# Ohio Market Potential Study for Demand Side Management Programs

Final Report

Prepared for: Duke Energy Ohio Cincinnati, Ohio

Prepared by: Forefront Economics Inc. H. Gil Peach & Associates LLC

with contributions from: Mark E. Thompson H. Gil Peach Howard Reichmuth John Mitchell

February 9, 2009Forefront Economics Inc. and H. Gil Peach & Associates. Ohio Market Potenti al Study for Demand Side

Management Programs Final Report. Report prepared for Duke Energy Ohi o, Cincinnati, Ohio, February 2009.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page i 

## TABLE OF CONTENTS

Table of Contents...........................................................................................................................................................i List of Tables...........................................................................................................................................................vi List of Figures ...................................................................................................................................................... viii Executive Overview......................................................................................................................................................1 Overview of Findings...............................................................................................................................................1 Comparison to State of Ohio Senate Bill 221 Targets..............................................................................................3 Overview of Approach .............................................................................................................................................5 Market Assessment ..............................................................................................................................................5 DSM Potential......................................................................................................................................................5 DSM Programs.....................................................................................................................................................6 Organization of Report.............................................................................................................................................6 Market Assessment.......................................................................................................................................................7 Overview of Market Sectors.....................................................................................................................................7 Residential..............................................................................................................................................................10 New Construction Levels...................................................................................................................................11 Housing Stock Characteristics ...........................................................................................................................11 Appliance Saturation Rates................................................................................................................................13 Energy Usage Analysis ......................................................................................................................................13 Electric Demand Analysis..................................................................................................................................18 Non-Residential......................................................................................................................................................19 Electric Customer Segments ..............................................................................................................................20 Gas Customer Segments ....................................................................................................................................22 Commercial Energy Usage and Demand ...........................................................................................................23 Manufacturing Energy Usage ............................................................................................................................25 Technical Potential .....................................................................................................................................................27 Technical Potential Load Effects............................................................................................................................29 Technical Potential Load Control...........................................................................................................................31 Combined Heat and Power.....................................................................................................................................32 Principal Components of the Technical Potential ..................................................................................................33 Electric Measures and Economic Potential.................................................................................................................37 Energy Efficiency Measure Assessment ................................................................................................................37 Cost Effectiveness..............................................................................................................................................40 Cost Effectiveness Rankings..............................................................................................................................41 Economic Potential.................................................................................................................................................44 Gas Measures and Economic Potential.......................................................................................................................46 Energy Efficiency Measure Assessment ................................................................................................................46 Cost Effectiveness..............................................................................................................................................49 Cost Effectiveness Rankings..............................................................................................................................50 Economic Potential.................................................................................................................................................53 DSM Programs ...........................................................................................................................................................55 Program 1. Commercial and Industrial Peak Reduction .......................................................................................58 Program 2. Residential Peak Reduction ................................................................................................................61 Program 3. Renewables and Demonstrations........................................................................................................64 Program 4. Commercial and Industrial Incentives ................................................................................................66 Program 5. Commercial and Industrial Rebates....................................................................................................69 Program 6. Commercial and Industrial Retro-Commissioning Lite......................................................................72 Program 7. Commercial and Industrial HVAC Optimization ...............................................................................75 Program 8. Commercial and Industrial Audit .......................................................................................................77 Program 9. Commercial and Industrial New Construction ...................................................................................79 Program 10. Residential Whole House .................................................................................................................81 Program 11. Residential Rebates...........................................................................................................................85Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page ii Program 12. Residential Appliance Recycling......................................................................................................90 Program 13. Residential New Construction ..........................................................................................................92 Program 14. Residential Solar Siting ....................................................................................................................96 Program 15. Residential Low and Moderate Income Weatherization...................................................................99 Program Cost Effectiveness......................................................................................................................................103 Expected Program Costs.......................................................................................................................................103 Miscellaneous Program Assumptions ..................................................................................................................104 Avoided Costs ......................................................................................................................................................104 Cost Effectiveness Results ...................................................................................................................................104 Other Assumptions...........................................................................................................................................104 Currently Recommended Programs .....................................................................................................................105 Program Evaluation ..................................................................................................................................................109 Approaches to Program Evaluation......................................................................................................................109 Evaluation Work Plans.........................................................................................................................................111 Evaluation Work Plan Template (for each program) ...........................................................................................111 Evaluation Budget ................................................................................................................................................113 Program 1. Commercial and Industrial Peak Reduction.................................................................................113 Program 2. Residential Peak Reduction..........................................................................................................114 Program 3. Renewable and Demonstration.....................................................................................................115 Program 4. Commercial and Industrial Incentives..........................................................................................116 Program 5. Commercial and Industrial Rebates..............................................................................................117 Program 6. Commercial and Industrial Retro-Commissioning Lite ...............................................................118 Program 7. Commercial and Industrial HVAC Optimization.........................................................................118 Program 8. Commercial and Industrial Audit.................................................................................................118 Program 9. Commercial and Industrial New Construction.............................................................................119 Program 10. Residential Whole House ...........................................................................................................119 Program 11. Residential Rebates ....................................................................................................................120 Program 12. Residential Appliance Recycling ...............................................................................................120 Program 13. Residential New Construction....................................................................................................120 Program 14. Residential Solar Siting..............................................................................................................121 Program 15. Residential Low and Moderate Income Weatherization ............................................................121 Other Considerations in Support of Program Evaluation.....................................................................................122 Protocol for Monthly Program Reporting........................................................................................................122 Customer Satisfaction Metrics .............................................................................................................................123 Standardization.....................................................................................................................................................123 Appendix A. Methodology .......................................................................................................................................124 Choice of Methodology........................................................................................................................................124 Overview of Model Structure...............................................................................................................................124 Energy Model.......................................................................................................................................................125 Nature of the Data............................................................................................................................................125 Energy Model Structure...................................................................................................................................128 Model Inputs ....................................................................................................................................................128 Usage Normalization........................................................................................................................................129 Separation into End-Uses.................................................................................................................................129 Further Separation of Baseload into End-Uses ................................................................................................130 Demand Model.....................................................................................................................................................130 Available Load Data ........................................................................................................................................130 Demand Model Overview................................................................................................................................131 Residential Hourly Demand Factors ................................................................................................................132 Commercial Hourly Demand Factors ..............................................................................................................132 Truing the Demand Model...............................................................................................................................133 Estimating the Coincident Peak Day Load ......................................................................................................135 Estimating the Technical Potential for Load Savings ......................................................................................135 Estimating the Coincident Peak Day Load and Technical Potential Load Of fset............................................135Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page iii Appendix B. Cost Effectiveness Methology............................................................................................................136 Technology Cost Effectiveness ............................................................................................................................136 Program Cost Effectiveness .................................................................................................................................137 Utility Cost Test (also known as Administrator Cost Test) .............................................................................138 Participant Test ................................................................................................................................................138 Ratepayer Impact Measure Test.......................................................................................................................138 Total Resource Cost Test .................................................................................................................................138 Societal Test.....................................................................................................................................................138 Appendix C. Residential Electric EEM Documentation..........................................................................................139 Solar Photovoltaic (RE-1) ....................................................................................................................................140 Resistance Electric Furnace to SEER 13 Heat Pump (RE-2, RE-3).....................................................................140 SEER 8 to SEER 13 Central Air Conditioner (RE-4, RE-5)................................................................................141 Refrigeration Charge and Duct Tune-Up (RE-6, RE-7).......................................................................................141 Upgrade Heat Pump Efficiency from SEER 13 to SEER 15 (RE-8, RE-9) .........................................................142 Upgrade Central Air Conditioner from SEER 13 to SEER 15 (RE-10, RE-11) ..................................................142 Efficient Window AC (RE-12).............................................................................................................................142 Cool Roofs (RE-13)..............................................................................................................................................143 EE Windows (RE-14)...........................................................................................................................................144 Programmable Thermostats (RE-15)....................................................................................................................144 Ceiling Insulation R6-R30 (RE-16, RE-17) .........................................................................................................145 House Sealing Using Blower Door (RE-18, RE-19)............................................................................................145 Ground Source Heat Pump (RE-20).....................................................................................................................146 Wall Insulation (RE-21, RE-22)...........................................................................................................................146 Solar Siting Passive Design (RE-23)....................................................................................................................147 Energy Star Manufactured Home (RE-24)...........................................................................................................148 Energy Star Construction (RE-25) .......................................................................................................................148 Eliminate Old Refrigerators (RE-26) ...................................................................................................................150 HVAC Set Back (RE-27) .....................................................................................................................................150 Energy Star Clothes Washers (RE-28).................................................................................................................151 Energy Star Dishwashers (RE-29)........................................................................................................................151 Energy Star Refrigerators (RE-30).......................................................................................................................152 Pool Pumps (RE-31).............................................................................................................................................152 Compact Fluorescent (RE-32)..............................................................................................................................153 Daylighting Design (RE-33).................................................................................................................................153 Occupancy Controlled Outdoor Lighting (RE-34)...............................................................................................154 Tank Wrap, Pipe Wrap, and Water Temperature Setpoint (RE-35).....................................................................154 Low Flow Fixtures (RE-36) .................................................................................................................................155 Heat Pump Water Heaters (RE-37) ......................................................................................................................156 Tankless Water Heaters (RE-38)..........................................................................................................................156 Solar Water Heaters (RE-39)................................................................................................................................157 Efficient Plumbing (RE-40) .................................................................................................................................157 Micro Combined Heat and Power (RE-41) ..........................................................................................................158 Residential LED Lighting (RE-42) ......................................................................................................................158 Sources .................................................................................................................................................................159 Appendix D. Non-Residential Electric EEM Documentation .................................................................................160 Solar Photovoltaic (CE-1) ....................................................................................................................................161 Small HVAC Optimization and Repair (CE-2)....................................................................................................161 Commissioning New and Retro (CE-3, CE-4) .....................................................................................................162 Low-E Windows New and Replace (CE-5, CE-6)...............................................................................................163 Premium New HVAC Equipment (CE-7)............................................................................................................163 Large HVAC Optimization and Repair (CE-8)....................................................................................................164 Integrated Building Design (CE-9) ......................................................................................................................164 Efficient Package Refrigeration (CE-10) .............................................................................................................165 Electrically Commutated Motors (CE-11) ...........................................................................................................166Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page iv Premium Motors (CE-12).....................................................................................................................................166 Variable Speed Drives, Controls, and Motor Applications Tune-Up (CE-13)................................ .....................167 Energy Star Transformers (CE-14) ......................................................................................................................168 Efficient AC/DC Power (CE-15)..........................................................................................................................169 Efficient Network Management (CE-16) .............................................................................................................169 New and Retrofit Efficient Lighting (CE-17, CE-18) ..........................................................................................170 LED Exit Signs (CE-19).......................................................................................................................................170 LED Traffic Lights (CE-20).................................................................................................................................171 Perimeter Daylighting (CE-21) ............................................................................................................................171 Low Flow Fixtures (CE-22) .................................................................................................................................172 Solar Water Heaters (CE-23)................................................................................................................................173 Heat Pump Water Heaters (CE-24) ......................................................................................................................173 Energy Star Hot Food Holding Cabinet (CE-25) .................................................................................................174 Energy Star Electric Steam Cooker (CE-26)........................................................................................................174 Pre-Rinse Spray Wash (CE-27)............................................................................................................................175 Restaurant Commissioning Audit (CE-28) ..........................................................................................................175 Grocery Refrigeration Tune-Up and Improvement (CE-29)................................................................................175 Refrigeration Casework Improvements (CE-30)..................................................................................................176 VendingMiser ® (CE-31).......................................................................................................................................176 LED Outdoor Lighting (CE-32) ...........................................................................................................................177 Sources .................................................................................................................................................................177 Appendix E. Residential Gas EEM Documentation................................................................................................178 Solar Water Heaters (RG-1) .................................................................................................................................179 EE Water Heater (RG-2) ......................................................................................................................................179 Energy Star Clothes Washers (RG-3)...................................................................................................................179 Efficient Gas Clothes Dryer (RG-4).....................................................................................................................180 Efficient Gas Stove (RG-5) ..................................................................................................................................180 Tank/Pipe Wrap and Water Temperature Setpoint (RG-6) ..................................................................................181 Low Flow Fixtures (RG-7)...................................................................................................................................181 Tankless Water Heaters (RG-8, RG-9) ................................................................................................................182 Upgrade Furnace Efficiency (RG-10, RG-11, RG-12, RG-13, RG-14, RG-15, RG-16, R-17) ...........................182 Programmable Thermostats (RG-18) ...................................................................................................................183 Proper HVAC Sizing (RG-19) .............................................................................................................................184 HVAC Tune-Up (RG-20).....................................................................................................................................184 Carbon Monoxide Remediation (RG-21).............................................................................................................185 EE Windows (RG-22) ..........................................................................................................................................185 Ceiling Insulation (RG-23, RG-24, RG-25) .........................................................................................................186 House Sealing Using Blower Door (RG-26)........................................................................................................186 Refrigeration Charge and Duct Tune-Up (RG-27)...............................................................................................187 Wall and Floor Insulation (RG-28, RG-29, RG-30).............................................................................................187 Energy Star Construction (RG-31).......................................................................................................................188 Solar Siting Passive Design (RG-32) ...................................................................................................................188 Appendix F. Non-Residential Gas EEM Documentation ........................................................................................190 Solar Water Heaters (CG-1) .................................................................................................................................191 Low Flow Fixtures (CG-2)...................................................................................................................................191 EE Water Heater (CG-3) ......................................................................................................................................192 Efficient Gas Oven (CG-4)...................................................................................................................................192 Efficient Gas Stove (CG-5) ..................................................................................................................................193 Efficient Gas Clothes Dryer (CG-6).....................................................................................................................193 Commissioning Audit (CG-7) ..............................................................................................................................193 Roof Insulation (CG-8) ........................................................................................................................................194 EE Windows (CG-9, CG-10) ...............................................................................................................................194 Ceiling Insulation (CG-11, CG-12, CG-13) .........................................................................................................195 House Sealing Using Blower Door (CG-14)........................................................................................................195Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page v Refrigeration Charge and Duct Tune-Up (CG-15)...............................................................................................196 Wall and Floor Insulation (CG-16, CG-17, C-18)................................................................................................196 EE Boiler (CG-19)................................................................................................................................................197 Proper HVAC Sizing (CG-20) .............................................................................................................................197 HVAC Tune-Up (CG-21).....................................................................................................................................197 Carbon Monoxide Remediation (CG-22).............................................................................................................198 Energy Star Construction (CG-23).......................................................................................................................198 Upgrade Furnace Efficiency (CG-24, CG-25) .....................................................................................................198 Commissioning - New (CG-26) ...........................................................................................................................199 Retro-Commissioning (CG-27)............................................................................................................................199 Controls (CG-28)..................................................................................................................................................200 Programmable Thermostats (CG-29) ...................................................................................................................200 Appendix G. Segmentation and CIS Sampling Plan ...............................................................................................202 Customer Segments..............................................................................................................................................202 Sample Selection ..................................................................................................................................................203 Appendix H. End-Use/Appliance Usage Tables......................................................................................................204 Electric Furnace with Central Air Conditioning...................................................................................................204 Electric Furnace with Window Air Conditioning.................................................................................................205 Electric Furnace with No Air Conditioning .........................................................................................................206 Electric Resistance with Central Air Conditioning ..............................................................................................207 Electric Resistance with Window Air Conditioning ............................................................................................208 Electric Resistance with No Air Conditioning .....................................................................................................209 Heat Pump/Electric Backup with Central Air Conditioning ................................................................................210 Heat Pump/Electric Backup with Window Air Conditioning ..............................................................................211 Heat Pump/Electric Backup with No Air Conditioning .......................................................................................212 Heat Pump/Gas Backup with Central Air Conditioning ......................................................................................213 Heat Pump/Gas Backup with Window Air Conditioning ....................................................................................214 Heat Pump/Gas Backup with No Air Conditioning .............................................................................................215 Gas Heat with Central Air Conditioning..............................................................................................................216 Gas Heat with Window Air Conditioning............................................................................................................217 Gas Heat with No Air Conditioning.....................................................................................................................218 Appendix I. Summary of Annual Program Data .....................................................................................................219Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### List of Tables Table 1. Annual Electric and Gas Usage and DSM Potential 20-Year Planning Horizon ..........................................1 Table 2. Energy Savings and Annual Budget for Recommended Programs ...............................................................3 Table 3. Summary of Technical Potential Estimates at Various Pla nning Years ........................................................4 Table 4. Annual Action Plan Savings and SB 221 Targets .........................................................................................4 Table 5. DEO Customers and Weather Normalized Annual Electric Usage by Se ctor...............................................7 Table 6. DEO Customers and Weather Normalized Annual Gas Usage by Sector................................ .....................7 Table 7. Residential Customers by Segment and Fuel ..............................................................................................10 Table 8. Appliance and End-Use Installation Rates from Residential Surv ey ..........................................................13 Table 9. Annual Usage by Residential Segment and Fuel.........................................................................................14 Table 10. Residential Usage by Housing Type and Fuel...........................................................................................14 Table 11. Residential Sector Monthly Electric Usage by End-Use ...........................................................................15 Table 12. Residential Average Use per Premise by Electric-Served End -Use..........................................................16 Table 13. Residential Sector Monthly Gas Usage by End-Use .................................................................................17 Table 14. Residential Average Use per Premise by Gas-Served End-Use ................................ ................................17 Table 15. Business Counts and Estimated Square Footage by Segment ...................................................................19 Table 16. Number of Premises and Annual Electric Usage by Segment...................................................................20 Table 17. Number of Premises and Annual Gas Usage by Segment.........................................................................22 Table 18. Manufacturing Customers and Actual Electric 2007 Loads......................................................................25 Table 19. Manufacturing Customers and Actual Gas 2007 Loads ............................................................................25 Table 20. Forecast Effect of Phased Out Incandescent Lighting...............................................................................27 Table 21. Summary of Technical Potential for Electric Savings Over 20 -Year Planning Horizon...........................28 Table 22. Summary of Technical Potential for Gas Savings Over 20-Year Planning Horizon.................................29 Table 23. Carbon Emissions ......................................................................................................................................36 Table 24. Electric DSM Technology Assessment, Residential .................................................................................38 Table 25. Electric DSM Technology Assessment, Non-Residential .........................................................................39 Table 26. Ranked Electric Measures, Residential .....................................................................................................42 Table 27. Ranked Electric Measures, Non-Residential .............................................................................................43 Table 28. Gas DSM Technology Assessment, Residential........................................................................................47 Table 29. Gas DSM Technology Assessment, Non-Residential ...............................................................................48 Table 30. Ranked Gas Measures, Residential............................................................................................................51 Table 31. Ranked Gas Measures, Non-Residential ...................................................................................................52 Table 32. Program Recommendations.......................................................................................................................57 Table 33. Measures – C&I Peak Reduction...............................................................................................................58 Table 34. Estimated Participation and Savings – C&I Peak Reduction ....................................................................59 Table 35. Estimated Five-Year Program Budget - C&I Peak Reduction ..................................................................60 Table 36. Measures – Residential Peak Reduction....................................................................................................61 Table 37. Estimated Participation and Savings - Residential Peak Reducti on ..........................................................62 Table 38. Estimated Five-Year Program Budget – Residential Peak Reduct ion.......................................................63 Table 39. Measures and Incentives – Renewables and Demonstrations....................................................................65 Table 40. Estimated Participation and Savings - Renewables and Demonstrati ons..................................................65 Table 41. Estimated Five-Year Program Budget - Renewables and Demonstr ations ...............................................65 Table 42. Measures and Incentives – C&I Incentives ...............................................................................................66 Table 43. Estimated Participation and Savings - C&I Incentives..............................................................................67 Table 44. Estimated Five-Year Program Budget – C&I Incentives ..........................................................................68 Table 45. Measures and Incentives – C&I Rebates ...................................................................................................70 Table 46. Estimated Participation and Savings - C&I Rebates..................................................................................70 Table 47. Estimated Five-Year Program Budget – C&I Rebates ..............................................................................71 Table 48. Measures and Incentives – C&I Retro-Commissioning Lite.....................................................................72 Table 49. Estimated Participation and Savings – C&I Retro-Commissioning L ite...................................................73 Table 50. Estimated Five-Year Program Budget – C&I Retro-Commissioning Lite................................................74 Table 51. Measures and Incentives – C&I HVAC Optimization ..............................................................................75 Table 52. Estimated Participation and Savings – C&I HVAC Optimization ............................................................75Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page vii Table 53. Estimated Five-Year Program Budget – C&I HVAC Optimization................................ ..........................76 Table 54. Measures and Incentives – C&I Audit.......................................................................................................77 Table 55. Estimated Participation and Savings – C&I Audit ....................................................................................77 Table 56. Estimated Five-Year Program Budget – C&I Audit..................................................................................78 Table 57. Measures and Incentives – C&I New Construction...................................................................................79 Table 58. Estimated Participation and Savings - C&I New Construction.................................................................80 Table 59. Estimated Five-Year Program Budget – C&I New Construction..............................................................80 Table 60. Measures and Incentives – Residential Whole House ...............................................................................82 Table 61. Estimated Participation and Savings - Residential Whole House .............................................................83 Table 62. Estimated Five-Year Program Budget – Residential Whole Hous e ..........................................................84 Table 63. Measures and Incentives - Residential Rebates.........................................................................................86 Table 64. Estimated Participation and Savings - Residential Rebates.......................................................................87 Table 65. Estimated Five-Year Program Budget – Residential Rebates ...................................................................89 Table 66. Measures and Incentives – Residential Appliance Recycling ...................................................................90 Table 67. Estimated Participation and Savings – Residential Appliance Re cycling .................................................91 Table 68. Estimated Five-Year Program Budget – Residential Appliance R ecycling ..............................................91 Table 69. Measures and Incentives – Residential New Construction........................................................................93 Table 70. Estimated Participation and Savings - Residential New Construct ion ......................................................93 Table 71. Estimated Five-Year Program Budget – Residential New Construc tion...................................................95 Table 72. Measures and Incentives – Residential Solar Siting..................................................................................97 Table 73. Estimated Participation and Savings – Residential Solar Siting ................................................................97 Table 74. Estimated Five-Year Program Budget – Residential Solar Siti ng.............................................................98 Table 75. Measures – Residential Low and Moderate Income Weatherization ......................................................100 Table 76. Estimated Participation and Savings - Residential Low and Moderat e Income Weatherization.............101 Table 77. Estimated Five-Year Program Budget – Residential Low and Modera te Income Weatherization .........102 Table 78. Energy Savings and Annual Budget for Recommended Programs .........................................................105 Table 79. Comparison of DSM Program Spending and Savings.............................................................................107 Table 80. Program Assumptions..............................................................................................................................108 Table 81. Program Cost Effectiveness Results........................................................................................................108 Table 82. Weather Inputs to Modeling ....................................................................................................................128 Table 83. Energy Systems Performance Inputs .......................................................................................................129 Table 84. Benefits and Costs by Cost Effectiveness Test........................................................................................137 Table 85. Mapping of Electric EEM to Residential DSM Programs.......................................................................139 Table 86. Energy Star Plus Residential Savings Example.......................................................................................149 Table 87. Energy Star Plus Savings Measures.........................................................................................................150 Table 88. Mapping of Electric EEM to Non-Residential DSM Programs...............................................................160 Table 89. Mapping of Gas EEM to Residential DSM Programs.............................................................................178 Table 90. Mapping of Gas EEM to Non-Residential DSM Programs.....................................................................190Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### List of Figures Figure 1. Overview of Market Assessment and DSM Potential Estimate s .................................................................5 Figure 2. Total Electric Sales by Rate Class................................................................................................................8 Figure 3. Total Gas Sales by Rate Class......................................................................................................................8 Figure 4. Electric Hourly Average Demand Map........................................................................................................9 Figure 5. Gas Hourly Average Demand Map ..............................................................................................................9 Figure 6. Residential Housing Units Permitted for Construction, DEO Servic e Area ..............................................11 Figure 7. Percent of Single Family Dwellings by Year Built ....................................................................................11 Figure 8. Percent of Single Family Dwellings by Square Feet..................................................................................12 Figure 9. Single Family Mean Square Feet by Year Built.........................................................................................12 Figure 10. Monthly Residential Electric Loads by End-Use .....................................................................................15 Figure 11. Monthly Residential Gas Loads by End-Use ...........................................................................................16 Figure 12. Residential Peak Day Demand by End-Use at System Coincident Pe ak .................................................18 Figure 13. Commercial Electric EUI Distribution.....................................................................................................21 Figure 14. Square Footage Distribution of Electric Commercial Custome rs ............................................................21 Figure 15. Commercial Gas EUI Distribution ...........................................................................................................22 Figure 16. Square Footage Distribution of Gas Commercial Customers ..................................................................23 Figure 17. Monthly Commercial Electric Usage by End-Use ...................................................................................23 Figure 18. Commercial Peak Day Demand by End-Use at System Coincident Peak................................ ................24 Figure 19. Monthly Commercial Gas Usage by End-Use .........................................................................................24 Figure 20. Monthly Manufacturing Electric Usage by End-Use ...............................................................................26 Figure 21. Monthly Manufacturing Gas Usage by End-Use .....................................................................................26 Figure 22. Technical Potential for Demand Reduction – Summer............................................................................30 Figure 23. Technical Potential for Demand Reduction – Winter ..............................................................................30 Figure 24. Direct Load Control Demand Reductions - Summer ...............................................................................32 Figure 25. Load Control from Dispatched CHP - Summer .......................................................................................33 Figure 26. Electric Technical Potential over Planning Horizon ................................................................................35 Figure 27. Gas Technical Potential over Planning Horizon.......................................................................................35 Figure 28. Residential Electric DSM Supply Curve..................................................................................................44 Figure 29. Non-Residential Electric DSM Supply Curve..........................................................................................45 Figure 30. Residential Gas DSM Supply Curve ........................................................................................................53 Figure 31. Non-Residential Gas DSM Supply Curve................................................................................................54 Figure 32. Aggregated Residential Single Family Gas Energy Use........................................................................125 Figure 33. Restaurant Average Gas Energy Use .....................................................................................................126 Figure 34. Grocery Average Gas Energy Use .........................................................................................................126 Figure 35. Aggregated Residential Single Family Electric Energy Use ..................................................................126 Figure 36. Restaurant Average Electric Energy Use ...............................................................................................127 Figure 37. Grocery Average Electric Energy Use ...................................................................................................127 Figure 38. Air and Water Temperatures ..................................................................................................................129 Figure 39. Ohio Monthly Residential Peak Day Loads ...........................................................................................131 Figure 40. Residential Hourly Demand Factors for Heat Cool, Hot Water.............................................................132 Figure 41. Residential Hourly Demand Factors for Lighting, Interior, and Exte rior Loads....................................132 Figure 42. Commercial Hourly Demand Factors for Heating, Cooling, and Hot Wate r .........................................133 Figure 43. Commercial Hourly Demand Factors for Lighting, Internal and Exte rnal Loads..................................133 Figure 44. Baseload True-Up – Residential, October..............................................................................................134 Figure 45. Cooling True-Up All Customers, August Peak......................................................................................134 Figure 46. Heating True-Up All Customers, February Peak ...................................................................................135 Figure 47. Motor Efficiency Specification NEMA Premium..................................................................................166 Figure 48. Typical Motor Operating Efficiencies versus Load ...............................................................................167 Figure 49. Transformer Efficiency Specification NEMA TP-1...............................................................................168Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 1 

## EXECUTIVE OVERVIEW

This document presents a long-term Demand Side Management (DSM) Marke t Potential Study (MPS) for residential and non-residential electric and gas customers in the Duke Energy Ohio (DEO) service area. The MPS was prepared by Forefront Economics Inc and H. Gil Peach and Associates and incl udes an assessment of the longterm market potential for DSM savings and a five-year DSM action plan. Long-term DSM savings potential is assessed from both the technical and economic perspectives. The design, impl ementation, oversight and cost effectiveness of specific DSM programs are addressed in the five-ye ar action plan.


### Overview of Findings Key findings from the MPS are summarized in Table 1.

Table 1. Annual Electric and Gas Usage and DSM Potential 20-Year Plan ning Horizon
kWh (millions) Percent

of Total MMCF Percent of Total Total Usage 23,800 100% 68,290 100% Technical Potential Savings 6,932 29% 20,054 29% Economic Potential (@ $0.06/kWh, $0.90/therm)* 3,132 13% 14,234 21% Recommended DSM Programs (after 5 years) ** 684 3.1% 464 0.7% * Refers to the energy savings that can be acquired with DSM for less cost than the cost of serving th e load with traditional supply side resources. ** DSM savings shown as percent of Year 5 usage.
The technical potential shows that if the energy saving technologies, ide ntified in this report, were applied across all applicable customers, without regard to market or economic constraints, wea ther normalized annual electricity usage could be reduced by 29 percent and weather normalized gas usage could be redu ced by 29 percent. A recent meta-analysis of potential studies found a median technical potential of 33 percent for electric measures and 40 percent for gas measures across all customer segments. 1 While our estimate of electric technical potential is well within the range found in the meta-analysis, our estimate of gas techni cal potential is somewhat lower because our energy modeling reflects the interdependencies between gas and electric ity. In other words, the increase in gas space heating due to electric efficiency improvements offsets the sa vings from the broad application of gas energy efficiency technologies thereby lowering the overall gas technical pote ntial.

Economic potential reflects the subset of technical potential that can be ac quired for less than the avoided cost of supply. Avoided costs vary significantly depending on the nature of the served lo ad, fuel costs, distribution charges and other costs. Economic potential is presented in the body of this report i n the form of a DSM supply curve showing the economic potential depending on the level of avoided cost. We show economi c potential in Table 1 at $0.06 per kWh and $0.90 per therm. These avoided cost points are based on the observed rang e of electric avoided cost for various types of loads analyzed with DSMore but are ultimat ely somewhat arbitrary selections on our part.

1 Nadel, Steven, Anna Shipley and R. Neal Elliott. The Technical, Economic and Achievable Potential fo r Energy-Efficiency in the U.S. – A Meta-Analysis of Recent Studies. 2 004 ACEEE Summer Study in Energy Efficiency in Buil dings.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 2 Using these levels for avoided cost, we estimate that nearly half of the electric technical potential and three-fourths of the gas technical potential is cost effective. We have included incremental measure costs and a rough estimate of DSM program delivery and administration expenses in our calculation of econom ic potential. More precise estimates of DSM acquisition costs are reflected in the five-year DSM action plan.
Savings from DSM programs included in the five-year action plan are also shown in Table 1. After five years of operation, these programs are expected to lower electric usage by over 3 per cent and decrease gas usage by 0.7 percent. The percentage is lower for gas due to the offsetting increa se in gas space heating demand from electrical efficiency improvements, primarily lighting. The approach used to develop t he set of recommended DSM programs consisted of the following steps: (1) conduct a market assessment for determining electric and gas usage and cha racteristics across customer groups, (2) review a comprehensive list of DSM technologies and estimate the energ y savings potential, (3) consider the appropriateness of selected technologies for the DEO ser vice area in terms of markets, cost effectiveness and accessibility to products, (4) group the highest potential technologies into logical sets for marketing a nd outreach, (5) design program strategies to promote the technologies based on industry best pr actices, (6) consider the cost effectiveness of the designed program, including costs t o the utility and to participating customers, and (7) describe a final set of recommended program designs that make the most s ense for the utility and have a strong potential for delivering cost effective energy savings.
The process resulted in the following set of recommended programs. DEO will, o f course, make the final selection of programs to be submitted for regulatory approval.

Reference Program Name Cost Effective (TRC Test) Recommended 1 Commercial and Industrial Peak Reduction Yes Yes 2 Residential Peak Reduction Yes Yes 3 Renewables and Demonstrations No Yes 4 Commercial and Industrial Incentives Yes Yes 5 Commercial and Industrial Rebates Yes Yes 6 Commercial and Industrial Retro-Commissioning Lit e Yes Yes 7 Commercial and Industrial HVAC Optimization Yes Y es 8 Commercial and Industrial Audit Yes Yes 9 Commercial and Industrial New Construction Yes Ye s 10 Residential Whole House Yes Yes 11 Residential Rebates Yes Yes 12 Residential Appliance Recycling Yes Yes 13 Residential New Construction Yes Yes 14 Residential Solar Siting Yes Yes 15 Residential Low and Moderate Income Weatherizati on No Yes
Expected savings and program budgets are presented annually in Table 2. Program bud gets are also presented on a cost per utility customer and percent of retail revenue.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 3 Table 2. Energy Savings and Annual Budget for Recommended Programs

Year Cumulative kWh Savings (millions) Cumulative

MMCF Savings Program Budget

(millions $) Cost per

Customer Percent of

Revenue 1 65.2 26.0 $ 16.18 $ 23.58 0.7% 2 177.0 79.0 $ 24.14 $ 34.85 1.0% 3 318.9 170.3 $ 30.81 $ 44.03 1.3% 4 492.7 295.0 $ 35.72 $ 50.54 1.5% 5 684.2 463.7 $ 39.72 $ 55.64 1.6%
Annual program budgets are estimated at $40 million in Year 5 for all recomm ended programs. This amounts to approximately 1.6 percent of the revenues from customers included in this st udy and equates to spending of $56 per customer for program delivery cost and incentives. Based on recent data f rom the US Department of Energy on DSM program spending, $56 per customer is higher than average of comparably siz ed utilities but still well within the range of spending. Spending per customer by the comparable utilities range d from less than one dollar to nearly $90, averaging $23. Spending as a percent of revenue averaged 1.1 percent with a wi de range.
Our five-year program plan provides an estimate of realistically ach ievable potential in the near term. As such, it reflects an overall level of effort that, in our judgment, is an aggre ssive but realistic ramp up of DSM programs. Although the five-year plan reflects a significant increase in DSM, i t is not meant to provide an estimate of maximum achievable potential. In considering what are realistic program pa rticipation rates and incentive levels through the five-year plan, we rely on the experience of other utilities, best practices and our own professional judgment. Accordingly, our plan implicitly reflects assumptions regarding the availability of capital and overall
economic conditions consistent with DSM investment. The macro economic c limate and availability of capital that will prevail over the next five years is unfolding as this report is written and may negatively influence actual program participation rates.
On the other hand, the incoming administration has set as a priority “green” jobs and energy efficiency. To the extent these policy objectives are translated into actual program s and incentives that benefit DSM efforts, program participation rates will be benefited. How the current unfavorable economi c climate, policy shifts in favor of DSM and other macro level forces influence program adoption rates and overall DSM acquisition levels will be determined in the years ahead. Whatever the outcome, these counter current s amplify the need to adapt DSM strategy as lessons are learned from implementation.



### Comparison to State of Ohio Senate Bill 221 Targets It is useful to contrast and compare the findings of this study with the energy and peak demand savings goals in Senate Bill 221. For example, it is interesting to compare the overall technical potential with the long-term SB 221 target. SB 221 calls for achieving a 22 percent reduction in usage by 2025 thr ough energy efficiency programs (Sec 4928.66, paragraph A.1.a). Technical potential levels from this study for energy and peak are shown in the table below for several years, including 2025.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 4 Table 3. Summary of Technical Potential Estimates at Various Plannin g Years

2007 2012 2017 2025 2027 Base Case Energy Usage (millions kWh) 21,883 22,351 22,806 23,574 23,800 Technical Potential Energy Savings (millions kWh) 6 ,924 7,012 6,792 6,896 6,932 Percent 32% 31% 30% 29% 29% Base Case Summer System Peak Load – Aug (MW) 4,421 4,513 4,606 4,704 4,737 Technical Potential Summer Peak Savings (MW) 1,530 1,562 1,534 1,546 1,550 Percent 35% 35% 33% 33% 33%
Our findings indicate that technical potential in the year 2025 is 29 percent of the projected usage. To achieve the SB 221 target of 22 percent savings DEO would need to acquire 75 percent of technica l potential (22% divided by 29%) by 2025. However, it appears from our analysis that Duke Energy will be able t o cost effectively achieve about half of the technical potential, a 14 to 15 percent reduction in usage, w ell short of the 22 percent target.
Another way to look at this issue is to ask what the avoided cost would need to be in order to achieve the SB 221 energy savings target of 22 percent. The energy efficiency supply curves developed for this project provide the framework for answering this question. Cost effective energy savings equi valent to 22 percent usage are obtainable assuming Duke Energy’s avoided cost of supply is at least $0.25 per kWh, roughly four times current levels.
Our findings also show that a five-year DSM action plan can be developed that cost effectively meets the SB 221 targets for both energy and peak through Year 5. Annual kWh and MW savings are s hown in the table below along with the annual SB 221 target percentage.

Table 4. Annual Action Plan Savings and SB 221 Targets

Action Plan SB221 Action Plan SB221

Cumulative kWh Savings (millions) Cumulative

Percent kWh Savings Cumulative

Percent kWh Goal Cumulative

MW Savings Cumulative

Percent MW Savings Cumulative

Percent Peak Goal 2009 65.2 0.3% 0.3% 19.9 0.67% 1.00% 2010 177.0 0.9% 0.8% 53.1 1.80% 1.75% 2011 318.9 1.6% 1.5% 96.6 3.28% 2.50% 2012 492.7 2.4% 2.3% 150.7 5.12% 3.25% 2013 684.2 3.4% 3.2% 212.5 7.22% 4.00% Note: Percentage savings calculated from base peri od usage and demand. Demand savings includes peak reduction programs and peak savings from EE programs. SB 221 goals are from section 4928.66 paragraphs A.1.a an d A.1.b.
Our analysis shows that the near-term targets of SB 221 can be met with an aggressive but still cost effective implementation of DSM programs. However, once this aggressive near-term implementation of DSM programs is in place, it will become more difficult to cost effectively achieve the long-term targets in SB 221. This is not to say that the energy savings targets in SB 221 can not be cost effectively a chieved. Our estimates of technical and economic potential are based on current levels of technology and current expectations regarding avoided supply costs. Technical potential estimates are also exclusive of price induced conservation which can lead to behavior changes and significant declines in energy consumption.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 5 Technological improvements are likely to result in new applications for saving energy and reductions in the cost of existing technologies. While energy supply costs are uncertain, most of the r isk appears to be on the side of higher costs, in our opinion, resulting in higher levels of cost effective savings. As recognized in SB 221, there will be the need to reassess targets as DSM program experience is gained, energ y markets go forward, and new technologies are developed. 

### Overview of Approach The purpose of this section is to provide an overview of the approach used in the pre paration of this DSM Action Plan. Our approach is perhaps best described as three components, each building off of the last. These components are Market Assessment, DSM Potential and DSM Programs.



### Market Assessment Market Assessment provides the foundation layer of the analysis and sup ports the work of the other two components. The objective of the market assessment component is to describ e customers and loads in sufficient detail to provide an understanding of energy usage by market segment. An import ant aspect of this project is that the market assessment was completed using a blend of internal DEO data , service territory specific secondary data, and detailed energy modeling. By blending internal utility data with secondary da ta sources, a much richer market assessment is possible. Key to the market assessment layer is a rig orous analysis of actual customer billing and hourly load data to construct electric and gas usage models for each resi dential and non-residential segment.



### DSM Potential The DSM potential component of the analysis builds off of the market asse ssment and provides an estimate of technical potential and DSM supply curves showing the amount of DSM potential available at various costs per unit of energy. At this stage of the analysis the savings potential of sever al Energy Efficiency Measures (EEM) is assessed. EEM savings potential is constructed from the use of secondary information documenting the industry’s experience with the technology adjusted for the market assessment and lo ad modeling results specific to DEO. The process of blending internal and secondary information along with energy model ing to develop the market assessment and DSM potential estimates is shown in the figure below.

Figure 1. Overview of Market Assessment and DSM Potential Estimat esOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 6 A significant benefit from this approach is that it results in end-use load profiles and DSM potential estimates by market segment that are based on customer characteristics and energy usage specific to DEO. DEO service territory specific data used to construct the analysis include:

• Monthly energy bills for 47,000 electric and 35,000 gas customer sites sampled from 16 market segments. 2

• Hourly (8,760) load data for residential and 4 non-residential DEO rate class es. Hourly load data are not typically available for these types of projects and proved extremely valuable in our modeling efforts.

• Residential Appliance Survey conducted in 2007 providing recent information on equipm ent and enduses. DEO respondents were selected and analyzed separately from the broade r survey.

• Size of home (square feet) and vintage of construction (year built) wer e obtained from tax-assessor records for residential properties within the DEO service territ ory.

• Site-specific business attributes for business locations withi n the DEO service territory. These records provided the information necessary to estimate non-residential floor space and energy utilization per square foot by non-residential segment.

• Long-term load forecast for DEO.


### DSM Programs DSM program design represents the final layer of the core analysis of thi s Action Plan. The program design process builds off of the prior two layers by mapping measures to program s through an analysis of the best practices from other leading electricity and gas utilities. This a pproach balances engineering and economic characteristics of specific end-use technologies with public policy and corporate objectives. The goals in this effort are, to the extent possible, to incorporate the specific environmental and ma rket characteristics of the service territory, and to orient the programs toward both a technology optimum and a par ticipation optimum. To be effective, these goals in program design and practical implementation wil l be implemented and optimized within a seasoned marketing framework. Strategic change comes from working clos ely with customers and suppliers to jointly create program success. The result is a set of recommended pr ograms that are optimized to fit DEO.


### Organization of Report The first five sections following this Executive Overview present th e findings of each of the three components or “layers” of analysis discussed above: Market Assessment, DSM Potenti al (Technical and Economic) and DSM Programs. The final two sections of the main report present program cost eff ectiveness results and evaluation plans. Several appendices following the main report provide additional document ation on various aspects of the analysis.
In this report the term Demand Side Management (DSM) refers to the pl anning and implementation of utility programs that influence customer uses of energy in ways that will produc e desired changes in the utility's load shape. As such, DSM includes traditional energy efficiency, conservat ion and demand reduction. All energy usage
numbers are 2007 weather normalized unless otherwise stated.

2 See Appendix E for details on the segmentation and sampling strategy used in this analysis.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 7 

## MARKET ASSESSMENT

Energy efficiency planning needs to be based on a sound understanding of customer c haracteristics. The purpose of this section is to provide a foundation for the DSM planning and analysis prese nted in subsequent sections. We begin with an overview of energy usage in the DEO service area. A descr iption of the customer base using internal and secondary data precedes the presentation of energy usage models. These mode ls are used to estimate the electric and gas sales by end-uses; such as, space heat, water heat, li ghting, cooking, dryers, process energy, and miscellaneous plug loads. The detailed energy usage models also provide a ba sis for estimating existing efficiency levels, the technical potential, energy savings and cost effective ness of a wide variety of demand side measures and

programs.
Energy use estimates presented in this report are normalized to long-t erm weather conditions by using the energy usage models applied to a typical or normal year. All energy use and end-use estimates in the report have been normalized to 30-year monthly temperature normals. Though the energy use esti mates are for a normal weather year, the models were developed using actual usage and weather data from January 2007 through December 2007.


### Overview of Market Sectors The focus of this study is on the nearly 650,000 electric customers and 400,000 gas c ustomers in the DEO service territory. These customers account for over 20 billion kWh annually, as shown i n Table 5, and over 67 million MCF annually, as shown in Table 6.

Table 5. DEO Customers and Weather Normalized Annual Electric Usage by Sector

Annual Usage Percent Use per Customer Sector Customers (million kWh) of Total (kWh/year) Residential 593,768 7,053 34.6% 11,879 Non-Residential 55,181 13,357 65.4% 242,058 Total 648,949 20,410 100.0% 31,451 Source: Unique premise counts and billing data fro m CIS extract (Jan 2007 – Dec 2007).

Table 6. DEO Customers and Weather Normalized Annual Gas Usage by Sector

Annual Usage Percent Use per Customer Sector Customers (MCF) of Total (MCF/year) Residential 377,385 32,812,484 48.7% 86.9 Non-Residential 30,351 34,536,274 51.3% 1,137.9 Total 407,736 67,348,758 100.0% 165.2 Source: Unique premise counts and billing data fro m CIS extract (Jan 2007 – Dec 2007).
The residential sector is far larger in terms of customer count t han the non-residential sector. Although there are far fewer non-residential customers than residential, the average non-re sidential electric customer uses nearly 20 timesOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 8 more electricity than the average residential customer. Simila rly, the average non-residential gas customer uses nearly 13 times more gas than the average residential customer. The non-r esidential sector accounts for 65 percent of the electric consumption and 51 percent of the gas consumption considered in this s tudy.
Monthly electric loads by sector are shown in Figure 2 for electric and Fig ure 3 for gas with non-residential broken down between commercial and manufacturing (based on SIC code). Residential elec tric loads are by far the most seasonal with comparable summer and winter peaks. Although not as seasonal as residential, commercial loads peak in the summer and have a less pronounced winter peak. By contrast, manufacturing loads are nearly constant across the months except for a small summer peak in July and August, coinc ident with the residential and commercial peak.

0 100 200 300 400 500 600 700 800

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DeckWh (millions)

Residential Commercial Manufacturing
Figure 2. Total Electric Sales by Rate Class

As shown in Figure 3, monthly gas loads are highly seasonal with strong winter dem and relative to summer months. Residential gas loads are the most seasonal with sharply higher wi nter demand relative to summer months. Commercial and manufacturing sectors follow a similar pattern but with p rogressively less pronounced seasonal variation in consumption.

0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecMCF

Residential Commercial Manufacturing
Figure 3. Total Gas Sales by Rate ClassOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 9 Detailed energy usage analysis by sector and end-use will be presente d later in this section. End-use models were estimated for each sector allowing loads to be disaggregated by major e nd-use. Energy and demand are both important considerations when planning DSM programs. A map of MW demand by month and time of day is shown in Figure 4 for electric and Figure 5 for gas.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 1 2 3 4 5 6 7 8 9 10 11 12

Hour of DayMonth Number Demand - Megawatts (monthly average)

3,000-3,200 2,800-3,000 2,600-2,800 2,400-2,600
2,200-2,400 2,000-2,200 1,800-2,000 1,600-1,800

Figure 4. Electric Hourly Average Demand Map

Demand was modeled using several sources of information, including hourly elec tric load data provided from DEO. A detailed discussion of the methodology is presented in Appendix A. Electric de mand is at its highest in July between 2 PM and 6 PM with high loads throughout the afternoon and early evening of the s ummer months. Gas demand is at its highest in January and February with a morning and evening peak occur ring around 8 AM and 6 PM, respectively. DSM technologies and programs which impact loads during the se periods will save peak and

energy.

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 1 2 3 4 5 6 7 8 9 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Hour of DayMonth Number Hourly Gas Volume - mcf

21,000-24,000 18,000-21,000 15,000-18,000 12,000-15,000
9,000-12,000 6,000-9,000 3,000-6,000 0-3,000

Figure 5. Gas Hourly Average Demand MapOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 10 

### Residential The market assessment presented in this section begins with a high-l evel view of residential housing in the DEO service area, followed by a detailed analysis of residential elect ric loads. We used the following sources of information for the analysis presented in this section:

• CIS Extract obtained from DEO, including monthly billing data.

• The Duke Energy Residential Appliance Saturation Survey (RASS), comple ted in early 2007.

• Residential assessor records.

• Hourly load data for the DEO residential customer class.
DEO serves 594,000 residential electric customers and 377,000 gas customers in Ohi o. About 60 percent of the electric customers are also DEO gas customers. About 95 percent of gas cu stomers are also DEO electric customers. A simple segmentation strategy based on type of structure and vint age of construction was used to describe and model residential energy usage. This segmentation approa ch captures the major differences in residential housing stock that impact energy usage and DSM opportunities. T he segments were also selected to better describe cost effective DSM opportunities which can vary signi ficantly by type of housing and vintage of construction. Customer counts in each of the four segments are shown in the table be low.

Table 7. Residential Customers by Segment and Fuel

Electric Gas Single Family Multifamily Total Single Family Multifamily Total Existing Construction 423,735 159,409 583,144 303,452 64,627 368,079 New Construction 10,426 198 10,624 9,202 104 9,306 Total 434,161 159,607 593,768 312,654 64,731 377,385 Percent 73% 27% 100% 83% 17% 100% Source: DEO CIS Data
Single family construction accounts for nearly three-fourths of all re sidential electric customers and over 80 percent of residential gas customers. The remainder is multifamily housing units including duplexes, condominiums and apartment buildings. Single family and multifamily units exhibit many differ ences that impact energy consumption and energy efficiency potential. These differences include size of unit, appliance penetration, building shell integrity and lifestyle attributes.
There are typically many important differences between older and newe r homes that have large impacts on energy use and energy efficiency potential. Differences in the thermal inte grity of the building shell and appliance penetration rates, for example, can lead to large differences in annual usa ge between older and newer homes. Existing construction is defined as all homes with meters installed prior to 2004. Current building practices are reflected in the new construction segment, defined as all customers conne cted in 2004, 2005 and 2006. Using 2004 as a cutoff is somewhat arbitrary and less important than having a group of homes to model and contrast the differences between existing and new housing stock.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 11 

### New Construction Levels Residential construction estimated from housing permit data for the DEO se rvice area is shown in Figure 6. Data shown in Figure 6 are based on monthly permit data lagged to approximate the timing of construction and better align temporally with actual service installations. Single family construction has fallen significantly since 2005. Multifamily construction also dropped in 2007. There were approximately 4,500 tota l housing units constructed in 2007, about half the historic average of the last 10 years. Although the mix of c onstruction varies from year to year, about 80 percent of new housing stock is single family units.

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Units

Single Family Multi-Family Figure 6. Residential Housing Units Permitted for Construct ion, DEO Service Area

In addition to the “site built” construction reflected in the permit data, an average of 300 manufactured homes are placed in the DEO service territory annually. 3 Site built homes are constructed on-site without the use of pre-built walls and other major structural components. Manufactured homes are homes built or pr imarily built off-site and then installed on the building site.


### Housing Stock Characteristics Figure 7 through Figure 9 was derived from real estate data provided by DEO. Housi ng attribute details are useful for understanding the nature of the housing stock and, therefore, the DSM opportuni ties.

4.9% 9.2% 22.3% 25.6% 25.6%

10.1%

2.3%

0% 5% 10% 15% 20% 25% 30%

Before 1900 1900 -

1919 1920 -

1939 1940 -

1959 1960 -

1979 1980 -

1999 After

1999 Year Built Figure 7. Percent of Single Family Dwellings by Year Built

3 Based on US Census data for statewide placements o f manufactured homes (2005-2007) and the percentage of statewide population living within the service territory.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 12 Over 60 percent of the single family housing stock was constructed prior to 1980. T hese homes represent the largest retrofit opportunity both in terms of the number of homes and the most gai ns to be acquired from improved shell efficiencies. About 10 percent of the housing stock is less than 10 yea rs old.

1.8% 18.9% 26.0%

20.2%

13.7%

8.6%

4.5% 6.4%

0% 5% 10% 15% 20% 25% 30%

400 - 799 800 - 1199 1200 -

1599 1600 -

1999 2000 - 2399 2400 -

2799 2800 -

3199 3200+

Square Footage Figure 8. Percent of Single Family Dwellings by Square Feet

Nearly 50 percent of the single family housing stock is smaller than 1,600 square feet, while 67 percent is smaller than 2,000 square feet.

1487 1737 2259 2349 2323 2383 2440 2537 2568

0 500 1000 1500 2000 2500 3000

Before 1960 1960 -

1979 1980 -

1999 2000 2001 2002 2003 2004 2005

Year BuiltMean Square Feet

Figure 9. Single Family Mean Square Feet by Year Built

Homes have been trending larger, exceeding 2,000 square feet since 1980.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 13 

### Appliance Saturation Rates Appliance saturation rates are important inputs to the segment usage models discussed later in this section. Duke Energy’s Residential Appliance Saturation Survey (RASS) was used to est imate the prevalence of heating fuels and appliances. Survey results are reported in Table 8 by segment and fuel for m ajor end-uses and appliances. Segments with insufficient coverage for reporting are listed as “NA”

.

Table 8. Appliance and End-Use Installation Rates from Residential Survey

Electric Customers Gas Customers Single Family Multifamily Single Family Multifamily Existing New Existing New Existing New Existing New n=404 n=40 n=80 n=10 n=284 n=35 n=44 n=4 Main Heat Fuel - Electric: 18% 8% 44% NA 3% 3% 7% NA Standalone FA Furnace 4% 0% 15% NA 3% 0% 5% NA Heat Pump with FA Furnace 10% 5% 13% NA 0% 3% 0% NA Standalone Heat Pump 2% 3% 5% NA 0% 0% 0% NA Other 2% 0% 10% NA 0% 0% 2% NA Main Heat Fuel - Gas/Other: 82% 92% 56% NA 98% 97% 93% NA Standalone FA Furnace 69% 77% 39% NA 84% 80% 70% NA Heat Pump with FA Furnace 4% 10% 4% NA 5% 11% 5% NA Standalone Heat Pump 0% 0% 0% NA 0% 0% 0% NA Other 9% 5% 13% NA 8% 6% 18% NA Used for Cooling: Central Air Conditioner 75% 93% 46% NA 84% 97% 49% NA Heat Pump 13% 8% 17% NA 4% 3% 4% NA Window Unit 11% 0% 34% NA 10% 0% 40% NA None 2% 0% 4% NA 2% 0% 7% NA Electric Water Heat 38% 8% 44% NA 16% 3% 7% NA Gas Water Heat 59% 85% 46% NA 83% 97% 84% NA Electric Oven 72% 95% 74% NA 67% 94% 59% NA Electric Range 68% 68% 73% NA 62% 69% 55% NA Electric Clothes Dryer 80% 90% 70% NA 75% 89% 73% NA Dishwasher 76% 98% 60% NA 79% 97% 57% NA Clothes Washer 97% 98% 76% NA 98% 97% 82% NA Source: Duke Energy Appliance Saturation Survey (20 07)
The RASS survey was not stratified by vintage of construction so in order to pr ovide a sufficiently large number of new construction respondents, homes built in 2000 and after were classified as ne w construction. Still, this designation did not provide for a sufficient number of completed surveys in the new multifamily segment. Because of the variance and potential inaccuracies associated with customer r eported fuel and equipment information, survey results are used as a guide in calibrating energy usage models r ather than absolute model inputs.


### Energy Usage Analysis Monthly billing data at the premise level was aggregated by the four r esidential customer segments used in this report. An end-use energy (electric and gas) and electric demand model was then estimated using the aggregated billing data, residential survey results, detailed hourly load profiles a nd weather data. Model assumptions were refined to provide the best empirical fit to the actual customer bill ing data. The annual usage for each residential segment is shown in Table 9 for electric and gas customers.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 14 Table 9. Annual Usage by Residential Segment and Fuel

Electric Gas

Segment Premises Average Annual kWh per Premise Total Usage

(millions of kWh) Premises Average Annual CCF per Premise Total Usage

(MCF) Single Family Existing 423,735 13,681 5,797 303,452 921 27,937,508 Multi Family Existing 159,409 6,938 1,106 64,627 624 4,033,317 Single Family New 10,426 14,190 148 9,202 908 835,824 Multi Family New 198 10,949 2 104 561 5,835 Total Residential 593,768 11,879 7,053 377,385 869 32,812,484 Source: Energy model results using monthly billing data from DEO.
The monthly load profiles resulting from the energy models are shown by segme nt in Table 10.
Table 10. Residential Usage by Housing Type and Fuel Electric (thousands kWh) Gas (MCF)

Month SF

Existing MF

Existing SF

New MF New SF

Existing MF

Existing SF

New MF New Jan 590,025 117,177 13,327 234 5,374,600 739,748 158,729 1,118 Feb 501,304 98,845 11,504 200 4,347,221 600,589 128,417 901 Mar 477,097 91,645 11,498 193 3,511,439 492,751 103,817 722 Apr 386,702 73,484 9,959 159 2,122,167 308,613 62,883 430 May 378,716 73,961 9,859 138 830,833 139,178 24,808 157 Jun 498,551 92,545 13,801 168 533,879 97,664 18,267 128 Jul 598,550 110,684 16,674 198 511,299 93,334 17,454 124 Aug 561,634 103,715 15,638 186 517,710 94,594 17,663 125 Sep 411,768 75,394 11,459 139 531,356 97,425 18,107 128 Oct 382,669 74,052 10,133 154 1,838,174 272,811 54,411 373 Nov 456,844 86,298 11,233 182 3,171,129 450,204 93,845 658 Dec 553,336 108,141 12,857 219 4,647,701 646,406 137,424 969 Total 5,797,197 1,105,942 147,942 2,168 27,937,508 4,033,317 835,824 5,835
Because of the large number of homes, the existing stock of single family hom es is by far the largest segment, accounting for over 80 percent of the residential sector’s electric and g as energy usage. All segments follow a similar monthly load pattern, as expected.
Monthly residential electricity usage by major end-use is shown in Figure 10 a nd Table 11. Appliances and electronics is the largest single end-use, accounting for nearly 40 perc ent of all annual residential usage. Taken together with the other baseload end-uses (laundry, water heating and lighting), b aseloads account for nearly 80 percent of all residential usage. Space cooling and heating each account for about 11 percent of annual electricity usage but contribute significantly to the seasonal peak.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 15 0 100 200 300 400 500 600 700 800

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DeckWh (millions)

Appliances and Electronics Laundry Water Heating Lighting Cooling Space Heating

Figure 10. Monthly Residential Electric Loads by End-Use

Table 11. Residential Sector Monthly Electric Usage by End-Use

Month Appliances &

Electronics Laundry Water Heating Lighting Cooling Space Heating Total (millions of kWh) Jan 234 72 88 93 4 230 721 Feb 211 65 80 81 3 172 612 Mar 234 72 86 84 3 102 580 Apr 226 70 80 77 3 14 470 May 234 72 78 76 3 0 463 Jun 226 70 70 72 167 0 605 Jul 234 72 66 76 278 0 726 Aug 234 72 67 75 234 0 681 Sep 226 70 68 77 57 0 499 Oct 234 72 74 84 3 0 467 Nov 226 70 76 90 4 90 555 Dec 234 72 83 97 4 185 675 Annual 2,755 846 914 982 763 793 7,053 Percent 39% 12% 13% 14% 11% 11% 100%
Table 11 shows the end-uses derived from the utility energy model on a utility wide basis, including the melded effects of the less than full saturation of electric space and wa ter heat. However, these aggregate utility wide enduses bear no clear intuitive relationship to the end usage at a single prem ise. In Table 12 these aggregated end-uses have been disaggregated using appliance saturations from the appliance sa turation survey to give end-use estimates for a single average premise.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 16 Table 12. Residential Average Use per Premise by Electric-Served End-Use

End-Use kWh/Yr Effective Market Share Space Heating 4,835 21% Furnace Fan (gas heat) 393 79% Space Cooling 1,567 82% Water Heater 3,938 39% Light 1,654 100% All Other 6,065 100% Effective market share includes heating by secondar y heaters in gas-heated residences, and partial cooling by wi ndow units.
Note in Table 12 that the stated appliance energy use applies only to prem ises that use that type of appliance. For example the stated electric space heat end-use of 4,835 kWh per year applies only to electrically heated premises, and the 3,938 kWh per year applies only to premises with electric water heat

. Monthly residential gas loads by major end-use are shown in Figure 11 and Table 13. T he shape of residential gas demand is driven primarily by residential space heating. Space heating a ccounts for nearly three-fourths of total annual residential gas usage. Water heating is the other major gas end-use accounting for 23 percent of annual usage but over 80 percent of total summer usage.

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecMCF (millions)

Cooking & Miscellaneous Laundry Water Heating Space Heating

Figure 11. Monthly Residential Gas Loads by End-UseOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 17 Table 13. Residential Sector Monthly Gas Usage by End-Use

Month Cooking &

Miscellaneous Laundry Water Heating Space Heating Total (MCF) Jan 49,043 58,365 745,754 5,421,033 6,274,195 Feb 44,297 52,717 668,103 4,312,012 5,077,129 Mar 49,043 58,365 705,128 3,296,193 4,108,729 Apr 47,461 56,483 644,248 1,745,900 2,494,092 May 49,043 58,365 613,109 274,459 994,977 Jun 47,461 56,483 545,994 0 649,938 Jul 49,043 58,365 514,803 0 622,211 Aug 49,043 58,365 522,684 0 630,092 Sep 47,461 56,483 543,072 0 647,015 Oct 49,043 58,365 608,763 1,449,598 2,165,770 Nov 47,461 56,483 634,533 2,977,360 3,715,836 Dec 49,043 58,365 709,086 4,616,005 5,432,500 Annual 577,440 687,206 7,455,277 24,092,560 32,812,484 Percent 1.8% 2.1% 22.7% 73.4% 100.0%
Table 13 shows the end-uses derived from the utility energy model on a utility wide basis, including the melded effects of the less than full saturation of gas space and water heat . However, these aggregate utility wide end-uses bear no clear intuitive relationship to the end usage at a single premi se. In Table 14 these aggregated end-uses have been disaggregated using appliance saturations from the appliance satura tion survey to give end-use estimates for a single average premise, and the end-uses have been expressed in the common sa les units of therms.

Table 14. Residential Average Use per Premise by Gas-Served End-Us e

End-Use Therms/Yr Effective Market Share Space Heat 676 97% Water Heat 244 83% Other 115 30%
Note in Table 14 that the stated appliance energy use applies only to prem ises that use that type of appliance. For example the stated gas water heat end-use of 244 therms per year applies only to the premises with gas water heat. The end-use “other” comprises gas cooking and clothes drying together. The applia nce survey lists these appliances with a melded market share of about 32 percent.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 18 

### Electric Demand Analysis The residential peak day demand at system coincident peak is shown in Figure 12 for winter and summer. Residential contributes more demand to system peak in the summer than the wint er. Space cooling is the largest contributor to peak accounting for two-thirds of the residential peak. Appl iances and electronics also contribute significantly to winter and summer peak. Space heating demand is far a nd away the largest contributor to winter
residential demand.

Winter, Total = 1,442 MW

Laundry 8% Water Heating 13%

Space Heating 40% Lighting 11% Space Cooling 0% Appliances & Electronics 28% Summer, Total = 1,944 MW

Water Heating 4% Space Heating 0% Laundry 4%

Space Cooling 66% Appliances & Electronics 20%

Lighting 6%

Figure 12. Residential Peak Day Demand by End-Use at System Coinciden t PeakOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 19 

### Non-Residential The non-residential market is far less homogenous than residential. Ther e are a greater number of basic customer types (segments) and the variation in size of building is much larger in com mercial. For these reasons it is useful to describe the non-residential sector not only in terms of number of businesses but also in terms of square footage. Analysis of DSM opportunities in the non-residential segment also benefi ts from an understanding of the square footage of commercial and industrial space in the service territory.
Square footage estimates were developed using site-specific business data provided by DEO. Business attributes included SIC code and estimated employment. These two pieces of information we re used along with estimates of employment density (employees per square foot) by type of business to estimat e the square footage of each business record in the secondary data. The results of this analysis, s ummarized by segment, are shown in Table 15.

Table 15. Business Counts and Estimated Square Footage by Segment

Segment Total Businesses Percent Employment Percent Total SqFootage SqFootage Distribution SqFt per

Business Grocery 971 2.3% 36,118 2.3% 16,975,460 1.6% 17,482 Hospitals 91 0.2% 47,388 3.0% 16,585,800 1.5% 182,262 Hotels 334 0.8% 9,966 0.6% 7,673,820 0.7% 22,976 Office 18,203 42.9% 461,149 29.2% 317,511,370 29.5% 17,443 Other 702 1.7% 3,322 0.2% 1,760,660 0.2% 2,508 Health Srv 2,690 6.3% 58,078 3.7% 20,327,300 1.9% 7,557 Eating/Drinking 3,218 7.6% 130,749 8.3% 61,452,030 5.7% 19,096 Retail 5,881 13.9% 131,004 8.3% 61,571,880 5.7% 10,470 Schools 1,695 4.0% 168,989 10.7% 125,051,860 11.6% 73,777 Warehouse 3,071 7.2% 99,197 6.3% 169,600,530 15.7% 55,226 Total Commercial 36,856 86.9% 1,145,960 72.5% 798,510,710 74.1% Ag,Mining,Construction 2,626 6.2% 54,099 3.4% 31,918,410 3.0% 12,155 Manufacturing 2,944 6.9% 380,934 24.1% 247,256,870 22.9% 83,987 Total Other Non-Residential 5,570 13.1% 435,033 27.5% 279,175,280 25.9%
Total Non-Residential 42,426 100.0% 1,580,993 100.0% 1,077,685,990 100.0% Source: Forefront Economics estimate of square foot age based on employment and employment density by S IC. Source: Donnelly Business data covering DEOK OH ser vice territory
The last column in the table above shows the average square footage per busine ss. Square feet per business is calculated using site-specific business information for businesses in the DEO service territory. The total number of employees is calculated by segment from these business records. Square foo tage by segment is then calculated by multiplying employment density estimates (e.g. 470 square feet per employee i n retail) by the employment in that segment. Finally, average square feet per business is calculated by divi ding the segment square footage by the number of businesses in the segment. The result of these calculations wil l be combined with the number of
business sites from DEO’s customer records to estimate the non-res idential floor space and energy intensity by segment. Although informative, these calculations serve only a descripti ve purpose and are not used in the energy modeling or estimates of DSM potential.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 20 

### Electric Customer Segments Non-residential customer data were segmented using the same SIC code cla ssification scheme used to describe the business data acquired for the service territory. Number of premises and annual usage is shown by segment in Table 16 along with other descriptive information about the commercia l sector. The number of premises was found to include many non-building types of electrical services (e.g. billboards and railroad controls). An alternative measure was developed to better approximate the number of actual building s. The data in Table 16 only include premises with at least 3,000 kWh of annual usage. 4

Square feet shown in Table 16 is the total square footage found for that segm ent in the service area. The energy utilization index (EUI) is calculated using the estimate of total s quare footage. Energy utilization index results from the 2003 Commercial Building Energy Consumption Survey (CBECS) published by t he US DOE are also shown for comparison purposes. Although they follow the same general pattern, ther e are a few notable differences
in EUI estimates.

