# Study of Potential for

Energy Savings in Delaware

September 4, 2014

Prepared for

by

with

Optimal Energy, Inc. 10600 Route 116, Suite 3

802-482-5600 www.optenergy .com Hinesburg, VT 05461Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 

## Contents

INTRODUCTION

........................................................................................................................ 1

Background and Purpose of Study ...............................

............................................................... ................ 1

Summary of Results ............................................

............................................................... .......................... 1

Comparative Information from Other Jurisdictions ..............

............................................................... ........ 8

Study Overview ................................................

............................................................... ............................ 9

PROGRAM POTENTIAL DETAILED RESULTS

............................................................... 11

Residential (Including Income-Eligible Services) ..............

............................................................... ........ 11

Commercial and Industrial .....................................

............................................................... .................... 17

Costs, Budgets, and Supply Curves .............................

............................................................... ............... 28

SENSITIVITY ANALYSES

...................................................................................................... 34

FRAMEWORK FOR PROGRAM ACHIEVABLE PORTFOLIO

...................................... 38

Understanding Barriers ........................................

............................................................... ....................... 38

Gathering Best Practices ......................................

............................................................... ....................... 41

Learning about the Delaware Market ............................

............................................................... ............. 43

PROGRAM PORTFOLIO DESIGN

....................................................................................... 47

Program Philosophy, Ass umptions, and CAveats ..................

............................................................... .... 47

Residential Cust omer Programs .................................

............................................................... ................ 47

Commercial and Industrial Customer Programs ...................

............................................................... ...... 55

Program Development over Time .................................

............................................................... ............. 60

METHODOLOGY

..................................................................................................................... 64

Overview ......................................................

............................................................... .............................. 64

Energy Forecasts...............................................

............................................................... .......................... 66

Measure Charac teriza tion ......................................

............................................................... ..................... 69

Top-Down Methodology ..........................................

............................................................... .................. 71

Cost-Effectivene ss Analysis ...................................

............................................................... .................... 72

Avoided Energy Supply Costs ...................................

............................................................... ................. 74

Energy Reta il Rates ...........................................

............................................................... ......................... 75

Electric Load Shapes ..........................................

............................................................... ........................ 76

Approach to Financing .........................................

............................................................... ...................... 76

Economic Potentia l Analysis ...................................

............................................................... ................... 77

Program Potentia l Scenario ....................................

............................................................... .................... 78

Maximum Achievab le Poten tial ..................................

............................................................... ............... 83

APPENDICES

............................................................................................................................. 84



## Tables

Table 1 | Cumulative Potential Relative to Sal es Forecast, 2025

.............................................................. ....... 2

Table 2 | Cumulative Program Potential by Sector, 2025 ........

............................................................... ......... 6

Table 3 | Incremental Annual Savings by Fuel ..................

............................................................... ............... 6

Table 4 | Portfolio Total Resour ce Cost Test Economics by Fuel and Sector, 2025 ....................................... 7

Table 5 | Cumulative Emissions Reductions by Fuel Type, 2025 ..

............................................................... .. 8Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. Table 6 | Comparative Information from Other Jurisdictions ....

............................................................... ....... 9

Table 7 | Cumulative Residen tial Savings by Program, 2025 .....

............................................................... .... 11

Table 8 | Residential Total Reso urce Cost Test Economics by Pro gram ....................................................... 12

Table 9 | Residential Program Administrator Cost Test Economics by Program .......................................... 12

Table 10 | Residential Participan t Cost Test Economics by Progr am ............................................................ 13

Table 11 | Residential Electric Energy Top Saving Measures, 202 5 ............................................................. 14

Table 12 | Residential Electric Demand Top Saving Measures, 202 5 ........................................................... 1 5

Table 13 | Residential Natural Gas Top Saving Measures, 2025 ..

............................................................... .. 16

Table 14 | Residential Petroleum Fuels Top Saving Measures, 202 5 ............................................................ 17

Table 15 | Cumulative Commercial and Industrial Savings by Prog ram, 2025 ............................................. 18

Table 16 | Commercial and Indust rial Total Resource Cost Test E conomics by Program ............................ 18

Table 17 | Commercial and Industrial Program Administrator Cost Test Economics by Program ............... 19

Table 18 | Commercial and Industrial Participant Cost Test Econ omics by Program ................................... 19

Table 19 | Commercial Electric Energy Top Saving Measures, 2025 ........................................................... 20

Table 20 | Commercial Electric Demand Top Saving Measures, 2025 ......................................................... 21

Table 21 | Commercial Natural Gas Top Saving Measures, 2025 ...

.............................................................. 23

Table 22 | Commercial Petroleum Fuels Top Saving Measures, 2025 .......................................................... 23

Table 23 | Industrial Electric En ergy Top Saving Measures, 2025

.............................................................. .. 24

Table 24 | Industrial Electric Demand Top Saving Measures, 2025

.............................................................. 26

Table 25 | Industrial Natural Gas Top Saving Measures, 2025 ...

............................................................... ... 27

Table 26 | Industrial Petroleum Fuels Top Saving Measures, 2025

.............................................................. . 27

Table 27 | Budgets by Sector (M illion$ ) .......................

............................................................... .................. 28

Table 28 | Residential Budg ets by Program (Million$) ..........

............................................................... ........ 29

Table 29 | Commercial and Indu strial Budgets by Program (Millio n$) ........................................................ 29

Table 30 | Budgets by Program and Subcategory (Present Value, M illion$) ................................................ 30

Table 31 | Utility Surch arge Calculation ......................

............................................................... .................. 30

Table 32 | Summary of Sens itivity Analyses Performed ..........

............................................................... ...... 34

Table 33 | Sensitivity f or 6% Discoun t Rate ...................

............................................................... ................ 36

Table 34 | Sensitivity for Ext ernalities of $50/tonne of Reduce d CO 2 .......................................................... 36

Table 35 | Sensitivity for 5 0% Higher Avoided Costs ...........

............................................................... ......... 37

Table 36 | Residential Program Concepts .......................

............................................................... ................ 48

Table 37 | Commercial & Indus trial Program Concepts ...........

............................................................... ...... 56

Table 38 | Residential Program Development ....................

............................................................... ............ 62

Table 39 | Commercial & Indus trial Program Development ........

............................................................... .. 63

Table 40 | Electric Sales Fore cast by Sector and Year (GWh) ...

............................................................... .... 66

Table 41 | Natural Gas Sales F orecast by Sector and Year (BBtu)

.............................................................. .. 67

Table 42 | Petroleum Fuels Sal es Forecast by Sector and Year (B Btu) ......................................................... 68

Table 43 | Overview of Cost-Effectiveness Tests ...............

............................................................... ............ 73Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. Table 44 | Percent of Total Cost at Full Program Ramp-Up by Cos t Category ............................................. 80

Table 45 | Ramp-Up Schedule w ith Costs Relative to Year 7 .....

............................................................... ... 81

Table 46 | Ramp-Up Schedule with Costs Relative to Total Budget

............................................................. 81



## Figures

Figure 1 | Electric Energy Savi ngs Relative to Sales Forecast .

............................................................... ........ 3

Figure 2 | Electric Demand Savi ngs Relative to Sales Forecast .

............................................................... ...... 3

Figure 3 | Natural Gas Savings Relative to Sales Forecast .....

............................................................... .......... 4

Figure 4 | Petroleum Fuel Saving s Relative to Sales Forecast ..

............................................................... ........ 4

Figure 5 | Residential Electric En ergy Savings by End Use, 2025

.............................................................. .. 14

Figure 6 | Residential Electric Demand Savings by End Use, 2025

.............................................................. 15

Figure 7 | Commercial Electric En ergy Savings by End Use, 2025

.............................................................. 20

Figure 8 | Commercial Electric Demand Savings by End Use, 2025 ............................................................ 21

Figure 9 | Commercial Natural Gas Savings by End Use, 2025 ....

............................................................... . 22

Figure 10 | Industrial Electric Energy Savings by End Use, 2025

.............................................................. ... 24

Figure 11 | Industrial Electric Demand Savings by End Use, 2025

.............................................................. . 25

Figure 12 | Electric E nergy Supply Curve ......................

............................................................... ................ 31

Figure 13 | Natural Gas Supply Curve ..........................

............................................................... .................. 32

Figure 14 | Petroleum Fuels Supply Curve ......................

............................................................... ............... 33

Figure 15 | Program Development Over Time .....................

............................................................... .......... 61Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 1 

## INTRODUCTION

BACKGROUND AND PURPOSE OF STUDY

The Delaware Department of Natural Resources and Environmental Control (DNREC)

commissioned this study to estimate two achievable energy efficiency potential scenarios for

Delaware for electricity, natural gas and unregulated fossil fuel usage (petroleum fuels) in the

buildings sector. 1 Optimal Energy, Inc. led the study, with assistance from Shelter Analytics and

Energy Futures Group. This Phase II report builds on an initial effort to estimate Delaware’s

economic energy efficiency potential report completed earlier in 2013. 2 By “potential” we mean

the potential for increased adoption of energy efficient technologies above and beyond that

which would naturally occur in the absence of funded programs to promote their adoption. The

analysis considers a 12

‐ year study period, from 2014

‐ 2025.

This study provides an estimate of the potential efficiency savings available to Delaware. To

better inform future Delaware efficiency program goals and planning, the study also provides a

realistic “proxy” set of programs that could be implemented to achieve those savings and the

associated cost estimates for acquiring those resources. This “program potential” is intended to

support the discussion and consideration of pending legislation in Delaware regarding energy

efficiency goals. To that end, we conducted this analysis to be, as much as possible, neutral and

unbiased with respect to the administrative and financial models that could ultimately be the

basis of future energy efficiency achievements in Delaware. On the other hand, our analysis did

assume integrated programs across all fuels. Although the focus of the study and this report is

on the program potential, this report also presents an assessment of a maximum achievable

scenario as a point of comparison for the program potential and the previously

‐ developed

economic potential.



### SUMMARY OF RESULTS

Scenario Summaries

This section presents various slices of the study results. It begins with results at the portfolio

level, comparing outputs from the different levels of potential assessed in the study. As

discussed in detail in the methodology section, this study analyzed three levels of potential:



###  Economic

– Everything that is cost

‐ effective, assuming no or limited market

barriers

1 Petroleum fuels included oil #2, #4 and #6, propane and kerosene. All petroleum fuel potential was estimated in

aggregate and is not provided for each individual fuel.

2 Delaware Economic Energy Efficiency Potential

, prepared for Delaware Department of Natural Resources and

Environmental Control by Optimal Energy, Inc. 24 May 2013.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 2 

###  Maximum Achievable

– The maximum level of program activity and savings

that is possible given the market barriers to adoption of energy efficient

technologies



###  Program Achievable

– A level of possible savings given a specific set of

programs targeting specific markets. Program potential also considers the

administrative costs necessary to capture the potential

Comparisons across potential types are useful for understanding the bounds of

achievement. Following the portfolio level results we present more detailed results for the

program potential, including disaggregated results for each sector.

Table 1 provides a summary of the economic, maximum achievable, and program potential

of each fuel relative to the sales forecast. Overall, program potential for electricity is 18.7% of the

forecasted load in 2025. The maximum achievable potential for electricity is 23% by 2025,

roughly 30% greater than the program potential. The proximity of the two estimates reflects the

aggressive targets forecasted in the program scenario. The potential for natural gas is lower

than electricity at 9.1% relative to baseline load in 2025. The lower potential for natural gas is in

part due to the low avoided costs of natural gas, which result in fewer measures passing cost

‐

effectiveness screening. Petroleum potential is estimated at 12.4% by 2025.

Table 1 | Cumulative Potential Relative to Sales Forecast, 2025

Electric Natural Gas Petroleum

Fuels

Program Potential 18.7% 9.1% 12.4%

Max Achievable Potential 23.3% 12.5% 19.8%

Economic Potential 30.1% 18.1% 24.7%

Figure 1 shows the historic and forecasted sales of electric energy. While the historic

consumption has been relatively flat over the past ten years, it is forecasted to gradually rise

through 2025. If Delaware were to capture the full program potential, consumption would

flatten out before beginning to decline within a few years.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 3 Figure 1 | Electric Energy Savings Relative to Sales Forecast

Figure 2 shows the historic and forecasted summer peak demand for electricity. Like electric

energy, the baseline forecast for summer peak demand is steadily rising. As seen in the graph

below, capture of the program potential would cause peak demand to level off and eventually

decline.

Figure 2 | Electric Demand Savings Relative to Sales Forecast

Figure 3 shows the historic and forecasted consumption of natural gas. The dip in usage

in 2010 reflects the temporary closing of the Delaware City Refinery, which consumes around

nine million MMBtu annually. Natural gas consumption is forecasted to rise steadily as

distribution networks expand and low prices make it an economically attractive energy source.

However, if the program potential were fully captured, gas consumption would level off and

then gradually decline.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 4 Figure 3 | Natural Gas Savings Relative to Sales Forecast

Figure 4 depicts the historic and forecasted consumption of petroleum fuels. Capture of the

program potential for petroleum would further reduce forecast loads that are already predicted

to drop as a result of the significant economic savings of conversions to gas and environmental

policies to reduce carbon and particulate emissions from heavy oil.

Figure 4 | Petroleum Fuel Savings Relative to Sales Forecast



### Program Potential Details

The results presented in this section, as well as all sector

‐ level sections hereafter, correspond

to the program potential. We focus on this scenario because it most closely reflects likely future

energy efficiency investments and plans in Delaware. Results in this section are broken out forStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 5 comparison across sectors and fuels. Further disaggregation of the sector totals can be found in

the sector

‐ specific results sections. Several notes related to the analysis and presentation in this

report are listed below.



###  All dollar values are in real 2013 dollars



###  All savings are net rather than gross, meaning they have been adjusted for

anticipated impacts of free

‐ ridership 3



###  When savings are presented for a specific year, they reflect the cumulative

annual savings in that year, accounting for measures that have expired



###  When costs and benefits are presented for different cost

‐ effectiveness tests,

they reflect the cumulative present value for the years 2014

‐ 2025



###  Electric savings are presented at the wholesale level or at the utility’s “point

of purchase,” and therefore have been “grossed up” to account for savings in

transmission line losses



###  Natural gas and petroleum savings do not include the negative impacts on

space heating from installation of efficient lighting



###  The Large Business Retrofit program includes the entire industrial sector



###  When program or sector level costs are shown by fuel, the non

‐ incentive

costs have been apportioned to fuels based on the distribution of total

resource benefits



###  In the tables of “top measures,” the “Percent of Total” column refers to the

measures’ savings relative to the entire sector, not just the sum of measures in

the list

Savings

Table 2 provides a summary of the cumulative savings in 2025, by sector and fuel, in both

absolute terms and relative to the sales forecast. The commercial sector exhibits the greatest

potential for electric savings, followed by the residential sector and the industrial sector

respectively. This result can partially be attributed to higher usage in the commercial sector, but

also reflects the fact that commercial programs typically encounter lower barriers to adoption.

The industrial sector shows the most potential for natural gas savings in absolute terms, but

the lowest potential relative to the sales forecast. High absolute potential is due to the fact that

the industrial sector has higher gas consumption than the residential and commercial sectors

combined. Lower industrial savings relative to forecast reflects the fact that the industrial sector

can be difficult for efficiency programs to penetrate due to sophisticated, customized

operations. Another important consideration when reviewing the industrial savings is the fact

that the industrial sector in Delaware contains a small number of very large gas users, including

the Delaware City Refinery, whose participation in the program (or lack thereof) would skew

the results significantly. For the purposes of this analysis, we assumed that all industrial

customers participate in the program.

3 Free

‐ ridership refers to the fact that some program participants would have selected high

‐ efficiency options even in

the absence of the program. Savings from free

‐ riders are not included in overall program savings totals, but the

costs associated with these participants are.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 6 The residential sector shows the greatest potential for petroleum fuel efficiency due to the

prevalence of home heating oil, which makes up the majority of petroleum fuel sales.

Table 2 | Cumulative Program Potential by Sector, 2025

Cumulative

Savings 2025 % of Sales

Forecast

Electric (GWh) 2,709 18.7%

Residential 875 15.4%

Commercial 1,333 23.3%

Industrial 501 16.3%

Natural Gas (BBtu) 4,319 9.1%

Residential 1,125 10.6%

Commercial 1,233 11.5%

Industrial 1,962 7.6%

Petroleum Fuels (BBtu) 1,203 12.4%

Residential 708 13.9%

Commercial 380 18.6%

Industrial 115 4.6%

Table 3 shows the incremental annual savings for each fuel in absolute terms as well as

relative to load. The electric programs ramp up much faster and reach a higher level of savings

relative to sales than the other fuels. While there are multiple reasons for this, the most

significant is simply that there are more opportunities for electric efficiency. Electric savings

decline after 2020 due to codes and standards that increase baselines, and predicted increases in

free

‐ ridership as the programs begin to achieve market saturation.

Table 3 | Incremental Annual Savings by Fuel

2014 2015 2016 2017 2018 2019 2020

‐ 2025

Incremental Annual Savings

Electric (GWh) 58 101 154 219 294 348 370 339

Natural Gas (BBtu) 68 145 216 322 446 546 598 609

Petroleum Fuels (BBtu) 18 49 69 96 132 159 171 159

Savings relative to forecast

Electric 0.4% 0.8% 1.2% 1.6% 2.2% 2.5% 2.7% 2.3%

Natural Gas 0.2% 0.3% 0.5% 0.7% 1.0% 1.2% 1.3% 1.3%

Petroleum Fuels 0.2% 0.5% 0.7% 0.9% 1.3% 1.5% 1.7% 1.6%

Note: Savings for years 2021

‐ 2024 are omitted from the table for simplicity and are similar to savings

presented for years 2020 and 2025Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 7 Economics

Table 4 shows the cumulative economic impacts to the Delaware economy that would result

from implementing programs to achieve the program potential through 2025. This scenario is

highly cost

‐ effective from a Total Resource Cost Test perspective. In addition, the results by

sector are consistent with similar program portfolios of this type around the country. Total

benefits amount to nearly $4 billion from an investment of roughly $1.7 billion. Net benefits are

approximately $2.3 billion in present value 2013 dollars. The benefit cost ratio indicates that the

programs would return $2.4 for every dollar invested. Nearly half of the benefits would accrue

to the commercial sector, with the balance coming mostly from residential and about 24%

coming from the industrial sector.

The majority of the costs and benefits accrue in the electric sector. This is primarily due to

the greater level of savings relative to forecast and the faster ramp

‐ up rate. Since the costs and

benefits are represented in present value dollars, savings that accrue in later years are less

significant due to discounting.

Table 4 | Portfolio Total Resource Cost Test Economics by Fuel and Sector, 2025

Costs

(Million$) Benefits

(Million$) Net Benefits

(Million$) BCR

Electric 1,438 3,424 1,987 2.4

Residential 449 990 541 2.2

Commercial 816 1,834 1,018 2.2

Industrial 172 600 428 3.5

Natural Gas 148 324 177 2.2

Residential 72 107 35 1.5

Commercial 29 64 34 2.2

Industrial 46 154 108 3.3

Petroleum Fuels 89 280 191 3.2

Residential 70 211 141 3.0

Commercial 13 48 35 3.6

Industrial 6 22 16 3.9

Total 1,674 4,029 2,355 2.4

Emissions

Table 5 shows the cumulative emissions reductions broken out by fuel type. Electricity

savings account for the majority of carbon dioxide emissions reductions while natural gas

savings account for the majority of nitrous oxide and sulfur dioxide emissions reductions.

Cumulative carbon dioxide emissions reductions are roughly equivalent to 3.4% of Delaware’s

annual building sector emissions. Similarly, the carbon dioxide emissions reductions areStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 8 roughly equivalent to removing approximately 36,000 cars from the road for each year of the

study period. 4

Table 5 | Cumulative Emissions Reductions by Fuel Type, 2025

Source Fuel CO 2 (metric tons) NO

x (metric tons) SO 2 (metric tons)

Electric 1,792,000 1,543 9,065

Natural Gas 229,000 201 1

Petroleum Fuels 81,000 105 65

Total 2,102,000 1,849 9,131

Other Impacts

Following completion of the initial potential study, DNREC requested some additional

analysis of the impacts of reaching the achievable potential savings estimate. A rate and bill

impact analysis considered the impacts on consumer retail rates and bills from Delaware

pursuing the energy efficiency programs described in the potential study. If approved, the cost

recovery and lower utility revenues from implementing efficiency programs would lead to

higher rates in the near term, but these would be offset by energy savings so that the average

customer bill is reduced in the longer term. Full results and discussion of the rate and bill

impact analysis can be found in Appendix O: Rate and Bill Impacts Memo.

Additionally, we developed an estimate of the job impacts of the energy efficiency

investments proposed as part of the potential analysis. Results suggest that investments in

energy efficiency commensurate with the levels forecasted in the potential study will support

between 3,000 and 4,800 job

‐ years annually. Full results and discussion of this analysis can be

found in Appendix P: Job Impacts Memo.



### COMPARATIVE INFORMATION FROM OTHER JURISDICTIONS

To provide some comparison data, we gathered information from several other jurisdictions

that have some form of coordinating council or oversight body with respect to energy

efficiency. The table below summarizes some of the main features and outcomes of this

research. Because the efficiency programs in Maryland and Vermont are not integrated gas and

electric offerings, we present only the electric savings for those states.

4 Calculated using the EPA estimated 4.8 metric tons of CO 2 emitted per vehicle per year.

http://www.epa.gov/cleanenergy/energy

‐ resources/refs.htmlStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 9 Table 6 | Comparative Information from Other Jurisdictions

State State

Population

(million) Oversight Body Program

Administrator(s) 2012 Savings

as a Percent

of Load* 2012

Total

Spending

($million) Electric Gas

Connecticut 3.6 Energy Efficiency

Board IOUs and CMEEC 1.1% 0.5% $150

Maryland 5.9 Public Service

Commission IOUs and SMECO 1.3% $167

Massachusetts 6.6 Energy Efficiency

Advisory Council IOUs 2.1% ** 1.1% $522

Rhode Island 1.1 Energy Efficiency

and Resource

Management

Council Single IOU 1.7% ** 0.8% $60

Vermont 0.6 Public Service

Board Efficiency Vermont 2.6% $40

* Savings as a percent of load were gathered from various state

‐ specific reports. When this information was not

available, reported savings from state reports were divided by state sales results from EIA Form 861 data to calculate

saving as a percent of load.

** Savings in the table are actual. Massachusetts and Rhode Island both have planned goals that exceed 2.5% by 2016.



### STUDY OVERVIEW

This section provides a brief overview of the study scope and approaches, with more detail

provided in the sections below. The Phase II potential study included the following key

components:



###  Two 12

‐ year efficiency potential scenarios for the period 2014

‐ 2025:

maximum achievable and program potential



###  A revised economic potential estimate



###  An estimate of the program potential for electricity, natural gas, and

petroleum fuels. Petroleum fuels included were analyzed in aggregate rather

than separately, and included distillate (#2 and #4) and residual (#6) fuel oil,

propane, and kerosene



###  An estimate of the program achievable potential for the residential,

commercial (including institutional and government), and industrial sectors.

The study was restricted to the buildings sector and does not include

transportation efficiency

The focus of Phase II was to revise the Phase I economic potential estimate and to estimate

the achievable efficiency potential based on initial conceptions of efficiency program designs and

delivery strategies. This program potential includes the likely amount of efficiency in response

to specified levels of program support in the form of financial incentives, marketing andStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 10 education, and technical support as well as consideration of real world market barriers that

often prevent people from adopting all cost

‐ effective efficiency. Overall, the programs are all

cost

‐ effective from a Total Resource Cost (TRC) Test perspective. The estimate also considers

the distribution of savings over time, allowing for gradual increases in potential as programs

and supporting infrastructure build capacity to support efficiency investments in the market.

The Phase II scope was limited in several important respects:



###  Relies primarily on existing available data, in some cases from outside

Delaware



###  Does not include combined heat and power (CHP) measures



###  Does not include demand response measures



###  Does not include a budget estimate for the maximum achievable potential

The Methodology section later in this report provides a detailed discussion of the methods

and assumptions used in the analysis. The steps below lay out the basic methodological

approach for assessing the two achievable potential scenarios.



###  Develop energy use forecasts



###  Disaggregate energy forecasts by sector, market segment, and end uses



###  Characterize efficiency measures



###  Develop measure penetrations



###  Screen measures and programs for cost

‐ effectiveness



###  Adjust for measure interactions, finalize model, and develop outputsStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 11 

## PROGRAM POTENTIAL DETAILED RESULTS

This section presents detailed results from our analysis of the program potential scenario.

Because our programs are designed to be customer

‐ focused and multi

‐ fuel, the results are

organized first by sector, then fuel. That is, our program designs assume a customer can receive

services and incentives for measures of any fuel

‐ type without having to engage with multiple

program entities. We present the savings within each sector on a fuel

‐ specific basis for those

readers who wish to better understand the nature of the efficiency opportunity as it relates to

energy consumption and technology types. Results for the residential sector are presented first,

followed by commercial and then industrial.



### RESIDENTIAL (INCLUDING INCO ME-ELIGIBLE SERVICES)

Sector Summary

Savings

Cumulative results through 2025 for the residential sector are presented by program and

fuel in Table 7 below. The majority of electric energy savings (63%) are from the Residential

Products Program, followed by Home Energy Services (18%) and Income

‐ Eligible Single Family

(11%). The same program ranking is seen with natural gas savings with Products comprising

44% of savings, Home Energy Services 25%, and Income

‐ Eligible Single Family 19%. Similarly,

Residential Products contributes the largest share of electric demand savings (42%), followed by

Home Energy Services (18%), and Income

‐ Eligible Single Family (18%). For petroleum fuels, the

largest share of savings comes from Home Energy Services (45%), followed by Products (32%),

and Income

‐ Eligible Single Family (17%).

Table 7 | Cumulative Residential Savings by Program, 2025

Program Electric

Energy

(MWh) Electric

Demand

(MW) Natural Gas

(BBtu) Petroleum

Fuels (BBtu)

Residential New Construction 37,919 4 44 16

Home Energy Services 154,100 33 280 316

Multi

‐ Family 13,215 3 44 11

Residential Products 548,167 46 497 224

Income

‐ Eligible Single Family 97,780 20 216 119

Residential Behavior 23,906 3 44 22

Total 875,087 109 1,125 708

Costs and Cost-Effectiveness

All of the proposed residential programs are cost effective through 2025 from a Total

Resource Cost (TRC) Test perspective. Program

‐ level benefit cost ratios (BCRs) range from 2.7Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 12 (Residential Products) to 1.1 (Residential Behavior). The Residential Behavior program has a

low BCR because the measures in that program only have a one

‐ year measure life. At the sector

level the residential programs have an aggregate BCR of 2.2 representing $687 million in net

benefits through 2025.

The results in Table 9 reflect an all

‐ fuels Program Administrator Cost (PAC) Test

perspective. As with the TRC results, all of the programs are cost

‐ effective with BCRs ranging

from 3.7 (Residential Products) to 2.0 (Residential Behavior). The sector level PAC test BCR is

2.2. The programs’ cumulative net benefits through 2025 are $820 million.

Finally, The Participant Test (Table 10) yields the highest BCRs of the three tests presented.

BCRs range from 3.6 (Behavior) to 7.3 (Products), with all programs at a 6.1 BCR. These high

BCRs indicate the large impact of the proposed program incentives on consumer economics and

the fact that avoided energy consumption is valued at the retail cost of energy, as compared to a

lower wholesale avoided cost used for the TRC and PACT.

Table 8 | Residential Total Resource Cost Test Economics by Pro gram

Program Costs

(Million$) Benefits

(Million$) Net Benefits

(Million$) BCR

Residential New Construction 31 56 25 1.8

Home Energy Services 167 316 149 1.9

Multi

‐ Family 20 27 8 1.4

Residential Products 258 703 445 2.7

Income

‐ Eligible Single Family 95 175 80 1.8

Residential Behavior 28 30 2 1.1

Total 571 1,278 707 2.2

Table 9 | Residential Program Administrator Cost Test Economics by Program

Program Costs

(Million$) Benefits

(Million$) Net Benefits

(Million$) BCR

Residential New Construction 27 56 30 2.1

Home Energy Services 138 315 176 2.3

Multi

‐ Family 15 25 9 1.6

Residential Products 186 703 517 3.8

Income

‐ Eligible Single Family 93 175 82 1.9

Residential Behavior 28 60 32 2.1

Total 487 1,333 846 2.7Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 13 Table 10 | Residential Participant Cost Test Economics by Progr am

Program Costs

(Million$) Benefits

(Million$) Net Benefits

(Million$) BCR

Residential New Construction 19 83 64 4.4

Home Energy Services 116 429 312 3.7

Multi

‐ Family 15 43 28 2.9

Residential Products 215 1,020 805 4.7

Income

‐ Eligible Single Family 67 261 194 3.9

Residential Behavior 20 60 40 3.0

Total 452 1,896 1,444 4.2



### Residential Electric Detail

Figure 5 and Table 11 highlight the key role that lighting plays in achieving the proposed

electric energy savings goals. Indoor lighting contributes 46% of total electric energy savings by

2025. Of the top ten electric energy savings measures, six are lighting measures, all of which are

light emitting diode (LED) measures. The programs also support compact fluorescent lamps

(CFLs) through both retail and direct installation efforts. CFLs make important near

‐ term

program savings contributions but support for these measures ceases in 2017 as LED prices are

expected to decline significantly and represent a better lighting technology choice for

consumers. After lighting, the next largest end use savings contributions come from space

heating (17%), refrigeration (10%), and water heating (8%). In addition to the six lighting

measures the other top ten electric savings measures are related to space heating (heat pump

duct sealing), water heating (heat pump water heaters), cooling (air sealing), and refrigeration

(refrigerator retirement).Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 14 Figure 5 | Residential Electric Energy Savings by End Use, 2025

Table 11 | Residential Electric Energy Top Saving Measures, 202 5

Measure Name Cumulative MWh

(2025) Percent

of Total TRC

BCR

LED Screw Based Lamp retail 450 to 1600 Lumens 129,852 14.6% 5.1

LED Direct Install 89,857 10.1% 4.8

Exterior LED >1600 Lumens 45,586 5.1% 8.6

Exterior LED 450 to 1600 Lumens 45,586 5.1% 6.5

Electric Heat Pump Water Heater <55gal 43,971 4.9% 1.6

Air Sealing –Heat 43,220 4.9% 1.1

Air Sealing –Cool 37,157 4.2% 2.8

LED Screw Based Lamp retail >1600 Lumens 36,342 4.1% 5.5

Refrigerator Retirement 35,349 4.0% 2.3

LED Screw Based Lamp retail <450 Lumens 34,179 3.8% 4.4

Total 541,099 60.8%

While cooling only contributes 7% to electric energy savings, it comprises the largest share

of electric demand savings (51%) given the high coincidence of cooling with the summer peak

demand period (Figure 6). After cooling, the next largest end use contributions to demand

savings are indoor lighting (24%) and refrigeration (8%). This latter end use category consists of

behavior program activities. Four of the top ten electric demand savings measures (Table 12) are

cooling related measures with air sealing making the largest contribution (43%). There are also Lighting

Space Heating Refrigeration Water Heating Cooling Plug Loads Miscellaneous Elec Total Kitchen/LaundryStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 15 three lighting measures and one refrigeration measure among the top ten electric demand

measures.

Figure 6 | Residential Electric Demand Savings by End Use, 2025

Table 12 | Residential Electric Demand Top Saving Measures, 202 5

Measure Name Cumulative MW

(2025) Percent

of Total TRC

BCR

Air Sealing –Cool 33 33.7% 2.8

LED Screw Based Lamp retail 450 to 1600 Lumens 10 9.9% 5.1

High performance window –Cool 6 6.5% 4.7

Duct sealing –Cool 6 6.3% 3.0

Pool Pump 5 5.6% 3.7

Refrigerator Retirement 4 3.6% 2.3

LED Direct Install 3 3.4% 4.8

Efficient Window AC Tier I 3 2.9% 1.1

Enhanced Behavior Based Efficiency Initiative 3 2.8% 1.2

LED Screw Based Lamp retail >1600 Lumens 3 2.8% 5.5

Total 76 77.6%



### Residential Gas Detail

Natural gas usage in the residential sector is largely limited to space heating, hot water, and

cooking. Because the vast majority of savings are attributed to space heating we are not

including a pie chart of the savings by end use. Space heating accounts for 86% of the gas Cooling

Indoor Lighting Refrigeration Miscellaneous Kitchen/Laundry Plug Loads Behavior Water HeatingStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 16 savings, with an additional 10% from water heating measures. The remaining 4% are from

behavioral program activities. Similarly, seven of the top ten gas savings measures are related to

space heating and two are related to hot water (Table 13). The top three measures alone

– air

sealing (33%), WiFi thermostats (24%), and ENERGY STAR furnaces (15%)

– represent over half

of all cumulative residential sector natural gas savings by 2025.

Table 13 | Residential Natural Gas Top Saving Measures, 2025

Measure Name Cumulative

BBtu (2025) Percent

of Total TRC

BCR

Air Sealing, Fossil Fuel –Heat 355 31.7% 1.4

WiFi Thermostats 259 23.1% 2.4

Gas Furnace ENERGY STAR 162 14.5% 2.5

Insulation, Fossil Fuel –Heat 67 5.9% 1.3

High Performance Windows 64 5.8% 1.8

LF Showerhead 56 5.0% 3.6

Enhanced Behavior Based Efficiency Initiative 44 3.9% 1.6

High Efficiency Gas Storage Water Heater 39 3.5% 1.7

Duct Sealing, Fossil Fuel –Heat 32 2.9% 5.5

High

‐ Efficiency Boiler 15 1.3% 1.1

Total 1,092 97.5%



### Residential Petroleum Detail

Space heating opportunities represent nearly half of residential petroleum fuels savings, at

94% of cumulative savings by 2025, due to its nearly exclusive use as a heating fuel. The

remaining 6% of savings are split evenly between hot water measures and behavioral program

activities. Seven of the top ten fuel savings measures are space heating measures (Table 14).

Note, however, that one of these measures is an oil

‐ to

‐ heat

‐ pump fuel displacement measure. 5

As with natural gas, air sealing contributes the most savings of all petroleum fuel measures

(32%), followed by WiFi thermostats (23%) and heat pump displacement (20%).

5 Fuel displacement refers to the fact that in many instances, mini

‐ split heat

‐ pumps do not completely replace

existing fossil

‐ fuel heating systems, but rather displace some portion of the heat load served by the fuel.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 17 Table 14 | Residential Petroleum Fuels Top Saving Measures, 202 5

Measure Name Cumulative

BBtu

(2025) Percent

of Total TRC

BCR

Air Sealing, Fossil Fuel

‐ Heat 223 31.6% 4.5

WiFi Thermostats 162 22.9% 8.0

Oil/LP to Ductless Mini Split Heat Pump 141 20.0% 3.9

High Performance Window 43 6.0% 5.6

Insulation, Fossil Fuel

‐ Heat 42 5.9% 4.2

Oil Furnace ENERGY STAR 22 3.1% 1.7

Enhanced Behavior Based Efficiency Initiative 22 3.1% 5.4

Duct Sealing, Fossil Fuel

‐ Heat 20 2.8% 17.8

High

‐ Efficiency Boiler 9 1.3% 2.7

Low Flow Showerhead 7 1.1% 12.0

Total 691 97.8%



### COMMERCIAL AND INDUSTRIAL

Sector Summary

Because the non

‐ residential programs are designed to serve both the commercial and

industrial sectors with a unified approach, we first present the combined program

‐ level results

for these two sectors. To acknowledge and demonstrate the differences in energy consumption

patterns and available efficiency opportunities between these two sectors, we then present fuel

‐ specific detailed savings results individually for each sector in the subsequent sections. No cost

‐

effectiveness results are presented at the sector or fuel level. This mirrors our analytical

approach; whereas our program suite is designed to provide comprehensive coverage across all

fuels for both the commercial and industrial sectors, our analysis is based on an understanding

of how commercial and industrial customers use energy differently. For the purposes of our

analysis, this only affects the Large Business Retrofit Program. Because even smaller industrial

customers will likely be too large to qualify for the Small Business Retrofit Program and new

construction activity in the industrial sector is likely to be low during the analysis period, the

analysis assumes that all savings in the industrial sector are realized in the Large Business

Retrofit Program.

Savings

Cumulative results through 2025 for the commercial and industrial sectors are presented by

program and fuel in Table 15 below. The C&I Lost Opportunity Program achieves the largest

electric energy savings, with 45% of the sector total, followed closely by Large Business Retrofit

(43%). The Small Business Retrofit Program has significantly lower savings (12%) due to its

focus on smaller energy users. The same ranking is seen with electric demand savings, with the

Lost Opportunity Program responsible for the majority of savings (52%) and the Large Business

Retrofit Program achieving 36% of the total. For fuel savings, the order is changed, with the

Large Business Retrofit Program achieving a large majority of gas savings (77%), and a smallStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 18 majority of petroleum savings (53%). This is due to significant gas savings opportunities from

industrial customers in the Large Business Retrofit Program. For petroleum fuels, the largest

share of savings comes from the Large Business Retrofit Program (53%), followed by the Lost

Opportunity Program (33%), and the Small Business Retrofit Program (14%).

Table 15 | Cumulative Commercial and Industrial Savings by Prog ram, 2025

Program Electric

Energy

(MWh) Electric

Demand

(MW) Natural Gas

(BBtu) Petroleum

Fuels (BBtu)

C&I Lost Opportunity 823,568 148 459 161

Small Business Retrofit 219,746 33 290 70

Large Business Retrofit 790,502 103 2,446 263

Total 1,833,816 284 3,195 495

Costs and Cost-Effectiveness

The tables below show the cost

‐ effectiveness of the commercial and industrial programs

from the perspectives of the Total Resource, the Program Administrator, and the Participant

Cost Tests. As shown in Table 16, all of the proposed commercial and industrial programs are

cost

‐ effective through 2025 from a Total Resource Cost (TRC) Test perspective. Program

‐ level

benefit cost ratios (BCRs) range from 1.8 (Small Business Retrofit) to 2.7 (both C&I Lost

Opportunity and Large Business Retrofit Programs). At the sector level, the C&I programs have

an aggregate BCR of 2.5 representing $1.63 billion in net benefits through 2025.

Table 16 | Commercial and Industrial Total Resource Cost Test E conomics by Program

Program Costs

(Million$) Benefits

(Million$) Net Benefits

(Million$) BCR

C&I Lost Opportunity 413 1,122 708 2.7

Small Business Retrofit 200 354 154 1.8

Large Business Retrofit 469 1,246 776 2.7

Total 1,083 2,721 1,638 2.5

The results in Table 17 reflect an all fuels Program Administrator Cost (PAC) Test

Perspective. As with the TRC results, all of the programs are cost

‐ effective with BCRs ranging

from 2.2 (Small Business Retrofit) to 5.4 (Large Business Retrofit). The sector level PAC test BCR

is 4.1. The programs’ cumulative net benefits through 2025 are $1.87 billion. Finally, The

Participant Test (Table 18) yields the highest BCRs for the Lost Opportunity and the Small

Business Retrofit program. The Large Business Retrofit Program is the only program with a

lower BCR for the Participant Test because, given the higher incremental costs of retrofit

projects, the utility pays a smaller percent of the total measure cost.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 19 Table 17 | Commercial and Industrial Program Administrator Cost Test Economics by

Program

Program Costs

(Million$) Benefits

(Million$) Net

Benefits

(Million$) BCR

C&I Lost Opportunity 255 1,033 778 4.1

Small Business Retrofit 137 305 168 2.2

Large Business Retrofit 209 1,139 930 5.4

Total 601 2,477 1,876 4.1

Table 18 | Commercial and Industrial Participant Cost Test Econ omics by Program

Program Costs

(Million$) Benefits

(Million$) Net

Benefits

(Million$) BCR

C&I Lost Opportunity 380 1,072 693 2.8

Small Business Retrofit 180 413 233 2.3

Large Business Retrofit 422 1,179 757 2.8

Total 981 2,664 1,683 2.7



### Detailed Results by Sector and Fuel

Commercial Electric Detail

Figure 7 shows the electric savings by end use from the commercial sector. Indoor lighting

captures significantly more savings than any other end use and makes up just over half the total

savings. As seen in Table 19, lighting measures represent seven out of the top ten measures. In

fact, the top three lighting measures are all LEDs and make up almost a third of the entire

savings from the portfolio. The two High Efficiency Fixtures/Design measures represent

efficient lighting for new construction and major renovation projects.

The other half of the savings is roughly split between cooling, whole building, and other

end uses. Whole building represents measures such as commissioning and behavioral measures

that affect the consumption of multiple systems within a building. As Table 19 indicates, retro

‐ commissioning is the largest measure in this end use category.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 20 Figure 7 | Commercial Electric Energy Savings by End Use, 2025

Note: ‘Other End Uses’ represents savings from data centers, space heating, food service, water

heating and other miscellaneous end uses.

Table 19 | Commercial Electric Energy Top Saving Measures, 2025

Measure Name Cumulative

MWh

(2025) Percent

of Total TRC

BCR

LED Recessed Fixture 170,093 12.8% 2.1

LED Linear Lamps 152,836 11.5% 1.5

LED High

‐ Low Bay 125,596 9.4% 2.1

Retro

‐ commissioning 58,401 4.4% 9.6

Occupancy on/off Lighting Control 51,407 3.9% 3.5

High Efficiency Plug Loads 46,912 3.5% 4.9

LED Lamp, Standard and Decorative 44,384 3.3% 4.7

HE fixtures/design Tier III 42,846 3.2% 1.9

HE fixtures/design Tier II 35,266 2.6% 1.9

Optimize Unitary HVAC Distribution and Control Systems 35,045 2.6% 6.5

Total 762,787 57.3%

Figure 8 shows the electric demand savings by end use from the commercial sector. While

lighting continues to be a significant source of savings, cooling achieves significantly more

demand savings than energy savings. Because savings from cooling measures are highly

coincident with the system’s peak energy period, it is nearly equal to the savings from indoor Indoor Lighting

Cooling Whole Buliding Refrigeration Plug Loads

Ventilation

Outdoor Lighting Other End UsesStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 21 lighting measures. This is also reflected in the top ten demand saving measures, where cooling

measures consist of six of the top ten measures, as opposed to only one of the top ten measures

for electric energy savings. The measures listed in Table 20 represent only the cooling end use

for the measures; the heating end use for these measures are not among the top saving

measures.

Figure 8 | Commercial Electric Demand Savings by End Use, 2025

Table 20 | Commercial Electric Demand Top Saving Measures, 2025

Measure Name Cumulative MW

(2025) Percent

of Total TRC

BCR

LED Recessed Fixture 23 9.9% 2.1

LED Linear Lamps 21 8.7% 1.5

LED High

‐ Low Bay 19 7.9% 2.1

Optimize Unitary HVAC Distribution and Control Systems 18 7.8% 6.5

Duct Sealing –Cool* 10 4.2% 23.9

High

‐ Efficiency Chillers Tier II 10 4.2% 2.4

Demand Controlled Ventilation –Cool* 10 4.1% 13.9

High

‐ Efficiency Air Conditioning CEE Tier II 9 4.0% 1.7

Retro

‐ commissioning 9 3.9% 9.6

Optimize Chiller Distribution and Control Systems 7 3.1% 3.4

Total 136 57.9%

*Measures are labeled with the suffix “cool” because these measures result in both the cooling and heating end and

were divided into two line items for purposes of measure characterization and reporting Indoor Lighting

Cooling Elec Total Refrigeration Plug Loads Other End UsesStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 22 Commercial Natural Gas Detail

Figure 9 shows the natural gas savings by end use from the commercial sector. Space

heating and whole building measures make up 90% of the total savings. Whole building refers

to measures such as retro

‐ commissioning and integrated building design that affect both space

heating and water heating systems. As shown in Table 21, even though space heating measures

have the most savings, the single largest measure, retro

‐ commissioning, is actually associated

with the whole building end use. Two other measures on the top ten list

– integrated building

design and deep energy retrofit

– are also associated with the whole building end use. Thus,

this end use consists of a smaller number of measures with relatively high savings, while space

heating savings are captured with a larger number of measures with relatively lower savings.

Figure 9 | Commercial Natural Gas Savings by End Use, 2025

Space Heating Whole Building Water Heating Food ServiceStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 23 Table 21 | Commercial Natural Gas Top Saving Measures, 2025

Measure Name Cumulative

BBtu

(2025) Percent

of Total TRC

BCR

Retro

‐ commissioning 156 21.2% 2.0

Duct Insulation and Sealing 132 18.0% 3.7

Programmable Thermostat 79 10.7% 6.5

Boiler/Furnace Burner Replacement 54 7.3% 3.9

Boiler Reset Controls 46 6.3% 4.3

Boiler Trim Control 37 5.0% 2.2

Gas High Efficiency Tank

‐ Type Water Heater 30 4.1% 3.2

High

‐ Efficiency Boiler 29 4.0% 1.1

Deep Energy Retrofit 26 3.6% 1.3

Integrated Building Design Tier I 20 2.7% 0.6

Total 609 82.9%

Commercial Petroleum Detail

Nearly three

‐ quarters of commercial petroleum fuel savings come from space heating.

Because savings are dominated by a single end use, we have elected not to show a chart. In

addition to space heating, another 26% of savings can be attributed to whole building measures.

Finally, a very small quantity of savings (~1%) will come from water heating efficiency. This

pattern is also reflected in the list of top ten measures, with six of the ten measures addressing

space heating and the remaining four addressing whole building. Whole building measures

impact the consumption of multiple systems within a building, such as commissioning and

behavioral measures.

Table 22 | Commercial Petroleum Fuels Top Saving Measures, 2025

Measure Name Cumulative

BBtu

(2025) Percent

of Total TRC

BCR

High

‐ Efficiency Boiler 38 21.3% 2.2

Duct Insulation and Sealing 32 17.9% 10.5

Retro

‐ commissioning 28 15.8% 5.8

Programmable Thermostat 19 10.8% 18.6

Boiler/Furnace Burner Replacement 13 7.3% 11.1

Boiler Reset Controls 11 6.2% 12.2

Boiler Trim Control 10 5.5% 5.5

Deep Energy Retrofit 5 2.7% 3.6

Integrated Building Design Tier I 4 2.0% 1.7

Behavioral Measures 3 1.7% 5.2

Total 161 91.2%Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 24 Industrial Electric Detail

Figure 10 shows the electric savings by end use from the industrial programs. As shown,

electric savings opportunities are relatively evenly distributed across end uses with no single

end use responsible for the majority of the potential. The industrial sector is highly

‐ dependent

on motors for material handling and processing, pump and fan applications, compressed air,

and refrigeration. Motors alone are responsible for nearly 60% of total electric energy

consumption. Perhaps unsurprisingly, motors represent 34% of total electric savings potential.

Figure 10 | Industrial Electric Energy Savings by End Use, 2025

As shown in Error! Not a valid bookmark self

‐ reference.

, duct and pipe insulation for

process heating and/or cooling applications has the highest potential for a single measure. This

measure typically exhibits low technical barriers and the opportunity is common to most

industries. In spite of the relative ease of implementation, this opportunity is commonly

ignored.

While only 9% of industrial electric energy is consumed by lighting, this end use is

responsible for 28% of total electric energy potential and two lighting measures

— efficient

fixtures and lamps and efficient lighting design

— appear in the top five measures. Achievable

savings for lighting measures relative to total load is very high due to the efficacy of current

LED technologies and the savings from advanced control technologies such as multi

‐ level

dimming.

The high savings for the whole building end use reflects the opportunities from measures

that save across all end uses such as energy information systems. These hardware

‐ based

systems provide real

‐ time information on energy usage and pricing to facility managers and

enable informed energy management decisions across all end uses. Process Heat

HVAC Whole Building Lighting

Whole Building

Refrigeration

Pumps

Compressed Air

Fans and Blowers MotorsStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 25 Table 23 | Industrial Electric Energy Top Saving Measures, 2025

Measure Name Cumulative MWh

(2025) Percent

of Total TRC

BCR

Duct/Pipe Insulation 66,790 13.3% 3.0

Efficient Lighting Fixtures and Lamps 66,606 13.2% 1.9

Energy Information Systems 63,010 12.5% 5.4

Efficient Lighting Design 60,705 12.1% 7.7

Advanced Motor Designs 55,877 11.1% 6.7

Energy Management Systems 34,811 6.9% 2.0

Pump Efficiency Improvement 33,439 6.6% 10.3

Electric Supply System Improvements 28,122 5.6% 16.7

Fan System Efficiency 20,519 4.1% 3.7

Compressed Air System Management 16,183 3.2% 16.4

Total 446,061 88.6%

Figure 11 shows the electric demand savings by end use from the industrial sector. Because

both the overall industrial sector and the constituent end uses within a given facility typically

exhibit a more constant load profile than other sectors, the top energy saving measures and top

demand savings measures, as shown in Table 24, are nearly identical. The slight rearrangement

in the measure ranking is due to the fact that some measures, such as lighting opportunities,

have more impact at system peak relative to others.

Figure 11 | Industrial Electric Demand Savings by End Use, 2025

Process Heat

Whole Building HVAC Lighting

Whole Building

Refrigeration

Pumps

Compressed Air

Fans and Blowers MotorsStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 26 Table 24 | Industrial Electric Demand Top Saving Measures, 2025

Measure Name Cumulative MW

(2025) Percent

of Total TRC

BCR

Efficient Lighting Fixtures and Lamps 8 16.7% 1.9

Efficient Lighting Design 7 15.2% 7.7

Duct/Pipe Insulation 7 14.1% 3.0

Energy Information Systems 5 9.7% 5.4

Energy Management Systems 5 9.3% 2.0

Advanced Motor Designs 4 8.6% 6.7

Pump Efficiency Improvement 3 5.2% 10.3

Fan System Efficiency 2 5.1% 3.7

Electric Supply System Improvements 2 4.3% 16.7

Compressed Air System Management 1 2.5% 16.4

Total 44 90.7%

Industrial Natural Gas Detail

Natural gas savings are almost evenly distributed between the boiler (54% of total savings)

and process heat (44%) end uses. HVAC savings are marginal, consistent with the relatively

minor natural gas consumption associated with the HVAC end use. Similar to the electric

measure results, the list of top saving measure presented in Table 25 shows that improved

insulation for boiler systems exhibits the greatest single

‐ measure potential. By installing and

maintaining insulation on piping or otherwise reducing losses, significant savings can be

achieved with relatively minimal effort.

Process integration and process controls and management represent the second and fourth

most significant natural gas savings opportunities, respectively, responsible for combined total

of 22% of industrial natural gas portfolio savings. While all applications are unique, broadly

speaking, process integration ensures that, for facilities with multiple processes, components

and operations are well matched in terms of capacity and function. Particularly applicable to

the food and beverage, paper, chemical, and petroleum manufacturing industries, process

integration can reduce natural gas consumption by between 13 and 25%. As these industries

account for more than 84% of Delaware’s total industrial natural gas consumption, process

integration represents a significant savings opportunity, albeit at a relatively high cost because

of the technical knowledge required.

Boiler efficiency measures appearing on the list of the top ten measures contribute nearly

45% of total industrial portfolio natural gas savings. After improved insulation, load control

(i.e., installing controls to properly stage boiler systems), improved steam trap monitoring and

maintenance, and improved boiler process controls are the highest impact measures.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 27 Table 25 | Industrial Natural Gas Top Saving Measures, 2025

Measure Name Cumulative

BBtu (2025) Percent

of Total TRC

BCR

Improved Insulation 409 20.9% 15.7

Process Integration 263 13.4% 1.2

Load Control 193 9.9% 7.6

Process Controls and Management 180 9.2% 11.5

Automatic Steam Trap Monitoring 121 6.2% 30.2

Efficient Burners 119 6.1% 5.0

Improved Process Control 91 4.6% 8.4

Improved Separation Processes 82 4.2% 5.1

Steam Trap Maintenance 73 3.7% 17.4

Oxyfuel 64 3.2% 2.1

Total 1,594 81.2%

Industrial Petroleum Detail

As seen by comparing Table 25 and Table 26, the petroleum measure savings share much in

common with the natural gas opportunities. However, some natural gas measures do not

appear in the petroleum fuels analysis owing to the fact that petroleum fuels are typically not

used for the associated purposes. Overall, measure

‐ level BCRs are higher for petroleum

measures than natural gas measures reflecting the cost

‐ differential between the fuels.

Table 26 | Industrial Petroleum Fuels Top Saving Measures, 2025

Measure Name Cumulative

BBtu (2025) Percent

of Total TRC

BCR

Process integration 23 19.9% 1.6

Improved insulation 22 19.0% 21.6

Process Controls & Management 17 14.9% 16.1

Load control 10 9.0% 10.4

Fouling control 7 6.2% 14.6

Flare gas controls and recovery 7 5.7% 1.6

Automatic steam trap monitoring 6 5.6% 41.5

Improved process control 5 4.2% 11.5

Steam trap maintenance 4 3.2% 25.2

Improved separation processes 3 2.5% 6.9

Total 104 90.2%Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 28 

### COSTS, BUDGETS, AND SUPPLY CURVES

Table 27 shows the annual program budgets by sector. The rise in budgets generally tracks

the rise in savings. In both cases the trajectory is an S

‐ curve, with a steady start, steep growth in

the middle years, and a gradual plateau around 2020. This pattern reflects the reality that many

programs take several years to develop the relationships, market awareness, and workforce,

necessary to move high volumes of incentives while also achieving high levels of savings.

At its peak in 2020, the portfolio is estimated to cost $151 million, while saving roughly 2.5%

of annual electric load, and 1.3% of annual gas load. Given the level of savings, the budget in

2020 is comparable to other states with aggressive energy efficiency targets. The commercial

sector has the highest budget in the first year, reflecting the high start

‐ up costs of the Large and

Small Business Retrofit programs. The residential sector has higher budgets for the middle

years, 2015 through 2018, due to the quick ramp

‐ up of the Products program. The budgets for

the industrial sector follow the same pattern as the commercial retrofit programs, with a slow

start and steep growth in the middle years.

The residential and commercial budgets each account for roughly 45% of the total, with

industrial making up the remaining 10%. The industrial sector’s budgets are slightly lower than

the sector’s share of electric sales reflecting the fact that industrial savings can generally be

achieved at lower costs.

Table 27 | Budgets by Sector (Million$)

Sector 2014 2015 2016 2017 2018 2019 2020

‐ 2025

Residential 9 17 26 36 49 59 65 65

Commercial 11 14 23 35 51 64 70 58

Industrial 3 4 6 9 11 14 15 16

Total 22 34 55 80 111 137 151 139

Note: Budgets for years 2021

‐ 2024 are omitted from the table for simplicity and are similar to budgets

presented for years 2020 and 2025

Table 28 shows annual budgets for the residential sector programs. The Residential

Products program consistently has the highest budget over the course of the study period. The

products program is able to ramp

‐ up and deliver a high volume of incentives to the market

quickly because it operates in the retail and replacement markets. These markets do not require

the same level of trade ally and other market actor support and coordination that characterize

retrofit programs. Developing trade ally networks takes time, resulting in longer ramp

‐ up

schedules for the retrofit programs. The Residential Behavior program is fully operational by

the second year.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 29 Table 28 | Residential Budgets by Program (Million$)

Program 2014 2015 2016 2017 2018 2019 2020

‐ 2025

Residential New Construction 0.5 0.9 1.4 2.0 2.6 3.3 3.8 3.6

Home Energy Services 2.5 4.1 6.6 9.5 13.5 17.1 19.4 19.8

Multi

‐ Family 0.3 0.4 0.7 1.1 1.5 1.9 2.2 2.1

Residential Products 3.3 6.0 10.3 14.6 19.0 22.0 23.6 23.1

Income

‐ Eligible Single Family 1.5 2.5 4.1 6.1 8.9 11.6 13.3 13.6

Residential Behavior 0.5 2.9 2.9 3.0 3.0 3.0 3.0 3.1

Total 8.5 16.8 26.1 36.2 48.5 58.9 65.4 65.3

Note: Budgets for years 2021

‐ 2024 are omitted from the table for simplicity and are similar to budgets

presented for years 2020 and 2025

As shown in Table 29, the Large Business Retrofit program incurs the highest start

‐ up costs

in the first two years of program implementation. The C&I Lost Opportunity program becomes

the highest cost program in 2016 when it is anticipated that upstream programs could be fully

operational. Upstream programs are able to touch large segments of the market and deliver a

high volume of incentives by engaging directly with manufacturers and distributors. The Small

Business Retrofit program has the smallest budget over the course of the study period. The

program’s growth is constrained due to its high cost of savings. This pattern is typical in many

commercial and industrial portfolios.

Table 29 | Commercial and Industrial Budgets by Program (Millio n$)

Program 2014 2015 2016 2017 2018 2019 2020

‐ 2025

C&I Lost Opportunity 3 5 10 16 24 31 36 32

Small Business Retrofit 5 5 8 11 16 20 20 13

Large Business Retrofit 5 7 11 16 22 27 29 29

Total 14 18 29 44 62 78 85 74

Note: Budgets for years 2021

‐ 2024 are omitted from the table for simplicity and are similar to budgets

presented for years 2020 and 2025.

Table 30 shows the net present value of spending in various administrative categories over

the length of the study period for each program. Program cost subcategories vary substantially

among the programs reflecting the large differences in how these programs operate and how

they engage customers and trade allies. For example, the Residential New Construction

program is largely focused on recruiting builders and developers and requires significant

amounts of technical assistance for builder outreach, training, plan review, performance testing,

etc. Conversely, the Products program is a broad based consumer program. While retailer and

manufacturer recruitment and participation are critical to the Program’s success, educating and

motivating consumers requires substantial marketing and incentive expenditures.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 30 Table 30 | Budgets by Program and Subcategory (Present Value, M illion$)

Program General

Admin Technical

Assistance Marketing EM&V Performance

Incentive Incentives TOTALS

Res New Construction 1.1 7.2 0.8 0.6 0.8 10.6 21

Home Energy Services 4.2 19.5 12.2 3.1 4.1 65.9 109

Multi

‐ Family 0.5 2.3 0.8 0.3 0.5 7.7 12

Residential Products 5.0 6.5 24.4 3.9 5.3 93.6 139

Income

‐ Eligible Single Family 2.9 15.6 0.9 2.1 2.8 48.9 73

Residential Behavior 0.4 4.5 0.6 0.7 0.2 16.6 23

C&I Lost Opportunity 2.9 9.4 1.5 3.1 4.1 86.2 107

Small Business Retrofit 5.5 10.3 1.1 2.6 3.5 66.9 90

Large Business Retrofit 10.1 26.4 3.4 7.7 10.3 207.5 265

Total 32.4 101.7 45.5 24.2 31.6 603.9 839

Table 31 shows the hypothetical surcharge (sometimes referred to as the “System Benefit

Charge” or “SBC”) per unit of gas and electric consumption that would be required to fund the

budgets under the program potential scenario. The electric surcharge tracks the growth in

overall budgets, but never exceeds $0.008 per kilowatt hour, even when the program reaches its

peak spending in 2020. The surcharge estimates for Delaware compare favorably with similarly

aggressive states in the northeast due to the relative abundance of “low hanging fruit” in the

state. In other words, because Delaware does not have a long history of efficiency programs,

high savings should be easier and less expensive to achieve. Note also that the level of funding

and resulting surcharge may differ by sector depending on state policy.

Table 31 | Utility Surcharge Calculation

2014 2015 2016 2017 2018 2019 2020

‐ 2025

Sales Forecast

Electric (GWh) 13,031 13,179 13,317 13,439 13,566 13,698 13,827 14,481

Gas (BBtu) 41,649 43,242 43,956 44,646 44,896 45,234 45,519 47,214

Total Budget (Million$) 22 34 55 80 111 137 151 139

Ratepayer

‐ funded Portion* 19 29 47 68 94 116 128 118

Electric 16 25 39 57 79 98 108 99

Gas 3 5 7 11 15 19 21 19

SBC needed to meet budget

Electric ($/kWh) 0.0012 0.0019 0.0030 0.0042 0.0058 0.0071 0.0078 0.0069

Gas ($/MMBtu) 0.073 0.108 0.170 0.243 0.335 0.411 0.451 0.400

*It is assumed that 15% of the budget will be funded through alternative sources, such as RGGI proceeds

and forward capacity market revenues

The figures below show the cost curves for the achievable energy savings under the

program potential scenario. Each block corresponds to a particular end use within a sector. TheStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 31 width of each block represents the cumulative amount of efficiency potential in 2025, while the

height corresponds to the average net levelized cost of that grouping of efficiency potential. The

blocks are sorted and presented in order of increasing cost per unit of energy. It is difficult to

directly compare the costs of efficiency presented in the supply curves to the avoided costs of

energy for Delaware because the avoided electric costs used in this study vary considerably

depending on the energy period. However, it is notable that all the efficiency block costs are

below the summer and winter on

‐ peak costs, which are close to $0.11/kWh in 2014 and rising

thereafter.

The study found that achievable costs of electric efficiency start at negative $0.032/kWh of

savings from commercial cooling improvements. The study obtained negative levelized cost

values for some efficiency measures because it subtracted the value of non

‐ electric resource

savings (such as fossil fuel or maintenance savings) as well as avoided generating capacity costs

from the total resource cost of the technologies. Thus, measures with negative net levelized

costs would pay for themselves even if electric energy costs were zero.

As shown in Figure 12, the end use with the greatest electric efficiency potential is

commercial lighting. This is not surprising as commercial lighting upgrades have relatively low

market barriers and are implemented through proven program designs. However, the cost of

this end use is more expensive than might be expected due to this study’s emphasis on LED

rather than fluorescent technology, which is expected to remain comparatively costly in the near

term. Residential lighting, the second largest end use in terms of savings, benefits from similarly

well

‐ developed program designs, but can be achieved at lower costs than commercial lighting

because LED technology is more advanced for the relevant applications. In general, the savings

and costs of the entire portfolio are fairly evenly distributed among the three sectors.

Figure 12 | Electric Energy Supply CurveStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 32 Figure 13 demonstrates that industrial boilers and process heating upgrades provide the

greatest opportunity for natural gas savings. This finding bears out the fact that the industrial

sector is by far the largest consumer of natural gas and thus provides a significant opportunity

for efficiency savings. Residential space heating also has significant potential for gas efficiency,

though at a higher cost than the industrial end uses. This finding reflects the fact that residential

savings are generated by engaging many small customers, which requires significant

administrative resources, while industrial savings generally come from a much smaller group of

very large consumers. The whole building end use represents measures such as commissioning

and building design that impact multiple end uses within a building, which affect both space

heating and water heating.

Figure 13 | Natural Gas Supply Curve

Figure 14, the supply curve for petroleum fuels, is clearly dominated by residential space

heating. This finding is due to the fact that petroleum fuels, which include heating oils,

propane, and kerosene, are mostly used to heat people’s homes. The average price of petroleum

fuels is more than $20/MMBtu, suggesting that the efficiency potential identified by this study

would be a very economic investment for those customers.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 33 Figure 14 | Petroleum Fuels Supply CurveStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 34 

## SENSITIVITY ANALYSES

Sensitivity analyses assess the impacts of changes in certain key input variables. This study

uses sensitivity analyses to examine the impact of alternative assumptions for the discount rate,

the avoided costs, and the value of reduced air pollution, as used to assess the costs and benefits

of energy efficiency investments. The following table shows the sensitivity analyses that were

performed.

Table 32 | Summary of Sensitivity Analyses Performed

Input Base Case Sensitivity Case

Discount rate 3%, as recommended by the U.S.

Department of Energy as a societal

discount rate for clean energy

analysis 6%, placing a lower value on future

costs and benefits

Avoided costs Annual avoided costs by fuel type,

as developed for this study Avoided costs 50% higher than the

base case

Externalities No benefits for externalities Externality benefits of $50/tonne 6 of

reduced CO 2 emissions

A higher discount rate has the effect of placing a lower value on future costs and benefits.

For efficiency measures the costs are generally incurred at the time of installation while the

benefits of energy savings occur over the life of the measure. A higher discount rate thus lowers

the value of the future energy savings relative to the costs, which lowers the cost

‐ effectiveness

of measures and programs.

Higher avoided costs reflect the possibility that the cost of energy may increase due to

market disruptions. Projected avoided costs of electricity and natural gas have decreased in

recent years due to the sharp decline in the cost of natural gas. The economic recession that

started in 2008 reduced demand for energy in general, which has also suppressed the cost of

energy. While energy costs are expected to increase gradually over the study period,

disruptions to energy supplies are always possible. The scenario of higher avoided costs

demonstrates the value that would come from the increased benefits of future energy savings.

Many efficiency programs include the benefits of reduced air pollution or other externalities

in their assessment of the benefits of energy savings. For this sensitivity we have assumed

externalities equivalent to $50/tonne of reduced CO 2 emissions. This is consistent with the U.S.

government’s current recommendations for a social cost of carbon, which increased

substantially in 2013. 7 A value of $50/tonne is somewhat conservative. In their Fourth

6 1 tonne

= 1 metric ton

= 1.102 U.S. short tons. 1 U.S. short ton

= 2000 lbs.

7 http://www.epa.gov/climatechange/ EPAactivities/economics/scc.htmlStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 35 Assessment Report, the Intergovernmental Panel on Climate Change (IPCC) notes that the

methodology used to estimate the social cost of carbon very likely underestimates the

associated damages. 8 The 2013 Avoided Energy Supply Cost Study for the New England states

assesses externalities at a value of $100/tonne of CO 2

. 9

For assessing the cost

‐ effectiveness and net benefits of efficiency measures and programs,

the value of $50/tonne for reduced CO 2 emissions is roughly equivalent to having avoided

energy costs that are 25% higher than those used in the base case for this study. Likewise, the

sensitivity of 50% higher avoided costs is roughly equivalent to a cost of $100/tonne for reduced

CO 2 emissions. The sensitivity analysis for 50% higher avoided costs can therefore be used as a

proxy for $100/tonne externalities for CO 2 reductions.

To perform each sensitivity analysis we modeled the impacts of changing the given inputs

to determine the associated changes to measure and program cost

‐ effectiveness and net

benefits. In general the sensitivity cases do not change whether individual measures pass or fail

cost

‐ effectiveness screening, except for a few marginal measures (i.e., those with a benefit

‐ cost

ratio close to 1.0). Therefore, the impact on overall savings is generally quite low. Because the

base case scenario is based on specific annual savings targets, we adjusted measure penetrations

so that the sensitivity scenarios would have the same savings as the base case. For example, if a

marginal measure was no longer cost

‐ effective in the case of the higher 6% discount rate, we

assumed the penetration of other measures would increase to offset that measure no longer

being included in the analysis. This approach also makes it easier to compare the effect of each

sensitivity case relative to the base case in terms of benefit

‐ cost ratios (BCRs) and net benefits, as

the savings are the same as in the base case.

Table 33, Table 34, and Table 35 show the results for each sensitivity scenario. For the case of

a higher discount rate, both the future costs and benefits are more highly discounted than for

the base case, but the impact is greater on the future benefits. The associated program benefit

BCRs are thus lower, but all programs remain cost

‐ effective. The overall portfolio BCR changed

from 2.4 in the base case to 2.1, and total net benefits decreased from $2.3 billion to $1.4 billion.

For the case of 50% higher avoided costs, the benefits are much higher than in the base case,

which results in substantially higher BCRs for all programs. The overall portfolio BCR is 3.1,

compared to 2.4 in the base case. Total net benefits increased from $2.3 billion to $4.0 billion.

For the case of including externalities of $50/tonne of reduced CO 2 emissions, the benefits

are much higher than in the base case, but with less of an impact than the sensitivity for higher

avoided costs (which are roughly equivalent to $100/tonne of reduced CO 2 emissions). The

overall portfolio BCR changed from 2.4 in the base case to 2.7, and total net benefits increased

from $2.3 billion to $3.2 billion.

