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Triennial Plan II: Straw Proposal

Triennial Plan II: Straw Proposal. Program Descriptions and Issues. Outline. Business Programs Residential Programs Renewable/Alt Energy Programs Cross-Cutting Programs Template: Recent Program Results Opportunity Budget / Revenues Delivery / Strategy Issues

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Triennial Plan II: Straw Proposal

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  1. Triennial Plan II:Straw Proposal Program Descriptions and Issues

  2. Outline • Business Programs • Residential Programs • Renewable/Alt Energy Programs • Cross-Cutting Programs • Template: • Recent Program Results • Opportunity • Budget / Revenues • Delivery / Strategy • Issues • Stakeholder Topics, Questions to be added

  3. Business Programs

  4. Incentive Program – Recent Results

  5. Incentive Program – More Results (1) Business Incentive Program -- # Measures Installed (FY-11)

  6. Incentive Program – More Results (2) • Education and Training • 175 new Qualified Partners (QPs) among trade allies in the supply chain • Participated in 15 targeted business trade shows • Presented Program overview and Energy Management Practices at 30 business and trade association meetings throughout the State • Tech Support • Answered +/- 660 incoming calls for customer support • Established web-based incentive application process and tracking tool • QC • Inspected 421 projects • 100% of all projects over $5,000 incentive • 10% of projects under $5,000 • Eligible Measures • new prescriptive LED incentives (wall pack, outside light, parking garage, refrigerated case light, screw-in & pin based lamps) • Discontinued: motors

  7. Incentive Program – Description (1) • Opportunity • Continue EM’s long-running, well-developed program • Broad reach, easy access for customers • Potential to enhance delivery strategy • Potential to further simplify, streamline delivery strategy • Pay for Performance (delivery contractor, QP, customer) • Measures • Refrigeration • Compressed Air • LED Conversion • Lighting design & controls • Budget / Revenue • FY-12 $8.7M (electric) + $252,000 (gas) (SBC, RGGI, MPRP) • FY-13 $6.1M (electric) + $252,000 (gas) (SBC, RGGI, MPRP)

  8. Incentive Program – Description (2) • Delivery / Strategy • Blend of tech support, education, training, financial incentives, and QC • Financial Incentives for a fraction of the “incremental cost” for eligible measures on the Prescriptive List approach or Custom approach, vary by “retrofit” and “new” / “replace on burnout” • Partnership with trade ally network (400 QPs) • Contracted program support competitively bid • Currently Eligible Measures: • 22 Fluorescent and LED lighting measures • 21 Refrigeration measures • 12 Commercial A/C and Heat Pump measures • 7 Variable Frequency Drive (VFD) measures • 10 Specific Ag measures (fans, vacuum pumps) • Compressed Air measures

  9. Incentive Program -- Issues • Delivery / Strategy • Continue to develop and rely on a significant role of the market / trade allies (QPs), or use more 3rd-party contractors under contract to the Trust • Budget / Revenue • Market demand is growing, budgets shrinking; “foot on the gas, foot on the brake” • Continue to direct approx. 30% of RGGI revenues through this Program? • Continue to run Natural Gas conservation funds for “Commercial” customers through this Program? • Should other gas utilities also pay in to Conservation Fund? • TriPlan 2 Proposed Budgets • Baseline -- $6.1M/yr (electric) + $242,000(gas)/yr • Additional Funding Scenario -- $10M /yr (electric) + $450,000 (gas)/yr • Other • _____ • _____

  10. Small Business Direct Install – Description (1) • Recent Results • N/A (Pilot project rolling out in FY12-13) • Opportunity • Success in other jurisdictions • confirmation TBD from emerging pilot in Maine • Tens of thousands of potential participants • typically slower to adopt new technology, turnover equipment • limited time/resources to investigate options • Ubiquitous use of inefficient lights; uniform “plug and play” solution • Recent Budget / Revenue • FY-13: $1.0M, SBC

