ii www.enernoc.com 

### Energy Efficiency Market Potential Study and

Action Plan

Volume 1: Executive Summary

Report Number 1415

EnerNOC Utility Solutions Consulting 500 Ygnacio Valley Road

Suite 450 Walnut Creek, CA 94596

Tel: 925.482.2000

www.enernoc.com Prepared for : Indianapolis Power & Light Company Prepared by: EnerNOC, Inc. Presented on : Dec 21, 2012EnerNOC Utility Solutions Consulting iii This report was prepared by

EnerNOC Utility Solutions Consulting 500 Ygnacio Valley Blvd., Suite 450 Walnut Creek, CA 94596

Project Director: I. Rohmund Project Manager: D. CostenaroEnerNOC Utility Solutions Consulting v 

## CONTENTS

1 INTRODUCTION.................................................................................................... 1-1
Background ................................................................................................................ 1-1

Objectives .................................................................................................................. 1-1

Report Organi zation..................................................................................................... 1-1

Definitions of Potenti al................................................................................................. 1-1

2 ANALYSIS APPROACH AND DATA DEVELOPMENT.............................................. 2-20
Analysis A pproach ..................................................................................................... 2-20

Data Develop ment..................................................................................................... 2-21

3 MARKET CHARACTERIZATION AND MARKET PROFILES .................................... 3-22

Energy Use Su mmary ................................................................................................ 3-22

Residential Se ctor...................................................................................................... 3-22

Commercial Sector .................................................................................................... 3-24

Industrial Secto r........................................................................................................ 3-24

4 BASELINE FORECAST ............................................................................................ 4-1

Residential Se ctor........................................................................................................ 4-1

Commercial Sector ...................................................................................................... 4-2

Industrial Secto r.......................................................................................................... 4-3

Baseline Forecast Summary.......................................................................................... 4-4

5 ENERGY EFFICIENCY MEASURES.......................................................................... 5-1

6 ELECTRIC ENERGY EFFICIENCY – OVERALL RESULTS ......................................... 6-2
Overview of Energy Efficiency Poten tial by Sector .......................................................... 6-3

7 ENERGY EFFICIENCY POTENTIAL BY SECTOR...................................................... 7-5
Residential Electricity Potential ..................................................................................... 7-5

Commercial Electricity Pot ential .................................................................................... 7-7

Industrial Electricity Pot ential ....................................................................................... 7-9

8 ACTION PLAN........................................................................................................ 8-1

Programmatic Fr amework ............................................................................................ 8-1

A Note on Joint Delivery ................................................................................... 8-2
Program Plan s............................................................................................................. 8-2

Cost Effectivenes s ....................................................................................................... 8-1

9 CONCLUSIONS AND RECOMMENDATIONS ........................................................... 9-1

General Recomme ndations........................................................................................... 9-1

Residential Recommend ations ...................................................................................... 9-2

Commercial & Industrial Recommenda tions ................................................................... 9-2EnerNOC Utility Solutions Consulting vii 

## LIST OF FIGURES

Figure 2-1 Overview of Analysis Approach.......................................................................... 2-21

Figure 3-1 Sector-Level Electricity Use, 2011 ...................................................................... 3-22

Figure 3-2 Residential Electricity by End Use (2011), All Homes............................................ 3-23

Figure 3-3 Residential Electricity Intensity by End Use and Segment (kWh/household, 2011).. 3-23

Figure 3-4 Commercial Electricity Consumption by End Use (2011), All Building Types ........... 3-24

Figure 3-5 Industrial Electricity Use by En d Use (2011), All Industries................................... 3-25

Figure 4-1 Residential Electricity Baselin e Forecast by End Use.............................................. 4-1

Figure 4-2 Commercial Electricity Baseline Forecast by End Use ............................................ 4-2

Figure 4-3 Industrial Electricity Baselin e Forecast by End Use ............................................... 4-3

Figure 4-4 Electricity Baseline Forec ast Summary (G Wh) ....................................................... 4-4

Figure 6-1 Summary of Electric Energy Sa vings ................................................................... 6-2

Figure 7-1 Residential Electric Energy Efficiency Potential Sa vings ......................................... 7-5

Figure 7-2 Residential Electric Achievable Low Po tential by End Use in 2017........................... 7-6

Figure 7-3 Commercial Energy Efficiency Potential Savings ................................................... 7-7

Figure 7-4 Commercial Achievable Low Potential Electricity Savings by End Use in 2017.......... 7-8

Figure 7-5 Industrial Electric Poten tial Sa vings ..................................................................... 7-9

Figure 7-6 Industrial Achievable Low Electricity Potential Savings by End Use in 2017........... 7-10

Figure 8-1 Net Incremental Energy Savings (MWh) ............................................................... 8-2

Figure 8-2 Annual Utility Budgets ......................................................................................... 8-3EnerNOC Utility Solutions Consulting ix 

## LIST OF TABLES

Table 4-1 Electricity Baseline Forec ast Summary (G Wh) ....................................................... 4-4

Table 5-1 Number of Measur es Evaluated ........................................................................... 5-1

Table 6-1 Summary of Electric Energ y Efficiency Potenti al .................................................... 6-2

Table 6-2 Electric Achievable Potenti al by Sector (GWh)....................................................... 6-3

Table 8-1 Portfolio of Energy Efficiency Programs Included in Action Plan .............................. 8-1

Table 8-2 IPL Jointly Delivered Electric Energy Effic iency Portfolio Summary .......................... 8-4

Table 8-3 IPL Independently Delivered Electric Energy Efficiency Portfolio Summary............... 8-5

Table 8-4 Combined Joint Delivery-C ost effectiveness summary............................................ 8-1

Table 8-5 IPL Joint Delivery-Cost effectiveness summary...................................................... 8-2

Table 8-6 IPL Independent Delivery-Cost effe ctiveness summar y .......................................... 8-2EnerNOC Utility Solutions Consulting 1-1 

## INTRODUCTION

Background

Energy efficiency (EE) efforts are increasing in magnitude and gaining traction in Indiana, building on the momentum of recently established statewide electric energy efficiency targets and simultaneous efforts to engage natural gas energy efficiency programs. Indianapolis Power and Light Company (IPL) is investigating the electric energy efficiency potential for their service territory. The findings of this investigation will lead directly into the development of a portfolio of energy efficiency programs to be delivered to customers over the time period 2014 to 2017.

Toward this end, IPL has contracted with EnerNOC Utility Solutions (EnerNOC) to conduct a Market Potential Study and assemble an Action Plan that considers all metered electric customers in the residential, commercial, and in dustrial sectors for this time period. Citizens Energy Group (Citizens) is also a party to this contract, conducting a corresponding study and action plan for natural gas customers in their largely overlapping service territory.



## Objectives

The study addresses energy efficien cy potential and informs the CRA process in the following

ways:

x Determines markets to address with EE programs

x Finds the potential for energy savings for the 2013–2016 period

x Provides high-level recommendations regarding programs



## Report Organization

This report is presented in 4 volumes as outlined below. This document is Volume 1: Executive Summary

.

x Volume 1, Executive Summary

x Volume 2, Report

x Volume 3, Market Potential Study Appendices

x Volume 4, Action Plan Appendices: Detailed Program Write-ups



## Definitions of Potential

In this study, we estimate the potential for energy efficiency savings. The savings estimates represent net savings 1 developed into three types of potential: technical potential, economic potential, and achievable potential. Technical and economic potential are both theoretical limits to efficiency savings. Achievable potential embodies a set of assumptions about the decisions consumers make regarding the efficiency of the equipment they purchase, the maintenance activities they undertake, the controls they use for energy-consuming equipment, and the elements of building construction. Because estimating achievable potential involves the inherent uncertainty of predicting human behaviors and responses to market conditions, we developed low and high achievable potential as boundaries for a likely range. The various levels are

described below.

1 Savings in “net” terms instead of “gross” means that the baseline forecast includes naturally occurring efficiency. In other w ords, the baseline assumes that natural early adopters continue to make purchases of equipment and measures at efficiency levels higher t han

the minimum standard. 

### CHAPTER 1Introduction

1-2 www.enernoc.com x Technical potential is defined as the theoretical upper limit of energy efficiency potential. It assumes that customers adopt all feasible measures regardless of their cost. At the time of existing equipment failure, customers replace their equipment with the most efficient option available. In new construction, customers and developers also choose the most efficient equipment option. Examples of measures that make up technical potential for electricity in

the residential sector include:

o Ductless mini-split air conditioners with variable refrigerant flow

o Ground source (or geothermal) heat pumps

o LED lighting

Technical potential also assumes the adoption of every other available measure, where applicable. For example, it includes inst allation of high-efficiency windows in all new construction opportunities and furnace maintenance in all existing buildings with furnace systems. These retrofit measures are phased in over a number of years, which is longer for higher-cost and complex measures.

x Economic potential represents the adoption of all cost-effective energy efficiency measures. In this analysis, the cost effectiveness is measured by the total resource cost (TRC) test, which compares lifetime energy and capacity benefits to the incremental cost of the measure. If the benefits outweigh the costs (that is, if the TRC ratio is greater than 1.0), a given measure is considered in the economic potential. Customers are then assumed to purchase the most cost-effective option applicable to them at any decision juncture.

x Achievable High potential estimates customer adoption of economic measures when delivered through efficiency programs under ideal market, implementation, and customer preference conditions. Information channels are assumed to be established and efficient for marketing, educating consumers, and coordinating with trade allies and delivery partners. Achievable High potential establishes a maximum target for the EE savings that an administrator can hope to achieve through its EE programs and involves incentives that represent a substantial portion of the incremental cost combined with high administrative and marketing costs.

x Achievable Low potential reflects expected program participation given significant barriers to customer acceptance, non-ideal implementation conditions, and limited program budgets. This represents a lower bo und on achievable potential.EnerNOC Utility Solutions Consulting 2-20 

## ANALYSIS APPROACH AND DATA DEVELOPMENT

This section describes the analysis approach taken for the study and the data sources used to develop the potential estimates.



## Analysis Approach

To perform the energy efficiency analysis, EnerNOC used a bottom-up analysis approach as shown in Figure 2-1. This involved the following steps.

1. Held a meeting with the client project team to refine the objectives of the project in detail. This resulted in a work plan for the study.

2. Performed a market characterization to describe sector-level electricity use for the residential, commercial, and industrial sectors for the base year, 2011. This included using existing information contained in prior Indiana studies, in EnerNOC’s own databases and tools, and in other secondary data sources such as the American Community Survey (ACS) and the Energy Information Administration (EIA).

3. Developed a baseline electricity forecast by sector, segment, and end use for 2011 through 2013. Results presented in this volume focus on a four-year implementation cycle of 2014 through 2017. Results beyond 2017 ar e available in the Appendices.

4. Identified several hundred measures and estimated their effects in four levels of energyefficiency potential: Technical, Economic, Achievable High, and Achievable Low

.

5. Performed a scenario analysis of to estimate the sens itivity of the potentials to changes in

avoided costs.

6. Reviewed the current programs offered by IPL in light of the study findings to make strategic program recommendations for achieving savings.

7. Created detailed program designs and action plans through 2017 based on the potential analysis and strategic recommendations.

These steps are described in further detail throughout the remainder of this chapter. 

### CHAPTER 2Analysis Approach and Data Development

EnerNOC Utility Solutions Consulting 2-21 Figure 2-1 Overview of Analysis Approach



## Data Development

A discussion of the data sources used in this study, as well as how they were applied, is found in Chapter 2 of the main body of the report. In general, data were used according to the hierarchy given below and adapted to local conditions whenever possible, for example, by using local sources for measure data and local weather for building simulations.

x IPL and Indiana specific data first

x EnerNOC’s databases and analysis tools

x Other secondary data and reports if necessaryEnerNOC Utility Solutions Consulting 3-22 

## MARKET CHARACTERIZATION AND MARKET PROFILES

In this section, we describe how customers in the IP L service territory use electricity in the base year of the study, 2011. It begins with a high-level summary of energy use by sector and then

delves into each sector in detail.



## Energy Use Summary

Total electricity use for the residential, commerc ial and industrial sectors for IPL in 2011 was 13,946 GWh. As shown in Figure 3-1, the larg est sectors are residential and industrial, each accounting for 37% of load at 5,152 GWh and 5,195 GWh respectively. The remaining use is in the commercial sector, at 3,599 GWh.

Figure 3-1 Sector-Level El ectricity Use, 2011



### Residential

37%

Commercial

26% 

### Industrial

37%



## Residential Sector

The total number of households and electric sales for IP L were obtained for the year 2011 from the IPL customer database. In 2011, there were 415,768 households in the IPL service territory. They used 5,152 GWh of electricity. 2 We allocated these totals into two residential segments based on survey data from the DOE’s latest Residential Energy Consumption Survey (RECS 2009), which has an oversample for IPL.

Figure 3-2 shows the distribution of electric energy consumption by end use for all homes. Three main electricity end uses —appliances, space heating and cooling — account for over 50% of

2 U.S. DOE Energy Information Administration, See Table 2, http://www.eia.gov/electricity/sales_revenue_price/ 

### CHAPTER 3Market Characterization and Market Profiles

EnerNOC Utility Solutions Consulting 3-23 total use. The most energy allocated to any single category is 21% for appli ances, which includes refrigerators, freezers, stoves, clothes washers, clothes dryers, dishwashers, and microwaves. Other categories with substantial energy use are lighting and electronics. Electronics includes computers, televisions, video game consoles, etc. The remainder of the energy falls into the water heating and the miscellaneous category, which is comprised of furnace fans, pool pumps, and other “plug” loads (hair dryers, power tools, coffee makers, etc.).

Figure 3-2 Residential Electrici ty by End Use (2011), All Homes

Figure 3-3 presents the electricity intensities by en d-use and housing type, as well as all homes

on average.

Figure 3-3 Residential Electricity Intensity by End Use and Segment (kWh/household, 2011)Market Characterization and Market Profiles

3-24 www.enernoc.com 

## Commercial Sector

The total electric energy consumed by commercial customers in IPL’s service area in 2011 was 3,599 GWh. Figure 3-4 shows the distribution of electricity consumption by end use for all commercial building types. Electric usage is dominated by lighting, with interior and exterior varieties accounting for over one third of consumption. After lighting, the largest end uses are cooling, ventilation, and refrigeration. The remaining end uses comprise 7% or less of total usage: office equipment, miscellaneous, space heating, water heating, and food preparation.

Figure 3-4 Commercial Electricity Consumption by End Use (2011), All Building Types

Cooling 18%

Heating 5%

Ventilation

10%

Water
Heating 2% Interior Lighting 33% Exterior Lighting 6% Refrigeration

9% Food

Preparation

3% Office

Equipment

7% Misc 7%



## Industrial Sector

The total electric energy consumed by industrial customers in IPL in 2011 was 5,195 GWh. Figure 3-5 shows the distribution of electricity energy consumption by end use for all industrial customers. Motors are clearly the largest overall end use for the industrial sector, accounting for 45% of energy use. Note that this end use includes a wide range of industrial equipment, such as air compressors and refrigeration compressors, pumps, conveyor motors, and fans. The process end use accounts for 21% of energy use, which includes heating, cooling, refrigeration, and electro-chemical processes. Lighting is the next highest, followed by cooling, ventilation, miscellaneous, and space heating.Market Characterization and Market Profiles

EnerNOC Utility Solutions Consulting 3-25 Figure 3-5 Industrial Electricity Use by End Use (2011), All IndustriesEnerNOC Utility Solutions Consulting 4-1 

### CHAPTER 4



## BASELINE FORECAST

Prior to developing estimates of energy-efficiency potential, a baseline end-use forecast was developed to quantify what the consumption is likely to be in the future in absence of new efficiency programs and naturally occu rring efficiency. The baseline forecast serves as the metric against which energy efficiency potentials are measured. This chapter presents the baseline forecast for electricity for each sector.



## Residential Sector

The baseline forecast incorporates assumptions about economic growth, electricity prices, and appliance/equipment standards and building codes th at are already mandated as described in Chapter 2.

Figure 4-1 presents the baseline forecast for electricity at the end-use level for the residential sector as a whole. Overall, residential use incr eases slightly from 5,152 GWh in 2011 to 5,196 GWh in 2017, an increase of 0.85%, or an average growth rate of 0.1% per year. This reflects the impact of the EISA lighting standard, additional appliance standards adopted in 2011, and modest customer growth.

Figure 4-1 Residential Electricity Baseline Forecast by End UseBaseline Forecast

4-2 www.enernoc.com 

## Commercial Sector

Electricity use in the commercial sector stays consta nt during the overall forecast horizon with usage growing about 12 GWh totals. Usage starts at 3,599 GWh in 2011, and increases to 3,661 GWh in 2017. Figure 4-2 presents the electricity baseline forecast at the end-use level for the commercial sector as a whole. Usage is generally de clining due to a sluggish economic recovery and the phasing in of codes and standards. The EI SA 2007 lighting standar ds and EPACT 2005 refrigeration standards are also showi ng significant effects.

Figure 4-2 Commercial Electricity Baseline Forecast by End UseBaseline Forecast

EnerNOC Utility Solutions Consulting 4-3 

## Industrial Sector

Figure 4-3 presents the electricity baseline forecast at the end-use level for the industrial sector as a whole. Overall, industrial annual electricity use increases from 5,195 GWh in 2011 to 5,507 GWh in 2017, an overall increase of 1.0% per year. This is largely driven by the economy and sluggish projections for recovery.

Figure 4-3 Industrial Electricity Baseline Forecast by End UseBaseline Forecast

4-4 www.enernoc.com 

## Baseline Forecast Summary

Table 4-1 and Figure 4-4 provide a summary of the baseline forecast for electricity by sector for the city of IPL. Overall, the forecast shows only a slight incline in electricity use, due to a challenging macroeconomic environ ment and codes and standards.

Table 4-1 Electricity Baseline Forecast Summary (GWh)

Sector 

### 2011 2014 2015 2016 2017 % Change Avg.

Growth

Rate

Residential 5,152 5,186 5,147 5,152 5,196 0.9% 0.1%

Commercial 3,599 3,498 3,519 3,561 3,611 0.3% 0.1%

Industrial 5,195 5,248 5,343 5,437 5,507 6.0% 1.0%

Total 13,946 13,932 14,010 14,150 14,315 2.6% 0.4%

Figure 4-4 Electricity Baseline Forecast Summary (GWh)EnerNOC Utility Solutions Consulting 5-1 

### CHAPTER 5



## ENERGY EFFICIENCY MEASURES

The energy efficiency measures and assumptions used in this analysis are detailed in Chapter 5 of the main report as well as Appendix B, C, and D. Table 5-1 summarizes the number of equipment and non-equipment measures evaluated for each segment within each sector. 3

Table 5-1 Number of Measures Evaluated

Residential Commercial Industrial Total Number

of Measures

Equipment Measures Evaluated 35 38 28 101

Non

Ͳ Equipment Measures Evaluated 45 81 69 195

Total Measures Evaluated 80 119 97 296

3 The Indiana TRM being developed by the Indiana DSMCC EM&V subcommittee was not available at the time this study was being performed.Electric Energy Efficiency – Overall Results

EnerNOC Utility Solutions Consulting 6-2 

### CHAPTER 6



## ELECTRIC ENERGY EFFICIENCY – OVERALL RESULTS

Table 6-1 and Figure 6-1 summarize the electric energy-efficiency savings for the different levels of potential relative to the baseline forecast. Figure 15-2 displays the electric energy-efficiency

forecasts.

Table 6-1 Summary of Electric Energy Efficiency Potential

###  2014 2015 2016 2017

Baseline Forecast (GWh) 13,932 14,010 14,150 14,315

Cumulative Savings (GWh)

Achievable Low Potential 107 200 275 364

Achievable High Potential 244 441 582 741

Economic Potential 746 1,094 1,267 1,456

Technical Potential 984 1,428 1,692 1,980

Energy Savings (% of Baseline)

Achievable Low Potential 0.8% 1.4% 1.9% 2.5%

Achievable High Potential 1.8% 3.1% 4.1% 5.2%

Economic Potential 5.4% 7.8% 9.0% 10.2%

Technical Potential 7.1% 10.2% 12.0% 13.8%

Figure 6-1 Summary of Electric Energy SavingsElectric Energy Efficiency – Overall Results

EnerNOC Utility Solutions Consulting 6-3 

## Overview of Ener gy Efficiency Potential by Sector

Table 6-2 summarizes the range of electric achievable potential by sector. The commercial sector accounts for the largest portion of the savings, follo wed by residential, and then industrial.

Table 6-2 Electric Achievable Potential by Sector (GWh) 2014 2015 2016 2017

Achievable Low Savings (GWh)

Residential 36.9 75.5 95.7 114.8

Commercial 38.5 71.8 100.2 133.7

Industrial 31.2 52.4 79.4 115.5

Total 106.6 199.7 275.3 364.0

Achievable High Savings (GWh)

Residential 85.1 168.4 204.4 238.4

Commercial 88.2 158.3 212.5 272.0

Industrial 71.0 114.1 165.4 230.2

Total 244.3 440.8 582.3 740.6Energy Efficiency Potential By Sector

EnerNOC Utility Solutions Consulting 7-5 

### CHAPTER 7



## ENERGY EFFICIENCY POTENTIAL BY SECTOR

This chapter presents the results of the energy efficiency analysis at the sector level. First, the residential potential is presented, followed by the commercial, and lastly, industrial.



## Residential Electricity Potential

Figure 7-1 depicts the four types of potential for the residential electricity sector graphically.

Figure 7-1 Residential Electric Energy Efficiency Potential Savings



### 0% 2% 4% 6% 8% 10% 12% 14% 16%

2014 2015 2016 2017EnergySavings(%ofBaseline) 

### Achievable Potential Low

Achievable Potential High

Economic Potential

Technical Potential

The key measures comprising the potential are listed below:

x Lighting: mostly CFL lamps and specialty bulbs

x Electronics (reduce standby wattage, televisions, set top boxes, PCs)

x Second refrigerator/ freezer removal

x HVAC: Removal of second room AC unit, efficient air conditioners, ducting repair/sealing, insulation, home energy management system and programmable thermostatsEnergy Efficiency Potential By Sector

7-6 www.enernoc.com Figure 7-2 Residential Electric Achievable Low Potential by End Use in 2017



### Cooling

5% Heating

2% Water

Heating

1%

Interior
Lighting

62% Exterior
Lighting

8% Applianc

es

6% Electroni

cs

16%

Misc.

0%Energy Efficiency Potential By Sector

EnerNOC Utility Solutions Consulting 7-7 

## Commercial Electricity Potential

Figure 7-3 presents estimates for the four types of potential for the residential electricity sector.

Figure 7-3 Commercial Energy Efficiency Potential Savings

Figure 7-4 depicts these potential energy savings estimates graphically. The measures with the highest savings are:

x Lighting – CFLs, LED lamps, linear fluorescent, daylighting controls, occupancy sensors, and HID lamps for exterior lighting

x Energy management systems & programmable thermostats

x Ventilation – variable speed control

x Refrigeration – efficient equipment, control systems, decommissioning

x Efficient office equipment – computers, serversEnergy Efficiency Potential By Sector

7-8 www.enernoc.com Figure 7-4 Commercial Achievable Low Potential Electricity Savings by End Use in 2017

Cooling

18%

Heating

5%

Ventilation

9%

Water Heating

4%

Interior Lighting

36% Exterior Lighting

11% Refrigeration

10%

Food Preparation

1% Office

Equipment

6% Miscellaneous

0%Energy Efficiency Potential By Sector

EnerNOC Utility Solutions Consulting 7-9 

## Industrial Electricity Potential

The IPL industrial sector accounts for 37% of total energy consumption, making for prime efficiency opportunities. Figure 7-5 presents the savings for the various types of potential considered in this study.

Figure 7-5 Industrial Electric Potential Savings

Figure 7-6 illustrates the achievable potential savings by electric end use in 2017 for the industrial sector. The largest shares of savings opportunities are in the motors and machine drives. Potential savings for straight equipment change-outs are diminishing due to the National Electrical Manufacturer’s Association (NEMA) standards, which now make premium efficiency motors the baseline efficiency level. As a result, potential savings are incrementally small to upgrade to even more efficient levels. Many of the savings opportunities in this end use come from controls, timers, and variable speed driv es, which improve system efficiencies where motors

are utilized.

Beyond the replacement of motors, there are large opportunities for savings in cooling, lighting, process, ventilation, and finally space heating. Detail ed measure information is available in the Volume 3 Appendices. The key measures comp rising the potential are listed below:

x Motors – drives and controls

x Process – timers and controls

x Application optimization and cont rol – fans, pumps, compressed air

x Efficient high bay lighting

x Efficient ventilation systems

x Energy management systems & programmable thermostatsEnergy Efficiency Potential By Sector

7-10 www.enernoc.com Figure 7-6 Industrial Achievable Low Electricity Potential Savings by End Use in 2017EnerNOC Utility Solutions Consulting 8-1 

### CHAPTER 8



## ACTION PLAN

The Action Plan is the heart of the study. This is where the multitude of measures from the potential analysis gets bundled into delivery mechanisms to take on the form of specific energy efficiency programs. Several changes occur in the translation from the market potential assessment to the program designs in the Action Plan, as the measure mix may change due to program delivery considerations. Table 8-1 below lists the distinct programs that emerge from this exercise to deliver an effective and balanced po rtfolio of energy savings opportunities across all customer segments. More information on each program is available in Chapter 8 of the main report and the detailed write-ups in the Volume 4 Appendices.

Table 8-1 Portfolio of Energy Effi ciency Programs Included in Action Plan

Residential Programs Commercial & Industrial Programs

Electric Prescriptive Rebate Prescriptive Rebate

Income Qualified Weatherization Schools Program
Residential New Construction Strategic Energy Management

Multi Family Direct Install Retrocommissioning

Home Energy Assessment Business & Multi Family New Construction

School Kit  High Efficiency HVAC  Appliance Recycling 
Behavioral Feedback Tools 



## Programmatic Framework

Each program contemplates and outlines a programmatic framework for administrators and implementers. The items considered and developed for this framework include those listed below. Detailed write-ups delve into the specific recommendations for each program in Volume 4 of this report.

x Target market

x Implementation strategy, including delivery channels, marketing, education and outreach

x Program issues, risks and risk management strategies

x Eligible measures and incentives

x Evaluation, measurement and verification requirements and guidance

x Administrative requirements

x Estimated participation

x Program budget

x Program energy savings and demand reduction

x Cost effectiveness

x Synergies with other utilities and agencies (e.g., joint delivery)Action Plan

8-2 www.enernoc.com 

### A Note on Joint Delivery

Simultaneously addressing elect ric and natural gas energy savings is the most efficient and costeffective way to run efficiency programs. Toward this end, the state of Indiana is employing the progressive and forward-thinking concept of a statewide Therm Bank, which provides a straightforward mechanism to deliver joint electric and natural gas programs. In this paradigm, the electric utilities are already running eff iciency programs to comply with the state mandated targets. The natural gas utilities can participate and contribute to the energy savings without creating a duplicative, administrative cost structure simply by paying into the existing budget of the electric programs at an agreed-upon “dollars per therm saved” basis. The existing programs are expanded to include additional savings for both electric and natural gas measures, and the budgeted dollars stretch even further.

