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ELECTRIC ENERGY EFFICIENCY POTENTIAL FOR 

PENNSYLVANIA

Final Report

Prepared for:

PENNSYLVANIA PUBLIC UTILITY COMMISSION

May 10, 2012

GDS Associates, Inc. 

1850 Parkway Place

Suite 800

Marietta, GA 30067

770.425.8100

770.426.0303 (Fax)

www.gdsassociates.com 

GDS Associates, Inc.

Engineers and Consultants
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

Prepared by GDS Associates and Nexant

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TABLE OF CONTENTS

1 EXECUTIVE SUMMARY ....................................................................................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 GLOSSARY OF TERMS ....................................................................................12

3 INTRODUCTION ............................................................................................17

3.1 Introduction to Energy Efficiency .......................................................................................................... 17

3.1.1 General Benefits of Energy Efficiency................................................................................................ 17

3.2 The Pennsylvania 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 Purpose of this Study................................................................................................................................. 20

3.4 Cost-Effectiveness Findings..................................................................................................................... 20

4 CHARACTERIZATION OF SERVICE AREAS OF PENNSYLVANIA EDCS ............ 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 Characteristics............................................................................................... 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 Electricity 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 Programs............................................................... 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 Efficiency Programs........................................................................................ 36

4.5.6 Current PECO Energy Efficiency Programs.................................................................................... 38

5 POTENTIAL STUDY METHODOLOGY ............................................................ 41

5.1 Measure List Development....................................................................................................................... 42

5.1.1 Measure Characterization ................................................................................................................ 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.................................................................................................................................... 50
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5.6 Determining Cost-Effectiveness.............................................................................................................. 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 Market Penetration Rates for the Residential Sector......................................... 53

5.8 Program Potential....................................................................................................................................... 54

6 RESIDENTIAL ENERGY EFFICIENCY POTENTIAL ESTIMATES ......................56

6.1 Energy Efficiency Measures Examined .................................................................................................. 56

6.2 Residential 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 COMMERCIAL & INDUSTRIAL ENERGY EFFICIENCY POTENTIAL ESTIMATES71

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 Summary 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 Measures Examined.................................................................................................. 89

7.5 Non-Residential Savings by EDC............................................................................................................ 91

8 PROGRAM ENERGY EFFICIENCY POTENTIAL ESTIMATES ............................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 CONCLUSIONS............................................................................................. 106

9.1 Important Considerations About This Energy Efficiency Potential Study .................................... 106

9.2 Concluding Thoughts.............................................................................................................................. 106

APPENDICES

APPENDIX 1: General Modeling Assumptions and Avoided Costs

APPENDIX 2: Residential Sector Data 

APPENDIX 3: Commercial Sector Data
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LIST OF FIGURES

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 Territories.........................................................................................................................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 Pennsylvania ................................................................................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 Achievable 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 Efficiency 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

LIST OF EQUATIONS

Equation 5-1: Core Equation for Residential Sector Technical Potential....................................................................................47

Equation 5-2: Core Equation for Commercial Sector Technical Potential .................................................................................49

Equation 5-3: Core Equation for Industrial Sector Technical Potential ......................................................................................49

Equation 5-4: Adoption Rates Over Time – Replace on Burnout................................................................................................53

Equation 6-1: Core Equation for Residential Sector Technical Potential....................................................................................59
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LIST 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 Scenario 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 US ...................................................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: Number of Customers by Customer Sector ..................................................................................................................23

Table 4-2: 2010 MWh Sales Breakdown by EDC, and by Sector .................................................................................................24

Table 4-3: 2010 Premise Counts by EDC and by Sector................................................................................................................24

Table 4-4: Commercial Energy Consumption by Segment ............................................................................................................25

Table 4-5: Industrial Energy Consumption by Segment.................................................................................................................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 Portfolios....................................................................................................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 Residential 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 Residential 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 for 

Pennsylvania .................................................................................................................................................................................65

Table 6-9: Residential 3-Year and 5-Year Acquisition Costs Under the Achievable 2 Scenario .............................................66

Table 6-10: 3-Year 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 Potential 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..................................................................................72
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Table 7-2: Statewide Non-Residential Sector Technical Potential 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

Table 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

Table 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 Ratios 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 Potential 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 Scenario.........................................85

Table 7-23: Statewide Industrial Sector Technical Potential kWh Savings By End Use ...........................................................86

Table 7-24: Statewide Industrial Sector Economic Potential kWh Savings By End Use..........................................................86

Table 7-25: Industrial Achievable Savings Potential in 2016..........................................................................................................87

Table 7-26: Industrial Achievable Savings Potential in 2018..........................................................................................................87

Table 7-27: Industrial Achievable Savings Potential in 2023..........................................................................................................87

Table 7-28: Industrial 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 EDC (2018)...............................................................................94

Table 7-34: 10-Year Potential Savings by Sector, Scenario, and EDC (2023).............................................................................96

Table 8-1: One-Year, Three-Year and Five-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 Achievable 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....................................................................105
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1 EXECUTIVE SUMMARY

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

days 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 program 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 accomplished by May 31, 2011. By May 31, 2013, the total annual weathernormalized 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 Commission to evaluate, by November 30, 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 electricity 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 for electric energy 

efficiency programs in the service areas of Pennsylvania’s seven EDCs for the three time periods:

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

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

 The ten-year 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 commercial/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 efficiency 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 Statewide 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.
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The results of this study provide detailed information on energy efficiency measures that are the most 

cost effective and have the greatest potential kWh and kW savings in the service areas of the 

Pennsylvania EDCs. The 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 COST EFFECTIVENESS FINDINGS

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 years 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 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 Pennsylvania 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 periods starting on June 1, 2013. The TRC ratios statewide for 

Achievable Potential scenario #1 are 1.75, 1.83 and 1.95 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 

1.97 for these three time periods.

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

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 1-2: 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 $ 4,540,392,369.13 $ 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 this 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 potential savings estimates.

1.2 STUDY SCOPE

The study examines the potential to reduce electric consumption and peak demand through the 

implementation of energy efficiency technologies and practices in residential, commercial, and industrial 
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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facilities in Pennsylvania. This study assesses electric energy efficiency potential throughout the 

Pennsylvania EDC service areas over ten years, from 2013 through 2023.

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 businesses.

The scope of this study distinguishes among four types of energy efficiency potential; (1) technical, (2) 

economic, (3) achievable, and (4) program potential. The definitions used in this study for energy 

efficiency potential estimates were obtained 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 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.1

• Economic Potential refers to the subset of the technical potential that is economically costeffective as compared to conventional supply-side energy resources. 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 programmatic costs (e.g., 

marketing, analysis, administration, etc.) that would be necessary to capture them.2

 Achievable Potential 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 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.3 This 

study considers two main scenarios for analysis:

 Scenario #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 programs. 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 definitions exactly as listed in the 2007 NAPEE report 

without making any modifications.

2

Id

3

Id
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 Scenario #1 is based on funding levels of 2% of 2006 utility electric revenues (this is the 

funding cap specified in Act 129 legislation).

 Scenario #2 is based on annual 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 Energy Efficiency Potential4

Not 

Technically 

Feasable

Not 

Technically 

Feasable

Not Cost 

Effective

Not 

Technically 

Feasable

Not Cost 

Effective

Market & 

Adoption 

Barriers

Not 

Technically 

Feasable

Not Cost 

Effective

Market & 

Adoption 

Barriers

Program Design, 

Budget, Staffing, & 

Time Constraints

Technical Potential

Economic Potential

Achievable Potential

Program Potential

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

builds on a large number of assumptions and data sources, including the following:

 Energy efficiency measure lives, measure savings and measure costs 

 The 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 where 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 costeffective or only marginally so.

1.3 REPORT ORGANIZATION

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

Section 1: Executive Summary provides an overview of initial findings 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.
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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 approach 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, and achievable potential in the residential 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 sectors.

Section 8: Program Energy Efficiency Potential Estimates (June 2013-May 2018) provides

detailed information on the program potential in the residential, commercial and industrial sectors.

Section 9: Conclusions presents the final discussion regarding potential for energy efficiency savings 

through 2023.

1.4 RESULTS OVERVIEW

This study examined over 579 energy efficiency measures in the residential, commercial and industrial 

sectors combined. Three hundred and seventeen measures were included in the residential sector energy 

efficiency potential analysis. For the non-residential sector, there were 262 total measures 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 count of the individual measures included;

many measures had overlap between different segments and were counted as one measure. 

Figure 1-2: Energy Efficiency 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 companies 
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covered by Act 129, the technical potential in 2016 and in 2018 for energy efficiency is 19.9% and 

23.4%, respectively, of forecasted kWh sales for the 2010 baseline period for this study.

5 The energy 

efficiency savings for economic potential and achievable potential scenario #2 in 2016 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 Phase 2 of Act 129 utilizes both residential and non-residential 

potential savings. Because achievable potential scenario #2 is based on Phase 1 performance, this 

achievable scenario was utilized 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 Act 129. Consequently, the 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 as the Pennsylvania Technical 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 Potential Scenario 1 2013-2016 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 $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%

 

5

For purposes of this study, the baseline period sales are forecast kWh 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 adding 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. 
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Table 1-4: 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

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 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 currently 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 implementation. Statewide 

estimated acquisition costs for 2013-2018 are 62% higher than current acquisition costs.

1.5 ENERGY EFFICIENCY POTENTIAL SAVINGS DETAIL

Table 1-5 and Table 1-6 below show the energy efficiency potential savings by EDC and 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: Energy Efficiency Potential Savings Detail (by EDC and Customer Class) for 2016

6

Technical

Potential

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) 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.
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Technical

Potential

Economic

Potential

Achievable 

Potential 

Scenario#1

Achievable 

Potential 

Scenario#2

Program 

Potential 

Scenario#1

Program 

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 1,081,205 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%

Summer 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%
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Technical

Potential

Economic

Potential

Achievable 

Potential 

Scenario#1

Achievable 

Potential 

Scenario#2

Program 

Potential 

Scenario#1

Program 

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) 718,396 611,230 336,198 178,791 153,571 208,083

% 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

Energy (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

*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 sales

Table 1-6: Energy Efficiency Potential Savings Detail (by EDC and Customer Class) for 20187

Technical

Potential

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 7,333,090

% 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.
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Technical

Potential

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

Penn 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 72.3 138.3
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Technical

Potential

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 Territory

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) 1,585,778 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 Sales 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 sales
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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2 GLOSSARY OF TERMS8

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

potential study. 

