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    ANNUAL REPORT FOR ENERGY EFFICIENCY PROGRAMS CALENDAR YEAR 2016 NMPRC EFFICIENT USE OF ENERGY RULE 17.7.2 NMAC JUNE 30, 2017 1 EPE’s PY2016 Energy Efficiency Report


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    Table of Cont ent s SECTION I. EXECUTIVE SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 INTRODUCTION ............................................................................................................................ 3 SUMMARY OF RESULTS.................................................................................................................. 3 2016 CUMULATIVE P ROGRAM GOALS ............................................................................................. 5 SECTION II. PROGRAM DESCRIPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 EDUCATIONAL P ROGRAM............................................................................................................... 6 LivingWise® Program ....................................................................................................................................................... 6 RESIDENTIAL P ROGRAMS ............................................................................................................... 6 Residential Home Efficien cy Progra m .......................................................................................................................... 6 Residential High Efficien cy Cooling Program .............................................................................................................. 6 Residential CFL & LED Progra m ..................................................................................................................................... 7 ENERGY STAR® New Homes Progra m ........................................................................................................................... 7 LOW INCOME P ROGRAM................................................................................................................ 7 New Mexico EnergySaver Progra m .............................................................................................................................. 7 COMMERCIAL P ROGRAMS.............................................................................................................. 8 Small Commercial Comp rehensive Prog ram ............................................................................................................... 8 SCORE Plus Progra m........................................................................................................................................................ 8 AWARENESS BUILDING CAMPAIGN .................................................................................................. 8 Awareness Building & Trade Ally Campaign ............................................................................................................... 8 SECTION III. ENERGY EFFICIENCY RULE REPORTING REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . 10 DOCUMENTATION OF P ROGRAM EXPENDITURES .............................................................................. 10 ESTIMATED AND ACTUAL CUSTOMER P ARTICIPATION AND SAVINGS LEVELS.......................................... 11 ESTIMATED AND ACTUAL COSTS (EXPENSES) AND AVOIDED COSTS (BENEFITS) ..................................... 12 COST EFFECTIVENESS EVALUATION ................................................................................................ 12 SELF-DIRECTED P ROGRAMS.......................................................................................................... 13 INDEPENDENT MEASUREMENT AND VERIFICATION REPORT ............................................................... 13 P ROGRAM EXPENDITURES NOT COVERED IN THE INDEPENDENT M&V REPORT..................................... 13 ANNUAL ECONOMIC BENEFITS BY P ROGRAM................................................................................... 13 NON-ENERGY BENEFITS............................................................................................................... 14 TARIFF RECONCILIATION .............................................................................................................. 14 ATTACHMENT A: EVALUATION OF EL PASO ELECTRIC COMPANY 2016 DSM PORTFOLIO....... 16 2 EPE’s PY2016 Energy Efficiency Report


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    Section I. Executive Summary Introduction El Paso Electric Company (“EPE”) submits its annual report on the performance of EPE’s Energy Efficiency Programs for calendar year 2016 (“2016 Programs"). This Annual Report for Energy Efficiency Programs (“Annual Report”) covers the program period from January 1, 2016 through December 31, 2016, and relies on the statewide independent evaluator’s report, Evaluation of El Paso Electric Company 2016 DSM Portfolio (“M&V Report”) prepared by ADM Associates, Inc. (“ADM”). The M&V Report is included as Attachment A. The programs evaluated in this Annual Report were approved by the New Mexico Public Regulation Commission (“NMPRC” or “Commission”) in NMPRC Case No. 13-00176-UT on December 18, 2013. Summary of Results This is the ninth annual report on EPE’s energy efficiency programs. Results are based upon independent measurement and verification (“M&V”) by ADM. The following 2016 Programs are included in this Annual Report 1: • LivingWise® Program • Residential Home Efficiency Program • Residential High Efficiency Cooling Program • Residential CFL and LED Program • ENERGY STAR® New Homes Program • New Mexico EnergySaver Program • Small Commercial Comprehensive Program • School and Business Assistance (“SCORE Plus”) Program The following is a short summary of the overall results: • The 2016 Programs were cost effective as measured by the Utility Cost Test (“UCT”). The UCT for the portfolio of programs was 2.81. 2 • The total annual net energy savings was 18,213,422 kWh at the customer meter. • The total 2016 Program expenditures were $5,497,809.04. 1EPE had contracted with JACO Environmental to implement the Appliance Recycling Program; however, JACO was placed into receivership in November 2015. In April 2016, EPE was granted approval to terminate the Appliance Recycling Program by the NMPRC. 2UCTs are based on NMPRC Case No. 13-00176-UT avoided costs. A UCT of greater than one indicates the cost effectiveness of the energy efficiency portfolio or program. 3 EPE’s PY2016 Energy Efficiency Report


