting

Water Heating

Space Conditioning

slide 27


0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000


Tota

l A

nnual U

se (

kWh/y

r) Lighting

Water Heating

Space Conditioning

slide 28

Base vs Lowest Life Cycle Cost – Base vs Lowest Life Cycle Cost – First Cost: Single FamilyFirst Cost: Single Family

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000



Fir

st C

ost

(20

06$)

Base-Zonal

Base-HP

Lowest LCC

slide 29

Base vs Lowest Life Cycle Cost – Base vs Lowest Life Cycle Cost – First Cost: Manufactured HomeFirst Cost: Manufactured Home

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000



Fir

st C

ost

(20

06$)

Base

Lowest LCC

Zone 1: Life Cycle Cost Minimum & Regional Zone 1: Life Cycle Cost Minimum & Regional Cost-Effective Thermal Shell PackagesCost-Effective Thermal Shell Packages

ComponentComponent Regionally Cost-Regionally Cost-EffectiveEffective

Minimum Life Minimum Life Cycle CostCycle Cost

Wall –Above GradeWall –Above Grade R21 Advanced FramingR21 Advanced Framing R21 Advanced FramingR21 Advanced Framing

Wall –Below GradeWall –Below Grade R19R19 R19R19

AtticAttic R38 STDR38 STD R38 STDR38 STD

VaultVault R30R30 R30R30

FloorFloor R30R30 R30R30

WindowWindow Class 30Class 30 Class 30Class 30

DoorDoor R5R5 R5R5

SlabSlab R10 Full Under SlabR10 Full Under Slab R10 Full Under SlabR10 Full Under Slab

Wall – Ext. Below grade Wall – Ext. Below grade R10R10 R10R10

Infiltration Infiltration Air Sealing w/HRVAir Sealing w/HRV Current PracticeCurrent Practice

slide 31

Zone 1: Life Cycle Cost MinimumZone 1: Life Cycle Cost MinimumHVAC, Lighting & DHWHVAC, Lighting & DHW

HSPF 7.7 /SEER 13 Heat Pump w/ Interior Ducts HSPF 7.7 /SEER 13 Heat Pump w/ Interior Ducts & PTCS System Commissioning & Controls& PTCS System Commissioning & Controls

Lighting Power Density = 0.6 Watts/sq.ft.Lighting Power Density = 0.6 Watts/sq.ft. Heat Pump Water HeaterHeat Pump Water Heater Average Use = 7,600 kWh/yrAverage Use = 7,600 kWh/yr LCC = $307,500LCC = $307,500 LCC Savings = $6,748 ($6870 over HP Base)LCC Savings = $6,748 ($6870 over HP Base) First Cost Increase = $8,602 ($3,655 over HP First Cost Increase = $8,602 ($3,655 over HP

Base)Base) Energy Savings = 8,310 kWh/yr (4,120 kWh/yr Energy Savings = 8,310 kWh/yr (4,120 kWh/yr

over HP Base)over HP Base)






AtticAttic R49 AdvancedR49 Advanced R38 STDR38 STD




DoorDoor R5R5 R5R5




slide 33



Lighting Power Density = 0.6 Watts/sq.ft.Lighting Power Density = 0.6 Watts/sq.ft. Heat Pump Water HeaterHeat Pump Water Heater Average Use = 10,460 kWh/yrAverage Use = 10,460 kWh/yr LCC = $315,460LCC = $315,460 LCC Savings = $9,150 ($10,380 over HP Base)LCC Savings = $9,150 ($10,380 over HP Base) First Cost Increase = $8,600 ($3,655 over HP First Cost Increase = $8,600 ($3,655 over HP

Base)Base) Energy Savings = 9,090 kWh/yr (10,040 over HP Energy Savings = 9,090 kWh/yr (10,040 over HP

Base)Base)






AtticAttic R49 AdvancedR49 Advanced R38 STDR38 STD




DoorDoor R5R5 R5R5




slide 35



Lighting Power Density = 0.6 Watts/sq.ft.Lighting Power Density = 0.6 Watts/sq.ft. Heat Pump Water HeaterHeat Pump Water Heater Average Use = 12,455 kWh/yrAverage Use = 12,455 kWh/yr LCC = $242,300LCC = $242,300 LCC Savings = $13,070 ($14,640 over HP Base)LCC Savings = $13,070 ($14,640 over HP Base) First Cost Increase = $8,600 ($3655 over HP First Cost Increase = $8,600 ($3655 over HP