Achievable Potential: The November 2007 National Action 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 

scenario 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 nonmeasure 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.

Achievable 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 Costs are defined within this report 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 is 

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 included, specifically measure lifetime, to determine the 

value of the savings resource.(see also Resource Acquisition Costs)

Applicability Factor: The fraction of the applicable dwelling units or businesses that is technically 

feasible for conversion 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 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: The electricity used per customer per year by each basecase 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 annual 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 

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

9 Green Energy Savings Solutions. https://www.palenergysmart.com/Glossary.html
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Base Case Factor: The fraction of the market that is applicable for the efficient technology in a given 

market segment. For example, 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 physical sense to wasting assets with a finite economic life.10

Coincidence Factor: The fraction of connected load expected to be “on” and using electricity 

coincident with the system peak period.

Cost-Effectiveness: A measure of the relevant economic effects resulting from the implementation of 

an energy efficiency measure. If the benefits are greater than the costs, the measure is said to be costeffective.

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

particular program since the inception of that program up to the reporting date.

Cumulative Annual: Refers to the overall annual savings occurring in a given year from both new 

participants and annual savings continuing to result from past participation with 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.

Commercial Sector: Comprised 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 included in section 5 – methodology.

Conservation Voltage Reduction (CVR): A change in the voltage made by a physical adjustment in 

transformer settings governing voltage at the substation. By adjusting substation voltage, the program 

impacts hourly energy flows 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 Response: Refers 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 (EUI): A unit of measurement that describes a building’s energy use. EUI 

represents the energy consumed by a building relative to its size13

Early Replacement: Refers to an efficiency measure or efficiency program that seeks to encourage the 

replacement of functional equipment before the end of its operating life with higher-efficiency units.

Economic Potential: The November 2007 National Action Plan for Energy Efficiency “Guide for 

Conducting Energy Efficiency Potential Studies” refers to the subset of the technical 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 Year 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.eui
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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 programmatic costs 

(e.g., marketing, analysis, administration) that would be necessary to capture them. 

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

process heat, cooling). 

Energy Efficiency: Using 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). 

First Year Savings: Savings accrued in the first year of the measure’s installation. Future benefits are 

not considered.

Free Driver: Individuals 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: Participants in an energy efficiency 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-promoted 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

Incremental: Savings 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 primarily for operating motors, process cooling and heating, and 

space heating, ventilation, and air conditioning (HVAC). Business types are included in section 5 –

methodology.

Measure: Any 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 retrocommissioning. 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/Glossary.asp
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MWh: One 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-Gross Ratio: A factor representing net program savings divided by gross program 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: Costs 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 Spillover: Savings from efficiency projects implemented 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 Spillover: Additional 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 assesses the benefits and costs from a participant’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 purchase, and 

operation 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 may be funded by a variety of sources 

and pursued by a wide range of approaches (typically includes multiple energy efficiency measures).

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

Conducting Energy Efficiency Potential Studies 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 programs. A typical potential study may report a range of results based on different 

program funding 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 revenues.

 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.
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Remaining Factor: The fraction of applicable 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 existing 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 Costs: The cost of energy savings associated 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.). For 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: Refers to an efficiency measure or efficiency program that 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 Factor: The percentage reduction in electricity consumption resulting from application of the 

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

Technical Potential: The theoretical maximum amount of energy use that could be displaced by energy 

efficiency, disregarding all non-engineering constraints 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 additional 

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 are 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 

included in the calculation of TRC benefits.

Societal Cost Test: Includes 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.
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3 INTRODUCTION

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 the following 

information:

 Defines the term “energy efficiency”, 

 Describes the general benefits of energy efficiency programs 

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

3.1 INTRODUCTION TO ENERGY EFFICIENCY

Efficient 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. Another example would be installing fluorescent lighting 

in place of less efficient halogen or incandescent lights to attain the same level of illumination. Energy 

efficiency can be achieved through more efficient technologies and/or processes as well as through

changes in individual behavior.

3.1.1 GENERAL BENEFITS OF ENERGY EFFICIENCY 

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, non-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 an electric utility would incur to 

construct and operate new electric power plants or to purchase power from another source17. These

avoided costs of electricity include both fixed and variable costs that can be directly avoided through a 

reduction in electricity usage. The energy component 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 building 

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 Orders.

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 products 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 efficiency windows or a high efficiency boiler, many are simple 

and inexpensive. 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 this 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.
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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 harmful emissions, such as SOX, NOX, CO2 and particulates into the 

environment.19 Exelon (the parent company of PECO) has made a commitment to responsive, lowcarbon 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 its 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 continues to focus on being a leading provider of reliable, lowemission energy in the communities they serve and strives 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. These 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. These savings 

produce multiplier effects, such as increased investment in other goods and services driving job creation 

in other markets.

Energy efficiency reduces risks associated with fuel price volatility, unanticipated capital cost increases, 

environmental regulations, supply shortages, and energy security. Aggressive energy efficiency programs 

can 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 fossil 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 

increases 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 calculator 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 committed 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 impact 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 outstanding 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 

MMTCE 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.
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3.2 THE PENNSYLVANIA CONTEXT

3.2.1 CONTINUING CUSTOMER GROWTH

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 2010, 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 forecasts for the seven electric distribution companies as a 

group indicate that the number of electric consumers in Pennsylvania will continue to increase from 

2013 through 2023 (the timeframe for this study) creating further growth in system electricity sales and 

demand.21 This report assesses the potential for electric energy efficiency programs to assist Pennsylvania

in meeting future electric energy service needs.

3.2.2 ENERGY EFFICIENCY ACTIVITY 

Making homes and buildings more energy efficient is seen as a key strategy for addressing energy 

security, reducing reliance on fossil fuels from other 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 efficiency 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 efficiency programs. 

3.2.3 RECENT ENERGY EFFICIENCY POTENTIAL STUDIES

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 these 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 Study 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 spending 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 December 2008 National Action Plan for Energy Efficiency (NAPEE) “Vision for 2025: A Framework for Change” states 

that “the long-term aspirational goal 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 energy 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 Efficient Economy, “The 2010 State Energy Efficiency Scorecard”, Report #E107, October 

2010.
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The SWE Team has also examined actual energy efficiency savings data for 2010 from 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 PURPOSE OF THIS STUDY

This study provides 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 technologies and building practices that are 

technically achievable. 

3.4 COST-EFFECTIVENESS FINDINGS

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 years 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 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 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 periods starting on June 1, 2013. The TRC ratios statewide for 

Achievable Potential scenario #1 are 1.75, 1.83 and 1.95. The TRC ratios statewide for Achievable 

Potential scenario #2 are 1.73, 1.85 and 1.97.

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 $ 4,540,392,369.13 $ 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 this 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 potential savings estimates.
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4 CHARACTERIZATION OF SERVICE AREAS OF PENNSYLVANIA EDCS

With any potential study it is important to assess and understand the geographic and demographic 

characteristics of the location being studied. As a result of the Act 129 program in Pennsylvania, a twopart study was initiated to determine: 1) how customers are currently using electricity in their homes and 

businesses (see Baseline Studies24) 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 presented in the C&I Baseline Study.

4.1 EDC AREAS

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 demographics.

Figure 4-1: Pennsylvania Utility Service Territories

4.1.1 DUQUESNE LIGHT COMPANY

Duquesne Light Company (Duquesne) provides electric service to customers in southwestern 

Pennsylvania, primarily the city of Pittsburgh and areas of Allegheny and Beaver counties. Duquesne 

currently serves more than 500,000 electric 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 Pennsylvania Public Utility Commission
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4.1.2 FIRSTENERGY CORPORATION

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 

currently serves approximately 6 million customers. 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 Company. 

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 Western Pennsylvania. 

Penn Power currently serves 160,116 electric utility customers.

4.1.2.4 West Penn Power Company

West Penn 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 ELECTRIC UTILITIES CORPORATION

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

electric utility customers in Eastern and Central Pennsylvania. PPL currently serves 1,401,274 customers. 

4.1.4 PECO ENERGY COMPANY

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 ECONOMIC/DEMOGRAPHIC CHARACTERISTICS

Pennsylvania is the 33rd 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 Jersey, 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 6th 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 9th most densely populated state in the U.S. This population 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 4th 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 households 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 Center
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Table 4-1 summarizes the number of customers by sector in the Pennsylvania areas served by the seven 

EDCs from 2001 to 2010. 

Table 4-1: Number of Customers by Customer Sector28

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 COMMERCIAL AND INDUSTRIAL SECTOR BASELINE SEGMENTATION FINDINGS

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 surveys, 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 what was presented in the

Commission’s Electric Power Outlook Report.

4.3.1 2010 ELECTRICITY SALES BY SECTOR, 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 industrial. 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 May 2010
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Figure 4-2: 2010 Electricity 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 Light 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 residential customer and sales figures are June 2009 to May 2010

Table 4-3: 2010 Premise30 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

Source: “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 number of

accounts, or customers, the EDCs serve.
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4.3.2 ELECTRICITY CONSUMPTION BY SEGMENT

Figure 4-3 and Table 4-4 show the breakdown of energy consumption 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 manufacturing (composed of varying manufacturing types such as apparel, furniture, leather, 

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

Figure 4-3: Commercial Energy Consumption 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, 2012
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Figure 4-4: Industrial Energy Consumption by Segment

Table 4-5: Industrial Energy Consumption by Segment

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 ELECTRICITY CONSUMPTION BY END-USE

Figure 4-5 and Figure 4-6 show how electricity is consumed by end use in the commercial and industrial 

sectors. 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) make up another 30% of 

the electricity consumption.
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Figure 4-5: Commercial Energy Consumption by End Use

Figure 4-6: Industrial Energy Consumption by End Use
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4.3.4 ENERGY USE INTENSITY BY END USE, BY COMMERCIAL SEGMENT

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 uses 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 the 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 modeling 

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/ft2, due to 

the large amounts of electricity used to refrigerate foods. Warehouse 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

End Use Grocery Healthcare Institutional Lodging Misc. Office Restaurant Retail Warehouse

Weighted 

Avg.

