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7.A. - Page 181 of 285 2019 Nonresidential New Construction Reach Code Cost Effectiveness Study Figure 3. Utility Tariffs used based on Climate Zone Climate Zones Electric / Gas Utility Electricity (Time -of -use) Natural Gas IOUs 1-5,11-13,16 PG&E A -1/A-10 G-NR1 5 PG&E / Southern California Gas Company A -1/A-10 G-10 (GN - 10) 6,8-10,14,15 SCE / Southern California Gas Company T0U-GS-1/T0U-GS- 2/TOU-GS-3 G-10 (GN- 10) 7,10,14 San Diego Gas and Electric Company (SDG&E) A -1/A-10 GN -3 Electric POUs 4 City of Palo Alto (CPAU) E-2 n/a 12 Sacramento Municipal Utility District (SMUD) GS n/a 6,7,8,16 Los Angeles Department of Water and Power (LADWP) A-2 (B) n/a The Reach Code Team obtained measure costs through interviews with contractors and California distributors and review of online sources, such as Home Depot and RS Means. Taxes and contractor markups were added as appropriate. Maintenance costs were not included because there is no assumed maintenance on the envelope measures. For HVAC and SWH measures the study assumes there are no additional maintenance cost for a more efficient version of the same system type as the baseline. Replacement costs for inverters were included for PV systems, but the useful life all other equipment exceeds the study period. The Reach Code Team compared the energy benefits with incremental measure cost data to determine cost effectiveness for each measure package. The calculation is performed for a duration of 15 years for all nonresidential prototypes with a 3 percent discount rate and fuel escalation rates based on the most recent General Rate Case filings and historical escalation rates.' Cost effectiveness is presented using net present value and benefit -to -cost ratio metrics. Net Present Value (NPV): The Reach Code Team uses net savings (NPV benefits minus NPV costs) as the cost effectiveness metric. If the net savings of a measure or package is positive, it is considered cost effective. Negative savings represent net costs. A measure that has negative energy cost benefits (energy cost increase) can still be cost effective if the costs to implement the measure are more negative (i.e., material and maintenance cost savings). ♦ Benefit -to -Cost Ratio (B/C): Ratio of the present value of all benefits to the present value of all costs over 15 years (NPV benefits divided by NPV costs). The criteria for cost effectiveness is a B/C greater than 1.0. A value of one indicates the savings over the life of the measure are equivalent to the incremental cost of that measure. ' 2019 TDV Methodology Report, California Energy Commission, Docket number: 16-BSTD-06 https://efiling.energy.ca.gov/GetDocument.aspx?tn=216062 6 2019-07-25 433