We analyze the programs in this portfolio first with the assumption that IPL and Citizens are taking advantage of this Therm Bank joint delivery mechanism where applicable, and second with the assumption that the two utilities deliver portfolios completely independently.



## Program Plans

After applying all the above delivery and cost st ructures, the recommended programs for the Action Plan resulted in estimated energy savings and budgets. This was the result of combining the Achievable High electric potentials for IPL with the Achievable Low natural gas potentials for

Citizens. This enables IPL to better aim for its aggressive state targets and for the slightly smaller company Citizens to better align with its budget capabilities.

Figure 8-1 shows the incremental en ergy savings achieved in each year of the study.

Figure 8-1 Net Incremental Energy Savings (MWh)



### Ͳ 50,000 100,000 150,000 200,000 250,000 300,000

2014 2015 2016 2017 Bus & MF NC

Bus RCx

Bus SEM

Bus Schools Program

Bus Custom Incentives

Bus Prescriptive

Res Behavioral Feedback Tools

Res Appliance Recycling

Res High Efficiency HVAC

Res School Kit

Res HEA

Res MF Direct Install

Res NC

Res IQW

Res Elec PrescriptiveAction Plan

EnerNOC Utility Solutions Consulting 8-3 Figure 8-2 below shows the annual budgets for the portfolio, first with the joint delivery structure

described above and second with a completely independent del ivery structure. This analysis assumes that the savings and portfolio would stay the same with joint delivery, but the budget would shrink by millions of dollars. Another possibility would be if the budget stayed the same and savings increased. Regardless, the ratio of savings to costs improves with joint delivery.

Figure 8-2 Annual Utility BudgetsAction Plan8-4www.enernoc.comTable 8-2 below shows the detailed annual savings and budgets for thejointlydelivered portfolio. Table 8-3 shows the same for theindependentlydelivered portfolio. Note that the only numbers in these two tables that are different are the budget numbers.

Table 8-2 IPL Jointly Delivered Electric Energy Efficiency Portfolio SummaryTotalUtilityCosts(000$)TotalIncrementalEnergySavings(MWh)TotalIncrementalDemandSavings(kW)Program201420152016201720142015201620172014201520162017ResElectricPrescriptive8422,4632,6892,93211,293*47,77546,75648,1317423,2773,2343,369ResIncomeQualifiedWeath.8731,1411,1441,1501,627*1,6261,5721,56179787474ResNewConstruction2423575492,8143,0223,542157146139ResMultifamilyDirectInstall1,9801,5051,5941,60210,4556,7706,6716,613345219211210ResHomeEnergyAssess.4891,2311,2351,2425,000*2,7642,6902,665186928888ResSchoolKit4845085115142,422*2,4412,3612,33374726867ResHighEfficiencyHVAC77911071201618192423252834ResApplianceRecycling9141,0131,1121,2114,1194,4044,6744,9331,3691,5211,6731,825ResBehavioralFeedbackTools7951,1251,3181,31850,348*59,80270,35570,35512,24514,54417,11117,111BusPrescriptive9,1652,7133,2063,65878,642*30,64034,06239,21612,4504,5734,8165,071BusCustomIncentives3,8168,93611,64713,93119,47848,82261,12175,3751,6643,9894,4024,661BusSchoolsProgram1465836467464722,4322,8823,39832143158171BusStrategicEnergyMgmt.50254960012,76814,04515,4501,7801,9582,154BusRetrocommissioning6708781,1676248161,056111Bus&MultifamilyNewConstr.2473575009501,3131,643316372378ResidentialTotal:6,4559,32010,06610,63685,280128,414138,120140,15615,06319,98522,63222,916BusinessTotal:13,12713,65117,28120,60198,59296,237114,239136,13714,14610,80111,70712,435PortfolioTotal:19,58222,97127,34731,238183,872224,650252,359276,29329,20930,78634,33935,351

*Asterisk in 2014 indicates already contracted amounts, with delivery subject to ultimate IPL and contractor arrangements.Action PlanEnerNOC Utility SolutionsConsulting8-5

Table 8-3 IPL Independently Delivered Electric Energy Efficiency Portfolio SummaryTotalUtilityCosts(000$)TotalIncrementalEnergySavings(MWh)TotalIncrementalDemandSavings(kW)Program201420152016201720142015201620172014201520162017ResElectricPrescriptive8422,4632,6892,93211,293*47,77546,75648,1317423,2773,2343,369ResIncomeQualifiedWeath.1,6722,2432,2462,2521,627*1,6261,5721,56179787474ResNewConstruction2814106332,8143,0223,542157146139ResMultifamilyDirectInstall2,2172,0592,1482,15710,4556,7706,6716,613345219211210ResHomeEnergyAssess.7512,0562,0602,0675,000*2,7642,6902,665186928888ResSchoolKit7527887917942,422*2,4412,3612,33374726867ResHighEfficiencyHVAC1351651972221618192423252834ResApplianceRecycling9141,0131,1121,2114,1194,4044,6744,9331,3691,5211,6731,825ResBehavioralFeedbackTools1,2151,7252,0232,02350,348*59,80270,35570,35512,24514,54417,11117,111BusPrescriptive9,5373,0203,5544,05578,642*30,64034,06239,21612,4504,5734,8165,071BusCustomIncentives4,0189,39212,29214,74919,47848,82261,12175,3751,6643,9894,4024,661BusSchoolsProgram1646166938034722,4322,8823,39832143158171BusStrategicEnergyMgmt.64570477012,76814,04515,4501,7801,9582,154BusRetrocommissioning7159561,2836248161,056111Bus&MultifamilyNewConstr.3305007389501,3131,643316372378ResidentialTotal:8,49812,79413,67614,29085,280128,414138,120140,15615,06319,98522,63222,916BusinessTotal:13,72014,71818,70022,39798,59296,237114,239136,13714,14610,80111,70712,435PortfolioTotal:22,21727,51232,37636,686183,872224,650252,359276,29329,20930,78634,33935,351 *Asterisk in 2014 indicates already contracted amounts, with delive ry subject to ultimate IPL and contractor arrangements.EnerNOC Utility Solutions Consulting 8-1 

## Cost Effectiveness

Given savings and budgets, we can perform the industry standard cost-effectiveness tests to gauge the economic merits of the portfolio. Each test compares the benefits of the EE programs to their costs with its own unique perspectives and definitions, all defined in terms of net present value of future cash flows. The definitions for the four standard tests most commonly used by program designers are described below.

x Total Resource Cost test (TRC). The benefits in this test are the lifetime avoided energy costs and avoided capacity costs. The costs in this test are the incremental measure costs plus all administrative costs spent by the program administrator.

x Utility Cost Test (UCT). The benefits in this test are the lifetime avoided energy costs and avoided capacity costs, the same as the TRC benefits. The costs in this test are the program

administrator’s incentive costs and administrative costs.

x Participant Cost Test (PCT). The benefits in this test are the lifetime value of retail rate savings (which is another way of saying “lost utility revenues”). The costs in this test are those seen by the participant; in other words: the incremental measure costs minus the value of incentives paid out.

x Rate Impact Measure test (RIM). The benefits of the RIM test are the same as the TRC benefits. The RIM costs are the same as the UCT, except for the addition of lost revenue. This test attempts to show the effects that EE prog rams will have on rates, which is almost always to raise them on a per unit basis. Thus, costs typically outwei gh benefits from the point of view of this test, but the assumption is that absolute energy use decreases to a greater extent than per-unit rates are increased — resulting in lower average utility bills.

The cost effectiveness results for the relevant com binations of program delivery are presented below in the tables. Table 8-4 shows the cost effectiveness for the combined electric and gas portfolio, jointly delivered, wi th an overall TRC of 1.30. The IP L share of this combined portfolio

is shown in Table 8-5 with a TRC ratio of 1.41.

However, with independent delivery of the same portfolio, IPL would have to spend more money to make up for the funds not received from Citizens through the Therm Bank, dropping the TRC ratio for IPL’s share of the same portf olio from 1.41 to 1.31 in Table 8-6.

Table 8-4 Combined Joint Delivery-Cost effectiveness summary

TRC Ratio TRC Benefits TRC Costs UCT Ratio PCT Ratio RIM Ratio

Res Electric Prescriptive 2.27 $30,853,832 $13,610,04 8 4.19 6.21 0.67

Res Natural Gas Prescriptive 0.25 $438,638 $1,738,38 4 0.46 0.89 0.27

Res Income Qualified Weath. 0.83 $4,561,673 $5,518,88 0 0.83  Ͳ 0.36

Res New Construction 1.10 $2,322,318 $2,119,00 4 2.18 2.98 0.55

Res Multifamily Direct Install 1.33 $11,779,567 $8,888,70 4 1.33  Ͳ 0.45

Res Home Energy Assessment 1.05 $7,360,65 4 $6,993,76 3 1.05  Ͳ 0.40

Res School Kit 1.62 $4,805,987 $2,969,34 4 1.62  Ͳ 0.46

Res High Efficiency HVAC 0.39 $427,159 $1,102,36 7 0.83 1.01 0.38

Res Appliance Recycling 1.09 $3,880,022 $3,553,54 3 1.09  Ͳ 0.55

Res Behavioral Feedback Tools 1.50 $11,443,91 4 $7,654,52 7 1.50  Ͳ 0.52

Bus Prescriptive 1.52 $76,617,536 $50,355,26 3 3.38 3.14 0.70

Bus Custom Incentives 1.13 $81,173,35 4 $71,811,65 0 2.32 2.78 0.59

Bus Schools Program 0.75 $3,516,008 $4,716,32 5 1.62 1.82 0.52

Bus Strategic Energy Management 2.21 $5,820,021 $2,634,15 1 2.21  Ͳ 0.58

Bus Retrocommissioning 0.23 $1,120,531 $4,958,24 5 0.49 0.60 0.29

Bus & Multifamily New Construction 1.02 $3,025,40 4 $2,976,90 9 2.30 1.93 0.67

Portfolio Total: 1.30 $249,146,617 $191,601,10 6 2.23 3.89 0.59Action Plan

EnerNOC Utility Solutions Consulting 8-2 Table 8-5 IPL Joint Delivery-Cost effectiveness summary

TRC Ratio TRC Benefits TRC Costs UCT Ratio PCT Ratio RIM Ratio

Res Electric Prescriptive 2.27 $30,853,832 $13,610,04 8 4.19 6.21 0.67

Res Natural Gas Prescriptive

Ͳ $ 0 $ 0

ͲͲͲ

Res Income Qualified Weath. 0.39 $1,413,779 $3,605,94 3 0.39  Ͳ 0.26

Res New Construction 1.12 $2,065,152 $1,842,26 3 2.22 2.99 0.56

Res Multifamily Direct Install 1.28 $7,197,619 $5,641,21 7 1.28  Ͳ 0.47

Res Home Energy Assessment 0.86 $3,009,656 $3,482,07 2 0.86  Ͳ 0.40

Res School Kit 1.32 $2,238,659 $1,694,85 1 1.32  Ͳ 0.47

Res High Efficiency HVAC 0.11 $77,17 0 $698,49 9 0.23 0.08 0.21

Res Appliance Recycling 1.09 $3,880,022 $3,553,54 3 1.09  Ͳ 0.55

Res Behavioral Feedback Tools 2.45 $9,304,418 $3,793,66 2 2.45  Ͳ 0.65

Bus Prescriptive 1.87 $66,350,607 $35,571,90 5 4.12 3.61 0.77

Bus Custom Incentives 1.17 $75,361,496 $64,598,18 8 2.39 2.82 0.60

Bus Schools Program 0.79 $3,006,766 $3,801,44 7 1.72 1.84 0.54

Bus Strategic Energy Management 3.42 $4,619,086 $1,349,19 0 3.42  Ͳ 0.70

Bus Retrocommissioning 0.19 $909,968 $4,779,07 8 0.41 0.50 0.26

Bus & Multifamily New Construction 0.99 $1,999,205 $2,019,68 4 2.23 1.51 0.77

Portfolio Total: 1.41 $212,287,43 6 $150,041,58 9 2.52 3.80 0.64

Table 8-6 IPL Independent Delivery-Cost effectiveness summary

TRC Ratio TRC Benefits TRC Costs UCT Ratio PCT Ratio RIM Ratio

Res Electric Prescriptive 2.27 $30,853,832 $13,610,04 8 4.19 6.21 0.67

Res Natural Gas Prescriptive

Ͳ $ 0 $ 0

ͲͲͲ

Res Income Qualified Weath. 0.53 $1,413,779 $2,643,35 9 0.53  Ͳ 0.31

Res New Construction 1.27 $2,065,152 $1,628,40 2 2.41 3.54 0.58

Res Multifamily Direct Install 1.18 $7,197,619 $6,101,68 7 1.18  Ͳ 0.45

Res Home Energy Assessment 0.90 $3,009,656 $3,332,41 4 0.90  Ͳ 0.41

Res School Kit 1.15 $2,238,659 $1,939,55 6 1.15  Ͳ 0.45

Res High Efficiency HVAC 0.62 $77,17 0 $124,32 6 0.74 1.55 0.57

Res Appliance Recycling 1.09 $3,880,022 $3,553,54 3 1.09  Ͳ 0.55

Res Behavioral Feedback Tools 1.24 $9,304,418 $7,503,22 0 1.24  Ͳ 0.52

Bus Prescriptive 1.55 $66,350,607 $42,697,72 0 3.39 3.04 0.74

Bus Custom Incentives 1.13 $75,361,496 $66,534,29 9 2.29 2.77 0.60

Bus Schools Program 0.69 $3,006,766 $4,373,56 2 1.50 1.60 0.52

Bus Strategic Energy Management 1.75 $4,619,086 $2,636,90 1 1.75  Ͳ 0.59

Bus Retrocommissioning 0.21 $909,968 $4,260,42 8 0.46 0.56 0.28

Bus & Multifamily New Construction 1.36 $1,999,205 $1,471,34 3 2.84 2.20 0.83

Portfolio Total: 1.31 $212,287,43 6 $162,410,80 8 2.28 3.61 0.62EnerNOC Utility Solutions Consulting 9-1 

### CHAPTER 9



## CONCLUSIONS AND RECOMMENDATIONS

The results of this study reveal that significant energy efficiency opportunities exist for IPL in the Indianapolis metro area, despite a challenging macroeconomic environment and aggressive appliance and efficiency standards.

Our program analysis shows that IPL can achieve incremental electric energy savings of 183,872 MWh in 2014, increasing to 276,359 MWh in 201 7, by implementing the programs and measures presented in this report. This assumes the highest levels of program participation and realization developed from our range of achievable potential in the market potential assessment.

IPL’s energy-efficiency programs are relatively yo ung compared to other programs in the nation, but have made significant impacts already and are building appreciable market momentum. Based on our market potential assessment and program design analysis, EnerNOC provides the following high-level recommendations for the portfolio. We fully expect that IPL, the stakeholders, and the implementers will consider the plans and recommendations in this report now, at the outset of the forthcoming implementation cycle; and that they will adopt the elements that are appropriate, adjust the elements that fit differently when translated into the trenches and front lines of program delivery, and continue to revisit the report as a reference throughout the next years as situations and markets continue to change and evolve.



## General Recommendations

x Deliver electric and natural gas programs jointly when possible: Indiana’s concept of a statewide Therm Bank provides an excellent platform to deliver joint electric and natural gas programs on a straightforward and high ly cost-effective basis. In this paradigm, IPL would bolster their programs with measures that achieve natural gas savings as well as electric savings. In return, IPL would receive payments on an agreed-upon “dollars per therm saved” basis from Citizens. Meanwhile, Citizens would be empowered to participate and contribute to the energy savings without creating a duplicative, administrative cost structure. We estimated budgets and delivery structures for programs delivered both jointly and independently, and joint delivery results in cost savings of $21 million through 2017, increasing cost effectiveness of the portfolio by 8% versus independent delivery.

x Increase focus on non-residential programs: Our study shows that a large portion of the program savings from energy efficiency efforts will come from the commercial and industrial sectors. Historically, the majority of IPL budgets and savings have been focused on residential programs. IPL should consider increasing program efforts in the C&I sectors, not only to harvest larger EE savings, but to increase business competitiveness and decrease operating costs for customers. Additionally, these sectors offer larger projects, which can be

attained and bundled more read ily and efficiently.

x Continued collaboration among stakeholders: The discourse and information sharing between stakeholders, utilities, and EnerNOC on this study has been effective and transparent. Continuing this trend is of paramount importance to the future success of programs. It is essential to cultivate a mutual understanding of the dynamic nature of the energy efficiency industry due to its intrinsic linkage with human behavior and the customer mind. Ongoing interactions should be marked by an understanding of collaboration, flexibility, and continuous improvement.Conclusions and Recommendations

9-2 www.enernoc.com 

## Residential Recommendations

x Focus on lighting: The largest share of achievable energy efficiency potential in the residential sector continues to come from CFLs. This is in spite of the forthcoming EISA standards that will reduce their per-unit savi ngs compared to the new baseline. Also, IPL should focus strong attention on specialty lamps, as they are not affected by the EISA

standard.

x Implement and monitor behavioral feedback programs: The behavioral modification program to be implemented by OPower is shown in the program plans to comprise a full 27% of IPL’s portfolio savings. For both IPL and Citizens, this is an excellent opportunity, as it lends itself well to joint electric and natural gas delivery. This initiative was added at the program design stage, and was not included in our bottom-up, measure level potential analysis. This is due to the fact that it is not a specific action or piece of equipment, per se, as well as the fact that it does not go through the typical customer-choice model that other measures encounter. The program is simply delivered to as many participants as the planners desire, and produces a statistically measur ed energy reduction effect in a treatment group (vs. a control group that does not receive the program treatment). It should be monitored carefully, however, as it is a new and emerging opportunity. Relatively little is known about the specific actions that customers perform to reduce their energy usage in this program, and it may undergo meaningful change in customer responsiveness and evaluation paradigms in the coming years. Additionally, savings under this program will not persist after the program is ended, and must be continually renewed each year with additional cost and effort, whereas the savings from a capital equipment measure can last 10 to 20 years. This makes for relatively low-cost energy savings when considered on a first-year basis, but relatively high-cost energy savings on a lifetime or levelized cost basis.

x Develop deeper, follow-on measures in existing programs: Some current IPL program delivery structures are pursuing low-cost meas ures through high volumes of rapid customer touches, such as the multifamily direct install progr am. We have recommended the addition of more deep, involved measures in 2015 and beyond to capitalize on customer touches asmuch as possible. While you are in the home of a customer, it makes better sense to crosssell these other measures and harvest as many energy savings as you can. This would include major equipment replacements and shell measures such as duct sealing and

insulation.

x Consider social media avenues for targeted program delivery: As internet social media paradigms become the norm in to day’s wired society, companies like Groupon, Amazon Local Deals, and Living Social have assembled a nationwide network of businesses into a well-oiled, rebate-issuing machine. IPL should consider if there are opportunities to link their energy efficiency trade ally network to one of these companies to facilitate the target marketing, processing, and delivery of rebates. These vendors have sophisticated tracking systems and databases that may facilitate EM&V reporting on the back end as well.



## Commercial & Industrial Recommendations

x Aggressively pursue lighting savings: The commercial sector in particular has significant savings potential in lighting equipment, both interior and exterior. Notably, LED lamps are showing as cost effective in the commercial sector due to aggressive forecasts of cost reductions, as well as higher hours of operation than their non-economic counterparts in residential settings. Savings are also available through occupancy sensors, timers, and energy management systems. IPL should strongly pursue lighting savings to accelerate the phase out of T12 fluorescent lighting. In particular, program efforts can help intercept building operators before they make purchase and stocking decisions that could lead to the hoarding of T12 lamps.

x Focus industrial program efforts on motor controls and system optimizations : The savings for the industrial sector are all about control and optimization of motors andConclusions and Recommendations

EnerNOC Utility Solutions Consulting 9-3 processes. Low-cost retrofits can often have signifi cant energy impacts with minimal disruption of (and often times improvement of) business processes.

x Target niches with segment specific programs : There are specific business segments that offer considerable savings potential, but will not typically be reached by standard rebates and generic business programs. Consider in itiating specifically tar geted sub-programs within business standard and custom for areas such as: hotels and lodging, food preparation equipment in restaurants, and refrigeration equipment in grocery stores.

x Implement new programs: We have identified additi onal programs that show promise to expand IPL’s portfolio of programs to address Indiana’s aggressive statewide savings goals. These programs are as follows:

1. Strategic Energy Management . For large customers, SEM initiatives can deliver substantial savings over long time horizons. This means coming alongside the larger customers to create a customized, multi-year plan, identify metrics, set goals, and provide technical assistance and attention from dedicated account executives or energy coaches.

2. Retro-commissioning . This program involves the initial, periodic, or continual monitoring and commissioning of building energy systems such as heating, cooling, ventilation, and lighting in order to optimize energy consumption relative to actual building usage.

3. Residential, Business, and Multifamily New Construction . A program to encourage more rapid adoption of efficient building design practices would be a very relevant addition to the IPL portfolio, especially one that includes the ty pes of multi-unit, multi-family buildings and complexes that are so prevalent in the Indianapolis metropolitan area. This is a somewhat hybrid market, co ntaining many aspects of both residential and commercial construction, and would benefit from a specialized program targeting the particular market needs.About EnerNOC Utility Solutions Consulting

EnerNOC Utility Solutions Consulting is part of EnerNOC Utility Solutions group, which

provides a comprehensive suite of deman d-side management (DSM) services to

utilities and grid operators worldwide. Hundreds of utilities have leveraged our

technology, our people, and our proven processes to make their energy efficiency

(EE) and demand response (DR) initiatives a success. Utilities trust EnerNOC to work

with them at every stage of the DSM program lifecycle – assessing market potential,

designing effective programs, implementing those programs, and measuring program

results.

EnerNOC Utility Solutions delivers value to our utility clients through two separate

practice areas – Program Implementation and EnerNOC Utility Solutions Consulting.

• Our Program Implementation team leverages EnerNOC’s deep “behind-the-meter

expertise” and world-class technology platform to help utilities create and

manage DR and EE programs that deliver reliable and cost-effective energy

savings. We focus exclusively on the commercial and industrial (C&I) customer

segments, with a track record of successful partnerships that spans more than a

decade. Through a focus on high quality, measurable savings, EnerNOC has

successfully delivered hundreds of thousands of MWh of energy efficiency for

our utility clients, and we have thousands of MW of demand response capacity

under management.

• The EnerNOC Utility Solutions Consulting team provides expertise and analysis

to support a broad range of utility DSM activities, including: potential

assessments; end-use fo recasts; integrated resource planning; EE, DR, and

smart grid pilot and program design and administration; load research;

technology assessments and demonstrations; evaluation, measurement and

verification; and regulatory support.

The EnerNOC Utility Solutions Consulting team has decades of combined experience

in the utility DSM industry. The staff is comprised of professional electrical,

mechanical, chemical, civil, industrial, and environmental engineers as well as

economists, business planners, project managers, market researchers, load research

professionals, and statisticians. Utilities view our experts as trusted advisors, and we

work together collaboratively to make any DSM initiative a success.EnerNOC Utility Solutions Consulting v 

### Energy Efficiency Market Potential Study and

Action Plan

Volume 2: Report

Report Number 1415

EnerNOC Utility Solutions Consulting 500 Ygnacio Valley Road

Suite 450 Walnut Creek, CA 94596

Tel: 925.482.2000

www.enernoc.com Prepared for : Indianapolis Power & Light Company Prepared by: EnerNOC, Inc. Presented on : Dec 21, 2012EnerNOC Utility Solutions Consulting vii This report was prepared by

EnerNOC Utility Solutions Consulting 500 Ygnacio Valley Blvd., Suite 450 Walnut Creek, CA 94596

Project Director: I. Rohmund Project Manager: D. CostenaroEnerNOC Utility Solutions Consulting ix 

## CONTENTS

10 INTRODUCTION.................................................................................................. 10-1
Background .............................................................................................................. 10-1

Report Organ ization................................................................................................... 10-1

Definitions of Potenti al............................................................................................... 10-1

Abbreviations and Acronyms ...................................................................................... 10-2

11 ANALYSIS APPROACH AND DATA DEVELOPMENT.............................................. 11-1
Analysis A pproach ..................................................................................................... 11-1

LoadMAP Model............................................................................................. 11-2

Market Characte rization ................................................................................. 11-3

Market Profiles .............................................................................................. 11-7

Baseline Fo recast........................................................................................... 11-8 Energy Efficiency Measure Analysis ................................................................. 11-8 Energy-Efficiency Potenti al ............................................................................11-12

Action Plans .................................................................................................11-12

Alternative Avoided Cost Scenario ..................................................................11-12

Conclusions and Recomm endations................................................................11-13
Data Development....................................................................................................11-13

Data Sources................................................................................................11-13 Data Applicatio n ...........................................................................................11-15

12 MARKET CHARACTERIZATION AND MARKET PROFILES .................................... 12-1

Energy Use Su mmary ................................................................................................ 12-1

Residential Se ctor...................................................................................................... 12-1

Commercial Sector .................................................................................................... 12-7

Industrial Secto r.......................................................................................................12-13

13 BASELINE FORECAST .......................................................................................... 13-1

Residential Se ctor...................................................................................................... 13-1

Commercial Sector .................................................................................................... 13-4

Industrial Secto r........................................................................................................ 13-7

Baseline Forecast Summary........................................................................................ 13-8

14 ENERGY EFFICIENCY MEASURES........................................................................ 14-1
List of Energy Efficiency Measures .............................................................................. 14-1

Results of the Econ omic Screen.................................................................................. 14-1

15 ELECTRIC ENERGY EFFICIENCY – OVERALL RESULTS ....................................... 15-1
Overview of Energy Efficiency Poten tial by Sector ........................................................ 15-2

16 ENERGY EFFICIENCY POTENTIAL BY SECTOR.................................................... 16-1
Residential Electricity Potential ................................................................................... 16-1x www.enernoc.com Residential Electric Potenti al by Marke t Segment...............................................16-2

Residential Electric Potential by End Use...........................................................16-4
Commercial Electricity Pot ential...................................................................................16-6

Commercial Electric Potential by Market Segment..............................................16-8

Commercial Electric Potential by End Use .........................................................16-9
Industrial Electricity Pot ential ....................................................................................16-11

Industrial Electric Potential by Market Se gment...............................................16-13

Industrial Electric Potential by End Use...........................................................16-13

17 ACTION PLAN........................................................................................................ 8-1

Programmatic Fr amework ............................................................................................ 8-1

A Note on Joint Delivery ................................................................................... 8-2
Program Plan s ............................................................................................................ 8-2

Residential Pr ograms ......................................................................................17-7

Commercial & Industrial Pr ograms .................................................................17-10

Cost Effectivenes s ....................................................................................................... 8-1

18 ALTERNATE AVOIDED COST SCENARIO ............................................................. 18-1
High Gas Pr ice ...........................................................................................................18-1

Low Gas Pr ice ............................................................................................................18-1