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    Table 1 shows the total number of participants or units, the verified annual demand and energy savings, the lifetime energy savings, and the total expenses for the 2016 Programs. Table 1 - Results Summary Annual Annual Lifetime Participants Savings Savings Savings Total Program Program or Units (kW) (kWh) (kWh) Expenses Educational LivingWise Program 3,022 12.93 678,233 5,869,066 $ 156,356.06 Residential Home Efficiency Program 47 15.93 30,022 535,515 $ 9,638.01 High Efficiency Cooling Program 1,573 1,447.72 2,336,053 35,040,797 $ 1,054,985.03 CFL & LED Program* 37,466 370.31 2,782,418 22,802,785 $ 465,070.03 ENERGY STAR New Homes Program 268 148.78 286,746 6,595,156 $ 285,031.72 Low Income New Mexico EnergySaver Program 1,646 209.38 948,818 8,596,208 $ 762,345.63 Commercial Small Commercial Comprehensive Program 124 237.90 1,074,432 15,526,813 $ 356,921.46 SCORE Plus Program 133 3,453.67 10,076,700 150,534,944 $ 2,233,023.69 Marketing for All Programs $ 109,957.63 Awareness Building Campaign $ 64,479.78 TOTAL 44,279 5,896.62 18,213,422 245,501,284 $ 5,497,809.04 Table 2 presents the net present value (“NPV”) of the 2016 Programs’ benefit-cost analysis and the program and portfolio UCT ratios. In accordance with the New Mexico Efficient Use of Energy Act NMSA 1978 Section 62-17-5, EPE’s portfolio of programs meets the UCT cost-effectiveness standard. Table 2 - Benefit-Cost Analysis by Program NPV of NPV of UCT Program Benefits Expenses Educational LivingWise Program 170,149.13 156,356.06 1.09 Residential Home Efficiency Program 41,938.93 9,638.01 4.35 High Efficiency Cooling Program 3,238,254.31 1,054,985.03 3.07 CFL & LED Program 996,062.58 465,070.03 2.14 ENERGY STAR New Homes Program 425,224.83 285,031.72 1.49 Low Income New Mexico EnergySaver Program 555,373.22 762,345.63 0.73 Commercial Small Commercial Comprehensive Program 754,557.74 356,921.46 2.11 SCORE Plus Program 9,283,740.07 2,233,023.69 4.16 Marketing for All Programs 0.00 109,957.63 - Awarenes Building Campaign 0.00 64,479.78 - TOTAL 15,465,300.80 5,497,809.04 2.81 4 EPE’s PY2016 Energy Efficiency Report


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    2016 Cumulative Program Goals Table 3 provides the annual and cumulative energy savings achieved from 2008 through 2016. The Efficient Use of Energy Act requires that EPE achieve cumulative savings of 65,815,596 kWh by 2014, which is equal to five percent (5%) of EPE’s retail sales in 2005, and 105,304,953 kWh by 2020, which is equal to eight percent (8%) of 2005 retail sales. By the end of 2016, EPE achieved a cumulative total of 105,572,068 kWh. This accounts for just over 100% of the 2020 statutory goal. Table 3: Cumulative Energy Savings Annual kWh Annual Expired Cumulative Year Savings Portfolio kWh kWh Savings 2008 855,912 855,912 2009 4,667,928 5,523,840 2010 5,169,908 10,693,748 2011 14,728,590 25,422,338 2012 13,537,655 38,959,993 2013 12,832,995 51,792,988 2014 20,692,228 72,485,216 2015 15,729,342 88,214,558 2008 Exp. (855,912) 87,358,646 2016 18,213,422 105,572,068 5 EPE’s PY2016 Energy Efficiency Report


