Report on Electronic Ballast DSM Rebate Research

Lawrence Berkeley National Laboratory April 10, 1998

Abstract

### In May of 1997, LBNL began to collect data for a study of the impact of DemandSide Management (DSM) programs on the market for electronic fluorescent ballasts. This investigation into the historical trends in DSM rebates for electronic ballasts was undertaken to inform predictions about the future developments in the fluorescent ballast market. The most significant finding of this study is the substantial decrease in the number of DSM rebates for electronic ballasts. It is possible that fewer DSM rebates for electronic ballasts has contributed to the slowed growth since 1995 in the market share garnered by electronic ballasts. Two sample data sets, referred to as the core and expanded samples, were collected for this study. The core data set includes six utilities. The total energy efficiency spending of these six utilities represents about 15% to 20% of national spending on energy efficiency programs, a large component of DSM spending that includes all rebate programs. The expanded sample data set adds three utilities to the core; some estimation was required to fill in the less than absolutely complete information these three additional utilities provided. Total energy efficiency expenditures for utilities in the expanded sample account for roughly 25% to 35% of national expenditures. It is not known whether or not the sample is representative of the nation as a whole. In order to estimate DSM rebates for electronic ballasts, we first calculated the fraction of energy efficiency spending devoted to electronic ballast rebates and the average value of the rebate per ballast for the sample data. Next, we assumed that in each year the average rebate value and fraction of EE spending going to ballast rebates was the same for the nation as in our sample. For each year, nationally-aggregated energy efficiency spending was multiplied by the fraction of EE spending going to ballast rebates in our sample to estimate national spending on ballast rebates. Then, we divided this estimate of spending on ballast rebates by the average rebate per ballast to estimate the number of ballasts rebated for the year. The assumptions used in our estimation technique as well as concerns about the size of our sample data sets and whether or not they are representative are discussed in the last section of this report which covers uncertainty.

I 

### Report on Electronic BallastDSM 

### Rebate Research Lawrence Berkeley National Laboratory April 10, 1998

Abstract
In May of 1997, LBNL began to collect data for a study ofthe impact ofDemandSide Management (DSM) programs on the market for electronic fluorescent ballasts. This investigation into thehistorical trends in DSMrebates for electronic ballasts was undertaken to inform predictions about the future developments inthe fluorescent ballast market. The most significant finding ofthis study is the substantial decrease in the number ofDSM rebates for electronic ballasts. Itis possible that fewer DSM rebates for electronic ballasts has contributed to the slowed growth since 1995 in the market share garnered by electronic ballasts.
Two sample data sets, referred to as the core and expanded samples, were collected for this study. The core data setincludes six utilities. The total energy efficiency spending ofthese six utilities represents about 15%to 20% ofnational spending on energy efficiency programs, a large component ofDSM spending that includes all rebate programs. The expanded sample data set adds three utilities to the core; some estimation was required to fill in the less than absolutely complete information these three additional utilities provided. Total energy efficiency expenditures for utilities inthe expanded sample account for roughly 25% to 35% ofnational expenditures. Itis not known whether ornot the sample is representative ofthe nation as a whole.
In order to estimate DSMrebates for electronic ballasts, we first calculated the fraction ofenergy efficiency spending devoted to electronic ballast rebates and the average value ofthe rebate perballast forthe sample data Next, we assumed that in each year the average rebate value and fraction ofEE spending going to ballast rebates was the same for the nation as in our sample. For each year, nationally-aggregated energy efficiency spending was multiplied by the fraction ofEE spending going to ballast rebates in our sampleto estimate national spending on ballast rebates. Then, we divided this estimate of spending on ballast rebates by the average rebate per ballast to estimate the number of ballasts rebated for theyear. The assumptions used 

### in our estimation technique as well as concerns about the size ofour sample data sets and whether ornotthey are representative are discussed inthe last section ofthis report which covers uncertainty.

### Analysis of the core and expanded samples using this approach led to the following

two national estimates of the number of electronic ballast DSM rebates:
Core Sample Date[ Set Estimates (full table appears on p4;e 7) Year 1992 1993 1994 1995 1996 1997 Estimated number of 4.58 10.8 19.4 16.1 10.5 6.34 rebates nationwide millions
Ex panded Sam

ple Data Set Estimat

es (full table appe Year 1992 1993 1994 1995 1996 1997 Estimated number of 7.02 9.36 12.8 14.4 7.10 Not rebates nationwide Available* millions None of the three utilities added to the core data set were able to provide information on 1997. Results of analysis of the core sample data set suggest that electronic ballast rebates peaked in 1994 in terms of the number of ballasts rebated and utility spending on rebates. Estimates of the number of rebates decline slightly in 1995 and substantially in the last two years. Analysis of the expanded sample data set suggests the same general trend in DSM rebates. The expanded data set indicates rebates peaked in 1995 rather than 1994. However, as is the case with the core sample, the analysis points to a sharp drop from 1995 to 1996. Although uncertainty certainly exists with respect to the DSM rebate estimates for any given year, we are confident in the veracity of the general trend identified by this analysis: DSM rebates for electronic ballasts increased in number up until recent years when they began to decline in number. All of the sample data collected shows utilities reducing spending on or eliminating their DSM rebates for electronic ballasts recently. Thus, the sample data parallels the general national trend of declining electric utility spending on DSM programs. 

### This study.attempts to shed some light on the impact of DSM rebates for electronic ballasts on the ballast market by comparing trends in DSM rebates and the market share garnered by electronic ballasts

. No direct one-to-one relationship between DSM trends and electronic ballast penetration is found

. However, it does seem possible that the declining strength of DSM rebates has contributed to the apparent levelling off or slowed increase in the electronic ballast's penetration of the market. The rate of growth for electronic ballasts in terms of market share has fallen since 1995 when this study indicates that DSM rebates for electronic ballasts began to decline substantially. ars on page 8)

2 Analysis ofthe core and expanded samples using this approach led to the following two national estimates ofthe number ofelectronic ballast DSM rebates: 

# c S l D 

### S. E .



### ore amp4e ata et stlmates (full table appears onpage 7) Year 1992 1993 1994 1995 1996 1997 Estimated number of 4.58 10.8 19.4 16.1 10.5 6.34 rebates nationwide Irmillions)
E d dS 

### IDS. E .

xpan e ampJe ata et stmwtes (full table appears onpage 8) Year 1992 1993 1994 1995 1996 1997 IEstimated number of 7.02 9.36 12.8 14.4 7.10 Not rebates nationwide Available" Irmillions) " 

### .. . None ofthe three utIlItIes added to the core data set were able to provlde informatIon on 1997

. Results ofanalysis ofthe core sample data set suggest that electronic ballast rebates peaked in 1994 in terms ofthe number ofballasts rebated and utility spending on rebates. Estimates of the number ofrebates decline slightly in 1995 and substantially in the last two years. Analysis ofthe expanded sample data set suggests the same general trend in DSM rebates

..The expanded data set indicates rebates peaked in 1995 rather than 1994. However, as is the case with the core sample, the analysis points to a sharp drop from 1995 to 1996. Although uncertainty certainly exists with respect to the DSM rebate estimates for any given year, we are confident in the veracity ofthe general trend identified by this analysis: DSM rebates for electronic ballasts increased innumber up until recent years when they began to decline in number. All ofthe sample data collected shows utilities reducing spending on or eliminating their DSM rebates for electronic ballasts recently. Thus, the sample data parallels the general national trend ofdeclining electric utility spending on DSM programs. This study.attempts to shed some light on the impact ofDSM rebates for electronic ballasts on the ballast market by comparing trends in DSM rebates and the market share garnered by electronic ballasts. No direct one-to-one relationship between DSM trends and electronic ballast penetration is found. However, it does seempossible that the declining strength ofDSM rebates has contributed to the apparent levelling offor slowed increase in the electronic ballast's penetration ofthe market. The rate ofgrowth for electronic ballasts in terms ofmarket share has fallen since 1995 when this study indicates that DSM rebates for electronic ballasts began to decline substantially.

