Prepared by GDS Associates and the Cadmus Group

Page 1 

# E LECTRIC 

# E NERGY 

# E FFICIENCY 

# P OTENTIAL FOR



# P ENNSYLVANIA



## Final Report

Prepared for:

P ENNSYLVANIA 

### P UBLIC 

### U TILITY 

### C OMMISSION



## May 10 , 2012

GDS Associ ates, Inc.
1850 Parkway Place

Suite 800

Marietta, GA 30067

770.425.8100

770.426.0303 (Fax)
www.gdsassociates.com 

## GDS Associates, Inc.

Engineers and ConsultantsP ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page i 

## T ABLE OF 

## C ONTENTS



## 1 E XECUTIVE 

## S UMMARY



## ................................ ................................ .................... 1

1.1 Cost Effectiveness Findings

................................ ................................ ................................ ....................... 2

1.2 Study Scope

................................ ................................ ................................ ................................ ................... 2

1.3 Report Organization

................................ ................................ ................................ ................................ .... 4

1.4 Results Overview

................................ ................................ ................................ ................................ .......... 5

1.5 Energy Efficiency Potential Savings Detail

................................ ................................ .............................. 7



## 2 G LOSS ARY OF 

## T ERMS



## ................................ ................................ .................... 12

3 I NTRODUCTION



## ................................ ................................ ............................ 17

3.1 Introduction to Energy Efficiency

................................ ................................ ................................ .......... 17

3.1.1 General Benefits of Energy Efficiency

................................ ................................ ................................ 17

3.2 The P ennsylvania Context

................................ ................................ ................................ ........................ 19

3.2.1 Continuing Customer Growth

................................ ................................ ................................ .......... 19

3.2.2 Energy Efficiency Activity

................................ ................................ ................................ ................ 19

3.2.3 Recent Energy Efficiency Potential Studies

................................ ................................ ........................ 19

3.3 P urpose of this Study

................................ ................................ ................................ ................................ . 20

3.4 Cost

- Effectiveness Findings

................................ ................................ ................................ ..................... 20



## 4 C HARACTERIZATION OF 

## S ERVICE 

## A REAS OF 

## P ENNSYLVANIA 

## EDC S



## ............ 21

4.1 EDC Areas

................................ ................................ ................................ ................................ .................. 21

4.1.1 Duquesne Light Company

................................ ................................ ................................ ............... 21

4.1.2 FirstEnergy Corporation

................................ ................................ ................................ .................. 22

4.1.3 PPL Electric Utilities Corporation

................................ ................................ ................................ .. 22

4.1.4 PECO Energy Company

................................ ................................ ................................ ................. 22

4.2 Economic/Demographic Ch aracteristics

................................ ................................ ............................... 22

4.3 Commercial and Industrial Sector Baseline Segmentation Findings

................................ .................. 23

4.3.1 2010 Electricity Sales by Sector, by EDC

................................ ................................ ....................... 23

4.3.2 Electricity Consumption by Segment

................................ ................................ ................................ . 25

4.3.3 Electri

city Consumption by End

- Use

................................ ................................ ................................ 26

4.3.4 Energy Use Intensity by End Use, by Commercial Segment

................................ .............................. 28

4.4 EDC Load Forecasts

................................ ................................ ................................ ................................ . 29

4.5 Current Pennsylvania EDC Energy Efficiency Programs

................................ ................................ ... 29

4.5.1 Current Energy Efficiency Program Cost and Savings Data

................................ ............................. 29

4.5.2 Current Duquesne Lighting Company Efficiency P rograms

................................ ............................... 31

4.5.3 Current FirstEnergy Efficiency Programs

– Excluding West Penn Power

................................ ........ 33

4.5.4 Current West Penn Power Energy Efficiency Programs

................................ ................................ ..... 35

4.5.5 Current PPL Energy E fficiency P rograms

................................ ................................ ........................ 36

4.5.6 Current PECO Energy E fficiency Programs

................................ ................................ .................... 38



## 5 P OTENTIAL 

## S TUDY 

## M ETHODOLOGY



## ................................ ............................ 41

5.1 Measure List Development

................................ ................................ ................................ ....................... 42

5.1.1 Measure Characteriz ation

................................ ................................ ................................ ................ 42

5.2 Forecast Disaggregation

................................ ................................ ................................ ............................ 44

5.2.1 Role of Naturally Occurring Conservation

................................ ................................ ........................ 44

5.3 Potential Savings Overview

................................ ................................ ................................ ...................... 44

5.4 Technical Potential

................................ ................................ ................................ ................................ ..... 45

5.4.1 Core Equation for the Residential Sector

................................ ................................ .......................... 47

5.4.2 Core Equation for the Commercial and Industrial Sector

................................ ................................ .. 48

5.5 Economic Potential

................................ ................................ ................................ ................................ .... 50P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page ii 

### 5.6 Determining Cost

- Effectiven ess

................................ ................................ ................................ .............. 51

5.6.1 The Total Resource Cost Test

................................ ................................ ................................ ........... 51

5.6.2 Avoided Costs

................................ ................................ ................................ ................................ .. 52

5.7 Achievable Potential

................................ ................................ ................................ ................................ .. 52

5.7.1 Achievable Potential Ma rket Penetration Rates for the Residential Sector

................................ ......... 53

5.8 Program Potential

................................ ................................ ................................ ................................ ....... 54



## 6 R ESIDENTIAL 

## E NERGY 

## E FFICIENCY 

## P OTENTIAL 

## E STIMATES



## ...................... 56

6.1 Energy Efficiency Measures Examined

................................ ................................ ................................ .. 56

6.2 Residenti al Sector Savings Methodology Overview

................................ ................................ ............. 57

6.3 Technical and Economic Potential Savings

................................ ................................ ........................... 60

6.4 Achievable Potential Savings in the residential sector

................................ ................................ .......... 62

6.4.1 Estimating Achievable Savings in the Residential Sector

................................ ................................ ... 62

6.4.2 Residential Achievable Savings Potential

................................ ................................ .......................... 62

6.4.3 Achievable Potential Benefits & Costs

................................ ................................ ............................. 66

6.5 Residential Savings by EDC

................................ ................................ ................................ ..................... 68



## 7 C OMMERCIAL 

## & I NDUSTRIAL 

## E NERGY 

## E FFICIENCY 

## P OTENTIAL 

## E STIMATES 

## 71

7.1 Non

- Residential Energy Efficiency Potential

................................ ................................ ........................ 71

7.1.1 Summary of Findings

................................ ................................ ................................ ....................... 71

7.1.2 Technical Potential

................................ ................................ ................................ ........................... 72

7.1.3 Economic Potential

................................ ................................ ................................ ........................... 73

7.1.4 Achievable Potential

................................ ................................ ................................ ......................... 73

7.1.5 Achievable Potential Benefits and Costs

................................ ................................ ........................... 77

7.2 Commercial Energy Efficiency Potential

................................ ................................ ............................... 79

7.2.1 Summary of Findings

................................ ................................ ................................ ....................... 80

7.2.2 Technical Potential

................................ ................................ ................................ ........................... 80

7.2.3 Economic Potential

................................ ................................ ................................ ........................... 81

7.2.4 Achievable Potential

................................ ................................ ................................ ......................... 81

7.3 Industrial Energy Efficiency Potential

................................ ................................ ................................ .... 85

7.3.1 Summa ry of Findings

................................ ................................ ................................ ....................... 85

7.3.2 Technical Potential

................................ ................................ ................................ ........................... 86

7.3.3 Economic Potential

................................ ................................ ................................ ........................... 86

7.3.4 Achievable Potential

................................ ................................ ................................ ......................... 86

7.4 Energy Efficiency Measu res Examined

................................ ................................ ................................ .. 89

7.5 Non

- Residential Savings by EDC

................................ ................................ ................................ ............ 91



## 8 P ROGRAM 

## E NERGY 

## E FFICIENCY 

## P OTENTIAL 

## E STIMATES



## ............................ 99

8.1 Estimation of Program Potential Scenario #1

................................ ................................ ...................... 99

8.1. 1 Phase 1 Budgets and Savings Goals

................................ ................................ ................................ . 99

8.1.2 Use of Achievable Potential Results

................................ ................................ ................................ 100

8.1.3 Program Potential Results

................................ ................................ ................................ .............. 102

8.2 Estimation of Program Potential Scenario #2

................................ ................................ .................... 104



## 9 C ONCLUSIONS



## ................................ ................................ ............................. 106

9.1 Important Considerations About This Energy Efficiency Potential Study

................................ .... 106

9.2 Concluding Thoughts

................................ ................................ ................................ .............................. 106



## A PPENDICES

A PPENDIX 

### 1: General Modeling A ssumptions and Avoided Costs

A PPENDIX 

### 2: Residential Sector Data

A PPENDIX 

### 3: Commercial Sector DataP ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page iii 

## L IST OF 

## F IGURES

Figure 1

- 1: Types of Energy Efficiency Potential

................................ ................................ ................................ .............................. 4

Figure 1

- 2: Energy Efficiency Potential Savings Summary for Commonwealth of Pennsylvania

................................ ............ 5

Figure 4

- 1: Pennsylvania Utility Service Territ ories

................................ ................................ ................................ ......................... 21

Figure 4

- 2: 2010 Electricity Sales by Sector

................................ ................................ ................................ ................................ ....... 24

Figure 4

- 3: Commercial Energy Consumption by Segment

................................ ................................ ................................ ........... 25

Figure 4

- 4: Industrial Energy Consumption by Segment

................................ ................................ ................................ ................ 26

Figure 4

- 5: Commercial Energy Consumption by End Use

................................ ................................ ................................ ........... 27

Figure 4

- 6: Industrial Energy Consumption by End Use

................................ ................................ ................................ ............... 27

Figure 4

- 7: Commercial Energy Use Intensities by Segment

................................ ................................ ................................ ......... 28

Figure 5

- 1: Types of Energy Efficiency Potential

................................ ................................ ................................ ............................ 45

Figure 5

- 2: Residential Sector Savings Methodology

- Bottom Up Approach

................................ ................................ ........... 46

Figure 5

- 3: Generic Example of a Supply Curve

................................ ................................ ................................ .............................. 48

Figure 6

- 1: Summary of Residential Energy Efficiency Potential as a % of 2010 Sales Forecasts

– Statewide

.................... 56

Figure 6

- 2: Residential Sector Savings Methodology

- Bottom Up Approach

................................ ................................ ........... 58

Figure 6

- 3: Residential Electric Efficiency Supply Curve for Pennsy lvania

................................ ................................ ................ 61

Figure 6

- 4: Residential Sector 2018 Achievable Potential Savings for Scenario #1 by End Use

................................ ............ 64

Figure 6

- 5: Residential Sector 2023 Achievable Potential Savings for Scenario #1 by End Use

................................ ............ 65

Figure 7

- 1: Summary of Non

- Residential Energy Efficiency Potential as a % of 2010 Sales Forecasts

– Statewide

.......... 71

Figure 7

- 2: Non

- Residential Sector 2018 Achievable Potential Savings for Scenario #2 by End Use

................................ .. 75

Figure 7

- 3: Non

- Residential Achievab le 1 Savings in 2018 by Vintage

................................ ................................ ........................ 76

Figure 7

- 4: Non

- Residential Achievable 2 Savings in 2018 by Vintage

................................ ................................ ........................ 76

Figure 7

- 5: Summary of Commercial Energy Efficiency Potential as a % of 2010 Sales Forecasts

– Statewide

.................. 80

Figure 7

- 6: Commercial Sector 2018 Achievable Potential Savings for Scenario #1 by End Use

................................ .......... 83

Figure 7

- 7: 5

- Year Commercial Achievable 2 Cumulative Savings Distribution by Segment (2018)

................................ ..... 84

Figure 7

- 8: Summary of Industrial Energy Eff iciency Potential as a % of 2010 Sales Forecasts

– Statewide

...................... 85

Figure 7

- 9: Industrial Sector 2018 Achievable Potential Savings for Scenario #2 by End Use

................................ ............... 88

Figure 7

- 10: Industrial Achievable 2, 5

- Year Cumulative Savings Distribution by Segment

................................ ................... 89

Figure 8

- 1: PECO Scaling Model

................................ ................................ ................................ ................................ ...................... 102

Figure 8

- 2: Program Potential Range 2013

- 2018

................................ ................................ ................................ .......................... 104



## L IST OF 

## E QUATIONS

Equation 5

- 1: Core Equation for Residential Sector Techn ical Potential

................................ ................................ .................... 47

Equation 5

- 2: Core Equation for Commercial Sector Technical Potential

................................ ................................ ................. 49

Equation 5

- 3: Core Equation for Indus trial Sector Technical Potential

................................ ................................ ...................... 49

Equation 5

- 4: Adoption Rates Over Time

– Replace on Burnout

................................ ................................ ................................ 53

Equation 6

- 1: Core Equation f or Residential Sector Technical Potential

................................ ................................ .................... 59P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page iv 

## L IST OF TABLES

Table 1

- 1: Total Resource Cost Test Benefit

- Cost Ratios for Achievable Potential Scenario #1 For 3

- Year, 5

- Year, and

10

- Year Implementation Periods

................................ ................................ ................................ ................................ ............... 2

Table 1

- 2: Total Resource Cost Test Benefit

- Cost Ratios for Achievable Potential Scenario #2 For 3

- Year, 5

- Year, and

10

- Year Implementation Periods

................................ ................................ ................................ ................................ ............... 2

Table 1

- 3: Program Potential Scenario 1 2013

- 2016 Cumulative Savings and Budget

................................ ................................ 6

Table 1

- 4: Program Potential Scenar io 1 2013

- 2018 Cumulative Savings and Budget

................................ ................................ 7

Table 1

- 5: Energy Efficiency Potential Savings Detail (by EDC and Customer Class) for 2016

................................ .............. 7

Table 1

- 6: Energy Efficiency Potential Savings Detail (by EDC and Customer Class) for 2018

................................ .............. 9

Table 3

- 1: Results of Recent Energy Efficiency Potential Studies in the Northeast and U S

................................ ................... 19

Table 3

- 2: Total Resource Cost Test Benefit

- Cost Ratios for Achievable Potential Scenario #1 For 3

- Year, 5

- Year, and

10

- Year Implementation Periods

................................ ................................ ................................ ................................ ............. 20

Table 3

- 3: Total Resource Cost Test Benefit

- Cost Ratios for Achievable Potential Scenario #2 For 3

- Year, 5

- Year, and

10

- Year Implementation Periods

................................ ................................ ................................ ................................ ............. 20

Table 4

- 1: Nu mber of Customers by Customer Sector

................................ ................................ ................................ .................. 23

Table 4

- 2: 2010 MWh Sales Breakdown by EDC, and by Sector

................................ ................................ ................................ . 24

Table 4

- 3: 2010 Premise Cou nts by EDC and by Sector

................................ ................................ ................................ ................ 24

Table 4

- 4: Commercial Energy Consumption by Segment

................................ ................................ ................................ ............ 25

Table 4

- 5: Industrial Energy Consumption by S egment

................................ ................................ ................................ ................. 26

Table 4

- 6: Commercial Energy Use Intensities by Segment

................................ ................................ ................................ .......... 28

Table 4

- 7: Statewide Sales Forecasts by Sector

................................ ................................ ................................ ................................ . 29

Table 4

- 8: Demand Management or Other Programs Not Included in Cost Analysis

................................ ............................. 30

Table 4

- 9: CPITD Cost Data for Energy Efficiency Portfoli os

................................ ................................ ................................ .... 30

Table 4

- 10: PY2 CPITD Verified Savings for Energy Efficiency Programs by EDC

................................ .............................. 30

Table 4

- 11: Statewide Acquisition Costs

................................ ................................ ................................ ................................ ............ 31

Table 4

- 12: Incentive Costs as a Percentage of Participant Costs

................................ ................................ ................................ . 31

Table 6

- 1: Measures and Programs Included in the Residentia l Sector Analysis

................................ ................................ ........ 57

Table 6

- 2: Statewide Residential Sector Technical Potential kWh Savings By End Use

................................ ........................... 60

Table 6

- 3: Statewide Residential Sector Economic Potential kWh Savings By End Use

................................ .......................... 61

Table 6

- 4: Statewide Achievable Potential in 2016

................................ ................................ ................................ .......................... 63

Table 6

- 5: Statewide Achievable Potential in 2018

................................ ................................ ................................ .......................... 63

Table 6

- 6: Statewide Achievable Potential in 2023

................................ ................................ ................................ .......................... 64

Table 6

- 7: Cumulative Annual Resi dential Energy Savings in Achievable Potential Scenario 1 by End Use for

Pennsylvania

................................ ................................ ................................ ................................ ................................ ................. 65

Table 6

- 8: Cumulative Annual Residential Energy Savings in Achievable Potential Scenario 2 by End Use f or Pennsylvania

................................ ................................ ................................ ................................ ................................ ................. 65

Table 6

- 9: Residential 3

- Year and 5

- Year Acquisition Costs Under the Achievable 2 Scenario

................................ ............. 66

Table 6

- 10: 3

- Y ear TRC Ratios for Achievable Potential Scenario#1

– Residential Sector Only

................................ .......... 66

Table 6

- 11: 5

- Year TRC Ratios for Achievable Potential Scenario#1

– Residential Sector Only

................................ .......... 66

Table 6

- 12: 10

- Year TRC Ratios for Achievable Potential Scenario#1

– Residential Sector Only

................................ ........ 67

Table 6

- 13: 3

- Year TRC Ratios for Achievable Pote ntial Scenario#2

– Residential Sector Only

................................ .......... 67

Table 6

- 14: 5

- Year TRC Ratios for Achievable Potential Scenario#2

– Residential Sector Only

................................ .......... 67

Table 6

- 15: 10

- Year TRC Ratios for Achievable Potential Scenario#2

– Residential Sector Only

................................ ........ 68

Table 6

- 16: 3

- Year Potential Savings by Scenario and EDC (2016)

................................ ................................ ............................. 68

Table 6

- 17: 5

- Year Potential Savings by Scenario and EDC (2018)

................................ ................................ ............................. 69

Table 6

- 18: 10

- Year Potential Savings by Scenario and EDC (2018)

................................ ................................ ........................... 69

Table 7

- 1: Institutional Savings as a Percentage of Non

- Residential Sales

................................ ................................ .................. 72P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page v Table 7

- 2: Statewide Non

- Residential Sector Technical Potent ial kWh Savings By End Use

................................ ................. 73

Table 7

- 3: Statewide Non

- Residential Sector Economic Potential kWh Savings By End Use

................................ ................ 73

Table 7

- 4 : Non

- Residential Achievable Savings Potential in 2016

................................ ................................ ................................ 74

Table 7

- 5: Non

- Residential Achievable Savings Potential in 2018

................................ ................................ ................................ 74

Tab le 7

- 6: Non

- Residential Achievable Savings Potential in 2023

................................ ................................ ................................ 75

Table 7

- 7: Cumulative Annual Non

- Residential Energy Savings in Achievable Potential Scenario 1 by End Use for

Pennsylvania

................................ ................................ ................................ ................................ ................................ ................. 77

Table 7

- 8: Cumulative Annual Non

- Residential Energy Savings in Achievable Potential Scenario 2 by End Use for

Pennsylvania

................................ ................................ ................................ ................................ ................................ ................. 77

Tabl e 7

- 9: Non

- Residential 3

- Year and 5

- Year Acquisition Costs Under the Achievable 2 Scenario

................................ .... 77

Table 7

- 10: 3

- Year TRC Ratios for Achievable Potential Scenario#1

– Non

- Residential Sector Only

................................ . 78

Table 7

- 11: 5

- Year TRC Ratios for Achievable Potential Scenario#1

– Non

- Residential Sector Only

................................ . 78

Table 7

- 12: 10

- Year TRC Rati os for Achievable Potential Scenario#1

– Non

- Residential Sector Only

.............................. 78

Table 7

- 13: 3

- Year TRC Ratios for Achievable Potential Scenario#2

– Non

- Residential Sector Only

................................ . 79

Table 7

- 14: 5

- Year TRC Ratios for Achievable Potential Scenario#2

– Non

- Residential Sector Only

................................ . 79

Table 7

- 15: 10

- Year TRC Ratios for Achievable Pote ntial Scenario#2

– Non

- Residential Sector Only

.............................. 79

Table 7

- 16: Statewide Commercial Sector Technical Potential kWh Savings By End Use

................................ ...................... 81

Table 7

- 17: Statewide Commercial Sector Economic Potential kWh Savings By End Use

................................ ..................... 81

Table 7

- 18: Commercial Achievable Savings Potential in 2016

................................ ................................ ................................ ..... 82

Table 7

- 19: Commercial Achievable Savings Potential in 2018

................................ ................................ ................................ ..... 82

Table 7

- 20: Commercial Achievable Savings Potential in 2023

................................ ................................ ................................ ..... 83

Table 7

- 21: Commercial Achievable 2 Scenario Savings Potential by Segment

................................ ................................ ......... 84

Table 7

- 22: Commercial 3

- Year and 5

- Year Acquisition Costs Under the Achievable 2 Scenari o

................................ ......... 85

Table 7

- 23: Statewide Industrial Sector Technical Potential kWh Savings By End Use

................................ ........................... 86

Table 7

- 24: Statewide Industrial Sect or Economic Potential kWh Savings By End Use

................................ .......................... 86

Table 7

- 25: Industrial Achievable Savings Potential in 2016

................................ ................................ ................................ .......... 87

Table 7

- 26: Indus trial Achievable Savings Potential in 2018

................................ ................................ ................................ .......... 87

Table 7

- 27: Industrial Achievable Savings Potential in 2023

................................ ................................ ................................ .......... 87

Table 7

- 28: Industr ial Achievable Potential Scenario 2 Savings by Segment

................................ ................................ .............. 88

Table 7

- 29: Industrial 5

- Year Acquisition Costs Under The Achievable 2 Scenario by EDC

................................ ................. 89

Table 7

- 30: Measures and Programs Included in the Commercial Sector Analysis

................................ ................................ ... 90

Table 7

- 31: Measures and Programs Included in the Industrial Sector Analysis

................................ ................................ ........ 91

Table 7

- 32: 3

- Year Potential Savings by Sector, Scenario, and EDC (2016)

................................ ................................ ............... 91

Table 7

- 33: 5

- Year Potential Savings by Sector, Scenario, and ED C (2018)

................................ ................................ ............... 94

Table 7

- 34: 10

- Year Potential Savings by Sector, Scenario, and EDC (2023)

................................ ................................ ............. 96

Table 8

- 1: One

- Year, Three

- Year and Fiv e

- Year Program Potential Budgets

................................ ................................ ............ 99

Table 8

- 2: Budgets and Savings Targets for Phase 1 of Act 129

................................ ................................ ................................ ... 99

Table 8

- 3: Summary of 2013

- 2016 Cumulative Annual Achievable Scenario 2 Costs and Savings

................................ .... 101

Table 8

- 4: Summary of 2013

- 2018 Cumulative Annual Achievable Scenario 2 Costs and Savings

................................ ...... 101

Table 8

- 5: Comparison of 2013

- 2016 Cumulative Annual Achievable 2 Costs and Program Budget

................................ . 101

Table 8

- 6: Comparison of 2013

- 2018 Cumulative Annual Achievabl e 2 Costs and Program Budget

................................ . 101

Table 8

- 7: Program Potential Scenario 1 2013

- 2016 Cumulative Savings and Budget

................................ ............................ 103

Table 8

- 8: Program Potential Scenario 1 2013

- 2018 Cumulative Savings and Budget

................................ ............................ 103

Table 8

- 9: Program Potential Scenario 2 2013

- 2016 Estimated Program Costs

................................ ................................ ...... 105

Table 8

- 10: Program Potential Scenario 2 2013

- 2018 Estimated Program Costs

................................ ................................ .... 105P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 1 

## 1 E XECUTIVE 

## S UMMARY



### Act 129 of 2008 (“the Act” or “Act 129”) was signed into law on October 15, 2008 and took effect 30

da ys thereafter on November 14, 2008. Among other things, the Act created an energy efficiency and

conservation program for Pennsylvania , codified in the Pennsylvania Public Utility Code at Sections

2806.1 and 2806.2, 66 Pa. C.S. §§ 2806.1 and 2806.2. This p rogram required an Electric Distribution

Company ( EDC ) with at least 100,000 customers to adopt a plan, approved by the Commission, to
reduce electric consumption by at least one percent (1%) of its expected consumption for the period

June 1, 2009 through May 31, 2010, adjusted for weather and extraordinary loads. This one percent (1%)

reduction was to be a ccomplished by May 31, 2011. By May 31, 2013, the total annual weather

normalized consumption is to be reduced by a minimum of three percent (3%). Also, by May 31, 2013,
peak demand is to be reduced by a minimum of four

- and

- a

- half percent (4.5%) of the EDC’s annual
system peak demand in the 100 hours of highest demand, measured against the EDC’s peak demand
during the period of June 1, 2007 through May 31, 2008. By November 30, 2013, the Commission is to
assess the cost effectiveness of the program and set additional incremental reductions in electric
consumption if the benefits of the program exceed its costs.

Pennsylvania Act 129 also required the Commis sion to evaluate, by November 3 0 , 2013

, and every five
years thereafter, the costs and benefits of the program established for the prior plan period and set
additional incremental reductions in electric consumption if the benefits of the program exceed its costs

. This evaluation is to be consistent with a total resource cost test or a cost

- benefit analysis determined by

the Commission. The purpose of this energy efficiency potential study is to determine the remaining
opportunities for cost effective electr icity savings in the service areas of the seven electric distribution
companies in Pennsylvania that are subject to the energy efficiency requirements of Act 129. This
detailed report presents results of the technical, economic, and achievable potential fo r electric energy
efficiency programs in the service areas of Pennsylvania ’s seven EDCs for the three time periods:

 T he three

- year period from June 1, 2013 through May 31, 2016

,

 T he five

- year period from June 1, 2013 through May 31, 2018 , and

 The ten

- yea r period from June 1, 2013 through May 31, 2023

In addition, program potential for electric energy efficiency programs was calculated for the three and

five

- year time periods noted above.

All results were developed using customized residential and commer cial/industrial (C&I) sector

- level
potential assessment analytic models and Pennsylvania

- specific cost effectiveness criteria including the

most recent Pennsylvania EDC avoided cost projections for electricity and other fuels . To help inform

these energy e fficiency potential models, up

- to

- date energy efficiency measure data were primarily

obtained from the following recent studies:

1) 

### Pennsylvania Technical Reference Manual, June 2012

2) 

### Mid

- Atlantic Technical Reference Manual 2.0, July 2011

3) 

### Pennsylvania Statewid e Evaluator Residential and Commercial/Industrial Baseline Studies, April

2012

4) PECO Baseline Study, February 2011

5) Northeast Energy Efficiency Partnership (NEEP) Incremental Cost Study Report, 2011

6) Appliance saturation studies conducted by the Pennsylvania EDCs

The above data sources provided valuable information regarding the current saturation , costs

, savings

and useful lives of electrical efficiency measures considered in this study.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 2 

### The results of this study provide detailed information on energy effic iency measures that are the most cost effective and have the greatest potential kWh and kW savings in the service areas of the

Pennsylvania EDCs . T he data used for this report were the best available at the time this analysis was
developed . As building and appliance codes and energy efficiency standards change

, and as energy prices
fluctuate, additional opportunities for energy efficiency may occur while current practices may become

outdated

.



### 1.1 C OST 

### E FFECTIVENESS 

### F INDINGS



### Act 129 of 2008 states the follow ing about determining cost effectiveness for subsequent versions of Act

129 programs:

“By November 30, 2013, and every five years thereafter, the Commission shall evaluate
the costs and benefits of the program established under subsection (A) and of approv ed
energy efficiency and conservation plans submitted to the program. The evaluation shall

be consistent with a Total Resource Cost test or a cost

- benefit analysis determined by
the commission. If the Commission determines that the benefits of the program exceed
the costs, the Commission shall adopt additional required incremental reductions in

consumption. ”

This study concludes that continuing electric energy efficiency programs in a Phase 2 of Act 129 will
continue to be very cost effective for Pennsylv ania ratepayers. Table 1

- 1 and 1

- 2 show the Total

Resource Cost test benefit

- cost ratios for the Achievable Potential scenarios #1 and #2 for the three

, five

, and ten

- year implementation period s starting on June 1, 2013. The TRC ratios statewide for

Achiev able Potential scenario #1 are 1.75

, 1.83 and 1.9 5 for the three

- year, five

- year and ten

- year time
periods respectively. The TRC ratios statewide for Achievable Potential scenario # 2 are 1.73

, 1.85 and

1.9 7 for these three time periods

.

Table 1

- 1: Total R esource Cost Test Benefit

- Cost Ratios for Achievable Potential Scenario #1 For 3

- Year, 5

- Year, and 10

- Year Implementation Periods

TRC Benefits TRC Costs TRC

Ratio

3

- Year Period $ 4,236,649,800.37 $ 2,415,984,248.08 1.75

5

- Y ear Period $ 8,349,633,190.47 $ 4,571,820,105.28 1.83

10

- Year Period $ 21,026,641,589.24 $ 10,759,165,841.58 1.95

Table 1

- 2: Total Resource Cost Test Benefit

- Cost Ratios for Achievable Potential Scena rio #2 For 3

- Year, 5

- Year, and 10

- Year Implementation Periods

TRC Benefits TRC Costs TRC Ratio

3

- Year Period $ 3,799,475,599.64 $ 2,202,502,753.00 1.73

5

- Year Period $ 4,540,392,369.13 $ 2,450,74 3,984.66 1.85

10

- Year Period $ 9,455,821,361.87 $ 4,808,941,993.06 1.97



### In addition, the Statewide Evaluation Team did calculate a TRC ratio for each energy efficiency measure
considered in this study. Only energy efficien cy measures that had a TRC ratio greater than or equal to
1.0 were retained in the economic, achievable and program potent i al savings estimates.



### 1.2 S TUDY 

### S COPE



### The study examines the potential to reduce electric consumption and peak demand through the
implem entation of energy efficiency technologies and practices in residential, commercial, and industrialP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 3 

### facilities in Pennsylvania . Th is study assesse s electric energy efficiency potential throughout the

Pennsylvania EDC service areas over ten years, from 20 13 through 20 23

.

The study had the following main objectives:

 Evaluate the electric energy efficiency technical , economic, achievable and program potential

savings in the overall Commonwealth of Pennsylvania , as well as in seven specific EDC service

areas ;

 Calculate the Total Resource Cost Test ( “ TRC ” ) benefit

- cost ratio for the achievable potential

savings for electric energy efficiency measures and programs and determine the electric energy
efficiency economic potential savings for Pennsylvania homes and b usinesses

.

The scope of thi s study distinguishes among four types of energy efficiency potentia l; (1) technical, (2)

economic, (3) achie vable, and (4) program potential . The definitions used in this study for energy
efficiency potential estimates were obt ained directly from a recent National Action Plan for Energy

Efficiency (NAPEE) report and are as follows:

 Technical Potential is the theoretical maximum amount of energy use that could be displaced
by effi ciency, disregarding all non

- engineering constrain ts such as cost

- effectiveness and the
willingness of end

- users to adopt the efficiency measures. It is often estimated as a “snapshot” in
time assuming immediate implementation of all technologically feasible energy saving measures,

with additional efficie ncy opportunities assumed as they arise from activities such as new

construction. 1



### • Economic P otential refers to the subset of the technical potential that is economically cost

effective as compared to conventional supply

- side energy resources. Both techni cal and
economic potential are theoretical numbers that assume immediate implementation of efficiency
measures, with no regard for the gradual “ramping up” process of real

- life programs. In addition,
they ignore market barriers to ensuring actual implement ation of efficiency. Finally, they only
consider the costs of efficiency measures themselves, ignoring any programmatic costs (e.g.,
marketing, analysis, administration , etc. ) that would be necessary to capture them. 2



###  Achievable P otential is the amount of energy use that efficiency can realistically be expected to
displace assuming the most aggressive program scenario possible (e.g., providing end

- users with
payments for the entire incremental cost of more efficien t equipment). This is often referred to

as maximum achievable potential. Achievable potential takes into account real

- world barriers to
convincing end

- users to adopt efficiency measures, the non

- measure costs of delivering
programs (for administration, marketing, tracking systems, monitoring and e valuation, etc.), and
the capability of programs and administrators to ramp up program activity over ti me. 3 

### This
study considers two main scenarios for analysis:

 

### S cenario #1 is based on paying incentives equal to 100% of measure incremental costs

 

### Scenario #2 is based on EDCs paying incentive levels comparable to those in effect
during Program Year 2.

 Program Potential refers to the efficiency potential possible given specific program funding
levels and designs. Often, program potential studies are referred to as “achievable” in contrast to
“maximum achievable.” In effect, they estimate the achievable potential from a given set of
programs and funding. Program potential studies can consider scenarios ranging from a single
program to a full portfolio of progr ams. A typical potential study may report a range of results
based on different program funding levels.

1 National Action Plan for Energy Efficiency, “Guide for Conducting Energy Efficiency Potential Studies” (November 2007),

page 2

- 4. For purposes of this study, GDS and Nexant have used the de finitions exactly as listed in the 2007 NAPEE report

without making any modifications.

2 Id

3 IdP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 4 

###  S cenario #1 is based on funding levels of 2% of 2006 utility electric revenues (this is the
funding cap specified in Act 129 legislation).

 S cenario #2 i s based on a nnual savings equal to 1% of aggregate 2011 actual retail kWh

sales

. Figure 1

- 1 below provides a graphical representation of the relationship of the various definitions of
energy efficiency potential.

Figure 1

- 1: Types of E nergy E fficiency Pot ential 4



### Limitations to the scope of study: As with any assessment of energy efficiency potential, this study necessarily

bu ilds on a large number of assumptions and data sources

, including the following:

 Energy efficiency m easure lives, measure savings and measure costs

 T he discount rate for determining the net present value of future savings

 Projected penetration rates for energy efficiency measures

 Projections of electric generation avoided costs for electric capacity and energy as defined in the

2009 and 2011 Pennsylvania PUC Total Resource Cost Test (TRC) Orders.

