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, 2009 
Forefront Economics Inc. and H. Gil Peach & Associates. Ohio Market Potential Study for Demand Side 

Management Programs Final Report. Report prepared for Duke Energy Ohio, Cincinnati, Ohio, February 2009. 
Ohio Market Potential Study for Demand Side Management 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...........................................................................................................................85
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 Offset............................................135
Ohio Market Potential Study for Demand Side Management 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) ...........................................................................................................166
Ohio Market Potential Study for Demand Side Management 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)........................................................................................................195
Ohio Market Potential Study for Demand Side Management 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 .....................................................................................................219
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page vi 

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 Planning Years ........................................................4

Table 4. Annual Action Plan Savings and SB 221 Targets .........................................................................................4

Table 5. DEO Customers and Weather Normalized Annual Electric Usage by Sector...............................................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 Survey ..........................................................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 Reduction ..........................................................62

Table 38. Estimated Five-Year Program Budget – Residential Peak Reduction.......................................................63

Table 39. Measures and Incentives – Renewables and Demonstrations....................................................................65

Table 40. Estimated Participation and Savings - Renewables and Demonstrations..................................................65

Table 41. Estimated Five-Year Program Budget - Renewables and Demonstrations ...............................................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 Lite...................................................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 ............................................................75
Ohio Market Potential Study for Demand Side Management 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 House ..........................................................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 Recycling .................................................91

Table 68. Estimated Five-Year Program Budget – Residential Appliance Recycling ..............................................91

Table 69. Measures and Incentives – Residential New Construction........................................................................93

Table 70. Estimated Participation and Savings - Residential New Construction ......................................................93

Table 71. Estimated Five-Year Program Budget – Residential New Construction...................................................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 Siting.............................................................98

Table 75. Measures – Residential Low and Moderate Income Weatherization ......................................................100

Table 76. Estimated Participation and Savings - Residential Low and Moderate Income Weatherization.............101

Table 77. Estimated Five-Year Program Budget – Residential Low and Moderate 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.....................................................................190
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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List of Figures 

Figure 1. Overview of Market Assessment and DSM Potential Estimates .................................................................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 Service 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 Peak .................................................18

Figure 13. Commercial Electric EUI Distribution.....................................................................................................21

Figure 14. Square Footage Distribution of Electric Commercial Customers ............................................................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 Exterior Loads....................................132

Figure 42. Commercial Hourly Demand Factors for Heating, Cooling, and Hot Water .........................................133

Figure 43. Commercial Hourly Demand Factors for Lighting, Internal and External 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...............................................................................168
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 1 

EXECUTIVE OVERVIEW

This document presents a long-term Demand Side Management (DSM) Market 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 includes 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, implementation, oversight and cost 

effectiveness of specific DSM programs are addressed in the five-year 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 Planning 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 the 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, identified in this report, were applied across all 

applicable customers, without regard to market or economic constraints, weather normalized annual electricity 

usage could be reduced by 29 percent and weather normalized gas usage could be reduced 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 technical potential is somewhat lower because our 

energy modeling reflects the interdependencies between gas and electricity. In other words, the increase in gas 

space heating due to electric efficiency improvements offsets the savings from the broad application of gas energy 

efficiency technologies thereby lowering the overall gas technical potential. 

Economic potential reflects the subset of technical potential that can be acquired for less than the avoided cost of 

supply. Avoided costs vary significantly depending on the nature of the served load, fuel costs, distribution charges 

and other costs. Economic potential is presented in the body of this report in the form of a DSM supply curve 

showing the economic potential depending on the level of avoided cost. We show economic potential in Table 1 at 

$0.06 per kWh and $0.90 per therm. These avoided cost points are based on the observed range of electric avoided 

cost for various types of loads analyzed with DSMore but are ultimately somewhat arbitrary selections on our part. 

 

1

 Nadel, Steven, Anna Shipley and R. Neal Elliott. The Technical, Economic and Achievable Potential for Energy-Efficiency 

in the U.S. – A Meta-Analysis of Recent Studies. 2004 ACEEE Summer Study in Energy Efficiency in Buildings. 
Ohio Market Potential Study for Demand Side Management 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 economic 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 percent and decrease gas usage by 0.7 

percent. The percentage is lower for gas due to the offsetting increase in gas space heating demand from electrical 

efficiency improvements, primarily lighting. The approach used to develop the set of recommended DSM 

programs consisted of the following steps: 

(1) conduct a market assessment for determining electric and gas usage and characteristics across customer 

groups, 

(2) review a comprehensive list of DSM technologies and estimate the energy savings potential, 

(3) consider the appropriateness of selected technologies for the DEO service area in terms of markets, cost 

effectiveness and accessibility to products, 

(4) group the highest potential technologies into logical sets for marketing and outreach, 

(5) design program strategies to promote the technologies based on industry best practices, 

(6) consider the cost effectiveness of the designed program, including costs to the utility and to participating 

customers, and 

(7) describe a final set of recommended program designs that make the most sense 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, of 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 Lite Yes Yes 

7 Commercial and Industrial HVAC Optimization Yes Yes 

8 Commercial and Industrial Audit Yes Yes 

9 Commercial and Industrial New Construction Yes Yes 

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 Weatherization No Yes 

Expected savings and program budgets are presented annually in Table 2. Program budgets are also presented on a 

cost per utility customer and percent of retail revenue. 
Ohio Market Potential Study for Demand Side Management 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 recommended programs. This amounts to 

approximately 1.6 percent of the revenues from customers included in this study and equates to spending of $56 per 

customer for program delivery cost and incentives. Based on recent data from the US Department of Energy on 

DSM program spending, $56 per customer is higher than average of comparably sized utilities but still well within 

the range of spending. Spending per customer by the comparable utilities ranged from less than one dollar to nearly 

$90, averaging $23. Spending as a percent of revenue averaged 1.1 percent with a wide range. 

Our five-year program plan provides an estimate of realistically achievable potential in the near term. As such, it 

reflects an overall level of effort that, in our judgment, is an aggressive but realistic ramp up of DSM programs. 

Although the five-year plan reflects a significant increase in DSM, it is not meant to provide an estimate of 

maximum achievable potential. In considering what are realistic program participation 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 climate 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 programs and incentives that benefit DSM efforts, program 

participation rates will be benefited. How the current unfavorable economic 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 currents 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 through 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 Management Programs Final Report February 9, 2009 

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Table 3. Summary of Technical Potential Estimates at Various Planning 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 technical potential (22% divided by 

29%) by 2025. However, it appears from our analysis that Duke Energy will be able to cost effectively achieve 

about half of the technical potential, a 14 to 15 percent reduction in usage, well 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 equivalent 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 shown 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 period 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 and 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 achieved. 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 Management 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 risk 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, energy 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 preparation 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 supports the work of the other two 

components. The objective of the market assessment component is to describe customers and loads in sufficient 

detail to provide an understanding of energy usage by market segment. An important 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 data sources, a much richer market 

assessment is possible. Key to the market assessment layer is a rigorous analysis of actual customer billing and 

hourly load data to construct electric and gas usage models for each residential and non-residential segment. 

DSM Potential 

The DSM potential component of the analysis builds off of the market assessment 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 several 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 load modeling results specific to DEO. The 

process of blending internal and secondary information along with energy modeling to develop the market 

assessment and DSM potential estimates is shown in the figure below. 

Figure 1. Overview of Market Assessment and DSM Potential Estimates 
Ohio Market Potential Study for Demand Side Management 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 classes. 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 equipment and enduses. DEO respondents were selected and analyzed separately from the broader survey. 

• Size of home (square feet) and vintage of construction (year built) were obtained from tax-assessor 

records for residential properties within the DEO service territory. 

• Site-specific business attributes for business locations within 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 this Action Plan. The program design 

process builds off of the prior two layers by mapping measures to programs through an analysis of the best 

practices from other leading electricity and gas utilities. This approach 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 market characteristics of the service 

territory, and to orient the programs toward both a technology optimum and a participation optimum. To be 

effective, these goals in program design and practical implementation will be implemented and optimized within a 

seasoned marketing framework. Strategic change comes from working closely with customers and suppliers to 

jointly create program success. The result is a set of recommended programs that are optimized to fit DEO. 

Organization of Report 

The first five sections following this Executive Overview present the findings of each of the three components or 

“layers” of analysis discussed above: Market Assessment, DSM Potential (Technical and Economic) and DSM 

Programs. The final two sections of the main report present program cost effectiveness results and evaluation 

plans. Several appendices following the main report provide additional documentation on various aspects of the 

analysis. 

In this report the term Demand Side Management (DSM) refers to the planning and implementation of utility 

programs that influence customer uses of energy in ways that will produce desired changes in the utility's load 

shape. As such, DSM includes traditional energy efficiency, conservation 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 Management Programs Final Report February 9, 2009 

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MARKET ASSESSMENT 

Energy efficiency planning needs to be based on a sound understanding of customer characteristics. The purpose of 

this section is to provide a foundation for the DSM planning and analysis presented in subsequent sections. We 

begin with an overview of energy usage in the DEO service area. A description of the customer base using internal 

and secondary data precedes the presentation of energy usage models. These models are used to estimate the 

electric and gas sales by end-uses; such as, space heat, water heat, lighting, cooking, dryers, process energy, and 

miscellaneous plug loads. The detailed energy usage models also provide a basis for estimating existing efficiency 

levels, the technical potential, energy savings and cost effectiveness of a wide variety of demand side measures and 

programs. 

Energy use estimates presented in this report are normalized to long-term 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 estimates 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 customers in the DEO service 

territory. These customers account for over 20 billion kWh annually, as shown in 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 from 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 from CIS extract (Jan 2007 – Dec 2007). 

The residential sector is far larger in terms of customer count than the non-residential sector. Although there are far 

fewer non-residential customers than residential, the average non-residential electric customer uses nearly 20 times 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 8 

more electricity than the average residential customer. Similarly, the average non-residential gas customer uses 

nearly 13 times more gas than the average residential customer. The non-residential sector accounts for 65 percent 

of the electric consumption and 51 percent of the gas consumption considered in this study. 

Monthly electric loads by sector are shown in Figure 2 for electric and Figure 3 for gas with non-residential broken 

down between commercial and manufacturing (based on SIC code). Residential electric 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, coincident 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 Dec

kWh (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 demand relative to summer 

months. Residential gas loads are the most seasonal with sharply higher winter demand relative to summer months. 

Commercial and manufacturing sectors follow a similar pattern but with progressively 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 Dec

MCF

Residential Commercial Manufacturing

Figure 3. Total Gas Sales by Rate Class 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 9 

Detailed energy usage analysis by sector and end-use will be presented later in this section. End-use models were 

estimated for each sector allowing loads to be disaggregated by major end-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 Day

Month 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 electric load data provided from DEO. 

A detailed discussion of the methodology is presented in Appendix A. Electric demand is at its highest in July 

between 2 PM and 6 PM with high loads throughout the afternoon and early evening of the summer months. Gas 

demand is at its highest in January and February with a morning and evening peak occurring around 8 AM and 6 

PM, respectively. DSM technologies and programs which impact loads during these 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 Day

Month 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 Map 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 10 

Residential 

The market assessment presented in this section begins with a high-level view of residential housing in the DEO 

service area, followed by a detailed analysis of residential electric 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), completed 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 Ohio. About 60 percent of the 

electric customers are also DEO gas customers. About 95 percent of gas customers are also DEO electric 

customers. A simple segmentation strategy based on type of structure and vintage of construction was used to 

describe and model residential energy usage. This segmentation approach captures the major differences in 

residential housing stock that impact energy usage and DSM opportunities. The segments were also selected to 

better describe cost effective DSM opportunities which can vary significantly by type of housing and vintage of 

construction. Customer counts in each of the four segments are shown in the table below. 

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 residential 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 differences 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 newer homes that have large impacts on energy 

use and energy efficiency potential. Differences in the thermal integrity of the building shell and appliance 

penetration rates, for example, can lead to large differences in annual usage 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 connected 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 Management Programs Final Report February 9, 2009 

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New Construction Levels 

Residential construction estimated from housing permit data for the DEO service 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 total housing units constructed in 

2007, about half the historic average of the last 10 years. Although the mix of construction 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 2007

Units

Single Family Multi-Family

Figure 6. Residential Housing Units Permitted for Construction, 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 primarily 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. Housing attribute details are useful 

for understanding the nature of the housing stock and, therefore, the DSM opportunities. 

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 of manufactured homes (2005-2007) and the percentage of statewide 

population living within the service territory. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Over 60 percent of the single family housing stock was constructed prior to 1980. These homes represent the 

largest retrofit opportunity both in terms of the number of homes and the most gains to be acquired from improved 

shell efficiencies. About 10 percent of the housing stock is less than 10 years 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 Built

Mean 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 Management 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 estimate the prevalence of heating fuels and 

appliances. Survey results are reported in Table 8 by segment and fuel for major 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 (2007) 

The RASS survey was not stratified by vintage of construction so in order to provide a sufficiently large number of 

new construction respondents, homes built in 2000 and after were classified as new 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 reported fuel and equipment information, 

survey results are used as a guide in calibrating energy usage models rather than absolute model inputs. 

Energy Usage Analysis 

Monthly billing data at the premise level was aggregated by the four residential 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 and weather data. Model assumptions were 

refined to provide the best empirical fit to the actual customer billing 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 Management Programs Final Report February 9, 2009 

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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 segment 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 homes is by far the largest segment, 

accounting for over 80 percent of the residential sector’s electric and gas 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 and Table 11. Appliances and 

electronics is the largest single end-use, accounting for nearly 40 percent of all annual residential usage. Taken 

together with the other baseload end-uses (laundry, water heating and lighting), baseloads 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 Management 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 Dec 

kWh (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 water heat. However, these aggregate utility wide enduses bear no clear intuitive relationship to the end usage at a single premise. In Table 12 these aggregated end-uses 

have been disaggregated using appliance saturations from the appliance saturation survey to give end-use estimates 

for a single average premise. 
Ohio Market Potential Study for Demand Side Management 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 secondary heaters 

in gas-heated residences, and partial cooling by window units. 

Note in Table 12 that the stated appliance energy use applies only to premises 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. The shape of residential gas 

demand is driven primarily by residential space heating. Space heating accounts 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 Dec

MCF (millions)

Cooking & Miscellaneous Laundry Water Heating Space Heating

Figure 11. Monthly Residential Gas Loads by End-Use 
Ohio Market Potential Study for Demand Side Management 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 premise. In Table 14 these aggregated end-uses have 

been disaggregated using appliance saturations from the appliance saturation survey to give end-use estimates for a 

single average premise, and the end-uses have been expressed in the common sales units of therms. 

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

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 premises 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 appliance survey lists these 

appliances with a melded market share of about 32 percent. 
Ohio Market Potential Study for Demand Side Management 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 winter. Space cooling is the largest 

contributor to peak accounting for two-thirds of the residential peak. Appliances and electronics also contribute 

significantly to winter and summer peak. Space heating demand is far and away the largest contributor to winter 

residential demand. 

Winter, Total = 1,442 MW

Laundry

Water Heating 8%

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 Coincident Peak 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 19 

Non-Residential 

The non-residential market is far less homogenous than residential. There are a greater number of basic customer 

types (segments) and the variation in size of building is much larger in commercial. 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 benefits 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 were used along with estimates of 

employment density (employees per square foot) by type of business to estimate the square footage of each 

business record in the secondary data. The results of this analysis, summarized 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 0.8% 9,966 334 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 1.7% 3,322 702 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 13.9% 131,004 5,881 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 footage based on employment and employment density by SIC.

Source: Donnelly Business data covering DEOK OH service territory

The last column in the table above shows the average square footage per business. 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 footage by segment is then calculated by 

multiplying employment density estimates (e.g. 470 square feet per employee in retail) by the employment in that 

segment. Finally, average square feet per business is calculated by dividing the segment square footage by the 

number of businesses in the segment. The result of these calculations will be combined with the number of 

business sites from DEO’s customer records to estimate the non-residential floor space and energy intensity by 

segment. Although informative, these calculations serve only a descriptive purpose and are not used in the energy 

modeling or estimates of DSM potential. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 20 

Electric Customer Segments 

Non-residential customer data were segmented using the same SIC code classification 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 commercial 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 buildings. 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 segment in the service area. The energy 

utilization index (EUI) is calculated using the estimate of total square footage. Energy utilization index results 

from the 2003 Commercial Building Energy Consumption Survey (CBECS) published by the US DOE are also 

shown for comparison purposes. Although they follow the same general pattern, there 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 23.9 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 unavailable data.

Loads and customer counts exclude "small load" premises (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 Energy Consumption Survey results for the Midwest Census 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 purpose 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. Offices 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 as billboards and 

switching equipment. 
Ohio Market Potential Study for Demand Side Management 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 all 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 Customers 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 22 

Gas Customer Segments 

The segmentation approach used for non-residential electric customers was 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-residential 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% 0.316 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% 0.340 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% 12,155 13.8 1.9% 0.304 NA

Manufacturing 1,937 90,565 14,509,931 42.0% 83,987 162.7 22.7% 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 unavailable data.

Source: Energy model results using monthly billing data from CIS. CBECS is the Commercial Building Energy Consumption Survey for the Midwest Census Region, 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 footage distribution of gas 

commercial customers, respectively. Taken together, these figures provide insights into which segments have 

higher than average usage and account for significant square footage. The energy intensity of schools, for example, 

is on the moderate-to-high side and schools account for a relatively large 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 Distribution 
Ohio Market Potential Study for Demand Side Management 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 Customers 

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 percentage 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 Dec 

kWh (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 apparent in Figure 17. Seasonally high 

usage associated for summer space cooling is also apparent in the monthly 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 heating is a significant contributor to the 

winter peak of commercial customers but not as large as the other three end-uses mentioned. 
Ohio Market Potential Study for Demand Side Management 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 small 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 Dec 

MCF (Millions)

Internal Baseload External Baseload Water Heating Space Heating

Figure 19. Monthly Commercial Gas Usage by End-Use 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 25 

Manufacturing Energy Usage 

Electric sales to manufacturing customers came to 5.6 billion kWh in 2007, nearly 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 385 18 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 273 53 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 gas 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 6,870 14 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 958 45 43,089 0%

26 - Paper and Allied Products 82 20,068 1,645,556 12%

27 - Printing and Publishing 1,314 227 298,263 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 10,939 67 732,942 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 98,979 11 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 Management Programs Final Report February 9, 2009 

Page 26 

Total manufacturing loads are shown by month in Figure 20. Manufacturing loads are characterized by large 

process-related and motor consumption that is not highly correlated with weather. 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 Dec 

kWh (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 Dec

MCF (millions)

Internal Process External Process Water Heat Heat

Figure 21. Monthly Manufacturing Gas Usage by End-Use 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 27 

TECHNICAL POTENTIAL 

The technical potential is defined by the application of maximum reasonable 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 photovoltaic, and solar water heating, and small-scale 

site-based combined heat and power applied to existing gas loads. This estimate of technical potential includes 

both the energy savings attributable to the applied efficiency technologies as well as the peak load reductions 

proceeding from these energy savings, and from dispatched load reductions associated with appliance control and 

combined heat and power (CHP). 

Our analysis of technical potential does not include fuel switching where we define fuel switching as replacing the 

fuel used to power an appliance. There are many applications of fuel switching that may be justifiable from the 

customer or the utility perspective, such as gas backed heat pumps or large commercial or industrial CHP, but these 

have not been included in the scope of this analysis. As explained below, we do include small-scale site-based 

generation of electricity through CHP in our estimates of technical potential. 

Fundamental to an estimate of technical potential is the baseline situation. 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. The 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 until 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 technical 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 Management Programs Final Report February 9, 2009 

Page 28 

Table 21 and Table 22, respectively, summarize the electric and gas technical 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 growth ratios 

derived from the forecast as reduced for mandated lighting efficiency. Electric energy use is expressed as Total 

Energy, GWh/yr, including a loss ratio of 6.4 percent, and Load likewise includes losses. Gas energy is expressed 

as sales to ultimate customers in mmcf/yr, including a loss ratio of 1.1 percent, 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 customer and sales count in this study. In 

general, the sales count includes all utility sales to residential, 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 estimates are presented here together, they were in fact 

derived by a separate analysis, treating each fuel as if it were a separate 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 increased by the assumed level of combined 

heat and power. These two gas/electric interactions will work to increase gas usage thereby reducing the reported 

gas savings and technical potential. 

The technical potential energy savings for the portion examined for technical potential is about 29 percent energy 

savings for electric and 29 percent savings for gas. The customer stock for both these utilities involves 

predominant gas space and water heating, which leads to higher savings opportunities from space heating and water 

heating for gas customers. The electric savings proceed from lighting efficiencies, HVAC equipment 

improvements, and appliance efficiencies. 

Table 21. Summary of Technical Potential for Electric Savings Over 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 Management Programs Final Report February 9, 2009 

Page 29 

Notice in Table 21 that the application of efficiency technology has led to reductions in annual energy use, GWh, of 

29 percent. Note also that in the near term years, the technical potential savings are 31 to 32 percent, but in the 

later years this potential drops to 29 percent as the mandated lighting efficiency takes hold. And most significantly, 

the application of this broad range of efficiency measures has led to significant percentage reductions in both the 

winter and summer peak system load, MW, greater than the percentage energy 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 dispatch events. 

Table 22. Summary of Technical Potential for Gas Savings Over 20-Year 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 same 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 reduced internal gains caused by the 

electrical efficiency measures applied to the same population. Without these gas usage increases the gas savings 

from efficiency alone would have been about 38 percent because the customer stock involves predominant gas 

space and water heating, which leads to higher savings opportunities from space and water heating gas customers. 

Technical Potential Load Effects 

With regard to DEO’s reserve margin, an important aspect of the technical potential pertains to the changes in 

demand MW attributable to the efficiency measures. In general, changes in demand (and load) will vary from hour 

to hour and month to month. For the total of DEO customers, we have estimated the average 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 difference between the base case hourly 

demand and the technical potential case hourly demand is taken here as the technical potential demand offset. The 

system load offset is then derived from the system demand offset by increasing the demand to account for the 

associated T&D losses of 6.4 percent. A discussion of the energy and demand modeling methodology is found in 

the technical appendix. 

Figure 22 shows the peak load curve for summer, August, and Figure 23 shows the peak load curve for winter, 

February. These figures have been colored to identify the source of the load savings. The red portion shows the 

savings from general efficiency measures and the yellow portion shows the load impact from the site-based solar 

electric and other solar applications. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 Day

System 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 Day

System 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 assumed combined heat and power acts at 

its fullest during winter peaks. It should be noted that these load savings are a by-product of the energy efficiency 

savings and the CHP, and do not include dispatched demand response or direct load control. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 31 

Technical Potential Load Control 

Load control has long been a demonstrated option for managing peak load situations. Recent improvements in 

communications, networking, and controls have significantly increased capability for large scale control of various 

end-use loads. These advances are referred to here generally as Advanced Metering Infrastructure (AMI). 

