(1) Each utility must document its acquisition of conservation savings relative to its biennial target.

(2) Each utility must record conservation savings as the total first-year electricity savings in megawatt-hours or kilowatt-hours.

(3)(a) Each utility must maintain and apply measurement and verification protocols to determine the amount of energy savings resulting from conservation measures and to verify the acquisition or installation of the conservation measures being recorded or claimed.

(b) A utility may comply with this requirement using the measurement and verification protocols adopted by the RTF or by BPA in its energy efficiency implementation manual. If a utility uses other measurement and verification protocols, the measurement and verification protocols must be consistent with recognized industry practices, and the utility must document the methodologies, assumptions, and factual inputs used in its measurement and verification of energy savings.

(4) A utility may count the conservation savings from a conservation measure toward its biennial target if the measure, or a project or program consisting of more than one measure, meets the following criteria:

(a) The utility has established that the measure, or a program or project consisting of more than one measure, was cost-effective;

(b) The utility has documented that the measure was installed within its retail service area during the biennial period, or in the case of programs described in subsection (5) of this section, that the savings were attributed to the utility using a reasonable and consistent method;

(c) The utility used a reasonable and consistent method of assigning conservation savings to biennial periods such as, by the date the conservation measure was installed, by the date an incentive was paid to a customer, or by the date the conservation measure was reported to an external funding agency such as BPA; and

(d) The utility applied a reasonable and consistent policy of incorporating changes in unit energy savings values subsequent to the adoption of a biennial conservation target. Such a policy may either count savings using the unit energy savings values in effect at the time the biennial target is established or update all unit energy savings values as they are changed by the entity responsible for establishing the values.

(5) Subject to the requirements of subsection (4) of this section, each utility may count toward its biennial conservation target the proportionate share of savings resulting in its service territory from the implementation of regional or multistate conservation programs, market transformation programs, appliance standards, building energy codes, and nonprogrammatic savings including, but not limited to, the Northwest Energy Efficiency Alliance and BPA.

(6) A utility must not count as conservation a reduction in electricity consumption due to curtailment of a customer's process or service, such as the shutdown of a manufacturing facility. A change in the operating practices of a customer that reduces electricity consumption without reducing the level of output or other benefits of electricity consumption is not curtailment.

(7) A utility that does not acquire conservation savings during a biennial period sufficient to meet its biennial conservation target may document its level of effort at conservation acquisition. The documentation should include:

(a) A description of the utility's marketing programs, education programs, custom project proposals, monetary incentives, financing offers, and other efforts during the biennial period to motivate customers to install conservation measures;

(b) A detailed report of the utility's budget and actual expenditures for the activities in (a) of this subsection;

(c) An identification of all conservation measures, programs, or projects for which the utility offered to pay customers an incentive in an amount equal to the utility's full avoided cost over the lifetime of measures; and

(d) An identification of all conservation measures that were included in the biennial target and became unavailable to the utility due to the shutdown or curtailment of operations of a retail customer.