2la Introduction

### In May of 1997, LBNL began to collect data for a study of the impact of DemandSide Management (DSM) programs on the market for electronic fluorescent ballasts. LBNL sought to estimate the number of rebates paid for electronic ballasts annually and the dollar value of these rebates since their widespread emergence in the early 1990's. This investigation into the historical trends in DSM rebates for electronic ballasts was undertaken to inform predictions about future developments in the fluorescent ballast market. The objective was to discern trends over time in DSM rebates and to judge their impact on the market share garnered by electronic ballasts.

2. 

### General Developme nts in DSM and EEPrograms Electric utility DSM programs grew rapidly in the late 1980's and early 1990's due to incentives created by state regulatory programs to encourage integrated resource planning.' Expenditures on DSM programs peaked in 1993, reaching a level of about 1% of electric utility revenue or $2.7 billion for the nation.2 This figure dipped slightly in 1994, and fell to $2.4 billion in 1995 and $1.9 billion in 1996.3 Spending on the Energy Efficiency (EE) component of DSM programs has followed a similar path. 4 EE spending reached a peak in 1993, levelled off, and then declined sharply in 1995 and 1996. In 1995, EE spending fell by 12% from the year before and in 1996 it fell by 26%. Table 1 (page 5) lists national spending on the EE programs from 1992-1997, as well as the percentage of that national total accounted for by the two sample data sets analyzed in this study. The Energy Information Administration (EIA), the DOE's independent statistical and analytical agency, reports that electric utilities are scaling back their DSM programs in anticipation of a competitive market. "In the search for cost savings, utilities are reassessing approaches to energy conservation and peak load reduction

. In many cases, they are opting to discontinue or reduce the emphasis on these programs."' The EIA's, 1996 annual report on DSM found that 1003 utilities out of 3,199 electric utilities in the nation reported having DSM programs in 1996 compared to 1053 in 1995. Of the 50 utilities discontinuing DSM programs in 1996, there were 10 large and 40 small electric utilities.6

' Eto, Joseph, December 1996, "The Past, Present, and Future of U.S. Utility Demand

-Side Management Programs," LBNL-3993 1. 2 DOE-EIA, "US. Electric Utility Demand

-Side Management Programs, 1993," DOE/EIA-0589(93) 3 DOE-EIA, "U.S. Electric Utility Demand

-Side Management Programs, 1994," DOE/EIA-0589(94), DOE-ETA, "U.S. Electric Utility Demand- Side Management Programs, 1995," DOE/EIA-0589(95), DOE-ETA, "U.S. Electric Utility Demand

-Side Management Programs , 1996," DOE/EIA-0589(96) 4 In addition to energy efficiency, the other components of DSM programs are: direct load control, interruptible load, and other load management. s EIA Press Release, January 7, 1998, "Demand- Side Management Programs : Utilities Shift Focus, Reduce Spending." 6 DOE-EIA, "U.S. Electric Utility Demand

-Side Management Programs, 1996," DOE/EIA-0589(96)

3 

### 1. Introduction
In May of 1997, LBNL began to collect data for a study ofthe impact ofDemandSide Management (DSM) programs on the market for electronic fluorescent ballasts. LBNL sought to estimate the number ofrebates paid for electronic ballasts annually and the dollar value ofthese rebates sincetheir widespread emergence in the early 1990's. This investigation into the historical trends in DSMrebates for electronic ballasts was undertaken to informpredictions about future developments in the fluorescent ballast market. The objective was to discern trends overtimein DSM rebates and tojudgetheir impact on the market share garnered by electronic ballasts. 

### 2. GeneralDevelopments in DSMandEEPrograms
Electric utility DSM programs grew rapidly inthe late 1980's and early 1990's due to incentives created by state regulatory programs to encourage integrated resource planning. l Expenditures on DSM programs peaked in 1993, reaching a level ofabout 1 % ofelectric utility revenue or $2.7 billion for the nation.2 This figure dipped slightly in 1994, and fell to $2.4 billion in 1995 and $l.9 billion in 1996. 3 Spending on the Energy Efficiency (EE) component ofDSMprograms has followed a similar path. 4 EE spending reached a peak in 1993, levelled off, and then declined sharply in 1995 and 1996. In 1995, EE spending fell by 12% from the year before and in 1996 it fell by 26%. Table 1 (page 5) lists national spending onthe EE programs from 1992-1997, as well as the percentage ofthat national total accounted for by the two sample data sets analyzed inthis study.
The Energy Information Administration (EIA), the DOE's independent statistical and analytical agency, reports that electric utilities are scaling back their DSM programs in anticipation ofa competitive market. "In the search for cost savings, utilities are reassessing approaches to energy conservation and peakload reduction. In many cases, they are opting to discontinue or reduce the emphasis on these programs." 5 The EIA's' 1996 annual report on DSM found that 1003 utilities oUt of3,199 electric utilities in the nation reported having DSM programs in 1996 compared to 1053 in 1995. Ofthe 50 utilities discontinuing DSM programs in 1996, there were 10 large and 40 small electric utilities.6

1 Eto, Joseph, December 1996, "The Past, Present, and Future ofU.S. Utility Demand-Side Management Programs," LBNL-39931. 2 DOE-EIA, "US. Electric Utility Demand-SideManagementPrograms, 1993," DOEIEIA-0589(93) 3 DOE-EIA, "US. Electric Utility Demand-Side Management Programs, 1994," OOEIEIA-0589(94), DOE-EIA, "U.S. Electric Utility Demand-Side Management Programs, 1995," DOEIEIA-0589(95), OOE-EIA, "US. Electric Utility Demand-Side Management Programs, 1996," DOEIEIA-0589(96) 4 In addition to energy efficiency, the other components ofDSMprograms are: direct load control, interruptible load, and other loadmanagement. 5 EIAPress Release, January 7, 1998, "Demand-Side Management Programs: Utilities ShiftFocus, Reduce Spending." 6 DOE-EIA, "US. Electric Utility Demand-SideManagementPrograms, 1996," OOEIEIA-0589(96)

3

### To date, only a few states (California, Rhode Island and Massachusetts) have

introduced competition in the electricity market

. It seems unlikely that the national declines in EE and DSM spending observed in recent years will reverse as more and more utilities move from anticipating the cost-minimizing and profit-maximizing demands of a competitive market to actually facing competition.
3. Data Collection LBNL sought to collect as much data as possible on electronic ballast rebates from around the nation

. Data requests were made to the 15 utilities with the largest DSM , programs and 32 utilities overall

. Six utilities provided detailed data showing both the number of ballasts installed under rebate measures and the cost of these rebates

. The six utilities that comprise the core sample data set are: Central Maine Power Company (ME), the Long Island Lighting Company (NY), Pacific Gas & Electric (CA), Rochester Gas & Electric (NY), San Diego Gas and Electric (CA) and one which will be referred to as Utility X since the utility requested that its identity remain confidential. The total spending on energy efficiency programs of the six utilities in our core sample data set accounts for about 15% to 20% of national spending on energy efficiency programs. 