Lighting 10.6 5.2 3.1 4.1 3.9 5.7 8.2 8.5 3.8 5.3

Ext. Lighting 0.4 0.2 0.1 0.2 0.2 0.2 0.3 0.4 0.0 0.2

HVAC 7.3 9.8 4.7 5.4 3.9 4.8 9.4 8.3 1.4 5.7

Plug Load 0.9 1.2 0.6 0.5 0.5 2.6 0.6 0.6 0.2 1.2

Refrigeration 28.6 0.7 0.7 0.9 0.9 0.6 9.9 1.5 1.0 2.6

Cooking 0.6 0.4 0.2 0.7 0.3 0.0 10.4 0.0 0.0 0.6

Water Heating 0.2 0.1 0.7 0.0 0.1 0.1 0.4 0.9 0.1 0.3

Other 1.4 2.2 2.0 0.8 0.9 0.1 1.2 1.2 0.6 1.1

Total 50.1 19.8 12.2 12.7 10.7 14.0 40.4 21.3 7.1 17.0

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

Forecasts for total MWh 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 seven EDCs included 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 Sector31

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

2017 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 55,946,661 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 CURRENT PENNSYLVANIA EDC ENERGY EFFICIENCY PROGRAMS

The current iteration of Pennsylvania Act 129 promotes a variety of energy efficiency programs 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 CURRENT ENERGY EFFICIENCY PROGRAM COST AND SAVINGS DATA

In order to properly assess the potential of energy efficiency programs moving forward, an analysis was 

done of current program energy savings and costs. These cost numbers were used as inputs to the 

potential models to properly assess the cost of implementing energy efficiency programs32. Cost and 

savings data was taken from 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 program inception to date 

(CPITD) data, the total expenditure by each EDC, and the verified energy savings through program year 

two for energy efficiency programs only. 

Because the focus of this study was on energy efficiency potential only, demand management 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 incentive and administrative cost 

inputs into the potential models to account for uncertainty about future costs.
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and non-incentive costs. Table 4-8 shows 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 Resources 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 Reduction 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 Portfolios33

Incentive Costs ($) Non-Incentive Costs ($) Participant Costs ($)

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

Statewide NonResidential $ 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 through 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 forecast of 146,661,800 MWh.

Table 4-10: PY2 CPITD Verified Savings for Energy Efficiency Programs by EDC34

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

Residential

NonResidential Total ResidentialNonResidential Total

Duquesne 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 for 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 Phase 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.
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EDC Verified Energy Savings (MWh) % of 2009/2010 Forecast

Residential

NonResidential Total ResidentialNonResidential Total

Statewide 1,051,808 692,075 1,743,883 1.95% 0.75% 1.19%

Table 4-11 shows the incremental costs of energy efficiency measures per first-year saved MWh across 

the state through the end of program year two. The measure incremental costs were used to screen cost 

effective measures as inputs into the potential model. The residential sector generally has higher nonincentive costs than the non-residential sector, but lower incentive 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 MWh35.

Table 4-11: Statewide Acquisition Costs36

Residential Non-Residential Residential Non-Residential

Statewide $74.22 $51.04 $57.88 $99.42

Incremental Non-Incentive 

Costs ($/MWh)

Incremental Incentive Costs 

($/MWh)

 Average Portfolio Non-Incentive 

Cost = $65.02/MWh 

 Average Portfolio Incentive Cost 

= $74.36/MWh 

Another critical input into the potential model was the relationship between the incentive costs paid by 

the EDCs and the participant costs paid by customers

37. This value determines the total incentive costs 

for the EDCs which affects the total potential savings. Table 4-12 shows the incentive costs as a 

percentage of participant costs statewide. For the non-residential sector, EDCs incentivized 27.9% of 

participant costs across the state. For the residential sector, the EDCs incentivized 44.8% of participant 

costs statewide.

Table 4-12: Incentive Costs as a Percentage of Participant Costs38

Statewide Incentive Level (%)

Residential Non-Residential

44.8% 27.9%

4.5.2 CURRENT DUQUESNE LIGHTING COMPANY EFFICIENCY PROGRAMS

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 programs 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 reports provided by the individual EDCs. Data represents the current program 

inception to date costs for the applicable programs through May 2011.
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Duquesne 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 rebates 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 discounts 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 from 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 REEP 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 specific 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 the 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 energy 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 segments 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 segment 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 

ranging from assessments and audits to access to rebates or incentives. 
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4.5.3 CURRENT FIRSTENERGY EFFICIENCY PROGRAMS – EXCLUDING WEST PENN 

POWER

Through project year 2 of the Act 129 energy efficiency projects, FirstEnergy offered the same programs 

through three of their four EDCs (Met-Ed, Penelec, 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 systems 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 involved 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 help 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 Home 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 provides customers with direct incentives for 

participating in diagnostic assessments of their households followed by the installation of selected low-
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cost energy efficiency measures. Customers are incentivized up to $300 for participating in the two part 

audit 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 capture 

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 participants 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 conservation 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 programs 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 nightlights and smart power strips. The WARM Plus 

Program acts 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 installations 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 drives 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 identify 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 requirement 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.
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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 street 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/pedestrian 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 

programs 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 the 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 this program 

which provides CFL kits to these customers free of charge.

4.5.4 CURRENT WEST PENN POWER ENERGY EFFICIENCY PROGRAMS

4.5.4.1 Residential Programs

Compact Fluorescent Lighting Rewards Program

The Compact Fluorescent Lighting Rewards Program is designed to encourage customers to purchase 

CFL bulbs instead of incandescent bulbs. This is accomplished through both mail-in and retailer pointof-sale rebates for customers to help offset the cost of CFLs. West Penn has also partnered with CFL 

manufacturers and negotiated 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 Performance 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. Customers 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 as 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 help 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 and be installed by a certified contractor.
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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 include 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 Joint 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 customers 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 

annual 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 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 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 CURRENT PPL ENERGY EFFICIENCY PROGRAMS

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 appliances. By 
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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 energy 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 electric 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 increase 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 

about 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 energy 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 information 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 free 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 report 

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 training 
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members of the CBOs, they can pass along 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 result 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 educational 

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 industrial 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 program 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 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 program as described in the Residential section.

4.5.6 CURRENT PECO ENERGY EFFICIENCY PROGRAMS

4.5.6.1 Residential Programs

Smart Lighting Discounts Program
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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 reduce 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 curb 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 when 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 the 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 choose 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 energy 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 government 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.
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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.
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5 POTENTIAL STUDY METHODOLOGY

This section describes the overall methodology that was utilized by the SWE Team to conduct the 

Pennsylvania statewide electricity energy efficiency potential study. Completion of this study is one of 

the key tasks included in the recently 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 statewide for three and five 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 estimates of 

energy efficiency potential. The Statewide Evaluation Team 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 objective, 

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 establishment of energy efficiency savings goals for Phase 2 of the 

Pennsylvania Act 129 programs.

40 This analysis of the potential for energy efficiency savings is based on 

the most recent electricity sales forecasts for Pennsylvania EDCs for a ten-year period starting 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 utilizes 

benefit/cost screening tools for the residential, commercial and industrial sectors. These cost 

effectiveness screening tools are Excel-based models 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 changes 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

 Measure 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 Evaluation Team. 
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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 MEASURE LIST DEVELOPMENT

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 team’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 utilities. 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 Pennsylvania. 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 the 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 incremental 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 MEASURE CHARACTERIZATION

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 SWE Team used Pennsylvania specific data wherever it was available and 

up-to-date. Considerable effort was expended to identify, review, and document all available data 

sources.

41 This review has allowed the development of reasonable and supportable assumptions 

regarding measure lives; installed costs (where appropriate); electric savings and saturation for each 

measure included in the final list of measures in this study. 

Costs and savings for new construction and burnout measures are calculated as the incremental 

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.
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measure cost and savings were considered to be the “full” cost of the measure, as the baseline scenario 

assumes 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 databases

 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 costs, and typically include the 

incremental cost of measure installation. 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, ENERGY 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 evaluation and market assessment reports

 EDC annual reports to the PA PUC

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 life-cycle cost analyses

 Secondary sources such as ACEEE, ENERGY STAR, and other technical potential studies

 The California Database 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 efficiency 

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 commercial/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 Consumption Survey (RECS)
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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 FORECAST DISAGGREGATION

For the commercial and industrial 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 

summed 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 provides the foundation 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, etc. 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 ROLE OF NATURALLY OCCURRING CONSERVATION

Naturally occurring conservation exists through government intervention, improved manufacturing 

efficiencies, building energy codes, market 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 (EISA)

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 increase naturally occurring potential through tax incentives, stimulus funding 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-uses 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 reduces energy 

efficiency potential for 2020 and subsequent years.

5.3 POTENTIAL SAVINGS OVERVIEW

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. Energy Independence and Security Act of 2007 
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Figure 5-1: Types of Energy Efficiency Potential43

Not 

Technically 

Feasable

Not 

Technically 

Feasable

Not Cost 

Effective

Not 

Technically 

Feasable

Not Cost 

Effective

Market & 

Adoption 

Barriers

Not 

Technically 

Feasable

Not Cost 

Effective

Market & 

Adoption 

Barriers

Program Design, 

Budget, Staffing, & 

Time Constraints

Technical Potential

Economic Potential

Achievable Potential

Program Potential

The first two types of potential, technical 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, achievable 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 TECHNICAL POTENTIAL

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. Technical 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 utilizes a “bottom-up” approach in the residential sector to calculate 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 replacing one piece of equipment with its 

high efficiency 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 of 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 sectors. For the commercial and industrial 

sectors, 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. Savings 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”, page 2-4
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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 and 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 study. 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 building 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 specific 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 remaining 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 overall potential electricity savings, the analysis accounts 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 potential 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 measures and high-efficiency electric 

storage water heaters, an equal percentage 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-
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effective, the homes/buildings 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 retrofits or to current equipment code standards for 

replace-on-burnout and new construction scenarios. 