 Future changes to current codes and standards

While the Pennsylvania Statewide Evaluation Team (SWE) has sought to use the best and most current

available data, there are many assumptions w here there may be reasonable alternative assumptions that
would yield somewhat different results. Furthermore, while the lists of energy efficiency measures examined in this study represent most commercially available measures, these measure lists are not exhaustive. Finally there was no attempt to place a dollar value on some difficult to quantify benefits

arising from installation of some measures, such as increased comfort or increased safety , which may in
turn support some personal choices to implement particular measures that may otherwise not be cost

effective or only marginally so.



### 1.3 R EPORT 

### O RGANIZATION



### The remainder of this report is organized in the following nine sections as follows:

Section 1: Executive Summary provides an overview of initial findi ngs from the potential study and
outlines the remainder of the report

Section 2: Glossary of Terms defines key terminology used in the report

.

4 Reproduced from “Guide to Resource Planning with Energy Efficiency” November 2007. US EPA. Figure 2

- 1.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 5 

### Section 3: Introduction highlights the purpose of this study and the importance of energy efficiency.

Section 4: Characterization of Pennsylvania Service Areas provides an overview of the Pennsylvania

EDC service areas and a brief discussion of the historical and forecasted electric energy sales by sector as well as peak demand.

Section 5: Methodology details the app roach used to develop the estimates of technical, economic,

achievable and program potential for electric energy efficiency savings

.

Section 6: Residential Energy Efficiency Potential Estimates ( 2012

- 2023 ) provides a breakdown of

the technical, economic, a nd achievable p otential in the r esidential sector

.

Section 7 : Commercial and Industrial Energy Efficiency Potential Estimates ( 2012

- 2023 )
provides a breakdown of the technical, economic, and achievable in the C&I sector s

.

Section 8: Program Energy Effic iency Potential Estimates (June 2013

- May 2018) provides
detailed information on the program potential in the residential, commercial and industrial sector s

.

Section 9 : Conclusions presents the final discussion regarding potential for energy efficiency savi ngs through 20 23

.



### 1.4 R ESULTS 

### O VERVIEW



### This study examined over 579 energy efficiency measure s in the residential, commercial and industrial

sectors combined

. Three hundred and seventeen measures were included in the residential sector energy
efficiency poten tial analysis. For the non

- residential sector, there were 262 total measure s included in the
potential energy savings analysis. Of these 262 measures, 95 were considered in the industrial model and

167 were included in the commercial model. The 262 is a co unt of the individual measures included ; many measures had overlap between different segments and were counted as one measure

.

Figure 1

- 2 : E nergy E fficiency Potential Savings Summary for Commonwealth of Pennsylvania



### Figure 1

- 2, presented above, shows that cost effective electric energy efficiency resources can play a
significantly expanded role in the Pennsylvania energy resource mix over the next 10 years

. For the
region of the Commonwealth of Pennsylvania served by the seven electric distribution co mpaniesP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 6 

### covered by Act 129 , the technical potential in 201 6 and in 2018 for energy efficiency is 19.9% and

2 3 .4 % , respectively, of forecasted kWh sales for the 2010 baseline period for this study

. 5 

### The energy
efficiency savings for economic potential and a chievable potential scenario #2 in 201 6 are 17.2 % and

2.7 % of forecasted kWh sales for the 2010 baseline period. The energy efficiency savings for economic
potential and achievable potential scenario #2 in 2018 are 20% and 4.6 % of forecasted kWh sales for the
2010 baseline period.

Estimation of program potential for P hase 2 of Act 129 utilizes both residential and non

- residential
potential savings. Because achievable po tential scenario # 2 is based on P hase 1 performance, this

achievable scenario was utiliz ed as the starting point for the determination of program potential. A
detailed description of the methodology to estimate both program potential scenarios is included in
section 8 of this report.

The three

- year and five

- year program potential scenario # 1 energy savings and budget values are found

in Table 1

- 3 and Table 1

- 4 for each EDC and statewide

. Program potential scenario #1 considered an
annual spending ceiling that limits the program spending to 2% of 2006 annual revenue as described

within A ct 129

. Consequently, t he SWE recommends that the savings targets for Phase 2 be based on
the program potential 1 scenario presented in Table 1

- 3 or Table 1

- 4 below

. The SWE Team finds that

so long a s the Pennsylvania T echn ic al Reference Manual continues to be updated annually during Phase
2 of the Act 129 programs, then there is no clear advantage of one of these scenarios over the other (all
other things held constant).

Table 1

- 3 : Program Potenti al Scenario 1 2013

- 201 6 Cumulative Savings and Budget

EDC 3 Year

Spending

Ceiling

(total portfolio) 3 Year Program

Potential

Savings (MWh) 3 Year Program

Acquisition Cost ($/MWh) 3 Year % of

2009/10

Forecast Probable Range

of 2009/10

Forecast

Duquesne $5 8,637,855 276,722 $211.90 2.0 % 1.7 %

- 2. 5 %

Met

- Ed $74,600,676 337,753 $220.87 2. 3 % 2.0%

- 2.7%

Penelec $68,924,232 318,813 $216.19 2.2% 1.9%

- 2. 7 %

Penn Power $19,979,352 95,502 $209.20 2.0% 1.7%

- 2. 5 %

PPL $184,504,128 821,072 $224.71 2.1% 1.9%

- 2.7%

PECO $256,185,476 1,125,851 $227.55 2. 9 % 2.6%

- 3.1%

West Penn $70,687,404 337,533 $209.42 1.6% 1. 4 %

- 2.1%

Statewide $733,519,122 3,313,247 $221.39 2. 3 % 2.0%

- 2.7%

5 For purposes of this study, the baseline period sale s are forecast k Wh sales for each EDC for the period June 1, 2009 through

May 31, 2010. Forecasted 2009/2010 kWh sales were used to allow the same baseline to establish compliance targets on a

cumulative basis from Phase 1 to Phase 2, which also allows add ing kWh savings from Phase 1 to Phase 2. All energy and

demand savings presented in this report are at the end

- consumer (meter) level unless specifically noted otherwise in this report.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 7 Table 1

- 4 : Program Potential Scenario 1 2013

- 2018 Cumulat ive Savings and Budget

EDC 5 Year

Spending

Ceiling

(total portfolio) 5

Year Program

Potential

Savings (MWh) 5

Year Program

Acquisition Cost ($/MWh) 5 Year % of

2009/10

Forecast Probable Range

of 2009/10

Forecast

Duquesne $97,729,758 442,451 $220.88 3.1% 2.8%

- 4. 2 %

Met

- Ed $124,334,460 540,210 $230.16 3.6% 3. 4 %

- 4.5%

Penelec $114,873,720 513,332 $223.78 3.6% 3. 2 %

- 4.4%

Penn Power $33,298,920 154,500 $215.53 3.2% 2. 8 %

- 4.1%

PPL $307,506,880 1,332,001 $230.86 3. 5 % 3.2%

- 4.5%

PECO $426,975,793 1,884, 517 $226.57 4.8% 4.3%

- 5.2%

West Penn $117,812,340 547,332 $215.25 2.6% 2. 3 %

- 3.5%

Statewide $1,222,531,870 5,414,343 $225.80 3. 7 % 3.3%

- 4.5%



### The uncertainty ranges presented are largely based on outcomes of this study supplemented with

research of other regional (non

- Pennsylvania) utilities ’ program forecasts, and SWE’s industry

experience

. There are several key observations to be noted within these program potential savings and
budgets:

 For the three year period (2013

- 2016), program potential scena rio 1 estimated MWh savings are
2.3% of forecast sales. Over the five year period (2013

- 2018) program potential scenario 1
estimated MWh savings are 3.7% of forecast sales.

 Program potential savings are less than currently expected with Phase 1 implementat ion. This is
largely due to the impacts of federal legislation, changing baseline conditions and increasing
saturation of energy efficient equipment.

 Expected program costs are considerably higher than current Phase 1 implementation. Statewide

estimated ac quisition costs for 2013

- 201 8 are 62 % higher than current acquisition costs.



### 1.5 E NERGY 

### E FFICIENCY 

### P OTENTIAL 

### S AVINGS 

### D ETAIL



### Table 1

- 5 and Table 1

- 6 below show the energy efficiency potential savings by EDC a nd customer class

in 2016 and 2018. Section 6 (Residential Sector Energy Efficiency Potential Estimates) and Section 7
(Commercial & Industrial Sector Energy Efficiency Potential Estimates) include additional detail of
energy efficiency potential by EDC in 2023.

Table 1

- 5 : E nergy E fficiency Potential Savings Detail (by EDC and Customer Class ) for 201 6 6

Technical

Potential Economic

Potential Achievable

Potential

Scenario#1 Achievable

Potential

Scenario#2 Program

Potential

Scenario#1 Progr am

Potential

Scenario#2

ALL SECTORS COMBINED

State

- wide

Energy (MWh) 29,201,604 25,224,866 6,339,540 3,999,960 3,313,247 4,399,854

% of 2010 MWh Sales 19.9% 17.2% 4.3% 2.7% 2.3% 3.0%

Summer MW 6,028.2 4,581.2 1,418.9 816.6 664.2 900.5

Duquesne Territory

Energy (MWh) 2,854,052 2,454,905 673,803 412,981 276,722 422,565

% of 2010 MWh Sales 20.3% 17.4% 4.8% 2.9% 2.0% 3.0%

Summer MW 595.2 409.8 126.3 75.3 50.4 77.0

Met

- Ed Territory

Energy (MWh) 2,683,130 2,362,083 595,265 378,339 337,753 445,951

% of 2010 MWh Sales 18.0% 15.9% 4.0% 2.5% 2.3% 3.0%

Summer MW 525.1 418.3 135.1 74.7 66.7 88.0

6 The baseline kWh sales for this study are a forecast for the period June 1, 2009 to May 1, 2010.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 8 Technical

Potential Economic

Potential Achievable

Potential

Scenario#1 Achievable

Potential

Scenario#2 Program

Potential

Scenario#1 Progr am

Potential

Scenario#2

Penelec Territory

Energy (MWh) 2,498,934 2,229,523 593,366 371,169 318,813 431,979

% of 2010 MWh Sales 17.4% 15.5% 4.1% 2.6% 2.2% 3.0%

Summer MW 498.1 433.9 144.3 79.9 68.6 93.0

Penn Power Territory

Energy (MWh) 782,602 691,036 175,450 110,399 95,502 143,188

% of 2010 MWh Sales 16.4% 14.5% 3.7% 2.3% 2.0% 3.0%

Summer MW 161.1 129.9 44.3 23.7 20.5 30.7

West Penn Power Territory

Energy (MWh) 3,525,181 3,096,353 810,312 502,889 337,533 628,160

% of 2010 MWh Sales 16.8% 14.8% 3.9% 2.4% 1.6% 3.0%

Summer MW 784.3 695.6 221.4 123.9 83.1 154.7

PECO Territory

Energy (MWh) 8,585,180 6,977,563 1,714,520 1,0 81,205 1,125,851 1,181,580

% of 2010 MWh Sales 21.8% 17.7% 4.4% 2.7% 2.9% 3.0%

Summer MW 1,831.5 1,146.3 296.1 183.8 191.3 200.8

PPL Territory

Energy (MWh) 8,272,524 7,413,402 1,776,823 1,142,977 821,072 1,146,431

% of 2010 MWh Sales 21.6% 19.4% 4.6% 3.0% 2.1% 3.0%

Summer MW 1,632.8 1,347.4 451.4 255.4 183.5 256.2

RESIDENTIAL SECTOR ONLY

State

- wide

Energy (MWh) 21,847,632 19,163,895 2,997,353 2,227,067 1,840,617 2,443,862

% of 2010 MWh Sales 40.3% 35.4% 5.5% 4.1% 3.4% 4.5%

Summe r MW 4,583.5 3,333.1 630.6 451.5 369.4 497.7

Duquesne Territory

Energy (MWh) 1,951,950 1,738,874 273,619 203,534 136,380 208,258

% of 2010 MWh Sales 46.6% 41.5% 6.5% 4.9% 3.3% 5.0%

Summer MW 438.1 281.3 51.2 37.7 25.3 38.6

Met

- Ed Territory

Energy (MWh) 2,015,625 1,802,165 288,988 214,558 191,542 252,901

% of 2010 MWh Sales 32.5% 29.5% 4.7% 3.5% 3.1% 4.1%

Summer MW 391.1 299.9 56.6 40.0 35.7 47.2

Penelec Territory

Energy (MWh) 1,780,538 1,618,293 257,169 192,379 165,242 223,896

% of 2010 MWh Sales 36.5% 33.1% 5.3% 3.9% 3.4% 4.6%

Summer MW 350.2 300.9 55.3 41.0 35.2 47.7

Penn Power Territory

Energy (MWh) 579,802 521,073 81,325 60,683 52,495 78,706

% of 2010 MWh Sales 31.4% 28.4% 4.4% 3.3% 2.8% 4.3%

Summer MW 112.9 87.2 15.3 11.1 9.6 14.5

West Penn Power Territory

Energy (MWh) 2,584,323 2,302,869 366,589 270,787 181,749 338,241

% of 2010 MWh Sales 32.6% 29.0% 4.6% 3.4% 2.3% 4.3%

Summer MW 566.2 511.1 100.9 69.9 46.9 87.3

PECO Territory

Energy (MWh) 6,489,928 5,292,925 791,936 588,433 612,730 643,060

% of 2010 MWh Sales 46.3% 37.8% 5.7% 4.2% 4.4% 4.6%

Summer MW 1,530.5 897.2 150.7 110.9 115.5 121.2

PPL Territory

Energy (MWh) 6,445,466 5,887,698 937,727 696,694 500,479 698,799

% of 2010 MWh Sales 42.6% 38.9% 6.2% 4.6% 3.3% 4.6%P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 9 Technical

Potential Economic

Potential Achievable

Potential

Scenario#1 Achievable

Potential

Scenario#2 Program

Potential

Scenario#1 Progr am

Potential

Scenario#2

Summer MW 1,194.4 955.5 200.5 140.8 101.2 141.2

NON

- RESIDENTIAL ONLY

State

- wide

Energy (MWh) 7,353,972 6,060,971 3,342,188 1,772,893 1,472,630 1,955,992

% of 2010 MWh Sales 8.0% 6.6% 3.6% 1.9% 1.6% 2.1%

Summer MW 1,444.7 1,248.1 788.3 365.1 294.8 402.8

Duquesne Territory

Energy (MWh) 902,102 716,031 400,184 209,446 140,342 214,307

% of 2010 MWh Sales 9.1% 7.2% 4.0% 2.1% 1.4% 2.2%

Summer MW 157.1 128.4 75.1 37.6 25.2 38 .4

Met

- Ed Territory

Energy (MWh) 667,505 559,918 306,278 163,781 146,212 193,050

% of 2010 MWh Sales 7.7% 6.5% 3.5% 1.9% 1.7% 2.2%

Summer MW 134.0 118.4 78.4 34.6 30.9 40.8

Penelec Territory

Energy (MWh) 718,396 611,230 336,19 8 178,791 153,571 208,083

% of 2010 MWh Sales 7.5% 6.4% 3.5% 1.9% 1.6% 2.2%

MW 147.9 133.0 88.9 38.9 33.4 45.3

Penn Power Territory

Energy (MWh) 202,800 169,964 94,125 49,716 43,008 64,482

% of 2010 MWh Sales 6.9% 5.8% 3.2% 1.7% 1.5% 2.2%

Summer MW 48.2 42.7 29.0 12.5 10.8 16.2

West Penn Power Territory

Energy (MWh) 940,858 793,484 443,723 232,102 155,784 289,919

% of 2010 MWh Sales 7.2% 6.1% 3.4% 1.8% 1.2% 2.2%

Summer MW 218.1 184.5 120.5 54.0 36.2 67.4

PECO Territory

En ergy (MWh) 2,095,252 1,684,639 922,585 492,773 513,120 538,520

% of 2010 MWh Sales 8.3% 6.6% 3.6% 1.9% 2.0% 2.1%

Summer MW 301.0 249.1 145.4 72.9 75.9 79.6

PPL Territory

Energy (MWh) 1,827,059 1,525,704 839,096 446,283 320,593 447,632

% of 2010 MWh Sales 7.9% 6.6% 3.6% 1.9% 1.4% 1.9%

Summer MW 438.4 391.9 251.0 114.6 82.4 115.0

* Achievable Scenario#1: Assumes 100% Incentives

*Achievable Scenario#2: Assumes 56% incentives in the residential sector; 34 % in the non

- residential sector *Progra m Scenario#1: Based on a 2% Funding Cap of 2006 Annual Revenues
*Program Scenario#2: Based on a target of 1% of 2010 MWh sales

Table 1

- 6 : Energy Efficiency Potenti al Savings Detail (by EDC and Customer Class) for 20 18 7

Technical

Potent ial Economic

Potential Achievable

Potential

Scenario#1 Achievable

Potential

Scenario#2 Program

Potential

Scenario#1 Program

Potential

Scenario#2

ALL SECTORS COMBINED

State

- wide

Energy (MWh) 34,387,318 29,381,754 11,996,092 6,709,824 5,414,343 7,33 3,090

% of 2010 MWh Sales 23.4% 20.0% 8.2% 4.6% 3.7% 5.0%

Summer MW 6,277.6 4,698.5 1,960.6 1,110.0 885.7 1,214.5

Duquesne Territory

Energy (MWh) 3,455,263 2,931,409 1,266,180 690,309 442,451 704,275

7 The baseline kWh sales for this study are a forecast for the period June 1, 2009 to May 1, 2010.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 10 Technical

Potent ial Economic

Potential Achievable

Potential

Scenario#1 Achievable

Potential

Scenario#2 Program

Potential

Scenario#1 Program

Potential

Scenario#2

% of 2010 MWh Sales 24.5% 20.8% 9.0% 4. 9% 3.1% 5.0%

Summer MW 653.4 451.0 193.7 109.3 70.0 111.5

Met

- Ed Territory

Energy (MWh) 3,185,148 2,770,502 1,134,581 639,446 540,210 743,252

% of 2010 MWh Sales 21.4% 18.6% 7.6% 4.3% 3.6% 5.0%

Summer MW 531.1 413.1 170.8 96.4 81.5 112.1

Penelec Territory

Energy (MWh) 3,009,108 2,659,023 1,126,710 624,882 513,332 719,965

% of 2010 MWh Sales 20.9% 18.5% 7.8% 4.3% 3.6% 5.0%

Summer MW 496.4 422.6 173.3 100.3 82.4 115.6

Pen n Power Territory

Energy (MWh) 922,466 807 ,611 331,725 185,438 154,500 238,647

% of 2010 MWh Sales 19.3% 16.9% 7.0% 3.9% 3.2% 5.0%

Summer MW 156.7 123.6 50.1 28.6 23.8 36.8

West Penn Power Territory

Energy (MWh) 4,188,219 3,646,136 1,534,925 844,823 547,332 1,046,933

% of 2010 MWh Sales 20.0% 17.4% 7.3% 4.0% 2.6% 5.0%

Summer MW 796.2 689.8 291.8 163.6 106.0 202.8

PECO Territory

Energy (MWh) 10,068,327 8,126,481 3,256,453 1,818,307 1,884,517 1,969,300

% of 2010 MWh Sales 25.6% 20.6% 8.3% 4.6% 4.8% 5.0%

Summer MW 1,976.4 1,249.1 487.2 279.8 290.0 303.1

PPL Territory

Energy (MWh) 9,558,787 8,440,592 3,345,517 1,906,619 1,332,001 1,910,718

% of 2010 MWh Sales 25.0% 22.1% 8.8% 5.0% 3.5% 5.0%

Summer MW 1,667.5 1,349.3 593.7 332.0 231.9 332.7

RESIDENTIAL SECTOR ONLY

State

- wide

Energy (MWh) 22,049,980 19,215,900 5,623,449 3,736,214 3,008,673 4,074,270

% of 2010 MWh Sales 40.7% 35.5% 10.4% 6.9% 5.6% 7.5%

Summer MW 4,615.9 3,339.6 1,130.1 712.5 568.3 781.1

Duquesne Territory

Energy (MWh) 1,951,950 1 ,738,874 512,646 341,480 218,870 348,389

% of 2010 MWh Sales 46.6% 41.5% 12.2% 9.8% 5.2% 8.3%

Summer MW 438.1 281.3 91.1 59.6 38.2 60.8

Met

- Ed Territory

Energy (MWh) 2,063,489 1,829,901 548,069 364,312 307,774 423,453

% of 2010 MWh Sales 33 .3% 29.5% 8.8% 5.9% 5.0% 6.8%

Summer MW 398.7 302.9 102.9 64.2 54.2 74.6

Penelec Territory

Energy (MWh) 1,804,715 1,634,442 485,344 325,182 267,133 374,662

% of 2010 MWh Sales 37.0% 33.5% 9.9% 6.7% 5.5% 7.7%

Summer MW 354.2 302.8 99.3 65.3 53.6 75.2

Penn Power Territory

Energy (MWh) 582,936 523,129 152,960 102,224 85,169 131,556

% of 2010 MWh Sales 31.6% 28.4% 8.3% 5.5% 4.6% 7.1%

Summer MW 113.4 87.4 27.7 18.0 15.0 23.1

West Penn Power Territory

Energy (MWh) 2,602,440 2,308, 932 688,185 453,677 

### 293,922 562,212

% of 2010 MWh Sales 32.8% 29.1% 8.7% 5.7% 

### 3.7% 7.1%

Summer MW 569.5 511.8 183.1 111.6 

### 72.3 138.3P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 11 Technical

Potent ial Economic

Potential Achievable

Potential

Scenario#1 Achievable

Potential

Scenario#2 Program

Potential

Scenario#1 Program

Potential

Scenario#2

PECO Territory

Energy (MWh) 6,543,125 5,292,925 1,488,047 989,465 

### 1,025,494 1,071,631

% of 2010 MWh Sales 46 .7% 37.8% 10.6% 7.1% 

### 7.3% 7.6%

Summer MW 1,540.1 897.9 270.4 177.1 

### 183.5 191.8

PPL Territory

Energy (MWh) 6,501,325 5,887,698 1,748,198 1,159,873 

### 810,310 1,162,367

% of 2010 MWh Sales 43.0% 38.9% 11.5% 7.7% 

### 5.4% 7.7%

Summer MW 1,201.9 955.5 355.7 216.8 

### 151.4 217.2

NON

- RESIDENTIAL ONLY

State

- wide

Energy (MWh) 12,337,338 10,165,854 6,372,642 2,973,611 2,405,670 3,258,820

% of 2010 MWh Sales 13.3% 11.0% 6.9% 3.2% 2.6% 3.5%

Summer MW 1,661.8 1,358.9 830.5 397.5 317.4 433.3

Duquesne Te rritory

Energy (MWh) 1,503,313 1,192,536 753,534 348,829 223,581 355,886

% of 2010 MWh Sales 15.2% 12.0% 7.6% 3.5% 2.3% 3.6%

Summer MW 215.2 169.6 102.6 49.6 31.8 50.6

Met

- Ed Territory

Energy (MWh) 1,121,659 940,600 586,513 275 ,134 232,436 319,799

% of 2010 MWh Sales 12.9% 10.9% 6.8% 3.2% 2.7% 3.7%

Summer MW 132.4 110.3 67.9 32.3 27.2 37.5

Penelec Territory

Energy (MWh) 1,204,393 1,024,581 641,366 299,700 246,199 345,303

% of 2010 MWh Sales 12.7% 10.8% 6.7% 3.1% 2.6% 3.6%

MW 142.1 119.8 74.0 35.0 28.8 40.4

Penn Power Territory

Energy (MWh) 339,530 284,482 178,765 83,214 69,331 107,091

% of 2010 MWh Sales 11.6% 9.7% 6.1% 2.8% 2.4% 3.7%

Summer MW 43.3 36.2 22.4 10.6 8.8 13.6

Energy (MWh) 1,585,7 78 1,337,204 846,740 391,146 253,410 484,721

% of 2010 MWh Sales 12.2% 10.3% 6.5% 3.0% 1.9% 3.7%

Summer MW 226.7 178.0 108.8 52.1 33.7 64.5

PECO Territory

Energy (MWh) 3,525,202 2,833,556 1,768,406 828,842 859,022 897,669

% of 2010 MWh Sal

es 13.9% 11.2% 7.0% 3.3% 3.4% 3.5%

Summer MW 436.3 351.3 216.8 102.8 106.5 111.3

PPL Territory

Energy (MWh) 3,057,462 2,552,894 1,597,319 746,746 521,691 748,352

% of 2010 MWh Sales 13.2% 11.1% 6.9% 3.2% 2.3% 3.2%

Summer MW 465.6 393.8 238 .1 115.2 80.5 115.4

* Achievable Scenario#1: Assumes 100% Incentives

*Achievable Scenario#2: Assumes 56% incentives in the residential sector; 34 % in the non

- residential sector *Program Scenario#1: Based on a 2% Funding Cap of 2006 Annual Revenues

*Program Scenario#2: Based on a target of 1% of 2010 MWh salesP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 12 

## 2 G LOSSARY OF 

## T ERMS 8



### The following list defines many of the key energy efficiency terms used throughout this energy efficiency

potential study.

Achievable P otential: The November 2007 National Act ion Plan for Energy Efficiency “ Guide for
Conducting Energy Efficiency Potential Studies” defines achievable potential as the amount of energy

use that energy efficiency can realistically be expected to displace assuming the most aggressive program

scenari o possible ( e.g ., providing end

- users with payments for the entire incremental cost of more
efficient equipment). This is often referred to as maximum achievable potential. Achievable potential

takes into account real

- world barriers to convincing end

- users to adopt efficiency measures, the non

measure costs of delivering programs (for administration, marketing, tracking systems, monitoring and
evaluation, etc.), and the capability of programs and administrators to ramp up program activity over

time.

Achiev able Potential Scenario 1 is an achievable potential scenario, and assumes that EDC’s pay
incentives equal to 100% of measure costs and that 85% market penetration is achieved over the long

term (10 years).

Achievable Potential Scenario 2 is an achievable potential scenario, and assumes that the EDC’s pay
incentives equal to the actual incentive levels in place in Program Year 2 of phase 1 of the Act 129
programs plus a 25% safety margin (with the residential incentive level equal to 56.05% of measure cost

and non

- residential equal to 34.24% of measure cost ). Additionally, over the long term (10 years) a
lower market penetration rate of 40% is achieved across all programs due to the lower incentive levels.

Acquisition C osts are defined within this repor t as program expense dollars spent to acquire first

- year energy savings. Program expense dollars include all program costs such as rebates, incentives,
administrative costs, marketing, outreach, and evaluation expenditures. Discussion of acquisition cost i s useful because of its simplicity (costs divided by first year savings). However, this metric does have
important limitations, because it does not reflect the value of the energy savings as a resource.
Additional savings parameters would need to be incl uded, specifically measure lifetime, to determine the
value of the savings resource. (see also Resource Acquisition Costs)

Applicability F actor: T he fraction of the applicable dwelling units or businesses that is technically
feasible for conversion to the efficient technology from an engineer ing pe rspective (e.g., it may not be
possible to install CFLs in all light sockets in a home because the CFLs may not fit in every socket in a

home).

Avoided Costs: The incremental cost that a utility would have to incur if it did not acquire energy from
another source. Thus, it is the cost of producing or delivering power that the utility can avoid by
lowering capacity and energy requirements. 9



### Base Case Equipment End

- Use Intensity: T he electricity used per customer per year by each base

case technology in each market segment. This is the consumption of the electric energy using equipment
that the efficient technology replaces or affects. For example, if the efficient measure is a high efficiency
light bulb (CFL), the base end

- use intensity would be the a nnual kWh use per bulb per household
associated with an incandescent light bulb that provides equivalent lumens to the CFL.

8 Potential definitions taken from National Action Plan for Energy Efficiency (2007)

, “ Guide for Conducting Energy Efficiency

P otential Studies. ” Prepared by Philip Mosenthal and Jeffrey Loiter, Optimal Energy, Inc.

9 Green Energy Savings Solutions. https://www.palenergysmart.com/Glossary.htmlP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 13 

### Base Case Factor: T he fraction of the market that is applicable for the efficient technology in a given
market segment. For examp le, for residential lighting, this would be the fraction of all residential electric
customers that have electric lighting in their household.

Capital Recovery Rate (CRR): The return of invested capital expressed as an annual rate; often applied

in a phys ical sense to wasting assets with a finite economic life. 10



### Coincidence F actor: T he fraction of connected load expected to be “on” and using electricity
coincident with the system peak period.

Cost

- E ffectiveness: A measure of the relevant economic effect s resulting from the implementation of
an energy efficiency measure. If the benefits are greater than the cost s , the measure is said to be cost

effective.

Cumulative Program Inception to Date ( CPITD ) : T he cumulative savings achieved by a utility for a

par ticular program since the inception of that program up to the reporting date

.

Cumulative A nnual: R efers to the overall annual savings occurring in a given year from both new
participants and annual savings continuing to result from past participation wit h energy efficiency
measures that are still in place. Cumulative annual does not always equal the sum of all prior year

incremental values as some energy efficiency measures have relatively short lives and, as a result, their
savings drop off over time.

C ommercial Sector : C omprised of non

- manufacturing premises typically used to sell a product or
provide a service, where electricity is consumed primarily for lighting, space cooling and heating, office
equipment and other appliances. Business types are incl uded in section 5

– methodology.

Conservation Voltage Reduction ( CVR ) : A change in the voltage made by a p hysical adjustment in
transformer settings governing voltage at the substation. By adjusting substation voltage, the program
impacts hourly energy fl ows and capacity, including demand coincident with the system peak period(s),
included within the top 100 (peak demand) hours on the system load duration curve. 11



### Demand R esponse: R efers to demand resources involving dynamic hourly load response to market
conditions, such as curtailment or load control programs.

Direct Load Control: Activities that can interrupt load at the time of peak by interrupting power supply
on consumer premises, usually applied to residential consumers. 12



### Energy Use Intensity (EU I): A unit of measurement that describes a building’s energy use. EUI
represents the energy consumed by a building relative to its size 13



### Early R eplacement: R efers to an efficiency measure or efficiency program that seeks to encourage the
replacement of fu nctional equipment before the end of its operating life with higher

- efficiency units

.

Economic P otential: The November 2007 National Action Plan for Energy Efficiency “ Guide for
Conducting Energy Efficiency Potential Studies” refers to the subset of the t echnical potential that is

economically cost

- effective as compared to conventional supply

- side energy resources as economic

10 Accuval. http://www.accuval.net/insights/glossary/

11 PECO Quarterly Report Program Ye ar 3. June through August 2011

12 Independent Energy Producers Association http://www.iepa.com/Glossary.asp

13 EnergyStar http://www.energystar.gov/index.cfm?fuseaction=buildingcontest.euiP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 14 

### potential

. Both technical and economic potential are theoretical numbers that assume immediate
implementation of efficiency measures , with no regard for the gradual “ramping up” process of real

- life
programs. In addition, they ignore market barriers to ensuring actual implementation of efficiency.
Finally, they only consider the costs of efficiency measures themselves, ignoring any pro grammatic costs
(e.g., marketing, analysis, administration) that would be necessary to capture them

.

End

- U se: A category of equipment or service that consumes energy ( e.g ., lighting, refrigeration, heating,

process heat , cooling

).

Energy E fficiency: U s ing less energy to provide the same or an improved level of service to the energy
consumer in an economically efficient way. Sometimes “conservation” is used as a synonym, but that
term is usually taken to mean using less of a resource even if this results in a lower service level ( e.g ., setting a thermostat lower or reducing lighting levels).

F irst Year Savings : S avings accrued in the first year of the measure’s installation. Future benefits are

not considered.

Free Driver: I ndividuals or businesses that adopt an energy efficient product or service because of an
energy efficiency program, but are difficult to identify either because they do not receive an incentive or
are not aware of the program.

Free Rider: P articipants in an e nergy e fficiency program who would have adopted an energy efficiency
technology or improvement in the absence of a program or financial incentive.

Gross Savings: Gross energy (or demand) savings are the change in energy consumption or demand
that results directly from program

- pr omoted actions (e.g., installing energy

- efficient lighting) taken by
program participants regardless of the extent or nature of program influence on their actions.

Incentive Costs: A rebate or some form of payment used to encourage people to implement a given

demand

- side management (DSM) technology. The incentive is calculated as the amount of the
technology costs that must be paid by the utility for the participant test to equal one and achieve the

desired benefit/cost ratio to drive the market. 14



### Increm ental: S avings or costs in a given year associated only with new installations happening in that
specific year.

Industrial Sector: Comprised of manufacturing premises typically used for producing and processing
goods, where electricity is consumed primari ly for operating motors, process cooling and heating, and
space heating, ventilation, and air conditioning (HVAC). Business types are included in section 5

– methodology.

Measure: A ny action taken to increase energy efficiency, whether through changes in equipment,
changes to a building shell, implementation of control strategies, or changes in consumer behavior.

Examples are higher

- efficiency central air conditioners, occupancy sensor control of lighting, and retro

commissioning. In some cases, bundles of technologies or practices may be modeled as single measures.

For example, an ENERGY STAR® TM home package may be treated as a single measure.

MW: A unit of electrical output, equal to one million watts or one thousand kilowatts. It is typically

used to refer to the output of a power plant.

14 Independent Energy Producers Association http://www.iepa.com/Gloss ary.aspP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 15 

### MWh: O ne thousand kilowatt

- hours, or one million watt

- hours. One MWh is equal to the use of
1,000,000 watts of power in one hour.

Net

- to

- G ross R atio: A factor representing net program savings divided by gross progra m savings that is
applied to gross program impacts to convert them into net program load impacts

Net Savings: Net energy or demand savings refer to the portion of gross savings that is attributable to

the program. This involves separating out the impacts that are a result of other influences, such as

consumer self

- motivation. Given the range of influences on consumers ’ energy consumption, attributing
changes to one cause (i.e., a particular program) or another can be quite complex.

Non Incentive Cost : Co sts incurred by the utility that do not include incentives paid to the customer

( i.e. : administrative costs , program marketing costs, data tracking and reporting, program evaluation, etc

. )

Nonparticipant S pillover

: 

### S avings from efficiency projects impleme nted by those who did not directly
participate in a program, but which nonetheless occurred due to the influence of the program.

Participant Cost: The cost to the participant to participate in an energy efficiency program

.