AMI employs metering and networking to allow large numbers of individual meters to be read remotely and 

designated loads to be toggled on command. The precise coordinated control of diverse loads can be used to reduce 

the total diversified system load during system peak periods. AMI also supports automatic meter reading, and 

facilitates the use of time of day or critical peak pricing and distribution O&M diagnostics. It is probable that 

advanced metering will eventually become a common part of the utility system based on these multiple benefits. 

An upper bound of the demand reductions achievable by direct load control through AMI will be estimated here. It 

can be strictly argued that when air conditioners and water heaters are cycled off through direct load control, they 

involve behavioral choices, but if the cycles are properly designed, there will be almost no perceived loss of 

amenity. Physically, the precisely sequenced cycling afforded by AMI is leveraging the inherent benefits of the 

thermal storage of water heaters and the dwellings themselves to reduce peak demand. 

Further demand reductions and energy reductions can be achieved through a variety 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 possible 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 control of 30 percent of the 

residential electric water heating load and the control of 225,000 residential /small commercial scale air 

conditioners. Figure 24 shows the effect of such a large scale control exercise. 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 load 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 carefully 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 during the afternoon, and the water heaters are 

cycled off much later in the afternoon (around 6 PM). In this manner the demand reductions 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 because 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 there is much more benefit to 

cycling. Figure 24 shows that with careful staging, the top of the system peak 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 Management Programs Final Report February 9, 2009 

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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 Day

System 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 conditioners and storage water heaters. 

Commercial lighting could also be controlled, but it is not considered here because lighting control, especially day 

lighting, is expected to be redundant with lighting control installed as an energy saving measure. Another class of 

demand reduction measures is associated with industrial load shedding contracts. These industrial load reductions 

can be quite large, even larger than the load reductions from the direct load control shown in Figure 24. These load 

reductions would be in addition to the reductions afforded by the direct load control illustrated here. These unique 

industrial contracts are not considered in this technical potential study. 

It is evident in the figure that this type of DSM load reduction has limited potential relative to the load reduction 

proceeding generally from energy efficiency. While DR and DLC are potentially the most cost effective and most 

quickly deployed load reduction measures, they are limited. Nevertheless, 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, usually at an industrial scale and usually these are 

recognized in the industrial forecast. This first class is the only 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, referred to here as “micro CHP”, is applied 

to space heat and water heat loads which are highly seasonal. It has a low load factor, which works against cost 

effectiveness, but it has strong summer load control possibilities because it has no load in the summer. While this 

class is usually not conventionally cost effective, the valuation of ancillary benefits such as carbon offsets, very 

favorable siting advantages, and strong capacity reserve will improve the cost effectiveness. The control of micro 

CHP for load offset purposes is significantly facilitated by an advanced metering infrastructure. The effect of this 

type of load control is shown in Figure 25. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 Day

System 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, much greater than can be achieved by the 

direct load control of about 225,000 air conditioners illustrated in Figure 24. However, this technology is still 

emerging and no large scale demonstration of such control has been made. Also the heat rate for such electricity is 

high and the generation efficiencies may correspondingly be relatively low, in the 20 to 30 percent range. Notably, 

this resource is based on ultra clean and quiet combustion in sterling cycle engines or fuel cells, and it can 

potentially be readily sited anywhere in the service territory and used to balance distribution. At this time micro 

CHP is not yet ready to deploy beyond the demonstration stage. (By contrast, solar electric technology is fully 

ready to deploy in large scale with known performance and with a reasonably certain 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 because 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 large 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 figures 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 inefficiencies 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 efficiency as a price response. 

The technical potential for energy savings in new construction is shown by the green portion which increases in 

proportion to the amount of new construction and major retrofit. This is the smallest component of the technical 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 34 

potential, but it is persistently growing. The physical attributes of the new construction technical potential are quite 

similar to those in the retrofit technical potential: insulation, ventilation 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 never cheaper than when they are applied during 

initial construction. In this sense, the technical potential associated with new construction is a significant lost 

opportunity. A very important perspective on the new construction technical potential 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 time and new construction, and as more treeless 

building sites are used. An important distinguishing feature of this potential is that it is at a maximum during 

summer and during the utility system peaks. With regard to solar applications, 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 ASHRAE 90.1-2004 building code 

will be difficult to achieve without resorting to solar applications. The current thrust toward “net zero” buildings 

can practically only be achieved by significant applications of solar photovoltaic arrays. While these solar 

applications will require a large area exposed to sunlight, the required solar exposures usually lie within the 

geometries of most residential and commercial buildings. However, as 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 planning 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 out of the incandescent lighting. It is 

intended to give perspective on the phase out savings (which are not counted in the 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 existing gas thermal load has a unique 

efficiency opportunity in terms of fuel use and in terms of carbon offset because 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 as summer capacity. 
Ohio Market Potential Study for Demand Side Management 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 Year

Energy, 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 Year

Gas 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 decreasing. There is no forecast for a migration of space or 

water heat loads to gas. The rationale has been that fuel market shares depend on many specific physical and 

economic particulars and are better left to the market to sort out. Although 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 internal gains. 

Therefore, the gas savings illustrated in Figure 27 are the net of gas savings due to efficiency measures and gas 

increases due to CHP and due to the increased gas space heat required to compensate for the reduced electrical gain 

from the lighting reductions associated with the electrical technical potential. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 36 

But it is important to recognize that gas space and water heating has a much lower carbon dioxide output for these 

end-uses than coal based electricity, and it is easily foreseeable that market 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 electric space or water heating. Note the 

impact of Gas CHP Offsetting Coal/Electric is especially noteworthy. This situation actually lowers carbon 

emissions, not just minimizing them as in the case of direct heating by gas. Currently, the economics of fuel choice 

relies on status quo economics that does not significantly include carbon emissions costs. If carbon emissions 

impacts are more significantly factored into these fuel choices, then the market could shift toward lower carbon 

options. Therefore, in program plans we have included a pilot demonstration project, for residential scale CHP. 

In both Figure 26 and Figure 27 the largest energy use is that labeled “core load” which is the energy still necessary 

after the maximal application of efficiency and site generation assumed in this technical potential estimate. This 

core load assumes that utility customer behavior remains essentially constant: that thermostat settings remain 

constant and that energy costs rise as assumed in the forecast. Higher energy costs and/or thermostat changes can 

significantly lower this core load and increase the technical potential beyond that reported here. 

Our analysis of technical potential shows that, as an upper bound, it is physically possible to cut energy usage and 

system peak load significantly. However, these estimates imply very large expenditures and cannot be considered 

realistic estimates of actual reductions because they are unconstrained by market, behavioral and budget 

considerations. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 37 

ELECTRIC MEASURES AND ECONOMIC POTENTIAL 

In this section we present detailed information regarding energy efficiency 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 that causes a drop in energy usage. The 

objective of EEM assessment or screening is to determine the likely set of cost effective measures which can then 

be used to populate DSM programs that deliver savings through standalone or bundled 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 that combined an extensive 

review of industry literature, the detailed analysis of DEO loads described earlier, and our own expert opinion. 

These assumptions and sources are documented in the appendixes. The assumptions 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 levelized 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 presented below. 

End-Uses EEMs are grouped by the end-use they address. 

EEM Description Brief description of the EEM. See the appendixes for a more detailed description. 

EEM Reference Code to uniquely identify an EEM in this project. 

Application For residential measures only, describes 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 involves 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 any 

incremental equipment and labor expenses. Note: “incremental” refers to the costs over 

and above what would have been expended for a standard efficiency measure. All costs are 

in 2007 dollars. 

Annual O&M Annual operation and maintenance expenses over and above the O&M expenses incurred 

for standard efficiency measures. Most EEMs have zero incremental O&M expenses. 

Measure Life The average expected life of the measure. 

Real Levelized Cost 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. Real levelized cost provides a 

way of comparing EEMs with different attributes such as measure life on the same scale. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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

Load Eliminate Old Refrigerators RE-26 All 1,150 0 165 0 5 0.0322

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

Emerging Combined Heat/Power, Micro CHP RE-41 SF Gas 5,000 0 10,000 220 20 0.1912

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 Management 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 12,000 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 

Design (new) Integrated Building Design (new) CE-9 72,929 24,708 0 50 0.0158 

 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 

Power Distribution Energy Star Transformers (new) CE-14 1,215 98 0 18 0.0064 

 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 0.0493 

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 0.1087 

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 

Other VendingMiser® CE-31 1,000 215 0 10 0.0265 

 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 Management Programs Final Report February 9, 2009 

Page 40 

Cost Effectiveness5

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 constant annual payment over the life 

of the measure divided by annual savings.6 The advantage of RLC is that it normalizes for differences in measure 

life and other EEM attributes to provide a means of comparing EEMs in terms of their relative cost effectiveness. 

As will be demonstrated in the next section, RLC also provides a convenient method for determining economic 

potential. Assumptions on average annual savings, installed cost and measure life come from many sources, 

including the energy modeling work conducted as part of this project using segment-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 costs 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 required for the high efficiency model 

and, hence, would be included in incremental cost. Tax credits and other incentive 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 screening assumptions. An 

owner-installed delivery option, for example, may result in lower installed 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 analysis the EEM assumptions provide a 

reasonable starting point for our assessment of energy efficiency options. 

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 solar electric. In principle these 

measures can provide very large energy savings, but they are usually not cost 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 presented in this report. This section deals only with technology assessment 

using levelized cost. More comprehensive analysis is required at the program level. See Appendix B in the final report for a 

discussion of each type of cost effectiveness analysis. 

6

 The formula for this calculation is presented in Appendix 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 fuels. 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 Appendix A and EEM assumptions are described in their respective appendixes. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 41 

Cost Effectiveness Rankings 

The residential and non-residential measures are ranked by cost effectiveness in Table 26 and Table 27, 

respectively. Descriptions of the columns in these tables are presented 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, describes 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. 

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 the annual savings. Entries in 

the EEM ranking table are sorted from least cost (lowest 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 for more information on 

determining this estimate for each measure. 

Potential Annual Savings 

(MWh) 

Total annual energy savings potential in MWh derived 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 to have relatively high cost (e.g. replacing 

resistance heat with a heat pump). 
Ohio Market Potential Study for Demand Side Management 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 79,168 

RE-32 Compact Fluorescent All 0.008 660 31,667 20,900 

RE-23 Solar Siting/Passive Design New Elec 0.016 1500 63,334 95,001 

RE-16 Ceiling Insulation (R6 to R30) Elec 0.027 1800 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 38,001 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 1000 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 19,000 102,259 

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 19,000 

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 126,668 329,338 

RE-30 Energy Star Refrigerators All 0.158 100 31,667 3,167 

RE-41 Combined Heat/Power, Micro CHP SF Gas 0.191 5000 142,122 710,610 

RE-10 SEER 13 to SEER 15 CAC SF Gas New 0.197 400 31,667 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 19,000 6,650 

RE-3 Resist to SEER 13 Heat Pump Elec MF 0.261 4800 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 57,001 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 replacement of poorly performing central air conditioners 

on a gas-heated residence by more efficient ones. This poor cost effectiveness relates to the high initial cost of the 

equipment, and to the relatively low cooling savings. Generally measures that 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 Management Programs Final Report February 9, 2009 

Page 43 

The non-residential measures are ranked in Table 27 by cost effectiveness. As with residential, measures pertaining 

to building efficient new stock are generally cost effective. Also, measures associated with tuning and properly 

maintaining HVAC and refrigeration equipment are generally cost effective. 

Lighting, new design and commissioning are both cost effective and large. Another 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 

($/kWh) 

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 24,310 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 24,310 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 Improvements 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 Applications 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 Management 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 for presenting economic potential that 

reflects the direct relationship between the long-term marginal cost 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 delivery 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 incremental measure costs. Although the 30 

percent adder is based on program budgets developed for other studies, it is meant as a rough estimate of the cost of 

actually acquiring the DSM resource. More refined estimates of program 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 corresponding point on the graph. Two supply curves 

are presented, one that only includes the incremental measure cost and one 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 are approximately 1.1 billion kWh of 

annual savings available at a cost $0.06 per kWh or less. Estimated residential 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 savings.8 Using $0.06 per kWh 

as an approximate marginal cost of supply, residential economic potential is estimated at 1.1 billion kWh annually. 

 

8 Marginal cost of supply vary by time of day and season and the amount of avoided peak load. Since different measures have 

different load shapes, they also have different marginal supply cost. When measures are grouped into programs, these 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 45 

The DSM supply curve for non-residential is shown in Figure 29 and, like residential, represents an alternate format 

for the information in Table 27 and includes a supply curve with an adder for program 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 savings are available at levelized costs of 

$0.04 per kWh or less. Over $0.04 per kWh the supply curve is considerably steeper. Using 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 represents the cost that the 

program must fall under in order to be cost effective. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 46 

GAS MEASURES AND ECONOMIC POTENTIAL 

In this section we present detailed information regarding energy efficiency 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 that causes a drop in energy usage. The 

objective of EEM assessment or screening is to determine the likely set of cost effective measures which can then 

be used to populate DSM programs that deliver savings through standalone or bundled 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 that combined an extensive 

review of industry literature, the detailed analysis of DEO loads described earlier, and our own expert opinion. 

These assumptions and sources are documented in the appendixes. The assumptions 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 levelized 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 presented below. 

End-Uses EEMs are grouped by the end-use they address. 

EEM Description Brief description of the EEM. See the appendixes for a more detailed description. 

EEM Reference Code to uniquely identify an EEM in this project. 

Application For residential measures only, describes 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 customer site. 

Incremental Cost The incremental cost of installing the EEM at the typical customer site, including any 

incremental equipment and labor expenses. Note: “incremental” refers to the costs over 

and above what would have been expended for a standard efficiency measure. All costs 

are in 2007 dollars. 

Annual O&M Annual operation and maintenance expenses over and above the O&M expenses incurred 

for standard efficiency measures. Most EEMs have zero incremental O&M expenses. 

Measure Life The average expected life of the measure. 

Real Levelized Cost 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. Real levelized cost provides a 

way of comparing EEMs with different attributes such as measure life on the same scale. 
Ohio Market Potential Study for Demand Side Management 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 1.6480 

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 0.4799 

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 25 0.6401 

Ceiling Insulation (R19 to R38) RG-25 SF 70 750 0 25 0.6858 

House Sealing using Blower Door RG-26 SF 75 500 0 13 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 25 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 50 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 Management 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 25 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 25 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 0.5180 

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 0.2696 

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 Management Programs Final Report February 9, 2009 

Page 49 

Cost Effectiveness9

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 constant annual payment over the life 

of the measure divided by annual savings.10 The advantage of RLC is that it normalizes for differences in measure 

life and other EEM attributes to provide a means of comparing EEMs in terms of their relative cost effectiveness. 

As will be demonstrated in the next section, RLC also provides a convenient method for determining economic 

potential. Assumptions on average annual savings, installed cost and measure life come from many sources, 

including the energy modeling work conducted as part of this project using segment-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 costs 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 required for the high efficiency model 

and, hence, would be included in incremental cost. Tax credits and other incentive 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 screening assumptions. An 

owner-installed delivery option, for example, may result in lower installed 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 analysis the EEM assumptions provide a 

reasonable starting point for our assessment of energy efficiency options. 

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 solar electric. In principle these 

measures can provide very large energy savings, but they are usually not cost 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 presented in this report. This section deals only with technology assessment 

using levelized cost. More comprehensive analysis is required at the program level. See Appendix B in the final report for a 

discussion of each type of cost effectiveness analysis. 

10 The formula for this calculation is presented in Appendix B. A real discount rate of 4.0 percent was used. 

11 The modeling is described in more detail in Appendix A and EEM assumptions are described in their respective appendixes. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 50 

Cost Effectiveness Rankings 

The residential and non-residential measures are ranked by real levelized cost in Table 30 and Table 31, 

respectively. Descriptions of the columns in these tables are presented 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, describes the segment of residential sector where the EEM 

assumptions are applicable. Includes a 30% adder for program delivery expenses. For 

example, the same EEM may have different assumptions 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 highest 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 installed 

without regard to cost. See appendixes for more information on determining this 

estimate for each measure. 

Potential Annual Savings 

(therms) 

Total annual energy savings potential in therms derived by multiplying the annual 

savings per site by the number of potential sites. 
Ohio Market Potential Study for Demand Side Management 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 3,676,455 

RG-21 CO Remediation SF 0.084 117 29,426 3,443,314 

RG-7 Low Flow Fixtures SF 0.114 27 183,913 4,965,647 

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 7,356,514 

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 1,011,521 

RG-13 AFUE 65 to 92 MFe MF Est 0.547 106 36,783 3,898,952 

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 13 110,348 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 55,174 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 75 128,739 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 4,689,778 

RG-25 Ceiling Insulation (R19 to R38) SF 0.686 70 47,817 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 1,655,216 

RG-9 Tankless Discretionary SF 1.319 75 36,783 2,758,693 

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 99,313 

RG-11 AFUE 65 to 82 MFe MF Est 2.623 98 7,357 720,938 

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 Management Programs Final Report February 9, 2009 

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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 14,301,149 

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 6,609 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 1,802,573 

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 1,299,355 

CG-27 Re/Retro-Commissioning 0.518 650 3,271 2,126,273 

CG-26 Commissioning – New 0.562 1,000 6,009 6,008,576 

CG-15 Duct Seal 0.584 60 12,017 721,029 

CG-3 EE Water Heater EF >= 0.6 0.630 500 9,013 4,506,432 

CG-19 EE Boiler 0.634 2,400 6,009 14,420,584 

CG-14 House Sealing using Blower Door 0.726 69 12,017 829,184 

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 4,506 310,944 

CG-10 Low-E Windows 1500 ft2 Replace 1.200 400 7,511 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 Management Programs Final Report February 9, 2009 

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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 for presenting economic potential that 

reflects the direct relationship between the long-term marginal cost 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 delivery 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 incremental measure costs. Although the 30 

percent adder is based on program budgets developed for other studies, it is meant as a rough estimate of the cost of 

actually acquiring the DSM resource. More refined estimates of program 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 corresponding point on the graph. Two supply curves 

are presented, one that only includes the incremental measure cost and one 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 are approximately 35 million therms of 

annual savings available at a cost $0.60 per therm or less. Estimated residential 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 economic potential is estimated at 84 

million therms annually. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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The DSM supply curve for non-residential is shown in Figure 31 and, like residential, 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 available 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 Management Programs Final Report February 9, 2009 

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DSM PROGRAMS 

Programs proposed in this section of the report are designed to save kWh and therms and to provide tools to control 

electrical load (kW). Programs are created as bundles of related energy savings measures and/or demand reduction 

measures. The cost effectiveness of the individual measures is shown in the measure tables in the previous section 

of this report, where individual measure rankings may be reviewed. [In addition, 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 administrator’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 include 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 option. Using this approach, recommended 

programs are listed in Table 32. 

The company will, of course, make the final selection of programs to be submitted 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 will propose full program 

designs in their bid package. The final program designs (the ones actually implemented) will be based on the 

planned design as approved by the Commission, the scope of work developed by Duke Energy, and the selected 

vendor’s proposal. 

Today, most DSM programs are managed with a small internal staff responsible for vendors who do most of the 

work to implement the programs, develop relationships essential to increasing 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 effective 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-effective opportunities from the Energy 

Efficiency Measures (EEMs) identified earlier in this report. Cost effectiveness results are presented for all of the 

programs in the following section of the report. Each of the program plans presented in this section contains 

information on program design, participation, expected savings, tracking concerns, and implementation budget. 

 

12 Be sure to require vendors to provide consistent and 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 programs 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 Management Programs Final Report February 9, 2009 

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The program information is organized as follows: 

• Description of program design including measures and incentives. This description 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 energy 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 efforts specific to the program.13

• Program Tracking Considerations 

• Detailed Budget Plans. Annual program implementation budgets for five years. 

In some of the program descriptions names of organizations or products are given. These are not recommendations 

of specific groups or brands, but are included as links for developing further 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 energy audit web tool. These overall DSM 

related activities are discussed in greater detail in the Cost Effectiveness section. 

 

13 While marketing is addressed for each program, we recommend bundling the programs so that from a customer perspective 

there are no more than nine options. Although programs 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 my Business.” Then 

programs are listed branching from these two options. 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, rather than as many 

individual programs. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 Direct 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 green and 

DSM/DR programs 

Yes* 

Commercial and Industrial Programs 

4 C&I Incentives Sets of improvements or special measures proposed for 

individual situations Yes 

5 C&I Rebates Prescriptive measures for non-residential customers Yes 

6 C&I Retro-Commissioning Lite Tuning of controls Yes 

7 C&I HVAC Optimization Check and optimization of HVAC units Yes 

8 C&I Audit Audit program focused on food processing and refrigeration 

(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 customers; on-site 

audit with direct install of low-cost items and kit for fifty 

dollars (refundable against installation cost of items 

recommended in audit) 

Yes 

11 Residential Rebates Energy efficient lighting and clothes washers Yes 

12 Residential Appliance Recycling Pick-up and environmental disposal Yes 

13 Residential New Construction New buildings Yes 

14 Residential Solar Siting Solar orientation, passive design, work on codes Yes 

15 Residential Low and Moderate 

Income Weatherization 

Homes with electric heat and electric hot water, income at or 

below 150% of the federal poverty level or at or below 80% 

of median income 

Yes* 

*Note that Program 3 (Renewables and Demonstrations) and Program 15 (Residential Low and Moderate Income Weatherization) do not 

pass the TRC test, but are still recommended. Renewables and Demonstrations programs advance the knowledge with specific 

technologies and also provide educational opportunities in the community. Low and Moderate Income programs provide important 

services that help to more equitably address the energy burden for this segment of the population. All other programs pass the TRC test 

and the overall portfolio of programs also passes the TRC test. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Program 1. Commercial and Industrial Peak Reduction 

The Commercial and Industrial Peak Reduction Program is proposed as an addition to the company's existing and 

highly effective PowerShare and PowerManager programs. Duke Energy, following on the experience of Cinergy, 

has mastered the art of load control programs for large commercial and industrial 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. Program 1, Commercial 

and Industrial Peak Reduction, is directed to a different customer segment, the medium-sized commercial and small 

industrial customers. This program is directed solely to provision of load control to reduce peak kW for medium 

size commercial and small industrial customers. The Commercial and Industrial Peak Reduction program is 

assumed to be piggybacked on a wider "smart grid" initiative. The company will have its own internal preference 

for type of meters and brand(s). The systems may be one-way or two-way. Smart meter technology generally 

supports: 

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

of peak use; 

• direct load control, a feature that allows automatic adjustments to central air conditioning units during 

periods of peak demand during summer months in exchange for price incentives on electric rates; and 

• the ability to pre-pay for electricity service. 

For this program, we focus on load control, although clearly the 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 switch can be engaged 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 encounters. During peak times when demand 

escalates and there is a problem with meeting demand with additional generation supply (either physically or at 

reasonable cost), the cost per kW to the company can escalate exponentially. 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 Management Programs Final Report February 9, 2009 

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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 climate 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 communications with 

commercial and industrial customers regarding energy efficiency program options; such as, bill inserts, 

recognition window stickers for participating businesses, and promotion using the Duke Energy website. 

