STATE OF INDIANA

INDIANA UTILITY REGULATORY COMMISSION

IN THE MATTER OF THE VERIFIED

PETITION OF INDIANA MICHIGAN POWER

COMPANY FOR APPROVAL OF DEMAND

SIDE MANAGEMENT (DSM) PLAN,INCLUDING ENERGY EFFICIENCY (EE)PROGRAMS, AND ASSOCIATED ) CAUSE NO.ACCOUNTING AND RATEMAKING

TREATMENT, INCLUDING TIMELYRECOVERY THROUGH I&M'S DSM/EE

PROGRAM COST RIDER OF ASSOCIATED

COSTS, INCLUDING PROGRAMOPERATING COSTS, NET LOST REVENUE,AND FINANCIAL INCENTIVES.

SUBMISSION OF DIRECT TESTIMONY OF

JON C. WALTER

Applicant, Indiana Michigan Power Company (l&M), by counsel, respectfully

submits the direct testimony and attachments of Jon C. Walter in this Cause.

Teresa Mortonislyhart (Atty. No. 14044-49)Jeffrey M. Peabody (Atty No. 28000-53)Barnes & Thornburg LLP11 South Meridian Street

Indianapolis, Indiana 46204Nyhart Phone: (317) 231-7716Peabody Phone: (317) 231-6465Fax: (317) 231-7433Email: tnvhart@btlaw.com

ipeabodv@btlaw.com

Attorneys for Indiana Michigan PowerCompany

CERTIFICATE OF SERVICE

The undersigned certifies that the foregoing was served upon the following via

electronic email, hand delivery or First Class, or United States Mail, postage prepaid

this 26th day of August, 2019 to;

William I. Fine

Abby R. GrayIndiana Office of Utility Consumer CounselorOffice of Utility Consumer Counselor115 West Washington StreetSuite 1500 South

Indianapolis, Indiana 46204infomgt@oucc.in.govwfine@oucc.in.govagray@oucc.in.gov

Jeffrey M. Peabody

Teresa Morton Nyhart (No. 14044-49)Jeffrey M. Peabody (No. 28000-53)BARNES & THORNBURG LLP

11 South Meridian Street

Indianapolis, Indiana 46204Nyhart Phone: (317) 231-7716Peabody Phone: (317)231-6465

Attorneys for INDIANA MICHIGAN POWER COMPANY

DMS 15019801V1

Exhibit I&M-_____

INDIANA MICHIGAN POWER COMPANY

PRE-FILED VERIFIED DIRECT TESTIMONY

OF

JON C. WALTER

PRE-FILED VERIFIED DIRECT TESTIMONY OF JON C. WALTER ON BEHALF OF

INDIANA MICHIGAN POWER COMPANY

I. INTRODUCTION 1

Please state your name and business address. 2

My name is Jon C. Walter. My business address is Indiana Michigan Power 3

Center, P.O. Box 60, Fort Wayne, Indiana 46801. 4

By whom are you employed and in what capacity? 5

I am employed by Indiana Michigan Power Company (I&M or Company) as 6

Consumer & EE Programs Manager. 7

Please briefly describe your educational and business experience. 8

I am a 1989 graduate of Purdue University with a Bachelor of Science degree 9

in Electrical Technology, and am a 1996 graduate of Indiana University with 10

a Masters of Business Administration degree. 11

I have worked for I&M and AEP for 30 years, and have held several different 12

roles of increasing responsibility. I began my career as a Station Relay 13

Engineer in South Bend, Indiana, and have held the following positions, 14

Distribution Engineering Supervisor, Key Accounts Engineer, National 15

Accounts Engineer, Customer Design Supervisor, Supervisor Distribution 16

Systems, Circuit Performance Improvement Manager, Distribution Reliability 17

& Engineering Manager, Manager of Distribution Dispatch, and Regulatory 18

Support Manager. I assumed my current position in December 2016. 19

Jon C Walter -2

What are your responsibilities as Consumer & EE Programs Manager 1

at I&M? 2

I am responsible for I&M's Demand Side Management / Energy Efficiency 3

(DSM/EE), and Demand Response program implementations. 4

Have you previously participated in any regulatory proceedings? 5

Yes. I have filed testimony before the Indiana Utility Regulatory Commission 6

in I&M’s Three Year DSM Plan, Cause No. 43959; I&M’s DSM Progress 7

Report, Cause No. 42693 S1; in support of the selection made by the Indiana 8

DSM Coordination Committee majority for the statewide EM&V 9

Administrator also in Cause No. 42693-S1; I&M’s DSM Program Cost Rider 10

Reconciliations, Cause Nos. 43827 DSM 1 through DSM-9 and Cause 11

43827 DSM 2; I&M’s 2014 DSM Plan, Cause No. 43827 DSM 3; I&M’s 2013 12

DSM Reconciliation Cause No. 43827 DSM 4; I&M’s 2015 DSM Plan Cause 13

No. 44486; I&M’s 2014 DSM Reconciliation in Cause No. 43827 DSM 5; 14

I&M’s 2015 DSM Reconciliation in Cause No. 43827 DSM 6; and in I&M’s 15

Three Year DSM Plan (2017 – 2019) in Cause No. 44841; I&M’s DSM 16

Reconciliation in Cause No. 43827 DSM 7; and I&M’s DSM Reconciliation in 17

Cause No. 43827 DSM 8. Last, I filed testimony before the Michigan Public 18

Service Commission on behalf of I&M in its 2010 base rate case, its 19

Renewable Plan and Reconciliation filings, its 2014-2015, 2016-2017, its 20

2018-2019, and its 2020-2021 Energy Waste Reduction (EWR) and EWR 21

Plan reconciliation filings. 22

Jon C Walter -3

What is the purpose of your testimony in this proceeding? 1

My testimony presents the Company’s proposed 2020-2022 DSM Plan 2

(DSM Plan). As further itemized in the table of contents for my testimony 3

below, I identify the DSM Plan programs, goals, budgets and costs. I discuss 4

the demand and energy impact of and cost/benefit analysis for the DSM 5

Plan. My testimony explains that the DSM Plan is reasonable and consistent 6

with the Company’s integrated resource plan (IRP) and the state energy 7

analysis developed by the Commission. I also discuss lost revenue, Shared 8

Savings, program implementation, evaluation, measurement and verification 9

(EM&V), large customer opt out and the Company’s plans for stakeholder 10

input. Finally, I explain the Company’s proposed reporting for the DSM Plan 11

and provide the revenue requirement used by I&M witnesses Owens and 12

Caudill. 13

Are you familiar with the Company’s Petition in this Cause? 14

Yes. A copy of the Petition is included with my testimony as Attachment 15

JCW-1. 16

Did I&M provide a copy of its Petition and the proposed DSM Plan to 17

the Indiana Office of Utility Consumer Counselor (OUCC)? 18

Yes. 19

Did I&M post an electronic copy of its Petition and proposed DSM Plan 20

on the Company’s Internet web site? 21

Yes. 22

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Please summarize the relief sought by I&M in this proceeding. 1

I&M requests: 2

• Commission approval for I&M to administer and implement a 3 reasonable and cost-effective portfolio of DSM/EE programs for the 4 three year period 2020 through 2022 (DSM Plan); 5

• Commission approval of associated cost recovery for the DSM Plan 6 through I&M’s existing Demand Side Management (DSM) and Energy 7 Efficiency (EE) Program Cost Rider (DSM Rider) including recovery of 8 direct and indirect costs of the DSM/EE programs, EM&V costs, 9 reasonable net lost revenue, and a financial incentive referred to 10 herein (and in prior I&M DSM cases) as Shared Savings. 11

Are you sponsoring any attachments in this proceeding? 12

I am sponsoring the following Attachments to my written testimony: 13

Attachment JCW-1 Petition 14

Attachment JCW-2 DSM Plan Program Summary 15

Attachment JCW-3 IRP Timeline & DSM/EE Selection 16

Attachment JCW-4 DSM Plan Program Tables 17

Attachment JCW-5 DSM Plan Goals Versus IRP 18 Summary 19

Attachment JCW-6 DSM Plan 3 Year Benefit Cost 20 Analysis 21

Attachment JCW-7 DSM Plan Lifetime Energy Savings 22 Summary 23

Attachment JCW-8 Stakeholder Input Process 24

Attachment JCW-9 2020 Net Lost Revenue Forecast 25

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Attachment JCW-10 2021 Net Lost Revenue Forecast 1

Attachment JCW-11 2022 Net Lost Revenue Forecast 2

Attachment JCW-12 2020 Shared Savings Forecast 3

Attachment JCW-13 2021 Shared Savings Forecast 4

Attachment JCW-14 2022 Shared Savings Forecast 5

Attachment JCW-15 DSM/EE Revenue Requirement 6

Attachments JCW-16-JCW-25 Program Descriptions and Plans 7

Attachment JCW-16 Home Energy Products Program 8 Description 9

Attachment JCW-17 Income Qualified Weatherproofing 10 Program Description 11

Attachment JCW-18 Home Appliance Recycling 12 Program Description 13

Attachment JCW-19 Home New Construction Program 14 Description 15

Attachment JCW-20 Home Energy Engagement 16 Program Description 17

Attachment JCW-21 Work Custom Rebates Program 18 Description 19

Attachment JCW-22 Work Prescriptive Rebates 20 Program 21

Attachment JCW-23 Public Efficient Streetlighting 22

Attachment JCW-24 Home Energy Management 23 Program Description 24

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Attachment JCW-25 Electric Energy Consumption 1 Optimization (EECO) Program 2 Description 3

Attachment JCW-26 3 Year DSM Plan Benefit Cost 4 Verification 5

Attachment JCW-27 Updated Home Energy 6 Management Tariff 7

Attachment JCW-28 Proposed Tariffs E.C.L.S (Energy 8 Conservation Lighting Service) and 9 S.L.S (Streetlighting Service) 10

Were these attachments prepared or assembled by you or under your 11

direction and supervision? 12

Yes, all attachments were prepared by me or under my direction and 13

supervision, with the exception of information contained in Attachments 14

JCW-6 and JCW-26, which was prepared by Morgan Marketing Partners, 15

LLC (MMP), with whom I&M contracted to perform the benefit cost scoring 16

for the DSM Plan. 17

Did you submit any work papers? 18

Yes. Electronic versions of work papers are submitted for individual program 19

designs, EECO program forecasts, net lost revenue, forecast energy sales 20

data, and avoided cost data and other information used for benefit cost 21

scoring. In addition, I have the following workpaper: 22

• WP-JCW-1 2016 MPS 23

How is your testimony organized? 24

My testimony is organized as follows: 25

I. Introduction 26 II. DSM Plan 27

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A Overview 1 B. Goals 2

C. Programs 3 D. Program Budgets 4 E. Spending Flexibility 5 F. DSM Program Descriptions and Development 6 G. Reporting 7

III. Cost/Benefit Analysis 8 IV. Resource Planning and Market Potential Studies 9 V. Evaluation, Measurement and Verification (EM&V) 10 VI. Stakeholder Input 11 VII. Customer Impact 12 VIII. Revenue Requirement 13 IX. Large Customer Opt Out 14 X. Net Lost Energy Savings and Net Lost Revenue 15 XI. Financial Incentive (Shared Savings) 16 XII. Conclusion 17

Please define demand-side management (“DSM”) and EE program as 18

you are using these terms in your testimony. 19

I am using these two terms as defined by the Commission and applicable 20

statute. “DSM” “means the planning, implementation, and monitoring of a 21

utility activity designed to influence customer use of electricity that produces 22

a desired change in a utility’s load shape, for example, a change in the time 23

pattern and magnitude of a utility’s load. DSM includes only an activity that 24

involves deliberate intervention by a utility to alter load shape.” 170 IAC 4-8-25

1(e). “EE” and “energy efficiency improvement” mean a reduction in 26

electricity use for a comparable level of electricity service. Section 10(b); 170 27

IAC 4-8-1(j). In this context, the above referenced “electricity service” means 28

the light, heat, motor drive and other service for which a customer purchases 29

electricity from the utility. 170 IAC 170 4-8-1(k). “EE program” means a 30

Jon C Walter -8

program that is sponsored by an electricity supplier, such as I&M, and 1

designed to implement energy efficiency improvements. Section 10(d). For 2

example, to make one's home or business more efficient, consumers may 3

install Energy Star appliances, energy-efficient pumps or variable speed 4

motors. By implementing these energy efficiency improvements, individuals 5

and businesses may obtain a comparable level of heating, cooling, 6

refrigeration, motor drive or other energy service while reducing their energy 7

usage. As previously recognized by the Commission, not all DSM programs 8

are EE programs. Indiana Michigan Power Company, Cause No. 44486 9

(IURC 12/3/2014) at 12-13. “EE” is a subset of “DSM”. Id. For ease of 10

reference herein, I refer to the proposed 3 year plan, including the EE goals 11

and programs in the plan, as the “DSM Plan”. 12

How are you using the term “program cost” in your testimony? 13

I am aware that Section 10(g) provides a definition of “program costs” for 14

purposes of Section 10. I am also aware that Ind. Code 8-1-8.5-9 (Section 9) 15

uses the term “program costs” which is not defined in Section 9 and that this 16

statutory provision defines the broader term “energy efficiency program costs” 17

for purposes of Section 9. I am also aware that the Commission’s DSM Rules 18

include a definition of “program cost” which I understand to focus on the cost 19

of operating a program (170 IAC 4-8-1(aa)). The Commission’s DSM Rules 20

have separate provisions regarding lost revenue and incentives (170 IAC 4-21

8-6 and 4-8-7). Because of these varying definitions and so as to attempt to 22

avoid confusion, I will offer explanation regarding the nomenclature reflected 23

Jon C Walter -9

in my discussion of the proposed DSM Plan. 1

This is I&M’s second filing under Section 10. In my presentation of the 2

proposed DSM Plan in this case, I have endeavored to use the term 3

“program costs” consistent with the Section 10(g) definition. I have 4

presented the direct costs of operating the programs (including EM&V) and 5

the indirect costs (also referred to herein as portfolio level costs). I consider 6

the direct and indirect cost components to be the cost of operating a 7

program (program operating costs). The program budgets I present reflect 8

these program operating costs. 9

II. DSM Plan 10

A. Overview 11

Please provide an overview of I&M’s DSM Plan. 12

I&M seeks approval of its 2020-2022 DSM Plan, which includes EE goals, EE 13

programs to achieve the EE goals, program budgets and program costs,1 and 14

EM&V procedures. The DSM Plan programs, EE and demand savings goals, 15

program budgets (including EM&V), and related information is summarized 16

on Attachment JCW-2. EM&V costs are listed, by program, on Attachment 17

JCW-4. Lost revenue and Shared Savings are summarized on Attachments 18

JCW 9 through 14. 19

1 I am using “program costs” here as defined in Section 10(g). So as to not burden the readability of my testimony, I am not going to call this out every time I used the term “program costs” but will do so in key areas for purposes of clarification.

Jon C Walter -10

The DSM Plan sets forth DSM programs based on I&M system and 1

customer needs, seeks to balance short and long term perspectives and to 2

improve cost effectiveness and program design. The proposed cost-3

effective DSM portfolio is positioned to capitalize on the uniqueness of I&M’s 4

territory and customer base. The proposed portfolio reflects I&M DSM 5

program experience, customer feedback, evaluation results and I&M’s utility 6

system characteristics. 7

I&M’s DSM Plan contains offerings to all customer classes, including low 8

income customers, with many of the same measures offered in recent 9

program years. 10

As I&M has gained experience in DSM/EE program offerings, it has become 11

apparent that customer education and awareness are key to program 12

participation and the effectuation of DSM/EE program benefits. To 13

capitalize on opportunities to improve program cost effectiveness, customer 14

education and messaging not only need to stay fresh and relevant but also 15

need to reflect how customers want to receive that information. Accordingly, 16

I&M’s DSM Plan is based on getting the right information to the right 17

customer at the right time through a process that can be described as “3E”, 18

or: 19

• Educate; 20 • Encourage; and 21 • Entice. 22

Through the 3E approach, the DSM Plan will allow I&M to educate, market, 23

and communicate to all I&M customers more specifically through a variety of 24

Jon C Walter -11

online channels (such as smart phone apps, social media channels and 1

computer/tablet based internet portals). These online channels provide a 2

means for I&M to partner with our customers in their energy perspective and 3

use patterns, to educate them with suggestions, tips, and advice, to influence 4

customer acceptance of longer life measures, and to make them more aware 5

of I&M’s program offerings. 6

B. Goals 7

Does the DSM Plan have EE and demand savings goals? 8

Yes. As shown in Attachments JCW-2 and JCW-5, and summarized in Table 9

JCW-1, the proposed plan is designed to achieve gross energy savings of 10

201,622,927 kWh and gross demand savings of 46,663 kW over the three 11

year period: 12

Table JCW-1

DSM Plan Energy Savings

(kWh) DSM Plan Demand

Savings (kW) 2020 70,195,024 15,333 2021 67,554,830 15,648 2022 63,873,073 15,682 Total 201,622,927 46,663

The proposed DSM Plan goals result in energy savings of approximately 13

0.45% of retail sales (three year average), assuming approximately 9% of 14

C&I load continues to opt out of participation in the EE programs as 15

authorized by Section 9 (also known as Senate Enrolled Act (SEA) 340). I 16

Jon C Walter -12

discuss how the goals were determined in Section IV (Resource Planning 1

and Market Potential Studies) below. 2

Does the DSM Plan include EE programs to achieve the EE goals? 3

Yes. The DSM Plan includes utility sponsored EE programs and two DSM 4

programs (Home Energy Management and EECO) that contribute both 5

energy savings toward the goals and significant demand savings. 6

What is the likelihood of achieving the goal of the EE programs included 7

in the DSM Plan? 8

The likelihood of achieving the goals described above is good but challenges 9

will exist. I&M will make concerted effort to reasonably implement and 10

manage the programs according to plan and to the benefit of customers, 11

within the authority granted by the Commission regarding the DSM Plan. 12

Q. What are the projected changes in customer consumption of electricity 13

resulting from the implementation of the DSM Plan? 14

The annual projected energy and demand savings resulting from the 15

proposed DSM Plan are set forth in Attachment JCW-2. The total savings for 16

the DSM Plan is also shown on this attachment. These projections indicate 17

how customer consumption is expected to change in 2020-2022 as a result 18

of the Company’s implementation of the DSM Plan. Because the proposed 19

program portfolio is cost-effective and designed to result in energy savings of 20

0.45% of eligible retail sales (3 year average), the Company expects a 21

corresponding decrease in customer consumption of electricity compared to 22

what it would be without the programs. 23

Jon C Walter -13

Attachment JCW-7 provides the projected weighted average lifetime energy 1

savings resulting from the DSM Plan. These values indicate the changes in 2

customer consumption associated with the life of the measures projected to 3

be installed as a result of the DSM Plan programs, on a program weighted 4

average basis. Overall, the Company expects a corresponding decrease in 5

customer consumption of 2,821,068,572 kWh from the lifetime effects of the 6

DSM measures projected to be installed through plan programs. 7

C. Programs 8

Please identify the programs in the DSM Plan. 9

The DSM Plan continues many of the programs previously approved by the 10

Commission.2 The DSM Plan programs are as follows: 11

• Home Energy Products; 12

• Income Qualified Weatherproofing; 13

• Home Appliance Recycling; 14

• Home New Construction; 15

• Home Energy Engagement; 16

• Work Prescriptive; 17

• Work Custom; 18

• Public Efficient Streetlighting; 19

• Home Energy Management; and 20

• Electric Energy Consumption Optimization (EECO). 21

2 See Cause No. 44841

Jon C Walter -14

While the programs are same in name as those previously authorized by the 1

Commission in previous plans, the proposed Plan includes several revisions 2

to the programs further discussed below. 3

Where can the Commission find details for the DSM Plan programs? 4

Attachment JCW-2 sets forth the program budgets, energy savings, demand 5

savings, cost of the conserved energy for each program, and portfolio level 6

costs (i.e. the indirect costs of offering the programs). Attachment JCW-4 7

provides program design data for each program in summary fashion. 3 8

Attachments JCW-16 through JCW-25 provide the full program descriptions, 9

containing the respective program objectives, implementation plans, and 10

EM&V plans. 11

D. Program Budgets 12

Please discuss the program budgets. 13

A. Attachment JCW-2 sets forth the direct and indirect costs of the programs in 14

the DSM Plan. I also refer to the indirect costs as the portfolio level costs. 15

The costs associated with EM&V are contained in the direct costs of each 16

program and are shown by program on Attachments JCW-4 and JCW-16 17

through JCW-25. As shown on these attachments, the DSM Plan direct 18

(including EM&V costs) and indirect program costs total approximately $31 19

million over the three year period. Table JCW-2, below, summarizes the 20

3 This attachment breaks down the cost information by fixed and variable costs, shows the total budget for each program identifies energy and demand savings and forecasted program participation.

Jon C Walter -15

direct, indirect, and total operating costs of the DSM Plan: 1

Table JCW-2

Similar to current plan authority, I&M is again requesting authority to roll 2

forward into the next program year any unused funds from the budget 3

approved by the Commission that remain unspent at the end of a plan year. 4

This authority will afford I&M the ability to either continue program spend or 5

expand it from the annual budgets according to need. The lost revenues 6

associated with the proposed DSM Plan are shown on Attachments JCW-9 7

(2020), JCW-10 (2021) and JCW-11 (2022). The Shared Savings 8

associated with the DSM Plan are shown on Attachments JCW-12 (2020), 9

JCW-13 (2021), and JCW-14 (2022). 10

Please discuss the portfolio level costs contained in I&M’s DSM Plan. 11

There are certain indirect costs that support activity across all programs. I 12

refer to these as indirect costs or portfolio level costs because these costs 13

facilitate the offering of the DSM Plan portfolio. The annual level of these 14

costs included in the DSM Plan are summarized in Attachment JCW-2 and 15

include the following: 16

• DSM Database & IT Support 17

Direct Operating

Cost ($)

Indirect Operating

Cost ($)

Total Operating

Cost ($)

2020 9,404,020 1,620,000 11,024,020 2021 9,107,360 1,220,000 10,327,360 2022 8,522,324 1,220,000 9,742,324 Total 27,033,704 4,060,000 31,093,704

Jon C Walter -16

• Staff Development & Memberships; 1

• Portfolio Marketing & Customer Awareness; 2

• Planning & Analytic Support; 3

• Program Development & Market Potential Study; 4

• Administrative Support; and, 5

• Customer Energy Information & Messaging. 6

As part of I&M’s commitment to understanding and developing the potential 7

for future energy efficiency and demand-side management in the I&M service 8

territory, the Program Development indirect cost category includes forecast 9

cost in 2020 to undertake another Market Potential Study (MPS) similar to the 10

one performed in 2016. Conducting another MPS during 2020 will provide a 11

new assessment of energy efficiency and demand-side management 12

potential for the I&M system for the next IRP and will provide time for the MPS 13

to be completed by the time the next IRP planning cycle will begin. Including 14

funding for this new MPS in the DSM Plan as an indirect cost is consistent 15

with how I&M funded the 2016 MPS. All other Indirect program operating 16

cost categories remain the same as those filed in I&M’s current three year 17

plan. 18

Q. Please discuss the Customer Energy Information & Messaging costs 19

included in the above list of indirect costs. 20

A. The Customer Energy Information & Messaging costs included in the indirect, 21

portfolio level costs provide I&M the ability and means to communicate, cross 22

promote, and educate customers about energy efficiency and I&M’s energy 23

efficiency programs through various channels such as an online web page, 24

Jon C Walter -17

social media, email, etc. which are used increasingly in lieu of mail or print. 1

The Customer Energy Information & Messaging costs also provide the 2

support necessary to implement the 3E approach described above. 3

Did you consider actual program experience in developing the DSM 4

Plan? 5

Yes. The 2016 Market Potential Study (MPS) and associated Action Plan 6

(MPS AP) modeled programs and measures for potential savings and cost. 7

Since the MPS savings forecasts are tempered with past performance of 8

similar programs and actual expenditures, this Plan and its programs reflect 9

what I&M has been able to actually achieve. However, while the programs 10

and several of the measures remain the same, as technology and markets 11

have changed, I&M has updated program designs in consideration of these 12

changes and to reflect the need to further influence I&M’s customers to 13

become more energy conscious through upgrade or replacement of more 14

energy intensive measures that have higher savings yield. 15

E. Spending Flexibility 16

Is I&M asking for Commission approval of spending flexibility? 17

Yes. I&M respectfully asks that the Commission grant I&M the same 18

spending flexibility currently in place. This includes the ability to spend up to 19

and including 10% above the costs set forth in this filing for its proposed DSM 20

Plan and programs. This flexibility will help provide for the continuation of a 21

program that is projected to exceed the yearly program budget. I&M also 22

seeks Commission approval to transfer up to 25% of unencumbered program 23

Jon C Walter -18

operating costs between programs in the same customer class. The ability 1

to transfer unencumbered funds will allow I&M to better achieve DSM savings 2

within the overall authorized budget because it will provide additional funds if 3

a particular program is realizing better results. I&M will discuss the 4

Company’s use of this spending flexibility with stakeholders as part of the 5

stakeholder process, which process is discussed below. 6

F. DSM Program Descriptions and Development 7

Please provide an overview of the DSM Plan programs. 8

As stated above, in order to manage cost-effectiveness and stay consistent 9

with the most recent IRP, I&M has reduced the number of programs offered 10

in the Plan by eliminating some of the high cost, lower yield programs. Table 11

JCW-3 below provides a comparison of programs offered in the current three 12

year plan to the programs in the proposed DSM Plan. 13

Jon C Walter -19

Table JCW-3

DSM Plan Program (2017-2019)

DSM Plan Program (2020-2022)

Home Energy Products Home Energy Products Income Qualified Weatherproofing Income Qualified Weatherproofing

Schools Energy Education Eliminated

Home Appliance Recycling Home Appliance Recycling (2020 & 2021); Eliminated (2022)

Home New Construction Home New Construction Home Weatherproofing Eliminated

Home Energy Engagement Home Energy Engagement

Work Prescriptive Rebates Work Prescriptive Rebates Work Custom Rebates Work Custom Rebates

Work Direct Install Eliminated Public Efficient Streetlighting Public Efficient Streetlighting Home Energy Management Home Energy Management Work Energy Management Eliminated

Electric Energy Consumption Optimization (EECO) Program

Electric Energy Consumption Optimization (EECO) Program

Please describe those programs in the DSM Plan that remain the same. 1

In general, the following residential and C&I programs remain largely the 2

same but have revised energy savings forecasts and program operating 3

costs: 4

• Home Energy Products; 5

• Income Qualified Weatherproofing; 6

• Home Appliance Recycling; 7

• Home New Construction; 8

• Home Energy Engagement; 9

• Work Prescriptive Rebates; 10

• Work Custom Rebates; 11

• Public Efficient Streetlighting; 12

Jon C Walter -20

• Home Energy Management; and, 1

• Electric Energy Consumption Optimization Program (EECO). 2

The program descriptions are provided as Attachments JCW-16 through 3

JCW-25. 4

Please discuss the C&I (Work sector) programs proposed in the I&M 5

Plan. 6

Not unlike prior DSM Plans, the C&I portfolio of programs contains the Work 7

Prescriptive Rebates Program, and the Work Custom Rebates Program. In 8

general, all C&I programs are currently experiencing increased interest in 9

LED lighting products. LED lighting costs have decreased and I&M proposed 10

to continue to work with the OSB to adjust rebate levels using actual measure 11

cost data in order to recognize customer cost changes, manage program cost 12

and to ensure rebate levels stay aligned with program design tenants that 13

predicate measure rebates cover only a portion of incremental measure cost. 14

Also, as new efficient LED lighting products such as direct LED fluorescent 15

tube replacements, become available to replace existing technologies, based 16

on TA feedback, customer interest, and product application and qualification, 17

I&M and its implementation vendor are incorporating them into program 18

measure lists based on their cost effectiveness and with an appropriate 19

customer incentive based on cost of the technology. 20

With these efforts, I&M is actively engaged with staying near the forefront of 21

new C&I technologies that are spurring customer interest in improving their 22

operational efficiency. However, many LED commercial lighting products 23

Jon C Walter -21

have experienced significant cost declines, which in turn, necessarily caused 1

I&M to review and update rebate levels for each product. The Work programs 2

in this Plan contain incremental measure cost (IMC) updates, along with 3

revised rebate levels based on those updated IMCs. I&M enacted rebate 4

changes during 2019 and has carried forward those changes into this Plan 5

as well. 6

Other changes in the Work Prescriptive program include rebates for 7

expanded commercial and industrial HVAC technologies such as air 8

conditioner replacements and displacements, heat pump replacements and 9

displacements, and geothermal installations. These measures were added 10

for consistency with the IRP. 11

Please discuss other changes to the Work sector program portfolio. 12

A. Other changes to the Work Prescriptive and Custom programs include: 13

• Moving certain LED lighting measures to Custom from Prescriptive in 14

order to afford a more detail cost and savings review for each project; 15

• Including prescriptive rebates for energy information systems with 16

basic control functionality; 17

• Including prescriptive rebates for energy managements systems with 18

HVAC automated control strategy functionality; and 19

• Including additional Prescriptive measure differentiation for external 20

LED lighting options and types, such as streetlight measures versus 21

building mounted or parking lot lighting measures. 22

Prescriptive measure rebates for energy information systems and energy 23

Jon C Walter -22

management systems were specifically included to facilitate customer and TA 1

awareness in the energy savings options afforded by these measures. These 2

measures are documented in industry reports regarding savings opportunities 3

and potential from the information and automation these measures afford 4

commercial entities especially in the small to medium size business segment. 5

These measure additions will also broaden the opportunity for savings in 6

I&M’s programs, where I&M can highlight these measures in discussions with 7

customers and TAs. 8

Please discuss how LED lighting technology changes impact the Work 9

program sector 10

In general, I&M has seen actual LED lighting material costs decrease 11

dramatically for LED tube replacements (e.g. replacing fluorescent tubes) and 12

LED HID bulb replacements. The direct result from this is improved cost 13

effectiveness. However, while fixture costs now reflect LED versions, fixture 14

replacement costs have not changed as much. Accordingly, some customers 15

are choosing to do straight LED tube change-outs because that technology 16

has developed to the point where no fixture adjustments are required to install 17

LED tubes from fluorescent ones (e.g. there are LED tube technology options 18

to either leave the existing ballast in the fixture or remove it altogether but still 19

use the existing fixture). With such ease of conversion and low cost, the result 20

is that LED technology is quickly becoming the only rational choice. At this 21

point, cost effectiveness impact due to free ridership levels becomes a main 22

concern, where customers choose to undertake LED lighting conversions 23

Jon C Walter -23

regardless of utility incentives because costs have decreased so dramatically 1

and the resulting efficiency improvement results in very low project payback 2

periods due to the decreased electric usage and cost. 3

Last, as LED lighting technologies continue to evolve with market price 4

declines, the payback period concern and free ridership management has 5

caused I&M to move many LED measures from Prescriptive to Custom in 6

order to review each project’s merit on a case-by-case basis to offer project 7

specific rebates instead of offering pre-determined ones under the 8

Prescriptive program. From this, I&M has built-in Custom program 9

implementation cost increases which serves to temper or partially offset lower 10