Table 16. Number of Premises and Annual Electric Usage by Segment

Segment CIS Premises Average Annual

kWh per Premise Total Usage

(millions of kWh) Percent of

C&I Loads Square Feet

per Business

(a) Estimated Total

Square Feet (millions) Square Feet

Distribution EUI (kWh

per Sq Ft) EUI from

CBECS Grocery 1,062 385,261 409 3.1% 17,482 18.6 2% 22.0 52.5 Hospitals 110 3,620,415 398 3.0% 182,262 20.0 2% 19.9 27.9 Hotels 398 426,578 170 1.3% 22,976 9.1 1% 18.6 14.7 Office 23,560 136,376 3,213 24.1% 17,443 411.0 39% 7.8 18.9 Other 3,000 189,482 568 4.3% NA NA NA NA 16.7 Health 1,887 170,049 321 2.4% 7,557 14.3 1% 22.5 19.2 Restaurant 2,492 166,581 415 3.1% 19,096 47.6 5% 8.7 38.5 Retail 4,431 161,374 715 5.4% 10,470 46.4 4% 15.4 15.6 Schools 1,099 799,524 879 6.6% 73,777 81.1 8% 10.8 7.9 Warehouse 2,668 183,635 490 3.7% 55,226 147.3 14% 3.3 10.8 Total Commercial 40,707 186,167 7,578 57% 795.4 76% 8.8 NA Ag, Mining, Util. & Constr 1,970 77,826 153 1.1% 12,155 2 3.9 2% 6.4 NA Manufacturing 2,753 2,039,593 5,615 42.1% 83,987 231.2 22% 24.3 NA Total Other Non-Residential 4,723 1,221,325 5,768 43% 255.2 24% 22.6 NA

Total Non-Residential 45,430 293,784 13,347 100% 1,050.5 100% 12.2 NA

NA - Not available due to nonsensical or unavailabl e data. Loads and customer counts exclude "small load" prem ises (about 9,700 accounts with less than 3,000 kWh per year). Source: Energy model results using monthly billing data from CIS. CBECS is the Commercial Building E nergy Consumption Survey results for the Midwest Ce nsus Region, East North Central Census Division (2003, US DOE). (a) From Table 15, except the value for Other which was not used due to nonsensical results.

Energy utilization indices, plotted in Figure 13, serve a descriptive purpos e in this report and are not used for the energy savings estimates. Health, hospitals, hotels and grocery stores are the most energy intensive of commercial buildings but only account for a small amount of the applicable floor space. O ffices have a large amount of square footage along with a low to moderate EUI.

4 Although arbitrary, this level of usage was thought to effectively screen non-building premises such a s billboards and switching equipment.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 21 22.0

19.9 18.6 7.8 22.5 8.7 15.4 10.8 3.3

- 5.0 10.0 15.0 20.0 25.0 30.0 Grocery Hospitals Hotels Office Health Restaurant Retail Schools Warehouse

kWh Usage per Square Foot

Figure 13. Commercial Electric EUI Distribution

The estimated distribution of commercial square footage is shown in Figure 14. Together the square footage and EUI information are useful for understanding the nature of energy consumption in the commercial segment. Offices account for about half of all commercial floor space. Although larger in terms of square footage, the EUI for offices is low-moderate. Schools account for approximately one-tenth of a ll commercial space and have relatively moderate energy intensity.

Retail 6% Schools 10%

Office 51% Warehouse 19%

Restaurant 6% Health

2% Grocery 2% Hotels 1% Hospitals 3%

Figure 14. Square Footage Distribution of Electric Commercial Cus tomersOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 22 

### Gas Customer Segments The segmentation approach used for non-residential electric customers w as also applied to gas customers. Gas nonresidential segments are shown in Table 17. Manufacturing customers account for over 40 percent of all nonresidential usage. Commercial segments make up 57 percent of non-resident ial usage with offices accounting for the largest amount of commercial gas consumption.

Table 17. Number of Premises and Annual Gas Usage by Segment

Segment CIS Premises Average Annual

Therms per Premise Total Usage

(MCF) Percent of

C&I Loads Square Feet

per Business

(a) Estimated Total

Square Feet (millions) Square Feet

Distribution EUI (therms

per sq ft) EUI from

CBECS Grocery 774 5,013 320,939 0.9% 17,482 13.5 1.9% 0.244 0.50 Hospitals 86 139,991 995,803 2.9% 182,262 15.7 2.2% 0.654 1. 31 Hotels 267 19,738 435,896 1.3% 22,976 6.1 0.9% 0.731 0.78 Office 14,550 6,480 7,798,822 22.6% 17,443 253.8 35.5% 0.31 6 0.44 Other 2,118 11,958 2,094,843 6.1% NA NA NA NA 0.68 Health 1,194 5,699 562,838 1.6% 7,557 9.0 1.3% 0.642 0.52 Restaurant 2,202 7,636 1,390,699 4.0% 19,096 42.1 5.9% 0.34 0 1.53 Retail 3,393 3,909 1,096,982 3.2% 10,470 35.5 5.0% 0.318 0.5 2 Schools 767 46,233 2,933,037 8.5% 73,777 56.6 7.9% 0.533 0.5 5 Warehouse 1,926 12,480 1,988,196 5.8% 55,226 106.4 14.9% 0. 192 0.27 Total Commercial 27,277 8,695 19,618,054 57% 538.7 75.3% 0.335 NA Ag, Mining, Util. & Constr 1,137 4,341 408,289 1.2% 12,1 55 13.8 1.9% 0.304 NA Manufacturing 1,937 90,565 14,509,931 42.0% 83,987 162.7 2 2.7% 0.918 NA Total Other Non-Residential 3,074 58,673 14,918,220 43% 176.5 24.7% 0.870 NA

Total Non-Residential 30,351 13,757 34,536,274 100% 715.2 100.0% 0.467 NA

NA - Not avalilable due to nonsensical or unavailab le data. Source: Energy model results using monthly billing data from CIS. CBECS is the Commercial Building E nergy Consumption Survey for the Midwest Census Reg ion, East North Central Census Division (2003, US DOE) (a) From Table 15.

Figure 15 and Figure 16 show the gas energy intensities by segment and the square f ootage distribution of gas commercial customers, respectively. Taken together, these figures pr ovide insights into which segments have higher than average usage and account for significant square footage. The e nergy intensity of schools, for example, is on the moderate-to-high side and schools account for a relatively larg e amount of square feet.

0.24 0.65 0.73 0.32 0.64 0.34 0.32 0.53 0.19

- 0.20 0.40 0.60 0.80 Grocery Hospitals Hotels Office Health Restaurant Retail Schools Warehouse

Therm Usage per Square Foot Figure 15. Commercial Gas EUI DistributionOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 23 Retail 7% Schools 11%
Office 46% Warehouse 19%

Restaurant 8% Health

2% Grocery 3% Hotels 1% Hospitals 3%

Figure 16. Square Footage Distribution of Gas Commercial Customer s



### Commercial Energy Usage and Demand Annual energy usage by segment has already been presented in Table 16 and Table 17. Commercial energy usage by end-use is shown in Figure 17. Commercial load is characterized by a large per centage of baseload with a prominent summer cooling peak.

0 100 200 300 400 500 600 700 800

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DeckWh (millions)

Appliances, Electronics & Other Baseload Exterior Light Water Heating Lighting Cooling Space Heating Figure 17. Monthly Commercial Electric Usage by End-Use

The large amount of baseload in commercial customer energy usage is appa rent in Figure 17. Seasonally high usage associated for summer space cooling is also apparent in the mont hly usage. As shown in Figure 18, the summer peak for commercial customers comes primarily from space cooling but there is also significant contributions to peak from appliances and electronics (plug loads) and lighting. The winter peak is driven by lighting, plug loads and exterior lighting by nearly equal amounts. Space heat ing is a significant contributor to the winter peak of commercial customers but not as large as the other thr ee end-uses mentioned.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 24 Winter, Total = 961 MW

Appliances & Electronics 25% Exterior Light 25%

Lighting 30% Space Cooling 1% Water Heating 2% Space Heating 17% Summer, Total = 1,461 MW

Space Heating 0% Water Heating

2%

Space Cooling 44%

Lighting 23% Appliances &

Electronics 24% Exterior Light 7%

Figure 18. Commercial Peak Day Demand by End-Use at System Coincident Peak

As shown in Figure 19 the commercial gas usage is highly seasonal and dominated by space heating. A significant baseload is also present in the form of water heat. Other baseloads are sm all and insignificant relative to space and water heating.

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecMCF (Millions)

Internal Baseload External Baseload Water Heating Space Heating

Figure 19. Monthly Commercial Gas Usage by End-UseOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 25 

### Manufacturing Energy Usage Electric sales to manufacturing customers came to 5.6 billion kWh in 2007, nearl y one-fourth of total sales. As shown in Table 18, manufacturing customers cover a wide range of industries.

Table 18. Manufacturing Customers and Actual Electric 2007 Loads

SIC - Industry Name Customers Use Per Customer (MWh) Total Usage

(MWh) Percent Average Peak (kW) 20 - Food and Kindred Products 167 2,293

382,959

7% 496 22 - Textile Mill Products 18 385

6,921

0% 98 23 - Apparel and Other Textile Products 62 380

23,541

0% 112 24 - Lumber and Wood Products 82 256

20,987

0% 89 25 - Furniture and Fixtures 53 273

14,483

0% 106 26 - Paper and Allied Products 96 4,497

431,704

8% 850 27 - Printing and Publishing 286 493

140,886

2% 137 28 - Chemicals and Allied Products 217 5,765

1,251,099

22% 1,022 29 - Petroleum and Coal Products 53 761

40,309

1% 256 30 - Rubber and Miscellaneous Plastics Products 82 2,227

182,590

3% 443 31 - Leather and Leather Products 4 141

563

0% 72 32 - Stone, Clay, Glass, and Concrete Products 86 358

30,755

1% 133 33 - Primary Metal Industries 89 18,099

1,610,802

28% 2,762 34 - Fabricated Metal Products 311 704

218,969

4% 206 35 - Industrial Machinery and Equipment 537 520

279,187

5% 156 36 - Electrical and Electronic Equipment 328 927

304,088

5% 237 37 - Transportation Equipment 62 10,325

640,121

11% 3,538 38 - Instruments and Related Products 66 606

39,968

1% 144 39 - Miscellaneous Manufacturing Industries 154 379

58,414

1% 123 Total Manufacturing 2,753 2,063 5,678,346 100% 447
Sales to gas customers account for 14.1 million MCF in 2007, about one-fifth of total ga s sales.

Table 19. Manufacturing Customers and Actual Gas 2007 Loads

SIC - Industry Name Customers Use Per Customer (MCF) Total Usage

(MCF) Percent 20 - Food and Kindred Products 123 10,833

1,332,411

9% 22 - Textile Mill Products 14 6,870

96,182

1% 23 - Apparel and Other Textile Products 49 892

43,718

0% 24 - Lumber and Wood Products 68 415

28,207

0% 25 - Furniture and Fixtures 45 958

43,089

0% 26 - Paper and Allied Products 82 20,068

1,645,556

12% 27 - Printing and Publishing 227 1,314

298,263

2% 28 - Chemicals and Allied Products 172 24,846

4,273,437

30% 29 - Petroleum and Coal Products 36 18,871

679,349

5% 30 - Rubber and Miscellaneous Plastics Products 63 11,099

699,217

5% 31 - Leather and Leather Products 5 399

1,994

0% 32 - Stone, Clay, Glass, and Concrete Products 45 2,440

109,789

1% 33 - Primary Metal Industries 67 10,939

732,942

5% 34 - Fabricated Metal Products 221 3,436

759,281

5% 35 - Industrial Machinery and Equipment 402 1,647

662,132

5% 36 - Electrical and Electronic Equipment 120 2,292

275,082

2% 37 - Transportation Equipment 44 24,609

1,082,805

8% 38 - Instruments and Related Products 55 2,506

137,854

1% 39 - Miscellaneous Manufacturing Industries 88 1,306

114,893

1% Missing 11 98,979

1,088,768

8% Total Manufacturing 1,937 7,282 14,104,968 100%
Chemicals is by far the largest manufacturing sector, accounting for 30 percent of gas sales to manufacturing

customers.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 26 Total manufacturing loads are shown by month in Figure 20. Manufacturing loads are ch aracterized by large process-related and motor consumption that is not highly correlated with weat her. Still, there is a noticeable summer cooling load that adds to the coincident July peak.

0 100 200 300 400 500 600

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DeckWh (millions)

Other Baseload Process Water Heating Lighting Cooling Space Heating Figure 20. Monthly Manufacturing Electric Usage by End-Use

Total manufacturing gas usage is shown by month in Figure 21. Manufacturing usage is characterized by large heating loads.

0.0 0.5 1.0 1.5 2.0 2.5

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecMCF (millions)

Internal Process External Process Water Heat Heat
Figure 21. Monthly Manufacturing Gas Usage by End-UseOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 27 

## TECHNICAL POTENTIAL

The technical potential is defined by the application of maximum reasona ble energy efficiency improvements to every residential and non-residential customer/building served by DEO . The technical potential also includes extensive application of site-based solar technologies, solar photovolt aic, and solar water heating, and small-scale site-based combined heat and power applied to existing gas loads. This e stimate of technical potential includes both the energy savings attributable to the applied efficiency technologie s as well as the peak load reductions proceeding from these energy savings, and from dispatched load reductions assoc iated with appliance control and combined heat and power (CHP).
Our analysis of technical potential does not include fuel switching whe re we define fuel switching as replacing the fuel used to power an appliance. There are many applications of fuel switchi ng that may be justifiable from the customer or the utility perspective, such as gas backed heat pumps or lar ge commercial or industrial CHP, but these have not been included in the scope of this analysis. As explained below, we do i nclude small-scale site-based generation of electricity through CHP in our estimates of technical pote ntial.

Fundamental to an estimate of technical potential is the baseline si tuation. In this baseline, federal energy legislation has mandated the retirement of incandescent lighting. Using estimates based on EIA work the utility has incorporated this mandate in its latest forecast. In this estimate, the baseline is defined by the utility forecast which includes the effects of retiring incandescent lighting, but assumes no other energy efficiency efforts other than the normal response of customers to new products and to changes in utility costs. T he effect of this incandescent phase out in the Ohio service area is explicitly noted in Table 20 for the years of interest.

Table 20. Forecast Effect of Phased Out Incandescent Lighting

Year Forecast Change

(MWH/year) 2012 0 2017 621,559 2025 652,452 2027 651,638

Note in the table that the effect of the lighting change is not evident unti l 2012, then in the next five years most of the incandescent lighting is phased out. After 2017 the effect remains essentially constant. Physically these mandated lighting reductions are part of the real overall savings picture . But this portion of the savings, since it has been mandated, is now part of the base case. Accordingly, this estimate of te chnical potential is based on the latest forecast which is reduced to include the lighting reductions, and the reported technical potential is similarly
reduced.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 28 Table 21 and Table 22, respectively, summarize the electric and gas t echnical potential as found for the base year, 2007, and for the planning years 2012, 2017, 2025 and 2027. The utility growth rates are based on grow th ratios derived from the forecast as reduced for mandated lighting efficiency. E lectric energy use is expressed as Total Energy, GWh/yr, including a loss ratio of 6.4 percent, and Load likewise include s losses. Gas energy is expressed as sales to ultimate customers in mmcf/yr, including a loss ratio of 1.1 perc ent, but gas use does not include company use or net injections to storage. The 2025 planning year is included for comparison to the Ohio planning benchmark for that year. Note in these tables, that the technical potential savings percentages are presented with reference to the DEO customers included in this study as defined by the cus tomer and sales count in this study. In general, the sales count includes all utility sales to residentia l, commercial, and industrial customers, but it excludes some special sales such as sales for resale and internal utility use.
Although these electric and gas technical potential savings estimat es are presented here together, they were in fact derived by a separate analysis, treating each fuel as if it were a sepa rate utility. However there is a linkage between gas savings and electric savings. This linkage is principally related to the interaction between gas space heating energy and electric internal gains in buildings. The gas usage is also in creased by the assumed level of combined heat and power. These two gas/electric interactions will work to in crease gas usage thereby reducing the reported gas savings and technical potential.
The technical potential energy savings for the portion examined for technic al potential is about 29 percent energy savings for electric and 29 percent savings for gas. The customer sto ck for both these utilities involves predominant gas space and water heating, which leads to higher savings opportunit ies from space heating and water heating for gas customers. The electric savings proceed from lighting eff iciencies, HVAC equipment improvements, and appliance efficiencies.

Table 21. Summary of Technical Potential for Electric Savings O ver 20-Year Planning Horizon
2007 2012 2017 2025 2027 Base Case Total Energy , GWh/yr 21,883 22,351 22,806 23,574 23,800 Technical Potential Total Energy Savings GWh/yr 6,924 7,012 6,792 6,896 6,932 Percent Reduction in Total Energy 32% 31% 30% 29% 29% Base Case Summer System Peak Load – Aug (MW) 4,412 4,513 4,606 4,704 4,737 Technical Potential Summer Peak Savings (MW) 1,530 1,562 1,534 1,546 1,550 Percent Reduction Summer Peak 35% 35% 33% 33% 33% Base Case Winter System Peak Load – Feb (MW) 3,555 3,634 3,744 3,823 3,849 Technical Potential Winter Peak Savings (MW) 1,371 1,382 1,382 1,392 1,398 Percent Reduction Winter Peak 39% 38% 37% 36% 36% Load Control Summer Peak Load Reduction (MW) 214 214 214 214 214 Load Control Percent Peak Reduction 5% 5% 5% 5% 5% CHP Load Control Summer Peak Reduction (MW) 480 480 480 480 480 CHP Load Control Percent Peak Reduction 11% 11% 10% 10% 10%Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 29 Notice in Table 21 that the application of efficiency technology has led to reduct ions in annual energy use, GWh, of 29 percent. Note also that in the near term years, the technical potential sa vings are 31 to 32 percent, but in the later years this potential drops to 29 percent as the mandated lighting effic iency takes hold. And most significantly, the application of this broad range of efficiency measures has led to sig nificant percentage reductions in both the winter and summer peak system load, MW, greater than the percentage ener gy reductions because the energy savings are most concentrated at peak times. The technical potential peak savings reported in Table 21 are a natural consequence of the energy savings only and do not include the further peak savings reported as the load control summer peak savings which are the result of deliberate load control disp atch events.

Table 22. Summary of Technical Potential for Gas Savings Over 20-Y ear Planning Horizon
2007 2012 2017 2025 2027 Base Case Energy Sales, mmcf/yr 68,098 64,326 66,136 67,484 68,290 Technical Potential Energy Savings, mmcf/yr 19,430 18,370 19,434 19,823 20,054 Percent Reduction 29% 29% 29% 29% 29%
Notice in Table 22 that the percent savings for gas energy are about the s ame magnitude as the percentage savings for electricity. The technical potential gas savings are the net of the savings attributable to gas efficiency measures and an increase in gas usage caused by the CHP and an increase caused by the reduce d internal gains caused by the electrical efficiency measures applied to the same population. Wit hout these gas usage increases the gas savings from efficiency alone would have been about 38 percent because the customer sto ck involves predominant gas space and water heating, which leads to higher savings opportunities from space a nd water heating gas customers.



### Technical Potential Load Effects With regard to DEO’s reserve margin, an important aspect of the techni cal potential pertains to the changes in demand MW attributable to the efficiency measures. In general, changes in de mand (and load) will vary from hour to hour and month to month. For the total of DEO customers, we have estimated the av erage hourly demand curve, and the peak demand curve for each month for the base case and for the technical potential case. These hourly demand curves are the aggregate distributed demand of the customers. The diffe rence between the base case hourly demand and the technical potential case hourly demand is taken here as the te chnical potential demand offset. The system load offset is then derived from the system demand offset by increas ing the demand to account for the associated T&D losses of 6.4 percent. A discussion of the energy and demand model ing methodology is found in the technical appendix.
Figure 22 shows the peak load curve for summer, August, and Figure 23 shows the peak load c urve for winter, February. These figures have been colored to identify the source of the load s avings. The red portion shows the savings from general efficiency measures and the yellow portion shows t he load impact from the site-based solar electric and other solar applications.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 30 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour of DaySystem Load MW

Core Load Solar Potential Efficiency Potential Figure 22. Technical Potential for Demand Reduction – Summer

In Figure 22 it is apparent that some of the significant summer load reductions are due to solar electric generation that is concentrated most during the peak days. Note also that there is some slight evidence of solar savings during non-daylight hours, which is due to solar heated water used later in the day. Figure 23 shows the composition of the winter peak demand in February.

0 500 1000 1500 2000 2500 3000 3500 4000 4500

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour of DaySystem Load MW

Core Load Solar Potential Efficiency Potential CHP basecase 2007 Figure 23. Technical Potential for Demand Reduction – Winter

It is noteworthy that the demand savings for winter are percentage wise larger than the demand savings for summer. This is because winter heating savings are quite strong and because the a ssumed combined heat and power acts at its fullest during winter peaks. It should be noted that these load sav ings are a by-product of the energy efficiency savings and the CHP, and do not include dispatched demand response or direct load contro l.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 31 

### Technical Potential Load Control Load control has long been a demonstrated option for managing peak load situati ons. Recent improvements in communications, networking, and controls have significantly increased capabi lity for large scale control of various end-use loads. These advances are referred to here generally as Advance d Metering Infrastructure (AMI).
AMI employs metering and networking to allow large numbers of individual m eters to be read remotely and designated loads to be toggled on command. The precise coordinated control of div erse loads can be used to reduce the total diversified system load during system peak periods. AMI als o supports automatic meter reading, and facilitates the use of time of day or critical peak pricing and distributi on O&M diagnostics. It is probable that advanced metering will eventually become a common part of the utility syst em based on these multiple benefits.
An upper bound of the demand reductions achievable by direct load control through AMI w ill be estimated here. It can be strictly argued that when air conditioners and water heaters ar e cycled off through direct load control, they involve behavioral choices, but if the cycles are properly designed, t here will be almost no perceived loss of amenity. Physically, the precisely sequenced cycling afforded by AMI is l everaging the inherent benefits of the thermal storage of water heaters and the dwellings themselves to reduc e peak demand.
Further demand reductions and energy reductions can be achieved through a vari ety of time of use or other rate designs. Such savings are essentially behavioral responses to higher prices. However, the focus of this technical potential study is on the physical potential for energy savings. The many pos sible avenues of energy savings caused by behavioral changes, while potentially significant, are not part of this study.
The upper bound of AMI related demand savings will be taken as defined by the contr ol of 30 percent of the residential electric water heating load and the control of 225,000 resident ial /small commercial scale air conditioners. Figure 24 shows the effect of such a large scale control ex ercise. In Figure 24 note that the direct load control has reduced the peak demand in the hours of 14:00 to 17:00 with a maximum loa d reduction of 214 MW. The control of water heaters or air conditioners always involves a temporary increase in demand when these appliances are turned back on. Therefore, the control events must be c arefully staged so that the temporary increase in demand does not just shift the peak a few hours.
In this example, the air conditioners are cycled off in three waves duri ng the afternoon, and the water heaters are cycled off much later in the afternoon (around 6 PM). In this manner the demand reduc tions from the water heater cycling are counteracting the temporary demand increases as the air conditioners are brought back on line. In fact there is less benefit to cycling a water heater during system peak beca use that is a minimal usage time for water heaters. But later in the day, about 6 PM to 10 PM, water heater usage peaks and the re is much more benefit to cycling. Figure 24 shows that with careful staging, the top of the system pea k can be effectively shaved off. Note in Figure 24 that the demand has increased by more than 65 MW during the non-peak hours of 1-4 AM as the water heaters are brought back on line.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 32 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour of DaySystem Load MW

Core Load Solar Potential Efficiency Potential DLC & DR basecase 2007 Figure 24. Direct Load Control Demand Reductions - Summer

In this example, only two types of loads have been controlled, unitary air condit ioners and storage water heaters. Commercial lighting could also be controlled, but it is not considered here be cause lighting control, especially day lighting, is expected to be redundant with lighting control installed as an ene rgy saving measure. Another class of demand reduction measures is associated with industrial load shedding contrac ts. These industrial load reductions can be quite large, even larger than the load reductions from the direct loa d control shown in Figure 24. These load reductions would be in addition to the reductions afforded by the direct load con trol illustrated here. These unique industrial contracts are not considered in this technical potential s tudy.
It is evident in the figure that this type of DSM load reduction has limi ted potential relative to the load reduction proceeding generally from energy efficiency. While DR and DLC are potential ly the most cost effective and most quickly deployed load reduction measures, they are limited. Nevertheles s, these measures will need to play a significant role in any DSM portfolio.



### Combined Heat and Power Combined heat and power, CHP, can be a further type of load control. There are two classes of combined heat and power. The first class is applied to large steady thermal loads, usual ly at an industrial scale and usually these are recognized in the industrial forecast. This first class is the onl y type of CHP that has proved cost effective because it has a high load factor and uses the benefits from the full value of its thermal output. But because this class has a steady output, it has limited load control possibilities. The second class, r eferred to here as “micro CHP”, is applied to space heat and water heat loads which are highly seasonal. It has a low l oad factor, which works against cost effectiveness, but it has strong summer load control possibilities beca use it has no load in the summer. While this class is usually not conventionally cost effective, the valuation of ancill ary benefits such as carbon offsets, very favorable siting advantages, and strong capacity reserve will improve t he cost effectiveness. The control of micro CHP for load offset purposes is significantly facilitated by an advanced me tering infrastructure. The effect of this type of load control is shown in Figure 25.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 33 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour of DaySystem Load MW

Core Load Solar Potential Efficiency Potential Dispatched CHP basecase 2007 Figure 25. Load Control from Dispatched CHP - Summer

Note in this figure that CHP can be a very significant load control option, muc h greater than can be achieved by the direct load control of about 225,000 air conditioners illustrated in Figure 24. How ever, this technology is still emerging and no large scale demonstration of such control has been made. Also the h eat rate for such electricity is high and the generation efficiencies may correspondingly be relatively low, i n the 20 to 30 percent range. Notably, this resource is based on ultra clean and quiet combustion in sterling cycl e engines or fuel cells, and it can potentially be readily sited anywhere in the service territory and us ed to balance distribution. At this time micro CHP is not yet ready to deploy beyond the demonstration stage. (By contrast, sola r electric technology is fully ready to deploy in large scale with known performance and with a reasonably cert ain service life). But even though micro CHP is not ready for full deployment, a large scale deployment of 150,000 units (600 MW total), has been made part of this technical potential assessment as a placeholder bec ause this technology is quickly maturing and is expected to be applicable within the 20-year planning window.



### Principal Components of the Technical Potential A strategic understanding of the possibilities and challenges of a larg e scale efficiency undertaking requires an understanding of the principal components of the energy technical potential. The technical potential for energy savings divides into four components: retrofit, new construction, solar , and CHP. These components are illustrated in Figure 26 for electric savings and Figure 27 for gas savings. These figur es show these components over the twenty-year planning horizon in a color-coded fashion.

The retrofit potential, red, represents the technical potential of energy savings that can be achieved in the existing building stock. In this analysis the existing stock is taken as constant over the twenty-year time horizon. This is the largest portion of the technical potential, and it contains many energy i nefficiencies that were embedded in the customer stock during the last half century. As such, these customers are disproportionately exposed to increasing energy costs, and there will (or could) be a tendency to migrate to more e fficiency as a price response.
The technical potential for energy savings in new construction is shown by t he green portion which increases in proportion to the amount of new construction and major retrofit. This is the s mallest component of the technicalOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 34 potential, but it is persistently growing. The physical attributes of t he new construction technical potential are quite similar to those in the retrofit technical potential: insulation, v entilation control, lighting, efficient heat pumps etc. But in the case of new construction, the cost for these measures is lower because it is an incremental cost on an existing construction process. Efficiency measures are generally neve r cheaper than when they are applied during initial construction. In this sense, the technical potential associate d with new construction is a significant lost opportunity. A very important perspective on the new construction technical pot ential is that the associated builders, suppliers, and code agencies effectively become the reservoir of energy efficiency practices necessary to support the efficiency undertaking as a whole. New construction efficiency ( and new appliance efficiency) is a key infrastructural investment in any long term efficiency plan.
The solar potential, yellow, is large and increases slightly with ti me and new construction, and as more treeless building sites are used. An important distinguishing feature of this potentia l is that it is at a maximum during summer and during the utility system peaks. With regard to solar applica tions, it is important to draw a perspective from the current state of building science. The design of increasingly efficient buildings has diminishing returns. It appears that building energy use reductions of more than 50 percent beyond the ASH RAE 90.1-2004 building code will be difficult to achieve without resorting to solar application s. The current thrust toward “net zero” buildings can practically only be achieved by significant applications of solar photov oltaic arrays. While these solar applications will require a large area exposed to sunlight, the required sol ar exposures usually lie within the geometries of most residential and commercial buildings. However, a s later analysis will show, the solar potential is beyond the immediate cost effectiveness limit. But this category of potential is technically sound, very large, and homogenous. It may reasonably become cost effective within the 20-year pl anning window, and it is important to understand the role and size of this resource in the larger picture.
In Figure 26, the thin light blue line on the top is the savings due to the phase ou t of the incandescent lighting. It is intended to give perspective on the phase out savings (which are not counted in th e technical potential) in proportion to the whole of the technical potential energy savings. In fact , these are strong savings and represent about 40 percent of the lighting in the residential sector.
In Figure 26, the violet line represents the energy generated by the micro CHP which has been applied to gas heated customers, 150,000 4-kW units. Electricity generated by CHP applied to an existi ng gas thermal load has a unique efficiency opportunity in terms of fuel use and in terms of carbon offset becaus e the fuel use associated with the generated electricity is only the marginal increase in gas use. The CHP resource is strongly favored from the perspective of carbon calculations, and it also has significant benefit a s summer capacity.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 35 0 5,000 10,000 15,000 20,000 25,000

2007 2012 2017 2022 2027
Forecast Fiscal YearEnergy, GWh/yr

Core Load CHP Solar New Const Retrofit CFL
Figure 26. Electric Technical Potential over Planning Horizon

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

2007 2012 2017 2022 2027
Forecast Fiscal YearGas Volume, mmcf/yr

Core Load Solar New Const Retrofit
Figure 27. Gas Technical Potential over Planning Horizon

As matters currently stand, gas sales have been static or decreasi ng. There is no forecast for a migration of space or water heat loads to gas. The rationale has been that fuel market share s depend on many specific physical and economic particulars and are better left to the market to sort out. Althoug h there is no change in gas heat market share, the gas usage in this technical potential model shows an increase due to the use of micro CHP and due to increased space heat needs incurred because of reduced electrical in ternal gains.
Therefore, the gas savings illustrated in Figure 27 are the net of gas sa vings due to efficiency measures and gas increases due to CHP and due to the increased gas space heat required to com pensate for the reduced electrical gain from the lighting reductions associated with the electrical technical potential.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 36 But it is important to recognize that gas space and water heating has a much l ower carbon dioxide output for these end-uses than coal based electricity, and it is easily foreseeable that m arket and environmental forces could in this time period lead to slightly increased gas use. As perspective, Table 23 provides a brief theoretical comparison of the carbon emissions required to meet a thermal load of 100,000 BTU.

Table 23. Carbon Emissions

Heat Source Pounds Carbon Emitted per 100,000 BTU Load Coal/Electric Heat Pump at COP 3 7.09 Coal/Electric Heat as Modeled COP (1.3) 16.37 Direct Gas at 85% Efficiency 4.10 Gas Mechanical Heat Pump 2.38 Gas CHP Offsetting Coal/Electric -3.62

Table 23 shows that gas heating has much lower carbon emissions than elect ric space or water heating. Note the impact of Gas CHP Offsetting Coal/Electric is especially noteworthy. T his situation actually lowers carbon emissions, not just minimizing them as in the case of direct heating by g as. Currently, the economics of fuel choice relies on status quo economics that does not significantly include carbon emis sions costs. If carbon emissions impacts are more significantly factored into these fuel choices, t hen the market could shift toward lower carbon options. Therefore, in program plans we have included a pilot demonstration pr oject, for residential scale CHP.
In both Figure 26 and Figure 27 the largest energy use is that labeled “core loa d” which is the energy still necessary after the maximal application of efficiency and site generation assume d in this technical potential estimate. This core load assumes that utility customer behavior remains essentially c onstant: that thermostat settings remain constant and that energy costs rise as assumed in the forecast. Higher e nergy costs and/or thermostat changes can significantly lower this core load and increase the technical poten tial beyond that reported here.
Our analysis of technical potential shows that, as an upper bound, it is phys ically possible to cut energy usage and system peak load significantly. However, these estimates imply ver y large expenditures and cannot be considered realistic estimates of actual reductions because they are unconstra ined by market, behavioral and budget
considerations.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 37 

## ELECTRIC MEASURES AND ECONOMIC POTENTIAL

In this section we present detailed information regarding energy effic iency technologies. These technologies, referred to as Energy Efficiency Measures (EEMs), cause a reduction in the load profiles of the end-uses presented in the prior section. In this section we derive estimates of economic potential based on the EEM details and market assessment results from the prior sections. 

### Energy Efficiency Measure Assessment In order to evaluate technologies for their potential in electric DSM programs it is necessary to compile detailed
information at the EEM level of detail. An EEM is a device or action th at causes a drop in energy usage. The objective of EEM assessment or screening is to determine the lik ely set of cost effective measures which can then be used to populate DSM programs that deliver savings through standalone or bundl ed EEMs. An important byproduct of this screening is the information necessary to construct a DSM supply curve for determining economic potential.
Our list of EEMs and assumptions was developed through an integrated approach tha t combined an extensive review of industry literature, the detailed analysis of DEO loads des cribed earlier, and our own expert opinion. These assumptions and sources are documented in the appendixes. The assumpt ions required to calculate EEM
cost effectiveness are shown in Table 24 for residential and Table 25 for non-residential. Each of these tables uses a standard layout to present the assumptions used to calculate real leveli zed cost (RLC) per kWh. A discussion of the cost effectiveness approach used to evaluate EEMs follows these two tables.
Descriptions of the columns presented in Table 24 and Table 25 are present ed below. End-Uses EEMs are grouped by the end-use they addre ss. EEM Description Brief description of the EEM. See the appendixes for a more detailed description. EEM Reference Code to uniquely identify an EEM in t his project. Application For residential measures only, describe s the segment of residential sector where the EEM assumptions are applicable. For example, the same EEM may have different assumptions for single family and multifamily applications. Annual kWh Savings Annual kWh savings per customer site. Annual Therm Savings ( Table 24 only) Annual therm savings per customer site when EEM inv olves a technology with dual fuel impacts. Not applicable to non-residential. Incremental Cost The incremental cost of installing the EEM at the typical customer site, including an y incremental equipment and labor expenses. Note: “ incremental” refers to the costs over and above what would have been expended for a stand ard efficiency measure. All costs are in 2007 dollars. Annual O&M Annual operation and maintenance expense s over and above the O&M expenses incurred for standard efficiency measures. Most EEMs have z ero incremental O&M expenses. Measure Life The average expected life of the measu re. Real Levelized Cost The incremental cost and annual O&M expressed as a constant annual payment over th e life of the measure and then divided by the annual savings. Real levelized cost provides a way of comparing EEMs with different attributes suc h as measure life on the same scale.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 38 Table 24. Electric DSM Technology Assessment, Residential

End-Uses EEM Description EEM Reference Application Annual kWh Savings Annual

Therm Savings Incremental

Cost (dollars) Annual

O&M (dollars) Measure

Life (years) Real

Levelized Cost ($/kWh) Customer-Sited Generation Solar Photovoltaic RE-1 All 3,300 0 20,000 10 25 0.3910

Resist to SEER 13 Heat Pump RE-2 Elec SF 6,000 0 10,000 20 10 0.2088 Resist to SEER 13 Heat Pump RE-3 Elec MF 4,800 0 10,000 20 10 0.2610 SEER 8 to SEER 13 CAC RE-4 Gas SF 1,400 0 3,500 20 10 0.3225 SEER 8 to SEER 13 CAC RE-5 Gas MF 1,200 0 3,500 20 10 0.3763 Refrig Charge/Duct Tune-Up RE-6 Elec 1,200 0 350 0 13 0.0292 Refrig Charge/Duct Tune-Up RE-7 Gas 300 47 350 0 13 0.0467 SEER 13 to SEER 15 Heat Pump RE-8 SF Elec New 800 0 1,000 20 20 0.1170 SEER 13 to SEER 15 Heat Pump RE-9 MF Elec New 700 0 1,000 20 20 0.1337 SEER 13 to SEER 15 CAC RE-10 SF Gas New 400 0 800 20 20 0.1972 SEER 13 to SEER 15 CAC RE-11 MF Gas New 350 0 800 20 20 0.2253 Efficient Window AC RE-12 All 200 0 150 10 13 0.1251 Cool Roofs RE-13 Elec 560 0 158 0 12 0.0301 EE Windows RE-14 Elec 1,334 0 2,500 0 25 0.1199 Programmable Thermostats RE-15 Elec 500 0 120 0 10 0.0296 Ceiling Insulation (R6 to R30) RE-16 Elec 1,800 0 750 0 25 0.0267 Ceiling Insulation (R6 to R30) RE-17 Gas 300 100 750 0 25 0.0640 House Sealing using Blower Door RE-18 Elec 1,000 0 500 0 13 0.0501 House Sealing using Blower Door RE-19 Gas 200 42 500 0 13 0.1001 Ground Source Heat Pump RE-20 Elec 5,382 0 7,000 20 25 0.0870 Wall Insulation (R3 to R11) RE-21 Elec 2,100 0 1,400 0 25 0.0427 Wall Insulation (R3 to R11) RE-22 Gas 400 100 1,400 0 25 0.0896 Solar Siting/Passive Design RE-23 New Elec 1,500 0 500 0 50 0.0155 Energy Star Manufactured Home RE-24 New 5,000 0 2,600 0 25 0.0333 Residential Space Conditioning

Energy Star Construction RE-25 New Elec 4,223 0 3,000 0 50 0.0331

Eliminate Old Refrigerators RE-26 All 1,150 0 165 0 5 0.0322 Load Management Set Back HVAC RE-27 All 1,000 0 5 0 2 0.0027

Energy Star Clothes Washers RE-28 All 400 0 400 0 18 0.0790 Energy Star Dish Washers RE-29 All 75 0 50 0 10 0.0822 Energy Star Refrigerators RE-30 All 100 0 200 0 18 0.1580 Residential Appliances
Pool Pumps RE-31 All 648 0 180 0 10 0.0342

Compact Fluorescent RE-32 All 660 0 24 0 5 0.0082 Daylighting Design RE-33 New Elec 750 0 500 0 25 0.0427 Residential Lighting Occupancy Controlled Outdoor RE-34 All 250 0 100 0 10 0.0493

Tank/Pipe Wrap and Water Temp Setpoint RE-35 All 200 0 50 0 6 0.0477 Low Flow Fixtures RE-36 All 500 0 25 0 10 0.0062 Heat Pump Water Heaters RE-37 All 2,000 0 2,500 0 18 0.0987 Tankless Water Heaters RE-38 All 400 0 1,500 0 18 0.2962 Solar Water Heaters RE-39 All 2,600 0 6,000 20 25 0.1554 Water Heating

Efficient Plumbing RE-40 New Elec 500 0 500 0 25 0.0640

Combined Heat/Power, Micro CHP RE-41 SF Gas 5,000 0 10,000 220 20 0.1912 Emerging Technologies Residential LED Lighting RE-42 All 1,000 0 500 0 20 0.0368 Note: Dollar amounts are expressed in 2007 dollars.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 39 Table 25. Electric DSM Technology Assessment, Non-Residential

End-Uses EEM Description EEM Reference Annual

kWh Savings Incremental

Cost (dollars) Annual

O&M (dollars) Measure

Life (years) Real

Levelized Cost ($/kWh)
Customer-Sited Generation Solar Photovoltaic CE-1 1 2,000 90,000 25 25 0.4822 Small HVAC Optimization and Repair CE-2 5,617 1,123 50 5 0.0538 Commissioning - New CE-3 40,630 37,000 0 5 0.2046 Re/Retro-Commissioning Lite CE-4 15,236 3,000 0 5 0 .0442 Low-E Windows 1500 ft2 New CE-5 14,979 4,500 0 25 0 .0192 Low-E Windows 1500 ft2 Replace CE-6 14,979 30,000 0 25 0.1282 Premium New HVAC Equipment CE-7 5,617 2,603 250 15 0.0862 C&I Space Conditioning

Large HVAC Optimization and Repair CE-8 7,293 2,493 0 5 0.0768 Integrated Building Design (new) CE-9 72,929 24,708 0 50 0.0158 Design (new) Efficient Package Refrigeration (new) CE-10 24,310 3,604 0 15 0.0133 Electrically Commutated Motors CE-11 4,862 1,624 0 15 0.0300 Premium Motors CE-12 3,745 412 0 15 0.0099 Motors & Drives
Variable Speed Drives, Controls and Motor Applications Tune-Up CE-13 24,310 20,937 0 15 0.0775 Energy Star Transformers (new) CE-14 1,215 98 0 18 0.0064 Power Distribution Efficient AC/DC Power CE-15 3,646 271 0 5 0.0167 Data Processing Network Computer Power Management CE-16 4,862 559 0 2 0.0610 New Efficient Lighting Equipment CE-17 24,310 6,394 0 18 0.0208 Retrofit Efficient Lighting Equipment CE-18 24,310 7,992 0 18 0.0260 LED Exit Signs CE-19 1,470 270 0 15 0.0165 LED Traffic Lights (10) CE-20 5,000 2,000 0 10 0.04 93 Lighting

Perimeter Daylighting CE-21 7,293 6,195 0 18 0.0671 Low Flow Fixtures CE-22 6,000 1,000 0 10 0.0205 Solar Water Heaters CE-23 2,500 6,000 20 25 0.1616 Water Heating
Heat Pump Water Heaters CE-24 2,000 2,500 20 18 0.1 087 Energy Star Hot Food Holding Cabinet CE-25 4,100 1, 100 0 15 0.0241 Energy Star Electric Steam Cooker CE-26 2,200 5,000 0 15 0.2044 Pre-Rinse Spray Wash CE-27 12,155 308 0 15 0.0023 Cooking and Laundry

Restaurant Commissioning Audit CE-28 24,310 1,794 0 5 0.0166 Grocery Refrigeration Tune-Up and Improvements CE-29 24,310 4,608 0 5 0.0426 Refrigeration
Refrigeration Casework Improvements CE-30 12,155 4, 011 10 10 0.0415 VendingMiser® CE-31 1,000 215 0 10 0.0265 Other LED Outdoor Lighting CE-32 1,000 500 0 20 0.0368 Note: Dollar amounts are expressed in 2007 dollars

.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 40 

### Cost Effectiveness 5 Cost effectiveness of each EEM is measured by the real levelized cost per kWh. Real levelized cost expresses the total incremental cost and any annual operation and maintenance expense as a con stant annual payment over the life of the measure divided by annual savings. 6 The advantage of RLC is that it normalizes for differences in measur e life and other EEM attributes to provide a means of comparing EEMs in term s of their relative cost effectiveness. As will be demonstrated in the next section, RLC also provides a convenien t method for determining economic potential. Assumptions on average annual savings, installed cost and measur e life come from many sources, including the energy modeling work conducted as part of this project using segm ent-specific billing data for DEO

customers. 7 In other words, our annual savings estimates are consistent with the modeled loads reported in the Market Assessment section of this report.
Incremental cost for the EEM screening step includes the incremental c osts of installing the measure. Depending on the measure, this could be simply the cost of the high efficiency measure over and above the standard efficiency option. In other cases installation labor and site modifications may also be requi red for the high efficiency model and, hence, would be included in incremental cost. Tax credits and other incenti ve payments were not considered at this stage of the analysis.

It should be pointed out that program design may have an impact on some of the EEM sc reening assumptions. An owner-installed delivery option, for example, may result in lower instal led cost than a contractor installation but come at the possible loss of useful measure life. Such tradeoffs are important program design considerations but beyond the scope of EEM analysis. For the purposes of this stage of analys is the EEM assumptions provide a reasonable starting point for our assessment of energy efficiency opt ions.
Energy efficiency measures in Table 24 and Table 25 have been grouped by major end-use categories. Measures considered in the screening include combined heat and power (cogeneration) and s olar electric. In principle these measures can provide very large energy savings, but they are usually not co st effective. They are included in this screening to keep a broad perspective in the analysis and to reach toward a more full understanding of the possibilities and physical limits of potential.

5 Two types of cost effectiveness analysis are presen ted in this report. This section deals only with t echnology assessment using levelized cost. More comprehensive analysis is required at the program level. See Appendix B i n the final report for a discussion of each type of cost effectiveness analy sis. 6 The formula for this calculation is presented in A ppendix B. A real discount rate of 4.0 percent was used. The total incremental cost of measures with both electric and gas savings has been prorated between the two fuel s. When gas savings are involved the total incremental cost is split 40 % electric and 60% gas. 7 The modeling is described in more detail in Append ix A and EEM assumptions are described in their res pective appendixes.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 41 

### Cost Effectiveness Rankings The residential and non-residential measures are ranked by cost effecti veness in Table 26 and Table 27, respectively. Descriptions of the columns in these tables are pres ented below.

EEM Reference Unique EEM reference number. EEM Description Brief description of the EEM. See appendixes for a more detailed description. Application For residential measures only, describe s the segment of residential sector where the EEM assumptions are applicable. For example, t he same EEM may have different assumptions for single family and multifa mily applications. Real Levelized Cost ($/kWh) The incremental cost and annual O&M expressed as a constant annual payment over the life of the measure and then divided by th e annual savings. Entries in the EEM ranking table are sorted from least cost (l owest RLC) to highest cost

measures. Annual Savings per Site (kWh) Annual kWh savings per customer site.
Potential Sites An estimate of the potential number of customer sites that could have the EEM installed without regard to cost. See appendixes f or more information on determining this estimate for each measure. Potential Annual Savings (MWh) Total annual energy savings potential in MWh derive d by multiplying the annual savings per site by the number of potential sites.
It is apparent in Table 26 that the most cost effective measures are retrofit measures applied to electrically heated residences. Some measures with large technical potential are shown t o have relatively high cost (e.g. replacing resistance heat with a heat pump).Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 42 Table 26. Ranked Electric Measures, Residential

EEM Reference EEM Description Application Real Levelized Cost ($/kWh) Annual

Savings per Site (kWh) Potential

Sites Potential

Annual Savings (MWh) RE-27 Set Back HVAC All 0.003 1000 31,667 31,667 RE-36 Low Flow Fixtures All 0.006 500 158,335 79,16 8 RE-32 Compact Fluorescent All 0.008 660 31,667 20,9 00 RE-23 Solar Siting/Passive Design New Elec 0.016 15 00 63,334 95,001 RE-16 Ceiling Insulation (R6 to R30) Elec 0.027 18 00 95,001 171,002 RE-6 Refrig Charge/Duct Tune-Up Elec 0.029 1200 95 ,001 114,002 RE-15 Programmable Thermostats Elec 0.030 500 126, 668 63,334 RE-13 Cool Roofs Elec 0.030 560 0 0 RE-26 Eliminate Old Refrigerators All 0.032 1150 57 ,001 65,551 RE-25 Energy Star Construction New Elec 0.033 4223 50,667 213,968 RE-24 Energy Star Manufactured Home New 0.033 5000 19,000 95,001 RE-31 Pool Pumps All 0.034 648 12,667 8,208 RE-42 Residential LED Lighting All 0.037 1000 38,00 1 38,001 RE-33 Daylighting Design New Elec 0.043 750 31,667 23,750 RE-21 Wall Insulation (R3 to R11) Elec 0.043 2100 59,154 124,224 RE-7 Refrig Charge/Duct Tune-Up Gas 0.047 300 126, 668 38,001 RE-35 Tank/Pipe Wrap and Water Temp Setpoint All 0. 048 200 76,001 15,200 RE-34 Occupancy Controlled Outdoor All 0.049 250 63 ,334 15,834 RE-18 House Sealing using Blower Door Elec 0.050 1 000 155,169 155,169 RE-17 Ceiling Insulation (R6 to R30) Gas 0.064 300 95,001 28,500 RE-40 Efficient Plumbing New Elec 0.064 500 0 0 RE-28 Energy Star Clothes Washers All 0.079 400 95, 001 38,001 RE-29 Energy Star Dish Washers All 0.082 75 95,001 7,125 RE-20 Ground Source Heat Pump Elec 0.087 5382 19,0 00 102,259 RE-22 Wall Insulation (R3 to R11) Gas 0.090 400 57, 001 22,800 RE-37 Heat Pump Water Heaters All 0.099 2000 95,001 190,003 RE-19 House Sealing using Blower Door Gas 0.100 200 158,335 31,667 RE-8 SEER 13 to SEER 15 Heat Pump SF Elec New 0.117 800 31,667 25,334 RE-14 EE Windows Elec 0.120 1334 65,171 86,951 RE-12 Efficient Window AC All 0.125 200 95,001 19,0 00 RE-9 SEER 13 to SEER 15 Heat Pump MF Elec New 0.134 700 19,000 13,300 RE-39 Solar Water Heaters All 0.155 2600 126,668 32 9,338 RE-30 Energy Star Refrigerators All 0.158 100 31,66 7 3,167 RE-41 Combined Heat/Power, Micro CHP SF Gas 0.191 5 000 142,122 710,610 RE-10 SEER 13 to SEER 15 CAC SF Gas New 0.197 400 3 1,667 12,667 RE-2 Resist to SEER 13 Heat Pump Elec SF 0.209 6000 19,000 114,002 RE-11 SEER 13 to SEER 15 CAC MF Gas New 0.225 350 1 9,000 6,650 RE-3 Resist to SEER 13 Heat Pump Elec MF 0.261 480 0 19,000 91,201 RE-38 Tankless Water Heaters All 0.296 400 6,333 2, 533 RE-4 SEER 8 to SEER 13 CAC Gas SF 0.323 1400 57,00 1 79,801 RE-5 SEER 8 to SEER 13 CAC Gas MF 0.376 1200 14,812 17,774 RE-1 Solar Photovoltaic All 0.391 3300 158,335 522, 507 Note: Dollar amounts are expressed in 2007 dollars

. Another energy saver with poor cost effectiveness is the replaceme nt of poorly performing central air conditioners on a gas-heated residence by more efficient ones. This poor cost effectiv eness relates to the high initial cost of the equipment, and to the relatively low cooling savings. Generally measures tha t pertain to efficient new construction are reasonably cost effective because EEMs can be installed at the time of construction with low incremental cost impacts.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 43 The non-residential measures are ranked in Table 27 by cost effectiveness. A s with residential, measures pertaining to building efficient new stock are generally cost effective. Also, m easures associated with tuning and properly maintaining HVAC and refrigeration equipment are generally cost effe ctive.
Lighting, new design and commissioning are both cost effective and large. Anot her favored category is small HVAC Optimization and Repair; it is also cost effective and large . As in the case of residential, the least cost effective measures are efficient glazing, solar water heat and solar photovoltaic.

Table 27. Ranked Electric Measures, Non-Residential

EEM Reference EEM Description Real Levelized Cost ($/kW h) Annual

Savings per Site (kWh) Potential

Sites Potential Annual Savings (MWh) CE-27 Pre-Rinse Spray Wash 0.002 12,155 1,238 15,044 CE-14 Energy Star Transformers (new) 0.006 1,215 4,332 5,265 CE-12 Premium Motors 0.010 3,745 6,189 23,176 CE-10 Efficient Package Refrigeration (new) 0.013 2 4,310 3,094 75,221 CE-9 Integrated Building Design (new) 0.016 72,929 6,189 451,323 CE-19 LED Exit Signs 0.017 1,470 15,471 22,743 CE-28 Restaurant Commissioning Audit 0.017 24,310 1,238 30,088 CE-15 Efficient AC/DC Power 0.017 3,646 12,377 45,132 CE-5 Low-E Windows 1500 ft2 New 0.019 14,979 12,377 185,396 CE-22 Low Flow Fixtures 0.021 6,000 3,094 18,566 CE-17 New Efficient Lighting Equipment 0.021 24,310 12,377 300,882 CE-25 Energy Star Hot Food Holding Cabinet 0.024 4, 100 1,238 5,075 CE-18 Retrofit Efficient Lighting Equipment 0.026 2 4,310 21,660 526,544 CE-31 VendingMiser® 0.027 1,000 1,238 1,238 CE-11 Electrically Commutated Motors 0.030 4,862 6,189 30,088 CE-32 LED Outdoor Lighting 0.037 1,000 12,377 12,377 CE-30 Refrigeration Casework Improvements 0.042 12, 155 1,238 15,044 CE-29 Grocery Refrigeration Tune-Up and Improvement s 0.043 24,310 1,238 30,088 CE-4 Re/Retro-Commissioning Lite 0.044 15,236 12,792 194,896 CE-20 LED Traffic Lights (10) 0.049 5,000 6,189 30,943 CE-2 Small HVAC Optimization and Repair 0.054 5,617 16,090 90,379 CE-16 Network Computer Power Management 0.061 4,862 12,377 60,176 CE-21 Perimeter Daylighting 0.067 7,293 9,283 67,698 CE-8 Large HVAC Optimization and Repair 0.077 7,293 5,322 38,814 CE-13 Variable Speed Drives, Controls and Motor App lications Tune-Up 0.077 24,310 4,951 120,353 CE-7 Premium New HVAC Equipment 0.086 5,617 6,189 34,761 CE-24 Heat Pump Water Heaters 0.109 2,000 3,713 7,426 CE-6 Low-E Windows 1500 ft2 Replace 0.128 14,979 3,094 46,349 CE-23 Solar Water Heaters 0.162 2,500 6,189 15,471 CE-26 Energy Star Electric Steam Cooker 0.204 2,200 1,238 2,723 CE-3 Commissioning - New 0.205 40,630 0 0 CE-1 Solar Photovoltaic 0.482 12,000 6,189 74,262 Note: Dollar amounts are expressed in 2007 dollars

.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 44 

### Economic Potential Economic potential is defined as the total energy savings available at a specified long-term avoided cost of energy. Technologies with levelized costs that are lower than the avoided cost of energy are included in estimates of economic potential. A DSM supply curve provides a flexible framework f or presenting economic potential that reflects the direct relationship between the long-term marginal cos t of energy supply and energy efficiency potential. Unlike point estimates, DSM supply curves show the economic pot ential at several levels of marginal supply cost. The incremental cost of measures does not include program del ivery and administration expenses that will be required to actually achieve energy savings. In order to provide a more realistic estimate of the economic potential, a 30 percent adder for program delivery expenses is added to increm ental measure costs. Although the 30 percent adder is based on program budgets developed for other studies, it is me ant as a rough estimate of the cost of actually acquiring the DSM resource. More refined estimates of progr am costs will be developed in the next
section.
The DSM supply curve for residential is shown in Figure 28 which shows the cumulative kWh savings from all
measures listed in Table 26 with a levelized cost less than the corr esponding point on the graph. Two supply curves are presented, one that only includes the incremental measure cost and on e with an adder for program delivery costs, as described above. Since the supply with program delivery costs is more realistic of actual costs, it will be used to estimate the economic potential for this study. For example, there a re approximately 1.1 billion kWh of annual savings available at a cost $0.06 per kWh or less. Estimated residen tial economic potential increases to 1.4 billion kWh annually at a cost of $0.08 per kWh or less.

0.00 0.02 0.04 0.06 0.08 0.10 0.12 0.14 0.16 0.18

0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Cumulative Savings (millions kWh)Levelized Cost ($/kWh)

Incremental Cost Only Incremental and Program Cost Figure 28. Residential Electric DSM Supply Curve

DEO marginal cost of avoided supply depends on the load shape and longevity of sa vings. 8 Using $0.06 per kWh as an approximate marginal cost of supply, residential economic potentia l is estimated at 1.1 billion kWh annually.

8 Marginal cost of supply vary by time of day and sea son and the amount of avoided peak load. Since dif ferent measures have different load shapes, they also have different mar ginal supply cost. When measures are grouped into programs, theseOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 45 The DSM supply curve for non-residential is shown in Figure 29 and, like resident ial, represents an alternate format for the information in Table 27 and includes a supply curve with an adder for prog ram delivery expenses.

0.00 0.02 0.04 0.06 0.08 0.10 0.12

0 300 600 900 1200 1500 1800 2100 2400 Cumulative Savings (millions kWh)Levelized Cost ($/kWh)

Incremental Cost Only Incremental and Program Cost
Figure 29. Non-Residential Electric DSM Supply Curve

Figure 29 shows that a large amount of the non-residential efficiency savi ngs are available at levelized costs of $0.04 per kWh or less. Over $0.04 per kWh the supply curve is considerably steeper. Usi ng an approximate marginal cost of supply of $0.06, we estimate annual economic potential in the non -residential sector to be approximately 2.0 billion kWh.
Both the residential and non-residential DSM supply curves show a diminishing return as the levelized cost rises above $0.10 per kWh. Nearly half of the full technical potential is available at levelized costs of less than $0.06 per kWh. Our estimate of total economic potential in both segments is 3.1 billion kWh annually.

differences are reflected in the breakeven marginal cost of energy supply for that program which repre sents the cost that the program must fall under in order to be cost effecti ve.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 46 

## GAS MEASURES AND ECONOMIC POTENTIAL

In this section we present detailed information regarding energy effic iency technologies. These technologies, referred to as Energy Efficiency Measures (EEMs), cause a reducti on in the load profiles of the end-uses presented in the prior section. In this section we derive estimates of economic potential based on the EEM details and market assessment results from the prior sections. 

### Energy Efficiency Measure Assessment In order to evaluate technologies for their potential in electric DSM programs it is necessary to compile detailed
information at the EEM level of detail. An EEM is a device or action th at causes a drop in energy usage. The objective of EEM assessment or screening is to determine the lik ely set of cost effective measures which can then be used to populate DSM programs that deliver savings through standalone or bundl ed EEMs. An important byproduct of this screening is the information necessary to construct a DSM supply curve for determining economic potential.
Our list of EEMs and assumptions was developed through an integrated approach tha t combined an extensive review of industry literature, the detailed analysis of DEO loads des cribed earlier, and our own expert opinion. These assumptions and sources are documented in the appendixes. The assumpt ions required to calculate EEM
cost effectiveness are shown in Table 28 for residential and Table 29 for non-residential. Each of these tables uses a standard layout to present the assumptions used to calculate real leveli zed cost (RLC) per therm. A discussion of the cost effectiveness approach used to evaluate EEMs follows these two tables.

Descriptions of the columns presented in Table 28 and Table 29 are present ed below. End-Uses EEMs are grouped by the end-use they addre ss. EEM Description Brief description of the EEM. See the appendixes for a more detailed description. EEM Reference Code to uniquely identify an EEM in t his project. Application For residential measures only, describe s the segment of residential sector where the EEM assumptions are applicable. For example, the same EEM may have different assumptions for single family and multifamily applications. Annual Therm Savings Annual therm savings per cust omer site. Incremental Cost The incremental cost of installing the EEM at the typical customer site, including an y incremental equipment and labor expenses. Note: “ incremental” refers to the costs over and above what would have been expended for a stand ard efficiency measure. All costs are in 2007 dollars. Annual O&M Annual operation and maintenance expense s over and above the O&M expenses incurred for standard efficiency measures. Most EEMs have z ero incremental O&M expenses. Measure Life The average expected life of the measu re. Real Levelized Cost The incremental cost and annual O&M expressed as a constant annual payment over th e life of the measure and then divided by the annual savings. Real levelized cost provides a way of comparing EEMs with different attributes suc h as measure life on the same scale.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 47 Table 28. Gas DSM Technology Assessment, Residential

End-Uses EEM Description EEM Reference Application Annual Therm Savings Incremental

Cost (dollars) Annual

O&M (dollars) Measure

Life (years) Real

Levelized Cost ($/therm) Solar Water Heater RG-1 SF MF All 137 6,000 10 25 2 .8866 EE Water Heater with EF >= 0.6 RG-2 SF 50 180 0 15 0.3238 EE Water Clothes Washer RG-3 SF 30 500 0 15 1.4990 Gas Clothes Dryer (Energy Star) RG-4 SF 13 100 0 18 0.6076 Gas Stove/Oven RG-5 SF 5 100 0 18 1.5799 Tank/Pipe Wrap RG-6 SF 2 10 0 6 0.9538 Low Flow Fixtures RG-7 SF 27 25 0 10 0.1142 Tankless WH Reqd RG-8 SF 75 500 0 15 0.5996 Appliance Efficiency

Tankless Discretionary RG-9 SF 75 1,100 0 15 1.3191

AFUE 65 to 82 SFe RG-10 SF Est 156 1,100 10 5 1.64 80 AFUE 65 to 82 MFe RG-11 MF Est 98 1,100 10 5 2.6234 AFUE 65 to 92 SFe RG-12 SF Est 200 750 10 25 0.2900 AFUE 65 to 92 MFe RG-13 MF Est 106 750 10 25 0.5473 AFUE 82 to 92 SFe RG-14 SF New 85 750 10 25 0.6825 AFUE 82 to 92 MFe RG-15 MF New 55 750 10 25 0.5310 AFUE 82 to 92 SFn RG-16 SF New 45 750 10 25 1.2891 AFUE 82 to 92 MFn RG-17 MF New 27 750 10 25 2.1485 Programmable Thermostats RG-18 SF 35 120 2 10 0.479 9 Proper HVAC Sizing RG-19 SF 49 50 0 18 0.0324 HVAC Tune-Up RG-20 SF 40 75 0 3 0.6757 Furnace Efficiency

CO Remediation RG-21 SF 117 200 0 10 0.0843

EE Windows RG-22 SF 98 2,500 0 25 1.6411 Ceiling Insulation (R11 to R38) RG-23 SF 105 1,000 0 25 0.6096 Ceiling Insulation (R30 to R38) RG-24 SF 50 500 0 2 5 0.6401 Ceiling Insulation (R19 to R38) RG-25 SF 70 750 0 2 5 0.6858 House Sealing using Blower Door RG-26 SF 75 500 0 1 3 0.6676 Duct Seal RG-27 SF 50 350 0 13 0.7010 Wall Insulation (R0 to R11) RG-28 SF New 140 1,400 0 25 0.2560 Wall Insulation (R11 to R19) RG-29 SF 195 1,750 0 2 5 0.5744 Floor/Basement Insulation RG-30 SF 98 1,000 0 25 0. 6564 Energy Star Construction RG-31 SF New 285 3,000 0 5 0 0.4900 Shell Efficiency

Solar Siting RG-32 SF New 90 500 0 50 0.2586 Note: Dollar amounts are expressed in 2007 dollars

.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 48 Table 29. Gas DSM Technology Assessment, Non-Residential

End-Uses EEM Description EEM Reference Annual

Therm Savings Incremental

Cost (dollars) Annual

O&M (dollars) Measure

Life (years) Real

Levelized Cost ($/therm) Solar Water Heater CG-1 300 10,000 250 25 2.9671 Low Flow Fixtures CG-2 600 1,000 0 10 0.2055 EE Water Heater with EF >= 0.6 CG-3 500 3,500 0 15 0.6296 Energy Star Gas Oven CG-4 952 5,000 0 15 0.4724 ES Gas Stove CG-5 714 4,000 0 15 0.5038 ES Gas Clothes Dryer CG-6 833 4,000 0 15 0.4319 Appliance Improvements

Commissioning Audit CG-7 400 1,794 0 5 1.0075

Roof Insulation CG-8 600 1,875 0 25 0.2000 Low-E Windows 1500 ft2 CG-9 400 2,250 0 25 0.3601 Low-E Windows 1500 ft2 Replace CG-10 400 7,500 0 25 1.2002 Ceiling Insulation (R11 to R38) CG-11 600 1,875 0 2 5 0.2000 Ceiling Insulation (R30 to R38) CG-12 69 1,250 0 25 1.1596 Ceiling Insulation (R19 to R38) CG-13 300 1,875 0 2 5 0.4001 House Sealing using Blower Door CG-14 69 500 0 13 0 .7257 Duct Seal CG-15 60 350 0 13 0.5842 Wall Insulation (R0 to R11) CG-16 259 3,125 0 25 0. 7723 Wall Insulation (R11 to R19) CG-17 346 4,375 0 25 0 .8094 Shell Efficiency

Floor/Basement Insulation CG-18 173 1,400 0 25 0.51 80

EE Boiler CG-19 2,400 20,000 50 20 0.6340 Proper HVAC Sizing CG-20 595 0 0 18 0.0000 HVAC Tune-Up CG-21 238 300 0 3 0.4542 CO Remediation CG-22 357 400 0 10 0.1381 Integrated Building Design CG-23 518 3,000 0 50 0.2 696 AFUE 82 to 92 SFe CG-24 1,309 750 25 15 0.0706 Furnace Efficiency

AFUE 65 to 92 SFe CG-25 2,380 750 25 15 0.0388

Commissioning - New CG-26 1,000 2,500 0 5 0.5616 Re/Retro-Commissioning CG-27 650 1,500 0 5 0.5184 Controls CG-28 2,000 4,500 250 15 0.3274 Controls

Programmable Thermostats CG-29 207 240 0 13 0.1161 Note: Dollar amounts are expressed in 2007 dollars

.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 49 

### Cost Effectiveness 9 Cost effectiveness of each EEM is measured by the real levelized cost per therm. Real levelized cost expresses the total incremental cost and any annual operation and maintenance expense as a con stant annual payment over the life of the measure divided by annual savings. 10 The advantage of RLC is that it normalizes for differences in measur e life and other EEM attributes to provide a means of comparing EEMs in term s of their relative cost effectiveness. As will be demonstrated in the next section, RLC also provides a convenien t method for determining economic potential. Assumptions on average annual savings, installed cost and measur e life come from many sources, including the energy modeling work conducted as part of this project using segm ent-specific billing data for DEO

customers. 11 In other words, our annual savings estimates are consistent with the modeled loads reported in the Market Assessment section of this report.
Incremental cost for the EEM screening step includes the incremental c osts of installing the measure. Depending on the measure, this could be simply the cost of the high efficiency measure over and above the standard efficiency option. In other cases installation labor and site modifications may also be requi red for the high efficiency model and, hence, would be included in incremental cost. Tax credits and other incenti ve payments were not considered at this stage of the analysis.