Participant S pillover : A ddition al energy efficiency actions taken by program participants as a result of
program influence, but actions that go beyond those directly subsidized or required by the program

. 15



### Participant Test : The participant test a ssesses the benefits and costs from a p articipant’s perspective

such as the reduction in customers’ bills, incentives paid to the customer by the utility, and tax credits

received

, as compared to out

- of

- pocket customer expenses such as costs of equipment pu rchase, and

o peration and maintenance costs



### Portfolio: Either a collection of similar programs addressing the same market, technology, or
mechanisms; or the set of all programs conducted by one energy efficiency organization or utility

.

Program: A mechanism for encouraging energy efficiency that m ay be funded by a variety of sources
and pursued by a wide range of approaches (t ypically includes multiple energy efficiency measures )

.

Program Potential: The November 2007 National Action Plan for Energy Efficiency ‘Guide for
Conducting Energy Eff

iciency Potential Studies refers to the effi ciency potential possible given specific
program funding levels and designs. Often, program potential studies are referred to as “achievable” in
contrast to “maximum achievable.” In effect, they estimate the achi evable potential from a given set of
programs and funding. Program potential studies can consider scenarios ranging from a single program
to a full portfolio of programs. A typical potential study may report a range of results based on different
program fu nding levels.

 Program Potential Scenario 1 is based on Achievable Potential scenario 2 , and is based on the
implementation of a cap on annual utility expenditures on energy efficiency programs of 2
percent of 2006 actual Pennsylvania EDC utility electric r evenues.

 Program Potential Scenario 2 is also based on Achievable Potential scenario 2 , but adjusts annual
energy efficiency kWh savings so that they are 1% of forecast Pennsylvania EDC annual kWh

sales each year.

15 The definitions of participant and nonparticipant spillover were obtained from the National Action Plan for Energy Efficiency
Report titled “Model Energy Efficiency Program Impact Evaluation Guide”, November 2007, page ES

- 4.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 16 

### Remaining F actor: T he fraction of applica ble units that have not yet been converted to the electric
energy efficiency measure; that is, one minus the fraction of units that already have the energy efficiency

measure installed.

Replace

- on

- burnout : A DSM measure is not implemented until the exist ing technology it is replacing

fails or burns out . An example would be an energy efficient water heater being purchased after the failure
of the existing water heater at the end of its useful life.

Resource Acquisition C osts: T he cost of energy savings as sociated with energy efficiency programs, generally expressed in costs per first year saved MWh ($/MWh) or kWh ($/kWh) in this report.

Acquisition costs include all utility incentive costs and non

- incentive costs (i

. e ., marketing,
administration, etc.). Fo r this calculation, the numerator includes acquisition costs for any new
participants in a given year and the denominator includes the associated annual kWh savings for those

participants. (see also Acquisition Costs)

Retrofit: R efers to an efficiency measure or efficiency program th at seeks to encourage the replacement
of functional equipment before the end of its operating life with higher

- efficiency units (also called “early
retirement”) or the installation of additional controls, equipment, or materials in existing facilities for
purposes of reducing energy consumption (e.g., increased insulation, low flow devices, lighting

occupancy controls, economizer ventilation systems).

Savings F actor: T he percentage reduction in electricity consumption resulting from application of the

eff icient technology . The savings factor is used in the formulas to calculate energy efficiency potential

.

Technical P otential: T he theoretical maximum amount of energy use that could be displaced by energy efficiency, disregarding all non

- engineering constr aints such as cost

- effectiveness and the willingness of

end

- users to adopt the energy efficiency measures. It is often estimated as a “snapshot” in time assuming
immediate implementation of all technologically feasible energy saving measures, with addition al
efficiency opportunities assumed as they arise from activities such as new construction.

Total Resource Cost Test : The TRC measures the net benefits of the energy efficiency program for a region or service area as a whole. Costs included in the TRC ar e costs to purchase and install the energy
efficiency measure and overhead costs of running the energy efficiency program. The benefits included
are the avoided costs of energy and capacity

. For purposes of this study, non

- electric benefits were not

includ ed in the calculation of TRC benefits.

Societal Cost Test: In cludes all of the costs and benefits of the TRC test, but it also includes

environmental and other non

- energy benefits that are not currently valued by the market. The SCT may

also include non

- energy costs, such as reduced customer comfort levels.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 17 

## 3 I NTRODUCTION



### This report assesses the potential for energy efficiency programs to assist the Commonwealth of

Pennsylvania in meeting future energy service needs. This section of the report provides th e following

information:

 D efines the term “energy efficiency”,

 D escribes the general benefits of energy efficiency programs

 P rovides results of similar energy efficiency potential studies conducted in other states



### 3.1 I NTRODUCTION TO 

### E NERGY 

### E FFICIENCY



### Effic ient energy use, often referred to as energy efficiency, is using less energy to provide the same level
of energy service. An example would be insulating a home or business to use less heating and cooling

energy to achieve the same inside temperature. Anot her example would be installing fluorescent lighting
in place of less efficient halogen or incandescent lights to attain the same level of illumination. E nergy efficiency can be achieved through more efficient technologies and/or processes as well as thro ugh
changes in individual behavior.



### 3.1.1 G ENERAL 

### B ENEFITS OF 

### E NERGY 

### E FFICIENCY



### There are a number of benefits that accrue to the Commonwealth of Pennsylvania due to energy efficiency programs. These benefits include avoided energy and capacity cost savings, n on

- electric

benefits such as water and fossil fuel savings, environmental benefits, economic stimulus, job creation,
risk reduction, and energy security. 16



### Avoided electric energy and capacity costs are based upon the costs a n electric utility would incur to construct and operate new electric power plants or to purchase power from another source 17



### . These
avoided costs of electricity include both fixed and variable costs that can be directly avoided through a
reduction in electricity usage. The energy compon ent includes the costs associated with the production
of electricity, while the capacity component includes costs associated with the capability to deliver

electric energy during peak periods. Capacity costs consist primarily of the costs associated with b uilding
peaking generation facilities. The electric avoided costs used in this study were obtained directly from the
seven electric distribution companies whose service areas are the focus of this study pursuant to

definitions in the 2009 and 2011 TRC Orde rs

.

At the consumer level, energy efficient products often cost more than their standard efficiency
counterparts, but this additional cost is balanced by lower energy consumption and lower energy bills.
Over time, the money saved from energy efficient pr oducts will pay consumers back for their initial
investment as well as save them money. Although some energy efficient technologies are complex and

expensive, such as installing new high efficien cy windows or a high efficiency boiler, many are simple

and i nexpensive. Installing compact fluorescent lighting or low

- flow water devices , for example, can be
done by most individuals.

Although the reduction in energy and capacity costs is the primary benefit to be gained from investments
in energy efficiency, the utility, its consumers, and society as a whole can also benefit in other ways.
Many electric efficiency measures also deliver non

- energy benefits. For example, low

- flow water devices

16 For purposes of thi s study, non

- electric benefits were not included in the Pennsylvania TRC test because the savings targets for

Act 129 programs are for electric savings only.

17 Each EDC’s forecast of electric energy and capacity avoided costs is provided in the appendices of this report. These forecasts
were developed based on the methodology in the Commission’s 2009 and 2011 TRC Orders.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 18 

### and efficient clothes washers also reduce water consumption. 18 

### Similarly, weatherization measures that
improve the building shell not only save on air conditioning costs in the summer, but also can save the
customer money on space heating fuels, such as natural gas or propane. Reducing electricity
consumption also reduces harmf ul emissions, such as SO X 

### , NO X 

### , CO 2 

### and particulates into the

environment. 19 

### Exelon (the parent company of PECO) has made a commitment to responsive, low

carbon energy investment to enable the Company to create advantages for stakeholders while reducing

the Company’s impacts on the environment. In 2003, Exelon committed to a voluntary emissions
reduction goal under the EPA Climate Leaders program. When Exelon debuted i ts Exelon 2020 in 2008,
the Exelon family of companies charted a course to a low

- carbon future with an industry

- leading plan to

abate the Company’s carbon footprint by more than 15 million metric tons of greenhouse gas emissions
per year by 2020. Now, as Exelon has projected that it hit 75% of its goal by the end of 2011

, Exelon
states on its web site that the Company continue s to focus on being a leading provider of reliable , low

emission energy in the communities they serve and strive s to balance the environmental, social and
economic aspects of electricity generation and energy distribution.

Energy efficiency programs create both direct and indirect jobs . The manufacture and installation of
energy efficiency products involves the manufacturing sector as well as research and development,

service, and installation jobs. T hese are skilled positions that are not easily outsourced to other states and

countries. The creation of indirect jobs is more difficult to quantify, but result from households and
businesses experiencing increased discretionary income from reduced energy bills. The se savings
produce multiplier effects, such as increased investment in other goods and services driving job creation

in other market s.

Energy efficiency reduces risks associated with fuel price volatility, unanticipated capital cost increases,
environmental regulations, supply shortages, and energy security. Aggressive energy efficiency programs

c an help eliminate or postpone the risk associated with committing to large investments for generation
facilities a decade or more before they are needed. Energy efficiency is also not subject to the same
supply and transportation constraints that impact fo ssil fuels. Finally, energy efficiency reduces
competition between states and utilities for fuels, and reduces dependence on fuels imported from other
states or countries to support electricity production. Energy efficiency can help meet future demand

incr eases and reduce dependence on out

- of

- state or overseas resources.

PPL Electric also recognizes the benefits of reducing greenhouse gases. The Company’s web site
provides a carbon footprint calculator for customers to use. The introduction to this calcul ator states “If
we all take a few simple steps to create less greenhouse gases, we can reduce the effects of climate
change.” First Energy also recognizes the importance of environmental impacts. The First Energy web

site states “ At FirstEnergy, we are com mitted to protecting the environment while delivering safe,
reliable electricity to six million customers in the Midwest and Mid

- Atlantic regions. Using a balanced,
long

- term approach, we continually look for opportunities to minimize the environmental imp act of our

operations .”

18 The ENERGY STAR web site (www.energystar.gov) states that “ ENERGY STAR qualified clothes washers use about 37%

less energy and use over 50% less water than regular washers”.

19 The 2009 ENERGY STAR Annual Report states that “ 2009 was another banner year for EPA’s climate protection

partnerships. More than 19,500 organizations across the country have partnered with EPA and achieved outstandi ng results: (1)

Preventing 83 million metric tons (in MMTCE2) of GHGs

— equivalent to the emissions from 56 million vehicles (see Figure

4, p. 6)

— and net savings to consumers and businesses of about $18 billion in 2009 alone. (2) Preventing more than 1,200

M MTCE of GHGs cumulatively and providing net savings to consumers and businesses of more than $250 billion over the

lifetime of their investments.” See page 2 of this Annual Report.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 1 9 

### 3.2 T HE 

### P ENNSYLVANIA 

### C ONTEXT



### 3.2.1 C ONTINUING 

### C USTOMER 

### G ROWTH



### The annual kWh sales and electric peak loads for the areas served by the seven Pennsylvania electric
distribution companies continues to increase . From 2000 to 20 10 , the number of residential electric

utility customers for these seven electric distribution companies (EDCs) grew at a rate of approximately

0.5 % annually. 20 

### The latest available load forecast s for the seven electric distribution companies as a
group indicate that the nu mber of electric consumers in Pennsylvania will continue to increase from

201 3 through 20 23 (the timeframe for this study) creating further growth in system electricity sales and

demand. 21 

### This report assesses the potential for electric energy efficiency pr ograms to assist Pennsylvania
in meeting future electric energy service needs.



### 3.2.2 E NERGY 

### E FFICIENCY 

### A CTIVITY



### Making homes and buildings more energy efficient is seen as a key strategy for addressing energy security, reducing reliance on f ossil fuel s from ot her countries, assisting consumers to lower energy bills,
and addressing concerns about climate change . Faced with rapidly increasing energy prices, constraints in
energy supply and demand, and energy reliability concerns, states are turning to energy effi ciency as the

most reliable, cost

- effective, and quickest resource to deploy. 22 

### The enactment of Act 129 in 2008 by the
Pennsylvania legislature has provided the impetus for the seven EDCs subject to Act 129 to develop and
implement cost effective energy ef ficiency programs.



### 3.2.3 R ECENT 

### E NERGY 

### E FFICIENCY 

### P OTENTIAL 

### S TUDIES



### Table 3

- 1, below, provides the results from a SWE Team review of recent energy efficiency potential
studies conducted throughout the Northeast and US

. It is useful to examine the results of th ese studies
to understand if these studies are similar to the latest study for Pennsylvania.

Table 3

- 1 : Results of Recent Energy Efficiency Potential Studies in the Northeast and US

State Study Year Author S tudy Period # of Years Achievable

Potential



### Connecticut 2009 KEMA 2009

- 2018 10 20.3%

New Hampshire 2009 GDS 2009

- 2018 10 20.5%

Rhode Island 2008 KEMA 2009

- 2018 10 9.0%

Vermont 2011 GDS/Cadmus 2011

- 2018 10 9.0%

New York 2010 Global Energy Partners 2011

- 2018 8 9.0%

USA 2009 McKinsey & Company 2011

- 2020 10 23.0%

Pennsylvania 2012 Statewide Evaluator 2013

- 2023 10 17.3%

A 2010 report by the American Council for an Energy Efficient Economy (ACEEE) offers information
regarding the current savings and spen ding related to energy efficiency by state. 23 

### Based on self

- reported
data, the top states annually spend more than 2% of electric sales revenue on energy efficiency programs.

20 This is the compound average annual growth rate for residential electric customers for the seven EDCs included in this study.

21 The Pennsylvania Statewide Evaluation Team (SWE) obtained the latest electric load forecasts directly from the seven

Pennsylvania electric distribution companies included in this study.

22 The Decembe r 2008 National Action Plan for Energy Efficienc y (NAPEE) “Vision for 2025: A Framework for Change” states

that “the long

- term aspirational g oal for the Action Plan is to achieve all cost

- effective energy efficiency by the year 2025. Based

on studies, the efficiency resource available may be able to meet 50 % or more of the expected load growth over this time frame,

similar to meeting 20 % of electricity consumption and 10 percent of natural gas consumption. The benefits from achieving this

magnitude of energ y efficiency nationally can be estimated to be more than $100 billion in lower energy bills in 2025 than would otherwise occur, over $500 billion in net savings, and substantial reductions in greenhouse gas emissions.”

23 American Council for an Energy Effi cient Economy, “The 2010 State Energy Effici ency Scorecard”, Report #E107, October

2010.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 20 

### The SWE Team has also examined actual energy efficiency savings data for 2010 fro m the US Energy
Information Administration (EIA) on the top twenty energy efficiency electric utilities. These top twenty
utilities saved over 2% of annual kWh sales in 2010 with their energy efficiency programs.



### 3.3 P URPOSE OF THIS 

### S TUDY



### This study provide s an analysis of the technical, economic, achievable and program potential for electric
energy efficiency resources in the service areas of the seven Pennsylvania EDCs included in this study.
This study has examined a full array of energy efficiency techno logies and building practices that are
technically achievable.



### 3.4 C OST



### - E FFECTIVENESS 

### F INDINGS



### Act 129 of 2008 states the following about determining cost effectiveness for subsequent versions of Act

129 programs:

“By November 30, 2013, and every five year s thereafter, the Commission shall evaluate
the costs and benefits of the program established under subsection (A) and of approved
energy efficiency and conservation plans submitted to the program. The evaluation shall

be consistent with a Total Resource C ost test or a cost

- benefit analysis determined by
the commission. If the Commission determines that the benefits of the program exceed
the costs, the Commission shall adopt additional required incremental reductions in

consumption. ”

This study concludes that continuing electric energy efficiency programs in a Phase 2 of Act 129 will
continue to be very cost effective for Pennsylvania ratepayers. Table 3

- 2 and 3

- 3 show the Total

Resource Cost test benefit

- cost ratios for the Achievable Potential scenarios #1 and #2 for the three,

five, and ten

- year implementation period s starting on June 1, 2013. The TRC ratios statewide for

Achievable Potential scenario #1 are 1.75

, 1.83 and 1.9 5 . The TRC ratios statewide for Achievable

Potential scenario # 2 are 1.73

, 1.85 and 1.9 7

.

Table 3

- 2 : Total Resource Cost Test Benefit

- Cost Ratios for Achievable Potential Scenario #1 For 3

- Year, 5

- Year, and 10

- Year Implementation Periods

TRC Benefits TRC Costs TRC

Ratio

3

- Year Period $ 4,236,649,800.37 $ 2,415,984,248.08 1.75

5

- Year Period $ 8,349,633,190.47 $ 4,571,820,105.28 1.83

10

- Year Period $ 21,026,641,589.24 $ 10,759,165,841.58 1.95

Table 3

- 3 : Total Resource Cost Test Benefit

- Cost Ratios for Achievable Potential Scenario #2 For 3

- Year, 5

- Year, and 10

- Year Implementation Periods

TRC Benefits TRC Costs TRC Ratio

3

- Year Period $ 3,799,475,599.64 $ 2,202,502,753.00 1.73

5

- Year Period $ 4,540,392,3 69.13 $ 2,450,743,984.66 1.85

10

- Year Period $ 9,455,821,361.87 $ 4,808,941,993.06 1.97



### In addition, the Statewide Evaluation Team did calculate a TRC ratio for each energy efficiency measure

considered in th is study. Only energy efficiency measures that had a TRC ratio greater than or equal to
1.0 were retained in the economic, achievable and program potent i al savings estimates.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 21 

## 4 C HARACTERIZATION OF 

## S ERVICE 

## A REAS OF 

## P ENNSYLVANIA 

## EDC S



### With any potential study it is important to assess and understand the geographic and demogra phic

characteristics of the location being studied. As a result of the Act 129 program in Pennsylvania, a two

part study was initiated to determine : 1) how customers are currently using e lectricity in their homes and

businesses (see Baseline Studies 24 

### ) and 2) the potential for energy savings in the state. The following
section provides a brief overview of characteristics specific to Pennsylvania , along with the segmentation
findings present ed in the C&I Baseline Study

.



### 4.1 EDC A REA S



### There are currently eleven electric distribution companies (EDCs) that provide energy to Pennsylvania

customers. The focus of this study is on the seven largest EDCs including: Duquesne Light Company,

Metropolitan Edison Company, Pennsylvania Electric Company, Pennsylvania Power Company, PPL
Electric Utilities Corporation, PECO Energy Company, and West Penn Power Company . Following is a
more detailed description of characteristics specific to each EDC. 25



### Figure 4

- 1 shows the service area for each of the seven EDCs included in this study. Each EDC ’ s territory varies in the size and demographic s.

Figure 4

- 1 : Pennsylvania Utility Service Territor ies



### 4.1.1 D UQUESNE 

### L IGHT 

### C OMPANY



### Duquesne Light Company (Duquesne) provides electric service to customers in s outhwestern
Pennsylvania, primarily the city of Pittsburgh and areas of Allegheny and Beaver counties . Duquesne
currently serves more than 500,000 el ectric utility customers.

24 The SWE team conducted residential and commercial & industrial base studies in the fall of 2011. See PA Statewide

Residential End Use and Saturation Survey and the PA Statewide Commercial and Industrial End Use and Saturation Survey

published in April 2012 for more details.

25 Reported findings for EDC characteristics in section 4.1 are from the 2010 Electric Power Outlook for Pennsylvania Report

published by the Pen nsylvania Public Utility CommissionP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 22 

### 4.1.2 F IRST 

### E NERGY 

### C ORPORATION



### FirstEnergy Corporation is the nation’s largest investor

- owned electric system providing service to
customers in Ohio, Maryland, Pennsylvania, New Jersey, Virginia and West Virginia. FirstEnergy

current ly serves approximately 6 million customer s. There are four subsidiary EDCs serving
Pennsylvania customers. These EDCs include the Metropolitan Edison Company, the Pennsylvania
Electric Company, the Pennsylvania Power Company and the West Penn Power Compan y.

4.1.2.1 Metropolitan Edison Company



### Metropolitan Edison Company (Met

- Ed) provides service to customers in Eastern and South

- central

Pennsylvania. Met

- Ed currently serves 552,594 customers.

4.1.2.2 Pennsylvania Electric Company



### Pennsylvania Electric Company (Penelec) provides service to customers located in the Western and
Northern parts of Pennsylvania. Penelec currently serves 590,712 electric utility customers

.

4.1.2.3 Pennsylvania Power Company



### Pennsylvania Power Company (Penn Power) provides service to customers in Wester n Pennsylvania.

Penn Power currently serves 160,116 electric utility customers.

4.1.2.4 West Penn Power Company



### West Pe nn Power Company (West Penn) provides service to customers in Western, North and South

Central Pennsylvania. West Penn has approximately 716,115 electric utility customers.



### 4.1.3 PPL E LECTRIC 

### U TILITIES 

### C ORPORATION



### PPL Electric Utilities Corporation (PPL) is a subsidiary of PPL Corporation. PPL provides service to

electric utility customers in Eastern and C entral Pennsylvania. PPL currently serves 1,40 1,274 customers.



### 4.1.4 PECO E NERGY 

### C OMPANY



### PECO Energy Company (PECO), a subsidiary of Exelon Corporation, provides service to customers in
the city of Philadelphia as well as Southeastern Pennsylvania. PECO serves 1,566,873 electric utility
customers, making it the largest electric utility in Pennsylvania.



### 4.2 E CONOMIC 

### / D EMOGRAPHIC 

### C HARACTERISTICS



### Pennsylvania is the 33 rd 

### largest state and is located in the Northeastern and Mid

- Atlantic regions of the
United States. It is bordered by six states: New York, New J ersey, Delaware, Maryland, West Virginia,
and Ohio. The state is 283 miles in length, 170 miles wide, has 51 miles of coastline along Lake Erie and
totals 46,055 square miles . It is the 6 th 

### most populous state in the US , with a population of approximately

12,702,379

. 26



### According to the 2010 Census Bureau, the population density for Pennsylvania is 284 persons per square
mile, making it the 9 th 

### most densely populated state in the U.S. This popula tion breakdown consists of

5.9% age 5 years and younger, 16.1% age 5

- 17, and 78.0% age 18 and older. Pennsylvania’s population

has the 4 th 

### highest proportion of people 65 and older in the United States. The estimated number of
housing units is 5,518,579 (76.7 percent are single family units) and the total number of ho useholds is
4,916,869, of which 3,195,832 are family households. 27

26 US Census Bureau, 2010 population estimate for Pennsylvania

27 Pennsylvania population data obtained from Pennsylvania State Data CenterP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 23 

### Table 4

- 1 summarize s the number of customers by sector in the Pennsylvania area s served by the seven

EDCs from 2001 to 2010.

Table 4

- 1 : Nu mber of Customers by Customer Sector 28

Year Residential Non

- Residential Commercial Industrial

2001 5,021,433 644,204 615,588 28,616

2002 5,048,925 653,077 624,663 28,414

2003 5,082,234 665,610 637,255 28,355

2004 5,121,901 675,131 646,781 28,350

2005 5 ,154,728 684,043 655,717 28,326

2006 5,190,697 694,035 665,763 28,272

2007 5,207,370 695,276 667,419 27,857

2008 5,231,696 703,877 676,337 27,540

2009 5,235,331 706,627 679,215 27,412

2010 5,244,278 706,067 678,774 27,293



### 4.3 C OMMERCIAL AND 

### I NDUSTRIAL 

### S ECTOR 

### B ASELINE 

### S EGMENTATION 

### F INDINGS



### An important first step in calculating C&I energy efficiency potential estimates is to establish baseline
energy usage characteristics and disaggregate the market by sector, segment and end use. This section

summarizes the segmentation findings from the Pennsylvania C&I Baseline Study . For a full list of
baseline findings, the reader should reference the Pennsylvania Statewide Commercial and Industrial End Use

and Saturation Study, submitted by Nexant, GDS Associates and Mondre Energy in April 2012.

Because our research presents findings on building premises, findings presented below do not include
transmission, substation, irrigation or lighting rate classes. Through analysis of EDC customer billing

data, on

- site surv eys, and secondary research, Nexant was able to break out the commercial energy usage
by sector, commercial segment and end use . The SWE Team utilized the findings from its own Baseline
Studies for inputs into this market potential study, as opposed to wha t was presented in the

Commission’s Electric Power Outlook Report.



### 4.3.1 2010 E LECTRICITY 

### S ALES BY 

### S ECTOR



### , BY 

### EDC

Figure 4

- 2, Table 4

- 2 , and Table 4

- 3 show the overview of the electric sales and premises by sector for

each EDC in Pennsylvania for calendar year 2010

. 29 

### The commercial sector is the largest sector with

38 .2 % of electricity sales, followed by residential and i ndustrial. PECO is the largest EDC in terms of

sales and premises

.

28 EIA (US Energy Information Administration)

29 PECO figures are for June 2009 to M ay 2010P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 24 Figure 4

- 2 : 2010 E lectricity Sales by Sector

Source: “Commercial and Industrial End Use & Saturation Report” performed by Nexant, 2012

Table 4

- 2 : 2010 MWh Sales Breakdown by EDC, and by Sector



### EDC Industrial Commercial Residential Total

Duquesne Ligh t 2,908,498 7,314,744 4,326,339 14,549,581

MetEd 4,148,279 3,771,988 5,666,240 13,586,507

Penelec 5,011,243 4,064,187 4,655,812 13,731,243

Penn Power 1,623,329 1,068,515 1,696,442 4,388,286

PPL 9,618,254 12,041,062 14,205,788 35,865,104

PECO 4,059,704 19,271,928 12,880,403 36,212,035

West Penn Power 6,979,686 5,168,517 7,407,912 19,556,115

Statewide 34,348,993 52,700,941 50,838,937 137,888,871



### Source: “Commercial and Industrial End Use & Saturation Report” performed by Nexant, 2012

Note: PECO reside ntial customer and sales figures are June 2009 to May 2010

Table 4

- 3 : 2010 Premise 30 Counts by EDC and by Sector



### EDC Industrial Commercial Residential Total

Duquesne Light 1,224 40,348 524,406 565,978

MetEd 6,034 35,780 485,969 527,783

Penelec 7,759 47,321 505,344 560,424

Penn Power 1,964 12,527 140,101 154,592

PPL 10,905 92,112 1,224,602 1,327,619

PECO 7,688 93,873 1,400,000 1,501,561

West Penn Power 6,183 54,024 619,584 679,791

Statewide 41,756 375,986 4,900,006 5,317,748

Sourc e: “Commercial and Industrial End Use & Saturation Report” performed by Nexant, 2012
Note: PECO residential customer and sales figures are June 2009 to May 2010

30 Note: SWE utilized the definition of premise for its study which removes non

- building customer accounts such as traffic

signals, fire pumps and other miscellaneous loads from its findings. The number of premises, therefore, is less than the numbe r o f

accounts, or customers, the EDCs serve.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 25 

### 4.3.2 E LECTRICITY 

### C ONSUMPTION BY 

### S EGMENT



### Figure 4

- 3 and Table 4

- 4 show the breakdown of energy cons umption and building stock by commercial

segment. Figure 4

- 4 and Table 4

- 5 show the same breakdown by industrial segment. The institutional
segment consumes the largest share of electricity (29.3%) across the state in the commercial sector,
followed by the office segment (28.2%). Metal manufacturing facilities consume the largest share of
electricity in the industrial sector (29.2%) with a number of steel manufacturers located throughout the

state. Other manufacturi ng (composed of varying manufacturing types such as appare l, furniture, leather,

lumber, textile, tobacco, and misc .) comprise 23.9% of the load in the industrial sector

.

Figure 4

- 3 : Commercial Energy Consum ption by Segment

Table 4

- 4 : Commercial Energy Consumption by Segment



### Segment Consumption (MWh) Electricity Share

Institutional 15,460,540 29%

Education 6,858,876 13%

Health 6,166,279 12%

Other 2,435,385 5%

Office 14, 859,623 28%

Restaurant 2,284,546 4%

Retail 7,050,787 13%

Grocery 2,577,430 5%

Retail 4,473,357 9%

Warehouse 2,390,718 5%

Misc. 10,654,727 20%

Lodging 1,418,697 3%

Other 9,236,030 18%

Total Commercial 52,700,941 100%

Source: “ Commercial and Industrial End Use & Saturation Report” performed by Nexant, 2012P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 26 Figure 4

- 4 : Industrial Energy Consumption by Segment

Table 4

- 5 : Industrial Energy Consumption by Segmen t



### Segment Consumption (MWh) Electricity Share

Mfg: Chemicals 2,814,937 8.2%

Mfg: Computers 2,094,323 6.1%

Mfg: Food 3,185,786 9.3%

Mfg: Metals 10,030,211 29.2%

Mfg: Other 8,209,110 23.9%

Mfg: Paper 2,008,114 5.8%

Mfg: Plastics 2,242,259 6.5%

Mining 2,135,127 6.2%

Other Non

- Mfg. 1,629,127 4.7%

Total Industrial 34,348,993 100.0%

Source: “Commercial and Industrial End Use & Saturation Report” performed by Nexant, 2012



### 4.3.3 E LECTRICITY 

### C ONSUMPTION BY 

### E ND



### - U SE



### Figure 4

- 5 and Figure 4

- 6 show how electricity is consumed by end use in the commercial and industrial

sector s

. HVAC uses the largest share of electricity at 33.4% in commercial buildings, followed by interior
lighting ( 31 .3 % ) and refrigeration ( 15.1% ) . The “Other” end use represents primarily pumps and other
miscellaneous loads in buildings. In the industrial sector, motors consume almost half (43.6%) of all the
electricity across the state. Process loads (heating, cooling and electro

- chemical) m ake up another 30% of

the electricity consumption.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 27 Figure 4

- 5 : Commercial Energy Consumption by End Use

Figure 4

- 6 : Industrial Energy Consumption by End UseP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 28 

### 4.3.4 E NERGY 

### U SE 

### I NTENSITY BY 

### E ND 

### U SE


### , BY 

### C OMMERCIAL 

### S EGMENT



### Energy use intensity (EUI) is a useful metric to measure how much electricity is consumed per square
foot of building space and provides insight into how different building types and end use s consume electricity. The SWE calculated the EUI for each end use at the statewide level. Adjusted EUIs were
calculated for each EDC based on differences in space cooling. To come up with EUIs by segment and
end use, a variety of data points were utilized . Customer sales data for 2010 (kWh) was paired with the
square footages of th e buildings surveyed by SWE engineers to come up with average EUIs by segment.
End use EUIs were calibrated using a combination of national data, on

- site data and with the model ing

program eQuest. Figure 4

- 7 and Table 4

- 6 below summarize the findings for EUIs for each commercial
segment and relevant end use. The grocery segment is the most energy

- intensive at 50.1 kWh/ft 2



### , due to
the large amounts of electricity used to refrigera te foods. W arehouse is the least energy

- intensive segment using only 7.1 kWh/ft2. HVAC is the most energy

- intensive end use consuming an average of

5.7 kWh/ft2 across all the segments , followed by lighting which has the highest EUIs in the grocery,

retail and restaurant segments.

Figure 4

- 7 : Commercial Energy Use Intensities by Segment

Table 4

- 6 : Commercial Energy Use Intensities by Segment

Source: “Commercial and Industrial End Use & Saturation Report” performed by Nexant, 2012P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 29 

### 4.4 EDC L OAD 

### F ORECASTS



### Forecasts for total M Wh sales in Pennsylvania show a slow growth over the next ten years across all

seven EDCs. Table 4

- 7 , below, provides the total projected sales for the seve n EDCs incl uded in the
study. Sales for the residential sector are forecast to increase at the fastest rate of growth.

Table 4

- 7 : Statewide Sales Forecasts by Sector 31



### Year Residential

(MWh) Non

- Residential

(MWh) Commercial

(MWh) Industrial

(MWh )

2012 50,460,301 91,050,329 54,522,737 36,527,592

2013 50,775,309 91,736,200 54,821,297 36,914,902

2014 51,486,411 92,303,164 55,115,274 37,187,890

2015 52,153,427 93,385,380 55,801,767 37,583,613

2016 52,888,710 94,369,561 56,418,135 37,951,426

201 7 53,222,501 94,768,150 56,562,383 38,205,767

2018 53,753,081 95,275,882 56,786,296 38,489,586

2019 54,279,753 95,783,209 57,011,327 38,771,882

2020 54,825,855 96,384,486 57,308,148 39,076,338

2021 55,209,850 96,788,849 57,457,577 39,331,272

2022 55,9 46,661 97,304,613 57,688,542 39,616,071

Avg.

Annual
Compound

Growth

Rate (2012

to 2022) 1.0% 0.7% 0.6% 0.8%



### 4.5 C URRENT 

### P ENNSYLVANIA 

### EDC E NERGY 

### E FFICIENCY 

### P ROGRAMS



### The current iteration of Pennsylvania Act 129 promotes a variety of energy efficiency program s within

each EDC . The exact programs vary between the specific EDCs, but cover a general range of program
types. The existing programs promote energy efficiency education, energy efficiency audits and the
installation of energy efficient equipment across all of the EDCs. This next section summarizes the costs
and savings of the programs implemented by the EDCs in Phase 1 of Act 129.



### 4.5.1 C URRENT 

### E NERGY 

### E FFICIENCY 

### P ROGRAM 

### C OST AND 

### S AVINGS 

### D ATA



### In order to properly assess the potential of energy efficiency progr ams moving forward, an analysis was
done of current program energy savings and costs. These cost number s were used as inputs to the
potential model s to properly assess the cost of implementing energy efficiency programs 32 

### . Cost and
savings data was taken fr om the program year two reports that each participating EDC was required to

submit to the Pennsylvania Public Utility Commission (PUC) . These reports detail program performance

through year two (

June 2010

- May 2011). All data used represents current progr am inception to date
(CPITD) data, the total expenditure by each EDC

, and the verified energy s avings through program year

two for energy efficiency programs only.

Because the focus of this study was on energy efficiency potential only, demand managemen t programs and other programs not involving energy efficiency were excluded from this analysis of portfolio costs.
Only the costs for the applicable energy efficiency programs were captured when rolling up incentive

31 This data is a roll up of individual EDC forecasts for calendar year energy sales through 2022 provided by the EDCs.

32 Adjustment factors of 25% were made to the CPITD cost data presented below for the final i ncentive and administrative cost

inputs into the potential models to account for uncertainty about future costs.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 30 

### and non

- incentive costs. Table 4

- 8 show s the programs for each EDC that were not included in the cost

analysis.