LED rebate costs in the programs. 11

Please discuss other Work program design changes. 12

As described earlier, I&M has included more HVAC related measures in the 13

Prescriptive program to be consistent with measures selected as part of the 14

IRP’s Preferred Portfolio and to provide a transition pathway away from 15

lighting centric programs to more energy intensive measures common in 16

I&M’s service territory with specific energy and capacity usage profiles. While 17

these HVAC measures are more energy intensive, resulting in higher per unit 18

energy savings, their rebate cost is also higher, where HVAC incentives in 19

the plan cost an average of eighteen cents per unit of energy saved and 20

lighting rebates cost an average of four cents per unit of energy saved. These 21

rebates for commercial HVAC (air conditioner rebates, heat pump rebates, 22

and geothermal rebates) are necessary to entice TA and customer 23

Jon C Walter -24

participation for these measures and to guard against high levels of free 1

ridership. Accordingly, the inclusion of HVAC measures into the Prescriptive 2

program have caused the cost benefit score to decrease comparatively. 3

Overall, the Plan Work sector programs reflect challenges anticipated in the 4

transition to other long life, energy intensive measures from lighting while still 5

maintaining rebates for an array of LED lighting technologies including those 6

prevalent in small and medium size businesses that participate will now 7

participate in the two remaining Work programs for rebates. 8

Please discuss why the Work Direct Install Program is not continued in 9

the proposed Plan. 10

While the Work Direct Install Program provides access to rebates for energy 11

savings measures joint with installation services for those measures to small 12

and medium size businesses, who are generally recognized as needing the 13

most help to realize those savings, the program heavily relies on lighting. In 14

recent years, I&M has encouraged program TAs to install other measures 15

available under the program but with little success. As discussed previously, 16

commercial and industrial LED lighting costs have come down. Without being 17

able to transition to other program measures and as LED lighting becomes 18

the dominant choice with very low, or no, incremental cost, it is reasonable to 19

eliminate the Work Direct Install Program from the portfolio. 20

Jon C Walter -25

Residential Sector Programs 1

Please discuss the Residential sector programs included in the I&M 2

DSM Plan. 3

As shown above, the DSM Plan continues many programs that are currently 4

in place. Some changes were necessary to address federal efficiency 5

standards changes and energy efficiency technology and market changes. 6

Other design changes were necessary to improve program cost effectiveness 7

and produce IRP consistency. 8

The most impactful change to the residential sector programs is intertwined 9

with the market transformation to LED lighting and the federal efficiency 10

requirements for what level of bulb efficiency can be offered for sale. 11

Residential lighting measures have long dominated I&M’s residential sector 12

energy savings performance and cross cut many programs with light bulbs 13

provided through different channels to residential customers for installation 14

in all types of homes. Some of these channels afford high levels of attribution 15

and correlation at low volumes while others afford low attribution and low 16

correlation at high volumes. While previous less efficient baseline options 17

were more forgiving for the level of correlation and attribution in cost 18

effectiveness, the market transformation that is occurring to LED, while lower 19

cost, is less forgiving because the energy savings is dramatically reduced. 20

The DSM Plan reflects the energy savings and bulb costs modeled in the IRP, 21

where during IRP development I&M worked with its MPS vendor to update 22

LED bulb measure cost, rebate levels, and per bulb energy savings from 23

Jon C Walter -26

those originally used at the time the MPS was undertaken, which was in early 1

2016. In working with the MPS vendor, current residential lighting program 2

data was used in the update to reflect the most current market conditions and 3

requirements. 4

Please discuss the DSM Plan program design for residential lighting. 5

The DSM Plan program design for residential lighting has changed in light of 6

the fact that I&M’s IRP did not select the residential energy efficiency measure 7

bundles for this DSM plan period. 8

Specific to residential lighting, which is a component of the Home Energy 9

Products Program, the DSM Plan provides for discounted LED bulbs only 10

through an online residential marketplace. Given the challenges described 11

above, with low per unit energy savings, high free ridership levels in the 12

current upstream program, few less efficient bulb options available to I&M’s 13

customers in local markets, and baseline measurement complications, the 14

best opportunity to continue offering LED bulb rebates is through an online 15

marketplace that customers can confirm they are I&M electric customers and 16

efficiently receive discounted bulbs shipped to their homes. Restricting 17

access to discounted bulbs through an online marketplace will alleviate 18

customer attribution issues and will provide direct correlation that savings are 19

coming directly coming from I&M customers choosing to receive discounted 20

bulbs from I&M. The online marketplace will also afford I&M the ability to 21

leverage cost across other residential energy efficient measures offered via 22

the marketplace, such as efficient showerheads and aerators for electric 23

Jon C Walter -27

water heat customers, some efficient appliances such as WiFi connected 1

thermostats, smart power strips, WiFi connected LED bulbs, and other smart 2

home connected devices such as plug load controllers. 3

The DSM Plan contemplates offering smart home devices for sale through 4

the marketplace for means to engage with customers in smart home control 5

aspects that can potentially provide for more robust connectivity and energy 6

savings and management through these connected control devices. While 7

the energy savings estimates from these measures are not yet fully known 8

and validated, the Plan contains these measures so that I&M can partner with 9

customers to pilot, test, and validate the efficiency aspects and the efficacy 10

of smart home technologies. Overall, it is contemplated that continuing to 11

engage customers with LED bulb rebates can potentially provide a familiar 12

transition pathway to other savings opportunities beyond lighting. 13

Please discuss the forecast and treatment for lifetime savings from 14

residential lighting contained in the DSM Plan. 15

As shown in my DSM Plan work papers, the DSM Plan reflects residential 16

LED bulb energy savings according to current requirements and the IN TRM 17

EUL (i.e. essentially a halogen bulb baseline and a 15 year measure life), 18

LED technologies are expected to become the only market-accepted choice 19

by 2024. This means that the program design reflects the EISA backstop 20

provision for 2020 at 45 lumens per watt and a halogen bulb life of two years 21

and that CFLs become the baseline for measurement against in 2021, 2022, 22

and 2023. The result of these baseline changes are reflected in both the Plan 23

Jon C Walter -28

lifetime energy savings element and the cost effectiveness scoring element 1

for residential lighting, where the effective useful life in each year is an EISA-2

adjusted-savings-weighted effective useful life. As shown in Work Paper 3

Multi-Yr Res. HEP, the resulting effective useful life counted for 2020 bulbs 4

is an average across all bulbs of 2.31 years, an average across all bulbs of 5

2.5 years in 2021, and an average across all bulbs of 2 years in 2022. While 6

this is a forecast on I&M’s part, this assumption reflects trends being seen in 7

I&M’s local markets and program today. The overall impact to residential 8

lighting, even with better forecast attribution, lower rebates costs, and better 9

savings correlation is greatly reduced cost effectiveness scores for residential 10

lighting. 11

Please discuss how residential lighting changes impact some of the 12

Plan’s other residential sector programs. 13

A. From an empirical standpoint, most residential energy efficiency programs 14

contain lighting measures and all correspondingly rely on those measure 15

savings to help manage cost effectiveness. For example, the current Home 16

Online Energy Checkup and the Schools Energy Education programs have 17

offered “no-additional-cost” kits that contain two or three LED light bulbs for 18

customers to install. Also, the current Home Weatherproofing and Income 19

Qualified Weatherproofing programs provide “no-additional-cost” direct 20

installation of multiple LED light bulbs in homes. With such reliance across 21

several programs for cost effective energy savings, the cost effectiveness of 22

residential lighting energy savings is a major consideration in I&M’s 23

Jon C Walter -29

residential portfolio of programs. 1

Please discuss any Plan changes to the Home Appliance Recycling 2

Program. 3

A. In prior program years, Home Appliance Recycling has been a successful 4

program for I&M. In the current plan I&M will continue to offer the program 5

as a service to customers for removal and environmentally compliant 6

recycling for 2020 and 2021. To manage the cost of the program, I&M will 7

not offer the $40 monetary rebate but will allow the removal and recycling 8

cost the customer would otherwise incur and the convenience of the I&M 9

service to serve as the only program enticement to customers. The program 10

has a 0.6 UCT score as shown on Attachment IM-6 (JCW-6), page 2, even 11

with the rebate cost removed. Therefore, while I&M will monitor program 12

participation changes to determine the ongoing value to customers and I&M, 13

the DSM Plan contemplates that the program will be discontinued in 2022 to 14

help maintain consistency with the levels of energy efficiency selected by the 15

IRP for 2022 and to recognize the cost-effectiveness challenges of the 16

program. See also Attachment JCW-18. 17

Q. Please discuss Plan changes to the Home Energy Products Program. 18

A. Overall, the Home Energy Products (HEP) Program remains the same from 19

prior plans in that rebates for lighting and appliances for the home are 20

available in this program. With the changes discussed previously regarding 21

residential lighting, the Plan includes rebate funding for the online 22

marketplace channel, using estimated customer participation rates that will 23

Jon C Walter -30

need to be confirmed over time. See also Attachment IM-13 (JCW-13). 1

For the Products component of the HEP Program, rebates for ECM motor 2

displacements have been eliminated due to the federal standard that took 3

effect in July 2019 requiring all new furnace motors to be ECM efficiency. The 4

Plan now contains rebates only for ECM replacements. The Plan also 5

contains additional HVAC technology rebates not specifically presented in 6

prior year Plans, including rebates for geothermal displacements and 7

replacements and specific rebates for higher efficiency Packaged Terminal 8

Air Conditioner (PTAC) and Packaged Terminal Heat Pump (PTHP) units that 9

can be used in residential settings, as opposed to the more typical 10

commercial settings. These specific examples represent the intentional build-11

out of rebate options for residential energy intensive and long life measures 12

in the HVAC category. See also Attachment JCW-16. 13

Please discuss the Home New Construction Program. 14

A. The New Construction program has been successful for the past several 15

years and the program has grown in the number of builders (approximately 16

30 currently) participating in the program but program cost, on a dollar per 17

kWh saved basis (i.e. realization rate), has been high due to the program 18

paying rebates for gas heated homes. Going forward, the program will 19

provide a rebate on all-electric homes that provide higher energy savings and 20

better realization cost. 21

The program design will continue to be based on a Home Energy Rating 22

Score (HERS) approach to produce long-term electric energy savings by 23

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encouraging the construction of single family homes, duplexes, and end-units 1

of multi-residential properties that individually meet one of two performance 2

levels, or tiers, defined by a specific HERS index score. For the two Silver 3

and Gold tiers, builders will receive rebates structured to cover a portion of 4

the incremental cost of improving home shell efficiency performance (e.g. 5

ceiling insulation, etc.). 6

Beyond home shell improvements, I&M has included rebates for improved 7

energy intensive efficiency measures, such as heat pump waters heaters 8

displacing resistance element electric water heaters and efficient heat pumps 9

displacing minimum standard efficiency units. I&M has added these 10

measures into the program design in order to help move builders to include 11

more efficient water heaters and electric HVAC units in new homes being 12

constructed, beyond the typical shell improvement measures that have been 13

the prior focus of the program in Indiana. 14

The challenge in the New Construction Program will be to build volume with 15

enough scale to overcome the costs of the program, especially because the 16

updated program design focuses only addresses all electric homes. All 17

electric home volumes have been historically low in the Indiana program, but 18

I&M has been able to encourage more all electric homes in recent years. See 19

also Attachment JCW-19. 20

Please discuss changes to the Plan Home Energy Engagement 21

Program. 22

A. The Home Energy Engagement (HEE) Program has two components that 23

Jon C Walter -32

remain the same as offered in prior program years and one new component. 1

The three components of the HEE Program are as follows: 2

• Home Energy Reports (existing); 3

• Home Online Energy Checkup (existing); 4

• AMI Data Portal (new). 5

To manage program cost, the Home Energy Reports (HER) component will 6

transition to electronic (email) delivery only for those customers who have 7

provided their email address to I&M and are existing participants in the current 8

program. This change will cause the participation to decrease to about 9

88,000 participants in the treatment group from the approximate 145,000 10

participants in the current program. This participant level, combined with the 11

new AMI data portal component of the HEE Program discussed below, will 12

change the level of forecast residential behavior savings to about twenty four 13

percent (24%) of what is reported today under the HEE Program, or about 6 14

GWh of total energy savings. This lower behavior savings level reflects an 15

adjustment to the expected energy savings from the HER transition to email 16

only and a forecast participation rate for the AMI data portal discussed below. 17

This savings forecast change and HEE Program design change afford I&M 18

the ability to still offer energy efficiency programming to a broad base of I&M 19

customers at lower cost and to inform customers of their usage profile for 20

more informed management of their electric energy costs. 21

The Plan changes the Online Energy Checkup (OEC) to only offer measure 22

kit components through the online residential marketplace to improve delivery 23

Jon C Walter -33

cost but also to improve measure installation rates because customers will 1

have a choice for which measures they want. Customers who complete their 2

online audit will get an electronic referral to the marketplace upon completion 3

of the audit to access their no additional cost measures. 4

The new component to the HEE Program is the AMI data portal for behavior 5

savings stemming from AMI data related behavior changing engagements. 6

I&M is planning to deploy AMI meters during DSM Plan period years using a 7

robust customer engagement data portal to engage customers with the 8

increased functionality and usage data availability that AMI functionality 9

brings to the table. This new HEE component is included in this Plan to 10

capture the behavior savings possible from different AMI functionality 11

provided from more granular customer usage data and analysis. 12

For example, all residential AMI customers will be eligible to receive usage 13

alerts based on more timely and more granular usage information specific to 14

their home. These alerts can trigger a customer to manage their consumption 15

differently through the budget management tools available through the AMI 16

data portal as well. This AMI data portal type of engagement will be evaluated 17

for such behavior driven energy savings and claimed as verified savings in 18

support of I&M’s DSM Plan target energy savings. Through this component 19

of the HEE program, I&M will seek to engage increasing numbers of 20

customers in AMI functionality through the AMI data portal. 21

Last, the AMI data portal has allocated per participant costs tied to the number 22

of customers that engage in the portal. The cost allocated to the AMI data 23

Jon C Walter -34

portal reflects the per participant portion of the cost to deploy the behavior 1

change inducing functionality from the full AMI data portal cost to I&M. See 2

also Attachment IM-20 (JCW-20). 3

Please discuss changes to the IQ Weatherproofing Program. 4

A. The Income Qualified Weatherization Program has evolved to include two 5

new components, multifamily audits and shell measures, and rebates for 6

energy intensive measure replacements or displacements, whether existing 7

or new construction. Consistent with prior IQ Weatherproofing Program 8

design, the program can pay 100% of the audit and home weatherization 9

improvements and rebates for certain non-shell measure upgrades or 10

displacements according to the program maximum per unit rebate level. 11

The program maximum rebate amount for single family units remains at up 12

to $3,000 per dwelling, but for multifamily units the maximum rebate amount 13

is set at $2,000 per unit. The lower multifamily maximum accounts for the 14

lower energy savings available with smaller size dwellings but is scaled 15

differently to allow for situations where shell improvements can be applied 16

to some units but not others (e.g. upper level units can potentially receive 17

ceiling insulation while lower units cannot). 18

Overall, in terms of measure options available to engage IQ customers in 19

significant energy savings opportunities, the IQ program now includes 20

rebates for energy intensive measure replacements or displacements, 21

whether existing or new construction, that go beyond shell improvements. 22

I&M has included rebates for measures such as air conditioner and heat 23

Jon C Walter -35

pump upgrades to more efficient units, PTAC or PTHP unit upgrades to 1

more efficient units, ECM fan motor upgrades, and water heater upgrades 2

to either heat pump water heaters or more efficient electric resistance water 3

heaters. All of these new measures have long life and can dramatically 4

improve the electric usage profile for IQ customers under the appropriate 5

circumstances and baseline reference. 6

With this new program design and measure offering, I&M will continue to 7

seek out all opportunity to engage with its IQ customer base, whether single 8

family or multifamily. The measure additions to the program afford more 9

engagement opportunity, but not unlike single-family dwellings, each project 10

will require custom review and analysis to ensure program funds are spent 11

in the most appropriate energy savings approach possible and to best serve 12

those most in need of I&M’s programs services. 13

I&M will also continue its local agency and governmental agency 14

engagement and collaboration to seek out impactful opportunity in I&M’s IQ 15

customer base. This includes continuing to engage and find opportunity to 16

educate and inform IQ customers and to seek out multifamily property 17

owners for IQ unit improvements. See also Attachment (JCW-17). 18

Please discuss changes to the Home Energy Management (HEM) 19

Program. 20

In the current DSM Plan, the Commission authorized the HEM Program that 21

was designed to both achieve peak demand reduction and to operate on an 22

ongoing basis to produce participating customer energy use reduction. While 23

Jon C Walter -36

the HEM Program has the same foundational basis as its predecessor the 1

Residential Peak Reduction Program, the HEM Program relies on the 2

capabilities of new smart, Wifi connected thermostats to venture further into 3

the realm of home energy management beyond what the air conditioner one-4

way communicating switch technology was able to do. 5

For this DSM Plan, due to evolving smart home device technologies and their 6

associated market actors and to manage program cost, I&M has removed the 7

continuous demand management (CDM) option under the program and has 8

refined program design to reflect only the demand response savings aspect 9

and the deemed energy savings from thermostats rebated through the 10

program. While the energy savings from CDM were verified through third 11

party evaluation, the per home savings were less than projected in the current 12

DSM Plan. While those verified energy savings were successful in helping 13

customers improve their energy usage and costs, the level of energy savings 14

and cost to operate the active, ongoing continuous demand management 15

portion of the current program were not reasonable to continue, especially in 16

light of the cost effectiveness challenges. 17

Accordingly, the HEM Program proposed in the DSM Plan is more 18

streamlined toward demand response objectives and traditional peak load 19

period reductions. This change will create more alignment and ease of 20

operation for most brands of smart or WiFi connected thermostats that is 21

expected to help I&M to grow the program beyond the current two program 22

compliant brands and types. This should allow I&M to access a larger 23

Jon C Walter -37

customer base of other smart thermostat brands and to capture higher 1

amounts of total demand response reductions in the residential sector. 2

Another change to the HEM Program relates to the how customer demand 3

response event bill credits are determined. HEM will still pay customers a bill 4

credit (i.e. program rebate / incentive) for each demand response event 5

participated in. This payment arrangement helps manage cost effectiveness 6

for the program. As an additional update, however, I&M has updated the 7

amount of bill credit per event to $2.40 per event participated in. This 8

increase compared to the current $1.95 stems from an effort to restore some 9

of the lost value to customers from the removal of the CDM component. While 10

the demand response credits are still aligned and determined by market 11

capacity cost forecasts, the higher credits are an increased cost to the 12

program. To help offset these increased costs, installation of thermostats for 13

customers has been removed and implementation support costs have been 14

reduced to reflect process improvements for customer enrollment instituted 15

by I&M during the current plan period. Beyond the changes described above, 16

other aspects of HEM Program design have not materially changed. 17

Attachment JCW-27, the revised Home Energy Management Tariff, reflects 18

the aforementioned changes to the program. 19

Please discuss Attachment JCW-27 (Home Energy Management Tariff). 20

I&M has included in the DSM Plan an updated HEM Program tariff that 21

reflects the changed bill credit amounts paid to participants. Other program 22

changes described above are included in the revised tariff as well. 23

Jon C Walter -38

Please discuss changes to the Public Efficient Streetlighting (PES) 1

Program. 2

The DSM Plan includes the PES Program according to its basic program 3

design element of using an energy efficiency rebate to buy-down the booked 4

cost of company-owned new LED fixtures. This design was authorized by 5

the Commission in its Order approving settlement in Cause No. 44841. I&M 6

proposes to continue offering the PES program, but the energy savings and 7

incremental measure costs have been updated to reflect changes since the 8

last program design. Those changes include revised LED fixtures sizes and 9

lumen output levels consistent with LED fixtures now stocked by I&M. These 10

changes cause the amount of per unit energy savings in the program to 11

change and the incremental measure cost according to which standard-stock 12

LED fixtures will be used to replace the array of existing fixture types and 13

sizes to change. 14

Please discuss the current status of the PES Program. 15

At this time, no eligible customers have officially enrolled in the PES Program. 16

I&M has provided an update on the PES Program to the Commission in its 17

quarterly scorecard filings as directed by the Commission in its Order in 18

Cause No. 43827 DSM 8. Further, I&M has had discussions with some 19

interested municipalities regarding the benefits of the PES Program, but none 20

have agreed to participate at any level of participation at this time. It is 21

because of this interest level that I&M has chosen to include the PES Program 22

in this DSM Plan again. 23

Jon C Walter -39

What are the costs of the PES Program? 1

The costs of PES Program include the cost of the LED streetlight fixture 2

rebate and program administration, support, and EM&V costs. 3

How will I&M implement the PES Program? 4

I&M has again designed the PES Program on a three year conversion 5

schedule for all existing Tariffs S.L.S. and E.C.L.S. lighting in order to have 6

the flexibility to adequately serve all interested entities. If the Commission 7

approves the program, I&M will work with Tariffs S.L.S. and E.C.L.S. 8

participating municipalities and governmental entities to undertake the 9

conversion of all existing Tariffs S.L.S. and E.C.L.S. streetlights to LED 10

comparable lights according to their respective interest level in program 11

participation. 12

May participating customers choose not to convert all of the I&M owned 13

streetlights to LED? 14

The preference is to convert all I&M owned streetlights during the proposed 15

three year period mainly because LED lighting output differs from the existing 16

lighting fixtures. Having a mixture of fixtures creates different lighting 17

patterns, visibility, and perception. However, I&M recognizes that eligible 18

customers need to plan for any budget changes in advance and I&M will work 19

with these entities accordingly. If the Commission approves the program, and 20

all streetlights are not upgraded over the three year period, only the cost of 21

actual conversions will be reflected in the DSM Program Cost Rider because 22

the DSM Rider actual cost balances are reconciled against revenue received 23

Jon C Walter -40

for the respective periods. 1

What costs will PES Program participants incur? 2

PES Program participants will need to agree to I&M converting existing lights 3

to LEDs. While a LED lighting fixture uses energy more efficiently than 4

existing technology, the upfront higher cost of upgrading to this technology 5

can dis-incent change. This disincentive is experienced in other customer 6

segments, such as residential and commercial lighting. In those situations 7

we have used an EE Program participant incentive to offset the higher cost 8

of new more efficient technology. The cost of the participant incentive 9

together with other program operating costs is then reflected in the DSM 10

Rider. This PES Program employs this same concept. 11

Customers participating in the PES Program will not incur upfront 12

technology conversion or upgrade costs. Instead, the participants will agree 13

to transition to the new LED streetlights provided under Tariffs E.C.L.S. and 14

S.L.S. that will be tracked separately by I&M but will continue to pay the 15

current monthly Tariff E.C.L.S. and Tariff S.L.S tariff rates. This allows the 16

customer to upgrade to the more efficient technology without incurring an 17

additional upfront cost for the higher cost LED streetlight. This structure is 18

designed to encourage the conversion to the more efficient technology 19

where the EE program rebate will be used to offset the incremental up front 20

cost of the LED streetlight. The per unit capital costs booked as I&M electric 21

plant in-service will reflect the actual cost of conversion (material and labor) 22

less the rebate that resulted from the PES program participation. This 23

Jon C Walter -41

allows the PES program to offset the incremental material cost in parallel 1

with the actual LED streetlighting conversion work to be booked under the 2

streetlighting accounts. Continuing to use the Tariff E.C.L.S. and S.L.S. 3

rates in place for the newly converted LED streetlights is reasonable for I&M 4

and customers. The kWh used for any applicable riders would be adjusted 5

to reflect the actual usage of the new LED lamps. As stated above, the 6

rebate will offset only the incremental difference between the cost of the 7

LED light fixture and the cost of a comparable high pressure sodium fixture. 8

The rebate will not address the full cost of the new fixture. 9

Upon approval of the PES Program, will Tariffs E.C.L.S. and S.L.S. need 10

to be modified? 11

Yes. Tariffs E.C.L.S. and S.L.S. will need modification as a result of PES. 12

Tariff revisions are necessary due to the PES Program and the revised tariffs 13

are shown (in redline) on Attachment JCW-28. 14

Please discuss the status of I&M’s Electric Energy Consumption 15

Optimization (EECO) Program. 16

EECO program technology is installed and operational, and successfully 17

producing independently verified energy savings in three deployments 18

totaling (46) I&M Indiana distribution circuits. Deployment I is the first set of 19

9 circuits installed during 2013 for first year 2014 operation. Deployment II is 20

the second set of 21 circuits installed during 2014 and 2015 for operation in 21

the latter part of 2015. Deployment III is the third set of 16 circuits installed 22

during 2017 and 2018 for operation in the latter part of 2018. Deployment IV 23

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is the fourth set of 18 circuits and is currently undergoing installation 1

performance testing for operation during the latter part of 2019. By the end 2

of 2019, I&M will have 64 circuits under EECO program operation. 3

Please further discuss the status of the EECO program at I&M. 4

The operation of EECO technology has and will continue to evolve over time 5

as lessons learned are applied and as in-service operational data is gathered, 6

analyzed, and evaluated. In short, not unlike most new technology in today’s 7

society, EECO technology provides a wealth of data regarding the operation 8

of the distribution system that was not readily available before. This data 9

provides the opportunity to optimize voltage delivery levels based on actual 10

field data points, inform distribution system design and operation, and 11

evaluate how customer loads respond to voltage changes with the variability 12

in weather patterns in the I&M service territory. 13

As part of continuous improvement effort to optimize EECO energy and 14

demand savings performance, I&M, together with its EECO program vendor 15

and I&M’s third party evaluator, ADM & Associates, initiated pilot testing for a 16

different M&V protocol used by a sister AEP operating company to determine 17

the counterfactual energy savings achieved by the program. The current 18

M&V protocol used by ADM relies on day on/day off testing which requires 19

turning the EECO system off for all circuits controlled for several days 20

throughout the year in order to produce verified and statistically valid results. 21

The pilot will test a different protocol, called “bump testing”, that still relies on 22

EECO system on/off data differences to determine counterfactual energy 23

Jon C Walter -43

savings but uses the more granular data available through the system to 1

discern the energy savings through much shorter system-off durations (i.e. 2

less than a full day off every week). 3

ADM has compared this new approach to the current protocol and has 4

developed the bump test evaluation pilot M&V plan to assess the viability of 5

the new approach. This new approach is expected to improve EECO system 6

uptime which in turn will improve energy savings performance throughout the 7

program year and ongoing into future years of operation. Upon completion 8

of this first year of pilot evaluation, I&M will apprise the Commission of the 9

results through the annual reconciliation process and whether or not bump 10

testing is accepted by ADM for use ongoing for the energy savings verification 11

process. 12

Please discuss the EECO Program as proposed in this DSM Plan. 13

The DSM Plan does not contain any new EECO deployments and only 14

contains forecast energy and demand savings from continued operation of 15

the existing 64 circuits throughout the Plan period. The Plan contains no new 16

deployments because new EECO deployments were not selected in the IRP 17

as a cost effective option at this time. 18

Q. Why are the Schools Energy Education Program (SEE) and Home 19

Weatherproofing Program not included in the proposed DSM Plan? 20

A. Lack of definite attribution, measure installation rates and cost are problems 21

for the current Schools Energy Education Program. These issues along with 22

the impact from lower LED bulbs savings combine to significantly and 23

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negatively impact the viability for continuing to offer the SEE Program. While 1

I&M plans to still offer school age children energy education through different 2

means, such as school presentations by I&M staff, the cost and lack of cost 3

effectiveness for the SEE Program could not be rationalized as a reasonable 4

program to continue offering. 5

The Home Weatherproofing Program is not included in the proposed Plan 6

due to lack of cost effectiveness, cost, IRP consistency, and to focus 7

resources on the IQ Weatherproofing Program discussed above. I&M has 8

worked to improve this program’s ongoing viability by streamlining the audit 9

process through an online audit tool that evaluates cost effectiveness at the 10

individual home level, leveraging direct install lighting savings to the extent 11

possible, and expanding the efficiency improvement discussion with 12

customers for non-shell measures such as HVAC system improvements. In 13

the end, the program has been continually challenged for cost effectiveness, 14

audit volumes, and viable energy savings that are cost effective from a utility 15

perspective. 16

G. Reporting 17

Will I&M’s implementation of the proposed DSM Plan include ongoing 18

reporting? 19

Yes. The Company proposes to continue reporting to the Commission and 20

to the OSB scorecard information consistent with the Cause No. 44841 Order 21

(p. 17), which directed as follows: 22

Scorecard. Beginning with the next DSM filing, I&M should 23

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submit a scorecard which includes for each program: gross 1 MWh savings at the meter and gross MW savings at the meter. 2 The savings to be reported are to include: ex ante savings, 3 audited savings, and verified savings as these numbers 4 become available. The scorecard should also include budgeted 5 and actual program expenditures excluding lost revenues and 6 performance incentives. After the next DSM filing, future 7 scorecards should be submitted on a quarterly basis with the 8 fourth quarter scorecard also including the information for the 9 full year. 10

III. Cost/Benefit Analysis 11

Did I&M perform a cost and benefit analysis of the DSM Plan? 12

Yes. The following standard tests were used to assess cost-effectiveness: 13

the Utility Cost Test ("UCT" or “USCRT”), the Total Resource Cost Test 14

("TRC"), the Ratepayer Impact Measure Test ("RIM") and the Participant 15

Test. These tests are defined in the Commission’s Integrated Resource 16

Planning Rules. 170 IAC 4-7-1. As recognized by the Commission: 17

The TRC test helps determine whether EE is cost-effective 18 overall, whereas the PCT, UCT, and RIM help to determine 19 whether the program design and efficiency measures provided 20 by the program are balanced from the perspective of the 21 participant, utility, and non-participants, respectively. The 22 purpose of applying several different tests is to provide a more 23 comprehensive analysis of the cost-effectiveness than that 24 which can be accomplished with just one of the tests. Hence, 25 consideration of multiple cost-effectiveness tests allows us 26 better evaluate the reasonableness of individual programs and 27 the overall DSM portfolio as a whole. 28

Vectren, Cause No. 44645 (IURC 3/23/2016), p. 22. In the DSM 5 Order (p. 29

6), the Commission provided the following explanation regarding how it 30

considers portfolio cost effectiveness: 31

While the Commission has generally required the consideration 32 of the four different tests to provide a comprehensive analysis 33

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of cost-effectiveness, we have not required the portfolio to pass 1 all tests. The TRC test helps in determining whether energy 2 efficiency is cost-effective overall, whereas the Participant Cost 3 Test ("PCT"), UCT, and RIM tests help to determine whether 4 the program design and efficiency measures provided by the 5 program are balanced from the perspectives of the participant, 6 the utility, and nonparticipants. The evidence demonstrates 7 that I&M's portfolio is cost-effective under the TRC and UCT. 8 While the portfolio does not pass the RIM test, the Commission 9 has not previously required a portfolio to pass this test. The 10 RIM test is heavily influenced by lost revenues that are not a 11 true cost, but are considered a transfer payment between 12 program participants and non-participants. As a result, over-13 reliance on this single test can result in the rejection of large 14 amounts of energy savings. Therefore, we find I&M's proposed 15 portfolio is cost-effective. 16