• The small commercial class is not expected to be easy to enlist. Generally, these customers will be 

concerned about the effects of the cycling on clients and staff. It is expected that this program may cause 

a temperature fluctuation of about 2 degrees. If this can be communicated or demonstrated it may ease 

fears about effects on customers or production. 

• The small commercial class is not assigned account representatives, so this will be a limiting factor in 

communications. 

• The issue of owner-occupied versus tenant-occupied space will also be a challenge in promoting 

participation in this program. The marketing and promotion effort will give priority to owner-occupied 

facilities. 

Program Tracking Considerations 

Direct load control is data intensive and load management data is precise. 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 event is called and the response to the call as a kW 

effect. The duration of each event for evaluation purposes should also last 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 anticipated 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 incidents are called. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 $1,066,000 51%

Delivery & Other $323 $39,345 $78,690 $117,713 $157,058 $196,403 $589,208 28%

Total Budget $178,845 $229,190 $381,463 $542,558 $756,153 $2,088,208 100%
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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” technologies, and is expected to 

be a precursor to eventual system-wide implementation of the technologies. 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 technology supports: 

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

of peak use, 

• direct load control, a feature that allows automatic adjustments to central air conditioning units during 

periods of peak demand during summer months in exchange for price incentives on electric rates, and 

• the ability to pre-pay for electricity service. 

For this program, we focus on Residential load control, although clearly the 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 switch can be engaged 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 encounters. During peak times when demand 

escalates and there is a problem with meeting demand with additional generation supply (either physically or at 

reasonable cost), the cost per kW to the company can escalate exponentially. For this reason, in these situations 

load control is essential to control costs and insure service. Water heaters are not included in this program due to 

the cost of connecting water heaters. We had originally included water heaters, not to deal directly with peak calls 

(the residential AC serve that purpose), but to reduce the rebound effect from the residential air conditioners as they 

come back into service following a peak call. If Duke experiences excessive 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 Water 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Projected participation by year is shown in the table below. 

Table 37. Estimated Participation and Savings - Residential Peak Reduction 

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 climate problems by emphasizing a green 

marketing theme and can include the following elements: 

• Proposed marketing efforts should include mention of the program in any communications with customers 

regarding energy efficiency program options such as bill inserts, recognition window stickers for 

participating homes, media coverage of how to manage electric bills, customer service representatives, 

and promotion using the Duke Energy website. 

• Residential communications for the program can reach out to customers with 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 being 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 program. The water heater component 

is simply a sink to absorb any potential snapback from control of the AC units, and does not constitute a 

primary load control goal in itself. From a technical perspective, the hot water 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 precise. 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 event is called and the response to the call as a kW 

effect. The duration of each event for evaluation purposes should also last 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 anticipated 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 Management Programs Final Report February 9, 2009 

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Cost to the participants is to accept the temporary load control when incidents are called. 

Table 38. Estimated Five-Year Program Budget – Residential 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 $30,000 $0 $0 $0 $0 $30,000 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 $4,070,700 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 Management Programs Final Report February 9, 2009 

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Program 3. Renewables and Demonstrations 

This program is designed to advance knowledge (R&D) and to be used for communications and promotions. It 

contains five program elements: solar photovoltaic, solar hot water, ground source 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 included in the recommended programs for three 

reasons. First, it is a source for a small number of technology demonstration 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 Deep” project. 

Since most people are interested in "Green" programs, these examples will 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, each 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-effective 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 Deep” project, Linda Wigington, 

“Our housing is facing a crisis of obsolescence, and we have a lion share of existing houses that need to be dealt 

with to reduce energy in the near term.” In this approach structure and appliances 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 savings goal is possible, and the 

focus is on system replacements and increasing efficiencies.14

 

14 "Go Deep," is a "Plan C" project, capable of addressing global warming if fully rolled out. Currently it would require 

addition of a strong carbon value (in the neighborhood of $30-$35) to permit roll out under the TRC test. However, the Go 

Deep pilot is finding efficiencies are cutting costs for these new techniques. It is important to participate in this effort, to be 

ready in case there is a rapid ramp up of implementation to address climate change. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 Demonstrations 

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 efficiency through public demonstration projects and to 

provide referrals to the other programs. Marketing and promotion may be assisted by exploring cost sharing by 

localities. 

Program Tracking Considerations 

Since these are demonstration programs data collection will focus on technical 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 Demonstrations 

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 Management Programs Final Report February 9, 2009 

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Program 4. Commercial and Industrial Incentives 

This is a gas and electric energy savings program. The 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. Both electric and natural gas measures will be included. Each 

project will be specially designed. The incentive will be the amount required to lower the customer payback to two 

years, up to a maximum of 60 percent of incremental cost. It is expected that projects will need to be carried out in 

narrow time windows as dictated by conditions specific to the customer’s operations and that evaluation will 

consist primarily of short term instrumentation and spot metering. For the first nine months of each program year, 

no project may be allocated more than 10 percent of the measures budget allocated 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 opportunities 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 percent 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 utilities 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 number of participants in any one year. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 control tool, for the first nine months of 

each program year, funds to any one participant will be capped at 10 percent of program funds allocated to 

incentives for this program. 

Program Tracking Considerations 

Data requirements will vary with the specifications for each project. In some cases, utility billing meter 

information is capable of the level of detail required to assess program impacts. In other cases, spot metering or 

other types of assessment may be required. In any case, the program manager should collect, at a minimum, 

information about all customer electrical equipment, hours of operation, etc. It is expected that evaluations will 

primarily take the form of short term instrumentation and spot metering with engineering review. Since these are 

custom projects, it will be particularly important in insure provision is made to assess the kWh, therm, and/or kW 

condition that constitutes the baseline, and then measure the change due to the DSM improvements. 

Detailed Budget Plans 

An estimated five-year budget for this program is provided below. The anticipated 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 improvements. 

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 remainder of equipment costs. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 $1,568,050 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 $2,368,050 100.0%
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Program 5. Commercial and Industrial Rebates 

This is a gas and electricity energy savings program. The program targets 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 cost of specific rebated energy efficiency 

items. Many customers have concerns about the high first cost associated 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 assistance 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 customers. As an example of this program type, 

NYSERDA’s EnergySmart(SM) Commercial/Industrial Performance Program (CIPP) is implemented entirely by 

ESCOs. Since the program started in 2004, the number of qualifying ESCOs in New York State has increased 

significantly, thus facilitating program implementation. ESCO involvement 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 or deleted from the prescriptive list 

as information is gained during program planning and administration. The incentive level for these measures is 50 

percent. Although we have included a $1,000 simple audit expense, the program could be run without an audit. 

Audit costs, if any, are also incented at 50 percent with full reimbursement 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 Anchorage 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 cobra-headed lights with shorter 

(about twenty feet high) poles. The LED units snap in to replace the old cobra bulb, making use of the existing 

cobra head and the existing poles. MEEA informally estimates an approximate current payback in the Midwest of 

about nine years.15 Duke Energy already has some direct experience with test installations 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 Jay Wrobel, Program Director (312) 587-8390, extension 16, for 

information on specific brands and current costs in developing this measure. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 next 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 stages, and also will need to actively recruit 

ESCOs to work in its service territory. We recommend some general advertising, primarily in the form of 

brochures and mailings targeted to potential program participants. Duke Energy should work directly with business 

associations and contact some customers through account representatives. The budget below provides for some 

general advertising at business events, as well as brochures and premiums. The incentive level for the program is 

50 percent. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Program Tracking Considerations 

The program manager should insure that the vendor managing this program has an excellent 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 involves 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 customers, 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 installation 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 $16,172,100 $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 Management Programs Final Report February 9, 2009 

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Program 6. Commercial and Industrial Retro-Commissioning Lite 

This is a gas and electricity energy savings program. The program targets commercial and industrial customers 

with a usage profile that indicates a possible high value from gas, electric, 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 commissioning is a process that is 

associated with new buildings; a quality assurance process that is followed to facilitate new buildings performing as 

designed. Retro-commissioning applies a similar process to existing buildings. The goal is insure that a building 

operates efficiently and effectively. 

The focus of this pilot program is in insuring efficient operation, rather than on upgrading equipment. The program 

conducts a low-cost “tuning” of electricity related building systems. The tuning typically involves control systems 

such as energy management systems that may be improperly programmed, or controls that are out of calibration. 

When problems are identified and demonstrated, they may have major economic effects. When this type of 

problem exists, retro-commissioning resolves such problems at low cost. This project will also steer participants 

towards the Commercial and Industrial Rebates and Commercial and Industrial Incentives programs. 

Rationale 

Most buildings have never been commissioned, so the commissioning of an existing building 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 building16, 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 detected and easily fixed. Energy savings will 

be documented by engineering calculations and evaluated using EZ Sim. The persistence 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 have more than one building. 

17 See Haasl &Terry Sharp, A Practical Guide for Commissioning Existing Buildings. Washington, DC: Office of Building 

Technology, State and Community Programs, US Department of Energy. Prepared by Portland Energy Conservation, Inc. and 

Oak Ridge National Laboratory, April 1999. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 years, and expect that many of the first year 

participants are likely to be smaller businesses with more flexibility 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, primarily in the form of brochures and 

mailings targeted to potential program participants; also coordination with business associations. The budget below 

provides for some general advertising at business events, as well as brochures and premiums. Since this program 

will operate using internal prescreening, direct contacts to selected businesses and institutions will also be useful. 

Air Advice is currently running a similar program for the Oregon Energy Trust. 

Program Tracking Considerations 

The program manager should collect, at a minimum, information about all customer 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 demand 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 anticipated 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 costs. 

 

18 Incentive amounts are based on the average incentive given in NYSERDA’s EnergySmartSM CIPP program, discounted to 

allow participation by smaller commercial customers. The average CIPP program participant receives $17,000 in incentives. 

We have discounted that number to $9,750. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Table 50. Estimated Five-Year Program Budget – C&I Retro-Commissioning 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 program (Program 5, C&I Rebates). 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Program 7. Commercial and Industrial HVAC Optimization 

This is a program using an electric measure to produce both gas and electric energy savings. The program was 

designed on the premise that much commercial and industrial Heating Ventilation and Cooling (HVAC) is not 

operating as planned. A typical assignment envisioned in this program is to do on-site 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, subsequent damage to units, or problems 

with controls. In the case of a large school, built in sections over time, it would 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 systems. This program will deploy 

HVAC specialists to test units and make recommendations for their efficient operation as a building system. This 

will primarily involve repair of units and control adjustments, but may also 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 buildings 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 than 50 percent of commercial space is 

conditioned by these units. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Program Tracking Considerations 

This is an applied technical program that will be dependent on the quality and completeness 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 anticipated 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 necessary. 

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 Optimization 

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 $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 $3,016,580 100.0%

This program also serves as a feeder program for the prescriptive program (Program 5, C&I Rebates). 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Program 8. Commercial and Industrial Audit 

This is a gas and electric energy savings program. The program is targeted to food service facilities and grocery 

store/supermarkets. It consists of refrigeration improvements, improvements to refrigeration to reduce load, and 

restaurant commissioning audits (designed to optimize controls and limit energy 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 facilities (primarily restaurants) and the 

refrigeration end-use in grocery stores and supermarkets. There are 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 budget below provides for 

incentives and some general advertising at business events, as well as, brochures. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Program Tracking Considerations 

This is an applied technical program that will be dependent on the quality and completeness 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 applicable) billing analysis. 

Detailed Budget Plans 

An estimated five-year budget for this program is provided below. The anticipated 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 incremental costs not covered by the incentives. If 

additional incentive is found to be necessary to increase participation rates, 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 55%

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 program (Program 5, C&I Rebates). 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Program 9. Commercial and Industrial New Construction 

This is a gas and electricity energy savings program. The program targets new commercial and industrial 

construction. The program provides rebates for developing projects that are at least 30 percent more efficient than 

the newest ASHRAE code. Incentives are offered to project owners or, for government buildings, to the design 

team. These incentives will cover 50 percent of the incremental cost 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 design. Prospective vendors should be 

asked to propose a method of determining incremental cost for Duke Energy review. As a control tool, for the first 

nine months of each year, no project may be allocated more than 10 percent of the budget allocated for efficiency 

improvements for this program. 

This program is based on National Grid’s Design 2000 Plus program. For comparison, Western Mass Electric's 

(WMECo's) Energy Conscious Construction program covers most costs plus, for larger 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 complex projects.20 More recently, as a 

mature program, National Grid Design 2000 Plus now covers 75 percent of incremental cost.21 The program will 

follow the Advanced Buildings System approach developed by the New Buildings Institute.22

Rationale 

This program is designed to overcome first cost barriers by providing incentives that cover the incremental cost, 

and to provide information to project developers and design teams. Payback can be on the order of three to five 

years. The trend for this type of program is now towards prescription packages. 

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/energyefficiencyprograms. 

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. Note that leading programs are adopting the NBI approach. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 design teams. Programs of this type usually 

involve direct personal relationship building, training sessions or seminars, direct marketing, and meetings. 

Program Tracking Considerations 

New construction projects present a particular challenge for program tracking since there is not an actual baseline 

building to compare to the new structure. This means that the contrast to 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 simulation 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 software 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 anticipated 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 through the provision of receipts 

by the customer. 

Costs to participating customers include the customer share of the costs 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 $1,265,900 100.0%
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Program 10. Residential Whole House 

This is a gas and electricity energy savings program. The 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. In both remote options, a residential customer can conduct a residential energy assessment using a 

computerized home energy auditing program. The remote audit program is the same for both the Internet and mail 

options, and works by linking to actual billing data for the residential account. 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 electric heat customers who complete the 

remote audit, Duke Energy will send a small kit of energy efficiency items. As a more advanced option, the 

program will also offer an on-site audit for Duke Energy's electric heat customers for a $50 fee, as discussed below. 

The savings in the remote elements of this program are computed based on the items 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 conducted by Internet or mail, it can be done 

to suit a customer’s schedule. The remote elements are an entry-level 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 single 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 installation of energy efficiency measures. 

The audit, for example, might recommend air sealing, insulation, and other measures. 

The On-Site Audit with direct install program element will provide households with a walk-through examination of 

their home by a trained auditor/contractor using standard audit software for identifying existing conditions related 

to electric energy usage. The auditor will identify specific energy saving 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 opportunities regardless of their 

particular specialization. Customers will pay $50 of the audit cost, and have their 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 weatherization, 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 Management Programs Final Report February 9, 2009 

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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 take credit for kit measures after 

degrading the kit savings for expected installation rates. Expected installation rates of 80 percent for CFL’s, 60 

percent for showerheads, and 75 percent for aerators were used to calculate 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 incentive for recommended measures beyond 

those directly installed during the audit. 

The package of direct install measures is modeled after Wisconsin’s Home Performance with Energy Star program 

with emphasis on their E-Saver Kit component, which includes these measures plus a programmable thermostat, 

but only included one CFL.23 Programmable thermostats have recently become controversial (see Appendix). 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 tailored using computerized energy use 

information and an electronic protocol. The on-site audit with direct install of minor measures program element 

provides a step up to an on-site audit. This program element, in addition, may serve as a predecessor to a full Home 

Performance with Energy Star program, providing a framework to work with contractors to develop Home 

Performance with Energy Star, if such a program is desired in the second program cycle. 

Participation and Measures 

Measures are shown in the table below, and may be added or subtracted during the program 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 Focus on Energy Statewide Evaluation, Evaluation of the Home 

Performance with Energy STAR Whole House Component, April 24, 2003. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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There is no cost in the remote program elements to participating customers 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% rebate). 

Projected participation by year is shown in the table below. Most participants are expected to be remote only with 

the remainder receiving the on-site audit. 

Table 61. Estimated Participation and Savings - Residential Whole House 

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 communications, 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 lead-in programs that will help develop 

prospects for other programs. 

In developing the kit for the remote program elements, strategic attention should be placed on the kit as a marketing 

tool. First, insure that the kit items are attractively packaged and that the package itself is attractive. The focus 

should be on making the kits attractive and interesting as well as technical. Possibly some non-energy but useful 

health and safety items can be included, as well as helpful literature. Since many customers are more interested in 

“green” items to try to reduce carbon and save the planet, marketing staff should ask for suggestions and perhaps 

create a “green” theme. For example, one year the Washington DC Energy Office 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. Again, 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 commitment for an on-site energy audit that 

can lead to full weatherization retrofit with a 50 percent level of support from the utility company. As noted above, 

the on-site element can be developed into a full Home Performance with Energy Star program for the second 

program cycle. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Program Tracking Considerations 

The program elements in this program (remote and on-site) are packaged 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 anticipated 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 assessment program. 

• Direct program costs for the audit/direct install vendor. 

There is no cost in the remote program elements to participating customers for the remote audit and kit. There is a 

fifty dollar 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% rebate). 

Table 62. Estimated Five-Year Program Budget – Residential Whole House 

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 $3,266,693 70%

Delivery & Other $20 $89,020 $148,380 $207,740 $237,400 $267,080 $949,620 20%

Total Budget $469,249 $710,307 $1,046,366 $1,105,556 $1,329,835 $4,661,313 100.0%
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 purchase of CFLs, LEDs, and 

energy efficient appliances. The coupon approach gives the program administrator 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 the Energy Star program and the overall success 

of the Energy Star strategy as demonstrated by the gradual increase in energy efficiency of base case (non-Energy 

Star) equivalent products. This is also why refrigerators and dishwashers 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 Island Power Authority 

clothes washer rebate is $15, $35, or $50 to customers along with a $50 clothes washer rebate 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 Illuminating and Connecticut Light & Power 

both provide a $20 or $50 clothes washer rebate. Sacramento Municipal Utility District (SMUD) has clothes 

washer rebates at $75 and $125 depending on CEE tier level. 

 

24 The coupon approach is available as a “packaged” approach through Energy Federation Incorporated (EFI), which can also 

provide coupon processing services (www.efi.org). WECC administers several similar programs. Marketing and promotional 

plans for this program area have been developed collaboratively through the Consortium for Energy Efficiency (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 stores. Duke Energy may 

also want to explore making promotions available through locally owned and operated stores. Big-box stores are already 

primed and looking for cooperation with utilities and program vendors in this area will already have relationships with national 

offices of the big-box stores that can be activated for Duke Energy. For lighting promotions, Wal-Mart has announced a major 

CFL initiative designed to introduce at least one CFL to each of its 100 million US customers over the next few years. In 

initiating this campaign, Wal-Mart has devoted additional shelf space to CFLs and arranged with GE for an initial 21 percent 

cut in the price of CFLs. We can expect a number of promotions for 4-packs, 6-packs, 12-packs, an increasing variety of bulb 

types, and possible additional price reductions. Although this initiative has received major buzz, other stores, such as Home 

Depot and Lowe’s are implementing similar CFL promotions, and a trip to any of these big-box stores will show that extensive 

shelf space is now dedicated to promotion of a wide variety of Energy Star CFLs. These big-box initiatives are compatible 

with the lighting promotion design and can be viewed as additional leverage for program efforts. Utilities with current CFL 

DSM programs have been working with both local and big box retailers, and see any further contributions on the part of 

manufacturers and retailers in cutting prices and extending promotions as contributing to their programs. 

25 The higher the MEF, the more efficient the clothes washer. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Rationale 

The appliance and lighting program elements both improve the product mix in favor of energy efficient 

technologies for the service territory by promoting the purchase and stocking of efficient replacement units. 

Appliance promotions are best developed on a national level with participation 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 regulate minimum efficiencies. At the 

same time, it is structured to work with regional marketing initiatives and local promotion.26

CFL promotions are also best developed by leveraging national campaigns (such 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 listed in Table 63 is included as a promotional 

item, and is not part of Measure RE-32 or a tested measure. The Holiday Lighting Exchange has proven to be a 

very well accepted part of the energy efficiency efforts in California and Alaska. In California it helps focus public 

attention on the greater energy efficiency effort. In the California programs (run throughout the state) in the month 

of December the utilities include LED Holiday Light Strings in their standard CFL exchange programs. Customers 

may bring in three or more strings of old inefficient holiday lights and exchange them for up to three strings of LED 

Holiday Lights.27

 

26 For example, for the history of the residential clothes washer initiative, see Shel Feldman Management Consulting, Research 

into Action incorporated, and Xenergy incorporated, The Residential Clothes Washer Initiative, A Case Study of the 

Contributions of a Collaborative Effort to Transform the Market, prepared for the Consortium for Energy 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 lights or 5 watts/bulb 

for C7 screw-in lights, or 10 watts per standard bulb). The retail cost of a string of 100 LED lights is approximately 3 times the 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 coordinated 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 selection of a regional vendor will provide 

added value in the form of detailed program and technology knowledge and relationships. A basic assumption in 

the development of this program is that it is not so much the size of the 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 the Consortium for Energy Efficiency 

and are provided below:30

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

• 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 features. 

• Energy efficiency, defined by Energy Star performance levels, becomes a standard feature or is available 

across all manufacturers’ product lines. 

• Energy Star represents the most energy efficient quality products available. 

 

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, “Lighting Up the Holidays: An Energy Cost Comparison” at 

www.questline.com/Article.aspx?userID=365464&articleID=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 http://www.aceee.org/utility/ngbestprac/wecc.pdf. Note that this paper is 

for a natural gas clothes washer program, however “lessons learned” regarding relationships and promotion would apply across 

appliance programs. 

29 A review of rebates offered across the US indicates that most utilities are offering rebates from this kind of marketing and 

promotional perspective rather than from a direct resource acquisition perspective. See the Database of State Incentives for 

Renewables & Efficiency, (DSIRE), maintained by the North Carolina Solar Center for the Interstate Renewable Energy 

Council (IREC) funded by the U.S. Department of Energy (DSIRE) at 

(http://www.dsireusa.org/library/includes/techno.cfm?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 Management Programs Final Report February 9, 2009 

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The Energy Star residential lighting promotion will parallel the Energy Star appliance promotion to reach 

residential customers through retail outlets. The lighting promotion provides direct incentives to consumers to 

facilitate their purchase of energy-efficient lights. The incentive 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 also has a significant market transformation 

dimension. Generally, throughout the US, the Energy Star program has been affecting 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 manufacturers and types of CFLs. 

In this program, Duke Energy will be an active participant in the US Energy Star 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 provide a continuing and responsible guidance and 

energy efficiency education message to customers. 

Incentives will be implemented by coupons, in-store markdowns, or upstream manufacturer buy-downs. A coupon 

approach is more suitable for a service territory because it gives the program 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. These 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 reporting will be included as features 

of the vendor program “package.” Data estimation of the baseline market and market potential for the specific 

Energy Star appliances promoted should be refined as a part of the vendor services and developed for each product 

type. Data estimation of the baseline market and market potential for Energy Star bulbs and fixtures in the DEO 

service territory should be refined as a part of the vendor services and developed for each product type (CFL, type 

of CFL, CFL pack, LED holiday lights). In addition, for the program evaluation, data collection to compute freeriders and spillover effects for computing Net-to-Gross ratios will need to be worked out prior to program 

 

31 An alternative or parallel approach is the "lighting catalog," which can be an extensive catalog of lighting options offered by 

a fulfillment vendor or a simple option for purchase of limited types of CFLs over the Duke Energy website. For customers 

not near a cooperating big box or local store, an Internet option is a valuable addition from a customer service perspective. At 

the same time, there is a 'trade off' since the market transformation dimension of this program is better met by working with 

existing supply channels and existing retail outlets. 
Ohio Market Potential Study for Demand Side Management 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 this 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 the provision of coupons 

collected and processed from the retail outlets. 