5.4.1 CORE EQUATION FOR THE RESIDENTIAL SECTOR

The core equation used in the residential sector energy efficiency technical potential analysis for each 

individual 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 

conversion 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 consumption 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 not 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 cumulative 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 partially dependent 

on other measures that affect the efficiency of the system being used to heat the building, such as a highefficiency furnace; the more efficient the furnace, the less energy saved from the installation of the 

insulation. In the second step, 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 supply 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 a 
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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 of 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. Total 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, energy 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,

Levelized Cost per kWh Saved = Initial Cost x CRR/Annual kWh Savings

5.4.2 CORE EQUATION FOR THE COMMERCIAL AND INDUSTRIAL SECTOR

The core equation utilized in the commercial sector technical potential analysis for each individual 

efficiency measure 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 

from the SWE Team upon request.
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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

End 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 measure for each EDC is shown below in Equation 5-3.

Equation 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 Square 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 market 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), Pennsylvania 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 an industrial market segment.

 Saturation Share = the fraction of the 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 Factor = 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 Factor = 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 

estimate 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 type, 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 segments:

 Warehouse

 Retail
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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 Allied 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 which 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 highefficiency 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-effectiveness (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 construction 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 used as a basis for determining electric savings for this 

market segment in Pennsylvania. 

5.5 ECONOMIC POTENTIAL

Economic potential refers to the subset of the technical potential that is economically cost-effective

(based on screening with the Total Resource Cost) as compared to conventional supply-side energy 

resources. The SWE Team has calculated the TRC benefit/cost ratios for this study according to the 
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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 efficiency 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 

commercially 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 applied to the remaining measures that 

were cost effective. The TRC test is defined in greater detail in Section 5.6 below.

5.6 DETERMINING COST-EFFECTIVENESS

The SWE team utilized the 2009 and 2011 Pennsylvania PUC TRC Orders to determine costeffectiveness for energy efficiency measures in this potential study. The cost effectiveness test that was 

used is the Total Resource Cost Test (TRC).

5.6.1 THE TOTAL RESOURCE COST TEST

The TRC test measures the net costs of a demand-side management or energy efficiency measure 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, the 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, the 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 the 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, the costs in the TRC test (incremental or full cost depending on whether 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 administration 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”, any tax credits are considered a benefit for the 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 over two-thirds of all evaluation studies 

reviewed in a recent best-practice study had a net-to-gross value of approximately 1.0.
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5.6.2 AVOIDED COSTS

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 energy, transmission, distribution, and capacity avoided costs. The discount rate 

used in the calculation of the Pennsylvania TRC Test is the utility’s weighted average cost of capital.

Avoided energy costs are time and seasonally differentiated where possible.

5.7 ACHIEVABLE POTENTIAL

Achievable potential was determined as the amount of energy use that can realistically be saved assuming 

an aggressive program marketing strategy and with two program incentive scenarios. Achievable 

potential takes into account barriers 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 potential scenarios:

 Scenario #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 Year 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 selected achievable potential scenarios with different anticipated 

penetration curves or market acceptance models 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 expected 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 

scenarios 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 of 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) As equipment replacements 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) At any time in the life of the equipment or building (referred to as “retrofit”). 

3) When a new home or building 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; however, 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.
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In the residential base case scenario, 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 2023. The time-frame in which the market penetration 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 efficiency 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 the 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 assumes fewer adoption barriers, and the target market 

penetration for retrofit opportunities can likely be achieved by 2023 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 equation 5-4) from 2013-2023 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 Penetration 

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).

 Applicability 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 given 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 based on the replace 

on burnout approach. 

5.7.1 ACHIEVABLE POTENTIAL MARKET PENETRATION RATES FOR THE RESIDENTIAL 

SECTOR

The market penetration factor for replace on burnout measures was developed through two steps. When 

the total number of measures calculated to turn over (or become eligible for replacement) on an annual 
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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 efficiency 

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” annual 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 simplifies 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 turnover. 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 expire 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 savings 

(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 PROGRAM POTENTIAL

While the identified achievable potential includes energy efficiency 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 much 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 “setasides” for the low-income and institutional sectors. 

The SWE team analyzed 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 ending 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 

economic 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 effective 

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 with 
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a single factor until the utility costs for the program potential scenario are equal to 2% of 

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) Annual 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.
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6 RESIDENTIAL ENERGY EFFICIENCY POTENTIAL ESTIMATES

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 summarizes the technical, economic, achievable and program savings potential (as a % 

of forecast 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 on incentives that are set 

at 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 10.4% of projected residential sales in the year 2010 for achievable potential scenario #1, 

and 6.9% of projected residential sales in the year 2010 for achievable potential scenario #2.46 

Figure 6-1: Summary of Residential Energy Efficiency Potential as a % of 2010 Sales Forecasts – Statewide

6.1 ENERGY EFFICIENCY MEASURES EXAMINED

317 residential electric energy efficiency programs or measures were included in the energy savings 

analysis for the residential sector.47 Table 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 Reference 

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 potential 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 adding 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-family attached; single-family detached, 

and multi-family).
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savings, useful life, measure cost, and the Total Resource Cost (TRC) benefit-cost ratios for each 

measure.

Table 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

* Freezers

* 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 Equipment

* 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 

Equipment

* 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

Lighting Indoor/Outdoor Lighting * Incandescent to CFL

* Incandescent to LED

* Nightlights

* Energy Star Torchieres

* Ceiling fan with Energy Star Light Fixture

* Energy Star Holiday Lights

* Interior & Exterior Fixtures

* Lighting Controls

Other Miscellaneous 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 Pump WH

* Solar WH (w/ Electric Back Up)

* Tank Wrap

* Pipe Wrap

* Low Flow Showerheads

* Faucet Aerators

6.2 RESIDENTIAL SECTOR SAVINGS METHODOLOGY OVERVIEW

The portfolio of measures examined in the residential sector includes retrofit, early retirement, and 

replace-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 of 
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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 multifamily 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 

were 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 residential 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 Approach

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 construction). 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 heating. 

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 six 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 

utility 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 

below.
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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 number, 

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 the 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 used 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 analysis 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 same 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 heaters 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 (Energy 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. While 

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 40-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).
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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6.3 TECHNICAL AND ECONOMIC POTENTIAL SAVINGS

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 be 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 2010.

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 nonelectric benefits, nor do these costs include program administrative costs. 

Technical Potential, Cumulative 

Savings (MWh), 2016

Technical Potential, Cumulative 

Savings (MWh), 2018

Technical Potential, Cumulative 

Savings (MWh), 2023

End Use MWh

Percent 

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 2,887,520 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% 1,291 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%
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Figure 6-3: Residential Electric Efficiency Supply Curve for Pennsylvania

Table 6-3 presents the residential sector economic potential savings by 2016, 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 2010.

Table 6-3: Statewide Residential Sector Economic 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

Percent 

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% 375 619,268 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 incorporating the various measure assumptions 

(savings, cost, and useful life, etc.) into the GDS cost-effectiveness screening tool.49 Any programmatic 

 

49 The cost-effectiveness of a measure (used for determining the economic energy efficiency 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.
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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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 

installed. 

6.4 ACHIEVABLE POTENTIAL SAVINGS IN THE RESIDENTIAL SECTOR

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 ESTIMATING ACHIEVABLE SAVINGS IN THE RESIDENTIAL SECTOR

In the residential achievable potential scenario #1, achievable potential represents the 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 all 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) was 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, resulting 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 

retirement 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 curves 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. 

For 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 demand 

savings remain consistent through similar improvements to high efficiency measure standards over time.

6.4.2 RESIDENTIAL ACHIEVABLE SAVINGS POTENTIAL

Tables 6-4, 6-5, and 6-6 present the statewide cumulative annual energy savings by end-use for the 

residential sector for 2016, 2018 and 2023 for both achievable potential scenarios.
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Table 6-4: Statewide Achievable Potential in 2016

Achievable 1 Potential, Cumulative 

Savings, 2016

Achievable 2 Potential, Cumulative 

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

 

2,227,067 100% 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 Total 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) 696,849 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%
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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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 

Total 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 efficiency of lighting) have decreased 

to 19% of the achievable potential savings. 

Figure 6-4: Residential Sector 2018 Achievable Potential Savings for Scenario #1 by End Use
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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Figure 6-5: Residential 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 potential scenarios.

Table 6-7: Cumulative Annual Residential Energy Savings in Achievable Potential Scenario 1 by End Use for 

Pennsylvania 

End Use 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Water Heating 77,643 166,642 266,991 378,691 501,738 630,725 765,654 905,264 1,044,717 1,161,817

Lighting 274,355 588,251 941,689 1,334,668 1,767,189 2,230,938 2,509,218 2,268,169 1,995,663 1,693,874

Appliances 98,653 210,264 334,829 472,355 622,834 783,852 955,403 1,105,577 1,207,872 1,300,818

Electronics 29,487 77,120 142,901 226,830 320,819 414,056 510,756 611,358 715,858 824,260

Pools 7,717 16,386 26,007 36,576 48,098 60,571 73,994 88,368 102,741 117,115

HVAC (Envelope) 103,930 220,658 350,212 492,566 647,752 815,733 996,489 1,190,103 1,383,717 1,577,332

HVAC (Equipment) 150,713 321,895 513,533 725,634 932,802 1,150,668 1,379,240 1,598,691 1,811,102 2,019,229

Whole House 28,151 73,630 121,895 164,924 207,952 250,982 294,010 337,038 380,066 423,094

New Construction 1,723 5,106 10,307 17,330 26,196 37,099 49,993 64,851 80,516 96,653

Total 772,374 1,679,955 2,708,365 3,849,575 5,075,381 6,374,624 7,534,758 8,169,419 8,722,254 9,214,192

% of 2010 Sales 1.4% 3.1% 5.0% 7.1% 9.4% 11.8% 13.9% 15.1% 16.1% 17.0%

Table 6-8: Cumulative Annual Residential Energy Savings in Achievable Potential Scenario 2 by End Use for 

Pennsylvania

End Use 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Water Heating 66,282 132,564 198,846 265,127 331,409 397,691 463,973 529,142 594,311 641,359

Lighting 236,446 474,525 714,236 955,580 1,198,556 1,443,164 1,501,678 1,316,125 1,128,399 940,672

Appliances 85,686 171,373 257,059 342,746 428,432 514,119 599,805 657,511 676,696 695,880