The benefit cost scoring is summarized in Attachment JCW-6, pages 1 and 17

2. As shown in this attachment, I&M’s DSM Plan portfolio is cost effective 18

from a Utility Cost Test (UCT, or USCRT) perspective with a score of 1.46 19

(3 year portfolio score, page 1 of Attachment JCW-6). Different from prior 20

Plans, however, the DSM Plan portfolio does not pass the TRC test at a 21

score of 0.84 for the total portfolio. This score is shown on page 2 of 22

Attachment JCW-6 as well. 23

Do all the programs in the DSM Plan pass both the TRC and UCT tests 24

individually? 25

No, not all programs pass both the TRC and UCT tests. While one residential 26

program passes the UCT, the New Construction Program, no other 27

residential programs pass either the TRC or the UCT. Conversely, two of the 28

three C&I programs, Work Prescriptive and Work Custom, pass both the TRC 29

and UCT while the PES Program does not pass either cost test. The Income 30

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Qualified Weatherproofing Program (IQW) is not cost effective under any of 1

the tests. Income qualified programs are not expected to be cost effective 2

and have been included in previous I&M DSM Plans for other reasons. 3

Has I&M performed any cost effectiveness sensitivity analysis for the 4

DSM Plan portfolio? 5

A. Yes, in order to more fully assess the DSM programs, I&M analyzed cost 6

effectiveness from two different perspectives: 7

1. Seasonal Cost Based (Cost Based) approach ; and, 8

2. Market Hourly Based (Hourly Based) approach. 9

The level of granularity for which avoided costs are determined varies across 10

the approaches. In short, the least granular avoided cost analysis is the 11

Seasonal Cost Based approach and the most granular is the Hourly Based 12

approach. 13

The Cost Based approach was performed by MMP and was performed using 14

the average annual costs from the Company’s fundamentals forecast 15

depicted by Company witness Fisher in his Table GSF-3. This approach 16

captures seasonal usage variation for normal weather, weather-dependent 17

measures and uses average costs to assess avoided costs. This averaging 18

approach has a more pronounced impact on weather dependent measures 19

such as HVAC units. 20

The Hourly Based approach, also performed by MMP, while providing the 21

most granular view and highest score, reflects variations in usage due to 22

weather but is aligned against hourly pricing throughout each year of the 23

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forecast period. This approach recognizes that market conditions are 1

evolving and are expected to continue to evolve throughout the Plan period 2

where hourly market energy cost profiles are flattening and have less 3

dramatic short term increases. 4

The results from these two different approaches are shown in the two pages 5

of Attachment IM-6 (JCW-6). Overall, the Hourly Based approach, which 6

assessed avoided costs using the Company’s 30 year forecast of hourly 7

energy prices used in the IRP, results in the highest UCT scores and a 8

portfolio score of 1.67 while the Cost Based approach yields the second 9

highest UCT score at 1.46. 10

IV. Resource Planning and Market Potential Studies 11

Has I&M submitted an integrated resource plan (IRP) and underlying 12

resource assessment to the Commission? 13

A. Yes. I&M witness Fisher explains that I&M submitted an integrated resource 14

plan, which includes the underlying resource assessment, to the Commission 15

on July 1, 2019 (IRP). He also summarizes the diverse set of resources, 16

including EE resources, required to meet the capacity planning requirements 17

in the Preferred Plan. 18

Q. Is the DSM Plan consistent with I&M’s most recent IRP Preferred Plan 19

submitted to the Commission? 20

Yes. As shown below, the Company’s DSM Plan has been designed to meet, 21

and slightly exceed, the annual and cumulative levels of EE selected by the 22

IRP Preferred Plan for the Plan period. Tables JCW-4 and JCW-5 below 23

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reflect the consistency between the IRP Preferred Plan and the DSM Plan. 1

The first table shows the comparison on a percentage basis and the second 2

table shows the comparison on both an energy and demand savings basis. 3

Table JCW-4

DSM Plan – IRP Consistency

IRP Savings (% of I&M IN Retail Sales)

DSM Plan Savings (% of I&M IN Retail Sales)

2020 0.44% 0.47% 2021 0.43% 0.45% 2022 0.38% 0.42%

3 Year Average 0.42% 0.45%

Table JCW-5

IRP DSM Plan Goals

Energy Savings

(kWh)

Demand Savings

(kW) Energy Savings

(kWh)

Demand Savings

(kW) 2020 66,179,780 16,074 70,195,024 15,333 2021 65,496,671 16,130 67,554,830 15,648 2022 58,683,434 14,594 63,873,073 15,682 Total 190,359,885 46,798 201,622,927 46,663

Company witness Fisher presents the cumulative level of energy savings 4

and demand savings in Table GSF-2. Table 5 reflects the incremental 5

amounts from the cumulative amounts shown by Company witness Fisher. 6

Attachments JCW-3 and JCW-5 provide more detail regarding DSM Plan 7

consistency with the IRP. 8

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Please further discuss the IRP Preferred Plan savings and the DSM Plan 1

Goals. 2

In comparing the DSM/EE in the proposed DSM Plan and the IRP is it 3

important to recognize the difference between: 1) “net” and “gross” savings; 4

2) Total Company and Indiana retail jurisdictional savings; and 3) savings at 5

the generator versus savings at the customer level. 6

DSM net savings best reflects the actual estimated impact on utility sales 7

from DSM programs. I&M relies upon the EM&V process to produce the 8

final determination of net savings for demand and energy savings alignment 9

to actual sales. Because the load forecast used in IRP modeling has a 10

baseline built off of actual historic sales, the level of DSM/EE selected in 11

IRP is treated as net DSM/EE impacts. “Net” energy savings refers to DSM 12

savings attributable to I&M DSM/EE program efforts, equating to savings 13

that are net of free-riders and spill over.4 14

Further, I&M’s DSM plan filings have typically been forecasted at gross 15

levels and I have followed this approach in this case for consistency. 16

Accordingly, in order to obtain an apples to apples comparison, with levels 17

of DSM/EE selected from the IRP process, net savings from the IRP were 18

4 Free rider refers to a customer who would have installed the DSM/EE measure without participating in the utility sponsored program, yet participates in the program and receives an incentive or bonus for participation. 170 IAC 4-8-1. The spillover effect refers to what the participants in the program have further done in terms of DSM/EE due to having participated in the program. Put another way, it is any reduction in energy consumption or demand that is due to a DSM program, other than reductions due to measures or actions taken by participants as part of the program.

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adjusted to gross savings. To adjust the levels of DSM/EE selected in the 1

IRP Preferred Portfolio, I&M applied a portfolio level average net to gross 2

factor of 91%.5 The resulting gross savings goals from the IRP selection are 3

shown in Table JCW-4 above and on Attachments JCW-3 and JCW-5. 4

Additionally, it was also necessary to modify the numbers reflected in the 5

IRP to reflect the Indiana retail jurisdictional levels. Columns 7 and 8 on 6

Attachment JCW-3 provide the selected levels of net DSM for the I&M 7

Indiana jurisdiction, determined by applying the Indiana jurisdictional 8

percentage of forecast retail sales in Column 4 to the total level of I&M DSM 9

shown in Columns 5 and 6. 10

Last, Attachment JCW-3, columns 5 and 6, provide the levels of “net” DSM 11

selected in the Preferred Portfolio at the I&M generator level throughout the 12

IRP planning horizon. As noted above, the DSM Plan reflects savings at 13

the customer level. To allow for the comparison, the values in columns 5 14

and 6 were adjusted to account for system losses because savings at the 15

customer level do not include system losses but savings at the generator 16

does include them. 17

Columns 10 and 11 of Attachment JCW-3 provide the final IRP demand and 18

energy savings. These savings levels were used to determine the 3 Year 19

DSM Plan savings goals. 20

5 See Attachment JCW-2, “Non-Behavior Measure NTG”.

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Attachment JCW-5 compares the IRP savings levels shown on Attachment 1

JCW-3 to the DSM Plan savings goals on Attachment JCW-2. As shown in 2

Attachment JCW-5, I&M’s 3 year DSM Plan annual total portfolio goals are 3

consistent with corresponding annual IRP levels. Table JCW-5 above 4

shows how the DSM Plan savings goals compare to the savings levels in 5

the IRP Preferred Plan for 2020, 2021, and 2022 in terms of percent of I&M 6

Indiana retail sales. 7

Is I&M’s IRP modeling intended to prescribe the specific programs to be 8

included in the DSM Plan? 9

No. The potential future DSM activity was developed and ultimately modeled 10

in the IRP based on the Market Potential Study (“MPS”). The MPS served as 11

the basic underpinning for the establishment of potential proxy EE “bundles 12

that were then introduced as resource options in the IRP. See IRP Section 13

4.4.1 – 4.4.3.3 for a description of the DSM resources modeled. While the 14

DSM/EE measure bundles were similar in nature and performance 15

characteristics to DSM/EE programs, they were neither developed nor 16

intended to be the sole basis for determining the precise programs to be 17

implemented. The proposed plan includes programs for all customer classes 18

(residential, commercial, and industrial). Continuing to offer programs to all 19

customer classes based on the overall level of DSM/EE in the IRP PP 20

provides flexibility to adjust to market and other changes over the longer term 21

planning horizon reflected in the IRP. 22

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Q. Are you familiar with the state energy analysis developed by the 1

Commission under Ind. Code § 8-1-8.5-3? 2

I have considered whether the DSM Plan is consistent with the 2017/2018 3

State Utility Forecasting Group (“SUFG”) Forecast. In pertinent part the 2017 4

Report states with respect to the treatment of DSM: 5

Demand-Side Resources 6

The current projection includes the energy and demand impacts of 7 existing or planned utility-sponsored energy efficiency programs. 8 Incremental energy efficiency programs, which include new programs 9 and the expansion of existing programs, are projected to reduce peak 10 demand by approximately 120 MW at the beginning of the forecast 11 period and by about 700 MW at the end of the forecast. Energy 12 efficiency projections were estimated from utility integrated resource 13 plan filings and from information collected directly from the utilities by 14 SUFG. These energy efficiency projections do not include the demand 15 response loads, which are projected to increase from approximately 16 1,000 MW to about 1,200 MW over the forecast horizon. 17

2017 SUFG Report, p. 1-5. 18

As also explained in the 2017 SUFG Report (pp. 3-1), 19

Beginning with this forecast, SUFG adjusted the manner in which 20 demand response (DR) programs are modeled and how they are 21 reported. This was necessitated by the manner in which DR is 22 modeled within AURORAxmp. DR programs are now treated as a 23 resource within the modeling system; previously an adjustment of peak 24 demand was done to account for them outside the utility simulation 25 model. Thus, the peak demand numbers reported in this report have 26 not been adjusted for DR, while the existing resource numbers now 27 include them. DR programs are projected to increase from 28 approximately 1,000 MW to almost 1,200 MW over the forecast 29 horizon. As in the past, energy efficiency (EE) programs are treated 30 as a reduction in demand. The current projection includes the energy 31 and demand impacts of existing or planned utility-sponsored EE 32 programs. Incremental EE programs, which include new programs and 33 the expansion of existing programs, are projected to reduce peak 34 demand by approximately 120 MW at the beginning of the forecast 35 period and by about 700 MW at the end of the forecast. 36

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The 2017 SUFG Report was issued in December 2017, with an update in 1

October 2018. I&M worked with SUFG to provide data regarding its 2

DSM/EE programming and associated performance levels. Further, the 3

Company’s 2019 IRP was issued in July 2019. The information regarding 4

the impact of DSM programs on the Company’s load projections that I&M 5

provided for the 2017/2018 SUFG forecast is consistent with that being used 6

for our 2019 IRP. Because the state energy analysis reflects consideration 7

of this information, the DSM Plan is consistent with the state energy 8

analysis. 9

Has the Company conducted Market Potential Studies (MPS)? 10

Yes. I&M first completed an MPS in 2008 and has completed another MPS 11

in 2016. The most recent MPS included both its Indiana and Michigan 12

jurisdiction and was completed on about June 1, 2016. As noted above, the 13

MPS was updated for the purposes of the IRP. 14

Is the proposed DSM Plan consistent with the MPS? 15

A. Yes. The MPS took into account program history and experience, customer 16

uptake levels, measure preferences and awareness, acquisition and 17

implementation costs, customer satisfaction, and market barriers to 18

participation. The MPS developed a range of achievement levels consistent 19

with those used in the most recent IRP (Achievable Potential and High 20

Achievable Potential), accounted for the impact of opt out customers, and 21

recognized new measures or technologies appropriate to I&M’s service 22

territory based on an updated view of applicable measure codes and 23

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standards. 1

V. Evaluation, Measurement and Verification (EM&V) 2

Does the DSM Plan include independent EM&V? 3

Yes. I&M is committed to an outside EM&V review. I&M has experience with 4

this in both its Indiana and Michigan jurisdiction and will continue that 5

independent verification. I&M’s EM&V methodology remains consistent with 6

the EM&V Framework filed with the Commission by the DSMCC for statewide 7

programs. That framework set the stage for I&M’s current EM&V practices 8

and these practices are part of the process designed into the DSM Plan. In 9

summary, the independent evaluator will perform a process and an impact 10

evaluation for each year of the plan. The process evaluation will identify how 11

well programs are implemented and will make recommendations to improve 12

programs based on customer and program implementer interviews and data 13

review. The impact evaluation will examine the more technical effects of the 14

programs such as the multi-step review of energy savings (audited, verified, 15

evaluated, and net savings). I&M relies upon these different review levels to 16

produce final verified energy savings, net lost revenue, and Shared Savings. 17

Please explain the EM&V procedures. 18

I&M has developed a consistent process where program design is informed 19

through evaluation and verified savings are confirmed through independent 20

means. Further, I&M’s evaluation effort is designed to meet all the evaluation 21

elements required by 170 IAC 4-8-4. As such, the proposed DSM Plan 22

provides for a similar level of EM&V as used in prior administration and 23

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implementation efforts and those costs are reflected in the cost of each 1

program. 2

VI. Stakeholder Input 3

Does I&M propose the same stakeholder input approach for 2020, 2021, 4

and 2022 that was approved by the Commission in Cause No. 44841 5

settlement? 6

Yes. This structure is outlined in Attachment JCW-8. The Company 7

proposes continuation of the same approach for the DSM Plan period. I&M 8

believes this approach is aligned with that used in the IRP process, and has 9

worked well to garner input on I&M’s DSM/EE offerings from both voting 10

Oversight Board (OSB) members and non-voting members of the public. 11

Quarterly meetings have been held during 2017, 2018, and 2019 and I&M 12

posted the dates and times on its website for members of the public to 13

respond with interest in attending. I&M reviews current DSM program 14

progress during the quarterly meetings and input has been received 15

regarding how to improve public awareness of the programs. I&M posts 16

minutes from meetings on its website as well, providing members of the public 17

the opportunity to not only see the minutes but also the chance to review them 18

as well prior to finalization. Further, I&M holds separate Board voting member 19

meetings at set times each quarter in order to provide voting members the 20

opportunity to receive more frequent communication about the progress of 21

I&M’s programs. Board members agreed and these meetings are held prior 22

to each quarterly public stakeholder meeting, as voting Board members have 23

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availability to attend. Overall, I&M has appreciated how parties have worked 1

within the existing framework to address concerns. The Company seeks to 2

continue the same process into 2020, 2021, and 2022. 3

VII. Customer Impact 4

Will any undue or unreasonable preference to any customer class result 5

or potentially result from the implementation of the EE programs or from 6

the overall design of the DSM Plan? 7

No, I&M is not aware of any undue or unreasonable preference contained 8

within the overall design of the DSM Plan. I&M has taken steps within the 9

DSM Plan design to build opportunity for proactive customer engagement in 10

the programs while still balancing program cost. I&M seeks to update and 11

make current its modes and channels of outreach with differing customer 12

demographics and has added new measures, technologies, and programs 13

accordingly. Further, programs are still aligned to either the residential sector 14

or C&I sector. I&M has included programs to help income qualified 15

customers, governmental entities including municipalities. Last, the DSM 16

Plan includes both DSM and EE programs intended to help balance the 17

different aspects of customer loads in I&M’s supply side resources. 18

What is the effect, or potential effect, in both the long term and the short 19

term, of the DSM Plan on the electric rates and bills of customers that 20

participate in EE programs compared to the electric rates and bills of 21

customers that do not participate in EE programs? 22

This type of effect is directionally measured by the RIM test which is one of 23

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the benefit cost tests required to be calculated in the Commission’s rules. 1

The RIM test results are an “indication of the impact of energy efficiency 2

programs on customers who do not participate in the energy efficiency 3

programs”. As shown in Attachment JCW-6, pages 1 through 3, I&M 4

performed calculations of the RIM test for DSM Plan programs and the 5

portfolio. While the DSM Plan portfolio does not pass the RIM test, I&M 6

included elements, described previously, to proactively engage as many 7

customers in its DSM programs as practicable. As such, I&M is taking steps 8

to maintain DSM program offerings for its customers and to encourage and 9

entice their participation in those programs. Taking such action through a 10

cost effective portfolio of programs helps address the short term and long 11

term impact on rates for non-participating customers because those that 12

become participants are taking action to manage their upfront, short terms 13

costs through DSM rebates provided for measures that work to reduce 14

consumption for the long term. This is effectuated when I&M’s customers 15

realize the annual net benefits from the implementation of programs that seek 16

to educate, encourage, and entice customers to the extent practicable and 17

reasonable. Company witness Caudill calculates the DSM Plan bill impact 18

on the typical residential customer using 1,000 kWh per month and I&M’s 19

major tariff classes. 20

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VIII. Revenue Requirement 1

What is the total revenue requirement used in calculating the proposed 2

DSM/EE Program Cost Rider factors? 3

The total revenue requirement (net of Gross Revenue Conversion) is 4

$80,659,305 as shown in Attachment JCW-15. The total revenue 5

requirement that includes Gross Revenue Conversion and addressed by 6

Company witness Owens, is used by Company witness Caudill to develop 7

the DSM Program Cost Rider factors proposed for Commission approval in 8

this filing. 9

IX. Large Customer Opt Out 10

Please discuss the impact of the SEA 340 Large Customer opt out/ opt 11

in provision on I&M’s DSM/EE programming. 12

SEA 340 states that large customers can opt out of utility energy efficiency 13

program participation effective either July 1, 2014, January 1, 2015, January 14

1, 2016 and annually thereafter. Ten I&M large customers applied for the 15

July 1st effective date opt out. These ten customers all have sites that qualify, 16

but some customer sites from those ten customers that were applied for did 17

not qualify because the sites either did not meet the 1 MW/1 MVA equivalency 18

threshold or the contiguous site requirement. Seven I&M large customers 19

applied for and qualified for January 1, 2015 opt out. One I&M large customer 20

applied and qualified for January 1, 2016 opt out while two customers that 21

had already opted out applied and qualified to opt back into participation in 22

I&M’s DSM programs for 2016. No customers applied for opt out for the 2017 23

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program year, while two customers were approved to opt out and four 1

customers that had opted out in previous years applied to opt back in 2

beginning with the 2018 program year. Last, no customers applied for opt 3

out for the 2019 program year. In total, 17 customers are opted out of I&M’s 4

DSM/EE programs, amounting to 8% of customers and about 18% of eligible 5

load that would be eligible to opt out. 6

Of the qualified sites, qualifying main accounts (accounts that meet the 1 7

MW/1 MVA equivalency threshold, not aggregated) are spread across 8

various I&M large customer tariff classes such as Tariff IP (Industrial Power) 9

and Tariff CS- IRP (Contract Service Interruptible Power). Many of the 10

qualifying supplemental accounts on the same contiguous site reside on 11

Tariff G.S. (General Service). Different qualifying tariff classes cause 12

additional opt out / opt in customer cost allocations to be addressed in the 13

cost allocation methodology portion of the DSM Program Cost Rider rate 14

design. Company witness Caudill incorporates these opt out / opt in cost 15

responsibilities for qualified opt out / opt in customers in her DSM Program 16

Cost Rider cost allocation methodology, as shown in Attachment TAC-1. 17

Please discuss opt out customer cost responsibility for the EECO 18

Program. 19

The DSM Plan continues the same approach to the allocation of costs of the 20

EECO Program to qualified opt out customers where opt out customers pay 21

their allocated share of EECO costs. This is reasonable because the EECO 22

Program is not considered an “energy efficiency program” under the Section 23

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9 opt out. However, beginning with Cause No. 43827 DSM 8, I&M has 1

addressed existing opt out customers cost balances in prior reconciliation 2

filings approved by the Commission. From this, and because no new 3

customers have opted out for 2019, because no new EECO deployments 4

are proposed as part of this DSM Plan and because I&M has included EECO 5

associated capital costs in the cost of service studies from past and current 6

base rate cases, there are no prior participation costs and no EECO 7

associated capital costs to allocate to opt out customers stemming from this 8

DSM Plan. Since I&M does not earn Shared Savings on the EECO Program, 9

no Shared Savings costs are included in the allocation to qualified opt out 10

customers. Net lost revenue generated as a result of EECO Program 11

operation will be allocated to qualified opt out customers consistent with how 12

net lost revenue costs are applied to non-opt out customers. 13

X. Net Lost Energy Savings & Net Lost Revenue 14

Does I&M propose to change the methodology that is currently in place 15

to calculate lost revenue? 16

No. I&M proposes to continue the same methodology explained, relied 17

upon, and authorized by the Commission in prior I&M DSM filings. This 18

includes and continues the reliance upon DSM measure life tracking. 19

Are all of the proposed programs eligible for lost revenue recovery? 20

Yes. All of the programs in the DSM Plan are eligible for lost revenue 21

recovery with the caveat that the Company’s filing reflects zero lost revenue 22

for the PES Program as discussed above. 23

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Please discuss I&M’s DSM Plan net lost energy savings and NLR 1

forecast. 2

Attachments JCW-9, JCW-10, and JCW-11 (column 4) provide the net lost 3

energy savings and NLR forecast for 2020, 2021, and 2022 based on the 4

forecasts of measures installed during those years. The accumulation of 5

verified net lost energy savings for the Plan is based on measure life 6

persistence. Table JCW-6 below reflects that net lost revenue associated 7

with the DSM Plan. 8

Table JCW-6

2020 2021 2022

DSM Plan Net Lost Revenue ($)

3,556,994 3,607,188 3,542,192

Further, in order to provide the Commission a full picture of the NLR for 9

those years, these same attachments (columns 5, 6, 7, 8, 9, and 10 as 10

applicable) also provide the respective year forecast of net lost energy 11

savings and NLR resulting from the remaining effect net lost savings from 12

prior year DSM plan implementation and verified measure installations, 13

subject to any prior or current base rate case adjustments and the three 14

year cap on net Lost Revenue applied by the Commission in its approval of 15

settlement in Cause No. 44481. 16

In summary, I&M’s net lost energy savings and resulting net lost revenue for 17

the Plan is reasonable because it reflects accumulated lost energy savings 18

only for those measures whose useful life persists for each year of the 19

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forecast, and the approach to the lost revenue calculation is based on actual 1

sales reductions based on EM&V actual results and aligns the net lost 2

revenue calculation with the costs reflected in the revenue requirement used 3

to establish I&M's basic rates. Accordingly, the Commission should 4

conclude the DSM Plan’s NLR forecast is reasonable. 5

Has I&M factored in the last basic rate case test year into the reporting 6

of DSM cumulative energy savings used in legacy net lost revenue 7

recovery? 8

Yes. I&M’s last basic rate case test year was the twelve (12) months ended 9

December 31, 2018 (Cause No. 44967). This aligns with I&M’s DSM program 10

year of PY 9. As such, any cumulative energy savings tracked and used for 11

net lost revenue prior to that test year were set to zero and the energy savings 12

for those measures installed during PY 9 (same as the test year actual sales 13

used for basic rates that were placed into effect in July 2018) were cut in half 14

(annual energy savings times ½) to reflect effectively one half of the annual 15

DSM energy savings being reflected in the test year sales and the other half 16

counted for net lost revenue recovery. 17

XI. Financial Incentive (Shared Savings) 18

Please discuss the financial incentive I&M seeks to receive for the DSM 19

Plan. 20

As stated above, the DSM Plan includes the continuation of the Shared 21

Savings construct agreed to in the settlement agreement approved by the 22

Commission in Cause No. 44841. That construct operates as follows: 23

Jon C Walter -64

With respect to the proposed performance incentive, the 1 Settlement Agreement imposes a two-step process related to 2 its collection. First, each individual sector's performance 3 incentives for a given year will be calculated under the 4 methodology proposed by I&M (i.e., the lower of: (1) 15% of 5 90%o of each individual sector's net benefits under the utility 6 cost test, or (2) 15% of sector program costs). The second step 7 reduces the amount of incentive eamed from the residential or 8 nonresidential sector by 15% in any program year if I&M does 9 not hit an 85% savings target threshold for the respective sector 10 or increases the incentive by 10% in any program year if the 11 utility exceeds 105% of the sector's portfolio savings goal. This 12 term encourages I&M to achieve its savings goals by reducing 13 the incentive for achievement below a base threshold. 14 Similarly, it encourages pursuit of achieved savings by 15 increasing the available incentive for exceeding specific targets. 16 We find that this is a reasonable resolution of the issues 17 presented on the recovery of incentives. 18

Why is the proposed financial incentive reasonable and necessary? 19

I&M’s Shared Savings forecast is reasonable and necessary to level the 20

playing field between supply side and demand side resources by mitigating 21

the financial disincentive to offering the DSM programs that would otherwise 22

exist if the financial incentive were not approved. 23

Please elaborate on why I&M’s Shared Savings construct is reasonable. 24

I&M’s proposed Shared Savings construct is inherently reasonable because: 25

• Earnings are based on annual program cost effectiveness 26 performance that is aligned with the IRP resource selection 27 process; 28

• I&M’s Shared Savings earnings are capped while customer 29 benefits are not; 30

• The DSM/EE goals are determined from the optimal supply side 31 and demand side resource selection from the most recent IRP, not 32 independently by I&M; 33

Jon C Walter -65

• I&M’s opportunity to earn a return is based on how well customers 1 benefits are provisioned; 2

• I&M has removed the programs that inherently allow I&M the 3 opportunity to earn its authorized rate of return (EECO) from 4 eligibility for Shared Savings consideration; and 5

• I&M’s share of the Shared Savings is treated as above-the-line for 6 ratemaking purposes and included in the earnings test under the 7 fuel adjustment clause (“FAC”). 8

Are all programs eligible for Shared Savings? 9

No. As shown on Attachments JCW-12, JCW-13, 7 of the 10 programs are 10

eligible for Shared Savings earnings and as shown on Attachment JCW-14, 11

six of the nine programs are eligible for Shared Savings earnings. While I&M 12

only earns capped amounts on programs that are cost effectively 13

implemented according to the UCT, I&M has specifically not including the 14

following programs from eligibility: 15

• Income Qualified Weatherproofing; 16 • EECO; and 17 • PES. 18

Please discuss I&M’s DSM Plan Shared Savings forecast. 19

The DSM Plan Shared Savings forecast utilizes the pro forma UCT (a.k.a. 20

USCRT test) net benefits score by program shown in Attachment JCW-6 to 21

calculate the amount of potential Shared Savings to be earned at the sector 22

level. Consistent with the terms of the settlement agreement in Cause No. 23

44841, Shared Savings is earned at 15% of 90% of each sector’s total net 24

benefits, subject to a cap of 15% of program operating cost. Based on each 25

sector’s net benefits and program operating costs, the annual forecast 26

Jon C Walter -66

Shared Savings performance for each year of the DSM Plan is $580,574, 1

$526,685, and $477,149. The second component takes the sector results 2

from first component and applies an energy savings target performance level 3

to the final result. While the forecast applies 100% component two 4

performance, actual verified energy savings performance from each program 5

year will be used to adjust component two earnings presented in annual 6

reconciliation filings. 7

XII. Conclusion 8

What is your conclusion regarding I&M’s proposed 3 Year DSM Plan? 9

I&M’s 3 Year DSM Plan is reasonable in its entirety and in the public interest. 10

The DSM Plan continues a cost effective portfolio of programs. The energy 11

savings goals for all three years of the Plan are reasonably achievable and 12

designed to achieve an optimal balance of energy resources in I&M’s service 13

territory. Approving the DSM Plan will provide I&M’s customers a continued 14

opportunity to reduce their energy usage, to make informed decisions about 15

their ongoing electricity consumption, and to manage their energy bills. The 16

DSM Plan aligns EE with the Company’s IRP, maintains flexibility, and its 17

approval will allow the need to electricity within I&M’s service area to be met 18

in part by DSM/EE resources. 19

Does this conclude your pre-filed verified direct testimony? 20

Yes. 21

DSM Plan Direct Program* Program Description

2020 Program Operating

Budget ($)

2020 Energy Savings

(kWh)

2020 Demand Savings

(kW)

2021 Program

Operating Budget

($)

2021 Energy Savings

(kWh)

2021 Demand Savings

(kW)

2022 Program

Operating Budget

($)

2022 Energy Savings

(kWh)

2022 Demand Savings

(kW)

Average Annual Cost of Conserved

Energy ($/kwh)

Lifetime Cost of Conserved

Energy ($/kwh)

3 Yr. Net Savings

(kWh)

3 Yr. Program

Operating Budget

($)

3 Yr. Gross Energy Savings

(kWh)

3 Yr. Gross Demand Savings

(kW)

Home Energy Products Rebates for efficient residential lighting & other electro-technologies 701,452 1,561,219 255 666,320 1,104,403 224 651,771 1,361,939 227 0.50 0.04 2,816,969 2,019,543 4,027,561 706

Income Qualified Weatherproofing

Low Income Single Family & Multi-Family weatherization & efficiency 833,103 1,105,931 144 732,365 1,011,963 145 736,765 1,010,633 143 0.74 0.27 3,128,526 2,302,233 3,128,526 432

Home Appliance Recycling Rebates for pick up, and recycling of refrigerators and freezers 327,613 1,868,904 223 327,613 1,829,558 223 0 0 0 0.18 0.02 1,997,169 655,225 3,698,462 446

Home New Construction Rebates for efficient all-electric new home construction 240,235 528,046 419 240,235 528,046 419 240,235 528,046 419 0.45 0.02 1,073,462 720,704 1,584,138 1,257

Home Energy EngagementHome consumption comparison email only reports; AMI data presentment portal; online audit tool

455,934 6,232,545 682 450,106 6,237,959 686 447,415 6,613,545 730 0.07 0.07 19,084,049 1,353,455 19,084,049 2,099

Work Prescriptive Rebates Rebates for efficient lighting, efficient motors, etc. 1,273,054 12,750,000 1,829 1,194,754 10,750,000 1,567 1,125,754 10,750,000 1,567 0.10 0.01 30,482,500 3,593,562 34,250,000 4,964

Work Custom Rebates Rebates for custom C&I efficiency improvements 2,024,112 23,107,939 3,067 1,927,136 19,995,539 2,792 1,730,818 16,496,499 2,203 0.10 0.01 55,427,979 5,682,066 59,599,977 8,062

Public Efficient Streetlighting Upgrade existing inefficient streetlighting with LED streetlighting 1,550,757 2,484,355 0 1,550,757 2,484,355 0 1,550,757 2,484,355 0 0.62 0.03 7,453,064 4,652,271 7,453,064 0

7,406,259 49,638,939 6,620 7,089,286 43,941,823 6,056 6,483,514 39,245,016 5,290 0.16 0.015 121,463,718 20,979,059 132,825,778 17,966

Home Energy Management Active residential load management 699,563 98,112 2,133 733,255 86,339 3,013 767,365 78,490 3,813 8.37 0.56 262,940.16 2,200,184 262,940 8,958

Electric Energy Consumption Optimization (EECO)

Utility distribution voltage control program to optimize & reduce end use consumption

1,298,198 20,457,973 6,580 1,284,818 23,526,669 6,580 1,271,444 24,549,568 6,580 0.06 0.008 68,534,210 3,854,460 68,534,210 19,739

1,997,762 20,556,085 8,712 2,018,074 23,613,008 9,592 2,038,809 24,628,057 10,392 0.09 0.0044 68,797,150 6,054,645 68,797,150 28,697

9,404,020 70,195,024 15,333 9,107,360 67,554,830 15,648 8,522,324 63,873,073 15,682 0.13 0.0096 190,260,868 27,033,704 201,622,927 46,663

91%$200,000 $200,000 $200,000$45,000 $45,000 $45,000 94%$100,000 $100,000 $100,000$258,000 $258,000 $258,000$450,000 $50,000 $50,000$459,000 $459,000 $459,000$108,000 $108,000 $108,000

$1,620,000 $1,220,000 $1,220,000Total I&M Indiana DSM Plan Portfolio Operating Budget $11,024,020 $10,327,360 $9,742,324Count of Direct EE Programs 8 8 7Count of Direct DSM Programs 2 2 2