Base)Base) Energy Savings = 12,300 kWh/yr (12,425 kWh/yr Energy Savings = 12,300 kWh/yr (12,425 kWh/yr

over HP Base)over HP Base)

slide 36

Zone 1 – Manufactured Home Base CaseZone 1 – Manufactured Home Base CaseLowest Life Cycle Cost Code Compliant Lowest Life Cycle Cost Code Compliant

PackagePackage

ComponentComponent Base CaseBase Case

WallWall R19R19

AtticAttic R25R25

Vault - JoistedVault - Joisted R25R25

Vault - TrussedVault - Trussed R25R25

FloorFloor R30R30

WindowWindow Class 35Class 35

DoorDoor R5R5

HVAC System – Heat HVAC System – Heat Pump HSPF 7.7/SEER Pump HSPF 7.7/SEER 1313

DHW – EF90DHW – EF90 Average Use (kWh) = Average Use (kWh) =

10,13010,130 First Cost = $8,730First Cost = $8,730 Minimum LCC = Minimum LCC =

$99,750$99,750

slide 37



Minimum Life Cycle Minimum Life Cycle CostCost

Wall –Above GradeWall –Above Grade R21 AdvancedR21 Advanced R21 AdvancedR21 Advanced

AtticAttic R38R38 R38R38




DoorDoor R5R5 R5R5

slide 38

Zone 1: Manufactured Home Life Cycle Zone 1: Manufactured Home Life Cycle Cost MinimumCost Minimum

HVAC, Lighting & DHWHVAC, Lighting & DHW HSPF 7.7 /SEER 13 Heat Pump w/ Interior Ducts HSPF 7.7 /SEER 13 Heat Pump w/ Interior Ducts

& PTCS System Commissioning & Controls& PTCS System Commissioning & Controls Lighting Power Density = 0.6 Watts/sq.ft.Lighting Power Density = 0.6 Watts/sq.ft. Heat Pump Water HeaterHeat Pump Water Heater Average Use = 5,430 kWh/yrAverage Use = 5,430 kWh/yr LCC = $93,705LCC = $93,705 LCC Savings = $6,045LCC Savings = $6,045 First Cost Increase = $2,175First Cost Increase = $2,175 Energy Savings = 4,700 kWh/yrEnergy Savings = 4,700 kWh/yr

slide 39


PackagePackage


WallWall R19R19

AtticAttic R25R25



FloorFloor R30R30


DoorDoor R5R5




$104,170$104,170

slide 40



Minimum Life Cycle Minimum Life Cycle CostCost






DoorDoor R5R5 R5R5

slide 41




slide 42


PackagePackage


WallWall R19R19

AtticAttic R25R25



FloorFloor R30R30


DoorDoor R5R5




$103,075$103,075

slide 43









DoorDoor R5R5 R5R5

slide 44




slide 45

Background SlidesBackground Slides

slide 46slide 2

What is the “Surcharge Policy”?What is the “Surcharge Policy”?

The Council’s Plan must contain a The Council’s Plan must contain a recommendation to the Administrator recommendation to the Administrator regarding whether the a utility’s failure to regarding whether the a utility’s failure to achieve MCS savings should be subject to a achieve MCS savings should be subject to a surcharge on all of a its power purchases surcharge on all of a its power purchases from Bonnevillefrom Bonneville

Surcharges may not be less than 10%, nor Surcharges may not be less than 10%, nor greater than 50% of Bonneville’s rate.greater than 50% of Bonneville’s rate.

slide 47slide 5

The MCS - A Short History:The MCS - A Short History:Chapter 1Chapter 1

Council adopted first MCS April 27, 1983Council adopted first MCS April 27, 1983– Established space heating performance targets for new Established space heating performance targets for new

electrically heated residences for three Northwest electrically heated residences for three Northwest Climate ZonesClimate Zones

» Less than 6,000 Heating Degree Day (HDD)Less than 6,000 Heating Degree Day (HDD)» 6000 – 8000 HDD*6000 – 8000 HDD*» More than 8000 HDD*More than 8000 HDD*

– MCS requirements were 40% better than toughest MCS requirements were 40% better than toughest existing energy codes in regionexisting energy codes in region

– Recommended that MCS be adopted by January 1, Recommended that MCS be adopted by January 1, 1986 or BPA impose 10% surcharge on utilities serving 1986 or BPA impose 10% surcharge on utilities serving non-complying areasnon-complying areas

