Incentives for Utility Programs

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Incentives for Utility Programs

• Robert Balzar, Director
• Seattle City Light Conservation

American Public Power Association Webinar May 8,
2008
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Efficiency is a better energy choice Baltimore
Sun (March 10, 2008)Iowa needs to follow U.S.
lead on energyDes Moines Register (March 11,
2008)Thermal Power Heats Up NevadaTIME
Magazine (March 3, 2008)Corporate Social
Responsibility A Change in Climate The
Economist (January 17, 2008)
Nationwide Vision on Conservation working with
a public that Gets It
Seattle City Light CFL Campaign
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Seattle City Light providing energy
efficient programs since 1977

• One of the first in the nation to develop and
  promote conservation programs

• Delivering a cost-effective energy resource
• Reducing residential, commercial and industrial
  customer bills
• Eliminating greenhouse gas emissions and other
  environmental impacts

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Seattle City Light conservation is Seattles
energy resource of choice

• Energy Efficiency Action Plan 2008 - 2012
• Aggressive, accelerated conservation goals

• Low hanging fruit has been picked
• Challenges of stringent codes and standards
• Competition for customers and trade allies with
  neighboring utilities
• What can you afford to pay?

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Seattle City Light a national leader in
conservation

• Conservation Goals
• Market transformation to improve energy
  efficiency
• More stringent energy codes and standards
• Help customers install energy efficient products
  by offering financial and technical support

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2007 Energy Resources Net Zero Carbon Emissions
From BPA Contract and Market Purchases. These
and other operations-related GHG emissions are
offset.
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Seattle City Light analytical framework for
conservation resources

• Overriding Policy Conservation is the Utilitys
  resource of first choice to meet customer energy
  demands
• Analytical Approach
• Develop Conservation Potential Assessment (CPA)
  for SCLs service territory
• Construct alternative conservation resource paths
  from CPA for assessment in the IRP
• Analyze conservation paths as part of overall IRP
  resource portfolios for their effect on costs and
  risks
• Develop findings and recommendations for long
  term conservation resource goals and policy

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Seattle City Light achievable conservation
potential
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Seattle City Light 2006 IRP preferred
portfolio
Conservation

• Conservation in preferred portfolio acquired at a
  rate of 7 aMW per year or 140 aMW over 2007-2026
• Portfolio with accelerated conservation path
  achieved greater economic benefits lower
  revenue requirements than the preferred portfolio
• Study the feasibility, costs and benefits of
  accelerating conservation acquisition beyond the
  preferred option in SCLs 5 Year Conservation
  Action Plan

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Seattle City Light alternative conservation
paths vs load growth
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Utility Incentive Programs an important
component of an energy efficiency program

• Monetary Incentives Change Customer Behavior
• Types of Incentives
• Calculation per kilowatt hour of savings
• Make consistent between similar measures and
  market segments
• Base in part on expected measure life
• Ex All City Light Lighting Programs .20/kWh
  1st year savings
• Fixed amount payment or rebate per unit or
  fixture
• Simple to implement and understand
• Ex City Light Refrigerator Recycling Program
  pays customer 30 per refrigerator or freezer
• Payment as a percentage of job cost
• Set cost caps to encourage customer stake in
  keeping costs down
• City Light MF Common Area Retrofit program pays
  85 of qualifying costs

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Utility Incentive Programs program design
principles

• Determine program cost effectiveness
• Service territory or Total Resource Cost
• Includes financial incentive, program delivery,
  and customer share
• Whats the value of savings?
• Previous focus on incentives centered around cost
  of measures, now the shift to focus on value of
  savings
• Pay as much as you need, but no more to meet
  conservation goals
• Pay more if the value of savings are worth more

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Utility Incentive Programs GOAL capture energy
savings and reduce overall costs

• Guidelines for Effective Incentive Programs
• Develop incentives specifically by sector and
  market
• Where are you trying to affect change?
• Start from existing base of incentives
• Set incentive at certain level and see what kind
  of participation it generates
• Split Incentive Whos getting the energy savings
  and the benefits of cost savings?
• The commercial developer who sells a completed
  project wont see the long-term bill savings, so
  incentives can overcome these types of barriers
  by paying more

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Utility Incentive Programs Risk overpaying to
capture maximum energy savings, but avoid paying
more than what the measure costs

• Longer lived measures with long term benefits
  have greater benefits, more value
• Commercial and MF shell upgrades will last longer
  (30-45 years) than commercial lighting (10-15
  years)
• Understand Customer Needs
• What will get them to use energy conservation
  measures?
• Targeted needs for residential customers and
  small business
• May need to pay more to get residents and small
  business owners to install EE measures
• Communicate Creatively
• Strategic Marketing, Communication and Outreach
  Plan

