Texas Large Commercial and Industrial Standard Offer Program

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Texas Large Commercial and Industrial Standard
Offer Program

• Brown Bag Teleconference
• May 23, 2003

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Overview of Todays Topic

• Over 20 million in incentive funds remain
  available for qualifying energy efficiency
  projects through Texas Large Commercial and
  Industrial Standard Offer Programs!

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Outline

• Brief overview
• Jay Zarnikau, Frontier Associates LLC
• Waltz Across Texas
• An Introduction to each of the service areas by
  program managers at each of the utilities
• Project Sponsor Eligibility
• Billy Berny, AEP
• Eligible Measures
• Doug Maxey, Xcel Energy

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Outline cont.

• Application Process
• George Smith, CenterPoint Energy
• Measurement and Verification
• Mike Stockard, Oncor
• Example Incentive Calculations
• Karen Radosevich, Entergy

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April 2003
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Entergy - Gulf States, Inc.
Karen Radosevich
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Entergy - Gulf States, Inc.

• Serves 350,000 customers in Southeast Texas
• Industrial (Beaumont Port Arthur)
• Residential (The Woodlands Conroe)
• Goals and Budget
• Goal 2003 Budget Remaining Funds
• 3.1 MW 1,305,940 1,239,549
• Contact Information Terry Swan (409)
  981-3245 tswan_at_entergy.com

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Xcel Energy
Doug Maxey
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Xcel Energy

• Serve 269,000 customers on the high plains of
  Texas
• Amarillo - Lubbock
• Goals and Budget
• Goal 2003 Budget Remaining Funds
• 3.1 MW 1,305,940 1,239,549
• Contact Information 806-378-2887
  doug.maxey_at_xcelenergy.com

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Texas-New Mexico Power
Tony Thompson
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Texas-New Mexico Power Goals and Budgets
Goal 2003 Budget Remaining Funds 0.64
MW 240,000 192,000 Contact
Information 817-377-5579 tthompson_at_tnpe.com
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AMERICAN ELECTRIC POWER
Billy Berny
AMERICAN ELECTRIC POWER
AEP SWEPCO
AEP TEXAS CENTRAL
AEP TEXAS NORTH
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American Electric Power Program Incentive Budgets

• Total Incentive Budget Available Funds
  as of April 28, 2003
• based on approved Contracts
• AEP - Texas Central
  2,587,279
  2,083,621
• AEP SWEPCO 589,500
  589,500
• AEP - Texas North 596,841
  596,841
• 3,773,620
  3,269,962
• Contact Information 325-674-7293
  bgberny_at_aep.com

FOR MORE INFO...
Go to www.aepefficiency.com for program details
and application procedures.
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CenterPoint Energy
George Smith
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CenterPoint Energy Statistics

• Houston metropolitan area
• 1.8 million customers
• System peak demand of 15,000 MW
• Cities Houston, Galveston, Baytown,
  Richmond/Rosenberg
• Load is 40 residential, 30 commercial, 30
  industrial

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CenterPoint Goals and Budgets
Goal 2003 Budget Remaining Funds 10.2
MW 6,252,000 2,600,000 Contact
Information 713-207-3488 george.smith_at_centerpo
intenergy.com
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Oncor
Mike Stockard
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Oncor Service Area Statistics

• Provides distribution service to 2.64 million
  premises.
• Provides distribution service to 370 cities in 92
  counties.
• Serves Dallas, Fort Worth, Tyler, Waco, Midland,
  Odessa, Lufkin, Temple, Round Rock
• Peak system demand of 22,000 MW
• 2004 Incentive Budget - 17.3 million
• Contact Information 214-486-5626
  mstocka1_at_oncorgroup.com

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Websites for Specific Utilities

• AEP - www.aepefficiency.com
• Entergy - www.ENTERGYefficiency.com
• Oncor - www.oncorgroup.com/efficiency
• CenterPoint - centerpointefficiency.com
• Texas-New Mexico Power - www.tnpeefficiency.com
• Xcel Energy - www.Xcelenergyefficiency.com

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Quick Overview
Jay Zarnikau
Frontier Associates LLC
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Background and Introduction

• Texas Senate Bill 7 requires distribution
  utilities in Texas to meet 107 of their
  load growth by offering and administering energy
  efficiency programs.
• Each of the States affected distribution
  utilities offer a Large Commercial and Industrial
  Standard Offer Program to help satisfy this goal.
• The legislation requires incentive programs to be
  market neutral and non-discriminatory, so the CI
  Standard Offer Program is available to all of the
  utilities distribution customers on a first
  come, first served basis.