2020 2021 20220.47% 0.45% 0.42%0.70% 0.61% 0.55%

$11,024,020 $10,327,360 $9,742,32470,195,024 67,554,830 63,873,073

$0.16 $0.15 $0.15

Budget Energy Savings $ / kWh Budget Energy Savings $ / kWh Budget Energy Savings $ / kWh6,705,294 20,058,709 0.33 6,361,782 20,761,812 0.31 6,043,736 19,989,394 0.304,318,726 50,136,315 0.09 3,965,578 46,793,018 0.08 3,698,588 43,883,679 0.08

0 0 0 0 0 0

* Costs shown in table reflect the Direct costs of the programs and EM&V costs; the indirect costs are summarized below the table and referred to as "Portfolio level" costs.**I&M 2019 Forecast

2020 2021 2022

Residential

EE Programs

C&ICheck Total

DSM Programs

Total Portfolio Level Operating Costs

DSM Database & IT Support

Portfolio Marketing & Customer AwarenessPlanning & Analytic Support

Customer Energy Information & Messaging

Staff Development & Memberships

Program Development & Market Potential StudyAdministrative Support

DSM Plan Operating Cost (cents/kwh saved)

Indiana Michigan Power Company - IndianaDSM - 3 Year Plan

Portfolio Level Operating Costs (Indirect Operating Costs)

DSM Plan Program Summary

Portfolio Totals

Non-Behavior Measure NTG

EE Programs Total

DSM Programs Total

Attachment JCW-2

DSM Plan Energy Savings as % I&M IN Utility kWh SalesDSM Plan Operating Cost as % of I&M IN Utility Revenues**DSM Plan Program Operating CostDSM Plan Energy Savings (kWh)

All Measures NTG

IRP Filing Timeline

IRP Vintage Applicable

2018/2019 IRP

Forecast Year

IN Portion of I&M Forecast Retail Sales

I&M Incremental DSM/EE Net

Energy Savings (kWh)

I&M Incremental DSM/EE Net

Demand Savings

(kW)

IN Portion of I&M

Incremental DSM/EE Net

Energy Savings (kWh)

IN Portion of I&M Incremental DSM/EE Net

Demand Savings (kW)

2020 - 2022 Indiana DSM Plan Portfolio Net-to-Gross Ratio

Proxy

Indiana Incremental

DSM/EE Gross Energy Savings (kWh)

Indiana Incremental

DSM/EE Gross Demand Savings

(kW)Michigan Allocation

Michigan Energy Net Savings

Michigan Energy Gross

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)1st Yr. After

2018/2019 IRP Filed: 2020

2018/2019 IRP 2020 84.32% 76,000,000 18,612 60,260,760 14,636 91% 66,179,780 16,074 15.68% 11,204,655 12,305,215

2nd Yr. After 2018/2019 IRP

Filed: 2021

2018 IRP/2019 2021 84.35% 75,190,000 18,670 59,638,747 14,687 91% 65,496,671 16,130 15.65% 11,064,996 12,151,838

3rd Yr. After 2018/2019 IRP

Filed: 2022

2018/2019 IRP 2022 84.52% 67,235,000 16,860 53,434,876 13,289 91% 58,683,434 14,594 15.48% 9,788,508 10,749,969

At the Generator IRP Incremental Savings Reflected At the Meter

Attachment JCW-3

2018 IRP Optimal Resource Selection--Preferred Option PortfolioIntegrated Resource Plan (IRP) Timeline

Indiana Michigan Power Company - IndianaDSM - 3 Year Plan

Integrated Resource Plan (IRP) Timeline & DSM/EE Selection

IRP Incremental Savings Reflected At the Meter

Work Prescriptive Rebates

Per KWH Rate 2020 2021 2022 Work Direct Install

Per KWH Rate 2020 2021 2022 Work Custom Rebates

Per KWH Rate 2020 2021 2022

Public Efficient Streetlighting

Per KWH Rate 2020 2021 2022

Fixed Program Operating Costs Fixed Program Operating Costs Fixed Program Operating Costs Fixed Program Operating CostsVendor Support $184,875 $139,875 $139,875 Vendor Support $0 $0 $0 Vendor Support $554,250 $554,250 $554,250 Vendor Fixed $0 $0 $0

Implementation & Other Annual Cost $40,645 $40,645 $40,645 Implementation & Other Annual Cost $0 $0 $0 Implementation & Other Annual Cost $21,083 $21,083 $21,083 Impl & Other Annual $10,000 $10,000 $10,000Outreach & Coordination $342,000 $342,000 $273,000 Outreach & Coordination $0 $0 $0 Outreach & Coordination $228,000 $228,000 $204,000 Program Coordination $48,000 $48,000 $48,000EM&V $97,547 $97,547 $97,547 EM&V $0 $0 $0 EM&V $100,000 $100,000 $100,000 EM&V $29,270 $29,270 $29,270Rebate Processing $3,532 $2,877 $2,877 Rebate Processing $0 $0 $0 Rebate Processing $904 $786 $621Total Fixed $668,599 $622,944 $553,944 Total Fixed $0 $0 $0 Total Fixed $904,237 $904,119 $879,953 Total Fixed $87,270 $87,270 $87,270

Variable Program Operating Costs Variable Program Operating Costs Variable Program Operating Costs Variable Program Operating CostsCustomer Incentives $0.05 $581,874 $552,772 $552,772 Customer Incentives $0.000 $0 $0 $0 Customer Incentives $0.045 $1,038,997 $953,033 $793,127 Customer Incentives $0.59 $1,463,487 $1,463,487 $1,463,487Delivery & Other $0.0018 $22,580 $19,038 $19,038 Delivery & Other $0.004 $0 $0 $0 Delivery & Other $0.0035 $80,878 $69,984 $57,738 Delivery & Other $0.00 $0 $0 $0

Total Budget $0.10 $1,273,054 $1,194,754 $1,125,754 Total Budget $0.00 $0 $0 $0 Total Budget $0.09 $2,024,112 $1,927,136 $1,730,818 Total Budget $0.62 $1,550,757 $1,550,757 $1,550,757Energy Savings (kWh) 12,750,000 10,750,000 10,750,000 Energy Savings (kWh) 0 0 0 Energy Savings (kWh) 23,107,939 19,995,539 16,496,499 Energy Savings (kWh) 2,484,355 2,484,355 2,484,355Demand Savings (kW) 1,829 1,567 1,567 Demand Savings (kW) 0 0 0 Demand Savings (kW) 3,067 2,792 2,203 Demand Savings (kW) 0 0 0

Participation 394 321 321 Participation 0 0 0 Participation 153 133 105 10,211 10,211 10,211

Home WeatherproofingPer KWH

Rate 2020 2021 2022 Home New ConstructionPer KWH

Rate 2020 2021 2022Home Appliance Recycling

Per KWH Rate 2020 2021 2022

Income Qualified Weatherproofing

Per KWH Rate 2020 2021 2022

Fixed Program Operating Costs Fixed Program Operating Costs Fixed Program Operating Costs Fixed Program Operating CostsI&M Marketing, Rebate Processing, Oth $0 $0 $0 Vendor Fixed 0 0 0 Vendor Fixed $0 $0 $0 I&M Marketing, Rebate Processing, O $199,443 $196,444 $200,844

I&M Auditor $0 $0 $0 Rebate Processing & Other Annual Cos $2,192 $2,192 $2,192 Rebate Processing & Other Annual Cost $16,163 $16,163 $0 I&M Auditor $87,178 $87,178 $87,178Program Coordination $0 $0 $0 Program Coordination $33,498 $33,498 $33,498 Program Coordination $26,250 $26,250 $0 Program Coordination & Outreach $63,600 $63,600 $63,600EM&V $0 $0 $0 EM&V $15,000 $15,000 $15,000 EM&V $35,000 $35,000 $0 EM&V $70,000 $70,000 $70,000Total Fixed $0 $0 $0 Total Fixed $50,690 $50,690 $50,690 Total Fixed $77,413 $77,413 $0 Total Fixed $420,221 $417,222 $421,622

Variable Program Operating Costs Variable Program Operating Costs Variable Program Operating Costs Variable Program Operating CostsCustomer Incentives $0.00 $0 $0 $0 Customer Incentives $0.17 $91,350 $91,350 $91,350 Customer Incentives $0.045 $0 $0 $0 Customer Incentives $0.27 315,473 268,103 268,103Delivery & Other $0.00 $0 $0 $0 Delivery & Other $0.41 $98,195 $98,195 $98,195 Delivery & Other $0.148 $250,200 $250,200 $0 Delivery & Other $0.06 $97,409 $47,040 $47,040

Total Budget $0.00 $0 $0 $0 Total Budget $0.45 $240,235 $240,235 $240,235 Total Budget $0.18 $327,613 $327,613 $0 Total Budget $0.74 $833,103 $732,365 $736,765Energy Savings (kWh) 0 0 0 Energy Savings (kWh) 528,046 528,046 528,046 Energy Savings (kWh) 1,868,904 1,829,558 0 Energy Savings (kWh) 1,105,931 1,011,963 1,010,633Demand Savings (kW) 0 0 0 Demand Savings (kW) 419 419 419 Demand Savings (kW) 223 223 0 Demand Savings (kW) 144 145 143Participation (# Audits) 0 0 0 Participation (# of Homes) 190 190 190 Participation (Total Units) 2,085 2,085 0 Participation 767 704 704

Home Energy Products-Products Component

Per KWH Rate 2020 2021 2022

Home Energy Products--Lighting Component

Per KWH Rate 2020 2021 2022

Home Energy Engagement

Per Unit Rate 2020 2021 2022

Schools Energy Education

Per KWH Rate 2020 2021 2022

Fixed Program Operating Costs Fixed Program Operating Costs Fixed Program Operating Costs Fixed Program Operating CostsVendor Fixed $0 $0 $0 Vendor Fixed $0 $0 $0 Vendor Fixed $221,783 $215,776 $215,317 Vendor Fixed $0 $0 $0

Implementation & Other Annual Cost $78,000 $78,000 $78,000 Implementation & Other Annual Cost $78,500 $78,500 $78,500 Implementation & Other Annual Cost $20,000 $20,000 $20,000 Implementation & Other Annual Cos $0 $0 $0Program Coordination $102,000 $102,000 $102,000 Program Coordination $20,400 $20,400 $0 Program Coordination $75,000 $75,000 $75,000 Program Coordination $0 $0 $0EM&V $15,000 $15,000 $15,000 EM&V $10,000 $10,000 $10,000 EM&V $80,000 $80,000 $80,000 EM&V $0 $0 $0Total Fixed $195,000 $195,000 $195,000 Total Fixed $108,900 $108,900 $88,500 Total Fixed $396,783 $390,776 $390,317 Total Fixed $0 $0 $0

Variable Program Operating Costs Variable Program Operating Costs Variable Program Operating Costs Variable Program Operating CostsCustomer Incentives $0.14 $125,183 $113,933 $127,833 Customer Incentives $0.3399 $85,565 $68,456 $57,758 Customer Incentives $0.000 $0 $0 $0 Customer Incentives $0.00 $0 $0 $0Marketplace Cost $0.06 $5,819 $6,742 $6,290 Marketplace Cost $0.8517 $180,985 $173,289 $176,391 Kits Cost & Marketplace $0.009 $59,150 $59,331 $57,098 Kits Cost & Marketplace $0.06 $0 $0 $0

Total Budget $0.27 $326,002 $315,675 $329,123 Total Budget $1.68 $375,450 $350,645 $322,649 Total Budget $0.07 $455,934 $450,106 $447,415 Total Budget $0.00 $0 $0 $0Energy Savings (kWh) 1,206,572 978,109 1,219,841 Energy Savings (kWh) 354,647 126,294 142,098 Energy Savings (kWh) 6,232,545 6,237,959 6,613,545 Energy Savings (kWh) 0 0 0Demand Savings (kW) 204 204 205 Demand Savings (kW) 51 20 22 Demand Savings (kW) 682 686 730 Demand Savings (kW) 0 0 0

Participation (# Measures) 919 769 919 Participation (# Bulbs) 51,054 40,845 45,950 Participants 90,860 92,475 100,444 Participation 0 0 0

Work Energy Management

Per KWH Rate 2020 2021 2022 Home Energy Management

Per KWH Rate 2020 2021 2022 EECO

Per KWH Rate 2020 2021 2022

Fixed Program Operating Costs Fixed Program Operating CostsVendor Fixed Capital Cost $0 $0 $0 Fixed Program Operating Costs Fixed Capital Cost $0 $0 $0

Return Of and On I&M Assets $0 $0 $0 Marketing & Marketplace $57,709 $53,257 $48,319 Return Of and On I&M Assets $621,642 $608,262 $594,888Program Coordination $0 $0 $0 Program Coordination $100,000 $100,000 $100,000 Program Coordination $31,680 $31,680 $31,680EM&V $0 $0 $0 EM&V $50,000 $50,000 $50,000 EM&V $161,219 $161,219 $161,219Total Fixed & Associated Costs $0 $0 $0 Total Fixed $207,709 $203,257 $198,319 Total Fixed & Associated Costs $814,541 $801,161 $787,787

Variable Program Operating Costs Variable Program Operating Costs Variable Program Operating CostsCustomer Incentives $0.00 $0 #REF! #REF! Customer Incentives $2.25 $199,153 $195,522 $196,562 Customer Incentives $0.00 $0 $0 $0Delivery & Other $0.00 $0 $0 $0 Delivery & Other $3.80 $292,702 $334,477 $372,484 Delivery & Other $0.02 $483,657 $483,657 $483,657

Total Budget $0.00 $0 #REF! #REF! Total Budget $8.37 $699,563 $733,255 $767,365 Total Budget $0.06 $1,298,198 $1,284,818 $1,271,444Energy Savings (kWh) 0 0 0 Energy Savings (kWh) 98,112 86,339 78,490 Energy Savings (kWh) 20,457,973 23,526,669 24,549,568Demand Savings (kW) 0 0 0 Demand Savings (kW) 2,133 3,013 3,813 Demand Savings (kW) 6,580 6,580 6,580

Participants 0 0 0 Participants 2,666 3,766 4,766 Participants 80,939 80,939 80,939

DSM Programs

EE Programs

3 Year DSM Program Forecast Goals & Budgets

Indiana Michigan Power Company - IndianaDSM - 3 Year Plan

DSM Plan Program Tables

Participants (# Streetlights)

Attachment JCW-4

Gross Energy Savings (kWh)

Gross Demand Savings

(kW)

Direct Program Cost

($)

Program Energy Savings

(kWh)

Program Demand Savings

(kW)

Direct Program Cost ($)

Program Energy Savings (kWh)

Program Demand Savings

(kW)

Direct Program

Cost ($)

Program Energy Savings (kWh)

Program Demand Savings

(kW)2020 66,179,780 16,074 7,406,259 49,638,939 6,620 1,997,762 20,556,085 8,712 9,404,020 70,195,024 15,3332021 65,496,671 16,130 7,089,286 43,941,823 6,056 2,018,074 23,613,008 9,592 9,107,360 67,554,830 15,6482022 58,683,434 14,594 6,483,514 39,245,016 5,290 2,038,809 24,628,057 10,392 8,522,324 63,873,073 15,682Total 190,359,885 46,798 20,979,059 132,825,778 17,966 6,054,645 68,797,150 28,697 27,033,704 201,622,927 46,663

Direct Operating Cost ($)

Indirect Operating Cost

($)

Total Operating Cost ($)

IRP Savings

(% of I&M IN Retail Sales)

DSM Plan Savings

(% of I&M IN Retail Sales)

2020 9,404,020 1,620,000 11,024,020 2020 0.44% 0.47%2021 9,107,360 1,220,000 10,327,360 2021 0.43% 0.45%2022 8,522,324 1,220,000 9,742,324 2022 0.38% 0.42%Total 27,033,704 4,060,000 31,093,704 3 Year Average 0.42% 0.45%

Attachment JCW-5Indiana Michigan Power Company - Indiana

IRP 3 Year Plan EE Programs 3 Year Plan Other DSM Programs 3 Year DSM Plan Total

DSM Plan Budget Summary ($)

DSM - 3 Year PlanDSM Plan Goals Versus IRP Summary

IRP Versus DSM Plan Summary

Energy Efficiency (EE) UCT TRC RIM Participant UCT Benefits UCT Costs UCT Net Benefits TRC Benefits TRC Costs

TRC Net Benefits RIM Benefits RIM Costs

RIM Net Benefits

Participant Benefits

Participant Costs

Participant Net Benefits

Residential Home Energy Products 0.52 0.16 0.18 0.64 $986,734 $1,901,169 ($914,435) $986,734 $6,006,474 ($5,019,741) $986,734 $5,412,222 ($4,425,489) $3,632,110 $5,681,498 ($2,049,388)Income Qualified Weatherproofing 0.56 0.56 0.19 NA $1,214,531 $2,178,215 ($963,684) $1,214,531 $2,178,215 ($963,684) $1,214,531 $6,474,230 ($5,259,699) $2,681,363 $0 $2,681,363Home Appliance Recycling 0.60 0.48 0.17 8.18 $379,701 $633,707 ($254,006) $379,701 $785,962 ($406,261) $379,701 $2,179,669 ($1,799,968) $2,488,327 $304,047 $2,184,280Home New Construction 1.62 1.01 0.37 2.50 $1,089,894 $674,402 $415,492 $1,089,894 $1,076,325 $13,569 $1,089,894 $2,912,862 ($1,822,967) $1,723,365 $688,920 $1,034,445Home Energy Engagement 0.54 0.54 0.16 NA $683,438 $1,267,047 ($583,609) $683,438 $1,267,047 ($583,609) $683,438 $4,183,350 ($3,499,912) $2,643,665 $0 $2,643,665Residential Portfolio 0.65 0.38 0.21 1.97 $4,354,298 $6,654,540 ($2,300,242) $4,354,298 $11,314,024 ($6,959,726) $4,354,298 $21,162,333 ($16,808,035) $13,168,829 $6,674,466 $6,494,364

Commercial & IndustrialWork Prescriptive Rebates 3.39 1.04 0.39 1.82 $11,434,920 $3,372,060 $8,062,860 $11,434,920 $11,041,700 $393,221 $11,434,920 $29,479,219 ($18,044,299) $19,562,916 10,721,244 $8,841,672Work Custom Rebates 2.91 1.36 0.38 3.36 $15,548,198 $5,335,583 $10,212,615 $15,548,198 $11,419,619 $4,128,579 $15,548,198 $40,818,749 ($25,270,551) $28,559,751 8,493,291 $20,066,459C&I Portfolio 3.10 1.20 0.38 2.50 $26,983,118 $8,707,643 $18,275,475 $26,983,118 $22,461,319 $4,521,800 $26,983,118 $70,297,969 ($43,314,850) $48,122,667 $19,214,535 $28,908,132

Public Efficient Streetlighting 0.67 0.76 0.63 1.2 $2,937,878 $4,353,388 ($1,415,511) $2,937,878 $3,848,673 ($910,795) $2,937,878 $4,643,902 ($1,706,024) $4,005,828 $3,370,617 $635,211

1.74 0.91 0.36 2.23 $34,275,294 $19,715,571 $14,559,722 $34,275,294 $37,624,015 ($3,348,721) $34,275,294 $96,104,203 ($61,828,909) $65,297,324 $29,259,618 $36,037,706

Home Energy Management 0.24 0.25 0.22 1.79 $1,114,566 $4,579,965 ($3,465,399) $1,114,566 $4,534,437 ($3,419,871) $1,114,566 $5,098,343 ($3,983,777) $852,872 $477,582 $375,290Electric Energy Consumption Optimization NA NA NA NA $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

0.24 0.25 0.22 1.79 $1,114,566 $4,579,965 ($3,465,399) $1,114,566 $4,534,437 ($3,419,871) $1,114,566 $5,098,343 ($3,983,777) $852,872 $477,582 $375,290

1.46 0.84 0.35 2.22 $35,389,860 $24,295,537 $11,094,324 $35,389,860 $42,158,452 ($6,768,592) $35,389,860 $101,202,547 ($65,812,686) $66,150,196 $29,737,199 $36,412,996

Attachment JCW-6DSM - 3 Year Plan

I&M DSM Plan - 3 Year Benefit Cost Analysis--Seasonal Cost BasedPage 1 of 2

Indiana Michigan Power Company - Indiana

DSM Plan Portfolio

Public

DSM Portfolio

EE Portfolio

Demand Side Management (DSM)

Energy Efficiency (EE) UCT TRC RIM Participant UCT Benefits UCT Costs UCT Net Benefits TRC Benefits TRC Costs

TRC Net Benefits RIM Benefits RIM Costs

RIM Net Benefits

Participant Benefits

Participant Costs

Participant Net Benefits

Residential Home Energy Products 0.60 0.19 0.21 0.64 $1,138,989 $1,901,169 ($762,180) $1,138,989 $6,006,474 ($4,867,485) $1,138,989 $5,412,002 ($4,273,013) $3,631,904 $5,681,498 ($2,049,594)Income Qualified Weatherproofing 0.65 0.65 0.22 NA $1,412,215 $2,178,215 ($766,001) $1,412,215 $2,178,215 ($766,001) $1,412,215 $6,473,682 ($5,061,468) $2,680,977 $0 $2,680,977Home Appliance Recycling 0.71 0.57 0.21 8.18 $448,804 $633,707 ($184,903) $448,804 $785,962 ($337,159) $448,804 $2,179,667 ($1,730,863) $2,488,323 $304,047 $2,184,276Home New Construction 1.78 1.12 0.41 2.50 $1,202,097 $674,402 $527,694 $1,202,097 $1,076,325 $125,772 $1,202,097 $2,912,851 ($1,710,754) $1,723,358 $688,920 $1,034,437Home Energy Engagement 0.63 0.63 0.19 NA $801,783 $1,267,047 ($465,263) $801,783 $1,267,047 ($465,263) $801,783 $4,183,350 ($3,381,566) $2,643,665 $0 $2,643,665Residential Portfolio 0.75 0.44 0.24 1.97 $5,003,888 $6,654,540 ($1,650,652) $5,003,888 $11,314,024 ($6,310,136) $5,003,888 $21,161,552 ($16,157,664) $13,168,227 $6,674,466 $6,493,761

Commercial & IndustrialWork Prescriptive Rebates 3.93 1.20 0.45 1.82 $13,248,170 $3,372,060 $9,876,110 $13,248,170 $11,041,700 $2,206,470 $13,248,170 $29,479,219 ($16,231,050) $19,562,916 $10,721,244 $8,841,672Work Custom Rebates 3.32 1.55 0.44 3.35 $17,720,741 $5,335,583 $12,385,158 $17,720,741 $11,419,619 $6,301,122 $17,720,741 $40,729,136 ($23,008,395) $28,489,161 $8,493,291 $19,995,869C&I Portfolio 3.56 1.38 0.44 2.50 $30,968,911 $8,707,643 $22,261,268 $30,968,911 $22,461,319 $8,507,592 $30,968,911 $70,208,355 ($39,239,445) $48,052,077 $19,214,535 $28,837,542

Public Efficient Streetlighting 0.80 0.90 0.75 1.2 $3,481,137 $4,353,388 ($872,251) $3,481,137 $3,848,673 ($367,536) $3,481,137 $4,643,902 ($1,162,765) $4,005,828 $3,370,617 $635,211

2.00 1.05 0.41 2.23 $39,453,936 $19,715,571 $19,738,364 $39,453,936 $37,624,015 $1,829,920 $39,453,936 $96,013,809 ($56,559,873) $65,226,131 $29,259,618 $35,966,513

Home Energy Management 0.25 0.90 0.22 1.79 $1,139,627 $4,579,965 ($3,440,338) $3,481,137 $3,848,673 ($367,536) $1,139,627 $5,098,343 ($3,958,716) $852,872 $477,582 $375,290Electric Energy Consumption Optimization NA NA NA NA $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

0.25 0.90 0.22 1.79 $1,139,627 $4,579,965 ($3,440,338) $3,481,137 $3,848,673 ($367,536) $1,139,627 $5,098,343 ($3,958,716) $852,872 $477,582 $375,290

1.67 1.04 0.40 2.22 $40,593,563 $24,295,537 $16,298,026 $42,935,073 $41,472,688 $1,462,385 $40,593,563 $101,112,153 ($60,518,590) $66,079,003 $29,737,199 $36,341,803

Attachment JCW-6DSM - 3 Year Plan

DSM Portfolio

I&M DSM Plan - 3 Year Benefit Cost Analysis--Hourly Cost Based

Public

EE Portfolio

Demand Side Management (DSM)

Page 2 of 2Indiana Michigan Power Company - Indiana

DSM Plan Portfolio

Program

Weighted Average

Measure Life (Yrs)

Weighted Ave Lifetime Energy

Savings (kWh)

Weighted Average Measure Life (Yrs)

Weighted Ave Lifetime Energy Savings (kWh)

Weighted Average

Measure Life (Yrs)

Weighted Ave Lifetime

Energy Savings (kWh)

3 Yr Average Measure

Life (Yrs)

Total Lifetime Energy

Savings (kWh)Home Energy Products 12.2 21,030,736 13.7 15,056,152 13.7 18,792,034 54,878,922Income Qualified Weatherproofing 14.4 3,855,310 14.4 2,360,798 14.4 2,360,798 8,576,905Home Appliance Recycling 8.0 15,738,136 8.0 15,738,136 8.0 0 31,476,272Home New Construction 17.9 11,490,064 17.9 11,490,064 17.9 11,490,064 34,470,193Home Energy Engagement 1.3 6,232,545 1.3 6,237,959 1.2 6,613,545 19,084,049Home Energy Management 15 1,471,680 15.0 1,295,078 15.0 1,177,344 3,944,102Work Prescriptive Rebates 15.4 203,329,146 15.4 153,356,813 15.4 153,356,813 510,042,772Work Custom Rebates 10.9 252,422,834 10.6 211,736,834 10.0 165,001,234 629,160,902Electric Energy Consumption Optimization (EECO) 20.0 409,159,460 20.0 470,533,379 20.0 490,991,352 1,370,684,191Public Efficient Streetlighting 21.3 52,916,754 21.3 52,916,754 21.3 52,916,754 158,750,263

Program Total 16.2 977,646,666 16.7 940,721,968 17.2 902,699,938 16.7 2,821,068,572

Attachment JCW-7

2020 2021 2022

Indiana Michigan Power Company - Indiana3 Year Plan

DSM Plan Lifetime Energy Savings Summary

1

I&M DSM PLAN Oversight Process

(a) Oversight Board Members. The five voting members of the I&M DSM Oversight

Board (OSB) include all Parties to this proceeding: I&M, I&M Industrial Group, Citizens

Action Coalition of Indiana (CAC), the City of Fort Wayne and the Indiana Office of Utility

Consumer Counselor (OUCC).

(b) Quarterly OSB Meetings. I&M will hold meetings with its OSB at least quarterly, with

meeting dates determined by the OSB. OSB members can submit agenda items to I&M

before each quarterly meeting. I&M will distribute meeting agendas for the quarterly

meetings to OSB members no less than 5 business days before each meeting. The

quarterly meetings will provide I&M an opportunity to gather feedback from OSB members

on performance to date and seek input on upcoming program and budget decisions.

(c) OSB Voting Rights. A vote of the five OSB voting members will be taken on the

following issues as they arise:

(i) EM&V:

• Selection of the EM&V vendor;

• Application of the EM&V results to shared savings, lost revenues and final

energy savings;

(ii) Program Funds:

• Request by I&M to move approved funds between sectors;

• Any I&M proposal to reassign more than 15% of a sector's total budget to

other programs in the same sector;

Attachment JCW-8 Page 1 of 4

2

• Any I&M request to spend up to 5% more than the estimated total budget

for each sector, as shown in the DSM Plan;

• Any I&M request to move approved program funds to another program

from the low-income program that is being provided despite its inability to

score as cost-effective.

Note: Any unspent carryover funds from a previous Plan year will be used before I&M

reassigns current-year funds or seeks to exceed the sector budget.

(iii) Adding New OSB Members:

• Any request to add new voting members to the OSB. The addition of new

OSB members will require a unanimous vote.

(d) Voting Process: I&M will provide five (5) business days advance notice of the need

for a vote by the OSB, unless otherwise agreed upon. I&M will provide all pertinent

information concerning I&M's program required for the OSB to make informed decisions

as soon as it becomes available, but not less than five business days before the vote,

unless otherwise agreed by all voting members. The provision of information by the

Company should not be read to mean that the Company is required to research or obtain

information on behalf of any OSB member(s). OSB members will act in good faith to not

use requests for information to unnecessarily delay voting on any issue. If a vote is

properly noticed to all voting members of the OSB and a member fails to act by the

designated voting deadline, that failure to act will reduce the number of votes on that

issue. The vote is determined by a simple majority vote of the voting members

participating in the particular vote.

Attachment JCW-8 Page 2 of 4

3

(e) OSB Communication Between Quarterly Meetings. OSB members may

communicate one-on-one or in a joint OSB meeting or conference call between quarterly

OSB meetings if needed to vote on proposals that require OSB approval, get feedback,

obtain program or budget updates, address questions, or discuss concerns. If a vote is

required between quarterly meetings, the voting shall be conducted electronically within

a week of the notice, subject to the same advance notice requirements discussed above.

I&M will also provide monthly scorecards consistent with current format within 45 days of

the end of each month, based on all data available at that time. If any data is missing or

needs to be confirmed, I&M will note that on the scorecard. I&M will use its best efforts to

ensure that OSB members have all appropriate information to be fully informed on the

progress of I&M's DSM Plan. If any information includes trade secrets or other protected

confidential information, OSB members will be required to execute appropriate non-

disclosure agreements before I&M provides that information.

(f) Advance Notice of Future Filings: I&M will notify OSB members prior to making a

future DSM plan or reconciliation filing to provide a reasonable opportunity for discussion

and input. I&M will also file periodic updates address questions, or discuss concerns. If a

vote is required between quarterly meetings, the voting shall be conducted electronically

within a week of the notice, subject to the same advance notice requirements discussed

above. I&M will also provide monthly scorecards consistent with current format within 45

days of the end of each month, based on all data available at that time. If any data is

missing or needs to be confirmed, I&M will note that on the scorecard. I&M will use its

best efforts to ensure that ass members have all appropriate information to be fully

informed on the progress of I&M's DSM Plan. If any information includes trade secrets or

Attachment JCW-8 Page 3 of 4

4

other protected confidential information, OSB members will be required to execute

appropriate non-disclosure agreements before I&M provides that information.

(g) Dispute Resolution Process: If there is an issue concerning a pending action by

I&M that any voting member of the OSB indicates is in need of further discussion or

escalation, I&M will delay implementation of any items that do not require immediate

action, so that I&M management and OSB voting members' management can discuss

the matter further to ensure a sufficient opportunity for input is provided before action is

taken. That management conversation shall happen within 3 business days of a request,

unless otherwise agreed. However, if the matter is time sensitive, I&M and management

of the concerned OSB member will make every effort to provide management personnel

for immediate discussion (within 1 business day or as otherwise agreed). The OSB voting

members agree to use this escalation process in good faith, escalating only those matters

appropriate for stakeholder management's consideration. This dispute resolution process

does not limit or otherwise affect the OSB members’ ability to seek relief from the

Commission.

(h) Broader Stakeholder Input: This process does not limit the ability of I&M to seek

other interested stakeholder input beyond the members of the OSB.