Electronics 19,281 46,501 81,661 124,759 170,510 212,920 256,597 301,980 349,071 397,866

Pools 6,766 13,531 20,297 27,063 33,829 40,594 47,360 54,126 60,892 67,657

HVAC (Envelope) 91,126 182,251 273,377 364,502 455,628 546,753 637,879 729,005 820,130 911,256

HVAC (Equipment) 130,256 260,511 390,767 521,022 629,916 738,809 847,702 939,787 1,031,873 1,123,958

Whole House 18,408 44,396 68,458 87,283 106,108 124,933 143,756 162,582 181,407 200,231

New Construction 1,513 4,149 7,809 12,306 17,514 23,418 29,917 36,903 44,266 51,862

Total 655,764 1,329,802 2,012,509 2,700,389 3,371,902 4,042,401 4,528,667 4,727,161 4,887,043 5,030,742

% of 2010 Sales 1.2% 2.5% 3.7% 5.0% 6.2% 7.5% 8.4% 8.7% 9.0% 9.3%

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 $212/MWh to $217/MWh, increasing slightly over the longer time window.
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Table 6-9: Residential 3-Year and 5-Year Acquisition Costs Under the Achievable 2 Scenario

EDC

3-yr Acquisition 

Cost 3-yr Savings 3-yr $/MWh

5-yr Acquisition 

Cost 5-yr Savings 5-yr $/MWh

Duquesne $ 46,339,287 209,446 $ 221.25 $ 80,635,783 348,829 $ 231.16 

Met-Ed $ 34,323,422 163,781 $ 209.57 $ 58,658,760 275,134 $ 213.20 

Penelec $ 37,658,610 178,791 $ 210.63 $ 64,223,102 299,700 $ 214.29 

PennPower $ 10,508,091 49,716 $ 211.36 $ 17,891,410 83,214 $ 215.01 

PPL $ 97,084,675 446,283 $ 217.54 $ 166,636,994 746,746 $ 223.15 

PECO $ 101,287,903 492,773 $ 205.55 $ 173,189,394 828,842 $ 208.95 

West Penn $ 49,015,939 232,102 $ 211.18 $ 84,052,544 391,146 $ 214.89 

Statewide $ 376,217,926 1,772,893 $ 212.21 $ 645,287,988 2,973,611 $ 217.00

6.4.3 ACHIEVABLE POTENTIAL BENEFITS & COSTS

For the Scenario #1 achievable potential 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 saved was assigned to each 

measure in order to calculate the achievable cost-effectiveness tests. The administrative cost per first year 

kWh saved 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. Tables 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 Achievable 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 $ 865,952,036.24 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 2.10
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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 $ 274,010,376.59 $ 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 

Ratio

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 2.13
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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 RESIDENTIAL SAVINGS BY EDC

This next section summarizes 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 Phase 1 of Act 129. 

Table 6-16: 3-Year Potential Savings by Scenario 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 2,997,353 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 2,302,869 366,589 270,787

% 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 1,530.5 897.2 150.7 110.9
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3-Year Savings

Technical

Potential

Economic

Potential

Achievable Potential 

Scenario#1

Achievable Potential 

Scenario#2

PPL Territory

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

Table 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 1,540.1 897.9 270.4 177.1

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 56% 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-wide

Energy (MWh) 22,824,765 19,410,211 10,238,971 5,590,301
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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 MWh 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: Assumes 100% Incentives

*Achievable Scenario#2: Assumes 56% in the residential sector
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7 COMMERCIAL & INDUSTRIAL ENERGY EFFICIENCY POTENTIAL ESTIMATES

This section provides an overview of findings for the entire non-residential sector in Pennsylvania. The 

section 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 NON-RESIDENTIAL ENERGY EFFICIENCY POTENTIAL

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 tables 

in the technical, economic and achievable sections present the respective potential for efficiency savings 

expressed as cumulative savings (MWh), percentage of sales, and demand (MW). Data is provided for a 

3, 5, and 10-year horizon for the entire state. 

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 

ACT 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 potentials without EISA.

7.1.1 SUMMARY OF FINDINGS

Figure 7-1 illustrates the estimated savings potential for each of the four scenarios included in this study 

for all seven EDCs combined (statewide). 

Figure 7-1: Summary of Non-Residential Energy Efficiency Potential as a % of 2010 Sales Forecasts –

Statewide

8.0%

6.6%

3.6%

1.9%

13.3%

11.0%

6.9%

3.2%

24.3%

20.7%

15.6%

6.1%

0%

5%

10%

15%

20%

25%

30%

Technical Economic Achievable #1 Achievable #2

% of Non-Residential Sales

3 Year 5 Year 10 Year
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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Expressed as the cumulative 3-year savings, the theoretical technical savings potential is 8.0% of Act 129 

Phase 1 forecasted 2009/10 sector sales50. 3-year achievable potential scenario 2 savings is 1.9% of sector 

sales. The 5-year savings technical 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 achievable 

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 Institutional sector as a percentage of total non-residential sales for 

the four scenarios that were modeled. Institutional 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

Nonres Sales 

(MWh)

3 yr. Inst. 

Savings 

(MWH)

3 yr % of 

Sales

5 yr. Inst. Savings 

(MWH) 5 yr % of Sales

Technical 92,469,242 615,008 0.7% 1,036,562 1.1%

Economic 92,469,242 473,542 0.5% 797,965 0.9%

Ach 1 92,469,242 271,021 0.3% 513,068 0.6%

Ach 2 92,469,242 138,516 0.1% 233,414 0.3%

Institutional Savings as a Percent of Non-residential Sales

7.1.2 TECHNICAL POTENTIAL

Technical potential represents the quantification of savings that can be realized if energy-efficiency 

measures passing the qualitative 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 2018

across 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 equipment represents the smallest share with less than 1 percent. Ten-year technical potential is 

estimated to be just over 22 million MWh (or 24.3% of sector sales) across the state. The Technical 

scenario also suggests a 3 year reduction in statewide load of 990 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.
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Table 7-2: Statewide Non-Residential Sector Technical Potential kWh Savings By End Use

End Use MWh % of Total MW MWh % of Total MW MWh % of Total MW

Lighting 3,099,448 42.1% 339 5,153,785 41.8% 563 9,050,315 40.3% 993

HVAC 862,549 11.7% 256 1,457,755 11.8% 432 2,981,561 13.3% 884

Plug Load 735,936 10.0% 7 9 1,266,122 10.3% 135 1,525,471 6.8% 163

Refrigeration 519,088 7.1% 1 8 869,513 7.0% 3 0 1,729,217 7.7% 5 9

Cooking 24,476 0.3% 3 40,848 0.3% 5 80,178 0.4% 9

Water Heating 71,948 1.0% 7 119,933 1.0% 1 1 236,056 1.1% 2 2

Motors 1,502,240 20.4% 235 2,520,301 20.4% 394 5,075,709 22.6% 791

Process 381,767 5.2% 3 6 642,013 5.2% 6 0 1,230,389 5.5% 114

Other 156,521 2.1% 1 8 267,069 2.2% 3 0 560,017 2.5% 6 3

Total 7,353,972 100% 990 12,337,338 100% 1,662 22,468,914 100% 3,099

% of Sales 8.0% 13.3% 24.3%

Technical Potential, Cumulative Savings 

(MWh), 2016

Technical Potential, Cumulative Savings 

(MWh), 2018

Technical Potential, Cumulative Savings 

(MWh), 2023

7.1.3 ECONOMIC POTENTIAL

Economic Potential 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 feasible to save slightly more than 6 million MWh during the 3 

year period from 2013 to 2016, and more than 10 million MWh during the 5 year period from 2013 to 

2018, representing 6.6% and 11.0% 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 

suggests 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

End Use MWh % of Total MW MWh % of Total MW MWh % of Total MW

Lighting 2,465,635 40.7% 261 4,100,681 40.3% 434 7,521,256 39.2% 814

HVAC 708,095 11.7% 214 1,195,926 11.8% 361 2,443,459 12.7% 738

Plug Load 476,469 7.9% 5 1 819,779 8.1% 8 8 1,045,605 5.5% 112

Refrigeration 460,691 7.6% 1 8 771,791 7.6% 2 9 1,535,135 8.0% 5 7

Cooking 11,884 0.2% 1 19,819 0.2% 2 38,947 0.2% 5

Water Heating 41,790 0.7% 4 69,656 0.7% 6 137,073 0.7% 1 3

Motors 1,430,047 23.6% 214 2,400,095 23.6% 358 4,839,459 25.2% 720

Process 309,474 5.1% 2 9 520,426 5.1% 4 9 1,061,486 5.5% 9 9

Other 156,887 2.6% 1 8 267,682 2.6% 3 0 561,262 2.9% 6 3

Total 6,060,971 100% 809 10,165,854 100% 1,359 19,183,681 100% 2,621

% of Sales

Economic Potential, Cumulative Savings 

(MWh), 2016

Economic Potential, Cumulative Savings 

(MWh), 2018

Economic Potential, Cumulative Savings 

(MWh), 2023

6.6% 11.0% 20.7%

7.1.4 ACHIEVABLE POTENTIAL

Achievable Potential 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. 
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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 it is feasible to save 3.3 million MWh during the 3 year period 

from 2013 to 2016 across 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

End Use MWh % of Total MW MWh % of Total MW

Lighting 1,329,259 39.8% 142 721,220 40.7% 7 6

HVAC 457,912 13.7% 107 207,129 11.7% 6 3

Plug Load 263,770 7.9% 2 8 139,372 7.9% 1 5

Refrigeration 230,980 6.9% 1 3 134,755 7.6% 5

Cooking 4,800 0.1% 1 3,476 0.2% 0

Water Heating 16,868 0.5% 2 12,224 0.7% 1

Motors 787,430 23.6% 111 418,302 23.6% 6 3

Process 178,779 5.3% 1 7 90,525 5.1% 9

Other 72,388 2.2% 8 45,890 2.6% 5

Total 3,342,188 100% 429 1,772,893 100% 237

% of Sales 3.6% 1.9%

Achievable 1 Potential, Cumulative Savings 

(MWh), 2016

Achievable 2 Potential, Cumulative Savings 

(MWh), 2016

Table 7-5: Non-Residential Achievable Savings Potential in 2018

End Use MWh % of Total MW MWh % of Total MW

Lighting 2,528,553 39.7% 270 1,199,486 40.3% 127

HVAC 835,499 13.1% 213 349,827 11.8% 106

Plug Load 517,473 8.1% 5 5 239,793 8.1% 2 6

Refrigeration 454,904 7.1% 2 3 225,754 7.6% 9

Cooking 10,216 0.2% 1 5,797 0.2% 1

Water Heating 35,891 0.6% 3 20,374 0.7% 2

Motors 1,503,216 23.6% 216 702,051 23.6% 105

Process 336,541 5.3% 3 2 152,230 5.1% 1 4

Other 150,349 2.4% 1 7 78,298 2.6% 9

Total 6,372,642 100% 831 2,973,611 100% 398

% of Sales

Achievable 1 Potential, Cumulative Savings 

(MWh), 2018

Achievable 2 Potential, Cumulative Savings 

(MWh), 2018

6.9% 3.2%

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.
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Table 7-6: Non-Residential Achievable Savings Potential in 2023