It should be pointed out that program design may have an impact on some of the EEM scr eening assumptions. An owner-installed delivery option, for example, may result in lower instal led cost than a contractor installation but come at the possible loss of useful measure life. Such tradeoffs are important program design considerations but beyond the scope of EEM analysis. For the purposes of this stage of analys is the EEM assumptions provide a reasonable starting point for our assessment of energy efficiency opt ions.
Energy efficiency measures in Table 28 and Table 29 have been grouped by major end-use categories. Measures considered in the screening include combined heat and power (cogeneration) and s olar electric. In principle these measures can provide very large energy savings, but they are usually not co st effective. They are included in this screening to keep a broad perspective in the analysis and to reach toward a more full understanding of the possibilities and physical limits of potential.

9 Two types of cost effectiveness analysis are presen ted in this report. This section deals only with t echnology assessment using levelized cost. More comprehensive analysis is required at the program level. See Appendix B i n the final report for a discussion of each type of cost effectiveness analy sis. 10 The formula for this calculation is presented in A ppendix B. A real discount rate of 4.0 percent was used. 11 The modeling is described in more detail in Append ix A and EEM assumptions are described in their res pective appendixes.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 50 

### Cost Effectiveness Rankings The residential and non-residential measures are ranked by real level ized cost in Table 30 and Table 31, respectively. Descriptions of the columns in these tables are pres ented below.

EEM Reference Unique EEM reference number. EEM Description Brief description of the EEM. See appendixes for a more detailed description. Application For residential measures only, describe s the segment of residential sector where the EEM assumptions are applicable. Includes a 30% adder f or program delivery expenses. For example, the same EEM may have different assumption s for single family and multifamily applications. Real Levelized Cost ($/therm) The incremental cost and annual O&M expressed as a constant annual payment over the life of the measure and then divided by the annual savings. Entries in the EEM ranking table are sorted from least cost (lowest RLC) to hi ghest cost measures. Annual Savings per Site (therms) Annual therm savings per customer site.
Potential Sites An estimate of the potential number of customer sites that could have the EEM installe d without regard to cost. See appendixes for more in formation on determining this estimate for each measure. Potential Annual Savings (therms) Total annual energy savings potential in therms der ived by multiplying the annual savings per site by the number of potential sites.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 51 Table 30. Ranked Gas Measures, Residential

EEM Reference EEM Description Application Real Levelized Cost ($/therm) Annual

Savings per Site (therms) Potential

Sites Potential

Annual Savings (therms) RG-19 Proper HVAC Sizing SF 0.032 49 75,404 3,676,4 55 RG-21 CO Remediation SF 0.084 117 29,426 3,443,314 RG-7 Low Flow Fixtures SF 0.114 27 183,913 4,965,64 7 RG-28 Wall Insulation (R0 to R11) SF New 0.256 140 75,772 10,608,093 RG-32 Solar Siting SF New 0.259 90 73,565 6,620,863 RG-12 AFUE 65 to 92 SFe SF Est 0.290 200 36,783 7,3 56,514 RG-2 EE Water Heater with EF >= 0.6 SF 0.324 50 147 ,130 7,356,514 RG-18 Programmable Thermostats SF 0.480 35 91,920 3 ,217,188 RG-31 Energy Star Construction SF New 0.490 285 36, 783 10,483,033 RG-15 AFUE 82 to 92 MFe MF New 0.531 55 18,391 1,01 1,521 RG-13 AFUE 65 to 92 MFe MF Est 0.547 106 36,783 3,8 98,952 RG-29 Wall Insulation (R11 to R19) SF 0.574 195 55, 174 10,760,356 RG-8 Tankless WH Reqd SF 0.600 75 73,565 5,517,386 RG-4 Gas Clothes Dryer (Energy Star) SF 0.608 13 11 0,348 1,434,520 RG-23 Ceiling Insulation (R11 to R38) SF 0.610 105 44,139 4,634,604 RG-24 Ceiling Insulation (R30 to R38) SF 0.640 50 5 5,174 2,758,693 RG-30 Floor/Basement Insulation SF 0.656 98 55,174 5,380,178 RG-26 House Sealing using Blower Door SF 0.668 75 1 28,739 9,655,425 RG-20 HVAC Tune-Up SF 0.676 40 128,739 5,149,560 RG-14 AFUE 82 to 92 SFe SF New 0.682 85 55,174 4,6 89,778 RG-25 Ceiling Insulation (R19 to R38) SF 0.686 70 4 7,817 3,347,214 RG-27 Duct Seal SF 0.701 50 183,913 9,195,643 RG-6 Tank/Pipe Wrap SF 0.954 2 183,913 367,826 RG-16 AFUE 82 to 92 SFn SF New 1.289 45 36,783 1,65 5,216 RG-9 Tankless Discretionary SF 1.319 75 36,783 2,75 8,693 RG-3 EE Water Clothes Washer SF 1.499 30 110,348 3, 310,431 RG-5 Gas Stove/Oven SF 1.580 5 55,174 275,869 RG-22 EE Windows SF 1.641 98 110,348 10,760,356 RG-10 AFUE 65 to 82 SFe SF Est 1.648 156 18,391 2, 869,041 RG-17 AFUE 82 to 92 MFn MF New 2.148 27 3,678 99,3 13 RG-11 AFUE 65 to 82 MFe MF Est 2.623 98 7,357 720,9 38 RG-1 Solar Water Heater SF MF All 2.887 137 95,635 13,055,898 Note: Dollar amounts are expressed in 2007 dollars

.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 52 The non-residential measures are ranked in Table 31 by real levelized cost

. Table 31. Ranked Gas Measures, Non-Residential

EEM Reference EEM Description Real Levelized Cost ($/therm) Annual

Savings per Site (therms) Potential

Sites Potential

Annual Savings (therms) CG-20 Proper HVAC Sizing 0.000 595 6,009 3,575,287 CG-25 AFUE 65 to 92 SFe 0.039 2,380 6,009 14,301,1 49 CG-24 AFUE 82 to 92 SFe 0.071 1,309 3,004 3,932,816 CG-29 Programmable Thermostats 0.116 207 4,506 932, 831 CG-22 CO Remediation 0.138 357 2,403 858,069 CG-8 Roof Insulation 0.200 600 6,009 3,605,146 CG-11 Ceiling Insulation (R11 to R38) 0.200 600 6,6 09 3,965,660 CG-2 Low Flow Fixtures 0.205 600 9,013 5,407,719 CG-23 Integrated Building Design 0.270 518 2,403 1, 244,977 CG-28 Controls 0.327 2,000 2,403 4,806,861 CG-9 Low-E Windows 1500 ft2 0.360 400 4,506 1,802,5 73 CG-13 Ceiling Insulation (R19 to R38) 0.400 300 12, 017 3,605,146 CG-6 ES Gas Clothes Dryer 0.432 833 3,004 2,502,701 CG-21 HVAC Tune-Up 0.454 238 6,009 1,430,115 CG-4 Energy Star Gas Oven 0.472 952 3,004 2,860,230 CG-5 ES Gas Stove 0.504 714 3,004 2,145,172 CG-18 Floor/Basement Insulation 0.518 173 7,511 1,2 99,355 CG-27 Re/Retro-Commissioning 0.518 650 3,271 2,126, 273 CG-26 Commissioning – New 0.562 1,000 6,009 6,008,5 76 CG-15 Duct Seal 0.584 60 12,017 721,029 CG-3 EE Water Heater EF >= 0.6 0.630 500 9,013 4,50 6,432 CG-19 EE Boiler 0.634 2,400 6,009 14,420,584 CG-14 House Sealing using Blower Door 0.726 69 12,0 17 829,184 CG-16 Wall Insulation (R0 to R11) 0.772 259 7,511 1 ,945,277 CG-17 Wall Insulation (R11 to R19) 0.809 346 7,511 2,598,709 CG-7 Commissioning Audit 1.007 400 6,009 2,403,431 CG-12 Ceiling Insulation (R30 to R38) 1.160 69 4,50 6 310,944 CG-10 Low-E Windows 1500 ft2 Replace 1.200 400 7,51 1 3,004,288 CG-1 Solar Water Heater 2.967 300 3,004 901,286 Note: Dollar amounts are expressed in 2007 dollars

.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 53 

### Economic Potential Economic potential is defined as the total energy savings available at a specified long-term avoided cost of energy. Technologies with levelized costs that are lower than the avoided cost of energy are included in estimates of economic potential. A DSM supply curve provides a flexible framework f or presenting economic potential that reflects the direct relationship between the long-term marginal cos t of energy supply and energy efficiency potential. Unlike point estimates, DSM supply curves show the economic potential at several levels of marginal supply cost. The incremental cost of measures does not include program del ivery and administration expenses that will be required to actually achieve energy savings. In order to provide a more realistic estimate of the economic potential, a 30 percent adder for program delivery expenses is added to increm ental measure costs. Although the 30 percent adder is based on program budgets developed for other studies, it is mea nt as a rough estimate of the cost of actually acquiring the DSM resource. More refined estimates of progra m costs will be developed in the next
section.
The DSM supply curve for residential is shown in Figure 30 which shows the cumulative therm savings from all
measures listed in Table 30 with a levelized cost less than the corr esponding point on the graph. Two supply curves are presented, one that only includes the incremental measure cost and on e with an adder for program delivery costs, as described above. Since the supply with program delivery costs is more realistic of actual costs, it will be used to estimate the economic potential for this study. For example, there a re approximately 35 million therms of annual savings available at a cost $0.60 per therm or less. Estimated res idential economic potential increases near 60 million therms annually at a cost of $0.80 per therm or less.

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4

0 10 20 30 40 50 60 70 80 90 100 Cumulative Savings (millions therms)Levelized Cost ($/therm)

Incremental Cost Only Incremental and Program Cost
Figure 30. Residential Gas DSM Supply Curve
Using $0.90 per therm as an approximate marginal cost of supply, residential econ omic potential is estimated at 84 million therms annually.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 54 The DSM supply curve for non-residential is shown in Figure 31 and, like reside ntial, represents an alternate format
for the information in Table 31.

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4

0 10 20 30 40 50 60 70 80 Cumulative Savings (millions therms)Levelized Cost ($/therm)

Incremental Cost Only Incremental and Program Cost
Figure 31. Non-Residential Gas DSM Supply Curve

Figure 31 shows that much of the non-residential efficiency savings are ava ilable at levelized costs of less than $0.80 per therm. Using an approximate marginal cost of supply of $0.90, we estimate annual economic potential in the commercial sector to be approximately 62 million therms.
Both the residential and non-residential DSM supply curves show a diminishing return as the levelized cost rises above $1.00 per therm. Our estimate of total economic potential in both segments is 146 million therms annually (14,234 MMCF).Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 55 

## DSM PROGRAMS

Programs proposed in this section of the report are designed to save kWh and ther ms and to provide tools to control electrical load (kW). Programs are created as bundles of related ene rgy savings measures and/or demand reduction
measures. The cost effectiveness of the individual measures is sh own in the measure tables in the previous section of this report, where individual measure rankings may be reviewed. [In addit ion, Figure 28 through Figure 31 also include a proxy for program costs.] In moving from the level of consideration of individual measures to the full program level in this section of the study, we have included the program administ rator’s program costs (sometimes called the utility program costs) along with the costs of the individual measures that have been assembled into each program. The cost-effectiveness tests applied at the program level i nclude the additional costs to manage the programs and costs of program evaluation. Cost-effectiveness testing of the programs requires assumptions about the relative frequency of individual measures included in each program opt ion. Using this approach, recommended programs are listed in Table 32.
The company will, of course, make the final selection of programs to be submit ted for regulatory approval. For programs ultimately selected and approved, Duke Energy Ohio will then develop a scope of work and will then (for most programs – any that are not determined to be best run internally) issue a RFP to the program vendor community to elicit proposals from which a vender may be selected. Each vendor wi ll propose full program designs in their bid package. The final program designs (the ones actuall y implemented) will be based on the planned design as approved by the Commission, the scope of work developed by Duke Energ y, and the selected vendor’s proposal.
Today, most DSM programs are managed with a small internal staff respons ible for vendors who do most of the work to implement the programs, develop relationships essential to increasi ng customer participation, carry out day-to-day operations, and perform the work of data entry for program tracking. 12 There will need to be a sufficient internal DSM staff to insure that program control is efficient and eff ective and that responsibilities and lines of accountability of vendors to the company are kept crystal clear.
The programs presented below were designed to capture the most cost-effec tive opportunities from the Energy Efficiency Measures (EEMs) identified earlier in this report. Cos t effectiveness results are presented for all of the programs in the following section of the report. Each of the program plans pres ented in this section contains information on program design, participation, expected savings, tracking concer ns, and implementation budget.

12 Be sure to require vendors to provide consistent a nd timely tracking system inputs as a condition of submitting a bid. The program tracking system is usually best internal to the company (so it will be consistent across progr ams rather than each vendor bringing their own system), but the detailed input is usually best made part of program vendor responsibilities (so as to avoid duplication of input effort).Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 56 The program information is organized as follows:

• Description of program design including measures and incentives. This descri ption leads off each program plan.

• Rationale for the program. This is a brief description of the logic of the program.

• Participation and measures included in the program, along with expected ene rgy savings. This provides a five-year overview of number of participants and expected energy savings (annual kWh savings, therm savings, and kW reductions).

• Marketing Plans. A brief description of suggested marketing effort s specific to the program. 13

• Program Tracking Considerations

• Detailed Budget Plans. Annual program implementation budgets for five yea rs.
In some of the program descriptions names of organizations or products are g iven. These are not recommendations of specific groups or brands, but are included as links for developing furthe r information.
In addition to the specific plans for each program, it is recommended to have a general marketing and promotional effort to support DSM and to help customers become aware of the programs. This will include effective energy efficiency education efforts, including education in the schools and an energ y audit web tool. These overall DSM related activities are discussed in greater detail in the Cost Ef fectiveness section.

13 While marketing is addressed for each program, we recommend bundling the programs so that from a cust omer perspective there are no more than nine options. Although prog rams will be selected and evaluations performed on the individual programs, for customer communications a simplified menu approach is more appropriate. For a model of how the menu approach works, go to http://www.pge.com/index.html . This site divides into “For my Home,” and “For m y Business.” Then programs are listed branching from these two option s. The programs as they appear to the customer are constructed to make sense from the logic of customer communication and the logic of efficient program administration, rath er than as many individual programs.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 57 Table 32. Program Recommendations No. Program Name Description Recommended Direct Load Control Programs

1 C&I Peak Reduction Air conditioner Direct Load Control for commercial and industrial customers Yes

2 Residential Peak Reduction Air conditioner and electric hot water heater Direc t Load Control for residential customers Yes Research and Demonstration Projects

3 Renewables and Demonstrations Demonstrations to push limits and learning for new technologies; and to build customer attention to gr een and DSM/DR programs Yes*

Commercial and Industrial Programs

4 C&I Incentives Sets of improvements or special measures proposed f or individual situations Yes 5 C&I Rebates Prescriptive measures for non-residen tial customers Yes 6 C&I Retro-Commissioning Lite Tuning of controls Yes 7 C&I HVAC Optimization Check and optimization of H VAC units Yes
8 C&I Audit Audit program focused on food processing and refri geration (supermarkets and restaurants) Yes 9 C&I New Construction New buildings Yes Residential Programs

10 Residential Whole House Free remote audits with kit available to all custom ers; on-site audit with direct install of low-cost items and kit for fifty dollars (refundable against installation cost of it ems recommended in audit) Yes

11 Residential Rebates Energy efficient lighting an d clothes washers Yes 12 Residential Appliance Recycling Pick-up and envi ronmental disposal Yes 13 Residential New Construction New buildings Yes 14 Residential Solar Siting Solar orientation, pass ive design, work on codes Yes

15 Residential Low and Moderate Income Weatherization Homes with electric heat and electric hot water, in come at or below 150% of the federal poverty level or at or be low 80% of median income Yes*

*Note that Program 3 (Renewables and Demonstrations ) and Program 15 (Residential Low and Moderate Inco me Weatherization) do not pass the TRC test, but are still recommended. Rene wables and Demonstrations programs advance the know ledge with specific technologies and also provide educational opportuni ties in the community. Low and Moderate Income pro grams provide important services that help to more equitably address the en ergy burden for this segment of the population. Al l other programs pass the TRC test and the overall portfolio of programs also passes t he TRC test.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 58 

### Program 1. Commercial and Industrial Peak Reduction The Commercial and Industrial Peak Reduction Program is proposed as an addition t o the company's existing and highly effective PowerShare and PowerManager programs. Duke Energy, follow ing on the experience of Cinergy, has mastered the art of load control programs for large commercial and i ndustrial customers and offers several options to these customers through PowerShare. Duke Energy has become a national leader both through the development of PowerShare and through its support of the development of DSMoreTM. P rogram 1, Commercial and Industrial Peak Reduction, is directed to a different customer segment, t he medium-sized commercial and small industrial customers. This program is directed solely to provision of load c ontrol to reduce peak kW for medium
size commercial and small industrial customers. The Commercial and Indus trial Peak Reduction program is assumed to be piggybacked on a wider "smart grid" initiative. The compa ny will have its own internal preference for type of meters and brand(s). The systems may be one-way or two-way. Sma rt meter technology generally supports:

• time-of-use prices, where the cost of electricity is lower during off-pe ak periods and higher during times of peak use;

• direct load control, a feature that allows automatic adjustments to c entral air conditioning units during periods of peak demand during summer months in exchange for price incentives on el ectric rates; and

• the ability to pre-pay for electricity service.
For this program, we focus on load control, although clearly the new smart gri d technologies offer the opportunity to explore development of several other kinds of customer service initi atives, including time of use pricing. A load control program is a dispatch program. In a dispatch program, a switch can be enga ged to send a signal which directly reduces load. Direct load control is an important approach to peak reduction because it offers low cost to the company and is dispatchable.



### Rationale Load (KW) constraints are one of the most costly events a utility encounte rs. During peak times when demand escalates and there is a problem with meeting demand with additional gene ration supply (either physically or at reasonable cost), the cost per kW to the company can escalate exponentiall y. For this reason, in these situations
load control is essential to control costs and insure service.


### Participation and Measures Measures are shown below.

Table 33. Measures – C&I Peak Reduction
Demand Control Measures DLC – Non Res AC

Projected participation by year is shown in the table below.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 59 Table 34. Estimated Participation and Savings – C&I Peak Reduction

12,180 0 9.5 0 Program Year Incremental

Participants Percent

Participation kWh Saved kW Saved CCF Saved
Year 1 122

1.0% - 1,163

- Year 2 244

2.0% - 2,326

- Year 3 365

3.0% - 3,480

- Year 4 487

4.0% - 4,643

- Year 5 609

5.0% - 5,806

- Cumulative 1,827

15.0% - 17,417

- Per participant savings (kWh):

Per participant gas savings (CCF): Potential participants

Per participant savings (kW):



### Marketing Plans Marketing should take advantage of current concerns for mitigating cli mate problems by emphasizing a green marketing theme and can include the following elements:

• Proposed marketing efforts are to include mention of the program in any communicat ions with commercial and industrial customers regarding energy efficiency progr am options; such as, bill inserts, recognition window stickers for participating businesses, and promotion using t he Duke Energy website.

• The small commercial class is not expected to be easy to enlist. Gener ally, these customers will be concerned about the effects of the cycling on clients and staff. It is expe cted that this program may cause a temperature fluctuation of about 2 degrees. If this can be communicated or demonstr ated it may ease fears about effects on customers or production.

• The small commercial class is not assigned account representativ es, so this will be a limiting factor in communications.

• The issue of owner-occupied versus tenant-occupied space will also be a chal lenge in promoting participation in this program. The marketing and promotion effort will give pr iority to owner-occupied facilities.



### Program Tracking Considerations Direct load control is data intensive and load management data is pre cise. When load events are called either for capacity shortages or as tests, the systems self-validate. Care needs to be taken to insure the collection of data
elements sufficient to show the baseline condition at the time an even t is called and the response to the call as a kW effect. The duration of each event for evaluation purposes should also las t long enough to show the affected units back on line to demonstrate there are no unexpected effects.


### Detailed Budget Plans An estimated five-year budget for this program is provided below. The anti cipated cost to Duke Energy for offering this program to customers involves budgets for:

• A participant incentive of $250 each summer (5 monthly payments of $50).

• Cost of equipment prorated to the DLC effort ($100) plus the cost of connecting the controlled equipment ($150).
Cost to the participants is to accept the temporary load control when i ncidents are called.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 60 Table 35. Estimated Five-Year Program Budget - C&I Peak Reduction

Cost per Participant Year 1 Year 2 Year 3 Year 4 Year 5 5-Yr Total Percent of Total Fixed Program Costs Implementation & Other Annual Cost $50,000 $0 $0 $0 $0 $50,000 2% DSM Staffing $44,000 $44,000 $66,000 $66,000 $88,000 $308,000 15% Program Monitoring & Evaluation $15,000 $15,000 $15,000 $15,000 $15,000 $75,000 4% Variable Program Costs Incentives (paid annually to participants) $250 $30,500 $91,500 $182,750 $304,500 $456,750 $1,066,00 0 51% Delivery & Other $323 $39,345 $78,690 $117,713 $157,058 $196,403 $589,208 2 8% Total Budget $178,845 $229,190 $381,463 $542,558 $756,153 $2,088,208 1 00%Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 61 

### Program 2. Residential Peak Reduction This program is directed solely to provide load control to reduce peak kW through control of air conditioning (AC) equipment. The program is assumed to ride on top of a deployment of “smart grid” t echnologies, and is expected to be a precursor to eventual system-wide implementation of the technolog ies. The company will have its own internal preferences as to meter types and brand(s). Generally these are digital meters with a one-way or two-way radio frequency communications capability. Generally, the smart meter te chnology supports:

• time-of-use prices, where the cost of electricity is lower during off-pe ak periods and higher during times of peak use,

• direct load control, a feature that allows automatic adjustments to c entral air conditioning units during periods of peak demand during summer months in exchange for price incentives on el ectric rates, and

• the ability to pre-pay for electricity service.
For this program, we focus on Residential load control, although clearly t he new smart grid technologies offer the opportunity to explore development of several other kinds of customer service initiatives, including time of use pricing. A load control program is a dispatch program. In a dispatch program, a swit ch can be engaged to send a signal which directly reduces load. Direct load control is an importa nt approach to peak reduction because it offers low cost to the company and is dispatchable.



### Rationale Load (KW) constraints are one of the most costly events a utility encounte rs. During peak times when demand escalates and there is a problem with meeting demand with additional gene ration supply (either physically or at reasonable cost), the cost per kW to the company can escalate exponentiall y. For this reason, in these situations
load control is essential to control costs and insure service. Water he aters are not included in this program due to the cost of connecting water heaters. We had originally included water heat ers, not to deal directly with peak calls (the residential AC serve that purpose), but to reduce the rebound effect fr om the residential air conditioners as they come back into service following a peak call. If Duke experiences excessi ve rebound effects, the control of water heaters should be reexamined along with other measures.


### Participation and Measures Measures are shown below.

Table 36. Measures – Residential Peak Reduction
Demand Control Measures DLC – Residential AC DLC – Residential Hot WaterOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 62 Projected participation by year is shown in the table below.

Table 37. Estimated Participation and Savings - Residential Peak Redu ction

325,650 0 0.9 0

Program Year Incremental

Participants Percent

Participation kWh Saved kW Saved CCF Saved Year 1 6,513

2.0% - 5,927

- Year 2 9,770

3.0% - 8,891

- Year 3 13,026

4.0% - 11,854

- Year 4 16,283

5.0% - 14,818

- Year 5 19,539

6.0% - 17,780

- Cumulative 65,131

20.0% - 59,269

- Per participant savings (kWh): Potential participants

Per participant savings (kW): Per participant gas savings (CCF):



### Marketing Plans Marketing should take advantage of current concerns for mitigating cli mate problems by emphasizing a green marketing theme and can include the following elements:

• Proposed marketing efforts should include mention of the program in any communica tions with customers regarding energy efficiency program options such as bill inserts, recog nition window stickers for participating homes, media coverage of how to manage electric bills, cus tomer service representatives, and promotion using the Duke Energy website.

• Residential communications for the program can reach out to customers wi th high bill complaints and to customers with payment problems as well as to general promotion to customers concerned with keeping costs low and interested in mitigating global warming.

• Direct load control for AC units can be installed without the customer be ing at home, since the AC units are located outside. Also, an electrician is not required.

• Direct load control for water heaters requires access to the home and also requires an electrician. For these reasons, water heaters were not included in the load control prog ram. The water heater component is simply a sink to absorb any potential snapback from control of the AC units, an d does not constitute a primary load control goal in itself. From a technical perspective, the hot w ater heater is a useful addition, even though there are many fewer hot water heaters than AC units available.



### Program Tracking Considerations Direct load control is data intensive and load management data is pre cise. When load events are called either for capacity shortages or as tests, the systems self-validate. Care needs to be taken to insure the collection of data
elements sufficient to show the baseline condition at the time an even t is called and the response to the call as a kW effect. The duration of each event for evaluation purposes should also las t long enough to show the affected units back on line to demonstrate there are no unexpected effects.


### Detailed Budget Plans An estimated five-year budget for this program is provided below. The anti cipated cost to Duke Energy for offering this program to customers involves budgets for:

• A participant incentive of $25 each summer (5 monthly payments of $5).

• Cost of equipment prorated to the DLC effort ($100) plus the cost of connecting the controlled equipment ($150).Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 63 Cost to the participants is to accept the temporary load control when i ncidents are called.

Table 38. Estimated Five-Year Program Budget – Residential Peak Re duction
Cost per Participant Year 1 Year 2 Year 3 Year 4 Year 5 5-Yr Total Percent of Total Fixed Program Costs Implementation & Other Annual Cost $30,000 $0 $0 $0 $0 $3 0,000 0.1% DSM Staffing $44,000 $44,000 $66,000 $66,000 $88,000 $308,000 1.3% Program Monitoring & Evaluation $15,000 $15,000 $15,000 $15,000 $15,000 $75,000 0.3% Variable Program Costs Incentives (paid annually to participants) $25 $162,825 $407,075 $732,725 $1,139,800 $1,628,275 $4,0 70,700 17.5% Delivery & Other $288 $1,872,488 $2,808,875 $3,744,975 $4,681,363 $5,617, 463 $18,725,163 80.7% Total Budget $2,124,313 $3,274,950 $4,558,700 $5,902,163 $7,348,738 $23,208,863 100.0%Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 64 

### Program 3. Renewables and Demonstrations This program is designed to advance knowledge (R&D) and to be used for communica tions and promotions. It contains five program elements: solar photovoltaic, solar hot water, ground s ource heat pumps, combined heat and power (CHP) and the “Go Deep” project. Each of these program elements is currently non-cost-effective and together, the set is not cost-effective. However, this program in inclu ded in the recommended programs for three reasons. First, it is a source for a small number of technology demonstrat ion projects that can be used for promoting interest in energy efficiency. This can include a small number of solar demonstration projects at schools, a ground source heat pump demonstration and sponsoring a few homes for the “Go D eep” project.
Since most people are interested in "Green" programs, these examples w ill fit with and encourage this interest. Second, each of the demonstrations is at the edge of current technology in its area. This will keep key company staff current in solar, ground source, and "Go Deep" technologies. Third, ea ch of these has sufficient scale possibilities that make them sufficiently powerful to address climate change and, at the same time running these demonstrations will place the company in with companies in a leadership role in developing these technologies.



### Rationale Each of these program elements push technology beyond current cost-effecti ve limits, but, at the same time, present coherent pathways towards the future of energy efficiency applications . The “Go Deep” project is based on a German model using a “passive house” strategy. The goal is to reduce energy use by 80 percent in new and existing homes. The principles of this approach include tight super-insulated homes with a thick building envelope and high performance windows and doors. According to the organizer of the “Go Dee p” project, Linda Wigington, “Our housing is facing a crisis of obsolescence, and we have a lion share of exi sting houses that need to be dealt with to reduce energy in the near term.” In this approach structure and appli ances are parts of the solution as is “how a family lives in a house”. “Go Deep” is a national project in which individual utilities sponsor a small number of homes in the 1,000 home pilot. Early results suggest that attaining the s avings goal is possible, and the focus is on system replacements and increasing efficiencies. 14

14 "Go Deep," is a "Plan C" project, capable of addre ssing global warming if fully rolled out. Currentl y it would require addition of a strong carbon value (in the neighborh ood of $30-$35) to permit roll out under the TRC te st. However, the Go Deep pilot is finding efficiencies are cutting cost s for these new techniques. It is important to par ticipate in this effort, to be ready in case there is a rapid ramp up of implement ation to address climate change.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 65 

### Participation and Measures Measures are shown below.

Table 39. Measures and Incentives – Renewables and Demonstrations
Measure Number Measure/Program Element Electric Gas Incentive Amount Solar PV RE-1 RG-1 100% Solar Hot Water RE-39 100% Ground Source Heat Pump RE-20 100% Combined Heat and Power (CHP) RE-41 100% Go Deep Demo Demo 100%
Because this is a promotional and R&D program there will be only a very small number of projects each year.

Table 40. Estimated Participation and Savings - Renewables and Demonstrat ions

10,000 3,488 1.3 10 Program Year Incremental

Participants Percent

Participation kWh Saved kW Saved CCF Saved
Year 1 5

0.0% 17,440 7

50 Year 2 5

0.0% 17,440 7

50 Year 3 5

0.0% 17,440 7

50 Year 4 5

0.0% 17,440 7

50 Year 5 5

0.0% 17,440 7

50 Cumulative 25

0.0% 87,200 33

251 Per participant savings (kW): Per participant savings (kWh):

Per participant gas savings (CCF): Potential participants



### Marketing Plans These projects will be used to create interest in energy efficienc y through public demonstration projects and to provide referrals to the other programs. Marketing and promotion may be assis ted by exploring cost sharing by
localities.


### Program Tracking Considerations Since these are demonstration programs data collection will focus on techni cal documentation of each project.


### Detailed Budget Plans An estimated five-year budget for this program is provided below.

Table 41. Estimated Five-Year Program Budget - Renewables and Demons trations
Cost per Participant Year 1 Year 2 Year 3 Year 4 Year 5 5-Yr Total Percent of Total Fixed Program Costs Implementation & Other Annual Cost $25,000 $0 $0 $0 $0 $25,000 3% DSM Staffing $44,000 $44,000 $44,000 $44,000 $44,000 $220,000 28% Program Monitoring & Evaluation $20,000 $20,000 $50,000 $20,000 $50,000 $160,000 20% Variable Program Costs Incentives $8,530 $42,650 $42,650 $42,650 $42,650 $42,650 $213,250 27 % Delivery & Other $7,000 $35,000 $35,000 $35,000 $35,000 $35,000 $175,000 22% Total Budget $166,650 $141,650 $171,650 $141,650 $171,650 $793,250 100 .0%Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 66 

### Program 4. Commercial and Industrial Incentives This is a gas and electric energy savings program. The program targe ts only commercial and industrial accounts. The program is a totally custom program, designed to develop exceptionally productive energy savings opportunities in cooperation with the customer. Both electric and natural g as measures will be included. Each project will be specially designed. The incentive will be the amount re quired to lower the customer payback to two years, up to a maximum of 60 percent of incremental cost. It is expected that pr ojects will need to be carried out in narrow time windows as dictated by conditions specific to the customer’s op erations and that evaluation will consist primarily of short term instrumentation and spot metering. For the f irst nine months of each program year, no project may be allocated more than 10 percent of the measures budget allo cated for this program. The hurdle rate for projects under this program will be set to insure only the most cost-effective projects are selected so as to insure cost recovery.



### Rationale Some commercial and industrial customers will offer special opportunit ies for energy savings, either brought to Duke Energy by the customer (or the customer’s ESCO), or as identified by company account representatives and engineers. By providing a 60 percent cost share in co-developing projects, plus a 60 percent “buy down,” customer projects will be likely to move forward. Experience will show whether a 60 per cent buy down is enough to attract projects. If this percentage proves too low (based on response to the program ) the percentage buy down will be raised. Experience with similar projects in the Northeast has led u tilities to offer 90 to 75 percent buy downs in this program sector.


### Participation and Measures Measures are shown below.

Table 42. Measures and Incentives – C&I Incentives
Measure Measure Number Incentive Amount Custom Program (gas and electric) – designed to meet a selected cost-benefit ratio Not Applicable (Customer Specified) 60% of cost of study to develop project proposal and 60% of energy efficiency improvements
Because of the custom nature of the project, there will not be a large numbe r of participants in any one year.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 67 Table 43. Estimated Participation and Savings - C&I Incentives

2,750 173,100 20.7 2,915 Program Year Incremental

Participants Percent

Participation kWh Saved kW Saved CCF Saved
Year 1 5

0.0% 865,500 104

14,577 Year 2 10

0.0% 1,731,000 207

29,155 Year 3 10

0.0% 1,731,000 207

29,155 Year 4 15

0.0% 2,596,500 311

43,732 Year 5 15

0.0% 2,596,500 311

43,732
Cumulative 55

0.0% 9,520,500 1,139

160,350 Per participant gas savings (CCF): Potential Participants

Per Participant Savings (kW): Per participant Savings (kWh):



### Marketing Plans This program is in every respect a custom program. An example of this type of program is NSTAR Electric’s Compressed Air Leak Detection and Remediation Program ( www.compressedairchallenge.org and www.nstaronline.com/business/energy_efficiency ). Also see Pacific Power’s Energy FinAnswer and Energy FinAnswer Express programs at www.pacificpower.net/Navigation/Navigation925.html . It is expected that these will be high return projects in terms of savings achieved. As a program c ontrol tool, for the first nine months of each program year, funds to any one participant will be capped at 10 percent of pr ogram funds allocated to incentives for this program.


### Program Tracking Considerations Data requirements will vary with the specifications for each proj ect. In some cases, utility billing meter information is capable of the level of detail required to asse ss program impacts. In other cases, spot metering or other types of assessment may be required. In any case, the program manage r should collect, at a minimum, information about all customer electrical equipment, hours of operation, et c. It is expected that evaluations will primarily take the form of short term instrumentation and spot metering wi th engineering review. Since these are custom projects, it will be particularly important in insure provisi on is made to assess the kWh, therm, and/or kW condition that constitutes the baseline, and then measure the change due to t he DSM improvements.


### Detailed Budget Plans An estimated five-year budget for this program is provided below. The anti cipated cost to Duke Energy for offering this program to customers involves budgets for:

• Administrative costs to develop, advertise, oversee and monitor the program.

• A customer incentive of 60 percent to defray the cost and energy study and improve ments.
Costs to participating customers include the remainder of energy study cost to develop project proposals, provision for staff involvement in developing and monitoring the project, and the rema inder of equipment costs.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 68 Table 44. Estimated Five-Year Program Budget – C&I Incentives

Cost per Participant Year 1 Year 2 Year 3 Year 4 Year 5 5-Yr Total Percent of Total Fixed Program Costs Implementation & Other Annual Cost $30,000 $0 $0 $0 $0 $30,000 1% DSM Staffing $44,000 $44,000 $44,000 $44,000 $44,000 $220,000 9% Program Monitoring & Evaluation $40,000 $80,000 $80,000 $120,000 $120,000 $440,000 19% Variable Program Costs Incentives
$28,510 $142,550 $285,100 $285,100 $427,650 $427,650 $1,5 68,050 66% Delivery & Other $2,000 $10,000 $20,000 $20,000 $30,000 $30,000 $110,000 5% Total Budget $266,550 $429,100 $429,100 $621,650 $621,650 $2,368,050 1 00.0%Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 69 

### Program 5. Commercial and Industrial Rebates This is a gas and electricity energy savings program. The program tar gets non-residential customers eligible for gas and electric prescriptive measures. These will include commercial and industrial customers. For-profit, non-profit, and public agencies (such as schools) will be included.



### Rationale Rebates are straightforward reimbursements of a portion of customer co st of specific rebated energy efficiency items. Many customers have concerns about the high first cost associate d with some of the larger energy efficiency investments (e.g. HVAC systems or energy management systems). Duke Energy's proposed incentives will help remove that barrier. Some customers may also need technical assistanc e to determine what equipment is appropriate for their facilities. Duke Energy will help address that problem by pre-qualifying ESCOs and then making the list of pre-qualified ESCOs available to interested cust omers. As an example of this program type, NYSERDA’s EnergySmart(SM) Commercial/Industrial Performance P rogram (CIPP) is implemented entirely by ESCOs. Since the program started in 2004, the number of qualifying ESCOs in New Y ork State has increased significantly, thus facilitating program implementation. ESCO involv ement will provide customers with technical expertise to determine what equipment is most appropriate for them, as well as energy savings monitoring.


### Participation and Measures Representative measures are shown in the table below. Measures may be added o r deleted from the prescriptive list as information is gained during program planning and administration. The inc entive level for these measures is 50 percent. Although we have included a $1,000 simple audit expense, the program could be run w ithout an audit. Audit costs, if any, are also incented at 50 percent with full reimbursem ent when measures are installed.
With regard to street lighting, there is some controversy over whether the new LED streetlights are ready to move into full scale program implementation. Some cities, such as Ann Arbor and A nchorage are going to full scale implementation, while others (such as New York City) are trying a few lights on an experimental basis. Although some cities are now putting in large numbers of Light Emitting Diode (LED ) streetlights, MEEA is currently recommending them on a demonstration basis for use in parking lots that have cobr a-headed lights with shorter (about twenty feet high) poles. The LED units snap in to replace the old c obra bulb, making use of the existing cobra head and the existing poles. MEEA informally estimates an approxima te current payback in the Midwest of about nine years. 15 Duke Energy already has some direct experience with test installation s of the new streetlights, and direct experience is the best basis on which to adjust level of effort.

15 Duke Energy is a MEEA member, and so may contact J ay Wrobel, Program Director (312) 587-8390, extensi on 16, for information on specific brands and current costs in developing this measure.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 70 Table 45. Measures and Incentives – C&I Rebates
Measure Number Measure Electric Gas Incentive Amount New Efficient Lighting CE-17 50% Retrofit Efficient Lighting CE-18 50% LED Exit Signs CE-19 50% Efficient Package Refrigeration CE-10 50% Hot Food Cabinet CE-25 50% Electrically Commutated Motors CE-11 50% Premium Motors CE-12 50% Energy Star Transformers CE-14 50% Energy Star Water Heater CG-3 50% Energy Star Oven CG-4 50% Energy Star Stove CG-5 50% Energy Star Clothes Dryer CG-6 50% Energy Efficient Boiler CG-19 50% Furnace AFUE 92+ CG-24 50% Programmable Thermostat CG-29 50% LED Traffic Lights CE-20 50% LED Streetlight CE-32 50%
A rigorous analysis of program cost effectiveness is presented in the ne xt section but all of the measures included in this program are cost effective based on the measure-specific benefit- cost ratio (see Table 25).

Projected participation by year is shown in the table below.

Table 46. Estimated Participation and Savings - C&I Rebates

45,300 25,937 5.1 -225

Program Year Incremental

Participants Percent

Participation kWh Saved kW Saved CCF Saved Year 1 1,359

3.0% 35,248,383 6,864

(305,742) Year 2 2,265

5.0% 58,747,305 11,439

(509,570) Year 3 2,718

6.0% 70,496,766 13,727

(611,484) Year 4 3,171

7.0% 82,246,227 16,015

(713,398) Year 5 3,171

7.0% 82,246,227 16,015

(713,398) Cumulative 12,684

28.0% 328,984,908 64,060

(2,853,592) Per Participant Savings (kW): Per participant gas savings (CCF): Per participant Savings (kWh): Potential Participants



### Marketing Plans Duke Energy will need to advertise this program during its initial stage s, and also will need to actively recruit ESCOs to work in its service territory. We recommend some general a dvertising, primarily in the form of brochures and mailings targeted to potential program participants. Duke E nergy should work directly with business associations and contact some customers through account representativ es. The budget below provides for some general advertising at business events, as well as brochures and pre miums. The incentive level for the program is 50 percent.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 71 

### Program Tracking Considerations The program manager should insure that the vendor managing this program has an excell ent tracking system and provision should be made to gather in-service date and technical data about equipment being replaced as well as the energy savings measures that will replace old equipment.


### Detailed Budget Plans An estimated five-year budget for the Commercial and Industrial Rebate Program is provided below. The anticipated cost to Duke Energy for offering this program to customers invol ves budgets for:

• Administrative costs to develop, advertise, oversee and monitor the program.

• A customer incentive to defray the cost of an energy audit for those custom ers, although the primary strategy will be for ESCO development of audits.

• Incentives for installing energy efficient equipment.
Costs to participating customers include the remainder of equipment and i nstallation costs.

Table 47. Estimated Five-Year Program Budget – C&I Rebates
Cost per Participant Year 1 Year 2 Year 3 Year 4 Year 5 5-Yr Total Percent of Total Fixed Program Costs Implementation & Other Annual Cost $50,000 $0 $0 $0 $0 $50,000 0% DSM Staffing

$44,000 $44,000 $66,000 $88,000 $88,000 $330,000 0% Program Monitoring & Evaluation $10,000 $7,500 $80,000 $7,500 $80,000 $185,000 0% Variable Program Costs Incentives $5,100 $6,930,900 $11,551,500 $13,861,800 $16,172,100 $1 6,172,100 $64,688,400 97% Delivery & Other $130 $176,670 $294,450 $353,340 $412,230 $412,230 $1,648, 920 2% Total Budget $7,211,570 $11,897,450 $14,361,140 $16,679,830 $16,752, 330 $66,902,320 100.0%Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 72 

### Program 6. Commercial and Industrial Retro-Commissioning Lite This is a gas and electricity energy savings program. The program tar gets commercial and industrial customers with a usage profile that indicates a possible high value from gas, ele ctric, and gas/electric retro-commissioning. Although direct requests may also be received, typical the program begins off-site with a scan of billing records using EZ Sim or a similar tool. This screening process will select a pool of buildings for which it looks like retrocommissioning is highly likely to produce substantial energy savings. Building c ommissioning is a process that is associated with new buildings; a quality assurance process that is fol lowed to facilitate new buildings performing as designed. Retro-commissioning applies a similar process to existing build ings. The goal is insure that a building operates efficiently and effectively.
The focus of this pilot program is in insuring efficient operation, rathe r than on upgrading equipment. The program conducts a low-cost “tuning” of electricity related building systems. The t uning typically involves control systems such as energy management systems that may be improperly programmed, or cont rols that are out of calibration. When problems are identified and demonstrated, they may have major econom ic effects. When this type of problem exists, retro-commissioning resolves such problems at low cost. Th is project will also steer participants
towards the Commercial and Industrial Rebates and Commercial and Industr ial Incentives programs.



### Rationale Most buildings have never been commissioned, so the commissioning of an existing bui lding may be able to identify and correct high priority operating deficiencies and verify proper operations. The focus will typically be on energy-using equipment, lighting, and controls. Further, this program is designated as “retro-commissioning lite,” since it will involve engagements of about $3,000 to $4,000 per building 16 , rather than the $10,000 to $52,000 associated with full retro-commissioning. 17 The objective will be to find the best buildings for the program. These will be buildings with significant energy problems that can be easily detec ted and easily fixed. Energy savings will be documented by engineering calculations and evaluated using EZ Sim. The persist ence of energy savings will
also be tested.


### Participation and Measures Measures are listed below.

Table 48. Measures and Incentives – C&I Retro-Commissioning Lite
Measure Number Measure Electricity Gas Incentive Amount Retro Commissioning Lite CE-4 $1,500 (50%) Gas Retro-Commissioning CG-27 $2,000 (50%)

16 This is per building; an individual project may ha ve more than one building. 17 See Haasl &Terry Sharp, A Practical Guide for Commi ssioning Existing Buildings. Washington, DC: Office of Building Technology, State and Community Programs, US Depart ment of Energy. Prepared by Portland Energy Conser vation, Inc. and Oak Ridge National Laboratory, April 1999.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 73 Because it will take some time to put the program in place and to reach the targeted customers, we plan for participation in the program’s first year to be lower than in subsequent y ears, and expect that many of the first year participants are likely to be smaller businesses with more flexibi lity in their decision making.

Table 49. Estimated Participation and Savings – C&I Retro-Commissioning Lite

45,300 15,236 3.4 632 Program Year Incremental

Participants Percent

Participation kWh Saved kW Saved CCF Saved
Year 1 453

1.0% 6,901,908 1,523

286,152 Year 2 906

2.0% 13,803,816 3,045

572,303 Year 3 1,359

3.0% 20,705,724 4,568

858,455 Year 4 1,812

4.0% 27,607,632 6,090

1,144,606 Year 5 2,265

5.0% 34,509,540 7,613

1,430,758 Cumulative 6,795

15.0% 103,528,620 22,838

4,292,274 Per Participant Savings (kW): Per participant Savings (kWh):

Per participant gas savings (CCF): Potential Participants



### Marketing Plans We recommend some general advertising within the business community, prim arily in the form of brochures and mailings targeted to potential program participants; also coordinat ion with business associations. The budget below provides for some general advertising at business events, as well as br ochures and premiums. Since this program will operate using internal prescreening, direct contacts to selecte d businesses and institutions will also be useful. Air Advice is currently running a similar program for the Oregon Energy T rust.


### Program Tracking Considerations The program manager should collect, at a minimum, information about all custome r electrical equipment, hours of operation, etc. The major concern will be for complete and accurate documentation of “before” and “after” energy use and demand impacts. Monitoring over the duration of energy savings and dema nd reduction is also a concern. Savings stability can be monitored through a monthly billing analysis.


### Detailed Budget Plans An estimated five-year budget for this program is provided below. The anti cipated cost for offering this program to customers involves budgets for:

• Administrative costs to develop, advertise, oversee and monitor the program.

• Incentives for installing energy efficient equipment. 18

Costs to participating customers include the remainder of equipment cos ts.

18 Incentive amounts are based on the average incentiv e given in NYSERDA’s EnergySmartSM CIPP program, di scounted to allow participation by smaller commercial customers . The average CIPP program participant receives $1 7,000 in incentives. We have discounted that number to $9,750.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 74 Table 50. Estimated Five-Year Program Budget – C&I Retro-Commission ing Lite
Cost per Participant Year 1 Year 2 Year 3 Year 4 Year 5 5-Yr Total Percent of Total Fixed Program Costs Implementation & Other Annual Cost $50,000 $0 $0 $0 $0 $50,000 0% DSM Staffing $44,000 $44,000 $44,000 $44,000 $44,000 $220,000 2% Program Monitoring & Evaluation $80,000 $80,000 $80,000 $80,000 $80,000 $400,000 4% Variable Program Costs Incentives $1,500 $679,500 $1,359,000 $2,038,500 $2,718,000 $3,397, 500 $10,192,500 94% Delivery & Other $0 $0 $0 $0 $0 $0 $0 0% Total Budget $853,500 $1,483,000 $2,162,500 $2,842,000 $3,521,500 $10 ,862,500 100.0%
This program also serves as a feeder program for the prescriptive prog ram (Program 5, C&I Rebates).Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 75 

### Program 7. Commercial and Industrial HVAC Optimization This is a program using an electric measure to produce both gas and electri c energy savings. The program was designed on the premise that much commercial and industrial Heating Vent ilation and Cooling (HVAC) is not operating as planned. A typical assignment envisioned in this program is to do on-si te testing of HVAC units, and review their operation as an integrated building system. For example, out of twelve rooftop units, it is likely that two will be operating out of specification due to improper installation, subsequ ent damage to units, or problems with controls. In the case of a large school, built in sections over time, it woul d not be unusual to find adjacent units, some cooling and some heating, and other units damaged while most units are performing as designed.



### Rationale Most buildings have never had a focused look at the working of the HVAC system s. This program will deploy HVAC specialists to test units and make recommendations for their effi cient operation as a building system. This will primarily involve repair of units and control adjustments, but may a lso involve recommendations for modification to air circulation within buildings.


### Participation and Measures Measures are listed below.

Table 51. Measures and Incentives – C&I HVAC Optimization
Measure Electric Measure Number Incentive Amounts Small HVAC Optimization (2 units) CE-2 25%
Participation is indicated in the table below.

Table 52. Estimated Participation and Savings – C&I HVAC Optimization

29,960 11,234 2.5 463 Program Year Incremental

Participants Percent

Participation kWh Saved kW Saved CCF Saved
Year 1 300

1.0% 3,370,200 750

138,776 Year 2 599

2.0% 6,729,166 1,497

277,088 Year 3 899

3.0% 10,099,366 2,247

415,864 Year 4 1,198

4.0% 13,458,332 2,995

554,177 Year 5 1,498

5.0% 16,828,532 3,744

692,952 Cumulative 4,494

15.0% 50,485,596 11,233

2,078,857 Potential Participants Per participant Savings (kWh): Per Participant Savings (kW): Per participant gas savings (CCF):



### Marketing Plans It is likely that company representatives can help develop lists of building s that will be likely candidates for this program. In addition, there should be coordination with business associations. The budget below provides for some general advertising at business events, as well as brochures and premiums. A limiting factor in marketing and promotion will be the issue of owner-occupied versus leased space. Better t han 50 percent of commercial space is conditioned by these units.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 76 

### Program Tracking Considerations This is an applied technical program that will be dependent on the quality and c ompleteness of technical drawings and brief technical explanation provided by the program staff. Evaluation will rely on this information and may also involve spot metering and (where applicable) billing analysis.


### Detailed Budget Plans An estimated five-year budget for this program is provided below. The anti cipated cost for offering this program to customers involves budgets for:

• Administrative costs to develop, advertise, oversee and monitor the program.

• Incentives to cover HVAC inspection and evaluation of air flows where nec essary.
Costs to participating customers include the remainder of costs (for repairs to HVAC equipment and remodeling to permit better airflow within buildings).

Table 53. Estimated Five-Year Program Budget – C&I HVAC Optimizati on Cost per Participant Year 1 Year 2 Year 3 Year 4 Year 5 5-Yr Total Percent of Total Fixed Program Costs Implementation & Other Annual Cost $50,000 $0 $0 $0 $0 $5 0,000 2% DSM Staffing $44,000 $44,000 $44,000 $44,000 $44,000 $220,000 7% Program Monitoring & Evaluation $10,000 $7,500 $80,000 $7,500 $80,000 $185,000 6% Variable Program Costs Incentives $570 $171,000 $341,430 $512,430 $682,860 $853,860 $2,561, 580 85% Delivery & Other $0 $0 $0 $0 $0 $0 $0 0% Total Budget $275,000 $392,930 $636,430 $734,360 $977,860 $3,016,580 1 00.0%
This program also serves as a feeder program for the prescriptive prog ram (Program 5, C&I Rebates).Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 77 

### Program 8. Commercial and Industrial Audit This is a gas and electric energy savings program. The program is tar geted to food service facilities and grocery store/supermarkets. It consists of refrigeration improvements, improvem ents to refrigeration to reduce load, and restaurant commissioning audits (designed to optimize controls and limit e nergy losses in food service facilities). The program will also serve as a feeder to Program 5, C&I Rebates.



### Rationale There are consistent energy savings to be obtained from food service fa cilities (primarily restaurants) and the refrigeration end-use in grocery stores and supermarkets. There ar e three DSM measures in this program, listed in
the table below.


### Participation and Measures Measures are listed below.

Table 54. Measures and Incentives – C&I Audit
Measure Number Measure Electric Gas Incentive Amount Restaurant Commissioning Audit CE-28 CG-7 50% Refrigeration Tune-Up CE-29 50% Refrigeration Casework CE-30 50%
Participation is indicated in the table below.

Table 55. Estimated Participation and Savings – C&I Audit

3,550 16,044 4.6 187

Program Year Incremental

Participants Percent

Participation kWh Saved kW Saved CCF Saved
Year 1 36

1.0% 577,584 164

6,717 Year 2 71

2.0% 1,139,124 324

13,248 Year 3 107

3.0% 1,716,708 488

19,965 Year 4 142

4.0% 2,278,248 648

26,496 Year 5 178

5.0% 2,855,832 812

33,213 Cumulative 534

15.0% 8,567,496 2,436

99,638 Per participant gas savings (CCF): Per participant Savings (kWh): Potential Participants

Per Participant Savings (kW):



### Marketing Plans It is likely that company representatives can develop lists of buildings that will be likely candidates for this program. In addition, there should be coordination with business associations. The budg et below provides for incentives and some general advertising at business events, as well as , brochures.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 78 

### Program Tracking Considerations This is an applied technical program that will be dependent on the quality and c ompleteness of technical drawings and brief technical explanation provided by the program staff developed on-site for each project. Evaluation will rely on this information and may also involve spot metering and (where applica ble) billing analysis.


### Detailed Budget Plans An estimated five-year budget for this program is provided below. The anti cipated cost for offering this program to customers involves budgets for:

• Administrative costs to develop, advertise, oversee and monitor the program.

• Incentives to cover a portion of the audits and tune-ups.
Costs to participating customers include the remainder of increment al costs not covered by the incentives. If additional incentive is found to be necessary to increase participation ra tes, Duke Energy could consider paying 100 percent of the audit costs if clients install recommended measures.
Table 56. Estimated Five-Year Program Budget – C&I Audit

Cost per Participant Year 1 Year 2 Year 3 Year 4 Year 5 5-Yr Total Percent of Total Fixed Program Costs Implementation & Other Annual Cost $50,000 $0 $0 $0 $0 $50,000 5% DSM Staffing $22,000 $22,000 $22,000 $22,000 $22,000 $110,000 12% Program Monitoring & Evaluation $10,000 $7,500 $80,000 $7,500 $80,000 $185,000 20% Variable Program Costs Incentives $950 $34,200 $67,450 $101,650 $134,900 $169,100 $507,300 5 5% Delivery & Other $130 $4,680 $9,230 $13,910 $18,460 $23,140 $69,420 8% Total Budget $120,880 $106,180 $217,560 $182,860 $294,240 $921,720 100 .0%
This program also serves as a feeder program for the prescriptive prog ram (Program 5, C&I Rebates).Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 79 

### Program 9. Commercial and Industrial New Construction This is a gas and electricity energy savings program. The program tar gets new commercial and industrial construction. The program provides rebates for developing projects that a re at least 30 percent more efficient than the newest ASHRAE code. Incentives are offered to project owners or, for g overnment buildings, to the design team. These incentives will cover 50 percent of the incremental cos t difference between standard and energy efficient equipment, or the amount of the incentive will be enough to decrease the incremental cost to a 1.5 year payback, whichever is less. The focus of this program is on integrated de sign. Prospective vendors should be asked to propose a method of determining incremental cost for Duke Energy re view. As a control tool, for the first nine months of each year, no project may be allocated more than 10 percent of the budg et allocated for efficiency improvements for this program.
This program is based on National Grid’s Design 2000 Plus program. For comparison, W estern Mass Electric's (WMECo's) Energy Conscious Construction program covers most costs plus, for l arger and complex projects, provides design assistance. 19 National Grid's Design 2000 Plus program initially covered 60 to 90 percent of incremental cost plus a comprehensive design approach for larger and compl ex projects. 20 More recently, as a mature program, National Grid Design 2000 Plus now covers 75 percent of increme ntal cost. 21 The program will follow the Advanced Buildings System approach developed by the New Buildings Insti tute. 22



### Rationale This program is designed to overcome first cost barriers by providing incent ives that cover the incremental cost, and to provide information to project developers and design teams. Payback ca n be on the order of three to five years. The trend for this type of program is now towards prescription packa ges.


### Participation and Measures Measures are listed below.

Table 57. Measures and Incentives – C&I New Construction
Measure Number Measure Electric Gas Incentive Amounts Integrated Building Design All Electric CE-9 50% of Incremental Cost Integrated Building Design Electric/Gas CG-23 50% of Incremental Cost

19 See: www.wmeco.com/business/saveenergy/energyeffic iencyprograms. 20 See: www.aceee.org/utility/9angriddesign2000.pdf. 21 See: www.nationalgridus.com/masselectric/business /energyeff/4_new.asp. 22 See: http://www.advancedbuildings.net/index.htm. N ote that leading programs are adopting the NBI appr oach.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 80 Projected participation is shown in the table below.

Table 58. Estimated Participation and Savings - C&I New Construction

453 48,862 9.2 798 Program Year Incremental

Participants Percent

Participation kWh Saved kW Saved CCF Saved
Year 1 9

2.0% 439,758 83

7,184 Year 2 11

2.5% 537,482 102

8,781 Year 3 14

3.0% 684,068 129

11,175 Year 4 15

3.3% 732,930 139

11,974 Year 5 25

5.5% 1,221,550 231

19,956 Cumulative 74

3.3% 3,615,788 684

59,070 Potential Participants

Per Participant Savings (kW): Per participant Savings (kWh):



### Marketing Plan The target of the marketing effort will be the project owners and the de sign teams. Programs of this type usually involve direct personal relationship building, training sessions or seminar s, direct marketing, and meetings.


### Program Tracking Considerations New construction projects present a particular challenge for program t racking since there is not an actual baseline building to compare to the new structure. This means that the contrast t o baseline conditions will require simulation software that can model the incremental energy efficiency improvements. The specific assumptions built-in to the model should be recorded so that they are evident, and the simulatio n software package employed must be in general use for DSM applications in which current practice ( as built) conditions are used to develop the energy savings that derive from the measures installed. Simulation so ftware is required to take sometime complex
interaction effects into account.


### Detailed Budget Plans An estimated five-year budget for this program is provided below. The anti cipated cost to Duke Energy for offering this program to customers involves budgets for:

• Administrative costs to develop, advertise, oversee and monitor the program.

• Incentives for the installation of recommended measures as demonstrated t hrough the provision of receipts by the customer.
Costs to participating customers include the customer share of the cost s of covered measures and equipment and
installation costs.
Table 59. Estimated Five-Year Program Budget – C&I New Construction

Cost per Participant Year 1 Year 2 Year 3 Year 4 Year 5 5-Yr Total Percent of Total Fixed Program Costs Implementation & Other Annual Cost $20,000 $0 $0 $0 $0 $20,000 2% DSM Staffing $22,000 $22,000 $22,000 $22,000 $22,000 $110,000 9% Program Monitoring & Evaluation $10,000 $7,500 $80,000 $7,500 $80,000 $185,000 15% Variable Program Costs Incentives $12,350 $111,150 $135,850 $172,900 $185,250 $308,750 $913 ,900 72% Delivery & Other $500 $4,500 $5,500 $7,000 $7,500 $12,500 $37,000 3% Total Budget $167,650 $170,850 $281,900 $222,250 $423,250 $1,265,900 1 00.0%Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 81 

### Program 10. Residential Whole House This is a gas and electricity energy savings program. The program incl udes the two residential energy assessment options that are carried out remotely, by mail or Internet and an on-site a udit with direct installation of minor measures. In both remote options, a residential customer can conduct a resident ial energy assessment using a computerized home energy auditing program. The remote audit program is the sam e for both the Internet and mail options, and works by linking to actual billing data for the residential ac count. The remote program is open to all customers and free to all customers. However, the program will work best for gas and electric heat customers and this is the focus of the remote audit program. In addition, for gas and electri c heat customers who complete the remote audit, Duke Energy will send a small kit of energy efficiency i tems. As a more advanced option, the program will also offer an on-site audit for Duke Energy's electric hea t customers for a $50 fee, as discussed below. The savings in the remote elements of this program are computed based on the i tems in the kit, and no savings is assumed for the remote audit step.



### Rationale The remote elements of this program are open to all residential customers at no charge to provide easy access to energy efficiency recommendations tailored to the home. Since it is con ducted by Internet or mail, it can be done to suit a customer’s schedule. The remote elements are an entry-le vel degree of customer engagement, providing a way for customers to begin to get direct information on what they can do to make their home more energy efficient.
For homes with gas or electric heat, the separate program element for an on- site energy audit with direct install of minor measures provides the option of a higher level in-home audit for a small fee, refunded if audit recommendations are implemented . The on-site audit program element targets households in existing singl e family homes and condos and (with a different permission structure) for multifamily dwellings. The program includes an on-site audit and encourages households to save electricity through the insta llation of energy efficiency measures. The audit, for example, might recommend air sealing, insulation, and other measure s.
The On-Site Audit with direct install program element will provide house holds with a walk-through examination of their home by a trained auditor/contractor using standard audit software f or identifying existing conditions related to electric energy usage. The auditor will identify specific energy s aving opportunities that could be installed by the contractor upon approval of a job scope by the customer. The contractor will convey energy saving tips during the walk-through, and attempt to be comprehensive in their assessment of opportunitie s regardless of their particular specialization. Customers will pay $50 of the audit cost, and have t heir audit cost credited to their bill if they proceed with installation of at least one of the recommended measures. The recommendations of the auditor are expected to be standard measures associated with whole house weatheriz ation, such as ceiling insulation, wall insulation, air sealing, etc.
At the same time, during the walk-through audit, the contractor will install the measures in the Direct Install Kit at no cost to the customer and additional low-cost measures (see Table 60). At the conclusion of the site visit,Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 82 customers will be provided with a check list of preliminary recommendations from the audit, to be followed within one week by a full report generated by the audit software. The program will ta ke credit for kit measures after degrading the kit savings for expected installation rates. Expected inst allation rates of 80 percent for CFL’s, 60 percent for showerheads, and 75 percent for aerators were used to calculat e program savings for the mailed kits. Savings from the on-site audit are only counted for installed measures at the time of the audit and recommended measures subsequently installed and rebated. There is a 50 percent inc entive for recommended measures beyond those directly installed during the audit.
The package of direct install measures is modeled after Wisconsin’s H ome Performance with Energy Star program with emphasis on their E-Saver Kit component, which includes these measure s plus a programmable thermostat, but only included one CFL. 23 Programmable thermostats have recently become controversial (see A ppendix). To overcome problems with programmable thermostats, the program will focus on easy-to-read, easy-to-use equipment and provide customer education.
The remote elements provide easy access to energy saving information ta ilored using computerized energy use information and an electronic protocol. The on-site audit with direct i nstall of minor measures program element provides a step up to an on-site audit. This program element, in addition, may ser ve as a predecessor to a full Home Performance with Energy Star program, providing a framework to work with cont ractors to develop Home Performance with Energy Star, if such a program is desired in the second p rogram cycle. 

### Participation and Measures Measures are shown in the table below, and may be added or subtracted during the pr ogram based on experience.

Table 60. Measures and Incentives – Residential Whole House
Measure Number Measures – Remote Program Elements Electric Gas Incentive Amount CFLs (4) RE-32 100% Showerheads (2) and Aerators (3) RE-36 100% Showerheads (2) and Aerators (3) RG-7 100% Measures – On-Site Program Element All of Remote Program Elements plus: Wall Insulation RE-21 50% Wall Insulation RG-28 50% Ceiling Insulation RE-16 50% Ceiling Insulation RG-25 50% Refrigerator Charge & Duct Tune-Up RE-6 50% Refrigerator Charge & Duct Tune-Up RG-27 50% House Seal RE-18 50% House Seal RG-26 50% WH Tank/Pipe Wrap & Temp Set RE-35 50% WH Tank/Pipe Wrap & Temp Set RG-6 50% Programmable Thermostat RE-15 50% Programmable Thermostat RG-18 50% Compact Fluorescent Lights (12) RE-32 100%

23 State of Wisconsin Department of Administration Foc us on Energy Statewide Evaluation, Evaluation of th e Home Performance with Energy STAR Whole House Component, April 24, 2003.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 83 There is no cost in the remote program elements to participating customer s for the remote audit and kit. There is a $50 fee for the on-site audit, however this is credited to the bill if at least one program recommended measure is installed (recommended measures will be supported by the company at a 50% rebat e).
Projected participation by year is shown in the table below. Most participant s are expected to be remote only with the remainder receiving the on-site audit.