### Three large utilities

- Baltimore Gas & Electric (MD), Southern California Edison (CA), and Consolidated Edison (NY) - also provided data that was useful and extensive, but not as complete

. Baltimore Gas & Electric provided annual figures on the number of rebated ballasts installed, but not the dollar value of these rebates

. Southern California Edison provided data on yearly spending on ballasts , but not the corresponding number of rebated ballasts. Consolidated Edison provided data that involved estimation of the number of electronic ballasts rebated under some measures for each year , and later years lacked specific information on the value of each rebate. Using the average rebate value from the core sample data set, it was possible to incorporate the information provided by the three utilities listed above to create an expanded sample data set

. In the case of Southern California Edison, the figures provided on annual expenditures for electronic ballast rebates were divided by the average rebate value from the core sample to estimate the number of ballasts rebated annually (expenditures on electronic ballast rebates = $'s per rebate = total number of electronic ballasts rebated). In the case of Baltimore Gas & Electric, the figures for the annual number of rebates were multiplied by the average rebate value to estimate the utility's annual spending on electronic ballast rebates (number of rebates x $'s per rebate = total spending on electronic ballast rebates ). For the years during which Consolidated Edison provided information on the number of rebates only, the same approach was used as in the case of Baltimore Gas & Electric

. As Table 1 illustrates (next page), the nine utilities included in the expanded data set account for roughly 25% to 35% of national expenditures on energy efficiency programs.

4 To date, only a few states (California, Rhode Island and Massachusetts) have introduced competition in the electricity market. 

### It seems unlikely that the national declines in EE and DSM spending observed in recent years will reverse as more and more utilities move from anticipating the cost-minimizing and profit-maximizing demands ofa competitive market to actually facing competition. 

### 3. Data Collection
LBNL sought to collect as much data as possible on electronic ballast rebates from around the nation. Datarequests were made to the 15 utilities with the largest DSM programs and 32 utilities overall. Six utilities provided detailed data showing both the number ofballasts installed under rebate measures and the cost ofthese rebates. The six utilities that comprise the core sample data set are: Central Maine Power Company (ME), the Long Island Lighting Company (NY), Pacific Gas & Electric (CA), Rochester Gas & Electric (NY), San Diego Gas and Electric (CA) and one which will bereferred to as Utility X since the utility requested that its identity remain confidential. The total spending on energy efficiency programs ofthe six utilities in our core sample data set accounts for about 15% to 20% ofnational spending on energy efficiency programs. Three large utilities- Baltimore Gas & Electric (MD), Southern California Edison (CA), and Consolidated Edison (NY)

- also provided datathat was useful and extensive, but not as complete. Baltimore Gas & Electric provided annual figures on the number of rebated ballasts installed, but notthe dollar value ofthese rebates. Southern California Edison provided data on yearly spending on ballasts, but not the corresponding number of rebated ballasts. Consolidated Edison provided data that involved estimation ofthe number ofelectronic ballasts rebated under some measures for each year, and later years lacked specific information on the value ofeach rebate. Using the average rebate value from the core sample data set, it was possible to incorporate the information provided by the three utilities listed above to create an expanded sample data set. In the case ofSouthern California Edison, the figures provided on annual expenditures for electronic ballast rebates were divided by the average rebate value from the core sampleto estimate the number ofballasts rebated annually (expenditures on electronic ballast rebates + $'s per rebate = total number ofelectronic ballasts rebated). In the case ofBaltimore Gas & Electric, the figures for the annual number ofrebates were multiplied by the average rebate value to estimate the utility's annual spending on electronic ballast rebates (number ofrebates x $'s per rebate 

## =total spending on electronic ballast rebates). Forthe years during which Consolidated Edison provided information on the number ofrebates only, the same approach was used as inthe case ofBaltimore Gas & Electric. As Table 1illustrates (next page), the nine utilities included in the expanded data set account for roughly 25% to 35% ofnational expenditures on energy efficiency programs.

4Table 1: Energy Efficiency Spending of Utilities i n Core and Extended Sample Data Sets as a % of Nation's Total Energy Efficiency Spending 

### Year National EE $'s* Core Sample % Expanded Sample %_ 1992 1,205,270, 000 18% 

### 33% 1993 1,607,952,000 14% 

### 29% 1994 1,592, 125,000 18% 31% 1995 1,408,542,000 

### 19% 27% 1996 1,037,758,000 18% 30% 1997 1,057,085,000** 

### 17% NA*** as reported in the DOE/ EIA Annual Reports on DSM, "U.S. Electric Utility Demand Side Management," for 1993 , 1994, 1995, 1996 [(EIA-0589(93-96)]. No report was published for 1992; data for the year were provided directly by EIA. II' aggregate figure not yet available for 1997

. The amount listed for 1997 is spending projected by utilities in 1996 "Annual Electric Utility Report," Form EIA-86 1 , as reported in the DOE/EIA Annual Report on DSM, "U.S

. Electric Utility Demand Side Management for 1996," EIA -0589(96). *** not available: none of the three utilities added to the core sample data set were able to provide information on 1997 rebate programs. Notes on Table 1 : The column "National EE $'s" indicates total national DSM expenditures on energy efficiency for each year. The column "Core Sample %" lists the percentage of national EE expenditures represented by the energy efficiency spending of the six utilities that comprise the core sample data set. The column "Expanded Sample %" lists the percentage of national EE expenditures represented by the nine utilities that comprise the expanded sample data set. 

### One data complication arose when utilities offered a rebate for an electronic ballast in combination with a lamp or a fixture

. Generally, in the case of such rebate measures, we looked to see the value of the rebate for the ballast alone and used that as our guide. For example, in 1994, Pacific Gas & Electric offered a $5 rebate for an electronic ballast alone or $6 for an electronic ballast with T8 lamp

. In this case, the total spending on the combined lamp and ballast measure was multiplied by a fraction of 5/6 to approximate the amount of the rebate attributable to the ballast. Data collection efforts were hindered by a number of factors: 1. Frequent turn-over in personnel made it difficult to find staff with historical knowledge; 2. Many utilities do not keep detailed historical data; lack of a standardized reporting format made it a challenge to interpret data when it was provided. 3. Diminishing resources devoted to DSM made individuals still working on DSM less available to respond to requests for data. 4. In one case, the utility failed to provide data despite state regulations requiring that the data be made available upon request.
4. Analytical Methodology


### Our first set of estimates is based on analysis using only the core sample data set. We used two values derived from the core sample to estimate the number of electronic ballasts for the nation and their dollar value annually for the years 1992 to 1997

. First, we calculated the fraction of energy efficiency spending devoted to electronic ballast rebates

5 

### Table 1:

### EnergyEfficiencySpending of Utilities in Core andExtended SampleData Sets as a % 

### of Nation's Total Energy EfficiencySpendi ng Year National EE $'s* Core Sample % Expanded Sample % 1992 1,205,270,000 18% 33% 1993 1,607,952,000 14% 29% 1994 1,592,125,000 18% 31% 1995 1,408,542,000 19% 27% 1996 1,037,758,000 18% 30% 1997 1,057,085,000·· 17% NA·*·



# . ..

as reported m the DOEIEIAAnnual Reports onDSM, "U.S. Electnc UnlIty Demand Side Management," for 1993, 1994, 1995, 1996 [(EIA-0589(93-96)]. No report was published for 1992; data for the year were provided directly by EIA

. •• aggregate figure notyet available for 1997. The amount listed for 1997 is spendingprojected by

utilities in 19% "Annual Electric Utility Report," FormEIA-861, as reported inthe DOEIEIAAnnual Report on DSM, 

### "u.s. Electric Utility Demand Side Management for 1996," EIA-0589(96)

.