Attachment JCW-8 Page 4 of 4

DSM Program

2020 PY 11 Expected Energy Savings (kWh)

2020 PY 11 Program Net

to Gross Ratios

Total Adjusted** 2020

PY 11 DSM Program Net

Energy Savings (kWh)

2020 PY 11 DSM Program Net

Lost Revenue ($)

2018 Verified & 2019 Forecast

Cumulative Net Energy Savings

(kWh)*

2018 Verified & 2019 Forecast

Cumulative Net Lost Revenue

($)*

2020 PY 11 Net Lost Energy Savings (kWh)

2020 PY 11 Net Lost Revenue

Forecast($)

1 2 3 = (1 x .5) x 24 = 3 x Net Lost Realization Rate 5 6 7 = 3 + 5

8 = 7 x Net Lost Realization Rate

1,561,219 70% 545,976 48,313 14,336,352 1,268,624 14,882,328 1,316,9371,105,931 100% 552,966 48,932 907,496 80,304 1,460,462 129,236

0 96% 0 0 3,323,604 294,106 3,323,604 294,1061,868,904 48% 452,275 40,022 2,749,870 243,336 3,202,145 283,358528,046 68% 178,910 15,832 1,266,825 112,101 1,445,735 127,933

0 98% 0 0 731,302 64,713 731,302 64,7136,232,545 98% 3,053,947 270,244 15,063,920 1,333,006 18,117,867 1,603,25012,750,000 87% 5,575,912 467,707 51,715,627 4,337,907 57,291,539 4,805,61423,107,939 93% 10,745,192 901,307 52,445,979 4,399,169 63,191,171 5,300,475

0 0% 0 0 2,250,752 188,793 2,250,752 188,7930 100% 0 0 0 0 0 0

98,112 100% 98,112 8,682 437,144 38,683 535,256 47,3650 100% 0 0 0 0 0 0

8,663,952 100% 8,663,952 766,673 4,729,022 418,471 13,392,974 1,185,144

11,794,021 100% 11,794,021 989,283 6,031,462 505,919 17,825,483 1,495,20267,710,669 41,661,263 3,556,994 155,989,355 13,285,132 197,650,618 16,842,126

13,546,138 1,198,698 43,545,535 3,853,344 57,091,673 5,052,04228,115,125 2,358,297 112,443,820 9,431,788 140,558,945 11,790,084

Net Lost Realization RatesResidential 0.08849 cents/kWhC&I 0.08388 cents/kWh

*As accounted for through measure life tracking for measures installed as of Dec 31, 2019 but with life remaining in 2020.

C&I****

DSM Program Portfolio Total

**Adjusted Net Lost Revenue adjusts reported annualized savings to account for measure installations that do not yield a full year's worth of energy savings, as agreed upon by I&M's Oversight Board.

***EECO savings is presented as an average yearly savings where savings incurs savings from initiation date for duration of year, so full year savings occurs during first program year.

Home Energy ManagementWork Energy Management

Attachment JCW-9

Work Direct Install

Indiana Michigan Power Company - IndianaDSM - 3 Year Plan

2020 Net Lost Revenue Forecast

2020 PY 10 DSM Plan Measures

Legacy Measures-With Cause No. 44841

3 Yr. Cap Applied

2020 Forecast - DSM PlanWith Legacy Measures

Cause No. 44841 3 Yr. Cap Applied

Electric Energy Consumption Optimization (EECO) C&I***

Residential

Public Efficient Streetlighting

DSM ProgramHome Energy Products

Electric Energy Consumption Optimization (EECO) Residential***

Income Qualified WeatherproofingSchools Energy EducationHome Appliance RecyclingHome New ConstructionHome Weatherproofing

Home Energy EngagementWork Prescriptive Rebates

Work Custom Rebates

DSM Program 2021 PY 12 Expected Energy Savings (kWh)

2021 PY 12 Program Net

to Gross Ratios

Total Adjusted** 2021

PY 12 DSM Program Net

Energy Savings (kWh)

2021 PY 12 DSM Program Net Lost Revenue

($)

2018 Verified & 2019 Forecast

Cumulative Net Energy Savings

(kWh)*

2018 Verified & 2019

Forecast Cumulative

Net Lost Revenue

($)*

DSM Program 2020 PY 11

Expected Energy Savings (kWh)

2020 PY 11 DSM Program

Net Lost Revenue

($)

2021 PY 12 Net Lost Energy

Savings (kWh)

2021 PY 12 Net Lost Revenue

Forecast ($)

1 2 3 = (1 x .5) x 24 = 3 x Net Lost Realization Rate 5 6 7 8 9 = 3 + 5 + 7

10 = 9 x Net Lost Realization Rate

1,104,403 64% 355,265 31,437 12,864,221 1,138,355 1,561,219 138,152 14,780,705 1,307,9451,011,963 100% 505,981 44,774 625,083 55,314 1,105,931 97,864 2,236,995 197,952

0 96% 0 0 3,218,441 284,800 0 0 3,218,441 284,8001,829,558 48% 442,753 39,179 2,293,957 202,992 1,868,904 165,379 4,605,614 407,551528,046 68% 178,910 15,832 1,069,778 94,665 528,046 46,727 1,776,734 157,223

0 98% 0 0 607,590 53,766 0 0 607,590 53,7666,237,959 98% 3,056,600 270,479 3,640,115 322,114 0 0 6,696,715 592,59210,750,000 88% 4,751,879 398,588 44,238,810 3,710,751 12,750,000 1,069,470 61,740,689 5,178,80919,995,539 93% 9,297,925 779,910 47,774,456 4,007,321 23,107,939 1,938,294 80,180,320 6,725,525

0 0% 0 0 1,836,695 154,062 0 0 1,836,695 154,0620 100% 0 0 0 0 0 0 0 0

86,339 100% 86,339 7,640 178,216 15,770 0 0 264,555 23,4100 100% 0 0 0 0 0 0 0 0

9,963,544 100% 9,963,544 881,674 0 0 0 0 9,963,544 881,674

13,563,125 100% 13,563,125 1,137,675 0 0 0 0 13,563,125 1,137,67565,070,476 42,202,320 3,607,188 118,347,362 10,039,910 40,922,039 3,455,886 201,471,721 17,102,984

14,589,392 1,291,015 24,497,401 2,167,775 5,064,100 448,122 44,150,893 3,906,91327,612,928 2,316,172 93,849,961 7,872,135 35,857,939 3,007,764 157,320,828 13,196,071

Net Lost Realization RatesResidential 0.08849 cents/kWhC&I 0.08388 cents/kWh

*As accounted for through measure life tracking for measures installed as of Dec 31, 2019 but with life remaining in 2021.

**Adjusted Net Lost Revenue adjusts reported annualized savings to account for measure installations that do not yield a full year's worth of energy savings, as agreed upon by I&M's Oversight Board.

***EECO savings is presented as an average yearly savings where savings incurs savings from initiation date for duration of year, so full year savings occurs during first program year.

DSM ProgramHome Energy Products

Income Qualified WeatherproofingSchools Energy EducationHome Appliance RecyclingHome New ConstructionHome Weatherproofing

Home Energy EngagementWork Prescriptive Rebates

Work Custom Rebates

C&I****

Work Energy ManagementElectric Energy Consumption

Optimization (EECO) Residential***Electric Energy Consumption Optimization (EECO) C&I***

ResidentialDSM Program Portfolio Total

Work Direct InstallPublic Efficient StreetlightingHome Energy Management

2021 PY 12 DSM Plan Measures

Indiana Michigan Power Company - Indiana Attachment JCW-10DSM - 3 Year Plan

2021 Net Lost Revenue Forecast

Legacy Measures-With Cause No. 44841

3 Yr. Cap Applied

2020 Legacy Measures-With Cause No. 44841

3 Yr. Cap Applied

2021 Forecast - DSM PlanWith Legacy Measures

Cause No. 44841 3 Yr. Cap Applied

DSM Program 2022 PY 13 Expected Energy Savings

(kWh)

2022 PY 13 Program Net

to Gross Ratios

Total Adjusted** 2022 PY 13 DSM

Program Net Energy Savings

(kWh)

2022 PY 13 DSM Program Net Lost Revenue

($)

2018 Verified & 2019 Forecast

Cumulative Net Energy Savings

(kWh)*

2018 Verified & 2019 Forecast

Cumulative Net Lost Revenue

($)*

DSM Program 2020 PY 11 Expected

Energy Savings (kWh)

2020 PY 11 DSM

Program Net Lost

Revenue ($)

DSM Program

2021 PY 12 Expected Energy Savings (kWh)

2021 PY 12 DSM

Program Net Lost

Revenue ($)

2022 PY 13 Net Lost Energy Savings

(kWh)

2022 PY 13 Net Lost Revenue

Forecast ($)

1 2 3 = (1 x .5) x 24 = 3 x Net Lost Realization Rate 5 6 7 8 9 10 10 = 3 + 5 + 7 + 9

14 = 13 x Net Lost Realization Rate

1,361,939 64% 438,109 38,768 5,116,465 452,756 1,561,219 138,152 1,104,403 97,729 8,220,196 727,4051,010,633 100% 505,316 44,715 321,440 28,444 1,105,931 97,864 1,011,963 89,549 2,944,650 260,572

0 96% 0 0 2,193,469 194,100 0 0 0 0 2,193,469 194,1000 48% 0 0 845,959 74,859 1,868,904 165,379 1,829,558 161,898 4,544,421 402,136

528,046 68% 178,910 15,832 391,834 34,673 528,046 46,727 528,046 46,727 1,626,837 143,9590 98% 0 0 287,162 25,411 0 0 0 0 287,162 25,411

6,613,545 98% 3,240,637 286,764 1,780,738 157,578 0 0 0 0 5,021,375 444,34110,750,000 88% 4,751,879 398,588 14,224,519 1,193,153 12,750,000 1,069,470 10,750,000 901,710 42,476,398 3,562,92016,496,499 93% 7,670,871 643,433 22,275,030 1,868,430 23,107,939 1,938,294 19,995,539 1,677,226 73,049,379 6,127,382

0 0% 0 0 325,592 27,311 0 0 0 0 325,592 27,3110 100% 0 0 0 0 0 0 0 0 0 0

78,490 100% 78,490 6,946 72,947 6,455 0 0 0 0 151,437 13,4010 100% 0 0 0 0 0 0 0 0 0 0

10,396,742 100% 10,396,742 920,008 0 0 0 0 0 0 10,396,742 920,008

14,152,826 100% 14,152,826 1,187,139 0 0 0 0 0 0 14,152,826 1,187,13961,388,719 41,413,780 3,542,192 47,835,155 4,063,169 40,922,039 3,455,886 35,219,509 2,974,837 165,390,482 14,036,084

14,838,204 1,313,033 11,010,014 974,276 5,064,100 448,122 4,473,970 395,902 35,386,288 3,131,33326,575,576 2,229,159 36,825,141 3,088,893 35,857,939 3,007,764 30,745,539 2,578,936 130,004,195 10,904,752

Net Lost Realization RatesResidential 0.08849 cents/kWhC&I 0.08388 cents/kWh

*As accounted for through measure life tracking for measures installed as of Dec 31, 2019 but with life remaining in 2021.

**Adjusted Net Lost Revenue adjusts reported annualized savings to account for measure installations that do not yield a full year's worth of energy savings, as agreed upon by I&M's Oversight Board.

***EECO savings is presented as an average yearly savings where savings incurs savings from initiation date for duration of year, so full year savings occurs during first program year.

Indiana Michigan Power Company - Indiana

DSM Program Portfolio Total

Electric Energy Consumption Optimization (EECO) C&I***

ResidentialC&I****

Work Custom RebatesWork Direct Install

Public Efficient StreetlightingHome Energy Management

DSM ProgramHome Energy Products

Income Qualified WeatherproofingSchools Energy EducationHome Appliance Recycling

Home New ConstructionHome Weatherproofing

Home Energy EngagementWork Prescriptive Rebates

Electric Energy Consumption Optimization (EECO) Residential***

Work Energy Management

Attachment JCW-11DSM - 3 Year Plan

2022 Net Lost Revenue Forecast

Legacy Measures-With Cause No. 44841

3 Yr. Cap Applied

2020 Legacy Measures-With Cause No. 44841

3 Yr. Cap Applied

2022 Forecast - DSM PlanWith Legacy Measures

Cause No. 44841 3 Yr. Cap Applied

2021 Legacy Measures-With Cause No. 44841

3 Yr. Cap Applied 2022 PY 13 DSM Plan Measures

15%15% Sector

Estimated 90% Pre-Tax Program Program CappedUtility Cost Test of UCT Shared Operating Operating Shared

Program Net Benefit* Net Benefit Savings Costs Cost Cap Savings(1) (2) (3)=(2) x 90% (4)=(3) x 15% (5) (6)=(5) x 15% (7)=min(4),(6)

Home Energy Products ($914,435) $827,838

Home Appliance Recycling ($254,006) $386,641

Home New Construction $415,492 $381,714

Home Energy Engagement ($583,609) $538,083

Home Energy Management ($3,465,399) $791,004

Residential Sector Total ($4,801,957) ($4,321,761) ($648,264) $2,925,279 $438,792 $0

Work Prescriptive Rebates $8,062,860 $1,481,679

Work Custom Rebates $10,212,615 $2,388,811

Commercial and Industrial Sector Total $18,275,475 $16,447,928 $2,467,189 $3,870,490 $580,574 $580,574

Total at 100% Energy Savings Target Attainment $13,473,519 $12,126,167 $1,818,925 $6,795,769 $1,019,365 $580,574

(8) (9) = (8) * 85% (10) = (7) * 15%2020 85% 15%

Savings Target Threshold Performance ImpactResidential Sector Energy Savings Target Attainment less than 85% 20,058,709 17,049,902 $0

Commercial & Industrial Energy Savings Target Attainment less than 85% 50,136,315 42,615,868 ($87,086)

$493,488

(12) (13) = (12) * 105% (14) = (7) * 10%2020 105% 10%

Savings Target Threshold Performance ImpactResidential Energy Savings Target Attainment >= 105% 20,058,709 21,061,644 $0

Commercial & Industrial Energy Savings Target Attainment >= 105% 50,136,315 52,643,131 $58,057

$638,631

* Source: Attachment JCW-6, Page 1 -- 3 Yr Score Seasonal Cost Based

Total Final Shared Savings Earnings with Downside Performance Impact (11) = (7) + (10)

Total Final Shared Savings Earnings with Upside Performance Impact (15) = (7) + (14)

Attachment JCW-12Indiana Michigan Power Company - IndianaDSM - 3 Year DSM Plan

2020 Shared Savings Forecast

Component 1

Component 2

15%15% Sector

90% Pre-Tax Program Program CappedUtility Cost Test of UCT Shared Operating Operating Shared

Program Net Benefit* Net Benefit Savings Costs Cost Cap Savings(1) (2) (3)=(2) x 90% (4)=(3) x 15% (5) (6)=(5) x 15% (7)=min(4),(6)

Home Energy Products ($914,435) $939,906

Home Appliance Recycling ($254,006) $370,304

Home New Construction $415,492 $369,734

Home Energy Engagement ($583,609) $508,760

Home Energy Management ($3,465,399) $779,922

Residential Sector Total ($4,801,957) ($4,321,761) ($648,264) $2,968,625 $445,294 $0

Work Prescriptive Rebates $8,062,860 $1,332,971

Work Custom Rebates $10,212,615 $2,178,261

Commercial and Industrial Sector Total $18,275,475 $16,447,928 $2,467,189 $3,511,232 $526,685 $526,685

Total at 100% Energy Savings Target Attainment $13,473,519 $12,126,167 $1,818,925 $6,479,857 $971,979 $526,685

(8) (9) = (8) * 85% (10) = (7) * 15%2020 85% 15%

Savings Target Threshold Performance ImpactResidential Sector Energy Savings Target Attainment less than 85% 20,761,812 17,647,540 $0

Commercial & Industrial Energy Savings Target Attainment less than 85% 46,793,018 39,774,065 ($79,003)

$447,682

(12) (13) = (12) * 105% (14) = (7) * 10%2020 105% 10%

Savings Target Threshold Performance ImpactResidential Energy Savings Target Attainment >= 105% 20,761,812 21,799,902 $0

Commercial & Industrial Energy Savings Target Attainment >= 105% 46,793,018 49,132,669 $52,668

$579,353

* Source: Attachment JCW-6, Page 1 -- 3 Yr Score Seasonal Cost Based

Total Final Shared Savings Earnings with Downside Performance Impact (11) = (7) + (10)

Total Final Shared Savings Earnings with Upside Performance Impact (15) = (7) + (14)

Indiana Michigan Power Company - Indiana Attachment JCW-13DSM - 3 Year DSM Plan

2021 Shared Savings Forecast

Component 1

Component 2

15%15% Sector

90% Pre-Tax Program Program CappedUtility Cost Test of UCT Shared Operating Operating Shared

Program Net Benefit* Net Benefit Savings Costs Cost Cap Savings(1) (2) (3)=(2) x 90% (4)=(3) x 15% (5) (6)=(5) x 15% (7)=min(4),(6)

Home Energy Products ($914,435) $896,459

Home New Construction $415,492 $367,182

Home Energy Engagement ($583,609) $500,964

Home Energy Management ($3,465,399) $797,344

Residential Sector Total ($4,547,951) ($4,093,156) ($613,973) $2,561,949 $384,292 $0

Work Prescriptive Rebates $8,062,860 $1,243,020

Work Custom Rebates $10,212,615 $1,937,972

Commercial and Industrial Sector Total $18,275,475 $16,447,928 $2,467,189 $3,180,992 $477,149 $477,149

Total at 100% Energy Savings Target Attainment $13,727,524 $12,354,772 $1,853,216 $5,742,940 $861,441 $477,149

(8) (9) = (8) * 85% (10) = (7) * 15%2020 85% 15%

Savings Target Threshold Performance ImpactResidential Sector Energy Savings Target Attainment less than 85% 19,989,394 16,990,985 $0

Commercial & Industrial Energy Savings Target Attainment less than 85% 43,883,679 37,301,127 ($71,572)

$405,577

(12) (13) = (12) * 105% (14) = (7) * 10%2020 105% 10%

Savings Target Threshold Performance ImpactResidential Energy Savings Target Attainment >= 105% 19,989,394 20,988,864 $0

Commercial & Industrial Energy Savings Target Attainment >= 105% 43,883,679 46,077,863 $47,715

$524,864

* Source: Attachment JCW-6, Page 1 -- 3 Yr Score Seasonal Cost Based

Total Final Shared Savings Earnings with Downside Performance Impact (11) = (7) + (10)

Total Final Shared Savings Earnings with Upside Performance Impact (15) = (7) + (14)

Indiana Michigan Power Company - Indiana Attachment JCW-14DSM - 3 Year DSM Plan

2022 Shared Savings Forecast

Component 2

Component 1

ResidentialCommercial &

Industrial Total2020 PY 11 Program Operating Cost $6,705,294 $4,318,726 $11,024,020

2020 PY 11 DSM Plan Net Lost Revenue $1,198,698 $2,358,297 $3,556,9942020 PY 11 Legacy Net Lost Revenue $3,853,344 $9,431,788 $13,285,132

2020 PY 11 Shared Savings $0 $580,574 $580,5742020 PY 11 Revenue Requirement $11,757,336 $16,689,384 $28,446,7202021 PY 12 Program Operating Cost $6,361,782 $3,965,578 $10,327,360

2021 PY 12 DSM Plan Net Lost Revenue $1,291,015 $2,316,172 $3,607,1882021 PY 12 Legacy Net Lost Revenue $2,615,897 $10,879,899 $13,495,796

2021 PY 12 Shared Savings $0 $526,685 $526,6852021 PY 12 Revenue Requirement $10,268,694 $17,688,334 $27,957,0282022 PY 13 Program Operating Cost $6,043,736 $3,698,588 $9,742,324

2022 PY 13 DSM Plan Net Lost Revenue $1,313,033 $2,229,159 $3,542,1922022 PY 13 Legacy Net Lost Revenue $1,818,300 $8,675,593 $10,493,893

2022 PY 13 Shared Savings $0 $477,149 $477,1492022 PY 13 Revenue Requirement $9,175,069 $15,080,488 $24,255,557

3 Yr. Program Operating Cost $19,110,812 $11,982,892 $31,093,7043 Yr. DSM Plan Net Lost Revenue $3,802,746 $6,903,628 $10,706,374

3 Yr. DSM Legacy Net Lost Revenue $8,287,542 $28,987,279 $37,274,8203 Yr. Shared Savings $0 $1,584,407 $1,584,407

3 Yr. Revenue Requirement $31,201,099 $49,458,206 $80,659,305

Total Revenue Requirement-Net of Gross Revenue Conversion $31,201,099 $49,458,206 $80,659,305

Indiana Michigan Power Company - Indiana DSM - 3 Year Plan

DSM/EE Revenue Requirement

Attachment JCW-15

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Home Energy Products Program - Indiana

Objective: The overall objective of the Home Energy Products (HEP) Program is educate, encourage and entice I&M’s customers to manage their electric usage through the purchase and installation of more efficient residential measures. Savings are achieved by promoting the benefits associated with eligible energy efficiency measures and offering cash-back rebates structured to cover a portion of the incremental cost of purchase. Specific objectives of the Home Energy Products Program are to:

1. Lower electric consumption in the residential market sector throughthe purchase and installation of eligible energy efficiency measuresand attribute electric energy savings to those purchases thatreceive a rebate through the program.

2. Provide a streamlined and efficient process for customers (or theirTrade Ally) to receive rebates for measures authorized in theprogram.

3. Educate residential customers regarding opportunities to managetheir overall energy usage through the purchase and installation ofenergy efficient products.

4. Encourage equipment vendors and contractors to actively marketeligible energy efficient technologies to residential customers.

Target Market: The program will target all I&M Indiana residential customers through rebates for efficient residential lighting LED technologies through an online marketplace, and I&M Indiana residential customers having electric heat, electric water heat, or other electric energy intensive products in the home.

Program Duration: The program will be a part of I&M’s 2020 – 2022 Indiana DSM/EE

residential sector portfolio.

Program Description: The Home Energy Products Program will increase customer awareness

and uptake for energy efficient products through cash-back rebates designed to cover a portion of the incremental cost to upgrade to efficient technologies. Additionally, the program will seek to educate residential customers in how they can manage their energy costs and how the program’s rebates can offset or lower their cost to do so. The program will also inform customers and Trade Allies about the energy saving and non-energy benefits associated with efficient HVAC and self-

Exhibit JCW-16 Page 1 of 6

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install products that reduce energy consumption. The program will help stimulate market provider stocking and investment in high-efficiency products through outreach and training, educational point of sale materials, cooperative advertising and sales brochures. The program will also provide an online sales/rebate marketplace channel for customer engagement and convenience in the purchase of efficient products and streamlined rebate approval and receipt. The online marketplace will also serve to help I&M to effectuate affirmed customer attribution in the program. Last, the program may also present an online Trade Ally engagement tool and reference center to both engage program-select Trade Allies and to inform participating customers of Trade Ally participation in the program with the availability of their services.

Incentive Strategy:

The efficient products component of the program will increase customer acceptance and uptake for energy efficient products through cash-back rebates designed to cover a portion of the incremental cost to upgrade to efficient technologies. The efficient products component will provide incentives to I&M residential customers who upgrade to more efficient HVAC products such as air conditioners, heat pumps (central split systems or minim split ductless units) or other energy intensive measures such as heat pump water heaters or efficient electric resistance water heaters, based on I&M’s offering of rebates for these more efficient measures through HVAC industry trade allies. The program will also provide an online sales/rebate marketplace channel for customer engagement and convenience in the purchase of efficient products and streamlined rebate approval and receipt. The online marketplace will also serve to help I&M to effectuate affirmed customer attribution in the program.

Eligible Measures:

Efficient Lighting

Exhibit JCW-16 Page 2 of 6

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5 W General Service LED 6 W General Service LED 7 W General Service LED 8 W General Service LED 9 W General Service LED

10 W General Service LED 11 W General Service LED 12 W General Service LED 13 W General Service LED 14 W General Service LED 15 W General Service LED 16 W General Service LED 17 W General Service LED 18 W General Service LED 23 W General Service LED

4 W Reflector LED 5 W Reflector LED 6 W Reflector LED 7 W Reflector LED 8 W Reflector LED 9 W Reflector LED

10 W Reflector LED 11 W Reflector LED 12 W Reflector LED 13 W Reflector LED 14 W Reflector LED 15 W Reflector LED 16 W Reflector LED 17 W Reflector LED 18 W Reflector LED 19 W Reflector LED 23 W Reflector LED 26 W Reflector LED 32 W Reflector LED 3 W Specialty LED 4 W Specialty LED 5 W Specialty LED 6 W Specialty LED 7 W Specialty LED

Efficient Products WiFi Tstat - Central Air Conditioning

WiFi Tstat - Heat Pump WiFi Tstat - Electric Heat

Smart Tstat - Central Air Conditioning Air Source Heat Pump-SEER 13 Baseline => SEER 16 / HPSF 9.5 Air Source Heat Pump-SEER13 Baseline => SEER 17 / COP 3.8 Air Source Heat Pump-SEER 13 Baseline => SEER 18 / COP 4.1 Air Source Heat Pump-SEER 13 Baseline => SEER 21 / COP 4.4

Ductless HP Replacement of HP to 17 SEER 9.5 HSPF Ductless HP Replacement of HP to 19 SEER 9.5 HSPF (or greater Ductless HP Replacement of HP to 21 SEER 10 HSPF or greater

Exhibit JCW-16 Page 3 of 6

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Ductless HP Replacement of HP 23 SEER 10 HSPF or greater Ductless HP Displacement of Elec Resistance to 17 SEER 9.5 HSPF Ductless HP Displacement of Elec Resistance to 19 SEER 9.5 HSPF Ductless HP Displacement of Elec Resistance to 21 SEER 10 HSPF

Ductless HP Displacement of Elec Resistance 23 SEER or greater 10 HSPF Ground Source Closed Loop Heat Pump 20 SEER 12 HPSF Displace Air

Source Heat Pump Baseline 13 SEER Ground Source Closed Loop Heat Pump 21.5 SEER 12.9 HPSF Displace Air

Source Heat Pump Baseline 13 SEER Ground Source Closed Loop Heat Pump 23.5 EER 14.3 HPSF Displace Air

Source Heat Pump Baseline 13 SEER Ground Source Closed Loop Heat Pump 29.9 EER 14.4 HPSF Displace Air

Source Heat Pump Baseline 13 SEER Ground Source Closed Loop Heat Pump 20 SEER 12 HPSF Displace Air

Source Heat Pump Baseline 13 SEER Ground Source Closed Loop Heat Pump 21.5 SEER 12.9 HPSF Displace Air

Source Heat Pump Baseline 13 SEER Ground Source Closed Loop Heat Pump 23.5 EER 14.3 HPSF Displace Air

Source Heat Pump Baseline 13 SEER Ground Source Closed Loop Heat Pump 29.9 EER 14.4 HPSF Displace Air

Source Heat Pump Baseline 13 SEER Ground Source Closed Loop Heat Pump 20 SEER 12 HPSF Displace Air

Source Heat Pump Baseline 13 SEER Ground Source Closed Loop Heat Pump 21.5 SEER 12.9 HPSF Displace Air

Source Heat Pump Baseline 13 SEER Ground Source Closed Loop Heat Pump 23.5 EER 14.3 HPSF Displace Air

Source Heat Pump Baseline 13 SEER Ground Source Closed Loop Heat Pump 29.9 EER 14.4 HPSF Displace Air

Source Heat Pump Baseline 13 SEER PTHP Variable Speed SEER 17 11.9 HPSF Upgrade from PTAC SEER 10.5

Electric Resistance Heat PTHP Variable Speed SEER 17 11.9 HPSF Upgrade from PTHP Baseline

SEER 10.5 HPSF 7.7 Efficient ECM fan motor-Retrofit Exist Upgrade Only

HP Water Heater Energy Star EF >=2.0 Single/Multi Family 50 Gallon Electric High Efficiency Heater EF =.93 Multi Family 30 Gallon replacing .9

EF electric VSD Pool Pumps HP 2

ENERGY STAR Dehumidifier Smart Home Switches

Smart Home Smart Strips Smart Home Zigbee/WiFi Hubs Smart Home WiFi LED Bulbs

Implementation Strategy:

I&M will implement the products component of the program in-house and partner with an implementation vendor to deliver the upstream lighting component of the program. I&M will partner with an implementation vendor to offer and provide the online residential marketplace, the associated product rebates rebated through the online marketplace, and energy efficiency measure

Exhibit JCW-16 Page 4 of 6

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procurement and distribution to end use participating customers that are eligible to receive the energy efficient measures and rebates through the online marketplace.

Marketing Strategy: The target market for the program is I&M’s Indiana residential customers

residing in single family homes and multifamily dwellings. I&M will promote the program through the following marketing channels:

1. Direct mail campaign

2. Direct contacts with trade allies at their place of business

3. Online marketplace promotion via direct outreach and electronic media

4. Web-based marketing via the I&M’s website (ongoing)

5. Direct e-mail or online media outreach to trade allies

6. Bill stuffers and umbrella marketing

Estimated Participation and Impacts

Expected participation and associated estimated impacts for the program are provided in the table below. Home Energy Products-Products Component

Per KWH Rate 2020 2021 2022

Fixed Program Operating Costs Vendor Fixed $0 $0 $0

Implementation & Other Annual Cost $78,000 $78,000 $78,000

Program Coordination $102,000 $102,000 $102,000

EM&V $15,000 $15,000 $15,000 Total Fixed $195,000 $195,000 $195,000

Variable Program Operating Costs

Customer Incentives $0.14 $125,183 $113,933 $127,833 Marketplace Cost $0.06 $5,819 $6,742 $6,290

Total Budget $0.27 $326,002 $315,675 $329,123 Energy Savings (kWh) 1,206,572 978,109 1,219,841 Demand Savings (kW) 204 204 205

Participation (# Measures) 919 769 919

Home Energy Products--Lighting Component

Per KWH Rate 2020 2021 2022

Fixed Program Operating Costs

Exhibit JCW-16 Page 5 of 6

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Vendor Fixed $0 $0 $0 Implementation & Other Annual

Cost $78,500 $78,500 $78,500 Program Coordination $20,400 $20,400 $0 EM&V $10,000 $10,000 $10,000 Total Fixed $108,900 $108,900 $88,500

Variable Program Operating Costs Customer Incentives $0.3399 $85,565 $68,456 $57,758 Marketplace Cost $0.8517 $180,985 $173,289 $176,391

Total Budget $1.68 $375,450 $350,645 $322,649 Energy Savings (kWh) 354,647 126,294 142,098 Demand Savings (kW) 51 20 22 Participation (# Bulbs) 51,054 40,845 45,950

Program Operating Budget

Anticipated operating budget associated with this program is outlined in the tables provided above.

Cost Effectiveness Test Results

UCT TRC RIM Participant Home Energy Products 0.52 0.16 0.18 0.64

Exhibit JCW-16 Page 6 of 6

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Income Qualified Weatherproofing Program - Indiana

Objective: The overarching objective of the Income Qualified (IQ) Weatherproofing Program is to engage I&M’s IQ customers through impactful approaches to improve their electric energy use profiles with the ultimate goal of improving their personal affordability of electric usage. I&M’s objective is to produce long-term cost-effective electric savings in the residential sector through interactions and offerings focused on the specific needs of I&M’s IQ customer base. The specific objectives of the program are to:

1. Confirm IQ customer participation through I&M pre-approved andaccepted forms of qualification, joint with local IQ agencies providingsimilar services.

2. Partner with local IQ agencies to maximize program service delivery tojointly qualified customers.

3. Lower electrical energy consumption in the I&M IQ residential customersegment by providing direct install energy savings measures, home shelland weatherization improvements, efficient refrigerators, airconditioner/heat pump tune ups, robust rebates for non-tenant owned (i.e.multi-family commercial property owner owned) HVAC equipment andelectric water heat equipment.

4. Educate residential customers about the benefits and opportunities todecrease energy consumption.

Target Market: This program will serve electric heat income qualified residential customers who earn a household income of up to an including 200% of the Federal Poverty Level. The program will serve both single-family detached homes and multi-unit properties, existing and new construction, with IQ specific measure rebates respective to the type of improvement and electric service basis.