Table 4

- 8 : Demand Management or Other Programs Not Included in Cost Analysis



### EDC Program Name(s)

PPL Renewable Energy Program

Duquesne None

West Penn Customer Re sources DR Program Time of Use with Critical Peak Pricing

Rate

Hourly Pricing Option Rate Distributed Generation Program

Residential Efficiency Rewards Rate Pay Ahead Service Rate

Customer Load Response Program

Met

- Ed, Penelec, Penn

Power Demand R eduction PJM Demand Response

PECO CVR Program Residential DLC Program



### Commercial DLC Program

Table 4

- 9 shows the incentive costs paid to customers, the non

- incentive costs

, and the costs paid by
program participants for the Act 129 programs through year two. The total incentive costs for the
programs were $129,681,162 through year two. Non

- incentive costs totaled $113,383,586 while
participant costs totaled $386,941,909.

Table 4

- 9 : CPITD Cost Data for Energy Efficiency Portfolios 33



### Incentive Costs ($) Non

- Incentive Costs ($) Participant Costs ($)



### Statewide Residential $ 60,876,900 $78,063,381 $135,754,844

Statewide Non

Residential $ 68,804,262 $35,320,205 $251,187,065

Statewide Total $129,681,162 $113,383,586 $386,941,909



### Table 4

- 10 shows the verified energy savings for each EDC and the percentage of annual sales that those

savings represent th r ough the end of program year two. The total verified savings across all sectors

totaled 1 .7 million MWh or 1. 2 % of the 2009/ 2010 sales f orecast of 146,661,800 MWh

.

Table 4

- 10 : PY2 CPITD Verified Savings for Energy Efficiency Programs by EDC 34



### EDC Verified Energy Savings (MWh) % of 2009/2010 Forecast

Residential Non

Residential Total Residential Non

Residential Total



### Du quesne 65,686 101,711 167,397 1.57% 1.03% 1.19%

Met

- Ed 97,299 86,713 184,012 1.57% 1.00% 1.24%

PECO 424,483 128,337 552,820 3.03% 0.51% 1.40%

Penelec 93,325 91,534 184,859 1.91% 0.96% 1.28%

Penn Power 34,902 32,263 67,165 1.89% 1.10% 1.41%

PPL 272,631 222,153 494,784 1.80% 0.96% 1.29%

West Penn 63,481 29,364 92,845 0.80% 0.23% 0.44%

33 All data comes from the program year 2 reports provided by the individual EDCs. Data represents the current program

inception to date costs f

or the applicable programs through May 2011.

34 Sales data is the 2009/2010 forecast that was used to set EDC savings targets. Forecasted 2009/2010 kWh sales were used to

allow the same baseline to establish compliance targets on a cumulative basis from Pha se 1 to Phase 2, which also allows adding

kWh savings from Phase 1 to Phase 2. Energy savings data is taken from the PY2 final reports submitted by each EDC.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 31 

### EDC Verified Energy Savings (MWh) % of 2009/2010 Forecast

Residential Non

Residential Total Residential Non

Residential Total



### Statewide 1,051,808 692,075 1,743,883 1.95% 0.75% 1.19%

Table 4

- 1 1 shows the incremental costs of energy efficiency measures per first

- year saved MWh across

the state t hrough the end of program year two. The measure incremental c osts were used to screen cost
effective measures as inputs into the potential model. The residential sector generally has higher non

incentive costs than the non

- residential sector, but lower inc entive costs. In order to generate a

statewide, non

- incentive, incremental cost, the verified savings and costs were averaged over the
portfolio. The weighted average portfolio non

- incentive utility cost for all seven EDCs was calculated to
be $65.02 per M

Wh 35



### .

Table 4

- 11 : Statewide Acquisition Costs 36



### Another critical input into the potential model was the relationship between the incentive costs paid by
the EDCs and the participant costs paid by customer s 37 

### . This value determines the tot al incentive costs
for the EDCs which affects the total potential savings. Table 4

- 12 shows the incentive costs as a
percentage of partici pant costs statewide. For the non

- residential sector, EDCs incentivized 27.9% of

participant costs across the state. F or the residential sector, the EDCs incentivized 44.8% of participant

costs statewide.

Table 4

- 12 : Incentive Costs as a Percentage of Participant Costs 38



### Statewide Incentive Level (%)

Residential Non

- Residential

44.8% 27.9%



### 4.5.2 C URRENT 

### D U QUESNE 

### L IGHTING 

### C OMPANY 

### E FFICIENCY 

### P ROGRAMS



### Duquesne Lighting Company ( Duquesne ) offers several energy efficiency programs for both the

residential and non

- residential markets.

4.5.2.1 Residential Programs



### Residential Energy Efficiency Rebate Program (REEP)

35 This value was calculated by dividing the non

- incentive cost (Costs incurred by the utility that do not include incentives paid to

the customer) by the MWh savings for years one and two.

36 All data comes from the program year 2 reports provided by the individual EDCs. Data represents the current program

inception to date costs for the applicable pro grams through May 2011.

37 This study assumes that the main programmatic strategy is replace on burnout. Therefore the majority of measure costs refer to incremental costs for the higher efficiency equipment.

38 All data comes from the program year 2 report s provided by the individual EDCs. Data represents the current program

inception to date costs for the applicable programs through May 2011.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 32 

### Duque sne offers customers an energy efficiency rebate program that aims to encourage them to choose
energy efficient options when purchasing household appliances or other equipment. This goal is
accomplished through a combination of educational materials and re bates that are provided to customers
in conjunction with an online survey. This program also contains an upstream lighting component
focused on promoting compact fluorescent lamps at the retail level. This is accomplished through point
of purchase discount s for customers and incentives for the participating retail stores. The direct
approach is designed to increase participation versus a traditional rebate form.



### School Energy Pledge

The School Energy Pledge (SEP) program focuses on teaching students about energy efficiency with the
aim of transferring that knowledge to the home. Students receive pledge forms for their families to
implement the energy efficient measures that they have learned about through the program. In return for
a family’s commitment to install energy efficiency measures, the school receives a $25 incentive through
the SEP program.



### Residential Appliance Recycling Program

The Residential Appliance Recycling Program (RARP) aims to remove working, inefficient refrigerators

and freezers fro m use in an environmentally safe manner. RARP offers $35 incentives to customers to
recycle their old appliances through the program instead of simply throwing them away.

4.5.2.2 Low Income Residential Programs



### Low Income Energy Efficiency Program

The Low

- Income Energy Efficiency Program (LIEEP) assists low

- income households to conserve energy and reduce energy costs to the household. The program works in conjunction with REEP and
RARP to deliver savings to low

- income households. In Q4 of 2010, a portion of the RE EP upstream
lighting program will be allocated to the low

- income sector.

4.5.2.3 Commercial Programs



### Duquesne ’s commercial programs include one commercial umbrella program and five market segment
programs. The five market segment programs are designed to fit the s pecific needs of the markets that
they are serving. The five market segments being served are: Small Office, Large Office, Public Agency,
Retail, and Healthcare. The umbrella program is designed to fit the needs of customers not directly
served by one of t he specific market programs.

Each program aims to help commercial customers identify energy efficiency savings potential, and, in
some cases implement energy efficiency measures. Approved organizations work with Duquesne’s

commercial customers to assess e nergy savings potential, project cost and energy savings, and when
appropriate install the chosen measures.

4.5.2.4 Industrial Programs



### Duquesne ’s industrial programs include one industrial umbrella program and three market segment

programs. The three market s egments that are addressed by Duquesne are Primary Metals, Chemical
Products and Mixed Industrials. The industrial umbrella program offers specialized programs focused on
technologies or other market segments that are not included in the existing market se gment programs.

All of the existing industrial programs are designed to offer customers a comprehensive approach to
energy savings and demand reduction. Each of the individual programs provides customers with services
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### 4.5.3 C URRENT 

### F IRST 

### E NERGY 

### E FFICIENCY 

### P ROGRAMS



### – E XCLUDING 

### W EST 

### P ENN



### P OWER



### Through project year 2 of the Act 129 energy efficiency projects, FirstEnergy offered the same programs
through three of their four EDCs (Met

- Ed, Penel ec, Penn Power). These programs will be referred to as

FirstEnergy Programs. West Penn, though a FirstEnergy EDC, offered unique programs through
program year two of the Act 129 period and will be discussed separately.

4.5.3.1 Residential Programs



### Residential Home Energy Audit Program

FirstEnergy EDCs offer their customers a two stage home audit program designed to help them save
energy. The first part of the program involves a self

- administered on

- line audit looking at a customer’s
historical energy use. Depending on how the customer responds to certain questions, the survey will
provide them with a basic calculation of potential energy savings. The second part of the program is an

actual on

- site audit by a professional auditor. Auditors will assess energy savings potential, and install

low

- cost energy savings measures when appropriate. The aim of this program is to identify and install
basic energy efficiency measures, and educate customers about other programs being offered.



### Residential Appliance Turn

-

In Program
With this program, customers have the opportunity to turn in old, inefficient, large appliances and
receive a cash incentive from the EDC. The program covers the disposal of up to two refrigerators or
freezers in a calendar year. The appliances must be in working condition to help meet the programs goals
of removing outdated, inefficient appliances from service.



### Residential Energy Efficiency HVAC Program

The Residential Energy Efficiency HVAC Program is designed to encourage the installation of

ENERGYSTAR ® compliant equipment into both existing residential buildings and new construction.
Incentives are provided both directly to customers who replace existing HVAC equipment with

ENERGYSTAR ® systems, and to contractors who promote ENERGYSTAR ® compliant syste ms to their customers at the time of replacement. Through this program, incentives are also available to
customers for maintenance on existing equipment, including additional incentives to replace existing

HVAC fans with ENERGYSTAR ® compliant replacements.



### Residential Energy Efficient Products Program

The Residential Energy Efficient Products Program aims to support the adoption of ENERGYSTAR ®

compliant equipment through customer incentives, and support to retailers selling the equipment.

Retailers are in volved through promotional support, point

- of

- sale materials, training materials and

assistance with distribution channels for ENERGYSTAR ® products. The FirstEnergy EDCs in some
cases also provide incentives to retailers, distributors and manufacturers to h elp drive down the cost of

ENERGYSTAR ® products at the retail level.



### Residential New Construction Program

The Residential New Construction Program provides incentives to builders to build new homes that

comply with either ENERGYSTAR ® Homes status or the H ome Energy Rating System Program.
The program incentivizes participants based on the homes construction cost with the ENERGYSTAR ®

compliant equipment, relative to the cost of building using standard construction practices. The goal is

to incentivize the implementation of ENERGYSTAR ® or other high efficiency equipment in the areas

of building shell, appliances and other energy consuming features of buildings.



### Residential Whole Building Comprehensive

The Residential Whole Building Comprehensive program p rovides customers with direct incentives for
participating in diagnostic assessments of their households followed by the installation of selected low

-P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 34 

### cost energy efficiency measures. Customers are incentivized up to $300 for participating in the two part

a udit process, and up to $900 in performance based incentives for installing energy saving equipment as

a result of the audits.



### Residential Multi

- Family Program

The Residential Multi

- Family Program targets larger, multi

- family buildings and attempts to cap ture energy savings in common lighting areas such as hallways, laundry facilities, exterior lighting and exit
signs. The program leverages audits being performed by the Pennsylvania Housing Finance Agency
(PHFA) and markets the benefits of the program to p articipants in the PHFA audits. The program
provides energy saving measures for these common areas to owners or property managers based on the
findings of the PHFA audits. Tenants of these buildings are also targeted through the distribution of

energy cons ervation kits at no cost to the tenant.

4.5.3.2 Low

- Income Residential Programs



### Residential Low

-

Income Program (WARM Programs)

The WARM programs are designed to provide low

- income customers with energy savings measures and
services. As part of the Act 129 progr ams the EDCs are offering additional programs that expand upon

the existing Low

- Income Usage Reduction Program. The WARM Extra Measures Program provides
customers with an average of 4 CFL’s, LED night lights and smart power strips. The WARM Plus

Program act s to expand the reach of the existing WARM program, supporting a 25% increase in the
number of eligible homes for WARM treatments. The Low

- Income, Low

- Use program is for customers
who qualify for the income requirements of WARM, but fall below the minimum annual usage level of

600 kWh/month. Through this program these customers are given CFLs, faucet aerators, LED

nightlights, a furnace whistle and materials discussing energy efficiency.

4.5.3.3 Small Commercial and Industrial Programs



### Energy Audit, Assessment and Equipment Rebate

Through this program, EDCs provide information to customers about energy efficiency measures, as
well as with a list of auditors who can provide detailed audits of energy savings potential. Also through
this program, EDCs fund all CFL ins tallations for customers that fall into the Small Commercial and
Industrial class. There are also opportunities for customers to receive rebates on other energy efficiency
equipment through existing equipment programs covering lighting, HVAC, motors and dr ives and other

specialty equipment.

4.5.3.4 Large Commercial and Industrial Programs



### Commercial/Industrial Performance Contracting/Equipment Program

Through this program, customers have the opportunity to hire an Energy Services Company (ESCO) to
help them identif

y opportunities for energy efficiency savings and then install the energy saving
equipment. The EDCs provide customers with a qualified list of ESCOs that participate in the program.
The savings generated through this program are put back into the program as payment for the ESCO.



### Commercial and Industrial Motors and Variable Speed Drives Program

The aim of this program is to incentivize customers to replace existing motors with more efficient

NEMA Premium ® motors and variable speed drive (VSD) systems. The program is targeted towards
customers with a large amount of operating hours and high variability in motor loads. The program sets
a minimum operating hour requirement of 3,000 hours per year and offers cash rebates to customers

who meet this requireme nt and upgrade their equipment. The amount of the incentive is based on the
size of motor being replaced and starts at $20 for a 1 HP motor. The incentive for the VSD systems is
$30 per motor horsepower controlled. All rebates are available on a first come first served basis and are
limited to the program budget.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 35 

### 4.5.3.5 Government and Non

- Profit Programs



### Governmental/Non

- Profit Street Lighting Program

The Governmental/Non

- Profit Street Lighting Program helps to offset the upfront costs of converting

existing stree t lighting equipment to high pressure sodium units. Incentives are offered to municipalities
for these conversions regardless of ownership of the lights. The program also offers the option to upgrade other outdoor lighting and convert other traffic/pedestr ian signals to LED units.



### Governmental/Non

- Profit Program

The Governmental/Non

- Profit program is designed to target the small number of customers who fall

under non

- profit rates. Through this program these customers are eligible for all of the incentive

p rograms that exist for the small or large commercial and industrial classes. There is also an additional

opt

- in CFL kit offering, providing CFL kits to customers at no cost.



### Governmental/Remaining Non

- Profit Programs
This program is designed to increase t he speed in which governmental buildings and schools adopt
energy efficiency measures. Customers are provided with energy audits worth up to $2,000 to help them
identify areas of energy efficiency savings potential. There is also a CFL opt

- in option with t his program
which provides CFL kits to these customers free of charge.



### 4.5.4 C URRENT 

### W EST 

### P ENN 

### P OWER 

### E NERGY 

### E FFICIENCY 

### P ROGRAMS



### 4.5.4.1 Residential Programs



### Compact Fluorescent Lighting Rewards Program

The Compact Fluorescent Lighting Rewards Program is designed to enc ourage customers to purchase
CFL bulbs instead of incandescent bulbs. This is accomplished through both mail

- in and retailer point

of

- sale rebates for customers to help offset the cost of CFLs. West Penn has also partnered with CFL
manufacturers and negoti ated buy downs to reduce the cost to customers in the retail stores.



### Residential ENERGYSTAR ® and High Efficiency Appliance Program

This program is designed to help customers overcome the initial cost barrier of installing

ENERGYSTAR ® qualifying appliances . The program offers customer rebates that are in most cases
equal to approximately 50% of the incremental cost of the appliance for the purchase of new equipment.
Rebates are distributed by mail for laundry equipment, dishwashers, refrigerators, freezers

, programmable thermostats, and room air conditioners. There are also appliance turn

- in rebates available
through this program for qualifying refrigerators, freezers and air conditioners.



### Residential Home Performance Program

The Residential Home Performan ce Program is designed to educate customers about opportunities for
energy efficiency in their homes. Through this program, customers have the choice of two audit types,

one in home and one on

- line, to help them identify energy efficiency opportunities. Cu stomers will
receive additional incentives to install the measures identified in the audits. Through various parts of the
program, customers will also receive information regarding energy efficiency and conservation and are
eligible to receive eight CFLs a s part of the program.



### Residential Whole Home Appliance Efficiency Program

The Residential Whole Home Appliance Efficiency Program encourages the purchase of high efficiency
central air conditioners or heat pumps. Incentives are offered to customers to he lp offset the upfront
costs of installation based on the efficiency of the system purchased. To qualify for the program, the
system being purchased must exceed the federal energy efficiency standard SEER of 13, be controlled by
a programmable thermostat an d be installed by a certified contractor.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 36 

### 4.5.4.2 Low

- Income Residential Programs



### Residential Low Income Home Performance Check

- Up Audit & Appliance Replacement Program

This program is designed to ease the entry of energy efficient measures into low

- income homes. The
program consists of an in

- home energy audit and installation of standard low cost measures. All
participants in the program receive 6 CFLs free of charge as well as information on energy efficiency.
For appropriate customers, installed measures also i nclude faucet aerators and low flow shower heads.
Depending on the age and operational effectiveness, a customer’s refrigerator or room air conditioning
unit may be eligible for replacement with an ENERGYSTAR ® qualifying unit.



### Residential Low Income Join t Utility Usage Management Program

This program is similar in design to the Residential Low Income Home Performance Check

- Up Audit &
Appliance Replacement Program. The process and incentives are very similar but for this program, West

Penn partners with cu stomers gas utilities to offer the most efficient solutions using both fuel types.

4.5.4.3 Small Commercial and Industrial Programs



### Commercial HVAC Efficiency Program

The commercial HVAC Efficiency Program offers customers a $25 rebate per unit incentive towards

a nnual maintenance on existing HVAC equipment.



### Commercial Products Efficiency Program

The Commercial Products Efficiency Program offers rebates to customers to upgrade to state

- of

- the

- art energy efficiency lighting technologies. The program covers a wide range of lighting technologies
including CFLs, power strips, exit signs and occupancy sensors.



### Custom Technology Applications Program

The Custom Technology Applications program is focused on incentivizing customers with specific
system needs to update their equipment with more energy efficient options. The program focuses on a
wide variety of technology areas including lighting, compressed air, chillers, motors and VSDs, energy
management systems, fan and pump systems, renewable energy and combined heat systems that are not
previously covered by existing programs. Incentives are available up to 25% of capital costs, and up to
$100,000 of project costs to realize the savings.

4.5.4.4 Large Commercial and Industrial Programs



### Custom Applications Program

The Custom Applications Program focuses on providing incentives for customers with very specialized
processes or applications. Similar to the Custom Technology Applications program, the focus is on
lighting, compressed air, chillers, motors and VSDs, energy managemen t systems, fan and pump systems,
renewable energy and combined heat systems that are not previously covered by existing programs.
Incentives are available up to 50% of capital costs, and up to $500,000 of project costs to realize the
savings, awarded on a review of the kWh saved per projects cost.

4.5.4.5 Government and Non

- Profit Programs



### Both the Custom Technology Applications Program and the Custom Applications Program are available
to government and non

- profit customers for this EDC.



### 4.5.5 C URRENT 

### PPL E NERGY 

### E FFICI ENCY 

### P ROGRAMS



### 4.5.5.1 Residential Programs



### Appliance Recycling Program

This program is designed to prevent the continued operation of older, inefficient appliances. PPL offers
incentives and complimentary pick up to customers looking to replace older, operable ap pliances. ByP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 37 

### offering recycling services to their customers, PPL can increase the number of energy efficient appliances
in the marketplace, and reduce the resale of older, inefficient units back into the market.



### Compact Fluorescent Lighting Campaign

PPL’s Compact Fluorescent Lighting Campaign consists of both an upstream retail lighting component
and a give

- away component for customers. The upstream retail component provides CFL manufacturers
with upstream incentives which decrease the cost of CFLs at the retail level. These discounted CFLs are
available through both retail stores as well as a PPL online marketplace. The give

- away component of the
program provides CFLs to customer ’ s free

- of

- charge at PPL sponsored events. The overall goal of the

program is to speed up the adoption of CFLs by PPL’s customers by making them easier to obtain.



### Custom Incentives Program

The Custom Incentives Program is designed to incentivize customers to install energy efficient
equipment not covered by any of the other PPL ene rgy efficiency programs. PPL will reimburse
customers up to 50% to cover the costs of studying the potential for energy efficiency measures. They
may provide additional reimbursement if measures are successfully implemented. Additional incentives

are based on avoided or reduced kWh consumption for successfully implemented measures. The aim of
the program is to provide customers with assistance in implementing larger, more unique energy
efficiency measures. It also helps to identify technologies that should be included in other EE programs.



### Efficient Equipment Incentive Program

The Efficient Equipment Incentive Program provides financial incentives to customers for installing
energy efficient equipment. The primary areas of focus for this program are electri c heating, cooling,
lighting, water heating and appliances. Customers are provided with information on the features and
benefits of equipment, as well as financial incentives to help offset the upfront costs of installation. The
goal of the program is to i ncrease the saturation of energy efficient equipment in the market by

increasing customer access to this equipment.



### Home Assessment & Weatherization Program

The Home Assessment and Weatherization Program is designed to provide customers with information

a bout their current energy usage and the energy efficiency measures that would be the most effective for
them. This program has two tracks to provide customers with information about energy efficiency
potential. The first is a customer

- paid walk

- through ene rgy audit of their homes. The second is a
comprehensive energy audit, including diagnostic testing, that is supported by different rebates
depending on the type of equipment that is in the home. The goal of this program is to provide

customers with the inf

ormation that they need to save energy in their homes and reduce household

energy costs.



### Energy Efficiency Behavior & Education Program

The Energy Efficiency Behavior and Education Program focuses on saving energy by encouraging
customers to implement fre e or low

- cost measures and adjusting their behavior. PPL partners with
OPOWER to provide customers with Home Energy Reports, comparing their energy usage with
previous years as well as comparing their energy usage with other households in their area. The r eport also provides suggestions for low

- cost efficiency improvements and tips for reducing peak and overall
energy usage. This program is focused on behavior only and does not provide any financial incentives to

customers.

4.5.5.2 Low

- Income Residential Programs



### E

- Power Wise Program

The E

- Power Wise program works with community based organizations (CBO) to provide training on
energy efficiency targeted to low income customers. The idea behind the program is that by trainingP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 38 

### members of the CBOs, they can pass alon g the education and information through convenient
workshops for low

- income customers.



### Low

- Income WRAP Program

The Low

- Income WRAP Program provides customers with a free energy audit designed to identify
opportunities for energy saving measures. As a resu lt of the audits, outdated or inefficient equipment is
replaced with more efficient equipment. The program uses a pre

- approved list of cost effective measures
to determine what type of equipment is replaced. The program also provides customers with educati onal
materials on ways they can conserve energy.

4.5.5.3 Small Commercial and Industrial Programs



### Efficient Equipment Incentive Program

This program is similar to the program described under the residential programs. The focus for this
program is commercial and in dustrial lighting measures.



### HVAC Tune

- Up Program

The HVAC Tune

- Up Program is designed to help customers with existing split system or packaged
HVAC rooftop units optimize the performance of their systems to save energy. Through the program,

incentives are provided to contractors who diagnose and install energy saving measures. This helps
customers save energy on the operating costs of their HVAC units while offsetting the upfront costs of
the diagnostic work and equipment.

4.5.5.4 Large Commercial and Industrial Programs



### Appliance Recycling Program

This is the same program as described in the Residential section.



### Custom Incentives Program

This is the same program as described in the Residential section.



### Efficient Equipment Incentive Program

This is the same pro gram as described in the Residential section.



### HVAC Tune

- Up Program

This is the same program as described in the Small Commercial and Industrial section.

4.5.5.5 Government and Non

- Profit Programs



### Appliance Recycling Program

This is the same program as described i n the Residential section.



### Custom Incentives Program
This is the same program as described in the Residential section.



### Efficient Equipment Incentive Program

This is the same program as described in the Residential section.



### 4.5.6 C URRENT 

### PECO E NERGY 

### E FFICIENCY 

### P ROGRAMS



### 4.5.6.1 Residential Programs



### Smart Lighting Discounts ProgramP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 39 

### The Smart Lighting Discounts program is designed to increase the number of CFLs in the market place
through education and financial incentives. PECO works with manufacturers and retailers to r educe the
cost of CFLs to customers and to educate them about the technology and the discounts that they are
receiving. Education is provided through point

- of

- purchase information, in

- store events, and through

retailers, all encouraging customers to choose CFLs at the time of purchase.



### Smart Appliance Recycling Program

The Smart Appliance Recycling Program focuses on removing older, inefficient appliances from the
market. Through the program customers can have these older appliances picked up from the cu rb and
taken to be recycled. PECO is also currently partnering with Sears to inform customers of the program
at the time that they are purchasing new appliances. As part of the purchase of a new appliance, the old
appliance will be removed and taken away w hen the new appliance is installed. A portion of the program
costs also go to promotional material creation, helping increase customer awareness of the program.



### Smart Home Rebates Program

The Smart Home Rebates Program is designed to help customers with t he up

- front costs of installing
energy efficient equipment in their homes. This is accomplished through cash rebates for customers who
purchase energy efficient equipment. The program also partners with suppliers and contractors to

encourage customers to c hoose energy efficient options when purchasing or installing new equipment.

4.5.6.2 Low

- Income Residential Programs



### The Low

- Income Energy Efficiency Program (LEEP) is designed to provide low

- income customers with

educational materials and assistance on how to make their homes more energy efficient. The program is
based off of the existing Low

- Income Usage Reduction Program (LIURP) with the aim of doubling the
number of participants. Through this program, qualifying customers gain access to in

- home energy

audits and direct installation of energy efficient equipment such as CFLs and in some cases, refrigeration

equipment.

4.5.6.3 Commercial and Industrial Programs



### Smart Equipment Incentives Program

The Smart Equipment Incentives Program is designed to educate customers about energy saving
technologies and to assist them in their ability to install these measures. PECO offers incentives directly
to customers for installing energy efficient equipment and also partners with contractors and suppliers to
encourage the purchase of e nergy efficient equipment. The program also has carryover into the
government and non

- profit sector.



### Smart Construction Incentives Program

The Smart Construction Incentives Program focuses on implementing energy efficiency measures into
buildings that are being constructed or being completely re

- constructed. Through the program, PECO
offers training, design assistance and incentives based on kWh savings to facility designers and builders.
The information provided is meant to educate designers and builders on how to design energy efficient
features into their buildings. Financial incentives are then provided based on how many of the measures
are implemented into the buildings and the amount of energy being saved. The program also has

carryover into the gove rnment and non

- profit sector.

4.5.6.4 Government and Non

- Profit Programs



### Smart Equipment Incentives Program
This is the same program as described in the commercial and industrial sector. This program offers
incentives for projects being completed in the government and non

- profit sector.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 40 

### Smart Construction Incentives Program

This is the same program as described in the commercial and industrial sector. This program offers
incentives for projects being completed in the government and non

- profit sector.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 41 

## 5 P OTENTIAL 

## S TUDY 

## M ETHODOLOGY



### This section describes the overall methodology that was utilized by the SWE T eam to conduct th e Pennsylvania statewide electricity energy efficiency potential study . Completion of this study is one of
the key tasks included in the recentl y renewed contract and scope of work for the Statewide Evaluation

Team. 39 

### The main objective of this energy efficiency potential study is to quantify the technical,
economic, achievable and program potential for energy efficiency s tatewide for three and fiv e year periods starting on June 1, 2013, and to provide potential kWh and kW savings estimates for each level
(technical, economic, achievable and program potential) of energy efficiency potential. This study has not
examined potential savings from demand response programs but reports demand savings associated with
different types of energy efficiency potential . This document describes the general steps and methods

that were used at each stage of the analytical process necessary to produce the various estim ates of
energy efficiency potential

. The S tatewide E valuation T eam has coordinated and provided information
to the Pennsylvania Public Utility Commission (PA PUC) Technical Utility Services ( TUS ) staff and the
Act 129 Technical Working Group throughout the development of this study for feedback and

comment.

This energy efficiency potential study provides results that are both statewide and specific to each of the

seven Pennsylvania investor

- owned electric distribution companies (EDC). To accomplish this o bjective,

a unique energy efficiency potential model was created for each EDC for each primary market sector,
namely, residential, commercial, and industrial. The study results are being provided to the PA PUC and

to each EDC to assist in the establishmen t of energy efficiency savings goals for Phase 2 of the
Pennsylvania Act 129 programs

. 40 

### Th is analysis of the potential for energy efficiency savings is based on

the most recent electricity sales forecasts for Pennsylvania EDC s for a ten

- year period startin g in the year

2013

. Study results are available on a year

- by

- year basis for the three year period from June 1, 2013 to
May 31, 2016, the five year period from June 1, 2013 through May 31, 2018 and an additional five years
from June 1, 2018 through May 31, 2023

.

Energy efficiency potential studies involve a number of analytical steps to produce estimates of each type

of energy efficiency potential : technical, economic, achievable

, and program . This study utilize s benefit/cost screening tool s for the residen tial, commercial and industrial sectors. These cost
effectiveness screening tools are Excel

- based model s that integrate technology

- specific impacts and
costs, customer characteristics, utility avoided cost forecasts and more. Excel was used as the modeling
platform to provide transparency to the estimation process and allow for simple customization based on
Pennsylvania’s unique characteristics and the availability of specific model input data. The major
analytical steps are summarized below and specific ch anges in methodology from one sector to another
have been noted throughout this section

.

 

### Measure List Development

 

### Load Forecast Disaggregation (for the commercial and industrial sectors)

 

### Potential Savings Overview

 

### Technical Potential

 

### Economic Potential

 

### Mea sure Cost

- Effectiveness Screening

 

### Achievable Potential

 

### Program Potential

39 The Pennsylvania Public Utility Commission officially executed a two year contract renewal with the Pennsylvania Statewide

Evaluation team in January 2012.

40 The nine objectives for this energy efficiency potential study are listed on page 38 of the master contract between the

Pennsylvania PUC and GDS Associates, Inc., the prime contractor for the Statewide Evaluati on Team.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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### From the months of November 2011 through April 2012, the SWE team made available key study
inputs, such as the measure lists, measure characteristics and baseline study year results to TUS staff,
EDCs and their evaluation consultants for their review and comment. Additionally, the SWE and TUS
staff held monthly technical working group (TWG) meetings throughout this study development to
present study updates and interim findings and to facilitate discussion of study methodology and input

data.



### 5.1 M EASURE 

### L IST 

### D EVELOPMENT



### Energy efficiency measure lists include all measures in the Pennsylvania Technical Reference Manual

(TRM), as well as other energy efficiency measures based on the SWE t eam’s existing knowledge and

current databases of electric end

- use technologies and energy efficiency measures . This measure

information was supplemented as necessary to include other technology areas of interest to the PA PUC
staff and the Pennsylvania ut ilities . The study scope includes measures and practices that are currently
commercially available as well as emerging technologies

. The commercially available measures are of the
most immediate interest to energy efficiency program planners in Pennsylvani a

. However, a small

number of well documented emerging technologies were considered for each sector. Emerging
technology research was focused on measures that are commercially available but may not be widely
accepted at the current time . In October 2011 th e SWE Team provided the energy efficiency measure

lists for each sector to PUC staff and the EDCs for review and comment. These measure lists were then
reviewed, discussed and updated at the meetings of the Pennsylvania Technical Working Group in

October, November and December 2011.

In addition, this study includes measures that could be relatively easily substituted for or applied to
existing technologies on a retrofit or replace

- on

- burnout basis. Replace

- on

- burnout applies to equipment

replacements that are made normally in the market when a piece of equipment is at the end of its useful
life. A retrofit measure is eligible to be replaced at any time in the life of the equipment or building.
Replace

- on

- burnout measures are generally characterized by incre mental measure costs and savings ( e.g. the costs and savings of a high

- efficiency versus standard efficiency air conditioner); whereas retrofit
measures are generally characterized by full costs and savings (e.g. the full costs and savings associated

with adding ceiling insulation into an existing attic ). For new construction, energy efficiency measures
can be implemented when each new home or building is constructed, thus the rate of availability is a

direct function of the rate of new construction.



### 5.1.1 M EA SURE 

### C HARACTERIZATION



### A significant amount of data is needed to estimate the KWh and KW savings potential for individual
energy efficiency measures or programs across the entire existing residential, commercial and industrial

sectors in Pennsylvania

. The S WE Team used Pennsylvania specific data wherever it was available and

up

- to

- date. C onsiderable effort was expended to identify, review, and document all available data

sources

. 41 

### This review has allowed the development of reasonable and supportable assumpti ons regarding measure lives ; installed costs (where appropriate) ; electric savings and saturation for each

mea sure included in the final list of measures in this study.

Costs and savings for new construction and burnout measures are calculated as the in cremental
difference between the code minimum equipment and the high efficiency energy efficiency measure

. This approach is utilized because the consumer must select an efficiency level that is at least the code
minimum equipment. The incremental cost is calculated as the difference between the cost of high
efficiency and standard (code compliant) equipment. However, for early retirement measures, the

41 The appendices and supporting databases to this report provide the data sources used by the SWE team to obtain up

- to

- date

data on energy efficiency measure costs, savings, useful lives and saturations.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 43 

### measure cost and savings were considered to be the “full” cost of the measure, as the baseline scenario

as sumes the consumer would do nothing.