The cost to participating customers is the customer’s share of the cost (cost of product after the rebate). 

Table 65. Estimated Five-Year Program Budget – Residential 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 $20,000 $0 $0 $0 $0 $20,000 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 $3,055,695 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 $4,719,245 100.0%
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Program 12. Residential Appliance Recycling 

 This is an electricity savings program. The recycling program improves the in-service technology mix for the 

service territory by removing energy hog appliances and deleting them from existence in an environmentally 

friendly way. Appliance recycling is available primarily through two national program vendors, both of which 

bring the necessary environmentally sound technologies and procedures to the program. 

This program targets households with second refrigerators or freezers. 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 customer 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 refrigerators or freezers, preferably those older than 1997. 

The program is designed to take these inefficient older refrigerators off the market entirely, and to do so in an 

environmentally-sustainable manner. Duke Energy will pay a $30 incentive to each customer to help persuade 

them to get rid of the second refrigerator or freezer, and will also cover the cost associated with removing the 

refrigerator or freezer and recycling its components. As a program option, old window AC units may also be 

picked up ($20 customer incentive) from homes in which a visit is scheduled to pick 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 Company incentive, which has elicited a strong positive response from 

customers. Wisconsin Public Services offers a $50 incentive, but we believe Duke Energy's program will be successful with the 

lower incentive amount. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Table 67. Estimated Participation and Savings – Residential Appliance Recycling 

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 inserts, direct mailing materials, and through 

refrigerator distributors. The program will need to mail information to customers on a regular schedule (twice a 

year basis, or more frequently as needed to produce the desired participation rates), and through point-of-purchase 

information at trade ally facilities. The two primary program vendors 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 to demonstrate the age and condition of 

units picked up and also to demonstrate that the units are properly destroyed and recycled. 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 anticipated 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 Appliance 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 $20,000 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 Management Programs Final Report February 9, 2009 

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Program 13. Residential New Construction 

This is a gas and electricity energy saving, “beyond Energy Star” strategy for new residential construction. Recent 

changes in Energy Star and the general success of Energy Star in improving the performance of baseline (Non 

Energy Star) new homes have negatively affected the cost-effectiveness 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 builders, in order to be sure of meeting the Energy 

Star criterion, now build beyond it. From a utility perspective, supporting "beyond Energy 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 efficient, comfortable and durable than 

standard homes constructed according to local building codes. Energy Star homes feature additional insulation; 

better windows, doors and bath ventilation; and high efficiency appliances such as furnaces, AC units, heat pumps, 

and water heaters. These improvements beyond current practice typically cost home buyers a factor of two to three 

times the actual cost to builders for the energy efficiency improvements. 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 inspection fee in the illustrative 

measure package represents a generalized measure package. 

Incentives for new residential buildings programs vary greatly across utilities. For example, the Eugene Water and 

Electric Board (EWEB) provides incentives of $250 or $1,000, and other utilities in the Pacific Northwest states 

provide $1,000, $1,500, or $2,000. NYSERDA and Long Island Power Authority (LIPA) in New York provide 

incentives from $750 to $3,500 to builders of Energy Star homes. New Hampshire utilities 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 success 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 Management Programs Final Report February 9, 2009 

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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 construction 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 Construction 

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 effectively in the market for very 

energy efficient new homes. This is particularly so now with problems in mortgage 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 three. 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 restricted set of measures to reach 

savings levels significantly beyond Energy Star using a set of builder options 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 established 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 value of the brand to builders who would 

like to differentiate their product. Marketing methods include: 

• Newspaper and real estate guide ads 

• Signage 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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• 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 addition 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 stability 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, marketing 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 requirements.36

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

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

• Coordinate with health and safety standards and codes for residential construction. 

• Provide ongoing technical training for builders and subcontractors. 

• Promote builders buy-in into the program by getting them financially invested in 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 combination of gas and electric energy 

efficiency measures. 

Program Tracking Considerations 

As Energy Star homes, Energy Star Plus homes are certified by HERS raters, 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 Paragon Consulting Services. 

Detailed Budget Plan 

An estimated five-year budget for this program is provided below. The anticipated 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 contract to market and 

deliver the new home program, including funding of HERS raters. 

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

• Incentives to be paid to the builder. 

Costs to participating customers include the customer's outlay for any remaining 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 Management Programs Final Report February 9, 2009 

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Table 71. Estimated Five-Year Program Budget – Residential 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 $10,000 $0 $0 $0 $0 $10,000 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 45%

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 Management Programs Final Report February 9, 2009 

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Program 14. Residential Solar Siting 

This is a gas and electric energy savings program. Passive solar design and orientation reduce a home's heating and 

cooling costs and makes the home more comfortable with better lighting and better 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 optionally included).38 This program differs 

from the others in that, in addition to assisting with solar siting of individual homes, Duke Energy will work with 

local, county and state code authorities with the goal of inserting a preference for solar siting into building codes. 

This provision would require consideration of solar siting, but would not make solar 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 structure 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-facing window area reaches 8 to 10 

percent of floor area, the home can be called "sun tempered." This is an inexpensive way to gain a substantial and 

long term energy savings advantage. Design for shading is an important consideration in this program. 

A full-fledged "passive solar" home has south facing glass area of 15 to 20 percent of floor area. With this much 

glass, additional features must be added, such as thermal storage mass 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 tempering" 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 staff work with municipalities, counties and state 

offices to work towards codes that remove all barriers to solar orientation, and require documentation of 

builder/home owner consideration of solar orientation. 

 

38 We expect that insuring solar orientation will lead to most homes also increasingly adopting elements of passive solar 

design, however, for this program we assume only solar orientation. 

39 If, further, south-facing window area is at least ten percent of floor area, the home is "sun tempered" resulting in higher 

energy efficiency. As a further step, a fully passive solar home will add thermal storage mass and summer shading, and special 

windows will be used. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 segments for which new housing is being 

constructed. Since we limit the focus to solar orientation (while expecting 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 consider 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 owners 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 evaluation of the company's effort to improve 

municipal, county, and state codes will provide necessary documentation of effort. 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 Management Programs Final Report February 9, 2009 

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Detailed Budget Plans 

An estimated five-year budget for this program is provided below. The anticipated 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 promotional budget. 

• Incentives 

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

Table 74. Estimated Five-Year Program Budget – Residential Solar Siting 

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 $10,000 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 Management Programs Final Report February 9, 2009 

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Program 15. Residential Low and Moderate Income Weatherization 

This is a gas and electric energy savings program. The program will serve residential customers. There are two 

program elements, based on household income. The first program element is the Residential Low Income Program 

which will serve customers up to an including 150 percent of the Federal Poverty 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 state median household income (this 

is the upper limit of eligibility for public housing under federal Department of Housing and Urban Development 

regulations). It is modeled on the "Gap" programs now implemented by many US electric 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 eligibility. 

It is expected that the homes served by these program elements will be primarily single family owner-occupied 

homes and manufactured owner-occupied homes. However, and although the permission structure is different, and 

typically much less work can be done in a rental unit than in an owner-occupied home, 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 (DSM savings). 

• Unlike other DSM programs, a second core objective is to provide repairs necessary to install energy 

savings improvements in a part of the housing stock that is often old and substandard in comparison to 

middle and upper income housing. 

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

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

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-effectiveness is a lesser issue, although still an important objective. Because of 

their particular focus on the special needs of disadvantaged 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 savings to participating customers, 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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tests for low-income programs. For example, the DC Commission uses an “Expanded All Ratepayers Test” 

incorporating several “non-energy benefits” for low-income programs. In California, if the benefit-cost ratio on the 

Total Resource Cost (TRC) test is 0.8 or above, the California commission uses a “Modified Participant Test” and 

Utility Cost Test that includes “non-energy benefits” for screening measures 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. Similarly, the TRC 

for Pacific Gas & Electric’s Low-Income Energy Partners Program was 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 expected 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 sharing with the Ohio Weatherization Assistance 

Program.41 However, consistent with the direction of current practice, the upper limit for the Moderate Income 

Weatherization Assistance Program is 80 percent of median household income. This conforms closely to the 

Department of Housing & Urban Development upper limit of low income used to determine eligibility for public 

housing.42

 

rather than the utility system avoided energy supply costs. Also, low-income programs often include broader “non-energy 

benefits” (NEBs) such as lowered credit and collection costs and avoided bad debt for the utility, and improved health and 

safety for customers. See: Kushler, Martin, Dan York & Patti Witte, “Meeting Essential Needs: The Results of a National 

Search for Exemplary Utility-Funded Low-Income Energy Efficiency Programs.” Washington, DC: American Council for an 

Energy-Efficient Economy, Report Number U053, September 2005. 

41 For methods and advantages of cost coordination, see Hill, Lawrence J. & Marilyn A. Brown, “Estimating 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 the Consumer Price Index each year, is a corrupted metric that is based on 

wildly inaccurate assumptions regarding household composition, availability of foodstuffs, and overlooks significant household 

costs. Replacing the poverty metric, many states rely at least in part on percentages of median income. The best metric of 

income insufficiency is developed using the family budget study method, developed by Wider Opportunities for Women and 

the Ford Foundation. Using the Department of Housing and Urban Development definition of low income (80% of median 

income) rather than the Department of Health and Human Services definition (60% of median income) goes a long way 

towards making the eligibility criterion reflect the material reality of household economic situations today. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Table 76. Estimated Participation and Savings - Residential Low and Moderate 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 state weatherization program, which already has 

outreach activity through the sub-grantee agencies. The number of program slots to be allocated to the Moderate 

Income program is expected to be a matter for continuing decision as economic conditions change. It is very 

important to have the capability to serve electrically heated homes above 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 programs is likely to depend on 

circumstances that will develop and change. Care will need to be taken to try 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 program options. 

• Customer relations and collections staff will be trained to refer electric heat customers if they are within 

the income range and enquire about weatherization or experience payment problems. 

Program Tracking Considerations 

Data collection and documentation for program purposes and annual reporting will 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 with 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 Management Programs Final Report February 9, 2009 

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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 $20,000 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 $3,911,134 33%

Delivery & Other $2,000 $1,216,000 $1,460,000 $1,704,000 $1,704,000 $1,704,000 $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 Management Programs Final Report February 9, 2009 

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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 asking 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 the tests listed above. A detailed discussion 

of cost effectiveness methodology, including the standard tests listed above, is included in Appendix B. In this 

section, we present the results of the cost effectiveness analysis beginning with a discussion of assumptions. Cost 

effectiveness results are then presented for each perspective and 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 implementation 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 assumptions 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 fixed and variable expenses paid by the 

program administrator. It is important to understand that actual expenditures will vary from planned expenditures 

in their timing and distribution between specific DSM programs. For this reason it is important for the program 

administrator to have flexibility in the administration of DSM program 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 within 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 program year. 

Having some flexibility in the administration of program funding will assist in the management of programs and 

enable staff to fine tune efforts for maximum resource effectiveness. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Miscellaneous Program Assumptions 

Energy savings expected from the program are based on the designs and assumptions presented earlier in this 

report. Key assumptions affecting the annual savings and program cost effectiveness are shown in Table 80 on 

page 108. Most of the items listed in Table 80 were addressed in the DSM Programs section. The savings life is 

calculated from the life of individual measures weighted by program savings 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 represent the value of avoided electric and gas 

loads. Duke Energy’s avoided costs are the reduction in the cost of supply compared to what it would have been 

without the reduction in loads and include all incremental energy, transmission 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 we constructed for each program from our 

modeling efforts. 

Cost Effectiveness Results 

In this section, we present the findings of the cost effectiveness analysis 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 effectiveness tests. As the name implies, TRC 

shows the total cost of the resource relative to supply side resources. Since environmental externalities were not 

considered, the TRC and Societal only differ with respect to tax credits 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 perspective and reflects benefits from lower 

bills and incentive payments. Elements of program design, such as incentive payments, 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 Test 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 perspective, all but three of the programs are cost effective. 

Other Assumptions 

Free-riders, program participants who would have installed the measure without 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 subjective professional opinion. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Accurate estimates are beyond the scope of this study and involve specialized research that can cost several 

hundred-thousand dollars. There is debate over the appropriateness of including 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 Weatherization programs. Both of these programs 

are recommended despite the cost effectiveness results. 

We have chosen to recommend a Renewables and Demonstrations program because 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 technologies to become cost effective. 

Our recommendation is to implement all of the programs included in this report. These programs are listed below: 

Commercial and Industrial Peak Reduction Residential Peak Reduction 

Renewables and Demonstrations Residential Whole House 

Commercial and Industrial Incentives Residential Rebates 

Commercial and Industrial Rebates Residential Appliance Recycling 

Commercial and Industrial Retro-Commissioning Lite Residential New Construction 

Commercial and Industrial HVAC Optimization Residential 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 including direct and indirect program 

expenses and are expected to achieve 684 million kWh and 464 MMCF in annual savings after five years of 

operation. The annual budget for recommended programs increases with program implementation 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 program expenses. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 program specific cost effectiveness 

analysis. For example, program databases for tracking all programs typically require initial and on-going 

development expenditures. We estimate that annual expenditures of approximately $650,000 should be allotted for 

the following types of expenses: 

• School energy education program (educational work in schools with students, including 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 DSM expenses in the results. 

Demand side management spending and savings information reported to the Energy Information Administration 

(EIA) is shown in Table 79 for utilities with between 200,000 to 1,000,000 customers. Spending levels reported for 

2005 have been adjusted to 2007 dollars. The results show a wide range of spending and savings. Spending per 

customer ranges from less than $1 to over $90 on the high end. When expressed as a percent 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 within the range of spending. 

 

43 The NPV for the portfolio of programs is calculated by summing the NPV of recommended programs shown in Table 81 and 

subtracting indirect program expenses. Dividing the result by the weighted life of recommended programs (14.9 years) yields 

an estimate of NPV on an annual basis. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 Subdivision 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 commercial customers at utilities with 200,000 to 1,000,000 customers. 

Source: US DOE Energy Information Administration Form 861 
Ohio Market Potential Study for Demand Side Management Programs Final Report 

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Table 80. Program Assumptions 

Program # 1 2 3 4 5 6 7 8 9 10 11 12 Program Name

C&I Peak 

Reduction

Res Peak 

Reduction

Renewables & 

Demonstration

C&I 

Incentives

C&I 

Rebates

C&I Retro 

Comm. Lite

C&I HVAC 

Optimization C&I Audit

C&I New 

Construction

Res Whole 

House

Res 

Rebates

Res Appli

Recycl

Electric savings (kWh) 0 0 3,488 173,100 25,937 15,236 11,234 16,044 48,862 485 331 1

Gas Savings (CCF) 0 0 10 2,915 -225 632 463 187 798 19 -2 Installed incremental cost $250 $250 $10,600 $47,520 $9,000 $3,000 $2,274 $1,895 $24,708 $103 $35 

Savings life (years) 15.0 15.0 32.9 10.0 18.9 5.0 5.0 5.3 25.0 11.5 4.2 

Net to gross ratio 1.00 1.00 1.00 0.75 0.80 0.90 0.80 0.95 0.95 0.75 0.85 

Incentives $250 $25 $8,530 $28,510 $5,100 $1,500 $570 $950 $12,350 $69 $11 Tax Credits $0 $0 $2,340 $0 $0 $0 $0 $0 $0 $0 $0 

Participant Cost after Incentives and Tax Credits $0 $0 $0 $19,010 $3,900 $1,500 $1,704 $945 $12,358 $34 $23 

Table 81. Program Cost Effectiveness Results 

Program number: 1 2 3 4 5 6 7 8 9 10 11 1

C&I Peak 

Reduction

Res Peak 

Reduction

Renewables & 

Demonstration

C&I 

Incentives

C&I 

Rebates

C&I Retro 

Comm. Lite

C&I HVAC 

Optimization C&I Audit

C&I New 

Construction

Res Whole 

House

Res 

Rebates

R

Appl

Rec

B/C Ratio (Cost Based - Normal Weather)

Utility Test 9.69 4.17 0.15 1.61 2.57 4.87 7.51 3.15 4.61 3.97 3.40 1.TRC Test 19.35 5.03 0.15 1.38 1.84 2.79 2.64 2.12 2.80 3.67 1.68 1.RIM Test 3.24 1.99 0.13 0.66 0.72 0.90 0.95 0.81 1.07 0.81 0.65 0.Societal Test 21.96 6.04 0.22 1.60 2.37 3.06 2.95 2.32 4.43 4.27 1.83 1.Participant Test 9.67 2.60 1.56 2.26 1.93 2.95 2.55 3.04 1.80 4.43 2.67 3.

Recommended Program? (0=No / 1=Yes) 1 1 1 1 1 1 1 1 1 1 1 
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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 program results. Duke Energy Ohio 

might want to consider a continuing collaborative or stakeholder advisory 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 transition 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 perspectives on the appropriate level of effort for DSM 

process evaluation and DSM impact evaluation. Process evaluation documents program implementation, 

conformance of the program as actually implemented with the program plan, barriers to implementation that are 

encountered (and how they are dealt with), and tells the story of program delivery. It can also provide intelligence 

that is useful in modifying a program to move it forward towards its goals. Impact 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 DSM. Some argue that these 

percentages should be reversed, moving towards development of "soft" intelligence to advanced the programs. 

These different perspectives are linked to two paradigms for understanding DSM/DR programs, and are briefly 

discussed in this section of the report. However, regardless of the merits of the two perspectives, we recommend 

for Ohio that a focus on impact evaluation is more appropriate for this first (start-up) DSM cycle. 

As a first DSM cycle is begun, impact evaluation must be given a priority over process evaluation so that 

quantitative results are available on a timely basis to document energy and demand achievements, provide the 

necessary basis for calculating actual cost-effectiveness of programs, and demonstrate the soundness of program 

effort and results to justify full cost recovery. At the same time, process evaluation can also be quite useful for 

early detection of variance of program operation from program plans, for documentation of barriers encountered by 

programs, and for providing both early warning of problems and the ability to respond quickly 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 mid-1990's DSM evaluation 

became much more abstract and complex as more emphasis and larger investments 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 evaluation can be viewed as an example of 

over-elaboration and over-spending on evaluation, trying to develop precise answers to questions that might have 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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been better left unasked or simply discussed verbally and stipulated in 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 deregulation era, evaluation continued to 

develop in California, the Northeastern states, and the Pacific Northwest where DSM efforts continued. As we 

return to serious DSM effort across the nation, we come back to a somewhat different 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 paradigm of 

the 1980s to the "green" and "mitigation of global warming" paradigm of today. Where 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 savings), where the cooperative efforts of 

the US Environmental Protection Administration, the US Department of Energy, 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 physical results by certain targets, all 

sectors of society are expected to cooperate in attainment of the targets, and the effort is more similar to the model 

of wartime mobilization of production during World War II (think of the War Production Board) than to the 

economic model of the 1980s California Cost Tests. The vision is wider than 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 Darwinist sense.44

It is important to recognize that the leading edge of thought in the area of DSM 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 vigorously incorporate this paradigm 

change. By the second or third cycle, parties will be thoroughly familiar with 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 ("Plan C") paradigm quickly.45 If there is to be a 

movement in the Midwest toward the new paradigm, it should be done carefully and cooperatively with state 

commissions and other concerned parties, step by step, as it seems authentic and reasonable to do so. While we 

need to recognize where leading program design and evaluation thinking are going, the first DSM cycle evaluation 

 

44 This is the perspective of advocates of the so-called "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 program would be ramped to 

achieve 70%-80% energy savings. It is likely that government funding would be added to the utility funding mix outside the 

cost test. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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should be guided by the old California Cost Tests, and in particular the Total Resource 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 & Verification (M&V) plans for each DSM 

Program. These are not complete plans, but they outline the type of M&V commitment that will be required to 

conservatively demonstrate results with high confidence and to meet industry practice standards using the 

traditional paradigm of the California Cost Tests and the framework developed for integrated resource planning. 

When an evaluation RFP is issued, the bidders will reply with proposals. The proposals are essentially draft 

evaluation work plans that try to meet the terms of the RFP and the substantive requirements for evaluation. Once 

an evaluation firm is selected, the typical first billable activity 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 information 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. Detailed planning would be only through 

the end of the first program year and the evaluation reports based on the first 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 is 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 evaluation 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, methodological framework, and highlevel schedule)? 

(2) Verification—In a new DSM effort contractor staff may not be initially up to speed, 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 example where a door sweep is 

installed but a broken window is not repaired). While much of this responsibility can be placed on 

contractors (see point 11 in this list for QA/QC), there is also a key role 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 in place). 

(3) Impact evaluation -- How will first year gross energy savings and gross 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 Management Programs Final Report February 9, 2009 

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(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 first program year, and when will 

results be available? Will the evaluation team research and develop deemed values for per unit kWh, 

therms, and kW for use the first year, or until actual measurements can be completed? Will the 

evaluation team's plan for development of deemed results include review of regional results from 

neighboring jurisdictions? If the California DEER database or values used 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 states 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 this 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 reviewed? 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 evaluation 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? What is the count on 

persons from out-of-state who are assigned to a base in the service territory? Which jobs (and 

percentage of personnel expenditure) will be filled from staff and new hires in Ohio outside Ohio? 

What classification system should be used? When will a report on jobs be available? 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 this program? When will a 

report program on QA/QC be available? 

(12) Process Evaluation -- What will be the approach to process evaluation for this program? What will be 

the elements of the process evaluation? When will the process evaluation be completed? 

(13) Reporting -- How will monthly or quarterly reporting of work in progress, goals and results, barriers 

encountered, changes in program and/or evaluation direction be reported? Monthly 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 separate 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 analysis 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 evaluation work across certain programs. 

"Cross-cutting" evaluation work plans should be welcomed if they appear reasonable 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 consultant 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 bidder and also that those positions 

be changed out for the consultant's senior staff. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 number of cases served by a 

program. Also, evaluation works best if the evaluator is on-board when the programs 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 evaluators for different programs, it is suggested that the 

RFP for evaluation permit evaluators to propose which programs they will evaluate. 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, and more capable evaluator involvement. 

Program 1. Commercial and Industrial Peak Reduction 

Load control programs, particularly direct load control programs are self-documenting every time a load event is 

called. The basic level evaluation for a Direct Load Control, Demand Reduction (DR), program is an engineering 

review. Often an engineering review is sufficient. In the engineering review, the evaluation will produce load 

shape impacts for selected curtailment events, and curtailment events will be interpreted with reference to Duke 

Energy Ohio's load duration curve. The evaluation will include reference 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 using regression analysis. Sometimes 

this is seen as a detailed engineering review (particularly if the persons 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 evaluation 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 establish baseline conditions (for this program, 

the absence of a load event) so that the program produced and "no program" results can be contrasted to 

demonstrate the quantitative program effect(s). 