Program Duration: The program is part of I&M’s 2020 – 2022 Indiana DSM/EE residential sector

portfolio.

Program Description: Overall, there are several elements set forth in the program design that affords

I&M the ability to flex the type of services provided to its IQ customers based on site specific conditions and equipment types and needs. The IQ Weatherproofing Program covers the full cost of home energy audits, direct install measures, efficient refrigerators, weatherization services and maintenance of electric HVAC equipment for income qualified single family homes and multi-family apartment complexes. As part of the program, I&M may partner with local IQ-related governmental agencies to provide the respective funding for those agencies’ partner costs to

Attachment JCW-17 Page 1 of 6

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provision the same or similar services to I&M’s IQ customers that may be served only under agency partner programming and criteria. I&M will receive the commensurate data and information necessary to support and justify measure installation funding associated electric energy use savings. More specifically, the program provides for an on-site single family and multi-family dwellings energy audits and direct install of energy savings measures such as LED lighting and water saving measures for electric water heat customers. The audit provides an educational opportunity for customers about how to improve the energy efficiency of their home through a personalized home energy report provided to the customer at the completion of the on-site audit. Additionally, the program provides for, if appropriate and feasible, efficient refrigerators, and home shell and weatherization improvement measures installed via a third party weatherization contractor that is pre-screened and trained through the program or joint through a partner local agency that will perform the work instead of I&M qualified contractors. For homes with central air conditioner systems that are in need for maintenance, the program will provide for the cost of the HVAC unit to be tuned up for more efficient operation by a qualified HVAC contractor. The program has an additional element for specific program outreach and engagement for both single family and multi-family IQ complexes where full or partial rebates are provided for the more costly, energy intensive all-electric HVAC and water heat measures depending upon ownership status and up to an overall programs services cost cap per dwelling type. The respective cap amounts for total services provided by dwelling type are set at $3,000 per single family home and $2,000 per multi-family dwelling unit. Prescribed measures in the program can vary based on individual dwelling or complex need and energy use measurement baseline. Using the same measures listed below, with rebate amounts and cap levels specified in the program design, I&M can engage IQ property developers to provide rebates for new IQ single family home or multi-family unit construction as appropriate. I&M will also use the Home New Construction program design as a basis and as applicable to the new construction IQ property development for energy savings and baseline determination. I&M will select the appropriate program measures to deploy at each respective qualified customers home, premise, or property based on the on-site audit results and the feasibility to deploy the energy savings measures. As part of outreach and program enrollment activity, I&M will seek to qualify customers for program participation and services based on income eligibility up to 200% of the Federal Poverty Level either through direct qualification of income level or through reliance on other forms of documentation including: • Food stamp eligibility documentation; • WIC eligibility;

Attachment JCW-17 Page 2 of 6

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• Medicaid eligibility; • IQ agency program documentation The program will seek to confirm, verify, and provision actual IQ participant’s receipt of and benefit from I&M’s IQ program services. Certain electric service delivery installations and instances may dictate or inhibit the level in which I&M can provision full IQ program benefits to the actual IQ end-use electric account owner and/or unit resident. The IQ program design intent is to impact IQ customer/end-use electric account owner and/or the unit resident with the level of programs services that will maximize realization of program services benefits according to program qualification criteria, existing energy use baseline and profile, and program per dwelling type cap amounts. Last, the program also seeks to educate IQ customers on the benefits of energy efficiency through local workshops and educational outreach activities with local agencies and community based entities.

Incentive Strategy:

The program will provide walk through home audits to residential income qualified customers and will provide, at no-additional-cost, efficient refrigerators, air conditioner/heat pump tune ups, and weatherization improvements to their home or premise, including air sealing and installation of additional insulation as appropriate and feasible. The program will also provide direct install measures by a Home Energy Auditor trained under this program, including LED lighting and water saving measures for electric heat customers. The program also provides rebates for HVAC equipment upgrade, replacement, or new installation depending upon the dwelling type, need, and application type.

Eligible Measures:

Single Family & Multi-Family EH or

EWH Audits 9.5 Watt E Star LED (Elec Heat only)

Showerheads (Elec DHW only) Hand held Showerheads (Elec DHW

only) Kitchen Faucet Aerators (Elec DHW

only) Bath Faucet Aerators (Elec DHW only) DHW Pipe Wrap (Per foot) (Elec DHW

only) Water Heater Wrap (Elec DHW only)

Thermostat Adjustment Shower Start w/Showerhead (Elec DHW

only) Customer Education (IM Home App)

Audit/DI Total Air infiltration reduction-HP

Attachment JCW-17 Page 3 of 6

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Air infiltration reduction-EBB Duct Sealing HP

Duct Sealing EBB Ceiling Insulation R19 to R38 HP Ceiling Insulation R8 to R38 HP Ceiling Insulation R0 to R 38 HP

Ceiling Insulation R8 to R38 EBB Ceiling Insulation R19 to R38 EBB Ceiling Insulation R0 to R 38 EBB Sidewall insulation R3 - R11 HP

Sidewall insulation R3 - R11 EBB Knee wall insulation, R0 - R19 HP

Knee wall insulation, R0 - R19 EBB Thermostat (Smart/Programmable)

Efficient Refrigerators AC Tune-Up HP Tune-Up

IQ Products - SF & MF Rehab/New Construction

WiFi Only Tstat - Central Air Conditioning

WiFi Only Tstat - HP Heat Pump Upgrade to => SEER 15 /

HPF =>8.2 Heat Pump Upgrade to => SEER 16 /

HPF =>8.7 Heat Pump Upgrade to => SEER 17 /

HPF =>9.2 Heat Pump Upgrade to => SEER 18 /

HPF =>10.1 Ductless HP Replacement of HP to 17

SEER 9.5 HSPF Ductless HP Replacement of HP to 19

SEER 9.5 HSPF (or greater Ductless HP Replacement of HP to 21

SEER 10 HSPF or greater Ductless HP Replacement of HP 23

SEER 10 HSPF or greater Ductless HP Displacement of Elec Resistance to 17 SEER 9.5 HSPF Ductless HP Displacement of Elec Resistance to 19 SEER 9.5 HSPF Ductless HP Displacement of Elec Resistance to 21 SEER 10 HSPF

Attachment JCW-17 Page 4 of 6

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Ductless HP Displacement of Elec Resistance 23 SEER or greater 10

HSPF Central Air Conditioner Upgrade 15

SEER 12 EER Central Air Conditioner Upgrade 16

SEER 13 EER Central Air Conditioner Upgrade 17

SEER 13 EER PTHP Variable Speed SEER 17 11.9

HPSF Upgrade from PTAC SEER 10.5 Electric Resistance Heat

PTHP Variable Speed SEER 17 11.9 HPSF Upgrade from PTHP Baseline

SEER 10.5 HPSF 7.7 Efficient ECM fan motor-Retrofit only

HP Water Heater Energy Star EF >=2.0 Single/Multi Family 50 Gallon

Electric High Efficiency Heater EF =.93 Multi Family 30 Gallon

Implementation Strategy:

I&M will implement direct participant services using either internal Home Auditors or contract auditors, and will partner with local weatherization contractors to deliver home shell improvement services for I&M IQ program direct participants. I&M may partner with local IQ agencies that provide the same or similar services for IQ customers only qualified through those agencies. I&M will perform outreach and local education workshops internally but may partner with local IQ agencies in the delivery of the workshops. I&M will engage IQ property owners and developers direct or through agency partnership. I&M will engage local HVAC trade allies for equipment maintenance activity and/or equipment upgrades as appropriate. I&M will utilize a vendor for purchase and delivery of efficient refrigerators provided to participants through this program.

Marketing Strategy: I&M will focus outreach to income qualified all-electric, or electric heat customers

in the I&M Indiana service territory. I&M will work with local community government agencies and seek other available data to identify qualified customers. Outreach will be performed to enroll qualified customers in this program.

Attachment JCW-17 Page 5 of 6

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I&M may provide HVAC equipment services such as AC tuneups or replacement as justified, for some gas heat IQ customers as identified and as appropriate but the program will not target gas heat customers with full program services.

Estimated Participation and Impacts

Expected participation and associated estimated impacts for the program are provided in the table below.

Income Qualified Weatherproofing

Per KWH Rate 2020 2021 2022

Fixed Program Operating Costs I&M Marketing, Rebate Processing, Other Impl. $199,443 $196,444 $200,844

I&M Auditor $87,178 $87,178 $87,178 Program Coordination & Outreach $63,600 $63,600 $63,600 EM&V $70,000 $70,000 $70,000 Total Fixed $420,221 $417,222 $421,622

Variable Program Operating Costs Customer Incentives $0.27 315,473 268,103 268,103 Delivery & Other $0.06 $97,409 $47,040 $47,040

Total Budget $0.74 $833,103 $732,365 $736,765 Energy Savings (kWh) 1,105,931 1,011,963 1,010,633 Demand Savings (kW) 144 145 143

Participation 767 704 704

Program Operating Budget

Anticipated operating budget associated with this program is outlined in the tables provided above.

Cost Effectiveness Test Results

UCT TRC RIM Participant Income Qualified Weatherproofing 0.56 0.56 0.19 NA

Attachment JCW-17 Page 6 of 6

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Home Appliance Recycling Program - Indiana

Objective: The objective for the Home Appliance Recycling Program is to provide residential customers with a no-additional-cost means to eliminate or remove from their usage profile older and less efficient refrigerators or freezers. This program targets residential customers with second refrigerators or freezers, preferably those older than 1993 and is designed to remove these inefficient older appliances off the market entirely in an environmentally-sustainable manner.

Target Market: This program targets residential households with second refrigerators or freezers. The program will provide no cost refrigerator and/or freezer pick up.

Program Duration: The program will offered through I&M’s 2020 – 2022 Indiana DSM/EE

residential sector portfolio and will be offered during 2020 and 2021 but is projected to be discontinued for 2022.

Program Description:

The recycling program improves the in-service technology mix for the service territory by removing older, less efficient energy consuming appliances and removing them from existence in an environmentally friendly manner. Appliance recycling is available primarily through one national program vendor who brings the necessary environmentally sound technologies and procedures to the program.

Incentive Strategy: The program will provide participants with a no cost pick up and recycling of

their working second refrigerator or freezer. No cash incentives will be offered for 2020 and 2021 program implementation.

Eligible Measures: Eligible measures for this program include secondary inefficient working

refrigerators and freezers.

Implementation Strategy: I&M will implement this program through the use of an implementation

partner to interface with customers to provide no additional cost pick up and environmentally friendly recycling of refrigerators and freezers.

Attachment JCW-18 Page 1 of 3

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Marketing Strategy:

I&M and its implementation partner will perform marketing and outreach for this program via I&M’s website, email, direct mail, bill stuffers, umbrella marketing, and community event outreach efforts. This program will need to be continually promoted during its implementation period defined above.

Evaluation, Measurement & Verification:

An independent third party program evaluation contractor will perform process and impact evaluations to ensure that the program is effectively implemented, that the program is achieving the expected savings, and to offer suggestions for improving the effectiveness of the program, if warranted. The process evaluation is expected to include a review of program objectives, implementation processes, data collection procedures, quality assurance methodologies, reporting timelines, and tracking of costs. The process evaluation is also expected to determine the primary drivers of customer satisfaction and customer engagement. The methods used for evaluating these customer satisfaction and engagement will likely be based on questionnaires delivered via telephone, mail or online surveys. The impact evaluation is expected to determine the actual, verified energy reductions achieved by the program, and provide cost/benefit analyses of the program both on historical and prospective bases. The chosen implementation vendor is expected to capture participant information, perform energy reduction calculations, and provide detailed information, as specified to meet evaluation needs, back to I&M and I&M’s independent third party evaluator. The evaluator is expected to work closely with I&M and its implementation partner to ensure proper data collection, energy reduction calculation methodology, and reporting of program results.

Attachment JCW-18 Page 2 of 3

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Estimated Participation and Impacts

Expected participation and associated estimated impacts for the program are provided in the table below.

Home Appliance Recycling

Per KWH Rate 2020 2021 2022

Fixed Program Operating Costs Vendor Fixed $0 $0 $0

Rebate Processing & Other Annual Cost $16,163 $16,163 $0

Program Coordination $26,250 $26,250 $0 EM&V $35,000 $35,000 $0 Total Fixed $77,413 $77,413 $0

Variable Program Operating Costs Customer Incentives $0.045 $0 $0 $0 Delivery & Other $0.148 $250,200 $250,200 $0

Total Budget $0.18 $327,613 $327,613 $0 Energy Savings (kWh) 1,868,904 1,829,558 0 Demand Savings (kW) 223 223 0

Participation (Total Units) 2,085 2,085 0

Program Operating Budget

Anticipated operating budget associated with this program is outlined in the tables provided above.

Cost Effectiveness Test Results

UCT TRC RIM Participant Home Appliance Recycling 0.60 0.48 0.17 8.18

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Home New Construction Program - Indiana

Objective: The overall Home New Construction program objective is to produce long-term cost-effective electric savings in the residential market sector for new all-electric homes built within the I&M service territory through builder focused cash rebates for home shell improvements and rebates for efficient HVAC and water heat measures. The program is designed to promote additional savings beyond typical home shell improvements that are not included, or promoted, through builder standard offer HVAC and water heat measure packages. The specific objectives of the Home New Construction Program are to:

1. Realize the construction of more efficient homes than current buildingcode in the I&M service territory residential market sector and toattribute electric energy savings to those new homes participating inthe program.

2. Educate builders on building energy efficiency best practices.3. Educate builders on opportunities to differentiate themselves by

incorporating energy efficiency into their marketing strategy, making ita competitive issue to help move the new home construction market.

4. Encourage builders to install efficiency HVAC and water heattechnologies as part of the standard home offering through cashrebates incremental to home shell performance rebates;

5. Encourage equipment vendors and contractors to actively marketelectric energy efficient technologies, including HVAC and water heattechnologies, to home builders.

6. Through market-based activities, affect a long-term improvement in themarket for energy efficient homes.

Target Market: Residential home builders who design and construct residential energy efficient single family homes, duplexes, and end-units of single story multi-residential properties located in I&M’s Indiana service territory. The program will specifically target home shell improvements and HVAC and water heat system improvements for new construction.

Program Duration: The Home New Construction program will be a program in I&M’s Indiana

2020 - 2022 DSM/EE residential sector portfolio.

Program Description: The Home New Construction program will produce long-term electric energy

savings by encouraging the construction of single family homes, duplexes, and end-units of multi-residential properties that individually meet one of two performance levels defined by a Home Energy Rating Score (HERS) index

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score. The program will identify and recruit targeted builders who do not consistently (or seldom) build homes to exceed baseline building codes for energy efficiency. Builders who choose to participate in the program will gain access to cash-back incentives that range from 20 to 63 percent of the cost to upgrade and certify each home, based on the intended primary heating source for the home (type of electric heat). Given the stringent requirements and extensive training required for builders and contractors to meet the HERS index levels, market resistance is expected based on how receptive builders are to the increased costs of constructing more efficient homes. To help address this challenge, I&M will utilize a tiered HERS index level approach with I&M Silver and I&M Gold levels, while implementing a comprehensive training program aimed at educating builders and contractors on advanced home design and construction practices to encourage the new home construction market to improve energy efficiency beyond current building codes in Indiana. Savings are achieved by training home builders on building practices designed to achieve the two HERS tiers along with strategies for incorporating the Silver and Gold approach and energy efficiency message into their marketing efforts. One lower efficiency tier (i.e. more efficient) incentives is provided as stepping stones in the process of moving builders to higher efficiency tiers with higher incentives to achieve improved efficiency ratings. Builders will receive cash-back rebates structured to cover a portion of the incremental cost of building homes to meet the various efficiency tiers. Additional savings can be achieved through offering specific and additional rebates for efficient HVAC and water heat measures that are not typically installed for standard new home designs and offerings. I&M staff will promote these additional program rebates to builders using program channels and rebate payment processes.

Incentive Strategy:

The Residential New Construction Program will provide incentives to residential all-electric home builders who design residential energy efficient homes based on the HERs rating of the home at two different incentive levels that increase with lower HERs scores. The program will also offer additional rebates for all electric homes that have efficient HVAC and/or efficient electric water heat measures installed.

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Eligible Measures:

New construction residential all-electric single family, duplexes, and end-units of multi-residential homes with requisite HERS ratings achieved. Efficient levels of electric HVAC measures and efficient electric water heat measures.

Home New Construction Eligible Measure List WiFi Only Thermostat - Ground Source HP

WiFi Only Thermostat - HP HVAC-Air Source Heat Pump Upgrade SEER 17 from SEER 13 Air Source

HP HVAC-Ground Source Heat Pump Closed Loop SEER 23 Upgrade from

SEER 13 Air Source HP Silver Star HERS 75 - All Electric Gold Star HERS 67- All Electric

Heat Pump Water Heater Upgrade from Resistance WH EF 90

Implementation Strategy:

I&M may implement this program using in-house staff or may utilize an implementation vendor to implement this program who will be expected to educate and promote the program to residential home builders in the I&M service territory to construct new homes to the HERS ratings levels that I&M provides incentives for and the additional other measure rebates available through the program.

Marketing Strategy: The target market for the program is home builders who build in the I&M

Indiana electric service territories. I&M will promote the program through the following marketing channels:

1. Direct mail campaign and trade ally rollout meetings

2. Direct contact with Home Builders

3. Home builder advisory group meetings

4. Web-based marketing via email and the Indiana Michigan Power Company website

5. Direct marketing to trade allies and builders

6. Direct contact with new home construction market Trade Allies.

In addition to general marketing I&M anticipates working with trade ally groups and home builder associations to promote the program.

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Evaluation, Measurement & Verification:

An independent third party program evaluation contractor will perform process and impact evaluations to ensure that the program is effectively implemented, that the program is achieving the expected savings, and to offer suggestions for improving the effectiveness of the program, if warranted. The process evaluation is expected to include a review of program objectives, implementation processes, data-collection procedures, quality assurance methodologies, reporting timelines, and tracking of costs. The process evaluation is also expected to determine the primary drivers of customer satisfaction and customer engagement. The methods used for evaluating these customer satisfaction and engagement will likely be based on questionnaires delivered via telephone, mail or online surveys. The impact evaluation is expected to determine the actual energy reductions achieved by the program, and provide cost/benefit analyses of the program both on historical and prospective bases. The chosen implementation vendor is expected to capture participant information, perform energy reduction calculations, and provide detailed information, as specified to meet evaluation needs, back to I&M and I&M’s independent third party evaluator. The evaluator is expected to work closely with the implementation vendor to ensure proper data collection, energy reduction calculation methodology, and reporting.

Estimated Participation and Impacts

Expected participation and associated estimated impacts for the program are provided in the table below.

Program Operating Budget

Forecast participation, operating budgets and forecast energy and demand impacts associated with this program are outlined in the table provided below. .

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Home New Construction

Per KWH Rate 2020 2021 2022

Fixed Program Operating Costs Vendor Fixed 0 0 0

Rebate Processing & Other Annual Cost $2,192 $2,192 $2,192 Program Coordination $33,498 $33,498 $33,498 EM&V $15,000 $15,000 $15,000 Total Fixed $50,690 $50,690 $50,690

Variable Program Operating Costs Customer Incentives $0.17 $91,350 $91,350 $91,350 Delivery & Other $0.41 $98,195 $98,195 $98,195

Total Budget $0.45 $240,235 $240,235 $240,235 Energy Savings (kWh) 528,046 528,046 528,046 Demand Savings (kW) 419 419 419

Participation (# of Homes) 190 190 190

Cost Effectiveness Test Results

UCT TRC RIM Participant Home New Construction 1.62 1.01 0.37 2.5

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Home Energy Engagement - Indiana

Objective: The Home Energy Engagement (HEE) Program is designed to provide I&M Indiana residential customers with self-action measures, energy information tools, tips, and advice, and timely and frequent data and information regarding their electric usage to produce material energy savings for I&M and its customers. The program includes a number of residential sector behavior change elements designed to engage I&M’s residential customers with the data and information necessary to manage their usage via online and electronic means and to trigger changes in energy conservation behavior.

Specific HEE Program objectives include: 1. Produce cost effective energy and demand savings in the residential

consumer sector by engaging customers through a commononline/electronic customer engagement channel.

2. Engage and encourage residential customers to change their energyusage patterns and implement energy efficiency recommendationstailored to their home through the use of AMR data and AMI data andinformation as it becomes available in the Indiana service territory.

3. Raise customer awareness of energy efficiency improvements andrebates available through I&M programs by offering no-additional-costefficient measures through an online marketplace as enticements tofurther action.

Target Market: HEE targets all of I&M’s Indiana residential customers based on their home profile and online connectivity and data preferences. The program will transition to full AMI meter data functionality enhancements as I&M transitions to AMI meters for all residential customers.

Program Duration: The Residential Home Energy Engagement program will be a program in

I&M’s Indiana 2020 - 2022 DSM/EE residential sector portfolio.

Program Description: The HEE Program is a combination of electronic-only Home Energy Reports,

an online and customized usage information and usage data portal, and the Home Online Energy Checkup Program. The HEE program will provide the more-timely and detailed AMR/AMI usage data joint with personalized information that will educate, encourage, and entice residential customers to implement energy efficient measures and improvements relevant to their home. Using more granular and more-current AMI usage data, customers will be able to track their actual usage over time, complete customized online energy audits through more granular usage disaggregation, set goals, compare their energy usage and energy saving actions with homes of similar characteristics,

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and receive timely alerts and notifications on their specific energy use. The program will provide personalized information that equips the residential customer with the knowledge necessary to implement energy efficient measures and/or improvements relevant to their home. Self-install measures are provided at no-additional-cost through an online marketplace as an option for those customers completing the online assessment of their home. No-additional-cost measures will include energy efficient water measures for homes with electric water heaters. Online audit reports generated by customers, or electronic reports and alerts sent to select customers will also provide other I&M energy efficiency program cross promotion to help further engage customers in support of their energy consumption reduction behavior.

Incentive Strategy:

The Home Energy Engagement program will be offered to customers as a no- additional-cost service.

Eligible Measures:

Email Only Home Energy Reports (eHERs); energy use portal information and data; and LED bulbs, LED nightlights, and energy efficient water measures for homes with electric water heaters.

Implementation Strategy:

I&M will implement this program through the use of vendors to provide for the web-facing AMR/AMI usage data customer portal and online audit tool, email only Home Energy Reports, and for efficient measures available to online audit participants. The HEE program incorporates the online energy audit tool into the customer portal that already exists in the Home Energy Reports program. The combined HEE program will allow I&M to evolve energy savings and customer engagement from paper reports and to email only and reliance on an online common platform. Online and automated tools such as budget management notification and high usage alerts further expand the options for residential customer base to expand their engagement with I&M. For the email only Home Energy Reports component, I&M will select the participant group from a geographic area within its service territory that includes a targeted number of high use customers (approximately 90,000) that have email addresses on file with I&M. Within the selected customer population, customers will be divided into the participant group and a randomly selected control group which will not receive reports or alerts, or have any special access to their energy usage data. For customers within the population that are not selected for either the participant group or the control group, I&M reserves the right to allow those customers to opt-in to the program. The participant group will be emailed reports and online alerts with information such as:

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• Comparison of current and historical electric usage levels to that of

similar homes or groups of homes • Energy saving tips • Updates on progress toward any individual goals that were set • Information related to other I&M Indiana energy efficiency and demand

response program offerings • Instructions for accessing their energy usage data online • Usage Change Alerts

For AMI data and budget management tools behavior savings determination, the usage of those that regularly engage with the AMI data portal and associated tools will be compared with those that don’t regularly use the data and tools. A similar analysis (treatment and control, and accounting for savings overlap from other program participation) described above for eHER savings will be used to determine the actual behavior energy savings resulting from the availability of AMI data and its associated more granular functionality and tools.

Marketing Strategy:

I&M will work with a Home Energy Engagement partner to develop a marketing and communications plan to successfully implement the program. Due to the program targeting all I&M residential customers for online web activity and a subset of I&M’s customers for the selected activity, marketing activities will be geared towards initial customer engagement of targeted participants, reengagement of these same individuals, thereafter, and web engagement of all other residential customers. I&M’s marketing involvement will seek to further engage customers through cross program promotion via the home energy reports. Since the solution includes a vendor-developed online energy report and paper report mailer, initial program awareness should result from these efforts. I&M will provide guidance on branding and other marketing-related attributes. In addition to paper mailers, an important communication channel for this target audience will be the web (AEP customer websites, e-mails, and usage change alerts) due to the ability to generate immediate action by offering a direct link to the Home Energy Engagement website and customer portal.

Evaluation, Measurement & Verification:

An independent third party program evaluation contractor will perform process and impact evaluations to ensure that the program is effectively implemented, that the program is achieving the expected savings, and to offer suggestions for improving the effectiveness of the program, if warranted. The process evaluation is expected to include a review of program objectives, implementation processes, data collection procedures, quality assurance

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methodologies, reporting timelines, and tracking of costs. The process evaluation is also expected to determine the primary drivers of customer satisfaction and customer engagement. The methods used for evaluating these customer satisfaction and engagement will likely be based on questionnaires delivered via telephone, mail or online surveys. The impact evaluation is expected to determine the actual, verified energy and demand reductions achieved by the program, and provide cost/benefit analyses of the program both on historical and prospective bases. The chosen implementation vendor is expected to capture participant information, perform energy reduction calculations, and provide detailed information, as specified to meet evaluation needs, back to I&M and I&M’s independent third party evaluator. The evaluator is expected to work closely with I&M and its implementation partner to ensure proper data collection, energy reduction calculation methodology, and reporting.

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Estimated Participation, Program Operating Budget & Energy Savings Target

Forecast program participation, operating budgets and forecast energy and demand impacts are outlined in the table below.

Home Energy Engagement

Per Unit Rate 2020 2021 2022

Fixed Program Operating Costs

Vendor Fixed $221,783 $215,776 $215,317 Implementation & Other Annual Cost $20,000 $20,000 $20,000

Program Coordination $75,000 $75,000 $75,000

EM&V $80,000 $80,000 $80,000

Total Fixed $396,783 $390,776 $390,317

Variable Program Operating Costs

Customer Incentives $0.000 $0 $0 $0 Kits Cost &

Marketplace $0.009 $59,150 $59,331 $57,098

Total Budget $0.07 $455,934 $450,106 $447,415

Energy Savings (kWh) 6,232,545 6,237,959 6,613,545

Demand Savings (kW) 682 686 730

Participants 90,860 92,475 100,444

Cost Effectiveness Test Results

UCT TRC RIM Participant Home Energy Engagement 0.54 0.54 0.16 0.00

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Work Custom Rebate Program - Indiana

Objective:

The Work Custom Program will target non-prescriptive (i.e. variable, less predictable) efficiency measure projects in I&M’s Indiana service territory Commercial & Industrial (C&I) sector. Some commercial and institutional customers offer special and productive opportunities for energy savings, either brought to I&M by the customer (or the customer’s Energy Services Company, or ESCO), or as identified by company account representatives and engineers. By providing up to and approximately a fifty percent “buy down,” or rebate, of the incremental cost to upgrade to more efficient electric energy consuming measures, customers will be more likely to move forward with upgrading to more efficient products.

Target Market:

The program will be available to C&I, institutional, for-profit, and non-profit and public agencies (such as schools) in the I&M Indiana service territory will be eligible.

Program Duration: The program is proposed in I&M’s Indiana DSM/EE 2020 - 2022 C&I sector

portfolio.

Program Description:

The program targets only commercial, industrial and institutional accounts and is a custom program designed to develop exceptionally productive energy savings opportunities in cooperation with the customer. Each project will be specially designed. It is expected that projects will need to be carried out in narrow time windows as dictated by conditions specific to the customer’s operations and that evaluation will consist primarily of short term instrumentation and spot metering. The hurdle rate for projects under this program will be set to ensure cost-effective projects are selected.

This program will also have a component to support targeting commercial and institutional customers with a usage profile that indicates a possible high value from retro-commissioning. Although direct requests may also be received, typically the program begins off-site with a scan of billing records using EZ Sim or a similar tool. This screening process will select a pool of buildings for which it looks like retro-commissioning is highly likely to produce substantial energy savings. Building commissioning is a process that is associated with new buildings; a quality assurance process that is followed to facilitate new buildings performing as designed. Retro-commissioning applies a similar process to existing buildings. The goal is insure that a building operates efficiently and effectively. The focus of this program is in insuring efficient operation, rather than on upgrading equipment. The program conducts a low-cost “tuning” of electricity related building systems. The tuning typically involves control systems such as energy management systems that may be

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improperly programmed, or controls that are out of calibration. When problems are identified and demonstrated, they may have major economic effects. When this type of problem exists, retro-commissioning resolves such problems at low cost.

Incentive Strategy:

Customer incentive levels are set at approximately fifty percent of the incremental measure cost over standard baseline technology measures. Periodic, short term promotions may be used to help spur projects along during a program year, but promotional incentive levels are expected to be 10-20% higher than the original incentive level. Higher levels on incentives may be offered on a per-measure basis for new technology measures that offer promising energy savings characteristics in order to help move markets toward those measures and raise awareness of their associated benefits. Rebate payout levels are subject to ongoing review for cost effectiveness, payback, and market conditions for any of the measures or technologies promoted as part of this program.

Eligible Measures:

Eligible measures for this program include custom C&I efficiency projects that can include efficient lighting, lighting controls and systems, process improvements, and building retro commissioning, as examples. Some LED lighting measures may be included in this program due to their evolving cost profile and market conditions for this technology. Project proposals for these measures will be individually assessed for incentive payment according to current market costs for both the efficient technology and its direct baseline, less efficient option as available in the market. Conditions may warrant rebate updates for these measures or removal from I&M’s portfolio altogether. I&M reserves the right to change program measures list at any time, subject to appropriate customer and Trade Ally notification.

Implementation Strategy:

I&M will implement this program by partnering with an implementation vendor that can provide back office and engineering support as a core expertise for a broad range of technologies.

Marketing Strategy:

I&M and its implementation vendor will perform marketing and outreach for this program via its website, direct mail, bill stuffers, umbrella marketing, and community event outreach efforts. This program will need to be continually advertised during its operations.

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Evaluation, Measurement & Verification:

An independent third party program evaluation contractor will perform process and impact evaluations to ensure that the program is effectively implemented, that the program is achieving the expected savings, and to offer suggestions for improving the effectiveness of the program, if warranted. The process evaluation is expected to include a review of program objectives, implementation processes, data collection procedures, quality assurance methodologies, reporting timelines, and tracking of costs. The process evaluation is also expected to determine the primary drivers of customer satisfaction and customer engagement. The methods used for evaluating these customer satisfaction and engagement will likely be based on questionnaires delivered via telephone, mail or online surveys. The impact evaluation is expected to determine the actual, verified energy reductions achieved by the program, and provide cost/benefit analyses of the program both on historical and prospective bases. The chosen implementation vendor is expected to capture participant information, perform energy reduction calculations, and provide detailed information, as specified to meet evaluation needs, back to I&M and I&M’s independent third party evaluator. The evaluator is expected to work closely with the implementation vendor to ensure proper data collection, energy reduction calculation methodology, and reporting.

Estimated Participation and Impacts

Work Custom Rebates

Per KWH Rate 2020 2021 2022

Fixed Program Operating Costs Vendor Support $554,250 $554,250 $554,250

Implementation & Other Annual Cost $21,083 $21,083 $21,083 Outreach &

Coordination $228,000 $228,000 $204,000 EM&V $100,000 $100,000 $100,000 Rebate Processing $904 $786 $621 Total Fixed $904,237 $904,119 $879,953

Variable Program Operating Costs

Customer Incentives $0.045 $1,038,997 $953,033 $793,127 Delivery & Other $0.0035 $80,878 $69,984 $57,738

Total Budget $0.09 $2,024,112 $1,927,136 $1,730,818 Energy Savings (kWh) 23,107,939 19,995,539 16,496,499

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Demand Savings (kW) 3,067 2,792 2,203 Participation 153 133 105

Program Operating Budget

Anticipated operating budget for each program component associated with this program is outlined in the tables provided above.

