case 9153 9157, 9362 empower maryland 2015-2017...

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Case 9153 – 9157, 9362 EmPOWER Maryland 2015-2017 Plans

General Staff Overview & Comments

Energy Analysis and Planning Division

Commission Staff

October 20, 2014

Fork in the Road

2 Distinct Pathways: Aggressive & Status Quo

Status Quo Core Portfolio Set Maintain Bill Impacts Shortage in

contributions to GGRA, other policies

No Branding

Aggressive Innovative Programs Increased Bill Impacts,

Budgets Branding Efforts Meet/Exceed State &

Federal Policy Goals Re-evaluation of C/E,

including possibly NEBs

EmPOWER Goals Beyond 2015?

• Top Performing EE States: 1.8 – 2.6%

• EPA’s Section 111D, GGRA Goals, RPS, Reliability, Healthy Air Act and local SIP Plans

• Potential Study – December

• Cost-effectiveness Methods & Avoided Cost Definitions/Methodologies

• “Bottom Up Approach” Scenarios

• Bill impacts

• Gas goals?

2015-2017 Bill Impacts

Utility Avg Annual Residential Surcharge

A/C DLC

HW DLC

Dynamic Pricing

BGE $76.80 $50 $14 $18.14

DPL $69.12 $50 $0 $0

PE $78.36 $0 $0 $0

Pepco $91.68 $50 $0 $10.94

SMECO $78.12 $40 $0 $0

2-5% of Customer’s Avg 2014 Monthly Bill

2014 Progress / 2015-17 Plans

PIDD

• Should be reserved for actual research & development projects, not piloting mainstream program ideas

• Staff proposes having only 1 utility prepare to be the “incubator” of a program idea, unless otherwise warranted

• Utilities should set aside a 0.5% budget for PIDD • To explore:

– Commercial Duct Sealing – Winter peaking programs – Net Zero Homes (3rd Tier for New Homes) – Midstream Marketing for other measures (e.g, HVAC)

Program Mods & Oversight

• Allow flexibility for Utilities and key stakeholders to modify programs/budgets based on e.g., Energy Star specs, codes/standards, or market saturation changes

• Identify key stakeholders for affected programs, convene as a sub-group of the EmPOWER Planning Group.

• Quarterly review (as necessary) to review program and budget modifications

• Advance plan descriptions for seasonal bonuses

EmPOWER Branding

• What is EmPOWER Maryland? (Educate) • Why do Utilities care that I use less energy?

(Consumer stigma) • How can I have “control” over my energy use

or play a part in reliability? (Humanize) • Collaboration with MEA – putting EmPOWER

into the spotlight, umbrella messaging, showcases (e.g., look book) (Create demand)

Recommendation: • Request Commission approval for the Planning Group to

develop a comprehensive branding effort, and a scope of work to be provided for Commission review within 90 days from approval.

EM&V

• No Budget for DR • All “Other” Categories (except CVR) are essentially not evaluated

under current policy • Evaluation must be prioritized and value weighted • Some evaluation, market study or customer awareness work should

possibly be categorized as Admin or Marketing costs, as they fall under program design (e.g., Potential Study).

EMV budgets

constant dollars

Program costs

constant dollars

EM&V

Budget %

of Total

Budget

2015-2017 2015-2017

BGE 12,122,051$ 303,051,279$ 4.0%

PEPCO 5,758,000$ 143,983,000$ 4.0%

SMECO 1,918,459$ $ 47,961,468 4.0%

Delmarva 1,591,715$ 39,792,873$ 4.0%

PE 1,841,997$ 63,905,407$ 2.9%

Total 23,232,222$ 598,694,027$ 3.9%

EE&C EM&V

Table 1. Statewide Ex Ante Reported and Ex Post Estimated Savings

Gross Savings Net Savings

Gross

Realized

Savings

Ratio

2013 Full Year

Ex Ante

Reported

2013 Full Year

Ex Post

Evaluated

Effective

NTG Ratio*

2013 Full Year

Ex Post

Estimated

Annual Energy

Savings (MWh) 0.93 874,608 810,383 0.69 562,578

Utility Coincident

Peak Demand

Savings (kW)

1.00 124,912 125,531 0.68 85,584

* The Effective NTG Ratios reflect the ratios of total Net Energy and Demand Savings to total Ex Post Estimated

Gross Energy and Demand Savings.