...... not available: none ofthe three utilities added to the core sample data set were able to provide

information on 1997 rebate programs. Notes on Table 1: The column "National EE $'s" indicates total national DSMexpenditures onenergy efficiency for eachyear. The column "Core Sample %" lists the percentage ofnational EE expenditures represented by the energy efficiency spending ofthe six utilities that comprise the core sample data set. The column "Expanded Sample %" lists the percentage ofnational EE expenditures represented by the nine utilities that comprise the expanded sample data set. One data complication arose when utilities offered a rebate for an electronic ballast in combination with a lamp or a fixture. Generally, in the case ofsuch rebate measures, we looked to seethe value oftherebate for the ballast alone and used that as our guide. For example, in 1994, Pacific Gas & Electric offered a $5 rebate for an electronic ballast alone or $6 for an electronic ballast with T8 lamp. Inthis case, the total spending on the combined lamp and ballast measure was multiplied by a fraction of5/6 to approximate the amount ofthe rebate attributable to the ballast.
Data collection efforts were hindered by a number offactors: 1. Frequent tum-over in·personnel made it difficult to find staffwith historical knowledge; 2. Many utilities do not keep detailed historical data; lack ofa standardized reporting format made it a challenge to interpret data when it was provided. 3. Diminishing resources devoted to DSM made individuals still working on DSM less available to respond to requests for data. 4. In one case, the utility failed to provide data despite state regulations requiring thatthe databe made available upon request. 

### 4. AnalyticalMethodology
Ourfirst set ofestimates is based on analysis using only the core sample data set. We used two values derived from the core sample to estimate the number ofelectronic ballasts for the nation and their dollar value annually for the years 1992 to 1997. First, we calculated the fraction ofenergy efficiency spending devoted to electronic ballast rebates

5

### and the average value of the rebate per ballast for the sample data. Next, we assumed that

the average rebate value and fraction of EE spending going to ballast rebates was the same for the nation as in our sample. For each year, nationally-aggregated energy efficiency spending was multiplied by the fraction of EE spending going to ballast rebates in our sample to estimate national spending on ballast rebates. Then, we divided this estimate of spending on ballast rebates by the average rebate per ballast to estimate the number of ballasts rebated for the year. For example, in 1994, the six utilities in our core sample spent about $280 million on energy efficiency programs and $36 million on ballast rebates, so the ballast rebates represented 13% of total EE spending for the, sample. The $36 million was distributed among about 3.5 million ballasts, for an average expenditure of approximately $10 per ballast in 1994. Next, we applied the fraction of EE spending going to ballast rebates (13%) to national spending for 1994. Nationally, EE programs amounted to about $1.6 billion in 1994, so we estimated that electronic ballast rebates amounted to about $200 million (13% of $1.6 billion) for the year. Based on an average value of $10/rebate, we estimated that 20 million ballasts ($200 million divided by 10$/rebate) were installed under DSM rebate measures in 1994. A second set of estimates was calculated using the expanded data set. For the years 1992-1994, a new average rebate value was calculated for the sample using Consolidated Edison's data.' Otherwise, the average rebate value from the core sample data set was used to fill out the information provided by the three extra utilities in the expanded sample (see the previous section for a detailed explanation of this process). Then the same approach was used; we calculated the percentage of energy efficiency spending going to electronic ballast rebates in the sample. We applied this percentage to national energy efficiency spending in order to calculate an estimate of national expenditures on electronic ballast rebates. Then, we estimated the number of ballasts rebated nationwide by dividing the estimate of national electronic ballast rebate expenditures by the average rebate per ballast.
5. Data Analysis
5.1. Core Sample Data Set 

### Using the methodology described above and the core sample data set, LBNL has calculated the following national estimates of number of electronic ballast DSM rebates and spending on these rebates.

' The utility was excluded from the core sample data set for 1992-1994 (when complete data were provided) because for each year some measures reported by Con Ed included estimates of ballast rebates rather than actual figures. Although our contact at Con Ed felt fairly reliable estimates could be made, uncertainty about the precision of estimates led us to include all the Con ED data in the expanded sample data set rather than the core.

6 and the average value ofthe rebate perballast for the sample data. Next, we assumed that the average rebate value and fraction ofEE spending going to ballast rebates was the same for thenation as in our sample. For each year, nationally-aggregated energy efficiency spending was multiplied by the fraction ofEE spending going to ballast rebates in our samplet9 estimate national spending on ballast rebates. Then, we divided this estimate of spending on ballast rebates by the average rebate perballast to estimate the number of ballasts rebated for the year. For example, in 1994, the six utilities in our core sample spent about $280 million on energy efficiency programs and $36 million on ballast rebates, so the ballast rebates represented 13% oftotal EE spending for the. sample. The $36 million was distributed among about 3.5 million ballasts, for an average expenditure ofapproximately $10per ballast in 1994. Next, we applied the fraction ofEE spending going to ballast rebates (13%) to national spending for 1994. Nationally, EE programs amounted to about $1.6 billion in 1994, so we estimated that electronic ballast rebates amounted to about $200 million (13% of$1.6 billion) for the year. Based on an average value of$lO/rebate, we estimated that 20 million ballasts ($200 million divided by lO$/rebate) were installed under DSM rebate measures in 1994.
A second set ofestimates was calculated using the expanded data set. For the years 1992-1994, a new average rebate value was calculated for the sample using Consolidated Edison's data. 7 Otherwise, the average rebate value from the core sample data set was used to fill outthe information provided by the three extrautilities in the expanded sample (see the previous section for a detailed explanation ofthis process). Then the same approach was used; we calculated the percentage ofenergy efficiency spending going to electronic ballast rebates inthe sample. We applied this percentage to national energy efficiency spending in orderto calculate an estimate ofnational expenditures on electronic ballast rebates. Then, we estimated the number ofballasts rebated nationwide by dividing the estimate ofnational electronic ballast rebate expenditures by the average rebate per ballast. 

### 5. DataAnalysis 5.1. COTe Sample Data Set Using the methodology described above and the core sample data set, LBNL has calculatedthe following national estimates ofnumber ofelectronic ballast DSM rebates and spending on these rebates.

7 The utility was excluded from the core sample data set for 1992-1994 (when complete data were provided) because for eachyear some measures reported by ConEdincluded estimates ofballast rebates rather than actual figures. Although our contact at ConEd felt fairly reliable estimates could be made, uncertainty about the precision ofestimates led us to include allthe ConED data in the expanded sample data set rather thanthe core.

6Table 2: Electronic Ballast DSM Rebate Estimates Derived from Core S ple Year % of EE $'s to electronic ballast rebates in the sample National estimate of spending on rebates (millions of $'s) Average $'s/rebate in the sample _ Estimated number of rebates nationwide (millions) 1992 1993 1994 1995 1996 1997" 5.3% 7.3% 13% 13% 7.8% 2.0%

$63.9 $118 $207 $180 $79.9 $21.2

13.97 10.94 10.70 11.17 7.64 3.35
4.58 10.8 19.4 16.1 10.5 6.34

.1997 estimates based on data for 1/2 to 3/4 of the year. Described further below. Notes on Table 2: The estimate of the number of rebates nationwide, listed in row four, results from dividing the estimate of national spending on rebates in row two by the weighted average rebate value found in row three (row four = row two / row three). The national estimate of spending on electronic ballast rebates in row two results from multiplying national spending on rebates (listed in Table 1) by the fraction of energy efficiency dollars going to rebates listed in row one. 