Table 61. Estimated Participation and Savings - Residential Whole Hous e
593,800 485 0.1 19 Program Year Incremental

Participants Percent

Participation kWh Saved kW Saved CCF Saved Year 1 4,451

0.7% 2,158,735 449

82,940 Year 2 7,419

1.2% 3,598,215 749

138,246 Year 3 10,387

1.7% 5,037,695 1,048

193,551 Year 4 11,870

2.0% 5,756,950 1,198

221,186 Year 5 13,354

2.2% 6,476,690 1,348

248,839 Cumulative 47,481

8.0% 23,028,285 4,791

884,762 Per participant gas savings (CCF): Potential Participants Per participant Savings (kWh): Per Participant Savings (kW):



### Marketing Plans Duke Energy will need to actively market this program in customer communic ations, such as bill stuffers. Employees can also make customers aware of this program if they contact the company about energy efficiency or a need to lower bills. The remote program elements are low-involvement le ad-in programs that will help develop prospects for other programs.
In developing the kit for the remote program elements, strategic atte ntion should be placed on the kit as a marketing tool. First, insure that the kit items are attractively packaged a nd that the package itself is attractive. The focus should be on making the kits attractive and interesting as well as technica l. Possibly some non-energy but useful health and safety items can be included, as well as helpful literature. S ince many customers are more interested in “green” items to try to reduce carbon and save the planet, marketing st aff should ask for suggestions and perhaps create a “green” theme. For example, one year the Washington DC Energy Of fice obtained a tire gauge for inclusion in each kit, donated by a local business. For the basic kit items, it is important to consider the value of paying a bit more for “higher end” better performing and better looking items. A gain, the kit is part of the marketing and promotion of this program. The kits should also be available at cost from the company’s website.
The on-site program element represents a step up in engagement and commit ment for an on-site energy audit that can lead to full weatherization retrofit with a 50 percent level of suppor t from the utility company. As noted above, the on-site element can be developed into a full Home Performance with Energ y Star program for the second program cycle.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 84 

### Program Tracking Considerations The program elements in this program (remote and on-site) are packag ed programs provided by a vendor. All data requirements should be part of the program database.


### Detailed Budget Plans An estimated five-year budget for this program is provided below. The anti cipated cost to Duke Energy for offering this program to customers involves budgets for:

• Administrative costs to develop, advertise, oversee and monitor the program

. • Direct program costs, including a vendorized Internet/mail-in energy as sessment program.

• Direct program costs for the audit/direct install vendor.
There is no cost in the remote program elements to participating customer s for the remote audit and kit. There is a fifty dollar fee for the on-site audit, however this is credited to the bil l if at least one program recommended measure is installed (recommended measures will be supported by the company a t a 50% rebate).

Table 62. Estimated Five-Year Program Budget – Residential Whole Hous e
Cost per Participant Year 1 Year 2 Year 3 Year 4 Year 5 5-Yr Total Percent of Total Fixed Program Costs Implementation & Other Annual Cost $20,000 $0 $0 $0 $0 $20,000 0% DSM Staffing $44,000 $44,000 $44,000 $44,000 $44,000 $220,000 5% Program Monitoring & Evaluation $10,000 $7,500 $80,000 $7,500 $100,000 $205,000 4% Variable Program Costs Incentives $69 $306,229 $510,427 $714,626 $816,656 $918,755 $3,266,6 93 70% Delivery & Other $20 $89,020 $148,380 $207,740 $237,400 $267,080 $949,620 2 0% Total Budget $469,249 $710,307 $1,046,366 $1,105,556 $1,329,835 $4,66 1,313 100.0%Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 85 

### Program 11. Residential Rebates This program is designed to produce both gas and electric energy savings. The Residential Rebates program is focused on rebates for CFLs and energy efficient appliances.
The promotion will provide rebate coupons to Duke Energy customers toward the pur chase of CFLs, LEDs, and energy efficient appliances. The coupon approach gives the program admini strator direct control over where coupons will be made available and for which sales outlets. 24

The dollar amount for the appliance incentive for this promotion is lower than might be expected based on industry experience in prior years. This is due in part to recent changes in t he Energy Star program and the overall success of the Energy Star strategy as demonstrated by the gradual increase in e nergy efficiency of base case (non-Energy Star) equivalent products. This is also why refrigerators and dishwa shers are not included among the appliances for which rebates are provided.
For clothes washers, MEEA utilities have been using a $75 to $100 rebate, however this amount includes an arranged manufacturer rebate of $25 to $50. According to a September 2006 Consortium for Energy Efficiency (CEE) report, Alliant Energy provided a $50 rebate for vertical axis and a $100 rebate for horizontal axis clothes washers. To communicate a consistent message, the rebate for clothes washers is set at $100. Efficiency Vermont provided a $50 rebate for a CEE Tier 3a clothes washer and $25 for a room AC. The Long I sland Power Authority clothes washer rebate is $15, $35, or $50 to customers along with a $50 clothes washer r ebate for builders who install a clothes washer with a modified energy factor (MEF) of 2.0 or higher. 25 National Grid provides a $100 clothes washer rebate for washers with MEF of 1.8 or higher. United Illum inating and Connecticut Light & Power both provide a $20 or $50 clothes washer rebate. Sacramento Municipal Utility Dis trict (SMUD) has clothes washer rebates at $75 and $125 depending on CEE tier level.

24 The coupon approach is available as a “packaged” a pproach through Energy Federation Incorporated (EFI ), which can also provide coupon processing services ( www.efi.org ). WECC administers several similar programs. Mark eting and promotional plans for this program area have been developed col laboratively through the Consortium for Energy Effi ciency (CEE). Part of the reality of this kind of program is the need to work through a program vendor. The vendor offers a full package of features, one of the most important of which is contact with the national offices of big-box and other chain sto res. Duke Energy may also want to explore making promotions available th rough locally owned and operated stores. Big-box s tores are already primed and looking for cooperation with utilities a nd program vendors in this area will already have r elationships with national offices of the big-box stores that can be activated for Duke Energy. For lighting promotions, Wal-Mar t has announced a major CFL initiative designed to introduce at least one C FL to each of its 100 million US customers over the next few years. In initiating this campaign, Wal-Mart has devoted addi tional shelf space to CFLs and arranged with GE for an initial 21 percent cut in the price of CFLs. We can expect a number o f promotions for 4-packs, 6-packs, 12-packs, an inc reasing variety of bulb types, and possible additional price reductions. Al though this initiative has received major buzz, oth er stores, such as Home Depot and Lowe’s are implementing similar CFL promo tions, and a trip to any of these big-box stores wi ll show that extensive shelf space is now dedicated to promotion of a wide variety of Energy Star CFLs. These big-box initia tives are compatible with the lighting promotion design and can be viewe d as additional leverage for program efforts. Utili ties with current CFL DSM programs have been working with both local and big box retailers, and see any further contribution s on the part of manufacturers and retailers in cutting prices and e xtending promotions as contributing to their progra ms. 25 The higher the MEF, the more efficient the clothes washer.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 86 

### Rationale The appliance and lighting program elements both improve the product mix in fav or of energy efficient technologies for the service territory by promoting the purchase and stocki ng of efficient replacement units. Appliance promotions are best developed on a national level with participa tion by utilities and governments. Energy Star has overcome all of the defects of the earlier local or regional promotional programs through a single national program structured to periodically advance program standards and re gulate minimum efficiencies. At the same time, it is structured to work with regional marketing initiativ es and local promotion. 26

CFL promotions are also best developed by leveraging national campaigns (suc h as "Save a Light - Save the World"), including federal investments in marketing and promotion by EPA and the now coordinated efforts developed through utility cooperation with big-box stores.


### Participation and Measures Measures are shown in the table below.

Table 63. Measures and Incentives - Residential Rebates

Measure Number Measures/Program Element Electric Gas Incentive Amount Energy Star Clothes Washers RE-28 $100 per unit Gas Water Heater RG-2 $25 per unit Gas Clothes Dryer RG-4 $25 per unit Tankless Water Heater RG-8 $125 per unit HE Furnace AFUE 92+ RG-14 $188 per unit Energy Star CFL Instant Coupon RE-32 $1 Energy Star CFL 2-Pak Coupon RE-32 $2 Energy Star CFL 4-Pak Coupon RE-32 $4 CFL 6-Pak Coupon RE-32 $6 CFL 8 RE-32 $8 LED Holiday Light Strings NA Up to 3 free if 3 or more traded in
Light Emitting Diode (LED) Holiday Light Strings, the last measure lis ted in Table 63 is included as a promotional item, and is not part of Measure RE-32 or a tested measure. The Holiday L ighting Exchange has proven to be a very well accepted part of the energy efficiency efforts in Califor nia and Alaska. In California it helps focus public attention on the greater energy efficiency effort. In the California prog rams (run throughout the state) in the month of December the utilities include LED Holiday Light Strings in their s tandard CFL exchange programs. Customers may bring in three or more strings of old inefficient holiday lights and e xchange them for up to three strings of LED Holiday Lights. 27

26 For example, for the history of the residential cl othes washer initiative, see Shel Feldman Managemen t Consulting, Research into Action incorporated, and Xenergy incorporated, The Residential Clothes Washer Initiative, A Case Study of the Contributions of a Collaborative Effort to Transfor m the Market, prepared for the Consortium for Energ y Efficiency, June 2001 (http://www.cee1.org/eval/RCWI_eval.pdf). 27 The new LED holiday lights use only 0.04 watts per bulb (compare with 0.4 watts for newer miniature l ights or 5 watts/bulb for C7 screw-in lights, or 10 watts per standard bu lb). The retail cost of a string of 100 LED lights is approximately 3 times theOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 87 Projected participation by year is shown in the table below.

Table 64. Estimated Participation and Savings - Residential Rebates

593,800 331 0.1 -2

Program Year Incremental

Participants Percent

Participation kWh Saved kW Saved CCF Saved Year 1 17,814

3.0% 5,896,434 1,121

(39,352) Year 2 41,566

7.0% 13,758,346 2,616

(91,821) Year 3 53,442

9.0% 17,689,302 3,364

(118,056) Year 4 71,256

12.0% 23,585,736 4,485

(157,408) Year 5 83,132

14.0% 27,516,692 5,232

(183,643) Cumulative 267,210

45.0% 88,446,510 16,818

(590,280) Potential Participants (yearly) Per participant Savings (kWh): Per Participant Savings (kW): Per participant gas savings (CCF):



### Marketing Plans Proposed marketing efforts include the use of utility bill stuffers, and c oordinated advertising with selected retail outlets. This type of program is best implemented using implementation vendors and the program elements already exist in nationally available programs for utilities to implement, and s election of a regional vendor will provide added value in the form of detailed program and technology knowledge and relat ionships. A basic assumption in the development of this program is that it is not so much the size of th e rebate so much as the existence of a rebate and the skill in developing engaging promotions and long-term relationships with the appliance industry and dealers that will help move the more energy-efficient products. 28, 29

The basic marketing goals for the appliance program elements come from t he Consortium for Energy Efficiency and are provided below: 30

• Consumers understand and value the benefits from energy-efficient featur es.

• Retail sales force is knowledgeable about Energy Star and considers it a meaningful distinction for making a sale.

• Manufacturers market and promote energy-efficient products and/or featu res.

• Energy efficiency, defined by Energy Star performance levels, becomes a s tandard feature or is available across all manufacturers’ product lines.

• Energy Star represents the most energy efficient quality products ava ilable.

cost of a string of 100 miniature lights. To work out a comparison, assume that lights are used 5 hrs /day or 150 hours for a month. For current information, see Questline, “Li ghting Up the Holidays: An Energy Cost Comparison” at www.questline.com/Article.aspx?userID=365464&articl eID=3457&NL=5439. We thank Betsy Krieg at Pacific Gas & Electric for this updated information. When run as an exchange, we have observed that the majority of strings turned in appear to be the 10 watt and 5 watt bulbs. For strings of 100 bulbs this replacement by 0.04 watt LED bulbs is a major difference for this end-use. 28 See the WECC paper on residential appliances at ht tp://www.aceee.org/utility/ngbestprac/wecc.pdf. No te that this paper is for a natural gas clothes washer program, however “ lessons learned” regarding relationships and promot ion would apply across appliance programs. 29 A review of rebates offered across the US indicate s that most utilities are offering rebates from thi s kind of marketing and promotional perspective rather than from a direct r esource acquisition perspective. See the Database o f State Incentives for Renewables & Efficiency, (DSIRE), maintained by the North Carolina Solar Center for the Interstate Ren ewable Energy Council (IREC) funded by the U.S. Department of Ene rgy (DSIRE) at (http://www.dsireusa.org/library/includes/techno.cf m?EE=1&RE=0). 30 CEE's National Residential Home Appliance Market Transformation Strategic Plan, December 2000 (http://www.cee1.org/resid/seha/seha-plan.php3).Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 88 The Energy Star residential lighting promotion will parallel the Energy St ar appliance promotion to reach residential customers through retail outlets. The lighting promotion provi des direct incentives to consumers to facilitate their purchase of energy-efficient lights. The incenti ve is in the form of discounted pricing available for lighting products that carry the Energy Star logo.
This program is justified based on direct energy savings targets but a lso has a significant market transformation dimension. Generally, throughout the US, the Energy Star program has been affect ing the types of lighting products
available in stores:

• The relative amount of available lighting shelf space assigned to Energy Star lighting products is increasing dramatically in “big box” stores.

• The quality of CFL lighting has dramatically increased.

• The diversity of CFL styles and applications has greatly increased.

• There has been as sizable decrease in the cost of energy-efficient lighting, and with it an increase in store sponsored promotions featuring price discounts.

• At the same time, there is still variation in lighting quality between m anufacturers and types of CFLs.
In this program, Duke Energy will be an active participant in the US Energy St ar campaign. Through this participation, it is expected that the company will move more Energy Star lighting into retail stores, help make energy efficient lighting more affordable to its customers, and provi de a continuing and responsible guidance and energy efficiency education message to customers.
Incentives will be implemented by coupons, in-store markdowns, or upstream manuf acturer buy-downs. A coupon approach is more suitable for a service territory because it gives the p rogram administrator direct control over where coupons are available and for which sales outlets. 31 The lighting promotion program is modeled after a set of promotional programs that is implemented by Energy Federation Incorporated. T hese programs are sponsored by Connecticut Light and Power, United Illuminating Company, the Cape Light Compact , National Grid, NSTAR Electric, and Western Massachusetts Electric.


### Program Tracking Considerations Data collection and documentation for program purposes and monthly/annual report ing will be included as features of the vendor program “package.” Data estimation of the baseline market a nd market potential for the specific Energy Star appliances promoted should be refined as a part of the vendor s ervices and developed for each product type. Data estimation of the baseline market and market potential f or Energy Star bulbs and fixtures in the DEO service territory should be refined as a part of the vendor services and d eveloped for each product type (CFL, type of CFL, CFL pack, LED holiday lights). In addition, for the program evaluation, da ta collection to compute freeriders and spillover effects for computing Net-to-Gross ratios will ne ed to be worked out prior to program

31 An alternative or parallel approach is the "lightin g catalog," which can be an extensive catalog of li ghting options offered by a fulfillment vendor or a simple option for purchas e of limited types of CFLs over the Duke Energy web site. For customers not near a cooperating big box or local store, an I nternet option is a valuable addition from a custom er service perspective. At the same time, there is a 'trade off' since the mar ket transformation dimension of this program is bet ter met by working with existing supply channels and existing retail outlet s.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 89 implementation, and responsibilities for collecting data inputs will need to be carefully defined along with workable accountability relationships.


### Detailed Budget Plans As in the other programs, the anticipated cost to Duke Energy for offering thi s program to customers involves budgets for:

• Administrative costs to develop, advertise, oversee and monitor the program.

• Vendor services for the program vendor (assuming use of existing turnkey program elements).

• Incentives for the installation of approved measures as demonstrated through t he provision of coupons collected and processed from the retail outlets.
The cost to participating customers is the customer’s share of the cost (c ost of product after the rebate).

Table 65. Estimated Five-Year Program Budget – Residential Rebate s Cost per Participant Year 1 Year 2 Year 3 Year 4 Year 5 5-Yr Total Percent of Total Fixed Program Costs Implementation & Other Annual Cost $20,000 $0 $0 $0 $0 $2 0,000 0% DSM Staffing $22,000 $22,000 $22,000 $22,000 $22,000 $110,000 2% Program Monitoring & Evaluation $10,000 $0 $100,000 $7,500 $80,000 $197,500 4% Variable Program Costs Incentives $11 $203,713 $475,330 $611,139 $814,852 $950,661 $3,055,6 95 65% Delivery & Other $5 $89,070 $207,830 $267,210 $356,280 $415,660 $1,336,050 28% Total Budget $344,783 $705,160 $1,000,349 $1,200,632 $1,468,321 $4,71 9,245 100.0%Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 90 

### Program 12. Residential Appliance Recycling This is an electricity savings program. The recycling program improve s the in-service technology mix for the service territory by removing energy hog appliances and deleting them from exi stence in an environmentally friendly way. Appliance recycling is available primarily through two nat ional program vendors, both of which bring the necessary environmentally sound technologies and procedures to the pr ogram.
This program targets households with second refrigerators or freezer s. The program will provide free refrigerator and or freezer pick up. The contractor will pick up, disable, and recycle the unit(s). Once Duke Energy receives verification that the refrigerator has been recycled, the custom er will receive a $30 incentive. This number is based on the amount offered by Nevada Power Company. 32



### Rationale This program targets residential customers with second refrigerat ors or freezers, preferably those older than 1997. The program is designed to take these inefficient older refrigerat ors off the market entirely, and to do so in an environmentally-sustainable manner. Duke Energy will pay a $30 incentive to e ach customer to help persuade them to get rid of the second refrigerator or freezer, and will also cov er the cost associated with removing the refrigerator or freezer and recycling its components. As a program option, ol d window AC units may also be picked up ($20 customer incentive) from homes in which a visit is scheduled to pic k up a refrigerator or a freezer. This option is now being developed by the firms that operate this type of program and may be explored with the
bidders.


### Participation and Measures Measures are shown below.

Table 66. Measures and Incentives – Residential Appliance Recycling
Measure Electric Measure Number Incentive Amount Refrigeration/Freezer Recycling RE-26 $30 Window AC Unit Recycling (Optional, may be developed, discuss with vendor) $20

32 The $30 incentive is based on the Nevada Power Comp any incentive, which has elicited a strong positive response from customers. Wisconsin Public Services offers a $50 i ncentive, but we believe Duke Energy's program will be successful with the lower incentive amount.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 91 Table 67. Estimated Participation and Savings – Residential Appliance Re cycling

151,970 1,150 0.2 0 Program Year Incremental

Participants Percent

Participation kWh Saved kW Saved CCF Saved Year 1 7,599

5.0% 8,738,850 1,417

- Year 2 9,118

6.0% 10,485,700 1,700

- Year 3 10,638

7.0% 12,233,700 1,983

- Year 4 12,158

8.0% 13,981,700 2,267

- Year 5 13,677

9.0% 15,728,550 2,550

- Cumulative 53,190

35.0% 61,168,500 9,917

- Potential Participants

Per participant gas savings (CCF): Per participant Savings (kWh): Per Participant Savings (kW):



### Marketing Plans This program will be marketed directly to consumers through bill inser ts, direct mailing materials, and through refrigerator distributors. The program will need to mail informati on to customers on a regular schedule (twice a year basis, or more frequently as needed to produce the desired participati on rates), and through point-of-purchase information at trade ally facilities. The two primary program ve ndors for this type of program are Appliance Recycling Centers of America, Inc. (ARCA) 33 and JACO Environmental, Inc. (JACO) 34

. 

### Program Tracking Considerations The program vendor will be required to supply a detail database sufficient t o demonstrate the age and condition of units picked up and also to demonstrate that the units are properly destroyed and re cycled. In addition, the database should be sufficient to supply data necessary for program evaluation.


### Detailed Budget Plans An estimated five-year budget for this program is provided below. The anti cipated cost to Duke Energy includes:

• Administrative costs to develop, advertise, oversee and monitor the program.

• Incentive payments to customers of $30.

• Contractor payment.
There are no costs to participating customers.

Table 68. Estimated Five-Year Program Budget – Residential Applian ce Recycling
Cost per Participant Year 1 Year 2 Year 3 Year 4 Year 5 5-Yr Total Percent of Total Fixed Program Costs Implementation & Other Annual Cost $20,000 $0 $0 $0 $0 $2 0,000 0% DSM Staffing $22,000 $22,000 $22,000 $22,000 $22,000 $110,000 1% Program Monitoring & Evaluation $10,000 $0 $100,000 $7,500 $80,000 $197,500 2% Variable Program Costs Incentives $165 $1,253,835 $1,504,470 $1,755,270 $2,006,070 $2,256, 705 $8,776,350 96% Delivery & Other $0 $0 $0 $0 $0 $0 $0 0% Total Budget $1,305,835 $1,526,470 $1,877,270 $2,035,570 $2,358,705 $ 9,103,850 100.0%

33 Appliance Recycling Centers of America, Inc. (ARCA ), 7400 Excelsior Blvd., Minneapolis, MN 55426 [952 -930-9000] [ www.arcainc.com ]. 34 JACO Environmental, Inc. (JACO), 7115 Larimer Road , Everett, WA 98208 [425-290-6291] [www.jacoinc.net ].Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 92 

### Program 13. Residential New Construction This is a gas and electricity energy saving, “beyond Energy Star” st rategy for new residential construction. Recent changes in Energy Star and the general success of Energy Star in improving the per formance of baseline (Non Energy Star) new homes have negatively affected the cost-effective ness of the standard Energy Star program. In the Energy Star program, there are many builder pathways (called Building Options Packages) to enable manufacturers to meet Energy Star criteria. Many Energy Star builder s, in order to be sure of meeting the Energy Star criterion, now build beyond it. From a utility perspective, supporting "beyond Ene rgy Star" homes is the only viable option to insure cost-effectiveness of this program element.
Energy Star homes are homes that are independently certified and are more e fficient, comfortable and durable than standard homes constructed according to local building codes. Energy Sta r homes feature additional insulation; better windows, doors and bath ventilation; and high efficiency appliances such a s furnaces, AC units, heat pumps, and water heaters. These improvements beyond current practice typically c ost home buyers a factor of two to three times the actual cost to builders for the energy efficiency improvem ents. This provides excellent leverage in an upstream program model that can provide something like two to three times the customer value for each dollar of upstream buy down.

The builder pathway indicated in the table above is an example taken from the set of possible pathways – builder options that that will produce a “beyond Energy Star” result. A package such as this is essential to keep the program cost-effective. The incremental cost of $3,000 per home plus a $400 ins pection fee in the illustrative measure package represents a generalized measure package.
Incentives for new residential buildings programs vary greatly acr oss utilities. For example, the Eugene Water and Electric Board (EWEB) provides incentives of $250 or $1,000, and other utiliti es in the Pacific Northwest states provide $1,000, $1,500, or $2,000. NYSERDA and Long Island Power Authority (LIPA) in New York pr ovide incentives from $750 to $3,500 to builders of Energy Star homes. New Hampshire utilit ies provide up to $3,000. Southern California Edison provides incentives up to $700, depending on climate zone.



### Rationale The Energy Star Plus program element is necessary due to the overall suc cess of the Energy Star concept. Baseline homes have become increasingly energy efficient, enough so that to mitigate the risk of not being cost-effective, program homes must be taken to a beyond Energy Star level of performance.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 93 

### Participation and Measures Measures are shown below.

Table 69. Measures and Incentives – Residential New Construction
Measure Number Measure Electric Gas Incentive Amount Energy Star Construction RE-25 $1,500 Energy Star Construction RG-31 $900 Inspection Service Fee $200
Note that the $1,500 incentive amount for electric Energy Star constructio n is a melded value (see discussion of this measure in the measure appendix).
Projected participation by year is shown in the table below.

Table 70. Estimated Participation and Savings - Residential New Constr uction

3,500 1,214 0.3 249 Program Year Incremental

Participants Percent

Participation kWh Saved kW Saved CCF Saved
Year 1 35

1.0% 42,490 10

8,724 Year 2 70

2.0% 84,980 21

17,449 Year 3 105

3.0% 127,470 31

26,173 Year 4 105

3.0% 127,470 31

26,173 Year 5 105

3.0% 127,470 31

26,173 Cumulative 420

2.4% 509,880 126

104,694 Per participant gas savings (CCF): Per Participant Savings (kW): Per participant Savings (kWh): Potential Participants



### Marketing Plans For beyond Energy Star homes, only the top income segments are likely to be effe ctively in the market for very energy efficient new homes. This is particularly so now with problems in m ortgage markets and general tightening of credit. The financial incentive is provided directly to homebuilders to help offset the additional cost to build an Energy Star home. This gives the incentive a multiplier of between two and t hree. This program element is a vendor delivered program requiring an experienced Energy Star program vendor. The program vendor provides all of the detailed knowledge and relationships to put the program in place with a r estricted set of measures to reach savings levels significantly beyond Energy Star using a set of builder opt ions packages. While the customer has higher first cost, the customer pays less for energy over the life of the home and on a life cycle basis comes out well ahead financially. The program vendor will also provide the establishe d channels to national builders, establish relationships with local builders, and will come supplied with all manner of promotional materials.
The key, according to the Texas Energy Star program is in promoting the val ue of the brand to builders who would like to differentiate their product. Marketing methods include:

• Newspaper and real estate guide ads

• SignageOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 94 • Marketing materials

• Builder and subcontractor training and ongoing technical assistance

• Training in the advantages of Energy Star homes for all the builders, sales staff, realtors, and the lending community.

• Seminars and literature targeted at consumers. This is a valuable a ddition to a marketing effort because consumers can create a market pull.

Key points to include in a beyond Energy Star program element are: 35

• Establish a single stable multi-year approach. This will give sta bility to builders and allow the program to grow more readily.

• Establish a single, simple, and high program standard of efficiency. This is important because it lets builders know where they stand and what is expected.

• Establish good relationships with area builders and developers.

• Ensure that staff professionalism, delivery systems, equipment, mark eting materials and quality assurance are all of high quality.

• Maintain strict adherence to specifications based on sound building science and economics to maintain program credibility and consistency.

• Establish a process for certifying and documenting homes built to requirem ents. 36

• Develop a solid infrastructure of experienced, well-known and respected orga nizations.

• Develop targeted incentives that are well coordinated with marketing an d other service-related materials.

• Coordinate with health and safety standards and codes for residential const ruction.

• Provide ongoing technical training for builders and subcontractors.

• Promote builders buy-in into the program by getting them financially invested i n the program through advertising, building requirements, and training so they will support all aspects of the program. 37

• New construction is an excellent area to review for strategic combinati on of gas and electric energy efficiency measures.



### Program Tracking Considerations As Energy Star homes, Energy Star Plus homes are certified by HERS rate rs, and Duke Energy will need to work with the HERS raters and the program vendor to establish a workable data tracking system. There are several models for this system, for example the “Dashboard” system developed by Par agon Consulting Services.


### Detailed Budget Plan An estimated five-year budget for this program is provided below. The anti cipated cost to Duke Energy for the beyond Energy Star program element involves costs for:

• Administrative costs to develop, oversee, and monitor the program. A vendor contrac t to market and deliver the new home program, including funding of HERS raters.

• Cooperative advertising budget as part of an inclusive marketing and promot ional budget.

• Incentives to be paid to the builder.
Costs to participating customers include the customer's outlay for any r emaining incremental cost of the Energy
Star Plus home.

35 Drawn from Vermont Energy Star Program, managed by Efficiency Vermont. 36 Texas Energy Star Program. 37 Texas Energy Star Program.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 95 Table 71. Estimated Five-Year Program Budget – Residential New Cons truction
Cost per Participant Year 1 Year 2 Year 3 Year 4 Year 5 5-Yr Total Percent of Total Fixed Program Costs Implementation & Other Annual Cost $10,000 $0 $0 $0 $0 $1 0,000 1% DSM Staffing $22,000 $22,000 $22,000 $22,000 $22,000 $110,000 12% Program Monitoring & Evaluation $15,000 $10,000 $60,000 $10,000 $60,000 $155,000 17% Variable Program Costs Incentives $960 $33,600 $67,200 $100,800 $100,800 $100,800 $403,200 4 5% Delivery & Other $500 $17,500 $35,000 $52,500 $52,500 $52,500 $210,000 24% Total Budget $98,100 $134,200 $235,300 $185,300 $235,300 $888,200 100. 0%Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 96 

### Program 14. Residential Solar Siting This is a gas and electric energy savings program. Passive solar d esign and orientation reduce a home's heating and cooling costs and makes the home more comfortable with better lighting and be tter internal temperature control. Here we focus on orientation (we include in the orientation shifting existing plans for windows to place more on the south side of the home and additional passive solar measures may be optionall y included). 38 This program differs from the others in that, in addition to assisting with solar siting of indivi dual homes, Duke Energy will work with local, county and state code authorities with the goal of inserting a prefere nce for solar siting into building codes. This provision would require consideration of solar siting, but would not make sola r siting mandatory. It would also remove all legal barriers to solar siting.



### Rationale Passive solar orientation places a home on the building site in such a way that the home takes full advantage of the sun's natural heat. With the long side of the home facing to the south, the struc ture will capture solar heat in the winter and block solar gain in the summer. 39 While there is no need to change the house design, moving windows to the home's south side will enhance its solar performance. If the south-fac ing window area reaches 8 to 10 percent of floor area, the home can be called "sun tempered." This is a n inexpensive way to gain a substantial and long term energy savings advantage. Design for shading is an important conside ration in this program.
A full-fledged "passive solar" home has south facing glass area of 15 to 20 perc ent of floor area. With this much glass, additional features must be added, such as thermal storage mas s and summer shading. Many builders choose to keep the project simple by sticking to the sun-tempered level.
Solar orientation, in itself, can reduce annual home heating costs by from 10 to 20 percent (extrapolating from a Bonneville Power Administration study for the Pacific Northwest), and, if the home also has air conditioning, reduce cooling costs similarly (based on California studies). If "sun tem pering" or fully passive solar improvements are also made, the savings increase. Also, people generally feel more "natural" and comfortable in a home that takes maximum advantage of natural lighting.
Costs for the solar orientation program element will also include st aff work with municipalities, counties and state
offices to work towards codes that remove all barriers to solar orie ntation, and require documentation of
builder/home owner consideration of solar orientation.

38 We expect that insuring solar orientation will lea d to most homes also increasingly adopting elements of passive solar design, however, for this program we assume only so lar orientation. 39 If, further, south-facing window area is at least ten percent of floor area, the home is "sun tempere d" resulting in higher energy efficiency. As a further step, a fully pass ive solar home will add thermal storage mass and su mmer shading, and special windows will be used.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 97 

### Participation and Measures Measures are shown below.
Table 72. Measures and Incentives – Residential Solar Siting
Measure Number Measures Electric Gas Incentive Amounts Inspection/Review Service Fee and Solar Orientation of New Homes RE-23 RG-32 100% (up to $500)
Work on local, county and state codes Internal staff work Internal staff

work 100% Duke Energy effort

Projected participation by year is shown in the table below.

Table 73. Estimated Participation and Savings – Residential Solar Siting

350 150 0.0 79

Program Year Incremental

Participants Percent

Participation kWh Saved kW Saved CCF Saved
Year 1 35

10.0% 5,250 1

2,755 Year 2 70

20.0% 10,500 3

5,510 Year 3 105

30.0% 15,750 4

8,265 Year 4 105

30.0% 15,750 4

8,265 Year 5 105

30.0% 15,750 4

8,265 Cumulative 420

24.0% 63,000 17

33,061 Per participant gas savings (CCF): Per Participant Savings (kW): Potential Participants Per participant Savings (kWh):



### Marketing Plans The solar orientation program element is targeted to all markets seg ments for which new housing is being constructed. Since we limit the focus to solar orientation (while expe cting this focus to also increase participation in other solar options), there is no new cost to the builder or buyer for this feature. The aim of the codes effort will be to have codes changed to require that builders and home buyers actively conside r the advantages of solar orientation in placement of homes on lots and to insure that local, county, and state codes remove all barriers to solar orientation. There are no substantial customer costs for orienting a home on a lot to take natural advantage of energy supplied freely by the Sun, though it is expected that once builders and home ow ners consider solar orientation, it will lead towards rapid adoption of "sun tempered" and fully passive solar designs. 

### Program Tracking Considerations For the solar orientation program element, a careful process evaluati on of the company's effort to improve municipal, county, and state codes will provide necessary documentation of effo rt. For individual homes affected by this program, there should be a certification as to proper solar siting, and of other aspects of passive design to the extent they are included.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 98 

### Detailed Budget Plans An estimated five-year budget for this program is provided below. The anti cipated cost to Duke Energy for the Solar Siting program element involves costs for:

• Administrative costs to develop, oversee, and monitor the program.

• Cooperative advertising budget as part of an inclusive marketing and promoti onal budget.

• Incentives

• Costs to work with municipal, county and state government codes organizations

.

Table 74. Estimated Five-Year Program Budget – Residential Solar Si ting
Cost per Participant Year 1 Year 2 Year 3 Year 4 Year 5 5-Yr Total Percent of Total Fixed Program Costs Implementation & Other Annual Cost $10,000 $0 $0 $0 $0 $1 0,000 2% DSM Staffing $22,000 $22,000 $22,000 $22,000 $22,000 $110,000 23% Program Monitoring & Evaluation $15,000 $10,000 $60,000 $10,000 $60,000 $155,000 32% Variable Program Costs Incentives $500 $17,500 $35,000 $52,500 $52,500 $52,500 $210,000 43% Delivery & Other $0 $0 $0 $0 $0 $0 $0 0% Total Budget $64,500 $67,000 $134,500 $84,500 $134,500 $485,000 100.0%Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 99 

### Program 15. Residential Low and Moderate Income Weatherization This is a gas and electric energy savings program. The program will s erve residential customers. There are two program elements, based on household income. The first program element is the R esidential Low Income Program which will serve customers up to an including 150 percent of the Federal Pover ty Level. It is modeled on the federal Weatherization Assistance Program (WAP). The second program element is to serve income limited households from 150 percent of the Federal Poverty Level to 80 percent of the stat e median household income (this is the upper limit of eligibility for public housing under federal Depar tment of Housing and Urban Development regulations). It is modeled on the "Gap" programs now implemented by many US e lectric and gas utilities to assist households with income deficiencies, but above the cut off level for low income programs. The two program elements will be identical except for the income cut offs to determine e ligibility.
It is expected that the homes served by these program elements will be pri marily single family owner-occupied homes and manufactured owner-occupied homes. However, and although the permission stru cture is different, and typically much less work can be done in a rental unit than in an owner-occupied hom e, we recommend that rules be developed for inclusion of apartments and rental units in this program.



### Rationale Low-income programs are different from traditional DSM programs. They are a special case in that they attempt to cover four objectives:

• Like other DSM programs, a core objective is to provide energy savings (D SM savings).

• Unlike other DSM programs, a second core objective is to provide repairs neces sary to install energy savings improvements in a part of the housing stock that is often old and subst andard in comparison to middle and upper income housing.

• Provide DSM service to customers who otherwise could not obtain DSM impr ovements due to cost.

• Due to problems with low-income housing stock, address health and safety concer ns.

For these reasons, the prevailing practice in the area of low-income programs is not to focus solely on the “California tests” traditionally used in DSM program review. 40 Instead, commissions have been adopting different

40 For low-income programs, program cost-effectivenes s is a lesser issue, although still an important ob jective. Because of their particular focus on the special needs of disa dvantaged households, low-income energy efficiency programs are generally not held to the same cost-effectiveness criteria as utility energy-efficiency “resource” programs (i.e ., they are not judged with a strict “total resource cost” test). More typically , the focus is on the magnitude of utility bill sav ings to participating customers,Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 100 tests for low-income programs. For example, the DC Commission uses an “Expanded A ll Ratepayers Test” incorporating several “non-energy benefits” for low-income programs. In C alifornia, if the benefit-cost ratio on the Total Resource Cost (TRC) test is 0.8 or above, the California commission us es a “Modified Participant Test” and Utility Cost Test that includes “non-energy benefits” for screening me asures for low-income programs. A measure is accepted into the program if it passes either test. Thus, the TRC test result for the Southern California Edison Low-Income Energy Management Assistance Program was 0.63 for 2004 and 0.61 for 2005. Sim ilarly, the TRC for Pacific Gas & Electric’s Low-Income Energy Partners Program w as 0.41 for 2004.


### Participation and Measures The types of weatherization measures to be offered are shown in the table below. This program is free to qualifying participants each year until funds are exhausted.

Table 75. Measures – Residential Low and Moderate Income Weatherization
Measure Number Measure Electric Gas Showerheads (2) and aerators (3) RE-36 RG-7 Wall insulation RE-21 RG-28 Ceiling insulation RE-16 RG-25 Refrigerator Charge & Duct Tune-Up RE-6 RG-27 House Seal RE-18 RG-26 WH Tank/Pipe Wrap and Temp Set RE-35 RG-6 Programmable Thermostat RE-15 RG-18 Compact Fluorescent Lights (12) RE-32 Note: Measures above are illustrative. It is expe cted that the program will adopt the measure list of the Ohio WAP program.
For developing participation, the Low Income program limit of 150 percent of the Federal Poverty Level has been retained for the new program to facilitate compatibility and cost shari ng with the Ohio Weatherization Assistance Program. 41 However, consistent with the direction of current practice, the upper li mit for the Moderate Income Weatherization Assistance Program is 80 percent of median household inc ome. This conforms closely to the Department of Housing & Urban Development upper limit of low income used to det ermine eligibility for public housing. 42

rather than the utility system avoided energy suppl y costs. Also, low-income programs often include b roader “non-energy benefits” (NEBs) such as lowered credit and collect ion costs and avoided bad debt for the utility, and improved health and safety for customers. See: Kushler, Martin, Dan Yo rk & Patti Witte, “Meeting Essential Needs: The Res ults of a National Search for Exemplary Utility-Funded Low-Income Ener gy Efficiency Programs.” Washington, DC: American Council for an Energy-Efficient Economy, Report Number U053, Septe mber 2005. 41 For methods and advantages of cost coordination, s ee Hill, Lawrence J. & Marilyn A. Brown, “Estimatin g the CostEffectiveness of Coordinated DSM Programs.” Evaluation Review , Vol. 19 No. 2, April 1995, Pp. 181-196. 42 The federal poverty metric, though updated using t he Consumer Price Index each year, is a corrupted m etric that is based on wildly inaccurate assumptions regarding household c omposition, availability of foodstuffs, and overloo ks significant household costs. Replacing the poverty metric, many states r ely at least in part on percentages of median incom e. The best metric of income insufficiency is developed using the family budget study method, developed by Wider Opportuniti es for Women and the Ford Foundation. Using the Department of Housi ng and Urban Development definition of low income ( 80% of median income) rather than the Department of Health and Hu man Services definition (60% of median income) goes a long way towards making the eligibility criterion reflect th e material reality of household economic situations today.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 101 Table 76. Estimated Participation and Savings - Residential Low and Mod erate Income Weatherization

243,458 1,591 0.5 94 Program Year Incremental

Participants Percent

Participation kWh Saved kW Saved CCF Saved
Year 1 608

0.2% 967,328 276

57,432 Year 2 730

0.3% 1,161,430 331

68,956 Year 3 852

0.3% 1,355,532 387

80,480 Year 4 852

0.3% 1,355,532 387

80,480 Year 5 852

0.3% 1,355,532 387

80,480 Cumulative 3,894

1.6% 6,195,354 1,768

367,830 Per participant gas savings (CCF): Per Participant Savings (kW): Potential Participants Per participant Savings (kWh):



### Marketing Plans Marketing for this program is expected to be coordinated with the stat e weatherization program, which already has outreach activity through the sub-grantee agencies. The number of progra m slots to be allocated to the Moderate Income program is expected to be a matter for continuing decision as economic condit ions change. It is very important to have the capability to serve electrically heated homes a bove the 150 percent of poverty level since the federal poverty measurement system is systematically off by a factor of approximately two, and the situation of a home somewhat above the 150 percent cut off may easily be more difficult than a home just below the 150 percent cut off. The assignment of slots between the Low Income and Moderate Income prog rams is likely to depend on circumstances that will develop and change. Care will need to be taken to t ry to insure that the programs are not over-subscribed in any given year.

• The delivery contractor will be responsible for recruitment, taking into account referrals from Duke Energy.

• Proposed marketing efforts include the use of utility bill stuffers for customer education, and mention of the program in communications with customers regarding energy efficiency pr ogram options.

• Customer relations and collections staff will be trained to refer e lectric heat customers if they are within the income range and enquire about weatherization or experience payment problem s.


### Program Tracking Considerations Data collection and documentation for program purposes and annual reporting wil l require a tracking system. The selected delivery contractor will be requested to carry out most of the data entry for this system.


### Detailed Budget Plans An estimated five-year budget for this program is provided below. Costs to participating customers will be customer’s time and permitting access to the home for improvements. As w ith the current low-income programs, attempts should be made to coordinate with Ohio WAP for program delivery and cost sharing.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 102 Table 77. Estimated Five-Year Program Budget – Residential Low and Moderate Income Weatherization
Cost per Participant Year 1 Year 2 Year 3 Year 4 Year 5 5-Yr Total Percent of Total Fixed Program Costs Implementation & Other Annual Cost $20,000 $0 $0 $0 $0 $2 0,000 0% DSM Staffing $22,000 $22,000 $22,000 $22,000 $22,000 $110,000 1% Program Monitoring & Evaluation $10,000 $10,000 $85,000 $10,000 $90,000 $205,000 2% Variable Program Costs Incentives $1,004 $610,675 $733,212 $855,749 $855,749 $855,749 $3,91 1,134 33% Delivery & Other $2,000 $1,216,000 $1,460,000 $1,704,000 $1,704,000 $1,70 4,000 $7,788,000 65% Total Budget $1,878,675 $2,225,212 $2,666,749 $2,591,749 $2,671,749 $ 12,034,134 100.0%Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 103 

## PROGRAM COST EFFECTIVENESS

Program cost effectiveness analysis answers the question of would we be better off with the DSM program compared to not having the program. The answer almost always depends on who is ask ing the question. In other words, better off from whose perspective? Standard DSM cost effectiveness analysis includes five perspectives that will be addressed in this report:

• Total Resource Cost (TRC)

• Societal (a variant of the TRC)

• Participant

• Ratepayer Impact (RIM)

• Utility Cost (also known as Administrator Cost)
We used DSMore software from Integral Analytics to compute each of t he tests listed above. A detailed discussion of cost effectiveness methodology, including the standard tests liste d above, is included in Appendix B. In this section, we present the results of the cost effectiveness analys is beginning with a discussion of assumptions. Cost effectiveness results are then presented for each perspective an d DSM program.


### Expected Program Costs Program budgets over the first five years of program activity are shown for each program in the DSM Programs section. We recommend a minimum of five years for program implementati on and tuning for maximum effectiveness. Program budgets include the cost of incentives and other program specific expenses including evaluation. They also include costs for fully loaded program staffing , administration and DSM related overhead.

Fully loaded staffing costs were calculated using assumptions regarding FTE required for program administration multiplied by the cost per FTE. A weighted average cost per FTE of $88,000 was calculated assuming a 4-to-1 ratio of support to managerial labor requirements. Fully loaded labor cost assum ptions of $80,000 for support and $120,000 for managerial staff were used in the calculation.

The program budgets presented in this report include all program-specific f ixed and variable expenses paid by the program administrator. It is important to understand that actual expendit ures will vary from planned expenditures in their timing and distribution between specific DSM programs. For this re ason it is important for the program administrator to have flexibility in the administration of DSM progr am funding without having to obtain approval from the Public Utility Commission.

We recommend that flexibility include the following:

• Roll over unspent funds within program budgets at end-of-year to categories w ithin the same program in the next year.

• Reallocate program funds across line items within a program.

• Shift up to 25 percent of total budget among approved programs at any time within a pr ogram year. Having some flexibility in the administration of program funding will assi st in the management of programs and
enable staff to fine tune efforts for maximum resource effectivenes s.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 104 

### Miscellaneous Program Assumptions Energy savings expected from the program are based on the designs and assumptions pre sented earlier in this report. Key assumptions affecting the annual savings and program cost ef fectiveness are shown in Table 80 on page 108. Most of the items listed in Table 80 were addressed in the DSM Pr ograms section. The savings life is calculated from the life of individual measures weighted by program saving s and represents the duration of energy savings flowing from a participant in the program. The net-to-gross ratio captures the effect of free-riders, participants in the program who would have installed the energy efficient measures without the program. Higher ratios imply a lower rate of free-riders in the program.



### Avoided Costs The avoided or marginal cost associated with a reduction in energy and demand is of primary importance when evaluating the cost effectiveness of DSM programs. These costs repres ent the value of avoided electric and gas loads. Duke Energy’s avoided costs are the reduction in the cost of supply c ompared to what it would have been without the reduction in loads and include all incremental energy, transmiss ion and distribution costs as well as the cost of avoided capacity. These costs vary by time of day and month. We used the assumptions embedded in DSMore to capture this variance, along with the hourly savings profile w e constructed for each program from our modeling efforts.


### Cost Effectiveness Results In this section, we present the findings of the cost effectiveness analys is which provides a systematic comparison of the program benefits and costs discussed in previous sections. Results are shown for the five perspectives mentioned at the beginning of this section.

The Societal and TRC perspectives are the broadest of the cost effectiv eness tests. As the name implies, TRC shows the total cost of the resource relative to supply side resources. Sin ce environmental externalities were not considered, the TRC and Societal only differ with respect to tax credi ts paid to the participant. Such credits lower the TRC but are considered a transfer payment from the perspective of the Societal Test. The Participant Test shows the economics of program participation from the participant’s perspect ive and reflects benefits from lower bills and incentive payments. Elements of program design, such as incentive pa yments, can greatly impact participant economics. For most programs the lost revenue calculation in the RIM Test exceeds the avoided cost of supply causing the programs to fail the RIM Test. The Utility Cost Te st reveals that when only costs paid by the program administrator are considered, the cost of the acquired resource is generally lower than the TRC unless the utility pays for the full cost of installation. From a TRC perspectiv e, all but three of the programs are cost effective.


### Other Assumptions Free-riders, program participants who would have installed the measure wit hout the program, are measured through the net-to-gross ratio. A ratio of 1.0 assumes no free-riders. Most programs assume 5 to 10 percent free-riders, netto-gross ratios of 0.95 to 0.90, respectively. These assumptions are based on subje ctive professional opinion.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 105 Accurate estimates are beyond the scope of this study and involve spe cialized research that can cost several hundred-thousand dollars. There is debate over the appropriateness of includi ng free-riders without also including free-drivers, an opposite and offsetting impact. 

### Currently Recommended Programs We initially formulated our slate of DSM programs from the results of our market assessment, a review of best practices and our own experience. All programs turned out to be cost effective except for the Renewables and
Demonstrations and the Residential Low and Moderate Income Weatherizati on programs. Both of these programs are recommended despite the cost effectiveness results.
We have chosen to recommend a Renewables and Demonstrations program beca use the solar potential has been demonstrated in this report to represent a large energy resource that could be tapped into to meet a significant amount of future demand. The solar resource is also technically mature and readily deployable. These and other issues that go beyond the scope of this report argue for a Renewables and Demonstrations program. Also, conditions may change in the future which cause solar or other renewable technolog ies to become cost effective.
Our recommendation is to implement all of the programs included in this re port. These programs are listed below:
Commercial and Industrial Peak Reduction Residentia l Peak Reduction Renewables and Demonstrations Residential Whole Hou se Commercial and Industrial Incentives Residential R ebates Commercial and Industrial Rebates Residential Appli ance Recycling Commercial and Industrial Retro-Commissioning Lite Residential New Construction Commercial and Industrial HVAC Optimization Residen tial Solar Siting Commercial and Industrial Audit Residential Low and Moderate Income Weatherization Commercial and Industrial New Construction

The budget and savings impacts of recommended programs are provided in Table 78.

Table 78. Energy Savings and Annual Budget for Recommended Programs

Year Cumulative kWh Savings (millions) Cumulative

MMCF Savings Program Budget

(millions $) Cost per

Customer Percent of

Revenue 1 65.2 26.0 $ 16.18 $ 23.58 0.7% 2 177.0 79.0 $ 24.14 $ 34.85 1.0% 3 318.9 170.3 $ 30.81 $ 44.03 1.3 % 4 492.7 295.0 $ 35.72 $ 50.54 1.5 % 5 684.2 463.7 $ 39.72 $ 55.64 1.6 %
Recommended programs result in an overall TRC benefit-cost ratio of 2.3 incl uding direct and indirect program expenses and are expected to achieve 684 million kWh and 464 MMCF in annual savings af ter five years of operation. The annual budget for recommended programs increases with program i mplementation efforts, reaching $40 million in Year 5. Spending on recommended programs reaches $56 per customer and 1.6 percent of total annual revenue in program Year 5. These figures include direct and indirect pr ogram expenses.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 106 The first five years of program operations are estimated to generate $215 million of NPV over the life of the savings using the TRC perspective, approximately $19 million on an annual basis. 43 This includes indirect program expenses that support the overall DSM effort but were not included in the prog ram specific cost effectiveness analysis. For example, program databases for tracking all programs typi cally require initial and on-going development expenditures. We estimate that annual expenditures of approxima tely $650,000 should be allotted for the following types of expenses:

• School energy education program (educational work in schools with students, includi ng provision of kits) ($100,000)

• Computer systems development, including household energy audit capability ($150 ,000)

• Program research and development ( $50,000)

• Staff development and professional organizations ($200,000)

• Certification of two staff in evaluation

• Attendance at various professional conferences and training seminars

• Membership in CEE and E-Source

• Umbrella DSM Marketing and Customer Awareness ($150,000)
The portfolio cost-effectiveness reported above includes these general D SM expenses in the results.
Demand side management spending and savings information reported to the Energy I nformation Administration (EIA) is shown in Table 79 for utilities with between 200,000 to 1,000,000 customers. S pending levels reported for 2005 have been adjusted to 2007 dollars. The results show a wide range of spending and s avings. Spending per customer ranges from less than $1 to over $90 on the high end. When expressed as a per cent of revenue, DSM spending ranges from less than one-tenth of a percent to over 4 percent. Energy savings ranges from two-tenths of a percent of kWh sales to over 10 percent. The spending levels per customer recommended in this action plan are higher than the average spending per customer reported in Table 79 but well w ithin the range of spending.

43 The NPV for the portfolio of programs is calculate d by summing the NPV of recommended programs shown in Table 81 and subtracting indirect program expenses. Dividing th e result by the weighted life of recommended progra ms (14.9 years) yields an estimate of NPV on an annual basis.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 107 Table 79. Comparison of DSM Program Spending and Savings

Name of Utility Ownership DSM Spending per Customer kWh Saved as

% kWh Sales DSM Spending

as % Revenue El Paso Electric Company Investor Owned 0.39 0.2 0. 0 Aquila Inc Investor Owned 0.46 0.0 0.0 Cincinnati Gas & Electric Company Investor Owned 0. 98 0.9 0.0 Pennsylvania Electric Co Investor Owned 3.44 0.1 0. 2 Metropolitan Edison Co Investor Owned 3.78 0.0 0.2 Colorado Springs City of Municipal 4.41 0.4 0.3 Entergy Gulf States Inc Investor Owned 4.85 0.0 0.1 Tucson Electric Power Co Investor Owned 4.92 1.1 0. 2 Salt River Project Political Subdivision 5.75 0.5 0.3 Kentucky Utilities Co Investor Owned 6.39 0.2 0.3 Indianapolis Power & Light Co Investor Owned 7.46 0 .3 0.4 San Antonio City of Municipal 7.62 0.1 0.3 PSI Energy Inc Investor Owned 8.00 1.5 0.4 Southwestern Public Service Co Investor Owned 8.69 0.4 0.3 Sierra Pacific Power Co Investor Owned 9.90 0.4 0.3 Central Maine Power Co Investor Owned 12.10 0.1 1.6 Omaha Public Power District Political Subdivision 12.15 0.1 0.7 Louisville Gas & Electric Co Investor Owned 12.41 0 .5 0.7 Avista Corp Investor Owned 14.30 9.4 0.9 Nevada Power Company Investor Owned 15.10 0.9 0.6 Idaho Power Co Investor Owned 15.81 1.3 1.0 NorthWestern Energy LLC Investor Owned 18.74 4.5 1. 2 Commonwealth Electric Co Investor Owned 20.06 5.5 1 .5 Wisconsin Power & Light Co Investor Owned 22.13 3.6 1.1 Northern States Power Co Investor Owned 22.35 5.1 1 .3 Tampa Electric Co Investor Owned 25.96 3.1 0.9 Gulf Power Co Investor Owned 26.66 5.4 1.2 Public Service Co of NH Investor Owned 32.37 2.8 1. 4 Hawaiian Electric Co Inc Investor Owned 33.58 0.4 0 .8 Narragansett Electric Co Investor Owned 38.66 6.4 1 .9 MidAmerican Energy Co Investor Owned 39.91 2.4 2.0 Sacramento Municipal Util Dist Political Subdivisio n 40.23 10.7 2.1 Austin Energy Municipal 50.99 4.8 2.0 Seattle City of Municipal 55.26 9.3 3.5 Western Massachusetts Elec Co Investor Owned 55.96 8.5 2.8 Boston Edison Co Investor Owned 62.88 8.5 2.3 United Illuminating Co Investor Owned 80.06 9.0 3.2 Interstate Power and Light Co Investor Owned 92.73 2.6 4.1 Average 23.09 2.92 1.11 Note: Values are for total residential and commerc ial customers at utilities with 200,000 to 1,000,00 0 customers. Source: US DOE Energy Information Administration F orm 861Ohio Market Potential Study for Demand Side Management Programs Final ReportFebruary 9, 2009Page 108Table 80. Program AssumptionsProgram #123456789101112131415Program NameC&I PeakReductionRes PeakReductionRenewables &DemonstrationC&IIncentivesC&IRebatesC&I RetroComm. LiteC&I HVACOptimization C&I AuditC&I NewConstructionRes WholeHouseResRebatesRes ApplianceRecycleRes NewConstructionRes SolarSitingRes Low &ModerateIncomeElectric savings (kWh)0 0 3,488 173,100 25,937 15,236 11,234 16,044 48,862 485 331 1,150 1,214 150 1,591Gas Savings (CCF)0 0 10 2,915 -225 632 463 187 798 19 -2 0 249 79 94Installed incremental cost $250 $250 $10,600 $47,520 $9,000 $3,000 $2,274 $1,895 $24,708 $103 $35 $165 $3,000 $500 $1,004Savings life (years)15.0 15.0 32.9 10.0 18.9 5.0 5.0 5.3 25.0 11.5 4.2 5.0 25.0 25.015.6Net to gross ratio1.00 1.00 1.00 0.75 0.80 0.90 0.80 0.95 0.95 0.75 0.85 0.85 1.00 1.00 1.00Incentives$250 $25 $8,530 $28,510 $5,100 $1,500 $570 $950 $12,350 $69 $11 $165 $960 $500 $1,004Tax Credits$0 $0 $2,340 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Participant Cost after Incentives and Tax Credits$0$0$0$19,010$3,900$1,500$1,704$945$12,358$34$23$0$2,040$0$0Table 81. Program Cost Effectiveness ResultsProgram number:123456789101112131415C&I PeakReductionRes PeakReductionRenewables &DemonstrationC&IIncentivesC&IRebatesC&I RetroComm. LiteC&I HVACOptimizationC&I AuditC&I NewConstructionRes WholeHouseResRebatesResApplianceRecycleRes NewConstructionRes SolarSitingRes Low &ModerateIncomeB/C Ratio (Cost Based - Normal Weather)Utility Test9.69 4.17 0.15 1.61 2.57 4.87 7.51 3.15 4.61 3.97 3.40 1.58 4.55 2.92 0.87TRC Test19.35 5.03 0.15 1.38 1.84 2.79 2.64 2.12 2.80 3.67 1.68 1.84 2.32 2.92 0.87RIM Test3.24 1.99 0.13 0.66 0.72 0.90 0.95 0.81 1.07 0.81 0.65 0.53 1.18 1.20 0.48Societal Test21.96 6.04 0.22 1.60 2.37 3.06 2.95 2.32 4.43 4.27 1.83 1.94 3.83 5.02 1.06Participant Test9.67 2.60 1.56 2.26 1.93 2.95 2.55 3.04 1.80 4.43 2.67 3.57 1.35 2.85 2.72Recommended Program? (0=No / 1=Yes) 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 109 

## PROGRAM EVALUATION

Program evaluation has to be scaled to meet the size of the programs to be evaluated and the information needs of the company, the Commission, and of other parties likely to be interested in p rogram results. Duke Energy Ohio might want to consider a continuing collaborative or stakeholder advisor y group to follow program implementation and to receive and discuss ongoing evaluation reports. Such groups help surface issues prior to formal regulatory review of evaluation results and can help structure a stable transiti on along the DSM cycle from program planning through program implementation and evaluation, and then back through program planning and a new cycle of DSM and DR programs.
Across the US today, there are currently very different perspecti ves on the appropriate level of effort for DSM process evaluation and DSM impact evaluation. Process evaluation documents p rogram implementation, conformance of the program as actually implemented with the program plan, b arriers to implementation that are encountered (and how they are dealt with), and tells the story of program de livery. It can also provide intelligence that is useful in modifying a program to move it forward towards its goals. Impac t evaluation provides quantitative assessment of results in terms of conserved kWh, conserved therms, and reduced demand (kW). Some, generally east of the Mississippi, now say that evaluation effort should be 80 percent on impact and 20 percent on process evaluation, retaining the "hard results" emphasis of the 1980s and early 1990s D SM. Some argue that these percentages should be reversed, moving towards development of "soft" intelli gence to advanced the programs. These different perspectives are linked to two paradigms for understandi ng DSM/DR programs, and are briefly discussed in this section of the report. However, regardless of the mer its of the two perspectives, we recommend for Ohio that a focus on impact evaluation is more appropriate for this firs t (start-up) DSM cycle.
As a first DSM cycle is begun, impact evaluation must be given a priorit y over process evaluation so that quantitative results are available on a timely basis to document energ y and demand achievements, provide the necessary basis for calculating actual cost-effectiveness of prog rams, and demonstrate the soundness of program effort and results to justify full cost recovery. At the same t ime, process evaluation can also be quite useful for early detection of variance of program operation from program plans, for docume ntation of barriers encountered by programs, and for providing both early warning of problems and the ability to respond quic kly to fix problems before they become major. 

### Approaches to Program Evaluation Throughout the 1980's DSM program evaluation was fairly simple. In the early to m id-1990's DSM evaluation became much more abstract and complex as more emphasis and larger investment s were made, especially in expanding methods of impact evaluation and determination of elaborate inputs for assessing free-riders, freedrivers, and net-to-gross ratios. In some respects this elaboration of eva luation can be viewed as an example of over-elaboration and over-spending on evaluation, trying to develop precise answer s to questions that might haveOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 110 been better left unasked or simply discussed verbally and stipulated i n advance, given the wide variance in results due to underlying assumptions.
When the utility industry largely retreated from serious DSM programs in order to prepare for the years of deregulation, and during the turmoil of cutbacks and restructuring of the dereg ulation era, evaluation continued to develop in California, the Northeastern states, and the Pacific Northwest w here DSM efforts continued. As we return to serious DSM effort across the nation, we come back to a somewhat d ifferent context than was left in the older DSM effort (that ended in the emergence of deregulation).

In states such as California, Iowa, and Nevada there has been a recent turn of emphasis toward gross energy savings
rather than net energy savings , as the drivers for DSM have shifted away from the least cost planning par adigm of the 1980s to the "green" and "mitigation of global warming" paradigm of today. W here this movement appears to be going is towards much less concern with free-riders, free-drivers, and net -to-gross ratios. Instead the focus is on attaining physical changes of certain magnitudes (gross, not net energy sa vings), where the cooperative efforts of the US Environmental Protection Administration, the US Department of Energ y, big box stores, state energy offices, and others are seen as welcome leverage toward accomplishment of physical goals rather than (to be netted out) as factors that detract from utility DSM cost recovery. The "green" and "mitigation of global warming" paradigm has an apocalyptic flavor -- the goal is to accomplish definite physi cal results by certain targets, all sectors of society are expected to cooperate in attainment of the targe ts, and the effort is more similar to the model of wartime mobilization of production during World War II (think of the War P roduction Board) than to the
economic model of the 1980s California Cost Tests. The vision is wider tha n the narrow model offered by the Total Resource Cost test (TRC), and in this way of looking at the world, the cost of failure is not reduced cost recovery but editing of societal health, welfare, and survival in a stark Da rwinist sense. 44

It is important to recognize that the leading edge of thought in the area of D SM program design and evaluation is moving on toward the "green" and "mitigation of global warming" paradigm, and to participate in this discussion. However, a first DSM program and evaluation cycle is not the place to vig orously incorporate this paradigm change. By the second or third cycle, parties will be thoroughly familiar w ith the different perspectives and will have gained a practical sense of program effects -- if the new ("Plan C ") paradigm appears relevant and viable at that point in time, it is the likely direction to go at that time.
It is also unlikely that regulators will be ready to move to the new ("Pla n C") paradigm quickly. 45 If there is to be a movement in the Midwest toward the new paradigm, it should be done carefully and c ooperatively with state commissions and other concerned parties, step by step, as it seems authentic a nd reasonable to do so. While we need to recognize where leading program design and evaluation thinking are going, t he first DSM cycle evaluation

44 This is the perspective of advocates of the so-cal led "Plan C." 45 In Plan C, a carbon adder in the range of $30-$35 would be added to the cost test, and a typical prog ram would be ramped to achieve 70%-80% energy savings. It is likely that government funding would be added to the utility fu nding mix outside the cost test.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 111 should be guided by the old California Cost Tests, and in particular the Total Re source Cost test (TRC) and the
Societal Test. 46



### Evaluation Work Plans Independent evaluators are generally engaged through issuance of Requests for Proposals (RFPs). The discussion below provides a summary of the recommended DSM Monitoring & Verificati on (M&V) plans for each DSM Program. These are not complete plans, but they outline the type of M&V commit ment that will be required to conservatively demonstrate results with high confidence and to meet indust ry practice standards using the traditional paradigm of the California Cost Tests and the framewor k developed for integrated resource planning.
When an evaluation RFP is issued, the bidders will reply with proposals. T he proposals are essentially draft evaluation work plans that try to meet the terms of the RFP and the subst antive requirements for evaluation. Once an evaluation firm is selected, the typical first billable activit y is a "kick-off" meeting with the key utility managers and staff (and the collaborative or stakeholder advisory group, if there is one), followed by a redesign of the evaluation work plan by the evaluation team to take into account informati on provided by the utility and any changes in program goals, administration, timing, and regulatory direction.
As a practical matter, we recommend that instead of a single initial Work Plan covering the full first program cycle, evaluation planning be approached in a staged manner with certain key decisions made up front about how each program evaluation will be approached over the entire contract period. Det ailed planning would be only through the end of the first program year and the evaluation reports based on the fir st program year evaluation. The reason for this recommendation is that the programs and the policy environment for a first program cycle are still evolving. The evaluation consultant can then, under company (and collaborative, if there i s one) direction, make a similar detailed program for each subsequent year.



### Evaluation Work Plan Template (for each program) The following elements should be requested from the selected evaluati on team for each program to be evaluated: (1) Approach -- What is the general evaluation approach for the program (general discussion of evaluation approach, including research objectives, researchable questions, methodol ogical framework, and highlevel schedule)? (2) Verification—In a new DSM effort contractor staff may not be initially up to s peed, so a essential responsibility to protect ratepayer dollars will be to insure that the right measures are installed, that they are properly installed, that there are no obvious “lost opportunities” (for e xample where a door sweep is installed but a broken window is not repaired). While much of this responsibil ity can be placed on contractors (see point 11 in this list for QA/QC), there is also a key r ole for the evaluator in inspecting contractor reported installations (for example, if a contractor reports replacing eighty-five ceiling lights in a supermarket, there should be an opportunity for the supermarket to appear in a random sample for which the evaluation verifies the bulb count and insures they are still i n place). (3) Impact evaluation -- How will first year gross energy savings and gr oss demand reduction values be determined? If a deeming process is proposed for the first year, how will the process be carried out and when will results be available?