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    Section II. Program Descriptions Educational Program Li v i ngWi se ® Program The LivingWise® Program is an educational program that targets fifth grade students. Participating teachers are provided with educational materials that are presented in the classroom. Students receive a kit of energy and water efficient devices for installation at home to generate immediate and long-term resource savings. EPE contracted with Resource Action Programs to implement and manage this program. The LivingWise team identifies and enrolls teachers and their students within EPE’s New Mexico service territory. The LivingWise program was a contributing catalyst for the national recognition of a Desert Trail Elementary School teacher who was recognized as 2016 Teacher of the Year by The National Association for Bilingual Education. EPE distributed 3,022 kits during the 2016 fall semester and achieved a savings of 678,233 kWh. Residential Programs Resi dent i al Home Ef f i ci ency Program The Residential Home Efficiency Program offers residential customers rebates on the following measures: Ceiling and Floor Insulation Duct Sealing Air Infiltration Solar Screens Frontier Associates administered the rebate process. EPE promoted this program through various outreach methods including radio and newspaper ads, bill inserts, and targeted outreach to contractors that install these measures. EPE further expanded its reach by targeting interactive mediums with high viewership including email blasts, Google search words, and targeted newspaper advertising in Las Cruces and Hatch. EPE had 47 participants and saved a total of 30,022 kWh. Resi dent i al Hi gh Ef f i ci ency Cooli ng Program The Residential High Efficiency Cooling Program offers residential customers rebates on the purchase and installation of eligible, energy efficient evaporative coolers and refrigerated air conditioners. Frontier Associates administered the rebate process. Rebates of $300 or $700, depending upon the efficiency of the unit, are provided to customers that install energy efficient evaporative coolers as an alternative to refrigerated air conditioners. Residential customers that purchase energy efficient refrigerated air conditioners can also receive rebates of $250 to $700, depending upon the efficiency of the unit. EPE promoted this program through various outreach methods including point- of-purchase materials at stores, radio and newspaper ads, and social media. EPE expanded its marketing by utilizing publications that target the highest circulation in the region. In 2016, a total of 1,573 rebates were distributed with an annual savings of 2,336,053 kWh. 6 EPE’s PY2016 Energy Efficiency Report


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    Resi dent i al CFL & LED Program The Residential CFL & LED Program offers residential customers CFLs and LEDs at a reduced price through a buy-down process at participating retail locations. EPE contracted with Energy Federation Incorporated and CLEAResult Consulting (“CLEAResult”) to provide the outreach and administration for this program. During 2016, there were a total of 18 participating retail locations where EPE offered this program. Program field representatives completed 446 store visits and provided training sessions to store associates and customers. In addition, twenty-six community outreach events were organized throughout the year at retail stores. EPE also organized LED bulb give-away events at each of the four grade schools in Chaparral, NM, a town that is not in close proximity to a participating retail location. As part of the ENERGY STAR® Change a Light, Change the World Campaign, EPE provided an LED bulb exchange where customers brought in 4 incandescent bulbs to exchange for 4 LED bulbs. EPE promoted this program through several outreach methods including radio and newspaper ads, social media, and point of purchase displays at stores. There were 187,331 bulbs sold at the reduced prices – 93,223 CFLs and 94,108 LEDs, saving a total of 2,782,418 kWh. In 2016, LEDs comprised more than half of the total sales. ENERGY STAR® New Homes Program The ENERGY STAR New Homes Program offers incentives to builders for construction of new homes that exceed current building code standards. EPE contracted with ICF International to implement and manage this program. Based on ADM’s recommendations, EPE offered two incentive paths for this program: the Performance Path and the Prescriptive Path. Under the Performance Path, homebuilders can receive incentives for constructing new, single-family homes that exceed current New Mexico code requirements by a minimum of 10%. Each home must also be rated by an independent Home Energy Rating System (“HERS”) rater. This path provides tiered incentives of $0.30/kWh up to $2,000 maximum per home. Under the Prescriptive Path, builders receive incentives to install a minimum of two above-code measures in their newly built homes: CFL or LED lighting, radiant barrier, insulation, HVAC, or refrigerator replacement. Incentives are paid on a per measure basis, and incentive rates differ based upon the measure type. EPE promoted this program through informational training sessions for builders and real estate agents in the area. EPE provided yard signs for homes that participated in the Performance Path, advertising that they were more energy efficient than other homes in the area. EPE also targeted its marketing efforts through trade magazines and the Las Cruces Home Builders Association. In 2016, 268 homes participated in this program and a total annual savings of 286,746 kWh was achieved. Low Income Program New Mexi co EnergySav er Program The New Mexico EnergySaver Program offers income-qualified customers a variety of energy efficiency measures at no cost. Frontier Associates administered and tracked the results of this program and EnergyWorks identified customers and implemented the direct installs. For homes with refrigerated air, the measures installed included CFLs or LEDs, insulation, air infiltration, duct sealing and low-flow showerheads. For homes with evaporative cooling, CFLs or LEDs were installed. EnergyWorks collaborated with a 7 EPE’s PY2016 Energy Efficiency Report