  11. Small Business Direct Install – Description (2) • Delivery / Strategy (Current Pilot) • We bring the program “direct” to the Small Businesses’ door • No money up-front • Customer balance may be repaid through utility on-bill financing • Prescriptive lighting (ubiquitous need, uniform solution, predictable savings / costs) • Easy to target geographically • Pilot is targeting 2 areas (Northern Maine) to start

  12. Small Business Direct Install - Issues • Delivery / Strategy • Should we plan for a Statewide program (currently piloting in BHE/MPS)? • How to address On Bill Financing if utilities not interested? • Should we plan for an expansion beyond lighting to include HVAC and/or Refrigeration? • Budget / Revenue • How do answers to above questions differ if we assume (a) Baseline Funding or (b) Increased Electric Budget Scenario? • TriPlan 2 Proposed Budgets • Baseline: $1M/yr • Additional Funding Scenario: $2M/yr • Other • _____ • _____

  13. Multi-Family Weatherization Project -- Description (1) • Recent Results • N/A – Program commenced June, 2012 • Opportunity • Maintain momentum from federal grant-funded pilot project • Efficiencies of addressing multiple units at once • lower transaction costs • All fuels synergies (electric, heating/cooling) • Address “Landlord-Tenant Market Barrier” • Address traditionally underserved market: Significant # of business owners, serving middle-class renters, where other subsidies (WAP) don’t apply or are insufficient • Budget / Revenue • Current Funding ($6.5M) relies on $4.5M federal grant which ends 9/30/2013 • Big thermal opportunity, questionable fit for electric funds

  14. M-F Weatherization Project - Description (2) • Delivery / Strategy • Targets • 1,800 units (from 5-20 unit buildings ) • 20% Energy Savings • Delivery Contractor provides: • Outreach • Partner with, work through local banks • Apartment associations, housing authorities, etc. • Baseline energy assessment/analysis • +/- $1,500/unit financial incentive • Loan loss reserve to ease financing

  15. M-F Weatherization Project - Issues • Delivery / Strategy • Potential to limit eligibility to electrically heated/cooled units • Market potential unknown • Budget / Revenue • Project funding ends 9/30/2013 • How do we address the statutory targets re: weatherizing, reducing heating fuel consumption with little or no heating oil funds? • Should we attempt to continue M-F efforts using electric SBC funds? • TriPlan 2 Proposed Budgets • Baseline: $0/yr • Additional Funding Scenario: $___/yr • Source: SBC? Other? • Other: • ______

  16. Large Customer Program –Recent Results (Electric only) * Subsequent 3rd party analysis determined actual savings to be higher than reported in the Annual Report, which explains the higher B/C ratio found in the Evaluation.

  17. Large Customer Program –Recent Results (GHG savings only) * Subsequent 3rd party analysis determined actual savings to be higher than reported in the Annual Report, which explains the higher B/C ratio found in the Evaluation.

  18. Large Customer Program - Description • Opportunity • Very favorable B/C ratio • Market survey suggest large market potential, unmet demand • Successful results in other states • Reach some of the biggest energy consumers and largest employers in the state to help them lower energy costs and improve competitiveness • Address market barrier – secure approval for capital projects in Maine facilities by buying down upfront project cost to meet large companies’ capital budgeting process (e.g., payback, IRR) • Budget / Revenue • FY-12 $6.7M (RGGI, ARRA-federal, MPRP) • FY-13 $2.5M (RGGI, MPRP) • Electric projects straightforward for EM to bid into FCM, generate additional revenues to EM • Enhanced Financing could unlock new opportunities by removing the upfront cost barrier and enabling projects to be funded through operating budgets rather than limited capital budgets.

