# Presentation: 216746

## NON-ENERGY BENEFITS (NEBS) :

**Methods, Results, and Implications on Omitted and Attributable Program Effects**
*NREL Analytical Seminar, April 12, 2007*
- Lisa A. Skumatz, Ph.D.
- Skumatz Economic Research Associates, Inc.
- 762 Eldorado Drive, Superior, CO 80027
- 303/494-1178   email: _[skumatz@serainc.com](mailto:skumatz@serainc.com)__ _© SERA 2007, all rights reserved

## TOPICS

- NEBs, rationale, context
- Perspectives
- Measurement approach
- Program results
- Societal
- Participant perspective
- Implications / uses and summary

## BACKGROUND AND RATIONALE

- What are NEBs?
- Literature / evolution
- Lists structure well-researched methods
- Why analyzed?
- Get past assumption of zero...
- What precision needed?
- Myriad useful program applications

## NEBS – SO WHAT?

- Three audiences out there that should care...
**Program**: Utilities, agencies, regulators, program planners, cities
-   Benefit-cost, program effects, design, barriers, progress, goals; program refinements
**Sales**:  Builders, retailers, designers, vendors, mfg
-  Features that “sell”; marketing; barriers; reaching buyers; understanding / influencing decisions
**Users**:  Owners, occupants, decision-makers
-   Decision-making / payback; fuller effects

## PROGRAMS / CONTEXT

- Discussion reflects work over 13 years for more than 50 programs / 35 projects
- Sustainability, Residential, Commercial, Cx, RTP, Renew, other
- Measure-based, whole building, tax, regulatory, rebate, loan, market transformation, education, other

## ENHANCEMENTS / STRUCTURE

- Three clear perspectives / distinction
- Utility
- Societal
- Participant
- Extension to other perspectives for sustainability work
- Considerations
- Duplication? Different perspectives
- Documentation / sources (400+)
- Consistent units

- Utility/Ratepayer

- Societal

- Participant

## ENHANCEMENTS / MEASUREMENT

- Program-attributable NEBs – NET approach
- NET NEBs -- 3 ways for defensible attribution
- Benefits of multiple interviewees
- Point and range
- Scenarios (B/C, portfolio, risk)
- Decision-making

## APPLICATIONS OF NEBS

- Wide variety of applications of NEBs (discussed at end)
- Researchable questions / program logic
- B/C, scenarios
- Portfolio assessment
- Program design / optimization
- Marketing / targeting
- Barriers analysis
- Tracking / market progress in perceptions, understanding
- Disconnects
- Other

## CATEGORIES OF NEBs

## NEBS CATEGORIES DERIVE FROM THESE CAUSES... 

| Utility/Ratepayer | Societal | Participant (all) |
| --- | --- | --- |
| Payments/financial
Debt collection efforts / calls
Emergencies / insurance
T&D, power quality, reliability
Subsidy (LI)
Other
 | Economic development / job / multipliers 
Tax impacts
Environmental 
Emissions
Health
Water & other resources / utilities
National security
Other | Payments & coll’n
Education
Building stock
Health
Equipment service incl.  productivity, comfort, maint, etc.
Other utilities (water)
Other |

- More than 60 categories... subsets as
- Needed / important to purpose of project

- Source: (Skumatz/SERA, ACEEE 2005
- And others)

## UTILITY BENEFITS – INDIVIDUAL CATEGORIES 

| Utility Benefits – changes in...
... valued at utility marginal costs, or similar |  |
| --- | --- |
| Carrying cost on arrearages 
Bad debt written off
Shutoffs
Reconnects
Notices
Customer calls / bill or emergency-related
Other bill collection costs | Emergency gas service calls (for gas flex connector and other programs)
Insurance savings
Transmission and distribution savings (usually distribution)
Fewer substations, etc.
Power quality / reliability
Reduced subsidy payments (low income)
Other |

- Source: (Skumatz/SERA, ACEEE 2005
- And others)

## SOCIETAL BENEFITS – INDIVIDUAL CATEGORIES

| Societal Benefits – changes in...

... Valued at relevant societal values for the category. |
| --- |
| Economic development benefits – direct and indirect multipliers
Tax effects
Emissions / environmental (trading values and/or health / hazard benefits)
Health and safety equipment
Water and waste water treatment or supply plants
Fish / wildlife mitigation
National security
Health care
Other |

- Source: (Skumatz/SERA, ACEEE 2005
- And others)

## PARTICIPANT BENEFITS – C&I

| Commercial/Industrial Participants – changes in... |  |
| --- | --- |
| Water / wastewater bill savings
Operating costs (non-energy) 
Equipment maintenance
Equipment performance (push air better, etc.)
Equipment lifetime
Productivity
Tenant satisfaction / fewer tenant complaints
Comfort
Aesthetics / appearance
Lighting / quality of light 
Noise
Safety | Ease of selling / leasing
Product losses (mostly refrigeration at grocery)
Labor requirements
Indoor air quality
Health / lost days at work
Doing good for environment
Reliability of service / power quality
Savings in other fuels or services (as relevant)
GHG and environmental effects