8 http://www.ipcc.ch/publications_and_data/publications_i pcc_fourth_assessment_report_synthesis_report.htm

9 http://www.synapse

‐ energy.com/Downloads/SynapseReport.2013

‐ 07.AESC.AESC

‐ 2013.13

‐ 029

‐ Report.pdfStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 36 Table 33 | Sensitivity for 6% Discount Rate

Sensitivity Scenario

‐ 6% Discount Rate Base Case

Program Costs

(Million$) Benefits

(Million$) Net Benefits

(Million$) BCR Costs

(Million$) Benefits

(Million$) Net Benefits

(Million$) BCR

Residential New

Construction 25 36 11 1.4 31 56 25 1.8

Home Energy Services 133 202 69 1.5 166 306 139 1.8

Multi

‐ Family 8 12 5 1.6 20 27 7 1.4

Residential Products 198 464 267 2.3 256 695 439 2.7

Low Income Single Family 77 114 37 1.5 95 171 76 1.8

Residential Behavior 24 25 1 1.0 28 29 1 1.1

C&I Lost Opportunity 306 734 429 2.4 412 1,118 707 2.7

Small Business Retrofit 128 209 80 1.6 199 352 153 1.8

Large Business Retrofit 330 809 479 2.5 469 1,242 774 2.7

Total 1,228 2,605 1,377 2.1 1,676 3,997 2,321 2.4

Table 34 | Sensitivity for Externalities of $50/tonne of Reduce d CO 2

Sensitivity Scenario

– Higher Avoided Costs Base Case

Program Costs

(Million$) Benefits

(Million$) Net Benefits

(Million$) BCR Costs

(Million$) Benefits

(Million$) Net Benefits

(Million$) BCR

Residential New

Construction 36 84 48 2.3 31 56 25 1.8

Home Energy Services 188 457 269 2.4 166 306 139 1.8

Multi

‐ Family 26 44 18 1.7 20 27 7 1.4

Residential Products 293 1,029 736 3.5 256 695 439 2.7

Low Income Single Family 108 257 149 2.4 95 171 76 1.8

Residential Behavior 26 42 15 1.6 28 29 1 1.1

C&I Lost Opportunity 466 1,646 1,180 3.5 412 1,118 707 2.7

Small Business Retrofit 231 532 301 2.3 199 352 153 1.8

Large Business Retrofit 500 1,799 1,299 3.6 469 1,242 774 2.7

Total 1,875 5,890 4,015 3.1 1,676 3,997 2,321 2.4Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 37 Table 35 | Sensitivity for 50% Higher Avoided Costs

Sensitivity Scenario

– Higher Avoided Costs Base Case

Program Costs

(Million$) Benefits

(Million$) Net Benefits

(Million$) BCR Costs

(Million$) Benefits

(Million$) Net Benefits

(Million$) BCR

Residential New

Construction 36 84 48 2.3 31 56 25 1.8

Home Energy Services 188 457 269 2.4 166 306 139 1.8

Multi

‐ Family 26 44 18 1.7 20 27 7 1.4

Residential Products 293 1,029 736 3.5 256 695 439 2.7

Low Income Single Family 108 257 149 2.4 95 171 76 1.8

Residential Behavior 26 42 15 1.6 28 29 1 1.1

C&I Lost Opportunity 466 1,646 1,180 3.5 412 1,118 707 2.7

Small Business Retrofit 231 532 301 2.3 199 352 153 1.8

Large Business Retrofit 500 1,799 1,299 3.6 469 1,242 774 2.7

Total 1,875 5,890 4,015 3.1 1,676 3,997 2,321 2.4Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 38 

## FRAMEWORK FOR PROGRAM ACHIEVABLE PORTFOLIO

UNDERSTANDING BARRIERS

The Energy Efficiency Gap

Implementation of efficient technologies and behavioral changes necessary to achieve

energy savings is far below what would be expected. First used by Hirst and Brown (1990), the

“energy efficiency gap” is a term that refers to the underinvestment in energy efficiency based

on what would be anticipated given the economic and social benefits. 10 Households,

governments, businesses, and manufacturers often fail to utilize cost

‐ effective technologies to

reduce energy consumption despite technical feasibility.

To explain the energy efficiency gap many have sought to identify the market barriers and

market failures that prevent people and organizations from achieving optimal levels of energy

efficiency. Although many different frameworks have been described, there appears to be much

consensus in the literature about the types of barriers that impact energy efficiency.



### Common Barriers to Economical ly Efficient Investment in EE

We developed a simplified set of five categories of barriers that we believe captures all of

the common types. The following sections provide further discussion of several barriers as well

as some of the potential solutions to overcome them. These barriers include split incentives, lack

of information, transaction costs, financial constraints, and lack of availability. Although this list

is not exhaustive, it touches on the most frequently cited and most important to overcome. 11

Appendix A presents a more detailed treatment of barriers to energy efficiency.

Split Incentives/Agency

Split incentives occur when the benefits and costs of investing in energy efficiency are

divided between two parties or agents. Often referred to as the “principal

‐ agent” problem, this

challenge emerges because the party responsible for making energy efficiency investment

decisions (the agent) is not the same party that benefits from the investment (the principal.) This

barrier is frequently described with regards to the rental property market. For example, in the

residential sector, approximately 80% of renters are responsible for paying their own utility

costs. 12 Another less frequently discussed example of a principal/agent challenge relates to

larger customers in the commercial and industrial (C&I) sectors. There, the employees who

have the power to make capital investment decisions may not be the same as those who manage

10 Hirst, E. and Brown, M. “Closing the Efficiency Gap: Barriers to the Efficient Use of Energy.” Resources,

Conservation and Recycling 3(4), 267

‐ 281. 1990.

11 For a broader discussion of market barriers, see: Eto, Prahl, and Schlegel, “Lawrence Berkeley National

Laboratory, “A Scoping Study on Energy

‐ Efficiency Market Transformation by California Utility DSM Programs.”

1996.

12 Harvard Joint Center for Housing Studies. “America ʹ s Rental Housing: Meeting Challenges, Building on

Opportunities.” 2011.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 39 the operations and maintenance of a facility and understand its energy use, nor is facility

energy consumption considered to be part of their job description.

Solutions to this problem typically involve aligning owner and renter interests. One way

this can be accomplished is through “green leases” that share the savings from efficiency

investments between owners who charge slightly higher rents in exchange for lower tenant

utility bills resulting from upgrades. Using the building code can also align incentives and

ensure that landlords who invest in reducing tenant energy consumption are not put at a

competitive disadvantage by leveling the playing field.

Lack of Information/Uncertainty

The quantity and complexity of information needed to make informed decisions about

investments in energy efficiency makes the information barrier a significant challenge to

overcome. Customers may not be aware of the building’s performance and the opportunities for

energy savings. Studies have suggested, for example, that only a small percentage of U.S.

households are aware of how much energy they consume and how to best reduce their energy

use. 13 Additionally, uncertain information can cause customers to consider investments in

energy efficiency to be risky. For example, commercial customers could worry that the

performance and quality of an unfamiliar technology might negatively impact their business.

Education and outreach is an obvious solution to barriers related to information and

uncertainty. Mass market, targeted marketing, and one

‐ on

‐ one discussions with customers can

all play a role. Providing comparative information and making energy consumption data

widely available may also help close the information gap. Benchmarking can help customers

understand where their energy use ranks among similar customers, while labeling and

disclosure requirements inform prospective owners and tenants of a building’s energy

performance.

Transaction Costs

A barrier that is closely related to the information barrier involves transaction costs. Even

when the information needed to help customers make decisions to invest in efficiency is

available, acquiring that information can be burdensome in terms of time, money, or both.

Customers must seek out information to identify and weigh their options and hire and manage

professionals to complete the work. Such actions require effort that is above and beyond what

they would likely undertake to maintain their current building. In the face of transaction costs,

maintaining the status quo is usually the easier and more comfortable option.

For those customers with the capability to engage in some level of discussion and analysis

over efficient investments, technical assistance can provide enough support to overcome the

initial hurdle of knowing how to analyze options and where to find relevant data. For smaller

customers, who typically have less available resources to address efficiency, the need for

understanding and transaction time can be nearly eliminated through direct install programs.

13 Ehrhardt

‐ Martinez, K. and Laitner, J., Editors, “People

‐ Centered Initiatives for Increasing Energy Savings.” 2010.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 40 Financial Constraints

Although many energy efficiency measures can save customers money in the long run,

implementing those measures often requires an additional investment. While customers receive

the benefits of efficiency over time, the majority of the costs for these measures are required at

the start of the project. Many customers weigh investments in terms of short payback periods

and place greater value on first costs rather than on the life

‐ cycle costs of the investment.

However, even customers who recognize the lifetime savings potential from efficiency may lack

the capital or borrowing power to make the initial investment.

Financial incentives in the form of direct payments to customers who invest in efficiency or

reduced prices on efficient equipment or services have been the mainstay of efficiency programs

for many years. These can be even more successful if paired with efforts to increase the

availability of and access to capital to cover the remaining cost of efficiency upgrades through

financing programs.

Lack of Availability

Customers with adequate resources and knowledge may be unable to improve efficiency if

products or knowledgeable contractors are not available. In some instances, suppliers or buyers

may exhibit market power and dominate supply channels, limiting competitors who produce

energy

‐ efficient products from penetrating the market. 14 Even in a competitive market, when

newer, more efficient products are not available from suppliers and distributors, customers may

not have access to the products when they need them.

Working with entities throughout the supply chain rather than solely at the retail level is

developing as a best practice strategy to quickly transform markets for efficient equipment.

Such “upstream” approaches take a variety of forms, but all are premised on the notion that

applying leverage higher up in the supply chain where dozens, hundreds, or even thousands of

units are involved in transactions is a more effective strategy than attempting to reach

customers one at a time.



### Multiple Barriers Require Multiple Strategies

Because the barriers described above exist throughout the supply chain, successful

programs don’t limit themselves to focusing on single solutions, but rather take a

comprehensive approach that addresses multiple barriers simultaneously. Strategies need to be

developed for providing solutions to barriers in three broad categories: structural,

informational, and financial.

Structural

Strategies for addressing structural barriers are based on answering this question, “if people

knew what to do to reduce their energy use, and if they had the money to do it, what

shortcomings in the ability of the market to deliver those energy saving solutions would need to

be addressed?” For example, if local distributors do not stock the desired high efficiency

14 Sullivan, “Behavioral Assumptions Underlying Energy Efficiency Program for Businesses.” February 2009.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 41 equipment, and customer replacement timelines require it to be in stock when their equipment

fails, a strategy must be devised for making that equipment available. Such a strategy might

include paying modest incentives to the distributor for agreeing to stock the equipment so that

it is readily available. If local contractors don’t have the knowledge and training required to

install the equipment so that it functions properly, a strategy must be devised for assuring that

they can get the necessary training.

Informational

Strategies for addressing informational barriers are based on making sure that the people

who are able to purchase high efficiency improvements understand both that the improvements

are available and that they can provide solutions for issues that they want to solve. For example,

the homeowner living in a drafty old farmhouse might not know that air sealing the home will

both provide monetary savings and improved comfort. Or she might think that there is

something that could be done to make the home more comfortable, but not know who to call.

This homeowner is then left to sort through the promises of advertisers and the suggestions of

family and friends, which may not lead to the answers she needs to be able to find.

Alternatively, she may know what to do and who to call, but may not understand how her

energy bill savings will offset the cost of the project over time. Typically successful programs

must address all of these informational issues in order to assure sufficient participation.

Financial

Much is made of financial barriers in relation to energy efficiency. The higher first

‐ cost of

high

‐ efficiency equipment is perhaps the primary reason that customers do not move forward

with energy efficiency projects even when structural and information barriers have been

removed. Financial barriers can include both the inability to pay for the improvements or

objection to the cost even by those who could pay if they so choose. Strategies must be

developed for both cases, and typically involve a combination of incentives and rebates, and in

some cases financing to spread the impact of the installation cost out over time.



### GATHERING BEST PRACTICES

Over the past several decades, energy efficiency programs have grown in prevalence across

the country. Although program administrators all seek to help customers reduce their energy

consumption, some programs have been more successful than others in terms of savings

achieved, customer participation and satisfaction, transferability, cost

‐ effectiveness, and impact

on the market. Generally speaking, the most effective energy efficiency programs are those that

best overcome the structural, informational, and financial barriers that hinder customers from

investing in efficiency. The ways in which the most successful programs overcome these

barriers share common characteristics and best practices. The following section of the report

discusses the current state

‐ of

‐ the

‐ art regarding best practices and strategies for achieving

measurable cost

‐ effective efficiency savings based on successful programs around North

America.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 42 

### Identifying Best Practices

Numerous studies and reports over the years have sought to identify the specific best

practices in program design to improve the development and outcomes of such programs in

other jurisdictions. A study published by the American Council for an Energy Efficient

Economy (ACEEE) in 2013 is perhaps the most recent and geographically diverse best practices

review included in the literature. 15 Based on our own and ACEEE’s observations of exemplary

programs as well as additional consideration of other best practices resources, Optimal distilled

a list of characteristics shared by many of the country’s leading efficiency programs. Best

practice programs seek to provide many of the following features.



###  Bundle financial incentives with technical and/or informational services



###  Target market niches and customer sub

‐ segments



###  Reach previously underserved customers with new programs and program

approaches; pilot test new program approaches



###  Simplify processes to make participation easier for customers



###  Provide “one

‐ stop

‐ shopping” and similar approaches



###  Work to build relationships and partnerships



###  Provide financing options, including an increasing variety of approaches and

varying degrees of involvement by program administrators (PAs) in project

financing



###  Work to incorporate the latest energy

‐ efficient technologies



### Identifying Programs Relevant to Delaware

While many of the exemplary programs discussed in the ACEEE report represent

approaches that Delaware should strive for, they may not be the most relevant programs to look

to for current program design efforts. It is generally advised that PAs first look to successful

models in other jurisdictions that can easily be transferred to new regions and be quickly

implemented to achieve near term savings. For example, effective initial commercial programs

often to include simpler approaches such as prescriptive incentives for efficiency measures like

lighting, HVAC systems, and motors.

Because they evolve over time and in response to efficiency efforts, market conditions in

nearby states may be more similar to Delaware than those of the best practice programs

described in the ACEEE report and elsewhere. As a result, our set of best practice programs

includes successful programs currently implemented in Vermont, Massachusetts, New

Brunswick, Maryland, Pennsylvania, and New York. We also note that a successful efficiency

program portfolio is greater than the sum of its parts. Simply implementing a series of best

practice programs may not necessarily lead to success. Rather, the portfolio should be designed

in such a way that the programs work together, are mutually supportive, achieve efficiencies of

administration, and are simple for customers to understand.

15 Nowak, et al., ACEEE Report Number U132, “Leaders of the Pack: ACEEE’s Third National Review of Exemplary

Energy Efficiency Programs.” June 2013Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 43 Please refer to Appendix B for a more detailed discussion of best practices in energy

efficiency programs.



### LEARNING ABOUT THE DELAWARE MARKET

Market Research

Objective and Limitations

Building on the findings of our market barriers and program best practice research, Optimal

conducted market research in Delaware to investigate specific market conditions and attitudes

of potential energy efficiency program participants in Delaware. This research was not intended

to be used for statistical analysis, but rather to gather qualitative information to identify and

fine

‐ tune those program strategies most likely to overcome efficiency market barriers specific to

Delaware. The findings also help to identify areas worthy of further research that would

optimize the operations of future efficiency programs.

Methodology

To conduct the market research, Optimal developed a questionnaire that covered four

primary content areas: Market Barriers, Equipment Availability, Specific Market Channels, and

Training and Labor (see Appendix C for full questionnaire). Optimal reached out to a total of 30

organizations and administered the questionnaire to 13 of those organizations over the phone.

Many of the organizations contacted were identified by DNREC. Optimal received additional

contacts through its conversations with respondents. The range of organizations interviewed

included large customers, industry groups, housing agencies), electrical and HVAC companies,

implementation contractors, and engineering design firms. A discussion of conclusions drawn

from our discussions is summarized in the sections below. For a complete discussion, see

Appendix E.

Market Barrier Findings

Optimal’s market research effort included questions to better understand the real and

perceived barriers to efficiency in Delaware and what could be solutions for overcoming or

removing them. Many of the responses received verified findings from our previous market

barrier research. For example, upfront costs for efficient technology and equipment are a

significant barrier to energy efficiency in Delaware just as in many other jurisdictions. To

address barriers to energy efficiency, many respondents agreed that funding opportunities such

as rebates and low interest loans would be most effective. Respondents pointed out that an

important program design consideration would be to determine which customers to target for

rebates versus loans and how to structure low interest loans.

Lack of awareness of energy efficiency opportunities, technologies, and benefits, is another

barrier that is prevalent in many jurisdictions. In Delaware, awareness presents a barrier to

energy efficiency for some customers and service providers more so than others. Many

respondents thought that architects and engineers were largely up to speed with efficient

technologies and practices, since they are required to complete ongoing professionalStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 44 development. Additionally, many of the large business customers with significant energy costs

were aware of or took steps to become aware of cost

‐ effective energy saving opportunities.

However, respondents thought there was less awareness among residential, smaller business

customers, and building and facility managers.

The difference in levels of awareness illustrates an important take away from this market

research: different customers face different challenges to implementing efficiency programs.

Developing a range of programs that segment and address specific markets can help to

overcome these segment

‐ specific barriers.

Some respondents indicated that they thought there was an attitude of indifference and

resistant to change among Delawareans and thought people may not understand the benefits of

saving energy. Several respondents indicated that reaching customers through channels they

are already looking to for information could be a particularly helpful outreach strategy. Many

interviewees also expressed a need for a simple, easy way to access information about program

offerings for all types of customers.

Product/Service Availability and Market Channel Findings

The interviews also included questions to determine whether efficient options are available

and being promoted in the marketplace and how efficient products move through the supply

chain. There was a general sense among respondents that efficient equipment and products are

available and that there is an adequate supply. Although some companies work with

distributors out of state, they thought that there are also local distributors.

Although respondents suggested that efficient equipment and products are available, they

are not necessarily being promoted to customers by the professionals selling them. They

indicated that building professionals will usually work to meet their customers’ selection

criteria and not try to convince them otherwise. Because cost is the primary driver for most

customers, standard, less expensive options are likely to be the most prevalent.

Training Findings

Training and education has been effective in other regions as a way to proliferate efficient

products, technology and practice. The Delaware market research survey included questions to

determine if training is needed in the State and if so, to what extent. Respondents indicated that

some training is currently available in the state; yet the vast majority of interviewees support

expanded training options for end users as well as building and equipment professionals. For

example, an HVAC company representative indicated that there is a lot of training for

technicians, but not enough training on energy systems thinking, at least not locally. She would

like to see training for everyone including HVAC companies, builders, and contractors. A

representative from a construction company agreed that training should be focused on the

whole system and points out that lighting and HVAC, etc. go “hand in hand.”

Partnering with organizations that already provide training or other support services to end

use customers will be an effective strategy for delivering training programs. For example, a

previous residential program participant thought small businesses and home owners could

benefit the most from training. In particular, she thought the Delaware Technical CommunityStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 45 College could provide resources for training. Additionally, a respondent from a housing agency

thought there might be a training opportunity for new home buyers in the area of assessing

home energy efficiency.

Additional Considerations

A respondent with a government agency pointed out that many of the agency’s municipal

buildings located in the center of Dover are historic buildings. It can be extremely expensive to

improve efficiency in these buildings since they need things like custom windows. To the extent

that there are many historic buildings in Delaware, additional consideration, guidance, or

program funding relevant to historic building owners may be worth exploring.

Market Research Conclusions

In many respects, customers in the state of Delaware face similar barriers to energy

efficiency as those in other jurisdictions. A focus on upfront costs and lack of awareness among

some customers represent significant challenges. Specific market segments and end users face

distinct barriers that should be considered and addressed through program offerings. Attitudes

in favor of energy efficiency may lag behind those states that have been implementing efficiency

programs for many years. However, efficiency equipment and product availability does not

appear to be a major hindrance to energy efficiency improvements. Training and partnership

opportunities may help to shift attitudes, educate customers about the benefits of efficiency, and

increase program participation. A concerted marketing and outreach effort that disseminates

information through channels customers already turn to for information could also help to

engage customers. Providing customers with a centralized place to find additional information

and simple and transparent participation processes will help to ensure customers take

advantage of energy savings opportunities in Delaware.



### Secondary Data Collection

Overview and Purpose

To supplement the Delaware

‐ specific primary market research, Optimal also collected a

variety of secondary data sources. These sources were used to inform inputs and assumptions

in the analysis that were not, or could not be, Delaware

‐ specific.

Regional Studies

When state

‐ specific data was not available, we attempted to use regional studies or data

from nearby states. Northeast Energy Efficiency Partnerships (NEEP), a regional non

‐ profit that

coordinates energy efficiency efforts, provided a number of such studies on topics including

incremental cost, emerging technologies, and load shapes. Similarly, we used a regional study

on avoided energy costs in New England to inform the costs we used to evaluate natural gas

efficiency.

National Studies

Many aspects of energy efficiency potential are not dependent on regional characteristics,

such as the efficiency of a heat pump water heater. In these cases it is appropriate to useStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 46 national studies or findings from other areas of the country. For this analysis, we relied on an

extensive set of reports and studies from around the country to inform a variety of assumptions

including individual measure characterizations, applicability factors, and measure penetrations.

One example is the series of reports the Department of Energy (DOE) publishes on Solid State

Lighting (i.e. LEDs). The DOE tracks the cost and efficiency of products for various lighting

applications which we use to inform our measure characterizations. In addition, the DOE

projects the future cost of LED lamps in their Multiyear Program Plan, which we use to forecast

the future performance of LED efficiency measures.

Evaluations and Technical Reference Manuals from Neighboring St ates

Evaluation studies and technical reference manuals (TRM) can often be treated like regional

studies in that their information is frequently relevant beyond the immediate home state. To

inform our assumptions about net

‐ to

‐ gross factors, we relied on the recent set of evaluations

from Maryland’s EmPower program as well as evaluations from Pennsylvania and New Jersey.

Technical reference manuals from Vermont and Massachusetts were used to develop measure

characterizations where the Delaware or Mid

‐ Atlantic TRM fell short.

Utility Filings

Utility filings with state regulatory agencies often include useful information on program

models, as well as details on the programs’ savings and cost performance. We collected various

utility filings to inform both program designs and our projections of non

‐ incentive costs related

to program delivery. This research included collecting both plans and annual reports for PECO

(PA), Baltimore Gas & Electric (MD), National Grid (RI, MA), Northeast Utilities (MA), and

Efficiency Vermont (VT).Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 47 

## PROGRAM PORTFOLIO DESIGN

This section presents our assumptions and preliminary descriptions of the programs on

which we based our program potential scenario. While we have provided a substantial amount

of detail regarding the programs and their major features, these should not be considered

“final” program designs. On the other hand, the reader should not assume that these programs

represent the only means by which to achieve savings comparable to those reported earlier.

Should Delaware proceed to develop a broad and robust portfolio of efficiency programs, we

believe that these program descriptions can serve as a starting point for discussions and

planning efforts.



### PROGRAM PHILOSOPHY, ASSUMPTIONS, AND CAVEATS

We developed the programs included in the program potential based on a wide range of

information sources and on our team’s own experiences with programs in several jurisdictions.

We also relied on the information gathered and reported on in the previous “Framework”

section. Our overall philosophy for developing the programs was to create a coordinated

approach to efficiency program services that builds capacity within the market place and

awareness among consumers in a sustained fashion over several years, thereby reaching

aggressive savings levels in a cost

‐ effective manner. Importantly, we did not assume any

particular model for delivering the programs and services that compose our portfolio. These

could be managed and delivered by individual utilities within the state, a state agency, a state

‐

wide third

‐ party administrator, or even some combination of these.

We caution that although we conducted some research into the nature of the efficiency

market in Delaware, additional knowledge and data would be necessary to move from these

program descriptions and concepts to detailed implementation plans. We do note that our

limited initial research did not reveal any major obstacles to successful implementation of

efficiency programs in Delaware.



### RESIDENTIAL CUSTOMER PROGRAMS

The proposed portfolio of residential programs has been developed to comprehensively

respond to the needs of Delaware’s homeowners and tenants. All key savings opportunities

from simple lighting improvements to whole

‐ house retrofits will be addressed through a

number of integrated and mutually supporting programs. These programs will engage and

motivate customers to participate by removing barriers and by offering technical support and a

variety of financial incentives. Trade allies will play a key role in the successful implementation

of these programs. Program components will be developed that recognize and build on existing

market channels for retailers, distributors, contractors, builders, manufacturers and other key

trade alliesStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 48 

### Program Concepts

Below is a table of program concepts used to develop the residential program designs

proposed in this report. Refer to Appendix F for full residential program concepts descriptions.

Table 36 | Residential Program Concepts

Market

Segment Delivery Model Services/

Incentives Provided Best Practice Features

New

Construction 3 rd party building

science-based

technical

assistance and

verification  Builder training

 Plan review

 Diagnostic testing

 Incentives for multifuel, comprehensive

projects

 Code compliance

support  Bundled incentives and technical

support for a comprehensive,

multiple end use , multiple fuels

approach

 One-stop shopping for

comprehensive services

Retrofit/Home

Energy

Services Comprehensive

certified

contractor-driven

delivery  Technician training and

certification

 Fuel-neutral single measure

incentives

 Higher incentives for

comprehensive savings

 Robust quality assurance

processes  Bundled incentives and technical

support for a comprehensive,

multiple end use , multiple fuels

approach

 Partnerships with contractors and

other interested organizations

 Target marketing to customer subsegments

 Financing

Multi-family Property

owner/manager

engagement

providing turnkey

solutions  Fuel neutral single measure

incentives

 Higher incentives for

comprehensive savings

 Construction management

oversight

 Robust quality assurance

processes  Targeting of specific sub-sectors of

the multi-family market (affordable

housing, market rate)

 Comprehensive solutions

addressing tenant units and

common areas and systems

 Relationships built with property

owners and managers for sustained

engagement

 Financial packaging including

incentives and loans

 One-stop shopping to receive a full

range of support services

Efficient

Products Instant and Mailin rebates at

retail  Upstream and midstream

incentives to manufacturers

and retailers

 Sales staff training

 Contractor training for

HVAC and DHW installation

practices  Partnerships with manufacturers,

distributors, a nd retailers

 Reach different customer segments

through multiple media channels

and targeted outreach

 Pursue alternative sales/promotional

venues to reach a underserved

customers

 Supports latest technologies

 Streamlined point-of-sale

participationStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 49 Market

Segment Delivery Model Services/

Incentives Provided Best Practice Features

IncomeEligible

Services Working through

existing services

and agencies to

engage eligible

populations  Rebates cover full measure

cost

 Address health and safety

issues to the extent

possible; leverage outside

funding where available  Partners with and extends the

coverage of existing income-eligible

efficiency services such as WAP

 Targets unique customer subsegment

 One-stop shopping to coordinate

with other programs, such as Multifamily new construction and Efficient

Products to provide benefits in all

income-eligible efficiency markets

Behavior Customer

engagement to

reduce wasted

energy  Provide mailed and/or webbased home energy reports

with customer-specific

recommendations

 Provide easy access to

program offerings  Simplified information for easy and

direct actions

 Integrate electric and gas reporting

 Broad reach including underserved

customers



### Program Summaries

New Construction

The proposed Residential New Construction (RNC) Program will work with builders,

contractors, architects, developers, code officials, and suppliers to promote the design and

construction of efficient new homes. The program will provide similar program services

regardless of heating or hot water fuel choice. The Program will emphasize not only the energy

savings associated with efficient new construction but also its sustainability, increased comfort,

lower carbon footprint, and lower overall cost of ownership, including in most cases lower

monthly ownership costs. For builders and developers the program will promote increased

consumer marketability and simplified code compliance documentation. Builders and

developers will be provided technical assistance and financial incentives tied to the level of

energy savings of each home.

The Program will offer a tiered approach, with greater incentives available for greater levels

of efficiency. ENERGY STAR Homes Version 3 (V3) will be offered as one means of program

participation. However, meeting all of the requirements associated with V3 may be a barrier to

participation, particularly for builders new to ENERGY STAR and/or highly efficient

construction. The other major Program compliance paths will include:



###  An entry

‐ level option that is less stringent than ENERGY STAR, with tiered

incentives tied to building homes that are more efficient than residential code

in Delaware (currently IECC 2009)



###  An advanced option that significantly exceeds ENERGY STAR, with a net

zero energy home specification consistent with Delaware legislative mandate

(SB 59) that requires all homes built after December 31, 2025 be net zero

energy capableStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 50 A program implementation contractor will be procured through a competitive solicitation

and will be responsible for day

‐ to

‐ day implementation of the program. The program

implementation contractor will be responsible for assuring that an array of technical services

including plan review and recommendations, completion of code compliance documentation,

performance testing (air and duct leakage), etc. are available to builders.

The RNC Program will address all key end uses and building systems in the home

regardless of the compliance approach chosen. These include insulation, window performance,

air leakage, HVAC system efficiency, mechanical ventilation, lighting, appliances, and hot

water heating. Incentives will largely be provided for whole house performance depending on

the compliance approach and/or savings tier. Additional incremental incentives may be offered

for specific non

‐ standard measures such as heat recovery ventilation, TopTen USA appliances,

or drain water heat recovery.

Multiple paths to participation will encourage builders to increase their level of savings (and

incentives earned) over time. Bundled technical support and financial incentives will

simultaneously address multiple barriers, supporting the participation of a variety of builders

with different levels of interest and current knowledge of efficient building practices. A net zero

energy program component will align with longer term state policy objectives.

Retrofit/Home Energy Services

In order to be effective, comprehensive home retrofit services need to be delivered by a

workforce that has specialized expertise not only in home construction and repair, but also in

techniques that reliably deliver real energy savings. Home retrofit services for Delawareans will

be delivered using a contractor

‐ driven model, where Building Performance Institute (BPI)

‐

accredited firms will sell their services to homeowners, using certified technicians to install

long

‐ lasting efficiency improvements while maintaining the integrity of the building and the

health and well

‐ being of the occupants. The Retrofit/Home Energy Services program will

provide support both to the contractor base in the form of technical training and in the

marketing of their services, and to homeowners by providing information, maintaining a list of

participating contractors who comply with program expectations, and quality assurance to

verify that participating contractors do indeed meet the requirements of the program.

Home retrofit services that are truly comprehensive will address three major areas that

combine to determine how much energy is used in any given home. The Retrofit/Home Energy

Services program will address all three of these areas through a combination of contractor

services, education, and outreach. These are:



###  The insulation and air leakage levels of the building structure, including

walls, windows, ceilings, exposed floors, foundations, etc.



###  The efficiency of the mechanical systems that heat and cool the indoor

environment, heat water for domestic purposes, make light, clean and dry

clothes, keep food cold and so on



###  The ways that the buildings’ occupants operate their homes

‐ how they set the

thermostat, how much laundry they do, etc.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 51 The goal of this program is to provide motivation, opportunity, and financial support to

Delawareans so that they invest in reducing the amount of energy used in their homes.



###  Motivation: Inform homeowners about the benefits of home energy retrofits,

provide testimonials re: benefits of efficiency projects, create the sense that

having work done to save energy makes sense and makes one a strong

member of the community



###  Opportunity: Provide easy access to a listing of participating contractors who

both agree to meet required business practice standards and have the

training and technical qualifications required to perform effective retrofits



###  Financial Support: Provide access to modest incentives and attractive

financing to ensure that Delawareans can reap the benefits of reduced home

energy use

Delaware’s Retrofit/Home Energy Savings program will include the following features

found in the industry’s best programs:



###  Fuel neutral services and incentives addressing all electricity, natural gas,

fuel oil, propane and kerosene savings opportunities



###  Building Performance Institute (BPI) certification of lead technicians and

phased

‐ in requirements for contractor accreditation. All contractors will be

required to adhere to the installation standards promulgated by BPI



###  Comprehensive assessments that include diagnostic testing and identification

of any pre

‐ existing or potential indoor air quality or safety issues



###  Robust quality assurance protocols to ensure that program standards are met.

The protocol will include both on

‐ site verification for a random mix of

projects and customer satisfaction surveys for all participants

Multi-family

Multi

‐ family housing is an increasingly important segment of the housing market, yet

providing comprehensive energy efficiency services to people who live in apartments can be

difficult and is often overlooked by efficiency programs. At the root of this is the split incentive

issue described previously in “Understanding Barriers.” For instance, in many cases the tenants

in an apartment building may receive heating and cooling from a central system for which the

landlord pays the bills. This challenge is found across the full spectrum of multi

‐ family housing,

from subsidized affordable housing to market

‐ rate luxury apartments. It also exists both in new

construction, where the developer takes on the added costs of building

‐ in efficiency, and in

retrofit situations.

To address this and other challenges to increasing the efficiency of multi

‐ family housing,

Delaware’s Multi

‐ family program will take a comprehensive approach to providing energy

efficiency services in this sector, and will work with property owners, managers and tenants to

address the full spectrum of energy efficiency opportunities.

Initial engagement will be through the property managers, who serve as the liaison between

the financial and operational needs of the property and the human needs of the people who liveStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 52 there. Program staff will reach out to property managers to hear first

‐ hand about the challenges

they face in managing their properties and will develop packages of efficiency options that can

either overcome existing constraints or work within them. This is a notably different approach

than some have tried, where a prescriptive, one

‐ size

‐ fits

‐ all rebate package is offered on a “take

it or leave it” basis.

In addition to supporting common measures such as improved lighting and low

‐ flow

showerheads, cost

‐ effective savings opportunities in improving the building’s thermal shell

(wall and ceiling insulation, draft reduction, window improvements) and in improving the

common mechanical systems (e.g., heating and cooling equipment, water heating equipment,

laundry, and ventilation systems) will be addressed.

Energy

‐ saving opportunities will be identified first through a free walk

‐ through audit that

will assess improvement areas that merit further study. Opportunities will be assessed in the

following areas:



###  Direct install of low cost measures in tenant units, including energy efficient

lighting and water savings showerheads and faucet aerators



###  Efficient lighting for common areas such as hallways, entries, etc.



###  Major system upgrades for heating, cooling, ventilation, and laundry

equipment



###  Thermal shell improvements such as added insulation and draft reduction

Cost and savings estimates will be developed and packaged with an offer of incentives and

financing designed to meet the financial needs of the property. Packages will include targeted

construction management support, tenant and facilities staff education on how to maximize the

benefits of the energy efficiency project, and quality assurance and verification services to

ensure that the project is installed according to specifications.

Affordable multi

‐ family housing services are similar to those provided to the general multi

‐ family housing market, but reflect the unique circumstances and barriers experienced in this

housing. In affordable housing, financial packaging that fits the needs of the project becomes

even more critical, as cash

‐ flow margins are often almost non

‐ existent. Major efficiency projects

are often most likely to occur when affordable housing is re

‐ structuring its financing for major

rehabilitation. Building efficiency into projects of this sort requires strong relationships and

regular communications between program staff and property managers in order to meet

planning cycle deadlines.

Income-Eligible Services

The best income

‐ eligible energy efficiency programs are deeply connected with the local

service providers that deliver support to income

‐ eligible people. This can mean that the

program itself is completely delivered as an add

‐ on to the local Weatherization Assistance

Program, or it can mean that stand

‐ alone efficiency program services are well

‐ coordinated with

the broad range of income

‐ eligible service providers. Services provided will include:



###  Comprehensive energy assessments (energy audits)Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 53 

###  Full cost incentives for eligible improvements (no out

‐ of

‐ pocket required for

participants)



###  Construction management, including identifying and contracting with

installation firms



###  Quality assurance

Delaware’s income

‐ eligible energy efficiency program will address opportunities for

reducing the use of all fuels, including electricity, natural gas, fuel oil, and propane. For these

fuels, all end uses where cost

‐ effective improvements can be made will be assessed, and

improvements will be made as comprehensively as possible. The program will adhere to the

building science principles that are promulgated by the Building Performance Institute and the

U.S. DOE for retrofitting buildings to increase their energy efficiency. Contractors will test for

carbon monoxide issues and assure that no unsafe conditions are left after the building retrofit.

End uses will include:



###  Building shell improvements, including insulation and draft reduction



###  Heating and cooling system efficiency improvements



###  Appliance efficiency improvements



###  Water heating efficiency improvements



###  Lighting efficiency improvements

The goal of the income

‐ eligible program is to assure that comprehensive efficiency services

are provided to as many Delawareans who need them as possible, regardless of their ability to

afford them. Program operation is based on an abiding respect for the income

‐ eligible

participants. These customers are treated no differently simply because they are less able to pay

for the services they receive. The program will assess gaps in the energy efficiency services that

are currently available to income

‐ eligible customers in Delaware and will fill them as needed to

assure that all fuels and all end uses are cost

‐ effectively addressed. If the existing WAP delivery

infrastructure is currently only able to deliver building shell improvements then this program

might provide funding that allows it to also address heating and cooling mechanical

improvements, lighting, and so on. If the WAP programs are comprehensive now, but only able

to reach a small fraction of the eligible population, then this program might provide additional

funding that allows WAP to reach more households.

Retail Products

The Retail Products Program (RPP) will work with manufacturers and retailers to promote

the stocking, marketing and sale of efficient residential lighting, appliances, consumer

electronics, DHW and HVAC equipment to consumers, landlords, contractors, builders and

small businesses. Nearly all supported products will be ENERGY STAR qualified, though for

some product categories higher levels of efficiency may be required to qualify for rebates or

incentives. The Program will employ a variety of incentives and rebates supported by both

broad based and targeted marketing and educational and outreach efforts. For HVAC the

program will also promote quality installation practices.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 54 A program implementation contractor will be responsible for day

‐ to

‐ day implementation of

the program including partner recruitment and contractor training. Hard

‐ to

‐ reach populations

that may not normally shop at home improvement and mass merchandisers, the largest sales

venues for lighting, will be specifically identified and targeted. This may require increased

recruitment of grocery, drug and other retailers such as “dollar stores.”

The Retail Products Program will focus principally on the promotion of efficient lighting,

which will be supported at retail with upstream incentives. Initially, the Program’s lighting

component will jointly promote both compact fluorescent lamps (CFLs) and light emitting

diodes (LEDs). Over time the Program’s focus will shift increasingly to LEDs as their price

continues to fall and their performance improves. We expect that starting in 2017 the Program

will no longer be supporting CFLs. In addition to financial support the program will provide

consumers with information to inform and accelerate their choice of efficient products. For

lighting these materials will address the shift to lumens as the appropriate means for lamp

selection, the impacts of EISA on lamp choice and selection, and the growing advantages of

LEDs as the preferred lighting technology of choice.

In addition to lighting, refrigerators, freezers, clothes dryers, clothes washers, and advanced

power strips will be considered for inclusion in the 2014 RPP offering. For the HVAC and DHW

markets the program will work closely with contractors, distributors and manufacturers to

promote both efficient equipment and quality installation practices. HVAC and DHW

promoted by the RPP will include efficient air source heat pumps, central air conditioners,

ductless split heat pumps, furnaces, boilers, tankless water heaters, and heat pump water

heaters.

The Program will also support the promotion of select appliances and consumer electronics.

Appliances and consumer electronics will be largely supported with midstream retailer

incentives, though mail

‐ in coupons may also be required for either some products and/or for

some retailers. Continued improvements in the efficiency of many consumer products and high

market shares for ENERGY STAR qualified units may require measure eligibility criteria above

ENERY STAR, such as efficiency levels established by TopTen USA and/or by EPA’s ENERGY

STAR Most Efficient program.

HVAC and DHW equipment will be supported with mail

‐ in rebates that will be assignable

to an installing contractor. The program will also offer contractor training on quality installation

practices and incentives for duct sealing. There will be robust QA/QC procedures to ensure that

contractors adhere to program requirements. HVAC and DHW program activities will be

closely coordinated with HES, multifamily, RNC and income

‐ eligible efforts. After the initial

year of operation the program will assess whether to pursue an upstream incentive pilot. Based

on the results from any such pilot the Program may move to an upstream model to supplement

or fully replace the consumer and contractor targeted rebate model.

Behavior Modification

The residential sector portfolio includes a behavior modification program. This program

would provide home energy reports to consumers on their specific energy usage patterns for

metered fuels. This engagement would have the principal goal of motivating customers toStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 55 follow through on customer

‐ specific efficiency recommendations. Some of these actions would

be behavioral (e.g., turning down thermostats, turning off unused lights, etc.) while others

would involve improvements to equipment or building components, with the aim of driving

customers to more fully participate in other program offerings.

The home energy reports would be provided through either regularly mailed (typically

monthly or bimonthly) hard

‐ copy reports, web

‐ based reporting, or a combination of the two.

These reports would provide historic usage patterns, benchmark the customer’s usage against

other customers with similar home features and/or demographics, and provide energy

efficiency recommendations that are tailored to the customer and to the time of year. These

recommendations would provide the consumer with the resources, most notably program

resources, and motivation to implement the recommended measures.

There are several vendors that can design and deliver behavioral programs to program

administrators (e.g., Opower). Delaware’s program administrator may pilot one or more

approaches before picking a single statewide approach. Any such statewide approach should

allow for integrated electric and gas home energy reports and should enroll participants on an

“opt out” basis, meaning that participants must make a conscious decision and undertake

specific actions not to participate. Delaware’s behavioral program will also provide for a web

‐

based option and be able to integrate with any current or planned smart grid efforts, e.g.,

incorporate near or real time usage reporting.



### COMMERCIAL AND INDUSTRIA L CUSTOMER PROGRAMS

The commercial and industrial sectors (C&I) are far more diverse than the residential sector,

encompassing, for example, both small independent retail stores and very large industrial

facilities. Contrary to the residential sector, it is not practical to create separate programs to

address the specific barriers and technologies of each sub

‐ sector, as this would lead to

marketplace confusion. Customers would face program offerings that are difficult to decipher

and program administrators would find themselves struggling to manage and implement an

overly complicated program suite. As a result, we propose three broad programs in the C&I

sector, based on the most fundamental differences in the decision processes of this diverse array

of customers. Instead of separate programs, the market barriers specific to certain subsectors of

C&I will be addressed by including multiple initiatives within each program. Initiatives will be

targeted to a specific type of C&I customer that may otherwise see low participation rates and

are a good way to target specific opportunities without creating widespread confusion.

The first fundamental distinction in the decision process for the C&I sector is between

retrofit and lost opportunity. This distinction recognizes the fact that there is a fundamental

difference in the economic calculus used to evaluate efficiency projects as part of new

construction or where existing equipment needs to be replaced, and for retrofit projects, where

the existing equipment is in working condition and the project is motivated primarily by the

energy savings. The lost opportunity program takes advantage of the fact that, when the

customer is already purchasing new equipment, any incentive only needs to offset the

difference in cost between the standard equipment and the efficient equipment rather than theStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 56 full installed cost of the equipment. The lost opportunity program includes design/technical

assistance for new construction and large replace

‐ on

‐ failure projects, standard prescriptive

incentives, and upstream incentives for common lighting measures.

The next distinction is between small and large customers. Small and large customers

should be addressed by their own programs both because of their vastly different situations

(e.g., facility characteristics, equipment types, purchasing processes, financial situation,

familiarity with energy efficiency) and because certain program approaches may not be cost

‐

effective for both segments. For example, experience shows that one

‐ on

‐ one account

management is highly successful in achieving significant cost

‐ effective savings from the largest

C&I customers. However, this approach cannot cost

‐ effectively scale to customers with one or a

few small

‐ to

‐ medium

‐ sized facilities. Further, energy costs for small businesses tend to be either

fairly insignificant compared to other expenses or viewed as unimportant relative to other cost

drivers. Small businesses are also unlikely to have staff dedicated to running the facility and

keeping track of energy usage. For these reasons, achieving deep penetration with small and

large customers requires different approaches and separate programs.



### Program Concepts

Below is a table of program concepts used to develop the commercial program designs

proposed in this report. Refer to Appendix G for full C&I program concepts descriptions.

Table 37 | Commercial & Industrial Program Concepts

Market

Segment Delivery Model Services/Incentives

Provided Best Practice Features

C&I Lost

Opportunity  Instant and mail-in rebates

at retail

 Upstream rebates

 Account management for

large customers  Prescriptive

incentives for

common measures

 Custom incentives

based on project

economics and

savings

 Incentives to

upstream partners

 3 rd party TA and

verification  Bundled incentives with

technical assistance

 Simple program processes

 One-stop shopping

 Builds relationships with

large customers and trade

allies

C&I Small

Business

Retrofit  3 rd party direct installation

of lighting a nd other easy

to install measures  High prescriptive

incentives for

common measures

 No-cost site visit to

identify and install

potential measures  Combines information about

needed measures with high

financial incentives

 Little participant action

needed

 Targets otherwise hard-toreach segment

 Provides financing optionsStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 57 Market

Segment Delivery Model Services/Incentives

Provided Best Practice Features

C&I Large

Business

Retrofit  Instant and mail-in rebates

at retail

 Account management for

large customers

 Engage contractors and

trade allies to drive

participation  Prescriptive and

custom incentives

 3 rd party TA and

verification  Bundles TA and financial

incentives

 Specifically targets various

market niches through

market segmentation

 Provides one stop shopping

through account

management

 Builds relationships with

large customers and trade

allies

 Incorporates all costeffective efficiency

technology



### Program Summaries

The portfolio of efficiency programs directed at the C&I sectors consists of large umbrella

programs with several different strategies or initiatives aimed at capturing savings from

different segments of this diverse group of customers. The text below examines the major

program strategies included in each of the umbrella programs.

C&I Lost Opportunity

As discussed above, the Lost Opportunity program aims to affect customer purchasing

decisions by offsetting the incremental cost between standard practice and efficient practice.

The Lost Opportunity program covers all end uses and technologies that produce cost

‐ effective

energy savings, and encompasses many different delivery models and services.

Account Management: One

‐ on

‐ one account management of the largest C&I customers is a

vital aspect of the C&I sector programs. On

‐ going relationships with Delaware’s largest

commercial and industrial facilities will familiarize the program with each customer’s specific

needs, barriers, and decision making processes, and thus help spur an ongoing stream of large

projects. The account managers will help their customers apply and receive incentives for any

cost

‐ effective efficiency project, no matter the end use. Further, the account manager will help

the program get ahead of any planned equipment upgrades, renovations, or new construction

projects, and guide the customer through the process required to get incentives. The account

manager will also look for opportunities for cost

‐ effective retrofits, and steer these projects to

the Large Business Retrofit program. The account manager will thus act as a “one

‐ stop shop”

for the customer, simplifying the program processes, and guiding the customer through the

process of applying for and receiving an incentive. The account manager will also work with

the customer to understand its needs, and potentially provide any technical assistance or

financing options needed to get the project to move forwards.

Prescriptive Incentives: Standard incentives take the form of mail

‐ in or instant rebates at

retail. For mail

‐ in rebates, customers fill out an application after purchasing efficient equipment,

and receive a rebate based on the type and quantity of the equipment purchased. Instant rebatesStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 58 are applied right at the counter, with no mailings necessary. Instant rebates should be used

wherever possible, as they present significantly lower administrative burden on the customer.

Incentives will be available for common efficiency measures with easy to understand savings,

mainly lighting, appliances, and unitary HVAC. Prescriptive incentives reflect best practice

elements since they are easy to understand and minimize administrative effort, both for the

customer and the program administrator.

Upstream Incentives: Incentives provided to equipment distributors and/or manufacturers

rather than to retail customers typically result in a lower price at the retail level. Upstream

incentives can typically be lower than standard incentives with the same effect on the ultimate

product price, since the retail markup is done on a lower base cost. In Delaware, we assume that

fluorescent and LED lighting will be offered upstream. This is reflected in the analysis with

lower incentive costs and higher penetration rates. Upstream incentives significantly lower the

hurdle for participation in the program, as they do not require any action by the customer. In

fact, many customers may not even realize they are receiving an incentive.

Custom Incentives: Custom incentives are provided on a case

‐ by

‐ case basis via a

negotiation process between the customer and their account manager. Incentive amounts will

average around 50% of the incremental cost, but will be adjusted based on this negotiation

process. Custom incentives are available for all cost

‐ effective measures and technologies that

are not available prescriptively. In practice, this will apply largely to new construction and

major renovation projects, as cases where existing equipment has failed are likely to be too

urgent to go through the custom application process. However, there will also be situations

where the current equipment is running poorly and needs to be replaced but has not failed.

Technical and Design Assistance: For this program, technical and design assistance will be

delivered by competitively

‐ procured 3 rd party vendors with proven experience in the relevant

field. The assistance will be available for large customers undergoing a renovation or new

construction project, and pay for a portion of computer modeling, LEED certification, lighting

and HVAC system design, or other studies examining how to minimize energy use in the

project. Customers receiving the assistance would then be eligible for further incentives once

they implement the ideas explored in the studies, thus bundling financial incentives with the

technical assistance.

Large Business Retrofit

The large business retrofit program focuses on capturing energy savings from existing large

commercial and industrial customers. The program will provide energy savings by encouraging

the early replacement of old inefficient equipment before it stops working; adding controls or

sensors such as motors, VFDs, and EMS’s to lower the energy usage of existing systems; and

helping businesses improve operational practices and optimize systems to lower energy usage.

Large Business Retrofit program covers all end uses and technologies that produce cost

‐

effective energy savings, and encompasses many different delivery models and services.

Account Management: As described above, account managers are a vital part of the C&I

portfolio. Account managers are assigned to a customer, and will generate projects for both the

C&I Lost Opportunity Program and the Large Business Retrofit Program, depending onStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 59 whether the opportunity is new construction, replace

‐ on

‐ burnout, or a retrofit. In either case,

the account manager will work with the customer throughout the process of identifying a

measure, getting any needed technical assistance, and receiving an incentive. The account

manager will maintain a relationship with the customer, in hopes of generating more projects in

the future. Account management is particularly important for addressing the industrial sector

as both the sensitivity around production processes and longer project timelines require a

strong relationship between customers and program staff.

Prescriptive Incentives: Mail

‐ in or instant incentives similar to the downstream prescriptive

incentives offered in the Lost Opportunity program, but may be larger to offset the full installed

cost of the measure, rather than the incremental cost. These incentives will also cover retrofit

add

‐ on measures such as lighting controls and VFDs. The incentives will vary by measure, but

will typically cover between 10% and 50% of the cost. Retrofit prescriptive incentives will be

available for all customer sizes, but are expected to be mostly utilized by medium and large

customers. Prescriptive incentives significantly reduce the administrative effort needed to

receive a rebate, both on the part of the customer and the part of the program administrator.

Custom Incentives: Custom incentives are provided on a case

‐ by

‐ case basis via a

negotiation process between the customer and their account manager. Depending on the results

of the negotiation, and on the specifics of the project and the customer, the size of the incentive

will typically end up at between 10%

‐ 50% of the full installed cost. Custom incentives will be

offered for any cost

‐ effective technology that is not offered prescriptively. The incentives will be

set up in a way to make them as easy as possible to receive, while maintaining reasonable

confidence that claimed savings will actually be attained. The account manager will work with

customer to ensure that the process of applying for and receiving an incentive goes as smoothly

as possible. Further, the account manager may explore various financing options if they feel it

will help move the project forwards.

Technical and Design Assistance: Technical and design assistance will be delivered by 3 rd

party firms with proven expertise in the relevant field. Program funds will be available to pay

part of the cost for any ASHRAE audit, feasibility study, system optimization study, or retro

‐ commissioning report that can be expected to lead to energy savings. It is expected that the

program will only pay for a certain portion of any such study, with the rest covered out of

pocket by the customer. Any projects identified in such studies will be eligible for further

prescriptive or custom incentives, thus providing a package of both technical and informational

services with financial incentives and potentially financing. As appropriate, building operator

training will also be provided under the umbrella of technical assistance to capitalize on

behavior

‐ based opportunities and ensure persistence of savings.

Market Segmentation: Experience in other jurisdictions shows that many C&I subsectors

have very low participation rates without specialized outreach designed to address their

specific needs. Once the program has been up and running for a couple years, we assume that

Delaware will dedicate resources to pursuing projects in these segments

– namely

municipalities, hospitals, commercial real estate, and food and hospitality. This will take the

form of marketing and initiatives targeted directly to the specific needs of each segment. This

may entail some specialized research to determine what specific barriers are preventing eachStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 60 segment from participating in the efficiency program and how to best reach them. The

technologies and specific offerings are thus dependent on each market segment. However, this

additional effort will enable the program to reach previously underserved customers.

Small Business Retrofit

Small businesses are typically constrained by both staff time and financial resources. This

makes it hard to invest the time and money in identifying and installing efficiency upgrades.

Further, the small amount of per customer energy use in this segment means that the program

administrators cannot cost

‐ effectively spend too much time on each facility. The Small Business

Retrofit program addresses these problems by providing a free onsite inspection, along with

incentives covering around 70% of the full installed cost of a list of common, easy

‐ to

‐ install

measures. Typically, this program would be bid out to a 3 rd party contractor who uses fixed

pricing for a menu of measures that can be installed as part of the program. The list of measures

mainly consists of lighting, but also includes other common and easy

‐ to

‐ install measures such

as faucet aerators, pipe and boiler insulation, and strip curtains for refrigeration. If the auditor

notices a potential for a measure that’s not on the list, the customer will be able to apply for a

rebate through one of the other programs. However, these cases will be fairly rare. This

program greatly boosts participation among small commercial facilities, which are otherwise

very underserved by traditional program offering. It combines free on

‐ site audits with high

financial incentives and easy application processes to achieve significant savings from high

efficiency lighting and other easy

‐ to

‐ install efficiency measures.



### PROGRAM DEVELOPMENT OVER TIME

We have designed the portfolio of programs presented in the achievable scenario as a

comprehensive and inter

‐ related set of programs. Many of our assumptions regarding cost and

program delivery rest on the concept of integrated program delivery. As such, the results for

any one program are somewhat dependent on the other programs in the portfolio. For example,

it is expected that the Home Energy Services program will lead directly to participation in the

Residential Products program. Furthermore, we have assumed that the portfolio develops over

time, with initial stages of program delivery requiring extra effort on administration and

marketing in order to build momentum and create the foundation necessary for future savings.

Some programs, such as Large Business Retrofit, contribute minimal savings in the initial years

while still incurring administrative costs, but grow to become a significant part of the portfolio

in later years. Conversely, other programs, such as Residential Products and Small Business

Retrofit, can be ramped up quickly but gradually shrink as a portion of the overall portfolio.

This point is illustrated in the figure below which shows how the total electric savings in select

years are divided between the different programs.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 61 Figure 15 | Program Development Over Time

As a final consideration, since efficiency programs are typically funded by a surcharge on

electric bills, it is important to provide a pathway to participation for all ratepayers, in all

markets. As such, we designed this comprehensive set of programs with the intent of reaching

as many customer segments as possible.

The tables below briefly describe the major features of how each program develops from the

short

‐ term to the long

‐ term with respect to costs and savings. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2014 2017 2020 2025PercentofTotalElectricSavings Large Business Retrofit

Small Business Retrofit

C&I Lost Opportunity

Residential Behavior

Income

‐ Eligible Single

Family

Residential Products

Multi

‐ Family

Home Energy Services

Residential New

ConstructionStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 62 Table 38 | Residential Program Development

Program Short Term Long Term

New

Construction Significant early inv estment to engage the

builder community and provide program

requirements training precedes any significant

savings. Early participants will be at entry level

savings tier. Gradual shift to increasingly efficient

construction that approaches state statutory

net-zero requirements lead to increased

program reported savings. Training investment

decreases gradually as builders increasingly

participate at higher tiers.

Retrofit/Home

Energy

Services Significant early investment is required to

engage current and potent ial home retrofit

contractors to increase BPI-certified installation

capacity. Awareness and interest among

homeowners will also be built over time. Early

adopters and some targeted high use

customers participate. P rogram administration

costs are proportionally h igher in early program

years. Contractors become more experienced and

require less technical and sales support.

Availability to provide financing increases.

Participation numbers gradually increase as

customer awareness becomes broader.

Incentive and financi ng costs increase in

proportion with savings while administrative

costs decrease as a percentage of overall

program costs.

Multi-Family Significant early investment in building multifamily owner/developer/manager relationships

is required. Early savings are mostly from

direct-install lighting. Relationship approach is used to develop

comprehensive MF project s. Projects take time

to develop technically and financially, and to

install, similar to compr ehensive C&I. Over time

comprehensive savings become a routine

feature of MF design and redevelopment

projects. Incentive costs increase with savings,

but sales/management costs are more constant.

Retail Products Large savings are achieved relatively early in

program. RFPs can be quickly developed for

cooperative CFL and LED lighting promotions

with major national retail ers. Delivery costs are

relatively proportional with savings over time,

though incentive costs increase somewhat with

shift to LEDs. Savings and associated costs continue to

increase as the product mix expands to

appliances and HVAC, and as retail partners

expand from large national retailers to

smaller/local and region al retailers. A shift from

CFLs to LEDs will increase costs over time.

Income-Eligible Initial program developm ent is contingent on a

collaborative design process with local incomeeligible service providers, but development

costs will be modest. Early savings will be

modest. The program ramps up st eady with costs and

savings remaining relatively proportional as

local providers build capacity to meet program

targets.

Behavior

Modification Initially requires smaller pilot program to

determine initia l deemed savings. Can be at full

operation by the second year. Savings and costs over the long term are not

expected to deviate sig nificantly from early

years, though co-promotion of other programs

may increase.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 63 Table 39 | Commercial & Industrial Program Development

Program Short Term Long Term

Small Business

Direct Install Third-party contractor(s) should be able to get

a turnkey program running and achieving

significant savings i n the first year. Slow and steady increase in customers served

as market awareness for the program

increases, in addition to increase in savings per

customer as new measures are added, nonlighting measures are more strongly

encouraged, and new financing options are

developed.

Large Business

Retrofit Significant build out e ffort is involved in

spreading awareness a nd familiarity of the

program in the market, hiring account

managers and technical support, and

establishing relationships with large accounts,

trade allies, and contractors. Also, projects

often take a year from start to finish, so

projects started in the first year may not be

complete until later years. Account managers have established

relationships with large customers, and

generate a continuous stream of projects;

distributors and trade allies are familiar with the

program and naturally shape their project

designs and equipment stocking decisions

based on program incenti ves; contractors use

program incentives as marketing tools to upsell

customers on efficien t products. Once up and

running, the program wi ll likely be the largest

generator of savings in the portfolio.

Lost

Opportunity Will take some time to develop rebate forms

and raise market awareness. However, since

most savings will be from prescriptive

measures, less admin time and infrastructure

build out is required than for the large business

retrofit program. New construction projects are

very complex and require significant education

and communication between a variety of

stakeholders. This infrastructure will take

significant effor t to build out. Savings from prescriptive rebates will increase

steadily as market awareness increases and

new measures are added. As account

managers establish rela tionships with large

accounts, custom lost opp ortunity projects will

be realized. As the program’s presence in the

new construction market place begins to assert

itself, the program may see large chunks of

savings from new buildings. Typically, these

projects take multiple years to complete.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 64 

## METHODOLOGY

OVERVIEW

This section provides a brief overview of our approach to the study analysis. The

subsequent sections provide more detailed descriptions of the analysis methodology and

assumptions.

The energy efficiency potential analysis involves several steps. The first several are required

regardless of the scenario being analyzed, and were first performed during the Phase I

economic potential study. These steps include:



###  Assess and adjust energy usage forecasts for any known codes and standards

and estimate naturally occurring efficiency adoption to ensure it properly

reflects consistent base case assumptions about customers and end uses



###  Disaggregate adjusted energy forecasts by sector (residential, commercial,

industrial), by market segment (e.g., building types), and end uses (e.g.,

lighting, cooling, etc.)



###  Characterize efficiency measures, including estimating costs, savings,

lifetimes, and share of end use level forecasted usage for each market

segment

To develop each scenario (economic, maximum achievable, and program potential) required

additional steps specific to the assumptions in each scenario. These steps are listed below.



###  Build up savings by measure/segment based on measure characterizations

calibrated to total energy usage



###  Account for interactions between measures, including savings adjustments

based on other measures as well as ranking and allocating measures when

more than one measure can apply to a particular situation



###  Run the stock adjustment model to track existing stock and new equipment

purchases to capture the eligible market for each measure in each year



###  Run the efficiency potential model to estimate the total potential for each

measure/segment/market combination to produce potential results



###  Screen each measure/segment/market combination for cost

‐ effectiveness.

Remove failing measures from the analysis and rerun the model to re

‐ adjust

for measure interactions

Annual energy sales forecasts were developed for each energy type (electricity, natural gas,

and petroleum fuels), and for each sector (residential, commercial, industrial), for the 12

‐ year

study period. Electric and natural gas forecasts were provided by Delaware utilities and

cooperatives, as further described below. The petroleum fuels forecast was based on data from

the U.S. Energy Information Administration (EIA). Sales forecasts were then disaggregated by

end use and building type in order to apply each efficiency measure to the appropriate segment

of energy use. This study applied a top

‐ down analysis of efficiency potential relative to theStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 65 energy sales disaggregation for each sector, merged with a bottom

‐ up measure level analysis of

costs and savings for each applicable technology.

The efficiency potential estimate includes savings from a wide range of efficiency measures

(i.e., efficient technologies and practices). The study analyzed both technologies that are

commercially available now and emerging technologies considered likely to become

commercially available over the study horizon.

The study applied a Total Resource Cost (TRC) Test to determine measure cost

‐

effectiveness. The TRC test considers the costs and benefits of efficiency measures from the

perspective of society as a whole. Efficiency measure costs for market

‐ driven measures

represent the incremental cost from a standard baseline (non

‐ efficient) piece of equipment or

practice to the high efficiency measure. For retrofit markets the full cost of equipment and labor

was used because the base case assumes no action on the part of the building owner. Measure

benefits are driven primarily by energy savings over the measure lifetime, but also include

other benefits associated with the measures, including water savings, and operation and

maintenance savings. The energy impacts may include multiple fuels and end uses. For

example, efficient lighting reduces waste heat, which in turn reduces the cooling load, but

increases the heating load. All of these impacts are accounted for in the estimation of the

measure’s costs and benefits over its lifetime.

There are two aspects of electric efficiency savings: annual energy and coincident peak

demand. The former refers to the reductions in actual energy usage, which typically drive the

greatest share of electric economic benefits as well as emissions reductions. However, because it

is difficult to store electricity the total reduction in the system peak load is also an important

impact. Power producers need to ensure adequate capacity to meet system peak demand, even

if that peak is only reached a few hours each year. As a result, substantial economic benefits can

accrue from reducing the system peak demand, even if little energy and emissions are saved

during other hours. The electric benefits reported in this study reflect both electric energy

savings (MWh) and peak demand reductions (MW) from efficiency measures.

The primary scenario for the study was the program potential, which best reflects what

could actually be accomplished by efficiency programs given real

‐ world constraints. We have

also estimated the economic and maximum achievable potentials. The general approach for

these three scenarios differed as follows:



###  Economic potential scenario: We generally assumed that all cost

‐ effective

measures would be immediately installed for market

‐ driven measures such

as for new construction, major renovation, and natural replacement (“replace

on failure”). For retrofit measures we generally assumed that resource

constraints (primarily contractor availability) would limit the rate at which

retrofit measures could be installed, depending on the measure, but that all

or nearly all efficiency retrofit opportunities would be realized over the 12

‐

year study period. Spreading out the retrofit opportunities results in a more

realistic ramp up, providing a better basis for the achievable scenarios.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 66 

###  Maximum achievable scenario: This scenario is based on the economic

potential but accounts for real

‐ world market barriers. We assumed that

efficiency programs would provide incentives to cover 100% of the

incremental costs of efficiency measures, so that program participants would

have no out

‐ of

‐ pocket costs relative to standard baseline equipment. Measure

penetration rates were then estimated assuming optimal program delivery,

but recognizing that market barriers still remain even when measure

incremental costs are fully offset by program incentives.



###  Program potential scenario: For this scenario we assumed efficiency

programs would start with fairly low levels of savings, ramping up over

several years to levels of savings commensurate with the highest

‐ performing

efficiency programs in the country. Program activity was calibrated to meet

specific targets for energy savings for each year.



### ENERGY FORECASTS

Electric Forecast

The electric usage forecast was developed primarily from the individual utility forecasts

provided by Delmarva Power, Delaware Electric Cooperative, and Delaware Municipal Electric

Corporation. 16 Reported sales categories aligned with traditional utility categories, which

closely mirror the three customer sectors that were analyzed. In some cases, energy loads were

aggregated to the sector level using standard conventions (e.g., street lighting energy use is

included in the commercial sector). The electric base case forecast represents a weather

normalized forecast, and reflects an estimated average annual growth rate of 1.01% per year.

Table 40 shows the electric forecast, by sector and year. This reflects electric usage at the meter

level, in other words, not including line losses from the generator to the point of use.

Table 40 | Electric Sales Forecast by Sector and Year (GWh)



### Natural Gas Forecast

The natural gas forecast was developed using forecasts provided by Chesapeake Utilities 17

and from the U.S. Energy Information Administration (EIA). 18 As only Chesapeake Utilities

16 D. Pirtle, Delmarva Power, personal communication, March 8, 2013; M. Nielson, Delaware Electric Cooperative,

personal communication, March 30, 2013; S. Lynch, Delaware Municipal Electric Corporation, personal

communication, March 20, 2013.

17 S. Hardy, Chesapeake Utilities, personal communication; February 22, 2013. Sector 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Residential 4,510 4,586 4,661 4,729 4,798 4,869 4,942 5,016 5,090 5,172 5, 256 5,338

Commercial 4,835 4,877 4,917 4,954 4,991 5,029 5,068 5,108 5,148 5,190 5,2 33 5,276

Industrial 2,735 2,754 2,768 2,776 2,787 2,801 2,809 2,815 2,822 2,820 2,8 14 2,810

Total 12,080 12,218 12,346 12,458 12,576 12,698 12,818 12,938 13,060 13,182 13, 303 13,424Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 67 provided a natural gas forecast, the EIA data for Delaware was leveraged to estimate sales for

other natural gas providers, i.e., Delmarva and Eastern Shore. Eastern Shore serves primarily as

a transmission provider for local distribution companies but does provide direct sales to select

industrial customers. While the EIA does report commercial and industrial sales for Eastern

Shore, only the industrial sales were explicitly used as the commercial were reportedly already

included in the forecast provided directly by Chesapeake Utilities. As the Chesapeake Utilities

natural gas forecast was only provided through 2017, the annual growth rates for the remainder

of the analysis period were estimated from the 2013 Annual Energy Outlook (AEO) assuming a

simple average of rates from the Middle Atlantic and South Atlantic census divisions. 19

Similarly, the same AEO growth rates were leveraged to project 2011 Delmarva and Eastern

Shore natural gas sales.

The gas base case forecast represents a weather normalized forecast, and reflects an

estimated average annual growth rate of 1.21% per year. Table 41 shows the gas forecast, by

sector and year.

Table 41 | Natural Gas Sales Forecast by Sector and Year (BBtu)



### Petroleum Fuels Forecast

EIA data on current petroleum consumption in Delaware was used with estimated growth

rates from the 2013 AEO to develop the petroleum fuels forecast. 20 The forecast reflects the on

‐ going significant displacement of petroleum fuels by the expansion of natural gas service in the

state.

The petroleum fuels base case forecast represents a weather normalized forecast, and

reflects an estimated average annual growth rate of

‐ 0.79% per year. Table 42 shows the

petroleum fuels forecast, by sector and year.

18 U.S. Energy Information Administration, Natural Gas Annual Respondent Query System (EIA

‐ 176 Data Through

2011), November 2012

19 U.S. Energy Information Administration, Annual Energy Outlook 2013, April 2013

20 U.S. Energy Information Administration, Adjusted Sales of Distillate Fuel Oil by End Use, November 30, 2013; U.S.

Energy Information Administration, Adjusted Sales of Residual Fuel Oil by End Use, November 30, 2013; U.S.

Energy Information Administration, Adjusted Sales of Kerosene by End Use, November 30, 2013; U.S. Energy

Information Administration, State Profiles and Energy Estimates, “Table F12: Liquefied Petroleum Gases

Consumption Estimates,” 2011 Sector 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Residential 10,593 10,752 10,902 11,048 11,001 10,959 10,919 10,874 10,8 13 10,741 10,664 10,584

Commercial 9,739 9,998 10,129 10,247 10,257 10,297 10,344 10,412 10,481 1 0,555 10,647 10,763

Industrial 21,317 22,492 22,925 23,351 23,638 23,978 24,257 24,594 24,93 5 25,199 25,539 25,866

Total 41,649 43,242 43,956 44,646 44,896 45,234 45,519 45,880 46,230 46,495 46, 850 47,214Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 68 Table 42 | Petroleum Fuels Sales Forecast by Sector and Year (B Btu)



### Forecast Disaggregation by Segment and End Use

The commercial, industrial, and residential sales disaggregations draw upon many sources.

The industrial disaggregation is primarily based on the EIA Manufacturing Energy

Consumption Survey (MECS) 2010, assuming the “South” census region (MECS data are only

available for the four major census regions). 21 The commercial disaggregation relies on a

number of sources. First, total forecasted energy sales are divided across building types using

data from Optimal Energy’s recent Energy Efficiency and Renewable Resource Potential in New

York State study. Unfortunately, reliable data specific to Delaware was not available, so data for

Long Island, NY has been used as a proxy. Next, data from the recent Pennsylvania Statewide

Commercial & Industrial End Use & Saturation Study was used to develop the electric

disaggregation at the end use level. 22 While a similar study was recently completed for

Delaware, that study did not provide estimates of energy

‐ use intensities that would support the

disaggregation. The commercial natural gas and petroleum fuels end use break

‐ outs were

estimated using data from the EIA 2003 Commercial Buildings Energy Consumption Survey

(CBECS) 23 The residential building type and end use disaggregation was developed using data

from the EIA 2009 Residential Energy Consumption Survey (RECS), 24 the most recent Annual

Community Survey from the US Census Bureau, 25 and the EIA 2013 Annual Energy Outlook. 26

Finally, relative changes in end use distribution over the analysis period were adapted from the

EIA 2013 Annual Energy Outlook.