End Use MWh % of Total MW MWh % of Total MW

Lighting 5,693,217 39.4% 608 2,200,040 39.2% 238

HVAC 1,895,902 13.1% 530 714,751 12.7% 216

Plug Load 851,994 5.9% 9 1 305,849 5.5% 3 3

Refrigeration 1,103,747 7.6% 4 6 449,037 8.0% 1 7

Cooking 26,475 0.2% 3 11,392 0.2% 1

Water Heating 93,195 0.6% 9 40,094 0.7% 4

Motors 3,576,676 24.8% 514 1,415,588 25.2% 210

Process 796,443 5.5% 7 1 310,497 5.5% 2 9

Other 399,892 2.8% 4 4 164,171 2.9% 1 9

Total 14,437,541 100% 1,917 5,611,418 100% 767

% of Sales

Achievable 2 Potential, Cumulative Savings 

(MWh), 2023

15.6% 6.1%

Achievable 1 Potential, Cumulative Savings 

(MWh), 2023

Figure 7-2 shows 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 potential 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

Lighting

40.3%

HVAC

11.8%

Plug Load

8.1%

Refrigeration

7.6%

Cooking

0.2%

Water 

Heating

0.7%

Motors

23.6%

Process

5.1%

Other

2.6%

Figure 7-3 shows the 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, with less than 2% of savings potential 

coming from new construction.
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Figure 7-3: Non-Residential Achievable 1 Savings in 2018 by Vintage

Figure 7-4 shows a breakdown of estimated 2018 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. 
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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Table 7-7: Cumulative Annual Non-Residential Energy Savings in Achievable Potential Scenario 1 by End Use

for Pennsylvania

End Use 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Lighting 380,861 823,359 1,329,259 1,899,335 2,528,553 3,220,643 3,864,495 4,491,939 5,101,193 5,693,217

HVAC 138,759 291,025 457,912 639,720 835,499 1,044,903 1,255,587 1,467,832 1,681,176 1,895,902

Plug Load 73,808 161,219 263,770 382,505 517,473 601,158 677,340 745,007 803,112 851,994

Refrigeration 63,497 140,586 230,980 336,111 454,904 585,709 715,640 845,379 974,604 1,103,747

Cooking 1,160 2,761 4,800 7,295 10,216 13,531 16,810 20,063 23,281 26,475

Water Heating 4,095 9,721 16,868 25,621 35,891 47,553 59,092 70,554 81,913 93,195

Motors 225,427 487,486 787,430 1,126,520 1,503,216 1,916,375 2,330,036 2,744,918 3,160,284 3,576,676

Process 52,118 111,583 178,779 253,802 336,541 427,167 518,465 610,491 703,126 796,443

Other 18,655 42,721 72,388 108,254 150,349 198,539 247,478 297,363 348,123 399,892

Total 958,380 2,070,461 3,342,188 4,779,163 6,372,642 8,055,579 9,684,942 11,293,546 12,876,811 14,437,541

Table 7-8: Cumulative Annual Non-Residential Energy Savings in Achievable Potential Scenario 2 by End Use

for Pennsylvania

End Use 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Lighting 241,496 481,526 721,220 961,202 1,199,486 1,437,653 1,627,424 1,818,103 2,008,888 2,200,040

HVAC 68,234 137,159 207,129 278,179 349,827 421,891 494,395 567,436 640,856 714,751

Plug Load 45,227 91,533 139,372 188,895 239,793 252,839 266,160 279,464 292,569 305,849

Refrigeration 44,943 89,921 134,755 180,222 225,754 270,767 315,479 360,126 404,596 449,037

Cooking 1,160 2,319 3,476 4,640 5,797 6,938 8,066 9,185 10,293 11,392

Water Heating 4,095 8,168 12,224 16,307 20,374 24,387 28,358 32,303 36,211 40,094

Motors 138,806 278,085 418,302 559,913 702,051 844,231 986,583 1,129,356 1,272,296 1,415,588

Process 29,945 60,074 90,525 121,275 152,230 183,417 214,836 246,505 278,383 310,497

Other 15,017 30,318 45,890 61,924 78,298 94,881 111,722 128,889 146,356 164,171

Total 588,922 1,179,103 1,772,893 2,372,556 2,973,611 3,537,006 4,053,024 4,571,367 5,090,447 5,611,418

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 sector 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 Achievable 2 Scenario

EDC 3-yr Acquisition 

Cost 3-yr Savings 3-yr $/MWh 5-yr Acquisition 

Cost

5-yr Savings 5-yr $/MWh

Duquesne $ 46,339,287 209,446 $ 221.25 $ 80,635,783 348,829 $ 231.16 

Met-Ed $ 34,323,422 163,781 $ 209.57 $ 58,658,760 275,134 $ 213.20 

Penelec $ 37,658,610 178,791 $ 210.63 $ 64,223,102 299,700 $ 214.29 

PennPower $ 10,508,091 49,716 $ 211.36 $ 17,891,410 83,214 $ 215.01 

PPL $ 97,084,675 446,283 $ 217.54 $ 166,636,994 746,746 $ 223.15 

PECO $ 101,287,903 492,773 $ 205.55 $ 173,189,394 828,842 $ 208.95 

West Penn $ 49,015,939 232,102 $ 211.18 $ 84,052,544 391,146 $ 214.89 

Statewide $ 376,217,926 1,772,893 $ 212.21 $ 645,287,988 2,973,611 $ 217.00

7.1.5 ACHIEVABLE POTENTIAL BENEFITS AND COSTS

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 the 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 Resource 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 Achievable 

Potential #2 scenario.
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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-Year 

Period $13,918,067,802.87 $7,666,846,815.75 1.82
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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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 1.58

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 $176,076,370 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 COMMERCIAL ENERGY EFFICIENCY POTENTIAL

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 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 (MW). Data is provided for a 3-year, 5-year, and 10-year horizons for the entire 

state. 
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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7.2.1 SUMMARY OF FINDINGS

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 scenario 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 that 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 Forecasts – Statewide

10.3%

8.0%

4.4%

2.4%

17.2%

13.5%

8.4%

3.9%

30.4%

24.7%

18.7%

7.2%

0%

5%

10%

15%

20%

25%

30%

35%

Technical Economic Achievable #1 Achievable #2

% of Commercial Sales

3 Year 5 Year 10 Year

7.2.2 TECHNICAL POTENTIAL

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 across 

the state. Ten-year technical potential 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.
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Table 7-16: Statewide Commercial Sector Technical Potential kWh Savings By End Use

End Use MWh % of Total MW MWh % of Total MW MWh % of Total MW

Lighting 2,827,882 49.3% 302 4,696,985 48.8% 501 8,118,651 47.8% 867

HVAC 648,299 11.3% 226 1,097,394 11.4% 382 2,246,723 13.2% 782

Plug Load 735,936 12.8% 7 9 1,266,122 13.2% 135 1,525,471 9.0% 163

Refrigeration 519,088 9.0% 1 8 869,513 9.0% 3 0 1,729,217 10.2% 5 9

Cooking 24,476 0.4% 3 40,848 0.4% 5 80,178 0.5% 9

Water Heating 71,948 1.3% 7 119,933 1.2% 1 1 236,056 1.4% 2 2

Motors 804,454 14.0% 156 1,346,530 14.0% 261 2,681,161 15.8% 522

Other 103,734 1.8% 1 2 178,278 1.9% 2 1 378,937 2.2% 4 4

Total 5,735,817 100% 802 9,615,602 100% 1,347 16,996,395 100% 2,469

% of Sales

Technical Potential, Cumulative Savings 

(MWh), 2016

Technical Potential, Cumulative Savings 

(MWh), 2018

Technical Potential, Cumulative Savings 

(MWh), 2023

10.3% 17.2% 30.4%

7.2.3 ECONOMIC POTENTIAL

Table 7-17 shows that it is economically feasible 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 from 2013 to 2018 across the 

state. Ten-year economic potential is estimated of 13.8 million MWh (or 24.7% of sector sales) across 

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

End Use MWh % of Total MW MWh % of Total MW MWh % of Total MW

Lighting 2,194,084 48.7% 224 3,643,906 48.3% 372 6,589,643 47.6% 688

HVAC 494,165 11.0% 184 836,100 11.1% 311 1,709,712 12.4% 637

Plug Load 476,469 10.6% 5 1 819,779 10.9% 8 8 1,045,605 7.6% 112

Refrigeration 460,691 10.2% 1 8 771,791 10.2% 2 9 1,535,135 11.1% 5 7

Cooking 11,884 0.3% 1 19,819 0.3% 2 38,947 0.3% 5

Water Heating 41,790 0.9% 4 69,656 0.9% 6 137,073 1.0% 1 3

Motors 720,690 16.0% 135 1,206,843 16.0% 226 2,405,230 17.4% 451

Other 103,734 2.3% 1 2 178,278 2.4% 2 1 378,937 2.7% 4 4

Total 4,503,506 100% 629 7,546,171 100% 1,055 13,840,281 100% 2,006

% of Sales

Economic Potential, Cumulative Savings 

(MWh), 2016

Economic Potential, Cumulative Savings 

(MWh), 2018

Economic Potential, Cumulative Savings 

(MWh), 2023

8.0% 13.5% 24.7%

7.2.4 ACHIEVABLE POTENTIAL

Achievable Potential estimates 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.