CO2 Legislatio n..........................................................................................................18-2

New Build of CCGT .....................................................................................................18-2

19 CONCLUSIONS AND RECOMMENDATIONS........................................................... A-1

General Recomme ndations........................................................................................... A-1

Residential Recommend ations ...................................................................................... A-2

Commercial & Industrial Recommenda tions................................................................... A-2EnerNOC Utility Solutions Consulting xi 

## LIST OF FIGURES

Figure 2-1 LoadMAP Analysis Framework ........................................................................... 11-3

Figure 2-2 Approach for Measure Assessment..................................................................... 11-9

Figure 3-1 Sector-Level Electricity Use, 2011 ...................................................................... 12-1

Figure 3-2 Residential Electricity by End Use (2011), All Homes............................................ 12-5

Figure 3-3 Residential Electricity Intensity by End Use and Segment (kWh/household, 2011).. 12-6

Figure 3-4 Breakdown of Residential Electricity Use by End Use and Segment (2011)............. 12-7

Figure 3-5 Commercial Market Segmentation by Building Type – Percentage of Floor Space and Energy Use ...................................................................................................... 12-8

Figure 3-6 Commercial Electricity Consumption by End Use (2011), All Building Types ..........12-10

Figure 3-7 Commercial Electricity Intensity by End Use and Segment (kWh/SqFt, 2011).......12-11

Figure 3-8 Commercial Electricity Usage by End Use Segment (GWh, 2011 ) .........................12-11

Figure 3-9 Commercial Electricity Use by End Use and Segment ( 2011) ...............................12-12

Figure 3-10 Industrial Market Segmentation – Percentage of Employees and Energy Use........12-14

Figure 3-11 Industrial Electricity Use by En d Use (2011), All Industries..................................12-16

Figure 3-12 Industrial Electricity Consumption by End Use and Segment (GWh, 2011)............12-16

Figure 3-13 Percentage of Industrial Electricity Use by End Use and Segment (2011) ............12-17

Figure 4-1 Residential Electricity Baselin e Forecast by End Use............................................ 13-2

Figure 4-2 Residential Baseline Electricity Use per Household by End Use ............................ 13-2

Figure 4-3 Commercial Electricity Baseline Forecast by End Use .......................................... 13-5

Figure 4-4 Industrial Electricity Baselin e Forecast by End Use ............................................. 13-7

Figure 4-5 Electricity Baseline Forec ast Summary (G Wh) ....................................................... 4-4

Figure 6-1 Summary of Electric Energy Sa vings ................................................................. 15-1

Figure 6-2 Electric Potentials Forec asts (G Wh)................................................................... 15-2

Figure 6-3 Achievable Low Electric Potential by Sector (GWh) .............................................. 15-3

Figure 6-4 Achievable High Electric Potential by Sector (G Wh) ............................................. 15-3

Figure 7-1 Residential Electric Energy Efficiency Potential Sa vings ....................................... 16-2

Figure 7-2 Residential Electric Achievable Low Po tential by End Use in 2017......................... 16-5

Figure 7-3 Commercial Energy Efficiency Potential Savings ................................................. 16-7

Figure 7-4 Commercial Achievable Low Potential Electricity Savings by End Use in 2017.......16-11

Figure 7-5 Industrial Electric Poten tial Savings..................................................................16-12

Figure 7-6 Industrial Achievable Low Electricity Potential Savings by End Use in 2017..........16-15

Figure 8-1 Net Incremental Energy Savings (MWh) ............................................................... 8-2

Figure 8-2 Annual Utility Budgets ......................................................................................... 8-3EnerNOC Utility Solutions Consulting xiii 

## LIST OF TABLES

Table 1-1 Explanation of Abbrevia tions and Acro nyms........................................................ 10-3

Table 2-1 Overview of Segmentation Scheme for Potentials Modeling.................................. 11-4

Table 2-2 Residential Electric End Uses and Techno logies................................................... 11-5

Table 2-3 Commercial Electric End Us es and Technologies.................................................. 11-6

Table 2-4 Industrial Electric End Us es and Techn ologies..................................................... 11-7

Table 2-5 Sample Equipment Measures for Central Air Conditioning – Single Family Home ...11-10

Table 2-6 Sample Non-Equipment Measures – Sing le Family Home, Ex isting .......................11-11

Table 2-7 Economic Screen Results for Selected Residential Equipment Measures................11-12

Table 2-8 Data Applied for the Market Pro files..................................................................11-15

Table 2-9 Data Needs for the Baseline Forecast and Potentials Estimation in LoadMAP.........11-16

Table 2-10 Residential Electric Equipment Sta ndards Applicable to Indiana ...........................11-20

Table 2-11 Commercial Electric Equipment Stand ards Applicable to Indiana..........................11-21

Table 2-12 Data Needs for the Measur e Characteristics in LoadMAP .....................................11-20

Table 3-1 Residential Sector Energy Usage and Intensity by Segment Type, 2011 ................ 12-2

Table 3-2 Electric Market Profile for the Residential Single Family Sector.............................. 12-3

Table 3-3 Residential, Multi Family Electric Market Profile ................................................... 12-4

Table 3-4 Residential Electricity Use by End Use and Segment (kWh/HH/year, 2011)............ 12-6

Table 3-5 Commercial Electricity Use by End Use and Segment (kWh/HH/year, 2011)........... 12-8

Table 3-6 Commercial Sector Co mposite Electric............................................................... 12-9

Table 3-7 Commercial Electricity Consumption by End Use (GWh , 2011).............................12-12

Table 3-8 Industrial Market Segmentation by Industry Type, Base Year 2011......................12-13

Table 3-9 Industrial Sector Composite Electric Market Profile , 2011 ....................................12-15

Table 3-10 Industrial Electricity Use by En d Use and Segment (G Wh, 2011)..........................12-17

Table 4-1 Residential Electricity Consum ption by End Use (GWh) ........................................ 13-1

Table 4-2 Residential Electricity Baseline Forecast by End Use and Technology (GWh) .......... 13-3

Table 4-3 Commercial Electricity Consumption by End Use (GWh)....................................... 13-4

Table 4-4 Commercial Baseline Electricity Forecast by End Use and Technology ( GWh)........ 13-6

Table 4-5 Industrial Electricity Consum ption by End Us e (GWh) .......................................... 13-7

Table 4-6 Electricity Baseline Forec ast Summary (G Wh) ....................................................... 4-4

Table 5-1 Number of Measur es Evaluated ......................................................................... 14-1

Table 6-1 Summary of Electric Energ y Efficiency Potenti al .................................................. 15-1

Table 6-2 Electric Achievable Potenti al by Sector (GWh)..................................................... 15-2

Table 7-1 Electricity Energy Efficiency Potential for the Resident ial Sector............................ 16-1

Table 7-2 Residential Electric Potenti al by Market Segm ent, 2017........................................ 16-2

Table 7-3 Residential Electric Achievable Low Potential by End Use and Market Segment, 2017(GWh) ...................................................................................................... 16-3

Table 7-4 Residential Electric Savings by End Us e and Potential Type (GWh)........................ 16-4

Table 7-5 Electricity Efficiency Potential for the Commercial Sector...................................... 16-6

Table 7-6 Commercial Electric Potential by Market Segmen t, 2017 ...................................... 16-8xiv www.enernoc.com Table 7-7 Commercial Electric Achievable Low Potential by End Use and Market Segment, 2017 (GWh)............................................................................................................. 16-9

Table 7-8 Commercial Potential by End Use and Potential Type (GWh) ...............................16-10

Table 7-9 Electric Efficiency Potential for the Industrial Sector ...........................................16-12

Table 7-10 Industrial Electric Potential by Market Segm ent, 2017.........................................16-13

Table 7-11 Industrial Electric Achievable Potential Low by End Use and Market Segment, 201716-13

Table 7-12 Industrial Electric Potential by End Use and Potential Type (GWh) .......................16-14

Table 8-1 ortfolio of Energy Efficiency Progra ms Included in Action Plan................................ 8-1

Table 8-2 Electric Joint Delivery Methodology.................................................................... 17-2

Table 8-3 IPL Jointly Delivered Electric Energy Efficiency Portfolio Summary .......................... 8-4

Table 8-4 IPL Independently Delivered Electric Energy Efficiency Portfolio Summary............... 8-5

Table 8-5 Combined Joint Delivery-C ost effectiveness summary............................................ 8-1

Table 8-6 IPL Joint Delivery-Cost effectiveness summary...................................................... 8-2

Table 8-7 IPL Independent Delivery-Cost effe ctiveness summar y .......................................... 8-2

Table 9-1 Alternate Avoided Cost Scenario, Count of Measures Passing Economic Screen Error! Bookmark not d e
Table 9-2 Alternate Avoided Cost Scenario, 2017 Achievable Low Potential (GWh savings) Error! Bookmark not d

Table 9-3 Alternate Avoided Cost Scenario, Count of Measures Passing Economic Screen Error! Bookmark not d e Table 9-4 Alternate Avoided Cost Scenario, 2017 Achievable Low Potential (GWh savings) Error! Bookmark not defi n Table 9-5 Alternate Avoided Cost Scenario, Count of Measures Passing Economic Screen Error! Bookmark not defin e Table 9-6 Alternate Avoided Cost Scenario, 2017 Achievable Low Potential (GWh savings) Error! Bookmark not defi n Table 9-7 Alternate Avoided Cost Scenario, Count of Measures Passing Economic Screen Error! Bookmark not defin e
Table 9-8 Alternate Avoided Cost Scenario, 2017 Achievable Low Potential (GWh savings) Error! Bookmark not defi nEnerNOC Utility Solutions Consulting 10-1 

## INTRODUCTION

Background

Energy efficiency (EE) efforts are increasing in magnitude and gaining traction in Indiana, building on the momentum of recently established statewide electric energy efficiency targets and simultaneous efforts to engage natural gas energy efficiency programs. Indianapolis Power and Light Company (IPL) is investigating the electric energy efficiency potential for their service territory. The findings of this investigation will lead directly into the development of a portfolio of energy efficiency programs to be delivered to customers over the time period 2014 to 2017.

Toward this end, IPL has contracted with EnerNOC Utility Solutions (EnerNOC) to conduct a Market Potential Study and assemble an Action Plan that considers all metered electric customers in the residential, commercial, and in dustrial sectors for this time period. Citizens Energy Group (Citizens) is also a party to this contract, conducting a corresponding study and action plan for natural gas customers in their largely overlapping service territory.

EnerNOC conducted a detailed, bottom-up assessment of the IPL market in the IPL metropolitan area to deliver forecasts of electric energy use, forecasts of the energy savings achievable through efficiency measures, and program desi gns and strategies to optimally deliver those savings. This report describes the study approach and results.



## Report Organization

This report is presented in 4 volumes as outlined below. This document is Volume 2: Market

Potential and Action Plans

.

x Volume 1, Executive Summary

x Volume 2, Report

x Volume 3, Market Potential Study Appendices

x Volume 4, Action Plan Appendices: Detailed Program Write-ups



## Definitions of Potential

In this study, we estimate the potential for energy efficiency savings. The savings estimates represent net savings 4 developed into three types of potential: technical potential, economic potential, and achievable potential. Technical and economic potential are both theoretical limits to efficiency savings. Achievable potential embodies a set of assumptions about the decisions consumers make regarding the efficiency of the equipment they purchase, the maintenance activities they undertake, the controls they use for energy-consuming equipment, and the elements of building construction. Because estimating achievable potential involves the inherent uncertainty of predicting human behaviors and responses to market conditions, we developed low and high achievable potential as boundaries for a likely range. The various levels are

described below.

x Technical potential is defined as the theoretical upper limit of energy efficiency potential. It assumes that customers adopt all feasible measures regardless of their cost. At the time of existing equipment failure, customers replace their equipment with the most efficient option

4 Savings in “net” terms instead of “gross” means that the baseline forecast includes naturally occurring efficiency. In other w ords, the baseline assumes that natural early adopters continue to make purchases of equipment and measures at efficiency levels higher t han

the minimum standard. 

### CHAPTER 10Introduction

10-2 www.enernoc.com available. In new construction, customers and developers also choose the most efficient equipment option. Examples of measures that make up technical potential for electricity in

the residential sector include:

o Ductless mini-split air conditioners with variable refrigerant flow

o Ground source (or geothermal) heat pumps

o LED lighting

Technical potential also assumes the adoption of every other available measure, where applicable. For example, it includes inst allation of high-efficiency windows in all new construction opportunities and furnace maintenance in all existing buildings with furnace systems. These retrofit measures are phased in over a number of years, which is longer for higher-cost and complex measures.

x Economic potential represents the adoption of all cost-effective energy efficiency measures. In this analysis, the cost effectiveness is measured by the total resource cost (TRC) test, which compares lifetime energy and capacity benefits to the incremental cost of the measure. If the benefits outweigh the costs (that is, if the TRC ratio is greater than 1.0), a given measure is considered in the economic potential. Customers are then assumed to purchase the most cost-effective option applicable to them at any decision juncture.

x Achievable High potential estimates customer adoption of economic measures when delivered through efficiency programs under ideal market, implementation, and customer preference conditions. Information channels are assumed to be established and efficient for marketing, educating consumers, and coordinating with trade allies and delivery partners. Achievable High potential establishes a maximum target for the EE savings that an administrator can hope to achieve through its EE programs and involves incentives that represent a substantial portion of the incremental cost combined with high administrative and marketing costs.

x Achievable Low potential reflects expected program participation given significant barriers to customer acceptance, non-ideal implementation conditions, and limited program budgets. This represents a lower bo und on achievable potential.



## Abbreviations and Acronyms

Throughout the report we use several abbreviations and acronyms. Table 10-1 shows the abbreviation or acronym, along with an explanation.Introduction

EnerNOC Utility Solutions Consulting 10-3 Table 10-1 Explanation of Abbreviations and Acronyms

Acronym Explanation

ACS American Community Survey

AEO Annual Energy Outlook forecast developed annual by the Energy Information

Administration of the DOE

AHAM Association of Home Appliance Manufacturers B/C Ratio Benefit to cost ratio

BEST EnerNOC’s Building Energy Simulation Tool

CAC Citizens Action Coalition of Indiana
CAC Central air conditioning

C&I Commercial and industrial

CFL Compact fluorescent lamp

DEEM EnerNOC’s Database of Energy Efficiency Measures

DEER State of California Database for Energy

Ͳ Efficient Resources

DSM Demand side management

DR Demand response

EE Energy efficiency

EIA Energy Information Administration

EISA Energy Efficiency and Security Act of 2007

EPACT Energy Policy Act of 2005

EPRI Electric Power Research Institute

EUEA Efficient Use of Energy Act

EUI Energy

Ͳ use index

HH Household

HID High intensity discharge lamps

HPWH Heat pump water heater

IURC Indiana Utility Regulatory Commission

LED Light emitting diode lamp

LoadMAP EnerNOC’s Load Management Analysis and Planning TM tool

OUCC Indiana Office of Utility Consumer Counselor

NWPCC Northwest Power and Conservation Council

RTU Roof top unit

Sq. ft. Square feet

TRC Total resource cost

UEC Unit energy consumptionEnerNOC Utility Solutions Consulting 11-1 

## ANALYSIS APPROACH AND DATA DEVELOPMENT

This section describes the analysis approach taken for the study and the data sources used to develop the potential estimates.



## Analysis Approach

To perform the energy efficiency analysis, EnerNOC used a bottom-up analysis approach as shown in Figure 2-1. This involved the following steps.

8. Held a meeting with the client project team to refine the objectives of the project in detail. This resulted in a work plan for the study.

9. Performed a market characterization to describe sector-level electricity use for the residential, commercial, and industrial sectors for the base year, 2011. This included using existing information contained in prior Indiana studies, in EnerNOC’s own databases and tools, and in other secondary data sources such as the American Community Survey (ACS) and the Energy Information Administration (EIA).

10. Developed a baseline electricity forecast by sector, segment, and end use for 2011 through 2013. Results presented in this volume focus on a four-year implementation cycle of 2014 through 2017. Results beyond 2017 ar e available in the Appendices.

11. Identified several hundred measures and estimated their effects in four levels of energyefficiency potential: Technical, Economic, Achievable High, and Achievable Low

.

12. Performed a scenario analysis of to estimate the sens itivity of the potentials to changes in

avoided costs.

13. Reviewed the current programs offered by IPL in light of the study findings to make strategic program recommendations for achieving savings.

14. Created detailed program designs and action plans through 2017 based on the potential analysis and strategic recommendations.

These steps are described in further detail throughout the remainder of this chapter. 

### CHAPTER 11Analysis Approach and Data Development

11-2 www.enernoc.com Figure 11-1 Overview of Analysis Approach



### LoadMAP Model

We used EnerNOC’s Load Management Anal ysis and Planning tool (LoadMAP TM ) version 3.0 to develop both the baseline forecast and the estimates of energy efficiency potential. EnerNOC developed LoadMAP in 2007 and has enhanced it over time, using it for the EPRI National Potential Study and numerous utility-specific forecasting and potential studies. Built in Excel, the LoadMAP framework (see Figure 11-2) is both accessible and transparent and has the following key features.

x Embodies the basic principles of rigorous end-use models (such as EPRI’s REEPS and COMMEND) but in a more simplified, accessible form.

x Includes stock-accounting algorithms that treat older, less efficient appliance/equipment stock separately from newer, more efficient equipm ent. Equipment is replaced according to the measure life and appliance vintage distributions defined by the user.

x Balances the competing needs of simplicity and robustness by incorporating important modeling details related to equipment saturations, efficiencies, vintage, and the like, where market data are available, and treats end uses separately to account for varying importance and availability of data resources.

x Isolates new construction from existing equipment and buildings and treats purchase decisions for new construction and existing buildings separately.Analysis Approach and Data Development

EnerNOC Utility Solutions Consulting 11-3 x Uses a simple logic for appliance and equipment decisions. Other models available for this purpose embody complex decision choice algo rithms or diffusion assumptions, and the model parameters tend to be difficult to estimate or observe and sometimes produce anomalous results that require calibration or even overriding. The LoadMAP approach allows the user to drive the appliance and equipment choices year by year directly in the model. This flexible approach allows users to import the results from diffus ion models or to input individual assumptions. The framework also facilitates sensitivity analysis.

x Includes appliance and equipment models customized by end use. For example, the logic for lighting is distinct from refrigerators and freezers.

x Can accommodate various levels of segmentation. Analysis can be performed at the sector level (e.g., total residential) or for customized segments within sectors (e.g., housing type or income level).

Consistent with the segmentation scheme and the market profiles we describe below, the LoadMAP model provides forecasts of baseline energy use by sector, segment, end use, and technology for existing and new buildings. It also provides forecasts of total energy use and energy-efficiency savings associated with the four types of potential. 5

Figure 11-2 LoadMAP Analysis Framework

Forecast Data

Market Profiles

Market size Equipment saturation

Fuel shares Technology shares Vintage distribution

Unit energy consumption

Coincident demand Base-year Energy Consumption by technology, end use, segment,

vintage & sector Economic Data Customer growth

Energy prices Exogenous factors

Elasticities

Energy-efficiency analysis Forecast Results

List of measures

Saturations Adoption rates

Avoided costs

Cost-effectiveness screening Baseline forecast

Savings

Estimates (Annual & peak) Technical potential Economic potential Achievable potential Customer segmentation Energy-efficiency

forecasts : Technical

Economic

Achievable Technology Data Efficiency options

Codes and standards

Purchase shares



### Market Characterization

In order to estimate the savings potential from energy-efficient measures, it is necessary to understand how much energy is used today and what equ ipment is currently being used. This characterization begins with a segmentation of IPL ’s energy footprint to quantify energy use by sector, segment, fuel, end-use application, and the current set of technologies used. We incorporate information from the secondary research sources to advise the market

characterization.

5 The model computes energy and peak-demand forecasts for each type of potential for each end use as an intermediate calculation

. Annual-energy and peak-demand savings are calculated as the difference between the value in the baseline forecast and the value in the potential forecast (e.g., the technical potential forecast).Analysis Approach and Data Development

11-4 www.enernoc.com Segmentation for Modeling Purposes
The market assessment first defined the market segments (building types, end uses and other dimensions) that are relevant in the IPL service territory. The segmentation scheme for this project is presented in Table 11-1.

Table 11-1 Overview of Segmentation Scheme for Potentials Modeling

Market

Dimension Segmentation Variable Dimension Examples

1 Sector Residential, commercial, industrial

2 Building type Residential (single family, multi family)

Commercial (office, restaurant, retail, etc.)

Industrial (chemicals & pharmaceuticals,

transportation, food products, and other.)

3 Vintage Existing and new construction

4 Fuel Electricity

5 End uses Cooling, lighting, water heat, motors, etc. (as

appropriate by sector)

6 Appliances/end uses and
technologies Technologies such as lamp type, air conditioning

equipment, motors by application, etc.

7 Equipment efficiency levels for

new purchases Baseline and higher

Ͳ efficiency options as appropriate

for each technology

Following this scheme, the residential sector was segmented as described below, starting with customer segments by building type:

x Single family

x Multi family owners

In addition to segmentation by housing type, we identified the set of end uses and technologies that are appropriate for IPL. These are shown in Table 11-3

Table 11-2 and Table 11-3Analysis Approach and Data Development

EnerNOC Utility Solutions Consulting 11-5 Table 11-2 Residential Electric End Uses and Technologies

End Use Technology
Cooling Central Air Conditioning (CAC)

Cooling Room Air Conditioning (RAC)
Cooling/Heating Air

Ͳ Source Heat Pump Cooling/Heating Geothermal Heat Pump

Space Heating Electric Resistance

Space Heating Electric Furnace

Water Heating Water Heater <= 55 gal

Water Heating Water Heater > 55 gal

Interior Lighting Screw

Ͳ in Lamps

Interior Lighting Linear Fluorescent Lamps

Exterior Lighting Screw

Ͳ in Lamps
Appliances Clothes Washer Appliances Clothes Dryer Appliances Dishwasher
Appliances Refrigerator

Appliances Freezer Appliances Second Refrigerator
Appliances Stove
Appliances Microwaves

Electronics Personal Computers

Electronics Monitor

Electronics Laptops

Electronics TVs

Electronics Printer/Fax/Copier Electronics Set

Ͳ top Boxes/DVR

Electronics Devices and Gadgets

Miscellaneous Pool Pump

Miscellaneous Pool Heater

Miscellaneous Hot Tub / Spa

Miscellaneous Well Pump

Miscellaneous Furnace Fan

Miscellaneous Miscellaneous

For the commercial sector, it is useful to analyze the segments based on the unique characteristics of the building type. For this study, we used the following bu ilding types.

x Small Office—all types of offices, including medical/dental offices

x Large Office—all types of offices, including large government facilities

x Restaurant—fast-food, sit-down and cafeteria-style restaurants

x Retail—retail establishments such as small boutiques, and large box retailers

x Grocery—convenience stores, small markets, and supermarkets

x College—colleges, universities an d technical colleges

x School—primary and secondary schools

x Health—hospitals and nursing homes

x Lodging—motels, hotels, resorts and small inns

x Warehouse—storage facilities, refrigerated and unrefrigeratedAnalysis Approach and Data Development

11-6 www.enernoc.com x Miscellaneous—all remaining building types, such as police stations, parking garages, public assembly, amusement parks, etc.

In addition to segmentation by building type, we identified the set of end uses and technologies that are appropriate for IPL. Table 11-3 lists the end uses and technologies used in this study.

Table 11-3 Commercial Electric End Uses and Technologies

End Use Technology

Cooling Air

Ͳ Cooled Chiller
Cooling Water

Ͳ Cooled Chiller
Cooling Roof top AC
Cooling Other Cooling
Cooling/Heating Air

Ͳ Source Heat Pump Cooling/Heating Geothermal Heat Pump

Heating Electric Room Heat

Heating Electric Furnace

Ventilation Ventilation

Water Heating Water Heater

Interior Lighting Screw

Ͳ in

Interior Lighting High

Ͳ Bay Fixtures

Interior Lighting Linear Fluorescent

Exterior Lighting Screw

Ͳ in

Exterior Lighting HID

Exterior Lighting Linear Fluorescent
Refrigeration Walk

Ͳ in Refrigerator
Refrigeration Reach

Ͳ in Refrigerator
Refrigeration Glass Door Display
Refrigeration Open Display Case
Refrigeration Icemaker
Refrigeration Vending Machine

Food Preparation Oven

Food Preparation Fryer

Food Preparation Dishwasher

Food Preparation Hot Food Container

Office Equipment Desktop Computer

Office Equipment Laptop

Office Equipment Server

Office Equipment Monitor

Office Equipment Printer/Copier/Fax

Office Equipment POS Terminal

Miscellaneous Non

Ͳ HVAC Motors

Miscellaneous Pool Pump

Miscellaneous Pool Heater

Miscellaneous Miscellaneous

For the industrial sector, the study isolated the top few industries in IPL by energy consumption, which accounted for 48% of the total 2011. The remaining group of industrial customers is considered in aggregate as “other industrial.” While the commercial sector has a relatively small set of building types that have relatively uniform characteristics, the sheer number of unique industry types makes it infeasible to perform a deep dive into all but the largest ones. This results in larger “other” or “miscellaneous” segment than that which exists in the commercial sector. Nonetheless, these “other” industries typically have energy use characteristics that are similar enough to perform an accurate potential assessment.Analysis Approach and Data Development

EnerNOC Utility Solutions Consulting 11-7 The resulting segmentation is as follows:

x Chemical and Pharmaceutical Products (analyzed together due to similar allocation of energy within end uses and processes)

x Transportation Products

x Food Products

x Other Industrial

In addition to segmentation by in dustry, we identified the set of end uses an d technologies that are appropriate for IPL. These are shown in Table 11-4.

Table 11-4 Industrial Electric End Uses and Technologies

End Use Technology

Cooling Air

Ͳ Cooled Chiller
Cooling Water

Ͳ Cooled Chiller
Cooling Roof top AC
Cooling Other Cooling
Cooling/Heating Air

Ͳ Source Heat Pump Cooling/Heating Geothermal Heat Pump

Heating Electric Room Heat

Heating Electric Furnace

Ventilation Ventilation

Interior Lighting Screw

Ͳ in

Interior Lighting High

Ͳ Bay Fixtures

Interior Lighting Linear Fluorescent

Exterior Lighting Screw

Ͳ in

Exterior Lighting HID

Exterior Lighting Linear Fluorescent

Motors Pumps

Motors Fans & Blowers

Motors Compressed Air

Motors Material Handling

Motors Material Processing

Motors Other Motors

Process Process Heating

Process Process Cooling and Refrigeration

Process Electro

Ͳ Chemical Processes

Process Other Process

Miscellaneous Miscellaneous

With the segmentation scheme defined, we then performed a high-level market characterization of electricity and natural gas sales in the base year to allocate sales to each customer segment. We used various data sources to identify the annual sales in each customer segment, as well as the market size for each segment. This information provided control totals at a sector level for calibrating the LoadMAP model to known data for the base-year.