### The results of this analysis suggest that electronic ballast rebates peaked in 1994 in terms of the number of ballasts rebated and utility spending on rebates. Estimates of the number of rebates decline slightly in 1995 and substantially in the last two years. In 1996, our analysis suggests that the number of rebates fell by about 43% and that spending on electronic ballast rebates fell by about 55% from the year before. The decline from 1996 to 1997 in spending on and number of DSM rebates for electronic ballasts also appears substantial. Our estimates suggest that the number of rebates fell by almost 40% and utility expenditures on rebates fell by about 73%. However, analysis of data for 1997 is less certain for two reasons. First, the sample data set includes data for less than the full year. Between 6 months and 10 months of utility data were used to estimate the number of ballasts rebated and spending on these rebates for the year. Secondly, the analysis for 1997 is based on projected national EE spending as reported by utilities in their 1996 annual report to the DOE-EIA. However, in recent years, utilities have consistently projected higher spending on DSM for the following year than they ended up spending in reality. For example, in 1996, actual spending on DSM fell $329 million short of the level predicted the year before (or 85% of the predicted level of spending).' For 1995 and 1994, the figures were $171 million (or 92% of predicted) and $288 million respectively (or 90% of predicted). If 1997 follows this pattern, then basing our 1997 estimates on projected EE spending for the year would overstate ballast incentives for the year. 

### The trend that this analysis identifies, a reduction in incentives provided by electronic ballast DSM rebates since 1994, is confirmed by the decision of two of the

e Utility projections of DSM spending for the next year and five years later can be found in table 22 of the EIA's annual report on DSM

7 

### Table 1: 

### Electronic BallastDSMRebateEstimates Derived from Core Sample Year 1992 1993 1994 1995 1996 1997" %ofEE $'sto 5.3% 7.3% 13% 13% 7.8% 2.0% electronic ballast rebates in the sample National estimate of $63.9 $118 $207 $180 $79.9 $21.2 spending onrebates millions of$'s) Average $'s/rebate 13.97 10.94 10.70 11.17 7.64 3.35 in the sample Estimated number of 4.58 10.8 19.4 16.1 10.5 6.34 rebates nationwide millions) *1997 estimates based on data for Y2 to % ofthe year. Described further below. Notes on Table 2: The estimate ofthe number ofrebates nationwide, listed inrow four, results from dividing the estimate ofnational spending onrebates in rowtwo by the weighted average rebate value found inrowthree (row four = rowtwo I rowthree). The national estimate of spending on electronic ballast rebates in rowtwo results from multiplying national spending on rebates Oistedin Table 1) by the fraction ofenergy efficiency dollars going to rebates listed inrow one. 

### The results ofthis analysis suggest that electronic ballast rebates peaked in 1994 

### in terms ofthe number ofballasts rebated and utility spending on rebates. Estimates of the number ofrebates decline slightly in 1995 

### and substantially in the lasttwo years. In 1996, 

### our analysis suggests that the number ofrebates fell by about 43% 

### and that spending on electronic ballast rebates fell by about 55% 

### from the year before. The decline from 1996 

### to 1997 

### in spending on and number ofDSM rebates for electronic ballasts also appears substantial. Our estimates suggest that the number of rebates fell by almost 40% 

### and utility expenditures on rebates fell by about 73%. 

### However, analysis ofdata for 1997 

### is less certain for two reasons. First, the sample data set includes data for less than the full year. Between 6 months and 10 

### months ofutility data were used to estimate the number ofballasts rebated and spending on these rebates for the year. Secondly, the analysis for 1997 

### is based on projected national EE spending as reported by utilities in their 1996 

### annual report to the DOE-EIA. However, in recent years, utilities have consistently projected higher spending on DSM for the following year than they ended up spending in reality. For example, in 1996, 

### actual spending on DSM fell $329 

### million short ofthe level predicted the year before (or 85% 

### ofthe predicted level ofspending).8 For 1995 

### and 1994, 

### the figures were $171 

### million (or 92% 

### ofpredicted) and $288 

### million respectively (or 90% 

### ofpredicted). If 1997 

### follows this pattern, then basing our 1997 

### estimates on projected EE spending for the year would overstate ballast incentives for the year. The trend that this analysis identifies, areduction in incentives provided by electronic ballast DSM rebates since 1994, 

### is confirmed by the decision oftwo ofthe

8 Utility projections ofDSM spending for the nextyear and five years later canbe found intable 22 ofthe EIA's annual report onDSM

7

### smaller utilities in our sample to end their electronic ballast rebate programs in recent

years. In 1995, the Central Maine Power Company stopped offering electronic ballast rebates

. Rochester Gas & Electric ended their incentives program for ballasts in 1996. 5.2. Expanded S

am ple Data Set Using the expanded data set, LBNL calculated a second set of national estimates of the number of electronic ballasts rebated and spending on these rebates.
Table 3: Electronic Ballast Rebate Estimates Derivedfrom Expanded Sa

Year % of EE $' s to electronic ballast rebates in the sample ational estimate of spending on rebates (millions of $'s Average $'s/rebate in the sample Estimated number of rebates nationwide 1992 1993 1994 1995 1996 11% 5.7% 8.4% 11.4% 5.2%
$129 $91.0 $133 $161 $54.2

18.40 9.73 10.39 11.17 7.64
7.02 9.36 12.8 14.4 7.10
Notes on Table 3: The estimate of the number of rebates nationwide, listed in row four, results from dividing the estimate of national spending on rebates in row two by the weighted average rebate value found in row three (row four = row two -^- row three). The national estimate of spending on electronic ballast rebates in row two results from multiplying national spending on rebates (listed in Table 1) by the fraction ofenergy efficiency dollars going to rebates listed in row one. Recall that none of the utilities added to the core sample were able to provide any information on 1997. Thus, there is no new estimate for that year. 

### Analysis of the expanded sample data set suggests that DSM rebates for electronic ballasts peaked in 1995 rather than 1996. Despite this difference, estimates from the expanded sample generally support the pattern that emerged from analysis of the core sample. As in the case of the core sample, analysis of the expanded sample indicates a sharp fall in DSM rebates from 1995 to 1996. None of the utilities added to the core sample to create the expanded sample were able to provide any data for 1997. One notable aspect of the expanded sample data set is the large value calculated for the weighted average value per rebate in 1992

. This reflects the fact that Consolidated Edison rebated over 1 million ballasts for the year for $25 to $35 per ballast based on the number of lamps the ballast accommodated

. Consolidated Edison's electronic ballast rebates accounted for more than 40% of the ballast rebates in the expanded sample for 1992

. By the following year, the utility 's rebate levels had fallen into line with others in the sample, ranging from $6 to $15 per ballast. Figure 1 (next page) presents a comparison of the DSM rebate estimates derived from the core sample data set and the expanded sample data set along with figures on shipments of electronic ballasts in the U

.S. as reported by the National Electrical Manufacturers Association

. It should be noted that the 1997 values in Figure 1 are both based on incomplete data for that year.

8 smallerutilities in our sample to end their electronic ballast rebate programs in recent years. In 1995, the Central Maine Power Company stopped offering electronic ballast rebates. Rochester Gas & Electric ended their incentives program for ballasts in 1996. 

### 5.2. ExpandedSampleData Set Using the expanded data set, LBNL calculated a second set ofnational estimates ofthe number ofelectronic ballasts rebated and spending on these rebates. 