Sales were further disaggregated into sales for new construction and renovated spaces and

those for existing facilities. New construction activity for commercial and industrial facilities

was estimated using national projections of new additions and surviving square footage from

the EIA 2013 Annual Energy Outlook and assuming simple sector

‐ wide energy use intensities.

Residential new construction was projected assuming the 7

‐ year average annual growth rate

(1995

‐ 2001) in housing units for Delaware from the U.S. Census Bureau Building Permits

21 U.S. Energy Information Administration, Manufacturing Energy Consumption Survey, “Table 5.5 End Uses of

Fuel Consumption, 2010,” March 2013

22 Nexant, Pennsylvania Statewide Commercial & Industrial End Use & Saturation Study, April 18, 2012

23 U.S. Energy Information Administration, Commercial Buildings Energy Consumption Survey, “Table E7A.

Natural Gas Consumption (Btu) and Energy Intensities by End Use for All Buildings, 2003,” September 2008

24 U.S. Energy Information Administration, Residential Energy Consumption Survey, “Table CE4.4 Household Site

End

‐ Use Consumption by Fuel in the South Region, Totals, 2009,” August 2011

25 U.S. Census Bureau, 2007

‐ 2011 American Community Survey, “DP04 Selected Housing Characteristics”

26 U.S. Energy Information Administration, Annual Energy Outlook 2013, “Table 4. Residential Sector Key Indicators

and Consumption,” April 2013 Sector 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Residential 6,174 6,067 5,958 5,846 5,737 5,636 5,545 5,455 5,365 5,278 5, 194 5,111

Commercial 2,054 2,135 2,132 2,121 2,108 2,100 2,090 2,082 2,073 2,064 2,0 55 2,047

Industrial 2,369 2,478 2,523 2,522 2,536 2,544 2,539 2,523 2,519 2,513 2,5 12 2,512

Total 10,596 10,679 10,613 10,489 10,381 10,281 10,174 10,060 9,957 9,855 9,761 9,670Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 69 Survey. 27 This period was assumed to reflect stable growth in housing starts before the housing

boom and bust of the mid to late 2000s. Growth in number of housing units was translated to

energy sales using average electric/fuel consumption per housing unit estimated from EIA 2009

Residential Energy Consumption Survey.

Appendix H shows the disaggregated annual energy forecasts. In all cases, the available

forecast data relied upon was either not developed with (or the data was not available to

understand) detailed end use modeling and explicit assumptions about future codes and

standards, changes in baseline practices, major shifts among fuels (e.g., driven by electric

vehicles). As a result, we assume the forecasts represent the best estimate of future weather

normalized loads and reflect assumptions about future baselines and codes and standards

consistent with our analysis at the measure level.



### MEASURE CHARACTERIZATION

The first step for developing measure characterizations is to define a list of measures to be

considered. This list was developed and qualitatively screened for appropriateness in

consultation with DNREC and other stakeholders. The final list of measures considered in the

analysis is shown with their characterizations in Appendix I, which also shows the markets for

which each measure was considered.

A total of 188 measures were included and characterized for up to three applicable markets

(new construction/renovation, natural replacement, and retrofit). This is important because the

costs and savings of a given measure can vary depending on the market to which it is applied.

For example, a retrofit or early retirement of operating but inefficient equipment entails

covering the costs of entirely new equipment and the labor to install it and dispose of the old

equipment. For new construction or other market

‐ driven opportunities, installing new high

efficiency equipment may entail only the incremental cost difference between a standard

efficiency piece of equipment and the high efficiency one, as other labor and capital costs would

be incurred in either case. Similarly, on the savings side, retrofit measures can initially save

more when compared to older existing equipment, while market

‐ driven measure savings reflect

only the incremental savings over current standard efficiency purchases. For retrofit measures,

often we model a baseline efficiency shift at the time when the retrofit measure being replaced

is assumed to have needed to be replaced anyway.

For each measure, in addition to separately characterizing them by market, we also

separately analyze each measure/market combination for each building segment (e.g., single vs.

multifamily; office vs. retail vs. hospital, etc.). The result is that we modeled 2,374 distinct

measure/market/segment permutations for each year of the analysis.

The overall potential model relies on a top

‐ down approach that begins with the forecast and

disaggregates it into loads attributable to each possible measure, as described in the following

27 U.S. Census Bureau Building Permits Survey, “Table 2au. New Privately Owned Housing Units Authorized

Unadjusted Units for Regions, Divisions, and States,” 1995

‐ 2012Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 70 section. In general, measure characterizations include defining the following characteristics for

each combination of measure, market, and segment:



###  Measure lifetime (both baseline and high efficiency options if different)



###  Measure savings (relative to baseline equipment)



###  Measure cost (incremental or full installed depending on market)



###  O&M impacts (relative to baseline equipment)



###  Water impacts (relative to baseline equipment).

Energy Savings

For each technology, we estimate the energy usage of baseline and high efficiency measures

based primarily on engineering analysis. We rely heavily on the Delaware Technical Reference

Manual (TRM), as well as the Mid

‐ Atlantic TRM, for measure savings for those measures

covered by these documents. For more complex measures not addressed by the TRMs

engineering calculations are used based on the best available data about current baselines in

Delaware and the performance of high efficiency equipment or practices. Delaware baseline

studies completed in 2012 for the residential and commercial

‐ industrial sectors were drawn on

to identify baseline efficiency levels and practices wherever possible. 28 Due to budget and time

constraints we did not include any building simulation modeling or other sophisticated

engineering approaches to establishing detailed, weather normalized savings.

Costs

Measure costs were drawn from Optimal Energy’s measure characterization database when

no specific Delaware costs were available. These costs have been developed over time, and are

continually updated with the latest information, including a recent update for an ongoing

potential study in New York State. Major sources include the Delaware and Mid

‐ Atlantic TRMs,

baseline studies, incremental cost studies, direct research into incremental costs, and other

analyses and databases that are publicly available.

Lifetimes

As with measure costs, lifetimes are drawn from Optimal’s measure characterization

database. These have been developed over time, and were revised for this study based on the

Delaware and Mid

‐ Atlantic TRMs.

Operations and Maintenance Impacts

Operation and maintenance (O&M) impacts are those other than the energy costs of

operations. They represent, for example, things like replacement lamp purchases for new high

efficiency fixtures, or changes in labor for servicing high

‐ efficiency vs. standard

‐ efficiency

measures. High efficiency equipment can often reduce O&M costs because of higher quality

components that require less

‐ frequent servicing. On the other hand, some high efficiency

technologies require enhanced servicing, or have expensive components that need to be

28 See Appendix J for full citations to all referenced documents.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 71 replaced prior to the end of the measure’s lifetimes. For most measures, O&M impacts are very

minimal, as many efficient and baseline technologies have the same O&M costs over time.

Where they are significant, we estimate them based on our engineering and cost analyses, the

Delaware and Mid

‐ Atlantic TRMs, and other available data.

Additional aspects of measure characterization are more fully described below in the

potential analysis section, along with other factors that merge the measure level engineering

data with the top

‐ down forecast of applicable loads to each measure.



### TOP-DOWN METHODOLOGY

The general approach for this study, for all sectors, is “top

‐ down” in that the starting point

is the actual forecasted loads for each fuel and each sector. As described above, we then break

these down into loads attributable to individual building equipment. In general terms, the top

‐

down approach starts with the energy sales forecast and disaggregation and determines the

percentage of the applicable end use energy that may be offset by the installation of a given

efficiency measure in each year. This contrasts with a “bottom

‐ up” approach in which a specific

number of measures are assumed installed each year.

Various measure

‐ specific factors are applied to the forecasted building

‐ type and end use

sales by year to derive the potential for each measure for each year in the analysis period. This

is shown below in the following central equation:

Measure

Savings = Segment/

End use

/year kWh

Sales x Applicability

Factor x Feasibility

Factor x Turnover

Factor

(replacement

only) x Not

Complete

Factor

(retrofit

only) x Savings

Fraction x Net

Penetration

Rate

Where:



###  Applicability is the fraction of the end use energy sales (from the sales

disaggregation) for each building type and year that is attributable to

equipment that could be replaced by the high

‐ efficiency measure. For

example, for replacing office interior linear fluorescent lighting with a higher

efficiency LED technology, we would use the portion of total office building

interior lighting electrical load consumed by linear fluorescent lighting. The

main sources for applicability factors were the Delaware and Pennsylvania

baseline studies.



###  Feasibility is the fraction of end use sales for which it is technically feasible

to install the efficiency measure. Numbers less than 100% reflect engineering

or other technical barriers that would preclude adoption of the measure.

Feasibility is not reduced for economic or behavioral barriers that would

reduce penetration estimates. Rather, it reflects technical or physical

constraints that would make measure adoption impossible or ill advised. An

example might be an efficient lighting technology that cannot be used inStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 72 certain low temperature applications. The main sources for feasibility factors

are the Delaware baseline studies and engineering judgment.



###  Turnover is the percentage of existing equipment that will be naturally

replaced each year due to failure, remodeling, or renovation. This applies to

the natural replacement (“replace on failure”) and renovation markets only.

In general, turnover factors are assumed to be 1 divided by the baseline

equipment measure life (e.g., assuming that 5% or 1/20th of existing stock of

equipment is replaced each year for a measure with a 20

‐ year estimated life).



###  Not Complete is the percentage of existing equipment that already

represents the high

‐ efficiency option. This only applies to retrofit markets.

For example, if 30% of current single family home sockets already have

compact fluorescent lamps, then the not complete factor for residential CFLs

would be 70% (1.0

‐ 0.3), reflecting that only 70% of the total potential from

CFLs remains. The main sources for not complete factors are the Delaware

baseline studies, and the findings of other baseline and potential studies.



###  Savings Fraction represents the percent savings (as compared to either

existing stock or new baseline equipment for retrofit and non

‐ retrofit

markets, respectively) of the high efficiency technology. Savings fractions are

calculated based on individual measure data and assumptions about existing

stock efficiency, standard practice for new purchases, and high efficiency

options.

- Baseline Adjustments adjust the savings fractions downward in future

years for early

‐ retirement retrofit measures to account for the fact that

newer, standard equipment efficiencies are higher than older, existing

stock efficiencies. We assume average existing equipment being replaced

for retrofit measures is at 60% of its estimated useful life.



###  Annual Net Penetrations are the difference between the base case measure

penetrations and the measure penetrations that are assumed for an economic

potential. For the economic potential, it is assumed that 100% penetration is

captured for all markets, with retirement measures generally being phased in

and spread out over time to reflect resource constraints such as contractor

availability.

The product of all these factors results in the total potential for each measure permutation.

Costs are then developed by using the “cost per energy saved” for each measure applied to the

total savings produced by the measure. The same approach is used for other measure impacts,

e.g., operation and maintenance savings.



### COST-EFFECTIVENESS ANALYSIS

Cost-Effectiveness Tests

This study applies the Total Resource Cost (TRC) Test as the basis for excluding non

‐ cost

‐

effective measures from the potential. The TRC test considers the costs and benefits of efficiencyStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 73 measures from the perspective of society as a whole. In addition, for the program potential

scenario we report the cost

‐ effectiveness of the efficiency programs using the Program

Administrator Cost Test and the Participant Cost Test. The principles of these cost tests are

described in the California Standard Practice Manual

. 29

The following table provides the costs and benefits from the perspective of each of the cost

‐

effectiveness tests.

Table 43 | Overview of Cost-Effectiveness Tests

Monetized Benefits / Costs Total

Resource

Cost (TRC) Program

Administrator

Cost Test Participant

Cost Test

Measure cost (incremental over

baseline) Cost Cost

Program Administrator incentives Cost Benefit

Program Administrator non

‐ incentive

program costs Cost Cost

Energy & electric demand savings* Benefit Benefit Benefit

Fossil fuel increased usage Cost Cost Cost

Operations & Maintenance savings Benefit Benefit

Water savings Benefit Benefit

Deferred replacement credit** Benefit Benefit

*For the TRC and PACT, energy and electric demand savings are valued using avoided cost values that

represent wholesale marginal costs, varying by time of day and season. For the Participant Cost Test,

energy savings are valued at average retail costs for each customer sector.

**For early

‐ retirement retrofit measures, the Deferred Replacement Credit is a credit for when the existing

equipment would have needed replacement. The equipment’s replacement cycle has been deferred due

to the early replacement.



### Discounting the Futur e Value of Money

Future costs and benefits are discounted to the present using a real discount rate of 3%. The

U.S. Department of Energy recommends a real discount rate of 3% for projects related to energy

conservation, renewable energy, and water conservation as of 2010, which is consistent with the

Federal Energy Management Program (FEMP). 30 For discounting purposes we assume that

initial measure costs are incurred at the beginning of the year, whereas annual energy savings

are incurred half way through the year.



### Gross and Net Energy Savings

We report potential estimates in terms of net savings. Net energy savings take into account

free

‐ riders, who would have installed the measures in the absence of the program, and spillover

29 California Standard Practice Manual: Economic Analysis Of Demand

‐ Side Programs And Projects, July 2002;

Governor’s Office of Planning and Research, State of California; http://www.calmac.or g/events/SPM_9_20_02.pdf

30 See page 1 in http://www1.eere.energy.go v/femp/pdfs/ashb10.pdf.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 74 customers, who install measures due to program activities but never receive a program

incentive. The formula for net savings (kWh or MMBtu) is:

Net savings

= Gross savings X (1

– FR + SO)

where

FR

= free

‐ ridership rate as a % of program participation

SO

= spillover rate as a % of program participation

See Appendix K for the free ridership and spillover assumptions used for this study.



### AVOIDED ENERGY SUPPLY COSTS

Overview

Avoided energy supply costs are used to assess the value of energy savings (or increased

usage). Development of full avoided costs was outside the scope of the project, thus we have

relied on the best available data for this study.

The following criteria have been used for the avoided costs for this study:



###  We have not included costs for externalities, such as air quality or reduced

greenhouse gas emissions.



###  We have not included the avoided costs of price suppression, or demand

reduction induced price effect (DRIPE).



###  We have not included a wholesale risk premium. 31

The above factors are included in the avoided costs of many efficiency programs and may

be considered for inclusion by Delaware for future efficiency programs. This study can be

considered conservative in this respect, since these factors have not been included in the

avoided costs. The sensitivity analysis for this study includes a scenario of higher avoided costs,

which serves as a proxy for inclusion of the above factors.



### Electricity

Electric avoided costs were developed in collaboration with Delmarva Power.

The energy costing periods include Summer On

‐ Peak, Summer Off

‐ Peak, Winter On

‐ Peak,

and Winter Off

‐ Peak. These periods are defined as follows:



###  On

‐ peak hours are 8:00 a.m. to 9:00 p.m. during periods of the year when

Eastern Standard Time is in effect, and 9:00 a.m. to 10:00 p.m. when Eastern

Daylight Savings Time is in effect, Monday through Friday, including

holidays falling on weekdays. All other hours are off

‐ peak hours.



###  Summer is June thru September. Winter is October through May.

31 Wholesale risk premiums are estimated and provide energy savings benefits for some efficiency programs. For

example, see “Avoided Energy Supply Costs in New England: 2013 Report”, Synapse Energy Economics, 2013,

http://www.synapse

‐ energy.com/Downloads/SynapseReport.2013

‐ 07.AESC.AESC

‐ 2013.13

‐ 029

‐ Report.pdf.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 75 In addition to avoided costs for electric energy, avoided costs were developed for summer

generation capacity, transmission capacity, and distribution capacity. The peak demand

performance hours are from 2:00pm to 6:00pm Eastern Prevailing Time (EPT), inclusive, June

through August, but not including weekends and federal holidays.



### Natural Gas

Natural gas avoided costs were not available for Delaware. The best option for current

avoided costs for natural gas were those developed in 2013 for southern New England (MA–

CT–RI) by Synapse Energy Economics. 32 Delaware’s natural gas supply is similar to southern

New England in several key respects:



###  Delaware is part of the northeast system, served largely from the Gulf Coast

via the Transco pipeline



###  Delaware has access to the emerging Appalachian/Marcellus shale gas

through the Transco pipeline



###  Delaware has proximity to an LNG import terminal (Dominion Cove Point,

MD) which feeds into Transco and other pipelines



###  Delaware has growing demand for natural gas



### Petroleum Fuels

Because petroleum fuels are unregulated, the average retail rates for petroleum fuels were

used for avoided energy supply costs. The retail rates data are described in the next section.



### Water

Water avoided costs account for both water supply and sewer costs. The water avoided

costs are estimated at $0.005/gallon.



### ENERGY RETAIL RATES

Average energy retail rates are used to determine participant benefits for the Participant

Cost Test.

Delaware 2011 average retail rates for electricity, natural gas, distillate fuel oil, residual fuel

oil, and propane were determined by sector from the EIA State Energy Data System (SEDS). 33

The EIA estimates retail rates by dividing estimated utility revenue by estimated energy sales.

Retail rates for each fuel were projected through the analysis period assuming growth rates for

the “South Atlantic” region from the EIA’s 2013 Annual Energy Outlook. 34 Retail rates for the

32 “Avoided Energy Supply Costs in New England: 2013 Report”, Synapse Energy Economics, 2013,

http://www.synapse

‐ energy.com/Downloads/SynapseReport.2013

‐ 07.AESC.AESC

‐ 2013.13

‐ 029

‐ Report.pdf.

33 U.S. Energy Information Administration, Electric Power Annual

‐ Form EIA

‐ 861, “Average Price by State by

Provider 1990

‐ 2011,” October 1, 2012; U.S. Energy Information Administration, State Profile and Energy

Estimates, April 18, 2013.

34 U.S. Energy Information Administration, Annual Energy Outlook 2013, “Table 3.3 Energy Prices by Sector and

Source

– South Atlantic,” April 2013.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 76 aggregated petroleum fuels were determined by weighting the individual fuel rates by their

relative share of the projected 2013 fuel sales from the sales forecast on a Btu basis.

Appendix C shows the average retail rates, by fuel, sector and year.



### ELECTRIC LOAD SHAPES

Electric energy load shapes are used to divide annual efficiency measure kWh savings into

the energy costing periods of the avoided costs. End use specific load shapes were not available

for Delaware. For this project, load shapes have been developed based on 2002 Itron eShapes

8760 load profile data for New York. The load shapes for the cooling end use were developed

using the weather station for LaGuardia Airport and used the weather station for Islip, on

central Long Island for other end uses. While the selected load shapes are based on weather

stations from a different state, they provide the nearest and best data as Delaware eShapes data

are no longer available. For the purposes of this study, it is unlikely that the load shapes in

Delaware would differ significantly from the load shapes in New York. Moreover, weather

sensitive load shapes for end uses such as cooling and space heating were manually adjusted to

include Delaware

‐ specific weather data such as heating and cooling degree days.

The eShapes data provide 8760 load profile data for electric energy usage, by sector, and for

various end uses and building types. The data were based on approximately 20,000 building

audits performed nation

‐ wide mainly in the early 1990s. More than half of the roughly 20,000

audits were performed on

‐ site. These were very highly detailed audits, including an inventory

of building energy usage; specific equipment types, characteristics and quantities (e.g., down to

numbers of lamps); end use metering; thermostat settings; operating schedules by zone; fuel

types for hot water, space heating and cooking; thermal shell details; building orientation and

size; etc. The mail surveys were less detailed, but attempted to collect the same information.

Building simulations were then performed with proprietary modeling software for many of the

audited buildings, to develop a set of prototype buildings calibrated to the measured data for

individual sites.



### APPROACH TO FINANCING

Initial costs are a major barrier to the implementation of energy efficiency and renewable

energy projects in homes and businesses. While program incentives may offset a significant

portion of that cost, the customer is still asked to contribute the rest of the project cost.

Financing the remaining costs may be desired or necessary for some customers, and may make

the difference in deciding whether or not to pursue a project. Often the financing payments can

be arranged such that the customer has a positive cash flow due to the project’s annual benefits

so that the monetized benefits of the implemented project pay for the amortized loan payments.

In addition to traditional bank loans, a variety of funding mechanisms have been used and

proposed for financing energy efficiency and renewable energy projects, including interest

‐ rate

buydowns, on

‐ bill financing, energy service performance contracting, and property tax

financing (also known as Property Assessed Clean Energy or PACE).Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 77 While project financing can be important for increasing the implementation of clean energy

options, the costs of financing and the degree to which access to capital is a market barrier are

not easily quantified. As such, we have not specifically included the costs and impacts of

financing options in our analysis. Rarely do potential studies include such costs. However, the

incentives we specify provide enough flexibility to be applied either to equipment and/or

financing options like interest rate buydowns. The important concept is that favorable financing

options be available as they can lower the costs of achieving the same program impacts by

reducing the need for incentives or other program intervention. Our program plans include the

use of financing options where appropriate.



### ECONOMIC POTENTIAL ANALYSIS

The top

‐ down analysis, along with all the data inputs, produces the measure

‐ level potential,

with the economic potential being limited to installation of cost

‐ effective measures. However,

the total economic potential is less than the sum of each separate measure potential. This is

because of interactions between measures and competition between measures. Interactions

result from installation of multiple measures in the same facility. For example, if one insulates a

building, the heating load is reduced. As a result, if one then installs a high efficiency furnace,

savings from the furnace will be lower because the overall heating needs of the building have

been lowered. As a result, interactions between measures should be taken into account to avoid

over

‐ estimating savings potential. Because the economic potential assumes all possible

measures are adopted, interactions assume every building does all applicable measures.

Interactions are accounted for by ranking each set of interacting measures by total savings, and

assuming the greatest savings measure is installed first, and then the next highest savings

measure. This is a conservative approach in that it is more likely that some measures with

marginal savings may not pass the cost

‐ effectiveness test after all interactions are accounted for.

Measures that compete also need to be adjusted for. These are two or more efficiency

measures that can both be applied to the same application, but only one can be chosen. An

example is choosing between replacing an incandescent lamp with either a CFL or an LED, but

not both. In this case, the total penetration for all competing measures is 100%, with priority

given to the measures based on ranking them from highest savings to lowest savings. If the first

measure is applicable in all situations, it would have 100% penetration and all other competing

measures would show no potential. If on the other hand, the first measure could only be

installed in 50% of opportunities, then the second measure would capture the remaining

opportunities.

To estimate the economic potential we generally assumed 100% installation of market

‐

driven measures (natural replacement, new construction/renovation) constrained by measure

cost

‐ effectiveness and other limitations as appropriate, such as to account for mutually

exclusive measures.

Implementation of retrofit measures was considered to be resource

‐ constrained, i.e., it

would not be possible to install all cost

‐ effective retrofit measures all at once. The retrofit

penetrations rates ramped up from 2% to 10% per year over the first 5 years, then continued atStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 78 10% per year through year 12. This effectively represented capturing all retrofit opportunities

over the 12

‐ year study period. With these assumptions the economic potential essentially

captures all available cost

‐ effective efficiency potential for retrofit measures by the end of the

study period.

For measures that are market

‐ driven only (new construction, renovation, and/or natural

replacement) and which have measure lives longer than 12 years, the turnover rate is such that

not all of the economic potential will be captured over the 12

‐ year study period. For example, a

high

‐ efficiency boiler measure with a 20

‐ year measure life may not be cost

‐ effective for early

‐

retirement retrofit, but passes for natural replacement. If so, only about 5% (1/20th) of the

market turns over every year, so the entire market would not be replaced within the 12

‐ year

study period. For this measure the 12

‐ year economic potential would be less than the 20

‐ year

economic potential.



### PROGRAM POTENTIAL SCENARIO

Estimates of potential energy savings that can be captured through realistic program

designs have been developed through a sequential and systematic process that combined a

detailed review of available cost

‐ effective savings at the measure or project level with a higher

level review of applicable best practices in program implementation.



### Measure Selection

Program potential is based on a detailed analysis of the energy savings of a wide range of

energy efficiency measures. Estimated savings and costs for these measures were reviewed for a

variety of different applications to determine which measures could be cost

‐ effectively

supported. This analysis involved reviewing an exhaustive list of possible measures and then

grouping them in combinations based on how they can best reach Delawareans. For example,

residential high efficiency furnaces can be promoted as a stand

‐ alone measure for homeowners

whose existing furnaces have failed, as an energy

‐ saving “early retirement” program before

they have failed, or for installation in a newly

‐ constructed home. The costs of upgrading to a

high efficiency furnace are different in each of these examples, and the amount of energy that

can be saved compared with business as usual will also vary. Therefore, in this example each of

these different scenarios was tested to determine where the measure could be cost

‐ effectively

promoted.



### Program Definition

An analysis of likely delivery mechanisms for different energy efficiency measures was

coupled with research on best practice programs to develop program scenarios for Delaware.

Program frameworks were defined with the goal of delivering the greatest amounts of cost

‐

effective energy efficiency that could be delivered with a high degree of reliability. This is in

contrast to other design criteria that could have been used, such as delivering only the least

costly savings, or designing programs that have potential to deliver very large amounts of

energy efficiency, but that come with high levels of uncertainty. Program frameworks reflect

research that was done to better understand the specifics about how energy efficiency marketsStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 79 work in Delaware. Research explored demographic information as well as where homeowners

shop, and what sort of distributer/installer networks exists for the sale and installation of energy

efficient equipment.

For example, PSE&G’s best

‐ practice multi

‐ family program is likely neither the least

expensive per unit of energy saved nor is it designed to save extraordinary amounts of energy

at any cost. However, by using a comprehensive approach that includes technical assistance

and construction management, quality assurance, and both cash incentives and structured

financing, the program addresses multiple barriers in a way that results in significant and

reliable savings in a market sector that has traditionally been under

‐ served by efficiency

programs. This program achieves much greater savings than a simple direct

‐ install multi

‐ family

program would, but in our modeling this type of program can deliver cost

‐ effective savings in

Delaware. For more information on the best practice program models that were reflected in the

Delaware program potential study please refer to the “Gathering Best Practices” section. Please

also see the earlier section titled “Multiple Barriers Require Multiple Strategies” for a discussion

of the approach to addressing barriers to greater energy efficiency.



### Measure Incentives and Penetration Rates

Measure penetration rates, or adoption rates, are affected by a broad variety of factors

depending on the measure: the market barriers that apply and to what degree, the program

delivery strategy, incentive levels, marketing and outreach, technical assistance to installers, etc.

While penetration rates will generally increase with increased spending, how the spending is

applied can have a huge impact on actual participation rates. Due to the complexity and

interrelated nature of market barriers and the various methods used to promote efficiency

measures, we base our assumptions for penetration rates on actual experience from efficiency

programs coupled with the specific assumptions for each measure and program, rather than

broadly applying a general formula based on a subset of factors. We believe this approach

provides the best estimates of actual measure performance in a program potential scenario.

Incentive levels have been established as a percent of measure incremental cost at the

program level. While in practice the incentive levels for individual measures will vary within a

program, there is typically a good degree of commonality across measures and incentive levels

can reliably be set at the program level for the program potential scenario. In this analysis, we

developed an average incentive level for each program to simplify the analysis. In reality,

different measures would receive incentives that represent different proportions of the measure

cost. For each measure, the model multiplies the incentive by the penetration rate to establish

the overall incentive cost in each year. Non

‐ incentive program budget are then estimated

relative to incentive spending, as described in the following section.



### Non-Incentive Program Budgets

Non

‐ incentive costs were set at the program level. These include the costs of general

administration, technical assistance, marketing, EM&V, and performance incentives. Rather

than create an administrative “program” that captures cross

‐ program spending and commonStudy of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 80 support services (e.g., information technology and marketing), but which generates no savings,

we allocate all administrative spending across all of the programs.

We used a three

‐ step process to estimate non

‐ incentive costs and allocate them to programs

and measures. Non

‐ incentive costs were categorized as follows:



###  Administration (including management staff, information technology

support, accounting, administrative support staff, incentive application

processing, insurance, offices, equipment, legal, etc.)



###  Technical Assistance



###  Marketing



###  Evaluation, measurement & validation (EM&V)



###  Performance Incentive

We note that some other categories of non

‐ incentive spending exist that may be important

but minor components of an efficiency program’s budget. These include items such as

sponsorships for conferences, memberships in relevant industry organizations, partnerships

will local institutions, and the like. While relevant, we are unable to determine to what extent

these costs were captured in the data we used as the basis for our estimates. Furthermore,

because they are relatively small amounts compared to the other categories, we have not

explicitly added costs for them. As such time as Delaware proceeds with detailed program

implementation, these costs should be included in program budgets.

First, we estimated the distribution of total program costs into incentives and the non

‐

incentive categories listed above based on cost data from existing efficiency programs in other

jurisdictions. Data were drawn from fully integrated (i.e., electric and fossil fuels) programs

operating at the same high levels of savings as our projected program achievable potential for

Delaware after several years of ramp

‐ up, including programs in Vermont, Massachusetts, and

Rhode Island. We also included cost data from regionally

‐ appropriate integrated programs

from Baltimore Gas & Electric and PECO. The table below presents the results of this analysis.

Table 44 | Percent of Total Cost at Full Program Ramp-Up by Cos t Category

The proportion of incentive vs. non

‐ incentive budget costs varies among programs as does

the distribution of the non

‐ incentive cost categories. Programs like new construction (both

residential and C&I) need significant technical resources for training, plan review, and code Program Administration Technical

Assistance Marketing EM&V Performanc

e Incentive Incentives Total

Residential New Construction 4% 35% 3% 3% 4% 51% 100%

Home Energy Services 3% 18% 9% 3% 4% 63% 100%

Multi family 3% 19% 5% 3% 4% 66% 100%

Residential Products 3% 5% 15% 3% 4% 70% 100%

Low Income Single Family 3% 21% 1% 3% 4% 68% 100%

Residential Behavior 2% 27% 3% 4% 1% 62% 100%

C&I Lost Opportunity 2% 9% 1% 3% 4% 81% 100%

Small Business Retrofit 2% 9% 1% 3% 4% 81% 100%

Large Business Retrofit 5% 12% 1% 3% 4% 75% 100%Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 81 compliance assistance. Income

‐ eligible programs will have higher proportions of incentive

costs, as incentive levels are typically set at the full measure cost. For programs like residential

products and home energy services, proper funding of marketing is critical to build program

participation and to educate consumers of the benefits of program participation.

Second, we developed year

‐ by

‐ year cost estimates for each category that reflect the

changing nature of efficiency programs as they grow from new programs to fully mature

offerings. The non

‐ incentive dollar costs for years one to six are calculated as a percentage of the

total costs at full ramp

‐ up in year seven, as shown in the Table 45. Note that not all of the costs

are ramped up equally or linearly over the seven

‐ year period. For example, administration and

marketing functions that are essential to early program success start at higher percentages and

become fully operational prior to year seven. Conversely, EM&V activities will not start until

the fourth year.

Table 45 | Ramp-Up Schedule with Costs Relative to Year 7

Combining this ramp

‐ up schedule with the actual pattern of spending based on program

activity results in a changing allocation of spending for each program over time. As an example,

the table below shows the year

‐ by

‐ year distribution of costs for the residential new construction

program. Note that the year seven distribution matches the distribution shown for this program

in Table 45 above.

Table 46 | Ramp-Up Schedule with Costs Relative to Total Budget

The final step was to allocate costs between electric, gas, and petroleum fuel measures based

on total resource benefits. That is, if electric measures in a particular program are responsible Year Administration Technical

Assistance Marketing EM&V Performance

Incentive

2014 50% 20% 30% 0% 0%

2015 60% 30% 50% 16% 16%

2016 70% 40% 75% 32% 32%

2017 80% 50% 85% 51% 51%

2018 100% 50% 100% 75% 75%

2019 100% 75% 100% 92% 92%

2020 100% 100% 100% 100% 100%

* Percents are relative to year 7 (2020) value

Year Administration Technical

Assistance Marketing EM&V Performance

Incentive Incentives Total

2014 14% 49% 6% 0% 0% 30% 100%

2015 10% 44% 6% 2% 3% 35% 100%

2016 7% 37% 6% 3% 3% 43% 100%

2017 6% 33% 5% 3% 4% 49% 100%

2018 6% 26% 4% 3% 4% 56% 100%

2019 5% 30% 3% 3% 4% 54% 100%

2020 4% 35% 3% 3% 4% 51% 100%Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 82 for 46% of total resource benefits, we allocated 46% of the total non

‐ incentive costs for that

program to the electric measures for purposes of reporting fuel

‐ specific cost

‐ effectiveness.



### Program Savings Targets

For the program potential, program activity has been projected to ultimately achieve a level

of savings commensurate with those of the most successful efficiency programs around the

country. We have assumed that programs start with very low levels of savings, particularly in

the first year when programs would be required to hire staff, develop internal procedures,

acquire training, establish contracts, and related activity. Commercial projects enrolled in the

first year may not bear fruit for 12

‐ 18 months. Program activity will ramp up to full savings

rates over a period of seven years.

The ultimate targets we assume for annual savings are:



###  Electric: 2.5% of annual MWh sales



###  Natural gas: 1.3% of annual MMBtu sales

Some electric measures, especially indoor lighting, have a “heating penalty” due to their

decreased waste heat, which increases a building’s heating load. The heating penalty can

amount to a significant portion of the savings of natural gas measures. However, the increased

usage of natural gas due to efficient electric equipment should not count against the savings of

natural gas measures. Therefore, the natural gas targets apply to the savings of natural gas

measures, and do not include the increased natural gas usage to make up for efficient electric

equipment. The same approach applies to petroleum fuels.

We did not set a specific savings target for petroleum fuels. Instead, petroleum fuel savings

were determined commensurate with the level of program activity for natural gas. However,

the levels of petroleum fuel savings differ from the levels of natural gas savings due to their

having different avoided costs and, for some technologies, different efficiency measures.



### Sector Equity

The efficiency programs have been designed to assure that all customers can participate in

the programs, and to preserve sector equity relative to sector funding. Although it does not

affect the analysis, we presume that funds collected from residential customers would go to

residential programs; the same would apply to commercial/industrial customers. We have not

assumed that funds would necessarily be collected at the same rate (i.e., on a per

‐ kWh or per

‐

MMBtu basis) across sectors. Instead, for the program potential scenario we have generally

pursued the most cost

‐ effective savings, knowing that this results in a disproportionate portion

of total savings from the C&I sector where there are less expensive efficiency opportunities.

There may be policy considerations that would lead to a different allocation in portfolio

spending. For example, some jurisdictions provide funding for income

‐ eligible customer

programs in greater proportion than their electric bills or usage would indicate. These decisions

are not the purview of our analysis.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 83 

### MAXIMUM ACHIEVABLE POTENTIAL

Our maximum achievable scenario analysis proceeded in a more simplified manner than the

program potential, primary because we did not develop program costs in conjunction with the

savings. Rather, we assumed that under such a scenario, unconstrained spending is available to

overcome market barriers to the greatest feasible degree. In practice, this would translate to

paying 100% incentives for all measures, across all programs, along with high levels of non

‐

incentive spending. Given this assumption, but also recognizing that some market barriers

cannot be fully overcome, even with unconstrained spending, we developed measure

penetration rates based on the best performing programs around the country and professional

judgment as to what would be possible with unconstrained spending.

As a result, our estimate of the maximum achievable scenario is somewhat theoretical,

because it is unlikely that any efficiency program would be provided with such unconstrained

spending. On the other hand, it does provide an upper bound comparison with the high level of

savings targeted by the program potential scenario.Study of Potential for Energy Savings in Delaware

Optimal Energy, Inc. 84 

## APPENDICES

 A: Task 3.1 Market Barriers Final Memo



###  B: Task 3.2 Best Practices Final Memo



###  C: Task 3.3 Interview Questionnaire



###  D: Task 3.3 Completed Questionnaires/interview notes



###  E: Task Market Research Final Memo



###  F: Residential Program Concepts Descriptions



###  G: C&I Program Concepts Descriptions



###  H: Energy Sales Disaggregation (updated from Phase I)



###  I: Measure Characterizations (updated from Phase I)



###  J: Bibliography (updated from Phase I)



###  K: Other Analysis Inputs and Assumptions (updated from Phase I)



###  L: Sales Forecast



###  M: Avoided Costs



###  N: Load Shapes



###  O: Rate and Bill Impacts Memo



###  P: Job Impacts MemoOptimal Energy, Inc. 

## Stud **y of Potential for** 

**Energy Savings in Delaware**

**Appendices**

**2014**



## Prepared for

**by:**

**Optimal Energy, Inc** 

**. 10600 Route 116, Suite 3** 

**802**

**- 482** 

**- 5**  **6 00**  **www.optenergy.com Hinesburg, VT 05461** Optimal Energy, Inc. 

## Contents

Appendix A: Task 3.1 Market Barriers Final Memo

................................ ................................ .............. A

- 1

Appendix B: Task 3.2 Program Best Practices Final Memo

................................ ................................ ... B

- 1

Appendix C: Task 3.3 Interview Questionnaire

................................ ................................ ...................... C

- 1

Appendix D: Task 3.3 Completed Questionnaires

................................ ................................ ................. D

- 1

Appendix E: Task 3.3 Market Research Final Memo

................................ ................................ .............. E

- 1

Appendix F: Residential Program Concepts Descriptions

................................ ................................ ....... F

- 1

Appendix G: C& I Program Concepts Descriptions

................................ ................................ ............... G

- 1

Appendix H: Energy Sales Disaggregation, Updated from Phase 1

................................ ....................... H

- 1

Appendix I: Measure Characterizations, Updated from Phase 1

................................ .............................. I

- 1

Appendix J: Bibliography, Updated from Phase 1

................................ ................................ ................... J

- 1

Appendix K: Other Analysis Inputs and Assumptions, Updated from Phase 1

................................ ...... K

- 1

Appendix L: Sales Forecast

................................ ................................ ................................ ..................... L

- 1

Appendix M: Avoided Costs

................................ ................................ ................................ .................. M

- 1

Appendix N: Load Sha pes

................................ ................................ ................................ ...................... N

- 1

Appendix O: Rate and Bill I mpacts

................................ ................................ ................................ ........ O

- 1

A

ppendix P: Job I mpacts

................................ ................................ ................................ ......................... P

- 1Optimal Energy, Inc. 

## APPENDIX A: TASK 3.1 **MARKET BARRIERS FINA L MEMO** 

## Market Barriers and Solution Strategies

**DRAFT Task 3.1 Deliverable**

**Prepared for**

**by:**

**16 September 2013**

**Optimal Energy, Inc**

**. 14 School Street** 

**802.453.5100 www.optenergy.com**  **Bristol, VT 05443**Optimal Energy, Inc. 

## Contents

Introduction

................................ ................................ ................................ .................... 3

Split Incentives/Agency

................................ ................................ ................................ 3

Lack of Information/Uncertainty

................................ ................................ ................. 5

Transaction Costs

................................ ................................ ................................ ........... 8

Financial Constraints

................................ ................................ ................................ ..... 9

Lack of Availability

................................ ................................ ................................ ..... 12

Addition al Barriers

................................ ................................ ................................ ...... 13

Conclusions

................................ ................................ ................................ .................. 133

Optimal Energy, Inc. 

### INTRODUCTION

A widely

- cited report by McKinsey & Company (2009) estimated that the United States

could decrease its annual energy consumption 23% by implementing efficiency measures,

saving c ustomers over a trillion dollars

. 1 Yet the implementation of efficient technologies and

behavioral changes necessary to achieve energy savings is far below what would be expected.

First used by Hirst and Brown (1990), the “energy efficiency gap” is a term that refers to the

underinvestment in energy efficiency based on what would be anticipated given the economic

and social benefit s. 2 Households, governments, businesses, and manufacturers often fail to

utilize cost

- effective technologies to reduce energy consumption despite technical feasibility.

T o expl ain the energy efficiency gap many have sought to identify the market barriers and

market failures that prevent people and organizations from achieving optimal levels of

improved energy efficiency. These barriers inhibit consumers from making economically

rational decisions and investing in cost effective energy efficiency measures

. Although many

different frameworks have been described, there appears to be much consensus in the literature

about the types of barriers that impact energy efficiency. These barriers and market failures

include split incentives, lack of information, transa ction costs, financial constraints, and lack of

availability, among others.

The following sections provide further discussion of several barriers as well as some of the

potential solutions to overcome them. Although this list is not exhaustive, it touches on the

most frequently cited and most important to overcome. 3



### SPLIT INCENTIVES/AGE **NCY**

Split incentives occur when the benefits and costs of investing in energy efficiency are

divided between two parties or agents

. Often referred to as the “principal

- agent ” problem, this

challenge emerges because the party responsible for making energy efficiency investment

decisions (the agent) is not the same party that benefits from the investment (the principal.) This

barrier is frequently described with regards to the rental property market. Typically, upgrading

the efficiency of a current building or utilizing energy efficient building practices requires the

owner of the building to make an initial capital investment. However, in the residential sector,

for example, approximately 80 percent of renters are responsible for paying their own utility

costs. 4 Therefore, tenants receive the benefits from the landlord’s investment in the form of

reduced energy bills. Since the building owners will not receive fi nancial benefits from the

upfront costs, there is no incentive for them to make the investment in energy efficiency.

1 McKinsey & Company, “Unlocking Energy Efficiency in the U.S. Economy. July 2009.

2 Hirst, E. and Brown, M. “C losing the Efficiency Gap: Barriers to the Efficient Use of Energy.” Resources, Conservation

and Recycling 3(4), 267

- 281. 1990

.

3 For a broader discussion of market barriers, see: Eto, Phrahl, and Schlegel, “Lawrence Berkeley National

Laboratory, “A Scoping Study on Energy

- Efficiency Market Transformation by California Utility DSM

Programs.” 1996.

4 Harvard Joint Center for Housing Studies. “America's Rental Housing: Meeting Challenges, Building on

Opportunities.” 2011.4

Optimal Energy, Inc. The agency issue also arises in the property ownership market. For example, builders may

not opt to fund efficiency improvements in newly c onstructed buildings because buyers will be

responsible for utility costs once the building is sold. Additionally, owners may not plan to

occupy a building long enough for the payback from their investment to be realized. In that

instance, the new occupant s would receive the benefits of the investment rather than the

original owners. Although discussion of the split incentive barrier often focuses on the

residential sector, it is also relevant in commercial buildings in which the party that would

make the i nvestment in energy efficiency is different from the party that would reap the

benefits of energy savings

.

Another less frequently discussed example of a principal/agent challenge relates to large r

customers in the commercial and industrial ( C&I ) sectors

. Often, the employees who have the

power to make capital investment decisions are not the same as those who manage the

operations and maintenance of a facility and understand its energy use.



### Green **L eases** 

A “green lease” is tool that allows a building owner’ s investment in energy efficiency to be

beneficial to both the owner and the tenant. Typically, the agreement enables to the landlord to

charge tenant s a higher rent in order to pay for the cost of fund ing the building’s energy

efficiency upgrades. In the commercial building sector, green leases have grown in popularity

in recent years. One real estate consulting firm suggests that green leases can achieve a 20

- 40

percent reduction in energy use for a commercial property. 5 While this concept has been

applie d on a more limited scale in the residential sector, it could serve as a potential tool to

address the residential split incentive problem. For example, a green residential lease program

is being piloted on a small scale by the Cambridge Energy Alliance and the City of Cambridge,

Massachusetts. 6 Enabling tenants to pay the cost of the energy efficiency improvements through

increased rent aligns incentives by having the beneficiaries of the savings fund the cost.



### On

**- bill Financing** 

One funding mechanism tha t may hold promise for reducing the split incentive problem is

o n

- bill financing. On

- bill financing programs allow customers to repay investments in energy

efficiency on their monthly utility bills. 7 A funder, frequently the utility company, provides the

u pfront capital for efficiency improvements at no or low interest rates. Repayment periods are

often three years or less. Loans can either be tied to customers or tied to meters. For loans tied to

meters, the building occupant pays for the upgrades, but onl y so long as they live in the rental

unit. If a tenant moves, the new tenant takes on responsibility for paying the remainder of the

loan while occupying the building. On

- bill financing reduces the split incentive problem

because the landlord does not need to provide the upfront capital for the efficiency project and

renters payback the cost.

5 LORD Green Real Estate Strategies as cited in Dingwell, J. “Using Green Leases to Improve Building Performance.”

Economy Post. http://greeneconomypost.com/ green

- leases

- improve

- building

- performance

- 8003.htm. 2010.

6 U.S. Dept. of Housing and Urban Development. “Evidence Matters: Split Incentives.”

http://www.huduser.org/portal/periodicals/em/summer11/highlight1_sidebar.html. 2011.

7 Kats, G., Menkin, A., et a l

. “Energy Efficiency Financing

- Models and Strategies.” Updated 2011.5

Optimal Energy, Inc. “Pay

- as

- You

- Save (PAYS®),” for example, is a market

- based system developed by the

Energy Efficiency Institute that uses o n

- bill financing to fund efficiency upgrades. 8 The system

allows a landlord or tenants to make energy efficient upgrades through funding from a third

party with no upfront costs. The funding amount is then repaid through a monthly charge on

utility bills at no additional interest. The charge incurred is lower than the savings received by

the tenants. When a tenant moves, the new tenant takes over monthly payments for the

upgrades. With this funding mechanism, incentives are aligned. Tenants pay for the cost of the

upgrades, but less than the savings t hey receive, and only so long as they live in the unit. An

example of a financing program based on the PAYS model is the How$mart energy efficiency

program, implemented in Central and Western Kansas by Midwest Energy, Inc. 9



### Mandatory Codes and Standards

An additional strategy for reducing the split incentive problem includes mandatory codes

and standards. By requiring landlords to meet certain standards of efficiency, regulations

ensure that the energy performance of inefficient buildings gets improved, reg ardless of who

benefits from the improvement

. Codes and standards typically apply to newly constructed

buildings, but s ome jurisdictions have also regulate d the ef ficiency of existing buildings b y

mandating that efficiency improvements be made at a time or sale or be required for existing

buildings meeting certain criteria. For example, the city of Boulder, Colorado’s SmartRegs

ordinance requires that current rental units obtain a Home Energy Rating System (HERS) score

of 120 or achieve 100 checklist points on the SmartRegs prescriptive path checklist by January 2,

2019. 10 The checklist is designed to identify the most cost effective measures building owners

can take to comply with the regulations.



### LACK OF INFORMATION/ **UNCERTAINTY**

The quantity and complexity of information needed to make informed decisions about

investments in energy efficiency makes the information barrier a significant challenge to

overcome. Customers may not be aware of the building’s performance and the opportunities for

energy savings . St udies have suggested, for example that only a small percentage of U.S.

households are aware of how much energy they consume and how to best reduce their energy

use. 11 Customers pay energy costs as one monthly bill (and only after energy has been

consumed)

, so it is often unclear which end uses drive energy costs. Even if customers want to

improve the energy efficiency of their buildings, they might not have relevant information

about the technolog ies available, how to assess their options, or the level of sa vings to

anticipate. If customers are not sure where to turn for technical or financial support, this

information barrier may prevent them from moving forward.

8 Cillo, P. and Lachman, H.

, “Pay

- As

- You

- Save Energy Efficiency Products: Restructuring Energy Efficiency.” 1999.

9 Volker, M. and Johnson, K.

, “Breaking Down the Barriers to Efficienc y Improvements in the Rental Housing

Market: One Utility’s Approach.” ACEEE Summer Study on Energy Efficiency in Buildings. 2008.

10 City of Boulder

, “SmartRegs Guidebook & The Rental License Handbook.” 2011.

11 Ehrhardt

- Martinez, K. and Laitner, J., Editors

, “People

- Centered Initiatives for Increasing Energy Savings.” 2010.6

Optimal Energy, Inc. Additionally, uncertain information can cause customers to consider investments in energy

efficiency to be risky. For example, commercial customers could worry that the performance

and quality of an unfamiliar technology might negatively impact their business. Misperceptions

about energy efficient products may also prevent customers from consid ering upgrades.

Efficient products that were once inferior in other aspects of performance have been drastically

improved in later models. For example, older models of compact florescent lamps (CFLs) used

large and heavy magnetic ballasts, some of which cr eated a humming or buzzing noise , while

n ewer models address this problem. 12 There is also risk of uncertain information such as future

energy prices, which could impact future benefit of the investment.



### Education/Outreach

One way to reduce the information barrier is through various outreach and education

activities. For example, California’s “Flex Your Power” initiative was a multi

- million dollar

print, TV, and radio campaign that sought to get consumers and businesses to conserve energy

du ring the 2001 en ergy crisis

. 13 Community

- based education efforts are another approach to

educate renters about energy efficiency. One such example is Project Porchlight, a community

based campaign that promotes the use of CFLs rather than incandescent lamp s. The campaign

o rganizes volunteers and community groups to hand out CFLs at community events as well as

door

- to

- door to engage residents. To date, the campaign claims to have been responsible for

over 3.5 million changed light bulbs. 14 Competitions have also been successf ul tools for

engaging communities and promoting energy efficiency. Community

- wide competitions spur

action and generate publicity and awareness about energy efficiency efforts. 15 For example, the

Take Charge Challenge, an initiative of the Climate and Energ y Project, engaged six Kansas

towns in a year

- long competition to reduce energy use. 16 During the year, participating towns

saved over 6 million kWh. An additional 7 million kWh in annual savings is expected from the

installation of permanent efficiency upg rades. Raising awareness about energy efficiency and

providing information about opportunities for savings help customers to recognize the benefits

and make rational decisions.

Case studies also help to provide information about energy efficiency projects that have

been successful. On its commercial energy efficiency program website, Progress Energy lists

several examples of ways in which organizations identified energy

- savings opportunities and

implemented cost

- effective projects. 17 Case studies help to pro vide information about the types

12 ENERGY STAR, “Learn About CFLs.” Accessed September 11, 2013.

http://www.energystar.gov/index.cfm?c=cfls.pr_cfls_about.

13 Bender, S., Moezzi, M., Gossard, M., et al

, ” Using Mass Media t o Influence Energy Consumption Behavior:

California's 2001 ‘Flex Your Power’ Campaign as a Case Study.” In Proceedings of the 2002 ACEEE Summer

14 Project Porchlight, “About Us.” Accessed September 13, 2013. http://www.projectporchlight.com/

.

15 Harris, J., Hummer, J., and Cooney, K

, “Evaluation of Consumer Behavioral Research.” Navigant Consulting

Report to Northwest Energy Efficiency Alliance. 2010.

16 Fuller, M., Kunkel, M., et al. “Driving Demand for Home Energy Improvements.” Lawrence Berkley National

Laboratories. 2010.

17 Duke Progress Energy, “Energy Efficiency for Business.” Accessed September 13, 2013. https://www.progress

energy.com/carolinas/business/save

- energy

- money/energy

- efficiency

- for

- business.page7

Optimal Energy, Inc. of efficiency measures that can be implemented as well as reduce concerns about performance

uncertainty by providing examples of projects that achieved anticipated savings.



### Benchmarking/Energy Auditing **/Energy Monitoring**

Benchmarking, energy auditing, and monitoring all help to inform customers about the

energy their buildings consume, how they compare to other similar buildings, and typical

savings opportunities. Benchmarking refers to the documentation and comparison of a

building’s current energy use or historical energy use to that of a similar building.

Benchmarking can be done using data gathered from utility bills, energy modeling, or home

inspections and helps to inform customers about the potential energy savings a vailable through

implementing energy efficiency measures. Additionally, many programs offer energy auditing

to customers to inform them about the specific end uses and cost effective measures that

provide cost effective savings strategies. Moreover, energy monitoring systems provide real

time information to customers about the energy use at their facility. In some jurisdictions,

certain customers are required to bench mark their buildings and/or have them audited. For

example, the City of Seattle requires no n

- residential and multifamily building owners in Seattle

to track energy performance through the U.S. EPA’s Portfolio Manager and report annually to

the City. 18 Knowledge of building energy use and savings opportunities enables customers to

make informed an d rational decisions about energy efficiency investments.



### Energy Services Performance Contracting (ESPC)

Energy Service Performance Contracting is also a tool that can help t o reduce the risk of

uncertain information about energy efficiency savings outcom es for larger customers. An

Energy Services Company ( ESCO ) is a business that conceptualizes, implements, and

coordinates financing for energy efficiency improvement projects over a set period of time. The

ESCO manages a broad range of activities involved with the project and acts as a single point of

contact and accountability during the term of the contact. The ESCO provides comprehensive

technical knowledge to the customer, limiting their need to seek out vast amounts of unfamiliar

information. Using ESP C, a customer enters into an agreement with an ESCO to identify and

implement cost

- effective energy conservation measures (ECMs) that will be paid for out of the

achieved energy savings over the course of the agreement. Although there are different types of

energy performance contracts, the most common is a “guaranteed savings contract.” An

important aspect of this type of ESPC is that the ESCO guarantees the level of savings will

match or exceed the payments necessary to cover the projects’ upfront and on going costs. In the

event that energy savings to cover project costs are not achieved, the ESCO is responsible for

paying the difference, thereby reducing the customer’s risk of implementing ECMs. In the

United States, ESPC is a $4 billion industry and is a frequently used tool by public and

institutional entities. 19 In Kansas, Missouri, and Massachusetts, for example, the energy

18 Seattle Office of Sustainability and Environment, “Energy Benchmarking & Reporting.” Accessed September 12,

2013. http://www.seattle.gov/environment/benchmarking.htm

. 19 State of Idaho, “Guide to Energy Performance Contracting.” August 2008.8

Optimal Energy, Inc. efficiency of an estimated 50% of the floor area in state facilities has been addressed through

ESPC. 20



### Labeling/Certification

A p pliance and building labeling programs such as ENERGY STAR and LEED help to

inform customers about energy efficient products and buildings

. Labels signal to customers that

such products have met minimum energy performance standards and should produce relia ble

savings. Labeling appliances also gives customers information that allows them to compare the

energy use of a certain product with a number of other similar models and make a selection that

takes operating expenses into account. ENERGY STAR products, f or example, are

independently certified to meet levels of energy efficiency without sacrificing features or

functionality, removing much of the performance uncertainty for customers. 21 Therefore,

customer can feel confident that product with an ENERGY STAR label will save a significant

amount of energy and function at a high quality, removing some of the risk associated with

making the investment. Additionally, building labels inform potential buyers, renters, or

investors about the full cost of owning or le asing the property, which helps them to make a

more rational decision when deciding between buying a conventional building or an efficient

one.



### TRANSACTION COSTS

A barrier that is closely related to the information barrier involves transaction costs. Even

when the information needed to help customers make decisions to invest in efficiency is

available, acquiring that information can be burdensome in terms of time, money, or both.

Customers must seek out information to identify and weigh their options and h ire and manage

professionals to complete the work. Such actions require effort that is above and beyond what

they would likely undertake to maintain their current building. In the face of transaction costs,

maintaining the status quo is usually the easier and more comfortable option. This represents a

particular challenge for small C&I customers who are unlikely to have employees who work

specifically in building management. Additionally, during retrofit projects, business operations

could be interrupted wh ile new equipment is being installed and construction takes place. If

current equipment is not broken, customer may be unwilling to take the time to pursue new

, efficient options.



### Technical Assistance

To reduce transaction costs for customers, many progra ms offer technical assistance.

Technical assistance refers to support services that can occur at various stages in the efficiency

planning and implementation process. These services include conducting feasibility studies that

analyze the potential for cost

- effective energy efficiency projects, reviewing existing proposals

and designs, developing equipment performance specifications, and assisting with contractor

and equipment bid selection. Providing these services helps to fill gaps in knowledge customers

20 US Dept. of Energy, Building Technologies Pro gram, “A Guide to Performance Contracting with ESCOs.”

September 27, 2011. http://www.pnnl.gov/main/publications/external/technical_reports/PNNL

- 20939.pdf

. 21 ENERGY STAR, “ENERGY STAR Qualified Products.” Accessed September 13, 2013.9

Optimal Energy, Inc. may have and limit the time and effort they must spend to complete these tasks. For example,

NYSERDA’s FlexTech Program, which is available to C&I customers as well as government and

institutional customers, provides cost

- sharing incentives for consultant support on a range of

services to help customers make informed energy decisions. 22 Expert support and advice

through technical assistance limits the amount of time and effort customers must spend to seek

out information and implement efficiency upgrades, th ereby reducing transaction costs.



### Energy Services Performance Contracting (ESPC)

ESPC, as previously discussed, offers another strategy for reducing transaction costs. Unlike

a traditional energy efficiency contracting process involving several different solicitations and

contract awards, an ESPC typically requires one solicitation and the selection of one ESCO to

provide comprehensive services for the entire duration of the project. Working with one

company reduces transaction costs by minimizing the time and effort required to review

proposals for multiple bids and manage the energy efficiency project.



### Direct Install Programs

Direct install programs are designed to have contractors or other trained professionals

install energy efficiency measures on

- site. This reduces the time and energy customers must

spend figuring out how to install the measure themselves or finding knowledgeable, reliable

professionals to install them. Directly installing the measures also ensures that they are installed

properly and f unction as intended, which helps to improve the performance of efficiency

measures and enables customers to maximize energy savings. Direct install programs typically

serve a high volume of customers and focus on prescriptive measures such as replacement

l ighting, pipe wrap, and low flow showerheads. 23 Some programs, however, may provide more

services. For example, Southern California Edison’s small business direct install program sends

contractors to provide short consultations to identify savings opportuni ties such as lighting,

signage, and refrigeration, and recommend improvements. 24 Additionally more comprehensive

programs might include measures such as air or duct sealing among others. In all cases, direct

install programs provide customers with informati on about the most effective efficiency

measures to implement, preventing customer from having to seek out this information

themselves.



### FINANCIAL CONSTRAINT **S**

Although many energy efficiency measure s can save customers money in the long run,

implementing tho se measures often requires an additional investment. While customers receive

the benefits of efficiency over time, the majority of the costs for these measures are required at

22 NYSERDA, “FlexTech P rogram.” Accessed September 12, 2013.

http://www.nyserda.ny.gov/BusinessAreas/Energy

- Efficiency

- and

- Renewable

- Programs/Commercial

- and

Industrial/CI

- Programs/FlexTech

- Program.aspx

23 Conservation Services Group, “Direct Install Programs for Energy Efficiency .” Accessed September 12, 2013.

http://www.csgrp.com/wp

- content/uploads/2013/05/Direct

- Installations

- for

- Energy

- Efficiency

- Programs

- CSG

Conservation

- Services

- Group.pdf

24 Southern California Edison, “Direct Install Program.” Accessed September 12, 2013.

htt ps://w ww.sce.com/directinstall.10

Optimal Energy, Inc. the start of the project. Many customers weigh investments in terms of short pay back periods

and place greater value on first costs than on the life

- cycle costs of the investment. However,

even customers who recognize the lifetime sa vings potential from efficiency may lack the

capital or borrowing power to make the initia l investment. Traditional sources of capital may

not be available for or properly value energy efficiency improvements. For example, small

businesses or low

- income customers may be unable to borrow money as the result of income

levels or credit

- worthiness. 25 Additionall y, although mortgage qualifications are intended to

ensure that a borrower can repay a loan within its term, operating expenses usually are not

considered when a property is purchased even though improved energy efficiency would

enable a borrow er to make l arger mortgage payments.



### Financial Incentives

One way to limit financial constraints to energy efficiency is to reduce the first

- cost

differential between efficient and conventional products. Rebates, taxes, and grants for

installing efficiency equipment and pro ducts or building efficient structures are examples of

methods for achieving this goal. Although the delivery mechanism for these incentives may

differ between programs, the incentives are often designed to cover some portion of the

incremental cost , or the difference in price, between the efficient product and the conventional

product . MidAmerican Energy’s Custom Systems program, for example, provides rebates to

nonresidential customers to install high

- efficiency buildings systems equipment. Rebates levels

are customized based on the equipment’s incremental cost as well as the level of energy

savings. 26 More commonly, a deemed rebate is offered per unit of prescriptive efficient product

installed. For example, Duke Energy’s SmartSaver program offers c ustomers in Kentucky $50

per setback/programmable thermostat installed. 27 Customers can also receive tax incentives

through the federal government for installing ENERGY STAR qualified products. Customers

can receive federal tax credits, for example, for 10% of the cost up to $500 or a specific amount

from $50

- 300 for installing efficient HVAC systems and other types of equipment. 28



### Access to Financing

Even if financial incentives reduce the cost difference between efficient and conventional

products, customer s may still lack the capital to fund the upfront cost associated with efficiency

upgrades. Various financing mechanisms have been developed to allow customers to pay back

the cost of energy efficiency investments over time. Government loan programs as well as

private unsecured loans are one such mechanism that has provided property owners with

capital for energy improvements. 29 W ith the help of American Recovery and Reinvestment Act

25 Golove and Eto, “Market Barriers to Energy Efficiency: A Critical Reappraisal of the Rationale for Public Policies to

Promote Energy Efficiency. March 1996.

26 MidAmerican Energy, “Custom Systems.” Accessed September 13, 20 13.

h ttp://www.midamericanenergy.com/ee/ia_bus_custom_systems.aspx

27 Duke Energy, “SmartSaver Prescriptive Incentives (Kentucky).” Accessed September 13, 2013. http://www.duke

energy.com/pdfs/SS

- Incentives

- comprehensive

- final

- KY.pdf

28 ENERGY STAR, “Federal Tax Credits for Consumer Energy Efficiency.” Accessed September 12, 2013.

http://www.energystar.gov/index.cfm?c=tax_credits.tx_index

29 Kats, G., Menkin, A. et al

. “Energy Efficiency Financing

- Models and Strategies.” Updated 2011.11

Optimal Energy, Inc. (ARRA) funding, many states and local governments established loan funds to provide short

term loans at below

- market interest rates. Charter One’s Energy Efficiency CRA Loan is an

example of a private loan program that allows homeowners in the Chicago metropolitan area to

finance efficiency improvements. Homeowners can receive an unsecured loan of $1,000 to

$3,000 at 3% AAPR with a 3

- year term, or a loan of up to $10,000 at 5% APR with a 5

- year

term. 30

Some lenders and government agencies have started offering mortgage s to borrowers that

help fund energy efficiency upgrades. An e nergy efficient mortgage (EEM) can be used to buy a

newly constructed energy efficient home or to fund energy improvements in existing homes. 31

An EEM is based on a traditional home mortgage, but factors the cost of energy improvements

and savings into unde rwriting standards. The value of energy savings are factored into th e loan

calculations and provide building owners with a source of capital to fund energy upgrades

when a property is purchased or refinanced. EEMs allow energy upgrade costs to be repaid

ov er the full mortgage term. These programs are funded in several different ways, though they

are largely based on traditional lending products or processes. The Federal Housing Agency,

U.S. Department of Veteran Affairs, and Fannie Mae have all developed so me type of energy

efficient mortgage. 32 Although Freddie Mac does not provide EEM s , it does allow energy

efficient improvements to be considered in underwriting. Additionally, several states such as

New York and Kansas, as well as banks like Citibank and Ba nk of America

, have created their

own EEM products and take cost savings on energy bills into account when determining

qualifying standards

. 33 Allowing customers to borrow additional mortgage funds for energy

efficiency improvements reduces the barrier of u pfront costs and allows for greater investment

in efficiency.

As previously discussed in relation to split

- incentives, on

- bill financing can be an effective a

strategy for reducing the upfront costs associated with energy efficiency improvements. Such

prog rams allow customers to payback their investment over time without providing the initial

capital at the start of the project. Energy Service Performance Contracting, which also helps to

reduce the uncertainty and transaction cost barriers, enables customer s to avoid funding the full

cost of an efficiency project upfront and supports an extended payback period. Both of these

funding options help to reduce the financial constraints associated with energy efficiency

investments.

30 Energy Impact Illinois, “Energy Impact Low Interest Loans.” Accessed September 12, 2013.

http://energyimpactillinois.org/residential/energy_impact_loan/?reload=y

31 Housingpolicy.org, “Goal: Improve Residential Energy Efficiency, Policy: Provide Low

- Cost Financing.” Acce ssed

September 12, 2013. http://www.housingpolicy.org/toolbox/energy_efficiency.html.

32 ENERGY STAR, “Energy Efficient Mortgages.” Accessed September 12, 2013.

http://www.energystar.gov/index.cfm?c=mortgages.energy_efficient_mortgages

33 Stinson, S. “Green Mortgages Save on Energy, Loan Costs,” Bankrate.com.

http://www.bankrate.com/finance/mortgages/green

- mortgages

- save

- on

- energy

- loan

- costs

- 3.aspx. March 30, 2009.12

Optimal Energy, Inc. 

### LACK OF AVAILABILITY

Customer s with adequate resources and knowledge may be unable to improve efficiency if

produc ts or knowledgeable contractors are not available. In some instances, suppliers or buyers

may exhibit market power and dominate supply channels, limiting competitors who p roduce

energy

- efficient products from penetrating the market. 34 Even in a competitive market, w hen

newer, more efficient products are not available from suppliers and distributors, customers may

not have access to the products when they need them. In cases where existing equipment has

failed and a replacement is needed quickly, customers and contractors may not be willing to

wait for a special

- order efficient unit when a standard

- efficiency unit is available “off

- the

- shelf.”

Additionally, the notion of “gold plating” suggests that energy efficiency is often

inseparable from and only available with other costly product features. Therefore, customers

are required to pay for additional features they may not want in order to buy a more efficient

product. For exam ple, as noted in an International Energy Agency report , “ the fuel economy of

automobiles has historically been only one of a large number of features that come in a package

for each make and model. Or in the case of electrical appliances, the standby power use is a part

of the overall appliance package intended to provide a service like watching television or

listening to music. ” 35

Moreover, most customers must rely on the technical expertise of contractors and other

building professionals to carry out upgrade projects. A lack of knowledgeable contractors or

inability to determine which have the proper training and skills to achieve successful outcomes

may inhibit customers from achieving the efficiency of their units. Professionals who

improperly instal l or operate efficiency measures may prevent customers from fully realizing

the potential savings. Without an adequate number of reliable professionals, even the most

motivated customer will have a difficult time improving the efficiency of their propertie s.



### Upstream Programs

Rather than offering customers a direct incentive for buying energy efficient equipment,

upstream and midstream incentive programs offer incentives to manufacturers, distributors,

and retailors to stock and sell energy efficiency produ cts and equipment. For example,

MassSave’s C&I Upstream Lighting Program pays the higher cost of LED lamps and reduced

wattage linear fluorescent lamps to electrical distributors who participate in the program and

agree to stock these products. 36 The distri butors then sell these products at a comparable cost to

conventional products. Partnering with suppliers and providing them with incentives to stock

and sell efficient products helps to ensure that these products are adequately available to

customers. Not only does this type of program reduce the product availability barrier, but it

also addresses the additional upfront cost associated with more efficient products.



### Workforce Training

34 Sullivan, “Behavioral Assumptions Underlying Energy Efficiency Program for Businesses.” Febr uary 2009.

35 International Energy Agency, “Mind the Gap

— Quantifying Principal

- Agent Problems in Energy Efficiency.” 2007.

36 MassSave, “Bright Opportunities: Commercial & Industrial Upstream Lighting Program.” Accessed September 12,

2013. http://www.masssav e.com/professionals/incentives/upstream

- lighting.13

Optimal Energy, Inc. To address a lack of experienced professionals, various energy programs maintain a listing

of contractors who have received some amount of training or who have gone through a

verification process to demonstrate their ability to perform efficiency

- related work. 37 In

addition to ensuring the qualification and adequate supply of c ontractors, maintaining a

network of these professionals helps to reduce the transaction costs landlords face when

attempting to hire someone to work on their property. Program sponsors’ recruiting process

often provides classroom and field

- based training to ensure contractors are properly skilled and

vetted. 38 S ome programs have looked to third party organizations, such as the Building

Performance Institute, to help manage their contractor review, training, and certification

processes. 39

Workforce training p rograms have served a dual purpose in some areas of creating jobs as

well as ensuring that enough knowledgeable professionals are available to carry out energy

eff iciency projects. For example, the New Jersey Department of Labor and Workforce

Development c reated a Weatherization Training Program that is intended to train traditionally

underserved men and women for entry

- level jobs. 40



### ADDITIONAL **B ARRIERS** 

In addition to the frequently discussed barriers mentioned above, a recent paper by Stover,

Sachs, and Lo wenberger (2013) described some of the more “cryptic” (hidden or unrecognized)

barriers that impact investments in energy efficiency. 41 These barriers do not necessarily result

from the same market failures that cause most other barriers, but reflect a rang e of underlying

issues such as “regulatory uncertainty, archaic or legacy regulations, and inaccurate ratings and

standards.” 42 For example, one cryptic barrier the paper identified was unrealistic testing

procedures for electric water heaters. Test procedu res require the water heater to sit on a wood

base during testing, yet most water heaters are installed on concrete. The wood can act as an

extra layer of insulation and cause efficiency ratings to be overstated. Many of the cryptic

barriers discussed rela ted to specific technologies or may only be relevant to some jurisdictions,

which makes it difficult to identify all of them or generalize about them on a broad scale.

Nevertheless, it is important for Program Administrators to recognize these types of cha llenges

when they arise and to consider them in their program planning efforts.