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 it is feasible to save almost 2.5 million MWh during the 3 year period 

from 2013 to 2016 in the commercial sector, representing 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 

estimating a demand reduction of 309 MW.
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Table 7-18: Commercial Achievable Savings Potential in 2016

End Use MWh % of Total MW MWh % of Total MW

Lighting 1,198,102 48.3% 124 641,790 48.7% 6 6

HVAC 336,731 13.6% 9 0 144,552 11.0% 5 4

Plug Load 263,770 10.6% 2 8 139,372 10.6% 1 5

Refrigeration 230,980 9.3% 1 3 134,755 10.2% 5

Cooking 4,800 0.2% 1 3,476 0.3% 0

Water Heating 16,868 0.7% 2 12,224 0.9% 1

Motors 384,805 15.5% 6 7 210,808 16.0% 3 9

Other 42,083 1.7% 5 30,342 2.3% 4

Total 2,478,139 100% 330 1,317,319 100% 184

% of Sales

Achievable 1 Potential, Cumulative Savings 

(MWh), 2016

Achievable 2 Potential, Cumulative Savings 

(MWh), 2016

4.4% 2.4%

Table 7-19: Commercial Achievable Savings Potential in 2018

End Use MWh % of Total MW MWh % of Total MW

Lighting 2,265,459 48.0% 234 1,065,877 48.3% 109

HVAC 605,826 12.8% 181 244,575 11.1% 9 1

Plug Load 517,473 11.0% 5 5 239,793 10.9% 2 6

Refrigeration 454,904 9.6% 2 3 225,754 10.2% 9

Cooking 10,216 0.2% 1 5,797 0.3% 1

Water Heating 35,891 0.8% 3 20,374 0.9% 2

Motors 740,548 15.7% 132 353,012 16.0% 6 6

Other 93,036 2.0% 1 1 52,146 2.4% 6

Total 4,723,354 100% 640 2,207,328 100% 309

% of Sales 8.4% 3.9%

Achievable 1 Potential, Cumulative Savings 

(MWh), 2018

Achievable 2 Potential, Cumulative Savings 

(MWh), 2018

Table 7-20 shows 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 Achievable 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 over the 10-year horizon.
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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Table 7-20: Commercial Achievable Savings Potential in 2023

End Use MWh % of Total MW MWh % of Total MW

Lighting 5,026,511 48.0% 523 1,927,539 47.6% 201

HVAC 1,348,396 12.9% 458 500,122 12.4% 186

Plug Load 851,994 8.1% 9 1 305,849 7.6% 3 3

Refrigeration 1,103,747 10.5% 4 6 449,037 11.1% 1 7

Cooking 26,475 0.3% 3 11,392 0.3% 1

Water Heating 93,195 0.9% 9 40,094 1.0% 4

Motors 1,759,177 16.8% 323 703,550 17.4% 132

Other 263,596 2.5% 3 1 110,839 2.7% 1 3

Total 10,473,092 100% 1,484 4,048,421 100% 587

% of Sales

Achievable 1 Potential, Cumulative Savings 

(MWh), 2023

Achievable 2 Potential, Cumulative Savings (MWh), 

2023

18.7% 7.2%

Figure 7-6 shows a breakdown of the estimated cumulative 5-year efficiency savings potential, 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 Achievable 2 savings. 

Figure 7-6: Commercial Sector 2018 Achievable Potential Savings for Scenario #1 by End Use

Lighting

48.3%

HVAC

11.1%

Plug Load

10.9%

Refrigeration

10.2%

Cooking

0.3%

Water Heating

0.9% Motors

16.0%

Other

2.4%

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 shows the most potential for savings, 

representing around 26.6% of all Achievable 2 savings. 
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Table 7-21: Commercial Achievable 2 Scenario Savings Potential by Segment

Segment MWh % of Total MW MWh % of Total MW

Grocery 84,269 6.4% 7 140,738 6.4% 1 2

Healthcare 100,313 7.6% 1 5 168,817 7.6% 2 5

Institutional 138,516 10.5% 2 5 233,414 10.6% 4 2

Lodging 40,817 3.1% 7 68,381 3.1% 1 1

Misc 288,033 21.9% 4 0 481,486 21.8% 6 8

Office 349,980 26.6% 4 9 587,073 26.6% 8 2

Restaurant 79,611 6.0% 1 0 133,308 6.0% 1 7

Retail 144,428 11.0% 2 0 240,809 10.9% 3 3

Warehouse 91,352 6.9% 1 1 153,303 6.9% 1 8

Total 1,317,319 100.0% 184 2,207,328 100.0% 309

Achievable 2 - 3 Year Cumulative Savings by Segment Achievable 2 - 5 Year Cumulative Savings 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.
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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Table 7-22: Commercial 3-Year and 5-Year Acquisition Costs Under the Achievable 2 Scenario

EDC 3-yr Acquisition 

Cost 3-yr Savings 3-yr $/MWh 5-yr Acquisition Cost 5-yr Savings 5-yr $/MWh

Duquesne $ 39,386,251 177,330 $ 222.11 $ 68,504,587 295,239 $ 232.03 

Met-Ed $ 21,748,075 103,364 $ 210.40 $ 37,167,490 173,622 $ 214.07 

Penelec $ 91,185,145 444,053 $ 205.35 $ 155,876,073 746,694 $ 208.76 

PennPower $ 22,677,947 107,859 $ 210.26 $ 38,628,933 180,559 $ 213.94 

PPL $ 6,036,983 28,582 $ 211.21 $ 10,264,647 47,771 $ 214.87 

PECO $ 68,910,339 314,310 $ 219.24 $ 118,041,698 524,824 $ 224.92 

West Penn $ 30,144,879 141,821 $ 212.56 $ 51,619,535 238,619 $ 216.33 

Statewide $ 280,089,620 1,317,319 $ 212.62 $ 480,102,962 2,207,328 $ 217.50

7.3 INDUSTRIAL ENERGY EFFICIENCY POTENTIAL

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 (MW). Data is provided for a 3, 5 and 10-year horizon for the entire state. 

7.3.1 SUMMARY OF FINDINGS

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). Expressed as the cumulative 3-year, 5-year, and 10-year

savings, the theoretical technical savings potential is between 4.3% and 15.0% of forecasted 2009/10 

sector sales used in Act 129 Phase 1 targets. Five-year Achievable 2 savings potential is estimated to be 

2.1% of sector sales.

Figure 7-8: Summary of Industrial Energy Efficiency Potential as a % of 2010 Sales Forecasts – Statewide

4.4% 4.3%

2.4%

1.2%

7.5%

7.2%

4.5%

2.1%

15.0% 14.6%

10.9%

4.3%

0%

2%

4%

6%

8%

10%

12%

14%

16%

Technical Economic Achievable #1 Achievable #2

% of Industrial Sales

3 Year 5 Year 10 Year
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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7.3.2 TECHNICAL POTENTIAL

Table 7-23 shows that it is technically 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 2018

across 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 15.0% of sector sales) across the state. The technical scenario 

estimates demand reductions between 187 and 630 MW, depending on the timeframe.

Table 7-23: Statewide Industrial Sector Technical Potential kWh Savings By End Use

End Use MWh % of Total MW MWh % of Total MW MWh % of Total MW

Lighting 271,566 16.8% 3 7 456,800 16.8% 6 2 931,664 17.0% 126

HVAC 214,250 13.2% 3 0 360,361 13.2% 5 0 734,838 13.4% 102

Motors 697,786 43.1% 7 9 1,173,771 43.1% 133 2,394,548 43.8% 269

Process 381,767 23.6% 3 6 642,013 23.6% 6 0 1,230,389 22.5% 114

Other 52,787 3.3% 5 88,792 3.3% 9 181,080 3.3% 1 8

Total 1,618,155 100% 187 2,721,736 100% 315 5,472,519 100% 630

% of Sales 4.4% 7.5% 15.0%

Technical Potential, Cumulative Savings 

(MWh), 2016

Technical Potential, Cumulative Savings 

(MWh), 2018

Technical Potential, Cumulative Savings 

(MWh), 2023

7.3.3 ECONOMIC POTENTIAL

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 estimated 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 energy demand.

Table 7-24: Statewide Industrial Sector Economic Potential kWh Savings By End Use

End Use MWh % of Total MW MWh % of Total MW MWh % of Total MW

Lighting 271,551 17.4% 3 7 456,775 17.4% 6 2 931,613 17.4% 126

HVAC 213,930 13.7% 3 0 359,825 13.7% 5 0 733,747 13.7% 102

Motors 709,357 45.5% 7 9 1,193,252 45.5% 133 2,434,229 45.6% 269

Process 309,474 19.9% 2 9 520,426 19.9% 4 9 1,061,486 19.9% 9 9

Other 53,153 3.4% 6 89,405 3.4% 9 182,325 3.4% 1 9

Total 1,557,465 100% 180 2,619,682 100% 304 5,343,401 100% 615

% of Sales

Economic Potential, Cumulative Savings 

(MWh), 2016

Economic Potential, Cumulative Savings 

(MWh), 2018

Economic Potential, Cumulative Savings 

(MWh), 2023

4.3% 7.2% 14.6%

7.3.4 ACHIEVABLE POTENTIAL

Achievable Potential estimates 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.