### Table 3: 

### Electronic BallastRebate Estimates Derivedfrom EXRandedSample Year 1992 1993 1994 1995 1996 % ofEE $'s to electronic 11% 5.7% 8.4% 11.4% 5.2% ballast rebates in the sample**~ational** estimate of $129 $91.0 $133 $161 $54.2 spending onrebates millions of$'s) Average $'s/rebate 18.40 9.73 10.39 11.17 7.64 in the sample Estimated number of 7.02 9.36 12.8 14.4 7.10 rebates nationwide Notes Oil Table 3: The estunate ofthe number ofrebates natlonWlde, hsted m row four, results from dividing the estimate ofnational spending onrebates inrowtwo by the weighted average rebate value found in row three (row four = rowtwo + row three). The national estimate ofspending onelectronic ballast rebates inrowtwo results from multiplying national spending on rebates Oisted inTable 1) by the fraction ofenergy efficiency dollars going to rebates listed inrow one. Recall that none ofthe utilities added to the core sample were able to provide any information on 1997. Thus, there is no new estimate for thatyear. Analysis ofthe expanded sample data set suggests that DSM rebates for electronic ballasts peaked in 1995 rather than 1996. Despite this difference, estimates from the expanded sample generally support the pattern that emerged from analysis ofthe core**sampl~.** As inthe case ofthe core sample, analysis ofthe expanded sample indicates a sharp fall in DSM rebates from 1995 to 1996. None ofthe utilities added to the core sample to create the expanded sample were able to provide any data for 1997.
One notable aspect ofthe expanded sample data setis the large value calculated for the weighted average value perrebate in 1992. This reflects the fact that Consolidated Edison rebated over 1 million ballasts for the year for $25 to $35 per ballast based on the number oflamps the ballast accommodated. Consolidated Edison's electronic ballast rebates accounted for more than 40% ofthe ballast rebates inthe expanded sample for 1992. By the following year, the utility's rebate levels had 'fallen into line with others in the sample, ranging from $6 to $15 per ballast. Figure 1 (next page) presents a comparison ofthe DSM rebate estimates derived from the core sample data set and the expanded sample data set along with figures on shipments ofelectronic ballasts inthe U.S. as reported by the National Electrical Manufacturers Association. Itshould be noted that the 1997 values in Figure 1 are both based on incomplete data for that year.

8Figure 1: Comparing DSM Rebate Estimates -- Core vs. Expanded Samples (Plus Shipment Data)



### 0- 1992 1993 1994 • 1995 1996 1997 Year -&-core sample estimates ( millions) -expanded sample estimates ( millions) ...• electronic ballast shipments ( millions)



### 6. Discussion: Market Impact Here we combine this study's national electronic ballast DSM rebate estimates with data provided by NEMA on domestic ballast shipments in the US in order to gain some insight into the impact of DSM on the ballast market. In particular, we look to see if the reduction in the number of DSM rebates for electronic ballasts has had a discernible effect. It seems possible that this reduction in DSM rebates has contributed to the apparent levelling off or slowed increase in the electronic ballast's penetration of the market. The rate of growth for electronic ballasts in terms of market share has fallen since 1995 when this study indicates that DSM rebates for electronic ballasts began to decline substantially. From 1995 to 1996, the share of the market going to electronic ballasts fell by about 2% (see Table 4). Their market share increased from 1996 to 1997 by about 6%. Still, this gain does not compare to the rate of changes from 1993 to 1994 and from 1994 to 1995, when the gains were 13% and 20% respectively.

9**~** c (I) E Q. 

### :c rJ) 

### !! en S ItS .c**~** 

### '0



## ... (I) .c E ::I Z 40
35
30
25
20
15
10

5
0 Figure 1: Comparing DSM Rebate Estimates -- Core "s. Expanded Samples (Plus Shipment Data)

.....,..

........... "::::: ......
....

1992 1993 1994 , 1995 1996 1997 Year
--+-core sample estimates (millions)**~expanded** sample estimates (millions)

....:::.:
.... electronic ballast shipments (millions)



### 6. Discussion: MarketImpact
Here we combine this study's national electronic ballast DSM rebate estimates with data provided by NEMA on domestic ballast shipments in the US in orderto gain some insight into the impact ofDSM on the ballast market. In particular, we look to see if the reduction in the number ofDSM rebates for electronic ballasts has had a discernible effect. It 

### seems possible thatthis reduction in DSM rebates has contributed to the apparent levelling offor slowed increase in the electronic ballast's penetration ofthe market. The rate ofgrowth for electronic ballasts interms ofmarket share has fallen since 1995 when this study indicates that DSMrebates for electronic ballasts began to decline substantially. From 1995 to 1996, the share ofthe market going to electronic ballasts fell by about 2% (see Table 4). Their market share increased from 1996 to 1997 by about 6%. Still, this gain does not compare to the rate ofchanges from 1993 to 1994 and from 1994 to 1995, when the gains were 13% and 20% respectively.

9

### Table d Assessing Market Qacts ® DSM

Year Core Sample DSM Rebate Estimates (millions) Expanded

Sample DSM Rebate Estimates (millions) Electronic

Ballast Shipments* (millions) Electronic

Ballast Market Share (% of Ballast Market) Rate of Change

in Market Share

1993 10.8 9.36 22.914 37.0% 1994 19.4 12.8 25.993 41.8% + 13% 1995 16.1 16.0 33.101 50.1% +20% 1996 10.5 7.10 30.317 49.1% - 2% 1997 6.34 Not Available 34.95444 52.1% +6% - shipment data provided courtesy of NEMA 1997 shipment figures estimated by NEMA based on 6 months of data 

### Table 5 shows ballast market data in conjunction with the estimates of DSM rebates for electronic ballasts derived from our core sample and expanded sample.
Table S: The Ballast Market with DSM Estimates Year gnetic

allast hipments* millions) Electronic

Ballast Shipments (millions) Total

Ballast Shipments (millions) Core Sample Estimate of

DSM Rebates - 000's (% of elec

. shipments ) Expanded Sample Estimate of DSM Rebates - 000's (% of elec. shipments )

1993 39.091 22.914 62.005 10.8 (47%) 9.36 (41%) 1994 36.154 25.993 62.147 19.4 (75%) 12. 8 (49%) 1995 33.020 33.101 66.121 16.1 490/6) 16.0 (48%) 1996 31.475 30.317 61.792 10.5 (35%) 7.10 (23%) 1997 32.180** 34.954** 67.134** 6.34 (18%) Not Available shipment data provided courtesy of NEMA '* 1997 shipment figures estimated by NEMA based on 6 months of data


### While it does seem that a decline in the number of electronic ballast DSM rebates may have contributed to the slowing of the rate of growth in the electronic ballast's market share, this study does not show a direct positive relationship between the level of DSM rebates and the share of the ballast market going to electronics. Clearly, DSM rebates are one of several interrelated factors that determine the market share of electronic ballasts over time. A more complete data set for a longer period of time would improve our understanding of DSM trends and their impact on the ballast market. Figure 2 (below) presents a graphical analysis of trends in electronic ballast market share and DSM rebate estimates , which are reported as the percentage of electronic ballast shipments for the year. DSM rebate estimates derived from both the core sample andexpanded sample are graphed. The graph demonstrates that there is not a positive one-toone correlation between DSM rebates and the market share garnered by electronic ballasts. The graph also shows the declining percentage of electronic ballast shipments rebated followed by the leveling off or decreased growth rate in electronic ballast market share.



## 10 Table 4:

### AssessingMarket Effects of 

### DSM Year Core Sample Expanded Electronic Electronic Rate ofChange DSMRebate SampleDSM Ballast BallastMarket inMarket Share Estimates Rebate Estimates Shipments" Share (%of (millions) (millions) (millions) BallastMarket) 1993 10.8 9.36 22.914 37.0% 1994 19.4 12.8 25.993 41.8% + 13% 1995 16.1 16.0 33.101 50.1% +20% 1996 10.5 7.10 30.317 49.1% -2% 1997 6.34 Not Available 34.954" 52.1% +6% " shipment dataprovided courtesy ofNEMA ""1997 shipmentfigures estimatedby NEMAbased on 6 months ofdata 

### Table 5 shows ballast market data in conjunction with the estimates ofDSM rebates for electronic ballasts derived from our core sample and expanded sample. 