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    variety of community organizations including neighborhood associations, church groups, and low-income service providers to identify and qualify customers for energy efficiency services. EnergyWorks also promoted this program through extensive outreach utilizing customer referrals, door-to-door marketing and the EPE Energy Efficiency Hotline. This program had 1,646 participants and had an annual savings of 948,818 kWh. Commercial Programs Small Commerci al Comprehensi v e Program The Small Commercial Comprehensive Program provides energy efficiency rebates for small commercial customers whose average annual demand is less than or equal to 100 kW. The commercial rebates are offered for lighting and HVAC upgrades and controls, HVAC tune-ups, cool roofs, vending energy misers, and solar screen/film window treatments. EPE contracted with Frontier Associates to administer the rebate process and track the results of the program. Frontier field personnel contacted small commercial customers to notify them of the various energy efficiency incentives. Walk-through audits were performed at no cost to 404 customers where possible energy efficiency measures were identified. EPE contacted 26 electrical contractors, 21 HVAC contractors, and an additional 7 HVAC distributors to further promote this program. EPE promoted the Small Commercial Comprehensive Program through direct customer contact, bill inserts and social media advertising. A two-day High Performance HVAC Tune-Up training seminar was provided for interested HVAC contractors. The Small Commercial Comprehensive Program had 124 participants and saved a total of 1,074,432 kWh. SCORE Plus Program The SCORE Plus Program offers customer incentives, technical support, and outreach services to commercial customers with an average demand of greater than 100 kW, as well as schools, city and county customers. This program offers incentives for a range of energy efficiency measures including lighting, HVAC upgrades, lighting and HVAC controls, and custom projects. EPE contracted with CLEAResult to actively recruit eligible customers and provide assistance to identify energy efficiency improvements that could be made to their facilities. CLEAResult also assisted customers in the program application process. EPE promoted this program through direct customer and contractor contact, and bill inserts. As with the Small Commercial Comprehensive Program, a two-day High Performance HVAC Tune-Up training seminar was provided for those HVAC contractors wanting to participate. In 2016, a total of 133 participants saved 10,076,700 kWh through various energy efficiency measures. Awareness Building Campaign Aw areness Bui ldi ng & Trade Ally Campai gn During 2016, EPE continued the Awareness Building & Trade Ally Campaign (“Awareness Building Campaign”) to successfully educate customers and contractors about the benefits of EPE’s NM energy efficiency programs. EPE contracted with Frontier Associates whose field personnel went door-to-door to meet with both customers and contractors. The field personnel instructed them on how to access the EPE website which provides the necessary information and forms to participate in our energy efficiency programs. They also distributed program materials that identified how customers could participate in EPE’s 8 EPE’s PY2016 Energy Efficiency Report


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    energy efficiency programs and how they could contact EPE employees directly via a telephone hotline. EPE maintained an energy efficiency hotline number in NM that allowed customers and contractors to contact the Energy Efficiency Department to have their questions answered by knowledgeable program coordinators. EPE participated in various community events and provided presentations on energy efficiency and energy conservation. Outreach also included bill insert newsletters and radio advertising. EPE provided contractors with best practices training during the program kickoff meetings and offered commercial HVAC training throughout the year. This Awareness Building Campaign was instrumental in providing the one-on-one contact necessary to educate customers and contractors about the EPE Programs. 9 EPE’s PY2016 Energy Efficiency Report