### Market Profiles

The next step was to develop market profiles for each sector, customer segment, end use, and technology. A market profile includes the following elements:Analysis Approach and Data Development

11-8 www.enernoc.com x Market size is a representation of the number of customers in the segment. For the residential sector, it is number of households. In the commercial sector, it is floor space measured in square feet. For the industrial sector, it is number of employees.

x Saturations define the fraction of homes and square feet with the various technologies. (e.g., homes with electric space heating).

x UEC (unit energy consumption) or EUI (energy-use index) describes the amount of energy consumed in 2011 by a specific technology in buildings that have the technology. For electricity, UECs are expressed in kWh/household for the residential sector, and EUIs are expressed in kWh/square foot or kWh/employee for the commercial and industrial sectors, respectively.

x Intensity for the residential sector represents the average energy use for the technology across all homes in 2011. It is computed as the product of the saturation and the UEC and is defined as kWh/household for elect ricity. For the commercial and industrial sectors, intensity, computed as the product of the saturation and the EUI, represents the average use for the technology across all floor space or all employees in 2011.

x Usage is the annual energy use by a technology/end use in the segment. It is the product of

the market size and in tensity and is quantified in GWh. The market assessment results and the market profiles are presented in Chapter 3.



### Baseline Forecast

The next step was to develop the baseline forecast of annual electricity usage for 2011 through 2017 by customer segment and end use without ne w utility programs or naturally occurring efficiency. The end-use forecast does include the relatively certain impacts of codes and standards that will unfold over the study timeframe. All such mandates that were defined as of January 2012 are included in the baseline. The baseline forecast is the foundation for the analysis of savings from future EE efforts as well as the metric against which potential savings

are measured.

Inputs to the baseline forecast include:

x Current economic growth forecasts (i.e., customer growth, income growth)

x Electricity price forecasts

x Trends in fuel shares and equipment saturations

x Existing and approved changes to building codes and equipment standards

We present the results of the baseline forecast development in Chapter 4.



### Energy Efficiency Measure Analysis

This section describes the framework used to assess the savings, costs, and other attributes ofenergy-efficiency measures. These characteristics form the basis for measure-level costeffectiveness analyses as well as for determining measure-level savings. For all measures, EnerNOC assembled information to reflect equi pment performance, incremental costs, and equipment lifetimes. We used this information, alon g with IPL’s avoided costs data, in the economic screen to determine economically feasib le measures. Figure 11-3 outlines the framework for measure analysis.Analysis Approach and Data Development

EnerNOC Utility Solutions Consulting 11-9 Figure 11-3 Approach for Measure Assessment



### Economic

screen Measure characterization Measure descriptions

Energy savings Costs

Lifetime Saturation and applicability EnerNOC

universal
measure list

Building
simulations EnerNOC measure data library Client measure data library

(TRMs, evaluation reports, etc)

Avoided costs, discount rate, delivery losses Client review /

feedback Inputs Process

The framework for assessing savings, costs, and other attributes of energy efficiency measures involves identifying the list of energy effic iency measures to include in the analysis, determining their applicability to each market sector and segment, fully characterizing each measure, and performing cost-effectiveness screening.

We compiled a robust list of energy efficiency measures for each customer sector, drawing upon the IPL program experience and protocols, Ener NOC’s own measure databases and building simulation models, and secondary sources. This universal list of EE measures covers all major types of end-use equipment, as well as devi ces and actions to reduce energy consumption. If considered today, some of these measures would not pass the economic screens initially, but may pass in future years as a result of lower projected equipment costs or higher avoided costs.

The selected measures are categorized into two types according to the LoadMAP taxonomy: equipment measures and non-equipment measures.

x Equipment measures are efficient energy-consuming pieces of equipment that save energy by providing the same service with a lower energy requirement than a standard unit. An example is an ENERGY STAR refrigerator that replaces a standard efficiency refrigerator. For equipment measures, many efficiency levels may be available for a given technology, ranging from the baseline unit (often determined by code or standard) up to the most efficient product commercially available. For instance, in the case of cent ral air conditioners, this list begins with the current federal standard SEER 13 unit and spans a broad spectrum up to a maximum efficiency of a SEER 21 unit.

x Non-equipment measures save energy by reducing the need for delivered energy, but do not involve replacement or purchase of major end-use equipment (such as a refrigerator or air conditioner). An example would be a programmable thermostat that is pre-set to run heating and cooling systems only when people are home. Non-equipment measures canAnalysis Approach and Data Development

11-10 www.enernoc.com apply to more than one end use. For instance, addition of wall insulation will affect the energy use of both space heating and cooling. Non-equipment measures typically fall into one of the following categories:

o Building shell (windows, insu lation, roofing material)

o Equipment controls (thermostat, energy management system)

o Equipment maintenance (cleaning filters, changing setpoints)

o Whole-building design (building orientation, passive solar lighting)

o Lighting retrofits (included as a non-equ ipment measure because retrofits are performed prior to the equipment’s normal end of life)

o Displacement measures (ceiling fan to reduce use of central air conditioners)

o Commissioning and retrocommissioning

We developed a preliminary list of EE measures, wh ich was distributed to IPL and the stakeholder group for review. The list was finalized after incorporating comments, and can be found in Chapter 5 of this report.

Once we assembled the list of EE measures, the project team assessed their energy-saving characteristics. For each measure we also characterized incremental cost, service life, and other performance factors. Following the measure characterization, we performed an economic screening of each measure, which serves as the basis for developing the economic and achievable potential.

Representative Measure Data Inputs
To provide an example of the measure data, Table 11-5 and Table 11-6 present examples of the detailed data inputs behind both equipment and non-equipment measures, respectively, for the case of residential CAC in sing le-family homes. Table 11-5 displa ys the various efficiency levels available as equipment measures, as well as the corresponding useful life, energy usage, and

cost estimates. The columns labeled On Market and Off Market reflect equipment availability due to codes and standards or the entry of new products to the market.

Table 11-5 Example Equipment Measures for Central Air Conditioning – Single Family Home

Efficiency Level Useful Life Equipment

Cost Energy Usage(kWh/yr) On Market Off Market

SEER 13 15 $1,640 2,483 2011 n/a

SEER 14 (ENERGY STAR) 15 $1,766 2,278 2011 n/a

SEER 15 (CEE Tier 2) 15 $1,892 2,202 2011 n/a

SEER 16 (CEE Tier 3) 15 $2,018 2,137 2011 n/a

SEER 17 (Ductless Mini

Ͳ split) 15 $3,863 2,083 2011 n/a

SEER 21 15 $3,784 1,686 2011 n/a

Table 11-6 lists some of the non-equipment measures applicab le to CAC in an existing singlefamily home. All measures are evaluated for cost effectiveness based on the lifetime benefits relative to the cost of the measure. The total savings and costs are calculated for each year of the study and depend on the base year satu ration of the measure, the applicability 6 of the measure, and the savings as a percentage of the relevant energy end uses.

6 The applicability factors take into account whether the measure is applicable to a particular building type and whether it is feasible to install the measure. For instance, attic fans are not applicable to homes where there is insufficient space in the attic or the re is no attic

at all.Analysis Approach and Data Development

EnerNOC Utility Solutions Consulting 11-11 Table 11-6 Example Non-Equipment Measures – Single Family Home, Existing

End Use Measure Saturation

in 2011 7 Applica Ͳ bility Lifetime
(yrs) Measure

Installed

Cost Energy
Savings (%)

Cooling Central AC Ͳ Maintenance 37% 100% 4 $125 9.9%

Cooling Repair and Sealing

– Ducting 16% 50% 18 $500 8.8%

Cooling Insulation
Ͳ Ceiling 16% 72% 20 $1000 15.5%

Cooling Windows

– Install Reflective

Film 20% 45% 10 $895 26.2%

Cooling Windows
Ͳ ENERGY STAR 47% 90% 25 $7500 7.2%

Cooling Thermostat
Ͳ Clock/Programmable 54% 56% 12 $73 7.3%

Screening Measures for Cost-Effectiveness
Only measures that are cost-effective are included in economic and achievable potential. Therefore, for each individual measure, LoadMAP performs an economic screen. This study uses the TRC test that compares the lifetime energy benefits (and peak demand for electricity) of each applicable measure with its incremental installed cost, including material and labor. There is no program administration cost considered in this analysis, and therefore, no specific program delivery methods or mechanisms are assumed. The lifetime benefits are calculated by multiplying the annual energy and demand savings for each measure by all appropriate avoided costs for each year, and discounting the dollar savings to the present value equivalent. The analysis uses each measure’s values for savings, costs, and lifetimes that were developed as part of the measure characterization process described above.

The LoadMAP model performs this screening dynami cally, taking into account changing savings and cost data over time. Thus, some measures pass the economic screen for some — but not all — of the years in the forecast.

It is important to note the following about the economic screen:

x The economic evaluation of every measure in the screen is conducted relative to a baseline condition. For instance, in order to determine the kilowatt-hour (kWh) savings potential of a measure, kWh consumption with the measure app lied must be compared to the kWh consumption of a baseline condition.

x The economic screening was conducted only for measures that are applicable to each building type and vintage; thus if a measure is deemed to be irrelevant to a particular building type and vintage, it is excluded from the respective economic screen.

Table 11-7 shows the results of the economic screen, highlighting the economic unit for CAC and select other measures. Throughout the time frame shown, the most cost-effective CAC option is SEER 16. For pool heaters, the electric resistance unit is what is included in economic potential, until the heat pump unit becomes cost effective in 2015 due to changing market conditions and avoided costs. For refrigerators, however, the AH AM federal efficiency standards cause existing Energy Star units to become obsolete in 2014. Units compliant with AHAM 2014 thus become the new minimum efficiency baseline. Since there is not a more efficient, cost-effective unit available, they become the economic unit by default. If the measure passes the screen (has a B/C ratio greater than or equal to 1), the measure is included in economic potential. Otherwise,

7 Note that saturation levels reflected for the base year change over time as more measures are adopted.Analysis Approach and Data Development

11-12 www.enernoc.com it is screened out for that year. If multiple equipment measures have B/C ratios greater than or equal to 1.0, the most efficient technology is selected by the economic screen.

Table 11-7 Economic Screen Results for Selected Residential Equipment Measures

Technology 2013 2014 2015 2016

Central AC SEER 16 SEER 16 SEER 16 SEER 16

Pool Heater Electric

Resistance Electric

Resistance Heat Pump (COP = 5.0) Heat Pump (COP = 5.0)

Refrigerator Energy Star AHAM (2014) AHAM (2014) AHAM (2014)



### Energy-Efficiency Potential

The approach we used for this study adheres to the approaches and conventions outlined in the National Action Plan for Energy-Efficiency (NAPEE) Guide for Conducting Potential Studies (November 2007). 8 The NAPEE Guide represents the most credible and comprehensive industry practice for specifying energy-efficiency potential. As described in Chapter 1, four types of potentials were developed as part of this effort: Technical potential, Economic potential, Achievable High potential and Achievable Low potential.

The calculation of Technical and Economic potential is a st raightforward algorithm. To develop

estimates for Achievable potential , we develop market adoption rates for each measure that specify the percentage of customers that will select the highest–efficiency economic option. The Achievable High adoption rates are based on the ramp rates from the Northwest Power & Conservation Council’s Sixth Plan as a starting poin t. The NWPCC has been running programs in the Pacific Northwest for many years, and the portfolio of programs reflects a similar profile of market maturity. The ramp rates are then adjusted downwar d by 10% to account for a generally younger program history and then adjusted speci fically as needed based on information from program evaluations. The Achievable Low adoption rates start with the Achievable High rates and decrement them by 40% to 60% based on where measures lie in the time horizon of the study or whether they are already familiar in clusions in existing programs. Finally, reasonableness checks are applied by comparing the adoption rates to those from other relevant potential

studies and market research.

The overall energy efficiency potential results are available in Chapter 6, and the results by sector are given in Chapter 7.



### Action Plans

We then developed energy efficiency action plans where we map the cost effective measures to programs. We describe the programs in terms of costs, savings, strategy, and delivery mechanism. The actions plans are described in deta il in chapter 8. The supporting documentation and details for the action plans are in Volume 4.



### Alternative Avoided Cost Scenario

To observe the sensitivity of study results to changes in forecast market prices of electricity and natural gas, we ran several scenarios that changed the avoided costs over time. The models

were then re-run with all other variables held constant. The chosen scenarios and their results are described in Chapter 9.

8 National Action Plan for Energy Efficiency (2007). National Action Plan for Energy Efficien cy Vision for 2025: Developing a Framework for Change

. www.epa.gov/eeactionplan

.Analysis Approach and Data Development

EnerNOC Utility Solutions Consulting 11-13 

### Conclusions and Recommendations

In this final step, we review the potential estimates by measure, customer segment, and sector to develop a set of conclusions and recommendations to guide program efforts toward optimal pursuit of energy efficiency savings. The results of this review are presented in Chapter 10.



## Data Development

This section details the data sources used in this study, followed by a discussion of how these sources were applied. In general, data were adapted to local conditions, for example, by using

local sources for measure data and local weather for building simulations.



### Data Sources

The data sources are organized into the following categories:

x IPL and Indiana-specific data

x EnerNOC’s databases and analysis tools

x Other secondary data and reports

Indiana Data
Our highest priority data sources for this study were those that were specific to IPL.

x IPL customer data: IPL provided number of customers and total electric usage by sector from the customer billing database.

x IPL program implementation and evaluation data : Program reports that outline the details of energy efficiency programs, program goals and achievements.

x Residential Energy Consumption Survey (RECS). In the most recent RECS survey conducted by the U.S. DOE, Indiana data was combined with Ohio data in a sample indicative of the two Midwest states. We used these data extensively to develop residential market profiles as described below. http://www.eia.gov/consumption/residential/data/2009/

x Commercial Buildings Energy Consumption Survey (CBECS). We used state and regional data extensively to develop commercial market profiles.

x Manufacturing Energy Consumption Survey (MECS). We used state and regional data extensively to develop industrial market profiles.

x American Community Survey: The US Census American Community Survey is an ongoing survey that provides data every year on household characteristics. Data for IPL were available for this study. http://www.census.gov/acs/www/

x Indiana Weather Data: Weather from NOAA’s National Climatic Data Center for Indianapolis, IN was used as the basis for building simulations.

EnerNOC Databases, Analysis Tools, and Reports
EnerNOC maintains several databases and modeling tools that we use for forecasting and potential studies.

x EnerNOC Energy Market Profiles : For more than 10 years, EnerNOC staff have maintained profiles of end-use consumption for the residential, commercial, and industrial sectors. These profiles include market size, fuel shares, unit consumption estimates, and annual energy use by fuel (electricity and natural gas), customer segment and end use for 10 regions in the U.S. The Energy Information Administration surveys (RECS, CBECS and MECS)

as well as state-level statistics and local customer research provide the foundation for these regional profiles.Analysis Approach and Data Development

11-14 www.enernoc.com x Building Energy Simulation Tool (BEST) . EnerNOC’s BEST is a derivative of the DOE 2.2 building simulation model, used to estimate base-year UECs and EUIs, as well as measure savings for the HVAC-related measures.

x EnerNOC’s EnergyShapeTM: This database of load shapes includes the following: Residential – electric load shapes for 10 regions, 3 housing types, 13 end uses; Commercial – electric load shapes for 9 regions, 54 building types, 10 end uses; Industrial – electric load shapes, whole facility only, 19 2-digit SIC codes, as well as various 3-digit and 4-digit SIC

codes

x EnerNOC’s Database of Energy Efficiency Measures (DEEM): EnerNOC maintains an extensive database of measure data for our studies. Our database draws upon reliable sources including the California Database for Energy Efficient Resources (DEER), the EIA Technology Forecast Updates – Residential and Commercial Building Technologies – Reference Case, RS Means cost data, and Grainger Catalog Cost data

.

x Recent studies . EnerNOC has conducted numerous studies of EE potential in the last five years. We checked our input assumptions and analysis results against the results from these other studies, which include AmerenUE, Los Angeles Department of Water and Power, Consolidated Edison of New York, Avista Utilities, the State of New Mexico, Tennessee Valley Authority, and Seattle City Ligh t. In addition, we used the information about impacts of building codes and appliance standards from a recent report for the Institute for Energy Efficiency. 9

Other Secondary Data and Reports
Finally, a variety of secondary data sources and reports were used for this study. The main

sources are identified below.

x Indiana and regional data from past EnerNOC projects: EnerNOC referenced data from our project with MISO, as well as regional data from similar studies for Ameren Illinois

and Ameren Missouri.

x California Statewide Surveys . The Residential Appliance Saturation Survey (RASS) and the Commercial End Use Survey (CEUS) are comprehensive market research studies conducted by the California Energy Co mmission. These databases provide a wealth of information on appliance use in homes and businesses. RASS is based on information from almost 25,000 homes and CEUS is based on information from a stratified random sample of almost 3,000 businesses in California.

x Annual Energy Outlook . The Annual Energy Outlook (AEO), conducted each year by the U.S. Energy Information Administration (EIA), presents yearly projections and analysis of energy topics. For this study, we used data from the 2011 AEO.

x Electric Power Research Institute – Ass essment of Achievable Potential from Energy Efficiency and Demand Response Programs in the U.S. , also known as the EPRI National Potential Study (2009). In 2009, EPRI hired EnerNOC to conduct an assessment of the national potential for energy efficiency, with estimates derived for the four DOE regions.

x EPRI End-Use Models (REEPS and COMMEND) . These models provide the elasticities we apply to electricity prices, household in come, home size and heating and cooling.

x Database for Energy Efficient Resources (DEER). The California Energy Commission

and California Public Utilities Commission (CPUC) sponsor this database, which is designed to provide well-documented estimates of energy and peak demand savings values, measure

9 “Assessment of Electricity Savings in the U.S. Achievable through New Appliance/Equipment Efficiency Standards and Building Efficiency Codes (2010 – 2025).” Global Energy Partners, LLC for the Institute for Electric Efficiency, May 2011. http://www.edisonfoundation.net/iee/reports/IEE_CodesandStandardsAssessment_2010-2025_UPDATE.pdfAnalysis Approach and Data Development

EnerNOC Utility Solutions Consulting 11-15 costs, and effective useful li fe (EUL) for the state of California. We used the DEER database to cross check the measure savings we developed using BEST and DEEM.

x Northwest Power and Conservation Council Sixth Plan workbooks. To develop its Power Plan, the Council maintains workbooks with detailed infor mation about measures.

x Other relevant regional sources: These include reports from the Consortium for Energy Efficiency, the EPA, and the American Council for an Energy-Efficient Economy.



### Data Application

We now discuss how the data sources described above were used for each step of the study.

Data Application for Market Characterization
To construct the high-level market characterization of electricity use and households/floor space for the residential, commercial, and industrial sector s, we applied the following data sources:

x RECS 2009 and the American Community Survey to allocate residential customers by housing
type

x EIA, AEO 2011 and our Energy Market Profiles Database to allocate sales and square footage by building type for the commercial sector

x EIA data on energy use by industry type, Bureau of Labor Statistics and AEO 2011 data to allocate sales and employment for the industrial sector

Data Application for Market Profiles
The specific data elements for the market profiles, together with the key data sources, are shown in Table 11-8. To develop the market profiles for each segment, we used the following approach:

1. Developed control totals for each segment. These include market size, segment-level annual electricity use, and annual intensity.

2. Used RECS 2009 and the American Housing Sur vey to incorporate information on existing appliance saturations, appliance and equipment characteristics, and building characteristics.

3. Incorporated secondary data sources to supplement and corroborate the data from items 1

and 2 above.

4. Compared and cross-checked with regional data obtained as part of the EPRI National Potential Study and with the Energy Market Profiles Database.

5. Ensured calibration to control totals for annual electricity sales in each sector and segment.

6. Worked with IPL staff to vet the data against their knowledge and experience.

Table 11-8 Data Applied for the Market Profiles

Model Inputs Description Key Sources

Market size Base

Ͳ year residential dwellings

commercial floor space, and industrial
employment IPL customer database American Community Survey Energy Market Profiles

AEO

Annual intensity Residential: Annual energy use (kWh/household)

Commercial: Annual energy use (kWh/sq
ft)

Industrial: Annual energy use (kWh/employee) Energy Market Profiles AEO

Previous studies

Appliance/equipment Fraction of dwellings with an RECS 2009Analysis Approach and Data Development

11-16 www.enernoc.com saturations appliance/technology

Percentage of C&I floor space/employment with equipment/technology Energy Market Profiles

UEC/EUI for each end

Ͳ

use technology UEC: Annual electricity use for a technology in dwellings that have the
technology

EUI: Annual electricity use per square foot/employee for a technology in floor

space that has the technology HVAC uses: BEST simulations using

prototypes developed for NJ Engineering analysis

DEEM

Previous EnerNOC studies California RASS and CEUS

Appliance/equipment

vintage distribution Age distribution for each technology RECS 2009

Previous EnerNOC studies

Efficiency options for

each technology List of available efficiency options and

annual energy use for each technology DEEM

DEER

NWPCC workbooks

Annual Energy Outlook

Previous studies

Peak factors Share of technology energy use that

occurs during the peak hour EnergyShape database

Data Application for Baseline Forecast
Table 11-9 summarizes the LoadMAP model inputs required for the baseline forecast. These inputs are required for each segment within each sector, as well as for new construction and existing dwellings/buildings.

Table 11-9 Data Needs for the Baseline Forecast and Potentials Estimation in LoadMAP

Model Inputs Description Key Sources

Customer growth forecasts Forecasts of new construction in

residential and C&I sectors AEO 2011 growth forecast

US BLS

Equipment purchase shares for

baseline forecast For each equipment/technology,
purchase shares for each efficiency

level; specified separately for

existing equipment replacement

and new construction Shipments data from AEO AEO 2011 regional forecast

assumptions 10 Appliance/efficiency standards
analysis

IPL program results and evaluation

reports

Electricity prices Forecast of average energy and

capacity avoided costs and retail

prices IPL supply planning consultant

projections

AEO 2011

Utilization model parameters Price elasticities, elasticities for

other variables (income, weather) EPRI’s REEPS and COMMEND

models

AEO 2011

NOAA data for normal cooling &
heating degree days for IPL, IN In addition, we implemented assumptions for know n future equipment standards as of January, 2012, as shown in the tables below.

10 We developed baseline purchase decisions using the Energy Information Agency’s Annual Energy Outlook report (2011), which utilizes the National Energy Modeling System (NEMS) to produce a self-consistent supply and demand economic model. We calibrate d equipment purchase options to match manufacturer shipment data for recent years and then held values constant for the study per iod. This removes any effects of naturally occurring conservation or effects of future DSM programs that may be embedded in the AEO

forecasts.Analysis Approach and Data DevelopmentEnerNOC Utility SolutionsConsulting11-20 Table 11-10 Residential Electric Equipment Standards Applicable to IndianaToday'sEfficiencyorStandardAssumption 1stStandard(relativetotoday'sstandard)2ndStandard(relativetotoday'sstandard)EndUse Technology 201120122013201420152016201720182019202020212022202320242025CentralACRoomACEvaporativeCentralACEvaporativeRoomACCooling/Heating HeatPumpSpaceHeating ElectricResistanceWaterHeater(<=55gallons)WaterHeater(>55gallons)ScrewͲin/PinLampsLinearFluorescentRefrigerator/2ndRefrigeratorFreezerDishwasherClothesWasherClothesDryerRange/OvenMicrowavePersonalComputerMonitorLaptopComputerTVCopier/Printer/FaxDVD/VCR/AudioDevicesandGadgetsPoolPumpWellPumpFurnaceFanMiscellaneousConventionalConventionalConventionalSEER13ConventionalConventionalElectronicsConventional/EnergyStarConventionalConventional/EnergyStarConventional/EnergyStarConventionalConventionalConventionalConventional(355/ )14%moreefficient(307kWh/yr)Conventional(MEF1.26fortoploader) MEF1.72fortoploader MEF2.0fortoploaderConventional(EF3.01) 5%moreefficient(EF3.17)LightingIncandescent AdvancedIncandescentͲtier1 AdvancedIncandescentͲtier2T8AppliancesNAECAStandard 25%moreefficientNAECAStandard 25%moreefficientSEER13.0/HSPF7.7 SEER14.0/HSPF8.0ElectricResistanceWaterHeatingEF0.90 EF0.95EF0.90 HeatPumpWaterHeaterCoolingEER9.8 EER11.0ConventionalConventionalAnalysis Approach and Data DevelopmentEnerNOC Utility SolutionsConsulting11-21 Table 11-11 Commercial Electric Equipment Standards Applicable to IndianaToday'sEfficiencyorStandardAssumption 1stStandard(relativetotoday'sstandard)2ndStandard(relativetotoday'sstandard)EndUse Technology 201120122013201420152016201720182019202020212022202320242025ChillersRoofTopUnitsPackagedTerminalAC/HP EER9.8Cooling/Heating HeatPumpElectricResistanceElectricFurnaceVentilation VentilationScrewͲin/PinLampsLinearFluorescent T12HighIntensityDischargeWaterHeating WaterHeaterWalkͲinRefrigerator/FreezerReachͲinRefrigeratorGlassDoorDisplayEPACT2005StandardOpenDisplayCaseEPACT2005StandardVendingMachinesEPACT2005StandardIcemakerDesktopComputerLaptopComputerNonͲHVACMotorsCommercialLaundryMiscellaneousAdvancedIncandescentͲtier1IncandescentT8EISA2007StandardMEF1.6MEF1.2670%Efficiency62.3%EfficiencyEF0.97OfficeEquipmentRefrigerationEPACT2005Standard42%moreefficient18%moreefficient33%moreefficient2010StandardConventional/EnergyStarConventional/EnergyStarCoolingSpaceHeatingLighting2007ASHRAE90.1EER11.0/11.2EER11.0EER11.0/COP3.3AdvancedIncandescentͲtier2ElectricResistanceElectricFurnaceConstantAirVolume/VariableAirVolumeMetalHalideAnalysis Approach and Data Development

EnerNOC Utility Solutions Consulting 11-20 Energy Efficiency Measure Data Application

Table 11-12 details the data sources used for measure characterization.

Table 11-12 Data Needs for the Measure Characteristics in LoadMAP

Model Inputs Description Key Sources

Energy Impacts The annual reduction in consumption attributable

to each specific measure. Savings were developed

as a percentage of the energy end use that the

measure affects. BEST

DEEM

DEER

NWPCC workbooks

Other secondary sources

Peak Demand Impacts Savings during the peak demand periods are specified for each electric measure. These impacts

relate to the energy savings and depend on the

extent to which each measure is coincident with

the system peak. BEST
EnergyShape

Costs Equipment Measures: Includes the full cost of
purchasing and installing the equipment on a per

Ͳ household, per

Ͳ square

Ͳ foot, or per employee basis

for the residential, commercial, and industrial

sectors, respectively.