46 These are defined elsewhere in this report.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 112 (4) Free-riders/Drivers and Net-to-Gross -- How will NTG be assessed for this program for the first program year? How will data gathering for NTG be scheduled for the firs t program year, and when will results be available? Will the evaluation team research and develop de emed values for per unit kWh, therms, and kW for use the first year, or until actual measurements can be c ompleted? Will the evaluation team's plan for development of deemed results include revie w of regional results from neighboring jurisdictions? If the California DEER database or values us ed in the Pacific Northwest or the Northeast are used, will they be adjusted, and if so, how? Note that DEER values, while appropriate for California are inherently suspect elsewhere particularly in st ates that do not have a thirty year record of ever intensifying building codes. DEER values are likely to be too low. (5) Baseline -- What kind of market baseline will be established for thi s program? What approach will be used? When will a market baseline be completed? (6) Metrics -- What are the metrics to be collected for the program? (7) Tracking System -- When will the program vendor's tracking system be r eviewed? When will a report on the program vendor's tracking system for the program be ready? (8) Budget -- what is the planned evaluation budget for each year? Demonstrate that the total across programs is within the spending cap for the evaluation effort. How does the e valuation budget for this program fit as part of the total evaluation budget, and what criteria are used to allocate evaluation budget among program evaluations? (9) Jobs -- How will the evaluation track job creation associated with the program? What is the count of jobs created directly by hiring people to work on the program and the evaluation? W hat is the count on persons from out-of-state who are assigned to a base in the service territ ory? Which jobs (and percentage of personnel expenditure) will be filled from staff and new hire s in Ohio outside Ohio? What classification system should be used? When will a report on jobs be ava ilable? Note that this is not proposed as a sophisticated or broad based economic impact study. (10) Program Theory -- What is the program theory for this program? When will a program theory and logic model be available? (11) QA/QC -- How is quality control and/or quality assurance implemented for t his program? When will a report program on QA/QC be available? (12) Process Evaluation -- What will be the approach to process evaluation for thi s program? What will be the elements of the process evaluation? When will the process evaluat ion be completed? (13) Reporting -- How will monthly or quarterly reporting of work in progress, goal s and results, barriers encountered, changes in program and/or evaluation direction be reported? Month ly and/or quarterly evaluation reporting should be uniform across programs. (14) Year One Details for each program (Note that the details could be in a s eparate section of the Evaluation Work Plan, or be collected in a separate document).

a. Specific tasks and sub-tasks b. Detailed schedules

c. Detailed discussion of sampling, data collection, data cleaning, and analys is methods d. Project and management milestones

e. Identification of staff resources f. Detailed cost breakdowns g. Dates of deliverables (15) Evaluators may see some commonalities and opportunities for evaluatio n work across certain programs. "Cross-cutting" evaluation work plans should be welcomed if they appear r easonable and workable. (16) A factor to watch as DSM activity radically increases in the US is the resumes of persons assigned to tasks to insure that key consultant leadership roles are filled by cons ultant staff with the seasoned program and program evaluation backgrounds desired. If a bid comes in where some of the proposed task leaders do not appear to have the necessary experience, call the bidde r and also that those positions be changed out for the consultant's senior staff.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 113 

### Evaluation Budget In the recommended program budget for each program, evaluation costs are shown for each year, with the costs quite different from year to year. Generally, it is difficult to get a solid evaluation of a DSM program for under $80,000, though in some cases evaluation costs have been lowered to fit better with num ber of cases served by a program. Also, evaluation works best if the evaluator is on-board when the prog rams begin. The pattern in the budget tables permits evaluator involvement beginning as the first program year begins, with two full scale evaluation reports of the five-year program cycle – one towards the middle of the cycle and one at the end. While
in the earlier DSM era it was common to select different evaluator s for different programs, it is suggested that the RFP for evaluation permit evaluators to propose which programs they will e valuate. This would result in the selection of one or two evaluation teams to cover all programs. This gives the evaluator(s) the ability to work across program evaluation budgets and will yield a more even, efficient, a nd more capable evaluator involvement.


### Program 1. Commercial and Industrial Peak Reduction Load control programs, particularly direct load control programs are sel f-documenting every time a load event is called. The basic level evaluation for a Direct Load Control, Demand Reducti on (DR), program is an engineering review. Often an engineering review is sufficient. In the engineering rev iew, the evaluation will produce load shape impacts for selected curtailment events, and curtailment even ts will be interpreted with reference to Duke Energy Ohio's load duration curve. The evaluation will include referenc e to the company's internal load control planning and will recommend, if economic, further ramp up in load control programs.
A second level of evaluation is provided by analytic study of customer data usi ng regression analysis. Sometimes this is seen as a detailed engineering review (particularly if the pers ons conducting both analyses are engineers) and sometimes it is seen as a separate quantitative analysis that goes beyond the engineering review (the second level analysis is often carried out by evaluators who have a background in business analysis, social sciences, or mathematics and statistics). The primary goal of the impact evaluat ion effort is the estimation of demand reductions during load control events. Depending on the metering options available , this may be based on samples or on complete data. As with all evaluations, it is very important to esta blish baseline conditions (for this program, the absence of a load event) so that the program produced and "no program" resul ts can be contrasted to demonstrate the quantitative program effect(s).
Typically for evaluation of a DR program, the evaluator will build a dat aset of hourly load data for a sample (or all cases, if metering is available) of program participants over a def ined monitoring period. This hourly data is combined with hourly weather data to estimate load shapes at different temperatures. Load shapes from typical days are then compared with load shapes from load event days. This data is then analyzed in a regression analysis in which the measured hourly kW load is the dependent variable. The regressi on controls for weather and other conditions so as to provide a clean contrast of expected customer load at a g iven hour under the "no program" alternative with the customer load under program conditions when a load ev ent is called. Analysis is on a per customer level, so can be scaled to estimate effects from a sample to a population or to estimate the effects ofOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 114 different levels of increased participation, using assumptions about the r emaining portions of the target markets that could be recruited into the program.
Generally, it is reasonable to assume a 100 percent net-to-gross ratio in D R projects because there is no reason for the customer to reduce load at the time of a load event, except that the eve nt is called and the customer is a participant in the program: there are no free-riders . Also, spillover may occur, but it is generally more reasonable to consider spillover to be zero for most DR programs (unless the program desi gn is specially oriented to create spillover) than to spend any dollars on evaluation to determine a quantitative value for spillover. The use of freerider, free-driver, and net-to-gross assumptions of this kind is typical ly best discussed with and, if possible, cleared by the commission in advance so there is no surprise if a DR evaluation intr oduces these assumptions in place of spending dollars on a measurement effort to develop estimates of free-ride rs and free-drivers.
Data gathering for this type of analysis is projected to be based on the use of whole building demand meters or the use of data loggers on specific equipment. The company will have its own pref erred equipment, but generically, this is a “smart grid” application. Duke Energy will have to decide whether to use one-way or two-way communications. Due to the importance of load control, programs in this area are expected to be a precursor to eventual system-wide implementation of the technologies.
Because the program is envisioned as built on a "smart grid" approach, both p rogram and evaluation should carefully separate and "bin" all costs and develop a cost-causation analy sis. The evaluation should explicitly show all sources of cost coordination/cost-justification for this pro ject so that only the incremental piece due to the direct load control is assigned to the C&I Peak Reduction program. "Smart Grid" applic ations are cost-justified on the basis of several factors in addition to direct load control, so the cost of metering for the DSM program analysis is only that portion of technology costs that is not covered by these other factor s (other factors, such as ability to
institute several forms of time differentiated rates in addition to direct load control).


### Program 2. Residential Peak Reduction This program is operationally a near-mirror-image of the C&I Peak Reduc tion Program (Program 1), and the
evaluation is carried out in the same manner. Note that while the re sidential project proposes primarily AC recycling (like the C&I Peak Reduction program), it also contains an elect ric domestic hot water (DHW) component. The DHW calls are planned to follow the AC load events to partially of fset the resumption of AC
load. 47 As with the C& I Peak Reduction program, it is reasonable to assume a 100 per cent net-to-gross ratio in DR projects because there is no reason for the customer to reduce load at the tim e of a load event, except that the event is called and the customer is a participant in the program: there are no free-riders

. The evaluation should explicitly show all other sources of cost coordination/ cost-justification for this project so that only the incremental piece due to the direct load control is assigned to the p rogram. Because the residential "smart

47 This is not necessary for the C&I Peak Reduction p rogram (Program) since the end of the business day will generally mean no need to offset AC units coming back on line foll owing an event.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 115 grid" applications are cost-justified on the basis of several facto rs in addition to direct load control, the cost of metering for the DSM program analysis is only that portion of technology costs that is not covered by these other factors (for example, other factors such as automatic turn on/turn off for studen t accounts in off-campus housing and for households in areas with consistent billing problems, automatic theft and tampering protection features, and ability to institute "pay in advance" pricing, ability to institute several forms of time differentiated rates in addition to direct load control).


### Program 3. Renewable and Demonstration This program contains four program elements: Solar photovoltaic, solar hot water, ground source heat pumps and the “Go Deep” project. Each of these program elements is currently non-cos t-effective and together, the set is not cost-effective. The first three of these are usually classed as r enewable energy projects rather than DSM, while the fourth is an advanced DSM program design.
The renewable technologies are included because the DSM/DR paradigm is shifting from the traditional model of the 1980s to a "green" and "mitigate global warming" paradigm which depl oys both traditional DSM and DR measures and renewable technologies. From the perspective of this paradigm , large scale deployment of renewable technologies is an essential part of DSM -- the larger DSM goals impl ied by the paradigm cannot be accomplished without rapid deployment and expansion of green technologies. Currently, the author ization for renewable technology projects comes separately from authorization for traditional DSM and is not subject to the same cost tests used in the 1980s least cost planning framework.
In most states, renewable technologies are championed by the governor or by key l egislators. Also, most states provide limited demonstration programs rather than full scale programs. T his is expected to change with the recent extension of federal tax credits for renewable projects, the re moval of the residential cap on tax credits, and the provision for utility benefit from tax credits. However, for this first program cycle, a small number of demonstrations is projected for each year, split among these renewable technologies and the "Go Deep" advanced DSM research and demonstration projects.

For the current effort, these projects are covered under marketing, promot ion, and communication of DSM to the extent that they cannot be cost-justified under the California Cost Te sts or by other independent authorizations.
Since this program is directed to demonstration programs, it will have an integrated process and impact evaluation centered on description of experience with each project. For the solar projec ts, part of the impact evaluation will be a documentation of site adequacy for solar installation. Direct pre and pos t metering will also be used to demonstrate the effects of the technology demonstrations. The process ev aluation will look for any unintended side effects as well as the expected direct effect, assess perceptions of the demonstration using a mini-survey approach, and document any problems with the installation. The process evaluation will a lso address problems of ongoing maintenance and care for the equipment. For the "Go Deep" demonstration hom es, evaluation will track withOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 116 current and ongoing assessments of "Go Deep" as sponsored by other utilities, and t he attempt to document attainment of effective and efficient approaches to achieve 80 perce nt savings in the residential sector.


### Program 4. Commercial and Industrial Incentives This program targets only commercial and industrial accounts. The program is a totally custom program, designed to develop exceptionally productive energy savings opportunities in cooperation with the customer. Each project will be specially designed as will each impact evaluation.

Site-specific project evaluation will combine engineering calcula tions with limited short-term data logging or spot metering. Evaluation for this program will have to be kept simple, but adequa te to satisfy needs the customer, plus the company's and the Commission’s need for defensible evaluation results. T ypically in these contexts, measurement is direct and short so as not to interfere with production. For e ach project selected for verification, a verification plan will be developed for the site, depending in part on the measur es (EEM complexity, technologies, anticipated interactive effects), the project estimated value of en ergy conserved, and site review including sitespecific and institutional constraints.
For each project site selected, there will be a pre-installation sit e review, a site-specific plan detailing how measurements will be taken (with assumptions), any pre-installation M&V e ffort as required by the plan (to establish the baseline), post-installation M&V (with post-installat ion metering), and development of a postinstallation M&V report.
Analysis will follow the International Performance Measurement and Verification Protocols (IPMVP) under options A (Partially Measured Retrofit Isolation), B (Retrofit Isolati on), C (Whole Facility), and D (Calibrated Simulation) as suitable under IPMVP to the specific measures insta lled at specific sites. In cases in which preferred IPMVP options might require high cost and in cases in which IPVMP options a re not possible due to production constraints, practical engineering analysis satisfactory to the fac ility management and the utility may be substituted. A major force operative in these projects is the need not to interf ere with production and limitations imposed by facility management. While these factors can limit measurement options , they also insure conservative design and projects that are virtually certain to perform as planned.
The process evaluation will be a short "story of the program experience," ci ting encounter with program barriers and incremental learning from the different projects. The overall progr am evaluation will summarize results over the sites and characterize the savings due to the program. Spot or short-ter m metering is expected to determine baseline and post-installation energy use.
Free-riders, spillover, and net-to-gross considerations will be addres sed by a short survey approach for all projects, complemented by a small set of in-depth interviews for each project (s ince the number of projects for this program is expected to be small). If the number of projects expands, a stratified s ampling approach may be used.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 117 For custom projects, the documentation developed by the program implementer (company staff or a program vendor of ESCO) is extremely important. Documentation of characteristic s of any equipment removed as well as new equipment installed is essential, along with date and time of all act ivity. As with all impact evaluations, quantitative documentation of the base case ("No Program") condition is esse ntial to enable direct comparison with the program condition. This means that the evaluator must work alongside the program implementer because the base case will no longer be available for measurement after the installation is carried out. Based on experience, facility management generally requires the least intrusive, but a dequate for practical purposes, approach to measurement, which is often direct "before and after" assessment. Ty pically measurement for these kinds of projects is best performed by a seasoned engineer with industry experience

. 

### Program 5. Commercial and Industrial Rebates This program targets non-residential customers eligible for prescr iptive measures. These will include commercial and industrial customers. For profit, non-profit and public agencies (such as scho ols) will be included. The rebate program will require elements of both process and impact evaluation. The primary impact evaluation method will be engineering review of the gross savings as projected by the program vendor . For each project selected for verification, a verification plan will be developed for the site, de pending in part on the measures (EEM complexity, technologies, anticipated interactive effects), the project esti mated value of energy conserved, and site review. For each project selected, there will be a pre-installation site rev iew, a site-specific plan detailing how measurements will be taken (with assumptions), any pre-installation M&V effort as required by the plan (to establish the baseline), post-installation M&V (with post-installation metering), and development of a post-installation M&V report. Analysis will follow the International Performance Measurement and Ve rification Protocols (IPMVP) under options A (Partially Measured Retrofit Isolation), B (Retrofit Isolati on), C (Whole Facility), and D (Calibrated Simulation) as suitable under IPMVP to the specific measures insta lled at specific sites. The IPMVP procedures provide for a range of measurement options. For example, most lighting measur es can be assessed by means of direct engineering analysis using inputs such as operating hours, the char acteristics of new lighting equipment and of the equipment replaced. However, other technologies may require pre/post d irect metering and/or statistical regression analysis. The final Evaluation report will summarize r esults over the sites and characterize the yearly savings due to the program. Spot or short-term metering is expected to dete rmine baseline and post-installation energy use in most cases.
Evaluation of retro-commissioning will look particularly at savings c laims and test the duration of energy savings. For the most part, evaluation in this area involves an engineering revie w. However, for selected sites where measurement is possible an evaluation approach with baseline, post treatme nt, and subsequent year measurement may be employed. The case pre-screening will also be included in the evaluati on. It is likely that retrocommissioning will be evaluated using building modeling in Easy-SimTM.

Free-rider, free-driver, and net-to-gross considerations will be base d on short surveys, backed up by a small number of interviews at selected sites. Analysis may be based on a stratified random selection of cases or on all cases.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 118 

### Program 6. Commercial and Industrial Retro-Commissioning Lite This program is planned to make use of a method of detecting outliers that woul d be likely candidates for retrocommissioning. Retro-Commissioning Lite is planned to involve inspection of sys tems for optimization of setting of controls. Evaluation of retro-commissioning will look particularly a t savings claims and test the duration of energy savings. For the most part, evaluation in this area involves an engine ering review. However, for selected sites where measurement is possible an evaluation approach with baselin e, post treatment, and subsequent year measurement may be employed. The case pre-screening will also be included in the evaluation. It is likely that retro-commissioning will be evaluated using building modeling in Easy-Si mTM.
Free-rider, free-driver, and net-to-gross considerations will be base d on short surveys, backed up by a small number of interviews at selected sites. Analysis may be based on a stratified random selection of cases or on all cases.


### Program 7. Commercial and Industrial HVAC Optimization This program involves inspection and adjustment of existing HVAC equipment . For example, out of twelve rooftop units on a building, perhaps two are far out of adjustment. If possible, bot h operation under baseline conditions and operation of the optimized equipment should be monitored through spot metering and careful documentation of any fixes should be recorded. The overall performance of HVAC e quipment should take into
account normal variation of internal loads and also variations due to wea ther. The evaluator should propose the length and type of monitoring required and specify the type of monitoring equipment to be used. It is expected that evaluation will minimize intrusion on building operations by relying primaril y on a calibrated hourly building
simulation model. The model will be calibrated either to baseline conditions or to customer billing records. Inputs to the analysis are expected to also include spot power and outdoor temperatu re readings and interval end-use metering data (to the extent available). Results will be based on a tra ditional "pre/post" design and calculated using a statistically adjusted engineering model.
Free-rider, free-driver, and net-to-gross considerations will be base d on short surveys, backed up by a small number
of interviews at selected sites.


### Program 8. Commercial and Industrial Audit This program is limited to food service facilities and grocery store/s upermarkets. It consists of refrigeration improvements, improvements to refrigeration to reduce load, and restaurant com missioning audits (designed to optimize controls and limit energy losses in food service facilities) . Evaluation will consist of engineering reviews contrasting before and after conditions, and supplemented by spot measurements. M odeling (simulation) software may be employed.
It is reasonable to assume zero free-riders for this type of program since in the absence of a program, since inefficient use of energy in food service facilities typically cont inues for years. Free-rider, free-driver, and net-togross considerations will be based on short surveys, backed up by a small number of i nterviews at selected sites.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 119 

### Program 9. Commercial and Industrial New Construction This program targets new commercial and industrial construction. New cons truction presents a problem for the
usual evaluation methods because there is no base case available for direct measurement. For this reason, the evaluation approach typically taken is building simulation modeling. The "as -built" program buildings are compared using a simulation program to the imaginary buildings that would have been c onstructed in the "No Program" situation. Gross energy savings results are developed as d ifference between the "as-built" and "No Program" model runs. Model runs generally involve many iterations until f inal models are developed. This is International Performance Measurement and Verification Protocol (IP MVP) Option D (Calibrated Computer Simulations), assisted by information from the DOE website, on-site sur vey and verification of selected buildings, and the possibility of limited data logger monitoring. The evaluation plan will pr ovide the specifics of the instrumentation for the datalogger, calculation methods, and assumptions.
Free-rider, spillover, and net-to-gross estimates are developed using surv eys and interviews.


### Program 10. Residential Whole House This program includes the two residential energy assessment options that are carried out remotely, by mail or
Internet and an on-site audit with direct installation of minor measures. Th e remote audits are available (free) to all customers. The separate on-site audits for electric or gas heat custom ers only (with a $50 fee that can be credited to installation of recommended measures that are installed subsequent to the on-site audit). The remote audits are
envisioned as a feeder to the on-site audits.
For the remote audit program using the Internet and mail-in forms, energy sa vings claims will be limited to the lowcost measures sent out to accompany audit results. This is an engineer ing calculation. It will be checked using a mini-survey approach to develop information on installation rates to modify res ults by developing free-rider, spillover, and the net-to-gross ratio. Energy savings claims will be li mited to direct install items.
Evaluation of the on-site audit program element will be based on the audit r ecord, directly installed low-cost measures, and subsequent documentation of rebates for items recommended during the audit. Free-riders, spillover, and the net-to-gross ratio will be developed from survey results and interv iews, both based on systematic random samples of participants. The interviews will also be used to develop p rocess evaluation insights. Vendor staff will also be interviewed for the process evaluation. While the remote audit wi ll be open to all customers, evaluation of this program will focus on customers with electric or gas heat. Customer s without electric or gas heat will not be sent the kit items but will be direct toward rebate programs.
For homes that receive only low-cost measures with small savings potenti al, impact evaluation will make use of an engineering analysis. If there are a sufficient number of electricall y and/or gas-heated homes for which the on-site audit leads to adoption of major measures, results will be assessed using a Statistically-Adjusted Engineering (SAE) billing analysis approach, or the Princeton Scorekeeping Method (PRISM)

.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Program 11. Residential Rebates The Residential Rebates program focuses on rebates for CFLs and for Ener gy Star Appliances (Clothes Washers).
For lighting measures, the evaluation approach will be to verify the CFL wa ttage and CFL life of all rebated units according to vendor/brand specifications. Also to verify the typical watt age of incandescent bulbs replaced by CFLs (the basic assumption is that all CFLs will replace an incandesce nt bulb of equivalent luminosity; other assumptions will be taken from the national Energy Star program, as liste d on their website). Results will be quantified according to standard M&V protocols to estimate the annual and lifetime energy savings. The evaluation report will present these results and report the distribu tion of CFLs by brand, model, and wattage. The program may be required to document light bulbs replaced, for example, through a l imited light-bulb exchange, a survey, or direct inspection, or a combination of these approaches.
For appliances, the evaluation approach will be to gather complete technic al descriptive information to identify each Energy Star appliance rebated (brand, model, characteristics). Re sults will be quantified using industry standard M&V calculations for each appliance type. An attempt will be made to gather similar technical information on machines replaced. The evaluation report will summarize thi s information and calculation results to document energy savings.

The evaluator will review program records and independently check progra m savings calculations maintained in the program tracking system. It is important to place a directive to the p rogram vendor to document the specific technical features of equipment replaced and equipment rebated as a standa rd program procedure.


### Program 12. Residential Appliance Recycling For the residential appliance recycling program element within this p rogram (for refrigerators, freezers and room air conditioners), the program vendor will be required to maintain a trac king database containing all of inputs required to develop gross energy savings. There are two primary national vendor s for this program element and both have the required expertise with relevant tracking databases. Si nce the equipment is recycled, it is possible to gather complete information on all required technical data. The eval uator will also examine and report on safe equipment disassembly and recycling of components. The free-rider, spillove r, and net-to-gross information for this program element will be developed from participant surveys and interv iews, both based on random samples of program participants.


### Program 13. Residential New Construction For the "Beyond Energy Star" program element, the primary method of evalua tion will be an engineering review of program records, since Energy Star qualification will be certified by the program. Savings calculations will follow the International Performance Measurement and Verification Protocol ( IPMVP) Option D (Calibrated Computer Simulations), assisted by information from the DOE website, on-site su rvey and verification of a few selected homes, and limited data logger monitoring. An evaluation plan will provide the sp ecifics of the instrumentation forOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 121 the datalogger, calculation methods, and assumptions. An equivalent comparis on group will also be used to provide a meaningful contrast from which to develop program impacts.


### Program 14. Residential Solar Siting For solar orientation and review of construction to include simple element s of workable passive solar design, it may be assumed that there are zero free-riders, first because while home buil ders have some knowledge of passive solar they do not use it in practice, and second because the focus of the program is on codes as well as individual homes. To the extent that the program is successful in modifying codes at a city or county level, or at the state level, all results will be new energy savings. This evaluation will emphasize proc ess evaluation, to document the efforts at working to establish better codes, and will also require review of sele cted sites to insure solar orientation and elements of simple passive design were properly developed. It is importan t to verify that expertise in solar siting and a background in wider passive solar experience has been present in the sit ing of each house – if done correctly, the program will produce significant energy savings and comfort, if not sited correctly (with minimum passive design included) the home may be too hot in summer.


### Program 15. Residential Low and Moderate Income Weatherization This is a whole house weatherization retrofit program for low and moderat e income homes with electric or gas heat. There are two program elements, one for homes to and including 150 percent of povert y to match the Ohio Weatherization Assistance Program, and the other for homes from 150 percent of poverty to 80 percent of Ohio median household income. The two programs are identical. They will be separa tely evaluated. M&V will follow a traditional non-equivalent control group design using utility energy usage a nd billing records and either PRISM TM or regression modeling, with an equal number of treated and similar untreated ho mes.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 122 

### Other Considerations in Support of Program Evaluation Three other areas should be developed to support program evaluation. These are a protocol for monthly program reporting, customer satisfaction metrics, and standardization of net-to-gr oss methods. 

### Protocol for Monthly Program Reporting To assist in the company's management of programs and to provide a stream of cur rent information to the evaluation team, the vendor for each program should be required to submit a mont hly report to the Program Manager for each program containing the following information 48 : (1) Month, date, program name, name of person responsible for the report. (2) Brief description of the program, including program goals and objectives ( this will repeat each month unless the program is changed). If there is a change in program description, goal s, objectives, program elements or measures, please call attention to the changes and descri be them clearly and completely. (3) Program budget and expenditures (see table below):

Budget and Expenditures Actual Monthly Expenditures Cumulative

Expenditures To Date Total

Budget (Over)

Under Variance

$ Variance

% Total Admin Marketing Program Implementation
(4) Program energy and demand impacts. These will be based on program assumptions ( see table below):

Energy Demand Impacts Projected

Monthly Goals Actual

Monthly Goals Achieved % of

Goals Achieved Projected Total

Program Goals Cumulative

Program Goals Achieved To Date % of Goals Achieve Coincident Pk kW Annual kWh Annual Therms Lifecycle kWh Lifecycle Therms
(5) Describe and discuss whether the program is reaching its projected pe rformance goals as stated in the program work plan. Discuss separately for program administration activit ies, program marketing/promotion/communication activities, and program implementati on activities accomplishments as compared with projected goals and objectives establ ished for program related activities for the report period. Where possible describe work acti vities in both quantitative and qualitative terms. In particular, please describe all barriers encounte red and if project goals have not been met, explain the reasons why and what steps have been taken to ensure t hat the project is back on schedule, and will be completed by target date. (6) Describe all customer disputes or complaints and how they have been resolve d. (7) Describe any staff or subcontractor/consultant changes.

48 This list is slightly modified from current Califo rnia monthly program reporting requirements.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 123 

### Customer Satisfaction Metrics Customer satisfaction for each program is best assessed using a system of continuous mini-surveys. Mini-surveys are “mini” in three ways:

• First, they typically have no more than ten or twelve questions (and may ha ve less) so they are easy to answer and not a burden for the customer.

• Second, all of the questions (or almost all) are answerable with a “yes/no,” “0/1,” or a percentage type response. This permits use of small sample theory.

• Third, the sample sizes are small, perhaps 30-60 completed satisfaction sur vey forms in each survey wave for a program.
However, they typically repeated every quarter so that a time series tracking record of responses to the individual satisfaction question can be developed and graphed. This provides an easy to deploy method of assessing customer satisfaction on a continuous basis that is able to detect changes that mi ght require management response. Since the tracking is continuous, the feedback is in the form of a periodic management report with graphs.
Typically, customer satisfaction is best surveyed by an independent third part y such as a marketing firm or an independent evaluator. Surveys may be conducted by phone or mail, or a combination. Bec ause the response format for the questions is constrained, small sample theory can be used and t he sample sizes will be small for each survey wave, but the waves will be repeated quarterly. The survey questions w ill be tailored separated for each program. A comparison group, not participating in programs, may also be employed.
For each survey wave (and with the exception of programs with a small number of customers) the goal will be a completed sample size of at least 30-60 (not more than 60). By repeating the sa me survey with new customers each quarter, the customer satisfaction results will cumulate to much large r samples over a year and over the five-year horizon developed in the plan, so statistical confidence, significance, and powe r are all addressed over time. Also, by keeping a few common questions across all surveys, a general assessment of customer satisfaction in the whole DSM effort is possible. Where the number of units completed per quarter is less than 30, it is reasonable to attempt to survey all treated units.



### Standardization Different evaluation contractors may have different preferences for the approaches taken to develop information for determining free-riders, spillover, and net-to-gross information. The a pproaches chosen can produce widely differing results. It will be important for Duke Energy to standardize t hese approaches across programs, until such time as the Ohio Commission establishes guidelines for this area. Final determination of methods in this area is likely a commission decision, but commissions tend to ask for a record to be es tablished, demonstrated, and fully discussed before arriving at a result.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 124 

## APPENDIX A. METHODOLOGY

Choice of Methodology At the root of most DSM analysis there is some form of energy usage m odel. The model often used in larger multiutility DSM planning, synthesizes estimates from demographics applied to e ngineering prototypes. This approach is easy to apply to individual measures and to small groups of measures wher e the result of all the measures is small relative to the total energy sales. But this simple synthesis appr oach becomes unstable where a large or comprehensive technical potential is contemplated because the simple sum may not include measure interactions, and can result in inflated savings estimates. Also demographic informa tion and market penetration information are more accurate applied to large regions, but lack precision when applied to sma ller regions. Under this circumstance, the cumulative errors due to lack of precision can compound into la rge errors. The simple synthesis approach has also been criticized for not including all possible measures that may contribute to the full technical potential. Therefore, in this case, where a technical potential will be derived from a maximum application of a wide variety of interacting measures and applied to a relatively small region, we have opt ed to approach the estimate with a “calibrated engineering model”. With this approach we will true the models to the current actual energy sales by fitting a relatively simple algebraic model to the recorded energy use (and hourly load) and the associated average monthly temperatures. This approach has the strong advantage of starting the analysis from a verifiable energy use situation. Another significant advantage of this approach is that it is somewhat empirical, and the data fitting process will reveal large unusual energy use situations, if they exist. Finally, it is particularly important to be able to establish a reasonably bounded estimate of the aggregate energy under cond itions representing the full technical potential, which requires the explicit treatment of measure intera ctions afforded by the engineering modeling approach. Within conditioned spaces, heating and cooling energy will be influenced by li ghting and other internal gains and by large scale refrigeration. This results in an interaction of ene rgy savings measures. Another form of measure interaction is related to changes in thermal conversion efficiency. Wh enever there is a load reduction measure, the net realized energy savings will also be dependent on an assumed thermal c onversion efficiency. Where a thermal conversion efficiency is changed at the same time as a load reduction, t he result is interactive, and it is important to consider the effect of both measures simultaneously. In this case, where a wide range of efficiency and load reduction measures will be applied, it is particularly important to be a ble to deal with measure interactions in an orderly way.


### Overview of Model Structure The overall utility energy model has two principal components: the energy m odel, and the demand model. The output from energy model drives the demand model. The energy model estimates t he average daily energy use, kWh/day or therms/day for each end-use and for each month. The demand model will use the average daily energy use for each end-use and for each month, and distribute it among the twenty-four hours of the day. The principal function of the energy model is to separate the energy for eac h month or day into its primary enduses. The largest and most important fundamental end-uses are Heating, Cooli ng, and Baseload. In this utility analysis, the baseload is subdivided further into DHW, lighting, internal loa ds (cooking plugs etc), and external loads. These six end-uses are the ones that will be considered here. Both the energy and the demand models are “trued up” to actual temperature a nd recorded energy sales and load information. In this case the energy model is trued up to 2007 monthly energy sales a nd temperature data established by sampling in excess of 1000 accounts in each of the seventeen energy use sectors subject to this analysis. The model is also trued up on an hourly basis to available load sha pe information for 2007 loads. For this analysis, energy and demand are modeled for seventeen primary electric ener gy use segments: four residential and thirteen commercial and industrial as described in the market assess ment section. Gas energy is also modeled for the same defined seventeen energy use segments. Gas energy has no load shape i nformation for “true-up”.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 125 Both the gas and electric models serve essentially the same physical pop ulation which allows better modeling resolution in both models. In particular, the building internal gains, which a re readily evident in the electric data, are used in the gas models because the gas space heat needs are dire ctly influenced by internal gain. The gas data shows very clearly the nature of the hot water heating loads and the space heat loads and these are used in the electric model which cannot resolve these loads very clearly because of the low use of electricity for these end-use loads. This simultaneous modeling of both electric and gas energy use for essenti ally the same population reveals interactions between electric and gas energy savings. In particular t he reductions in internal electric energy use, as from lighting efficiencies, will create an unavoidable increase i n fuel use as the gas heating systems compensate for the reduced internal gain. This exported heat load is significant enoug h to increase gas consumption by of the order of 5 to 10 percent, but it is not commonly considered in technical potential studies of el ectric energy only. In this study, with the co-modeling of gas and electricity, the interaction is full y captured and it works to lower the apparent technical potential for the gas utility. The model has been devised and structured with explicit variables to expres s in physical or engineering terms, the measures and treatments involved in attaining the full technical poten tial. This includes variables for conversion efficiency, load reductions and thermal and electrical solar energy me asures. The model will also estimate the changes in peak demand associated with the applied efficiency measures and te mperature changes. The following discussion will be in two parts: the first part discusses the electri c and gas energy models, and the second part discusses the electric demand model. 

### Energy Model
Nature of the Data A brief graphical review of the energy sales and the associated aver age monthly temperature is illustrated in Figure 32 which shows that the daily average residential gas energy use general ly has a clear variation with temperature.

Residential Average Building Gas Usage

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00

20 30 40 50 60 70 80 90 Mean Month Temperature, deg FAvergae Gas Usage,Therm/day data model total

Figure 32. Aggregated Residential Single Family Gas Energy Use

Note that the average daily energy use increases the cold winter months with average monthly temperatures of about 30 deg F. The model fitted to this data is also shown. Figure 33 shows the average energy use versus average temperature for r estaurant customers, and Figure 34 shows an orderly temperature pattern for grocery customers.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 126 Restaurant Average Building Gas Usage

0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00

20 30 40 50 60 70 80 90 Mean Month Temperature, deg FAverage Gas Usage,Therms/day
data model total

Figure 33. Restaurant Average Gas Energy Use

Grocery Average Building Gas Usage

0.00 10.00 20.00 30.00 40.00 50.00

20 30 40 50 60 70 80 90 Mean Month Temperature, deg FAverage Gas Usage,Therms/day
data model total

Figure 34. Grocery Average Gas Energy Use

Figure 35 through Figure 37 show the common patterns found for electric energy use

.
Residential Average Building Electric Usage

0 10 20 30 40 50 60 70

10 20 30 40 50 60 70 80 90 Mean Month Temperature, deg FAvergae Electric Usage,kWh/day data model total

Figure 35. Aggregated Residential Single Family Electric Energy Use

This figure shows the average residential energy use for single family residential customers in residences older than 4 years served for the 12 months of 2007. Note that the average daily energy use i ncreases for the warm summer months with average monthly temperatures of about 80 deg F, and for the cold winte r months with average monthly temperatures of about 30 deg F. The model fitted to this data is also shown. Thi s model is for a sample where the major space heat fuel is gas; had the sample been predominantly heated with electricity, the slope with low temperatures would be much steeper.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 127 Figure 36 shows the average energy use versus average temperature for t he average restaurant customers, and Figure 37 shows the energy versus temperature pattern for the average grocery customers.

Restaurant Average Building Electric Usage

0 100 200 300 400 500 600

20 30 40 50 60 70 80 90 Mean Month Temperature, deg FAverage Electric Usage,kWh/day data model total

Figure 36. Restaurant Average Electric Energy Use

Grocery Average Building Electric Usage

0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000

20 30 40 50 60 70 80 90 Mean Month Temperature, deg FAverage Electric Usage,kWh/day data model total

Figure 37. Grocery Average Electric Energy Use

These figures show that, for both electricity and gas, the energy versus t emperature relationship will vary from sector to sector, but there is a very clear temperature relations hip characterizing each sector. It is this temperature relationship that is the primary empirical basis for the energy model of each sector. There is a similar figure for each of the seventeen energy use sectors, that have been separately modele d. Note that Figure 32 through Figure 34 show energy expressed as therms/day as a convenience in developing a perspecti ve; in the energy model the calculations are done with all energy, gas and electric, expressed in kWh. In general, these models of average energy versus temperature fit t he data quite closely, usually with an R-square in excess of 90 percent. But goodness of fit alone is not a sufficient criterion of truth, and the model will need to be consistent with other empirical information as discussed below. It is important to note that these models are expressed in terms of aver age daily temperature rather than heating and cooling degree days as is more commonly done. This is primarily a matter of conv enience since the degree day format depends on a base temperature that may vary with building stock. However, there is an important physical distinction between average monthly temperatures and monthly degree days f or the mid range average monthly temperatures in the range of 50-65 deg F. At these mid-range temperatures, an average monthly temperature, for example 63 deg F, will have tangible amounts of both heating and cooling degree days that cannot be inferred from the average temperature alone. This distinction is recognized in the model ing process.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 128 

### Energy Model Structure For energy modeling purposes, both the electric and gas customers were subdi vided into the seventeen segments as described in the Market Assessment section of this report. A simple e ngineering model of energy versus temperature including terms for appliance and end-use saturation leve ls and other physical parameters is fitted to the energy sales data for each sector analyzed. The models applied in each of the sectors are all similar and represent six very fundamental end-uses:

• Heating • Lighting

• Cooling • Internal Uses, Plugs, Cooking, Dishwasher

• Hot Water • External Uses, Outdoor Lights, Washer, Dryer

Note that the fundamental end-uses distinguish between internal and external electric and gas energy use. This is for the purpose of estimating measure interactions between the heati ng and cooling end-uses and the electrical energy use within the conditioned space. Lighting, cooking, and internal uses are assumed to occur within the conditioned envelope. 

### Model Inputs Some of these end-uses are dependent on weather variables. The heating and cooli ng end-uses depend on average monthly temperature; the hot water end-use depends on the average monthly i nlet water temperature, and lighting depends slightly on calendar month and day length. The thermal and electrical s olar energy benefits depend on the average monthly solar. The other end-uses are assumed constant from month to m onth. For weather dependent inputs, the models use the inputs shown in Table 82. Table 82. Weather Inputs to Modeling End-Use Inputs Heating Monthly average temperatures and long-term average month tempera tures Cooling Monthly average temperatures and long-term average month temperatu res Hot Water Monthly long-term average Inlet water temperatures Lighting Seasonal lighting usage factors
Beyond the weather inputs are the inputs pertaining to the distribution and ope ration of the energy using systems. These are the variables that are changed in the process of fitting a m odel to the data. It is noteworthy that the relatively few systems inputs are sufficient to fit a model so clo sely to the data, but that lies in statistically favorable nature of fitting to data that averages thousands or hundreds of thousands of s ites. This model is very simple in an attempt to be reasonably transparent and r eviewable. It admittedly does not include many well known second order effects, such as variation of heating COP wi th temperature. However, the simple treatment of energy use in terms of first order effects is sufficien t to the principal purposes here, which are: 1) to be able to true-up the model to the current energy use, and 2) to be able to estimat e a physically reasonable energy use assuming the conditions of full technical potential. The model uses performance inputs that are intended to be the key descriptiv e physical parameters for energy using systems. It is certainly possible to postulate a model using different or more detailed parameters, and such a model (and a variety of others) can be made to fit the data very well. The per formance inputs chosen for the model used here were selected because they can directly express significant portions of the energy use that will be subject to changes under the conditions of full technical potential. The paramete r set is also intended to be small enough to be manageable, but complete enough to support a true-up to the aggregate energy use data of record. It should also be noted that the independent physical variable in the energy model is temperature, and that there are many important energy using processes that are not temperature dependent. T his temperature dependent model can empirically derive the principle peak driving end-uses, heating and cooling, but i t cannot mathematically distinguish from one another the end-uses of non-temperature dependent loads such as cooking, lighting , motors, electronics, hot water etc. Loads of this type are either explicitly estimated as in the case of hot water, or included as part of an aggregate baseload. In a key part of the modeling process, the mag nitude and hourly profile of theOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 129 total baseload can be derived from hourly load data as described below. That empirically derived total baseload is then further separated into the other end-uses using EIA regional or national ene rgy end-use ratios. Table 83 shows the parameters used to describe the energy use in each anal yzed sector. Table 83. Energy Systems Performance Inputs DHW saturation Lights saturation DHW gal/day Internal loads kWh/day Tank loss btu/deghr Internal penetration DHW set temp External Loads DHW efficiency External penetration Space Saturation Cool saturation Space efficiency Cool set temp Space set temp Cool slope BTU/deg hr Space slope btu/deghr Cool efficiency Lights kWh/day Cooling fraction
Ultimately, the sum of the energy models for each of the sectors modeled m ust add up to the total energy sales of record for the test year, and they must true-up at the monthly level as w ell. This energy true-up is accomplished by varying the physical parameters until the total monthly energy use from the models matches the sales of record and maintains a good fit of model to data. 

### Usage Normalization The energy models express the energy use as a function of temperature, a nd this allows the energy use to be estimated for different temperatures than prevailed during the te st year, which in general will differ from the long term normal year. For planning purposes, usage data is normalized to the aver age 30-year temperatures for the service area. Figure 38 shows the actual temperatures in the test yea r and the long term average temperatures.

Air and Water Temperatures

0 10 20 30 40 50 60 70 80 90

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec MonthTemperature Deg F

air, test yr water inlet air, 30 yr ave

Figure 38. Air and Water Temperatures

In Figure 38, it is evident that the 2007 test year, green, is close to the 30-y ear average, red, differing in a warmer summer and a much colder February. The water inlet temperature in Figure 38 refers to the ground water temperature which is used in the end-use models for hot water heating e nergy. In this case, the estimate of the groundwater temperature is assumed the same for the test year. 

### Separation into End-Uses For both electricity and gas, the total energy use is partitioned into the si x fundamental end-uses by a combination of empirical discovery and engineering calculation, however simple.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 130 The heating and cooling end-uses are empirically derived through the fitting of the model to the energy versus temperature slopes shown in the usage versus temperature graphs, using an e mpirically derived estimate of baseload. The hot water end-use is explicitly calculated from water usage, inlet w ater temperature, and storage loss assumptions and market share information. The fit of the gas data to the model is used to refine the water use assumptions for both the electric and gas models. Likewise the fit of t he gas data to the model is used to refine the thermal sensitivity of the building stock for both the electric and gas models. During weather neutral months such as April and October, these models empir ically show the total building baseload with a small amount of heating and cooling. By carefully analyzi ng the hourly load data for each analyzed sector for these months, an empirically derived minimum load can be identified that describes the baseload absent heating or cooling. This baseload identified by a fitting proc ess described below must be established in order to attain a reasonable fit for the heating and cooling end-uses. In electric utilities this special examination of baseload is necessary in order to properly account for the heating and cooling that occurs in swing months. For gas utilities only heating is present and this examination of the electric baseload is necessary to establish the internal gain of the gas-heated building. 

### Further Separation of Baseload into End-Uses With regard to baseload, the models cannot go further and separate that tota l baseload into its constituent end-uses: hot water, cooking, cloths dryers, and process loads. The further separ ation of end-uses is done by removing the explicitly calculated hot water end-use and partitioning the remaining baseload on the basis of US regional energy end-use splits. For the residential sector as a whole and for most of the com mercial analysis categories, there are published end-use splits on the average energy use for a full range of end-us es. For this analysis, appropriate items from the full range of end-uses are aggregated into the three fundamental baseload end-uses used in this analysis: hot water heat, cooking and internal uses, and external uses. For the electric models, two end-use ratios are developed from the EIA data : internal usage/lighting and external usage/lighting. These two ratios are then used in the electric models to maintain the appropriate relationships between lighting, internal uses, and external uses. For the gas models two end-use ratios are developed from the EIA data: int ernal usage/hot water heat and external usage/hot water heat. These two ratios are then used in the gas models to ma intain the appropriate relationships between hot water heating, internal uses, and external uses.


### Demand Model
Available Load Data The demand model applies only to the electric energy model, and it is used here ult imately to estimate time of day demand or load reductions associated with the energy savings. These elec tric load reductions have a very tangible value in the cost effectiveness considerations. The behavioral time of day information derived from the electric demand model has also been used in the gas model to estimate time of day gas usag e even though time of day gas usage plays no role in this analysis. This load analysis first derives the residential, commercial, a nd industrial peak load profiles for each hour of the peak day for each month for the analysis period, 2007, as shown in Figure 39 for resid ential loads in Ohio. These monthly coincident peak days are the benchmarks to which the demand model is true d up. This load data was reasonably complete for the residential sector, but the commercial and industrial load data straddled some of the commercial and industrial sectors and was prorated. T he residential loads are the largest and most volatile and the available data was sufficient to support the most important portions of the true-up process. It is important to recognize that the model developed here estimates the average site hourly demand for each month. The average demand from this model is quite different than the peak day loads that will be used for the true-up comparison. They are almost as different as apples and oranges because the peak day load is born of the extreme monthly temperature conditions that drive utility peaks, and also the site demand must be corrected to includeOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 131 applicable transmission and distribution losses. Ultimately, this a nalysis process will derive the shape of the enduse load activity through a structured comparison and adjustment to the pea k day load curves shown in Figure 39.


### Monthly Peak Day Load Profiles, 2007

0 500,000 1,000,000 1,500,000 2,000,000 2,500,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour of DayTotal Load, kw

1 2 3 4 5 6 7 8 9 10 11 12 Min wkdy Figure 39. Ohio Monthly Residential Peak Day Loads

Note in Figure 39 that the peak day loads are only for residential sales, a nd do not show the full system peak. The true-up to this load data required recognizing that the loads were measured at the distribution tie in and therefore include distribution losses.


### Demand Model Overview The demand model is driven by the energy model. For each end-use and for each month, the e nergy model has estimated the average daily energy use, kWh/day. The demand model then take s the estimated daily energy use and distributes it among the twenty four hours of the day. The objective of this demand model is to estimate the average distribut ed hourly demand for a large number of customers. The concept of distributed demand assumes that thousands of the sam e device, (stove water heater, computer, etc) will be turning on and off according to use at random times within the hour of interest. The contribution of any one of these devices is the full load power*duty cycle for the hour. For example, if a 1400 watt toaster is on for one-tenth of the hour, the distributed demand is 1400 watts times 0.1 hours, or 140 watts. In essence, the distributed demand is the energy used in the hour. The distribution from daily energy use to hourly is done by means of “demand distri bution functions”. The demand distribution function consists of twenty-four hourly demand factors that speci fy the fraction of the daily energy use that occurs in each hour. The hourly demand factors empirically derived from t his analysis and applicable to the residential customers are shown in Figure 40 and Figure 41. These end-use demand fa ctors should not be confused with load curves. For all end-uses, the individual hourly demand factor is much l ess than 1.0, and it is only used to distribute the daily end-use energy by hours. The hourly end-use load curve resul ts when the hourly end-use demand factor has been multiplied by the associated daily end-use energy to gi ve the portion of the daily end-use energy used in that hour. The aggregate hourly load curve is then the sum of the v arious hourly end-use load curves for each hour. In the full utility demand model, there is a different s et of hourly demand factors for each of the six end-uses for each of the primary sectors, residential, commercial , and industrial.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 132 

### Residential Hourly Demand Factors

0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour of DayFraction of Daily Energy

Heat Cool Hot Water
Figure 40. Residential Hourly Demand Factors for Heat Cool, Hot Wa ter
Notice in Figure 40 that the cooling demand factor is greatest at about 4-5 PM when the cooling energy for each hour reaches about 0.07*daily average cooling energy. Similarly, the hourly de mand factor for heating appears to be maximum at 7 PM when the hourly demand factor is 0.06 and the hourly heating energy i s 0.06*daily average heating energy. Hot water demand is known to be bi-modal occurring in the morning and lat e evening. In the model there are separate demand factor curves for each month for heating and c ooling in the residential and commercial sectors because the distribution of heating and cooling throug hout the day varies somewhat from month to month as the temperature of the earth and the structures varies seasona lly.

0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour of DayFraction of Daily Energy

Light Interior Exterior

Figure 41. Residential Hourly Demand Factors for Lighting, Inter ior, and Exterior Loads

Notice in Figure 41 that the interior loads and lighting work toward a daily peak at about 10 PM. The exterior load here consists of washer and dryer activity and some exterior lighting . Washers and dryers are considered here to be external loads because most of the energy is discharged outside as in the cas e of dryers, or because the load may occur in an attached space such as a basement or wash porch that is not directl y part of the conditioned space, as in the case of washers. Note also that the hourly demand factors for lighting a nd other interior loads are here assumed to be the same. 

### Commercial Hourly Demand Factors In principal there are quite a lot of unique demand specifics. But in practi ce the hourly demand factors for the different commercial sectors are taken to be the same because the load dat a is not detailed enough to distinguish one commercial load from another. Therefore, there is a set of hourly dema nd factors for each of the six end-uses, and these are used in all of the commercial analysis categories. The commercial hourly demand factors are shown in Figure 42 and Figure 43.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 133 0.00 0.02 0.04 0.06 0.08 0.10 0.12 0.14

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour of DayFraction of Daily Energy

Heat Cool Hot Water
Figure 42. Commercial Hourly Demand Factors for Heating, Cooling, and H ot Water

There is very little electric heating or water heating in the comme rcial sector, and the demand factors for these enduses find minimal use. In Figure 42 the demand factors for cooling are by far the most important.

0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour of DayFraction of Daily Energy

Light Interior Exterior Figure 43. Commercial Hourly Demand Factors for Lighting, Internal and External Loads

In Figure 43, the hourly demand factors for the exterior loads express the fa ct that these loads are principally exterior lighting which is on at night. The hourly load factors here of princi pal importance are those for the lighting and interior loads which are taken as the same shape. 

### Truing the Demand Model The demand model is ultimately trued against the monthly coincident peak days. And ul timately, the truing process requires a temperature adjustment in the energy model to simulate pe ak day temperatures instead of average temperatures. The true-up process is done in terms of aggregated site de mand, requiring that the comparison load information be de-rated by correcting for applicable transmission and di stribution losses. The first step in the demand true-up is to adjust the non-weather end-uses , lighting, internal loads, external loads, and hot water. The adjustment consists of modifying the hourly demand factors for t hese end-uses until the modeled sum of the non-weather end-uses is close to that observed from the load s tudy. This comparison is done when heating and cooling are at a minimum. The minimum load, unaffected by heating and coo ling, is referred to here as the non weather load, and is empirically drawn from the hourly load da ta. This is key empirical information because it establishes the rat io of baseload energy to total annual energy which is an important input to the energy model for establishing an accurate partit ion of baseload and heating/cooling energy. This ratio for the aggregated residential customers is 0.69, th at is 69 percent of residential energy is baseload, not heating /cooling. There is a similar adjustment of demand factors for the residential, commercial, and industrial loads.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 134 Once the hourly demand factors are so adjusted they are then used to represent the non-weather load throughout the year and especially in the heating and cooling seasons. Figure 44 shows a clos e comparison between the residential demand estimated by the model and the demand from the load study for the sum of the non-we ather load.

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour of DayDemand kW

Model Data Figure 44. Baseload True-Up – Residential, October

The next step in the true-up is for cooling. In this case the model is compare d to the monthly coincident peak cooling days and the hourly load factors for each of the cooling months are adjuste d for best fit between the model and load study. It has been found necessary to derive a different load factor curv e for each cooling month because the actual dynamics of the cooling vary from month to month. For example cooling in May never carries over into the small hours of the morning as does cooling in July and August.

0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour of DayHourly Load, kW

Model Load Study Figure 45. Cooling True-Up All Customers, August Peak

Figure 45 shows a close comparison between the demand estimated by the model and t he demand from the load study after this cooling true-up step. The final demand true-up step is for heating. In this case the model is compare d to the monthly coincident peak heating days and a separate heating load factor curve is derived for each m onth from the best fit between the model and load study.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 135 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour of DayHourly Load, kW

Model Load Study Figure 46. Heating True-Up All Customers, February Peak

Figure 46 shows a close comparison between the demand estimated by the model and t he demand from the load study after this heating true-up step. Through these true-up steps, the most signi ficant hourly demand factors are empirically derived, and the demand model can now estimate the average dai ly or peak demand versus hour for each month. 

### Estimating the Coincident Peak Day Load There is a strong temperature relationship between the coincident pea k day load versus hour and the average day demand versus hour produced by this model. To estimate the coincident peak load, the energy model is driven by peak monthly temperatures instead of average monthly temperatures. This model will estimate the change in average hourly demand for each mont h simulating any group of efficiency measures or all the measures used to express full technical potent ial. This month by month change in hourly average demand is the hourly demand impact. 

### Estimating the Technical Potential for Load Savings The final estimate of technical potential is for the system load im pact which is the demand impact increased to account for transmission and distribution losses. This model will thus estimate the change in average hourly Load for eac h month corresponding to any group of efficiency measures or all the measures used to express full technica l potential. 

### Estimating the Coincident Peak Day Load and Technical Potential Load Offse t To estimate the coincident peak day load, the energy model is driven by peak mo nthly temperatures instead of average monthly temperatures to estimate the peak day aggregate dem and, then the applicable transmission and distribution losses are applied. Ultimately this model will be used to estimate the change in average (o r peak) hourly load for each month simulating any group of efficiency measures in a particular program or all t he efficiency measures used to express full technical potential.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 136 

## APPENDIX B. COST EFFECTIVENESS METHOLOGY

Cost effectiveness analysis refers to the systematic compar ison of program benefits and costs using standardized measures of economic performance. In this report, cost effectiveness is discussed at both the technology level and the program level. The assumptions and approach used to calculate technology a nd program cost effectiveness are presented in this appendix. Much of the material in this section is taken from the California Standard Practice Manual: Economic Analysis of Demand Side Management Programs and Projects, October 2001 (SPM 2001), 49 which has broad industry acceptance. 

### Technology Cost Effectiveness It is desirable to consider some measure of a technology’s cost effec tiveness in the preliminary stages of program design. This allows program planners to subjectively tradeoff cost and ot her attributes of energy efficiency measures (EEM) when considering possible program designs. Cost effectiv eness analysis is less precise at the technology screening stage because estimates of energy savings and cost s at the measure level are subject to a great deal of variance due to interaction with other measures and actual program implementation. Still, measure cost effectiveness provides a useful metric for consideration along wit h the many other factors outlined in the Program Plans section of this report. What is needed at the technology or measure level is a simple measure of cost effectiveness that does not require assumptions of avoided resource cost, rebates, program delivery cost and othe r program level details. Levelized Cost (LC) provides such a measure by expressing the cost of a measure in an nual terms per unit of energy saved. This allows an easy way to compare and rank order the cost effectivene ss of measures. The formula used for the LC calculations in this report is presented below:

LC= DCosts / DSavings



# ∑

= − 

### + +

= N

t t t t 

### d OM IC DCost

1 1



### ) 1( ] ) 1( ) [( 1

1 −

= 

### +

÷ ∆ = 

# ∑ t n

t t 

### d EN DSavings

where: LC = Levelized cost per unit of the total cost of the resource (dolla rs per kWh) IC = Incremental cost of the measure or technology OM = Annual operation and maintenance cost DCost = Total discounted costs DSavings = Total discounted load impacts ∆ ENit = Reduction in net energy use in year t N = Life of measure d = Discount rate
Although not suited for fuel substitution and load building programs, LC provides a n easily calculated way of comparing measures. Measure cost, savings, useful life, and discount rate are the only assumptions required for calculating LC. Real levelized cost refers to LC expressed in const ant dollars (i.e., without inflation). The formula used in Microsoft Excel to approximate LC is as follows:

LC = (OM-PMT(d,N,IC))/EN
where PMT is the payment function in Excel and the other terms are defined as a bove.

49 Prepared by the California Public Utilities Commis sion (CPUC) and the California Energy Commission (C EC). All formulas and discussion are based on the SPM 2001. Formulas have been modified to remove peak savings , multiple costing periods, and otherwise adapted to be relevant for u se with this project.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 137 For example, using a real discount rate of 6.6%, a measure life of 18, an incre mental cost of $200, and annual savings of 100 kWh with no annual O&M, results in real levelized costs of $0.1931. 50 

### Program Cost Effectiveness The discussion of program cost effectiveness is meant to provide a genera l overview of the standard tests consistent with the calculations in the SPM (2001). Actual cost effectiveness ana lysis was run using DSMore software from Integral Analytics. DSMore returns benefit-cost rations and other resu lts for the perspectives represented in the standard tests. Contact Integral Analytics ( http://www.integralanalytics.com/ ) for information and documentation regarding DSMore software. Many additional assumptions over and above those required for calculating EE M cost effectiveness must be made when calculating program cost effectiveness. Cost effectiveness of en ergy efficiency programs involves describing the economic impact of the program from the perspective of various groups. Thi s analysis required detailed program budgets and design elements such as rebate levels and other progra m features. Perspectives, also called tests, presented in this report are listed in the table below along w ith the primary benefits and costs used to compute cost effectiveness. Table 84. Benefits and Costs by Cost Effectiveness Test

Cost Effectiveness Test Benefits Costs Utility Cost (also known as Administrator Cost) Avoided energy costs (net) Program expenses paid by utility including incentives Participant Reduced energy bill Incentive payments Tax credits Decreased O&M costs EEM installation Increased O&M costs

Ratepayer Impact Avoided energy costs (net) Lost re venue (net) Program expenses Total Resource Cost (TRC) Avoided energy costs (net ) Tax credits Decreased O&M costs EEM installation Program expenses Increased O&M costs Societal (variant of TRC) TRC benefits plus non-ene rgy benefits less tax credits TRC costs plus non-energy costs

Reference to “net” indicates that the load used to measure the benefit or cost is net of free-riders. EEM installation includes all incremental costs to acquire and install an EEM. Program expe nses include all costs related to delivery of the program and include staffing and overhead, advertising, incentive payment s, administration fees, and monitoring and evaluation expenses. Various measures of the economic impact are available for each perspect ive. The two primary measures we will use in this report are listed below:

• Net Present Value

• Benefit-Cost Ratio
In addition to the economic criteria listed above, other criteria may be unique to a given perspective. For example, simple payback of investment is often cited as an important criterion fr om the participant perspective. Each of the perspectives is discussed in detail below including the assumptions a nd formulas required to calculate the measures of economic impact. Each of the cost effectiveness tests are discusse d below.

50 The values used in the example are not meant to re present actual assumptions. See the Energy Efficie ncy Measure Assessment section for specific assumptions, includ ing the discount rate.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Utility Cost Test (also known as Administrator Cost Test) The Utility Cost Test measures the cost of acquired energy savings c onsidering only the costs paid by the utility. Benefits are similar to the TRC Test but costs are more narrowly de fined. Its primary purpose is for assessing resource acquisition from the perspective of the utility. In this sense, i t is similar to the Participant Test in that the test provides a measure of cost effectiveness from a single perspectiv e that does not include all costs. Benefits included in the calculation are the avoided cost of energy supply. Net loads are used for the purpose of calculating avoided cost of energy benefits. The costs include all progr am expenses including incentive payments for EEM installation. 

### Participant Test This test compares the reduction in energy bills resulting from the progr am with any costs that might have been incurred by participants. Other benefits included in this test include inc entive payments and tax credits. When calculating benefits, gross energy savings are used rather than reducing savings for free-riders. The main value of the Participant Test is that it provides insight into how the program might be received by energy consumers. The incentive level required to achieve some minimum le vel of cost effectiveness, for example, can be useful in program design efforts. It should be noted, however, that consumer decisi on making is far more complex than reflected by the Participant Test. For this reason, the test shoul d be used as one consideration of likely program acceptance and not an absolute indicator. 

### Ratepayer Impact Measure Test The Ratepayer Impact Measure (RIM) Test measures the impacts to customer bills and rates due to changes in utility revenues and operating costs caused by the program. Rates will go down i f the change in revenues from the program is greater than the change in utility costs. Conversely, rates will go up if revenues collected after program implementation is less than the total costs incurred by the utility fo r implementing the program. This test indicates the direction and relative magnitude of the expected change in customer rate levels. The benefits calculated in the RIM Test are the savings from avoided suppl y costs. These avoided costs include the reduction in commodity and distribution costs over the life of the program.
The costs for this test are the lost revenues from reduced sales and a ll program costs incurred by the utility, including incentives paid to the participant. The program costs include i nitial and annual costs, such as the cost of equipment (either total cost for a new installation or net cost if done as a replacement), operation and maintenance, installation, program administration, and customer dropout and removal of equipme nt (less salvage value). The decreases in supply costs and lost revenues should be calculated using net sav ings.


### Total Resource Cost Test The Total Resource Cost Test measures the net costs of a demand-side management program as a resource option based on the total costs of the program, including both the participants' and the ut ility's costs. Of all the tests, the TRC is the broadest measure of program cost effectiveness from the sta ndpoint of energy acquisition. This makes the TRC Test useful for comparing supply and demand side resources. The primary benefit in the TRC Test is the avoided cost of energy. Loa ds used in the avoided cost calculation are net of free-riders. Tax credits and reductions in annual O&M costs, if appli cable, are also treated as a program benefit (or a reduction in costs). Costs used in the TRC calculations i nclude all EEM installation costs, program related costs and any increased O&M costs no matter who pays them. Incentive payments are viewed as transfers between participants and ratepayers and are excluded from the TRC Test.


### Societal Test The Societal Test is the broadest of all of the perspectives and is consi dered a variant of the TRC. The primary difference between the two tests is that the Societal includes non- energy benefits and costs that are not part of the TRC. Another difference is the treatment of tax credits. While tax cr edits are counted as a benefit in the TRC test, they are considered a transfer payment between members of society and, h ence, excluded from the Societal test.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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## APPENDIX C. RESIDENTIAL ELECTRIC EEM DOCUMENTATION

The purpose of this appendix is to provide documentation of the assumptions used to s creen the residential Energy Efficiency Measures (EEM) identified for consideration in this report . Our assumptions are based on references cited throughout this section as well as the direct experience of our te am with technologies in the field and actual DSM program evaluations. While not all of the field and DSM program experie nce can be cited in published works, published references are used to establish a reasonable range of as sumptions. The point estimate used within that range is based on our professional opinion. The mapping of EEM to re sidential DSM programs is shown in the table below.

Table 85. Mapping of Electric EEM to Residential DSM Programs
Program # 10 11 12 13 14 15

End-Uses EEM Description EEM Ref # Res

Whole House Res Rebates Res

Appl Recycle Res

New Constr Res

Solar Siting Res

Low/Mod Income Weath Customer-Sited Generation Solar Photovoltaic RE-1 Resist to SEER 13 Heat Pump RE-2 Resist to SEER 13 Heat Pump RE-3 SEER 8 to SEER 13 CAC RE-4 SEER 8 to SEER 13 CAC RE-5 Refrig Charge/Duct Tune-Up RE-6 0.005 0.08 Refrig Charge/Duct Tune-Up RE-7 SEER 13 to SEER 15 Heat Pump RE-8 SEER 13 to SEER 15 Heat Pump RE-9 SEER 13 to SEER 15 CAC RE-10 SEER 13 to SEER 15 CAC RE-11 Efficient Window AC RE-12 Cool Roofs RE-13 EE Windows RE-14 Programmable Thermostats RE-15 0.006 0.08 Ceiling Insulation (R6 to R30) RE-16 0.004 0.06 Ceiling Insulation (R6 to R30) RE-17 House Sealing using Blower Door RE-18 0.005 0.0 8 House Sealing using Blower Door RE-19 Ground Source Heat Pump RE-20 Wall Insulation (R3 to R11) RE-21 0.004 0.05 Wall Insulation (R3 to R11) RE-22 Solar Siting/Passive Design RE-23 0.1 Energy Star Manufactured Home RE-24 Residential Space Conditioning

Energy Star Construction RE-25 0.1 Eliminate Old Refrigerators RE-26 1.0 Load Management Set Back HVAC RE-27 Energy Star Clothes Washers RE-28 0.02 Energy Star Dish Washers RE-29 Energy Star Refrigerators RE-30 Residential Appliances

Pool Pumps RE-31 Compact Fluorescent RE-32 1.000 0.98 1.00 Daylighting Design RE-33 Residential Lighting
Occupancy Controlled Outdoor RE-34 Tank/Pipe Wrap and Water Temp Setpoint RE-35 0.005 0.06 Low Flow Fixtures RE-36 0.400 0.24 Heat Pump Water Heaters RE-37 Tankless Water Heaters RE-38 Solar Water Heaters RE-39 Water Heating

Efficient Plumbing RE-40 Combined Heat/Power, Micro CHP RE-41 Emerging Technologies Residential LED Lighting RE-42Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Solar Photovoltaic (RE-1) This technology consists of a roof or ground mounted solar electric array with a full sun output of 2 kW. Such an array has an area of 200-300 square feet. Electricity from the array is conve rted to AC by an inverter and the power is immediately used on-site with excess fed into the grid. This technology nee ds full solar exposure and shadows can significantly restrict output. This technology is fully mature , but local builders and building officials are still unfamiliar with it. 

### Measure Applicability No local studies have estimated the percentage of housing stock with sui table exposure; for this analysis it is assumed that 35 percent of residential buildings are suitable sites.


### Incremental Cost A system installation usually requires an electrical inspection to veri fy appropriate wire sizing, disconnects, and grounding. Costs are quite site specific, with most of the costs associate d with solar electric panels. In the current supply-constrained 2007 market, costs are $5.00-$7.00/watt peak for the solar cells a lone. Installation and balance of system can be expected to add $3.00/watt. For the 2.5 kW array considered here, the t otal cost will be taken as $20,000 51 or $8.00/watt. 