NEGATIVES include: Production disruption during installation.  Others are included above (e.g. troublesome maintenance, etc.) |

- Source: (Skumatz/SERA, ACEEE 2005
- And others)

## PARTICIPANT BENEFITS – RESIDENTIAL

| Residential Participants – changes in...
...Valued at household marginals. |  |
| --- | --- |
| Water / wastewater bill savings
Operating costs (non-energy) 
Equipment maintenance
Equipment performance (push air better, etc.)
Equipment lifetime
Shutoffs / Reconnects
Property value benefits / selling
(Bill-related) calls to utility
Comfort
Aesthetics / appearance
Fires / insurance damage (gas)
Lighting / quality of light 
Noise
Safety | Control over bill
Understanding / knowledge
“Care”  or “hardship” (low income)
Indoor air quality
Health / lost days at work or school
Fewer moves
Doing good for environment
Savings in other fuels or services (as relevant)
GHG and environmental effects

NEGATIVES include: Installation hassles / mess, negative values from items above. |

- Source: (Skumatz/SERA, ACEEE 2006, ECEEE 2005
- And others)

## MEASURING NEBs

## MEASURING UTILITY & SOCIETAL NEBs 

- Utility/Agency- studied first / low benefits
- Computational method: baseline value * pgm impact * valuation
- Societal – early work volatile
- Economic/development:  Input/output model - NET
- Enviro:  Emissions & valuation variations
- Water:  built up
- Other:  Program or impact-specific
- Implications from sustainability work
- Categories & perspective values...
- Largely routinized in model... primary/secondary data and easily-added primary data where available

## MEASURING UTILITY & SOCIETAL NEBs 

- Economic:  SERA estimates of NET multipliers - indirect and induced for $1M direct
- Plus tax and economic development toward sustainability goals...  routinized in model
- Have also conducted for solid waste & water programs

- (Skumatz 1997, 2000, 2004, 2006)

## ECONOMIC MULTIPLIER – PATTERNS

*More local & national job impacts in *
*weatherization & labor intensive;*
*Appliance replacement programs *
*more limited impact – local & US*

***Multiplier for indirect portion of economic ***
***output from NET transfer of funds FROM generation***
***TO SIC/NAICS codes relevant to program design.***

*Source:  Skumatz/*
*SERA ACEEE paper 2006*

## MEASURING UTILITY & SOCIETAL NEBs 

- Environmental – emissions calculations  vary by:
- Peak / non-peak impacts
- Generation type / fuel mix / age
- Values (Particulates, GhG, SOx,NOx,  CO2, CH4, others) – valuation sources...
- Results vary widely by situation, values
- Sustainability goals implications

## MEASURING PARTICIPANT BENEFITS

- Hard to Measure (HTM) but important.
- WTP and beyond...

## MEASURING PARTICIPANT BENEFITS

- Important, ignored by early literature as HTM.
- Early work not fruitful - _*revelation*_
- 7 approaches (+ many variations) used / developed / adapted / tested
- Direct study ------------------missing obs
- WTP and WTA-----------------volatile, uncertain resp
- Comparative / relative -------fast, strong
- LMS approach ----------------fast, strong, clear
- Ordered logit, conjoint,& rankings--slow, complex, strong
- Regression--------------------limited, $, 1 category*
- Market valuation--------------rarely available, obs
- Other--------------------------testing others

- * Although useful for disaggregating multi-measure NEBs

- (Source: Skumatz/SERA
- AESP 2005 paper, other)

## PARTICIPANT FOCUS / MEASUREMENT

- Basic pros / cons
- Consistent, practical, unbiased – theory & practice and $
- Survey approach as basis for large-scale (C/E) work
- Perception... what are you trying to measure?
- Multipliers derived from literature and thousands of surveys
- Strongest performers
- Administered by multiple methods:
- Phone, mail, clipboard, web, email, fax; some more successful than others
- Mixed methods
- Inexpensive / high value
- Suitability varies by: sector, time, budget, program...
- Individual categories and overall values

## PARTICIPANT MEASUREMENT METHODS COMPARISON

*(Source:  Skumatz/SERA*
*ACEEE paper 2002)*

## PARTICIPANT FOCUS / MEASUREMENT

- Measuring total participant NEBs
- Tend to use multiple measurement methods
- Measuring “by category”
- Can get long; need simple / expedient method
- Non-overlapping
- Disaggregating for multiple measure programs