Overall Program Cost Effectiveness Test Results

UCT TRC RIM Participant

Work Custom Rebates 2.91 1.36 0.38 3.36

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Work Prescriptive Rebates Program - Indiana

Objective: The objective of the Work Prescriptive Program is to encourage and promote energy efficient measurement installation and use by I&M’s program eligible commercial and industrial customers. The program will provide a streamlined and efficient process for customers (or their Trade Ally) to receive rebates for measures authorized in the program. The program promotes customer uptake and installation of energy efficient measures by providing rebates that address the higher cost to acquire the more efficient measures and encourages customers to manage their cost of electric energy through the use of energy efficient measures.

Target Market:

This program will be available to Commercial & Industrial (C&I), institutional, for-profit, non-profit, and public entities (such as schools) in I&M’s Indiana service territory.

Program Duration: The Work Prescriptive Program will be a program in I&M’s Indiana 2020 - 2022

DSM/EE C&I sector portfolio.

Program Description:

Customers can apply for rebates online, through mail, email, or fax. Customers can also designate a trade alley that can apply for the rebate for the customer pending all application requirements are met.

Applications are submitted after project completion, subject to program requirements.

Applications are reviewed by I&M or its contracted program vendor for correctness, accuracy, the appropriateness of rebates claimed, and are subject to the stated requirements of the program for budget availability, program eligibility and measure definition.

Program requirements include thresholds for advance approval of large projects (i.e. projects with a rebate cost of greater than $5,000 so that I&M can confirm budget availability.

Incentive Strategy: The rebates provided in this program will offset a portion of the cost barriers

inhibiting customer decisions to upgrade to more efficient measures. The prescriptive rebates in this program are pre-determined cash reimbursements for typical energy efficiency measures undertaken by commercial and industrial end use customers. Measures rebated under this program are tangible, have well defined and predictable operational characteristics, and have reasonably stable cost profiles that afford

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streamlined and efficient processing of rebate applications for both the customer (or their designated Trade Ally) and I&M. Prescriptive rebates in this program are designed with the intent to provide a partial offset of the customer’s incremental measure cost for the specific measure(s) installed. While variations across measure categories will exist, rebates are generally designed to offset up to 50% of incremental measure cost. The program will provide participants with an incentive through an application process where applications reflect the list of approved measures incented through the program.

Eligible Measures:

Categories of eligible measures for this program include: Anti-Sweat Heater Controls Auto Door Closers Building Energy Information/Automation Commercial ECM Motors Commercial Geothermal Equipment Efficient Air Conditioners Efficient Heat Pumps Efficient LED Lighting Efficient LED Street Lighting ENERGY STAR Cooking/Holding Equipment ENERGY STAR Refrigerators and Freezers Evaporator Fans Floating Head Pressure Controls LED Exit Signs LED Traffic Lights Occupancy Sensors Refrigeration Case Door Retrofits Refrigeration Lighting Single Application Variable Speed Drives (VFDs) Some LED lighting measures may be included in this program but due to their evolving cost profile and market conditions for this technology, I&M and its program implementation vendor will conduct periodic reviews to update measure characteristics. Conditions may warrant rebate updates for these measures, or moving them from this program into the Custom program for rebate eligibility and determination, or removal from I&M’s portfolio altogether. I&M reserves the right to change program measures list at any time, subject to appropriate customer and Trade Ally notification. Measures will be individually assessed for incentive payment according to current market costs for both the efficient technology and its direct baseline, less efficient option as available in the market.

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Implementation Strategy:

I&M will implement this program internally and through partnering with an implementation vendor who will provide back office support and engineering expertise. I&M will interface, market, and support trade allies and C&I customers participating in this program.

Marketing Strategy:

I&M and its implementation vendor will perform marketing and outreach for this program via I&M staff, I&M’s website, direct mail, bill stuffers, umbrella marketing, and community event outreach efforts. This program will be continually promoted and supported during its operation throughout the program year. Promotion and support will be provided by either I&M, its implementation vendor, or both parties through on-site customer and Trade Ally engagement or via other channels described above.

Evaluation, Measurement & Verification:

An independent third party program evaluation contractor will perform process and impact evaluations to ensure that the program is effectively implemented, that the program is achieving the expected savings, and to offer suggestions for improving the effectiveness of the program, if warranted. The process evaluation is expected to include a review of program objectives, implementation processes, data collection procedures, quality assurance methodologies, reporting timelines, and tracking of costs. The process evaluation is also expected to determine the primary drivers of customer satisfaction and customer engagement. The methods used for evaluating these customer satisfaction and engagement will likely be based on questionnaires delivered via telephone, mail or online surveys. The impact evaluation is expected to determine the actual energy reductions achieved by the program, and provide cost/benefit analyses of the program both on historical and prospective bases. The chosen implementation vendor is expected to capture participant information, perform energy reduction calculations, and provide detailed information, as specified to meet evaluation needs, back to I&M and I&M’s independent third party evaluator. The evaluator is expected to work closely with I&M and its implementation vendor to ensure proper data collection, energy reduction calculation methodology, and reporting.

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Estimated Participation and Impacts

Expected participation and associated estimated impacts for the program are provided in the table below.

Work Prescriptive Rebates

Per KWH Rate 2020 2021 2022

Fixed Program Operating Costs Vendor Support $184,875 $139,875 $139,875

Implementation & Other Annual Cost $40,645 $40,645 $40,645 Outreach &

Coordination $342,000 $342,000 $273,000 EM&V $97,547 $97,547 $97,547 Rebate Processing $3,532 $2,877 $2,877 Total Fixed $668,599 $622,944 $553,944

Variable Program Operating Costs

Customer Incentives $0.05 $581,874 $552,772 $552,772 Delivery & Other $0.0018 $22,580 $19,038 $19,038

Total Budget $0.10 $1,273,054 $1,194,754 $1,125,754 Energy Savings (kWh) 12,750,000 10,750,000 10,750,000 Demand Savings (kW) 1,829 1,567 1,567

Participation 394 321 321

Program Operating Budget

The anticipated operating budget associated with this program is outlined in the table above.

Cost Effectiveness Test Results

UCT TRC RIM Participant Work Prescriptive Rebates 3.39 1.04 0.39 1.82

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Public Efficient Streetlighting Program - Indiana

Objective: The Public Efficient Streetlighting (PES) Program encourages energy efficiency by offering municipalities, counties, and other governmental subdivisions a cost effective option to upgrade I&M owned streetlighting to more efficient LED streetlighting. Participating governmental entities pay for streetlighting service through I&M’s Streetlighting Service Tariff (Tariff S.L.S.) and Energy Conservation Lighting Service Tariff (Tariff E.C.L.S.).Streetlighting service through these tariffs consists of installation,ownership, and maintenance of I&M streetlighting assets (poles, wires,streetlight fixtures), and the provision of electricity service for the fixtures.

The objectives of the PES Program are to: • Encourage current customers to convert to more efficient LED

streetlighting.• Lower electrical energy consumption for public streetlighting

Target Market: I&M Indiana municipalities, counties, and other governmental subdivisions enrolled in streetlighting service through I&M’s Streetlighting Service Tariff (Tariff S.L.S.) and Energy Conservation Lighting Service Tariff (Tariff E.C.L.S.).

Program Duration: The PES Program is proposed in I&M’s 2020 - 2022 DSM/EE portfolio.

Program Description: The Public Efficient Streetlighting (PES) Program encourages energy

efficiency by offering municipalities, counties, and other governmental subdivisions a cost effective option to upgrade I&M owned streetlighting to more efficient LED streetlighting. Customers participating in the PES Program will agree to transition to a new LED ECLS Tariff category of streetlight. To further encourage the conversion to the more efficient technology, customers will continue to pay existing tariff rates for streetlighting service until such time as those rates are addressed in subsequent base rate filing with the IURC.

PES will: • Comparably buy down the incremental cost of the more efficient LED

streetlight fixture with a rebate paid by the PES Program;• Use the cost difference between a LED streetlight fixture and a

comparable high pressure sodium fixture as the incrementalmeasure cost of the more efficient lighting option; and

• Provide a rebate to offset this incremental cost in order to encourageand entice participating customers to convert to the LEDstreetlighting.

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Incentive Strategy:

The incentive strategy for the PES Program is to apply the difference between the cost of and LED streetlight and a baseline high pressure sodium equivalent streetlight. PES rebates are calculated based on this cost differential and will offset I&M’s capital cost of conversion (material and labor) of the LED streetlight fixture to the high pressure sodium streetlight fixture. As LED streetlight conversions occur, where LED streetlights are placed in-service, I&M will use the rebate from the PES program to offset the capital cost of conversion booked in I&M electric plant in-service streetlight accounts.

Eligible Measures:

Eligible measures for this program include the LED streetlight fixtures and connections to the existing streetlighting electricity source.

Implementation Strategy:

I&M has designed the PES Program on a three year conversion schedule for all existing I&M owned streetlights for flexibility to adequately serve all interested entities. I&M will engage with ECLS participating municipalities and governmental entities to inform them of the PES program, how it is structured, and the need to reach agreement on the number of streetlights converted. I&M will agree upon the conversion schedule, streetlight account update process, and other program requirements with each entity prior to the conversion work commencing. Each individual entity will need to provide written consent and/or other tariff required terms in advance of I&M undertaking the conversion process dictated by the PES program. The preference is to convert all I&M owned streetlights during the proposed three year period, however, I&M will work with participating entities based on need to allow for each entities’ necessary budget planning/constraints. The design of the PES program is premised upon a one for one change out of existing streetlight fixtures where LED streetlight fixtures will be matched in terms of lumen output to the existing fixture lumen output at existing streetlight pole locations, electricity sources, and existing mounting configurations. Any requested deviations by participating governmental entities from a one-for-one change out will be subject to the terms set forth in Tariff ECLS relative to the nature of the requests and the costs associated that are determined to be beyond the rebate payment paid for by the PES program.

Marketing Strategy:

I&M will perform marketing and outreach for this program using internal company resources.

Attachment JCW-23 Page 2 of 4

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Evaluation, Measurement & Verification:

An independent third party program evaluation contractor will perform a impact evaluation to ensure that the program is effectively implemented, that the program is achieving the expected savings The impact evaluation is expected to determine the actual, verified energy reductions achieved by the program, and provide cost/benefit analyses of the program both on historical and prospective basis. I&M will capture participant information, perform energy reduction calculations, and provide detailed information, as specified to meet evaluation needs, to the independent third party evaluator. The evaluator is expected to work closely with I&M and its implementation partner to ensure proper data collection, energy reduction calculation methodology, and reporting.

Estimated Participation and Impacts

Expected participation and associated estimated impacts for the program are provided in the table below.

Public Efficient Streetlighting

Per KWH Rate 2020 2021 2022

Fixed Program Operating Costs Vendor Fixed $0 $0 $

Impl & Other Annual $10,000 $10,000 $10,00 Program Coordination $48,000 $48,000 $48,00 EM&V $29,270 $29,270 $29,27

Total Fixed $87,270 $87,270 $87,27

Variable Program Operating Costs

Customer Incentives $0.59 $1,463,487 $1,463,487 $1,463,48 Delivery & Other $0.00 $0 $0 $

Total Budget $0.62 $1,550,757 $1,550,757 $1,550,75 Energy Savings (kWh) 2,484,355 2,484,355 2,484,35 Demand Savings (kW) 0 0

Participants (# Streetlights) 10,211 10,211 10,21

Program Operating Budget

Anticipated operating budget associated with this program is outlined in the tables provided above.

Attachment JCW-23 Page 3 of 4

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Cost Effectiveness Test Results

UCT TRC RIM Participant Public Efficient Streetlighting 0.67 0.76 0.63 1.2

Attachment JCW-23 Page 4 of 4

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Home Energy Management Program - Indiana

Objective: The overall objective of the Home Energy Management Program (HEM) is to provide Indiana and Michigan Power Company’s (I&M, or Company) residential Indiana customers a means to participate in peak period usage reduction through, initially, WiFi connected, or smart, thermostat control of the timing for HVAC system operation and run time. I&M may introduce other residential home appliance control options for customer participation through the HEM Program as connected, smart technologies evolve and become reasonable for inclusion into the program.

Specific objectives for the HEM Program include: Lower both peak demand and electric consumption in the residential

market sector through use and reliance on Company load managementalgorithms;

Encourage customer use of WiFi connected, or smart, thermostattechnology for the purposes of program participation by providingrebates for new program compliant thermostat purchases bycustomers;

Manage customer comfort level preferences during peak times oremergency load management events;

Educate residential customers regarding opportunities to manageand/or decrease their overall energy usage while still achieving comfortin the home;

Encourage customer and program use of other connected, or smart,technology for the purposes of demand response/home energymanagement objectives by providing rebates for new programcompliant devices purchases by customers;

Target Market: The initial target market of I&M Indiana residential customers for the HEM Program are customers with existing central air conditioning and/or heat pump equipment and continuous Wifi and continuous internet capability for Company control access during the peak period season (May through September annually). Participants must be either existing owner-occupied single-family or multi-family homeowners who purchase retail electricity from I&M on a residential tariff. For non-owner occupied residences, I&M will require written permission from the owner. I&M may expand the target market throughout program duration to include other smart home, or connected, devices that afford demand usage management and peak period use reduction capability.

Attachment JCW-24 Page 1 of 5

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Program Duration:

The HEM Program will be offered as part of I&M’s Indiana 2020 - 2022 DSM/EE program portfolio.

Program Description:

The HEM program is designed to achieve peak demand reduction during either I&M system peak demand hours or PJM system peak demand hours. HEM will also provide emergency load reduction capability for I&M during times of PJM emergency conditions as called by PJM. While HEM provides the foundational basis for residential peak load management that can be applied to any compliant connected and controlled home appliance or energy use device, the program initially relies on remote set-point management of WiFi connected, or smart, thermostats that offer two-way communication and control capability. Through the use of I&M’s implementation vendor’s home energy management platform and algorithms, the HEM program is currently able to actively manage the timing and operation of home cooling loads. Increased precision through higher usage data granularity allows for higher demand to be achieved, on a per home basis, during peak times or emergency events. The HEM program affords two-way communication, is customer owned, has no ongoing annual communication system costs, and pays bill credits on a per-demand-reduction event called basis.

Incentive Strategy:

A qualified residential customer with a working central air conditioner or heat pump may receive up to $36 per year ($2.40 per event for up to 15 non-emergency events) during summer months of May, June, July, August and September) for each smart WiFi connected thermostat that is connected to the internet and operates the air-conditioning/heat pump unit participating in the program. The HEM Program also provides participants with a rebate for an approved smart, WiFi thermostat (bring-your-own brand capability). HEM may also pay an upfront rebate to customers with existing program compliant thermostats installed prior to program enrollment for the purposes of enticing HEM program enrollment and participation. Demand reduction event incentives will be included as a credit on the customer’s electric bill. A credit will be applied for each central system with a smart WiFi connected thermostat participating in the program. Therefore, if the customer has two central systems, with an approved smart WiFi connected thermostat installed on both units, the customer will receive an event incentive, as described above, for each controlled system.

Attachment JCW-24 Page 2 of 5

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Eligible Measures:

Program measures initially include smart, WiFi connected thermostats to be owned by the customer. I&M may introduce other customer-owned program-compliant residential home appliance control options for customer participation through the HEM Program as connected, smart technologies evolve and become reasonable for inclusion into the program as demand response controlled equipment. I&M may offer certain independently branded, company supported WiFi connected thermostats through the HEM Program for specific tiers of customer engagement of home control that may be offered under the program and as required for communication system connectivity within distinct smart home technology environments.

Implementation Strategy:

The HEM Program will be offered to all I&M residential customers who agree to the following program terms:

1. Participate in the program and demand response events for at least (1) demand response season (May through September).

2. Install a new program identified WiFi connected or smart thermostat in their home that controls a central air conditioner or central air source heat pump that is in operable condition;

3. Customers with existing WiFi connected, or smart thermostats, that are of a program compliant brand must allow HEM program management and control of such thermostat and must adhere to other requirements as set forth for the HEM program;

4. Connect and maintain a continuous WiFi and internet connection to each thermostat enrolled in the program and make the thermostat available for HEM program management throughout the demand response season (May through September) for each year of program participation;

5. Allow the program’s IM Home platform to operate and manage their home heating and cooling equipment;

6. Provide feedback to I&M about their experience; 7. Participate in EM&V activities by I&M and its independent EM&V

vendor.

Marketing Strategy:

The HEM Program will be offered to all I&M Indiana residential customers that, at a minimum, have a central air conditioning unit and system or a central air source heat pump unit and system, and WiFi and internet capability.

Attachment JCW-24 Page 3 of 5

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I&M will utilize targeted outreach for customers identified as having program compliant equipment that can provide adequate demand response reduction capability. The program will be promoted through the following marketing channels:

1. Targeted customer marketing and outreach a. Direct mail b. Email c. Web-based marketing via I&M’s website d. Bill stuffers, e. Umbrella marketing

2. Utilize cross promotional marketing where appropriate.

Evaluation, Measurement & Verification:

An independent third party program evaluation contractor will perform process and impact evaluations. The process evaluation is expected to include a review of program objectives, implementation processes, data collection procedures, quality assurance methodologies, reporting timelines, and tracking of costs. The impact evaluation will determine the actual demand and energy reductions achieved, and provide cost/benefit analyses of the program, both on historical and prospective bases. The program evaluation objectives are expected to include: • Assessment of the effectiveness of program delivery mechanisms; • Assessment of participant satisfaction with the program and

perceived value of the program; • Assessment of the market potential, including the participant

characteristics, participation rate, reasons for non-participation, and customer awareness of energy efficiency;

• Determination of the program impacts, including achieved demand reduction (kW), and net energy impacts.

• Assessment of the program’s cost-effectiveness based on various economic tests.

Evaluation efforts will be supported with smart thermostat data, on-site visits, customer surveys, and additional load analyses. As part of this program, independent monitoring will be performed on a random sample of participants’ homes to provide necessary data for impact evaluation.

Estimated Participation and Impacts

Expected participation and associated estimated impacts, both energy and demand, for the program are provided in the table below.

Attachment JCW-24 Page 4 of 5

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Program Operating Budget

Anticipated operating budget associated with this program is shown in the table below.

Home Energy Management

Per KWH Rate 2020 2021 2022

Fixed Program Operating Costs

Marketing & Marketplace $57,709 $53,257 $48,319 Program Coordination $100,000 $100,000 $100,000 EM&V $50,000 $50,000 $50,000 Total Fixed $207,709 $203,257 $198,319

Variable Program Operating Costs Customer Incentives $2.25 $199,153 $195,522 $196,562 Delivery & Other $3.80 $292,702 $334,477 $372,484

Total Budget $8.37 $699,563 $733,255 $767,365 Energy Savings (kWh) 98,112 86,339 78,490 Demand Savings (kW) 2,133 3,013 3,813

Participants 2,666 3,766 4,766

Cost Effectiveness Test Results

Based on the assumptions stated above, the anticipated cost effectiveness results for this program are defined in the table below:

UCT TRC RIM Participant Home Energy Management 0.24 0.25 0.22 1.79

Attachment JCW-24 Page 5 of 5

Electric Energy Consumption Optimization (EECO) Program

1. PROGRAM DESCRIPTIONThe Electric Energy Consumption and Optimization (EECO) Program achievesenergy conservation through automated monitoring and control of voltage levelsprovided on distribution circuits. End use customers realize lower energy anddemand consumption when EECO is applied to the distribution circuit from whichthey are served.A distribution circuit facilitates electric power transfer from an electric substation toutility meters located at electric customer premises. Electric power customersemploy end-use electric devices (loads) that consume electrical power. At anypoint along a single distribution circuit, voltage levels vary based upon severalparameters, mainly including, but not exclusive of, the actual electrical conductorsthat comprise the distribution circuit, the size and location of electric loads alongthe circuit, the type of end-use loads being served, the distance of loads from thepower source, and losses incurred inherent to the distribution circuit itself.All end-use loads require certain voltage levels to operate and standards exist toregulate the levels of voltage delivered by utilities. In Indiana, I&M is required tomaintain a steady state +/- 5% of the respective baseline level (120 volt baselineyields acceptable voltage range of 114 volts to 126 volts).

Attachment JCW-25 Page 1 of 8

2

Historically, utilities including I&M, have set voltage levels near the upper limit at the distribution circuit source (substation) and have applied voltage support devices such as voltage regulators and capacitors along the circuit to assure that all customers are provided voltages within the required range. This basic design economically met the requirements by utilizing the full range (+/- 5%) of allowable voltages while only applying independent voltage support where needed. This basic design has worked well for many years. However, in the 1980’s, utilities recognized that loads on the circuits would actually consume less energy if voltages in the lower portion of the acceptable range were provided. In fact, many utilities, including I&M, established emergency operating procedures to lower voltage at distribution substations by 5% during power shortage conditions. The recent focus on energy efficiency and the availability of technology that allows monitoring and tighter control of circuit voltage conditions has led to development of automated voltage control schemes which coordinate the operation of voltage support devices and allow more customers on the circuit to be served at voltages in the lower portion of the acceptable range. Industry studies have shown that certain end-use loads consume more power with higher voltage levels applied to them, resulting in less efficient operation than if rated voltage levels are applied. Additionally, when higher power consumption is experienced on a distribution circuit, the circuit itself experiences higher levels of system losses. The graphic below depicts a typical I&M distribution circuit during peak conditions where the voltage level (Y axis) deteriorates as distance (x-axis) increases from the source with an overall circuit voltage bandwidth of approximately 4.1 volts (124.5 volts minus 120.4 volts).

Attachment JCW-25 Page 2 of 8

3

Energy and demand reductions can be realized through the deployment of smart grid technology to a distribution circuit where the bandwidth of voltage is more tightly controlled along the entire length of the distribution circuit. End-use customers realize energy and demand reductions since most end-use devices become more efficient in power utilization when voltage more near name plate ratings (typically 115 volts) is applied. Reduced losses on the distribution circuit are also realized through reduced end-use power consumption. The graphic below is a model illustration of the voltage profile of the same distribution circuit during peak load conditions with tighter bandwidth voltage control applied where the new overall voltage bandwidth is approximately 3.3 volts (121.5 volts minus 118.2 volts).

Attachment JCW-25 Page 3 of 8

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Independent measurement and verification has verified that, on average, a 1% reduction in voltage on distribution circuits translates into an approximate 1% reduction in end-use consumption (energy and demand) and distribution circuit losses (energy and demand). Of that 1% power consumption reduction at the circuit level, approximately 96% is end-use consumption reduction and 4% is loss reduction. The EECO Program (a/k/a Volt Var Optimization (VVO), or Conservation Voltage Reduction (CVR)) seeks the realization and attribution of energy and demand reductions on circuits where automated voltage control logic and near real time feedback loop voltage control has been applied. The application of EECO to a circuit creates automated voltage control zones where each zone has a specific voltage bandwidth profile dependent upon the specific load characteristics of the circuit. For some circuits, only one voltage zone is required, while for other circuits, more than one voltage zone may be required. The creation of tight bandwidth voltage control zones to a circuit causes energy and demand reductions to occur which can be expressed at an average voltage zone level which can then be summed to a yearly average circuit energy and demand reduction dependent upon the number of zones on the circuit, dependent upon the number of voltage control zones required for each circuit.

Attachment JCW-25 Page 4 of 8

5

Energy and demand savings occur when EECO is applied to distribution circuits. Once applied, a step change in energy and demand consumption by customers is realized, dependent upon the where customer loads are located within the voltage zones, the load characteristics of the circuit, and how end-use loads respond to the voltage reduction. The resultant energy and demand consumption reduction persists at the new levels as long as tighter voltage bandwidth operation is applied. As a result, ongoing energy and demand savings persists for the duration of the life of the EECO equipment and as long as the equipment is maintained and operated in the voltage bandwidth mode.

2. PROGRAM RATIONALE

EECO is a demand side management program that creates energy efficiency savings as well. The EECO program seeks to cost effectively deploy new technology to targeted distribution circuits, in part to reduce the peak demand experienced on I&M’s electrical power supply system. The voltage reduction stemming from the EECO program operates to effectively reduce consumption during the times in which system peaks are set and as a result directly reduces peak demand. EECO also cost effectively reduces the level of ongoing energy consumption by end-use devices located on the load side of the utility meter as many end-use devices consume less energy with lower voltages consistently applied. Continuous operation of EECO will yield the same yearly and ongoing energy consumption reduction required for energy conservation. As a result of EECO, both demand and energy consumption reduction will occur on I&M’s power system through deliberate intervention by I&M. EECO can be deployed cost effectively on many I&M distribution stations and circuits but each station must be analyzed and estimated individually. Due to the existing voltage control design of most I&M distribution substations, EECO will be applied based upon groups of circuits that share the same substation bus (electrical source common connection point). With average voltage reductions per EECO circuit 2.5%, but up to 3%, up to an average 3% peak demand and 3% annual energy usage reduction per EECO circuit can occur. Different substations will have different voltage reduction capabilities, depending on circuit limitations, topology, and load demographics. Once EECO is deployed and operational, though, actual voltage reduction data can be used to optimize energy and demand conservation performance. The amount of voltage reduction to be achieved by station and circuit is dependent upon several factors including planned distribution system operation modes, temporary and/or unplanned system configurations, modeled voltage levels, actual voltage levels, etc. The level of post in-service optimization to be achieved can be determined from actual circuit voltage and load data.

3. PROGRAM PARTICIPATION

Attachment JCW-25 Page 5 of 8

6

The table below reflects the energy savings by circuit and customer class for I&M’s existing circuit EECO deployment in I&M Indiana service territory for 2020, 2021, and 2022.

Total Energy Savings (kWh)

Residential Energy Savings (kWh)

Commercial Energy Savings (kWh)

Industrial Energy Savings (kWh)

Street-lighting Energy Savings (kWh)

Demand Savings

(kW)

Deployment 1 & 2

East Side 2,263,634 1,368,757 863,830 25,498 5,549 815 Elcona 1,713,035 300,716 209,847 1,199,230 3,241 522 Grabill 1,104,538 565,170 281,737 257,249 382 358

Hacienda 2,476,603 1,719,338 751,035 772 5,459 910 Harper 1,267,528 537,619 409,822 312,125 7,962 389 Lincoln 1,512,265 513,170 888,605 106,813 3,677 416

South Bend 1,479,491 704,780 767,070 6,760 881 461 Spy Run 1,651,586 217,278 600,953 833,313 43 336

State Street 1,420,354 703,264 716,676 402 12 424 Total 14,889,034 6,622,080 5,479,084 2,760,564 27,306 4,631

Deployment 3

Northland 2,265,196 801,178 419,480 1,044,539 0 740 Osolo 2,761,577 756,197 1,066,098 938,655 627 820

Southside 1,515,498 589,337 759,585 166,575 0 443 Total 6,542,271 2,146,712 2,245,163 2,149,769 627 2,003

Deployment 4

South Side (SB) 1,058,205 532,304 397,166 127,463 1,272 278 McKinley 3,052,921 864,773 571,813 1,616,134 202 795 Farmland 474,767 347,349 121,136 5,873 410 215 Daleville 1,468,509 864,861 535,862 66,769 1,018 462

Pettit Avenue 825,325 586,564 209,067 7,292 22,401 291 Total 6,879,727 3,195,851 1,835,044 1,823,531 25,303 2,042

4. ELIGIBLE CUSTOMERS

All Residential, Commercial, and Industrial customers served by circuits with EECO applied are eligible.

5. INCENTIVES

Customer incentives are not required for the EECO Program.

Attachment JCW-25 Page 6 of 8

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6. IMPLEMENTATION PLAN

A. Promotion EECO will not require any program promotion. B. Delivery Delivery of the EECO Program will be achieved through the installation of control logic, telecommunication equipment, and voltage control equipment in order to control the voltage bandwidth on EECO circuits within voltage compliance levels required by the Indiana Utility Regulatory Commission. Equipment installed for the I&M EECO Pilot is installed, owned and operated by Indiana Michigan Power and is solely located on the source side (utility side) of the utility billing meter located on customer premises. Control logic software located on a central server, cellular and/or mesh radio telecommunication equipment, electronic communicating voltage control equipment, and communicating voltage sensing equipment are components required for EECO program operation. Existing distribution circuits require engineering, planning, design and field construction to enable proper application of the program. Circuits are analyzed for existing voltage characteristics and re-designed for voltage zones where the tight voltage bandwidth required for EECO operation can be effectively maintained. Prior to full program operation, all EECO equipment is performance tested for verified continuous and consistent operation. In general, EECO equipment design, installation and final check-out testing takes approximately 18 months before full operation (e.g. in-service operation) can be achieved. C. Quality Assurance I&M will routinely monitor the performance of EECO distribution circuits to ensure the technology remains in proper operating order and customer quality of service is ensured and maintained. Ongoing operation and maintenance expense supports quality assurance efforts. D. Evaluation Independent third-party evaluation, measurement and verification (EM&V) will be performed by I&M’s DSM/EE EM&V Core Plus Program vendor. In general, the program evaluator will:

1. Verify the amount of peak demand reduction and yearly energy consumption from the program, including seasonality effects. Utility-grade metering will be used to quantify the average per-circuit energy and demand reduction on a distribution circuit basis. The EM&V vendor will utilize standard industry protocols and methods to verify the level of demand and energy savings realized at the substation.

Attachment JCW-25 Page 7 of 8

8

2. Assess the effectiveness of the program delivery mechanism including, but not limited to, program operation and processes.

3. Quantify annual program savings. 7. ANNUAL COST

Annual costs for the 2020, 2021, and 2022 program years are shown in the table below.

8. EXPECTED ENERGY AND DEMAND SAVINGS (KWh, KW) Total Energy and demand savings for the EECO Program will be reported at the station, as shown in the table directly below.

EECO Per KWH

Rate 2020 2021 2022 Fixed Program Operating Costs Fixed Capital Cost $0 $0 $0

Return Of and On I&M Assets $621,642 $608,262 $594,888 Program Coordination $31,680 $31,680 $31,680 EM&V $161,219 $161,219 $161,219 Total Fixed & Associated Costs $814,541 $801,161 $787,787

Variable Program Operating Costs Customer Incentives $0.00 $0 $0 $0 Delivery & Other $0.02 $483,657 $483,657 $483,657

Total Budget $0.06 $1,298,198 $1,284,818 $1,271,444 Energy Savings (kWh) 20,457,973 23,526,669 24,549,568 Demand Savings (kW) 6,580 6,580 6,580

Participants 80,939 80,939 80,939

10. ESTIMATED COST / BENEFIT SCORES

Benefit / cost ratios were not developed for the 2020 – 2022 program period since no new EECO deployments are planned for this period and since Deployment 3 and 4 have not been operational for a sufficient length of time to determine consistent performance metrics. I&M performed final benefit cost scoring for Deployments 1 and 2 in Cause No. 43827 DSM 8.

Attachment JCW-25 Page 8 of 8

MMP Morgan Marketing Partners

6205 Davenport Drive, Madison, WI 53711 608-277-9518

August 19, 2019

Mr. Jon Walter

Indiana Michigan Power

Dear Mr. Walter,

This letter is to confirm that Morgan Marketing Partners calculated the cost benefit scores for all

Indiana Michigan Power programs using industry standard protocols. The tool used was a nationally

recognized cost benefit tool called DSMore. The calculations within DSMore are based on the

California Standard Practice Manual. These standard calculations ensure comparability between

programs and with other utilities. Inputs were based on the needed information for those specific

Standard Practice Manual calculations utilizing each unique program’s characteristics.

If you have any other questions about the calculations used, please feel free to contact me.