Non

Ͳ equipment measures: Existing buildings

– full

installed cost. New Construction Ͳ the costs may be

either the full cost of the measure, or as appropriate, it may be the incremental cost of
upgrading from a standard level to a higher
efficiency level. DEEM

DEER

NWPCC workbooks

RS Means

Other secondary sources

Measure Lifetimes Estimates derived from the technical data and
secondary data sources that support the measure
demand and energy savings analysis. DEEM

DEER

NWPCC workbooks

Other secondary sources

Applicability Estimate of the percentage of either dwellings in

the residential sector or square feet/employment

in the C&I sectors where the measure is applicable

and where it is technically feasible to implement. DEEM

DEER

NWPCC workbooks

Other secondary sources

On Market and Off

Market Availability Expressed as years for equipment measures to

reflect when the equipment technology is available

or no longer available in the market. EnerNOC appliance

standards and building codes
analysis

Data Application for Cost-effectiveness Screening
To perform the cost-effectiveness screening, a number of economic assumptions were needed. All cost and benefit values were analyzed as real 2011 dollars. A discount rate of 8.2% in nominal terms was used, as provided by IPL. This is equivalent to a 5.1% discount rate in real terms when adjusting for 2.92% inflation. 11 As mentioned above, avoided costs were obtained from an analysis performed by the IPL Supply Planning Consultant. Also, energy savings at the meter reduce system needs by that amount plus the avoided line losses, so benefits are increased by a factor equivalent to IPL’s average electric delivery losses, or 5.5%.

Achievable Potential Estimation
To estimate achievable potentials, three sets of parameters were required to account for the decision making behavior of huma ns in the efficiency marketplace.

11 Inflation adjuster of 2.92% based on the average annual growth forecast in US Consumer Price Index from the 2012 Annual Energy

Outlook for 2010-2035.Analysis Approach and Data Development

EnerNOC Utility Solutions Consulting 11-21 x Adoption curves for non-equipment measures . Equipment measures are installed when existing units fail. Non-equipment measures do not have this natural periodicity, so rather than installing all available non-equipment measures in the first year of the forecast (instantaneous potential), they are phased in according to adoption schedules that vary based on cost and complexity. The adoption rates used in this analysis take several factors into account to determine how quickly the market can absorb these measures. Typically, measures that cause disruption to the building, such as wall insu lation in existing buildings, receive longer adoption curves, while those with drop-in installations, such as programmable thermostats in new buildings, receive shorter ones. High capital cost measures will also receive longer adoption curves than ones with low capital cost. These adoption rates are used within LoadMAP to generate the Technical and Economic potentials. In general, the rates align with the diffusi on of similar equipment measures.

x Achievable High adoption rates . These factors are applied to Economic potential to estimate the upper bound: Achievable High. These estimate customer adoption of economic measures when delivered through efficiency programs under ideal market, implementation, and customer preference conditions. Information channels are assumed to be established and efficient for marketing, educating consumers, and coordinating with trade allies and delivery partners. The Achievable High adoption rates are based on the ramp rates from the Northwest Power & Conservation Council’s Sixth Plan as a starting point. The NWPCC has been running programs in the Pacific Northwest for many years, so the portfolio of programs reflects a more mature profile of market maturity. Because of this, the ramp rates are adjusted downward by 10%, and then furthe r adjusted with actual IPL program history and information from program evaluations. Achie vable High potential establishes a maximum target for the EE savings that an administrator can hope to achieve through its EE programs and involves incentives that represent a substantial portion of the incremen tal cost combined with high administrative and marketing costs.

x Achievable Low adoption rates . These factors are applied to Achievable High potential to calculate Achievable Low potential, decrementing them by a range of 40% to 75% based on where measures lie in the time horizon of the study or whether they are already familiar inclusions in existing programs. These rates refl ect expected program participation given significant barriers to customer acceptance, non-id eal implementation conditions, and limited program budgets. This represents a lower bound on achievable potential.

Achievable Low and Achievable High adoption ra tes are presented in Volum e 3, Appendix E.EnerNOC Utility Solutions Consulting 12-1 

## MARKET CHARACTERIZATION AND MARKET PROFILES

In this section, we describe how customers in the IP L service territory use electricity in the base year of the study, 2011. It begins with a high-level summary of energy use by sector and then

delves into each sector in detail.



## Energy Use Summary

Total electricity use for the residential, commerc ial and industrial sectors for IPL in 2011 was 13,946 GWh. As shown in Figure 3-1, the larg est sectors are residential and industrial, each accounting for 37% of load at 5,152 GWh and 5,195 GWh respectively. The remaining use is in the commercial sector, at 3,599 GWh.

Figure 12-1 Sector-Level Electricity Use, 2011



### Residential

37%

Commercial

26% 

### Industrial

37%



## Residential Sector

The total number of households and electric sales for IP L were obtained for the year 2011 from the IPL customer database. In 2011, there were 415,768 households in the IPL service territory. They used 5,152 GWh of electricity. 12 We allocated these totals into two residential segments based on survey data from the DOE’s latest Residential Energy Consumption Survey (RECS 2009), which has an oversample for IPL. The values are shown in Table 12-1 below, and referred to throughout the study as the control totals to which all energy usage is calibrated in the base year of the study.

12 U.S. DOE Energy Information Administration, See Table 2, http://www.eia.gov/electricity/sales_revenue_price/ 

### CHAPTER 12Market Characterization and Market Profiles

12-2 www.enernoc.com Table 12-1 Residential Sector Energy Usage and Intensity by Segment Type, 2011

Segment Households Intensity (kWh/HH) 2011
Electricity

Use

Single Family 298,461 14,071 4,200

Multi Family 117,307 8,120 952

Total 415,768 12,392 5,152

As we describe in the previous chapter, the market profiles provide the foundation upon which we develop the baseline forecast. The market profiles for the residential sector housing segments are presented in Table 12-2 and Table 12-3. They are also presented in Volume 3, Appendix A.Market Characterization and Market Profiles

EnerNOC Utility Solutions Consulting 12-3 Table 12-2 Electric Market Profile for the Residential Single Family Sector

Currently Viewing:

Residential :

Total Households:

GWh:

UEC Intensit y Usa g e (kWh) (kWh/HH) (GWh)

Cooling Central AC 58.3% 3,302 1,925 574.4

Cooling Room AC 18.7% 1,292 242 72.2

Cooling Air

Ͳ Source Heat Pump 8.5% 2,701 230 68.5

Cooling Geothermal Heat Pump 0.1% 2,398 2 0.7

Cooling Evaporative AC 0.0% 2,382 0 0.0

Space Heating Electric Resistance 5.6% 12,830 724 216.1

Space Heating Electric Furnace 7.5% 13,472 1,009 301.1

Space Heating Air

Ͳ Source Heat Pump 8.5% 9,157 778 232.3

Space Heating Geothermal Heat Pump 0.1% 5,234 5 1.6

Water Heating Water Heater <= 55 gal 25.4% 3,294 835 249.4

Water Heating Water Heater > 55 gal 9.8% 3,511 345 102.9

Interior Lighting Screw

Ͳ in 100.0% 1,122 1,122 334.9

Interior Lighting Linear Fluorescent 100.0% 130 130 38.7

Interior Lighting Specialty 100.0% 498 498 148.5

Exterior Lighting Screw

Ͳ in 100.0% 273 273 81.6

Appliances Clothes Washer 97.5% 110 107 32.0

Appliances Clothes Dryer 81.4% 846 689 205.6

Appliances Dishwasher 60.3% 458 276 82.4

Appliances Refrigerator 100.0% 832 832 248.2

Appliances Freezer 47.7% 663 316 94.3

Appliances Second Refrigerator 31.6% 969 306 91.3

Appliances Stove 60.2% 520 313 93.5

Appliances Microwave 97.6% 137 134 39.9

Electronics Personal Computers 82.3% 289 237 70.8

Electronics Monitor 82.3% 57 47 14.1

Electronics Laptops 63.7% 124 79 23.6

Electronics TVs 281.1% 235 659 196.8
Electronics Printer/Fax/Copier 99.7% 44 44 13.2

Electronics Set

Ͳ top Boxes/DVR 281.1% 149 419 125.0

Electronics Devices and Gadgets 100.0% 110 110 32.8

Miscellaneous Pool Pump 6.3% 1,500 94 28.0

Miscellaneous Pool Heater 0.5% 4,981 26 7.8

Miscellaneous Hot Tub / Spa 4.9% 950 47 13.9

Miscellaneous Well Pump 12.4% 561 70 20.8

Miscellaneous Furnace Fan 73.4% 527 387 115.4

Miscellaneous Miscellaneous 100.0% 761 761 227.1

14,071 4,199.5 

## Average Market Profiles Ͳ Electricity Single Family

Total End Use Technology Saturation 298,461

4,200Market Characterization and Market Profiles

12-4 www.enernoc.com Table 12-3 Residential, Multi Family Electric Market Profile

Currently Viewing:

Residential :

Total Households:

GWh:

UEC Intensit y Usa g e (kWh) (kWh/HH) (GWh)

Cooling Central AC 43.4% 952 413 48.4

Cooling Room AC 35.5% 398 141 16.6

Cooling Air

Ͳ Source Heat Pump 4.1% 741 30 3.6

Cooling Geothermal Heat Pump 0.1% 615 1 0.1

Cooling Evaporative AC 0.0% 606 0 0.0

Space Heating Electric Resistance 25.0% 3,431 858 100.6

Space Heating Electric Furnace 26.0% 3,602 936 109.7

Space Heating Air

Ͳ Source Heat Pump 4.1% 3,307 136 15.9

Space Heating Geothermal Heat Pump 0.1% 2,479 2 0.3

Water Heating Water Heater <= 55 gal 34.5% 2,123 733 85.9

Water Heating Water Heater > 55 gal 9.1% 2,263 205 24.1

Interior Lighting Screw

Ͳ in 100.0% 701 701 82.3

Interior Lighting Linear Fluorescent 100.0% 121 121 14.2

Interior Lighting Specialty 100.0% 294 294 34.5

Exterior Lighting Screw

Ͳ in 100.0% 113 113 13.3

Appliances Clothes Washer 56.1% 100 56 6.6

Appliances Clothes Dryer 47.0% 684 321 37.7

Appliances Dishwasher 42.5% 416 177 20.7

Appliances Refrigerator 100.0% 756 756 88.7

Appliances Freezer 12.6% 602 76 8.9

Appliances Second Refrigerator 5.8% 880 51 5.9

Appliances Stove 70.8% 456 323 37.9

Appliances Microwave 95.1% 125 118 13.9

Electronics Personal Computers 64.5% 262 169 19.9

Electronics Monitor 64.5% 52 34 4.0

Electronics Laptops 61.1% 113 69 8.1

Electronics TVs 204.2% 213 436 51.1
Electronics Printer/Fax/Copier 51.7% 40 21 2.4

Electronics Set

Ͳ top Boxes/DVR 204.2% 135 277 32.5

Electronics Devices and Gadgets 100.0% 100 100 11.7

Miscellaneous Pool Pump 0.0% 1,500 0 0.0

Miscellaneous Pool Heater 0.0% 4,981 0 0.0

Miscellaneous Hot Tub / Spa 1.1% 950 10 1.2

Miscellaneous Well Pump 0.0% 556 0 0.0

Miscellaneous Furnace Fan 74.2% 273 203 23.8

Miscellaneous Miscellaneous 100.0% 240 240 28.1

8,120 952.5 

## Average Market Profiles Ͳ Electricity Multi Family

Total End Use Technology Saturation 117,307

952Market Characterization and Market Profiles

EnerNOC Utility Solutions Consulting 12-5 Figure 3-2 shows the distribution of electric energy consumption by end use for all homes. Three main electricity end uses —appliances, space heating and cooling — account for over 50% of total use. The most energy allocated to any single category is 21% for appli ances, which includes refrigerators, freezers, stoves, clothes washers, clothes dryers, dishwashers, and microwaves. Other categories with substantial energy use are lighting and electronics. Electronics includes computers, televisions, video game consoles, etc. The remainder of the energy falls into the water heating and the miscellaneous category, which is comprised of furnace fans, pool pumps, and other “plug” loads (hair dryers, power tools, coffee makers, etc.).

Figure 12-2 Residential Electri city by End Use (2011), All Homes

Figure 3-3 and Table 12-4 present the electricity in tensities by end-use and housing type, as well as all homes on average. Figure 12-4 shows the same data as a percentage of total energy use.Market Characterization and Market Profiles

12-6 www.enernoc.com Figure 12-3 Residential Electricity Intensi ty by End Use and Segment (kWh/household, 2011)

Table 12-4 Residential Electricity Use by End Use and Segment (kWh/HH/year, 2011)

End Use Single Family Multi Family Total

Cooling 2,399 585 1,887

Space Heating 2,516 1,932 2,351

Water Heating 1,180 938 1,112

Interior Lighting 1,750 1,116 1,571

Exterior Lighting 273 113 228

Appliances 2,973 1,878 2,664

Electronics 1,596 1,105 1,458

Misc. 1,384 453 1,121

Total 14,071 8,120 12,392Market Characterization and Market Profiles

EnerNOC Utility Solutions Consulting 12-7 Figure 12-4 Breakdown of Residential Electricity Use by End Use and Segment (2011)



## Commercial Sector

To develop a Baseline Forecast for IPL’s commercial sector, the first step was to determine the characteristics of energy use in the study’s base year, 2011, for eleven building-type segments agreed upon for the study: Small Office , Large Office, Restaurant, Retail, Grocery, College, School, Health, Lodging, Warehouse, and Miscellaneous.

The total electric energy consumed by commercial customers in IPL’s service area in 2011 was 3,599 GWh. IPL’s billing database does not distinguish between commercial and industrial customers, but rather by rate class. Thus, the allocation for commercial was determined by taking the total usage from all of IPL’s non-residential classes and allocating it between commercial and industrial based on two sources: a manual categorization for the 30 largest IPL accounts and the state average from the US EIA for the remaining accounts. 13 We used our internal database of Energy Market Profiles for the Midwest region, as well as the list of top 30 customers, to allocate this energy usage to the various building types according to square footage and energy intensity data. The values are shown in Table 12-5 below, and referred to throughout the study as the control totals to which all energy usage is calibrated in the base year of the study.

13 U.S. DOE Energy Information Administration, See Table 2, http://www.eia.gov/electricity/sales_revenue_price/Market Characterization and Market Profiles

12-8 www.enernoc.com Table 12-5 Commercial Electricity Use by End Use and Segment (kWh/SqFt/year, 2011)

Segment Floor Space (million SqFt) Intensity (kWh/SqFt) Electricity Use (GWh)

Small Office 23 15.20 357

Large Office 26 17.99 476

Restaurant 5 38.66 206

Retail 48 13.93 662

Grocery 8 48.86 367

College 23 11.54 264

School 33 8.04 264

Health 21 24.58 507

Lodging 6 13.71 80

Warehouse 32 6.44 204

Miscellaneous 28 7.63 211

Total 252 14.28 3,599

Figure 12-5 shows the size of each of the building-types as a percentage of commercial sector energy sales.

Figure 12-5 Commercial Market Segmentation by Building Type – Percentage of Floor Space and Energy Use

Small

Office

9% Large

Office

11% Restaurant

2%

Retail

19%

Grocery

3% College

9% School

13% Health

8% Lodging

2% Warehouse

13% Miscellaneous

11% 

## Percentage of Floor Space

Small

Office

10%

Large Office

13%

Restaurant

6%

Retail

19% Grocery

10% College

7% School

7% Health

14% Lodging

2%

Warehouse

6% Miscellaneous

6% 

## Percentage of Use

Composite Electric Profile
Table 12-6 shows the market profile for electricity of the commercial sector as a whole, representing a composite of all the building types. Overall, about 55% of commercial floor space is cooled. Only about 13% of commercial floor space is heated using electric equipment, either some form of resistance heating or heat pumps. Linear fluorescent lighting and screw-in lamps are the largest energy-consuming technologies in the commercial sector, followed by ventilationMarket Characterization and Market Profiles

EnerNOC Utility Solutions Consulting 12-9 and roof top AC units. Market profiles for each building type are presented in Volume 3, Appendix A.

Table 12-6 Commercial Sector Composite ElectricMarket Characterization and Market Profiles

12-10 www.enernoc.com Commercial Electricity Consumption
Figure 3-4 shows the distribution of electricity consu mption by end use for all commercial building types. Electric usage is dominated by lighting, with interior and exterior varieties accounting for over one thir d of consumption. After lighting, the largest end uses are cooling, ventilation, and refrigeration. The remaining end uses comprise 7% or less of total usage: office equipment, miscellaneous, space heating, water heating, and food preparation.

Figure 12-6 Commercial Electrici ty Consumption by End Use (2011), All Building Types



### Cooling 18%

Heating 5%

Ventilation

10%

Water
Heating 2% Interior
Lighting 33% Exterior
Lighting 6% Refrigeration

9% Food

Preparation

3% Office

Equipment

7% Misc 7%

Figure 12-7 shows the electricity intensity by end use and building type in terms of kWh per square foot of building floor space. Figure 12-8 and Table 12-7 present the electricity usage in GWh by end use and buildin g type. Figure 12-9 shows the same data as a percentage of total energy use for each segment.Market Characterization and Market Profiles

EnerNOC Utility Solutions Consulting 12-11 Figure 12-7 Commercial Electricity Intensity by End Use and Segment (kWh/SqFt, 2011)

Figure 12-8 Commercial Electricity Usage by End Use Segment (GWh, 2011)Market Characterization and Market Profiles

12-12 www.enernoc.com Table 12-7 Commercial Electricity Consumption by End Use (GWh, 2011)

End Use Small

Office Large

Office Rest

Ͳ

aurant Retail Grocery College School Health Lodging Ware

Ͳ house Misc. Total

Cooling 94 95 28 132 42 50 32 125 15 18 28 661

Heating 24 29 3 43 9 17 8 41 9 7 5 194

Ventilation 26 71 13 53 17 30 26 73 7 12 15 343

Water
Heating 10 11 6 18 5 9 6 3 3 4 7 83

Interior
Lighting 102 122 41 269 72 105 126 116 30 100 90 1,172

Exterior
Lighting 23 15 12 43 10 17 18 10 4 19 28 200

Refrigeration 1 6 52 33 194 3 13 13 4 18 5 341

Food Prep. 0 4 40 13 9 4 8 22 2 0 2 104

Office Equip. 52 95 4 23 3 18 17 20 1 8 10 250

Misc 25 29 7 34 7 11 9 83 6 18 22 251

Total 357 476 206 662 367 264 264 507 80 204 211 3,599

Figure 12-9 Commercial Electricity Use by End Use and Segment (2011)Market Characterization and Market Profiles

EnerNOC Utility Solutions Consulting 12-13 

## Industrial Sector

To develop a Baseline Forecast for IPL’s industrial sector, the first step was to determine the characteristics of energy use in the study’s base year, 2011. We agreed upon a segmentation strategy for the study that would highlight the top fe w industries in IPL by energy consumption. The large number of unique industry types makes it infeasible to perform a deep dive into all but the largest ones. After reviewing the 30 largest IPL accounts, we determined there were three key segments to highlight: Chemical and Pharmaceutical (considered as one segment due to similarities in energy use and production methods), Transportation, and Food – with the remaining customers classified as Oth er Industrial. These “other” industries typically have energy use characteristics that are similar enough that further granu larity would not meaningfully affect the study results.

The total electric energy consumed by industrial customers in IPL in 2011 was 5,195 GWh. IPL’s billing database does not disti nguish between commercial and industrial customers, but rather by rate class. Thus, the allocation for industrial was determined by taking the total usage from all of IPL’s non-residential classes and allocating it between commercial and industrial based on two sources: a manual categorization for the 30 largest IPL accounts and the state average from the US EIA for the remaining accounts. 14 To allocate this energy usage to the various industry segments, we used energy per employee data from our internal Energy Market Profiles for the Midwest region in combination with em ployee data from the Bureau of Labor Statistics. The resulting allocations are shown in Table 12-8, and referred to throughout the study as the control totals to which all energy usage is calibrated in the base year of the study.

Table 12-8 Industrial Market Segmentat ion by Industry Type, Base Year 2011

Segment Number of Employees Electricity Use

(GWh)

Chemical and Pharmaceutical 4,628 1,128

Food Products 7,661 604

Transportation 12,884 757

Other Industrial 98,877 2,706

Total 124,050 5,195

Figure 12-10 shows the size of each of the segments as a percentage of industrial sector employees and energy sales.

14 U.S. DOE Energy Information Administration, See Table 2, http://www.eia.gov/electricity/sales_revenue_price/Market Characterization and Market Profiles

12-14 www.enernoc.com Figure 12-10 Industrial Market Segmentation – Percentage of Employees and Energy Use

As with the residential and commercial sectors, the industrial market profiles characterize electricity use in terms of end use and technology for the base year 2011. Table 12-9 shows the composite market profile for the industrial sector.Market Characterization and Market Profiles

EnerNOC Utility Solutions Consulting 12-15 Table 12-9 Industrial Sector Composi te Electric Market Profile, 2011

Total

Employees: 124,050 Control Total (GWh): 5,195.0 Intensity (kWh/employee): 41,879

EUI Intensity Usage

(kWh) (kWh/Employee) (GWh)

Cooling Air

Ͳ Cooled Chiller 2.5% 14,338 358 44.5

Cooling Water

Ͳ Cooled Chiller 2.5% 13,751 344 42.6

Cooling Roof top AC 11.7% 22,054 2,586 320.8

Cooling Air Source Heat Pump 0.1% 21,659 31 3.9

Cooling Geothermal Heat Pump 0.0% 14,446 5 0.6

Cooling Other Cooling 0.7% 14,145 92 11.5

Heating Air Source Heat Pump 0.1% 54,112 78 9.6

Heating Geothermal Heat Pump 0.0% 36,093 13 1.6

Heating Electric Room Heat 0.2% 56,621 131 16.2

Heating Electric Furnace 1.9% 59,452 1,130 140.1

Ventilation Ventilation 100.0% 2,172 2,172 269.4

Interior Lighting Screw

Ͳ in 100.0% 1,106 1,106 137.2

Interior Lighting High

Ͳ Bay Fixtures 100.0% 235 235 29.2

Interior Lighting Linear Fluorescent 100.0% 3,222 3,222 399.7

Exterior Lighting Screw

Ͳ in 100.0% 2 2 0.3

Exterior Lighting HID 100.0% 872 872 108.1

Exterior Lighting Linear Fluorescent 100.0% 0 0 0.0

Motors Pumps 100.0% 3,488 3,488 432.7

Motors Fans & Blowers 100.0% 3,019 3,019 374.5

Motors Compressed Air 100.0% 3,346 3,346 415.1

Motors Matl Handling 100.0% 2,017 2,017 250.3

Motors Matl Processing 100.0% 6,373 6,373 790.5

Motors Other Motors 100.0% 413 413 51.3

Process Process Heating 100.0% 4,332 4,332 537.3

Process Process Cooling and Refrigeration 100.0% 3,635 3,635 451.0

Process Electro

Ͳ Chemical Processes 100.0% 563 563 69.9

Process Other Process 100.0% 398 398 49.4

Misc Misc 100.0% 1,916 1,916 237.7

41,879 5,195.0 Average Market Profiles

End Use Technology Saturation

Total

Figure 3-5 shows the distribution of electricity energy consumption by end use for all industrial customers. Motors are clearly the largest overall end use for the industrial sector, accounting for 45% of energy use. Note that this end use includes a wide range of industrial equipment, such as air compressors and refrigeration compressors, pumps, conveyor motors, and fans. The process end use accounts for 21% of energy use, which includes heating, cooling, refrigeration, and electro-chemical processes. Lighting is the next highest, followed by cooling, ventilation, miscellaneous, and space heating.Market Characterization and Market Profiles

12-16 www.enernoc.com Figure 12-11 Industrial Electricity Use by End Use (2011), All Industries

Figure 12-12 presents the electricity consumption by end-use and industry type. Figure 12-13 shows the same data as a percentage of total energy use for each segment.

Figure 12-12 Industrial Electricity Consump tion by End Use and Segment (GWh, 2011)Market Characterization and Market Profiles

EnerNOC Utility Solutions Consulting 12-17 Table 12-10 Industrial Electricity Use by End Use and Segment (GWh, 2011)

End Use Chemical &

Pharmaceutical Food Products Transportation Other

Industrial. Total

Cooling 32.6 22.2 67.3 301.8 423.9

Heating 12.9 8.8 26.6 119.3 167.6

Ventilation 20.7 14.1 42.7 191.8 269.4

Interior Lighting 40.7 37.2 96.1 392.2 566.2

Exterior Lighting 7.8 7.1 18.4 75.1 108.4

Motors 743.2 290.2 296.9 984.0 2,314.4

Process 245.1 203.2 171.3 487.9 1,107.6

Misc. 25.2 21.0 37.4 154.0 237.7

Total 1,128 604 757 2,706 5,195.0

Figure 12-13 Percentage of Industrial Electricity Use by End Use and Segment (2011)EnerNOC Utility Solutions Consulting 13-1 

### CHAPTER 13



## BASELINE FORECAST

Prior to developing estimates of energy-efficiency potential, a baseline end-use forecast was developed to quantify what the consumption is likely to be in the future in absence of new efficiency programs and naturally occu rring efficiency. The baseline forecast serves as the metric against which energy efficiency potentials are measured. This chapter presents the baseline forecast for electricity for each sector.



## Residential Sector

The baseline forecast incorporates assumptions about economic growth, electricity prices, and appliance/equipment standards and building codes th at are already mandated as described in Chapter 2.

Table 13-1 and Figure 4-1 present the baseline forecast for electricity at the end-use level for the residential sector as a whole. Overall, residential use increases slightly from 5,152 GWh in 2011 to 5,196 GWh in 2017, an increase of 0.85%, or an average growth rate of 0.1% per year. This reflects the impact of the EISA lighting standard, additional appliance standards adopted in 2011, and modest customer growth Figure 13-2 presents the forecast of use per household. Most noticeable is that lighting use decreases significantly throughout the time period as the lighting efficiency standards from EISA come into effect.

Table 13-1 Residential Electricity Consumption by End Use (GWh)

End Use 2011 2014 2015 2016 2017 % Change Avg.

Growth

Rate

Cooling 785 788 794 800 807 3% 0.5%

Heating 978 999 1,012 1,024 1,037 6% 1.0%

Water Heating 462 463 461 461 458

Ͳ 1%

Ͳ 0.2%

Interior Lighting 653 639 570 534 529

Ͳ 19%

Ͳ 3.5%

Exterior Lighting 95 79 67 61 61

Ͳ 36%

Ͳ 7.4%

Appliances 1,107 1,017 994 975 959

Ͳ 13%

Ͳ 2.4%

Electronics 606 691 722 753 785 30% 4.3%

Miscellaneous 466 509 527 544 561 20% 3.1%

Total 5,152 5,186 5,147 5,152 5,196 0.9% 0.1%Baseline Forecast

13-2 www.enernoc.com Figure 13-1 Residential Electricity Baseline Forecast by End Use

Figure 13-2 Residential Baseline Electricity Use per Household by End UseBaseline Forecast

EnerNOC Utility Solutions Consulting 13-3 Table 13-2 shows the end-use forecast at the technology level. Specific observations include:

1. The primary reason for the reduction in the baseline forecast beginning in 2012 is the federal lighting standards. The standard phases general service incandescent lamps out of the market over a three-year period, causing a decline in interior screw-in lighting use by 36.9% over the forecast period.