Source: Navigant, Cadmus Analysis

Utility Sector

B/C

Ratio

2013

B/C

Ratio

2012

Statewide

All 1.81 1.71

C&I Sector 1.85 1.99

Residential

Sector 1.76 1.49

BGE

All 1.69 1.65


Residential

Sector 1.79 1.48

DPL

All 2.04 1.41


Residential

Sector 2.52 1.40

PE

All 0.81 1.11


Residential

Sector 0.71 1.16

Pepco

All 2.24 2.21


Residential

Sector 2.09 1.67

SMECO

All 1.70 1.46


Residential

Sector 1.71 1.55

EE Programs Cost-Effectiveness

Utility

B/C Ratio

2013

B/C Ratio

2012

BGE 1.79 1.48

DPL 2.52 1.40

PE 0.71 1.16

Pepco 2.09 1.67

SMECO 1.71 1.55

Statewide 1.76 1.49

Utility

B/C Ratio 2013

[B+C] / A

BGE 0.89

DPL 1.03

PE 0.40

Pepco 1.06

SMECO 1.10

Statewide 0.88

W/out Res Lighting

Residential Portfolios

Program BGE DPL PE PEPCO SMECO Statewide

Res

Appliances

Rebates

0.37 0.36 0.22 0.41 0.39 0.36

Res

Appliances

Recycling

3.43 2.94 1.95 4.24 3.15 3.27

Res HPwES 0.65 0.43 0.43 0.60 0.37 0.57

Res HVAC 0.69 0.78 0.22 0.76 0.89 0.66

Res Lighting 3.65 6.18 2.97 3.87 3.27 3.79

Res New

Construction 0.95 1.05 0.38 1.14 1.23 0.92

Res QHEC 1.37 1.82 0.41 1.50 1.83 1.26

Res Portfolio 1.79 2.52 0.71 2.09 1.71 1.76

Residential Programs

Program BGE DPL PE Pepco SMECO Statewide

C&I

Prescriptive 2.43 3.07 1.21 3.19 2.43 2.55

C&I Custom 0.82 1.12 1.18 2.03 0.58 1.11

C&I Small

Business

Direct Install

1.64 1.63 0.51 2.29 1.13 1.93

C&I New

Construction NAa 1.05 NA 1.85 NA 1.74

C&I Master

Metered

(Pepco only)

NA NA NA 0.94 NA 0.94

C&I Programs

Lighting

• Few changes to the program, and the Utilities have similar offerings. – Only PHI and SMECO offer ceiling fans and occupancy sensors. – SMECO is discontinuing specialty CFL after 2015.

• Moderate drop in energy savings, participants, and spending from 2012-14. – BGE anticipates spending to drop by a third. – Other Utilities expect modest increases in spending.

• Recommend approval of programs. – Provide update on cost difference between specialty CFLs and

LEDs. – Monitor success of ceiling fans and occupancy sensors.

Appliance Rebate

• Continuation of existing program with a new focus on higher-tiered appliances. – All Utilities are removing freezers and dehumidifiers.

– BGE, PHI and SMECO are offering a promotional increase in the HP hot water rebate.

• SMECO introducing On-line store to replace Dreamstreet.

• Energy savings and spending are both down from 2012-14. – Expected result from dropping the lower tiers.

– Far fewer eligible models.

• Recommending approval of plans. – If the On-line store is successful, consider expanding to

other Utilities.

Appliance Recycling

• Rebates are identical across all Utilities. • All Utilities are adding a $25 rebate for inefficient

dehumidifiers. • SMECO has an On-line store tie-in.

– Voucher to purchase EE products at On-line store. – $65 for refrigerator/freezer, $35 for RAC/dehumidifier

• Energy savings and spending are both are both showing a moderate increase from 2012-14.

• Recommending approval of plans, including SMECO’s On-line store tie-in.