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    Section III. Energy Efficiency Rule Reporting Requirements Section III of the Annual Report provides program information to comply with the Efficient Use of Energy Act as required by the NMPRC Energy Efficiency Rule, Section 17.7.2.14 NMAC. Documentation of Program Expenditures Table 4 shows the 2016 expenses by program and category. The Commission approved the 2016 Program budget in Case No. 13-00176-UT. All 2016 Program expenses were tracked through a specific account number and a unique work order number. Likewise, all revenue collected through the EUERF was booked to the same account using a separate work order number. The expenses and revenue were balanced against each other. To ensure there was no cross-subsidization or impact on EPE’s rate of return, these energy efficiency expenses and revenues were kept separate from EPE rate-base accounting. EPE spent $5,497,809.04 of the $5,751,436 approved budget, which is 95.6% of the budget. Table 4: 2016 Program Expenditures Customer Programs 2016 Budget Incentives Administrative Marketing M&V Total Expenses Educational LivingWise Program $ 165,000.00 $ 150,918.68 5,437.38 - - $ 156,356.06 Residential Home Efficiency Program $ 172,000.00 $ 9,042.75 595.26 - - $ 9,638.01 High Efficiency Cooling Program $ 938,343.00 $ 988,214.02 64,688.51 $ 2,082.50 - $ 1,054,985.03 CFL & LED Program $ 663,825.00 $ 307,031.53 151,329.51 $ 2,808.99 $ 3,900.00 $ 465,070.03 ENERGY STAR New Homes Program $ 315,000.00 $ 147,231.91 123,176.94 $ 87.89 $ 14,534.98 $ 285,031.72 Low Income New Mexico EnergySaver Program $ 569,226.00 $ 647,717.16 114,223.47 - $ 405.00 $ 762,345.63 Commercial Small Commercial Comprehensive Program $ 1,273,939.00 $ 279,990.23 24,543.51 $ 298.60 $ 52,089.12 $ 356,921.46 SCORE Plus Program $ 1,483,952.00 $ 1,296,943.39 881,642.29 $ - $ 54,438.01 $ 2,233,023.69 Marketing for All Programs $ 110,151.00 - $ 109,957.63 - $ 109,957.63 Awareness Building Campaign $ 60,000.00 - $ 64,479.78 - $ 64,479.78 TOTAL $ 5,751,436.00 $ 3,827,089.67 1,365,636.87 $ 179,715.39 $ 125,367.11 $ 5,497,809.04 Table 5 shows the breakdown of participant incentives by rate class, as required in the Final Order of Case No. 13-00176-UT. Table 5 - Participant Incentives by Rate Class Small General State Residential City and County Interruptible Total Participant Program Commercial Service University NMRT01 NMRT07 NMRT29 Incentives NMRT03 NMRT04 NMRT26 Educational LivingWise Program $ 150,918.68 $ - $ - $ - $ - $ - $ 150,918.68 Residential Home Efficiency Program $ 9,042.75 $ - $ - $ - $ - $ - $ 9,042.75 High Efficiency Cooling Program $ 988,214.02 $ - $ - $ - $ - $ - $ 988,214.02 CFL & LED Program $ 307,031.53 $ - $ - $ - $ - $ - $ 307,031.53 ENERGY STAR New Homes Program $ 147,231.91 $ - $ - $ - $ - $ - $ 147,231.91 Low Income New Mexico EnergySaver Program $ 647,717.16 $ - $ - $ - $ - $ - $ 647,717.16 Commercial Small Commercial Comprehensive Program $ - $ 185,652.86 $ 94,337.37 $ - $ 279,990.23 SCORE Plus Program $ - $ 113,881.85 $ 152,634.71 $ 114,126.85 $ 891,750.00 $ 24,549.98 $ 1,296,943.39 TOTAL $ 2,250,156.05 $ 299,534.71 $ 246,972.08 $ 114,126.85 $ 891,750.00 $ 24,549.98 $ 3,827,089.67 10 EPE’s PY2016 Energy Efficiency Report