Sincerely,

Rick Morgan

Rick Morgan

President

Attachment JCW-26

I.U.R.C. NO. 17 REVISED SHEET NO. 35 INDIANA MICHIGAN POWER COMPANY STATE OF INDIANA

RIDER H.E.M. (Home Energy Management Rider)

(Cont’d on Sheet No. 35.1) ISSUED BY EFFECTIVE FOR ELECTRIC SERVICE RENDERED TOBY L. THOMAS ON AND AFTER PRESIDENT FORT WAYNE, INDIANA ISSUED UNDER AUTHORITY OF THE INDIANA UTILITY REGULATORY COMMISSION DATED IN CAUSE NO.

Availability of Service.

Available on a voluntary basis for customers receiving residential electric service who desire to participate in a state-of-the art load management program.

For non-owner occupied multi-family dwellings, the Company may require property owner authorization for customers to install the required smart, WiFi enabled load control equipment and, if necessary, auxiliary communicating devices such as remote sensors or additional control devices. Customers will not be eligible for this rider if the property owner does not allow installation of such equipment. Program Description.

To participate, customers must install program compliant smart, WiFi enabled load control equipment, connect that equipment to their home WiFi broadband internet connection, and maintain that connection with continuous operation and availability for the duration of the program annual operational period defined as May through September of each program year. All such devices shall be installed at a time that is consistent with the orderly and efficient deployment of this program. Customer load control equipment must comply with the Company’s approved list of devices. Initially, the Company will determine and provide a program smart, or WiFi connected thermostat compliant list, but as technology, device capability, and the program’s load management platform evolves, the Company may allow and provide for additional approved devices, where the program is eventually anticipated to accommodate a Bring Your Own Device (BYOD) load management capability. The Company may provide for and determine the appropriate level of customer equipment rebates, as needed and required, in order to facilitate customer installation and ownership of the required equipment as part of the Home Energy Management Program

The Company will utilize a load management software platform that will operate and control Customer load

control devices primarily to reduce customer’s demand and use. The Company’s load management platform will primarily operate to optimize and/or reduce demand use through either peak period use load reduction management techniques or load shaping to achieve optimum and efficient Customer demand use of electricity.

Program demand reduction/load management activities can occur during coincident peak and non-

coincident peak demand periods according to Company and PJM system load forecasting techniques. Coincident peak, non-coincident peak, and emergency demand reduction/load management activities will be coordinated during electric power system peak load periods determined according to both I&M system and PJM system requirements. The Company plans to utilize load management activities focused primarily on managing home temperature set points with consideration to minimize customer comfort impact during the period of peak demand load management activity. Peak and emergency conditions demand reduction activities will primarily focus on control of the central electric cooling/heat pump unit(s) during summer month peak demand periods. Peak period demand load control events can occur based on I&M and/or PJM system need, as determined by the Company

Peak period load management events shall curtail customer load based on system need, at the sole

discretion of the Company, during the months of May through September and shall not exceed 15 events per year with no single event lasting more than six (6) consecutive hours and no more than one event per day.

Attachment JCW-27 Page 1 of 8

I.U.R.C. NO. 17 REVISED SHEET NO. 35.1 INDIANA MICHIGAN POWER COMPANY STATE OF INDIANA

RIDER H.E.M. (Home Energy Management Rider)

(Cont’d on Sheet No. 35.2) ISSUED BY EFFECTIVE FOR ELECTRIC SERVICE RENDERED TOBY L. THOMAS ON AND AFTER PRESIDENT FORT WAYNE, INDIANA ISSUED UNDER AUTHORITY OF THE INDIANA UTILITY REGULATORY COMMISSION DATED IN CAUSE NO.

(Cont’d from Sheet No. 35) The Company may communicate events to Customers through the program’s load management platform,

via a smart phone application push notification, or via email or other electronic notification means. The customer may opt out of a Company planned load management event by providing the Company appropriate notice through the requisite and identified program opt out means of communication. The Company’s load management software algorithm will facilitate and accept the temperature adjustment as an event opt-out. Load Management Credit. Customers shall receive a monthly billing credit only for the number of peak period or emergency demand reduction events called and participated in per month for each central electric cooling/heat pump unit controlled during the billing months of May to September, up to a maximum of 15 events per year. Monthly billing credits will be calculated and applied to customer bills at $2.40 per event called and participated in, subject to the annual 15 event maximum. Customers that opt out of demand reduction events shall not be eligible for a billing credit for those events. Customers shall not be eligible for load management credits if the Company’s load management platform cannot manage customer loads during peak period events due to issues such as customer internet and/or WiFi outages or lack of connectivity. The Company, at its sole discretion, reserves the right to remove enrolled customers from the program and their eligibility for bill credits under the program due to consistent and iterative opt out of demand response events but only if opt outs exceed fifty percent of the coincident peak period demand reduction events called during any annual program period. The Company shall provide billing credits proration up to and including events called and participated in by the Customer.

Such credit shall not reduce the customer’s bill below the minimum charge as specified in the tariff under

which the customer takes service.

Contract. Participating customers must agree to participate for an initial period of one (1) year or one peak period season period (defined as May through September) as applicable and thereafter may discontinue participation by contacting the Company.

Attachment JCW-27 Page 2 of 8

I.U.R.C. NO. 17 REVISED SHEET NO. 35.2 INDIANA MICHIGAN POWER COMPANYSTATE OF INDIANA

RIDER H.E.M. (Residential Home Energy Management Rider)

ISSUED BY EFFECTIVE FOR ELECTRIC SERVICE RENDERED TOBY L. THOMAS ON AND AFTER PRESIDENT FORT WAYNE, INDIANA ISSUED UNDER AUTHORITY OF THE

INDIANA UTILITY REGULATORY COMMISSION DATED IN CAUSE NO.

(Cont’d from Sheet No. 35.1)

Equipment.

The Customer will furnish and install program compliant smart or WiFi enabled and broadband internet connected load control equipment, and, if necessary, an auxiliary communicating device. All equipment will be owned and maintained by the customer, from installation, throughout program participation, and until such time as the Home Energy Management Program is discontinued or the customer requests to be removed from the program after completing the initial period set forth above. At that time, the Company will cease both its energy management and control of the program equipment, along with any auxiliary communicating devices, and the Management Credit provided for by the program.

Should the customer lose, damage, or not maintain the required WiFi and internet connectivity of the load control devices or auxiliary communicating equipment, the Company will contact the customer in an attempt to reinstate program required equipment functionality. If such attempts by the Company do not facilitate reinstatement of the program required functionality, the Company will remove the customer from the program and will cease the Load Management Credit. Customer will receive credits for any events called and participated in by the customer prior to removal from the program.

Special Terms and Conditions.

This rider is subject to the Company's Terms and Conditions of Service and all provisions of the tariff under which the customer takes service, including all payment provisions.

The Company shall not be required to offer the program to customers who cannot maintain WiFi and internet connectivity for required functionality of the load control equipment, or if the continued operation of the program cannot be justified for reasons such as: customer preference, electric power market conditions, technological functionality and limitations, safety concerns, or abnormal customer premise conditions, including vacation or other limited occupancy residences.

The Company and its authorized agents shall confirm installation through WiFi and internet connectivity of the load control device(s). In the event full WiFi and internet connectivity is not available, the Company may require access to inspect the load control device(s) and/or provide the customer thirty (30) days to successfully restore or provide full WiFi and internet connectivity. Should full WiFi and internet connectivity not be available after 30 days, the customer will be promptly removed from the program and the Energy Management Credit discontinued until such time as the Company is able to gain the required access. The Company shall not be responsible for the repair, maintenance or replacement of any customer-owned equipment.

Customer-specific information within data collected during the course of this energy management and control program will be held as confidential and data presented in any analysis will protect the identity of the individual customer.

Attachment JCW-27 Page 3 of 8

I.U.R.C. NO. 17 REVISED SHEET NO. 35 INDIANA MICHIGAN POWER COMPANY STATE OF INDIANA

RIDER H.E.M. (Home Energy Management Rider)

(Cont’d on Sheet No. 35.1) ISSUED BY EFFECTIVE FOR ELECTRIC SERVICE RENDERED TOBY L. THOMAS ON AND AFTER PRESIDENT FORT WAYNE, INDIANA ISSUED UNDER AUTHORITY OF THE INDIANA UTILITY REGULATORY COMMISSION DATED IN CAUSE NO.

Availability of Service.

Available on a voluntary basis for customers receiving residential electric service who desire to participate in a state-of-the art energy management program.

For non-owner occupied multi-family dwellings, the Company may require property owner authorization for customers to install the required smart, WiFi enabled load control equipment and, if necessary, auxiliary communicating devices such as remote sensors or additional control devices. Customers will not be eligible for this rider if the property owner does not allow installation of such equipment. Program Description.

To participate, customers, or their authorized agents, must install program compliant smart, WiFi enabled load control equipment, connect that equipment to their home WiFi broadband internet connection, and maintain that connection with continuous operation and availability for the duration of the program annual operational period defined as May through September of each program year. Also, if necessary, the customer must install any program required auxiliary communicating devices to further facilitate the program’s management and control of certain customer owned loads. All such devices shall be installed at a time that is consistent with the orderly and efficient deployment of this program. Customer load control equipment must comply with the Company’s approved list of devices. Initially, the Company will determine and provide a program smart, or WiFi connected thermostat compliant list, but as technology, device capability, and the program’s loadenergy management platform evolves, the Company may allow and provide for additional approved devices, where the program is eventually anticipated to accommodate a Bring Your Own Device (BYOD) loadenergy management capability. The Company may provide for and determine the appropriate level of customer equipment rebates, as needed and required, in order to facilitate customer installation and ownership of the required equipment as part of the Home Energy Management Program

The Company will utilize a loadn energy management software platform that will operate and control

customer load control devices to reduce and optimize customer’s demand andenergy use. The Company’s loadenergy management platform will operate to optimize and/or reduce demand energy use through either peak period use load reduction management techniques load shaping to achieve optimum and efficient customer demand use of electricity.

Program demandenergy reduction/load management activities can occur during coincident peak and non-

peak periods determined at the sole discretion of the Companyaccording to Company and PJM system load forecasting techniques. Coincident peak, non-coincident peak, and emergency demand reduction/load management activities will be coordinated during electric power system peak load periods determined according to both I&M system and PJM system requirements. The Company plans to utilize load management activities focused primarily on managing home temperature set points with consideration to minimize customer comfort impact during the period of peak demand load management activity. Peak and emergency conditions demand reduction activities will primarily focus on control of the central electric cooling/heat pump unit(s) during summer month peak demand periods. Peak period demand load control events can occur based on I&M and/or PJM system need, as determined by the Company

The Company will utilize a continuous load shaping strategy where energy management activities undertaken through this program will occur within customer-selected home temperature threshold set points to

Attachment JCW-27 Page 4 of 8

I.U.R.C. NO. 17 REVISED SHEET NO. 35 INDIANA MICHIGAN POWER COMPANYSTATE OF INDIANA

RIDER H.E.M. (Home Energy Management Rider)

(Cont’d on Sheet No. 35.1)

ISSUED BY EFFECTIVE FOR ELECTRIC SERVICE RENDERED TOBY L. THOMAS ON AND AFTER PRESIDENT FORT WAYNE, INDIANA ISSUED UNDER AUTHORITY OF THE

INDIANA UTILITY REGULATORY COMMISSION DATED IN CAUSE NO.

minimize customer comfort impact. However, other energy management strategies may be employed and evaluated to determine the strategy that optimizes energy reduction without affecting customer comfort within the pre-determined customer preference set points. Energy management activities will focus on control of the central electric cooling/heat pump unit(s) during any month of the year.

Peak period loadenergy management events shall curtail customer load based on system need, at the sole discretion of the Company, during the months of May through September and shall not exceed 15 events per year with no single event lasting more than six (6) consecutive hours and no more than one event per day.

Attachment JCW-27 Page 5 of 8

I.U.R.C. NO. 17 REVISED SHEET NO. 35.1 INDIANA MICHIGAN POWER COMPANY STATE OF INDIANA

RIDER H.E.M. (Home Energy Management Rider)

(Cont’d on Sheet No. 35.2) ISSUED BY EFFECTIVE FOR ELECTRIC SERVICE RENDERED TOBY L. THOMAS ON AND AFTER PRESIDENT FORT WAYNE, INDIANA ISSUED UNDER AUTHORITY OF THE INDIANA UTILITY REGULATORY COMMISSION DATED IN CAUSE NO.

(Cont’d from Sheet No. 35) Non-peak energy management activities will seek to optimize customer central electric cooling/heat pump

unit(s) usage according to customer selected home temperature threshold set points in order to minimize customer comfort impact but maximize efficient operation of the equipment to achieve reduced energy consumption for the relevant operation period of the year for this equipment.

The Company may communicate events to customers through the loadenergy management platform, via

a smart phone application push notification, or via email or other electronic notification means. The customer may opt out of an loadenergy management event by providing the Company appropriate notice through the requisite and identified program opt out means of communication. The Company’s load management software algorithm will facilitate and accept the temperature adjustment as an event opt-out. adjusting the temperature set point of the thermostat. The Company’s energy management software algorithm will facilitate and accept the temperature adjustment as an event opt out unless customer internet and Wifi connectivity issues inhibit such activity. LoadEnergy Management Credit.

Customers shall receive a monthly billing credit for the number of peak period energy management events called and participated in per month for each central electric cooling/heat pump unit controlled during the billing months of May through September. Monthly billing credits will be calculated and applied to customer bills at $1.952.40 per event called and participated in, subject to the annual 15 event maximum. based upon final determination of event participation and Company billing period cycles. For the purpose of determining the total annual Energy Management Credit, peak period energy management events shall not exceed 15 events per year and shall occur only during the months of May through September.

Customers that opt out of energy management events shall not be eligible for a billing credit for those

events. Customers shall not be eligible for energy management credits if the Company’s energy management platform cannot manage customer loads during peak period events due to issues such as customer internet and/or Wifi outages or lack of connectivity.

Customers shall not be eligible for load management credits if the Company’s load management platform

cannot manage customer loads during peak period events due to issues such as customer internet and/or WiFi outages or lack of connectivity.

The Company, at its sole discretion, reserves the right to remove enrolled customers from the

program and their eligibility for bill credits under the program due to consistent and iterative opt out of demand response events but only if opt outs exceed fifty percent of the coincident peak period demand reduction events called during any annual program period. The Company shall provide billing credits proration up to and including events called and participated in by the Customer.

Such credit shall not reduce the customer’s bill below the minimum charge as specified in the tariff under

which the customer takes service. No monthly billing credit will be provided or paid to customers for non-peak period energy management

Attachment JCW-27 Page 6 of 8

I.U.R.C. NO. 17 REVISED SHEET NO. 35.1 INDIANA MICHIGAN POWER COMPANY STATE OF INDIANA

RIDER H.E.M. (Home Energy Management Rider)

(Cont’d on Sheet No. 35.2) ISSUED BY EFFECTIVE FOR ELECTRIC SERVICE RENDERED TOBY L. THOMAS ON AND AFTER PRESIDENT FORT WAYNE, INDIANA ISSUED UNDER AUTHORITY OF THE INDIANA UTILITY REGULATORY COMMISSION DATED IN CAUSE NO.

activities that seek to optimize and reduce the customers’ energy consumption through this program.

Contract. Participating customers must agree to participate for an initial period of one (1) year or one peak period season period (defined as May through September) as applicable and thereafter may discontinue participation by

contacting the Company.Participating customers must agree to participate for an initial period of one (1) year and thereafter may discontinue participation by contacting the Company.

Attachment JCW-27 Page 7 of 8

I.U.R.C. NO. 17 REVISED SHEET NO. 35.2 INDIANA MICHIGAN POWER COMPANY STATE OF INDIANA

RIDER H.E.M. (Residential Home Energy Management Rider)

ISSUED BY EFFECTIVE FOR ELECTRIC SERVICE RENDERED TOBY L. THOMAS ON AND AFTER PRESIDENT FORT WAYNE, INDIANA ISSUED UNDER AUTHORITY OF THE INDIANA UTILITY REGULATORY COMMISSION DATED IN CAUSE NO.

(Cont’d from Sheet No. 35.1) Equipment. The customer, or its authorized agent, will furnish and install, smart, WiFi enabled and broadband internet connected load control equipment, and, if necessary, an auxiliary communicating device. All equipment will be owned and maintained by the customer, from installation, throughout program participation, and until such time as the Home Energy Management Program is discontinued or the customer requests to be removed from the program after completing the initial period set forth aboveof one (1) year. At that time, the Company will cease both its energy management and control of the program equipment, along with any auxiliary communicating devices, and the LoadEnergy Management Credit provided for by the program. Should the customer lose, damage, or not maintain the required WiFi and internet connectivity of the load control devices or auxiliary communicating equipment, the Company will contact the customer in an attempt to reinstate program required equipment functionality. If such attempts by the Company do not facilitate reinstatement of the program required functionality, the Company will remove the customer from the program and will cease the LoadEnergy Management Credit. Customer will receive credits for any events called and participated in by the customer prior to removal from the program. Special Terms and Conditions.

This rider is subject to the Company's Terms and Conditions of Service and all provisions of the tariff under which the customer takes service, including all payment provisions.

The Company shall not be required to offer the program to customers who cannot maintain WiFi and internet connectivity for required functionality of the load control equipment, or if the continued operation of the program cannot be justified for reasons such as: customer preference, electric power market conditions, technological functionality and limitations, safety concerns, or abnormal customer premise conditions, including vacation or other limited occupancy residences.

The Company and its authorized agents shall confirm installation through WiFi and internet connectivity of the load control device(s). In the event full WiFi and internet connectivity is not available, the Company may require access to inspect the load control device(s) and/or provide the customer thirty (30) days to successfully restore or provide full WiFi and internet connectivity. Should full WiFi and internet connectivity not be available after 30 days, the customer will be promptly removed from the program and the Energy Management Credit discontinued until such time as the Company is able to gain the required access. The Company shall not be responsible for the repair, maintenance or replacement of any customer-owned equipment.

Customer-specific information within data collected during the course of this energy management and

control program will be held as confidential and data presented in any analysis will protect the identity of the individual customer.

Attachment JCW-27 Page 8 of 8

I.U.R.C. NO. 17 REVISED SHEET NO. 21.3 INDIANA MICHIGAN POWER COMPANY STATE OF INDIANA

TARIFF E.C.L.S. (Energy Conservation Lighting Service)

ISSUED BY EFFECTIVE FOR SERVICE RENDERED TOBY L. THOMAS ON AND AFTER PRESIDENT FORT WAYNE, INDIANA ISSUED UNDER THE AUTHORITY OF THE INDIANA UTILITY REGULATORY COMMISSION DATED IN CAUSE NO.

(Cont’d From Sheet No. 21)

The following rates apply to existing luminaires and are not available for new business.

175 7,000 MV 9.75 400 20,000 MV 15.70

Public Efficient Streetlighting Program The Public Efficient Streetlighting Program (PES) is a program implemented under the Company’s Demand-Side Management / Energy Efficiency Program, designed to encourage energy efficient streetlighting through the conversion of existing Company-owned streetlights to LED streetlights. The PES will be performed under the terms and conditions contained in the PES as approved by the Commission. PES Monthly Rate. (Tariff Code 532) Rate Per Lamp Per Month On Metallic or

Concrete Pole Installed Prior to On Wood April 6, 1981 Post-top Lamp on

Approx. PES Type Pole With Under- Fiberglass Pole Lamp of Lamp Overhead Overhead Ground With Underground Lumens Conversion Circuitry Circuitry Circuitry Circuitry

$ $ $ $ 5,800 HPS > LED 7.75 17.55 17.90 -- 9,500 HPS > LED 8.50 18.25 19.20 15.75 22,000 HPS > LED 12.90 20.05 21.75 -- 50,000 HPS > LED 17.00 23.15 24.90 -- 7,000 MV > LED 9.75 -- -- --

20,000 MV > LED 15.70 -- -- -- The customer will be required to make a contribution-in-aid of construction calculated in accordance with the formula set forth below if the customer requests the installation of any facility other than a standard company luminaire and an upsweep arm not over 10 feet in length installed on a pole described in the above rate.

(Cont’d on Sheet No. 21.2)

Attachment JCW-28 Page 1 of 6

I.U.R.C. NO. 17 REVISED SHEET NO. 20 INDIANA MICHIGAN POWER COMPANY STATE OF INDIANA

TARIFF S.L.S. (Streetlighting Service)

ISSUED BY EFFECTIVE FOR ELECTRIC SERVICE RENDERED TOBY L. THOMAS ON AND AFTER PRESIDENT FORT WAYNE, INDIANA ISSUED UNDER THE AUTHORITY OF THE INDIANA UTILITY REGULATORY COMMISSION DATED IN CAUSE NO.

Availability of Service.

This tariff is withdrawn except for existing streetlights or traffic control signals serving those municipalities, counties, and other governmental subdivisions having contracted for such service under this tariff, Tariff S.L.N. (Streetlighting-New and Rebuilt Systems), or a special contract prior to the first effective date of Tariff E.C.L.S. (Energy Conservation Lighting Service).

The Energy Policy Act of 2005 requires that mercury vapor lamp ballasts shall not be manufactured or

imported after January 1, 2008. To the extent that the company has the necessary materials, the Company will continue to maintain existing mercury vapor lamp installations in accordance with this Tariff. Monthly Rate. (Tariff Code 533)

Price Per Lamp Per Month On Metallic or Concrete

Size of On Wood Poles Poles With Lamp in With Overhead Overhead Underground Lumens Type of Lamp Circuitry Circuitry Circuitry

1,000 Incandescent -- -- 13.35 2,500 Incandescent -- -- 18.80 4,000 Incandescent -- -- 26.80

7,000 Mercury Vapor 9.60 14.40 17.35 20,000 Mercury Vapor 14.45 20.30 23.55 50,000 Mercury Vapor -- 32.20 --

16,000 High Pressure Sodium 13.25 19.55 24.60 25,500 High Pressure Sodium 15.30 21.75 --

Public Efficient Streetlighting Program The Public Efficient Streetlighting Program (PES) is a program implemented under the Company’s Demand-Side Management / Energy Efficiency Program, designed to encourage energy efficient streetlighting through the conversion of existing Company-owned streetlights to LED streetlights. The PES will be performed under the terms and conditions contained in the PES as approved by the Commission.

(Cont’d on Sheet No. 20.1)

Attachment JCW-28 Page 2 of 6

I.U.R.C. NO. 17 REVISED SHEET NO. 20.2 INDIANA MICHIGAN POWER COMPANY STATE OF INDIANA

TARIFF S.L.S. (Streetlighting Service)

ISSUED BY EFFECTIVE FOR SERVICE RENDERED TOBY L. THOMAS ON AND AFTER PRESIDENT FORT WAYNE, INDIANA ISSUED UNDER THE AUTHORITY OF THE INDIANA UTILITY REGULATORY COMMISSION DATED IN CAUSE NO.

(Cont’d from Sheet No. 20) PES Monthly Rate. (Tariff Code 534)

Price Per Lamp Per Month On Metallic or Concrete

Size of On Wood Poles Poles With Lamp in PES Type of With Overhead Overhead Underground Lumens Lamp Conversion Circuitry Circuitry Circuitry

1,000 Incandescent > LED -- -- 13.50 2,500 Incandescent > LED -- -- 18.95 4,000 Incandescent > LED -- -- 26.95

7,000 Mercury Vapor > LED 9.60 14.40 17.35 20,000 Mercury Vapor > LED 14.45 20.30 23.55 50,000 Mercury Vapor > LED -- 32.20 --

16,000 High Pressure Sodium > LED 13.25 19.55 24.60 25,500 High Pressure Sodium > LED 15.30 21.75 --

Rate for Traffic Control Signals.

For post type traffic director units, which are supplied energy for their operation but owned and maintained by the customer, having normally one lamp of 69 watts or less capacity burning at the same time except during a change in signal when no more than two lamps are burning simultaneously for a period not to exceed 15 percent of the total time to complete an entire cycle of signal changes, $3.00/Month.

Applicable Riders.

Monthly charges computed under this tariff shall be adjusted in accordance with the applicable Commission-approved rider(s) listed on Sheet No. 38.

Delayed Payment Charge. All bills under this schedule shall be rendered and due monthly. If not paid within 17 days after the bill is mailed, there shall be added to bills of $3 or less, 10 percent of the amount of the bill; and to bills in excess of $3, there shall be added 10 percent of the first $3, plus 3 percent of the amount of the bill in excess of $3. Any governmental agency shall be allowed such additional period of time for payment of the net bill as the agency's normal fiscal operations required, not to exceed 30 days.

(Cont’d on Sheet No. 20.2)

Attachment JCW-28 Page 3 of 6

I.U.R.C. NO. 17 REVISED SHEET NO. 21.3 INDIANA MICHIGAN POWER COMPANY STATE OF INDIANA

TARIFF E.C.L.S. (Energy Conservation Lighting Service)

ISSUED BY EFFECTIVE FOR SERVICE RENDERED TOBY L. THOMAS ON AND AFTER PRESIDENT FORT WAYNE, INDIANA ISSUED UNDER THE AUTHORITY OF THE INDIANA UTILITY REGULATORY COMMISSION DATED IN CAUSE NO.

(Cont’d From Sheet No. 21)

The following rates apply to existing luminaires and are not available for new business.

175 7,000 MV 9.75 400 20,000 MV 15.70

Public Efficient Streetlighting Program The Public Efficient Streetlighting Program (PES) is a program implemented under the Company’s Demand-Side Management / Energy Efficiency Program, designed to encourage energy efficient streetlighting through the conversion of existing Company-owned streetlights to LED streetlights. The PES will be performed under the terms and conditions contained in the PES as approved by the Commission. Participating municipalities and other participating customers will be required to make a one-time, up-front contribution toward the LED fixture cost as follows:

Fixtures less than 20.000 Lumen $14.52 per fixture Fixtures 20,000 Lumen and greater $21.82 per fixture

PES Monthly Rate. (Tariff Code 532) Rate Per Lamp Per Month On Metallic or

Concrete Pole Installed Prior to On Wood April 6, 1981 Post-top Lamp on

Approx. PES Type Pole With Under- Fiberglass Pole Lamp of Lamp Overhead Overhead Ground With Underground Lumens Conversion Circuitry Circuitry Circuitry Circuitry

$ $ $ $ 5,800 HPS > LED 7.9075 17.7055 18.0517.90 -- 9,500 HPS > LED 8.6550 18.4025 19.3520 15.9075 22,000 HPS > LED 13.1212.90 20.2705 21.9775 -- 50,000 HPS > LED 17.2200 23.37 15 25.1224.90 -- 7,000 MV > LED 9.9075 -- -- --

20,000 MV > LED 15.92 70 -- -- -- The customer will be required to make a contribution-in-aid of construction calculated in accordance with the formula set forth below if the customer requests the installation of any facility other than a standard company luminaire and an upsweep arm not over 10 feet in length installed on a pole described in the above rate.

(Cont’d on Sheet No. 21.2)

Attachment JCW-28 Page 4 of 6

I.U.R.C. NO. 17 REVISED SHEET NO. 20 INDIANA MICHIGAN POWER COMPANY STATE OF INDIANA

TARIFF S.L.S. (Streetlighting Service)

ISSUED BY EFFECTIVE FOR ELECTRIC SERVICE RENDERED TOBY L. THOMAS ON AND AFTER PRESIDENT FORT WAYNE, INDIANA ISSUED UNDER THE AUTHORITY OF THE INDIANA UTILITY REGULATORY COMMISSION DATED IN CAUSE NO.

Availability of Service.

This tariff is withdrawn except for existing streetlights or traffic control signals serving those municipalities, counties, and other governmental subdivisions having contracted for such service under this tariff, Tariff S.L.N. (Streetlighting-New and Rebuilt Systems), or a special contract prior to the first effective date of Tariff E.C.L.S. (Energy Conservation Lighting Service).

The Energy Policy Act of 2005 requires that mercury vapor lamp ballasts shall not be manufactured or

imported after January 1, 2008. To the extent that the company has the necessary materials, the Company will continue to maintain existing mercury vapor lamp installations in accordance with this Tariff. Monthly Rate. (Tariff Code 533)

Price Per Lamp Per Month On Metallic or Concrete

Size of On Wood Poles Poles With Lamp in With Overhead Overhead Underground Lumens Type of Lamp Circuitry Circuitry Circuitry

1,000 Incandescent -- -- 13.35 2,500 Incandescent -- -- 18.80 4,000 Incandescent -- -- 26.80

7,000 Mercury Vapor 9.60 14.40 17.35 20,000 Mercury Vapor 14.45 20.30 23.55 50,000 Mercury Vapor -- 32.20 --

16,000 High Pressure Sodium 13.25 19.55 24.60 25,500 High Pressure Sodium 15.30 21.75 --

Public Efficient Streetlighting Program The Public Efficient Streetlighting Program (PES) is a program implemented under the Company’s Demand-Side Management / Energy Efficiency Program, designed to encourage energy efficient streetlighting through the conversion of existing Company-owned streetlights to LED streetlights. The PES will be performed under the terms and conditions contained in the PES as approved by the Commission. Participating municipalities and other participating customers will be required to make a one-time up-front contribution toward the LED fixture cost as follows: Fixtures less than 20.000 Lumen $14.52 per fixture Fixtures 20,000 Lumen and greater $21.82 per fixture

(Cont’d on Sheet No. 20.1)

Attachment JCW-28 Page 5 of 6

I.U.R.C. NO. 17 REVISED SHEET NO. 20.2 INDIANA MICHIGAN POWER COMPANYSTATE OF INDIANA

TARIFF S.L.S. (Streetlighting Service)

ISSUED BY EFFECTIVE FOR SERVICE RENDERED TOBY L. THOMAS ON AND AFTER PRESIDENT FORT WAYNE, INDIANA ISSUED UNDER THE AUTHORITY OF THE

INDIANA UTILITY REGULATORY COMMISSION DATED IN CAUSE NO.

(Cont’d from Sheet No. 20)

PES Monthly Rate. (Tariff Code 534)

Price Per Lamp Per Month On Metallic or Concrete

Size of On Wood Poles Poles With Lamp in PES Type of With Overhead Overhead Underground Lumens Lamp Conversion Circuitry Circuitry Circuitry

1,000 Incandescent > LED -- -- 13.50 2,500 Incandescent > LED -- -- 18.95 4,000 Incandescent > LED -- -- 26.95

7,000 Mercury Vapor > LED 9.7560 14.5540 17.5035 20,000 Mercury Vapor > LED 14.6745 20.5230 23.7755 50,000 Mercury Vapor > LED -- 32.4220 --

16,000 High Pressure Sodium > LED 13.4025 19.7055 24.7560 25,500 High Pressure Sodium > LED 15.5230 21.9775 --

Rate for Traffic Control Signals.

For post type traffic director units, which are supplied energy for their operation but owned and maintained by the customer, having normally one lamp of 69 watts or less capacity burning at the same time except during a change in signal when no more than two lamps are burning simultaneously for a period not to exceed 15 percent of the total time to complete an entire cycle of signal changes, $3.00/Month.

Applicable Riders.

Monthly charges computed under this tariff shall be adjusted in accordance with the applicable Commission-approved rider(s) listed on Sheet No. 38.

Delayed Payment Charge.

All bills under this schedule shall be rendered and due monthly. If not paid within 17 days after the bill is mailed, there shall be added to bills of $3 or less, 10 percent of the amount of the bill; and to bills in excess of $3, there shall be added 10 percent of the first $3, plus 3 percent of the amount of the bill in excess of $3. Any governmental agency shall be allowed such additional period of time for payment of the net bill as the agency's normal fiscal operations required, not to exceed 30 days.

(Cont’d on Sheet No. 20.2)

Attachment JCW-28 Page 6 of 6