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Standard Offer Program

• Program administrator (electric utility) offers
  set incentive payment to participants for each
  kWh or kW saved through installation and
  operation of an energy efficiency measure.
• Program administrator signs a standard contract
  with participants outlining their
  responsibilities under the program.
• Applications considered on per-project basis
  first-come, first-served.
• Number of participants limited only by available
  incentive dollars.
• Project Sponsor and customer determines
  efficiency measures to be installedprogram
  measure/technology neutral.
• Contact Information 512-372-8778
  jayz_at_frontierassoc.com

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Project Sponsor Eligibility
Billy Berny
AMERICAN ELECTRIC POWER
AEP SWEPCO
AEP TEXAS CENTRAL
AEP TEXAS NORTH
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Program Administrator (Utility) Responsibilities

• Perform outreach to energy services community.
• Review project applications.
• Sign contracts with Project Sponsors.
• Perform pre- and post-installation inspections.
• Make incentive payments to project sponsors.
• Report results to Public Utility Commission.

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Who Can Be a Project Sponsor?

• Equipment distributors or manufacturers
• Energy service companies
• Community based organizations
• Mechanical or lighting contractors
• Any other entity providing energy efficiency
  services
• Large commercial or industrial energy consumers
• Project sponsors must meet standard
  qualifications (work experience, financial
  capability, insurance, proper licensing, etc.)

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Sponsor Responsibilities

• Market and sign contracts with individual Utility
  transmission and distribution customers
• Apply for funding from program
• Sign Standard Agreement with Utility
• Design, procure, and install energy efficiency
  measures
• Measure and verify energy savings

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Project Sponsor Qualifications

• Participants must have the following
• Evidence of good credit rating
  (10K or Financial Statement)
• List of references
• Must hold all applicable licenses
• Evidence of all building permits
• Evidence of necessary insurance

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Eligible Measures
Doug Maxey
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Measure Eligibility

• Produces measurable demand and energy savings
• Retrofit measures, in most cases
• Useful life is greater than ten years
• Permanently installed
• Fuel switching from electric to non-electric only
• Exceeds minimum efficiency standards

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Eligible Measures

• Constant air volume to VAV conversion
• Chiller replacement
• Packaged cooling unit replacement
• Fan and pump VSD and efficiency projects
• Lighting efficiency and controls
• Air cooling and refrigeration compressor projects
• Industrial process measures

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Ineligible Measures

• Measures with life less than 10 years
• Removable measures (generally includes plug
  loads)
• Exterior lighting
• Cogeneration or self generation (except
  renewables)
• Fuel switching to electric
• New construction (some exceptions)
• Measures that require no capital investment
• Measures that receive incentives from other
  Utility programs
• Thermal energy storage (unless part of a larger
  project)

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Project Eligibility

• Project requirements
• Utility TD customers
• Total demand at project site(s) is at least 100
  kW
• Minimum savings per project
• 20 kW
• Similar customers/sites may be aggregated to meet
  this requirement

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Project Aggregation

• Any number of project sites may be submitted as a
  project if they are similar. Contingent on
  having the same
• Sponsor
• Measure
• Occupancy schedule
• Functional use
• Energy consumption patterns
• MV Plan

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Application Process
George Smith
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Initial Application

• Sponsor submits one Initial Application (IA) per
  project
• First IA includes Sponsor qualifications
• Identifies customers and intended measures (20
  kW savings minimum)
• Estimated kW/kWh savings and incentive payments
• Approximately 15 day review period
• Utility reviews the IA for participant and
  measure eligibility
• Upon IA approval, Utility reserves funds for the
  project for a limited time.

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Submittal 2Final Application

• Sponsor has up to 100 days from IA approval for
  submittal of FA (varies by utility)
• Information required in the Final Application
  (FA)
• Detailed project description
• Savings calculations and incentive estimates
• Equipment surveys (use standard forms)
• Proposed MV plan
• Site plan and 1-line drawings where applicable
• Agreement between Project Sponsor and Host
  Customer

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Final Application (cont.)

• One FA submitted per project
• FA forms available on Web site
• Utility reviews each FA
• Fulfillment of submittal requirements
• Technical review of measure savings and MV plan
• Utility conducts a pre-installation inspection
• Approximately 45 day review
• FA approval

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Agreement(Contract)

• Includes project specific information
• Estimated kW kWh savings and incentives
• Approved MV plan
• Security deposit may be required
• Installation of approved measures may proceed
  after FA approval, after both parties sign the
  CI SOP Agreement, and pre-installation
  inspection is completed

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Submittal 3 Installation Report

• Due within 30 days of completion for all projects
• Submitted information similar to FA, except
• Reports actual retrofit equipment installed
• Updates savings calculations, incentive
  estimates and MV Plan to reflect as-built
  condition
• Includes Host Customer certification that
  measures were indeed installed

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Installation Report (cont.)