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    Table 6 shows the budgeted amounts, the actual expenditures, and the variances for each program during 2016. The variances in individual program costs from the budgeted amounts were primarily due to customer participation being lower or higher than projected. Table 6 - Budget Variances 2016 Program Program 2016 Budget Expenses Variance % Educational LivingWise Program $ 165,000.00 $ 156,356.06 -5.24% Residential - Home Efficiency Program $ 172,000.00 $ 9,638.01 -94.40% High Efficiency Cooling Program $ 938,343.00 $ 1,054,985.03 12.43% CFL & LED Program $ 663,825.00 $ 465,070.03 -29.94% ENERGY STAR New Homes Program $ 315,000.00 $ 285,031.72 -9.51% Low Income New Mexico EnergySaver Program $ 569,226.00 $ 762,345.63 33.93% Commercial Small Commercial Comprehensive Program $ 1,273,939.00 $ 356,921.46 -71.98% SCORE Plus Program $ 1,483,952.00 $ 2,233,023.69 50.48% Marketing for All Programs $ 110,151.00 $ 109,957.63 -0.18% Awareness Building Campaign $ 60,000.00 $ 64,479.78 7.47% TOTAL $ 5,751,436.00 $ 5,497,809.04 -4.41% Estimated and Actual Customer Participation and Savings Levels Table 7 presents the estimated and actual customer participation levels, annual energy savings and annual peak demand savings for each program. Table 7 - Estimated vs. Actual Estimated Actual Estimated Actual Estimated Actual Participants Participants Savings Savings Savings Savings Program or Units or Units (kWh) (kWh) (kW) (kW) Educational LivingWise Program 3,500 3,022 740,698 678,233 39 12.9 Residential Home Efficiency Program 343 47 327,180 30,022 211 15.9 High Efficiency Cooling Program 1,707 1,573 1,395,630 2,336,053 909 1,447.7 CFL & LED Program* 43,034 37,466 3,519,679 2,782,418 360 370.3 ENERGY STAR New Homes Program 250 268 309,048 286,746 128 148.8 New Mexico EnergySaver Program 1,206 1,646 1,112,378 948,818 134 209.4 Small Commercial Comprehensive Program 720 124 4,241,809 1,074,432 932 237.9 SCORE Plus Program 75 133 5,457,658 10,076,700 1,502 3,453.7 TOTAL 50,835 44,279 17,104,080 18,213,422 4,215 5,896.6 *CFL & LED Program assumes 5 bulbs per participant 11 EPE’s PY2016 Energy Efficiency Report


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    Estimated and Actual Costs (Expenses) and Avoided Costs (Benefits) Table 8 presents the net present value of estimated and actual monetary expenses and benefits for each program. The estimated expenses and benefits were included in Case No. 13-00176- UT. Table 8 - Estimated and Actual Costs (Expenses) and Avoided Costs (Benefits) Estimated NPV Actual NPV of Estimated NPV Actual NPV of of Monetary Monetary of Monetary Monetary Expenses Expenses Benefits Benefits Educational LivingWise Program $ 165,000 $ 156,356 $ 209,791 $ 170,149 Residential Home Efficiency Program $ 172,000 $ 9,638 $ 719,671 $ 41,939 High Efficiency Cooling Program $ 938,343 $ 1,054,985 $ 2,173,027 $ 3,238,254 CFL & LED Program $ 663,825 $ 465,070 $ 946,127 $ 996,063 ENERGY STAR New Homes Program $ 315,000 $ 285,032 $ 486,304 $ 425,225 Low Income New Mexico EnergySaver Program $ 569,226 $ 762,346 $ 667,483 $ 555,373 Commercial Small Commercial Comprehensive Program $ 1,273,939 $ 356,921 $ 3,951,972 $ 754,558 SCORE Plus Program $ 1,483,952 $ 2,233,024 $ 3,066,983 $ 9,283,740 Marketing for All Programs $ 110,151 $ 109,958 $ - Awareness Building Campaign $ 60,000 $ 64,480 $ - $ - TOTAL $ 5,751,436 $ 5,497,809 $ 12,221,358 $ 15,465,301 Cost Effectiveness Evaluation Table 9 presents the UCT for each program, as well as the total portfolio UCT. EPE’s total portfolio and all of the 2016 programs met the UCT standard except for the NM EnergySaver Program which is EPE’s low-income residential program. See Table 2 for more details on the UCT calculations. Table 9 - Cost Effectiveness by Program Program UCT Educational LivingWise Program 1.09 Residential Home Efficiency Program 4.35 High Efficiency Cooling Program 3.07 CFL & LED Program 2.14 ENERGY STAR New Homes Program 1.49 Low Income New Mexico EnergySaver Program 0.73 Commercial Small Commercial Comprehensive Program 2.11 SCORE Plus Program 4.16 TOTAL 2.81 12 EPE’s PY2016 Energy Efficiency Report