QHEC

• All Utilities forecasting lower participation and energy savings due to focus on single family projects in the 2015-2017 program cycle

• Single vs Multi-family Particpation QHEC Participation

• Utilities: Investigating including LEDs • BGE: Offering a Master Meter QHEC • SMECO: Offering a Multifamily program that include QHECs • Recommendations

– Monitor the feasibility and cost-effectiveness of offering LEDs – Utilities should attempt to meet 35% participation rate forecasted by Pepco at the end of the 2015-2015

program cycle

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q1/Q

2 20

13

Q3/Q

4 20

13

Q1/Q

2 20

14

2015

-201

7 Cy

cle

Q1/Q

2 20

13

Q3/Q

4 20

13

Q1/Q

2 20

14

2015

-201

7 Cy

cle

Q1/Q

2 20

13

Q3/Q

4 20

13

Q1/Q

2 20

14

2015

-201

7 Cy

cle

Q1/Q

2 20

13

Q3/Q

4 20

13

Q1/Q

2 20

14

2015

-201

7 Cy

cle

Q1/Q

2 20

13

Q3/Q

4 20

13

Q1/Q

2 20

14

2015

-201

7 Cy

cle

BGE DPL PE Pepco SMECO

Multi

Single

Home Performance with ENERGY STAR

• Increase SIR requirement from 0.5 to 1.25 – BGE to increase SIR from 1.25 to 1.75 in PY 2016

• Utilities forecast higher participation achieved with lower budgets

• Third Party Energy Coach

• Recommendation: – Approve overall program design but deny

the SIR change.

– DPL submit updated forecasts,

potentially re-evaluate the other utilities

in early 2015

– Reconvene the financing work group

Assisted Home Performance with ENERGY STAR

• Rebate 75% of eligible measures, with a financing option for the remaining 25% for income qualified participants

• Recommendation:

– Approve SMECO’s program

– Deny a pilot of this program

for DPL and Pepco

HPwES Target Market

Annual Energy Use >15,000 kWh

Median home age 9 to 24 years

Owner Occupied

Detached Single Family

Home Valued > $400,000

Median income > $120,000

Adult ages 34-54

Married

College educated

Behavior

• Expansion of the current programs to more customers, with PE providing concentrated reports to Limited Income ratepayers.

• Varied forecasted saving methodologies

• Recommendation: – Approve program expansion

– Develop common methodology for

reporting savings

– PE not pursue including kits with

behavior reports

MWh Savings by Year

HVAC

Proposed Changes by the Utilities • BGE and PE: Discontinue HVAC Tune-ups • PHI: Allow builders of non-ENERGY STAR homes to qualify for geothermal rebates • BGE, PHI, and SMECO: Seasonal Bonus • Utilities: discontinue ductless Mini-Split Air Conditioners; add Multi Zone Ductless Mini-split Heat

Pump Incentive Structure • Current and Proposed Incentives

Staff Recommendations • Approve BGE & PE to discontinue HVAC Tune-ups • Approve PHI’s geothermal rebates to builders • Approve seasonal bonus for all utilities • Continue current incentive levels through 2015 • Move duct sealing back to HVAC • Offer additional incentives for completing both HPwES and HVAC jobs simultaneously

$0

$500

$1,000

$1,500

$2,000

Tier 3 CAC Tier 4 CAC Tier 3 ASHP Tier 4 ASHP GeothermalHeat Pump

Gas Furnace Tier 1Ductless

Mini-splitHeat Pump

Tier 2Ductless

Mini-splitHeat Pump

Multi ZoneDuctless

Mini-splitHeat Pump

Current Structure

Proposed Incentive

New Home Construction

• Utility offerings are identical, with each adding a Multi-family option. – Four Tiers/Rebates: Single family ($1,250); Townhouse

($750); Condo ($550); Multi-family ($400). – Must use Energy Star lighting in 90% of fixtures.

• Overall modest increase in energy savings and slight increase in spending from 2012-14. – DPL is forecasting a significant drop in energy savings, with

only a small drop in spending. – Limited amount of new construction in DPL territory.

• Recommending approval of plans, and monitoring of DPL’s program.

Schools

• Provide in-classroom education on EE with at home reinforcement through EE kits

• Total Program Cost Per Participant

• Recommendation:

– Approve SMECO

– Deny PE’s request due to kit saturation

– Deny use of PIDD for DPL and Pepco

PE SMECO

$125.39 $67.15

Master-Metered & Multifamily

Proposed Changes by the Utilities • Pepco: 3 tracks: QHEC and Appliance Recycling, Prescriptive, and Multi-Dwellings • DPL: 2 tracks: Prescriptive and Multi-Dwellings • BGE: new master-metered QHEC program; similar to residential QHEC • SMECO: new multifamily program with 4 tracks: includes QHEC, incentives for

building shell improvements and rebates for higher-cost appliances, HVAC and water heating equipment, and an energy advisor