*Now Zone 2 = 6000 – 7499 HDD, Zone 3 = 7500 HDD and greater

slide 48slide 6

The MCS – A Short History: The MCS – A Short History: Chapter 2Chapter 2

1983 – 19911983 – 1991– Council sued by Seattle Master Builders contesting Council sued by Seattle Master Builders contesting

legality and level of the MCSlegality and level of the MCS» Conclusion – Ninth Circuit Rules for CouncilConclusion – Ninth Circuit Rules for Council

– Utilities demand that Bonneville sponsor “R&D” Utilities demand that Bonneville sponsor “R&D” project (RSPD) to test “cost-effectiveness” of MCSproject (RSPD) to test “cost-effectiveness” of MCS

» Conclusion – Bonneville finds MCS cost-effectiveConclusion – Bonneville finds MCS cost-effective

– Bonneville, following Council’s Plan, sponsors “early Bonneville, following Council’s Plan, sponsors “early code” adoption and “energy efficient” new homes code” adoption and “energy efficient” new homes marketing program (Super Good Cents)marketing program (Super Good Cents)

» Conclusion – Tacoma adopts MCS, the Region follows . . .Conclusion – Tacoma adopts MCS, the Region follows . . .

slide 49slide 7


Current StatusCurrent Status– Oregon and Washington have energy codes that meet Oregon and Washington have energy codes that meet

or exceed the original MCSor exceed the original MCS– Montana has adopted the 2003 International Energy Montana has adopted the 2003 International Energy

Conservation Code (IECC)Conservation Code (IECC)– Idaho jurisdictions commenced enforcement of 2006 Idaho jurisdictions commenced enforcement of 2006

the International Energy Conservation Code (IECC) on the International Energy Conservation Code (IECC) on January 1, 2008January 1, 2008

– The IECC codes require efficiency levels that are The IECC codes require efficiency levels that are within 15% of the original MCS, meeting Council’s within 15% of the original MCS, meeting Council’s 85% “achievability” target.85% “achievability” target.

slide 50slide 8


It’s Time for Another Cost-Effectiveness ReviewIt’s Time for Another Cost-Effectiveness Review Issues:Issues:

– Are there additional thermal shell measures that are Are there additional thermal shell measures that are “regionally cost-effective” and “economically “regionally cost-effective” and “economically feasible”? (5feasible”? (5thth Plan did not identify any) Plan did not identify any)

– Are there non-thermal shell measures (e.g. HVAC Are there non-thermal shell measures (e.g. HVAC equipment, lighting, water heating, appliances) that equipment, lighting, water heating, appliances) that should be considered for inclusion?should be considered for inclusion?

– Should the MCS consider carbon mitigation cost risk Should the MCS consider carbon mitigation cost risk independent of the incorporating future energy cost into independent of the incorporating future energy cost into the economic analysis?the economic analysis?

slide 51

Probability Distribution ofProbability Distribution ofNominal Mortgage Rates*Nominal Mortgage Rates*

0%

2%

4%

6%

8%

10%

12%

14%

Nominal Morgage Rate (% APR)

Pro

babili

ty (

%)

*Source: Federal Housing Finance Board Monthly Interest Rate Survey APR for new homes 1985-2007

Mean = 6.2%Mean = 6.2%

slide 52

Probability Distribution of Probability Distribution of Downpayment Amount*Downpayment Amount*

0%

1%

1%

2%

2%

3%

3%

4%

0% 20% 40% 60% 80% 100%

Downpayment (%)

Pro

babili

ty (

%)

Mean = 27%Mean = 27%

*Source: Federal Housing Finance Board Monthly Interest Rate Survey for Oregon

slide 53

Probability Distribution of Electricity Probability Distribution of Electricity Price Escalation Rates – Zone 1Price Escalation Rates – Zone 1

0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%4.5%5.0%

0.69

%

0.97

%

1.24

%

1.52

%

1.80

%

2.08

%

2.36

%

2.64

%

2.91

%

3.19

%

3.47

%

3.75

%

4.03

%

4.30

%

4.58

%

4.86

%

5.14

%

Nominal Annual Electricity Price Escalation Rate

Pro

babili

ty (

%)