### CONCLUSIONS

The market barriers that impact energy efficiency investments are diverse and often

interrelated. Although there is no single strategy or “ silver bullet ” to overcom ing the se market

37 ENERY STAR. “Financing Guidebook for Energy Efficiency Program Sponsors.” 2007.

38 Fuller, M. “Enabling Investments In Energy Efficiency: A Study of Energy Efficiency Programs that Reduce First

Cost Barrie rs in the Residential Sector.” 2009.

39 Energy Star. “Financing Guidebook for Energy Efficiency Program Sponsors.” 2007.

40 http://lwd.dol.state.nj.us/labor/forms_pdfs/employer/training/Weatherization%20One%20PagerUpdated3

- 25.pdf

41 Stover, Sachs, and Lowenbe rger, ACEEE Report Number A135, “Cryptic Barriers to Energy Efficiency.” August

2013.

42 Ibid.14

Optimal Energy, Inc. barriers

, numerous strategies have been developed to reduce them and allow for increased

investment in energy efficiency

. Successfully addressing efficiency market barriers is likely to

involve a combination of the strategies described abo ve. Beyond direct financial incentives,

p roviding marketing and outreach, financial incentives and technical assistance, motivating

supply chains

, and simplifying the implementation process are approaches that have been used

to minimize the factors that inhibit achievable levels of efficiency. An understanding of the

barriers to energy efficiency and the strategies for overcoming them can help to inform policy

and program design to successfully meet savings targets.Optimal Energy, Inc. 

## APPENDIX B: TASK 3.2 **PROGRAM BEST PRACTICES FINAL**  **MEMO**

## Program Best Practices

**DRAFT Task 3.2 Deliverable** 

**Prepared for**

**by:**

**October 4** , 2013

## Contents

INTRODUCTION

................................ ................................ ................................ ................................ ....... 3

Identifying Best Practices

................................ ................................ ................................ ....................... 3

Identifying Programs Relevant to Delaware

................................ ................................ ........................... 4

SUMMARY OF PROGRAMS

................................ ................................ ................................ .................... 5

Residential & Income

- Eligible Customers

................................ ................................ .............................. 5

Commercial & Industrial Customers

................................ ................................ ................................ .... 11

CONCLUSION

................................ ................................ ................................ ................................ ......... 20Optimal Energy

, Inc

. 3 

### INTRODUCTION

Over the past several decades, energy efficiency programs have grown in prevalence across

the country. Although these programs all seek to help customers reduce their energy

consumption, some have been more successful than others in terms of savings achieved,

customer participation and satisfaction, transferability, cost

- effectiveness, and impact on the

market. Generally speaking, the most effective energy efficiency programs are those that best

overcome the structural, informational, and financial barriers that hinder customers from

investing in efficiency. The ways in which the most successful programs overcome these

bar riers share common characteristics and best practices. The following report discusses the

current state

- of

- the

- art regarding best practices and strategies for achieving measurable cost

effective efficiency savings based on successful programs around North America.



### Identifying Best Practices

Numerous studies and reports over the years have sought to identify the specific best

practices in program design to improve the development and outcomes of such programs in

other jurisdictions. A study published by the American Council for an Energy Efficient

Economy (ACEEE) in 2013 is perhaps the most recent and geographically diverse best practices

review included in the literature. 1 To complete the review, ACEEE and an expert panel solicited

nominations from organiza tions across the country. The panel selected exemplary programs

based on many of the factors described above such as energy savings and cost

- effectiveness.

Additionally, the review identified a set of design features that were consistent among the

programs deemed to be most successful. Based on our own and ACEEE’s observations of

exemplary programs as well as additional consideration of other best practices resources,

Optimal distilled a list of characteristics shared by many of the country’s leading effici ency

programs. These best practices include:



###  Bundles financial incentives with technical and/or informational services



###  Targets market niches and customer sub

- segments



###  Reaches previously underserved customers with new programs and program

approaches; pilot tests new program approaches



###  Simplifies processes to make participation easier for customers



###  Uses “one

- stop

- shopping” and similar approaches



###  Works to build relationships and partnerships



###  Provides financing options, including an increasing variety of approaches

and varying degrees of involvement by program administrators (PAs) in

project financing



###  Works to incorporate the latest energy

- efficient technologies

1 Nowak, et al., ACEEE Report Number U132, “Leaders of the Pack: ACEEE’s Third National Review of Exemplary

Energy Efficiency Programs.” June 2013Optimal Energy

, Inc

. 4 In addition to best practices common to all efficiency programs, there may be additional

best p ractices related to certain program approaches. Both general and relevant program

specific best practices are referenced in the program descriptions provided in this report.



### Identifying Programs Relevant to Delaware

While many of the exemplary programs di scussed in the ACEEE report represent

approaches that Delaware should strive for, they may not be the most relevant programs to look

to for current program design efforts. It is generally advised that PAs should first look to

successful models in other jur isdictions that can easily be transferred to new regions and be

quickly implemented to achieve near term savings. For example, effective initial commercial

programs often to include simpler approaches such as prescriptive incentives for efficiency

measures like lighting, HVAC systems, and motors. 2 Portfolio offerings can later evolve in

complexity as PAs build their infrastructure and capacity for delivering more comprehensive

programs, gain a better understanding of local markets, and build relationships w ith

stakeholders. For example, PAs may begin to provide alternative financing mechanisms or

include custom measures in program design. 3 As ACEEE identified, a trend among successful

programs is the ability to adapt core offerings to maintain and grow savin gs. In addition, many

of the exemplary programs have greatly increased spending in recent years to reach more

customers and achieve higher savings. For a full list and description of the exemplary programs

identify by ACEEE, the report can be accessed for free online. 4

Because they evolve over time and in response to efficiency efforts, market conditions in

nearby states may be more similar to Delaware than those of the best practice programs

described in the ACEEE report and elsewhere. Therefore, this repo rt also describes successful

programs currently implemented in Maryland, Pennsylvania, and New Jersey, and operated by

utilities such as Delmarva Power and other relevant utilities. We compare program designs and

approaches used in these jurisdictions to t he general best practices identified and listed above to

identify those programs that may be of greatest interest to Delaware.

It is also important to keep in mind that a successful efficiency program portfolio is greater

than the sum of its parts. Simply implementing a series of best practice programs may not

necessarily lead to success. Rather, the portfolio should be designed in such a way that the

programs work together, are mutually supportive, achieve efficiencies of administration, and

are simple for customers to understand.

Below, we summarize several programs that we feel provide relevant approaches and

strategies for future programs in Delaware.

2 Environmental Protection Agency, “National Action Plan for Energy Efficiency.” July 2006.

3 Ibid.

4 http://w ww.aceee.org/research

- report/u132Optimal Energy

, Inc

. 5 

### SUMMARY OF **PROGRAMS**

**Residential & Income**

**- Eligible Customers** 

Residential New Construction

**Program:** Residential New Construction

**State:** New Jersey

**Utility:** Statewide

**Program Description:**

The New Jersey Board of Public Utilities, in conjunction with New Jersey utilities, offers the

ENERGY STAR Homes Program (NJESH). The program provides incentives to builders who

construct homes that are more efficient than homes built to the International Energy

Conservation Code (IECC). In order to achieve this classification, a home must score 85 or less

vs. IECC 2006 or 75 or less vs. IECC 2009 on the Home Energy R ating Scale (HERS). New homes

and gut rehabs of existing homes throughout the state can qualify for the ENERGY STAR home

designation and incentives, but new homes must be located in designated New Jersey Smart

Growth areas in order to qualify.

**How the Pr ogram Demonstrates Best Practices:** 

The NJESH program offers customers a bundle of technical support and incentives to

improve new homes to save at least 15% over a code

- compliant new home. The incentive

structure offers the builder varying incentive amoun ts based on the type of residence (single

family, townhouse, and multi

- family). The program is offered uniformly statewide (in

designated smart growth areas) and offers online resources for customers, including

information sheets and a list of eligible, pa rticipating contractors. Tiered incentives are available

for qualified new homes meeting increasing levels of efficiency.

**Relevance to Delaware :** 

A uniform, statewide program with consistent messaging, the New Jersey ESH program is

the best example of a R NC program in a neighboring state. There are other examples of best

practice slightly farther afield: the Connecticut RNC program and the Vermont Energy Star

Homes program. These more mature programs offer additional contractor support, technical

assistanc e, QA, financing options and marketing services. Important factors to consider are:

contractor support in the form of training, loans for test equipment purchasing, and marketing.

Also, consistent funding, consistency of messaging, QA/QC, and some level of program

flexibility and homeowner support. In summary, the New Jersey program model may be a good

place to start as Delaware builds its program infrastructure and capacity, while the more

mature programs provided in Connecticut and Vermont indicate best p ractices to strive for with

residential new construction programs in the medium

- term.Optimal Energy

, Inc

. 6 

### Residential Retrofit

**Program:** Home Performance with Energy Star

**State:** Maryland

**Utility:** Baltimore Gas & Electric

**Program Description:**

Baltimore Gas & Electric Company (BGE) offers a Home Performance with Energy Star

(HPwES) Incentive Program that provides residential incentives, including building envelope

and HVAC systems, under the umbrella of the State’s EMPower Maryland initiative. The

HPwES

- affiliated progr am offers comprehensive audits and home energy retrofit services

through a network of BPI certified contractors. They offer a website and associated marketing

and outreach that delivers a clear message and delivers reasonably good results.

**How the Progra m Demonstrates Best Practices:** 

The combination of contractor support and customer education supported by the utility

website (bgesmartenergy.com) helps to reduce technical and informational barriers facing

residential customers. The menu of tiered measure s and incentive ranges also matches the

needs of most customers, while allowing the utility to operate the program without interruption

due to oversubscription. Utilizing the existing BPI contractor training resources allows the

program administrator to fo cus on other aspects of implementation and Quality Assurance. BPI

training/certification is widely recognized as the industry standard and appropriate level of

rigor. Customers can search a list of contractors based on proximity and area of technical

exper tise on the program website, simplifying the contractor selection process. In addition, the

State supports local adoption of Property

- Assessed Clean Energy (PACE) financing which

effectively allows property owners to borrow money to pay for energy improvem ents. The

amount borrowed is typically repaid via a special assessment on the property over a period of

years. Maryland has authorized local governments to establish such programs.

**Relevance to Delaware:**

All of the program features listed above are good checklist items for Delaware as the State

ramps up a residential retrofit program. However, no PACE

- enabling legislation has been

passed in Delaware to date. Therefore, the State may need to identify another financing

mechanism for residential custom ers for retrofit projects. Another important missing factor is

that programs benefit from the coordination offered by a central program administrator (as

offered in New Jersey) which effectively eliminates utility

- to

- utility variation, even if only in the

way of the address on applications and reporting forms. Most of all, contractors are the

backbone of any HPwES program and support in the form of training, marketing and loans for

test equipment will pay long term dividends in the form of realized savings and happy

customers. Again, as the program in Delaware matures, we suggest looking to Massachusetts’

Mass Save® Home Energy Services as a good example of industry

- leading best practice, well

developed and mature home retrofit program that serves multiple u tilities. In particular,Optimal Energy

, Inc

. 7 financing available through the Mass Save HEAT loan program and on

- bill financing from

utilities have provided important resources to increase program participation. 5



### Multi

- family

**Program:** Residential Multifamily Housing Program

**S tate:**  New Jersey

**Utility:** Public Service Electric and Gas Company (PSE&G)

**Program Description:**

PSE&G’s Residential Multifamily Housing Program provides customers with financial as

well as technical and informational support to make energy efficient capita l improvements to

their buildings. The program is available to all multifamily housing located in the utility’s

service area, though priority is given to affordable housing projects financed through the New

Jersey Housing and Mortgage Finance Agency (NJHMF A). Participating customers receive a

free Investment Grade Audit performed by building professionals employed by PSE&G and

hired through a competitive process. PSE& G also monitors the project implementation process,

confirms equipment ordering and receipt, and checks project cash flows. All recommended

measures with simple payback of fifteen years or less are eligible for program incentives. In

addition to upfront in centives, the program provides “on

- bill financing” which allows

customers to pay back remaining project installation costs interest free on their utility bill over a

period of 10 years.

**How the Program Demonstrates Best Practices:**

The program was designe d to target a specific sub

- segment of the residential market.

Affordable multifamily buildings typically have high energy usage, old equipment, and lack the

funding necessarily to make capital improvements. Moreover, building owners likely lack

knowledge o f how to manage or evaluate contractors to implement efficiency measures.

Offering significant upfront incentives as well as providing low

- cost financing allows the

multifamily sector to invest in efficiency. In addition to financial incentives, PSE&G prog ram

managers oversee the project from start to finish, providing customers with information and

technical support and assuring the quality and cost effectiveness of project implementation. By

maintaining a group of pre

- qualified audit and engineering profe ssionals as well as reviewing

contractor bids, PSE&G simplifies the process of planning for and implementing efficiency

projects for customers. The program also allows for the incorporation of emerging technologies

to the extent that they are cost

- effectiv e. All efficiency measures identified in the audit that have

a payback period of 15 years or less may be implemented.

PSE&G’s partnership with NJHMFA also plays a large role in PSE&G’s multifamily

program. NJHMFA has significantly knowledge of and credibi lity with the multi

- family

customer segment as well as an ability to contact building owners and property managers. The

partnership reduces PSE&G program marketing costs and ensures adequate participation.

5 http://www.masssave.com/residential/offers/heat

- loan

- programOptimal Energy

, Inc

. 8 NJHMFA is also acts as an additional source of cus tomer support and informational services.

The organization is active in providing audit and bid review as well as attending meetings with

building owners and inspections.

**Relevance to Delaware:**

The challenges that multifamily building owners and managers face are similar throughout

the Northeast and Mid

- Atlantic, especially in the affordable housing sector. A similar

comprehensive approach, addressing multiple barriers rather than simply offering incentives,

would likely be a successful strategy to reach this market segment in Delaware. The process of

providing energy audits and upfront incentives to fund cost

- effective efficiency measures is

easily transferable. Offering on

- bill financing requires some additional considerations. Program

Administrators mus t determine how to handle financial risk of holding loans as well as develop

administrative efforts to originate and service loans. 6 Finding a financial partner such as a

private lender or community development corporation can help to reduce these challeng es, and

may provide viable alternatives to on

- bill financing if it is not possible to develop this in

Delaware in the short term. Providing other support services may also require some

relationship building up front to ensure program success. For example, the program would

need to identify vetted building professionals who would be able to perform pre

- bid energy

audits and engineering services prior to moving forward. This would likely be done by

researching potential candidates and issuing an RFQ or RFP.

The State may also wish to explore a partnership with a housing finance organization

similar to the NJHMFA in order to enhance and support the program. In Delaware, the

Delaware State Housing Authority (DSHA) is a similar government agency that acts as an

entrepreneurial developer and lending institution. 7 Although the involvement of NJHMFA has

enhanced PSE&G’s program marketing and support services, program implementation would

still be possible in the absence of such a partnership.



### Residential Efficient Products

**Program:** Mass Save Residential Lighting Program

**State:** Massachusetts

**Utility:** Cape Light Compact, National G rid, NSTAR, Unitil, Western Massachusetts Electric

Company

**Program Description:**

Mass Save is an initiative sponsored by Massachusetts’ electric utilities and energy

efficiency service providers. The Mass Save Residential Lighting Program works to increase

6 Henderson, “On

- Bill Financing Overview and Key Considerations for Program Design.” NRDC Issue Brief. August

2012.

7 U.S. Department of Housing and Urban Deve lopment, “Delaware State Housing Authority.” Accessed October 2,

2013.

http://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/programs/ph/mtw/delawareOptimal Energy

, Inc

. 9 availability of qualified CFLs and LEDs product in store s and online through incentive

programs . It also uses marketing and promotions to target multiple customer segments and

demographics on benefits and reduced cost of efficient lighting technologies. Manufacturers

and retailers earn incentives for running sales promotions that allow customers to purchase

lighting products at reduced co sts. Incentive amounts vary by technology, application, and

functionality and are set at an agree amount per unit of product shipped and/or sold. A “market

lift” program model is also being piloted with Costco where the retailor will only receive an

incent ive if they outperform their baseline sales of efficient lighting products. Program Sponsors

also implement marketing and educational strategies designed to increase knowledge of the

benefits of efficient lighting products and influence customer purchase d ecisions. Improved

awareness ultimately helps to increase sales, excitement, and word of mouth information

sharing. For example, Mass Save’s current campaign, Do You Like to Save?, aims to utilize social

media channels to inform and engage customers.

**How the Program Demonstrates Best Practices:** 

Developing partnerships with and offering incentives to manufacturers and retailers helps

to ensure energy efficient product availability. It also provides an additional marketing channel

for promoting efficiency pr ograms and educating customers. Partnering with manufacturers

and retailers also simplifies the process of participating in the program for residential

customers. Rather than having to submit paperwork to receive rebates after purchasing efficient

products , customers receive financial incentives at the point of sale. Promotional and marketing

campaigns are designed to reach customers through various media channels, preventing

customers from having to seek out the information themselves. Use of multiple medi a channels

allows marketing p romotions to target multiple customer segments and demographics and

encourage program participation. In addition to the financial incentives, promotions run by

Sponsors and partners help to inform customers of both the benefits of purchase efficient

products as well as the specific product they should buy and where they can buy them.

Incorporating incenti ves for LEDs in addition to CLFs helps to drive the adoption of the latest

technologies that offer savings opportunities but are still expensive. Additionally, piloting a

market lift approach may help to improve program results in the future.

**Relevance to Delaware:** 

Although Massachusetts is outside of the mid

- Atlantic region , the lighting market is largely

being driven by national changes in federal lighting standards and the rapid proliferation of

solid

- state (i.e., LED) products

. Therefore, the regional Mass Save residential lighting strategy is

likely to be relevant for program design efforts in Delaware. The overall approach requires

relationship development with manufacturers and retailers. To the extent that distributors are

not already carrying effic ient products, incentive levels would need to be set to adequately

encourage partnership interest. Additionally, retailers should be adequately spread throughout

the service area to ensure all customers have access to a local distributor. Marketing and

pro motional efforts are also a key aspect of the Mass Save Residential Lighting Program and

expertise in these efforts would be important in Delaware. Thought should be given to outreachOptimal Energy

, Inc

. 10 approach for this type of program, as well as others. The specific marke ting strategies and

approaches used in Massachusetts may need to be adjusted to reach to demographics specific to

Delaware customers.



### Income

- Eligible Services

**Program:** Efficiency Vermont Comprehensive Low Income Services

**State:** Vermont

**Utility:** Efficienc y Vermont

**Program Description:**

Efficiency Vermont offers a suite of services to income

- eligible (or “low

- income”)

Vermonters. This approach addresses the reality that almost everyone with limited income can

benefit from assistance to reduce energy costs, but that not everyone has exactly the same

needs. The low income program includes:



###  Weatherization Assistance Program (WAP) partnership that extends the

resources of Vermont’s WAP providers by funding for electric efficiency

measures that historically have been out of scope for WAP. These measures

include efficient lighting, smart power strips, ENERGY STAR qualified

refrigerators and clothes washers, and efficiency ventilation fans. Efficiency

Vermont bears the full cost of the measure installation and contr ibutes to the

audit and management costs for the projects.



###  Vermont Foodbank acts as a “retail” location for providing CFLs at no cost to

Vermont’s most vulnerable population.



###  Major Appliance Rehabilitation Service (MARS) delivers services to

households w ho either earn slightly too much to qualify for WAP, or who

received WAP services prior to the development of the WAP add

- on

program and did not receive the electrical efficiency measures currently

offered.



###  Vermont Fuel Efficiency Partnership (VFEP) is an initiative that pulls various

funding sources together to deliver “deep energy retrofits” to affordable

multi

- family housing that is undergoing major rehabilitation. Measures may

include insulation, air seal ing, efficient windows. Funding sources include

Efficiency Vermont, Regional Greenhouse Gas funds, EECBG Block Grants,

WAP, and housing rehab funds from other sources.



###  Multifamily New Construction and Major Rehabilitation Program provide

technical assista nce and financial assistance to the affordable housing

development community, focusing on providing services to multifamily

projects where the VFEP approach isn’t viable.

**How the Program Demonstrates Best Practices:**

Efficiency Vermont recognizes that low income customers are often underserved because

they do not have the financial resources to participate in sharing the cost of efficiency measures

.Optimal Energy

, Inc

. 11 Therefore, low income program incentives for direct services are typically set at 100% of the

measure cost (M ultifamily may be different).

These initiatives effectively target low income customers through close partnership and

coordination that Efficiency Vermont maintains with the WAP providers, human services and

other agencies and organizations that are intima tely linked to the low income community.

Rather than attempt to layer on stand

- alone low income energy efficiency services, Efficiency

Vermont has adopted an approach that is well

- integrated with those agencies and services that

are already deeply connecte d to the low income communities trusted service. These

partnerships also lower the cost of service delivery to Efficiency Vermont by avoiding

redundant systems. Additionally, the approach simplifies the participation process by engaging

custom ers using ser vice providers who are going to be working at the home already.

**Relevance to Delaware:**

V ermont has successfully developed energy efficiency services that focus on reducing

multiple barriers to participation by low income customers. These customers are historically

harder to reach and harder to provide meaningful services to than other customers. A similar

approach can and should be taken in Delaware in order to achieve significant impacts for the

most vulnerable customers. In Delaware, as in Vermont, lo w income residents receive assistance

through the WAP program as well as other human services organizations such as the Food

Bank of Delaware. Developing efficiency initiatives in coordination and partnership with these

organizations would leverage existin g resources to better reach low income customers as well

as reduce the administrative costs of multiple interactions with individual customers. Because

the low income population is difficult to reach, Delaware may wish to engage a low income

advisory board , with representatives who are familiar with the needs of the low income

community. For example, in Massachusetts, the Low Income Energy Affordability Network

(LEAN) coordinates with utility providers and other stakeholders in a statewide best practices

wo rking group. Setting incentive at 100% of the measure cost for single family participants is

another aspect of Efficiency Vermont’s initiatives can be included in Delaware’s program

model.



### Commercial & Industrial Customers

There are a number of common pr ogram approaches used to address the Commercial and

Industrial (C&I) sector that may be applied to one or more markets. These approaches include:

market segmentation, prescriptive incentives, customized/negotiated incentives, upstream

incentives, technical assistance, new construction, and direct install. For example, while direct

install programs are most relevant to small business retrofit markets, customized incentives

may be successful components of large business retrofit, and in some cases, market opp ortunity

projects. Therefore, the C&I program section is organized by program approach, with relevant

markets identified.Optimal Energy

, Inc

. 12 

### Market Segmentation

**Market(s):** Large Business Retrofit, Market Opportunity

**Program:** Existing Buildings

**State:** Vermont

**Utility:** Effici ency Vermont

**Program Description:**

Efficiency Vermont’s (EVT) commercial and industrial buildings program tailors its

marketing, outreach, and incentive approach to the needs of specific market sectors. C&I

customers can receive standard rebates for a wide range of new, energy

- efficient equipment relevant

to their particularly industry

. For example, for commercial offices, customers can receive

incentives for measures such as lighting and HVAC equipment and controls and data center

and IT equipment . Grocery stores, on the other hand, can also receive incentives for

refrigeration and related controls and commercial kitchen equipment

.

**How the Program Demonstrates Best Practices:**

The needs, timing, and specific barriers preventing efficiency investment vary si gnificantly

within different segments of the commercial and industrial sectors. These customers include a

diverse range of building types including office space leased by small businesses, large

industrial facilities, hospitals, and chain grocery stores an d restaurants. It is clear that each of

these business types have vastly different business needs, investment timing needs and

resources, decision making processes, and applicable measures. Therefore, one single approach

to marketing and incentives may not efficiently reach all segments. As a result, established

efficiency program administrators have begun to market approaches tailored towards customer

sub

- segments under the C&I umbrella. The EVT website, for example, has separate portals for

each sector, i ncluding agriculture, colleges, commercial offices, hospitals, grocery stores,

lodging, retail, and wastewater facilities. For each sector, there is a list of resources related to

efficiency in that sector, case studies, and a list of incentives available. Furthermore, outreach

staff are familiar with the decision makers and barriers specific to each sector and tailor their

approach accordingly. The targeted marketing approach allows EVT to reach C&I customer

segments that may have been previously underserv ed.

**Relevance to Delaware:**

A high degree of market segmentation as described above is not typical in early year

efficiency programs, but rather used by established administrators with aggressive efficiency

goals. Nevertheless, it provides a roadmap for future efforts and a reason to begin tracking

relevant customer data from early program participation. As the results of the initial programs

come in, Delaware can keep an eye on different market segments are responding, which

segments are not under

- or ov er

- represented, and begin to develop initiatives specifically aimed

at increasing participation where necessary. Delaware may also wish to develop a small number

of targeted initiatives for customer niches that represent particularly large opportunities in the

State.Optimal Energy

, Inc

. 13 

### Custom/Negotiated Incentives

**Market(s):** Market Opportunity, Large Business Retrofit, some Small Business Retrofit

**Program:** Negotiated Incentives and Account Management

**State:** Massachusetts

**Utility:** Cape Light Compact, National G rid, NSTAR, Unitil, Western Massachusetts Electric

Company

**Program Description:**

Massachusetts’ C&I program has achieved significant savings at very reasonable costs,

aided largely by the use of close account management and negotiated incentives for its largest

custom ers. First, each large customer in Massachusetts is assigned an account manager from the

relevant program administrator. This account manager will work closely with the customer and

help develop efficiency plans, navigate the incentive process, receive tec hnical assistance, and

eventually close the deal. This account manager establishes an ongoing relationship with the

customer in order to familiarize himself with their specific barriers to investment, where in the

business cycle the customer is most likely to be able to make efficiency projects, decision

making processes for the customer, etc. This familiarity also allows the account manager to get a

sense of each customer’s financial needs for efficiency projects. This allows some negotiation of

the incent ive size, typically up to some maximum amount. This flexibility may allow the

account manager to close some projects that would not proceed with standard incentive

amounts while completing others at lower incentive costs than would be achieved under

standa rd incentive rates.

**How the Program Demonstrates Best Practices:**

It is typical that a majority of a utility’s electric sales will consist of a small number of very

large customers. These large customers typically provide more savings at lower cost than small

to medium customers. Further, it is very hard for a utility to achieve significant savings in

proportion to its total load without effectively addressing these customers. Account managers

will provide specialized outreach to the largest customers, providing a single point of contact in

order to streamline the process of applying for technical assistance, incentive offers, financing,

or other program offerings. The account managers’ one

- on

- one relationships with their large

customers will also enable them to provide specialized marketing and sales pitches for

efficienc y and help design incentive offers that integrate with the customers’ business plans.

Further, this familiarity allows the account manager to offer personalized incentives, designed

to be generous enough to spur the project into completion without overpayi ng for the savings.

Informational and technical services in addition to financial incentives also help to reduce

additional barriers C&I customers face.

**Relevance to Delaware:**

Like most other jurisdiction, a large portion of Delaware’s electric load con sists of large

industrial and commercial customers. In order to appreciably reduce the state’s electricityOptimal Energy

, Inc

. 14 consumption, Delaware will need to come up with an effective strategy to engage these

customers with its efficiency programs. Account management has been shown in Massachusetts

and other jurisdictions across the country to be successful at spurring efficiency investments

among this customer class.



### Upstream Incentives

**Market(s):** Market Opportunity

**Program:** Bright Ideas Commercial Lighting

**State:** New Br unswick, Canada

**Utility:** Efficiency New Brunswick

**Program Description:**

New Brunswick’s Bright Ideas commercial lighting program used upstream incentives to

lighting distributors in order to enlist the efforts of the regional lighting supply community to

q uickly bring High

- Performance T8 lighting products to the market. Before the program

launched in 2007, HPT8 products were unavailable in New Brunswick. The program provided

incentives to lighting distributors for every high performance ballast and high

- per formance or

reduced wattage lamp sold. These incentive levels were less than typical retail

- level incentives

for the same products in other jurisdictions. As a condition for participation, lighting

distributors had to provide monthly reports specifying the type and number of qualifying units

sold, the invoice number, the ship

- to address, and the purchaser’s billing address. This helped

program administrators track program progress. By the fifth year of the program, HPT8 sales

had increased from zero to appr oximately two

- thirds of the replacement market.

**How the Program Demonstrates Best Practices:**

Upstream incentive programs effectively address many of the common market barriers

associated with efficiency. Typically, the incentive will reduce the first cos t of the product more

than the same amount of incentive money on a downstream rebate, since retail mark

- ups are

now being made on a lower base cost. Further, upstream incentives tend to encourage lighting

distributors to leverage their marketing resources in order to sell more of the efficient

technology. Finally, upstream incentives quickly change the stocking practices of distributors by

reducing the risk that inventory of efficient products will not sell. As an added benefit,

administrative time and cost from the PA are significantly reduced. In a downstream approach,

the PA will need to process applications from individual end

- users or contractors/installers who

may be unfamiliar with program requirements and thus need additional contact to collect

missi ng pieces. In contrast, an upstream program collects only monthly forms from a few large

lighting distributors who are used to dealing with the program requirements. The New

Brunswick program needed only one

- half of a full

- time employee in its first five y ears of

operation. An upstream program delivery model also simplifies participation for customers.

They immediately receive incentives for purchasing efficient products through typical retailers.Optimal Energy

, Inc

. 15 **Relevance to Delaware:**

The New Brunswick program is relevan t to Delaware in many ways. Although located in

Canada, New Brunswick and Delaware are similar in size, with populations of approximately

750,000 and 920,000 people respectively. Second, when New Brunswick first launched its

upstream program, there had bee n no previous efficiency infrastructure in the area, and they

were looking for a program that could scale to significant savings quickly, using limited staff

resources. Because Delaware is also in the early stages of developing and energy efficiency

progra m infrastructure, the New Brunswick model could be very instructive for the State as it

seeks to ramp up energy savings.



### Small Business Retrofit

**Program:** C&I Small Business Program

**State:** Maryland

**Utility:** Pepco

**Program Description:**

Pepco’s Small Business program targets businesses, non

- profits, religious institutions , and

government customers with a monthly demand of 100 kW or less over a twelve month period.

Customers receive financial incentives for a broad range of eligible measures. Customers can

also receive free Walk

- Through Energy Assessment to help identify energy savings

opportunities. The p rogram will pay a Small Business Program t rade a lly to install low cost

measures up to $250 that have been identified during the Energy Assessment Repo rt. Incentives

offered through this program a re much greater than those available to larger customers through

the Existing Buildings Program. Inc entives are defined on a dollar

- per

- unit basis and range

from 40 to 90 percent of the installed cost depending on the measure. Custom incentives are also

available for measures not eligible as a standard measure.

**How the Program Demonstrates Best Practices:**

Due to limited financial, time, and knowledge resources, small businesses h ave historically

been difficult customers to serve with traditional rebate programs. Pepco’s S mall B usiness

p rogram targets barriers specific to this sub

- segment by providing incentive levels greater than

those available to larger business customers. In ad dition to providing financial support , the

program provides technical and informational support in the form of Walk

- Through

Assessments and recommended opportunities for savings. Maintaining a list of pre

- qualified

trade allies simplifies participation for customers because they do not need to evaluat e

contractors and building professionals independently. It also builds relationships with trade

allies to ensure that qualified professionals are available to work with small businesses to

achieve savings. Offe ring rebates for a range of measures allows small business customers to

make many upgrades through one program. Moreover, providing incentives for customer

measures would allow customers to implement emerging technologies to the extent that they

are cost e ffective.Optimal Energy

, Inc

. 16 **Relevance to Delaware:**

Pepco’s Small Business Program is one that would be relevant f or Delaware’s program

offerings, as the barriers facing small businesses are common across jurisdictions. Delaware

could also target small businesses by offeri ng higher levels of incentives that those required for

larger C&I customers if budget constraints allow. However, prior to implementation, Delaware

may need to build a group of trade ally partners who are able to provide the informational and

technical sup port that reduce s barriers faced by small business customers.



### Direct Install

**Market(s):** Small Business Retrofit

**Program:** Small Business Direct Install

**State:** Pennsylvania

**Utility:** PECO

**Program Description:**

PECO’s small business direct install program pr ovides the direct installation of easy to

install lighting, refrigeration, and electric hot water efficiency measures. Incentives typically

cover around 50

- 60% of the measure, and businesses are eligible for interest

- free, on

- bill

financing for the remaind er portion of the cost. To participate in the program, the business

receives a free, comprehensive on

- site analysis, resulting in a list of equipment installation

recommendations, costs, and available incentives. A contractor will proceed to directly insta ll

any measure desired by the participant.

**How the Program Demonstrates Best Practices:**

Small businesses typically do not have the staff resources that enable them to focus on non

core issues, such as energy use. Further, they often do not have the finan cial resources enabling

them to make large upfront investments, even on energy projects with short payback time.

Small business direct install programs mitigate these two barriers by 1) identifying, through a

free on

- site audit, appropriate efficiency meas ures; 2) directly installing the measures in the

business, with little to no action required of the business owners; 3) providing high incentives to

offset the first cost of the product; and, 4) Offering zero interest on

- bill financing so that the

measures can be installed without an initial capital outlay, and so that ongoing energy savings

can pay for the measures. Typically, direct install programs are run with a single contractor,

with costs for each measure determined by the contract with the utility. Under this setup, high

installation volumes for the contractor will typically allow it to offer measures for less than

what a small business would typically pay outside of the program. Direct Installation programs

are typically largely lighting, but best p ractices programs (such as PEPCO’s) also offer easy to

install refrigeration and hot water measures. The most successful measures will also note any

needed upgrades in other major building systems, and refer them to another program for

custom or prescripti ve rebates.Optimal Energy

, Inc

. 17 **Relevance to Delaware:** Direct Install programs are common in jurisdictions throughout the US,

and have had high levels of success of achieving much higher penetration rates in small

business than would be achieved under traditional prescriptive or custom rebate programs.

Furthe r, direct install programs are easy to roll out, since it is a discreet piece of work than can

be bid out to a firm that will likely have experience with similar programs in other states. As a

result, a direct installation program could get up and running quickly in Delaware, and achieve

significant results in early program years while some of the other more complex programs are

still setting up the groundwork.



### Prescriptive Incentives

**Market(s):** Market Opp ortunity, some Small and Large Business Retrofit

**Program:** Business Energy Services

**State:** Vermont

**Utility:** Efficiency Vermont

**Program Desc ription:** 

Efficiency Vermont’s Business Energy Services program offers prescriptive incentives for a

broad range of efficiency technologies. Through completion of simp le forms, eligible applicants

are paid standardized financial incentives for purchasing and installing qualifying energy

efficiency equipment. Incentives are provided for agricultural, commercial, and industrial

lighting; commercial kitchen equipment; comp ressed air systems; heating, ventilating, and air

conditioning (HVAC) equipment; refrigeration equipment; residential rental property systems;

and pool pumps

. A user

- friendly website is available to guide customers to the appropriate

opportunities and appl ications.

**How the Program Demonstrates Best Practices:**

While the majority of energy efficiency programs include some prescriptive component,

those that excel cover a broad range of equipment, offer significant financial incentives, facilitate

the particip ation process through the use of well

- designed applications, and are periodically

updated to represent the latest energy

- efficient technologies and market changes. Efficiency

Vermont has made significant strides on all fronts. The rebate portfolio is perio dically reviewed

to ensure that incentive levels are appropriate and the latest energy

- efficient equipment is

represented. Perhaps most importantly, the program has developed clear, consistent

prescriptive rebate forms that reduce customer confusion and si mplify the application process.

**Relevance to Dela ware:** 

Commercial energy efficiency portfolios routinely achieve the majority of savings from

prescriptive measures making them a critical component of comprehensive C&I program

design. For example, in neigh boring Maryland, prescriptive measures achieved more than halfOptimal Energy

, Inc

. 18 of total C&I sector savings in 2012 for several utilities. 8 For new initiatives, prescriptive

incentives are especially important as they are easy to establish, are key to capturing the lost

op portunity market, and serve customers who don’t have the resources to pursue more

involved program offerings. They offer a simple, streamlined application process where

program requirements and estimated rebates are clear from the outset. Finally, prescrip tive

incentive portfolios can be easily augmented

— even mid

- year

— with the latest efficiency

technologies or otherwise expanded to address new end

- uses and opportunities. This will be an

important consideration as Delaware programs grow over time.



### Technical Assistance

**Market(s):** Market Opp ortunity, Large Business Retrofit, possibly Small Business Retrofit

**Program:** FlexTech

**State:** New York

**Utility:** NYSERDA

**Progra m Description:** 

NYSERDA's FlexTech Program provides commercial and industrial customers in New York

State with customized technical assistance to enable informed energy decisions. Services are

provided by consultants under contract with NYSERDA. These consultants are competitively

selected and provide statewide geographic distribution of services. These services include, but

are not limited to, feasibility studies, load management, process efficiency analysis, data center

efficiency analysis, retrocommissioning, and CHP studies. In many cas es, cost

- sharing

incentives are available to help defray costs of the studies. Through the FlexTech Program,

customers may also work with an independent service provider of their choice.

**How the Program Demonstrates Best Practices:**

Because contracts are already in place between consultants and NYSERDA, there is very

little delay between a customer’s request for assistance and project initiation. Additionally,

there are no required forms or paperwork for the customer to complete greatly simplifying the

par ticipation process. As FlexTech contractors are selected to cover a broad range of areas of

expertise, market niches and customer sub

- segments that may not be adequately served by

other energy efficiency programs are able to obtain customized, expert assis tance. The range of

technical expertise available also prevents customers from having to seek support from multiple

sources. Finally, the available cost

- sharing incentives reduce financial barriers and promote the

development of useful studies that can hel p achieve long

- term energy efficiency improvements

in customer facilities.

8 The EmPOWER Maryland Energy Efficiency Act Standard Report of 2013, Maryland Pu blic Service Commission,

April 2013Optimal Energy

, Inc

. 19 **Relevance to Dela ware:** 

Large C& I facilities represent a significant portion of total building energy consumption in

Delaware. Because of the complexity and variability of these facilities

— particularly the

industrial sector

— a successful C&I program needs to be able to offer flexible, cus tomized

support. The FlexTech model allows a broad range of services to be offered while maintaining a

streamlined participation process, an important consideration for new programs. In addition,

using such a contractor driven approach limits program admin istration requirements while at

the same time allowing consistency and continuity through the contractor pre

- qualification

process. Successful employment of this approach will be dependent on the availability of well

qualified contractors in Delaware or th e surrounding region.



### New Construction

**Market(s):** Market Opp ortunity

**Program:** New Construction Program

**State:** New York

**Utility:** NYSERDA

**Progra m Description:** 

The New Construction Program provides technical assistance and incentives to promote

energy effi ciency in new construction and major renovations. Technical assistance is cost

- shared

and incentives are paid to offset a portion of the incremental cost bet ween proposed equipment

and energy code requirements. Additional incentives are available for commi ssioning services.

The program team includes in

- house project managers, external contractors or Outreach Project

Consultants (OPCs), and technical assistant s (TAs). OPCs handle outreach, customer support,

and act as field liaisons. TAs work with customers and design team to identify and analyze

efficiency measures.

To address the different needs of large and small customers, the program provides multiple

participation paths including pre

- qualified equipment, custom measure analysis, and whole

building desi gn. The program offers a tiered incentive structure to encourage larger customers

with more complex projects to pursue deeper savings opportunities

.

**How the Program Demonstrates Best Practices:**

NYSERDA’s New Construction Program simplifies the participation process by providing a

single “one

- stop

- shop” regardless of whether simple prescriptive incentives, custom analysis, or

whole building design is ultimately the most suitable approach for a giv en project. In addition,

the program uses a novel tiered incentive structure to promote not only deep energy savings

but also design team engagement. Aggressive program promotion through the use of outreach

consultants leads to program involvement at the e arly stages of many construction projects.

While this has the unintended effect of increasing program dropout rates as some construction

projects are ultimately unrealized, it increases the likelihood that successful projects include

comprehensive energy

- e fficiency design.Optimal Energy

, Inc

. 20 **Relevance to Dela ware:** 

While commercial and industrial new construction rates are still depressed as a result of the

recent economic downturn, addressing the new construction market is still a critical component

of successful C&I program design. Buildings constructed to satisfy the bare minimum energy

code requirements represent a significant missed opportunity where energy efficiency

improvements are unlikely to be realized for many years. Aggressive outreach will be critical to

gain sig nificant participation in this market as efficient programs are initiated. Employing

outreach consultants could assist the state in reaching this objective. Finally, anticipating the

varied needs of new construction projects through multiple participation paths will also likely

bolster participation.



### CONCLUSION

The programs described above represent design and delivery best practices that help to

ensure program participation and savings goal achievement. Often, the most successful

programs address multiple barriers facing customers by offering financing incentives as well as

technical and/or informational services. Additional financing options further eliminate financial

barriers and allow for greater program participation. Successful programs also target m arket

niches and customer sub

- segments, often striving to reach previously underserved groups.

Programs that provide “one

- stop

- shopping” approaches and simplify participation processes

are able to more effectively engage customers. Building partnerships an d relationships with

trade allies and other organizations can ensure quality project implementation as well as

leverage existing resources to reach customers and minimize administrative resource needs. As

Delaware begins to lay the groundwork for energy ef ficiency programs, it should incorporate

these and other best practices into program planning and design to the extent possible.

Although successful program design and implementation often requires a ramp

- up period,

looking to effective programs that have been implemented in other jurisdictions provides

examples of both good models to start with as well as strive for.Optimal Energy, Inc. 

## APPENDIX C: TASK 3.3 **INTERVIEW QUESTIONNA IRE** 

# Delaware Potential Study Market Research

Interview Script

Version 4 Oct 2013



# Section A: Background Questions

The purpose of this section is to gather background information on the person being

interviewed to see if there are pattern s in the responses based on who is answering the

questions

.

1. Who is being interviewed?

a. Vendor /Retailer

b. Distributor /Supplier

c. Contractor/Architect/Engineer

d. Consultant /Industry Expert

e. Auditor /Rater

f. Weatherization /Home performance contractor

g. Trade association

h. C ustomer

i. Manufacturer representative

j. Property manager

k. Other _________________________

2. If not a customer, w hat type (s) of customer s are they associated with? If more

than one, then estimate the percentage of work in each area

.

a. Residential (and whether low income)

b. Commercial

c. Industrial

d. State/local gov’t/m uni

e. Multifamily

f. Institutional

g. No specific customer type

3. What kinds of equipment do they work with

, and/or what kind of services

offered ? Write down all services and equipment mentioned , estimate sales volume

by percentage.

4. What is your specific or most common/mos t important role related to your

customers in these interactions?



# Section B **: Market**  **Barrier Questions**

Usually there are circumstances that are obstacles for people in do ing an energy efficiency project or in purchasing efficient equipment. The purpose of this sec tion is to

find out what are real and perceived barriers to efficiency

, and what could be solutions

for overcoming or removing them.

### 1. What factors do you see that make it difficult for people to take action on efficiency projects ? (Possible prompts: reliability or performance concerns, higher

cost of equipment, lack of capital, lack of knowledge /information , lack of choice

or availability, no new construction projects, others?)

2. Which of these factors are the most important?

3. How muc h impact does the current low cost of natural gas have in preventing

people from doing efficiency projects for gas equipment ?

a. If a large impact, at what price do you think efficiency will start to look

attractive again? ( or percent increase in gas price )

4. What could be done to help in overcoming barriers ? (Possible prompts: financing,

information, training, technical assistance, sales assistance in persuading decision

makers to act, incentives, other)

5. What could or should be done to make it easier for cust omers to implement

efficiency projects ?

6. What could or should be done to make it easier for customer to participate in

efficiency programs?



# Section C **: Equipment Availability**

The purpose of this section is to determine if efficient options are available and being

promoted in the marketplace. Sometimes efficien t equipment is not promoted because it

is more expensive, is perceived negatively for some reason, or is simply not available

locally. Questions will be based on one category of equipment (e.g., lightin g, HVAC,

construction materials/methods) appropriate to the person being interviewed.

1. Where are distributors of equipment (both regular and efficient) typically located:

Delaware, neighboring states (MD, PA, NJ), or both? [If a customer interview,

where do you purchase equipment? Where is equipment least expensive?]

a. If multiple states, can you esti mate market percentage by state, or where

you think MOST people get their equipment?

2. Are efficient _______ (lighting, HVAC, etc.) options available from distributors

in the region?

a. Are Delaware distributors more or less likely to have and promote

efficient equipment than competing vendors from neighboring states ? If

so, to what extent?

b. To what extent are distributors promoting efficient equipment to

custom ers/installers?

c. How frequently are customers asking for efficient equipment? Are there

specific customer sectors that tend to specify efficient equipment more

than others?

3. Where are retail vendors of equipment (both regular and efficient) typically

located : Delaware, neighboring states (MD, PA, NJ), or both?

a. If multiple states, can you estimate market percentage by state?

4. To what extent are efficient _______ (lighting, HVAC, etc.) options available

from retail vendors in the region?

### a. Are Delaware vendors mor e or less likely to have and promote efficient

equipment than competing vendors from neighboring states? If so, to what

extent?

b. (to Vendors:) Would you be willing to expand your selection of EE

equipment options if there were program support for your staff and

customers?

c. (to Vendors and Contractors) H ow quickly would you add EE options to

your line if program support (training, market ing , incentives) were

provided? [ Immediately? A few months? W ait to see what others do ? ]

5. Are engineers/architects specifying efficient equipment? If so, what?

6. What technologies or energy saving opportunities (i.e., controls, equipment

upgrades, maintenanc e, etc.) do your customer s most often ask about ? Are you

able to help them?



# Section D: Specific Market Channel Questions

The purpose of this section is to get specific information on how efficient products move

through the marketplace.

1. What are the typic al retail outlets for res idential lighting (lamps, or ‘ light bulbs ’) ?

a. Mass merchandiser, home improvement stores , supermarkets, discount

clubs, small retail (e.g., hardware stores)?

b. If you know, what explains this distribution of the market?

2. Which of thes e outlets offer efficient as well as standard options, and to what

extent ?

3. What are the typical market channels for commercial lighting?

a. To what extent do manufacturers’ representatives have a presence in

Delaware?

b. Is the supply chain dominated by a few la rge distributors or spread across

many small ones?

c. Who specifies lighting equipment? Architects, electrical contractors,

lighting designers?

4. What are the typical market channels for residential HVAC?

a. What fraction of product comes from out

- of

- state distri butors or retailers?

b. Is the contractor/installer market dominated by a few large ones or

distributed across many small ones ?

5. What are the typical market channels for residential DHW?

a. What fraction of product comes from out

- of

- state distributors or retailers?

b. Is the contractor/installer market dominated by a few large ones or

distributed across many small ones?

c. Can you provide any information about heat pump water heaters, and

wheth er these are typically purchased at retail vs. through

distributors/supply houses?

# Section E: Training and Labor Questions

The purpose of this section is to see if a lack of awareness or information is a barrier to

more efficiency projects.

1. Training and education has been effective in other regions as a way to proliferate

efficient products, technology and practice. Is this needed in Delaware, and if so,

to what extent ?

a. If so, who should the training or education effort target? (possible prompt:

vendors, installe rs, architects/engineers , or end use customers)

b. If end use customers

, any particular market segments? (prompts:

commercial customers

, residential customers, manufacturers, etc)

2. Are there specific training organizations that people look to in your (either

g eographic or topical) area?

3. What is the status of certifications and licensing with respect to efficient

residential building practices? To what extent do local providers carry BPI,

HERS, or other relevant certifications?

4. With respect to energy codes, is there a qualified labor force of code officials?

5. What subjects should be emphasized?

a. Cooling

b. Heating

c. Ventilation

d. Lighting

e. Industrial process equipment

f. Water heating (inc. pool and spa heaters and solar hot water)

g. Other

6. Are there any other obstacles preventing an educated workforce that would

identify and install efficiency measures?Optimal Energy, Inc. 

## APPENDIX D **: TASK 3.3 COMPLETED QUESTIONNA**  **IRES**

To maintain confidentiality of interviewees, completed questionnaires are not included

in the public version of this document. For more information, contact Optimal Energy.Optimal Energy, Inc. 

## APPENDIX E **: TASK 3.3 MARKET RESEARCH FINA**  **L MEMO**

## Delaware

**- Specific Market Research** 

**DRAFT Task 3.3 Deliverable**

**Prepared for**

**by:**

**15 November 2013**

## Contents

INTRODUCTION

................................ ................................ ................................ ................................ ....... 3

MARKET BARRIER FINDI NGS

................................ ................................ ................................ .............. 3

Upfron t Costs

................................ ................................ ................................ ................................ .......... 4

Awareness and Attitudes

................................ ................................ ................................ ......................... 4

PRODUCT/SERVICE AVAI LABILITY AND MARKET CHANNEL FINDINGS

................................ . 6

TRAINING AND LABOR F INDINGS

................................ ................................ ................................ ...... 7

AD DITIONAL THOUGHTS

................................ ................................ ................................ ...................... 8

CONCLUSION

................................ ................................ ................................ ................................ ........... 83



### INTRODUCTION

Building on the research and findings of our market barriers and program best practice

research, Optimal conducted market research in Delaware to investigate specific conditions

related to market conditions and attitudes Delaware energy efficiency program potential

consumers. The research findings will help to identify and fine-tune those program strategies

most likely to overcome efficiency market barriers specific to Delaware energy consumers. The

findings may also help to identify areas worthy of further research that would help to optimize

the operations of future efficiency programs. Some of our primary findings include:



###  Upfront Cost is the primary barrier among all sectors



###  Specific sectors/industries have different needs/levels of awareness



###  Customers purchase equipment/products both in DE and draw from

neighboring states



###  Availability does not seem to be a limiting factor, but efficient technology is

not necessarily being promoted



###  Seems to be an attitude of indifference and resistance to change among some

Delawareans



###  Training opportunities needed and welcomed across the board



### Methodology

The market research was carried out through phone interview. Optimal developed a

questionnaire broken into four primary content sections: Market Barrier Questions, Equipment

Availability Questions, Specific Market Channel Questions, and Training and Labor Questions.

DNREC then provided Optimal with a list of recommended organizations to contact. Optimal

received additional contacts through its conversations with respondents. We reached out to a

total of 30 organizations through a combination of phone calls and emails and spoke with 13 of

those organizations. The range of organizations interviewed included large customers, industry

groups, housing agencies, electrical and HVAC companies, implementation contractors,

and engineering design firms. A complete discussion of conclusions drawn from our

discussions, organized by questionnaire section, is summarized in the sections below.



### MARKET BARRIER **FINDINGS**

As previously described in our market barriers research findings, there are a number of

obstacles that prevent people from undertaking an energy efficiency project or purchasing

efficient equipment. Optimal’s market research effort included questions to better understand

the real and perceived barriers to efficiency in Delaware, and what could be solutions for

overcoming or removing them. Many of the responses received verified findings from our

previous market research, while some responses revealed information specific to conditions and

attitudes in Delaware.Optimal Energy

, Inc

. 4 

### Upfront **Cost s** 

Upfront cost costs for efficient technology an d equipment are a significant barrier to energy

efficiency in Delaware as well as many other jurisdictions

. When asked why people do not

implement efficiency projects , almost every r espondent first mentioned cost. For example, large

commercial custo mer s ’ c apital budgets may not a llow for long payback periods. As a large

business representative indicated, the company mak es investments with a 3 year return on

investment

. Other respondents echoed the cost barriers as a particular challenge for large

organizati ons

. They suggested that building operations are not treated as a priority and most

companies do no t devote money in their budgets specifically for sustainability purposes. T here

is also a challenge when huge building owners lease property and pass on util ity costs. B uilding

operators

, who own a building and rent it out

, are not necessarily sure there is going to be

demand for efficiency to make it worth the investment. On the residential side

, an HVAC

company representative suggested that the cu stomers who are price shopping do not follow up

about the company’s geothermal systems because of the added price.

To address barriers to energy efficiency, many respondents agreed that funding

opportunities would be most effective. A representative from an electrical supplier , for

example, believes rebates would help to get many people to choose efficient lighting options the

company quote s

. A respondent from the Energy and Sustainability Roundtable suggested that

in addition to rebates and grants, low in terest loans might be an effective way to reduce the cost

barrier for businesses. On the residential side, an interviewee from the Delaware State Housing

Authority thought opportunities that require customers to payback loan s would be less

effective than g rant s . He indicated that an important consideration would be figuring out which

customers to target for grants vs. loans and how to structure a low interest loan.

For b oth commercial and residential customers , respondents suggested that providing

funding for energy auditing would be a helpful first step. Even if additional funding for

upgrades is not available, customers would have the information about what measures they

could implement should funding become available. A representative from a manufacturin g

industry group suggested that the Mid

- Atlantic Industrial Assessment Center at the University

of Delaware may be a good partner for conducting audits in the industrial sector.



### Awareness **and Attitudes**

Lack of awareness of energy efficiency opportunities , technologies, and benefits, is another

barrier that is prevalent in many jurisdictions

. In Delaware, awareness presents a barrier to

energy efficiency in some customers and service providers more so than others. Many

respondents thought that architects a nd engineers were largely up to speed with efficient

technologies and practices, since they are required to complete ongoing professional

development. Additional ly, many of the large customers with significant costs were aware or

took steps to become aware of cost

- effective energy saving opportunities. However,

respondents seemed to think there was less awareness among residential and smaller business

customers as well as building and facility managers

.Optimal Energy

, Inc

. 5 The difference in levels of awareness illustrates an important take away from this market

research: different customers face different challenges to implementing efficiency programs.

Developing a range of programs that targets specific markets can help to overcome these

specific barriers. For example, t echni cal assistance may also be effective for residential and

small business customers , but may not be necessary for large business customers

. As on

respondent indicated, the complexity of implementing efficiency projects is a major barrier to

the average busin ess owner, unless they’re working with an ESCO that they handles it all.

However , a large business representative pointed out that they have engineers on staff and

people th ey can hire to provide guidance

. For ShopRite , the most important program offering

would be one that helps the company get a quicker return on invest ment from efficiency

upgrades. In the respondent’s experience with the state’s fund matching program, funding caps

were still too low to make the investment cost

- effective to the company.

Aw areness of energy efficiency cost savings and benefits may also be a barrier is some

instances. Customers m ight be aware of the technology, but do not understand how they will

benefit from efficiency giv en the additional upfront cost. As a representative f rom Rumsey

Electric suggested, only about 10% of people purchase efficient equipment, though customers

are aware of the technolog y and frequently ask about it. Additionally, some respondents

indicated that they thought there was an attitude of indifference and resistant to change among

Delawareans and thought people may not understand the purpose of saving energy. A

representative form a manufacturing industry group suggested that a 

### w a y to increase

participation would be to help customer better understand “ what’s in it for them. ”

There has also been a lack of awareness of the energy programs offered in the state . Some

respondents suggested that the SEU programs were a bit of a moving target and always seemed

to be evolving, which was challenging. While the interviewees who had been involvement with

programs run through the state or SEU were satisfied with them, most were informed about the

program through some type of “word of mouth” rather than a concerted marketing effort by the

SEU.

Many interviewees exp ressed a need for a simple, easy way to access information. An

HVAC company representative pointed out that everything today is internet based and

developing a website would be a good start. However, she thought that many government

websites require you to read in circles and jump through hoops to get the information you’re

looking for. A central place for customers to receive clear information about energy savings

opportunities seemed to be something many respondents thought would be useful.

Reaching custo mers through channels they’re already looking to for information could be a

particul arly helpful outreach strategy. For example, someone from the Energy and Sustainably

Roundtable recommends disseminating information through the Chambers of Commerc e to

rea ch business customers. The Roundtable itself may be a good forum for educating members

about efficiency and programs provided in the state. The ESR is a member

- based organization

for the busin ess and development communities that holds quarterly meetings. T hey have an

educational component (i.e. speakers, case studies) and members also talk about sustainability

efforts they’re taking at their business (mostly in energy efficiency). To reach residential

customers, a previous residential program participant re commends going neighborhood byOptimal Energy

, Inc

. 6 neighborhood and using homeowner association meetings as for u ms for explaining the benefits

of energy efficiency and processes for implementation. Additional collaboration opportunities

may exist with the Delaware State Housi ng Authority and Delaware Tech.



### PRODUCT/SERVICE A **VAILABILITY AND MARKET CHANNEL**  **FINDINGS**

The survey also in cluded questions to determine whether efficient options are available and

being promoted in the marketplace as well as how efficient products move t hrough the

marketplace. The re was a g eneral sense among respondents that efficient equipment and

products are available

. No one seemed to suggest that efficient equipment was hard to get or

that the supply was limited. Although some companies work with dis tributors out of state, they

seemed to think t hat there were distributors locally

. For example, a representative from an

HVAC company indicated that his company is located across the border in Pennsylvania, but

does a large amount of business in Delaware. When he first started, the primary distributors

were located in Pennsylvania and Baltimore , but there are no w companies l ocated in Delaware

. Another HVAC company representative believes there are a number of small HVAC companies

in Sussex County and Kent County, but much larger companies are located in New Castle.

There may be some exceptions, however. For example, a large grocery store chain works

with an HVAC and refrigeratio n company in New Jersey called Cold Technologies to provide

equipment design, installation, and maintenance

. They suggest that there are no companies

doing installation or maintenance in state that are the right size or have the experience for their

facili ties. ShopRite stores are large with many different end uses and the company needs an

outfit th at “ really knows the business. ” The company also does grocery store chain’s lighting

design. However the company did not seem to be hindered by working with a co mpany in New

Jersey rather than Delaware.

Additionally, while people seemed to think efficient equipment and products are available,

they are not necessarily being promoted to customers by the professionals selling them. If

customers’ primary concern is u pfront cost, building professionals will work to meet that

criteria and not try to convince them otherwise

. Because cost is the primary driver for most

customers, standard, less expensive options are likely to be the most prevalent. For example, a

represen tative form an HVAC company that specializes in residential geothermal, suggested

that many home builders have turn

- key designs, and customers wanted something different

than the standard option have to go out of their way to ask for it and cover the addit ional costs.

A representative at an electrical supplier believes Delaware is crowded with electrical suppliers.

He does not believe there are manufactures representatives in the area, but knows of lighting

vendor s who represents many manufacturers. Residen tial lighting is largely purchased at large

box stores like Home Depot and L owes. A previous residential program participant and Energy

and Sustainability Roundtable member referenced a large Sears Outlet in northern Delaware

where many homeowners purchase their appliances. She indicated that many of the displays

shows energy star ratings. A representative from a construction company suggests that

residential HVAC/DHW equipment also purchased at Home Depot, Lowes as well as Costco

and BJs whichOptimal Energy

, Inc

. 7 

### TRAINING **AN D LABOR FINDINGS** 

Training and education has been effective in other regions as a way to proliferate efficient

products, technology and practice. The survey included questions to determine if training is

needed in Delaware and if so, to what extent. Respond ents indicated that some training is

currently available in the state. A n HVAC company representative stated that Delmarva Power

offere d a good training opportunity. Additionally, Rumsey Electric indicated that it provides

training for customers . A representative from the Delaware State Housing Authority believes

training was offered to contractors through the state weatherization program. When one

representative’s company implemented the SEU’s Home Performance Program, the respondent

indicated that they program offered training for contractors that required BPI certifications.

There are also educational opportunities related to energy efficiency offered through the

Delaware Technical Community College’s Energy Management program also provides

educati on related to energy efficiency.

The vast majority of interviewees support expanded training options for end users, as well

as buildin g and equipment professionals. For example, an HVAC company represeative

indicated that there is a lot of training for tec hnicians, but not enough training on energy

systems t hinking, at least not locally. She would like to see training for everyone including

HVAC companies, builders, and contractors. She doe s not think we can achieve optimal

building performance unless every one is involved and on the same page

. Training should really

be focused on the whole system. A representative from a construction companies agrees that

t raining should be focused on the whole system and points out that lighting and HVAC, etc. go

hand in ha nd.

One grocery store chain representative thinks training would be useful at a store level

re lated to equipment use on site as wel l as behavioral savings opportunities. Additionally,

ShopRite would be interested in training sessions to make sure their ma nagers and the

businesses they work with are kept aware of cutting edge technologies and opportunities

. For

commercial customers who understand efficiency opportunities, the best training may to help

customers understand how the project will payback invest ment costs and how fast. Andrea

Kreiner of the ERS thinks there is a huge role for education and marketing, pa rticularly with

regard to ROI. Ms. Kreiner also thought training about cost

- effectiveness could be useful to

describe the options and benefits of efficiency to building and facilities managers.

A previous residential program participant and Energy and Sustainability Roundtable

member thinks small businesses and home owners could benefit the most from training. She

referenced opportunities to show pe ople what efficiency means rather than telling them. When

she had her home weatherized, she did not realize what it entailed and would have liked to see

a video ahead of time showing the process. She also thinks the Delaware Technical Community

C ollege’s, “energy house” at their Georgetown campus could teaches students to do energy

audit and an open house could teach others about efficiency. She also believes there is an

opportunity to train people about the importance of conserving energy.

A respondent fr om the Delaware Public Housing Authority thought there might be a

training opportunity for new home buyers about assessing home energy efficiency

. HeOptimal Energy

, Inc

. 8 indicated that DS HA has a program that provide s financial assistance to fir s t time homebuyers

. The program does not have a specific energy efficiency initiative attached to it, but assumes

home buyer s will assess as energy efficiency with criteria for home buying.



### ADDITIONAL **THOUGHTS**

A respondent with a government agency pointed out that many of the agency ’s municipal

buildings located in center of Dover are historic buildings

. It can be extremely expensive to

improve efficiency in these buildings since they ne ed things like custom windows. To the extent

that there are many historic buildings in Delaware, ener gy efficiency in these types of structures

may require additional consideration, guidance, or program funding. For example, Pacific

Power, in collaboration with the Oregon Main Street Program and Energy Tru st of Oregon

developed a guide to help small comme rcial building owners with energy efficiency in historic

buildings. The guide provides information about opportunities for efficiency improvements

while maintaining the historic character of the building. 1 A similar guide, or information

specifically relev ant to historic build ing owners, may be something worth exploring in

Delaware.



### CONCLUSIONS

In many respects, customers in the state of Delaware face similar barriers to energy

efficiency as those in other jurisdictions. A focus on upfront costs and lack of awareness among

some customers represent significant challenges. However, specific market sectors and end

users face distinct barriers that should be considered and addressed through program offerings.

Attitudes in favor of energy efficiency may lag behind those states that have been implementing

efficiency programs for many years. However, efficiency equipment and product availability

does not appear to hinder energy efficiency improvements. Training and partnership

opportunities may help to shift attitudes, educate customers about the benefits of efficiency, and

increase program participation. A concerted marketing and outreach effort that disseminates

information through channels customers already turn to for information could also and help to

engage customers. Respondents who have already participated in efficiency projects were

generally satisfied with the process and outcomes. Providing them with a centralized place to

find additional information and simple and transparent participation processes can help to

ensure customers take advantage of energy savings opportunities in Delaware.

**Organization Contact** 

1 Pacific Power, “Historic Preservation & Energy Efficiency.” Accessed November 14, 2011.

http://www.pacificpower.net/bus/se/tr/hpee.htmlOptimal Energy, Inc. 

## APPENDIX F **: RESIDENTIAL PROGRAM**  **CONCEPTS DESCRIPTION S** Optimal Energy, Inc.



### NEW CONSTRUCTION

The Residential New Construction (RNC) Program is first described on page 49 of the

“Program Portfolio Design” section of the report and is one of the program strategies used to

develop Program Potential results. The Table below summarizes the energy this type of

program could save in Delaware over the 12-year study period as well as the budget required to

implement the program.

**Residential New Construction Program Summary – Cumulative Annual Results in 2025** 

**Electric Energy**

**(MWh) Electric Demand** 

**(MW) Natural Gas** 

**(BBtu) Petroleum Fuels** 

**(BBtu) Total Budget** 

**2014**

**- 2025** 

**(Present Value**

**Millions$)**

37,919 4 44 16 21



### Market Segment (including Major End

**- uses and Technologies Promoted)** 

The proposed Residential New Construction (RNC) Program will work with builders,

contractors, architects, developers, code officials, and suppliers to optimize the energy

efficiency of new homes in Delaware as they are designed and built. The program will focus on

providing these services for single family homes, duplexes, and small multi

- family structures

that contain fewer than ten living units. T he program will be available to both indep endent

builders who may work on only one home at a time and those developers whose business

model favors multi

- year build

- outs of residential developments that contain hundreds of

homes. T he program will provide similar program services regardless of heati ng or hot water

fuel choice and will address all key end uses and building systems in the home. These include

insulation, window performance, air leakage, HVAC system efficiency, mechanical ventilation,

lighting, appliances, and hot water heating.



### Delivery Model

The program will take a two

- branch ed approach to generating more efficiency in residential

new construction by engaging both with the designer/developer/builder communities and with

Delawareans who are in the market to purchase new homes. A program implementation

contractor will be procured through a competitive solicitation and will be responsible for day

to

- day implementation of the program. The p rogram implementation contractor will be

responsible for assuring that an array of technical as sistance including plan review and

recommendations, completion of code compliance documentation, performance testing (air and

duct leakage), etc. are available to builders. Ideally these technical services will be provided by

independent Home Energy Rating (HERS) companies with program incentives designed to

partially offset the rating costs in addition to the measure costs

. However, if there is insufficient

capacity of HERS companies

, the program implementation contractor may need to provide

these services on an interim basis either through subcontracts or direct staff.Optimal Energy, Inc. Concurrent with outreach to the building community the program will provide information

about the benefits of energy efficient housing to Delaware’s current and future home buyers

, primaril y through the web, coop advertising with builders, and through earned media

. Th is

approach will increase awareness of efficien t options in new housing w h il e simultaneously

increas ing the market’s ability to supply the housing that the market seeks.

Multiple paths to participation will encourage builders to increase their level of savings over

time. Bundled technical support and financial incentives will simultaneously address multiple

barriers, supporting the participation of a variety of builders wi th different levels of interest and

current knowledge o f efficient building practices.



### Services/Incentives Offered

The services that will be offered in the new construction program are organized by the

designated recipients: the design/develop/build commun ity, and the pool of current and future

homebuyers.

**Services for the design/develop/build community**

The energy efficiency expertise of Delaware’s building community needs to be better

understood prior to detailed implementation planning for the residential new construction

program

. I n all likelihood

, there are varying levels of knowledge and expertise. A strong focus

of this program will be to ensure that all builders are able to participate, and that all builders

who choose to participate are provided with technical assistance tailored to their specific needs.

Insufficient technical knowledge is a consistent barrier to more efficient new construction. Any

builder who uses modern building materials must address an increasingly complex set of

building detail s that determine the difference between a durable, energy efficient and

comfortable home and one that may face significant moisture damage, high energy bills, and

uncomfortable residents. The program will provide training and one

- on

- one technical support

to ensure that builders have the information they need to achieve the former. The program will

also support increased building envelope and duct testing services, both as part of the

verification process for progra m and building code compliance and as a training tool to assure

that builders understand air and duct leakage issues and are equipped to address them. In

addition, financial incentives will be provided to builders to offset the higher initial costs

associated with more efficient construction practices.

**Services for current and future homebuyers**

The services that will be provided to homebuyers will largely consist of information

services: information that will inform them of the benefits of energy ef ficient construction, and

let them know how to identify homes that meet the efficiency criteria set forth by the program.

This information will be provided through a website, coop advertising with builders, public

service announcements, and participation i n home shows and other events where potential

homebuyers may congregate. Direct incentives to homebuyers are not contemplated for the

initial program offering. Incentives will be paid to builders to offset the additional costs that

they incur in building t o a higher efficiency standard. Offsetting these costs allows the builders

to build a more efficient home without putting themselves at a competitive disadvantage on

price.Optimal Energy, Inc. Incentives will be provided for whole house performance using a tiered approach, w ith

greater incentives available for greater levels of efficiency. Additional incremental incentives

may be offered for specific non

- standard measures such as heat recovery ventilation, TopTen

USA appliances, or drain water heat recovery , though these will not be the primary focus of the

program

. The three p rogram compliance paths will include:



###  An entry

- level option comprised of technical assistance and tiered incentives

tied to building homes that are more efficient than residential code in

Delaware (curre ntly IECC 2009)

. This option will be designed to be

manageable for builders who are new to energy efficient construction

practices. In other words, with technical support and modest incentives any

Delaware builder should be able to succeed at this level wi thout dramatic

changes to current practices.



###  ENERGY STAR Homes Version 3 (V3) will be offered as the second tier of

program participation. Me eting all of the requirements associated with V3

— especially the non

- energy, durability

- focused requirements

— may be a

barrier to participation, particularly for builders new to ENERGY STAR

and/or highly efficient construction , however it will provide a highly visible

achievement for participating builders, and will clearly distinguish them in a

competitive marketplace.



###  An advanced option that significantly exceeds ENERGY STAR will be the

highest program tier. Homes built to this standard will be dramatically more

efficient than a typical code

- compliant home

, and will require a significant

level of additional effort of the designer/builder community. This tier will

include a requirement that participating homes be net zero energy capable to

provide a platform for meeting Delaware ’s legislative mandate (SB 59) that

requires all homes built after December 31, 2025 to be ne t zero energy

capable

.