Forecasted Performance • Cost to Achieve

Staff Recommendations

– Approve BGE’s master-metered QHEC program – Approve SMECO’s multifamily program – Have all Utilities separate costs based on bill type (residential vs. commercial) – Have other Utilities model the residential aspects of their programs after SMECO’s

BGE DPL Pepco SMECO

Reported $/kWh 2012-2014 N/A N/A $0.53 N/A

Forecasted $/kWh 2015-2017 Plans $0.49 $0.27 $0.44 $0.57

Small Business

• Changes to monthly demand usage requirement • Whole Building Bonus Incentive • Unsupported Forecasts • Recommendation:

– Approve the SB program – Require DPL and Pepco to provide updated forecasts based upon historical performance levels – Consider a tiered cap incentive for PE – BGE, PE, and SMECO should consider Whole Building Bonus Incentive

Small Business Behavior Pilot

• Energy reports for small business with efficiency collateral and email notifications

• 10,000 active participants

• Budget: $3.21 million over 3 years

• Recommendation: – Approve program as designed but only for one

year

– DPL and Pepco should file forecasts prior to consideration for approval

Prescriptive

• Prescriptive program is basically unchanged other than the inclusion of additional prescriptive measures

• DPL and PE: Agricultural measures • Annual MWh Savings

• Recommendations – Approve the Prescriptive program – Direct utilities to provide forecasts for measures

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2012 2013 2014 2015 2016 2017

BGE

DPL

PE

Pepco

SMECO

Agriculture

Proposed Changes by the Utilities • Utilities: Addition of Prescriptive measures related to agriculture Informal Results • Comparison Across Utilities

Staff Recommendations – Reconvene Working Group to address the issues of agricultural customers

Utility Current Status

BGE Can be residential, commercial, or both.

Incentives provided under Custom program.

DPL

Waiting on MEA potential study to see total number of agricultural customers. Offering Prescriptive measures.

Some customers on residential and commercial accounts. Will update filing if a large number of customers are on residential meters.

PE Typically commercial accounts. Offering Prescriptive measures.

Pepco Limited amount of accounts in their service territory

SMECO Can be residential, commercial, or both.

Custom

Proposed Changes by the Utilities • PHI: Whole Building Bonus • BGE, PE, and SMECO: C&I New Construction projects rebated under Custom • PE: RCx projects under Custom Incentive Structure • Incentives Under Custom Program


– Approve Whole Building Bonus – Approve moving C&I New Construction and RCx programs to Custom for the appropriate

Utility – Require PE to substantiate the difference in incentives, otherwise the incentives should be

consistent – Reconvene Working Group to discuss incentive structure

Utility General Custom Projects C&I New Construction Projects

BGE, SMECO 50% of total project cost; cap of $0.28/kWh 75% of incremental cost; cap of $0.28/kWh

PHI 50% of total project cost; cap of $0.28/kWh Standalone Program

PE 50% of total project cost; $0.05/kWh 50% of total project cost; $0.05/kWh

Upstream Lighting

• New Program offering by BGE and SMECO • Similar to Residential Lighting program

– Work with manufacturers and retailers to mark down price at point of purchase

• Concerns – Free Ridership – Possible Double Counting

• Recommendations: – Approve the Upstream Lighting program for BGE and SMECO – Direct the other utilities to monitor the program for possible

inclusion in their commercial portfolios – BGE and SMECO share with Stakeholders any mechanisms

designed to protect realization rates and prevent free ridership

Benchmarking & Energy Analytics and Customer Engagement Tools

• Automated Benchmarking Tool approved by Commission in Order No. 86366

• Energy Analytics and Customer Engagement Tools – Middle and Large Size Customers – New Techniques to give customers specific and detailed reports on

consumption, benchmark facilities and identify energy savings opportunities

• No Direct Energy Savings – Programs designed to direct customers to other programs

• Recommendations: – Approve the Benchmarking Tool and Energy Analytics and Customer

Engagement Tools – Direct BGE to track which commercial programs customers participate in after

engaging in these programs

Retrocommissioning/Building Tune-up

• No major changes • BGE – Change Name to Building Tune-ups

– 3 Services – $5,000 incentive for installation of monitoring

equipment

• Pepco and DPL – 5 Services – Whole Building Incentive

• Recommendations – Approve the Retrocommissioning/Building Tune-up

Program for each utility

Building Operator Certification (BOC)