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    Self-Directed Programs El Paso Electric did not receive any applications for customer self-directed programs in 2016. Independent Measurement and Verification Report The statewide independent evaluator, ADM, was chosen by the NMPRC and EPE contracted with ADM to conduct the independent evaluation of its 2016 energy efficiency programs. The M&V Report is included as Attachment A of this report and includes: • Documentation of expenses at both the individual and total portfolio program levels • Measured and verified energy and demand savings • Cost-effectiveness of all of EPE’s 2016 Programs • Deemed savings and other assumptions used by ADM • Description of the M&V process used by ADM Program Expenditures Not Covered in the Independent M&V Report All program-related expenditures are included in the M&V Report. EPE spent a total of $5,497,809.04 for the 2016 Programs. Annual Economic Benefits by Program Table 10 presents the annual and lifetime energy savings, estimated useful life, and annual economic benefits for the 2016 Programs. Table 10 - Annual Economic Benefits Annual Energy Lifetime Energy Estimated Annual Program Savings (kWh) Savings (kWh) Useful Life Benefits Educational LivingWise Program 678,233 5,869,066 8.65 19,662.54 Residential Home Efficiency Program 30,022 535,515 17.84 2,351.18 High Efficiency Cooling Program 2,336,053 35,040,797 15.00 215,883.61 CFL & LED Program 2,782,418 22,802,785 8.20 121,540.52 ENERGY STAR New Homes Program 286,746 6,595,156 23.00 18,488.04 Low Income New Mexico EnergySaver Program 948,818 8,596,208 9.06 61,300.06 Commercial Small Commercial Comprehensive Program 1,074,432 15,526,813 14.45 52,214.26 SCORE Plus Program 10,076,700 150,534,944 14.94 621,446.83 TOTAL 18,213,422 245,501,284 13.48 1,112,887.04 13 EPE’s PY2016 Energy Efficiency Report


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    Non-Energy Benefits Table 11 shows the estimated emissions savings and Table 12 shows the estimated water savings associated with the 2016 Programs. The annual and lifetime avoided emissions are determined by multiplying the emission rates times the annual and lifetime MWh saved. The water savings are determined by multiplying EPE’s average portfolio water consumption per MWh times the annual and lifetime energy savings. Table 11 - Emissions Savings Avoided Electric Emission Annual Avoided Lifetime Avoided Emmision Rate Type Emissions (tons) Emissions (tons) (lbs/MWh) SO2 0.0066 0.05 0.69 NOX 1.56 12.29 163.15 CO2 1,269.00 9,982.00 132,554.00 Particles 0.1035 0.81 10.80 Table 12 - Water Savings EPE Portfolio Water Annual Water Lifetime Water Water Impact Consumption Saved (gal) Saved (gal) (gal/MWh) Water Saved 642.9 11,709,964 157,840,260 Tariff Reconciliation Table 13 presents the calculation for EPE’s cumulative cost recovery balance based on the 2015 under-recovery balance, the 2016 Program expenditures, the approved 2016 utility incentive, and the cost recovery through EPE’s Rate No. 17 - Efficient Use of Energy Recovery Factor (“EUERF”) from January through December 2016. The costs recovered through the EUERF are not otherwise recovered through EPE’s base rates. Table 13: Energy Efficiency Historical Under(Over) Recovery Program 7% Utility EUERF Cumulative Description Expenses Incentive Recovery Balance 2015 Over Recovery Balance $ (1,326,209) 2016 Energy Efficiency Activity 5,497,809.04 $ 384,846.63 $ 4,556,380 $ 67 Ending Balance $ 67 EPE’s cumulative under-recovery balance at the end of 2016 was $67 for the expenses associated with the implementation of its energy efficiency programs and the overall recovery 14 EPE’s PY2016 Energy Efficiency Report


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    through the EUERF. Based on the $67 under-recovery, EPE will not need to adjust its approved 2017 EUERF of 3.075% for program year 2018. Table 14 presents the month-by-month reconciliation of EPE’s cost recovery balance. 15 EPE’s PY2016 Energy Efficiency Report


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