Typically for evaluation of a DR program, the evaluator will build a dataset of hourly load data for a sample (or all 

cases, if metering is available) of program participants over a defined 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 regression controls for weather and other 

conditions so as to provide a clean contrast of expected customer load at a given hour under the "no program" 

alternative with the customer load under program conditions when a load event 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 of 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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different levels of increased participation, using assumptions about the remaining 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 DR projects because there is no reason for 

the customer to reduce load at the time of a load event, except that the event 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 design 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 typically best discussed with and, if possible, cleared 

by the commission in advance so there is no surprise if a DR evaluation introduces these assumptions in place of 

spending dollars on a measurement effort to develop estimates of free-riders 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 preferred 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 program and evaluation should 

carefully separate and "bin" all costs and develop a cost-causation analysis. The evaluation should explicitly show 

all 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 C&I Peak Reduction program. "Smart Grid" applications 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 factors (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 Reduction Program (Program 1), and the 

evaluation is carried out in the same manner. Note that while the residential project proposes primarily AC 

recycling (like the C&I Peak Reduction program), it also contains an electric domestic hot water (DHW) 

component. The DHW calls are planned to follow the AC load events to partially offset the resumption of AC 

load.47 As with the C& I Peak Reduction program, it is reasonable to assume a 100 percent net-to-gross ratio in DR 

projects because there is no reason for the customer to reduce load at the time 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 program. Because the residential "smart 

 

47 This is not necessary for the C&I Peak Reduction program (Program) since the end of the business day will generally mean 

no need to offset AC units coming back on line following an event. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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grid" applications are cost-justified on the basis of several factors 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 student 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-cost-effective and together, the set is not 

cost-effective. The first three of these are usually classed as renewable 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 deploys 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 implied by the paradigm cannot be accomplished 

without rapid deployment and expansion of green technologies. Currently, the authorization 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 legislators. Also, most states 

provide limited demonstration programs rather than full scale programs. This is expected to change with the recent 

extension of federal tax credits for renewable projects, the removal 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, promotion, and communication of DSM to the 

extent that they cannot be cost-justified under the California Cost Tests 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 projects, part of the impact evaluation will be 

a documentation of site adequacy for solar installation. Direct pre and post metering will also be used to 

demonstrate the effects of the technology demonstrations. The process evaluation 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 also address problems of ongoing 

maintenance and care for the equipment. For the "Go Deep" demonstration homes, evaluation will track with 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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current and ongoing assessments of "Go Deep" as sponsored by other utilities, and the attempt to document 

attainment of effective and efficient approaches to achieve 80 percent 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 calculations with limited short-term data logging or spot 

metering. Evaluation for this program will have to be kept simple, but adequate to satisfy needs the customer, plus 

the company's and the Commission’s need for defensible evaluation results. Typically in these contexts, 

measurement is direct and short so as not to interfere with production. For each project selected for verification, a 

verification plan will be developed for the site, depending in part on the measures (EEM complexity, technologies, 

anticipated interactive effects), the project estimated value of energy conserved, and site review including sitespecific and institutional constraints. 

For each project site selected, there will be a pre-installation site review, 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 postinstallation M&V report. 

 Analysis will follow the International Performance Measurement and Verification Protocols (IPMVP) under 

options A (Partially Measured Retrofit Isolation), B (Retrofit Isolation), C (Whole Facility), and D (Calibrated 

Simulation) as suitable under IPMVP to the specific measures installed at specific sites. In cases in which preferred 

IPMVP options might require high cost and in cases in which IPVMP options are not possible due to production 

constraints, practical engineering analysis satisfactory to the facility management and the utility may be substituted. 

A major force operative in these projects is the need not to interfere 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," citing encounter with program barriers 

and incremental learning from the different projects. The overall program evaluation will summarize results over 

the sites and characterize the savings due to the program. Spot or short-term metering is expected to determine 

baseline and post-installation energy use. 

Free-riders, spillover, and net-to-gross considerations will be addressed by a short survey approach for all projects, 

complemented by a small set of in-depth interviews for each project (since the number of projects for this program 

is expected to be small). If the number of projects expands, a stratified sampling approach may be used. 
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For custom projects, the documentation developed by the program implementer (company staff or a program 

vendor of ESCO) is extremely important. Documentation of characteristics of any equipment removed as well as 

new equipment installed is essential, along with date and time of all activity. As with all impact evaluations, 

quantitative documentation of the base case ("No Program") condition is essential 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 adequate for practical purposes, approach to 

measurement, which is often direct "before and after" assessment. Typically 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 prescriptive measures. These will include commercial 

and industrial customers. For profit, non-profit and public agencies (such as schools) 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, depending in part on the measures (EEM complexity, 

technologies, anticipated interactive effects), the project estimated value of energy conserved, and site review. For 

each project selected, there will be a pre-installation site review, 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 Verification Protocols (IPMVP) under 

options A (Partially Measured Retrofit Isolation), B (Retrofit Isolation), C (Whole Facility), and D (Calibrated 

Simulation) as suitable under IPMVP to the specific measures installed at specific sites. The IPMVP procedures 

provide for a range of measurement options. For example, most lighting measures can be assessed by means of 

direct engineering analysis using inputs such as operating hours, the characteristics of new lighting equipment and 

of the equipment replaced. However, other technologies may require pre/post direct metering and/or statistical 

regression analysis. The final Evaluation report will summarize results over the sites and characterize the yearly 

savings due to the program. Spot or short-term metering is expected to determine baseline and post-installation 

energy use in most cases. 

Evaluation of retro-commissioning will look particularly at savings claims and test the duration of energy savings. 

For the most part, evaluation in this area involves an engineering review. However, for selected sites where 

measurement is possible an evaluation approach with baseline, post treatment, and subsequent year measurement 

may be employed. The case pre-screening will also be included in the evaluation. 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 based 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. 
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Program 6. Commercial and Industrial Retro-Commissioning Lite 

This program is planned to make use of a method of detecting outliers that would be likely candidates for retrocommissioning. Retro-Commissioning Lite is planned to involve inspection of systems for optimization of setting 

of controls. Evaluation of retro-commissioning will look particularly at savings claims and test the duration of 

energy savings. For the most part, evaluation in this area involves an engineering review. However, for selected 

sites where measurement is possible an evaluation approach with baseline, 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-SimTM. 

Free-rider, free-driver, and net-to-gross considerations will be based 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, both 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 equipment should take into 

account normal variation of internal loads and also variations due to weather. 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 primarily 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 temperature readings and interval end-use 

metering data (to the extent available). Results will be based on a traditional "pre/post" design and calculated using 

a statistically adjusted engineering model. 

Free-rider, free-driver, and net-to-gross considerations will be based 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/supermarkets. It consists of refrigeration 

improvements, improvements to refrigeration to reduce load, and restaurant commissioning 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. Modeling (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 continues for years. Free-rider, free-driver, and net-togross considerations will be based on short surveys, backed up by a small number of interviews at selected sites. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Program 9. Commercial and Industrial New Construction 

This program targets new commercial and industrial construction. New construction 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 constructed in the "No 

Program" situation. Gross energy savings results are developed as difference between the "as-built" and "No 

Program" model runs. Model runs generally involve many iterations until final models are developed. This is 

International Performance Measurement and Verification Protocol (IPMVP) Option D (Calibrated Computer 

Simulations), assisted by information from the DOE website, on-site survey and verification of selected buildings, 

and the possibility of limited data logger monitoring. The evaluation plan will provide the specifics of the 

instrumentation for the datalogger, calculation methods, and assumptions. 

Free-rider, spillover, and net-to-gross estimates are developed using surveys 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. The remote audits are available (free) to all 

customers. The separate on-site audits for electric or gas heat customers 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 savings claims will be limited to the lowcost measures sent out to accompany audit results. This is an engineering calculation. It will be checked using a 

mini-survey approach to develop information on installation rates to modify results by developing free-rider, 

spillover, and the net-to-gross ratio. Energy savings claims will be limited to direct install items. 

Evaluation of the on-site audit program element will be based on the audit record, 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 interviews, both based on systematic random 

samples of participants. The interviews will also be used to develop process evaluation insights. Vendor staff will 

also be interviewed for the process evaluation. While the remote audit will be open to all customers, evaluation of 

this program will focus on customers with electric or gas heat. Customers 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 potential, impact evaluation will make use of an 

engineering analysis. If there are a sufficient number of electrically 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). 
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Program 11. Residential Rebates 

The Residential Rebates program focuses on rebates for CFLs and for Energy Star Appliances (Clothes Washers). 

For lighting measures, the evaluation approach will be to verify the CFL wattage and CFL life of all rebated units 

according to vendor/brand specifications. Also to verify the typical wattage of incandescent bulbs replaced by 

CFLs (the basic assumption is that all CFLs will replace an incandescent bulb of equivalent luminosity; other 

assumptions will be taken from the national Energy Star program, as listed 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 distribution of CFLs by brand, model, and wattage. The 

program may be required to document light bulbs replaced, for example, through a limited light-bulb exchange, a 

survey, or direct inspection, or a combination of these approaches. 

For appliances, the evaluation approach will be to gather complete technical descriptive information to identify 

each Energy Star appliance rebated (brand, model, characteristics). Results 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 this information and calculation results to 

document energy savings. 

The evaluator will review program records and independently check program savings calculations maintained in the 

program tracking system. It is important to place a directive to the program vendor to document the specific 

technical features of equipment replaced and equipment rebated as a standard program procedure. 

Program 12. Residential Appliance Recycling 

For the residential appliance recycling program element within this program (for refrigerators, freezers and room 

air conditioners), the program vendor will be required to maintain a tracking database containing all of inputs 

required to develop gross energy savings. There are two primary national vendors for this program element and 

both have the required expertise with relevant tracking databases. Since the equipment is recycled, it is possible to 

gather complete information on all required technical data. The evaluator will also examine and report on safe 

equipment disassembly and recycling of components. The free-rider, spillover, and net-to-gross information for 

this program element will be developed from participant surveys and interviews, both based on random samples of 

program participants. 

Program 13. Residential New Construction 

For the "Beyond Energy Star" program element, the primary method of evaluation 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 survey and verification of a few selected 

homes, and limited data logger monitoring. An evaluation plan will provide the specifics of the instrumentation for 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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the datalogger, calculation methods, and assumptions. An equivalent comparison 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 elements of workable passive solar design, it may 

be assumed that there are zero free-riders, first because while home builders 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 process evaluation, to document the efforts at 

working to establish better codes, and will also require review of selected sites to insure solar orientation and 

elements of simple passive design were properly developed. It is important to verify that expertise in solar siting 

and a background in wider passive solar experience has been present in the siting 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 moderate income homes with electric or gas heat. 

There are two program elements, one for homes to and including 150 percent of poverty 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 separately evaluated. M&V will follow a 

traditional non-equivalent control group design using utility energy usage and billing records and either PRISMTM

or regression modeling, with an equal number of treated and similar untreated homes. 
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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-gross methods. 

Protocol for Monthly Program Reporting 

To assist in the company's management of programs and to provide a stream of current information to the 

evaluation team, the vendor for each program should be required to submit a monthly report to the Program 

Manager for each program containing the following information48: 

(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, goals, objectives, program 

elements or measures, please call attention to the changes and describe 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 performance goals as stated in the 

program work plan. Discuss separately for program administration activities, program 

marketing/promotion/communication activities, and program implementation activities 

accomplishments as compared with projected goals and objectives established for program related 

activities for the report period. Where possible describe work activities in both quantitative and 

qualitative terms. In particular, please describe all barriers encountered and if project goals have not 

been met, explain the reasons why and what steps have been taken to ensure that 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 resolved. 

(7) Describe any staff or subcontractor/consultant changes. 

 

48 This list is slightly modified from current California monthly program reporting requirements. 
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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 have 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 survey 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 might 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 party such as a marketing firm or an 

independent evaluator. Surveys may be conducted by phone or mail, or a combination. Because the response 

format for the questions is constrained, small sample theory can be used and the sample sizes will be small for each 

survey wave, but the waves will be repeated quarterly. The survey questions will 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 same survey with new customers each 

quarter, the customer satisfaction results will cumulate to much larger samples over a year and over the five-year 

horizon developed in the plan, so statistical confidence, significance, and power 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 approaches chosen can produce widely 

differing results. It will be important for Duke Energy to standardize these 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 established, demonstrated, and fully 

discussed before arriving at a result. 
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APPENDIX A. METHODOLOGY 

Choice of Methodology 

At the root of most DSM analysis there is some form of energy usage model. The model often used in larger multiutility DSM planning, synthesizes estimates from demographics applied to engineering prototypes. This approach 

is easy to apply to individual measures and to small groups of measures where the result of all the measures is small 

relative to the total energy sales. But this simple synthesis approach 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 information and market penetration information are 

more accurate applied to large regions, but lack precision when applied to smaller regions. Under this 

circumstance, the cumulative errors due to lack of precision can compound into large 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 opted 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 conditions representing the full technical 

potential, which requires the explicit treatment of measure interactions afforded by the engineering modeling 

approach. 

Within conditioned spaces, heating and cooling energy will be influenced by lighting and other internal gains and 

by large scale refrigeration. This results in an interaction of energy savings measures. Another form of measure 

interaction is related to changes in thermal conversion efficiency. Whenever there is a load reduction measure, the 

net realized energy savings will also be dependent on an assumed thermal conversion efficiency. Where a thermal 

conversion efficiency is changed at the same time as a load reduction, the 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 able to deal with measure interactions in an 

orderly way. 

Overview of Model Structure 

The overall utility energy model has two principal components: the energy model, and the demand model. The 

output from energy model drives the demand model. The energy model estimates the 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 each month or day into its primary enduses. The largest and most important fundamental end-uses are Heating, Cooling, and Baseload. In this utility 

analysis, the baseload is subdivided further into DHW, lighting, internal loads (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 and recorded energy sales and load 

information. In this case the energy model is trued up to 2007 monthly energy sales and 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 shape information for 2007 loads. For this 

analysis, energy and demand are modeled for seventeen primary electric energy use segments: four residential and 

thirteen commercial and industrial as described in the market assessment section. Gas energy is also modeled for 

the same defined seventeen energy use segments. Gas energy has no load shape information for “true-up”. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Both the gas and electric models serve essentially the same physical population which allows better modeling 

resolution in both models. In particular, the building internal gains, which are readily evident in the electric data, 

are used in the gas models because the gas space heat needs are directly 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 essentially the same population reveals 

interactions between electric and gas energy savings. In particular the reductions in internal electric energy use, as 

from lighting efficiencies, will create an unavoidable increase in fuel use as the gas heating systems compensate for 

the reduced internal gain. This exported heat load is significant enough to increase gas consumption by of the order 

of 5 to 10 percent, but it is not commonly considered in technical potential studies of electric energy only. In this 

study, with the co-modeling of gas and electricity, the interaction is fully 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 express in physical or engineering terms, the 

measures and treatments involved in attaining the full technical potential. This includes variables for conversion 

efficiency, load reductions and thermal and electrical solar energy measures. The model will also estimate the 

changes in peak demand associated with the applied efficiency measures and temperature changes. The following 

discussion will be in two parts: the first part discusses the electric 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 average monthly temperature is illustrated in Figure 

32 which shows that the daily average residential gas energy use generally 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 F

Avergae 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 restaurant customers, and Figure 34 shows 

an orderly temperature pattern for grocery customers. 

 
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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 F

Average 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 F

Average 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 F

Avergae 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 increases for the warm summer 

months with average monthly temperatures of about 80 deg F, and for the cold winter months with average monthly 

temperatures of about 30 deg F. The model fitted to this data is also shown. This 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. 
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Figure 36 shows the average energy use versus average temperature for the 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 F

Average 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 F

Average 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 temperature relationship will vary from 

sector to sector, but there is a very clear temperature relationship 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 modeled. Note that Figure 32 through Figure 34 

show energy expressed as therms/day as a convenience in developing a perspective; 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 the 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 average daily temperature rather than heating and 

cooling degree days as is more commonly done. This is primarily a matter of convenience 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 for 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 modeling process. 
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Energy Model Structure 

For energy modeling purposes, both the electric and gas customers were subdivided into the seventeen segments as 

described in the Market Assessment section of this report. A simple engineering model of energy versus 

temperature including terms for appliance and end-use saturation levels 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 heating 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 cooling end-uses depend on average 

monthly temperature; the hot water end-use depends on the average monthly inlet water temperature, and lighting 

depends slightly on calendar month and day length. The thermal and electrical solar energy benefits depend on the 

average monthly solar. The other end-uses are assumed constant from month to month. 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 temperatures 

Cooling Monthly average temperatures and long-term average month temperatures 

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 operation of the energy using systems. 

These are the variables that are changed in the process of fitting a model to the data. It is noteworthy that the 

relatively few systems inputs are sufficient to fit a model so closely to the data, but that lies in statistically favorable 

nature of fitting to data that averages thousands or hundreds of thousands of sites. 

This model is very simple in an attempt to be reasonably transparent and reviewable. It admittedly does not include 

many well known second order effects, such as variation of heating COP with temperature. However, the simple 

treatment of energy use in terms of first order effects is sufficient 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 estimate a physically reasonable energy use 

assuming the conditions of full technical potential. 

The model uses performance inputs that are intended to be the key descriptive 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 performance 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 parameter 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. This temperature dependent model can 

empirically derive the principle peak driving end-uses, heating and cooling, but it 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 magnitude and hourly profile of the 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 energy end-use ratios. 

Table 83 shows the parameters used to describe the energy use in each analyzed 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 must add up to the total energy sales of 

record for the test year, and they must true-up at the monthly level as well. 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, and this allows the energy use to be 

estimated for different temperatures than prevailed during the test year, which in general will differ from the long 

term normal year. For planning purposes, usage data is normalized to the average 30-year temperatures for the 

service area. Figure 38 shows the actual temperatures in the test year 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

Month

Temperature 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-year 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 energy. 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 six fundamental end-uses by a combination 

of empirical discovery and engineering calculation, however simple. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 empirically derived estimate of 

baseload. 

The hot water end-use is explicitly calculated from water usage, inlet water 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 the 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 empirically show the total building 

baseload with a small amount of heating and cooling. By carefully analyzing 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 process 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 total baseload into its constituent end-uses: 

hot water, cooking, cloths dryers, and process loads. The further separation 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 commercial analysis categories, there are 

published end-use splits on the average energy use for a full range of end-uses. 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: internal usage/hot water heat and external 

usage/hot water heat. These two ratios are then used in the gas models to maintain 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 ultimately to estimate time of day 

demand or load reductions associated with the energy savings. These electric 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 usage even though time of day gas 

usage plays no role in this analysis. 

This load analysis first derives the residential, commercial, and 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 residential loads in Ohio. These 

monthly coincident peak days are the benchmarks to which the demand model is trued 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. The 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 include 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 131 

applicable transmission and distribution losses. Ultimately, this analysis process will derive the shape of the enduse load activity through a structured comparison and adjustment to the peak 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 Day

Total 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, and 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 energy model has 

estimated the average daily energy use, kWh/day. The demand model then takes 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 distributed hourly demand for a large number of 

customers. The concept of distributed demand assumes that thousands of the same 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 distribution functions”. The demand 

distribution function consists of twenty-four hourly demand factors that specify the fraction of the daily energy use 

that occurs in each hour. The hourly demand factors empirically derived from this analysis and applicable to the 

residential customers are shown in Figure 40 and Figure 41. These end-use demand factors should not be confused 

with load curves. For all end-uses, the individual hourly demand factor is much less than 1.0, and it is only used to 

distribute the daily end-use energy by hours. The hourly end-use load curve results when the hourly end-use 

demand factor has been multiplied by the associated daily end-use energy to give the portion of the daily end-use 

energy used in that hour. The aggregate hourly load curve is then the sum of the various hourly end-use load 

curves for each hour. In the full utility demand model, there is a different set 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 Management Programs Final Report February 9, 2009 

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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 Day

Fraction of Daily Energy

Heat Cool Hot Water

Figure 40. Residential Hourly Demand Factors for Heat Cool, Hot Water 

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 demand factor for heating appears to 

be maximum at 7 PM when the hourly demand factor is 0.06 and the hourly heating energy is 0.06*daily average 

heating energy. Hot water demand is known to be bi-modal occurring in the morning and late evening. In the 

model there are separate demand factor curves for each month for heating and cooling in the residential and 

commercial sectors because the distribution of heating and cooling throughout the day varies somewhat from month 

to month as the temperature of the earth and the structures varies seasonally. 

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 Day

Fraction of Daily Energy

Light Interior Exterior

Figure 41. Residential Hourly Demand Factors for Lighting, Interior, 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 case of dryers, or because the load may 

occur in an attached space such as a basement or wash porch that is not directly part of the conditioned space, as in 

the case of washers. Note also that the hourly demand factors for lighting and 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 practice the hourly demand factors for the 

different commercial sectors are taken to be the same because the load data is not detailed enough to distinguish 

one commercial load from another. Therefore, there is a set of hourly demand 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 Management Programs Final Report February 9, 2009 

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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 Day

Fraction of Daily Energy

Heat Cool Hot Water

Figure 42. Commercial Hourly Demand Factors for Heating, Cooling, and Hot Water 

There is very little electric heating or water heating in the commercial 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 Day

Fraction 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 fact that these loads are principally 

exterior lighting which is on at night. The hourly load factors here of principal 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 ultimately, the truing process 

requires a temperature adjustment in the energy model to simulate peak day temperatures instead of average 

temperatures. The true-up process is done in terms of aggregated site demand, requiring that the comparison load 

information be de-rated by correcting for applicable transmission and distribution 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 these end-uses until the 

modeled sum of the non-weather end-uses is close to that observed from the load study. This comparison is done 

when heating and cooling are at a minimum. The minimum load, unaffected by heating and cooling, is referred to 

here as the non weather load, and is empirically drawn from the hourly load data. 

This is key empirical information because it establishes the ratio of baseload energy to total annual energy which is 

an important input to the energy model for establishing an accurate partition of baseload and heating/cooling 

energy. This ratio for the aggregated residential customers is 0.69, that 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 Management Programs Final Report February 9, 2009 

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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 close comparison between the residential 

demand estimated by the model and the demand from the load study for the sum of the non-weather 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 Day

Demand 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 compared to the monthly coincident peak 

cooling days and the hourly load factors for each of the cooling months are adjusted for best fit between the model 

and load study. It has been found necessary to derive a different load factor curve 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 Day

Hourly 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 the 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 compared to the monthly coincident peak 

heating days and a separate heating load factor curve is derived for each month from the best fit between the model 

and load study. 

 
Ohio Market Potential Study for Demand Side Management 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 Day

Hourly 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 the demand from the load 

study after this heating true-up step. Through these true-up steps, the most significant hourly demand factors are 

empirically derived, and the demand model can now estimate the average daily or peak demand versus hour for 

each month. 

Estimating the Coincident Peak Day Load 

There is a strong temperature relationship between the coincident peak 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 month simulating any group of efficiency 

measures or all the measures used to express full technical potential. 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 impact 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 each month corresponding to any group of 

efficiency measures or all the measures used to express full technical potential. 