2. Appliance energy use decreases markedly, reflecting efficiency gains from standards.

3. Growth in use in electroni cs is substantial and reflects an increase in the saturation of electronics and the trend toward higher-powered computers.

4. Growth in miscellaneous use is also substantial. This use includes various plug loads not elsewhere classified (e.g., hair dryers, power tools, coffee makers, etc.). This end use has grown consistently in the past and we incorporate future growth assumptions that are consistent with the Annual Energy Outlook.

Table 13-2 Residential Electricity Baseline Forecast by End Use and Technology (GWh)

End Use Technology 2011 2014 2015 2016 2017 % Change Avg. Growth

Rate

Cooling Central AC 623 627 632 637 643 3.2% 0.5%

Room AC 89 88 89 89 89 0.2% 0.0%

Air

Ͳ Source Heat Pump 72 72 72 73 74 2.9% 0.5%

Geothermal Heat Pump 1 1 1 1 1 3.9% 0.6%

Heating Furnace 411 425 431 436 441 7.4% 1.2%

Air

Ͳ Source Heat Pump 248 245 247 250 253 2.1% 0.3%

Geothermal Heat Pump 2 2 2 2 2 7.4% 1.2%

Electric Resistance 317 327 332 336 340 7.5% 1.2%

Water Heating Water Heater > 55 gal 127 127 124 122 118  Ͳ 7.3%

Ͳ 1.3%

Water Heater <= 55 gal 335 336 337 339 340 1.5% 0.3%

Interior Lighting Screw

Ͳ in 417 367 300 266 263  Ͳ 36.9%

Ͳ 7.7%

Linear Fluorescent 53 55 57 58 59 10.6% 1.7%

Specialty 183 216 213 210 207 13.2% 2.1%

Exterior Lighting Exterior Lighting 95 79 67 61 61  Ͳ 36.0%

Ͳ 7.4%

Appliances Clothes Washer 39 35 33 31 30  Ͳ 23.3%

Ͳ 4.4%

Clothes Dryer 243 224 220 216 213  Ͳ 12.3%

Ͳ 2.2%

Dishwasher 103 88 85 82 80  Ͳ 22.5%

Ͳ 4.2%

Refrigerator 337 303 291 281 273  Ͳ 19.0%

Ͳ 3.5%

Freezer 103 89 85 83 81  Ͳ 22.0%

Ͳ 4.1%

Second Refrigerator 97 86 83 81 79  Ͳ 18.9%

Ͳ 3.5%

Stove 131 138 140 143 146 11.0% 1.7%

Microwave 54 56 56 57 58 7.5% 1.2%

Electronics Personal Computers 91 101 105 108 112 23.8% 3.6%

Monitor 18 20 20 21 22 21.1% 3.2%

Laptops 32 35 36 38 39 23.6% 3.5%

TVs 248 287 301 316 330 33.2% 4.8%
Printer/Fax/Copier 16 16 16 16 16 1.2% 0.2%

Set

Ͳ top Boxes/DVR 157 182 191 200 208 32.4% 4.7%

Devices and Gadgets 45 50 53 55 57 28.5% 4.2%

Miscellaneous Pool Pump 28 29 30 30 30 8.6% 1.4%

Pool Heater 8 8 8 8 8 1.8% 0.3%

Hot Tub / Spa 15 16 16 16 16 8.9% 1.4%

Well Pump 21 22 22 22 23 8.6% 1.4%

Furnace Fan 139 145 147 150 152 9.1% 1.4%

Miscellaneous 255 290 304 318 332 30.1% 4.4%

Total 5,152 5,186 5,147 5,152 5,196 0.9% 0.1%Baseline Forecast

13-4 www.enernoc.com 

## Commercial Sector

Electricity use in the commercial sector stays consta nt during the overall forecast horizon with usage growing about 12 GWh totals. Usage starts at 3,599 GWh in 2011, and increases to 3,661 GWh in 2017. Table 13-3 and Figure 4-2 present the electricity baseline forecast at the end-use level for the commercial sector as a whole. Usage is generally declining due to a sluggish economic recovery and the phasing in of codes and standards. The EISA 2007 lighting standards and EPACT 2005 refrigeration standa rds are also showing significant effects.

Table 13-3 Commercial Electricity Consumption by End Use (GWh)

End Use 2011 2014 2015 2016 2017 % Change Avg.

Growth

Rate

Cooling 661 724 750 776 804 22% 3.3%

Heating 194 230 243 257 271 40% 5.6%

Ventilation 343 328 324 322 320  Ͳ 7%  Ͳ 1.1%

Water Heating 83 89 91 94 96 16% 2.5%

Interior Lighting 1,172 1,001 984 976 971  Ͳ 17%  Ͳ 3.1%

Exterior Lighting 200 184 180 177 176  Ͳ 12%  Ͳ 2.1%

Refrigeration 341 304 296 291 287  Ͳ 16%  Ͳ 2.9%

Food Preparation 104 107 108 109 111 7% 1.1%

Office Equipment 250 255 258 264 269 8% 1.2%

Miscellaneous 251 276 285 295 305 21% 3.2%

Total 3,599 3,498 3,519 3,561 3,611 0% 0.1%Baseline Forecast

EnerNOC Utility Solutions Consulting 13-5 Figure 13-3 Commercial Electricity Baseline Forecast by End Use

Table 13-4 presents the commercial sector electricity forecast by technology. Interior screw-in lighting and refrigeration decrease significantly over the forecast period as a result of efficiency

standards.Baseline Forecast

13-6 www.enernoc.com Table 13-4 Commercial Baseline Electricity Forecast by End Use and Technology (GWh)

End Use Technology 2011 2014 2015 2016 2017 % Change Avg. Growth

Rate

Cooling Air

Ͳ Cooled Chiller 51 63 68 72 77 53.0% 7.1%

Water

Ͳ Cooled Chiller 100 110 114 119 124 24.2% 3.6%

Roof top AC 443 448 452 457 462 4.2% 0.7%

Geothermal Heat Pump 5 15 19 23 26 458.5% 28.7%

Other Cooling 35 46 49 54 58 67.1% 8.6%

Air Source Heat Pump 28 42 47 53 58 104.4% 11.9%

Heating Geothermal Heat Pump 5 19 24 28 33 514.2% 30.3%

Electric Room Heat 16 16 16 16 16 4.0% 0.6%

Electric Furnace 140 142 143 144 146 3.9% 0.6%

Air Source Heat Pump 32 53 61 68 76 133.8% 14.2%

Ventilation Ventilation 343 328 324 322 320

Ͳ 6.7%

Ͳ 1.1%

Water Heating Water Heating 83 89 91 94 96 16.0% 2.5%

Interior Lighting Screw

Ͳ in 479 330 317 308 301

Ͳ 37.1%

Ͳ 7.7%

High

Ͳ Bay Fixtures 101 75 70 67 65

Ͳ 35.0%

Ͳ 7.2%

Linear Fluorescent 593 596 598 601 604 2.0% 0.3%

Exterior Lighting Screw

Ͳ in 51 49 47 46 45

Ͳ 12.2%

Ͳ 2.2%

HID 138 125 121 120 119

Ͳ 13.8%

Ͳ 2.5%

Linear Fluorescent 10 11 11 12 12 19.7% 3.0%

Refrigeration Walk

Ͳ in Refrigerator 106 88 84 81 80

Ͳ 24.9%

Ͳ 4.8%

Reach

Ͳ in Refrigerator 11 9 9 8 8

Ͳ 28.0%

Ͳ 5.5%

Glass Door Display 127 113 110 107 105

Ͳ 17.0%

Ͳ 3.1%

Open Display Case 57 58 58 59 59 3.4% 0.6%

Icemaker 20 19 19 20 20

Ͳ 0.8%

Ͳ 0.1%

Vending Machine 20 17 16 16 15

Ͳ 25.4%

Ͳ 4.9%

Food Preparation Oven 22 24 24 25 26 16.1% 2.5%

Fryer 32 34 35 36 37 14.4% 2.2%

Dishwasher 38 37 37 37 37

Ͳ 4.5%

Ͳ 0.8%

Hot Food Container 11 11 11 12 12 7.9% 1.3%

Office Equipment Desktop Computer 127 131 132 135 137 8.3% 1.3%

Laptop 19 20 21 22 22 16.5% 2.5%

Server 57 57 58 60 61 7.4% 1.2%

Monitor 23 24 25 25 26 10.0% 1.6%
Printer/Copier/Fax 18 18 18 18 18

Ͳ 2.1%

Ͳ 0.4%

POS Terminal 5 5 5 5 5

Ͳ 10.2%

Ͳ 1.8%

Miscellaneous Non

Ͳ HVAC Motors 57 58 58 58 59 3.2% 0.5%

Pool Pump 0 0 0 0 0 7.2% 1.2%

Pool Heater 0 0 0 0 0 9.7% 1.5%

Miscellaneous 194 219 227 236 246 26.5% 3.9%

Total 3,599 3,498 3,519 3,561 3,611 0.3% 0.1%Baseline Forecast

EnerNOC Utility Solutions Consulting 13-7 Industrial SectorFigure 4-3 presents the electricity baseline forecast at the end-use level for the industrial sector as a whole. Overall, industrial an nual electricity use increases from 5,195 GWh in 2011 to 5,507 GWh in 2017, an overall increase of 1.0% per year. This is largely driven by the economy and sluggish projections for recovery.

Table 13-5 Industrial Electricity Consumption by End Use (GWh)

End Use 2011 2014 2015 2016 2017 %
Change Avg.

Growth

Rate

Cooling 424 412 415 417 418  Ͳ 1%  Ͳ 0.3%

Heating 168 173 176 180 182 8% 1.4%

Ventilation 269 268 271 272 273 1% 0.2%

Interior Lighting 566 510 506 508 510  Ͳ 10%  Ͳ 1.7%

Exterior Lighting 108 81 79 79 79  Ͳ 27%  Ͳ 5.2%

Motors 2,314 2,388 2,441 2,490 2,525 9% 1.5%

Process 1,108 1,148 1,174 1,198 1,215 10% 1.5%

Miscellaneous 238 268 282 295 306 29% 4.2%

Total 5,195 5,248 5,343 5,437 5,507 6% 1.0%

Figure 13-4 Industrial Electricity Baseline Forecast by End UseBaseline Forecast

13-8 www.enernoc.com 

## Baseline Forecast Summary

Table 4-1 and Figure 4-4 provide a summary of the baseline forecast for electricity by sector for the city of IPL. Overall, the forecast shows only a slight incline in electricity use, due to a challenging macroeconomic environ ment and codes and standards.

Table 13-6 Electricity Baseline Forecast Summary (GWh)

Sector 

### 2011 2014 2015 2016 2017 % Change Avg.

Growth

Rate

Residential 5,152 5,186 5,147 5,152 5,196 0.9% 0.1%

Commercial 3,599 3,498 3,519 3,561 3,611 0.3% 0.1%

Industrial 5,195 5,248 5,343 5,437 5,507 6.0% 1.0%

Total 13,946 13,932 14,010 14,150 14,315 2.6% 0.4%

Figure 13-5 Electricity Baseline Forecast Summary (GWh)EnerNOC Utility Solutions Consulting 14-1 

### CHAPTER 14



## ENERGY EFFICIENCY MEASURES

List of Energy Efficiency Measures

The first step of the energy efficiency measure anal ysis is to identify the list of all relevant energy efficiency measures that should be considered for the IPL potential assessment.

For this study, EnerNOC prepared a preliminary list of measures for IPL staff and stakeholders to review. After incorporating feedback, we populated the full databases for the three sectors.

Sources for the measure assumptions were drawn from past IPL program experience, EnerNOC’s building simulation tool (BEST), EnerNOC’s measure database (DEEM), TRM’s from neighboring states of Illinois and Ohio, the California DEER, NWPCC workbooks, other secondary sources, and other data from EnerNOC’s prev ious studies and program work. 15

x Residential Measures . The residential measures span all end uses and vary significantly in the manner in which they impact energy consumpt ion. All residential measures considered for this study are listed and described in Volume 3.

x Commercial Measures . All commercial measures considered for th is study are listed and

described in Volume 3.

x Industrial Measures . All industrial measures considered for this study are listed and

described in Volume 3.



## Results of the Economic Screen

Table 5-1 summarizes the number of equipment and non-equipment measures evaluated for each segment within each sector.

Table 14-1 Number of Measures Evaluated

Residential Commercial Industrial Total Number

of Measures

Equipment Measures Evaluated 35 38 28 101

Non

Ͳ Equipment Measures Evaluated 45 81 69 195

Total Measures Evaluated 80 119 97 296

Volume 3 gives results for the economic screening process by segment, vintage, end use and

measure for all sectors.

15 The Indiana TRM being developed by the Indiana DSMCC EM&V subcommittee was not available at the time this study was being performed.EnerNOC Utility Solutions Consulting 15-1 

### CHAPTER 15



## ELECTRIC ENERGY EFFICIENCY – OVERALL RESULTS

Table 6-1 and Figure 6-1 summarize the electric energy-efficiency savings for the different levels of potential relative to the baseline forecast. Figure 15-2 displays the electric energy-efficiency

forecasts.

Table 15-1 Summary of Electric Energy Efficiency Potential

###  2014 2015 2016 2017

Baseline Forecast (GWh) 13,932 14,010 14,150 14,315

Cumulative Savings (GWh)

Achievable Low Potential 107 200 275 364

Achievable High Potential 244 441 582 741

Economic Potential 746 1,094 1,267 1,456

Technical Potential 984 1,428 1,692 1,980

Energy Savings (% of Baseline)

Achievable Low Potential 0.8% 1.4% 1.9% 2.5%

Achievable High Potential 1.8% 3.1% 4.1% 5.2%

Economic Potential 5.4% 7.8% 9.0% 10.2%

Technical Potential 7.1% 10.2% 12.0% 13.8%

Figure 15-1 Summary of Electric Energy SavingsElectric Energy Efficiency – Overall Results

15-2 www.enernoc.com Figure 15-2 Electric Potentials Forecasts (GWh)

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000EnergyConsumption(1,000MWh)

Baseline Forecast

Achievable Potential Low

Achievable Potential High

Economic Potential

Technical Potential



## Overview of Ener gy Efficiency Potential by Sector

Table 6-2, Figure 15-3, and Figure 15-4 summarize the range of electric achievable potential by sector. The commercial sector accounts for the largest portion of the savings, followed by residential,

and then industrial.

Table 15-2 Electric Achievable Potential by Sector (GWh) 2014 2015 2016 2017

Achievable Low Savings (GWh)

Residential 36.9 75.5 95.7 114.8

Commercial 38.5 71.8 100.2 133.7

Industrial 31.2 52.4 79.4 115.5

Total 106.6 199.7 275.3 364.0

Achievable High Savings (GWh)

Residential 85.1 168.4 204.4 238.4

Commercial 88.2 158.3 212.5 272.0

Industrial 71.0 114.1 165.4 230.2

Total 244.3 440.8 582.3 740.6Electric Energy Efficiency – Overall Results

EnerNOC Utility Solutions Consulting 15-3 Figure 15-3 Achievable Low Electric Potential by Sector (GWh)

Figure 15-4 Achievable High Electric Potential by Sector (GWh)

Details for each sector are presented in the following chapter.EnerNOC Utility Solutions Consulting 16-1 

### CHAPTER 16



## ENERGY EFFICIENCY POTENTIAL BY SECTOR

This chapter presents the results of the energy efficiency analysis at the sector level. First, the residential potential is presented, followed by the commercial, and lastly, industrial.



## Residential Electricity Potential

Table 16-1 presents estimates for the four types of potential for the residential electricity sector. Figure 7-1 depicts these potential energy savings estimates graphically.

x Achievable Low potential projects 37 GWh of energy savings in 2014, 0.7% of the baseline forecast. This increases to 115 GWh, 2.2% of the baseline forecast, in 2017.

x Achievable High potential is 85 GWh in 2014, which represents 1.6% of the baseline forecast. By 2017, the cumulative energy savings are 238 GWh, 4.6% of the baseline

forecast.

x Economic potential, which reflects a theoretical limit to savings when all cost-effective measures are taken, is 248 GWh in 2014. This represents 4.8% of the baseline energy forecast. By 2017, economic potential reaches 464 GWh, 8.9% of the baseline energy

forecast.

x Technical potential, which reflects the adoption of all energy efficiency measures regardless of cost, is a theoretical upper bound on savings. In 2014, energy savings are 377 GWh, or 7.3% of the baseline energy forecast. By 2017, technical potential reaches 769 GWh, 14.8% of the baseline energy forecast.

Table 16-1 Electricity Energy Efficiency Potential for the Residential Sector

2014 2015 2016 2017

Baseline Forecast (GWh) 5,186 5,147 5,152 5,196

Energy Savings (GWh)

Achievable Low Potential 37 76 96 115

Achievable High Potential 85 168 204 238

Economic Potential 248 407 431 464

Technical Potential 377 600 678 769

Energy Savings (% of Baseline)

Achievable Low Potential 0.7% 1.5% 1.9% 2.2%

Achievable High Potential 1.6% 3.3% 4.0% 4.6%

Economic Potential 4.8% 7.9% 8.4% 8.9%

Technical Potential 7.3% 11.7% 13.2% 14.8%Energy Efficiency Potential By Sector

16-2 www.enernoc.com Figure 16-1 Residential Electric Energy Efficiency Potential Savings



### 0% 2% 4% 6% 8% 10% 12% 14% 16%

2014 2015 2016 2017EnergySavings(%ofBaseline) 

### Achievable Potential Low

Achievable Potential High

Economic Potential

Technical Potential

Residential Electric Potential by Market Segment

Single-family homes in IPL account for the majority of this sector’s total sales in the base year and throughout the forecast. Simi larly, single-family homes account for the largest share of potential savings by segment, as displayed in Table 16-2, which shows results for 2017.

Table 16-3 shows the Achievable Low savings by en d use and market segment in 2017. Singlefamily homes have more exterior lighting and so have more savings potential for this end use.

Table 16-2 Residential Electric Potential by Market Segment, 2017

Single Family Multi Family

Baseline Forecast (GWh) 4,,214 983

Energy Savings (GWh)

Achievable Low Potential 94 21

Achievable High Potential 195 44

Economic Potential 379 85

Technical Potential 630 162

Energy Savings as % of Baseline

Achievable Low Potential 2.2% 2.1%

Achievable High Potential 4.6% 4.4%

Economic Potential 9.0% 8.6%

Technical Potential 15.0% 16.4%Energy Efficiency Potential By Sector

EnerNOC Utility Solutions Consulting 16-3 Table 16-3 Residential Electric Achievable Low Potential by End Use and Market Segment, 2017(GWh)

End Use Single Family Multi Family
Cooling 5.3 0.7

Heating 1.6 0.2

Water Heating 1.1 0.5

Interior Lighting 56.7 13.8

Exterior Lighting 8.1 1.4

Appliances 6.9 0.4

Electronics 14.1 3.9

Miscellaneous
Ͳ Ͳ

Total 93.8 21.0Energy Efficiency Potential By Sector

16-4 www.enernoc.com 

### Residential Electric Potential by End Use

Table 16-4 provides estimates of savings for each end use and type of potential. The most significant savings opportunities come from the lighting end use.

Table 16-4 Residential Electric Savings by End Use and Potential Type (GWh)

End Use Case 2014 2015 2016 2017

Achievable Low Potential 2.20 3.41 4.42 112.14

Achievable High Potential 5.00 7.40 9.21 112.31

Economic Potential 13.32 17.85 21.97 113.48 Cooling

Technical Potential 33.78 50.95 68.36 159.45

Achievable Low Potential 0.56 1.11 2.08 76.00

Achievable High Potential 3.35 4.96 7.40 76.00

Economic Potential 0.30 0.60 0.96 56.00 Heating

Technical Potential 5.46 7.60 9.74 65.14

Achievable Low Potential 1.59 2.19 3.04 56.15

Achievable High Potential 0.35 0.34 0.34 12.34

Economic Potential 1.53 1.53 1.53 13.52 Water Heating

Technical Potential 27.66 36.92 46.05 69.29

Achievable Low Potential 21.15 49.48 61.50 86.53

Achievable High Potential 49.11 110.73 131.45 162.67

Economic Potential 147.04 265.32 261.86 277.62 Interior Lighting

Technical Potential 170.00 305.14 307.07 330.99

Achievable Low Potential 15.97 21.59 23.22 37.51

Achievable High Potential 31.12 40.93 43.53 48.10

Economic Potential 17.36 30.45 28.78 33.14 Exterior Lighting

Technical Potential 21.64 38.23 37.37 42.06

Achievable Low Potential
Ͳ Ͳ Ͳ 4.00

Achievable High Potential
Ͳ Ͳ Ͳ 8.00

Economic Potential
Ͳ Ͳ Ͳ 8.00 Appliances

Technical Potential 23.51 33.54 43.65 61.48

Achievable Potential Low 3.93 7.34 11.84 18.02

Achievable Potential High 9.11 16.50 25.89 38.22

Economic Potential 40.44 61.03 81.93 104.28 Electronics

Technical Potential 40.44 61.03 81.93 104.28

Achievable Low Potential
Ͳ Ͳ Ͳ Ͳ
Achievable High Potential
Ͳ Ͳ Ͳ Ͳ

Economic Potential
Ͳ Ͳ Ͳ Ͳ Miscellaneous

Technical Potential 8.30 12.12 15.72 19.23

Achievable Low Potential 45.41 85.11 106.11 390.35

Achievable High Potential 98.04 180.86 217.82 457.65

Economic Potential 219.99 376.77 397.01 606.03 Total

Technical Potential 330.78 545.52 609.88 851.91

Figure 7-2 focuses on the residential achievable low potential in 2017. Lighting equipment replacement accounts for the highest portion of the savings in the near term as a result of the efficiency gap between CFL lamps and advanced incandescent lamps, even those that will meet the EISA 2007 standard. Electronics, cooling, and appliances also contribute significantly to theEnergy Efficiency Potential By Sector

EnerNOC Utility Solutions Consulting 16-5 savings. Detailed measure information is available in Volume 3 Appendices. The key measures comprising the potential are listed below:

x Lighting: mostly CFL lamps and specialty bulbs

x Electronics (reduce standby wattage, televisions, set top boxes, PCs)

x Second refrigerator/ freezer removal

x HVAC: Removal of second room AC unit, efficient air conditioners, ducting repair/sealing, insulation, home energy management system and programmable thermostats

Figure 16-2 Residential Electric Achievable Low Potential by End Use in 2017



### Cooling

5% Heating

2% Water

Heating

1%

Interior
Lighting

62% Exterior
Lighting

8% Applianc

es

6% Electroni

cs

16%

Misc.

0%Energy Efficiency Potential By Sector

16-6 www.enernoc.com 

## Commercial Electricity Potential

The baseline forecast for the commercial sector only grows slightly, which reflects the sluggish near-term economy and forthcoming codes and standards. Nevertheless, the opportunity for energy-efficiency savings is still significant for the commercial sector. Table 16-5 presents estimates for the four types of potenti al for the residential electricity sector. Figure 7-3 depicts these potential energy savings estimates graphically.

x Achievable Low potential projects 39 GWh of energy savings in 2014, 1.1% of the baseline forecast. The cumulative savings increase to 134 GWh, 3.7% of the baseline forecast, in 2017.

x Achievable High potential is 88 GWh in 2014, which represents 2.5% of the baseline forecast. By 2017, the cumulative energy savings are 272 GWh, 7.5% of the baseline

forecast.

x Economic potential, which reflects a theoretical limit to savings when all cost-effective measures are taken, is 271 GWh in 2014. This represents 7.7% of the baseline energy forecast. By 2017, cumulative economic potential reaches 533 GWh, 14.8% of the baseline energy forecast.

x Technical potential, which reflects the adoption of all energy efficiency measures regardless of cost, is a theoretical upper bound on savings. In 2014, energy savings are 357 GWh, or 10.2% of the baseline energy forecast. By 2017, technical potential reaches 697 GWh, 19.3% of the baseline energy forecast.

Table 16-5 Electricity Efficiency Potential for the Commercial Sector

2014 2015 2016 2017

Baseline Forecast (GWh) 3,498 3,519 3,561 3,611

Savings (GWh)

Achievable Low Potential 39 72 100 134

Achievable High Potential 88 158 213 272

Economic Potential 271 386 460 533

Technical Potential 357 496 596 697

Savings (% of Baseline)

Achievable Low Potential 1.1% 2.0% 2.8% 3.7%

Achievable High Potential 2.5% 4.5% 6.0% 7.5%

Economic Potential 7.7% 11.0% 12.9% 14.8%

Technical Potential 10.2% 14.1% 16.7% 19.3%Energy Efficiency Potential By Sector

EnerNOC Utility Solutions Consulting 16-7 Figure 16-3 Commercial Energy Efficiency Potential SavingsEnergy Efficiency Potential By Sector

16-8 www.enernoc.com 

### Commercial Electric Potential by Market Segment

Table 16-6 shows potential estimates by building type segment in 2017. Retail has the largest achievable- low savings potential in 2017, followed by health, grocery, and large office. Table 16- 7 summarizes achievable potential for each segment and end use.

Table 16-6 Commercial Electric Potential by Market Segment, 2017

Small

Office Large Office Restaurant Retail Grocery College

Baseline Forecast 374 498 187 624 334 278

Energy Savings (GWh)

Achievable Low Potential 11 14 7 24 15 10

Achievable High Potential 23 29 14 49 31 21

Economic Potential 48 57 28 97 61 41

Technical Potential 73 77 35 134 79 53

Energy Savings (% of Baseline)

Achievable Low Potential 2.97% 2.87% 3.74% 3.87% 4.58% 3.68%

Achievable High Potential 6.14% 5.89% 7.59% 7.92% 9.15% 7.56%

Economic Potential 12.72% 11.42% 14.84% 15.55% 18.32% 14.79%

Technical Potential 19.42% 15.57% 18.90% 21.45% 23.66% 18.98%

School Health Lodging Warehouse Misc. Total

Baseline Forecast 267 549 73 223 202 3,611

Energy Savings (GWh)

Achievable Low Potential 11 17 3 11 9 134

Achievable High Potential 23 35 6 21 19 272

Economic Potential 43 70 11 42 36 533

Technical Potential 56 86 13 49 42 697

Energy Savings (% of Baseline)

Achievable Low Potential 4.27% 3.18% 3.98% 4.74% 4.53% 3.70%

Achievable High Potential 8.75% 6.42% 8.15% 9.56% 9.15% 7.53%

Economic Potential 15.92% 12.66% 14.64% 18.97% 17.84% 14.76%

Technical Potential 21.04% 15.63% 17.82% 21.79% 20.83% 19.31%Energy Efficiency Potential By Sector

EnerNOC Utility Solutions Consulting 16-9 Table 16-7 Commercial Electric Achievable Low Potential by End Use and Market Segment, 2017 (GWh)

Segment Cooling Space
Heating Ventilatio

n Water

Heat Int.
Lighting Ext.
Lighting Food Prep Refrigerat

ion Office

Equip Misc Total

Small Office 5.9 0.8 0.7 0.6 3.6 1.4 0.0 0.0 1.9 0.0 14.9

Large

Office 5.6 1.0 3.9 0.8 5.7 0.9 0.0 0.1 2.8 0.0 20.9

Restaurant 1.7 0.1 1.0 0.8 1.4 1.1 0.4 3.7 0.1 0.0 10.4

Retail 8.3 2.6 2.7 1.6 10.1 5.6 0.4 2.0 0.8 0.0 33.9

Grocery 3.9 1.5 1.6 0.6 2.9 0.8 0.9 14.1 0.1 0.0 26.4

College 3.0 0.7 2.2 0.8 5.8 1.0 0.0 0.2 0.6 0.0 14.3

School 2.1 0.5 1.9 0.6 7.4 1.1 0.1 0.8 0.6 0.0 15.2

Health 0.8 0.3 0.3 0.4 4.1 0.8 0.1 0.6 0.6 0.0 8.1

Lodging 1.7 1.4 1.1 0.2 7.2 0.3 0.0 1.2 0.0 0.0 13.2

Warehouse 2.3 0.9 1.3 0.5 4.4 2.6 0.2 0.3 0.4 0.0 12.8

Misc. 9.7 3.0 6.4 0.5 5.4 1.5 0.1 0.8 0.3 0.0 27.7

Total 45.0 12.9 23.1 7.3 58.0 17.3 2.2 23.8 8.4 0.1 197.9



### Commercial Electric Potential by End Use

Table 16-8 presents the commercial sector savings by end use and potential type. The end uses with the highest technical and economic potential are lighting, cooling, ventilation, and refrigeration.