Source: Northwest Power and ConservationCouncil Draft 6th Power Plan

slide 54


0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%4.5%5.0%

0.87

%

1.13

%

1.40

%

1.66

%

1.93

%

2.19

%

2.46

%

2.72

%

2.99

%

3.25

%

3.52

%

3.78

%

4.05

%

4.31

%

4.58

%

4.84

%

5.11

%


Pro

babili

ty (

%)


slide 55


0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%4.5%5.0%

0.46

%

0.72

%

0.98

%

1.24

%

1.50

%

1.76

%

2.02

%

2.28

%

2.54

%

2.79

%

3.05

%

3.31

%

3.57

%

3.83

%

4.09

%

4.35

%

4.61

%


Pro

babili

ty (

%)


slide 56

Probability Distribution of Base Probability Distribution of Base Year Electricity Prices – Zone 1Year Electricity Prices – Zone 1

0%

5%

10%

15%

20%

25%

30%

$0.0

22

$0.0

35

$0.0

41

$0.0

42

$0.0

44

$0.0

47

$0.0

48

$0.0

49

$0.0

51

$0.0

52

$0.0

53

$0.0

54

$0.0

55

$0.0

56

$0.0

58

$0.0

63

$0.0

73


Share

of

Hom

ebuye

rs (

%)

Source: Energy Information Administration residential retail revenue and customer count data for 2007. Shares based on share of new residential customers added between 2000 and 2007.

slide 57

Probability Distribution of Base Probability Distribution of Base Year Electricity Prices Zone 2Year Electricity Prices Zone 2

0%5%

10%15%20%25%30%35%40%45%50%

$0.0

29

$0.0

31

$0.0

42

$0.0

45

$0.0

48

$0.0

49

$0.0

50

$0.0

52

$0.0

53

$0.0

56

$0.0

56

$0.0

57

$0.0

59

$0.0

64

$0.0

68

$0.0

77


Share

of

Hom

ebuye

rs (

%)


slide 58

Probability Distribution of Base Probability Distribution of Base Year Electricity Prices Zone 3Year Electricity Prices Zone 3

0%

10%

20%

30%

40%

50%

60%

$0.0

43

$0.0

46

$0.0

46

$0.0

47

$0.0

49

$0.0

49

$0.0

51

$0.0

59

$0.0

59

$0.0

60

$0.0

64

$0.0

68

$0.0

68

$0.0

69

$0.0

71

$0.0

72

$0.0

73


Share

of

Hom

ebuye

rs (

%)


slide 59

Probability Distribution of Marginal Probability Distribution of Marginal Federal Income Tax Rates – Zone 1 Federal Income Tax Rates – Zone 1

0%

5%

10%

15%

20%

25%

30%

10% 15% 20% 25% 26% 28% 29% 33% 35%


Share

of

Hom

ebuye

rs (

%)

Source: Internal Revenue ServiceIndividual Tax Returns Data for 2007

slide 60

Probability Distribution of Marginal Probability Distribution of Marginal Federal Income Tax Rates – Zone 2Federal Income Tax Rates – Zone 2

0%

5%

10%

15%

20%

25%

30%

10% 15% 20% 25% 26% 28% 29% 33% 35%


Share

of

Hom

ebuye

rs (

%)


slide 61

Probability Distribution of Marginal Probability Distribution of Marginal Federal Income Tax Rates – Zone 3 Federal Income Tax Rates – Zone 3

0%

5%

10%

15%

20%

25%

30%

35%

10% 15% 20% 25% 26% 28% 29% 33% 35%


Share

of

Hom

ebuye

rs (

%)


slide 62

Probability Distribution of Marginal Probability Distribution of Marginal State Income Tax Rates - IdahoState Income Tax Rates - Idaho

0%

10%

20%

30%

40%

50%

60%

70%

5.1% 7.1% 7.8%


Share

of

Hom

ebuye

rs (

%)

Source: Based on Internal Revenue Service for Idaho Individual Tax Returns Data for 2007

slide 63

Probability Distribution of Marginal Probability Distribution of Marginal State Income Tax Rates - MontanaState Income Tax Rates - Montana

0%

5%

10%

15%

20%

25%

30%

3.0% 5.0% 6.0% 8.0% 9.0% 10.0% 11.0%


Share

of

Hom

ebuye

rs (

%)

Source: Based on Internal Revenue Service for Montana Individual Tax Returns Data for 2007

slide 64

Probability Distribution of Marginal Probability Distribution of Marginal State Income Tax Rates - OregonState Income Tax Rates - Oregon

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

7.0% 9.0%


Share

of

Hom

ebuye

rs (

%)