### Average Annual Expected Savings The electrical output for this technology is directly related to the sol ar intensity. Monitoring studies in this region of the US have shown that 1 kW of installed capacity can yield in excess of 1,100 kWh/yr. For the 2.5 kW array considered here, the annual savings for the DEO service territories is estimated to be 3,300 kWh/yr. 

### Expected Useful Life This equipment demonstrated long trouble free service in severe applicat ions such as remote communications, navigation lighting, and road signage. The long-term output of the cells is assumed to decrease with time, but the rate of decrease for current technology is not known. The crystalline and semi-crystalline forms of the technology have already demonstrated degradation of less than 20 percent in 20 years. Bu t earlier thin film forms of the technology have showed shorter lifetimes. The lifetime of new thin fi lm technologies is expected to be of the order of 25 years but it is not known. For these purposes, the expected useful life (EUL) is taken as 25 years. 52



### Resistance Electric Furnace to SEER 13 Heat Pump (RE-2, RE-3) This measure is designed to save heating energy and cooling energy by replacing an existing central air conditioner/electric furnace by a modern heat pump. Most of the savings procee d from replacing resistance heating by a heat pump at more than twice the thermal efficiency. This measure has significant savings, but also significant costs because it involves replacing the whole heating and cooling system, not inc luding ducts. 

### Measure Applicability This measure is applicable to residential customers that heat with a n electric (resistance) furnace.


### Incremental Cost This measure requires replacing the whole heating/cooling system not includ ing ducts. The cost of such a replacement is quite site specific, but can be expected to be a first c ost of $10,000 or more. There are two contexts for such a replacement: 1) early retirement in order to achieve large he ating savings, and 2) where the central AC needs to be replaced anyway, the most prudent thing would be to replace with a hea t pump because of its significant heating savings. The upgrade to a heat pump can be expected to cost about $5,500-$6,500 more than t he AC replacement alone. For this analysis we assume $10,000 as the incremental c ost.

51 The C&RD Database lists the incremental capital cos t as $6,000 per kW, which would be comparable for a n installed 2-3 kW system. 52 The Conservation and Renewables Database lists a me asure life of 20 years for standard technology sola r PV.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Average Annual Expected Savings The average annual expected savings from this measure depends on the size of the residence. Based on DEO specific simulations we find savings in the range of 6,000 kWh/yr for a sing le family residence and 4,800 kWh/yr in the multifamily application. 

### Expected Useful Life The physical life of this measure is about 20 years, but for the purposes of this analysis we will take 10 years as the useful life of this measure to reflect the application of this me asure in an early retirement context.



### SEER 8 to SEER 13 Central Air Conditioner (RE-4, RE-5) This measure is designed to save cooling energy by preemptively replacing an inefficient old central air conditioner by a modern efficient one. This measure is applied to a gas-heated residenc e. 

### Measure Applicability This measure is applicable to existing residential customers wit h central air conditioners.


### Incremental Cost This measure physically involves replacing the entire air condition ing unit but not the ducts. The cost would be $3,500 at a minimum. 

### Average Annual Expected Savings The average annual expected savings from this measure depends on the size of the residence. Based on DEO specific simulations we find average cooling of 1,400 kWh for single family residence and 1,200 for a multifamily residence. 

### Expected Useful Life The physical life of this measure is about 20 years, but for the purposes of this analysis we will take 10 years as the useful life of this measure to reflect the application of this me asure in an early retirement context.



### Refrigeration Charge and Duct Tune-Up (RE-6, RE-7) This measure is designed to save electric energy by increasing the opera ting efficiency of the refrigerant system by insuring that it is properly charged. It is common in residential cool ing or heat pump systems to have an incorrect amount of refrigerant charge because these systems are usually charged on -site during installation. This measure also leads to savings from finding and sealing duct leaks which increases t he system distribution efficiency. 53 

### Measure Applicability This measure is applicable to most of the residential stock. Notably even new installations can benefit from this

measure. 

### Incremental Cost The incremental cost of this measure pays for a visit by a specially t rained HVAC technician. For this analysis this cost is taken as $350. 

### Average Annual Expected Savings The average annual expected savings from this measure depends on the size of the residence. Based on DEO specific simulations we find savings of 1,200 kWh/yr for a heat pump (electric -heated residence) and 300 kWh/yr on a gas-heated residence with AC only.

53 While these measures are theoretically handled by different trades, in practice they are implemented by a specially trained HVAC technician. This combination is efficient fro m a cooling system perspective and also typically c ost effective.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Expected Useful Life This is essentially a tune-up measure and is considered here to have a useful life of 13 years.



### Upgrade Heat Pump Efficiency from SEER 13 to SEER 15 (RE-8, RE-9) This measure is designed to encourage the installation of more efficie nt heat pump equipment. Rather than installing a heat pump with a SEER of 13, the homeowner is encouraged to instal l a more efficient heat pump with a SEER of 15. 

### Measure Applicability This measure is applicable to new or replacement heat pump installati ons. In recent years the rate of heat pump installations has increased. For this study, we will take this measure as applicable to 25 percent of the new electrically heated residential stock.


### Incremental Cost The incremental cost of $1,000 used in this analysis is very similar to the value of $1,062 given in DEER for this

measure. 

### Average Annual Expected Savings The average annual expected savings from this measure depends on the size of the residence. Based on DEO specific simulations, we will take savings of 800 kWh/yr for single family sites and 700 kWh/yr for multifamily. 

### Expected Useful Life The DEER uses an expected useful life of 15 years; however, for other heat pum p measures the DEER uses 18 years which is similar to the 20 years used in this analysis. 

### Upgrade Central Air Conditioner from SEER 13 to SEER 15 (RE-10, RE-11) This measure is designed to encourage the installation of more efficie nt central air conditioning equipment. Rather than installing a central air conditioner with a SEER of 13 the homeowner is en couraged to install a more efficient central air conditioner which has a SEER of 15. 

### Measure Applicability This measure is applicable to new or replacement central air condi tioner installations. In this study we assume that the replacements in the next ten years are applicable to about 20 perc ent of residential customers and that efficient central air conditioners are applicable to about 60 percent of new residenti al construction.


### Incremental Cost The incremental cost of $800 used in this analysis is comparable to DEER’ s $970 for this measure. 

### Average Annual Expected Savings The average annual expected savings from this measure depend significantly on the size of the residence and the thermal integrity of the shell. Based on simulations of savings using DE O specific information, we will use 400 kWh/yr for single family residences and 350 kWh/yr for multifamily. 

### Expected Useful Life The DEER lists an expected useful life of 18 years, which is similar to the 20 years used in this analysis. 

### Efficient Window AC (RE-12) An efficient window or room air conditioner saves energy by slightly more efficient operation, and often by use of an internal timer to restrict operation to occupied periods. An equally importa nt consideration in the selection of a room air conditioner is to avoid over-sizing the unit, in which case additional spaces may be unintentionally cooled.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Measure Applicability This measure is applicable in the residential and small commercia l sector where central air conditioning is not used.


### Incremental Cost The incremental cost of the more efficient unit will vary with the siz e of the unit. For this study we will take the average incremental cost to be $150. 

### Average Annual Expected Savings The energy savings from this measure will vary considerably with the s ize of the unit and the particular application. In this study we assume an application where the room air conditioner is used as the primary means of cooling a space that is used throughout the cooling season. In the DEO service area the average cooling energy for a small residence is about 2,000 kWh/yr. A properly sized efficient window air condit ioner can be expected to save 10 percent of this cooling energy or 200 kWh/yr. 

### Expected Useful Life In this study we assume the expected useful life to be 13 years. 

### Cool Roofs (RE-13) This measure is intended to save cooling energy by reducing the temperat ure in the attic through attic ventilation and through the use or optically reflective roofs. Recent improvements in roofi ng have led to roofing in attractive architectural colors that can reflect solar gain almost as well as white or reflective roofs. This reflection of solar gain along with adequate attic ventilation can lower attic temperatur es significantly thereby reducing heat gain to the home and also improving the distribution efficiency of any ductwork or distri bution fans that are located in the attic space. Attic cooling lowers the thermal gain to the residence be low, and it also improves the distribution efficiency of any attic duct work. At least half the cooling savings at tributable to this measure proceed from the improved distribution efficiency, and therefore this measure is intended for application where there are attic ducts or distribution fans. This is essentially a site-built measure includi ng the installation of roof vents and the installation of several hundred square feet of reflective material to the inside of the roof rafters. 

### Measure Applicability This measure is considered applicable to all new roofing applications. It is especially effective for central air conditioning applications with distribution ductwork in the attic.


### Incremental Cost The incremental cost for this measure is taken to be the incremental cost of the Energy Star Qualified roofing which is reported to be currently $0.20/square foot, but which is expected eventually t o be zero. All other roofing costs and required are ventilation assumed to be unchanged by this measure. For this s tudy we will take the incremental cost to be an average of $0.10/square foot over the five-year planning per iod. For the average residence, $158. 

### Average Annual Expected Savings The savings from this measure proceed from lowered cooling energy by reducing cei ling heat gain. According to DOE, ceiling heat gain accounts for 15-25 percent of the residential cooling l oad. The radiant barrier has been observed to reduce ceiling heat gain by 16-42 percent. The cool attic strateg y also improves cooling distribution efficiency if the cooling ducts or fan unit is in the attic. For this st udy we will take the average annual savings to be 560 kWh/yr. Savings larger than these will be found in the extreme cases with po orly insulated air conditioning distribution located in the attic spaces. 

### Expected Useful Life This measure consists of reasonably durable material installed in an attic. The useful life is assumed to be 12 years.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### EE Windows (RE-14) This measure involves increasing window insulation from a U value of 1.1 BT U/sqft/hr deg F to a U value of 0.45. This measure saves both heating and cooling energy. In the case of gas-heat ed residences, the electric savings are for cooling only and are much less than the heating savings. So the cost effect ive application of this measure is to electric heated residences only. 

### Measure Applicability This measure is considered applicable to a portion of the residential cus tomers that heat with electricity.


### Incremental Cost We assume a cost of $25/square foot of window area. DEER uses a value of $28/s quare foot of window area, and C&RD uses a value of $16/square foot. For the average residence considere d here with 100 square feet of window upgraded, the cost would be $2,500. 

### Average Annual Expected Savings Savings from this measure are strongly dependent on the efficiency of the ele ctric heat source and the square feet of windows replaced. The stock to which this measure is applied consists pri marily of electric furnaces. Therefore the simulations assume the displacement of resistance heat. Based on si mulations from DEO specific data, the annual savings will be taken as 1,334 kWh/yr for electric heated residenc es. 

### Expected Useful Life This analysis uses an effective useful life of 25 years, the DEER uses 20 y ears. 

### Programmable Thermostats (RE-15) Programmable thermostats save energy by lowering the average daily t emperature of the inside of a building. Most of the energy savings is heating energy because that heating thermal load is much larger than the cooling load, but some energy savings in cooling energy will also be realized. Programmable thermostats are commonly sold for self-installation. But the installation has the following four important issues that need to be considered.

• Some thermostats are line voltage thermostats, and there is some shock haza rd to the unaware.

• The first step in programming a thermostat is the system specification . Here the installer tells the thermostat what kind of a system it is controlling. The system type is se lected from a list of about 30-50 different system types. This is a non-obvious choice.

• For system controls there are standard colored wires, but often hookups use non-sta ndard wire. For the mechanically inclined this process is okay but for others it is daunting.

• Then, after it is installed successfully there is the issue of controlling it to get satisfactory results. Sometimes this needs a guiding hand.
The US DOE is planning to phase out programmable thermostats from the Energ y Star program. The planned phase out is apparently related to recent evaluation studies that found insufficient savings to warrant the Energy Star designation. Proper installation and operation appear to be at the root o f the lack of energy savings. We have chosen to leave these devices in our mix of EEMs and feel that with prope r installation and setup the technology is sound. Our incremental cost includes the cost of installation over-and-above t he off-the-shelf cost of programmable thermostats. Even with proper installation, there is an ongoing need for a design that is more userfriendly and easier to operate. 

### Measure Applicability For this analysis one-half the electric heating situations are taken a s good candidates for a new programmable thermostat.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Incremental Cost Programmable thermostats cost retail in the range of $50-$100. A utility prog ram may be able to purchase in bulk. It may be necessary to have a range of options which include at least line voltage and low voltage. For these purposes we take $70 as the melded cost of the thermostats. 54 It is assumed here that thermostats will be installed as part of a site visit in a broader program with $50 allocated for install ation labor. In total, the installed cost will be taken as $120 per thermostat. 55 Some sites with line voltage thermostats may require more than one thermos tat. 

### Average Annual Expected Savings Thermostat savings are best realized when the set back interval is of t he order of 8 hours or longer, and the amount of savings depends on the number of degrees the thermostat is set back. The rule of thumb is 1 percent heating savings for every degree the thermostat is set back for at least 8 h ours. For this estimate a five degree thermostat set back is assumed, leading to heating savings in the average elect ric-heated home of 500 kWh/yr. 

### Expected Useful Life In principal, these thermostats can last for in excess of 20 years, but t he backup batteries have a finite life and the programming can be changed or confused. In this case, the effective lifetime will be taken as 10 years. 56 

### Ceiling Insulation R6-R30 (RE-16, RE-17) This measure involves increasing ceiling insulation from R6 to the R30 lev el. This measure saves both heating and cooling energy. In the case of gas-heated residences, the electric saving s are for cooling only and are much less than the heating savings. So the cost effective application of this measu re is to electric heated residences only. 

### Measure Applicability This measure is considered applicable to a portion the residential cust omers that heat with electricity.


### Incremental Cost We assume a cost of $0.75/square foot of wall area and 1,000 square feet of wall space for a total cost of $750. DEER uses a value of $0.757/square foot of wall area. This job includes the cost of providing for adequate attic venting. 

### Average Annual Expected Savings Savings from this measure are strongly dependent on the efficiency of the ele ctric heat source. The stock to which this measure is applied consists primarily of electric furnaces . Therefore the simulations assume the displacement of resistance heat. Based on simulations from DEO specific data, the annual s avings is assumed to be 1,800 kWh/yr for electric-heated residences and 300 kWh/yr for gas-heated residences. 

### Expected Useful Life This analysis uses an effective useful life of 25 years. The DEER uses 20 years.



### House Sealing Using Blower Door (RE-18, RE-19) This measure applies to residential electric-heated properties. I t involves using blower door technology to pressurize the home. Once the house is pressurized, the air leaks are ide ntified and sealed with appropriate materials to decrease heat loss from the building envelope. 

### Measure Applicability This measure is applicable to most of the residential stock.

54 DEER lists the incremental cost as $56.30 and the i nstalled cost as $73.33 per unit. 55 DEER lists the incremental cost as $73.33 of which $56.37 is equipment cost and $16.96 is labor. This analysis uses $50 for the labor cost which accounts for some of the diffe rence in the costs. 56 DEER list the EUL as 12 years.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Incremental Cost The incremental cost of sending a technician to a home and performing a Blower Door test and sealing the identified leaks is assumed here to be $500. The C&RD database lists $0.16 pe r 0.1 air change per square foot which translates to $500 per house with 0.2 air changes per square foot. 

### Average Annual Expected Savings An electric-heated home will achieve 1,000 kWh in annual savings according to o ur modeling, and a gas home will save 200 kWh annually. 

### Expected Useful Life The life of the savings for this measure depends on the quality of the materi als used especially for the gaskets for the windows and doors. DEER lists 13 years and C&RD lists 20. We feel 20 years is too optimistic and have chosen a conservative value of 10 years. 

### Ground Source Heat Pump (RE-20) The ground source heat pump uses the ground as the energy source/sink in a heat pump c ycle. This allows the ground source heat pump to operate with about twice the efficiency of a conventi onal air source heat pump. Because the ground is at a much more stable temperature than the air, r esistance backup heat can be avoided. And it also simplifies the operation of the heat pump because defrost is not an is sue. 

### Measure Applicability This measure is applicable to new electrically heated residenti al construction and to existing DEO heat pump customers that have suitable sites. The total pool of candidate custome rs will be taken as 10 percent of residential customers, and we will assume that only 30 percent of these have suitable sit es. Overall measure applicability is taken as 3 percent of the residential sector.


### Incremental Cost The ground source heat pump is essentially a standard heat pump except that t he outdoor unit is replaced by a trenched pipe as a ground heat exchanger a few hundred feet long. The burying of the pipe is highly site specific. In this study the incremental cost will be taken as the cost of the ground hea t exchanger only and the remainder of the system will be considered similar in cost to a conventional heat pump. A lthough the site costs are highly site specific we will take $7,000 as the incremental cost. 

### Average Annual Expected Savings This measure saves on both heating and cooling relative to the base case w hich is a standard heat pump. Using DEO specific weather conditions, the savings relative to a heat pump are 5,382 kWh/yr. 

### Expected Useful Life This measure is considered to have a useful life of 25 years. 

### Wall Insulation (RE-21, RE-22) This measure involves increasing wall insulation from R3 and adding insula tion to the R11 level. This measure saves both heating and cooling energy. In the case of gas-heated residences, t he electric savings are for cooling only and are much less than the heating savings. Therefore the cost effect ive application of this measure is for electric-heated residences only. 

### Measure Applicability This measure is considered applicable to a portion of the residential cus tomers that heat with electricity.


### Incremental Cost This measure contemplates adding wall insulation to a 2x4 stud wall where t here is none. We assume a cost of $1.25 per square foot of wall area. DEER uses a value of $1.32/square foot of wall area. The DEER values areOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 147 based on going from an R0 to an R13; the equipment costs are given as $0.15 for equipme nt and $1.17 for labor resulting in the overall cost of $1.32. Our estimate is more conservativ e; the total installed cost for the home modeled is $1,400. 

### Average Annual Expected Savings Savings from this measure are strongly dependent on the efficiency of the ele ctric heat source. The stock to which this measure is applied consists primarily of electric furnaces . Therefore the simulations assume the displacement of resistance heat. Based on simulations from DEO specific data, the annual s avings will be taken as 2,100 kWh/yr for electric-heated residences and 400 kWh/yr for gas-heated residences. 

### Expected Useful Life This analysis uses an effective useful life of 25 years, the DEER uses 20 y ears. 

### Solar Siting Passive Design (RE-23) This measure applies to new construction that can be designed and sited to ca pture solar gain through windows in order to displace space heating. In a new building, the cost of proper orientation and of solar design is small to non-existent if the orientation and design decisions are made before construct ion starts. It is well known that if a new residence is tightly designed thermally, a nd oriented so that about 75-100 feet of glazing is near south facing, then its heating requirements can be reduced by a bout 30 percent. Much larger heating reductions have been demonstrated, but then the designs need to become more extre me with respect to south glass and with respect to protection from unwanted summer sun. This measure is intende d to represent a “minimum graceful design”, yielding the maximum savings with the least departure f rom a normal residential appearance. Physically, this measure consists of reorienting and redistributing gl azing that would have been used anyway, and in using proper overhang to provide some summer shade. In passive solar design, the south g lazing should usually have a high solar heat gain factor. This is an unusual glazing specificat ion for current residential applications because most residential glazing is intended to reject solar gain for cooling purposes. Passive solar design also includes increasing the thermal mass, such as floor tile, adjace nt to south facing glazing. The thermal mass of the existing sheetrock and furniture, etc, in a building also plays a role in thermal storage. Building codes generally try to discourage excessive glazing and solar gain, but they allow for except ions where thermal design has been explicitly considered and documented. 

### Measure Applicability This measure is applicable to new electrically heated constructi on with suitable solar exposure. In this study the measure will be applied to the 40 percent of new residential construction that will potentially use heat pumps, and of these 50 percent are assumed to have a suitable solar exposure. The overa ll applicability of this measure is taken as 20 percent of the residential sector.


### Incremental Cost This measure is considered a minimum passive design, and it essential ly consists of a redistribution or reorientation of materials that would have been used anyway. The cost of this measure is taken as the cost for the information or advice necessary to “tune the design to the sun”. The cost for this meas ure is taken here as $500 per building. Not very much needs to be done to capture these minimal passive solar heating sa vings, especially if it is done at the outset. The context for this incremental cost is assumed to be to a develo per for some extra consideration in overall site planning. In many reported cases of solar design, the cost is many times this and the bu ilding is usually much more expensive as well, but these costs are the common costs associated with personaliz ed new construction, not particularly related to solar design. 

### Average Annual Expected Savings The annual savings for this measure are considered only for electric -heated residences, though this measure is well suited to gas-heated sites as well. For this analysis, the savings ar e taken at approximately one-third of the electric energy used in typical heat pump-heated residences in DEO territory, 1,500 kW h/yr. These savings have beenOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 148 referenced to a heat pump as base case because it is unlikely that a new el ectric-heated residence would be built with electric resistance heat. However, relative to the rare cas e of a new resistance heated building, the savings would be much larger, about 3,000 kWh/yr. 

### Expected Useful Life This measure will last the life of the building which can easily be 50 y ears or more. For this analysis the measure life is taken as the maximum life used in this analysis, 50 years. 

### Energy Star Manufactured Home (RE-24) An Energy Star qualified new manufactured home is required to be 15 percent more ef ficient than a similar home that meets the 2004 International Energy Conservation Code, IECC. The mechanism for estimating Energy Star compliance is through the use of a HERS (Home Energy Rating System) score calculated from a brief estimate of annual energy use. The savings proceed principally from heating, cooling, lighting and water heating savings. 

### Measure Applicability This measure is applicable to all new manufactured home construction. Bu t for the purposes of this study the measure is restricted to new residential manufactured all electri c construction.


### Incremental Cost The incremental cost for this measure consists of the increased cost of building components such as insulation, windows, lighting and appliances. This cost is site specific, but for the DEO service areas, the cost is taken as $2,600 which includes the cost of upgrading from resistance heating to heat pump hea ting. Generally the incremental measure cost for manufactured housing is less than noted for Energy Star site-built construction because it is derived from the manufacturing environment where the costs increment is at the original equipment manufacturer level. But in this case, the total incremental cost is greater than for Energy Star site-built because it includes the cost of an upgrade from resistance space heat to heat pump space heat. 

### Average Annual Expected Savings The savings for this measure are specifically modeled based on an assum ed upgrade from resistance heat to a heat pump because this building stock is predominantly sited where there is no gas s ervice and electric energy is the primary source of space heating. Savings estimates for an Energy Star m anufactured home including an upgrade to a heat pump are in the range of 4,500 to 6,000 kWh/yr. For this study, savings is assumed t o be 5,000 kWh/yr. 

### Expected Useful Life This measure has a useful life comparable to that of manufactured new construction and, for this study, is taken as 25 years. 

### Energy Star Construction (RE-25) An Energy Star qualified new home is required to be 15 percent more efficient than a similar home that meets the 2004 International Energy Conservation Code, IECC. The mechanism for estimat ing Energy Star compliance is through the use of a Home Energy Rating System (HERS) score calculated from a brief estimate of annual energy use. The savings proceed principally from heating, cooling, lighting and water heating savings. 

### Measure Applicability This measure is applicable to all new residential construction.


### Incremental Cost The incremental cost for this measure consists of the increased cost of building components such as insulation, windows, lighting and appliances. This cost is site specific, and there i s some choice in selecting the package of measures. An initial cost effectiveness screening of this measure s howed that the maximum cost effective cost is $3,000. This requires composing a package of only the most cost effective measur es. Therefore this package includes the strongly cost effective measures of flow efficient showe rheads and inspection of heat pump that are notOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 149 commonly part of the Energy Star package (but should be). Based on the choice of th e most cost effective measures, the cost used for this study is $3,000. 

### Average Annual Expected Savings The savings from this measure are variable depending on the particular site treatment chosen, but estimates for this region are in the range of 3,000 to 4,500 kWh/yr. For this study, the savings is assumed to be 4,223 kWh/yr. 

### Expected Useful Life This measure has a useful life comparable to that of new construction and , for this study, is taken as 50 years. 

### Package Detail New Residential Energy Star Plus Program planning for an assumed package of Energy Star Plus treatments has us ed a model of a prototypical all electric participant. Using this model the full package of measures i s examined to estimate the energy savings for the individual measures in the package. The Energy Star new residential achieves energy savings principally th rough improvements to the building shell and reductions in interior appliance energy use. As perspective consider an all electric single-story residence of about 1,900 square feet. This residence is heated and cooled by a SEER 13 heat pump which is the current standard. The Energy Star package consists of three common sense building steps: Fir st the thermal conductivity of the envelope is reduced by small coordinated improvements to the building shell, be tter glazing, selective increase to insulation levels, and by attention to air sealing and framing details. The n, the performance of the heating cooling systems is improved by duct insulation and testing. Finally, the internal energy us e is reduced by using efficient lighting, appliances, and showerheads. None of these improvements is extreme , but taken together these small improvements can result in an approximate 20 percent reduction in annual energy use. This is the core of the Energy Star Plus savings. Another 5 percent reduction in energy use is possible if the residence is oriented to use solar gain to offset winter heating. And a further 5-plus percent reduction in energy use can be achieved through t he use of a SEER 15 rated heat pump. Another 10 percent savings is possible through the use of solar hot water heating, and another 10 percent reduction is possible by applying a modest solar PV array. These f urther reductions are all beyond the core Energy Star package, and only the first, the solar siting, is cost effec tive currently. The further enhancements from a more efficient heat pump and other solar applications are quite reliab le and effective, but beyond the current cost effectiveness horizon. In practice each building is unique, and slightly different packages of improve ments to shell and appliances are selected based on specific circumstances, but the savings will break dow n approximately as in Table 86. In this example the annual energy use for an all electric residence has been reduc ed from about 19,400 kWh/yr to about 15,600 kWh/yr, about a 20 percent reduction by core Energy Star measures alone and anothe r 5 percent through solar siting. Table 86. Energy Star Plus Residential Savings Example

Efficiency Category Annual Savings (kWh/yr) How Achieved Shell Improvements 1,600 20% reduction in thermal l oss, shell and infiltration Hot Water improvements 700 2.0 gpm showerhead Duct Improvements 585 Insulation and leak testing Efficient Appliances 945 Efficient light, washer, dishwasher, an average 20% reduction in internal loads Solar Siting 1,050 Enhanced south glazing
The Energy Star Plus package consists of the efficiency measures not ed in Table 87.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 150 Table 87. Energy Star Plus Savings Measures
Shell insulation Duct insulation and leak testing Three energy star appliance including efficient lighting and an energy s tar clothes washer A 2.0 gpm rated shower head(s) and faucet aerators Whole house air sealing details
In the case of a residence with gas heat and hot water heating, the effici ent appliance and cooling savings are the same with the shell and hot water improvements resulting in gas savings. 

### Eliminate Old Refrigerators (RE-26) This measure involves creating electric energy savings by collect ing and dismantling underused older refrigerators. Ideally only operating or operable refrigerators would be eligible fo r removal. 

### Measure Applicability This measure is applicable to residential customers with more than one refrigerator. Of these only 50 percent are assumed to have an interest in removing a refrigerator.


### Incremental Cost The incremental cost of this measure will be taken as the cost of acqu iring and recycling the unit. For this study that cost will be assumed to be $165. 

### Average Annual Expected Savings Savings from this measure are dependent on the age of the refrigerator and the location where it is used. Savings estimates for this measure also need to include the zero effects of i ncluding operable but not operating refrigerators. Reported savings estimates vary widely from an astonishing 1,900 kWh/yr for C&R D to 413 kWh/yr observed in the Connecticut Appliance Turn-In program. For this program, the savings wil l be assumed to take the middle road, 1,150 kWh/yr. 

### Expected Useful Life The useful life of this measure is the length of time the removed refrig erator would have continued to be used absent the program. There is no reliable research on this and for this prog ram the useful life will be taken as 5 years. 

### HVAC Set Back (RE-27) This measure is a voluntary set back of both the heating and cooling set poin ts by 3 deg F. This is the average set back for the whole day not just the night set back. This type of set back coul d lead to slight behavior changes such as different clothing when lounging around or sedentary. The heating and cooling savi ngs from such a simple change can be large, of the order of 2,000 kWh/yr. The savings will be greates t in houses heated by resistance heat, but they will be significant in heat pump houses as well. 

### Measure Applicability This measure is applicable throughout the residential sector. But the g reatest savings will be where the measure is applied to electric-heated homes.


### Incremental Cost This measure has essentially no cost. As a token cost, we assume $5. 

### Average Annual Expected Savings The savings for this measure depend strongly on the amount of set back and the hea ting type. Based on DEO specific weather, low savings would be about 500 kWh/yr for a mild set back to a good heat pump, and highOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 151 savings would be about 2,000 kWh/yr for a five degree set back to an electric f urnace. For this study, we will assume 1,000 kWh/yr as the savings. 

### Expected Useful Life This is a temporary measure; the set back strategy may only work for one or two seasons. Accordingly, the useful life is taken as 2 years. 

### Energy Star Clothes Washers (RE-28) This measure involves obtaining an Energy Star clothes washer which is a mor e efficient clothes washer than a standard clothes washer. This measure has significant water and det ergent savings in addition to the electric savings. According to the Environmental Protection Agency, horizontal-axis washing machines can use about 40 percent less water and 50 percent less energy than conventional washers , cause less wear and tear on clothes, and can accommodate large items that won't fit in a top-loader. A typical top-l oading washer uses about 40 gallons of water per full load. In contrast, a full-size horizontal axis clothes was her uses between 20 and 25 gallons. 

### Measure Applicability This measure applies only to customers who do not currently have a high efficienc y clothes washer.


### Incremental Cost The incremental cost for clothes washers vary significantly depending on t he features. The value used in this analysis is $400; DEER lists a value of $565.82 while C&RD lists $245.26. Due to the w ide variety of costs for Energy Star clothes washers, $400 is a good mid-range value for the purposes of t his analysis. 

### Average Annual Expected Savings The kWh savings from a clothes washer depend to a significant extent on the sour ce of the water heating and dryer’s energy source. If the water heater is a gas water heater the kWh savings are insignificant but if the source is an electric water heater the savings can be substantial. Savings also depend on whether the clothes washer has a built-in heat source which some do have. DEER lists 199 kWh and C&RD lists a range from 54 to 509 kWh depending on the model chosen. Savings is assumed to be 400 kWh because the program wil l be limited to customers with electric water heat and electric dryers. 

### Expected Useful Life The expected useful life used in the analysis is 18 years; however, both DEE R and C&RD list 14 years. 

### Energy Star Dishwashers (RE-29) This measure is defined as the purchase of a new Energy Star dishwasher. By de finition Energy Star dishwashers are more efficient than a comparable standard new dishwasher. This me asure applies strictly to the improved level of performance, Energy Star versus Standard. An Energy Star qualified dishwa sher uses at least 41 percent less energy than the federal minimum standard for energy consumption, which was set in 1994. In this measure the dishwasher being replaced has an EF of 0.46 and is being replaced by a 0.58 EF dishwasher, a nd has an average usage of 215 washes. 

### Measure Applicability For this study, we will take the applicability of these units to be 60 pe rcent of the existing residential sector and all of the new residential sector. In fact, Energy Star dishwashers ar e a required item in Energy Star new construction.


### Incremental Cost The incremental retail cost for dishwashers varies depending on the fea tures present in the model chosen. The value used in this analysis is $50, DEER uses a value of $133 and the C&RD lists $6 as the incremental cost, this analysis has incorporated an intermediate value.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Average Annual Expected Savings The savings from this measure are primarily due to decreased hot water usa ge. The C&RD lists 119 kWh/yr and DEER lists 72 kWh/yr. This analysis uses 75 kWh/year. 

### Expected Useful Life The expected useful life used in the analysis is 10 years. However DEER li sts 13 years and C&RD lists 9 years. 

### Energy Star Refrigerators (RE-30) This measure is defined as the purchase of a new Energy Star refrigerator which is slightly more efficient than a comparable standard new refrigerator. This measure applies strictly to the improved level of performance, Energy Star versus Standard.

It should be noted here that this measure definition will under-count the real sa vings because the current stock of new refrigerators is much more efficient than the older stock more than 10 y ears old, and significant savings will result when an old refrigerator is replaced by a new one, even a non-Energ y Star one. These savings are a natural part of the background residential usage changes in response to the current st andard market and are considered savings that would have happened absent any particular measure. For this part icular measure, the measure savings used in program cost effectiveness are only for the Energy Star increme nt, but the technical potential estimate inherently captures the full replacement savings. 

### Measure Applicability This measure is assumed to apply to 90 percent of the residential secto r, essentially all of the residential sector for which an Energy Star model is available.


### Incremental Cost The incremental retail cost for refrigerators, vary significa ntly depending on the features present in the model chosen. The value used in this analysis is $200, DEER uses a value of $135.75 and the C&R D does not list a value due to the variability in the possible costs. Due to the wide variety of cost s for Energy Star refrigerator, $200 is a good mid-range value for the purposes of this analysis. 

### Average Annual Expected Savings Savings vary by type of refrigerator/freezer configuration and by size. The range is 80-100 kWh/yr. Savings for this analysis will be taken as 100 kWh/yr. These savings are relati ve to the energy use of a new but non-Energy Star refrigerator. In fact a significant portion of the new refriger ator purchases are to replace old refrigerators, and even a non-Energy Star refrigerator will save about 300 kWh/yr relativ e to the old refrigerator it replaces. 

### Expected Useful Life The expected useful life used in the analysis is 18 years and both DEER and C&R D also use 18 years. 

### Pool Pumps (RE-31) This measure saves energy by employing a 2 speed pool pump motor. At the lower sp eed the pump is still doing a good job of filtering, but it uses about 75 percent less energy. This is typical of the savings from slowing down pumps or fans. While these savings are significant it should be noted that t he slower pumping rate can adversely affect pool accessories such as a solar pool heater. 

### Measure Applicability This measure is applicable to in-ground pools only and is expected to be appli cable in less than 5 percent of the residential sector.


### Incremental Cost The incremental cost for this measure consists of the increased cost of a 2 speed pump ($180) and the increased labor to install it. In a retrofit case the labor is of the order of $ 300, but in a new installation there is no increased labor. For this study we will take $180 as the incremental cost.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Average Annual Expected Savings The savings from this measure depend on the degree of flow reduction and the numbe r of hours of reduced flow. A typical power reduction to be expected is 500 watts, and in a full season the durati on of reduced flow is 1,000-1,500 hours. For this study we will take the annual savings as 648 kWh/yr. 

### Expected Useful Life The expected useful life of this measure is assumed to be 10 years. 

### Compact Fluorescent (RE-32) This measure consists of substituting compact fluorescent lighting for incandescent lighting. At each socket treated, such a substitution will reduce lighting power by about 80 percent. A f ull application of this measure consists of converting all the most used lighting fixtures from incandesce nt to compact fluorescent. Housing audits taken over the last 10 years show that an average house has about 25-45 lighting sockets with an aggregate connected incandescent lighting load of about 2,700 watts. But of this load, only about 10-15 sockets are used for about an average of 5 hours/day, the rest are infrequently used. So it is t he ten-fifteen most frequently used sockets that are the primary targets for a whole house lighting conversion. A satis factory conversion of these most important sockets may require recourse to a variety of bulb styles, powe rs, and even adapters (such as lamp harps) to facilitate accommodating the CFL to these 12 best locations. 

### Measure Applicability This measure is applicable in 100 percent of the residential sector, but to allow for some existing use of compact fluorescents this study will use 95 percent as the applicability fa ctor for this measure.


### Incremental Cost The cost for this technology continues to decrease, and there are various sa les or promotions where the cost may be as low as $1.50/bulb. But for the purpose of this program planning we will assume $2.00/average bulb to cover the costs of larger or outdoor-rated bulbs, and another $5.00/bulb for installation or adapt ation labor. Full application of this measure, assuming treatment of the 12 most important fixtures in a residence is taken here as costing $24. The C&RD lists $5.73 for the incremental cost and the DEER lists $8.03 for the incremental installed cost, but these sources are out of date. 

### Average Annual Expected Savings It is assumed here that the 15 treated sockets reduce the connected loa d by 750 watts, and that the average on time for these sockets is 3 hours/day, leading to energy savings of 2.25 kWh/day. Thi s equates to 55 kWh/yr/bulb. The savings listed in DEER range from 20 to 59 kWh/yr/bulb, depending on which CFL is r eplacing which incandescent bulb. For these purposes, the various applications of this me asure are assumed to save 55 kWh/yr per bulb, and a total of 660 kWh/yr for replacing 12 bulbs at a single site. 

### Expected Useful Life Compact fluorescent bulbs have a lifetime of 10,000 hours, about 7-10 times as lo ng as the incandescent bulbs they replace. Assuming the average compact fluorescent bulb is used 2,000 hours/yr ( 5-plus hours/day) gives a conservative estimate of useful life of 5 years. The useful life fo r the energy savings from this measure will cease in the time frame of 2015-2020 as the new federal lighting standards diffuse into the market. 

### Daylighting Design (RE-33) This measure is intended to reduce the lighting energy in new residen tial construction. Daylight has the highest lumens/watt of any light source. A little bit of daylight can go a long wa y toward lighting a space without introducing as much heat as other light sources. Physically daylighting takes t he form of small skylights or clearstories, and high small windows coordinated with light colored inter ior wall and ceiling surfaces. In practice, good daylighting design involves the avoidance of glare and over lighting as wel l.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Measure Applicability This measure is applicable to 100 percent of the residential new construc tion.


### Incremental Cost This measure is being applied in new residential construction where lighti ng is a natural consequence of window placement. In this context daylighting design is considered in the distributi on of the windows and skylights to make light distribution more uniform and to avoid glare. These design impacts wi ll have minimal cost if they are brought in at the planning stage. For this study the incremental cost is ass umed to be $500. 

### Average Annual Expected Savings Properly designed daylighting can save almost all the lighting energy used duri ng daylight hours, but not all residences are used during the day. The EIA Residential End Use Survey fi nds 1,500 to 1,800 kWh/yr for lighting in the average residence. The savings will wary widely from site-to -site, but for this study we will take 40 percent lighting savings, 750 kWh/yr. 

### Expected Useful Life Daylighting features integrated into a house during construction will la st the life of the house. For these purposes the lifetime will be taken as 25 years.



### Occupancy Controlled Outdoor Lighting (RE-34) This measure is designed to save lighting energy by turning on selected outdoor lighting only when occupancy or movement is detected. This measure has a strong security context, but it also is very convenient at entrances, garages, etc, where light switches can only be accessed from inside and li ghting is left on for long periods of time in order to provide light for the short time it is actually needed. 

### Measure Applicability This measure is applicable through out the existing residential stock.


### Incremental Cost This measure physically involves replacing two frequently used outdoor lig hts by occupancy controlled lights. It is assumed that a single occupancy controller and light costs $50, and that a f ull installation consisting of two lights would cost $100. 

### Average Annual Expected Savings The average annual expected savings from this measure depends on the type of light that is being controlled. The preferred type of light to control is a compact fluorescent spot light because of its lower power use and long life. But in colder outdoor applications these lights can take from 30 seconds t o a minute to come to full brightness which may be unacceptable in some cases. For this analysis, we will assume t hat 150 watts is being controlled, and that a savings of 5 hours/day is achieved. Annual savings for these purposes is take n as 250 kWh/yr. 

### Expected Useful Life For the purposes of this analysis, we will use 10 years as the useful lif e of this measure. 

### Tank Wrap, Pipe Wrap, and W ater Temperature Setpoint (RE-35) This technology consists of adding insulation around the water heater, checki ng and resetting the tank thermostat, and replacing leaky shower flow diverters. These measures are principal ly tank-centric, and can be self-installed or by a site visit if the package is part of a broader program. Resetting the t ank thermostat is also a safety issue because it can reduce scaling and burns due to too high a set temperature. 

### Measure Applicability The applicability for measures of this type is discussed under Low Flow Fi xtures. In DEO service territory, electric water heat accounts for about 40 percent of water heating, 2/3 of that 40 percent w ould be eligible for this measureOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 155 because in some cases the tank cannot be accessed to install a blanke t or one has already been installed. As a result the applicability is taken as 25 percent.


### Incremental Cost The cost of this treatment breaks down as $30 for materials and $20 for inst allation labor. For these purposes the measure cost is taken as $50 because these measures will typically be part of a larger program. 

### Average Annual Expected Savings The dwelling savings for these measures is discussed under Low Flow Fixt ures. Based on prior experience and evaluation work on other programs it is estimated that the savings would be about 1 kWh/day. 57 For this program we use the conservative value of 200 kWh/yr savings. 

### Expected Useful Life The lifetime of these measures is potentially quite long. For practic al purposes the lifetime will be considered limited by the expected remaining lifetime of the hot water tank, 6 year s. 58 

### Low Flow Fixtures (RE-36) This technology consists of a new showerhead rated at 2.0 gallons/minute (gpm ) at 80 pounds/square inch (psi) and a swivel aerator for the kitchen faucet and fixed aerators for the la vatory faucets. The current US standard for showerheads is 2.5 gpm. Measurements of the existing shower flows in buildi ng stock show a range of 2.75 to 3.75 gpm with frequent individual cases in excess of 5 gpm. Evaluations have shown that programs that replace with 2.0 gpm heads have greater savings than programs that replace with the stand ard 2.5 gpm shower heads. Program shower heads should be 2.0 gpm at 80 psi and with a lifetime scaling and clogging war ranty. It is important also to be cautious about the use of “pressure compensating” showerheads. These are more pr one to clogging and can lead to unintentional increases in flow rate in low pressure situations suc h as well water systems or older systems with occluded piping. Customer acceptability is an important component in a showerh ead program. Customers will remove new low flow showerheads if the quality of the showering experience decl ines with the new showerhead. Therefore it is important to research and test the showerhead chosen for t he program carefully. In addition, the old showerhead must be removed from the premises to decrease the likelihood of having it reinstalled. 

### Measure Applicability This measure is applicable to the 40 percent of the residential se ctor that heat water with electricity.


### Incremental Cost Low flow fixture costs vary widely, and depend on whether the fixtures are purc hased retail or in bulk. The costs for a bulk purchase for a showerhead and three aerators also have a wide range , about $8.00-$15.00/set. The most important feature of these fixtures is the long-term acceptabili ty and durability because these factors have a direct impact on the lifetime savings. With a long enough lifetime, this is such a cost effective measure that all prices in the range are quite cost effective. Because the cost of the showerhead va ries significantly and quality is so important for this program, it is essential to test, choose and pay the pric e for a high quality showerhead. This measure is so cost effective that even with a more expensive showerhead the pr ogram will still remain cost effective and a quality showerhead will ensure measure persistence. The installed cost will be taken as $25/residence. 59 

### Average Annual Expected Savings Field monitoring studies can demonstrate the flow savings, but ultimately the overall savings will be a combination of flow savings and the duration of use. The flow of the showerhead used has a signi ficant impact on savings. This program is designed around a 2.0 gpm showerhead as compared to a 2.5 gpm showerhead. Therefore t he savings

57 Khawaja S. PhD, and Reichmuth, H. PE., 1997. Impac t Evaluation of PacifiCorp’s Ebcons Multifamily Pro gram. Pacificorp. 58 DEER says 15 years for pipe insulation, 9 years for faucet aerators, and 15 years for an efficient wat er heater, so 6 years is conservative. The C&RD lists 10 years for a water heater with a minimum warranty of 10 years. 59 The DEER Database lists measure costs as $22.946 pe r unit and $37.946 installed cost.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 156 will be more than the 120–133 kWh per unit listed in DEER. In addition the clima te is different and the inlet water temperature is lower so the savings in this DEO program will be gre ater. Several studies have measured final savings in terms of electric input to the tank, but usually these studies have included savings from comprehensive treatments including other measures including tank and pipe insulation, kit chen and bath lavatory aerators, tank thermostat set back, and leaky diverter replacement. Savings can vary from program to program depending strongly on the choice of showerhead. Savings can also diminish with “takebac k” in the event that the new showering experience is longer than the original. Actual savings observed i n the comprehensive cases include these takeback effects, and are in the range of 650 to 950 kWh/yr. The savings from a s howerhead and aerator change are taken as 500 kWh/yr. 

### Expected Useful Life The lifetime of this equipment is the key to its cost effectiveness. If an adequate, even pleasant, shower can be provided through lifetime warranted equipment, then the practical lifetim e of the equipment is the length of time until the equipment is replaced in the course of renovation. For these purposes , lifetime is taken as 10 years. 60 Normally showerheads will last longer but with renovations and changes in owne rship a 10-year expected useful life is a good planning number. 

### Heat Pump Water Heaters (RE-37) Water heating is one of the largest energy uses in the home. In the ca se of electrically heated water, the annual water heating energy is about 4,800 kWh/yr. The heat pump water heater is esse ntially a small heat pump drawing heat from the air by cooling and de-humidifying it and injecting this heat into a storage tank. Physically, this measure consists of a small, self-contained heat pump and a water storage t ank and associated pumps and controls. 

### Measure Applicability This measure is applicable to the 40 percent of the residential se ctor with electric water heat. Of these, 50 percent are assumed to have a suitable location for the unit. Overall measure appl icability is assumed to be 20 percent of the residential sector.


### Incremental Cost The incremental cost of this measure consists of the cost of the hea t pump water heater, water storage tank and installation plumbing and general construction labor. The siting of such a unit i s important; it should never be sited in an attic and freezing situations should also be avoided. Therefore, some spe cial site adaptation and plumbing may be necessary. For this study we will take $2,500 as the cost; others report lower costs but we do not think these take adequate account of special site costs. 

### Average Annual Expected Savings For this study it is assumed that the heat pump water heater will perfo rm with a coefficient of performance of 2, leading to annual savings of 2,000 kWh/yr. 

### Expected Useful Life The useful life of this measure is assumed to be that of a similar appli ance, a window air conditioner, 18 years. 

### Tankless Water Heaters (RE-38) Water heating is one of the largest energy uses in the home. In the c ase of electrically heated water, the annual water heating energy is about 4,800 kWh/yr. This measure saves energy by el iminating the standby energy losses attributable to a hot water storage tank. However these relatively small energy savings are at the cost of a significant demand increase. In the case of gas water heating, this type of measure has greater energy savings and no troublesome demand savings, and the measure makes sense. In the context of a switc h from an electric tank to an electric tankless heater, this measure makes no sense.

60 DEER Database, 2005Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 157 

### Measure Applicability This measure is applicable in the residential sector only where spa ce is a premium.


### Incremental Cost The incremental installed cost for this measure is $1,500. 

### Average Annual Expected Savings The expected savings are 400 kWh per year. But it should be recognized that this type of appliance has a negative demand impact. 

### Expected Useful Life This measure’s expected useful life is 18 years. 

### Solar Water Heaters (RE-39) Water heating is one of the largest energy uses in the home. In the ca se of electrically heated water, the annual water heating energy is about 4,800 kWh/yr. Countless demonstration cases have s hown that solar energy can supply all or a portion of this heating. The portion of the water heating load as sumed by a solar water heater depends on the size of the solar water heater in relation to the size of the load. Field experience has shown that the best combination of system size to load favors the more moderately sized s ystems that can fully meet the summer water heat load, but that only meet about 40-50 percent of the non-summer load. In physica l terms, this is a system consisting of about 40-65 square feet of solar collector and an additional 80 gallon heated water storage tank and appropriate pumps and controls. 

### Measure Applicability This measure is intended to apply to the 40 percent of residential cust omers with electrically heated hot water. Of these electric hot water customers, only 50 percent are assumed to have an ad equate solar exposure and an adequate roof mounting site. Overall measure applicability is assumed to be 20 percent of the residential sector.


### Incremental Cost The installation of a solar water heating system involves a mix of buildi ng skills including plumbing, electrical, roofing and general carpentry. In the general market, a turn-key installa tion for one of these systems is in the range of $5,000 to $7,000. For this study we will take the cost to be $6,000. 

### Average Annual Expected Savings The savings from solar water heaters depend on site specifics, princip ally solar radiation, air temperature, incoming water temperature, and hot water usage rate. Considering these dependencie s for the DEO service area, leads to average annual savings for an appropriately sized system of 2,600 kWh/yr. 

### Expected Useful Life Solar water heating systems are essentially plumbing fixtures that are certified products (SRCC) and are often inspected by local building officials. A well designed system will have a lifetime in excess of 25 years, even though the system will take some intermediate maintenance such as inspec ting the pump and fluid level. This study will take 25 years as the useful life. 

### Efficient Plumbing (RE-40) This measure saves hot water heating energy by leaving less hot water in the pipes to cool during periods of nonuse. Conspicuously, the primary motive for this measure is the amenity ben efit of limiting the waiting time for usable hot water at the tap or showerhead; waiting times can be reduced f rom a significant fraction of a minute to only a few seconds. Physically this measure involves the use of smaller diameter continuous PEX water pipes with no elbows or Tees and the use of carefully sized pipe manifolds. While thi s measure is tested and viable it involves the use of small diameter piping in a context that is not familiar to th e plumbing trade or to building officials. It is therefore considered an emerging technology and will not be included in progra m recommendations.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 158 

### Measure Applicability This measure is applicable to 100 percent of the residential new constru ction.


### Incremental Cost In large scale use, this measure offers the possibility of actua lly lowering the cost of hot water plumbing because smaller diameter less expensive pipe is used. But specialized manifol ds and system planning are required. Therefore for this study an incremental cost of $500 is assumed. 

### Average Annual Expected Savings The savings from this measure have not been widely measured but savings of 10 per cent of the hot water end-use are reasonable. For this analysis, savings is assumed to be 500 kWh/yr. 

### Expected Useful Life This is a very long-lived measure and an expected useful life of 25 years can be assumed. 

### Micro Combined Heat and Power (RE-41) This measure is a form of site generation. There are two general class es of combined heat and power. The first class is applied to large steady thermal loads, usually at an industrial scale. This first class has a high load factor and is very rare in a residential context. The second class of combined he at and power has a low load factor, typical of the highly seasonal heating load in the residential sector. This second class, referred to here as “micro CHP”, is considered here as a residential measure. In this context it is intended to apply to existing residential space heat and water heat loads. Electricity generated by CHP applied to a n existing gas thermal load has a unique efficiency opportunity in terms of fuel use and in terms of carbon offset becaus e the fuel use associated with the generated electricity is only the marginal increase in gas use. The C HP resource is strongly favored from the perspective of carbon calculations, and it also has significant benefit a s summer capacity, and as local backup power. Notably, this resource is based on ultra clean and quiet combustion in ste rling cycle engines or fuel cells, and it can potentially be readily sited anywhere in the service terri tory and used to balance distribution. System sizes range from about 1 kW to 8kW electrical output. For this estimate of technical potential an electrical output of 4 kW is assumed. 

### Measure Applicability This measure is applicable to residences with gas space and water heat

. 

### Incremental Cost This measure is not currently a mature market item and costs reflec t the demonstration nature of the resource. For these purposes we will take the cost as $2,500/kW, $10,000 for the installation assum ed here. 

### Average Annual Expected Savings The savings from this measure have not been widely measured but based on the ava ilable space and water heating load an electrical output of 5,000 kWh/yr is assumed. A greater annual output coul d easily be achieved, but only by generation with no useful thermal load which would be much less fuel efficien t. 

### Expected Useful Life This measure is assumed to have an expected useful life of 20 years. 

### Residential LED Lighting (RE-42) LED lighting applications use much less energy than incandescent or meta l halide lighting applications. At the present the color of “white” LED light is somewhat blue tinted and not alw ays suitable for general interior applications. But this color is often suitable for specialty application s such as back lighting of flat panel displays, and outdoor applications. It is probable that LED lighting will find its plac e ultimately in many applications. The application considered here is an LED outdoor light, often referred to as a “ cobra light” which is used to illuminate parking lots and outdoor areas.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Measure Applicability This measure is still evolving but will likely be applicable to a larg e percentage of the residential sector.


### Incremental Cost The incremental cost for an outdoor LED light of this type is taken here t o be $500, and is expected to decrease as the market matures. A significant and favorable cost impact for this measure is its long life, leading to maintenance savings in cases where the light is difficult to access. 

### Average Annual Expected Savings Measure savings proceed from the replacement of a 250 watt light by a 19 wa tt LED assembly. The annual savings for a light used all night and all year are taken here as 1,000 kWh/yr. 

### Expected Useful Life The expected useful life for this measure is 20 years.


### Sources DEER: 2004-05 Database for Energy Efficient Resources (DEER) Version 2.01 October 26, 2005 developed by the California Public Utility Commission and the California Energy Com mission.
C&RD: Northwest Power and Conservation Council’s Conservation Resource Com ments Database, which is continually updated as new information becomes available.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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## APPENDIX D. NON-RESIDENTIAL ELECTRIC EEM DOCUMENTA TION

The purpose of this appendix is to provide documentation of the assumptions used to s creen the Commercial Energy Efficiency Measures identified for consideration in this report . Our assumptions are based on references cited throughout this section as well as the direct experience of our te am with technologies in the field and actual DSM program evaluations. While not all of the field and DSM program experie nce can be cited in published works, published references are used to establish a reasonable range of as sumptions. The point estimate used within that range is based on our professional opinion. The mapping of EEM to non -residential DSM programs is shown in the table below.

Table 88. Mapping of Electric EEM to Non-Residential DSM Programs
Program # 5 6 7 8 9

End-Uses EEM Description EEM Ref # C&I Rebates C&I Peak

Retro-Com Lite C&I HVAC

Opt C&I

Audit C&I New

Constr

Customer-Sited Generation Solar Photovoltaic CE-1 Small HVAC Optimization and Repair CE-2 1.0 Commissioning - New CE-3 Re/Retro-Commissioning Lite CE-4 1.0 Low-E Windows 1500 ft2 New CE-5 Low-E Windows 1500 ft2 Replace CE-6 Premium New HVAC Equipment CE-7 C&I Space Conditioning

Large HVAC Optimization and Repair CE-8 Integrated Building Design (new) CE-9 1.0 Design (new) Efficient Package Refrigeration (new) CE-10 0.02 Electrically Commutated Motors CE-11 0.03 Premium Motors CE-12 0.03 Motors and Drives
Variable Speed Drives, Controls and Motor Applications Tune-Up CE-13 Energy Star Transformers (new) CE-14 0.01 Power Distribution Efficient AC/DC Power CE-15 Data Processing Network Computer Power Management CE-16 New Efficient Lighting Equipment CE-17 0.10 Retrofit Efficient Lighting Equipment CE-18 0.75 LED Exit Signs CE-19 0.25 LED Traffic Lights (10) CE-20 0.03 Lighting

Perimeter Daylighting CE-21 Low Flow Fixtures CE-22 Solar Water Heaters CE-23 Water Heating
Heat Pump Water Heaters CE-24 Energy Star Hot Food Holding Cabinet CE-25 Energy Star Electric Steam Cooker CE-26 Pre-Rinse Spray Wash CE-27 Cooking and Laundry

Restaurant Commissioning Audit CE-28 0.48 Grocery Refrigeration Tune-Up and Improvements CE-29 0.12 Refrigeration
Refrigeration Casework Improvements CE-30 0.12 VendingMiser® CE-31 Other LED Outdoor Lighting CE-32 0.20Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Solar Photovoltaic (CE-1) This technology consists of a roof or ground mounted solar electric array with a full sun output of 40 kW. Such an array has an area of 4,000-6,000 square feet. Electricity from the array is co nverted to AC by an inverter and the power is immediately used on-site with excess fed into the grid. This t echnology needs full solar exposure and shadows can significantly restrict output. In the commercial context, thi s technology can be an architectural enhancement. 

### Measure Applicability This measure is applicable wherever there is sufficient space and solar exposure. For this study we assume applicability to 25 percent of large buildings.


### Incremental Cost A system installation usually requires an electrical inspection to ver ify appropriate wire sizing, disconnects, and grounding. Costs are quite site-specific, with most of the costs associat ed with the solar electric panels. In the current supply constrained 2007 market, costs are $5.00-$7.00/watt peak for the sola r cells alone. Installation and balance of system can be expected to add $3.00/watt. For the 11 kW array conside red here, the total cost will be taken as $90,000 61 , or $8.25/watt. 

### Average Annual Expected Savings The electrical output for this technology is directly related to the sol ar intensity. Monitoring studies in this region of the US have shown that 1 kW of installed capacity can yield in excess of 1,100 kWh/yr. For the 11 kW array considered here the annual savings will be taken as 12,000 kWh/yr. 

### Expected Useful Life This equipment demonstrated long trouble free service in severe applicat ions such as remote communications, navigation lighting, and road signage. The long-term output of the cells is assumed to decrease with time, but the rate of decrease for current technology is not known. The crystalline and semi-crystalline forms of the technology have already demonstrated degradation of less than 20 percent in 20 years. Bu t earlier thin film forms of the technology have shown shorter lifetimes. The lifetime of new thin film tec hnologies is expected to be of the order of 25 years but it is not known. For these purposes the lifetime is taken as 25 year s. 62



### Small HVAC Optimization and Repair (CE-2) This measure applies to packaged rooftop units. These units are the predomina nt means of conditioning for smallto-medium scale commercial buildings. The savings proceed from improved c ompressor performance, better run time control, and fresh air cooling. These rooftop units are a homogenous pool of equipment that has been identified as underperforming. Typically, the refrigerant charge is out of specification, the economizers perform poorly if at all, and the airflow is too low for proper operation. Many utiliti es (eg, SCE, PG&E, National Grid) are offering programs employing a structured diagnosis and repair protocol. Oft en these programs use trade named processes such as Proctor Engineering “check me”, or PECI “aircare plu s” etc. Candidates for this measure are rooftop units found in a wide range of sizes with output capacities of from 4 to 50 tons w ith the most predominant capacity being 5 tons. 

### Measure Applicability This measure is applicable in 70 percent of the large building commerc ial sector.


### Incremental Cost The cost for this technology includes site visits and diagnostics with simple r epairs performed immediately without need for a second site visit. The costs will naturally vary with the spec ifics of the repair. Planning estimates for

61 The C&RD Database lists the incremental capital co st as $6,000 per kW, which is somewhat lower for an installed 11 kW system. 62 The Conservation and Renewables Database lists a m easure life of 20 years for standard technology sol ar PV.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 162 this diverse mix of treatments, made by the Northwest Power and Conservation C ouncil (NWPCC), use $0.20/first year kWh savings. In the average large commercial building considered her e, the cost will be $1,123/site treated. 

### Average Annual Expected Savings Savings vary from unit to unit, but in the cases where there have been signi ficant corrections to the refrigerant charge or to economizer operation savings on the order of 2,500 kWh/unit have been obse rved. In the average commercial large building considered here, we will assume 5,617 kWh/yr as the w hole building savings where 2-3 units have been improved. These units usually supply gas heating as well, and the econom izer and control improvements will result in gas savings. For this analysis, we will assume gas savings of 238 therms/yr. 

### Expected Useful Life There are inherent limitations to the lifetime of the treatment provided by this measure. The improvements may be superseded by operational changes, and the remaining lifetime of the treate d unit may be limited. The effective life of this measure is taken as 5 years. 

### Commissioning New and Retro (CE-3, CE-4) Commissioning is a systematic step by step process of identifying and cor recting problems and ensuring system functionality. Commissioning seeks first to verify that the system desi gn intent is properly executed, and it goes further by comparing actual building energy performance to appropriate bench mar ks to validate building performance as a whole. The best candidates for this measure are buildi ngs larger than about 100,000 square feet. While commissioning in general can become quite complex, often the greatest sa vings proceed from a simple review of building operations to assure that the building is not being unnecess arily used during non-occupied times. New Commissioning (CE-3) should be done as part of the construction contract, and mos t contractors will claim that this is normal business. But the performance of even new buildings is of ten erratic for a year or two while unnoticed problems come to light. This new commissioning is a detailed proces s of initial calibration and control sequence testing or verification. The initial process is usually not done well, but even so, the initial commissioning is inherently limited because usually it takes about a year of building operat ion to see how the building actually operates as a whole. By contrast, Re/Retro-Commissioning (CE-4) seeks t o tune a building that is already operating and has a track record of a year or two at least. The Retro-Comm issioning process starts with an analysis of the utility bills for all fuels, which to a trained eye will show the larger general operational problems which are then followed up with a limited scope site visit. Retro-Commissioning is us ually necessary even for buildings that have been initially commissioned. There will be the occasional building w hich after years of operation will have its controls so mixed up that it will need a comprehensive new commissioning CE- 3. In practice the New Commissioning is the larger more complicated job, while Retro-Commiss ioning is more superficial and focused on finding and fixing major problems only. 

### Measure Applicability In this analysis New Commissioning is assumed to take place on 100 percent of new commercial stock as a matter of proper business. Retro-Commissioning is applicable in 75 percent of the exist ing commercial sector, and after a few years, to all of the new commercial buildings.


### Incremental Cost The cost for this technology is quite site-specific, based on NWPCC estimat es new commissioning costs about $0.37/kWh/yr, which for a typical large commercial building of 100,000 square feet, would be about $37,000. For this study we are assuming a brief version of retrofit commissioning. R etro-Commissioning, or “commissioning lite”, that prescreens buildings on the basis of billing data and follows i t with a site visit. This lighter commissioning is assumed to cost $3,000/site. In this analysis, all program- related commissioning is the Retro Commissioning and the New Commissioning is assumed to be part of the construc tion process. 

### Average Annual Expected Savings Savings from this measure can vary widely. For New Commissioning, it is a ssumed here that the building electric energy use can be reduced by on average 20 percent, leading to energy savings of 40,630 kW h/yr for an average large commercial building. For Retro-Commissioning electric saving s of 15,236 kWh/yr for the average largeOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 163 building are assumed. A significant portion of the energy savings due to both of the se measures is associated with the heating fuel, usually gas. In estimates of program cost effective ness for electric utilities are usually not valued which often underrates the cost effectiveness of this measure. 

### Expected Useful Life There are inherent limitations to the lifetime of the treatment provided by this measure. The improvements may be superseded by operational changes, and the remaining lifetime of the treate d unit may be limited. The effective life of this measure is taken as 5 years.



### Low-E Windows New and Replace (CE-5, CE-6) This measure saves energy by reducing the thermal losses and gains through w indows. This measure assumes that the efficient window has a heat loss rate of 0.45 BTU/deg F hr, representing the performance of a quality, double glazed argon filled low-e window. The original window is assumed to have a heat l oss rate of 0.75 BTU/deg F hr, representing the average losses from a mix of single and double glazed windows

. 

### Measure Applicability This measure is applicable in 100 percent of new commercial buildings and 30 percent of existing commercial stock.


### Incremental Cost The incremental cost for this technology depends strongly on the context of use. If the efficient windows are used in a replacement context, then the full cost of $20/sqft is applicable which leads to a total cost of $30,000 for the average building considered here. But if the efficient windows are used as an upgrade in new construction then an incremental cost of only $3.00/sqft is used, leading to a total cost of $4,500 for t he average building in this study. 

### Average Annual Expected Savings It is assumed here based on DEO specific simulations that 1,500 square feet of h igh efficiency window replacement will have savings of 14,979 kWh/yr for an electric-heated building. 

### Expected Useful Life This is a very long-lived measure with an assumed life of 25 years. 

### Premium New HVAC Equipment (CE-7) Premium new HVAC equipment employs more efficient motors/pumps and larger hea t exchangers and pipes to lower operating energy requirements. Premium equipment is often designated w ith and energy star rating or by CEE as tier I or tier II, or it may not have an official rating, but it does del iver slightly improved performance and is usually sold as such. Premium HVAC equipment is a very broad category including efficient variable speed fans, and efficient chillers, efficient ice makers, and efficient packag ed roof top units. It should be noted that rooftop units serve more than half the commercial space, and they have therefore been the subject of an ongoing efficiency improvement campaign by CEE and the industry. 

### Measure Applicability This measure is applicable in 100 percent of new commercial construct ion.


### Incremental Cost The incremental cost for this technology will be very diverse and quite s ite specific. Based on NWPCC estimates, the premium upgrade costs about $0.46/kWh/yr. For the average building consider ed here that cost would be $2,603/site. 

### Average Annual Expected Savings Savings attributable to this measure are generally fairly smal l because they represent only an incremental improvement in performance on equipment that is already required to be reasonab ly efficient. It is assumed hereOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 164 that the savings in new construction will be 3 percent of total energy use, in the average building considered here that is 5,617 kWh/yr. 

### Expected Useful Life The premium upgrades can be expected to last the life of the equipment, take n here as 15 years.



### Large HVAC Optimization and Repair (CE-8) This measure refers to restoring large HVAC equipment to its nominal operating performance. This measure needs to be distinguished from commissioning which is used to refine the controls o f large HVAC which generally leads to large savings. By contrast this measure applies to the operation of the e quipment and includes chiller and condensing tower cleaning, filter maintenance and tune-up etc. It also includes the optimization of economizer operation by verifying that the enthalpy sensors and economizer controls are fu nctioning properly. 

### Measure Applicability This measure is applicable in 20 percent of the commercial sector wi th large HVAC systems.


### Incremental Cost The incremental cost for this technology will be very diverse and quite s ite specific. Based on NWPCC estimates, the premium upgrade costs about $0.34/kWh/yr. For the average building consider ed here that cost would be $2,493/site. 

### Average Annual Expected Savings Savings attributable to this measure are generally fairly smal l because they claim only the savings due to restoring equipment to its original operation. For this study these savings are as sumed to be 3 percent of building energy use. On the average building, savings will be 7,293 kWh/yr. 