### Best Practice Features

Delaware’s residential new construction program will feature the following best

- practice

program elements:



###  B undle incentives with technical support and market outreach for a

comprehensive, multiple end use, and multiple fuels approach



###  Utilize t iered participation levels to engage b uilders and developers with

different levels of experience with efficient construction and allow them to

become increasingly efficient



###  Offer i ncreasing incentives for increasing levels of efficiency



###  A ddress multiple barriers, including lack of technical knowledge, lack of

awareness of energy efficient opportunities, and increased first costs



###  P rovide “o ne

- stop shopping ” for comprehensive services

— meaning that

there will be a single phone number, web site, and point of contact for

builders and homebuyers to gain access to all of the program’s servicesOptimal Energy, Inc. 

###  E mphasize not only the energy savings associated with efficient new

construction but also its sustainability, increased comfort, lower carbo n

footprint, and lower overall cost of ownership, including potentially lower

monthly ownership costs due to lower energy bills



###  Support builders and developers through coop advertising to promote

increased consumer marketability



###  Provide simplified code com pliance documentation as a benefit of

participation



###  Coordinate p rogram standards with codes and state legislative mandatesOptimal Energy, Inc.



### RETROFIT/HOME ENERGY **SERVICES**

The Retrofit/Home Energy Services Program is first described on page 50 of the “Program

Portfolio Design” section of the report and is one of the program strategies used to develop

Program Potential results. The Table below summarizes the energy this type of program could

save in Delaware over the 12-year study period as well as the budget required to implement the

program.

**Retrofit/Home Energy Services Program Summary –**  **Cumulative Annual Results in 2025**

**Electric Energy**

**(MWh) Electric Demand** 

**(MW) Natural Gas** 

**(BBtu) Petroleum Fuels** 

**(BBtu) Total Budget** 

**2014**

**- 2025** 

**(Present Value**

**Millions$)**

154,100 33 280 316 109



### Market Segment (including Major End

**- uses and Technologies Promoted)** 

The Retrofit/Home Energy Services program will be offered to owners of single family

homes, duplexes, and small apartment buildings having no more than nine living units. The

program will be available both for owner

- occupied homes and for rental properties where the

owner agrees to the program terms. The program will be comprehensive in that it will be

available to homes using any of the commonly used energy s ources for heating and cooling:

electricity, natural gas, fuel oil, and propane. It will also be comprehensive by providing

efficiency solutions for all end uses in participating homes wherever those solutions are cost

effective and in the best

- interest of the owners and occupants.

Home retrofit services that are truly comprehensive address three major areas to determine

how much energy is used in any given home. These are:



###  The insulation and air leakage levels of the building structure, including

walls, w indows, ceilings, exposed floors, foundations, etc.



###  The efficiency of the mechanical systems that heat and cool the indoor

environment, heat water for domestic purposes, clean and dry clothes, make

light, keep food cold, etc.



###  The ways that the buildings’ o ccupants operate their homes: how they set the

thermostat, how much laundry they do, etc.

The Retrofit/Home Energy Services program will address all three of these areas through a

combination of contractor services and program

- driven education and outreach

.



### Delivery Model

In order to be effective, comprehensive home retrofit services need to be delivered by a

workforce that has specialized expertise not only in home construction and repair, but also in

techniques that reliably deliver real energy savings. I n order to ensure that such a workforce

exists, and to manage day

- to

- day operations of the program, a program management and

implementation contractor will be hired through a competitive solicitation. To the extentOptimal Energy, Inc. needed, the program implementer will be r esponsible for providing training to the local

workforce. Regardless of the experience level of the contractors, the program implementer will

ensure that they adhere to standards by operating a rigorous quality assurance process. The

implementer will also be responsible for creating and operating a job completion process that

guides participants and contractors through the required steps from home energy assessment to

final verification of the installed measures.

Home retrofit services for Delawareans will be delivered using a contractor

- driven model,

where Building Performance Institute (BPI)

- accredited 1 firms will sell their services to

homeowners, using certified technicians to install long

- lasting efficiency improvements while

maintaining the integrity of the building and the health and well

- being of the occupants. The

Retrofit/Home Energy Services program will provide support both to contractors in the form of

technical training and in the marketing of their services, and to homeowners by providing

info rmation, maintaining a list of participating contractors who comply with program

expectations, and by providing quality assurance to verify that participating contractors do

indeed meet the requirements of the program.



### Services/Incentives Offered

The goal of this program is to provide motivation, opportunity, and financial support to

Delawareans so that they invest in reducing the amount of energy used in their homes. These

goals are further described below.



###  **Motivation**

**–** The program will inform homeowners about the benefits of

home energy retrofits, provide testimonials of friends and neighbors who can

attest to the benefits of doing an efficiency project, and strive to create the

sense that having work done to save energy makes sense and makes one a

strong member of the community.



###  **Opportunity**

**–** Often homeowners want to save energy at home, but do not

know what kind of work to have done or who to have do it. The program

will maintain ready access to a listing of participating contractors who have

the trainin g to do effective energy efficiency retrofits, meet technical

qualifications, have acceptable amounts of insurance, agree to program

requirements for warranties, and meet the requirements of the program’s

Quality Assurance program.



###  **Financial Support**

**–** For many homeowners, even after they understand the

opportunity and have found a qualified contractor, the costs of carrying out a

project are simply too great, even when the savings will outweigh the costs

over the long term. To ease the first

- cost burden , the program will both

provide access to modest incentives (designed to cover between 10% and 50%

1 Depending on the market presence of BPI

- Accredited contractors it is likely that a ramp

- up period will be required

before the accreditation requirement will be put in place. Regardless of the timing of the accreditation

requirement, the program will requi re that jobs be conducted under the supervision of individuals who have the

relevant BPI certifications.Optimal Energy, Inc. of the measure costs) and attractive financing to ensure that Delawareans can

reap the benefits of reduced home energy use.

Participating contractors will be required to take a comprehensive approach, meaning that

the services offered to participants must tailored to the opportunities in each house they assess

and include increasing insulation levels, reducing air and duct leakage, appliance upgrade

opportunities, and improvements to HVAC and DHW systems. The program will also include

direct

- install ation of efficient lighting products by participating contractors a t no cost to

homeowners

.



### Best Practice Features

Delaware’s Retrofit/Home Energy Savings program will include the following features

found in the industry’s best programs:



###  Financial incentives will be bundled with technical support and information

to increa se participation. Both direct financial incentives and financing will

be available to participants.



###  The program will address opportunities to save electricity and other fuels

that provide energy in homes, including natural gas, fuel oil, propane, etc.



###  Part icipation processes will be designed with the customer’s interests in

mind and kept simple and readily understandable by a non

- technical

audience

.



###  After a suitable ramp

- up phase, participating contractors will be required to

obtain a ccreditation from the B uilding Performance Institute, the

independent body that oversees the technical qualifications of home energy

efficiency contractors. Contractors will be required to adhere to the

installation standards promulgated by BPI.



###  From the outset, participating co ntractors will be considered to be partners in

the program. They will have a role in identifying program priorities and will

have input in designing participation processes.



###  Contractors will carry out assessments of the opportunities to save energy in

each home and will perform diagnostic testing to assure that opportunities

are identified and that any pre

- existing or potential indoor air quality or

safety issues are addressed.



###  The program will carry out a quality assurance protocol to ensure that

program s tandards are met. The protocol will include both on

- site

verification for a random mix of projects and customer satisfaction surveys

for all participants.Optimal Energy, Inc. **Electric Energy**

**(MWh) Electric Demand** 

**(MW) Natural Gas** 

**(BBtu) Petroleum Fuels** 

**(BBtu)** 

### MULTI-FAMILY

The Multi-Family Program is first described on page 51 of the “Program Portfolio Design”

section of the report and is one of the program strategies used to develop Program Potential

results. The Table below summarizes the energy this type of program could save in Delaware

over the 12-year study period as well as the budget required to implement the program.

**Multi-Family Program Summary –**  **Cumulative Annual Results in 2025**

**Total Budget**

**2014**

**- 2025** 

**(Present Value**

**Millions$)**

13,215 3 44 11 12



### Market Segment **(including Major End**

**- uses and Technologies Promoted)** 

Delaware’s multi

- family program will address residential structures that contain 10 or more

living units. According to the 2011 American Housing Survey there are roughly 40,000 housing

units in Delaware in buildings containing 10 or more units

— or roughly 10% of Delaware’s

housing. To most effectively address the unique barriers that typically exist in the multi

- family

market

, this single program will address a broad range of savings opportunities i n the MF

market segments . The program will address retrofit and new construction projects; all fuel

types including natural gas, electricity, and delivered fuels ; and all income levels, from limited

income and affordable housing to luxury market rate housing.

Multi

- family housing is an increasingly important segment of the housing market, yet

providing comprehensive energy efficiency services to people who live in apartments can be

difficult and is often overlooked by efficiency programs. At the root of this is the split incentive

issue described previously in the “Understanding Barriers” section of the report. For instance,

in many cases the tenants in an apartment building may receive heating and cooling from a

central system for which the landlord pays the bi lls , providing the tenants with little incentive

to use energy efficiently

. The converse is also true ; in multi

- family structures where the tenants

pay the utility bills the landlord may have little motivation to pay for efficiency improvements.

This chall enge is found across the full spectrum of multi

- family housing, from subsidized

affordable housing to market

- rate luxury apartments. It exists both in new construction ( where

the developer who takes on the added costs of building

- in efficiency may not reap the benefits

of lower operating costs) and in retrofit situations.

The program will support cost

- effective improvements in all end

- uses regardless of the

energy type used , including:



###  I mproved lighting , both in

- unit and common areas



###  L ow

- flow showerheads a nd faucet aerators



###  Appliance upgrades



###  C ost

- effective savings in the building’s thermal shell (wall and ceiling

insulation, draft reduction, window improvements)Optimal Energy, Inc. 

###  Whole

- building mechanical systems (e.g., heating and cooling equipment,

water heating equipmen t, laundry, and ventilation systems)



### Delivery Model

Delaware’s Multi

- family program will take a comprehensive approach to providing energy

efficiency services in this sector and will work with property owners, managers and tenants to

address the full spectrum of energy efficiency opportunities. A program implementation

contractor will be procured through a competitive solicitation and will be responsible for day

to

- day implementation of the program. Initial engagement will be with the property managers

, who serve as the liaison between the financial and operational needs of the property and the

human needs of the people who live there. Program staff will reach out to property managers to

hear first

- hand about the challenges they face in managing their p roperties and will develop

packages of efficiency options that can either overcome existing constraints or work within

them. This is a notably different approach than some have tried, where a prescriptive, one

- size

fits

- all rebate package is offered on a “ take it or leave it” basis.

The key to success in the multi

- family market is the strong relationships that program staff

will build with property managers and developers. Typically multi

- family housing represents a

long term investment for its owners, who may be either development companies or affordable

housing providers. While the technical opportunity for a multi

- family retrofit may be available

and “there for the taking

, ” the financial and practical opportunities often vary due to

circumstances that hav e nothing to do with energy. For example, the opportunity to replace

appliances with more efficient ones is much greater when a property is already planning to

replace the appliances for maintenance reasons. Similarly, it may be easier to persuade a

proper ty manager to install insulation when a n unrelated renovation project

— with its attendant

disruption to the property and its tenants

— is already planned. Establishing relationships with

these decision makers allows the program to be come aware of and be ready for these naturally

occurring opportunities.



### Services/Incentives Offered

For existing properties, e nergy

- saving opportunities will be identified first through a free

walk

- through audit that will assess improvement areas that merit further study. For new

construction projects or for those existing properties where significant renovations are already

planned or underway, program staff will meet with the project design team to review plans and

prioriti z e energy efficiency opportunities. Opportunities will be assessed in the following areas:



###  Direct install ation of low cost measures in tenant units, including energy

efficient lighting and water saving showerheads and faucet aerators



###  Efficient lighting for common areas such as hallways, entries, etc.



###  App liance upgrades



###  Major system upgrades for heating, cooling, ventilation, and laundry

equipment



###  Thermal shell improvements such as added insulation and air leakage

reductionOptimal Energy, Inc. Cost and savings estimates will be developed and packaged with an offer of incentiv es and

financing designed to meet the financial needs of the property. Packages will include targeted

construction management support, tenant and facilities staff education on how to maximize the

benefits of the energy efficiency project, and quality assur ance and verification services to

ensure that the project is installed according to specifications. The program will also provide

technical assistance and limited construction oversight for energy efficiency measures

.

The program will prioritize engaging property managers with comprehensive bundl es of

efficiency measures that address all end uses with cost

- effective opportunities. The bundl es will

include simple measures such as direct

- installation of efficient lighting, as well as any cost

effective appli ance, thermal shell

, and mechanical system improvements that are identified

. Along with information about the benefits of the recommended measure bundle, the program

will present property managers with a package of incentives and financing for the measure

bundle that will be designed to overcome first cost and cash flow barriers. The packages will be

comprehensive, but the program’s representatives will understand that in many cases the

property managers may not be able to move forward with the entire packa ge at the time it is

presented. Where necessary the program will work collaboratively with property managers to

develop phased approaches to the work that will allow greater savings to occur over time rather

than limit the savings potential to what the pro perty manager can agree to at the time the offer

is made.

Affordable multi

- family housing services will be similar to those provided to the general

multi

- family housing market, but will reflect the unique circumstances and barriers experienced

in this housing. In affordable housing, financial packaging that fits the needs of the project

, including higher incentives, becomes even more critical, as cash

- flow margins are often almost

non

- existent. Major efficiency projects are often most likely to occur wh en affordable housing is

re

- structuring its financing and contemplating other major rehabilitation. Building efficiency

into projects of this sort requires strong relationships and regular communications between

program staff and property managers in order to meet planning cycle deadlines.



### Best Practice Features

The following features of industry

- leading programs will be included in Delaware’s multi

family program:



###  Relationships built with property owners and managers for sustained

engagement , allowing for greater depth of savings over time



###  Both new construction and retrofit projects will be eligible for services

through this program to capitalize on relationships with multi

- family

developers and property managers



###  Targeting of specific sub

- sectors of the mu lti

- family market (affordable

housing, market rate) and tailored solutions for each sector’s unique needs



###  Comprehensive solutions addressing tenant units and common areas and

systems regardless of who pays the utility bills and whether the meters are

on r esidential or commercial rates . Solutions will also address all fuels u sed

in participating propertiesOptimal Energy, Inc. 

###  Financial packaging including incentives and loans designed to address both

first cost issues and long term cash flows



###  Coordination with C&I programs for mixed

- use development



###  Centralized program delivery (o ne

- stop shopping ) to provide a full range of

support servicesOptimal Energy, Inc. **Electric Energy**

**(MWh) Electric Demand** 

**(MW) Natural Gas** 

**(BBtu) Petroleum Fuels** 

**(BBtu)** 

### RETAIL PRODUCTS

The Retail Products Program is first described on page 53 of the “Program Portfolio Design”

section of the report and is one of the program strategies used to develop program potential

results. The Table below summarizes the energy this type of program could save in Delaware

over the 12-year study period as well as the budget required to implement the program.

**Retail Products Program Summary –**  **Cumulative Annual Results in 2025**

**Total Budget**

**2014**

**- 2025** 

**(Present Value**

**Millions$)**

548,167 46 497 224 139



### Market Segment (including Major End

**- uses**  **and Technologies Promoted)**

Delaware’s Retail Products program will focus on influencing consumers to make efficient

choices when purchasing new appliances, lighting, heating, ventilation, and air conditioning

(HVAC) equipment, domestic water heating (DHW) equipment

, and select consumer

electronics. When multiplied by thousands of transactions each year, t he simple difference

between purchasing a single “standard” efficiency light bulb, dehumidifier, or water heater and

purchasing a high efficiency alternative will have an enormous effect on Delaware’s overall

energy consumption.

Initially, the Program’s lighting component will jointly promote both compact fluorescent

lamps (CFLs) and light emitting diode lamp s (LEDs). Over time the Program’s focus will shift

increasingly to LEDs as their price continues to fall and performance in new lighting categories

improves. It is expect ed that by 2017 the Program will no longer be supporting CFLs.

Refrigerators, freezers, clothes dryers, clothes washers, and advanced power strips will all

be considered for inclusion in the initial retail program offering. The HVAC and DHW markets

are typically not thought of as purely retail markets because contractors are generally hired to

install the equipment . However, the potential effect of an individual time of sale decision on

long term energy use is similar to that of a retail purchase, so these end uses are included in the

Retail program. For HVAC and DHW the program will work closely with contractors and

distributors to promote quality installation of efficient air source heat pumps, central air

conditioners, ductless split heat pumps, furnaces, boilers, tankless water heaters, and heat

pump water heaters.



### Delivery Model

A program implementation contractor will be res ponsible for day

- to

- day implementation of

the program including partner recruitment, requests for proposals (RFP) generation, and

memorandum of understanding (MOU) execution, sales staff support and correct placement of

point of purchase (POP) materials, r esponding to customer concerns, contractor training, and all

other aspects of program operations. Marketing and outreach, which will be significant aspectsOptimal Energy, Inc. of the retail program, will either be coordinated with the portfolio’s marketing team, or be

include d in the responsibilities of the retail program implementation contractor.

The retail program will focus principally on the promotion of efficient lighting, which will

be supported at retail with upstream incentives to manufacturers and retailers to reduc e the

retail purchase price of their products. The program implementation contractor will issue RFPs

specifying the desired lighting product types, quantities, and desired final retail pricing after

incentives through a clear procurement process. Proposals will be selected and MOUs will be

executed to lay out the terms of the lighting promotions.

Appliances and consumer electronics will be largely supported with midstream retailer

incentives tied to the sale of qualifying products, though mail

- in coupons m ay be required

instead for some products and retailers. Continued improvements in the efficiency of many

consumer products and high market shares for ENERGY STAR qualified units may allow the

program to set measure eligibility criteria above ENERY STAR to further increase the efficiency

of Delaware households. Efficiency levels could be tied to those established by TopTen USA

and/or by EPA’s ENERGY STAR Most Efficient program.

HVAC and DHW equipment will be supported with mail

- in rebates that will be assig nable

to the contractor who installs the qualifying equipment. The program will also offer contractor

training on quality installation practices. There will be robust quality assurance/control

procedures to ensure that contractors adhere to program require ments. HVAC and DHW

program activities will be closely coordinated with retrofit/home energy services, multi

- family,

residential new construction, and income eligible efforts. After the initial year of operation the

program will assess whether to pursue an upstream incentive pilot. Based on the results from

any such pilot the p rogram may move to an upstream model for HVAC and DHW initiatives to

supplement or fully replace the consumer and contractor targeted rebate model.



### Services/Incentives Offered

The re tail program will work with manufacturers and retailers to promote the stocking,

marketing and sale of efficient residential lighting, appliances, consumer electronics, DHW and

HVAC equipment to consumers, landlords, contractors, builders and small busines ses. Nearly

all supported products will be ENERGY STAR qualified, though for some product categories

higher levels of efficiency may be required to qualify for rebates or incentives. The p rogram will

employ a variety of incentives and rebates supported by both broad based and targeted

marketing and educational and outreach efforts. For HVAC the program will also promote

quality installation practices.

In many, if not most cases, financial incentives will be in the form of payments to retailers

and manufactu rers to reduce the purchase price of specified equipment rather than rebates that

are paid to the retail customer after the purchase. This approach, referred to as a buy down,

markdown, or upstream model depending on the specific arrangement, has been high ly

effective at influencing the purchase of efficient equipment for much lower program costs than

earlier coupon

- based programs. Upstream models not only reduce processing fees paid by the

program, but more importantly they dramatically reduce the time and effort required ofOptimal Energy, Inc. consumers, who no longer have to fill out coupons, find their utility account numbers, and so

on.

In addition to financial support the program will provide consumers with information to

inform and accelerate their choice of efficient p roducts. This information will come in several

forms, including point of purchase materials, a consumer

- facing informational program

website, advertising through local media channels, co

- op marketing with retailers and

manufacturers, and earned media. The materials will answer common questions that may have

prevented customers from purchasing efficient products in the past. For lighting the materials

will also address the shift to lumens as the appropriate means for lamp selection, the impacts of

EISA on lamp choice and selection, and the growing advantages of LEDs as the preferred

lighting technology of choice.

Hard

- to

- reach populations that may not normally shop at the largest sales venues for

lighting such as home improvement and mass merchandisers, , w ill be specifically identified

and targeted. This may require increased recruitment of grocery, drug and other retailers such

as “dollar stores.”

For HVAC and DHW products the program will work through local wholesale distributors

to reach the local contra ctors who install equipment in homes. Distributors are a primary source

of product training for installers, and the program will leverage this ongoing relationship to link

program training to other distributor events. Initially this may mean simply having a program

staff person come to distributor events to give a quick presentation on the availability of the

program, but may evolve to more in

- depth trainings on quality installation practices that may

become a program requirement. The program will also asse ss the opportunities to promote

efficient HVAC and DHW equipment through home improvement and mass market retailers

such as Sears, Lowe’s, Home Depot, and others

.



### Best Practice Features

Delivery of the retail program envisioned for Delaware will incorporate the following best

practice features:



###  Coordinated approach to overcoming multiple barriers by raising awareness,

increasing access to efficient products, and reducing first costs



###  Part nerships with manufacturers, distributors, and retailers to promote high

efficiency, high quality products that will meet or exceed consumer

expectations



###  Targeted outreach to different customer segments so that all have the

opportunity to take advantage of the program’s offerings



###  A lternative sales/promotional venues to reach under

- served customers who

may not shop at big box retail locations



###  Support for advancing technologies by regularly evaluating market

opportunities and gradually increasing the efficien cy requirements of eligible

equipment



###  Streamlined program participation through the use of buy down, markdown,

and upstream program modelsOptimal Energy, Inc. **Electric Energy**

**(MWh) Electric Demand** 

**(MW) Natural Gas** 

**(BBtu) Petroleum Fuels** 

**(BBtu)** 

### INCOME-ELIGIBLE

The Income-Eligible Program is first described on page 52 of the “Program Portfolio

Design” section of the report and is one of the program strategies used to develop program

potential results. The Table below summarizes the energy this type of program could save in

Delaware over the 12-year study period as well as the budget required to implement the

program.

**Income-Eligible Program Summary –**  **Cumulative Annual Results in 2025**

**Total Budget**

97,780 20 216 119 **2014-2025**

**(Present Value**

**Millions$)**

73



### Market Segment **(including Major End**

**- uses and Technologies Promoted)** 

The goal of the income

- eligible program is to assure that comprehensive efficiency services

are available to as many Delawareans as possible, regardless of their ability to pay for them.

Because they hav e less income to work with, lower

- income households typically spend a much

greater portion of their income on energy costs than does the average household. Therefore the

need for efficiency is much greater, and the potential benefits can make a significant difference

for these families. There are also potential benefits to the overall ratepayer base by reducing

arrearages and the need for public assistance in paying utility bills. Threshold criteria for

program eligibility will be established based on incom e criteria for related services in Delaware,

such as affordable housing and Weatherization Assistance Program (WAP) eligibility. These

criteria are typically either 200% of federal poverty level or 80% of area median income . T he

income

- eligible program cri teria will be determined with the goal of being as inclusive as

possible while still aligning with other Delaware services for consistency across programs and

ease of participation.

Fundamental to the income

- eligible program is an abiding respect for the i ncome

- eligible

participants. These customers are treated no differently simply because they are less able to pay

for the services they receive.

Delaware’s income

- eligible program will be available to existing owner

- occupied single

family homes and to rent er

- occupied single and multi

- family homes containing nine or fewer

living units where occupants meet the program’s income criteria. For rental properties the

building owner must agree to the program’s terms and conditions, which among other things

, may inc lude an agreement to maintain the affordability of treated units for a specified period of

time. Typically

, participation of renter

- occupied properties will also include the expectation of a

financial contribution from the property owner to cover part of t he cost of the efficiency

improvements.

The program will strive to increase the availability of comprehensive energy savings for

income

- eligible households. End uses to be addressed will include:Optimal Energy, Inc. 

###  Building shell impr ovements, including insulation and air le akage reduction



###  Heating and cooling system efficiency improvements



###  Appliance efficiency improvements



###  Water heating efficiency improvements



###  Lighting efficiency improvements

Delaware’s income

- eligible energy efficiency program will address opportunities for

reducing the use of all fuels, including electricity, natural gas, fuel oil, and propane. For these

fuels, all end uses where cost

- effective improvements can be made will b e assessed and

improvements will be made as comprehensively as possible.



### Delivery Model

The best income

- eligible energy efficiency programs are deeply connected with the local

service providers that deliver support to income

- eligible people. Local provide rs have typically

spent many years developing trusting relationships within the income

- eligible community

— years which will benefit the income

- eligible program by increasing its ability to identify

participants and the program’s corresponding acceptance rat e. This means more savings are

achieved sooner for those Delawareans who are in the greatest need. The program will assess

gaps in the energy efficiency services that are currently available to income

- eligible customers

in Delaware and will fill them as ne eded to assure that all fuels and all end uses are cost

effectively addressed. If, for example, the existing WA P delivery infrastructure is currently only

able to deliver building shell improvements

, then this program might provide funding that

allows it t o also address heating and cooling mechanical system improvements, lighting, and so

on. If the WAP programs are comprehensive now, but only able to reach a small fraction of the

eligible population, then this program might provide additional funding that a llows WAP to

reach more households.

Determining the best approach for Delaware will require a collaborative design process that

includes stakeholders from area WAP providers, affordable housing advocates, and other

income

- eligible service providers. Stakeholders will be invited to work with program planners

and staff to identify program characteristics that will lead to the greatest success. Every effort

will be made in this process to reduce elements of competition for limited funding in favor of

collaborative achievement of common goals.

T here are several different forms that this collaborative program delivery could take.

Working through local service providers might mean that the program will be most effective if

it is completely delivered by local WAP providers using additional funding p rovided by the

program. Alternatively

, it might mean that an independent program delivery contractor is

identified to offer stand

- alone efficiency program services that are well

- coordinated with a

broad range of income

- eligible service providers.



### Services **/Incentives Offered**

Regardless of the final program delivery model, services provided through the income

eligible program will include:Optimal Energy, Inc. 

###  Compreh ensive energy assessments that look at all energy sources used in

the homes (energy audits)



###  Full cost incentives for eligible improvements in owner

- occupied units (no

out

- of

- pocket required for participants)



###  Partial incentives and financing assistance for owners of rental properties

occupied by income

- eligible tenants



###  Construction management, including identifying an d contracting with

installation firms



###  Energy education for homeowners, tenants, and property managers, to

provide tools for managing energy use



###  Quality ass urance

The program will adhere to the building science principles that are promulgated by the

Buildin g Performance Institute and the US Department of Energy for retrofitting buildings to

increase their energy efficiency. Contractors will test for carbon monoxide issues and assure that

no unsafe conditions are left after the building retrofit.

For eligible owner

- occupied housing

, the program will pay the full cost of the efficiency

project, including the assessment cost, construction management, measure installation costs,

and quality assurance. While the exact mechanisms for program operation will not be k nown

until the collaborative program design is complete, the program or its local partner will either

hire staff to perform the assessments, construction management, and quality assurance, or it

will contract with industry partners and/or qualified local b usinesses to provide these services.

Importantly, there will not be an expectation that program participants need to identify and hire

these services on their own. The role of program service providers will be managed and

coordinated by the program.

Progra m representatives will explain the recommended improvements to the participants

and secure approval for the project. In the case of rental properties, program representatives

will meet with property management staff and building owners to explain the

recom mendations, the available financial support, and the expected contribution from the

owner. With approval to proceed, the program will identify installation contractors to install the

improvements, verify that the installation meets program requirements, an d address any

customer satisfaction issues that may arise through the project.



### Best Practice Features

Delivery of the income

- eligible program envisioned for Delaware will incorporate the

following best

- practice features:



###  The program will partner with and extend the capacity of existing income

eligible efficiency services such as WAP



###  The program will target a unique customer sub

- segment

— those income

eligible families who most need to reduce their energy costsOptimal Energy, Inc. 

###  All program services will be available through one

- stop shopping

— participants will not be required or expected to shop for services in the

competitive marketplace



###  Coordination with other programs, such as multi

- family new construction

and efficient products will provide benefits in all income

- eligibl e efficiency

marketsOptimal Energy, Inc.



### BEHAVIOR **MODIFICATION**

The Behavior Modification Program is first described on page 54 of the “Program Portfolio

Design” section of the report and is one of the program strategies used to develop program

potential results. The table below summarizes the energy this type of program could save in

Delaware over the 12-year study period as well as the budget required to implement the

program.

**Behavior Modification Program Summary –**  **Cumulative Annual Results in 2025**

**Electric Energy**

**(MWh) E**  **lectric Demand**

**(MW) Natural Gas** 

**(BBtu) Petroleum Fuels** 

**(BBtu) Total Budget** 

**2014**

**- 2025** 

**(Present Value**

**Millions$)**

23,906 3 44 22 23



### Market Segment (including Major End

**- uses and Technologies Promoted)** 

The behavior modification program will target homeowners and renters to receive home

energy reports that compare their household energy use with other similar households in their

area. The program may identify target groups of customers using a number of criteria, such as

local housing characteristics, relative amount of energy used, income characteristics, and so on.

The specific messages contained in the reports are tailored to the target demographic. In other

words, while the concept and intent are the same, the report that is sent to people who live in a

nei ghborhood of modest, older homes might have subtly different messages than the report

sent to residents of luxury condominiums. Over the course of the planned program duration

more than half of Delaware’s households are expected to receive home energy repo rts at regular

interval s for at least one year. The program will target electric use in households and will also

address natural gas in households where it is used

.

All end uses in homes may be effected as a result of participant actions. Home energy

repor ts include a general call for recipients to reduce energy use, and further include specific

recommended actions that can reduce energy use in specific end uses. For example, a general

theme in a report might be that the recipient is using 20% more energy t han her neighbors

, followed by a general call to reduce her energy use. The recipient might respond to that by

trying to remember to turn off lights and televisions when not in use. The report might then go

on to suggest a specific action

— that more efficient appliances could reduce her energy use

—

and include a time

- limited special offer for a “bonus” incentive if she replaces her refrigerator

with an advanced, energy efficient model offered through the Retail Products program

.



### Delivery Model

The beh avior modification program will be contracted out to one of several turnkey

program contractors through a competitive solicitation. After executing agreements regarding

data use, the selected contractor will obtain customer data from the utilities . The con tractor will

then analyze the data along with certain demographic information to identify groups of

customers with higher typical energy bills. E nergy reports w ill be provided through eitherOptimal Energy, Inc. regularly mailed (typically monthly or bimonthly) hard

- copy repo rts, web

- based reporting, or a

combination of the two. These reports w ill provide energy efficiency recommendations that are

tailored to the customer and to the time of year. These re port s w ill provide the consumer with

the information and motivation to im plement the recommend ations

.

There are several vendors , such as Op ower

, that can design and deliver behavioral

programs to program administrators. Delaware’s program administrator may pilot one or more

approach before picking a single statewide approach. Any such statewide approach should

allow for integrated electric and gas home energy reports and should enroll participants on an

“opt out” basis, meaning that participants must make a conscious decision and undertake

specific actions not to participate. D elaware’s behavioral program may also provide for a web

based option and be able to integrate with any current or planned smart grid efforts, e.g.,

incorporate near or real time usage reporting.



### Services/Incentives Offered

Home energy reports w ill provide historic usage patterns and benchmark the customer’s

usage against other customers with similar home features and/or demographics. Although the

reports do not include direct financial incentives, they help customers to see the connection

between their habits and utility costs and make more economically rational decisions

. Such

reports also appeal to customers’ desire to contribute to community goals and engage in socially

desirable behavior by saving energy. . Additionally, from time to time the reports may contain

coupons, special offers, or other invitations to encourage participation in other residential

programs.



### Best Practice Features

Delaware’s behavior modification program will feature the following best

- practice program

elements:



###  Targeting and message tailored to specific customer groups based on

sophisticated data analytics



###  Simplified information for easy and direct actions



###  Optimum report frequency determined based on contractor’s experience in

other jurisdictions



###  Integrate d elec tric and gas report s



###  Broad reach including underserved customers , while maintaining targeting

to households with the greatest opportunity for savingsOptimal Energy, Inc. 

## APPENDIX G **: C&I**  **PROGRAM CONCEPTS DES CRIPTIONS** Optimal Energy, Inc. **Electric Energy**

**(MWh) Electric Demand** 

**(MW) Natural Gas** 

**(BBtu) Petroleum Fuels** 

**(BBtu)** 

### LOST OPPORTUNITY

The Lost Opportunity Program is first described on page 57 of the “Program Portfolio

Design” section of the report. It consists of a large umbrella program with several different

strategies or initiatives aimed at capturing savings from different segments of a diverse group

of customers. The Lost Opportunity strategies in aggregate were used to develop program

potential results. The Table below summarizes the energy savings this type of program could

save in Delaware over the 12-year study period as well as the budget required to implement the

program. The text following the table describes aspects of the specific program strategies that

fall under the Lost Opportunity umbrella.

**Lost Opportunity Program Summary – Cumulative Annual Results in 2025** 

**Total Budget**

**2014**

**- 2025** 

**(Present Value**

**Millions$)**

823,5 68 148 459 161 107

The L ost Opportunity Program attempts to influence purchasing decisions that are already

occurring in the marketplace. In other words, when C&I facilities need to buy new equipment

( due to existing equipment failure or planned replacement, renovation, or new construction ) the

program will attempt to influence the facility to purchase and install the most efficient and cost

effective equipment possible. If the facility instead gets standard efficiency equipment or builds

a standa rd efficiency building, a “lost opportunity” is created as that building or equipment will

continue to use more energy than necessary for the rest of its useful lifetime.

Because the lost opportunity market is highly time sensitive, the program needs to a pproach

it in many different ways. Ideally, the program will integrate itself throughout the market, so

that selecting higher efficien cy equipment becomes the natural decision. To this end,

prescriptive and upstream incentives are used to buy down the incr emental cost of efficient

equipment with minimal effort required by the customer. Account managers work to establish

ongoing relationships with the larger customers in order to identify upcoming purchasing or

renovation needs and give the program enough ti me to work with the customer to install the

most efficient equipment possible. Technical and design assistance is available for new

construction and renovation projects, in order to encourage the project to adhere to high

efficiency design principles. Thes e project components are described in greater detail below.



### Account Management

**Market Segment**

Account managers are assigned to large customer s , and work with those customers to

implement projects regardless of technology, end

- use, or what program is used t o provide the

incentives for the project. As such, account managers are not associated with particular

programs or market segments, but with specific customers. The same account manager working

with the same customer will often generate projects in multipl e programs, depending onOptimal Energy, Inc. whether the project is best defined as retrofit or lost opportunity. However, account managers

are particularly helpful for lost opportunity projects. Since these projects are time sensitive,

having pre

- existing relationships with customers allows the account managers to identify

possible lost opportunities (such as tenant fit

- outs or scheduled industrial downtime) far

enough in advance to allow a project to be planned and implemented, and can give customers

the necessary confidence that any replace

- on

- failure project would move forward quickly

enough to avoid significant downtime in building operation.

**Delivery Model**

Account managers form ongoing relationships with the customer. The account manager is

the primary point of contact be tween the customer and the efficiency program, and will help

the customer develop efficiency plans, navigate the incentive process, and receive technical

assistance. As a result of the ongoing relationship, the account manager will get to know the

customer ’s specific needs and barriers to efficiency investment, and so will be able to effectively

identify possible lost opportunity projects when they occur, and structure incentives in a way to

help overcome the barriers of each specific customer.

**Services/In centives Offered** 

Account management is not so much a service in itself but a means to access services offered

through the rest of the program more easily. The account manager acts largely as a sales person

, selling the services of the programs to large cust omers and generating projects for the program.

However, s he may also ease the process of applying for and receiving incentives, and her close

knowledge of the customer allows her to structure the incentives and offerings in the most

effective and efficient way possible.

**Best Practice Features**

Account managers will provide specialized outreach to the largest customers, providing a

single point of contact in order to streamline the process of applying for technical assistance,

incentive offers, financing, or other program offerings. The account managers’ one

- on

- one

relationships with their large customers will also enable them to provide specialized marketing

and sales pitches for efficiency and help design incentive offers that integrate with the

customers’ b usiness plans. Further, this familiarity allows the account manager to offer

personalized incentives, designed to be generous enough to spur the project into completion

without overpaying for the savings.



### Prescriptive Incentives

**Market Segment**

Prescriptive incentives for the Lost Opportunity Program are largely meant for new

construction or normal replacement projects. Prescriptive incentives are particularly well suited

for normal replacement projects, as the quick turnover and low administrati ve burden allow the

projects to be approved and processed without causing significant downtime to any of the

building’s equipment.

Prescriptive measures typically use a deemed savings approach to calculate savings. The

idea is to use average savings, so e ven if the actual savings for an individual customer differsOptimal Energy, Inc. from the deemed value , it becomes accurate over large volumes of measures . This works well

for measures such as lighting, with predictable savings, but for measures with high site

- specific

variab ility and lower expected volumes, some accuracy may be lost. Prescriptive incentives,

then, often involve a tradeoff between accuracy of estimated savings and the administrative

ease (for both the customer and the program administrator) of processing incen tives and

claiming savings. Ideally, as many measures as possible are offered prescriptively without

losing an unacceptable amount of accuracy in the claimed savings. There is some judgment

involved in where this line is drawn, but typical prescriptive inc entives for lost opportunity

projects may include:



###  Lighting Fixtures



###  Unitary HVAC



###  Chillers



###  Boilers and Furnaces



###  Commercial Kitchen Equipment

**Delivery Model**

Prescriptive incentives are set at a standard rate for a particular piece of technology. For

commer cial and industrial facilities, prescriptive incentives will most often take the form of

mail

- in rebates and will typically be filled out by the contractor or vendor working on the

project

. Mail

- in rebate applications should be designed to minimize the amo unt of effort and

time needed to correctly fill out the application

.

**Services/Incentives Offered**

Prescriptive incentives are a direct cash rebate, either right at the store, or after a customer

makes a purchase and mails in the application.

**Best Practice Features** 

Prescriptive incentives represent best practices primarily by reducing the amount of

administrative burden required to disburse rebates and claim savings. As such, prescriptive

incentives should be designed in a way to minimize the amount of work required by both the

customer and the program administrator (but especially the customer). Further, since certain

sub

- segments of the C&I sector, such as commercial kitchens and groceries, tend to have similar

types of technologies and efficiency opportuni ties, prescriptive forms can be designed that are

specifically targeted to these subsectors.



### Upstream **Incentives**

**Market Segment**

Upstream incentives are provided to equipment distributors and/or manufacturers rather

than retail customers. Upstream incentive s can typically be lower than standard incentives and

have the same effect on the ultimate product price, because the retail markup is done from a

lower base cost. Upstream incentives are completely invisible to the end customers, who are

often unaware tha t they are buying a discounted product. As such, they are available to any

market segment and building type that would buy the product in question

– the program

administrator has no control over who can buy and install the product. In this way, upstreamOptimal Energy, Inc. in centives significantly lower the hurdle for participation in the program, as they do not require

any action by the customer. For the Delaware analysis, we assumed that only fluorescent and

LED lighting will be offered upstream. However, if this program is successful, it can be

expanded to other technologies, such as unitary HVAC equipment.

**Delivery Model**

In an upstream model, cash payments are given directly to manufacturers and distributors

that make or distribute products meeting high efficiency performa nce criteria. The incentives

are given directly to the distributor/manufacturer, depending on the number of units

distributed to the market. The retail customer perceives the existence of the incentive only in the

lower cost of the product

– no additional work or paperwork has to be completed. The

upstream model allows the program administrator to leverage the manufacturers’ marketing

resources and greatly increase the penetration of a desired technology.

**Services/Incentives Offered**

Upstream incentives are cash incentives to distributors and manufacturers that reduce the

incremental cost of high efficiency products.

**Best Practice Features**

Upstream incentives greatly simplify the incentive process for the customer, often enough to

make them unaware that they are actually participating in the program. Further, upstream

incentives can achieve significant penetration more cheaply than downstream incentives, as the

discount gets applied before retail markup, and the program administrator is able to leverage

the pr e

- existing infrastructure of the region’s manufacturers and distributors. For these reasons,

other jurisdictions have seen enormous increases in the penetration rates of efficient technology

once program focus is moved from traditional customer

- focused dow nstream rebates to

upstream incentives

.



### Custom **Incentives**

**Market Segment**

Custom incentives cover every cost

- effective efficiency technology that is either too site

specific or not common enough to be covered prescriptively. Examples of technologies that

would receive custom incentives in the lost opportunity program include:



###  Newer types of LED fixtures



###  Large HVAC system overhauls



###  Comprehensive new construction and renovation work



###  Replacement industrial equipment

Although there are no size requirements for custom projects, due to the increased

administrative burden actual uptake will consist almost entirely of large and medium sized

customers. Further, just because the program offers prescriptive rebates for a given technology

or project type does not oblig ate the program administrator to treat it as a prescriptive project.

This is especially true for larger customers where the program administrator may want to treat

a project as custom if, for example, it is part of a larger whole building project or if the costs orOptimal Energy, Inc. savings are very different than the deemed estimates. In these cases, the account manager will

work with the customer to establish which approach works best both for the program and the

customer.

**Delivery Model**

The process for disbursing custom incentives begins when a custom application is received

from a customer, vendor, or, in the case of larger customers, an account manager. Engineers will

review the information on the application and prescreen the project to ensure that it is cost

effective . If not enough information is provided on the application, the program administer or

account manager may have to follow up with the customer. If the project passes the pre

screening, a site visit is conducted to ensure that the installation has not yet be gun and that

baseline conditions are accurately described by the application.

Next, an incentive amount is agreed upon, based on a negotiation between the account

manager and the customer. Depending on the results of the negotiation, and on the specifics o f

the project and the customer, the size of the incentive will typically end up at between 25% and

100% of the incremental cost. However, since incremental costs can be very difficult to estimate

for lost opportunity projects, the program administrator may prefer looking at the incentive

level in terms of energy saving. Typical incentives for custom projects range from $0.12 to $0.20

per annual kWh saved

. Further, the account manager may explore various financing options if

they feel it will help move the project forward.

Once an incentive amount is established, the project is installed, a post

- inspection site visit is

conducted to ensure the project was installed as designed, and then the incentive is disbursed.

**Services/Incentives Offered**

A custom incent ive is a sum of money designed to reduce the incremental cost of efficiency

projects, and thus spur more efficiency investment. The incentive amount will depend on the

project, and will depend on a negotiation between the customer and the account manager, who

will strive to set the incentive at an amount that will move the project forward but not overpay

for savings.

**Best Practice Features**

Because the process of applying for and receiving a custom incentive can be fairly complex,

best practice implementatio n simplifies this process for the customer as much as possible. For

large customers, their account managers can greatly simplify and guide the process and provide

significant help to the customer throughout the application process. Also, a custom program

w ill ideally be open to loans and other financing options in order to most effectively spur

efficiency investment.



### Technical and Design Assistance

**Market Segment (including Major End**

**- uses and Technologies Promoted)** 

Technical and design assistance is designe d for large customers with potential for large

savings, but who need experts with specialized knowledge to identify the opportunities and/orOptimal Energy, Inc. design the projects. For the Lost Opportunity Program, this may include design assistance,

energy modeling, or feas ibility studies.

**Delivery Model**

Technical and design assistance is typically delivered by third

- party firms with proven

expertise in the relevant field. There are ideally many consultants under existing contract with

the efficiency program administrator wi th a variety of expertise. This way, when technical

assistance is needed, the program administrator and the customer can quickly select an

appropriate consultant and get started on the study with very little paperwork needed and very

little delay between t he customer’s request for technical assistance and project initiation.

**Services/Incentives Offered**

Through pre

- existing contracts with a variety of consultants, the program offers customers

quick and easy access to pre

- vetted expertise in their field of ne ed. Further, the program will

pay for a certain portion of any technical or design study.

**Best Practice Features**

Because contracts are already in place between consultants and the program administrator,

there is very little delay between a customer’s reque st for assistance and project initiation.

Additionally, there are no required forms or paperwork for the customer to complete greatly

simplifying the participation process. As contractors are selected to cover a broad range of

expertise, market niches, and customer sub

- segments, customers are able to obtain customized,

expert assistance even if their needs are relatively uncommon. Finally, the available cost

- sharing

incentives promote the development of useful studies that can help achieve long

- term energy

efficiency improvements in customer facilities.Optimal Energy, Inc.



### LARGE BUSINESS RETROFIT

The Large Business Retrofit Program is first described on page 58 of the “Program Portfolio

Design” section of the report and consists of an umbrella program with several different

strategies or initiatives. The Large Business Retrofit strategies in aggregate were used to

develop program potential results. The Table below summarizes the energy this type of

program could save in Delaware over the 12-year study period as well as the budget required to

implement the program. The text following the table describes aspects of the specific program

strategies that fall under the Large Business Retrofit umbrella.

**Large Business Retrofit Program Summary**

**– Cumulative Annual Results in 2025** 

**Electric Energy**

**(MWh) Electric Demand** 

**(MW) Natural Gas** 

**(BBtu) Petroleum Fuels** 

**(BBtu) Total Budget** 

**2014**

**- 2025** 

**(Present Value**

**Millions$)**

790,502 103 2,446 263 265

The large business retrofit program attempts to encourage large businesses to replace or add

controls to their existing equipment in order to increase the efficiency of the facility. Unlike lost

opportunity projects, retrofit projects are not typically tim e

- sensitive, since the current

equipment is working as is. Because the customer is bearing the full installed cost of the project

rather than just the cost increment from standard equipment to efficient equipment, the

economics of retrofit projects may be more challenging than for lost opportunity projects.

Further, since the existing equipment is functioning, looking for possible efficiency

improvements may be low on the priority list of business owners. Nevertheless, there are many

opportunities for retro fits that can offer a return on investment equal to or higher than most

other investment opportunities.

The Large Business Retrofit Program has many different components that work together to

allow the program to help large commercial and industrial facil ities identify and implement

these retrofit opportunities. Account managers establish relationships with the largest facilities

to help them identify cost

- effective projects on an on

- going basis. Prescriptive and custom

incentives are used to help faciliti es overcome the first cost hurdle of efficiency, and custom

incentives may be specifically designed to let the project meet or exceed each facility’s

investment criteria. Technical and design assistance allows facilities to get audits and

commissioning rep orts designed to identify existing efficiency or examine the feasibility of a

specific project. Finally, market segmentation is used to meet the specific needs of different

commercial and industrial market sectors. These programs strategies will work toget her to

achieve significant savings from C&I retrofit projects, and each is described in greater detail

below.Optimal Energy, Inc. 

### Account Management

**Market Segment (including Major End**

**- uses and Technologies Promoted)** 

In a typical utility, a large portion of total electric sales will be to a small number of very

large customers. These large customers typically provide substantially greater savings at a

lower cost than small to medium customers. Further, it is very hard for a utility to achieve

significant savings in proporti on of its total load without effectively addressing these customers.

Therefore, a ccount managers will be assigned to all large C&I customers. Account managers are

agnostic to end

- use, technology, or even specific program, and will work with the customer to

help him take full advantage of the full range of the efficiency program’s offerings. The account

manager will work with the customer to facilitate any type of cost

- effective efficiency project,

whether it be a lighting retrofit, design for a renovation, or retro

- commissioning on inefficient

existing buildings.

**Delivery Model**

Account managers will form ongoing relationships with the customer. The account manager

is the primary point of contact between the customer and the efficiency program, and will help

the customer develop efficiency plans, navigate the incentive process, and receive technical

assistance. As a result of the ongoing relationship, the account manager will get to know the

customer’s specific needs and barriers to efficiency investment, and so will be able to effectively

identify possible lost opportunity projects when they occur, and structure incentives in a way to

help overcome the barriers of each specific customer.

**Services/Incentives Offered**

Account management is not so much a service in itself as a means to easier access to the

services offered through the rest of the program. The account manager acts largely as a

salesperson , selling the services of the programs to large customers and generating projects for

the program. However, s he may also ease the process of applying for and receiving incentives,

and her close knowledge of the customer allows her to structure the incentives and offerings in

the most effective and efficient way possible.

**Best Practice Features**

Account managers will provide specialized outreach to the largest customers, providing a

single point of contact in order to streamline the process of applying for technical assistance,

incentive offers, financing, or other program offerings. The account managers’ one

- on

- one

r elationships to their large customers will also enable them to provide specialized marketing

and sales pitches for efficiency and help design incentive offers that integrate with the

customers’ business plans. Further, this familiarity allows the account m anager to offer

personalized incentives, designed to be generous enough to spur the project into completion

without overpaying for the savings.



### Prescriptive Incentives

**Market Segment (including Major End**

**- uses and Technologies Promoted)** 

In addition to the prescriptive measures offered under the Lost Opportunity Program,

prescriptive incentives geared toward retrofi t projects such as VFDs, lighting controls, pipeOptimal Energy, Inc. insulation, and other controls and add

- on measures will be offered under the Large Business

Retrofit Program

.

Prescriptive measures typically used a deemed savings approach to calculate savings. The

idea is to use an average savings, so even if the actual savings for an individual customer differs

from the deemed value , it becomes accurate over large volumes of measures . This works well

for measures such as lighting, with predictable savings, but for measures with high site specific

variability and lower expected volumes, some accuracy may be lost. Prescriptive incentives,

then, of ten involve a tradeoff between accuracy of savings claims and the administrative ease

(for both the customer and the program administrator) of processing incentives and claiming

savings. Ideally, as many measures as possible are offered prescriptively, wit hout losing an

unacceptable amount of accuracy in the savings claims. There is some judgment involved in

where this line is drawn, but typical prescriptive incentives for retrofit projects may include:



###  Lighting fixtures



###  Lighting relamp/reballast



###  Lighting c ontrols



###  HVAC controls



###  VFDs



###  Pipe/boiler/water heater insulation



###  Low

- flow valves



###  ECMs for refrigeration



###  Refrigeration door controls



###  Strip curtains/night covers for refrigerated cases

**Delivery Model**

Prescriptive incentives are set at a standard rate for a par ticular piece of technology. For

commercial and industrial facilities, prescriptive incentives will most often take the form of

mail

- in rebates, and will typically be filled out by the contractor or vendor working on the

project. Mail

- in rebate application s should be designed to minimize the amount of effort and

time needed to correctly fill out the application.

**Services/Incentives Offered**

Prescriptive incentives are a direct cash rebate, either right at the store, or after a customer

makes a purchase and m ails in the application.

**Best Practice Features**

Prescriptive incentives represent best practices primarily by reducing the amount of

administrative burden required to disburse rebates and claim savings. As such, prescriptive

incentives should be designed in a way to minimize amount of work required by both the

customer and the program administrator (but especially the customer). Further, since certain

sub

- segments of the C&I sector, such as commercial kitchens and groceries, tend to have similar

types of t echnologies and efficiency opportunities, prescriptive forms can be designed that are

specifically targeted to these subsectors.Optimal Energy, Inc. 

### Custom Incentives

**Market Segment (including Major End**

**- uses and Technologies Promoted)** 

Custom incentives cover every cost

- effect ive efficiency technology that is either too site

specific or not common enough to be covered prescriptively. Examples of technologies that

would receive custom incentives include:



###  Newer types of LED fixtures



###  Industrial process work



###  Insulation/air sealing



###  Comprehensive HVAC work

Although there are no eligibility requirements for custom projects, due to the increased

administrative burden actual uptake will consist almost entirely of large and medium sized

customers. Further, just because the program offers prescriptive rebates for a customer does not

obligate the program administrator to treat it as a prescriptive project. This is especially true for

larger customers, where the program administrator may want to treat a project as custom if, for

example, it i s part of a larger whole building project or if the costs or savings are very different

than the deemed estimates. In these cases the program administrator will work with the

customer to establish which approach works best both for the program and the cust omer.

**Delivery Model**

The process for disbursing custom incentives begins when a custom application is received

from a customer, vendor, or, in the case of larger customers, an account manager. Engineers will

review the information in the application and p rescreen the project to ensure that it passes cost

effectiveness. If not enough information is provided in the application, the program administer

or account manager may have to follow up with the customer. If the project passes the pre

screening, a site v isit is conducted to ensure that the installation has not yet begun and that

baseline conditions are accurately described by the application.

Next, an incentive amount is agreed upon, based on a negotiation between the account

manager and the customer. Dep ending on the results of the negotiation, and on the specifics of

the project and the customer, the size of the incentive will typically end up at between 10%

- 50% of the project cost. The account manager may also explore various financing options.

Once a n incentive amount is established, the project is installed, a post

- inspection site visit is

conducted to ensure the project was installed as designed, and then the incentive is disbursed.

**Services/Incentives Offered**

A custom incentive is a sum of money de signed to reduce the incremental cost of efficiency

projects, and thus spur more efficiency investment. The incentive amount will depend on the

project, and will depend on a negotiation between the customer and the account manager, who

will strive to set t he incentive at an amount that will move the project forward but not overpay

for savings.Optimal Energy, Inc. **Best Practice Features**

Because the process of applying for and receiving a custom incentive can be fairly complex,

best practice implementation simplifies this proces s for the customer as much as possible. For

large customers, their account managers can greatly simplify and guide the process and provide

significant help to the customer throughout the application process. Also, a custom program

will ideally be open to l oans and other financing options in order to most effectively spur

efficiency investment.



### Technical and Design Assistance

**Market Segment (including Major End**

**- uses and Technologies Promoted)** 

Technical and design assistance is designed for large customers w ith potential for large

savings but who need experts with specialized knowledge to identify the opportunities and/or

design the projects. This may include ASHRAE audits, feasibility studies, system optimization

studies, or retro

- commissioning. For industrial customers, it will likely entail an industrial

process study by a contractor with particular expertise in the applicable industrial segment.

**Delivery Model**

Technical and design assistance will be delivered by third party firms with proven expert ise

in the relevant field. There will ideally be many consultants under existing contract with the

efficiency program administrator with a variety of expertise. This way, when technical

assistance is needed, the program administrator and the customer can q uickly select an

appropriate consultant and get started on the study, with very little paperwork needed, and

little delay between the customer’s request for technical assistance and project initiation.

**Services/Incentives Offered**

Through pre

- existing cont racts with a variety of consultants, the program offers

customers quick and easy access to pre

- vetted expertise in their field of need. Further, the

program will pay for a certain portion of any technical or design study.

**Best Practice Features**

Because con tracts are already in place between consultants and the program administrator

, there is very little delay between a customer’s request for assistance and project initiation.

Additionally, there are no required forms or paperwork for the customer to complet e greatly

simplifying the participation process. As contractors are selected to cover a broad range of areas

of expertise, market niches and customer sub

- segments that may not be adequately served by

other energy efficiency programs are able to obtain cust omized, expert assistance. Finally, the

available cost

- sharing incentives promote the development of useful studies that can help

achieve long

- term energy efficiency improvements in customer facilities.



### Market Segmentation

**Market Segment (including Major E nd** 

**- uses and Technologies Promoted)** 

Because the C&I sector contains so many sub

- segments, each with its own unique set of

market barriers and program needs, it is inevitable that a standard set of program offerings will

not achieve any significant penetrati on among certain segments. Market segmentation, then,Optimal Energy, Inc. aims to customize the program approach to specific segments that would otherwise be

underserved by the program. These segments will include:



###  Municipalities



###  Hospitals



###  Commercial Real Estate



###  Commercial Ki tchens



###  Hospitality

**Delivery Model**

Market segmentation will entail will take the form of marketing and initiatives targeted

directly to the specific needs of each segment. This may entail some specialized research to

determine what specific barriers are preventing each segment from participating in the

efficiency program, and how to best reach them. The delivery model will likely vary from

segment to segment, depending on what is expected to work best for each particular segment.

**Services/Incentives Offer ed** 

Like the delivery model, the specific services and incentive provided will depend on the

specific market segment being addressed. For example, the primary barrier to efficiency in

commercial real estate is typically the split incentive barrier, where th e landlord pays for capital

improvements but the renter pays the monthly utility bills. In this case, a program may take an

approach to market and support green leases, which align the financial and energy incentives of

building owners and tenants. By cont rast, the primary barrier for municipalities is typically the

first cost of the efficiency investment. A primary service for municipalities, then, may be

financing arrangements so that there is a positive cash

- flow from the first year of the efficiency

pro ject.

**Best Practice Features**

Market segmentation reflects best practices by providing specialized approaches to

marketing and delivery that suit specific market segments that would otherwise be

underserved. Done correctly, market segmentation can significa ntly increase participation and

achieve highly cost

- effective savings that would otherwise go unrealized.Optimal Energy, Inc. 

### SMALL BUSINESS RETRO **FIT**

The Small Business Retrofit Program is first described on page 60 of the “Program Portfolio

Design” section of the report an d is one of the program strategies used to develop program

potential results. The Table below summarizes the energy this type of program could save in

Delaware over the 12

- year study period as well as the budget required to implement the

program.

**Small Bus iness Retrofit**  **Program Summary**

**– Cumulative Annual Results in 2025** 

**Electric Energy**

**(MWh) Electric Demand** 

**(MW) Natural Gas** 

**(BBtu) Petroleum Fuels** 

**(BBtu) Total Budget** 

**2014**

**- 2025** 

**(Present Value**

**Millions$)**

219,746 33 290 70 90

**Market Segment**

The Small Business Retrofit program is specifically aimed at commercial buildings under a

certain size threshold. Due to time and financial constraints, these customers tend to have very

low participation in traditional prescriptive and custom programs. The nature o f the program

means that the majority of the savings will come from lighting and other easy to install

measures such as boiler and pipe insulation, faucet aerators, and night covers for refrigeration.

However, the installation contractor will ideally look for other more complex opportunities,

such as HVAC in need of replacement or low insulation, and refer the customer to more

specialized contractors for further action through prescriptive or custom incentives.

**Delivery Model**

The Small Business Direct Insta ll program begins with a free walkthrough audit of a small

commercial facility. The audit is typically done by a third

- party contractor who has a pre

identified list of common measures and prices that was determined at the time of bid. During

the walkthrou gh, the contractor will identify potential efficiency measures that are applicable to

the facility in question. If the customer approves of the recommended measures, the contractor

will install them in the same visit, at a large discount

– usually about 70 % of the total installed

cost. Ideally, during the audit the contractor will also be looking for efficiency opportunities

that are not on the list, such as HVAC units that need replacement. These opportunities may be

on the list of measures for the contrac tor to check, but will not have associated pricing, as a

separate contractor is needed for installation. In the event that these further opportunities are

identified, they will be referred to more specialized contractors, who can work with the

program admi nistrator to get prescriptive or custom incentives through one of the other

programs.

**Services/Incentives Offered**

The services offered through the Small Business Direct Install program consist of a free

walkthrough audit, along with heavy discounts (around 70% of the full cost) for common, easy

to install measures identified during the audit. A best practice implementation of the programOptimal Energy, Inc. would also include on

- bill, low/no

- interest financing for the remaining 30% of the measure

costs.

**Best Practice Features**

This program greatly boosts participation among small commercial facilities, which are

otherwise very underserved by traditional program offering. It combines free on

- site audits

with high financial incentives and easy application processes to achieve sign ificant savings from

high efficiency lighting and other easy

- to

- install efficiency measures. The program will ideally

also include financial options such as on

- bill low/no

- interest financing.Optimal Energy, Inc. 

## APPENDIX H **: ENERGY SALES DISAGGR**  **EGATION, UPDATED FRO M PHASE 1** **INDUSTRIAL ELECTRIC SALES**

**Existing End Use Sales Forecast for 2014, MWh at Meter**

Agriculture Mining Construction Food mfg Beverage &

tobacco

product mfg Textile mills Textile product

mills Wood product

mfg Paper mfg Printing &

related support

activities Petroleum &

coal products

mfg **Total**

Motors-Pumps 8,005 406 0 14,254 2,146 229 210 724 25,547 273 37,922 89,714

Motors-Fans and Blowers 6,404 135 0 6,519 2,441 148 210 1,809 16,109 774 6,106 40,654

Motors-Compressed Air 1,601 75 0 6,693 1,073 175 140 543 3,742 890 9,834 24,765

Motors-Material Handling 1,601 546 0 5,302 7,512 1,009 980 6,078 6,021 4,492 1,671 35,211

Motors-Material Processing 3,202 546 0 22,685 9,658 986 1,610 4,775 17,329 4,792 7,134 72,718

Motors-Refrigeration 3,202 0 0 25,553 16,920 435 415 455 4,068 774 450 52,272

Motors-Other Motors 0 0 0 5,823 2,113 0 0 0 8,624 0 1,221 17,782

Process Heating-Drying and Curing 1,601 0 0 28 0 222 158 821 1,649 1,092 1,212 6,783

Process Heating-Heat Treating 0 0 0 0 0 0 0 0 0 0 0 0

Process Heating-Heating 1,601 0 0 3,325 1,046 20 0 0 798 0 3,232 10,023

Process Heating-Melting and Casting 0 0 0 0 0 0 0 0 0 0 0 0

Other-HVAC 0 0 0 8,197 6,086 677 702 1,067 4,056 3,476 2,421 26,681

Other-Lighting 4,803 190 0 13,391 4,467 740 491 1,130 3,929 2,174 1,858 33,171

Other-Electro-Chemical Processes 0 0 0 163 55 4 20 3 1,717 34 44 2,040

Other-Other 0 0 21,686 8,332 0 290 0 0 5,986 967 3,766 41,027

**Total** 32,019 1,897 21,686 120,265 53,518 4,934 4,934 17,405 99,576 19,736 76,872 452,842

**New Construction Sales for 2014, MWh at Meter**

Agriculture Mining Construction Food mfg Beverage &

tobacco

product mfg Textile mills Textile product

mills Wood product

mfg Paper mfg Printing &

related support

activities Petroleum &

coal products

mfg **Total**

Motors-Pumps 329 17 0 586 88 9 9 30 1,050 11 1,558 3,686

Motors-Fans and Blowers 263 6 0 268 100 6 9 74 662 32 251 1,670

Motors-Compressed Air 66 3 0 275 44 7 6 22 154 37 404 1,018

Motors-Material Handling 66 22 0 218 309 41 40 250 247 185 69 1,447

Motors-Material Processing 132 22 0 932 397 41 66 196 712 197 293 2,988

Motors-Refrigeration 132 0 0 1,050 695 18 17 19 167 32 18 2,148

Motors-Other Motors 0 0 0 239 87 0 0 0 354 0 50 731

Process Heating-Drying and Curing 66 0 0 1 0 9 7 34 68 45 50 279

Process Heating-Heat Treating 0 0 0 0 0 0 0 0 0 0 0 0

Process Heating-Heating 66 0 0 137 43 1 0 0 33 0 133 412

Process Heating-Melting and Casting 0 0 0 0 0 0 0 0 0 0 0 0

Other-HVAC 0 0 0 337 250 28 29 44 167 143 99 1,096

Other-Lighting 197 8 0 550 184 30 20 46 161 89 76 1,363

Other-Electro-Chemical Processes 0 0 0 7 2 0 1 0 71 1 2 84

Other-Other 0 0 891 342 0 12 0 0 246 40 155 1,686

**Total** 1,316 78 891 4,941 2,199 203 203 715 4,091 811 3,158 18,606

**Total Elec Sales (MWh)** 33,335 1,975 22,577 125,206 55,716 5,137 5,137 18,120 103,667 20,547 80,030 471,447**INDUSTRIAL GAS SALES**

**Existing Sales Forecast for 2014 (MMBtu)**

Agriculture Mining Construction Food mfg Beverage &

tobacco product

mfg Textile mills Textile product

mills Wood product

mfg Paper mfg Printing & related

support activities Petroleum & coal

products mfg Pharmaceutical &

medicine mfg

Total 112,066 21,488 85,203 965,608 429,694 22,409 22,409 34,750 518,544 89,636 1,643,709 5,518,893

**New Construction Sales Forecast for 2014 (MMBtu)**

Agriculture Mining Construction Food mfg Beverage &

tobacco product

mfg Textile mills Textile product

mills Wood product

mfg Paper mfg Printing & related

support activities Petroleum & coal

products mfg Pharmaceutical &

medicine mfg

Total 4,604 883 3,501 39,673 17,654 921 921 1,428 21,305 3,683 67,534 226,750

**Total Gas Sales (MMBtu)** 116,670 22,371 88,704 1,005,281 447,348 23,330 23,330 36,178 539,849 93,319 1,711,243 5,745,643

**INDUSTRIAL GAS SALES (Cont.)**

**Existing Sales Forecast for 2014 (MMBtu)**

All other chemical

products Plastics & rubber

products mfg Nonmetallic

mineral product

mfg Iron & steel mills

& ferroalloy mfg Steel product mfg

from purchased

steel Fabricated metal

product mfg Machinery mfg Computer &

electronic product

mfg Electrical

equipment,

appliance, &

component mfg Transportation

equipment mfg Furniture &

related product

mfg Miscellaneous

mfg **Total**

Total 3,638,344 69,208 1,065,717 211,066 211,066 121,308 22,279 47,043 22,158 40,347 71,018 125,571 15,109,538

**New Construction Sales Forecast for 2014 (MMBtu)**

All other chemical

products Plastics & rubber

products mfg Nonmetallic

mineral product

mfg Iron & steel mills

& ferroalloy mfg Steel product mfg

from purchased

steel Fabricated metal

product mfg Machinery mfg Computer &

electronic product

mfg Electrical

equipment,

appliance, &

component mfg Transportation

equipment mfg Furniture &

related product

mfg Miscellaneous

mfg **Total**

Total 149,485 2,843 43,786 8,672 8,672 4,984 915 1,933 910 1,658 2,918 5,159 620,792

**Total Gas Sales (MMBtu)** 3,787,830 72,051 1,109,503 219,738 219,738 126,292 23,195 48,976 23,069 42,005 73,936 130,730 15,730,331**INDUSTRIAL PETROFUEL SALES**

**Existing Sales Forecast for 2014 (MMBtu)**

Agriculture Mining Construction Food mfg Beverage &

tobacco product

mfg Textile mills Textile product

mills Wood product

mfg Paper mfg Printing & related

support activities Petroleum & coal

products mfg Pharmaceutical &

medicine mfg

Total 106,849 677 516,085 6,111 2,719 324 324 2,135 25,564 1,295 557,322 233,314

**New Construction Sales Forecast for 2014 (MMBtu)**

Agriculture Mining Construction Food mfg Beverage &

tobacco product

mfg Textile mills Textile product

mills Wood product

mfg Paper mfg Printing & related

support activities Petroleum & coal

products mfg Pharmaceutical &

medicine mfg

Total 4,390 28 21,204 251 112 13 13 88 1,050 53 22,898 9,586

**Total PF Sales (MMBtu)** 111,239 705 537,289 6,362 2,831 337 337 2,223 26,614 1,348 580,220 242,900

**INDUSTRIAL PETROFUEL SALES (Cont.)**

**Existing Sales Forecast for 2014 (MMBtu)**

All other chemical

products Plastics & rubber

products mfg Nonmetallic

mineral product

mfg Iron & steel mills

& ferroalloy mfg Steel product mfg

from purchased

steel Fabricated metal

product mfg Machinery mfg Computer &

electronic product

mfg Electrical

equipment,

appliance, &

component mfg Transportation

equipment mfg Furniture &

related product

mfg Miscellaneous

mfg **Total**

Total 153,813 1,164 46,150 7,449 7,449 941 190 4,222 1,555 337 1,026 1,814 **1,678,829**

**New Construction Sales Forecast for 2014 (MMBtu)**

All other chemical

products Plastics & rubber

products mfg Nonmetallic

mineral product

mfg Iron & steel mills

& ferroalloy mfg Steel product mfg

from purchased

steel Fabricated metal

product mfg Machinery mfg Computer &

electronic product

mfg Electrical

equipment,

appliance, &

component mfg Transportation

equipment mfg Furniture &

related product

mfg Miscellaneous

mfg **Total**

Total 6,320 48 1,896 306 306 39 8 173 64 14 42 75 **68,977**

**Total PF Sales (MMBtu)** 160,132 1,212 48,046 7,755 7,755 980 197 4,396 1,619 351 1,068 1,889 1,747,806**COMMERCIAL AND RESIDENTIAL ELECTRIC SALES**

**Existing End Use Sales Forecast for 2014, MWh at Meter**

Office Retail Grocery Warehouse Education Health Lodging Restaurant Data Center Multifamily

Com Streetlighting Other Com Single Family Multifamily

Res Single Family

Low Income **Total**

Indoor Lighting 315,374 115,268 56,807 93,016 97,327 66,131 33,088 53,231 1,807 0 0 252,384 239,628 24,213 117,050 1,465,323

Outdoor Lighting 11,066 5,424 2,144 0 3,140 2,543 1,614 1,947 0 0 35,977 12,943 0 0 0 76,798

Cooling 164,764 68,325 28,226 6,353 60,697 92,577 25,674 39,004 45,173 0 0 139,980 217,980 22,026 106,476 1,017,256

Ventilation 84,753 39,170 9,475 22,096 73,257 26,622 16,260 17,711 18,069 0 0 91,350 63,381 6,404 30,959 499,508

Water Heating 5,533 12,205 1,072 2,448 21,977 1,272 0 2,597 0 0 0 6,471 328,278 33,171 160,353 575,375

Refrigeration 33,197 20,341 153,271 24,478 21,977 8,902 8,070 64,267 0 0 0 58,243 274,192 27,706 133,934 828,577

Space Heating 16,061 5,060 1,421 5,820 13,606 5,432 1,645 4,305 0 0 0 21,054 380,812 38,479 186,014 679,710

Plug Loads 143,855 8,137 4,823 4,896 18,837 15,261 4,035 3,895 0 0 0 38,828 215,798 21,805 105,410 585,581

Food Service/Prep 0 0 3,215 0 9,419 5,087 5,649 67,512 0 0 0 19,414 52,578 5,313 25,683 193,870

Kitchen/Laundry 0 0 0 0 0 0 0 0 0 0 0 0 158,382 16,004 77,364 251,750

Miscellaneous 5,533 16,273 7,503 14,687 62,792 27,978 6,456 7,790 0 0 0 58,243 447,814 45,249 218,742 919,059

Data Center 0 0 0 0 0 0 0 0 115,644 0 0 0 0 0 0 115,644

**Total** 780,136 290,203 267,956 173,794 383,029 251,806 102,491 262,260 65,049 0 35,977 698,910 2,378,842 240,369 1,161,984 7,092,807

**New Construction Sales for 2014, MWh at Meter**

Office Retail Grocery Warehouse Education Health Lodging Restaurant Data Center Multifamily

Com Streetlighting Other Com Single Family Multifamily

Res Single Family

Low Income **Total**

Indoor Lighting 12,957 4,736 2,334 3,822 3,999 2,717 1,359 2,187 74 0 0 10,369 3,595 306 1,756 50,212

Outdoor Lighting 455 223 88 0 129 105 66 80 0 0 1,478 532 0 0 0 3,155

Cooling 6,770 2,807 1,160 261 2,494 3,804 1,055 1,603 1,856 0 0 5,751 3,270 279 1,597 32,705

Ventilation 3,482 1,609 389 908 3,010 1,094 668 728 742 0 0 3,753 951 81 464 17,880

Water Heating 227 501 44 101 903 52 0 107 0 0 0 266 4,924 420 2,405 9,951

Refrigeration 1,364 836 6,297 1,006 903 366 332 2,640 0 0 0 2,393 4,113 351 2,009 22,609

Space Heating 660 208 58 239 559 223 68 177 0 0 0 865 5,712 487 2,790 12,047

Plug Loads 5,910 334 198 201 774 627 166 160 0 0 0 1,595 3,237 276 1,581 15,060

Food Service/Prep 0 0 132 0 387 209 232 2,774 0 0 0 798 789 67 385 5,773

Kitchen/Laundry 0 0 0 0 0 0 0 0 0 0 0 0 2,376 203 1,161 3,739

Miscellaneous 227 669 308 603 2,580 1,150 265 320 0 0 0 2,393 6,717 573 3,281 19,087

Data Center 0 0 0 0 0 0 0 0 4,751 0 0 0 0 0 0 4,751

**Total** 32,053 11,923 11,009 7,141 15,737 10,346 4,211 10,775 2,673 0 1,478 28,716 35,684 3,042 17,430 192,217

**Total Sales (MWh) 812,188**  **302,127 278,966**  **180,934 398,766**  **262,152 106,702**  **273,035 67,722**  **0 37,455**  **727,626 2,414,526**  **243,411 1,179,414**  **7,285,024 COMMERCIAL AND RESIDENTIAL GAS SALES** 

**Existing Sales Forecast for 2014 (MMBtu)**

Office Retail Grocery Warehouse Education Health Lodging Restaurant Data Center Multifamily

Com Streetlighting Other Com Single Family Multifamily

Res Single Family

Low Income **Total**

Space Heating 1,413,759 1,154,583 133,362 165,465 345,420 427,234 77,100 146,609 0 799,197 0 94,355 3,314,698 236,707 2,070,462 10,378,951

Water Heating 79,908 116,687 9,879 5,963 61,742 232,466 149,382 152,039 0 320,207 0 4,529 1,363,035 97,336 851,393 3,444,564

Food Service/Prep 18,440 147,394 39,515 0 8,343 31,414 16,866 247,063 0 7,326 0 1,510 431,954 30,846 269,811 1,250,482

Miscellaneous 141,376 202,666 0 0 31,705 72,253 0 0 0 39,730 0 7,297 120,366 8,595 75,184 699,172

Cooling 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

-

**Total** 1,653,483 1,621,329 182,755 171,428 447,210 763,367 243,347 545,710 0 1,166,461 0 107,691 5,230,052 373,485 3,266,851 15,773,169

**New Construction Sales Forecast for 2014 (MMBtu)**

Office Retail Grocery Warehouse Education Health Lodging Restaurant Data Center Multifamily

Com Streetlighting Other Com Single Family Multifamily

Res Single Family

Low Income **Total**

Space Heating 58,086 47,437 5,479 6,798 14,192 17,553 3,168 6,024 0 32,836 0 3,877 49,722 2,995 31,058 279,226

Water Heating 3,283 4,794 406 245 2,537 9,551 6,138 6,247 0 13,156 0 186 20,446 1,232 12,771 80,992

Food Service/Prep 758 6,056 1,624 0 343 1,291 693 10,151 0 301 0 62 6,480 390 4,047 32,194

Miscellaneous 5,809 8,327 0 0 1,303 2,969 0 0 0 1,632 0 300 1,806 109 1,128 23,381

Cooling 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

-

**Total** 67,935 66,614 7,509 7,043 18,374 31,364 9,998 22,421 0 47,925 0 4,425 78,453 4,726 49,004 415,793

**Total Sales (MMBtu)** 1,721,418 1,687,943 190,264 178,471 465,584 794,731 253,346 568,131

- 1,214,386

- 112,115 5,308,505 378,212 3,315,855 16,188,962

**COMMERCIAL AND RESIDENTIAL PETROFUEL SALES**

**Existing Sales Forecast for 2014 (MMBtu)**

Office Retail Grocery Warehouse Education Health Lodging Restaurant Data Center Multifamily

Com Streetlighting Other Com Single Family Multifamily

Res Single Family

Low Income **Total**

Space Heating 326,964 326,609 36,815 34,533 90,314 96,608 49,354 109,931 0 182,989 0 21,694 2,725,219 0 1,383,062 5,384,092

Water Heating 0 7,685 866 813 4,014 32,203 0 2,587 0 61,508 0 510 255,759 0 129,799 495,743

Food Service/Prep 0 0 0 0 0 0 0 0 0 0 0 0 62,943 0 31,944 94,888

Miscellaneous 21,798 7,685 866 813 0 32,203 1,974 2,587 0 1,539 0 510 377,007 0 191,333 638,314

Cooling 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

-

**Total** 348,761 341,979 38,548 36,158 94,328 161,013 51,328 115,104 0 246,036 0 22,715 3,420,929 0 1,736,138 6,613,037

**New Construction Sales Forecast for 2014 (MMBtu)**

Office Retail Grocery Warehouse Education Health Lodging Restaurant Data Center Multifamily

Com Streetlighting Other Com Single Family Multifamily

Res Single Family

Low Income **Total**

Space Heating 13,434 13,419 1,513 1,419 3,711 3,969 2,028 4,517 0 7,518 0 891 40,880 0 20,747 114,044

Water Heating 0 316 36 33 165 1,323 0 106 0 2,527 0 21 3,837 0 1,947 10,311

Food Service/Prep 0 0 0 0 0 0 0 0 0 0 0 0 944 0 479 1,423

Miscellaneous 896 316 36 33 0 1,323 81 106 0 63 0 21 5,655 0 2,870 11,400

Cooling 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

-

**Total** 14,329 14,051 1,584 1,486 3,876 6,615 2,109 4,729 0 10,109 0 933 51,316 0 26,043 137,179

**Total Sales (MMBtu)** 363,090 356,030 40,131 37,644 98,203 167,629 53,437 119,833

- 256,145

- 23,648 3,472,244

- 1,762,181 6,750,216Optimal Energy, Inc. 