  19. Large Customer Program - Description • Delivery / Strategy • Competitive Bidding approach • Low administrative and marketing costs for EM • Technical project screening / analysis • Objective selection process • Complements Business Incentive Program • Large Program >$100,000 • Introducing limited Account Management approach • Strategic, deeper savings • Less risk for customer • Marginally more labor and cost for EM

  20. Large Customer Program - Issues • Delivery / Strategy • What strategies exist to reward/capture collateral energy saving opportunities (i.e., to address cream skimming and loss of future cost-effective opportunities)? • Should marketing/selection rely exclusively on competitive bidding? • Pros – low delivery costs, objective selection process, high leverage • Cons – timing in capital planning process, uncertainty for bidders, recent experience of low uptake • If budgets increases, should strategy increase use of Account Management approach and reflect this in budget/results? • Whether to focus 100% of RGGI funds on electric customers (whence they come), or continue 85-15 split electric-GHG/thermal, or other. • Other: • ________

  21. Large Customer Program – Issues (2) • Budget / Revenue • Should Staff pursue Enhanced Financing through the PUC during TriPlan 2? • TriPlan 2 Proposed Budgets • Baseline: $2.1M/year (RGGI, MPRP) • Additional Funding Scenario: $10M (RGGI, MPRP, Enhanced Financing) • Other: • _____ • _____

  22. Business Sector Training (1) • Recent Results • Building Operator Certification (BOC) trained 36 facility operators • Converted lessons into savings of more than 5 million kWh per year • Other targeted training for facility managers • Opportunity • Closer coordination of program design and implementation between the training courses and the Business Program needs • More targeted, simplified training for QPs to help their customers • Budget / Revenues • FY-11: $83,000/ Yr

  23. Business Sector Training (2) • Delivery / Strategy • Turn-key delivered by contractor • Series of classes training facility managers to lower energy costs and maintenance costs, while enhancing building occupant comfort and safety, through energy efficiency • instruct students in the use of advanced building equipment and controls • Issues • Whether the proprietary BOC course is still in high demand after several years in Maine • Whether BOC should be complemented or replaced by something less intensive, less costly • TriPlan 2 Budget Proposal: • Baseline: $100,000 • Additional Funding Scenario: $200,000

  24. Business Programs – To Be Discontinued • High Performance Schools • Rolled into the New Construction Program • Commercial Grant Program • Funding from federal ARRA grant exhausted • Electric opportunities available through Business Incentive Program • Municipal Grant Program • Funding from federal ARRA grant exhausted • New Construction – Maine Advanced Building • Retro-Commissioning • Small Business Audits and Loan Program (?) • Lost revenue stream • Very limited uptake • Focus on DI pathway • Limit to available capital • from existing loan repayments

  25. Residential Program

  26. Retail Products Program – Recent Results * Subsequent 3rd party analysis determined actual savings to be higher than reported in the Annual Report, which explains the higher B/C ratio found in the Evaluation. † Factoring in both Lighting and Appliance Program results. Lighting results alone achieved 7.4 B/C.

  27. Retail Products Program – Description (1) • Opportunity • Lighting • >30M sockets state-wide (550k homes * 60 ea) • 14M prospective sockets for CFLs per evaluation (2M/yr) • EISA regulation reduces savings credit for CFL’s • LEDs emerging as cost-effective • Electronics • Smart Strips, TVs, PCs, monitors • Appliances • 33,000 fridges, clothes washer & dehumidifiers promoted in FY-12 • Additional opportunities for cost-effective products • but lower B/C than other residential retail products

  28. Retail Products Program – Description (2) • Budget / Revenue • FY-12: $3.8M (SBC, RGGI, MPRP) • FY-13: $4.5M (SBC, RGGI, MPRP) • Includes low income-dedicated funding • Delivery / Strategy • Retail store MOUs • 347 stores participating • Incentive Delivery • Upstream discounting • In-Store Coupons • In-store marketing • Staff saved $500,000/yr in marketing and re-deployed to customer incentives • Alternative Channels (e.g. Good Shepherd Food Bank, other program cross selling) • Evaluation Lessons: • 19% of Lighting participants meet definition of “Low Income”

  29. Retail Products Program – Issues • Delivery / Strategy • Measures • Smart strips offer potential savings, but are confusing for consumers • Absent Additional Funding Scenario, discontinue Appliance Rebates • B/C is only 1.5 compared to Lighting (7.4) • Budget / Revenue • Continue to allocate a portion of the low-income customers’ 20% SBC set-aside to be run through this program? • TriPlan 2 Budget Proposal: • Baseline: $3.8M/Yr. • Additional Funding Scenario: $ 7.1M/Yr.