### Expected Useful Life There are inherent limitations to the lifetime of the treatment provided by this measure. The improvements may be superseded by operational changes, and the remaining lifetime of the treate d unit may be limited. The effective life of this measure is taken as 5 years. 

### Integrated Building Design (CE-9) This measure applies to new construction where careful design and specific engineering can get beyond the rules of thumb, leading to the use of smaller equipment more carefully matched to loa d. Integrated design refers to an approach commonly used to design energy efficient new commercial buildings. Es sentially, the design process lowers building loads, then carefully matches HVAC equipment to the lower ed load. In practice the most significant characteristic of efficient new commercial buildi ngs is significantly reduced lighting loads and often reduced plug loads. The other important characteristic is enhanced building shell performance through improved insulation and solar shading. Taken together these improvements result in significantly altered heating and cooling loads. Typically, the cooling loads will be significantly reduced, whi le the changes to the heating loads are more complex. The reduced internal gain from lighting etc will actually incr ease the gross heating loads, which the shell improvements may reduce somewhat through insulation or solar gain. The altered heating and cooling loads will usually not conform to established equip ment sizing rules of thumb, which generally result in oversized equipment. A primary objective in inte grated design is to down size the equipment leading to more efficient operation, and often leading to installa tion cost savings. It is notable that the shell improvements will usually result in more stable and comfortable int erior wall and glazing surface temperatures that permit alternative and reduced means of heating and c ooling distribution which can lead in turn to reduced fan or pump energy, leading to significantly more efficient heating and cooling distribution strategies. This reduction in distribution can also result in reduced installation costs. The int egrated design process usually employs building modeling, but as more efficient new commercial building experience develops, a few basic strategies are emerging which can be used without recourse to costly building modeling. (cf New Buildings Institute, Core Performance Guide).Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Measure Applicability This measure is applicable in 100 percent of new commercial construct ion, but in national chain or franchise designs, the integrated design may already have been done at the corporate level, or getting to a level of integrated design may require interaction at the corporate design level that may not be possible at the local level.


### Incremental Cost The incremental cost for this technology will be very diverse and quite s ite specific. The incremental costs of efficient new commercial buildings developed through integrated desig n are quite building specific, and may range widely from about $3.50/square foot to negative incremental cost. But in gener al, the incremental cost will be the net of some increased costs for various building elements (such as lighti ng, external shading elements, insulation, more efficient equipment, more sophisticated controls, etc), and some decreas ed costs resulting from reduced equipment sizes and simplified distribution strategies. There are exa mples of highly efficient new commercial buildings that have negative incremental costs, but a good rule of thumb is to ass ume that the incremental cost will be of the order of $1.75/square foot, or about $0.35/first year kWh saved. The particular incremental cost for a real building could be quite comple x to estimate. Therefore in order to minimize overhead, utility programs that provide incentives for integ rated design will base the incentives on modeled and deemed per square foot estimates of energy savings for princi pal occupancy types (retail, schools, offices, etc) for various HVAC systems and measure packages. Based on NWPCC estimates, the premium upgrade costs about $0.34/kWh/yr. For the av erage building considered here that cost would be $24,708/site. 

### Average Annual Expected Savings The savings due to integrated design will include the savings due to effic ient lighting, efficient HVAC equipment, and controls. Taken as a package these savings can easily be on the order of 20-40 percent of the standard code compliant design. The current US tax code allows preferred treatment for new buildings that are 50 percent better than code or lighting systems that are 30 percent better than code. For thi s analysis we consider 20 percent better than code to be an achievable and significant goal. For the average building cons idered here the savings are taken to be 72,929 kWh/yr. 

### Expected Useful Life Integrated design can be expected to last the life of the building, taken her e as 50 years. 

### Efficient Package Refrigeration (CE-10) This measure consists of an efficient packaged and optimized new refrig eration system. 

### Measure Applicability This measure is applicable in portions of the grocery sector and in some re staurants. The applicability is estimated here to be 4 percent of the commercial sector.


### Incremental Cost The incremental cost for this technology will be very diverse and quite s ite specific. Based on NWPCC estimates, the efficient packaged refrigeration costs about $0.15/kWh/yr. For the av erage building considered here that cost would be $3,604/site. 

### Average Annual Expected Savings It is assumed here that this measure can reduce a building energy use in applicable sites by 10 percent. The average commercial building considered here is assumed to save 24,310 kWh/yr. 

### Expected Useful Life Electrically commutated motors are assumed to have a useful life of 15 ye ars.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 166 

### Electrically Commutated Motors (CE-11) An electronically commutated motor is a more efficient motor with variable speed control capability. In fan and pump applications it can save energy by operating at a more efficient spee d. Refrigeration applications involving case cooling distribution fans are especially favored because the power reduction leads to a lower refrigeration load. 

### Measure Applicability This measure is broadly applicable throughout the commercial sector. For this study we assume the measure is applicable in 60 percent of the commercial sector.


### Incremental Cost The incremental cost for this technology will be very diverse and quite s ite specific. Based on NWPCC estimates, the premium upgrade costs about $0.33/kWh/yr. For the average building consider ed here that cost would be $1,624/site. 

### Average Annual Expected Savings It is assumed here that this measure can reduce a building energy use by 2 percent. The average commercial building considered here is assumed to save 4,862 kWh/yr. 

### Expected Useful Life Electrically commutated motors are assumed to have a useful life of 15 ye ars. 

### Premium Motors (CE-12) This measure saves energy by reducing energy losses in motors. Motor en ergy use is preponderant in manufacturing applications where of the order of 40-60 percent of electri c energy is used in motors, and these motor applications are frequently full time operation or near full time opera tion. Motor efficiency varies with the size of the motor as is illustrated in the figure below.

80 82 84 86 88 90 92 94 96 98

1 2 5 1 0 20 3 0 50 7 5 1

25 2

00
Rated Power, HPEfficiency Standard, percent standard

premium

Figure 47. Motor Efficiency Specification NEMA Premium

The figure above shows the efficiency improvement to be gained by using the more e fficient motor. While the efficiency gain is only about 2 percent for the smaller motors, it is impor tant because the duty cycle of many motor applications is of the order of 5,000-8,760 hours/year. In constant speed motor applications, an even greater electric energy savings may be available by properly matching the motor to its load. In particular, the efficiency of smaller m otors in the 1-10 horsepower range can vary greatly with the duty load on the motor as illustrated in Figure 48. In this figure it is evident that if a smaller motor is oversized relative to its load, the efficiency can be reduced by of the order of 10 percent.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 167 In motor replacement (and new motor) specifications, it is especially important to consider the fit of the motor to its load in terms of motor horsepower, speed, and starting torque. The greater p ortion of savings often rests with the proper match of the motor to its load. A simple one-for-one motor replacement can have unexpected results. An importa nt element in the use of higher efficiency motors is that the equilibrium speed of the higher efficienc y motor is often slightly higher than the speed of the lower efficiency motor that was replaced. In fan and pump systems this slight increase in speed will increase the fluid throughput and power. So although a more efficient motor has been used, it m ay actually lead to an unintended but slight increase in flow and power unless the drive system is a djusted to compensate.

0 10 20 30 40 50 60 70 80 90 100

0 0.25 0.5 0.75 1 1.25 Fraction of Rated LoadEfficiency, percent 1 HP

10 HP

100 HP

Figure 48. Typical Motor Operating Efficiencies versus Load


### Measure Applicability This measure is applicable in the new commercial and manufacturing se ctors, and in suitable retrofit situations. In all, this measure is taken as applicable to 60 percent of the commercia l and manufacturing sectors.


### Incremental Cost The incremental cost for this technology will be very diverse, and dependen t on the size of the motor. For this study we will take an incremental cost of $412 for the average site. 

### Average Annual Expected Savings The savings from an efficient motor must assume that the drive has been adjus ted as necessary to give equivalent flow or drive effort, and the savings will then depend strongly on the duty cycle hours/yr. For this average motor we take a duty cycle of 6,000 hours/yr and annual savings of 1,800 kWh/yr. For an aver age site the savings associated with premium motors is taken as 1 percent of energy use, 3,745 kWh/yr

. 

### Expected Useful Life This measure is essentially a built-in measure and is assumed to have a use ful life of 15 years. 

### Variable Speed Drives, Controls, and Motor Applications Tune-Up (CE- 13) This measure saves energy by providing an efficient way to match a motor to a varying load. Motor controls commonly referred to as variable speed or variable frequency drives, al ter the frequency applied to the motor and thereby permit the motor to run more efficiently at lower outputs. This control capability is particularly important in process applications where a pump or fan is being controlled to maintain a pa rticular and often varying fluid flow. Often the fluid flow is controlled by means of dampers or throttling val ves that force the fan or pump motor to operate inefficiently. The savings associated with the proper speed c ontrol are most pronounced when the motor is operating at less than its rated capacity. At full capacity t here may be little savings.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 168 Situations involving fans or pumps, (which is the most common commercial/i ndustrial application of motors), have a very high energy sensitivity to flow rate; typically the energy varie s as the cube of the flow rate. Attention to how the flow is controlled with the use of variable speed controls, and elimina tion of excess flow can often lead to power reductions of the order of 50 percent with only minor reductions in flow. In thi s manner, variable speed motor control permits finer tuning and control of pumps, fans, compressors, and conveye rs. There is another genre of motors and controls referred to as brushle ss permanent magnet torque motors. These are very high torque motors that have no drive and can be very precisely controll ed. These have very good positioning capabilities and are used in machining and manufacturing assembly operations. 

### Measure Applicability This measure is applicable in the new commercial and manufacturing se ctors, and in suitable retrofit situations. In all, this measure is taken as applicable to 30 percent of the commerci al and manufacturing sectors.


### Incremental Cost The incremental cost for this technology will be very diverse. Based on NW PPC estimates, an aggregated estimate of the costs of adjustable speed drives is about $0.86/kWh/yr. For the av erage building considered here that cost would be $20,937 site. 

### Average Annual Expected Savings It is assumed here that an application of drive control can save about 10 perc ent of the total building energy. In the average building considered here this measure can save 24,310 kWh/yr. 

### Expected Useful Life This measure is essentially a built-in measure and is assumed to have a use ful life of 15 years. 

### Energy Star Transformers (CE-14) This measure saves energy by reducing energy losses associated with s tepping down from high service voltages to typical service application voltages. In larger buildings and plants it is often more economic to distribute the power at high voltages to various floors and major areas where it is then stepped dow n to its ultimate application voltage through a transformer. These transformers are typically efficien t (>95%) when they are properly loaded, but an oversized or under loaded transformer can operate at a much lower efficiency; the refore, it is important that the transformers be sized properly. However, even when the transformer is p roperly sized, it is important to use the most efficient transformer because all power passes through it. Transformer efficiency varies with the size of the transformer as i llustrated in the figure below.

94 95 96 97 98 99 100

15 30 45 75 112.5 150 225 300 500 750 1000 Transformer Size KVAEfficiency Percent standard

efficient

Figure 49. Transformer Efficiency Specification NEMA TP-1Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 169 Figure 49 shows the efficiency improvement to be gained by using the more efficie nt Energy Star labeled transformer. While the efficiency gain is only about 1 percent for the smaller transformers it is important because all power runs through it and the percentage savings will be taken off t he top. 

### Measure Applicability This measure is applicable in the new commercial and manufacturing se ctors, and in suitable retrofit situations. In all, this measure is taken as applicable to 30 percent of the commerci al and manufacturing sectors.


### Incremental Cost The incremental cost for this technology will vary with the size of t he transformer. For this study, we take a 150 KVA transformer as the average with an incremental cost of $98 for the ty pical facility considered here. 

### Average Annual Expected Savings Transformer savings are based on the size of the transformer, and are ba sed on the power throughput of the transformer as well as standby losses, 8760 hours/year. For this av erage transformer operating at 60 percent of load, we estimate savings of 10,000 kWh/yr. For the average facility considere d here, savings are assumed to be one-half percent of energy, 1,215 kWh/yr. 

### Expected Useful Life This measure is essentially a built-in measure and is assumed to have a use ful life of 18 years. 

### Efficient AC/DC Power (CE-15) A modern office environment has a multitude of electronic appliances, most of which are powered by a small transformer AC/DC converter. Standard transformer based converter s are about 30-40 percent efficient. More efficient designs called switching power supplies operate with an effi ciency of about 90 percent. The energy savings for this measure proceed from switching to the more efficient power supplies. 

### Measure Applicability This measure is applicable in 100 percent of the commercial sector.


### Incremental Cost The incremental cost for this technology will be very diverse. Based on NW PCC estimates, the premium upgrade costs about $0.074/kWh/yr. For the average building considered here, that cost woul d be $271/site. 

### Average Annual Expected Savings Electronics and computers use 12 percent of commercial energy on a US ave rage basis. This equipment is often on 24 hours a day. It is assumed here that doubling the power supply efficiency from 45 t o 90 percent would save at least 1.5 percent of the total building energy or 3,646 kWh/yr for the average com mercial building considered here. 

### Expected Useful Life This measure is assumed to have a useful life of 5 years. 

### Efficient Network Management (CE-16) This measure involves powering down unused network functions during unoccupied hour s. 

### Measure Applicability This measure is technically applicable in 100 percent of the commerci al sector, but it is assumed that only 10 percent of the commercial sector will have the networks large enough a nd staff conversant enough to execute the

measure. 

### Incremental Cost The incremental cost for this technology will be very diverse. Based on NW PCC estimates, the premium upgrade costs about $0.115/kWh/yr. For the average building considered here, that cost woul d be $559/site.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 170 

### Average Annual Expected Savings Approximately 12 percent of commercial energy is for electronics and computer s. It is assumed here that, at an applicable site, 2 percent of energy can be saved by efficient network powe r management or 4,862 kWh/yr in the average building considered here. 

### Expected Useful Life This is a transient measure dependent on the current system configur ation. It is assumed to have a useful life of only 2 years. 

### New and Retrofit Efficient Lighting (CE-17, CE-18) Lighting efficiency is the major commercial efficiency measure. Li ghting accounts for 35 percent of commercial energy, and lighting also accounts for significant cooling energy that is save d when lighting is more efficient. There are literally hundreds of combinations of more efficient lighting e lements that can replace less efficient elements. This efficient lighting measure goes beyond the light sources only and includes lighting controls, bi-level switching and occupancy sensors. Taken together it is common to find efficient lighting that can reduce lighting energy by 30 percent from the minimum code required levels (ASHRAE 90.1, 2001). In fa ct, the 2006 energy legislation offers preferred tax treatment to lighting configurat ions that can reduce lighting energy by 30 percent. 

### Measure Applicability This measure is applicable in 100 percent of the new commercial buildi ngs and in 85 percent of the existing commercial sector.


### Incremental Cost The incremental cost for this technology is essentially the cost of th e efficient lighting components. These costs will be will be very diverse and site specific. Based on NWPCC estim ates, and averaging the full range of conditions, efficient lighting costs about $0.26/kWh/yr. For the average bui lding considered here that cost would be $6,394/site. For a retrofit application, the cost is increased by 25 percent to $7,992/site to allow for installation constraints. 

### Average Annual Expected Savings A comprehensive lighting retrofit or new building lighting can save about 30 percent of the 35 percent lighting enduse, in all 10 percent of building energy. In the commercial building considered he re, the average annual expected savings is 24,310 kWh/yr. 

### Expected Useful Life The useful life of the wide variety of lighting equipment varies widely from one light source or ballast to another. However, these elements are the replaceable elements in an overall system that is assumed to have a useful life of 18 years. 

### LED Exit Signs (CE-19) Typical existing exit signs are incandescent exit signs. This meas ure is designed to replace these typical exit signs with an Energy Star Light Emitting Diode (LED) Exit Sign which is more e fficient than the incandescent versions. 

### Measure Applicability In principal, this measure is applicable in the entire commercial sec tor, and there are no physical constraints to replacing existing exit signs, but to account for already installed LE D exit signs the applicability is assumed to be 85 percent of the commercial sector.


### Incremental Cost The incremental cost of an Energy Star LED Exit Sign over an incandesce nt exit sign is $45. For the average building considered in this analysis, 6 exit signs are assumed, for a full si te cost of $270.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 171 

### Average Annual Expected Savings The average annual expected saving for this replacement is 245 kWh/year. 63 In the average building considered in this analysis, there are assumed to be 6 exit signs, for a full site sa vings of 1,470 kWh/yr. 

### Expected Useful Life LED exit signs are very long-lived light sources. Accordingly, the useful life is taken as 15 years. 

### LED Traffic Lights 64 

### (CE-20) LED traffic lights save energy because LED light sources are a much m ore efficient and long-lived light source than the incandescent bulbs they replace. They save energy but they also sa ve in terms of bulb replacement costs. LED traffic lights have a variety of configurations. Each color (re d, Green, or yellow), each size (8 inch, or 12 inch) and each type (thru lane, left turn bay, right turn bay, and don’t walk large o r small) has different incremental cost, savings and effective useful life values. 

### Measure Applicability Measure applicability was not estimated due to lack of data on traffic lights in the DEO service territory. But for this analysis, it is assumed that there are 0.2 retrofittable inters ections for every commercial building.


### Incremental Cost Depending on the color, size and type, the incremental cost ranges from $110 to $225. For this analysis we consider LED traffic light replacements in groups of 10, approximately the number of lamp replacements necessary to refit an intersection. For this analysis we will assume the average replaced light costs $200 and that the full intersection with 10 replacement lights costs $2,000. This cost compares favora bly with the $1,850 cost derived from NWPCC data. These incremental costs do not assume an installation c ost. It is assumed that the installation is done by the agency controlling the lights, and that it is more than paid for by the ongoing maintenance savings. 

### Average Annual Expected Savings Depending on the color, size and type, the savings range from 111 to 808 kWh/year. For this analysis we consider LED traffic light replacements in groups of 10, approximately the number of lamp replacements necessary to refit an intersection. For this analysis we will assume the average repla ced light saves 500 kWh/yr and that the full intersection with 10 replacement lights saves 5,000 kWh/yr. 

### Expected Useful Life Depending on the color, size and type, the expected useful life ranges from 3 to 16 yea rs. For this analysis we will use 10 years. 

### Perimeter Daylighting (CE-21) This measure saves energy by reducing energy to lighting that is in or ad jacent to day lit spaces. Some cooling energy savings are also possible because well controlled day lighting contr ibutes less internal gain to a space. This measure controls lighting based on a well placed day light sensor. This measure also includes design and details to control glare or over lighting. 

### Measure Applicability This measure is applicable in the new commercial sector, and in suitab le retrofit situations. In all this measure is taken as applicable to 30 percent of the commercial sector.


### Incremental Cost The incremental cost for this technology will be very diverse. Based on NW PCC estimates, perimeter daylighting costs about $0.85/kWh/yr. For the average building considered here that cos t would be $6,195/site.

63 C&RD Database 64 All values for LED Traffic Lights are available in the C&RD Database.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 172 

### Average Annual Expected Savings It is assumed here that a full application of perimeter daylighting c an save about 3 percent of the total building energy. In the average building considered here this measure can save 7,2 93 kWh/yr. 

### Expected Useful Life This measure is essentially a built-in measure and is assumed to have a use ful life of 18 years. 

### Low Flow Fixtures (CE-22) This technology consists of a new showerhead rated at 2.0 gpm at 80 psi and a swive l aerator for any kitchen faucets, and fixed aerators for the lavatory faucets. The current US standard for showerheads is 2.5 gpm. And measurements of the existing shower flows in building stock show a range of 2.7 5 to 3.75 gpm with frequent individual cases showing in excess of 5 gpm. Evaluations have shown that progra ms that replace with 2.0 gpm heads have greater savings than programs that replace with the standar d 2.5 gpm shower heads. Program shower heads should be 2.0 gpm at 80 psi and with a lifetime scaling and clogging warranty. It is important also to be cautions about the use of “pressure compensating” showerheads. These ar e more prone to clogging, and can lead to unintentional increases in flow rate in low pressure situations such a s well water systems or older systems with occluded piping. Customer acceptability is an important component in a showerh ead program. Customers will remove new low flow showerheads if the quality of the showering experience decl ines with the new showerhead. Therefore it is important to research and test the showerhead chosen for t he program carefully. In addition the old showerhead must be removed from the premises to decrease the likelihood of having it reinstalled. 

### Measure Applicability This measure is applicable to circumstances where there is shower ing; such as, schools, hospitality, health clubs, etc. The best application will be a site where the water is heated e lectrically. For this analysis the applicability is taken as 10 percent of the commercial sector.


### Incremental Cost The incremental cost for this measure is taken as $1,000, reflecting t he installation of 15-40 showerheads by appropriately licensed professionals. Because the cost of the showerhea d varies significantly and quality is so important for this program, it is essential to test, choose, and pay for a hi gh quality showerhead. This measure is so cost effective that even with a more expensive showerhead the program wi ll still remain cost effective and a quality showerhead will ensure measure persistence. 

### Average Annual Expected Savings The average annual savings for this measure are directly related to th e daily number of showers taken. For this study the showering load is assumed similar to a residential one and the overa ll savings are taken as 6,000 kWh/yr, representing the savings from 15-40 showerheads. The flow of the showerhead use d has a significant impact on savings. Programs should be designed around a 2.0 gpm showerhead as compared to a 2.5 gpm showe rhead. Therefore the savings will be more than the 120–133 kWh per unit listed in DEER . In addition the climate is different and the inlet water temperature is lower so the savings in t his DEO program will be greater. Several studies have measured final savings in terms of electric input to the t ank, but usually these studies have included savings from comprehensive treatments including other measures includi ng tank and pipe insulation, kitchen and bath lavatory aerators, tank thermostat set back, and leaky diverter replacement. Savings can very from program to program depending strongly on the choice of showerhead. Savings can also diminish wit h “take back” in the event that the new showering experience is longer than the original. Actual s avings observed in the comprehensive cases include these take back effects, and are in the range of 650 to 950 kWh/yr. Th e savings from a showerhead and aerator change are assumed to be 500 kWh/yr. 

### Expected Useful Life The lifetime of this equipment is the key to its cost effectiveness. If an adequate, even pleasant, shower can be provided through lifetime warranted equipment, then the practical lifetim e of the equipment is the length of timeOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 173 until the equipment is replaced in the course of renovation. For these purposes, l ifetime is taken as 10 years. 65 Normally showerheads will last longer but with renovations and changes in owne rship a 10 year expected useful life is a good planning number. 

### Solar Water Heaters (CE-23) The water heating end-use in commercial buildings is a smaller end-use t han in residences. In the DEO service area large commercial water heating will be done by gas and it will not be a very good candidate for this measure. But the smaller commercial water heating applications will be resi dential scale in usage and often these smaller applications will be electrically heated. These are the candidate appl ications for this measure. In the case of electrically heated water, the annual water heating energy is about 4,800 kW h/yr. Countless demonstration cases have shown that solar energy can supply all or a portion of this heating. The portion of the water heating load assumed by a solar water heater depends on the size of the solar water heater in relation to the size of the load. Field experience has shown that the best combination of system size to load f avors the more moderately sized systems that can fully meet the summer water heat load, but that only m eet about 40-50 percent of the non summer load. In physical terms, this is a system consisting of about 40-65 square feet of sol ar collector and an additional 80 gallon heated water storage tank and appropriate pumps and controls. 

### Measure Applicability This measure is applicable to large commercial buildings with reas onably low hot water use, and the system is sized as if it were residential. This measure is taken as applicable to 25 per cent of the commercial sector.


### Incremental Cost The installation of a solar water heating system involves a mix of buildi ng skills including plumbing, electrical, roofing and general carpentry. In the general market, a turn-key installa tion for one of these systems is in the range of $5,000-$7,000. For this study the incremental cost will be $6,000. 

### Average Annual Expected Savings The savings from solar water heaters depend on site specifics, principa lly solar insulation, air temperature, incoming water temperature, and hot water usage rate. Considering these dep endencies for the DEO service area, leads to average annual savings for a system sized and designed to be i n the cost effective range to be 2,500 kWh/yr. 

### Expected Useful Life Solar water heating systems are essentially plumbing fixtures that are certified products (SRCC) and are often inspected by local building officials. A well designed system will have li fetime in excess of 25 years, even though the system will take some intermediate maintenance such as inspec ting the pump and fluid level. This study will take 25 years as the useful life. 

### Heat Pump Water Heaters (CE-24) The water heating end-use in commercial buildings is a smaller end-use t han in residences. In the DEO service area large commercial water heating will be done by gas, and it will not be a very good candidate for this measure. But the smaller commercial water heating applications will be resi dential scale in usage, and often these smaller applications will be electrically heated. These are the candidate appl ications for this measure. In the case of electrically heated water, the annual water heating energy is about 4,800 kW h/yr. The heat pump water heater is essentially a small heat pump drawing heat from the air by cooling and de-hum idifying it and injecting this heat into a storage tank. Physically, this measure consists of a small, sel f-contained heat pump and a water storage tank and associated pumps and controls. 

### Measure Applicability This measure is applicable to large commercial buildings with reas onably low hot water use, and the system is sized as if it were residential. This measure is taken as applicable 25 per cent of the commercial sector.

65 DEER Database, 2005Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Incremental Cost The incremental cost of this measure consists of the cost of the hea t pump water heater, water storage tank and installation plumbing and general construction labor. The siting of such a unit is important; it should never be sited in an attic, and freezing situations should also be avoided. Therefore, some spe cial site adaptation and plumbing may be necessary. For this study we will take $2,500 as the cost; others report lower costs, but we do not think these take adequate account of special site costs. 

### Average Annual Expected Savings For this study it is assumed that the heat pump water heater will perfo rm with a coefficient of performance of 2, leading to annual savings of 2,000 kWh/yr. 

### Expected Useful Life The useful life of this measure is assumed to be that of a similar appli ance, a window air conditioner, which has an expected useful life of 18 years.



### Energy Star Hot Food Holding Cabinet (CE-25) This measure saves energy by keeping prepared food warm more efficie ntly; they are 60 percent more efficient than standard models. These models have better insulation, and may have magneti c door gaskets, auto-door closers, or Dutch doors. 

### Measure Applicability This measure is applicable in portions of the restaurant hospitality and e ducation sectors, and the applicability is estimated here to be 7 percent of the commercial sector.


### Incremental Cost For the average building considered here, the cost would be $1,100/site. 

### Average Annual Expected Savings It is assumed here that this measure will save 3 percent at a suitab le site or 4,100 kWh/yr 66 in terms of the average building considered here. The DEER Database confirms this value with a va lue of 4,029. 

### Expected Useful Life This measure is assumed to have a useful life of 15 years. 

### Energy Star Electric Steam Cooker (CE-26) This measure saves energy by cooking food more efficiently. It also save s water and cooling energy. 

### Measure Applicability This measure is applicable in portions of the restaurant hospitality and e ducation sectors. The applicability is estimated here to be 7 percent of the commercial sector.


### Incremental Cost For the average steam cooker considered here, the incremental cost woul d be $5,000/site. 

### Average Annual Expected Savings It is assumed here that this measure will save 1.5 percent at a suitable site or 2,200 kWh/yr in terms of the average building considered here.

66 Energy Star Website: http://www.energystar.gov/in dex.cfm?c=hfhc.pr_hfhcOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Expected Useful Life This measure is assumed to have a useful life of 15 years. DEER lists a s lightly more conservative value of 12 years. 

### Pre-Rinse Spray Wash (CE-27) This measure applies to the commercial sector and provides a low press ure nozzle for pre-washing dishes. Using a low pressure nozzle saves water and heating energy in commercial kitc hen settings. 

### Measure Applicability This measure is applicable in portions of the restaurant hospitality a nd education sectors. The applicability is estimated here to be 7 percent of the commercial sector.


### Incremental Cost Based on NWPCC estimates, the pre-rinse spray wash costs about $0.03/kWh/yr . For the average building considered here that cost would be $308/site. 

### Average Annual Expected Savings It is assumed here that this measure will save 5 percent at a suitab le site or 12,155 kWh/yr in terms of the average building considered here. 

### Expected Useful Life This measure is assumed to have a useful life of 15 years. 

### Restaurant Commissioning Audit (CE-28) This measure consists of an audit conducted by a restaurant energy profess ional to identify the potential for efficiency in a commercial kitchen. Savings proceed from small things s uch as leaky faucets and unnecessary equipment operation to larger things such as major process changes. Since ki tchen equipment is energy intensive the audit includes identification of cost effective equipment changes. 

### Measure Applicability This measure is applicable to commercial kitchens in the restaur ant, hospitality, and education sectors.


### Incremental Cost The incremental cost for this measure is limited to the cost of t he audit only. The cost of any major equipment changes is associated with other measures. The cost for the audit is ass umed to be $1,794, $.0738/kWh/yr. 

### Average Annual Expected Savings It is assumed here this measure can reduce the energy use in an applicabl e facility by 10 percent, or 24,310 kWh/yr for the average building considered in this analysis. 

### Expected Useful Life This measure will have a relatively short life; it is assumed t o be 5 years.



### Grocery Refrigeration Tune-Up and Improvement (CE-29) This measure consists of cleaning heat exchangers and assuring proper a irflow at the freezer cases and condenser coil. It also involves appropriate belt adjustment and refrigeration charge correction and the addition of a floating head pressure control if appropriate. 

### Measure Applicability This measure is applicable in portions of the grocery sector and in some re staurants. The applicability is estimated here to be 4 percent of the commercial sector.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Incremental Cost Based on NWPCC estimates, the grocery refrigeration tune-up costs about $0.19/ kWh/yr. For the average building considered here that cost would be $4,608/site. 

### Average Annual Expected Savings It is assumed here that this measure will save 10 percent at a suitable site or 24,310 kWh/yr in terms of the average building considered here. 

### Expected Useful Life This measure is assumed to have a useful life of 5 years.



### Refrigeration Casework Improvements (CE-30) This measure refers to improvements to refrigeration casework th at can lower the refrigeration load. These include high quality insulated glass doors on the refrigeration case or other transpa rent refrigeration case covers that limit mixing of the warmer store air with the refrigerated air. Casework improvements also include attention to two refrigeration case auxiliaries that emit heat into the refrigerated space. The first is the anti-sweat heater made part of the clear refrigeration door to melt frost that could accumulate on the door and obscure the view of the contents. These heat ers are commonly on all the time when they are only needed during high humidity episodes with humidity greater than 55 perc ent. The control improvement is to control the anti-sweat heaters with a humidistat thus allowing operation only to times when it is needed. While this control improvement will depend on the store humidity and the specific heater size, the savings for a typical refrigeration case are estimated here to be 400 kWh/yr. The second heat emitting auxiliary is the small fans used to distribute the cooled air inside the refrigerated case. These fans typically use a small inefficient motor coupled to an ineffic ient fan blade. In a typical medium-sized refrigeration case the existing fans may use about 70 watts, with the effic ient fans using only about 20 watts, for a savings during 8,760 hours/yr of 50 watts or about 450 kWh/yr/case. 

### Measure Applicability This measure is applicable in portions of the grocery sector and in some re staurants. The applicability is estimated here to be 4 percent of the commercial sector.


### Incremental Cost Based on NWPCC estimates, an average refrigeration case upgrade costs about $0.33/kWh/yr. For the average building considered here that cost would be $4,011/site. 

### Average Annual Expected Savings It is assumed here that this measure will save 5 percent at a suitab le site or 12,155 kWh/yr in terms of the average building considered here. 

### Expected Useful Life This measure is assumed to have a useful life of 10 years. 

### VendingMiser ® 

### (CE-31) The VendingMiser ® is a controller placed on vending machines which powers down a vending machine duri ng low use times while maintaining product quality. It cycles the machine to ma intain temperature and uses occupancy sensors to control the lighting on the vending machine. 

### Measure Applicability This measure is assumed to be applicable in 25 percent of the commercial sector.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Incremental Cost The incremental cost for a VendingMiser ® unit is $179 and installation costs are expected to be $35.50 in labor for a total incremental cost of $215. 67 

### Average Annual Expected Savings Measure savings range from 800 to 1,200 kWh/yr, depending on the vending machine. Large machines with an illuminated front save 1,200 kWh/yr, and small machines or machines without an i lluminated front save 800 kWh/yr. For planning purposes, we will assume 1,000 kWh/yr. 

### Expected Useful Life The expected useful life for this measure is 10 years. 68 

### LED Outdoor Lighting (CE-32) LED lighting applications use much less energy than incandescent or meta l halide lighting applications. At the present the color of “white” LED light is somewhat blue tinted and not alw ays suitable for general interior applications. But this color is often suitable for outdoor applications and i t is probable that LED lighting will find its place in many outdoor applications. The application considered here is an L ED outdoor light, often referred to as a “cobra light” which is used to illuminate parking lots and outdoor area s. 

### Measure Applicability This measure is still evolving but will likely be applicable to a larg e percentage of the commercial sector.


### Incremental Cost The incremental cost for an outdoor LED light of this type is taken here t o be $500, and is expected to decrease as the market matures. A significant and favorable cost impact for this measure is its long life, leading to maintenance savings in cases where the light is difficult to access. 

### Average Annual Expected Savings Measure savings proceed from the replacement of a 250 watt light by a 19 wa tt LED assembly. The annual savings for a light used all night and all year are taken here as 1,000 kWh/yr. 

### Expected Useful Life The expected useful life for this measure is 20 years.


### Sources DEER: 2004-05 Database for Energy Efficient Resources (DEER) Version 2.01 October 26, 2005 developed by the California Public Utility Commission and the California Energy Com mission.

C&RD: Northwest Power and Conservation Council’s Conservation Resource Com ments Database, which is continually updated as new information becomes available.

67 DEER database, 2005 68 DEER database, 2005Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 178 

## APPENDIX E. RESIDENTIAL GAS EEM DOCUMENTATION

The purpose of this appendix is to provide documentation of the assumptions used to s creen the residential Energy Efficiency Measures (EEM) identified for consideration in this report . Our assumptions are based on references cited throughout this section as well as the direct experience of our te am with technologies in the field and actual DSM program evaluations. While not all of the field and DSM program experie nce can be cited in published works, published references are used to establish a reasonable range of as sumptions. The point estimate used within that range is based on our professional opinion. The mapping of EEM to re sidential DSM programs is shown in the table below.

Table 89. Mapping of Gas EEM to Residential DSM Programs
Program # 10 11 12 13 14 15

End-Uses EEM Description EEM Ref # Res

Whole House Res Rebates Res

Appl Recycle Res

New Constr Res

Solar Siting Res

Low/Mod Income Weath Solar Water Heater RG-1 EE Water Heater with EF >= 0.6 RG-2 0.011 EE Water Clothes Washer RG-3 Gas Clothes Dryer (Energy Star) RG-4 0.009 Gas Stove/Oven RG-5 Tank/Pipe Wrap RG-6 0.019 0.24 Low Flow Fixtures RG-7 0.600 0.36 Tankless WH Reqd RG-8 0.005 Appliance Efficiency

Tankless Discretionary RG-9 AFUE 65 to 82 SFe RG-10 AFUE 65 to 82 MFe RG-11 AFUE 65 to 92 SFe RG-12 AFUE 65 to 92 MFe RG-13 AFUE 82 to 92 SFe RG-14 0.013 AFUE 82 to 92 MFe RG-15 AFUE 82 to 92 SFn RG-16 AFUE 82 to 92 MFn RG-17 Programmable Thermostats RG-18 0.026 0.32 Proper HVAC Sizing RG-19 HVAC Tune-Up RG-20 Furnace Efficiency

CO Remediation RG-21 EE Windows RG-22 Ceiling Insulation (R11 to R38) RG-23 Ceiling Insulation (R30 to R38) RG-24 Ceiling Insulation (R19 to R38) RG-25 0.016 0.2 4 House Sealing using Blower Door RG-26 0.019 0.3 2 Duct Seal RG-27 0.019 0.32 Wall Insulation (R0 to R11) RG-28 0.016 0.20 Wall Insulation (R11 to R19) RG-29 Floor/Basement Insulation RG-30 Energy Star Construction RG-31 0.9 Shell Efficiency

Solar Siting RG-32 0.9Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 179 

### Solar Water Heaters (RG-1) Water heating is one of the largest energy uses in the home. In the ca se of gas-heated water, the annual water heating energy is about 250 therms/yr. Countless demonstration cases have show n that solar energy can supply all or a portion of this heating. The portion of the water heating load assumed by a sola r water heater depends on the size of the solar water heater in relation to the size of the load. Fiel d experience has shown that the best combination of system size to load favors the more moderately sized system s that can fully meet the summer water heat load, but that only meet about 40-50 percent of the non-summer load. In physical ter ms, this is a system consisting of about 40-65 square feet of solar collector and an additional 80 gallon heated water storage tank and appropriate pumps and controls. 

### Measure Applicability This measure is intended to apply to residential customers with gas-hea ted hot water.


### Incremental Cost The installation of a solar water heating system involves a mix of buildi ng skills including plumbing, electrical, roofing and general carpentry. In the general market, a turn-key installa tion for one of these systems is in the range of $5,000 to $7,000. For this study we will take the cost to be $6,000. 

### Average Annual Expected Savings The savings from solar water heaters depend on site specifics, princip ally solar insulation, air temperature, incoming water temperature, and hot water usage rate. Considering these dep endencies for the service area, leads to average annual savings for a system sized and designed to be in the cost ef fective range to be 137 therms/yr. 

### Expected Useful Life Solar water heating systems are essentially plumbing fixtures that are certified products (SRCC) and are often inspected by local building officials. A well designed system will have a lifetime in excess of 25 years, even though the system will take some intermediate maintenance such as inspec ting the pump and fluid level. This study will assume 25 years as the useful life. 

### EE Water Heater (RG-2) This measure applies to residential gas water heating. The more effici ent gas water heater will have thicker tank insulation and a slightly more efficient burner system. 

### Measure Applicability This measure is applicable to most of the residential stock.


### Incremental Cost An incremental cost of $180 is associated with the more efficient water heater. 

### Average Annual Expected Savings A more efficient water heater will achieve 50 therms/yr annual savi ngs according to our modeling. 

### Expected Useful Life The life of the savings for this measure depends on the quality of the materi als used. An expected useful life of 15 years is being used. 

### Energy Star Clothes Washers (RG-3) This measure involves obtaining an Energy Star clothes washer which is a mor e efficient clothes washer than a standard clothes washer. This measure has significant water and det ergent savings in addition to the water heater and dryer savings.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 180 

### Measure Applicability This measure applies to customers who do not currently have a high efficienc y clothes washer.


### Incremental Cost The incremental cost for clothes washers vary significantly depending on t he features. The value used in this analysis is $500, DEER lists a value of $565.82 and the C&RD lists $245.26. Due to the wi de variety of costs for Energy Star clothes washers, $500 is a good mid-range value for the purposes of t his analysis. 

### Average Annual Expected Savings The kWh savings from a clothes washer depend to a significant extent on the sour ce of the water heating and dryer’s energy source. If the water heater is a gas water heater the kWh savings are insignificant but if the source is an electric water heater the savings can be substantial. Savings also depend on whether the clothes washer has a built-in heat source which some do have. This analysis used 400 kWh. DEER lists 199 kWh and C&RD lists a range from 54 to 509 kWh depending on the model chosen. Savings will be assumed to be 30 therm s/yr because the program will be limited to customers with gas water heat and gas dry ers. 

### Expected Useful Life The expected useful life used in the analysis is 15 years; however, both DEE R and C&RD list 14 years. 

### Efficient Gas Clothes Dryer (RG-4) This measure applies to residential gas clothes dryers. The more ef ficient gas clothes dryers use more sophisticated controls to avoid over-drying the load resulting in shorter cycles and lower dr yer energy use. 

### Measure Applicability This measure is applicable to most of the residential stock.


### Incremental Cost The incremental cost of this measure is taken here as $100. 

### Average Annual Expected Savings This measure is expected to save 13 therms/yr annually. 

### Expected Useful Life An expected useful life of 18 years is being used. 

### Efficient Gas Stove (RG-5) This measure applies to residential gas cooking stoves. It involves spa rk or other ignition of burners and oven thereby saving the gas used in the pilot light. This is a common feature o f most new appliances. 

### Measure Applicability This measure is applicable to most of the residential stock.


### Incremental Cost The incremental cost of this measure is taken as $100. 

### Average Annual Expected Savings This measure will save 5 therms/yr. 

### Expected Useful Life The life of the savings for this measure depends on the quality of the materi als used. An expected useful life of 18 years is being used.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Tank/Pipe Wrap and W ater Temperature Setpoint (RG-6) This technology consists of checking and resetting the tank thermostat, and adding insulation to access pipes near the tank. These measures are principally tank-centric, and can be self-ins talled or by a site visit if the package is part of a broader program. Resetting the tank thermostat is also a safety issue because it can reduce scaling and burns due to too high a set temperature. 

### Measure Applicability This measure applies to residential gas water heaters.


### Incremental Cost The cost of this treatment breaks down as $5 for materials and $5 for insta llation labor. For these purposes the measure cost is taken as $10 because these measures will typically be part of a larger program. 

### Average Annual Expected Savings Based on prior experience and evaluation work on other programs it is estimate d that the savings would be about 2 therms/yr. 69 

### Expected Useful Life The lifetime of these measures is potentially quite long. For practic al purposes the lifetime will be considered limited by the expected remaining lifetime of the hot water tank, 6 year s. 70 

### Low Flow Fixtures (RG-7) This technology consists of a new showerhead rated at 2.0 gallons/minute (g pm) at 80 pounds/square inch (psi) and a swivel aerator for the kitchen faucet and fixed aerators for the la vatory faucets. The current US standard for showerheads is 2.5 gpm. Measurements of the existing shower flows in buildi ng stock show a range of 2.75 gpm to 3.75 gpm with frequent individual cases in excess of 5 gpm. Evaluations have sho wn that programs that replace with 2.0 gpm heads have greater savings than programs that replace with the st andard 2.5 gpm shower heads. Program shower heads should be 2.0 gpm at 80 psi and with a lifetime scaling and clogg ing warranty. It is important also to be cautious about the use of “pressure compensating” shower heads. These are more prone to clogging and can lead to unintentional increases in flow rate in low pressur e situations such as well water systems or older systems with occluded piping. Customer acceptability is an import ant component in a showerhead program. Customers will remove new low flow showerheads if the quality of t he showering experience declines with the new showerhead. Therefore it is important to research and test t he showerhead chosen for the program carefully. In addition, the old showerhead must be removed from the premises to dec rease the likelihood of having it reinstalled. 

### Measure Applicability This measure is applicable to customers in the residential and sma ll commercial sectors that heat water with gas.


### Incremental Cost Low flow fixture costs vary widely, and depend on whether the fixtures are purc hased retail or in bulk. The costs for a bulk purchase for a showerhead and three aerators also have a wide range , about $8.00-$15.00/set. The most important feature of these fixtures is the long term acceptabilit y and durability because these factors have a direct impact on the lifetime savings. With a long enough lifetime, this is such a cost effective measure that all prices in the range are quite cost effective. Because the cost of the showerhead va ries significantly and quality is so important for this program, it is essential to test, choose and pay the pric e for a high quality showerhead. This measure is so cost effective that even with a more expensive showerhead the pr ogram will still remain cost

69 Khawaja S. PhD and Reichmuth, H. PE., 1997. Impact Evaluation of PacifiCorp’s Ebcons Multifamily Prog ram. Pacificorp. 70 DEER says 15 years for pipe insulation, 9 years fo r faucet aerators, and 15 years for an efficient wa ter heater, so 6 years is conservative. The C&RD lists 10 years for a water heater with a minimum warranty of 10 years.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 182 effective and a quality showerhead will ensure measure persistence. T he installed cost will be taken as $25/residence. 71 

### Average Annual Expected Savings Field monitoring studies can demonstrate the flow savings, but ultimately the overall savings will be a combination of flow savings and the duration of use. The flow of the showerhead used has a signi ficant impact on savings. This program is designed around a 2.0 gpm showerhead as compared to a 2.5 gpm showerhead. Therefore the savings will be more than the 120–133 kWh per unit listed in DEER. In addition the clima te is different and the inlet water temperature is lower so the savings in this application will be gr eater. Several studies have measured final savings in terms of electric input to the tank, but usually these studies have inc luded savings from comprehensive treatments including other measures including tank and pipe insulation, kit chen and bath lavatory aerators, tank thermostat set back, and leaky diverter replacement. Savings can very from program to program depending strongly on the choice of showerhead. Savings can also diminish with “takebac k” in the event that the new showering experience is longer than the original. Actual savings observed i n the comprehensive cases include these takeback effects, and are in the range of 650 to 950 kWh/yr in electric water heat applications. The savings from a showerhead and aerator change are taken as 27 therms/yr. 

### Expected Useful Life The lifetime of this equipment is the key to its cost effectiveness. If an adequate, even pleasant, shower can be provided through lifetime warranted equipment, then the practical lifeti me of the equipment is the length of time until the equipment is replaced in the course of renovation. For these purposes, l ifetime is taken as 10 years. 72 Normally showerheads will last longer but with renovations and changes in owne rship a 10 year expected useful life is a good planning number. 

### Tankless Water Heaters (RG-8, RG-9) Water heating is one of the largest energy uses in the home. In the ca se of gas-heated water, the annual water heating energy is about 250 therms/yr. This measure saves energy by elimina ting the standby energy losses attributable to a hot water storage tank. This measure with a typical residential sized unit may only heat a limited water flow of the order of 3 gpm. This is sufficient for most residenti al situations, but it may have difficulty supporting multiple simultaneous showers. In the case of gas water heating, t his type of measure has greater energy savings and no troublesome demand savings, and the measure makes sense. In the conte xt of a switch from an electric tank to an electric tankless heater, this measure mak es no sense. 

### Measure Applicability This measure is applicable in the residential sector only where spa ce is a premium.


### Incremental Cost The incremental installed cost for this measure is $1,100 for a discret ionary water heater and $500 for a required water heater. 

### Average Annual Expected Savings The expected savings are 75 therms/year. 

### Expected Useful Life This measure’s expected useful life is 15 years. 

### Upgrade Furnace Efficiency (RG-10, RG-11, RG-12, RG-13, RG-14, RG-15, RG-16, R- 17) This measure applies to more efficient gas space heating. Two levels of efficiency improvement are considered. The first level of improvement involves an improved burner system and elect ronic ignition. These improvements increase the efficiency, AFUE from 65 to 82%, and these are the efficiency improvements required to meet the

71 The DEER Database lists measure costs as $22.946 p er unit and $37.946 installed cost. 72 DEER Database, 2005Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 183 1985 appliance efficiency standards. The next level of efficiency improve ment takes the efficiency AFUE to 92% by condensing water vapor in the burner exhaust gas and reclaiming the otherwis e vented energy. These eight measures all similarly refer to the replacement of a less eff icient gas heater with a more efficient one. The range of options is intended to reflect the broad range of replacement options. 

### Measure Applicability This measure is applicable to residential gas space heat.


### Incremental Cost The incremental cost for new gas heaters meeting the 82% AFUE standard i s technically zero because that efficiency is the current code standard. But Measures RG-10 and RG-11 ref er to a pre-emptive replacement and the full cost, $1,100, of the new code qualifying heater is used. Measures RG-12 and RG -13 refer to the replacement of a failed older heater with the highest efficiency better than cod e heater with an incremental cost of $750. Measures RG-14 through RG-17 refer to the use of the higher efficiency unit ins tead of the current standard with an incremental cost of $750. 

### Average Annual Expected Savings The average annual expected savings from this measure depends on the size of the residence. Based on simulations on different prototypes representing the most significant residential heating categories, we find gas savings in the range of 27-200 therms/yr as follows: RG-10 pre-emptive replacement-AFUE 65 to 82-existing single family- savin gs=156 therms/yr RG-11 pre-emptive replacement-AFUE 65 to 82-existing multi family- savings =98 therms/yr RG-12 high efficiency replacement-AFUE 65 to 92-existing single family- savings=200 therms/yr RG-13 high efficiency replacement-AFUE 65 to 92-existing multi family- sav ings=106 therms/yr RG-14 high efficiency replacement-AFUE 82 to 92-new single family- savings= 85 therms/yr RG-15 high efficiency replacement-AFUE 82 to 92-new multi family- savings= 55 therms/yr RG-16 high efficiency replacement-AFUE 82 to 92-new small single family- savings=45 therms/yr RG-17 high efficiency replacement-AFUE 82 to 92-new small multi family- sav ings=27 therms/yr



### Expected Useful Life A useful life of 25 years is used in this analysis for Measures RG-12 throug h RG-17 and 5 years for Measures RG10 and RG-11. 

### Programmable Thermostats (RG-18) Programmable thermostats save energy by lowering the average daily t emperature of the inside of a building. Most of the energy savings is heating energy because that heating thermal load is much larger than the cooling load, but some energy savings in cooling energy will also be realized. Programmable thermostats are commonly sold for self-installation. But the installation has the following four important issues that need to be considered.

• Some thermostats are line voltage thermostats, and there is some shock haza rd to the unaware.

• The first step in programming a thermostat is the system specificati on. Here the installer tells the thermostat what kind of a system it is controlling. The system type is se lected from a list of about 30-50 different system types. This is a non-obvious choice.

• For system controls there are standard colored wires, but often hookups use non-standa rd wire. For the mechanically inclined this process is okay but for others it is daunting.

• Then, after it is installed successfully there is the issue of controlling it to get satisfactory results. Sometimes this needs a guiding hand.
The US DOE is planning to phase out programmable thermostats from the Energ y Star program. The planned phase out is apparently related to recent evaluation studies that found insufficient savings to warrant the Energy Star designation. Proper installation and operation appear to be at the root o f the lack of energy savings. We have chosen to leave these devices in our mix of EEMs and feel that with proper installation and setup the technology is sound. Our incremental cost includes the cost of installation over-and-above t he off-the-shelf cost ofOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 184 programmable thermostats. Even with proper installation, there is an ongoing need for a design that is more userfriendly and easier to operate. 

### Measure Applicability This measure is applicable to all gas and electric heating install ations that do not have a programmable thermostat.



### Incremental Cost Programmable thermostats cost retail in the range of $50-$100. A utility prog ram may be able to purchase in bulk. It may be necessary to have a range of options which include at least line voltage and low voltage. For these purposes we take $70 as the melded cost of the thermostats. 73 It is assumed here that thermostats will be installed as part of a site visit in a broader program with $50 allocated for install ation labor. In total the installed cost will be taken as $120 per thermostat. 74 Some sites with line voltage thermostats may require more than one thermos tat. 

### Average Annual Expected Savings Thermostat savings are best realized when the set back interval is of t he order of 8 hours or longer, and the amount of savings depends on the number of degrees the thermostat is set back. The rule of thumb is 1 percent heating savings for every degree the thermostat is set back for at least 8 h ours. For this estimate a five degree thermostat set back is assumed, leading to heating savings in the average gas- heated home of 35 therms/yr. 

### Expected Useful Life In principal, these thermostats can last for in excess of 13 years, but t he backup batteries have a finite life and the programming can be changed or confused. In this case, the effective lifetime will be taken as 10 years. 75 

### Proper HVAC Sizing (RG-19) This measure applies to residential and small commercial gas-heat ed properties. It involves using rule-of-thumb engineering to avoid over-sizing the gas furnace. Oversized heating equipment can lead to energy losses through higher than necessary duct temperatures and losses and through unnecessary on/of f cycling. 

### Measure Applicability This measure is applicable to most of the residential stock.


### Incremental Cost The incremental cost of this measure is associated with the extra desi gn consideration which is taken here to be $50. It is possible that the incremental cost is negative in the event that a significant over-sizing is avoided. 

### Average Annual Expected Savings A gas-heated home will achieve 49 therms/yr annual savings according to ou r modeling. 

### Expected Useful Life The life of the savings for this measure depends on the quality of the materi als used especially for the gaskets for the windows and doors. An expected useful life of 18 years is being used. 

### HVAC Tune-Up (RG-20) This measure applies to residential gas heating. The furnace tune-up is accomplished in a brief visit that checks the filters with replacement, the burner with carbon monoxide (CO) check and com bustion air, the controls including the fan delay, and air leaks where the ducts mate with the furnace.

73 DEER lists the incremental cost as $56.30 and the installed cost as $73.33 per unit. 74 DEER lists the incremental cost as $73.33 of which $56.37 is equipment cost and $16.96 is labor. Thi s analysis uses $50 for the labor cost which accounts for some of the diffe rence in the costs. 75 DEER list the EUL as 12 years.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 185 

### Measure Applicability This measure is applicable to most of the residential stock.


### Incremental Cost The incremental cost of sending a technician to a home and performing a furnac e tune-up is taken here to be $75/site. 

### Average Annual Expected Savings Annual savings from the diverse tune-up measures are taken as 40 therms /yr, from weatherization impact analysis. 

### Expected Useful Life The life of this measure is taken as 3 years. 

### Carbon Monoxide Remediation (RG-21) This measure applies to residential gas heating. Part of a furnace tu ne-up is a check for carbon monoxide (CO) in the exhaust. Presence of carbon monoxide indicates incomplete combustion which is a significant furnace inefficiency. Carbon monoxide is also a significant health and safety hazar d and should be eliminated in all cases. The remedy is usually an adjustment of the primary air to the burner or cl eaning the burner. But in some cases the toxic carbon monoxide could find its way from the exhaust stream into the supply a ir through a cracked heat exchanger. A faulty heat exchanger is an immediate hazard and needs to be r eplaced immediately. 

### Measure Applicability This measure is applicable to gas-heated residential stock.


### Incremental Cost The incremental cost of sending a technician to a home is taken here as $200. T his cost does not include the cost of a new heat exchanger when one is indicated. The cost of the energy savings is a ttributed to the site cost of $200. Other costs are safety related. 

### Average Annual Expected Savings Carbon monoxide remediation can have very significant savings in extreme case s, of the order of 250 therms/yr. But for this study we will take 117 therms/yr annual savings for this treatm ent. 

### Expected Useful Life The life of the savings for this measure is taken as 10 years. 

### EE Windows (RG-22) This measure involves increasing window insulation from a U value of 1.1 BTU /sqft/hr deg F to a U value of 0.45. This measure saves both heating and cooling energy. In the case of gas-heat ed residences, the electric savings are for cooling only and are much less than the heating savings. So the cost effect ive application of this measure is to electric-heated residences only. 

### Measure Applicability This measure is considered applicable to a portion of residential cust omers that heat with gas.


### Incremental Cost We assume a cost of $25 per square foot of window area. DEER uses a value of $28.00/ square foot of window area, and C&RD uses $16/square foot. For the average residence considered he re with 100 square feet of window upgraded, the cost would be $2,500.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 186 

### Average Annual Expected Savings Savings from this measure are strongly dependent on the efficiency of the ga s heat source and the square feet of windows replaced. Building simulations from DEO specific data show saving s of 98 therms/yr for gas-heated residences and with an additional 400 kWh/yr cooling savings for gas-heated residences. 

### Expected Useful Life This analysis uses an effective useful life of 25 years, the DEER uses 20 years. 

### Ceiling Insulation (RG-23, RG-24, RG-25) This measure involves increasing ceiling insulation from R6 to the R30 lev el. This measure saves both heating and cooling energy. In the case of gas-heated residences, the electric saving s are for cooling only and are much less than the heating savings. So the cost effective application of this measu re is to gas-heated residences only. 

### Measure Applicability This measure is considered applicable to all residences heated wit h gas.


### Incremental Cost DEER uses a value of $0.757/square foot of wall area. This job includes the cost of providing for adequate attic venting. For this analysis three levels of insulation and costs are consi dered: Measure RG-23 (R11 to R38 ceiling insulation) is $1,000, Measure RG-24 (R30 to R38 ceiling insulation) is $500, and Measure RG-25 (R19 to R38 ceiling insulation) is $750.


### Average Annual Expected Savings Savings from this measure are dependent on the efficiency of the heat source . The stock to which this measure is applied consists primarily of post-1985 furnaces with an assumed AFUE of 85%. Annua l energy savings are considered in three levels: Measure RG-23 (R11 to R38 ceiling insulation) is 105 therms/yr, Measure RG-24 (R30 to R38 ceiling insulation) is 50 therms/yr, and Measure RG-25 (R19 to R38 ceiling insulation) is 70 therms/yr. In addition to gas savings, there are 127 kWh/yr cooling savings. 

### Expected Useful Life This analysis uses an effective useful life of 25 years. The DEER uses 20 years. 

### House Sealing Using Blower Door (RG-26) This measure applies to residential gas-heated properties. It involves using blower door technology to pressurize the home. Once the house is pressurized, the air leaks are identified and s ealed with appropriate materials to decrease heat loss from the building envelope. 

### Measure Applicability This measure is applicable to most of the residential stock.


### Incremental Cost The incremental cost of sending a technician to a home and performing a Blower Door test and sealing the identified leaks is assumed here to be $500 per 1,000 square foot home. By comparis on, the C&RD database lists $0.16 per 0.1 air change per square foot which translates to $320 per house with 0.2 air changes per square foot. 

### Average Annual Expected Savings A gas-heated home will achieve 75 therms/yr annual savings according to ou r modeling. In addition there will be 127 kWh/yr in cooling electric savings.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 187 

### Expected Useful Life The life of the savings for this measure depends on the quality of the materi als used especially for the gaskets for the windows and doors. An expected useful life of 13 years is being used. DEER lists 13 y ears and C&RD lists 20.



### Refrigeration Charge and Duct Tune-Up (RG-27) This measure is designed to save gas and electric energy by increasing the operating efficiency of distribution system (ducts), and the refrigerant system by insuring that it is proper ly charged. It is common in residential cooling or heat pump systems to have an incorrect amount of refrigerant charge b ecause these systems are usually charged on-site during installation. But the principal savings, gas and electri c, for this measure proceed from finding and sealing duct leaks which increases the system distribution eff iciency. 

### Measure Applicability This measure is applicable to most of the residential stock. Notably e ven new installations can benefit from this

measure. 

### Incremental Cost The incremental cost of this measure pays for a visit by a specially t rained HVAC technician. For this analysis this cost is taken as $350. 

### Average Annual Expected Savings The average annual expected savings from this measure depends on the size of the residence. Based on simulations we find savings of 50 therms/yr and 295 kWh/yr on a gas-heated residence with c entral air conditioning. 

### Expected Useful Life This is measure is considered here to have a useful life of 13 years.



### Wall and Floor Insulation (RG-28, RG-29, RG-30) This measure involves increasing wall surface insulation. This meas ure saves both heating and cooling energy. In the case of gas-heated residences, the electric savings are for cool ing only and are much less than the heating savings. 

### Measure Applicability This measure is considered applicable to a portion of the residential cus tomers that heat with gas.


### Incremental Cost This measure contemplates adding wall insulation to a 2x4 stud wall where t here is none. We assume a cost of $1.25/square foot of wall area. DEER uses a value of $1.32/square foot of wall ar ea. The DEER values are based on going from an R0 to an R13, the equipment costs are given as $0.15 for equipment and $1.17 for l abor resulting in the overall cost of $1.32. Our cost estimate is considered to apply to thre e levels of insulation: Measure RG-28 (R0 to R11 wall insulation) is $1,400, Measure RG-29 (R11 to R19 wall insulation) is $1,750, and Measure RG-30 (floor/basement insulation) is $1,000. 

### Average Annual Expected Savings Savings from this measure are dependent on the efficiency of the heat sourc e. The savings are differentiated by three levels of insulation: Measure RG-28 (R0 to R11 wall insulation) is 140 therms/yr, Measure RG-29 (R11 to R19 wall insulation) is 195 therms/yr, and Measure RG-30 (floor/basement insulation) is 98 therms/yr. There are also cooling electric savings of 127 kWh/yr. 

### Expected Useful Life This analysis uses an effective useful life of 25 years, the DEER uses 20 y ears.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Energy Star Construction (RG-31) An Energy Star qualified new home is required to be 15 percent more efficient than a similar home that meets the 2004 International Energy Conservation Code, IECC. The mechanism for estimat ing Energy Star compliance is through the use of a HERS (Home Energy Rating System) score calculated from a brief estimate of annual energy use. The all fuel savings proceed principally from heating, cooling, lighting a nd water heating savings. 

### Measure Applicability This measure is applicable to all new residential construction. But for the purposes of this study the measure is restricted to new residential gas-heated construction.


### Incremental Cost The incremental cost for this measure consists of the increased cost of building components such as insulation, windows, lighting and appliances. This cost is site specific, and there is some choice in selecting the package of measures. An initial cost effectiveness screening of this measure s howed that the maximum cost effective cost is $3,000. This requires composing a package of only the most cost effective measur es. Therefore this package includes the strongly cost effective measures of flow efficient shower heads and inspection of duct work that are not commonly part of the Energy Star package (but should be). Based on the choice of t he most cost effective measures, the cost used for this study is $3,000. This measure includes ele ctric efficiency measures and will have both gas and electric savings. 

### Average Annual Expected Savings The savings from this measure are specifically site modeled, estima tes for this region are in the range of 250-350 therms/yr. For this study, the savings is assumed to be 285 therms/yr. In addition to the gas savings there are 880 kWh/yr savings principally from lighting and cooling energy savings. 

### Expected Useful Life This measure has a useful life comparable to that of new construction and , for this study, is taken as 50 years. 

### Solar Siting Passive Design (RG-32) This measure applies to new construction that can be designed and sited to ca pture solar gain through windows in order to displace space heating. In a new building, the cost of proper orientation and of solar design is small to non-existent if the orientation and design decisions are made before construct ion starts. It is well known that if a new residence is tightly designed thermally, a nd oriented so that about 75-100 feet of glazing is near south facing, then its heating requirements can be reduced by a bout 30 percent. Much larger heating reductions have been demonstrated, but then the designs need to become more extrem e with respect to south glass and with respect to protection from unwanted summer sun. This measure is inten ded to represent a “minimum graceful design”, yielding the maximum savings with the least departure f rom a normal residential appearance. Physically, this measure consists of re-orienting and re-distributing glazing that would have been used anyway, and in using proper overhang to provide some summer shade. In passive solar design, the south g lazing should usually have a high solar heat gain factor. This is an unusual glazing specificat ion for current residential applications because most residential glazing is intended to reject solar gain for cooling purposes. Passive solar design also includes increasing the thermal mass, such as floor tile, adjacen t to south facing glazing. The thermal mass of the existing sheetrock and furniture etc in a building also plays a role in therma l storage. Building codes generally try to discourage excessive glazing and solar gain, but they allow for except ions where thermal design has been explicitly considered and documented. 

### Measure Applicability This measure is applicable to new and rebuilt gas-heated construction wi th suitable solar exposure.


### Incremental Cost This measure is considered a minimum passive design, and it essential ly consists of a redistribution or reorientation of materials that would have been used anyway. The cost of this measure is taken as the cost for the information orOhio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 189 advice necessary to “tune the design to the sun”. The cost for this meas ure is taken here as $500 per building. Not very much needs to be done to capture these minimal passive solar heating sa vings, especially if it is done at the outset. The context for this incremental cost is assumed to be to a develo per for some extra consideration in overall site planning. In many reported cases of solar design, the cost is many times this and the bu ilding is usually much more expensive as well, but these costs are the common costs associated with personalize d new construction, not particularly related to solar design. 

### Average Annual Expected Savings The annual savings for this measure are taken as 90 therms/yr. 

### Expected Useful Life This measure will last the life of the building which can easily be 50 y ears or more. For this analysis, the measure life is taken as 50 years.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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## APPENDIX F. NON-RESIDENTIAL GAS EEM DOCUMENTATION

The purpose of this appendix is to provide documentation of the assumptions used to s creen the Commercial Energy Efficiency Measures identified for consideration in this report . Our assumptions are based on references cited throughout this section as well as the direct experience of our te am with technologies in the field and actual DSM program evaluations. While not all of the field and DSM program experie nce can be cited in published works, published references are used to establish a reasonable range of as sumptions. The point estimate used within that range is based on our professional opinion. The mapping of EEM to non -residential DSM programs is shown in the table below.

Table 90. Mapping of Gas EEM to Non-Residential DSM Programs
Program # 5 6 7 8 9

End-Uses EEM Description EEM Ref # C&I

Rebates C&I Peak

Retro-Com Lite C&I HVAC

Opt C&I

Audit C&I New

Constr

Solar Water Heater CG-1 Low Flow Fixtures CG-2 EE Water Heater with EF >= 0.6 CG-3 0.030 Energy Star Gas Oven CG-4 0.002 ES Gas Stove CG-5 0.002 ES Gas Clothes Dryer CG-6 0.002 Appliance Improvements

Commissioning Audit CG-7 0.48 Roof Insulation CG-8 Low-E Windows 1500 ft2 CG-9 Low-E Windows 1500 ft2 Replace CG-10 Ceiling Insulation (R11 to R38) CG-11 Ceiling Insulation (R30 to R38) CG-12 Ceiling Insulation (R19 to R38) CG-13 House Sealing using Blower Door CG-14 Duct Seal CG-15 Wall Insulation (R0 to R11) CG-16 Wall Insulation (R11 to R19) CG-17 Shell Efficiency

Floor/Basement Insulation CG-18 EE Boiler CG-19 0.008 Proper HVAC Sizing CG-20 HVAC Tune-Up CG-21 CO Remediation CG-22 Integrated Building Design CG-23 AFUE 82 to 92 SFe CG-24 0.017 Furnace Efficiency

AFUE 65 to 92 SFe CG-25 Commissioning - New CG-26 Re/Retro-Commissioning CG-27 Controls CG-28 Controls

Programmable Thermostats CG-29 0.050Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Solar Water Heaters (CG-1) Commercial water heating can vary significantly in scale from minor lavatory use in offices to major washing uses in restaurants and bathing uses in lodging. The most cost effective applica tions of solar water heat in the commercial context will be associated with high hot water use, and sit es with very low hot water use will be unsuitable. For the commercial context we are assuming a hot water load of about twice the size of a residential hot water load, about 500 therms/yr. Countless demonstration cases have shown that s olar energy can supply all or a portion of this heating. The portion of the water heating load assumed by a solar w ater heater depends on the size of the solar water heater in relation to the size of the load. Field e xperience has shown that the best combination of system size to load favors the more moderately sized systems that can ful ly meet the summer water heat load, but that only meet about 40-50 percent of the non summer load. In physical terms, this is a system consisting of about 64-128 square feet of solar collector and an additional 80 gallon heated water storage tank and appropriate pumps and controls. 