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 

scenario it is feasible to save almost 1.7 million MWh during the 5 year period from 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. The Achievable 1 scenario also suggests a 5 year 
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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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 Potential in 2016

End Use MWh % of Total MW MWh % of Total MW

Lighting 131,158 8.4% 1 8 79,430 5.1% 1 1

HVAC 121,182 7.8% 1 7 62,577 4.0% 9

Motors 402,625 25.9% 4 5 207,495 13.3% 2 3

Process 178,779 11.5% 1 7 90,525 5.8% 9

Other 30,305 1.9% 3 15,548 1.0% 2

Total 864,048 55% 100 455,574 29% 53

% of Sales

Achievable 1 Potential, Cumulative Savings 

(MWh), 2016

Achievable 2 Potential, Cumulative Savings 

(MWh), 2016

2.4% 1.2%

Table 7-26: Industrial Achievable Savings Potential in 2018

End Use MWh % of Total MW MWh % of Total MW

Lighting 263,094 10.0% 3 6 133,609 5.1% 1 8

HVAC 229,672 8.8% 3 2 105,253 4.0% 1 5

Motors 762,668 29.1% 8 5 349,039 13.3% 3 9

Process 336,541 12.8% 3 2 152,230 5.8% 1 4

Other 57,313 2.2% 6 26,152 1.0% 3

Total 1,649,289 63% 190 766,283 29% 89

% of Sales

Achievable 1 Potential, Cumulative Savings 

(MWh), 2018

Achievable 2 Potential, Cumulative Savings 

(MWh), 2018

4.5% 2.1%

Table 7-27 shows the estimated savings for both scenarios over a 10-year horizon. Under the Achievable 

1 scenario it is feasible 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 Potential in 2023

End Use MWh % of Total MW MWh % of Total MW

Lighting 666,706 12.5% 8 4 272,501 5.1% 3 7

HVAC 547,506 10.2% 7 2 214,629 4.0% 3 0

Motors 1,817,499 34.0% 191 712,038 13.3% 7 9

Process 796,443 14.9% 7 1 310,497 5.8% 2 9

Other 136,295 2.6% 1 4 53,332 1.0% 6

Total 3,964,449 74% 433 1,562,997 29% 180

% of Sales

Achievable 1 Potential, Cumulative Savings 

(MWh), 2023

4.3%

Achievable 2 Potential, Cumulative Savings 

(MWh), 2023

10.9%
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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Figure 7-9 shows 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 industrial 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 potential 

broken out by industrial segment. The metal and paper manufacturing segments show the most potential 

for savings, representing just over 50% of the savings potential in the industrial sector. 

Table 7-28: Industrial Achievable Potential Scenario 2 Savings by Segment

Segment MWh % of Total MW MWh % of Total MW

Mfg: Chemicals 29,736 6.5% 4 49,974 6.5% 6

Mfg: Computers 35,015 7.7% 4 58,919 7.7% 7

Mfg: Food 47,978 10.5% 6 80,675 10.5% 1 0

Mfg: Metals 115,137 25.3% 1 2 193,618 25.3% 2 0

Mfg: Paper 119,384 26.2% 1 4 200,821 26.2% 2 3

Mfg: Plastics 27,085 5.9% 3 45,571 5.9% 5

Mfg: Other 37,612 8.3% 5 63,248 8.3% 8

Mining 19,033 4.2% 2 32,095 4.2% 3

Other: Non-Mfg 24,594 5.4% 3 41,363 5.4% 5

Total 455,574 100.0% 53 766,283 100.0% 89

Achievable 2 - 3 Year Cumulative Savings by Segment Achievable 2 - 5 Year Cumulative Savings by Segment
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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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 achieve 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: Industrial 5-Year Acquisition Costs Under The Achievable 2 Scenario by EDC

EDC

3-yr Acquisition 

Cost 3-yr Savings 3-yr $/MWh 5-yr Acquisition Cost 5-yr Savings 5-yr $/MWh

Duquesne $ 6,953,035 32,117 $ 216.49 $ 12,131,196 53,590 $ 226.37 

Met-Ed $ 12,575,347 60,418 $ 208.14 $ 21,491,271 101,512 $ 211.71 

Penelec $ 10,102,758 48,720 $ 207.37 $ 17,313,321 82,148 $ 210.76 

PennPower $ 14,980,663 70,932 $ 211.20 $ 25,594,169 119,141 $ 214.82 

PPL $ 4,471,108 21,134 $ 211.56 $ 7,626,763 35,443 $ 215.19 

PECO $ 28,174,335 131,973 $ 213.49 $ 48,595,296 221,923 $ 218.97 

West Penn $ 18,871,060 90,281 $ 209.03 $ 32,433,009 152,527 $ 212.64 

Statewide $ 96,128,306 455,574 $ 211.00 $ 165,185,025 766,283 $ 215.57

7.4 ENERGY EFFICIENCY MEASURES EXAMINED

For the non-residential sector, there were 262 total measure 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 count of the individual measures included, many measures had overlap 

between different segments and were counted as one measure52. 

Table 7-30 provides a brief description 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 the 

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 that were applicable to multiple segments within the model.
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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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

Fluorescent 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

Motor 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

Building 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 Heaters
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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Table 7-31: Measures and Programs Included in the Industrial 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 Controllers

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 Improvements

Efficient Pump Systems

Fan 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

Manufacturing 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-Chemical Equipment Upgrades

Process Heating Heating System Upgrades Efficient Heating Equipment

Improved Heating Controls

Heating System Maintenance

7.5 NON-RESIDENTIAL SAVINGS 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 Phase 1 of Act 129. 

Table 7-32: 3-Year Potential Savings by Sector, 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 Sales 8.0% 6.6% 3.6% 1.9%

Summer MW 1,444.7 1,248.1 788.3 365.1 

Duquesne Territory
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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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 Territory
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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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) 1,362,702 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 MWh 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 sector
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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Table 7-33: 5-Year Potential Savings by Sector, Scenario, and EDC (2018)

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-Ed 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 7,546,171 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 195.8 151.2 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 Territory
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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 2010 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 Sales 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 Territory
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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 sector

Table 7-34: 10-Year Potential Savings by Sector, Scenario, and EDC (2023)

10-Year Savings

Technical

Potential

Economic

Potential

Achievable Potential 

Scenario#1

Achievable Potential 

Scenario#2

NON-RESIDENTIAL

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 1,676,096 645,319 

% 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 

Penelec 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 Sales 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

Energy (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 1,398,558 535,880 
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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 630.1 614.8 432.7 179.8 

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 MWh 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

Energy (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 1,075,114 800,272 314,482 
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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%

Summer 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 1,147,163 452,856 

% 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 sector
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8 PROGRAM ENERGY EFFICIENCY POTENTIAL ESTIMATES

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 ESTIMATION OF PROGRAM POTENTIAL SCENARIO #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 currently 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 Budgets

EDC

Single Year Spending 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 PHASE 1 BUDGETS AND SAVINGS GOALS

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 $99,467,568 445,951 $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.
PENNSYLVANIA ENERGY EFFICIENCY POTENTIAL 

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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 $222.29

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 include 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 have 

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 costs 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 $222.29 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. Summarized 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 USE OF ACHIEVABLE POTENTIAL RESULTS

Estimation of program potential for Phase 2 of Act 129 (expected to be energy years 2013-2016 or 2013-

2018) utilizes both residential and non-residential potential savings. Because achievable potential scenario 

2 is based on Phase 1 performance, this achievable scenario was utilized for the determination of 

program potential. In calculating expected program costs, incentive and non-incentive, the SWE team 

utilized economic and performance metrics from the Phase 1 implementation of PA EDC programs, as 

described in Section 4 of this report. Because the SWE team acknowledges that the existing EDC 

program savings have large shares of “low hanging fruit” and very cost-effective measures, Phase 1 nonincentive program cost estimates have been increased by an additional 25%. Additionally, program 

incentive 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 percentage 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 saved 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 kWh saved.

The first step in the program potential calculation uses the cumulative annual three-year (2013-2016) and 

five-year (2013-2018) residential and non-residential sector estimated savings and costs. These figures are 

summarized in Table 8-3 and Table 8-4.
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Table 8-3: Summary of 2013-2016 Cumulative Annual Achievable Scenario 2 Costs and Savings

EDC

3 yr 

Residential 

Ach 2 Savings 

(MWh)

3 yr 

Residential 

Ach 2 Costs

($)

3 yr Nonresidential 

Ach 2 Savings 

(MWh)

3 yr Nonresidential 

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 $49,241,560 163,781 $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 2013-2018 Cumulative Annual Achievable Scenario 2 Costs and Savings

EDC

5 yr 

Residential 

Ach 2 Savings 

(MWh)

5 yr 

Residential 

Ach 2 Costs 

($)

5 yr Nonresidential 

Ach 2 Savings 

(MWh)

5 yr Nonresidential 

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 $97,794,117 391,146 $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 nonresidential sector program costs to the three-year and five-year budget ceilings at the EDC and state 

levels in Table 8-5 and Table 8-6.

Table 8-5: Comparison of 2013-2016 Cumulative 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 1,142,977

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: Comparison of 2013-2018 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 185,438
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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 $ 440,163,844 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 the 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 achievable 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 PROGRAM POTENTIAL RESULTS

The final three-year and five-year program potential energy savings and budget values are found in

Table 8-7 and Table 8-8 for each EDC and the state of the Pennsylvania.
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Table 8-7: Program Potential Scenario 1 2013-2016 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 $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

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 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 currently 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 implementation. Statewide 

estimated acquisition costs for 2013-2018 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 2013-2018 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 2013-2018 along with the most probable 

outcomes summarized in Table 8-8. 
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Figure 8-2: Program Potential Range 2013-2018

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 knowledge, 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 ESTIMATION OF PROGRAM POTENTIAL SCENARIO #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 these 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 described 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 achieve exactly 3% of 2009/10 sales at the end of 

phase 1. 
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Table 8-9: Program Potential Scenario 2 2013-2016 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 $123,114,709 431,979 $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 2013-2018 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 2009/10 

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 1,969,300 $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.
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9 CONCLUSIONS

In summary, the remaining potential for electric energy efficiency in the service areas of the seven 

electric distribution companies (included in this study) is significant. The statewide estimated achievable 

potential electricity savings for 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% reduction 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 1.95 (10-year timeframe). The TRC ratios statewide for Achievable Potential scenario #2

are 1.73 (three-year), 1.85 (five-year) and 1.97 (10-year). 

After taking into account the Act 129 program spending limits, the SWE recommends that the savings 

targets for Phase 2 be based on the program potential 1 scenario 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 IMPORTANT CONSIDERATIONS ABOUT THIS ENERGY EFFICIENCY POTENTIAL STUDY

There are several important facts about the data and assumptions used in this electric energy efficiency 

potential study, as follows:

 This study includes 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 

electronics 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 included 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 higher 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 end 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 eighty-five 

percent. Achievable potential scenario #2 assumes 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 CONCLUDING THOUGHTS

It is clear that electric energy efficiency programs could save residents 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 seven 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 likely to become available in 
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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.