  30. Refrigerator Recycling Program

  31. Refrigerator Recycling Program - Description • Opportunity • Retire in-use, inefficient fridges and freezers • Target secondary units that get little use but remain plugged in • Estimated potential = 5,000-10,000 units/year • Assuming 500,000 residential units • 1-2% “harvest rate” • Successfully used in other jurisdictions • Budget / Revenue • FY-12&13 -- $2M over 2 years, from SBC funding • Delivery / Strategy • Turn-key contractor • Handles marketing, customer service, screening, pickup, recycling/disposal, payment • Need cost-effective communication channels (Utility bill stuffers, PR) • Cross-sell with other programs

  32. Refrigerator Recycling Program - Issues • Delivery / Strategy • Unknown free ridership or incremental savings • Program design harder to implement in practice than in theory • Budget / Revenue • TriPlan 2 Proposed Budgets • Baseline Funding: $1.2M/year • Additional Funding Scenario: $1.2M/year

  33. Whole House Retrofit – Recent Results * Subsequent 3rd party analysis determined actual savings to be lower than reported in the Annual Report, which explains the lower B/C ratio found in the Evaluation.

  34. Whole House Retrofit – Description (1) • Opportunity • Continue momentum from federally funded rebate and revolving loan programs for whole home energy improvements • Maine • oldest building stock in US and significant heating degree days • growing population of residents on fixed income, for whom volatile heating costs pose serious financial risk • Universe of opportunity • 500,000-550,000 residential units • 70% of homes heat with #2 oil, price of #2 oil up 300% or more in past decade making energy saving investments more attractive / cost-effective • Economics of energy upgrades improving • HESP Rebate pilot demonstrated opportunity to achieve deep energy savings for modest cost (avg. $8,300/project) • Other pilots (Air Sealing, Unity) demonstrating opportunity to achieve significant savings for low cost ($300-$500/project) • Possible reduced energy consumption of 160 million gallons of oil

  35. Whole House Retrofit – Description (2) • Budget / Revenue • FY-12 and 13: $20.4 M Capital Base for loans (federal ARRA) • May be split with Large Customer Program • FY-12 and 13: $2M for Residential Direct Install (federal ARRA)

  36. Whole House Retrofit – Description (3) Delivery / Strategy • Carry forward momentum from successful, federally funded rebate program that ended late 2011 • Combine education, marketing, and partnership with trade allies (contractors) • Expand into related networks (real estate, mortgage, insurance, etc.) • PACE and PowerSaver Loans • Sales and marketing strategy through contractor base and municipalities • Single call for loan application for multiple products • Third-party loan origination and loan servicing • Residential Direct Install • Market based and driven through contractor base • Capture easy, low-cost savings through Air Sealing or similar measures • Entice customers to take first steps toward whole house upgrade • Generate leads for financing program (for more expensive projects with longer term paybacks) • $300 for evidence of 6 hours of air sealing and insulation & home data. • $100 for post weatherization project data and full test out. • Data collection and analysis

  37. Whole House Retrofit – Issues • Budget / Revenues • Original proposal to US DOE: • Recapitalize the fund for 8 years, as needed, through revenue bonding using loan repayments/interest to cover bond obligations • Consider options to recapitalize by selling notes to Secondary Market • TriPlan 2 Budget Proposals: • Continue use of Natural Gas Conservation Fund in Unitil territory for Residential Direct Install • $137,500/year • Consider use of $13M in QECBs (Qualified Energy Conservation Bonds) through a “Green Communities Program” • Uncertainty support for bonding