### Measure Applicability This measure is intended to apply to small commercial customers wit h gas-heated hot water.


### Incremental Cost The installation of a solar water heating system involves a mix of buildi ng skills including plumbing, electrical, roofing and general carpentry. In the general market, a turn key residenti al installation for one of these systems is in the range of $5,000 to $7,000. For this study we will take the cost to be $10,000 for an over sized system. 

### Average Annual Expected Savings The savings from solar water heaters depend on site specifics, princip ally solar insulation, air temperature, incoming water temperature, and hot water usage rate. Considering these dep endencies for the DEO service area, leads to average annual savings for a system sized and designed to be i n the cost effective range to be 300 therms/yr. 

### Expected Useful Life Solar water heating systems are essentially plumbing fixtures that are certified products (SRCC) and are often inspected by local building officials. A well designed system will have a lifetime in excess of 25 years, even though the system will take some intermediate maintenance such as inspec ting the pump and fluid level. This study will take 25 years as the useful life. 

### Low Flow Fixtures (CG-2) This technology consists of a new showerhead rated at 2.0 gallons/minute (g pm) at 80 pounds/square inch (psi) and a swivel aerator for the kitchen faucet and fixed aerators for the la vatory faucets. The current US standard for showerheads is 2.5 gpm. Measurements of the existing shower flows in buildi ng stock show a range of 2.75 gpm to 3.75 gpm with frequent individual cases in excess of 5 gpm. Evaluations have sho wn that programs that replace with 2.0 gpm heads have greater savings than programs that replace with the st andard 2.5 gpm shower heads. Program shower heads should be 2.0 gpm at 80 psi and with a lifetime scaling and clogg ing warranty. It is important also to be cautious about the use of “pressure compensating” shower heads. These are more prone to clogging and can lead to unintentional increases in flow rate in low press ure situations such as well water systems or older systems with occluded piping. Customer acceptability is an import ant component in a showerhead program. Customers will remove new low flow showerheads if the quality of t he showering experience declines with the new showerhead. Therefore it is important to research and test t he showerhead chosen for the program carefully. 

### Measure Applicability This measure is applicable to commercial customers with significa nt hot water heating loads due to extensive showering activity; such as, schools, hotels, health clubs, etc.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Incremental Cost Low flow fixture costs vary widely, and depend on whether the fixtures are purc hased retail or in bulk. The costs for a bulk purchase for a high quality low flow showerhead are about $10/unit, and the insta llation labor is taken as $15/unit. The most important feature of these fixtures is the long ter m acceptability and durability because these factors have a direct impact on the lifetime savings. With a long enough li fetime, this is such a cost effective measure that all prices in the range are quite cost effective. Bec ause the cost of the showerhead varies significantly and quality is so important for this program, it is essential to test, choose and pay the price for a high quality showerhead. A quality showerhead will also ensure measure persistence. T he commercial context here assumes the installation of 40 units. The installed cost will be taken as $1000/site. 

### Average Annual Expected Savings The savings from a large-scale showerhead change are taken as 600 therms /yr. It should be noted that the savings can vary significantly with shower usage. 

### Expected Useful Life The lifetime of this equipment is the key to its cost effectiveness. If an adequate, even pleasant, shower can be provided through lifetime warranted equipment, then the practical lifeti me of the equipment is the length of time until the equipment is replaced in the course of renovation. For these purposes , lifetime is taken as 10 years. 76 Normally showerheads will last longer but with renovations and changes in owne rship a 10 year expected useful life is a good planning number. 

### EE Water Heater (CG-3) This measure applies commercial installations with significant ga s water heating. The more efficient gas water heater, essentially a 90% efficient boiler, will have thicker tank i nsulation and a more efficient burner system. 

### Measure Applicability This measure is applicable to commercial stock with high hot water hea ting loads.


### Incremental Cost An incremental cost of $3,500 is associated with the more efficient water heater. 

### Average Annual Expected Savings A more efficient water heater will achieve 500 therms/yr annual savi ngs. 

### Expected Useful Life The life of the savings for this measure depends on the quality of the materi als used. An expected useful life of 15 years is being used. 

### Efficient Gas Oven (CG-4) This measure applies to gas cooking ovens. Savings proceed from the fact t hat this is a slightly more efficient energy star rated commercial appliance that is heavily used. It i nvolves heavier insulation and spark or other ignition of burners and oven thereby saving the gas used in the pilot light. This i s a common feature of most new appliances. 

### Measure Applicability This measure is applicable to commercial cooking applications.


### Incremental Cost The incremental cost of this measure is taken as $5,000.

76 DEER Database, 2005Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Average Annual Expected Savings This measure will save 952 therms/yr. 

### Expected Useful Life The life of the savings for this measure depends on the quality of the materi als used. An expected useful life of 15 years is being used. 

### Efficient Gas Stove (CG-5) This measure applies to commercial gas cooking stoves. Savings procee d from the fact that this is a slightly more efficient Energy Star rated commercial appliance that is heavil y used. It involves heavier insulation and spark or other ignition of burners and oven thereby saving the gas used in the pilot light

. 

### Measure Applicability This measure is applicable to commercial gas cooking.


### Incremental Cost The incremental cost of this measure is taken as $4,000. 

### Average Annual Expected Savings This measure will save 714 therms/yr. 

### Expected Useful Life The life of the savings for this measure depends on the quality of the materi als used. An expected useful life of 15 years is being used. 

### Efficient Gas Clothes Dryer (CG-6) This measure applies to commercial gas clothes dryers. The more eff icient gas clothes dryers are larger and can process more clothes in a single load, and use more sophisticated controls to avoid over-drying the load resulting in shorter cycles and lower dryer energy use. 

### Measure Applicability This measure is applicable to commercial laundry applications.


### Incremental Cost The incremental cost of this measure is taken here as $4,000. 

### Average Annual Expected Savings This measure is expected to save 833 therms/yr annually. 

### Expected Useful Life An expected useful life of 15 years is being used. 

### Commissioning Audit (CG-7) This measure applies to a walk-through audit of a commercial kitchen. T he process in a commercial kitchen is usually frenzied, and details such as unnecessary appliances turned on, leaky fa ucets, and jury rigged controls are of much lower priority than the kitchen operations. A walk-through audit by a competen t auditor will usually reveal several small problems that are easy to ignore individually but that can add up to significant savings taken together. 

### Measure Applicability This measure is applicable to commercial kitchens that use gas.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Incremental Cost The incremental cost of this measure is taken here as $1,794. 

### Average Annual Expected Savings This measure is expected to save 400 therms/yr annually.


### Expected Useful Life An expected useful life of 5 years is being used.


### Roof Insulation (CG-8) This measure applies to commercial space heating. Both heating and cooli ng energy is saved by adding roof insulation during a re-roofing or during initial construction. 

### Measure Applicability This measure is applicable to gas-heated commercial stock.


### Incremental Cost The incremental cost of this measure is taken here as $1,875. 

### Average Annual Expected Savings This measure is expected to save 600 therms/yr annually. 

### Expected Useful Life An expected useful life of 25 years is being used. 

### EE Windows (CG-9, CG-10) This measure involves increasing window insulation from a U value of 1.1 BTU /sqft/hr deg F to a U value of 0.45. This measure saves both heating and cooling energy. In the case of gas-heat ed residences, the electric savings are for cooling only and are much less than the heating savings. So the cost effect ive application of this measure is to electric-heated sites only. 

### Measure Applicability This measure is considered applicable to most residential and comme rcial customers that have single-pane glass windows.


### Incremental Cost We assume a total cost of $25/square foot of window area. DEER uses a val ue of $28/square foot of window area, and C&RD uses a value of $16/square foot. For new construction we assume an increm ental cost of 30 percent of total cost. For the average site considered here, we assume replaceme nt EE windows (CG-10) at the total cost, $7,500/site. For an EE window upgrade in new construction (CG-9), a 30 percent incremental cost of $2,250 is assumed. 

### Average Annual Expected Savings Savings from this measure are dependent on the efficiency of the gas heat s ource and the square feet of windows replaced. Simulations from DEO specific data show savings of 400 therms/yr f or an average gas-heated commercial building and with an additional 600 kWh/yr cooling savings. 

### Expected Useful Life This analysis uses an effective useful life of 25 years; the DEER uses 20 years.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Ceiling Insulation (CG-11, CG-12, CG-13) This measure involves increasing ceiling insulation from R6 to the R30 lev el. This measure saves both heating and cooling energy. In the case of gas-heated commercial spaces, the electric savings are for cooling only and are much less than the heating savings. 

### Measure Applicability This measure is considered applicable to all non-residential building s heated with gas.


### Incremental Cost We assume a cost of $0.75/sqft of wall area and 1,000 square feet of ceiling space for a total cost of $750. DEER uses a value of $0.757 per square foot of wall area. This job includes the cost o f providing for adequate attic venting. For this analysis three levels of insulation and costs are consi dered: Measure CG-11 (R11 to R38) is $1,875, Measure CG-12 (R30 to R38) is $1,250, and Measure CG-13 (R19 to R38) is $1,875. 

### Average Annual Expected Savings Savings from this measure are dependent on the efficiency of the heat source . The stock to which this measure is applied consists primarily of post-1985 furnaces with an assumed AFUE of 85%. Annua l energy savings are considered in three levels: Measure CG-11 (R11 to R38) is 600 therms/yr, Measure CG-12 (R30 to R38) is 69 therms/yr, and Measure CG-13 (R19 to R38) is 300 therms/yr. In addition to gas savings, there are 127 kWh/yr cooling savings. 

### Expected Useful Life This analysis uses an effective useful life of 25 years. The DEER uses 20 years. 

### House Sealing Using Blower Door (CG-14) This measure applies to smaller commercial gas-heated properties . It involves using blower door technology to pressurize the building. Once the building is pressurized, the air leaks ar e identified and sealed with appropriate materials to decrease heat loss from the building envelope. This is e ssentially a procedure used widely on residences; in this commercial application, the sites are resi dential scale, as are most small commercial sites. 

### Measure Applicability This measure is applicable to most of the gas-heated small commerci al stock.


### Incremental Cost The incremental cost of sending a technician to a site and performing a Blowe r Door test and sealing the identified leaks is assumed here to be $300 per 1,000 square foot site. By comparison, the C&R D database lists $0.16 per 0.1 air change per square foot. For this commercial application we will t ake $500 as the average cost. 

### Average Annual Expected Savings A gas-heated commercial space will achieve 69 therms/yr annual saving s according to our modeling. In addition there will be 150 kWh/yr in cooling electric savings. 

### Expected Useful Life The life of the savings for this measure depends on the quality of the materi als used especially for the gaskets for the windows and doors. An expected useful life of 13 years is being used. DEER lists 13 y ears and C&RD lists 20.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Refrigeration Charge and Duct Tune-Up (CG-15) This measure is designed to save gas and electric energy by increasing the operating efficiency of distribution system (ducts), and the refrigerant system by insuring that it is proper ly charged. It is common in cooling or heat pump systems to have an incorrect amount of refrigerant charge because thes e systems are usually charged on-site during installation. But the principal savings, gas and electric, for this measure proceed from finding and sealing duct leaks which increases the system distribution efficiency. 

### Measure Applicability This measure is applicable to small commercial stock that heats wi th gas. Notably even new installations can benefit from this measure. This measure is intended to apply to the signi ficant portion of the small commercial stock that is similar to and of residential scale.


### Incremental Cost The incremental cost of this measure pays for a visit by a specially t rained HVAC technician. For this analysis this cost is taken as $350. 

### Average Annual Expected Savings The average annual expected savings from this measure depends on the size of the site. Based on simulations we find savings of 60 therms/yr and 295 kWh/yr electric air conditioning savings

. 

### Expected Useful Life This is measure is considered here to have a useful life of 13 years.



### Wall and Floor Insulation (CG-16, CG-17, C-18) This measure involves increasing wall surface insulation. This meas ure saves both heating and cooling energy. In the case of gas-heated commercial spaces, the electric savings are for cooling only and are much less than the heating savings. 

### Measure Applicability This measure is considered applicable to a portion of the non-residential c ustomers that heat with gas.


### Incremental Cost This measure contemplates adding wall insulation to a 2x4 stud wall where t here is none. We assume a cost of $1.25/square foot of wall area for CG-16, and $1.75/square foot for CG-17, and $1.40/square f oot for CG-18. DEER uses a value of $1.32/square foot of wall area. The DEER values are based on going from an R0 to an R13, the equipment costs are given as $0.15 for equipment and $1.17 for labor resulting in t he overall cost of $1.32. Our estimate is for 2,500 square feet of wall, and applies to three levels of i nsulation: Measure CG-16 (R0 to R11 wall insulation) is $3,125; Measure CG-17 (R11 to R19 wall insulation) is $4,375; and Measure CG-18 (floor/basement insulation) is $1,400. 

### Average Annual Expected Savings Savings from this measure are dependent on the efficiency of the heat sourc e. The savings are differentiated by three levels of insulation: Measure CG-16 (R0 to R11 wall) is 259 therms/yr, Measure CG-17 (R11 to R19 wall) is 346 therms/yr, and Measure CG-18 (floor/basement insulation) is 173 therms/yr. There are also cooling electric savings of 127 kWh/yr. 

### Expected Useful Life This analysis uses an effective useful life of 25 years; the DEER uses 20 years.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### EE Boiler (CG-19) This measure applies to commercial gas water heating. The more eff icient gas boiler will have thicker tank insulation and a significantly more efficient burner system, leading t o heating efficiencies in the range of 92-95 percent. 

### Measure Applicability This measure is applicable to large commercial stock with large water or space heat loads.


### Incremental Cost An incremental cost of $20,000 is associated with the more efficient water heat er. 

### Average Annual Expected Savings A more efficient water heater will achieve 2,400 therms/yr annual sav ings according to our modeling. 

### Expected Useful Life The life of the savings for this measure depends on the quality of the materi als used. An expected useful life of 20 years is being used. 

### Proper HVAC Sizing (CG-20) This measure applies to residential and small commercial gas-heat ed properties. It involves using rule-of-thumb engineering to avoid over-sizing the gas furnace. Oversized heating equipment can lead to energy losses through higher than necessary duct temperatures and losses and through unnecessary on/of f cycling. 

### Measure Applicability This measure is applicable to most small commercial stock.


### Incremental Cost The incremental cost of this measure is associated with the extra desi gn consideration which is taken here to be $0. It is possible that the incremental cost is negative in the event that a significant over-sizing is avoided. 

### Average Annual Expected Savings A gas-heated commercial space will achieve 595 therms/yr annual saving s. 

### Expected Useful Life The life of the savings for this measure depends on the quality of the materi als used, especially for the gaskets for the windows and doors. An expected useful life of 18 years is being used. 

### HVAC Tune-Up (CG-21) This measure applies to small commercial gas heating. The furnace tune-up is accomplished in a brief visit that checks the filters with replacement, the burner with carbon monoxide (CO) chec k and combustion air, the controls including the fan delay, and air leaks where the ducts mate with the furnac e. 

### Measure Applicability This measure is applicable to most gas-heated small commercial stock.


### Incremental Cost The incremental cost of sending a technician to a site and performing a furna ce tune-up is taken here to be $300/site. In a best case this cost can be spread over several package rooftop uni ts which are often serving each commercial space. But for this analysis we assume the conservative c ase where there is only one unit at a site. 

### Average Annual Expected Savings Annual savings from the diverse tune-up measures are taken as 238 therms/ yr.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Expected Useful Life The life of this measure is taken as 3 years. 

### Carbon Monoxide Remediation (CG-22) This measure applies to commercial gas heating. Part of a furnace tune-up is a check for carbon monoxide (CO) in the exhaust. Presence of carbon monoxide indicates incomplete combustion which is a significant furnace inefficiency. Carbon monoxide is also a significant health and safety hazar d and should be eliminated in all cases. The remedy is usually an adjustment of the primary air to the burner or cl eaning the burner. But in some cases the toxic carbon monoxide could find its way from the exhaust stream into the supply a ir through a cracked heat exchanger. A faulty heat exchanger is an immediate hazard and needs to be r eplaced immediately. 

### Measure Applicability This measure is applicable to gas-heated commercial stock.


### Incremental Cost The incremental cost of sending a technician to a site is taken here as $400. This cost does not include the cost of a new heat exchanger when one is indicated. The cost of the energy savings is a ttributed to the site cost of $400. Other costs are safety related. 

### Average Annual Expected Savings Carbon monoxide remediation can have very significant savings in extreme case s, of the order of several hundred therms/yr. But for this study we will take 357 therms/yr annual saving s for this treatment. 

### Expected Useful Life The life of the savings for this measure is taken as 10 years. 

### Energy Star Construction (CG-23) An Energy Star qualified new home is required to be 15 percent more efficient than a similar home that meets the 2004 International Energy Conservation Code, IECC. The mechanism for estimat ing Energy Star compliance is through the use of a HERS (Home Energy Rating System) score calculated from a brief estimate of annual energy use. The all fuel savings proceed principally from heating, cooling, lighting a nd water heating savings. In the commercial context the Energy Star new building has the better Energ y Star insulation and glazing details. 

### Measure Applicability This measure is applicable to all new gas-heated small commerci al construction.


### Incremental Cost The incremental cost for this measure consists of the increased cost of building components such as insulation, windows, and lighting. The incremental cost is taken here at $3,000. This mea sure includes electric efficiency measures and will have both gas and electric savings. 

### Average Annual Expected Savings For this study, the savings is assumed to be 518 therms/yr for a building that is essentially large commercial scale. In addition to the gas savings there are 880 kWh/yr savings principally from lighting and cooling energy savings. 

### Expected Useful Life This measure has a useful life comparable to that of new construction and , for this study, is taken as 50 years. 

### Upgrade Furnace Efficiency (CG-24, CG-25) This measure applies to more efficient gas space heating. Two levels of efficiency improvement are considered. The first level of improvement (CG-25) involves taking an old, pre-1985 gas spac e heater, and replacing with a modern high efficiency 92% AFUE furnace. The second level of improvement (C G-24) involves replacing an 82%Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 199 AFUE unit with a modern high efficiency 92% AFUE furnace. These two options are intended to reflect the principal heating efficiency improvement options. 

### Measure Applicability This measure is applicable to gas space heated small commercial premises.


### Incremental Cost These incremental costs refer to a larger than residential scale furnace. For both measures CG-24 and CG-25 the cost is taken as $750. 

### Average Annual Expected Savings The average annual expected savings from this measure depends on the size of the site. We assume average savings of 1,309 therms/yr for CG-24, and 2,380 therms/yr for CG-25. 

### Expected Useful Life A useful life of 15 years is used in this analysis. 

### Commissioning - New (CG-26) This measure applies to commercial gas heating. The commissioning re fers to exercising and validating the controls. Newer building controls often employ demand control ventilation to lim it non-occupied ventilation during non-occupied heating. These more sophisticated controls use carbon dioxide sens ors and control linkages that require a careful on site check out. The commissioning process also inc ludes a measurement and check of duct leaks. 

### Measure Applicability This measure is applicable to larger gas-heated commercial stock

. 

### Incremental Cost The incremental cost of sending a technician to a site to perform a furnace commissioning is taken here to be $2,500/site. 

### Average Annual Expected Savings Annual savings from new commissioning are taken as 1,000 therms/yr. 

### Expected Useful Life The life of this measure is taken as 5 years. 

### Retro-Commissioning (CG-27) This measure applies to commercial gas space and water heating. Re tro-Commissioning starts with an analytical review of past billing information, and follows any indications of excess e nergy use with site inspection and remedy. 

### Measure Applicability This measure is applicable to most of the small- and medium-sized comme rcial stock.


### Incremental Cost The incremental cost of sending a technician to a site and performing a furna ce tune-up is taken here to be $1,500/site. 

### Average Annual Expected Savings Annual savings from the diverse commissioning corrections are taken as 650 t herms/yr.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Expected Useful Life The life of this measure is taken as 5 years. 

### Controls (CG-28) This measure applies to larger scale commercial gas and water heati ng. The need for a controls audit is prompted by high energy use evident in the less detailed Retro-Commissioning. In large facilities the control of ventilation air has a significant effect on heating energy, as does the control of hot water recirculation and reheat. At any site the control options are bound to be quite diverse, but post occupancy inspections ha ve repeatedly found improper control operation to be the cause of significant energy inefficiency. Some of the most serious inefficiencies involve interactions between the heating and cooling systems, referred to as rehe at. Therefore, an inspection of gas heating controls will usually involve a review of the overall control system inc luding the cooling and lighting controls. A controls review is best done in the all fuels context. 

### Measure Applicability This measure is applicable to most of the larger commercial stoc k.


### Incremental Cost The incremental cost of sending a technician to a site and performing a compre hensive controls inspection is taken here to be $4,500/site. 

### Average Annual Expected Savings Annual savings from the diverse controls corrections are taken as 2,000 the rms/yr. 

### Expected Useful Life The life of this measure is taken as 15 years. 

### Programmable Thermostats (CG-29) Programmable thermostats save energy by lowering the average daily t emperature of the inside of a building. Most of the energy savings is heating energy because that heating thermal load is much larger than the cooling load, but some energy savings in cooling energy will also be realized. Programmable t hermostats are commonly sold for self-installation. But the installation has the following four important issues that need to be considered.

• Some thermostats are line voltage thermostats, and there is some shock haza rd to the unaware.

• The first step in programming a thermostat is the system specification . Here the installer tells the thermostat what kind of a system it is controlling. The system type is se lected from a list of about 30-50 different system types. This is a non-obvious choice.

• For system controls there are standard colored wires, but often hookups use non-sta ndard wire. For the mechanically inclined this process is okay but for others it is daunting.

• Then, after it is installed successfully there is the issue of controlling it to get satisfactory results. Sometimes this needs a guiding hand.
The US DOE is planning to phase out programmable thermostats from the Energ y Star program. The planned phase out is apparently related to recent evaluation studies that found insufficient savings to warrant the Energy Star designation. Proper installation and operation appear to be at the root of the lack of energy savings. We have chosen to leave these devices in our mix of EEMs and feel that with proper installation and setup the technology is sound. Our incremental cost includes the cost of installation over-and-above t he off-the-shelf cost of programmable thermostats. Even with proper installation, there is an ongoing need for a design that is more userfriendly and easier to operate. 

### Measure Applicability This measure is applicable to all gas and electric heating install ations that do not have a programmable thermostat.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Incremental Cost Programmable thermostats cost retail in the range of $50-$100. A utility prog ram may be able to purchase in bulk. It may be necessary to have a range of options which include at least line voltage and low voltage. For these purposes we take $70 as the melded cost of the thermostats. 77 It is assumed here that thermostats will be installed as part of a site visit in a broader program with $50 allocated for install ation labor. In total the installed cost will be taken as $120 per thermostat. 78 In this commercial context it is assumed that two thermostats are use d, leading to a site cost of $240. 

### Average Annual Expected Savings For this estimate a five degree thermostat set back is assumed, l eading to heating savings in the average gas-heated small commercial premise of 207 therms/yr. 

### Expected Useful Life In principal, these thermostats can last for in excess of 20 years, but t he backup batteries have a finite life and the programming can be changed or confused. In this case, the effective lifetime will be taken as 13 years. 79

77 DEER lists the incremental cost as $56.30 and the installed cost as $73.33 per unit. 78 DEER lists the incremental cost as $73.33 of which $56.37 is equipment cost and $16.96 is labor. Thi s analysis uses $50 for the labor cost which accounts for some of the diffe rence in the costs. 79 DEER list the EUL as 12 years.Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 202 

## APPENDIX G. SEGMENTATION AND CIS SAMPLING PLAN

In order to accurately understand the nature of loads and DSM opportunities, we s tart by disaggregating Duke Energy customers into smaller groups of customers. These customer seg ments are chosen so that customers with similar energy attributes can be grouped for modeling purposes. 

### Customer Segments Duke Energy provided extracts from their customer information system (CIS) and other databases that included information for segmenting retail customers in the DEO service a rea. Segments were developed using the data provided and the following rules-based approach:

1. Sum 2007 customer usage (kW, kWh and therms) for each site. 2. Group customers based on electric rate codes

a. Residential (Electric rates: RS, ORH, HEC, TD, CUR and TD. Gas rate s: RS, FTRS and FTRT) b. Non-Residential (rate codes other than those listed in 2 (a)) 3. Residential customers were then grouped into housing type and vintage.

a. Housing type was created from 4 customer address columns. Data from the address columns was used because housing type was not provided by the CIS extracts. i. Single Family: Customers with null values in address fields used fo r apartment numbers (Address Line2-Address Line 4). ii. Multi Family: Customers with populated values (excluding “Barn/Lot”) in a ddress fields used for apartment numbers (Address Line2-Address Line 4). b. Vintage based on Year Built column from Real Estate extract. (Note: The importance of delineating between new and existing stock is to describe and contrast current constr uction practices. The cutoff is somewhat arbitrary) i. New construction (2004 and after) ii. Existing stock (prior to 2004) 4. Non-residential customers were then grouped by load and SIC (from Donnelley b usiness data extract).

a. Customers with exceptionally small loads were assigned the small lo ads segment (less than 3,000 kWh over a recent 12-month period unadjusted for weather). b. Customers not classified in the small load were assigned segments base d on their SIC code.
The segmentation strategy is shown in the table below.

Residential (based on rate code) Non-Residential (based on rate code) Single Family New Construction Single Family Existi ng Manufacturing and Non-Manufacturing Segments Based on SIC Multi Family New Construction Multi Family Existing Small Loads (< 3,000 kWh/year)Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 203 Commercial segment assignments, based on SIC code, are shown in the table below.
SIC Code Business Type Assignment 01 – 17 Agriculture, Mining and Construction 20 – 39 Manufacturing 42, 50 and 51 Warehouse 54 Grocery 58 Eating/Drinking 70 Hotels 80 (except 806) Health Services (excludes hospitals ) 806 Hospitals 82 Schools 52 – 59 nec Retail 40 – 98 nec Office All other SIC Other

nec=not elsewhere classified

Observations:

• Vintage of construction is determined from real estate data rathe r than information from CIS. Real estate data provide better coverage in single family than multi family. Hence, m ulti family new construction is not well identified in the underlying data or resulting segmentation.

• There are nearly 9,800 non-residential electric customer sites with les s than 3,000 kWh of annual usage, typical of an electric utility of this size. These are most like ly non-building types of usages.



### Sample Selection A random sample of 5,000 customer sites with a minimum of 9 billing records (to allow sufficient billing history) for each segment was drawn. This level of sampling essentially provided a census of all customers in all segments but the ones with the largest number of customers (e.g. single family exist ing).Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 204 

## APPENDIX H. END-USE/APPLIANCE USAGE TABLES

This appendix provides tables showing the electric and/or gas usage for vari ous combinations of heating and cooling appliances.


### Electric Furnace with Central Air Conditioning
Monthly Electricity Usage (kWh)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 472.7 134.0 386.9 184.4 7.4 3,165.6 4,350.9 Feb 427.0 121.0 351.6 159.4 6.4 2,377.7 3,443.0 Mar 472.7 134.0 379.3 165.7 6.6 1,436.2 2,594.5 Apr 457.5 129.7 354.1 152.5 6.1 229.0 1,328.8 May 472.7 134.0 343.1 150.6 6.0 0.0 1,106.5 Jun 457.5 129.7 310.1 143.1 385.4 0.0 1,425.8 Jul 472.7 134.0 291.2 150.2 640.1 0.0 1,688.2 Aug 472.7 134.0 294.1 148.3 538.5 0.0 1,587.7 Sep 457.5 129.7 301.0 152.9 136.9 0.0 1,178.0 Oct 472.7 134.0 327.5 165.3 6.6 0.0 1,106.2 Nov 457.5 129.7 333.5 177.4 7.1 1,272.9 2,378.1 Dec 472.7 134.0 367.8 191.4 7.7 2,552.0 3,725.6 Total 5,566.1 1,577.4 4,040.2 1,941.2 1,754.8 11,03 3.5 25,913.2

Hourly Electricity Demand (kW) Hour Summer (July) Winter (January) 1 1.8 3.9 2 1.6 3.8 3 1.5 3.9 4 1.3 3.8 5 1.4 4.2 6 1.4 4.0 7 1.5 3.7 8 1.8 4.5 9 1.8 5.8 10 2.0 6.3 11 2.1 6.0 12 2.3 6.7 13 2.3 6.1 14 2.4 6.7 15 2.6 6.5 16 2.7 6.8 17 3.0 7.0 18 3.2 7.2 19 3.2 8.2 20 3.1 7.8 21 3.2 7.4 22 3.1 7.3 23 2.8 6.4 24 2.3 6.3Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Electric Furnace with Window Air Conditioning

Monthly Electricity Usage (kWh)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 472.7 134.0 386.9 184.4 7.4 3,165.6 4,350.9 Feb 427.0 121.0 351.6 159.4 6.4 2,377.7 3,443.0 Mar 472.7 134.0 379.3 165.7 6.6 1,436.2 2,594.5 Apr 457.5 129.7 354.1 152.5 6.1 229.0 1,328.8 May 472.7 134.0 343.1 150.6 6.0 0.0 1,106.5 Jun 457.5 129.7 310.1 143.1 195.6 0.0 1,235.9 Jul 472.7 134.0 291.2 150.2 323.0 0.0 1,371.1 Aug 472.7 134.0 294.1 148.3 272.2 0.0 1,321.4 Sep 457.5 129.7 301.0 152.9 71.5 0.0 1,112.6 Oct 472.7 134.0 327.5 165.3 6.6 0.0 1,106.2 Nov 457.5 129.7 333.5 177.4 7.1 1,272.9 2,378.1 Dec 472.7 134.0 367.8 191.4 7.7 2,552.0 3,725.6 Total 5,566.1 1,577.4 4,040.2 1,941.2 916.2 11,033. 5 25,074.6

Hourly Electricity Demand (kW) Hour Summer (July) Winter (January) 1 1.5 3.9 2 1.3 3.8 3 1.2 3.9 4 1.1 3.8 5 1.1 4.2 6 1.3 4.0 7 1.4 3.7 8 1.7 4.5 9 1.6 5.8 10 1.8 6.3 11 1.7 6.0 12 1.9 6.7 13 1.9 6.1 14 1.9 6.7 15 2.0 6.5 16 2.1 6.8 17 2.3 7.0 18 2.4 7.2 19 2.5 8.2 20 2.5 7.8 21 2.6 7.4 22 2.5 7.3 23 2.2 6.4 24 1.8 6.3Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Electric Furnace with No Air Conditioning
Monthly Electricity Usage (kWh)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 472.7 134.0 386.9 184.4 7.4 3,165.6 4,350.9 Feb 427.0 121.0 351.6 159.4 6.4 2,377.7 3,443.0 Mar 472.7 134.0 379.3 165.7 6.6 1,436.2 2,594.5 Apr 457.5 129.7 354.1 152.5 6.1 229.0 1,328.8 May 472.7 134.0 343.1 150.6 6.0 0.0 1,106.5 Jun 457.5 129.7 310.1 143.1 32.3 0.0 1,072.6 Jul 472.7 134.0 291.2 150.2 50.4 0.0 1,098.5 Aug 472.7 134.0 294.1 148.3 43.2 0.0 1,092.4 Sep 457.5 129.7 301.0 152.9 15.3 0.0 1,056.4 Oct 472.7 134.0 327.5 165.3 6.6 0.0 1,106.2 Nov 457.5 129.7 333.5 177.4 7.1 1,272.9 2,378.1 Dec 472.7 134.0 367.8 191.4 7.7 2,552.0 3,725.6 Total 5,566.1 1,577.4 4,040.2 1,941.2 195.0 11,033. 5 24,353.5

Hourly Electricity Demand (kW) Hour Summer (July) Winter (January) 1 1.1 3.9 2 1.0 3.8 3 1.0 3.9 4 0.9 3.8 5 0.9 4.2 6 1.1 4.0 7 1.3 3.7 8 1.5 4.5 9 1.5 5.8 10 1.5 6.3 11 1.5 6.0 12 1.5 6.7 13 1.4 6.1 14 1.4 6.7 15 1.4 6.5 16 1.5 6.8 17 1.7 7.0 18 1.8 7.2 19 1.9 8.2 20 2.0 7.8 21 2.2 7.4 22 2.0 7.3 23 1.7 6.4 24 1.4 6.3Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Electric Resistance with Central Air Conditioning

Monthly Electricity Usage (kWh)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 472.7 134.0 386.9 184.4 7.4 2,532.5 3,717.8 Feb 427.0 121.0 351.6 159.4 6.4 1,902.1 2,967.5 Mar 472.7 134.0 379.3 165.7 6.6 1,149.0 2,307.3 Apr 457.5 129.7 354.1 152.5 6.1 183.2 1,283.0 May 472.7 134.0 343.1 150.6 6.0 0.0 1,106.5 Jun 457.5 129.7 310.1 143.1 385.4 0.0 1,425.8 Jul 472.7 134.0 291.2 150.2 640.1 0.0 1,688.2 Aug 472.7 134.0 294.1 148.3 538.5 0.0 1,587.7 Sep 457.5 129.7 301.0 152.9 136.9 0.0 1,178.0 Oct 472.7 134.0 327.5 165.3 6.6 0.0 1,106.2 Nov 457.5 129.7 333.5 177.4 7.1 1,018.3 2,123.5 Dec 472.7 134.0 367.8 191.4 7.7 2,041.6 3,215.2 Total 5,566.1 1,577.4 4,040.2 1,941.2 1,754.8 8,826 .8 23,706.5

Hourly Electricity Demand (kW) Hour Summer (July) Winter (January) 1 1.8 3.4 2 1.6 3.3 3 1.5 3.3 4 1.3 3.3 5 1.4 3.6 6 1.4 3.4 7 1.5 3.2 8 1.8 3.9 9 1.8 5.0 10 2.0 5.4 11 2.1 5.1 12 2.3 5.7 13 2.3 5.2 14 2.4 5.7 15 2.6 5.5 16 2.7 5.8 17 3.0 6.0 18 3.2 6.1 19 3.2 7.0 20 3.1 6.6 21 3.2 6.4 22 3.1 6.3 23 2.8 5.5 24 2.3 5.4Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 208 

### Electric Resistance with Window Air Conditioning

Monthly Electricity Usage (kWh)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 472.7 134.0 386.9 184.4 7.4 2,532.5 3,717.8 Feb 427.0 121.0 351.6 159.4 6.4 1,902.1 2,967.5 Mar 472.7 134.0 379.3 165.7 6.6 1,149.0 2,307.3 Apr 457.5 129.7 354.1 152.5 6.1 183.2 1,283.0 May 472.7 134.0 343.1 150.6 6.0 0.0 1,106.5 Jun 457.5 129.7 310.1 143.1 195.6 0.0 1,235.9 Jul 472.7 134.0 291.2 150.2 323.0 0.0 1,371.1 Aug 472.7 134.0 294.1 148.3 272.2 0.0 1,321.4 Sep 457.5 129.7 301.0 152.9 71.5 0.0 1,112.6 Oct 472.7 134.0 327.5 165.3 6.6 0.0 1,106.2 Nov 457.5 129.7 333.5 177.4 7.1 1,018.3 2,123.5 Dec 472.7 134.0 367.8 191.4 7.7 2,041.6 3,215.2 Total 5,566.1 1,577.4 4,040.2 1,941.2 916.2 8,826.8 22,867.9

Hourly Electricity Demand (kW) Hour Summer (July) Winter (January) 1 1.5 3.4 2 1.3 3.3 3 1.2 3.3 4 1.1 3.3 5 1.1 3.6 6 1.3 3.4 7 1.4 3.2 8 1.7 3.9 9 1.6 5.0 10 1.8 5.4 11 1.7 5.1 12 1.9 5.7 13 1.9 5.2 14 1.9 5.7 15 2.0 5.5 16 2.1 5.8 17 2.3 6.0 18 2.4 6.1 19 2.5 7.0 20 2.5 6.6 21 2.6 6.4 22 2.5 6.3 23 2.2 5.5 24 1.8 5.4Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 209 

### Electric Resistance with No Air Conditioning

Monthly Electricity Usage (kWh)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 472.7 134.0 386.9 184.4 7.4 2,532.5 3,717.8 Feb 427.0 121.0 351.6 159.4 6.4 1,902.1 2,967.5 Mar 472.7 134.0 379.3 165.7 6.6 1,149.0 2,307.3 Apr 457.5 129.7 354.1 152.5 6.1 183.2 1,283.0 May 472.7 134.0 343.1 150.6 6.0 0.0 1,106.5 Jun 457.5 129.7 310.1 143.1 32.3 0.0 1,072.6 Jul 472.7 134.0 291.2 150.2 50.4 0.0 1,098.5 Aug 472.7 134.0 294.1 148.3 43.2 0.0 1,092.4 Sep 457.5 129.7 301.0 152.9 15.3 0.0 1,056.4 Oct 472.7 134.0 327.5 165.3 6.6 0.0 1,106.2 Nov 457.5 129.7 333.5 177.4 7.1 1,018.3 2,123.5 Dec 472.7 134.0 367.8 191.4 7.7 2,041.6 3,215.2 Total 5,566.1 1,577.4 4,040.2 1,941.2 195.0 8,826.8 22,146.8

Hourly Electricity Demand (kW) Hour Summer (July) Winter (January) 1 1.1 3.4 2 1.0 3.3 3 1.0 3.3 4 0.9 3.3 5 0.9 3.6 6 1.1 3.4 7 1.3 3.2 8 1.5 3.9 9 1.5 5.0 10 1.5 5.4 11 1.5 5.1 12 1.5 5.7 13 1.4 5.2 14 1.4 5.7 15 1.4 5.5 16 1.5 5.8 17 1.7 6.0 18 1.8 6.1 19 1.9 7.0 20 2.0 6.6 21 2.2 6.4 22 2.0 6.3 23 1.7 5.5 24 1.4 5.4Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 210 

### Heat Pump/Electric Backup with Central Air Conditioning

Monthly Electricity Usage (kWh)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 472.7 134.0 386.9 184.4 7.4 1,407.0 2,592.3 Feb 427.0 121.0 351.6 159.4 6.4 1,056.7 2,122.1 Mar 472.7 134.0 379.3 165.7 6.6 638.3 1,796.6 Apr 457.5 129.7 354.1 152.5 6.1 101.8 1,201.6 May 472.7 134.0 343.1 150.6 6.0 0.0 1,106.5 Jun 457.5 129.7 310.1 143.1 385.4 0.0 1,425.8 Jul 472.7 134.0 291.2 150.2 640.1 0.0 1,688.2 Aug 472.7 134.0 294.1 148.3 538.5 0.0 1,587.7 Sep 457.5 129.7 301.0 152.9 136.9 0.0 1,178.0 Oct 472.7 134.0 327.5 165.3 6.6 0.0 1,106.2 Nov 457.5 129.7 333.5 177.4 7.1 565.7 1,670.9 Dec 472.7 134.0 367.8 191.4 7.7 1,134.2 2,307.8 Total 5,566.1 1,577.4 4,040.2 1,941.2 1,754.8 4,903 .8 19,783.5

Hourly Electricity Demand (kW) Hour Summer (July) Winter (January) 1 1.8 2.4 2 1.6 2.3 3 1.5 2.3 4 1.3 2.2 5 1.4 2.4 6 1.4 2.4 7 1.5 2.4 8 1.8 3.0 9 1.8 3.5 10 2.0 3.8 11 2.1 3.6 12 2.3 3.9 13 2.3 3.6 14 2.4 3.8 15 2.6 3.7 16 2.7 3.9 17 3.0 4.1 18 3.2 4.3 19 3.2 4.8 20 3.1 4.7 21 3.2 4.6 22 3.1 4.5 23 2.8 3.9 24 2.3 3.6Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 211 

### Heat Pump/Electric Backup with Window Air Conditioning

Monthly Electricity Usage (kWh)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 472.7 134.0 386.9 184.4 7.4 1,407.0 2,592.3 Feb 427.0 121.0 351.6 159.4 6.4 1,056.7 2,122.1 Mar 472.7 134.0 379.3 165.7 6.6 638.3 1,796.6 Apr 457.5 129.7 354.1 152.5 6.1 101.8 1,201.6 May 472.7 134.0 343.1 150.6 6.0 0.0 1,106.5 Jun 457.5 129.7 310.1 143.1 195.6 0.0 1,235.9 Jul 472.7 134.0 291.2 150.2 323.0 0.0 1,371.1 Aug 472.7 134.0 294.1 148.3 272.2 0.0 1,321.4 Sep 457.5 129.7 301.0 152.9 71.5 0.0 1,112.6 Oct 472.7 134.0 327.5 165.3 6.6 0.0 1,106.2 Nov 457.5 129.7 333.5 177.4 7.1 565.7 1,670.9 Dec 472.7 134.0 367.8 191.4 7.7 1,134.2 2,307.8 Total 5,566.1 1,577.4 4,040.2 1,941.2 916.2 4,903.8 18,944.9

Hourly Electricity Demand (kW) Hour Summer (July) Winter (January) 1 1.5 2.4 2 1.3 2.3 3 1.2 2.3 4 1.1 2.2 5 1.1 2.4 6 1.3 2.4 7 1.4 2.4 8 1.7 3.0 9 1.6 3.5 10 1.8 3.8 11 1.7 3.6 12 1.9 3.9 13 1.9 3.6 14 1.9 3.8 15 2.0 3.7 16 2.1 3.9 17 2.3 4.1 18 2.4 4.3 19 2.5 4.8 20 2.5 4.7 21 2.6 4.6 22 2.5 4.5 23 2.2 3.9 24 1.8 3.6Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 212 

### Heat Pump/Electric Backup with No Air Conditioning

Monthly Electricity Usage (kWh)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 472.7 134.0 386.9 184.4 7.4 1,407.0 2,592.3 Feb 427.0 121.0 351.6 159.4 6.4 1,056.7 2,122.1 Mar 472.7 134.0 379.3 165.7 6.6 638.3 1,796.6 Apr 457.5 129.7 354.1 152.5 6.1 101.8 1,201.6 May 472.7 134.0 343.1 150.6 6.0 0.0 1,106.5 Jun 457.5 129.7 310.1 143.1 32.3 0.0 1,072.6 Jul 472.7 134.0 291.2 150.2 50.4 0.0 1,098.5 Aug 472.7 134.0 294.1 148.3 43.2 0.0 1,092.4 Sep 457.5 129.7 301.0 152.9 15.3 0.0 1,056.4 Oct 472.7 134.0 327.5 165.3 6.6 0.0 1,106.2 Nov 457.5 129.7 333.5 177.4 7.1 565.7 1,670.9 Dec 472.7 134.0 367.8 191.4 7.7 1,134.2 2,307.8 Total 5,566.1 1,577.4 4,040.2 1,941.2 195.0 4,903.8 18,223.7

Hourly Electricity Demand (kW) Hour Summer (July) Winter (January) 1 1.1 2.4 2 1.0 2.3 3 1.0 2.3 4 0.9 2.2 5 0.9 2.4 6 1.1 2.4 7 1.3 2.4 8 1.5 3.0 9 1.5 3.5 10 1.5 3.8 11 1.5 3.6 12 1.5 3.9 13 1.4 3.6 14 1.4 3.8 15 1.4 3.7 16 1.5 3.9 17 1.7 4.1 18 1.8 4.3 19 1.9 4.8 20 2.0 4.7 21 2.2 4.6 22 2.0 4.5 23 1.7 3.9 24 1.4 3.6Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Heat Pump/Gas Backup with Central Air Conditioning

Monthly Electricity Usage (kWh)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 425.5 93.8 0.0 184.4 7.4 454.0 1,165.0 Feb 384.3 84.7 0.0 159.4 6.4 342.3 977.0 Mar 425.5 93.8 0.0 165.7 6.6 210.5 902.1 Apr 411.7 90.8 0.0 152.5 6.1 40.3 701.4 May 425.5 93.8 0.0 150.6 6.0 0.0 675.9 Jun 411.7 90.8 0.0 143.1 376.9 0.0 1,022.5 Jul 425.5 93.8 0.0 150.2 625.8 0.0 1,295.3 Aug 425.5 93.8 0.0 148.3 526.5 0.0 1,194.1 Sep 411.7 90.8 0.0 152.9 134.0 0.0 789.4 Oct 425.5 93.8 0.0 165.3 6.6 5.5 696.7 Nov 411.7 90.8 0.0 177.4 7.1 187.3 874.3 Dec 425.5 93.8 0.0 191.4 7.7 367.6 1,085.9 Total 5,009.5 1,104.2 0.0 1,941.2 1,717.1 1,607.6 1 1,379.7

Monthly Gas Usage (ccf)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 2.1 2.2 23.9 0.0 0.0 90.0 118.1 Feb 1.9 2.0 21.4 0.0 0.0 71.5 96.8 Mar 2.1 2.2 22.6 0.0 0.0 54.5 81.4 Apr 2.0 2.2 20.6 0.0 0.0 28.6 53.4 May 2.1 2.2 19.6 0.0 0.0 4.0 28.0 Jun 2.0 2.2 17.5 0.0 0.0 0.0 21.6 Jul 2.1 2.2 16.5 0.0 0.0 0.0 20.8 Aug 2.1 2.2 16.8 0.0 0.0 0.0 21.0 Sep 2.0 2.2 17.4 0.0 0.0 0.0 21.6 Oct 2.1 2.2 19.5 0.0 0.0 23.6 47.4 Nov 2.0 2.2 20.3 0.0 0.0 49.1 73.6 Dec 2.1 2.2 22.7 0.0 0.0 76.5 103.5 Total 24.2 26.3 238.8 0.0 0.0 397.9 687.2

Hourly Electricity Demand (kW) Hour Summer (July) Winter (January) 1 1.5 1.2 2 1.4 1.2 3 1.2 1.1 4 1.1 1.1 5 1.1 1.2 6 1.1 1.2 7 1.1 1.3 8 1.2 1.3 9 1.0 1.4 10 1.3 1.5 11 1.4 1.5 12 1.7 1.6 13 1.8 1.5 14 1.9 1.6 15 2.1 1.7 16 2.3 1.8 17 2.5 1.9 18 2.6 2.0 19 2.5 2.1 20 2.4 2.0 21 2.4 2.1 22 2.3 2.0 23 2.2 1.8 24 1.8 1.6Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Heat Pump/Gas Backup with Window Air Conditioning

Monthly Electricity Usage (kWh)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 425.5 93.8 0.0 184.4 7.4 454.0 1,165.0 Feb 384.3 84.7 0.0 159.4 6.4 342.3 977.0 Mar 425.5 93.8 0.0 165.7 6.6 210.5 902.1 Apr 411.7 90.8 0.0 152.5 6.1 40.3 701.4 May 425.5 93.8 0.0 150.6 6.0 0.0 675.9 Jun 411.7 90.8 0.0 143.1 191.3 0.0 836.9 Jul 425.5 93.8 0.0 150.2 315.9 0.0 985.4 Aug 425.5 93.8 0.0 148.3 266.2 0.0 933.8 Sep 411.7 90.8 0.0 152.9 70.1 0.0 725.5 Oct 425.5 93.8 0.0 165.3 6.6 5.5 696.7 Nov 411.7 90.8 0.0 177.4 7.1 187.3 874.3 Dec 425.5 93.8 0.0 191.4 7.7 367.6 1,085.9 Total 5,009.5 1,104.2 0.0 1,941.2 897.4 1,607.6 10, 559.9

Monthly Gas Usage (ccf)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 2.1 2.2 23.9 0.0 0.0 90.0 118.1 Feb 1.9 2.0 21.4 0.0 0.0 71.5 96.8 Mar 2.1 2.2 22.6 0.0 0.0 54.5 81.4 Apr 2.0 2.2 20.6 0.0 0.0 28.6 53.4 May 2.1 2.2 19.6 0.0 0.0 4.0 28.0 Jun 2.0 2.2 17.5 0.0 0.0 0.0 21.6 Jul 2.1 2.2 16.5 0.0 0.0 0.0 20.8 Aug 2.1 2.2 16.8 0.0 0.0 0.0 21.0 Sep 2.0 2.2 17.4 0.0 0.0 0.0 21.6 Oct 2.1 2.2 19.5 0.0 0.0 23.6 47.4 Nov 2.0 2.2 20.3 0.0 0.0 49.1 73.6 Dec 2.1 2.2 22.7 0.0 0.0 76.5 103.5 Total 24.2 26.3 238.8 0.0 0.0 397.9 687.2

Hourly Electricity Demand (kW) Hour Summer (July) Winter (January) 1 1.2 1.2 2 1.1 1.2 3 0.9 1.1 4 0.9 1.1 5 0.9 1.2 6 1.0 1.2 7 1.0 1.3 8 1.0 1.3 9 0.9 1.4 10 1.0 1.5 11 1.1 1.5 12 1.2 1.6 13 1.3 1.5 14 1.4 1.6 15 1.5 1.7 16 1.6 1.8 17 1.8 1.9 18 1.9 2.0 19 1.8 2.1 20 1.8 2.0 21 1.9 2.1 22 1.8 2.0 23 1.6 1.8 24 1.3 1.6Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

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### Heat Pump/Gas Backup with No Air Conditioning

Monthly Electricity Usage (kWh)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 425.5 93.8 0.0 184.4 7.4 454.0 1,165.0 Feb 384.3 84.7 0.0 159.4 6.4 342.3 977.0 Mar 425.5 93.8 0.0 165.7 6.6 210.5 902.1 Apr 411.7 90.8 0.0 152.5 6.1 40.3 701.4 May 425.5 93.8 0.0 150.6 6.0 0.0 675.9 Jun 411.7 90.8 0.0 143.1 31.7 0.0 677.3 Jul 425.5 93.8 0.0 150.2 49.4 0.0 718.9 Aug 425.5 93.8 0.0 148.3 42.4 0.0 710.0 Sep 411.7 90.8 0.0 152.9 15.1 0.0 670.5 Oct 425.5 93.8 0.0 165.3 6.6 5.5 696.7 Nov 411.7 90.8 0.0 177.4 7.1 187.3 874.3 Dec 425.5 93.8 0.0 191.4 7.7 367.6 1,085.9 Total 5,009.5 1,104.2 0.0 1,941.2 192.4 1,607.6 9,854.9

Monthly Gas Usage (ccf)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 2.1 2.2 23.9 0.0 0.0 90.0 118.1 Feb 1.9 2.0 21.4 0.0 0.0 71.5 96.8 Mar 2.1 2.2 22.6 0.0 0.0 54.5 81.4 Apr 2.0 2.2 20.6 0.0 0.0 28.6 53.4 May 2.1 2.2 19.6 0.0 0.0 4.0 28.0 Jun 2.0 2.2 17.5 0.0 0.0 0.0 21.6 Jul 2.1 2.2 16.5 0.0 0.0 0.0 20.8 Aug 2.1 2.2 16.8 0.0 0.0 0.0 21.0 Sep 2.0 2.2 17.4 0.0 0.0 0.0 21.6 Oct 2.1 2.2 19.5 0.0 0.0 23.6 47.4 Nov 2.0 2.2 20.3 0.0 0.0 49.1 73.6 Dec 2.1 2.2 22.7 0.0 0.0 76.5 103.5 Total 24.2 26.3 238.8 0.0 0.0 397.9 687.2

Hourly Electricity Demand (kW) Hour Summer (July) Winter (January) 1 0.8 1.2 2 0.8 1.2 3 0.7 1.1 4 0.7 1.1 5 0.7 1.2 6 0.8 1.2 7 0.9 1.3 8 0.9 1.3 9 0.8 1.4 10 0.8 1.5 11 0.8 1.5 12 0.9 1.6 13 0.9 1.5 14 0.9 1.6 15 1.0 1.7 16 1.1 1.8 17 1.2 1.9 18 1.3 2.0 19 1.2 2.1 20 1.3 2.0 21 1.4 2.1 22 1.3 2.0 23 1.2 1.8 24 0.9 1.6Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 216 

### Gas Heat with Central Air Conditioning

Monthly Electricity Usage (kWh)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 425.5 93.8 0.0 184.4 7.4 129.9 840.9 Feb 384.3 84.7 0.0 159.4 6.4 97.9 732.6 Mar 425.5 93.8 0.0 165.7 6.6 60.2 751.8 Apr 411.7 90.8 0.0 152.5 6.1 11.5 672.6 May 425.5 93.8 0.0 150.6 6.0 0.0 675.9 Jun 411.7 90.8 0.0 143.1 376.9 0.0 1,022.5 Jul 425.5 93.8 0.0 150.2 625.8 0.0 1,295.3 Aug 425.5 93.8 0.0 148.3 526.5 0.0 1,194.1 Sep 411.7 90.8 0.0 152.9 134.0 0.0 789.4 Oct 425.5 93.8 0.0 165.3 6.6 1.6 692.7 Nov 411.7 90.8 0.0 177.4 7.1 53.6 740.6 Dec 425.5 93.8 0.0 191.4 7.7 105.2 823.5 Total 5,009.5 1,104.2 0.0 1,941.2 1,717.1 459.9 10, 231.9

Monthly Gas Usage (ccf)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 2.1 2.2 23.9 0.0 0.0 140.6 168.7 Feb 1.9 2.0 21.4 0.0 0.0 111.7 137.0 Mar 2.1 2.2 22.6 0.0 0.0 85.2 112.0 Apr 2.0 2.2 20.6 0.0 0.0 44.7 69.5 May 2.1 2.2 19.6 0.0 0.0 6.3 30.3 Jun 2.0 2.2 17.5 0.0 0.0 0.0 21.6 Jul 2.1 2.2 16.5 0.0 0.0 0.0 20.8 Aug 2.1 2.2 16.8 0.0 0.0 0.0 21.0 Sep 2.0 2.2 17.4 0.0 0.0 0.0 21.6 Oct 2.1 2.2 19.5 0.0 0.0 36.9 60.7 Nov 2.0 2.2 20.3 0.0 0.0 76.7 101.2 Dec 2.1 2.2 22.7 0.0 0.0 119.5 146.5 Total 24.2 26.3 238.8 0.0 0.0 621.7 911.0

Hourly Electricity Demand (kW) Hour Summer (July) Winter (January) 1 1.5 0.9 2 1.4 0.9 3 1.2 0.8 4 1.1 0.8 5 1.1 0.8 6 1.1 0.9 7 1.1 1.1 8 1.2 1.0 9 1.0 0.9 10 1.3 1.0 11 1.4 1.0 12 1.7 1.1 13 1.8 1.0 14 1.9 1.1 15 2.1 1.2 16 2.3 1.2 17 2.5 1.3 18 2.6 1.4 19 2.5 1.4 20 2.4 1.5 21 2.4 1.6 22 2.3 1.5 23 2.2 1.3 24 1.8 1.1Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 217 

### Gas Heat with Window Air Conditioning

Monthly Electricity Usage (kWh)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 425.5 93.8 0.0 184.4 7.4 129.9 840.9 Feb 384.3 84.7 0.0 159.4 6.4 97.9 732.6 Mar 425.5 93.8 0.0 165.7 6.6 60.2 751.8 Apr 411.7 90.8 0.0 152.5 6.1 11.5 672.6 May 425.5 93.8 0.0 150.6 6.0 0.0 675.9 Jun 411.7 90.8 0.0 143.1 191.3 0.0 836.9 Jul 425.5 93.8 0.0 150.2 315.9 0.0 985.4 Aug 425.5 93.8 0.0 148.3 266.2 0.0 933.8 Sep 411.7 90.8 0.0 152.9 70.1 0.0 725.5 Oct 425.5 93.8 0.0 165.3 6.6 1.6 692.7 Nov 411.7 90.8 0.0 177.4 7.1 53.6 740.6 Dec 425.5 93.8 0.0 191.4 7.7 105.2 823.5 Total 5,009.5 1,104.2 0.0 1,941.2 897.4 459.9 9,412 .2

Monthly Gas Usage (ccf)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 2.1 2.2 23.9 0.0 0.0 140.6 168.7 Feb 1.9 2.0 21.4 0.0 0.0 111.7 137.0 Mar 2.1 2.2 22.6 0.0 0.0 85.2 112.0 Apr 2.0 2.2 20.6 0.0 0.0 44.7 69.5 May 2.1 2.2 19.6 0.0 0.0 6.3 30.3 Jun 2.0 2.2 17.5 0.0 0.0 0.0 21.6 Jul 2.1 2.2 16.5 0.0 0.0 0.0 20.8 Aug 2.1 2.2 16.8 0.0 0.0 0.0 21.0 Sep 2.0 2.2 17.4 0.0 0.0 0.0 21.6 Oct 2.1 2.2 19.5 0.0 0.0 36.9 60.7 Nov 2.0 2.2 20.3 0.0 0.0 76.7 101.2 Dec 2.1 2.2 22.7 0.0 0.0 119.5 146.5 Total 24.2 26.3 238.8 0.0 0.0 621.7 911.0

Hourly Electricity Demand (kW) Hour Summer (July) Winter (January) 1 1.2 0.9 2 1.1 0.9 3 0.9 0.8 4 0.9 0.8 5 0.9 0.8 6 1.0 0.9 7 1.0 1.1 8 1.0 1.0 9 0.9 0.9 10 1.0 1.0 11 1.1 1.0 12 1.2 1.1 13 1.3 1.0 14 1.4 1.1 15 1.5 1.2 16 1.6 1.2 17 1.8 1.3 18 1.9 1.4 19 1.8 1.4 20 1.8 1.5 21 1.9 1.6 22 1.8 1.5 23 1.6 1.3 24 1.3 1.1Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 218 

### Gas Heat with No Air Conditioning

Monthly Electricity Usage (kWh)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 425.5 93.8 0.0 184.4 7.4 129.9 840.9 Feb 384.3 84.7 0.0 159.4 6.4 97.9 732.6 Mar 425.5 93.8 0.0 165.7 6.6 60.2 751.8 Apr 411.7 90.8 0.0 152.5 6.1 11.5 672.6 May 425.5 93.8 0.0 150.6 6.0 0.0 675.9 Jun 411.7 90.8 0.0 143.1 31.7 0.0 677.3 Jul 425.5 93.8 0.0 150.2 49.4 0.0 718.9 Aug 425.5 93.8 0.0 148.3 42.4 0.0 710.0 Sep 411.7 90.8 0.0 152.9 15.1 0.0 670.5 Oct 425.5 93.8 0.0 165.3 6.6 1.6 692.7 Nov 411.7 90.8 0.0 177.4 7.1 53.6 740.6 Dec 425.5 93.8 0.0 191.4 7.7 105.2 823.5 Total 5,009.5 1,104.2 0.0 1,941.2 192.4 459.9 8,707 .2

Monthly Gas Usage (ccf)

Month Appliances &

Electronics Laundry Water Heating Lighting Space Cooling Space

Heating Total Jan 2.1 2.2 23.9 0.0 0.0 140.6 168.7 Feb 1.9 2.0 21.4 0.0 0.0 111.7 137.0 Mar 2.1 2.2 22.6 0.0 0.0 85.2 112.0 Apr 2.0 2.2 20.6 0.0 0.0 44.7 69.5 May 2.1 2.2 19.6 0.0 0.0 6.3 30.3 Jun 2.0 2.2 17.5 0.0 0.0 0.0 21.6 Jul 2.1 2.2 16.5 0.0 0.0 0.0 20.8 Aug 2.1 2.2 16.8 0.0 0.0 0.0 21.0 Sep 2.0 2.2 17.4 0.0 0.0 0.0 21.6 Oct 2.1 2.2 19.5 0.0 0.0 36.9 60.7 Nov 2.0 2.2 20.3 0.0 0.0 76.7 101.2 Dec 2.1 2.2 22.7 0.0 0.0 119.5 146.5 Total 24.2 26.3 238.8 0.0 0.0 621.7 911.0

Hourly Electricity Demand (kW) Hour Summer (July) Winter (January) 1 0.8 0.9 2 0.8 0.9 3 0.7 0.8 4 0.7 0.8 5 0.7 0.8 6 0.8 0.9 7 0.9 1.1 8 0.9 1.0 9 0.8 0.9 10 0.8 1.0 11 0.8 1.0 12 0.9 1.1 13 0.9 1.0 14 0.9 1.1 15 1.0 1.2 16 1.1 1.2 17 1.2 1.3 18 1.3 1.4 19 1.2 1.4 20 1.3 1.5 21 1.4 1.6 22 1.3 1.5 23 1.2 1.3 24 0.9 1.1Ohio Market Potential Study for Demand Side Managem ent Programs Final Report February 9, 2009

Page 219 

## APPENDIX I. SUMMARY OF ANNUAL PROGRAM DATA

See the following page for a summary of annual program data.Ohio Market Potential Study for Demand Side Management Programs Final ReportFebruary 9, 2009Page 220C&I PeakReductionRes PeakReductionRenewables &Demonstration C&I Incentives C&I RebatesC&I RetroComm. LiteC&I HVACOptimization C&I AuditC&I NewConstructionRes WholeHouse Res RebatesResApplianceRecycleRes NewConstructionRes SolarSitingRes Low &ModerateIncome Totals *Total Program Budget:Year 1178,8452,124,313166,650266,5507,211,570853,500275,000120,880167,650469,249344,7831,305,83598,10064,5001,878,67515,526,099Year 2229,1903,274,950141,650429,10011,897,4501,483,000392,930106,180170,850710,307705,1601,526,470134,20067,0002,225,21223,493,650Year 3381,4634,558,700171,650429,10014,361,1402,162,500636,430217,560281,9001,046,3661,000,3491,877,270235,300134,5002,666,74930,160,976Year 4542,5585,902,163141,650621,65016,679,8302,842,000734,360182,860222,2501,105,5561,200,6322,035,570185,30084,5002,591,74935,072,627Year 5756,1537,348,738171,650621,65016,752,3303,521,500977,860294,240423,2501,329,8351,468,3212,358,705235,300134,5002,671,74939,065,780Five year total2,088,20823,208,863793,2502,368,05066,902,32010,862,5003,016,580921,7201,265,9004,661,3134,719,2459,103,850888,200485,00012,034,134143,319,131TRUETRUETRUETRUETRUETRUETRUETRUETRUETRUETRUETRUETRUETRUETRUETRUECumulative kWh SavingsYear 1 --17,440865,50035,248,3836,901,9083,370,200577,584439,7582,158,7355,896,4348,738,85042,4905,250967,32865,229,860Year 2 --34,8802,596,50093,995,68820,705,72410,099,3661,716,708977,2405,756,95019,654,78019,224,550127,47015,7502,128,758177,034,364Year 3 --52,3204,327,500164,492,45441,411,44820,198,7323,433,4161,661,30810,794,64537,344,08231,458,250254,94031,5003,484,290318,944,885Year 4 --69,7606,924,000246,738,68169,019,08033,657,0645,711,6642,394,23816,551,59560,929,81845,439,950382,41047,2504,839,822492,705,332Year 5 --87,2009,520,500328,984,908103,528,62050,485,5968,567,4963,615,78823,028,28588,446,51061,168,500509,88063,0006,195,354684,201,637Cumulative kW SavingsYear 11,1635,92771046,8641,523750164834491,1211,41710127619,859Year 23,48914,8181331118,3034,5682,2474881851,1983,7373,11731460853,116Year 36,96926,6712051832,0309,1354,4949763142,2467,1015,10063899496,641Year 411,61241,4892682848,04515,2257,4891,6244533,44411,5867,36794131,381150,676Year 517,41759,269331,13964,06022,83811,2332,4366844,79116,8189,917126171,768212,547Cumulative MCF SavingsYear 1--51,458(30,574)28,61513,8786727188,294(3,935)-8722765,74326,021Year 2--104,373(81,531)85,84541,5861,9971,59622,119(13,117)-2,61782712,63978,961Year 3--157,289(142,680)171,69183,1733,9932,71441,474(24,923)-5,2351,65320,687170,320Year 4--2011,662(214,019)286,152138,5906,6433,91163,592(40,664)-7,8522,48028,735294,954Year 5--2516,035(285,359)429,227207,8869,9645,90788,476(59,028)-10,4693,30636,783463,692Annual Summary* Includes all program-specific costs but excludes"umbrella" DSM costs not identified with specific programs.