### Table 5: 

### The BallastMarketwith DSMEstimates Year**~gnetic** Electronic Total Core Sample Estimate of Expanded Sample Estimate**~allast** Ballast Ballast DSMRebates

- OOO's ofDSMRebates

- OOO's**~hipments"** Shipments Shipments (% ofe1ec. shipments) (%ofe1ec. shipments) millions) •(millions) , (millions) 1993 39.091 22.914 62.005 10.8 (47%) 9.36 (41%) 1994 36.154 25.993 62.147 19.4 (75%) 12.8 (49%) 1995 33.020 33.101 66.121 16.1 (49%) 16.0 (48%) 1996 31.475 30.317 61.792 10.5 (35%) 7.10 (23%) 1997 32.180" 34.954" 67.134" 6.34 (18%) NotAvailable

,shipment dataproVIded courtesy ofNEMA "1997 shipmentfigures estimatedby NEMAbased on 6 months ofdata 

### While it does seem that a decline in the number ofelectronic ballast DSM rebates may have contributed to the slowing ofthe rate ofgrowth in the electronic ballast's market share, this study does not show a direct positive relationship between the level of DSMrebates and the share ofthe ballast marketgoing to electronics. Clearly, DSM rebates are one ofseveral interrelated factors that determine the market share ofelectronic ballasts overtime. A more complete data set for a longer period oftime would improve our understanding ofDSM trends and their impact on the ballast market. Figure 2 (below) presents a graphical analysis oftrends in electronic ballast market share and DSM rebate estimates, which are reported as the percentage ofelectronic ballast shipments for the year. DSMrebate estimates derived from both the core sample and expanded sample are graphed. The graph demonstrates thatthere is not a positive one-toone correlation between DSMrebates and the market share garnered by electronic ballasts. The graph also shows the declining percentage ofelectronic ballast shipments rebated followed by the leveling offor decreased growth rate in electronic ballast market share.

10

### Figure 2: % of Electronic B allast Shipments Rebated and Market Share of Electronic Ballasts Over Time
80

70

60

50

40

30

20

10 • A

1993 1994 1995 Year 1996

---I electronic ballast market share • % of elec

. shipments with rebate (core estimates) % of elec

. shipments with rebate (expanded estimates)



### 7. Uncertainty 1997



### We are confident in the veracity of the general trend identified by this analysis: DSM rebates for electronic ballasts increased in number up until recent years when they began to decline in number

. All of the sample data collected shows utilities reducing or eliminating their DSM rebates for electronic ballasts recently

. Thus, the sample data parallels the general national trend toward smaller DSM programs discussed in section two. A detailed summary of the sample data is provided in Table 6 at the end of this section so that the reader can observe the variance and trends over time for the individual utilities in our sample data. However, despite LBNL's efforts to maximize the amount of data incorporated in this analysis, only a relatively small sample size was successfully collected.

11 

### 80


# e 70 CIS .c 

### en


# - II) .:.c: 

### 60 

# ... CIS :liE 

### oa 

# - 'C 

### 50 II) 

# --**2l~** II) 

### a:: 40 CIl 

# - C II) E 

### 30 Q. 

### :E 

### en 

### '0 20**~** co 

### 10 

### Figure 2: % 

### of Electronic Ballast Shipments Rebated and Market Share of Electronic Ballasts Over Time

/

!J!i(' •••••••••,:,:: •., - •**~~ ~:**  '- ,

,,:::-' 

## . . . .

## ~-------- ". ''-. 

# .----- "



### 1993 1994 1995 Year ---If--electronic ballast market share 

# .

"



### 1996

- .. - % ofelec. shipments with rebate (core estimates)

.. '::'''' . % ofelec. shipments with rebate (expanded estimates)



### 7. Uncertainty
We are confident in the veracity ofthe general trend identified by this analysis: 

### 1997

DSMrebates for electronic ballasts increased in number up until recent years when they began to decline in number. All ofthe sample data collected shows utilities reducing or eliminating their DSMrebates for electronic ballasts recently. Thus, the sample data parallels the general national trend toward smaller DSM programs discussed in section two. A detailed summary ofthe sample data is provided in Table 6 at the end ofthis section so thatthe reader can observe the variance and trends over time for the individual utilities in our sample data. However, despite LBNL's efforts to maximize the amount of data incorporated in this analysis, only a relatively small sample size was successfully collected.

11

### It is not known whether or not the sample is representative of the nation as a

whole. To provide some idea of the relative size of the sample with respect to national rebate programs, we have compared the total energy efficiency spending of the utilities included in the sample data with national spending

. The core sample represents about 15% to 20% ofnational expenditures on energy efficiency ; the expanded sample accounts for roughly 25% to 35% of national expenditures on energy efficiency. Generally, our attempts to increase the sample size were frustrated by the inability of utilities to provide historical data

. However, in some cases, utilities had trouble providing more recent data . The Long Island Lighting Company was unable to provide data for 1996 or 1997, thus reducing the core sample by one large utility for those years and exacerbating the small sample size problem . Moreover, none of the additional utilities in the expanded sample were able to deliver any information on 1997. It is not known whether the estimates derived from the expanded sample are more or less certain than the core sample estimates

. The expanded sample allows the analysis to incorporate some additional information- the number of ballasts rebated by Baltimore Gas & Electric and Consolidated Edison, and spending on ballast rebates by San Diego Gas & Electric- but it also requires an additional assumption that each additional utility offered rebates at the value calculated for the core sample. The sample size is important because observations from the sample data are scaled up based on national energy efficiency spending to estimate for the U

. S. as a whole the number of DSM rebates for electronic ballasts

. The estimation technique assumes that the average rebate value and the fraction of energy efficiency spending on rebates calculated for the sample are the same as those for the United States as a whole

. We recognize that it is unlikely that the national values are the same as those observed in either of the two samples

. However, the amount of divergence between the assumed and actual values is uncertain. There are two reasons to believe that this study's estimates underestimate the impact of DSM rebates on the market: (1) Participant spillover effect Participant spillover, or the "free driver" effect, refers to the lasting impact on those who have taken advantage of rebates. Even if rebates are no longer available, these participant are more likely to buy electronic ballasts in the future because any doubts or uncertainty about the new technology will have been dispelled. (2) Non-participant spillover effect Non-participant spillover points out that lower prices would likely follow from the expanded demand and supply that rebates cause

. In turn, these lower prices will likely encourage some additional consumers to purchase electronic ballasts even if they don't receive rebates. While the two factors named above would lead to the conclusion that the estimates in this study may underestimate the impact of DSM rebates, the presence of a "free rider" effect suggests the opposite

. The "free rider" principle recognizes that some consumers who

12 

### It

### is not known whether ornot the sample is representative ofthe nation as a whole. To provide some idea ofthe relative size ofthe sample with respect to national rebate programs, we have compared the total energy efficiency spending ofthe utilities included in the sample data with national spending. The core sample represents about 15% to 20% ofnational expenditures on energy efficiency; the expanded sample accounts for roughly 25% to 35% ofnational expenditures on energy efficiency. Generally, our attempts to increase the sample size were frustrated by the inability ofutilities to provide historical data. However, in some cases, utilities had trouble providing more recent data. The Long Island Lighting Company was unable to provide data for 1996 or 1997, thus reducing the core sample by one large utility for those years and exacerbating the small sample size problem. Moreover, none ofthe additional utilities in the expanded sample were able to deliver any information on 1997.
It

### is not known whether the estimates derived from the expanded sample are more orless certain than the core sample estimates. The expanded sample allows the analysis to incorporate some additional information- the number ofballasts rebated by Baltimore Gas & 