### Savings: Estimates of annual measure savings as a percentage of base equipment usage was developed
from a variety of sources, including:

 

### 2012 Pennsylvania Technical Reference Manual (TRM)

 

### Existing deemed savings datab ases

 

### Building energy simulation software (such as the REM/Rate model) and engineering analyses

 

### Secondary sources such as the American Council for an Energy

- Efficient Economy (“ ACEEE ”)

, Department of Energy (“ DOE ”)

, Energy Information Administration (“ EIA ”)

, ENERGY

STAR, and other technical potential studies

 

### Program evaluations conducted by Pennsylvania EDCs as well as other utilities and program

administrators



### Measure Costs: Measure costs represent either incremental or full cost s , and typically include th e

incremental cost of measure ins tallation. For purposes of this study, nominal measures costs were held
constant over time. This general assumption is being made due to the fact that historically many measure
costs (e.g., CFL bulbs, Energy Star appliances , etc.) have declined over time, while some measure costs
have increased over time (e.g., fiberglass insulation). Cost estimates were obtained from the following
types of data sources :

 

### Existing deemed savings databases

 

### Secondary sources such as ACEEE, ENER GY STAR, NREL, Maryland incremental cost study,
and other technical potential studies

 

### Retail store pricing (such as web sites of Home Depot and Lowe’s) and industry experts

 

### EDC program e valuation and market assessment reports

 

### EDC annual reports to the PA P UC



### Measure Life: Represents the number of years that energy

- using equipment is expected to operate.
Pennsylvania legislative Act 129 caps the measure useful life (when used in the Total Resource Cost Test

calculation) at a maximum of 15 years. Useful life estimates have been obtained from the following data

sources :

 

### 2012 Pennsylvania TRM

 

### Manufacturer data

 

### Savings calculators and l ife

- cycle cost analyses

 

### Secondary sources such as ACEEE, ENERGY STAR, and other technical potential studies

 

### The California Dat abase for Energy Efficient Resources (“ DEER ”) database

 

### Evaluation reports

 

### Surveys done by the EDCs

 

### GDS and other consultant research or technical reports



### Baseline and Efficient Technology Saturations: In order to assess the amount of electric energy effic iency
savings still available, estimates of the current saturation of baseline equipment and energy efficiency

measures are necessary. Up

- to

- date measure saturation data were primarily obtained from the following

recent studies:

 PA PUC residential and comm ercial/industrial baseline studies (based on site surveys conducted

by PECO and the SWE Team)

 Other recently completed home energy and appliance saturation surveys completed in

Pennsylvania, including EDC research studies

 2009 EIA Residential Energy Consum ption Survey (RECS)P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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###  2006 EIA Manufacturing Energy Consumption Survey (MECS)

 2003 EIA Commercial Building Energy Consumption Survey (CBECS)

Further detail regarding the development of measure assumptions for energy efficiency in the residential

, commercial

, and industrial sectors are provided in this report in later sections . Additionally, the
appendices of the report provide a comprehensive listing of all energy efficiency measure assumptions

and sources.



### 5.2 F ORECAST 

### D ISAGGREGATION



### For the commercial and in dustrial sectors, each EDCs baseline load forecast was disaggregated by
combining inputs compiled in the SWE baseline study for Pennsylvania and each EDCs load forecast to obtain average consumption estimates by customer segment, construction vintage, and end use, and

summ ed up to the sector level. This disaggregation effort was conducted by the SWE Team if this level
of detail was not available in the EDC load forecasts provided to the SWE Team. The disaggregated

forecast data mainly provide s the foundatio n for the development of energy efficiency potential

estimates for the commercial and industrial sectors

. The unit energy consumption information was
obtained from such sources as the PA TRM, building energy simulation models, EDC load research

studies, et c. The baseline year, 2010, end

- use segmentations for each EDC were then applied across the
study horizon and steps were taken to align with each EDCs fundamental load forecast. It was not
necessary to develop a disaggregated residential sales forecast for each EDC because a bottom

- up approach was used for the residential sector.



### 5.2.1 R OLE OF 

### N ATURALLY 

### O CCURRING 

### C ONSERVATION



### Naturally occurring conservation exists through government intervention, improved manufacturing

efficiencies, building energy codes, mark et demand, and increased energy efficient implementation
through early fore

- runners, who will implement measures without explicit monetary incentives. The
impacts of new Federal government mandated energy efficiency standards have already been reflected in
the baseline data for equipment unit energy consumption being used for this potential study. The impact
of these new government standards

, such as the new standards included in the Federal government’s
December 2007 Energy Independence and Security Act (E ISA ) 42



### , have been discussed with the
Pennsylvania EDCs at several meetings of the Act 129 Technical Working Group. The EISA impacts on
unit energy consumption are discussed in more detail in the Pennsylvania TRM. Government regulation
can significantly incr ease naturally occurring potential through tax incentives, stimulus f u nding or stricter
manufacturing standards. These forces cause certain sector end

- use energy consumption values to improve across the baseline forecast . The SWE team has worked with each EDC to understand the types
and amount of naturally occurring energy conservation existing in EDC load forecasts. This step is
important to ensure the energy efficiency potential is not double

- counted, by over

- stating the potential

that could occur for end

- use s where codes and standard are reducing the baseline unit energy
consumption included in EDC load forecasts. In addition, the SWE Team has reflected the impacts of
new EISA lighting standards that will go into effect in 2020. This specific adjustment r educes energy
efficiency potential for 2020 and subsequent years.



### 5.3 P OTENTIAL 

### S AVINGS 

### O VERVIEW



### Potential studies often distinguish between several types of energy efficiency potential: technical,
economic, achievable, and program. However, because there are often important definitional issues
between studies, it is important to understand the definition and scope of each potential estimate as it

applies to this analysis.

42 PUBLIC LAW 110

– 140

— DEC. 19, 2007. Energ y Independence and Security Act of 2007P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 45 Figure 5

- 1 : Types of E nergy E fficiency Potential 43



### The first two types of potential, t echnical and economic, provide a theoretical upper bound for energy
savings from energy efficiency measures. Still, even the best designed portfolio of programs is unlikely to
capture 100 percent of the technical or economic potential. Therefore, achievabl e potential and program
potential attempt to estimate what may realistically be achieved, when it can be captured, and how much
it would cost to do so. Figure 5

- 1 above illustrates the four most common types of energy efficiency
potential.



### 5.4 T ECHNICAL 

### P OT ENTIAL



### The Pennsylvania Statewide Evaluation team has used the energy efficiency potential definitions included

on page 2

- 4 of the November 2007 National Action Plan for Energy Efficiency (NAPEE) Guide for
Conducting Energy Efficiency Potential Studies. Te chnical potential is the theoretical maximum amount
of energy use that could be displaced by efficiency, disregarding all non

- engineering constraints such as

cost

- effectiveness and the willingness of end

- users to adopt the efficiency measures. It is often estimated
as a “snapshot” in time assuming immediate implementation of all technologically feasible energy saving
measures, with additional efficiency opportunities assumed as they arise from activities such as new

construction. 44



### In general, this study u tilizes a “bottom

- up” approach in the residential sector to calculat e the potential
of an energy efficiency measure or set of measures as illustrated in Figure 5

- 2 below . A bottom

- up approach first starts with the savings and costs associated with replacin g one piece of equipment with its
high efficien cy counterpart, and then multiplies these values by the number of measures available to be
installed throughout the life of the program. The bottom

- up approach is applicable in the residential

sector because o f the concurrent SWE baseline study, better secondary data availability and greater
homogeneity of the building and equipment stock to which measures are applied. However, this
methodology was not utilized in the commercial and industrial sector s

. For the commercial and industrial

sector s , a “top

- down” approach was used for developing the technical potential estimates

. For the
industrial sector, the “top down” approach builds an energy use profile based on estimates of kWh sales
by business segment and end use. S avings factors for energy efficiency measures are then applied to
applicable end use energy estimates after assumptions are made regarding the fraction of sales that are associated with inefficient equipment and the technical/engineering feasibility of each energy efficiency

measure.

43 Reproduced from “Guide to Resource Planning with Energy Efficiency” November 2007. US EPA. Figure 2

- 1.

44 National Action Plan for Energy Efficiency, “Guide for Conducting Energy Efficiency Potential Studies”, pag e 2

- 4P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 46 Figure 5

- 2 : Residential Sector Savings Methodology

- Bottom Up Approach



### As shown in Figure 5

- 2, the methodology starts at the bottom based on the number of residential

customers (splitting them into single

- family an d multi

- family customers as well as existing vs. new

construction)

. From that point, estimates of the size of the eligible market in Pennsylvania are developed

for each energy efficiency measure for each of the seven EDC service areas included in this stud y . For
example, energy efficiency measures that affect electric space heating are only applicable to those homes

in Pennsylvania that have electric space heating.

To obtain up

- to

- date appliance and end

- use saturation data, the study made extensive use of the SWE

2011

- 2012 residential baseline study. The baseline study on

- site surveys collected detailed data on the
current saturation of electricity consuming equipment in Pennsylvania and the energy efficiency level of
HVAC equipment, appliances, and buildi ng shell characteristics

. Estimates of energy efficient equipment

saturations were based on data collected from the 2011

- 12 residential baseline study on

- site surveys in

Pennsylvania.

The goal of the approach is to determine how many households that a spe cific measure applies to (base case factor), then of that group, the fraction of households/buildings which do not have the energy

efficient version of the measure being installed (remaining factor). In instances where technical reasons
do not permit the installation of the efficient equipment in all eligible households an applicability factor
is used to limit the potential

. Alternative water heating technologies (efficient water heater tanks and/or

heat pump water heaters) are then utilized to meet the re maining market potential. The last factor to be
applied is the savings factor, which is the percentage savings achieved from installing the efficient

measure over a standard measure.

In developing the overal l potential electricity savings, the analysis account s for the interactive effects of
measures designed to impact the same end

- use. For instance, if a home were to properly seal all

ductwork, the overall space heating and cooling consumption in that home would decrease. As a result,

the remaining pot ential for energy savings derived from a heating/cooling equipment upgrade would be

reduced. In instances where there are two (or more) competing technologies for the same electrical end

use, such as heat pump water heaters, water heater efficiency measure s and high

- efficiency electric
storage water heaters, an equal percent age of the available population is assigned to each measure using
the applicability factor . In the event that one of the competing measures is not found to be cost

-P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 47 

### effective, the homes /b uildings assigned to that measure are transitioned over to the cost effective
alternative (if any).

The savings estimates per base unit are determined by comparing the high

- efficiency equipment to
current installed equipment for existing construction re trofits or to current equipment code standards for

replace

- on

- burnout and new construction scenarios.



### 5.4.1 C ORE 

### E QUATION FOR THE 

### R ESIDENTIAL 

### S ECTOR



### The core equation used in the residential sector energy efficiency technical potential analysis for each

indiv idual efficiency measure is shown below in Equation 5

- 1 below

.

Equation 5

- 1 : Core Equation for Residential Sector Technical Potential

Technical

Potential

of

Efficient

Measure = Total

Number of

Households
or Buildings X Base Case

Equipment

End Use

Intensity [kWh/unit] X Saturation

Share X Applicability

Factor X Savings

Factor



### Where:

 Base Case Equipment End Use Intensity = the electricity used per customer per year by each

base

- case technology in each market segment. This is the consumption of the electrical energy using equipment that the efficient technology replaces or affects.

 Saturation Share = the fraction of the end use electrical energy that is applicable for the efficient
technology in a given market segment. For example, for residential water heating , this would be

the fraction of all residential electric customers that have electric water heating in their

household.

 Applicability Factor = the fraction of the applicable units that is technically feasible for

con version to the efficient technology from an engineering perspective (e.g., it may not be
possible to install CFLs in all light sockets in a home because the CFLs may not fit in every

socket.)

 Savings Factor = the percentage reduction in electricity consum ption resulting from application
of the efficient technology.

Technical energy efficiency potential in the residential sector is calculated in two steps. In the first step,

all measures are treated independently ; that is, the savings of each measure are no t reduced or otherwise
adjusted for overlap between competing or interacting measures. By analyzing measures independently,

no assumptions are made about the combinations or order in which they might be installed in customer
buildings. However, the cumulat ive technical potential cannot be estimated by adding the savings from
the individual savings estimates because some savings would be double

- counted. For example, the
savings from a measure that reduces heat loss from a building, such as insulation, are pa rtially dependent
on other measures that affect the efficiency of the system being used to heat the building, such as a high

efficiency furnace; the more efficient the furnace, the less energy saved from the installation of the

insulation. In the second st ep, adjustments are made to account for such interactive effects.

Finally, the SWE Team has developed a supply curve to show the amount of energy efficiency savings

available at different cost levels. A generic example of a sup ply curve is shown in Figure 5

- 3 . As shown
in the figure, a supply curve typically consists of two axes; one that captures the cost per unit of saving aP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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### resource (e.g., dollars per lifetime kWh saved) and another that shows the amount of savings that could

be achieved at each level o f cost. The curve is typically built up across individual measures that are
applied to specific base

- case practices or technologies by market segment. Savings measures are sorted

based on a metric of cost . T otal savings available at various levels of cost are calculated incrementally
with respect to measures that precede them. Supply curves typically, but not always, end up reflecting
diminishing returns, i.e., costs increase rapidly and savings decrease significantly at the end of the curve.

Figure 5

- 3 : Generic Example of a Supply Curve



### As noted above, the cost portion of this energy efficiency supply curve is represented in dollars per unit

of lifetime energy savings. Cost are annualized (often referred to as levelized) in supply curves. For

example, e nergy efficiency supply curves usually present levelized costs per kWh saved by multiplying
the initial investment in an efficient technology or program by the capital recovery rate (CRR) , and then
dividing that amount by annual kWh savings :

Therefore,

L evelized Cost per kWh Saved = Initial Cost x CRR/Annual kWh Savings



### 5.4.2 C ORE 

### E QUATION FOR THE 

### C OMMERCIAL AND 

### I NDUSTRIAL 

### S ECTOR



### The core equation utilized in the commercial sector technical potential analysis for each individual

efficiency meas ure for each of the Pennsylvania EDCs is shown below in Equation 5

- 2

. The forecast of
commercial square footage information for each EDC was developed by the SWE Team. The
information used by the SWE Team on the total square footage by business type by EDC is available

fr om the SWE Team upon request.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 49 Equation 5

- 2 : Core Equation for Commercial Sector Technical Potential

Technical

Potential

of

Efficient

Measure = Total Stock

Square
Footage by

Business
Type by

EDC X Base Case

Equipment

En d Use

Intensity [kWh/sf] X Saturation

Share X Applicability

Factor X Savings

Factor



### The core equation utilized in the industrial sector technical potential analysis for each individual
efficiency meas ure for each EDC is shown below in Equation 5

- 3

.

Equa tion 5

- 3 : Core Equation for Industrial Sector Technical Potential

Technical

Potential

of

Efficient

Measure = 

### ∑ Total EDC

End Use

kWh Sales

by Industry

Type X Applicability

Factor X Savings

Factor



### Where:

 Total Stock Squar e Footage by Business Type = the forecasted square footage level for a given
commercial business type (e.g., office buildings).

 Base Case Equipment End Use Intensity = the electricity used per square foot per year by each

base

- case technology in each mark et segment. This is the consumption of the electrical energy using equipment that the efficient technology replaces or affects. This end

- use consumption
data was obtained from such sources as the US EIA commercial building energy survey

(CBECS), Pennsylvan ia EDC data, the Pennsylvania TRM, and other sources.

 Total end use kWh sales (by segment) = the forecasted level of electric sales for a given end

- use (e.g., space heating) for an EDC in a n industrial market segment.

 Saturation Share = the fraction of t he EDC end use electrical energy that is applicable for the
efficient technology in a given market segment. For example, for boiler heating , this would be

the fraction for a specific EDC of all space heating kWh in a given market segment that is

associated with electric boilers

.

 Applicability F actor = the fraction of the equipment or practice that is technically feasible for
conversion to the efficient technology from an engineering perspective (e.g., it may not be
possible to install VFDs on all motors in a given market segment).

 Savings F actor = the percentage reduction in electric consumption resulting from application of
the efficient technology.

For the commercial and industrial sectors, the development of the energy efficiency technical potential

es timate begins with a disaggregated energy sales forecast over the ten year forecast horizon (2013 to
2022). The commercial sales forecast is broken down by building type, then by electric end use. The
industrial sales forecast is broken down by industry ty pe, then by electric end use. Then a savings factor
is applied to end use electricity sales to determine the potential electricity savings for each end use. The

commercial sector

, as defined in this analysis

, is comprised of the following business segment s:

 Warehouse

 RetailP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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###  Grocery

 Office

 Lodging

 Healthcare

 Restaurant

 Institutional, including education

 Other

The industrial sector

, as defined in this analysis

, is comprised of the following business segments:

 Ag & Pumping

 Construction

 Mfg: Chemicals and Al lied Products

 Mfg: Electronic Equipment

 Mfg: Fabricated Metal Products

 Mfg: Food

 Mfg: Ind and Com Machinery

 Mfg: Industrial

 Mfg: Misc

 Mfg: Paper and Allied Products

 Mfg: Primary Metals

 Mfg: Rubber and Mixed Plastics

 Mfg: Stone Clay Glass and Concrete

 Mfg: Transportation Equipment

 Mining & Extraction

Similar to the residential sector, technical electric energy efficiency savings potential in the C&I sectors is
calculated in two steps. In the first step, all measures are treated independently ; that is, the savings of each
measure are not reduced or otherwise adjusted for overlap between competing or synergistic measures.
By treating measures independently, their relative economics are analyzed without making assumptions

about the order or combinations in whi ch they might be implemented in customer buildings. However,
the total technical potential across measures cannot be estimated by summing the individual measure
potentials directly because some savings would be double

- counted. For example, the savings from a weatherization measure, such as low

- e ENERGY STAR windows, are partially dependent on other
measures that affect the efficiency of the system being used to cool or heat the building, such as high

efficiency space heating equipment or high

- efficiency air conditioning systems; the more efficient the
space heating equipment or electric air conditioner, the less energy saved from the installation of low

- e

ENERGY STAR windows. Accordingly, the second step is to rank the measures based on a metric of

cost

- effe ctiveness (the measure TRC ratio) and adjust savings for interactive effects so that total savings
are calculated incrementally with respect to measures that precede them.

For the residential and commercial sectors, the SWE Team addressed the new construc tion market as a
separate market segment, with measures/programs targeted specifically at the new construction market.
In the residential new construction market segment, for example, detailed energy savings estimates for

the ENERGY STAR Homes program were u sed as a basis for determining electric savings for this
market segment in Pennsylvania.



### 5.5 E CONOMIC 

### P OTENTIAL



### Economic potential refers to the subset of the technical potential that is economically cost

- effective
(based on screening with the Total Res ource Cost) as compared to conventional supply

- side energy

resources. The SWE Team has calculated the TRC benefit/cost ratios for this study according to theP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 51 

### Pennsylvania PUC’s 2009 and 2011 TRC Orders. Both technical and economic potential are theoretical
numbers that assume immediate implementation of energy efficiency measures, with no regard for the
gradual “ramping up” process of real

- life programs. In addition, they ignore market barriers to ensuring
actual implementation of energy efficiency. Finally , they only consider the costs of efficiency measures
themselves, ignoring any programmatic costs (e.g., marketing, analysis, administration , program evaluation, etc. ) that would be necessary to capture them.

The SWE team pre

- screened possible energy eff iciency technologies and practices based on an
understanding of which measures were likely to be cost

- effective and in an interest in conserving time
and effort for other aspects of the analysis. Measure screening removed measures that were not

commerciall y available, were already at current code, or were not applicable to Pennsylvania. All

measures that were not found to be cost

- effective based on the results of the TRC test were excluded

from further analysis. Then allocation factors were readjusted and a pplied to the remaining measures that
were cost effective. The TRC test is defined in greater detail in Section 5.6 below.



### 5.6 D ETERMINING 

### C OST



### - E FFECTIVENESS



### The SWE team utilized the 2009 and 2011 Pennsylvania PUC TRC Orders to determine cost

effectiveness f

or energy efficiency measures in this potential study. The cost effectiveness test that was

used is the Total Resource Cost Test (TRC).



### 5.6.1 T HE 

### T OTAL 

### R ESOURCE 

### C OST 

### T EST



### The TRC test measures the net costs of a demand

- side management or energy efficiency measu re or program as a resource option based on the total costs of the measure/ program, including both the
participants' and the utility's costs.

The TRC test represents the combination of the effects of a program on both the customers
participating and those not participating in a program. In general, t he benefits calculated in the TRC test

usually include the avoided electric supply costs for the periods when there is an electric load reduction,
savings of other resources such as fossil fuels and water , and applicable Federal and State energy
efficiency tax credits. For purposes of this study, only the electricity savings were used to calculate the
benefit for the PA TRC, as the ACT 129 energy efficiency savings targets include only electric savings.

For the estimates of economic and achievable potential, t he benefits in the Pennsylvania TRC test were
calculated using gross program savings . Net savings, on the other hand, are the savings net of changes in
energy use that would have happened in the absence of t he program. For the cost effectiveness screening
to determine economic potential and achievable and program potential, the net

- to

- gross ratio for all

measures was set at 1.0. 45



### In general, t he costs in the TRC test (incremental or full cost depending on w hether the measure was
replaced on burnout or is an early replacement) are the program costs paid by the utility (or program
administrator) and the participants

. Thus all equipment costs, installation, operation and maintenance,

cost of removal and adminis tration costs, no matter who pays for them, are included in this test.
According to the National Action Plan for Energy Efficiency Guide titled “Understanding Cost
Effectiveness of Energy Efficiency Programs”, a ny tax credits are considered a benefit for t he TRC test. For purposes of this study, administrative costs were not included for the measure cost effectiveness
screening conducted to develop the estimates of economic potential. Administrative program costs are

included in TRC tests for Achievable and Program potential.

45 Haeri, Hossein; Khawaja, Sami; “The Trouble with Free

- Riders, The Debate About Free

- Riders in Energy Efficiency Isn’t

Wrong, But It is Wrong

- Headed”, the Cadmus Group, March 2012. This paper notes that o ver two

- thirds of all evaluation studies

revi ewed in a recent best

- practice study had a net

- to

- gross value of approximately 1.0.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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### 5.6.2 A

VOIDED 

### C OSTS



### The avoided cost forecasts utilized to measure cost

- effective screening and for reporting potential
benefits were based on the Pennsylvania PUC’s 2009 and 2011 TRC Orders and each EDC’s avoided
cost structure, including e nergy, transmission, distribution, and capacity avoided costs. The discount rate
used in the calculation of the Pennsylvania TRC Test is the utility’s wei ghted average cost of capital.
Avoided energy costs are time and seasonally differentiated where possi ble.



### 5.7 A CHIEVABLE 

### P OTENTIAL



### Achievable potential was determined as the amoun t of energy use that can realistical ly be saved assuming
an aggressive program marketing strategy and with two program incentive scenarios . Achievable
potential takes into account b arriers that hinder consumer adoption of energy efficiency measures such
as financial, political and regulatory barriers , and the capability of programs and administrators to ramp

up activity over time. The potential study evaluates two achievable potentia l scenarios:

 

### S cenario #1 for achievable potential is based on paying incentives equal to 100% of measure

incremental costs

 

### Scenario #2 for achievable potential scenario is based on EDCs paying incentive levels
comparable to those in effect during Program Y ear 2.

While many different incentive scenarios could be modeled, the number of achievable potential scenarios
that could be developed was limited to two scenarios due to the available budget for this potential study.
The SWE team analyzed the two select ed achievable potential scenarios with different anticipated
penetration curves or market acceptance mo dels for each incentive level. In scenario #1, the penetration
curve was based on a maximum penetration based on 100% funding of the measure incremental costs. Previous studies and actual program experience have indicated that this curve can reach an asymptote of
85%, as not 100% of customers will accept or adopt energy efficiency measures for various reasons. The
second scenario analyzed was the expecte d market acceptance with current EDC incentive levels
increased by 25%. Achievable potential scenario #2 incentives were set at 56 % of incremental cost and

34 % of incremental cost for the residential and C&I sectors respectively

. These two penetration

scen arios contain uncertainty based on consumer’s willingness to participate.

For new construction, energy efficiency measures can be implemented when each new home or building
is constructed, thus the rate of availability is a direct function of the rate o f new construction. For
existing buildings, determining the annual rate of availability of savings is more complex. Energy
efficiency potential in the existing stock of buildings can be captured over time through three principal

processes:

1) A s equipment r eplacements are made normally in the market when a piece of equipment is at the

end of its effective useful life ( referred to as “replace

- on

- burnout”)

2) A t any time in the life of the equipment or building ( referred to as “retrofit”).

3) W hen a new home or bui lding is constructed.

For the replace

- on

- burnout measures, existing equipment is assumed to be replaced with high

- efficiency
equipment at the time a consumer is shopping for a new appliance or other energy consuming
equipment, or if the consumer is in the process of building or remodeling. Using this approach, only
equipment that needs to be replaced in a given year is eligible to be upgraded to energy efficient
equipment. For the retrofit measures, savings can theoretically be captured at any time; howeve r, in
practice, it takes many years to retrofit an entire stock of buildings, even with the most aggressive of
energy efficiency programs. For new construction, savings are achieved at the time the building is
completed.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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### In the residential base case scena rio, achievable potential represents the attainable savings if the market
penetration of high

- efficiency electric appliances and equipment reaches a certain percentage of the
eligible market between 2013 and 202 3 . The time

- frame in which the market penetra tion target is met,
however, differs between replace

- on

- burnout and retrofit measures. The SWE Team utilized a
combination of actual program experience and market penetration models to forecast likely levels of
achievable market penetration for energy effi ciency measures in Pennsylvania.

1) For replace

- on

- burnout measures, a fraction of the total eligible market can be achieved annually
over the course of the technology’s useful life. For example, if a measure has a 20 year useful life,
only about half of t he existing units would be expected to burnout during a 10 year timeframe;
thus only the remaining market would be eligible for replacement during the second ten

- year period of the 20 year life.

2) For all retrofit measures the analysis assume s fewer adoption barriers, and the target market

penetration for retrofit opportunities can likely be achieved by 20 2 3 for measures with an
assumed useful life of 10 years or greater. Retrofit measures with a useful life of less than 10
years would be considered over the specific measure lifetime

. 3) For measures installed in new construction, the savings occur as new buildings are constructed
and completed.

The methodology for estimating the total energy efficiency measure adoption rates over time (as applied

to the core e quation 5

- 4 ) from 2013

- 202 3 in the residential sector is based on the following core

equation:

Equation 5

- 4 : Adoption Rates Over Time

– Replace on Burnout



### Program Adoption = [(Population of Homes * Saturation Share * Applicability Factor * Market Penetrati on Factor) / (Measure Useful Life)] * Program Time Frame

Where:

 Population = Total number of single family or multi

- family homes in Pennsylvania territory.

 Saturation Share = Percent of population with measure (standard or high

- efficiency).

 Applicabili ty Factor = Percent of population currently not equipped with energy efficient

technology

 Market Penetration Factor = Projected market penetration curve over

. In the achievable
potential scenarios, this factor ramped up to a maximum asymptote within a giv en time period
based on a market penetration algorithm.

 Measure Useful Life = Useful life of Measure

 Program Time Frame = # of years included in the program analysis

This equation was used to calculate the total adoption of energy efficient measures bas ed on the replace
on burnout approach.



### 5.7.1 A CHIEVABLE 

### P OTENTIAL 

### M ARKET 

### P ENETRATION 

### R ATES FOR THE 

### R ESIDENTIAL



### S ECTOR



### The market penetration factor for replace on burnout measures was developed through two steps. When

the total number of measures calculated t o turn over (or become eligible for replacement) on an annualP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 54 

### basis was determined, one of three annual penetration curves was assigned to each measure for the
achievable potential #1 scenario. For measures currently offered as part of an existing energy e fficiency
and conservation program, measures in the achievable potential #1 scenario were assigned either a
“quick” or “slow” annual penetration curve. In general, these curves were assigned based on measure
cost and current market acceptance. For example, a measure with a low cost and relatively high market
acceptance was assigned a “quick” annual penetration curve, resulting in measures reaching the targeted
market penetration scenario by the fifth forecast program year. A measure with a high install cost or low
market penetration was assigned the “slow” annual penetration curve, in which measures did not reach
the targeted market penetration scenario until the eighth year of analysis. For new measures not currently
offered by existing programs, a “new” an nual penetration curve was assigned. This annual curve assumes
a starting annual penetration well below the existing measures and does not achieve the targeted market
penetration until the final year of the analysis period. Although this methodology simpli fies what an
adoption curve would look like in practice, it succeeds in providing a concise method for estimating
achievable savings potential over a specified period of time. For the achievable potential #1 scenario, the
market penetration rate started at 40% (for measures currently offered) in year 1 and increased to 85%
by year 10. For the achievable potential #2 scenario, the market penetration rate for the residential
sector was held constant, reaching a 40% penetration rate of the annual stock turno ver. For both of
these scenarios, the market penetration rate for new measures started at 5%.

Finally, a select few measures possess a useful life less than the analysis time frame. For example, a
measure with a useful measure life of ~7 years might expi re in 2019. In this analysis, expiring measures
are generally reintroduced the following year. For the residential sector, the SWE Team assumes that if

measures are re

- introduced, then the incremental costs of the measure also recur. This allows the saving s (and costs) to persist throughout the entire 10 year study. For these measures, the SWE Team assumed
that an incentive was required again to obtain these savings again.



### 5.8 P ROGRAM 

### P OTENTIAL



### While the identified achievable potential includes energy efficien cy potential available in the marketplace,
it was vital to isolate the portion that could be realistically acquired through EDC programs. It is
important to recognize that there are program constraints such as available program funding (cost caps),

how muc h time is available to deliver programs or reach a compliance target, net to gross factors
consumer willingness to participate in programs or adopt measures , and the possibility of specific “set

asides” for the low

- income and institutional sectors.

The SWE team analyze d two basic scenarios for the program potential:

1) Funding levels of 2% of 2006 utility electric revenues (this is the funding cap specified in Act

129 legislation). For example, this program potential estimate for the five year period endin g in

2018 was calculated as follows:

a. Technical potential was calculated first.

b. Then economic potential was calculated (TRC benefit/cost testing was applied at this

step)

c. Then achievable potential was calculated (penetration rate forecasts were applied to

e conomic potential to arrive at achievable potential). In this step, total TRC costs are
developed (utility plus participant costs). The achievable potential estimates are based on
forecasts of kWh and kW savings estimates for 2016 and 2018 for all cost eff ective
energy efficiency measures. The achievable potential estimates are provided for each
individual energy efficiency measure, and for all measures combined.

d. Then program potential was calculated based on a target annual utility energy efficiency
budget that is 2% of annual utility revenues in the year 2006. Then the kWh and kW
achievable potential estimates by measure were scaled up or down across the board withP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 55 

### a single factor until the utility costs for the program potential scenario are equal to 2% o f
annual utility revenues in 2006. When the budget and the savings are scaled to the 2%
utility spending target, then the development of the program potential estimate is
complete

.

2) A nnual savings equal to 1% of aggregate 2011 actual retail kWh sales . For this program potential
scenario, the achievable potential kWh savings are scaled until the level of annual kWh savings is
equivalent to 1% of aggregate annual kWh sales occurring in the baseline period

. For a more
detailed explanation of how this scenario was developed, see section 8.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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## 6 R ESIDENTIAL 

## E NERGY 

## E FFICIENCY 

## P OTENTIAL 

## E STIMATES



### This section of the report presents the estimates of electric technical, economic, achievable and program
potential for the Commonwealth of Pennsylvania as well as for each EDC service area.

Figure 6

- 1 below summarize s the technical, economic, achievable and program savings potential (as a %

of fo recast sales) for the years 2016, 2018 and 2023. The achievable potential scenario #1 estimates are

based on incentives that are set are 100% of measure incremental cost and a long

- term market
penetration rate of 85%. Achievable potential scenario #2 estimates are based o n incentives that are set

a t 56 % of measure incremental cost and a long

- term market penetration rate of 40%. If the target market
penetration for all remaining eligible cost

- effective residential measures can be reached over the next five
years, the achievable potential for electric energy efficiency savings in the residential sector is

approximately 1 0

. 4 % of projec ted re sidential sales in the year 2010 for achievable potential scenario #1,

and 6.9 % of projected re sidential sales in the year 2010 for achievable potential scenario #2. 46

Figure 6

- 1 : Summary of Residen tial Energy Efficiency Potential as a % of 2010 Sales Forecasts

– Statewide



### 6.1 E NERGY 

### E FFICIENCY 

### M EASURES 

### E XAMINED



### 317 residential electric energy efficiency programs or measures were included in the energy savings
analysis for the residential sector. 47 

### Ta ble 6

- 1 below provides a listing of the various residential energy
efficiency measures considered in this study. The list of energy efficiency measures examined was
developed based on a review of the measures included in the 2012 Pennsylvania Technical Ref erence Manual (TRM), measures included in other recent energy efficiency potential studies, and measures
suggested by the Pennsylvania electric distribution companies and their consultants

.

The Excel models used to develop the energy efficiency potent ial estimates have a complete list of all of
the residential energy efficiency measures included in this study as well as the annual kWh and kW

46 Forecasted 2009/2010 kWh sales were used to allow the same baseline to establish compliance targets on a cumulative basis

from Phase 1 to Phase 2, which also allows addin g kWh savings from Phase 1 to Phase 2.

47 This count of the number of residential energy efficiency measures reflects the number of unique energy efficiency measures

as well as the combinations and permutations of measures based on housing type (single

- fami ly attached; single

- family detached,

and multi

- family).P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 57 

### savings, useful life, measure cost, and the Total Resource Cost (TRC) benefit

- cost ratios for each

measure.

Tab le 6

- 1 : Measures and Programs Included in the Residential Sector Analysis

End Use Type End

- Use Description Measures/Programs Includes

Appliances General Home Appliances * Dehumidifiers

* Refrigerators

* Freez ers * Refrigerator/Freezer Turn

- In

Appliances/WH Kitchen/Laundry * Clothes Washers

* Clothes Dryer

* Dishwashers

Electronics Home Electronics * Controlled Power Strips

* Laptops

* Computer Monitors

* Televisions (LED, LCD, Plasma)

* Energy Star Office Eq uipment

* Misc. Consumer Electronics

HVAC (Envelope) Building Envelope Upgrades * Insulation (Attic, Wall, Floor)

* Air Sealing

*Duct Sealing

* Energy Star Windows

* Residential New Construction Program

HVAC (Equipment) Heating/Cooling /Ventilation

Equip ment * Efficient Central AC

* Efficient Room AC

* High Efficiency Air Source Heat Pumps

* High Efficiency Fan Motors

* Exhaust Fans

* Furnace Whistle

*Programmable Thermostat

* Ductless Mini Splits

*Ground Source Heat Pumps

* Secondary room AC retirement

L ighting Indoor/Outdoor Lighting * Incandescent to CFL

* Incandescent to LED

* Nightlights

* Energy Star Torchiere s * Ceiling fan with Energy Star Light Fixture

* Energy Star Holiday Lights

* Interior & Exterior Fixtures
* Lighting Controls

Other Miscella neous Efficiency

Measures * 2

- speed Pool Pump Motor

* Variable Speed Pool Pump Motor

* Direct Feedback Devices (In Home Display Units)

* Indirect Energy Consumption Feedback (OPower)

Water Heating Domestic Hot Water * Efficient Storage Tank WH

* Heat Pum p WH

* Solar WH (w/ Electric Back Up)

* Tank Wrap

* Pipe Wrap

* Low Flow Showerheads

* Faucet Aerators



### 6.2 R ESIDENTIAL 

### S ECTOR 

### S AVINGS 

### M ETHODOLOGY 

### O VERVIEW



### The portfolio of measures examined in the residential sector includes retrofit, early retirement, and

r eplace

- on

- burnout programmatic approaches to achieve energy efficiency savings. Replace

- on

- burnout
measures are purchased and installed at the end of the useful life of a measure (when the equipment
burns out). A retrofit measure refers to the application of supplemental measures (such as the addition ofP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 58 

### a low

- flow device to a showerhead); early retirement includes the replacement of operational equipment
before the end of its remaining useful life.