Source: Based on Internal Revenue Service for Oregon Individual Tax Returns Data for 2007

slide 65

Probability Distribution of Probability Distribution of Property Tax RatesProperty Tax Rates

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Sh

are

of

Ho

me

bu

ye

rs

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

0.70%

0.80%

0.90%

1.00%

Pro

pe

rty

Ta

x R

ateShare

Rate

Source: Idaho, Montana, Oregon and Washington Departments of Revenue Property Tax Statistics Fiscal Year 2008-2009

slide 66

Private Mortgage Insurance Private Mortgage Insurance AssumptionsAssumptions

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

0% 5% 10% 15% 20%

Downpayment Amount

PM

I (S

hare

of

Loan

Am

ou

nt)

http://www.westga.edu/~bquest/1997/costof.html

slide 67

Probability Distribution of Incremental Probability Distribution of Incremental Cost for HSPF 7.7/SEER 13 Heat PumpCost for HSPF 7.7/SEER 13 Heat Pump

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

$3,015 $3,387 $3,759 $4,131 $4,502

Cost to Consumer (2006$)

Pro

babili

ty

Mean = $3884Mean = $3884

Source: Regional Technical Forum

slide 68

Probability Distribution of HSPF 8.5/ Probability Distribution of HSPF 8.5/ SEER 14 Air Source Heat Pump CostSEER 14 Air Source Heat Pump Cost

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

$5,208 $5,726 $6,244 $6,762 $7,280


Pro

bab

ility

Mean = $5290Mean = $5290


slide 69

Probability Distribution of HSPF 9.0/ Probability Distribution of HSPF 9.0/ SEER 14 Air Source Heat Pump CostSEER 14 Air Source Heat Pump Cost

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

$5,464 $6,085 $6,707 $7,328 $7,949


Pro

bab

ility

Mean = $5580Mean = $5580


slide 70

Probability Distribution of Duct Probability Distribution of Duct Sealing CostSealing Cost

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

$226 $246 $266 $286 $306 $326 $346 $366 $386 $406

Cost to Consumer

Pro

babili

ty

Mean = $325Mean = $325


slide 71

Probability Distribution of Heat Probability Distribution of Heat Pump System Commissioning CostPump System Commissioning Cost

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

$200 $205 $210 $215 $220 $225 $230 $235 $240 $245

Cost to Consumer

Pro

babili

ty

Mean = $210Mean = $210


slide 72

Heat Pump Water Heater Heat Pump Water Heater Installed CostInstalled Cost

0

10

20

30

40

50

60

$1,223 $1,401 $1,579 $1,758 $1,936


Frequency

Mean = $1506Mean = $1506

slide 73

Base Case Water Heater Base Case Water Heater Installed CostInstalled Cost

0

50

100

150

200

250

$450 $500 $550 $600 $650 $700 $750 $800


Frequency

Mean = $644Mean = $644

slide 74

Zone 1 - Base CaseZone 1 - Base CaseLowest Life Cycle Cost Code Lowest Life Cycle Cost Code

Compliant PackageCompliant Package


Wall –Above GradeWall –Above Grade R21 STDR21 STD

Wall –Below GradeWall –Below Grade R19R19

AtticAttic R38 STDR38 STD



FloorFloor R30R30


DoorDoor R5R5

SlabSlab R10R10

Wall – Ext. Below Wall – Ext. Below grade grade

R10R10

HVAC System – ZonalHVAC System – Zonal DHW – EF90DHW – EF90 Average Use (kWh) = Average Use (kWh) =

17,575 17,575 First Cost = $2,333First Cost = $2,333 Minimum LCC = Minimum LCC =

$314,247$314,247

slide 75


Compliant PackageCompliant PackageComponentComponent Base CaseBase Case






FloorFloor R30R30


DoorDoor R5R5

SlabSlab R10R10


R10R10

HVAC System – ZonalHVAC System – Zonal DHW – EF90DHW – EF90 Average Use (kWh) – Average Use (kWh) –


$324,610$324,610

slide 76


Compliant PackageCompliant PackageComponentComponent Base CaseBase Case






FloorFloor R30R30


DoorDoor R5R5

SlabSlab R10R10


R10R10

HVAC System – ZonalHVAC System – Zonal DHW – EF90DHW – EF90 Average Use (kWh) – Average Use (kWh) –

26,750 kWh/yr26,750 kWh/yr First Cost - $2,300First Cost - $2,300 Minimum LCC = Minimum LCC =

$255,370$255,370

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