  38. Efficient Heating Equipment Program

  39. Efficient Heating Equipment Program • Opportunity • Mechanism for supporting upgrades by homeowners to highest efficiency equipment including condensing boilers and heat pumps • Budget / Revenue • Gas and Electric program components could be funded out of SBCs • FY-11: $1.2M • There is no “All Fuel” or “Unregulated Heating Fuel” funding currently authorized • Delivery / Strategy • Sales and marketing strategy through contractor base • Supported by financing programs • Set equipment standards beyond Energy Star

  40. Replacement Heating Equipment Program - Issues • Delivery / Strategy • Whether to shift to Retail Products (in-store rebate) strategy or continue with direct homeowner/contractor mail-in rebate • Should we limit use of funds from electric or gas conservation fund to paying for electric or gas efficient equipment, respectively? • Budget / Revenue • TriPlan 2 Proposed Budget • Baseline Budget • $___ for cost-effective electric heat pumps (elec SBC) • $___for cost-effective natural gas systems (gas SBC) • Additional Funding Scenario: • $___for cost-effective electric heat pumps (elec SBC) • $___ for cost-effective natural gas systems (gas SBC) • Other • __________

  41. Low Income Program – Recent Results (Fridges & CFLs)

  42. Low Income Program – Recent Results (Whole House Retrofits)

  43. Low Income Program – Description (1) • Opportunity • 3,400 LIHEAP, electrically heated homes (per MaineHousing records) • Many more non-LIHEAP (HUD Section 8, USDA Section 515) • Landlords maintain audited demographics • Budget / Revenue • FY-11: $2.6M from SBC for Refrigerators and CFLs, only $325,000 spent • FY-12: $5M from SBC for Whole House Retrofit for electrically heated homes • FY-13: • $800,000 from SBC for Retail Products (Lighting) • $1.9M from SBC and MPRP for Whole House Retrofit for electrically heated homes • $1M from federal ARRA grant for alternative heat systems

  44. Low Income Program – Description (2) • Delivery / Strategy • Refrigerator Replacement Program was slowing down dramatically • Single-family electric heat homes • Relying on MaineHousing / CAP Agencies for Marketing, Screening, Delivery • Multi-family electric heat apartments • Competitive bid to contractors for audit and install • Managed by 3rd-party administrator • Introducing use of efficient heat pumps

  45. Low Income Program - Issues • Delivery / Strategy • Single-family electric heat homes • Challenges identifying suitable candidate homes • Many SFH have already switched fuels • Need access to customer contact info • Target fewer, larger loads through individual house treatments (i.e., weatherization) or smaller, more ubiquitous loads through retail channels or low-income service channels (i.e., lighting/electronics)? • Budget / Revenue • What fraction of Low Income budget (if any) should go to weatherization versus retail products (lighting, electronics)? • TriPlan 2 Proposed Budget: • Baseline: $2.8M • Additional Funding Scenario: $2.8M • Other • _________

  46. Renewable Energy Programs

  47. Renewable Resource Program – Recent Results

  48. Renewable Resource Program - Description • Opportunity • Movement of renewable industry to mainstream through new professional standards and requirement for cost-effective renewable energy installations • Delivery / Strategy • Website information and forms • Delivery through installers with NABCEP certificates of knowledge & insurance • Recent rule change requires cost-effectiveness to end user and projected kWh output to calculate rebate amount • 2.5 cents per modeled lifetime kWh output, caps at $2000/resid; $4000/business • Budget / Revenue • $100,000 from Alternative Compliance Payments and Voluntary Contributions • $728,000 remaining from Original Solar/Wind SBC for use in new rebate structure, will be exhausted in FY13

  49. Renewable Resource Fund - Issues • Delivery / Strategy • N/A • Budget / Revenue • New revenue stream needed in order to continue rebate program • TriPlan 2 Proposed Budget • Baseline: $100,000 • Additional Funding Scenario: $ _____ • Other • _____ • _____

  50. Cross-Cutting Programs

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