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Energy Smart Services financial incentives and
technical assistance for existing facilities
and new construction projects

• Commercial and Industrial Customers
• Family of Measure Incentives Include

Lighting HVAC
Water Heating / Cooling Treatment Compressed Air
Building Envelope Plug Loads
Data Management Industrial Process Lamps
Food Service Equipment Elevators Escalators
Power Supply Measures
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Incentives Simple Rebates Incentives Simple Rebates
Standard Measures Funded Incentive Amounts (applied to first-year savings)
LIGHTING UPGRADES T-12 to T-8 or T-5 Replaced Incandescent, Exit Signs, Instant Motion Sensors, others 20 per kWh saved 20 per kWh savings
HVAC Efficient chillers, heat pumps, variable speed drives for fans. Up to 29 kWh savings
High Efficiency Industrial Equipment Expected 15-year service life 23 per kWh savings
NEW PC Power Management 8/pc Estimated savings up to 375 kWh/PC
NEW Hot Food Holding Cabinets Up to 500 per cabinet
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Built Smart Programbuildings designed and built
to conserve resources while providing a
tranquil living environment

• Program Incentives
• Building materials, windows, walls, ceilings
• Insulation and HVAC
• Interior and exterior common area lighting
• Energy efficient fans, controls, in-unit
  appliances, thermostats, elevators

• certified BUILT SMART
• BUILT SMART standards exceed the highest
  recommendations of the State Building Code for
  energy efficiency and comfort.
• Every BUILT SMART apartment and condominium
  building undergoes rigorous inspection during
  construction.
• When the building is successfully completed, it
  is awarded a BUILT SMART certification plaque
  that can be displayed in the lobby.

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Built Smart Incentive Schedule Simple Rebates Built Smart Incentive Schedule Simple Rebates
Standard Measures Funded Incentive Amounts (applied to first-year savings)
Built Smart Full Measure Program (Market Rate and Affordable Housing components) Requirements New construction residential building 5 units or more, no more than 7 stories Electrically heated 0.75/kWh saved over code in wall, window, ceiling floor insulation
Built Smart Full Measure Program (Market Rate and Affordable Housing components) Requirements New construction residential building 5 units or more, no more than 7 stories Electrically heated 0.20/kWh saved over code in common area lighting
Built Smart Full Measure Program (Market Rate and Affordable Housing components) Requirements New construction residential building 5 units or more, no more than 7 stories Electrically heated 25/fixture for energy efficient in-unit lights
Multifamily New Construction Common Area Lighting Requirements New construction residential building, gas or electrically heated 5 units or more, no limits on number of stories 0.20/kWh saved over code in common area lighting
Multifamily New Construction Common Area Lighting Requirements New construction residential building, gas or electrically heated 5 units or more, no limits on number of stories 25/fixture for energy efficient in-unit lights
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Refrigerator Recycling Program we pick up your
old fridge...and you pick up 30 bucks

• Old second appliances use three times as much
  energy as newer ones, significantly running up
  the electric bill and contributing to global
  warming.
• Fixed rebate program 30 per refrigerator or
  freezer
• Partnership with leading appliance recycling
  company
• JACO Environmental
• Picks up the appliance from resident homes
• Uses a state-of-the-art process to recycle 95 of
  the materials that make up the old refrigerators
  and freezers

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Twist Save Program compact fluorescent bulbs
to transform the lighting market

• Inexpensive Energy Star Compact Fluorescent
  bulbs for less than 1 at participating retailers
• Easy No coupons or rebates forms
• Opportunities
• CFL Saturation
• Almost 3 out of 10 homes do not have at least one
  CFL installed
• Challenges in reaching these homes include
  cultural and language barriers that will require
  creative communication techniques to reach and
  persuade these customers
• CFL Bulb Recycling and Mercury Concerns
• Take it Back Network Program
• City Light Recycling Bins at Service Centers

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Utility Incentives for a world-class
conservation power plant
Seattle City Light Conservation Resources
Click on screen to play video
conservation is Seattles energy resource of
choice www.seattle.gov/light/conserve
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Robert Balzar 30 years experience in
engineering, marketing and utility management

• Past experience
• Director of Marketing and Product Development for
  Pinnacle Homes in Las Vegas
• 21 years at Sierra Pacific Power and Nevada Power
  Companies, including five years leading a team
  that developed and expanded the Energy Efficiency
  and Conservation Department
• Member of
• Board Member, Northwest Energy Efficiency
  Alliance
• Served on the State of Nevada Task Force on
  Renewable Energy and Energy Conservation
• Served as a Board member of Southwest Energy
  Efficiency Program in Boulder, Colorado
• Education
• B.S. in Electrical Engineering from the U of NV,
  Reno