Existing homes were divided into single family detached units, single

- family attached units and multi

family units in order to account for differing equipment saturations, differences in the square footage of
living space, and differences in the amount of energy used for space heating and cooling. New homes

we re also included in the analysis based on a forecast of the number of new customers each year from
each EDC. The analysis of the potential for energy efficiency savings is based on the most recent

residential electric sales forecasts for each EDC.

The res idential sector analysis was modeled using what is considered a “bottom

- up approach.” The
methodology is illustrated in Figure 6

- 2 below:

Figure 6

- 2 : Residential Sector Savings Methodology

- Bottom Up Appro ach



### As shown in this figure, the methodology started at the bottom based on the number of residential

customers (splitting them into single

- family attached units, single

- family detached units, and multi

- family

units as well as existing vs. new constructi on). From that point, estimates of the size of the eligible
market were developed for each energy efficiency measure. For example, energy efficiency measures that
affect electric water heating are only applicable to those homes that have electric water hea ting.

To obtain up

- to

- date appliance and end

- use saturation data as well as data on the percent of equipment
that is already high efficiency, this study made extensive use of the residential baseline data collected by

the Statewide Evaluation Team for si x of the seven Pennsylvania EDCs and the baseline study
conducted independently in 2010 and 2011 by PECO. Up

- to

- date saturation data for residential
appliances, electric water heating, and electric space heating and cooling equipment were obtained from

uti lity appliance saturation surveys. Additional estimates of energy efficient saturation were generated
from regional or national data when needed.

The full formula to determine residential sector energy efficiency savings at the measure level is shown

bel ow.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 59 Equation 6

- 1 : Core Equation for Residential Sector Technical Potential

Technical

Potential

of

Efficient

Measure = Total

Number of

Households

or Buildings X Base Case

Equipment

End Use

Intensity [kWh/unit] X Base Case

Factor X Remaining

Factor X Applicability

Factor X Savings

Factor



### For measures where deemed kWh savings estimates were available in the Pennsylvania TRM, the base
case equipment end

- use intensity (kWh/unit) and the savings factor were combined into one n umber,
the deemed estimate of kWh savings per year. The goal of the above formula is to determine how many
households that a measure applies to (base case factor), then of that group, the fraction of households

which do not have the efficient version of th e measure being installed (remaining factor). In instances
where technical reasons did not permit the installation of the efficient equipment in all eligible
households or competing technologies were eligible for a household, an applicability factor was us ed that
limits the potential. The last factor to be applied was the savings factor, which is the percentage savings
achieved from installing the efficient measure over a standard measure.

In developing the overall potential electricity savings, the anal ysis also took steps to account for the
interactive effects of measures designed to impact the same end

- use. For instance, if a home were to
improve their air leakage rate, the overall space heating and cooling consumption in that home would

decrease. As a result, the remaining potential for energy savings derived from additional thermal envelope efficiency measures and efficient heating/cooling equipment would be reduced.

In this analysis, it was assumed that for those measures designed to impact the sa me end

- use, the savings
potential for the end use was evenly split across these measures. For example, there are ten energy efficiency measures that can save the electricity used for water heating:

 This study includes three high efficiency water heaters ( energy factors of .93, .95, and .97)

 Two different heat pump water heaters

 A solar water heater

 Water heater tank insulation wrap

 Low flow shower heads

 Low flow faucet aerators

 Pipe wrap

This study assumes that one

- seventh of the existing electric water h eaters are applicable to each of these
seven energy efficiency measures. In the event that one of the competing measures was not found to be

cost

- effective, the homes assigned to that measure were transitioned over to a cost effective alternative

(if any).

Fuel

- switching for electric space heating and electric water heating was not examined in this study. The
residential savings potential also takes into account scheduled federal upgrades to incandescent lighting.
Recently enacted federal standards ( Ener gy Independence and Security Act of 2007 ) require incandescent bulbs
to be approximately 30% more efficient beginning in 2012. 48 

### These improvements to incandescent
equipment performance result in decreased savings potential for CFL and LED technologies. Whi le
these new standards may shift the market even further towards wide

- spread acceptance of CFL
technologies, they do not necessary signal the end of incandescent bulbs. As a result, this analysis
continues to include the potential savings from screw

- in CFL bulbs from 2013

- 2023.

48 The mandated increase in the efficiency of incandescent bulbs is phased in over a 3

- year period: 100

- watt bulbs must be 30%

more efficient beginning in 2012, 75

- watt bulbs in 2013, and 60

- watt and 4 0

- watt bulbs in 2014. To facilitate this analysis, GDS

took the increased standards for incandescent lighting into account throughout the entire period of study (2012

- 2031).P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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### 6.3 T ECHNICAL AND 

### E CONOMIC 

### P OTENTIAL 

### S AVINGS



### The technical potential represents the savings that could be captured if 100 percent of inefficient electric
appliances and equipment were replaced instantaneously (where they are deemed to b e technically

feasible ). As shown below in Table 6

- 2 , total technical potential savings by 2018 for the Pennsylvania

residential sector are 22, 049,980 MWh, or 41% of forecast residential MWh sales in 201 0

.

Table 6

- 2 : Statewide Residential Sector Technical Potential kWh Savings By End Use



### Figure 6

- 3 below presents the statewide electric energy efficiency technical potential results for the
residential sector in the form of a supply curve. The supply curve presents the technical potential savings

(as a % of forecast kWh sales) at varied levelized costs per lifetime kWh saved amounts. For example,
roughly 35 % savings can be achieved at a cost per lifetime kWh saved of $0.10 or less. To obtain
increased electric energy savings from efficiency resources, it is necessary to move to the right on the
curve and choose progressively more costly energy efficiency resources. It should be noted that the
levelized costs per lifetime kWh saved are based on electric savings and do not factor in associated non

electric benefits, nor do these costs includ e program administrative costs.

Technical Potential, Cumulative

Savings (MWh), 2016 Technical Potential, Cumulative

Savings (MWh), 2018 Technical Potential, Cumulative

Savings (MWh), 2023

End Use MWh Pe rcent
of Total MW MWh Percent
of Total MW MWh Percent
of Total MW

Water

Heating 2,535,551 12% 357 2,535,551 11% 357 2,535,551 11% 357

Lighting 6,288,492 29% 281 6,288,492 29% 281 6,288,492 28% 281

Appliances 2,887,520 13% 756 2,887,520 13% 756 2,887,52 0 13% 756

Electronics 1,744,855 8% 329 1,744,855 8% 329 1,744,855 8% 329

Pools 227,778 1% 74 227,778 1% 74 227,778 1% 74

HVAC

(Envelope) 3,907,700 18% 1,019 3,907,700 18% 1,019 3,907,700 17% 1,019

HVAC

(Equipment) 3,338,323 15% 1,291 3,338,323 15% 1,29 1 3,338,323 15% 1,291

Whole House 752,810 3% 450 752,810 3% 450 752,810 3% 450

New

Construction 164,602 1% 26 366,950 2% 59 1,141,735 5% 183

Total 21,847,632 100% 4,583 22,049,980 100% 4,616 22,824,765 100% 4,740

% of Sales 40.3% 40.7% 42.1 %P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 61 Figure 6

- 3 : Residential Electric Efficiency Supply Curve for Pennsylvania



### Table 6

- 3 presents the residential sector economic potentia l savings by 2 016, 2018 and 2023 for
Pennsylvania. The economic potential savings by 2018 are 19,215,900 MWh, or 35.5 % of forecast

residential MWh sales in 20 10

.

Table 6

- 3 : Statewide Residential Sector Econom ic Potential kWh Savings By End Use

Economic Potential, Cumulative

Savings (MWh), 2016 Economic Potential, Cumulative

Savings (MWh), 2018 Economic Potential, Cumulative

Savings (MWh), 2023

End Use MWh Percent
of Total MW MWh Percent
of Total MW MWh Perc ent of Total MW

Water

Heating 2,211,118 12% 276 2,211,118 12% 277 2,211,118 11% 277

Lighting 6,262,001 33% 281 6,262,001 33% 281 6,262,001 32% 281

Appliances 2,357,113 12% 611 2,357,113 12% 611 2,357,113 12% 611

Electronics 1,698,313 9% 323 1,698,313 9% 323 1,698,313 9% 323

Pools 173,886 1% 93 173,886 1% 93 173,886 1% 93

HVAC

(Envelope) 2,540,140 13% 168 2,540,140 13% 168 2,540,140 13% 168

HVAC

(Equipment) 3,261,128 17% 1,201 3,261,128 17% 1,201 3,261,128 17% 1,201

Whole House 619,268 3% 375 619,26 8 3% 375 619,268 3% 375

New

Construction 40,928 0% 5 92,933 0% 10 287,244 1% 32

Total 19,163,895 100% 3,333 19,215,90

0 100% 3,340 19,410,211 100% 3,361

% of Sales 35.4% 35.5% 35.8%



### The economic potential calculations were made by incorp orating the various measure assumptions
(savings, cost, and useful life, etc. ) into the GDS cost

- effectiveness screening tool. 49 

### Any p rogrammatic

49 The cost

- effectiveness of a measure (used for determining the economic energy ef ficiency savings potential) is based on each
measure’s full savings potential, before any adjustments for interactive impacts. After identifying which measures passed

screening, we made an additional adjustment for interactive effects in order to finalize estimates of overall economic potential.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 62 

### costs (e.g., marketing, analysis, and administration) were ignored in the economic potential analysis in

order to screen whether energy efficient technologies were cost

- effective on their own merit prior to any
assistance or marketing endeavors from utilities or other organizations. For the economic potential
scenario, the study assumed 100% of all remaining cost

- effective measures eligible for installation were

instal led.



### 6.4 A CHIEVABLE 

### P OTENTIAL 

### S AVINGS IN THE RESIDENTIAL S ECTOR



### The achievable potential is a subset of the economic potential. The following two achievable potential

scenarios were examined in this study:

 Incentives set are 100% of measure incremental cost

 Incentives set at 56 % of measure incremental cost



### 6.4.1 E STIMATING 

### A CHIEVABLE 

### S AVINGS IN THE 

### R ESIDENTIAL 

### S ECTOR



### In the residential achievable potential scenario #1, achievable potential represents th e attainable savings
if incentives are set to 100% of measure incremental cost and the long

- term market penetration of high
efficiency electric appliances and equipment reaches 85 % . The 85% target achievable penetration over

the long

- term was assumed for a ll residential energy efficiency measures.

Once the total number of measures eligible to be installed over the 10

- year analysis time frame was

determined, one of four annual penetration curves (upward trending, bell curve, downward trending and

flat) w as assigned to each measure. In general, these curves were assigned based on the relative level of
the measure cost and current market acceptance. For example, a measure with low cost or high market
acceptance was assigned the downward trending curve, resu lting in higher levels of penetration in early
years, followed by a slow decline in incremental annual penetration during latter years. A measure with a
high install cost or low market acceptance was assigned the upward trending penetration curve. Early

re tirement measures and new construction measures were assigned a flat penetration curve. All four
curves were tailored to ensure that the full desired market penetration was reached by the end of the

analysis time frame (10 years out). For new measures not currently offered by existing programs, a “new”
annual penetration curve was assigned. New measures are defined as those for which there is currently
no incentive offered, and existing measures do currently have an incentive.

All of these diffusion curv es assume a starting annual penetration well below the existing measures and
does not achieve the targeted long

- term market penetration rate until the final year of the analysis period
Although this method simplifies what an adoption curve would look like in practice, it succeeds in
providing a concise and practical method for estimating achievable savings potential over a specific
period of time.

Finally, some energy efficiency measures possess a useful life less than the ten

- year analysis time frame.

Fo r example, behavioral energy efficiency programs with a two

- year life that are installed in 2013 expire
at the end of 2014. In this analysis, expiring measures were reintroduced the year after they expire. This
allows the electricity savings (and costs) to persist throughout the entire 10

- year study horizon. The
authors of this study acknowledge that measures reintroduced in later years may be impacted by future
improvements to building or appliance codes and standards yet assumes that future energy and dem and
savings remain consistent through similar improvements to high efficiency measure standards over time.



### 6.4.2 R ESIDENTIAL 

### A CHIEVABLE 

### S AVINGS 

### P OTENTIAL



### Table s 6

- 4 , 6

- 5, and 6

- 6 present the statewide cumulative annual energy savings by end

- use for the

resident ial sector for 2016, 2018 and 2023 for both achievable potential scenarios

.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 63 Table 6

- 4 : Statewide Achievable Potential in 2016

Achievable 1 Potential, Cumulative

Savings, 2016 Achievable 2 Potential, Cumul ative

Savings, 2016

End Use MWh Percent
of Total MW MWh Percent of

Total MW

Water Heating 297,078 10% 40 221,819 10% 29

Lighting 1,051,765 35% 47 798,330 36% 36

Appliances 361,681 12% 96 277,387 12% 72

Electronics 156,452 5% 26 89,391 4% 15

Pools 26 ,741 1% 14 20,870 1% 11

HVAC (Envelope) 376,762 13% 25 294,054 13% 20

HVAC (Equipment) 565,300 19% 295 430,188 19% 219

Whole House 139,976 5% 85 78,659 4% 48

New Construction 21,597 1% 2 16,370 1% 2

Total 2,997,353 100% 631 2,227,067 1 00% 452

% of Sales 5.5% 4.1%

Table 6

- 5 : Statewide Achievable Potential in 2018

Achievable 1 Potential, Cumulative

Savings, 2018 Achievable 2 Potential, Cumulative

Savings, 2018

End Use MWh Percent
of Tot al MW MWh Percent of

Total MW

Water Heating 557,807 10% 76 369,698 10% 49

Lighting 1,973,261 35% 89 1,339,673 36% 60

Appliances 673,014 12% 179 462,312 12% 121

Electronics 350,992 6% 57 186,530 5% 30

Pools 49,455 1% 27 34,783 1% 19

HVAC (Envelope) 6 96,849 12% 46 490,090 13% 33

HVAC (Equipment) 1,027,329 18% 506 693,951 19% 323

Whole House 239,061 4% 145 122,008 3% 74

New Construction 55,681 1% 6 37,169 1% 4

Total 5,623,449 100% 1130 3,736,214 100% 713

% of Sales 10.4% 6.9%P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 64 Table 6

- 6 : Statewide Achievable Potential in 2023

Achievable 1 Potential, Cumulative

Savings, 2023 Achievable 2 Potential, Cumulative

Savings, 2023

End Use MWh Percent
of Total MW MWh Percent of

Tot al MW

Water Heating 1,294,428 13% 175 716,223 13% 95

Lighting 1,891,089 18% 84 1,051,235 19% 47

Appliances 1,405,822 14% 400 751,633 13% 220

Electronics 899,080 9% 151 433,848 8% 73

Pools 120,418 1% 65 69,565 1% 37

HVAC (Envelope) 1,696,855 17% 113 980,181 18% 65

HVAC (Equipment) 2,229,290 22% 886 1,242,362 22% 470

Whole House 486,768 5% 295 230,379 4% 140

New Construction 215,222 2% 24 114,874 2% 13

Total 10,238,971 100% 2194 5,590,301 100% 1160

% of Sales 18.9% 10.3%



### Figures 6

- 4 and 6

- 5 are pie charts that show the Scenario #2 achievable potential energy efficiency
savings by end

- use and show the shifting flow of measure group share over time. In 2018, lighting is the

dominant share ( 36 %) of the total 2018 Scenario #1 achievable potential for the residential sector . By
2023, lighting energy efficiency savings (due to the effects of the EISA lighting provisions proposed to
go into effect beginning in 2020 that further increase the baseline efficien cy of lighting) ha ve decreased
to 19% of the achievable potential savings

.

Figure 6

- 4 : Residential Sector 2018 Achievable Potential Savings for Scenario #1 by End UseP ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 65 Figure 6

- 5 : Re sidential Sector 2023 Achievable Potential Savings for Scenario #1 by End Use



### Table 6

- 7 and Table 6

- 8 show the breakdown of achievable potential by end use for the residential sector
for the years 2013 to 2022 for the Achievable 1 and Achievable 2 poten tial scenarios

.

Table 6

- 7: Cumulative Annual Residential Energy Savings in Achievable Potential Scenario 1 by End Use for

Pennsylvania

Table 6

- 8: Cumulative Annual Residential Energy Savings in Achievable Potential Scenario 2 by End Use for

Pennsylvania



### Table 6

- 9 represents the total cost paid by the EDCs to realize 3

- year and 5

- year achievable savings

estimates under the Achievable 2 scenario . For the residential sector, the per

- MWh acquisition cost is

between $2 12/MWh to $217/MWh, increasing slightly over the longer time window.P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

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Page 66 Table 6

- 9: Residential 3

- Year and 5

- Year Acquisition Costs Under the Achievable 2 Scenario



### 6.4.3 A CHIEVABLE 

### P OTENTIAL 

### B ENEFITS 

### & C OSTS



### For the Scenario #1 achievable pote ntial estimates, it is assumed that EDCs will pay 100% of

incremental measure costs

. For Scenario #2 the incentive was assumed to be 56 % of the incremental

measure cost

.

In addition, an overall non

- incentive or administrative cost per first year kWh sav ed was assigned to each

measure in order to calculate the achievable cost

- effectiveness tests. The administrative cost per first year

kWh s aved used in this study is $.0813 per first year kWh saved. In all subsequent years, the
administrative cost per kWh was escalated by the EDCs projection of the annual rate of inflation in the

future. Table s 6

- 10 through 6

- 12 below provide the present value of benefits

, costs and the Total

Resource Cost Test ratios for the 3

- year, 5

- year, and 10

- year periods in the Achie vable Potential #1

scenario. Tables 6

- 13 through 6

- 15 provide the present value of benefits

, costs and the Total Resource

Cost Test ratios for the 3

- year, 5

- year, and 10

- year periods in the Achievable Potential #2 scenario.

Table 6

- 10 : 3

- Year TRC Ratios for Achievable Potential Scenario#1

– Residential Sector Only

TRC Benefits TRC Costs TRC

Ratio

PECO $ 363,430,526.05 $ 224,147,923.23 1.62

PPL $ 651,009,086.04 $ 296,299,034.29 2.20

WPP $ 207,648,861.67 $ 101,726,841.16 2.04

ME $ 179,215,613.91 $ 68,957,588.77 2.60

PE $ 156,744,345.95 $ 78 ,157,668.85 2.01

PP $ 47,721,639.17 $ 22,789,287.62 2.09

Duq. $ 170,523,210.54 $ 73,873,692.34 2.31

3

- Year

Period $ 1,776,293,283.33 $ 86 5,952,036.24 2.05

Table 6

- 11 : 5

- Year TRC Ratios for Achievable Potential Scenario# 1

– Residential Sector Only

TRC Benefits TRC Costs TRC

Ratio

PECO $ 670,162,952.07 $ 394,626,947.82 1.70

PPL $ 1,209,565,384.36 $ 527,381,239.42 2.29

WPP $ 390,772,959.73 $ 179,606,262.73 2.18

ME $ 344,660,804.42 $ 128,106,434.06 2.69

PE $ 299,331,311.69 $ 142,508,344.06 2.10P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 67 TRC Benefits TRC Costs TRC

Ratio

PP $ 91,396,348.98 $ 41,023,621.77 2.23

Duq. $ 305,668,434.05 $ 132,892,769.30 2.30

5

- Year

Period $ 3,311,558,195.30 $ 1,546,145,619.17 2.14

Table 6

- 12: 10

- Year TRC Ratios for Achievable Potential Scenario#1

– Residential Sector Only

TRC Benefits TRC Costs TRC

Ratio

PECO $ 1,414,835,983.56 $ 763,059,980.53 1.85

PPL $ 2,540,182,528.12 $ 1,067,287,225.66 2.38

WPP $ 865,662,059.27 $ 344,822,166.33 2.51

ME $ 813,242,024.70 $ 279,404 ,622.50 2.91

PE $ 672,483,135.66 $ 291,498,818.47 2.31

PP $ 205,589,891.72 $ 81,384,462.48 2.53

Duq. $ 596,578,163.35 $ 264,861,749.86 2.25

10

- Year

Period $ 7,108,573,786.37 $ 3,092,319,025.82 2.30

Table 6

- 13: 3

- Year TRC Ratios for Achievable Potential Scenario# 2

– Residential Sector Only

TRC Benefits TRC Costs TRC

Ratio

PECO $ 274,0 10,376.59 $ 170,632,179.14 1.61

PPL $ 490,589,466.79 $ 223,927,084.60 2.19

WPP $ 155,151,674.74 $ 75,698,040.31 2.05

ME $ 135,646,960. 83 $ 51,270,291.80 2.65

PE $ 118,748,110.90 $ 58,502,833.41 2.03

PP $ 36,131,521.39 $ 17,075,831.77 2.12

Duq. $ 128,840,971.38 $ 55,364,280.12 2.33

3

- Year

Period $ 1,339,119,082.61 $ 652,470,541.16 2.05

Table 6

- 14: 5

- Year TRC Ratios for Achievable Potential Scenario# 2

– Residential Sector Only

TRC Benefits TRC Costs TRC

Rat io

Duquesne $ 208,128,079.59 $ 89,726,141.92 2.32

MetEd $ 233,333,093.99 $ 85,804,449.57 2.72

Penelec $ 202,968,045.26 $ 96,267,731 .63 2.11

Penn

Power $ 61,862,423.67 $ 27,736,406.50 2.23

PPL $ 816,036,674.12 $ 359,073,882.29 2.27

PECO $ 453,867,223.57 $ 271,887, 041.08 1.67

West

Penn $ 260,687,268.99 $ 120,575,839.52 2.16

5

- Year

Period $

2,236,882,809.19 $

1,051,071,492.51 2.13P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 68 Table 6

- 15: 10

- Year TRC Ratios for Achievable Potential Scenario# 2

– Residential Sector Only

TRC Benefits TRC Costs TRC

Ratio

Duquesne $ 351,124,843.63 $ 154,427,341.99 2.27

MetEd $ 462,712,726.92 $ 159,782,853.31 2.90

Penelec $ 386,268,728.64 $ 169,420,137.36 2.28

Penn

Power $ 117,943,113.89 $ 47,553,443.01 2.48

PPL $ 1,467,016,032.07 $ 623,270,358.13 2.35

PECO $ 819,018,364.26 $ 456,229,677.30 1.80

West

Penn $ 492,360,940.36 $ 201,422,581.19 2.44

10

- Year

Period $4,096,444,750 $1,812,106,392 2.26



### 6.5 R ESIDENTIAL 

### S AVINGS BY 

### EDC

This next section s ummarizes each of the savings potential by time

- period, by scenario and by EDC.
Results are presented as cumulative annual energy (MWh) and demand (MW) savings and the percentage

of forecasted 2009/10 sales used in P hase 1 of Act 129.

Table 6

- 16 : 3

- Year Potential Savings by Scenar io and EDC (2016)

3

- Year Savings Technical

Potential Economic

Potential Achievable Potential

Scenario#1 Achievable Potential

Scenario#2

RESIDENTIAL

State

- wide

Energy (MWh) 21,847,632 19,163,895 2,997,35 3 2,227,067

% of 2010 MWh Sales 40.3% 35.4% 5.5% 4.1%

Summer MW 4,583.5 3,333.1 630.6 451.5

Duquesne Territory

Energy (MWh) 1,951,950 1,738,874 273,619 203,534

% of 2010 MWh Sales 46.6% 41.5% 6.5% 8.2%

Summer MW 438.1 281.3 51.2 37.7

Met

- Ed Territory

Energy (MWh) 2,015,625 1,802,165 288,988 214,558

% of 2010 MWh Sales 32.5% 29.5% 4.7% 3.5%

Summer MW 391.1 299.9 56.6 40.0

Penelec Territory

Energy (MWh) 1,780,538 1,618,293 257,169 192,379

% of 2010 MWh Sales 36.5% 33.1% 5. 3% 3.9%

Summer MW 350.2 300.9 55.3 41.0

Penn Power Territory

Energy (MWh) 579,802 521,073 81,325 60,683

% of 2010 MWh Sales 31.4% 28.4% 4.4% 3.3%

Summer MW 112.9 87.2 15.3 11.1

West Penn Power Territory

Energy (MWh) 2,584,323 2,302,869 36 6,589 270,787

% of 2010 MWh Sales 32.6% 29.0% 4.6% 3.4%

Summer MW 566.2 511.1 100.9 69.9

PECO Territory

Energy (MWh) 6,489,928 5,292,925 791,936 588,433

% of 2010 MWh Sales 46.3% 37.8% 5.7% 4.2%

Summer MW 1,530.5 897.2 150.7 110.9P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 69 3

- Year Savings Technical

Potential Economic

Potential Achievable Potential

Scenario#1 Achievable Potential

Scenario#2

PPL Territ ory Energy (MWh) 6,445,466 5,887,698 937,727 696,694

% of 2010 MWh Sales 42.6% 38.9% 6.2% 4.6%

Summer MW 1,194.4 955.5 200.5 140.8

* Achievable Scenario#1: Assumes 100% Incentives

* Achievable Scenario#2: Assumes 56 % in the residential sector

T able 6

- 17 : 5

- Year Potential Savings by Scenario and EDC (2018)

5

- Year Savings Technical

Potential Economic

Potential Achievable Potential

Scenario#1 Achievable Potential

Scenario#2

RESIDENTIAL

State

- wide

Energy (MWh) 22,049,980 19, 215,900 5,623,449 3,736,214

% of 2010 MWh Sales 40.7% 35.5% 10.4% 6.9%

Summer MW 4,615.9 3,339.6 1,130.1 712.5

Duquesne Territory

Energy (MWh) 1,951,950 1,738,874 512,646 341,480

% of 2010 MWh Sales 46.6% 41.5% 12.2% 9.8%

Summer MW 438.1 281. 3 91.1 59.6

Met

- Ed Territory

Energy (MWh) 2,063,489 1,829,901 548,069 364,312

% of 2010 MWh Sales 33.3% 29.5% 8.8% 5.9%

Summer MW 398.7 302.9 102.9 64.2

Penelec Territory

Energy (MWh) 1,804,715 1,634,442 485,344 325,182

% of 2010 MWh Sales 37.0% 33.5% 9.9% 6.7%

Summer MW 354.2 302.8 99.3 65.3

Penn Power Territory

Energy (MWh) 582,936 523,129 152,960 102,224

% of 2010 MWh Sales 31.6% 28.4% 8.3% 5.5%

Summer MW 113.4 87.4 27.7 18.0

West Penn Power Territory

Energy (MWh) 2,602,440 2,308,932 688,185 453,677

% of 2010 MWh Sales 32.8% 29.1% 8.7% 5.7%

Summer MW 569.5 511.8 183.1 111.6

PECO Territory

Energy (MWh) 6,543,125 5,292,925 1,488,047 989,465

% of 2010 MWh Sales 46.7% 37.8% 10.6% 7.1%

Summer MW 1,540.1 89 7.9 270.4 177.1

PPL Territory

Energy (MWh) 6,501,325 5,887,698 1,748,198 1,159,873

% of 2010 MWh Sales 43.0% 38.9% 11.5% 7.7%

Summer MW 1,201.9 955.5 355.7 216.8

* Achievable Scenario#1: Assumes 100% Incentives

* Achievable Scenario#2: Assumes 5 6 % in the residential sector

Table 6

- 18 : 10

- Year Potential Savings by Scenario and EDC (2018)

10

- Year Savings Technical

Potential Economic

Potential Achievable Potential

Scenario#1 Achievable Potential

Scenario#2

RESIDENTIAL

State

- wid e Energy (MWh) 22,824,765 19,410,211 10,238,971 5,590,301P ENNSYL VANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 70 10

- Year Savings Technical

Potential Economic

Potential Achievable Potential

Scenario#1 Achievable Potential

Scenario#2

% of 2010 MWh Sales 42.1% 35.8% 18.9% 10.3%

Summer MW 4,740.3 3,361.0 2,193.6 1,160.4

Duquesne Territory

Energy (MWh) 1,951,950 1,738,874 893,495 485,914

% of 2010 MWh Sales 46.6% 41.5% 21.3% 10.9%

Summer MW 438.1 281.3 179.5 95.7

Met

- Ed Territory

Energy (MWh) 2,250,555 1,938,297 1,024,779 559,559

% of 2010 MWh Sales 36.3% 31.3% 16.5% 9.0%

Summer MW 428.2 314.3 205.5 109.3

Penelec Territory

Energy (MWh) 1,893, 308 1,693,626 846,556 463,659

% of 2010 MWh Sales 38.8% 34.7% 17.3% 9.5%

Summer MW 368.9 309.8 201.9 108.6

Penn Power Territory

Energy (MWh) 594,286 530,556 271,740 148,893

% of 2010 MWh Sales 32.2% 28.8% 14.7% 8.1%

Summer MW 115.3 88.2 57.1 30.7

West Penn Power Territory

Energy (MWh) 2,660,100 2,328,236 1,228,644 666,495

% of 2010 MWh Sales 33.5% 29.4% 15.5% 8.4%

Summer MW 579.9 514.0 352.3 182.7

PECO Territory

Energy (MWh) 6,770,186 5,292,925 2,685,478 1,465,547

% of 2010 M Wh Sales 48.3% 37.8% 19.2% 10.5%

Summer MW 1,580.7 897.9 552.5 296.4

PPL Territory

Energy (MWh) 6,704,380 5,887,698 3,288,279 1,800,232

% of 2010 MWh Sales 44.3% 38.9% 21.7% 11.9%

Summer MW 1,229.1 955.5 644.7 337.1

* Achievable Scenario#1: As sumes 100% Incentives

* Achievable Scenario#2: Assumes 56 % in the residential sectorP ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 71 

## 7 C OMMERCIAL 

## & I NDUSTRIAL 

## E NERGY 

## E FFICIENCY 

## P OTENTIAL 

## E STIMATES



### This section provides an overview of findings for the entire non

- residential sector in Pennsylvania. The

sec tion presents findings for technical, economic, achievable potential energy savings for each sector

–

non

- residential, commercial and industrial. A summary table of findings by time horizon, sector,
scenario, and EDC is presented at the end of this section

.



### 7.1 N ON



### - R ESIDENTIAL 

### E NERGY 

### E FFICIENCY 

### P OTENTIAL



### This section presents estimates for technical, economic, and achievable potential for the non

- residential
sector (commercial and industrial combined). Results are presented at the state level. Each of the tab les
in the technical, economic and achievable sections present the respective potential for efficiency savings
expressed as cumulative savings (MWh), percentage of sales, and dema nd (MW). Data is provided for a

3, 5, and 10

- year horizon for the entire stat e.

This energy efficiency potential study considers the impacts of the Energy and Independence and
Security Act (EISA) as an improving code standard for the non

- residential sector. EISA improves the
baseline efficiency of compact fluorescent lamps (CFL) , general service fluorescent lamps (GSFL), high
intensity discharge (HID) lamps and ballasts and motors, all applicable in the non

- residential sector. The
SWE analyzed the impacts of EISA when benchmarking the results of this study against historical PA

A CT 129 program performance, national energy efficiency program performance and contemporary
potential studies. The SWE found the result of this potential study in the non

- residential sector are
approximately 23% lower due to EISA against the expected poten tials without EISA.



### 7.1.1 S UMMARY OF 

### F INDINGS



### Figure 7

- 1 illustrates the estimated savings potential for each of the four scenarios included in this study

for all seven EDCs combine d ( statewide ).

Figure 7

- 1 : Su mmary of Non

- Residential Energy Efficiency Potential as a % of 2010 Sales Forecasts

– StatewideP ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 72 

### Expressed as the cumulative 3

- year savings, the theoretical technical savings potential is 8.0 % of Act 129

Phase 1 forecasted 2009/10 sector sales 50 

### . 3

- year a chievable potential scenario 2 savings is 1.9% of sector

sales. The 5

- year savings tech nical savings potential is 13.3 % of sector sales

. Economic potential is just

under 11 .0 % of sales, achievable potential scenario 1 (100% incentive levels) is 6. 9 %, while a chievable

potential scenario 2 is estimated to be 3.2 % of sector sales based on an incentive level of just over 34

percent. 51 

### 10

- year technical potential is estimated at 24.3% of 2009/10 forecasted sector sales.

Table 7

- 1 shows the savings from the Ins titutional sector as a percentage of total non

- residential sales for

the four scenarios that were modeled. Institu t ional savings account for less than 1% of 3

- year savings in
the technical scenario, and slightly over 1% of 5

- year savings.

Table 7

- 1 : Institutional Savings as a Percentage of Non

- Residential Sales



### 7.1.2 T ECHNICAL 

### P OTENTIAL



### Technical potential represents the quantification of savings that can be realized if energy

- efficiency
measures passing the qual itative screening are applied in all feasible instances, regardless of cost. Table 7

- 2 shows that it is technically feasible to save nearly 7.5 million MWh in the non

- residential sector

between 2013 to 2016

, and approximately 12. 4 million MWh during the 5 year period from 2013 to 201 8

acro ss the state, representing just fewer than 8% of 3

- year non

- residential sales, and 13.3 % of 5

- year

non

- residential sales. Lighting represents the majority of the potential at more than 40% of savings, while
cooking equipme nt represents the smallest share with less than 1 percent. Ten

- year technical potent ial is
estimated to be just over 22 million MWh (or 2 4.3 % of sector sales) across the state. The Technical
scenario also suggests a 3 year reduction in statewide load of 99 0 MW, a 5 year reduction of 1,662 MW,

and 3 ,099 MW over a 10

- year horizon.