Figure 7-4 focuses on achievable potential savings by end use. Not surprisingly, interior lighting delivers the highest achievable savings throughout the study period. In 2017, Cooling is second, and exterior lighting is third. Regarding refrigeration, it is interesting to point out a relatively new control and sensing technology that vendors such as “eCube” are using to regulate the system energy. The technology consists of a solid, waxy food simulant that is fitted around a thermostat sensor that would otherwise measure air temperature. The refrigeration controls therefore attempt to regulate the temperature of food, which changes more slowly and gradually than air, thereby reducing the frequency of refr igeration on/off cycles. Refrigeration energy savings are then followed in descending order by cooling, ventilation, office equipment, and small amounts

of the other end uses.

Detailed measure information is available in the Volume 3 Appendices. The key measures comprising the potential are listed below:

x Lighting – CFLs, LED lamps, linear fluorescent, daylighting controls, occupancy sensors, and HID lamps for exterior lighting

x Energy management systems & programmable thermostats

x Ventilation – variable speed control

x Refrigeration – efficient equipment, control systems, decommissioning

x Efficient office equipment – computers, serversEnergy Efficiency Potential By Sector

16-10 www.enernoc.com Table 16-8 Commercial Potential by End Use and Potential Type (GWh)

End Use Case 2014 2015 2016 2017

Achievable Potential Low 5 9 15 24

Achievable Potential High 11 19 31 47

Economic Potential 43 59 79 100 Cooling

Technical Potential 68 94 124 157

Achievable Potential Low 0 0 0 0

Achievable Potential High 0 0 0 0

Economic Potential 1 2 4 7 Heating

Technical Potential 4 7 11 16

Achievable Potential Low 13 19 25 32

Achievable Potential High 18 25 34 43

Economic Potential 6 9 12 15 Ventilation

Technical Potential 6 9 12 15

Achievable Potential Low 3 6 9 15

Achievable Potential High 7 12 20 30

Economic Potential 28 39 51 63 Water Heating

Technical Potential 33 45 58 72

Achievable Potential Low 14 27 32 35

Achievable Potential High 32 61 70 75

Economic Potential 86 134 143 148 Interior Lighting

Technical Potential 90 138 148 154

Achievable Potential Low 7 12 16 19

Achievable Potential High 14 24 30 35

Economic Potential 20 31 35 37 Exterior Lighting

Technical Potential 20 31 35 38

Achievable Potential Low 4 6 10 14

Achievable Potential High 9 13 20 27

Economic Potential 26 31 39 47 Refrigeration

Technical Potential 61 73 89 107

Achievable Potential Low 0 1 1 1

Achievable Potential High 1 1 2 3

Economic Potential 2 4 5 7 Food Preparation

Technical Potential 2 4 5 7

Achievable Potential Low 3 5 7 8

Achievable Potential High 6 11 15 17

Economic Potential 14 23 29 34 Office Equipment

Technical Potential 16 26 33 38

Achievable Potential Low 4 5 6 7

Achievable Potential High 8 10 13 16

Economic Potential 0 0 0 1 Miscellaneous

Technical Potential 0 0 0 1

Achievable Potential Low 53 88 120 155

Achievable Potential High 105 177 233 294

Economic Potential 227 333 397 460 Total

Technical Potential 300 428 516 604Energy Efficiency Potential By Sector

EnerNOC Utility Solutions Consulting 16-11 Figure 16-4 Commercial Achievable Low Potential Electricity Savings by End Use in 2017

Cooling

18%

Heating

5%

Ventilation

9%

Water Heating

4%

Interior Lighting

36% Exterior Lighting

11% Refrigeration

10%

Food Preparation

1% Office

Equipment

6% Miscellaneous

0%



## Industrial Electricity Potential

The IPL industrial sector accounts for 37% of total energy consumption, making for prime efficiency opportunities. Table 16-9 and Figure 7-5 present the savings for the various types of potential considered in this study.

x Achievable Low potential projects 31 GWh of energy savings in 2014 and 116 GWh in 2017. This corresponds to 0.6% of the baseline forecast in 2014 and 2.1% in 2017.

x Achievable High potential is 71 GWh in 2014, which represents 1.4% of the baseline forecast. By 2017, the cumulative energy savings are 232 GWh, 4.2% of the baseline

forecast.

x Economic potential , which reflects the savings when all cost-effective measures are taken, is 230 GWh in 2014. This represents 4.4% of the baseline energy forecast. By 2017, economic potential reaches 265 GWh, 8.4% of the baseline energy forecast.

x Technical potential, which reflects the adoption of all energy efficiency measures regardless of cost, is a theoretical upper bound on savings. In 2014, energy savings are 249 GWh, or 4.8% of the baseline energy forecast. By 2017, technical potential reaches 514 GWh, 9.3% of the baseline energy forecast.Energy Efficiency Potential By Sector

EnerNOC Utility Solutions Consulting 16-12 Table 16-9 Electric Efficiency Potential for the Industrial Sector

2014 2015 2016 2017

Energy Forecasts (GWh) 5,248 5,343 5,437 5,507

Cumulative Energy Savings (GWh)

Achievable Low Potential 31 53 80 116

Achievable High Potential 71 115 166 232

Economic Potential 230 305 381 465

Technical Potential 249 332 418 514

Energy Savings (% of Baseline Forecast)

Achievable Low Potential 0.6% 1.0% 1.5% 2.1%

Achievable High Potential 1.4% 2.1% 3.1% 4.2%

Economic Potential 4.4% 5.7% 7.0% 8.4%

Technical Potential 4.8% 6.2% 7.7% 9.3%

Figure 16-5 Industrial Electric Potential SavingsEnergy Efficiency Potential By Sector

EnerNOC Utility Solutions Consulting 16-13 

### Industrial Electric Potential by Market Segment

Table 16-10 shows electric energy efficiency potential for the four industrial segments in 2017. Table 16-11 shows the Achievable Low savings by end use and market segment in 2017.

Table 16-10 Industrial Electric Pot ential by Market Segment, 2017

Chemical and

Pharmaceutical Transportat

ion Food Other

Industrial Total

Baseline Forecast (GWh) 1,222 798 651 2,837 5,507

Energy Savings (GWh)

Achievable Low Potential 24 14 13 65 116

Achievable High Potential 47 28 26 129 230

Economic Potential 88 58 49 264 459

Technical Potential 99 66 57 292 514

Energy Savings as % of Baseline

Achievable Low Potential 1.9% 1.8% 2.0% 2.3% 2.1%

Achievable High Potential 3.8% 3.6% 3.9% 4.6% 4.2%

Economic Potential 7.2% 7.3% 7.5% 9.3% 8.3%

Technical Potential 8.1% 8.3% 8.8% 10.3% 9.3%

Table 16-11 Industrial Electric Achievable Potent ial Low by End Use and Market Segment, 2017

End Use Chemicals and

Pharmaceutical Food

Products Transportat

ion Other Industrial Grand Total

Cooling 1.20 0.81 2.46 11.04 15.51

Heating 0.27 0.18 0.55 2.47 3.46

Ventilation 0.17 0.11 0.34 1.54 2.16

Interior
Lighting 2.00 1.83 4.72 19.27 27.82

Exterior
Lighting 0.19 0.18 0.46 1.88 2.71

Motors 18.30 7.28 4.84 25.89 56.31

Process 1.55 2.46 0.87 2.67 7.54

Miscellaneous

Ͳ Ͳ Ͳ Ͳ Ͳ
Grand Total 23.67 12.85 14.24 64.76 115.52



### Industrial Electric Potential by End Use

Table 16-12 provides estimates of savings for each end use and type of potential. Not surprisingly, the largest savings opportunities are found in motors and drives.Energy Efficiency Potential By Sector

16-14 www.enernoc.com Table 16-12 Industrial Electric Potential by End Use and Potential Type (GWh)

End Use Potential 2014 2015 2016 2017

Achievable Low Potential 3.43 6.20 10.25 15.54

Achievable High Potential 7.79 13.46 21.31 30.90

Economic Potential 30.02 40.63 52.82 65.13 Cooling

Technical Potential 32.42 43.63 56.14 68.97

Achievable Low Potential 0.72 1.35 2.27 3.47

Achievable High Potential 1.64 2.93 4.70 6.90

Economic Potential 7.89 10.85 14.15 17.35 Heating

Technical Potential 8.99 12.23 15.85 19.36

Achievable Low Potential 0.49 0.95 1.51 2.16

Achievable High Potential 1.13 2.13 3.30 4.59

Economic Potential 9.58 15.03 20.08 24.67 Ventilation

Technical Potential 11.10 16.84 22.22 27.17

Achievable Low Potential 7.62 13.08 19.41 27.82

Achievable High Potential 17.46 28.79 40.71 55.86

Economic Potential 58.89 78.78 94.02 112.28 Interior Lighting

Technical Potential 63.14 84.13 100.89 120.87

Achievable Low Potential 1.40 2.19 2.51 2.71

Achievable High Potential 3.24 4.95 5.41 5.59

Economic Potential 7.88 10.19 9.61 9.23 Exterior Lighting

Technical Potential 9.11 11.88 12.05 12.68

Achievable Low Potential 16.48 26.42 39.46 56.95

Achievable High Potential 37.31 57.11 81.57 112.69

Economic Potential 105.30 134.67 169.43 208.31 Motors

Technical Potential 106.56 137.39 174.94 217.66

Achievable Low Potential 1.25 2.50 4.53 7.54

Achievable High Potential 2.84 5.42 9.42 15.04

Economic Potential 10.61 15.18 21.04 27.96 Process

Technical Potential 18.04 25.89 35.93 47.72

Achievable Low Potential
Ͳ Ͳ Ͳ Ͳ

Achievable High Potential
Ͳ Ͳ Ͳ Ͳ

Economic Potential
Ͳ Ͳ Ͳ Ͳ Miscellaneous

Technical Potential
Ͳ Ͳ Ͳ Ͳ

Achievable Low Potential 31.39 52.68 79.94 116.19

Achievable High Potential 71.41 114.78 166.42 231.57

Economic Potential 230.18 305.32 381.14 464.95 Total

Technical Potential 249.38 331.99 418.01 514.43

Figure 7-6 illustrates the achievable potential savings by electric end use in 2017 for the industrial sector. The largest shares of savings opportunities are in the motors and machine drives. Potential savings for straight equipment change-outs are diminishing due to the National Electrical Manufacturer’s Association (NEMA) standards, which now make premium efficiencyEnergy Efficiency Potential By Sector

EnerNOC Utility Solutions Consulting 16-15 motors the baseline efficiency level. As a result, potential savings are incrementally small to upgrade to even more efficient levels. Many of the savings opportunities in this end use come from controls, timers, and variable speed driv es, which improve system efficiencies where motors

are utilized.

Beyond the replacement of motors, there are large opportunities for savings in cooling, lighting, process, ventilation, and finally space heating. Detail ed measure information is available in the Volume 3 Appendices. The key measures comp rising the potential are listed below:

x Motors – drives and controls

x Process – timers and controls

x Application optimization and cont rol – fans, pumps, compressed air

x Efficient high bay lighting

x Efficient ventilation systems

x Energy management systems & programmable thermostats

Figure 16-6 Industrial Achievable Low Electricity Potential Savings by End Use in 2017EnerNOC Utility Solutions Consulting 17-1 

### CHAPTER 17



## ACTION PLAN

The Action Plan is the heart of the study. This is where the multitude of measures from the potential analysis gets bundled into delivery mechanisms to take on the form of specific energy efficiency programs. Several changes occur in the translation from the market potential assessment to the program designs in the Action Plan, as the measure mix may change due to program delivery considerations. Table 8-1 below lists the distinct programs that emerge from this exercise to deliver an effective and balanced po rtfolio of energy savings opportunities across all customer segments.

Table 17-1 Portfolio of Energy Effi ciency Programs Included in Action Plan

Residential Programs Commercial & Industrial Programs

Electric Prescriptive Rebate Prescriptive Rebate

Income Qualified Weatherization Schools Program
Residential New Construction Strategic Energy Management

Multi Family Direct Install Retrocommissioning

Home Energy Assessment Business & Multi Family New Construction

School Kit  High Efficiency HVAC  Appliance Recycling 
Behavioral Feedback Tools 



## Programmatic Framework

Each program contemplates and outlines a programmatic framework for administrators and implementers. The items considered and developed for this framework include those listed below. Detailed write-ups delve into the specific recommendations for each program in Volume 4 of this report.

x Target market

x Implementation strategy, including delivery channels, marketing, education and outreach

x Program issues, risks and risk management strategies

x Eligible measures and incentives

x Evaluation, measurement and verification requirements and guidance

x Administrative requirements

x Estimated participation

x Program budget

x Program energy savings and demand reduction

x Cost effectiveness

x Synergies with other utilities and agencies (e.g., joint delivery)Action Plan

17-2 www.enernoc.com Indiana mandated efficiency targets dictate that regulated electric utilities should reach certain levels of savings by implementing a required set of programs, known as Core programs, and that they should make up any shortfall between the goals and the Core program savings with a flexible or optional set of Core Plus programs, wh ich can be designed to suit each utility. These distinctions are outlined later in the program highlights and descriptions.



### A Note on Joint Delivery

Simultaneously addressing elect ric and natural gas energy savings is the most efficient and costeffective way to run efficiency programs. Toward this end, the state of Indiana is employing the progressive and forward-thinking concept of a statewide Therm Bank, which provides a straightforward mechanism to deliver joint electric and natural gas programs. In this paradigm, the electric utilities are already running eff iciency programs to comply with the state mandated targets. The natural gas utilities can participate and contribute to the energy savings without creating a duplicative, administrative cost structure simply by paying into the existing budget of the electric programs at an agreed-upon “dollars per therm saved” basis. The existing programs are expanded to include additional savings for both electric and natural gas measures, and the budgeted dollars stretch even further.

We analyze the programs in this portfolio first with the assumption that IPL and Citizens are taking advantage of this Therm Bank joint delivery mechanism where applicable, and second with the assumption that the two utilities de liver portfolios completely independently. In the case of joint delivery, the assumed payment per therm saved is listed below in Table 17-2

Table 17-2 Electric Joint Delivery Methodology



### Program $ paid per incremental

therm saved Notes

Res Electric Prescriptive

Ͳ No gas savings in program

Res Natural Gas Prescriptive

Ͳ Gas only, not jointly delivered

Res Income Qualified Weatherization $3.01

Res New Construction $3.30

Res Multifamily Direct Install $3.30

Res Home Energy Assessment $3.59

Res School Kit $2.13

Res High Efficiency HVAC $3.30

Res Appliance Recycling

Ͳ No gas savings in program

Res Behavioral Feedback Tools $0.98

Bus Prescriptive $3.00

Bus Custom Incentives $3.30

Bus Schools Program $3.30

Bus Strategic Energy Management $1.63

Bus Retrocommissioning $3.30

Bus & Multifamily New Construction $3.30Action Plan

EnerNOC Utility Solutions Consulting 17-3 

## Program Plans

After applying all the above delivery and cost st ructures, the recommended programs for the Action Plan resulted in estimated energy savings and budgets. This was the result of combining the Achievable High electric potentials for IPL with the Achievable Low natural gas potentials for

Citizens. This enables IPL to better aim for its aggressive state targets and for the slightly smaller company Citizens to better align with its budget capabilities.

Figure 8-1 shows the incremental en ergy savings achieved in each year of the study.

Figure 17-1 Net Incremental Energy Savings (MWh)



### Ͳ 50,000 100,000 150,000 200,000 250,000 300,000

2014 2015 2016 2017 Bus & MF NC

Bus RCx

Bus SEM

Bus Schools Program

Bus Custom Incentives

Bus Prescriptive

Res Behavioral Feedback Tools

Res Appliance Recycling

Res High Efficiency HVAC

Res School Kit

Res HEA

Res MF Direct Install

Res NC

Res IQW

Res Elec PrescriptiveAction Plan

17-4 www.enernoc.com Figure 8-2 below shows the annual budgets for the portfolio, first with the joint delivery structure

described above and second with a completely independent del ivery structure. This analysis assumes that the savings and portfolio would stay the same with joint delivery, but the budget would shrink by millions of dollars. Another possibility would be if the budget stayed the same and savings increased. Regardless, the ratio of savings to costs improves with joint delivery.

Figure 17-2 Annual Utility BudgetsAction PlanEnerNOC Utility SolutionsConsulting17-5Table 8-2 below shows the detailed annual savings and budgets for thejointlydelivered portfolio. Table 8-3 shows the same for theindependentlydelivered portfolio. Note that the only numbers in these two tables that are different are the budget numbers.

Table 17-3 IPL Jointly Delivered Electric Energy Efficiency Portfolio SummaryTotalUtilityCosts(000$)TotalIncrementalEnergySavings(MWh)TotalIncrementalDemandSavings(kW)Program201420152016201720142015201620172014201520162017ResElectricPrescriptive8422,4632,6892,93211,293*47,77546,75648,1317423,2773,2343,369ResIncomeQualifiedWeath.8731,1411,1441,1501,627*1,6261,5721,56179787474ResNewConstruction2423575492,8143,0223,542157146139ResMultifamilyDirectInstall1,9801,5051,5941,60210,4556,7706,6716,613345219211210ResHomeEnergyAssess.4891,2311,2351,2425,000*2,7642,6902,665186928888ResSchoolKit4845085115142,422*2,4412,3612,33374726867ResHighEfficiencyHVAC77911071201618192423252834ResApplianceRecycling9141,0131,1121,2114,1194,4044,6744,9331,3691,5211,6731,825ResBehavioralFeedbackTools7951,1251,3181,31850,348*59,80270,35570,35512,24514,54417,11117,111BusPrescriptive9,1652,7133,2063,65878,642*30,64034,06239,21612,4504,5734,8165,071BusCustomIncentives3,8168,93611,64713,93119,47848,82261,12175,3751,6643,9894,4024,661BusSchoolsProgram1465836467464722,4322,8823,39832143158171BusStrategicEnergyMgmt.50254960012,76814,04515,4501,7801,9582,154BusRetrocommissioning6708781,1676248161,056111Bus&MultifamilyNewConstr.2473575009501,3131,643316372378ResidentialTotal:6,4559,32010,06610,63685,280128,414138,120140,15615,06319,98522,63222,916BusinessTotal:13,12713,65117,28120,60198,59296,237114,239136,13714,14610,80111,70712,435PortfolioTotal:19,58222,97127,34731,238183,872224,650252,359276,29329,20930,78634,33935,351

*Asterisk in 2014 indicates already contracted amounts, with delivery subject to ultimate IPL and contractor arrangements.Action Plan17-6www.enernoc.com

Table 17-4 IPL Independently Delivered Electric Energy Efficiency Portfolio SummaryTotalUtilityCosts(000$)TotalIncrementalEnergySavings(MWh)TotalIncrementalDemandSavings(kW)Program201420152016201720142015201620172014201520162017ResElectricPrescriptive8422,4632,6892,93211,293*47,77546,75648,1317423,2773,2343,369ResIncomeQualifiedWeath.1,6722,2432,2462,2521,627*1,6261,5721,56179787474ResNewConstruction2814106332,8143,0223,542157146139ResMultifamilyDirectInstall2,2172,0592,1482,15710,4556,7706,6716,613345219211210ResHomeEnergyAssess.7512,0562,0602,0675,000*2,7642,6902,665186928888ResSchoolKit7527887917942,422*2,4412,3612,33374726867ResHighEfficiencyHVAC1351651972221618192423252834ResApplianceRecycling9141,0131,1121,2114,1194,4044,6744,9331,3691,5211,6731,825ResBehavioralFeedbackTools1,2151,7252,0232,02350,348*59,80270,35570,35512,24514,54417,11117,111BusPrescriptive9,5373,0203,5544,05578,642*30,64034,06239,21612,4504,5734,8165,071BusCustomIncentives4,0189,39212,29214,74919,47848,82261,12175,3751,6643,9894,4024,661BusSchoolsProgram1646166938034722,4322,8823,39832143158171BusStrategicEnergyMgmt.64570477012,76814,04515,4501,7801,9582,154BusRetrocommissioning7159561,2836248161,056111Bus&MultifamilyNewConstr.3305007389501,3131,643316372378ResidentialTotal:8,49812,79413,67614,29085,280128,414138,120140,15615,06319,98522,63222,916BusinessTotal:13,72014,71818,70022,39798,59296,237114,239136,13714,14610,80111,70712,435PortfolioTotal:22,21727,51232,37636,686183,872224,650252,359276,29329,20930,78634,33935,351

*Asterisk in 2014 indicates already contracted amounts, with delivery subject to ultimate IPL and contractor arrangements.Action Plan

EnerNOC Utility Solutions Consulting 17-7 Below are summary highlights of the programs we recommend for delivery. As mentioned above, detailed write-ups are available in Volume 4 of this report.



### Residential Programs

x Electric Prescriptive Rebate

This program emphasizes standardized rebates, and upstream buydowns, with a market

transformation focus. The concen tration will mainly be on CFL lighting. It should be noted that the number of general purp ose bulbs decreases over the timeframe, due to lower savings, the increasing efficiency of the baseline technology due to the EISA 2007 legislation, and increased market transformation. Meanwhile, the number of specialty bulbs delivered by the program increases over the same period, as these are not “general service bulbs” to which the EISA legislation is limited.

The measure list expands in 2015 beyond simply lighting to include an electronics program, computers, TV’s, set-top boxes, ceiling fans, and Energy Star room air

conditioners.

The lighting portion of this program is a Core program, required by the Indiana Utility Regulatory Commission (IURC) generic order. Joint delivery is not an option for this program, as there are no savings in natural gas.

x Income Qualified Weatherization

This program provides education and a suite of electric and gas efficiency measures to help income qualified customers reduce their energy bills. These customers are defined as those living in geographic census blocks with an average household income at or below 200% of the federal poverty level.

Full installation of measu res is subsidized and provided to the residents, therefore full measure costs are used in the analysis rather than incremental measure costs. Program implementation costs include a blower door test. Coverage is targeted at 1,000 households in 2013, ramping up to 4,000 households in 2017. Of these households, 80% are assumed to have gas heat and be involved in the natural gas program through the

Therm Bank.

Measures in this program are CFLs, low-flow water fixtu res, and building shell infiltration control. Expanded “Plus” measures recommended for 2015 and beyond include insulation, programmable thermostats, duct repair & sealing, and whole-house fans.

This particular program is not high ly cost-effective, but consensus agreement around the nation is that this is OK for income-limited populations, as long as the overall portfolio is

still cost-effective.

This is a Core program and is a pr ime target for joint delivery.

x Residential New Construction

This program, starting in 2015, is designed to accelerate the incorporation of energy efficient design, construction, and operation in new residential buildings. It provides education and incentive payments to upstream designer-builders and owner-builders for installing high efficiency end-use equi pment and building envelope measures. Under it, different “tiers” or “packages” of building performance receive tiered incentives.

This is not a Core program. This program is a candidate for joint delivery.

x Multi Family Direct Install

This program provides targeted, highly cost-effective measures to multifamily households in a quickly deployable program delivery mechanism. These are often rental units with split-landlord-and-renter barrier, i.e., the owner of the equipment does not pay theAction Plan

17-8 www.enernoc.com energy bills. It is therefore typically an underserved market with respect to energy efficiency programs and an important program to include in the portfolio.

Measures in this program are CFLs, low-flow water fixtures, and building infiltration control. Full installation of measures is provided, therefore full measure costs are used rather than incremental measure costs. Expanded “Plus” measures in 2015 and beyond include insulation, programmable thermostats, duct repair & sealing, etc. delivered in follow-up touches by a network of qualified trade allies and contractors. These expanded measures would not be fully paid for, like the direct install measures, by the program.

The initial target is 20,0 00 households in 2013 rampi ng down to avoid market saturation to 10,000 households in 2017. Of these households, 40% are assumed to have gas heat and be involved in the natural gas program through the Therm Bank.

This is not a Core program; however it is eligible for joint delivery.

x Home Energy Assessment

This program provides education and a suite of electric and gas efficiency measures to help single family customers red uce their energy bills.

Measures in this program are CFLs, low-flow water fixtures, and building infiltration control. Full installation of measures is provided, therefore full measure costs are used rather than incremental measure costs. The implementation cost in this case includes the cost of an optional blower door test if requested by the participant. Expanded “Plus” measures in 2015 and beyond include insulation, programmable thermostats, duct repair & sealing, etc, delivered in follow-up touches by a network of qualified trade allies and contractors. These expanded measures would not be fully paid for, like the direct install measures, by the program.

The initial target is 20,000 households in 2013, ramping down to avoid market saturation to 5,000 households in 2017. Of these households, 60% are assumed to have gas heat and be involved in the natural gas program through the Therm Bank.

This is a Core program, required by th e IURC generic order, and is also a prime candidate for joint delivery.

x School Kit

Under this program, an educational module is provided to 5 th graders, along with a takehome kit of energy efficiency measures (CFLs and low-flow water fixtures). A planned 12,000 kits will be distributed in 2013, leveling off at 6,000 kits in future years through 2017. Of these households, 60% are assumed to have gas heat and be involved in the natural gas program through the Therm Bank.

This is a Core program required by the IURC generic order, and is eligible for joint delivery.

x High Efficiency HVAC

This program is designed to provide energy savings through the replacement and installation of efficient heating, ventilation, and air conditioning equipment. Stringent codes and standards make the cost-effectiveness of this program challenging. There is therefore a relatively small list of marg inally passing measures, comprising Energy Star room air conditioners, effi cient furnaces, and boilers.