• Utility reviews each Installation Report (IR)
• Review of final savings estimates and MV plan
• Post-installation inspection to confirm equipment
  installation
• Approximately 45 day review period
• Upon IR approval, Utility pays Project Sponsor
  40 of contracted incentive

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Submittal 4Savings Report

• Submitted after MV activities completed
• Provides actual project kW kWh savings
• Submittal will include
• Raw data collected in MV activities
• Analysis used to calculate savings
• Actual savings achieved
• Review period approximately 45 days
• Remaining incentive payment based on actual
  savings achieved (up to 60 of contracted amount)

IA
FA
Contract
IR
SR
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Measurement and Verification
Mike Stockard
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Streamlined MV Procedures

• Measure-specific MV guidelines
• Stipulated values for data such as operating
  hours, fixture wattages and equipment
  efficiencies
• Pre-derived savings calculations for some
  measures
• Minimize project sponsor MV costs and utility
  administration, while producing justifiable
  energy savings

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CI Program MV

• Appropriate MV Approach depends mainly on
• Type of retrofit and equipment
• Operational predictability
• Project complexity
• Main categories of MV for CI program
• Deemed savings (in select applications)
• Simplified MV methods
• Full MV methods
• Alternate MV methods may be proposed by Sponsor,
  but must adhere to IPMVP and be approved by
  Utility

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Simplified Lighting Example

• Typical Small Office Building
• Sponsor submits full lighting survey, detailing
  existing and proposed fixtures
• 3,760 stipulated operating hours for office
  buildings
• 80 coincidence factor for office buildings

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Simplified Lighting Example (cont.)

• Savings Calculations
• Lighting Demand Savings 38.6 kW 18.7 kW
  19.9 kW
• Interactive Demand Savings 19.9 kW 0.10
  2.0 kW
• Total Demand Savings (19.9 kW 2.0 kW) 0.80
  17.7 kW
• Lighting Energy Savings 19.9 kW 3,760 hrs
  74,824 kWh
• Interactive Energy Savings 74,824 kWh 0.05
  3,741 kWh
• Total Demand Savings 74,824 kWh 3,741 kWh
  78,565 kWh

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Simplified Cooling Example

• Chiller Replacement in Office Building

Retrofit Description 1-for-1 300 Ton Water-Cooled Centrifugal Chiller Replacement
Existing Chiller Efficiency COP5.0 (0.70 kW/ton)
New Chiller Efficiency COP6.6 (0.53 kW/ton)
Baseline Chiller Efficiency (ASHRAE 90.1-1989) COP5.2 (0.68 kW/ton)
Spot kW measurement of existing chiller at peak conditions 135 kW
12-months post-retrofit measured chiller kWh 334,200 kWh
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Simplified Cooling Example (cont.)

• Savings Calculations

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General MV Rules

• Baseline must account for minimum state and
  federal standards
• Standard forms must be used
• MV reports must be complete and properly
  documented before any payments will be made
• Service quality must be maintained
• For example - lighting levels
• Metering
• Calibration required
• All collected data must be submitted with reports
  
• Must be adequate to capture full range of
  operating conditions

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Example Incentive Calculations
Karen Radosevich
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Pricing for programs is based on a cost
effectiveness standard

• Based on avoided cost of a new gas turbine
• 400 per kW capacity
• 2.5 cents per kWh off-peak energy
• Incentives for large commercial and industrial
  projects can be up to 35 of avoided cost.
• Incentives vary by utility
• 150 to 200 per kW reduction
• 5.0 to 6.9 cents per annual kWh saved
• Lighting Cap -- kW and kWh savings derived from
  lighting measures are capped at 65 of the total
  savings.
• Load Factor Cap -- Utilities may place a limit on
  the ratio of kWh payment to kW payment.

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Example 1 - Simple Calculation
A commercial HVAC project saves 25 kW of summer
peak demand and 50,000 annual kWh. 25 kW x
175/kW 50,000 kWh x 0.06/kWh 7,375
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Example 2 -- Load Factor Cap
An industrial variable-speed motor retrofit saves
20 kW of summer peak demand and 150,000 annual
kWh. The unadjusted incentive payment for this
project would be (20 x175) (150,000 x 0.06)
12,500 The utility is utilizing a load factor
cap that limits combined kW and kWh payment to
600 per kW. 20 x 600 12,000 This project
would be subject to the load factor cap.
Incentive would not exceed 12,000.
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Example 3 - Lighting Cap
A commercial office project saves 15 kW and
60,000 kWh from lighting measures and 4 kW and
8,000 from HVAC. of kW savings from lighting
15/19 79 of kWh savings from lighting
60,000/68,00088 Adjusted kW (19 x 0.65) 4
16.35 kW Adjusted kWh (68,000 x 0.65) 8,000
52,200 kWh (16.35 x 175) (52,200 x 0.06)
5,993
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In conclusion

• A new generation of energy efficiency programs
  are up and running.
• For energy services companies, equipment
  distributors and manufacturers, installers of
  energy-efficient equipment, and others, these
  programs provide new business opportunities.
• The states utilities and the PUCT are counting
  on your ideas and efforts to help ensure that we
  meet our goal for energy efficiency!

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Questions?

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