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7.A. - Page 180 of 285 2019 Nonresidential New Construction Reach Code Cost Effectiveness Study 2.2 Cost Effectiveness The Reach Code Team analyzed the cost effectiveness of the packages by applying them to building prototypes (as applicable) using the life cycle cost methodology, which is approved and used by the Energy Commission to establish cost effective building energy standards (Title 24, Part 6).s Per Energy Commission's methodology, the Reach Code Team assessed the incremental costs of the energy efficiency measure packages and compared them to the energy cost savings over the measure life of 15 years. Incremental costs represent the equipment, installation, replacements, and maintenance costs of the proposed measure relative to the 2019 Title 24 Standards minimum requirements. The energy savings benefits are estimated using both TDV of energy and typical utility rates for each building type: ♦ Time Dependent Valuation: TDV is a normalized monetary format developed and used by the Energy Commission for comparing electricity and natural gas savings, and it considers the cost of electricity and natural gas consumed during different times of the day and year. Simulation outputs are translated to TDV savings benefits using 2019 TDV multipliers and 15 -year discounted costs for the nonresidential measure packages. ♦ Utility bill impacts (On -bill): Utility energy costs are estimated by applying appropriate IOU rates to estimated annual electricity and natural gas consumption. The energy bill savings are calculated as the difference in utility costs between the baseline and proposed package over a 15 - year duration accounting for discount rate and energy cost escalation. In coordination with the IOU rate team, and rate experts at a few electric publicly owned utilities (POUs), the Reach Code Team used the current nonresidential utility rates publicly available at the time of analysis to analyze the cost effectiveness for each proposed package. The utility tariffs, summarized in Figure 3, were determined based on the annual load profile of each prototype, and the most prevalent rate in each territory. For some prototypes there are multiple options for rates because of the varying load profiles of mixed -fuel buildings versus all -electric buildings. Tariffs were integrated in EnergyPro software to be applied to the hourly electricity and gas outputs. The Reach Code Team did not attempt to compare or test a variety of tariffs to determine their impact on cost effectiveness. The currently available and applicable time-of—use (TOU) nonresidential rates are applied to both the base and proposed cases with PV systems.' Any annual electricity production in excess of annual electricity consumption is credited at the applicable wholesale rate based on the approved NEM tariffs for that utility. For a more detailed breakdown of the rates selected refer to Appendix 6.4 Utility Rate Schedules. Note that most utility time -of -use rates will be updated in the near future, which can affect cost effectiveness results. For example, Pacific Gas and Electric Company (PG&E) will introduce new rates for new service connections in late 2019, and existing accounts will be automatically rolled over to new rates in November 2020. 5 Architectural Energy Corporation (January 2011) Life -Cycle Cost Methodology. California Energy Commission. Available at: http://www.energy.ca.gov/title24/2013standards/prerulemaking/documents/general cec documents/2011-01- 14 LCC Methodology 2013.pdf ' Under NEM rulings by the CPUC (D-16-01-144, 1/28/16), all new PV customers shall be in an approved TOU rate structure. As of March 2016, all new PG&E net energy metering (NEM) customers are enrolled in a time -of -use rate. (http://www. pge.com/en/mvhome/saveenergymoney/plans/tou/index. page?). 5 2019-07-25 432