Estimating the Coincident Peak Day Load and Technical Potential Load Offset 

To estimate the coincident peak day load, the energy model is driven by peak monthly temperatures instead of 

average monthly temperatures to estimate the peak day aggregate demand, then the applicable transmission and 

distribution losses are applied. 

Ultimately this model will be used to estimate the change in average (or peak) hourly load for each month 

simulating any group of efficiency measures in a particular program or all the efficiency measures used to express 

full technical potential. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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APPENDIX B. COST EFFECTIVENESS METHOLOGY 

Cost effectiveness analysis refers to the systematic comparison 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 and 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 effectiveness in the preliminary stages of program 

design. This allows program planners to subjectively tradeoff cost and other attributes of energy efficiency 

measures (EEM) when considering possible program designs. Cost effectiveness analysis is less precise at the 

technology screening stage because estimates of energy savings and costs 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 with 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 other program level details. Levelized 

Cost (LC) provides such a measure by expressing the cost of a measure in annual terms per unit of energy saved. 

This allows an easy way to compare and rank order the cost effectiveness of measures. The formula used for the 

LC calculations in this report is presented below: 

 LC= DCosts / DSavings 

∑=

−

+

+

=

N

t

t

t t

d

IC OM DCost

1

1

1( )

 [( ) 1( ) ]

1

1

−

=

= ∑ ∆ ÷ +

t

n

t

DSavings ENt d

where: 

 LC = Levelized cost per unit of the total cost of the resource (dollars 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 an 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 constant 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 above. 

 

49 Prepared by the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC). 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 use with this project. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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For example, using a real discount rate of 6.6%, a measure life of 18, an incremental 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 general overview of the standard tests consistent 

with the calculations in the SPM (2001). Actual cost effectiveness analysis was run using DSMore software from 

Integral Analytics. DSMore returns benefit-cost rations and other results 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 EEM cost effectiveness must be made 

when calculating program cost effectiveness. Cost effectiveness of energy efficiency programs involves describing 

the economic impact of the program from the perspective of various groups. This analysis required detailed 

program budgets and design elements such as rebate levels and other program features. Perspectives, also called 

tests, presented in this report are listed in the table below along with 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 revenue (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-energy 

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 expenses include all costs related to delivery 

of the program and include staffing and overhead, advertising, incentive payments, administration fees, and 

monitoring and evaluation expenses. 

Various measures of the economic impact are available for each perspective. 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 from the participant perspective. Each of the 

perspectives is discussed in detail below including the assumptions and formulas required to calculate the measures 

of economic impact. Each of the cost effectiveness tests are discussed below. 

 

50 The values used in the example are not meant to represent actual assumptions. See the Energy Efficiency Measure 

Assessment section for specific assumptions, including the discount rate. 
Ohio Market Potential Study for Demand Side Management 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 considering only the costs paid by the utility. 

Benefits are similar to the TRC Test but costs are more narrowly defined. Its primary purpose is for assessing 

resource acquisition from the perspective of the utility. In this sense, it is similar to the Participant Test in that the 

test provides a measure of cost effectiveness from a single perspective 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 program expenses including incentive payments 

for EEM installation. 

Participant Test 

This test compares the reduction in energy bills resulting from the program with any costs that might have been 

incurred by participants. Other benefits included in this test include incentive 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 level of cost effectiveness, for example, can be 

useful in program design efforts. It should be noted, however, that consumer decision making is far more complex 

than reflected by the Participant Test. For this reason, the test should 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 if 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 for 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 supply 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 all program costs incurred by the utility, 

including incentives paid to the participant. The program costs include initial 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 equipment (less salvage value). The 

decreases in supply costs and lost revenues should be calculated using net savings. 

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 utility's costs. Of all the tests, the 

TRC is the broadest measure of program cost effectiveness from the standpoint 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. Loads used in the avoided cost calculation are 

net of free-riders. Tax credits and reductions in annual O&M costs, if applicable, are also treated as a program 

benefit (or a reduction in costs). Costs used in the TRC calculations include 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 considered 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 credits are counted as a benefit in the TRC test, 

they are considered a transfer payment between members of society and, hence, excluded from the Societal test. 
Ohio Market Potential Study for Demand Side Management 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 screen 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 team with technologies in the field and actual 

DSM program evaluations. While not all of the field and DSM program experience can be cited in published 

works, published references are used to establish a reasonable range of assumptions. The point estimate used 

within that range is based on our professional opinion. The mapping of EEM to residential 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 0.08 

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 

Load Management Eliminate Old Refrigerators RE-26 1.0 

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 

Emerging Technologies Combined Heat/Power, Micro CHP RE-41 

Residential LED Lighting RE-42 
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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 converted to AC by an inverter and the power 

is immediately used on-site with excess fed into the grid. This technology needs 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 suitable 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 verify appropriate wire sizing, disconnects, and 

grounding. Costs are quite site specific, with most of the costs associated with solar electric panels. In the current 

supply-constrained 2007 market, costs are $5.00-$7.00/watt peak for the solar cells alone. Installation and balance 

of system can be expected to add $3.00/watt. For the 2.5 kW array considered here, the total cost will be taken as 

$20,00051 or $8.00/watt. 

Average Annual Expected Savings 

The electrical output for this technology is directly related to the solar 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 applications 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. But earlier thin film forms of the 

technology have showed shorter lifetimes. The lifetime of new thin film 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 proceed 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 including ducts. 

Measure Applicability 

This measure is applicable to residential customers that heat with an electric (resistance) furnace. 

Incremental Cost 

This measure requires replacing the whole heating/cooling system not including ducts. The cost of such a 

replacement is quite site specific, but can be expected to be a first cost of $10,000 or more. There are two contexts 

for such a replacement: 1) early retirement in order to achieve large heating savings, and 2) where the central AC 

needs to be replaced anyway, the most prudent thing would be to replace with a heat 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 the AC 

replacement alone. For this analysis we assume $10,000 as the incremental cost. 

 

51 The C&RD Database lists the incremental capital cost as $6,000 per kW, which would be comparable for an installed 2-3 kW 

system. 

52 The Conservation and Renewables Database lists a measure life of 20 years for standard technology solar PV. 
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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 single 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 measure 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 residence. 

Measure Applicability 

This measure is applicable to existing residential customers with central air conditioners. 

Incremental Cost 

This measure physically involves replacing the entire air conditioning 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 measure 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 operating efficiency of the refrigerant system by 

insuring that it is properly charged. It is common in residential cooling 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 the 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 trained 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 from a cooling system perspective and also typically cost effective. 
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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 efficient heat pump equipment. Rather than 

installing a heat pump with a SEER of 13, the homeowner is encouraged to install a more efficient heat pump with 

a SEER of 15. 

Measure Applicability 

This measure is applicable to new or replacement heat pump installations. 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 pump 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 efficient central air conditioning equipment. Rather 

than installing a central air conditioner with a SEER of 13 the homeowner is encouraged 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 conditioner installations. In this study we assume that 

the replacements in the next ten years are applicable to about 20 percent of residential customers and that efficient 

central air conditioners are applicable to about 60 percent of new residential 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 DEO 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 important 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 Management Programs Final Report February 9, 2009 

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Measure Applicability 

This measure is applicable in the residential and small commercial sector where central air conditioning is not used. 

Incremental Cost 

The incremental cost of the more efficient unit will vary with the size 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 size 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 conditioner 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 temperature in the attic through attic ventilation 

and through the use or optically reflective roofs. Recent improvements in roofing 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 temperatures significantly thereby reducing heat gain to 

the home and also improving the distribution efficiency of any ductwork or distribution fans that are located in the 

attic space. Attic cooling lowers the thermal gain to the residence below, and it also improves the distribution 

efficiency of any attic duct work. At least half the cooling savings attributable 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 including 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 to be zero. All other roofing costs 

and required are ventilation assumed to be unchanged by this measure. For this study we will take the incremental 

cost to be an average of $0.10/square foot over the five-year planning period. For the average residence, $158. 

Average Annual Expected Savings 

The savings from this measure proceed from lowered cooling energy by reducing ceiling heat gain. According to 

DOE, ceiling heat gain accounts for 15-25 percent of the residential cooling load. The radiant barrier has been 

observed to reduce ceiling heat gain by 16-42 percent. The cool attic strategy also improves cooling distribution 

efficiency if the cooling ducts or fan unit is in the attic. For this study we will take the average annual savings to be 

560 kWh/yr. Savings larger than these will be found in the extreme cases with poorly 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. 
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EE Windows (RE-14) 

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-heated residences, the electric savings are 

for cooling only and are much less than the heating savings. So the cost effective application of this measure is to 

electric heated residences only. 

Measure Applicability 

This measure is considered applicable to a portion of the residential customers that heat with electricity. 

Incremental Cost 

We assume a cost of $25/square foot of window area. DEER uses a value of $28/square foot of window area, and 

C&RD uses a value of $16/square foot. For the average residence considered 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 electric heat source and the square feet of 

windows replaced. 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 savings will be taken as 1,334 kWh/yr for electric heated residences. 

Expected Useful Life 

This analysis uses an effective useful life of 25 years, the DEER uses 20 years. 

Programmable Thermostats (RE-15) 

Programmable thermostats save energy by lowering the average daily temperature 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 hazard 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 selected 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-standard 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 Energy 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 the 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 as good candidates for a new programmable 

thermostat. 
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Incremental Cost 

Programmable thermostats cost retail in the range of $50-$100. A utility program 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 installation 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 thermostat. 

Average Annual Expected Savings 

Thermostat savings are best realized when the set back interval is of the 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 hours. For this estimate a five degree thermostat 

set back is assumed, leading to heating savings in the average electric-heated home of 500 kWh/yr. 

Expected Useful Life 

In principal, these thermostats can last for in excess of 20 years, but the 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 level. This measure saves both heating and 

cooling energy. In the case of gas-heated residences, the electric savings are for cooling only and are much less 

than the heating savings. So the cost effective application of this measure is to electric heated residences only. 

Measure Applicability 

This measure is considered applicable to a portion the residential customers 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 electric 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 savings 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. It involves using blower door technology to 

pressurize the home. Once the house is pressurized, the air leaks are identified 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 installed 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 difference in the costs. 

56 DEER list the EUL as 12 years. 
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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 per 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 our 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 materials 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 cycle. This allows the 

ground source heat pump to operate with about twice the efficiency of a conventional air source heat pump. 

Because the ground is at a much more stable temperature than the air, resistance backup heat can be avoided. And 

it also simplifies the operation of the heat pump because defrost is not an issue. 

Measure Applicability 

This measure is applicable to new electrically heated residential construction and to existing DEO heat pump 

customers that have suitable sites. The total pool of candidate customers will be taken as 10 percent of residential 

customers, and we will assume that only 30 percent of these have suitable sites. 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 the 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 heat exchanger only and the remainder of 

the system will be considered similar in cost to a conventional heat pump. Although 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 which 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 insulation to the R11 level. This measure 

saves both heating and cooling energy. In the case of gas-heated residences, the electric savings are for cooling 

only and are much less than the heating savings. Therefore the cost effective application of this measure is for 

electric-heated residences only. 

Measure Applicability 

This measure is considered applicable to a portion of the residential customers that heat with electricity. 

Incremental Cost 

This measure contemplates adding wall insulation to a 2x4 stud wall where there 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 are 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 the overall cost of $1.32. Our estimate is more conservative; 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 electric 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 savings 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 years. 

Solar Siting Passive Design (RE-23) 

This measure applies to new construction that can be designed and sited to capture 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 construction starts. 

It is well known that if a new residence is tightly designed thermally, and oriented so that about 75-100 feet of 

glazing is near south facing, then its heating requirements can be reduced by about 30 percent. Much larger heating 

reductions have been demonstrated, but then the designs need to become more extreme with respect to south glass 

and with respect to protection from unwanted summer sun. This measure is intended to represent a “minimum 

graceful design”, yielding the maximum savings with the least departure from a normal residential appearance. 

Physically, this measure consists of reorienting and redistributing glazing that would have been used anyway, and 

in using proper overhang to provide some summer shade. In passive solar design, the south glazing should usually 

have a high solar heat gain factor. This is an unusual glazing specification 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, adjacent 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 exceptions where thermal design has been 

explicitly considered and documented. 

Measure Applicability 

This measure is applicable to new electrically heated construction 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 overall 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 essentially 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 measure is taken here as $500 per building. Not 

very much needs to be done to capture these minimal passive solar heating savings, especially if it is done at the 

outset. The context for this incremental cost is assumed to be to a developer for some extra consideration in overall 

site planning. 

In many reported cases of solar design, the cost is many times this and the building is usually much more expensive 

as well, but these costs are the common costs associated with personalized 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 are taken at approximately one-third of the electric 

energy used in typical heat pump-heated residences in DEO territory, 1,500 kWh/yr. These savings have been 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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referenced to a heat pump as base case because it is unlikely that a new electric-heated residence would be built 

with electric resistance heat. However, relative to the rare case 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 years 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 efficient 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. But for the purposes of this study the 

measure is restricted to new residential manufactured all electric 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 heating. 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 assumed upgrade from resistance heat to a heat 

pump because this building stock is predominantly sited where there is no gas service and electric energy is the 

primary source of space heating. Savings estimates for an Energy Star manufactured 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 to 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 estimating 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 is some choice in selecting the package of 

measures. An initial cost effectiveness screening of this measure showed that the maximum cost effective cost is 

$3,000. This requires composing a package of only the most cost effective measures. Therefore this package 

includes the strongly cost effective measures of flow efficient showerheads and inspection of heat pump that are not 
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commonly part of the Energy Star package (but should be). Based on the choice of the 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 used a model of a prototypical all 

electric participant. Using this model the full package of measures is examined to estimate the energy savings for 

the individual measures in the package. 

The Energy Star new residential achieves energy savings principally through 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: First the thermal conductivity of the 

envelope is reduced by small coordinated improvements to the building shell, better glazing, selective increase to 

insulation levels, and by attention to air sealing and framing details. Then, the performance of the heating cooling 

systems is improved by duct insulation and testing. Finally, the internal energy use 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 the 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 further reductions are all beyond the core 

Energy Star package, and only the first, the solar siting, is cost effective currently. The further enhancements from 

a more efficient heat pump and other solar applications are quite reliable and effective, but beyond the current cost 

effectiveness horizon. 

In practice each building is unique, and slightly different packages of improvements to shell and appliances are 

selected based on specific circumstances, but the savings will break down approximately as in Table 86. In this 

example the annual energy use for an all electric residence has been reduced from about 19,400 kWh/yr to about 

15,600 kWh/yr, about a 20 percent reduction by core Energy Star measures alone and another 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 loss, 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 noted in Table 87. 
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Table 87. Energy Star Plus Savings Measures 

Shell insulation 

Duct insulation and leak testing 

Three energy star appliance including efficient lighting and an energy star 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 efficient 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 collecting and dismantling underused older refrigerators. 

Ideally only operating or operable refrigerators would be eligible for 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 acquiring 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 including operable but not operating refrigerators. 

Reported savings estimates vary widely from an astonishing 1,900 kWh/yr for C&RD to 413 kWh/yr observed in 

the Connecticut Appliance Turn-In program. For this program, the savings will 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 refrigerator would have continued to be used 

absent the program. There is no reliable research on this and for this program 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 points 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 could lead to slight behavior changes such 

as different clothing when lounging around or sedentary. The heating and cooling savings from such a simple 

change can be large, of the order of 2,000 kWh/yr. The savings will be greatest 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 greatest 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 heating 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 high 
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savings would be about 2,000 kWh/yr for a five degree set back to an electric furnace. 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 more efficient clothes washer than a 

standard clothes washer. This measure has significant water and detergent 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-loading washer uses about 40 gallons of 

water per full load. In contrast, a full-size horizontal axis clothes washer uses between 20 and 25 gallons. 

Measure Applicability 

This measure applies only to customers who do not currently have a high efficiency clothes washer. 

Incremental Cost 

The incremental cost for clothes washers vary significantly depending on the 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 wide variety of costs for 

Energy Star clothes washers, $400 is a good mid-range value for the purposes of this analysis. 

Average Annual Expected Savings 

The kWh savings from a clothes washer depend to a significant extent on the source 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 will 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 DEER 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 definition Energy Star dishwashers 

are more efficient than a comparable standard new dishwasher. This measure applies strictly to the improved level 

of performance, Energy Star versus Standard. An Energy Star qualified dishwasher 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, and has an average 

usage of 215 washes. 

Measure Applicability 

For this study, we will take the applicability of these units to be 60 percent of the existing residential sector and all 

of the new residential sector. In fact, Energy Star dishwashers are a required item in Energy Star new construction. 

Incremental Cost 

The incremental retail cost for dishwashers varies depending on the features 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. 
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Average Annual Expected Savings 

The savings from this measure are primarily due to decreased hot water usage. 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 lists 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 savings because the current stock of 

new refrigerators is much more efficient than the older stock more than 10 years old, and significant savings will 

result when an old refrigerator is replaced by a new one, even a non-Energy Star one. These savings are a natural 

part of the background residential usage changes in response to the current standard market and are considered 

savings that would have happened absent any particular measure. For this particular measure, the measure savings 

used in program cost effectiveness are only for the Energy Star increment, 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 sector, essentially all of the residential sector for 

which an Energy Star model is available. 

Incremental Cost 

The incremental retail cost for refrigerators, vary significantly 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&RD does not list a value 

due to the variability in the possible costs. Due to the wide variety of costs 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 relative to the energy use of a new but non-Energy 

Star refrigerator. In fact a significant portion of the new refrigerator purchases are to replace old refrigerators, and 

even a non-Energy Star refrigerator will save about 300 kWh/yr relative 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&RD also use 18 years. 

Pool Pumps (RE-31) 

This measure saves energy by employing a 2 speed pool pump motor. At the lower speed 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 the 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 applicable 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. 
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Average Annual Expected Savings 

The savings from this measure depend on the degree of flow reduction and the number of hours of reduced flow. A 

typical power reduction to be expected is 500 watts, and in a full season the duration 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 full application of this measure 

consists of converting all the most used lighting fixtures from incandescent 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 the ten-fifteen most frequently used sockets 

that are the primary targets for a whole house lighting conversion. A satisfactory conversion of these most 

important sockets may require recourse to a variety of bulb styles, powers, 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 factor for this measure. 

Incremental Cost 

The cost for this technology continues to decrease, and there are various sales 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 adaptation 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 load 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. This equates to 55 kWh/yr/bulb. The 

savings listed in DEER range from 20 to 59 kWh/yr/bulb, depending on which CFL is replacing which 

incandescent bulb. For these purposes, the various applications of this measure 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 long 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 for 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 residential construction. Daylight has the highest 

lumens/watt of any light source. A little bit of daylight can go a long way toward lighting a space without 

introducing as much heat as other light sources. Physically daylighting takes the form of small skylights or 

clearstories, and high small windows coordinated with light colored interior wall and ceiling surfaces. In practice, 

good daylighting design involves the avoidance of glare and over lighting as well. 
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Measure Applicability 

This measure is applicable to 100 percent of the residential new construction. 

Incremental Cost 

This measure is being applied in new residential construction where lighting is a natural consequence of window 

placement. In this context daylighting design is considered in the distribution of the windows and skylights to 

make light distribution more uniform and to avoid glare. These design impacts will have minimal cost if they are 

brought in at the planning stage. For this study the incremental cost is assumed to be $500. 

Average Annual Expected Savings 

Properly designed daylighting can save almost all the lighting energy used during daylight hours, but not all 

residences are used during the day. The EIA Residential End Use Survey finds 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 last 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 lighting 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 lights by occupancy controlled lights. It is 

assumed that a single occupancy controller and light costs $50, and that a full 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 to a minute to come to full brightness 

which may be unacceptable in some cases. For this analysis, we will assume that 150 watts is being controlled, and 

that a savings of 5 hours/day is achieved. Annual savings for these purposes is taken as 250 kWh/yr. 

Expected Useful Life 

For the purposes of this analysis, we will use 10 years as the useful life of this measure. 

Tank Wrap, Pipe Wrap, and Water Temperature Setpoint (RE-35) 

This technology consists of adding insulation around the water heater, checking and resetting the tank thermostat, 

and replacing leaky shower flow diverters. These measures are principally tank-centric, and can be self-installed 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 

The applicability for measures of this type is discussed under Low Flow Fixtures. In DEO service territory, electric 

water heat accounts for about 40 percent of water heating, 2/3 of that 40 percent would be eligible for this measure 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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because in some cases the tank cannot be accessed to install a blanket 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 installation 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 Fixtures. 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 practical purposes the lifetime will be considered 

limited by the expected remaining lifetime of the hot water tank, 6 years.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 lavatory faucets. The current US standard for 

showerheads is 2.5 gpm. Measurements of the existing shower flows in building 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 standard 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 cautious about the use of “pressure compensating” showerheads. These are more prone to clogging and can lead 

to unintentional increases in flow rate in low pressure situations such as well water systems or older systems with 

occluded piping. Customer acceptability is an important component in a showerhead program. Customers will 

remove new low flow showerheads if the quality of the showering experience declines with the new showerhead. 

Therefore it is important to research and test the showerhead chosen for the 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 sector that heat water with electricity. 

Incremental Cost 

Low flow fixture costs vary widely, and depend on whether the fixtures are purchased 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 acceptability 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 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. This 

measure is so cost effective that even with a more expensive showerhead the program 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 significant impact on savings. This 

program is designed around a 2.0 gpm showerhead as compared to a 2.5 gpm showerhead. Therefore the savings 

 

57 Khawaja S. PhD, and Reichmuth, H. PE., 1997. Impact Evaluation of PacifiCorp’s Ebcons Multifamily Program. 

Pacificorp. 

58 DEER says 15 years for pipe insulation, 9 years for faucet aerators, and 15 years for an efficient water 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 per unit and $37.946 installed cost. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 this DEO program will be greater. 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, kitchen 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 “takeback” in the event that the new 

showering experience is longer than the original. Actual savings observed in the comprehensive cases include these 

takeback effects, and are in the range of 650 to 950 kWh/yr. The savings from a showerhead 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 lifetime 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 ownership 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 case of electrically heated water, the annual 

water heating energy is about 4,800 kWh/yr. The heat pump water heater is essentially 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 tank and associated pumps and controls. 

Measure Applicability 

This measure is applicable to the 40 percent of the residential sector with electric water heat. Of these, 50 percent 

are assumed to have a suitable location for the unit. Overall measure applicability is assumed to be 20 percent of 

the residential sector. 

Incremental Cost 

The incremental cost of this measure consists of the cost of the heat 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 special 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 perform 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 appliance, 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 case of electrically heated water, the annual 

water heating energy is about 4,800 kWh/yr. This measure saves energy by eliminating 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 switch from an electric tank to 

an electric tankless heater, this measure makes no sense. 

 

60 DEER Database, 2005 
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Measure Applicability 

This measure is applicable in the residential sector only where space 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 case of electrically heated water, the annual 

water heating energy is about 4,800 kWh/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 favors the more moderately sized systems that can fully 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 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 customers with electrically heated hot water. Of 

these electric hot water customers, only 50 percent are assumed to have an adequate 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 building skills including plumbing, electrical, 

roofing and general carpentry. In the general market, a turn-key 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 $6,000. 