## APPENDIX I **: MEASURE CHARACTERIZA**  **TIONS , UPDATED FROM PHASE**  **1**Optimal Energy, Inc. Notes on Measure Characterizations:

1. The Data Source numbers refer to the indexed citations provided in Appendix J,

Bibliography

2. Primary Fuel Abbreviations:

E = Electric

G = Natural Gas

P = Petroleum Fuels

3. Market Abbreviations:

NC = New Construction

Reno = Renovation

Repl = Natural Replacement

Ret = Retrofit

4. All costs are presented in 2013$**Commercial Electric Measures Data Sources** 

**Primary Fuel End**

**Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre** 

**mental**

**Cost/kWh**

**Saved Annual** 

**Fossil**

**Fuel**

**Savings**

**(MMBtu**

**per kWh**

**saved) Measure** 

**Life**

**Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Indoor Lighting Ret HPT8 lamp/ballast (T12

baseline) Install High Performance T8 lamps and low-ballast factor

electronic ballast in existing fixtures, replacing T12 lighting EE T12 with EEMAG ballast 15 32.4% $ 0.67 1 168, 168 1

Indoor Lighting Ret HPT8 lamp/ballast (T8

baseline) Install High Performance T8 lamps and low-ballast factor

electronic ballast in existing fixtures, replacing standard T8

lighting Standard T8s 15 16.4% $ 1.67 1 168, 168 1

Indoor Lighting Repl Reduce W T8

lamp/ballast (for HPT8) When replacing a High Performance T8 and ballast, replace with

a 25 or 28 Watt lamp and high performance ballast as opposed to

a HP 32 watt lamp. 32 Watt High Performance T8s 15 13.3% $ - 1 168, 87 68

Indoor Lighting Ret Reduce W T8

lamp/ballast (for HPT8) When replacing a High Performance T8 and ballast, replace with

a 25 or 28 Watt lamp and high performance ballast as opposed to

a HP 32 watt lamp. 32 Watt High Performance T8s 15 13.3% $ 2.71 1 168, 87 68

Indoor Lighting Repl Reduce W T8

lamp/ballast (for stnd

T8) When replacing a Standard T8, replace with a 25 or 28 watt T8

and CEE certified ballast as opposed to a standard lamp and

ballast 32 Watt Standard T8 lamp and ballast 15 16.4% $ 0.71 1 168, 168 68

Indoor Lighting Ret Reduce W T8

lamp/ballast (for stnd

T8) When replacing a Standard T8, replace with a 25 or 28 watt T8

and CEE certified ballast as opposed to a standard lamp and

ballast 32 Watt Standard T8 lamp and ballast 15 16.4% $ 1.62 1 168, 168 68

Indoor Lighting Repl Reduce W T8 relamp

(for HPT8) When replacing a High Performance T8, replace with a 25 or 28

Watt lamp as opposed to a HP 32 watt lamp. 32 Watt High Performance T8 lamp and ballast 5 10.6% $ - 1 168, 87 68

Indoor Lighting Ret Reduce W T8 relamp

(for HPT8) When replacing a High Performance T8, replace with a 25 or 28

Watt lamp as opposed to a HP 32 watt lamp. 32 Watt High Performance T8 lamp and ballast 5 10.6% $ 2.42 1 168, 87 68

Indoor Lighting Repl Reduce W T8 relamp

(for stnd T8) When replacing a Standard T8, replace with a 25 or 28 Watt lamp

as opposed to a HP 32 watt lamp. 32 Watt High Performance T8 lamp 5 21.9% $ 0.14 1 168, 168 68

Indoor Lighting Ret Reduce W T8 relamp

(for stnd T8) When replacing a Standard T8, replace with a 25 or 28 Watt lamp

as opposed to a HP 32 watt lamp. 32 Watt Standard T8 5 21.9% $ 0.43 1 168, 168 68

Indoor Lighting Ret HPT8 fixture (T12

baseline) High Performance T8 fixture w/ Electronic Ballast and tandem

wiring where appropriate, replacing T12 EE T12 with EE Mag ballast 15 32.4% $ 1.07 1 168, 168 68

Indoor Lighting NC, Reno,

Repl HPT8 fixture (T8

baseline) High Performance T8 fixture w/ Electronic Ballast and tandem

wiring where appropriate, replacing standard T8 Standard T8s 15 16.4% $ 0.76 1 168, 168 1

Indoor Lighting Ret HPT8 fixture (T8

baseline) High Performance T8 fixture w/ Electronic Ballast and tandem

wiring where appropriate, replacing standard T8 Standard T8s 15 16.4% $ 2.67 1 168, 168 68

Indoor Lighting NC, Reno,

Repl HE fixtures/design Tier I

(2009 baseline) High efficiency fixtures and design to reduce lighting power

density. Generally reflects mid-level efficiency, typically including

high efficiency fixtures and improved fixture layout, including use

of indirect lighting. Does not include controls, which are covered

elsewhere. Baseline of IECC 2009. IECC 2009 15 21.4% $ 0.37 168 168, 50 69

Indoor Lighting NC, Reno,

Repl HE fixtures/design Tier

II High efficiency fixtures and design to reduce lighting power

density. Generally reflects state-of-the-art systems to achieve

maximum reductions. This can include numerous things,

potentially including direct/indirect, auto dimming, low glare, T5s,

specular reflectors, task lighting, distribution technologies (eg,

light pipes, fiber optics), etc. Does not include controls, which are

covered elsewhere. HE fixtures/design Tier I 15 33.1% $ 0.75 168 168, 52 69

Indoor Lighting Ret HE fixtures/design Tier

II High efficiency fixtures and design to reduce lighting power

density. Generally reflects state-of-the-art systems to achieve

maximum reductions. This can include numerous things,

potentially including direct/indirect, auto dimming, low glare, T5s,

specular reflectors, task lighting, distribution technologies (eg,

light pipes, fiber optics), etc. Does not include controls, which are

covered elsewhere. HE fixtures/design Tier I 15 45.0% $ 1.59 168 0 69

Indoor Lighting NC, Reno,

Repl HE fixtures/design Tier

III Emerging technologies (e.g., LEDs, Organic LEDs, daylighting)

combined with emphasis on increased overall system efficiency. HE fixtures/design Tier II 15 40.7% $ 0.75 168 168, 39 69**Primary Fuel End**

**Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre** 

**mental**

**Cost/kWh**

**Saved Annual** 

**Fossil**

**Fuel**

**Savings**

**(MMBtu**

**per kWh**

**saved) Measure** 

**Life**

**Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Indoor Lighting Ret HE fixtures/design Tier

III Emerging technologies (e.g., LEDs, Organic LEDs, daylighting)

combined with emphasis on increased overall system efficiency. HE fixtures/design Tier II 15 53.1% $ 1.59 168 0 69

Indoor Lighting NC, Reno,

Repl CFL fixture - interior

2012-14 Permanently installed Compact Fluorescent Lamp fixture Incandescent fixture meeting EISA 2007 lighting

performance standards (e.g., efficient halogen lamp) 12 59.0% $ 0.42 168 168, 1 168

Indoor Lighting Ret CFL fixture - interior

2012-14 Permanently installed Compact Fluorescent Lamp fixture Incandescent fixture meeting EISA 2007 lighting

performance standards (e.g., efficient halogen lamp) 12 59.0% $ 1.34 168 168, 1 70

Indoor Lighting NC, Reno,

Repl CFL spiral 2012-14 Compact Fluorescent Lamp spiral, for interior High-efficiency halogen lamp 5 62.2% $ 0.03 168 168, 53 71, 168

Indoor Lighting Ret CFL spiral 2012-14 Compact Fluorescent Lamp spiral, for interior High-efficiency halogen lamp 5 62.2% $ 0.04 168 168, 53 71, 168

Indoor Lighting NC, Reno,

Repl LED track lighting LED replacements for track lighting Halogen Par 38 15 79.8% $ 0.73 1, 157, 162 1, 156 1, 157

Indoor Lighting Ret LED track lighting LED replacements for track lighting Halogen Par 38 15 79.8% $ 1.04 1, 157, 162 1, 156 1, 157

Indoor Lighting NC, Reno,

Repl LED downlighting LED replacements for recessed downlights. Recessed lights are

used to concentrate light in a downward direction. Weighted average of 65W BR30 & 50W PAR30

downlight lamps 15 67.6% $ 0.48 1, 157, 162 1, 157 46, 157

Indoor Lighting Ret LED downlighting LED replacements for recessed downlights. Recessed lights are

used to concentrate light in a downward direction. Weighted average of 65W BR30 & 50W PAR30

downlight lamps 15 67.6% $ 0.98 1, 157, 162 1, 157 46, 157

Indoor Lighting NC, Reno,

Repl LED Lamp, directional LED screw and pin-based lamps that replace PAR bulbs in nondedicated fixtures. These are common in retail and museum

applications where directional highlighting is common weighted average of CFL and Halogen PAR bulb 14 78.6% $ 0.31 1, 62 1, 156 1, 157

Indoor Lighting Ret LED Lamp, directional LED screw and pin-based lamps that replace PAR bulbs in nondedicated fixtures. These are common in retail and museum

applications where directional highlighting is common weighted average of CFL and Halogen PAR bulb 14 78.6% $ 0.47 1, 62 1, 156 1, 157

Indoor Lighting NC, Reno,

Repl LED Lamp, standard

and decorative LED screw and pin-based lamps that fit into traditional

incandescent and CFL sockets. Varieties include PAR, MR,

decorative candelabra, and standard A-style lamps. Weighted average of EC Halogens, and

incandescents 9 66.7% $ 0.48 1, 62 1, 157 46, 168

Indoor Lighting Ret LED Lamp, standard

and decorative LED screw and pin-based lamps that fit into traditional

incandescent and CFL sockets. Varieties include PAR, MR,

decorative candelabra, and standard A-style lamps. Weighted average of EC Halogens, and

incandescents 9 66.7% $ 0.65 1, 62 1, 157 46, 1, 168

Indoor Lighting NC, Reno,

Repl LED refrig case light

fixtures LED refrigerated case light fixtures are installed in walk-in

refrigerated coolers and freezers where they excel due to the cold

temperature. They replace linear fluorescent fixtures that perform

poorly in cold temperatures. T8 linear fluorescent 8 55.3% $ 0.46 168 168 168

Indoor Lighting Ret LED refrig case light

fixtures LED refrigerated case light fixtures are installed in walk-in

refrigerated coolers and freezers where they excel due to the cold

temperature. They replace linear fluorescent fixtures that perform

poorly in cold temperatures. T8 linear fluorescent 8 55.3% $ 0.90 168 168 168

Indoor Lighting NC, Reno,

Repl LED Recessed Fixture LED Recessed Fixtures replace linear fluorescent fixtures average of T8 and HPT8 4' fixtures 19 37.2% $ 1.70 1, 62, 158 1, 158 46, 1, 168

Indoor Lighting Ret LED Recessed Fixture LED Recessed Fixtures replace linear fluorescent fixtures average of T8 and HPT8 4' fixtures 19 37.2% $ 3.03 1, 62, 158 1, 158 46, 1, 168

Indoor Lighting NC, Reno,

Repl LED task lighting LED task lighting is used to increase light levels in work spaces

above ambient levels. Replaces Halogen and Fluorescent

technology Average of 50W Hal, 13W CFL and Linear T5 19 80.4% $ 0.40 126, 162 124, 155 1, 124, 155

Indoor Lighting Ret LED task lighting LED task lighting is used to increase light levels in work spaces

above ambient levels. Replaces Halogen and Fluorescent

technology Average of 50W Hal, 13W CFL and Linear T5 19 80.4% $ 0.61 126, 162 124, 155 1, 124, 155**Primary Fuel End**

**Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre** 

**mental**

**Cost/kWh**

**Saved Annual** 

**Fossil**

**Fuel**

**Savings**

**(MMBtu**

**per kWh**

**saved) Measure** 

**Life**

**Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Indoor Lighting NC, Reno,

Repl Fluor high-low bay

fixture - interior Fluorescent fixture for high and low bay applications (assumes 4-

lamp fixture). Generally for industrial warehouse and similar

applications. Low bay is 10-15 ft. average of 200W and 320W PSMH 15 47.2% $ 0.15 168 1, 168 1, 60

Indoor Lighting Ret Fluor high-low bay

fixture - interior Fluorescent fixture for high and low bay applications (assumes 4-

lamp fixture). Generally for industrial warehouse and similar

applications. Low bay is 10-15 ft. average of 200W and 320W PSMH 15 47.2% $ 0.49 168 1, 168 1, 60, 68

Indoor Lighting NC, Reno,

Repl LED High-Low Bay LED fixture for high and low bay applications. Generally for

industrial warehouse applications. Low bay is 10-15 ft. MH 250 W CWA Pulse Start 15 54.9% $ 0.58 1, 158, 168 1, 158, 168 1

Indoor Lighting Ret LED High-Low Bay LED fixture for high and low bay applications. Generally for

industrial warehouse applications. Low bay is 10-15 ft. MH 250 W CWA Pulse Start 15 54.9% $ 1.20 1, 158, 168 1, 158, 168 1

Indoor Lighting NC, Reno,

Repl Occupancy on/off

lighting control On/off lighting control based on space occupancy Manual control 10 30.0% $ 0.21 168 168 48, 60, 168

Indoor Lighting Ret Occupancy on/off

lighting control On/off lighting control based on space occupancy Manual control 10 30.0% $ 0.43 168 168 48, 60, 168

Indoor Lighting NC, Reno,

Repl Occupancy hi/low

lighting control Multilevel lighting control based on space occupancy. For

example, to reduce lighting in the aisles of a warehouse. Manual control 10 30.0% $ 0.59 168 168, 1 72

Indoor Lighting Ret Occupancy hi/low

lighting control Multilevel lighting control based on space occupancy. For

example, to reduce lighting in the aisles of a warehouse. Manual control 10 30.0% $ 1.00 168 168, 1 72

Indoor Lighting NC, Reno,

Repl Daylight dimming Automatic dimming in response to daylight, lumen depreciation

and task needs to maintain light levels. For NC, optimization of

natural light through shell measures is included under integrated

building design. Manual control 8 30.0% $ 0.27 168 168 1, 168

Indoor Lighting Ret Daylight dimming Automatic dimming in response to daylight, lumen depreciation

and task needs to maintain light levels. For NC, optimization of

natural light through shell measures is included under integrated

building design. Manual control 8 30.0% $ 0.38 168 168 1, 168

Indoor Lighting Ret Wireless on-off lighting

controls On/off lighting controls attached to occupancy sensors. Eliminates

the need for expensive cabling attached to each controlled light. Manual control 10 30.0% $ 0.47 39 39 183

Indoor Lighting Ret LED exit sign Light emitting diode exit sign Fluorescent exit sign 7 94.3% $ 0.26 1, 20 168 168

Outdoor Lighting NC, Reno,

Repl LED minor exterior area

lighting LED general area lighting on the outside of commercial buildings.

This includes walkway, security, signage, and façade lighting 175W MH 14 72.1% $ 0.71 162 127 127

Outdoor Lighting Ret LED minor exterior area

lighting LED general area lighting on the outside of commercial buildings.

This includes walkway, security, signage, and façade lighting CFLs, Halogen, and linear t5 14 72.1% $ 1.03 162 127 127

Outdoor Lighting NC, Reno,

Repl CFL - exterior 2012-

2014 Spiral CFL for exterior applications to replace incandescent, 2012-

14 Halogen PAR38 spot lamp 4 62.1% $ 0.04 1 1, 59 59

Outdoor Lighting Ret CFL - exterior 2012-

2014 Spiral CFL for exterior applications to replace incandescent, 2012-

14 Halogen PAR38 spot lamp 4 62.1% $ 0.08 1 1, 59 59

Outdoor Lighting NC, Reno LED Parking/Roadway

Fixtures LED outdoor lighting for parking areas and general area lighting

(not utility-owned). This includes cobra heads, other more

decorative street lights and canopy lighting. Weighted average of 400W MH, 250W MH and

250W HPS, lamps and housing/fixtures 11 71.9% $ 0.49 162 46, 162 1

Outdoor Lighting Ret LED Parking/Roadway

Fixtures LED outdoor lighting for parking areas and general area lighting

(not utility-owned). This includes cobra heads, other more

decorative street lights and canopy lighting. Weighted average of 400W MH, 250W MH and

250W HPS lamps 11 71.9% $ 0.60 162 46, 162 1

Outdoor Lighting NC, Reno,

Repl Exterior Occupancy

Sensors Occupancy sensors controlling outdoor lighting no occ sensor 10 41.0% $ 0.74 1 1 1

Outdoor Lighting Ret Exterior Occupancy

Sensors Occupancy sensors controlling outdoor lighting no occ sensor 10 41.0% $ 1.22 1 1 1

Outdoor Lighting NC, Reno,

Repl LED Municipal

Streetlighting LED street lighting owned by utilities Combination of 250W MH and 250W HPS cobra

heads 11 41.1% $ 0.76 19 169 169

Outdoor Lighting Ret LED Municipal

Streetlighting LED street lighting owned by utilities Combination of 250W MH and 250W HPS cobra

heads 11 41.1% $ 1.15 19 169 169**Primary Fuel End**

**Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre** 

**mental**

**Cost/kWh**

**Saved Annual** 

**Fossil**

**Fuel**

**Savings**

**(MMBtu**

**per kWh**

**saved) Measure** 

**Life**

**Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Outdoor Lighting NC, Reno Improved ext lighting

design Reduced light levels and better outdoor lighting design. Includes

reduced wattage lamps, better spacing, and use of cut-offs and

reflectors to better control light and minimize glare Standard exterior lighting practice 15 42.0% $ 0.37 1 1, 30 30

Outdoor Lighting NC, Reno,

Repl Outdoor Lighting

Timeclocks Time controls save energy by reducing lighting time of use

through preprogrammed scheduling. Generally they dim the

fixture during periods of low activity, such as 12am-5am. Time

controls are applicable to utility owned street lights as well as nonutility owned outdoor light fixtures such as those in parking

garages and security lighting Standard efficiency exterior area lighting using metal

halide and high-pressure sodium technologies 15 50.0% $ 0.36 1 39 154

Outdoor Lighting Ret Outdoor Lighting

Timeclocks Time controls save energy by reducing lighting time of use

through preprogrammed scheduling. Generally they dim the

fixture during periods of low activity, such as 12am-5am. Time

controls are applicable to utility owned street lights as well as nonutility owned outdoor light fixtures such as those in parking

garages and security lighting Standard efficiency exterior area lighting using metal

halide and high-pressure sodium technologies 15 50.0% $ 0.72 1 39 154

Cooling NC, Reno,

Repl High-eff AC CEE Tier I Packaged or split system unitary air conditioner meeting CEE Tier

I efficiency criteria (CEE Commercial Unitary AC & HP Specs, Jan

2012). High efficiency level reflects weighted average by size and

type of units. New unitary air conditioner meeting relevant energy

codes or federal standards. Baseline efficiency

reflects weighted average by size and type. 15 6.5% $ 1.09 90 134,102,93,

168 135

Cooling Ret High-eff AC CEE Tier I Packaged or split system unitary air conditioner meeting CEE Tier

I efficiency criteria (CEE Commercial Unitary AC & HP Specs, Jan

2012). High efficiency level reflects weighted average by size and

type of units. Existing stock efficiency unitary air conditioner.

Existing stock efficiency reflects weighted average by

size and type. 15 19.3% $ 2.91 90 134,92,93,1

02,168 3, 135

Cooling NC, Reno,

Repl High-eff AC CEE Tier II Packaged or split system unitary air conditioner meeting CEE Tier

II efficiency criteria (CEE Commercial Unitary AC & HP Specs,

Jan 2012). High efficiency level reflects weighted average by size

and type of units. New unitary air conditioner meeting relevant energy

codes or federal standards. Baseline efficiency

reflects weighted average by size and type. 15 10.3% $ 1.09 90 134,102,93,

168 135

Cooling Ret High-eff AC CEE Tier II Packaged or split system unitary air conditioner meeting CEE Tier

II efficiency criteria (CEE Commercial Unitary AC & HP Specs,

Jan 2012). High efficiency level reflects weighted average by size

and type of units. Existing stock efficiency unitary air conditioner.

Existing stock efficiency reflects weighted average by

size and type. 15 22.6% $ 2.55 90 134,92,93,1

68 3135

Cooling NC, Reno,

Repl High-eff HP CEE Tier I -

Cool Single or polyphase packaged or split system unitary heat pump

meeting CEE Tier I efficiency criteria. High efficiency level will

reflect weighted average by size and type of units. New unitary heat pump meeting relevant energy

codes or federal standards. Baseline efficiency

reflects weighted average by size and type. 15 3.8% $ 3.00 90 134,102,93,

168 136, 135

Cooling Ret High-eff HP CEE Tier I -

Cool Single or polyphase packaged or split system unitary heat pump

meeting CEE Tier I efficiency criteria. High efficiency level will

reflect weighted average by size and type of units. Existing stock efficiency unitary heat pump. Existing

stock efficiency will reflect weighted average by size

and type. 15 14.3% $ 5.35 90 134,92,93,1

68 136, 135

Space Heating NC, Reno,

Repl High-eff HP CEE Tier I -

Heat See corresponding "Cool" measure. New unitary heat pump meeting relevant energy

codes or federal standards. Baseline efficiency

reflects weighted average by size and type. 15 2.0% $ 3.00 90 134,102,93,

168 136, 135

Space Heating Ret High-eff HP CEE Tier I -

Heat See corresponding "Cool" measure. Existing stock efficiency unitary heat pump. Existing

stock efficiency will reflect weighted average by size

and type. 15 6.7% $ 5.35 90 134,92,93,1

68 136, 135

Cooling NC, Reno,

Repl High-eff HP CEE Tier II -

Cool Single or polyphase packaged or split system unitary heat pump

meeting an efficiency criteria substantially above CEE Tier II. High

efficiency level will reflect the maximum level available from

multiple major manufacturers, weighted by size and type of units. Standard efficiency new unitary heat pump. Baseline

efficiency will reflect weighted average by size and

type. 15 11.3% $ 0.79 90 134,102,93,

168 136

Cooling Ret High-eff HP CEE Tier II -

Cool Single or polyphase packaged or split system unitary heat pump

meeting an efficiency criteria substantially above CEE Tier II. High

efficiency level will reflect the maximum level available from

multiple major manufacturers, weighted by size and type of units. Existing stock efficiency unitary heat pump. Existing

stock efficiency will reflect weighted average by size

and type. 15 22.1% $ 3.37 90 134,92,93,1

68 136**Primary Fuel End**

**Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre** 

**mental**

**Cost/kWh**

**Saved Annual** 

**Fossil**

**Fuel**

**Savings**

**(MMBtu**

**per kWh**

**saved) Measure** 

**Life**

**Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Space Heating NC, Reno,

Repl High-eff HP CEE Tier II -

Heat See corresponding "Cool" measure. Standard efficiency new unitary heat pump. Baseline

efficiency will reflect weighted average by size and

type. 15 10.6% $ 0.79 90 134,102,93,

168 136

Space Heating Ret High-eff HP CEE Tier II -

Heat See corresponding "Cool" measure. Existing stock efficiency unitary heat pump. Existing

stock efficiency will reflect weighted average by size

and type. 15 14.3% $ 3.37 90 134,92,93,1

68 136

Cooling NC, Reno,

Repl Water src HP v. air src -

Cool Water cooled heat pump using a water loop as a heat sink. Standard efficiency unitary heat pump. 15 29.0% $ 0.49 1, 18, 22 93, 102,

103, 168 1, 170

Space Heating NC, Reno,

Repl Water src HP v. air src -

Heat Water cooled heat pump using a water loop as a heat sink. Standard efficiency unitary heat pump. 15 39.9% $ 0.49 1, 18, 22 93, 102,

103, 168 104

Cooling NC, Reno,

Repl Ground source HP -

Cool Heat pump using ground as a heat sink. Either trench or well type. Standard efficiency unitary heat pump. 20 49.1% $ 1.71 1, 18, 22 93, 102,

103, 168 104

Space Heating NC, Reno,

Repl Ground source HP -

Heat Heat pump using ground as a heat sink. Either trench or well type. Standard efficiency unitary heat pump. 20 33.2% $ 1.71 1, 18, 22 93, 102,

103, 168 104

Cooling Reno, Repl HE Room AC A 'room air conditioner' is defined as a consumer product, other

than a ‘packaged terminal air conditioner,’ which is powered by a

single phase electric current and which is an encased assembly

designed as a unit for mounting in a window or through the wall

for the purpose of providing delivery of conditioned air to an

enclosed space. It includes a prime source of refrigeration and

may include a means for ventilating and heating. Upgrade to EER

10.8 (consistent with ENERGY STAR criteria for typical unit as of

5/27/09) Standard efficiency Room AC unit meeting federal

manufacturing standards. 9 9.3% $ 0.39 90 15, 16, 93 17

Cooling Ret HE Room AC A 'room air conditioner' is defined as a consumer product, other

than a ‘packaged terminal air conditioner,’ which is powered by a

single phase electric current and which is an encased assembly

designed as a unit for mounting in a window or through the wall

for the purpose of providing delivery of conditioned air to an

enclosed space. It includes a prime source of refrigeration and

may include a means for ventilating and heating. Upgrade to EER

10.8 (consistent with ENERGY STAR criteria for typical unit as of

5/27/09) Old window AC unit (7.5+ years old) 9 9.3% $ 1.70 90 15, 16, 93 17

Cooling NC, Reno,

Repl High-efficiency chillers

Tier I High efficiency water cooled chillers (represents weighted

average of different types and sizes) - Tier I Standard efficiency water cooled chiller 25 19.9% $ 1.54 1 102, 105,

93, 168 3, 39

Cooling Ret High-efficiency chillers

Tier I High efficiency water cooled chillers (represents weighted

average of different types and sizes) - Tier I Standard efficiency water cooled chiller 25 28.7% $ 2.62 1 92, 93, 105,

168 3, 39

Cooling NC, Reno,

Repl High-efficiency chillers

Tier II High efficiency water cooled chillers (represents weighted

average of different types and sizes) - Tier II Standard efficiency water cooled chiller 25 30.8% $ 1.22 1 102, 105,

93, 168 3

Cooling Ret High-efficiency chillers

Tier II High efficiency water cooled chillers (represents weighted

average of different types and sizes) - Tier II Standard efficiency water cooled chiller 25 38.4% $ 2.15 1 92, 93, 105,

168 3

Cooling NC, Reno Opt unitary hvac dist/ctrl

sys High efficiency distribution system for unitary systems, based on

mix of measures to optimize the total system efficiency. Potentially

including controls, economizers, VFDs, VAV, better design, etc.

This is mainly a design measure, applicable to NC and large

renovation. New construction standard efficiency unitary HVAC

distribution system 15 30.0% $ 0.53 0.004 40 51,93 3, 74, 39

Cooling NC, Reno Opt chiller dist/ctrl sys High efficiency distribution system for chiller systems, based on

mix of measures to optimize the total system efficiency. Potentially

including controls, economizers, VFDs, better design, etc. New construction standard efficiency unitary HVAC

distribution system 10 20.0% $ 0.53 22 64, 39 3, 74, 39

Cooling NC, Reno EMS/Controls -Cool Energy management system and/or other controls to optimize

control of HVAC system. Could include scheduling, optimal startstop, chiller reset control, dual enthalpy economizers, CO2

sensors, etc. No building automation 15 17.5% $ 0.70 0.003 22 41, 42,114,

150 48, 75, 114**Primary Fuel End**

**Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre** 

**mental**

**Cost/kWh**

**Saved Annual** 

**Fossil**

**Fuel**

**Savings**

**(MMBtu**

**per kWh**

**saved) Measure** 

**Life**

**Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Cooling Ret EMS/Controls -Cool Energy management system and/or other controls to optimize

control of HVAC system. Could include scheduling, optimal startstop, chiller reset control, dual enthalpy economizers, CO2

sensors, etc. No building automation 15 17.5% $ 1.05 0.003 22 41, 42, 114,

150 48, 75, 114

Ventilation NC, Reno EMS/Controls -Vent See corresponding "Cool" measure. No building automation 15 17.5% $ 0.70 0.003 22 41, 42, 114,

150 48, 75, 114

Ventilation Ret EMS/Controls -Vent See corresponding "Cool" measure. No building automation 15 17.5% $ 1.05 0.003 22 41, 42, 114,

150 48, 75, 114

Cooling NC, Reno,

Repl Dual enthalpy

economizer Dual enthalpy economizers with electronic controls to optimize

use of outside air to reduce cooling loads. Standard efficiency economizers, represents a mix of

dry-bulb and single enthalpy. 10 7.1% $ 1.37 1 168, 1 3

Cooling Ret Dual enthalpy

economizer Dual enthalpy economizers with electronic controls to optimize

use of outside air to reduce cooling loads. Existing stock, represents a mix of dry-bulb and fixed

dampers. 10 9.6% $ 1.01 1 168, 1 3

Cooling NC, Reno,

Repl Demand controlled

ventilation -Cool Adjust ventilation rates based on indoor-air quality (typically by

monitoring CO2 levels with sensors) Ventilation system in which the outside air ventilation

rate is fixed when the building is occupied 10 19.4% $ 0.26 0.021 1 41, 25, 76,

150, 168 109

Cooling Ret Demand controlled

ventilation -Cool Adjust ventilation rates based on indoor-air quality (typically by

monitoring CO2 levels with sensors) Ventilation system in which the outside air ventilation

rate is fixed when the building is occupied 10 19.4% $ 0.32 0.021 1 41, 25, 76,

150, 168 109

Ventilation NC, Reno,

Repl Demand controlled

ventilation -Vent See corresponding "Cool" measure. Ventilation system in which the outside air ventilation

rate is fixed when the building is occupied 10 10.0% $ 0.26 0.021 1 25, 150 76

Ventilation Ret Demand controlled

ventilation -Vent See corresponding "Cool" measure. Ventilation system in which the outside air ventilation

rate is fixed when the building is occupied 10 10.0% $ 0.32 0.021 1 25, 150 77

Cooling Ret HVAC tune-up -Cool Optimize an existing HVAC system by adjusting refrigerant

charge, air flow, and control set-points for maximum efficiency. HVAC system with non-optimized airflow and

refrigerant charge 6 7.5% $ 0.13 0.007 39 61, 150 78, 79

Cooling NC, Reno Duct sealing -Cool Seal HVAC ductwork with aerosol-based sealant to reduce air

leakage outside the conditioned space and the consequent

energy loss. Leaky and unsealed ducts 25 11.5% $ 0.16 25 93, 150 80, 119

Cooling Ret Duct sealing -Cool Seal HVAC ductwork with aerosol-based sealant to reduce air

leakage outside the conditioned space and the consequent

energy loss. Leaky and unsealed ducts 25 11.5% $ 0.16 25 93, 150 80, 119

Ventilation NC, Reno Duct sealing -Vent See corresponding "Cool" measure. Leaky and unsealed ducts 25 9.0% $ 0.16 25 93, 80, 150 80, 119

Ventilation Ret Duct sealing -Vent See corresponding "Cool" measure. Leaky and unsealed ducts 25 9.0% $ 0.16 25 93, 80, 150 80, 119

Ventilation NC, Reno,

Repl Variable Frequency

Drive (VFD) Variable frequency drive on applicable fans and pumps No control or manual control with Inlet/outlet dampers

or throttle valves 15 39.7% $ 0.14 1, 18 1, 65 1, 48, 82

Ventilation Ret Variable Frequency

Drive (VFD) Variable frequency drive on applicable fans and pumps No control or manual control with Inlet/outlet dampers

or throttle valves 15 39.7% $ 0.13 1, 18 65, 93 1, 48, 82

Cooling NC, Reno,

Repl Low Flow Fume Hood High efficiency low-flow fume hoods, typically used in laboratories,

operate on the principle of an air supply with low turbulence

intensity in the face of the hood. This alternative design results in

significantly reduced volumes of exhaust air, which means less

energy needed to move that air, while still providing sufficient air

flow to dilute contaminants in the hood. Constant volume (CV) and variable air volume (VAV)

fume hoods with an average face velocity of >= 90

ft/min 25 44.4% $ 0.38 0.007 88 88, 89 88, 89

Cooling NC, Reno,

Repl HE stove hood -Cool Optimized stove hoods to minimize conditioned make-up air

requirements. Standard stove hoods 20 10.5% $ 0.51 27 62, 63, 81 63, 81

Cooling Ret HE stove hood -Cool Optimized stove hoods to minimize conditioned make-up air

requirements. Standard stove hoods 20 10.5% $ 0.51 27 62, 63, 81 63, 81

Ventilation NC, Reno,

Repl HE stove hood -Vent See corresponding "Cool" measure. Standard stove hoods 20 68.0% $ 0.51 27 62, 63, 81 63, 81

Ventilation Ret HE stove hood -Vent See corresponding "Cool" measure. Standard stove hoods 20 68.0% $ 0.51 27 62, 63, 81 63, 81**Primary Fuel End**

**Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre** 

**mental**

**Cost/kWh**

**Saved Annual** 

**Fossil**

**Fuel**

**Savings**

**(MMBtu**

**per kWh**

**saved) Measure** 

**Life**

**Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Water Heating Ret Electric DHW pipe

insulation Electric Domestic Hot Water pipe insulation Uninsulated hot water pipe 15 0.4% $ 0.01 31, 32 93 127

Water Heating Ret Electric water heater

tank insulation Electric water heater tank wrap insulation Hot water tank without a tank wrap 10 0.6% $ 0.09 91 93 127

Water Heating NC, Reno, Ret Elec instant water heat

vs. elec DHW Electric point-of-use water heating with no storage capacity, as

compared to electric DHW storage. Standard centrally located electric storage water

heater 10 33.8% $ 0.01 30 45, 62 172

Water Heating Ret Elec instant water heat

vs. elec DHW Electric point-of-use water heating with no storage capacity, as

compared to electric DHW storage. Standard centrally located electric storage water

heater 10 33.8% $ 0.13 30 45 172

Water Heating Ret Low-flow pre-rinse

spray valve, elec DHW Low-flow pre-rinse spray valve for food service applications Pre-rinse spray valve greater than 1.6gpm 5 46.7% $ 0.03 168 168 39

Cooling NC, Reno,

Repl HP window glazing Tier

I -Cool Currently available high efficiency glazing The baseline condition is assumed to be single pane

clear glass with a solar heat gain

coefficient of 0.87 20 6.1% $ 0.08 91 93 39

Space Heating NC, Reno,

Repl HP window glazing Tier

I -Elec Heat Currently available high efficiency glazing The baseline condition is assumed to be single pane

clear glass with a solar heat gain

coefficient of 0.87 20 23.6% $ 0.08 91 93 39

Elec Total Reno Deep Energy Retrofit -

Electric Deep energy retrofit going after deep savings in every building

systems, mostly for the renovation market Energy use of the existing building, before the deep

energy retrofit occurs. Assumes energy use of typical

existing building. 20 43.0% $ 0.37 143 137 137

Cooling Ret Window Film Window films reduce solar heat gain in the summer by blocking

infrared radiation passing through windows. This reduces the

cooling load in the summer single pane clear glass in commercial buildings with a

solar heat gain

coefficient of 0.87 10 4.7% $ 0.68 (0.023) 39 93 91

Office Equipment MD HE plug loads Plug Load equipment, including computers, display, copier, fax,

printer, power supply, TVs, and set top boxes Standard Office equipment 4 65.8% $ 0.07 168 131 131133

Office Equipment Ret Office equipment

control Low cost measures that can be done as a retrofit to an office

building. Includes Power Management, advanced plug

strips/timers, monitor brightness settings, and occupant behavior. Standard Office equipment control and standard

power strips 3 29.0% $ 0.11 131, 132 131 131

Indoor Lighting NC, Reno,

Repl, Ret Hospitality control -

lighting System controlling HVAC and lighting for hotels/motels Typical hotel room with no key card control or

occupancy sensor 15 33.0% $ 0.17 25 25 25

Cooling NC, Reno,

Repl, Ret Hospitality control -

cooling System controlling HVAC and lighting for hotels/motels Typical hotel room with no key card control or

occupancy sensor 15 20.0% $ 0.17 25 25 25

Heating NC, Reno,

Repl, Ret Hospitality control -

heating System controlling HVAC and lighting for hotels/motels Typical hotel room with no key card control or

occupancy sensor 15 20.0% $ 0.17 25 25 25

Office Equipment Ret Hotel guestroom plug

load reduction efficient TVs and refrigerators in hotel guest rooms Standard efficiency TVs and refrigerators 12 11.8% $ 0.53 146 147 147

Office Equipment Ret, Repl Smart strip plug outlets A multi-plug power strip with the ability to automatically disconnect

specific loads that are plugged into it depending on the power

draw of a control load, also plugged into the strip. Conventional power strip with no mechanism for

disconnecting loads 8 2.9% $ 0.66 39 118 118

Water Heating NC, Reno,

Repl HE clothes washer, elec

DHW High-efficiency commercial coin-op washers Standard efficiency washer, elec DHW, electric dryer 11 28.4% $ 0.47 33 168, 33, 62,

94 168, 33

Water Heating Ret HE clothes washer, elec

DHW High-efficiency commercial coin-op washers Standard efficiency washer, elec DHW, electric dryer 11 19.9% $ 3.18 33 168, 33, 62,

94 33

Refrigeration NC, Reno,

Repl Energy Star vending

machine High-efficiency refrigerated vending machines. Includes better

lighting, controls and refrigeration. Standard efficiency new vending machine purchases. 14 42.1% $ - 34, 35, 26,

94 94 47

Refrigeration Ret Vending miser Vending miser or equivalent control to reduce lighting and

refrigeration energy during low use periods No control 10 37.5% $ 0.28 1 93 85

Refrigeration NC, Reno,

Repl High-eff built-up

refrigeration High-efficiency built-up refrigeration systems for grocery and

refrigerated warehouses. This potentially includes HE

compressors, better design and controls, HE motors and VFDs. Standard efficiency built-up refrigeration systems 10 25.3% $ 0.48 0.004 18, 34 34, 62 34**Primary Fuel End**

**Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre** 

**mental**

**Cost/kWh**

**Saved Annual** 

**Fossil**

**Fuel**

**Savings**

**(MMBtu**

**per kWh**

**saved) Measure** 

**Life**

**Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Refrigeration Ret High-eff built-up

refrigeration High-efficiency built-up refrigeration systems for grocery and

refrigerated warehouses. This potentially includes HE

compressors, better design and controls, HE motors and VFDs. Existing stock efficiency built-up refrigeration systems 10 31.4% $ 2.59 0.004 18, 34 34, 62 34

Refrigeration NC, Reno,

Repl High-eff reach-in refrig,

freezers High-efficiency stand-alone reach-in refrigeration & freezer units

for grocery, convenience stores, restaurants and cafeterias.

Efficiency improvements include better door heater control, better

lighting, HE compressors, greater insulation. Standard efficiency new reach-in refrigeration units. 9 26.0% $ 0.39 20, 34, 35 93 97

Refrigeration NC, Reno,

Repl HE Ice Makers High efficiency new ice machines Standard efficiency new ice machines 8 9.0% $ 0.09 98, 97 97 97

Refrigeration NC, Reno,

Repl High-efficiency small

walk-in High-efficiency small walk-in cooler with self-contained

refrigeration system Standard efficiency walk-in refrigeration system 13 54.0% $ 0.10 1 34, 62 34

Refrigeration Ret Walk-in refrig retrofit

package High efficiency walk-in refrigeration system retrofit improvements

(includes economizer, humidistat, evaporator fan control, etc.) Standard efficiency existing stock walk-in refrigeration

systems 16 16.8% $ 0.23 34, 38 49 49

Refrigeration NC, Reno,

Repl High-efficiency display

coolers High-efficiency refrigerated display coolers Standard efficiency one door beverage merchandiser 9 35.1% $ 0.26 34 62 34

Refrigeration Ret High-efficiency display

coolers High-efficiency refrigerated display coolers Standard efficiency existing stock display cooler 9 35.1% $ 4.01 34 62 34

Water Heating NC, Reno,

Repl Heat pump H2O heat

from refrig -WH Heat pump water heating using waste heat recovery from

refrigeration systems (water heating component) Air cooled refrigeration, traditional gas or electric

water heating (note some electric water heating

savings result as well) 14 43.0% $ 0.35 20 64, 20 20

Water Heating Ret Heat pump H2O heat

from refrig -WH Heat pump water heating using waste heat recovery from

refrigeration systems (water heating component) Air cooled refrigeration, traditional gas or electric

water heating (note some electric water heating

savings result as well) 14 50.0% $ 0.38 20 64, 20 20

Refrigeration NC, Reno,

Repl Heat pump H2O heat

from refrig -Refrig Heat pump water heating using waste heat recovery from

refrigeration systems (refrigeration component) Air cooled refrigeration, traditional gas or electric

water heating (note some electric water heating

savings result as well) 14 5.0% $ - 20 62 20

Refrigeration Ret Heat pump H2O heat

from refrig -Refrig Heat pump water heating using waste heat recovery from

refrigeration systems (refrigeration component) Air cooled refrigeration, traditional gas or electric

water heating (note some electric water heating

savings result as well) 14 5.0% $ - 20 62 20

Elec Total Ret Retrocommissioning -

Elec Optimizing energy usage of existing buildings and systems using

O&M, control calibration, etc. A typical existing building that hasn't been

commissioned 7 9.0% $ 0.09 25, 54, 55,

56 115, 25 115

Elec Total NC, Reno Commissioning -Elec Whole building commissioning of new buildings to ensure

optimized design, installation and operation of systems. New Construction building with no commissioning

performed 7 7.3% $ 0.55 25, 54, 55,

56 115 115

Elec Total NC Integrated bldg design

Tier I -Elec Reflects comprehensive, optimized design of new buildings

addressing all end-uses and interactions between them on a

systems basis. Measures include, but are not limited to, improved

air barrier performance, minimum IAQ performance, lighting

controls, improved lighting power density, improved mechanical

equipment efficiency, and demand controlled ventilation. New building conforming to ASHARE 90.1-2007 15 36.4% $ 0.61 58 184 184

Cooling Ret Cool roof White roofing material or coating, to reflect the sun and reduce airconditioning loads Typical black roof 20 32.2% $ 5.13 (0.000) 90 141 142

Cooling NC, Reno,

Repl Cool roof White roofing material or coating, to reflect the sun and reduce airconditioning loads Typical black roof with typical reflectance and

absorption 20 32.2% $ 0.46 (0.000) 90 141 142

Elec Total NC Building operational

efficiency (behavioral) Reflects an amalgamation of both post-consumption (indirect)

and real-time (direct) energy usage feedback to building

managers and occupants via monthly mailing, on-site displays,

etc., as could be supported by Advanced Metering Infrastructure

(AMI) - an emerging technology. New building without planned direct / indirect

feedback on electric usage 5 3.0% $ 0.52 39 39 25, 39**Primary Fuel End**

**Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre** 

**mental**

**Cost/kWh**

**Saved Annual** 

**Fossil**

**Fuel**

**Savings**

**(MMBtu**

**per kWh**

**saved) Measure** 

**Life**

**Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Elec Total Ret Building operational

efficiency (behavioral) Reflects an amalgamation of both post-consumption (indirect)

and real-time (direct) energy usage feedback to building

managers and occupants via monthly mailing, on-site displays,

etc., as could be supported by Advanced Metering Infrastructure

(AMI) - an emerging technology. Building without direct / indirect feedback on electric

usage 5 3.0% $ 0.52 39 39 25, 39

Data Center NC, Reno,

Repl Data centers

virtualization -IT Data Center energy savings for information technology (computer

loads) at facilities or rooms used to house computer servers and

data systems through the use of server virtualization. Typical data center without server virtualization 5 47.9% $ 0.17 57 57, 62 86, 39

Data Center Ret Data centers

virtualization -IT Data Center energy savings for information technology (computer

loads) at facilities or rooms used to house computer servers and

data systems through the use of server virtualization. Typical data center without server virtualization 5 47.9% $ 0.17 57 57, 62 86, 39

Cooling NC, Reno,

Repl Data centers

virtualization -Cool Data Center reduced cooling loads associated with electric

savings for computer loads. Typical data center without server virtualization 5 47.9% $ 0.17 57 57, 62 86, 39

Cooling Ret Data centers

virtualization -Cool Data Center reduced cooling loads associated with electric

savings for computer loads. Typical data center without server virtualization 5 47.9% $ 0.17 57 57, 62 86, 39

Miscellaneous NC, Reno,

Repl Water & sewer process Municipal water and wastewater treatment system optimization,

including replacing coarse-bubble aeration with fine-pore

aeration, right-sizing pump, impeller trimming, addition of pony

pump for smaller loads or VFD, leak reduction, better O&M

practices. Existing practices including coarse-bubble aeration,

oversized pumps with no VFD. 10 31.7% $ 0.38 39 200 200

Miscellaneous Ret Water & sewer process Municipal water and wastewater treatment system optimization,

including replacing coarse-bubble aeration with fine-pore

aeration, right-sizing pump, impeller trimming, addition of pony

pump for smaller loads or VFD, leak reduction, better O&M

practices. Existing practices including coarse-bubble aeration,

oversized pumps with no VFD. 10 31.7% $ 0.38 39 200 200

Miscellaneous Ret ECM Circulator Pump Install a variable speed circulation pump instead of a constant

speed pump Circulator pump using a low efficiency shaded pole

motor installed on the primary loop of a multiloop 20 64.7% $ 0.65 1 1 1

Water Heating Ret Low-flow showerhead,

elec DHW 0 0 10 0.1% $ 0.01 91 91, 1, 116 91, 116

Food Preparation Ret HE kitchen equipment -

elec, 2 meal High-efficiency commercial electric kitchen cooking/warming

equipment (holding cabinet, steamer, combination oven, deep Standard Food Preparation Equipment 12 27.1% $ 1.35 91, 97 97 97

Food Preparation NC, Reno,

Repl HE kitchen equipment -

elec, 2 meal High-efficiency commercial electric kitchen cooking/warming

equipment (holding cabinet, steamer, combination oven, deep Standard Food Preparation Equipment 12 27.1% $ 0.12 91, 97 97 97

Food Preparation Ret HE kitchen equipment -

elec, 3 meal High-efficiency commercial electric kitchen cooking/warming

equipment (holding cabinet, steamer, combination oven, deep Standard Food Preparation Equipment 12 25.9% $ 1.41 91, 97 97 97

Food Preparation NC, Reno,

Repl HE kitchen equipment -

elec, 3 meal High-efficiency commercial electric kitchen cooking/warming

equipment (holding cabinet, steamer, combination oven, deep Standard Food Preparation Equipment 12 25.9% $ 0.11 91, 97 97 97

Elec Total Ret Behavioral Measures -

Elec Includes occupant training, interactive meters w/ real-time pricing

capability. No Behavioral Modification Program 1 2.0% $ 0.09 185 185 39

Water Heating Ret Switch elec DHW to

gas 40-gal electric DHW tank to 40-gal gas condensing gas water

heater (standalone) 40-gallon electric DHW tank 13 100.0% $ 0.22 (0.003) 29 191, 168 29

Water Heating Repl Switch elec DHW to

gas 40-gal electric DHW tank to 40-gal gas condensing gas water

heater (standalone) 40-gallon electric DHW tank 13 100.0% $ 0.14 (0.003) 29 191, 168 29

Space Heating Ret Fuel switch elec unit

heater to gas Fuel switch elec unit heater to gas Electric unit heater 20 100.0% $ 0.19 (0.004) 138 39 198

Space Heating Repl Fuel switch elec unit

heater to gas Fuel switch elec unit heater to gas Electric unit heater 20 100.0% $ 0.01 (0.004) 138 39 197198

Space Heating Ret Fuel switch elec unit

heater to infrared gas Fuel switch elec unit heater to infrared gas Electric unit heater 20 100.0% $ 0.05 (0.003) 138 39 199**Commercial Fossil Fuel Measures Data Sources** 

**Primary Fuel**

**End Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre-mental** 

**Cost/kWh**

**Saved Annual Fossil** 

**Fuel Savings**

**(kWh per**

**MMBtu saved) Measure** 

**Life Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Space

Heating NC, Reno,

Repl HP window glazing Tier I

-FF Heat Currently available high efficiency glazing The baseline condition is assumed to be single pane

clear glass with a solar heat gain

coefficient of 0.87 20 3.2% $ 0.08 91 93 39

Space

Heating Reno Deep Energy Retrofit -

Fossil Fuel Deep energy retrofit going after deep savings in every building

systems, mostly for the renovation market Energy use of the existing building, before the deep

energy retrofit occurs. Assumes energy use of typical

existing building. 20 43.0% $ 107.99 143 137 137

Space

Heating Ret Envelope Upgrade Add attic insulation,wall insulation, and air sealing to small

commercial building envelopes Typical envelope insulation levels and tightness for

existing northeastern small commercial buildings 15 14.8% $ 85.95 $107.29 144 149, 152 149

Fuel Total Ret Retrocommissioning -

Fossil Fuel Optimizing energy usage of existing buildings and systems using

O&M, control calibration, etc. A typical existing building that hasn't been

commissioned 7 16.0% $ 25.94 25, 54, 55,

56 115 115

Fuel Total NC, Reno Commissioning -Fossil

Fuel Whole building commissioning of new buildings to ensure optimized

design, installation and operation of systems. New Construction building with no commissioning

performed 7 13.0% $ 161.62 25, 54, 55,

56 115 115

Space

Heating NC Integrated bldg design

Tier I -Fossil Fuel Reflects comprehensive, optimized design of new buildings

addressing all end-uses and interactions between them on a

systems basis. Measures include, but are not limited to, improved

air barrier performance, minimum IAQ performance, lighting

controls, improved lighting power density, improved mechanical

equipment efficiency, and demand controlled ventilation. New building conforming to ASHARE 90.1-2007 15 36.4% $ 179.58 58 148 184

Space

Heating NC, Reno,

Repl High-efficiency fossil

fuel furnace Higher Efficiency (typically condensing) gas fired Furnace Standard efficiency furnace (non-condensing for gas) 20 15.2% $ 101.08 90 39 39

Space

Heating NC, Reno,

Repl High-efficiency boiler Higher Efficiency gas or oil fired boiler, AFUE 85% or greater Standard efficiency gas fired boiler, AFUE 80% 25 14.9% $ 176.39 39 116 91

Space

Heating NC, Reno,

Repl High-efficiency boiler Higher Efficiency gas or oil fired boiler, AFUE 85% or greater Standard efficiency gas fired boiler, AFUE 75% 25 20.2% $ 208.88 39 91, 116 91

Space

Heating NC, Reno,

Repl Condensing gas unit

heater High-efficiency power-vented unit heaters have a sealed flue which

reduces losses when the heater is not firing Power Driven Unit Heater (78% AFUE) 20 14.3% $ 133.06 138 140 140

Space

Heating Ret Condensing gas unit

heater High-efficiency power-vented unit heaters have a sealed flue which

reduces losses when the heater is not firing Gravity Driven Unit Heater (63% AFUE) 20 30.8% $ 71.89 138 140 140

Space

Heating NC, Reno,

Repl High-efficiency gas

infrared heater High efficiency gas-fired infrared heating unit Standard efficiency gas unit heater 17 17.4% $ 15.20 91 91, 116 91

Water

Heating Ret Gas boost H2O heater

on HE dishwasher Gas fired boost heater for intake hot water pipe on HE commercial

dishwasher Commercial dishwasher with the tank temperature set

to deliver sanitized water (180° F) without a boost

heater 20 38.0% $ 3.49 117 97 97

Water

Heating NC, Reno,

Repl Gas HE tank-type water

heater Gas fired high efficiency stand-alone tank-type water heater Stand-alone gas-fired tank type water heater with a

thermal efficiency of .8 13 12.0% $ 15.00 93 116 91

Water

Heating Ret Gas HE tank-type water

heater Gas fired high efficiency stand-alone tank-type water heater Stand-alone gas-fired tank type water heater with a

thermal efficiency of .8 13 21.0% $ 27.27 93 116 91

Space

Heating Ret Programmable

thermostat, fossil fuel

heat Programmable thermostat allows user to automatically cycle space

heating equipment on and off to desired set point throughout the day

using pre-programmed timers, for gas heat Assume space heating equipment size of 1,000 Mbtu/h

at 75% AFUE 12 5.3% $ 11.65 93 116 91

Space

Heating MD Duct insulation and

sealing, FF heat Seal HVAC ductwork with aerosol-based sealant to reduce air

leakage outside the conditioned space and the consequent energy

loss. Leaky and unsealed ducts 25 11.5% $ 46.50 119 93 39

Space

Heating Ret Duct insulation and

sealing, FF heat Seal HVAC ductwork with aerosol-based sealant to reduce air

leakage outside the conditioned space and the consequent energy

loss. Leaky and unsealed ducts 25 11.5% $ 46.50 119 93 39

Water

Heating Ret Low-flow showerhead,

FF DHW reduces flow rate on showers Standard shower head (average rated at 3.25 GPM) 5 61.5% $ 2.85 116 91, 1, 116 116

Water

Heating Ret Faucet aerator, FF

DHW reduces flow rate on sinks Standard faucet (average rated at 2.2 GPM) 5 31.8% $ 22.42 93 91, 1, 116 116

Water

Heating NC, Reno Commercial clothes

washers, FF DHW High efficiency commercial clothes washers save both kWh and

MMBtu. 2.84 cu. ft. machine that meats CEE Tier II (1.60 MEF). Regular efficiency commercial clothes washer hooked

up to Gas-fired hot water (assumes 2.84 cu. ft.

machine) at NAECA required efficiency of 1.04 MEF 12 43.4% $ 174.09 91 94 94

Water

Heating Ret Pre-rinse spray valves,

FF DHW Reduces flow rate for commercial food service dish pre-rinse

sprayers Pre-rinse spray valve at 3.2 gpm (1.5 hours/per day;

360 day/year. Water temperature rise 70F; gas heater

thermal efficiency 0.8) 5 3.6% $ 2.33 91 91 91, 177**Primary Fuel**

**End Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre-mental** 

**Cost/kWh**

**Saved Annual Fossil** 

**Fuel Savings**

**(kWh per**

**MMBtu saved) Measure** 

**Life Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Water

Heating Ret Water heater tank

insulation, FF DHW Wrapping a stand-alone water heater in insulating blanket Stand-alone gas-fired water heater (thermal efficiency

.8) without tank insulation 10 0.7% $ 20.97 116 91, 1, 116 116

Water

Heating Ret Hot water pipe

insulation, FF DHW Wrapping hot water send and return pipes in Insulation Stand-alone gas-fired water heater (thermal efficiency

.8) without outlet pipe insulation 10 0.4% $ 3.43 116 91, 1, 116 116

Water

Heating NC, Reno Hot water pipe

insulation, FF DHW Wrapping hot water send and return pipes in Insulation Stand-alone gas-fired water heater (thermal efficiency

.8) without outlet pipe insulation 10 0.4% $ 3.43 116 91, 1, 116 116

Food

Preparation Ret Gas kitchen equipment,

2 meal High-efficiency commercial gas kitchen cooking/warming equipment

(holding cabinet, steamer, combination oven, deep fryer, griddle,

grill) - 2 meals per day Non-Energy Star gas-fired commercial kitchen

equipment, prototype setup 12 32.7% $ 138.67 91, 97 97 97

Food

Preparation NC, Reno,

Repl Gas kitchen equipment,

2 meal High-efficiency commercial gas kitchen cooking/warming equipment

(holding cabinet, steamer, combination oven, deep fryer, griddle,

grill) - 2 meals per day Non-Energy Star gas-fired commercial kitchen

equipment, prototype setup 12 0.0% $ 15.21 91, 97 39 97

Food

Preparation Ret Gas kitchen equipment,

3 meal High-efficiency commercial gas kitchen cooking/warming equipment

(holding cabinet, steamer, combination oven, deep fryer, griddle) for

a restaurant that serves 3 meals per day Standard Food Preparation Equipment 12 29.2% $ 168.79 91, 97 97 97

Food

Preparation NC, Reno,

Repl Gas kitchen equipment,

3 meal High-efficiency commercial gas kitchen cooking/warming equipment

(holding cabinet, steamer, combination oven, deep fryer, griddle) for

a restaurant that serves 3 meals per day Standard Food Preparation Equipment 12 29.2% $ 15.78 91, 97 97 97

Space

Heating Ret Behavioral Measures -

Fossil Fuel Heat, DHW Includes occupant training, interactive meters w/ real-time pricing

capability. No Behavioral Modification Program 1 2.0% $ 5.00 185 39 39

Water

Heating NC, Reno Point of use water heat,

gas DHW Electric water heating at point of use with no storage capacity 0 10 28.1% $ 8.19 87, 91 97, 91 97, 91, 119

Food

Preparation NC, Reno,

Repl Turbo Pot 24 qt. Stock Pot Standard stock pot 3 27.8% $ 10.30 192 189, 190 190

Water

Heating NC, Reno,

Repl, Ret Ozone Laundry Ozone Laundry systems for large laundromats and facilities with onsite laundry Standard Laundry System 20 91.0% $ 21.95 $4.06 193 194 194

Space

Heating Ret Steam Traps Replace steam traps for commercial steam heating systems Failed Steam Traps 6 33.4% $ 5.54 196 196 196

Space

Heating Ret Fuel switch oil burner to

dual fuel replace oil burner with a burner using gas as primary fuel Oil burner on commercial boiler 25 100.0% $ 334.00 $0.89 90 39 39**Industrial Electric Measures Data Sources** 

**Primary Fuel End**

**Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre** 

**mental**

**Cost/kWh**

**Saved Annual** 

**Fossil**

**Fuel**

**Savings**

**(MMBtu**

**per kWh**

**saved) Measure** 

**Life**

**Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Industrial Process NC, Repl Industrial process Represents a comprehensive suite of industrial energy efficiency

measures addressing electric process energy. Standard efficiency for aggregated measures 14 21.5% $ 0.09 181, 182 181, 182,

39 181, 182,

39

Industrial Process Ret Industrial process Represents a comprehensive suite of industrial energy efficiency

measures addressing electric process energy. Standard efficiency for aggregated measures 14 21.3% $ 0.09 181, 182 181, 182,

39 181, 182,

39

Indoor Lighting NC, Reno,

Repl Industrial lighting Represents a comprehensive suite of industrial energy efficiency

measures addressing indoor lighting. Standard efficiency for aggregated measures 12 25.4% $ 0.15 181, 182 181, 182,

39 181, 182,

39

Indoor Lighting Ret Industrial lighting Represents a comprehensive suite of industrial energy efficiency

measures addressing indoor lighting. Standard efficiency for aggregated measures 12 33.8% $ 0.15 181, 182 181, 182,

39 181, 182,

39

Cooling NC, Reno,

Repl Industrial space cooling Represents a comprehensive suite of industrial energy efficiency

measures addressing space cooling Standard efficiency for aggregated measures 10 6.0% $ 0.75 181, 182 181, 182,

39 181, 182,

39

Cooling Ret Industrial space cooling Represents a comprehensive suite of industrial energy efficiency

measures addressing space cooling Standard efficiency for aggregated measures 10 6.0% $ 0.75 181, 182 181, 182,

39 181, 182,

39

Motors-Pumps Ret Sensors and controls -

Motors-Pumps Implement process control systems to improve the efficiency

industrial processes. Sensors are inexpensive to install, reliable,

and analyze in real-time. Industrial processes with no-, inadequate, or

inoperable controls and sensors/ 15 3.0% $ 0.10 11 11, 39 11, 39

Motors-Fans and

Blowers Ret Sensors and controls -

Motors-Fans and

Blowers Implement process control systems to improve the efficiency

industrial processes. Sensors are inexpensive to install, reliable,

and analyze in real-time. Industrial processes with no-, inadequate, or

inoperable controls and sensors/ 15 3.0% $ 0.10 11 11, 39 11, 39

MotorsCompressed Air Ret Sensors and controls -

Motors-Compressed Air Implement process control systems to improve the efficiency

industrial processes. Sensors are inexpensive to install, reliable,

and analyze in real-time. Industrial processes with no-, inadequate, or

inoperable controls and sensors/ 15 3.0% $ 0.10 11 11, 39 11, 39

MotorsRefrigeration Ret Sensors and controls -

Motors-Refrigeration Implement process control systems to improve the efficiency

industrial processes. Sensors are inexpensive to install, reliable,

and analyze in real-time. Industrial processes with no-, inadequate, or

inoperable controls and sensors/ 15 3.0% $ 0.10 11 11, 39 11, 39

Process HeatingDrying and Curing Ret Sensors and controls -

Process Heating-Drying

and Curing Implement process control systems to improve the efficiency

industrial processes. Sensors are inexpensive to install, reliable,

and analyze in real-time. Industrial processes with no-, inadequate, or

inoperable controls and sensors/ 15 3.0% $ 0.10 11 11, 39 11, 39

Process HeatingHeat Treating Ret Sensors and controls -

Process Heating-Heat

Treating Implement process control systems to improve the efficiency

industrial processes. Sensors are inexpensive to install, reliable,

and analyze in real-time. Industrial processes with no-, inadequate, or

inoperable controls and sensors/ 15 3.0% $ 0.10 11 11, 39 11, 39

Process HeatingHeating Ret Sensors and controls -

Process HeatingHeating Implement process control systems to improve the efficiency

industrial processes. Sensors are inexpensive to install, reliable,

and analyze in real-time. Industrial processes with no-, inadequate, or

inoperable controls and sensors/ 15 3.0% $ 0.10 11 11, 39 11, 39

Process HeatingMelting and

Casting Ret Sensors and controls -

Process HeatingMelting and Casting Implement process control systems to improve the efficiency

industrial processes. Sensors are inexpensive to install, reliable,

and analyze in real-time. Industrial processes with no-, inadequate, or

inoperable controls and sensors/ 15 3.0% $ 0.10 11 11, 39 11, 39

Other-HVAC Ret Energy Management

systems -Other-HVAC Install energy management systems to properly monitor and

control lighting and HVAC systems. Facilities with no energy management systems 10 7.0% $ 0.63 11 11, 39 11, 39