• The BOC program offers an incentive to cover a portion of the cost of building operator certification programs

• Incentives cover 80% of the cost up to $1,000 • Pepco and DPL offers this program under their

Retrocommissioning program • PE offers this program under its Custom Program • Recommendations:

– Approve the stand alone BOC program for BGE – Direct BGE to track which BOC customers participate in other

commercial programs – Pepco, DPL and PE should monitor the results of the BGE

program and consider offering their respective programs as a stand alone program

Nonresidential New Construction

Proposed Changes by the Utilities • No major changes Current Trends in Participation • Completed Projects by Semi-Annual Period

Staff Recommendations – Approve program as it exists – Approve change in reporting for custom new

construction projects

0

10

20

30

Q1/Q2 2012 Q3/Q4 2012 Q1/Q2 2013 Q3/Q4 2013 Q1/Q2 2014DPL Pepco

Combined Heat and Power (CHP)

Proposed Changes by the Utilities • BGE and PHI: Increase Installation Incentive for Projects under 250

kW in size • BGE: Remove $1 million cap on production incentives Comparison of CHP Programs Nationally • Project Caps for Larger CHP Projects in U.S.

Staff Recommendations – Approve increase in installation incentives – Increase total project cap to $2.5 million for project over 1 MW in size – Considerations: right sizing, exporting, “critical infrastructure” – Increase marketing

State Project Size $ Cap per Project

New Jersey > 1 MW $3,000,000

New York > 1.3 MW $2,600,000

Rhode Island > 1 MW $3,000,000

California Payment capped at 3 MW; no project size limit $5,000,000

Conservation Voltage Reduction

• All Utilities have begun implementing CVR programs. – PE’s program is fully implemented; PE plans to keep

current level of savings. – BGE and SMECO have completed pilot programs; PHI pilot

is ongoing. – All but PE have AMI, which enhances CVR implementation.

• CVR has no impact on EmPOWER surcharges. • Recommending approval of plans.

– PHI needs to submit projected MWh and MW savings. – SMECO needs to submit projected MW savings. – PE should notify the Commission of any adjustments that

would materially affect savings.

Residential Demand Response

Proposed Changes by the Utilities • BGE: run a two-way thermostat pilot • PHI: upgrade older models of thermostats to two-way • SMECO: change incentive structure from 3 degree setback to 50% and 75% cycling levels • SMECO: run two pilots; one for smart thermostats and one for water heater demand response Current Trends in Demand Savings • Reported MW Savings By Semi-Annual Period

Staff Recommendations – Approve SMECO’s incentive structure change – Wait to run SMECO’s water heater demand response program until March – Approve BGE’s two-way thermostat pilot – Deny SMECO’s PIDD pilot for smart thermostats – Deny PHI’s plan to replace thermostats

-80.000

-60.000

-40.000

-20.000

0.000

20.000

40.000

Q1/Q2 2012 Q3/Q4 2012 Q1/Q2 2013 Q3/Q4 2013 Q1/Q2 2014

BGE DPL Pepco SMECO

Master-Metered Account Demand Response

Proposed Changes by the Utilities • Remove monthly reports and check distribution • Require all building residents to participate and at the same cycling level • Apply optional $25 equipment installation fee currently • Extend build-out date to December 31, 2015 • Remove $ 10 Building Manager Administrative Fee Current Trends in Demand Savings • Reported MW Savings By Semi-Annual Period

Staff Recommendations – Potentially discontinue the program after 2015 if the changes made to the program do not

improve the performance – Refile forecasts for 2015-2017 based on past performance for Pepco

0.000

0.100

0.200

0.300

0.400

Q1/Q2 2012 Q3/Q4 2012 Q1/Q2 2013 Q3/Q4 2013 Q1/Q2 2014

Small Commercial and Commercial Demand Response

Proposed Changes by the Utilities • No proposed changes Current Trends in Demand Savings • Reported MW Savings By Semi-Annual Period


– Approve programs as they exist – Refile forecasts for 2015-2017 based on past performance for PHI

0.000

0.500

1.000

1.500

2.000

2.500

Q1/Q2 2012 Q3/Q4 2012 Q1/Q2 2013 Q3/Q4 2013 Q1/Q2 2014DPL Pepco SMECO

case 9153 9157, 9362 empower maryland 2015-2017...

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