Average Annual Expected Savings 

The savings from solar water heaters depend on site specifics, principally solar radiation, air temperature, incoming 

water temperature, and hot water usage rate. Considering these dependencies 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 inspecting 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 benefit of limiting the waiting time for 

usable hot water at the tap or showerhead; waiting times can be reduced from 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 this measure is tested and viable it involves 

the use of small diameter piping in a context that is not familiar to the plumbing trade or to building officials. It is 

therefore considered an emerging technology and will not be included in program recommendations. 
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Measure Applicability 

This measure is applicable to 100 percent of the residential new construction. 

Incremental Cost 

In large scale use, this measure offers the possibility of actually lowering the cost of hot water plumbing because 

smaller diameter less expensive pipe is used. But specialized manifolds 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 percent 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 classes 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 heat 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 an existing gas thermal load has a unique 

efficiency opportunity in terms of fuel use and in terms of carbon offset because 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 as summer capacity, and as local backup 

power. Notably, this resource is based on ultra clean and quiet combustion in sterling cycle engines or fuel cells, 

and it can potentially be readily sited anywhere in the service territory 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 reflect the demonstration nature of the resource. For 

these purposes we will take the cost as $2,500/kW, $10,000 for the installation assumed here. 

Average Annual Expected Savings 

The savings from this measure have not been widely measured but based on the available space and water heating 

load an electrical output of 5,000 kWh/yr is assumed. A greater annual output could easily be achieved, but only by 

generation with no useful thermal load which would be much less fuel efficient. 

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 metal halide lighting applications. At the 

present the color of “white” LED light is somewhat blue tinted and not always suitable for general interior 

applications. But this color is often suitable for specialty applications such as back lighting of flat panel displays, 

and outdoor applications. It is probable that LED lighting will find its place 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. 
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Measure Applicability 

This measure is still evolving but will likely be applicable to a large percentage of the residential sector. 

Incremental Cost 

The incremental cost for an outdoor LED light of this type is taken here to 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 watt 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 Commission. 

C&RD: Northwest Power and Conservation Council’s Conservation Resource Comments Database, which is 

continually updated as new information becomes available. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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APPENDIX D. NON-RESIDENTIAL ELECTRIC EEM DOCUMENTATION 

The purpose of this appendix is to provide documentation of the assumptions used to screen 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 team with technologies in the field and actual 

DSM program evaluations. While not all of the field and DSM program experience can be cited in published 

works, published references are used to establish a reasonable range of assumptions. 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 

Design (new) Integrated Building Design (new) CE-9 1.0 

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 

Power Distribution Energy Star Transformers (new) CE-14 0.01 

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 

Other VendingMiser® CE-31 

LED Outdoor Lighting CE-32 0.20 
Ohio Market Potential Study for Demand Side Management 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 converted to AC by an inverter and the 

power is immediately used on-site with excess fed into the grid. This technology needs full solar exposure and 

shadows can significantly restrict output. In the commercial context, this 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 verify appropriate wire sizing, disconnects, and 

grounding. Costs are quite site-specific, with most of the costs associated with the solar electric panels. In the 

current supply constrained 2007 market, costs are $5.00-$7.00/watt peak for the solar cells alone. Installation and 

balance of system can be expected to add $3.00/watt. For the 11 kW array considered here, the total cost will be 

taken as $90,00061, or $8.25/watt. 

Average Annual Expected Savings 

The electrical output for this technology is directly related to the solar 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 applications 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. But earlier thin film forms of the 

technology have shown shorter lifetimes. The lifetime of new thin film technologies is expected to be of the order 

of 25 years but it is not known. For these purposes the lifetime is taken as 25 years.62

Small HVAC Optimization and Repair (CE-2) 

This measure applies to packaged rooftop units. These units are the predominant means of conditioning for smallto-medium scale commercial buildings. The savings proceed from improved compressor 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 utilities (eg, SCE, PG&E, National Grid) are 

offering programs employing a structured diagnosis and repair protocol. Often these programs use trade named 

processes such as Proctor Engineering “check me”, or PECI “aircare plus” etc. Candidates for this measure are 

rooftop units found in a wide range of sizes with output capacities of from 4 to 50 tons with the most predominant 

capacity being 5 tons. 

Measure Applicability 

This measure is applicable in 70 percent of the large building commercial sector. 

Incremental Cost 

The cost for this technology includes site visits and diagnostics with simple repairs performed immediately without 

need for a second site visit. The costs will naturally vary with the specifics of the repair. Planning estimates for 

 

61 The C&RD Database lists the incremental capital cost as $6,000 per kW, which is somewhat lower for an installed 11 kW 

system. 

62 The Conservation and Renewables Database lists a measure life of 20 years for standard technology solar PV. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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this diverse mix of treatments, made by the Northwest Power and Conservation Council (NWPCC), use $0.20/first 

year kWh savings. In the average large commercial building considered here, 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 significant corrections to the refrigerant 

charge or to economizer operation savings on the order of 2,500 kWh/unit have been observed. In the average 

commercial large building considered here, we will assume 5,617 kWh/yr as the whole building savings where 2-3 

units have been improved. These units usually supply gas heating as well, and the economizer 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 treated 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 correcting problems and ensuring system 

functionality. Commissioning seeks first to verify that the system design intent is properly executed, and it goes 

further by comparing actual building energy performance to appropriate bench marks to validate building 

performance as a whole. The best candidates for this measure are buildings larger than about 100,000 square feet. 

While commissioning in general can become quite complex, often the greatest savings proceed from a simple 

review of building operations to assure that the building is not being unnecessarily used during non-occupied times. 

New Commissioning (CE-3) should be done as part of the construction contract, and most contractors will claim 

that this is normal business. But the performance of even new buildings is often erratic for a year or two while 

unnoticed problems come to light. This new commissioning is a detailed process 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 operation to see how the building actually 

operates as a whole. By contrast, Re/Retro-Commissioning (CE-4) seeks to tune a building that is already 

operating and has a track record of a year or two at least. The Retro-Commissioning 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 usually necessary even for buildings that 

have been initially commissioned. There will be the occasional building which 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-Commissioning 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 existing 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 estimates 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. Retro-Commissioning, or “commissioning 

lite”, that prescreens buildings on the basis of billing data and follows it 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 construction process. 

Average Annual Expected Savings 

Savings from this measure can vary widely. For New Commissioning, it is assumed here that the building electric 

energy use can be reduced by on average 20 percent, leading to energy savings of 40,630 kWh/yr for an average 

large commercial building. For Retro-Commissioning electric savings of 15,236 kWh/yr for the average large 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 163 

building are assumed. A significant portion of the energy savings due to both of these measures is associated with 

the heating fuel, usually gas. In estimates of program cost effectiveness 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 treated 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 windows. 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 loss 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 the average building in this study. 

Average Annual Expected Savings 

It is assumed here based on DEO specific simulations that 1,500 square feet of high 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 heat exchangers and pipes to 

lower operating energy requirements. Premium equipment is often designated with and energy star rating or by 

CEE as tier I or tier II, or it may not have an official rating, but it does deliver 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 packaged 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 construction. 

Incremental Cost 

The incremental cost for this technology will be very diverse and quite site specific. Based on NWPCC estimates, 

the premium upgrade costs about $0.46/kWh/yr. For the average building considered here that cost would be 

$2,603/site. 

Average Annual Expected Savings 

Savings attributable to this measure are generally fairly small because they represent only an incremental 

improvement in performance on equipment that is already required to be reasonably efficient. It is assumed here 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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, taken 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 of large HVAC which generally leads 

to large savings. By contrast this measure applies to the operation of the equipment 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 functioning properly. 

Measure Applicability 

This measure is applicable in 20 percent of the commercial sector with large HVAC systems. 

Incremental Cost 

The incremental cost for this technology will be very diverse and quite site specific. Based on NWPCC estimates, 

the premium upgrade costs about $0.34/kWh/yr. For the average building considered here that cost would be 

$2,493/site. 

Average Annual Expected Savings 

Savings attributable to this measure are generally fairly small because they claim only the savings due to restoring 

equipment to its original operation. For this study these savings are assumed 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 treated 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 load. Integrated design refers to an 

approach commonly used to design energy efficient new commercial buildings. Essentially, the design process 

lowers building loads, then carefully matches HVAC equipment to the lowered load. In practice the most 

significant characteristic of efficient new commercial buildings 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, while the changes to the heating loads are more 

complex. The reduced internal gain from lighting etc will actually increase 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 equipment sizing rules of thumb, 

which generally result in oversized equipment. A primary objective in integrated design is to down size the 

equipment leading to more efficient operation, and often leading to installation cost savings. It is notable that the 

shell improvements will usually result in more stable and comfortable interior wall and glazing surface 

temperatures that permit alternative and reduced means of heating and cooling 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 integrated 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 Management Programs Final Report February 9, 2009 

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Measure Applicability 

This measure is applicable in 100 percent of new commercial construction, 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 site specific. The incremental costs of 

efficient new commercial buildings developed through integrated design are quite building specific, and may range 

widely from about $3.50/square foot to negative incremental cost. But in general, the incremental cost will be the 

net of some increased costs for various building elements (such as lighting, external shading elements, insulation, 

more efficient equipment, more sophisticated controls, etc), and some decreased costs resulting from reduced 

equipment sizes and simplified distribution strategies. There are examples of highly efficient new commercial 

buildings that have negative incremental costs, but a good rule of thumb is to assume 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 complex to estimate. Therefore in order to 

minimize overhead, utility programs that provide incentives for integrated design will base the incentives on 

modeled and deemed per square foot estimates of energy savings for principal 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 average 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 efficient 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 this analysis we consider 20 percent better 

than code to be an achievable and significant goal. For the average building considered 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 here as 50 years. 

Efficient Package Refrigeration (CE-10) 

This measure consists of an efficient packaged and optimized new refrigeration system. 

Measure Applicability 

This measure is applicable in portions of the grocery sector and in some restaurants. 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 site specific. Based on NWPCC estimates, 

the efficient packaged refrigeration costs about $0.15/kWh/yr. For the average 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 years. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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 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 speed. 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 site specific. Based on NWPCC estimates, 

the premium upgrade costs about $0.33/kWh/yr. For the average building considered 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 years. 

Premium Motors (CE-12) 

This measure saves energy by reducing energy losses in motors. Motor energy use is preponderant in 

manufacturing applications where of the order of 40-60 percent of electric energy is used in motors, and these 

motor applications are frequently full time operation or near full time operation. 

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

12

5

10

2030

50

75

125200

Rated Power, HP

Efficiency 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 efficient motor. While the 

efficiency gain is only about 2 percent for the smaller motors, it is important 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 motors 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 Management Programs Final Report February 9, 2009 

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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 portion 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 important element in the use of higher 

efficiency motors is that the equilibrium speed of the higher efficiency 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 may actually lead to an 

unintended but slight increase in flow and power unless the drive system is adjusted 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 Load 

Efficiency, 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 sectors, and in suitable retrofit situations. In 

all, this measure is taken as applicable to 60 percent of the commercial and manufacturing sectors. 

Incremental Cost 

The incremental cost for this technology will be very diverse, and dependent 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 adjusted 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 average 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 useful 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, alter 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 particular and often varying fluid 

flow. Often the fluid flow is controlled by means of dampers or throttling valves that force the fan or pump motor 

to operate inefficiently. The savings associated with the proper speed control are most pronounced when the motor 

is operating at less than its rated capacity. At full capacity there may be little savings. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Situations involving fans or pumps, (which is the most common commercial/industrial application of motors), have 

a very high energy sensitivity to flow rate; typically the energy varies as the cube of the flow rate. Attention to how 

the flow is controlled with the use of variable speed controls, and elimination of excess flow can often lead to 

power reductions of the order of 50 percent with only minor reductions in flow. In this manner, variable speed 

motor control permits finer tuning and control of pumps, fans, compressors, and conveyers. 

There is another genre of motors and controls referred to as brushless permanent magnet torque motors. These are 

very high torque motors that have no drive and can be very precisely controlled. 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 sectors, and in suitable retrofit situations. In 

all, this measure is taken as applicable to 30 percent of the commercial and manufacturing sectors. 

Incremental Cost 

The incremental cost for this technology will be very diverse. Based on NWPPC estimates, an aggregated estimate 

of the costs of adjustable speed drives is about $0.86/kWh/yr. For the average 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 percent 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 useful life of 15 years. 

Energy Star Transformers (CE-14) 

This measure saves energy by reducing energy losses associated with stepping 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 down to its ultimate application voltage 

through a transformer. These transformers are typically efficient (>95%) when they are properly loaded, but an 

oversized or under loaded transformer can operate at a much lower efficiency; therefore, it is important that the 

transformers be sized properly. However, even when the transformer is properly 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 illustrated 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 KVA

Efficiency Percent

standard

efficient

Figure 49. Transformer Efficiency Specification NEMA TP-1 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Figure 49 shows the efficiency improvement to be gained by using the more efficient 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 the top. 

Measure Applicability 

This measure is applicable in the new commercial and manufacturing sectors, and in suitable retrofit situations. In 

all, this measure is taken as applicable to 30 percent of the commercial and manufacturing sectors. 

Incremental Cost 

The incremental cost for this technology will vary with the size of the transformer. For this study, we take a 150 

KVA transformer as the average with an incremental cost of $98 for the typical facility considered here. 

Average Annual Expected Savings 

Transformer savings are based on the size of the transformer, and are based on the power throughput of the 

transformer as well as standby losses, 8760 hours/year. For this average transformer operating at 60 percent of 

load, we estimate savings of 10,000 kWh/yr. For the average facility considered 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 useful 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 converters are about 30-40 percent efficient. More 

efficient designs called switching power supplies operate with an efficiency 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 NWPCC estimates, the premium upgrade 

costs about $0.074/kWh/yr. For the average building considered here, that cost would be $271/site. 

Average Annual Expected Savings 

Electronics and computers use 12 percent of commercial energy on a US average basis. This equipment is often on 

24 hours a day. It is assumed here that doubling the power supply efficiency from 45 to 90 percent would save at 

least 1.5 percent of the total building energy or 3,646 kWh/yr for the average commercial 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 hours. 

Measure Applicability 

This measure is technically applicable in 100 percent of the commercial sector, but it is assumed that only 10 

percent of the commercial sector will have the networks large enough and staff conversant enough to execute the 

measure. 

Incremental Cost 

The incremental cost for this technology will be very diverse. Based on NWPCC estimates, the premium upgrade 

costs about $0.115/kWh/yr. For the average building considered here, that cost would be $559/site. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Average Annual Expected Savings 

Approximately 12 percent of commercial energy is for electronics and computers. It is assumed here that, at an 

applicable site, 2 percent of energy can be saved by efficient network power 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 configuration. 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. Lighting accounts for 35 percent of commercial 

energy, and lighting also accounts for significant cooling energy that is saved when lighting is more efficient. 

There are literally hundreds of combinations of more efficient lighting elements 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 fact, the 2006 energy 

legislation offers preferred tax treatment to lighting configurations that can reduce lighting energy by 30 percent. 

Measure Applicability 

This measure is applicable in 100 percent of the new commercial buildings and in 85 percent of the existing 

commercial sector. 

Incremental Cost 

The incremental cost for this technology is essentially the cost of the efficient lighting components. These costs 

will be will be very diverse and site specific. Based on NWPCC estimates, and averaging the full range of 

conditions, efficient lighting costs about $0.26/kWh/yr. For the average building 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 here, 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 measure is designed to replace these typical exit signs 

with an Energy Star Light Emitting Diode (LED) Exit Sign which is more efficient than the incandescent versions. 

Measure Applicability 

In principal, this measure is applicable in the entire commercial sector, and there are no physical constraints to 

replacing existing exit signs, but to account for already installed LED 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 incandescent exit sign is $45. For the average 

building considered in this analysis, 6 exit signs are assumed, for a full site cost of $270. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 savings 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 Lights64 (CE-20) 

LED traffic lights save energy because LED light sources are a much more efficient and long-lived light source 

than the incandescent bulbs they replace. They save energy but they also save in terms of bulb replacement costs. 

LED traffic lights have a variety of configurations. Each color (red, 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 or 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 intersections 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 favorably with the $1,850 cost derived 

from NWPCC data. These incremental costs do not assume an installation cost. 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 replaced 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 years. 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 adjacent to day lit spaces. Some cooling 

energy savings are also possible because well controlled day lighting contributes 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 suitable 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 NWPCC estimates, perimeter daylighting 

costs about $0.85/kWh/yr. For the average building considered here that cost would be $6,195/site. 

 

63 C&RD Database 

64 All values for LED Traffic Lights are available in the C&RD Database. 
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Average Annual Expected Savings 

It is assumed here that a full application of perimeter daylighting can save about 3 percent of the total building 

energy. In the average building considered here this measure can save 7,293 kWh/yr. 

Expected Useful Life 

This measure is essentially a built-in measure and is assumed to have a useful 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 swivel 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 2.75 to 3.75 gpm with frequent 

individual cases showing 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 standard 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 are more prone to clogging, and can lead to 

unintentional increases in flow rate in low pressure situations such as well water systems or older systems with 

occluded piping. Customer acceptability is an important component in a showerhead program. Customers will 

remove new low flow showerheads if the quality of the showering experience declines with the new showerhead. 

Therefore it is important to research and test the showerhead chosen for the 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 showering; such as, schools, hospitality, health clubs, 

etc. The best application will be a site where the water is heated electrically. 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 the installation of 15-40 showerheads by 

appropriately licensed professionals. Because the cost of the showerhead varies significantly and quality is so 

important for this program, it is essential to test, choose, and pay for a high quality showerhead. This measure is so 

cost effective that even with a more expensive showerhead the program will 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 the daily number of showers taken. For this 

study the showering load is assumed similar to a residential one and the overall savings are taken as 6,000 kWh/yr, 

representing the savings from 15-40 showerheads. The flow of the showerhead used has a significant impact on 

savings. Programs should be 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 climate is 

different and the inlet water temperature is lower so the savings in this DEO program will be greater. 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, 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 with “take back” in the event 

that the new showering experience is longer than the original. Actual savings observed in the comprehensive cases 

include these take back effects, and are in the range of 650 to 950 kWh/yr. The 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 lifetime of the equipment is the length of time 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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until the equipment is replaced in the course of renovation. For these purposes, lifetime is taken as 10 years.65 

Normally showerheads will last longer but with renovations and changes in ownership 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 than 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 residential scale in usage and often these smaller 

applications will be electrically heated. These are the candidate applications for this measure. In the case of 

electrically heated water, the annual water heating energy is about 4,800 kWh/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 favors the more moderately sized 

systems that can fully 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 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 applicable to large commercial buildings with reasonably low hot water use, and the system is sized 

as if it were residential. This measure is taken as applicable to 25 percent of the commercial sector. 

Incremental Cost 

The installation of a solar water heating system involves a mix of building skills including plumbing, electrical, 

roofing and general carpentry. In the general market, a turn-key installation 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, principally solar insulation, air temperature, 

incoming water temperature, and hot water usage rate. Considering these dependencies for the DEO service area, 

leads to average annual savings for a system sized and designed to be in 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 lifetime in excess of 25 years, even though 

the system will take some intermediate maintenance such as inspecting 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 than 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 residential scale in usage, and often these smaller 

applications will be electrically heated. These are the candidate applications for this measure. In the case of 

electrically heated water, the annual water heating energy is about 4,800 kWh/yr. The heat pump water heater is 

essentially 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 tank 

and associated pumps and controls. 

Measure Applicability 

This measure is applicable to large commercial buildings with reasonably low hot water use, and the system is sized 

as if it were residential. This measure is taken as applicable 25 percent of the commercial sector. 

 

65 DEER Database, 2005 
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Incremental Cost 

The incremental cost of this measure consists of the cost of the heat 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 special 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 perform 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 appliance, 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 efficiently; they are 60 percent more efficient than 

standard models. These models have better insulation, and may have magnetic door gaskets, auto-door closers, or 

Dutch doors. 

Measure Applicability 

This measure is applicable in portions of the restaurant hospitality and education 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 suitable site or 4,100 kWh/yr66 in terms of the average 

building considered here. The DEER Database confirms this value with a value 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 saves water and cooling energy. 

Measure Applicability 

This measure is applicable in portions of the restaurant hospitality and education 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 would 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/index.cfm?c=hfhc.pr_hfhc 
Ohio Market Potential Study for Demand Side Management 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 slightly more conservative value of 12 

years. 

Pre-Rinse Spray Wash (CE-27) 

This measure applies to the commercial sector and provides a low pressure nozzle for pre-washing dishes. Using a 

low pressure nozzle saves water and heating energy in commercial kitchen settings. 

Measure Applicability 

This measure is applicable in portions of the restaurant hospitality and 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 suitable 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 professional to identify the potential for 

efficiency in a commercial kitchen. Savings proceed from small things such as leaky faucets and unnecessary 

equipment operation to larger things such as major process changes. Since kitchen equipment is energy intensive 

the audit includes identification of cost effective equipment changes. 

Measure Applicability 

This measure is applicable to commercial kitchens in the restaurant, hospitality, and education sectors. 

Incremental Cost 

The incremental cost for this measure is limited to the cost of the audit only. The cost of any major equipment 

changes is associated with other measures. The cost for the audit is assumed to be $1,794, $.0738/kWh/yr. 

Average Annual Expected Savings 

It is assumed here this measure can reduce the energy use in an applicable 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 to be 5 years. 

Grocery Refrigeration Tune-Up and Improvement (CE-29) 

This measure consists of cleaning heat exchangers and assuring proper airflow 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 restaurants. The applicability is estimated 

here to be 4 percent of the commercial sector. 
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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 that can lower the refrigeration load. These include 

high quality insulated glass doors on the refrigeration case or other transparent 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 heaters are commonly on all the time when 

they are only needed during high humidity episodes with humidity greater than 55 percent. 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 inefficient fan blade. In a typical medium-sized 

refrigeration case the existing fans may use about 70 watts, with the efficient 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 restaurants. 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 suitable 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 during low 

use times while maintaining product quality. It cycles the machine to maintain 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. 
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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 illuminated 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 metal halide lighting applications. At the 

present the color of “white” LED light is somewhat blue tinted and not always suitable for general interior 

applications. But this color is often suitable for outdoor applications and it is probable that LED lighting will find 

its place in many outdoor 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. 

Measure Applicability 

This measure is still evolving but will likely be applicable to a large percentage of the commercial sector. 

Incremental Cost 

The incremental cost for an outdoor LED light of this type is taken here to 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 watt 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 Commission. 

C&RD: Northwest Power and Conservation Council’s Conservation Resource Comments Database, which is 

continually updated as new information becomes available. 