Other-Lighting Ret Energy Management

systems -Other-Lighting Install energy management systems to properly monitor and

control lighting and HVAC systems. Facilities with no energy management systems 10 7.0% $ 0.63 11 11, 39 11, 39

Elec Total Ret Energy Information

Systems Install hardware-based systems providing real-time information

(e.g., real-time pricing or load shedding requests) on energy

usage to facility managers locally or over the internet Facilities with no energy information systems 10 1.0% $ 0.25 11 11, 39 11, 39

Elec Total Ret Efficient Transformers

(Tier 2) Install energy efficient transformers. All electric power passes

through one or more dry-type transformers on its way to service

equipment, lighting, and other loads. Energy efficient transformers

save a fraction of every kWh delivered to the plant. Standard efficiency transformers 30 1.6% $ 1.07 11 11, 39 11, 39

MotorsRefrigeration Ret Duct/Pipe Insulation -

Motors-Refrigeration Install insulation to reduce heat loss from non-insulated surfaces

that are above or below ambient conditions. No-, inadequate, or damaged duct/pipe insulation 7 20.0% $ 0.30 11 11, 39 11, 39**Primary Fuel End**

**Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre** 

**mental**

**Cost/kWh**

**Saved Annual** 

**Fossil**

**Fuel**

**Savings**

**(MMBtu**

**per kWh**

**saved) Measure** 

**Life**

**Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Process HeatingHeating Ret Duct/Pipe Insulation -

Process HeatingHeating Install insulation to reduce heat loss from non-insulated surfaces

that are above or below ambient conditions. No-, inadequate, or damaged duct/pipe insulation 7 20.0% $ 0.30 11 11, 39 11, 39

Other-HVAC Ret Duct/Pipe Insulation -

Other-HVAC Install insulation to reduce heat loss from non-insulated surfaces

that are above or below ambient conditions. No-, inadequate, or damaged duct/pipe insulation 7 20.0% $ 0.30 11 11, 39 11, 39

MotorsRefrigeration Ret Cooling and storage Utilize innovative designs of cooling/refrigeration equipment in

food preservation. Specific to the food and beverage

manufacturing industries. Standard efficiency cooling/refrigeration equipment;

no thermal storage 15 20.0% $ 3.50 11 11, 39 11, 39

Elec Total Ret electric supply system

improvements Modify existing power supplies to reduce phase unbalance,

voltage variations, and poor supply waveforms that reduce

equipment efficiency and cause equipment damage. Standard efficiency electric supply systems 5 3.0% $ 0.04 11 11, 39 11, 39

Process Total Ret Microwave processing Implement microwave processing. Microwave processing has a

number of advantages such as precise control of the heating

process, improved yield, higher production rate and improved

product quality. Conventional heating processes 10 3.0% $ 1.25 11 11, 39 11, 39

Process HeatingDrying and Curing Ret RF heating and drying -

Process Heating-Drying

and Curing Implement radio frequency (RF) heating and drying processes to

provide a thermal profile that conventional heating and drying

methods alone are not able to achieve. Conventional heating and drying methods 10 1.0% $ 1.25 11 11, 39 11, 39

Process HeatingHeating Ret RF heating and drying -

Process HeatingHeating Implement radio frequency (RF) heating and drying processes to

provide a thermal profile that conventional heating and drying

methods alone are not able to achieve. Conventional heating and drying methods 10 1.0% $ 1.25 11 11, 39 11, 39

Other-Lighting Ret Efficient lighting design -

- Office Implement efficient lighting design applicable to office space,

warehouses, and production areas. Standard efficiency lighting design 8 44.0% $ 0.12 11 11, 39 11, 39

Other-Lighting Ret Efficient lighting design -

- Manuf Implement efficient lighting design applicable to office space,

warehouses, and production areas. Standard efficiency lighting design 8 23.0% $ 0.14 11 11, 39 11, 39

Other-Lighting Ret Efficient lighting design -

- Warehouse Implement efficient lighting design applicable to office space,

warehouses, and production areas. Standard efficiency lighting design 8 86.0% $ 0.14 11 11, 39 11, 39

Other-Lighting Ret Efficient lighting fixtures

and lamps -- Office Install efficient lamps and ballasts applicable to office space,

warehouses, and production areas. Standard efficiency lighting fixtures and lamps 12 17.0% $ 3.68 11 11, 39 11, 39

Other-Lighting Ret Efficient lighting fixtures

and lamps -- Manuf Install efficient lamps and ballasts applicable to office space,

warehouses, and production areas. Standard efficiency lighting fixtures and lamps 14 40.0% $ 0.93 11 11, 39 11, 39

Other-Lighting Ret Efficient lighting fixtures

and lamps --

Warehouse Install efficient lamps and ballasts applicable to office space,

warehouses, and production areas. Standard efficiency lighting fixtures and lamps 15 46.0% $ 0.97 11 11, 39 11, 39

Motors Total Ret Advanced motor

designs Implement advanced motor system designs. Standard efficiency motor systems designs 20 6.2% $ 0.39 11 11, 39 11, 39

Motors Total Ret motor management Implement motor rewind best practices so degradation of

efficiency is minimized during the rewinding. Best practices

include using low burn-out temperatures to remove old windings

and rewinding per the original pattern. Conventional motor rewind practices 20 0.8% $ 0.18 11 11, 39 11, 39

Motors Total Ret Advanced lubricants Replace conventional petroleum-based oils and greases with

synthetic, engineered lubricants to reduce energy consumption

and equipment wear while extending lubricant life. Conventional lubricants 1 3.0% $ 0.03 11 11, 39 11, 39

Motors-Pumps Ret Motor system

optimization -MotorsPumps Improve systems performance by optimizing the flows in motordriven systems, principally fan and pump systems, to meet end

use requirements. Non-optimized motor systems 10 1.2% $ 0.07 11 11, 39 11, 39

Motors-Fans and

Blowers Ret Motor system

optimization -MotorsFans and Blowers Improve systems performance by optimizing the flows in motordriven systems, principally fan and pump systems, to meet end

use requirements. Non-optimized motor systems 10 1.2% $ 0.07 11 11, 39 11, 39**Primary Fuel End**

**Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre** 

**mental**

**Cost/kWh**

**Saved Annual** 

**Fossil**

**Fuel**

**Savings**

**(MMBtu**

**per kWh**

**saved) Measure** 

**Life**

**Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Other-HVAC Ret Motor system

optimization -OtherHVAC Improve systems performance by optimizing the flows in motordriven systems, principally fan and pump systems, to meet end

use requirements. Non-optimized motor systems 10 1.2% $ 0.07 11 11, 39 11, 39

MotorsCompressed Air Ret Compressed air system

management Improve compressed air system performance by addressing the

individual components, the supply and demand sides of the

system, and the interaction between the components and the

system. Savings opportunities include repairing leaks, eliminating

inappropriate uses of compressed air, and optimizing system

pressure level. Non-optimized compressed air system 10 17.0% $ 0.08 11 11, 39 11, 39

MotorsCompressed Air Ret Air Compressor

Systems Advanced

Controls Install air compressor controls to efficiently match the air supply

from the compressors with system demand. Conventional compressor capacity controls 10 3.5% $ 0.14 11 11, 39 11, 39

Motors-Pumps Ret Pump efficiency

improvement Improve pump system efficiency giving consideration to flow

requirements, required delivered pressure, and the system

effects. Standard efficiency pump systems 10 20.0% $ 0.13 11 11, 39 11, 39

Motors-Fans and

Blowers Ret Fan system efficiency -

Motors-Fans and

Blowers Improve fan systems efficiency by reducing air demand,

improving control, and establishing proper maintenance. Standard efficiency fan systems 10 6.0% $ 0.33 11 11, 39 11, 39

Other-HVAC Ret Fan system efficiency -

Other-HVAC Savings in industrial fan systems include efficient fans, reduction

in air demand, improved control and proper maintenance. Standard efficiency fan systems 10 6.0% $ 0.33 11 11, 39 11, 39

MotorsRefrigeration Ret Efficient refrigeration

systems Opportunities include system design, component design (e.g.

adjustable speed drives), and improved operation and

maintenance practices. Standard efficiency refrigeration systems 15 10.0% $ 0.45 11 11, 39 201, 39

Process HeatingDrying and Curing Ret Advanced Curing

Technologies Implement advanced curing technologies such as ultraviolet (UV)

curing. Conventional curing technologies 15 15.0% $ 0.98 11 11, 39 11, 39

Process HeatingHeat Treating Ret Electric IR heating and

drying -Process HeatingHeat Treating Install electric infrared (IR) heating equipment to cure coatings in

materials fabrication and other applications. Conventional curing and drying technologies 18 15.0% $ 2.91 11 11, 39 11, 39

Process HeatingHeating Ret Electric IR heating and

drying -Process HeatingHeating Install electric infrared (IR) heating equipment to cure coatings in

materials fabrication and other applications. Conventional curing and drying technologies 18 15.0% $ 2.91 11 11, 39 11, 39

Process HeatingDrying and Curing Ret E-beam sterilization Install electron-beam sterilization equipment in place of less

efficient sterilization technologies Conventional sterilization technologies 15 10.0% $ 0.01 11 11, 39 11, 39

Process Total Ret industrial heat pumps Install high-efficiency heat pumps for industrial process

applications Conventional process heating technologies 15 10.0% $ 1.24 11 11, 39 11, 39**Industrial Fossil Fuel Measures Data Sources** 

**Primary Fuel**

**End Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre-mental** 

**Cost/kWh**

**Saved Annual Fossil** 

**Fuel Savings**

**(kWh per**

**MMBtu saved) Measure** 

**Life Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Industrial

Process NC, Reno,

Repl Industrial Process - NG Represents a comprehensive suite of industrial energy efficiency

measures addressing Natural gas process energy. Standard efficiency for aggregated measures 15 15.0% $ 45.00 181, 182 39 39

Industrial

Process Ret Industrial Process - NG Represents a comprehensive suite of industrial energy efficiency

measures addressing Natural gas process energy. Standard efficiency for aggregated measures 15 15.0% $ 45.00 181, 182 39 39

Industrial

Process NC, Reno,

Repl Industrial Process - Oil Represents a comprehensive suite of industrial energy efficiency

measures addressing Petroleum Fuels process energy. Standard efficiency for aggregated measures 15 15.0% $ 90.00 181, 182 39 39

Industrial

Process Ret Industrial Process - Oil Represents a comprehensive suite of industrial energy efficiency

measures addressing Petroleum Fuels process energy. Standard efficiency for aggregated measures 15 15.0% $ 90.00 181, 182 39 39

Fuel Total Ret Improved process

control Install monitors and controls to maximize boiler combustion

efficiency Non-optimized boiler combustion efficiency 15 3.0% $ 12.28 166 166 166

Fuel Total Ret Maintain boilers Implement proper and timely boiler maintenance procedures No- or inadequate boiler maintenance procedures 2 10.0% $ 2.43 166 166 166

Fuel Total Ret Flue gas heat

recovery/economizer Use waste heat from boiler flue gas to preheat boiler intake water or

provide space heating No heat recovery systems 15 2.0% $ 17.41 166 166 166

Fuel Total Ret Blowdown steam heat

recovery Use waste heat from boiler blowdown to preheat boiler intake water

or provide space heating No heat recovery systems 15 1.3% $ 15.28 166 166 166

Fuel Total Ret Upgrade burner

efficiency Install more effcient burners on boilers Standard efficiency burners 20 1.3% $ 49.98 166 166 166

Fuel Total Ret Water treatment Treat boiler water to reduce mineral buildup which reduces heat

transfer efficiency No- or inadequate water treatment technologies 10 1.0% $ 6.34 166 166 166

Fuel Total Ret Load control Install controls to properly stage boiler systems No- or inadequate boiler staging controls 15 4.0% $ 13.64 166 166 166

Fuel Total Ret Improved insulation Install and maintain insulation on boiler piping No-, inadequate, or damaged duct/pipe insulation 15 8.0% $ 6.55 166 166 166

Fuel Total Ret Steam trap maintenance Properly maintain steam traps to ensure rapid remediation of

malfunctions No- or inadequate steam trap maintenance procedures 2 12.5% $ 0.84 166 166 166

Fuel Total Ret Automatic steam trap

monitoring Install automated monitors to allow diagnosis of steam trap conditon No automatic steam trap monitoring 15 5.0% $ 3.41 166 166 166

Fuel Total Ret Leak repair Repair leaks in steam distribution lines and fittings Unrepaired leaks in steam distribution system 2 4.0% $ 1.08 166 166 166

Fuel Total Ret Condensate return Reuse condensate water for boiler feedwater No condensate reuse 15 10.0% $ 9.57 166 166 166

Fuel Total Ret Improve ceiling

insulation Install and maintain ceiling insulation to reduce HVAC energy use No- or standard efficiency ceiling insulation 20 24.3% $ 85.70 166 166 166

Fuel Total Ret Install HE(95%) cond

furnace/boiler Install high efficiency furnaces and boilers for HVAC Standard efficiency furnaces and boilers 20 18.0% $ 37.88 166 166 166

Fuel Total Ret Stack heat exchanger Install heat exchangers to recover heat from or reject heat to HVAC

system exhaust air to minimize heating and cooling requirements No heat recovery systems 20 5.0% $ 18.41 166 166 166

Fuel Total Ret Duct insulation Install and maintain insulation on HVAC ductwork No-, inadequate, or damaged duct insulation 20 2.0% $ 7.04 166 166 166

Fuel Total Ret EMS install Installing energy management system to control HVAC systems Facilities with no energy management systems 20 10.0% $ 31.79 166 166 166

Fuel Total Ret EMS optimization Optimize existing energy management system to control HVAC

systems Facilities with non-optimized energy management

systems 5 1.0% $ 0.61 166 166 166

Fuel Total Ret Process Controls &

Management Implement various computer-based process controls to maximize

efficiency of process operations. Specific applications are

dependent on industry type. No- or inadequate process controls and management 8 5.4% $ 4.99 166 166 166

Fuel Total Ret Heat Recovery Recovering and reusing waste heat from manufacturing process for

other processes or space heating No heat recovery systems 20 20.4% $ 92.06 166 166 166

Fuel Total Ret Efficient burners Install more efficient burners for process applications Standard efficiency burners 10 18.3% $ 14.27 166 166 166

Fuel Total Ret Process integration Optimize operations such that components and operations are well

matched in terms of capacity and function across multiple

processes. Unintegrated processes 15 16.5% $ 87.04 166 166 166

Fuel Total Ret Efficient drying Install more efficient direct drying equipment Conventional drying technologies 20 16.5% $ 61.55 166 166 166

Fuel Total Ret Closed hood Install enclosed hood on paper machines to reduce thermal energy

requirements. Specific to paper manufacturing industries. Open-hood paper machines 15 5.0% $ 34.82 166 166 166

Fuel Total Ret Extended nip press Install more efficient paper pressing technologies to reduce drying

requirements. Specific to paper manufacturing industries. Conventional paper press technologies 20 16.0% $ 92.59 166 166 166**Primary Fuel**

**End Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre-mental** 

**Cost/kWh**

**Saved Annual Fossil** 

**Fuel Savings**

**(kWh per**

**MMBtu saved) Measure** 

**Life Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Fuel Total Ret Improved separation

processes Implement improved separation processes such as combined

reaction and distillation, ion exchange and bio-separation, and

hybrid processes. Specific to chemical manufacturing facilities. Conventional separation processes 20 10.0% $ 26.30 166 166 166

Fuel Total Ret Thermal oxidizers Install regenerative thermal oxidizers to recover waste heat from

VOC incineration processes. Specific to chemical manufacturing

facilities. Conventional thermal oxidizers 15 60.0% $ 208.90 166 166 166

Fuel Total Ret Flare gas controls and

recovery Install improved recovery systems to reduce or eliminate flaring.

Specific to petroluem manufacturing industries. Uncontrolled flare gas 15 50.0% $ 87.04 166 166 166

Fuel Total Ret Fouling control Implement improved controls and maintenance practices to reduce

fouling of heat-exhange surfaces. Specific to petroluem

manufacturing industries. No specific fouling controls or maintenance practices 5 7.0% $ 3.53 166 166 166

Fuel Total Ret Efficient furnaces Implement various furnace design improvements to maximize

furnace efficiency. Specific to petroluem manufacturing industries. Standard efficiency furnaces 20 6.0% $ 13.89 166 166 166

Fuel Total Ret Oxyfuel Install oxy-fuel furnace, i.e., using oxygen rich combustion air, to

improve furnace efficiency. Specific to nonmetallic mineral product

manufacturing industries. Standard efficiency furnaces 20 20.0% $ 63.13 166 166 166

Fuel Total Ret Batch cullet preheating Install a cullet (scraps of broken or waste glass) pre-heater utilizing

furnace waste heat. Specific to nonmetallic mineral product

manufacturing industries. No heat recovery systems 15 16.0% $ 27.85 166 166 166

Fuel Total Ret Preventative

maintenance Implement a preventative maintenance plan training personnel to

increase energy-conserving behaviors No- or inadequate preventative maintenance plans 5 2.0% $ 1.21 166 166 166

Fuel Total Ret Combustion controls Install controls to improve combustion efficiency. Specific to

fabricated metal products manufacturing industries. No- or inadequate combustion controls 8 8.0% $ 5.32 166 166 166

Fuel Total Ret Optimize furnace

operations Implement various strategies to optimize combustion and heat

transfer efficiency. Specific to fabricated metal products

manufacturing industries. Non-optimized furnace operations 10 10.0% $ 9.52 166 166 166

Fuel Total Ret Insulation/reduce heat

losses Install insulation to reduce heat loss from non-insulated surfaces

that are above or below ambient conditions. Specific to fabricated

metal products manufacturing industries. No-, inadequate, or damaged insulation 15 5.0% $ 29.79 166 166 166**Residential Electric Measures Data Sources** 

**Primary Fuel End**

**Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre** 

**mental**

**Cost/kWh**

**Saved Annual** 

**Fossil**

**Fuel**

**Savings**

**(MMBtu**

**per kWh**

**saved) Measure** 

**Life**

**Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Refrigeration NC, Reno,

Repl Efficient Refrigerator,

ESTAR An Energy Star labeled refrigerator replaces a minimum federal

standard efficiency unit Federal standard efficiency refrigerator 17 20.0% $ 0.81 168 168 168

Refrigeration NC, Reno,

Repl Efficient Refrigerator

Tier II A high efficiency refrigerator replaces a minimum federal standard

efficiency unit Federal standard efficiency refrigerator 17 25.0% $ 0.65 168 168 168

Cooling NC, Reno,

Repl Efficient Window AC

ESTAR Replace room AC with energy star labeled unit; 8-13kbtu, >10.8

EER Federal standard efficiency window air conditioner,

EER 9.8 12 9.3% $ 1.53 168 168 168

Cooling NC, Reno,

Repl Efficient Window AC

Tier I Replace room AC with CEE tier 1 unit; 8-13kbtu, >11.3 EER Federal standard efficiency window air conditioner,

EER 9.8 12 13.3% $ 2.14 168 168 168

Cooling NC, Reno,

Repl Efficient Central AC

ESTAR Replace standard efficiency central AC with Energy Star qualified

model (SEER 14.5, EER 12) Federal standard efficiency central air conditioning

system, SEER 13, EER 11 18 10.3% $ 6.97 176 176 176

Cooling Ret Efficient Central AC

ESTAR Replace standard efficiency central AC with Energy Star qualified

model (SEER 14.5, EER 12) Federal standard efficiency central air conditioning

system, SEER 13, EER 11 18 10.3% $ 6.97 176 176 1005

Cooling NC, Reno,

Repl Efficient Central AC Tier

II Replace or upgrade standard efficiency central AC with CEE Tier

2 model (SEER 15, EER 12.5) Federal standard efficiency central air conditioning

system, SEER 13, EER 11 18 13.3% $ 6.59 168 168 1005

Cooling Ret Efficient Central AC Tier

II Replace or upgrade standard efficiency central AC with CEE Tier

2 model (SEER 15, EER 12.5) Federal standard efficiency central air conditioning

system, SEER 13, EER 11 18 13.3% $ 6.59 168 168 1005

Cooling Ret Efficient CAC early

Replacement Replace existing low efficiency central AC with CEE Tier 2 model

(SEER 15, EER 12.5) Low efficiency central AC 18 42.0% $ 6.78 168 168 168

Cooling Ret Window AC

replacement an existing, functioning window ac is replaced with an energy Star

model An existing, inefficient window AC 12 28.7% $ 2.91 168 176 176

Cooling NC, Reno,

Repl Air Source Heat Pump

ESTAR -Cool Replace existing electric ASHP cooling system with Energy Star

qualified model (SEER 14.5, EER 12) Standard efficiency, ducted, ASHP, 13 SEER, 11

EER 18 10.3% $ 2.84 176 176 176

Space Heating NC, Reno,

Repl Air Source Heat Pump

ESTAR -Heat Replace a standard efficiency electric ASHP with Energy Star

qualified unit, min 8.2 HSPF Standard efficiency, ducted, ASHP, 7.7 HSPF 18 6.1% $ 1.32 176 176 176

Cooling NC, Reno,

Repl ASHP, Cooling, Tier 2 Replace existing electric ASHP cooling systemwith CEE Tier 2

unit 15SEER, 12.5EER Standard efficiency, ducted, ASHP, 13 SEER, 11

EER 18 13.3% $ 1.71 176 176 1005

Space Heating NC, Reno,

Repl ASHP, Heat, Tier 2 Replace a standar efficiency electric ASHP with a CEE Tier 2

qualified unit Standard efficiency, ducted, ASHP, 7.7 HSPF 18 9.0% $ 1.71 176 176 176

Cooling NC, Reno,

Repl Efficient fan motor -Cool Efficient furnace fan motor (ECM or BPM) to replace standard

efficiency (PSC) motors standard efficiency permanent split capacitor (PSC)

motor for central AC 18 50.0% $ 1.12 176 168 176

Cooling ret Efficient fan motor -Cool Efficient furnace fan motor (ECM or BPM) to replace standard

efficiency (PSC) motors standard efficiency permanent split capacitor (PSC)

motor for central AC 18 50.0% $ 1.12 176 168 176

Space Heating NC, Reno,

Repl Efficient fan motor -

Heat Efficient furnace fan motor (ECM or BPM) to replace standard

efficiency (PSC) motors standard efficiency permanent split capacitor (PSC)

motor for heating system 18 50.0% $ 0.83 176 168 176

Space Heating ret Efficient fan motor -

Heat Efficient furnace fan motor (ECM or BPM) to replace standard

efficiency (PSC) motors standard efficiency permanent split capacitor (PSC)

motor for heating system 18 50.0% $ 0.83 176 168 176

Cooling Ret Duct Sealing -Cool Air-seal duct work to reduce loss of conditioned air into

unconditioned space, cooling only Leaky ductwork within unconditioned space 20 5.0% $ 1.83 176 176 127

Space Heating Ret Duct Sealing, Heat

Pump -Heat Air-seal duct work to reduce loss of conditioned air into

unconditioned space, heat pump Leaky ductwork within unconditioned space 20 33.0% $ 0.50 168 168 127

Space Heating NC, Reno,

Repl High performance

window - ESH an R-5 window in place of a standard window standard double pane window with vinyl sash 25 59.2% $ 0.41 168 176 176

Space Heating NC, Reno,

Repl High performance

window - HP an R-5 window in place of a standard window standard double pane window with vinyl sash 25 59.2% $ 0.76 168 176 176

Cooling NC, Reno,

Repl High performance

window - Cool an R-5 window in place of a standard window standard double pane window with vinyl sash 25 39.6% $ 0.95 168 176 176

Space Heating NC, Reno,

Repl WiFi T-stats - Elec

Resistance An internet enabled programmable thermostat is installed standard non-programmable thermostat 15 13.0% $ 0.19 176 39 39

Space Heating NC, Reno,

Repl WiFi T-stats - HP An internet enabled programmable thermostat is installed standard non-programmable thermostat 15 13.0% $ 0.41 176 39 39

Plug Loads NC, Reno,

Repl Controlled Power Strip Controlled power strips eliminate standby loads by turning off

devices connected to the same power strip as the controlling

appliance Power strip with no control 4 81.6% $ 0.28 176 176 176**Primary Fuel End**

**Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre** 

**mental**

**Cost/kWh**

**Saved Annual** 

**Fossil**

**Fuel**

**Savings**

**(MMBtu**

**per kWh**

**saved) Measure** 

**Life**

**Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Plug Loads NC, Reno,

Repl Desktop Computer,

Energy Star labeled Advanced new power supply designs offer more than 80%

efficiency across a wide range of load conditions and often need

no cooling fan. Standard efficiency power supply 4 50.1% $ 0.06 127 127 127

Indoor Lighting RET CFL Direct Install Blend of specialty and standard CFLs replaces a blended

baseline of halogen and incandescent bulbs. Lamp is installed

directly by a contractor A blended average of incandescent and halogen

general service lamp 6 64.2% $ 0.12 176 127 127

Indoor Lighting RET LED Direct Install Standard LED A lamp replaces a blended baseline of halogen

and incandescent bulbs. Lamp is installed directly by a contractor A blended average of incandescent and halogen

general service lamp 20 75.0% $ 0.22 176 127 127

Indoor Lighting NC, Reno,

Repl CFL - spiral retail A CFL replaces an incandescent or halogen general service lamp A blended average of incandescent and halogen

general service lamp 6 64.2% $ 0.03 176 176 176

Indoor Lighting NC, Reno,

Repl CFL - specialty retail A specialty CFL replaces a specialty incandescent or halogen

general service lamp A blended average of incandescent and halogen

specialty lamp 7 75.0% $ 0.10 176 176 176

Indoor Lighting NC, Reno,

Repl CFL fixture, hardwired,

interior retail A CFL fixture replaces an incandescent or halogen general

service fixture A blended average of incandescent and halogen

general service lamp 3 64.2% $ 0.82 176 176 176

Indoor Lighting NC, Reno,

Repl SSL fixture An SSL fixture replaces an incandescent or halogen general

service lamp A blended average of incandescent and halogen

general service lamp 20 81.5% $ 0.51 176 176 176

Indoor Lighting NC, Reno,

Repl CFL fixture, hardwired,

exterior A CFL fixture replaces an incandescent or halogen general

service fixture A blended average of incandescent and halogen

general service lamp 7 64.2% $ 0.30 176 176 176

Indoor Lighting NC, Reno,

Repl Exterior Motion Sensor A motion sensor controlled exterior fixture replaces and

uncontrolled fixture an exterior fixture without motion sensor or any other

controls 15 60.4% $ 0.18 127 127 127

Indoor Lighting NC, Reno,

Repl Exterior SSL 450 to

1600 lumens An exterior SSL replaces an incandescent or halogen general

service lamp A blended average of incandescent and halogen

general service lamp 20 75.0% $ 0.18 127 127 127

Indoor Lighting NC, Reno,

Repl Exterior SSL >1600

lumens An exterior SSL replaces an incandescent or halogen general

service lamp A blended average of incandescent and halogen

general service lamp 20 75.0% $ 0.09 127 127 127

Water Heating NC, Reno,

Repl Clothes Washer - Retail An efficient clothes washer is purchased in place of a

conventional clothes washer. Includes dryer savings for average

dryer energy mix a new conventional clothes washer 14 26.9% $ 1.16 0.001 176 176 176

Kitchen/Laundry NC, Reno,

Repl Tier 2 Clothes Washer -

Elec An efficient clothes washer is purchased in place of a

conventional clothes washer. Includes dryer savings for average

dryer energy mix a new conventional clothes washer 14 29.8% $ 1.21 176 176 176

Water Heating Ret Clothes Washer - Early

Replacement Removal of an existing inefficient clothes washer prior to its

natural end of life and replacement with a new unit exceeding

ENERGY STAR standards. Includes dryer savings for average

dryer energy mix an existing conventional clothes washer 14 45.4% $ 2.51 0.001 176 176 176

Miscellaneous NC, Reno,

Repl Pool Pump the purchase of a multi speed swimming pool pump capable of

running at 50% speed and being run twice as many hours to

move the same amount of water through the filter. Single speed pool pump 10 87.4% $ 0.28 176 176 176

Indoor Lighting NC, Reno,

Repl LED Screw Based

Lamp retail <450

Lumens A SSL replaces an incandescent or halogen general service lamp A blended average of incandescent and halogen

general service lamp 20 79.0% $ 0.25 176 176 176

Indoor Lighting NC, Reno,

Repl LED Screw Based

Lamp retail 450 to 1600

Lumens A SSL replaces an incandescent or halogen general service lamp A blended average of incandescent and halogen

general service lamp 20 75.0% $ 0.14 176 176 176

Indoor Lighting NC, Reno,

Repl LED Screw Based

Lamp retail >1600

Lumens A SSL replaces an incandescent or halogen general service lamp A blended average of incandescent and halogen

general service lamp 20 56.0% $ 0.12 176 176 176

Elec Total Ret Enhanced Behavior

based Efficiency

initiative Customer is provided with feedback and guidance to save energy

at home. No Initiative 1 2.0% $ 0.07 175 175 175

Refrigeration Ret Refrigerator Retirement An extra refrigerator is taken out of service A homeowner has an extra refrigerator running (often

in basement, garage or porch) 8 100.0% $ 0.33 176 176 176

Refrigeration Ret Refrigerator Early

Replacement An aging refrigerator is replaced with a new, energy star model. An older, inefficient refrigerator remains in use until it

dies. 12 17.3% $ 1.58 176 176 176**Primary Fuel End**

**Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre** 

**mental**

**Cost/kWh**

**Saved Annual** 

**Fossil**

**Fuel**

**Savings**

**(MMBtu**

**per kWh**

**saved) Measure** 

**Life**

**Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Water Heating NC, Reno,

Repl Electric Heat Pump

Water Heater >55gal High efficiency heat pump water heater replaces electric

resistance water heater, COP>2.0

Measure null; April 2015 Standard efficiency electric resistance water heater,

>55 gallons, .90 EF 10 48.0% $ 0.53 168 168 168

Water Heating NC, Reno,

Repl Electric Heat Pump

Water Heater <55gal High efficiency heat pump water heater replaces electric

resistance water heater, COP>2.0 Standard efficiency electric resistance water heater,

<55 gallons, .90 EF 10 48.0% $ 0.53 168 168 168

Water Heating NC, Reno,

Repl Tank wrap, electric

water heater Additional R-20 insulation blanket, 50 gal water heater Uninsulated, 50 gal storage water heater 5 4.5% $ 0.22 176 176 176

Water Heating NC, Reno,

Repl Pipe insulation, electric

water heater Add R-3.5 insulation to uninsulated hot water pipes Uninsulated hot water pipes 15 0.8% $ 0.12 176 176 176

Water Heating Ret LF Showerhead - Elec a conventional showerhead is replaced with a low-flow

showerhead a conventional 2.5 gpm showerhead 10 20.0% $ 0.10 176 176 176

Water Heating Ret Faucet Aerator - Elec a conventional 2.2 gpm faucet aerator is replaced with a low-flow

aerator a conventional faucet aerator 5 20.0% $ 0.41 176 176 176

Kitchen/Laundry NC, Reno,

Repl ESTAR Clothes Dryers -

Elec an Energy Star Clothes Dryer is purchased in place of a standard

efficiency clothes dryer. Standard efficiency Clothes Dryer 14 15.0% $ 0.94 176 176 176

Kitchen/Laundry NC, Reno,

Repl SEDI Clothes Dryers -

Elec an Energy Star Clothes Dryer is purchased in place of a standard

efficiency clothes dryer. Standard efficiency Clothes Dryer 14 26.0% $ 1.44 176 176 176

Cooling Ret Air Sealing -Cool Reduce air leakage in building shell using blower door guidance

and durable materials The building's air leakage before reduction 15 15.0% $ 1.29 176 176 1005

Space Heating Ret Air Sealing, Heat Pump -

Heat Reduce air leakage in building shell using blower door guidance

and durable materials The building's air leakage before reduction 15 5.0% $ 0.89 176 176 1005

Cooling Ret Insulation -Cool Add R-19 insulation to attic modestly insulated attic (R-25) 25 10.0% $ 0.35 176 176 1005

Space Heating Ret Insulation, Heat Pump -

Heat Add R-19 insulation to attic modestly insulated attic (R-25) 25 43.2% $ 3.55 176 176 1005

Refrigeration NC, Reno,

Repl Energy Star Freezer Customer purchases an Energy Star Freezer instead of baseline Customer purchases a baseline freezer 12 11.5% $ 0.59 176 176 176

Refrigeration Ret Freezer early retirement An extra freezer is taken out of service A homeowner has an extra freezer running (often in

basement, garage or porch) 8 100.0% $ 0.26 127 127 127

Refrigeration NC, Reno,

Repl Multi Family refrigerator An CEE tier 2 listed refrigerator is purchased in place of a

minimum federal standard efficiency unit Federal standard efficiency refrigerator 17 25.0% $ 0.72 127 127 127

Refrigeration Ret Multi Family refrigerator,

early replace A CEE tier 2 listed refrigerator replaces an existing, inefficient

refrigerator An inefficient refrigerator remains in use 17 34.6% $ 2.00 127 127 127

Water Heating NC, Reno,

Repl Multi Family in-unit

clothes washer An CEE tier 2 listed clothes washer is purchased in place of a

minimum federal standard efficiency clothes washer A baseline clothes washer 14 24.5% $ 1.23 127 127 127

Water Heating Ret Multi Family clothes

washer early replace A CEE tier 2 listed clothes washer replaces an existing, inefficient

clothes washer Standard efficiency clothes washer 14 33.9% $ 2.53 127 127 127

Space Heating NC, Reno,

Repl Resistance to NG Fuel

Switch a customer replaces or supplements electric heat with hatural gas

wall furnace customer uses electric resistance space heat 25 100.0% $ 0.06 (0.013) 176 168 168

Space Heating NC, Reno,

Repl Resistance to Ductless

mini split a customer offsets electric resistance heat with a ductless heat

pump electric resistance heat 17 58.0% $ 0.53 176 168 168

Water Heating NC, Reno,

Repl Resistance to NG Fuel

Switch An electric resistance water heater is replaced by a Natural Gas

fired water heater electric resistance water heater 13 100.0% $ 0.21 (0.018) 176 168 168**Residential Fossil Fuel Measures Data Sources** 

**Primary Fuel**

**End Use Applicable** 

**Markets Measure Name**  **Measure Description Baseline Description**  **Life**

**(yr) %** 

**Savings Incre-mental** 

**Cost/kWh**

**Saved Annual Fossil** 

**Fuel Savings**

**(kWh per**

**MMBtu saved) Measure** 

**Life Source Savings** 

**Data**

**Sources Costs Data** 

**Sources**

Space

Heating Ret Duct Sealing, Fossil Fuel

-Heat Air-seal duct work to reduce loss of conditioned air into

unconditioned space, NG Leaky ductwork within unconditioned space 20 33.0% $ 19.74 168 168 127

Space

Heating NC, Reno,

Repl Gas Boiler ESTAR High efficiency gas boiler meeting Energy Star criteria (>85 AFUE) Gas boiler meeting minimum federal standards (82

AFUE) 18 8.9% $ 78.89 176 168 176

Space

Heating NC, Reno,

Repl Gas Furnace ESTAR High efficiency gas furnace meeting Energy Star criteria (>90

AFUE) Gas furnace meeting minimum federal standards (80

AFUE) 18 11.1% $ 52.87 168 168 168

Space

Heating NC, Reno,

Repl Oil Furnace ESTAR High efficiency oil furnace meeting Energy Star criteria (>85

AFUE) oil furnace meeting minimum federal standards (83

AFUE) 18 2.4% $ 258.71 168 168 168

Space

Heating NC, Reno,

Repl High performance

window - NG an R-5 window in place of a standard window standard double pane window with vinyl sash 25 59.2% $ 98.81 168 176 176

Space

Heating NC, Reno,

Repl WiFi T-stats - NG An internet enabled programmable thermostat is installed standard non-programmable thermostat 15 14.0% $ 45.92 176 39 39

Water

Heating NC, Reno,

Repl Tier 2 Clothes Washer -

Gas An efficient clothes washer is purchased in place of a conventional

clothes washer. Includes dryer savings for average dryer energy

mix a new conventional clothes washer 14 30.0% $ 342.47 176 176 176

Fuel Total Ret Enhanced Behavior

based Efficiency

initiative - FF Customer is provided with feedback and guidance to save energy at

home. No Initiative 1 1.3% $ 5.00 175 175 175

Water

Heating NC, Reno,

Repl Condensing Gas Water

Heater >55gal High efficiency gas condensing storage or on demand water heater Standard efficiency gas water heater, >55 gallons, .58

EF 13 29.9% $ 193.79 176 176 176

Water

Heating NC, Reno,

Repl Condensing Gas Water

Heater <55gal High efficiency gas condensing storage or on demand water heater Standard efficiency gas water heater, <55 gallons, .58

EF 13 29.9% $ 193.79 176 176 176

Water

Heating NC, Reno,

Repl Tankless water heater An Energy Star tankless water heater replaces a standard

efficiency unit Standard efficiency gas water heater, <55 gallons, .58

EF 13 30.0% $ 118.97 176 176 176

Water

Heating NC, Reno,

Repl High efficiency gas

storage water heater A high efficiency gas water heater replaces a standard efficiency

unit Standard efficiency gas water heater, <55 gallons, .58

EF 13 14.0% $ 58.49 176 176 176

Water

Heating Ret LF Showerhead - NG a conventional showerhead is replaced with a low-flow showerhead a conventional 2.5 gpm showerhead 10 20.0% $ 21.33 176 176 176

Water

Heating Ret Faucet Aerator - NG a conventional 2.2 gpm faucet aerator is replaced with a low-flow

aerator a conventional faucet aerator 5 20.0% $ 93.75 176 176 176

Kitchen/Laund

ry NC, Reno,

Repl ESTAR Clothes Dryers -

Gas an Energy Star Clothes Dryer is purchased in place of a standard

efficiency clothes dryer. Standard efficiency Clothes Dryer 14 15.0% $ 277.78 176 176 176

Kitchen/Laund

ry NC, Reno,

Repl SEDI Clothes Dryers -

Gas an Energy Star Clothes Dryer is purchased in place of a standard

efficiency clothes dryer. Standard efficiency Clothes Dryer 14 26.0% $ 427.35 176 176 176

Space

Heating Ret Air Sealing, Fossil Fuel -

Heat Reduce air leakage in building shell using blower door guidance and

durable materials The building's air leakage before reduction 15 5.0% $ 68.90 176 176 1005

Space

Heating Ret Insulation, Fossil Fuel -

Heat Add R-19 insulation to attic modestly insulated attic (R-25) 25 10.0% $ 210.34 176 176 1005

Water

Heating NC, Reno,

Repl Water Heating,

petroleum fuels High-efficiency water heating by petroleum fuels Standard efficiency petroleum-fueled water heating 18 10.0% $ 182.42 176 127 127

Water

Heating Ret Pipe insulation, gas

water heater Add R-3.5 insulation to uninsulated hot water pipes un-insulated pipes 15 0.8% $ 19.61 176 127 127

Space

Heating NC, Reno,

Repl Fossil to ductless mini

split a customer offsets LP or oil heat with a ductless heat pump oil or lp heat 17 100.0% $ 73.26 ($97.33) 176 168 168

Water

Heating NC, Reno,

Repl Oil to HP fuel Switch An oil-fired stand alone DHW tank is replaced by a heat pump water

heater oil fired standalong DHW tank 20 100.0% $ 46.68 ($81.57) 176 168 168

Water

Heating NC, Reno,

Repl LP to HP Fuel Switch An LP-fired stand alone DHW tank is replaced by a heat pump

water heater LP fired standalong DHW tank 20 100.0% $ 46.68 ($81.57) 176 168 168Optimal Energy, Inc. 

## APPENDIX **J :**  **BIBILOGRAPHY , UPDATED FROM PHASE**  **1 Bibliography and Source Citations** 

The citation numbers are used for citing data sources in Appendix I, Measure Characterizations

**# Source** 

1 Efficiency Vermont, 2012, "Technical Reference User Manual (TRM), Measure Savings Algorithms and Cost

Assumptions", Version 2012-77 or later

3 California Public Utilities Commission, June 2008, "Database of Energy Efficient Resources (DEER): Technology

and Measure Cost Data", http://www.deerresources.com/

11 Lawrence Berkeley National Laboratory and American Council for and Energy-Efficient Economy, 2001,

"Emerging Energy-Efficient Industrial Technologies: New York State Edition"

15 U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, 1997, "Energy Conservation

Program for Consumer Products: Final Rule Regarding Energy Conservation Standards for Room Air

Conditioners", Code of Federal Regulations, 10 CFR Part 430

16 U.S. Environmental Protection Agency and U.S. Department of Energy, 2005, "ENERGY STAR Program

Requirements for Room Air Conditioners", Accessed 10/29/2009,

http://www.energystar.gov/ia/partners/product_specs/program_reqs/room_air_conditioners_prog_req.pdf

17 U.S. Environmental Protection Agency and U.S. Department of Energy, 2005, ENERGY STAR Room Air

Conditioners Savings Calculator, accessed 6/14/2012,

http://www.energystar.gov/ia/business/bulk_purchasing/bpsavings_calc/CalculatorConsumerRoomAC.xls

18 RLW Analytics, Inc., October 2001, "NSTAR Electric and Gas Corporation, Large C&I Retrofit and C&I New

Construction Programs, Impact Evaluation Report on 1999/2000 Measure Installations"

19 Calculation based on lamp and/or ballast life and annual hours of use

20 American Council for an Energy Efficient Economy (ACEEE), 1998, "Emerging Energy-Savings Technologies and

Practices for the Buildings Sector"

22 ASHRAE, 1999, "1999 ASHRAE Handbook HVAC Applications"

25 American Council for an Energy Efficient Economy (ACEEE), 2004, "Emerging Energy-Savings Technologies and

Practices for the Buildings Sector", http://aceee.org/getfile.cfm?publicationid=53

26 E Source, 1995, "E Source Technology Atlas Series Volume II Commercial Space Cooling and Air Handling"

27 Personal Communication with Tim Hill, CaptiveAire

30 Optimal Energy, Inc., August 2003, "Energy Efficiency and Renewable Energy Resource Development Potential in

New York State Final Report", prepared for NYSERDA, http://www.nyserda.org/sep/EE&ERpotentialVolume1.pdf

31 Energy & Resource Solutions, November 17, 2005, "Measure Life Study prepared for The Massachusetts Joint

Utilities", http://www.mass.gov/Eoeea/docs/dpu/electric/08-10/1609nstrspaa.pdf

32 GDS Associates, January 2007, "Vermont Electric Energy Efficiency Potential Study Final Report", Prepared for

the VT Department of Public Service,

http://publicservice.vermont.gov/energy/vteefinalreportjan07v3andappendices.pdf**# Source** 

33 Federal Energy Management Program, "Energy Cost Calculator for Commercial Clothes Washers",

http://www1.eere.energy.gov/femp/

34 Little, Arthur, D., June 1996, "Energy Savings Poential for Commercial Refrigeration Equipment, Final Report"

35 American Council for an Energy Efficient Economy (ACEEE), 2001, "Opportunities for New Appliance and

Equipment Standards: Energy and Economics Savings Beyond Current Standards Programs",

http://www.aceee.org/energy/a016full.pdf

38 Personal communication with WDP Refrigeration Inc. (Alex), April 2002

39 Professional estimate/experience

40 Professional estimate, same as or less than High-Efficiency Air Conditioning, High-Efficiency Heat Pump, Ground

Source Heat Pump. Represents mix of relatively permanent ductwork design & shorter-lived controls.

41 Wortman, David, et al., 1996, "An innovative approach to impact evaluation of energy management system

incentive programs", ACEEE Summer Study Proceedings

42 U.S. Department of Energy, April 2005, "Advanced Sensors and Controls for Building Applications: Market

Assessment and Potential R&D Pathways"

45 SETS-Systems, manufacturer of tankless water heating systems, http://www.sets-systems.com/index.htm

46 Arnold, Gabe, May 2009, Efficiency Vermont, "LED Street Lighting Workshop"

47 U.S. Environmental Protection Agency and U.S. Department of Energy, ENERGY STAR Vending Machine

Calculator, http://www.energystar.gov/index.cfm?c=vending_machines.pr_vending_machines

48 California Public Utilities Commission, "Database of Energy Efficient Resources (DEER)",

http://www.deerresources.com/

49 Efficiency Vermont, August 2007, EVT Refrigeration Analysis Tool

50 Professional estimate based on best available equipment compared with baseline incremental to Tier I efficient

unit

51 Conservative values of 30% for cooling and 15% for heating relative to CEE Guidelines for EE Unitary HVAC

2001, and estimates from EPA case studies. Annual kWh calculated based on avg space cooling energy intensity

(kWh/ft2) for analysis region (CBECS 2003, eShapes 8760 data 2002).

52 Engineering estimate, incremental weighted average kW/sf above Tier 1, based on current experience in MA

programs

53 Engineering calculation per VEIC estimate of CFL and baseline watts for 2013. Assumes adoption of 20% higher

efficacy requirement for CFLs in 2012. Proportion of 60/75/100W-equivalent bulbs based on 2 years of EVT data.

EVT TRM in-service rate.

54 LBNL, PECI, Texas A&M, December 15, 2004, "The Cost-Effectiveness of Commercial Buildings

Commissioning", http://eetd.lbl.gov/Emills/PUBS/PDF/Cx-Costs-Benefits.pdf**# Source** 

55 Bourassa, Norman, et al., May 2004, "Evaluation of Persistence of Savings from SMUD Retrocommissioning

Program", http://repositories.cdlib.org/cgi/viewcontent.cgi?article=2494&context=lbnl

56 Turner, Dan, et al., May 2001, "Persistence of Savings Obtained from Continuous Commissioning",

http://buildings.lbl.gov/cec/pubs/E5P22T5a2_ncbc2001.pdf

57 Environmental Protection Agency, Aug 2007, "Report to Congress on Server and Data Center Energy Efficiency

Public Law 109-431",

http://www.energystar.gov/ia/partners/prod_development/downloads/EPA_Datacenter_Report_Congress_Final1.p

df

58 VT CORE Performance requirement

59 Available equipment search (bulbs.com)

60 Available equipment search, Grainger Industrial Supplies, http://www.grainger.com/

61 Professional estimate based on average space cooling energy intensity (kWh/ft2) for analysis region (CBECS

2003, eShapes 8760 data 2002).

62 Engineering calculation

63 Food Service Technology Center, September 2006, "Demand Ventilation in Commercial Kitchens - An Emerging

Technology Case Study, Melink Intelli-Hood Controls Supermarket Application", FSTC Report 5011.06.13,

prepared for Pacific Gas & Electric Company, http://www.melinkcorp.com/pdf/Case-Studies/Case-Study-IHSupermarket.pdf

64 Personal communication with Harvey Sachs, ACEEE, 2003

65 Engineering calculation, weighted average of % savings for range of motor horsepowers

68 Efficiency Vermont, 2007, "Direct Install Lighting Retrofit Opportunities", Excel workbook

69 Professional estimate based on lighting analysis by Sardo and Benya for NJ collaborative in 2002, and ERS

performance lighting analysis for MA in 2006.

70 U.S. Environmental Protection Agency and U.S. Department of Energy, 2007, ENERGY STAR Lighting Fixtures

Calculator, http://www.energystar.gov/ia/business/bulk_purchasing/bpsavings_calc/Consumer_RLF_Sav_Calc.xls

71 Vermont Energy Investment Corp., Professional judgement of CFL cost for 2013, and baseline replacement to

meet EISA 2007 lighting performance standards.

72 Available equipment search (wattstopper.com), http://wattstopper.com/

74 National Grid, "Design 2000plus" Program cost data

75 Energy Design Resources, 2003, "How to Save Energy with an EMS", Design Brief on Energy Management

Systems, http://www.energydesignresources.com/resources/publications/design-briefs/design-brief-energymanagement-systems.aspx

76 ASHRAE, 2003, "Demand Controlled Ventilation", ASHRAE Journal**# Source** 

77 Cost of a motorized damper, average of three sizes, http://www.nextag.com/motorized-dampers/search-html

78 Proctor Engineering Group, CheckMe! System

79 Energy Information Agency (EIA), 2003, "Commercial Building Energy Consumption Survey",

http://www.eia.doe.gov/emeu/cbecs/

80 ASHRAE, May 2003, "Improved Duct Sealing", ASHRAE Journal

81 Food Service Technology Center, November 2004, "Demand Ventilation in Commercial Kitchens - An Emerging

Technology Case Study, Melink Intelli-Hood Controls, Commercial Kitchen Ventilation System, Intercontinental

Mark Hopkins Hotel", FSTC Report 5011.04.17, prepared for Pacific Gas & Electric Company,

http://www.fypower.org/pdf/mark_hopkins_melink_report.pdf

82 Available equipment search (web site not recorded)

85 VendingMiserStore.com, accessed Oct 2008

86 Pacific Gas and Electric Company, Program cost/incentive data, as of October 2008

87 KEMA, March 22, 2010, "Business Programs: Deemed Savings Manual V1.0",

http://www.focusonenergy.com/files/Document_Management_System/Evaluation/deemedsavingsparameterdevel

opmentfinal_evaluationreport.pdf

88 State of Wisconsin, 2000, "Fume Hood Performance Test and Life Cycle Cost Analysis",

http://www.hbsponline.com/products/UWM-HBASC5.pdf

89 Lawrence Berkely National Laboratory, 2005, "Laboratory Fume Hood Energy Model",

http://fumehoodcalculator.lbl.gov/disclaimer.php

90 California Public Utilities Commission, Oct 1, 2008, "DEER Effective Useful Life (EUL) Summary",

http://www.deeresources.com/index.php?option=com_content&view=category&layout=blog&id=40&Itemid=55

91 NYSERDA, Multiple revisions available, "NYSERDA Deemed Savings Database Revision <nn>"

92 ASHRAE, 1999, "Energy Efficient Design of New Buildings Except Low-Rise Residential Buildings", Standard 90.1-

1999

93 TecMarket Works et al., 2010, "New York Standard Approach for Estimating Energy Savings from Energy

Efficiency Programs: Residential, Multi-Family, and Commercial/Industrial Measures",

http://www3.dps.state.ny.us/W/PSCWeb.nsf/0/06F2FEE55575BD8A852576E4006F9AF7?OpenDocument

94 U.S. Environmental Protection Agency and U.S. Department of Energy, 2009, "Life Cycle Cost Estimate for

ENERGY STAR Qualified Commercial Clothes Washer(s)",

http://www.energystar.gov/ia/business/bulk_purchasing/bpsavings_calc/CalculatorCommercialClothesWasherBul

k.xls**# Source** 

97 U.S. Environmental Protection Agency and U.S. Department of Energy, July 2011, "Savings Calculator for

ENERGY STAR Qualified Commercial Kitchen Equipment",

http://www.energystar.gov/ia/business/bulk_purchasing/bpsavings_calc/commercial_kitchen_equipment_calculato

r.xls

98 Navigant Consulting, 2009, "Energy Savings Potential and R&D Opportunities for Commercial Refrigeration",

http://apps1.eere.energy.gov/buildings/publications/pdfs/corporate/commercial_refrig_report_10-09.pdf

102 International Code Council, 2010, "2010 Energy Conservation Construction Code of New York State", Effective

December 28, 2010, http://publicecodes.citation.com/st/ny/st/b1200v10/index.htm

103 Climate Master, November 2011, "Climate Mastern Heat Pump Tranquility 27 Series",

http://www.climatemaster.com/downloads/LC374.pdf

104 NYSERDA, 2007, "Information for Evaluating Geoexchange Applications",

http://www.nyserda.org/programs/geothermal/geothermal_manual.pdf

109 Federal Energy Management Program, 2004, "Demand Controlled Ventilation Using CO2 Sensors",

http://www1.eere.energy.gov/femp/pdfs/fta_co2.pdf

113 ACDirect, 2011, "Air Conditioning Sizing Table", http://www.acdirect.com/systemsize.php

114 EMS Analysis, 2011, "Analysis of EMS Measures for 99 Big Lots Retail Stores"

115 Lawrence Berkeley National Laboratory, 2009, "Building Commissioning: A Golden Opportunity for Reducing

Energy Costs and Greenhouse Gas Emissions", http://cx.lbl.gov/documents/2009-assessment/LBNL-Cx-CostBenefit.pdf

116 Navigant Consulting, Inc., 2009, "Measures and Assumptions for Demand Side Management Planning Appendix

C: Substantiation Sheets"

117 Massachusetts Electric and Gas Energy Efficiency Program Administrators, 2010, "Massachusetts Technical

Reference Manual for Estimating Savings from Energy Efficiency Measures"

118 Vermont Energy Investment Corporation, 2010, "State of Ohio Energy Efficiency Technical Reference Manual"

119 Architectural Energy Corp, 2008, "Michigan Measures Database"

124 TecMarket Works et al., 2010, "New York Standard Approach for Estimating Energy Savings from Energy

Efficiency Programs: Residential, Multi-Family, and Commercial/Industrial Measures, Appendix M, Guidelines for

Early Replacement Conditions",

http://www3.dps.state.ny.us/W/PSCWeb.nsf/0/06F2FEE55575BD8A852576E4006F9AF7?OpenDocument

126 Navigant Consulting, 2012, "2010 U.S. Lighting Market Characterization"

127 Efficiency Vermont, 2012, "Technical Reference Manual Version 2012-74"

131 eCos consulting, December 2011, "Commercial Office Plug Load Savings Assessment",

http://www.efficientproducts.org/reports/plugload/PlugLoadSavingsAssessment.pdf**# Source** 

132 EnergyStar, Accessed May 2012, "Energy Star Commecial Office Plug Load Savings Calculator",

http://www.energystar.gov/index.cfm?c=power_mgt.pr_power_mgt_low_carbon_join

134 Consortium for Energy Efficiency (CEE), January 2012, "CEE Commercial Unitary AC and HP Specification",

Effective January 6, 2012, http://www.cee1.org/files/CEE_CommHVAC_UnitarySpec2012.pdf

135 Navigant, September 2011, "Incremental Cost Study Report", Prepared for the Evaluation, Measurement and

Verification Forum,

http://neep.org/uploads/EMV%20Forum/EMV%20Products/Incremental%20Cost%20%20study%20FINAL%20RE

PORT%202011Sep23.pdf

136 California Public Utilities Commission, October 2005, "Database of Energy Efficient Resources (DEER):

Technology and Measure Cost Data", http://www.deerresources.com/

137 New Buildings Institute, July 2011, "NEEA Study: Examples of Deep Energy Savings in Existing Buildings",

Prepared for BetterBricks,

http://www.betterbricks.com/sites/default/files/nbi_neea_deep_savings_search_phase_1_final.pdf

141 DOE/ORNL, June 2012, "DOE Cool Roof Calculator",

http://www.ornl.gov/sci/roofs+walls/facts/CoolCalcEnergy.htm

142 U.S. Environmental Protection Agency, October 2008, "Reducing Urban Heat Islands: Compendium of

Strategies", http://www.epa.gov/hiri/resources/pdf/CoolRoofsCompendium.pdf

143 U.S. Department of Energy, Energy Efficiency & Renewable Energy, September 2011, "Advanced Energy Retrofig

Guides: Office Buildings", http://www.peci.org/sites/default/files/aerg-office.pdf

144 New York Public Service Commission, July 2011, "CASE 07-M-0548 - Proceeding on Motion of the Commission

Regarding an Energy Efficiency Portfolio Standard, Order Approving Modifications to the Technical Manual",

Issued and Effective July 18, 2011,

http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId=207D90AD-22A3-486B-861F115DCC235F7B

146 EnergyStar, Accessed June 2012, "Energy Star Consumer Residential Refrigerator Savings Calculator",

http://www.energystar.gov/index.cfm?fuseaction=find_a_product.showProductGroup&pgw_code=RF

147 PNNL, September 2009, "Technical Support Document: 50% Energy Savings Design Technology Packages for

Highway Lodging Buildings`", http://www.pnl.gov/main/publications/external/technical_reports/PNNL-18773.pdf

148 Kats, Greg, 2010, "Greening Our Built World: Costs, Benefits, and Strategies"

149 Oak Ridge National Laboratory, 2002, "Meeting the Challenge: The Prospect of Achieving 30 Percent Energy

Savings Through the Weatherization Assistance Program", http://weatherization.ornl.gov/pdfs/ORNL_CON479.pdf

150 Global Energy Partners, March 2010, "Energy Efficiency Potential Study for Consolidated Edison Company of

New York, Inc. Volume 2: Electric Potential Report",

http://www.coned.com/documents/Volume_2_Executive_Summary.pdf**# Source** 

152 Robert Parkhurst, 2011, "Wisconsin Weatherization Assistance - Evaluation of Program Savings Fiscal Years

2007-2009", http://homeenergyplus.wi.gov/docview.asp?docid=22310

154 Arnold, Gabe, 2012, "Municipal Streetlighting Calculator"

155 U.S. Department of Energy, EERE, February 2008, "LED Application Series: Portable Desk/Task Lighting",

http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/portable_desk_task.pdf

156 U.S. Department of Energy, EERE, 2010, "Demonstration Assessment of Light-Emitting Diode (LED) Accent

Lighting", Final Report prepared in support of the U.S. DOE Solid-State Lighting Technology Demonstration

GATEWAY Program , http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/gateway_field-museum.pdf

157 U.S. Department of Energy, EERE, June 2012, "Demonstration of LED Retrofit Lamps at the Smithsonian

American Art Museum, Washington, DC", http://www.pnnl.gov/main/publications/external/technical_reports/PNNL21476.pdf

158 U.S. Department of Energy, EERE, October 2011, "CALIPER Summary Report: Round 13 of Product Testing",

http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/caliper_round13_summary.pdf

162 DesignLights Consortium, 2012, "DesignLights Consortium Qualified Products List",

http://www.designlights.org/documents/NEEPDLCQPL.xls

166 Itron, Inc., 2006, "California Energy Efficiency Potential Study", Submitted to Pacific Gas and Electric

168 Opinion Dynamics, April 30, 2012, "Delaware Technical Resource Manual, An Update to the Mid Atlantic TRM",

http://www.dnrec.delaware.gov/energy/information/otherinfo/Documents/EM-and-V-guidancedocuments/DELAWARE_TRM_August%202012.pdf

169 California Public Utilities Commission, 2005, "Database for Energy Efficiency Resources (DEER) Update Study

Final Report"

170 Reed Construction Data, 2010, "RSMeans Mechanical Cost Data 2010"

172 Biulding Energy Resource Center, 2006, "Exterior Lighting Power Requirements in the National Energy Codes",

http://www.energycodes.gov/sites/default/files/documents/ta_exterior_lighting_power_requirements_in_the_nation

al_energy_codes.pdf

175 Bonneville Power Administration, 2011, "Residential Behavior Based Energy Efficiency Program Profiles",

http://www.bpa.gov/energy/n/pdf/BBEE_Res_Profiles_Dec_2011.pdf

176 Shelter Analytics, 2013, "Mid-Atlantic Technical Reference Manual Version 3.0"

177 Illinois Energy Efficiency Stakeholder Advisory Group (SAG), Sep 14, 2012, "State of Illinois Energy Efficiency

Technical Reference Manual", Effective June 1, 2012

181 ACEEE, 2006, "Ripe for the Picking: Have we Exhausted the Low-Hanging Fruit in the Industrial Sector",

Research Report IE061**# Source** 

182 ACEEE, 2011, "Advancing Energy Efficiency in Arkansas: Opportunities for a Clean Energy Economy", Research

Report E104

183 ETAP, 2011, "ETAP: Wireless Lighting Controls", http://energy-solution.com/etap/wpcontent/uploads/2011/03/ETAP-Wireless-Lighting-Controls.pdf

184 Navigant Consulting, 2011, "NEEP Incremental Cost Study Report", chaired by NEEP

185 Opinion Dynamics, 2011, "Massachusetts Cross-Cutting Behavioral Program Evaluation", http://www.maeeac.org/Docs/8.1_EMV%20Page/2011/2011%20Residential%20Studies/MACC%20Behavioral%20Report%20V

olume%201%20Final.pdf

187 Nextant, 2012, "Delaware Statewide Commercial and Industrial End Use and Saturation Study", Submitetd to the

DNREC, http://www.dnrec.delaware.gov/energy/information/otherinfo/Documents/EM-and-V-guidancedocuments/Delaware%20Commercial%20Baseline%20Report%20July%202012.pdf

188 Opinion Dynamics, 2012, "Delaware Statewide Residential Baseline Study", Prepared for the DNREC,

http://www.dnrec.delaware.gov/energy/information/otherinfo/Documents/EM-and-V-guidancedocuments/Delaware%20Statewide%20Residential%20Baseline%20Study%20July%202012.pdfOptimal Energy, Inc. 

## APPENDIX **K :**  **OTHER ANALYSIS INPUT S AND ASSUPTIONS**  **, UPDATED FROM**

**PHASE 1 Screening Input**  **Value Notes** 

Years of analysis 201 4

- 2025

Real Discount Rate (RDR) 3 % The U.S. Department of Energy recommendation for projects related

to energy conservation, renewable energy, and water conservation is

a real discount rate of 3%

, as of 2010, consistent with the Federal

Energy M anagement Program (FEMP) (s ee p age 1 in

http://www1.eere.energy.gov/femp/pdfs/ashb10.pdf ).

Long Term Inflation 2%

Electric Line Loss Factors

– Energy , Capacity and

Transmission & Distribution 7

. 8 7% of

meter EIA data: Average statewide line loss factors over the period 2001

-

2010 (see http://www.eia.gov/tools/faqs/faq.cfm?id=105& t=3 )

Electric Emission Impact Factors (metric tons/MWh) EPA, 2009 State Emissions and Inputs Emission Rates

http://www.epa.gov/cleanenergy/documents /egridzips/eGRID2012V

1_0_year09_SummaryTables.pdf

Carbon Dioxide (CO 2 ) 0.66160

Nitrogen Oxide (NO X ) 0.00057

Sulfur Dioxide (SO 2 ) 0.00335

Natural Gas Emissions Factors (metric tons/MMBtu) EPA Climate Leadership Emissions Factors

http://www.epa.gov/climateleadership/documents/emission

factors.pdf

Carbon Dioxide (CO 2 ) 0.05302

Nitrogen Oxide (NO X ) 0.000047

Sulfur Dioxide (SO 2 ) 0.0000003

Petroleum Fuels Emissions Factors (metric

tons/MMBtu) EPA Climate Leadership Emissions Factors

http://www.epa.gov/climateleadership/documents/emission

factors.pdf

Carbon Dioxide (CO 2 ) 0.06759

Nitrogen Oxide (NO X ) 0.000086

Sulfur Dioxide (SO 2 ) 0.000054Optimal Energy, Inc. **Net to Gross Ratio Assumptions**

NTGR = Net

- to

- Gross Ratio

FR = free

- ridership rate as a % of program participation

SO = spillover rate as a % of program participation

NTGR = 1

– FR + SO

Net_Savings = Gross_Savings X NTGR

Net

- to

- Gross Ratios were estimated based on review of free ridership and spillover assumptions

in use by various applicable programs in other jurisdictions.

**Net**

**- to** 

**- Gross Ratios by Program** 

**Program Electric**  **Fossil Fue ls** 

Residential New Construction 0.90 0.90

Home Energy Services 0.90 0.90

Multi

- Family 0.65 0.75

Residential Products 0.90 0.90

Low Income Single Family 1.00 1.00

Residential Behavior 1.00 1.00

C&I Lost Opportunity 0.89 0.84

Small Business Retrofit 0.92 0.94

Large Business Retrofit 0.91 0.92Optimal Energy, Inc. 