This program is not cost-effective on a standalone basis, and must be included in the portfolio view to merit its continuance. Earmarking part or all of these rebate funds for preferential access to income qualified participants is recommended. Income qualified households can have larger savings due to presence of very old equipment that does not get replaced regularly. Another possibility would be combining these measures into the Home Energy Assessment program as “Plus” measures.Action Plan

EnerNOC Utility Solutions Consulting 17-9 This is not a Core program; however it is eligible for joint delivery.

x Appliance Recycling

This program pursues energy savings by offering a bounty payment to customers to remove their old, inefficient appliances from the grid and recycle them. It has the potential to deliver large savings availa ble from cost-effective measures, most notably secondary refrigerators (3,000 to 5,000 units per year) and old room air conditioners (1,200 to 1,600 units per year).

One concern with this program is the possibility that after program pick-up of their secondary refrigerator, residents might simply buy a new unit and move their former primary unit into the gara ge or basement to replace it. This is why the program is penalized with a challenging net-to-gross ratio.

This is not a Core program, and is not eligible for joint delivery, as there are no associated gas savings.

x Behavioral Feedback Tools

This program uses energy reports sent periodically to customers to give them selfawareness and a peer comparison of their energy usage. Social competitiveness effects increase efficient behaviors to reduce energy consumption. The model assumes 2% electric savings and 1% gas savings for single family households.

This initiative was added at the program design stage, and was not included in our bottom-up, measure level potential analysis. This is due to the fact that it is not a specific action or piece of equipment, per se, as well as the fact that it does not go through the typical customer-choice model that other measures encounter. The program is simply delivered to as many participants as the planners desire, and produces a statistically measured energy reduction effect in a treatment group (vs. a control group that does not receive the program treatment).

It should be monitored carefully, however, as it is a new and emerging opportunity. Relatively little is known about the specific actions that customers perform to reduce their energy usage in this program, and it may undergo meaningful change in customer responsiveness and evaluation paradigms in the coming years.

In this case, measure life and persistence is a key issue: behavi oral effects only continue while the reports are being provided, and measured effects decay over a period of several months after the reports stop coming. Therefore, savings must be continually renewed each year with additional cost and effort, whereas the savings from a capital equipment measure can last 10 to 20 ye ars. This makes for relatively low-cost energy savings when considered on a first-year basis, but relatively high-cost energy savings on

a lifetime or levelized cost basis.

Implementation for the electric program is ta rgeted at 150,000 households in 2014, ramping up to 250,000 households in 2017. Of these households, 60% are assumed to have gas heat and be involved in the natural gas program through the Therm Bank.

This is not a Core program, but it is a prime candidate for joint delivery.Action Plan

17-10 www.enernoc.com 

### Commercial & Industrial Programs

x Prescriptive Rebate

This program is designed to help non-residential customers save energy through a broad range of EE options that address all major end uses and processes. It offers incentives tocustomers and engages equipment suppliers and contractors to promote the incentiveeligible equipment, focusing on standa rdized rebates, upstream buydowns, and market

transformation.

Together with Bus Custom Incentives, this is where a bulk of program savings and dollars are focused. Business energy efficiency efforts are very project-centric, with many large projects participating in a hybrid of stan dard, prescriptive rebates and custom project incentives. Thus, delivery is integrated in many ways between the two programs.

This is a Core program required by the IURC generic order, and is a prime candidate for joint delivery.

x Custom Incentives

This program is designed to help non-residential customers save energy through customizable projects that are too complex to fit in standard rebate offering.

Together with Bus Prescriptive, this is where a bulk of program savings and dollars are focused. Business energy efficiency efforts are very project-centric, with many large projects participating in a hybrid of stan dard, prescriptive rebates and custom project incentives. Thus, delivery is integrated in many ways between the two programs.

Current incentive caps of $25,000 per project significantly limit savings and participation in this program. Our recommendation is to remove or expand those caps and open up the vast opportunities of the Custom program for future years.

This is not a Core program, but is a prime candidate for joint delivery.

x Schools Program

This program is essentially a combinat ion of the Business Prescr iptive and Custom Incentives programs that is targeted toward public schools. It offers an audit and assessment, followed by the opportunity to install efficiency measures for school buildings.

It is a Core program and a good candidate for joint delivery.

x Strategic Energy Management

SEM involves energy education, advising, and coaching for non-residential customers to drive behavioral change and transformation of company culture toward improved energy efficiency and utilization. This means the appo intment of energy liaisons and teams within participating organizations who will regularly correspond with programrepresentatives. Institutionalizing internal policies and practices this way creates longerlasting behavioral-based savings than residential behavioral programs.

The program is planned to begin in 2015. It is not a Core program, but is a prime candidate for joint delivery.

x Retrocommissioning

This program involves the initial, periodic, or continual monitoring and commissioning of building energy systems such as heating, cooling, ventilation, and lighting in order to optimize energy consumption relative to actual building usage.

This program is not cost-effective on a standalone basis, and must be included in the portfolio view to merit its continuance. While it does not show as cost effective with theAction Plan

EnerNOC Utility Solutions Consulting 17-11 particular, conservative assumptions we have included in this analysis, there are many incarnations of this program and it is worth investi gating further. Specific customer types like offices, hospitals, and universities can be more cost effective than others. One can also consider combining this offering with the Strategic Energy Management program.

The program is planned to begin in 2015. It is not a Core program, but is a prime candidate for joint delivery.

x Business & Multi Family New Construction

This program, starting in 2015, is designed to accelerate the incorporation of energy efficient design, construction, and operation in new business and multi family residential buildings. It provides education and incentive payments to upstream designer-builders and owner-builders for installing high efficiency end-use equipment and building envelope measures. Under it, different “tiers” or “packages” of building performance

receive tiered incentives.

This is a very relevant addition to this portfolio, especially considering the multi-unit, multi-family buildings and complexes that are so prevalent in the Indianapolis metropolitan area. This is a somewhat hybrid market, containing many aspects of both residential and commercial construction, and would benefit from a specialized program targeting the particular market needs.

The program is not a Core program, but is a prime candidate for joint delivery.Action Plan

17-12 www.enernoc.com 

## Cost Effectiveness

Given savings and budgets, we can perform the industry standard cost-effectiveness tests to gauge the economic merits of the portfolio. Each test compares the benefits of the EE programs to their costs with its own unique perspectives and definitions, all defined in terms of net present value of future cash flows. The definitions for the four standard tests most commonly used by program designers are described below.

x Total Resource Cost test (TRC). The benefits in this test are the lifetime avoided energy costs and avoided capacity costs. The costs in this test are the incremental measure costs plus all administrative costs spent by the program administrator.

x Utility Cost Test (UCT). The benefits in this test are the lifetime avoided energy costs and avoided capacity costs, the same as the TRC benefits. The costs in this test are the program

administrator’s incentive costs and administrative costs.

x Participant Cost Test (PCT). The benefits in this test are the lifetime value of retail rate savings (which is another way of saying “lost utility revenues”). The costs in this test are those seen by the participant; in other words: the incremental measure costs minus the value of incentives paid out.

x Rate Impact Measure test (RIM). The benefits of the RIM test are the same as the TRC benefits. The RIM costs are the same as the UCT, except for the addition of lost revenue. This test attempts to show the effects that EE prog rams will have on rates, which is almost always to raise them on a per unit basis. Thus, costs typically outwei gh benefits from the point of view of this test, but the assumption is that absolute energy use decreases to a greater extent than per-unit rates are increased — resulting in lower average utility bills.

The cost effectiveness results for the relevant com binations of program delivery are presented below in the tables. Table 8-4 shows the cost effectiveness for the combined electric and gas portfolio, jointly delivered, wi th an overall TRC of 1.30. The IP L share of this combined portfolio

is shown in Table 8-5 with a TRC ratio of 1.41.

However, with independent delivery of the same portfolio, IPL would have to spend more money to make up for the funds not received from Citizens through the Therm Bank, dropping the TRC ratio for IPL’s share of the same portf olio from 1.41 to 1.31 in Table 8-6.

Table 17-5 Combined Joint Delivery-Cost effectiveness summary

TRC Ratio TRC Benefits TRC Costs UCT Ratio PCT Ratio RIM Ratio

Res Electric Prescriptive 2.27 $30,853,832 $13,610,04 8 4.19 6.21 0.67

Res Natural Gas Prescriptive 0.25 $438,638 $1,738,38 4 0.46 0.89 0.27

Res Income Qualified Weath. 0.83 $4,561,673 $5,518,88 0 0.83  Ͳ 0.36

Res New Construction 1.10 $2,322,318 $2,119,00 4 2.18 2.98 0.55

Res Multifamily Direct Install 1.33 $11,779,567 $8,888,70 4 1.33  Ͳ 0.45

Res Home Energy Assessment 1.05 $7,360,65 4 $6,993,76 3 1.05  Ͳ 0.40

Res School Kit 1.62 $4,805,987 $2,969,34 4 1.62  Ͳ 0.46

Res High Efficiency HVAC 0.39 $427,159 $1,102,36 7 0.83 1.01 0.38

Res Appliance Recycling 1.09 $3,880,022 $3,553,54 3 1.09  Ͳ 0.55

Res Behavioral Feedback Tools 1.50 $11,443,91 4 $7,654,52 7 1.50  Ͳ 0.52

Bus Prescriptive 1.52 $76,617,536 $50,355,26 3 3.38 3.14 0.70

Bus Custom Incentives 1.13 $81,173,35 4 $71,811,65 0 2.32 2.78 0.59

Bus Schools Program 0.75 $3,516,008 $4,716,32 5 1.62 1.82 0.52

Bus Strategic Energy Management 2.21 $5,820,021 $2,634,15 1 2.21  Ͳ 0.58

Bus Retrocommissioning 0.23 $1,120,531 $4,958,24 5 0.49 0.60 0.29

Bus & Multifamily New Construction 1.02 $3,025,40 4 $2,976,90 9 2.30 1.93 0.67

Portfolio Total: 1.30 $249,146,617 $191,601,10 6 2.23 3.89 0.59Action Plan

EnerNOC Utility Solutions Consulting 17-13 Table 17-6 IPL Joint Delivery-Cost effectiveness summary

TRC Ratio TRC Benefits TRC Costs UCT Ratio PCT Ratio RIM Ratio

Res Electric Prescriptive 2.27 $30,853,832 $13,610,04 8 4.19 6.21 0.67

Res Natural Gas Prescriptive

Ͳ $ 0 $ 0

ͲͲͲ

Res Income Qualified Weath. 0.39 $1,413,779 $3,605,94 3 0.39  Ͳ 0.26

Res New Construction 1.12 $2,065,152 $1,842,26 3 2.22 2.99 0.56

Res Multifamily Direct Install 1.28 $7,197,619 $5,641,21 7 1.28  Ͳ 0.47

Res Home Energy Assessment 0.86 $3,009,656 $3,482,07 2 0.86  Ͳ 0.40

Res School Kit 1.32 $2,238,659 $1,694,85 1 1.32  Ͳ 0.47

Res High Efficiency HVAC 0.11 $77,17 0 $698,49 9 0.23 0.08 0.21

Res Appliance Recycling 1.09 $3,880,022 $3,553,54 3 1.09  Ͳ 0.55

Res Behavioral Feedback Tools 2.45 $9,304,418 $3,793,66 2 2.45  Ͳ 0.65

Bus Prescriptive 1.87 $66,350,607 $35,571,90 5 4.12 3.61 0.77

Bus Custom Incentives 1.17 $75,361,496 $64,598,18 8 2.39 2.82 0.60

Bus Schools Program 0.79 $3,006,766 $3,801,44 7 1.72 1.84 0.54

Bus Strategic Energy Management 3.42 $4,619,086 $1,349,19 0 3.42  Ͳ 0.70

Bus Retrocommissioning 0.19 $909,968 $4,779,07 8 0.41 0.50 0.26

Bus & Multifamily New Construction 0.99 $1,999,205 $2,019,68 4 2.23 1.51 0.77

Portfolio Total: 1.41 $212,287,43 6 $150,041,58 9 2.52 3.80 0.64

Table 17-7 IPL Independent Delivery-Cost effectiveness summary

TRC Ratio TRC Benefits TRC Costs UCT Ratio PCT Ratio RIM Ratio

Res Electric Prescriptive 2.27 $30,853,832 $13,610,04 8 4.19 6.21 0.67

Res Natural Gas Prescriptive

Ͳ $ 0 $ 0

ͲͲͲ

Res Income Qualified Weath. 0.53 $1,413,779 $2,643,35 9 0.53  Ͳ 0.31

Res New Construction 1.27 $2,065,152 $1,628,40 2 2.41 3.54 0.58

Res Multifamily Direct Install 1.18 $7,197,619 $6,101,68 7 1.18  Ͳ 0.45

Res Home Energy Assessment 0.90 $3,009,656 $3,332,41 4 0.90  Ͳ 0.41

Res School Kit 1.15 $2,238,659 $1,939,55 6 1.15  Ͳ 0.45

Res High Efficiency HVAC 0.62 $77,17 0 $124,32 6 0.74 1.55 0.57

Res Appliance Recycling 1.09 $3,880,022 $3,553,54 3 1.09  Ͳ 0.55

Res Behavioral Feedback Tools 1.24 $9,304,418 $7,503,22 0 1.24  Ͳ 0.52

Bus Prescriptive 1.55 $66,350,607 $42,697,72 0 3.39 3.04 0.74

Bus Custom Incentives 1.13 $75,361,496 $66,534,29 9 2.29 2.77 0.60

Bus Schools Program 0.69 $3,006,766 $4,373,56 2 1.50 1.60 0.52

Bus Strategic Energy Management 1.75 $4,619,086 $2,636,90 1 1.75  Ͳ 0.59

Bus Retrocommissioning 0.21 $909,968 $4,260,42 8 0.46 0.56 0.28

Bus & Multifamily New Construction 1.36 $1,999,205 $1,471,34 3 2.84 2.20 0.83

Portfolio Total: 1.31 $212,287,43 6 $162,410,80 8 2.28 3.61 0.62EnerNOC Utility Solutions Consulting 18-1 

### CHAPTER 18



## ALTERNATE AVOIDED COST SCENARIO

To observe the sensitivity of study results to changes in forecast avoided energy and capacity costs, we ran several scenarios in our LoadMAP potential models. All other variables were held

constant while the results were re-run. No avoided cost scenarios other than the Base Case were passed on to program design and action plans, so these only serve as indicative scenarios to show how program potential may be affected by variations in avoided cost.



## High Gas Price

The first scenario anticipates the effect of high natural gas commodity prices on electric markets and demand. In this scenario, the avoided energy cost increases by an average of 31% in all years as compared to the Base Case. Avoided capacity costs remain the same. A new subset of marginally cost-effective measures therefore pass the economic screen and migrate from technical potential into economic and achievable potential, increasing the savings by a small amount. The electric achievable low potential in 2017, for instance, only increases from 364 GWh to 372 GWh, a change of 2.22%. See Table 18-1 below.

Table 18-1 Alternate Avoided Cost Scenario, 2017 Achievable Low Potential (GWh savings)

Sector Base Case: Primary EnerNOC Analysis Alternate Case: High Gas Delta

Residential 114.8 115.3 0.43%

Commercial 133.7 137.0 2.51%

Industrial 115.5 119.7 3.65%

Total 364.0 372.0 2.22%



## Low Gas Price

The second scenario contemplates the effect of very low gas prices, an average reduction of 30% versus the avoided energy costs in the Base Case. Avoided capacity costs remain the same. This combination intuitively has the opposite ef fect of the High Gas Price scenario; causing fewer measures to pass and a slightly lower achievable potential. The electric achievable low potential decreases from 364 GWh to 357.5 GWh in 2017, a change of -1.78%. See Table 18-2 below.

Table 18-2 Alternate Avoided Cost Scenario, 2017 Achievable Low Potential (GWh savings)

Sector Base Case: Primary EnerNOC Analysis Alternate Case: Low Gas Delta

Residential 114.8  114.5  Ͳ 0.22%

Commercial 133.7  128.2  Ͳ 4.12%

Industrial 115.5  114.8  Ͳ 0.60%

Total 364.0  357.5  Ͳ 1.78%Alternate Avoided Cost Scenario

EnerNOC Utility Solutions Consulting 18-2 

## CO2 Legislation

The third scenario anticipates the effect of a carbon tax enacted after 2020. In this scenario, avoided capacity costs again remain the same, bu t avoided energy costs increase significantly starting after 2020 for an overall average increase of 24%. The electric achievable low potential in 2017 increases in this case from 364 GWh to 366.8 GWh, a difference of only 0.77%, as

shown in Table 18-3.

Table 18-3 Alternate Avoided Cost Scenario, 2017 Achievable Low Potential (GWh savings)

Sector Base Case: Primary EnerNOC Analysis Alternate Case: CO2 Delta

Residential 114.8 115.0 0.20%

Commercial 133.7 134.2 0.38%

Industrial 115.5 117.6 1.79%

Total 364.0 366.8 0.77%



## New Build of CCGT

The third scenario considers what might happ en if, instead of buying incremental electric capacity from the market, IPL were to build a new Combined Cycle Generating Turbine to meet capacity shortfalls. In this scenario, the avoided cost of energy actually decreases by an average of 17%, while the avoided cost of capacity increases by 60% to account for the new generation plant. There is a slight uptick in potentials, but most pronounced in the residential sector, as these customers have the lowest load factors and are the most peak-coincident, thereby making their capacity-saving measures more valuable. The electric achievable low potential in 2017

increased in this case from 364 GWh to 367.4 GWh, an increase of only 0.95%. See Table 18-4.

Table 18-4 Alternate Avoided Cost Scenario, 2017 Achievable Low Potential (GWh savings)

Sector Base Case: Primary EnerNOC Analysis Alternate Case: CCTG Delta

Residential 114.8 117.7 2.53%

Commercial 133.7 133.7 0.00%

Industrial 115.5 116.1 0.47%

Total 364.0 367.4 0.95%

These results indicate that, for the various avoided cost scenarios (differing from the Base Case avoided costs value by an approximate range of plus or minus 30%), the energy efficiency potential changes are in an absolute range of less than 3%. Therefore, one can say that the potential is affected by, but relatively insulated from swings in avoided costs.EnerNOC Utility Solutions Consulting A-1 

### CHAPTER 19



## CONCLUSIONS AND RECOMMENDATIONS

The results of this study reveal that significant energy efficiency opportunities exist for IPL in the Indianapolis metro area, despite a challenging macroeconomic environment and aggressive appliance and efficiency standards.

Our program analysis shows that IPL can achieve incremental electric energy savings of 183,872 MWh in 2014, increasing to 276,359 MWh in 201 7, by implementing the programs and measures presented in this report. This assumes the highest levels of program participation and realization developed from our range of achievable potential in the market potential assessment.

IPL’s energy-efficiency programs are relatively yo ung compared to other programs in the nation, but have made significant impacts already and are building appreciable market momentum. Based on our market potential assessment and program design analysis, EnerNOC provides the following high-level recommendations for the portfolio. We fully expect that IPL, the stakeholders, and the implementers will consider the plans and recommendations in this report now, at the outset of the forthcoming implementation cycle; and that they will adopt the elements that are appropriate, adjust the elements that fit differently when translated into the trenches and front lines of program delivery, and continue to revisit the report as a reference throughout the next years as situations and markets continue to change and evolve.



## General Recommendations

x Deliver electric and natural gas programs jointly when possible: Indiana’s concept of a statewide Therm Bank provides an excellent platform to deliver joint electric and natural gas programs on a straightforward and high ly cost-effective basis. In this paradigm, IPL would bolster their programs with measures that achieve natural gas savings as well as electric savings. In return, IPL would receive payments on an agreed-upon “dollars per therm saved” basis from Citizens. Meanwhile, Citizens would be empowered to participate and contribute to the energy savings without creating a duplicative, administrative cost structure. We estimated budgets and delivery structures for programs delivered both jointly and independently, and joint delivery results in cost savings of $21 million through 2017, increasing cost effectiveness of the portfolio by 8% versus independent delivery.

x Increase focus on non-residential programs: Our study shows that a large portion of the program savings from energy efficiency efforts will come from the commercial and industrial sectors. Historically, the majority of IPL budgets and savings have been focused on residential programs. IPL should consider increasing program efforts in the C&I sectors, not only to harvest larger EE savings, but to increase business competitiveness and decrease operating costs for customers. Additionally, these sectors offer larger projects, which can be

attained and bundled more read ily and efficiently.

x Continued collaboration among stakeholders: The discourse and information sharing between stakeholders, utilities, and EnerNOC on this study has been effective and transparent. Continuing this trend is of paramount importance to the future success of programs. It is essential to cultivate a mutual understanding of the dynamic nature of the energy efficiency industry due to its intrinsic linkage with human behavior and the customer mind. Ongoing interactions should be marked by an understanding of collaboration, flexibility, and continuous improvement.

## Residential Recommendations

x Focus on lighting: The largest share of achievable energy efficiency potential in the residential sector continues to come from CFLs. This is in spite of the forthcoming EISA standards that will reduce their per-unit savi ngs compared to the new baseline. Also, IPL should focus strong attention on specialty lamps, as they are not affected by the EISA

standard.

x Implement and monitor behavioral feedback programs: The behavioral modification program to be implemented by OPower is shown in the program plans to comprise a full 27% of IPL’s portfolio savings. For both IPL and Citizens, this is an excellent opportunity, as it lends itself well to joint electric and natural gas delivery. This initiative was added at the program design stage, and was not included in our bottom-up, measure level potential analysis. This is due to the fact that it is not a specific action or piece of equipment, per se, as well as the fact that it does not go through the typical customer-choice model that other measures encounter. The program is simply delivered to as many participants as the planners desire, and produces a statistically measur ed energy reduction effect in a treatment group (vs. a control group that does not receive the program treatment). It should be monitored carefully, however, as it is a new and emerging opportunity. Relatively little is known about the specific actions that customers perform to reduce their energy usage in this program, and it may undergo meaningful change in customer responsiveness and evaluation paradigms in the coming years. Additionally, savings under this program will not persist after the program is ended, and must be continually renewed each year with additional cost and effort, whereas the savings from a capital equipment measure can last 10 to 20 years. This makes for relatively low-cost energy savings when considered on a first-year basis, but relatively high-cost energy savings on a lifetime or levelized cost basis.

x Develop deeper, follow-on measures in existing programs: Some current IPL program delivery structures are pursuing low-cost meas ures through high volumes of rapid customer touches, such as the multifamily direct install progr am. We have recommended the addition of more deep, involved measures in 2015 and beyond to capitalize on customer touches asmuch as possible. While you are in the home of a customer, it makes better sense to crosssell these other measures and harvest as many energy savings as you can. This would include major equipment replacements and shell measures such as duct sealing and

insulation.

x Consider social media avenues for targeted program delivery: As internet social media paradigms become the norm in to day’s wired society, companies like Groupon, Amazon Local Deals, and Living Social have assembled a nationwide network of businesses into a well-oiled, rebate-issuing machine. IPL should consider if there are opportunities to link their energy efficiency trade ally network to one of these companies to facilitate the target marketing, processing, and delivery of rebates. These vendors have sophisticated tracking systems and databases that may facilitate EM&V reporting on the back end as well.



## Commercial & Industrial Recommendations

x Aggressively pursue lighting savings: The commercial sector in particular has significant savings potential in lighting equipment, both interior and exterior. Notably, LED lamps are showing as cost effective in the commercial sector due to aggressive forecasts of cost reductions, as well as higher hours of operation than their non-economic counterparts in residential settings. Savings are also available through occupancy sensors, timers, and energy management systems. IPL should strongly pursue lighting savings to accelerate the phase out of T12 fluorescent lighting. In particular, program efforts can help intercept building operators before they make purchase and stocking decisions that could lead to the hoarding of T12 lamps.

x Focus industrial program efforts on motor controls and system optimizations : The savings for the industrial sector are all about control and optimization of motors andprocesses. Low-cost retrofits can often have signifi cant energy impacts with minimal disruption of (and often times improvement of) business processes.

x Target niches with segment specific programs : There are specific business segments that offer considerable savings potential, but will not typically be reached by standard rebates and generic business programs. Consider in itiating specifically tar geted sub-programs within business standard and custom for areas such as: hotels and lodging, food preparation equipment in restaurants, and refrigeration equipment in grocery stores.

x Implement new programs: We have identified additi onal programs that show promise to expand IPL’s portfolio of programs to address Indiana’s aggressive statewide savings goals. These programs are as follows:

1. Strategic Energy Management . For large customers, SEM initiatives can deliver substantial savings over long time horizons. This means coming alongside the larger customers to create a customized, multi-year plan, identify metrics, set goals, and provide technical assistance and attention from dedicated account executives or energy coaches.

2. Retro-commissioning . This program involves the initial, periodic, or continual monitoring and commissioning of building energy systems such as heating, cooling, ventilation, and lighting in order to optimize energy consumption relative to actual building usage.

3. Residential, Business, and Multifamily New Construction . A program to encourage more rapid adoption of efficient building design practices would be a very relevant addition to the IPL portfolio, especially one that includes the ty pes of multi-unit, multi-family buildings and complexes that are so prevalent in the Indianapolis metropolitan area. This is a somewhat hybrid market, co ntaining many aspects of both residential and commercial construction, and would benefit from a specialized program targeting the particular market needs.About EnerNOC Utility Solutions Consulting

EnerNOC Utility Solutions Consulting is part of EnerNOC Utility Solutions group, which

provides a comprehensive suite of deman d-side management (DSM) services to

utilities and grid operators worldwide. Hundreds of utilities have leveraged our

technology, our people, and our proven processes to make their energy efficiency

(EE) and demand response (DR) initiatives a success. Utilities trust EnerNOC to work

with them at every stage of the DSM program lifecycle – assessing market potential,

designing effective programs, implementing those programs, and measuring program

results.

EnerNOC Utility Solutions delivers value to our utility clients through two separate

practice areas – Program Implementation and EnerNOC Utility Solutions Consulting.

• Our Program Implementation team leverages EnerNOC’s deep “behind-the-meter

expertise” and world-class technology platform to help utilities create and

manage DR and EE programs that deliver reliable and cost-effective energy

savings. We focus exclusively on the commercial and industrial (C&I) customer

segments, with a track record of successful partnerships that spans more than a

decade. Through a focus on high quality, measurable savings, EnerNOC has

successfully delivered hundreds of thousands of MWh of energy efficiency for

our utility clients, and we have thousands of MW of demand response capacity

under management.

• The EnerNOC Utility Solutions Consulting team provides expertise and analysis

to support a broad range of utility DSM activities, including: potential

assessments; end-use fo recasts; integrated resource planning; EE, DR, and

smart grid pilot and program design and administration; load research;

technology assessments and demonstrations; evaluation, measurement and

verification; and regulatory support.

The EnerNOC Utility Solutions Consulting team has decades of combined experience

in the utility DSM industry. The staff is comprised of professional electrical,

mechanical, chemical, civil, industrial, and environmental engineers as well as

economists, business planners, project managers, market researchers, load research

professionals, and statisticians. Utilities view our experts as trusted advisors, and we

work together collaboratively to make any DSM initiative a success.