 

67 DEER database, 2005 

68 DEER database, 2005 
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APPENDIX E. RESIDENTIAL GAS EEM DOCUMENTATION 

The purpose of this appendix is to provide documentation of the assumptions used to screen 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 team with technologies in the field and actual 

DSM program evaluations. While not all of the field and DSM program experience can be cited in published 

works, published references are used to establish a reasonable range of assumptions. The point estimate used 

within that range is based on our professional opinion. The mapping of EEM to residential 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 0.24 

House Sealing using Blower Door RG-26 0.019 0.32 

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 0.9 
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Solar Water Heaters (RG-1) 

Water heating is one of the largest energy uses in the home. In the case of gas-heated water, the annual water 

heating energy is about 250 therms/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 favors the more moderately sized systems that can fully 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 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-heated hot water. 

Incremental Cost 

The installation of a solar water heating system involves a mix of building skills including plumbing, electrical, 

roofing and general carpentry. In the general market, a turn-key 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 $6,000. 

Average Annual Expected Savings 

The savings from solar water heaters depend on site specifics, principally solar insulation, air temperature, 

incoming water temperature, and hot water usage rate. Considering these dependencies for the service area, leads 

to average annual savings for a system sized and designed to be in the cost effective 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 inspecting 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 efficient 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 savings according to our modeling. 

Expected Useful Life 

The life of the savings for this measure depends on the quality of the materials 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 more efficient clothes washer than a 

standard clothes washer. This measure has significant water and detergent savings in addition to the water heater 

and dryer savings. 
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Measure Applicability 

This measure applies to customers who do not currently have a high efficiency clothes washer. 

Incremental Cost 

The incremental cost for clothes washers vary significantly depending on the 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 wide variety of costs for 

Energy Star clothes washers, $500 is a good mid-range value for the purposes of this analysis. 

Average Annual Expected Savings 

The kWh savings from a clothes washer depend to a significant extent on the source 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 therms/yr because 

the program will be limited to customers with gas water heat and gas dryers. 

Expected Useful Life 

The expected useful life used in the analysis is 15 years; however, both DEER and C&RD list 14 years. 

Efficient Gas Clothes Dryer (RG-4) 

This measure applies to residential gas clothes dryers. The more efficient gas clothes dryers 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 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 spark or other ignition of burners and oven 

thereby saving the gas used in the pilot light. This is a common feature of 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 materials used. An expected useful life of 18 

years is being used. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Tank/Pipe Wrap and Water 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-installed 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 installation 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 estimated that the savings would be about 2 

therms/yr.69 

Expected Useful Life 

The lifetime of these measures is potentially quite long. For practical purposes the lifetime will be considered 

limited by the expected remaining lifetime of the hot water tank, 6 years.70

Low Flow Fixtures (RG-7) 

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 lavatory faucets. The current US standard for 

showerheads is 2.5 gpm. Measurements of the existing shower flows in building stock show a range of 2.75 gpm 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 standard 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 cautious about the use of “pressure compensating” showerheads. These are more prone to 

clogging and can lead to unintentional increases in flow rate in low pressure situations such as well water systems 

or older systems with occluded piping. Customer acceptability is an important component in a showerhead 

program. Customers will remove new low flow showerheads if the quality of the showering experience declines 

with the new showerhead. Therefore it is important to research and test the showerhead chosen for the 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 customers in the residential and small commercial sectors that heat water with gas. 

Incremental Cost 

Low flow fixture costs vary widely, and depend on whether the fixtures are purchased 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 acceptability 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 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. This 

measure is so cost effective that even with a more expensive showerhead the program will still remain cost 

 

69 Khawaja S. PhD and Reichmuth, H. PE., 1997. Impact Evaluation of PacifiCorp’s Ebcons Multifamily Program. Pacificorp. 

70 DEER says 15 years for pipe insulation, 9 years for faucet aerators, and 15 years for an efficient water 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 Management Programs Final Report February 9, 2009 

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effective and a quality showerhead will ensure measure persistence. The 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 significant 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 climate is different and the inlet water 

temperature is lower so the savings in this application will be greater. 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, 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 with “takeback” in the event that the new 

showering experience is longer than the original. Actual savings observed in 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 lifetime 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.72 

Normally showerheads will last longer but with renovations and changes in ownership 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 case of gas-heated water, the annual water 

heating energy is about 250 therms/yr. This measure saves energy by eliminating 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 residential situations, but it may have difficulty 

supporting multiple simultaneous showers. 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 switch from an 

electric tank to an electric tankless heater, this measure makes no sense. 

Measure Applicability 

This measure is applicable in the residential sector only where space is a premium. 

Incremental Cost 

The incremental installed cost for this measure is $1,100 for a discretionary 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 electronic 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 per unit and $37.946 installed cost. 

72 DEER Database, 2005 
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1985 appliance efficiency standards. The next level of efficiency improvement takes the efficiency AFUE to 92% 

by condensing water vapor in the burner exhaust gas and reclaiming the otherwise vented energy. These eight 

measures all similarly refer to the replacement of a less efficient 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 is technically zero because that 

efficiency is the current code standard. But Measures RG-10 and RG-11 refer 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 code heater with an incremental cost of $750. 

Measures RG-14 through RG-17 refer to the use of the higher efficiency unit instead 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- savings=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- savings=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- savings=27 therms/yr 

Expected Useful Life 

A useful life of 25 years is used in this analysis for Measures RG-12 through RG-17 and 5 years for Measures RG10 and RG-11. 

Programmable Thermostats (RG-18) 

Programmable thermostats save energy by lowering the average daily temperature 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 hazard 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 selected 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-standard 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 Energy 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 the off-the-shelf cost of 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 installations that do not have a programmable thermostat. 

Incremental Cost 

Programmable thermostats cost retail in the range of $50-$100. A utility program 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 installation 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 thermostat. 

Average Annual Expected Savings 

Thermostat savings are best realized when the set back interval is of the 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 hours. 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 the 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-heated 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/off 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 design 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 our modeling. 

Expected Useful Life 

The life of the savings for this measure depends on the quality of the materials 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 combustion 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. This analysis uses $50 for 

the labor cost which accounts for some of the difference in the costs. 

75 DEER list the EUL as 12 years. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 furnace 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 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 hazard and should be eliminated in all cases. 

The remedy is usually an adjustment of the primary air to the burner or cleaning the burner. But in some cases the 

toxic carbon monoxide could find its way from the exhaust stream into the supply air through a cracked heat 

exchanger. A faulty heat exchanger is an immediate hazard and needs to be replaced 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. This cost does not include the cost of 

a new heat exchanger when one is indicated. The cost of the energy savings is attributed 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 cases, of the order of 250 therms/yr. 

But for this study we will take 117 therms/yr annual savings for this treatment. 

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-heated residences, the electric savings are 

for cooling only and are much less than the heating savings. So the cost effective application of this measure is to 

electric-heated residences only. 

Measure Applicability 

This measure is considered applicable to a portion of residential customers 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 here with 100 square feet of window 

upgraded, the cost would be $2,500. 
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Average Annual Expected Savings 

Savings from this measure are strongly dependent on the efficiency of the gas heat source and the square feet of 

windows replaced. Building simulations from DEO specific data show savings 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 level. This measure saves both heating and 

cooling energy. In the case of gas-heated residences, the electric savings are for cooling only and are much less 

than the heating savings. So the cost effective application of this measure is to gas-heated residences only. 

Measure Applicability 

This measure is considered applicable to all residences heated with 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 considered: 

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%. Annual 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 sealed 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 comparison, 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 our modeling. In addition there will be 

127 kWh/yr in cooling electric savings. 
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Expected Useful Life 

The life of the savings for this measure depends on the quality of the materials used especially for the gaskets for 

the windows and doors. An expected useful life of 13 years is being used. DEER lists 13 years 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 properly charged. It is common in residential 

cooling or heat pump systems to have an incorrect amount of refrigerant charge because these 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 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 trained 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 central 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 measure saves both heating and cooling energy. In 

the case of gas-heated residences, 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 residential customers that heat with gas. 

Incremental Cost 

This measure contemplates adding wall insulation to a 2x4 stud wall where there 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 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 the overall cost of $1.32. Our cost estimate is considered to apply to three 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 source. 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 years. 
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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 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 all fuel savings proceed principally from heating, cooling, lighting and 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 showed that the maximum cost effective cost is 

$3,000. This requires composing a package of only the most cost effective measures. Therefore this package 

includes the strongly cost effective measures of flow efficient showerheads and inspection of duct work that are not 

commonly part of the Energy Star package (but should be). Based on the choice of the most cost effective 

measures, the cost used for this study is $3,000. This measure includes electric efficiency measures and will have 

both gas and electric savings. 

Average Annual Expected Savings 

The savings from this measure are specifically site modeled, estimates 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 capture 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 construction starts. 

It is well known that if a new residence is tightly designed thermally, and oriented so that about 75-100 feet of 

glazing is near south facing, then its heating requirements can be reduced by about 30 percent. Much larger heating 

reductions have been demonstrated, but then the designs need to become more extreme with respect to south glass 

and with respect to protection from unwanted summer sun. This measure is intended to represent a “minimum 

graceful design”, yielding the maximum savings with the least departure from 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 glazing should usually 

have a high solar heat gain factor. This is an unusual glazing specification 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, adjacent 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 exceptions where thermal design has been 

explicitly considered and documented. 

Measure Applicability 

This measure is applicable to new and rebuilt gas-heated construction with suitable solar exposure. 

Incremental Cost 

This measure is considered a minimum passive design, and it essentially 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 
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advice necessary to “tune the design to the sun”. The cost for this measure is taken here as $500 per building. Not 

very much needs to be done to capture these minimal passive solar heating savings, especially if it is done at the 

outset. The context for this incremental cost is assumed to be to a developer for some extra consideration in overall 

site planning. 

In many reported cases of solar design, the cost is many times this and the building is usually much more expensive 

as well, but these costs are the common costs associated with personalized 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 years or more. For this analysis, the measure 

life is taken as 50 years. 
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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 screen 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 team with technologies in the field and actual 

DSM program evaluations. While not all of the field and DSM program experience can be cited in published 

works, published references are used to establish a reasonable range of assumptions. 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 0.050 
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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 applications of solar water heat in the 

commercial context will be associated with high hot water use, and sites 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 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 favors the more moderately sized systems that can fully 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 with gas-heated hot water. 

Incremental Cost 

The installation of a solar water heating system involves a mix of building skills including plumbing, electrical, 

roofing and general carpentry. In the general market, a turn key residential 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 oversized system. 

Average Annual Expected Savings 

The savings from solar water heaters depend on site specifics, principally solar insulation, air temperature, 

incoming water temperature, and hot water usage rate. Considering these dependencies for the DEO service area, 

leads to average annual savings for a system sized and designed to be in 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 inspecting 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 (gpm) at 80 pounds/square inch (psi) and 

a swivel aerator for the kitchen faucet and fixed aerators for the lavatory faucets. The current US standard for 

showerheads is 2.5 gpm. Measurements of the existing shower flows in building stock show a range of 2.75 gpm 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 standard 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 cautious about the use of “pressure compensating” showerheads. These are more prone to 

clogging and can lead to unintentional increases in flow rate in low pressure situations such as well water systems 

or older systems with occluded piping. Customer acceptability is an important component in a showerhead 

program. Customers will remove new low flow showerheads if the quality of the showering experience declines 

with the new showerhead. Therefore it is important to research and test the showerhead chosen for the program 

carefully. 

Measure Applicability 

This measure is applicable to commercial customers with significant hot water heating loads due to extensive 

showering activity; such as, schools, hotels, health clubs, etc. 
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Incremental Cost 

Low flow fixture costs vary widely, and depend on whether the fixtures are purchased retail or in bulk. The costs 

for a bulk purchase for a high quality low flow showerhead are about $10/unit, and the installation labor is taken as 

$15/unit. The most important feature of these fixtures is the long term acceptability 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 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. The 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 lifetime 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 ownership a 10 year expected useful 

life is a good planning number. 

EE Water Heater (CG-3) 

This measure applies commercial installations with significant gas water heating. The more efficient gas water 

heater, essentially a 90% efficient boiler, will have thicker tank insulation and a more efficient burner system. 

Measure Applicability 

This measure is applicable to commercial stock with high hot water heating 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 savings. 

Expected Useful Life 

The life of the savings for this measure depends on the quality of the materials 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 that this is a slightly more efficient 

energy star rated commercial appliance that is heavily used. It involves heavier insulation and spark or other 

ignition of burners and oven thereby saving the gas used in the pilot light. This is 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, 2005 
Ohio Market Potential Study for Demand Side Management 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 materials 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 proceed from the fact that this is a slightly more 

efficient Energy Star rated commercial appliance that is heavily 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 materials 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 efficient 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. The process in a commercial kitchen is 

usually frenzied, and details such as unnecessary appliances turned on, leaky faucets, and jury rigged controls are of 

much lower priority than the kitchen operations. A walk-through audit by a competent 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.
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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 cooling 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-heated residences, the electric savings are 

for cooling only and are much less than the heating savings. So the cost effective application of this measure is to 

electric-heated sites only. 

Measure Applicability 

This measure is considered applicable to most residential and commercial customers that have single-pane glass 

windows. 

Incremental Cost 

We assume a total cost of $25/square foot of window area. DEER uses a value of $28/square foot of window area, 

and C&RD uses a value of $16/square foot. For new construction we assume an incremental cost of 30 percent of 

total cost. For the average site considered here, we assume replacement 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 source and the square feet of windows 

replaced. Simulations from DEO specific data show savings of 400 therms/yr for 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. 
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Ceiling Insulation (CG-11, CG-12, CG-13) 

This measure involves increasing ceiling insulation from R6 to the R30 level. 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 buildings 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 of providing for adequate attic 

venting. For this analysis three levels of insulation and costs are considered: 

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%. Annual 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 are identified and sealed with appropriate 

materials to decrease heat loss from the building envelope. This is essentially a procedure used widely on 

residences; in this commercial application, the sites are residential scale, as are most small commercial sites. 

Measure Applicability 

This measure is applicable to most of the gas-heated small commercial stock. 

Incremental Cost 

The incremental cost of sending a technician to a site and performing a Blower Door test and sealing the identified 

leaks is assumed here to be $300 per 1,000 square foot site. By comparison, the C&RD database lists $0.16 per 0.1 

air change per square foot. For this commercial application we will take $500 as the average cost. 

Average Annual Expected Savings 

A gas-heated commercial space will achieve 69 therms/yr annual savings 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 materials used especially for the gaskets for 

the windows and doors. An expected useful life of 13 years is being used. DEER lists 13 years and C&RD lists 20. 
Ohio Market Potential Study for Demand Side Management 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 properly charged. It is common in cooling or heat 

pump systems to have an incorrect amount of refrigerant charge because these 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 with gas. Notably even new installations can 

benefit from this measure. This measure is intended to apply to the significant 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 trained 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 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 a portion of the non-residential customers that heat with gas. 

Incremental Cost 

This measure contemplates adding wall insulation to a 2x4 stud wall where there 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 foot 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 the overall cost of $1.32. Our 

estimate is for 2,500 square feet of wall, and applies to three levels of insulation: 

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 source. 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 Management Programs Final Report February 9, 2009 

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EE Boiler (CG-19) 

This measure applies to commercial gas water heating. The more efficient gas boiler will have thicker tank 

insulation and a significantly more efficient burner system, leading to 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 heater. 

Average Annual Expected Savings 

A more efficient water heater will achieve 2,400 therms/yr annual savings according to our modeling. 

Expected Useful Life 

The life of the savings for this measure depends on the quality of the materials 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-heated 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/off 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 design 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 savings. 

Expected Useful Life 

The life of the savings for this measure depends on the quality of the materials 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) check and combustion air, the controls 

including the fan delay, and air leaks where the ducts mate with the furnace. 

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 furnace tune-up is taken here to be 

$300/site. In a best case this cost can be spread over several package rooftop units which are often serving each 

commercial space. But for this analysis we assume the conservative case 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. 
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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 hazard and should be eliminated in all cases. 

The remedy is usually an adjustment of the primary air to the burner or cleaning the burner. But in some cases the 

toxic carbon monoxide could find its way from the exhaust stream into the supply air through a cracked heat 

exchanger. A faulty heat exchanger is an immediate hazard and needs to be replaced 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 attributed 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 cases, of the order of several hundred 

therms/yr. But for this study we will take 357 therms/yr annual savings 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 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 all fuel savings proceed principally from heating, cooling, lighting and water heating savings. In the 

commercial context the Energy Star new building has the better Energy Star insulation and glazing details. 

Measure Applicability 

This measure is applicable to all new gas-heated small commercial 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 measure 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 space heater, and replacing with a 

modern high efficiency 92% AFUE furnace. The second level of improvement (CG-24) involves replacing an 82% 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 refers to exercising and validating the 

controls. Newer building controls often employ demand control ventilation to limit non-occupied ventilation 

during non-occupied heating. These more sophisticated controls use carbon dioxide sensors and control linkages 

that require a careful on site check out. The commissioning process also includes 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. Retro-Commissioning starts with an analytical 

review of past billing information, and follows any indications of excess energy use with site inspection and 

remedy. 

Measure Applicability 

This measure is applicable to most of the small- and medium-sized commercial stock. 

Incremental Cost 

The incremental cost of sending a technician to a site and performing a furnace 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 therms/yr. 
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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 heating. 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 have 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 reheat. Therefore, an inspection of gas heating 

controls will usually involve a review of the overall control system including 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 stock. 

Incremental Cost 

The incremental cost of sending a technician to a site and performing a comprehensive 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 therms/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 temperature 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 hazard 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 selected 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-standard 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 Energy 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 the 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 installations that do not have a programmable thermostat. 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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Incremental Cost 

Programmable thermostats cost retail in the range of $50-$100. A utility program 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 installation 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 used, leading to a 

site cost of $240. 

Average Annual Expected Savings 

For this estimate a five degree thermostat set back is assumed, leading 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 the 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. This analysis uses $50 for 

the labor cost which accounts for some of the difference in the costs. 

79 DEER list the EUL as 12 years. 
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APPENDIX G. SEGMENTATION AND CIS SAMPLING PLAN 

In order to accurately understand the nature of loads and DSM opportunities, we start by disaggregating Duke 

Energy customers into smaller groups of customers. These customer segments 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 area. 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 rates: 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 for apartment numbers (Address 

Line2-Address Line 4). 

ii. Multi Family: Customers with populated values (excluding “Barn/Lot”) in address 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 construction 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 business data extract). 

a. Customers with exceptionally small loads were assigned the small loads 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 based 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 Existing 

 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 Management Programs Final Report February 9, 2009 

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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 rather than information from CIS. Real estate 

data provide better coverage in single family than multi family. Hence, multi 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 less than 3,000 kWh of annual usage, 

typical of an electric utility of this size. These are most likely 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 existing). 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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APPENDIX H. END-USE/APPLIANCE USAGE TABLES 

This appendix provides tables showing the electric and/or gas usage for various 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 11,033.5 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 6.3 
Ohio Market Potential Study for Demand Side Management 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 6.3 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 206 

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 6.3 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 207 

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 5.4 
Ohio Market Potential Study for Demand Side Management 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 5.4 
Ohio Market Potential Study for Demand Side Management 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 5.4 
Ohio Market Potential Study for Demand Side Management 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 3.6 
Ohio Market Potential Study for Demand Side Management 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 3.6 
Ohio Market Potential Study for Demand Side Management 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 3.6 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 213 

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 11,379.7 

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 1.6 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 214 

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 1.6 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

Page 215 

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 1.6 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 1.1 
Ohio Market Potential Study for Demand Side Management Programs Final Report February 9, 2009 

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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 1.1 
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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 1.1 
Ohio Market Potential Study for Demand Side Management 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 Report 

Page 220 

C&I Peak 

Reduction

Res Peak 

Reduction

Renewables & 

Demonstration C&I Incentives C&I Rebates

C&I Retro 

Comm. Lite

C&I HVAC 

Optimization C&I Audit

C&I New 

Construction

Res Whole 

House Res Rebates

Res 

Appliance 

Recycle

Res New 

Construct

Total Program Budget:

Year 1 178,845 2,124,313 166,650 266,550 7,211,570 853,500 275,000 120,880 167,650 469,249 344,783 1,305,835 98Year 2 3,274,950 229,190 141,650 429,100 11,897,450 1,483,000 392,930 106,180 170,850 710,307 705,160 1,526,470 134

 

Year 3 4,558,700 381,463 171,650 429,100 14,361,140 2,162,500 636,430 217,560 281,900 1,046,366 1,000,349 1,877,270 235

 

Year 4 542,558 5,902,163 141,650 621,650 16,679,830 2,842,000 734,360 182,860 222,250 1,105,556 1,200,632 2,035,570 185Year 5 7,348,738 756,153 171,650 621,650 16,752,330 3,521,500 977,860 294,240 423,250 1,329,835 1,468,321 2,358,705 235

 

Five year total 2,088,208 23,208,863 793,250 2,368,050 66,902,320 10,862,500 3,016,580 921,720 1,265,900 4,661,313 4,719,245 9,103,850 888

TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE 

Cumulative kWh Savings

Year 1 - - 17,440 865,500 35,248,383 6,901,908 3,370,200 577,584 439,758 2,158,735 5,896,434 8,738,850 42

 

Year 2 - - 34,880 2,596,500 93,995,688 20,705,724 10,099,366 1,716,708 977,240 5,756,950 19,654,780 19,224,550 127

 

Year 3 - - 52,320 4,327,500 164,492,454 41,411,448 20,198,732 3,433,416 1,661,308 10,794,645 37,344,082 31,458,250 254

 

Year 4 - - 69,760 6,924,000 246,738,681 69,019,080 33,657,064 5,711,664 2,394,238 16,551,595 60,929,818 45,439,950 382

 

Year 5 - - 87,200 9,520,500 328,984,908 103,528,620 50,485,596 8,567,496 3,615,788 23,028,285 88,446,510 61,168,500 509

 

Cumulative kW Savings

Year 1 5,927 1,163 7 104 6,864 1,523 750 164 83 449 1,121 1,417 

 

Year 2 14,818 3,489 13 311 18,303 4,568 2,247 488 185 1,198 3,737 3,117 

 

Year 3 6,969 26,671 20 518 32,030 9,135 4,494 976 314 2,246 7,101 5,100 Year 4 41,489 11,612 26 828 48,045 15,225 7,489 1,624 453 3,444 11,586 7,367 

 

Year 5 59,269 17,417 33 1,139 64,060 22,838 11,233 2,436 684 4,791 16,818 9,917 

 

Cumulative MCF Savings

Year 1 - - 5 1,458 (30,574) 28,615 13,878 672 718 8,294 (3,935) - Year 2 - - 10 4,373 (81,531) 85,845 41,586 1,997 1,596 22,119 (13,117) - 2

 

Year 3 - - 15 7,289 (142,680) 171,691 83,173 3,993 2,714 41,474 (24,923) - 5

 

Year 4 - - 20 11,662 (214,019) 286,152 138,590 6,643 3,911 63,592 (40,664) - 7Year 5 - - 25 16,035 (285,359) 429,227 207,886 9,964 5,907 88,476 (59,028) - 10

 

Annual Summary

* Includes all program-specific costs but excludes "umbrella" DSM costs not identified with specific programs.