questions about District cooling/heating modeling for LEED

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Hi, All,
Now I am doing a district cooling & heating model for LEED CS project.
Cause the central plants use water source heat pump for heating I am confusing when select system type.
According to Appendix G of 90.1 system 8 should be used for Baseline model since the energy source for heating is electricity.
However the proposed model will use hot water generated by heat pump for heating.
When I doing option1 of

, how to model DES cost-neural?
According to Energy Model Implementation all the energy source should be modeled as purchased energy. Then the key question is the baseline case system 8 will be resistant heating.
Any one has some experiences on doing district heating/cooling system?
Should I jump to option2 since the plant side with ice storage and water source heat pump will contribute more in energy cost saving?

Thanks
Regards

Jenny

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