50 Phase 1 sales represent the 2009/10 forecasted sales number used to benchmark savings targets against. For 2009/2010 this

statewide number was 146,661,800 MWh.

51 The Achievable Potential Scenario 2 represents a situation where the EDCs incentivize programs through a reimbursement of

34.24% of customer costs.P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 73 Table 7

- 2 : Statewide Non

- Residential Sector Technical Potential kWh Savings By End Use



### 7.1.3 E CONOMIC 

### P OTENTIAL



### Economic Po tential is a subset of technical potential, where only measures that are cost

- effective from
the Total Resource Cost (TRC) perspective pass the economic screen and are considered when

calculating savings potential.

Table 7

- 3 shows that it is economically feasib le to save slightly more than 6 million MWh during the 3
year period from 2013 to 2016, and more than 10 million MW h during the 5 year period from 2013 to

201 8, representing 6. 6 % and 1 1.0 % of non

- residential sales respectively

. Lighting and motor savings
measures again make up a majority of the savings. Ten

- year economic potential is estimated at

approximately 19 million MWH (or 20. 8 % of sector sales) across the state. The Economic scenario also

su ggests a load reduction of between 809 and 2,621 MW, depending on the timeframe

Table 7

- 3 : Statewide Non

- Residential Sector Economic Potential kWh Savings By End Use



### 7.1.4 A CHIEVABLE 

### P OTENTIAL



### Achievable Potenti al is an estimate of energy savings that can feasibly be achieved through program and
policy interventions. This study estimated theoretically achievable potential for two policy intervention
scenarios corresponding to varying incentive levels provided to end

- use consumers. Achievable potential

scenario 1 (Achievable 1) assumed an incentive level of 100% of incremental costs to C&I customers,

where achievable potential scenario 2 (Achievable 2) assumed an incentive level of 34.2% of incremental

costs to C&I customers, similar to current program level funding adjusted to account for increasing costs
of energy saving measures over time.P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 74 

### Table 7

- 4 and Table 7

- 5 show the estimated savings for both achievable scenarios over a 3 and 5 year

horizons. Under the Achievable 1 scenario i t is feasible to save 3.3 million MWh during the 3 year period

from 2013 to 2016 ac ross the state, representing 3.6% of sector sales. Under the Achievable 2 scenario it

is feasible to save just under 1.8 million MWh based on the lower incentive level. The Achievable 1
scenario also suggests a 3 year reduction in demand of 429 MW across the state, with the Achievable 2
scenario estimating a demand reduction of 237 MW. The 5

- year savings for achievable potential scenario

is 6. 9 % and 3.2% of sector sales for achievable 1 and achievable 2 respectively

.

Table 7

- 4 : Non

- Residential Achievable Savings Potential in 2016

Table 7

- 5 : Non

- Residential Achievable Savings Potential in 2018



### Table 7

- 6 shows the estimated savings for both scenarios over a 10

- year horizon. Under the Achievable

1 scenario it is feasible to save nearly 14.4 million MWh between 2013 and 2023 which represents 15.6%
of sector sales. Assuming a more realistic incentive level, the Achievable 2 scenario estimates a savings of

5.6 million MWh over a 10

- year horizon. The Achievable 1 scenario also suggests a 5 year reduction in

demand of 1,917 MW across the state, with the Achievable 2 scenario estimating a demand reduction of

767 MW over the 10

- year horizon.P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 75 Table 7

- 6 : Non

- Residential Achievable Savings Potential in 2023



### Figure 7

- 2 show s the estimated 5

- year cumulative efficiency savings potential broken out by end use

across the entire non

- residential sector. The lighting end use shows the largest potentia l for savings by a
wide margin at just under 1.2 million MWh, or 40.3% of total savings

.

Figure 7

- 2 : Non

- Residential Sector 2018 Achievable Potential Savings for Scenario # 2 by End Use



### Figure 7

- 3 shows t he breakdown of estimated savings in 2018 by vintage for the Achievable 1 scenario. The vast majority of savings come from existing/turnover measures, meaning energy efficient equipment

is installed in replacement of existing equipment that has failed, wit h less than 2% of savings potential
coming from new construction.P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 76 Figure 7

- 3 : Non

- Residential Achievable 1 Savings in 2018 by Vintage



### Figure 7

- 4 shows a breakdown of estimated 2 018 savings by vintage for the Achievable 2 scenario. In
this scenario, there is slightly more savings potential for new construction.

Figure 7

- 4 : Non

- Residential Achievable 2 Savings in 2018 by Vintage



### Table 7

- 7 and Table 7

- 8 show cumulative energy savings for both achievable scenarios for each year

across the 10

- year horizon for the study, broken out by end use.P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 77 Table 7

- 7 : Cumulative Annual Non

- Residential Energy Savings in Achievable Potential Scenario 1 by End Use

for Pennsylvania

Table 7

- 8 : Cumulative Annual Non

- Residential Energy Savings in Achievabl e Potential Scenario 2 by End Use

for Pennsylvania



### Table 7

- 9 represents the total cost projected to be paid by the EDCs to realize the 3 and 5

- year achievable savings under the Achievable 2 scenario . For the non

- residential sec tor the projected
statewide cost is approximately $376 and $ 645 million respectively, or $212/MWh at 3 years and
$217/MWh at 5 years

.

Table 7

- 9 : Non

- Residential 3

- Year and 5

- Year Acquisition Costs Under the A chievable 2 Scenario



### 7.1.5 A CHIEVABLE 

### P OTENTIAL 

### B ENEFITS AND 

### C OSTS



### The total resource cost (TRC) measures the net benefits of the energy efficiency program for a region or
service area as a whole. Costs included in the TRC are costs to purchase and install th e energy efficiency
measure and overhead costs of running the energy efficiency program. The benefits included are the
avoided costs of energy and capacity. Tables 7

- 10 through 7

- 12 below provide the present value of

benefits and costs of the Total Resour ce Cost Test for the 3

- year, 5

- year, and 10

- year periods in the

Achievable Potential #1 scenario. Tables 7

- 13 through 7

- 15 provide the present value of benefits and

costs of the Total Resource Cost Test for the 3

- year, 5

- year, and 10

- year periods in the Ac hievable

Potential #2 scenario.P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 78 Table 7

- 10 : 3

- Year TRC Ratios for Achievable Potential Scenario#1

– Non

- Residential Sector Only

TRC Benefits TRC Costs TRC

Ratio

Duquesne $274,525,024 $199,460,081 1.38

Met

- Ed $226,148,514 $138,249,695 1.64

Penelec $257,112,625 $151,888,724 1.69

Penn Power $68,128,487 $42,604,172 1.60

PPL $772,031,490 $397,405,588 1.94

PECO $543,291,228 $420,198,809 1.29

WPP $319,119,149 $200,225,143 1.59

3

- Year Period $ 2,460,356, 517.03 $ 1,550,032,211.84 1.59

Table 7

- 11 : 5

- Year TRC Ratios for Achievable Potential Scenario#1

– Non

- Residential Sector Only

TRC Benefits TRC Costs TRC

Ratio

Duquesne $555,213,848 $390,802,390 1.42

Met

- Ed $479,367,629 $270,530,609 1.77

Penelec $542,647,032 $296,736,385 1.83

Penn Power $143,876,791 $82,919,898 1.74

PPL $1,548,190,275 $780,419,522 1.98

PECO $1,091,788,722 $812,314,317 1.34

WPP $676,990,697 $391,951,364 1.73

5

- Year Period $ 5,038, 074,995.17 $ 3,025,674,486.11 1.67

Table 7

- 12 : 10

- Year TRC Ratios for Achievable Potential Scenario#1

– Non

- Residential Sector Only

TRC Benefits TRC Costs TRC

Ratio

Duquesne $1,571,364,463 $1,047,992,366 1 .50

Met

- Ed $1,425,834,957 $684,616,060 2.08

Penelec $1,584,431,717 $741,142,049 2.14

Penn

Power $428,893,095 $210,158,261 2.04

PPL $4,087,903,096 $2,015,558,859 2.03

PECO $2,789,652,316 $1,968,817,033 1.42

WPP $2,029,988,159 $998,562,189 2.03

10

- Yea r

Period $13,918,067,802.87 $7,666,846,815.75 1.82P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 79 Table 7

- 13 : 3

- Year TRC Ratios for Achievable Potential Scenario# 2

– Non

- Residential Sector Only

TRC Benefits TRC Costs TRC

Ratio

Duquesne $141,468, 982 $101,210,454 1.40

Met

- Ed $118,992,526 $74,249,438 1.60

Penelec $134,596,064 $81,613,963 1.65

Penn

Power $35,573,735 $22,799,315 1.56

PPL $405,141,806 $212,135,256 1.91

PECO $286,242,111 $217,665,200 1.32

WPP $163,820,632 $106,314,742 1.54

3

- Year

Period $ 1,285,835,857 $ 815,988,367 1.5 8

Table 7

- 14 : 5

- Year TRC Ratios for Achievable Potential Scenario# 2

– Non

- Residential Sector Only

TRC Benefits TRC Costs TRC

Ratio

Duquesne $251,772,501 $176,076,3 70 1.43

Met

- Ed $219,224,671 $126,899,896 1.73

Penelec $247,302,408 $139,193,340 1.78

Penn

Power $65,471,331 $38,820,834 1.69

PPL $711,803,696 $364,138,937 1.95

PECO $503,509,412 $372,214,656 1.35

WPP $304,425,540 $182,328,459 1.67

5

- Year

Period $ 2, 303,509,559.93 $1,399,672,492.15 1.65

Table 7

- 15 : 10

- Year TRC Ratios for Achievable Potential Scenario# 2

– Non

- Residential Sector Only

TRC Benefits TRC Costs TRC

Ratio

Duquesne $601,460,452 $402,235,625 1 .50

Met

- Ed $544,931,402 $269,398,404 2.02

Penelec $605,811,334 $292,126,088 2.07

Penn

Power $163,553,803 $82,607,181 1.98

PPL $1,585,793,435 $789,185,792 2.01

PECO $1,087,793,577 $770,201,740 1.41

WPP $770,032,609 $391,080,770 1.97

10

- Year

Period $ 5,359,376,612.11 $ 2,996,835,600.79 1.79



### 7.2 C OMMERCIAL 

### E NERGY 

### E FFICIENCY 

### P OTENTIAL



### This section presents estimates for technical, economic, and achievable potential for the commercial
sector. Results are presented at the state level, with a summary of EDC s avings at the end. Each of the
tables in the technical, economic and achievable sections present the respective potential for efficiency savings expressed as cumulative sales (MWh), percentage of the forecasted 2009/10 sales used in Phase 1

of Act 129, and demand (MW). Data is provided for a 3

- year, 5

- year, and 10

- year horizons for the entire

state.P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 80 

### 7.2.1 S UMMARY OF 

### F INDINGS



### Figure 7

- 5 illustrates the estimated commercial energy savings potential for each of the four scenarios

included in this study for all seven EDCs combined (i.e. the state). Ten

- year technical potential savings

are estimated at 30. 4 % of 2009/10 sector sales. Expressed as the cumulative 5

- year savings, the
theoretical technical savings potential is 17. 2 % of Act 129 Phase 1 forecasted 2009/10 commercial sector

sales. Economic potential is estimated at 13. 5 % of sector sales, while achievable 2 savings potential is at

3.9% of sector sales. 3

- year achievable 2 savings potential is 2. 4 % of sector sales.

Achievable potential sc enario 1 estimates an 85% long

- term target market penetration, and models an
aggressive scenario in which consumers would receive a financial incentive equal to 100% of the measure

cost. Achievable potential scenario 2 (current incentive levels) assumes th at monetary incentives
provided to consumers are equal to 34.2% of incremental costs of energy

- efficiency improvements.

Figure 7

- 5 : Summary of Commercial Energy Efficiency Potential as a % of 2010 Sales Fore casts

– Statewide



### 7.2.2 T ECHNICAL 

### P OTENTIAL



### Table 7

- 16 shows that it is technically feasible to save over 5.7 million MWh during the 3 year period

from 2013 to 2016, and more than 9.6 million MWh during the 5 year period from 2013 to 2018 acro ss

the state. Te n

- year technical potent ial is estimated to be almost 17 million MWh (or 30. 4 % of sector sales) across the state. This technically feasible scenario also shows a 3

- year demand reduction of 802

MW in the commercial sector, a 5

- year demand reduction of 1,347 MW, and a reduction of 2,469 MW

over a 10

- year horizon.P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 81 Table 7

- 16 : Statewide Commercial Sector Technical Potential kWh Savings By End Use



### 7.2.3 E CONOMIC 

### P OTENTIAL



### Table 7

- 17 shows that it is economically f e asible to save approximately 4.5 million MWh during the 3
year period from 2013 to 2016, 7.5 million MWh during the 5 year period fro m 2013 to 2018 across the

state. Ten

- year economic potential is estimated of 13.8 million MWh (or 24.7 % of sector sales) a cross

the state. This economically feasible scenario also shows a 3

- year demand reduction of 629 MW, a 5

- year demand reduction of 1,055 MW for the Commercial sector and a reduction of 2,006 MW over a 10

- year

horizon.

Table 7

- 17 : Statewide Commercial Sector Economic Potential kWh Savings By End Use



### 7.2.4 A CHIEVABLE 

### P OTENTIAL



### Achievable Potential estimates energy savings that can feasibly be achieved through program and policy
interventions. This study estimated th eoretically achievable potential for two policy intervention
scenarios corresponding to varying incentive levels provided to end

- use consumers. Achievable potential

scenario 1 (Achievable 1) assumed an incentive level of 100% of incremental costs to C&I cu stomers,

where achievable potential scenario 2 (Achievable 2) assumed an incentive level of 34.2% of incremental
costs to C&I customers, similar to current program level funding adjusted to account for increasing costs
of energy saving measures over time.

Table 7

- 18 and Table 7

- 19 show the estimated savings for both scenarios over a 3 and 5

- year horizon.

Under the Achievable 1 scenario i t is feasible to save almost 2.5 million MWh during the 3 year period

fr om 2013 to 2016 in the commercial sector, represe nting 4.4% of sector sales. Under the Achievable 2

scenario it is feasible to save 1.3 million MWh based on the lower incentive level. Table 7

- 19 suggests a potential 5 year reduction in demand of 640 MW for the sector, with the Achievable 2 scenario

estim ating a demand reduction of 309 MW.P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 82 Table 7

- 18 : Commercial Achi evable Savings Potential in 2016

Table 7

- 19 : Commercial Achi evable Savings Potential in 2018



### Table 7

- 20 s hows the estimated savings for both scenarios over a 10

- year horizon. Under the Achievable

1 scenario it is feasible to save 10.4 million MWh between 2013 and 2023 in the commercial sector.
Assuming a more realistic incentive level, the Achieva ble 2 scenario estimates a savings of just over 4

million MWh over a 10

- year horizon. The Achievable 1 scenario also suggests a 5 year reduction in

demand of 1,484 MW for the sector, with the Achievable 2 scenario estimating a demand reduction of

587 MW ov er the 10

- year horizon.P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 8 3 Table 7

- 20 : Commercial Achi evable Savings Potential in 2023



### Figure 7

- 6 shows a breakdown of the estimated cumulative 5

- year efficiency savings potenti al, broken
out by end use. The lighting end use shows the largest potential for savings by a wide margin at more

than 1 million MWh, or around 48.3% of all A chievable 2 saving s.

Figure 7

- 6 : Commercial Sect or 2018 Achievable Potential Savings for Scenario #1 by End Use



### Table 7

- 21 and Figure 7

- 7 show a breakdown of the estimated cumulative 3 and 5

- year efficiency savings
potential, broken out by commercial segment. The office segment s hows the most potential for savings,

representing around 26.6% of all A chievable 2 savings.P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 84 Table 7

- 21 : Commercial Achievable 2 Scenario Savings Potential by Segment

Figure 7

- 7 : 5

- Year Commercial Achievable 2 Cumulative Savings Distribution by Segment (2018)



### Table 7

- 22 represents the total cost paid by the EDCs to realize 3

- year and 5

- year achievable savings

estimates under the Achievable 2 scenario

. For the commercial sector, the per

- MWh acquisition cost is between $212/MWh to $217/MWh, increasing slightly over the longer time window.P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 85 Table 7

- 22 : Commercial 3

- Year and 5

- Year Acquisition Costs Und er the Achievable 2 Scenario



### 7.3 I NDUSTRIAL 

### E NERGY 

### E FFICIENCY 

### P OTENTIAL



### This section presents estimates for technical, economic, and achievable potential for the industrial sector

. Results are presented at the state level , with a summary of EDC savings at the end . Each of the tables in
the technical, economic and achievable sections present the respective potential for efficiency savings
expressed as cumulative sales (MWh), percentage of the forecasted 2009/10 sales used in Phase 1 of Act

129 , and demand (M

W). Data is provided for a 3, 5 and 10

- year horizon for the entire state.



### 7.3.1 S UMMARY OF 

### F INDINGS



### Figure 7

- 8 illustrates the estimated savings potential for each of the four scenarios included in this study
for all seven EDCs combine (i.e. the state). Expre ssed as the cumulative 3

- year, 5

- year, and 10

- year savings, the theoretical te chnical savings potential is between 4. 3 % and 1 5.0 % of forecasted 2009/10

sector sales used in Act 129 Phase 1 targets

. Five

- year Ac hievable 2 savings p otential is estimated to b e

2.1 % of sector sales.

Figure 7

- 8 : Summary of Industrial Energy Efficiency Potential as a % of 2010 Sales Forecasts

– StatewideP ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 86 

### 7.3.2 T ECHNICAL 

### P OTENTIAL



### Table 7

- 23 shows that it is technicall y feasible to save just over 1.6 million MWh for the 3

- year period
from 2013 to 2016, and slightly more than 2.7 million MWh during the 5 year period from 2013 to 201 8

ac ross the state, representing 7. 5 % of non

- residential sales. The 10

- year technical potential is estimated
to be just under 5.5 million MWh (or 1 5.0 % of sector sales) across the state. The t echnical scenario
estimates demand reductions between 187 and 630 MW, depending on the timeframe.

Table 7

- 23 : Statewide Indu strial Sector Technical Potential kWh Savings By End Use



### 7.3.3 E CONOMIC 

### P OTENTIAL



### Table 7

- 24 shows that it is economically feasible to save just over 1.5 million MWh and 2.6 million MWh
during the 3 and 5 year periods respectively, representing 4. 3 % and 7

. 2 % of sector sales respectively

. The

10

- year economic potential is estimat ed of 5.3 million MWh (or 14 .6 % of sector sales) across the state.
The estimated demand reduction over 5 years is 304 MW, while the 10

- year horizon estimates a

reduction of 615 MW in en ergy demand.

Table 7

- 24 : Statewide Industrial Sector Economic Potential kWh Savings By End Use



### 7.3.4 A CHIEVABLE 

### P OTENTIAL



### Achievable Potential estimates energy savings that can feasibly be achieved through prog ram and policy
interventions. This study estimated theoretically achievable potential for two policy intervention
scenarios corresponding to varying incentive levels provided to end

- use consumers. Achievable potential

scenario 1 (Achievable 1) assumed an i ncentive level of 100% of incremental costs to C&I customers,

where achievable potential scenario 2 (Achievable 2) assumed an incentive level of 34.2% of incremental
costs to C&I customers, similar to current program level funding adjusted to account for i ncreasing costs
of energy saving measures over time.

Table 7

- 25 and Table 7

- 26 show the estimated savings for both scenarios over 3

- year and 5

- year

horizons. The 3

- year achievable 2 savings potential is 1. 3 % of sector sales. Under the Achievable 1

scenari o i t is feasible to save almost 1.7 million MWh during the 5 year period fr om 2013 to 2018 in the
industrial sector, representing 4.5% of sector sales. Under the Achievable 2 scenario it is feasible to save

766,283 MWh based on the lower incentive level. T he Achievable 1 scenario also suggests a 5 yearP ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 87 

### reduction in demand of 190 MW for the sector, with the Achievable 2 scenario estimating a demand

reduction of 89 MW.

Table 7

- 25 : Industrial Achievable Savings P otential in 2016

Table 7

- 26 : Industrial Achievable Savings Potential in 2018



### Table 7

- 27 shows the estimated savings for both scenarios over a 10

- year horizon. Under the Achievable

1 scenario it is feasib le to save just under 4 million MWh between 2013 and 2023 in the industrial sector.
Assuming a more realistic incentive level, the Achievable 2 scenario estimates a savings of just over 1.5

million MWh over a 10

- year horizon. The Achievable 1 scenario also suggests a 10 year reduction in

demand of 433 MW for the sector, with the Achievable 2 scenario estimating a demand reduction of 180

MW over the 10

- year horizon.

Table 7

- 27 : Industrial Achievable Savings Pot ential in 2023P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 88 

### Figure 7

- 9 show s the estimated cumulative efficiency savings potential broken out by industrial end use

. Motor measures make up the majority of the savings, representing nearly half of the savings potential in

the in dustrial sector.

Figure 7

- 9 : Industrial Sector 2018 Achievable Potential Savings for Scenario # 2 by End Use



### Table 7

- 28 and Figure 7

- 10 show the estimated cumulative 3

- year and 5

- year efficiency savings p otential
broken out by industrial segment. The metal and paper manufacturing segments show the most potential

for sav ings , representing just over 50% of the savings potential in the industrial sector.

Table 7

- 28 : Industrial Achievable Potential Scenario 2 Savings by SegmentP ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 89 Figure 7

- 10 : Industrial Achievable 2, 5

- Year Cumulative Savings Distribution by Segment



### Table 7

- 29 represents the total cost paid by the utilities to achi e ve the potential 3 and 5

- year savings

under the Achievable 2 scenario . For the industrial sector the cost per MWh is between $211 and $215/MWh depending on period.

Table 7

- 29 : Indust rial 5

- Year Acquisition Costs Under The Achievable 2 Scenario by EDC



### 7.4 E NERGY 

### E FFICIENCY 

### M EASURES 

### E XAMINED



### For the non

- residential sector, there were 262 total measure included in the potential energy savings

analysis. Of these 262 measures, 95 were consi dered in the industrial model and 167 were included in the
commercial model. The 262 is a count of the individual measures included, many measures had overlap
between different segments and were counted as one measure 52



### .

Table 7

- 30 provides a brief descr iption of the types of measures included for each end use in the

commercial model. Table 7

- 31 provides a brief description of the types of measures included for each

end use in the industrial model. The list of measures was developed based on a review of t he
Pennsylvania TRM and measures found in other non

- residential potential studies. Measure data includes
incremental costs, energy and demand savings, and measure life with persistence discounting.

52 The total number of measures across all segments was 2062, 424 in the industrial sector and 1638 in the commercial sector.

This accounted for measures tha t were applicable to multiple segments within the model.P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 90 Table 7

- 30 : Measures and Programs Included in the Commercial Sector Analysis

End Use Type End Use Description Measures/Programs Included

Chiller Chiller Improvements Duct Improvements

Re

- commissioning

Energy Management System

Efficient Chiller Equipment

Insulation Upgrades

Economizers

Cooking Cooking Equipment Improvements Efficient Cooking Equipment

Fluoresce nt Fluorescent Lighting Improvements High Efficiency Fixtures

Lighting Controls

Ballast Replacement

Premium Efficiency T8

LED Retrofit Tubes

Heating Heating System Improvements Thermostat Upgrades

Insulation Upgrades

Heating Equipment Upgrades

Re

- commissioning

HID High Intensity Lighting

Improvements High Efficiency Fixtures

Fixture Retrofits

Lighting Controls

Incandescent Incandescent Lighting Improvements LED Retrofits

CFL Retrofits

Lighting Controls

High Efficiency Fixtures

Large Appliances Appliance Upgrades High Efficiency Equipment

Motors Motor Improvements Ultra

- PE Motors

Variable Frequency Drives

Motor Rewinds

Air Compressor System Improvements

Mot or Downsizing

Office Equipment Office Equipment Upgrades High Efficiency Equipment

Other Miscellaneous Equipment Upgrades Transformers

Industrial Motor Improvement

Packaged DX Cooling System Upgrades Cooling Equipment Upgrades

Improved Controls

Buildi ng Shell Upgrades

Economizers

Re

- Commissioning

Refrigeration Refrigeration Improvements Anti

- Sweat Heat Controls

Upgrades Motors

High Efficiency Equipment

Variable Frequency Drives on Motors

Efficient Lighting

Signage Signage Improvements Improved Street Lighting

LED Signs

Water Heating Water Heating Improvements High Efficiency Equipment

Low Flow Equipment

Heat Recovery Units

Solar Water HeatersP ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 91 Table 7

- 31 : Measures and Programs Included in the Industria l Sector Analysis

End Use Type End Use Description Measures/Programs Included

HVAC Heating/Cooling/Ventilation

Equipment Dehumidifiers

Equipment Upgrades

Heat Reclaimers

Heat Recovery Ventilators

Improved Controls

Infrared Films

Prog. Ventilation Controll ers Recommissioning

Scroll Compressors

Lighting Indoor/Outdoor Lighting

Equipment Efficient Lighting Equipment

High Bay Lighting Equipment

Lighting Controls

Motors Motor Equipment and System

Upgrades Air Compressor Improvemen ts Efficient Pump Systems

Fa n System Improvements

Improved Fan Controls

Motor Controllers

Motor Re

- Winds

Pump System Controls

Ultra

- PE Motors

Variable Frequency Drives

Other Miscellaneous System Upgrades Agricultural Equipment

Building Improvements

Energy Management Systems

Manufact uring Equipment

Transformers

Process Cooling Cooling and Refrigeration

Upgrades Chiller Improvements

Cooling System Tune

- ups Improved Controls

Refrigeration Equipment

Improvements

Process EC Electro Chemical Upgrades Electro

- C hemical Equipment Upgrades

Process Heating Heating System Upgrades Efficient Heating Equipment

Improved Heating Controls

Heating System Maintenance



### 7.5 N ON



### - R ESIDENTIAL 

### S AVINGS BY 

### EDC

This next section summarizes each of the savings potential by time

- period, by sector, by scenario and by
EDC. Results are presented as cumulative annual energy (MWh) and demand (MW) savings and the percentage of forecasted 2009/10 sales used in P hase 1 of Act 129.

Table 7

- 32 : 3

- Year Potential Savings by Sec tor, Scenario, and EDC (2016)

3

- Year Savings Technical

Potential Economic

Potential Achievable Potential

Scenario#1 Achievable Potential

Scenario#2

NON

- RESIDENTIAL

State

- wide

Energy (MWh) 7,353,972 6,060,971 3,342,188 1,772,893

% of 2010 MWh Sa

les 8.0% 6.6% 3.6% 1.9%

Summer MW 1,444.7 1,248.1 788.3 365.1

Duquesne TerritoryP ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 92 3

- Year Savings Technical

Potential Economic

Potential Achievable Potential

Scenario#1 Achievable Potential

Scenario#2

Energy (MWh) 902,102 716,031 400,184 209,446

% of 2010 MWh Sales 9.1% 7.2% 4.0% 2.1%

Summer MW 157.1 128.4 75.1 37.6

Met

- Ed Territory

Energy (MWh) 667,505 559,918 306,278 163,781

% of 2010 MWh Sales 7.7% 6.5% 3.5% 1.9%

Summer MW 134.0 118.4 78.4 34.6

Penelec Territory

Energy (MWh) 718,396 611,230 336,198 178,791

% of 2010 MWh Sales 7.5% 6.4% 3.5% 1.9%

Summer MW 147.9 133.0 88.9 38.9

Penn Power Territory

Energy (MWh) 202,800 169,964 94,125 49,716

% of 2010 MWh Sales 6.9% 5.8% 3.2% 1.7%

Summer MW 48.2 42.7 29.0 12.5

West Penn Power Territory

Energy (MWh) 940,858 793,484 443,723 232,102

% of 2010 MWh Sales 7.2% 6.1% 3.4% 1.8%

Summer MW 218.1 184.5 120.5 54.0

PECO Territory

Energy (MWh) 2,095,252 1,684,639 922,585 492,773

% of 2010 MWh Sales 8.3% 6.6% 3.6% 1.9%

Summer MW 301.0 249.1 145.4 72.9

PPL Territory

Energy (MWh) 1,827,059 1,525,704 839,096 446,283

% of 2010 MWh Sales 7.9% 6.6% 3.6% 1.9%

Summer MW 438.4 391.9 251.0 114.6

COMMERCIAL SECTOR

State

- wide

Energy (MWh) 5,735,817 4,503,506 2,478,139 1,317,319

% of 2010 MWh Sales 10.3% 8 .0% 4.4% 2.4%

Summer MW 802.5 628.9 329.6 183.9

Duquesne Territory

Energy (MWh) 785,363 606,234 339,250 177,330

% of 2010 MWh Sales 11.1% 8.6% 4.8% 2.5%

Summer MW 117.4 90.7 47.1 26.5

Met

- Ed Territory

Energy (MWh) 450,583 353,369 192,168 103,364

% of 2010 MWh Sales 10.9% 8.6% 4.7% 2.5%

Summer MW 55.9 43.7 23.2 12.8

Penelec Territory

Energy (MWh) 469,825 368,737 200,756 107,859

% of 2010 MWh Sales 11.0% 8.7% 4.7% 2.5%

Summer MW 58.6 45.9 24.3 13 .4

Penn Power Territory

Energy (MWh) 125,979 97,714 54,023 28,582

% of 2010 MWh Sales 10.8% 8.4% 4.6% 2.5%

Summer MW 16.6 12.9 6.8 3.8

West Penn Power TerritoryP ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 93 3

- Year Savings Technical

Potential Economic

Potential Achievable Potential

Scenario#1 Achievable Potential

Scenario#2

Energy (MWh) 618,459 484,842 271,609 141,821

% of 2010 MWh Sales 11.2% 8.8% 4.9% 2.6%

Summer MW 100.6 73.7 38.2 21.6

PECO Territory

Energy (MWh) 1,922,907 1,518,082 830,318 444,053

% of 2010 MWh Sales 9.2% 7.2% 4.0% 2.1%

Summer MW 241.2 191.3 102.7 55.9

PPL Territory

Energy (MWh) 1,36 2,702 1,074,528 590,013 314,310

% of 2010 MWh Sales 10.6% 8.4% 4.6% 2.4%

Summer MW 212.1 170.7 87.3 49.9

INDUSTRIAL SECTOR

State

- wide

Energy (MWh) 1,618,155 1,557,465 864,048 455,574

% of 2010 MWh Sales 4.4% 4.3% 2.4% 1.2%

Summer MW 642.2 619.2 458.7 181.1

Duquesne Territory

Energy (MWh) 116,739 109,797 60,933 32,117

% of 2010 MWh Sales 4.1% 3.9% 2.2% 1.1%

Summer MW 39.7 37.8 28.0 11.0

Met

- Ed Territory

Energy (MWh) 216,922 206,549 114,109 60,418

% of 2010 MWh Sales 4.8% 4.6% 2.5% 1.3%

Summer MW 78.1 74.7 55.2 21.8

Penelec Territory

Energy (MWh) 248,572 242,494 135,441 70,932

% of 2010 MWh Sales 4.7% 4.6% 2.6% 1.3%

Summer MW 89.3 87.1 64.6 25.5

Penn Power Territory

Energy (MWh) 76,821 72,250 40,102 21,134

% of 2010 MWh Sales 4.4% 4.1% 2.3% 1.2%

Summer MW 31.6 29.9 22.2 8.7

West Penn Power Territory

Energy (MWh) 322,399 308,642 172,114 90,281

% of 2010 MWh Sales 4.3% 4.1% 2.3% 1.2%

Summer MW 117 .5 110.8 82.3 32.4

PECO Territory

Energy (MWh) 172,345 166,557 92,266 48,720

% of 2010 MWh Sales 3.9% 3.8% 2.1% 1.1%

Summer MW 59.7 57.9 42.7 16.9

PPL Territory

Energy (MWh) 464,356 451,176 249,082 131,973

% of 2010 M

Wh Sales 4.5% 4.4% 2.4% 1.3%

Summer MW 226.3 221.2 163.7 64.7

* Achievable Scenario#1: Assumes 100% Incentives

*Achievable Scenario#2: Assumes 34% in the commercial sectorP ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 94 Table 7

- 33 : 5

- Year Potentia l Savings by Sector, Scenario, and EDC (201 8 )