## APPENDIX **L :**  **SALES FORECAST Electric Forecast (Total) - MWh** 

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Residential-SF 4,238,812 4,310,877 4,381,326 4,445,078 4,509,841 4,576,177 4,644,832 4,714,494 4,784,603 4,861,275 4,940,095 5,017,795

Residential-MF 270,787 275,391 279,892 283,964 288,102 292,339 296,725 301,175 305,654 310,552 315,587 320,551

Commercial 4,835,382 4,877,457 4,917,015 4,953,662 4,990,959 5,029,013 5,067,818 5,107,839 5,148,104 5,190,469 5,233,371 5,276,137

Industrial 2,735,062 2,753,885 2,767,582 2,775,759 2,787,096 2,800,786 2,808,763 2,814,973 2,821,500 2,819,529 2,814,307 2,809,874

**Total** 12,080,044 12,217,610 12,345,814 12,458,464 12,575,998 12,698,315 12,818,139 12,938,481 13,059,862 13,181,825 13,303,360 13,424,357

**Average Annual Growth:** 1.01%

**AVAILABLE EXISTING BUILDINGS (NOT including RENOVATION and Recent RENOVATION)**

Residential-SF 3,522,288 3,593,094 3,661,057 3,721,221 3,781,275 3,841,761 3,903,389 3,964,832 4,025,527 4,091,479 4,158,243 4,223,826

Residential-MF 240,369 244,920 249,316 253,237 257,175 261,166 265,255 269,358 273,439 277,883 282,409 286,859

Commercial 3,427,255 3,468,025 3,505,058 3,538,061 3,570,581 3,602,710 3,634,428 3,666,169 3,696,962 3,728,606 3,759,532 3,790,376

Industrial 1,938,576 1,956,815 1,969,507 1,976,432 1,986,174 1,997,855 2,003,589 2,007,379 2,011,301 2,006,804 1,999,236 1,993,192

**NEW CONSTRUCTION**

Residential-SF 53,114 54,017 54,900 55,699 56,510 57,341 58,202 59,075 59,953 60,914 61,901 62,875

Residential-MF 1,777 1,807 1,836 1,863 1,890 1,918 1,947 1,976 2,005 2,038 2,071 2,103

Commercial 102,732 103,626 104,466 105,245 106,037 106,846 107,670 108,521 109,376 110,276 111,188 112,096

Industrial 58,109 58,509 58,800 58,974 59,214 59,505 59,675 59,807 59,945 59,903 59,792 59,698

**UNAVAILABLE EXISTING BUILDINGS: Recent NEW CONSTRUCTION**

Residential-SF 478,027 478,027 478,930 480,716 483,300 486,696 490,924 496,011 501,972 508,811 516,610 524,495

Residential-MF 15,991 15,991 16,021 16,080 16,167 16,281 16,422 16,592 16,792 17,020 17,281 17,545

Commercial 924,588 924,588 925,482 927,217 929,730 933,035 937,149 942,087 947,876 954,520 962,064 969,626

Industrial 522,980 522,980 523,380 524,071 524,935 526,041 527,437 529,003 530,701 532,537 534,332 535,615

**RENOVATION**

Residential-SF 18,538 18,894 19,237 19,543 19,850 20,161 20,479 20,797 21,113 21,458 21,808 22,152

Residential-MF 1,265 1,288 1,310 1,330 1,350 1,371 1,392 1,413 1,434 1,457 1,481 1,505

Commercial 38,081 38,492 38,871 39,212 39,552 39,891 40,230 40,572 40,909 41,257 41,601 41,944

Industrial 21,540 21,724 21,854 21,927 22,029 22,152 22,217 22,262 22,309 22,271 22,202 22,146

**UNAVAILABLE EXISTING BUILDINGS: Recent RENOVATION**

Residential-SF 166,845 166,845 167,201 167,900 168,905 170,217 171,839 173,779 176,038 178,613 181,533 184,446

Residential-MF 11,386 11,386 11,409 11,454 11,519 11,604 11,710 11,836 11,984 12,153 12,346 12,539

Commercial 342,726 342,726 343,137 343,927 345,059 346,530 348,341 350,490 352,982 355,810 358,986 362,095

Industrial 193,858 193,858 194,042 194,356 194,744 195,233 195,846 196,523 197,245 198,013 198,745 199,222**Natural Gas Forecast (Total) - MMBtu**

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Residential-SF 10,171,857 10,324,594 10,469,277 10,609,183 10,564,004 10,523,441 10,484,860 10,441,842 10,383,700 10,314,301 10,240,364 10,163,815

Residential-MF 420,749 427,067 433,052 438,839 436,970 435,292 433,696 431,917 429,512 426,641 423,583 420,416

Commercial 9,738,866 9,997,966 10,129,110 10,246,696 10,257,381 10,297,402 10,343,914 10,412,291 10,481,112 10,555,292 10,646,920 10,763,321

Industrial 21,317,463 22,492,313 22,924,577 23,351,202 23,637,938 23,978,157 24,256,959 24,593,796 24,935,332 25,198,627 25,538,687 25,866,359

**Total** 41,648,935 43,241,940 43,956,016 44,645,919 44,896,292 45,234,292 45,519,428 45,879,846 46,229,655 46,494,861 46,849,555 47,213,911

**Average Annual Growth:** 1.21%

**AVAILABLE EXISTING BUILDINGS (NOT including RENOVATION and Recent RENOVATION)**

Residential-SF 8,452,417 8,602,485 8,741,983 8,874,278 8,822,304 8,775,681 8,731,734 8,684,122 8,622,418 8,550,683 8,475,711 8,402,126

Residential-MF 373,485 379,730 385,573 391,152 389,098 387,254 385,511 383,606 381,103 378,167 375,080 371,993

Commercial 6,902,781 7,153,840 7,272,929 7,374,892 7,369,732 7,392,776 7,420,985 7,469,068 7,515,600 7,565,347 7,629,873 7,723,737

Industrial 15,109,538 16,247,928 16,630,568 16,994,670 17,210,417 17,469,582 17,659,242 17,897,110 18,129,772 18,276,793 18,490,849 18,719,455

**NEW CONSTRUCTION**

Residential-SF 127,458 129,371 131,184 132,938 132,371 131,863 131,380 130,841 130,112 129,243 128,316 127,357

Residential-MF 2,761 2,802 2,841 2,879 2,867 2,856 2,846 2,834 2,818 2,799 2,779 2,758

Commercial 206,911 212,416 215,202 217,700 217,927 218,778 219,766 221,219 222,681 224,257 226,203 228,676

Industrial 452,909 477,869 487,053 496,117 502,209 509,438 515,361 522,517 529,774 535,368 542,592 549,554

**UNAVAILABLE EXISTING BUILDINGS: Recent NEW CONSTRUCTION**

Residential-SF 1,147,119 1,147,119 1,149,033 1,152,759 1,158,239 1,163,153 1,167,558 1,171,481 1,174,864 1,177,518 1,179,303 1,178,247

Residential-MF 24,846 24,846 24,887 24,968 25,087 25,193 25,289 25,374 25,447 25,504 25,543 25,520

Commercial 1,862,199 1,862,199 1,867,704 1,875,995 1,886,784 1,897,800 1,909,667 1,922,522 1,936,829 1,952,599 1,969,945 1,983,732

Industrial 4,076,178 4,076,178 4,101,139 4,135,284 4,178,492 4,227,793 4,284,322 4,346,774 4,416,383 4,493,247 4,575,706 4,640,429

**RENOVATION**

Residential-SF 44,486 45,241 45,945 46,617 46,367 46,142 45,930 45,698 45,394 45,038 44,664 44,291

Residential-MF 1,966 1,997 2,027 2,055 2,045 2,036 2,028 2,019 2,006 1,992 1,976 1,961

Commercial 76,698 79,234 80,462 81,530 81,527 81,808 82,145 82,686 83,216 83,784 84,508 85,509

Industrial 167,884 179,383 183,364 187,198 189,572 192,409 194,573 197,245 199,892 201,700 204,204 206,764

**UNAVAILABLE EXISTING BUILDINGS: Recent RENOVATION**

Residential-SF 400,378 400,378 401,132 402,591 404,722 406,602 408,258 409,701 410,912 411,820 412,371 411,794

Residential-MF 17,691 17,691 17,723 17,784 17,873 17,952 18,023 18,085 18,138 18,178 18,204 18,183

Commercial 690,278 690,278 692,814 696,579 701,411 706,240 711,351 716,798 722,786 729,304 736,391 741,665

Industrial 1,510,954 1,510,954 1,522,453 1,537,933 1,557,247 1,578,936 1,603,461 1,630,150 1,659,511 1,691,519 1,725,336 1,750,157**Petroleum Fuels Forecast (Total) - MMBtu**

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Residential-SF 6,173,655 6,066,890 5,957,825 5,845,717 5,736,844 5,636,496 5,544,879 5,454,721 5,365,376 5,278,028 5,193,654 5,110,823

Residential-MF

- - - - - - - - - - - -

Commercial 2,054,172 2,134,828 2,132,268 2,121,181 2,107,643 2,100,319 2,090,311 2,082,079 2,072,676 2,063,661 2,054,769 2,047,120

Industrial 2,368,595 2,477,566 2,523,304 2,522,005 2,536,444 2,543,878 2,538,625 2,523,435 2,519,233 2,513,279 2,512,338 2,511,944

**Total** 10,596,422 10,679,284 10,613,397 10,488,903 10,380,931 10,280,694 10,173,815 10,060,236 9,957,285 9,854,968 9,760,762 9,669,887

**Average Annual Growth:** -0.79%

**AVAILABLE EXISTING BUILDINGS (NOT including RENOVATION and Recent RENOVATION)**

Residential-SF 5,130,067 5,025,166 4,919,865 4,813,465 4,712,182 4,621,149 4,540,413 4,462,672 4,387,260 4,315,319 4,247,771 4,181,292

Residential-MF

- - - - - - - - - - - -

Commercial 1,455,970 1,534,123 1,529,156 1,516,024 1,500,874 1,492,178 1,481,117 1,472,096 1,462,201 1,452,978 1,444,157 1,439,301

Industrial 1,678,829 1,784,419 1,825,378 1,819,375 1,828,693 1,830,812 1,820,444 1,800,646 1,792,000 1,781,819 1,776,710 1,775,550

**NEW CONSTRUCTION**

Residential-SF 77,358 76,021 74,654 73,249 71,885 70,628 69,480 68,350 67,230 66,136 65,079 64,041

Residential-MF

- - - - - - - - - - - -

Commercial 43,643 45,356 45,302 45,066 44,779 44,623 44,411 44,236 44,036 43,844 43,655 43,493

Industrial 50,323 52,638 53,610 53,582 53,889 54,047 53,935 53,613 53,523 53,397 53,377 53,369

**UNAVAILABLE EXISTING BUILDINGS: Recent NEW CONSTRUCTION**

Residential-SF 696,226 696,226 694,889 692,184 688,075 682,601 675,871 667,992 658,983 648,855 637,633 626,691

Residential-MF

- - - - - - - - - - - -

Commercial 392,785 392,785 394,498 396,157 397,581 398,717 399,698 400,465 401,058 401,451 401,653 399,952

Industrial 452,906 452,906 455,222 458,509 461,768 465,334 469,058 472,670 475,960 479,161 482,235 482,973

**RENOVATION**

Residential-SF 27,000 26,473 25,941 25,401 24,884 24,416 23,998 23,592 23,196 22,815 22,455 22,100

Residential-MF

- - - - - - - - - - - -

Commercial 16,177 16,967 16,925 16,800 16,653 16,570 16,462 16,374 16,276 16,184 16,095 16,037

Industrial 18,654 19,720 20,145 20,099 20,208 20,245 20,156 19,972 19,897 19,807 19,767 19,756

**UNAVAILABLE EXISTING BUILDINGS: Recent RENOVATION**

Residential-SF 243,003 243,003 242,476 241,417 239,818 237,702 235,118 232,115 228,707 224,903 220,717 216,699

Residential-MF

- - - - - - - - - - - -

Commercial 145,597 145,597 146,386 147,134 147,756 148,231 148,624 148,908 149,104 149,203 149,209 148,337

Industrial 167,883 167,883 168,949 170,441 171,886 173,440 175,032 176,534 177,852 179,096 180,249 180,297Optimal Energy, Inc. 

## APPENDIX **M :**  **AVOIDED COSTS Avoided Electric Costs by Energy Period (2013$)** 

Summer

On-Peak Summer

Off-Peak Winter

On-Peak Winter

Off-Peak Summer

Capacity T&D

Year $/kWh $/kWh $/kWh $/kWh $/kWh-yr $/kW-yr

2014 0.111 0.034 0.104 0.041 65.0 88.0

2015 0.112 0.035 0.105 0.042 54.2 87.4

2016 0.122 0.038 0.114 0.045 47.9 87.0

2017 0.125 0.039 0.116 0.046 54.9 86.7

2018 0.131 0.040 0.122 0.048 54.7 86.3

2019 0.133 0.041 0.124 0.049 54.4 85.9

2020 0.134 0.042 0.125 0.050 54.3 85.6

2021 0.134 0.042 0.125 0.050 54.1 85.3

2022 0.138 0.043 0.129 0.051 54.0 85.1

2023 0.141 0.044 0.132 0.052 53.9 84.9

2024 0.145 0.045 0.135 0.053 53.8 84.8

2025 0.146 0.045 0.136 0.054 53.7 84.6

2026 0.152 0.047 0.142 0.056 53.6 84.4

2027 0.152 0.047 0.142 0.056 53.5 84.3

2028 0.155 0.048 0.145 0.057 53.4 84.1

2029 0.157 0.049 0.147 0.058 53.3 84.0

2030 0.160 0.049 0.149 0.059 53.3 83.9

2031 0.163 0.051 0.152 0.060 53.2 83.7

2032 0.165 0.051 0.154 0.061 53.1 83.6

2033 0.168 0.052 0.157 0.062 53.0 83.5

2034 0.173 0.054 0.162 0.064 52.9 83.4

2035 0.179 0.055 0.167 0.066 52.8 83.2

2036 0.187 0.058 0.175 0.069 52.7 83.1

2037 0.192 0.059 0.179 0.071 52.6 82.9

2038 0.192 0.059 0.179 0.071 52.6 82.9

2039 0.192 0.059 0.179 0.071 52.6 82.9

2040 0.192 0.059 0.179 0.071 52.6 82.9

2041 0.192 0.059 0.179 0.071 52.6 82.9

2042 0.192 0.059 0.179 0.071 52.6 82.9

2043 0.192 0.059 0.179 0.071 52.6 82.9

2044 0.192 0.059 0.179 0.071 52.6 82.9

2045 0.192 0.059 0.179 0.071 52.6 82.9

2046 0.192 0.059 0.179 0.071 52.6 82.9

2047 0.192 0.059 0.179 0.071 52.6 82.9

2048 0.192 0.059 0.179 0.071 52.6 82.9

2049 0.192 0.059 0.179 0.071 52.6 82.9

2050 0.192 0.059 0.179 0.071 52.6 82.9

2051 0.192 0.059 0.179 0.071 52.6 82.9

2052 0.192 0.059 0.179 0.071 52.6 82.9

2053 0.192 0.059 0.179 0.071 52.6 82.9

2054 0.192 0.059 0.179 0.071 52.6 82.9

2055 0.192 0.059 0.179 0.071 52.6 82.9

2056 0.192 0.059 0.179 0.071 52.6 82.9

2057 0.192 0.059 0.179 0.071 52.6 82.9

2058 0.192 0.059 0.179 0.071 52.6 82.9

2059 0.192 0.059 0.179 0.071 52.6 82.9

2060 0.192 0.059 0.179 0.071 52.6 82.9**Avoided Cost of Natural Gas and Petroleum Fuels (2013$/MMBtu)**

**Natural Gas Petroleum Fuels** 

Year Residential Commercial Industrial Residential Commercial Industrial

2014 6.93 6.26 6.26 25.68 20.94 18.79

2015 6.93 6.26 6.26 25.07 20.41 18.36

2016 7.03 6.36 6.36 24.69 20.20 18.07

2017 7.30 6.57 6.57 24.32 19.89 17.85

2018 7.58 6.86 6.86 24.87 20.33 18.29

2019 7.90 7.22 7.22 25.17 20.57 18.70

2020 8.15 7.48 7.48 25.43 20.75 18.89

2021 8.30 7.62 7.62 25.60 20.87 19.10

2022 8.50 7.82 7.82 25.78 21.05 19.34

2023 8.62 7.95 7.95 26.04 21.22 19.57

2024 8.77 8.08 8.08 26.24 21.34 19.76

2025 8.94 8.27 8.27 26.48 21.52 19.95

2026 9.07 8.39 8.39 26.67 21.64 20.03

2027 9.19 8.51 8.51 26.94 21.85 20.30

2028 9.29 8.61 8.61 27.22 22.06 20.56

2029 9.44 8.76 8.76 27.51 22.26 20.82

2030 9.60 8.92 8.92 27.79 22.48 21.11

2031 9.76 9.08 9.08 28.08 22.69 21.38

2032 9.92 9.24 9.24 28.37 22.91 21.66

2033 10.08 9.40 9.40 28.66 23.12 21.94

2034 10.24 9.57 9.57 28.96 23.34 22.23

2035 10.41 9.74 9.74 29.26 23.56 22.51

2036 10.58 9.91 9.91 29.56 23.78 22.81

2037 10.75 10.09 10.09 29.87 24.01 23.11

2038 10.93 10.27 10.27 30.18 24.24 23.42

2039 11.11 10.45 10.45 30.49 24.47 23.73

2040 11.29 10.64 10.64 30.81 24.70 24.03

2041 11.47 10.82 10.82 31.13 24.94 24.35

2042 11.66 11.02 11.02 31.13 24.94 24.35

2043 11.85 11.21 11.21 31.13 24.94 24.35

2044 11.85 11.21 11.21 31.13 24.94 24.35

2045 11.85 11.21 11.21 31.13 24.94 24.35

2046 11.85 11.21 11.21 31.13 24.94 24.35

2047 11.85 11.21 11.21 31.13 24.94 24.35

2048 11.85 11.21 11.21 31.13 24.94 24.35

2049 11.85 11.21 11.21 31.13 24.94 24.35

2050 11.85 11.21 11.21 31.13 24.94 24.35

2051 11.85 11.21 11.21 31.13 24.94 24.35

2052 11.85 11.21 11.21 31.13 24.94 24.35

2053 11.85 11.21 11.21 31.13 24.94 24.35

2054 11.85 11.21 11.21 31.13 24.94 24.35

2055 11.85 11.21 11.21 31.13 24.94 24.35

2056 11.85 11.21 11.21 31.13 24.94 24.35

2057 11.85 11.21 11.21 31.13 24.94 24.35

2058 11.85 11.21 11.21 31.13 24.94 24.35

2059 11.85 11.21 11.21 31.13 24.94 24.35

2060 11.85 11.21 11.21 31.13 24.94 24.35**Retail Energy Rates (2013$)**

**Electricity ($/kWh) Natural Gas ($/MMBtu)**  **Petroleum Fuels ($/MMBtu)**

Year Residential Commercial Industrial Residential Commercial Industrial Residential Commercial Industrial

2014 0.136 0.103 0.084 13.9 12.3 11.1 25.9 19.7 16.9

2015 0.137 0.103 0.084 13.6 12.0 11.2 25.5 19.3 16.6

2016 0.139 0.104 0.086 14.2 12.6 12.1 25.7 19.6 16.9

2017 0.140 0.104 0.086 14.5 12.9 12.5 26.4 20.3 17.3

2018 0.140 0.105 0.087 14.9 13.2 13.0 26.9 20.7 17.8

2019 0.140 0.104 0.087 15.1 13.4 13.2 27.3 21.2 18.1

2020 0.139 0.104 0.086 15.2 13.6 13.4 27.8 21.6 18.6

2021 0.139 0.103 0.086 15.4 13.8 13.6 28.1 22.0 18.9

2022 0.138 0.102 0.086 15.7 14.1 14.0 28.5 22.5 19.3

2023 0.138 0.102 0.087 16.0 14.4 14.4 28.9 22.9 19.7

2024 0.138 0.102 0.087 16.2 14.6 14.6 29.3 23.2 20.1

2025 0.137 0.101 0.087 16.4 14.7 14.7 29.6 23.6 20.4

2026 0.137 0.101 0.088 16.6 14.9 15.0 30.0 23.9 20.8

2027 0.137 0.101 0.088 16.7 15.0 15.1 30.3 24.2 21.1

2028 0.136 0.101 0.088 16.9 15.1 15.3 30.6 24.5 21.5

2029 0.136 0.101 0.088 17.1 15.3 15.5 30.9 24.8 21.8

2030 0.136 0.101 0.089 17.3 15.5 15.8 31.2 25.1 22.2

2031 0.136 0.101 0.089 17.6 15.7 16.1 31.5 25.4 22.3

2032 0.137 0.101 0.090 17.8 15.8 16.2 31.8 25.7 22.8

2033 0.137 0.102 0.091 18.0 16.0 16.5 32.1 26.0 23.2

2034 0.138 0.103 0.092 18.4 16.4 17.0 32.5 26.4 23.5

2035 0.140 0.105 0.094 18.8 16.7 17.5 32.9 26.9 24.0

2036 0.141 0.106 0.095 19.2 17.2 18.2 33.3 27.3 24.5

2037 0.142 0.108 0.097 19.6 17.7 18.8 33.8 27.8 25.0

2038 0.144 0.109 0.099 20.1 18.1 19.5 34.2 28.2 25.3

2039 0.145 0.111 0.100 20.3 18.3 19.7 34.6 28.6 25.9

2040 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2041 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2042 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2043 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2044 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2045 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2046 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2047 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2048 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2049 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2050 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2051 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2052 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2053 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2054 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2055 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2056 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2057 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2058 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2059 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3

2060 0.146 0.112 0.101 20.7 18.6 20.2 35.0 29.0 26.3Optimal Energy, Inc. 

## APPENDIX **N :**  **LOAD SHAPES Load Shape Name** 

(Read: BUILDING_Enduse) **Summer**

**On-peak Summer** 

**Off-peak Winter** 

**On-peak Winter** 

**Off-peak Summer** 

**Capacity T&D** 

COMMERCIAL LOAD SHAPES

GROC_ElecTotl 12.8% 17.7% 28.2% 41.3% 69% 69%

GROC_ElecCook 11.0% 14.3% 32.7% 42.0% 54% 54%

GROC_Cool 30.8% 37.4% 17.4% 14.3% 61% 61%

GROC_ElecHeat 0.0% 0.0% 22.6% 77.4% 0% 0%

GROC_ElecDHW 11.1% 11.2% 38.9% 38.8% 53% 53%

GROC_InLight 11.9% 13.4% 34.8% 39.9% 67% 67%

GROC_ElecMisc 10.4% 14.9% 30.6% 44.2% 76% 76%

GROC_Office 10.5% 14.8% 30.8% 43.9% 77% 77%

GROC_Refrig 10.7% 16.3% 28.1% 44.9% 75% 75%

GROC_Vent 9.5% 15.7% 27.8% 47.1% 76% 76%

GROC_VentVFD 9.7% 16.0% 27.7% 46.6% 77% 77%

GROC_OutLight 3.7% 17.2% 16.2% 62.9% 4% 4%

HOSP_ElecTotl 15.0% 20.4% 26.7% 37.9% 62% 62%

HOSP_ElecCook 11.5% 13.7% 34.4% 40.4% 59% 59%

HOSP_Cool 27.2% 37.2% 17.6% 18.0% 59% 59%

HOSP_ElecHeat 2.4% 4.5% 24.2% 68.9% 8% 8%

HOSP_ElecDHW 9.9% 12.3% 34.9% 42.9% 47% 47%

HOSP_InLight 10.7% 14.5% 31.7% 43.1% 72% 72%

HOSP_ElecMisc 10.6% 14.6% 31.5% 43.4% 68% 68%

HOSP_Office 10.4% 14.8% 30.7% 44.1% 73% 73%

HOSP_Refrig 9.9% 15.3% 29.1% 45.7% 73% 73%

HOSP_Vent 9.4% 15.6% 27.8% 47.1% 59% 59%

HOSP_VentVFD 9.6% 15.9% 27.6% 46.8% 77% 77%

HOSP_OutLight 3.7% 17.2% 16.2% 62.9% 4% 4%

HOTEL_ElecTotl 17.6% 20.6% 25.2% 36.7% 55% 55%

HOTEL_ElecCook 12.9% 12.3% 37.8% 37.0% 70% 70%

HOTEL_Cool 39.3% 38.4% 14.3% 8.1% 62% 62%

HOTEL_ElecHeat 0.0% 0.0% 23.3% 76.7% 0% 0%

HOTEL_ElecDHW 10.1% 12.2% 34.7% 43.1% 56% 56%

HOTEL_InLight 10.6% 14.6% 30.8% 44.0% 58% 58%

HOTEL_ElecMisc 11.1% 14.1% 32.4% 42.4% 71% 71%

HOTEL_Office 10.1% 15.1% 29.6% 45.2% 76% 76%

HOTEL_Refrig 10.1% 15.1% 29.5% 45.3% 76% 76%

HOTEL_Vent 9.5% 15.7% 27.8% 47.1% 76% 76%

HOTEL_VentVFD 9.6% 15.8% 27.7% 46.9% 77% 77%

HOTEL_OutLight 3.7% 17.2% 16.2% 62.9% 4% 4%

OFFMD_ElecTotl 21.2% 10.4% 39.7% 28.6% 61% 61%

OFFMD_ElecCook 17.5% 7.7% 53.6% 21.2% 61% 61%

OFFMD_Cool 55.8% 14.8% 24.5% 4.8% 62% 62%

OFFMD_ElecHeat 0.0% 0.0% 58.5% 41.5% 0% 0%

OFFMD_ElecDHW 9.1% 13.1% 31.8% 46.0% 55% 55%

OFFMD_InLight 16.5% 8.7% 49.9% 24.9% 69% 69%

OFFMD_ElecMisc 13.8% 11.4% 41.4% 33.4% 70% 70%

OFFMD_Office 11.8% 13.4% 35.0% 39.8% 73% 73%

OFFMD_Refrig 10.0% 15.2% 29.2% 45.5% 72% 72%

OFFMD_Vent 11.2% 3.2% 37.5% 48.1% 75% 75%

OFFMD_VentVFD 8.2% 29.3% 17.3% 45.2% 21% 21%

OFFMD_OutLight 3.7% 17.2% 16.2% 62.9% 4% 4%

RETLG_ElecTotl 23.0% 16.9% 28.3% 31.8% 53% 53%

RETLG_ElecCook 14.8% 10.5% 43.7% 31.0% 74% 74%**Load Shape Name**

(Read: BUILDING_Enduse) **Summer**

**On-peak Summer** 

**Off-peak Winter** 

**On-peak Winter** 

**Off-peak Summer** 

**Capacity T&D** 

RETLG_Cool 49.4% 30.3% 13.0% 7.4% 60% 60%

RETLG_ElecHeat 0.0% 0.0% 49.9% 50.1% 0% 0%

RETLG_ElecDHW 12.3% 10.1% 43.1% 34.6% 55% 55%

RETLG_InLight 13.0% 12.3% 38.1% 36.6% 77% 77%

RETLG_ElecMisc 12.2% 13.0% 35.8% 39.0% 77% 77%

RETLG_Office 10.7% 14.5% 31.4% 43.4% 77% 77%

RETLG_Refrig 10.0% 15.2% 29.4% 45.4% 76% 76%

RETLG_Vent 11.4% 8.0% 33.9% 46.7% 76% 76%

RETLG_VentVFD 6.9% 28.2% 17.9% 47.1% 20% 20%

RETLG_OutLight 3.7% 17.2% 16.2% 62.9% 4% 4%

RST2_ElecTotl 14.7% 17.5% 30.0% 37.9% 67% 67%

RST2_ElecCook 15.0% 10.3% 44.3% 30.4% 72% 72%

RST2_Cool 35.3% 38.8% 15.2% 10.7% 61% 61%

RST2_ElecHeat 0.0% 0.0% 26.9% 73.1% 0% 0%

RST2_ElecDHW 13.3% 9.0% 45.7% 31.9% 53% 53%

RST2_InLight 14.1% 11.2% 41.3% 33.4% 77% 77%

RST2_ElecMisc 12.6% 12.7% 37.0% 37.8% 77% 77%

RST2_Office 11.2% 14.1% 32.7% 42.1% 77% 77%

RST2_Refrig 10.2% 15.0% 29.8% 45.0% 76% 76%

RST2_Vent 9.3% 15.4% 27.8% 47.5% 73% 73%

RST2_VentVFD 10.7% 17.7% 27.3% 44.3% 77% 77%

RST2_OutLight 3.7% 17.2% 16.2% 62.9% 4% 4%

WRHS_ElecTotl 11.4% 16.1% 29.2% 43.3% 72% 72%

WRHS_ElecCook 17.2% 8.0% 52.4% 22.4% 57% 57%

WRHS_Cool 44.1% 48.5% 4.8% 2.6% 62% 62%

WRHS_ElecHeat 0.0% 0.0% 29.6% 70.4% 0% 0%

WRHS_ElecDHW 12.6% 9.6% 44.8% 33.0% 54% 54%

WRHS_InLight 14.6% 10.6% 44.3% 30.5% 67% 67%

WRHS_ElecMisc 14.5% 10.7% 43.5% 31.3% 74% 74%

WRHS_Office 11.4% 13.8% 33.9% 40.8% 69% 69%

WRHS_Refrig 10.8% 16.4% 28.0% 44.8% 74% 74%

WRHS_Vent 9.4% 15.6% 27.8% 47.2% 76% 76%

WRHS_Vent 9.9% 16.3% 27.6% 46.2% 77% 77%

WRHS_OutLight 3.7% 17.2% 16.2% 62.9% 4% 4%

SCHL_ElecTotl 12.5% 8.1% 40.4% 39.0% 21% 21%

SCHL_ElecCook 5.5% 5.1% 52.6% 36.8% 7% 7%

SCHL_Cool 47.8% 18.5% 26.4% 7.3% 59% 59%

SCHL_ElecHeat 0.0% 0.0% 42.3% 57.7% 0% 0%

SCHL_ElecDHW 14.3% 8.4% 50.7% 26.6% 36% 36%

SCHL_InLight 5.0% 6.4% 49.0% 39.5% 10% 10%

SCHL_ElecMisc 4.0% 8.1% 43.0% 44.9% 5% 5%

SCHL_Office 3.9% 8.6% 41.3% 46.2% 10% 10%

SCHL_Refrig 10.2% 15.0% 29.8% 45.0% 76% 76%

SCHL_Vent 7.8% 3.3% 36.4% 52.4% 37% 37%

SCHL_VentVFD 11.5% 26.9% 20.0% 41.6% 59% 59%

SCHL_OutLight 3.7% 17.2% 16.2% 62.9% 4% 4%

OTHER_ElecTotl 17.7% 14.9% 30.7% 36.7% 50% 50%

OTHER_ElecCook 13.0% 12.2% 39.3% 35.6% 44% 44%

OTHER_Cool 49.2% 25.6% 16.4% 8.9% 60% 60%

OTHER_ElecHeat 0.0% 0.0% 47.9% 52.1% 0% 0%

OTHER_ElecDHW 10.8% 11.5% 37.8% 39.9% 47% 47%**Load Shape Name**

(Read: BUILDING_Enduse) **Summer**

**On-peak Summer** 

**Off-peak Winter** 

**On-peak Winter** 

**Off-peak Summer** 

**Capacity T&D** 

OTHER_InLight 11.9% 13.3% 35.6% 39.2% 51% 51%

OTHER_ElecMisc 11.3% 13.8% 33.7% 41.1% 54% 54%

OTHER_Office 10.5% 14.7% 30.9% 43.9% 63% 63%

OTHER_Refrig 9.9% 15.3% 29.0% 45.8% 72% 72%

OTHER_Vent 9.8% 5.3% 35.4% 49.5% 66% 66%

OTHER_Vent 9.4% 27.3% 19.3% 43.9% 34% 34%

OTHER_OutLight 3.7% 17.2% 16.2% 62.9% 4% 4%

Continuous 9.5% 15.7% 27.8% 47.0% 77% 77%

Streetlighting_OutLight 7.3% 17.9% 19.5% 55.3% 19% 19%

Data Center_InLight 9.5% 15.7% 27.8% 47.0% 19% 19%

Data Center_Cool 9.5% 15.7% 27.8% 47.0% 16% 16%

Data Center_ElecMisc 9.5% 15.7% 27.8% 47.0% 19% 19%

RESIDENTIAL LOAD SHAPES

Res SF_ElecTotl 14.2% 18.0% 27.0% 40.9% 44% 44%

Res SF_ElecHeat 0.0% 0.0% 32.0% 68.0% 1% 1%

Res SF_Cool 44.0% 41.4% 5.6% 8.9% 70% 70%

Res SF_Refrig 10.6% 17.1% 27.1% 45.2% 87% 87%

Res SF_Freezer 11.0% 16.8% 28.0% 44.2% 97% 97%

Res SF_ElecCook 10.7% 10.6% 39.3% 39.4% 48% 48%

Res SF_Dishwash 11.0% 11.8% 36.8% 40.3% 34% 34%

Res SF_ElecMisc 9.2% 16.0% 26.8% 48.0% 85% 85%

Res SF_ElecDryr 11.4% 11.0% 39.1% 38.6% 45% 45%

Res SF_ElecDHW 7.8% 13.0% 30.0% 49.1% 31% 31%

Res SF_ClWash 9.2% 12.7% 33.4% 44.8% 40% 40%

Res SF_PoolSpa 12.0% 13.1% 34.7% 40.1% 70% 70%

Res SF_ColorTV 10.8% 14.4% 30.9% 43.9% 78% 78%

Res SF_InLight 7.7% 13.0% 30.8% 48.5% 12% 12%

Res SF_OutLight 7.7% 13.0% 30.8% 48.5% 12% 12%

Res MF_ElecTotl 13.4% 17.7% 27.4% 41.6% 69% 69%

Res MF_ElecHeat 0.0% 0.1% 34.2% 65.7% 2% 2%

Res MF_Cool 42.5% 41.5% 6.6% 9.3% 97% 97%

Res MF_Refrig 10.6% 17.1% 27.1% 45.2% 87% 87%

Res MF_Freezer 11.0% 16.8% 28.0% 44.2% 97% 97%

Res MF_ElecCook 10.9% 10.4% 40.3% 38.4% 48% 48%

Res MF_Dishwash 11.3% 11.5% 38.4% 38.8% 36% 36%

Res MF_ElecMisc 9.4% 15.8% 27.6% 47.2% 84% 84%

Res MF_ElecDryr 11.8% 10.6% 40.7% 36.9% 44% 44%

Res MF_ElecDHW 7.8% 13.1% 30.3% 48.9% 29% 29%

Res MF_ClWash 9.4% 12.4% 34.6% 43.6% 39% 39%

Res MF_PoolSpa 12.0% 13.1% 34.7% 40.1% 70% 70%

Res MF_ColorTV 10.4% 14.7% 30.1% 44.7% 81% 81%

Res MF_InLight 7.2% 13.7% 28.9% 50.3% 13% 13%

Res MF_OutLight 7.2% 13.7% 28.9% 50.3% 13% 13%

INDUSTRIAL LOADSHAPES

Industrial_CompIndustrial 31.3% 2.1% 62.4% 4.2% 45% 45%

Industrial_InLight 29.0% 4.4% 57.8% 8.8% 73% 73%

Industrial_Cooling 46.0% 26.0% 18.0% 10.0% 81% 81%Optimal Energy

, Inc

. 

## APPENDIX O **: RATE AND BILL IMPACT**  **S MEMO**Optimal Energy, 1 0600 Route 116 Suite 3 • Hinesburg, VT 05482 • 802.482.5600

www.optenergy.com • info@optenergy.com 

## MEMORANDUM

**To:** DNREC

**From:** Optimal Energy

**RE:** Rate & Bill A nalysis

**Date:** June 1 6 , 2014



### INTRODUCTION **& SUMMARY OF RESULTS**

Optimal Energy’s recent study, Study of Potential for Energy Savings in Delaware (“the

potential s tudy”) indicates that pursuing energy efficiency resources in Delaware would be

highly cost

- effective with a Total Resource benefit

- cost ratio of 2.4 , resulting in savings to the

Delaware economy of $2.3 billion in present value net benefits, at an average levelized cost of

$0.021/kWh and $2.8 0 /MMBtu. This is approximately one

- seventh of the cost of alternative

supply

- side energy resources. 1 As a resul t, capturing this energy resource will serve to

significantly lower the overall costs of meeting Delaware’s electricity and natural gas needs.

That is, Delaware customers’ energy bills will go down. As described in more detail later, electric

and gas rates will increase slightly in the short term, 2 but these increases can easily be offset by

participating in efficiency programs. For example, a typical residential customer only needs to

install three CFLs to overcome the small electric rate increase.

The co untervailing impact s of efficiency on Delaware’s energy rates and bills result from

two effects. First, the amount of energy consumed decreases as efficiency is improved. Because

the utility industry is highly capital intensive, there are significant costs associated with the

existing system infrastructure that are relatively fixed in the short term. Therefore, as energy

consumption drops, these fixed costs must be recovered over a smaller volume of energy sales,

leading to an increase in the per unit price . Second, and to a much lesser extent, the investment

in the efficiency programs must also be recovered over this same reduced amount of energy

sales. Offsetting these rate effects are savings that come from avoiding the variable costs of fuel

and maintena nce that would have been incurred to meet the higher energy loads in the absence

of energy efficiency, and overall market clearing price reductions (“demand reduction induced

price effects” or DRIPE) as demand is marginally lowered on the PJM electric grid

.

This analysis considers the impacts on consumer retail rates and bills from Delaware

pursuing the energy efficiency programs described in the potential study. 3 We separately

analyze overall system impacts for all customers, the impacts for average custom ers who choose

to participate in programs

, and the impacts for those who choose not to participate or adopt any

efficiency improvements (“non

- participants”) . Non

- participants will experience modest short

1 Delaware’s residential Standard Offer Service

- $0.159/kWh

- is used as comparison

2 “Short term” refers to 2014

- 2016 (the first three years of the analysis). “Long term” refers to 2014

- 2025 (the full

study period). This language is used frequently throughout the document to refer to the se time frames.

3 The analysis covers both electric and gas, but not unregulated petroleum fuels.Optimal Energy

, Inc

. 2 term increases in their rates and

– because their ener gy usage is presumed to remain constant

–

energy bills). However, it is important to realize that a well

- designed, comprehensive portfolio

of programs such as the one described in the potential s tudy typically enjoy s high participa tion

levels , with the major ity of consumers adopting some efficiency measures. As a result, while

rates will increase slightly, the majority of Delaware consumers will enjoy lower overall energy

costs over the long term

.



### Results

The analysis compares the first three years (2014

- 20 16) of efficiency program activity

described in the potential s tudy to a business

- as

- usual scenario with no energy efficiency

programs or cost recovery on gas and electric rates. This methodology is necessary to isolate the

impacts of the efficiency investments, which, unlike traditional supply side resources, are paid

for up front but continue to “generate” energy over the course of their life . The results at the

statewide level over both the short term and the long term (to account for the lifetime of the

efficiency measures) are summarized in Figure 1 below.



### Figure 1 | Summary of Statewide Bill Impacts **Relative to Business**

**- As** 

**- Usual** 

Figure 1 illustrates the concept described above of short term rate increases accompanied by

participant bill redu ctions and long term system benefits. On both the gas and electric side, non

participant s’ bills increase by roughly 0.9 % in the short term (equivalent to the rate increase)

. Meanwhile, program participants see net bill reductions ranging from 2% (gas) to 8% (electric)

, -14% -12% -10%

-8% -6% -4% -2% 0% 2% 4%

Short-Term

(2014-2016) Long-Term

(2014-2025) Short-Term

(2014-2016) Long-Term

(2014-2025) Non-Participant

(= rate impact)

Participant

Average Ratepayer **ELECTRIC GAS** Optimal Energy

, Inc

. 3 even when incorporating the higher rates. Average ratepayers represent the net bill impact on

the customer base as a whole. The impact on average ratepayers is calculated as the sum of bill

impacts divided by the total number of customers. T he fact that bill impacts on average

ratepayers are positive (i.e. higher bills) in the short term indicates that the total cost associated

with higher rates is greater than the sum of the bill reductions experienced by program

participants.

Participant b ill impacts improve (i.e., lower bills) over the long term because efficiency

measures continue to save energy over the course of their measure life, accumulating savings

each year compared to business

- as

- usual. Over the long term, participant bill savings range

from 5% (gas) to 1 4 % (electric)

. Long term bill impacts for average ratepayers are lower for the

same reason ; lifetime energy savings from program participants outweigh the total cost paid by

all ratepayers to fund those efficiency measures. This is true for both the electric and gas sides,

as shown in Figure 1. Rate impacts (i.e. non

- participant bill impacts) appear smaller over the

long term simply because the impact of cost recovery is averaged over a longer timeframe.



### Scope

**, Assumptions** 

**, and Limitations** 

The scope of the analysis is constrained in several key ways which are summarized below:

 The analysis considers the rate impacts of cost recovery for the years 2014

- 2016 only. Due

to the averaging of impacts over time, there is a natural t radeoff between the length of

the study and the applicability of the results to any one year. 4 The 2014

- 2016 timeframe

was chosen to give a reasonably accurate picture of the rate and bill impacts Delaware

can expect in the near term.

 While the analysis o nly considers three years of costs , the study period extends many

years long er . This methodology is necessary in order to capture the long term rate and

bill impacts of the efficiency measures installed during those initial years. U nlike

traditional supply side resources, efficiency resources are paid for up front but continue

to impact rates and bills for the duration of the installed measures’ lives. 5

 The analysis considers only three generic customer classes

– residential, commercial, and

industrial. W hile this is a typical division that aligns with the potential s tudy and other

key data sources, it results in some significant generalizations. In actuality , the range of

impacts will be much broader than those put forth in this memo , particularly for the

commercial and industrial sectors, where individual usage can vary significantly from

the average usage . For example, customers with consumption levels significantly

4 For example, if the study had looked at the full ten years corresponding to the Potential Study, the average rate and

bill impacts would be skewed toward the middle of the study period and would not be represent the impacts on

ratepayers during the initial years of the program.

5 For example, if a customer installs LED lighting in 2016, they will receive a rebate which was funded by the cost

recovery rider . However, that customer will experience energy savings, and thus a bill reduction, throughout the

life of the LED , which is approximately 10 years. Thus, because the timing of the costs and benefits of efficiency

investments are not aligned, it is necessary to carefully account for the difference in timing between costs and

benefits

.Optimal Energy

, Inc

. 4 different from the average, and/or participants with savings levels considerably differen t

from the average, will experience bill impacts that differ from those presented here.

We also note several key assumptions that affect the results of the analysis:

 The analysis includes the Demand Reduction Induced Price Effect (DRIPE). 6 The values

are d erived from a recent study of avoided costs in Maryland. 7

 The rate classes that serve as the basis for the rate analysis are specific to Delmarva

Power and Light (DPL )

. DPL covers roughly 38 % of the statewide electric load. 8

 The long term rate forecasts a re rough estimates based on an average growth rate ; they

do not include any specific assumptions about the timing or outcomes of future rate

cases.

 The analysis assumes the programs are mostly, but not entirely, funded through a cost

recovery rider on customers’ gas and electric bills. We assume 85% of the budget would

be funded through ratepayers , while 15% of the funding could come from alternative

sources, such as forward capacity market revenues and/or RGGI proceeds. Alternative

funding to comple ment a cost recovery rider is common in other states with aggressive

energy efficiency targets.

The many limitations resulting from the scope and assumptions mean these results should

not be viewed as detailed predictions of the rate and bill impacts for a ny one customer in any

one year. Rather, the findings are intended to be illustrative of the typical impacts that can be

expected over the short and long term , both in aggregate for all customers within each sector

and for typical customers

. The findings f rom this analysis are consistent with those from similar

analyses conducted in other states with aggressive energy efficiency programs. 9



### DETAILED RESULTS

**Rate Impacts**

We make the following observations from o ur analysis of how gas and electric rates are

likely to change due to efficiency program activity:

 In the short term, while total costs of energy services in Delaware will decrease, rates will

increase for all customer classes. The increase results from two components: 1) reduced

6 Demand Reduction Induced Price Effect (DRIPE) refers to the reduction i n prices in the wholesale markets for

capacity and energy resulting from the reduction in quantities of capacity and of energy required from those

markets due to the impact of efficiency and/or demand response programs. Thus DRIPE is a measure of the value

of efficiency in terms of the reductions in wholesale prices seen by all retail customers in a given period.

7 Exeter Associates, Inc. April, 2014. Avoided Energy Costs in Maryland

– Assessment of the Costs Avoided through

Energy Efficiency and Conservati on Measures in Maryland.

8 http://www.eia.gov/electricity/state/delaware/pdf/delaware.pdf

9 http://www.narucmeetings.org/Presentations/Woolf

- efficiency

- bill

- impacts.pdfOptimal Energy

, Inc

. 5 energy usage causing the utilities’ fixed cost to be spread over less electricity sales; and 2)

the cost recovery that provides program funding.

 In the long term, rate impacts are relatively minor as the avoided costs of capacity,

transmissi on and distribution all reduce the utilit ies’ expenses and therefore lower their

revenue requirements , thus putting downward pressure on rates throughout the life of

the installed measures. However, at the same time

, reductions in electricity usage

continue to exert upward pressure on rate s to recover utility fixed costs.

 Price suppression from DRIPE puts downward pressure on rates in the medium term by

reducing the cost of energy and capacity. That cost gets rolled into the “generation”

component of rates. 10

 Differe nces in rate impacts between sectors are due to differences in tariff structures as

well as differences in savings and avoided costs that feed back into rates

.



### Bill Impacts

We make the following observations from our analysis of how electric bills are likely to

change due to e fficiency program activity:

 Participants in energy efficiency programs will experience bill reductions as the savings

attributed to energy efficiency measures outweigh the additional cost associated with

cost recovery

.

 Non

- participants will see bill incre ases roughly proportional to the rate increase due to

the fact that all customers pay the cost recovery rider

.

 Bill impacts are highly dependent on participation rates, which vary considerably by

program. In the residential sector, for example, the behavio r and lighting programs are

expected to reach the vast majority of customers over the long term but will deliver a

relatively small amount of savings to each customer

. These ‘broad’ programs ensure that

everyone benefits by maximizing participation. In con trast, some programs (e.g., home

energy retrofit) will provide greater savings but for a small er subset of customers.

C ustomers who participate in the se ‘deep’ programs achieve significant bill savings over

time. The bill impacts identified in this analysi s represent average customers

participating in average programs, and thus should not be associated with a specific

program.

 Differences between sectors are due to two factors: 1) the cost of saved energy, and 2)

depth of savings. The cost of saved energy differs by sector because the programs,

measures, and delivery mechanisms are different for different customer classes. For

example, the process of working with a large industrial customer, including getting

access to the facility and working with the bui lding manager, are very different from a

typical residential household. Similarly, the measures installed would be very different,

resulting in different depths of savings.

10 In DPL’s tariffs the “generation” component is equivalent to the “Supply Capacity, Energy, and Ancillary” chargeOptimal Energy

, Inc

. 6 

### Table **1 | Electric Participant Bill Impact Examples** 

**Typical Building Type Residential**  **Commercial Industrial** 

**Average Annual Usage 10** 

**, 1**  **0 0**  **kWh/yr 8**  **6**

**, 4**  **0 0**  **kWh/yr 2** 

**, 954** 

**, 3**  **00 kWh/yr** 

Participation in

Broad

Program s Savings

(kWh/yr)

3 CFLs 105

kWh/yr Retrofit 6

4

- lamp T12 to

super T8 1,313

kWh/yr 2% facility

savings 59,0 86

kWh/yr

Net Annual

Bill Impact ($) - $5

- $18

- $ 2, 6 89

Participation in

Deep

Program s Savings

(kWh/yr)

Home

retrofit with

15% Savings 1,568

kWh/yr Complete

Small Business

Direct Install

participation

with 20%

savings 17, 28 0

kWh/yr 10% facility

savings 296,899

kWh/yr

Net Annual

Bill Impact ($) - $220

- $ 1 ,3 87

- $ 27

, 450

Table 1 shows some examples of typical participants in each sector and the bill impacts that

would result from different depths of participation. While the participants in all the examples

show net bill reduct ions, it is notable that, at least in the residential sector, it only takes a few

CFL light bulbs to completely offset the rate increase and actually lower bills. It is expected that

over the course of the potential study period (2014

- 2025) participation in the ‘broad’ programs

will exceed 100%

– that is, most ratepayers will participate at least once and many will

participate more than once. 11 In the residential sector, these ‘broad’ programs correspond to

lighting and behavior. In the commercial sector th is role is fulfilled by the small business direct

install (SBDI) program. The industrial sector, which is characterized by fewer customers with

higher energy usage, generally already has high participation levels because they are good

candidates for effici ency. . Furthermore, industrial customers tend to participate more than once,

adding to their energy savings year after year and lowering their overall cost of energy services.

11 A 2013 study by Synapse Energy Economics looked at efficiency program participation rates in Rhode Island. The

analysis examined the utilit y’s billing database and program records and concluded that, while rates differed

between customer classes, over time most customers participate at least once and many participate more than

once. Since Rhode Island has a similar population to Delaware, and runs aggressive efficiency programs like

those proposed in the Potential Study, we assume Synapse’s findings are broadly applicable to Delaware.

http://aceee.org/files/pdf/conferences/eer/2013/5C

- Woolf.pdfOptimal Energy

, Inc

. 7 

### Table **2 | Gas Participant Bill Impact Examples** 

**Typical Building Type Residentia**  **l Commercial**  **Industrial**

**Average Annual Usage 69 MMBtu/yr**  **7 40**  **MMBtu/yr 153,**  **1 00**  **MMBtu/yr**

Participation

in Broad

Programs Savings

( MMBtu /yr) 2 faucet

aerators and

a low flow

showerhead 1.03

MMBtu/yr Programmable

thermostat for

3,000 sq ft

office 26

MMBtu/yr

1.5% full

facility

savings 2,29 7

MMBtu/yr

Net Annua l

Bill Impact

($) - $ 8

- $222

- $1,995

Participation

in Deep

Programs Savings

( MMBtu /yr)

Home

retrofit with

15% Savings 10.37

MMBtu/yr Heat and hot

water project

with 15%

savings 14 8

MMBtu/yr

10%

facility

savings 15,3 10

MMBtu/yr

Net Annual

Bill Impact

($) - $129

- $1,535

- $75,5 11

Table 2 shows similar examples of program participation, but for natural gas. Like the

electric examples, the low participation scenario corresponds to ‘broad’ programs while the

deep participation scenario corresponds to ‘deep’ program s. It is again notable that the

installation of only a few measures, faucet aerators and a low flow showerhead in the

residential case, is enough to offset the rate increase and result in a net bill reduction.

Figures 2, 3 and 4 compare short and long term bill impacts for each of the sectors analyzed.



### Figure **2 | Residential Bill Impacts**  **Summary**

-14% -12% -10%

-8% -6% -4% -2% 0% 2% 4%

Short-Term

(2014-2016) Long-Term

(2014-2025) Short-Term

(2014-2016) Long-Term

(2014-2025) Non-Participant

(= rate impact)

Participant

Average Ratepayer **ELECTRIC GAS** Optimal Energy

, Inc

. 8 As would be expected, non

- participants show a small bill increase which is due to the

increase in rates associated with the cost recovery to fund the program s. Program participants,

on the other hand, show a bill reduction due to lower energy use as a result of efficiency

measures. The bill reduction is even larger over the long

- term because efficiency measures

continue to reduce consumption throughout their m easure life. The a verage electric customer

see s a slight bill reduction over both the short term and the long term, while the average gas

customer see s a slight bill increase in the short term but a bill reduction in the long term. This

finding indicates t hat the cumulative bill reduction of program participants is greater than the

cumulative bill increases experienced by all ratepayers who pay for cost recovery

.

Bill impacts in the commercial (Figure 3) and industrial (Figure 4) sectors exhibit similar

pa tterns to the residential sector.



### Figure 3 **| Commercial Bill Impacts Summary**

-18% -16% -14% -12% -10%

-8% -6% -4% -2% 0% 2% 4%

Short-Term

(2014-2016) Long-Term

(2014-2025) Short-Term

(2014-2016) Long-Term

(2014-2025) Non-Participant

(= rate impact)

Participant

Average Ratepayer **ELECTRIC GAS** Optimal Energy

, Inc

. 9 

### Figure 4 **| Industrial Bill Impacts Summary**

**Additional Considerations**

While this analysis is useful for broadly understanding the impact of efficiency program

activity on the rates and bills of various classes of Delaware ratepayers , it does not capture

several of the significant benefits of efficiency programs, including those listed below. For this

reason, the res ults of this analysis should be viewed as a conservative estimate of the rate and

bill impacts , meaning that actual benefits are likely to be higher

.

 Environmental benefits due to the avoided emissions of CO 2 , NO X and SO 2

.

 Economic benefits due to increased circulation of money in the local economy.

 Reduced volatility of electric rates due to reduced demand.

 Reduced risk to utility shareholders 12



### METHODOLOGY AND ASSU **MPTIONS**

The methodology for estimating rate and bill impacts from efficiency program s proceeded

in the following manner:

1. Calculate the impact on the gas and electric sales.

2. Calculate the impact on gas and electric rates.

12 http://www.ceres.org/resources/reports/practic ing

- risk

- aware

- electricity

- regulation -14% -12% -10%

-8% -6% -4% -2% 0% 2% 4%

Short-Term

(2014-2016) Long-Term

(2014-2025) Short-Term

(2014-2016) Long-Term

(2014-2025) Non-Participant

(= rate impact)

Participant

Average Ratepayer **ELECTRIC GAS** Optimal Energy

, Inc

. 10 3. Estimate the level of participation within each customer class.

4. Calculate the average impact on customer bills for part icipants, non

- participants, and

average customers.

The rest of this section provides additional detail on each step.



### Sales **A djustments** 

The sales forecast is the basis for determining future rates, and thus adjustments to sales are

the first step in a rate analysis. Energy efficiency programs reduce the energy and capacity

forecast by promoting more efficient end use technology, practices and behavior that reduce

consumption. The adjusted forecast is calculated by subtracting the forecasted energy and

demand savings in the Report from the business

- as

- usual forecast. In the rate adjustment step,

avoided costs and revenue requirements due to efficiency programs are divided by the adjusted

forecast to determine how those impacts would be spread across the rate base.



### Rate **A djustments** 

Energy efficiency programs impact gas and electric rates in a variety of ways. Some of the

components of electr ic rates increase, while others decrease or are unaffected. These impacts are

summarized below:

 A dditional charges

– includes transmission lost revenue recovery charge, distribution lost

revenue recovery charge, and the cost recovery rider

.

 Charges l owered due to efficiency

– includes the transmission charge , the distribution

charge, and the generation charge, which is due to avoided capacity and price

suppression.

 Charges that are not affected

– includes the customer charge, demand charge (only for C& I),

and other charges such as the renewable energy and low income charge

.

Changes to individual components are described in detail below:

 The **lost revenue recovery adjustment** includes the change to rates that will allow

utilities to collect fixed costs tha t are “lost” as a result of reductions in sales from energy

efficiency efforts. Utilities recover the distribution lost revenues through the decoupling

mechanism in Delaware. Utilities recover the transmission lost revenues through

periodic adjustments tha t are made to the PJM Regional Network Service charge. We

assume that utilities collect both the transmission and distribution lost revenues through

the average life of the energy efficiency savings. 13

 The **cost recovery rider** is the additional charge levie d on all customers’ rates that

provides the primary funding source for the programs. This charge is calculated by

dividing the total budget for electric programs, as estimated in the Report, by the

13 Over time we would expect these lost revenues to be less than what we have assumed because efficiency

investments will help utilities reduce their fixed

- cost investments.Optimal Energy

, Inc

. 11 statewide sales forecast , and then grossed up to account f or the risk assumed by the

utility

.

 The **avoided transmission and distribution adjustments** include the reduction in rates

due to reducing transmission and distribution costs over time. These rate adjustments are

determined by multiplying avoided cost value s by the net energy efficiency demand

savings forecasted in the potential s tudy

. On the electric side the avoided costs of

transmission and distribution were provided by DPL. On the gas side the avoided costs

of distribution were calculated as the full avo ided cost used in the potential s tudy, minus

the Gas Cost Rate component of each tariff. The rationale for this calculation is that the

full avoided costs used in the potential study correspond to the costs of supply plus

distribution, while the Gas Cost R ate corresponds to supply only , and thus the difference

is roughly the avoided cost of distribution. U tilities experience these cost savings through

the average life of the efficiency measures.

 The **avoided capacity adjustment** includes the reduction in rate s as a result of reducing

generation capacity requirements over time. The rate adjustments are calculated as the

avoided capacity cost values provided by DPL multiplied by the net energy efficiency

demand savings. Since the analysis of efficiency potential did not consider peak day gas

savings, this component is ignored for the gas rate analysis.

 The **price suppression adjustment** includes the reduction in rates as a result of price

suppression in the regional wholesale energy and capacity markets, also known as the

demand reduction induced price effects (DRIPE). This calculation is based on estimates

of price suppression effects in New England

, as provided in the 2013 AESC study , and

scaled to Delaware’s load

. 14 Price suppression effects are relatively short l ived as the

market adjusts to reduced demand, and thus these effects last for fewer years than the

average life of the energy efficiency savings.

The adjustments described above are added up and combined with the business

- as

- usual

rate to determine the tot al adjusted rate.



### Participation **E stimates** 

We estimated p articipation rates based on the programs and ramp

- up schedules forecasted

in the potential study. As is discussed earlier in this memo, participation rates vary

considerably by program. Some programs reach many customers, but achieve a small amount

of savings in each, while other programs reach comparatively few customers, but go ‘deep’ in

each. Since this analysis was conducted at the sector level the participation rates represent an

average depth of participation that accounts for the differences between programs and

measures.

Over the course of the potential study period (2014

- 2025) we expect that the majority of

customers will participate at least once, while many will participate multiple times, likely in

14 http://www.synapse

- energy.com/Downloads/Syn apseReport.2013

- 07.AESC.AESC

- 2013.13

- 029

- Report.pdfOptimal Energy

, Inc

. 12 multiple programs. This assumption is based on experience in other states with long

- running

aggressive efficiency programs, and is supported by evaluation studies.



### Bill **Impacts**

Once the rate impacts are determined and participation levels are estimated

, calculating the

bill impacts is straightforward. For bill impacts, it is important to distinguish between the

impacts on three different customer types: non

- participants

, participants , and the average

customer.

B ill impacts are calculated in two steps. First, we estimate the amount by w hich a typical

customer’s consumption is reduced by participating in each program, based on typical

customer consumption levels and average energy savings of participants by sector . Second, the

adjusted consumption is multiplied by the adjusted rate to det ermine the net bill impact.

For **non**

**- participants**  , the bill impacts are identical to the rate impacts. For example, if rates

are expected to increase by 1% on average over the long

- term, then non

- participant’s bills will

also increase by 1% on average over the long

- term. In all scenarios, non

- participant monthly

savings are assumed to be zero; that is, we assume there are no impacts from market

transformation on non

- participants.

For **program participants**  , the bill impacts are the combined effect of the rat e impacts and

the savings from efficiency measures . For example, if rates are expected to increase by 1% on

average over the long term, and the customer participates in an efficiency program that is

expected to reduce energy consumption by 7% on average ov er the long term, then the

participants’ bills will be reduced by 6% on average over the long

- term.

For the **average customer** , the bill impacts represent a weighted average of the non

participant and participant bill impacts. The impact is calculated as the sum of rate impacts

(total rate increase multiplied by the number of customers) minus the sum of participant

savings (total energy savings), divided by the number of customers. Thus the average customer

represents the impact of efficiency programs on the customer base as a whole.Optimal Energy

, Inc

. 

## APPENDIX P **: JOB**  **IMPACTS MEMO**Optimal Energy, Inc. • 10600 Route 116, Suite 3, Hinesburg, VT 05461 • 802

- 482

- 5600

www.optenergy.com 

## MEMORANDUM

**INTRODUCTION**

This memo presents our estimate of the job impacts of the energy efficiency investments

proposed in Optimal Energy’s recent study, Study of Potential for Energy Savings in Delaware

(“the potential study”) . Rather than conduct a traditional macroeconomic an alysis, we have

developed our estimate from a set of similar studies conducted in different states by different

authors.

Investments in energy efficiency commensurate with the levels forecasted in the potential

study will support between 3,000 and 4

, 8 00 j ob

- years annually. 1 This estimate is derived from a

meta

- analysis of macroeconomic studies which quantified the net job impact from investments

in energy efficiency.

In general, energy efficiency investments create net positive economic impacts in a given

region. 2 In other words, usually more jobs are created through these projects than would have

been created by the activities they displace, such as electric generation or the sale of fuel oil, or

spending on other goods and services rather than paying mor e for efficient equipment. This net

positive impact is due to the fact that participants save money on their energy bills , which adds

to the local economy , and usually more of the dollars spent directly on energy efficiency remain

in the local economy than dollars spent on “traditional” electric generation or fossil fuel

purchases. Energy efficiency is also a more labor

- intensive activity than typical generation or

fuel sales, so for any given amount of e fficiency spending, more local jobs are created than lost

by reducing spending on electric generation.

1 One job

- year is equivalent to one full time job for one year. The job

- years created by one year of investment will

extend over multiple years. For example, 6,000 job

- years may be cre ated as 600 jobs a year for 10 years.

Furthermore, the number of job

- years likely represents a mix of job impacts that are temporary (lasting from one

to several years) or enduring (lasting for the majority of the analysis period).

2 Economic Impacts and P otential Air Emission Reductions from Renewable Generation & Efficiency Programs in New

England, prepared for the Regulatory Assistance Project by Synapse Energy Economics, April 2005. To: DNREC

From: Optimal Energy, Inc

Date: June 1 8

, 2014

Subject: Job Impacts of Energy Efficiency InvestmentsOptimal Energy

, Inc

. 2 

### SUMMARY OF **FINDINGS**

**Estimate Based on ACEEE Job Impacts Methodology**

As cited by the American Council for an Energy Efficiency Economy (ACEEE), $1 milli on

spent in the U.S. economy supports 17 jobs on average. 3 These include direct, indirect, and

induced jobs. Greater investment in certain industries may produce greater or fewer jobs than

this average. Investments in energy efficiency will create net jobs in two ways. First, direct

efficiency spending will provide opportunities in more labor intensive industries like

construction. Second , because energy bill savings are invested in other areas of the economy, job

impacts continue for the long term. Because energy savings from efficiency are many times

greater than the initial investment, this effect is much larger than the effect from the initial

investment. 4

Using this methodology, energy efficiency in Delaware will support approximately 3,000

jobs annually. This is based on the program potential level spending forecast in the potential

study. The steps involved in this calculation are described in more detail below.

The first step is to calculate the difference in net job creation from direct invest ment in

efficiency programs compared to spending in other areas of the economy. The total direct

spending on efficiency over the twelve year study period is equal to approximately $1.3 billion.

Investments in efficiency spending yield 20 jobs per million c ompared to 17 jobs per million in

the economy on average. Direct efficiency spending would create 26,000 gross jobs, whereas

spending the same amount of money elsewhere in the economy would create 22,100 jobs.

Therefore, the additional net jobs created thr ough direct efficiency spending would be 3,900

(26,000

- 22,100).

The next step is to calculate the long

- term effects of the investment. In the long

- term, jobs

that would have been created in the energy generation and distribution industries are shifted to

other parts of the economy. Whereas energy industry investments yield 10 jobs per $million,

investments in other areas of the economy yield 17 jobs per $million . Investments in efficiency

at the level described in the potential study would provide approxi mately $ 4,560 million in

utility bill savings to efficiency program participants over the 12 year study period. When this

amount of money is spent in the economy as a whole, it creates 77,520 jobs versus 45,600 from

spending on supply side energy resources

. Therefore, the additional net jobs created through

long

- term impacts of efficiency investment would be 31,920 (77,520

– 45,600).

Taken together, the net jobs created through direct spending and long

- term impacts would

equal 35,820 from all 12 years of in vestment. Dividing the total net jobs by number by the years

of investment suggests that approximately 3,000 jobs would be supported annually.

3 Casey Bell, American Council for an Energy

- Efficient Economy, Energy Efficiency Job Creation: Real Work Experiences

. October 15, 2012.

4 Direct spending on efficiency creates 20 jobs per $1 million of spending as opposed to 17 jobs from spending in the

overall economy, or a net gain of 3 jobs per $1 million. Spending on the energy industry supports just 10 jobs per

$1 million, so redirecting the long

- term savings from energy to other areas of the economy that support 17 jobs

per $1 million on average results in an additional 7 net jobs per $1 million SAVED from efficiency.Optimal Energy

, Inc

. 3 

### Alternative Estimate of Job Impacts

We also derived an alternate job impact value from a meta

- analysis of four o ther

macroeconomic studies that estimated job impacts from energy efficiency programs. Each

compares a scenario of modest to aggressive efficiency spending to a scenario of no efficiency

investment. Two of the studies (N ew Y ork and Wisconsin ) are retroacti ve, looking back at prior

investments that included program ‘ramp up’, while the other two (V ermont and N ew

E ngland ) are forward looking, assessing the impact of efficiency investment commensurate

with ‘all cost

- effective’ policies. Moreover, each study looked at efficiency spending across

multiple fuels (electric, natural gas, and oil), and relied on the same economic model (REMI). 5

For all their similarities in scope, the studies also have differences that lend credibility to

their findings

– they were conducted by different authors for different regions that rely on

different program administrators and implementation models. As the table below illustrates,

the findings are remarkably consistent across studies:

**State/Region Year**  **Author Job years /** 

**Mill ion$** 

Vermont 2011 Synapse Energy Economics & Optimal Energy, Inc. 43

New York 2011 New York Energy Research and Development

Authority 4 9

Wisconsin 2010 PA Consulting Group Inc. 37

- 60

New England 2008 Environment Northeast 46

- 66

A job

- year represents one full time job for a period of one year. The metric job

- years per

million dollar of efficiency spending represents the net change in employment in a region due to

the program’s total spending. For the purposes of this analysis we c onservatively assume 45

job

- years per million dollars. The following table shows how positive employment impacts

would accumulate over the next twelve years if Delaware were to follow the investment levels

suggested in the potential study.

**Program Year 20**  **14 2015**  **2016 2017**  **2018 2019**  **2020 2021**  **2022 2023**  **2024 2025** 

Effi c ie ncy Spending

(Million$) 22 34 55 80 111 137 151 148 145 142 139 136

Net Job

- Years /

Million$ 45 45 45 45 45 45 45 45 45 45 45 45

Net Incremental Job

Years Created 990 1,530 2,475 3,600 4,995 6,165 6,795 6,660 6,525 6,390 6,255 6,120

Net Cumulative Job

Years Created 990 2,520 4,995 8,595 13,590 19,755 26,550 33,210 39,735 46,125 52,380 58,500

5 REMI = Regional Economic Models, Inc. This model is used throughout the US, including by many state and

federal government agencies. The model is dynamic and sophisticated, capturing structural changes in the

regional economy that result from a direct sti mulus.Optimal Energy

, Inc

. 4 The calculation above demonstrates that over twelve years Delaware could create over

58, 0 00 job

- years through investments in energy efficiency. This is equal to roughly 4, 875 job

years annually.



### OVERVIEW OF ECONOMIC **IMPACTS**

The economic impacts of any ne w activity depend on the extent to which that new activity

affects supporting industries in the region. Economic impacts emanate from :

1. direct economic effects (e.g. spending on goods and services at a construction site or

the purchase of a piece of new equ ipment), and

2. mu ltiplier effects which include

a. spending on supporting goods and services by the firms providing that direct

activity (“indirect” impacts )

, and

b. re

- spending by workers of their wages or disposable income from savings to

households (“induced” impacts).

Energy efficiency will generate economic activity throughout Delaware in the form of

purchase and installation of energy efficiency goods and services , administration of the

program itself, and net energy savings to ratepayers and participants. Households that

participate in the program will save on energy costs and, therefore, can spend additional money

in the local economy, spurring job growth. Businesses will have lower energy costs that

improve their bottom

- line

, enabling them to be more com petitive and to expand production and

related employment. The investment in efficiency in itself also generates economic activity to

the extent that the equipment is produced, sold, installed or mai ntained by Delaware

businesses.

Efficiency investments al so cost participants money for their part of the efficient equipment

and installation costs. Further, all ratepayers participate in funding the program through a

system benefit charge. These costs are taken into account in the reviewed studies in that

part icipants are negatively affected through their additional spending on the energy efficiency

goods and services (constricting their ability to spend elsewhere), and all ratepayers are

negatively impacted by the inclusion of energy efficiency program costs o n their energy bills.

These negative impacts offset part of the positive impacts from savings and investment.

Energy efficiency investments are modeled as transfers of money from one party to another

(from ratepayers to various industries in and out of sta te), whereas savings due to investments

are modeled as increased discretionary spending for residents and lower energy costs for

businesses that participate. Both are considered cash flows. To conceptualize the interactive

effects of these cash flows (in t he way that the REMI model does), it is useful to look at an

illustration. The figure below (from the study for Vermont) represents the various cash flows

and how they relate, with explanations provided below the figure.Optimal Energy

, Inc

. 5 

### Cash Flows captured in the REMI mod **el**

1. Payments by electric ratepayers via their electric bills.

2. The surcharge on electric bills collected to fund elec tric energy efficiency programs.

3. Allowance auction r evenue s from the Regional Greenhouse Gas Initiative (RGGI), and

revenue provided from the Forward Capacity Market (FCM)

.

4. Payments to program administrators for general administration and planning

, supporting services, and other non

- incentive costs used to deliver the energy efficiency

programs.

5. The incremental cost of energy efficient equipment , above the cost of baseline

equipment, paid by those installing the efficient equipment due to the efficiency

programs.

6. The incentive contributed toward efficient equipment and technical assistance to

contractors. This activity reduces market barriers to energy efficiency investments such

as first cost and la ck of awareness

.

7. The energy efficient equipment reduces the energy consumption of the end

- user,

resulting in lower utility bills.

8. Items 8, 9 and 10 all impact customer electric rates due to reduced electric consumption.

Item 8 shows impacts in customer electric rates due to fixed cost recovery, since they are

not supplying as much electricity.

9. Reductions in customer electric rates due to Demand Reduction Induced Price Effect s

(DRIPE).

10. Reductions in customer electric rates due to Delaware’s reduced contributions to Pooled

Transmission Facilities (PTF) and ancillary services provided by PJM

.Optimal Energy

, Inc

. 6 

### CONCLUSIONS

The level of investment projected in the potential study could produce over 6,000 job

- years

per year of investment by the end of the study period . At the end of the 12 years of efficiency

program investment, approximately 58,000 job

- years would have b een added to Delaware’s

econo my compared to a scenario of no investment in energy efficiency.

In addition to net positive job impacts , the studies found that efficiency investments increase

gross state product and bolster trade. These economic benefits derive from changes in the

econ omy that occur as a result of increased spending on efficiency measures and decreased

spending on energy. In short, efficiency programs exchange fossil fuel imports for local

employment and economic growth. Neither the employment nor the gross state produc t

impacts are captured in the T otal R esource C ost test ( i.e., the primary cost

- benefit test in the

potential study) since it is limited to the direct impacts of reduced energy use and bill savings.

If Delaware pursues t he energy efficiency investment leve ls forecasted in the potential study

the state will reduce emissions, lower energy bills, a nd arrest long

- term load growth, thus

creating a more sustainable energy sector. This study demonstrates that those efficiency

investments will also deliver signific ant macroeconomic benefits in the process

– benefits above

and beyond those already captured in the potential study.



### REFERENCES

Casey Bell, American Council for an Energy

- Efficient Economy, Energy Efficiency Job

Creation: Real Work Experiences . October 15, 2012.

http://www.aceee.org/files/pdf/white

- paper/energy

- efficiency

- job

- creation.pdf

PA Consulting and Economic Development Research Group. 2010. Focus on Ene rgy

Evaluation, Economic Development Benefits: CY09 Economic Impacts . Prepared for State of

Wisconsin Public Service Commission. March 2.

https:// focusonenergy.com/sites/default/files/cy09economicimpactsreport_evaluationrep

ort.pdf

Howland, Jamie, D. Murrow, L Petraglia, T. Comings. 2009. Energy Efficiency: Engine of

Economic Growth . Prepared for Environment Northeast, October.

http://www.envne.org/public/resources/pdf/ENE_EnergyEfficiencyEngineofEconomicG

rowth_FINAL.pdf

Optimal Energy and Synapse Energy Economics. 2011. Economic Impacts of Energy Efficiency

Investments in Vermont

– Final Report . Prepared for the Vermont Department of Public

Service.

http://legislature.idaho.gov/sessioninfo/2011/ interim/energy_public_optimal.pdf

New York State Energy Research & Development Authority. 2011. Macroeconomic Impact

Analysis of New York’s Energy Efficiency Programs.

http://www.epa.gov/statelocalclimate/documents/pdf/michael_presentation_8

- 4

- 2011.pdf