### Electric and Consolidated Edison, and spending on ballast rebates by San Diego Gas & 

### Electric- but it also requires an additional assumption that each additional utility offered rebates at the value calculated for the core sample.
The sample size is important because observations from the sample data are scaled up based on national energy efficiency spending to estimate for the U.S. as a whole the number ofDSM rebates for electronic ballasts. The estimation technique assumes that the average rebate value and the fraction ofenergy efficiency spending on rebates calculated for the sample are the same as those for the United States as a whole. We recognize that it is unlikely that the national values are the same as those observed in either ofthe two samples. However, the amount ofdivergence between the assumed and actual values is uncertain.
There are two reasons to believe thatthis study's estimates underestimate the impact ofDSMrebates on the market: (1) Participant spillover effect Participant spillover, or the "free driver" effect, refers to the lasting impact on those who have taken advantage ofrebates. Even ifrebates are no longer available, these participant are more likely to buy electronic ballasts in the future because any doubts oruncertainty about the new technology will have been dispelled. (2) Non-participant spillover effect Non-participant spillover points outthat lower prices would likely follow from the expanded demand and supply that rebates cause. In tum, 

### these lower prices will likely encourage some additional consumers to purchase electronic ballasts even if they don't receive rebates. While the two factors named above would lead to the conclusion thatthe estimates in this study may underestimate the impact ofDSM rebates, the presence ofa "free rider" effect suggests the opposite. The "free rider" principle recognizes that some consumers who

12

### purchase electronic ballasts and receive a rebate would have purchased them even if the

rebate had not been offered. This study will not resolve which of these two countervailing forces is greatest. (Table 6, Detailed Summary of Sample Data, next page.)

13 

### purchase electronic ballasts and receive a rebate would have purchased them even ifthe rebate had not been offered. This study will not resolve which ofthese two countervailing forces is greatest. (Table 6, Detailed Summary ofSample Data, next page.)

13Year 

### 1 1992 

### 1 1993 

### 1 1 994 

### 1 1995 

### 1 1996 

### 1 1997

CORE SAMPLE DATA SET (1) Central Maine Power Company # of rebates 19.21 9%

44,641 52,687 $'s/rebate % of EE $'s 6% 21.63 (2) Long Island Lighting Company # of rebates 10.11 1%

90,659 273,005 $'s/rebate % of EE $'s 5% (3) Pacific Gas & Electric 53,895

14% 280,711 4.28 8% # of rebates 333,801 659,643 2,346,229 $'s/rebate 7.42 6.16 5.56 of EE $'s 2% 4% 10% (4) Rochester Gas & Electric # of rebates $'s/rebate %ofEE $'s 25,081

13.60 4% (5) San Diego Gas & Electric # of rebates $'s/rebate % of EE $'s 261,408

22.80 17% 1.00

41,549 11.98 5% 356,251 21.14 29% (6) Utility X (requested anonymity) # of rebates 14.01 7%

87,852 169,654 $'s/rebate % of EE $'s 6% EXPANDED SAMPLE DATA SET (7) Baltimore Gas & Electric # of rebates $'s/rebated % of EE $'s 166,520

10.87 13% (8) Consolidate Edison # of rebates $'s/rebate % of EE $'s 1,064,242

26.87 30% 20.56

221,267 9.82 9% 617,986 8.79 5% (9) Southern California Edison # of rebates 10.87 9.82 1% 25,042 132,493 $'s/rebate s %ofEE $'s 9.83 7% 304,229 41.58 42% 358,098 21.02 25.44

'NA: Not Available Source: All data provided directly by utilities. 0.5% 10.29 42,310 1% 13.26 81,592 11% 10.29 347,333 8%

a 1997 figures estimated using data through 15 October 1997. b1997 figures estimated using data through 1 July 1997. 1997 figures estimated using data through 1 October 1997. d These values are taken from the weighted average value calculated for the core sample. e Values for 1995 and 1996 taken from weighted average value calculated for the core sample. For those years the utility provided estimates of the number of ballasts rebated, but not the corresponding expenditures. The number of rebates is estimated using the figures on yearly spending on ballast rebates provided by SCE and the average rebate value calculated for the core sample.

6% 

### Table 6: Detailed ,Su ry of ,Sample Data

0 0 0 0 0 0 0 0 0
235,182 NA' NA 1.20 NA NA 2% NA NA 1,485,346 1,318,372 944,104 5.1 4.60 2.02a a 8% 8% 2%a 16,464 0 0 5.88 0 0 2% 0 0 645,699 304,067 48,000 20.74 13.57 73-6-OF 34% 9% ^ 695,679 248,959 103,000 18.60 16.53 10.68c 13% 9% 2% C

699,129 185,434 NA 9.81 7.64 NA 22% 5% NA 88,387 66,725 NA 9.81 7.64 NA 2% 1% NA 14,015 12,268 NA 9.81 7.64 NA 0.4% 0.2% NA

14 

### Table 6: 

### DetailedSummary of Sample Data Year 1992 1993 CORESAMPLEDATA SET (1) Central MainePower Company # ofrebates 44,641 52,687 $'s/rebate 19.21 21.63 %ofEE$'s 6% 9% (2) LongIsland Lh!hting Company # ofrebates 90,659 273,005 $'slrebate 10.11 1.00 %ofEE$'s 5% 1% (3) Pacific Gas & Electric # ofrebates 333,801 659,643 $'slrebate 7.42 6.16 %ofEE$'s 2% 4% (4) Rochester Gas & Electric # ofrebates 25,081 41,549 $'slrebate 13.60 11.98 %ofEE$'s 4% 5% (5) San Diego Gas & Electric # ofrebates 261,408 356,251 $'slrebate 22.80 21.14 %ofEE$'s 17% 29% (6) Utility X (requested anonymity) # ofrebates 87,852 169,654 $'slrebate 14.01 20.56 %ofEE$'s 6% 7% EXPANDED SAMPLEDATA SET (7) Baltimore Gas & Electric # ofrebates 166,520 221,267 $'slrebated 10.87 9.82 %ofEE $'s 13% 9% (8) Consolidate Edison # ofrebates 1,064,242 617,986 $'slrebate e 26.87 8.79 %ofEE $'s 30% 5% (9) Southern CaliforniaEdison # ofrebates f 25,042 132,493 $'slrebate g 10.87 9.82 %ofEE $'s 6% 1%



### .. . Source: All data proVIded directly by utilitIes

. *NA: NotAvailable 1994

53,895 25.44 14% 280,711 4.28 8% 2,346,229 5.56 10% 55,470 9.83 7% 304,229 41.58 42% 358,098 21.02 8%

347,333 10.29 11% 81,592 13.26 1% 42,310 10.29 0.5%

a 1997 figures estimated using data through 15 October 1997. b1997 figures estimated using data through 1 July 1997.

c 1997 figures estimated using data through 1October 1997. 1995 1996

0 0 0 0 0 0 235,182 NA* 1.20 NA 2% NA 1,485,346 1,318,372 5.16 4.60 8% 8% 16,464 0 5.88 0 2% 0 645,699 304,067 20.74 13.57 34% 9% 695,679 248,959 18.60 16.53 13% 9%

699,129 185,434 9.81 7.64 22% 5% 88,387 66,725 9.81 7.64 2% 1% 14,015 12,268 9.81 7.64 0.4% 0.2%

d These values 

### are takenfrom the weighted average value calculated for the core sample. 1997

0 0 0
NA NA NA 944,104 2.028 2%8
0 0 0 48,000 13.60b 2%b
103,000 10.68c 2%C

NA NA NA
NA NA NA
NA NA NA

e Values for 1995 and 1996 takenfrom weighted average value calculated for the core sample. Forthose

years the utility provided estimates ofthe numberofballasts rebated, butnot the corresponding expenditures. f The number ofrebates is estimated using the figures onyearly spending onballastrebates providedby SeE and the average rebate value calculated for the core sample.

14g These values are taken from the weighted average value calculated for the core sample.

15 g These values are taken from the weighted average value calculated for the core sample.

15