5

- Year Savings Technical

Potential Economic

Potential Achievable Potential

Scenario#1 Achievable Potential

Scenario#2

NON

- RESIDENTIAL

State

- wide

Energy (MWh) 12,337,338 10,165,854 6,372,642 2,973,611

% of 2010 MWh Sales 13.3% 11.0% 6.9% 3.2%

Summer MW 1,661.8 1,358.9 830.5 397.5

Duquesne Territory

Energy (MWh) 1,503,313 1,192,536 753,534 348,829

% of 2010 MWh Sales 15.2% 12.0% 7.6% 3.5%

Summer MW 215.2 169.6 102.6 49.6

Met

- E d Territory

Energy (MWh) 1,121,659 940,600 586,513 275,134

% of 2010 MWh Sales 12.9% 10.9% 6.8% 3.2%

Summer MW 132.4 110.3 67.9 32.3

Penelec Territory

Energy (MWh) 1,204,393 1,024,581 641,366 299,700

% of 2010 MWh Sales 12 .7% 10.8% 6.7% 3.1%

Summer MW 142.1 119.8 74.0 35.0

Penn Power Territory

Energy (MWh) 339,530 284,482 178,765 83,214

% of 2010 MWh Sales 11.6% 9.7% 6.1% 2.8%

Summer MW 43.3 36.2 22.4 10.6

West Penn Power Territory

Energy (MWh) 1,585,778 1,337,204 846,740 391,146

% of 2010 MWh Sales 12.2% 10.3% 6.5% 3.0%

Summer MW 226.7 178.0 108.8 52.1

PECO Territory

Energy (MWh) 3,525,202 2,833,556 1,768,406 828,842

% of 2010 MWh Sales 13.9% 11.2% 7.0% 3.3%

Summer MW 436.3 351.3 216.8 102.8

PPL Territory

Energy (MWh) 3,057,462 2,552,894 1,597,319 746,746

% of 2010 MWh Sales 13.2% 11.1% 6.9% 3.2%

Summer MW 465.6 393.8 238.1 115.2

COMMERCIAL SECTOR

State

- wide

Energy (MWh) 9,615,602 7,546,1 71 4,723,354 2,207,328

% of 2010 MWh Sales 17.2% 13.5% 8.4% 3.9%

Summer MW 1,347.0 1,055.4 640.1 308.7

Duquesne Territory

Energy (MWh) 1,308,524 1,009,330 638,287 295,239

% of 2010 MWh Sales 18.5% 14.3% 9.0% 4.2%

Summer MW 195.8 1 51.2 91.0 44.2

Met

- Ed Territory

Energy (MWh) 757,192 593,561 368,672 173,622

% of 2010 MWh Sales 18.3% 14.4% 8.9% 4.2%

Summer MW 94.1 73.6 45.0 21.5

Penelec TerritoryP ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 95 5

- Year Savings Technical

Potential Economic

Potential Achievable Potential

Scenario#1 Achievable Potential

Scenario#2

Energy (MWh) 786,878 617,275 383,848 180,559

% of 2 010 MWh Sales 18.5% 14.5% 9.0% 4.2%

Summer MW 98.4 77.1 47.1 22.5

Penn Power Territory

Energy (MWh) 210,696 163,314 102,493 47,771

% of 2010 MWh Sales 18.1% 14.1% 8.8% 4.1%

Summer MW 27.8 21.6 13.2 6.3

West Penn Power Territory

Energy (MWh) 1,041,095 815,763 517,089 238,619

% of 2010 MWh Sales 18.8% 14.7% 9.3% 4.3%

Summer MW 169.7 124.3 74.9 36.3

PECO Territory

Energy (MWh) 3,234,604 2,552,718 1,591,743 746,694

% of 2010 MWh Sales 15.4% 12.2% 7.6% 3.6%

Summer MW 406.4 322.3 198.6 94.3

PPL Territory

Energy (MWh) 2,276,613 1,794,210 1,121,222 524,824

% of 2010 MWh Sales 17.7% 14.0% 8.7% 4.1%

Summer MW 354.7 285.4 170.2 83.5

INDUSTRIAL SECTOR

State

- wide

Energy (MWh) 2,721,736 2,619,682 1,649,289 766,283

% of 2010 MWh Sales 7.5% 7.2% 4.5% 2.1%

Summer MW 314.8 303.6 190.4 88.8

Duquesne Territory

Energy (MWh) 194,789 183,206 115,247 53,590

% of 2010 MWh Sales 6.9% 6.5% 4.1% 1.9%

Summer MW 19.4 18.5 11. 6 5.4

Met

- Ed Territory

Energy (MWh) 364,467 347,039 217,841 101,512

% of 2010 MWh Sales 8.0% 7.6% 4.8% 2.2%

Summer MW 38.3 36.6 22.9 10.7

Penelec Territory

Energy (MWh) 417,515 407,306 257,518 119,141

% of 2010 MWh Sale

s 7.9% 7.8% 4.9% 2.3%

Summer MW 43.8 42.7 26.9 12.5

Penn Power Territory

Energy (MWh) 128,834 121,168 76,273 35,443

% of 2010 MWh Sales 7.3% 6.9% 4.3% 2.0%

Summer MW 15.5 14.6 9.2 4.3

West Penn Power Territory

Energy (MWh) 544 ,683 521,441 329,651 152,527

% of 2010 MWh Sales 7.3% 7.0% 4.4% 2.0%

Summer MW 57.0 53.7 33.8 15.7

PECO Territory

Energy (MWh) 290,598 280,838 176,663 82,148

% of 2010 MWh Sales 6.6% 6.4% 4.0% 1.9%

Summer MW 29.9 29.0 18.2 8.5

PPL TerritoryP ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 96 5

- Year Savings Technical

Potential Economic

Potential Achievable Potential

Scenario#1 Achievable Potential

Scenario#2

Energy (MWh) 780,849 758,685 476,097 221,923

% of 2010 MWh Sales 7.6% 7.4% 4.6% 2.2%

Summer MW 110.9 108.4 67.8 31.7

* Achievable Scenario#1: Assumes 100% Incentives

*Achievable Scenario#2: Assumes 34% in the commercial s ector

Table 7

- 34 : 10

- Year Potential Savings by Sector, Scenario, and EDC (20 23 )

10

- Year Savings Technical

Potential Economic

Potential Achievable Potential

Scenario#1 Achievable Potential

Scenario#2

NON

- RES IDENTIAL

State

- wide

Energy (MWh) 22,468,914 19,183,681 14,437,541 5,611,418

% of 2010 MWh Sales 24.3% 20.7% 15.6% 6.1%

Summer MW 2,689.8 2,244.5 1,586.0 656.5

Duquesne Territory

Energy (MWh) 2,689,697 2,206,139 1,676,096 645,31 9

% of 2010 MWh Sales 27.2% 22.3% 16.9% 6.5%

Summer MW 336.5 270.0 190.5 79.0

Met

- Ed Territory

Energy (MWh) 2,082,099 1,808,021 1,354,216 528,863

% of 2010 MWh Sales 24.0% 20.9% 15.6% 6.1%

Summer MW 220.3 188.0 133.2 55.0

Penele c Territory

Energy (MWh) 2,211,584 1,952,978 1,462,099 571,266

% of 2010 MWh Sales 23.2% 20.5% 15.4% 6.0%

Summer MW 235.4 203.7 144.2 59.6

Penn Power Territory

Energy (MWh) 637,581 549,551 412,775 160,749

% of 2010 MWh Sal

es 21.8% 18.8% 14.1% 5.5%

Summer MW 73.7 63.1 44.7 18.4

West Penn Power Territory

Energy (MWh) 3,005,909 2,611,817 1,969,711 763,984

% of 2010 MWh Sales 23.1% 20.1% 15.1% 5.9%

Summer MW 380.8 304.9 215.2 89.2

PECO Territory

En ergy (MWh) 6,215,997 5,190,793 3,905,390 1,518,358

% of 2010 MWh Sales 24.5% 20.5% 15.4% 6.0%

Summer MW 674.1 551.5 392.9 161.3

PPL Territory

Energy (MWh) 5,626,047 4,864,383 3,657,254 1,422,880

% of 2010 MWh Sales 24.4% 21.1% 15.8 % 6.2%

Summer MW 768.9 663.4 465.4 194.0

COMMERCIAL SECTOR

State

- wide

Energy (MWh) 16,996,395 13,840,281 10,473,092 4,048,421

% of 2010 MWh Sales 30.4% 24.7% 18.7% 7.2%

Summer MW 2,059.7 1,629.7 1,153.3 476.7

Duquesne Territory

Energy (MWh) 2,294,971 1,832,001 1,398,558 535,880P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 97 10

- Year Savings Technical

Potential Economic

Potential Achievable Potential

Scenario#1 Achievable Potential

Scenario#2

% of 2010 MWh Sales 32.4% 25.9% 19.7% 7.6%

Summer MW 297.3 232.4 164.1 68.0

Met

- Ed Territory

Energy (MWh) 1,352,072 1,101,050 830,432 322,067

% of 2010 MWh Sales 32.8% 26.7% 20 .1% 7.8%

Summer MW 143.8 113.8 81.1 33.3

Penelec Territory

Energy (MWh) 1,374,988 1,122,162 844,598 328,244

% of 2010 MWh Sales 32.3% 26.3% 19.8% 7.7%

Summer MW 148.0 117.3 83.3 34.3

Penn Power Territory

Energy (MWh) 375, 741 302,001 229,078 88,338

% of 2010 MWh Sales 32.3% 26.0% 19.7% 7.6%

Summer MW 42.5 33.4 23.8 9.8

West Penn Power Territory

Energy (MWh) 1,894,314 1,536,703 1,169,438 449,502

% of 2010 MWh Sales 34.2% 27.8% 21.1% 8.1%

Summer MW 265.5 195.3 137.8 57.1

PECO Territory

Energy (MWh) 5,643,460 4,630,154 3,490,896 1,354,365

% of 2010 MWh Sales 26.9% 22.1% 16.7% 6.5%

Summer MW 615.1 493.7 352.3 144.4

PPL Territory

Energy (MWh) 4,060,848 3,316,209 2,510,091 970,025

% of 2010 MWh Sales 31.7% 25.8% 19.6% 7.6%

Summer MW 547.5 443.7 311.0 129.8

INDUSTRIAL SECTOR

State

- wide

Energy (MWh) 5,472,519 5,343,401 3,964,449 1,562,997

% of 2010 MWh Sales 15.0% 14.7% 10.9% 4.3%

Summer MW 630.1 614.8 43 2.7 179.8

Duquesne Territory

Energy (MWh) 394,726 374,137 277,538 109,439

% of 2010 MWh Sales 14.0% 14.0% 9.9% 3.9%

Summer MW 39.2 37.6 26.4 11.0

Met

- Ed Territory

Energy (MWh) 730,027 706,971 523,783 206,796

% of 2010 M

Wh Sales 16.1% 15.6% 11.5% 4.6%

Summer MW 76.5 74.1 52.1 21.7

Penelec Territory

Energy (MWh) 836,595 830,815 617,501 243,022

% of 2010 MWh Sales 15.9% 15.8% 11.8% 4.6%

Summer MW 87.4 86.4 61.0 25.3

Penn Power Territory

En ergy (MWh) 261,840 247,550 183,698 72,411

% of 2010 MWh Sales 14.8% 14.0% 10.4% 4.1%

Summer MW 31.2 29.6 20.9 8.7

West Penn Power Territory

Energy (MWh) 1,111,595 1,075,114 800,272 314,482P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 98 10

- Year Savings Technical

Potential Economic

Potential Achievable Potential

Scenario#1 Achievable Potential

Scenario#2

% of 2010 MWh Sales 14.9% 14.4% 10.7% 4.2%

Sum mer MW 115.3 109.5 77.4 32.0

PECO Territory

Energy (MWh) 572,538 560,639 414,494 163,992

% of 2010 MWh Sales 13.0% 12.7% 9.4% 3.7%

Summer MW 59.0 57.8 40.5 16.9

PPL Territory

Energy (MWh) 1,565,199 1,548,173 1,147,163 4 52,856

% of 2010 MWh Sales 15.3% 15.1% 11.2% 4.4%

Summer MW 221.5 219.7 154.4 64.3

* Achievable Scenario#1: Assumes 100% Incentives

*Achievable Scenario#2: Assumes 34% in the commercial sectorP ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 99 

## 8 P ROGRAM 

## E NERGY 

## E FFICIENCY 

## P OTENTIAL 

## E STIMATES



### This section of the report presents the estimates of electric program potential for the state of

Pennsylvania as well as for each EDC service area. Program Potential estimates energy savings that can
feasibly be achieved through programs within a specific planning constraint. This study estimated
program potential for a scenario where annual program spending is capped at 2% of 2006 EDC

revenues. Program potential is only determined within this section for the first three and five years of the
study horizon, as the purpose of this analysis is to inform decision making on the next implementation
of PA Act 129, expected to be either the period from June 1, 2013 and extending for three years, or the
period from June 1

, 2013 and extending for five years

.



### 8.1 E STIMA

TION OF 

### P ROGRAM 

### P OTENTIAL 

### S CENARIO 

### #1

Program potential estimation considered an annual spending ceiling that limits the program spending to
2% of 2006 annual revenue. This program spending constraint is the same as cur rently implemented

within Phase 1 of PA Act 129 (energy years 2009

- 2012). The ceiling was determined for each EDC and
is summed to the state level, as each EDC has a unique rate and customer structure. The 2006 spending

for each EDC was obtained from the PA PUC

. 53 

### Table 8

- 1 summarizes the annual spending ceiling and
spending ceiling for a three and five

- year implementation phase.

Table 8

- 1 : One

- Year, Three

- Year and Five

- Year Program Potential Budget s

EDC Single Year Spen ding Ceiling

(total portfolio) 3 Year Spending Ceiling

(total portfolio) 5 Year Spending

Ceiling

(total portfolio)

Duquesne $19,545,952 $58,637,855 $97,729,758

Met

- Ed $24,866,892 $74,600,676 $124,334,460

Penelec $22,974,744 $68,924,232 $114,873,720

Penn Power $6,659,784 $19,979,352 $33,298,920

PPL $61,501,376 $184,504,128 $307,506,880

PECO $85,395,159 $256,185,476 $426,975,793

West Penn $23,562,468 $70,687,404 $117,812,340

Statewide $244,506,374 $733,519,122 $1,222,531,870



### 8.1.1 P HASE 

### 1 B UDGETS AND 

### S AVINGS 

### G OALS



### The current implementation of energy

- efficiency programs in PA Act 129 is a four

- year cycle (energy

years 2009

- 2012). The four

- year maximum spending budget is established by the sum of the four annual
budget ceilings (2% of 2006 revenues). The energy

- efficiency cumulative savings goal established for

Phase 1 is 3% of 2009 energy year (June 1, 2009

– May 31, 2010) consumption forecasts established in
the 2009 implementation order of PA Act 129. The Phase 1 implementation order also sets forth an
intermediate savings goal of 1% of 2009 energy year consumption forecasts after the first two years of
program implementation. Table 8

- 2 summarizes these budget and savings goals targets.

Table 8

- 2 : Budgets and Savings Targets for Phase 1 of Act 129

EDC Spending Ceiling

(total portfolio) Savings Goals

(total portfolio)

(MWh) Max. Acquisition Costs

( $/MWh )

Duquesne $ 78,183,806 422,565 $ 185.02

Met

- Ed $ 99,467,568 445,9 51 $ 223.05

Penelec $ 91,898,976 431,979 $ 212.74

Penn Power $ 26,639,136 143,188 $ 186.04

PPL $ 246,005,504 1,146,431 $ 214.58

53 PA PUC calculated 2% spending cap based on data available in the Electric Power Outlook Report , Table 3. Pg 18.P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 100 EDC Spending Ceiling

(total portfolio) Savings Goals

(total portfolio)

(MWh) Max. Acquisition Costs

( $/MWh )

PECO $ 341,580,634 1,181,580 $ 289.09

West Penn $ 94,249,872 628,160 $ 150.04

Statewide $ 978,025,496 4,399,854 $ 22 2 .29



### Table 8

- 2 also displays the maximum acquisition cost metric for each EDC and for the state.
Acquisition costs are defined within this report as program expense dollars spent to acquire first

- year energy savings. Program expense dollars inclu de all program costs such as rebates, incentives,
administrative costs, marketing, outreach, and evaluation expenditures. Discussion of acquisition cost is
useful because of its simplicity (costs divided by first year savings). However, this metric does ha ve important limitations, because it does not reflect the value of the energy savings as a resource. Additional
savings parameters would need to be included, specifically measure lifetime, to determine the value of

the savings resource.

The acquisition co sts summarized in Table 8

- 2 also illustrate an important disparity in the available
budget for each EDC. There is nearly a two

- to

- one ratio between the acquisition cost budgets for PECO
and West Penn. The PA state acquisition cost for Phase 1 of Act 129 is $22 2 .29 per first year MWh

savings . Additionally, it should be noted that the acquisition budget for the final two years of Phase 1
only allows for an acquisition cost budget of $167.71 per first year MWh savings

. This final two year

metric is determined by the cumulative EDC’s annual maximum expenditures divided by the sum of the
savings goals in the same period (program years 3 and 4). Finally, these Phase 1 budgets are not
necessarily indicative of the actual costs necessary to acquire energy savings. S ummarized in section 4

( Table 4

- 11 ) of this report, the weighted acquisition cost average for the state during the first two years

of Phase 1 was $139.38 per first year MWh savings

.



### 8.1.2 U SE OF 

### A CHIEVABLE 

### P OTENTIAL 

### R ESULTS



### Estimation of program potential for P hase 2 of Act 129 (expected to be energy years 2013

- 2016 or 2013

- 2018 ) utilizes both residential and non

- residential potential savings. Because achievable po tential scenario

2 is based on P hase 1 performance, this achievable scenario was utilized for the d etermination of
program potential. In calculating expected program costs, incentive and non

- incentive, the SWE team

utilized economic an d performance metrics from the P hase 1 implementation of PA EDC programs, as
described in Section 4 of this report. Beca use the SWE team acknowledges that the existing EDC
program savings have large shares of “low hanging fruit” and very cost

- effective measures

, Phase 1 non

incentive program cost estimates have been increased by an additional 25%. Additionally, program

ince ntive funding estimates have been increased by an additional 25% to address uncertainties in future
adoption rates, market pricing, and EDCs adopting more comprehensive and less cost

- effective

measures. The SWE team notes that the 25% increase in the perce ntage of measure costs paid by the
EDC does not impact the TRC test results, because the TRC ratio calculation uses the total measure
costs paid by the utility and the participant. Furthermore, the 25% increase in non

- incentive costs per
first year kWh sav ed also does not impact the TRC test significantly because this cost increase is
approximately $.016 per first year kWh saved, which is a very small percentage of the total resource
acquisition cost for the program potential portfolio of approximately $.22 per first year kW h saved.

The first step in the program potential calculation uses the cumulative annual three

- year (2013

- 2016 ) and

five

- year (2013

- 201 8 ) residential and non

- residential sector estimated savings and costs. These figures are

summarized in Table 8

- 3 and Table 8

- 4

.P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 101 Table 8

- 3 : Summary of 2013

- 201 6 Cumulative Annual Achievable Scenario 2 Costs and Savings

EDC 3 yr

Residential

Ach 2 Savings

(MWh) 3 yr

Residential

Ach 2 C osts ($) 3 yr Non

residential

Ach 2 Savings

(MWh) 3 yr Non

residential

Ach 2 Costs

($) 3 yr Portfolio

Ach 2

Savings

(MWh) 3 yr Portfolio

Ach 2 Costs

($)

Duquesne 203,534 $41,172,067 209,446 $46,339,287 412,981 $87,511,354

Met

- Ed 214,558 $49,241,560 16 3,781 $34,323,422 378,339 $83,564,982

PECO 588,433 $124,057,990 492,773 $101,287,903 1,081,205 $225,345,894

Penelec 192,379 $42,584,437 178,791 $37,658,610 371,169 $80,243,047

Penn Power 60,683 $12,587,705 49,716 $10,508,091 110,399 $23,095,796

PPL 696 ,694 $159,754,945 446,283 $97,084,675 1,142,977 $256,839,620

West Penn 270,787 $56,300,955 232,102 $49,015,939 502,889 $105,316,894

Statewide 2,227,067 $485,699,660 1,772,893 $376,217,926 3,999,960 $861,917,587

Table 8

- 4 : Summary of 2013

- 201 8 Cumulative Annual Achievable Scenario 2 Costs and Savings

EDC 5 yr

Residential

Ach 2 Savings

(MWh) 5 yr

Residential

Ach 2 Costs

($) 5 yr Non

residential

Ach 2 Savings

(MWh) 5 yr Non

residential

Ach 2 Costs

($) 5 yr Portfolio

Ach 2

Savings

(MWh) 5 yr Portfolio

Ach 2 Costs

($)

Duquesne 341,480 $71,841,433 348,829 $80,635,783 690,309 $152,477,216

Met

- Ed 364,312 $88,515,778 275,134 $58,658,760 639,446 $147,174,539

PECO 989,465 $212,828,467 828,842 $173,189,394 1,818 ,307 $386,017,861

Penelec 325,182 $75,613,392 299,700 $64,223,102 624,882 $139,836,494

Penn Power 102,224 $22,075,533 83,214 $17,891,410 185,438 $39,966,943

PPL 1,159,873 $273,526,849 746,746 $166,636,994 1,906,619 $440,163,844

West Penn 453,677 $97,79 4,117 391,146 $84,052,544 844,823 $181,846,661

Statewide 3,736,214 $842,195,569 2,973,611 $645,287,988 6,709,824 $1,487,483,557



### The next step in the program potential calculation compares the sum of the residential and non

residential sector program cos ts to the three

- year and five

- year budget ceiling s at the EDC and state

levels in Table 8

- 5 and Table 8

- 6

.

Table 8

- 5 : Comparison of 2013

- 201 6 Cu mulative Annual Achievable 2 Costs and Program Budget

EDC Three Year

Spending Ceiling

(total portfolio) Three Year Ach 2

Costs

(total portfolio) Ach 2 Exceeds

Spending Ceiling Achievable 2

Potential Savings

(MWh)

Duquesne $ 58,637,855 $ 87 ,511,354 YES 412,981

Met

- Ed $ 74,600,676 $ 83,564,982 YES 378,339

Penelec $ 68,924,232 $ 80,243,047 YES 371,169

Penn Power $ 19,979,352 $ 23,095,796 YES 110,399

PPL $ 184,504,128 $ 256,839,620 YES 1,1 42,977

PECO $ 256,185,476 $ 225,345,894 NO 1,081,205

West Penn $ 70,687,404 $ 105,316,894 YES 502,889

Statewide $ 733,519,122 $ 861,917,587 YES 3,999,960

Table 8

- 6 : Compariso n of 2013

- 201 8 Cumulative Annual Achievable 2 Costs and Program Budget

EDC Five Year Spending

Ceiling

(total portfolio) Five Year Ach 2

Costs

(total portfolio) Ach 2 Exceeds

Spending Ceiling Achievable 2

Potential Savings

(MWh)

Duquesne $ 97,729, 758 $ 152,477,216 YES 690,309

Met

- Ed $ 124,334,460 $ 147,174,539 YES 639,446

Penelec $ 114,873,720 $ 139,836,494 YES 624,882

Penn Power $ 33,298,920 $ 39,966,943 YES 185,438P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 102 EDC Five Year Spending

Ceiling

(total portfolio) Five Year Ach 2

Costs

(total portfolio) Ach 2 Exceeds

Spending Ceiling Achievable 2

Potential Savings

(MWh)

PPL $ 307,506,880 $ 440,163,8 44 YES 1,906,619

PECO $ 426,975,793 $ 386,017,861 NO 1,818,307

West Penn $ 117,812,340 $ 181,846,661 YES 844,823

Statewide $ 1,222,531,870 $ 1,487,483,557 YES 6,709,824



### The final step to calculate program potential is to scale th e respective EDC achievable scenario 2 energy
savings down to the three and five

- year spending ceiling value while holding the acquisition cost

constant. The one exception is PECO; Table 8

- 6 illustrates that PECO’s program cost for ac hievable 2

are less than the spending ceiling (spending ceiling of $427 million with achievable 2 costs $386 million)

. This reveals that it is unlikely that additional savings are achievable at this incentive level. Thus, program
acquisition cost spending must increase for PECO to spend up to the program budget ceiling. In order
to calculate the increase in savings achievable by PECO from the achievable 2 scenario, a linear model
was created using achievable potential scenarios 1 (100% incremental funding) and 2 (current funding

levels). This model is shown in Figure 8

- 1

.

Figure 8

- 1 : PECO Scaling Model



### 8.1.3 P ROGRAM 

### P OTENTIAL 

### R ESULTS



### The final three

- year and five

- year program potential energy savings and budget values are found in

Table 8

- 7 a nd Table 8

- 8 for each EDC and the state of the Pennsylvania.P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 103 Table 8

- 7 : Program Potential Scenario 1 2013

- 201 6 Cumulative Savings and Budget

EDC 3 Year Spending

Ceiling

(total portfolio) 3 Year Program

Potential

Savings (MWh) 3 Year Program

Acquisition Cost ($/MWh) 3 Year % of

2009/10

Forecast Probable Range

of 2009/10

Fo recast
Duquesne $58,637,855 276,722 $211.90 2.0 % 1.7 %

- 2. 5 %

Met

- Ed $74,600,676 337,753 $220.87 2. 3 % 2.0%

- 2.7%

Penelec $68,924,232 318,813 $216.19 2.2% 1.9%

- 2. 7 %

Penn Power $19,979,352 95,502 $209.20 2.0% 1.7%

- 2. 5 %

PPL $184,504,128 821,072 $224. 71 2.1% 1.9%

- 2.7%

PECO $256,185,476 1,125,851 $227.55 2. 9 % 2.6%

- 3.1%

West Penn $70,687,404 337,533 $209.42 1.6% 1. 4 %

- 2.1%

Statewide $733,519,122 3,313,247 $221.39 2. 3 % 2.0%

- 2.7%

Table 8

- 8 : Program Potential Scenario 1 2013

- 2018 Cumulative Savings and Budget

EDC 5 Year Spending

Ceiling

(total portfolio) 5 Year Program

Potential

Savings (MWh) 5 Year Program

Acquisition Cost ($/MWh) 5 Year % of

2009/10

Forecast Probable Range

of 2009/10

Forecast

Duq uesne $97,729,758 442,451 $220.88 3.1% 2.8%

- 4. 2 %

Met

- Ed $124,334,460 540,210 $230.16 3.6% 3. 4 %

- 4.5%

Penelec $114,873,720 513,332 $223.78 3.6% 3. 2 %

- 4.4%

Penn Power $33,298,920 154,500 $215.53 3.2% 2. 8 %

- 4.1%

PPL $307,506,880 1,332,001 $230.86 3. 5 % 3.2%

- 4.5%

PECO $426,975,793 1,884,517 $226.57 4.8% 4.3%

- 5.2%

West Penn $117,812,340 547,332 $215.25 2.6% 2. 3 %

- 3.5%

Statewide $1,222,531,870 5,414,343 $225.80 3. 7 % 3.3%

- 4.5%



### The uncertainty ranges presented are largely based outcomes of this study supplemented with research of

other regional (non

- Pennsylvania) utilities ’ program forecasts, and SWE’s industry experience

. There are
several key observations to be noted within these program potential savings and budgets:

 For the three year period (2013

- 2016), program potential scenario 1 estimated MWh savings are
2.3% of forecast sales. Over the five year period (2013

- 2018) program potential scenario 1
estimated MWh savings are 3.7% of forecast sales.

 Program potential savings are less than current ly expected with Phase 1 implementation. This is
largely due to the impacts of federal legislation, changing baseline conditions and increasing
saturation of energy efficient equipment.

 Expected program costs are considerably higher than current Phase 1 im plementation. Statewide
estimated acquisition costs for 2013

- 201 8 acquisition costs are 62 % higher than current

acquisition costs.

8.1.3.1 Program Potential Uncertainty



### Due to the uncertainty in forecasting, marketplace technologies and costs, and expected program
adoption, program potential may be best considered as a range of probable outcomes. Based largely on analysis within this study, SWE’s experience and research of other utilities the most likely statewide
program potential annual savings for years 2013

- 201 8 ranges between 0.7% to 0.9% of 2009 / 2010
forecasted sales. Consequently, the expected probable acquisition cost may range from $170 to $250 per first year MWh savings. Figure 8

- 2 illustrates this range from 2013

- 201 8 along with the most probable

outcomes summarized in Table 8

- 8

.P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

Prepared by GDS Associates and Nexant

Page 104 Figure 8

- 2 : Program Potential Range 2013

- 201 8 54



### Some of this uncertainty has been addressed through the adoption of safety margins to the program
costs. However, it also needs to be stated that these forecasts of program potential are based on many
assumptions, including EDC forecasted sales

, avoided costs

, measure costs and expected savings, SWE’s
experience, and industry kno wledge, among others. A significant change to these assumptions

— for
instance, due to a large change in economic conditions

— can affect the applicability of these values.

Finally, this analysis does not consider the impacts of program “carve

- outs” or “set

- asides” for specific

sectors or target markets. Current Phase 1 of Act 129 has two such set

- asides for residential low

- income and governmental/non

- profit sectors. Addition of set

- asides could change this analysis, likely with the
effect of reducing program potential. For instance, residential low

- income programs often utilize 100%
incremental measure cost incentives. Higher budgets for set

- aside programs would have the consequence
of reducing the overall budget for the broader portfolio, leading to reduced program potential savings.



### 8.2 E STIMATION OF 

### P ROGRAM 

### P OTENTIAL 

### S CENARIO 

### #2

The second program potential scenario considered a fixed annual savings target of 1% of 2009/2010

forecast energy sales and determined what the estimated costs would be to achieve thes e savings. This
scenario provides an understanding of what the acquisition costs would be to acquire the current Phase 1
savings goals for Phase 2 of Act 129.

Based on the findings for Program Potential 1, and as can be seen in Table 8

- 7 and Table 8

- 8

, no EDC
achieves this goal of 1% annual incremental savings and thus all expenditures must be scaled upward
from achievable 2 cumulative costs using a model similar to the one describ ed for PECO in program
potential scenario 1. The results for Program Potential 2 can be found in Table 8

- 9 and Table 8

- 10

54 Note: future savings potentials illustrated in this graph assume that the EDCs achi eve exactly 3% of 2009/10 sales at the end of

phase 1.P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

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Page 105 Table 8

- 9 : Program Potential Scenario 2 2013

- 201 6 Estimated Program Costs

EDC 3 Year Spending

Ceiling

(total portfolio) 3 Year Program

Potential Savings

(MWh) 3 Year Program

Acquisition Cost ($/MWh) 3 Year % of 2009/10

Forecast

Duquesne $94,543,076 422,565 $223.74 3.00%

Met

- Ed $131,640,852 445,951 $295.19 3.00%

Penelec $123,114,709 43 1,979 $285.00 3.00%

Penn Power $45,409,402 143,188 $317.13 3.00%

PPL $259,331,715 1,146,431 $226.21 3.00%

PECO $294,681,687 1,181,580 $249.40 3.00%

West Penn $189,508,954 628,160 $301.69 3.00%

Statewide $1,138,230,395 4,399,854 $258.70 3.00%

Table 8

- 10 : Program Potential Scenario 2 2013

- 201 8 Estimated Program Costs

EDC 5 Year Spending

Ceiling

(total portfolio) 5 Year Program

Potential Savings

(MWh) 5 Year Program

Acquisition Cost ($/MWh) 5 Year % of 200 9/10

Forecast

Duquesne $161,993,612 704,275 $230.01 5.00%

Met

- Ed $215,195,164 743,252 $289.53 5.00%

Penelec $201,619,549 719,965 $280.04 5.00%

Penn Power $73,270,746 238,647 $307.03 5.00%

PPL $442,854,308 1,910,718 $231.77 5.00%

PECO $479,423,225 1,9 69,300 $243.45 5.00%

West Penn $307,017,920 1,046,933 $293.25 5.00%

Statewide $1,881,374,524 7,333,090 $256.56 5.00%



### This analysis demonstrates that considerable increase in program spending would be required to achieve

savings similar to Phase 1 goals during the Phase 2 period. Spending across the five

- year horizon (2013

- 2018) would need to increase by over $650,000,000 to achieve these goals

.P ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

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Page 106 

## 9 C ONCLUSIONS



### In summary, the remaining potential for electric energy efficiency in the service areas of the s even electric distribution companies (included in this study) is significant. The statewide estimated achievable
potential electricity savings f or Scenario #1 amounts to 6,339,540 MWh on a cumulative annual basis by

2013 (a 4.3% reduction in projected 2010 baseline MWh sales) and 11,996,092 MWh on a cumulative
annual basis by 2018 (an 8. 2 % redu ction in projected 2010 baseline MWh sales).

The TRC ratios statewide for Achievable Potential scenario #1 are 1.75 (3

- year timeframe)

, 1.83 (5

- year timeframe) and 1.9 5 (10

- year timeframe) . The TRC ratios statewide for Achievable Potential scenario # 2

are 1.73 (three

- year)

, 1.85 (five

- year) and 1.9 7 (10

- year)

.

After taking into account the Act 129 program spending limits , the SWE recommends that the savings

target s for Phase 2 be based on the program potential 1 scen ario presented in Table 1

- 3 and Table 1

- 4

. The three

- year program potential savings is 3,313,247 MWh with a corresponding three

- year statewide
reduction target of 2.3%. The five

- year program potential savings is 5,414,343 MWh with a five

- year statewide reduction target of 3.7%.

The results of this study demonstrate that cost effective electric energy efficiency resources can play an
important role in Pennsylvania’s energy resource mix during the next three

- year or five

- year period

.



### 9.1 I MPORTANT 

### C ONSIDERATIONS 

### A BOUT 

### T HIS 

### E NERGY 

### E FFICIENCY 

### P OTENTIAL 

### S TUDY



### There are several important facts about the data and assumptions used in this electric energy efficiency
potential study, as follows:



###  This study include s a comprehensive list of energy efficiency measures for the residential,
commercial and industrial sectors. For example, consumer electronics are treated as a
comprehensive end use in the residential sector in this analysis. Savings from consumer

electron ics were not always examined in studies conducted in the past. Second, all of the energy
efficiency measures included in the 2012 Pennsylvania Technical Reference manual are included
in this study.



###  Emerging, commercially available technologies have been i ncluded in this analysis along with
behavioral based energy efficiency measures.



###  This study has used the latest available forecasts of electric avoided costs provided by the seven
electric distribution companies. Many of these avoided cost forecasts are hi gher than those used
by the companies in the development of their 2009 Energy Efficiency and Conservation Plans.



###  The main programmatic strategy used in this study is a replace on burnout strategy, where
measures are implemented when equipment reaches the e nd of its useful life.



###  Achievable potential scenario #1 assumes an incentive level for energy efficiency measures of
100% of measure incremental cost, and a long

- term market penetration rate of eight y

- five

percent. Achievable potential scenario #2 assum es an incentive level for energy efficiency

measures of 56% of measure incremental cost for the residential sector, and 34% for the

commercial and industrial sectors.



### 9.2 C ONCLUDING 

### T HOUGH TS



### It is clear that electric energy efficiency programs could save r esidents of Pennsylvania a substantial
amount of electricity by 2018. The electric energy efficiency potential estimates and the TRC Test
savings provided in this report are based upon the latest load forecasts and avoided cost forecasts
provided by the se ven electric distribution companies. These distribution companies also provided
appliance saturation data, data on energy efficiency measure costs and savings, and measure lives
available at the time of this study. Over time, additional technologies are l ikely to become available inP ENNSYLVANIA E NERGY E FFICIENCY P OTENTIAL

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Page 107 

### the market that may serve to increase the potential for energy and demand savings and warrant

additional attention. Finally, actual energy and demand savings will depend upon the level and degree of

Pennsylvania residences and business participation in the EE programs offered by the EDCs.