## EXAMPLES OF NEB RESULTS

## NEB RESULTS FOR LI-Wx:  50% Partic, 41% Soc, 9% Util; Total NEB mult=2.6

**$92.10**

**$76.65**

**$17.28**

**$186.03**

**$70.85**

*(Source: Adapted / updated*
*From Skumatz, ACEEE 1998)*

## UTILITY NEBS FOR LI-Wx

**Rate subsidy**

**T&D**

**Payment-related**

*(Source: Adapted / updated*
*From Skumatz, ACEEE 1998)*

## SOCIETAL NEBS FOR LI-Wx

**Econ**

**water**

**enviro**

*(Source: Adapted / updated*
*From Skumatz, ACEEE 1998)*

## PARTICIPANT NEBS-LI Wx

**water**

**Prop val**

**comfort**

**illness**

*(Source: Adapted / updated*
*From Skumatz, ACEEE 1998)*

## IMPLICATIONS FOR LOW INCOME WEATHERIZATION PROGRAM

- Financial
- NEBs more than outweighed energy benefits
- Improved payback
- Progress toward goals
- Low income customers strongly valued program – high benefits to them
- Regional and Program-related variations
- Strong health impacts (detailed work), especially for sub-groups

## RESULTS FROM RESIDENTIAL PROGRAMS

## RESIDENTIAL PROGRAMS “NEBBED”

- SF New construction
- SF Retrofit
- Air Conditioners
- Weatherization
- Eqpt. Rebate
- Direct install
- Lighting / CFL
- MF New construction
- MF retrofit
- Metering
- PV
- Low income
- Energy Star®
- Real time pricing

- Sustainability
- Financing / loan
- Education / Marketing
- Other
- City Building codes, low income retrofits, incentives
- Thousands of surveys, results
- By measures
- By program types
- By sectors
- By stakeholders
- By geography
- Variety of end uses

## Many examples presented / discussed in the seminar...

- Energy Star® Homes and Home Performance (residents & builder/contractor results)
- Energy Star® appliance programs (incl. CFLs)
- New Zealand Zero & Low Energy Homes

## EXAMPLES OF PARTICIPANT NEB RESULTS – C/I/I & OTHER

## RESULTS SHOW ...

- Results show energy efficiency NOT most important factor
- Varies by actor, building type, measure
- Comfort, tenant satisfaction, performance, O&M, Environmental, productivity important (depending on measures included)
- $ and relative values for all – including productivity, illness, O&M, AND softer impacts
- Implications vary...

## C&I PROGRAMS “NEBBED”

- New construction
- Lighting
- Motors
- Audit
- Eqpt. rebate
- Commissioning
- Technical assistance
- Training / outreach
- PV
- Retail renewable
- SPC

- DG / CHP
- HVAC
- Equipment rebate
- Other
- Building codes, incentives by cities
- Thousands of surveys, results
- By measures
- By program types
- By sectors
- By stakeholders
- By geography
- Variety of end uses

## EQUIPMENT RESULTS

- Equipment-specific info and disaggregated
- Patterns/variations by program, equipment
- Developing “default” values, results
- Results for many types of programs
- MF, SF, PV, RTP, many others

## Many examples presented / discussed in the seminar...

- C&I new construction (A&E and Owner)
- C&I new construction (participant / nonparticipant comparisons)
- C&I Education / training NEBs by actor
- Audit / financial assistance program
- Audit / financial program – NEBs by end use; discussion by business type
- C&I technical assistance program, overall
- C&I public buildings commissioning program (overall)
- C&I Public buildings commissioning ($ per square foot, per contribution, etc.)
- Boiler program (vendors, and participant/non-participant owners)
- C&I lighting program
- Table of results from programs
- MF Energy Star® New Construction Program

## ESTIMATION OF NEBS/SUSTAINABILITY EFFECTS – SERA’s “NEB-It-S”© MODEL

## MODEL ESTIMATION APPROACH 

## IMPLICATIONS & SUMMARY 

## APPLICATIONS / USES 

- Benefit cost, enhanced with scenarios
- Program B/C; portfolio/mix, scenarios, regulatory adders
- Regulators – slow to adopt / variations
- Explain program decision-making –
- B/C as Individual Decision-maker driver...  $ of value to compute _total B/C based on field experience by peer groups_

## APPLICATIONS / USES 

- Program design
- Program / benefits maximization & optimization
- Program marketing / outreach / targeting
- Speak in participant value terms in mktg
- Sell what people want to buy-past EE
- Tide example

## APPLICATIONS / USES 

- Meaningful barriers & evaluation analysis
- $ value of barrier and remediation costs
- Comparisons / progress in perceptions
- “Disconnects” between decision-makers and implications for adoption
- Education / training / info (success & need)
- Refine training to address
- Product development & sales

## SUMMARY 

- NEBs strong net benefits
- To society & participants
- Beyond conceptual – measurable, defensible
- 0.4 – 1.5 -3+ times energy savings depending...
- Strongest  categories depend on measures, program/design, actor
- VERY Cost-effective to investigate
- Important uses / information not obtainable other ways
- Important applications to sustainability...

## CONTACT INFORMATION

*Lisa A. Skumatz, Ph.D.*
*SERA, Inc.*
*762 Eldorado Drive, Superior, CO 80027*
*Phone: 303/494-1178*
*Email: *_[skumatz@serainc.com](mailto:skumatz@serainc.com)_
*Web *_[www.serainc.com](http://www.serainc.com/)_